Isn’t it a contradictory copy? The headline says that there are 1000 reasons why you should visit a Volkswagen store else you will regret it. The body copy says that “besides superior German Engineering, there’s now a great reason to head out to ….”. It means that there are only two reasons. The ad is simply exaggerating. Moreover, I really can’t see 1000 reasons to visit a Volkswagen store. A boring attempt at an ad.
Ratan Tata stayed true to his word of giving India the ‘1 lakh’ car and showing the world that India is not all about cost advantage but can talk and walk innovativeness. The whole world converged in India when Tata Nano was launched. Tata Nano was an embodiment of catering to the ‘bottom-of-the-pyramid’ customer. It was supposed to show that given a value proposition, no product will fail irrespective of the target segment. Technically, it isn’t a bottom-of-the-pyramid product but in the context of the car market and sub USD3000 price tag can be considered as one such product.
Nano was considered to be so much in demand even prior to its launch because it gave an India, the possibility of a four-wheeler at a price unthinkable before. However it did not result in the forecasted sales. There were many reasons for it. As obvious, consumer behaviour was the critical reason. Nano failed on this count. Nano does not, and will never be able to give the consumer the aura of buying a car. In India, when a family buys a car, it signals their arrival on the richness scale. It signifies a certain standard of living. Nano, unfortunately, does not have the snob value generally associated with buying car in India.
One of the other reasons is the negative publicity it received due to the fire mishaps in its rear engine. Rear engines are generally considered unsafe. Although a perception, it added to the frenzy with people staying away from the Nano. For Nano, publicity turned out to be a double edged sword. It got free publicity during, prior and after its launch due to its ridiculously low price tag but the same publicity turned up on its head in a negative way after the mishaps. News of some customers suing the Tatas for compromising on their safety did not do much good to the Tata brand as well.
Things though are changing now. With production volumes up and better distribution in place, we can now see the Nano TVCs running. Although not quite an outstanding ad, it is decently good. I am not sure if I am reading the minds of the Tata Brand Managers but it seems that they are targeting the Tier 1 or 2 and rural towns who have disposable incomes. The second TVC is quite obvious in tis attempt at targeting the couple to move on from two-wheelers to the four-wheeler. Here too I am slightly unhappy with the casting of the actors in the ad. The urban couple would wait till they buy a bigger car rather than a Nano. They have double incomes with both husband-wife earning and easy financing options. A middle aged couple conservative in their buying would have been a more apt audience.
The Nano indeed is picking up volumes now but the mystery behind sluggish sales isn’t a mystery anymore or is it?
Last couple of years has seen a lot of rebranding exercise. Godrej, Shoppers Stop, India Post, CEAT Tyres, Essar, Bajaj, Videocon and the latest being Airtel. Some have been praised, some not. But that is not the topic of discussion here. The 26 years relationship between the Hero Group and the Honda Group has been finally ended with the announcement of the Munjals buying the 26% stake from the Honda group. Tensions had been simmering and it was inevitable after Honda could no longer be happy with the 26% stake and started their own set up in India with Honda Motorcycle & Scooter India Pvt. Ltd.
This opens up the market for other Indian motorcycle players since Hero Honda was the largest player in terms of volume of sales. Now with both breaking up, Hero can enter segments where Honda was present and Honda can enter segments where Hero was present. Increase competition could lead to price wars in the immediate future with both brands wanting to gain market share and build an individual brand identity. Here is the catch.
Honda has an individual identity in India. Hero does not. It has always been in the company of Honda and has leveraged the Honda name for Japanese technology in the minds of the Indian consumers, directly or indirectly. Thus should Hero go for a corporate rebranding exercise with its logo if not the name? Hero can now also export its motorbikes to the developing nations which are such a big market. Baja Auto would testify to that with its huge exports. Changing name would not be a good idea but creating a new logo would seem to be good.
With the Honda name gone, Hero would need to tell the consumer about its technological expertise and R&D facilities as well. It would need to spend on increasing its product mix with only the hero name with the individual brand name. a factor which would hinder Hero also would be its existing products which are strong names such as CBZ, Splendor, Karizma in the urban markets whereas the other good names such as Passion, CD 100 which are strong in the rural markets. They would bear the Hero Honda name. Hero would need to launch new bikes to not just take on market competition but also the competition within. Not in the short term but in the long term where it would slowly need to take away these big brands and move its own brands ahead without losing on the cash inflow which these current brands would bring. A sort of catch 22 situation.
The same problem doesn’t arise for Honda since it doesn’t mind taking on these brands since the name is only attached and the earning they get is only through royalty which isn’t much high compared to what Hero would be getting form Hero Honda
It could also lead to dealer poaching by Honda from the Hero Honda’s intensive penetration although it is said that it’s a mutual understanding that it should not happen. Price would be an advantage to Hero vis-à-vis Honda. The spare part availability and its lower price would be of a greater advantage to Hero than Honda.
Speaking from a broader perspective with long term focus, it’s a good thing for both Hero and Honda with opening up of newer markets for both. A new logo by Hero would seem to be a natural step ahead with its own identity creation. Just some food for thought would be, can Hero think on the lines of what Bajaj is thinking i.e. change over to a house of brands with individual brand names. Bajaj has strong brand equity with Bajaj name with lot of hindrance from the other Bajaj players in the family. It would take a lot of gumption to do that. Hero on the other hand would do well to go ahead with it this and take a head start over its immediate competitor.
Taking on the establishment or taking risks, runs in the Bajaj family. From Rahul Bajaj championing the cause of Indian industry to stop foreign players into India to his son shifting focus from the cash cow scooters to motorbikes to take on the Japanese players in motorbikes to the radical thought of making Bajaj Auto from a ‘Branded House’ to a ‘House of Brands’, surely they are a family who think to out-maneuver competition.
Rahul Bajaj was initially averse to the idea the bikes sporting individual brand names and Bajaj Auto will be a house of independent brands like FMCG giants Unilever and P&G. The focus was to be on four brands – Pulsar, Boxer, Discover and KTM. It would not use the parent name on its identity. But with the success of Bajaj Auto as one of the leading motorbikes manufacturers and stopping the scooters with Rajiv Bajaj at the helm, the senior Bajaj has to accept it.
Now with the help of one of the leading Marketing gurus and management consultants Jack Trout of Trout and Partners who has given the positioning bible to us, Rajiv has taken an enormous step. An attempt to associate the Bajaj brand name exclusively with the motorcycles made by his company and the removal of Bajaj name from other products/ services ranging from hair oil, home appliances, insurance to financial services.
The strategy to do this is based on Trout’s thoughts that a particular brand must stand for only one thing in the mind of the consumer. Line extension is the gravest mistake any brand can do. This though not a line extension has similar areas. According to them, Bajaj should stand only for motorbikes in the consumer’s mind. All other Bajaj brands such as Bajaj-Allianz, Bajaj Electricals, and Bajaj Finserv among others should remove the brand name and try to get an individual identity. This would not only help them stand on their own accord based on brand qualities and brand values but also act as a differentiation from competition.
I tend to differ with the thought because the principle which applies to brands in the developed world is being applied to the developing world that have emerged and evolved in a different way. The consumer behavior is starkly diverse and the emotional quotient among brands in the eastern world is far more pronounced than in the west. In India, line extension has worked till now because of the trust that has been instilled in the brand. Tatas, Birlas, Godrejs, Ambanis and a host of other family have run businesses have ventured into diverse fields with using the same brand name. And they have done well and continue to do so.
These brands have evolved since the pre-liberalization days and have a trust and understanding among Indian consumers. New brands have emerged since then but these old brands have stood the test of time. The Tatas cannot even think of removing the name from their diverse offerings to make Tata a ‘House of Brands’.
Changing the automotive business and marketing it individually is one thing but doing it across industries is slightly off target I would presume. One of the biggest brands in the world GE, which has a product offering which no company, can boast of. There are into all products and services ranging from consumer goods to aviation. They have not changed their GE lineage inspite of being in the most competitive and diverse market as the US. Bajaj name is even more important in the rural and semi-rural areas of the country which are yet to be tapped. Bajaj name would give the company a head start over other foreign brands.
All said and done, this is even more difficult since some of the Bajaj businesses are run by other family members who are strictly against the name change. So such a thing happening would be highly improbable if not impossible.
Consumer involvement in a purchase decision is highest when it comes to buying a house be it in India or anywhere around the world. This is not only important from a marketing point of view but also from an economic scenario. We have a live example of how the urge for buying a house i.e. the US housing bubble created an economic crisis. Closer home, we have HDFC which has one of the highest recalls amongst home buyers and general public alike because it helped the Indian consumer buy a house during the pre-liberalization era.
After a house, the car becomes the second most important decision concerning a family. A car is as much as practical decision on price and features as it is an emotional one. Don’t we all remember our first cycle in childhood or bike in during college days. How we took care of it. Similarly there is an emotional bonding we have with our car. Not just for the husband but also for the wife and kids. The family has been used in umpteen numbers of ads on television to sell cars.
The Volkswagen Vento TVC currently running on GECs on prime time takes this emotional quotient a step further. The communication route adopted for the TVC is ‘tears of perfection’ by car engineers. It shows the various stages that the car goes through during manufacturing with so much emotional involvement that it is difficult for them to let go off the car from the plant. It indirectly also refers too its old communication of German engineering. The plant snaps show the sophisticated equipment and the fabulously clean set-up.
Volkswagen had to build an emotional connect with the Indian consumer for whom Tata, Bajaj and Maruti are natural preferences in terms of sentimental value. A wonderfully executed ad which brings out the emotions which surely will ad to the already high brand equity which Volkswagen enjoys. Not an ad which breaks the clutter but certainly will make the male of the house and young professionals take notice.
The rule of advertising is to use celebrity or people in ads who relate to the target audience. E.g. A sportsman would endorse a sports shoes not a filmstar. The rule doesn’t hold in the continuously changing market in India. Especially if it involves children. There was a time when children were used in ads only for children’s products such as nutrition category (Bournvita, Chyawanprash) or ice creams (Amul or Kwality) or chocolates (Cadbury).
As time progressed children were used more and more in ads for products not bought for them but were for household consumption such as consumer durables (Airconditoners, refrigerators, television, Audio systems) or food (Maggi, type of masala). Pester power was considered to be the weapon then. Things have not changed. Pester power still remains but the thought process behind using children for an array or products/ services has changed. Nowadays children are used for all types of product/ service categories. Aviation, banks (Axis bank, IDBI bank, Kotak bank), Cars (Volkswagen, Maruti), insurance (ICICI Pru, HDFC Standard Life, Metlife, Max newyork), detergent (Rin, Ariel, Tide, Wheel), oral care (Colgate, Pepsodent), tourism (Mahindra resorts), real estate (almost all ads in print media such as Lodha, DLF, HDIL), mutual funds, retail (big bazaar), Textile (Raymonds), telecommunications (Vodafone), oil and gas(Jaypee), cement, steel to name a few companies. You name a category and children are used. The rationale being that research has shown ads with children having more recall value than its ads of competitors without children. Children are endearing to all of us. This could be the reason for the high recall.
Communication is all about the message rather than the characters involved. The effectiveness of an ad is in understanding the way to reach the target audience and knowing the idea to make the target audience relate to the message and thus the product/ service. This has been understood by the Indian advertising industry.
Thus we see the latest offering from Metlife fixed income plan where we see the grand son blackmailing his grandmother for buying stuff and relating it to fixed income from financial products. A child in an ad who does not know what insurance means.
