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Media Planning for BMW ActiveHybrid 7. The BMW ActiveHybrid 7 was introduced in 2010. This is a leading product for BMW to access to the high-end hybrid power vehicle market. It has numerous unique advantages over its competitor, Lexus and Mercedes-Benz.

Free essay example:

UNITED INTERNATIONAL COLLEGE

Media Planning for BMW ActiveHybrid 7

Group Members

Bella Choi (0831400004)

Ethan Zhu (0831400103)

John He (0831400017)

William Ho (0831400018)

2011/5/15


Situation Analysis

  • History of BMW

Bavarian Motor Works (BMW) was found in 1916 originally as an aircraft engine manufacturer. BMW’s white and blue logo was inspired by the Bavaria’s flag which shows the colors of the Free State of Bavaria where BMW headquarters in. The company was not a listed company until 1918. In the initial stage, the company was devoting to the development and production of the aircraft engines. After the World War I, BMW was forbidden to stay in this industry by the Versailles Armistice Treaty. Then, BMW shifted to produce motorcycle in 1923. Five years later, BMW acquired an experienced automobile producer, the Eisenach automobile plant, and began to access the automobile markets. The first BMW’s automobile came out in 1929. Afterwards, BMW produced a lot of fantastic products in the automobile industry. These products continue to help BMW to build a strong brand name and perfect reputation in all human beings’ mind. Now, BMW is becoming one of the world’s most successful and profitable automobile and motorcycle manufacturers.

  • Information about the China Market
  • In 2010, because of the rapid development of the purchasing power of the Chinese people, the domestic automobile sales were 1142 million with a 35% year-on-year growth rate. Meanwhile, the imported luxury car sales exceeded 676,000 with a 69% year-on-year growth rate which was twice as rapid as the overall market. BMW sold approximately 169,000 automobiles, while Audi and Mercedes-Benz achieved more than 228,000 and 147,000 sales volumes.
  • In China, people prefer luxury cars which are manufactured by German companies, because of their solidness and stability, classic decorations, one of the safest frames in the world, and the comfortable space inside.
  • There are lots of immature markets existing in China, including the high-end hybrid power vehicles. After the introduction of Lexus’ and Mercedes-Benz’s hybrid power automobiles, BMW tried their best to follow such pioneers’ steps to join the market. The situation of three parties surviving and thriving is outstanding in Taiwan’s high-end hybrid power vehicle market. Moreover, it is the same as in the global market.
  • Here is the table of “Automobile Market Analysis in Beijing, in August, 2010.” It shows that the automobile market in Beijing continued expanding in 2009 and 2010.

Month

2009

2010

New Car Sales

Second-Hand Car Sales

New Car Sales

Second-Hand Car Sales

1

52934

33783

63765 (+20%)

37500 (+11%)

2

38714

27441

53781 (+38%)

29353 (6.9%)

3

49796

43195

60121 (+20%)

38618 (-11%)

4

55621

41794

66638 (+19%)

41952 (+0.3%)

5

58209

38766

71462 (+22%)

42093 (+8.5%)

6

56943

39062

62845 (+10%)

37832 (-4%)

7

54293

35196

59556 (-6%)

36266 (-4%)

8

60132

35868

75078 (26%)

42997 (+19%)

9

70187

39155

10

51259

29788

11

72596

40604

12

81229

41444

Total

701983

446096

  • Product—BMW ActiveHybrid 7

The BMW ActiveHybrid 7 was introduced in 2010. This is a leading product for BMW to access to the high-end hybrid power vehicle market. It has numerous unique advantages over its competitor, Lexus and Mercedes-Benz.

First of all, Active Hybrid 7 is positioned as a luxury automobile, not only because of its high-price, but also because of its true premium brand, high-performance and low fuel-consumption. Compared with the standard version of 760i, the car's fuel-consumption has improved significantly because of the application of the new hybrid power technology created by BMW. Based on the announcement of U.S. Environmental Protection Agency, the fuel-consumption is merely 26 miles/gallon (EPA, 2010).

The driving force of the ActiveHybrid 7 is really close to the 760i which has a V12 engine. But the price of the ActiveHybrid 7 is much lower than the prediction made by some experts. In addition, even though the weight of the car is increased by the nickel-hydrogen batteries, the fun in driving has never disappointed people. Its acceleration from 0 to 100 km/h is expected to take only 4.9 seconds. In contrast, a similar product with the 7.7 seconds acceleration, which was manufactured by Mercedes-Benz, was completely defeated by ActiveHybrid 7.

The size of the ActiveHybrid 7 becomes much longer and a series of equipment inside the car is also improved. These will absolutely provide both the drivers and the passengers a comfortable travelling environment which is essential for a great amount of people who value these aspects a lot.

Competitive Analysis

  • Competitor One
  • History of Mercedes-Benz

Mercedes-Benz is a world famous automobile brand which is a division of its parent company Daimler AG. It was founded by Karl Benz (who had created the first petrol-power car in the world) Gottlieb Daimler. In 1926, however, their companies were going into a merger. Then the first Mercedes-Benz car was produced and the company Daimler-Benz was born. (Mercedes-Benz.com, 2010)

In addition, Mercedes-Benz recently ranked the fourth (Volkswagen fifth, Fiat sixth) in the Ranking of First Hundred Large Companies in Europe. In the world’s largest automobile company ranking, Mercedes-Benz only come after the U.S. General Motors, Ford and Toyota.

  • Mercedes-Benz in China

In 1986, Mercedes-Benz (China) Motor Sales Co., Ltd. was established. So far, more than 150 authorized sales centers and authorized services centers were founded in about 70 cities in China (Mercedes-Benz.com, 2010). There are dozens of models of Mercedes-Benz which are driven in the Chinese highway, including S-Class, C-Class, E-Sedans, and so on. As Björn Hauber (2010), the sales and marketing director of Mercedes-Benz, said that, “In China, from January to August, 87,500 Benzs were sold. The sales rose more than 130% from the year earlier. I am confident that our sales will exceed 100 thousand in 2010 since we have the speediest growth in this market.” Actually, the goal made by Mr. Hauber was achieved two month earlier than his schedule.

  • Competitive Product—Mercedes-Benz S400 Hybrid

The S400 Hybrid is a luxurysedan produced by Mercedes-Benz Company. It is a hybrid power car. The two major characteristics of this model are dynamic capability and green capability.

For the dynamic capability, the S400 Hybrid’s dynamic system consists of a combustion motor and an electric motor. They can respectively provide the power of 205 kilowatts and 15 kilowatts. It can accelerate from 0 to 100 km/h in 7.2 seconds only. Besides, the power of an electric motor is supplied by a lithium-ion battery which is first applied in a production vehicle. When the car is braking, the battery will recharge through the regenerative brake system. This technology can markedly improve the car’s agility and the boost function. It also allows the engine to use these two power sources for a short period when accelerating.

For the environmental capability, because of the application of the combined drive unit, it can significantly decrease the oil-consumption and CO2 emission of S400 Hybrid.

  • Competitor Two—Lexus
  • History of Lexus

Lexus is a sub-brand of Toyota Motor Corporation. Its name is the combination of the words “luxury” and “excellent” which represents that Lexus specializes in manufacturing luxury and high-end automobiles.

Globally, the mission statement of Lexus is “The Pursuit of Perfection.” In America, it is modified a little bit—“The Passionate Pursuit of Perfection.” It also targets the three most famous Germen automobile manufactures as its competitors which are BMW, Mercedes-Benz and Audi. More and more excellent products are created for competing with them. With such a huge series of products, Lexus recently become the best-selling high-end automobile brand in America. According to Cheshi.Com (2011), Lexus sold 322,434 cars in the U.S. market. The amount is much higher than any other domestic or imported luxury cars manufacturers.

  • Lexus in China

Lexus is Japan's top one automaker Toyota Motor Corporation's luxury brand which was first introduced in 1989 in the US market. But in only ten years, since 1999, Lexus overtook those US top sellers such as Mercedes-Benz and BMW, becoming the nation's best-selling luxury car brand until now. Figures from the China Trading Center for Automobile Import show that Lexus has already surpassed all the imported luxury vehicle brands during the first half of 2007. This has changed the landscape of Chinese luxury car market which has been long dominated by BMW, Audi and Mercedes-Benz (Gasgoo.com, 2007).”

  • Competitive Product—Lexus LS 600hl

Based on the information provided by CheShi.Com (2011) and the website of Lexus, two main features of LS 600hl are being introduced.

  • Power

The Lexus LS 600hl is the world’s first full-hybrid automobile. It has a 5.0L V D-4S Multi fuel injection engine which can provide with 394.4 maximum horsepower. Under the interaction between this engine and the MH batteries, the dynamic of LS 600hl soars to 445 horsepower. With such a powerful dynamic system and an 8-speed Electronic Continuously Variable Transmission system, it gives up-to-6.3 seconds acceleration from 0 km/h to 100 km/h. It is catching up with some vehicles which have V12 engines.

  • Environmental Features

LS 600hl’s dynamic controlling module commands the engine to collaborate with the Permanent Magnet Motor to change gear in order to increase the energy efficiency in the driving status. When braking and decelerating, the energy will be recycled by the HV Closed-End MH batteries modules. It is very good at reducing the oil-consumption and the CO2 emission.

SWOT Analysis

  • Strengths
  1. BMW has a strong brand name and a good brand image in China. Most people think owning BWM car represent as successful social status. The implications of BMW go beyond a car. (Li, 2009)
  2. As the slogan of BMW is "The Ultimate Driving Machine", the excellent handling and good performance of the vehicle strikes root in the hearts of the people.
  3. BMW as a German brand has a high reputation for quality and workmanship. Lots of people realize that German vehicles are safe and reliable.
  4. The BMW ActiveHybrid 7 is the fastest HEV (Hybrid Electric Vehicle) in the world.
  5. The fuel economy of the ActiveHybrid 7 improved significantly, it meets the trend of environmental protection and energy saving.
  • Weaknesses
  1. The price of BMW which sold in China is much higher than the vehicles sold in other countries because of the high import tariff on automobiles in China.
  2. There are many problems with the BMW vehicles which are produced in Shenyang lead to a declining reputation of BMW.
  3. These Chinese consumers who can afford the vehicles do not really care about the fuel economy.
  4. The ActiveHybrid 7 is the most expensive HEV in China.
  • Opportunities
  1. Chinese auto sales volume maintained a high growth rate even doing the financial crisis. From January 2009 to November of 2009, Chinese auto sales volume reached 12.2 million units, representing an increase of 42.4%.(Docin.com 2010)
  2. The brand has built a good reputation of its good quality and artistic design. BMW has been selected in the government official vehicles procurement list. Brand awareness has increased.
  3. More Chinese car consumers prefer using green energy or the environment friendly vehicles since the HEVs (Hybrid Electric Vehicle) have been produced.
  4. BMW is focus on hybrid power enables it to go with the tide in this segment to enhance its market position.
  5. The high-end hybrid power automobile market in China is still immature.
  • Threats
  1. Though the auto market in China is huge, the consuming capacity is comparatively much lower than Europe and North America.
  2. The Chinese government has cancelled most of the policies which are good for the automobile industry. The resistance for BMW’s marketing increased.
  3. The Beijing government has implemented more stringent policies in order to limit the driving to control traffic jams. The auto market has been compressed to some extent.
  4. The fierce competition from both other imported cars and the China-made cars urges BMW to adjust its products’ prices with a flexible mind.
  5. The Chinese consumers lack of knowledge of the hybrid power cars. Hybrid power technology has not received much attention from the government.

PEST Model Analysis

  • Political Factors
  1. China’s government currently both limits the high fuel-consumption vehicles and encourages clean energy vehicles. The Limitation to the Fuel-Consumption of Vehicles (2004) provides a precise policy to standardize the production of automobiles, whereas the government will give subsidies and concessions to the consumption of those clean energy vehicles.
  2. The Development Policies of the Automobile Industry (2009) requires the local governments to abolish those policies which are against the development of the entire automobile industry.
  3. Because of the accession to the WTO, the automobile import tariffs have kept declining in the recent years. Due to this, the price of the imported automobile in China is becoming more and more acceptable and attractive.
  4. Currently the taxes about automobile consumption are overweight, including value-added taxes (17%), consumption taxes (3%-8%), and Tax on Buying Vehicles (10%). In addition, those varieties of costs for buying vehicles extraordinarily limit the growth of the automobile industry. (Du and Zheng, 2009)
  • Economic Factors
  1. Hu Jintao (2008), who is the current Chinese President, stated that stimulating domestic demand is an essential and long-standing factor underlying China´s economic growth. Actually, after the CPC Sixteenth National Congress, the automobile sales in China boosted to some extent.
  2. Du and Zheng (2009) stated that along with the rapid GDP growth and the disposable income of domestic residents, automobile ownership is continuously increasing at a high speed.
  3. The Chinese stock market was dragged down by the Financial Tsunami. It caused the collapse of investors’ confidence. Those monetary tightening policies were adopted.
  4. Libya, one of the world’s largest oil exporters, now is suffering political instability. Of course, the oil price, which is an important factor to reflect the international economy, is seriously affected.
  5. The wealth distance between the rich and the poor is getting bigger in China.
  6. Inflation in China is stalling the development of the automobile industry.
  • Social factors:
  1. In China, the conservative culture recently became one of the most influential factors that disturb the development of R&D and designing in the Chinese automobile industry. Even though there are a lot of Chinese brands existing, their sales are much less than the foreign brands, such as those three big brands from Germany.
  2. China has the most population in of any other country. It is continuously increasing now. At the same time, the demand for automobiles is getting stronger and stronger too. It significantly boosts the sales of the automobiles in China.
  3. It could be seen in the Chinese history, consumers in China are more rational and conservative. For most people it should take a long time to make up their minds.
  4. Consumers in China now are able to gather the information more easily than before. Almost everything about the brand or the car they are interested in will be available on the Internet or other media. It is essential to the improvement of the consumers’ rational buying decision-making process.
  5. Along with the enhancement of the environmental consciousness of Chinese people, the demand for clean power cars are rising. The consumers, especially who tend to be responsible to the planet, will pay less attention to those luxury cars which have a high fuel-consumption.
  • Technological factors:
  1. A fairly large number of domestic automobile companies in China are copy-cats. They are not striving to create or innovate their own products, but copying the advanced techniques from other countries. More to the point, those core technologies, which are the key to survival of the world-famous brands, are not that easy to be completely copied.
  2. BMW is famous for its innovative technologies, especially their energy saving technologies and environmental-friendly technologies, such as ActiveHybrid system and Efficient Dynamics system. Huang (2010) said that although many consumers may consider that the similar technologies from Japan are more mature, actually BMW now are playing a more important role in boosting the development of this area.

Survey Design

We are working on a class project for Media Planning.  We would like you to take a few minutes to answer the following questions.  Please take your time, and read the questions carefully.  All your responses are anonymous and will be kept confidential.

  1. How many cars do you have?
  • 1
  • 2
  • 3
  • More than 3
  1. What are the main usages you consider when you buying a car?
  • Driving to work
  • Business
  • Family
  • Travelling
  • Racing
  • Others: ____________________
  1. How much are you willing to spend on a luxury car? (RMB)
  • 500,000 to 1,000,000
  • 1,000,000 to 1,500,000
  • 1,500,000 to 2,000,000
  • 2,000,000 to 2,500,000
  • 2,500,000 to 3,000,000
  • Above 3,000,000
  1. Which brand is your first consideration when buying a luxury car?
  • Audi
  • BMW
  • Mercedes-Benz
  • Infiniti
  • Acura
  • Lexus
  1. Others: ____________________Which are the important factors that affect you when choosing a car? (Multiple Choice)
  • Economic
  • Appearance
  • Performance
  • Safety
  • Technique
  • Green
  • Brand
  • Comfort
  • Interior decoration
  • Others: ____________________
  1. How do you perceive the BMW brand?

Cheap

__

__

__

__

__

__

__

Luxury

Bad Appearance

__

__

__

__

__

__

__

Good Appearance

Low Performance

__

__

__

__

__

__

__

High Performance

Low Quality

__

__

__

__

__

__

__

High Quality

Low-Tech

__

__

__

__

__

__

__

High-Tech

Unsafe

__

__

__

__

__

__

__

Safe

Non-Environmental

__

__

__

__

__

__

__

Green

  1. For the following statements, please indicate your level of agreement for each of the five statements. Please use 5=strongly agree and 1=strongly disagree.

Statements

Strongly

Agree

Agree

Neutral

Disagree

Strongly Disagree

I care about environment.

5

4

3

2

1

Fuel consumption and emission is important for a vehicle.

5

4

3

2

1

The performance is important for a vehicle.

5

4

3

2

1

I understand the Hybrid Technology

5

4

3

2

1

I know about HEVs (Hybrid Electric Vehicles).

5

4

3

2

1

I will consider buying a HEV in the future.

5

4

3

2

1

  1. How do you learn the information about vehicles?
  • Magazine
  • Newspaper
  • Television
  • Internet
  • Radio
  • Word-of-mouth
  • Others: ____________________
  1. Age: ____________________
  2. Occupation: ____________________
  3. Gender: Male or Female
  4. Numbers of Family Members: ____________________
  5. Please choose a range which can best represent your income per month.
  • 0—5,000 Yuan
  • 5,000—10,000 Yuan
  • 10,000—20,000 Yuan
  • 20,000—40,000 Yuan
  • Above 40,000 Yuan

ENDS

THANKS FOR YOU PARTICIPATION!

Target Audiences

  • Geographic
  • The People’s Republic of China, with a special focus on Beijing

Beijing is on the heart of China. It is the center of economy, culture, and politics of China. In 2009, Beijing’s luxury car ownership exceeded 350,000. It was 100,000 more than Hong Kong. (XCar.Com)

  • Demographic
  • Education level: most are university graduates
  • Employment status: Bankers, businessmen, executives, entrepreneurs, and so on;
  • Income: More than 1,000,000 RMB per year;
  • Home ownership status: Living in Beijing and in surrounding cities;
  • Have a high demand to drive to work.
  • Psychographic
  • Environmentalists who have a green lifestyle and care about environmental protection;
  • Loyal supports of the BMW brand;
  • Innovative, open-minded, accepting of the new ideas and things.
  • Behavioristic
  • Desire low fuel consumption or low CO2 emission which significantly affecting their decision while buy a vehicle;
  • Interested in high-speed, high-performance, and excellent handling;
  • Appreciate high quality and automobile safety;

Objectives

  • To attract more than 1 million visits the official BMW website during theier campaign period;
  • To achieve the title of Sina MicroBlog’s Most Popular Car Brand by measuring the number of fans and counting its hits in overall posts;
  • To increase at least 20% growth of the sales after the campaign.

Media Vehicles

  • Magazine
  • Introduction

Magazines always contain a great quantity of pictures with high quality paper. Because visual effect is an important factor for vehicle promotion, it would be a good choice to use magazines rather than newspapers or radio. Compared to television commercials, magazine advertisements are cheaper, and can maintain a high repeated emergence in magazines advertisements. In addition, the audiences of magazines always have a higher education level or income than the other media. It’s more suitable for our promotion.

Auto-Fan, one of the most famous auto magazines in China, has a large number of audiences and a high reputation. It is also the first one of the semimonthly auto magazine in China. Auto Fan as the promotion channel would aim at the audiences who are enthusiastic in car or have the buying intention. In recent year, “Auto Fan” has had a great performance in E-zine, it also increase our target readers.

  • Price

Advertisement Position

Price (RMB)

Clear Dimension (H*W)

Front cover gate fold

600000

282mm*418mm

Specific Form

Price (RMB)

Clear Dimension (H*W)

Double-pull page (6P) 157g

850000

282mm*418mm

  • CPM
  • Front Page:
    image00.png
  • Double-Dull Page:
    image01.png
  • Strengths and Pros
  • High audience segmentation and selectively. It would reach huge number of people in given audiences.
  • Long life.
  • High reputation and circulation. Auto Fan is one of the most famous auto magazines in China.
  • Close to the market. The headquarters of Auto Fan also is located in Beijing which is our main target market.
  • Weaknesses and Cons
  • Long lead time. It has to make plans weeks or months in advance.
  • Auto Fan is the most expansive channel in magazine advertising.
  • Television
  • Introduction

Launching commercials in TV is one of the most common ways to deliver promotional information. Today more and more people considere TV commercial as a bothersome thing which disturbs them enjoying the news or soaps. They try to avoid commercials through applying zipping, zapping and other methods. It results in the efficiency and effectiveness of launching TV commercials decreases dramatically. However, it is still valuable for our advertisers since people will not stop watching TV.

CCTV 2 is a nationwide satellite TV channel which focuses on carrying the professional financial information to the audiences. In 2010, CCTV 2 was labeled as the Top 10 TV Channel of China. The program it launches included business news, financial forms and so forth. Meanwhile, a large proportion of our target audiences are business people who are supposed to frequently watch this type of finance TV channel. This is why CCTV 2 is chosen to be the main TV channel to carry our commercials.

  • Price

Program

Time

5s

10s

15s

20s

25s

30s

Nighttime A

Mon-Fri 19:58

33000

45900

61900

84200

99000

111500

Nighttime B

Mon-Fri 22:25

Sat 22:55

37000

55500

69400

94400

111000

125000

  • CPM
  • Nighttime A:
    image02.png
  • Nighttime B:
    image03.png
  • Strengths and Pros
  • High geographic coverage. CCTV 2 covers the whole China through the satellite.
  • High households. The second biggest satellite TV channel in China.
  • High market share. CCTV 2 possesses a more than 70% share in the finance TV channel market.
  • Graphics, audios, texts, and videos are all available.
  • Weaknesses and Cons
  • Time limitation causes content limitation.
  • Many other commercials are competing.
  • High producing cost and buying cost.
  • Outdoor Advertisements—Bus Body
  • Introduction

Advertising on the buses’ body is supposed to be a necessity because driving on the road is a must for drivers who are also our target audiences. Today, Beijing’s traffic congestion is considered as a defect by hundreds of thousands of people. But it is a chance for us to launch our outdoor advertisements on the buses’ body because the congestion will effectively and efficiently increase the time people spend on their trip and on the road. Thus, the advertisements will stay in their eyes longer and leave a deeper impression.

On the other hand, Beijing, the heart of China’s economy and politics, has the most developed and effective public transportation network in China. Beijing’s public transportation system operates throughout the day for about 18 hours. It means that the commercials will be continuously carried to the target audiences from 5:00 to 23:00.According to new information provided by the Beijing Transportation Department, in the first season, the average daily passengers of public transportation increased to 19.43 million which is close to the permanent resident population of Beijing at the end of 2009.

  • Price

Media Forms

Level of Lines

Forms of Publishing

Price (RMB)

Producing Fee (RMB)

image04.jpg

A++

Whole bus, color spraying

128000/Bus/Month

18000

image05.jpg

A++

Each side of the bus, banners

108000/Bus/Month

3000

A++ Lines

103/ 104/ 104 Fast/ 105/ 108/ 109/ 113/ 320/ 332/ 420

  • CPM
  • Whole bus, color spraying:
    image06.png
  • Two sides of a bus, banners:
    image07.png
  • Strengths and Pros
  • Cannot be avoided.
  • Wide coverage.
  • Continuousness.
  • High exposure.
  • Weaknesses and Cons
  • Visual Only.
  • Long replacement cycle reduces the timeliness which will result in reduce the attractiveness of the commercial.
  • Simple and short messages lead to lack of information.
  • Internet—Video Sharing Websites
  • Introduction

Today visiting those online video sharing websites become a major form of internet activities. For the world’s biggest video sharing website Youtube, the total click-through rate of its videos reached to 13.9 billion in June of 2010, while the rate of China’s current biggest video sharing website, Tudou, reached 150 million for each day by 25 million independent users. Consequently, placing ads on those video sharing websites is practical with high efficiency and it is an important field for advertisers.

Advertising on the video sharing websites is new form of advertising which is derived from the Chinese. Those foreign leading video sharing websites have never thought about that. An advertising period is created before every video is started. These ads are delivered compulsively and they last 5 seconds to 30 seconds. Of course, they are annoying and bothersome and people are trying to avoid them through switching their attention to other websites temporarily. However, people currently are relying on these websites which are providing them with free television program reviews and many interesting videos. They will avoid them, but a huge number of them will still engage in those campaigns launched on this type of websites.

  • Price
  • Advertising placement before videos

Form

Place

Unit Price

Unit

Advertisement placed before Tudou videos

Video viewing page

120

cpm

Advertisement placed when audience pause the videos

150

cpm

  • CPM (The same as the price mentioned above)
  • Before video begin: 120 RMB
  • When pausing: 150 RMB
  • Strength and Prost
  • Direct selling opportunities
  • High user involvement
  • Multiple pricing options including performance pricing
  • Weakness and Cons
  • Ad practice can be irritating
  • Extreme clutter
  • It is easy to be avoided through pressing the bottom “Alt+Tab”.

Frequency—Ostrow Model

  • Total of all factor scores = 89
  • The Number of factors scored = 17
  • Ideal minimum number of times ads should be seen = 89/17 =5.235

Based on these numbers, the bottom of unadjusted Effective Frequency range is rounded to the nearest whole number, 5. So the Ostrow Base is 5.

In this analysis, the ideal minimum of ad exposures is 16 and the ideal maximum is 21.

Scheduling

Media/Month

Jun.

July

Aug.

Sep.

Oct.

Nov.

TV

Magazine

Bus-Body

Tudou

*Different color is stand for different medias’ scheduling period.

        Campaign period: six months

All the three methods of scheduling advertising will be applied.

For the TV and magazine, the flighting and pulsing patterns are put into use. Since the purchase of automobiles will not be influenced by the seasons and other special time, the gaps of these two patterns are averagely distributed.

        Secondly, the continuity pattern (straight-through advertising) is available for the bus-body advertising. The reason is that it costs a large amount of money to pay for the producing and removing process to the bus company. It is not effective and efficient to apply the fligting and pulsing methods.

        Thirdly, the advertising on Tudou.com will enjoy the pulsing patterns because of the increasing clutter of advertising in this type of website. We have to avoid annoying the target audience and effectively deliver the promotional materials by decreasing the exposure in Tudou.com. Pulsing will be a great solution.

Budget

  • Magazine:
  • Front Page: 600,000 * 3 (times) = 1,800,000 (RMB)
  • Double-Pull Page: 800,000 * 3 (times) = 2,400,000 (RMB)
  • TV:
  • Nighttime A with 10s: 45,900 * 92 (times) = 4,222,800 (RMB)
  • Nighttime B with 10s: 55,500 * 92 (times) = 5,106,000 (RMB)
  • Outdoor Advertising:
  • A++ Lines (1): 128,000 * 3 (months) + 18000 (Producing) = 402,000 (RMB)
  • A++ Lines (2): 108,000 *3 (months ) + 3000 (Producing) = 327,000 (RMB)
  • Internet
  • Before video begin: 120 (CPM) / 1,000 * 1,000,000 (hits) = 120,000 (RMB)
  • When pausing: 150 (CPM) / 1,000 * 1,000,000 (hits) = 150,000 (RMB)
  • Total: 14,527,800 (RMB)

Effectiveness

Two major steps will be taken to implement the evaluation process after the 6 month campaign period.

  1. A post-campaign survey will be delivered to those people who buy the BMW ActiveHybrid 7 in every 4S shop in Beijing. The questionnaire will focus on studying the way they get the information about the car and why they choose the car.
  2. The sales are the most significant factor to show whether the campaign succeeds or not. 6 months after the campaign, we will compare the sales of mid-campaign and post-campaign period to the pre-campaign period.
    Appendix

Comparing Chart

Items

BMW ActiveHybrid 7

M.Benz S400 Hybrid

Lexus LS 600h

Price

2,298,000 RMB

1,458,000 RMB

2,073,000 RMB

The Bodywork

Body

Sedan

Sedan

Sedan

Doors

5

4

4

Guests

4

5

5

Size

Length

5212mm

5266mm

5180mm

Width

1902mm

1871mm

1875mm

Height

1478mm

1479mm

1480mm

Wheel Base

3210mm

3165mm

3090mm

Weight

2120 kg (1980 kg)

2020 kg (1955 kg)

2450 kg (1945 kg)

Gyration Radius

6m

6.1m

5.9m

Tire Size

245/45 R19

255/45 R18

245/45 R19

Performance

Maximum Output Power

465 hp/5500rpm (407 hp/5500rpm)

299 hp/6000rpm (272 hp/6000rpm)

445 hp/6400rpm (380 hp/6400rpm)

Maximum Torque

70.7kgm/2000-3000rpm (61.2 kgm/1750rpm)

38kgm/2400-5000rpm (35.7kgm/2400)

(51.2kgm/4100rpm)

Maximum Speed

250 km/h

250 km/h

250 km/h

0-100 km/h

4.9 sec

7.2 sec

6.3 sec

Energy Data

Oil-Consumption

10.6 km/L (8.8 km/L)

12.3 km/L (9.8 km/L)

11.3 km/L (9.0 km/L)

CO2 Emissions

219 g/km (266 g/km)

188 g/km (234 g/km)

219 g/km (261 g/km)

Engine System

Air Displacement

4395 c.c.

3498 c.c.

4969 c.c.

Compression Ratio

10.0:1

11.7:1

11.8:1

Cylinder Design

V8

V6

V8

Engine Design

DOHC

DOHC

DOHC

Oil-Providing System

Direct Injection

Multiport Fuel Injection

Multiport Fuel Injection

Valves

32

24

32

Engine Technologies

Turbocharging & Electric Hybrid

Electric Hybrid

Electric Hybrid

Frequency—Ostrow Model

MARKET FACTORS

Maturity of product

Mature

1

2

3

4

5

New or Still in Growth phase

Category Leadership

High market share

2

4

6

8

10

Low market share

Level of Competitive Advertising

Low

2

4

6

8

10

High

Frequency of Product Purchase Among Heavy Users (FOP per month)

Low FOP

(0-10)=1

(11-20)=2

(21-30)=3

(31-40)=4

(40+)=5

High FOP

Frequency of Product Use Among Heavy Users (FOU per month)

Low FOU

(0-10)=1

(11-20)=2

(21-30)=3

(31-40)=4

(40+)=5

High FOU

New Channel of Distribution or Retail Chain Coming Online

No

5

10

Yes

Product Uniqueness

Strong

2

4

6

8

10

Little

Average Age of Target Audience

Sixty years old

2

4

6

8

10

Eighteen years old

Target Audience Composition

Mostly users

4

5

6

7

8

Mostly influencers

MESSAGE FACTORS

Switching From Brand/Image to Promotional/Compelling Offer Type Advertising

No switch

5

10

Switching

Complexity of Ad Message

Simple

2

4

6

8

10

Complex

Strength of the Creative

Strong

2

4

6

8

10

Not unique or powerful

Size and Number of Ads Being Used

Large size/few ads

2

4

6

8

10

Small size/three or more different ads

MEDIA FACTORS

New Media Being Used for First

No

5

10

Yes

Qualitative Media Environment

Good showcase/High attentiveness

2

4

6

8

10

Low attention media/clutter

Media Involvement or Value-added Expectations

A lot

1

2

3

4

5

None

Presence of Significant Local Co-op Ad Support

Highly like

3

4

5

6

7

Unlike


Reference

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Che, G. (2010, December 8). Mercedes-Benz (China)—the Annual Corporation in Social Responsibility. Yangcheng Evening News. T05. Retrieved March 7, 2011 from Yangcheng Evening News Online.

Cheng, K. (2010). Test of the BMW ActiveHybrid. Yicar.com. Retrieved March 16, 2011 from: http://news.bitauto.com/drive/20100713/1005191955.html

CheShi.Com. (2011). Vehicles Comparing—BWM ActiveHybrid 7, Mercedes-Benz S400 Hybrid and Lexus LS 600hl. Retrieved from http://product.cheshi.com/prodcomp.php?id=15373,11579,12155 Chen, R. (2007, August 28). The History of Lexus. Retrieved March 8, 2011, from 163 Club Website: http://pub.club.163.com/218/1157077208369.html

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Hongmei, W. (2011, February 12). The Market Analysis of Luxury Cars in 2010. Retrieved February 2, 2010, from ChinaCars website: http://inf.315che.com/n/2011_02/146583/

Hui, S (2010, September 25). Recent Sales of Cars in Beijing. Retrieved February 2, 2010, from CheShi.com website: http://news.cheshi.com/yanjiu/201009/256410.shtml

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