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Executive Summary
HUL CNBCTV18 Lime season 3
8/22/2011 SPJIMR Team 702 Anubhav Agarwal : 9930868619 Utham KS : 9167410046 Tarun Gupta : 9004193929

Indian luxury car market has seen high growth rates in the past few years due to variety of factors, most pertinent of them being growing wealth levels aided by high economic growth, increasing consumerism with increase in income levels and finally growing prosperity in some of Tier-I, Tier-II cities and rural India due to NRI remittances and infrastructure boom (land disposal). Along with these positive drivers, the industry is also facing some challenges that are unique to Indian context. These include bad infrastructure, macroeconomic volatility & strong correlation of this sector with macroeconomic drivers and finally an unconsolidated and a diverse market space. BMW India, which is currently a market leader in this segment, is facing a tough challenge from Audi India which has seen high growth in the past two years and Mercedes-Benz which has renewed its focus on India as a key emerging market. Audi India, after being formally established in 2007, has seen high growth rates in its sales. It recently launched its A6 series in India and plans to launch the Q3 series sometime next year. Audi India, aspires to become the market leader in India by 2016. Mercedes-Benz India, after being established in 1994 and overthrown by BMW India from the leadership position has now renewed its focus on the Indian luxury market. Challenge for BMW is to maintain leadership in this extremely competitive space witnessing heavy investment with scope for increased penetration accompanied with high margins. For this, we have devised a marketing strategy for BMW with focus on three key parameters PRODUCT, REACH and COMMUNICATION. We carried an exploratory research through focus group discussions and field visits (in-depth interviews with Dealers and current users) to first understand the prime tenets of product strategy of all three players (BMW, Audi and Mercedes-Benz). To further understand consumer behavior in this segment, we floated a survey based on eight major parameters driving purchase in this segment. Consumer perception of the three brands with respect to price and positioning was also assessed. This survey was administered both personally and on internet and we collected around100 responses. The data was sanitized and segmentation analysis was performed. Segmentation analysis yielded three clear segments that were identified based on the Dendogram, with different sets of requirements First Segment (FUNCTIONAL) is influenced by accessories, style and price. Second segment (REWARDING) is influenced by status, comfort and safety and the third segment (INDULGENCE) is influenced by primarily by driving pleasure and performance. We have coupled this primary research with detailed secondary analysis of product portfolio of all three players in various segments.To understand the as-is situation in Reach and communication we carried out secondary research studying various analyst views. We also looked at various marketing communication plans used by these players. To understand the reach we studied their dealer networks, lead generation programs and various Sales & promotion related activities. This was mapped to key market buckets in the Indian luxury market. Based on this analysis we have given recommendations to optimize Product strategy for FUNCTIONAL and REWARDING segments. These include portfolio restructuring and focus. We have purposefully overlooked the INDULGENCE segment as we found nothing amiss as far as marketing strategy for this segment was concerned. For increasing Reach, we propose micro-segmentation of the metro markets based on expenditure pattern. Using this we have identified the RICH NEIGHBORHOODS in various Indian cities and rural India. Our key suggestions in this area include partnerships with small car dealers and some tactics to improve lead generation and after sales service. Finally, altering the communication mix, we have suggested realignment of communication platform on basis of consumer behavior in FUNCTIONAL & REWARDING segments and also with various key market buckets. After analyzing various Brand touch points we have identified bottlenecks in the online asset space which needs focus.