brandauditbmw (1)

8/3/2019 brandauditbmw (1)

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Haris Fazlani

BMW Brand Audit

Product and Brand ManagementTR 2:30PM to 3:45PM

Julie Haworth

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Brand Inventory

For the past five years, BMW has shown up in the top 20 of Business Week ’s Top100 Global Brands list. As a perennial showcase of how a company should be run, BMWhas retained profitability for the last few decades, with virtually no bumps in their public

relations record.Most people are unaware that BMW started as a manufacturer of aircraft enginesin 1913. It wasn’t until 1918 that the “Bavarian Motor Works” moniker came about, andshortly after World War I, BMW began making motorcycles, and 1928 marks the beginning of BMW as a car maker. The rest is history.

BMW Brand AuditBrand Elements

The BMW Roundel

“The Ultimate Driving Machine” Slogan

The “JOY” Slogan

The “M” logo, for the Motorsport division

The “EfficientDynamics” Slogan

Inherent product qualities include an emphasis on driver involvement and joy, anear perfect weight distribution over the front and rear axles, and a commitment toefficient dynamics. BMW markets their products worldwide.

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BMW Products

1 Series $29,450 to $40,650

3 Series $33,650 to $58,700

5 Series $44,550 to $66,200

6 Series $78,450 to $85,550

7 Series $70,650 to $137,000

X3 $36,750 to $41,050

X5 $46,300 to $58,900

X6 $57,000 to $88,900

Z4 $46,500 to $61,550

M3 $55,400 to $67,050

M6 $102,350 to $108,150

X5/X6 M $85,700 to $89,200

Competition

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Mercedes-Benz

Mercedes-Benz is the closest competitor to BMW because it is also a perennialall-star of the aforementioned Top 100 Global Brands list, and matches up with BMWalmost perfectly, model for model. Benz is one of the most flexible manufacturers in

history. It has smaller entry-level models, such as the C-Class, which rivals the 3 series,and also makes large executive chauffer cars, such as the S-Class, which is in directcompetition with the BMW 7 series. This is where the similarities end.

Mercedes-Benz has a long and prestigious history as a carmaker of reliable,comfortable, and technologically advanced automobiles. They were the first to implementkey features which are prominent today in all cars, such as the seatbelt, cruise control,and satellite navigation. Although they have a rich motorsport heritage, their road cars are built primarily for comfort and reliability. BMW, on the other hand makes driving pleasure its first priority. BMW’s engineers make sure that each vehicle that rolls out of the headquarters in Munich, Germany, is perfectly balanced, adequately powered, andgeared towards thrilling the driver every time he or she takes the wheel.

AudiArmed with a new design philosophy, Audi has significantly increased its market

share in the last five years. Like Mercedes-Benz, Audi matches up with BMW extremelywell. Among enthusiasts, Audi always seems to be playing catch up in the performanceluxury segment, where BMW is the clear leader. The greatest difference between the twoGerman marques is the driving dynamics, thanks largely in part to Audi’s Quattro all-wheel-drive system, that is often more usable in adverse weather conditions.

One area where BMW has not yet spawned a competitor for Mercedes-Benz andAudi, is the ultra-high performance (above $150,000) category where the Mercedes-BenzSLS AMG (pictured above) and the Audi R8 5.2 (below) obtain rave reviews from allsources. The BMW faithful are patiently awaiting an appearance of a competitor for thesemachines, although it is unlikely BMW plans to fulfill these wishes, as theEfficientDynamics team is more concerned with using alternative fuels to achieve high

performance.

Brand Consistency

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BMW retains brand consistency throughout its brand range. The M Division ismarketed as an in-house tuning specialist that takes normal BMW cars and makes themfaster and more enjoyable. Each car throughout the brand range carries the BMWRoundel and is marketing in a similar fashion, using the EfficientDynamics moniker to

promote the fact that an enjoyable driving experience does not have to come at the cost of our environment.In addition to the BMW brand, the BMW Group also owns Rolls-Royce and the

Mini brand. Although neither of the brands are marketed as being a part of BMW itself.Mini is marketed as a small, sporty and quirky brand that creates fuel efficient vehiclesthat stay true to their British bloodlines.

Rolls-Royce is another British brand with a deep seated history in classy excess.They build vehicles strictly for the extremely wealthy, with cars ranging from the entrylevel Ghost at $350,000 to the Phantom Drophead at $412,000. They are marketed assuch, with no money wasted on direct commercials or magazine ads. The Rolls-Roycecars are characterized by the “Flying Lady,” the bowing angel that protrudes form thehood.

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Strategic Marketing Coverage and/or Brand Redundancy

BMW does a good job of covering the vast market of automobiles from small fuelefficient vehicles to large gas guzzling luxury barges. BMW actually plans to bring asmall front wheel drive vehicle into their own lineup to slide in beneath the 1 Series to

bring down their average brand fuel consumption and emissions ratings. As the worldturns more towards smaller, more efficient vehicles, this it is definitely in BMW’s bestinterest to adopt the market quickly so it can continue its role as a pioneer for drivingdynamics among its peers.

If there is any redundancy in BMW’s lineup, it is in the crossover and/or SUVmarket. BMW has the X3 which is a small crossover activity vehicle, the X5 which is justa bigger version of the X3, and the X6 which is a sort of sports activity “coupe.” Inaddition to these, BMW also plans to slate a smaller, more efficient “X1” underneath theX3. This introduction of many different SUV models from a manufacturer thatspecializes in sedans is unnecessary, and it may just cause confusion and productflooding within the market.

Brand Value

This has been a mixed year for BMW in terms of brand value. Although there is arecession, and the first things to be cut in times like these are luxury items, BMW hasremained strong through impressive Warranties, Free-Maintenance periods, and winningcustomer service. Thus, this past April (2010) BMW Auto Group has surpassed ToyotaMotor Corporation as the most valuable worldwide automotive brand, with a net worth of $21.82 billion. This is despite a 9% drop from 2009 to 2010, whereas Toyota dropped29% in the same time frame because of the recalls and bad publicity the brand wasreceiving. Porsche and Mercedes also saw significant drops in their value, with Porschetaking the majority of the hit. After a staggering 31% drop, they found themselves in fifth place. In this sense, even though their brand value decreased this year, BMW was able tosneak ahead and take first place among the world’s elite automobile manufacturers.

Top 10 Most Valuable Auto Brands in 2010

1. BMW - $21.82 billion

2. Toyota - $21.77 billion

3. Honda - $14.30 billion

4. Mercedes - $13.74 billion

5. Porsche - $12.02 billion

6. Nissan - $8.61 billion

7. Ford - $7.04 billion

8. VW - $6.99 billion

9. Audi - $3.62 billion

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10. Renault - $3.26 billion

Brand Explanatory

BMW’s Headquarters in Munich, Germany

I came across a Case Study done by Pearson Education on the BMW brand. Oneof the most interesting was:

“BMW is very clear about its targeting. It only targets the premium-priced

cars and does not strive to compete in every segment of the auto industry. It avoids

the high-volume market of middle-of-the-road vehicles and focuses strictly on the

luxury sector. The Mini, for example, is smaller than a Honda Civic, but is priced at

about $3,000 (€2,300) more. This strategy has made BMW, despite its relatively

small size, one of the world’s most profitable car makers.”

The acquisitions of Mini and Rolls-Royce allow BMW to enter far reaches of different automotive markets without actually diluting its core brand values. BMW doesits best to analyze its customers and cater to its enthusiasts, an example of which is theBMW 1 Series M Coupe, which is a limited run model aimed only at enthusiasts who

crave a pure BMW driving experience in a compact vehicle. Unfortunately I could notget an audience with any BMW executives to further this research.

Qualitative Research

I was able to conduct a few surveys with my immediate peers and personal friendsto measure the depth and breadth of brand awareness and associations that BMW retains.All five of my respondents were able to recognize the BMW roundel as their officiallogo, and four out of five recognized the “Ultimate Driving Machine” slogan. Three outof the five recognized the “M” logo for BMW Motorsport. Words that respondentsanswered with most often when I asked them what they thought of when BMW came to

mind were “high performance,” “luxury,” and “pretentious.”

The last word there leads us into the brand beliefs and overall attitudes. Generally,BMW drivers are either looked at as driving enthusiasts, or road huggers, or both.Although one may think this affects BMW’s brand equity negatively, it does not seem tohave an effect on their actual value. BMW is associated with high society and a sort of arrogance, but that does not stop people from buying, and wanting to buy their products.

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On the basis of its packaging and the way the features are laid out on the websiteand in the physical vehicle, BMW is very competent and second only to Audi’s interior quality and materials. The layouts for BMW products are simple and intuitive for themost part, to promote ease of use. The element that symbolizes and sums up the brand asa whole would be the BMW roundel logo. The logo has evolved over the years very

slightly but overall looks almost identical to the very first roundel, derived from a photoof a spinning airplane rotor. The logo represents a higher standard and quality of products, made with care and made to thrill the driver and passengers.

The desired brand image of BMW should move slightly to a more accessibleaudience. BMW still wants to maintain a sense of luxury and exclusivity, but puttingmore effort into entry-level products would expand their already extensive empire.

The Points of Difference, which consumers strongly associate with BMW over other brands is the performance aspect of each and every car BMW makes. From theentry-level small cars to the massive limousine sedans, each BMW is made with near perfect weight balance and ample power so that each individual car is engaging to drive.Consumers know that BMWs are not just used to mundanely get from Point A to Point B, but to have as much fun during the journey. This sort of attitude is not present withBMW’s closest competitors.

The Points of Parity, which are not necessarily unique to BMW, include theinterior quality, the exclusivity and prestige that come with each product, and the abilityto be a status symbol. Untrained consumers would have a hard time telling you thedifferences between a similarly sized and matched up line of Mercedes-Benzes, Audis,and BMWs.

Regarding new brand associations, as mentioned before it would be good for BMW to expand to a lower price market, if not with their own brand, then with a new brand. They have Mini, but Minis carry a heavy premium over other compact cars. Byacquiring another low market company underneath Mini that manufactures compact, fuelefficient vehicles, BMW could expand its demographics and further tighten its hold onthe global automotive market, in the same way Mercedes-Benz is associated with theSMART cars.

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