IBS Gurgaon

Date: 07/08/2012 Time: 19:59:37

MKTG/137

IBS Center for Management Research

License to use IBS Gurgaon for Sem I, class of 2014

BMWs Company of Ideas Campaign: Targeting the Creative Class

This case was written by Debapratim Purkayastha, under the direction of Rajiv Fernando, IBS Center for Management Research. It was compiled from published sources, and is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation.

2006, IBS Center for Management Research. All rights reserved. To order copies, call +91-08417-236667/68 or write to IBS Center for Management Research (ICMR), IFHE Campus, Donthanapally, Sankarapally Road, Hyderabad 501 504, Andhra Pradesh, India or email: info@icmrindia.org

www.icmrindia.org

MKTG/137

BMWs Company of Ideas Campaign: Targeting the Creative Class

We are eager to unveil this smart and original campaign that communicates BMWs culture of creativity so thoroughly. BMW has carved out a unique niche in the industry by placing a premium on constant innovation and inspiration, and this campaign will reveal the company behind The Ultimate Driving Machine. [1]
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 Jack Pitney, Vice President, Marketing at BMW of North America LLC, in 2006. What a load of manure. BMW long lived by the power of the idea of performance driving. Now theyve decided to jettison that history in favor of New Age marketing mumbo-jumbo Theyve sold their birthright for a bunch of Bangled [2] pottage. A great pity. [3]

Professor Stephen Bainbridge, law professor at UCLA,[4] in 2006. FIXING WHAT AINT BROKEN?
In May 2006, BMW of North America LLC (BMW LLC), the North American arm of German automobiles major BMW AG, released a new advertising campaign promoting itself as a company of ideas. This move took many by surprise. The tone and tenor of the new campaign were a huge departure from the companys communications in the past. The series of new ads no longer stressed BMWs performance, but strove to project its design prowess and corporate culture that fostered innovation. In doing so, the company said that they wanted to take their brand beyond yuppies[5] and attract a wider section of the affluent class. Many analysts were surprised as 2005 had been a good year for BMW in the US, and companies didnt usually deviate from a strategy or formula that had proved successful. In 2005, BMW LLC reported record annual sales of 307,020 vehicles (BMW and MINI[6] brands combined) in the US, up 4% over the 296,111 vehicles sold in 2004. The annual sales in 2005, for the BMW brand (BMW automobiles and BMW SAV[7] combined), was 266,200 units, up 2.4% when compared to 260,079 units in 2004. Tom Purves (Purves), Chairman and CEO of BMW (US) Holding Corp., commented: This is a strong finish to a year marked with numerous model changeovers. Weve only had full availability of our new award-winning 3 Series sedans[8] in the past two to three months. Given that, and changeovers in the 7 Series[9] and 5 Series,[10] we are especially pleased with the annual increases.[11] Despite the good sales performance, Jack Pitney (Pitney), vice president, marketing at BMW LLC felt that almost 75% of luxury car buyers in the US were not considering BMW as they still strongly associated it with the yuppie phenomenon of the 1980s. Thus, the company was banking on this new company of ideas ad campaign to redress this situation and expand its market. Though the ads received rave reviews from various quarters, some analysts felt that BMW was losing its soul by moving away from the theme of driving and performance. According to marketing expert Al Ries (Ries), BMW owned the word driving and this had been etched in the minds of consumers over a period of three decades with the tagline The Ultimate Driving Machine. Others felt that the ads fell under the heading of preventive maintenance as it came at a time when there was no real need for BMW to upset the cart. A few other analysts felt that BMW was losing its soul by trying to be everything to everyone.

BACKGROUND NOTE
BMW Group AG BMW was founded in 1913, when Karl Friedrich Rapp (Rapp) set up Bayerische Flugzeug-Werke to manufacture aircraft engines in the Munich district of Germany. In 1916, during World War I, the company entered into a contract to manufacture aircraft engines for the Austria-Hungarian army. In 1917, to meet the need for additional funds, Rapp gained the support of Camillo Castiglioni and Max Friz and the company rechristened as Bayerische Motoren Werke GmbH. In the same year, the company ran into difficulties because of over-expansion. It was taken over by Franz Josef Pope and in 1918 he named it BMW AG. In 1918, BMW manufactured its first aircraft engine, the Type IIIa. This engine could power a biplane[12] to reach an altitude of 5000 meters in just 29 minutes, creating a world record. After the World War I, the Treaty of Versailles (1919) put a ban on production of aircraft in Germany. Thus, in 1919, the company started to manufacture railway brakes. In the same year it designed its first motorcycle engine. In 1923, it started manufacturing motorcycles and its first model R32, a 500cc shaft-driven motorcycle, was launched. BMW started manufacturing motorcycles in 1923, and the companys first model the R32 was launched in the same year. It was a 500cc shaft-driven cycle designed by Max Friz. BMW forayed into car manufacture in the late 1920s. (Refer to Exhibit I for BMWs Logo). In 1928, BMW set up a car manufacturing unit in the Eisenach region of Germany and started manufacturing a small car called Dixi, based on the Austin Seven car[13] under license. In the following year it acquired the Dixi Company. It was BMWs first car and was marketed under the name BMW 3/15. Over the next decade, BMW launched a number of successful models. Its cars, especially the 327 saloon and 328 roadster, were considered very advanced for their time, and the roadster was even nominated as the Car of the Century in 1999 by some auto experts. With the start of World War II, BMWs car business took a back seat as it started manufacturing aircraft engines once again. Its aircraft engines and motorcycles were extensively used by the German army. Toward the end of the war, the companys plants were heavily bombed and those on the eastern part of the country were captured by the Soviet Union. Car production began once again only in 1952. In the 1950s, BMW largely failed in its endeavor to enter the premium segment of cars. Faced with too many obstacles, BMW considered merging with rival Daimler-Benz AG[14] in 1959. However, Kurt Golda, BMWs chairman was not supportive of the idea and managed to convince Herbert Quandt, the majority shareholder, to oppose the move. This proved to be a sound decision, as BMWs fortunes turned that same year with the launch of the BMW 700 (700). The 700 was a small car with an air-cooled, rear-mounted engine. The cars unique selling proposition was its sporty exterior. Another racing model, based on the 700, won many competitions, and BMW gained a reputation as a manufacturer of sports sedans. In 1961, with the launch of BMW 1500, the company cemented its position as a maker of trendy sporting cars. The BMW 1500 was a powerful compact sedan, with front disc brakes and four-wheel independent suspension. It was the first BMW to feature the Hofmeister kink, an automobile design feature marked by a bend in the piece of metal that separates the rear side windows from the rear glass of the car. The Hofmeister kink went on to become a trademark feature in all BMW cars. In 1971, BMW moved into its new headquarters in Munich. The buildings architecture design reflected the form of the four cylinders of a car engine (Refer to Exhibit II for a photograph of the BMW headquarters). During the 1970s, BMW targeted the export markets. In 1973, the companys first overseas plant was set up in South Africa. It also set up a distribution subsidiary in the US. In the 1980s, BMW increased its exports to the US, Asia, and Australia. In 1981, it also became the first European car maker to set up a subsidiary in Japan. It consolidated its position in Europe by setting up an engine plant in Austria (in 1982), and extending its production network in Bavaria (in 1986). The 1980s also saw a flare up in the rivalry between BMW and Daimler-Benz AG, as BMW launched a line of luxury cars to compete with Mercedes-Benz (Mercedes). In 1992, BMW outsold Mercedes for the first time in Europe. In the same year, BMW became the first European car maker to operate a US plant (after Volkswagen[15] exited in 1988) at Spartanburg in South Carolina.
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first European car maker to operate a US plant (after Volkswagen[15] exited in 1988) at Spartanburg in South Carolina. In 1994, BMW acquired British car manufacturer, MG Rover and gained ownership of the companys successful brands like the Mini and Land Rover. But BMW found that except for the Mini, Land Rover, Triumph, and Range Rover, most of MG Rovers brands clashed with those of BMW. As a result in 2000, BMW sold MG Rover to the Phoenix Consortium, a group of four businessmen, for a token 10. It also sold the Land Rover and Range Rover brands to the Ford Motor Company[16] (Ford) and retained only the Mini and Triumph brands. In the early 1990s, BMW entered into a joint venture with Rolls-Royce Motors (Rolls-Royce). In 1998 both BMW and Volkswagen vied with each other to purchase Rolls-Royce. Volkswagen bought Rolls-Royce for 430 million by outbidding BMW, but did not have rights over the Rolls-Royce trademark. BMW acquired the rights to the grille and mascot of Rolls-Royce, and also obtained the license to use the Rolls-Royce name and logo after 2003 for 40 million. In January 2003, BMW launched the new model Rolls-Royce Phantom. This high priced model (around US$ 330,000) went on to sell a record 769 units worldwide in 2005. In the early 2000s, BMW launched new cars in its 1-series[17] and 6-series,[18] which were designed to consolidate the companys position in entry level cars, and the large coupe and convertible segment respectively. During the same period, BMWs new design chief Christopher Bangle (Bangle) brought out cars with more curvy designs, which he called flame surfacing. These designs were widely criticized by BMW traditionalists and the press who referred to these new designs as Bangled or Bangle-ized. Despite the criticism, BMWs sales increased year after year. In the early 2000s, when the company launched a 7-series car that featured separate rear fenders with a bustle-back trunk (boot) lid, it was criticized and often derogatively referred to as the Bangle-butt. However, since then, this design had been copied by rivals like Lexus and Mercedes. In 2005, BMW recorded a sales volume of 1,334,426 units in automobiles alone (BMW, MINI and Rolls-Royce brands combined). Revenue in 2005 was 46,656 million and net profit was 424 million (Refer to Exhibit III for BMWs key figures 2001-05, Exhibit IV for segment-wise revenue and Exhibit V for region-wise revenue of 2005). Its main competitors included Acura[19], Alfa Romeo[20], Audi[21], Cadillac[22], Infiniti[23], Jaguar[24], Lexus[25], Mercedes, and Volvo[26]. BMW of North America LLC BMW LLC, a subsidiary of BMW, was established in the US in 1975. It imported BMW, MINI, and Rolls-Royce cars and motorcycles to the US and provided marketing, sales, and financial services to BMW and MINI dealerships. As of end 2005, it provided marketing, sales, and financial services for some 340 BMW dealerships, 330 BMW SAV dealerships, 150 BMW motorcycle retailers, and around 80 MINI dealerships. It also included BMW manufacturing, industrial-design firm DesignworksUSA, a parts distribution center, and a technical training center. BMW Manufacturing Co., LLC in South Carolina is a part of BMW Groups global manufacturing network and is the exclusive manufacturing plant for all Z4 Roadster and X5 SAV. BMW (US) Holding Corp., the BMW Groups sales headquarters for North, Central and South America, is located in Woodcliff Lake, New Jersey, USA. Its 2004 revenues were 5,526.3 million. In 2005, North America accounted for 24.15% of BMWs total revenues. BMW LLCs top three competitors were Audi, Ford and Mercedes.

BMW THE ULTIMATE DRIVING MACHINE

For long BMW had been associated with the words driving and performance. The companys taglines in English were The Ultimate Driving Machine and Sheer Driving Pleasure. The original German slogan was Freude am Fahren, which translated to Joy in Driving in English. BMWs association with driving was so strong that Ries believed that BMW became a synonym for driving in the mind of the consumer. What comes to the mind when you think about BMW? said Ries. A car thats fun to drive. The ultimate driving machine. BMW owns the word driving in the mind. And, as a result has become the second-largest-selling European luxury car in America.[27] In fact, according to Ries, it was the consistency of the communication and logo over decades that led to the success of BMW. He said, BMW has been the ultimate driving machine for twenty-five years. Whats even more remarkable is the fact that BMW retained its strategy even though the brand was driven through three separate advertising agencies. A change in agencies usually signals the end of the brands consistency.[28]

GOING BEYOND THE YUPPIES

In 2005, BMW branded automobile sales in the US were 266,200 units when compared to 260,079 units in 2004. In fact, over the last five years BMWs sales in the US had increased by 62%, far more than any competitor. The companys new products were also well received. However, an inhouse research study, in 2005, revealed that a large percentage (75%) of luxury car buyers in the US did not consider any BMW vehicle at the time of purchase. Though BMW was far from trouble, the management realized the need for a change. Were entering new product segments all the time, and we cant afford to not be on the shopping lists of this many peoplePeople think we have a cool persona as a brand, but say we lack humanity,[29] explained Pitney, highlighting the need for BMW to communicate better certain dimensions of the BMWs brand story. The company wanted the US market to be a major driver of growth so that it could realize its ambition of increasing the global sales of BMW branded vehicles to 1.6 million by 2010. As BMWs market share in the US was less than 2%, it was being viewed as a major growth area by the company. Purves said, If we doubled our market share, thats a huge volume increase for us and thats what we have in Europe. We thought that was possible, but we had to think about it in a different way.[30] According to the senior management, the situation faced by BMW was a direct result of the companys overemphasis on performance driving over the last 33 years. They felt that consumers were looking for brands that stood for larger values. A search for a new ad agency was on as BMW was not satisfied with the agency Fallon Worldwide[31], which had designed the BMW films series.[32] BMWs confidential brief to the ad agencies competing for the business, obtained by BusinessWeek,[33] read: BMW wants to bring the excitement back to the brand and restore the equilibrium between their products and their marketing communications. Remember, your challenge is not to reinvent the brand but to evolve the marketing from its current one-dimensional focus on performance[34] On November 2005, GSD&M[35] was awarded the BMW advertising contract. The US$160 million budget BMW spends on advertising every year was considered huge and prestigious for GSD&M. Analysts felt that GSD&M had a tough job on hand as BMWs sales were already on an upward trend and it was a strong and well-defined brand. They felt that if the brand was in trouble, the ad agencys work would have been easier as they would have been free to make wholesale changes.
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The new ad campaign promoted BMW as a company of ideas. It was launched on May 8, 2006, and aimed to showcase the companys design prowess and independence, and to promote BMW as a company full of ideas to the creative class.[36] The ad campaign was designed with the objective of building demand for BMW by reaching out to consumers who had not until now considered purchasing a BMW vehicle. At the same time, it wanted to make the existing BMW loyalists proud of the companys success story.

TARGETING THE CREATIVE CLASS

According to the company, the dynamic campaign was aimed at the creative class consumers who shared many of BMWs principles an independent spirit, a drive to challenge conventional wisdom, and an appreciation for a brands ability to offer both substance and style. The economic function of this 38 million[37] strong class in the US was to create new ideas, new technology, and new creative content. According to Richard Florida (Florida), a Carnegie-Mellon University professor, the people of this class were distinct from other classes through the nature of their work. While people in the other classes were primarily engaged in implementing a plan, the creative class were primarily engaged in creative functions. They were considered to have more autonomy and flexibility in their work than the other classes. They shared common characteristics, such as being driven in work and family by creativity, individuality, diversity, and merit. Florida said, all members of the Creative Class whether they are artists or engineers, musicians or computer scientists, writers or entrepreneurs share a common creative ethos that values creativity, individuality, difference and merit. For the members of the creative class, every aspect and every manifestation of creativity technological, cultural and economic is interlinked and inseparable.[38] According to some, this class of buyers were often referred to as the iPod[39] class because of how Apple Computer Inc.[40] achieved success in the portable music players market by designing a player that appealed to this class even though it cost more than other music players. According to GSD&Ms president, Roy Spence (Spence), this class of people lived by the power of ideas, and admired companies and people who championed creativity and ideas. Marketing consultant Dennis Keene (Keene) too echoed this view. Theres an influential class of consumers, maybe its the creative class, who make buying decisions based in part on how they feel toward a company and what it stands for,[41] he said. In his book The Rise of the Creative Class, Florida said that this class of people had grown in numbers very fast in the last couple of decades and he expected this class to grow further in the next few decades. I expect that the creative class, which is still emergent, will continue to grow in coming decades, as more additional economic functions are transformed into Creative Class occupations.[42]

THE COMPANY OF IDEAS CAMPAIGN

The ad campaign was unveiled through various media such as newspapers, magazines, television, cable network, outdoor billboards and the Internet. The campaign tried to communicate BMWs independence and freedom to pursue innovative ideas, as it was neither owned by nor part of a division of another company (Refer to Exhibit VI (A) for the company of ideas print ads, Exhibit VI (B) for the company of ideas TV ads, and Exhibit VII for a new BMW print ad). Though BMW still used the tagline The Ultimate Driving Machine, the ads placed little emphasis on its high performance features like horsepower, etc.- a sharp departure from its earlier ads. The new ads projected BMW as a company of ideas, where radical ideas and designs were encouraged, so that the companys products reflected its tagline as The Ultimate Driving Machine. Spence commented: BMWs performance is legendary, but how they get there is an important part of the story as well. They get there through passion and inspiration they arent hindered by idea-killing bureaucracy.[43] Lee Newman, senior vice president at GSD&M, who directed the campaign, said, People know BMW as the ultimate driving machine. We think it would be really valuable for people to know how it gets to be an ultimate driving machine.[44] Analysts felt that the print ads were unconventional and different from regular automotive advertising campaigns. The majority of the new BMW ads were all-text pieces, featuring simple but bold copy. These ads attacked issues like corporate convention and compromise. Only one ad featured a photograph of a BMW vehicle. Even this one showed only the rear side of the controversial redesign of the 7 Series sedan which had prompted criticism when it was launched in 2001. The attention-grabbing print ads, with their bold message, tried to highlight BMWs autonomy and commitment to protect great ideas and concluded with phrases like to make sure great ideas live on to become Ultimate Driving Machines.[45] The television ads also highlighted the same theme as the print ads. The ads on TV tried to project BMW as a company that allowed creativity to flourish. Purves said, It should appeal to the idea class that we are independent, that we are free to do something.[46] The ads also portrayed different kinds of personality types, who created barriers to creativity in a typical organization. All these ads concluded with a shot of the award-winning BMW plant in Leipzig, Germany, designed by Zaha Hadid[47] (Hadid). The design of the Central Building of the plant won Hadid the Pritzker Architecture Prize[48] in 2004. The Leipzig plant highlighted BMWs philosophy of Inspiration and Innovation and highlighted the importance placed by the company on creativity and innovation (Refer to Exhibit VIII for a view of the Leipzig plant). Analysts also felt that BMW and GSD&M, by placing the ads in lifestyle publications that focused on art and design, travel, luxury, and sports, had deviated from the normal convention. The ads also appeared in magazines such as Architectural Digest, Dwell, GQ, Vogue, Vanity Fair, The Economist, Fortune and Forbes and newspapers such as The New York Times, USA Today and The Wall Street Journal.[49] BMW also posted ads on websites that were frequently visited by the creative class type of people like www.gawker.com, www.thegothamist.com, and www.flavorpill.com. Analysts felt that a lot of thought had gone into the media buy considering the class of buyers BMW was trying to reach. BMW also showcased its environmental sensitivity through one ad that hailed one of its models, the 745h hydrogen car, as ready for sale or lease. The ad went on to say that BMW was just waiting for the rest of the world to catch up. Another ad showed that one could actually drink the water discharge from the 745h. One ad highlighted the eco-friendly practices at its Spartanburg, South Carolina, plant, such as the use of methane, produced in a landfill located nine miles away from the plant, to produce over 50% of the plants energy requirements. In another series of TV ads, BMW creatively portrayed images of Frank Lloyd Wrights Fallingwater[50] house being demolished with a wrecking ball[51] and a Jackson Pollock[52] painting thrown in a dumpster. The message of these ads was that BMW was not
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like other companies that destroyed creative and radical ideas.

REACTIONS TO THE CAMPAIGN

Analysts were struck by the originality of the ad campaign. Some felt that the campaign would win advertising awards and also help BMW to exorcise the ghosts of the past (read: its association with the yuppie phenomenon of the 1980s). But there were others who were disappointed with the ads. They were also annoyed by the veiled competitor bashing in the campaign and felt that it was bad advertising. Some felt that BMW was insecure and felt threatened by the increase in competition. A car enthusiast commented, If BMW werent so paranoid about the increase in substance and value from the competition, then why do they feel that they have to explain themselves? BMW claims that they dont compromise? I see the whole ad as a compromise with consumers! Actually, in a way I also see this ad as an apology. An apology to all the BMW fans that they alienated years back. I applaud BMW for their attempts but until the designs, the engineering, value and the sense of pride is improved upon, BMW will just keep on looking desperate.[53] A few analysts opined that it was a good idea to expand the customer base. They argued that since BMW held the second position in the luxury car segment in the US market and its sales had been on the rise over the past decade, all those people buying it could not have been only yuppies. With a change in perception, more people would eventually start considering BMW. They felt that as long as BMW did not really change its core philosophy that it builds the ultimate driving machine, it would not lose its existing customer base. According to Keene, BMW had come a long way since the 1980s and had good stories to tell that could change some perceptions. But others cautioned that a change in perception would not happen overnight and would require a slow and methodical approach. Some analysts opined that preventive maintenance or otherwise, it was a bad idea to try for BMW to try to expand its customer base. They felt that when a strong niche brand like BMW tries to diversify and expand its core customer base, it may cause confusion among customers. Critics felt that in trying to be everything to everyone, BMW might dilute what its brand stood for. They felt that BMW should stick to what it was best at the ultimate driving machine and leave the softer aspects to Mercedes, Lexus and Cadillac. BMW, through its new marketing efforts was losing its soul. Marketing experts like Ries had decried the fact that BMW was moving away from its core brand proposition. Some analysts felt that BMW had taken a big risk by moving away from its core brand proposition and giving in to new age marketing mumbo jumbo.

Exhibit I

The BMW Logo

Source: www.bmw.com.

Exhibit II

BMW Headquarters

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Source: www.en.wikipedia.org.

Exhibit III BMWs Key Financials (2001-05) 2001 Vehicle Production (Units) BMW MINI Rolls-Royce Motorcycles Deliveries to Customers (Units) BMW MINI Rolls-Royce Motorcycles 880,677 24,980 84,713 913,225 144,119 92,599 928,151 176,465 300 92,962 1,023,583 184,357 792 92,266 1,126,768 200,428 796 97,474 10.1 8.7 0.5 5.6 904,335 42,395 90,478 930,221 160,037 93,010 944,072 174,366 502 89,745 1,059,978 189,492 875 93,836 1,122,308 200,119 692 92,012 5.9 5.6 -20.9 -1.9 2002 2003 2004 2005 Growth 20052004 (%)

Workforce at end of year (All financial figures are in Euros million) Revenues Capital expenditure Depreciation and amortization Cash flow Operating cash flow Profit before tax Net profit

97,275

101,395

104,342

105,972

105,798

-0.2

38,463 3,516 2,159 4,202 4,304 3,242 1,866

42,411 4,042 2,143 4,374 4,553 3,297 2,020

41,525 4,245 2,370 4,490 4,970 3,205 1,947

44,335 4,347 2,672 5,187 6,157 3,583 2,242

46,656 3,993 3,025 5,602 6,184 3,287 2,239

5.2 -8.1 13.2 8 0.4 -8.3 -0.1

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Source: BMW Group AG Annual Report, 2005.

Exhibit IV

Product Segmentwise Revenue of BMW Group 2005

Adapted from Financial Statements of BMW AG Financial Year 2005, www.bmwgroup.com.

Exhibit V

Regionwise Revenue of BMW Group 2005 (in %)

Adapted from Financial Statements of BMW AG Financial Year 2005, www.bmwgroup.com.

Exhibit VI (A)

The Company of Ideas Print Ads

NO: A simple bold print ad with the word No in large type confidently asserted that BMW had the ability to say no to compromise while saying yes to innovative ideas. This all text ad explained that BMW would do a thousand little things that separated it from all other car companies. By maintaining its independence and ability to say no, BMW could make sure great ideas lived on to become Ultimate Driving Machines. MATCH: Another print ad that featured only text, challenged readers to pair luxury car brands with their respective parent companies. The accompanying text explained that not many car companies could say they are beholden to none. As an independent company, BMW had the freedom to build cars the way it wanted to build them. The company could take risks that their competitors might not be able to justify to their parent companies. AIRBAGS: This print ad featured a BMW vehicle and reiterated that ideas were valued at
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BMW. The ad featured a BMW vehicle and the tagline, Ideas dont have airbags to protect them. The accompanying text explained that ideas were highly vulnerable creatures and must be nurtured and protected. RISKY: A print ad prominently featuring a BMW 7 Series vehicle with the tag line Not taking risks is risky sent a strong message that only companies as open to taking risks as BMW could deliver on the promise of the Ultimate Driving Machine. For example, the redesign of the 7 Series in 2002 sparked debate when it was first unveiled. The text of this ad stressed the luxury of autonomy but pointed out that with freedom comes an obligation to never rest on ones laurels and to trust ones instincts while entering unchartered territory and striving to set benchmarks as BMW did with the redesign of the 7 Series. This ad reminded the audience of BMWs leadingedge vehicle design.

Source: www.bmwcca.org.

Exhibit VI (B)

The Company of Ideas TV Ads

OVERTHINKERS: The viewer saw images of stuffy corporate types accompanied by a voiceover cautioning them to be wary of over-analyzers who dont see an ideas true potential. A shot of the Leipzig plant was seen with a voiceover explaining, At BMW, ideas are everything. The camera followed the high-tech environment and continued, We make sure great ideas live on to become Ultimate Driving Machines. EUPHEMISMS: The ad opened on portraits of typical corporate people looking directly into the camera with a voiceover asking the viewers to beware of those who speak in euphemisms.[54] The voice gave examples including, Youve presented some very challenging ideas. It then offered a translation of, I am scared of your thinking. Another example, Keep that idea in your back pocket and its translation, Your idea is about to die a slow death. The camera again cuts to the celebrated BMW plant in Leipzig and ends with the campaign tagline, We make sure great ideas live on to become Ultimate Driving Machines. BENEDICT ARNOLD: This spot opened up with a voiceover asking the audience to beware of the Benedict Arnolds who originally support an idea, but then turn on it the second the idea meets any resistance. The ad then cuts to the BMW plant at Leipzig ending with the tagline, At BMW ideas are everything, and as an independent company, we make sure great ideas live on to become Ultimate Driving Machines. ENEMY OF IDEAS: The spot opened up on corporate businesspeople looking into the camera and a voiceover saying they were the enemy of ideas. They say things like, Let me play the devils advocate, or With all due respect, but and then it cuts to the BMW plant in Leipzig with the tagline At BMW ideas are everything and as an independent company, we make sure great ideas live on to become Ultimate Driving Machines.

Source: www.bmwcca.org.

Exhibit VII

A New BMW Print Ad (2006)

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From a two page BMW ad spread in Automobile Magazine: The ability to say no to compromise is a rare thing these days. Many companies would like to be able to say it, but so few have the autonomy to actually do it. As an independent company, BMW can say no. No, we will not compromise our ideas. No, we will not do it the way everyone else does it. No, we will not factor designs down to the lowest common denominator. No, we will not sell out to a parent company who will meddle in our affairs and ask us to subject our cars to mass market vanilla-ism. Because we can say no to compromise we can say yes to other things such as building our vehicles with 50/50 weight distribution for superior handling and control, despite the fact that it costs more to build them that way. Its thousands of little things like this that separate BMW from other car companies. By maintaining our autonomy and ability to say no, we can make sure great ideas live on to become ultimate driving machines.

Sources: www.autospies.com, www.aiada.org.

Exhibit VIII

A View of the Leipzig Plant

Source: www.bmwworld.com.

Additional Readings and References:

1. 2. 3. Al Ries and Laura Ries, The 22 Immutable Laws of Branding, 2000. Richard Florida, The Rise of the Creative Class, Basic Books, 2002. Mukund and Neela Radhika, BMW: Going on the Offensive, www.icmrindia.org, 2003.
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4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34.

Mukund and Neela Radhika, BMWs Innovation Strategies, www.icmrindia.org, 2003. Mukund and Neela Radhika, Innovation at BMW, www.icmrindia.org, 2003. Brief, the Impossible Brief An Open Letter to BMW, www.jaffejuice.com, August 11, 2005. BMW Films No More, www.jaffejuice.com, September 30, 2005. David Kiley, BMW Chooses Texas-based GSD&M as its New Ad Agency, www.businessweek.com, November 14, 2005. Sanjib Dutta and Shirisha Regani, Mass Customization The BMW Way, www.icmrindia.org, 2005. BMW Sets All Time Annual Sales Record in 2005, www.internetautoguide.com, January 4, 2006. Jeremy Mullman, GSD&M, Publicis Win BMW Dealers Creative Ad Account, www.adage.com, April 7, 2006. David Kiley, BMW Targets New Drivers, www.businessweek.com, May 5, 2006. Richard Williamson, BMW Targets Creative Class www.adweek.com, May 5, 2006.

BMW Losing its Soul, www.professorbainbridge.com, May 8, 2006. BMW Unveils New Advertising Campaign, www.bmwusa.com, May 8, 2006. BMW Unveils New Ad Campaign, www.strategiy.com, May 9, 2006. Jenny Munro, BMWs New Ad Campaign Features Upstate Plant, www.greenvilleonline.com, May 9, 2006. Claudia Grisales, GSD&M Takes Different Road with New BMW Ads, www.statesman.com, May 09, 2006. BMWs New Ad Campaign Brilliant? Should GM be listening? www.autospies.com, May 10, 2006. BMW Targets Creative Class, www.designtaxi.com, May 10, 2006. Jim Burt, BMW Goes for Kindler and Gentler, www.thecarconnection.com, May 15, 2006. BMW Gives Yuppies the Heave-Ho, www.gminsidenews.com, May, 2006. Neal E Boudette and Gina Chon, Brawny BMW Seeks the Idea Class, www.moneyweb.co.za, August 2, 2006. BMW Group AG Annual Report, 2005, www.bmw.com, 2006. Financial Statements of BMW AG - Financial Year 2005, www.bmwgroup.com. www.answers.com. www.autospies.com. www.bmw.com. www.bmwcca.org. www.bmwgroupna.com. www.bmwmotorradusa.com. www.bmwusa.com. www.bmwworld.com. www.en.wikipedia.org.

[1] BMW Unveils New Ad Campaign, www.strategiy.com, May 9, 2006. [2] In the 2000s, BMW made some changes in the design of its vehicles under their new design chief Christopher Bangle (Bangle). The new designs were referred to (often derogatively) as Bangled after the name of Bangle, by the press and BMW traditionalists. [3] BMW Losing its Soul, www.professorbainbridge.com, May 8, 2006. [4] The University of California, Los Angeles, popularly known as UCLA, is a public, co-educational university located in the city of Los Angeles, USA. [5] Yuppie, short for Young Urban Professional, describes a demographic of people primarily comprising of the children or grandchildren of the baby boomer generation (people born between 1945 and 1964). In general the yuppies are highly-educated and upwardly-mobile and are aged from early twenties to early-to-mid thirties as of 2006. They tend to hold jobs in the professional sectors, with incomes that place them in the upper-middle economic class. The term Yuppie emerged in the early 1980s. Although the original yuppies were young, the term now applies as well to people in middle age. [6] MINI is car produced by a subsidiary of BMW. [7] SAV is the acronym for Sports Activity Vehicles. BMW calls its sport utility vehicle (SUV) as SAV. A SUV, is a type of passenger vehicle which combines the load-hauling and versatility of a pickup truck with the passenger-carrying space of a van. [8] A sedan car is one of the most common body styles of the modern automobile. At its most basic, the sedan is a passenger car with a separate hood covering the engine in the front, and a separate trunk for luggage at the rear. The BMW 3 Series is a line of compact
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luxury cars manufactured by BMW since May 1975. Luxury cars are vehicles that lay more emphasis on comfort, appearance, and amenities than on performance, economy, or utility. They usually offer cutting-edge technology, higher quality materials, and are often built in smaller numbers than more affordable mass-market vehicles. As of December 2006, to qualify as a luxury car, the Mean Selling Price of the car had to be in excess of around US$ 36,000. [9] The 7 Series is BMWs flagship car. It is a luxury sedan. [10] The 5 Series is a series of midsize luxury automobiles manufactured by BMW. They are available as sedans and station wagons (a car body style similar to a sedan, but with an extended rear cargo area). [11] BMW Sets All Time Annual Sales Record in 2005, www.internetautoguide.com, January 4, 2006. [12] A biplane is a fixed-wing aircraft with two main wings of similar spans, normally one mounted above, and the other level with the underside of the fuselage. [13] Austin Seven was a British car named after Sir Herbert Austin, its designer. The Austin Car Works were located at Longbridge in England. The plant at Eisenach was producing the cars under license from the British company. [14] Daimler-Benz AG was a renowned manufacturer of automobiles and motor vehicles in Germany. The companys automobiles were marketed under the Mercedes-Benz brand. In 1998, Daimler-Benz AG merged with Chrysler Corporation, a US automobile manufacturer, to become Daimler-Chrysler AG. [15] Volkswagen, based in Wolfsburg, Germany, is an automobile manufacturer that forms the core of Volkswagen Group, one of the worlds four largest car producers. [16] The Ford Motor Company (usually called Ford), is an US multinational corporation that manufactures automobiles. [17] The 1-Series is a range of compact automobiles, the only vehicle in its class featuring rear-wheel drive and an engine oriented lengthwise. It was launched in 2004. [18] The 6-Series comprise of two distinct lines of coupes. The first was the E24, launched in August 1976. In the case, 6-series refers to the second line of the entirely new E63, launched in 2003. [19] Acura is a brand name of luxury automobiles that is part of the Japanese automobile manufacturer, Honda Motor Co., Ltd. [20] The Alfa Romeo is a brand of luxury automobiles, manufactured by Alfa Romeo, an Italian automobile company. It has been a part of Fiat SpA since 1986. [21] Audi is a brand of luxury automobiles manufactured by Audi, a German automobile maker with headquarters in Ingolstadt, Bavaria. It is a wholly-owned subsidiary of the Volkswagen Group. [22] Cadillac is a brand of luxury automobiles that is part of the General Motors corporation. It is produced and mostly sold in the US and Canada. [23] Infiniti is Nissans luxury brand in the US, Canadian, Mexican, Middle Eastern, South Korean, and Taiwanese markets. [24] Jaguar is a British luxury car brand, owned by the Ford Motor Company. [25] Lexus is a brand name of a luxury automobile manufactured by the Toyota Motor Corporation. Toyota Motor Corporation ,is a Japanese multinational corporation that manufactures automobiles, trucks, and buses. [26] Volvo Cars is a premium automobile manufacturer that was previously owned by AB Volvo, the Swedish commercial vehicles manufacturer. Volvo Cars was sold to the Ford Motor Company in 1999. [27] Al Ries and Laura Ries, The 22 Immutable Laws of Branding, 2000. [28] Al Ries and Laura Ries, The 22 Immutable Laws of Branding, 2000. [29] David Kiley, BMW Targets New Drivers, www.businessweek.com, May 5, 2006. [30] Neal E Boudette and Gina Chon, Brawny BMW Seeks the Idea Class, www.moneyweb.co.za, August 2, 2006. [31] Fallon Worldwide is an international advertising agency headquartered in Minneapolis. Fallon operates a micro-network with offices in: London, Singapore, Hong Kong, So Paulo and Tokyo. [32] The BMW film series The Hire began as a series of five short films (each about eight minutes long) produced for the Internet in summer 2001. The films were directed by popular and aspiring directors. All films starred Clive Owen as The Driver. Each films story highlighted the performance aspects of various BMW automobiles. Between 2001 and 2005, eight films were created. [33] BusinessWeek is a popular business magazine considered to be the standard both in industry and among students. It is published by McGraw-Hill. [34] David Kiley, BMW Chooses Texas-based GSD&M as its New Ad Agency, www.businessweek.com, November 14, 2005. [35] GSD&M is an advertising agency located in Austin, Texas, USA. It was founded in 1971 but since 1998, GSD&M has been part of the Omnicom Group. It had done work for Land Rover, but was better known for ads created for Southwest Airlines, Wal-Mart, Krispy Kreme, and the AARP. Agency founder and president Spence had also advised Bill Clinton, and Hillary Clinton, on political marketing strategy. [36] The creative class included scientists, engineers, architects, educators, writers, artists, and entertainers. The creative class was an idea proposed by marketing expert, Richard Florida, a Carnegie-Mellon University professor, who had written three books on the subject. [37] Richard Florida, The Rise of the Creative Class, Basic Books, 2002.
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[38] Richard Florida, The Rise of the Creative Class, Basic Books, 2002. [39] The iPod is a brand of portable media players designed and marketed by Apple Computer. Devices in the iPod family provide a simple user interface designed around a central scroll wheel (with the exception of the iPod shuffle). The standard iPod model stores media on a built-in hard drive, while the smaller iPod shuffle and iPod nano use flash memory.(Source: http://en.wikipedia.org/wiki/IPod) [40] Apple Computer, Inc., headquartered in Cupertino, California, part of Silicon Valley, is a well-known manufacturer of innovative, attractively-designed computer hardware, software, and portable media players like the Apple Macintosh, Mac OS X, and iPod. [41] David Kiley, BMW Targets New Drivers, www.businessweek.com, May 5, 2006. [42] Richard Florida, The Rise of the Creative Class, Basic Books, 2002. [43] BMW Unveils New Ad Campaign, www.strategiy.com, May 9, 2006. [44] Claudia Grisales, GSD&M Takes Different Road with New BMW Ads, www.statesman.com, May 09, 2006. [45] BMW Unveils New Ad Campaign, www.theautochannel.com, May 8, 2006. [46] Neal E Boudette and Gina Chon, Brawny BMW Seeks the Idea Class, www.moneyweb.co.za, August 2, 2006. [47] Zaha Hadid is a celebrated British architect and winner of many international awards. [48] The Pritzker Architecture Prize is awarded annually by the Hyatt Foundation to honor a living architect. Created in 1979 by Jay A. Pritzker and run by the Pritzker family, it is considered the worlds premier architecture prize. [49] BMW Unveils New Ad Campaign, www.theautochannel.com, May 8, 2006. [50] Fallingwater (193639), considered by many as an architectural delight, is a house built over a waterfall and completely integrated with its environment. Seen from below, the house is boldly cantilevered over a waterfall, with its balconies and terraces seemingly suspended in midair. It was designed by Frank Lloyd Wright, an American architect, in 1935. [51] A wrecking ball is a heavy steel ball, usually hung from a crane, that is used for demolishing large buildings. [52] Paul Jackson Pollock (January 28, 1912 August 11, 1956) was an influential American artist and a major force in the Abstract Expressionism movement. His work had a great influence on 20th century art. [53] BMW's New Ad Campaign Brilliant? Should GM be Listening? www.autospies.com, May 10, 2006. [54] A euphemism (also called as doublespeak) is an expression intended by the speaker to be less offensive, disturbing, or troubling to the listener than the word or phrase it replaces. They are often used to hide unpleasant or disturbing ideas, even when the literal term for them is not necessarily offensive. For example the euphemism for providing false information in a job application could be resume enhancement.

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