BMW FILMSPresented

By:

Matt LeeJared CollinsMarc Norsen

Eric RoweSteven Pfefferle

Duran Keller

Marketing History

Ultimate Driving Machine Campaign This campaign tried a duel positioning of prestige &

performance Targeting

Young urban professionals Affluent and stylish, without a conservative image

The Dark Years BMW became an image as a “yuppie car” Toyota created the luxury line Lexus Nissan created Infiniti

Marketing History

The 1990’s BMW introduced the 325i sedan, 740i sedan BMW also began an aggressive pricing strategy

New Advertising The main image of the brand was the same

Exciting luxury car Same target market

The 3C Analysis Company

Background Bayeriche Motoren Werke (AG) founded in 1916 as aircraft

engine manufacturer Munich-based BMW produced first automobile in 1929 In 1980’s, the company’s position in luxury/performance

segment of global automotive market has been established

Objective Organization specific

Profit organization

Time horizon specific Short-term objectives

BMW Films brings creative advertising strategy

Long-term objectives Introduce a number of new models in core series Aggressive pricing strategy Reorganize its dealer network

The 3C Analysis

Resources Hollywood Directors: John Frankenheimer, Ang Lee, John

Woo, Wong Ker-Wai, Guy Ritchie, and Alejandro González Iñárrita

Actors: Clive Own, Mickey Rourke, Madonna, Don Cheadle, and Stella Skarsgaard, Marilyn Manson

Costs BMW Films Production Costs: $15 million Media Expenditures: $62.4

The 3C Analysis

Company Fit Sedans, coupes, convertibles, sport wagons, roadsters,

sport utility vehicles

Collaborators Distribution channel: internet, movies, television Supply chain: Dealerships

The 3C Analysis

Customer Target Market

Approx. 46 year old, well educated married males with a median income approx. $150,000

2% market share in U.S., 7% in Germany, 5% in rest of Europe

Growth of 40%, to 300,000 cars per year

Consumer Behavior Customer’s have a degree of loyalty

Start with the smaller cheaper cars when they are younger Progress to bigger, more expensive cars as they age

85% of BMW purchasers used the internet before purchasing their BMW.

The 3C Analysis

Competition Who: Luxury vehicle manufacturers

Acura, Audi, Infiniti, Jaguar, Lexus, Mercedes, Porsche, Saab, Volvo

How Many These nine companies Makers who also have luxury models, including Cadillac,

Ford, Lincoln, etc.

The 3C Analysis

Current 4P Decisions Product

Entry Level Sedan: 325i Mid-Level Sedan: 530i Flagship Sedan: 740iL Featured Vehicle in BMW Films:

M5, 740iL, 540i, X5, Series 3 coupe and Z3

The 3C Analysis

Price Entry-Level Sedan: $27,635

Lower than the average price of the 10 companies profiled at $28,435

Lower than the median price of $27,815

Mid-Level Sedan: $40,045 Lower than the average price of $40,517 Higher than the median price of $39, 263

Flagship Sedan: $67,545 Higher than the average price of $64,974 (9 companies

profiled, Saab excluded) Equal to the median price of $67,545

The 3C Analysis

Promotion BMW spent $62.4 million on media expenditures,

third lowest amount of out 10 companies BMW ranked second in sales with 213,127 units to

Lexus’ 223,983. Lexus’ media expenditure of 187.3 is more than three

times the amount BMW spent in 2001

Place Available for sale in 150 countries worldwide 340 dealerships in United States

The 3C Analysis

Sales 1991-2001

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AcuraBMWLexusMercedes

Possible Reactions Toughest Competitor

Lexus was the only manufacturer with more sales in units than BMW

Mercedes stole the most business from BMW “Out of the 100% of BMW customers who disposed of their

BMWs and purchased a non-BMW car in the luxury automobile segment, 37% replaced their BMW with a Mercedes, whereas 12% replaced their BMW with a Lexus”

The 3C Analysis

Expected Future Actions BMW must focus to equal if not better the standards of

Mercedes in order to retain their market share

Entry The marketing decision to make BMW Films was an

unprecedented move for an automotive company, with a high-risk investment of $15 million

The results were staggering, with sales booming 17.4% in 2002

The 3C Analysis

Marketing Approach

Non-Traditional BMW had a relatively small budget for advertising and

marketing. “Golden Eye”

Situational They were not going to introduce any new products and wanted

to launch a campaign to let people know what BMW was all about.

BMW Films BMW decided to get Hollywood’s best and brightest directors

to pick from 15 scripts to create a 6-9 minute film. Risk Reward

Target The target was young professionals in urban areas. BMW

produced print ads, posters and TV trailers all modeled after a feature film

Marketing Approach

Future Marketing

Existing Films BMW could have built on the success of the films and just

expanded their audience Theater films Distribute DVDs

BMW as a low budget advertiser In 2001 BMW had media expenditures of $62.4 Million

8 out of 10 comparable manufacturers

In 2001 BMW had total sales of 213,127 2 out of 10 in total sales

Sales-Expenditures Comparison

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LexusBMWMercedes-BenzCadillacAcura

Additional Films 90% of visitors to the site requested more films. Stars were willing to feature in more films, including Don

Cheadle Films popularity began to flourish through word of mouth

which would continue the success of the campaign The films focused on the performance of the vehicles Showed action shots, which attracted the BMW customer

Feature Length Film Too expensive and similar to the Bond films

Future Marketing

Recommendation

Continue to produce a second set of films to capitalize on the success and the buzz from the first set.

These films should use the character of the driver (Clive Owen) to show the swagger and attitude of the BMW.