- The pandemic has transformed the
marketing playbook as brands are having to rethink their strategies to pivot to stay relevant in this new world order. - We speak to
Shashank Srivastava , Senior Executive Director, Marketing and Sales,Maruti Suzuki who walks us through the brand's experience through the last two challenging year. He tells us about the brand's marketing strategy and the key areas of focus going ahead.
The lockdown impacted the industry. It resulted in the shutdown of production at
However, what this led to was a pent-up demand for vehicles in the country. In fact, with the pandemic, people wanted to own their own vehicles to travel safely leading to a healthy bounce back on the demand side. The global shortage for semiconductor still remains and with Covid numbers rising again, most analysts are cautiously optimistic about 2022.
To understand how things have been for Maruti Suzuki since the pandemic, and what the year ahead holds for the brand as well as the
Excerpts:
Q) The world has been going through some challenging times in the past 2 years. How has Maruti Suzuki fared in these unprecedented times?
If you take a quick look back at the Indian auto industry, we saw a peak in terms of sales in 2018-19 when we had around 3.7 million sales. In 2019, the BS4 to BS6 transition led to a slowdown for the Indian auto industry. In fact, the industry came down about 18% in 2019-20. At the start of FY20-21, there was a lot of hope that it will be a better year. Unfortunately, the year started with a lockdown. In fact, the sale in April, for the first time ever, was zero. That quarter, the industry was down by 80%. But from there, we suddenly saw a bounce back. We also saw a huge shift towards digitization and a lot of consumers started using that for the sales process. The year ended well. In fact, our highest monthly sales happened in October. Then, we were hit by the second wave in 2021 and this time the virus also affected the rural areas. However, towards the second half of CY 21, ie July onward, we had the semiconductor shortage. Despite the twin challenges of the pandemic and the semiconductor shortage, the industry ended the year with 3.1 million car sales. And the 3 million mark has only been breached twice before this, in 2017 and 2018. So going ahead, we are optimistic about the demand. Of course we are being cautious in our optimism because perhaps we have the third wave coming. However, the industry has learnt to cope better and therefore we are much more optimistic about 2022.
Q) In the past two years, there have been massive changes in consumer behavior. How did you have to pivot your marketing to be relevant in these challenging times?
There have indeed been some big changes in the consumer behavior. Firstly, people are moving towards personal mobility from public transport, thereby fueling the demand for the industry. Secondly, many people are buying cars, more for the sake of practicality than for their aspirations. This has resulted in an increase in first-time buyers. Also, due to loss in income and business, we have witnessed a telescoping of demand. People from a higher variant are moving to a lower variant which has also led to a huge demand for used cars. Meanwhile, theprocess of buying has also altered and consumers have become digital savvy. Digital inquiries have increased from 15% to close to 40% now. In terms of communicating with our consumers, we have observed that trust has become an important factor for brands now. Trust is the new currency of brand recognition. And that’s what we have tried to do. During the lockdown, it wasn’t about selling but we would put out messages to spread social awareness, regarding environment, sustainability or our CSR activities. And during adverse times, people tend to move towards a brand which is more reliable and trustworthy and that is an advantage we had. We also saw people’s media habits change. There was an obvious shift towards digital and on TV, GECs and News did really well. So those were the mediums we really used and it has given us good results.
Q) What is your media mix? Has your digital spend come very close to your TV spends?
Our digital spends have gone up and are now close to 27% of our overall spends, and we spend roughly 31% on TV. And the general projection is that our digital spend will exceed our TV spends in a couple of years. And this year, our media spends will be much higher than 2021. Since in 2022, we are planning many new launches, our spends around launches will go up. There will be an increase in tactical spends this year too.
Q) Buying a car is a very touch-and-feel experience. People want to visit a showroom, see the car, test drive it before making the final decision. From that perspective, how challenging have things been, since we are again staring at a possible third wave.
Our research on the consumer buying process has revealed that from the time a customer thinks of buying a car till the time he actually buys it, there are 26 checkpoints. Out of those, we have digitized 24 touchpoints including payment and financing. However we know that buying a car is the second largest purchase for a consumer, after buying a house. So there are 2 checkpoints which are not digitized, including test drives and delivery. Therefore, the challenge for the OEMs and the manufacturers in the auto industry is how to develop a digital platform that gives customers the confidence that it is safe and that’s what we are trying to do. We’ve made sure the SOPs we have put in place are strong and people feel safe when they visit us which is why our walk-in inquiries have come down only marginally even post Covid.
Q) How much focus will be on regional communication going ahead?
We are transforming our media strategy in response to an increased focus on vernacular and for the last few quarters, we have focused largely on vernacular. Today, even OTT platforms are focusing on vernacular. It is a fast changing ecosystem and we’re keeping a close watch.
Q) Till a few years back, Print used to be an important medium for auto as a segment. Does it continue to be important for Maruti Suzuki?
From an awareness point of view and a top funnel activity, for building consideration, use of print has reduced dramatically. However, for the lower end of the funnel activity, which is at the localized level, you still need print.
Q) The conversation around EVs is heating up. Where does Maruti Suzuki stand?
There is consensus in the industry that going forward EVs will become mainstream. But when we reach that point of inflection when there will be large scale adoption is not yet clear. So the question at this point isn’t whether, its when! When it happens will depend on how quickly the cost of acquisition of EVs will come down. Worldwide, electric vehicles are just around 2% of the total industry. The slower adoption is due to high cost of acquisition, inefficient charging infrastructure and the high cost of battery technology. Most analysts are pointing out that by 2030, roughly 10% of vehicles in India will be EVs. Our short-term goal should be to focus hybrid and CNG, to help the environment.
Q) As a marketer, what are your key focus areas going to be going ahead?
Maruti Suzuki is already one of the most trusted brands. But trust has become a big factor that helps us build differentiation. So we will continue building on that trust. Secondly, we will continue conveying to consumers that we are continuously bringing products that they require. Also, from a marketing perspective, today its no longer about the product alone but about mobility as a service which includes subscription offers, financing, etc. Our aim would be to come up with products and offerings that can make everyday life of our consumers easy.