 "Michael Mayer")
An effective after-sales strategy allows customers to touch the brand. It helps develop that element of satisfaction and delight that the company/brand aspires to achieve, Michael Mayer tells Abhilasha Ojha
Volkswagen has been present in India for about five years now. Recent announcements from the company include pumping of significant R&D investment in the market, new launches etc. What are the key learnings from emerging markets like India and how should companies tweak their strategies to be relevant in a new market?
India is one of the most competitive markets when it comes to pricing. It is a market that has a strong car segment. In an emerging car market like India, where one sees quick developments and new segments and variants appearing very fast, there is obviously a big opportunity to tap. In such a complex market, companies need to understand that the strategy building process has to go through several iterations — it has to be done over and over again. The rebuilding of the strategy processes itself is one of the pillars of your strategy to grow in a market like India.
A lot has changed in India in the last five-six years. One, therefore, has to look at the different stages of change. India reflects a lot of what we have experienced in other markets where we have changed our strategy time and again. In India, for instance, we realised that the element of ‘Indianisation’ is key. In the small details of crafting and designing the car, even while relooking at the existing models of our vehicles, we are always trying to figure out how they can be Indianised. This will play a key role in growing our company’s presence in the market.
Does massification come easy to a brand that has been labelled premium for so long? How can companies keep straddle both ends without diluting the image of the brand?
Whenever companies get into developing markets, where consumers are still aspirational about brands and companies are building consciousness about their brands, marketers have to tread carefully. Our brand is our biggest asset; a reason why our positioning is still more aspirational than most other brands. We build on that as we note that people are moving up in their car purchases; from entry level to going in for a vehicle that is more roomy etc.
Now, the mass market looks for price and quick change whereas the premium segment looks for aspiration and sustainability. As a company, we have to look at both ends of the spectrum while also think okay, what can we do to get the right product for the right target consumer? At both the ends of the spectrum, the brand value of the product will have to be communicated to the consumer. The challenge for the brand is that it has to be looked as a premium product while commanding a larger volume of customers. In the case of Volkswagen, the Golf model is an example of effective communication strategy, where one is straddling both the premium and mass segments.
How important is product design for a brand aspiring to be seen in the luxury segment?
Design is tricky. In our case, design is evolutionary rather than revolutionary in that it builds into the minds of the customers, which in turn builds the attributes of the brand and hence builds reliability. While design consistency is important, brands also need to understand that they cannot always ‘look’ old fashioned. They need to be contemporary, elegant but still straddle the path of being consistent in terms of design. A product’s designs cannot change all of a sudden, it has to be subtle. There has to be a way of doing design that helps the customers understand the brand better.
We cannot change the design of the Beetle, for instance. It is a unique story of history, where an iconic brand has lived and communicated with customers through its design. But technologically, it keeps evolving. So, the design element has to define your brand — there has to be a global outlook that has to reach the customer because we cannot be making an ‘Indian car’. However, as an auto company we can — and should — look for ‘Indianisation’ of cars. Can we look at newer colours? Can we look at adding cutting-edge design? So yes, you have to adapt within the framework of the brand’s strengths, you can develop certain facets that directly cater to a local market’s needs but you cannot compromise on the global benchmarks that have set the brand apart from the rest.
What is that one thing that can make or break a brand’s fortunes in a market like India?
Companies need to pay attention to — and listen to — the market where they are present. What is the configuration in cars or what features and elements do the customers here desire? How should the company look at tackling the point of having something for everyone (women; first-time buyers; second-time buyers; tier-I, tier-II, tier-III city buyers) without compromising on the brand’s principles and global standards? India teaches companies that the lifecycle of cars is always getting renewed. Our investments in R&D show us that there can be some unique propositions that a market like India can create and we now have to adopt this more than before to help us play a big part in the rising demand for cars in this market.
The need for value addition design-wise (space for keeping mobile phones in cars, bottles, glasses, depth in the dashboard etc) is more pronounced in the Indian market than others. Sometimes these design changes are a direct reflection of how companies are studying the market, segmenting the customers and seeing opportunities for growth.
What is the growth opportunity you see in the Indian market?
You cannot look at emerging markets in isolation. They have to be tied in with the global network of the company. At Volkswagen, India plays a big part and that’s why we are constantly looking at how we can keep investing in research to study what trends emerge from this market in particular. Look at the strategy of after-sales in a market like India. It is a sure shot way to engage with the customer, communicate with them and have a long-term relationship with them. An effective after-sales strategy allows customers to touch the brand and helps develop that element of satisfaction and delight that the brand aspires to.
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