Indian used-car industry - Challenges and Opportunities

Used-car industry has flourished in India in past few years in an extraordinary way. This sister-industry of the new-car industry has came a long way from selling a few thousand cars every year to the current situation when it is selling cars almost one and a half times more than that of the new car industry.

Both these industries have grown leaps and bounds in the past years with the core reasons being multi-faceted. Right economic environment has enabled a large chunk to earn more, consume more and hence, spend more. Specific to the used-car segment, the growth has been contributed by the rising urban population, a large part of which is the young and ambitious workforce. A change in lifestyle in tier-II and tier-III cities have played its part too in taking the once a luxury, four-wheeler, to great stretch.

Apart from the factors from the consumer side, the industry has greatly benefited by the regulations and policy support from the government in last few years. The Industry has responded as enthusiastically as the consumers have by bringing a flood of new cars models spoiling its customers for choice.

The advent of foreign car makers not just raised the bar for the competition but also bestowed the population with cars which they had longed to own for long time. Not to mention, the technology and wealth they brought to India in terms of knowledge and assets.

However, last few months have not been great for the new-car industry. Fortunately, the same is not true about the used-car industry.While the new car market showed negative growth in the past few months, used-car market has been growing at a pace of 22% year by year. The current Indian used-cars market is pegged at around 2.5 million units a year. The Industry is said to be worth around Rs 52,000 crores. (Source: Crisil’s report on used car industry)

The used car market has always been dominated by traditional unorganized players in India. However, this changed a few years ago when Maruti True Value, Mahindra First Choice Wheels ltd etc set up their shops to sell used-cars in India.In few years organized sector has grabbed almost one-sixth of the market and the expansion plans make us believe that this is only going to rise further. Organized players have given a much needed stability to the used-industry and hence their entry is a welcome sign for the industry as well as for the customer.

Organized players have access to funds, technology, processes and man power to ensure that they are on track with their plans and hence there are more reasons to believe the crisil report which suggested that a quarter of the market will be under the organized sector in a couple of years from now.While the entry of OEMs like Maruti, Tata, Mahindra and Hyundai which have always been offering value for money products was a pleasant surprise, the debut from luxury car makers like BMW, Mercedes-Benz and Audi into this segment is really exciting. This will do many things in the market. It will start a culture where buying a used-car will no longer be looked down upon. Imagine someone buying a Mercedes which is pre-owned, it still is a Merc! The culture is very dominant in US where the ratio of old to new cars sold every year is as high as 3:1 while it is almost half in India at around 1.5:1.

Apart from the OEMs, entry of ventures like car nation and online format like cartrade, gaadi etc are also making the stage competitive making customer, the highest beneficiary.However, a lot needs to be done yet. The segment, especially in the organized format is especially nascent. This is clear from the steps car nation, which is promoted and run by Ex-Maruti MD Jagdish Khattar, has taken in the last few years. From a multi brand used-car retail outlet to service stations to financing, to accessorizing shop and what not. It is easy to recognize that there is a big gap between the services supplied by the existing players 

and consumer demand and hence after every step there is an opportunity that should be tapped.

Various challenges are there for the industry which needs to be faced in the coming years. The challenges are both, different as well as similar for the organized and unorganized format players. For example, the organized players have to break the market to take position which will make their presence worthwhile. The price point difference in an extremely price sensitive business like this is another threat to the organized used-car segment. However, credibility and trust due to the brand associated as well as the professionalism which they employ in their operations are most important strengths of these players.

On the other hand while the unorganized players mostly work in the personal relationship domain, they have challenges like diluting trust and hard-hit credibility and hence more professional and transparent approach is the way forward for this segment. However, due to tight focus on the costs these players are always able to make the price difference subtle for the customers. But going forward, this may not be the best strategy considering the changing customer lifestyle, attitudes and perceptions about used-car purchase.

Cheers,

Campaigns with plus-size models - Marketing gimmick or mind-set shift?

H&M's Beachwear Homepage with Jennie Runk

A recent campaign by Swedish retailer H&M became centre of attraction for fashion industry as well as consumers alike. It was for the first time that the retailer chose to represent its collection of Beachwear through Jennie Runk. There were two peculiarities in this campaign – Jennie Runk is a plus-size model and; the section is not called “Plus-size Beachwear” but only “Beachwear”, a brave digression from all such previous attempts by any other organization.

This can be a small aberration for some while for others it can be seen as a much needed refreshing change in the modelling industry where starved and wafer-thin models have managed to achieve prominence  over natural and original models with fuller and normal figures, which the industry choose to call plus-size models. Let me reiterate though, that being thin is not bad but what these models have to go through to be thin and what they end up representing by being size 0 or 00 is dangerous for themselves and for the ones who end up idolizing them.

Ralph Lauren campaign featuring Robyn Lawley

A lot of people dubbed the H&M’s move refreshing by calling it a welcome change in industry while many doubted its inherent motive as being purely a marketing tactic, not for the beachwear promotion but to come out as an ethical and moral brand, promoting what is right for the society and its consumers.

The campaign for H&M featuring plus-size model was definitely not the first time such a theme was promoted.  Ralph Lauren chose Australian model Robyn Lawley as its first ever plus-size model, but there was a difference between the two campaigns. Unlike Ralph Lauren, which went all-out announcing its “ethical” move to appoint a plus-size model to show case Ralph Lauren apparels, H&M went quiet and even refrained from mentioning the model as a plus-size model or the beachwear as plus-size beachwear. But not to forget, the same retailer came under scrutiny for its campaign where they used virtually designed body-parts and added real women’s heads to the ads to showcase its apparel line. Not so moral there!

Elle coverpage featuring plus-size model

A plus-size model leading the pack at  a runway for Mark Fest

Another welcome move came recently when three models were banned from a fashion show in Spain for being "too thin". The show in Cibeles bans models with a Body Mass index of less than 18, suggesting anything below this is an unhealthy vision to set upon young teenage girls. Vogue, first time ever in 2011had plus-sized models on its cover page while Elle, very recently in May,2013 adorned its cover page with a plus size model.

So can we assume that the plus-size modelling has arrived at the centre-stage of big brands and the above milestones represents a generic shift in the mindset of fashion and modelling industry alike? Unfortunately, No.

H&M's head-off campaign that was condemned for its 'fake' nature

A detailed observation into these milestones will suggest that more often than not these events were marketing tactics and by no means suggested an overall change in the outlook of the industry.

The H&M campaign was more of a damage control exercise for its head-off campaign disaster. The navigation through the beachwear finally leads the user to plus-size section(!). Finally, the page was taken off after few days from its website, when enough buzz was generated for the campaign. No points of guessing, the inherent motive was not to 

be all moral and put across a message, it was to be heard, known and talked about.

Vogue coverpage with three plus-size models

The vogue and elle magazines attached a slight amount of pun to the cover pages with plus-size models with taglines like “Thigs is the limit”, "booty-ful" models with "full-siz
e fannies” etc. These taglines then made rounds with further jokes and puns on the models, though earned great amount of spotlight for the magazines which was evident from the number of copies sold and inquiries, feedbacks and comments received.

Inspite of all the noise made by industry stalwarts about bringing in more original and natural models, models being fired for gaining weight is a regular phenomena and not much is being done by any party to ensure that the so called mind-set shift is actually implemented. Hence, the whole out-cry for change lacks moral intent and appears to be more of propaganda by the industry to gain mass-acceptance among society and its consumers for being a responsible industry.

Despite the public opinion condemning the use of "size 0" models, fashion gurus still give the girls the go ahead to walk at their shows. Guidelines set down last year advise the industry to go against using mega-thin girls. They claim that the brands are supposed to create an aspirational value for themselves and must also be able to suggest to consumers a better version of himself/herself when he/she acquire these brands.

There is another interesting aspect to the story. In March when H&M started to use size 12 mannequins in its store there were some critics which complained that such a move is promoting obesity among people.

With the arguments placed by the industry in favour and against of plus-size models at different occasions and sometimes by actions, it is clear that at the end of the day it’s the consumer which over-rides the decisions like these. Acceptance of the plus-size models and abandoning those who themselves undergo a torturous process and propagates the false imagination of “a perfect woman” through size 0 among consumers should be the first step in the direction.

As a new British study suggests that the cultural obsession with slim female figures could be overturned if advertising flaunted fuller-sized models, which in-turn are accepted and appreciated by the consumers. Industry must also rise above the petty marketing gimmicks to gain points for the campaign and instead place their belief in such ideology which is not just ‘right’ but also financially rewarding for them.

 Cheers,

Doing it Right - Dove Real Beauty Campaign

The very recent Dove Real Beauty Sketches have brought back the focus on the successful use of cause-related marketing employed by Dove in past. This post concentrates upon the marketing strategy with respect to the brand building exercise which Dove has undertaken in the past few years, while leaving out discussion on the ethical entangles due to brand building philosophy of another peer brand (Axe) under the HUL’s house of brands for another post, another day.

 Dove’s vision statement– ‘Imagine a world where beauty is a source of confidence, not anxiety’, very subtly defines the brand essence which is to make beauty a strength for women rather than a source of anxiety and discomfort.

The brand building for Dove has shaped into a unique way of cause-related marketing technique. Though like a typical cause-related marketing campaign, the campaign started in collaboration with a non-profit party (Girls Scout in US in 2002) for a social cause, the campaign has gone past to be a global one attempting to brew self-esteem and confidence among women of all ages about the way they look. The basic theme of all the campaigns is to be natural in the way one looks and be confident about it. The campaign tries to break myths of stereotypical beauty which are created to instil insecurities among women about the way they look thereby promoting products and services to achieve that desired form of beauty.

The brand building for Dove has always been around the concept of real beauty and how it must be preserved. This, in turn emphasize and restore the brand promise of nurturing and nourishing the natural beauty and not trying to manipulate it. By reinforcing the significance of originality and individuality in beauty, the brand successfully presents itself as an avant-garde to offer the core and augmented benefits which are desired to achieve the aforesaid.

The brand achieves this by breaking the traditionally created stereotypes of beauty and beautiful women. It involves women of all ages, colours, ethnicity and body-types in its campaign making the campaign as inclusive as possible. The campaign propagates the emotional aspect of how important it is to be oneself while believing, that they are beautiful in the way they are.

The most interesting and intelligent part of the cause-related marketing done by Dove is the cause picked up. Most of the times, companies and brands fail to choose the cause which aids them in propagating the brand’s vision and promise to the audience while it piggy-rides on the cause itself. These brands and companies though may get attention due to the noble cause they are associated with, but it does not help the brand to reinforce its brand proposition since the audience and TG fail to connect the cause with the product/brand. This leads to a loss of a significant brand building opportunity.

Dove picked up the concept of natural beauty to build its cause-related marketing campaign. By presenting its resolve to enhance self-esteem among women of all ages and make them feel comfortable in their own skin, it has ensured that there is a huge customer base which is not only loyal to the brand but also loyal to what the brand stands for – self esteem and confidence in being what you naturally are.

Some of the interesting campaigns which Dove has launched are as follows. Click on the link to watch videos –

Evolution

Dove shows how entertainment industry creates a stereotypical image of beauty by thousands of manipulations. It creates how such beauty benchmarks create pressure upon women to adopt ways in order to look beautiful in the way these companies projects beauty to be.

Beauty Pressure

This was a widely-appreciated ad which shows how girls at an age of as early as 8 can fall prey to aggressive marketing by companies whose only objective is to create high-standards for beauty and then offering product and services to women in order to meet those standards. The ad clearly warns the mothers to talk to their daughters before these companies do.

The latest campaign launched by Dove in this regard is the Dove Real Beauty Sketches. Dove with its research claims that only 4% of women consider themselves beautiful. In order to break this self-assumed myth, Dove conducted an experiment to prove to women that – “You are more beautiful than you think”.

Watch the ad-video here. Dove Real Beauty Sketeches

Hence, the overall brand building strategies that Dove adopted over the years has proved to be of benefit not only to the brand but also to the cause. This was due to multiple reasons like right selection of the cause for building campaign, consistent brand promise, high level of inclusion and most importantly a product range that lends to the credibility of the brand proposition.

Cheers,

How advertiser funded films are going to change the marketing spectrum in India?

Branding and entertainment have traditionally been woven together by a simpler concept of product placement where a product is placed on the screen making it a part of the set-up in order to strike the audience with the brand and its usage by the movie/ programme’s characters.

A few years back when Adidas decided to finance the ‘Goal’ movie trilogy with about $100 million investment, it was more than just a product placement. The financial risk was high due to the huge investment while it also gave Adidas the freedom to try and convey its message and brand personality to its audience in more number of ways than what a product placement would have offered.

Such productions where the whole programme or a movie is financed by a brand or a company whose primary objective is to put across its brand communication to its audience in a way which is more entertaining and assertive than the traditional advertising are known as advertiser funded programmes (AFP) and advertiser funded films (AFF). Some people also choose to call this practice Brand entertainment since a brand wrapped in a programme or film entertains the audience.It essentially is a step further by marketers from the product placement concept in the entertainment domain for communicating with its customers.

Simply put, AFFs and AFPs are content that allows brands to forge a deeper relationship with production houses via a funding model either in full or in part. Once executed, the advertiser’s investment is employed into producing the content while the advertiser earns a great degree of ownership over the content as well as its use as a wider communication platform for its brand/product/message.

Watch a short video by Schuyler Moore on how AFFs can be the future of marketing. Click here

Outside India, AFPs and AFFs have been regularly used as marketing and communication tools. The term soap opera was so called because the original soap operas were funded and produced by soap companies such as P&G. Some of the recent examples are short films by BMW, Castrol edge, TBA by Vodafone etc. P&G and Walmart have already announced their interest and entry into this newer advertising platform.

Click the below links to watch the video clips.

BMW funded short film - Hire

Castrol funded documentary film on Cristiano Ronalo

AFPs have been common in Indian marketing context as well, though AFF is a newer concept for India. Some of the examples of AFPs in India are - Cadbury Bournvita Confidence Champion, IDBIs Sawaal India ka, L’Oreal Elite Model Look ’06 etc, MTV Panasonic face of beauty (Watch video clip) etc.

Read more on IDBIs Sawaal India ka

AFFs prospects doesn’t look bleak either with the numero uno car company of India, Maruti Suzuki having tested the AFF waters very recently by partly funding the bollywood release “Mere Dad ki Maruti” produced by Y-Films, a subsidiary of Yash Raj Films. The producers wanted to make an advertising funded movie and with the of the movie based on family car, they pitches it to multiple auto companies in the country and Maruti turned out to be the most favoured partner with highest bid. 

Maruti Suzuki invested around Rs 6 crores in the movie which had a total budget of Rs 10 crores. As for the returns for the auto major, the movie has already earned more than Rs 8 crore and apart from having its brand name in the film title, it also managed to hog the spotlight throughout the two hours as Maruti is the main protagonist of the film. From Maruti 800 to the Swift and finally the Ertiga, the story weaves in both loyalty and aspiration towards the brand. A common feedback from the movie audience was that the movie was a fun-filled 2 hour Maruti advertisement.

 Marketers’ biggest challenge these days is to secure brand-space in their customers’ minds and with customers trying harder than ever to keep traditional advertising away, the challenge has only become more daunting. Hence, newer platforms for communication must be continuously looked upon. Advertiser funded programmes (AFP) and advertiser funded films (AFF) are such innovative planks to base marketing communications on.

AFPs and AFFs can be the new flag-bearers for Indian marketing rumble but how quickly and in what spectrum they evolve, it is yet to be seen.

Cheers,

Public Service Announcements - Effective or just good to watch?

A PSA generally is a message to inform the public on issues that are considered to be in the general best interests of the community at large. These are aimed at altering public attitudes by raising consciousness about particular issues and are usually created with collaboration between private and public entities. These may be created to reflect a social message or humanitarian notion.

An interesting PSA or Public service announcement/advertisement/campaign as many call it, got my attention last week. This campaign in particular tries to address the much talked about issue in the current times, women safety. The recent unfortunate events shook the confidence of citizen in a number of agencies. Law enforcement agency has always been at the receiving end for being perceived to be callous and even inefficient at times. In order to make an attempt to restore the confidence of people into its functioning and to assure them of their help and support, Mumbai police, along with Ogilvy Mumbai came up with a PSA.

The campaign used real police men and women to convey a sincere message to its audience which translates to – “we will teach Mumbai how to respect its women.”It is a five-film campaign, each film focus on one issue related to harassment and abuse of women. All the ad-films encourage women to report any incident, big or small to police without the fear of being harassed at police stations. The campaign has been conceived and executed by Ogilvy Mumbai with the help of Mumbai police.

You can watch a couple of films from the campaign here.

Mumbai Police and Ogilvy Mumbai 1

Mumbai Police and Ogilvy Mumbai 2

The trend for public service advertisements and campaign is not new in India. Some of the most famous PSA campaigns India has ever seen are Pulse Polio mission, HIV AIDS Awareness campaigns and Balbir Pasha. These were created to raise awareness for social and health issues like AIDS and Polio.

Balbir Pasha Teaser Ad

Balbir Pasha Ad-Film 1

A recent trend that has emerged in this front is surge of businesses trying to link their brand or brand image to a social cause and hence putting their eggs in PSA basket not just as a measure of business communication but to reiterate their support to address certain social or humanitarian causes.

Tata Tea’s “Jago re” campaign, Times of India’s Teach India campaign” and Aircel’s “Save our Tiger” campaign are such examples which have tried to address issues related to governance, corruption, education and declining tiger population in the country.

However, the biggest question which everyone is asking is – How effective are these campaigns?

The answer isn’t as simple as it may appear.

On the face of it, the PSAs are definitely catchy due to their creative prowess. However, the problem lies in the fact that these ads are usually made to win awards for agencies (the ones which are on social issues without a business house backing) and unfortunately that’s the only logical consummation their creators are looking for with these creative ads. Very rarely we would see a ground work and follow-up activities being done to make these campaigns effective and be sincere to the cause. Quite the same applies to the PSAs created for businesses, as seldom are business houses serious about the efficacy and change that these campaigns can bring about. All these ads are supposed to do is to grab eye-balls and create a recall with the associated brand.  

CSR is another major reason why we find many businesses jumping on the PSA band-wagon. Corporates are required to show a small percentage of their income being spent on good for society and this seems to be an interesting avenue to show the concern and seriousness of the organization for a particular cause, achieve a certain degree of brand recall and respect in the eyes of audience and also manage the regulations and policy requirements.

How these ads can be more effective in achieving ground results, it is yet to be seen but unless there is a change in how ad agencies, government, NGOs and business houses look at PSAs as the vehicle of social messages, PSAs may continue to be marred by “what a beautiful ad!” syndrome without actually doing what it must do.

Cheers,

The Satyamev Jayate Way - Chot Dil Par Lagegi Tabhi Baat Banegi

A Moving Ad that questions the society of its guilt-free attitude while sitting on a pile of flesh-trade of its own. The poster conceives an idea and expresses it in a strong message pin pointing at the 'root-cause of flesh-trade which, unfortunately is flourishing like none.

Prajwala is an anti-trafficking organization based in Hyderabad, India.With a touching story of its genesis and inveterate efforts made to attempt what many dismiss as in-achievable and hence untrod. Hats off to the people who are making it possible.

The print ad made for Prajwala does two things distinctly. The first is "obvious" - It educates the prospective victims who fall for false promises, assurances and lies before finding themselves into this abyss that what part of bargain will they be entitled to. Humiliation, Pain and Trauma. It also tries to educate and hence shock the existing and prospective 'buyers' with the guilt of pushing a fellow-being into this dark hole.

 How successful they have been in this attempt, it is not a question to debate but to introspect, as individuals as well as a ‘civilized’ society. This must atleast make people try to spread awareness of one of the biggest shame of the society these days, where a fellow being is pushed to a point where she gives in for an act knowing what she is getting into. The idea is not to show women in bad light of weak and ignorant as many might argue but to shake-off the comfortable lack of conscience of the muted un-compassionate bunch (called society)

The end-text of the print ad leads to an "inferential" conclusion that the prostitution only exists till the buyers do. This further puts the onus on people for allowing such a shameful practice not just to continue but to also flourish. Prostitution breeds on vulnerable and marginalized sections of society and hence, an illusion of a day when no woman will be pushed into flesh-trade is as imaginative as it could get.The message hence, rightfully so puts the real culprit in the dock- the society which guarantees that this tragic experience of hundreds of thousands of women will continue till it itself decides to put an end to it.

You can check Prajwala'a website for the terrific work they are doing - http://www.prajwalaindia.com/genesis.html

Want to open a joint account like the Gandhi couple?

I came across an interesting ad that was created by Mudra communications for Union bank of India a couple of years ago. The ad shows Kasturba Gandhi's image next to Mahatma Gandhi's picture on a 100 Rs note. The ad ofcourse can irk a few who might find the use of Mahatma Gandhi and his wife's images and a photo-shopped currency note unacceptable to accomplish a commercial objective.

Nevertheless, the ad does the job brilliantly.

• The ad builds an imaginary story for the promotional piece. It subtly shows arguably the most revered couple of the country on a currency note which for sure catches the eye-balls due to its peculiarity.

• It also does well to piggyback its message on a light humor.

• It also educates the prospective customers on the idea of a husband and wife sharing a joint account, hence accentuating the service penetration by educating the customer of potential use of this service

• It may also lead to give an emotional platform for a couple to share something as confidential as a bank account

• Another aspect that is worth a mention is that the ad does not rely on any functional attribute of the service(joint account in this case) since it is not trying to build the category(which it assumes is already known to its prospective customers)

• It was especially interesting to see the ad 'pick' someone as venerable as Mahatma Gandhi as the brand's "virtual-celebrity endorser". Some might find it strange but what the ad has been able to do is - use a trusted prop(a currency note), trusted virtual-brand ambassadors' pictures together(Mahatma Gandhi and Kasturba Gandhi) and put across the message in a very simple and plain tone. (No mention of the message anywhere except in the corner along with the Union Bank logo)

It is worthwhile to mention that such an ad coming out from a public sector bank with Indian government having a majority stake in it, is especially perplexing.

Cheers,

Cheers