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One of the chapters in the second case-book of Brand Building Advertising by M. G. Parameswaran and Kinjal Medh (www.tatamcgrawhill.com) takes up the question whether promotions sway brand choice in car purchases.
The authors begin by tracing the history that cars have always been advertised largely on lifestyle benefits and aspirations, and yet promotions have been used aggressively in car marketing during the last decade. They note that the offers provided by dealers and car marketers comprise price discounts and gifts such as gold coins, diamond rings, free accessories, and gift vouchers. “For example, Maruti Suzuki had announced a price discount along with a gold coin for their slower moving model Versa, while Sai Service, who is their dealer in Mumbai, added free accessories like leather steering cover, three additional free services and free registration of the vehicle.”
Based on surveys of buyers and interviews with car dealers in Ahmedabad and Mumbai, the authors find that the car buying process is an involved one; and that the multiple criteria in choosing one brand over others are the uniqueness and the looks of the car, features and technology, luxury and comforts, brand imagery and social acceptability, budgetary considerations and cost of operations, and promotional offers.
Four more places – Delhi, Jaipur, Chennai and Kochi – were included for a detailed qualitative research that followed (2003-2004). More than 200 respondents ranked the relative importance of the criteria, and these people were either owners or intending buyers of the following cars, classified into four segments: A (Maruti 800); B (Santro, Indica, Zen, Palio, and Wagon R); C (Indigo, Esteem, Honda City, Ikon, and Accent); and D (Sonata, Lancer, and Accord).”
Decoding ABCD
Of value is the ‘interpretations and findings' section of the chapter, where the authors observe that the A and B segment car buyers use simple criteria primarily based on budgets and cost of operation, whereas the C segment car buyers come across as the most complex buyers using multiple criteria ranging from technology, features, uniqueness and luxury, to fuel economy. And the buyers of D segment cars also use simple criteria based on features, luxury, and technology.
However, promotions do not feature as an important criterion in choosing a brand over another in any of the segments and are the least important criterion, report the authors. Promotions adversely affect the brand image for D segment buyers, be they in metros and non-metros. And the message that the C segment buyers get from promos is that the brand is open for further negotiation.
The complex C
In the authors' reckoning, one explanation of this attitude could be that a C segment buyer is stretching his limits to move into a higher segment and therefore wants to minimise his financial outlay and strive to fulfil his aspirations. For instance, “Buyers from smaller towns strongly feel that the rate of interest can always be negotiated on a car purchase once you have finalised a brand. This attitude is more prevalent in C segment buyers as compared to A and B segment buyers in these towns.”
A book that can add depth to marketers' efforts.
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