“It's too early to write off traditional media”: Mercedes-Benz India’s Santosh Iyer

The average age of a Mercedes car owner is now 38 years. As youngsters now want to enjoy the good things in life faster, they have done away with the traditional thought of buying a massy car first and then upgrading to luxury. Many are buying these high-end cars as their first vehicle.

Santosh Iyer, vice-president, sales and marketing, Mercedes- Benz India, in an interview with afaqs! shares that fewer older people are buying luxury cars and a lot of youngsters are coming in. “Every year our average age keeps coming down. Many years back buying these cars at 38 was unthinkable,” he said.

It is to target these youngsters that the luxury car manufacturer rolled out its marketing campaign for its AMG performance brand earlier this week. The new campaign ‘Are you AMG-ready?’ underlines the company’s strategic move to target social-media-savvy AMG enthusiasts only through Instagram.

The average age of an AMG customer is even lower at around 35 years. This campaign is designed not only to bind the existing customers to the brand but also to conquer new target groups- from the 19-24 years age group. The campaign asks them ‘Are you AMG-ready?’

“There is another set of customers who are entering the brand. They are not purchasing yet. But they are actively considering performance cars. They also influence their elder siblings in their car purchases. So, our campaign targets both these audiences,” Iyer says.

Many customers now opt to purchase a Mercedes Benz as their first car. But it wants to urge this section to make the first car an AMG.

The performance car category was a niche segment in the luxury car market. It is only after the launch of Mercedes’ AMG, almost a decade ago, that the category began developing. It is not immensely popular yet, but it is growing rapidly. Many competitors like Audi, BMW, Porsche and Range Rover have introduced strong contenders.

“We have been quite active since 2014 and are leading the segment with more than 100% growth, even in a pandemic year. AMG sales doubled even last year. This shows that there is a big shift towards performance cars. We are sitting at one of the highest order banks in history. The demand is much better than pre-COVID times. But the supply situation is still struggling. Irrespective of all of this, we will end up with a high double digit growth this year,” he says.

The idea behind the campaign is to increase awareness about the performance brand.

“Enthusiasts and people who follow Formula One know it, but there are many more enthusiasts, who may not know the brand.”

In simple terms, a performance car has above average abilities in one or more of these areas- acceleration, top speed, cornering, and braking.

These cars are generally preferred by people who enjoy speed and they experience this thrill on racing tracks or smooth terrains like highways. However, Iyer says that AMG is as preferred for daily commute to work as it is on the racetrack. The campaign also aims to raise awareness on this feature.

“A pure performance car will be a compromise on the drivability because the ground clearance is lower and there are potholes in the cities. Then it can be driven only on a helipad or a racetrack. But in the case of an AMG it's a functional performance car, which has the drivability of a luxury car and at the same time the performance. This hybrid combination drives more adoption in India for these cars. A lot of young customers prefer such cars as it's more functional,” he shares.

The campaign video has been ideated and conceptualised by British photographer and filmmaker Rankin’s agency, Rankin Agency London. Since it is a global campaign it features European models, roads and people. At a time when brands create customised campaigns for every region in the country to make it more relatable, how do the Indian audience relate to a foreign campaign?

Iyer says the campaign has two layers of relatability- language and psychographics. As the performance category customers are comfortable with English and are well travelled Mercedes-Benz didn’t feel the need for a local adaptation to make it relatable.

“For the new target group, the language is not an issue. It's quite relatable even to the other target group in India. If it was not striking a chord with the Indian audience, we would have relooked at it. But we never thought so,” he said.

The decision to advertise only on Instagram is based on data and comes from its understanding of the customer segments. The brand has put in exactly the same spends that it would have done on a television campaign.

“95 per cent of the traffic on our website comes from mobile phones. So our audience is very much on the device. Also, many of the posts shared by our customers are with a car. They share their weekend drives, midnight drives, their journeys with their friends. So they are very social and like to express themselves with their cars. This is a very deep insight when you compare to the normal luxury car brand, because even normal luxury car buyers are there on our social channels. But we see the AMG enthusiasts are much more attuned to Instagram. So instead of doing a very broad-based approach, we decided to be on the platform where they are and use many of our customers to communicate to the other audiences who are not yet AMG ready,” he said.

But this is not to say that it has given up on traditional media altogether.

“For a luxury brand like ours, the key focus is personalisation and, with limited budgets, to target more precisely, and drive the customer to a more omni-channel experience. So we cannot ignore the power of digital because with the market tools, we can precisely customise and personalise our campaigns and also give a better experience. We are fully committed to digital. We are increasing digital spends year on year. But it's too early to write off traditional media, because it also carries some strength. The customers are on traditional media as well. On one side, digital is mature data analytics, but print and television will also play a role. It's all about optimal orchestration based on the product and the brand that we are trying to operate. So AMG has a more digital approach. But when it comes to some of the other Mercedes Benz brands we may use traditional as well.

The campaign is also supported by on-ground activations- the AMG emotion tool. Its AMG Performance centres take interested customers to weekend driving destinations to get them more into the overall proposition of AMG. “So we are sure that in the next 12-24 months, they will shift or make others shift because they are big influencers in their own right.”