The ultimate marketing machine: how BMW reclaimed premium pole position

In the battle of the premium cars, New Zealand is something of an anomaly, because unlike most markets around the world Audi has been top of the pile for the past six years. But by rethinking its marketing tactics, tailoring its products and comms to suit the New Zealand market, standing up to HQ and targeting new customers, BMW managed to reclaim the throne last year. 

“It’s not all about being number
one,” says Greg Hedgepeth, BMW’s sales and marketing manager. “But we
think of ourselves as the best so being at the top is a good reflection of
that. And from a consumer confidence point of view, it’s good as

In 2012, it sold 1,642 new cars and Hedgepeth says it doubled Audi’s growth and tripled that of Mercedes (which seems to be going for the ‘everything must go’ approach of late) with a 35.5 percent increase on 2011’s new car sales. And with used car sales, he says that gap will be even bigger. Added to that, he says it’s also the most Googled premium car brand in the country, it’s in the top ten most searched for car brands on TradeMe and it now has 20,000 Facebook fans (BMW-owned Mini isn’t looking too shabby either: it’s the 6th biggest premium brand in the country, up with Lexus and Landrover). 

So how did BMW turn things around? 

Hedgepeth took over as marketing manager
for Mini and BMW in 2009 (prior to that he was focused solely in Mini and before that he had
four years at Saatchi & Saatchi), but things weren’t quite as rosy back
then. The recession was hurting hurt new car sales and in 2010 there was a
decision to roll out a global BMW campaign with a view to add more emotion to the

That campaign was based around the joy of driving, and it was a
big shift from the previous, much more masculine focus on ‘the ultimate driving
machine’. And, as the local team predicted, research showed “it didn’t really
translate very well into Kiwi”, wasn’t particularly well-received here and diluted BMW’s competitive advantage—to the point where consumers were perceiving
Audi and Mercedes as equal, when Hedgepeth says they most definitely

“We lost our positioning and we were
floating in no man’s land,” he says. “The brand hadn’t moved on for five or ten
years and it wasn’t connecting with the younger audience.” 

Given BMW’s average customer is 50, male
and wealthy, appealing to the youth seems like a strange strategy. But
Hedgepeth says much of the growth is coming from new customers (the average age has come down from 55 ten years ago and he says the brand has
also become more appealing to women).

BMW’s research showed that value is a big part of the brand’s appeal. As he says, some of the technology that was used on the space shuttles ten years ago can now be found in its cars and, because of its reputation, he says used BMWs have higher resale value than its competitors. But it needed to get on consideration lists so customers could do their own research, so it reverted back to the ‘ultimate driving machine’ tagline. 

“And that’s the challenge for communications,” he says. “We’re not going to get everyone, but some are prepared to pay for that value.” 

Hedgepeth says its focus on SUVs has been paying dividends (the SUV
segment is growing at twice the rate of passenger cars and the small car sector
is also doing well due to the number of drivers downsizing) and as Toyota, Hyundai and, more recently, VW have shown, localising foreign brands and better
connecting with New Zealand can also be a very successful strategy in a market where subtleties are important. 

BMW still generally uses international
content and adapts it to suit. Or, as Hedgepeth calls it, “grounding the brand”. 

“It’s about making it less Germanic and more accessible to New Zealanders by talking a
language that Kiwis understand, while still holding on to that premium
positioning,” he says. 

But every once in a while it will shoot
something locally with its agency DraftFCB, like it has for the upcoming campaign to launch its
new 3 Series Touring car

“The international campaign couldn’t be
more wrong for it in this market,” he says. 

Because Kiwis love their sporty 4WD wagons,
Hedgepeth admits only having a 2WD option has been a chink in its armour for a
while. But he says the new 3 Series
aims to appeal to the legions of Subaru Legacy drivers who might be ready to take a step up. 

“It’s not just for sales, it’s also a bit
of a brand job,” he says. “‘The ultimate driving machine now comes as a 4WD
wagon.’ So it’s making it suitable and accessible for New Zealand.”

Driver Days are also massively important, he says. They’re not cheap to run, and they’re not easy to organise, but because BMW tends to appeal to driving purists, rather than those who may be more attracted to comfort or aesthetics (an area Audi has targeted successfully), he says there’s no substitute
for actually getting behind the wheel, as I was lucky enough to find out at the Southern Hemisphere Proving Grounds last year. 

“We’re supremely confident that our cars
drive better than our competitors, so what better way to display that than
getting bums on seats,” he says. And while this experiential aspect of the marketing mix has so far been aimed at existing customers, it’s in the process of expanding it out to non-customers as well, just as Audi has done

Hedgepeth says it also looked closely at
its sponsorships. Perhaps in an effort to venture into Audi’s territory, it has started
supporting fashion, with Kathyrn Wilson named as an ambassador and NZ Fashion Week added to its portfolio last year. It also moved into food, adding Josh Emmett
as an ambassador and sponsoring Taste of Auckland. Golf and the arts remain important; tennis is a recent addition; and it recently got behind the NZ Polo Open. But he says it has pulled out of yachting and while motorsport is important for the parent company, it’s less so here. 

There is a focus on the Auckland market, he says, as a
lot of the perceptions about brands stem from there. And in some ways that’s been part of
the problem. As the phrase goes: ‘Mercedes is old money, BMW is new money and
Audi is smart money’, which means it’s had to try and shake that slightly ostentatious, ‘80s vibe, and the ‘beemer, boat and bach’ idea that tends to link the brand with the baby boomers. But Hedgepeth is confident the decisions the team has made over the past few years have set the brand on the right course. And the sales figures, which are heading the same way at the start of 2013, seem to vindicate those decisions. 

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