Transcript BMW Z3 - Faculty Directory | Berkeley-Haas

BMW Z3
Summary and Answers
Ganesh Iyer
1
Benefits and Risks of Non Traditional Marketing
Benefits

Credibility
»

More credible than paid for advertising
Efficiency through word of mouth
»
Leveraging the buzz
Risks

Loss of control
»
»
»
»
German
Ultimate
Driving
Machine
English
Fast cars
Adv.
Technology
Hero
Sophisticated
Drives an
Aston
Sexist
Timing
Target audience
Over what is seen
Over what is said

Challenge of translating awareness into sales

Difficult to measure impact
Ganesh Iyer
2
How does NT work?
Awareness
Awareness / Visibility
Word of mouth, Buzz
Excitement
Interest
Involvement / Infatuation
Consumer
Advocacy
Purchase
Desire, Preference
Purchase
• Focus on awareness
• Leverage the buzz
• Cannot fully control what is said and to whom
• RELIES ON AUDIENCE SELF SELECTION
Ganesh Iyer
3
Traditional versus Non Traditional

Credibility
» NT can be more credible have more impact and more efficient when it
works.

Budgeting
» NT costs can be uncertain
» Traditional advertising costs can be better forecasted.

Target market
» Traditional advertising can be well targeted through mass media
» NT relies on audience self selection

Metrics
» Traditional advertising = measurable, reach GRP, frequency = more easily
measured by market research.
» NT is more difficult to evaluate.
Ganesh Iyer
4
Products best suited for NT marketing

Stage in product life cycle
» May work well for product launches in conjunction with mass media
advertising

May work better for social products
Ganesh Iyer
5
Success of NT
Comparative performance
Intro year
exp. sales
(units)
BMW Z3
Launch
ad
support
(millions)
Spend/car
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
Ganesh Iyer
6
Success of NT Elements
Some examples
Element
Objective
Reported results
Neiman Marcus

WOM, Buzz
 20 units over 3.5 month
Christmas season

Central Park event

Media exposure and Buzz

Jay Leno

WOM, Buzz

Radio DJ
Unstated
After 2 days, 100 orders placed.
 By Christmas 6000 orders
2000 media reps attended.
 # of Z3 editorials in leading
publications can be counted.
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?

•Always try to specify quantitative objectives for each element to the extent possible
• Important role for campaign evaluation research to understand the sales impact of these programs.
Ganesh Iyer
7
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 to maintain interest of
people on waiting lists.

Launch date March 1996. Selling price in 1997 = 30k to 36k.
Ganesh Iyer
8