BMW the company and its products

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BMW Brand Study

We found this study most informative and provides some great insight into how a great brand should be manged, nurtured, and avoid the need for major rebranding efforts (keep up to date - check out our Blog for info on the auto industry)

BMW: "Newness" and the Product Life Cycle

"We're fortunate right now at BMW in that all of our products are new and competitive," says Jim McDowell, vice president of marketing at BMW, as he explains BMW's product life cycle. "Now, how do you do that? You have to introduce new models over time. You have to logically plan out the introductions over time, so you're not changing a whole model range at the same time you're changing another model range." BMW's strategy is to keep its products in the introduction and growth stages by periodically introducing new models in each of its product lines. In fact, BMW does not like to have any products in the maturity or decline stage of the product life cycle. Explains McDowell, "If a product is declining, we would prefer to withdraw it from the market, as opposed to having a strategy for dealing with the declining product. We're kind of a progressive, go get 'em company, and we don't think it does our brand image any good to have any declining products out there. So that's why we work so hard at managing the growth aspect."

BMW - THE COMPANY AND ITS PRODUCTS

BMW is one of the preeminent luxury car manufacturers in Europe, North America, and the world today. BMW produces several lines of cars, including the 3 series, the 5 series, the 7 series, the Z line (driven by Pierce Brosnan as James Bond in Goldeneye), and the new X line, BMW's "sport activity" vehicle line. In addition, BMW is now selling Rovers, a British car line anchored by the internationally popular Land Rover sport utility vehicle, and will begin selling Rolls Royce vehicles in 2003. Sales of all the BMW, Rover, and Land Rover vehicles have been on the rise globally. High-profile image campaigns (such as the James Bond promotion) and the award-winning BMW website (where users can design their own car) continue to increase the popularity of BMW's products. PRODUCT LIFE CYCLE BMW cars typically have a product life cycle of seven years.

To keep products in the introductory and growth stages, BMW regularly introduces new models for each of its series to keep the entire series "new." For instance, with the 3 series, it will introduce the new sedan model one year, the new coupe the next year, then the convertible, then the station wagon, and then the sport hatchback. That's a new product introduction for five of the seven years of the product life cycle. McDowell explains, "So, even though we have seven-year 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 Britain 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 liters 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 don't 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 didn't fit with the sedan-oriented 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 THE PRODUCT THROUGH THE WEB - REBRANDING FOR THE WAVE OF THE FUTURE

One of the ways BMW is improving its product offering seven further is through its innovative website (www.bmwusa.com). At the site, customers can learn about the particular models, e-mail questions, and request literature or test-drives from their local BMW dealership. What really sets BMW's website apart from other car manufacturers, though, is the ability for customers to configure a car to their own specifications (interior choices, exterior choices, engine, packages, and options) and then transfer that information to their local dealer. As Carol Burrows, product communications manager for BMW, explains, "The BMW website is an integrated part of the overall marketing strategy for BMW. The full range of products can be seen and interacted with online. We offer pricing options online. Customers can go to their local dealership via the website to further discuss costs for purchase of a car. And it is a distribution channel for information that allows people access to the information 24 hours a day at their convenience."