Following the rollout of GST, one of India’s oldest home-grown companies, Tata Motors claims to have passed on all the resultant benefits to customers.
Following the rollout of GST, one of India’s oldest home-grown companies, Tata Motors claims to have passed on all the resultant benefits to customers. Looking to up its market share, the company wants to enhance the car buying process for its customers. In an interaction with BrandWagon’s Meghna Sharma, Vivek Srivatsa of Tata Motors reveals how experiential marketing is the key driver of its growth plans. Edited excerpts:
The growth in FY17 was highly encouraging with the passenger vehicles segment growing by 44.3% y-o-y. Tata Motors aims to become the number three player in the Indian market by 2018. What steps are being taken to achieve this?
To be the number three player, we need to win on many fronts. Traditionally, the known front is the product. But what’s also important is the retail experience the customer gets. And in our industry, after-sales period or the ownership life cycle is very important. Firstly, we are working on our products; in the last one year, we have launched three products — Tiago, Hexa and Tigor. We have made more desirable products which are attracting the youth with more disposable income because they want exciting cars.
We are also working a lot on the retail experience. We have gone up to 600 sales outlets across the country. After-sales experience is a priority for us and we have moved up to the number two slot on the customer care satisfaction index (CSI). Lastly, we are working on our digital platforms. Today, more than 85% of customers begin their car search online. So if you see our websites, we have made very modern websites for Hexa and Tigor. We are working on our digital retail experience as well.
Over the years, how has the process of car buying evolved?
Like I said, today more than 85% of the customers start with product searches online where they compare variants within a brand, check out competitors, do a price analysis, etc. For Hexa, we have an app which can provide a virtual test drive. We try and replicate most of the showroom experience online and customers are lapping it up. We have more than 40,000 downloads of the Hexa app. And when the customer comes to the showroom, s/he already knows everything about the car. It is only the touch and feel which happens in showrooms now. We have to be ready for this change. The better we make the experience online for the customer, the better for us.
What is the company’s digital strategy going forward? How much does it plan to invest in it?
The spend changes with the product. For instance, on Hexa we spend a lot more than others because its customer is slightly high profile. For Hexa, we have spent 14% of our ad budgets on experiential. For Tiago, we have invested in online booking. So depending on the customer profile, we change the percentage of the spend. We no longer think of digital as a separate bracket. Digital is currently approximately 10-12% of our overall spends. We want offline and online integrated to help in the customer journey of car buying and owning.
Which other platforms/mediums does Tata Motors invest in?
Print and TV happen to be the main areas of spend. But with Tata Motors, we are looking at experiential. We want more people to touch and feel our cars. We feel that once a customer drives them, chances of her opting for it are much higher. Experiential marketing is about giving a customer different experiences in driving a car and not just a test drive around the block. We did that to great effect at Hexa experience centres.
For passenger vehicles, which is the topmost market for you? How do you define your TG now?
We are gaining customer share across the country; we ended last year at 5.1% market share. The big change which is happening is that earlier a large portion of sales came from the commercial segment but today, we are seeing close to 75% of sales coming from the personal category, which is the area we want to grow in.
As for the customer, it is fashionable to say the young generation. But I would like to say that we want to attract, because I don’t think we have managed to attract, a customer who is progressive, young in her mindset, adventurous and who admires good design but at the same time wants good value. So, Tata Motors stands for great design with great value. This is the direction we want to take.
With Lionel Messi as global ambassador, how do you see him helping sales in India? Do you plan to add another local face?
Messi has done well for us. A brand ambassador gives a sudden spurt of awareness. Tiago has been a success; for the last 15 months it has been selling very well. I cannot comment on future brand ambassador programmes, but our choice of ambassador has done well for us. For a local face, we will have to see because we cannot just take anyone who is popular — it has to align with the product.
First the Zica crisis, and then a 21-month jail term for Lionel Messi by a Spanish court for tax evasion . What do you have to say about handling such crises?
With Zica, the team did more than a fantastic job. They converted the crisis into an opportunity. Probably, Zica wouldn’t have been as well known as Tiago if not for the events. The lesson for us is that it is a crisis as long as you don’t manage it. And Zica to Tiago is a great example of managing it; and that’s the approach we will take always.
Lastly, what are the challenges that the automobile category is facing?
The automobile category is never short of challenges, the latest being GST. The petrol-diesel mix was always a challenge; India is one of the toughest markets across the world for auto. For every Rs 5,000-10,000, you have a competitor; so there is no shortage of challenges. As for competition, we do not want to focus on any one of them.
The clear strengths of Tata Motors are design and providing good value; the secondary strength is providing a good customer experience both at the point of sale and after-sales. We will stick to this. And we would like to focus on what we do/can do rather than on others.