NEW DELHI, March 2: (This is the second and concluding part of the story. The first part appeared in Tuesday's edition)On April 30, 1997, Daewoo made auto-marketing history: it offered 200 free Cielos for customers, to sample for a year. March 1998 is pay-back time: teams of Daewoo managers from marketing, R&D and regional offices have begun fanning out across the country in a hectic direct marketing exercise. Each of the 200 customers is being extensively debriefed on consumer expectations and asked: will you buy another Daewoo car?
The answer would be critical for Daewoo Motors India Ltd immediate mandate: after ``correcting'' the price of the Cielo by Rs 1.2 lakh, it must now correctly park the value-benefits of the Cielo in the mid-size segment. Once the Cielo vacates the luxury slot and find its own niche, Daewoo's plans to segment the market with the small D'Arts in October and a luxury car in 1999, can then take to the road. Agrees S G Awasthi, managing director, Daewoo, ``The focus ofnext year's advertising will be to reposition the Cielo--as not a luxury car--and to build up the corporate identity by showing the long term commitment of Daewoo Motors in the India market.''Early in February, Daewoo made a start with a print campaign designed to educate the customer on the right positioning.
By highlighting the Cielo's features, the message is clear: the Cielo now offers more value for less money, and not just the same value for less money. Next in the exhaust pipeline: Technology Valyou, Comfort Valyou, and Safety Valyou.
Reckons S. Neelamegham, Dean (Planning) and professor of marketing at the Faculty of Management Studies, ``If Daewoo does not communicate properly why they are reducing prices, greater dissonance will be created in customers." But they can perhaps hold on to the premium positioning if they can effectively communicate that while price has come down, the quality and image is still good.''
That will be critical. Last month, Daewoo suffered a nasty smear campaignallegedly sponsored by a leading competitor. Anonymous letters reached automobile dealers on how the price reduction ``has seriously eroded customer confidence in Cielo'' and ``was done mainly for the 1996 models stuck in their stock.''
After closely monitoring the reaction of the market, Daewoo is now revving up for the fight. For starters, the automobile manufacturer is working hard to retain the confidence of its stakeholders through early and effective communication. On January 5, 1998 -- the day the price correction went public -- at 9 am, the entire Daewoo family gathered at the manufacturing facility and the top management explained the rationale behind the price correction.
On January 6, a day long meeting was held with senior managers from regional offices. On January 7, the entire family of 102 dealers and finally, on January 8, eighteen finance companies were briefed.
Ten days before the announcement, Daewoo stopped delivering the Cielo to minimize the impact of the price reduction on recentcustomers. Then, Daewoo--which continuously tracks a couple of thousand customer perceptions on a monthly basis, with the help of Indica Research--began monitoring the reaction to the price correction.
In the last two months, nearly 1,50,000 letters have been sent -- in addition to each of the 35,000 existing Cielo customers, they target potential buyers in corporates and government as well professionals like chartered accountants, and doctors.
To ensure that existing customers did not feel cheated, each customer complaint was individually addressed: all existing customers were offered the sop of first refusal when the booking of the D'Arts opens; some were offered a customised package of free servicings; others were only counselled on how the price change did not really compromise the price they had paid. Currently, each dealership is under watch by the regional managers for any dissonance in old customers.
Slowly, the excitement is building up. Delhi-based Continental Auto Service, a leading Daewoodealership, is certainly bullish. Armed with club membership lists, lists of company secretaries, chartered accountants, and even engineers, the agency has already sent out 3,000 mailers. Next, up-market colonies have been identified for a more concerted attack.Every Sunday, two Cielos are dispatched to these colonies carrying bright banners which announce the new price.
Besides driving around the streets, colourful stalls are set up in the local market places of residential areas where test drives are offered. Says Col H C Shah, CEO, Continental, ``We are going to the customer's doorstep. We are going to create more pull.''
For Daewoo Motors which expects its 1996-97 turnover to plummet from Rs 945 crore to below Rs 700 crore by March 98, the pressure on the accelerator must be welcome.
Now, all it the Korean automobile manufacturer has to do is give direction to the momentum, through clear positioning.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
