CASE ANALYSIS
BMW Z3 ROADSTER
SUBMITTED TO DR. ABDUL WAHEED - MARKETING MANAGEMENT MKT611
WEDNESDAY, FEBRUARY 15 2017
DONE BY
GROUP 4 - MBA 2016
AASHISH SHARMA (MBA16001) | ANAND VASUDEVAN (MBA16009) | ISHA PARIDA (MBA16016) |
KARTIKEYA TIWARI (MBA16060) | NICHOLAS WEBER (TRM171003) | SARGAM ARORA (MBA16039) |
SHIVANI GATTANI (MBA16044) | VIVEK RAMADAS IYER (MBA16054)
SECTION 1
SUMMARY
BMW, a brand known for its performance and luxury cars is preparing for an off-beat launch of it’s new Z3 roadster into
the American market. After a successful Phase I launch, the buck is back on the Marketing desk of BMW North America,
Inc. It’s upon marketing vice president James McDowell to roll up his sleeves to head the design and execution of the
Phase II communication strategies.
Right from the start, BMW-NA’s marketing team has been following unconventional communication strategies for the Z3
Roadster. For instance, the product was places as James Bond’s official car in the 1996 James Bond move - Golden Eye. It
also made an appearance in Jay Leno’s Tonight Show and a James Bond edition of the car was offered through the
Neiman Marcus Christmas Catalog. Going forward with the Phase II launch, McDowell and his team needs to carefully
weigh out the effectiveness of each of the pre-launch activities as they continue designing marketing tactics, so that BMW
can keep the market excited about the Z3 until it hits showrooms!
For BMW-North America, the Z3 is a significant product. The North American customers’ reluctance to associate with a
foreign brand meant that BMW holds a puny 16% share of the market. The strategic significance of the Z3 is of course not
to be a mass market product, but a strong attempt to ingrain the brand into the hearts of Americans.
SECTION 2
PROBLEM IDENTIFICATION
This case revolves around the issue of BMW structuring and managing it’s marketing mix for the Z3 Roadster launch in
the North American market. BMW’S North American marketing team, headed by VP James McDowell and CEO Dr.
Helmut Panke are saddled with the responsibility of importing BMW’s mystique from the misty Bavarian hills to the lush
fields of South Carolina.
BMW was particularly interested on tapping into a savvy youthful market to drive sales of the Z3. The team creatively used
an array of marketing activities that were non-traditional to win the hearts of the American youth. Through this, they felt
that the brand would be able to pump in fresh excitement and enthusiasm; something that the American automotive
industry had never really experienced before.
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SECTION 3
SWOT ANALYSIS
Strengths
• BMW’s cars were globally positioned and famous for being the best and not the biggest. This attracted youth who’s
secret wants were met.
• The tactical use of mass media, such as movies was a brilliant way to connect with the American culture and hence, it’s
people.
• All through their promotional events, they were innovative and created an impact in the market.
• Their strategic franchise expansion made accessibility to their products easy.
Weakness
• BMW was seen as a foreign brand in the eyes of Americans, who favoured local brands.
• Although the youth was it’s primary target market, BMW’s corporate image was perceived to be serious and
tradition-bound.
• The execution of a non-traditional marketing plan was complicated.
Opportunities
• BMW’s first plant outside of Germany, in America meant that the cost of cars built there were substantially cheaper
than those imported from Germany.
• BMW could position the car as American-made, but with the goodness of German engineering.
Threats
• Competition, especially from German rival Mercedes-Benz was the major threat to BMW.
• Tough government regulations meant that BMW had to risk altering a number of it’s manufacturing practices.
• The brand principal was foreign, and so still risked to gain American acceptance.
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SECTION 4
TAKING THE DIFFERENT ROAD
THE CENTRAL THEME
The Z3’s launch was one of the boldest attempts at non-traditional marketing in North America. Non-traditional
marketing encouraged looking beyond traditional communication methods such as TV and print commercials to generate
interest for the product. In the case of Z3, all the non-traditional marketing elements revolved around a theme.
Central to this theme was the movie placement in James Bond’s movie - Golden Eye.
Revolving around the central theme were an array of promotional activities that complimented the product placement.
These were:
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Offer on the Neiman Marcus Catalog
BMW’s website
Apple Computer’s advertisement reference to BMW’s website
Appearance in the Tonight Show by Jay Leno
Dealer Promotion Kits
A radio DJ program
Launch in Central Park, New York
BENEFITS
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Innovative and subtle way to reach a wide audience and potential customer base such as young people.
International brand recognition and recall.
Cost effective celebrity endorsement.
The Z3 is associated with James Bond, a glamorous, successful hero hence immediately validating the Z3 brand.
Strong word-of-mouth publicity generated
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RISKS
• Although upfront costs were less, there was less cost control and uncertainty.
• This could only be a one-off event as repeating it for another launch would wade away the novelty.
• The time gap between promotional events and actual availability of the product might make people forget about the
product.
• Promotional events with live audience brought in the risk of audience expressing displeasure publicly
SECTION 5
A SUCCESSFUL BOND STORY
The success of the Z3 launch can be evaluated by analysing the responses generated by each non-traditional element of the
launch process as follows:
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New York Central Park Launch
Effect of Pierce Brosnan - James Bond Movie
Radio DJ Program
Jay Leno’s Tonight Show
Go - American Road Story
The Z3 launch proved to be widely successful because:
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The Bond movie kicked off to a huge opening with a great deal of eyeballs grabbed by the Z3
An overflow of bookings made for the car
The Z3’s premium value was well received and understood by the audience
There was an influx of people visiting the showrooms
A lot of cost efficiency was achieved by non-traditional methods
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SECTION 6
A PARADIGM SHIFT
As pointed out by McDowell, the Z3 campaign does indeed signal a paradigm shift from traditional to non-traditional
marketing. The evolution is particularly felt in the following aspects of a product launch:
The Lifecycle of a Product
During the launch, non-traditional marketing worked really well in generating sustained excitement in the audience, and
extended the period of promotion to months, compared to a few hours that traditional marketing offered.
Buying Behavior
For expensive lifestyle objects such as cars, consumers form a bond with the products and tend to relate and tie their life
experiences and memories to it. In such scenarios non-traditional marketing methods works well when the consumer is
about to make an emotional “irrational” purchase.
SECTION 7
PHASE II: THE ROAD AHEAD
After a successful first phase, McDowell and his team need to keep the momentum going so that they can convert the Z3’s
public excitement into sales numbers. Particularly, BMW North America needs to focus on the audience and potential
customers sustaining interest in the car. This can be done by:
• Contacting potential buyers - based on their interests shown in phase I - by telephone and mail to keep them updated on
the availability dates.
• Organise meet-ups so that potential buyers can meet each-other and feel a sense of being in an exclusive community
• Organise demo drives
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