The document discusses the benefits and risks of non-traditional marketing for BMW's Z3 roadster. It outlines how non-traditional marketing can build credibility and awareness through word-of-mouth but lacks control over messaging. Specific tactics for the Z3 included events with media and celebrity drivers to generate buzz. While difficult to measure, these efforts created long waitlists and initial high sales volumes, though BMW later had to scale back due to inability to meet demand.
2. Benefits and Risks of Non Traditional Marketing
Benefits English
Fast cars
Credibility German
» Adv.
More credible than paid for advertising Hero
Ultimate Technology
Efficiency through word of mouth Driving Sophisticated Drives an
» Leveraging the buzz Machine Aston
Risks Sexist
Loss of control
» Timing
» Target audience
» Over what is seen
» Over what is said
Challenge of translating awareness into sales
Difficult to measure impact
Ganesh Iyer
3. How does NT work?
Awareness / Visibility Awareness
Word of mouth, Buzz Interest
Excitement Involvement / Infatuation Desire, Preference
Consumer
Advocacy
Purchase
Purchase
• Focus on awareness
• Leverage the buzz
• Cannot fully control what is said and to whom
• RELIES ON AUDIENCE SELF SELECTION
Ganesh Iyer
4. Traditional versus Non Traditional
Credibility
» NT can be more credible have more impact and more efficient when it
works.
Budgeting
» NT costs can be uncertain
» Traditional advertising costs can be better forecasted.
Target market
» Traditional advertising can be well targeted through mass media
» NT relies on audience self selection
Metrics
» Traditional advertising = measurable, reach GRP, frequency = more easily
measured by market research.
» NT is more difficult to evaluate.
Ganesh Iyer
5. Products best suited for NT marketing
Stage in product life cycle
» May work well for product launches in conjunction with mass media
advertising
May work better for social products
Ganesh Iyer
6. Success of NT
Comparative performance
Intro year Launch Spend/car 1998 1997 1996 units
exp. sales ad units units (000’s)
(units) support (000’s) (000’s)
(millions)
Z3 / Total 20.6 / 19.4 / 10.3 /
BMW 131.6 119.3 102.4
BMW Z3 9k waitlist $20 $667
for 3.5
months =
Boxster / Total 9.7 / 5.3 / Na / 6.8
30,000 p.a Porsche 17.2 11.5
Land Rover 14,085 $9 $667 (selling price =
Discovery $40K)
Infiniti I-30 15,194 $35 $2304
Ganesh Iyer
7. Success of NT Elements
Some examples
Element Objective Reported results
Neiman Marcus WOM, Buzz After 2 days, 100 orders placed.
20 units over 3.5 month By Christmas 6000 orders
Christmas season
Central Park event Media exposure and Buzz 2000 media reps attended.
# of Z3 editorials in leading
publications can be counted.
Jay Leno WOM, Buzz Unpredictable, all we know is “it
worked out very well”
Role for campaign evaluation
research to measure awareness
impact.
Radio DJ Unstated Statements like “Amazing
Credibility,” “Had 3 times the WOM
of other events.
What does this mean in terms of
measurable effects on sales?
•Always try to specify quantitative objectives for each element to the extent possible
• Important role for campaign evaluation research to understand the sales impact of these programs.
Ganesh Iyer
8. Postscript
By Jan. 1996 BMW had to scale down their marketing efforts to
avoid potential consumer backlash by not being able to meet
demand.
Tactics shifted to maintaining consumer interest
» Cinema advertising (60 sec. Teaser placements)
» In flight videos targeted at business travelers.
» Dealer sponsored direct marketing programs to maintain interest of
people on waiting lists.
Launch date March 1996. Selling price in 1997 = 30k to 36k.
Ganesh Iyer
