Mahindra & Mahindra aims to double online sales by next year

Mahindra & Mahindra, part of the US$19 billion Mahindra Group, launched ‘Bring the Showroom Home’, a portable, mobile-based, interactive virtual reality experience, where a customer can get a 360 degree, virtual view of a showroom. The platform is part of a series of initiatives under Mahindra’s ‘digital transformation strategy’.

The company has spent about Rs 15 crore on developing such platforms expecting to double its online sales by next year.

“If I look at urban brands like TUV, KUV and XUV, almost 8% of our sales come from online. It is a significant number and our goal is to double that by next year,” Veejay Nakra, Chief of Sales & Marketing, Automotive Division, Mahindra & Mahindra, told BestMediaInfo.com in an interview.

“Our digital spend across the portfolio of products and services is around 15% of our entire marketing spend,” said Nakra.

Excerpts:

We see a lot of focus on digital transformation by M&M. How is it shaping the future of the company and category and what according to you is the best way to implement digital transformation?

Digital transformation has become more like a buzzword. It’s not important to use the phrase just for the sake of it, but actually demonstrating how we are going to significantly enhance the consumer experience with our brand. Our digital strategy is an encompassing strategy, which has got multiple legs. It covers right from the pre-purchase, to the purchase, to post-purchase. In the last 18 months or two years, we have created very integrated platforms because they are not just the websites and apps on one’s phone. These are platforms that get integrated into the backend of our business and the experience that we provide to our consumers is a combination of the virtual world, which feeds into the real world to complete that experience. Through our digital transformation, we are trying to provide our customers a personalised, transparent and convenient experience.

For example, SYOUV is a platform that we launched last week. A customer wanting to buy a particular colour and variant has access to my dealer stock. He or she will be able to see which dealer has what stock at which place and the waiting period to buy the vehicle. One can also access the scheduler of the dealer and can book a test drive rather than posting an enquiry and waiting for a call.

How much does Mahindra spend on its digital strategies?

There are two parts to it. One is how much you invest in it. The second is that how much you spend to communicate on the digital medium. Our digital spend across the portfolio of products and services is around 15% of our entire marketing spend. If I talk about scale, almost 8% of sales of our urban products like TUV, KUV and XUV is through digital platforms. We spent close to Rs 15 crore in creating these platforms.

What are the challenges in the communication and marketing aspect of the automotive segment?

I think we all know how competitive the automotive space is. More than the overall automotive space, SUV is the hotspot for all the manufacturers and the brands. More than 23 brands were launched in the last three years. Everybody is eyeing that space. Hence, the clutter in marketing, product positioning and the value proposition to the customer. Obviously, the gaps that were there earlier are reducing. One has to be very careful about the kind of product that is launched, the value proposition given to the customer and how one goes around creating the entire marketing, positioning and communication.

What kind of advertising works for the brand? Is it functional or a mix of functional and emotional?

One needs to look at the category and the product. If I look at the range of commercial vehicles like our pickup range and the three-wheelers, where it’s a tool for trade, there is obviously the functional benefit that needs to be communicated. We recently launched our pickup campaign of giving a guarantee to our customer of a resale value after four years as well as free maintenance. Take another example of the ad that we did for KUV, that is totally an emotional connect, “I Can If I Think I Can’. It’s an SUV and has a functional benefit of going to places where the car can’t go.

Mahindra has always positioned itself as young, daring and vibrant. You have always been recognised for your tractors and SUVs. Is it for the same reason you haven’t received much success in sedan and small cars? Has brand image and marketing anything to do with it?

I wouldn’t agree with that because products like XUV500 and Scorpio have been urban products that are hugely successful. So I do not think it is about the tractors or the rural impact of Mahindra having an impact on our urban range of products. I just think that when it comes to the compact SUV space, you take away a share from the car market and to be able to pull buyers from small cars, who are typically first-time buyers, is a task that takes longer period of time and cannot be done in such a short period which we have tried to do. I think now we should be able to make a mark with the things that we are doing with KUV. The sedan category is not our core business.

While everyone is eyeing rural, your presence there has been fairly strong for long. How much does the rural market contribute to your growth? Will it continue to be a focus market for you?

42% of our total sales come from the rural market. It’s always a combination of both. We can’t say that it’s going to be my focus. I have a certain range of products that are urban and some are rural. Our focus will be on both.

How much has BARC’s rural viewership data helped in your rural marketing strategies? Have FTA channels become the main medium in your media plans to reach out to rural consumers?

There is a lot of judgment and feel that goes into making these decisions. I don’t just normally go with the BARC or even the readership data. They all have a role to play to put data on the table for you. The younger generation neither spends too much time reading the physical paper nor watching television. They are more on their devices. One has to look at the environment change also that doesn’t get captured in these data points when decisions are taken. FTA channels are the main medium for us to reach out to the rural consumers.

Do you see the old thought of marketing being redundant in the data-heavy world and the instinct-based marketing practices taking a backseat?

I don’t think it can ever be redundant. Analytics and data-based decision making have come into play. That along with the various sources of information available today, especially in the digital medium where one can do very sharp marketing to your customer, are a boom.

As ROI and business performances are increasingly being linked with marketing practices, the basic role of a marketer is being questioned. What is your point of view?

There is always a balance one needs to achieve. Brands are not built overnight. One needs to see the longer-term trend with the kind of money being put behind the brand. Whether that is becoming a focus brand or a power brand that is able to create more pull rather than push.

Does Mahindra intend to foray into other product categories?

Of course, we have our product launch strategies in place.

How strong is Mahindra’s automotive position in the e-commerce segment? How much sales come from there and what are your future expectations?

We have done a good job when it comes to the ecommerce space. If I look at urban brands like TUV, KUV and XUV, almost 8% of our sales come from online. It is a significant number and our goal is to double that by next year.

Do you believe content is going to be the next big thing in the field of marketing? How bullish are you in the content marketing space?

Content is king! Along with the content, it is going to be the analytics that leads to the content one creates. That is the combination which is going to create success.

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