Pricing strategy of BMW

Smart pricing strategy
BMW (Bayerische Motoren Werke)

Prepared by: Yap Kai Ying (A18HA0270)

Background of BMW
Group

• BMW is a multinational company that produces luxury vehicles
and motorcycles in German. The company was founded in 1916
as a manufacturer of aircraft engines. It was produced from 1917
to 1918 and again from 1933 to 1945. However, BMW Group also
is the leading of the automotive manufacture and seller in the
world. The company has a worldwide subsidiaries and
manufacturing such as in China, South Africa, United States,
Brazil, Malaysia, India and etc.

• Vision for BMW Group is “We are Number ONE. We inspire
people on the move. We shape tomorrow's INDIVIDUAL
PREMIUM MOBILITY.”

• Strategy of company- leading BMW Group into new era which is
use the leverage technology and able to sustain to deliver unique
customer experiences and features.

Price strategy

Most important pricing strategy is:

Premium pricing strategy
• Premium pricing strategy is that the company

sets high prices for its products to show that its
products are high-value, luxurious or high
quality. Premium pricing is focus on the
perceived value or benefit that received by the
customer through the product.

The premium pricing strategy has used by BMW Group to create their brand awareness. The customers will
think they are pay much higher prices for the perceive quality of the product. For example, launching a new
small BMW model - MINI COOPER is to targets premium price cars in the markets and it was set at the high
price due to the different and unique features. Here is the MINI Malaysia price list 2020:

Even though MINI COOPER is relatively small size, but this
powerful brand has make the car become one of the
world’s most profitable car.

Model Price
Mini 3 Door RM249,888 - RM 313,888

Mini 5 Door RM 259,888
Mini Clubman 2019 RM 215,888 – RM 342,888

Mini Countryman RM 248,888 – RM 362,888

Strong competition from other Competitors of BMW
luxury manufacturers like Audi, Group
Mercedes has fight market
share with BMW. According to U.S. News and World
Report (Best Cars), BMW has some good
performance compare with Audi.

BMW has a best performance in

safety. For example, BMW’s 2 Series, 5
Series, X3 is the highest score in safety
score which is 10 out of 10.

Moreover, average safety score of BMW
is 9.76 compared with Audi (9.68).

Compare luxury sedan BMW 3Series

with Audi A4 and Mercedes-Benz C-Class

Form price range data, we can see that Car model Price range
BMW 3Series RM 248,800-RM 293,800
Mercedes-Benz C-Class has a highest price
compare with the other. Although three of this Audi A4 RM 206,524-RM 297,116
luxury sedan has a similar price range, but sales
of BMW 3Series was increase by 7.28% as Mercedes-Benz RM 259,888-RM 421,888
compare with Audi A4 drop the sales by 23% C-Class
and Mercedes-Benz C class also drop by
18.63% in the US market from 2018 to 2019.

Even though that has similar price range with

BMW 3Series and Audi A4, the customer will
choose to buy BMW 3Series due to BMW
provide the best performance for the luxury
sedan with energetic engine choices to a
feature-packed interior.

Insight of BMW Group

BMW is pay more attention at superior
performance, but for new BMW buyers
or shoppers it is still difficult to
understand the advanced technology
built into each car in market. However,
there have 48% of customers switch
their vehicle brand because of the
technology features they want even
though the brand have historically
preferred.
BMW has make a Mixed Reality app
that allow customer to see the
technology that built inside of BMW.

Suggest Fisker Inc. (2016) which is relaunch

brand of Fisker Automotive (2007).

World's first production luxury plug-in

hybrid electric vehicles.

Car model Price range
BMW 330i $41,745 (RM 181,966)

Suggestion Fisker Emotion Start $37,500 (RM 163,462)

From this example, we can see that Fisker Inc. is offer

low price of the electric sport sedan as compare with BMW

set a high price to their sport sedan. I will suggest that Fisker

Inc can use the price strategy of BMW-premium

strategy to create brand awareness in the market in

order to gain more profit and do not repeat a disastrous

policy in 2007.
As a World's first production luxury plug-in hybrid electric
vehicles the quality, performance and feature of Fisker
Vehicle is not to lose BMW

Summary

BMW Group have a good smart
pricing to run their business. In
common high price will make
lose the sales but BMW Group
have good at their price strategy
which high price with high
quality of their product and
make their customer perceive
the value of their product.

A video show the all-new BMW 4 -
Series Coupé M440i
Market launch in 2021
Start at Price RM254,000

Scan it watch the video

References

• Essays, UK. (November 2018). Marketing strategy
and pricing strategy of BMW. Retrieved from
https://www.ukessays.com/essays/marketing/marke
ting-strategy-and-pricing-strategy-of-bmw-
marketing-essay.php?vref=1

• Loveday, steven. “BMW vs. Audi: Battle of the
Brands.” U.S. News &World Report, 18 Sept. 2018,
https://cars.usnews.com/cars-trucks/bmw-vs-audi

• Anon,“Full Price of the Fisker Ocean Revealed.” New
Mobility, 6 Jan. 2020, www.newmobility.global/e-
mobility/full-price-fisker-ocean-revealed/.

• BMW Malaysia: Price List 2020
www.bmw.com.my/en/footer/metanavigation/price-
list.html.

• BMW.com https://www.bmw.com.my/en/

Scan Me !!