BMW, the famous German car making company, focuses on four values in order to create brand identity. The brand provides customers with products which are dynamic, aesthetic, exclusive and innovative. BMW’s success is due to the brand’s continuous research and development activities to achieve better performance and nurturing new ideas and implementing them. However, in 2005 the brand discovered that their promotional approach is being perceived as inhumane by car buyers. So, they reconstructed ad approaches and shifted the focus of their advertisements from performance to ideas and innovation. However, the basic tagline remained unchanged which is “BMW – The Ultimate Driving Machine”. According to the company’s US marketing director Jack Pitney, the emergence of the firm as a “company of ideas” helped the brand to capture larger scale of market as they were able to convince general public how BMW’s aesthetic and innovative ideas convert a car into an ultimate driving machine.
1.1) Communication process that applies to advertising and promotion
Communication processes of various forms are applicable in advertising and promotions. The main function of a communication process is to answer questions and queries of prospects and to impress them. A communication process model is formed with nine elements. Such as: sender, receiver, message, media, encoding, decoding, response, feedback and noise. In the case study of BMW all the elements of this communication model worked. BMW is the party sending a message to their prospects so they are the sender. BMW encoded the message “The ultimate driving machine” to be their tagline. The message of this car manufacturing company was simple. The message which they conveyed to prospects is that they are a company of ideas who focus their innovation to maximize performance of driving experience. The communication channels which BMW used to receive their customers are magazines, internet, BMW websites, external billboards, tradeshow, telesales campaigns etc. These are the media elements. Viewers are the decoder of the message. Consumers are the receiver of the message. The response of consumers to the brand message of BMW being a “performance driven car” was not favourable to the brand. Feedback clarified the fact that BMW was perceived to be inhumane brand due to overemphasis on mechanic performance. Noise occurred due to the unplanned distortions which lead to misinterpretation of brand message by prospects. Pushing performance factor made the brand message inhumane to prospects of BMW this is called noise factor of communication process which caused unwanted errors. BMW communication process is very dynamic. Featuring tradeshow materials, advertising, customer promotion packages, interior design of showrooms, online short films, active website to create buzz, branded entertainment strategy etc (Johnson et al., 2005).
1.2) The organisation of the advertising and promotions
The organisation of advertising and promotions industry works under a centralized system. Organisation of such industry consists of Advertising and marketing managers working with innovative directors, purchase and sales agents and financial staff members. According to Belch, organizations are of five types in advertising and promotion industry. Firstly, it is the advertiser or the client such as BMW. Another organization is the advertising agency that produces and distributes the advertising. Advertising agencies are hired by the advertiser to innovate and execute part or all of their advertising efforts. As BMW of North America hired MDC Partners’ Kirshenbaum Bond and Partners. This company will work with creating brand image of BMW in The United States for national, regional and dealer levels. The deal is for at least 3years and of a whooping amount of $160 million. Media organizations offer a way to reach prospects. Commonly media provides with information or entertainment to the viewers. However, according to the promotional planner media creates an environment so that the company’s communication message may reach customers. A media’s primary objective is to sell itself as a tool for companies to reach their customers. Another type of organization is specialized marketing communications services. These organizations have expertise in certain areas of advertising and promotion and provide services in their areas of expertise. Agencies such as interactive agencies like websites, public relations firms like Agenda, ABI, sales promotion agencies are specialized marketing communications services. The last participants of these industries are those who provide collateral services. Artists, directors, printers, photographers, writers, song writers, self employed free lancers they are known as support factors of advertisers. All these organizations work together in advertising and promotions industry for achieving a common goal. And that is to communicate the brand message effectively with consumers and to create a positive as well as remarkable impression amongst them (Kotlar et al., 2005).
1.3) How promotion is regulated
The regulation of promotional activities depends upon the risk and likely impact of promotion. If the promotion contains high risk factors the firm approaches to immediately withdraw it or edit it in future campaigns (Bagwell, 2007). Formal enforcement actions are also tool for regulating promotions. Thematic work is done to identify if there is a market issue being ignored. They may focus in misleading message, misinterpretation of message, effectiveness of web pages and return on promotional investments. In case study of BMW it is observed that they changed and reinforced their promotional approach in 2005 after a thematic study on luxury car buyers. The promotional activity changed its regulatory directions to build new brand image. After discovering that their message is not being correctly perceived by buyers BMW reinforced and recruited a new ad agency in May, 2006. Who replaced the company’s overemphasis on ‘performance driving’ over the past 33 years with the concept “company of ideas” Thus regulatory tools are applied to control the flow and effect of promotional activities.
1.4) current trends in advertising and effect of ICT in BMW’s advertising and promotion
The current trends in advertising are related with implication of technology to communicate brand message with widespread audience. Advertising is a dynamic profession. Globalization and use of wireless communication are current trends in advertising. Advertising is becoming more complex because of new trends (Boone and Kurtz, 2007). Relating to the fact that now advertisers not only have to think about creative aspects of a commercial but also they have to evaluate profitable ways to reach and communicate with customers. Interactivity with prospects has open new doors for advertisement opportunity. Internet connection and mobile communication via call centre makes it easy to communicate brand message with customers. However readers agreed that revenue from the new forms of advertisement is increasing and revenue from traditional media is decreasing (Terence, 2010). Integrated marketing communication (IMC) is another new trend in advertising approach. It unifies all marketing communication messages which eventually send a single message which promotes the brand’s goals. Globalization poses a dilemma on
Whether to focus on global advertising or local advertising?
How useful will be standardization of ads?
How much consistency is needed to reach customers?
The most important factor to consider is that advertisement is a purposeful act. So it must be created in such a way that it will have some effect or impact on those people who sees it or gets in touch with it (Frank Atkinson, 2013).
The effect of information and communication technology (ICT) in BMW’s advertising and promotion is very crucial to the brand’s success. BMW has an active web page which launched five short films to promote the brand. It also used entertainment media such as movies to create a buzz among consumers. Featuring in James bond films proves to be an effective move. BMW further produced another three short films and launched them in their official web page. The use of interactive media and using other Medias to create buzz about their interactive media proves to be a successful move.
2.1) the role of advertising in an integrated promotional strategy for a business or product decisions
According to Moriarty, advertising is just another element of the marketing communication arsenal (Moriarty, 2009). It is an integral part of an integrated promotional strategy. Advertising is a tool for mass media promotion and so different types of advertisements serve various purposes of communicating with prospects. Advertising is different from other marketing tools such as sales promotion, public relations, personal selling, direct marketing, and digital marketing and so on. Advertising serves as a tool for reaching consumers via radio, newsletters, business directories, newsagents, TV, movies, websites etc. Deciding which media to use is vital factor for effective positioning of brand message. Advertising makes it possible to reach consumers on a large scale. Other than that advertising may also be used to build personal relationships with prospects such as use of emails (Skjottâ€Larsen, 2007).
2.2) branding and how it is used to strengthen a business or product
Branding refers to the attribute of a product which attaches the company with consumers. It can be done by using an image, a symbol, a logo or a slogan. The basic purpose of branding is to serve the company by creating differentiation of product. According to Martin Lindstrom, branding is a tool to create and change market reputation of a company (Taylor, 2000). Branding helps the product development hugely. As branding creates a common expectation from a company’s product the company works hard to fulfill the expectation of consumers and so continuous research and development is done by the company. This results in favorable features for consumers as well as the company. The company gets competitive advantage by producing differentiated product and the consumers are served with new or updated version of products. Branding strengthens a product by creating consumer loyalty and long term consumer relationships (Greg Stine, 2010). BMW, Ferrari, Nescafe, Nokia are multinational giants. Branding celebrates the bigness of such multinational giants by creating customer relationships.
2.3) Creative aspects of advertising strategy. Evaluation of the strategies to address the successful advertising campaign
Advertising is a dynamic medium so creativity is a must thing to get attention via this medium. Without creativity it will be impossible to cut through the clutter of advertisements in competitive market. Creative aspects of advertising strategy focus on creating an intelligent and sharp advertisement which will motivate consumers to buy the product (Belch, 2009). Four aspects of advertising strategy are as follows:
Make the product relevant with consumer needs
Promising values to the customer
Co-operate with brand message
Putting product in the centre of advertisement
A successful advertising campaign uses these strategies to create an urge and awareness amongst consumers about the product. These strategies are evaluated to be successful only if it creates a positive impact on the customers. A successful advertising campaign may be used for branding as well as rebranding a product. An example would be VODAFONE’S Creation “The Zoozoo”, this campaign successfully rebranded “Hutch to Vodafone” in Indian subcontinent (Taylor, 2000).
2.4) ways of working with advertising agencies
The different ways of working with advertising agencies are
Hiring for part of advertising
Hiring for all of advertising effort
Selection of an advertising agency depends upon the evaluation of the fact that which agency best serves the organization. When the advertiser does not have in house agency it has to select from full time or part time agencies. The selection will depend upon the needs of the advertiser.
3.1) Primary techniques of below-the-line promotion. How they are used in an integrated promotional strategy for a business or product
Primary techniques of below the line promotion (BTP) are used to boost sales for the short run. They are used in various ways in an integrated promotional strategy depending on the needs of the market and competitor’s strategy. Some techniques of BTP and their uses in promotional strategy are discussed below:
Price promotion. Discounts are form of such techniques. Giving more product on existing price or cutting price are effective strategies.
Price promotion may harm the reputation or brand image. Or it may increase sales only for a short period of time. So this tool needs to be used very carefully by the brand
According to Promotion and society survey (2010), at the time of increasing costs and inflation in an economy BTP works as a very effective tool.
3.2) Evaluate other techniques used in below-the-line Promotion
Some other techniques used in below the line promotion are:
Giving Coupons to consumers
Offering money refunds to consumers if not satisfied with the product
Organizing competitions and giving prices for purchasing
Frequent user incentives in form of lucrative offers
Point of sales display
4.1) An appropriate process for the formulation of a budget for an integrated promotional strategy
According to Greg Stine, in order to continue to thrive, companies must attract and keep customers and this purpose needs to be fulfilled within a certain budget (Greg Stine, 2004)
An appropriate process for the formulation of a budget goes through the following steps:
Observing market climate
Evaluating brand’s weakness and strengths
Creating competitive marketing strategy
Coming up with up to date plans
Implementing plans to attain goals
Getting feedback of implementation
4.2) Development of a promotional plan for a business or product
A promotional plan for a business or product is designed depending on the fact whether the plan is for an established brand or a new company. Promotional plans set targets, sets time limit for achieving those targets, enriches brand with accountability and provide a budget. The process:
Starts with picturing the image the business want to establish in consumer minds. As in case of BMW they pictured the image of a high performance automobile which provides consumers with sheer driving pleasure.
The next step is to identify the target market.
Then company needs to outline all the features of the product and combine them in accordance with the core message of promotional activities
The next step is to make decisions about budget and allocation of funds.
Finally selecting techniques and medias which best suit the purpose of creating brand image
4.3) Plan the integration of promotional techniques into the promotional strategy for a business or product. Using critical reflection, evaluate the recommended promotional techniques
The integration of promotional techniques such as price incentives for a business or product must focus on the needs of the market, the condition and elasticity of demand, need for price incentives, and consumer responses towards price incentives (Dimitropoulos, 2012). A luxurious product such as BMW may use promotional technique of focusing on research and development for innovating new product features. Setting high prices also positions the product and represents it as a status symbol in consumer’s mind. Thus the integration of promotional techniques such as setting high price, branded entertainment, high performance, exclusivity eventually formulates an overall promotional strategy. However if not communicated properly or if the techniques are conflicting the brand message will be misinterpreted by consumers. Overemphasizing or underemphasizing features or overlooking the actual consumer needs should be avoided (Terence, 2010)
4.4) Appropriate techniques for measuring campaign effectiveness
Moriarty et al. suggests advertising agencies for measuring effectiveness under the five headings of Communication, Profits, Sales, Persuasion, and Attention (Moriarty et al. 2009). According to his suggestions a cube diagram is used to evaluate the usage of advertisement which has repetitive effect.
Kotler et al. (2005) suggest that two areas need to be evaluated in an advertising program. Effectiveness of online campaigns are sometimes measured based on the number of views the page gets.
Promotional techniques and advertising are creative and dynamic force to communicate with customers. So the activities must be set in harmony with market requirements and company’s resources. All the activities must focus towards achieving a common goal of building profitable consumer relationships via effective communication.