The indian passenger car market has visibly reached a stage of perpetual flux for both sellers and buyers. 4Ps B&M elaborates on the key marketing trends set to shape the future of indian highways
In one of the first few marketing campaigns of significance in the history of the Indian automobile industry, Maruti Suzuki tried to position Omni as a passenger vehicle. Executed by Hindustan Thompson (now JWT) in 1989, the campaign – which was shot in Maruti’s factory premises in Gurgaon and featured the then renowned model Malvika Tiwari – focused only on the print media. The company found that the looks and size of the product were giving it a rather commercial appeal and hence, decided to come up with this campaign. However, many in the industry opposed the idea of a marketing campaign, as there was no real competitor for the company then.
With over 19 passenger vehicle manufacturers operating in the country today offering over 135 products to the Indian consumer, the industry has transformed both in terms of volumes and stature. The competition has increased by manifolds compared to the days when Maruti 800 was the only practical choice available to the consumer. Just three years back in 2008-09, Maruti Suzuki held over 52% share. But its market share has since come down to 42% in the passenger car segment. Players like Ford, Volkswagen, GM, Nissan, Renault, Honda and Toyota have launched a muliti-pronged attack on Maruti’s bread-and-butter small car segment in the recent past. Last year’s SIAM report also reveals that market share of small cars was 47% of the total market in 2011; making it the first year when small cars accounted for less than 50% of total passenger car sales; showing the extent to which market dynamics have shifted.
The new players have already announced their bullish plans for the Indian market, hinting towards the intense dogfight for market share that will be seen in coming times. This is reflecting in advertising spends as well. As per the Adex report for January-September 2011, the automobile sector was the sixth largest spender on TV advertising with a 4% market share and cars were the fifth largest product category with a 2% market share. As far as print is concerned, the segment grew by 36% during January-September 2011. Cars ruled the charts as compared to other product categories in the industry with 67% market share followed by two-wheelers with 13% market share.
While the 1980s didn’t need marketing, the current decade demands that players not only have a marketing strategy, but also keep it sharply focussed with the customers and the competition in mind. Otherwise, the margins for error are lower than ever before and one can easily get caught in the great Indian traffic jam – that is, in a clutter where prospects for growth are seriously compromised. 4Ps B&M analyses some contemporary out-of-the-box innovations by Indian auto majors and why the new paradigms being witnessed are set to reshape auto marketing in the years to come.
Over the past few years, the ways to communicate with the consumer have changed. With new channels like social media and experiential marketing, automakers are trying to make the consumer experience more engaging and interactive to build a stronger brand connect, rather than going for just plain vanilla TVCs and print advertising. “Usage of such platforms makes the consumer experience with the brand more engaging and interesting. The Ford stall at the Auto Expo used various interactive applications to create an impact, which is remembered by the consumer,” affirms Michael Boneham, Managing Director, Ford India. These efforts were visible during the recent Auto Expo. Apart from Ford, Mahindra, Hyundai, Maruti, Land Rover and Renault among others also used experiential media integrated with social media at the event with a view to build a strong connect with the consumer. “The idea of executing a successful experiential marketing campaign is to make the experience of the consumer more engaging and at the same time, ensuring that the message of the brand doesn’t gets diluted,” adds Marc Barrett, CEO – Asia Pacific, Imagination, an agency that has created experiential campaigns for companies like Ford, Land Rover and Renault in the recent past. Players like Maruti Suzuki, Hyundai and Volkswagen are spending 8-10% of their marketing budgets on digital media alone and are looking for newer and better ways to engage. “Each and every market is unique in its very own way and India is no less. In fact, the ways to communicate with consumers change with the media consumption pattern of every market apart from many other things. For instance, Indian consumers are very much available on mobile and the market is way ahead as compared to many markets in terms of mobile penetration,” says Christopher Dahlin, Director-Marketing, Volvo Car Corporation.
It is not only digital, which is changing. Even traditional mediums like TV, print and OOH are witnessing a change in the kind of advertising being done. Volkswagen’s roadblock in the Times of India, the speaking newspaper, Polo cut and other clutter-breaking campaigns have pushed up brand engagement to impressive levels in a short span of time. The ‘Swap your drive’ campaign from Ford India is another brave campaign, which encouraged Indian customers to swap their car for a Ford car for a week and then give detailed feedback on their experience with the car. Companies are willing to take the unconventional routes more often than not. “Our marketing strategy is very different. We make a nation-wide impact via print and then go selective on the TV part complemented by OOH and digital. Our marketing budgets are not huge, although they look like they are. We are not even in the top 10 spenders from the automobile category,” clarifies Lutz Kothe, Head – Marketing, Volkswagen Group Sales. There is a clear need to refine strategies for product launches too. Normally, awareness and recall is at its peak during the launch phase of the product. But it goes down with the falling interest of the consumer. Rather than focusing only on the short span in the pre and post launch period, auto marketers are ensuring that media spends are evenly distributed over a long period of time towards different channels to ensure high recalls & sales. Ford has been adopting this approach of late globally and the results have even surprised their top brass.
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Source : IIPM Editorial, 2012
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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