An Emerging Marketing Success_Nipuna

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An Emerging Marketing Success

BMW i Series

BMW, Mercedes-Benz, Porsche, Volkswagen

and Audi; all giants; all German; and it is all

about prestige.

A formally harmonious product needs no

decoration; it should be elevated through pure

form once said by Ferdinand Porsche, who

designed the first ever electric-hybrid car in

1901! His view exactly describes why giants try

to preserve its core values.

Are you familiar with Bayerische Motoren

Werke? No? Does BMW sound familiar

then? Founded in 1916,

BMW is a German

automobile, motorcycle

and engine

manufacturing company.

Despite its success as a

premium brand in

market, they have

approached a niche

market which was not

addressed by many.

The BMW-iis a sub-brand of BMW founded in

2011. It was implemented to design and

manufacture electric hybrid vehicles having

believed that electric cars will replace their

gasoline counterparts in the very near future.

The i3 all-electric car and the i8 plug-in hybrid

concept versions were shown at the 2009

Frankfurt Motor Show. Retail sales began inSeptember 2013.

There was a need for electric cars in the recent

past and hence a demand was created. There

were a number of electric hybrids and plug-in

hybrids available at the market, but not an

electric supercar. They have positioned their

innovation-driven i8 in a niche market with rich

customers. BMWs reputation is that they offer

more than expected from the customers; of

course, at a premium price.

The BMW-i is the first mass produced electric

car to be developed from scratch. What has

happened earlier is that electric cars have been

developed upon technologies and platforms

built by the predecessors. BMW set up a

separate business unit to develop the BMW-i. It

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is supposed to eliminate the perception among

the public that BMW is specialized in gasoline-

based high performance cars; a key decision to

make a breakthrough in the electric car market.

Uwe Dreher, the head of marketing for the

electric car says that this was necessary in case

traditional engineers unintentionally sabotaged

the project. Further he said[1] that, "What

would have happened is when technical

development has been concentrated for 40 to

50 years on the internal combustion engine, it

gives everyone security, It's a human condition

to be afraid when people face new things and

have no experience out of their comfort zone

Capturing the market over public perception

was a major concern for BMW since it was their

first ever electric vehicle and it was to be a

multi-billion dollar development project. The

series-i has been implemented as a sub brand

for the redundancy to provide the comfort to

the buyer to ensure that it is highly specialized

project for electric vehicles and not just a try-

out. This marketing approach of BMW shows a

real intent to succeed through this project.

"We are owned by a family that wants to have

this company healthy in 20 years, and is not

sucking out the profits every year but invests for

the long term and is prepared to harvest profits

in the future,"the head of marketing says.

Sustainable innovations have emerged through

the bottom up development. The vehicle is

manufactured from carbon-fibre, which

according to BMW reduces its weight largely

adding value. The battery is fitted under the

seats to lower the center of gravity. BMW-I is

advertised for its light-weightiness. [2]

One of the best marketed concepts of the car is

its eco-friendliness. It is obvious that since it is

an electric hybrid, eco-friendliness comes in to

the scene. Hence to enhance that perception,

FSC-certified eucalyptus wood has been used in

the interior, the leather has been naturally

tanned using olive oil, and some parts are made

from natural fibres rather than plastic.

Since the body of the car uses much carbon

fibre, a lot of energy is being consumed. The

fibreglass factory uses 100% renewable energy.

The production plant uses 50% less energy and

70% less water. 95% of BMW-i materials can be

recycled. Batteries can be used as temporary

storage for renewable powerplants. These

enable to market the green-tag of the i series.

With the green tag, it is now coming to a level

where the wealthier consumers see electric cars

as a status symbol.

"For us, there are different levels of payback.

We maintain our image as an innovative car

manufacturer which guarantees a premium

price. We also have the advantage of

developing future technologies that we would

have to invest in later anyway, and there is an

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advantage to being first."explains the director

of marketing.

Electric car sales increased almost 3 times each

year recently and hence the vacuum was

identified.

Since Kodaks marketing myopia dilemma, the

established industries seek the need of

transition to a disruptive technology. Since it

has addressed a new dimension of the market,

the i3 is bringing in a whole lot of first-time

BMW customers. In fact, it is said that 80% of

BMW i3 buyers came to BMW from other

brands.

It is identified that the frontrunners who initiate

the technologies make the best profits in most

cases. Take the examples from Toyota in

gasoline-hybrid vehicles or Google in search

engines or Microsoft in operating systems or

apple in all their recent products; likewise in

this area, BMW has the opportunity to tackle

the targeted market and segment accordingly.

In finding the right marketing mix, it is not just

where you sell and to whom. The numbers you

sell also comes in to the equation. They have an

aim of selling 100,000 electric vehicles by 2020.Considering the market niche theyre

addressing the target might sound just fine. But

recent data has shown otherwise. The waiting

lists for i8 have exceeded 10 months.

The reputation is already with the brand. The

niche market theyve targeted has a high buying

capacity. The BMW i8 is their most expensive

model up to now and still it has managed to

attract many customers without any trouble

with a starting price of 100,000 pounds in UK.

Just 49 g/km of CO2emission which qualifies the

BMW i8 for an exemption from Londons

congestion charge shows their approach to the

able high-end market with green-consciousness.

In a quite unusual way, this has been identified

as an important factor in purchasing i8. Buyers

have said we really dont want to pay

congestion charge which is nothing compared

with the price of the car. Hence it can beidentified that societal marketing concept is

optimized by BMW with the green-tag of the i-

series.

BMW i-series is becoming a success in electric

car market day by day. It will not be long you

see an i8 on your subway or probably in your

own garage here in Sri Lanka.

- Nipuna Lakmal Weerakkody

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Reference

[1]http://www.theguardian.com/sustainable-business/blog/bmw-i-scale-up-electric-vehicle-market

[2]http://www.youtube.com

http://www.auto-types.com/autonews/bmw-i8-huge-success-on-uk-market-waiting-lists-exceed-10-

months-12003.html

http://evobsession.com/will-bmw-lineup-boost-bmws-market-share/

http://www.bmw.com/com/en/newvehicles/i/i8/2014/showroom/index.html

http://www.academia.edu/4301292/Analysis_of_BMW_E-Marketing_Strategies

http://www.slideshare.net/ashishtomar3/bmw-marketing

http://www.brainyquote.com/quotes/authors/f/ferdinand_porsche.html

http://en.wikipedia.org/wiki/Hybrid_electric_vehicle

http://en.wikipedia.org/wiki/BMW

http://en.wikipedia.org/wiki/BMW_i

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http://www.auto-types.com/autonews/bmw-i8-huge-success-on-uk-market-waiting-lists-exceed-10-

months-12003.html

http://evobsession.com/will-bmw-lineup-boost-bmws-market-share/

http://www.theguardian.com/sustainable-business/blog/bmw-i-scale-up-electric-vehicle-market

http://www.bmw.com/com/en/newvehicles/i/i8/2014/showroom/index.html