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Case Analysis : BMW Films

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David Capone

on 31 March 2014

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Transcript of Case Analysis : BMW Films

Brief History Timeline
The BMW Film
BMW stands for Bayeriche Motoren Werke
Founded as an aircraft engine
Produced its 1st automobile
Late 1970s
One of the hottest luxury brands in North America
Sales rebound with promising future
Market shift &
Sales tumbled
Late 1980s
: The 5 series
BMW mid-range sedan
: The 3 series
BMW entry-level sedan
1977:The 7 series
BMW flagship sedan
Directed By
1. Background
2. Brand Value
3. Options and Recommendations
Company Background
-1916, BMW(Bayericher Motoren Werke) established as an aircraft engine manufacturer in Munich, Germeny
-BMW’s blue and white logo -- a whirling propeller which records the company’s history. 
-1929, first automobile produced
-Core product line was its sedans
-Late 1970s, “Ultimate Driving Machine” with dual positioning(prestige+performance) suits the era of “conspicuous consumption”

-Late 1980s, Pragmatism began replacing the conspicuous consumption pattern; fresh competition from Japan: Honda, Toyota(Lexus),Nissan(Infiniti), offer superior quality, reliability and service at lower price, sell by exclusive dealership with excellent service, and promote large-scale advertising
-1991, sales touched the bottom, BMW took actions: new models in core series; aggressive pricing strategy; dealer network reorganization; new series introduction; make product more suitable to North American market

-A new brand image was formulated, “the world’s most exciting luxury cars” “the ultimate driving machine tagline”

-1996-2001, BMW sales rebounded
.Strong competitors
Japanese cars
Competitors copy BMW creative marketing ideas

.Marketing approach
Differentiate from competitors
Limited marketing budget
Exploit Internet, non traditional advertising approach
Repositioning BMW
.BMW Brand repositioning goals :
-From “made in Germany” to “Made by BMW”
-From “Bavarian mystique” to “ Cultural icon of the American life”
-From “Precision engineering” to “ Fun to drive”

.Strengthen brand image in luxury segment

Introduction of the campaign : product placement
.BMW and James Bond
BMW and James Bond
.Focus on brand power and brand equity
-New way of communicating
-No new product to promote lead to pure branding
-“What makes a BMW a BMW?”

.Marketing channels
-TV : trailer
Brand building
-Change perception of BMW
-Try and migrate people up the level of cars throughout their life, and they have done a good job of migrating people up the brand
-The brand is healthy
The films:
.They are good and well made

.Are they effective? Do they make sense for BMW?
Films targeting
-Experiential customers
-Middle age crisis
-Psychological value
-Car lovers

Only available online
-Make the films exclusive
-Know how many people downloaded it
-$7.50/viewer – cost divided by people who saw it
-If more people saw it, maybe $2.5 per viewer

.There is risk with the execution of the films
People might be offended
The oldest might be most offended
The oldest customers are the most profitable customers
They are the most loyal customers

.They are targeting the younger people with the BMW campaign
Online distribution
Make it hard for the old people to access
They will not be offended as the old people wont access it
And if they actually go and see it, they are actively seeking it out
-The target market is potential buyers not current buyers
-To get the net generation of BMW customers
-Edgy, cool brand
They are willing to take a risk
-Luxury brand
Seen as a very conservative brand
Mercedes Benz
-Jean Charles

New Problems and Challenges Cont.
BMW needs to continue to build the next generation of BMW buyers and the brand needs to be seen as relevant and cutting edge

The company has limited marketing dollars and will not be satisfied with diminishing returns
---In 2001, BMW spent $62.4 million on media expenditures, a third of what Lexus spent
Possible Solution 1
“Milk” the existing films
--- Make Films available to a wider audience
Release them to theaters to be played alongside trailers
Make DVD’s available at dealership
 More people and demographics are reached
 Make full-length versions
 BMW already knows that people enjoy the films
 May target the wrong people
 Lose the call to action required for internet viewing
 Limited amount of extra success from using the same material
Pushing the product out to the public will cause BMW to lose loyal customers who like to feel superior
Possible Solution 2
Develop more short films

 High chance of good ratings, people requested more videos
 Build upon momentum created from first campaign
 Create a “collectors set” and make this campaign a classic
 Would cost another $15 million
 Possibility of people seeing it as unoriginal
 Diminishing returns
Possible Solution 3
Create full-length feature
Movie that will air in theaters across the country
 Huge production would really put BMW’s name out
 Possibility of profits from movie sales
 Very expensive, BMW does not have a huge marketing budget
 Questionable how many people would pay to see the movie

Extensive exposure to the public will cause BMW to lose loyal customers who like to feel superior
Possible Solution 4
Make no more moves on BMW Flims
Move on to the next advertising campaign

New ideas eliminate possibility of diminishing returns
Avoids having to deal with copycat ideas
People will be disappointed that BMW left campaign at only 5 films
Throwing out an already successful idea
Next idea may not be as successful, or may even tank
Option 2: Develop more short films
Our Chosen Solution
Over 90% of viewers requested more short films

Release quickly to take advantage of momentum behind the first 5 films
---Avoid trying to “repeat” the success and
instead try to continue to build upon the
original films
---Must release before any copycat films hit the
Chosen solution Cont.

Stop at 10 films
---Budget concerns
---$15 million
---Avoid the effect of diminishing returns

Release the film online and as a “Collectors’ Set”
---Establish the film as a classic

Aviod advertising the films through public press
---Have to let loyal customer still feel the superiority of owning a BMW
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