“We are a warm brand from a cold country,” says Sudeep Narayan, Marketing & PR Director, Volvo Auto India.
Narayan talks about focused targeting via affinity marketing partnerships, the brand’s strategy of building business in smaller cities first and the brand’s association with Lakme Fashion Week
Q] The brand came to India in 2007, a late entrant in the automobile industry. Can you talk about the brand’s evolution with marketing insights?
We started with the company itself instead of going with an importer, unlike other players. We make sure we use only local resources. As India is a very diverse market, you need someone to understand its uniqueness. Unfortunately, the concept of safety is still nascent here. We do a spin on safety by calling it technology, and have progressed from protective safety to preventive safety. In India, people will not want to pay more for safety but they will for technology. We follow a global framework, but customize everything to the India market, including price and communication. We also try to do things differently - the Volvo XC60 was launched as ‘the naughty Volvo’. No one expected Volvo to be associated with that image. It was perceived as a strait-jacketed brand, so we are constantly trying to break perceptions.
Q] How does the brand reach out to consumers in a cluttered marketplace?
The USP of our brand is ‘understanding people’, and putting them at the centre of the experience with our cars. We have a lot of engagement activity, like the Lakme Fashion Week and the Volvo World Golf Challenge. We try to bring in a human element, which is the core of our philosophy. When we did the golf tournament, the trophy was not bought off the shelf, but created by a glass artiste. It was a work of art. A lot of people came up to us and said, “I haven’t won the trophy, but can I hold it?” This is where people feel a personal connect with the brand. Our association with Lakme Fashion Week is a very strategic one for the brand. We have a car on display there and will communicate various aspects of it to select invitees, who are part of our target group. We are working with Ritu Beri with a concept of fashion connected to golf this year.
Q] Has the fear of recession affected the luxury market in India? What are the brand’s targets within this segment?
Once you aspire to own something, you don’t think with your head, but your heart. In India, luxury is now accessible. If the customer has the resources, he no longer needs to go abroad for a brand. There is constant communication from brands, which stokes aspiration levels. But India has still not consumed luxury to its full potential. Everyone talked about the downturn in 2009, but in the same year, the luxury market grew by almost 35%. There is a healthy growth happening in this segment year on year. This year, India will sell more cars then the last. Entry level prices have also become much lower, with the entry of smaller players. There has been a CAGR of more than 30% in luxury cars. It was 10,000 cars a couple of years ago, last year it was 23,000 cars. The growth is not fuelled by big cities only –Chandigarh, Aurangabad and similar clusters make important growth markets. We sold 326 cars last year. We aim to sell 800 cars this year and 20,000 by 2020.
Q] Given the growth in Tier II and Tier III cities you mentioned, what is the brand’s penetration in these cities?
In Hyderabad, we would have a marketshare of about 15-20% which is great, given the fact there are only about five main players. Being a late entrant, we are slow off the block, but now we have a presence in eight cities including Cochin and Coimbatore. We are working on the strategy of looking outside in, doing big things in a small place to make our presence felt. For example, we have taken a landmark hoarding at Cochin airport so that people take notice. Once we have a great penetration in smaller cities, we enter big cities, which is reverse strategy. There is so much clutter in Delhi and Mumbai that you may not get noticed.
Q] How does the brand use the mediums available to reach consumers effectively?
We see the mediums with a fresh perspective. For example, we do outdoors with a perspective of what is the consumer’s frame of mind when the billboard is talking to him. Is he looking at it and thinking of a board meeting in the next two hours or his next meal? We also use a fair proportion of print media and direct marketing for print. If a magazine has a database of 30,000 with a subscription database of 25,000, we choose 500 or 1000 people and send Volvo communication to only these 1000 people on the basis of certain factors. This is focused and sharp targeting. We call our showrooms ‘car boutique’, the expectation you have from a showroom is 20 cars which we do not have, but you can also sell with four cars, moreover a boutique has an element of exclusivity and personalization. Our media mix differs per campaign; the ball park proportion would be 50% mainline and 50% engagement (showroom, events, DM, etc.)
Q] Can you share with us some emerging consumer trends?
• The average age of the consumer is becoming younger.
• ‘Money for value’ has replaced value for money. People are now willing to pay more money for more value.
• India no longer wants to be seen as a secondary market.
• Consumers are more educated in making a purchase decision.
Q] The brand has some interesting affinity partnerships. In the digital space, what is your take on social media branding?
We have our presence both on social and paid digital media. All our Facebook fans are organic and not paid. In the commercial digital space, we do a lot of focused targeting. For example, we have tied up with a portal which charges a subscription of Rs 2.5 lakh per annum. If someone can afford that, he can definitely afford a Volvo. We do mastheads for tickets from India to Western Europe - your ticket is something you need to look up at least once. We want to target only people who are genuinely interested. I have a huge disconnect with social media in the sense that I believe it should not be paid for.
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