BMW 1 Series Marketing Communications Mix Analysis
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BMW 1 Series Marketing Communications Mix Analysis
“Car advertising seems to be undergoing a renaissance at the moment. Gone are the winding road clichés of yesteryear; in their place are a host of more engaging campaigns, led by Honda’s ‘Power of Dreams’.” (Nairn, 2004) In what is now a savagely competitive marketplace the overwhelming aim of a marketing campaign, as ever, is to translate creativity into sales. Despite the resounding view that this would be the case for the BMW 1 series, Ritson (2005) claimed that BMW would be a brand that would face significant troubles and a potential decline over the course of this year. Although sales have grown in 2005, Ritson claims that, “with inconsistent offerings such as the X3 and 1 Series now leading the line, BMW is shaping up nicely as a case study in the dangers of line extension.” Yet even this depressing view of the long term success and viability of the BMW brand is not without hope, as Ritson claims that: “If BMW tracks its brand as well as it is supposed to, watch it make a spectacular U-turn toward the end of 2005.” However the question that must be asked is how can BMW track its brand, and in what areas must if focus its attention?
The car market has long been seen as one of the most difficult to segment, due to rapidly changing consumer demands as technology grows and individual consumers’ demands and circumstances change. These fluctuations cause shifts in demand that have apparently no basis in traditional market segments, with new segments appearing and old ones disappearing, or completely changing, at a rapid rate. The main segments are best determined and separated along the seven alternative hypotheses, regarding the market partition, determined by Bauer and Herrmann. (1995) For example, “structuring based on the type of engine (diesel or gasoline) or a partition derived from the vehicle type (coupe, sedan or squareback). The “vehicle category”, “drive”, “transmission”, “production site” and “brand” also serve as points of departure for identifying submarkets:”
(1) Type of engine – petrol/diesel/LPG.
(2) Vehicle category — compact, mid-size, executive.
(3) Drive — two-wheel drive, four-wheel drive.
(4) Transmission — manual gear-change, automatic gear-change.
(5) Type of vehicle — coupe, sedan, station wagon/squareback model.
(6) Production site — domestic (German), foreign.
(7) Brand — Audi, BMW, Fiat, Ford, Mercedes Benz, Nissan, Opel, Peugeot, Toyota, Volkswagen.
The results of a subsequent test done in 1995 made it clear at the time that “the structure of the car market is dominated by three sub markets, namely “compact”, “mid-size” and “executive”. There is evidently a closer substitution relationship between cars belonging to the same vehicle category than between cars that, for example, belong to the same brand, have the same type of drive or were produced in the same place.” (Bauer and Herrmann, 1995) Over time, more and more segments have sprung up, and these are shown below, but consumers still tend to compare cars primarily by size.
The 1 series is classed in the entry premium market, in which the Audi A3 extended its lead over the Mercedes A class last year to 35,624 units compared with 700 units in 2003. Audi sold 160,296 units of the A3 last year, up 21.5% from a year earlier. (Market Analysis by Segment, Western European Sales, 2005) Because of the addition of the BMW 1 series and a full year of Lancia Ypsilon sales, the overall segment was up 31.5% to 627,005 units, making this segment one of the largest and fastest growing for BMW to target, bearing in mind the decline in their traditionally strong segments: the lower, medium and upper premium, and the slow growth of premium coupe sales. However, the strength of Audi and Mercedes, and the new additions, have also made this a highly competitive market, and there is doubt over BMW’s ability to compete, as shall be seen in the positioning section, below.
A: Segment B: 2004 sales C: % change from ’00
A B C
Small minivan 561,881 276.5
Premium SUV 273,909 252.5
Roadster & convertible 261,793 191.3
Exotic 7,490 88.4
Medium minivan 1,227,364 58.5
Medium SUV 383,828 56.5
Car-derived van 210,513 42.6
Entry premium 627,005 31.5
Premium roadster 175,639 30.8
Large SUV 155,484 14.7
Premium coupe 147,078 3.5
Small 3,581,220 3.0
Large minivan 324,142 2.7
Coupe 32,907 -80.9
Large 70,269 -46.9
Minicar 728,924 -46.7
Small SUV 58,697 -43.8
Upper premium 48,831 -22.5
Upper medium 1,229,452 -21.6
Lower medium 3,114,526 -15.4
Medium premium 591,487 -4.5
Lower premium 923,698 -4.3
Data: Ciferri (2005)
The 1-Series was the first BMW range to be launched in opposition to the VW Golf, although as a premium alternative rather than a direct rival. It maintained the BMW tradition of rear-wheel drive, and develops the sculpted look of all recent BMW designs, however the 1-Series was pitched above the Audi A3, thus placing it firmly in the premium entry segment. Anecdotal evidence from Richards-Carpenter (2004) claimed that the car would be targeted at social climbers: “the kind of people who held drinks parties to celebrate the launch of the Compact in 1994. The 1-Series will come to define one-upmanship, and that territory has been the preserve of the VW Golf in this sector until now. The 1-Series is a car for the ambitious; no-one will want to own theirs for longer than two years, since they’ll be itching for a 3 Series, then a 5 Series…” As such, it is clear that this car is attempting to target young, rich professionals, whose car definitely has luxury good status, who aspire to own a 3 or 5 series, but don’t yet possess the financial resources.
Early reviews of the 1 series were positive, and customers in Europe and Asia were enthusiastic, buying more than 5,600 of the 1 Series cars in a little fewer than two weeks following its September launch. (Taylor III, 2004) The car is still attracting an excellent market response, with February sales reaching 10,267 units, meaning that, in the six months since the market launch, nearly 60,000 (58,925) of this premium product in the compact class have found a buyer. (Dow Jones International News, 8 March 2005) As such, it appears that the 1 series is hitting its target market with great success, however more time is needed to determine true buyer behaviour patterns.
Role of branding
On this front, BMW’s launch campaign for its 1 Series has lots going for it: not only does it look great, it also contains an unusually compelling selling message, and dramatizes the cars features and inherent luxury. However, some critics say the advertising strategy doesn’t feel very BMW, as this is a bold brand diversification attempt, much like Ritson (2005) suggests. However, Nairn (2004) believes that: “it continues a tradition of wrapping up product features with an aura of supreme selfconfidence. The tone is much younger and less corporate than in the past, but the over- riding impression remains that of the ultimate (small) driving machine.” Thus although the brand is a great diversification from BMW’s traditional markets, the brand is kept strong by use of the premium and luxury aspects of the car.
Evaluation of communications strategy
The cinema commercial is essentially a 60-second compilation of three TV ads, each of which dramatises one of the car’s features. Using a kaleidoscope effect, a tottering foal is contrasted with the car’s near-perfect balance; a tortoise is set against the’ valvetronic’ engine; and a tricycle highlights the vehicle’s rear-wheel drive. The uniqueness of these features — as well as the model name — is summed up by the line “The only 1”. (Nairn, 2004)
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With the commercials being the main part of BMW’s marketing strategy, their most striking features are that they actually have something to say about the product and its features, which sets them apart from the increasingly image based, style of substance advertisements of other car brands. As Nairn claims: “Most car advertisers would kill for a unique product story, a great campaign look and feel or a strong, branded endline (which I bet BMW is milking for all it is worth through the line).” BMW’s commercials contain all of these elements, and tied in with the branding strategy, they make this a strong communications strategy.
Integration of communications approach
Webdale’s (2004) article best describes the interactive television advertising campaign created for the BMW 1 Series automobile. The campaign included the company’s first concerted move into interactive television advertising and an online media element. The company positioned the 1 Series as unique in a category comprising of some 90 models, trading off the tagline, “The only 1”, an approach that has been integrated with the main cinema advertising. The entire campaign has been created by WCRS, with its interactive department, Meme, creating the online and interactive television elements, while Vizeum UK and Zed were responsible for planning/buying of traditional and new media respectively. The use of a single company has created a strongly integrated approach, which is currently reaping dividends in term of sales.
With the 1 series currently selling at BMW’s target level of 120,000 units for the year, there are very few recommendations that can successfully be made. The main focus for the company should be to attempt to avoid the potential damage to its brand image and equity that Ritson (2004) feared would be created. The extension represented an attempt by BMW to attract younger consumers to the brand as well as garner a big slice of Europe’s compact car market. Ritson viewed it as a classic strategic move, and it is one that has already generated increased revenue, that should run to millions as the price barrier to owning a BMW is lowered and younger people can fulfill their goal, and own such a status symbol.
However, according to Ritson, it is the very financial success of the series that provides its biggest risk: “As more and more 1 Series cars begin to appear, driven by ever younger and less ‘appropriate’ BMW owners, this extension could seriously dilute the marque’s brand equity.” Ritson is clearly referring to the brand damage that has been done to the likes of Hackett and Burberry by their association with football hooligans and other undesirables. (Barns, 2005) As such, the only recommendation that can really be made to BMW regarding their marketing mix at this stage is to attempt to maintain an element of distance between the 1 series and other BMW brands, perhaps by rebranding the more expensive and exclusive brands as the “Original Ultimate Driving Machine”. This rebranding would attempt to maintain the benefits the 1 series gains from its association with the higher premium cars, whilst minimizing the damage done to the reputation of the 3, 5 and 7 series, and the overall BMW brand, by their association with a cheaper, less privileged, car.
- Barns, E. (2005) Are advertisers wise to chase the chav pound? Campaign (UK); Issue 13, p. 18.
- Bauer, H. H. and Herrmann, A. (1995) Market demarcation: Theoretical framework and results of an empirical investigation of the German car market. European Journal of Marketing; Vol. 29, Issue 11, p. 18.
- Blythe, J. (2003) Essentials of marketing communications. FT Prentice Hall 2003
- Ciferri, L. (2005) Europeans get more exotic. Automotive News Europe; Vol. 10 Issue 7, p. 33.
- Dow Jones International News. (8 March 2005) BMW Feb Vehicle Sales Up 7.0%.
- Market Analysis by Segment, Western European Sales. (2005) Automotive News Europe; Volume 10, Issue 7, p. 34.
- Nairn, A. (2004) BMW 1 Series. Marketing (UK); p. 24.
Richards-Carpenter, T. (2004) Forthcoming models – BMW 1 Series: the two-minute guide. http://www.topgear.com/content/news/cars_coming_soon/27/
- Ritson, M. (2005) Keep a watch out for the return of reputation. Marketing (UK); p. 13.
- Ritson, M. (2004) Safe bets can be huge brand extension gamble. Marketing (UK); p. 23.
- Taylor III, A. (2004) The Ultimate Fairly Inexpensive Driving Machine. Fortune (Europe); Vol. 150, Issue 8, p. 28.
- Webdale, J. (2004) BMW drives 1 Series launch with integrated campaign. New Media Age; p. 9.
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