1. Presented By: Matt Lee Jared Collins Marc Norsen Eric Rowe Steven Pfefferle Duran Keller

2.  Ultimate Driving Machine Campaign  This campaign tried a duel positioning of prestige & performance  Targeting  Young urban professionals  Affluent and stylish, without a conservative image  The Dark Years  BMW became an image as a “yuppie car”  Toyota created the luxury line Lexus  Nissan created Infiniti

3.  The 1990’s  BMW introduced the 325i sedan, 740i sedan  BMW also began an aggressive pricing strategy  New Advertising  The main image of the brand was the same  Exciting luxury car  Same target market

4.  Company  Background  Bayeriche Motoren Werke (AG) founded in 1916 as aircraft engine manufacturer  Munich-based BMW produced first automobile in 1929  In 1980’s, the company’s position in luxury/performance segment of global automotive market has been established

5.  Objective  Organization specific  Profit organization  Time horizon specific  Short-term objectives  BMW Films brings creative advertising strategy  Long-term objectives  Introduce a number of new models in core series  Aggressive pricing strategy  Reorganize its dealer network

6.  Resources  Hollywood Directors: John Frankenheimer, Ang Lee, John Woo, Wong Ker-Wai, Guy Ritchie, and Alejandro González Iñárrita  Actors: Clive Own, Mickey Rourke, Madonna, Don Cheadle, and Stella Skarsgaard, Marilyn Manson  Costs  BMW Films Production Costs: $15 million  Media Expenditures: $62.4

7.  Company Fit  Sedans, coupes, convertibles, sport wagons, roadsters, sport utility vehicles  Collaborators  Distribution channel: internet, movies, television  Supply chain: Dealerships

8.  Customer  Target Market  Approx. 46 year old, well educated married males with a median income approx. $150,000  2% market share in U.S., 7% in Germany, 5% in rest of Europe  Growth of 40%, to 300,000 cars per year  Consumer Behavior  Customer’s have a degree of loyalty  Start with the smaller cheaper cars when they are younger  Progress to bigger, more expensive cars as they age  85% of BMW purchasers used the internet before purchasing their BMW.

9.  Competition  Who: Luxury vehicle manufacturers  Acura, Audi, Infiniti, Jaguar, Lexus, Mercedes, Porsche, Saab, Volvo  How Many  These nine companies  Makers who also have luxury models, including Cadillac, Ford, Lincoln, etc.

10.  Current 4P Decisions  Product  Entry Level Sedan: 325i  Mid-Level Sedan: 530i  Flagship Sedan: 740iL  Featured Vehicle in BMW Films:  M5, 740iL, 540i, X5, Series 3 coupe and Z3

11.  Price  Entry-Level Sedan: $27,635  Lower than the average price of the 10 companies profiled at $28,435  Lower than the median price of $27,815  Mid-Level Sedan: $40,045  Lower than the average price of $40,517  Higher than the median price of $39, 263  Flagship Sedan: $67,545  Higher than the average price of $64,974 (9 companies profiled, Saab excluded)  Equal to the median price of $67,545

12.  Promotion  BMW spent $62.4 million on media expenditures, third lowest amount of out 10 companies  BMW ranked second in sales with 213,127 units to Lexus’ 223,983.  Lexus’ media expenditure of 187.3 is more than three times the amount BMW spent in 2001  Place  Available for sale in 150 countries worldwide  340 dealerships in United States

14.  Possible Reactions  Toughest Competitor  Lexus was the only manufacturer with more sales in units than BMW  Mercedes stole the most business from BMW  “Out of the 100% of BMW customers who disposed of their BMWs and purchased a non-BMW car in the luxury automobile segment, 37% replaced their BMW with a Mercedes, whereas 12% replaced their BMW with a Lexus”

15.  Expected Future Actions  BMW must focus to equal if not better the standards of Mercedes in order to retain their market share  Entry  The marketing decision to make BMW Films was an unprecedented move for an automotive company, with a high-risk investment of $15 million  The results were staggering, with sales booming 17.4% in 2002

16.  Non-Traditional  BMW had a relatively small budget for advertising and marketing.  “Golden Eye”  Situational  They were not going to introduce any new products and wanted to launch a campaign to let people know what BMW was all about.

17.  BMW Films  BMW decided to get Hollywood’s best and brightest directors to pick from 15 scripts to create a 6-9 minute film.  Risk  Reward  Target  The target was young professionals in urban areas. BMW produced print ads, posters and TV trailers all modeled after a feature film

18.  Existing Films  BMW could have built on the success of the films and just expanded their audience  Theater films  Distribute DVDs  BMW as a low budget advertiser  In 2001 BMW had media expenditures of $62.4 Million  8 out of 10 comparable manufacturers  In 2001 BMW had total sales of 213,127  2 out of 10 in total sales

20.  Additional Films  90% of visitors to the site requested more films.  Stars were willing to feature in more films, including Don Cheadle  Films popularity began to flourish through word of mouth which would continue the success of the campaign  The films focused on the performance of the vehicles  Showed action shots, which attracted the BMW customer  Feature Length Film  Too expensive and similar to the Bond films

21.  Continue to produce a second set of films to capitalize on the success and the buzz from the first set.  These films should use the character of the driver (Clive Owen) to show the swagger and attitude of the BMW.