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For the year 2007, BMW of North America LLC
(BMW LLC), the North American arm of a leading German luxury car
manufacturer BMW AG, reported sales of 293,795 BMW branded
vehicles.1 This represented a growth of 7.1 percent compared to
2006.2
Even in 2006 the BMW branded vehicles had posted a growth of 3
percent compared to 2005. These were good figures for a brand
that many industry-watchers felt was not as big in North America
as it was in Europe.
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In fact, between 2001 and 2005 the sales of BMW
branded vehicles in North America had increased by 62 percent, far more
than any competitor and its new products were also well received. So,
when the management at BMW LLC started an effort to reposition the BMW
brand in North America with a new promotional campaign, it took many
analysts by surprise.
The senior management in the company felt that for BMW AG to realize its
ambition of increasing the global sales of BMW branded vehicles to 1.6
million by 2010, the company's North American arm had to become a major
growth driver.3 They felt that there was tremendous scope for growth
considering that BMW's market share in the automobiles market in North
America was less than 2 percent.
However, an in-house research conducted by BMW LLC, in 2005, revealed
that a large percentage (75 Percent) of luxury car buyers in the US did
not even consider BMW vehicles at the time of purchase. The management
attributed this situation to BMW's overemphasis on "performance driving"
over the last 33 years.
This one dimensional focus on performance had led to the customer
perceiving BMW as a brand that 'lack humanity'.4 The management also felt
that the brand was still strongly associated it with the yuppie5
phenomenon of the 1980s. According to the management, these were major
disadvantages as the buyers were looking for brands that stood for
larger values.
The insights gained from the in-house research, prompted BMW LLC to opt
for a new advertising agency, GSD&M, in November 2005. Subsequently, in
May 2006, the company launched a new advertising campaign to reposition
the BMW brand. With the new campaign, the company promoted itself as a
"company of ideas".
The marketing communication was a huge departure from the company's
communications in the past. The series of new ads no longer stressed
BMW's performance, but strove to project its design prowess and
corporate culture that fostered innovation.
In doing so, the company said that they wanted to take their brand
beyond yuppies and attract a wider section of the affluent class. The ad
campaign was designed with the objective of building demand for BMW by
reaching out to consumers who had not until then considered purchasing a
BMW vehicle.
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1] "BMW Group Reports 7.1 Percent Sales Increase
in 2007," www.autospectator.com, January 5, 2008.
2] "BMW Group Report 7.1% Increase in 2007 Sales,"
www.carbuyersnotebook.com, January 3, 2008.
3] Neal E Boudette and Gina Chon, "Brawny BMW Seeks
'the Idea Class'," www.moneyweb.co.za, August 2, 2006.
4] David Kiley, "BMW Targets New Drivers,"
www.businessweek.com, May 5, 2006.
5] Yuppie, short for "Young Urban Professional,"
describes a demographic of people primarily comprising of the children or
grandchildren of the baby boomer generation (people born between 1945 and 1964).
In general the yuppies are highly-educated and upwardly-mobile and are aged from
early twenties to early-to-mid thirties as of 2006. They tend to hold jobs in
the professional sectors, with incomes that place them in the upper-middle
economic class. The term "Yuppie" emerged in the early 1980s. |
