BMW FILMSBMW FILMS

LAUNCHING A NEW CAMPAIGN IN NORTH AMERICALAUNCHING A NEW CAMPAIGN IN NORTH AMERICA

SynopsisSynopsis

In August 2001, Jim McDowell, VP of marketing In August 2001, Jim McDowell, VP of marketing at BMW North America (BMWNA), is debating at BMW North America (BMWNA), is debating how to respond to the success of the company’s how to respond to the success of the company’s latest marketing campaign, "BMW Films." latest marketing campaign, "BMW Films."

The campaign features five short films The campaign features five short films (collectively titled “The Hire”) that viewers (collectively titled “The Hire”) that viewers could access by going online to could access by going online to www.bmwfilms.com. www.bmwfilms.com.

The response to the films, that were directed by The response to the films, that were directed by a cadre of top Hollywood directors, has been a cadre of top Hollywood directors, has been overwhelmingly positive. overwhelmingly positive.

SynopsisSynopsis

The question facing McDowell now is, what The question facing McDowell now is, what should BMW do going forward? McDowell is should BMW do going forward? McDowell is currently considering four options. currently considering four options. 1.1. The first is to “milk” the five films by making The first is to “milk” the five films by making

them available to a wider audience. them available to a wider audience. 2.2. The second is to develop more installments The second is to develop more installments

of the “The Hire” series. of the “The Hire” series. 3.3. The third is to develop a full-length feature The third is to develop a full-length feature

that would play in movie theatres around the that would play in movie theatres around the country. country.

4.4. The fourth is to The fourth is to do nothing and simply do nothing and simply move on to the next idea.move on to the next idea.

Case analysis…Case analysis…

Our plan is to undertake a straightforward Our plan is to undertake a straightforward marketing analysis of the case, including: marketing analysis of the case, including: an examination of the company’s current an examination of the company’s current

situation (company analysis), situation (company analysis), a diagnosis of the problems facing the a diagnosis of the problems facing the

company (problem analysis), and company (problem analysis), and an evaluation of the BMW Films campaign an evaluation of the BMW Films campaign

with respect to the company’s strategic with respect to the company’s strategic goals.goals.

The ultimate driving machineThe ultimate driving machine

The core of BMW product line was its sedans offered The core of BMW product line was its sedans offered as:as: 3 Series: entry-level sedan (launched in 1975) 3 Series: entry-level sedan (launched in 1975)

aimed at upwardly mobile professionals. In 1989, aimed at upwardly mobile professionals. In 1989, the 3 Series accounted for about half of BMW the 3 Series accounted for about half of BMW sales. Retail price ranged from US$25,000 to sales. Retail price ranged from US$25,000 to US$34,000; US$34,000;

5 Series: mid-range sedan, launched in 1972, 5 Series: mid-range sedan, launched in 1972, accounted for about 32% of unit sales in 1989. accounted for about 32% of unit sales in 1989. Retail price ranged from US$37,000 to US$44,000; Retail price ranged from US$37,000 to US$44,000;

7 Series: flagship sedan launched in 1977, 7 Series: flagship sedan launched in 1977, accounted for about 16% of BMW sales in 1989. accounted for about 16% of BMW sales in 1989. Retail price ranged from US$54,000 to US$70,000.Retail price ranged from US$54,000 to US$70,000.

Sales MomentumSales Momentum

In 2001 sales hit an all time high, topping In 2001 sales hit an all time high, topping 213,000 units in the U.S. 213,000 units in the U.S.

BMW surpassed Mercedes Benz to become BMW surpassed Mercedes Benz to become the #2 luxury brand behind Lexus. the #2 luxury brand behind Lexus.

BMW’s share of mind was higher than ever BMW’s share of mind was higher than ever in the luxury segment.in the luxury segment.

16% of the new luxury car buyers preferred 16% of the new luxury car buyers preferred BMW, whereas11% each preferred BMW, whereas11% each preferred Mercedes Benz and Lexus.Mercedes Benz and Lexus.

Brand CredibilityBrand Credibility

BMW launched in the US with a dual BMW launched in the US with a dual positioning of prestige & performance. positioning of prestige & performance.

Credibility for positioning was significant Credibility for positioning was significant along both dimensions. along both dimensions.

Its luxury brand perception cemented Its luxury brand perception cemented through the “Ultimate Driving Machine” through the “Ultimate Driving Machine” campaign, and depicted images of campaign, and depicted images of affluence, style, and prestige. affluence, style, and prestige.

Superior handling, technological Superior handling, technological innovations and German heritage gave innovations and German heritage gave BMW its reputation for high performance. BMW its reputation for high performance.

Product & Marketing MomentumProduct & Marketing Momentum

Over several preceding years, BMW had launched: Over several preceding years, BMW had launched: the flashy Z3 roadster the flashy Z3 roadster the high-performance M-roadster the high-performance M-roadster the pricey Z8 roadster and the pricey Z8 roadster and the X5 sport utility vehicle. the X5 sport utility vehicle.

BMW perception of being a leading innovator in BMW perception of being a leading innovator in product design and producer of the world’s most product design and producer of the world’s most exciting luxury cars was further strengthened.exciting luxury cars was further strengthened.

Product & Marketing MomentumProduct & Marketing Momentum

Its award-winning launch campaign for the Its award-winning launch campaign for the Z3 Roadster mainly responsible for creating Z3 Roadster mainly responsible for creating the perception, the perception,

Z3 Roadster incorporated several non-Z3 Roadster incorporated several non-traditional elements e.g. a high-profile traditional elements e.g. a high-profile product placement in the James Bond film product placement in the James Bond film GoldenEyeGoldenEye..

Case analysis objectives…Case analysis objectives… To try to: To try to:

Understand assumptions regarding Understand assumptions regarding traditional traditional and non-traditional advertisingand non-traditional advertising and forces and forces driving the latter; driving the latter;

Understand how execution of the campaign Understand how execution of the campaign succeeded in succeeded in creating a fundamental difference creating a fundamental difference (unique positioning) (unique positioning) in the minds of consumers; in the minds of consumers;

Evaluate extent to which the campaign Evaluate extent to which the campaign succeeded in affecting consumer ‘succeeded in affecting consumer ‘expectations’, expectations’, ‘norms of behavior’, and ‘relationship dynamics’‘norms of behavior’, and ‘relationship dynamics’. .

NOTENOTE: A point to keep in mind would be that : A point to keep in mind would be that BMW has tended to be in and out of vogue in BMW has tended to be in and out of vogue in North America over the past few decades. North America over the past few decades.

BMW Sales History in N.A.BMW Sales History in N.A.