The dealership experience (list) BMW EVOLVES BY BUILDING A BRAND WITHIN A BRAND: MULTIPLE MS TARGET BUYERS WITH HEARTS SET A'RACING

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Bmw of north America is building its Motorsports M brand with a heavy dose of print advertising and a racy strategy to link its specialty car to overall brand image.

M designates the high-performance version of the 3 series, 5 series or Z3 series cars.

BMW uses broadcast and print to market its line of 3, 5 and 7 series cars, but traditionally only touts the M brand -- popular among race-car aficionados -- with "race-win" ads after victories.

The strictly print campaign for the M brand broke last month in The Wall Street Journal and is running in business, lifestyle and racing enthusiast magazines.

SPENDING LOWER

Although BMW would not reveal ad spending for the campaign, the fact that it is running a print-only campaign suggests the budget for the M brand is less than 10% of its overall ad spending.

BMW spent $73 million on advertising for its automobiles. About $2.8 million went toward the M3, according to Competitive Media Reporting.

Fallon McElligott, Minneapolis, handles BMW's advertising.

A BMW spokeswoman would not say how much the company is spending on the M campaign, except to say, "for us, it's significant."

Vic Doolan, president of BMW of North America, says he isn't worried that a stronger M brand may weaken the larger brand.

"Our brand appeals to those who love driving, for the absolute enthusiast. M puts even further emphasis on BMW values, it doesn't contradict them," he says.

Mr. Doolan says when consumers see M cars in dealerships, it will remind them that BMW has authentic racing roots.

BMW is even encouraging dealers to build a separate M display area, as some of its dealers have done already on their own. BMW included such a prototype "M Cafe" at the Los Angeles auto show earlier this year.

The M line, which originally included the M3 Coupe, was expanded to include the M3 Sedan in 1997.

An M3 convertible will go on sale this month. BMW already introduced the 1999 M Roadster -- based on the Z3 Roadster. An M Coupe is expected to be available this fall.

Next year, BMW will release a M5.

One ad for a shiny M Roadster has the tagline, "The wax can barely hang on."

BALANCING ACT

The marketing strategy behind M is not without its risks. By pushing M as a brand, BMW could dilute the larger brand.

Previously, the line was considered a very exclusive brand targeting racing enthusiasts with a penchant for fast, sleek cars. M is now being marketed as a car for a wider luxury car audience.

In addition, advertising touting its "boy-racer" image conflicts with the company's push to promote safety features.

On the plus side, M could serve as an effective line "halo" cars, provide more M models for core customers to choose from and offer protection for its "fun-to-drive" image. The effort could also aid in competing against companies now adding performance to their own image campaigns, such as Toyota Motor Sales USA's Lexus, Mercedes-Benz of North America, Saab Cars USA and Volvo Cars of North America.

FURIOUS WITH MERCEDES

BMW executives privately are furious that Mercedes calls its new sport-utility vehicle an "M-Class."

BMW's M brand has a 20-year history. An M1 was introduced outside the U.S. in 1979. BMW hopes to boost M volume from 8,000 units in 1997 to around 12,000 a year, as new M models are added, from this spring through 1999. That volume is tiny by Big 3 standards, but 12,000 units would be around 10% of BMW's U.S. volume.

Except for BMW owners and car enthusiasts, the M brand is not too well known. For enthusiasts, though, "M" has a lot of cachet.

In fact, some were dismayed when BMW introduced the M3 sedan with an automatic transmission -- a four-door version of the M3 Coupe.

BMW says it sells separately around 900 M badges a year, making M badges one of the most popular part numbers. Most of them end up fastened to the trunk lid of an "ordinary" model, turning a 325i, say, into a phony "M 325i."

STICK PREFERRED

Most M buyers still want a stickshift, says Rich Brekus, manager of product planning and strategy.

"We wanted to make the new M3 more relevant," he says. When the present M3 was introduced in April 1994, BMW also lowered the premium it charged, compared to the regular 3 series.

BMW has also toned down the styling of M models, which used to have spoilers and other add-ons. Future M models will have only subtle styling changes.

THE "PENULTIMATE"?

Fundamentally, BMW's image is its tagline, "The ultimate driving machine." BMW has to be careful promoting higher performance versions. Buyers may not like the suggestion their "plain" BMW is "the penultimate driving machine."

"I think the strategy of expanding that [M brand] category to other models is sound. There's a market out there," says Frank Ursomarso, president of Union Park BMW, a dealership in in Wilmington, Del.

"The M brand is pretty unique to BMW," says Mr. Doolan. "Nobody else has managed to develop a brand within a brand."

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