Last post on Jan 28, 2013 at 6:55 PM
You are in the Sedans
What is this discussion about?
Audi A8, BMW 7 Series, Jaguar XJ-Series, Lexus LS 460, Mercedes-Benz S-Class, Volkswagen Phaeton, Maserati Quattroporte, Mercedes-Benz CL-Class, Sedan
Let's try to define this forum as being limited to luxury performance vehicles where the mainstream version in a typical configuration has an MSRP of at least $60k.
A luxury vehicle with a base price of $59k qualifies because it would typically be bought with some additional equipment, bringing the MSRP over $60k.
Vehicles like the E, 5, A6, M, or GS, even if available in certain versions over $60k, don't qualify because they are cars from companies that have higher end cars in their lineups.
#17440 of 24723 BMW Misguided Approach
Aug 02, 2006 (8:04 am)
SOURCE: Wall Street Journal dated Aug. 2 , 2006 ( First and foremost I, Dewey hereby disclaim any responsibility of the content from WSJ.com--drivel or non-drivel)
1)For well over a decade, BMW has focused its marketing almost exclusively on its cars' German engineering and technical sophistication, and targeted its message to one very specific customer group -- upscale auto enthusiasts.
And that is exactly the way it should be.
2)In a break with that formula, the company is promoting a corporate culture of independence and innovation. One advertisement in a new campaign that has turned heads in the auto industry highlights the design by architect Zaha Hadid that BMW chose for a striking glass-walled factory in Leipzig, Germany.
Did I not see a similar Phaeton Ad from VW promoting their state of the art glass factory in Dresden, Germany? This is definitely an ominous signal for BMW.
3)BMW's shift in direction began last year, after an internal study revealed 1.9 million consumers bought luxury cars in 2004, and 1.4 million of them didn't even consider BMW. Of those, about 600,000 said they were looking for cars that are fun to drive -- which should be BMW's forte. "That is low hanging fruit," says Jack Pitney, BMW's head of marketing in the U.S.
Huhhh??? So people are unaware that BMWs are fun to drive? The handling dynamics of BMWs are unknown in this market? What a load of bunk!!
Most luxury buyers know that BMW cars are fun to drive, it's just that they have other priorities like higher reliability or they may seek a more luxurious softer ride.
4)GSD&M suggested BMW target the wealthy group of high-achievers author Richard Florida described in his recent book, "The Creative Class."This "idea class" is made up of self-motivated architects, professionals, innovators and entrepreneurs, and numbers about 1.5 million people. They typically are not car nuts although they buy luxury automobiles. They prize innovation, authenticity and, above all, independent thinking.
So the creative classes would not be interested in the older BMW ads emphasizing engineering, performance and handling? I dont think so. Independent thinkers are dependent on ads telling them repetitively how independent BMW is? What kind of independent thinker would depend on such ads for a car purchase?? Sounds to me that BMW is being misguided by picking a flavor of the month theory (compliments from Professor Florida) to base their marketing plan on.
#17441 of 24723 Re: BMW Misguided Approach [dewey]
Aug 02, 2006 (8:56 am)
Thanks again dewey. Good thing you added your disclaimer up front.
Regarding BMW, in the earlier part of this year I spent a lot of time posting my concerns about BMW's vulnerability regarding their market demographics, vehicle models, and what I would characterize as standing on their preceeding success instead of looking forward enough. I also expressed my major concern that Lexus was targeting BMW more directly than in the past.
I remember referring to Lexus as "snipers with powerful scopes that had BMW in their crosshairs". Few agreed with me, and I was the lonely poster for the most part on this point of view, but I still maintain my position.
Yes . . . I still maintain my position and believe that Lexus will continue its assault on BMW which is in its earliest stages (as well as Mercedes, of course) and BMW will clumsily react from wounds that it does not even perceive correctly. Just watch.
#17442 of 24723 Re: BMW Misguided Approach [dewey]
Aug 02, 2006 (9:31 am)
Youn know - whenever you go against your own business model you end up having problems and retrench back a very high percentage of the time. There aren't many success stories out there about companies that alter course. One can argue that Lexus is an example about a successful buiness model variance but to me Lexus didn't reorient Toyota's business model. It was more like creating a new branch of the tree. BMW has a great niche and IMO has to screw up to blow their position. Why risk that niche? Also it sounds like that nonsense about 2/3rd or 3/4's of luxury customers not considering BMW is an overstatement for the purpose of justification.
#17443 of 24723 Re: BMW Misguided Approach [ljflx]
Aug 02, 2006 (9:40 am)
BMW has a great niche and IMO has to screw up to blow their position. Why risk that niche?
That's the million dollar question, isn't it?
The Lexus IS is one reason. Imagine ANY real threat to the bread and butter 3-series, and a reaction is inevitable . . . quite possibly one that "screws up". Also, with the new upcoming LS and the new S, what does BMW have in that class to be competitive?
Again, as the market and competition evolve, there ARE some areas of concern at BMW, and to rely soley on the "niche" as though it is not vulnerable is foolish, IMO.
I see interesting (and quite challenging) times ahead for BMW.
#17445 of 24723 Re: LS vs. S lease [merc1]
Aug 02, 2006 (10:02 am)
"I don't doubt that and have no figures to prove otherwise, but still...leasing doesn't apply to every single buyer and for those whom it doesn't is where price makes at least some type of difference."
Makes no sense. I'm not positive on the number but do know over 50% LEASE luxury cars, and if they are paying similar monthly payments for a less expensive sticker priced car, that kind blows your time and time again argument that the LS sells better because of it's cheaper price. I've said it before and I'll say it again, that argument is lame and just plain wrong. And then when you add in the simple facts that: 1) Lexus builds ONE LS model vs. about MB building 7-8 maybe more(who can keep track?) models. 2) the business premise that offering more variations of a product should get you more sales. your argument of the LS outselling S-class because of price is mute at best.
And when all those people who cross shop a more expensive S-class and the cheaper LS and end up paying about the same for leasing the LS, what does that say about the Lexus LS???
Aug 02, 2006 (10:23 am)
boy, when you grab a tiger by the tail, you really reach down it's throat and grab it from the inside out. Now back to sitting back and enjoying the fireworks....
#17447 of 24723 Re: LS vs. S lease [maxhonda99]
Aug 02, 2006 (10:29 am)
Not a good idea to use the "M" sig. It's potentially confusing on the forum and garyh may end up representing merc as you are in violation of merc's unregistered but widely accepted trademark.
Regarding your post, however, it has long been established that the Lexus advantage is primarily based upon "value" as it relates to
1)the price/content ratio
If Mercedes and Lexus had the SAME reliability ratings, believe me things would be different. And even MORE equalizing would be if the prices were equivalent.
Just for the sake of isolating those two primary Lexus purchase factors, consider that if a Mercedes S-class and a Lexus LS were the same price with the same reliability, I have little doubt that the Lexus world would be turned upside down.
So do not forget what defines the Lexus success story.
It's all about reliability and PRICE (value) and the marketing to back it up. To even SUGGEST that price is not relevant is ridiculous.
Aug 02, 2006 (10:32 am)
#17449 of 24723 Re: BMW Misguided Approach [tagman]
Aug 02, 2006 (10:33 am)
Your comment is very interesting and relatively true as Lexus seeks to develop somekind of "image" or "soul" to its existence in the marketplace around the globe. Yet, Lexus is a bit player world-wide compared to BMW and does not hae the models to take on the serious machinery from BMW. However, the real luxury carmaker that should worry BMW is Audi. This is quite obvious considering the asencion of Audi not only in Europe but globally as well. Audi is moving in a very "stealth" fashion in terms of marketing, culture, profitability(up 36% in the first quarter of 06' so far), and other various aspects of brand building that are not always visible, but doing wonders across the globe. Plus, building some badass automobiles that easily top BMW and the rest in many ways...not to mention one ultra successful and heritage laden motorsport program causing some serious concern down the autobahn in Munich. Who is the true "sport luxury" brand now? Actually, if you look at various vehicle comparisions from the many auto rags over the last couple of years, Audi has easily won the majority against BMW in the various classes of direct comparisions. This is what BMW centers its existence on, isn't it?
And only in the US would the Lexus IS be seen as a possible competitor to the 3-Series. BMW worrys more about the A4 and the C-Class as true competitors to the 3-Series. The A4 continues to do extremely well considering it has been around for a very long time in its current form waiting for a serious replacement next year. The A4 continues to be one the best in its class.