Distribution Channel Management

BMW Motorcycles is a division within the BMW Group. As such their mission is tied to that of the parent company. On the BMW Group website it is noted as follows: ”Identifying possible and encouraging growing. Knowing what we represent. Acknowledging where our strengths prevarication and doing the best usage of every chance. Following a clear scheme. Goals we have attained are in kernel the point of going for new challenges.

This is the doctrine that inspires every person at the BMW Group. It influences the company’s construction and it plays a critical function in the decision-making procedure. Our corporate ethos finds its look in the sturdy chase of the superlative. The consequence? Outstanding brands with an unmistakable profile. Cars and bikes which fascinate people all over the universe and which win hosts of new supporters every twenty-four hours. And a grade of success which sees the BMW Group go from strength to strength.

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With the three trade names. BMW. MINI and Rolls-Royce Motor Cars. the BMW Group has its sights set steadfastly on the premium sector of the international car market. To accomplish its purposes. the company knows how to deploy its strengths with an efficiency that is unmatched in the automotive industry. From research and development to gross revenues and selling. BMW Group is committed to the really highest in quality for all its merchandises and services. The company’s phenomenal success is proof of this strategy’s rightness. ”BMW Motorcycles provides a robust merchandise line following three general classs: Touring. Sport. and Enduro. Touring motorcycles are built for the long draw. with rider comfort as the premium. These are the bikes you would take on a cross state trip. Sport bikes satisfy the “need for speed” and titling tendencies for the younger crowd. Enduro motorcycles are for the adventurer is us all ; these motorcycles are built for on or off route travel.

BMW Motorcycles’ chief competition comes from Nipponese bike companies. Most American bike companies produce cruiser manner motorcycles ; BMW offers small pick in this manner of bike. However. each of the chief Nipponese makers ( Suzuki. Yamaha. Honda. and Kawasaki ) offers bikes that are really similar in manner and public presentation. Although BMW has historically had its ain niche in the market. that of the older male. it has late branched off into more dedicated off-road and super-sport motorcycles. These are classs that have been historically dominated by the Nipponese makers.

Throughout the old ages. BMW bikes have been renowned for their lastingness and technology. BMW has ever been on the head of bike technology. BMW was the first bike maker to offer ABS on a bike. They have besides revolutionized bike suspensions with their Telelever anti-dive suspension and Paralever single-arm suspension. Although BMWs are more dearly-won. that monetary value is offset by the life rhythm of the bike.

Until recent old ages at that place hasn’t been much of a competition between the Nipponese makers and BMW Motorcycles. BMW had its little topographic point in the market and was non a menace to the Nipponese houses. BMW Motorcycles were non known to be fashionable or fast. the two classs that attract the bulk of bike purchasers. BMW attracted more mature proprietors who were impressed by the machine’s dependability and lastingness. and who had more money to pass on a new motorcycle. The deficiency of power was partially due to BMW self-imposed restrictions on HP in bikes.

However. these restrictions were lifted in the late ninetiess. and BMW began to bring forth super-sport motorcycles that rivaled the Nipponese motorcycles. and even surpassed the Nipponese competitor’s public presentation. Up to this point. immature males were seldom interested in buying BMWs. They cost twice every bit much as the cupboard Nipponese motorcycles. they were slower. and they were less attractive. In kernel they were the Volvo of the bike universe. However. like Volvo. one time BMW redesigned their merchandise line into more powerful and fashionable bikes. they began to rapidly cut into the Nipponese manufacturers’ market portion.

BMW bikes have systematically won “Best Bike” awards in assorted classs within the past few old ages. Several of these awards include “2005 & A ; 2006 Best Touring Bike” for the R1200RT. and “2005 Best Adventure Bike” for the F650GS. BMW Motorcycles reported December 2006 gross revenues up 36. 8 % over the same period in 2005. In 2005. one-year gross revenues worldwide for BMW topped 100. 000 bikes. In 2004. about 5. 7 million bikes were sold in the US. of which 12. 825 were BMWs. Estimates of market portion 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 “Other” at 13. 7 % . Although BMW additions less than 2 % of entire US bike gross revenues market. they merely reflect less than half of BMW’s worldwide gross revenues. BMW sold more bikes in Italy ( 13. 651 motorcycles ) . than in the US. and Spain was a close 3rd with 10. 002 motorcycles.

The BMW R1200GS has been the top merchandising motorcycle worldwide for the past several old ages. As a consequence. Nipponese bike makers have late introduced big engine double athletics motorcycles to their batting orders to vie with the BMW. The BMW R1200RT has been progressively sought after by constabulary sections as their motorcycle of pick. replacing the pillar Kawasakis. With their of all time increasing popularity and gross revenues. BMW is going a menace to the Nipponese makers and the competition is turning.

Two of the primary properties for bikes are lastingness and public presentation. Durability is defined as the capableness of defying wear and tear. it is measured by a merchandises ability to execute or vie over a long period. For a bike this can include engine life. the ability to carry on fixs. and keeping of market value. Performance is defined as the manner in which person or something maps. For bikes it includes horsepower. acceleration. cornering ability. and maximal velocity.

Target MarketsTarget Market 1: Young Males 18-25- Generally college age males. manner and public presentation are the biggest factors for this group. Cost could be an exclusionary standard. as this group may non hold a big hard currency base.

Target Market 2: Adult Males ( 25-40 ) – Established professionals. Performance non every bit large a factor as lastingness or economic system is. This group is willing to pass more for a higher quality merchandise. They are manner witting. but manner is non needfully a premier factor.

Target Market 3: Females ( all ages ) – Female bike purchasers are a turning market. but still little plenty to handle all ages as a remarkable group. Female riders by and large are looking for something economical and fashionable. Performance is low on the list of standards.

Primary Product Categories.

-Enduro. These are double purpose bikes that are built for both on and off route.

-High Performance. Specialized off route bike.

-Tour. These are motorcycles built for long distance drives. Comfort is figure one on these motorcycles.

-Sport. These are your velocity motorcycles. They are built to travel fast and look good.

-Urban. These are the motorcycles built to cruise the route and acquire good gas milage while they are at it. This is the commuter motorcycle class. non brassy but reliable.

EnduroHigh PerformanceTouringSportUrbanYoung Male21 / 3Adult Male11 / 3Female221Core products2Rarely sold to these individuals3Biggest buyer of points in this categoryImportant Cells: Young Male /Sport. This is the primary merchandise line for this mark market. They are looking for manner and velocity. This is the class that provides those. This line is really of import. as this is the largest portion of the full market. BMW has been behind in this line. and merely late become competitory within the past few old ages. Although they now have one of the highest acting bikes. it is hard to get the better of the trade name acknowledgment the Nipponese bikes have built up in this line. The competitory advantage in this line is gained through a mix of public presentation and entreaty. with cost besides a major factor. Perceived public presentation and manner may be more of import than true public presentation and manner.

Young Male / Urban. This is a turning market the past few old ages. BMW is neck and cervix with all its rivals to catch a portion. due to the newness of this bike class. This is of import. because acquiring the acknowledgment and gross revenues in this merchandise line can impact the gross revenues of the other lines. No company presently has an advantage. The advantage can be achieved by offering a bike with first-class handling. great gas milage. at a low cost. One of BMW’s merchandises. the F650. has been seeing robust gross revenues due to the high MPG. BMW is poised to derive an advantage in this market. the key will be to guarantee the BMW name acknowledgment is realized within this mark market.

Adult Male Enduro. BMW has had the taking merchandise in this market since the debut of their R – GS line of motorcycles. This award winning merchandise has been continually recognized and awarded for its properties. It is the male monarch of the hill of enduro motorcycles. with no true competition in sight. This motorcycle has become on of the basiss of BMW bikes. and therefore its continued success will be a direct contemplation of the company. BMW has been able to prolong their advantage in this market / line by continually bettering the merchandise.

Adult Male / Touring. This class has seen big growing in the past few old ages. BMW is poised to derive an advantage here. due in big portion to the acknowledgment they are deriving by the constabulary forces. Police forces have been purchasing their R-RT theoretical accounts in increasing Numberss for the past five old ages. This has had a direct impact on the gross revenues volume of non merely this merchandise. but the touring line as a whole. The constabulary use has given BMW greater trade name acknowledgment. Keeping the motorcycles seeable within constabulary forces will be the cardinal to keeping their competitory advantage. There are merely two existent rivals in this class. the Kawasaki Concours and the Honda Goldwing. The Honda has been the leader in this line until several old ages ago when BMW gross revenues began to catch them. BMW provides better lastingness. public presentation and comfort than the rivals. These are all cardinal properties for this mark market.

BMW has been prosecuting new markets and merchandises ; they besides have chance to develop both. particularly in the female rider market. In the past few old ages. BMW has introduced improved theoretical accounts of their bing bikes to increase their entreaty to younger markets. They have greatly increased their public presentation and styling. both cardinal properties sought after by this largest mark market. As a consequence of developing this market. net incomes in the immature male market have soared. In add-on. BMW has introduced all new theoretical accounts of bikes. Of these new theoretical accounts. the most noteworthy are high public presentation athletics motorcycles to appeal to the immature males. and less powerful. smaller frame motorcycles to increase entreaty to novices and females. Since 1999 BMW has developed near to 15 new bike merchandises for debut. Each of these motorcycles has seen alert gross revenues.

BMW does non keep a competitory advantage in the bike market ; this is due to several factors. BMW bikes are expensive. In many instances they cost more than $ 10. 000 more than their market rival. Although BMWs are more lasting than their less expensive competition. the premier market does non look to be willing to pass the increased cost for a higher quality merchandise. In bike gross revenues. no company holds a sustained competitory advantage. The Nipponese bike companies. with their powerful. cheap bikes portion the competitory advantage over the American and European bike companies. However. this advantage tends to switch to a different company each twelvemonth as new motorcycles are introduced.

The monetary value points for Honda. Yamaha. Kawasaki. and Suzuki are all similar for each comparable merchandise ; with by and large merely several hundred dollars difference. Any competitory advantage among these companies will seldom last over a exemplary twelvemonth or two. Thus there is no sustained competitory advantage among these challengers. Due to the similarities in the merchandise offerings between all these companies. unless some radical engineering is developed. it will be about impossible to prolong any competitory advantage.

Customer satisfaction is a high precedence with BMW ; in 2001 BMW Motorcycles introduced the “Customer-Oriented Gross saless and Production Process” . This procedure is used from client order to bringing. It begins with an online ordination system which allows a BMW Motorcycle trader to direct a customer’s order straight to the fabrication works. extinguishing jobbers or resellers and supplying instant bringing position. This system besides allows the client to alter any item of his order. up to the minute that production is begun.

All BMW bikes and parts are built at the BMW works in Berlin. Germany. BMW bikes were originally built in BMW’s historic Munich works until the sixtiess. BMW concentrates all bike related production. to include many component parts in the Berlin works. This works can construct up to 500 bikes a twenty-four hours. BMW bikes are built to general specification and besides may be usage designed from anyplace in the universe. The Berlin works physiques bikes to the specific demands of the over 20 states they deliver to.

The BMW bike works in Berlin uses state-of-the-art engineering. It has been recognized as the most modern bike fabrication works in the universe. Like their bikes. the production works is focused on biotechnologies and efficiency. In add-on. the mill incorporates legion environmental friendly procedures. Many of these procedures. including production H2O recycling. besides help to cut production costs.

The BMW logistics division is responsible for forming the bike production. Together with selling. gross revenues and production sections it plans the production agenda. generates the best production sequence and ensures timely bringing of the bike to the client. Logistic specializers program and organize the bringing of stuff to assembly and do certain that quality parts are cost-efficiently delivered to the production line.

BMW Motorcycles has more than 400 external providers provide some 9. 000 different parts and constituents. These parts are delivered to BMW’s Berlin works on clip and in the right measures. Most of the providers specialize in bike parts for BMW. 65 % of the providers are located in Germany. 34 % in Europe and 1 % in USA and Japan.

In 2001. BMW reengineered its distribution procedure to cut down costs and better response clip for traders and parts sellers. Once the bike is wholly assembled. it is transported from the mill direct to the retail merchant who placed the customer’s order through a “Retailer Channel” method. BMW uses a assortment of transit methods including truck. rail. and sea lift ; depending on the finish of the merchandise. In the USA. BMW bikes are received and distributed out of two warehouse locations in New Jersey and California. From at that place. they are delivered direct to the retail merchant.

BMW Motorcycle traders are authorized by BMW to sell the bike merchandise line. and to besides supply an after gross revenues service to BMW clients. To keep trade name image and guarantee client satisfaction is met. the traders comply with corporate demands and guidelines in the presentation of their installation. BMW considers corporate individuality and trade name image to be paramount to maximise consciousness of the differences between it and its rivals. These guidelines set up criterions for interior and exterior design. degrees of client service. signage. fonts and advertisement. The end of these demands is to keep BMW’s esteemed repute.

In add-on. BMW provides direction support. preparation classs for all trader staff. enlisting aid. selling support. and an internal comprehensive online mention system which gives immediate entree to up-to-date merchandise and corporate information.

BMW’s dedication to client service. both service visible to the consumer and services which are crystalline. give it a decisive advantage within its distribution channels. By endeavoring to supply the client the exact merchandise desired. in a timely mode. they have streamlined their distribution processes. In add-on to supplying satisfaction to the consumer. this retail merchant channel procedure has cut transit and resale costs to the benefit of both BMW and the client.

The benefits of BMW’s “Customer-Oriented Gross saless and Production Process” are that the consumer can acquire an individualised BMW bike without holding to buy a cookie-cutter bike and legion after-market merchandises. The client gets his 1 of a sort bike right off the production line. In add-on. he can order his customized bike and have it in a relatively short period of clip. with instantaneous production advancement position available upon petition. These are benefits to the consumer that the rivals can non supply. With Nipponese makers. they sell the base bike with really limited options. It is a dice axial rotation that the constellation you want is in stock locally.

This degree of client service. along with the high quality of the bikes. creates a rabid dedication to the BMW trade name. BMW bike proprietor typically will buy another BMW over any of the competitor’s trade names. This is unquestionably one of the factors giving to the steady addition in market portion of BMWs. and therefore cogent evidence of BMW’s competitory advantage.


BMW Group.

hypertext transfer protocol: //www. bmwgroup. com2. BMW Group Mission. hypertext transfer protocol: //www. bmwgroup. com/bmwgroup_prod/e/nav/index. hypertext markup language? hypertext transfer protocol: //www. bmwgroup. com/bmwgroup_prod/e/0_0_www_bmwgroup_com/unternehmen/unternehmensprofil/strategie/strategie. html3. Web Bike World.

hypertext transfer protocol: //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/english/produktion/logistik/index_logistik. htmlThe Motorcycles:1. BMW Motorcycles. hypertext transfer protocol: //www. bmwmotorcycles. com/index. jsp2. Suzuki Motorcycles. hypertext transfer protocol: //www. suzukicycles. com/3. Kawasaki Motorcycles. hypertext transfer protocol: //www. kawasaki. com4. Yamaha Motorcycles. hypertext transfer protocol: //www. yamaha-motor. com5. Honda Motorcycles. hypertext transfer protocol: //powersports. honda. com/motorcycles

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