"Media in India is really expensive": BMW

Frank-E. Schloeder, director marketing - BMW India, on the recent 'BMW. Proud to Make in India' campaign, the brand's TG, media play and more

BMW, a German luxury carmaker, has recently rolled out two campaigns - 'Proud to Make in India' and 'Leave Your Mark'. While one communicates to the audience that BMW is now aggressively localising its range of cars, thereby implying that it can now pass on the benefit to consumers, the other announces the launch of the Sports Activity Coupe (SAC), BMW X6, in India.

"The future belongs to India. If you want to benefit from the dynamics of the Indian market, you need to act today. Following our approach 'production follows the market', we have accelerated our localisation programme in India," says Philipp von Sahr, president, BMW Group India, on the rationale behind the production and marketing strategy adopted by the brand.

The campaigns executed by Ogilvy and Mather, India, will run across television, print and digital mediums. The national print campaign is orchestrated to have the maximum impact through multiple releases in leading dailies across India and the TVC will be seen on GECs (national and regional), English movies, and news and infotainment channels during prime time. Spots on Direct-to-Home platforms like Tata Sky and Dish TV will also be played.

Frank-E. Schloeder, director, marketing, BMW India, informs that under the 'Make in India' programme, prices have been slashed by up to five lakh rupees and this is what the new campaign aims to communicate. Admitting that India, as a market for luxury cars, is unpredictable and still relatively small as compared to the more mature markets like Germany and US, he says that the potential in the next 15-20 years is huge, owing to the population size and economic growth.

In 2012, BMW was the category leader in the 'affordable luxury' segment, before it ceded to its competitors, Audi and Mercedes. This was a result of reduced volumes, discounting and increased pricing, a deliberate move by the automaker. Schloeder tells us that, although the company sold more units than others, the profits were declining. "All new car technology in the markets come 'top-down' from the luxury makers. The premium segment, thus, requires large investment in new technology. There is no point pushing margins to get to the top as the approach is not sustainable, and that's why we stepped out of the game," he explains.

In order to tackle the situation, the company shifted focus to localisation (which has now been increased to 50 per cent) and high-end models, during the next couple of years. Today, it is better equipped to "strike back and start growing again."

How? The strategy, Schloeder informs, is based on three pillars - product, brand and footprint/accessibility at the local level. In line with the growing popularity of sedans and SUV/SAVs in India, BMW launched the X6, another addition to the X range of SAVs (Sports Activity Vehicles). Emphasising on the need for strong product offerings in the entry segment, he points out, "98 per cent of the market in India is below 20 lakhs, and most our business starts above 30. So, there is a product price range in between where we see a lot of potential." To exploit this opportunity, the company will augment the production of models like X1, which were "slowed down in the last two years because of critical profitability."

On the brand front, while mass media like television, print and digital work well, according to Schloeder, BTL communication is equally important in the luxury space, to interact with the target audience. Simply sending out a message is not effective and a lot of effort needs to be put in bringing the audience closer to the brand. "Media in India is really expensive. As a premium manufacturer, our audience is only 1-2 per cent of the total population and is distributed throughout the country. Unlike Korea, for instance, where 75 per cent of our audience is located in and around Seoul, India is a very fragmented market. Therefore, we have to be very careful with our media spends," he shares.

The brand invests in print and television in the country, because it believes that India is among the few markets where newspapers are still relevant and growing. The 'Bollywood advantage' helps in producing high-quality commercials at low costs. In addition to having a digital presence, the brand does a lot of events at the local level. For instance, in the 'BMW Experience Tour', cars are driven with a huge set-up and professional instructors to different cities (including tier II and III cities like Pune, Surat and Vijaywada), such that the audience can get a chance to experience the drive. This year, the tour will cover 18 cities.

To expand footprint and accessibility of the product at the local level, BMW is investing in growing its dealer network across cities in India.

The brand's TG is divided into two broad segments - those who have been traditionally rich and have experienced luxury, and second being the rising upper class, which is generally younger. "They are winners who want to create their own future. With the growth of the Indian economy, they will gain more importance, and I foresee them as the biggest contributors to the business in the next 15 to 20 years," Schloeder states.

In his opinion, people in India have very different priorities in terms of where to spend the money. They plan for contingencies and as a long-standing tradition, would prefer to invest in education, weddings, real estate, jewellery or a health insurance. "Good marketing starts with a sound understanding of the customer psychology and motives. The concept of indulgence, it seems, is not yet established in the Indian mindset and luxury comes very late in life. At BMW, we are challenging this psyche," he says. BMW's last campaign 'Don't Postpone Joy' was based on the same insight, where the brand urged the young to seize the moment.

But, old habits die hard. Hence, the brand makes sure it catches its audience wherever they are. From digital initiatives like 'BMW Stories' on Facebook, Twitter and YouTube, to being a part of the 'BMW India Bridal Fashion Week', being seen at golf courses and in 'Mission Impossible 5', BMW is present where the affluent flock.