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Old 2nd February 2015, 15:25   #31
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Default Re: The Curious case of TV Advertising & Car Makers

Originally Posted by smartcat View Post

Some observations:

1) The premium car makers (Audi, BMW, Mercedes, JLR, Volvo) almost never advertise on Television. BMW X1 (with Sachin Tendulkar) was probably an exception.

2) As mentioned before, almost all car makers use TV ads for launching a new product/models. A few examples -

Maruti K10, Wagon R, Swift, DZire, SX4)
Hyundai i10/Grand/Sonata/i20
Toyota Innova, Etios, Liva
Honda Jazz
Tata Vista, Manza, Aria, Storme, Grande
Mahindra XUV500, Scorpio, Quanto
Renault Duster
Nissan Evalia, Sunny
Chevrolet Cruze, Sail/UVA
Ford Figo, Fiesta
Fiat Palio (with Sachin), Punto (with Yuvraj), Linea

3) And then, they go off the airwaves after a couple of months.

4) It's quite obvious that a large number of car models have never been advertised on TV (but we see their ads in other medium). If cars like Chevrolet Captiva are advertised continuously, they could do a lot better - because the segment (premium SUV) is doing well. As they say - Out of Sight Is Out Of Mind.

5) If Mahindra wants to increase the sales of Xylo and if Tata wants to increase the sales of Aria 2WD, it helps a lot to target the audience via a mass medium like TV. But first, Mahindra needs to stop comparing the Xylo with sedan and Tata needs to stop comparing Aria with a SUV. Call it what it is first - a MUV! A competitor to segment leaders Ertiga & Innova.

6) Maruti is perhaps the only car company that keeps advertising their products like soaps & detergents. They still advertise Swift & Dzire even though they were launched a couple of years back and are best sellers. Perhaps this is the secret of their success?

An important lesson that other car makers still need to learn perhaps?
With that segment of premium cars, Audi, BMW, JLR, Merc et al will have to target a particular set of customers which normally have very less "time spent" on tv. Most of these guys, atleast a large share, are found staring at Economic Times, Financial Times, Jet Airways inflight magazines (and likes) and now increasingly online and mobile screens. Makes more sense to target them through experiential and digital means. That said, Brand Managers will have to do their basic need advertising on CNBC TV18, Bloomberg etc.

Originally Posted by aniketi View Post
One different point from my side.

Advertising on television is not cheap. It costs very high. Specially if you want to do it in the prime time on premium channels. Already manufacturers are on cutting costs due to stiff competition. If you look at the margins for normal car manufacturer like Maruti, Hyundai, Honda, Tata, Mahindra etc. its not even 10 %. Its generally in the range of 5-7%. Some are doing even losses like Chevy, Ford (not sure), currently Tata. So doing heavy ads on TV is tough for them. Whereas if you see other products like soap, toothpaste, shampoo etc, their margins are very high. Without ads they can't survive in the market. Doing Ads is their necessity. Without ads they will soon die in the market IMO.
Again, advertising has to keep in mind 3 basic objectives 1) Targeting right customers/consumers wherever they are 2) Communication and 3) improve awareness/trials/leads/conversions/consumption/purchase as the need be.

By the way, here is an industry report that talks about increasing advertising spends by Automobile sector on TV : http://www.exchange4media.com/57173_...big-on-tv.html A bit dated report though, but the point I'm trying to make here is that stiff competition tends to increase spends on advertising rather than reducing. As someone wise has rightly said "The worst possible spends cut an ailing company can have is on its marketing - Its going to work absolutely against the intentions"

Notwithstanding all this, the advertising paradigm is now fast evolving more than ever. More focus and energies are spent on Digital/Online and social space. Take a look at this wonderful case study of Audi R8 launch:

And this Twingo launch by Renault:

Expect more and more of such breakthroughs here given that more than 405mn people in India will be online by end of H1 2015. That translates to about 40% of the total population and chunk of it will be very relevant for the Automobile industry.

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