Bmw

1/12115.249.252.231/casestudies/gurgaon/MKTG137g.asp

IBSGurgaon

Date: 07/08/2012 Time: 19:59:37

MKTG/137

IBS Center for Management Research

License to use IBS Gurgaon for Sem I, class of 2014

BMW’s ‘Company of Ideas’ Campaign: Targeting the ‘Creative Class’

This case was written by Debapratim Purkayastha, under the direction of Rajiv Fernando, IBS Center for Management Research. It was compiled from published sources, and is

intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation.

Ó 2006, IBS Center for Management Research. All rights reserved.

To order copies, call +91-08417-236667/68 or write to IBS Center for Management Research (ICMR), IFHE Campus, Donthanapally , Sankarapally Road, Hyderabad 501 504, Andhra

Pradesh, India or email: [email protected]

www.icmrindia.org

MKTG/137

BMW’s ‘Company of Ideas’ Campaign: Targeting the ‘Creative Class’

“We are eager to unveil this smart and original campaign that communicates BMW’s culture of creativity so thoroughly. BMWhas carved out a unique niche in the industry by placing a premium on constant innovation and inspiration, and this campaignwill reveal the company behind The Ultimate Driving Machine.” [1]


– Jack Pitney, Vice President, Marketing at BMW of North America LLC, in 2006.

“What a load of manure. BMW long lived by the power of the idea of performance driving. Now they’ve decided to jettisonthat history in favor of New Age marketing mumbo-jumbo… They’ve sold their birthright for a bunch of Bangled [2] pottage.A great pity.” [3]

– Professor Stephen Bainbridge, law professor at UCLA,[4] in 2006.

‘FIXING WHAT AIN’T BROKEN’?

In May 2006, BMW of North America LLC (BMW LLC), the North American arm of German automobiles major BMW AG, releaseda new advertising campaign promoting itself as a “company of ideas”. This move took many by surprise. The tone and tenor of the newcampaign were a huge departure from the company’s communications in the past. The series of new ads no longer stressed BMW’sperformance, but strove to project its design prowess and corporate culture that fostered innovation. In doing so, the company said thatthey wanted to take their brand beyond yuppies[5] and attract a wider section of the affluent class.

Many analysts were surprised as 2005 had been a good year for BMW in the US, and companies didn’t usually deviate from a strategyor formula that had proved successful. In 2005, BMW LLC reported record annual sales of 307,020 vehicles (BMW and MINI[6]brands combined) in the US, up 4% over the 296,111 vehicles sold in 2004. The annual sales in 2005, for the BMW brand (BMWautomobiles and BMW SAV[7] combined), was 266,200 units, up 2.4% when compared to 260,079 units in 2004. Tom Purves(Purves), Chairman and CEO of BMW (US) Holding Corp., commented: “This is a strong finish to a year marked with numerousmodel changeovers. We’ve only had full availability of our new award-winning 3 Series sedans[8] in the past two to three months.Given that, and changeovers in the 7 Series[9] and 5 Series,[10] we are especially pleased with the annual increases.”[11]

Despite the good sales performance, Jack Pitney (Pitney), vice president, marketing at BMW LLC felt that almost 75% of luxury carbuyers in the US were not considering BMW as they still strongly associated it with the yuppie phenomenon of the 1980s. Thus, thecompany was banking on this new “company of ideas” ad campaign to redress this situation and expand its market.

Though the ads received rave reviews from various quarters, some analysts felt that BMW was losing its soul by moving away fromthe theme of “driving” and “performance.” According to marketing expert Al Ries (Ries), BMW owned the word “driving” and thishad been etched in the minds of consumers over a period of three decades with the tagline “The Ultimate Driving Machine.” Othersfelt that the ads fell under the heading of “preventive maintenance” as it came at a time when there was no real need for BMW toupset the cart. A few other analysts felt that BMW was losing its soul by trying to be everything to everyone.

BACKGROUND NOTE

BMW Group AG

BMW was founded in 1913, when Karl Friedrich Rapp (Rapp) set up Bayerische Flugzeug-Werke to manufacture aircraft engines inthe Munich district of Germany. In 1916, during World War I, the company entered into a contract to manufacture aircraft engines forthe Austria-Hungarian army. In 1917, to meet the need for additional funds, Rapp gained the support of Camillo Castiglioni and MaxFriz and the company rechristened as Bayerische Motoren Werke GmbH. In the same year, the company ran into difficulties becauseof over-expansion. It was taken over by Franz Josef Pope and in 1918 he named it BMW AG.

In 1918, BMW manufactured its first aircraft engine, the Type IIIa. This engine could power a biplane[12] to reach an altitude of 5000meters in just 29 minutes, creating a world record. After the World War I, the Treaty of Versailles (1919) put a ban on production ofaircraft in Germany. Thus, in 1919, the company started to manufacture railway brakes. In the same year it designed its firstmotorcycle engine. In 1923, it started manufacturing motorcycles and its first model R32, a 500cc shaft-driven motorcycle, waslaunched.

BMW started manufacturing motorcycles in 1923, and the company’s first model the R32 was launched in the same year. It was a500cc shaft-driven cycle designed by Max Friz. BMW forayed into car manufacture in the late 1920s. (Refer to Exhibit I for BMW’sLogo).

In 1928, BMW set up a car manufacturing unit in the Eisenach region of Germany and started manufacturing a small car called ‘Dixi’,based on the Austin Seven car[13] under license. In the following year it acquired the Dixi Company. It was BMW’s first car and wasmarketed under the name BMW 3/15. Over the next decade, BMW launched a number of successful models. Its cars, especially the327 saloon and 328 roadster, were considered very advanced for their time, and the roadster was even nominated as the ‘Car of theCentury’ in 1999 by some auto experts.

With the start of World War II, BMW’s car business took a back seat as it started manufacturing aircraft engines once again. Itsaircraft engines and motorcycles were extensively used by the German army. Toward the end of the war, the company’s plants wereheavily bombed and those on the eastern part of the country were captured by the Soviet Union.

Car production began once again only in 1952. In the 1950s, BMW largely failed in its endeavor to enter the premium segment of cars.Faced with too many obstacles, BMW considered merging with rival Daimler-Benz AG[14] in 1959. However, Kurt Golda, BMW’schairman was not supportive of the idea and managed to convince Herbert Quandt, the majority shareholder, to oppose the move.

This proved to be a sound decision, as BMW’s fortunes turned that same year with the launch of the BMW 700 (700). The 700 was asmall car with an air-cooled, rear-mounted engine. The car’s unique selling proposition was its sporty exterior. Another racing model,based on the 700, won many competitions, and BMW gained a reputation as a manufacturer of sports sedans.

In 1961, with the launch of BMW 1500, the company cemented its position as a maker of trendy sporting cars. The BMW 1500 was apowerful compact sedan, with front disc brakes and four-wheel independent suspension. It was the first BMW to feature the“Hofmeister kink,” an automobile design feature marked by a bend in the piece of metal that separates the rear side windows from therear glass of the car. The “Hofmeister kink” went on to become a trademark feature in all BMW cars. In 1971, BMW moved into itsnew headquarters in Munich. The building’s architecture design reflected the form of the four cylinders of a car engine (Refer toExhibit II for a photograph of the BMW headquarters).

During the 1970s, BMW targeted the export markets. In 1973, the company’s first overseas plant was set up in South Africa. It alsoset up a distribution subsidiary in the US. In the 1980s, BMW increased its exports to the US, Asia, and Australia. In 1981, it alsobecame the first European car maker to set up a subsidiary in Japan. It consolidated its position in Europe by setting up an engine plantin Austria (in 1982), and extending its production network in Bavaria (in 1986).

The 1980s also saw a flare up in the rivalry between BMW and Daimler-Benz AG, as BMW launched a line of luxury cars to competewith Mercedes-Benz (Mercedes). In 1992, BMW outsold Mercedes for the first time in Europe. In the same year, BMW became thefirst European car maker to operate a US plant (after Volkswagen[15] exited in 1988) at Spartanburg in South Carolina.


first European car maker to operate a US plant (after Volkswagen[15] exited in 1988) at Spartanburg in South Carolina.

In 1994, BMW acquired British car manufacturer, MG Rover and gained ownership of the company’s successful brands like the Miniand Land Rover. But BMW found that except for the Mini, Land Rover, Triumph, and Range Rover, most of MG Rover’s brandsclashed with those of BMW. As a result in 2000, BMW sold MG Rover to the Phoenix Consortium, a group of four businessmen, for atoken £10. It also sold the Land Rover and Range Rover brands to the Ford Motor Company[16] (Ford) and retained only the Mini andTriumph brands.

In the early 1990s, BMW entered into a joint venture with Rolls-Royce Motors (Rolls-Royce). In 1998 both BMW and Volkswagenvied with each other to purchase Rolls-Royce. Volkswagen bought Rolls-Royce for £430 million by outbidding BMW, but did not haverights over the Rolls-Royce trademark. BMW acquired the rights to the grille and mascot of Rolls-Royce, and also obtained the licenseto use the Rolls-Royce name and logo after 2003 for £40 million. In January 2003, BMW launched the new model Rolls-RoycePhantom. This high priced model (around US$ 330,000) went on to sell a record 769 units worldwide in 2005.

In the early 2000s, BMW launched new cars in its 1-series[17] and 6-series,[18] which were designed to consolidate the company’sposition in entry level cars, and the large coupe and convertible segment respectively. During the same period, BMW’s new designchief Christopher Bangle (Bangle) brought out cars with more curvy designs, which he called “flame surfacing”. These designs werewidely criticized by BMW traditionalists and the press who referred to these new designs as “Bangled” or “Bangle-ized”. Despite thecriticism, BMW’s sales increased year after year. In the early 2000s, when the company launched a 7-series car that featured separaterear fenders with a “bustle-back” trunk (boot) lid, it was criticized and often derogatively referred to as the “Bangle-butt”. However,since then, this design had been copied by rivals like Lexus and Mercedes.

In 2005, BMW recorded a sales volume of 1,334,426 units in automobiles alone (BMW, MINI and Rolls-Royce brands combined).Revenue in 2005 was €46,656 million and net profit was €424 million (Refer to Exhibit III for BMW’s key figures – 2001-05, Exhibit IVfor segment-wise revenue and Exhibit V for region-wise revenue of 2005). Its main competitors included Acura[19], Alfa Romeo[20],Audi[21], Cadillac[22], Infiniti[23], Jaguar[24], Lexus[25], Mercedes, and Volvo[26].

BMW of North America LLC

BMW LLC, a subsidiary of BMW, was established in the US in 1975. It imported BMW, MINI, and Rolls-Royce cars and motorcyclesto the US and provided marketing, sales, and financial services to BMW and MINI dealerships. As of end 2005, it provided marketing,sales, and financial services for some 340 BMW dealerships, 330 BMW SAV dealerships, 150 BMW motorcycle retailers, and around80 MINI dealerships. It also included BMW manufacturing, industrial-design firm DesignworksUSA, a parts distribution center, and atechnical training center.

BMW Manufacturing Co., LLC in South Carolina is a part of BMW Group’s global manufacturing network and is the exclusivemanufacturing plant for all Z4 Roadster and X5 SAV.

BMW (US) Holding Corp., the BMW Group’s sales headquarters for North, Central and South America, is located in Woodcliff Lake,New Jersey, USA. Its 2004 revenues were £5,526.3 million. In 2005, North America accounted for 24.15% of BMW’s total revenues.BMW LLC’s top three competitors were Audi, Ford and Mercedes.

BMW – THE ULTIMATE DRIVING MACHINE

For long BMW had been associated with the words “driving” and “performance”. The company’s taglines in English were “TheUltimate Driving Machine” and “Sheer Driving Pleasure”. The original German slogan was “Freude am Fahren,” which translated to“Joy in Driving” in English. BMW’s association with “driving” was so strong that Ries believed that BMW became a synonym for“driving” in the mind of the consumer. “What comes to the mind when you think about BMW?” said Ries. “A car that’s fun to drive.The ultimate driving machine. BMW owns the word “driving” in the mind. And, as a result has become the second-largest-sellingEuropean luxury car in America.”[27]

In fact, according to Ries, it was the consistency of the communication and logo over decades that led to the success of BMW. Hesaid, “BMW has been the ultimate driving machine for twenty-five years. What’s even more remarkable is the fact that BMW retainedits strategy even though the brand was driven through three separate advertising agencies. A change in agencies usually signals the endof the brand’s consistency.”[28]

GOING BEYOND THE “YUPPIES”

In 2005, BMW branded automobile sales in the US were 266,200 units when compared to 260,079 units in 2004. In fact, over the lastfive years BMW’s sales in the US had increased by 62%, far more than any competitor. The company’s new products were also wellreceived. However, an inhouse research study, in 2005, revealed that a large percentage (75%) of luxury car buyers in the US did notconsider any BMW vehicle at the time of purchase.

Though BMW was far from trouble, the management realized the need for a change. “We’re entering new product segments all thetime, and we can’t afford to not be on the shopping lists of this many people…People think we have a cool persona as a brand, but saywe lack humanity,”[29] explained Pitney, highlighting the need for BMW to communicate better certain dimensions of the BMW’sbrand story.

The company wanted the US market to be a major driver of growth so that it could realize its ambition of increasing the global sales ofBMW branded vehicles to 1.6 million by 2010. As BMW’s market share in the US was less than 2%, it was being viewed as a majorgrowth area by the company. Purves said, “If we doubled our market share, that’s a huge volume increase for us and that’s what wehave in Europe. We thought that was possible, but we had to think about it in a different way.”[30]

According to the senior management, the situation faced by BMW was a direct result of the company’s overemphasis on “performancedriving” over the last 33 years. They felt that consumers were looking for brands that stood for larger values. A search for a new adagency was on as BMW was not satisfied with the agency Fallon Worldwide[31], which had designed the BMW films series.[32]BMW’s confidential brief to the ad agencies competing for the business, obtained by BusinessWeek,[33] read: “BMW wants to bringthe excitement back to the brand and restore the equilibrium between their products and their marketing communications. Remember,your challenge is not to reinvent the brand but to evolve the marketing from its current one-dimensional focus on performance…”[34]

On November 2005, GSD&M[35] was awarded the BMW advertising contract. The US$160 million budget BMW spends onadvertising every year was considered huge and prestigious for GSD&M. Analysts felt that GSD&M had a tough job on hand asBMW’s sales were already on an upward trend and it was a strong and well-defined brand. They felt that if the brand was in trouble,the ad agency’s work would have been easier as they would have been free to make wholesale changes.


The new ad campaign promoted BMW as a “company of ideas”. It was launched on May 8, 2006, and aimed to showcase thecompany’s design prowess and independence, and to promote BMW as a company full of ideas to the “creative class.”[36] The adcampaign was designed with the objective of building demand for BMW by reaching out to consumers who had not until nowconsidered purchasing a BMW vehicle. At the same time, it wanted to make the existing BMW loyalists proud of the company’ssuccess story.

TARGETING THE “CREATIVE CLASS”

According to the company, the dynamic campaign was aimed at the creative class – consumers who shared many of BMW’sprinciples – an independent spirit, a drive to challenge conventional wisdom, and an appreciation for a brand’s ability to offer bothsubstance and style.

The economic function of this 38 million[37] strong class in the US was to create new ideas, new technology, and new creative content.According to Richard Florida (Florida), a Carnegie-Mellon University professor, the people of this class were distinct from other classesthrough the nature of their work. While people in the other classes were primarily engaged in implementing a plan, the creative classwere primarily engaged in creative functions. They were considered to have more autonomy and flexibility in their work than the otherclasses. They shared common characteristics, such as being driven in work and family by creativity, individuality, diversity, and merit.Florida said, “… all members of the Creative Class – whether they are artists or engineers, musicians or computer scientists, writers orentrepreneurs – share a common creative ethos that values creativity, individuality, difference and merit. For the members of thecreative class, every aspect and every manifestation of creativity – technological, cultural and economic – is interlinked andinseparable.”[38]

According to some, this class of buyers were often referred to as the iPod[39] class because of how Apple Computer Inc.[40]achieved success in the portable music players market by designing a player that appealed to this class even though it cost more thanother music players.

According to GSD&M’s president, Roy Spence (Spence), this class of people lived by the power of ideas, and admired companies andpeople who championed creativity and ideas. Marketing consultant Dennis Keene (Keene) too echoed this view. “There’s an influentialclass of consumers, maybe it’s the creative class, who make buying decisions based in part on how they feel toward a company andwhat it stands for,”[41] he said.

In his book The Rise of the Creative Class, Florida said that this class of people had grown in numbers very fast in the last couple ofdecades and he expected this class to grow further in the next few decades. “… I expect that the creative class, which is stillemergent, will continue to grow in coming decades, as more additional economic functions are transformed into Creative Classoccupations.”[42]

THE “COMPANY OF IDEAS” CAMPAIGN

The ad campaign was unveiled through various media such as newspapers, magazines, television, cable network, outdoor billboards andthe Internet. The campaign tried to communicate BMW’s independence and freedom to pursue innovative ideas, as it was neitherowned by nor part of a division of another company (Refer to Exhibit VI (A) for the “company of ideas” print ads, Exhibit VI (B) forthe “company of ideas” TV ads, and Exhibit VII for a new BMW print ad).

Though BMW still used the tagline “The Ultimate Driving Machine,” the ads placed little emphasis on its high performance features likehorsepower, etc.- a sharp departure from its earlier ads. The new ads projected BMW as a “company of ideas,” where radical ideasand designs were encouraged, so that the company’s products reflected its tagline as “The Ultimate Driving Machine.” Spencecommented: “BMW’s performance is legendary, but how they get there is an important part of the story as well. They get therethrough passion and inspiration – they aren’t hindered by idea-killing bureaucracy.”[43] Lee Newman, senior vice president atGSD&M, who directed the campaign, said, “People know BMW as the ultimate driving machine. We think it would be really valuablefor people to know how it gets to be an ultimate driving machine.”[44]

Analysts felt that the print ads were unconventional and different from regular automotive advertising campaigns. The majority of thenew BMW ads were all-text pieces, featuring simple but bold copy. These ads attacked issues like corporate convention andcompromise. Only one ad featured a photograph of a BMW vehicle. Even this one showed only the rear side of the controversialredesign of the 7 Series sedan which had prompted criticism when it was launched in 2001. The attention-grabbing print ads, with theirbold message, tried to highlight “BMW’s autonomy and commitment to protect great ideas” and concluded with phrases like “to makesure great ideas live on to become Ultimate Driving Machines.”[45]

The television ads also highlighted the same theme as the print ads. The ads on TV tried to project BMW as a company that allowedcreativity to flourish. Purves said, “It should appeal to the idea class that we are independent, that we are free to do something.”[46]The ads also portrayed different kinds of personality types, who created barriers to creativity in a typical organization. All these adsconcluded with a shot of the award-winning BMW plant in Leipzig, Germany, designed by Zaha Hadid[47] (Hadid). The design of the“Central Building” of the plant won Hadid the Pritzker Architecture Prize[48] in 2004. The Leipzig plant highlighted BMW’s philosophyof “Inspiration and Innovation” and highlighted the importance placed by the company on creativity and innovation (Refer to ExhibitVIII for a view of the Leipzig plant).

Analysts also felt that BMW and GSD&M, by placing the ads in lifestyle publications that focused on art and design, travel, luxury, andsports, had deviated from the normal convention. The ads also appeared in magazines such as Architectural Digest, Dwell, GQ, Vogue,Vanity Fair, The Economist, Fortune and Forbes and newspapers such as The New York Times, USA Today and The Wall StreetJournal.[49]

BMW also posted ads on websites that were frequently visited by the “creative class” type of people like www.gawker.com,www.thegothamist.com, and www.flavorpill.com. Analysts felt that a lot of thought had gone into the media buy considering the classof buyers BMW was trying to reach.

BMW also showcased its environmental sensitivity through one ad that hailed one of its models, the 745h hydrogen car, as ready forsale or lease. The ad went on to say that BMW was just waiting for the rest of the world to catch up. Another ad showed that onecould actually drink the water discharge from the 745h. One ad highlighted the eco-friendly practices at its Spartanburg, South Carolina,plant, such as the use of methane, produced in a landfill located nine miles away from the plant, to produce over 50% of the plant’senergy requirements.

In another series of TV ads, BMW creatively portrayed images of Frank Lloyd Wright’s “Fallingwater”[50] house being demolishedwith a wrecking ball[51] and a Jackson Pollock[52] painting thrown in a dumpster. The message of these ads was that BMW was not


like other companies that destroyed creative and radical ideas.

REACTIONS TO THE CAMPAIGN

Analysts were struck by the originality of the ad campaign. Some felt that the campaign would win advertising awards and also helpBMW to exorcise the ghosts of the past (read: its association with the yuppie phenomenon of the 1980s). But there were others whowere disappointed with the ads. They were also annoyed by the veiled competitor bashing in the campaign and felt that it was badadvertising.

Some felt that BMW was insecure and felt threatened by the increase in competition. A car enthusiast commented, “If BMW weren’tso paranoid about the increase in substance and value from the competition, then why do they feel that they have to explainthemselves? BMW claims that they don’t “compromise?” I see the whole ad as a compromise with consumers! Actually, in a way Ialso see this ad as an apology. An apology to all the BMW fans that they alienated years back. I applaud BMW for their attempts butuntil the designs, the engineering, value and the sense of pride is improved upon, BMW will just keep on looking desperate.”[53]

A few analysts opined that it was a good idea to expand the customer base. They argued that since BMW held the second position inthe luxury car segment in the US market and its sales had been on the rise over the past decade, all those people buying it could nothave been only yuppies. With a change in perception, more people would eventually start considering BMW. They felt that as long asBMW did not really change its core philosophy that it builds the ultimate driving machine, it would not lose its existing customer base.According to Keene, BMW had come a long way since the 1980s and had good stories to tell that could change some perceptions. Butothers cautioned that a change in perception would not happen overnight and would require a slow and methodical approach.

Some analysts opined that “preventive maintenance” or otherwise, it was a bad idea to try for BMW to try to expand its customer base.They felt that when a strong niche brand like BMW tries to diversify and expand its core customer base, it may cause confusion amongcustomers. Critics felt that in trying to be everything to everyone, BMW might dilute what its brand stood for. They felt that BMWshould stick to what it was best at – “the ultimate driving machine” and leave the softer aspects to Mercedes, Lexus and Cadillac.BMW, through its new marketing efforts was losing its soul. Marketing experts like Ries had decried the fact that BMW was movingaway from its core brand proposition. Some analysts felt that BMW had taken a big risk by moving away from its core brandproposition and giving in to “new age marketing mumbo jumbo.”

Exhibit I

The BMW Logo

Source: www.bmw.com.

Exhibit II

BMW Headquarters


Source: www.en.wikipedia.org.

Exhibit III

BMW’s Key Financials (2001-05)

2001 2002 2003 2004 2005Growth2005-

2004 (%)

VehicleProduction (Units)

BMW 904,335 930,221 944,072 1,059,978 1,122,308 5.9

MINI 42,395 160,037 174,366 189,492 200,119 5.6

Rolls-Royce – – 502 875 692 -20.9

Motorcycles 90,478 93,010 89,745 93,836 92,012 -1.9

Deliveries toCustomers (Units)

BMW 880,677 913,225 928,151 1,023,583 1,126,768 10.1

MINI 24,980 144,119 176,465 184,357 200,428 8.7

Rolls-Royce – – 300 792 796 0.5

Motorcycles 84,713 92,599 92,962 92,266 97,474 5.6

Workforce at endof year

97,275 101,395 104,342 105,972 105,798 -0.2

(All financial figuresare in Euros million)

Revenues 38,463 42,411 41,525 44,335 46,656 5.2

Capital expenditure 3,516 4,042 4,245 4,347 3,993 -8.1

Depreciation andamortization

2,159 2,143 2,370 2,672 3,025 13.2

Cash flow 4,202 4,374 4,490 5,187 5,602 8

Operating cash flow 4,304 4,553 4,970 6,157 6,184 0.4

Profit before tax 3,242 3,297 3,205 3,583 3,287 -8.3

Net profit 1,866 2,020 1,947 2,242 2,239 -0.1


Source: BMW Group AG Annual Report, 2005.

Exhibit IV

Product Segmentwise Revenue of BMW Group – 2005

Adapted from “Financial Statements of BMW AG Financial Year 2005,” www.bmwgroup.com.

Exhibit V

Regionwise Revenue of BMW Group – 2005 (in %)

Adapted from “Financial Statements of BMW AG Financial Year 2005,” www.bmwgroup.com.

Exhibit VI (A)

The “Company of Ideas” Print Ads

NO: A simple bold print ad with the word “No” in large type confidently asserted that BMWhad the ability to say “no” to compromise while saying “yes” to innovative ideas. This “all text”ad explained that BMW would do a thousand little things that separated it from all other carcompanies. By maintaining its independence and ability to say “no”, BMW could make suregreat ideas lived on to become Ultimate Driving Machines.

MATCH: Another print ad that featured only text, challenged readers to pair luxury car brandswith their respective parent companies. The accompanying text explained that not many carcompanies could say they are beholden to none. As an independent company, BMW had thefreedom to build cars the way it wanted to build them. The company could take risks that theircompetitors might not be able to justify to their parent companies.

AIRBAGS: This print ad featured a BMW vehicle and reiterated that ideas were valued at


BMW. The ad featured a BMW vehicle and the tagline, “Ideas don’t have airbags to protectthem.” The accompanying text explained that ideas were highly vulnerable creatures and mustbe nurtured and protected.

RISKY: A print ad prominently featuring a BMW 7 Series vehicle with the tag line “Not takingrisks is risky” sent a strong message that only companies as open to taking risks as BMW coulddeliver on the promise of the Ultimate Driving Machine. For example, the redesign of the 7Series in 2002 sparked debate when it was first unveiled. The text of this ad stressed the luxuryof autonomy but pointed out that with freedom comes an obligation to never rest on one’s laurelsand to trust one’s instincts while entering unchartered territory and striving to set benchmarks asBMW did with the redesign of the 7 Series. This ad reminded the audience of BMW’s leading-edge vehicle design.

Source: www.bmwcca.org.

Exhibit VI (B)

The “Company of Ideas” TV Ads

OVERTHINKERS: The viewer saw images of stuffy corporate types accompanied by avoiceover cautioning them to be wary of over-analyzers who don’t see an idea’s true potential.A shot of the Leipzig plant was seen with a voiceover explaining, “At BMW, ideas areeverything.” The camera followed the high-tech environment and continued, “We make suregreat ideas live on to become Ultimate Driving Machines.”

EUPHEMISMS: The ad opened on portraits of typical corporate people looking directly intothe camera with a voiceover asking the viewers to beware of those who speak ineuphemisms.[54] The voice gave examples including, “You’ve presented some very challengingideas.” It then offered a translation of, “I am scared of your thinking.” Another example, “Keepthat idea in your back pocket” and its translation, “Your idea is about to die a slow death.” Thecamera again cuts to the celebrated BMW plant in Leipzig and ends with the campaign tagline,“We make sure great ideas live on to become Ultimate Driving Machines.”

BENEDICT ARNOLD: This spot opened up with a voiceover asking the audience to bewareof the “Benedict Arnolds” who originally support an idea, but then turn on it the second the ideameets any resistance. The ad then cuts to the BMW plant at Leipzig ending with the tagline, “AtBMW ideas are everything, and as an independent company, we make sure great ideas live onto become Ultimate Driving Machines.”

ENEMY OF IDEAS: The spot opened up on corporate businesspeople looking into the cameraand a voiceover saying they were the enemy of ideas. They say things like, “Let me play thedevil’s advocate,” or ‘With all due respect, but …” and then it cuts to the BMW plant in Leipzigwith the tagline “At BMW ideas are everything and as an independent company, we make suregreat ideas live on to become Ultimate Driving Machines.”

Source: www.bmwcca.org.

Exhibit VII

A New BMW Print Ad (2006)


From a two page BMW ad spread in Automobile Magazine:

“The ability to say no to compromise is a rare thing these days. Many companies would like tobe able to say it, but so few have the autonomy to actually do it. As an independent company,BMW can say no. No, we will not compromise our ideas. No, we will not do it the wayeveryone else does it. No, we will not factor designs down to the lowest common denominator.No, we will not sell out to a parent company who will meddle in our affairs and ask us to subjectour cars to mass market vanilla-ism.

“Because we can say no to compromise we can say yes to other things – such as building ourvehicles with 50/50 weight distribution for superior handling and control, despite the fact that itcosts more to build them that way. It’s thousands of little things like this that separate BMWfrom other car companies. By maintaining our autonomy and ability to say no, we can make suregreat ideas live on to become ultimate driving machines.”

Sources: www.autospies.com, www.aiada.org.

Exhibit VIII

A View of the Leipzig Plant

Source: www.bmwworld.com.

Additional Readings and References:

1. Al Ries and Laura Ries, “The 22 Immutable Laws of Branding,” 2000.

2. Richard Florida, “The Rise of the Creative Class,” Basic Books, 2002.

3. Mukund and Neela Radhika, “BMW: Going on the Offensive,” www.icmrindia.org, 2003.


4. Mukund and Neela Radhika, “BMW’s Innovation Strategies,” www.icmrindia.org, 2003.

5. Mukund and Neela Radhika, “Innovation at BMW,” www.icmrindia.org, 2003.

6. “Brief, the Impossible Brief – An Open Letter to BMW,” www.jaffejuice.com, August 11, 2005.

7. “BMW Films No More,” www.jaffejuice.com, September 30, 2005.

8. David Kiley, “BMW Chooses Texas-based GSD&M as its New Ad Agency,” www.businessweek.com, November 14,2005.

9. Sanjib Dutta and Shirisha Regani, “Mass Customization – The BMW Way,” www.icmrindia.org, 2005.

10. “BMW Sets All Time Annual Sales Record in 2005,” www.internetautoguide.com, January 4, 2006.

11. Jeremy Mullman, “GSD&M, Publicis Win BMW Dealers’ Creative Ad Account,” www.adage.com, April 7, 2006.

12. David Kiley, “BMW Targets New Drivers,” www.businessweek.com, May 5, 2006.

13. Richard Williamson, “BMW Targets ‘Creative Class’” www.adweek.com, May 5, 2006.

14. “BMW Losing its Soul,” www.professorbainbridge.com, May 8, 2006.

15. “BMW Unveils New Advertising Campaign,” www.bmwusa.com, May 8, 2006.

16. “BMW Unveils New Ad Campaign,” www.strategiy.com, May 9, 2006.

17. Jenny Munro, “BMW’s New Ad Campaign Features Upstate Plant,” www.greenvilleonline.com, May 9, 2006.

18. Claudia Grisales, “GSD&M Takes Different Road with New BMW Ads,” www.statesman.com, May 09, 2006.

19. “BMW’s New Ad Campaign Brilliant? Should GM be listening?” www.autospies.com, May 10, 2006.

20. “BMW Targets ‘Creative Class’,” www.designtaxi.com, May 10, 2006.

21. Jim Burt, “BMW Goes for Kindler and Gentler,” www.thecarconnection.com, May 15, 2006.

22. “BMW Gives Yuppies the Heave-Ho,” www.gminsidenews.com, May, 2006.

23. Neal E Boudette and Gina Chon, “Brawny BMW Seeks ‘the Idea Class’,” www.moneyweb.co.za, August 2, 2006.

24. BMW Group AG “Annual Report, 2005,” www.bmw.com, 2006.

25. “Financial Statements of BMW AG - Financial Year 2005,” www.bmwgroup.com.

26. www.answers.com.

27. www.autospies.com.

28. www.bmw.com.

29. www.bmwcca.org.

30. www.bmwgroupna.com.

31. www.bmwmotorradusa.com.

32. www.bmwusa.com.

33. www.bmwworld.com.

34. www.en.wikipedia.org.

[1] “BMW Unveils New Ad Campaign,” www.strategiy.com, May 9, 2006.

[2] In the 2000s, BMW made some changes in the design of its vehicles under their new design chief Christopher Bangle (Bangle).The new designs were referred to (often derogatively) as “Bangled” after the name of Bangle, by the press and BMW traditionalists.

[3] “BMW Losing its Soul,” www.professorbainbridge.com, May 8, 2006.

[4] The University of California, Los Angeles, popularly known as UCLA, is a public, co-educational university located in the city ofLos Angeles, USA.

[5] Yuppie, short for “Young Urban Professional,” describes a demographic of people primarily comprising of the children orgrandchildren of the baby boomer generation (people born between 1945 and 1964). In general the yuppies are highly-educated andupwardly-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. Although the originalyuppies were “young,” the term now applies as well to people in middle age.

[6] MINI is car produced by a subsidiary of BMW.

[7] SAV is the acronym for Sports Activity Vehicles. BMW calls its sport utility vehicle (SUV) as SAV. A SUV, is a type ofpassenger vehicle which combines the load-hauling and versatility of a pickup truck with the passenger-carrying space of a van.

[8] A sedan car is one of the most common body styles of the modern automobile. At its most basic, the sedan is a passenger car witha separate hood covering the engine in the front, and a separate trunk for luggage at the rear. The BMW 3 Series is a line of compact


luxury cars manufactured by BMW since May 1975. Luxury cars are vehicles that lay more emphasis on comfort, appearance, andamenities than on performance, economy, or utility. They usually offer cutting-edge technology, higher quality materials, and are oftenbuilt in smaller numbers than more affordable mass-market vehicles. As of December 2006, to qualify as a luxury car, the Mean SellingPrice of the car had to be in excess of around US$ 36,000.

[9] The 7 Series is BMW’s flagship car. It is a luxury sedan.

[10] The 5 Series is a series of midsize luxury automobiles manufactured by BMW. They are available as sedans and station wagons (acar body style similar to a sedan, but with an extended rear cargo area).

[11] “BMW Sets All Time Annual Sales Record in 2005,” www.internetautoguide.com, January 4, 2006.

[12] A biplane is a fixed-wing aircraft with two main wings of similar spans, normally one mounted above, and the other level with theunderside of the fuselage.

[13] Austin Seven was a British car named after Sir Herbert Austin, its designer. The Austin Car Works were located at Longbridge inEngland. The plant at Eisenach was producing the cars under license from the British company.

[14] Daimler-Benz AG was a renowned manufacturer of automobiles and motor vehicles in Germany. The company’s automobileswere marketed under the Mercedes-Benz brand. In 1998, Daimler-Benz AG merged with Chrysler Corporation, a US automobilemanufacturer, to become Daimler-Chrysler AG.

[15] Volkswagen, based in Wolfsburg, Germany, is an automobile manufacturer that forms the core of Volkswagen Group, one of theworld’s four largest car producers.

[16] The Ford Motor Company (usually called Ford), is an US multinational corporation that manufactures automobiles.

[17] The 1-Series is a range of compact automobiles, the only vehicle in its class featuring rear-wheel drive and an engine orientedlengthwise. It was launched in 2004.

[18] The 6-Series comprise of two distinct lines of coupes. The first was the E24, launched in August 1976. In the case, 6-series refersto the second line of the entirely new E63, launched in 2003.

[19] Acura is a brand name of luxury automobiles that is part of the Japanese automobile manufacturer, Honda Motor Co., Ltd.

[20] The Alfa Romeo is a brand of luxury automobiles, manufactured by Alfa Romeo, an Italian automobile company. It has been apart of Fiat SpA since 1986.

[21] Audi is a brand of luxury automobiles manufactured by Audi, a German automobile maker with headquarters in Ingolstadt,Bavaria. It is a wholly-owned subsidiary of the Volkswagen Group.

[22] Cadillac is a brand of luxury automobiles that is part of the General Motors corporation. It is produced and mostly sold in the USand Canada.

[23] Infiniti is Nissan’s luxury brand in the US, Canadian, Mexican, Middle Eastern, South Korean, and Taiwanese markets.

[24] Jaguar is a British luxury car brand, owned by the Ford Motor Company.

[25] Lexus is a brand name of a luxury automobile manufactured by the Toyota Motor Corporation. Toyota Motor Corporation ,is aJapanese multinational corporation that manufactures automobiles, trucks, and buses.

[26] Volvo Cars is a premium automobile manufacturer that was previously owned by AB Volvo, the Swedish commercial vehiclesmanufacturer. Volvo Cars was sold to the Ford Motor Company in 1999.

[27] Al Ries and Laura Ries, “The 22 Immutable Laws of Branding,” 2000.

[28] Al Ries and Laura Ries, “The 22 Immutable Laws of Branding,” 2000.

[29] David Kiley, “BMW Targets New Drivers,” www.businessweek.com, May 5, 2006.

[30] Neal E Boudette and Gina Chon, “Brawny BMW Seeks ‘the Idea Class’,” www.moneyweb.co.za, August 2, 2006.

[31] Fallon Worldwide is an international advertising agency headquartered in Minneapolis. Fallon operates a micro-network withoffices in: London, Singapore, Hong Kong, São Paulo and Tokyo.

[32] The BMW film series The Hire began as a series of five short films (each about eight minutes long) produced for the Internet insummer 2001. The films were directed by popular and aspiring directors. All films starred Clive Owen as “The Driver”. Each film’sstory highlighted the performance aspects of various BMW automobiles. Between 2001 and 2005, eight films were created.

[33] BusinessWeek is a popular business magazine considered to be the standard both in industry and among students. It is published byMcGraw-Hill.

[34] David Kiley, “BMW Chooses Texas-based GSD&M as its New Ad Agency,” www.businessweek.com, November 14, 2005.

[35] GSD&M is an advertising agency located in Austin, Texas, USA. It was founded in 1971 but since 1998, GSD&M has been partof the Omnicom Group. It had done work for Land Rover, but was better known for ads created for Southwest Airlines, Wal-Mart,Krispy Kreme, and the AARP. Agency founder and president Spence had also advised Bill Clinton, and Hillary Clinton, on politicalmarketing strategy.

[36] The creative class included scientists, engineers, architects, educators, writers, artists, and entertainers. The creative class was anidea proposed by marketing expert, Richard Florida, a Carnegie-Mellon University professor, who had written three books on thesubject.

[37] Richard Florida, “The Rise of the Creative Class,” Basic Books, 2002.



[39] The iPod is a brand of portable media players designed and marketed by Apple Computer. Devices in the iPod family provide asimple user interface designed around a central scroll wheel (with the exception of the iPod shuffle). The standard iPod model storesmedia on a built-in hard drive, while the smaller iPod shuffle and iPod nano use flash memory.(Source:http://en.wikipedia.org/wiki/IPod)

[40] Apple Computer, Inc., headquartered in Cupertino, California, part of Silicon Valley, is a well-known manufacturer of innovative,attractively-designed computer hardware, software, and portable media players like the Apple Macintosh, Mac OS X, and iPod.

[41] David Kiley, “BMW Targets New Drivers,” www.businessweek.com, May 5, 2006.


[43] “BMW Unveils New Ad Campaign,” www.strategiy.com, May 9, 2006.

[44] Claudia Grisales, “GSD&M Takes Different Road with New BMW Ads,” www.statesman.com, May 09, 2006.

[45] “BMW Unveils New Ad Campaign,” www.theautochannel.com, May 8, 2006.

[46] Neal E Boudette and Gina Chon, “Brawny BMW Seeks ‘the Idea Class’,” www.moneyweb.co.za, August 2, 2006.

[47] Zaha Hadid is a celebrated British architect and winner of many international awards.

[48] The Pritzker Architecture Prize is awarded annually by the Hyatt Foundation to honor a living architect. Created in 1979 by JayA. Pritzker and run by the Pritzker family, it is considered the world’s premier architecture prize.

[49] “BMW Unveils New Ad Campaign,” www.theautochannel.com, May 8, 2006.

[50] Fallingwater (1936–39), considered by many as an architectural delight, is a house built over a waterfall and completely integratedwith its environment. Seen from below, the house is boldly cantilevered over a waterfall, with its balconies and terraces seeminglysuspended in midair. It was designed by Frank Lloyd Wright, an American architect, in 1935.

[51] A wrecking ball is a heavy steel ball, usually hung from a crane, that is used for demolishing large buildings.

[52] Paul Jackson Pollock (January 28, 1912 – August 11, 1956) was an influential American artist and a major force in the AbstractExpressionism movement. His work had a great influence on 20th century art.

[53] “BMW's New Ad Campaign Brilliant? Should GM be Listening?” www.autospies.com, May 10, 2006.

[54] A euphemism (also called as doublespeak) is an expression intended by the speaker to be less offensive, disturbing, or troubling tothe listener than the word or phrase it replaces. They are often used to hide unpleasant or disturbing ideas, even when the literal termfor them is not necessarily offensive. For example the euphemism for providing false information in a job application could be ‘resumeenhancement’.

Exit

Bmw

Documents

Transcript of Bmw