BMW Z3 Roadster

Case Study: Traditional Vs Non-Traditional NonMethods

Case Objectives
  

Innovative product launch marketing Marketing execution Vs Strategy Role of new Marketing Paradigms
NT ideas to break clutter  Differences in methodology NT vs. T  Understanding risks and control


The Story Behind Non-Traditional Media Non-

THEORY

The Rise of NT mediums

 

Traditional Medium: Advertising Tools and techniques developed

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


Paradigm Shift to Non Traditional Mediums

The Rise of NT Mediums



Reasons for Paradigm Shift

Rising cost of Media  Loss of control  Change in Marketing Strategy


Three main Categories

Product Placement: Control through Co-op Co Place Promotion: Control through Location  Sponsorship: Control through Patronage


DIFFERENCES

Philosophy


Traditional
      

Non Traditional
      

Disciplined Quantified Planned Budgeted Regulated Controlled Strategy led

Flexible Evolving Adaptable External control Intuitive Chaotic Execution led

Communication Process
Non Traditional Traditional
Awareness

Awareness / Visibility

Word of mouth, Buzz

Interest

Excitement

Involvement / Infatuation
Consumer Advocacy

Desire, Preference

Purchase

Purchase

Others


Credibility


NT can be more credible have more impact and more efficient when it works. NT costs can be uncertain Traditional advertising costs can be better forecasted. Can be well targeted through mass media NT relies on audience self selection Traditional advertising = measurable, reach GRP, frequency = more easily measured by market research. NT is more difficult to evaluate.

Budgeting
 

Target market
 

Metrics
 

Benefits and Risks Method used

Benefits


Credibility


Risks  Loss of control

    

More credible than paid for advertising

Efficiency through word of mouth

Focus on awareness Leverage the buzz Create Exposure Build into Conversation Weave the brand into Everyday life
 

Timing Target audience Brand Image Brand Meaning Exposure

Challenge of translating awareness into sales: Difficult to measure impact:

EVALUATION

Evaluation of Case : Parameters

BREAK

Evaluate the case

    

Strategic Significance Benefits and Risk Measuring Success Translating Excitement into Sales Post script and wrap up

Strategic Significance

SO WHAT HAPPENED?

Strategic Significance of the Launch

 

Motivate and Stimulate dealer network Expand Franchise

Underrepresented Targets  Gen X Vs Baby Boomers


Fill Capacity at new Plant

Target : 100,000 units  Initial foray into USA.


Strategic Significance of the Launch



Rejuvenate and Redefine BMW Image

Made in Germany to Made by BMW  Bavarian Mystique to American Icon  Precision Engineering to Fun to Drive


Benefits and Risks

SO WHAT HAPPENED?

Issues Faced
Typical to the Category  Loss of control
Timing  Target audience  Brand Image: Bond/BMW Grid  Brand Meaning  Exposure


 

Challenge of translating awareness into sales: The excitement/time Grid Difficult to measure impact: Success Criterion

Brand & Bond

English German Ultimate Driving Machine Fast cars Adv. Technology Sophisticated Hero Drives an Aston Sexist

Brand Dilution in Case of Movie Failure Brand Dilution due to Clutter Brand Dilution due to Negative Association

Measuring Success

SO WHAT HAPPENED?

Measuring Success: Overall

 

Phase 1 : Unqualified ingoing objectives SalesSales-Cost Ratio Questionable

Intro year exp. sales (units) Launch ad support (millions) Spend/car 1998 units (000s) 1997 units (000s) 1996 units (000s)

Z3 / Total BMW BMW Z3 9k waitlist for 3.5 months = 30,000 p.a 14,085 15,194 $20 $667

20.6 / 131.6

19.4 / 119.3

10.3 / 102.4

Land Rover Discovery Infiniti I-30

$9 $35

$667 $2304

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

9.7 / 17.2

5.3 / 11.5

Na / 6.8

Measuring Success: By NT element

Element
Neiman Marcus

Objective
WOM, Buzz  20 units over 3.5 month Christmas season
 

Reported results
100

orders placed. 2days 6000 orders by Xmas 2000 media reps attended.  # of Z3 editorials in leading publications can be counted.


Central Park event

Media exposure and Buzz

Jay Leno

WOM, Buzz

Unpredictable, all we know is it worked out very well  Role for campaign evaluation research to measure awareness impact.
  Statements like Amazing Credibility, Had 3 times the WOM of other events.  What does this mean in terms of measurable effects on sales? Local

Radio DJ

Unstated

Dealer Ad& Promo

Generate Dealer Motivation

publicity Traffic in dealerships increased (300%) 15% Recall . 50% higher than Mercedes E class launch Is that good enough


TV and Print

Reinforce

Movie placement

Success Criterion


Great Buzz !


What buzz? Quantifiable? Impact of Traditional media with comparable spend? Influence of new product introduction? Validity of Estimation?

3 Times the word of mouth



50% less than SOM/SOV rules



Dealer Traffic up


9000 cars sold Expected was 5000



Objectives and Mediums

EXCITEMENT TO SALES

Excitement to Sales


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


Mediums?

AND THEN?

Postscript


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

Cinema advertising (60 sec. Teaser placements) In flight videos targeted at business travelers. Dealer sponsored direct marketing programs Limited corporate sponsored direct marketing Dealer funded retention programs

 

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

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


Postscript


Tie up for Tomorrow never Dies



BMW cruiser bike

Awards
Promotion of the year  Marketer of the year  Brandweek : Model of effective cross promo  USA Today : Marketing Coup


Postscript


Brickbats
Went too far  Overdone  License to Overkill  James bond International Man of Sales


Types of Product placement



Corporate


Lenovo in KBC Rayban in MIB ICICI in BKC Movie promo in a serial

Generic


Service


Idea


Types of Product placement



Historic


Air India in movies

Innovation
Introducing a product  Swift in Bunty aur Babli