Page 262 - Marketing Management

IDENTIFYING MARKET SEGMENTS AND TARGETS | CHAPTER 8 239

design in the inner ring, was trademarked in 1917 and growing families, so BMW created a high-performance
meant to show the colors of the Free State of Bavaria, luxury SUV. BMW refers to its SUVs as sport activity
where the company is headquartered. vehicles in order to appeal even more to these active
BMW’s growth exploded in the 1980s and 1990s, consumers.
when it successfully targeted the growing market of baby BMW created the lower-priced 1 Series and X3 SUV
boomers and professional yuppies who put work first and to target the “modern mainstream,” a group who are also
wanted a car that spoke of their success. The result: sporty family-focused and active but had previously avoided
sedans with exceptional performance and a brand that BMWs because of the premium cost. The 1 Series
stood for prestige and achievement. The cars, which came reached this group with its lower price point, sporty
in a 3, 5, or 7 Series, were basically the same design in three design, and aspiration to own a luxury brand. The X3 also
different sizes. The 1980s was also a time when yuppies hit home with its smaller, less expensive SUV design.
made Beemer and Bimmer, slang terms for BMW’s cars BMW introduced convertibles and roadsters to target
and motorcycles, popular names that are still used today. At “post-moderns,” a high-income group that continues to
the turn of the century, consumers’ attitudes toward cars attract attention with more showy, flamboyant cars.
changed. Research showed that they cared less about the BMW’s 6 Series, a flashier version of the high-end
bragging rights of the BMW brand and instead desired a va- 7 Series, also targeted this group.
riety of design, size, price, and style choices. As a result, the BMW uses a wide range of advertising tactics to
company took several steps to grow its product line by reach each of its target markets but has kept the tagline
targeting specific market segments, which resulted in “The Ultimate Driving Machine” for over 35 years. During
unique premium-priced cars such as SUVs, convertibles, that time, U.S. sales of BMW vehicles have grown from
roadsters, and less expensive compact cars, the 1 Series. 15,000 units in 1974 to approximately 250,000 in 2009.
In addition, BMW redesigned its 3, 5, and 7 Series cars, BMW owners are very loyal to the brand, and enthusiasts
making them unique in appearance yet remaining excep- host an annual Bimmerfest each year to celebrate their
tional in performance. BMW’s full range of cars now include cars. The company nurtures these loyal consumers and
the 1 Series, 3 Series, 5 Series, 6 Series, 7 Series, X3 SUV, continues to research, innovate, and reach out to specific
X5 SUV, X6 SUV, Z4 (Roadster), and M. The redesign of the segment groups year after year.
7 Series, BMW’s most luxurious car, targeted a group called
“upper conservatives.” These wealthy, traditional con- Questions
sumers traditionally don’t like sportier cars, so BMW added
1. What are the pros and cons to BMW’s selective target
an influx of electronic components such as multiple options
marketing? What has the firm done well over the
to control the windows, seats, airflow, and lights, a push-
years and where could it improve?
button ignition, and night vision, all controlled by a point-
and-click system called iDrive. These enhancements were 2. BMW’s sales slipped during the worldwide recession
created to add comfort and luxury and attract consumers in 2008 and 2009. Is its segmentation strategy too
away from competitors like Jaguar and Mercedes. selective? Why or why not?
BMW successfully launched the X5 by targeting “up-
per liberals” who achieved success in the 1990s and Sources: Stephen Williams, “BMW Roundel: Not Born from Planes,” New York Times, January 7,
had gone on to have children and take up extracurricular 2010; Gail Edmondson, “BMW: Crashing the Compact Market,” BusinessWeek, June 28, 2004;
Neil Boudette, “BMW’s Push to Broaden Line Hits Some Bumps in the Road,” Wall Street Journal,
activities such as biking, golf, and skiing. These con-
January 10, 2005; Boston Chapter BMW Club Car of America, boston-bmwcca.org; bmw.org,
sumers needed a bigger car for their active lifestyles and Annual Report, Company History, January 22, 2010.