Comparative Study of Bmw v/s Mercedes

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EXECUTIVE

SUMMARY

Executive Summary

The motive of this essay is to give clear information about BMW ags entry into the luxury and premium automobile sector. The flow of the essay would start with the background and introduction about the company, then coming over to the mark et factors that led company to enter INDIA, also about the

entry strategy in ter ms of corporate decisions they took for doing business in INDIA and what compani es present strategy in INDIA is to gain the market share.

Bayerische Motoren Werke G. m. b. H. Started operations in 1918, the foundation stone was laid as late as 1916 as Bayerische Flugzeugwerke AG (BFW), it then cha nged into Bayerische Motoren Werke Aktiengesellschaft (BMW AG) in 1918.

In todays date. The list of ten largest automobile manufacturers features BMW g roup and even possess the brands like MINI and Rolls-Royce, the trio being the c ore heart of super luxury brands in the worlds industry.

The BMW GROUPS financial services also have a boosted stand in market and also the motorcycle sector is doing business successfully. BMW INDIA Company setting up headquarter in gurgaon (the ncr) BMW

INDIA is 100% subsidiary of the BMW group. The investment initially in INDIA is around 1.4 billion INDIA n rupees. BMW INDIA is a German producer of cars and motorcycles marketed under flagship of BMW brand In 2006 BMW focussed on one of the biggest and

fastest growing market of luxury and niche car sector which is INDIA and also looking at the fate of the competit or Daimler Benz, grounded their tents in INDIA. Also allowing space for more inv estments in INDIA following financial year for over 30 million again in addition the initial

investment done. This is all for the premium automobile sector mark et in INDIA which consist of about 1.3% which is in percent a small figure but w hen it comes to numbers it is around 10 million perspective customers in INDIA a nd with the current market and economy this figure will certainly

go up at the r apid speed Now coming up to the factors which led BMW AG to invest as fdi into INDIA.

TABLE OF CONTENTS Company Profile BMW Company Potrait

Company Management Business Intrest Corporate Facts

Mercedes-Benz Introduction

Hypothesis

Social Involvement Research & Development SWOT Analysis

Reseaarch Methodology

Data Analysis Findings Bibliography Annexure Questionnare

COMPANY

PROFILE

BMW Motoren

Company Potrait

Strategy

Identifying potential and encouraging growth. Knowing what we represent. Recognising where our strengths lie and making the best use of every opportunity. Following a clear strategy. Goals we have attained are in essence the point of departure for new challenges. This is the philosophy

that inspires every individual at the BMW Group. It influences the company's structure and it plays a vital role in the decision-making process. Our corporate ethos finds its expression in the uncompromising pursuit of the superlative. The result? Outstanding brands with an unmistakable

profile. Automobiles and motorcycles which fascinate people all over the world and which win legions of new admirers every day. And a degree of success which sees the BMW Group go from strength to strength.

With the three brands, BMW, MINI and Rolls-Royce Motor Cars, the BMW Group has its sights set firmly on the premium sector of the international automobile market. To achieve its aims, the company knows how to deploy its strengths with an efficiency that is unmatched in the automotive industry.

The strategic objective is clearly defined: The BMW Group is the leading provider of premium products and premium services for individual mobility.

Company Management

The board of management. The board of management consists of six members plus the chairman of the board.

Dr. - Ing. Norbert Reithofer Chairman of the Board of Management Frank-Peter Arndt Production

Dr. Friedrich Eichiner Finance Dr. - Ing. Herbert Diess Purchasing and Supplier Network

Harald Krger Human Resources, Industrial Relations Director

Dr. - Ing. Klaus Draeger Development

Ian Robertson Sales and Marketing

Supervisory Board. In accordance with the regulations contained in the German Co-

determination Act, BMW AG's Supervisory Board comprises ten shareholder representatives (elected by the Annual General Meeting) and ten employee representatives (elected by the employees):

Prof. Dr.-Ing. Dr. h.c. Dr.-Ing. E.h.Joachim Milberg, Chairman Manfred Schoch*, Deputy Chairman Stefan Quandt, Deputy Chairman Stefan Schmid*, Deputy Chairman

Dr. Karl-Ludwig Kley, Deputy Chairman

Bertin Eichler* Franz Markus Haniel

Prof. Dr. Reinhard Httl Prof. Dr. rer. nat. Dr.-Ing. Henning Kagermann Susanne Klatten Prof. Dr. Renate Kcher

Robert W. Lane Horst Lischka* Willibald Lw* Wolfgang Mayrhuber

Werner Neugebauer* Franz Oberlnder* Anton Ruf* Maria Schmidt*

Werner Zierer*

*employee representatives

Business Intrest

Along with its automotive concerns, the BMW Group's activities comprise the development, production and marketing of motorcycles, as well as comprehensive financial services for private and business customers:

Automobiles. With BMW, MINI and Rolls-Royce Motor Cars, the BMW Group is the world's only car maker to pursue a purely premium strategy for all market sectors covered by its brands, from exclusive smaller cars to top-of-the-

range luxury limousines.

Motorcycles. Premium is the key word for BMW Group motorcycles as well. We have

enjoyed great success with our strategy: to develop and build the best motorcycles, set standards with regard to technology, environmental protection and safety, and provide outstanding customer service in the preand after-sales phases.

Financial services. We see financial services as a key factor for success in today's mobile world. We have established an extensive product portfolio which supplies

expert information and advice for situations and questions relating to the finance sector. We provide the following services: financing and leasing, asset management, dealer financing and company car pools.

Locations

Headquarters. BMW Group activities worldwide are co-ordinated from the corporations head office in Munich. A city landmark, the four-cylinder tower at the Olympic park is the nerve centre for an organisation which covers over 150

countries.

Research and development. The BMW Group recognises the importance of being present in markets

around the world in order to recognise trends early on and harness them to create innovations for tomorrow. Our research and development centres are: BMW Group Research and Innovation Center (FIZ), Munich; BMW Group Research and Technology,

Munich; BMW Group Car IT, Munich; Innovation and Technology Center in Landshut Plant; BMW Group Designworks, Newbury Park, USA; BMW Group Engineering and Emissions Test Center, Oxnard, USA; BMW Group Technology Office, Palo Alto, USA; BMW Motoren GmbH Steyr, Austria;

BMW Group Technology Office, Tokyo, Japan; BMW Group Development Office, Beijing, China.

Produktion. The worldwide production network of the BMW Group is the backbone for

growth in all our global markets. Thanks to the close cooperation between all of the plants, manufacturing takes place quickly and flexibly. This creates significant advantages in the international market. The BMW Group currently has 17 production facilities in six countries:

Berlin plant, Dingolfing plant, Eisenach plant, Contract production in Graz (Austria), Goodwood plant (GB), Hams Hall plant (GB), Landshut plant, Leipzig plant, Munich plant, Oxford plant (GB), Regensburg plant, Rosslyn plant (South Africa), Shenyang plant (China), Spartanburg plant (USA),

Steyr plant (Austria), Swindon plant (GB), Wackersdorf plant.

Assembly. he BMW Group currently engages in assembly with the help of external

partners in the following countries: Jakarta, Indonesia; Kaliningrad, Russia; Cairo, Egypt; Kuala Lumpur, Malaysia; Rayong, Thailand; Chennai, India.

Sales and marketing. The BMW Group is committed to maintaining and enhancing its presence in key markets worldwide. BMW Group marketing subsidiaries are present in the following countries:

Argentina, Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Great Britain, Greece, Hungary, Indonesia, Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, Netherlands, New Zealand, Norway, Singapore, Poland, Portugal, Russia, South Africa, South Korea,

Spain, Sweden, Switzerland, Thailand, USA

Compliance

The BMW Group's corporate culture is shaped by clear responsibility, mutual respect and trust. However, the risk of violations arising from individual misconduct can never be completely ruled out. The BMW Group makes every effort to minimize these risks wherever possible. For this

purpose, a Compliance Organization has been created and equipped with measures and instruments to help employees and managers avoid legal risks. The focus of the BMW Group Compliance Organization is on ensuring legal compliance. Together with the BMW Group's environment and social

initiatives, it forms the cornerstones of its corporate responsibility.

The elements of the Compliance Organization apply to all BMW Group units worldwide. Where additional compliance requirements exist in

individual countries or business sectors, these will be met by adopting local or business-specific compliance measures.

CORPORATE FACTS

CORPORATE STRATEGY

Identifying potential and encouraging growth. Knowing what we represent. Recognising where our strengths lie and making the best use of every opportunity. Following a clear strategy. Goals we have attained are in essence the point of departure for new challenges. This is the philosophy

that inspires every individual at the BMW Group. It influences the company's structure and it plays a vital role in the decision-making process. Our corporate ethos finds its expression in the uncompromising pursuit of the superlative. The result? Outstanding brands with an unmistakable

profile. Automobiles and motorcycles which fascinate people all over the world and which win legions of new admirers every day. And a degree of success which sees the BMW Group go from strength to strength.

With the three brands, BMW, MINI and Rolls-Royce Motor Cars, the BMW Group has its sights set firmly on the premium sector of the international automobile market. To achieve its aims, the company knows how to deploy its strengths with an efficiency that is unmatched in the automotive industry.

The strategic objective is clearly defined: The BMW Group is the leading provider of premium products and premium services for individual mobility.

Financial Overview

2005 2006 2007 2008 2009 Capital expenditure as a percentage 8.6 8.8 7.6 7.9 6.8 of revenues Operating Cash Flow as a percentage 161.3 125.8 152.4 108.7 144.4

of capital expenditures in Automobiles Segment* Return of sales before taxes Equity ratio Industrial operations* Financial operations** Equity as a percentage of non7 39.1 10.4 35.7 8.4 40.6 10.4 37.9 6.9 41.2 6.9 38.4 0.7 42.3 5.4 32.5 0.8 41.7 6.0 32.1

current assets Non-current provisions and liabilities 62.1 as a percentage of non-current assets * Industrial operations until 2006 - from 2007 on Automobiles segment ** Financial operations until 2006 - from 2007 on Fnancial Services 62.1 59.1 66.5 72.8

segment

Revenues

2005 2006 2007 2008 2009 46,656 48,999 56,018 53,197 50,681

Capital expenditure Operating Cash Flow Depreciation and amortisation Equity Balance sheet total Non-current assets Non-current provisions and

3,993 6,184 3,025 16,973 74,566 47,556 29,509

4,313 5,373 3,272 19,130 79,057 50,514 31,372

4,267 4,204 3,471 6,246 4,471 4,921 3,683 3,676 3,603 21,744 20,273 19,915 88,997 101,086 101,953 56,619 62,416 62,009 33,469 41,526 45,119

liabilities Profit before tax Income taxes Net profit/-loss for the year

3,287 1,048 2,239

4,124 3,873 1,250 739 2,874 3,134

351 21 330

413 203 210

Corporate Governance

Background. Management and supervisory boards of companies listed in Germany are required by law (161 German Stock Corporation Act) to report once a year whether the German Corporate Governance Code (in the relevant version)

has been, and is being, complied with. Companies affected are also required to state which of the recommendations of the Code have not been, or are not being, applied.

Corporate governance in the BMW Group. For the BMW Group, corporate governance is an all-embracing issue which affects all areas of the enterprise. Transparent reporting and a policy of corporate governance aimed at the interests of stakeholders are well-

established traditions within the BMW Group. Cooperation between the Board of Management and the Supervisory Board, in an atmosphere of commonly shared trust and responsibility, has long been the basis for managing the affairs of the BMW Group. The underlying corporate culture

at BMW is founded upon the principles of transparency, placing trust in others and taking responsibility for one's own actions.

The Board of Management and Supervisory Board of Bayerische Motoren

Werke Aktiengesellschaft believe that the recommendations and suggestions contained in the German Corporate Governance Code contribute to an enhancement of the financial markets in Germany, in particular for international investors. The implementation of the Code in Germany has

established standards for corporate governance which address the interests of shareholders and other stakeholders alike. The German Corporate Governance Code is especially suited to achieving this objective.

The Board of Management and Supervisory Board are in favour of the recommendations and suggestions contained therein and have developed a corporate governance code for the BMW Group, taking account of the specific circumstances of the BMW Group. The aim is to provide

shareholders and other stakeholders with a comprehensive and standalone document covering the corporate governance practises applied by the BMW Group.

A coordinator responsible for all corporate governance issues reports directly and on a regular basis to the Board of Management and Supervisory Board

Sustainablity

The BMW Group's strategy is geared to longterm, profitable growth. In order to achieve this goal the company is carrying out the largest product

and market offensive in its history. In doing so the company consequently complies with the principles of sustainability, integrating not only economical, but also ecological and social factors into all decisions and processes.

It is the claim of BMW Group to substantiate the proposition of sustainability and integrate it in to daily business life. The targets are clearly defined: It is essential to use resources gently and efficiently within the

company, to recognise risks and to strengthen the Group' s reputation through responsible interaction with associates and society.

As a result we have been a member of the "Dow Jones Sustainability Group

Index" - the most important share index for companies dedicated to sustainable business management - since 1999. The rise in this index underpins that companies can also reap financial benefits through active involvement in social and environmental concerns.

PRODUCT LIFE CYCLE1. BMWs product life cycle is similar to the product life cycle on 111 because the overall shape is the same and so are the first two stages. It is different because BMW tries to keep its products in the first to

stages. It wants to keep them in the introductory and growth stages to keep sales high. The maturity and decline stages have lower sales, so they want to avoid those if possible.

2. To keep BMWs products in the first two stages of the product life cycle, they regularly introduce new models in the 3 and X series. In their seven-year product life cycle, BMW adds a new model each

year. This repositions them back in the introductory stage. They also continually modify the series. This is part of the growth stage, which is where the 3 and X series are currently. By adding new features and improving upon the original model they are

differentiating from competitors and gaining as much distribution as possible. 3. BMW utilizes the marketing strategies of modifying the product and modifying the market. BMW modifies its product by adding new

features and other capabilities to the car. They modify their market by expanding their market to different groups. In the past they expanded to women, African Americans, Asians, and Hispanics.

4. BMWs branding strategy is manufacturing. BMW sells various models from their dealership. Its use a multibranding strategy. BMW owns Rolls Royce and Mini as well. They also use multiproduct

branding. The automobiles of BMW are named differently. BMW strategically named it cars under the brand. All of the design names are clear and easy. For example, a 328 is a 3 series car with a 2.8-liter engine. This is a simple and effective branding strategy. Also BMW

vehicles are featured in many movies. This high visibility product placement creates a strong brand name and increase sales. 5. When creating a car online, I was able to chose my desired model and customize tomy personal preferences. I was able to choose the

color, interior, type of drive, and add in whatever accessories I wanted. I was able to include or disinclude anything I wanted. Also, it was easy to see the various options and what each package included.

This is good because personally I dont exactly know all the automobile terms.

MERCEDES BENZ

Mercedes-Benz has been associated with India for more than 50 years. Presently, Mercedes-Benz Indias engagement in India covers several domains:

Local production of Mercedes-Benz cars

Making available imported Mercedes-Benz cars Commercial Vehicle operations, Global sourcing of auto components Captive automotive technology research and development

Social Involvement of Mercedes-BenzMercedes-Benz is also involved with social-oriented programs across India like:

Biofuel from Jatropha

Road safety project for children Automotive education, etc.

Company Profile

Mercedes-Benz India has been delighting customers with strong brands and a wide range of products equipped with the latest in automotive technology. The company has been the pioneer of the luxury car segment in India with its inception way back in 1995. It is the only luxury car maker in India to

have such a wide range of cars. The different ranges available today are the S-Class, E-Class, C-Class, M-Class, CLS-Class, SLK-Class, CL-Class, GLClass and the Maybach. We have also already introduced our high performance AMG cars in India off late.

The depth of choices within these ranges is also extensive with different petrol and diesel engines. The time difference between the global and Indian

launch of its latest models is constantly optimized. We strive to make them available in the shortest time possible.

Research & Development

Mercedes-Benz stands for tradition, innovation and the future of the automobile and represents quality and safety on roads throughout the world.

Mercedes-Benz Research and Development India Pvt. Ltd. (MBRDI), a

100% captive unit of Daimler AG, was established as a research institute with eight employees in 1996 and currently has a capacity of 367 employees.

Based in Germany, Daimler AG with its business units Mercedes-Benz Cars, Daimler Trucks, Daimler Financial Services, Mercedes-Benz Vans and Daimler Buses, is a global leading producer of premium passenger cars and the largest manufacturer of heavy- and medium-duty trucks in the

world.

The companys founders, Gottlieb Daimler and Carl Benz, continued to make automotive history following their invention of the automobile in

1886. As an automotive pioneer, Daimler and its employees are committed to excellence and act responsibly towards society and the environment, to shape the future of safe and sustainable mobility with groundbreaking technologies and high-quality products.

MBRDI is the largest Research and Development center of Daimler AG outside Germany and contributes in the areas of Computer Simulation (CAE), Design (CAD), Electrical/Electronics and IT-Services. Research and development engineers at MBRDI assess the performance and reliability of

various sub-systems and contribute to product development in all the stages of the life-cycle.

Organised in extended teams, the engineers collaborate with our partners in

the Research & Development Centers and Business Units in Germany, Japan and the USA. To prepare our employees for an effective collaboration in distributed teams across cultures, MBRDI provides languages-classes as well as intercultural trainings and workshops.

POLITICAL Legislation

Environment - The EU are bringing in a new legislation that the average CO2 emissions from new European cars must be cut to 130g/km by 2015.

Competition - legal restraints on competition within the EU car industry are expected to drop substantially over the next 5 years Taxes and Duty- MOT, price increased. Road tax directly linked to amount of emissions

Subsidies- The Government has today met the automotive sector to discuss the help available to the stricken industry. Commenting, David Frost, Director General of the British Chambers of Commerce (BCC), said

ECONOMIC

Recession/Boom. Due to the current economic crisis Mercedes along with other car manufacturers are finding it increasing difficult to sell cars and many have even closed plants.

Exchange Rate- Euro v Could make Mercedes more expensive in the UK

SOCIAL

The social factors can be broken down according to the following demographics: Age Gender

Income Which age group are interested in the Mercedes company? Mercedes products are mainly targeted at middle aged people. They are not very popular with youngsters as the brand is expensive and

is very hard to get insurance on at such a young age. What Social class are most likely to purchase Mercedes cars ? Due to their relative expense, Mercedes are targeted at people of

middle to high incomes. Unlike Vauxhall, for instance, Mercedes doesn't offer different prices ranging from high to low so the products dont really appeal to consumers with a low income The social factors can be broken down according to the following

demographics: Age Gender Income

Which age group are interested in the Mercedes company? Mercedes products are mainly targeted at middle aged people. They are not very popular with youngsters as the brand is expensive and is very hard to get insurance on at such a young age.

What Social class are most likely to purchase Mercedes cars ? Due to their relative expense, Mercedes are targeted at people of middle to high incomes. Unlike Vauxhall, for instance, Mercedes

doesn't offer different prices ranging from high to low so the products dont really appeal to consumers with a low income

TECHNOLOGICAL

Safety- Advances in technologies such as shatter-proof windscreens, airbags, crumple zones and collapsible steering columns have made it possible to manufacture safer cars. Safety sells

Plant Efficiency- New Production methods that improve efficiency. E- commerce Gizmos

SWOT ANALYSIS

SWOT ANALYSIS Strengths

Strong brand name Owners club Successful F1 team Good Resale Value

Good relationship with the government

Weaknesses

Price

Opportunities

Development of new models Environmentally friendly cars

current economic crisis The Strong competitors New entrants into the Market

Threats

RIVALRY AMONG FIRMSThe rivalry among firms in the same market as Mercedes-

Benz is highly intense. The main competitors within this segment include: BMW AUDI

JAGUAR ASTON MARTIN ALFA ROMEO

Rivalry has led to firms producing similar range of vehicles, as well as expanding into new products or services e.g. financial services, alcoholic products etc.

THREAT OF NEW ENTRANTSSegment is at low risk to the threat of new entrants. This could be down to the following reasons: PRESTIGE: existing companies have set up their prestige over several

years of providing quality products in the market. MATURE/SATURATNIG MARKET: the segment is at a saturated point where growth isn't as high as the rest of the market. SET-UP COSTS: the set up costs are high in this segment.

CUSTOMER BASE: consumers within this market are likely to have developed tastes for specific brands

THREAT OF SUBSTITUTESinclude:

Mercedes-Benz has numerous substitutes that it has to be weary of. These

ALTERNATIVE TRANSPORT: this includes means such as buses, trains, motorbikes and planes. ALTERNATIVE PRESTIGE PURCHASES: because Mercedes-Benz vehicles are considered luxury products, they also have to be cautious of

other prestigious products that consumers could buy instead of fancy cars. These include: Designer Clothing Expensive/Collectors Furniture

Holidays Luxury Homes Art e.g. Paintings, Sculptures etc. Jewellery

Boats/Yatches

BARGAINING POWER OF SUPPLIERS

The bargaining power of suppliers is influenced by numerousfactors. These include the position of rival suppliers, the quality of goods and services supplied; the demand for goods and services; and the supply of goods and services.

Mercedes-Benzs suppliers provide them with an array of raw materials required in car manufacturing, including metals, leather, electronics, paints and rubber.

Additionally, since Mercedes-Benz prides its products on their quality, suppliers could increase their bargaining power through emphasizing the superiority of their goods. Mercedes-Benz deals with two types of consumers, each with

their own bargaining stance: COMMERCIAL: these are large scale buyers e.g. companies who purchase fleets. Their bargaining power can be increased by the scale of business they could offer the company and the presence of

alternatives. INDIVIDUAL: these are personal buyers. Their bargaining power is usually less than that of their commercial counterparts, however, the strength of rival brands and provision of substitutes are key

factors that can affect their buying position.

Strategic ScopeThe strategic scope shows the size and composition of the target market. In Mercedes-Benz's case, the vehicle market in the UK is worth 33bn in new cars and 35.1bn in used

cars. Of this, Mercedes-Benz have a low market share, however, this is compensated by the revenue generated through their medium to highly priced products. The overall market contains various specifications of vehicles,

of which Mercedes-Benz is represented in all of them. This means that across the board, the firms market share will differ from range to range.

Strategic Strength

Strategic strength looks at the core competency of the business. The core competency refers to how well the firms conducts it 'basic' trading roles. Michael Porter (1980) pointed out 3 values that made up successful core competency:

Provides consumer benefits Not easy for competitors imitate Can be applied to a variety of products and markets Of the core competencies, the two methods that are used are: Product Differentiation

Product Efficiency

MERCEDES GENERIC STRATEGYThrough utilising Porter's generic strategy, we have been able to identify that Mercedes-Benz's generic strategy targets the following market:

NARROW MARKET - Mercedes' consumers fall within the minority of the market i.e. those of higher incomes, who want a luxurious product to associate with their lofty status. DIFFERENTIATION FOCUS - Mercedes' strategy to distinguish

them from rivals is one of differentiation, through providing both a luxurious vehicle, as well as one that is up to par with the latest performance figures.

STRATEGIC FIT

Strategic fit refers to how a firm adapts its business practices to deal with changes in the external environment. As the motor-vehicle market is currently in a slump, it is

essential that Mercedes-Benz react appropriately to maintain their competitiveness in the market. Taking into account Mercedes' strengths, it is well equipped to deal with the current changes in the external environment.

Their strong brand name ensures that up-and-coming professionals will always aspire to own a Mercedes car to adopt the prestige associated with the brand. This will stay constant even throughout times of economic upheaval.

Additionally, the good resale value of their products will mean that buyers will not be as worried about the depreciation value of the car should circumstances force them to sale it on. Lastly, the businesses good relationship with the government and EU will

mean that they could rely on tax reductions and stimulus packages should production be heavily affected by the motor vehicle crisis. On the downside, the price will still be a hindrance when trying to attract new custom, especially given the hardship experienced when trying to

obtain finance from creditors.

PRODUCT SUGGESTIONWe would suggest that Mercedes-Benz

considered developing a product that would be suited to today's economic climate and social trends.

Such a product would be relatively cheap (although not so cheap as to compromise their luxury status), have low running costs and be highly ecoefficient.

ADVANTAGESOThe new product has wider target market. OAttract consumers with a high, as well as middlelow

incomes. OSmaller engine will help reduce petrol cost. OInsurance will be cheaper OHas a lot of potential to be successful.

DISADVANTAGES

OMay compromise Mercedes-Benz's luxury product status. OResearch & Development into product could be costly, as well as manufacturing costs. OMay replace existing products in their range portfolio.

HYPOTHESIS

HYPOTHESIS

A hypothesis consists either of a suggested explanation for an observable phenomenon or of a reasoned proposal predicting a possible causal correlation among multiple phenomena. The term derives from the Greek, hypotithenai meaning "to put under" or "to suppose." The scientific

method requires that one can test a scientific hypothesis. Scientists generally base such hypotheses on previous observations or on extensions of scientific theories. Even though the words "hypothesis" and "theory" are

often used synonymously in common and informal usage, a scientific hypothesis is not the same as a scientific theory. Hypothesis may be defined as a proposition or a set of proposition set forth as an explanation for the occurrence of some specified group of

phenomenon either asserted merely as a provisional conjecture to guide some investigation or accepted as highly probable in the light of established facts. Quite often a research hypothesis is a predictive statement, capable of

being tested by scientific methods, that relates an independent variable to some dependent variable.

NULL HYPOTHESIS A null hypothesis is a hypothesis (within the context of statistical hypothesis testing) that might be falsified on the basis of observed data. The

null hypothesis typically proposes a general or default position, such as that there is no relationship between two quantities, or that there is no difference between a treatment and the control. The term was originally coined by English geneticist and statistician Ronald Fisher.

The null hypothesis (often denoted by

H0) formally describes some aspect

of the statistical "behaviour" of a set of data.

H0 : There is no significant difference in the customer satisfaction levelusing cars of BMW Motors & Mercedes Benz

ALTERNATE HYPOTHESISAlternative hypothesis is the "hypothesis that the restriction or set of restrictions to be tested does NOT hold." Often denoted H1. Synonym for 'maintained hypothesis.'

H1 :There is no significant difference in the customer satisfaction level using cars of BMW Motors & Mercedes - Benz

RESEARCH

METHODOLOGY

Research Methodology

The purpose of methodology is to describe the process involved in research work. This includes the overall research design, data collection method, the field survey and the analysis of data.

Objectives Of the StudyObjective of the Study: To know the consumer satisfaction. Check Comparitive Performance level. To find the satisfaction amongst the customers with the Brand

Sources Of Data CollectionPrimary:For my survey primary data have been used as a questionnaire to collect the data.

Questionnaire

A questionnaire is a research instrument consisting of a series of questions and other prompts for the purpose of gathering information from respondents. Although they are often designed for statistical analysis of the responses, this is not always the case. The questionnaire was invented by Sir Francis Galton.

Questionnaires have advantages over some other types of surveys in that they are cheap, do not require as much effort from the questioner as verbal or telephone surveys, and often have standardized answers that make it simple to compile data. However, such standardized answers may frustrate users. Questionnaires are also sharply limited by the fact that respondents must be able to read the questions and respond to them. Thus, for some

demographic groups conducting a survey by questionnaire may not be practical.

SECONDARY: The secondary data has been collected from the following modes:

Magazines Books Newspaper Data through internet sources

Research DesignResearch Design is the arrangement for conditioned for data collection & analysis of data in a manner that aims to combined relevance to research purpose with economy in procedure.

A research design is a master plan or model for the conduct of formal investigation. It is blue print that is followed in completing study.

The research conducted by me is a descriptive research. This is descriptive in nature because study is focused on fact investigation in a well structured from and is based on primary data. RESEARCH PLAN

Type of study: For completing my study I have gone for sample study because looking at the size of population & the time limitation it was not convenient for me to cover entire

population. Hence, I have gone for sample study rather than census study.

Sampling PlanA sample design is a definite plan for obtaining a sample from a given population. It refers to the technique or the procedure that researcher would

adopt in selecting items to be inched in the sample i.e. the size of sample. Sampling plan is determined before data are Collected

Sampling UnitSampling units are High Class and Educated people , Business Men etc.

Samples are collected via personal interaction or via electronic media.

Steps In SamplingSampling Frame:

The list of sampling units from which sample is taken is called sampling frame. Delhi City map was studied thoroughly and samples were selected from the place in a scattered manner to get effective result.

SAMPLING SIZE: Total sample size is 50. The following sample size according to area wise is as follows:

Saket 10 20 Malviya Nagar 20 South Campus

SAMPLING PROCEDURE: Sampling technique The selection of respondents were accordingly to be in a right place at a right time and so the sampling were quite easy to measure, evaluate and co-

operative. It was a randomly area sampling method that attempts to obtain the sample of convenient.

Limitations of the Study

I will have to rely upon the information get from secondary sources (Balance sheet, Profit & Loss Account and Cash Flow ) and given by respondents, which may not be fully true. This study will be limited to only some areas of New Delhi only..

It is only for short period of time. Lack of professional approach since researcher is a student The sample size is only 50 so the sample may not be truly representative of the Delhi population.

Field Work

I have collected the data through medium called questionnaire collecting the responses from 50 people in all. I had done my field work in the following area.

difficulty during my project in the process of explaining and taking there SAKET , MALVIYA NAGAR , SOUTH CAMPUS I started my project very first educating the respondents about my entire project, and ask them to cooperate with me. Mostly all the respondent were

aware of this type of surveys. So I didnt face any type of difficulty in the questionnaire.

DATA ANALYSIS

Name: 50 Clients of Luxury Cars Address: South Delhi --- Saket , Malviya Nagar , South Campus Area Pin Code____________

Gender: Male: 35 ( 70%) Female: 15 ( 30% )

Age Group

Age:1

1) Below18 : 0 2) 18-25 : 5

2 3 4 5

3) 26-35 : 20 4) 36-50 : 20 5) 51 and above : 5

Occupation: 1) ServiceOccupation

2) Business1

3) Student

2 3 4

4) Housewife

Q.1) In your Opinion Which car is the Best ? a) BMW ( 68%) b) Mercedes Benz ( 32% )Mercdes BMW

1

2

Q.2) How long have you been associated with BMW or MERCEDES BENZ ? (In years) a) Less than 1 year 8 b) 1- 5 20 c) 5-10 15 d) More than 10 7

1 2 3 4

Q.3) How would you rate BMW Motors on the following parameter? Strongly disagree Disagree

Neither agree Nor disagree Agree Strongly AgreeKnowledge of Sales Person

1 3

2 4

i)

Knowledgeable sales person

Agree : 30 % Strongly Agree : 50% Disagree : 10%

Neutral : 20%

ii) Employees spent enough time with you: before sales : 10%

During sales : 80% After sales : 10%

1 3

2

iii) Display of merchandise is attractive

Agree : 70% Strongly Agree : 30% iv) Availability of the product Agree : 50%

Neutral : 20% Disagree : 30%

v) Variety/selection of merchandise Agree : 40% Disagree : 30% Neutral : 30% vi) Vehicle in good condition

Agree : 80% Neutral : 20% vii) Prices are affordable Agree : 40%

Disagree : 30% Neutral : 10% Doesnt Matter : 20% viii)Attractive discounts offered

Disagree : 80% Agree : 10% Neutral : 10%

ix) Dcor of the waiting area is pleasing Agree : 70% Disagree : 10%

Neutral : 20% x) Offered a test drive Yes : 90% No : 10%

xi) Post sales follow ups are done regularly Yes : 70% No: 10% Cant Say : 20%

xii) Responds to complaints quickly Agree : 90% Disagree : 5% Neutral : 5%

xvi) Careful with personal information Agree : 95% Cant Say : 5% Q.3) Are you aware of the following facilities provided by BMW Motors?

FACILITIES Yes No i) Motors insurance Yes : 60% No : 40%

ii) Extended warranty Yes : 80% Cant Say : 20 % iii) True value

No Response iv) finance Yes : 90% No : 10%

v) Owners Club Yes : 100% No : 0%

vi) Genuine accessories Yes : 100% No : 0%

Q.4) Which Car Have the best Aftersales Service ? a) BMW b) Mercedes Benz

AfterSales Service

Mercede BMW 1 2

Q.5) What is your overall opinion about BMW over Mercedes Benz?

Very Bad 0 Bad 5

Neither Bad Nor Good 20 Good 15 Very Good 10

Brand Comparison

1 2 3 4 5

Q.6) How likely would you recommend BMW over MERCEDES BENZ ? Very Very

Unlikely 1 2 1:0 2 : 10 3 : 25 4 : 15 5:0

3

4

Likely 51 2 3 4 5

Q.7) Which Car provide the Best Value for Money

a) BMW : 25 b) Mercedes Benz : 25

1 2

Q.8) Which Car provides you wide range of Accessories and Add-ons ? a) BMW : 20 b) Mercedes benz : 30

Accessories

BMW Mercedes 1 2

Q.9) Which of the following Features of BMW you pefer more over Mercedes Benz ? a) Sun Roof : 5 b) Auto Visulaizer : 1 c) Auto Sensors Wipes nd Park : 5

d) e) f) g)

Control panel : 4 Drive Controls : 10 Cruise Controls : 15 Convertible Roof : 10

Accessories

1 2 3 4 5 6 7

Q.10) Which Company provides More Powerful and Well Tuned Engines ? a) BMW : 15 b) Mercedes benz : 10 c) Both : 25

Engine Preferrence

1 2 3

Q.11) Which Engine make you prefer the Most when you Buy a luxury car ? a) V6 : 9

b) c) d) e)

V8 : 10 V12 : 15 VTVT : 10 VTVT CRDi : 6

Engine

CRDi

V6 1 V8 V12 2 3 4 5

FINDINGS

FINDINGS

On an average more than 73% people feel that the prices are affordable whereas 12% do not agree, 74% believe that attractive discounts are offered whereas 26% are not satisfied with the discounts offered. 20% said that the test drives are not offered and 15% said that post sales follow ups are not

done regularly whereas 85% said that they were done regularly but people feel that it is the peoples car as it is satisfactory on all other parameters: knowledgeable sales persons , employees spent enough time before and during sales, display of merchandise is attractive, availability of product,

variety of merchandize, vehicle in good condition, prices are affordable, attractive discounts are offered, dcor of the waiting area is pleasing, responds to complaints quickly, service at Motors service station is excellent, careful with personal information and is value for money . The

overall opinion about Motors is very good. 86% people agreed that the sales persons are knowledgeable and 14% strongly disagreed that the sales persons are knowledgeable. 64% people agreed that the sales persons spent

enough time with them before the sales and 36% strongly agreed with this. 62% agreed that sales persons spent enough time with them during the sales, while 34% strongly agreed that the sales persons spent enough time with them during sales and only 4%

disagreed with this. 60% agreed that the sales persons spent enough time with them after sales, 26% strongly agreed with this and 14% disagreed that the sales persons spent enough time with them after sales. 94% agreed that the display of merchandize was attractive and 6% strongly agreed that the

display of merchandize was attractive. 91% agreed that the availability of the product was there, 5% strongly agreed that the availability was there while only 4% said they disagreed with this.

87% agreed that there was variety/selection of merchandize whereas 7% strongly agreed that enough variety was there and 6% disagreed with this. 82% agreed that the vehicle was in good condition when delivered, 16% strongly agreed with this whereas only 2% disagreed with this. 64% strongly

agreed that the prices are affordable, 21% agreed that the prices are affordable whereas only 15% said that they neither disagreed nor agreed with this. 55% agreed that the discounts offered are attractive, 34% strongly agreed with this while 11% disagreed and said that the discounts offered

were not attractive. 80%agreed that the dcor of the waiting area was leasing while 20% strongly agreed that the dcor of the waiting area was pleasing 74% agreed that the test drive was offered to them, 6% strongly agreed that the test drive was offered while 20% disagreed with this. 59% agreed that

the post sales follow ups are done regularly, 26% strongly agreed and 15%disagreed with this. 4% agreed that the response to complaints is quick, 18% strongly agreed, 12% neither agreed nor disagreed and 6% disagreed with this.

82% said that the service at service station is excellent, 14% strongly agreed while only 4% disagreed with this. 85% agreed that yes they were careful with personal information,strongly agreed with this and 8% neither agreed nor disagreed. 94% strongly agreed that all the commitments were fulfilled

and 6% agreed with this. 98% said yes that they are aware about insurance while only 2% said that they were not aware.

CONCLUSION

As per details of Survey Report Analysis and after Verifying all the other details included in my study , In my opinion BMW is performing well , as per current scenario Mercedez Benz was the market leader but BMW with its features and Design

Mechanism is successful in attracting the youth so the demand for BMW is increasing. BMW is getting preference so currently both are at equal position but in near future BMW will crossover Mercedes-Benz market legacy .

BIBLIOGRAPHY

BIBLIOGRAPHYBooks: 1. Philip Kotler, Kevin Keller (2009), Marketing Management (Thirteenth Edition)

2. Marketing Management, The McGraw.Hill Company Rajan Saxena (Third Edition) MAGAZINES: A) OUTLOOK BUSINESS (FEB, 2009)

B) BUSINESS STANDARD (April-July 2009) C) 4PS OF BUSINESS AND MARKETING (June 2009) D) BUSINESS TODAY - Pick and Choose E) BUSINESS TODAY - Tata Motors to bring Jaguar, Land Rover to India

INTERNET: 1. BMW Motors' Official Website

2. Wikipedia 3. http://www.docasi.com/ 4. http://www.capitaline.com 5. Mercedes Official Site 6. Scridb.com

7. http://money.rediff.com/companies/ 8. htttp://www.moneycontrol/com/ 9. http://www.yahoofinance.com/t 10. http://www.carwale.com/research/cars/

ANNEXURE

QUESTIONARE

QUESTIONNARE Being an esteem customer of BMW Motors Ltd. you are requested to take out a few minutes and fill the following QUESTIONNAIRE: Name: Address: ___________________________________________________________

___________________________________________________________ ___________________________________________ Pin Code____________ Gender: Male Female

Age: Below18 18-25 26-35

36-50 51 and above Occupation: Service

Business Student Housewife Q.1) In your Opinion Which car is the Best ? c) BMW

d) Mercedes Benz Q.2) How long have you been associated with BMW or MERCEDES BENZ ? (in years) a) less than 1 b) 1-5 c) 5-10 d) more than 10

Q.3) How would you rate BMW Motors on the following parameter? Strongly disagree Disagree Neither agree

Nor disagree agree Strongly agree i) Knowledgeable sales person

ii) Employees spent enough time after sale service with you: before sales During sales After sales iii) Display of merchandise is attractive

iv) Availability of the product v) Variety/selection of merchandise vi) Vehicle in good condition vii) Prices are affordable

viii)Attractive discounts offered ix) Dcor of the waiting area is pleasing x) Offered a test drive xi) Post sales follow ups are done regularly

xii) Responds to complaints quickly xvi) Careful with personal information xv) All the commitments are fulfilled xvi) Value for money

Q.3) Are you aware of the following facilities provided by BMW Motors? FACILITIES Yes No i) Motors insurance ii) Extended warranty iii) True value

iv) finance v) Owners Club vi) Genuine accessories Q.4) Which Car Have the best Aftersales Service ?

c) BMW d) Mercedes Benz Q.5) What is your overall opinion about BMW over Mercedes Benz? Very Bad Bad

Neither Bad Nor Good Good Very Good Q.6) How likely would you recommend BMW over MERCEDES BENZ ?

Very Unlikely 1 2

3

4

Very Likely 5

Q.7) Which Car provide the Best Value for Money c) BMW d) Mercedes Benz

Q.8) Which Car provides you wide range of Accessories and Add-ons ? c) BMW d) Mercedes benz Q.9) Which of the following Features of BMW you pefer more over Mercedes Benz ?

h) Sun Roof i) Auto Visulaizer j) Auto Sensors k) Control panel l) Drive Controls m) Cruise Controls n) Convertible Roof

Q.10) Which Company provides More Powerful and Well Toned Engines ? d) BMW e) Mercedes benz Q.11) Which Engine make you prefer the Most when you Buy a luxury car ?

f) g) h) i) j)

V6 V8 V12 VTVT CRDi

Date: Customer Sign.