BMW

Business Strategy



Business Strategy

1. Company of Ideas

This case is about the "company of ideas" advertising campaign of BMW of North America LLC (BMW LLC), which was unveiled in May 2006 in North America. The communication in these ads were different from the company's communications in the past as the new ads downplayed BMW's performance and strived to project its design prowess, independence, and corporate culture that fostered innovation - promoting BMW as a "company of ideas." In doing so, the company said that they wanted to take their brand beyond its traditional association with yuppies and attract a wider section of luxury car buyers in the US.

The company's new marketing communications campaign was aimed at the creative class, an influential demographic segment in the US. The case highlights the rationale behind the company's new advertising campaign and the initial reactions it received from analysts, marketing experts, and consumers.

Issues

» Understand the rationale behind the "company of ideas" advertising campaign of BMW of North America LLC.

» Understand the marketing communication strategies adopted by a car manufacturer when targeting a new customer segment.

» Understand the issues and challenges faced by a strong and well-defined brand in changing its brand image/positioning.

'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, released a new advertising campaign promoting itself as a "company of ideas". This move took many by surprise. The tone and tenor of the new campaign were 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.

Despite the good sales performance, Jack Pitney (Pitney), vice president, marketing at BMW LLC felt that almost 75 percent of luxury car buyers in the US were not considering BMW as they still strongly associated it with the yuppie phenomenon of the 1980s. Thus, the company 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 from the theme of "driving" and "performance." According to marketing expert Al Ries (Ries), BMW owned the word "driving" and this had been etched in the minds of consumers over a period of three decades with the tagline "The Ultimate Driving Machine."

Others felt that the ads fell under the heading of "preventive maintenance" as it came at a time when there was no real need for BMW to upset the cart. A few other analysts felt that BMW was losing its soul by trying to be everything to everyone.

The ad campaign was unveiled through various media such as newspapers, magazines, television, cable network, outdoor billboards and the ...