Table of Contents: 1. History and Background of the NAIAS 2. Promotions and Public Relations for the NAIAS 3.

Advertising for the NAIAS 4. Market Dynamics for BMW(Porters Five Forces) 5. Demographics for BMW 6. Relationship Marketing and Related Services 7. Appendix: Key Atmospherics for BMW 8. Bibliography

History and Background

The NAIAS is currently in its 14th year as an international event. It is currently owned and operated by an association of Detroit auto dealers. It is considered to be a must-attend event for auto executives and media all around the world. The Charity Preview has been held for the past 20 years as well, and it has now become one of the largest single-night fundraising events in the world. Industry Preview Days has been an integral part of the auto show as well. During these specified days, automotive suppliers and others who support the industry are able to preview the show before the general public. The NAIAS continues to showcase new models, concept cars and innovative design and technology. The show has truly become an international event. The first ever Detroit Auto Show was in 1907, at Bellers Beer Garden near the Belle Isle Bridge. Seventeen exhibitors participated and 33 cars were showcased at that time. As the years passed, the show moved to the Wayne Gardens (1910), then on to Grinley Field (1917), then to Cross Town Garage (1919), followed by the Ford Building (1920), on to Morgan and Wrights Building (1921-22), and the Detroit Artillery Armory (1957). It was during this time, in 1957, for the first time foreign auto manufacturers were able to display their vehicles. Domestic vehicles were now sharing floor space with their foreign competitors. In 1965, the Detroit Auto Show moved to its present location at Cobo Conference/Exhibition Center, which offers one of the largest single floor showrooms in the world. Fourteen years ago, the Detroit Auto Show officially became the NAIAS. The first international auto show gained worldwide recognition with significant introductionsToyota introduced their luxury lineLexus and Nissan introduced their luxury

lineInfiniti. NAIAS 2002 hosted 54 vehicle introductions, including 40 worldwide introductions and 14 North American introductions. The NAIAS is the only auto show in the United States to earn the distinguished sanction of the Organisation Internationale des Constructeurs dAutomobiles, the Paris-based alliance of automotive trade associations and manufacturers from around the world. BMW decided to launch their top-of-the-line flagship 760Li at this years NAIAS. This car is our interpretation of leadership in the luxury performance segment, said Professor Dr.-Ing. Joachim Milberg, chairman of the board of management of BMW AG. It sets the benchmark through its balance of driving pleasure, safety, comfort and economy. The new 7 Series is a step into the future that gives direction to many and will remain the trendsetter for a long time to come. The new 7 series features i-Drive, a new concept for simplifying the growing number of comfort and convenience items in the cockpit through the use of a single rotary knob and monitor screen. The 7 Series comes in three versions: the 745i, the 745Li and the 760Li. The CEO of BMW (US) Holding Corp., Tom Purves, stated that the U.S. is the largest market in the world for the 7 Series, and therefore the NAIAS is the perfect show to launch BMWs campaign. Currently, the U.S. accounts for nearly half of the 7 Series sales worldwide.

Promotions & Public Relations

NAIAS generates much publicity for the Detroit metro area. Attention is drawn to the local area via international media present to cover the huge auto event. PR for the auto show is

both planned and image enhancing. John Bailey & Associates has been selected as the public relations agency of record for the 2002 North American International Auto Show (NAIAS), which were held Jan. 6-21 at Detroit's Cobo Center. The firm is being put in charge of coordinating all public relations, media relations and publicity for the show and affiliated events. Sales promotion encompasses advertising, public relations, and personal selling which stimulates consumer purchases and dealer effectiveness. The NAIAS showcases promotions and public relations with an international flavor. BMW utilized the kiosks and computer technology to its advantage at the NAIAS. Many auto magazines promote the NAIAS year round. NAIAS is fortunate in that WOM (word of mouth) promotional strategies help NAIAS to draw in its large crowd of visitors both domestically and internationally. A huge part of promotions is the media. The media can help a show become a raving success or a complete failure. The media is the link for the world and are the eyes and ears for those who are unable to attend the international auto show event. The medias pre-show coverage can help boost attendance, and may increase exhibitor participation, as well. The shows reputation is built by quick, impromptu on-site reports and generates interest and enthusiasm around the show. The presence of local and international radio and television media generates a buzz and help to build the shows reputation, in hopes of seeing an even bigger and better show next year. Press kits and pressrooms are two integral tools for promotional success at such a large venue. Press kits that are carefully thought out, sharply targeted and properly timed not only improve ones chances of getting pre-show publicity, but also can persuade the media that they

themselves should attend. A professionally run pressroom assists media personnel to do their jobs of covering the event with ease in unfamiliar and foreign grounds. Fortunately for the NAIAS, the promotional aspect of the show need not be long winded and drawn out. Due to the high exposure, excitement, immediate economic and global impact, and huge involvement of many agencies and participants, the NAIAS actually has a relatively short promotional gamut. The NAIAS kit mails only one month before show date, because of the nature of the show: Exhibitors are making major announcements and don't want to reveal too much too soon. The highly competitive and sometimes secretive market is lightened up somewhat by the release of several informational newsletters beginning four months before the show for everyone to enjoy the NAIAS pre-show jitters. At the NAIAS, meanwhile, the staff of the Michelin Media Center, named for its sponsor, retrieves specific kits as requested by the media -- no small task, considering that there were 2,500 media attendees at the last show. If an editor wants a full set of press kits, the staff will mail it to his or her office. That's especially helpful for international media because the full set weighs 50 pounds, meaning that press kits alone could exceed the individual's luggage allowance. Dedicated work areas are yet another useful way to assist the international media to ease into their roles. All these strategies help the NAIAS to build strong and ever-lasting public relations with the media, who will in turn have rave reviews for the show. Other amenities provided by big international shows such as the NAIAS include availability of typewriters, computers and fax machines. However, the NAIAS takes it a step farther and provides private workstations for major news bureaus, such as AP, which file many

news stories. Because so many media send their own photographers to the NAIAS, its Media Center includes a photo desk that sells film, and supplies and provides overnight film processing. The final film pick-up is late enough to accommodate special post-press-conference photo shoots that can be arranged through the Media Center. There is also on-site video editing for those who want to prepare a story for a local newscast, and a cameraman can even be provided. Any selfrespecting pressroom provides refreshments, though they need not be extensive. Coffee, juice, muffins, dry snacks and soft drinks are the norm for media at such events. Some pressrooms also have sandwiches or fruit and cheese. Keeping the media happy is a huge part of promotions and public relations in this tough industry.

Advertising
NAIAS relies on print, news, television, radio and Internet advertising media to promote the auto show. The NAIAS has limited its number of corporate sponsors for the ninth year in a row. Premium Official Sponsorship is the highest level of participation at the NAIAS and provides the company with significant advertising, on-site hospitality and exceptional promotional benefits. Official sponsorship on the other hand, is the second level of show sponsorship. This type of sponsorship allows selected corporations the opportunity to host special functions and events at the NAIAS as well as to demonstrate advertising affiliation. The Premium Sponsors this year include the following: Johnson Controls, Michelin North America, Northwest Airlines, and the ZF group. The NAIAS 2002 Official Sponsors include the following: Alpine Electronics, EDS, KPMG, MSN Carpoint, The Newspaper Association of America

(NAA), The Polk Company, PPG Industries, ASC Incorporated, Cooper Standard Automotive, and the U.S. Army TACOM National Automotive Center (NAC). NAIAS is teaming with Total Travel, which is providing a dedicated staff to facilitate travel, hotel and transportation into, in and around the Detroit area. Again this year, there are hospitality and information desks at Detroit Metropolitan Airport; desks specifically for NAIAS guests at major hotels; and, of course, the full-service Michelin Media Center with the "Welcome to NAIAS" desk at Cobo Center. Visitors will first see Metro Airport, and will be greeted with banners, airport staff trained to help visitors and information/hospitality counters at all terminals. The normal six banner policy was suspended, and there were more than 30 NAIAS banners throughout the airport. In the international terminal, there were even more banners, direction signs and a special information/transportation booth specifically to accommodate incoming foreign attendees. Commuter Express provided complimentary, intra-hotel shuttle services Jan. 7-11 between major hotels in Detroit, Dearborn, Southfield and Windsor and Cobo Center. There also was a discounted NAIAS shuttle service from Metro to all major area hotels. The show provides more than $502 million in total economic impact on the Southeastern Michigan region, according to Comerica Bank Chief Economist David Littmann. Therefore, it is of paramount importance to generate the correct advertising campaigns for the huge event. In that spirit, Commuter Express, DaimlerChrysler, Detroit Metro Convention & Visitors Bureau, Ford

Motor Co., General Motors Corp., American Honda Motor Co., Nissan and Toyota Motor Sales U.S.A., have all joined in as sponsors, providing support and funding for hospitality efforts. Despite cutbacks in most areas of marketing communications, more than 45% of automotive companies say that the role of event marketing in their business is increasing, according to a recent research study entitled ``Trends in Event Marketing 2001-2002.'' Events, including auto shows, are the most powerful way for companies to connect with customers,'' said Robert G. Vallee, Jr., CEO of The George P. Johnson Company, the world's largest independent event marketing agency, and designer and manufacturer of a majority of event experiences at this year's NAIAS 2002. As Mr. Vallee Jr., has stated, auto shows put people in touch with the product. There is enormous market potential and revenues to be generated from such an event. At this years auto show, there was also an increase in the advertising dollars spent on multimedia events. Video was nearly wall-to-wall, such as at the BMW exhibit, and LED screens prominently featured brand favorites.

Market Dynamics for BMW

BMWs presence at the 2002 North American International Auto Show held in Detroit is a great way to learn and understand the context of how BMW and other automakers compete. In particular, using the theories of marketing dynamics such as Porters five forces and a SWOT analysis can provide a strategic business manager or team with the knowledge and understanding of how to ultimately be at the top of the auto market. According to Michael Porter, the key to formulating a competitive strategy is composed

of a framework he refers to as the Five Forces. Porters framework suggests that each industry is driven by several factors that ultimately seek to gain a competitive advantage. The five forces include rivalry, threat of substitutes, buyer power, supplier power and barriers to entry. According to Porter, rivalry is marked as the center of his theory whereby it can take on several forms such as being highly competitive or subdued. Developing successful marketing strategies requires automakers to be aware of existing competitors. In order to remain highly competitive, automakers must be cognizant of its competitors, their strengths and weaknesses and marketing strategies. Drawing customers away from competitors by offering superior value to them is one way of gaining market share, however retaining those customers should also be a primary initiative in any marketing activity. There are many competitors in the auto industry for the largest share of the market. Many compete by offering low financing rates, cash rebates or market vehicles by highlighting quality, fuel efficiency, none of which have a significant share of the market. In other words, the auto market is highly fragmented and competitive. In pursuing an advantage over its rivals, auto manufacturers can choose to compete by improving products by using advanced technologies or by differentiating products that are aimed at untapped niche markets. In the case at BMW, the auto manufacturer has implemented several product innovations specifically aimed at affluent buyers seeking an integration of luxury with high performance. BMWs core competency is engineering and manufacturing Ultimate Driving Machines. The auto industry is characterized by a large number of firms competing for the same customers. Threat of substitutes in the auto market relates to products, materials or resources that may cause the demand for a product to shift. For example, auto manufacturers that are

competing for share in the premium car market are considered close substitutes to BMW. These brands typically are Mercedes Benz, Lexus, Cadillac and Jaguar, which possess similar technologies, features and characteristics commonly offered in a luxury vehicle. Many auto manufacturers are also planning to replace conventional gasoline combustion with alternative fuel cells such as hydrogen or electric. BMW is already ahead of the game with a number of joint-partnerships with companies that have the technology and expertise to develop hydrogen combustion technology and electric cells. BMWs hybrid hydrogen model displayed at the 2002 North American International Auto Show was just one example of how important it is to benchmark the latest innovations and lead the industry in performance and technology. Buyer power is another force in Porters framework of competition. Bargaining power of buyers can create a competitive advantage. Under such market conditions where there exist several suppliers, buyers are able to set prices. In particular, buyers are more powerful when there are fewer of them and they purchase a significant proportion of the output. Buyers can force prices down, bargain for higher quality or more services, and set competitors against each other. Whereas a small buyer may have to live with a price increase from a supplier, a large buyer may have the power to demand a lower price. Another force in Porters framework is the bargaining power of suppliers. Suppliers are a key competitive force because they can determine the price or quality of parts or raw materials. When a few suppliers control a large share of the market, as in an oligopoly, buyers may have to accept a price increase or a lower level of quality. However, increasingly auto manufacturers like BMW is always looking for suppliers willing to work closely with them to help them deliver value to their customers.

The ease of entry into the auto market is not a great concern of other automakers since it involves expensive startup costs and is usually very difficult to finance such a large investment. However, the possibility of new firms entering the auto industry does affect the competitiveness of current automakers. In respect to the BMW group, the largest threat to them is the propensity for other existing companies to develop a new line that directly competes for market share. It is fortunate that the auto industry possesses characteristics that protect the profit levels of firms in the market and inhibit additional rivals from entering the market. Some other unique characteristics that reduce the rate of entry of new firms are governmental agencies, which create and enforce laws and regulations. In addition, patents and proprietary knowledge serve to restrict entry into the industry. Asset specificity also prevents new firms from entering the auto industry. For instance, auto manufacturing requires highly specialized technology, plants and equipment that are very costly and difficult to finance. Organizational economies of scale can prevent new entries to the auto industry and is typically measured by the MES (minimum efficient scale). This is the point of which unit costs for production are at a minimum. BMW group operates at less than MES but is able to do so because of high product differentiation and premium selling prices. As for companies that wish to exit the auto industry, selling out to a larger company is a much better alternative since assets are specialized and exit costs are high. The following is an analysis of the strengths, weaknesses, opportunities and threats that face BMW group. With a brand that carries a strong heritage and world-class recognition, BMW is well known for its long-standing engineering quality. This has allowed BMW the advantage of being a specialty manufacturer of automobiles, a brand recognized by many as the Ultimate Driving Machine. By producing a product that combines luxury with the latest technologies and

high performance attributes, BMW has been able to compete on both quality and technology, however, not on price. The BMW group has been very successful at creating a niche market using several integrated marketing activities such as sustaining relationships with prospective buyers, current owners and repeat customers. Typically, BMW owners are very brand loyal with two thirds being repeat buyers. Currently BMW is ranked second in the world for number of vehicle turnovers linked with their high margins on luxury brands (priced 10%-30% higher than comparable models). As for the near future, BMW plans to broaden their product offering by introducing several new lines. Actually, BMW plans to introduce 20 new lines and three new engines in the next 6 years. The all-new 1 series will be introduced to compete with the Volkswagen Golf and the new Mini Austin will attract young savvy buyers. On the other hand, BMW must also encounter a number of weaknesses. BMW compared to many other auto manufacturers is considered a small company because of the number of vehicles produced annually. In the United States, sales of all BMW vehicles was194,713 for 2001. In contrast total worldwide sales for 2001 was 880,677 up 7% from 2000. This production output is less than half of the two million a year vehicle threshold for long-term survival. Fortunately BMW is thus far able to overcome this slight disadvantage of being a smaller auto producer by offering a differentiated (high profit margin) premium product. BMW for many years has remained small because of its continuous rejection to alliances and mergers. This poses an issue for BMW since many of the larger auto makers today are a synergy of smaller auto makers (General Motors family includes Saab, Fiat, Mazda, etc.) that joined at one time in the past. One other final weakness that could plague the BMW automaker is their deficiencies in the marketing department as seen with the failure of the Rover brand. Poor marketing of Rover was partly to

blame for the BMW groups loss of $6 billion since the acquisition in 1994. As for the future of the Mini, the most recent member of the BMW family will need an effective marketing strategy since it does not have a history in the U.S. market. BMW executives anticipate a number of positive changes in the future due to the growth and opportunities offered by the premium auto market. Known for its contributions to the auto industry especially as the industry trendsetter for technologies, design, safety, performance and the overall process from beginning to end, BMW will be able to capitalize on gaining more market share in the United States. Forecasts predict the premium segment in the United States will grow about 50% by 2010. The luxury auto segment is growing rapidly because of growing demand from consumer preferences but also because automakers are finding this segment more lucrative than the mass-market segment. Auto manufacturers can justify higher price tags because of the added value of the product and its attached prestige. Consumers are willing to pay extra for the status of owning a premium vehicle and the added features that accompany vehicles that are more expensive. September sales in the U.S. rose by 4% signaling that the premium auto market is independent of the volume or mass market. BMW ownership has spread across all segments of affluent America. An increased demand for the BMW X5 sport utility vehicle and the addition of the Mini and Rolls Royce line (premium products) may help boost annual unit sales for the BMW group. 2002 unit sales are predicted to top the one million mark for the first time ever. It is obvious that BMW has a niche market, but more importantly, it may also have the competitive advantage over other premium auto producers because of its large number of clients that custom orders their vehicles. In the U.S. alone, 60% of vehicles are custom ordered. BMW vehicles that come from German manufacturing facilities are also ordered to customer

specifications at a rate of 98%. The economic pressures of 2001 did not seem to affect BMWs financial position since 2001 figures indicate that the number of vehicles sold are up from previous years and profit margins are also up to 8.4% from 5.5% in 2000. Nonetheless, the auto industry may be in store for some drastic changes that could threaten premium auto manufacturers like BMW. Since many automakers are learning that the premium segment is growing rapidly and is highly lucrative, an increase in competition will threaten BMWs share of the market. As the auto market grows on a more global scale, larger auto companies can survive the long term because they are able to produce the industry threshold of 2 million units a year. Smaller automakers like BMW may not be able to last through the long haul turning them into a takeover target. History in the auto market has proven that larger firms acquire smaller players. The key issues in the future are likely to be the ability of automakers to manage costs and to keep up with profit margins. Companies like BMW must struggle to maintain economies of scale. It is difficult to assess the repercussions of the current market recession, however it may be a concern in the future that recession ravaged BMW owners could dump their cars when the leases run out, instead of signing up for new ones. The BMW group, one of the worlds well-known luxury auto manufacturer aims to remain as one of the only profitable auto manufacturers in the world. In todays highly volatile and competitive auto industry, especially in todays luxury car segment, several companies are producing more vehicles in the luxury car market to compete with market leaders like Lexus and BMW. BMW has thus far been able to sustain a competitive advantage despite the past economic turbulence, which has come from their ability to differentiate products and sustain long-term relationships with BMW owners and prospective buyers. BMW has a competitive

advantage over many other automakers because of their ability to integrate several marketing activities in a way that is consistent and interconnected.

Demographics
A retailers ability to devise and apply a sound strategy depends on how well that firm identifies and understands its customers, and forms it retail strategy mix to appeal to them. This entails identifying the characteristics, needs, and attitudes of consumers, as well as recognizing how people make purchase decisions- and then devising an appropriate target marketplace. It also means studying the environmental factors that affect purchase decisions.

Demographics are objective, quantifiable, easily identifiable and measurable population data. Life-styles are ways in which individual consumers and families (households) live and spend time and money.

Groups of consumers and individuals consumers can be identified in terms of such demographic variables as gender, age, growth rate, life expectancy, literacy, language spoken, household size, marital and family status, occupation, employment status, educational level and ethical/racial background. These variables strongly affect peoples retail shopping and retailer actions.

BMWs market size is international, attempting to gain target markets that are capable of buying higher end vehicles. The BMW car is marketed to both men and women, with in an age group that is defined as driving age (beginner to retired). These consumers are more than likely to come from a 2.2 person household but not limited to this size. The key is that they are focusing on a higher income family to increase sales potential for this Bavarian motor company.

Some of the demographic information that has been recently published after the North American International Auto Show explains some very important and relevant data. If there's one message that will be heard loud and clear over the glad crowing of automakers at this year's Detroit auto show, it's this: The car of the future is a truck. (1) Automotive giants of visiting Detroit decide to give the consumer what they are asking for this year.

Based on input from consumers during the first day the show was open to the public, Polk found that the number of consumers who used the Internet while shopping for a new vehicle increased 14%, from 46% last year to 60% this year. Polk also found that males continued to use the Internet to shop for vehicles at a slightly higher rate than females, with males increasing from 47% last year to 62% this year. Females increased from 44% last year to 59% this year.(2) Again we are able to apply gender demographics along with many other specific demographic and psycho-graphic information to better understand the consumers needs. Throughout the NAIAS, Polk will also report on the public's favorite vehicles. Based on input from consumers during the first "public day" of the auto show, Chrysler and BMW vehicles were the most popular among

consumers. Specifically, Chrysler and BMW vehicles were favorites across three segments each.
(2)

As we begin to look further into the different categories we also see the niche or target market in which BMW begins to hit and pull away from.

Top 3 leaders by Segment based Polk Auto Trend Centers 1/14/2001 Full-Size SUV: 1. Hummer 4-Door 2. Cadillac Escalade Lexus LX 470 3. Dodge Durango Large Car: 1. Pontiac Bonneville 2. Ford Crown Victoria 3. Chevrolet Impala Midsize Car: 1. Volkswagen Passat 2. Ford Taurus 3. Volvo S40 9.0 7.9 6.2 25.3 23.0 17.2 10.7 9.6 9.6 7.3 Minivan/Full-Size Van: 1. Chrysler Town & Country 2. Dodge Caravan Volkswagen Eurovan 3. Honda Odyssey Full-Size Pickup Truck: 1. Ford F-Series 2. Dodge Ram Pickup 3. Chevrolet Silverado Prestige Luxury Car: 1. BMW 7 Series 2. Audi A8 3. Bentley Azure 23.4 8.8 8.2 32.4 23.0 20.9 13.6 10.4 10.4 8.8

Compact Pickup Truck: 1. Dodge Dakota 2. Ford Ranger 3. Nissan Frontier Luxury Car: 1. BMW 3 Series 2. BMW 5 Series 3. Jaguar S Type 10.0 9.3 8.9 22.7 20.9 18.2

Compact SUV: 1. Chrysler PT Cruiser 2. Ford Escape 3. Jeep Wrangler Regular SUV: 1. BMW X5 2. Jeep Grand Cherokee 3. Ford Explorer 26.6 14.5 18.7 17.3 14.0

When looking at the data BMW shows there are in tune with consumer demands by hitting into the Sports Utility Vehicle market, as well remain at the top. I t make no special effort outside of there current niches or market of luxury and prestige. As a top leader we can be certain that this automotive company will be looking to Internet Shoppers in the near future using trends shown below we can see that individuals in the market for new vehicles will be using shows like NAIAS for a place to review there vehicles, only to make a online purchase next.

(3)

Internet Shoppers - 2000 vs. 2001 Trend Center Results

Demographics 2000 2001 Gender Male 47% 62% Female 44% 59% Age Generation X (18-34 years) 50% 67% Baby Boomers (35 - 54 years) 46% 67% Mature Market (55 years +) 40% 58% Annual Income Under $30,000 36% 46% $30,000 - $49,999 40% 59% $50,000 - $74,999 46% 60% $75,000 - $99,999 47% 75% $100,000 and over 51% 65%

Demographic information is critical to the next move in this retailing of vehicles. If the product the consumer is looking for is not at BMW they will seek it elsewhere. That is why information like gender purchasing is so helpful. As we look on the next following pages we are able to better understand the market and how it is being formed.

Table A: Top Six Vehicles Registered to Women, January - October 2001

Source: R. L. Polk & Co.'s industry-leading automobile registration database

Rank 1 2 3 4 5 6

Manufacturer Honda Ford Honda Toyota Chevrolet Ford

Model Accord F-Series Civic Camry Silverado Explorer

Total Vehicles 84,402 74,519 71,310 61,473 61,264 45,172

Table B: U.S. Market Share Percentages, Female Auto Registrations

Source: R. L. Polk & Co.'s industry-leading automobile registration database

Segment

1996 Market Share Women 20.9% 26.1% 3.8% 7.3% 5.0% 7.8% 13.5% 15.2% 0.4% 100%

2001 Market Share Women

(January - October)

Small Car Midsize Car Large Car Luxury Car Sport Car Van / Minivan Sport Utility Vehicle Pickup Truck Other Totals

18.3% 23.2% 1.8% 8.2% 4.3% 6.2% 23.9% 13.9% 0.3% 100%

According to Polk, American women accounted for 2,307,122 new auto registrations between January-October 2001. Men accounted for 5,946,068 new registrations.
(4)

This is the very

information that helps an automotive organization like BMW create vehicles that will be best geared for it growing, and ever changing consumer market.

RELATIONSHIP MARKETING AND RELATED SERVICES The North American International Auto Show (NAIAS) is a platform, which the auto industry uses to display the best and brightest vehicles. At the show, Auto Dealers utilize the concept of affinity, where efforts are combined to increase sales for all companies involved. BMW

participates in the NAIAS. BMW benefits by people who are interested in the show and just happen to walk by. Once there, the consumer is introduced to an auto company that utilizes the cutting edge in marketing technology. Two of the newest advertising techniques used by BMW are Customer Relationship Management (CRM) and Integrated Marketing Communications (IMC). BMW is building and maintaining relationships, which help place BMW as one of the top automakers. Customer relationship management fits with the subject of integrated marketing communications. Businesses should focus on a technology-driven view of CRM, and a more customer-focused view. The idea is for a business to learn about customers, their preferences, requirements and needs, and then line up organizational resources to fit those needs." 1 That philosophy is, primarily, BMW's view for the future. CRM

A new perspective on marketing leads to success Technology-enabled relationship management occurs when BMW obtains detailed information about a customers behavior, preferences, needs, and buying patterns and uses that information to set prices, negotiate terms, tailor promotions, add product features, and otherwise customize its entire relationship with the customer. Although BMW can use technology-enabled relationship management concepts to help manage relationships with vendors or other stakeholders, BMW focuses upon the customer at the NAIAS. Technology-enabled relationship management is often called customer relationship management (CRM) or electronic customer relationship management (eCRM). A BMW strategy in advertising utilizing eCRM provides information in response to specific customer inquires. BMW uses this technique in targeting a specific

customer. An example includes identifying and responding to specific customer behaviors and preferences. New product features and the concept vehicle are created in response to customer demands. BMW continues to measure and manage the customer relationship. This leads to customer retention, total value of the individual and an overall mutually beneficial customer relationship. BMWs strategy is to provide their customers with the product they desire, instead of developing a product and then finding a market. This tactic is the result of continuous customer contact. BMW uses several non-car-related ideas to help their customers, which, of course helps BMW continue to be successful. One Service and relationship building technique is BMWs financial services and credit cards.

BMW Credit Cards provides an on-going and mutually beneficial relationship Another service is BMW Driver Training. Twenty-five years ago, BMW Driver Training course was the first of its kind. Today, the BMW Driver Training course comprises a broad range of specialized programs and workshops, tailor-made to their customer's individual driving needs. BMW also seeks to establish customer relationships worldwide. BMW has developed a unique service for Diplomats and Members of International Organisations. BMW is introducing an onboard program to have real-time relationship with customers while driving. In a Germany only (for now) based program, BMW is ready to assist any current customer with their sales and services facilities around the world.

BMW developed an Internet advertising strategy as way platform of two-way communication with customers or potential customers. CRM is increasingly enhanced because the Internet has become one of the fastest growing and most effective ways to create an interactive medium with audiences. Several dealers offered direct links to the Auto Show from their Home Pages. These had live action cameras strategically placed, so that from work or home, an interested viewer could see all the people at the show. The site had links to pictures, reviews and downloadable segments on BMW's cool cars. This site provided information and detailed press releases; further

enhancing BMW's relationship with their customers. BMW utilized live web cams, which offered real-time Auto Show viewing.

BMW Web Cam viewers watch the Author in "Hands On" research IMC

BMW uses Integrated Marketing Communications (IMC) to build and reinforce mutually profitable relationships with employees, customers, and stakeholders. Customer relationship management fits with the subject of integrated marketing. By uniting the concepts of Customer Relationship with the marketing strategy of IMC, BMW is tying together their overall message. By developing and coordinating strategic communications programs, with radio, TV, the Internet, as well as booths and exhibits, BMW is potentially able to make a constructive contact. That strategy is a type of marketing that is directed at the consumers psychological, social, or symbolic needs. For example, the environmental surroundings at the NAIAS were so powerful that they could affect the purchase decision. The festival-like atmosphere at the show was an emotional appeal. BMW used exhibitive media in an effort to lure people to their products. That strategy is designed specifically to help bring customers eyeball to eyeball with the latest BMW

has to offer. Their message was projected in the newspaper, on TV, on the Internet, and the radio. The unifying message was to bring people to the show. This strategy continues a relationship with current customers and calls to action any potential customer. Both are drawn to the auto show to see the BMW exhibit. One of the latest trends is to package related items, by different manufactures to capitalize upon the partnerships target market. BMW blended their slogan for the advertisement to provide a standard company statement for salespeople and for prospective customers. The slogan

provided two main purposes; to provide a campaign with continuity and to reduce a key theme to a brief idea. Both were used to make a memorable statement with the Auto show consumer. The BMW sports car is popular worldwide. The image is a powerful nonverbal advertisement, which demonstrated speed and power in both the exciting bike and convertible.

The new BMW bike is so fast, it blew-off the authors hair BMW understands that for the first time, customers and other stakeholders can truly respond to a companys media communications in real time, using the same channel for feed-

back that the company used for promotion. This means that even if a customer finds himself at BMWs website, he can commence a dialog or relationship with BMW. The success of the joint philosophy (CRM and IMC) was demonstrated by the Ads (TV and Paper) which lured the Author to investigate BMWs Internet site. At the site the Author completed a questionnaire on the newest BMW products. BMW then sent the Author a personalized letter. By simply filling out a questionnaire, the author received a detailed letter. The letter, by James L. McDowell, Vice President of Marketing, initiated a relationship and provided more information. A brief statement from the letter included the following: Dear Mr. Joseph Marion, Thanks for your interest in BMW. Were pleased to enclose the BMW

information you requestedIf you would like more information on specific BMW models or programs, please fill out the enclosed postage-paid Business Reply Card and drop it in the mail.If youd like to immerse yourself in the total BMW experience on-line visit our exciting website, bmwusa.com.2 The high level of the BMW employee, who responded to the Author, indicates that customer relationships are important at BMW. By using an IMC marketing strategy, BMW was able to engage in CRM. Even if a customer uses that medium to complain, this knowledge can be useful. A complaint gives BMW the opportunity to correct the situation and set things right. It also gives BMW information on how to improve. BMW demonstrates its sophistication by cherishing complaints. The use of advertising strategy, surrounding the Auto Show demonstrated the methodology that BMW used to achieve their advertising objectives. The strategy is that determined by the particular creative mix of advertising elements the advertiser selects, namely:

target audience; product concept; communications media and advertising message. In the good old days of simple mass-media advertising, BMW could place their ads on Television to reach potential consumers. In the new age of CRM and IMC, up-to-date information must be placed in different media. A BMW customer who sees an ad in the news and desires to obtain more specific information will use the web. It would be a detriment if the site has not updated new sales promotion information. Technology has enabled BMW to adopt flexible manufacturing customizing products for customized markets. "Market Driven" today means bundling more services together with

products to create a "unique product experience". It means companies and customers working together to find solutions. IMC is both a concept and a process. The concept of integration is wholeness. Achieving this wholeness in communications creates synergy - the principal benefit of IMC - because each element of the communications mix reinforces the others for greater effect."3 BMW uses both strategies to develop a relationship with their customers and to develop a relationship to promote good word-of-mouth, That means using publicity, sales promotion, and direct response, as well as media advertising-all integrated with consistently quality vehicles, reasonable prices, and excellent service. That is the quintessential meaning of Integrated

Marketing Communications (IMC)."4 In an effort to do a better job of relationship marketing, BMW is now learning that they must be consistent in both what they say and what they do." 5 It is no longer enough to produce outstanding advertising anymore. BMW must integrate all their marketing communications with everything else they do as well. In doing so, a winning strategy of CRM and IMC will ensure continued success for BMW.

Appendix Key Atmospherics for BMW (Answers to In-class Questionnaire)

SETTINGS The main floor was arranged first with a large block-type sign with the BMW logo in the top block and the word, "WELCOME" in the lower block (see-attached photo). Straight-ahead in the back was a theater-like room with a large screen portraying various BMW products, BMW history. Immediately on the right wall were 3 computers and a saying above that read: www.bmwusa.com

Find your center. Locating your nearest, or favorite, authorized BMW center takes just a few clicks of the mouse below. Reserved parking. Make the most of owning a BMW with Owner's Circle at www.bmwusa.com BMW Financial Services. management. Offering high-performance financing and personal financing

The above statements were geared at enticing the individual to attempt each of the 3 items listed to be found using their 3 computers found conveniently below. There is also an upstairs to the display. The upstairs has three 7series models on display and a 745h model which is the H2O vehicle. The vehicle is portrayed to be Clean Energy--Powered by Hydrogen. The vehicle is a V8 using liquid hydrogen or petrol. This vehicle is part of the Clean Energy World Tour 2001. The display shows 6 mini-screens showing the vehicle all over the

world during its tour. The vehicle had a website along the rear window, www.the-movingidea.com.

The 7series models are displayed with the notion, "Luxury Meets Intelligence." The three models on display (745Li, 745I, 760Li) begin pricing at $68,495 through $72,495. The three vehicle colors were gray, black and taupe/champagne.

On the immediate left there is a reception desk with 2 sales representatives and a large vase filled with white Asiatic Lily flowers. Also there are 3 stainless steel stand-alone units with a computer monitor on each side allowing visitors to interact with the interior of the vehicles, adjust seating positions, radio, etc.

There is also a lounge for current BMW owners to enjoy a soft drink, coffee, cappuccino and a couple minutes to relax on the black contemporary leather sofa seats. The lounge is an oak hardwood floor embodied with stainless steel trim. You must present the reception desk with a set of BMW keys to enter the lounge. The BMW lounge was a nice, eclectic touch because they offered high-end items such as cappuccino and bottled water, leather seats/sofas. This gave the feeling of ritzy, chi chi so to speak

Also, the backsplash of the display had two huge screens playing a video using the BMW racecar as its main focus. While each turn around the track came into focus, the racecar would take the image of a BMW black sedan driving the course. The purpose I believe was to make the visitor

realize the performance of BMW, fast, swift and able to take the turns of anything in its path.whoosh!! We have provided several 30-second videos of this taking place. . PRODUCT ARRANGEMENT The product arrangement can be viewed in Exhibit 1. There are a total of 15 vehicles on display and 2 motorcycles. The product colors ranged from the typical black, red to a fancy blue-green. BMW all together has three Z Series, five M Series, ten 3 Series, three 7 Series, three 5 Series and 10 motorcycles to choose from. The upstairs housed the brand new three 7 Series vehicles and the Clean Energy vehicle.

THEME The theme has a sense of the outdoors on a paved windy road leading into a mountainous region and also a racetrack where the racecar turns into a normal BMW sedan as it comes whipping around the track corners.

COLORS, SMELLS The colors were basic at the display. There was music playing a techno/progessive house beat in the background as the visitors watched the two big screens in the backsplash. The music was inviting and invigorating, to get the crowd roaring inside with this music and create an aura of the vehicle being hip, latest style and fun car.

SPECIAL EFFECTS, MULTI-MEDIA

Several areas contained screens. At each section or BMW Series there was a sign highlighting each model for each Series along with a computer screen. There were two large screens in the backsplash of the display playing the race car video. Inside the back room was a large movie screen again showing a video. Immediately to the right entrance of the back room were 3 computers inviting the visitors to access them for further information on BMW and their website. Upstairs there were 3 stand-alone units with 2 monitors per unit to allow visitors to view seating positions, radio controls and such. Also, the Clean Energy vehicle contained 6 screens displaying the video footage of the Clean Energy Tour spots all around the globe.

DISTRIBUTED MATERIALS A colorful four-fold 8.5 x 11 brochure was distributed by BMW sales personnel to the visitors as they approached the reception desk located in one of the following three areas: 1) main floor, far right 2) main floor, far back, underneath main stairs 3) upstairs, immediate left of stairs. The saleswomen wore navy blue suit jackets, suit pants and a white blouse. The salesmen wore navy blue suits. There were about 8-10 sales representatives available on the main floor, in the back area under the stairs near the giant screen and there were reps upstairs, ready to answer any questions or offer product information to the browsing customers.

INTERACTIVE MEDIA Yes, the exhibit encourages interaction with its many computer screens/monitors located on the main floor next to each Series, and also upstairs there are 3 units/6 screens back-to-back.

EMAIL/WEBSITE There is a perforated BRC (business reply card) on the inside back cover of the brochure that allows you to supply them with your email address. Yes, the website is communicated and visible in three places in the complimentary brochure. The website is also sited on the right wall in the area where the giant movie screen was assembled.

DEALERSHIP REFERENCE A specific dealer was not referenced because the sales representatives were from various dealership locations including several from the state of Texas. The two most well-known BMW full service dealerships serving the metro Detroit area are Erhard BMW in Bloomfield, MI, located at Maple and Telegraph Rd and Bavarian Motors in Eastpointe, MI, located on Gratiot Ave.

MAIN CLAIM The main claim to the BMW 2002 was, "A new perspective on driving." Also, the introduction of the new 7 Series, stating, "Luxury meets Intelligence," was the other claim to fame.

TARGET BMW targets an audience who can afford a pricier monthly payment who wants to portray an image that SHOUTS "status," "educated," "established." A typical BMW owner is usually seen as a "yuppie", middle-aged, working a white-collar job and potentially educated. A consumer in the market for a luxury vehicle is potentially going to look at BMW, Lincoln LS, Cadillac CTS,

Mercedes C230, Lexus ES 300, Volvo, Audi, Saab. These cars typically have an image of uppermiddle class drivers. APPROACH I think the terms they have chosen to use take on a "drive" approach. Drive a BMW to really understand what a real car should feel like, feel the exhilarating performance of a BMW. A luxury approach is more given to the new 7 Series and the X5. There is no economical approach to BMW, because they want to be known as a "status symbol" not an economic vehicle. Performance is the key they're looking to "pump up."

ASSUMPTIONS, IMPLICATIONS OF SPACE Status.

ARGUMENT There is an argument that BMW wants you to buy into. If you want to drive a car that has high performance, reputation and a vehicle that will turn the head of the drivers ahead, then you should drive a BMW. If you're looking for a vehicle to commute from work or school, buy an affordable Honda Accord.

INCONSISTENCIES? No, I don't believe there are any inconsistencies in their image portrayal nor their product display.

BUY A BMW

You should buy a BMW if you are looking for a dynamic, high-performance, technologically advanced vehicle that will give a feeling of sophistication and a new meaning to driving a car. BMW is not a car, it's an adventure in an elegant manner.

Yes, I agree with their conclusion to buy their product. BMW has versatility. It offers a wide array of high-performance vehicles in various sizes and shapes made just for your needs. If you want a less expensive, yet dynamic ride, try the 3 Series. If you are in the market for an SUVtype vehicle, they have the X5. The exhilarating Z series is for you if you are looking for a classic, ultimate sports car-"take off for the stars" in the vehicle. The 5 Series is built around a balance of performance and practicality (more spacious than the 3 Series vehicles.) And finally the M Series is basically the sophisticated "power driving" vehicle.

As BMW puts it: 3 Series- "The Pure Drive" 5 Series- "The Dynamic Drive" 7 Series- "A New Perspective on Driving" M Series- "Power Driving" Z Series- "The Exhilarating Drive"

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