Kamal Basu, Head of Marketing & PR - Volkswagen Passenger Cars, Volkswagen Group Sales India Private Limited, talks about the brand strategy to up the current 2% market-share with new launches in the next two years
By SALONI DUTTA
Q] What are the marketing and communication plans around the launch of the new Vento?
We have a multimedia campaign across Print, Outdoor, Digital, Television and point of sales. We had got good reviews from consumer interactions on the Vento’s performance, driving comfort and safety but there were also some challenges when it came to the overall design aspect of the car. One of the key things that we wanted to bring alive through our communication was the new design element that we had incorporated. We also wanted to bring about an emotional connect, rather than a very functional product story around the car. This was the task that was given to the agency on the basis of which the campaign with the father and the infant was drawn up for Television.
Q] Volkswagen has had its challenges in the auto industry. Could this be because of last mover disadvantage?
To some extent, yes, but that is not the only factor. Among the other factors, the most critical one was the need to have a portfolio of brands. We have had some issues with exchange rates, but now they have more or less stabilized and we have taken a decision to come out with five new launches over the next two years. Another thing we are looking at is bringing back into India some of the iconic brands in our portfolio like the Beetle or the Passat, and in doing so, restore the glory that we believe is rightfully ours in the auto industry.
Q] What is the strategy Volkswagen is putting in place for the launch of these five cars?
Two areas that we look at as a manufacturer - one is image brands, and second, is volume brands. Currently in the mass brands we have Polo and Vento, Jetta to some extent. Vento has just been relaunched with a completely new set of aspects. As a follow up, we are also working on and would be launching within the next 24 months, a sub-4 metre Indian sedan. The beauty about this is that the car has been designed for India, a first for Volkswagen. We also have the image brands; Beetle which is iconic and almost synonymous with Volkswagen, and Passat. The new generation of Passat will be launched shortly. Then globally, we will be relaunching our SUV, Tiguan and that new Tiguan will also roll out on the Indian roads within the next two years. We have decided not to compete immediately with the bottom end of the SUVs but to come in from somewhere around the middle and that is where we will peg the vehicle.
Q] Volkswagen is widely perceived as an expensive brand. How would you change that perception?
From a consumer perspective, it is about having a nice price value equation. People are willing to put money on the table as long as they see value behind that investment. We have a clearly defined vision to be the most accessible, premium German brand and that is what we are going to work towards. By most accessible, I mean being affordable, being available for people across the country through our mass brands. The premium German brand will come through our image models. It is a combination of both mass and image brands that will have to blend beautifully and that is what the strategy is designed to accomplish.
Q] Volkswagen is also perceived to be the most expensive when it comes to after sales service. What are your views on this?
Volkswagen cars get into a service centre once every 15,000 km or once a year. Most of the competitive cars come in thrice a year. Each transaction at the service centre for them may be lower than ours, but the difference is that they do it thrice and we do it once. It is a myth that we are expensive. We are as competitive as anybody else in the marketplace and we would be out of business if we were not. We have started to evaluate our dealers on the basis of customer satisfaction every month and over the last 12 months, across most of our 115 dealerships, there is now a customer services manager which was not the case earlier. We have mandated that they need to move up on the scores of customer service. But perceptions will take time to change.
Q] How are you using media to communicate some of these changes at Volkswagen to connect better with your consumers?
It is not a media approach, rather an experience approach, because if a customer does not experience it, he is not going to go and talk about it. We have got this perception of either being expensive or not being good at service purely by word of mouth. We are trying to make the experience more engaging and better for the customer, so they go and through the same channel, talk about how that perception is not true.
We have a very focused media strategy - we use Print to give out more information about our products. We are trying to use media to enhance safety-related elements. Television primarily is an image driver which we use at the time of new launches and spend about 40% there. We spend about a quarter of our budget on Digital; as the cost of is relatively low compared to Print or Television. We would spend around 30-35% on Print and 10-12% on BTL activities which includes customer interface, going to malls, airports, etc. and displaying our cars. Television would be at best about four to five bursts in a year, otherwise it is Print that we use for sustenance.
Q] Your market-share is at 2%. What needs to change dramatically for you to grow?
Fifty per cent of the cars sold in the Indian market are below Rs 5 lakh. It is very unlikely that we will ever be in that space. Due to the kind of content that we put into our cars or the kind of quality checks that we put our products through, for us, that size or scale of the market doesn’t exist and we are playing the turf in the other 50%. And there, we have cars already and there are more to come.
Currently, we come in the Rs 5-20 lakh segment, and plan to move to the Rs 5-40 lakh segment, and that will expand our customer base as well our market-share. This may of course, all change in a year’s time, depending on the success of the compact sedan that we will launch. It might throw open the doors for an R&D opportunity to look at a sub-Rs 5 lakh car. The compact sedan is going to be our growth driver for the present. We will also look at refurbishments in the Polo and Vento because this is what makes our volumes.
Q] What are some innovations you are planning in your marketing strategy?
As a marketer, I am disappointed with the innovations done in the Digital space. We have been struggling ourselves. We have done a lot of innovations in the Print medium, the talking newspaper, metallic jackets, etc., but the big ideas around innovations in the Digital space are still sometime away. We have a new Digital agency partner on board, and these are the challenges that we have put forth to them. We plan to experiment boldly and hopefully something will click.
Q] What are some challenges that the auto sector faces?
One is the cost of finance, which is a big impediment, because it is still very difficult for people to get a car loan and that is one of the big barriers towards getting more people to own a car. As a developing nation, we have the lowest automotive penetration in the world. Secondly, infrastructure development becomes an important feature because when you have driveable roads is when you have people who want to drive.
ABOUT THE BRAND
Volkswagen, a leading car-maker in Europe, sells its broad model range, from the Up! to the Phaeton, in more than 150 countries worldwide. Volkswagen currently offers the Polo, Vento and Jetta in India.
FACTS
CREATIVE AGENCY: DDB MUDRA
MEDIA AGENCY: MEDIACOM
SOCIAL & DIGITAL MEDIA MARKETING AGENCY: 22 FEET
BTL/ACTIVATION AGENCY: COLLATERAL
PR AGENCY: MSLGROUP INDIA
CMO FILE
Kamal Basu, Head of Marketing & PR - Volkswagen Passenger Cars, Volkswagen Group Sales India Pvt. Limited, has over 25 years of experience in advertising and marketing. Basu was appointed as the Head Marketing and PR at Volkswagen in January 2015. Prior to this, he was the Marketing Head at Skoda Auto India, having earlier spent close to two decades working with leading advertising agencies like Rediffusion Y&R, Ogilvy and Saatchi & Saatchi. Basu has a degree in Marketing Management from Jamnalal Bajaj Institute of Management Studies, Mumbai, and is passionate about cricket, movies and travel.
MARKETING TIP
There is no substitute to understanding the consumer.
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