BMW's Marketing Strategy in India

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BMW tried to enter the Indian market in 1997 through a joint venture with the Hero Group , to produce luxury cars of 3 series and 5 series. The government rejected the proposal when BMW refused to invest US$ 50 million, as per the norms prescribed by the government, for entering into a Memorandum of Understanding (MoU). Instead, the company was willing to invest only around US$ 35 million. The company set up another venture in 2000 to sell high-end bikes priced at over Rs.450,000 . The bikes did not find many takers, and BMW was forced to halve the price. However, when sales were still low, BMW decided to exit the venture.

From the beginning, the company aimed at achieving a leading position in the market and planned to become the largest player in the Indian luxury automobile segment in a span of four years. Kronschnabl said, "Entering India was like qualifying for the Olympic Games. You don't go to the Olympics hoping to come second." Though India was far behind other markets which had a higher volume, BMW considered it to be an important market due to its high potential...

In June 2007, BMW launched its 5 series models in India. Initially four variants - two in diesel and two petrol were launched. Entering the country by launching high priced models was also a part of the company's strategy for the Indian market. According to Schaaf, "We believe that when you enter a new market, the business does not start with entry models. Our experience shows if you enter a market which has a relatively small target group, you need to build a premium image for the brand through the high-end models." Subsequently other models were introduced...

BMW's target client group in India included young up-and-coming entrepreneurs and corporate executives. It targeted young people who were looking for sporty looking cars. BMW did not look to reduce its price much compared to its competitors; instead it looked to provide more features for the same price. According to Kronschnabl, "The price is related to the value the customer gets and a BMW car owner gets more value for the price he pays. For instance, the 320i model comes with automatic transmission. Our total cost of ownership is low and our car price is reasonable." Within the premium segment, BMW catered to different price points...

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