LAUNCHING THE BMW Z3 ROADSTER

CASE OVERVIEW

BMW

• German based Company• 4th with respect to total sales in US market• Maker of Luxury Sedan• Aims to be best in class with unique and

definitive positioning• Aim to be best in Class within the global

marketplace• Major competitors: Lexus, Acura, Mercedes

BMW Wanted To Grow Further• Target

– Increase unit sales to 100,000 in the US mkt. – Promising youth segment– To rejuvenate the BMW brand by positioning the Z3 squarely in

American culture and settling into the hearts and minds of the American public

– To make BMW a global brand Transition from Made in Germany Made by BMW

• Opportunity– Falling Worldwide Market for Motorcycle which generated market of

substitute product for the same psychographic market segment

BMW Selected Z3 Roadster

• Captured essence of BMW brand– Performance and luxury – The Ultimate Driving

Machine

• Was best fit with positioning of driving excitement– Emotional substitute for motorcycle segment

• Evoked BMW’s heritage as a producer of roadsters

• Fit the corporate goal of being the best not the biggest

Z3 Concept Tests Were Conducted

• Revealed interest across life stage segments– Image conscious Gen X– Aspirational car for men and women in 40s– Nostalgia for late baby boomers

• Identified commonalities across groups– “Lover of Life” mindset– Propensity to seek unique expressions of

individuality

Why Spartanburg?

• Displayed commitment to dealers and American people that BMW is here to stay

• Provided cost advantages–High cost environment in Germany–Cushion against monetary fluctuations

• However, also posed challenges – To convince consumers that quality of cars

produced in the USA would be no different from cars produced in Germany

Why Z3?

Z3 Roadster

• Competitors: Porsche, Mercedes

Launch of Z3 Roadster

• Product placement in ‘Golden Eye’• Perceived fit between Bond & Z3 brand personality– BMW looking for a glamorous hero. – Bond as handsome, wealthy, resourceful & adventurous. – Man who loves life and is in control of his destiny– Known for using technology with penchant for fast cars

Market Channels

• Neiman Marcus Christmes Catalog offer of a Special Bond Edition Roaster

- 6000 orders as opposed to 20 unit sales goal • Featuring the Z3 on BMW site on the world wide web - ‘Build your own roadster’ - Hit rates tripled.• Launch of Car in New York’s Central Park• Appearance on Jay Leno’s ‘Tonight Show’• Radio DJ Program - Word of Mouth• ‘Go : An American Road Story’ Video

Traditional Marketing

Positioning of Z3 Roadster

Objectives

• Sustaining the product excitement of Phase1 • To ensure that brand does not become diluted

with the move to Spartanburg plant

Need for Other Marketing Elements

• To Pre Sell Z3– Golden Eye movie placement was just a teaser

• To close gap between Golden Eye Launch and dealership availability

• To stimulate interest in other BMW brands• To reach a wider audience• To reinforce brand image

Production Alternatives

1) Production of Z3 Roadster only2) Production of both Z3 Roadster and 5 S Series

Production of Z3 Roadster Only

Pros• Sustain with Z3 Roadster

demand• Higher quality control

Cons• Excess capacity and

unutilized resource• High transport cost of 5

series import

• Complex process of production

• Inventory cost

• Operation at optimum capacity• Lower the transportation cost of 5

series• Made by Germany -> Made by BMW

Production of both Z3 Roadster and 5 Series

ConsPros

Marketing Alternatives

1) Non-traditional and Traditional marketing with 40/60 split

2) Traditional Marketing

Non-traditional and Traditional Marketing

Pros• Low cost and Larger reach• Competitive advantage

Cons• Long term drawback• Radical consumers

• Expensive• No competitive advantage;;

No differentiation

• Focus on target buyer group• Long term impact benefit

Traditional MarketingConsPros

Our Solution

• Production of both Z3 Roadster and 5 Series• Continuation of 60/40 split of Non-traditional

marketing and traditional marketing in Phase II

• Create a sense of Urgency - with the increase in demand, BMW must ensure that they increase production to match and communicate this clearly to employees• Clear communication of Vision -BMW needs to constantly and coherently communicate vision within organization through the use of newsletter and team meetings

Daily Weekly Monthly Yearly Import

Best 250 1300 6000 7200 36570

Most Likely 275 1375 5500 6600 42570

Worst 300 1250 5000 6000 48570