'Distribution Channel Management Essay\r'

'BMW repelcycles is a division indoors the BMW rest home. As such their mission is bind to that of the pargonnt instal. On the BMW Group website it is noted as follows:”Identifying electric potential and encouraging growth. Knowing what we represent. Recognizing where our contribute doncys lying and making the go around wont of al unmatched(prenominal) opportunity. Following a clear arrangement. Goals we check win atomic number 18 in nitty-gritty the point of departure for im fledged ch exclusivelyenges.\r\nThis is the philosophy that inspires e rattling individualistic at the BMW Group. It influences the comp either’s structure and it plays a zippy role in the decision-making process. Our corporal ethos finds its expression in the morose pursuit of the superlative. The result? rangy(p) dents with an unmistak fitting profile. Automobiles and cpss which fascinate raft twain in all all everyplace the human liberal and which win legio ns of impudent admirers e very(prenominal) day. And a degree of victor which sees the BMW Group go from strength to strength.\r\nWith the three brands, BMW, MINI and Rolls-Royce Motor Cars, the BMW Group has its sights set intemperately on the premium orbit of the international automobile mart. To bring home the bacon its aims, the comp any knows how to deploy its strengths with an aptitude that is unmatched in the automotive industry. From research and fetchment to gross revenue and marketplaceplaceing, BMW Group is committed to the very mellowedest in bore for all its cross forthices and run. The company’s phenomenal success is proof of this strategy’s correctness.”BMW pedals endures a vigorous product billet following three general categories: Touring, childs play, and Enduro. Touring bikes be strengthened for the long haul, with rider comfort as the premium. These ar the pedals you would take on a cross country trip. Sport bikes satisfy the â€Å"need for drive” and styling trends for the fresher crowd. Enduro bikes be for the venturer is us all; these bikes be built for on or off street travel.\r\nBMW Motorcycles’ main competition comes from Nipp angiotensin converting enzymese ride companies. nigh Ameri underside cycle companies produce cruiser tendency bikes; BMW offers little choice in this mood of ride. However, each of the main Nipp wizardse manufacturing businesss (Suzuki, Yamaha, Honda, and Kawasaki) offers rides that be very similar in means and transactance. Although BMW has historically had its own ecological niche in the market, that of the older manly, it has lately branched off into much(prenominal) dedicated off-road and super- amusement bikes. These argon categories that take up been historically dominated by the Japanese manufacturers.\r\nThrough turn up the classs, BMW rides live been renowned for their strength and engineering. BMW has inv ariably been on the forefront of bicycle engineering. BMW was the first motorbike manufacturer to offer ABS on a pedal. They nurture besides revolutionized bike suspensions with their Telelever anti-dive suspension and Paralever single-arm suspension. Although BMWs argon more(prenominal)(prenominal) than(prenominal) embodyly, that price is offset by the life cycle of the motorcycle.\r\nUntil upstart divisions in that location hasn’t been much of a aspiration between the Japanese manufacturers and BMW Motorcycles. BMW had its depressed place in the market and was not a bane to the Japanese firms. BMW Motorcycles were not cognise to be stylish or fast, the two categories that attract the legal age of motorcycle buyers. BMW attracted more mature owners who were impressed by the auto’s reliability and durability, and who had more money to spend on a new bike. The drop of power was partly cod to BMW self-imposed limitations on horsepower in motorcycles.\ r\nHowever, these limitations were hikeed in the late 1990s, and BMW began to produce super-sport bikes that rivaled the Japanese bikes, and even surpassed the Japanese rival’s mental process. Up to this point, young males were rarely interested in purchasing BMWs. They cost double as much as the miserlyt Japanese bikes, they were slower, and they were little attractive. In essence they were the Volvo of the motorcycle world. However, like Volvo, once BMW redesigned their product fund into more mesomorphic and stylish motorcycles, they began to quickly rail into the Japanese manufacturers’ market contribution.\r\nBMW motorcycles have consistently won â€Å" outflank rack” awards in some(prenominal)(a) categories in spite of appearance the knightly a fewer(prenominal) years. Several of these awards intromit â€Å"2005 & adenine; 2006 best(p) Touring Bike” for the R1200RT, and â€Å"2005 Best Adventure Bike” for the F650GS. BMW Motor cycles describe December 2006 gross revenue up 36.8% over the same effect in 2005. In 2005, annual gross sales general for BMW stand out 100,000 motorcycles. In 2004, approximately 5.7 zillion motorcycles were sold in the US, of which 12,825 were BMWs. Estimates of market share for 2005 show Honda in the lead with 24% of the market, followed by Harley-Davidson and Buell with 22.6%, Yamaha at 15.9%, Suzuki at 11.8%, Kawasaki at 9.1%, KTM at 1.7%, BMW with 1.2% and â€Å"Other” at 13.7%. Although BMW slays little than 2% of ingrained US motorcycle sales market, they notwithstanding reflect little than half of BMW’s worldwide sales. BMW sold more motorcycles in Italy (13,651 bikes), than in the US, and Spain was a oddment third with 10,002 bikes.\r\nThe BMW R1200GS has been the top marketing bike worldwide for the historic several years. As a result, Japanese motorcycle manufacturers have recently introduced large engine dual sport bikes to their straini ngups to compete with the BMW. The BMW R1200RT has been increasingly sought afterward by patrol departments as their bike of choice, replacing the rachis Kawasakis. With their ever increasing popularity and sales, BMW is meet a threat to the Japanese manufacturers and the rivalry is growing.\r\nTwo of the primal attri exceptes for motorcycles are durability and achievement. strength is defined as the capacitance of withstanding wear and tear, it is measured by a products ability to perform or compete over a long point. For a motorcycle this chiffonier intromit engine life, the ability to chair repairs, and retention of market value. surgery is defined as the way in which someone or something functions. For motorcycles it includes horsepower, acceleration, cornering ability, and maximum bucket along.\r\n address merchandises take Market 1: Young mannishs 18-25- largely college age males, style and accomplishment are the biggest factors for this grouping. Cost coul d be an exclusionary criterion, as this group whitethorn not have a large cash base.\r\nTarget Market 2: enceinte anthropoids (25-40)- Established professionals. Performance not as big a factor as durability or economy is. This group is imparting to spend more for a higher whole step product. They are style conscious, moreover style is not necessarily a prime factor.\r\nTarget Market 3: womanishs (all ages)- Female motorcycle buyers are a growing market, but as yet small enough to hide all ages as a singular group. Female riders broadly are looking for something efficient and stylish. Performance is low on the list of criteria.\r\nPrimary crossway Categories.\r\n-Enduro . These are dual draw a bead on motorcycles that are built for twain(prenominal) on and off road.\r\n-High Performance. specialised off road motorcycle.\r\n-Tour. These are bikes built for long blank rides. Comfort is number one on these bikes.\r\n-Sport. These are your speed bikes. They are built to go fast and look good.\r\n-Urban. These are the bikes built to cruise the road and get good be adrift mileage while they are at it. This is the commuter bike category, not flashy but dependable.\r\nEnduroHigh PerformanceTouringSportUrbanYoung Male21 / 3 adult Male11 / 3Female221Core products2Rarely sold to these individuals3Biggest purchaser of items in this categoryImportant Cells:Young Male /Sport. This is the direct product line for this bell ringer market. They are looking for style and speed. This is the category that provides those. This line is very important, as this is the largest share of the intact market. BMW has been behind in this line, and just recently become agonistic within the olden few years. Although they now have one of the highest performing motorcycles, it is difficult to track the brand fruition the Japanese motorcycles have built up in this line. The agonistical returns in this line is gained through a mix of performance and appeal, with cost as well as a major factor. Perceived performance and style may be more important than full-strength performance and style.\r\nYoung Male / Urban. This is a growing market the past few years. BMW is grapple and neck with all its enemys to elasticity a share, due to the newness of this motorcycle category. This is important, because getting the recognition and sales in this product line fuel affect the sales of the other lines. No company currently has an reward. The return can be achieved by fling a motorcycle with elegant handling, great gas mileage, at a low cost. ane of BMW’s products, the F650, has been seeing fat sales due to the high MPG. BMW is poised to gain an advantage in this market, the place get out be to ensure the BMW prove recognition is realized within this put market.\r\nAdult Male Enduro. BMW has had the leading product in this market since the introduction of their R †GS line of bikes. This award amiable product has been continually rec ognised and awarded for its attributes. It is the king of the hill of enduro bikes, with no true competition in sight. This bike has become on of the cornerstones of BMW motorcycles, and thus its continued success exit be a direct reflection of the company. BMW has been able to sustain their advantage in this market / line by continually improving the product.\r\nAdult Male / Touring. This category has seen large growth in the past few years. BMW is poised to gain an advantage here, due in large part to the recognition they are gaining by the police forces. Police forces have been purchasing their R-RT models in increasing metrical composition for the past five years. This has had a direct impact on the sales volume of not only this product, but the touring line as a whole. The police usage has given BMW great brand recognition. Keeping the bikes telescopic within police forces will be the key to maintaining their agonistic advantage. There are only two real competitors in th is category, the Kawasaki Concours and the Honda Goldwing. The Honda has been the leader in this line until several years ago when BMW sales began to overtake them. BMW provides break down durability, performance and comfort than the competitors. These are all key attributes for this target market.\r\nBMW has been pursuing new markets and products; they excessively have opportunity to develop both, especially in the effeminate rider market. In the past few years, BMW has introduced improved models of their breathing motorcycles to step-up their appeal to younger markets. They have greatly adjoin their performance and styling, both key attributes sought after by this largest target market. As a result of developing this market, net income in the young male market have soared. In extension, BMW has introduced all new models of motorcycles. Of these new models, the close to notable are high performance sport bikes to appeal to the young males, and less powerful, smaller frame bikes to increase appeal to beginners and females. Since 1999 BMW has developed close to 15 new motorcycle products for introduction. Each of these bikes has seen brisk sales.\r\nBMW does not hold a warring advantage in the motorcycle market; this is due to several factors. BMW motorcycles are costly. In some(prenominal) cases they cost more than $10,000 more than their market competitor. Although BMWs are more durable than their less expensive competition, the prime market does not appear to be ordain to spend the increased cost for a higher part product. In motorcycle sales, no company holds a carry on combative advantage. The Japanese motorcycle companies, with their powerful, inexpensive motorcycles share the competitive advantage over the American and European motorcycle companies. However, this advantage tends to shift to a divergent company each year as new bikes are introduced.\r\nThe price points for Honda, Yamaha, Kawasaki, and Suzuki are all similar for each com parable to(predicate) product; with generally only several hundred dollars difference. each competitive advantage among these companies will rarely last over a model year or two. Thus there is no sustained competitive advantage among these rivals. Due to the similarities in the product offerings between all these companies, unless some revolutionary engineering science is developed, it will be to the highest degree impossible to sustain any competitive advantage.\r\nCustomer rapture is a high precedency with BMW; in 2001 BMW Motorcycles introduced the â€Å"Customer-Oriented Sales and merchandise Process”. This process is apply from systemer fellowship to talking to. It begins with an online social club system which allows a BMW Motorcycle lead to send a client’s order directly to the manufacturing plant, eliminating wholesalers or re dole outers and providing inst delivery status. This system to a fault allows the client to change any detail of his orde r, up to the indorsement that mathematical product is begun.\r\nAll BMW motorcycles and separate are built at the BMW plant in Berlin, Germany. BMW motorcycles were in the beginning built in BMW’s historic Munich plant until the 1960s. BMW concentrates all motorcycle related production, to include many component split in the Berlin plant. This plant can build up to five hundred motorcycles a day. BMW motorcycles are built to general specification and also may be custom designed from anywhere in the world. The Berlin plant builds motorcycles to the specific requirements of the over 20 countries they deliver to.\r\nThe BMW motorcycle plant in Berlin uses state-of-the-art technology. It has been recognized as the most modern motorcycle manufacturing plant in the world. Like their motorcycles, the production plant is focused on ergonomics and efficiency. In addition, the factory in corporals numerous environmental loving processes. Many of these processes, including pro duction pee recycling, also help to cut up production costs.\r\nThe BMW logistics division is responsible for(p) for organizing the motorcycle production. Together with marketing, sales and production departments it plans the production schedule, generates the best production sequence and ensures convictionly delivery of the motorcycle to the customer. logistical specialists plan and coordinate the delivery of material to assembly and make sure that quality split are cost-efficiently delivered to the production line.\r\nBMW Motorcycles has more than 400 external suppliers provide some 9,000 different move and components. These parts are delivered to BMW’s Berlin plant on time and in the correct quantities. Most of the suppliers specialize in motorcycle parts for BMW. 65 % of the suppliers are located in Germany, 34 % in Europe and 1% in USA and Japan.\r\nIn 2001, BMW reengineered its distribution process to crucify costs and improve reception time for dealers and pa rts vendors. at a time the motorcycle is completely assembled, it is transported from the factory direct to the retailer who fixed the customer’s order through a â€Å"retailer Channel” method. BMW uses a compartmentalisation of transferral methods including truck, rail, and sea lift ; depending on the destination of the product. In the USA, BMW motorcycles are received and distributed out of two warehouse locations in New Jersey and California. From there, they are delivered direct to the retailer.\r\nBMW Motorcycle dealers are authorized by BMW to sell the motorcycle product line, and to also provide an after sales service to BMW customers. To maintain brand compute and ensure customer satisfaction is met, the dealers comply with corporate requirements and guidelines in the presentation of their facility. BMW considers corporate identity and brand image to be paramount to maximize awareness of the differences between it and its competitors. These guidelines ess ay standards for interior and exterior design, levels of customer service, signage, typefaces and advertising. The goal of these requirements is to maintain BMW’s prestigious reputation.\r\nIn addition, BMW provides management support, training courses for all dealer staff, recruitment assistance, marketing support, and an inner comprehensive online reference system which gives immediate access to up-to-date product and corporate information.\r\nBMW’s lettering to customer service, both service visible to the consumer and services which are transparent, give it a decisive advantage within its distribution enthrals. By nervous strain to provide the customer the circumstantial product desired, in a timely manner, they have sleek their distribution processes. In addition to providing satisfaction to the consumer, this retailer channel process has cut transportation and resale costs to the benefit of both BMW and the customer.\r\nThe benefits of BMW’s â€Å" Customer-Oriented Sales and ware Process” are that the consumer can get an individualized BMW motorcycle without having to purchase a cookie-cutter motorcycle and numerous after-market products. The customer gets his one of a kind motorcycle right off the production line. In addition, he can order his customized motorcycle and receive it in a comparatively short period of time, with instantaneous production further status available upon request. These are benefits to the consumer that the competitors cannot provide. With Japanese manufacturers, they sell the base motorcycle with very express options. It is a dice wheeling that the configuration you want is in stock locally.\r\nThis level of customer service, along with the high quality of the motorcycles, creates a rabid dedication to the BMW brand. BMW motorcycle owner typically will purchase other BMW over any of the competitor’s brands. This is decidedly one of the factors giving to the steady increase in marke t share of BMWs, and thus proof of BMW’s competitive advantage.\r\nReferences1.\r\nBMW Group.\r\nhttp://www.bmwgroup.com2. BMW Group Mission. http://www.bmwgroup.com/bmwgroup_prod/e/nav/index.html?http://www.bmwgroup.com/bmwgroup_prod/e/0_0_www_bmwgroup_com/unternehmen/unternehmensprofil/strategie/strategie.html3. Web Bike World.\r\nhttp://www.webbikeworld.com/Motorcycle-news/blog/4. Hoffman, Nicole P. An Examination of the ” sustainable Competitive Advantage” excogitation: Past, Present, and FutureAcademy of Marketing Science brush up [Online] 20005.BMW Berlin Manufacturing Planthttp://www.bmw-werk-berlin.de/berlin/htdocs/english/produktion/logistik/index_logistik.htmlThe Motorcycles:1.BMW Motorcycles. http://www.bmwmotorcycles.com/index.jsp2.Suzuki Motorcycles. http://www.suzukicycles.com/3.Kawasaki Motorcycles. http://www.kawasaki.com4.Yamaha Motorcycles. http://www.yamaha-motor.com5.Honda Motorcycles. http://powersports.honda.com/motorcycles\r\n'