Frank Schloeder, Director-Marketing, BMW Group India, talks about leveraging the ‘Make in India’ strategy for the brand and passing on that benefit to customers to increase market-share in India
By SALONI DUTTA
Q] How does the ‘Make in India’ strategy add to the BMW’s brand proposition in the country? What were the insights behind the media mix for the ‘Proud to Make in India’ campaign?
Make in India is a big topic in India right now. The Indian government is supporting investors from several countries including Germany. We have ramped up the level of localisation to 50% this year. One of the advantages of producing in India and having a higher level of localisation is that then we are able to pass on certain price benefits to our customers. The campaign also talks about this. We feel that it is an emotionally strong campaign because it speaks about a topic which is in everybody’s mind right now.
Generally, ATL is very expensive in India. When I first came here from Europe, I was surprised as I didn’t expect the price to be so high, especially in Newspaper and Print. We are not a mass manufacturer and don’t need to address the entire population. We have a very small target group in the country which is between 1-3% of the entire population. So you have to plan your media mix around it and TV and Digital work well for us. We are quite active on social media and have launched a concept called BMW stories, and it is about capturing the experiences people have with their BMW. We started with one of the biggest fans of BMW in India, Sachin Tendulkar. What is equally important for us is the daily newspaper and despite the huge costs associated with it, we have to be there. So we try to make a big impact with a strong presence on the cover or on the back pages with a very clear and loud message, rather than having small ads. Events and BTL activities are important too and we are doing a lot in India to get into direct contact with our customers. In luxury, it is all about direct dialogue and not just putting an ad somewhere.
Q] What is the brand’s strategy to leverage in-film integrations?
The cinema industry in India, especially Bollywood, is extremely important and has a high influence in the market and we are very active there. We also leverage events which have a lot of Bollywood stars. There are big Hollywood productions where our cars are featured and we are just starting the partnership with Mission Impossible 5 which will feature a lot of BMW cars and motorcycles. The car is not only there as a product placement but an integral part of the story.
Q] What differentiates BMW in the luxury-auto sector in India? What are your marketing strategies to stay ahead in the game?
Our core segment is the premium automotive segment and we have the same competitors worldwide, the three German manufacturers – Mercedes, Audi and BMW. Between the three of us on a worldwide basis we have more than 80% of the luxury segment, and in India it is even more. This is our relevant set of competition. In India, it is also a slightly different situation because the country in the last couple of years has been going through a difficult economic situation but is thankfully recovering now. We cannot afford to not be profitable as it is the basis for a premium company like us to earn good margins in order to invest in future technologies. We had slowed down on volume development on purpose and had deliberately reduced the pressure because we felt that the market was going in a direction which was driven around pricing and discounting. When you have a great product, good service, and deliver a superior experience then you have to pay the price accordingly. For us the challenge now is to explain what the brand BMW is all about, and why our cars are different from our competitors and why we believe we are better than the competition. BMW is a 99-years-old company with a very long tradition of developing and building cars and we want to build cars that deliver sheer driving pleasure. This is the DNA of the brand. Our brand promise needs to be explained to the audience in a young and new market like India and we have built a very strong marketing strategy around this.
Our USP is our wide model range, the youngest product portfolio, and huge innovations in our cars. We are improving ourselves in the area of service and reaching out to the customers. Luxury is about understanding each customer better including their lifestyle, preferences etc and then connecting with these customers in the areas that are relevant to them. We have consciously engaged very actively in golf; we are also the title sponsors of BMW India Bridal Fashion Week – just look at bridal fashion today, where you have clothes worth Rs 20-30 lakhs from the best designers in the country, and this is what BMW embodies.
Q] How have customer profile and the market environment evolved over the last few years?
The premium segment of the market has undergone huge development in the last 7-10 years and it will only grow at a much higher pace over the next 15-20 years, owing to the development of the demographics. With a boom in the economies of the emerging markets there are today a large number of entrepreneurs or even young companies that have suddenly come into income brackets where they can consume luxury goods. We are seeing this happening gradually in India today and it will only become much bigger in the next couple of years.
Q] Which are your target or strongplay markets for the company? Where do you see scope for growth?
India is the most fragmented market I have ever seen. By fragmented I mean you don’t have customers concentrated around a handful of metros or Tier II cities but they are everywhere, even in rural locations. The size of the country is like a continent in itself, which reflects on the country’s potential. In the last year we have been increasing our dealer network considerably; we now have 39 sales locations, and it is going to go up further in the next couple of years. The business is also not just about selling the car but it is also important that we have a strong service and for that we need a partner on the ground and not 500 kilometres away.
Q] What are the new brand launches planned for the coming few months?
Our business is driven by our product. It is important to innovate and stay at the forefront of technology and at BMW we believe in creating our own trends and chalking our future. We are going to launch around 15 new cars in India this year. The new X6 is just about to be launched.
ABOUT THE BRAND
With its three brands, BMW, Mini and Rolls-Royce, the BMW Group has its sights set firmly on the premium sector of the Indian automobile market. Along with its automotive concerns, the Group’s activities in India comprise marketing of motorcycles, as well as financial services for its premium clientele. Headquartered in Gurgaon (NCR), BMW India is a 100% subsidiary of the BMW Group. Till date, BMW Group has invested over Rs 4.9 billion in BMW India. The BMW Plant in Chennai started operations in March 2007 and locally produces the BMW 1 Series, the BMW 3 Series, the BMW 3 Series Gran Turismo, the BMW 5 Series, the BMW 7 Series, the BMW X1, the BMW X3 and the BMW X5.
FACTS
CREATIVE AGENCY: OGILVY & MATHER, NEW DELHI
MEDIA AGENCY: VIZEUM
SOCIAL & DIGITAL MEDIA MARKETING AGENCY: OGILVYONE WORLDWIDE
DIGITAL MEDIA AGENCY: ISOBAR
CMO FILE
Frank Schloeder has been the Director-Marketing for BMW India since September 2013. Born in Germany, Schloeder has a Master of Business Administration degree from the University of Muenster, Germany and Ecole Supérieurde Commerce Montpellier, France. He started his journey with BMW AG in the Marketing and PR vertical at the Regional Office in Caribbean/Africa in 1999. In 2007, he took up the role of product management for BMW X-Models and Roadster, BMW AG. He started heading lifestyle management at BMW AG in 2010 along with being responsible for product management of BMW 5, 6, 7 Series, X3, X4, X5 and X6.
MARKETING TIP
Listen to the customers and understand them, their lifestyle, what drives them; do your analysis and use that to derive measures. Marketing is not a difficult science.
Feedback: saloni.dutta@exchange4media.com
