Volume 1, Issue 6 (August, 2013) INTERCONTINENTAL JOURNAL OF MARKETING RESEARCH REVIEW. A Peer Reviewed International Journal IJMRR

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1 A Peer Reviewed International Journal IJMRR INTERCONTINENTAL JOURNAL OF MARKETING RESEARCH REVIEW EFFECTIVENESS OF ADVERTISEMENTS AND PROMOTIONAL STRATEGIES IN AUTOMOBILE INDUSTRY BALAKRISHNAN R* DAVID WINSTER PRAVEENRAJ D** *Assistant Professor (Selection Grade), School of Management Studies, Bannari Amman Institute of Technology, Sathyamangalam, India. **Assistant Professor (Senior Grade), School of Management Studies, Bannari Amman Institute of Technology, Sathyamangalam, India. ABSTRACT The automobile industry is the world s largest coordinated industrial production system. The growth in the Indian Automobile Industry is more qualitative than quantitative and it is expected to have a tremendous growth in the coming years. The main objective of the study is to analyze the Effectiveness of Advertisement and Promotional Efforts carried out by Automobile Agency in Tirupur and the Marketing Strategies used for Promotional activities. The study also aims at bringing out the pull factors of importance of Brand Image and Brand Personality that has great hand in Promotional activities. With addition the study also emphasis on the Effectiveness of Advertisement and Promotional Activities carried on Social Networking Sites. Keywords: Automobile Industry, Marketing Strategies, Advertisement And Promotional Activities I. INTRODUCTION The study is about analyzing marketing strategies in automobile industry effectively for the promoting the products and services to the people. This study includes the importance of effectiveness of advertisement and promotional activities carried out for promoting the products and services to the customer. In general the car industry is the one where the customer plays an important role and there is tough and stiff competition in the global market. Focusing on present scenario the car industry has adapted effective marketing strategies for attracting the people and to retain the existing customers. Each 48

2 car brand has to face tough competition; hence it is necessary for the brands to build their brand image within the people This study focuses on effectiveness and importance of Brand Personality in Promotional activities and also on Effectiveness of Advertisement and Promotional Activities carried out in Social Networking Sites. The data is collected from the Customers of the showroom with appropriate Questionnaire and the collected data is analyzed using SPSS administering tests like FriedMan Test, Mann-Whitney U Test, and Kruskal Wallis Test. Suggestions were given to enhance the marketing strategies, to increase the event marketing program, and also the need of brand ambassador in promoting the products and service, and also interactive and innovative promotion in social networking sites II. INDUSTRY PROFILE MODERN GLOBAL AUTOMOBILE INDUSTRY The modern global automotive industry encompasses the principal manufacturers, General Motors, Ford, Toyota, Honda, Hyundai, Volkswagen, and Daimler Chrylser, all of which operate in a global competitive marketplace. It is suggested that the globalization of the automotive industry, has greatly accelerated during the last half of the 1990s due to the construction of important overseas facilities and establishment of mergers between giant multinational automakers. Industry specialists indicate that the origins in the expansion of foreign commerce in the automobile industry date back to the technology transfer of Ford Motor Company's mass-production model from the U.S. to Western Europe and Japan following both World Wars I and II. The advancements in industrialization led to significant increases in the growth and production of the Japanese and German markets, in particular. The second important trend in industrial globalization was the export of fuel efficient cars from Japan to the U.S. as a result of the oil embargo from 1973 to Increasing global trade has enabled the growth in world commercial distribution systems, which has also expanded global competition amongst the automobile manufacturers. Japanese automakers in particular, have instituted innovative production methods by modifying the U.S. manufacturing model, as well as adapting and utilizing technology to enhance production and increase product competition. There are a number of trends that can be identified by examining the global automotive market, which can be divided into the following factors: Global Market Dynamics The world's largest automobile manufacturers continue to invest into production facilities in emerging markets in order to reduce production costs. These emerging markets include Latin America, China, Malaysia and other markets in Southeast Asia. Establishment of Global Alliances 49

3 U.S. automakers, "The Big Three" (GM, Ford and Chrysler) have merged with, and in some cases established commercial strategic partnerships with other European and Japanese automobile manufacturers. Some mergers, such as the Chrysler Daimler-Benz merger, were initiated by the European automaker in a strategy to strengthen its position in the U.S. market. Overall, there has been a trend by the world automakers to expand in overseas markets. Industry Consolidation Increasing global competition amongst the global manufacturers and positioning within foreign markets has divided the world's automakers into three tiers, the first tier being GM, Ford, Toyota, Honda and Volkswagen, and the two remaining tier manufacturers attempting to consolidate or merge with other lower tier automakers to compete with the first tier companies. 1st Tier CompanyMergers Volkswagen-Lamborgini BMW-Rolls Royce 2nd Tier Company Mergers Chrysler-MercedesBenz Renault-Nissan-Fiat 3rd Tier Company Mergers Mazda-Mitsubishi Kia-Volvo INDIAN AUTOMOTIVE INDUSTRY The automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the sixth largest in the world, with an annual production of more than 3.9 million units in According to recent reports, India overtook Brazil and became the sixth largest passenger vehicle producer in the world (beating such old and new auto makers as Belgium, United Kingdom, Italy, Canada, Mexico, Russia, Spain, France, Brazil), growing 16 to 18 percent to sell around three million units in the course of In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand. In 2010, India beat Thailand to become Asia's third largest exporter of passenger cars. As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second (after China) fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual vehicle sales are projected to increase to 5 million by 2015 and more than 9 million by By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads. The Indian Automobile Industry manufactures over 11 million vehicles and exports about 1.5 million each year. The dominant products of the industry are two- wheelers with a market share of over 75% and passenger cars with a market share of about 16%. Commercial vehicles and three-wheelers 50

4 share about 9% of the market between them. About 91% of the vehicles sold are used by households and only about 9% for commercial purposes. The industry has a turnover of more than USD $35 billion and provides direct and indirect employment to over 13 million people. The supply chain is similar to the supply chain of the automotive industry in Europe and America. Interestingly, the level of trade exports in this sector in India has been medium and imports have been low. However, this is rapidly changing and both exports and imports are increasing. The demand determinants of the industry are factors like affordability, product innovation, infrastructure and price of fuel. Also, the basis of competition in the sector is high and increasing, and its life cycle stage is growth. With a rapidly growing middle class, all the advantages of this sector in India are yet to be leveraged. With a high cost of developing production facilities, limited accessibility to new technology, and increasing competition, the barriers to enter the Indian Automotive sector are high. On the other hand, India has a well-developed tax structure. The power to levy taxes and duties is distributed among the three tiers of Government. The cost structure of the industry is fairly traditional, but the profitability of motor vehicle manufacturers has been rising over the past five years. Major players, like Tata Motors and Maruti Suzuki have material cost of about 80% but are recording profits after tax of about 6% to 11%. The key to success in the industry is to improve labor productivity, labor flexibility, and capital efficiency. Having quality manpower, infrastructure improvements, and raw material availability also play a major role. Access to latest and most efficient technology and techniques will bring competitive advantage to the major players. Utilizing manufacturing plants to optimum level and understanding implications from the government policies are the essentials in the Automotive Industry of India. Both, Industry and Indian Government are obligated to intervene the Indian Automotive industry. The Indian government should facilitate infrastructure creation, create favorable and predictable business environment, attract investment and promote research and development. The role of Industry will primarily be in designing and manufacturing products of world-class quality establishing cost competitiveness and improving productivity in labor and in capital. With a combined effort, the Indian Automotive industry will emerge as the destination of choice in the world for design and manufacturing of automobiles. The Indian market offers endless possibilities for investors. III. IMPORTANCE OF THE STUDY The latest move in two decades of automotive industry upheaval brought about by enormous advances in the Marketing Strategies due to stiff and tough competition that is prevailing in the global market. These advances are changed frequently according to the Product and Services introduced and provided. The Manufacturers are using different modes of Medium for Marketing Activities. This Research study is to study the Effectiveness of Advertisement and Promotional activities carried down, its effects on customer and also impact of Brand image and Brand personality on Customer, and Effectiveness of Advertisement and Promotional Activities in Social Networking Sites. 51

5 IV. OBJECTIVES OF THE STUDY The objectives are to study The Effectiveness of the Advertisement and Promotional Efforts Whether the Advertisement and Promotional Strategies are effectively reaching the Customers. Which medium of Advertisement and Promotional activities were successful. Whether the Advertisement and Promotion enhances the Brand Image and Brand Personality. The impact of Advertisement and Promotion efforts through Social Networking sites V. RESEARCH METHODOLOGY Descriptive Research A descriptive design was used for this study as the study aimed to narrate facts and characteristics of units studied for specific production. Descriptive research designs are those studies which are concerned with describing the characteristics of particular individual or a group or a situation Data Source There are two different methods for collection of data to conduct this descriptive study. Both the primary data and the secondary data are taken into account for the purpose of the study. Primary Data The instrument used to collect primary data is a well designed Questionnaire. The questionnaire consist only the likely scaled responses. The questionnaire is carefully constructed and properly setup. Secondary Data Any data gathered for some purpose are called secondary data. The secondary data may be external or form within the firm. Some of the sources are company profiles and internet, etc. To analyze the Indian Automotive shares, Car Segments in India and Sales trend in India secondary data is used. Statistical Tools Used Friedman Test The FriedMan test is a non-parametric statistical test. Similar to the parametric repeated measures ANOVA, it is used to detect differences in treatments across multiple test attempts. The procedure involves ranking each row (or block) together, then considering the values of ranks by columns. 52

6 Mann- Whitney U Test The Mann-Whitney U Test is used to compare differences between two independent groups when the dependent variable is either (a) ordinal or (b) interval but not normally distributed. It is the nonparametric alternative to the independent t- test. Kruskal Wallis Test The Kruskal Wallis test is used when you have one independent variable with two or more levels and an ordinal dependent variable. In other words, it is the non- parametric version of ANOVA and a generalized form of the Mann-Whitney test method since it permits two or more groups VI. ANALYSIS OF DATA VARIOUS FACTORS USED TO MEASURE THE EFFECTIVENESS OF ADVERTISEMENT AND PROMOTIONAL EFFORTS FRIEDMAN TEST - OUTPUT Mean Rank Advertisement Claims Advertised Product Unique Advertisement Buying Strategy Advertisement appeal Elicit Fun Viewing Rank Advertisement Worth Worth repeating in future Convincing level of Advertisement Advertisement Better than other Advertised products N 250 Chi-Square Df 9 Asymp. Sig

7 INFERENCE From the above it is inferred that the rating of various factors measured to evaluate the overall effectiveness of Advertisements and Promotional efforts. The table shows that, higher the mean rank higher the responding level, lesser the mean rank lesser the responding level of the respondents. So the factors pertaining to the advertising effectiveness need to be improved for effective reach of Advertisement and Promotional Effectiveness VARIOUS FACTORS USED TO MEASURE THE EFFECTIVENESS OF BRAND IMAGE AND BRAND PERSONALITY Mean Rank Rank Brand Ambassador is beneficial for Promotion Symbol of Brand built Outstanding Brand Image Value of Brand Sense of Assurance Way the brand is being perceived Evolution of Brand Identity The table shows that, higher the mean rank higher the responding level, lesser the mean rank lesser the responding level of the respondents. VII. FINDINGS Advertisement and Promotion is used with the objective to increase sales of slow moving products, and in off season, attract new customers, improve relationship and neutralize competition effect. Respondents agree that Advertisement and Promotional Activities are watched more on Television Commercials and Newspaper. Respondents agree that Marketing Strategies in Television Commercials, Event Management, and Word of Mouth are more effective than the other Mode. The impact of Advertisement and Promotions activities has great impact in their purchasing decision. The Purchasing Decision is sometime immediate and sometimes delayed. Brand Ambassador is required as more than half of the respondent agrees that Brand Personality plays important role in the Promotion of the Car. 54

8 The Advertisement and Promotion activities carried out in Websites and Social Networking Sites have high impact on Customers. Some respondents were ignorant about Advertisement and Promotional Activities carried out in Websites and Social Networking Sites VIII. SUGGESTIONS Day to Day the Competition is getting tougher in the World, hence new Promising Marketing Strategies can be implemented as the Customers can be easily brainwashed by different Brands. More Event Marketing Programs can be conducted; hence the People will be more aware of the Brand Event Marketing Programs can be conducted once in two months to attract new customer. New Mode of Advertisement Strategies like Mobile Advertisement can be implemented. Enhanced Advertisement Strategies can be implemented. More Brand Promotional activities can be carried out to popularize the Brand image. Brand Ambassador is needed Advertisement and Promotional Activities in Social Networking Sites and Other Websites can be more interactive and enhancing to attract the attention of the people IX. CONCLUSION Advertising and Promotional Activities is the fundamental tool. Advertisement normally has long-term objectives like Building Brand Awareness or Building Consumers loyalty or repositioning to Brand. Promotion is generally designed to supplement advertising and facilitates personal selling. It performs the immediate task of increasing current sales. It aids selling by temporarily changing the existing price value relationship of the product. Promotion is a direct and almost open inducement to consumers to immediately try the product. Hence Effective Advertisement and Promotional activities has to be carried to educate, persuade, reinforce and motivate customers and potential customers, and to retain the existing customers and attract the new customers. X. REFERENCES 1. Roland T. Rust, Tim Ambler, Gregory S. Carpenter, V. Kumar, & Rajendra K. Srivastava (2004) Measuring Marketing Productivity: Current Knowledge and Future Directions Journal of Marketing - Vol. 68 (October 2004), Tim Ambler (2003) Marketing Metrics Article first published online: 6 JAN 2003 DOI: / Raguhubir, P. and K. Corfman(1999, When do Price Promotions Affect Pre-trial Brand Evaluations?, Journal of Marketing Research, Vol. 36, No. 2, pp Monroe, K. B. (1990). Pricing: Making Profitable decisions. New York: McGraw-Hill. 5. Blattberg, R.C., P. Peacock and S.K. Sen (1976), Purchasing Strategies across Product Categories, Journal of Consumer Research, Vol. 3, #3, December, pp Prasana Rosaline Fernandez (2009) Impact of Branding on Gen Y s Choice, Journal of the South East Asia research centre for Communication and Humanities, Vol. 1, No. 1, pp