BMW AG (Bried Description Of The Company) - Assignment Example

BMW AG Part I List of Extensions on 5-series model A driver assistance system to the BMW connected Drive that has astandard design different from the original version.2. Driver assistant system comprises of camera-based lane departure warning and collision warning that would integrate pedestrian warning system. The warning systems would also consist of installed brake functions. The lane departure warning would help in sensitizing the driver when out of lane by causing the steering wheel to vibrate.

Collision warning would help in detecting walking pedestrian or vehicles driving ahead. Collision warning system operates using an acoustic or visual warning program that alerts the driver of an imminent risk. The system also has the ability to initiate braking system if there is need.3. Extensions on their eight-cylinder models that helps in accentuating its speed during spring seasons.4. M sport exhausts system installation on BMW 650i Coupe or BMW 650I convertible models. M sport exhaust system, which is a motor-racing inspired device, helps in reducing the exhaust backpressure and assist the acoustics of the V8 power unit when the vehicle accelerates or decelerates (Bragman 1).5. Harman Kardon surrounds system installation on the 6-series models.

The new sound system allows the user to enjoy music while at the highest speed enroute.6. Touch controller for entry of characters in conjunction with optional navigation system professional.The new 6-series cars aims at providing high motor racing cars with a driver assistant system features of 5-series model. The new model would be relevant for use during spring. Since the extensions aims at improving the features of 5-series that already exist, the production fits line extension strategy. Part IILine Extension Advantages and Disadvantages Line extension strategy is advantageous to the company because of its low cost and risks involved compared to conventional strategies such as creation of new brands in the same line.

Economic advantage of line extension informs the decision by BMW group to advance from its 5 to 6 Series Models. Marketers can speculate and predict future trends in sales of extended brands compared to innovative brands newly introduced in into the market. BMW group’s decision to advance its BMW and MINI models was effective in increasing sales and heightening competitive edge for its rival companies in the industry. Existing consumer awareness renders brand extension as viable strategy compared to introduction of new brands in the market.

It is easier to create awareness and imagery for extended brand than brands that are new in the market. Extended brands have associations with the main brand and, therefore, easier to market that new brands. BMW group’s decision to extend its brand from 5 to 6 Series is feasible because it enhanced promotion of extended brand based on consumers’ knowledge of the main brand. Consumer trust on the main brand renders it easier to market extended brands compared to new brands. Extensions benefit from existing consumer trust.

Consumers have high likelihood of trying extended brands compared to new introductions into the market (Davis 74). BMW group’s strategy to extend from 5 to 6 Series feasible based on existing consumer trust. Although line extension may be advantageous as a marketing strategy, it has related disadvantages. It defames existing brand in the market. Extensions use features of existing brands, except for added or advantageous characteristics. It, therefore, introduces transformations of consumer trust in existing brands.

There are high probabilities that extensions may cannibalize existing brands. Cannibalization implies that existing brand’s sales reduces significantly because of high sales of the extension. In case of any negative market trend affecting the main brand, it may also affect its extension, as well. If the business or company fails to address the challenges, both brands may face double loss of consumer trust. BMW Group’s decision to extend from 5 to 6 Series is justified. The company should proceed to make further line extensions.

Works CitedBragman, Aaron. 2014 BMW 640 Gran Coupe. Chicago Tribune. Web. September 16, 2014. Accessed from http://www.chicagotribune.com/classified/automotive/sns-5-11552-2014-61883-20140916-story.html#page=1Davis, John. Competitive Success: How Branding Adds Value. Chichester, West Sussex, U.K: John Wiley, 2010. Print.