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BMW's Marketing Strategy in China

Marketing Strategy @Tsinghua University
by

Richard Liu

on 7 December 2012

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Transcript of BMW's Marketing Strategy in China

Richard Liu
Tal Badt
Harry Fan
Susan Li
Alex Wang BMW in China
From Entry to Dominance Tsinghua IMBA -2, Group I 2012/05/23 Background BMW's Marketing Initiatives in China Competition BMW's Road in China Marketing Strategy The Three Levels of a Product Distribution Channels Positioning Map Product categories Motorcycles

Automobiles

Motorsport Price and Product Quality Strategies Promotion through PLC BMW's Concern Christoph Stark
The president and CEO of BMW Group Region China Porter’s 5 Forces Analysis Bargaining Power of Buyers (High)

Bargaining power of suppliers (Low)

Threat of new entrants (Low)

Threat of substitutes (Little)

Rivalry among firms (Strong) PEST Analysis Political
The trend of reducing trade barriers(+)
The development of regional economic integration around the world(+)
A new law of vehicle taxation(±)

Economic
Economic uncertainty (-)
High unemployment rate (-)
Increasing fuel prices (-)

Social
The environmental concerns (±)
The need of fuel-efficient and hybrid vehicles (+)

Technological
Technological innovation (+) BMW’s future challenges Legislation limiting the number of new cars, as a means to deal traffic congestion;
Legislative proposals to raise tax on cars with large engines – from the 660 Yuan maximum tax to 3600-5400 Yuan per year, to reduce greenhouse emissions;
Increased competition from local brands that are gaining fast the know-how and expertise needed and are steering themselves into the luxury car market as they build their brands;
International competitors biting into their market share – specifically Audi which surpassed it in domestic sales in the China market and still enjoys its first mover advantage and dominance in the government car market;
The development, production and perfection of more fuel efficient engines, due to rising gas prices; etc. Additional initiatives: Sponsorship of the 2008 Beijing Olympics
BMW Experience Day 2012
BMW pace
BMW Welt
BMW driving experience
BMW Sports portal
The BMW Club portal Auto Sales and Growth in China Competition in the Chinese Market Luxury car market and future growth

China: the “it” market for foreign competitors

Audi: the leader in domestic sales Competition in China Auto Sales and Growth in China Global Sales ($) Global Sales (%) BMW/MB/Audi Entry to the Chinese Market
- A New Strategic Initiative Why did BMW enter the Chinese market?
Biggest population
The fast rising Per capita income for urban residents
Growing disposable income
Developing car industry
Urbanization

The challenges BMW faced upon entry to China
Prior presence of major competitors
Consumer diversification
Difficulties to establish a complete sales service and manufacturing network
How to establish brand image
Full transcript