Strategic Marketing Plan for Bmw 3 Series Malaysia

STRATEGIC MARKETING PLAN FOR BMW 3 SERIES MALAYSIA

Abdulrahman Ringim

30085837

I. Executive Summary

BMW Malaysia Sdn Bhd is a joint venture between Bayerische Motoren Werke (BMW) AG, the world manufacturer of BMW vehicles based in Munich, Germany and Sime Darby Berhad. The establishment of this subsidiary in August 2003 reflects the BMW Group's confidence in the long-term future of Malaysia and its commitment to maintain and extend BMW's leading position in the premium market segment. BMW Malaysia activities cover the wholesale of BMW cars, spare parts and accessories, as well as the overall planning of sales, marketing, after-sales, and other related activities in Malaysia. Its dealership network covers 14 showrooms and workshops in various cities in Malaysia.

The BMW 3 Series a Mid-level Luxury Performance Sedan

Mid-level Luxury Performance Sedans are a unique product category in the vast field of automotives. Vehicles in this segment are engineered to provide maximum performance, and are intuitively designed with responsive suspension, powerful engines, and sleek exterior lines. The mid-level luxury performance sector is a crossover - a hybrid between gas-guzzling sports cars, fuel-efficient lower-level sedans, and expensive luxury vehicles. Mid-level luxury performance automobiles are as aesthetically pleasing as they are fun to drive. They are typically fitted with cutting-edge automotive technology to create an ultimate driving experience. They are performance cars first and family sedans second. These cars are built to perform and detailed to impress, aggressively attacking the road while smoothly accommodating their drivers. Pricing for these vehicles tends to fall between RM100, 000 and RM200,000, reaching no lower than RM90,000. Some cars in this segment can be upgraded with various packages and features, at which point prices may reach higher than RM500, 000.

II. Environmental Analysis

The External Environment

Competitive Pressures

Entry and Exit in the Market

Several manufacturers have recently tried to enter the mid-level luxury performance sedan market, while other brands have fallen considerably. For instance, Ford Motor Company's Jaguar brand lost nearly a third of their light vehicle sales during 2010. Their premium luxury sales notwithstanding, Jaguar has clearly lost a substantial amount of market share in lower-to-mid level sedans. Audi, however, has recently repositioned their A4 model to appeal to this target market. The basic 2.0 liter model starts at RM190,000 and churns out 200 horsepower. The price is considerably lower and the engine less potent than most cars in this segment; however, there is a 3.2 liter model available that offers 255 horsepower at a higher price. The vehicle itself is smaller, offering passenger volume among the lowest in its class. Several other brands have attempted to enter the mid-level luxury performance market segment, offering similarly priced cars with comparable features. Lexus has attempted to appeal to this audience with its IS 250 and IS 350 models, which the car maker labels as "Sports Luxury Sedans." The S 250 is available in rear-wheel drive and all wheel drive, and offers 204 horsepower, starting at just over $34,175. The IS 350 has considerably more power, offering 306 horsepower at a price just over RM200,000. However, Car and Driver magazine, an industry-specific publication, explains on its website that the IS model "is intended to be sporting and it handles confidently, but doesn't beat the class leading BMW 3 Series or Infiniti G35," noting further that "it's as frisky as Lexus gets."

Quote from Car and driver "The competition should have figured out a way to beat the BMW 3-series by now. It's not for lack of trying: Every so often, another carmaker will pitch a worthy competitor into the mix, but none has been able to knock the 3-series from its pedestal or even maintain its consistent brilliance."

Market

BMW Group Malaysia reported record sales of 3,564 BMW vehicles and 214 MINIs last year compared with 3,514 BMW vehicles and 201 MINIs in 2010. In a statement, the group also announced that its share of the Malaysian premium segment increased to 40% last year. Managing director Geoffrey Briscoe said: "While there were inevitable consequences to the automotive industry, both in Malaysia and abroad, due to the state of the global economy, we were optimistic that the circumstances in Malaysia would be different and remained committed to delivering the full range of BMW vehicles to Malaysia." The BMW 3 Series and 5 Series continued to be highly successful models in the market. "The BMW 3 Series, our best-selling model, was yet again the segment leader here in Malaysia, making it the fifth year in a row that the car has come in No. 1 in its segment. "This achievement showcases the timelessness of the 3 Series in terms of its design and its importance as a representation of premium in the automotive industry," said Briscoe.

Economic Environment

Political, Legal, and Regulatory Issues

The Malaysian government has taken a number of precautions to compete with imported cars. National cars receive 50% reduction in excise tax while imported cars get an import duty of 140 to 300% tax on passenger cars, 5 to 30% tax on automotive parts and components, 10% sales tax on all assessed vehicles. The imposition of very high import duties make owning a non Malaysian made car somewhat expensive. Import duties run to as high as 300%. Consequently the vast majority of cars in Malaysia are locally produced ones. Cost of maintenance and parts for foreign cars are also factors to be considered.

Changes in Technology

Socio cultural Trends

Today's society judges people on the type of car you drive. Society does not like to admit to this but it is very true. Manufactures know this happens and targets their markets by these thoughts. For example, anyone who drives a minivan is perceived as a soccer mom. This is because the manufactures target mini vans to mothers. Anyone who drives a nice vehicle is thought to be wealthy. No one wants to be seen driving an unattractive piece of junk because of what other people will think of him or her. Consumers also just