Read the following case carefully and answer all questions that follows:

BMW: BMW is the ultimate driving machine manufactured by German company: Bayerische Motoren Werke AG. BMW stands for both performance and Luxury Company founded in 1916 as an aircraft engine manufacturer and produced engines during World War I and II. It evolved into a motorcycle and automobile maker by the mid-20th century and today it is an internationally respected company and brand with 53 Billion Euros in revenues in 2008. BMWs logo is one of the most distinct and globally recognised ever created. The signature BMW roundel looks like a spinning propeller blade set against a blue sky background: originally thought to be a tribute to the companys founding days as an aircraft engine manufacturer. BMWs growth exploded in the 1980s and 1990s when it successfully targeted the growing market of Baby Boomers and Professional Yuppies who put work first and wanted a Car that Spoke of their success. The results: sporty sedans with exceptional performance and a brand that stood for prestige and achievement. At the turn of the century, consumers attitudes towards cars changed. Research showed that they cared less about the bragging rights of the BMW brand and instead desired a variety of design, size, price and style choices. As a result, the company took several steps to grow its product line by targeting specific market segments which resulted in unique premium price cars such as SUVs, convertibles, roadsters and less expensive compact cars. In addition, BMW redesigned its 3, 5 and 7 series cars and added unique features which created comfort, luxury and attract consumers away from competitors like Jaguar and Mercedes. BMW successfully launched X5 by targeting upper Liberals who achieved success in the 1990s, as these consumers needed a bigger car for their active lifestyles and growing families so BMW created high performance SUV. BMW also introduced convertibles and roadsters to target post-modern high income group that continues to attract attention with more showy, flamboyant cars. BMW uses a wide range of advertising tactics to reach each of its target markets but has kept the tagline The Ultimate Driving Machine for over 35 years. During that team US sales of BMW vehicles have grown from 15000units in 1974 to 250000 in 2009. BMW owners are very loyal to the brand. The company nurtures these loyal consumers and continues to research, innovative and reach out to specific segment groups year after year.

Questions:

1. Discuss the pros and cons of BMWs selective target marketing? What has the firm done well over the years and where could it improve?(20 marks)

2. BMWs sales slipped during the worldwide recession in 2008 and 2009. Is its segmentation strategy too selective? Why or Why not?(20 marks)