BMW brand studyMarket Study
“BMW is fortunate-we don’t have too much of a dilemma as to what we’re going to call our cars.” – Jim McDowell, vice president of marketing at BMW
A BMW brand study on its branded house
BMW is a textbook example of the branding strategy called BRANDED HOUSE. This means the customer prefers the parent brand then chooses from the models.
The opposite of this brand strategy is HOUSE OF BRANDS. This is common in packaged goods. For example, Tide laundry detergent is the preferred brand. Customers search for it rather than a detergent from P&G.
Before we begin this BMW brand study, let’s hear from the recently retired Jim McDowell, former vice president of marketing at BMW, explaining BMW’s product life cycle.
“We’re fortunate right now at BMW in that all of our products are new and competitive. Now, how do you do that? You must introduce new models over time. You have to logically plan out the introductions over time, so you’re not changing a whole model range at the same time you’re changing another model range.”
BMW’s strategy is to keep its products in the introduction and growth stages by periodically introducing new models in each of its product lines. BMW does not like to have any products in the product life cycle’s maturity or decline stage.
Explains McDowell, “If a product is declining, we would prefer to withdraw it from the market, as opposed to having a strategy for dealing with the declining product. We’re kind of a progressive, go get ’em company, and we don’t think it does our brand image any good to have any declining products out there. So that’s why we work so hard at managing the growth aspect.
BMW brand study- The company and products
You don’t have to conduct a BMW brand study to know BMW is one of the preeminent luxury car manufacturers in Europe, North America, and the world today. BMW produces several lines of cars, including the 3 series, the 5 series, the 7 series, the Z line (driven by Pierce Brosnan as James Bond in Goldeneye (the next film will feature four Aston Martin models) and a Z4 roadster in the zombie film Warm Bodies), and the X line, BMW’s “sport activity” vehicle line. (Read Stealing Share’s New Global Automobile Market Study here.)
In addition, BMW is now selling Rovers, a British car line anchored by the internationally popular Land Rover sport utility vehicle, and began selling Rolls Royce vehicles in 2003.
Sales of all the BMW, Rover, and Land Rover vehicles have been on the rise globally.
High-profile image campaigns (such as the famous James Bond promotion and movie placements) and the award-winning BMW website (where users can design their own car) continue to increase the popularity of BMW’s products.
No BMW brand study would be complete without telling you that BMW cars typically have a product life cycle of seven years.
BMW product life cycle
To keep products in the introductory and growth stages, BMW regularly introduces new models for each of its series to keep the entire series “new.”
For instance, with the 3 series, it will introduce the new sedan model one year, the new coupe the next year,
then the convertible, then the station wagon, and then the sport hatchback. That’s a new product introduction for five of the seven years of the product life cycle.
McDowell explains, “So, even though we have seven-year life cycles, we constantly try and make the cars meaningfully different and new about every three years.
And that involves adding features and other capabilities to the cars as well.”
So, for purposes of this BMW brand study, let’s ask, how well does this strategy work? BMW often sees its best sales numbers in either the sixth or seventh year after the product introduction.
As global sales have increased, BMW has become aware of some international product life-cycle differences.
For example, it has discovered that some competitive products have life cycles that are shorter or longer than seven years.
In Sweden and Britain, automotive product life cycles are eight years, while in Japan they are typically only four years long.
“BMW is fortunate-we don’t have too much of a dilemma as to what we’re going to call our cars.”
McDowell is referring to BMW’s trademark naming system that consists of the product line number and the motor type.
For example, the designation “328” tells you the car is in the 3 series and the engine is 2.8 liters in size.
BMW has found this naming system clear and logical, and easily understood around the world. The Z and X series doesn’t quite fit in with this system.
BMW had a tradition of building experimental, open-air cars and calling them Zs. Hence, when the prototype for the Z4 was built, BMW continued with the Z name.
For the sports activity vehicle, BMW also used a letter name – the X series – since the four-wheel-drive vehicle didn’t fit with the sedan-oriented 3, 5, and 7 series.
Other than the Z4 (the fourth in the Z series) and the X5 (named 5 to symbolize its mid-sized status within that series), the BMW branding strategy is quite simple. Unlike the evocative names many car manufacturers choose to garner excitement for their new models, this system actually benefits the prospective customer.
BMW brand study. managing the product through the web – Rebranding For the Future
One of the ways BMW is improving its product offering seven further is through its innovative website (www.bmwusa.com).
At the site, customers can learn about the particular models, e-mail questions, and request literature or test-drive from their local BMW dealership.
What really sets BMW’s website apart from other car manufacturers, though, is the ability for customers to configure a car to their own specifications (interior choices, exterior choices, engine, packages, and options) and then transfer that information to their local dealer.
Carol Burrows, Consumer Research Manager at BMW of North America, explains, “The BMW website is an integrated part of the overall marketing strategy for BMW.
The full range of products can be seen and interacted with online. We offer pricing options online. Customers can go to their local dealership via the website to further discuss costs for the purchase of a car.
And it is a distribution channel for information that allows people access to the information 24 hours a day at their convenience.”
This concise BMW brand study wants to point out that the web presence is not just a retail site for BMW. It is a vehicle to position the brand and satisfies both goals with aplomb.
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