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Mini: Compact Car Niche

BMW was able to create the premlum compact car segment with the introduction of the Minl. Its success has come through a differentlated 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 premlum compact car segment by offering a unlque product with features customers are willing to pay a premlum price for.

Read the case 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? In $2017,$ Mini sales peaked at $371,729$ units, but $2019$ sales had declined to $347,465$ units. Loss in sales was further exacerbated COVID. 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, a JCW Convertible can set you back more than $$60k$ after all the extras are added up$.$ According to Jurgen Pleper, an analyst with Bankhaus Metzler, the Mini brand Is quite profitable, earning about $$250$ million a year in a fairly difficult automotive market.

BMW was able to create this premlum 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 Itttle 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 stadlums like a fan appearing to watch the game. BMW also benefited by having the car used as a central element in Hollywood movles, such as Austin Powers in Goldmember In $2002$ and The Itallan Job in $2003.$ Today, Minl continues its different advertising methods, spending over half its advertising budget on digital media, such as soclal 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 seven different models and could go up to $10$ different models, but they all are easily recognizable as MInI.

The challenge that the leaders of Minl face is one that niche differentlators regularly face. They must regularly strive to freshen thelr product line and look for opportunitles to grow their business without losing their focus on what makes Min! different.

Sources:

Edmonson, G$.$ & Eldam, M$.2004.$ BMW$\text{'}$s Minl Just keeps getting mightler. businessweek. com, April $4$: np; Relter, C$.2012.$ BMW$\text{'}$s Minl: Little, but she Is fierce! Bloomberg Businessweek, February $6$: $24-25$; and Foley. A$.2012$ Online connections key to Min's success, marketing chlef says. wardsauto com, October $24$: np; and Hofmann, T$.2021.$ Top $5$ subcompact luxury cars: Minl cooper stlll crushing the competition.

Thecarmagazine.com, October $21$: np$.$

In what year did MInI sales peak?