DEGREE PROJECT, IN INFORMATION AND COMMUNICATION TECHNOLOGY , SECOND LEVEL STOCKHOLM, SWEDEN 2014
CONQUERING A NEW CUSTOMER SEGMENT
INNOVATIVE MEDIA CONCEPT FOR THE PRE-LAUNCH COMMUNICATION OF THE NEW BMW 2 SERIES ACTIVE TOURER
GERALD HEIDEMANN
KTH ROYAL INSTITUTE OF TECHNOLOGY
MASTER’S THESIS AT SCHOOL OF COMPUTER SCIENCE
DEGREE PROJECT AT CSC, KTH
CONQUERING A NEW CUSTOMER SEGMENT:
INNOVATIVE MEDIA CONCEPT FOR THE PRE-LAUNCH COMMUNICATION OF THE NEW BMW 2 SERIES ACTIVE TOURER.
Gerald Heidemann KTH e-mail: [email protected] Degree project in: Media Management Supervisor: Rosenqvist, Christopher (SSE) Examiner: Li, Haibo (KTH)
Abstract
The BMW 2 Series Active Tourer is a brand new car concept for the company and will be launched in Sweden at the end of September 2014. It will compete in the compact MPV (Multi Purpose Vehicles) segment with established competitors like the Mercedes Benz B- Class. Therefore, BMW Sweden has the goal to win new customers and unknown target groups, in order to conquer the market.
To support BMW in this matter, this research shows systematically, who the new customers are, what they prefer, how they consume media and which communication concept will be the most effective one. The potential customers are divided into two target groups, one can be described as young, active families with one or two children and a high interest in outdoor activities. The other target group is defined as an elderly, retired but also very active couple, where the children moved out already and the free time is spent wisely in the nature, working in the garden or taking care of the dog.
Besides the knowledge about preferences and demands of the target group, the right timing and effective media channels provide the key to a successful marketing campaign. Unfortunately, the timing was preset on the summer holiday period. Thus the right channels for these new circumstances had to be defined and the empirical research of this thesis delivered this definition. The final answer to the research question is given by the creative concept:
The best way to communicate the new BMW 2 Series Active Tourer to the target groups “Livliga familj” and “Rörliga paret” is the interactive and innovative BMW ActivityGenerator. It’s the perfect support for the active lifestyle of the potential customers and provides them a real benefit in everyday life. The advertising for the AT is smoothly integrated and the concept is adaptable to all channels, which were identified as most effective during the campaign period.
Sammanfattning
BMW 2-serien Active Tourer är ett helt nytt bilkoncept för företaget och kommer att lanseras i Sverige i slutet av september 2014. Bilen kommer att tävla i det kompakta MPV (Multi Purpose Vehicles) segmentet med etablerade konkurrenter som Mercedes Benz B-klassen. Därför har BMW Sverige som mål att vinna nya kunder och hittills okända målgrupper, för att erövra marknaden.
För att stödja BMW i denna fråga visar denna forskning systematiskt vem de nya kunderna är, vad de föredrar, hur de konsumerar medier och vilka kommunikationskoncept som kommer att vara de mest effektiva. De potentiella kunderna är uppdelade i två målgrupper, de som kan beskrivas som de unga, aktiva familjerna med ett eller två barn och ett stort intresse för friluftsliv. Den andra målgruppen är definierad som ett äldre pensionerat men också mycket aktivt par där barnen redan flyttat ut och fritiden spenderas i naturen, med trädgårdsskötsel eller genom att ta hand om hunden.
Förutom kunskapen om målgruppens preferenser och krav, är rätt tidpunkt och effektiva mediekanaler nyckeln till en lyckad marknadsföringskampanj. Lanseringen är planerad att ske på semestertid. Alltså måste de rätta kanalerna för dessa nya förhållanden definieras och den empiriska forskningen i denna avhandling levererade denna definition. Det slutgiltiga svaret på forskningsfrågan ges av det kreativa konceptet:
Det bästa sättet att kommunicera den nya BMW 2-serien Active Tourer till målgrupperna "Livliga familj" och "Rörliga Paret" är den interaktiva och innovativa BMW ActivityGenerator. Det är det perfekta stödet för potentiella kunder med aktiv livsstil och ger dem en verklig fördel i det dagliga livet. Reklamen för AT är smidigt integrerat och konceptet är anpassningsbart för alla kanaler som identifierades som mest effektiva under kampanjperioden.
Acknowledgement
I would like to thank my supervisor Christopher Rosenqvist from Stockholm School of Economics for his advice and support in the realization of this research paper. Additionally I would like to express my gratitude to my colleagues at BMW, the Marketing team of BMW Sweden and my former Product & Price team, without your support and openness this project would not have been possible. Last but not least, a big thank you to my family, my friends and my love.
Table of contents
1. Introduction ...... 1 1.1 Background ...... 1 1.2 Purpose of the thesis ...... 2 1.3 Research Question ...... 2 1.4 Structure of the thesis ...... 4
2. Theory ...... 5 2.1 The Foundations of Marketing ...... 5 2.2 Segmentation, Targeting and Positioning ...... 7 2.2.1 Segmentation ...... 7 2.2.2 Targeting ...... 10 2.2.3 Positioning ...... 11 2.2.4 Media concept ...... 11 2.3 Theory Limitations ...... 13
3. Research Strategy – Conquering a new customer segment...... 14 3.1 Delimitations ...... 15 3.1.1 General Limitations ...... 15 3.1.2 Positioning ...... 15 3.1.3 Media Concept - Promotion ...... 16 3.2 Methodology ...... 16 3.2.1 Primary and Secondary data ...... 16 3.2.2 Quantitative, Qualitative and Mixed Methods ...... 17 3.2.3 Methodological Eclecticism ...... 18 3.2.4 Focus Group ...... 19 3.2.5 Online Survey...... 20 3.2.6 Limitations ...... 21
4. Results ...... 23 4.1 Analytical Phase ...... 23 4.1.1 Product ...... 23 4.1.2 Characteristics and consumer behavior ...... 25 4.1.3 Premium Market and competition in Sweden ...... 26 4.2 Strategic Phase ...... 27 4.2.1 Segmentation ...... 28 4.2.2 Targeting ...... 30 4.2.3 Positioning ...... 31 4.3 Media Concept ...... 37 4.3.1 Product ...... 37 4.3.2 Price ...... 38 4.3.3 Place ...... 39 4.3.4 Promotion ...... 39 4.3.5 The creative idea ...... 45
5. Conclusion ...... 49 5.1 Discussion ...... 49 5.2 Future research ...... 51 5.3 Summary of Key Findings ...... 52
List of References ...... 54
Appendix A – Focus Group Memo ...... 56
Appendix B – Online Survey Questions and Results ...... 62
Appendix C – Vroom Market Analysis ...... 75
Appendix D – Lowe Brindfors Segmentation Input ...... 82
List of figures
Figure 1: BMW 2 Series Active Tourer design (own collage, pictures from bmw.de) ...... 1 Figure 2: Structure of the thesis (own creation) ...... 4 Figure 3: The research strategy (own creation, based on animation from video: https://www.youtube.com/watch?v=_0yFXLA6YW0, at 2:36min) ...... 14 Figure 4: Research strategy - Methodology ...... 17 Figure 5: Research strategy - Analytical Phase ...... 23 Figure 6: BMW 2 Series Active Tourer design (own collage, pictures from bmw.de) ...... 24 Figure 7: Research strategy - Strategic Phase ...... 27 Figure 8: BMW 2 Series Active Tourer exterior design (own collage, pictures from BMW Press portal) ...... 32 Figure 9: Results Online Survey - Exterior ...... 32 Figure 10: BMW 2 Series Active Tourer interior design (own collage, pictures from the BMW Press portal) ...... 33 Figure 11: Results Online Survey - Interior ...... 34 Figure 12: BMW 2 Series Active Tourer versatility (own collage, pictures from BMW Press portal) ... 35 Figure 13: Results Online Survey - Versatility ...... 35 Figure 14: Research strategy - Media Concept ...... 37 Figure 16: Results Online Survey - Internet via phone usage ...... 41 Figure 15: Consumption scale ...... 41 Figure 17: Results Online Survey - Internet via computer usage ...... 42 Figure 18: Results Online Survey - Television consumption ...... 42 Figure 19: Results Online Survey - Newspaper usage ...... 43 Figure 20: Results Online Survey - Magazine usage ...... 43 Figure 21: Online banner for BMW ActivityGenerator (own collage, pictures from Lowe Brindfors) .. 45 Figure 22: Online banner for BMW ActivityGenerator (picture from Lowe Brindfors) ...... 46 Figure 23: Online banner for BMW ActivityGenerator (picture from Lowe Brindfors) ...... 47 Figure 24: Online banner for BMW ActivityGenerator (picture from Lowe Brindfors) ...... 47
List of tables
Table 1: Medium most comfortable consuming advertising (Data from Online Survey) ...... 44 Table 2: Key findings of this thesis ...... 53 List of abbreviations
MPV Multi Purpose Vehicle
AT BMW 2 Series Active Tourer
SEK ISO code for Swedish krona
NPS Net Promoter Score
POS Point of Sale
MTB Mountain Bike
1. Introduction
“The future belongs to those who dare.”
Dr. Norbert Reithofer, Chairman of the Board of Management of BMW AG (Munich, 14th May 2013)
1.1 Background
The future, of which Mr. Reithofer is dreaming about, is a strong BMW brand, leading the premium car segment worldwide with high sales numbers and rising profitability. To achieve this scenario he dares to throw traditional brand values into disarray and introduces the first front-wheel driven BMW ever: the 2 Series Active Tourer.
Figure 1: BMW 2 Series Active Tourer design (own collage, pictures from bmw.de)
During the last years, the company was increasing their model portfolio significantly. One of their new models will be the “2 Series Active Tourer”, which opens a completely new market for BMW. This model will be placed in the “Compact MPV” (Multi Purpose Vehicle) segment as a premium and sportive alternative to existing competitors. The cars are characterized by short measurements outside and a lot of space inside. Usually they are built quite high to create a great roominess on the back seats and additional space in the trunk. The segment already exists since years and is dominated by Renault, Mercedes and Ford. Accordingly, they had the chance to gain a lot of experience and knowledge concerning their customer’s
1 needs, behaviors and preferences. All this is mainly unknown for BMW. Following, it is necessary to examine and research the potential customer’s characteristics and attributes. To regard the regional differences, this has to be done in a detailed way for every country the car will be launched in. To support the marketing team of BMW Sweden, this research focuses on potential Swedish customers and the best way to get them in touch with the new product.
1.2 Purpose of the thesis
The purpose of this master thesis is basically to give BMW Sweden a better understanding and knowledge about the newly targeted customer segment. Furthermore the goal is to develop media and communication actions to raise awareness and interest for this new model in the segment. This includes a precise definition of the segment and the target group, followed by a research about their media behavior and consumption with the special focus on the summer holiday time. Having this as a base, the goal is to identify the most effective and most used media channels, where customers can be reached and targeted in the best way. Together with the input of a communication agency, the creative concept, the media measures and channels will be defined and portrayed within this thesis.
1.3 Research Question
From this described purpose naturally arises the research question, which is to be answered within this thesis:
(RQ) How can BMW communicate the new “2 Series Active Tourer” to an untouched customer segment in the best way?
As is it quite a challenge to find a spontaneous answer to this, the question needs to be divided a bit into its pieces. First of all, it is important to define the right segment in which this new model will be launched, then it is important to look at the customer in detail – who are we targeting? And finally it needs to be examined how to communicate most effectively
2 with the potential customer. These small parts of the research question lead to the sub- questions of this thesis, which also have to be considered:
What is the definition of the segment and target group?
How is this target group using and consuming different media channels today?
Is there a significant difference in their consumption characteristics during the summer holiday time? (when the car will be communicated for the first time)
3 1.4 Structure of the thesis
1. - Pointing out the focus of this thesis Research Question - Main research question and sub-questions
2. - Focusing on the theory of Marketing and Segmentation Theory - Picturing existing limitations
3. - Building up the research strategy according to: Research Analytical Phase / Strategic Phase / Media Concept Strategy - Methodology discussion
4. - Introduce findings and insights of empirical research Results - Showcase the results within the Research Strategy
5. - Discussion of results and the research questions Conclu- sion - Suggestions for further research
Figure 2: Structure of the thesis (own creation)
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2. Theory
With regard to the topic of this thesis, the core research fields are market segmentation, approaching new customers and creating a media concept. All of these are the essential parts of Marketing as we know it today. The development towards a profession with intensive market research has started already many years ago. Marketers now and then wanted to understand what the customers really need.
2.1 The Foundations of Marketing
It was until the 1950s that classical economics were the way how to view the market and the consumers. Meaning, that this ideology didn’t see any difference between each and everyone’s demand characteristics and interests. This went totally in line with the idea of mass production and traditional industrialization. During the height of this period, all marketing practices were aimed at promoting mass consumption (Sheth & Parvatiyar, 1995). Further, Sheth & Parvatiyar (1995) point out, that the marketer’s focus was lying more and more on sales and promotion of goods, less on building ongoing relationships with the consumer. This illustrates a break with the traditional relationship-orientated marketing, where the trade was a direct transaction between customer and producer and so always had a personal touch to it. Marketers rather jumped on the “economies of scale train” and focused on spreading mass produced goods through their distribution channels as fast as possible. Around that time in the 1950’s, the later period of the industrial era, there emerged two developments which started to change the mass production focus of marketing (Sheth & Parvatiyar, 1995). One was the marketer’s realization, that a repeated purchase of customers was key for the business. What came along with this realization was a rising focus on quality, customer satisfaction and brand loyalty. The other important change was the development of administrated vertical marketing systems (McCammon, 1965) where marketers gained more control of the distribution channels. Nowadays very well known
5 1. 3. 5. 2. 4. Research Research Conclu- Theory Results Question Strategy sion systems, like franchising and exclusive distribution rights, empowered the producers, cut out the middlemen and brought them again closer to the customer. When markets came to maturity and the competition got harder, it became more and more important to know your customers well. The distinctive character of certain consumer groups got highly relevant for the companies. The identification of different needs and behaviors was emerging to a key marketing tool. Having this knowledge, the next step was now, to please these needs and differentiate from the competition. A perfect picture of the disparity between market differentiation and market segmentation is provided by Wendell Smith (1956). He sees differentiation as a step out of the normal, uniform supply from a producer for a market. Here, the unique product has to find its customers. For Smith (1956) differentiation is “the bending of demand to the will of supply.” Segmentation, on the other hand, is guided by developments on the demand side. It underlies a research and analysis of consumer needs and requirements. The goal is to fulfill these demands with precisely adjusted products and marketing effort (Smith, 1956, p.6).
What Smith (1956) emphasizes, is that marketers have to take a much more active role in finding out what the consumers really want. To that time, this really takes it to another level, because one thing is to realize that there are several groups of customers who have common interests and it’s not just one big mass market. But to start tailoring the product development, production and marketing communication towards specific customer needs, really makes the difference.
With this article in the Journal of Marketing, Smith (1956) has written the importance of market segmentation and product differentiation in stone. For years, the fact that markets should be divided into segments, characterized by similar consumer behavior and socioeconomic, demographic or psychological attributes, was in the center of attention. Until today this foundation of strategic marketing is valid and has become one of the cornerstones of modem marketing science and practice (Gunnarsson, 1999).
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2.2 Segmentation, Targeting and Positioning
“Any customer can have a car painted any colour that he wants, as long as it is black”
Model T philosophy by Henry Ford (1909)
This philosophy, of one of the first producers who applied line manufacturing in the mass production of automobiles, is no longer valid in our world. It makes you even smile a bit from a today’s view. No one could imagine that all cars drive around in the same color, predefined by the manufacturer. In our world, different customers drive different cars with a different color and different leather interior. This is made possible by companies, which respond to diverse preferences and needs, demanded by the market. They moved away from mass marketing, towards a targeted marketing strategy which puts the focus on a specific customer group. The characterization and identification of these customer groups is, like mentioned before, the market segmentation. Moving from the mass production example of Ford in the early 20th century to the modern product portfolio concept of BMW, this development of market segmentation is clear to see. About 15 years ago, BMW started to enlarge their product portfolio, coming from three premium models (3, 5 and 7 Series), introducing three new Series (1, 6 and X5), resulting in a good mixture of six different products in 2001 (BMW, 2001). Today, only a few years later, we are talking about a product portfolio of 19 models with an immense variety of available engines. This is an example of successful market segmentation, where all models are able to co-exist because each of them pleases different needs and preferences. The process, by which segmentation takes place, consists of three main elements: segmentation, targeting and positioning (Kotler, 1988).
2.2.1 Segmentation
How to segment a certain market can vary a lot, it depends on the product, the market and the company’s intention. In consumer markets it is common to use the differentiation by
7 1. 3. 5. 2. 4. Research Research Conclu- Theory Results Question Strategy sion age, sex and personality (Engel et al., 1990). Dibb and Simkin (1991, p. 6) tried to provide a more detailed overview of how to segment a certain market: A basic characterization of potential customers can be done by demographic variables like age, sex, family and religion. Also Socioeconomics might play an important role when the company wants to differentiate in terms of income, occupation, education and social class. One of the most important factors is also the geographical location which includes country, religion, type of urban area and type of housing. Further differentiation might appear in certain branches, where specific attributes need to be segmented. For example holiday companies often use the lifestyle as an indicator to create certain offers for young singles or senior citizens (Plummer, 1974).
Beyond this basic characterization, Dibb and Simkin (1991, p. 6) talk about product-related behavioral characteristics, which describe in more detail the consumer relation to the product. They separate between
Purchase behavior The Versace customer follows a different behavior than a Primark shopper. The one is highly focused on the brand and loyal to it and the other one is just price orientated and has no special bond to the brand.
Purchase occasion The situation and reason for a purchase can differ a lot. A motorist, whose bike broke down, has to make an emergency purchase and will not care too much about the price. Another customer might have all the time he needs and can compare online stores to make the best buying decision. Distress purchases of this kind rely particularly on fast distribution and availability.
Benefits sought When customers buy toothpaste they seek different benefits (Haley, 1968). For some, fresh breath and taste are essential while for others, fluoride protection is the key. The main benefit stands in the center here and absolutely depends on the consumer’s need.
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Consumption behavior and user status Examining consumption patterns can indicate where companies should be concentrating their efforts. Light or non-users are often neglected. The important question to ask is why consumption in these groups is low.
Attitude to product Different customers have different perceptions and preferences of products. This already starts with the image of a brand, then personal experiences add to that feeling and finally, of course, the product and the presentation has to be convincing. A company is always able to influence and improve each of these impressions.
Once, all of the potential customers have been characterized and put into segments, it is still necessary for a segment to fulfill several criteria to be defined as effective (e.g., Frank, Massy and Wind, 1927; Loudon and Della Bitta, 1984; Baker, 1988; Kotler, 1988).
Identifiability It must be possible to clearly identify the segments and to measure them. Demographic, psychological and behavioral characteristics are the common tools to identify and measure segments.
Substantiality The market segment should be large enough to be profitable. A homogeneous group which is attractive and big enough to tailor a marketing strategy for it.
Accessibility A marketing campaign is a waste of money if it doesn’t reach the targeted customer. The accessibility of a customer segment is crucial for the company. The marketing measures must have an impact on the segment. So it has to be clear from the beginning which communication and distribution channels are the most effective to reach the segment group.
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Stability Ensuring to be consistent and remaining the same over a longer period of time, long enough to be able to take actions.
Responsiveness The segment needs to be responsive to the marketing measures targeted towards them. If a campaign doesn’t find any response from the audience then the segment is ineffective.
Actionability The company must be able to tease the segment with marketing measures. Actions must take place and find positive response.
After the clarification of how to segment a market and which criteria an effective segment has to fulfill, it is now time to target specific segments.
2.2.2 Targeting
As soon as the segments have been identified, the decision has to be made how many and which customer groups should be targeted. The options are pretty clear (Dibb et al., 1990): either the company focuses on a single segment with one product, or one product will be offered in several markets. Furthermore also different products can be targeted to several segments. However the decision is made, in the end it depends a lot on the market, so there is no right and wrong. All of the strategies have brought up successful examples.
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2.2.3 Positioning
After the segment is defined and wisely chosen, the product has to find its place in the market. The positioning represents the "sharp end" for marketers: the product's image relative to its competitors in the consumer's view (Ries & Trout, 1981). It is crucial to present the best answer to the needs and demands of the targeted audience. This best answer does not only depend on the product itself, it is the image which is created in the minds of the potential customers. The challenge is to paint this picture in exactly that way how it is desired by the target group.
To find the right position depends on several variables which are important to the consumer and vary from market to market. In the fashion business it might be the design and the price, whereas the service level might decide the choice of a hotel. Here in-depth market research is necessary to get to know the customers motivations and expectation in a certain market.
How do consumers perceive the product?
Exactly this is one core question of the empirical research in this thesis, because it builds the foundation for developing the perfect media concept.
2.2.4 Media concept
A successful marketing mix or media concept can be created in any imaginable way. Basically it just describes the perfect mix of communication channels and marketing measures. The best definition and the best approach to create a successful media concept is the 4 P’s strategy (McCarthy, 1960). They stand for Product, Place, Price and Promotion. A good way to understand what every “P” means, is to look at the questions which have to be answered in order to define every element.
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Product Which needs of a customer does the product satisfy? What attributes does it have to meet these needs? Which are unnecessary, which did we forget? How and where is the customer using the product? What does it look like? Size? Colour? Name? How does the product differ from the competition?
Place Where can our product be found by the customers? Which distribution channels are used? How can the distribution channels be accessed? Does the product need to be presented on trade fairs, magazines or online? What is the competition doing?
Price What is the actual value of the product to the buyer? Are there already existing established price levels in the market? How price sensitive is the customer? Should there be any special offers to certain groups in the segment? How is the price comparison with the competition?
Promotion Where and when can we send the marketing message to the target audience most effectively? Which communication channels are the best to use? When is the best time for communicating? What is the competition doing and how does that influence our marketing activities?
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Having answered all of these questions, and probably even some more, the frame is set for a successful and optimized marketing mix. What makes it really successful in the end, is to cater for the consumer needs and to adjust product and marketing according to these needs. To sustain continuous success, it is crucial to keep on working on these factors and to call all elements of a media concept into question.
2.3 Theory Limitations
Debates about the actual value of segmentation are constantly cropping up in the marketing community. Speaking about “mindless” segmentation (Hoek, 1996), it has to be discussed if marketing strategies based on segmentation actually affect the bottom line. Those discussions are always very hard to support with real evidence, so a final judgment is hard to find without real proof. But this is a general problem in marketing, it was never the goal and never really possible to make marketing a calculable business, where a clear return on investment can be defined. The same goes for segmentation and the impact it might have or not. But so far this strategy has proven quite well, so it can’t be all that wrong.
Another critical point, which was mentioned sometime before already, is the attempt to generalize the process of segmentation and the creation of media concepts. It is basically impossible to provide one perfect strategy for completely different businesses. The solution always depends a lot on the individual situation and the market environment. What can be done from the marketing theory side, is to provide the tools for a proper segmentation, targeting and positioning strategy, as presented in the chapters before. Giving the chance to utilize “marketing research, management and behavioral science concepts and methods as a tool for better marketing decisions” (Wind and Thomas, 1982, p. 18).
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3. Research Strategy – Conquering a new customer segment
After presenting the theory foundation for this thesis, the following chapter should reveal the strategy on which the solution finding for the research question is based on. The goal is to conquer a new customer segment and all the tools which are necessary to achieve that goal have been discussed. The following illustration presents a clear overview of the research strategy for this thesis:
Analytical Strategic Media Phase Phase Concept
Product Product Segmentation (central)
Price Characteristics and consumer behavior Targeting (central) Place Market and competition Positioning Promotion (local)
Figure 3: The research strategy (own creation, based on animation from video: https://www.youtube.com/watch?v=_0yFXLA6YW0, at 2:36min)
The Analytical Phase contains important insights of already existing facts and given premises. The purpose here is to set the stage and bring together central preconditions and the local market situation. Central, in this case, means from the center of the company, which is the headquarter of BMW in Munich, Germany. There, all the important decisions are made, concerning the product. Additionally, the global communication department in Munich provides all the markets with central research and information material. On the
14 1. 3. 5. 2. 4. Research Research Conclu- Theory Results Question Strategy sion market side, locally, the own competitor environment and the market situation should be analyzed.
In the Strategic Phase the whole market strategy for the AT (BMW 2 Series Active Tourer) in Sweden has to be defined. Tailored to this market, a precise segmentation, targeting and positioning process needs to be in place. Here the central premises only play a subordinate role and the focus lays merely on the Swedish market and the potential customers.
When the desired market position is defined on the paper, an innovative Media Concept needs to implement those ideas. The 4 P’s constitute the core of this marketing strategy and point out the importance of considering each and every step.
3.1 Delimitations
3.1.1 General Limitations
It’s in the nature of a master thesis, that not all parts of this research strategy can be processed with the same dedication. In the end, it is just the available amount of time which limits the fields of research in this thesis. Although every part of the presented research strategy will be examined. But within the scope of this thesis, the focus has to be put on specific parts of the whole process. The own primary research, with gathered data from an online survey and a focus group interview, is geared towards these two focus areas of the thesis:
3.1.2 Positioning
The positioning in the market is the key element to develop later a fitting media concept. The actual position of a product in the market is displayed by the image, which the consumers have of this product. This is why a big focus in this thesis is put on the customer perception of the product. In the theory chapter the key question for the right positioning was mentioned:
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How do consumers perceive the product?
Exactly this is the core research in terms of positioning.
3.1.3 Media Concept - Promotion
The other focus area of this thesis is the last “P” of the media concept. The promotion of the new BMW constitutes a big challenge, as it will differ a lot from the usual. Especially the launch date of the campaign needs to be treated special, because it lies exactly in the summertime. Most of potential customers will follow a different media behavior when they enjoy holidays and spare-time. Which channels should be used and when is the best time to communicate – these are the core questions in this focus area.
3.2 Methodology
After the clarification of the research problem and the definition of the research strategy, the task of data collection begins. To do so, the right method has to be chosen, starting with the differentiation of primary and secondary data.
3.2.1 Primary and Secondary data
All self collected data like results of experiments, clinical trials, social science or research results are defined as primary data (Steward, 1992). This is a direct source with fresh and untouched data. Secondary data, on the other hand, has been collected by someone else and was already interpreted in some way. Here we are talking about analyzes, interprets and scientific discoveries. With the help of the research strategy, visualized in the following illustration, it is clear to identify the primary and secondary sources for this thesis.
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Analytical Strategic Media Phase Phase Concept
Product Product Segmentation (central)
Price Characteristics and consumer behavior Targeting (central) Place Market and competition Positioning Promotion (local)
Figure 4: Research strategy - Methodology
The secondary data (light blue) is the Product, Characteristics and consumer behavior, Product, Price and Place. All of these parts rely on information given by the BMW headquarter. Information which is not provided in a raw data package, rather deeply analyzed, interpreted and well thought through. Primary data (dark blue) are Market and Competition, Segmentation and Targeting; which is first hand data, gathered together with the market research company “Vroom” and the creative agency “Lowe Brindfors”. The parts Positioning and Promotion (dark blue; red border) build the core of this thesis, as described before, and provide primary data with own data collection.
3.2.2 Quantitative, Qualitative and Mixed Methods
According to Kothari (2004), quantitative research is based on the measurement of amount and quantity. Here, often experiments and surveys are used to statistically proof or disprove hypotheses. But when the research is interested in investigating the reasons for human behavior, why people think and do certain things, we are talking about qualitative research. Here, the research aims at discovering the underlying motives and desires, using in depth interviews for example (Kothari, 2004).
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With more and more complex research questions and more and more available research tools, mixing methods has also become quite common. Especially during the last years this method has lost its image of being just a hybrid of quantitative and qualitative approaches. It has almost become a distinctive approach on its own (e.g. Creswell, 2003; Johnson and Onwuegbuzie, 2004).
In the end, not only the way of collecting the data is the key, also the results of every method will please different needs and should play an important role when choosing the methods. Webster et al. (2006) points out the limits of a qualitative research: “While qualitative methods allow an investigator to delve deeply into a given topic, results are usually not generalizable to large groups of people.” This indicates that the results only can be used quite individual and display very deep, but subjective insights. Whereas the quantitative research can be used, to develop statements which are applicable to a larger amount of people. The high number of answers to the same questions or experimental tries, allow a generalization to a certain extinct. “Quantitative research embodies a view of social reality as an external, objective reality” (Bryman and Bell, 2007).
The researcher now has to decide which results deliver the best arguments for investigating the research question and accordingly has to choose the best method. The term Methodological Eclecticism describes the act of selecting and creatively integrating the most appropriate techniques from a wide variety of quantitative, qualitative and mixed strategies, in order to thoroughly investigate the phenomena of interest (Teddlie & Tashakkori, 2010, 2011).
3.2.3 Methodological Eclecticism
The base, for all further decisions and the choice of methods, was a detailed literature study and especially the analysis of the received secondary data from BMW. To answer the research question of how to communicate the new AT towards an untouched customer segment, it was necessary to elaborate the product itself first. Additionally it was interesting to see how the communication highlights were defined for this car from the headquarter.
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After this analysis of “what do we have?” the question aroused “how is it perceived?”. Accordingly, this was the first challenge which needed to be solved. One idea was to ask this question to as many persons as possible, to get a feeling of what is attractive about this car and what not. The second thought was, if someone asks me how I like a certain car, I usually start looking at it closely, open the trunk, sit inside of it and test- drive it, to really have a proper answer to that question. After these thoughts it was clear, that a detailed feedback was needed but also the opinion of a broad audience. A qualitative method as well as a quantitative one is the perfect choice for this.
The other challenge, which still needed to be faced, was “how to communicate this car?”. That includes the definition of the best channels and the most effective timing for a launch campaign, not to forget a good campaign itself of course. But in terms of channels and timing, the real problem here was, that the whole media campaign would run during the summer holiday time in Sweden (the reasons for this will be explained more detailed in chapter 4.3.4. Promotion). The unknown factor was, how does the media usage of potential customers change from a normal workday compared to holiday time. To get a reasonable feedback to this question, which also has to be representative on a bigger scale, again qualitative and quantitative methods are the way to go. Therefore, both thesis focus areas (Positioning and Promotion) could be combined in one qualitative and one quantitative research.
3.2.4 Focus Group
According to the reasons mentioned before, in depth feedback, on how the car is being perceived, is provided best by a qualitative method. The most common qualitative method in research is a personal interview. The goal was, within this thesis, to retain personal opinions, but furthermore should the participants be given the possibility to have discussions in the group. These discussions are often revealing new sites of a product which may not have been noticed by everyone on their own. So one group member might dislike a certain part of the car, where others would never have thought of and could jump into the
19 1. 3. 5. 2. 4. Research Research Conclu- Theory Results Question Strategy sion discussion. Therefore a Focus Group provides the perfect method for this part of the research. It requires a person known as the interviewer, which was embodied by the researcher himself, asking questions in face-to-face contact to the participants. Those were chosen with the goal to combine car experts and unbiased attendees. The idea behind this was again to drive discussions by participants with different perspectives. This interview method of collecting data involves presentation of oral-verbal stimuli and reply in form of oral-verbal responses (Kothari, 2004). The stimulus, in this case, was an introduction presentation including pictures, videos and data of the new AT, followed by a targeted and pre-defined framework of questions. Every participant had to answer the same questions, with the freedom to raise own questions and start discussion. This method is called a semi-structured interview (Cohen et al. 2007). The responses were audio-recorded directly on a computer via the integrated microphone and later transcribed into a text file. Together with the question framework, this text file can be found in the Appendix A.
3.2.5 Online Survey
Besides the qualitative feedback on the car, it was also important to be able to draw wider conclusions in the thesis focus areas of media usage and design perception. The best input for this is delivered by quantitative methods - in this case, an online survey. Not only being able to generalize statements more easily, “Surveys obtain information that can be quantified and analyzed statistically and thus can reach a higher degree of precision about the group being studied that other forms of research cannot duplicate” (Berger, 2011). The choice of conducting an online survey was also influenced, on one hand, by the argument of little costs and the convenience to spread it, but much more by the option to present several high quality pictures of the car. Having those as an introduction, the survey questions focused, in the first part, on the participant’s opinion about the car and in the second part on their media behavior. As a platform for the survey, the online provider “SurveyGizmo” was chosen. The advantages over other offers were the high number of accepted responses (1000), a big variety of question types and great analyzing tools. To be
20 1. 3. 5. 2. 4. Research Research Conclu- Theory Results Question Strategy sion able to send the survey out to the right persons, the researcher got provided with the access to a database of car owners from all over Sweden, mainly owning a BMW already. The invitation email was formulated in Swedish to lower the entry-barriers for a click on the survey, where the questions were presented in English. Another idea, to convince more people to take part, was to offer test drives with the new AT, being the first ones in Sweden. The aim with these efforts was to reach at least 200 participants, which represent a quite big part of the target group. The estimated sales target of the AT lies at 600 vehicles in the first year. In the end, after a participation period of three weeks, a total number of 237 valid replies were registered. The final data sets were downloaded in Microsoft Excel and Word versions and further graphs and analyses were constantly available online. The complete survey insights and the analyzed results are presented in chapter 4.2.3. Positioning and 4.3.4. Promotion, the complete survey including the results can be found in the Appendix B.
3.2.6 Limitations
Beside the mentioned limitations about the right target group, Online Surveys always involve the danger of participants not telling the truth (Berger, 2011). In this case, it most probably could happen in the media usage and demographics part. These questions request quite sensitive information which might not be shared so willingly. The design section seems rather comfortable to answer, having in mind that these questions focus on the car and not on the person directly. Nevertheless, this can be considered a risk but especially here in Sweden, with a very open information attitude, it shouldn’t be leveled too high.
Another issue concerning the Mixed Methods has been observed by Maxwell and Loomis (2003). They claim, that “it is sometimes quite difficult to work out from a mixed methods study what the quantitative and qualitative components were and how they were combined or otherwise used in conjunction with one another.” To avoid these blurred boundaries, it is the aim within this thesis to point out clearly the benefits of the quantitative and qualitative methods. Also the different characters of the results should be pictured right, to draw the right conclusions in the end.
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Finally, turning back to the first method of data collection in this thesis, Secondary Data provides not always absolutely reliable and valid information. It must be evaluated carefully and weighted according to its recency and credibility, as Steward (1992) points it out. He further claims that “data collection is usually purposive, and the purpose for which information is obtained and analyzed may influence the conclusions drawn, the data collection procedure employed, the definitions of terms and categories, and even the quality of the information.” As for this thesis most of the secondary data comes from the BMW headquarter, it is at least clear to state that this data is credible, reliable and valid. The key point with this data is that it needs to be evaluated in the right way. The premises from Munich might not apply to the Swedish market for instance. So if the researcher sees all this data from a critical position and puts the messages into question, then the purpose of data collection should not influence his conclusions in any way. A critical evaluation of the received data definitely limits the risk of invalid Secondary Data.
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4. Results
After setting the stage, this chapter now presents the findings of the research. To have a consistent logic and to be able to build up conclusions step by step, the result discussion also follows the research strategy process.
4.1 Analytical Phase
Analytical Strategic Media Phase Phase Concept
Product Product Segmentation (central)
Price Characteristics and consumer behavior Targeting (central) Place Market and competition Positioning Promotion (local)
Figure 5: Research strategy - Analytical Phase
4.1.1 Product
The product, which this whole work is about, is called the BMW 2 Series Active Tourer. In chapter 1.1. Background, a short introduction already showed the key elements of this car. But to have a better understanding of this product, it is necessary to take a closer look. Especially in order to understand and follow the further conclusions and definitions, a good product knowledge will help.
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The AT is the first front-wheel driven BMW ever and will compete in the class of Compact MPVs. This class is defined by vehicles with short outside measurements but a lot of space inside, because they are usually built higher than other compact cars. This is also why the company decided to make the AT front-wheel driven; with this setup you safe a lot of space underneath and in the rear of the car and so can create more space in the inside. BMW wants to bring the known company values also into this class, accordingly the AT will be the best in class in terms of design, sportiness and driving dynamics. Furthermore it fulfills the requirements for this class, which are so highly valued by the customers. These are: comfort and functionality, more legroom and storage space, high seating position and great versatility.
Facts and figures:
Engines: Diesel and Petrol engines reaching from 136hp – 232hp Fuel consumption: 4.1 – 6.0L Measurements: Length: 4,343mm Width: 1,800mm Height: 1,555mm (comparable to Mercedes Benz B-Class) Approx. 2cm longer than BMW 1 Series Approx. 1cm higher than BMW X1 Seating position approx. 11cm higher than BMW 1 Series Price: starting from 232.000 SEK
Figure 6: BMW 2 Series Active Tourer design (own collage, pictures from bmw.de)
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All of the information in this chapter is based on BMW internal documents, which unfortunately can’t be published within this thesis.
4.1.2 Characteristics and consumer behavior
Additionally to the pure product information, the BMW headquarter also provided the markets with a customer study and Marketing/Target Group Guidelines. They include assumptions which are based on customer research studies conducted by BMW. These studies are from the years 2010/2011 and were carried out for the German and the European market. This indicates that the central material can only give a vast picture of what we are actually dealing with. Five years old studies are not really representing what people think today and a German or European market can be quite different to the Swedish one. But in the end, customer opinions are not changing dramatically fast and European markets might differ, but the big picture is still the same. So this material can show the direction to go and the fine-tuning has to be done market specific in the next steps.
The key message from Munich is to target young families and “Silver Agers”. This definition of the target group is pretty obvious after looking at the competitors. The Mercedes Benz B- Class, the Volkswagen Golf Plus and Touran call these groups their main customers. Accordingly, for BMW the focus now lies on targeting these customers and convincing them to change the brand. The generic family profile is described as
- 39 years old, married, two children, business employee - Residential area, budget conscious, functionality, versatility, comfort and quality are important
The typical “Silver Ager” would be
- 64 years old, married, grown up children, retired - Residential area, environmental awareness, comfort, quality, reliability and safety important
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The target group is set and also the next steps are already suggested from the headquarter: The consumers need to be addressed without making the AT a family car or a car for old people. Most of the potential customers are not even considering BMW right now as a brand for themselves. That’s why the whole communication needs to be inviting and approachable but not too soft. Especially emphasized is the idea to approach the target group where they reside on a daily basis and not to wait until they visit the BMW dealerships. Therefore, local cooperation should be generated to create early touch points.
4.1.3 Premium Market and competition in Sweden
After this first input from BMW Munich, an approximate direction was set and now it was time to dive deeper into the Swedish market. The best way to do so, is receiving statistical analyses from the leading automotive research company in Sweden, Vroom (Appendix C). One part of their exclusive report displayed the situation in the Swedish premium market. The other part investigated the facts about the Mercedes Benz B-Class. Obviously, numbers and statistics can only show the past and not the future. But if there is a certain pattern recognizable, also assumptions for the future can be made.
In the private premium market only 11% of the customers in Sweden are below 35 years old. Almost all of them owned a car already before the recent one. Which is nothing special, but interesting to see is that 60% had a premium car before. And these 60% are all coming from BMW, Audi and Mercedes. Volvo (9%) and Volkswagen (7%) are not that strong represented in the premium segment. One could claim that for BMW there are now only two brands which need to be conquered. But if the company wants to set a foot into the Compact MPV segment, also customers from more price sensitive competitors need to be convinced; the focus on the premium segment is not enough.
The direct competitor in Sweden, the Mercedes B-Class, was sold in the last year 991 times, which comprises strong 10,1% of the company’s total sales in Sweden. Obviously a good and vivid market for these kind of cars. Besides that, astonishing 75% of all B-Class customers last year were older than 61 years old. The focus here is obviously put on the segment of “Silver
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Agers”. The look at the previous owned car reveals that 40% of these cars were used cars, but more interesting is the fact that it is a wild mix of different models and brands. Mainly they drove a Mercedes Benz before already and the most pre-owned car was the Mercedes B-Class with 13%. But all the following percentages are below 10, which indicates that all the B-Class customers came from a variety of other brands and models. This shows to BMW that the focus for new customers should be very wide and embracing.
4.2 Strategic Phase
The analytical work of existing data is completed, now it is time to define the right strategy. This will be done in a step-by-step process, starting with market segmentation, followed by the definition of the target group in Sweden. These parts were handled in cooperation with the creative agency Lowe Brindfors. Finally the product’s position in the market has to be found, this search will be supported by own empirical research.
Analytical Strategic Media Phase Phase Concept
Product Product Segmentation (central)
Price Characteristics and consumer behavior Targeting (central) Place Market and competition Positioning Promotion (local)
Figure 7: Research strategy - Strategic Phase
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4.2.1 Segmentation
In the case of the AT, the best approach of segmenting the market was to come from a very wide angle and then narrowing it down. This means, the researchers looked at very general factors at the beginning and became more and more precise in time.
Together with Lowe Brindfors, the first step was to look at the benefits sought to identify what is essential for potential customers. In this case it was the combination of design and functionality, which can be found in a lot of other products too. The customers of these other products are a potential target group and this is how the segmentation started.
The next step focused on the Attitude to the product, preferring customers who like the brand BMW, but never owned one before. With the idea behind, that the AT is a great entry model to the world of BMW.
An important role in Sweden also plays the geographical location of the citizens. There a really major differences in the characteristics of urban cultures and communities on the countryside. In this research the focus was put on Stockholm, Gothenburg, Malmö and surroundings plus communities which are larger than 90.000 inhabitants.
In terms of Socioeconomics the only regulation was a yearly income of 600.000 SEK and higher.
To continue with a wide scope, which we decided to use after the Vroom research (chapter 4.1.3. Premium Market and competition in Sweden), we didn’t define the demographic variables on purpose. This factor should be kept open as long as possible.
To be able to narrow this selection further down, the plan was to look at the competitors and see which motives their customers have. Following, the Purchase behavior of the potential segment was defined as brand-orientated, they appreciate the joy of driving, design, engine power and prestige but do not care too much about where it comes from (cylinders, front-wheel drive,…). Combining this with a functional need for cargo space to transport what interests them: food and wine, hiking, biking, gardening, construction work,
28 1. 3. 5. 2. 4. Research Research Conclu- Theory Results Question Strategy sion horse or dog. Additionally, they prefer a smooth getting in and out of the car and enjoy comfort.
With this characterization, several demographic segments can be described. The task was now to look into chosen segments and find the right target group. As the approach was still to keep the angle wide, the demographic variables were defined very soft. The segmentation process, including all the selective factors mentioned before, resulted in three groups to look at:
1. 3-4 living in household; married/cohabiting = 579.000 persons 2. Married/cohabiting = 1.167.000 persons 3. 3-4 living in household = 676.000 persons
The final question, each segment has to answer, is the point of being effective or not. Several factors (chapter 2.2.1. Segmentation) need to be checked to answer this question. As the segments contain pretty much the same characterization, the check will be performed for all three segments:
Identifiability All segments are clearly to identify. Only the lack of demographic information might blur some lines between segments.
Substantiality Each of the three segments is large enough to be profitable, bearing in mind the sales target for this year of 600 vehicles.
Accessibility This factor can only be answered accurately after a closer analysis of the different media consumption. The right channels are the key here and those have to be found and defined first.
Stability The arguments, for all three segments to be stable over years, are provided by the big size of the segments and very general variables. So if a bigger mind change would take place, it is not really affecting these variables.
Responsiveness A big plus at this point is the selection of bigger cities, in which the customers can be
29 1. 3. 5. 2. 4. Research Research Conclu- Theory Results Question Strategy sion reached a lot better. This is due to a much higher variability of communication channels and so the responsiveness should be no problem.
Actionability Throughout all the segments, BMW has the ability to take actions and get in touch with the consumer. The geographical areas are not too wide raging and the segment groups know the brand and are open minded towards it.
All of the data, on which this chapter is based on, can be found in the Appendix D.
4.2.2 Targeting
After this detailed segmentation, the options are now pretty clear (Dibb et al., 1990): either the company focuses on a single segment with one product, or one product will be offered in several markets. From the beginning, the target was to keep the focus wide open and accordingly the AT will be targeting several segments. To be more precise, two main target groups have been defined and chosen:
- Married/cohabiting, no children at home anymore, city with 90.000+ inhabitants, <600.000 SEK income, hiking, biking, gardening, horse or dog, high seating, comfort Rörliga paret (Swedish for: active, moving couple; young in mind)
- 3-4 living in household, city with 90.000+ inhabitants, <600.000 SEK income, hiking, biking, gardening, food and wine Livliga familj (Swedish for: vivid family)
All in all, the Swedish target groups are not really far off from the central suggestions for whole Europe. Nevertheless, both target groups are divided in demographical and socioeconomic attributes, but what unites them, are their interests and the active lifestyle. Exactly these common fields of interest present the best opportunity to get in touch with them.
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4.2.3 Positioning
Now that we know who the new customers will be, it is time to put the product in place. Obviously the product should be appealing to the new customers and so, it would be great to find out how the AT is perceived by the audience.
4.2.3.1 Empirical research
This research was conducted using quantitative and qualitative methods, which were already described in chapter 3.2.2. Quantitative, Qualitative and Mixed Methods. One method was an online survey with 237 participants who shared their opinion on the design of the AT (Appendix B). They were asked to give each design aspect (exterior, interior and versatility) a grade on the scale from 0-10. The results are going to be presented with a NPS (Net Promoter Score) system, which separates into “Promoters”(rated 10-8), “Neutrals”(rated 7- 4) and “Detractors”(rated 3-0).
Additionally, a focus group was set up to find further answers to this question. Four participants, each an expert in his field, took part at a semi-structured interview in the BMW Sweden offices (Appendix A). Two of the participants had already a good knowledge of the new AT, because they are directly working with the brand. The other two experts had not been in touch with the product before that interview. All of the attendees met each other for the first time. After an introducing presentation with videos and detailed pictures of the product, the participant’s opinion on the exterior design, interior and versatility should be shared. As a grading framework, the Likert Scale from 0-10 was suggested, 0 marking the negative end and 10 marking the best grade. The following pictures are the ones used in the online survey and the focus group.
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Exterior
Figure 8: BMW 2 Series Active Tourer exterior design (own collage, pictures from BMW Press portal)
Online Survey Results - Exterior 140
120
100
80
60 117 100 40
20 26 0 Promoters Neutrals Detractors
Figure 9: Results Online Survey - Exterior
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Focus Group Grading: 7- / 7+ / 5+ / 7+ Design perception always depends on the viewer himself of course. So it was not surprising that the judgments varied a lot from “nice appearance” and “harmonious from all angels” to “this type of car is normally not a beautiful one.” The critics based mainly on the high shape of the AT, it looks “a bit bulky, not so slick” and elegant as a long coupé for example. Also the resemblance to the Mercedes B-Class was perceived negatively. But the important statement from all critics was that “it definitely looks better than the Mercedes B-Class”. So in the end the positive arguments, like “good proportions” and “quite sporty” outweighed the negative ones.
Interior
Figure 10: BMW 2 Series Active Tourer interior design (own collage, pictures from the BMW Press portal)
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Online Survey Results - Interior 140
120
100
80
60 119
40 77 20 41
0 Promoters Neutrals Detractors
Figure 11: Results Online Survey - Interior
Focus Group Grading: 7 / 7 / 8+ / 7+ “I totally think the interior is the strong point of this car”. This statement summarizes the opinions of the interior quite well. Not one negative sentence was spoken about the interior design. A special mention deserves the choice of materials, which makes the interior feel “very light” and “sensual clean”. Furthermore, the “sporty, premium feeling”, core values of BMW, were emphasized and the participants were sure that “it’s going to be really good to sit in this car.”
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Versatility
Figure 12: BMW 2 Series Active Tourer versatility (own collage, pictures from BMW Press portal)
Online Survey Results - Versatility 140
120
100
80
60 122
40 63 20 50
0 Promoters Neutrals Detractors
Figure 13: Results Online Survey - Versatility
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Focus Group Grading: 8 / 6 / 5 / 7 The versatility is by far the most difficult point to judge when you can’t experience the car live and only have to rely on pictures and short films. Nevertheless, some discussion came up and especially the information, that the rear leg space is bigger than in the BMW 3 Series, provided a perfect possibility to compare. Most participants were satisfied with the loading capacities presented in a short film and gave the general judgment “pretty good” and “looks quite high”. Finally only one thing really counts in terms of functionality and versatility: “the car will meet at least the requirements which the customers have.” So obviously BMW did his homework.
Conclusion
The product has to find its place in the market; this is the core task in the positioning process. After the empirical research, the image which is created in the minds of the participants is clear. The car is still perceived as a BMW and, even better, as the best in segment design. This is a strong positioning argument and should be communicated confidently. Additionally the functionality and roominess seems to fulfill the expectations. These expectations constitute the entrance barrier to the compact MPV segment; a failure in any of these attributes might cost the chance to conquer the market. The highest grades and best judgments received the interior, which should be one of the focus topics in the communication. The creative concept now has to transport this image and create the same one in the minds of potential customers.
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4.3 Media Concept
Analytical Strategic Media Phase Phase Concept
Product Product Segmentation (central)
Price Characteristics and consumer behavior Targeting (central) Place Market and competition Positioning Promotion (local)
Figure 14: Research strategy - Media Concept
The final step is reached and after analyzing and finding the right strategy, it is time to specify concrete actions. The media concept is the umbrella under which all details, concerning the communication of the AT, are combined. To display this umbrella in an organized structure, the 4 P’s (McCarthy, 1960) provide a good overview and point out the importance of considering each and every step. Product, Price and Place are in this case predefined values, which cannot be touched or influenced within this thesis. The focus area is the promotion of the product for which qualitative and quantitative research has been conducted. In the following lines every step is being discussed in more detail.
4.3.1 Product
The communication highlights of the 2 Series Active Tourer are the best in class design, driving dynamics and sportiness. Furthermore the product fulfills the needs of the customers in terms of functionality, space and versatility. The AT is the perfect companion for the
37 1. 3. 5. 2. 4. Research Research Conclu- Theory Results Question Strategy sion active lifestyle of the target group. If it is hiking, biking or skiing in the winter, the car provides the right tool to do it. Also as a pure transport vehicle it can support gardening and construction works on the house. The AT will be launched in the segment of Compact MPVs, competing with the Mercedes Benz B-Class, Volkswagen Golf Sportsvan and others. Further technical details are described in chapter 4.1.1. Product.
4.3.2 Price
The prices for the AT are unveiled completely for the German market. Until the finalization of this thesis only the entrance model price for the Swedish market was allowed to be communicated:
BMW 218i Active Tourer 27.200 € 232.000 SEK
BMW 225i Active Tourer 37.950 €
BMW 218d Active Tourer 31.050 €
The engine portfolio will be extended from November 2014 on with the introduction of 220i, 216d and 220d.
Those are basically on the same level as the B-Class, which is also per definition the only premium competitor in this segment. In that matter, BMW offers the newer and better solution for the same price. In general you have to look at both of the target groups and see that young families are usually much more price sensitive than a retired couple. Accordingly, a lot of low-price competitors are targeting mainly young families and are dominating the market like this. To compete with them is only possible with a low entry model price and a very convincing product. The AT starting price of 232.000 SEK is recently about 50.000 SEK (185000) higher than the cheaper competition. But it is important to mention that the engine of BMW is not comparable with the entry models of the competitors. Additionally, a premium model is usually not supposed and able to compete with the lowest prices.
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4.3.3 Place
In the automotive industry, this topic can be answered pretty fast. The distribution is completely handled by the dealerships. Until a few months ago 100% of the new produced cars were sold through the dealers. As one of the last industries, the car manufacturers slowly enter the internet. One strategy is the direct sale via the own homepage, which is now possible for the first time ever with the new BMW i3. But in case of the 2 Series Active Tourer, the only option, which might be possible, is a distribution over internet portals specified on new car sales.
All in all, the dealerships’ facilities are still the place where all contracts are made and accordingly, the main point-of-sale (POS). The BMW dealers are spread all over the country and especially focused on the bigger cities, which goes align with the geographical location of the target group. The AT needs to be present at the POS as soon as possible, because the communication will take place before the actual launch. To further please and tease the audience before the launch, the car should be presented at events and placed in car magazines. Thus, the AT will celebrate its Northern Europe premiere at the biggest golf tournament in Scandinavia, the Nordea Masters in Malmö, Sweden. Several car magazines will also have the chance to test-drive the car after the premiere and present it to their readers.
4.3.4 Promotion
The above mentioned event and press actions can be already seen as promotional measures, so it is about time to present the core creative ideas to promote this new BMW. Before the creation of the final idea, it is crucial to identify when and how the target group can be reached best. Accordingly, the first step is the definition of timing and channels.
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Timing Usually the timing is not a big problem, as you basically orientate the start of the campaign to the date of the car-launch. So the customers get in touch with the new product in the newspapers, in television or any other channel and then visit their dealerships to get more information and test-drive the car. For BMW Sweden, the communication timing of the AT is not that easy as usual. During the launch of the car (27th of September) a big BMW charity campaign is running, which will take all resources and channels from August until October. Therefore, the AT campaign has to be switched to July, the main summer holiday time in Sweden. Normally, this month is considered as a vacation month, where most of the employees are out of office and the whole business takes kind of a summer break. Exactly in this period the AT has to be pushed with ATL (Above the line) measures, which are actions that are visible to a broad public and are spread via common media channels. To conclude, the timing of the campaign is problematic, because the target group is not following its usual media behavior when they are on vacation. Solving this problem was one key element of this thesis’ research and is presented in the next paragraph.
Channels
Which media channels are the most effective ones during the summer holiday time?
The answer to this question is not only a big part of this thesis, it will also show BMW which communication strategy is best for the 2 Series Active Tourer. Specific qualitative and quantitative methods had been chosen to find the right solution. In this matter, a combination of the results of both methods will deliver the strongest arguments.
The qualitative method, already introduced in chapter 3.2.4., focused on the opinion of four experts. They shared their point-of-view concerning the car’s design and their personal media behavior. Here, of course, lays the main interest for the definition of the most effective media channels. The participants were asked to present their media usage on a normal day and then describe the changes which might take place in comparison to holiday
40 1. 3. 5. 2. 4. Research Research Conclu- Theory Results Question Strategy sion time. Based on their main media channels they should describe their usage characteristics and compare them. Within the Online survey, a total of 237 persons shared their media usage and gave insights on how this usage changes during the vacation time. The participants were asked first, how they consume media during their everyday-life when they are at work, following their usual habits. After that they should describe how the media usage looks like during holidays. The participants should define, channel by channel, how often they are using it. The scale was reaching from several times a day, daily, a few times per week, a few times per month, a few times per year, never, no access to this medium until don’t know. According to this, everyone had the chance to show their normal and summer media consumption.
Figure 15: Consumption scale
The main trend was that either channels lost massively in usage or others stayed more or less the same. Ranked by the highest usage per day (blue and red), the most important channel is the internet, either via mobile phone or the computer.
Internet via mobilephone Internet via phone (Summer) 0 50 100 150 200 250
Figure 16: Results Online Survey - Internet via phone usage Using the internet via mobile phone is one of the solid channels which didn’t drop dramatically in usage during the summertime. Even though most of the focus group members had the plan to “neglect my phone” and tried to be “more into doing activities than looking on the phone”, they still used it quite a lot. One reason is the need to stay up- to-date, so “the phone is often used for news articles updates.” Another very interesting reason is caused by the more available time; some people “post a bit more”. All the new impressions and beautiful experiences need to be shared with friends. Thus, the phone is even used a bit more for posting on social networks for example. To conclude, this channel presents the perfect opportunity to still reach the target group, even if it might be just once
41 1. 3. 5. 2. 4. Research Research Conclu- Theory Results Question Strategy sion a day when Wi-Fi is available. But the main message is summarized very well by this statement: “During the vacation I would still be connected with my phone.”
Internet via computer - 38% Internet via computer (Summer)
0 50 100 150 200 250
Figure 17: Results Online Survey - Internet via computer usage
This statement can also be transcribed to the internet usage via computer. During the summer time the usage is still, for most of the participants, on a daily basis and almost everyone has access to the internet a few times per week. The dramatical drop of 38% in daily usage can be explained probably with the omission of the internet usage at the workplace. This development is also supported by the statements of the focus group. The work computer is often “replaced by the phone and tablet” during vacation. But also here the time aspect motivates to continuously using the internet: “I will have more time to read newspapers or read them online.”
After those two strong channels, it is time for the biggest loser in terms of usage. The daily TV consumption decreases by 43% and throws this medium far back in comparison to others.
Watch television - 43% Watch television (Summer)
0 50 100 150 200 250
Figure 18: Results Online Survey - Television consumption
This decrease is often caused by the fact that the access to this medium is limited or not existing when people are abroad. They might still catch the news on a TV in the hotel room or at a bar, but these fixed usage times like after work or at the weekend are completely dropped. Additionally, the TV would just hold them back from enjoying the good weather, the garden, beach or mountains.
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The rest of the channels had no major changes in usage time, but some should be emphasized, because within the focus group a lot of arguments were found for these ones. “I also tend to buy more newspapers actually, like when you go to the beach for example. Then I always like to take something with me to read.” Spending the time at the beach with something to read is quite common and good described as “a shift to a bit long-term media”. This also includes magazines of interest. Both channels are quite stable and the magazines are even wining a few daily readers according to the survey participants; quite reliable channels on the long-run.
Read the newspaper Read the newspaper (Summer)
0 50 100 150 200 250
Figure 19: Results Online Survey - Newspaper usage
Magazines of interest Magazines of interest (Summer)
0 50 100 150 200 250
Figure 20: Results Online Survey - Magazine usage
In the end, the most consumed channels during the summer time are the internet via phone and via computer. The newspaper and magazines of interest are solid, accompanying channels. To find out, how effective these channels are, a last question was proposed to the experts in the focus group and to the participants of the online survey:
In which medium do you feel most comfortable consuming advertising?
The participants were asked to sort the given channels according to what they prefer most. The displayed score is a weighted calculation of the channel ranking.
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Rank Medium Total Score
1 Advertising in Newspapers 1062 2 Television 1002 3 Advertising on websites used via computer 762 4 Sendings via post 689 5 Radio commercials 582 6 Advertising on websites used via mobilephone 511 7 Advertising in social media networks 438
Table 1: Medium most comfortable consuming advertising (Data from Online Survey)
The results first of all show that man is a creature of habit. In all of the classical channels, where consumers are used to be confronted with advertising, they were pretty comfortable with consuming ads. New forms of marketing, targeting mobile phones or social networks were seen quite critical. If we now look at the most used channels during the vacation, we find the internet via computer on rank three and surfing on a mobile phone on rank six. Combined with the very accepted advertising in newspapers, the chosen channels should be quite effective.
All in all, the creative campaign can rely on most of the channels also during the summer time, except the television. Very effective channels, or at least very accepted advertising channels are the newspapers and websites. I think it is also good, from time to time, to be a bit uncomfortable, to get stuck in the people’s head. So a focus on mobile, the internet and newspapers is the suggested strategy in terms of advertising channels.
The timing and the channels are set, the next step is the creative idea which will be presented in the following chapter.
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4.3.5 The creative idea
Based on the active lifestyle of the target groups, the variability of the product and the selection of the channels, the proposed creative idea is:
The BMW ActivityGenerator.
Supported by the slogan and campaign headline:
Every day is a journey. (Varje dag är en resa.)
It sounds very exciting and it is, in fact, a great tool which suggests a variety of local events and activities, based on the user’s recent position. So let’s say you are right now enjoying your nice summer time at home with the family. Free days ahead, so there is a lot of things to do with the kids. In the evening you are surfing a bit in the internet, checking a few biking equipment sites, some news pages and during this relaxed browsing you see the following ads:
Figure 21: Online banner for BMW ActivityGenerator (own collage, pictures from Lowe Brindfors)
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On these banners all the events and activities, happening today or tomorrow around your recent location, are displayed. It could be some kayak testing days, a biking round trip in Sandviken or a MTB course in Huddinge. When the user clicks on the event he will find all the detailed information about it, plus the closest BMW dealership and the invitation to take the next activity with the AT, in form of a test-drive. The BMW ActivityGenerator can also be combined with a bit more focus on the car (Figure 21, right side). First, several events are presented and then the user is contacted directly a bit provocative: Where are you going today? In both of these cases the user will be encouraged to book a test-drive and start the next activity with the BMW 2 Series Active Tourer.
To make this idea even more exciting and interactive, the user could also be confronted with a real ActivityGenerator machine. Here he gets invited to find a thrilling activity which is happening on that day close by.
Figure 22: Online banner for BMW ActivityGenerator (picture from Lowe Brindfors) “Press start if you want to do something thrilling today.” After pressing the START button, a perfectly targeted event, which is based on the interests and browsing behavior of the user, is presented.
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Figure 23: Online banner for BMW ActivityGenerator (picture from Lowe Brindfors) In this case, a visit to the art museum of Wanås is being suggested. If the user wants to continue with the search, he just has to press “other activity” and gets to the next event, tailored to his interests.
Figure 24: Online banner for BMW ActivityGenerator (picture from Lowe Brindfors) This example would be presented to users around Gävle, a nice bike tour of 4, 8 or 12 miles in Gästrike. In the end, the targeted customer would also be encouraged to book a test- drive.
This concept is of course adaptable to several devices and different channels. If we look at the chosen and most effective channels, like for example the newspaper, ads could present recent events, which are happening in the distribution area, and invite the readers to visit
47 1. 3. 5. 2. 4. Research Research Conclu- Theory Results Question Strategy sion this event or the next one with the 2 Series Active Tourer. The mobile phone and the computer could adapt the banners which had been described earlier. Furthermore, there will be also developed a specific app. With the “BMW ActivityGenerator” the users can always look for exciting events in the proximity and never have to search several event portals and museum websites. Also radio spots are a great opportunity to put this idea into action and present recent activities: “Hiking, bus and base camp in Grövelsjön or island hopping for 3 persons, 4 days long in Siaröfortet? Where are you going today? Every day is a journey. Start yours at the next BMW dealer.”
Technically, the identification of the recent user’s position can be achieved through different tools. One of them is the GPS position which is transmitted by phones or several notebook models these days. Additionally, the IP address normally indicates where the user is connected and located approximately. On local news web pages the content of the ActivityGenerator is matched to the distribution area of the newspaper. Finally, to create the perfect activity algorithm, also the browsing history and search habits are taken into consideration. That, in the end, a real customer value is created by presenting exciting and tailored activities to potential AT buyers.
The actual goal is, to bring the potential customers in touch with the new car. Especially after the research about the people’s perception of the design, it was clear to see that the interior is the big plus. Accordingly, the best argument to convince these customers is when they take place in the AT and enjoy a test-drive.
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5. Conclusion
What is always left in the end, is to take a look back on what has happened and then try to foresee what the future might bring. In the next chapter all the research questions are being discussed, based on the results presented before. Additionally, the possibilities of future research will be the topic.
5.1 Discussion
The last 50 pages were all dedicated to answer on big question, the research question. Let’s see now if the effort was high enough to find a proper answer:
How can BMW communicate the new “2 Series Active Tourer” to an untouched customer segment in the best way?
As described before the research, BMW had to learn a lot about the new targeted customer group to find the right answer. This thesis provided a good look inside this target group, identified their personal characteristics and tried to picture their media behavior and their attitude towards the product. Besides the knowledge about preferences and demands of the target group, the right timing and effective media channels provide the key to a successful marketing campaign. Unfortunately, the timing was preset on the summer holiday period. Thus the right channels for these new circumstances had to be defined and the empirical research of this thesis delivered this definition. The final answer to the research question is given by the creative concept:
The best way to communicate the new BMW 2 Series Active Tourer to the target groups “Livliga familj” and “Rörliga paret” is the interactive and innovative BMW ActivityGenerator (chapter 4.3.5. The creative idea). It’s the perfect support for the active lifestyle of the potential customers and provides them a real benefit in everyday life. The advertising for the AT is smoothly integrated and the concept is adaptable to all channels, which were identified as most effective during the campaign period.
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For the sake of completeness, a brief look on the additional research questions is provided in the following:
What is the definition of the segment and target group?
Through demographic, socioeconomic and geographical attributes the segments were defined quite broad (chapter 4.2.1. Segmentation) but still precise enough to work with them efficiently. Based on this segmentation, two main target groups could be defined (chapter 4.2.2. Targeting). One can be described as young, active families with one or two children and a high interest in outdoor activities. The other target group is defined as an elderly, retired but also very active couple, where the children moved out already and the free time is spent wisely in the nature, working in the garden or taking care of the dog.
How is this target group using and consuming different media channels today?
This describes the media usage on a usual work day, which provided the base to be able to compare this behavior with the behavior during the vacation time. The leading channels in terms of consumption time were the internet via mobile phone or via computer and the television. Also the advertising preferences of the media users were interrogated, to find out in which channel it is most comfortable to be confronted with advertising. On the first three positions were advertising in newspapers, TV and ads on websites used via computer. Further relevant insights for this thesis are described in chapter 4.3.4. Promotion, the whole results of the empirical research can be found in the Appendix A and B.
Is there a significant difference in their consumption characteristics during the summer holiday time? (when the car will be communicated first)
In some channels this difference was really significant when you look at the daily usage. The time per day in front of the TV dropped by 43% and browsing in the web on a computer lost 38% of the daily users. The rest of the channels could more or less hold their consumption levels, due to the common shift towards long term media like newspapers or magazines in the vacation time. Important for the answer of the research question was the fact that the focus channels should be the internet both via computer and mobile phone, accompanied by newspaper advertising.
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5.2 Future research
Especially the research about the differences between everyday media usage and summertime usage, which was described in the last sub-question, is important to develop further. The goal should be, to be able to see throughout the year how to address the target group most effectively. This summer gap is still a big unknown factor, at least here in Sweden, and that’s why continuous research on that field is necessary.
Furthermore it will be important for BMW to find out what the first test-drivers and customers think about the car. Especially in the case of the AT, the targeted audience is new and quite big, because the segments were defined quite broad. The research on the target group is never completed and the company should always try to receive input and feedback. As described in chapter 2.2.4., a good media concept is worthless without continuously asking for the customer’s opinion and adjusting all the elements of the communication to it.
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5.3 Summary of Key Findings
To provide a clear overview of the key findings of this thesis, a summary for every chapter is conducted in the following:
4.1 Analytical Phase Key Findings Chapter 4.1.1. Product - BMW 2 Series Active Tourer, a compact MPV competing mainly against MB B-Class and VW Golf Sportsvan - Prices start from 232.000 SEK and launch date is September 27th
Chapter 4.1.2. Characteristics and - Target Groups: young families and Silver Agers consumer behavior - Communication needs to be inviting and approachable - Generate local cooperations to get in touch with new customers
Chapter 4.1.3. Premium market - Premium market dominated by BMW, Audi and Mercedes and Competition - Before the B-Class, the customers drove a huge variety of brands and in Sweden models -> BMW should have a wide focus for new customers
4.2. Strategic Phase Key Findings Chapter 4.2.1. Segmentation - Target segments: city with 90.000+ inhabitants, <600.000SEK income, functional need for cargo space, interested in food and wine, hiking, biking, gardening, construction work, horse or dog - 3-4 persons in household or just married/cohabiting
Chapter 4.2.2. Targeting - Target groups: Rörliga paret and Livliga familj Chapter 4.2.3. Positioning - AT perceived as best in segment design - Functionality and roominess fulfill the expectations - Focus on the interior, received the best rating
4.3. Media Concept Key Findings Chapter 4.3.1. Product - See chapter 4.1.1. Chapter 4.3.2. Price - Starting from 232.000 SEK Chapter 4.3.3. Place - Mainly distributed at the dealerships where the presentation must be well prepared - Further publicity on events and via PR
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Chapter 4.3.4. Promotion - Timing: main campaign during July, vacation time - Channels: most effective in that period are internet via phone and via computer plus classic newspapers
Chapter 4.3.5. The creative idea - BMW ActivityGenerator: interactive tool which suggests a variety of events and activities based on the user’s recent position - Combining this tool with the invitation for a test-drive
Table 2: Key findings of this thesis
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List of References
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BMW (2001) Press Release: BMW Group investiert weiter in Produktoffensive - Absatzwachstum im ersten Quartal.[Online]. Available from: http://www.pressrelations.de/new/standard/result_main.cfm?pfach=1&n_firmanr_=101607& sektor=pm&detail=1&r=56457&sid=&aktion=jour_pm&quelle=0 [Accessed 18 May 2014]
Bryman, A. and Bell, E. (2007) Business Research Methods. Oxford, UK: Oxford University Press.
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Dibb, S. and Simkin, L. (1991) TARGETING, SEGMENTS AND POSITIONING. International Journal of Retail & Distribution Management. Vol. 19 Iss: 3
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Engel, J.F., Blackwell, R.D. and Miniard, P.W. (1990) Consumer Behaviour. Chicago: The Dryden Press.
Ford, H. (1922) My Life and Work. Doubleday, Page & Company
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Haley, R.I. (1968) Benefit Segmentation: A Decisionoriented Research Tool. Journal of Marketing, Vol. 32.
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Johnson, B. and Onwuegbuzie, A.J. (2004) Mixed Methods Research: A Research Paradigm Whose Time Has Come. Educational Researcher, p.14-26.
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Kothari, C.R. (2004) Research Methodology : Methods and Techniques. Daryaganj, Delhi: New Age International.
Kotler, P. (1988) Marketing Management: Analysis, Planning and Control. New Jersey: Prentice-Hall, Englewood Cliffs.
McCammon, B. (1965) The Emergence and Growth of Contractually Integrated Channels in the American Economy. Economic Growth, Competition, and Worm Markets, pp. 496-515. Chicago: American Marketing Association.
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Reithofer, N. (2013) 93rd Annual General Meeting of BMW AG. Munich. 14th May 2013.
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Appendix A – Focus Group Memo
Host: So maybe let’s start in the round first, I would just like you to rate the car maybe between 1 and 10. What do you personally feel about the car, the exterior and maybe it would be great if you all could find some arguments like why this number and what you like about it and what not so much. Just be honest and feel free to say what you think.
Markus Tegnér: I think the exterior looks really nice, speaking about the front. Nice appearance like the other models, 3 and 5 Series, I really like the look. All in all, the shape of the car looks very nice also. And also the back of the car, my first thought was: quite similar to the Mercedes. It looks very well and from a scale from 0 to 10, I would say a strong 6 or a weak 7.
Host: Thank you.
Jani Eriksson: I guess it is not so objective, working with this. But in general I think, I say it looks very good. I mean in general I like kind of these niche models more, even though this one will have a quite big volume for us. But I really like the concept, I like that it has good proportions, it looks very harmonious from almost all angels. So I think they really did a good job with the exterior design. So on a scale from 1 to 10 I would also rate it somewhere between, a strong 7, something like that.
Oscar Erlandsson: I guess I am coming at this from a slightly different perspective. To me this type of car normally is not a beautiful car. A bit bulky, not so slick. But coming from there, they really did a good job. It definitely looks better than the Mercedes B-Class. Even though I guess it has pretty much the same measurements, it just looks better. So, from there I guess something about 5 or 6. I mean these are style-shots, so in reality it will probably look a bit more bulky than in these shots.
Johan Wigren: I guess the segment for this car is going to like this. I like that they made it quite sporty, they put down the front of the car quite low, so it looks quite low and quite sporty. And I really think we are going to find a new segment that would like to go to buy a BMW actually. Because the people like this car, I think. It looks like the 3Series GT or the X1 today. And also as it is front-wheel drive I think it will be cheaper to build. And that will give us a good price.
Jani Eriksson: Especially that we are working now with the lines, gives new dynamic to the car. If you look at the side lines, playing a bit with the light. If you wouldn’t have that, it would be just a sleek surface, or a surface which is not dynamic.
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Host: What kind of grade would you give to the exterior then?
Johan Wigren: I think this type or car a bit harder to design, so I think we made it very good. So I will say a strong 7 or something like that.
Host: Great! I won’t share my opinion, as we would lose too much time. But I definitely agree with most of you and especially that it is hard to make this kind of car look as elegant and sporty as the other models. Let’s move on to the interior, I hope you saw some parts in the movie on the one hand on some pictures. So you can compare it to what you already experienced in your car. And maybe concerning the segment where it’s going to be launched, maybe take that also into perspective. Johan starts.
Johan Wigren: I like it a lot. I never took place in this car, so I don’t know. I think you have a good view from the inside, I don't know if they're going to be a problem with the A-pillar, but you have this little windshield, but I think it will give us a good view from inside. And I like the sporty, premium feeling with the little more exclusive seats. I like it.
Host: If you would rate it, what do you say?
Johan Wigren: You lose a bit of sportiness when you have a quite high roof. But maybe a 7 again, I think.
Oscar Erlandsson: I totally think the interior is the strong point of this car. What you can see from the pictures is that it is pretty spacious inside. Obviously it has a very light interior, which I think many people will choose. It is the opposite if practical, but that obviously makes it look much better. So with black leather it will look less exciting. But I really like the interior, there is a lot of shapiness to it. Again compared to the Mercedes it looks much better. I think it’s going to be really good to sit in this car. I tend to like high roof cars; they look shitty from outside, but great inside. So 7-ish.
Jani Eriksson: I totally agree to Oscar, the interior is the strong point of this car. And definitely with the materials, the looks we can also target customers outside the premium segment. You can make them understand that you actually get a lot for your money. Because from the materials and the steering wheel, you have a really high quality here. And of course the spaciness is something you can really feel when you are in the car. That comes of course from having it front-wheel driven, you create more space in the car. This is something the customer group will really like. I also like the design of the central console, so I think an 8 maybe stretching to a 9 in this case.
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Markus Tegnér: I agree to the others opinions. I was actually quite surprised that it has such a very premium look and feel to it. Especially compared to the 1-Series this is much much better. Also the screen in the middle, so this could be a strong argument when it comes to selling it. And I also very much like the sensual cleanliness, fewer buttons and the iDrive console like in my old 5- Series. I really like it, so 7, strong 7.
Host: Let’s move on, although this is of course a difficult point to judge only from pictures and movies. Especially as you can feel roominess only when you really sit in there. But still you saw the pictures and the measurements, can compare it to the 1Series… So, your opinion about the roominess, first feeling kind of?
Markus Tegnér: Yea, the snowboard hardly fit in. So yea, the measurements are quite good and without the total capacity of the trunk it is hard. But for the target group, young families, couples maybe connected to sports its pretty good. One question is also about the leg space, with the 3Series and the 5Series it was already quite small. So it would be nice to see it and try it out, going on a trip with friends. But from this perspective it looks decent, so an 8.
Host: Jani did you already sit in it?
Jani Eriksson: Yes I did. And you actually have a better leg space than a 3Series for example. You really have a good roominess in the car. Of course I think in general, this car offer what customers expect in that segment. Of course it is new to BMW, but if you launch a car in that segment, you should also have what the customer expects. For example the seats, the folding functions, also the foldable passenger seat for transporting long objects for example. So I think we will meet at least the requirements which the customers have, which is good. So I think it’s good, 6 around.
Oscar Erlandsson: It looks ok, for this type of car it looks like pretty much what it should be. It did look pretty high from the films, also the windows stand quite high, so that adds to that feeling. Also the sunroof makes it look brighter, but that’s not going to be standard isn’t it? - Laughing in the room - And I would give a 5.
Johan Wigren: I like it too. I like the opportunity to bring quite a lot of things. I think they made it quite smart with the option to put down the front seat. So I really like it.
Host: Great and then we will look a bit towards the target groups. You already had a first guess, and what I want to know of course is do you feel addressed by the car, is it something you
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could think about for yourself personally? Further which target group could it be, which direction should it go and your opinion on that.
Johan Wigren: As we saw in the films, directed to that families who like an active life and they had the snowboard and everything. And I think that might be the segment for this car actually, maybe smaller families. So I think this car will be really good for them.
Host: You personally would think about it?
Johan Wigren: I like a little more sporty cars and I myself have the 3Series Touring, because I like that the forms of the car and how it works. But if you have a little family or something, this will be a good car. Because you have the possibility to buy a BMW for good type of money.
Oscar Erlandsson: Yea, so I think the price point will be quite important for this one. Because I think really this is something like for small families or something. Also the film with the snowboard, that doesn’t tell me anything. But I think between the price and the functionality of the car, it’s something for a small family. You know they would have gotten a 5Series if they could but they don’t have the money to. And this is like a very good compromise. So I think the 2 model number is slightly misleading, to me it’s more like between 3 and 5 Series. But general at the right price you will sell a lot of them.
Jani Eriksson: I also think young families, and I am one of them. So I think this car would fit quite well. And I could also consider it for some time at least. And I also think we might want to target younger customers and families, but I also think that it will attract silveragers who have no children living at home anymore. I think those will be interested in the car as well. And we shouldn’t neglect this target group, as many of them will like the car. But I think these are definitely the two target groups for this car and for myself at least for a period in life I consider it too.
Markus Tegnér: Yes, I also think the target group is couples or small families with one or two kids. I think this car will really outsell the whole 1Series, I think this is a more attractive car and more spacious than the 1Series. I could consider it for myself, but I rather go for the 3Series, more space and capacity. But it’s very nice, attractive alternative.
Oscar Erlandsson: I thought about the film: the target group in that film, they don’t really exist in Sweden. Like the 30-something people which go around doing stuff like 20year olds do. That you won’t see in Sweden. So this should be considered in the Swedish marketing, we found the exact same thing with MINI.
Johan Wigren:
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What they want to show us is that the car is sporty and fun. Maybe the target group doesn’t exist in Sweden, but they show that it’s sporty.
Oscar Erlandsson: Yea sure, but the thing with 4 people jumping into the car, that doesn’t really happen here.
Johan: But does it feel like the X1 to step into?
Jani Eriksson: Yes definitely. You at least don’t have to sit down in the car. More or less the same height as the seats. It’s not like the 1Series where you climb down in the car.
Host: Then we move more to the nicer times. I hope you all already booked your summer holidays. I want to focus now a bit on media behavior. Kind of you should make your own thoughts about how your media behavior changes from an everyday usage of phone, social media, TV, radio, newspapers towards a holiday behavior. Either you are just at home in the summertime but also if you are abroad travelling somewhere. How is your access to the medium and how does it change? Just think about how much you will use it then per day or per week.
Markus Tegnér: Starting with the mobile phone in the morning, the first thing I do is checking it for updates. But I do not read newspapers, I go online and surf the web when I go to work, I check very quickly. Also during the day I check very much updates on my phone on social media. During a day I barely watch the television, I don’t have one at home and I wouldn’t pay for it. So I am not a target for TV commercials. During the vacation I would still be connected with my phone. Maybe I will have more time to read papers or read them online. And if accessible watch some television. When I am abroad I would very rarely use my phone because of the roaming costs. Unless it is connected to the Wifi. More into doing activities than looking on the phone.
Jani Eriksson: The biggest change when I go on vacation is that I try to negate my phone, so I don’t use it as much, but maybe follow social media. But I try to be out more, which means that I watch less television than in general. And I also tend to buy more newspapers actually, like when you go to the beach for example I always like to take something with me to read. That is kind of good time spending. But I would still use my phone for news article updates, so I would still be online. But the consumption time will go down, as I tend to do other things in the summer time.
Oscar Erlandsson: I think I consume less media, try to leave my phone away. I might post a bit more, because there is more stuff to share and you have time to actually do it. I think there would be a shift to a bit long-term media for me, like I would read a book or read a magazine or stuff like that.
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Johan Wigren: I watch quite much television, I think that is a nice way to come down after work. In vacation time I think I use the phone and tablet quite much. I don’t read too much but, I am online and you usually have more time to share what you do and something like that. A nice way on Instagram is to follow accounts about your interests. So I am looking for a watch right now and follow the account of Omega. So this is a good chance for companies to do commercials, show new models. BMW could improve here.
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Appendix B – Online Survey Questions and Results
1. What car brand are you driving recently?
Value Count Percent
none 1 0.5%
Alfa Romeo 1 0.5%
Aston Martin 0 0.0%
Audi 9 4.2%
Bentley 0 0.0%
BMW 185 86.9%
Bugatti 0 0.0%
Chevrolet 0 0.0%
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Chrysler 0 0.0%
Citroën 0 0.0%
Dacia 0 0.0%
Daihatsu 0 0.0%
Ferrari 0 0.0%
Fiat 0 0.0%
Ford 0 0.0%
Honda 0 0.0%
Infiniti 0 0.0%
Jaguar 0 0.0%
Kia 0 0.0%
Lada 0 0.0%
Lamborghini 0 0.0%
Lancia 1 0.5%
Land Rover 0 0.0%
Lexus 0 0.0%
Lotus 0 0.0%
Maserati 0 0.0%
Maybach 0 0.0%
Mazda 1 0.5%
Mercedes Benz 3 1.4%
MINI 0 0.0%
Mitsubishi 0 0.0%
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Nissan 0 0.0%
Opel 0 0.0%
Peugeot 0 0.0%
Porsche 4 1.9%
Renault 0 0.0%
Rolls-Royce 0 0.0%
Saab 0 0.0%
Seat 0 0.0%
Skoda 0 0.0%
Smart 0 0.0%
Subaru 1 0.5%
Suzuki 0 0.0%
Tata 0 0.0%
Toyota 0 0.0%
Volkswagen 3 1.4%
Volvo 4 1.9%
Statistics
Total Responses 213
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2. Are you thinking about buying a car in the closer future?
Value Count Percent
No. 36 14.6%
No, but maybe in the next 2+ years. 60 24.3%
Maybe in the next 1-2 years. 82 33.2%
Yes, probably a used car in the next 6-12 months. 9 3.6%
Yes, probably a new car in the next 6-12 months. 30 12.2%
Yes, probably a used car in the next 6 months. 1 0.4%
Yes, probably a new car in the next 6 months. 29 11.7%
None of the above. 0 0.0%
Statistics
Total Responses 247
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3. If yes, which type of car is interesting for you?
Value Count Percent
Compact Car 17 8.0%
Sedan/Limousine 61 28.6%
Kombi/Station wagon 82 38.5%
Van/Minibus 2 0.9%
Pickup 1 0.5%
SUV 70 32.9%
Sportcoupe 40 18.8%
Cab/Convertible 14 6.6%
Not interested 4 1.9%
Other 2 0.9%
Statistics
Total Responses 213
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4. Based on your first impression, how much do you like the EXTERIOR of the shown car?
Grading from 0="absolutely not" until 10="absolutely fantastic"
Net Promoter Score: -30.5
COUNT PERCENT
Promoters: 26
Neutrals: 117
Detractors: 100
Total Count: 243 100%
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5. Based on your first impression, how much do you like the INTERIOR of the shown car?
Grading from 0="absolutely not" until 10="absolutely fantastic"
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Net Promoter Score: 15.2
COUNT PERCENT
Promoters: 77
Neutrals: 119
Detractors: 41
Total Count: 237 100%
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6. Based on your first impression, how much do you like the ROOMINESS and VERSATILITY of the shown car?
Grading from 0="absolutely not" until 10="absolutely fantastic"
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Net Promoter Score: -5.5
COUNT PERCENT
Promoters: 50
Neutrals: 122
Detractors: 63
Total Count: 235 100%
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7. The perfect car for you has to fulfill several demands. How important are the following factors when you think about buying a car?
Very Moderately Of little Important Unimportant Responses Important Important Importance
54.2% 40.4% 3.3% 1.7% 0.4% Design 240 130 97 8 4 1
11.7% 47.7% 37.2% 2.9% 0.4% Price 239 28 114 89 7 1
Fuel consumption 18.8% 47.1% 27.9% 5.0% 1.3% 240 / CO2 values 45 113 67 12 3
50.6% 43.5% 5.0% 0.4% 0.4% Driving Dynamics 239 121 104 12 1 1
28.8% 41.7% 25.0% 3.3% 1.3% Sportiness 240 69 100 60 8 3
Roominess / 22.1% 52.5% 21.7% 3.3% 0.4% 240 Space 53 126 52 8 1
13.8% 49.4% 33.9% 2.5% 0.4% Versatility 239 33 118 81 6 1
53.6% 40.5% 4.6% 0.8% 0.4% Comfort 237 127 96 11 2 1
High Seating 13.4% 30.3% 33.2% 15.1% 8.0% 238 position 32 72 79 36 19
62.8% 31.8% 3.8% 1.3% 0.4% Safety 239 150 76 9 3 1
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8. On a normal day, to what extend do you...?
A few A few No Several A few times times access Don't times a Daily times Never Responses per per to this know day per year week month medium
Watch 4.7% 66.5% 24.0% 2.6% 0.9% 0.9% 0.0% 0.4% 233 television 11 155 56 6 2 2 0 1
Watch 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% television via 0 the internet 0 0 0 0 0 0 0 0
Use the 51.5% 26.8% 11.1% 4.7% 2.6% 2.6% 0.4% 0.4% internet via 235 mobilephone 121 63 26 11 6 6 1 1
Use the 67.2% 27.2% 4.3% 0.4% 0.0% 0.4% 0.0% 0.4% internet via 235 computer 158 64 10 1 0 1 0 1
Listen to the 14.5% 54.3% 23.1% 4.7% 2.6% 0.0% 0.0% 0.9% 234 radio 34 127 54 11 6 0 0 2
Read the 11.5% 55.7% 20.0% 8.5% 2.6% 0.9% 0.0% 0.9% 235 newspaper 27 131 47 20 6 2 0 2
Read 1.7% 15.3% 48.5% 29.8% 3.0% 0.4% 0.4% 0.9% magazines of 235 interest 4 36 114 70 7 1 1 2
Use online social 18.1% 19.8% 21.1% 9.9% 5.6% 21.1% 3.9% 0.4% networks 232 (Facebook, 42 46 49 23 13 49 9 1 Twitter and co.)
Watch online 1.7% 10.7% 32.1% 32.9% 12.8% 7.7% 1.7% 0.4% 234 videos 4 25 75 77 30 18 4 1
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9. During your summer holiday time (free time, out of work) to what extend do you...?
A few A few No Several A few times times access Don't times a Daily times Never Responses per per to this know day per year week month medium
Watch 3.0% 38.2% 47.2% 5.2% 2.6% 3.0% 0.0% 0.9% 233 television 7 89 110 12 6 7 0 2
Watch 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% television via 0 the internet 0 0 0 0 0 0 0 0
Use the 35.3% 37.5% 14.7% 3.9% 2.6% 5.2% 0.4% 0.4% internet via 232 mobilephone 82 87 34 9 6 12 1 1
Use the 24.4% 35.0% 32.5% 4.7% 1.3% 1.3% 0.4% 0.4% internet via 234 computer 57 82 76 11 3 3 1 1
Listen to the 9.0% 48.3% 29.5% 8.5% 3.4% 0.9% 0.0% 0.4% 234 radio 21 113 69 20 8 2 0 1
Read the 6.5% 51.7% 28.0% 9.1% 1.7% 2.2% 0.4% 0.4% 232 newspaper 15 120 65 21 4 5 1 1
Read 3.4% 15.1% 46.1% 29.3% 3.0% 1.7% 0.0% 1.3% magazines of 232 interest 8 35 107 68 7 4 0 3
Use online social 12.8% 18.8% 24.8% 8.5% 5.6% 24.4% 3.4% 1.7% networks 234 (Facebook, 30 44 58 20 13 57 8 4 Twitter and co.)
Watch online 1.3% 8.6% 29.2% 30.9% 12.0% 15.0% 1.3% 1.7% 233 videos 3 20 68 72 28 35 3 4
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Appendix C – Vroom Market Analysis
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Appendix D – Lowe Brindfors Segmentation Input
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