BMW Z3 Roadster Launch

Phase II
Kanishk Arya 0164/48 Fasil Sagir 0123/48 Kuldeep Nigam 0180/48 Gaurav Arora 0130/48 Gaurav Sushil 0134/48 Harjaspreet Singh 0140/48 Jugal Deep 0161/48 Surendra Prasad 0183/ 48 Abhishek Shinde FP/13/2011 Group 8 8/28/2011

 BMW Z3 Roadster Launch

Promote BMW as a global brand building production plant in America and delivering the same quality. To use the roadster to motivate and stimulate the dealer network to meet higher standards to qualify for the roadster To build an order bank to enable the new Spartanburg plant to build to the specifications of BMW customers Phase I

BMW Z3 Roadster Launch

Phase II
This report outlines the marketing communication plan for the phase II of the launch of BMW Z3 Roadster. It discusses the various factors in choosing a communications mix to best utilize the budget to maximize sales by increasing the reach and building relationships that lead to purchase decisions. Weve used the 6M model to formulate the integrated marketing communication program. Marketing Campaign of BMW Z3 Target Market: Demographically target segment would consist of Generation Xers interested in unique image statements, men and women in their 40s expressing or desire to have the roadster and late baby boomers. The Psychographic variables among the above segments are a lover of life mindset and a propensity to set unique expressions of individuality. Objectives Establish Z3 as an cultural icon and weave it into their American experience

Phase I of the marketing communication plan was launched in June 1995. Non-traditional media was given higher priority in marketing communication with 60% of the marketing budget allocated to it. The following are the key campaigns that took place till December 1995: The campaign with MGM was successful in building the brand equity of the BMW Z3 in association with Golden Eye. Neiman Marcus Christmas Catalogue received 6,000 orders for the 100 special edition Z3 cars offered. Incorporation of Build your own Roadster module on BMWs Website tripled hits (35000 to 125000/day). The prominent PR event launched in New Yorks Central Park generated extensive broadcast and print coverage. Successful feature on Jay Lenos Tonight Show. Radio DJ program generated three times the WOM effect of other programs and got them 6000 spots from the event.

 BMW Z3 Roadster Launch

Key learning and issues from phase I Positives: Positioned BMW Z3 as an affordable, stylish & fun to drive car Strong penetration into the American culture and attaining the position of a cultural icon Perceived as a high quality driving machine Successfully allayed the perceived doubt over capability of BMW to deliver same quality standards from its US plant as its German plant High word of mouth publicity, positive review and coverage in media Strong association with the character of Bond and related stylishness

Phase II Phase I had been a success and the response from the customers was above expectations. This was evident from bookings reaching 180% of the expectations. The car will reach the dealers in March and the marketing communication strategy until then will be a part of phase II Objectives of Phase II (Mission) Brand Reinforcement Maintaining the buzz Convert the initial excitement to purchase decision Differentiate Z3 from 5 series Rationale behind Phase II objectives 1. Brand reinforcement: Phase I was a success and 9000 booking were made which surpassed the expected number of 5000. Although this response is highly encouraging the following should be kept in mind. BMW Z3 is an innovative product which tends to get a response mainly from Innovators. Such customers are limited and in order to reach a greater number of the target market the brand needs to be reinforced. 2. Convert the initial excitement to purchase decision: Analyzing the success of phase 1 marketing communication
Cognitive From awareness to knowledge

Issues: Expected launch from other car manufacturers who were also planning to enter the Roadsters segment Possible cannibalization of BMW 5 series customers Less no of cars (145) available for display resulting in vehicle rotation among dealers for display Franchises are not of BMW quality standard and need further improvement Loss of consumer interest or buzz in market due to lag of 3 months between order and delivery Heightened customer expectations due exceptional use of nontraditional marketing

Affective From liking to conviction

Behavioral Purchase decision??

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 BMW Z3 Roadster Launch

The target audience needs to be engaged in order to build a relationship which leads to a purchase. 3. Differentiating Z3 from 5 series: BMW 5 Series revised model will be launched in April and hence the campaign will also run in parallel with the Z3 campaign. Its essential that the target segments and communication channels are well differentiated in order to ensure minimum cannibalization and also avoid confusion in the minds of the customer. Parameters Z3 5 series Target Experiencers Thinkers segment youth, gen Sophisticated Xs, 40s, Late and High self baby esteem boomers and those with a propensity to be unique Media Direct and Traditional channel experiential Media preferred marketing Product Affordable, Classy, differentiation Convertible formal Use Personal car Business for long users, luxury travel, hotels holiday resorts

Traditional versus Non-Traditional Media: The non-traditional media proved to create greater sales and also proved more effective for every dollar spent as they spent about 50% less than the Share-of-Voice/Share-of-Market rule. Therefore, due to the cost effectiveness and impact of the non-traditional methods in Phase I it is advisable to utilize the non-traditional media for marketing communications. Some of the campaigns would need to be continued in the phase II as well. However, theres need for innovation as the nontraditional campaigns from phase I would now appear repetitive and wont have the same edge. Also specific attention on to the target audience needs to be increased. Traditional media will also be used but since 5 series is more likely to benefit from it therefore lesser presence in this media will help in differentiating the two products. Non-traditional media The campaigns from Phase I that shall continue: 1. Build your own Roadster module The new campaigns that can be launched in phase II are 1. New suggested campaigns

Message 1. Adventure, exciting & fun car 2. Affordable luxury experience 3. Ultimate driving machine 4. Made in America Media
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1. Affiliation with youth icon: Contact youth focused movie director to produce 3 minute short movie on Z3 and provide these video on the webpage. This will help in reaching to the youths by connecting to renowned director and promote the same in advertisements 2. Product placement in music videos of top rock band of US and promoting the video on the web site.

 BMW Z3 Roadster Launch

3. Alliance with airlines 1. Displaying Z3 video on personal screen for business class passengers in flights 2. Promoting Z3 on the tickets of business and first class passengers 4. Alliance with elite clubs 3. Showcase of Z3 to the members of elite clubs like golf clubs, adventure clubs and derby clubs 2. Word of Mouth publicity

2. Sponsorship: Sports event like the PGA tour (golf), sailing competitions and prize for runner who completes the marathon or halfmarathon - a brand new Z3 Roadster. 3. Place the product in car review programs which are followed by car lovers 4. Online Buzz Sponsoring web events and get Z3 publicized 1. Sponsoring online gaming event 2. Sponsoring adventurous event of adventure club Display ads or microsite 1. Use of microsites or display ad on other companies websites like adventure clubs & travel portals to reach sporty and adventure enthused customer Animations on famous web pages 1. Eg. when we open msn page , first an animation on the msn page comes

BMW Z3 is targeted at those people who are image conscious. Therefore, recommendations and public opinion of the car becomes extremely important. Positive word of mouth can be achieved in the using experiential marketing: 4. Experiential Marketing 1. Create advocators: Connect with those customers whove booked the car to reinforce the feeling of taking the right decision. Invite them to join the BMW club and encourage interaction with existing BMW customers to provide a feeling of community of likeminded individuals. Send a catalogue to existing BMW customers. 2. Consumer Advisory Panel consisting of handpicked or pre-screened individuals (usually identified /segmented from existing 9000 customers database) to visit production facility, and encourage to provide feedback as well as share their enthusiasm and experience on web portal. 3. Conference: arranging discussion with BMW head designer & Z3 design team at design conference (if taking place in JanMar 96) to cater to technology enthused people 3. Events & Experience

Traditional Media 1. Advertising Print Media 1. Place the advertisement on Car magazines like Auto Sports, Motor Sports etc. 2. Advertise in travel magazines like Travel and Leisure and American Road Magazine. 3. Advertise in the sports section of the newspaper Television & Cinema 1. Advertise during popular sports, adventure programs and travel programs 2. Product placement can be done in programs which show road travel 3. Teasers of bond driving the Roadster in movie theatres

1. Partnering in sports: Participating in a sporting event like the F1, providing engines to participating team teams.

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 BMW Z3 Roadster Launch

Billboards 1. Put the billboards on interstate highways to target people who drive long distances.
Year 1991 1992 1993 1994

US (Units) 53.3 66 78 83.8

US growth 23.8% 18.2% 7.4%

Worldwide (Units in 1000)

WW growth

2. Sales Promotions Financing

1.

534.4 573.9 7.4%

Banks will promote the Z3 to high end customers through advertisement of the Z3 in bank statements in order to increase the reach and provide cheaper financing options which increases desirability. For example, high value credit card customers. Offering a cash back to banks would encourage them to promote to customers.

1995 94.5 12.8% 590.1 2.8% 1996 projected 109.2 15.6% 620.2 5.1% Exhibit 1 and derived growth parameters for 1996 car industry in US and worldwide (WW) for BMW

Using the information in exhibit 4, we estimated the following: 1. Projected advertising budget for BMW is $120.6mn in 1996. 2. Roadster launch budget is 15% of total advertising budget of 1996 which is $18.09mn. 3. Assuming that the budget for the phase II would be greater than the pro rata value as prelaunch is a critical period for the product. Therefore taking it to be one third of the total budget which comes out to be $6.03mn. Using exhibit 10 and the above results, we calculated the below mentioned projections for luxury performance segment: 1. BMW share of voice is 7.8% and share of market is 10.1%. This is a certain market advantage that BMW possesses and is a testimony of its high market visibility. 2. Estimated sales if the current buzz continues are 10,487 units. However, the conservative estimate using the phase I estimation methodology would be 5,826 units. Please find below the analytics for the above estimations:

3. Public Relations 1. Invite major news agencies and television channels to cover the events sponsored by BMW 4. Direct marketing 1. The existing BMW customers would be sent a catalogue showcasing the Z3 roadster with information on its performance and visual display in various locations 2. The BMW customers would be sent a gift on their birthdays which would be a merchandize of the Z3 Roadster and tickets to the events sponsored by BMW Money (Budget constraints) Its of paramount importance to keep the budget in mind while making the communications strategy. The campaign needs to be targeted as the product is a niche one. Mass marketing also needs to be included in the plan but is needed to be done efficiently.
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 BMW Z3 Roadster Launch

Total Media Expenditure by BMW Total Sales unit for BMW Projected Sales Expenditure per unit in Phase I Phase I target units Phase 1 advertising budget Units booked in Phase I Actual Sales Expenditure per unit in Phase 1 Phase 2 advertising budget Conservative Estimate for phase 2 booking Aggressive Estimate for phase 2 booking

$87.5mm 84501 $1035 5000 $5.17mm 9000 $575 $6.03mm 5826 10487

Using Exhibit 2 and 8 one can conclude that the success of the product placed in a movie is no dependent on the success of the movie; rather it is a function of how the product is perceived and how is it placed in the movie. Communications Evaluation The communications mix needs to be constantly evaluated and modified on the basis of sales and customer feedback. Qualitative Evaluation Taking feedback from existing buyers about their brand & product perception. Also, how did they find out about the product. Market surveys to check brand recall and brand image Quantitative Evaluation Using analytics to identify what communication mix is more effective. The effect will be evaluated on the basis of bookings and online hits.

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