Edited Excerpts from an interview with YS Guleria, Senior Vice President - Sales & Marketing, Honda Motorcycle & Scooter India.
These excerpts are part of an interview with Honda's Guleria, first published in our Marketers' Special Issue - afaqs!Reporter magazine, June 15, 2017:
In FY-16 the two-wheeler segment grew by just three per cent. In FY-17 the forecast was of double digit growth and till October 2016 the momentum was good; Honda was growing at close to 20 per cent. But after demonetisation there was a big slowdown in the industry. Then came the big BS III cut-off bomb! Though double digit growth was expected, the industry finally closed at seven per cent growth.
Honda was able to do better than the industry. Overall (domestic plus exports), we grew by 12 per cent. In the domestic market we grew by 10 per cent. This helped us better our market share, by two per cent overall and by one per cent in the domestic market.
There were a couple of milestones that Honda two-wheelers India achieved in the last financial year: the historic five million (units sold) mark and 41 per cent growth in our exports.
GST (Goods and Service Tax) is a big tax reform that will affect our country. There are uncertainties regarding the impact it will have on stocks and rates.
The acceptance of the scooter as a daily commuting need is here to stay. We are seeing growth in the scooter segment. Scooter sales have gone up in rural India. 'Scooterisation' is a big trend.
Customisaton is another trend. We were very happy to see over 50 per cent of Navi customers opt for customisation offered by Honda.
We are already leading in the Southern and Western parts of the country; historically, these two markets have been contributing over 50 per cent of the total sales in the two-wheeler industry. Going forward, we think growth will come from the Eastern regions. Northern and Central regions also have potential, but because they are agrarian markets, sales are seasonal and tend to depend a lot on the monsoon.
Marketing heads need to talk about the tangible benefits of their campaigns and promotions. This is very difficult. That's what CMOs struggle with today. Breaking the marketing spend across media channels has also become a big challenge for marketing heads.
There is a lot of disruption in the two-wheeler industry and across categories. But instead of saying these disruptions are 'scary', I'll call them challenging.
The speed and quality of data has improved. This helps in decision-making. For example, before launching Navi, we launched an app around the product. Though traditionally black and white are the preferred colours, we realised, thanks to the app, that consumers wanted orange and red... we tweaked our production accordingly, based on this insight.
But there is a flip side to this - being over enthusiastic about data analysis leads to brand paralysis. One must draw the line somewhere.
Though we all are talking about social media and digital, while analysing your ad spend you will always find most of it going towards print, TV and outdoor. Digital is evolving but measuring the outcome of an investment on digital is still very difficult.
The agency-client relationship is symbiotic. Yes, expectations are changing: agencies now want a clear and concise brief from us and we expect out-of-the-box ideas from them.
We need to bring all of it under one umbrella... only then can you have sustainable, long-term communication. The key is having few, valuable agency partners.