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To hedge its bets against uncertain economic conditions that have disrupted the demand in the automobile sector through two years, the country’s largest car maker, Maruti Suzuki, has tailored a special campaign to woo government employees. It has put together a massive database of 11.3-million employees in central and state government departments and is pushing its channel partners to register a fifth of its sales from there this financial year.
Maruti Suzuki’s reasoning behind this campaign, Pillars of India, is simple — it plans to draw buyers from a segment that is relatively insulated from uncertainties regarding jobs and annual increments.
“There are as many as 3.1 million central government and 8.2 million state government employees. They are insulated against uncertainties regarding pink slips and annual increments, which are faced by employees in the corporate sector. We are segmenting the market to target this customer set. For us, God is in the details,” says Mayank Pareekh, chief operating officer (sales & marketing), Maruti Suzuki.
He added the company had conceived of this initiative in 2006. Since then, it has registered cumulative sales of a million units to government employees.
The Sixth Pay Commission had resulted in a significant rise in the salaries of government employees. Many received arrears and had cash at hand to purchase vehicles. The company felt the increased incomes could be used to pay equated monthly instalments for vehicles without affecting the lifestyles of consumers.
In the initial years, however, sales from this initiative remained moderate, 30,000-40,000 units a year.
Pareekh says, “Nearly 70 per cent of the sales registered from sarkari employees are accounted for by first-time purchases. The challenge was to convince the first-time consumer, as he was apprehensive not only about ownership costs, but also maintenance hassles.” To address this, Maruti organised free service campaigns at government offices.
| CHASING PINK-SLIP PROOF PEOPLE |
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WHAT'S THE CAMPAIGN ALL ABOUT: Maruti has put together a database of 11.3 million employees in central and state government departments and is pushing its channel partners to register about a fifth of its sales from this segment this financial year |
REASON FOR THE CAMPAIGN: To draw buyers from a segment that is relatively insulated from uncertainties regarding jobs and annual increments
GENESIS: The initiative was conceived in 2006, since when it has registered cumulative sales of a million units to government employees
STRIKING THE RIGHT CHORD: With the Sixth Pay Commission increasing the salaries of government employees, many had cash at hand to purchase vehicles. The company targeted this surplus amount
INITIAL PHASE: Sales, however, remained moderate, 30,000-40,000 units a year
LENDER TIE-UPS: The company has tied up with banks for special financing solutions for government employees
HIGHLIGHTED OFFERS: Maruti has a special sales promotion offer on entry-level models such as the Alto and the Wagon R
CAMPAIGN RESULT: Government employees accounted for 187,131 of the company’s sales
SALES IN Q1FY15: 40,000 units were sold to this segment, 15-20% of the company’s overall retail sales
“We mapped the number of such employees and their salary brackets and, subsequently, determined department-wise consumer sets. Our dealers are asked to reach out to these sets. Besides, every month we focus on a particular department to bring in incremental numbers. Last month, we focused on doctors; next month, we will have special schemes for employees in the education sector, given September 5 is Teachers’ Day,” Pareekh says.
For Maruti, the education, health and railway segments have shown significant traction in this initiative.
The company has tied up with banks for special financing solutions for government employees — special rates and offers have been arrived at. ICICI Bank, Axis Bank and HDFC Bank have agreed to waive processing fees for central government employees. The company also has a special sales promotion offer on entry-level models such as the Alto and the Wagon R.
These efforts have paid rich dividends. In the previous financial year 2013-14, government employees accounted for as many as 187,131 units of the company’s sales. This year, Maruti aims to raise this number to about 200,000. In the quarter ended June this year, it sold 40,000 units to this segment, 15-20 per cent of the company’s overall retail sales.
Most buyers in this segment opted for Maruti’s bestsellers — the Alto and the WagonR. Some also opted for premium models such as the Swift and the DZire.
Of Maruti’s sales to government employees, 40-45 per cent were accounted for by those in the central government.
