Magazine article Marketing

News Analysis: Is BMW Risking Brand Suicide?

Magazine article Marketing

News Analysis: Is BMW Risking Brand Suicide?

Article excerpt

With the marque preparing its hatchback debut, Ben Bold asks if it is right to extend below its upmarket roots.

Successful brands build their images over decades, creating personalities to which consumers can relate. Alter the blueprint and you risk the brand, right?

Wrong, says BMW. The marque, for years associated with the upmarket, is creating a hatchback to compete with streetwise cars such as VW's Golf.

But will this application of its premium position to a new segment work, or could it be brand suicide?

The sporty BMW 1 Series will also take on the Audi A3 and Mercedes A-Class. The motoring press predicts that it will be priced from pounds 15,600, positioning it at the higher end of the hatchback market.

Appearing on dealer forecourts from September, the model's challenge is to generate anticipation and desire among the car-buying public, including targeting consumers who would not usually buy a BMW.

A direct campaign through Archibald Ingall Stretton begins this month, and includes direct mail, magazine inserts and a dedicated website.

BMW will add TV advertising to the mix this summer, through WCRS, to ensure awareness reaches a peak by the time the 1 Series goes on sale.

Fierce competition

Given that BMW must depart from its upmarket positioning to move into the mainstream, why is it taking the risk?

Industry experts believe fierce rivalry between the car manufacturers means BMW has little choice.

'BMW has to be seen to be in the same markets as Mercedes and Audi,' says Mark Lund, who heads Vauxhall's ad agency, Delaney Lund Knox Warren. 'In order to survive and prosper, car companies are having to diversify.'

However, a recent FT Deutschland report suggests that both Mercedes and Audi have experienced problems entering the mass market, with the Audi A2 and Mercedes A-Class failing to meet sales targets.

Others believe that BMW's launch of the 1 Series is a deliberate strategy to attract consumers to the brand at a younger age. Its target market is single people aged 25-35, as well as couples with children The idea is to get those buying the model to work their way up through BMW's range of cars.

While the strategy seems shrewd, it does not remove the risk of diluting the marque's prestige. Lund believes that making a traditionally premium brand more affordable makes it less exclusive by definition.

BMW itself, though, believes luxury is no longer synonymous with exclusivity, and that its move into the hatchback market can boost sales without damaging its brand or reducing margins. …

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