BMWs Company Of Ideas Campaign : Targeting the Creative Class

BMW Group AG
BMW was founded in 1913, when Karl Friedrich Rapp set up Bayerische Fligzeug-Werke to manufacture aircraft engines in the Munich district of Germany. 1916 World War I, the company manufactured aircraft engines for the Austrian Hungarian Army. 1917 due to short of funds Rapp colaborated with Camillo Castiglioni & Max Friz & the company rechristened itself as Bayerische Motoren Werke GmbH.

Fially in 1918 Franz Joseph Pope taken over the company & named it as BMW AG.

1918 manufactured its first aircraft engine, the TYPE IIIa.

After World War1, the Treaty of Versailles put a ban on production of aircraft engines.
1919 company started to manufacturing railway brakes.

1923 started manufacturing motorcycle engines and launched first model R32, a 500cc shaft driven motorcycle, designed by Max Friz. In late 1920s BMW came into car manufacture.

1928 company came up in market with its first car called BMW 3/15.

Company launched many successful models specially 327 saloon and 328 roadster.
In world War II, company started making again aircraft engines and took a back seat. 1952 company again began car production but fail to premium segment of cars but later on came up with BMW 700 in sedan segment. In 1961 launched BMW 1500 trendy sports car.

1970, company targeted export market & finally increased its export to US, America & Australia by 1980. In the same year a new company Diamler-benz AG flare up the rivalry . BMW launched a line of luxury cars to compete with Mercedes Benz. 1994, BMW acquired British car manufacture,M G Rover & gained the ownership of the companys successful brands like MINI & LAND ROVER.

Few brands of MG Rovers clashed with BMW.

In 2000 BMW sold M G Rover few brands.

In 1990s, BMW entered into a joint venture with RollsRoyce. 1998, both BMW & Volkswagen vied with each other to purchase Rolls Royce. Volkswagen bought Rolls Royce by outbidding BMW, but do not have the rights over its trademark. After 2003, BMW acquired the rights of Rolls-Royce and got the rights to use its name and logo. BMW launched the new model of new Rolls-Royce Phantom .

In early 2000, BMW launched new cars in its 1 series & 6series in the entry level cars, and the large coupe and convertible segment.

in 2005, company recorded a sales volume of 1,334,426 units in automobiles alone.

As of end 2005, it provided marketing, sales and financial services for some 340 BMW dealership, 330 BMW SAV dealership, 150 BMW motorcycles retailers, and around 80 MINI dealership. BMW manufacturing company, LLC in South Carolina is a part of BMW groups global manufacturing network and is the exclusive manufacturing plant for all Z4 Roadster & X5 SAV.

BMW : The Ultimate Driving Machine

BMW strives to change its customer s perception.

Initially BMW focused too much on two words Driving and Performance in their advertising campaign.
BMW then became synonym for driving which was also added to the tagline The Ultimate Driving Machine. Company was never bothered about the overemphasis on Performance Driving because of the momentous growth rate that it experienced.

Positioning Of The Brand BMW :

BMW positioned itself in the market in a way that was suitable only for those people who were mainly looking for performance. Company left behind the large chunk of people who looks beyond performance of a car. People had immense faith in BMW which was built upon regular communication . Then company never thought of Repositioning because of this faith of the people.

Going Beyond The Yuppies :

Yuppie Stands for Young Urban Professional who are highly educated and upwardly mobile. Rise in sales by 62 % in 2005 as compared to 2004. 75% of luxury car buyers did not consider BMW at the time of purchase. That is the reason BMW wanted to go beyond the yuppies and target the larger amount of customers.

New advertising contract was given to GSD&M with the motive to RE- POSITION the brand from its current one dimensional focus on performance.

TARGETING.
Crucial factor for any marketer.

What is Targeting
Targeting is also know as Target Group(TG).

Targeting is about the company wants.

The Group/segment of people company wants to reach.

How BMW can define its TG.

Age.

Location.
Gender. Income Level. Educational Level. Occupation.

Why BMW needs to Target

With a clearly defined target audience/group, it is much easier to determine where to market your products. Not only products, If your TG is set, it is easy to market your company too.

Targeting The CREATIVE CLASS

Emerging Creative class Engineers,musicians,artists,entrepreneur etc. Creative class of people Influential Class of consumer. People who were loyal to the company and stood by it.

THE COMPANY OF IDEAS CAMPAIGN

Independence and Freedom

New Ads Projected BMW as Company Of Ideas

Emphasis on performance features New Ads were simple BMW highlighted its autonomy and commitment to protect new ideas

Fostered creativity

Won the Pritzker Architecture Prize in 2004

Environment sensitivity One can drink water from discharge of 745h Fallingwater house being demolished by a wrecking ball

Reactions to the campaign

Originality concept

- good idea to expand the customer base.

- change in perception of customer.

Bad advertising - insecurity.

- what is the need of explaining themselves?

Segment Wise Revenue of BMW Group Products2005

Asia North America Rest of the Europe

Adapted from Financial Statement of BMW AG Financial Year 2005

Region-Wise Revenue of BMW Group2005(in%)

Asia North America Rest of the Europe UK Germany Other Regions

Adapted from Financial Statement of BMW AG Financial Year 2005

Vehicle Production
Vehicle Production (units) BMW MINI Rolls-Royce Motorcycles 2004 2005 Growth Rate (in %) 5.9 5.6 -20.9 -1.9 10,59,978 1,89,492 875 93,836 11,22,308 2,00,119 692 92,012

Adapted from Financial Statement of BMW AG Financial Year 2005

Delivered to Customers
Delivered to Customers (units) BMW MINI Rolls-Royce Motorcycles 2004 2005 Growth Rate (in %) 10.1 8.7 0.5 5.6 10,23,583 1,84,357 7,92 92,266 11,26,768 2,00,428 7,96 9,7474

Adapted from Financial Statement of BMW AG Financial Year 2005

Q: 1 Critically analyze BMWs company of ideas campaign. Do you think that this campaign, which targeted a new class of customers was necessary, considering the companys good performance in 2005 By A company of ideas, BMW tried to communicate its
independence and freedom to pursue innovative ideas. The criticizers perceived A company of ideas as a new tag line over The ultimate driving machine. But it was not a slogan. The slogan remained the same. It was positioning which the co. wanted to do with the lines A company of ideas.

It represents a way of talking about the company. This new campaign was targeting the creative class of the society. The other class of customer might get confused about it.

A study in 2005 revealed that 75% of the luxury car buyers in

US did not consider BMW at the time of purchase.

There was need to focus on such large no. of buyer group.

Although in 2005 the sales growth was at the top and was better than that of any competitor. The creative class of people had grown in numbers very fast in the last two decades and were expected to grow more in the next few decades.

So, it targeted the creative class of people.

This class of people lived by the power of ideas and admired

companies who championed creativity and ideas.

Creative class of people make buying decision based on how they feel towards a co. and what it stands for.

Q:2 Do you agree with the critics that BMW was losing its soul? Discuss. As 75 % of the American- did not consider BMW. There was a need for attracting a new segment of customers.

In 2005, BMW- boom in sales. So no threat of losing

existing customer.

They never change the slogan of The ultimate driving

machine.

A company of ideas was a new way to create its value in the new customers mind. Attempt to change the perception of the buyers of the creative class. Cannot say it as a digression from the core customer base as

sales gone up by 4.2%.

In 2005: Sales : 45,861 million euro

In 2006: Sales: 47, 767 million euro

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