City smart

BY IMPACT Staff

After the success of Amaze, Honda Cars India Limited (HCIL) is looking to ride the same road with the fourth generation Honda City in diesel, launched last week. Jnaneswar Sen, Senior Vice President-Marketing & Sales, HCIL, talks to us about the challenge of maintaining the premium aspect of the brand in a discount market, the company’s ‘Three Joys’ philosophy to deliver to its customers, and new launches planned for 2014-15

By SIMRAN SABHERWAL

Q] The fourth generation Honda City is one of the most awaited cars this year. What can we expect from the latest variant?

For the first time, we have introduced the Honda City in diesel and this is India’s most fuel-efficient car across segments - 26 kilometres per litre (kmpl) as per the Automotive Research Association of India (ARAI) test results. In the petrol variant, we have introduced CVT automatic, which is a Honda original new generation automatic under our Earth Dream Technology series. It is also the most fuelefficient car in its segment. The automatic has a fuel efficiency of 18 kmpl, while the manual transmission model has a fuel efficiency of 17.8 kmpl. For the new Honda City, we have seen more than 9,400 bookings, as of January 7, of which 70% is for the diesel variant.

Q] How are you looking to convey this in your latest ad campaign?

Our advertising campaign is titled ‘A Greater Drive’ and it is an evolution from our previous positioning, ‘Exceptional, Like You’. This means, City customers are exceptional, one class above and the new City complements their personality and will help them in their ‘Greater Drive’. This has two connotations - the ‘Greater Drive’ that a Honda City customer typically has, and that the host of advanced features in this car makes it a greater car for such customers.

Our campaign is a 360-degree one, which will be led by TV and Digital, and supported by Print and hoardings. In fact, we trended twice on Twitter on the day of the launch. While our dealers see a rush due to the new model, we are looking to take the car out of showrooms and closer to our customers once the initial excitement dies down. So, we will focus on a lot of experiential and BTL activities after a few weeks.

Q] What is your fundamental marketing strategy?

Simply put, it is ‘The Power of Dreams’ and it starts with the customer. We want to give the ‘joy of mobility’ to our customers by bringing out benchmark products. A consumer expects quality, durability and reliability and we provide all of those, thereby ensuring peace of mind during the ownership period. Our focus is on “man maximum, machine minimum” philosophy, which looks to minimize the size of the car’s mechanical components while making the space for occupants as large and comfortable as possible.

From a product perspective, our cars are fun to drive, fuel-efficient and stylish to match our consumers’ lifestyle. Being an aspirational brand, we look to fulfil an emotional need. There is regular interaction between us and the customer through our dealership network. We provide an excellent dealership experience and that is why Honda has been Number 1 in the JD Power Asia Pacific India Sales Satisfaction Index for the past two years. We want to make the overall experience of owning a car joyful, that’s our fundamental marketing strategy. The customer is at the centre and we revolve around the customer.

One of the key philosophies of Honda is called ‘The Three Joys’. The first is the ‘The Joy of Buying’ which focuses on the customer and is achieved when the services and expectations exceed the expectation of the customer. The second is ‘The Joy of Selling’, our dealers and distributors must experience joy in representing Honda to customers. The third joy is the ‘The Joy of Creating’ which means that a marketer must continue creating something new. That’s our mantra.

Q] How did you build brand Honda at a time when car companies witnessed drop in sales due to the economic uncertainty?

In the first nine months of the current financial year (April to December 2013) we saw a growth of 66%. Amaze proved to be an amazing success; it helped us reach out to a new customer segment. Amaze carried our first i-DTEC diesel engine. When a new model is introduced, the hype or honeymoon period wears off in a few months but the demand for Amaze is inching up month by month. Our customers are happy with our product and have become our brand ambassadors. Though you can’t call it a tool to sell, it is very effective. Honda Amaze was our only model in diesel, until the new City launch. Currently, 60% of the demand is for the diesel variant and 40% for petrol.

Q] With affordable being the key phrase nowadays, what is your pricing strategy? How do you maintain the balance between affordable and premium?

Being a premium brand, our pricing is competitive, but we will definitely not be price warriors. City is very competitively priced, but it is not the cheapest in the segment. Besides fuel-efficiency, maintenance cost and resale value also matter. We are more competitive in terms of parts pricing and their longevity, compared to City’s main competitor. If you look at the overall running and maintenance cost, we are substantially more competitive. The resale value of Honda cars too holds up extremely well in the market because of quality and the good service that our dealers provide. So, when we look at the total cost of ownership – acquisition cost, running cost, maintenance cost and finally resale cost - we are one of the best in the industry.

Q] What is your current market-share in the Indian automobile sector? What are the company’s future plans?

Our current market-share is a little over 5%, if you take all segments right from bottom of the market to top of the market, it will increase. Looking ahead, we plan to launch two new models in the next financial year, 2014-15. One would be a sporty crossover vehicle, a seven-seater, in petrol and diesel variants. The other launch will be the next generation Honda Jazz hatchback.

Q] What are the challenges faced by Honda in the Indian market?

It is a very competitive market, but it is becoming a discount-oriented market and for a premium brand like Honda, upfront monetary discount to a customer degrades the brand. The challenge is maintaining the premium aspect of our brand in a discount market. Currently, there are no consumer promotions from our end; neither any discounts on any of our models. Despite this, we have been able to generate more demand than supply.

Feedback: simran.sabherwal@exchange4media.com

Tags : CMO Interview