Post on 10-Dec-2014
description
Participant: Jean-Jacques Pisano
Mentor: Stéphanie Duchemin
How services can help BMW’s new electric brand to reach sufficient target audience to make business sense
04/10/2023 Marketing Genius 2013 - JJP/SD2
Questions and approach
Context
Market Research
Services Proposition
Scoring System
Go-to-market Strategy
• Getting in the mind of a consumer, what could be a services package around electric vehicles?
• How do you perceive the 360° electric approach mentioned on the BMW i website?
• What would you recommend to BMW i?
Question 1 Approach
1
2
3
4
5
• What could be target audiences as “early adopters” for BMW i?
• How can we reach them (media mix and other communication channels)?
Question 2
04/10/2023 Marketing Genius 2013 - JJP/SD3
ContextWhat is BMW i ?
BMW i is a range of high performance low-emission cars as well as innovative mobility solutions, supported by a venture capital company
Product line up Service line up
2013 2014 2015 2016
i3
i3i3
i8
i8
i5
i1
i5
i3
i8
BMW i Ventures
Premium car sharing
Intermodal travel solutions
Smart navigation
Better use of existing space
Source: Green Car Congress Feb 21 2011Source: Wikipedia
1
04/10/2023 Marketing Genius 2013 - JJP/SD4
Can BMW i brand be profitable?
ContextWhy launch BMW i ?
In the current context, Electric Vehicles seem like a proper product to launch, but car manufacturers still need to find the recipe for success
Urbanization(Congestion)
GenerationalNarcissism
OilScarcity
Climate Change(EC CO2 targets)
Sufficient BatteryEnergy
LightweightChassis
People Environment
Technology Business
Source: Wikipedia & Wikipedia Source: Wikipedia & European Commission
Source: BMW i website
1
04/10/2023 Marketing Genius 2013 - JJP/SD5
Private & Independent Customers
39%
61%
Market Research Scope
Belgium consists of 61% Private & Independent Customers vs. 39% Fleet Customers in terms of new car sales, both profiles should be investigated
Source: Febiac, Belgium New Car Sales 2011
Proportion of customer profiles
Fleet
2
04/10/2023 Marketing Genius 2013 - JJP/SD6
Market Research How do Private Customers react to a BMW EV*?
A great BMW EV proposition should combine the best of BMW’s DNA with a no-nonsense user-friendly product, at a decent price
What do you expect from a new BMW product?
• Sporty feeling / driving dynamics / driving pleasure
• Reliability / Premium after-sales
• Premium touch & feel
• Premium designBMW DNA
Electric CarValue Proposition
Expectations
What could refrain you from buying an Electric Vehicle?
• Range anxiety – What if travel distances are too high?
• Recharging woes – What if I don’t have a garage?
• High cost (perception) – purchase price & battery cost
• Style
Reasons for not buying
Source: Tech News Daily Nov 8 2010
Source: BMW Blog
2
*EV: Electric Vehicle
04/10/2023 Marketing Genius 2013 - JJP/SD7
Market ResearchHow do Fleet Customers see the future?
For Fleet Customers, the future will involve both car sharing and intermodal transportation
Mobility
D’Ieteren’s initiative for car sharing Interparking’s mobility card
Source: Fleet Business, May 2nd 2012Source: Keyzee Website
2
04/10/2023 Marketing Genius 2013 - JJP/SD8
• Clever dashboard warning and charging reminders are important tools to reduce range anxiety
• Thanks to low maintenance and energy cost, & high residual value of BMW, it’s key to communicate about TCO. A tool could compare the product with substitutes, & explain the benefit of intermodal. Financial Services further help reducing the perception of price
• Mobility solutions act as an enabler to BMW i. A Smart Traffic tool would tell you when you should depart to minimize traffic
Services PropositionPrivate & Fleet Customers
Range extension and cost perception tools are easy to implement and will help both Private & Fleet Customers to make the switch to EV
3
RationaleRange Extension
NewExisting(non exhaustive)
Battery depletion warnings
Battery charging reminder app/sms
Cost (Perception) Improvement
Financial Services
TCO/TCM* app/website
BMW i Ventures Services
Smart Traffic app/website
Mobility Solutions
*TCO: Total Cost of Ownership vs. TCM: Total Cost of Mobility
Hig
h v
alu
eL
ow
val
ue
04/10/2023 Marketing Genius 2013 - JJP/SD9
• Customers should be able to customize their cars themselves through and app/website. The result would be applied through stickers on the car to keep production costs low (also possible during lifecycle).
• Charging is mainly a problem for Private Customers as EV initially address people living in the city, but with the convenience of a garage. Charging your car through the road itself allows virtually everyone to use EV. A major breakthrough, but it requires government funding.
Services PropositionFor Private Customers
Individualization could be a great differentiator, but without a practical charging solution, Private Customers will remain a niche
3
Design Improvement
NewExisting(non exhaustive)
Body Individualization
Quick charging stations
Public charging stations
Induction charging
Charging Solutions
Rationale
Hig
h v
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04/10/2023 Marketing Genius 2013 - JJP/SD10
• Companies do not wish to handle the hassle related to fleet ownership. BMW should handle tires, fines, damage, energy and keys; especially in the case of a pool.
• Instead of buying a car, customers could subscribe to an intermodal card, allowing them to benefit from any transportation at a monthly cost. This formula would include an EV, but with the possibility to rent a conventional car for holidays. Your green footprint gives your rewards, such as free upgrade at car rental’s. (also possible for Private Customers)
Services PropositionFor Fleet Customers
Fleet customers can more quickly adapt to EV, as they use this opportunity to reduce costs & improve their image, especially if someone handles the admin
3
Services
Hig
h v
alu
e
NewExisting(non exhaustive)
Fleet Management
Green mileage-based intermodal service
Rationale
04/10/2023 Marketing Genius 2013 - JJP/SD11
Scoring SystemHow to approach the market?
BMW should start with Fleet Customers as a first priority. In parallel, lobby for induction charging to open up the Private Customers market.
Scoring system Phasing
# Service
Ease of Implementation
Impact on business
A Fleet Management 3 5
B Individualization 2 5
C Intermodal 3 3
D Charging status 5 5
E Depletion warning 4 5
F Quick charging 4 4
G Public charging 3 3
H Induction charging 1 5
I TCO/TCM tool 3 4
J Financial Services 4 4
K Smart traffic tool 2 2
L i Venture Services 5 1
Value
HIGH
LOW
HIGHLOW
Second priority
First priority
Forget
Evaluate
Ease of implementation
AB
C
DE
F
G
H
I J
K
L
• Initiatives H & K should be supported by government funding to make business sense
• Initiative B has a high value because design consistently comes as a key reason for purchasing a car in NCBS studies, in particular for Premium cars
(Mostly) for Private Cust.
(Mostly) forFleet Cust.
4
For both Customers
04/10/2023 Marketing Genius 2013 - JJP/SD12
Go-to-market Strategy
Target large companies for Fleet and use as example, partner with rental companies as a catalyzer, target high revenues & women among Privates
5
• The early adopters will consist of those who can afford the EV as a second car in the household or those who don’t car-travel (e.g. retirees); living close to/in the city and owning a garage (and likely women more than men).
• The message is “mobility is the luxury of convenience”.
• Consider showcasing the car during sports shows, e.g. golf.
• Use social medias and BMW i Ventures services, to spread the news on mobility services.
• Target only companies with parking
• Start with larger corporations (e.g. European Commission), as they are more likely to have the budget for charging stations; but consider also offering charging stations as part of large fleet deals. Use those companies as examples.
• Organize fleet manager roadshows to present the product (touch & feel) and the associated services.
• Consider partnership with rental companies to offer car sharing programs without heavy investment.
Fleet Customers Private Customers
04/10/2023 Marketing Genius 2013 - JJP/SD13
• EV can’t be profitable unless supported by the proper range of services.
• As the brand will be introduced with the i3, a full EV car, its first Private Customers might be restricted to those with a garage, provided they would not be keen on car travelling or if they can afford the car as a 2nd car in their household.
• When induction charging sees the day, it will really open the doors for full EV cars, and help penetration of hybrid cars to a market whish still represents 61% of total new car sales in Belgium.
• In the meantime, it seems more promising to start on the Fleet side, especially in a context of crisis, in the form of car sharing programs, and in a world where Total Cost of Mobility is the new Total Cost of Ownership. We might not like it, but this is the future of cars, the same way as I used to have my own desk at work, and now all desks are shared.
• It is fair to assume that the ceiling of new passenger car sales will soon be reached in Europe due to congestions/limitations. The sales of those EV might then cannibalize those of other brands in the group. It is therefore important to rethink the positioning of traditional brands & exploit all possible profits generated by the services sold with bmw i brand.
Conclusions – Recommendations