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Transcript of BMW
Bayerische Motoren Werke (AG)
Founded in 1916 as an aircraft engine manufacturer
Produced its first automobile in 1929
Headquartered in Munich, Bavaria, Germany
Owner of Mini cars and parent company of Rolls-Royce
The BMW: The Ultimate Driving Machine
Three Distinctive Series:
The 3 Series (1975): entry-level sedan which accounted for about half of the BMW unit sales; price $25,000 - $34,000
The 5 Series (1972): mid-range sedan which accounted for 32% of unit sales; price $37,000 - $44,000
The 7 Series (1977): flagship sedan: accounted for 16% of sales; price $54,000 - $70,000
Ups and Downs
1. Cannibalism - introduced new models in existing core Series
2. Penetration pricing - the new 325i was under $30,000 and the new 740i was under $55,000
3. Problem solving - restructured its management to ensure consistency in customer service
4. New products - Z3 roadster (1995), M roadster (1997), Z8 roadster (1999), X5 SUV (1999)
New brand image as "the world's most exciting luxury cars"
BMW sales have increased significantly
Derived from need for non-traditional advertising
BMW had some flexibility in their calendar in early 2000
No new products being launched in the next 6 months
Produced a series of short films for the internet
Knew this would reach less people than TV ads but felt the payoff would be greater
Main goal was to give customers a memorable experience
After 4 months, the films had over nine million views
Very positive feedback from viewers
"I was captivated!"
"My next car will be a BMW, so help me God."
People were showing the films to their friends
Ambush - BMW 740iL
Chosen - BMW 540i
The Follow - BMW 3 Series coupe and Z3
Star - BMW M5
Powder Keg - BMW X5
Cathy, Kelsey, Malorie, Max, Nick
Late 1970s -
BMW is the hottest luxury brand in North America
“The Ultimate Driving Machine” slogan - Prestige + Performance
Original Competitors: Cadillac, Mercedes-Benz, Jaguar
Late 1980s -
Acura, Lexus, Infiniti has entered the market
BMW is known as the “Yuppie Car”
Lexus has taken over as the number one luxury import in the country
Possible Option #1
"Milk" the existing films and make them more widely available
Release them to theaters to be played during the trailers at the beginning of a motion picture.
Release the films in their full length versions.
• The films will reach a wider range of demographics.
• Profits of the full-length versions.
• BMW already knows that people enjoy the films.
• May attract an unwanted audience.
• Material may become stale, and the company may lose the customers who value originality.
Possible Option #2
Develop more short films
Make Films available as DVDs at the dealerships.
Possible Option #3
Possible Option # 4
Create a full length movie
Discontinue any film making
Whatever BMW may have in store in terms of future advertising, they should go with it and discontinue and means of film making.
• New ideas of advertising may eliminate the possibility of diminishing returns.
• Avoid competitors using the same idea as using film making.
• Customer disappointment is possible by the ending of the short films.
• Ending an already-successful campaign.
• New idea may not be as successful, and can lead to a loss of profits.
Create a full length feature movie about BMW vehicles, and incorporate the benefits of being an owner.
• The production would place the brand BMW on the mind of the potential audience.
• Large profit is a potential result of production.
• Production may be expensive, and may not coincide with the tight advertising budget.
• Audience is questionable, and it is unsure as to how many people would view this movie.
Make 5 more short films quickly
Combination of option #1 and option #2
• Make available to a wider audience
• Utilize DVD distribution
• Construct more short films
• People most likely will enjoy the new material and request more videos.
• Possible for the films to become BMW’s bread and butter campaign.
• May be able to sell the series as a “Collector’s” set.
• It would cost BMW another $15 million.
• May experience diminishing returns.
• Puts BMW into a time crunch.