Automobile Industry Is Highly Competitive BMW Had essay

Download this essay in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from essay:

automobile industry is highly competitive. BMW had temporary set-backs caused by competition from Lexus, Acura and Infiniti in the late 1980s, but rebounded to claim a significant position in the luxury/performance segment. BMW expects its new Z3 Roadster to engage in competition with other luxury car import manufacturers such as Porsche and Mercedes. The automotive industry is mature and market share is critical to survival. Consumers are less brand-loyal than in the past, and every market segment has an increasing number of choices. To increase sales and gain ground in the market share battle, companies must improve their ability both to acquire first-time customers and to develop customer loyalty to their current brands.

Prior to Phase I marketing efforts for the Z3 Roadster, BMW was a very traditional company.

It advertised through traditional media, mostly print and television, and in traditional ways. BMW was thought of as being a serious and tradition-bound company with customer perceptions that BMW meant German manufacturing with resulting quality engineering and driving performance. BMW cars were branded as "Ultimate Driving Machines."

The Z3 Roadster required a major revamping of BMW's marketing efforts and Phase I was undertaken to make several changes. First, traditional marketing would not be sufficient for the new vehicle because the Z3's target market was defined in psychographic terms rather than in demographic terms. Non-traditional media would be more cost efficient for the psychographic segmentation and would deliver a broader audience. The Z3 was marketed as a fun and stylish vehicle while preserving the BMW driving performance reputation. And, Phase I replaced "Made in Germany" with "Made by BMW" to reflect that the Z3 was manufactured in Spartanburg, South Carolina.

Statement of the Problem

While Phase I was a great success for BMW, the company needs to more fully assess some of the shortcomings of this initiative. And, because Phase I ended well before the actual launch of the new Z3 Roadster, a Phase II marketing strategy needs to be defined that will begin in January 1996. This new phase should compliment and extend the success of Phase I as well as incorporate lessons learned.

Phase I has adequately assessed the need for both traditional and non-traditional elements with a 40/60 split, respectively, between the two. This case study has down played demographic segmentation because of the different psychographic characteristics of its expected buyers that fall across multiple demographic segments. However, it appears that demographic considerations need to be considered more strongly in the selection of traditional advertising vehicles. For example, all traditional television and print advertising is currently on a national basis, but it's likely that there are certain local markets, namely large cities, make good advertising targets through the use of local newspapers. Also, there's a noticeable lack of focus on Generation Xers in the traditional advertising efforts. Although this group is tough to reach through traditional advertising, there are traditional vehicles that reach out to this group.

The non-traditional elements of Phase I also present several ongoing issues for BMW as well. Throughout many promotions, BMW had lost control of its brand. Although nothing bad came of it, this was a very risky strategy and BMW can consider itself lucky. For example, in the James Bond Promotion, BMW did not even have a guarantee that the Z3 Roadster would even be shown in the movie. And, in the Radio DJ Program as well as the Tonight Show with Jay Leno, BMW did not have ability to direct the context or usage of its car.

While the goal of Phase I was to reach a broad range of consumers, many aspects of the marketing campaigns were limiting. The Neiman Marcus Christmas Catalog targeted only Neiman Marcus customers and the New York Central Park press launch reached New York City residents. The "Go: An American Road Story" Video required interested parties to call in to receive the video rather than BMW proactively sending the video out to a target audience.

The BMW Internet site was innovative for its time and recognized the growing importance of the Web as an importance advertising channel. Hindsight tells out that eighty-five percent of BMW purchasers would use the Internet before purchasing a BMW by the year 2000. But, the BMW Internet site represents one of only many possibilities for gaining mind share through the Internet.

BMW has done an amazing job of creating "word-of-mouth" marketing buzz through traditional and non-traditional advertising. But, Phase I was not a complete integrated marketing communications plan that synthesized the strategic roles of a variety of communications disciplines including advertising, direct marketing, sales promotion, and public relations to provide maximum communication impact.

Part of the reason was because Phase I occurred well in advance or product availability. But, Phase II will need to focus on rounding out Phase I's advertising and public relations with more concrete promotional strategies at dealerships. This means more than marketing buzz, it means making potential buyers act on their interest by providing motivations to purchase.


Plan A is the preferred recommendation, followed by Plan B. And then Plan C. These recommendations differ in their views on the use of traditional and non-traditional advertising.

Plan A BMW will need to determine the best media schedule for Phase II. The options are to either choose to do continuous advertising to schedule ad exposures evenly over all week or to follow a strategy of pulsing. Research shows that continuous advertising is optimal for nearly all situations and this is the recommendation for BMW in this plan as well as alternative Plan B. And Plan C.

Plan A maintains the existing 40/60 split between traditional and non-traditional elements. This strategy assumes that BMW has determined the correct advertising mix as indicated by the success of Phase I. But, it adds more demographic segmentation considerations to the traditional elements than those in Phase I. Specifically, it recommends more local targeting in local newspapers and events as well as a stronger focus on print media and television shows that attract the Generation Xers. Plan A calls for event sponsorship to be a large part of non-traditional marketing efforts, but this time with more attention to brand control. It's encouraged that the Z3 Roadster be included in BMW's sponsorship of the Atlanta Summer Games. BMW should also try to obtain endorsements from American athletes participating in the events. While, individual endorsements can be risky if the individual becomes engaged in some dubious behavior (recall the Madonna fiasco), world-class athletes present lower risks than other types of celebrities. Also, the original suggestion by BMW executives for a fashion world tie-in needs to be revisited to give the large base of female consumers more attention.

Plan A also strives to make Phase II more of an integrated marketing communications plan. Some suggestions include the use of the "Go: An American Road Story" in direct marketing campaigns, the update of the BMW Internet site to do more to turn online interest into actual dealership visits, promotional strategies at dealerships, and exploring the Web for affiliate marketing opportunities. The introductory Press Launch in Central Park needs to be followed up with general availability announcements and needs to continue to reinforce the success of the Z3 Roadster into the American market.

Plan B

Plan B. calls for a 60/40 split for traditional and non-traditional advertising elements. The philosophy behind this recommendation is that "marketing buzz" will need to be followed by more concrete demographic targeting to be effective. Under this proposal, more segmentation would be performed in both traditional and non-traditional advertising. It is consistent with the traditional recommendations made in Plan A with more local targeting, but would call for an even bigger focus on Generation Xers and late Baby Boomers as well as males and females. And, event sponsorship stays, but with…[continue]

Cite This Essay:

"Automobile Industry Is Highly Competitive BMW Had" (2003, May 25) Retrieved December 10, 2016, from

"Automobile Industry Is Highly Competitive BMW Had" 25 May 2003. Web.10 December. 2016. <>

"Automobile Industry Is Highly Competitive BMW Had", 25 May 2003, Accessed.10 December. 2016,

Other Documents Pertaining To This Topic

  • Influence of 2007 Economic Crisis on American Car Market

    2007 Economic Crisis on American Car market Effect of the 2008 global economic crisis on automotive industries Crisis in the United States Crisis in Canada Crisis in Russia Crisis in European markets Crisis in Asian markets Effects by other related crisis events In this paper, we will review the effects of 2008 global automotive crisis. Our main focus will be on the American car manufacturers and the negative impact they suffered due to the crisis. We will

  • Automotive Industry Assessing the Social

    While the political climate is not nearly as turbulent and disruptive as the auto industry, the fact remains that this industry that thrives on disposable income and the availability of easy credit, both of which are constrained by current economic conditions. Opportunity and Threat Analysis The greatest opportunity for the industry today is in creating more energy-efficient, highly customizable cars that also meet the needs of car buyers who want eco-friendly

  • International Business Competitive Strategy Is the Bedrock

    International Business Competitive strategy is the bedrock on which companies base business decisions to reach their targets and achieve profitability. Formulating and implementing strategies in international business is much more complicated and difficult task than doing so in home or familiar markets. Competitive strategy deals with the development of abilities by a firm to keep ahead of competitors in the fields in which it operates. Firms develop competitive edge in global

  • Microeconomics on the Automotive Industry a Study

    Microeconomics on the Automotive Industry A Study of Elasticity and Demand Generation Global and national economic cycles have a direct effect on demand for the majority of durable goods consumers purchase, with the automotive industry being the most influenced by the cost of capital, interest rates, and elasticity of demand that varies by type of auto and market segment. The intent of this analysis is to evaluate how pricing strategies can be

  • Values and the Automobile Market in the

    Values and the Automobile Market In the last decade, the luxury car segment became one of the most competitive in the automobile market. Many American consumers who purchase luxury cars prefer imports from Germany and Japan. A marketing vice president with General Motors once commented, "Import-committed buyers have been frustrating to us." This type of thinking has led industry analysts to argue that to successfully compete in the luxury car segment, U,

  • Human Resources Management Maintaining a Competitive

    Human Resources Management - Maintaining a Competitive Edge in the Corporate Marketplace Change continues to reshape the workplace. Today's HR professional is called upon to help the organization retain its competitive edge in the marketplace. Along with representing the best interests of employees, HR professionals assume the role of strategic partner, administrative expert, and change agent. HR assumes a critical role in promoting the vision and shaping the focus of the

  • International Strategy the Five Generic

    For example, Southwest reduced it turnaround times, and this allowed it to have more flights in a day Arthur a. Thompson, 2010() , which consumers had the opportunity to choose from instead of the larger airlines. Serving short distance and budget fare, the airlines were able to do away with some luxuries which consumers were not interested in like first-class, seat numbering, in-flight meals, and baggage transfers. The budget airlines

Read Full Essay
Copyright 2016 . All Rights Reserved