This is a marketing plan for BMW i3, an
electric car designed to meet sustainability needs of the market. The external
audit indicates that the product can exploit opportunities provided by
increasing concern over environmental sustainability, advances in communication
technology, as well as a recovering UK economy.
The objectives for marketing the vehicle
are as follows:
-
To achieve sales of 1,000 units in year 1
-
To achieve an increase of annual sales
of 50% for the next 3 years
-
To become the leader in the electric car
market within 5yrs
-
To build a strong brand identity as the
most reliable producer of quality electric cars in the market within 3 years
The main approach to promotion is
through direct marketing. This is to be done through email and phones. Other
elements to be used will be advertising and publicity. This marketing plan lays
an overall strategy. Further implementation-focused research should be
conducted and culminate into creation of a budget, an activity schedule, and
the actual content of the marketing message to be used.
BMW is among the leading auto industry
players in the UK (BMWi, 2014). The company has been in the process of
researching and creating sustainable auto solutions. This has been through
increased efficiency in its gas-engine models as well as creation of electric
cars. BMW i3 is an electric car designed to meet the world’s sustainability
needs while also helping consumers save on the cost of gas (Bragman, 2013). The
vehicle is designed to achieve maximum efficiency by combining lightness and
stability while also benefiting from enhanced safety features. The car is
designed to be a symbol of class and modesty, a feature that is designed to
make it attractive to people who desire but cannot afford premium brands in the
market (BMWi, 2014). The typical customers of BMW i3 are found in the urban
cities. These are likely to be people who drive regularly to work and business
engagements. With the company’s decision to enter full-scale production of BMW
i3 in 2013, this marketing plan aims at recommending strategies that can be used
to market the product, drive sales, and increase brand awareness.
A comprehensive analysis of the external
environment can be described using the PESTEL model which focuses on political,
economic, social, technological, environmental, and legal factors (Stasch,
2010). These help in identifying the opportunities and threats that arise from
the external environment.
Political-legal factors refer to the
attitude of the ruling class as well as the laws that are put in place to
regulate or facilitate trade (Paley, 2007). In the UK, marketing practices are
strongly regulated to ensure that unfair competition is minimised. Some of
these restrictions include prohibition of direct comparison between competing
products, and making of false claims about the functioning of the products. The
auto industry is also strongly regulated with strict provisions on quality and
requirements for fully-funded recalls in situations where products could end up
being faulty (Narla, 2013). On international trade, the UK auto presents
opportunities for competitors to sell within the UK with ease. This could
heighten the level of competition that local electric car companies could face.
This is especially with regards to other electric cars from outside the UK such
as Nissan New Leaf and Toyota Prius which are the electric whose functionality
and price range is comparable to that of BMW i3 (Toyota Corporation, 2014;
Nissan Great Britain, 2014).
Economic indicators such as the GDP
growth rate are useful for marketing analysis as they help project future
demand for products (Shaw, 2012). A growing economy signifies rise in future
demand while a declining economy signifies the opposite. In the UK, the economy
has been growing at a modest rate of between 0.5% and 1% between 2013 and 2014
(Trading Economics, 2014). This is as shown below:
The level of awareness on the need to
contribute to sustainability is becoming an important driver for consumption,
not just in the UK but also in other parts of the world (Trimble, Copeland,
MacIntyre and Smith, 2013). Governments and consumers are increasingly piling
pressure on organisations to ensure that products use and production process
minimise their contribution to the carbon blue-print (Gruden, 2014). The
manufacturing industry and the transport sector are known to be the highest
atmospheric polluters in the world. The attention of consumers, governments and
environmental lobbyists is therefore on them to ensure that energy efficiency
is enhanced (Trimble, Copeland, MacIntyre and Smith, 2013). The electric cars provide
an avenue through which the transport industry can contribute to the
sustainability agenda.
In spite of these trends, many
researchers concur that the willingness to see the environment sustained does
not translate into the willingness to accept lower quality products (Poczter
and Jankovic, 2014). This means that the organisations should ensure that their
production does not compromise on quality product features and functionalities
just because the sustainability agenda is being promoted. For the marketers,
this observation is a call to ensure that sustainability is just part of the
message, but not the core message. The core message ought to be on the product
characteristics that can influence consumers to purchase the products. Factors
such as price, stability, quiet travel, absence of raving engines facilitating
smooth travel, stability, safety features, and savings on the cost of gas are
likely to be more effective than simply focusing on the sustainable aspects of
the products.
The technological factors that impact
the business environment can be categorised into two: manufacturing
technologies, and communication technologies (Paley, 2007). The manufacturing
technologies facilitate the creation of new high quality products. Factors such
as the creation of electric cars and including enhancing features to sustain
the battery life to facilitate longer distance driving are among the focus of
electric car companies (Brown, 2013). In relation to communication, advances in
communication technologies provide immense opportunities for the marketers.
Smartphones are becoming very important to the UK market and are being used to
access the internet. This means internet and mobile marketing are emerging
opportunities that can be exploited to market the products.
The SWOT analysis is an ideal instrument
for establishing the strengths and weaknesses that are inherent to a product or
brand (Paswan, Blankson and Guzman, 2011). It helps in facilitating the
matching of strengths to opportunities with a view to creating strategies that
would be of the greatest benefit to the organisation. Threats and opportunities
are identified from the external audit while the strengths and weaknesses are
identified from the internal audit. BMW i3’s SWOT analysis is as tabulated
below:
Strengths
- Association with the strong BMW brand
- Strong product features
- Suitable pricing
|
Weaknesses
- The relatively low penetration of
electric cars
- Quality issues related to the BMW
brand
|
Opportunities
- Increasing profile of the
sustainability agenda
- Growing UK economy, albeit modestly
- Advances in communication
technologies
- Increasing sensitivity to austerity
among individuals
|
Threats
- Presence of competition from
electric car brands such as Nissan and Toyota
- Competition from gas-powered cars
- High preference of product
functionality over sustainability
|
Source: Trimble, Copeland, MacIntyre and
Smith, 2013; Gruden, 2014; Narla, 2013; Toyota Corporation, 2014; Nissan Great
Britain, 2014; Trading Economics, 2014
BMW is a strong brand, not only in the
UK, but also across the world (BMWi, 2014). It has a wide product range ranging
from utility to luxury brands. It has also developed a strong presence in the
market. For instance, by 2013, the company had strong ties with over 148
dealerships across the UK. This is a network that can easily be used to push
products in the market while the strong brand makes it easy for consumers to
adopt the products.
The main threat can be said to be
competition from comparable brands such as Nissan New Lead and Toyota Prius.
The BMW i3 retails for about $35,000 per unit. The Nissan New Leaf retails for
about $25,000 whole Toyota Prius retails for about $24,000 (Toyota Corporation,
2014; Nissan Great Britain, 2014). This means that BMW i3 is priced higher than
the competing brands. Besides, the product features are quite comparable to
those of the competitors. It makes them vulnerable to losing low end customers
that are price-sensitive. This threat can be overcome through strategic
branding where the product is marketed as an executive product for a certain
class. If this branding is successful, the organisation would be able to
attract customers who desire premium products but are not able to afford them.
Besides, BMW has a strong brand which can make it easy for the organisation to
inspire trust.
The main opportunity that can be
exploited in marketing BMW i3 is the advances on communication technology. It
makes it possible for successful marketing to be done using the internet and
mobile phones. The strong performance of BMW in the UK market is also expected
to provide an opportunity for the organisation to capitalise on the replacement
markets. The replacement markets target current owners of a product, but who
would want to purchase new cars.
Demand is expected to be driven by the
society’s drive to contribute to the sustainability agenda. This takes the form
of consuming products that utilise clean energy. The product’s features put it
in a good position to inspire customers who are out to enjoy clean and quiet
travel. As has been observed above, the desirable product features should be
the focal point of any marketing message as consumers will still value comfort
and product qualities more than its sustainability blueprint.
Objectives ought to be specific, measurable,
achievable, realistic, and time-bound (Paswan, Blankson and Guzman, 2011).
These elements must be considered in creating reliable marketing plans that can
be gauged and failure/success used to modify future marketing initiatives.
The marketing objectives for BMW i3 are
as follows:
-
To achieve sales of 1,000 units in 2014
-
To achieve an increase of annual sales
of 50% for the next 3 years
-
To become the leader in the electric car
market within 5yrs
-
To build a strong brand identity as the
most reliable producer of quality electric cars in the market within 3 years
The marketing strategy can be described
through reference to the strategic positioning, unique selling proposition, and
the marketing mix design.
The product positioning is the overall
psychological position that it is projected to occupy among consumers (Stasch,
2010). In this case, an appropriate positioning would be to project the product
as an executive product. This would be a high value product that is reserved
for a specific carder of clients: those who are sensitive to the environment,
desire nice and quiet travel, and are opinion leaders keen to make a statement
on how sustainability should be countered through their own consumption (BMWi,
2014). This would be a suitable positioning to apply to executives, young
managers, and urban dwellers seeking to be associated with this class.
In terms of the brand, this is a
product-intangible attribute that has more to do with image than it has to do
with the actual product features. Researchers have with time been able to
establish that product-intangible brand attributes tend to be more effective in
establishing a strong connection between the brand and the market (Shaw, 2012).
This is the rationale for this proposed positioning.
The unique selling proposition (USP) is
the message that is sent to signify what the product is about (Paswan, Blankson
and Guzman, 2011). It is the message that the organisation wants the brand or
product to be associated with most. In this BMW i3 marketing plan, the proposed
USP shall be “Clean and Quality Travel for the selected few”. This USP contains
three elements: the idea that the product helps in sustainability; the idea
that the product is of high quality; and the concept of class where only those
who consider themselves special consume the product. This latter idea is to
seek to get customers to express themselves through consumption of the product.
Target marketing is a concept in
strategic marketing that ensures that marketing efforts are concentrated on
capturing the most potent markets (Paley, 2007). In this case, the main target
market shall be the replacement market: those who already own cars but would
want to purchase the new electric model. The need to focus on the replacement
market is due to the fact that the industry rivalry is very high within the UK
auto market. Secondly, the modest rate of economic growth means that there are
very few customers whose income levels would increase dramatically to see them
demand for the cars if they were not able to do so before. Focus will be on the
urban population. The typical urban dweller is one who drives to work every day
and covers a constant mileage per day. They’d therefore be comfortable with the
electric car which can only cover a limited distance of about 100miles per full
battery.
The marketing mix strategy focuses on
the elements of the marketing mix and how each can be designed to create
synergy and enhance the performance of a product or brand. These are discussed
below:
The product is BMW i3, an electric car.
This product is designed to ensure that the battery life is prolonged (BMWi,
2014). The car comes accompanied with battery packs and charging gadgets. The
car is designed to give it physical attractiveness and stability while in
motion. It is also quiet and the absence of raving engine increases its level of
comfort. It is the typical product that a consumer would desire when looking
for quality transportation. These are the features that must be highlighted in
the marketing message.
Place strategies refer to the
distribution networks and efforts made to bring the product closer to the
customers. For BMW i3, its association with the BMW brand is set to be an
advantage. BMW already maintains a strong relationship with over 148 dealers
across the UK. This network shall be exploited to market the BMW i3 brand.
Since the focus is on the urban population, dealers that are strategically
placed in the main urban centres within the UK will be engaged.
The price plays a special psychological
role in defining how consumers perceive a product. Pricing the same as
competitors provides the perception that the products are of the same quality
while pricing above them signifies a higher quality. BMW i3 retails at $35,000
while competitors such as Toyota Prius and Nissan New Leaf retail at about
$25,000 (BMWi, 2014; Toyota Corporation, 2014; Nissan Great Britain, 2014).
This means that it is priced higher, an indication that it is of a higher
quality. This reinforces the USP which stresses on quality and class. The
payment process shall also be enhanced through trade-in provisions to encourage
its uptake in the market.
The cardinal consideration for
effectiveness in the promotional mix design is synergy (Paley, 2007). The
promotional mix elements should be implemented in a manner that conforms to
information consumption patterns of the target population while also
complementing each other in bringing about synergy. For this plan, the
promotional mix elements to be used will be direct marketing, advertisement,
publicity, and display marketing.
The main target for the BMW i3 is the
replacement market. The starting point is the current customers of BMW. It is
expected that such customers would be easily accessible with BMW having their
contact information. Direct marketing is therefore the most appropriate
strategy to dominate the company’s promotional strategy. Technological
advancements in communication can be exploited to make the direct marketing
initiatives more fruitful. Mobile marketing and email marketing shall therefore
be explored to contact target customers directly. The strong connection between
BMW and the motor dealers shall also be used to help in reaching customers that
the dealers have dealt with in the past.
Advertisement shall be used as a tool
for raising brand awareness in the market. The use of television and print
media shall ensure that there a high level of awareness across the UK. This
shall be complemented through publicity where the main focus shall be on
highlighting the product features and why the customers should want to use
them. Avenues for publicity shall include industry motor shows where products
are compared for their quality.
The internet shall also be used to
attract internet users and for purposes of ensuring that product information is
provided in detail. This is to help consumers make informed choices regarding
the product features. An additional invention on online marketing should be a
link providing the location of dealers stocking the BMW i3. This would facilitate
enquiry and test driving.
In summary, the promotional mix for BMW
i3 shall include online advertisement, direct marketing on email and phones,
advertisement on television and print media, and publicity.
The scope of this paper does not include
the creation of a budget. This section therefore recommends on the budgeting
process and how to ensure that budget outlays are implemented as planned. The
budgeting process and control shall therefore be incorporated into the mechanisms
established to ensure that there is control.
A budget committee shall be created. Its
work shall be to create budget estimates and work in conjunction with the
finance department to have them approved. The overall budget shall then be
broken down into monthly and quarterly budgets to guide how activities are
implemented. Budget reviews shall be done on a monthly basis to ensure that
adjustments are made when there is need.
The job of the implementation and
control team will be to ensure that the marketing objectives are being achieved
as desired. The objectives set out in section 4 above shall be broken down into
quarterly terms to ensure that progress is monitored in a timely manner. Any
anomalies shall be noted and subjected to the committee for evaluation and
remedies recommended. The range of variables and reactionary measures shall be
as outlined in the section below.
Anticipated
outcome
|
Impact
on Marketing budget and schedule
|
Remedy
approach
|
Sharp increases in ad space prices
|
High
|
- Thorough background study to prevent
inaccuracies
- Bid to alter the marketing budget
fronted for approval by the relevant authorities
- Review of marketing program to
contain the activities within the cost
|
Delays in marketing schedule
|
High
|
- This eventuality can be minimised
through effective and realistic planning of marketing events
- Delays can be covered up by
fast-tracking activities with reasonable lead times
|
Poor response to the marketing message
|
High
|
- Thorough research on the market preferences
should be done to assure accuracy of marketing message design
- Pilot marketing initiatives should
be run to test the market for impact before the actual launch
- Outsourcing of some elements of the
marketing program can be done to seasoned marketing agencies with the
experience and skills needed
- Failure should be countered by
temporary halting of the program to create room for redesign and re-launch
|
Better than expected results
|
Moderate
|
The company can either push ahead to
drive up market performance or cut down on the budget to prioritise other
business areas. The decision should be made in consultation with the
marketing committee and other managers
|
Even though the budget for the plan has
not been provided, this marketing plan provides important guides on how the
organisation can market BMW i3 effectively in the market. The main approach to
promotion is direct marketing. This is because the primary target is the
current customers of BMW who may wish to purchase the new model. The
organisation already has their contacts and has already developed the rapport
needed to make direct marketing effective.
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