Sales Promotion in Automobile Industry


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 .

15K accessories Tata •Nano: •Rs. •K10:Rs 15K exchange Honda •Brio: Free Insurance+ Rs 10K Loyalty Hyundai •Eon: Free insurance+ Rs.2. Scorpio: Free Insurance Ford •Figo:Free Insurance Financing Options Maruti •WagonR: HDFC 9.50.15K exchange bonus Mahindra •Xylo.10K exchange •Santo: Insurance+ 10K Loyalty VW •Polo: Free Insurance +Rs 10K exchange bonus Toyota •Altis: Insurance+ •Rs.Types of Sales Promotions Exchange offers/Insurance Maruti •Alto 800: Rs 10K exchange.100% Finance on Ford Figo .49% or EMI 9555 Ford •HDFC Bank .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:6.99% •Maximum Loan Amount .66% or EMI 7777 •Etios:7.

Types of Sales Promotions Contests Maruti Honda Hyundai 'Spot The New' Contest. win the championship Vista Quadrajet90 trophy. Mahindra Thar 4×4 AC . variant. 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.

Music System + 17K Cash •Wagon R:11 Fully Loaded Accessories worth Rs.6Lac •City: Sunroof Model additional Rs. 30K:- Honda •Civic:Package worth 1.Navigation Panasonic Gift Camera + Bluetooth Voucher Value Addition/Benefits Maruti • Alto K10 Lxi. 3K Cash VW Toyota Mahindra •E20: Get Subsidy and Exemption benefits of Zero VAT.50K + Exchange •Maruti Wagon R Vxi .5Lac •Accord:Benefits upto 2. 25K Music system . Glove box etc . Etios . 5000 Hyundai Tata Chevrolet •Chevy Sail:3 yr Car. 5 Yr Engine warranty •i20:Package •Nano:Rs.25K worth Rs worth Alloy. 15% Subsidy on Basic Price.Types of Sales Promotions Special Gifts/Introductory Offers Maruti •Sx4 Celebration Model .Sony LCD + Rs. Vxi . 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.

20000 off Honda Diwali: 32 Inch LED TV on Brio S Option • City .000 Loyalty Bonus) Mahindra Xylo D series •Ford Classic Free Insurance + (Extended •Mahindra Warranty as Scorpio EX Loyalty Bonus) EMI of only Rs 9.Free Insurance 54.000.CNG: Rs. .999 and Mahindra Verito free insurance of up to Rs 20.000 Xylo E + (Extended series .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 .Types of Sales Promotions Festive Offers Maruti Diwali: WagonR: Upto 45000 off •Alto Petrol.50K Off + Exchange Mahindra Ford Year End Offers: Diwali : Benefits of upto Rs •Ford Figo Petrol . Rs Warranty as 39.

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.Other Promotions Promotion . giving away a suborbital flight simulation experience 'Pods Unite' promotion Space Adventures .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 get’s a complimentary Apple countrywide promotion in May 2005 . iPod.

PLC and Sales Promotion Alto 800 Introduction • Rs. Rs. 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 . 10.000 Cash Discount. 20.000 Exchange Bonus •2 Night.

(Spiffs) •To new dealers •To pick up extra inventory Increasing Dealer’s 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 .Trade Promotion Factory Rebates • Move specific cars.

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 people’s 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%) .

981 71.278 59.Ultimate December Offer Month Nov-12 Dec-11 Offer month Total Sales 62.700 .

Competition HONDA GENERAL MOTORS TATA MOTORS HYUNDAI MARUTI Summer Sale added to competition “3 and Easy”Interest 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 .

Honda. Pickup-Top 5 Key Influence factors • • • • External Technical Cost Service ANOVA analysis • Age. Family income.influencing factors do not differ significantly • Various family sizes . Price. cost Significant difference between the brand of car and the influence of Technical features Successful: Tata(External).influencing External factor significantly different Importance of Brands • • • • Highly significant difference between the brand of cars with respect to external feature.Study on Rural MarketsNamakkal.GM(Cost) . Education. Spare parts. General Motors. Skoda. Fuel Economy. Tamil Nadu What do they seek? • Driving Comfort. Daewoo. Fiat(Technical & Service).Occupation. Honda (Techinical). Maruti( Cost & Service) Unsuccessful: Maruti(External).

Rural Focus-Maruti Methodology •Strong and sound rural marketing strategy • ‘Ghar Ghar Mein Maruti’ and ‘Mera Sapna Meri Maruti’ campaigns • 3. •Various financing option and explained in an interactive TV commercial •Banking facilities are more accessible to villagers with on the spot booking .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.

• Alto clinched 36 percent of rural sales in 2011. Omni hit 13. Tamil Nadu •Granite polishers in Hyderabad •Blue pottery makers in Jaipur •Madhubani painters in Madhubani.Rural Focus-Maruti Targeting •Orange farmers in Nagpur •Turmeric growers in Tiruchengode. 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. These are well settled villagers who have the purchasing power to buy a car for their daily needs .6 percent and the Wagon R accounted for 12 percent rural sales These are not farmers struggling to make a livelihood.

Survey Results Age 20-24 24-28 28-35 35+ Maruti Tata Brand Preference Mahindra Honda Hyundai VW Toyota O 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% Didn’t 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 .

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