Harry Plopper

BUSINESS WEEK

MAY 5, 2006

Autos
By David Kiley


BMW Targets New Drivers

A new ad campaign from the carmaker de-emphasizes the brand's performance to attract a wider, affluent audience


It's hard to believe, but after all these years there are still a great many consumers, specifically luxury-car buyers, who associate BMW with the yuppie phenomenon of the 1980s. That's what BMW Vice-President of Marketing Jack Pitney was distressed to find when he took over the brand last year after a successful run managing MINI USA. BMW's research shows that despite record sales in the U.S. last year, a shocking 75% of luxury buyers aren't even considering a Bimmer.

The problem, say BMW brass, is that for too long it has perhaps overemphasized the brand as the paragon of performance driving. BMW, indelibly etched in performance-car enthusiasts' psyches as "The Ultimate Driving Machine" in ads for 33 years, is showing a different plume of feathers in a new ad campaign, the first from its new U.S. ad agency GSD&M of Austin, Tex. Rather than horsepower and curve-hugging handling, it's ballyhooing its design prowess and financial independence.

In one ad, for example, it asserts that BMW's designers and engineers answer only to BMW, while cheekily reminding readers that Volvo and Jaguar are owned by Ford (F ), that Audi is but a unit of Volkswagen (the People's Car), and that its nemesis, Mercedes-Benz, is all merged up with -- gasp! -- Chrysler.

COOL BUT INHUMAN? In another ad, it brazenly spotlights the rear end of its 7 Series flagship sedan, the very design element that was lampooned by journalists in 2001 when the car debuted. But since then, Toyota (TM ) and even Mercedes have copied the so-called bustle-like "Bangle Butt," named for BMW chief designer Chris Bangle. The headline: "Not taking risks is risky." With pitches like these, the Bavarian carmaker hopes to curry favor with the "creative class" in America that, the theory goes, values independent thinking and design and the kind of risk taking that watered-down, conglomerated companies can't afford.

Pitney says the brand's problem, if it has one, isn't showing up in sales yet, but that the challenge is obvious. "We're entering new product segments all the time, and we can't afford to not be on the shopping lists of this many people," he says. About the new direction of the campaign, Pitney says the company isn't initiating a makeover. But there are dimensions of BMW's brand story that clearly need to be communicated better, he says. "People think we have a cool persona as a brand, but say we lack humanity," says Pitney. Call the campaign preventive maintenance, then, because BMW's 266,000 in sales last year was an all-time record.

The targeting of the creative class is an idea inspired by Richard Florida, a Carnegie-Mellon University professor who has written three books on this "class" of people, who include scientists, engineers, architects, educators, writers, artists, and entertainers. Their economic function is to create new ideas, new technology, and new creative content. Members of this group, which is about 38 million strong, share common characteristics, such as being driven in work and family by creativity, individuality, diversity, and merit.

THE NEED TO BE LIKED. "More than anything, they live by the power of ideas, and admire companies and people who champion creativity and ideas," says GSD&M president Roy Spence. Ironically, according to a ranking of U.S. cities by Florida, who consulted on the new BMW campaign, Austin is the No. 1 market for the creative class.

The tone in some of the ads reminds me of the dynamic played out in the hit British TV series The Office, in which the office manager is depicted comically as a man obsessed with being loved and not rocking the corporate boat. Corporations, say image and marketing consultants, are driven more these days than in past years by the desire to be liked by customers as well as employees.

"There's an influential class of consumers, maybe it's the creative class, who make buying decisions based in part on how they feel toward a company and what it stands for," says Dennis Keene, an independent consultant who advises companies on marketing strategy. BMW, says Keene, has come a long way since the 1980s, "and has good stories to tell that could legitimately change some perceptions."

IDEAS ON A PEDESTAL. Unusual for BMW, several print and TV ads show and discuss BMW's Leipzig, Germany, plant, which was designed by world-renowned architect Zaha Hadid. The factory is a design statement that includes a workspace for white-collar employees, whose desks sit below an almost silent assembly line carrying BMW bodies to another assembly line for completion. "A parent company would never let us build this," reads the ad.

Some TV spots depict stereotypical corporate-cog executives who squelch creativity and initiative. "Beware of the compromisers. They say things like, 'Choose your battles,' or 'Is this idea really worth falling on your sword for?' " Later, the recurring message throughout the campaign comes in, "At BMW, ideas are everything."

In another TV spot, a wrecking ball slams into Frank Lloyd Wright's "Falling Water" house, and a Jackson Pollock painting sits in the dumpster, contrasting BMW to companies that don't value maverick artists and designers.

It's easy to take a strategy like this and execute it badly. I point you to the current stilted Ford Motor ad campaign that dryly and without any wit trumpets Ford as a company driven by innovation. Running a bunch of TV and print ads telling people that you're innovative just doesn't sound very, well, innovative.

GREEN MACHINE. What I like about this BMW campaign is that the messaging is, in fact, creative and well designed. BMW has long been a company of innovators and creative designers. But it's a side of the business that has never been touted in its communication in any meaningful way. The Internet media buy for the new effort includes automotive-enthusiast and news Web sites BMW has frequented before, but the new BMW ads are also hitting sites like - ONLY REGISTERED AND ACTIVATED USERS CAN SEE ALL LINKS - CLICK HERE TO REGISTER, - ONLY REGISTERED AND ACTIVATED USERS CAN SEE ALL LINKS - CLICK HERE TO REGISTER, - ONLY REGISTERED AND ACTIVATED USERS CAN SEE ALL LINKS - CLICK HERE TO REGISTER, - ONLY REGISTERED AND ACTIVATED USERS CAN SEE ALL LINKS - CLICK HERE TO REGISTER, - ONLY REGISTERED AND ACTIVATED USERS CAN SEE ALL LINKS - CLICK HERE TO REGISTER, and - ONLY REGISTERED AND ACTIVATED USERS CAN SEE ALL LINKS - CLICK HERE TO REGISTER -- sites where the company feels it can reach the creative-class cognoscenti.

I also like a couple of ads that speak to BMW's environmental practices, which in today's business culture is closely aligned with innovation and creativity. The headline in one ad reads, "According to our engineers, tailpipe water can be quite delicious." This ad points to the 745h, a version of BMW's flagship 7-Series sedan that runs on liquid hydrogen and puts out zero emissions, just water from the tailpipe. The car, the ad, says, is ready to be produced right now. "We're just waiting on the world to catch up," in terms of having stations that supply liquid hydrogen. Another ad spotlights the fact that more than 50% of the energy used at its South Carolina plant is derived from methane piped from a landfill nine miles away.

This campaign will run through the summer, and will preface launches of the BMW 3-Series coupe and the redesign of the X5 SUV. The carmaker is entering new segments, too. In another two years or so, the 1 Series now on sale in Europe is expected to be in the U.S., and the company has acknowledged it's working on a vehicle that's neither SUV nor minivan but encompasses attributes of both with very flexible storage and seating options. As the company stretches what the BMW brand stands for, it's right to try and bring more of its natural target audience under the tent.

GETTING OUT THE VOTE. GSD&M is one of the better ad agencies in the country. It has done work for Land Rover, but is better known for ads created for Southwest Airlines (LUV ), Wal-Mart (WMT ), Krispy Kreme (KKD ), and the AARP. Agency founder and President Spence has also advised Bill Clinton, and now Hillary Clinton, on political marketing strategy.

In the end, consumers decide which brands they bring into their lives, especially big-ticket items like luxury cars, in similar fashion to the way they vote. Perhaps we should call this campaign "The Kinder, Gentler BMW."



Source: - ONLY REGISTERED AND ACTIVATED USERS CAN SEE ALL LINKS - CLICK HERE TO REGISTER


Official BMW press release about the campaign HERE

Curb Zone

 

YoungWarrior

Audi is going to vertake BMW in the next 15 Years, especially if they stop concentrating on being the ultimate driving experience.

Beemer B773ER

OK. Whatever helps you sleep at night.
This article's solely focused on the US market, and incase you missed the thread titled "US sales April 2006: Audi, BMW, MB, Porsche, VW", i'll quickly summarise BMW compared to Audi for you.
BMW sales: April: 25,250 +19.8% .... Year-To-Date: 88,353 +15.6%
Audi sales: April: 7,412 +2.9% .... Year-To-Date: 25,296 +5.2%
So to summarise that for you, BMW sold more cars in that one month of April than Audi has in the past year. So, 15 years till Audi takes over BMW? ... well, as I said, if it helps you sleep at night.

-
OK, I'm done there, back to the article now.

This is a perfect example of a company which does not believe in standing still. The automotive industry is continually changing. Most people get fooled into thinking that its not a dynamically changing industry as vehicle life-cycles last about 5-8 years, but as you can see here, eventhough BMW's on top globally in this segment, they are still reassessing themselves to find gaps, ..and this 'creative class' in one such gap.


In one ad, for example, it asserts that BMW's designers and engineers answer only to BMW, while cheekily reminding readers that Volvo and Jaguar are owned by Ford (F ), that Audi is but a unit of Volkswagen (the People's Car), and that its nemesis, Mercedes-Benz, is all merged up with -- gasp! -- Chrysler.

Good on BMW for emphasising their innovative spirit, their value for independence abd their unwillingness to 'become part of the crowd'. They should also emphasise a specific point in their history where Daimler-Benz offered to buy-out the company, but their Board of Directors voted against the move, opting to stick it out alone. The set of values instilled throughout BMW Management, its employess, its daily operations, its marketing and also its vehicles are very clear-cut, defined and becoming increasingly dynamic as most of its competitors dilute their values in favour of corporate goals (Eg: Audi being bought about by VAG, and Daimler-Benz compromising its core values so as to take over Chrysler and trying to "all things to all people").


COOL BUT INHUMAN? In another ad, it brazenly spotlights the rear end of its 7 Series flagship sedan, the very design element that was lampooned by journalists in 2001 when the car debuted. But since then, Toyota (TM ) and even Mercedes have copied the so-called bustle-like "Bangle Butt," named for BMW chief designer Chris Bangle. The headline: "Not taking risks is risky."

REAL Happy to see BMW stick to other car makers and let everyone know who had the balls to take on such a design risk. Many people here criticise BMW's bold styling philosophy, but what they refuse to realise is that BMW has paved the way for new design acceptance. You see Bange-like butts everywhere now. Mercedes, Toyota, Lexus, Hyundai, as well as a host of other car markers. Whether they like it or not, people have to come to the realisation that BMW were the ones who had the guts to dive into deep-waters knowing full well that sharks in the form of car journalists would be relentless in their criticisms of such a daring design stance. The unjust thing is that nowadays such design languages are near commonplace, yet BMW have not received acknowledgement for pioneering such a design language in the passenger car market. We see this nor only with the design of the car, but driver features such as I-Drive and the driver-friendly position of the screen, both of which have been adopted by Audi and Mercedes.


BMW's research shows that despite record sales in the U.S. last year, a shocking 75% of luxury buyers aren't even considering a Bimmer.

Wow.. that is an alarming figure, ..but what it also does is speaks volume of how well BMW is doing considering it's still setting all-time sales records. 75%..!!!! ...convert half of them to even considering BMW and the company's got a lucrative market to target. If BMW do this right, then BMW USA will leave Lexus in their wake let alone Mercedes, ... and if there's one thing BMW can do competently it's advertising and promotions. The success of their "The Ultimate Driving Machine" campaign has shown this, although, yes, this article states, it has alienated "creative class" buyers. It will be great to see BMW shift its promotional message away from their cars per se, and to the values that are present in their cars, their work culture and every strategic decision that is made. You can see how meiculous BMW are when it comes to marketing, advertising and the value of a brand name when they scrapped the 4er tag in favour of the 3er coupe simply because the M3 brand name carried too much value to be superseeded by an M4.


It's easy to take a strategy like this and execute it badly. I point you to the current stilted Ford Motor ad campaign that dryly and without any wit trumpets Ford as a company driven by innovation. Running a bunch of TV and print ads telling people that you're innovative just doesn't sound very, well, innovative.

Hahahaha... glad I got a laugh out of such an article,..but that is so true. During my time in USA, I saw Ford's "innovative" ad campaign, focusing on innovation for the consumer's benefit and so on...but the article hits the nail on the head by suggesting that the way they implemented and executed their 'innovative' message wasn't innovative at all. That I feel is a perfect example of why BMW is BMW, and unlike any other car maker, doesn't just come up with any old strategy, but considers all factors, all costs, all benefits and then aligns the final strategy to the company's core values before implementing the strategy.

In simple.... it's not longer safe to be safe. The automotive manufacturers operate in a dynamic environment know which is continually changing, continually progressing and becoming increasingly competitive. Most manufacturers have compromised their brand and their values in favour of corporate goals, but to succeed in this environment, the car maker needs to focus on its customers, creating value, instilling customer loyalty and attachment to the brand, and over the long-term staying committed to a set of clearly defined values which reflect what the company stands for.
(An excellent article relating to this new Strategic Marketing Management approach is Styles and Goddards: Spinning the Wheel of Strategic Innovation. (Link to the article: - ONLY REGISTERED AND ACTIVATED USERS CAN SEE ALL LINKS - CLICK HERE TO REGISTER)

Yannis

So what? BMW leads the market in US but Audi leads for example in China where it sells three times more than BMW. Also in the European market last year A4 and A6 were the segment leaders.
One market alone means nothing , it's the worldwide that count and right now BMW is the No1. Of course Mercedes used to be No1 but not anymore so noone really knows what will happen in 15 years from now.

Beemer B773ER

Damn Yannis... no need to get so defensive.

This article is refering to the US market. Those stat's I pulled up were for the US market...so I'm ONLY talking about ? .. Yep, you guessed it, the US market.

Ok, so you mentioned the Chinese market. Yes Audi is the clear leader in that Chinese market, but you seriosuly cannot even draw a comparison between the size of the Chinese luxury car market and the US market at this present moment.
You say that Audi sales are 3 times that of BMW in the Chinese market, well, I'll return the favour and say that BMW sales are 3 times that of Audi in Australia. Enjoy: - ONLY REGISTERED AND ACTIVATED USERS CAN SEE ALL LINKS - CLICK HERE TO REGISTER

-

To BMW, MB and Audi, the US market means everything. Audi's gettin absolutely trounced by its German colleagues in the US market, but that's no reason to play down the importance of the US market luxury car market.
Who do you think the Q7 was built for? The Chinese market ? Maybe the Western European market who love big SUV's?.. no, I don't think that's who Audi had in mind. It's specifically built for the US market. So to say that one market alone means nothing.. well, in theory yes, but the considerable size of the US market means everything to BMW, MB and Audi.

YoungWarrior

The smugness of BMW fans. Lets give it a couple years as audi roll out more and more cars, and replace the ones with the engine infront of the axle. Everydog has its day, and ones own poularity in the end can be its demise. A bit like 50 cent.

warot

Audi shouldn't even be mentioned in this thread if you ask me. This is a thread about new ads for BMW. Which actually I'm patiently waiting to see.

RikfromBelgium

I think this is a weldeserved smugness after years of Audi-guys and MB-nuts going on and on that BMW will die, they will go bankrupt, their designs will fail ...

This is just a weldeserved " He who laughs last ..."

YoungWarrior

"In one ad, for example, it asserts that BMW's designers and engineers answer only to BMW, while cheekily reminding readers that Volvo and Jaguar are owned by Ford (F ), that Audi is but a unit of Volkswagen (the People's Car), and that its nemesis, Mercedes-Benz, is all merged up with -- gasp! -- Chrysler. "

Matt

Maybe you're on to something, the A4 is a bit of a dog....

I think the ad campaign is really going to be successful because it simply portrays to normal people what we, BMW enthusiasts, already think and say. It outlines the values of the company in a way that non car enthusiasts can understand, which will sell cars. The key is to do it with out being pretentious or smug like YoungWarrior mentioned before.

BMW is really trying to reach out to 75% of the market, who are not driving enthusiasts and therefore the "ultimate driving machine" slogan has bounced off them like rubber. Instead of simply advirtising the product BMW will reach to these other people by advirtising the values. Very good. Very good.

Its good to be selling the best product in the world along with the smartest corporation in the world (maybe?).

Curb Zone