Branding Governing Product Development
It seems likely that dealers would segment themselves along pricing lines and so unless BMW changes its distribution system, the company may well find its products competing on the showroom floor with all the other luxury brands.
While BMW stresses its focus on luxury, and claims it cannot spread across other market segments, in fact it already has three brands ¡V Rolls Royce, BMW and Mini. It has applied the BMW brand to motorbikes and jeeps. Furthermore, in common with other luxury brands, it produces a range of branded products termed a ¡¥lifestyle collection¡¦ including luggage, clothing, watches, umbrellas and key rings although it is unclear how these are sold and distributed. This would suggest the brand is being used more flexibly than the company itself claims.
The experience of Mercedes in managing and protecting its brand through the introduction of the A class, as well as the purloining of its logo as jewellery by US rappers may encourage BMW to be braver with its brand. BMW should consider, based on market research, the introduction of new categories of car while upgrading the 3 Series to maintain its prestige status. This could be done by extending the Mini range, but that brand is so strong on its own that while successful it is unlikely to appeal to a broad range of potential BMW drivers. The company may be overinterpreting the Rover experience which involved a weak brand as well as a myriad of production and design problems.