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LAUNCHING THE BMW Z3 ROADSTER

Background:

BMW, with a view of transforming itself from a German to a global brand, planned the launch of

its new car Z3 Roadster, which would be manufactured in Spartanburg, South Carolina. This is a

major shift for BMW, as this would change the perception of the BMW brand in the market from

a product for a niche segment of Young and Upwardly Mobile Professionals (Yuppies) to a

more broad based market that consisted of affluent Americans belonging to different generations

like the Xers and Late-Baby Boomer generation which consisted of the majority of the target

segment for top end cars. BMWs other intentions included escaping the high cost environment

of manufacturing in Germany and showing that it was committed to the US market. This was

evident by the fact that BMW had invested around $600 million and was expected to increase.

The setting up of this plant marked the first step towards moving to becoming an international

manufacturer, which was its long term corporate goal. This was also a strategic move to

expanding its customer segments to include the younger and more affluent section of the society.

SWOT Analysis of the BMW Z3 Roadster

Strengths

First mover competitive advantage German innovative technology

Price advantage

Weaknesses

General perception of being a Germanand not a global brand

Complicated execution plan ofdeployment to the dealer network

Opportunities

Escaping Germanys high costmanufacturing environment

First brand of BMW that is outsideEurope

Market Penetration Increase in brand visibility

Threats

Competition from other high endbrands like Mercedes

North American government may posestringent restrictions on the GermanCompany

Us consumers may not perceive a USmade car to have the same quality as aninherently German made car

Situation Analysis:

The marketing strategy for the launch of this new BMW car Z3 roadster was carried out in two

phases: Phase 1 from the inception of this idea in 1992 to Dec 1995 and Phase 2, which was yet

to be executed from Jan 1996 to the product launch in March 1996. The Phase 1 itself was highly

exhaustive and was carried out mainly through the nontraditional methods of marketing, which

led to a phenomenal response and impact on the targeted customer segment. The product was

placed through the James Bond movie of Golden eye, which was a perfect fit for both, marketing

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the movie as well as the new Z3 roadster. Other elements of the pre-launch marketing plan

included promotion via the Neiman Marcus Catalog Offer, the Build Your Own Roadster

module on the BMW website, Press Launch in Central Park in presence of characters from The

Golden Eye, product placement on Jay Lenos Tonight Show and various Radio DJ programs,and Making of a related video Go: An American Road Story. Besides this, placement on

popular TV shows like Seinfeld, ER, 90210, popular books and magazines were also carried out.

A targeted marketing plan to rope in the dealers and eventually customers was also carried out

with phenomenal success.

Problem Statement:

The main task in front of Dr. Helmut Panke, Chairman and CEO of BMW (US) is to structure

the marketing mix in such a way that it will sustain the initial product excitement until the Z3

roadster is available in the market in March 1996.

The recommendations for carrying out the Phase 2 of the marketing plan for BMW Z3

Roadster are as follows:

Use of the Billboard sign across the major cities and financial centers to showcase the product

Mega launch of the phase II product, by tying up with prominent Auto Car shows like Top

Gear and other car review shows to showcase the features of the product. This would help

maintain the hype and aura of the campaign and will attract more prospective customers towards

the product

Since the Z3 Roadster is set up to target the young and affluent segment of the people,

advertisement should be placed in popular magazines and in niche restaurants to maintain the

interest in the product

Before the launch of the product, brand ambassadors or well-known personalities from the

field of films and sports can be brought together for a brand trial and the same can be highlighted

through the various media like print media, internet and T.V

The car brand, which is perceived as a German, can be marketed in the USA by associating

itself with the history of USA or things people perceive in the country as American. This will

help the penetration of the product in the market.

BMW should open a preorder booking and accordingly maintain the inventory of the cars.

Currently there are 345 dealers, and only 110 cars are available

They had an oral commitment with MGM about the deal in Jan 1995, but the deal was sealed in

the month of July 1995. Such a lag in finalizing a contract can give an advantage to its

competitor to get an idea about its strategy and put them on the back foot

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