Demand up, supply limited: How festive season is looking like for Maruti Suzuki

Executive Director Shashank Srivastava shares that the brand is increasing its focus on regional language marketing and geo-targeted marketing to make the most of the situation

e4m by Mansi Sharma
Updated: Nov 2, 2021 8:58 AM
Shashank Srivastava

While Maruti Suzuki is experiencing a spike of at least 10-12% in inquiries in the country, the global shortage of semiconductors has created a blank space between the supply and demand for the time being, Executive Director Shashank Srivastava told exchange4media.com while discussing the brand’s festive marketing plans for the year.

Speaking about the overall industry situation for the passenger vehicle domain, Srivastava shared, “If we compare October 2020 with October 2021, the situation is very different. The industry had witnessed cumulative sales of around 340K in October 2020, which was in fact the best performance in the past few years. This year, we are expecting the numbers to be somewhere around 260K.”

He added that the retail side for the market is down by at least 20% because of the shortage of semiconductors and resulting dip in dealership premiums as well.

Srivastava admitted that Maruti Suzuki’s performance for the festive season will very much be in line with the industry standards as the supply side is facing constraints. “If I talk about the surrogate parameters, the demand is definitely going up. We are witnessing higher inquiries compared to previous quarters but because the waiting period is high, several people are either not going ahead with the bookings on, in very few cases, are cancelling some bookings too because we are unable to deliver vehicles on auspicious days during the festive season. But I don’t think the cancellation rate is going to be high because the overall industry is impacted.”

However, Srivastava highlighted that the consumer sentiment is quite high at the moment and the number of bookings is also decent for the festive quarter.

“We are trying our best to manage the supply side from our end. One of the ways we are doing this is by diverting the products to areas based on demand. For example, during Onam in August, we kept the supply high in Kerala as compared to other markets. It was then diverted to Maharashtra during Ganesh Chaturthi festivities. Similarly, during Durga Puja, our focus market remained West Bengal. Similarly, for Diwali and Dhanteras, we have adjusted the availability of products in such a way that the volumes remain higher in the northern and western markets,” he elaborated.

With such intricate planning to manage the supply side, the marketing activities are also being very smartly planned by the brand, with an improved focus on communications in regional languages.

Speaking about the marketing spends, Srivasatava noted, “If you look at the previous years, we had spent somewhere around Rs 580 crore on media spends and another Rs 150 crore on non-media spends. This year, the first quarter was pretty bad for us because of the second wave of Covid. In the second quarter, the sales were up by 50%. And we are witnessing progressive jump in demand month-on-month. So we are spending accordingly. If we compare it to last year, the investments are certainly up towards marketing.”

In terms of content, the focus for the year is not on product-side but more on generic aspects, again because the supply is low, Srivastava shared. “We are focussing on creating industry-centric campaigns around topics like fuel efficiency (Kam Se Kaam Banega), and technical interventions (People Technology). Another factor we are investing in is making customers aware of the supply-side issues and keeping them engaged during the waiting period.” he elaborated.

When it comes to media pie, TV and print lead the roost having almost similar spends directed towards them. Digital takes up roughly 26% of the overall marketing budget.

The brand’s regional language marketing efforts are also quite elaborate. “People are loving brands which are able to talk to them in their own language. That’s why, we are improving our vernacular marketing strategy with each passing day. When we talk about print, around 40% of our marketing spends on the medium are directed towards vernacular marketing. It is up from 36-37% of earlier years. For HSM, our investments have gone down from 47% to 42%. English remains constant at 11-12%.”

Elaborating more, he shared, “To give you some examples, in Bengal, 40% of our communications are happening in regional language. Even in that, there is segregation in big cities and small cities. Say, in Kolkata, there is still some presence of the Hindi speaking lot, so 40% of our communication is in vernacular language. But in smaller cities, this number is 60%. In Andhra Pradesh, the number is 80-85%, In Tamil Nadu, it is 90%. From an overall perspective, 12-13% of our communication is happening in Telugu, 7-8% in Tamil, 20% in Bengali, 5% in Marathi, and 2% in Punjabi.”

 

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