BMW was able to create the premium compact car segment with the introduction of the Mini....

 

  
 
 

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BMW was able to create the premium compact car segment with the introduction of the Mini. Its success has come through a differentiated product offering. It is a market leader and continues to see growth. Differentiation as a mechanism for strategy is examined in this spotlight. Mini has become the dominant market leader in the premium compact car segment by offering a unique product with features customers are willing to pay a premium price for. Read the case below and answer the questions that follow. BMW had a clear vision when it resurrected the vintage British automotive brand in 2001. It was simply to be the first premium brand in the compact car segment. Has it succeeded? Today, Mini sells nearly 300,000 cars a year and grew by over 20 percent from 2011 to 2012. It currently generates almost three times the sales of its most direct competing brand, Smart. BMW is also able to price the Mini at a premium relative to its key competitors, with a typical Mini selling for between $20,000 and $25,000. According to Jurgen Pieper, an analyst with Bankhaus Metzler, the Mini brand is quite profitable, earning about $250 million a year in a fairly difficult automotive market. BMW was able to create this premium compact car niche using a business model with a set of mutually reinforcing attributes. First, it designed the car to offer a unique combination of modern features and capabilities with a classic design. The Mini nameplate was originally on a small British car in 1959. While the model launched by BMW in 2001 has little in common with the original, the basic style of the car reflects the look of the original and allowed it to clearly stand out from the modern SUVs and sedans that dominate today's car market. Thus, the look of the car was one of its key selling points. Second, It set the car apart from most other brands by using low-cost, event-focused advertisements to push the car. For example, rather than advertise on TV during sporting events, they placed a cardboard model of the car seated in football stadiums like a fan appearing to watch the game. BMW also benefited by having the car used as a central element in Hollywood movies, such as Austin Powers in Goldmember in 2002 and The Italian Job in 2003. Today, Mini continues its different advertising methods, spending over half its advertising budget on digital media, such as social networking, online videos, and ads targeted to mobile devices. Third, It has regularly extended Mini's product line while keeping a consistent look and styling. In addition to the basic model, it now has 7 different models and could go up to 10 different models, but they all are easily recognizable as Mini, The challenge that the leaders of Mini face is one that niche differentiators regularly face. They must regularly strive to freshen their product line and look for opportunities to grow their business without losing their focus on what makes Mini different. Sources: Edmonson, G. & Eidam, M. 2004. BMW's Mini just keeps getting mightier, businessweek.com, April 4: np; Reiter, C. 2012. BMW's Mini: Little, but she is fiercel Bloomberg Businessweek, February 6: 24-25; and Foley, A. 2012. Online connections key to Mini's success, marketing chief says, wardsauto.com, October 24: np. What was Mini's growth between 2011 and 2012? Multiple Choice O 30% 5% O 50% 25% 20% Who is Mini's top competitor? Multiple Choice O BMW о Honda Bug O O Prius Smart Which of the following was NOT a way that BMW was able to create the premium compact car niche? Multiple Choice Focused on providing a compact vehicle at the most affordable price possible Low-cost, event-focused advertisements Continuous extension of Mini's product line Classic design Offered unique combinations of modern features and capabilities As discussed in the case, how many different models of the Mini are now available? Multiple Choice O O O 5 3 BMW was able to create the premium compact car segment with the introduction of the Mini. Its success has come through a differentiated product offering. It is a market leader and continues to see growth. Differentiation as a mechanism for strategy is examined in this spotlight. Mini has become the dominant market leader in the premium compact car segment by offering a unique product with features customers are willing to pay a premium price for. Read the case below and answer the questions that follow. BMW had a clear vision when it resurrected the vintage British automotive brand in 2001. It was simply to be the first premium brand in the compact car segment. Has it succeeded? Today, Mini sells nearly 300,000 cars a year and grew by over 20 percent from 2011 to 2012. It currently generates almost three times the sales of its most direct competing brand, Smart. BMW is also able to price the Mini at a premium relative to its key competitors, with a typical Mini selling for between $20,000 and $25,000. According to Jurgen Pieper, an analyst with Bankhaus Metzler, the Mini brand is quite profitable, earning about $250 million a year in a fairly difficult automotive market. BMW was able to create this premium compact car niche using a business model with a set of mutually reinforcing attributes. First, it designed the car to offer a unique combination of modern features and capabilities with a classic design. The Mini nameplate was originally on a small British car in 1959. While the model launched by BMW in 2001 has little in common with the original, the basic style of the car reflects the look of the original and allowed it to clearly stand out from the modern SUVs and sedans that dominate today's car market. Thus, the look of the car was one of its key selling points. Second, It set the car apart from most other brands by using low-cost, event-focused advertisements to push the car. For example, rather than advertise on TV during sporting events, they placed a cardboard model of the car seated in football stadiums like a fan appearing to watch the game. BMW also benefited by having the car used as a central element in Hollywood movies, such as Austin Powers in Goldmember in 2002 and The Italian Job in 2003. Today, Mini continues its different advertising methods, spending over half its advertising budget on digital media, such as social networking, online videos, and ads targeted to mobile devices. Third, It has regularly extended Mini's product line while keeping a consistent look and styling. In addition to the basic model, it now has 7 different models and could go up to 10 different models, but they all are easily recognizable as Mini, The challenge that the leaders of Mini face is one that niche differentiators regularly face. They must regularly strive to freshen their product line and look for opportunities to grow their business without losing their focus on what makes Mini different. Sources: Edmonson, G. & Eidam, M. 2004. BMW's Mini just keeps getting mightier, businessweek.com, April 4: np; Reiter, C. 2012. BMW's Mini: Little, but she is fiercel Bloomberg Businessweek, February 6: 24-25; and Foley, A. 2012. Online connections key to Mini's success, marketing chief says, wardsauto.com, October 24: np. What was Mini's growth between 2011 and 2012? Multiple Choice O 30% 5% O 50% 25% 20% Who is Mini's top competitor? Multiple Choice O BMW о Honda Bug O O Prius Smart Which of the following was NOT a way that BMW was able to create the premium compact car niche? Multiple Choice Focused on providing a compact vehicle at the most affordable price possible Low-cost, event-focused advertisements Continuous extension of Mini's product line Classic design Offered unique combinations of modern features and capabilities As discussed in the case, how many different models of the Mini are now available? Multiple Choice O O O 5 3

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a After reading the case we conclude that Minis growth was 2... View the full answer