Segmentation and Targeting Success story at BMW

In 2001, BMW came up with a video marketing campaign that was not targetted at any of its customer segments. It was targetted at another segment, not the customers of BMW. A must-read for every marketer about segmentation and targeting. Find out who did BMW really target?

How would you begin the marketing process for a company you are working for or for a project that you are working on?

Would you begin by identifying the needs of the customer?

If yes, then which needs of which of your customers?

As a marketer, I might not be working towards just one need of a customer, but different needs of different customers. And when I group the customers based on some homogeneity in their needs, their attributes and in their characteristics, I have performed segmentation perfectly on my audience.

Now I know the different clusters of need that I need to cater to. So to get this correct, segmentation is where one would begin to create value for their customers that the customers need.

Gone are the days of mass marketing. If the need of my customer A is different from the need of the customer B, I would want to tell about the same product to both the customers differently. The targeting needs to be on-point for each of them.

I would want them to associate with the product differently, in line with what utility they see from it. Therefore, I am eventually positioning my product differently to capture each segment’s imagination differently. In fact, I might as well offer them a different customized version of the product, if possible.   

BMW Segmentation and Targeting

The German automobile company, BMW, exemplified an astute sense of Segmentation, Targeting and Positioning (STP).

In 2001, BMW found itself with a market share that had hit a plateau in a market that was cluttered with many international players. In order to stand apart from the crowd and to reinvent its brand identity, BMW initiated an extremely successful marketing campaign.

BMW released a series of short films, titled The Hire. This entire series had numerous short films directed by various avant-garde directors of that time such as Tony Scott, Ang Lee, John Woo, James Brown and many more.

Across all the short films, the lead actor Clive Owen features as the ‘Driver’ who works on contract to transport valuable things from one place to another. His most trusted choice for the road always turns out be a BMW car.

The short films are extremely high on action, with Clive Owen cutting through the traffic on the streets in his swift and swanky BMW cars. He is chased by the antagonists, the cars of whom never seem to be able to match the performance of the BMW. And, therefore, in all of these episodes, Clive Owen is not the only one who emerges as the hero.

BMW Films - The Escape
BMW Films – The Escape

 

BMW Films - The Powder Keg
BMW Films – The Powder Keg

 

If you look at these films, they exuberate a certain kind of attitude. Some of them are edgy, some are extremely violent and gruesome. Some are classy and swanky while some have blood and gore.

So one pertinent question to ask is that what was the purpose of these short films? For whom were they created and what was the impact on the segment for which they were created?

Let’s takes a minute to understand what segments does BMW operate in.

BMW is famous for its series, the 3 series, the 5 series, and the 7 series. It is certain that the customers for each of these series would be fairly different. What would you assume each of the three types of customers to be like?

Prof. Darren Dahl of UBC Saunder School of Business suggests the following could be a kind of segmentation. For the 3 series, one would imagine, the customer would be a 30-35-year-old, young professional working at, say, a private equity firm. He/she still hasn’t made it big but is ambitious.

Similarly, for the other extreme, the 7 series, one would assume the customer to be a CEO or an old, senior management person, most likely a man. He is 55 – 65 probably retired or is in his final years of professional life, he has made it big and the car signifies his achievements.

BMW Series Segment

So who were BMW targeting?

One might be even more inquisitive about which segment was this particular edgy and brashy campaign targeting at. Without much thinking, it will be clear that they weren’t targeting the 7 series segment. Those movies are too violent for their liking and do not fall into the taste of movies which that generation would like to watch.

The target segment definitely isn’t the 40-55-year-old BMW 5 series owners as well. They have a family and the content is too graphic to be seen with kids and family. There could be a certain level of argument about the target being the 3 series owners. But a few of you would begin to realize that the target wasn’t even them.

The target of this campaign were young college students of 17 – 23 year old!

In fact, the segmentation and targeting were so meticulously thought out that it this campaign was delivered in a way that it could only reach that younger segment.

This campaign was released way back in 2002 when there were absolutely negligible internet connections in the US, which was the actual playground of this campaign. The download speeds were slow that would take at least 2-3 hours to get these videos from the internet. The registration processes were also made complex to finally reach this video.

Out of everybody, these young people would be the only ones who would be savvy enough to access it. The 7 series people will not have 2-3 hours to download it, they might not even know how to. So would be the case with the 5 series segment and the 3 series segment.

Despite all of these self-imposed constraints, the first season got over 11 million views right in 2001 which led to the second season in 2002. These numbers speak of the success that this campaign was in creating a recognition of the brand among the younger audience.

The idea to be appreciated here is how the company captured the imagination of the young people and positioned BMW as a brand that connects with them. They get to see the BMW in the way they love seeing cars the most.

So while no other car manufacturer was targeting this age group, BMW comes about and sorts of creates a palpitation in their minds. At the same time, it serves as a nice example of how each segment requires a completely different marketing communication for targeting.

When the youngsters grow up and earn their moolah, they will aspire for BMW, the car which they fancied about since years. So somewhere with the crisp segmentation and targeting and with this beautiful campaign that went on for 3 seasons and quite a few years, BMW assured a sustained popularity and the patronage in the years to come.

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About the Author:

Darpan has worked as a Marketing and Product development strategist at an edu-corporate in New Delhi. He has also worked at a multinational business process outsourcing company in their Marketing & Artificial Intelligence business. He is an engineer by qualification and is currently pursuing MBA from Indian Institute of Management (IIM), Udaipur.