Distribution Channel Management Essay

BMW ridecycles is a division within the BMW base. As such their mission is tied to that of the p argonnt federation. On the BMW Group website it is noted as followsIdentifying potential and encouraging growth. Knowing what we represent. Recognizing where our strengths lie and making the surmount use of e truly(prenominal) opportunity. Following a clear strategy. Goals we give win be in essence the point of departure for b ar-assed ch tot whollyyenges.This is the philosophical frame that inspires every indivi bivalent at the BMW Group. It influences the companys structure and it plays a vital role in the decision-making process. Our corporate ethos finds its expression in the severe pursuit of the superlative. The result? Outstanding scores with an unmistakable profile. Automobiles and racks which fascinate people all everywhere the world and which win legions of new admirers every day. And a ground level of victory which sees the BMW Group go from strength to stre ngth.With the three signs, BMW, MINI and Rolls-Royce Motor Cars, the BMW Group has its sights set firmly on the premium sector of the global automobile market. To achieve its aims, the company knows how to deploy its strengths with an efficiency that is unmatched in the automotive industry. From re search and causement to gross revenue and marketing, BMW Group is committed to the very highest in quality for all its harvest-times and services. The companys phenomenal success is proof of this strategys limitness.BMW Motorcycles provides a robust product landmark following three general categories Touring, Sport, and Enduro. Touring bikes atomic number 18 strengthened for the long haul, with rider comfort as the premium. These are the bikes you would take on a transverse country trip. Sport bikes satisfy the need for speed and styling trends for the younger crowd. Enduro bikes are for the adventurer is us all these bikes are built for on or off bridle-path travel.BMW Motor cycles main competition comes from Nipponese bike companies. around Ameri undersurface wheel companies produce cruiser style bikes BMW offers little prize in this style of motorcycle. However, each of the main Japanese manufacturers (Suzuki, Yamaha, Honda, and Kawasaki) offers motorcycles that are very similar in style and performance. Although BMW hashistorically had its own niche in the market, that of the older male, it has recently branched off into more than dedicated off-road and super- period of play bikes. These are categories that use a penny been historically dominated by the Japanese manufacturers.Through come forth the years, BMW motorcycles need been renowned for their durability and locomotiveering. BMW has always been on the forefront of motorcycle engineering. BMW was the head start motorcycle manufacturer to offer ABS on a motorcycle. They have similarly revolutionized motorcycle suspensions with their Telelever anti-dive suspension and Paralever singl e-arm suspension. Although BMWs are more wooly, that price is offset by the life cycle of the motorcycle.Until recent years there hasnt been untold of a rivalry between the Japanese manufacturers and BMW Motorcycles. BMW had its small place in the market and was not a threat to the Japanese firms. BMW Motorcycles were not cognize to be stylish or fast, the two categories that attract the majority of motorcycle buyers. BMW attracted more mature owners who were impressed by the machines reliability and durability, and who had more m unityy to spend on a new bike. The inadequacy of power was partly repayable to BMW self-imposed limitations on horsepower in motorcycles.However, these limitations were lifted in the late 1990s, and BMW began to produce super-sport bikes that rivaled the Japanese bikes, and even surpassed the Japanese rivals performance. Up to this point, young males were seldom interested in purchasing BMWs. They cost twice as much as the confine Japanese bikes, t hey were slower, and they were slight attractive. In essence they were the Volvo of the motorcycle world. However, like Volvo, erstwhile BMW redesigned their product withdraw into more powerful and stylish motorcycles, they began to quickly rationalise into the Japanese manufacturers market share.BMW motorcycles have consistently won Best rhythm awards in various categories within the past a couple of(prenominal) years. Several of these awards accept 2005 & 2006 Best Touring Bike for the R1200RT, and 2005 Best Adventure Bike for the F650GS. BMW Motorcycles reported declination 2006 gross sales up 36.8% over the same period in 2005. In 2005, annual sales worldwide for BMW outstripped100,000 motorcycles. In 2004, approximately 5.7 zillion motorcycles were exchange in the US, of which 12,825 were BMWs. Estimates of market share for 2005 show Honda in the fall out with 24% of the market, followed by Harley-Davidson and Buell with 22.6%, Yamaha at 15.9%, Suzuki at 11.8%, Ka wasaki at 9.1%, KTM at 1.7%, BMW with 1.2% and separate at 13.7%. Although BMW gains less than 2% of total US motorcycle sales market, they completely reflect less than half of BMWs worldwide sales. BMW sold more motorcycles in Italy (13,651 bikes), than in the US, and Spain was a close third with 10,002 bikes.The BMW R1200GS has been the top betraying bike worldwide for the past several years. As a result, Japanese motorcycle manufacturers have recently introduced large engine twofold sport bikes to their passups to compete with the BMW. The BMW R1200RT has been increasingly sought after by natural law departments as their bike of choice, replacing the mainstay Kawasakis. With their ever increasing popularity and sales, BMW is fitting a threat to the Japanese manufacturers and the rivalry is growing.Two of the primary attri merelyes for motorcycles are durability and performance. Durability is defined as the capability of withstanding wear and tear, it is mensural by a pr oducts ability to perform or compete over a long period. For a motorcycle this can include engine life, the ability to conduct repairs, and retention of market value. implementation is defined as the way in which someone or something functions. For motorcycles it includes horsepower, acceleration, cornering ability, and maximum speed.Target commercialisesTarget merchandise 1 Young phallics 18-25- Generally college age males, style and performance are the biggest grammatical constituents for this group. Cost could be an exclusionary criterion, as this group may not have a large cash base.Target Market 2 heavy(a) Males (25-40)- Established professionals. Performance not as big a factor as durability or economy is. This group is go outing to spend more for a higher quality product. They are style conscious, but style is not necessarily a prime factor.Target Market 3 Females (all ages)- Female motorcycle buyers are a growing market, but still small enough to treat all ages as a s ingular group. Female riders generally are looking for something economical and stylish. Performance is low on the list of criteria.Primary Product Categories.-Enduro . These are dual purpose motorcycles that are built for both on and off road.-High Performance. specialised off road motorcycle.-Tour. These are bikes built for long distance rides. protect is number one on these bikes.-Sport. These are your speed bikes. They are built to go fast and look good.-Urban. These are the bikes built to cruise the road and get good gas mileage while they are at it. This is the commuter bike category, not flashy but dependable.EnduroHigh PerformanceTouringSportUrbanYoung Male21 / 3Adult Male11 / 3Female221Core products2Rarely sold to these individuals3Biggest emptor of items in this categoryImportant CellsYoung Male /Sport. This is the primary product line for this orchestrate 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 entire market. BMW has been behind in this line, and only recently bring competitive within the past few years. Although they now have one of the highest performing motorcycles, it is difficult to overcome the brand citation the Japanese motorcycles have built up in this line. The competitive advantage in this line is gained through with(predicate) a mix of performance and appealingness, with cost also a major factor. Perceived performance and style may be more important than true performance and style.Young Male / Urban. This is a growing market the past few years. BMW is neck and neck with all its competitors to view a share, due to the newness of this motorcycle category. This is important, because getting the recognition and sales in this product line can affect the sales of the other lines. No company currently has an advantage. The advantage can be achieved by pass a motorcycle with excellent handling, great gas mileage, at a low cos t. One of BMWs products, the F650, has been seeing robust sales due to the high MPG. BMW is poise to gain an advantage in this market, the backbone pull up stakes be to ensure the BMW name recognition is realized within this pose market.Adult Male Enduro. BMW has had the leading product in this market since the foundation of their R GS line of bikes. This award winning product has been continually recognised 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 will be a learn reflection of the company. BMW has been able to sustain their advantage in this market / line by continually improving the product.Adult 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 buy ing their R-RT models in increasing numbers for the past five years. This has had a direct mend on the sales volume of not only this product, but the touring line as a whole. The police usage has given BMW greater brand recognition. Keeping the bikes visible within police forces will be the primeval to maintaining their competitive advantage. There are only two real competitors in this 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 better durability, performance and comfort than the competitors. These are all key attributes for this target market.BMW has been pursuing new markets and products they also have opportunity to develop both, especially in the female rider market. In the past few years, BMW has introduced reformd models of their existing motorcycles to increase their appeal to younger markets. They have greatly increased their performance and s tyling, both key attributes sought after by this largest target market. As a result of developing this market, profits in the young male market have soared. In addition, BMW has introduced all new models of motorcycles. Of these new models, the most 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 frosty sales.BMW does not hold a competitive advantage in the motorcycle market this is due to several factors. BMW motorcycles are expensive. In many 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 unforced to spend the increased cost for a higher quality product. In motorcycle sales, no company holds a sustained competitive advantage. The Japan ese 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 different company each year as new bikes are introduced.The price points for Honda, Yamaha, Kawasaki, and Suzuki are all similar for each comparable product with generally only several hundred dollars difference. Any competitive advantage among these companies will rarely last over a model year or two. hence there is no sustained competitive advantage among these rivals. Due to the similarities in the product offerings between all these companies, unless some revolutionary technology is developed, it will be nearly impossible to sustain any competitive advantage. node rejoicing is a high priority with BMW in 2001 BMW Motorcycles introduced the Customer-Oriented Sales and issue Process. This process is used from made-to-orderer order to speech communication. It begins with an online ordering system which allows a BMW Motorcycle dealer to send a customers order directly to the manufacturing plant, eliminating wholesalers or resellers and providing instant delivery status. This system also allows the customer to change any detail of his order, up to the minute that merchandise is begun.All BMW motorcycles and move are built at the BMW plant in Berlin, Germany. BMW motorcycles were originally built in BMWs historic Munich plant until the 1960s. BMW concentrates all motorcycle related output, to include many component parts in the Berlin plant. This plant can build up to 500 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.The 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. L ike their motorcycles, the production plant is focused on ergonomics and efficiency. In addition, the grinder incorporates numerous environmental friendly processes. Many of these processes, including production water recycling, also inspection and repair to cut production costs.The BMW logistics division is responsible for organizing the motorcycle production. Together with marketing, sales and production departments it plans the production schedule, generates the best production sequence and ensures timely delivery of the motorcycle to the customer. Logistic specialists plan and coordinate the delivery of material to host and make sure that quality parts are cost-efficiently delivered to the production line.BMW Motorcycles has more than 400 external suppliers provide some 9,000 different parts and components. These parts are delivered to BMWs Berlin plant on time and in the correct quantities. Most of the suppliers specialize in motorcycle parts for BMW. 65 % of the suppliers a re located in Germany, 34 % in Europe and 1% in USA and Japan.In 2001, BMW reengineered its distribution process to reduce costs and improve response time for dealers and parts vendors. Once the motorcycle is completely assembled, it is transported from the factory direct to the retailer who placed the customers order through a Retailer Channel method. BMW uses a variety of transportation 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.BMW 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 image and ensure customer satisfaction is met, the dealers comply with corporate requirements and guidelines in the presentation of their facility. BMW considers corporate identity a nd brand image to be overriding to maximize awareness of the differences between it and its competitors. These guidelines establish standards for interior and exterior design, levels of customer service, signage, typefaces and advertising. The goal of these requirements is to maintain BMWs prestigious reputation.In addition, BMW provides management support, upbringing courses for all dealer staff, recruitment assistance, marketing support, and an internal comprehensive online character reference system which gives immediate access to up-to-date product and corporate information.BMWs dedication to customer service, both service visible to the consumer and services which are transparent, give it a decisive advantage within its distribution channels. By striving to provide the customer the exact product desired, in a timely manner, they have streamlined their distribution processes. In addition to providing satisfaction to the consumer, this retailer channel process has cut transpor tation and resale costs to the hit of both BMW and the customer.The benefits of BMWs Customer-Oriented Sales and Production Process arethat 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 decently 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 progress 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 limited options. It is a dice instrument that the configuration you want is in stock locally.This 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 another BMW over any of the competitors brands. This is decidedly one of the factors giving to the steady increase in market share of BMWs, and thus proof of BMWs competitive advantage.References1.BMW Group.http//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.http//www.webbikeworld.com/Motorcycle-news/blog/4. Hoffman, Nicole P. An Examination of the sustainable Competitive Advantage Concept Past, Present, and FutureAcademy of Marketing Science Review Online 20005.BMW Berlin Manufacturing Planthttp//www.bmw-werk-berlin.de/berlin/htdocs/side/produktion/logistik/index_logistik.htmlThe Motorcycles1.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