Branding – The Customer’s Perspective

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By Mohit Arora, Executive Director, J.D. Power Asia Pacific

In only a span of 5 years, reputation of a brand has catapulted from being one of the least mentioned reasons to become the top most reason influencing car purchase by car owners. With growing importance on brand influence, it becomes imperative to investigate the effectiveness of auto manufacturers’ brand messages and how they are perceived by their intended audiences.

Our inaugural Brand Influence and Positioning Study (BIPS) sought to measure brand influence on two constructs: whether consumers were aware of the brand and how favorable these brands were perceived.

These two measures have to be concomitant in which one without the other will result in either a negatively popular brand or a gem buried in the ground. Both outcomes are undesirable.

Three interesting findings have emerged from the study. First, Indian consumers prefer advertising that anchors on features and technology rather than vague catchphrases.

Second, Japanese and domestic brands fare better than their global counterparts in creating an image that resonate better with the Indian car buyers.

And finally, brand messaging becomes significantly diluted and undifferentiated in non-metro cities where much work needs to be done to tap the vast potential of new-vehicle sales.

Specificity works best

Marketing gurus thrive on creating catchphrases for advertising. When public air time is short, a catchy tagline is often the preferred method to create a memorable impression.

This is without exception in India but study findings indicate that more often than not, such messages usually hit but miss.

When auto manufacturers launching new car models focus on messages like “Exciting”, “Trendy”, “Elegance” and even “Sexy”, the study findings suggest that these phrases are lost on customers.

When such generic phrases are deployed in a market saturated with similar sounding advertisements, it becomes difficult to distinguish between brands on such dimensions.

Therefore when one considers the ROI of advertising monies, it becomes a murky effort to pin-point what advertisement is productive and

What is wasteful.

Instead, Indian consumers internalize themes that espouse new impressive features or technology-related improvements and innovations which they can easily discern.

And this is one aspect that the Japanese brands are outperforming their American and European counterparts.

Brands such as Honda and Toyota are perceived to be superior in technology and engineering and therefore rank higher in the Brand Image scores.

However, this does not mean that all brands should start portraying themselves as technology leaders.

Domestic brands such as Maruti Suzuki and Tata have gone for the pragmatic route and are positioning themselves as “affordable” and “fuel efficient” which works extremely well in the small car segment where buyers tend to be more financially prudent in their choice of vehicles.

In fact, our Escaped Shopper Study findings show that Maruti Suzuki has been the most considered nameplate among new-vehicle shoppers for ten consecutive years because of its strong brand positioning. Today, 41% of all shoppers eventually purchase one of its models.

By knowing which segments are your biggest buyers and understanding their emotional and behavioral needs, auto makers can optimize their marketing efforts and create much deeper levels of customer engagement.

Targeting the Non-Metro Cities

One of the reasons why many auto brands are cognizant of India’s potential is due to its low vehicle penetration coupled with rising per capita incomes.

This potential increases manifold in the Tier 2 and even Tier 3 cities as India’s urban areas becomes more congested with additional vehicles.

The BIPS finding indicate that when we cascade down to these cities, even established brands suffer sharp declines of awareness.

This behavior is particularly pronounced in the Northern & Eastern regions of India where customers find many global brands to be more or less similar in product offerings and business approach.

There are a greater percentage of respondents in non-metros who say that they are not familiar at all for all makes in the study compared to those respondents living in the cities.

Brands that can gain the early advantage and establish their image successfully will have much to profit from.

The Road Ahead

The India market is evolving from being a sales and incentive led to a marketing-led industry.

This is a sign of the industry maturing so it is essential to establish one’s brand proposition in the minds of the consumers to achieve true long term success and loyalty and to avoid the volatile cyclical nature of the auto industry.

However, it is not the global brand positioning that is relevant but how the brand resonates with the car buyers in India that is key in establishing a strong brand personality.

To become a marketing-led company calls for a sea change of mindset throughout the organization and its retail network and that is when the logo on the vehicle will start to mean a lot more to the customer than just a mere metal sheet.

As the customers become savvier, cars will not just be a means of transportation but be a reflection of their personalities and their aspirations. While these are still early changes, it is likely to accelerate in the coming years.