Indian Automobile Industry and Effective Advertising: A Qualitative Analysis

By Maheshwari, Prateek; Gupta, Anoop Kumar et al. | IUP Journal of Marketing Management, August 2017 | Go to article overview

Indian Automobile Industry and Effective Advertising: A Qualitative Analysis


Maheshwari, Prateek, Gupta, Anoop Kumar, Seth, Nitin, IUP Journal of Marketing Management


Introduction

The automobile business in India is characterized by extreme competition, dynamism and business intricacies. With more than 35 players fiercely competing in the industry locally, it has come a long way since its inception in 1982b The technological advancements, global competition and easy access to market information to customers have made the scenario more aggressive (Bovet and Sheffi, 1998). Customers' demands are rising continuously which has forced automobile companies to change significantly to deliver the finest model to them. In such an aggressive business scenario prevailing in the Indian automobile sector, advertising represents an important means of ensuring not only a company's success and profitability but also its long-term business growth.

Advertising symbolizes an important way through which organizations communicate with their existing and potential customers worldwide (Bendixen, 1993) and automobile industry in India is no exception. Advertising is a major element of a company's promotional 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 Indian advertisement market will grow by 16.8% in the year 2016-17 and Automobile, Telecom and E-Commerce companies will contribute maj orly to overall advertising spending (Pitch - Madison Advertising Report, 2016).

It is apparent that advertising drives the automobile business in India and has played a considerable role in its rapid growth in the recent years. As a result, ensuring effective advertising is of utmost importance so that the organizations can plan their advertising strategies and allocate their advertising budgets wisely In this light, the present research is an attempt to recognize the specific drivers of effective advertising for automobiles in the context of Indian print media using Delphi technique. Recognition of specific drivers of effective advertising for the automobile sector will help out advertisers to be more focused while designing an advertisement copy for an automobile brand which will create greater impact on buying behavior. The scope of this paper is limited to print media only as it is expected to grow strongly in India for another decade and a half due to mounting literacy (Jeffrey, 2012) and is an uncomplicated means of individual empowerment (Raghunath, 2012) in the Indian society

Literature Review

The literature for the present study is categorized into two broad group, viz., Automobile Sector in India: An Overview and Effective Advertising and Its Assessment, as depicted in Figure 1. The subsequent section provides details of each of the literature category in the 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's market with more than 35 local and global players competing aggressively to ensure their presence2. The seventh largest manufacturer in the world with an average annual production of 17.5 million vehicles, the automobile sector contributes significantly to the country's GDP3. With a market size of USD67.7 bn in FY' 13, automobile industry in India was expected to reach a market size of USD 145 bn in FY' 164. According to a report by India Brand Equity Foundation, rising income, huge innovation opportunities, increasing investments, a large pool of trained human resource and policy support by Government of India are the factors contributing to the rapid growth of the automobile business in India5.

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 and goods carriers) as illustrated in Figure 2. …

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