Success of Marketing Strategies - Term Paper Example

 «Success of Marketing Strategies» Any organized human activity, which is done in-group, will be most times constituted into an organization. So, Organization is a structure with a ‘collage’ of humans doing their allocated work under the supervision of a leader, for the benefit of the organization as well as them. These workers will normally be apportioned into different departments for better arrangement or streamlining of work. Among the many departments, which constitute an organization, the marketing department’s role is omnipresent and crucial, as it can only boost an organization through various strategies and crucially will reach the all important consumer. With every organization wanting to expand their reach and make an imprint in various markets, there will be enough opportunities for it, to initiate that expansion drive. So, when the organization has enough opportunities, it can set targets and formulate various strategies to achieve those targets and thereby beat off the competitors. Every organization’s survival and success in the light of stiff competition hinges on the success of its main or flagship product or service and how that product or service reaches the consumer. It is the ‘key’ that opens the door of success or profit. So, for an organization to survive in a competitive market, and to increase its profits in an optimum manner, its products have to be marketed optimally. Marketing department by using various options including advertisements will only boost an organization, by building a brand image for it, or for its products and thereby attracting the intended consumers. That is, only when the product or service is marketed optimally, it can reach the mind of the consumer through their eyes and ear. If the eyes and ears of the consumer is enticed, the mind of the consumer will get tuned towards the product or service and will push the consumer to buy or use the product and service. So, the organizations and its marketing department have to make an all round ‘attack’ on the sense organs of the human body to reach the mind of the consumers. So, the organizations’ strategies particularly marketing strategies can easily tune the consumer’s behaviour and buying habits and thus make its product or service an enticing one as well as an high selling and importantly an successful one. This paper will focus on the British product or car brand, BMW’s MINI and how its functioning processes as well as marketing strategies aided it to become one of the most successful consumer products of the world. Background Mini (branded as MINI or MINI Cooper now) is a British automotive brand, currently owned and manufactured by the German company, BMW Group. Launched in 1950’s, Mini through the decades became a one of the most popular cars in Britain, regarded by many as a fashionable icon. Mini was originally launched in 1959 by BMC (British Motor Corporation), after BMC was formed in 1952 with the merger of the Austin and Morris companies. That is, in later part of the 1950’s, BMC decided to introduce a small car which is high on mileage due to the Suez crisis. With Suez crisis at a heightened state, UK was not able to get the required oil from the Egypt friendly Gulf States. So, the UK government brought gasoline rationing back and that necessitated a fuel efficient car. So, BMC assigned Alec Issigonis to design a fuel efficient car and that only led to the introduction of Mini in 1959. In course of time, the ownership of Mini changed into the hands of Rover, as BMC changed into a new avatar. Under Rover’s tutelage, Mini was doing well without any extraordinary achievements and this is when the German automaker BMW came into the picture. BMW wanted to add a strong brand in the small car segment to its exiting model range of medium, big and luxury segment vehicles. So, it put is eyes on the Mini brand and thus acquired Rover, manufacturers of Mini. “In 1994, under Bernd Pischetsrieder, BMW took control of the Rover Group, which included the Mini, fitting an airbag to comply with European legislation.” (talkminis.com). After few years of functioning in alliance, it all came apart, when Rover started accumulating losses affecting BMW’s finances. “BMW's accounts, published on 28 March, confirmed that Rover's losses had increased to GBP 750 million in 1999 in comparison to GBP 642 million in 1998 despite significant re-structuring within Rover” (eironline). Apart from the bad management of Rover, the deteriorating strength of sterling against the euro also led to Rover’s losses. “…due to currency developments alone the BMW Group was losing more than GBP 1 million with Rover every day, a loss clearly not acceptable and economically viable any more” (eironline). By March 2000, Rover was still suffering massive losses, and so BMW decided to dispose it. By this action, BMW decided that it would stop nursing ''The English Patient,'' as its ailing Rover subsidiary was nicknamed. BMW sold Rover to Phoenix, a British consortium. After the selling of Rover, BMW realized the importance of Mini as a brand and so decided to keep it under their control. They even decided to manufacture of new Model of Mini, with the production facility being installed at Cowley. Even while planning to come up with a new model, BMW allowed Rover to manufacture and sell the run-out model of the old Mini. After the last of the Mini production had been sold, the 'Mini' name reverted to BMW ownership. BMW instead of the originally planned manufacturing site at Rover's Longbridge plant, BMW set up the manufacturing facility at the Oxford plant in Cowley, Oxford, United Kingdom, in what was historically the Pressed Steel Company body plant, thereby setting the stage for the launch of one of the successful and iconic product to come out of UK. BMW’s MINI as an optimal PRODUCT As BMW re-branded a successful Product, it had an optimal PRODUCT to launch. MINI was officially launched at the Paris motor show in 2000. When the car was launched at the Paris motor show, the entire management team was present at the show to introduce the car, including senior executives, Joachim Milberg and Dr Helmut Panke and designer, Frank Stephenson fielded any questions about the product itself. The car's brand name, MINI, was all-capitalized and the name Cooper was added by BMW to differentiate it from its Rover’s Mini. To distinguish from the earlier Minis manufactured by BMC and Rovers, and to provide it a new brand image, BMW decided to capitalize all the letters in the word Mini and it was also decided that all new MINIs would be known as MINI Coopers. The new 'BMW' MINI is technically unrelated to the old car but retains the classic transverse 4 cylinder, front-wheel-drive configuration and iconic "bulldog" stance of the original. Even while maintaining the old design and all, the new MINI has many technical advancements and important a forward evolution of the original car. “This new MINI was no longer powered by a British engine, but by a 1.6 liter Chrysler engine producing 90 horsepower in the base model and 115 horsepower in the MINI Cooper. While the design of the new MINI line is similar to the Mini of old, the new BMW MINI differs in size, but without compromising the handling quality. The new MINI does offer a much smoother ride and better ride quality than the older models, and the new MINIs are especially more comfortable on long rides” (Mini Cooper Forums, 2007). Frank Stephenson, designer of the car, used the show to make a comment how the car is a mix of both the old physical features and addition of new technical features: "The MINI Cooper is not a retro design car, but an evolution of the original. It has the genes and many of the characteristics of its predecessor, but is larger, more powerful, more muscular and more exciting than its predecessor." (Paternie, 2002). BMC and Rover’s Mini has earned an optimal brand image, before BMW took over. That brand image was further optimized by BMW only, as Rover did not ‘tape’ the ‘sleeping giant’. “The people at Rover didn't know the sleeping brand equity that was in the Mini” (Kiley 2004). Then, when BMW decided to re-launch Mini under new a unique brand, it did not modify Mini’s original brand identity and equity. BMW’s smart ability is that it understood that too much brand equity is locked into the mini Brand. So, it saw no benefit in fully changing the Mini brand. To further improve the Mini brand, BMW wanted its MINI to be identified as an independent brand in the premium segment. An independent brand that combines the good aspects of the old Mini as well as the new concepts of BMW. BMW thus wanted MINI to be identified as a iconic British car with German touches. Because of this new identity, BMW MINI was pitched directly at the young and well-to-do urbanites, apart from the traditional target group. BMW even while incorporating new technical features, BMW does not want to modify the successful older physical aspects. This way, they don’t want to compromise the brand integrity of Minis. The other aspect which had chance to influence the brand integrity of Mini is Technology. As BMW was know for its technical finesse, it incorporated all the effective technical parts in the new MINI. “Certainly an automaker can't put its head in the sand while technology passes it by, but integrating new technology into a brand while maintaining that brand's integrity can be tricky” (Brauer 2004) When BMW launched the brand, there was skepticism and non-resonance of the brand product among the prospective consumers, that whether it would match the success of the original. The British public was not impressed by the look of the new MINI. Many thought that the exterior of the MINI is huge, when compared to the original Mini. "It’s enormous – the original Mini was the best packaged car of all time – this is an example of how not to do it… it’s huge on the outside” (Adams 2008). But, all these skepticisms were blown away, when the performance of the car was appreciated by all sections of people from car experts to enthusiasts, common public, etc. That is, when the car was launched in the British market, it was tested by the prospective customers and all of them were impressed by its power, fuel-efficiency, comfort, etc. And these positive reviews overlooked the skepticism about whether the new brand can match up with the older and iconic Mini. With the success of the initial product, BMW came up with newer versions of MINI’s in the succeeding years with the same relative driveline and styles. So, BMW’s decision to launch a new product, after its dissociation from Rover, got off to a better start, with that initial success being maintained. To market a product, the product should be an optimal one and then only it can be marketed optimally. In the case of MINI, BMW cornered on an effective product, when it bought Rover to capture the iconic product of Mini. Then, when it decided to launch a newer and better product than the old one, there was a lot of scepticism. But, BMW overcame all these because it had an effective product in its hand. BMW MINI’s Price When deciding the price, the management team along with the crucial inputs from the marketing department has to consider the cost of manufacturing the product/service, the prices charged by rival competitions and what the costumers themselves are willing to pay. Also, as part of competitive pricing, the marketing department needs to review the prices quite often or every year along with the finance department and to look at how the budgeted targets can be achieved through the pricing matrix. In the case of BMW’s MINI, when it was first launched in the UK market, it was launched at a subsidized PRICING. As the product was a new one, replacing a already successful old one, BMW to entice the customers sold MINIs at a subsidized price. Also, to counter the scepticism that was prevailing among the British public, BMW thought reducing the price and keeping it competitive will be an effective strategy. So, it gave a subsidized price for its base version. “They are in effect subsidizing the Mini-1, the more sparsely equipped base version for the U.K.” (Brooke 2002). After the initial phase with MINI capturing a good share of UK consumer market and consumer’s minds, BMW started to avoid subsidizing and gave a competitive price to its MINI. Also, as the quality of the MINI was appreciated by the consumers, bringing back the price to a competitive one, did not have any negative impact. The customer’s expectation of a high quality product always reflects in pricing. That is, if the quality is high the price will be also be high. This will affect the strategy of the organization because they will be in a dilemma whether to go for a high priced quality product or low priced inferior quality product. In the case of BMW, it selected the former option, as it won’t want to compromise on quality. So, BMW raised the price of MINIs and even though European as well as British consumers expect subcompact cars to be cheaper, BMW did not band its MINI in that bracket. “Europeans expect subcompact cars to be cheap and affordable…. BMW… the only company to be able to justify a premium price for its MINI cars.” (egmcartech.com, 2007). Place aspect of BMW MINI BMW after launching MINI’s in number of auto shows from Paris to Detroit, sold the cars through its already well entrenched Dealer network - PLACE. At the time of MINI’s launch, the world auto industry does not witness favorable climate. British auto industry witnessed a major slump as many of the auto majors avoided investing in UK and also avoided opening its European operations or manufacturing facilities, instead opting for other European countries like Germany, France, etc. “ But an analysis by Germanyspellsbusiness.com and the Independent on Sunday has found that Britain is losing when it comes to new car-making projects. Toyota and Peugeot will next week announce where their plant for a European small car will be built. The short odds are on a site in northern France… It is clearly difficult for the car companies to invest in Britain. And it is not just a question of inefficiency or skills shortages, although these persist.” (Brierley, 2001). Also, the British car industry had virtually ground to a halt as every car company and manufacturing facilities were being sold off. But, when MINI was launched, it kind of worked as a whiff of fresh air. That is, even though many foreign car companies opted for Germany, a famous German company opted for UK. BMW’s choice of UK and its optimal launch of MINI, revigorated British auto industry. Importantly it boosted BMW’s dealership network, which was expecting a successful product in the small car segment. The other PLACE, MINI made an impact is USA. That is, before the launch of MINI, U.S. auto industry was mainly preoccupied with SUVs, with minimal interest in small cars. U.S. auto makers only thought about small cars as cheap econo-boxes. But, after the launch, MINI became a fashion icon like in Britain with sales reaching good proportions. With good brand placements like in the Hollywood film Italian Job, MINI was able to break in the US auto market with effective results. Japanese auto industry manufactured optimal small cars, better than others. Another important market place for MINI was Japan. But, Japanese carmakers were good at building small cars and they provided intense competition to the BMW both in its home market of Japan and also in the world market. But, with the launch of MINI, BMW was able to penetrate the tough Japanese market and consumers Western carmakers BMW’s Promotion The PROMOTIONS for the new MINI positioned it, as a pan-global small car In the external environment, there was a lot of criticism, skepticism as well as expectations for the MINI and BMW countered all these through its promotional activities. UK Government was not happy with BMW’s decision to dispose Rover, and so did not support their new venture. The British public had no faith in BMW’s new MINI. In the German side, after BMW sold Rover, its stock went up by nearly 30%. The British public had no faith in such an idea because they were enamored by the old Minis and were skeptical on whether the German BMW could replicate it. But, BMW’s promotion of its MINI by focusing on the rebranding aspect provided it good leverage. Normally, a Strong Brand can be re-modified and re-branded minimally, complete re-modification and re-branding should be avoided. If an old brand is re-branded, it should combine both the successful old features as well as the effective new concepts. As BMW followed this concept, it was able to entice the skeptical consumers/ Also, apart from focusing on traditional markets, brands with good performance can be marketed or promoted to new target groups as well. This is what BMW, when it focused on the young as well as urban section of the consumer segment. “July 2001 saw it hit the UK market - and to accompany the launch was an innovative marketing campaign, pitched directly at the young and well-to-do urbanites who's parents took the original to their hearts in the Sixties.” (Rendell, 2008). Conclusion Optimum performance of the car drove away the initial skepticism as it reached its millionth model in 2007, and also the facts are optimal - one in six cars sold by the BMW group was a Mini. “BMW Mini has been a stunning success – from somewhat uncertain beginnings in 2000 to production of the millionth model in April this year, export of cars to 80 countries around the world, and the definition of a whole new market segment.” (Timms, 2007). An organization can achieve optimal success and have a ubiquitous presence all over the world only when it formulates and implements effective strategies particularly marketing strategies, to entice the consumers and positively tune their behaviour. BMW was able to do it for its MINI, thus making it as one of the successful product to come out of United Kingdom. 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