1. What are the pros and cons to BMW’s selective target marketing? What has the firm done well over the years and where could it improve?
When I see someone riding in a BMW, I know that they must be making good money. The stereotype for people who drive BMW’s is that they are rich, and these are the people that the people over at BMW target. The pros to targeting the higher income population is that they will be targeting people who are more likely to purchase their product. Since BMW is known as a luxury car, people who have lower incomes are less likely to purchase from them. The cons to the selective marketing are that by not advertising to lower income people, they have nothing to be motivated for. Someone could see a BMW ad, and be motivated to one day own one. Since the market is specifically the wealthier incomes, the lower income population may not be as aware of BMW. I see commercials for Mercedes all of the time now, and I know that I can’t afford one yet. As soon as I’m able too, I plan on making it a priority to purchase a Mercedes. The firm has done a great job of improving its vehicles over the years. They have added so many electronic features to its cars to stay up to date with technology. BMW also has come out with high-performance SUV’s for people with larger families and who are more active. To improve, I would suggest that they maybe create a model for the lower income population. Considering the majority of the population is middle-class or lower, there is a whole untapped market for BMW to reach.
2. BMW’s sales slipped during the worldwide recession in 2008 and 2009. Is its segmentation strategy too selective? Why or why not?
I would say that their strategy is not too selective. During the recession, everybody struggled. So to blame BMW for their strategy that had made them so successful in the first place would not be fair. I believe that their strategy could’ve actually helped them during that time. Since BMW is so selective, they are only targeting people that have money anyways. So money that they spend on advertising wasn’t necessarily being wasted.
Courtney from Study Moose