For Ambience Publicis, this news is definitely music to its ears. The agency bested Leo Burnett and McCann-Erickson to win the creative business for Hyundai Motor India's (HMI) premium segment car Sonata. Confirming this development to agencyfaqs!, Sanjeev Shukla, manager, marketing, HMI, said, "Yes, we have appointed Ambience to handle the Sonata business." While the advertising spend on Sonata this year is expected to be to the tune of Rs 2 crore, company sources indicate it would be upwards of Rs 5 crore in 2004.
For the record, the account moves from SSC&B. The media business of HMI (all brands inclusive), which stands at Rs 60 crore, remains with Zenith Media.
The Sonata business moves to Ambience Publicis with a specific set of problems. From the brief given to the appointed agency - which is to take Sonata back to its leadership position - it is clear that the primary task for Ambience would be to drive sales of HMI's premium car. To understand why, let us take a quick look at the performance of Sonata vis-à-vis competition.
A year after Sonata was launched in 2001, HMI sold 2,091 units of the car (in the calendar year 2002). Which, by industry standards, was a fairly good performance. However, between January to July 2003, the company managed to sell 760 units only. In comparison, Honda Accord, which sold 1,005 units in 2001 managed to sell 1,171 in 2002, though in 2003 the figure has come down to 663 units. While Honda Accord continues to nip at Sonata's heels, what has affected the sales of HMI's luxury sedan in a big way is an entirely new category created by another new car.
Skoda's Octavia, which was launched in 2001, has created what is popularly known as the executive segment of cars in India. While in its first year Skoda managed to sell all of 202 cars, in 2002 Skoda sold a whopping 5,089 units. In 2003, the figure looks even more promising. So far, that is, between January and July, 2003, it has sold 3,370 units. Toyota Corolla, another recent entrant in the executive segment, has clocked sales of 4,420 units between January and July 2003.
In effect, aspirants of a bigger car, who would normally graduate from the mid-size segment to the premium segment (which is represented by Sonata, Ford Modeo and E Class Mercedes), now have a slightly inexpensive - and equally classy -alternative in the likes of Octavia, Corolla, Mercedes C class and Opel Vectra.
While this could be one reason that has upset the growth of Sonata, the rash of new cars in the premium segment - in which Sonata operates - is another reason for the HMI brass to sit up and do a course correction. For example, Toyota's Camry, which was launched in October 2002, sold 267 units in its first three months. And between January and July 2003, it has sold 488 units.
As evident, Sonata feels pressured from both within and outside its category. Given this backdrop, Ambience has to address the growth issue immediately. In addition, the agency is expected to offer innovative marketing solutions with special emphasis on below-the-line activities. Television and print, according to sources in the know, would constitute "a big part" of the new media plan. Â© 2003 agencyfaqs!