india’s luxury car market ( the competition hots up) submitted to:- submitted by:- mrs shailja...
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India’s Luxury Car Market
(The Competition Hots Up)
India’s Luxury Car Market
(The Competition Hots Up)
Submitted to:- Submitted by:-Mrs Shailja Manocha Group No.:- 6
Submitted to:- Submitted by:-Mrs Shailja Manocha Group No.:- 6
Case OverviewCase Overview
Luxury Car as defined in case is car priced above $ 40,000.
In India, luxury car segment growing at 28% annually.
Profile:- Earlier cars were considered a luxury only meant for
Maharajahs (kings) and a few Wealthy traders. (cars were customized to please rich clients).
Two wheelers were more popular in the markets primarly due to lower income levels and poor road conditions .
Luxury Car as defined in case is car priced above $ 40,000.
In India, luxury car segment growing at 28% annually.
Profile:- Earlier cars were considered a luxury only meant for
Maharajahs (kings) and a few Wealthy traders. (cars were customized to please rich clients).
Two wheelers were more popular in the markets primarly due to lower income levels and poor road conditions .
Indian Luxury Car MarketIndian Luxury Car Market Between 1950 & 1990 way to import cars was
EOUs( Export Oriented Units) with huge turnover.
With liberlization , policies changed and so did consumer behavior.For many Indians car has beome more a lifestyle statement than a status symbol.
Fuel efficiency and price tags were no longer the main deciding factors for the buyer. Design and appeal in addition to a brand are the strongest drivers in the luxury segment.
Cars imported as CBUs against bookings only.
Between 1950 & 1990 way to import cars was EOUs( Export Oriented Units) with huge turnover.
With liberlization , policies changed and so did consumer behavior.For many Indians car has beome more a lifestyle statement than a status symbol.
Fuel efficiency and price tags were no longer the main deciding factors for the buyer. Design and appeal in addition to a brand are the strongest drivers in the luxury segment.
Cars imported as CBUs against bookings only.
Carmakers usually adopt Three Fold Strategy:-
a) First create brand awareness about the product through
exhibitions and advertisements.
b) Established infrastructure with experienced dealer networks to further enhance their presence .
c) Finally introduced the product line for the market.
Themes adpoted by various companies to target the customer :-
Hyundai :- Royalty . Honda:- Intrinsic Value and Past performance. Daimler:- Comfort and Class .
Second importance was given to the choice and location of dealers.:-Showrooms in metros to serve the customer
directly.
Carmakers usually adopt Three Fold Strategy:-
a) First create brand awareness about the product through
exhibitions and advertisements.
b) Established infrastructure with experienced dealer networks to further enhance their presence .
c) Finally introduced the product line for the market.
Themes adpoted by various companies to target the customer :-
Hyundai :- Royalty . Honda:- Intrinsic Value and Past performance. Daimler:- Comfort and Class .
Second importance was given to the choice and location of dealers.:-Showrooms in metros to serve the customer
directly.
Competition Hots Up
With the launch of more than 20 luxury models , the competition has become more intense but there are few challenges too for premium carmakers in India.
- High Customs Duty ranging from 98% to 100% nearly
doubles the price of the vehicle. -
-Waiting Period ( 2 to 7 months).
- Pot holes , traffic jammed roads of India.
But still favorable economic policies and vast population are encouraging the automakers to have a foothold in
India.
Competition Hots Up
With the launch of more than 20 luxury models , the competition has become more intense but there are few challenges too for premium carmakers in India.
- High Customs Duty ranging from 98% to 100% nearly
doubles the price of the vehicle. -
-Waiting Period ( 2 to 7 months).
- Pot holes , traffic jammed roads of India.
But still favorable economic policies and vast population are encouraging the automakers to have a foothold in
India.
3 C’s3 C’s
o Companyo Customero competitor
COMPANYCOMPANY
General motorsBMWMercedesRolls-RoyceLamborghiniPorscheAudi
General motorsBMWMercedesRolls-RoyceLamborghiniPorscheAudi
BentleyNissanVolvoToyotaVolkswagenSkodaMitsubishi
BentleyNissanVolvoToyotaVolkswagenSkodaMitsubishi
CUSTOMERCUSTOMER
Establish Industrialist,rich Businessmen
Chief Executives of Companies.
Upper Class ( salary >100 lac p.a)
Establish Industrialist,rich Businessmen
Chief Executives of Companies.
Upper Class ( salary >100 lac p.a)
CUSTOMER PERCEIVED VALUE
CUSTOMER PERCEIVED VALUE
Product value
Services value
Personnel value
Image value
Product value
Services value
Personnel value
Image value
Monetary cost
Time cost
Energy cost
Psychic cost
Monetary cost
Time cost
Energy cost
Psychic cost
CORE COMPETENCYCORE COMPETENCY
AUDI - TECHNOLOGYBMW - TECHNOLOGYNISSAN- OPERATIONSPORSCHE- R & DMERCEDES - LUXURY AND
TECHNOLOGY
AUDI - TECHNOLOGYBMW - TECHNOLOGYNISSAN- OPERATIONSPORSCHE- R & DMERCEDES - LUXURY AND
TECHNOLOGY
SEGMENTATIONSEGMENTATION
GEOGRAPHIC Region
City
GEOGRAPHIC Region
City
Whole India
Class I cities, Metro Cities
Whole India
Class I cities, Metro Cities
DEMOGRAPHICDEMOGRAPHICAge
Family Size
Gender
Income
Age
Family Size
Gender
Income
Above 18 yrs of age
Anyone(single,married,with or without children)
Male or Female
High(above Rs.100 lakhs p.a)
Above 18 yrs of age
Anyone(single,married,with or without children)
Male or Female
High(above Rs.100 lakhs p.a)
Psychographic SegmentationPsychographic SegmentationGrouping people according to attitudes,
values, and lifestyles
Ostentatious and ambitious lifestyle
Grouping people according to attitudes, values, and lifestyles
Ostentatious and ambitious lifestyle
BEHAVIORALBEHAVIORALOccasionsBenefits
User statusUser rateLoyalty statusReadiness scaleAttitude toward
product
OccasionsBenefits
User statusUser rateLoyalty statusReadiness scaleAttitude toward
product
RegularLifestyleStatement,Royality,FeaturesFirst time,Ex-userMedium to HeavyMediumInformedEnthusiastic
RegularLifestyleStatement,Royality,FeaturesFirst time,Ex-userMedium to HeavyMediumInformedEnthusiastic
TARGETINGTARGETING
Upper class (>100 lakhs p.a)
Informed people with rich taste (Ex. Industrialists and youths)
Upper class (>100 lakhs p.a)
Informed people with rich taste (Ex. Industrialists and youths)
POSITIONINGPOSITIONING
Image positioningImage positioning
THE PRODUCT HIERARCHYTHE PRODUCT HIERARCHYNeed familyProduct classProduct lineProduct typeItem
Need familyProduct classProduct lineProduct typeItem
TranspotAutomobileFour wheelerLuxury carsBMW,Mercedes,volv
o,Porsche etc
TranspotAutomobileFour wheelerLuxury carsBMW,Mercedes,volv
o,Porsche etc
THE PRODUCT HEIRARCHYTHE PRODUCT HEIRARCHYTRANSPORTTRANSPORT Train
AeroplaneAutomobile
Two wheelerThree wheelerFour wheelerHeavy vehicles
Small
Medium sized
Luxury
VOLVO
FERRARI
MERCEDES
ROLLS-ROYCE
VOLKSWAGEN
(Need family) (product family) (product line)
(product type)(Item or brand)
(product class)
FIVE PRODUCT LEVELFIVE PRODUCT LEVEL
CORE BENEFIT: TransportationBASIC PRODUCT: EngineEXPECTED PRODUCT:
Comfort,LuxuryAUGMENTED PRODUCT: Advanced
security systemsPOTENTIAL PRODUCT: luxury with
high performance(average per litre)
CORE BENEFIT: TransportationBASIC PRODUCT: EngineEXPECTED PRODUCT:
Comfort,LuxuryAUGMENTED PRODUCT: Advanced
security systemsPOTENTIAL PRODUCT: luxury with
high performance(average per litre)
PRICING STRATEGYPRICING STRATEGY
LUXURY CARS COMPANIES FOLLOW
“PREMIUM PRICING STRATEGY”
AS THEY OFFER LUXURY AND COMFORT (VALUE) TO THE CUSTOMER AND CUSTOMER IS TODAY WILLING TO PAY FOR LUXURY.
LUXURY CARS COMPANIES FOLLOW
“PREMIUM PRICING STRATEGY”
AS THEY OFFER LUXURY AND COMFORT (VALUE) TO THE CUSTOMER AND CUSTOMER IS TODAY WILLING TO PAY FOR LUXURY.
PRODUCT-MIX PRICINGPRODUCT-MIX PRICING
“OPTIONAL FEATURE PRICING”
MANY COMPANIES OFFER OPTIONAL PRODUCTS,FEATURES AND SERVICES ALONG WITH THEIR MAIN PRODUCT.
Ex. GPS System,sunroof and theft control
“OPTIONAL FEATURE PRICING”
MANY COMPANIES OFFER OPTIONAL PRODUCTS,FEATURES AND SERVICES ALONG WITH THEIR MAIN PRODUCT.
Ex. GPS System,sunroof and theft control
CONSUMER GOODS CLASSIFICATION
CONSUMER GOODS CLASSIFICATION
Speciality goods:Because speciality goods have
unique characteristics or brand identification for which consumers are willing to make a special purchasing effort.Luxury cars are speciality goods as interested buyer will travel far to buy one.
Speciality goods:Because speciality goods have
unique characteristics or brand identification for which consumers are willing to make a special purchasing effort.Luxury cars are speciality goods as interested buyer will travel far to buy one.
CONSUMER BUYING BEHAVIOUR
CONSUMER BUYING BEHAVIOUR
COMPLEX BUYING BEHAVIOR: AS THE LEVEL OF
INVOLVEMENT IS VERY HIGH
LEARN FEEL DO
COMPLEX BUYING BEHAVIOR: AS THE LEVEL OF
INVOLVEMENT IS VERY HIGH
LEARN FEEL DO
PROMOTIONPROMOTION
ADVERTISEMENTS IN Print media Magazines News papers Rational appeal Direct Marketing Motion Pictures
ADVERTISEMENTS IN Print media Magazines News papers Rational appeal Direct Marketing Motion Pictures
CHANNEL DESIGN STRATEGY
CHANNEL DESIGN STRATEGY
PULL STRATEGY : As automobile(luxury cars)
companies invests money in creating a “Brand”.
PULL STRATEGY : As automobile(luxury cars)
companies invests money in creating a “Brand”.
DISTRIBUTION CHANNELDISTRIBUTION CHANNEL
FranchiseeDistributorDealer
FranchiseeDistributorDealer
CHANNEL LEVELSCHANNEL LEVELS
Zero level ManufacturerCustomer
I level Manufacturer Dealer
Customer
Zero level ManufacturerCustomer
I level Manufacturer Dealer
Customer
General motorsGeneral motors
GM cars and trucks were produced globally under the following 12 brands: Buick, Cadillac, Chevrolet, GM Daewoo, GMC, Holden, Hummer, Opel, Pontiac, Saab, Saturn and Vauxhall.
GM cars and trucks were produced globally under the following 12 brands: Buick, Cadillac, Chevrolet, GM Daewoo, GMC, Holden, Hummer, Opel, Pontiac, Saab, Saturn and Vauxhall.
ENVIRONMENTCar Industry and CAR
Market
ENVIRONMENTCar Industry and CAR
Market Early 1990‘s Recession
Late 1990‘s Depreciation of Asian
currencies GDP growth fell U.S. and East Asian
markets slowed European car sales
held up
Early 1990‘s Recession
Late 1990‘s Depreciation of Asian
currencies GDP growth fell U.S. and East Asian
markets slowed European car sales
held up
Luxury segment Up-scale market Main competitors:
BMW,GM, Ford, Toyota, Chrysler, Mercedes, Volvo, Saab, Audi
Most companies operate with different brands
Luxury segment Up-scale market Main competitors:
BMW,GM, Ford, Toyota, Chrysler, Mercedes, Volvo, Saab, Audi
Most companies operate with different brands
G. M. SWOT ANALYSISG. M. SWOT ANALYSIS
STRENGTHS
TECHNOLOGY POTENTIAL
QUALITY IMPROVEMENT
MODEL ACCEPTANCE HAS IMPROVED
STRENGTHS
TECHNOLOGY POTENTIAL
QUALITY IMPROVEMENT
MODEL ACCEPTANCE HAS IMPROVED
G. M. SWOT ANALYSISG. M. SWOT ANALYSISWEAKNESSES
Waiting period
Too Much Vertical Integration
WEAKNESSES
Waiting period
Too Much Vertical Integration
G. M. SWOT ANALYSISG. M. SWOT ANALYSIS
OPPORTUNITIES
FAVOURABLE ECONOMIC POLICIES.
RISE IN LIVING STANDARD.
INCREASE IN CUSTOMER CONFIDENCE.
CHANGING CONSUMER DEMAND FOR NEW MODEL TYPES AND STYLES - EXPANSION.
OPPORTUNITIES
FAVOURABLE ECONOMIC POLICIES.
RISE IN LIVING STANDARD.
INCREASE IN CUSTOMER CONFIDENCE.
CHANGING CONSUMER DEMAND FOR NEW MODEL TYPES AND STYLES - EXPANSION.
G. M. SWOT ANALYSISG. M. SWOT ANALYSIS THREATS
FOREIGN COMPETITION
HIGH TAXES FOR CBUs
INDIAN LEGISLATION AND REGULATION
POOR QUALITY OF THE INFASTRUCTURE IN THIS COUNTRY
THREATS
FOREIGN COMPETITION
HIGH TAXES FOR CBUs
INDIAN LEGISLATION AND REGULATION
POOR QUALITY OF THE INFASTRUCTURE IN THIS COUNTRY
G. M. SWOT ANALYSISG. M. SWOT ANALYSIS
INDUSTRY ANALYSIS
MEGADEALERS AND AUTO SUPERMARKETS
WORLDWIDE DEMAND - STAGNATION - DECLINE
MUST BE WORLD CLASS IN EVERY RESPECT - PRODUCT, MFG. OPERATIONS, FINANCING, AND DISTRIBUTION
INDUSTRY ANALYSIS
MEGADEALERS AND AUTO SUPERMARKETS
WORLDWIDE DEMAND - STAGNATION - DECLINE
MUST BE WORLD CLASS IN EVERY RESPECT - PRODUCT, MFG. OPERATIONS, FINANCING, AND DISTRIBUTION
THANK
YOU
THANK
YOU