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January 2005

Comments

pratiba

i wantv to take details on the origin country of all the great cars like mercedes,bmw,limo,etc....

Jacky Tai

This is the reason why I no longer aspire to own a BMW. They have lost their focus. Hey, even the centre console is no longer angled towards the driver like they used to create the impression that this is a driver-focused car. And BMW has uglified their cars so much that they don't look particularly fast or driver-oriented anymore. The new E90 3 series looks boring from the front, messy from the side and like a Mitsubishi from the back. The last "real" BMW is the E46 M3. BMW is in danger of losing its place to Lexus. The new GS300 is simply gorgeous (and well made) inside out. Drives very well too.

Anarita  S Smith

Dear Ries,

I would like to ask you if you know how to make a recod CD, then market it in Western Country especially if I sing it in Ethnic Indonesian words.Woulod it be good to try or not ? Waiting for your comments.
P.S. I sang it in Tsunami Appeal and Unicef Show in Hull 2005.

Thomas

I don't get it. Why on earth would some think that searching for additional revenue growth is a neccessary strategy, if your brand, (BMW), as-is, delivers $3.5 billion in operating profit, with a small product line, and on far fewer unit sales than competitors? Reinvent it? Extend it? Why? Ego? BMW was anything but stale. That's the holy grail of auto-industry profit models! The over-focus on top-line growth and market share these days is amazing. Both are way overrated, and seem to be the demise of brand after brand. Does everyone want to be GM? GM: OK, let's reinvent THAT. Ford, too. Both should forget the topline unit/share panic for a couple of years, and figure out how they are going to be relevant global brands again in the future, with meaningful products in key categories, all having global demand, without $3500 in incentives required to get folks to consider them. Meantime, trim a couple of brands from the stable, trim the product offering by 50%, lower the forecast, and stop the oversupply insanity. Take the stock price hit NOW, in hopes of being around still, 20 years from now.

Sebastian Ware

Reinventing the brand is not always bad. Having the brand go stale is much worse. The big question is what the core assets are. In the case of McDonalds, this is surely a highly tuned logisitics system. They can deliver anything, anywhere, with close to 100% accuracy. Burgers was just a way of getting there.

From Business Review Online:

While nobody should be sounding the death knell of burger and fries quite yet, McDonald's says that its new range of healthier options - typified by salads and deli wraps - have proved a hit with many customers and have contributed to a 5% rise in European same store sales in January 2005 against the year before. In pushing its new range forcefully with a series of high profile adverts, McDonald's has reacted positively to changing consumer needs - and, while it is unlikely ever to become health fiends' eatery of choice, the chain has made laudable efforts to address the concerns leveled against it.

Bruce DeBoer

Let me pose a question to you Laura:

Let's say I'm the CEO of BMW. My brand is mature; any increase in market share that I can eek out won't effect my bottom line in a dramatic fashion but I'm still feeling the heat from the Board. Any additions to the car line would prove canibulistic unless I consider approaching new markets. However, I'm a good brand manager and don't want to dilute it.

How do I increase revenue without making a BMW Mini Van?

Bruce DeBoer

I like Nick's discussion points. Many companies have successfully extended a brand. BMW can do it but I think the Mini Van would take it too far [I have to side 1000% with Laura on this) - I'm a little gray on the SUV but I don't think it "clear cuts" the brand image.

GM's strategy to create Chevey, Buick and Cadillac way back when helped solve the extention problem (until they blew it). I know it was an American invention but perhaps BMW could take a lesson from us. No excuses for Porsche though.

Bruce DeBoer

Porsche: There is no Substitute. More specifically a Porche SUV. UGH! I almost cried.

BMW, Mercedes, Porsche - Build the brand or harvest the brand - why do companies have such a difficult time with that concept? Watch out, Volvo maybe next. I haven't seen them hammer saftey as hard as they once did.

- bruce

Nick Corcorran

The Paradox of BMW's slogan.

"The Ultimate driving machine" is probably one of the greatest slogans ever written. It appeals to the post-industrial revolution idea of progress, of man's unification with technology, and also, to man's ego.

A machine is an element that can be controlled, something built by us for us. In calling a BMW the Ultimate driving machine it in a way tells the buyer that he/she is the ultimate driver. In terms of a skill set, the BMW Z8 is a complicated piece of machinery, a phrase our fathers love to use, and only the properly skilled drivers can fully utilize the capabilities of a BMW.

However, there is one problem with the slogan. It reference one machine, whereas, BMW the factory produces several cars already. So I ask you, which is the Ultimate BMW. Is it The Z3, Z8, the new Z4, the M3, the M5?

If BMW was truly a hard-core niche manufacturer, they would make one car, like Burberry makes one print, and they would charge half a million dollars for it.
But we live in a consumer based society, nothing new there, and people want options. They want to be able to "fit" there cars to fit there personalities. The ultimate idea of accessorizing has got to be cell phones- a different cover for different days of the week and a different ring tone for each friend. the only way companies like Burberry sticks around is there appeal to the upper-class and as a symbol of status, since their print seems impervious to fashion trends.

I think a distinction should be made on the various meanings of growth. There is product growth (as in the number of products a company offers, ideally expanding its client base) and then there is pure growth of the market. In BMW's case, if they stick to social climber's the rationale under a booming economy is that more people will start making enough money to afford a BMW, and the company can grow. But what happens when that number is static or begins to decrease? Or what if they start making so much money that they want to be seen as established and not just climbing?

The underlying drive in my support for BMW’s move to expand is two-part. The first is faith in the product. I would love to see a mini-van by BMW, they might reinvent the class. However, the second, and as a creative writer the one closest to my heart, is the idea of persuasion. If my mother had told me that black was white when I was a kid, I would have looked pretty dumb on the first day of kindergarten. Persuasion involves many concepts, most importantly the question of authority- what credentials do you have, what makes you an expert. My mom was simply my mom. And once everyone told me she was wrong I would have to change my thinking. Which goes to the question of proof. If BMW wants the longevity it needs to make a good product before anything else.

sarthak

Hey laura,

Quite agreeable there are you. In fact a last year's post of mine stands pretty kindred. And the target's not amazingly the same... BMW. A comment on last year's Series 1 launch. Catch it here at:

http://consumercy.typepad.com/consumercy/2004/09/revenue_success.html

This truly is consonance from yonder.

Stay Well.

Max Blumberg

I agree wholeheartedly.

Dave J pointed out that your thoughts on BMW are similar to mine on Apple's latest move (though I suspect our thinking is influenced by the same person!):

http://maxblumberg.typepad.com/dailymusings/2005/01/apple_take_note.html

Kind regards

Max

Tom Greg

Well, though I´m not a hardcore fan of everything "immutable" that comes from Al and Laura Ries, especially after reading some of Dan Herman´s articles, this time I have to say "thank you for a good point Laura"! BMW minivans?! You must be kidding me... But you know what? Probably they´re going to market those minivans in "Sheer Driving Pleasure" tag-line markets :-)
Great blog! Have a good day

TG


Btw. here is some BMW official artillery fire:
***
BMW Group sales increase yet again in 2004

The BMW Group has achieved a clear growth in volume sales in 2004 with an increase of 9.4%. World-wide, 1,208,724 BMW, MINI and Rolls-Royce cars were delivered to customers (prev.yr.: 1,104,916). The BMW brand passed the million mark for the first time in the company's history, with 1,023,575 automobiles sold. This is an increase of 10.3% compared with the previous year (928,151).

For the BMW brand, the new models in the BMW 1 Series, the BMW X3 and the BMW 6 Series met with an extraordinary positive reception in 2004. The company has entered three new market segments with these innovations in just nine months....

After its product and market offensive of recent years, the BMW Group is ideally positioned to move into the future. Helmut Panke commented as follows: "Our product portfolio and our international presence are more comprehensive than ever before. We will resolutely continue to utilise further market potential available to us in the future too."

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