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      03-09-2011, 06:16 PM   #1
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Op-Ed: "Is BMW becoming too soft?"

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Originally Posted by AutoBlog
"Happiness isn't around the corner. Happiness IS the corner." So said an ad for BMW created in 1996 for the Z3. In the TV version (see the video at the very bottom after the break), a heavy-metal music track underlined the idea, which was carried over to magazines and billboards.

I'm reminded of that ad, one of the more perfect expressions of the BMW brand I have ever seen, this week as I take in the Bavarian automaker's plan to launch vehicles powered by "alternative" powertrains under the "i" sub-brand: as in, yes, iPad, iPod, iMac. So far, I'm not hearing about Apple filing trademark infractions. It is, I believe, also "i" as i Isetta, the last time BMW brought out a mini city car. "I" for innovation probably figures into the choice, as well.

The campaign was literally meant to attract more people who were not necessarily driving enthusiasts to the brand. BMW has brand issues. Take the Super Bowl on Feb. 6. BMW ran two ads in the big game for a cost of between $5 and $6 million. One ad was to push diesel engines. Another was to push the fact that all X3 crossovers are now being built at BMW's plant in South Carolina. "Designed in America. Built in America," says the voiceover at the end of this ad. How about using the big game to push the core of your brand equity driving excitement. How about an ad that says: "aspire to own and drive this marvelous machine."

Something has gone horribly wrong at BMW. And I think I know what it is. Back in 2006, then- BMW marketing director Jack Pitney (who tragically died in 2010) shared with me a Powerpoint strategy showing how far too many people, in his mind, weren't considering a BMW because they were intimidated or otherwise put off by the performance image of the brand. It was this finding that led BMW to first do a corporate ad campaign touting BMW's independent ownership, and then the softer "Joy of Driving" campaign that ran most of last year. It was literally meant to advance a "softer side" of BMW, and attract more people who were not necessarily driving enthusiasts to the brand.

Continue reading...

BMW has grappled with an expanding brand portfolio and its own ambitions of growth for a decade and a half. BMW has long been particular about its brand equity and managing it. It has been the most hyper-focused brand in the auto industry. "The Ultimate Driving Machine" positioning dates back to when Nixon was still president. While other companies and brands waffled, wobbled and changed brand positioning as often as I change the oil in my lawnmower, there was BMW going steadily and reliably year after year. It was the envy of other companies.

It makes me wary to think that BMW is embarking on launching a new sub-brand, starting in 2013 when the first two cars hit showrooms, while it still seems to be adrift on its core brand. Mind you, I don't believe BMW executives in charge think they are adrift; perhaps, "on the wrong course" is a more apt description. In any case, they seem sure of their strategy of trying to expand the image and reach of the brand, especially in the U.S, to reflect U.S. investments, as well as what it hopes is more accessibility. You know make the BMW tent bigger for more people.

The BMW "i" brand, from what we understand, will not be like Mercedes-Benz's Smart brand. While the Mercedes star-logo is not on the golf-cart-like Smart Fortwo, BMW will have the BMW blue and white roundel on the "i" cars. I know that part of the necessity of the "i" brand is to help BMW meet tougher fuel economy and C02 standards. But I hope it does more to properly flank the BMW brand than smart has done for Mercedes.

The first vehicles will be the i3 electric vehicle and i8 plug-in hybrid. The cars will be small, front-wheel drive vehicles.


BMW i3 and i8 spy shots Click above for high-res image galleries

From what we understand, "i" will only be on the alternative drivetrain vehicles. The front-drive cars BMW is developing that won't be badged as MINIs, will, we think, have yet another brand or sub-brand.

BMW has grappled with an expanding brand portfolio and its own ambitions of growth for a decade and a half. The company has done a nice job of keeping Mini separate, while still fostering the connections between Mini and BMW under the hood and in the engineering. Rolls-Royce under BMW is hard to measure because sales are so small year to year, but the vehicles have probably come out better under the Bavarians than they would have under anyone else's ownership. I do know that the company looked at buying Volvo from Ford, but thought better of it after its disastrous acquisition of the Rover Group in the 1990s. It's hard to imagine the cultures of Volvo and BMW combining to anything good. That was a smart move. Sometimes the best deals are the ones you don't make.

Building a sub-brand for these cars may be the right way to go. But it will be good or bad in the marketing executions. And that's what worries me.

In addition to announcing the new models and new brand, BMW said that it has invested $100 million to create BMW i Ventures, a New York-based venture capital division that the company says will "significantly expand its range of mobility services over the years ahead." BMW i Ventures has purchased a stake in New York-based My City Way, which offers software providing information about public transportation, parking, and local entertainment in more than 40 cities in the United States.

I can see this Powerpoint, too, without someone actually having showed it to me. The idea is to redefine "performance" and position BMW as the vehicle that performs the best in every way; connectivity as well as driving.

BMW is starting to feel a lot like Toyota in how it goes about its business and its brand. They should be careful. While BMW is redefining performance for us according to its Powerpoint presentation, the brand still stands for, or should stand for, an exciting ride for people who love to drive. That excitement ultimately has to be in the cars and crossovers. And it largely still is despite a few misfires. But it also needs to be in the brand's ads, social media messages and the special things it does to fly its brand flag (think BMW Films).

BMW late last year parted way with its ad agency Austin, Texas-based GSD&M. Presently, the automaker is utilizing other agencies it has on its roster: Kirshenbaum & Bond/The Media Kitchen and Universal McCann. But what BMW needs, I believe, is a new ad agency of record that will, in part, challenge the assumptions about the brand that the company now embraces. With all these sub-brands showing up at a time when the BMW core brand is muddled demands a dynamic ad agency partner to help them navigate this journey.

"Joy of Driving." "Built in America." Electric front-drive city cars. BMW is starting to feel a lot like Toyota in how it goes about its business and its brand what with Toyota advertising its assembly plants and how it is working on a self-powered rollercoaster, while it forgets that it's interiors have become shockingly bad and shoddy.

I fear BMW's image is becoming watered down like whiskey at a dishonest bar, or the experience of going to a ball game in an open-air stadium without being able to fire up a cigar. The whole brand feels like it is moving to be rated PG-13. And BMW is a brand that needs a little R-rated content mixed in to stay true to what it is.

Remember. Happiness IS the freakin' corner.
http://www.autoblog.com/2011/03/09/o...oft/#continued

Wake up call BMW.
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      03-10-2011, 11:03 AM   #2
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Fat and happy is how I'd describe them. They seem to be spewing a lot of marketing smoke right now, but you don't see any real innovations in the showrooms, just more tweaks. Let's face it, they live or die by the 3 series which is aging. Their gold standard, the M3, is being matched or surpassed by a lot of recent offerings from others car companies. Forget the i-crap and marketeering. The next 3 series needs to be another home run, because right now their resting on their laurels, but you can't do that for too long these days because the US and Korean manufacters are going to take their improved game into the luruxy performance market with a vengence.
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      03-10-2011, 04:07 PM   #3
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Think BMW as the new Toyota. They have outgrown their niche market and hunger for more growth. To capture more sales they have to attack the masses and what does masses want? Performance is not on top of list, good enough is good enough, what matters more is perception of driving a luxury brand and having a better product than everyone else. There's your reason for revival of BMW marketing engine. When there's a marketing guy heading a M division you know you are in trouble.
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      03-11-2011, 03:46 PM   #4
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BMW is small potatos compared to the big boys and they would be insane to think they have the means to compete in the high volume/low margin side of the business. Remember, their top asset is their brand and that's about luxury, not economy. Where BMW is expanding agressively is in the developing world. They want to capitalize on their brand reputation among the up and coming achievers in countries like China, India, Brazil, etc. The i-car stuff are just more niches that they want to fill.

The big issue for anyone on this board is whether BMW's interest in those emerging markets will change its interest in performance. If the BMW marketeers decide that Mumbai software developers don't want high performance cars because they have no autobahns to drive on, do they shift their limited development resources into other features?
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      03-11-2011, 05:15 PM   #5
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Quote:
Originally Posted by ptack View Post
BMW is small potatos compared to the big boys and they would be insane to think they have the means to compete in the high volume/low margin side of the business. Remember, their top asset is their brand and that's about luxury, not economy. Where BMW is expanding agressively is in the developing world. They want to capitalize on their brand reputation among the up and coming achievers in countries like China, India, Brazil, etc. The i-car stuff are just more niches that they want to fill.

The big issue for anyone on this board is whether BMW's interest in those emerging markets will change its interest in performance. If the BMW marketeers decide that Mumbai software developers don't want high performance cars because they have no autobahns to drive on, do they shift their limited development resources into other features?
I would still think HP numbers would be somewhat an issue to consider, especially if developer A brags about his Audi and developer B brags about his Benz. Even if this isn't the case, BMW can probably engineer a less-than-stellar product and then get away with it in those markets (maybe a 2.5 series or so).
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      03-11-2011, 05:47 PM   #6
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I think the recent change in 3-series pricing is further proof of this. As a 6MT driver, I am legitimately pissed. If they weren't producing such a fantastic product, that alone would been enough to steer me into the waiting arms of the competition. Shun your driving-enthusiast customer base at your own risk, BMW.
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      03-12-2011, 12:09 PM   #7
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BMW is definitely diluting their brand in many ways.
Going from having great steering feel to almost none at all, making cars bigger and heavier, slapping M badge on everything and launching a million new models at once.
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      03-13-2011, 05:42 PM   #8
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"Something has gone horribly wrong at BMW. "

+1 completely agree. They are deserting their core market of "Ultimate Driving Machine" buyers in favor of catering to aging boomers with luxo-barge sedans and psuedo-"M" SUVs with large profit margins. It's profoundly dissapointing - like seeing Mozart choosing to write only TV jingles.

Where is the next light, focused sportscar in the tradition of the 2002 or M3 CSL?
Why discontinue the superb S54 motor or the v8 in the M3?


Where are the model options to order performance differentials, suspension and manual transmissions?

Porsche and Lotus, despite [dubiously] widening their product lines, have kept at least one eye on building proper affordable sports cars like the Cayman R, boxster spyder, and next-gen Elise. What's BMW going to put on the table.....the psuedo-1M ? The overweight, wobbly E89? I dont' need a diff with eleven different settings, or massage seats. I want a light, powerful, agile and refined car under $50K. The Japanese can do it. The Brits can do it. Surely the Germans can too.

I understand the need to produce 'commodity' high-volume models to fund the company. But BMW is shiny-side down if they consider the next-gen high-performance driving machines to be 'niche cars' rather than the whole reason people know the intials BMW.

If they continue on their present course of abandoning the sports-car market, the customer base will migrate swiftly to the competition, and the 'ultimate driving machine' of 2013, 14, 15, 16 will wear the Porsche shield.

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      03-13-2011, 05:49 PM   #9
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ive been saying this for years...
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      03-14-2011, 08:20 AM   #10
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All about Sales

As the saying goes, everyone has a price. BMW looks at the recent sales and how many BMWs are being sold and they thing they are doing a great job. Problem is that they are conforming too much to regular every day drivers instead of giving the ultimate driving machine which got them here in the first place!!
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      03-22-2011, 06:49 AM   #11
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Quote:
Originally Posted by M3Bahn View Post
BMW is definitely diluting their brand in many ways.
Going from having great steering feel to almost none at all, making cars bigger and heavier, slapping M badge on everything and launching a million new models at once.
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      03-22-2011, 11:12 AM   #12
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agreed
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      03-22-2011, 11:39 AM   #13
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+1 I have faith and I hope they don't let me down...


...Otherwise in a couple years I'll be hitting up the P instead of the M for my next new car.
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      03-22-2011, 01:44 PM   #14
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excellent read and viewpoint
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      03-22-2011, 01:58 PM   #15
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This is the unfortunate reality of expanding a successful business. Porsche gets away with cars like the cayman R and GT3 RS because they have HUGE profit margins in their vehicles. In an effort to increase total sales BMW is eliminating those types of models with their trademark german efficiency. And the "M" division is turning into a giant marketing machine meant to ask premium dollars for models that already make no sense in standard form (vis a vie; the X6 and 1 series coupe ).
Sadly my next car will no doubt be a Lotus or Porsche....
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      03-22-2011, 02:37 PM   #16
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I think the finest overall car BMW has made over the years is the basic 3 series sedan with a naturally aspirated I6 engine. Everyone loves them. They drive great. They do everything. They handle well, they're comfortable, they carry a lot of stuff. Hopefully BMW will continue to keep that tradition alive, even if the next gen 3 series will only have a turbo 4.

BMW Motorrad is also building awesome bikes.

M division, however, appears to have completely folded under to marketing.
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