Bmw of North America
TB0301
Dmitry Alenuskin Andreas Schotter
BMW of North America: Dream It. Build It. Drive It.
Any customer can have a car painted any color that he wants so long as it is black. Henry Ford
Introduction
In early January 2012, Joseph Wierda, BMW’s X3 Product Manager, reviewed the latest sales numbers of the popular X3 Series compact SUV. He was, in particular, interested in the effects of BMW’s customization program called “Dream It. Build It. Drive It.” on both unit sales and overall profitability. This new integrated sales and marketing program allowed customers to create a fully customized BMW X3 SUV and have it delivered to their driveway in only a few weeks. The program scored some important points with the media. For example, Martha Stewart, a U.S. TV personality, customized her X3 live on her popular show called The Martha Stewart Show. Just two years earlier, in 2009, the idea of the customization program came at a time when the global financial crisis had hit consumers hard, and most households were putting large ticket item purchases on hold. During the same period, fuel prices reached $4 per gallon. Consequently, BMW’s North American overall sales had plummeted by 30% compared to 2008, and SUV sales were down a staggering 55%. The new customization program was a departure from the traditional North American car purchasing model, where consumers were accustomed to buying a car and driving it off the dealership’s lot right away, after typically receiving some generous discounts or other incentives. Wierda wondered if the program should be extended across all BMW product lines and, if so, what this meant for the regional and global manufacturing strategy, sales and distribution strategy, and the overall competitive positioning of BMW in North America. He needed to make up his mind before the next management meeting at the end of the month where he had to present the proposal to Ludwig Willisch, the recently appointed CEO of BMW North America. This
Dmitry Alenuskin Andreas Schotter
BMW of North America: Dream It. Build It. Drive It.
Any customer can have a car painted any color that he wants so long as it is black. Henry Ford
Introduction
In early January 2012, Joseph Wierda, BMW’s X3 Product Manager, reviewed the latest sales numbers of the popular X3 Series compact SUV. He was, in particular, interested in the effects of BMW’s customization program called “Dream It. Build It. Drive It.” on both unit sales and overall profitability. This new integrated sales and marketing program allowed customers to create a fully customized BMW X3 SUV and have it delivered to their driveway in only a few weeks. The program scored some important points with the media. For example, Martha Stewart, a U.S. TV personality, customized her X3 live on her popular show called The Martha Stewart Show. Just two years earlier, in 2009, the idea of the customization program came at a time when the global financial crisis had hit consumers hard, and most households were putting large ticket item purchases on hold. During the same period, fuel prices reached $4 per gallon. Consequently, BMW’s North American overall sales had plummeted by 30% compared to 2008, and SUV sales were down a staggering 55%. The new customization program was a departure from the traditional North American car purchasing model, where consumers were accustomed to buying a car and driving it off the dealership’s lot right away, after typically receiving some generous discounts or other incentives. Wierda wondered if the program should be extended across all BMW product lines and, if so, what this meant for the regional and global manufacturing strategy, sales and distribution strategy, and the overall competitive positioning of BMW in North America. He needed to make up his mind before the next management meeting at the end of the month where he had to present the proposal to Ludwig Willisch, the recently appointed CEO of BMW North America. This