[Brookside]

Zaha Hadid's BMW Leipzig Plant
BMW Targets "the Creative Class"


In the late 1990’s BMW commissioned an in-depth study of who their customer base was- in a sense they needn’t have asked. The report came back that said, in effect, that BMW had one customer- one profile.
The report went on to critique BMW. “One sausage..3 sizes” is the way they characterized the BMW line.The report also detailed a strategy that suggested if BMW were to grow it had to offer not just a wider variety of automobiles, but an array of product that appealed to different types of people. The core group that the study identified as the largest growing numbers of possible BMW customers was what sociologist Richard Florida calls “the creative class.”
The company adopted that new strategy...leading to the promotion of Chris Bangle and the introduction of a line-up that reflects not merely the latest thinking in design, but also a clearer understanding of how emotions and tastes are reflected in the things we buy.
Today BMW is beginning to publicly emphasize it’s attachment to independence and creativity in ads specifically targeted at people who value those traits. In essence- the company is assembling a synergy between the implied metaphors of it’s design signifiers to be mirrored by it’s publicly stated policy in print and television advertisements.
The Wall Street Journal published an article detailing the study’s findings in 2003. This is their most recent follow-up published today.....August 2nd, 2006. Brookside


BMW seeks 'the idea class'
Neal E. Boudette and Gina Chon, Wall Street Journal>Posted: Wed, 02 Aug 2006 07:00


Over the last five years, BMW AG had its foot pressed hard on the gas, increasing sales in the U.S. by 62%, a rate that has outpaced just about every other auto maker. Now the German company is making a bold move in hopes of maintaining its breakneck pace.

For well over a decade, BMW has focused its marketing almost exclusively on its cars' German engineering and technical sophistication, and targeted its message to one very specific customer group -- upscale auto enthusiasts.

In a break with that formula, the company is promoting a corporate culture of independence and innovation. One advertisement in a new campaign that has turned heads in the auto industry highlights the design by architect Zaha Hadid that BMW chose for a striking glass-walled factory in Leipzig, Germany.
BMW hopes the approach will broaden its position in market share and appeal to a group the company calls "the idea class" -- upscale car-buyers who are swayed more by artistic values than horsepower.



Jenny Holzer's BMW Art Car

Despite its aesthetic nature, the effort is all about business. BMW needs to fend off rising competitors like Nissan Motor Co.'s Infiniti brand and the Acura unit of Honda Motor Co. that offer credible performance vehicles for far less money. The company also aims to grab a bigger share of the U.S. market as part of an ambitious global plan to increase sales of BMW-branded vehicles to 1.6 million a year by 2010, from just over one million this year.

"Our opportunity to grow exists in the U.S.," says Tom Purves, chief of BMW's North American sales arm, noting the company has less than 2% market share in the U.S. -- about half its share in Western Europe and well below the roughly 10% it has in Germany.

"Why can't we sell more in the U.S.?" Mr. Purves says. "If we doubled our market share, that's a huge volume increase for us and that's what we have in Europe. We thought that was possible, but we had to think about it in a different way."

BMW's new direction reflects the intensifying competition in the luxury-car segment, a key battleground that generates a big chunk of the industry's profit.

The baby-boom generation, which is now in its peak earning years, will drive increasing sales of luxury cars for the next several years, says Michael J. Jackson, chief executive of AutoNation Inc., the nation's largest chain of auto dealerships. "Luxury cars will be a crucial high profit opportunity."

BMW's shift in direction began last year, after an internal study revealed 1.9 million consumers bought luxury cars in 2004, and 1.4 million of them didn't even consider BMW. Of those, about 600,000 said they were looking for cars that are fun to drive -- which should be BMW's forte. "That is low hanging fruit," says Jack Pitney, BMW's head of marketing in the U.S.

Instead, many of these buyers ended up choosing Saab, the Swedish brand of General Motors Corp., or the Japanese luxury brands Infiniti, Acura and Toyota Motor Corp.'s Lexus unit.

One reason these buyers overlooked BMW is that they know little about the brand. Steven Bennett, an optometrist who owns two busy vision centers in Ann Arbor, Mich., admits he likes a car with some kick. "I like power. I like being first off the line," he says. He drives a Lexus LS430, which he bought in 2002 for $54,000. When he bought the car, BMW never crossed his mind. "I've never driven one. I've just never given them a thought."

Mr. Pitney says BMW realized it had to do a better job of reaching out to customers like this. Last fall it decided to switch advertising agencies and chose GSD&M, an Austin, Texas, agency. GSD&M suggested BMW target the wealthy group of high-achievers author Richard Florida described in his recent book, "The Creative Class."


This "idea class" is made up of self-motivated architects, professionals, innovators and entrepreneurs, and numbers about 1.5 million people. They typically are not car nuts although they buy luxury automobiles. They prize innovation, authenticity and, above all, independent thinking.

To appeal to them, GSDM crafted a series of ads to show that these values also run deep in BMW's corporate culture. "BMW is known for performance but there's so much more to this company," said Lee Newman, an agency executive who works on the BMW account.

One ad listed other luxury brands and their corporate parents, suggesting rivals like Cadillac and Acura have to make compromises to cooperate with their mass-market sister brands, Chevrolet and Honda. The ad showing the Leipzig plant asked, "Would a parent company let us build this?"

The ads are intended to say that BMW, as an independent company, can put its ideas into reality, Mr. Purves says. "It should appeal to the idea class that we are independent, that we are free to do something."

Going beyond straight advertising, BMW recently said it is now sponsoring a PGA Tour golf tournament that will be called the BMW Championship, one of four tour playoff tournaments. The golf sponsorship completes BMW's three-pillar sports strategy, which also includes sponsorships in Formula One and the America's Cup. The BMW golf tournament will be held at golf courses in Chicago and other cities in the Midwest, where BMW hopes to increase sales, Mr. Purves says.