The Price of Luxury

I am notorious for my intolerance to wake up early. But when I heard that Larry Koch, the M-brand manager for BMW was taking the liberty to discuss his company over bagels and coffee I thought to myself, “hmmm….why not”. However, upon arriving to the discussion I noticed the conversation flowed in a more economic and business context than pure interest. Then I heard this, “How do you feel about social networking sites like twitter?” asks the random girl, who not only arrived half an hour into our 9:15am discussion, but also had the brilliant nerve to ask a question that was nowhere near the context of what we had been discussing with Mr. Larry Koch. “It’s fantastic!” he replies, looking over in my direction as I realize how surprised I must have seemed he muttered, “...well,from our stand point”. Whoa! I was truly stunned. I love twitter, and after running into so many people who do not appreciate it the way I do it was even more intriguing to hear what this car guru had to say. He went on to state how social networking allows luxury car brands to specifically advertise to their target audience. Prior to social networking, car companies used three forms of media to promote its products and those mediums were:

1.)Print Media (ex. newspaper ad, magazine ad, promotional brochures)

2.)T.V. Commercial

3.)Email

Sounds like a decent variety however, the main issues with these mediums are the fact that about 97% of the people it reaches are interested and only about 3% of them can afford the product. However, Social networking allows the companies to advertise to their specific target in a more direct and cost efficient matter. For example, Mr. Koch stated that emails for his company we’re about $2 an email while a tweet may be of little to no cost in comparison.
The other advantage of social networking that Koch brought up was a surprise reaction which increased the promotion on the behalf of his company. This was the BMW mini film series, a brilliant plan the company decided to launch during the post 9/11 economic slump; BMW partnered up with Hollywood using major entertainers such as: Justin Timberlake, Madonna, and actor Daniel Craig just to name a few,who played in the new James Bond film at the time, to film mini movies with brand new models of BMW’s M5 as the center piece of the clips. Due to websites like twitter, the ad was spread worldwide within a matter of minutes. Social networking had a huge impact in making the film series an instant sensation, even blog writers were posting their own opinions as well as praises for the commotion BMW was able to generate. This was a significant event for car companies worldwide who were suffering huge profit loss during this time, and led to imitations of the film series that did not do as well. Koch credits a lot of the success to social networking. During a time when BMW M-Brand Company went from making about $17million a year in the US to $10 million, due to the growing power of the Euro which at one point had been a equivalent $1.50= € 1; Things like dominantly influential advertising and marketing tools were greatly significant to the company.



This was so mind boggling to me I’ve always had a thing for all things luxurious which in my opinions include cars and I’ve always had a knack for marketing. Even so I never knew how prominent something like twitter could be for a company like BMW. Especially because when I was first introduced to the twitter realm I associated influential persons involved in the entertainment world, and the arts. To finally witness someone from a whole another spectrum, value Twitter and other social networking sites as the remarkable tools they can be is great.