In just a few years, luxury car brand Audi has moved up to the number two spot in the luxury car segment in India. The January-March 2012 quarter saw Audi India?s sales rising by 41% quarter-on-quarter. And with Audi selling only 5,511 units in India in the whole of 2011, as compared to 3,10,000 in China, the potential of the Indian market in the segment is quite conspicuous. In an interaction with Audi India head Michael Perschke, FE?s Sukalp Sharma and Rajat Guha decode the DNA of the company?s India?s operations, its marketing strategy and what the future holds for the brand. Edited excerpts.
The last quarter of FY 12 has seen Audi?s rise to the second position in the luxury car segment in India. What can we expect next?
Our ambition is to become number one, not number two. Number two is an important step towards that goal. We have always said that our objective is to be number one by 2015, but the way things are going, we might be able to achieve that target earlier. We are going to open many more dealerships over the next two quarters. We thought that once we have the third quarter and the dealers, then we can aim for number two. But it happened in the first quarter itself, which was beyond our expectations. In India, in 2015, we plan to sell at least double the amount we plan to sell this year, which would mean that we are looking at anything between 16,000-20,000 units for 2015.
How is marketing for a luxury auto brand different from that of any other car brand?
The conventional above-the-line, below-the-line combine might not be necessarily enough for the luxury segment. For luxury, you need a significant amount of classical above-the-line brand building, you need significant amount of events for people to touch and feel the brand and it also helps in breaking into peer groups. Then the digital space is also extremely important now. New dimensions include social media. Then there?s peer-to-peer marketing. And all of this needs to be supported with a public relations strategy. You might follow the brand for a certain period of time but you will start believing in it when consistently over many touch points you feel that the brand is on the right track. You need to put all the pieces of the puzzle together to create an image for the brand. A modern brand needs 15-20 different touch points.
How has Audi?s marketing strategy changed?
We have doubled our marketing spends from last year. We are going from a pull model to a push model, which means that we also move to a different target audience now. Since the last couple of years, we were dealing with people who already were connoisseurs of luxury. So they got the ?M-B-A? degree step-by-step: they had the ?M? ? Mercedes, then they got the ?B? ? BMW, and finally the ?A? ? Audi. Now we have people who are directly going for the ?A?. That?s where the marketing needs to be a little different as you need to give these new customers what I call edutainment.
We don?t see mass market advertising and marketing by Audi India. You are not even relying on any brand ambassadors.
As a brand we don?t have brand ambassadors. What we have are brand fans or brand loyalists. Somebody like a John Abraham is a brand loyalist. Ravi Shastri, for example, is an old Audi loyalist. So much so that he was called Ravi ?Audi? Shastri. But the moment you give someone the title of a brand ambassador, it means there are a 100 others out there whom you haven?t made brand ambassadors. As for mass marketing, we didn?t do a brand campaign in 2011, still we ended up winning 22 awards, including three brand awards. It?s not necessary that you play on all channels of mass media to be recognised by a relevant audience. Classical above-the-line print marketing always gives certain tangible returns. You can?t substitute print marketing. However, TV is not a direct response format, until you get into digital TV where people can click and we can get enquiries. Online, on the other hand, is a direct and active tool. Online is something we?ll be driving stronger in the times to come, and we would look at more creative ways to engage with the customers and social media would again be an important tool there. We?ll be converting some of our above-the-line spends to online and social. As for our current marketing spend, 60% is print, 15% would be traditional online spend, 15% social media and alternative digital, and 10% would be television.
The luxury auto segment used to be a narrow band earlier. But now there are sub-segments. How have you seen them evolve?
There are sub-segments from the buying behaviour point of view. The first target audience is the connoisseurs. Then there are those who might not have a background as such in luxury but were able to make money. They might not know every single thing about luxury or brands but they have the means and want to enjoy luxury products. Then you have the first-time luxury buyer who comes from an upper middle-class background. Then you have people who based on a certain buying decision want to become a part of a certain audience of society.
