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Friday, June 25, 2010

Social media in the automobile industry

Unlike the pharmaceutical industry the automobile industry has a clear definition of the customer and has the ability to approach him directly. Customers in turn can clearly influence the product design process by giving feedback during the initial product development stages.

2 years ago BMW Germany has started a Facebook initiative based on the roll out of the new Mini cooper (cabriolet version). Originally the "mini" was a very popular car built in the UK since 1959 by the Austin Motor Company which was later on taken over by BMW. (http://de.wikipedia.org/wiki/Mini_%28Auto%29). In 2002 - after the takeover of Rover by BMW - it was completely re-modeled and re-launched as a "hip" car for young urban professionals initially in Germany and then in other countries as well. A new version was about to be launched a few years later featuring additional factors such as an opening roof, more space in the trunk etc. In order to gather as much client feedback as possible, BMW launched a Mini Facebook page that tried to engage an active dialogue with their customers.

By the same time people at the headquarter Munich believed that customers would change buying behavior purchasing cars on the internet and introduced a new e-commerce feature. That prediction turned out to be wrong. While car purchases in Europe are still executed through face-to-face negotiation the Facebook site turned out to be quite powerful and popular. The main reasons for traditional buying behavior is
- the "touch and feel" of driving in a car
- rebate structure from wholesalers that are still not transparent
- the complexity of the product and the need for further education.

Customers however loved the Facebook initiative and actively started posting messages there or even blogging about their experiences with BMW cars, exchanging views among each other and giving useful advise to the user community. A very important feature was the feedback given to product design people about the needs customers expressed for the new Mini Cooper version. As an example the information that the car should have at least 2 cup holders (instead of one or even none which was until then the standard) was picked up by product design in Munich and led to a change in the interior layout of the car. Overall motivation for the campaign was not only feedback gathering but also spreading out the news about new features and positioning the product within a younger generation of customers that could be reached easier through social media and that represents a better target group for the Mini.
Based on that success a general Facebook page has been launched covering the entire product range of BMW cars extending the potential customer base beyond the traditional BMW driver to the usual Volkswagen customers. (source: http://www.facebook.com/home.php?#!/BMWDeutschland?ref=ts)

It is interesting to see though that BMW has launched country specific facebook pages (UK, US, Deutschland) whereas one would think that Facebook would get a global reach.

Unlike the Astrazeneca example this initiative did have a deadline (which was the product development schedule for the Mini) and did offer the opportunity to provide input which was used to modify some features of the product. Which would have been similar to the interactivity of the Sameer & Vinay case. However as we saw it for the drug companies there is no marketing empowerment given to potential new sales people who could spread out the news among their network and try to become sales entities themselves. I do believe however that this could be a possible feature to be introduced since cars are not as much regulated as drugs are and offer more room for manoeuvre.

In the Astrazeneca case the success was difficult to measure since revenues are generated through wholesalers and hospitals whereas for BMW there were clear revenue goals for the new Mini to be fulfilled and those goals could clearly be measured after the launch of the campaign. Despite the success of the Facebook initiative measured in terms of number of followers on that page the number of sold cars did decrease over the first 9 months in 2009. (http://www.bimmertoday.de/2009/11/03/verkaufszahlen-der-bmw-group-von-januar-bis-september/). But this was more due to the overall financial crisis rather than to a wrong marketing campaign since customer feedback on the use of social media was generally very positive. BMW now employs over 100 people in the area of social media marketing and that trend seems to continue in the futures.

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