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Indian luxury car market has seen high growth rates in the past
few years due to variety of factors,
most pertinent of them being growing wealth levels aided by high
economic growth, increasing
consumerism with increase in income levels and finally growing
prosperity in some of Tier-I, Tier-II
cities and rural India due to NRI remittances and infrastructure
boom (land disposal). Along with
these positive drivers, the industry is also facing some
challenges that are unique to Indian context.
These include bad infrastructure, macroeconomic volatility &
strong correlation of this sector withmacroeconomic drivers and
finally an unconsolidated and a diverse market space.
BMW India, which is currently a market leader in this segment,
is facing a tough challenge from Audi
India which has seen high growth in the past two years and
Mercedes-Benz which has renewed its
focus on India as a key emerging market. Audi India, after being
formally established in 2007, has
seen high growth rates in its sales. It recently launched its A6
series in India and plans to launch the
Q3 series sometime next year. Audi India, aspires to become the
market leader in India by 2016.
Mercedes-Benz India, after being established in 1994 and
overthrown by BMW India from the
leadership position has now renewed its focus on the Indian
luxury market. Challenge for BMW is to
maintain leadership in this extremely competitive space
witnessing heavy investment with scope for
increased penetration accompanied with high margins. For this,
we have devised a marketingstrategy for BMW with focus on three key
parameters PRODUCT, REACH and COMMUNICATION.
We carried an exploratory research through focus group
discussions and field visits (in-depth
interviews with Dealers and current users) to first understand
the prime tenets of product strategy of
all three players (BMW, Audi and Mercedes-Benz). To further
understand consumer behavior in this
segment, we floated a survey based on eight major parameters
driving purchase in this segment.
Consumer perception of the three brands with respect to price
and positioning was also assessed.
This survey was administered both personally and on internet and
we collected around100 responses.
The data was sanitized and segmentation analysis was performed.
Segmentation analysis yielded
three clear segments that were identified based on the
Dendogram, with different sets of
requirements
First Segment (FUNCTIONAL) is influenced by accessories, style
and price. Secondsegment (REWARDING) is influenced by status,
comfort and safety and the third segment
(INDULGENCE) is influenced by primarily by driving pleasure and
performance. We have coupled this
primary research with detailed secondary analysis of product
portfolio of all three players in various
segments.To understand the as-is situation in Reach and
communication we carried out secondary
research studying various analyst views. We also looked at
various marketing communication plans
used by these players. To understand the reach we studied their
dealer networks, lead generation
programs and various Sales & promotion related activities.
This was mapped to key market buckets
in the Indian luxury market.
Based on this analysis we have given recommendations to optimize
Product strategy for
FUNCTIONAL and REWARDING segments. These include portfolio
restructuring and focus. We have
purposefully overlooked the INDULGENCE segment as we found
nothing amiss as far as marketing
strategy for this segment was concerned.
For increasing Reach, we propose micro-segmentation of the metro
markets based on expenditure
pattern. Using this we have identified the RICH NEIGHBORHOODS in
various Indian cities and rural
India. Our key suggestions in this area include partnerships
with small car dealers and some tactics to
improve lead generation and after sales service.
Finally, altering the communication mix, we have suggested
realignment of communication platform
on basis of consumer behavior in FUNCTIONAL & REWARDING
segments and also with various key
market buckets. After analyzing various Brand touch points we
have identified bottlenecks in the
online asset space which needs focus.
