A slowing market, falling sales and fewer buyers in dealer showrooms are bad news for car manufacturers. But, despite this what is it that can still draw buyers? It’s brand power, according to leading research consultancy TNS Automotive which has recently conducted a study on how automotive brands are created and sustained over time. The two essential components for the success of a brand are its power in the mind of the consumer and its power in the marketplace.
Pradeep Saxena, senior vice-president, TNS Automotive India, says: “We must understand that a brand is not just a name. It is a set of values that the name espouses. These values need to be distinctive, so that the brand has a unique positioning. Without this all brands will look the same and the customer will have no reason to choose one over the other. In such a situation the only differentiator is price." He further explains: "We must remember that in reality there is nothing like a good or a bad brand image.
Brand image is only either distinctive and
sharp or diffused and confused.”
But how is brand success defined? Is it just about enough people desiring it, or does it becomes a success when enough people actually buy it? Brand builders believe that as long as consumers continue to desire the brand, it is successful whereas business heads and sales managers count success in terms of the revenue generated. TNS says that to be termed successful a brand needs both, the consumer’s heart as well as his wallet.
Brand power refers to those elements of the marketing mix responsible for converting consumer disposition into transactions. This means the availability of the desired product in the right configuration, at an acceptable price and at a convenient location. To be successful a brand needs to have both, the power in the mind and the power in the market, and they complement each other. Both powers are multiplicative and one can leverage and grow the other. For example, until about two years ago BMW had sufficient ‘Mind Power’ among luxury car buyers in India but there was very small ‘Market Power’ in terms of distribution, hence the result was limited sales.
Brands with high market power can succeed even with low mind power, because they can beat the competition by sheer availability, ultra-competitive pricing and unique features. The Skoda Octavia’s initial success in India, when it was a relatively unknown brand with low mind power, can be attributed to its market power derived from a diesel engine option, which its rivals Honda and Toyota did not have.
Similarly brands with high mind power can succeed with limited market power, because the brand itself is so desirable that people seek it out despite limited distribution and buy even at high prices. One recent example of this is the Apple iPhone. Even before its launch in India this year, it was purchased by the Indian consumers through friends and relatives in the USA.
Brand encounters
To build mind power, brands need to build relationships with existing and potential consumers through successful encounters. To be truly effective these encounters need to be relevant, differentiating and impactful and done through various touch points or media. Also, they need to be repeated regularly to build up a strong relationship.
Marketers in the automotive industry use a number of contact points these days. These include TV, newspaper and magazine advertisements, dealer promotion ads in newspapers, manufacturer websites and ads on the Internet. Radio and outdoor are also increasingly making their presence felt.
Brand recognition is extremely critical in a competitive world and especially so during an economic downturn. Saxena says, “A product and its features can easily get copied, but nobody can copy the established brand values. For example it is next to impossible to copy Ferrari’s sporty image even if another car uses exactly the same powertrain.”
It is important to measure the quantum of Brand Experience created by all these media, because different brands create different levels of brand experience. But the problem is that there is no common measurement which can be used across contact points. While TV viewership is measured in TRPs, the press is measured in terms of readership. The issue gets further compounded with multiple contact points including outdoor, radio, internet, press and TV.
But there is a solution now. Integration, a company owned by ex-media and advertising professionals, has developed just such a measure called Brand Experience Point or BEP which measures the quantity of Brand Experience created by brands across individual contacts. This common unit is amenable to all arithmetic operations. For example the BEPs of TV and press can be added to calculate the Brand Experience generated by the two mediums in total.
The TNS Brand Study, conducted among potential and existing car buyers, reveals that word of mouth and test drives are among the five most influential contacts, apart from TV and newspaper ads, with test drives generating the maximum brand experience.
Almost 23 percent of the total Brand Experience is built by just three contacts namely, cars seen on the road, TV ads and manufacturer ads in newspapers. The next eight contacts generate 29 percent of the Brand Experience, whereas less than half the total is contributed by the remaining 24 contacts.
If the various contacts are clubbed into groups we realise that the maximum Brand Experience is created by mass media contacts, followed by indirect contacts. This is simply because the Indian car industry uses at least 10 mass media contacts, whereas there are only seven indirect contacts such as cars on the road, opinion of friends and car displayed in public places. Among the top 10 contacts in terms of Brand Experience, six are mass media, two are indirect and two are Point of Sale contacts. The key conclusion is that even when the auto industry’s thrust is on mass media, in reality the ranking of four out of these six contacts in terms of influence is rather low.
The study confirms that the correlation between Brand Experience Share and Market Share is as high as 80 percent. If we look at individual brands within each contact point, the correlation is as high as 90 percent in case of test drives. However, it drops to 66 percent in case of celebrity endorsement. Hence, this study provides marketers with an important tool they can use to allocate money more effectively in order to grow and strengthen their brands.