VIDEO CASE 11 "We're fortunate right now at BMW in that all of our roducts are new and competitive," says Jim McDowll, vice-president of marketing at BMW, as he explains MW's product life cycle. "Now, how do you do that? 'ou have to introduce new models over time. You have o logically plan out the introductions over time, so ou're not changing a whole model range at the same e you're changing another model range." BMW's strategy is to keep its products in the introuction and growth stages by periodically introducing ew models in each of its product lines. In fact, BMW oes not like to have any products in the maturity r decline stage of the product life cycle. Explains lcDowell, "If a product is declining, we would prefer withdraw it from the market, as opposed to having a trategy for dealing with the declining product. We're .ind of a progressive, go get 'em company, and we n't think it does our brand image any good to have y declining products out there. So, that's why we ork so hard at managing the growth aspect." MW-THE COMPANY AND TS PRODUCTS .\1W is one of the pre-eminent luxury car manufacturin Europe, North America, and the world today . .\1W produces several lines of cars, including the series, the 5 series, the 7 series, the Z line (driven by erce Brosnan as James Bond in Goldeneye), and the w X line, BMW's "sport activity" vehicle line. In ition, BMW is now selling Rovers, a British car line hored by the internationally popular Land Rover rt utility vehicle. It started selling Rolls Royce vehiin 2003. Sales of all the BMW, Rover, and Land over vehicles have been on the rise globally. Highfile image campaigns (such as the James Bond protion) and the award-winning BMW Web site (where sers can design their own cars) continue to increase popularity of BMW's products. RODUCT LIFE CYCLE _fW cars typically have a product life cycle of seven ars. To keep products in the introductory and growth ges, BMW regularly introduces new models for each its series to keep the entire series "new." For stance, with the 3 series, it will introduce the new model one year, the new coupe the next year, then convertible, then the station wagon, and then the rt hatchback. That is a new product introduction for e of the seven years of the product life cycle. McDowell explains, "So, even though we have sevenyear 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." 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 the United Kingdom, automotive product life cycles are eight years, while in Japan, they are typically only four years long. BRANDING "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 litres in size. BMW has found this naming system to be clear and logical and can be easily understood around the world. The Z and X series do not quite fit in with this system. BMW had a tradition of building experimental, open-air cars and calling them Z's, and hence when the prototype for the Z3 was built, BMW decided to continue with the Z name. For the sport activity vehicle, BMW also used a letter name-the X series-since the four-wheel-drive vehicle did not fit with the sedanoriented 3, 5, and 7 series. Other than the Z3 (the third 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. MANAGING THROUGH THE PRODUCT THE WEB-THE WAVE OF THE FUTURE One of the ways BMW is improving its product offerings even further is through its innovative Web site (www.bmw.com). At the site, customers can learn about the particular models, e-rnail questions, and request literature or test-drives from their local BMW dealership. What really sets BMW's Web site apart from those of other car manufacturers, though, is the facility for customers to configure a car to their own specifications (interior choices, exterior choices, engine, packages, and options) and then transfer that information to th dealer. As Carol Burrows, product communi manager for BMW, explains, "The BMW Web an integrated part of the overall marketing for BMW. The full range of products can be interacted with online. We offer pricing option Customers can go to their local dealership via site to further discuss costs for purchase of a car. is a distribution channel for information that people access to the information 24 hours a day convenience." QUESTIONS 1 Compare the product life cycle described by BMW cars with the product life cycle shown in Figure 11are they (a) similar, and (b) dissimilar? 2 Based on BMW's typical product life cycle, wh keting strategies are appropriate for the 3 series? The 3 Which of the three ways to manage the product ill does BMW utilize with its products-modifying the pr modifying the market, or repositioning the product? 4 How would you describe BMW's branding (multiproduct branding, multi branding, private branding mixed branding)? Why? 5 Go to the BMW Web site (www.bmw.com). and d car to your own specifications. How does this enable. a customer to evaluate the product differently from would otherwise be possible?