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TAG Heuer ups marketing spends by 30 pc; gears up for F1

09-May-2011
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TAG Heuer ups marketing spends by 30 pc; gears up for F1

TAG Heuer’s global celebrations of completing 150 years have come to India in a different style as it marks the beginning of brand’s association with the first ever Formula One event in the country. Meanwhile, the “racing heritage year” will see the company investing an additional 30 per cent of monies in its overall marketing.

Speaking exclusively with exchange4media, Manishi Sanwal, General Manager, LVMH Watch & Jewellery India Pvt Ltd, shared the brand’s marketing plans, numbers and the road ahead.

Zooming in
Since, the brand has been an active advertiser in and around world motor sports events, tying up with Buddh International Circuit, India, was a natural choice. Sanwal said, “There is so much we have done on car racing in and around the world. We could never do anything in India till now as there was no platform. This is for the first time there's a company that is investing so much money to create it and bring Formula One to India. So, what better platform to tie up with than one of the best upcoming F1 circuits in the world.”

Sharing the kind of monies involved, he divulged, “Overall, if we look at investment in car racing world, our marketing budget would be 25 per cent of our main budget. For me, this year is car racing heritage year, so we would do a lot of activities around car racing like may be doing campaigns with Lewis Hamilton or Jameson Button. We are already planning a big event on October 5 and we are planning another event with Hamilton during the Grand Prix. A big chunk of advertising in the coming days will be around car racing. Events of this sort are for brand positioning and we want to be remembered as a lifestyle, sports, luxury brand.”

Product positioning
Evidently, by global advertisements and event participations, TAG Heuer has found its niche in the field of sports. “We are a sports inspired brand, there’s nobody else who plays on those paradigms. Be it golf, polo or motor sports, we have been associated with sports. We are doing luxury and lifestyle too and there’s no one else in terms of competition who is doing this. It clearly positions us more towards being a youth-oriented brand in a country like India, where demographics are in our favour. In that context, it does make our future very bright.”

In India, Shah Rukh Khan, the brand ambassador, is the company’s USP, Sanwal claims. “Shah Rukh Khan is one of our biggest USPs. Not many brands today have got Indian brand ambassadors. We have an ambassador who is really international and truly global, who can be leveraged anywhere else in the world.”

Meanwhile, shifting focus, the brand is looking to tap smaller cities hereon. “We have been a metro focussed brand. We are now the first Swiss watch brand that is doing TV advertising aggressively. The first TVC came out sometime in August last year. Most brands just copy an ad, but we have made an Indian television commercial with Shah Rukh. It also shows that now we are looking beyond metros, that is, Tier II and Tier III cities, where we firmly believe lies a big market,” he added.

Communication & challenge
Discussing the role of communication for TAG Heuer at present, Sanwal said that the company was giving importance to ‘reach and teach’ through advertising. “The biggest challenge for us is to educate the consumer. In metros, people understand, but if we go beyond, not many people can relate with a watch brand. We are clearly focussing in terms of communication of the brand’s value. There are two levels of communication here, one is for metros, where people understand what we are and what we do, the second one is beyond metros, where the TVC is aimed at educating people,” he informed.

So, is company not expecting rise in sales with the help of advertising? “Not currently, but may be after six months,” replied Sanwal, adding, “As of now, we are aiming at educating people through our advertising. Our bread and butter comes from metropolitan cities and we are preparing ourselves for other cities as well, because tomorrow the business will come from there too. Right now, we are targetting only premium consumers, but unfortunately it is not easy. We are doing cuts on English TV channels and working with PVR theatres too. We don’t do typical BTL activities as a watch is not a push item, it is more of a pull. Most of our advertising is ATL.”

Expanding presence & pocket
The brand is also looking at expansion in 2011. Sanwal informed, “Currently, we are in 26 cities, having 75 points of sales. We intend to do reach up to 35 cities by the end of this year and we plan to raise that to 115 in the next two years.”

He further explained how the Government’s FDI policy plays a vital role in setting up the rhythm for the brand’s reach. “The bigger monies will happen in terms of expansion of our own stores. Right now that cannot happen because of the FDI policy of the Government as we are a 100 per cent foreign company. Now, the entire dynamics of investments will become investing if the policy favours us in the future, because right now we are expanding through multi-brand outlets. We are investing in creating pull for the brand and we are setting up the supply chain. We are expecting some changes in the policy though, but whether the changes are substantial enough or not has to be seen.”

“We typically invest 20 per cent of sales into our marketing budget and we are increasing the top and bottom line business and marketing budget by about 30 per cent every year,” he shared.

For various tools of communication, the watch maker has separate allotments too. He added, “25 per cent of our overall advertising spend is for television and about 35 for print and rest of the amount in other events and activities.”

When asked why the larger share for print, he explained, “Print gets a larger allocation simply because it is city-specific and it is easier to target the audience. Our distribution is in 26 cities only and TV goes everywhere. Print is easy to control and when you are small, you rely more on print as a medium of communication.”

Digital vision
The brand is bullish on the online medium too and is looking into digital quite massively. “Right now, we are carrying out the digital work in-house. We are trying to grow in that area,” Sanwal said.

While the company does not have any digital agency on board, it doesn’t have an advertising agency too. “We don’t have an advertising agency. All of our creative work happens out of Switzerland. The Indian TVC was a joint effort of TAG Heuer India, the HQ agency in Switzerland and Red Chillies Entertainment owned by Shah Rukh. We get a brief from the HQ agency, work locally and the communication remains uniform,” he divulged. For the record, ZenithOptimedia is TAG Heuer’s media agency.

To commemorate the tie-up with Buddh International Circuit, TAG Heuer has announced the launch of 200 pieces of ‘India limited edition’ watch. This numbered limited edition has been adorned with the logo of the racing circuit in striking India colours – orange and green. The limited edition will be available for sale in September end this year. TAG Heuer will soon initiate a booking procedure for these watches.

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