Mumbai,Yuga Chaudhari: Tata Motors, India's biggest commercial vehicle (CV) manufacturer, said on Friday it expects…
Mumbai,Pradyuman Maheshwari: There’s nothing worse for an automobile major to lose connect with the personal buyer, even if one was exceedingly strong in the commercial and taxi segments. Tata Motors realized this and unveiled a new, multi-pronged strategy that would help it turn into a future-ready and a responsive, happening organisation. Among the many things that are a part of the gambit, is the unveiling of two new offerings every year, Delna Avari, Head – Marketing Communication and Services, Passenger Vehicle Business Unit, Tata Motors tells Pradyuman Maheshwari
Tata Motors has not spent too much effort on marketing and big launches. But there has been a change of tack over the years. Tell us more about your HorizonNext strategy?
If you go back in time to see when the last big launch was, you’ll struggle to come up with a date. In the automobile sector, you can’t deny that the product is at the heart of it all. We realised this and announced the HorizonNext strategy that you also are referring to, in June 2013. This was an acknowledgment that we need to do multiple things as an organisation to keep pace with the market.
Was that on the basis of some research?
Absolutely. The biggest insight was the market share, when you see your declining numbers. Also realising that you are losing connect with a certain type of consumer. We are strong in the taxi and commercial segment, but the connect with the personal buyer was weak. Actually, efforts were also being made, but it was really about structuring that effort. As a strategy. We work on four distinct pillars — product focus, manufacturing capability and quality, selling capability and post-sale capability. After the Nano launch, which was really big, we stated that till 2020, we’ll be launching two new products every year.
Often when you have to rethink strategy, you first need to convince your internal customer. How much of that is required before you go on to convince the outsider?
You need to get your house in order first. The top management understands this, but it’s about getting that understating right down the ecosystem which, in our case, ends with the dealer. When speaking to a commercial customer, you might haggle over the money or that month’s scheme, and the eventually the deal is done. But with a personal buyer, the engagement is different. The first time he will come in and see the car. Then he’ll probably come with friend. Then he’ll come back with his wife and child. Sometimes your ecosystem is not designed to deal with this. That really is the challenge – the understanding that this buyer needs to be dealt with differently. Four or five years ago, the top things consumers looked for in a car were price, economy, reliability, after sales etc. In the last few years, design has moved to No 2. All other things being equal, design plays a very important role. It was very important for us to actually rethink in the way we design our cars. So we put an internal focus on design, both on external design and internal space usage.
Was your strategy worked out internally, or did you have consultants?
Tata Motors has worked with a lot of good consultants, like Accenture and BCG. But this, we had to do ourselves. It was about a lot of research and holding up a mirror.
But how much did external factors, like slumps and peaks, influence your strategy? Have you had to change course?
No, you can’t afford to change course when it comes to something like this. You’ll at best have to be mindful of it. From a strategy point of view, we are very clear what we want to do in terms of how we want to go about it.
In the last few years, you’ve innovated considerably in your media spends. Has innovation been a major emphasis for you to break the clutter?
Absolutely. People are consuming media differently, and the same language cannot be used for everyone. We’ve a mobile strategy as well. The first thing you always have to do is get people to recall the brand name. For Bolt we had a one-minute challenge where people had to click options on their mobile.
In terms of your spends, you have ATL, BTL and digital. Given the changing profile of the consumer, is anything given preference over the others?
It definitely does shift. For a very long time, it was only print and TV. If it’s the festive season it’s all print. Those kinds of rules were there. Frankly, we’ve not followed that in the last two years, because we are working with a much smaller budget compared to others. More weightage has to be given to experienced staff around launches because we need to take our product out there and let people experience it. We are having to do a lot more in terms of mobile and digital just to get the brand’s conversation to change. The digital space is where people are first shopping. They read reviews, look at consumer feedback, see what experts are saying. There is a lot of noise that happens out there and if you do not manage that well, you could be drowned out.
In terms of allocating your resources, how much is it for digital when you say almost every automobile maker is using it too?
Spends-wise I would say it is still a little less because it doesn’t cost us much. But it’ll suck up almost 30-40% of your time.
With the success of automatic version, do you think you’ve successfully turned the Nano brand around? The fact that you’ve turned the ‘cheap car’ tag into an aspirational one…
Honestly, I don’t know if we ever went out there saying that. Let that chapter be; it had probably hit its lowest point and everybody was saying, ‘What happened to our dream?’ From there to now, we’ve moved the needle. The product and its variants we fixed along the way. You fix the variants, you fix the brand. You fix the average selling price in a way people are willing to pay for your brand, and I think you’ve got the blocks in place.
You mentioned you are looking at two new offerings every year. Are those variants or new models?
Under HorizonNext, the first brand was Zest and then Bolt. There are 14 brands, each with three or four variants and another five colours. We were very clear that there are certain brands with which we are going to the next generation, and we’ve taken brutal decisions with some saying we don’t continue with them. So, we’ll have fresh products coming in, and we’ll ‘next generation’ of some of the existing ones.
Which are these brands?
There are very strong brands in the Tata portfolio and we’d be fools to kill them. There are brands that are strong in the hearts of consumers, and those will keep evolving. Not every brand will be above in that line-up. There was a point in time when in the same newspaper, you had several ads for Tata brands. It was ridiculous. It was one of the things I changed when I took over the entire thing from a marketing point of view and consolidated it. We only spent on certain brands, on certain media, and certain amounts.
When do you think this focus on digital is going to grow, given that a large number of your potential consumers are there?
We are very strong in the digital space. Today, digital is still at a stage where it’s the first place people look for information. But digital is not yet the place where you buy; that’s the next level of evolution. For now you better manage your brand well out there [and have both a] mobile and digital strategy.