Internal and External Environment Analysis for BMWi and Electric Vehicles

Situational, Internal and External Environment Analyses for BMWi and Electric Vehicles 2012

SITUATION ANALYSIS

MICRO-ENVIRONMENT ANALYSIS FOR BMW i

Customer Analysis

BMWi is a new concept to be launched in 2013 hence customer analysis is done by analysing the profile, attitude and behaviour of existing electric cars and the driver profile of BMW3 series. The closest price range to BMWi is the BMW3 series, which has the broadest audience group for BMW and of which, the average age of the BMW3 series is 53-years. BMW customers are very loyal to the brand (IDM, 2011). BMW is considered as an emotional, premium brand purchase (Mintel, 2009).

Levels of awareness, perception and attitudes towards the brand

Level of awareness is high with strong positive perception and attitude towards the BMW brand image, reliability on speed and power, build quality and resale value (Mintel, 2011c). The USP among BMW owners is fuel economy (Yvkoff, 2011; IDM, 2011). Moreover, fuel economy is also reported to be the most important factor in buying any new or used cars (Mintel, 2011b).

Level of involvement Purchase is expensive and infrequent, hence financial risk is high. The BMW brand holds high symbolic meaning and high social visibility. The brand reflects customer’s self-image and social status. Hence, customers have high degree of involvement.

Buyers of new cars are typically from the 45-54 age-group (Mintel, 2009). A majority of car owners have positive attitude towards buying electric cars, however the high price is restricting their purchase intentions (Mintel, 2009). Exclusive research by Mintel (2011a) found strongest potential for electric cars are older adults such as ABC1 men and women aged 55+ years. Customers perceive electric cars to be closely competing with hybrid cars. Customers in major urban areas such as London have shown the most interest (Mintel, 2011a).

Non-buyers of Electric Cars

Interested Segments Why are they not buying?

Other attitude

Medium to high-mileage drivers (Mintel, 2009).Early adopters of electric cars are the informed and affluent drivers (Mintel, 2011a).

Unprepared to pay the premium price (Mintel, 2009).Customers perceive electric cars are more suitable for lower mileage and shorter journeys.

Concerned with the high fuel costs and environmental issues related to conventional petrol- or diesel-fuelled cars (Mintel, 2009). However, a majority of this attracted segments are more interested in the long-term economic benefit of electric cars, rather than environmental issues (Mintel, 2009).

By: Alexandra Stratchan, Atiqah Ismail, Calum McPhee, Mathew Beedham and Yuanlong He


Uninterested Segments

Why are they not buying?

Other attitude:

Low-mileage drivers (Mintel, 2009).

Less concerned with looking for more fuel-efficient vehicles.

Lack of awareness about the cost- and emission-saving benefits of electric cars over petrol and diesel (Mintel, 2009).Current lack of refuelling infrastructure for both electric cars limits its acceptance (Mintel, 2009).

Internal Analysis

BMW aims to position BMWi as both fun-to-drive car and to produce no climate-damaging emissions. BMW has 1.5 million names and addresses in its database consisting of (1) new car purchasers, (2) approved-used car purchasers, (3) lapsed customers, and (4) 400, 000 prospects. Currently BMW has 35% customers email penetration. Approximately 15% of customers finance through BMW, 30% finance themselves and 55% pay outright. BMWi will be retailed at £35,000 with a marketing plan budget of £400,000. Its key corporate strategic objective is to establish BMW as the most sustainable car manufacturer (IDM, 2011).

Business Analysis

Alternative-fuel cars include electric cars, hybrid cars (petrol-electric) and cars powered by alternative fuels including liquefied petroleum gas (LPG) and compressed natural gas (CNG). Hence BMWi will compete within the alternative fuelled vehicle (AFV) market. It is a growing market, currently with limited competition and offerings. BMWi’s direct competitors are those solely offering cars with electric batteries with zero-emission, have typically been offered by niche manufacturers (Mintel, 2011a). Its indirect competition is from and low-emission vehicles, such as petrol-electric hybrids cars, currently dominated by Honda, Lexus and Toyota in the UK market (Mintel, 2011a). Competition is reported to be fierce in the UK especially from mini and super-mini cars offering zero or low-emission (Mintel, 2011a).



MACRO-ENVIRONMENT ANALYSIS FOR ELECTRIC CARS

Political Government support plan of £250 million to support the development and use of electric cars. The plan includes investment in infrastructure, such as increasing the number of charging points, and government subsidies of up to £5,000 for electric car buyers to encourage purchase of electric and plug-in hybrid cars (Mintel, 2009).

Road tax exemption – pure electric cars and vehicles producing less than 100mg of carbon dioxide per kilometre are exempted from road tax (Euromonitor, 2010).

Government effort to raise environmental awareness among the UK population will potentially stimulate interest in electric cars.

Economical Rising fuel costs are predicted to stimulate interest in alternative fuelled vehicles (Mintel, 2011).

Consumers are more concern with economy than the environment – economic factors such as premium price, fuel economy and reliability are key criteria in consumers’ car buying priority (Mintel, 2009). However, benefits of lower long-run cost from fuel economy of electric car can potentially offset the initial purchase cost.

Purchase of new and used cars is expected to grow as consumers are becoming confident with the economy (Mintel, 2011). New and used car sales are healing from the 2009 recession.

Social Typical buyers of new cars are from the 45-54 age groups with older women returning to the workforce (Mintel, 2009).

A major social trend towards smaller and more fuel efficient cars (Mintel, 2011).

Socio-demographic changes; the shift in UK population towards an older population profile of 45-54 age group and smaller households have shown a parallel rise in interest for cars offering greater fuel efficiencies and smaller cars (Mintel, 2011).

Improvements in socio-economic status of consumers reflect on the rising interest in luxury cars (Mintel, 2011).

Increasing popularity of environmental-friendliness as status symbol with affluent consumers through hybrid car ownership (Mintel, 2009). Social trend towards hybrid and electric cars are also being boosted by celebrities endorsing environmentally friendly vehicles.

Technological Insufficient current infrastructure to support increased sales and usage of electric cars despite government’s plan to invest £20 million in charging points and infrastructure (Mintel, 2009).


Internal and External Environment Analysis for BMWi and Electric Vehicles

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