Sales Promotion in Automobile Industry

GROUP 6

Automobile Industry An Introduction

Current low car penetration Rising prosperity and the increasing affordability Cars still a symbol of affluence in India

Focus on mileage, brand and after-sales

Advantage for those who Forge judicious alliances and resource-sharing agreements Understand importance of green technologies

Auto Industry in India

Factors Considered

Depending upon first/second car

Symbol of affluence/luxury for modern India

Focus on budget, brand, price, after-sales

Promotional Offers in desired period

Reinforcement for purchase decisions

Lines blurring between rural-urban India

Types of Sales Promotions Exchange offers/Insurance

Maruti Alto 800: Rs 10K exchange, K10:Rs 15K exchange Honda Brio: Free Insurance+ Rs 10K Loyalty Hyundai Eon: Free insurance+ Rs.10K exchange Santo: Insurance+ 10K Loyalty VW Polo: Free Insurance +Rs 10K exchange bonus Toyota Altis: Insurance+ Rs.15K accessories Tata Nano: Rs.15K exchange bonus Mahindra Xylo, Scorpio: Free Insurance Ford Figo:Free Insurance

Financing Options
Maruti WagonR: HDFC 9.99% Maximum Loan Amount - 2,50,000 on Alto Honda Punjab National Bank : up to 90% of on road cost, up to 7 years VW Vento:50% payment & EMI after 11 months Toyota Liva:6.66% or EMI 7777 Etios:7.49% or EMI 9555 Ford HDFC Bank - 100% Finance on Ford Figo

Types of Sales Promotions

Contests
Maruti Honda Hyundai
'Spot The New' Contest. spot the new features of all new Hyundai iGen i20

Tata

Mahindra

Others
Nissan: One Winner to be Selected Every Week to be Given 100% Off on New Car Delivery

Test drive Ritz for Write your i10 free home story-TVC script makeover

Guess the feature Off-road of the day. win the championship Vista Quadrajet90 trophy. variant. Mahindra Thar 44 AC

Types of Sales Promotions

Special Gifts/Introductory Offers
Maruti
Sx4 Celebration Model - 50K + Exchange Maruti Wagon R Vxi - Sony LCD + Rs. 3K Cash

VW

Toyota

Mahindra
E20: Get Subsidy and Exemption benefits of Zero VAT, 15% Subsidy on Basic Price, Upto 50% Waiver on RTO Fees

Ford
Get Assured Coupon Gift:- LG Fridge LG Semi Automatic Washing Machine Sony Mobile Handset

VW Vento Highline Toyota Liva, Etios - Navigation Panasonic Gift Camera + Bluetooth Voucher

Value Addition/Benefits
Maruti
Alto K10 Lxi, Vxi - Music System + 17K Cash Wagon R:11 Fully Loaded Accessories worth Rs. 30K:-

Honda
Civic:Package worth 1.5Lac Accord:Benefits upto 2.6Lac City: Sunroof Model additional Rs. 5000

Hyundai

Tata

Chevrolet
Chevy Sail:3 yr Car, 5 Yr Engine warranty

i20:Package Nano:Rs.25K worth Rs worth Alloy, 25K Music system , Glove box etc

Types of Sales Promotions

Festive Offers
Maruti
Diwali: WagonR: Upto 45000 off Alto Petrol,CNG: Rs.20000 off

Honda
Diwali: 32 Inch LED TV on Brio S Option City - Free Insurance + 4 yrs Complete Warranty + Road Side Assistance + 100% Processing Fees Cash Back

Toyota
Navratri: 15Kworth Accessories and Maintenance Smile Pack on Toyota Altis

Tata
Christmas: Aria : 1Lac discount Navratri : Manza - 50K Off + Exchange

Mahindra

Ford Year End Offers: Diwali : Benefits of upto Rs Ford Figo Petrol - Free Insurance 54,000 Xylo E + (Extended series , Rs Warranty as 39,000 Loyalty Bonus) Mahindra Xylo D series Ford Classic Free Insurance + (Extended Mahindra Warranty as Scorpio EX Loyalty Bonus) EMI of only Rs 9,999 and Mahindra Verito free insurance of up to Rs 20,000.

Other Promotions Promotion - International International

College Grad Program V-dubs Rock promotion
anyone who purchases a 2007 Buy a new Nissan for less than Dealer model or select 2006 cost,Volkswagen PLUS you keep the rebates! models will get a custom First Act Garage Master electric guitar

People who purchases a Volkswagen General launched a sedan motors car gets a complimentary Apple countrywide promotion in May 2005 , iPod. giving away a suborbital flight simulation experience

'Pods Unite' promotion Space Adventures

PLC and Sales Promotion

Alto 800

Introduction

Rs. 20,000 Cash Discount, Rs. 10,000 Exchange Bonus 2 Night, 3 Days Holiday Package Up to 100% Ex-showroom Funding

Swift and Swift Dzire

No Discounts or offers

Growth

Maturity

Wagon R
Discounts varying from 15K to 25K

Decline

Omni
Limited Edition-minor revisions to the exterior Some interior frills such as new seat covers

Trade Promotion

Factory Rebates
Move specific cars.(Spiffs) To new dealers To pick up extra inventory

Increasing Dealers margin

Done by Maruti Suzuki for petrol cars To counter the increasing rent of commercial spaces

Discounts for Retailers and Employee

Exercised by Maruti Suzuki and Hyundai India

Special Gifts / merchandizes

Challenges
Choosing the right target segment Targeting the product based on their need Show short term and long term benefits of the promotion Case of Tata Nano Promoted as a poor peoples car Substitute for a two wheeler Lack of poor finance
Month/year July-2010 Nov-2010 Sales 9000 509 Expected Target 5500 18000

Success Factors

Perception of immediate profit making

Exchange offers on Two wheelers for ladies Ultimate December Offer

Social status upgradation

Corporate discounts and accounts Offers for executives spouses

Promoted Nano as a second car for the house

Month/Year July-2011 July-2012

Units Sold 3260 5485 (+68%)

Last Fiscal 50419 74527 (+44%)

Ultimate December Offer

Month Nov-12 Dec-11 Offer month

Total Sales 62,278 59,981 71,700

Competition

HONDA

GENERAL MOTORS

TATA MOTORS

HYUNDAI

MARUTI

Summer Sale added to competition

3 and EasyInterest free finance package

Limited period buy to win attractive and assured gifts

Ultimate December Offer

Zero interest for a fixed period upto 7 years

Rebates and free accessories

Study on Rural MarketsNamakkal. Tamil Nadu

What do they seek?
Driving Comfort, Fuel Economy, Spare parts, Price, Pickup-Top 5

Key Influence factors

External Technical Cost Service

ANOVA analysis
Age, Education,Occupation, Family income- influencing factors do not differ significantly Various family sizes - influencing External factor significantly different

Importance of Brands
Highly significant difference between the brand of cars with respect to external feature, cost Significant difference between the brand of car and the influence of Technical features Successful: Tata(External), General Motors, Skoda, Honda (Techinical), Maruti( Cost & Service) Unsuccessful: Maruti(External), Fiat(Technical & Service), Daewoo, Honda,GM(Cost)

Rural Focus-Maruti Methodology

Strong and sound rural marketing strategy Ghar Ghar Mein Maruti and Mera Sapna Meri Maruti campaigns 3,000 local villagers nominated as Resident dealer sales executives Supported by over 186 extension counters Influence the opinion leaders of the village (like Sarpanch) by taking them for factory visits Deployed promotions varying from easy finance to gold coins

Video on Wheels Campaign

The film depicting the need of car in a village Villagers are not allowed to leave without a brand recall mechanism. Various financing option and explained in an interactive TV commercial Banking facilities are more accessible to villagers with on the spot booking

Rural Focus-Maruti

Targeting
Orange farmers in Nagpur Turmeric growers in Tiruchengode, Tamil Nadu Granite polishers in Hyderabad Blue pottery makers in Jaipur Madhubani painters in Madhubani, Bihar Potato growers in West Bengal Apple and fruit growers in Himachal Pradesh Fishermen in Howrah Alphonso mango growers in Ratnagiri

Results
The rural market share of Maruti increased from 3.5 percent of total sales five years ago to 26 percent in 2012. Alto clinched 36 percent of rural sales in 2011, Omni hit 13.6 percent and the Wagon R accounted for 12 percent rural sales

These are not farmers struggling to make a livelihood. These are well settled villagers who have the purchasing power to buy a car for their daily needs

Survey Results
Age
20-24 24-28 28-35 35+ Maruti Tata

Brand Preference
Mahindra Honda Hyundai VW Toyota

5% 18% 32% 11% 25%

5%

15% 8% 15% 45%

Model Preference
7 6

16%

5%

5
Hatchback 4 3 2 1 0 Male Female Upto 5 Lac 5-8 Lac 8-12 Lac 12+ Lac Sedan SUV Luxury

Survey Results
Promotional Offers
Availed offers 35% Didnt take offers 65% Brand is Important No good offers Not interested

No value addition

No response

10%

30%

Reasons

20%

20%

20%

Media
Financing Options Test drive

Product Warranty

Expert reviews

Contests Preference Festive Offers Expected

Sales force

Reinforcer Influencer

Friends/Relatives

Exposure

Special Gifts

Auto magazines

Exchange Offer 0 2 4 6 8 10 12

Advertisements 0 5 10 15 20

Survey Results
Purchase Factors
Fuel economy

Reliability of brand

After sales service

Value for money

Referrals/expert reviews

Least Important Important

Prior experience

Most Important

Appearance

Low maintenance

Price of vehicle

Performance 0 2 4 6 8 10 12 14

Suggested Sales Promotion

Online rally
Engaging prospect in a online rally game They will be rewarded will merchandizes and finally a new car

Focus
Customers under the age of 40 yrs Car and racing enthusiast Change brand perceptions Increase favourable opinion Increase demand for the vehicle More trials and enquiry
E.g. Ford Ecosport

Thank YOU