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Old 20th November 2014, 19:09   #1
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Default Ridiculous Marketing Gimmicks: X amount / day, zero down, balloon payments etc.

There are multiple "unbelievable" offers that we come across on a daily basis. Many of these can really get under your nerve, for the blatant shameless wrap up they do. Sorry if I'm going a bit overboard on this, since its a strategy followed across industries. I'm myself into global business development, but firmly believe there needs to be some level of integrity when it comes to marketing & advertising. Thanks to embee for initiating the BMW 555 offer thread, and venuvedam for encouraging me to start this. I believe it is our responsibility, as proud bhpians, to rip apart these gimmicks and give the engulfed catch much needed visibility.

Some of the offers below -

1) Own a BMW for INR 555 a day! - Crap. You make a down payment of 8 - 10L and pay 1.5L every 12th month, apart from 555 every day! And talk about tenure - 7 years. All this for the 1-series.

2) Own a Ford Figo in 15 minutes, ZERO down payment - Nothing, but the very old 100% ex-showroom financing from HDFC. Most of the banks do 85% OTR funding, which translates into the same. This is not a zero down payment scheme by any means. And 15 minutes, you kidding me?

3) Skoda is most notorious when it comes to complicating offers. The slew of financing offers on the rapid in the past was just an eyewash. I bet they will be back soon, or are they already?

And many many more around!
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Old 20th November 2014, 19:29   #2
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Default re: Ridiculous Marketing Gimmicks: X amount / day, zero down, balloon payments etc.

I don't understand the purpose of this thread. If you call this gimmick then so is every advertisement out there these days or atleast 99% of them. There are hardly any innovative advertisements these days.

I see no harm in them marketing there product in a way that it looks eye catchy for the customer to pick up the phone and make that call or result in a visit to the showroom. And if you do the maths the offer is not at all bad for the BMW. They are not grossly overcharging. Ofcourse you are yourself to be blamed if you really thought that you can drive a bimmer for Rs. 555 every day and there would be no other hidden cost. In that case you would also believe in all those toothpaste and detergent advertisements.
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Old 20th November 2014, 19:46   #3
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Default re: Ridiculous Marketing Gimmicks: X amount / day, zero down, balloon payments etc.

Quote:
Originally Posted by drmohitg View Post
I don't understand the purpose of this thread. If you call this gimmick then so is every advertisement out there these days or atleast 99% of them. There are hardly any innovative advertisements these days.
The point is not truth in advertising. I have often seen stuff in the papers like "Own an Audi A4 for just 25,000/- a month!!!!" You can bet your bottom rupee there is some major catch to it. Like in the case above, you probably have to make a balloon payment of 3L every year or some such.

In most transactions, especially those involving household finances, I'd rather have a transparent and realistic representation of how the product will actually impact me, rather than some marketing fluff. It has the Cry Wolf effect as well- on occasion a really good finance scheme will be completely ignored just because of some gimmicky advertising you have fallen for previously!
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Old 20th November 2014, 20:04   #4
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Default re: Ridiculous Marketing Gimmicks: X amount / day, zero down, balloon payments etc.

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Originally Posted by drmohitg View Post
I don't understand the purpose of this thread. If you call this gimmick then so is every advertisement out there these days or atleast 99% of them. There are hardly any innovative advertisements these days.
That's exactly what I said. You see these ad's across industries, and they are outright pathetic. We are discussing the automotive sector here, and being a very common trend is absolutely no justification. Rather than just following the herd, and keeping quiet about it accepting normalcy, I think we should react, react upon for misleading a prospect. An online forum is a common arena for individuals to raise opinions, and this is my individual perspective. I hence believe, the purpose of the thread is justified

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Originally Posted by drmohitg View Post
I see no harm in them marketing there product in a way that it looks eye catchy for the customer to pick up the phone and make that call or result in a visit to the showroom. And if you do the maths the offer is not at all bad for the BMW. They are not grossly overcharging. Ofcourse you are yourself to be blamed if you really thought that you can drive a bimmer for Rs. 555 every day and there would be no other hidden cost. In that case you would also believe in all those toothpaste and detergent advertisements.
There is no harm in an offer being eye catchy to the customer, but there is harm in misleading one blatantly! I was obviously not thinking of owning one at 555 a day, but there are many who would think so! And of course, this is not bad at all for BMW! It's way to awesome for them! Integrity is what is lacking, even if you talk about any other advertisement. Is there a harm, attempting to change a rampant practice which to me, is nothing short of atrocious?
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Old 20th November 2014, 20:04   #5
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Default re: Ridiculous Marketing Gimmicks: X amount / day, zero down, balloon payments etc.

"Business Ethics" (perhaps an oxymoron, as late comedian George Carlin called it) is required for a reason: not all people are experienced or knowledgeable or equipped with enough resources to make the optimal decisions all the time and it is perhaps unfair to try to exploit that to your undue advantage.

To give an example, many Americans are burdened with loads of debt and they now wish they did not apply for that credit card or house (or student or car) loan. An example from our own country is the rampant misspelling some years ago of the "life insurance products" called ULIPs.

Of course, regarding marketing gimmicks being discussed in this thread, they appear to be relatively harmless. Yes, they are harmless as long as you don't fall for them.
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Old 20th November 2014, 21:42   #6
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Default re: Ridiculous Marketing Gimmicks: X amount / day, zero down, balloon payments etc.

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Originally Posted by RSM_TorqueZoner View Post
There is no harm in an offer being eye catchy to the customer, but there is harm in misleading one blatantly! I was obviously not thinking of owning one at 555 a day, but there are many who would think so! And of course, this is not bad at all for BMW! It's way to awesome for them! Integrity is what is lacking, even if you talk about any other advertisement. Is there a harm, attempting to change a rampant practice which to me, is nothing short of atrocious?
The point of spending money ( and a lot of money) on advertisements is to create an interest in the public about your product. BMWs and other luxury brands have always been associated with that dream car status for a majority of us. Hence many who can borderline afford it, still stay away from these cars thinking that its not within our grasp yet. What BMW is doing here is luring you to there showroom by a catchy add/tagline. So I feel the advertisement really serves its purpose well. Yes if a customer goes to the dealership or calls them and they hide any facts regarding bullet payment etc etc then we can call it as malpractice or whatever. But until then for me, the company is well within its rights, morally and otherwise, to market the tag line of own a car for Rs. 555.

This topic has been discussed to some length before too.
http://www.team-bhp.com/forum/indian...ime-offer.html (The BMW X1 at Rs.15,999 EMI (limited time offer))

http://www.team-bhp.com/forum/indian...-how-good.html (BMW 320d at Rs 25,333 EMI. How good?)

Last edited by drmohitg : 20th November 2014 at 21:49.
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Old 20th November 2014, 22:07   #7
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Default re: Ridiculous Marketing Gimmicks: X amount / day, zero down, balloon payments etc.

One of the 'best offers' that will fit the topic is the 'Buy a Skoda Rapid, get a Fabia free after 5 years (Buy a Skoda Rapid, Get a Fabia Free (after 5 years)!)'

Fabia is no longer available in India about a year from the offer, with no sign when it will be reintroduced.
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Old 21st November 2014, 00:58   #8
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Originally Posted by narayans80 View Post
Fabia is no longer available in India about a year from the offer, with no sign when it will be reintroduced.
If I remember correctly, there was also a cash back option in the event that Fabia is no longer sold.
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Old 21st November 2014, 08:20   #9
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Default re: Ridiculous Marketing Gimmicks: X amount / day, zero down, balloon payments etc.

I think the purpose of this thread is to help readers see the bigger picture and put things into perspective.

Clearly, most people here are wise enough to know that such schemes generally end up costing more, if not as much. But there's generally always that one poor fellow who got carried away by the advertisement and didn't know any better.

Isn't that why we have so many threads for the benefit of the general public; the PDI thread for instance.

I don't think the OP intended to have this thread so we could point out how stupid those ads are and that we couldn't fall for them. Instead, if we see a potentially sinister scheme, mention it and "decode" it.

How about that.
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Old 21st November 2014, 11:50   #10
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Default re: Ridiculous Marketing Gimmicks: X amount / day, zero down, balloon payments etc.

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Originally Posted by RSM_TorqueZoner View Post
3) Skoda is most notorious when it comes to complicating offers. The slew of financing offers on the rapid in the past was just an eyewash. I bet they will be back soon, or are they already?
Not trying to defend Skoda. But their finance offers are for real. Like when I enquired about some 6-7.xx% finance scheme, I was clearly informed that it was valid only on tenure of 2 years and the proportion of down payment that I would have to make.
I was even given the options of having higher tenure like 4 or 5 years and the interest rate applicable (which was higher than the advertised rate), but still lower than SBI car loan rate.
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Old 22nd November 2014, 15:13   #11
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Default Re: Ridiculous Marketing Gimmicks: X amount / day, zero down, balloon payments etc.

If you can afford a certain make & model, you can. You don't need a useless gimmicky scheme for that.

Most people that buy Mercs & BMWs on these schemes are typically stretching their budget by a mile for the 'badge'. A 7 year loan for what is a depreciating good . Who in the right mind?!

One way or the other, you are going to pay full price for that premium car. If the payments are thinner due to additional EMI years, it's the bank that benefits, not you.

Also, the depreciation is no different. The higher you go, the harder you fall. It's no different for any premium car and one tends to lose a lot of money at the time of resale. Most of the Germans are anyway overpriced thanks to continuous price increases (C-Class for nearly 50 lakhs, who would've thought!).

Also wondering how many times in a 7-year ownership will the 1-Series owner feel that his friend bought a newer, more spacious, more feature-loaded car that is better in almost every way, except for the badge. Yep, I'm talking about the excellent range of machinery in the 15 - 20 lakh range.

For anything other than an asset (i.e. property or even education), I prefer keeping EMIs away, or to the lowest possible level.

Related post from another thread (Vitamin M - What percent of your annual income do you spend on your car?):

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Originally Posted by GTO View Post
I FIRMLY believe that your car /s should NOT take anymore than 10 - 12% of your monthly $$$ (the lesser the better). I know for a fact that there's a lot of BHPians way over this comfortable zone, but most of them are younger / students (pocket money) or are in the initial stages of their career. I hope better sense prevails once they grow a little older and have a higher set of responsibilities on their shoulders. We need to understand that a cars costing is not made up of the EMI alone - a popular way of thinking today- they need to visit our cost of ownership article (ARTICLE: The real cost of car ownership) to clearly understand the financial outflow associated with ownership.

I'd rather drive around in a car thats less expensive, personalize it a li't bit, have money in the bank / savings / investments and sleep with that peace-of-the-mind than drive a more expensive car & worry about the next EMI / other large payments. An example : I know of a certain 36 year old who spends about 1/2 of her income on her flashy new German car. When I bump into her at a social gathering, I see her as more of an outright fool than someone of a certain "status" (which she'd hoped).

Related comment : SAVE atleast 40% of what you make. Life will show you more than a single rainy day. Plus, this way, by the time you are in your mid-forties, you'll have a lot of money working for you (interest, dividends etc.).

Related comment II : If you really want that better car, work harder / smarter!! Trust me, it works.

Last edited by GTO : 22nd November 2014 at 16:15.
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Old 22nd November 2014, 17:28   #12
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Originally Posted by GTO View Post
If you can afford a certain make & model, you can. You don't need a useless gimmicky scheme for that.
And how exactly do you measure that ? There is no thumb rule that one can afford a certain vehicle based on ones monthly income or is there one ? If there, then what about self employed people or ones who have a large part of their compensation skewed to an annual variable pay.

Many of these schemes actually provide buyers the flexibility to pay in options other than just a monthly fixed EMI type of scheme. Obviously the structuring of such schemes would factor a higher interest payout for the flexibility it offers or sometimes such schemes might be offered for sales laggards. Coming to how they are advertised - every marketeer's challenge is to get the maximum attention of his target in the most cost effective manner and that's what these ads do in the same way that fairness cream or anti dandruff shampoos put forth their case. End of the day---- buyers beware, do your analysis and take your pick. Why all the fuss then ?
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Old 23rd November 2014, 01:01   #13
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Good thread.

Many 'Auto Journos' blatantly peddle decisions of financial imprudence. I was browsing through Twitter & found some guy asking the editor of autocar which car he should buy for 8L since he visits India twice in a year for 20days each, and the Journo suggests "Buy Swift, simple and reliable."!!!

IMO this is crazy! renting cars is quite easy in India nowadays. WHY make people suffer depreciation in unnecessarily!

Moreover imagine the PITA this guy will have to ensure its kept safely, and even maintained well, then again ensure its serviced so the warranty doesn't go void.
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Old 23rd November 2014, 18:08   #14
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Default Re: Ridiculous Marketing Gimmicks: X amount / day, zero down, balloon payments etc.

India's ever increasing middle classes are rapidly becoming high appetite consumers. With a myriad schemes and EMI offers etc, no longer does one need to think before jumping into that luxury car purchase or luxury home purchase. Indeed this even applies to purchasing the second car or second home!

All these marketing gimmicks as mentioned in this thread are merely feeding the habit and creating new markets for products and services. It is not a bad thing, provided of course, our government continues to responsibly regulate financial prudence as they currently do.
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Old 24th November 2014, 10:18   #15
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Default Re: Ridiculous Marketing Gimmicks: X amount / day, zero down, balloon payments etc.

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And how exactly do you measure that ? There is no thumb rule that one can afford a certain vehicle based on ones monthly income or is there one ? If there, then what about self employed people or ones who have a large part of their compensation skewed to an annual variable pay.
There are no rules or regulations for this. As GTO mentioned, they are just rules of thumb, nothing more.
Never take into account your variable pay, when you make financial calculations / commitments. A variable pay is exactly that - it varies. You got to be really stupid if you make calculations keeping in mind variable pay, which is never guaranteed.
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