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Indian Automobile Industry and Effective Advertising

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  The IUP Journal of Marketing Management, Vol. XVI, No. 3, 201722 Indian Automobile Industry and Effective Advertising: A Qualitative Analysis   © 2017 IUP. All Rights Reserved.*Assistant Professor, Institute of Business Management in Research (IBMR) – IPS Academy, Indore,Madhya Pradesh, India. E-mail: prateekm@hotmail.com**Director – Institute of Applied Sciences and Humanities (IASH), Ganeshi Lal Agrawal University (GLA), Mathura, Uttar Pradesh, India. E-mail: anoop@gla.ac.in***Associate Professor, Indian Institute of Foreign Trade (IIFT), New Delhi, India. E-mail: nitinseth@iift.edu Introduction The automobile business in India is characterized by extreme competition, dynamismand business intricacies. With more than 35 players fiercely competing in the industry locally, it has come a long way since its inception in 1982 1 . The technologicaladvancements, global competition and easy access to market information to customershave made the scenario more aggressive (Bovet and Sheffi, 1998). Customers’ demandsare rising continuously which has forced automobile companies to change significantly to deliver the finest model to them. In such an aggressive business scenario prevailing inthe Indian automobile sector, advertising represents an important means of ensuringnot only a company’s success and profitability but also its long-term business growth. 1 “Automobiles”, India Indian Institute of Foreign Trade Brand Equity Foundation, Ministry of Commerce and Industry, Government of India, 2015. The automobile industry in India is highly competitive and technology-driven. In such an aggressive business scenario, ensuring the success of an advertisement campaign is critical for a company’s success as huge advertisement budgets are involved. The purpose of the study is to recognize specific drivers of effective advertising for the Indian automobile sector in the context of print media using a qualitative research approach. A structured  Delphi technique was implemented to identify specific drivers of effective advertising for the automobile sector. 32 drivers of effective advertising are narrowed down and refined through a structured Delphi to finalize specific 13 drivers of effective advertising for the Indian automobile sector in the print media context. Recognition of 13 specific drivers of effective advertising will help advertisers and marketing managers to be focused while designing advertisement campaign in the Indian print setting. It will also ensure formulation of effective media and message strategies which will lead to long-term business growth for the Indian automobile manufactures. The study demonstrates how a qualitative research tool, viz., Delphi technique can be successfully used to investigatethe dynamic field of advertisement effectiveness.  Prateek Maheshwari *,  Anoop Kumar Gupta** and Nitin Seth ***  23Indian Automobile Industry and Effective Advertising: A Qualitative Analysis  Advertising symbolizes an important way through which organizations communicate with their existing and potential customers worldwide (Bendixen, 1993) and automobileindustry in India is no exception. Advertising is a major element of a company’spromotional mix in the Indian automobile sector. In 2015, the industry grew by 17.6%and 2016 assures to be yet another high growth year. It is expected that Indianadvertisement market will grow by 16.8% in the year 2016-17 and Automobile, Telecomand E-Commerce companies will contribute majorly to overall advertising spending(  Pitch – Madison Advertising Report, 2016 ).It is apparent that advertising drives the automobile business in India and has playeda considerable role in its rapid growth in the recent years. As a result, ensuring effectiveadvertising is of utmost importance so that the organizations can plan their advertisingstrategies and allocate their advertising budgets wisely. In this light, the present researchis an attempt to recognize the specific drivers of effective advertising for automobiles inthe context of Indian print media using Delphi technique. Recognition of specific driversof effective advertising for the automobile sector will help out advertisers to be morefocused while designing an advertisement copy for an automobile brand which willcreate greater impact on buying behavior. The scope of this paper is limited to printmedia only as it is expected to grow strongly in India for another decade and a half dueto mounting literacy (Jeffrey, 2012) and is an uncomplicated means of individualempowerment (Raghunath, 2012) in the Indian society. Literature Review  The literature for the present study is categorized into two broad group, viz., AutomobileSector in India: An Overview and Effective Advertising and Its Assessment, as depictedin Figure 1. The subsequent section provides details of each of the literature category inthe context of present research work.The Indian automobile industry has travelled a long distance since its commencement.From being a closed seller’s market with only five players in 1982, it is now a buyer’smarket with more than 35 local and global players competing aggressively to ensure their Figure 1: Literature Categorization for the Present Study  Literature CategorizationDrivers of Effective AdvertisingConcepts andFrameworksEnsuring Effective Advertising Automobile Sector in India: An Overview   The IUP Journal of Marketing Management, Vol. XVI, No. 3, 201724 presence 2 . The seventh largest manufacturer in the world with an average annual productionof 17.5 million vehicles,the automobile sector contributes significantly to the country’sGDP 3 . With a market size of USD67.7 bn in FY’ 13, automobile industry in India wasexpected to reach a market size of USD145 bn in FY’ 16 4 . According to a report by IndiaBrand Equity Foundation, rising income, huge innovation opportunities, increasinginvestments, a large pool of trained human resource and policy support by Governmentof India are the factors contributing to the rapid growth of the automobile business inIndia 5 .The automobile market in India is broadly split into four consumer segments, viz.,two-wheelers (mopeds, scooters, motorcycles and electric two-wheelers), passenger vehicles(passenger cars, utility vehicles and multipurpose vehicles), commercial vehicles (light,medium and heavy commercial vehicles) and three-wheelers (passenger carriers andgoods carriers) as illustrated in Figure 2. According to a report by Society of Indian Automobile Manufacturer, passenger vehicles are expected to grow at a CAGR of 18%during FY: 2014-21. In addition, commercial vehicles are expected to register a CAGR of 19% while two and three wheelers are projected to expand at a CAGR of 8% duringthe same period 6 . Automobile firms are spending a major portion of their annual profits on advertisingto make the customers more brand conscious and to create a unique positioning in theirminds to gain differentiated advantage 7 . Advertising drives the Indian automobile businessand automobile industry in India spends huge on promotional activities with the aimof creating brand awareness and persuading potential customers 8 . The continuously  2  Automobiles, 2015, Op. cit. 3 “Automobile Sector Survey”, Make in India, Ministry of Finance, Government of India, 2015. 4 “Automotive Mission Plan 2006-2016: A Mission for Development of Indian Automotive Industry”,Ministry of Heavy Industries and Public Enterprises, Government of India, 2006. 5  Automobiles, 2015, Op. cit. 6 “Vision 2020”, Society of Indian Automobile Manufacturer, India, 2013. 7  Automobiles, 2015, Op. cit. 8 “Automotive: Market and Opportunities”, India Brand Equity Foundation, Ministry of Commerce andIndustry, Government of India, 2011. Figure 2: Literature Categorization for the Present Study  Source: “Automobiles”, India Brand Equity Foundation, Ministry of Commerce and Industry,Government of India (2015)  Automobile Market in IndiaTwo-WheelersPassenger VehiclesCommercial VehiclesThree-Wheelers  25Indian Automobile Industry and Effective Advertising: A Qualitative Analysis upgrading technology has provided modern day marketers with a range of latest mediaoptions, viz., internet, mobile phone, films and video games, and advertisers in theautomobile sector are using these media options effectively to reach out to prospectivecustomers.  Advertisement Effectiveness and Its Assessment  Effective advertising refers to how well a company’s advertising accomplishes the intended(Suttle, 2009). It is the extent to which advertising generates a certain desired effect(Corvi and Bonera, 2010). Numerous researchers (Starch, 1964; Spotts et al. , 1997;Lees and Healey, 2005; Samu and Bhatnagar, 2008; and Poonia et al. , 2015) haveexplored the subject of effective advertising and its assessment through different viewpoints. While early scholars (Starch, 1964; Gardner, 1975; and Spotts et al. , 1997)attempted to understand advertising and its effectiveness theoretically and developedconceptual frameworks to realize how advertising actually works, the advancement intechnology shifted the focus of researchers (Hanssens and Weitz, 1980; Hofacker andMurfy, 1998; Gabriel, 2006; Devlin and Combs, 2012; Ching et al. , 2013; and Dasand Sharma, 2016) to investigate the research domain by identifying drivers of effectiveadvertising in varied media contexts. Concepts and Frameworks Numerous researchers (Sheth, 1974; Gardner, 1975; and Seno and Lukas, 2007) havefocused on theoretical considerations while exploring advertising effectiveness whichled to the development of conceptual frameworks. Some practical sets of propositionsthat relate to long-term consumer behavior and profound practical implications for themanagement of the advertising function are the major outcome of these studies. Table 1presents a summary of select research studies that attempted to understand advertisementeffectiveness concepts and theoretical frameworks.  Drivers of Effective Advertising  The advent of technology led to the emergence of several latest media, viz., print, TV,internet, films and video games which shifted the focus of researchers to look at the fieldfrom the perspective of varied drivers used to assess effective advertising in a variety of media. A majority of these studies stressed on assessing the impact of design and executionelements of advertising on a variety of dimensions which are recognized as drivers of effective advertising. Table 2 summarizes select research studies in various media categories with a focus on recognized drivers of effective advertising. Identified Research Gaps The literature review clearly highlighted that the focus of early researches was onunderstanding advertising effectiveness through conceptual models and frameworks.The emergence of modern media redirected the orientation of the researchers to identify  various drivers of effective advertising in a variety of advertising media. A majority of the researches (Robert and Wallace, 1974; Loken and Pitney, 1988; Nelson et al. , 2004;

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