With increasing awareness of environmental protection, mass concerns about the exhaustion of oil and global warming, electric car – a product of new era – was borned with global expectation and huge future development. Ever since created the first electric car BMW1602 in 1969, BMW has continually been committed to develop electric car into wider practice. After many years’ research and hard work, BMW is planning to launch the first commercial electric car –BMWi 3- in the market in 2013.
According to “the electric vehicle study” conducted by Zpryme Research &Consulting, LLC in US, December 2010, a substantial group said they were very likely (8.5%) or somewhat likely (28.7%) to purchase an electric vehicle in the next two years (Figure1), only 1.1% indicated they were very likely and 25.8% did indicate they were somewhat likely to purchase an EV in the next five years (Figure 2).
Therefore, how to grasp this market and find out targeting customers are essential for BMWi 3.
This report mainly focus on the situation analysis of BMWi 3 and make strategies for itydxecs promotion, generating sales through concise and effective utility of relationship and direct marketing.
2. Situation Analysis
According to a report from BBC, the price of an electric car is usually at least $10,000 (£6,400) more than its petrol-engined equicalent. For example, the California-based Tesla roadster costs around £90,000. While the price of BMWi 3 is only £35,000. Obviously, BMWi 3 obtains the advantage of acceptable price with reliability which is guaranteed by the brand performance of BMW. Furthermore, compared with other eletric vehicles available in UK market, BMWi is designed more spacious with four seats inside (Appendix1. most of the electric vehicles in UK only has two seats).
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2.1 Brand Analysis
The inspiringly designed visionary vehicle BMWi3 can be described as an eco-friendly, innovative, energy-efficiency and refined brand. It adopts an all-embracing approach of personal mobility with purpose-built concepts, concentrating on sustainability and a brand-new value chain. Figure 3summaried 6 facets of brand identity according to Kapferer (1997)
Figure 3. Brand Identity Prism
* Lightweight design
* Energy efficiency
* High performance
* High achievement
* High performance
2.2 SWOT Analysis
Analysing the context in which marketing decisions take place is a vital step in the planning process (Fill 2005).
In order to understand the current issues facing BMWi 3, a SWOT analysis was conducted.
Table 1 SWOT Analysis
BMW * Country of origin assurance * Good after-sales service * Strong R&D, marketing team and skills * Strong brand equity, brand awareness and reputation * The leading luxurious car manufacturer * Extensive customer database | BMWi * Featuring eco-friendly * Super light and super strong carbon fibres * Spacious and dynamic compared to cars of the similar size * Innovative battery technology and an intelligent engine management system * Comparatively acceptable price |
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BMW * Corporate image of BMW is too serious and tradition-bound * Lack of new excitement * Higher insurance costs | BMWi * Lack of experience * Lack of awareness * Less battery charging stations * Lack of technology in improving battery life |
* Large amount of existing BMW customers * Owning the brand reputation but cheaper than other BMW cars * Conform to the environment protection trend * More and more public interests in electric vehicles * long-term perspective due to the increasing petrol prices |
* Competition from the traditional fuel automobiles * Exchange rate fluctuation * The technology is too new for customers to accept * Lack of customer confidence in electric cars. |
* In order to conquer the weaknesses like lack of awareness, well communication strategies are needed in further steps.
* faced the threats, BMWi 3 is expected to conduct promotion activities or advertising to improve brand image and strengthen relationship with target customers.
2.3 PEST Analysis
Another important framework for the comprehension of macro-environmental factors which influence the business is the PEST analysis. The following points reflect the most relevant issues which may affect BMWi3’s possible operations in UK market (See Table 2).
Table 2 PEST Analysis
* Restriction on CO2 emission * An eco-friendly car grant from the government * Government imposes new road tax depend on a car’s emission |
* Standard slow growth of economy in UK * Increasing raw material and petrol prices * Currency fluctuation * Global Warming affect global economy |
* Emerging car problems, e.g. CO2 emission, parking space and traffic congestion * Environment protection becomes mainstream, people pay more attention to “eco-sustainable” cars * Average period of a car’s usage：6-9 years * Increasing poverty gap |
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* New technology of electric engine emerges * New material of car body, e.g. Aluminum (stronger than steel, lighter and recycle totally); * Human centre design creates more possibilities in car, such as office work, travel, entertainment * More demands on technology for a safer, entertaining and cheaper cars |
3. Segmentation and Target
Market segmentation is the process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.’(Market online, 2010)
Tesla Roadster is the first electric car on the road worldly, which was launched in 2008. Through July 2009, Tesla has sold over 500 Roadster, each retailing at over $100,000. Surprising, about half of Tesla’s sales came from owners of non-luxury makes. Toyota, Mercedes-Benz, and Lexus are the brands Tesla buyers tend to own, with 39 percent of Tesla buyers also owning these vehicles (Figure 3).
According tothe survey conducted by Zpryme:
* more of those who were likely to purchase an EV in the next two years were younger, with 66.0% 40 years older or younger.
* Over half of the likely group was male (51.9%).
* Those likely to purchase tended to have more education: 78.7% had at least some college, 21.3% had only a high school diploma/GED or less.
* Household incomes of those likely to purchase about evenly divided with those earning $50,000 or less composing 47.3% of the sample, and those over $50,000 in 52.7%. While the income of those not likely to purchase were relatively lower than those likely to purchase.
* Those that currently own an EV are likely to repurchase one.
* Those likely to purchase an EV were more environmentally concerned than those unlikely to purchase an EV
* Over half are familiar with American branded Evs (Ford, Chevrolet).
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* Within the likely group, the information about purchasing a vehicle was obtained from: internet (73.7%), dealership (50.0%), Kelly Blue Book (44.1%), etc.
* Usage of an EV as a primary vehicle would more often be the choice of 77.7% of the people, while 22.3% said an EV would become a secondary vehicle.
According to a report provided by Deloitte, the early adopters of EV’s will be young, very high income individuals – adoption is already being popularized by high-profile celebrities. The early majority tend to reside in urban or suburban areas, but nearly 90 percent have garages with electric power (which resolves the challenge of charging the EV).
Their weekly mileage is low – about 100 miles (Figure 4).
Figure 4. Early majority profile
EV Perception | Top purchase influencer | HHI | Gender | Location | Garage | Miles per week |
“Green and Clean” | Reliability | $114K | 67% Male | Urban and suburban | 88% have garage with power | 100 |
Taking all the above information into consideration, the taget profile of BMWi 3 is shown as follow:
Category | Group | Specification |
Demographic characteristics | Age | 35 – 45 |
| Gender | More than half are men |
| Income | High income |
| Education | High education |
| Car usage | Individual use |
Geographic characteristic | Region | Urban and suburban |
Psychographic characteristics | Environmental concerns | Quite environmentally conscious |
| Habit | Technology follower, new thing, |
| Personality | Practical, fashionable |
| Purchaing behavior | Save money for fuel costs,Willing to spend more money on an EV than on conventional vehicle.If they own or owned another car: most of them are non-luxury car owners |
| Lifestyle | Green focused, safety focused, a simple and quick way of life, performance |