BMW Z3 BMW Z3 RoadsterRoadster

Case Study:Case Study:

Traditional Vs Non-Traditional Vs Non-Traditional MethodsTraditional Methods

Case ObjectivesCase Objectives

Innovative product launch marketing Innovative product launch marketing Marketing execution Vs StrategyMarketing execution Vs Strategy Role of new Marketing ParadigmsRole of new Marketing Paradigms

NT ideas to break clutterNT ideas to break clutter Differences in methodology – NT vs. TDifferences in methodology – NT vs. T Understanding risks and controlUnderstanding risks and control

THEORYTHEORYThe Story Behind Non-Traditional MediaThe Story Behind Non-Traditional Media

The Rise of NT mediumsThe Rise of NT mediums

Traditional Medium: AdvertisingTraditional Medium: Advertising Tools and techniques developedTools and techniques developed

Effectiveness: e.g. AIDA HierarchyEffectiveness: e.g. AIDA Hierarchy Metrics: Reach/Frequency/ExposureMetrics: Reach/Frequency/Exposure Evaluation: Wearout/Recall/RecognitionEvaluation: Wearout/Recall/Recognition

Paradigm Shift to Non Traditional Paradigm Shift to Non Traditional MediumsMediums

The Rise of NT MediumsThe Rise of NT Mediums

Reasons for Paradigm ShiftReasons for Paradigm Shift Rising cost of Media Rising cost of Media Loss of control Loss of control Change in Marketing StrategyChange in Marketing Strategy

Three main CategoriesThree main Categories Product Placement: Control through Co-opProduct Placement: Control through Co-op Place Promotion: Control through LocationPlace Promotion: Control through Location Sponsorship: Control through PatronageSponsorship: Control through Patronage

DIFFERENCESDIFFERENCES

PhilosophyPhilosophy

TraditionalTraditional DisciplinedDisciplined QuantifiedQuantified PlannedPlanned BudgetedBudgeted Regulated Regulated ControlledControlled Strategy ledStrategy led

Non TraditionalNon Traditional FlexibleFlexible EvolvingEvolving AdaptableAdaptable External controlExternal control IntuitiveIntuitive ChaoticChaotic Execution ledExecution led

Communication ProcessCommunication Process

Awareness

Interest

Desire, Preference

Purchase

Excitement

Awareness / Visibility

Word of mouth, Buzz

Involvement / Infatuation

Purchase

ConsumerAdvocacy

Non Traditional Traditional

OthersOthers

CredibilityCredibility NT can be more credible have more impact and more NT can be more credible have more impact and more

efficient when it works.efficient when it works. BudgetingBudgeting

NT costs can be uncertainNT costs can be uncertain Traditional advertising costs can be better forecasted.Traditional advertising costs can be better forecasted.

Target marketTarget market Can be well targeted through mass mediaCan be well targeted through mass media NT relies on audience self selectionNT relies on audience self selection

MetricsMetrics Traditional advertising = measurable, reach GRP, Traditional advertising = measurable, reach GRP,

frequency = more easily measured by market research.frequency = more easily measured by market research. NT is more difficult to evaluate.NT is more difficult to evaluate.

Benefits and Risks Method Benefits and Risks Method usedused

BenefitsBenefits CredibilityCredibility

More credible than More credible than paid for advertisingpaid for advertising

Efficiency through Efficiency through word of mouthword of mouth

• Focus on awarenessFocus on awareness• Leverage the buzzLeverage the buzz• Create ExposureCreate Exposure• Build into ConversationBuild into Conversation• Weave the brand into Weave the brand into

Everyday lifeEveryday life

RisksRisks Loss of controlLoss of control

TimingTiming Target audience Target audience Brand ImageBrand Image Brand MeaningBrand Meaning ExposureExposure

Challenge of Challenge of translating translating awareness into awareness into sales:sales:

Difficult to Difficult to measure impact:measure impact:

EVALUATIONEVALUATION

BREAKBREAK

Evaluation of Case :Evaluation of Case :

ParametersParameters

Evaluate the caseEvaluate the case

Strategic SignificanceStrategic Significance Benefits and RiskBenefits and Risk Measuring SuccessMeasuring Success Translating Excitement into SalesTranslating Excitement into Sales Post script and wrap upPost script and wrap up

SO WHAT HAPPENED?SO WHAT HAPPENED?Strategic SignificanceStrategic Significance

Strategic Significance of Strategic Significance of the Launchthe Launch

Motivate and Stimulate dealer Motivate and Stimulate dealer networknetwork

Expand FranchiseExpand Franchise Underrepresented TargetsUnderrepresented Targets Gen X Vs Baby BoomersGen X Vs Baby Boomers

Fill Capacity at new PlantFill Capacity at new Plant Target : 100,000 unitsTarget : 100,000 units Initial foray into USA. Initial foray into USA.

Strategic Significance of Strategic Significance of the Launchthe Launch

Rejuvenate and Redefine BMW Rejuvenate and Redefine BMW ImageImage Made in Germany to Made by BMWMade in Germany to Made by BMW Bavarian Mystique to American IconBavarian Mystique to American Icon Precision Engineering to Fun to DrivePrecision Engineering to Fun to Drive

SO WHAT HAPPENED?SO WHAT HAPPENED?Benefits and RisksBenefits and Risks

Issues FacedIssues FacedTypical to the CategoryTypical to the Category Loss of controlLoss of control

TimingTiming Target audience Target audience Brand Image: Brand Image: Bond/BMW GridBond/BMW Grid Brand MeaningBrand Meaning ExposureExposure

Challenge of translating awareness Challenge of translating awareness into sales: into sales: The excitement/time GridThe excitement/time Grid

Difficult to measure impact:Difficult to measure impact: Success CriterionSuccess Criterion

Brand & BondBrand & Bond

German

UltimateDrivingMachine

English

Hero

Drives an Aston

Sexist

Fast cars

Adv. Technology

Sophisticated

Brand Dilution in Case of Movie FailureBrand Dilution due to ClutterBrand Dilution due to Negative Association

SO WHAT HAPPENED?SO WHAT HAPPENED?Measuring SuccessMeasuring Success

Measuring Success: Measuring Success: Overall Overall

Phase 1 : Unqualified ingoing Phase 1 : Unqualified ingoing objectivesobjectives

Sales-Cost Ratio QuestionableSales-Cost Ratio QuestionableIntro year exp. sales

(units)

Launch ad support

(millions)

Spend/car

BMW Z3 9k waitlist for 3.5 months =

30,000 p.a

$20 $667

Land Rover Discovery

14,085 $9 $667

Infiniti I-30 15,194 $35 $2304

1998 units (000’s)

1997 units (000’s)

1996 units (000’s)

Z3 / Total BMW 20.6 / 131.6

19.4 / 119.3

10.3 / 102.4

Boxster / Total Porsche (selling price = $40K)

9.7 / 17.2

5.3 / 11.5

Na / 6.8

Measuring Success: By NT Measuring Success: By NT elementelement

Element Objective Reported results

Neiman Marcus WOM, Buzz 20 units over 3.5 month Christmas season

100 orders placed. 2days6000 orders by Xmas

Central Park event Media exposure and Buzz 2000 media reps attended. # of Z3 editorials in leading publications can be counted.

Jay Leno WOM, Buzz Unpredictable, all we know is “it worked out very well” Role for campaign evaluation research to measure awareness impact.

Radio DJ • Unstated Statements like “Amazing Credibility,” “Had 3 times the WOM of other events. What does this mean in terms of measurable effects on sales?

Dealer Ad& Promo • Generate Dealer Motivation Local publicityTraffic in dealerships increased (300%)

TV and Print •Reinforce Movie placement 15% Recall . 50% higher than Mercedes E class launchIs that good enough

Success CriterionSuccess Criterion Great Buzz !Great Buzz !

What buzz?What buzz? 3 Times the word of mouth3 Times the word of mouth

Quantifiable?Quantifiable? 50% less than SOM/SOV rules 50% less than SOM/SOV rules

Impact of Traditional media with comparable Impact of Traditional media with comparable spend?spend?

Dealer Traffic upDealer Traffic up Influence of new product introduction?Influence of new product introduction?

9000 cars sold – Expected was 50009000 cars sold – Expected was 5000 Validity of Estimation?Validity of Estimation?

EXCITEMENT TO SALESEXCITEMENT TO SALESObjectives and MediumsObjectives and Mediums

Excitement to SalesExcitement to Sales

Objectives of Phase 2Objectives of Phase 2 Sustain wait list customer interestSustain wait list customer interest Maximize conversion rateMaximize conversion rate Maximize customer acquisitionMaximize customer acquisition

Mediums?Mediums?

AND THEN?AND THEN?

PostscriptPostscript

By Jan. 1996 BMW had to scale down their marketing efforts to By Jan. 1996 BMW had to scale down their marketing efforts to avoid potential consumer backlash by not being able to meet avoid potential consumer backlash by not being able to meet demand.demand.

Tactics shifted to maintaining consumer interestTactics shifted to maintaining consumer interest Cinema advertising (60 sec. Teaser placements)Cinema advertising (60 sec. Teaser placements) In flight videos targeted at business travelers.In flight videos targeted at business travelers. Dealer sponsored direct marketing programsDealer sponsored direct marketing programs Limited corporate sponsored direct marketingLimited corporate sponsored direct marketing Dealer funded retention programsDealer funded retention programs

Launch date March 1996. Selling price in 1997 = 30k to 36k.Launch date March 1996. Selling price in 1997 = 30k to 36k. Sales in 000’sSales in 000’s

1997: 19.4 (Mazda Miata: 17.4 Porsche Boxter: 5.3)1997: 19.4 (Mazda Miata: 17.4 Porsche Boxter: 5.3) 1998: 20.6 (Mazda Miata: 19.8 Porsche Boxter: 9.7)1998: 20.6 (Mazda Miata: 19.8 Porsche Boxter: 9.7)

PostscriptPostscript

Tie up for Tomorrow never DiesTie up for Tomorrow never Dies BMW cruiser bikeBMW cruiser bike

AwardsAwards Promotion of the yearPromotion of the year Marketer of the yearMarketer of the year Brandweek : Model of effective cross Brandweek : Model of effective cross

promopromo USA Today : Marketing CoupUSA Today : Marketing Coup

PostscriptPostscript

BrickbatsBrickbats Went too farWent too far OverdoneOverdone License to Overkill License to Overkill James bond – ‘ International Man of James bond – ‘ International Man of

Sales’Sales’

Types of Product Types of Product placementplacement

CorporateCorporate Lenovo in KBCLenovo in KBC

GenericGeneric Rayban in MIBRayban in MIB

ServiceService ICICI in BKCICICI in BKC

IdeaIdea Movie promo in a serial Movie promo in a serial

Types of Product Types of Product placementplacement

HistoricHistoric Air India in moviesAir India in movies

InnovationInnovation Introducing a productIntroducing a product Swift in Bunty aur BabliSwift in Bunty aur Babli