Global branding can be simply referred to the process whereby a company directs its efforts at spreading its name, brand, and logo worldwide. According to Chabowski, Samiee, and Huit (as cited in Lu, 2014, p.36), “global branding is defined as the manner in which firms select, manage, and control their brands across international markets”. Firms follow the global branding strategy for several reasons like obtaining access to fast growing markets, exploiting economies of scale, and broadening the customer base. If a company manages to apply global branding and brand positioning strategies collectively in a thoughtful manner, surely it can take greater advantages of the new market. Despite the status of being one of the largest vehicle manufacturers in India, Mahindra has been struggling with constant sales declines in this domestic market over the last 12 months due to growing competition threats from foreign marketers and lack of new vehicle models. In this context, it is better for the company to think about international expansion since the business still has the potential to grow. United Kingdom is identified to be a potential global destination for the Mahindra to spread its business because the country has a well-developed automotive industry which is growing fast. This paper will suggest an apt brand strategy and a set of marketing programmes for Mahindra to position its brand in the UK automotive market.
An Overview of Mahindra
Mahindra and Mahindra Limited (M&M) is an Indian-based multinational automobile corporation headquartered in Mumbai. M&M is one of the largest automobile manufacturers in India in terms of production and the world’s largest manufacturer of tractors. M&M is a part of the Indian conglomerate Mahindra Group NDTV, 2014). According to The Brand Trust Report in 2014, M&M is the 10th most trusted brand in India. In addition, the Fortune India 500 rated M&M as the 21st top Indian company in 2011. Currently, the firm’s product lines include automobiles, commercial vehicles, and two wheelers and the company markets them under the brand name ‘Mahindra’. In the Indian automotive industry, the company’s major competitors include Tata Motors, Maruti Suzuki, Ashok Leyland, Toyota, Hyundai and others. The organization has a presence worldwide and its major global subsidiaries are Mahindra Europe (Italy), Mahindra USA, Mahindra South Africa, and Mahindra Tractor Co. Ltd (China).
Analysis of Brand in the Home Market
While analysing the brand performance of Mahindra in the Indian market, it seems that the brand has been performing poorly over the last twelve months. In April 2014, the company experienced a decline of 15% in total domestic sales at 34,107 units as opposed to 39,902 units in the same month a year ago (Business Today, 2014). Although the company achieved a marginal rise in its domestic sales in June 2014, the sales again dropped by 4.18% to 33,047 in the following month as compared to 34,490 units a year ago (NDTV Profit, 2014). In the next month, M&M’s domestic sales fell by 5.72% in comparison with the sales figures a year earlier. In September 2014, the company slightly improved its performance in domestic sales by achieving a 4.5% increase in sales. The M&M’s domestic sales was horribly hit in October 2014 as the company experienced a drop in sales by 15.71% to 40,274 as against 47,787 in the same month of the previous year (NDTV Profit, Nov 2014). The same trend continued in November too and this time the decline in domestic sales was 11%.
In December 2014, the firm’s sales in the Indian market dropped by 7% to 34,460 units as opposed to 36,681 units a year back (NDTV Profit, January 2015). The situation worsened further when the company’s domestic sale was hit by 8% in January 2015. Despite the immense efforts taken by the Mahindra’s top management to check the drop in domestic sales, it again declined by 11% in the following month. The company experienced decline in domestic sales for the 11th consecutive month when its Indian market sales dropped by a massive 15% in March 2014, compared to the same month a year ago. The M&M failed to confront with the growing competition from the foreign rivals and consequently the firm’s sales in the domestic market dropped again in the next month.
Brand equity is a marketing concept that simply refers to the value of brand .The concept of brand equity is based on the idea that a well-known brand name has the potential to generate more revenues from the market than a less-known brand name because consumers hold the perception that products marketed under a well-known brand are always better than those marketed under a less-known brand. According to the Brand equity model proposed by Brandt and Grant (1997, p.58), awareness, familiarity, loyalty, availability, preference, and price/value perceptions are some of the key dimensions to examine brand equity. While applying this model to the brand Mahindra, it is obvious that the company enjoys greater brand awareness, brand familiarity, brand loyalty, and brand availability. However, the firm’s brand preference is low in the Indian market due to growing competition from foreign vehicle marketers. It is observed that the brand is positioned well in the Indian market to capture maximum sales. Keller’s brand equity model –that focuses on aspects like salience, performance, imagery, judgements, feelings, and resonance – also supports these findings.
Identification of Foreign Market
Since Mahindra’s home market (India) is an emerging country, the brand is likely to perform better in a developed country, and therefore United Kingdom is selected for the company’s international expansion. The UK automotive industry comprises a large number of reputed brands such as Daimler, Jaguar, Land Rover, Honda, Nissan, Toyota, and Ford. While analysing the financial figures from this industry, it is certain that the UK automotive market can offer a prosperous future for the Mahindra. To justify, as per the report of The Manufacturer (n.d.), recently the industry achieved 9 years’ high new car sales over the six months period from January to June 2014; and the industry’s new car sale during this period was 1.28 million, a rise of 10% as against the number of new cars sales in the same period in 2013. In addition, as BBC News (23 January 2015), over 1.5 million cars were produced in the UK automotive industry in 2014 and it was the highest since 2007. Furthermore, UK is an economically and socially developed country and hence, for UK people, price may not be an obstacle for purchasing the vehicle they like. The country’s technological landscape is highly advanced so that Mahindra will be able to deal more efficiently with R&D in the UK market.
Differences in the Marketing Environment
In order to analyse the key differences in the marketing environment of UK and India, it is better to perform a PESTLE analysis that addresses political, economical, socio-cultural, technological, legal, and environmental factors of a market.
While analysing the current Indian political scenario, the country is stable under the BJP (Bharatiya Janata Party) government led by the innovative leader Narendra Modi. However, the rise of numerous local political parties poses serious threats to India’s national harmony and integration. Compared to India, UK has a more stable political spectrum that focuses specifically on the long-term growth of the country. In comparison with India, it can be claimed that UK is free from corruption, which is a potential issue inhibiting growth of an economy.
While evaluating the economy of both the countries, it is obvious that India is a fast emerging economy whereas UK is already a well-developed economy. India has the world’s seventh largest national economy in terms of nominal GDP where as the economy of UK is the fifth largest in the world. Economists predict that both the economies would achieve a significant industrial growth over the coming years.
Cultural diversity is a common element of both the countries. Today UK is an agglomeration of different cultures as a result of growing migration to the country from different parts of world. In contrast, India is already home to a wide variety of cultures and people from different states speak different languages. Considering the regional cultural and linguistic differences, UK can contribute more to the future scope of Mahindra.
It is an undoubted fact that UK’s technological landscape is better than that of India. The UK invests huge amounts of money in R&D each year to develop more advanced technologies that can play a key role in stimulating the growth of the overall economy. For an automotive brand like Mahindra, a well developed technological environment is really beneficial to design innovative vehicle models that are needed to capture different segments of the automotive market.
When it comes to the legal environment, it is observed that the court and law enforcement systems of UK are far better than those of India. In India, corruption is a cancer that kills its great democratic values and ruins law enforcement system. As the UK enforces the country’s Rule of Law more efficiently, Mahindra can expect a fabulous future in the UK automotive market.
While analysing the environmental laws of both the countries, it is clear that UK’s environmental laws and regulations are stricter than those of India. Businesses will face serious legal actions in UK if they fail to comply with the government’s environmental standards such as CO2 emissions. Hence, Mahindra should be more concerned about the environmental policies of the country while operating in UK.
Developing a Brand Strategy
It is better for the M&M to adopt the double branding strategy to launch its products in the UK automotive market. Under the double branding strategy, the concepts of umbrella branding and product branding are combined. In this branding strategy, the brand name represents name of the company as well as the name of the product brand. For instance, Corolla is the name of the car and Toyota is the company manufacturing this car, and accordingly the brand name becomes Toyota Corolla. The major advantage of this branding strategy is that the product benefits from both the company name and the product brand name. In the words of Baisay (2013), double branding is able to create a “two tired sense of difference and depth”. The fascinating feature of this strategy is that the parent brand communicates the product’s significance and identity, which in turn are boosted by the daughter brand so as to attract the interests of a specific customer segment. The author adds that it would be very difficult to ‘personalise an offer’ to the client unless there is a personalised communication (Baisay, p.109). In addition, in contrast to a stand-alone product branding approach, double branding requires less investment.
It is clear that a large number of world’s reputed automotive companies such as Daimler, Jaguar, Toyota, Nissan, and Ford are currently operating in the UK market. In this circumstance, it may not be an easy task for the Mahindra to enter and establish its business in the UK automotive market successfully. Hence, it is recommendable for the company to invest largely in its brand positioning efforts so as to compete with its UK market rivals effectively. In addition, a reasonable investment should be made in the environment too as the UK government is increasingly concerned about promoting sustainable development. The company must be really informed of the consumer behaviour trends in the UK automotive industry. In the UK automotive sector, there has been a growing demand for Sport Utility Vehicles (SUVs) over the last few years. It appears to be a favourable market situation for Mahindra because the company currently offers a wide variety of technologically advanced and competitive SUVs.
Establishing Marketing Programmes
In an attempt to capture the UK automotive market for a new brand like Mahindra and to support the proposed double branding strategy, it would be better for the M&M management to rely on modern marketing programmes such as direct mailings, SMS marketing, telemarketing, social media marketing, online marketing, commercial events, and corporate events. As noted in the previous session, the UK’s technological landscape is well advanced and this trend is observed in the country’s telecommunication sector too. As a result, today most of the UK customers own a smartphone equipped with internet connectivity so that they can instantly access e-mails or browse websites. Hence, the marketing programmes such as SMS marketing, telemarketing, direct mailings, social media marketing, and online marketing are really effective to attract UK customers.
Marketing experts suggest that direct mailing can be a better tool to create an emotional relationship between the marketer and the consumer considering the confidential nature of e-mails. In addition, the company may rely greatly on social media marketing to reach wider market segments at cheaper costs. Today most of the UK people maintain accounts in social networking sites such as Twitter, Facebook, You Tube or others and they use it regularly. Hence, Mahindra can simply open an official account/page in those social websites to convey its marketing messages to the audience and to interact with a wide range of consumers easily. Similarly, online marketing is also a powerful marketing programme to capture market concentration. As part of the online marketing program, Mahindra may start online discussion forums to provide customers with a platform to interact between them and with the company virtually. This virtual arrangement can assist the company to know how customers perceive its brand and what they are expecting from it actually.
Similarly, commercial events such as TV shows, reality shows, or award ceremonies can also benefit the Mahindra to position its brand effectively in the UK market. Although such events may cost the company high, they will certainly assist the organisation to spread increased brand awareness and to enhance its brand value. In addition, corporate events like product launches and anniversary celebrations may aid Mahindra to create awareness of its brand in the corporate world and to catch the attention of business analysts and journalists. Currently, the company adopts traditional marketing programmes such as television ads and road shows in the domestic market to promote its products. Considering the difference in the UK’s market environment, such conventional marketing programmes may not be suitable for Mahindra in this foreign market. To sum up, it is advisable for the firm to adopt an entirely different overall brand strategy and architecture for entering the UK automotive market
Business Today., (2014). Mahindra and Mahindra sales decline 12% to 36,274 units in April. Available at: http://businesstoday.intoday.in/story/mahindra-and-mahindra-sales-in-april/1/205740.html [accessed 25 June 2015].
Brandt, M. & Grant, J. (1997). Power branding. International Data Group.
Baisya, R. K. (2013). Branding in a Competitive Marketplace. SAGE Publications India.
BBC News. (23 January 2015). UK car production at seven-year high. [online] available at: http://www.bbc.com/news/business-30945288 [accessed 25 June 2015].
Lu, W. C., (2014). Brand Management in Emerging Markets: Theories and Practices: Theories and Practices. IGI Global.
The Manufacturer. (n.d.). UK Manufacturing statistics. [online] available at: http://www.themanufacturer.com/uk-manufacturing-statistics/
NDTV Profit. (August 2014). Mahindra & Mahindra Sales Down 4.12% in July. [online] available at: http://profit.ndtv.com/news/corporates/article-mahindra-mahindra-sales-down-4-12-in-july-602026 [accessed 25 June 2015].
NDTV Profit. (November 2014). Mahindra & Mahindra Sales Down 15% in October. [online] available at: http://profit.ndtv.com/news/corporates/article-mahindra-mahindra-sales-down-15-in-october-687480 [accessed 25 June 2015].
NDTV Profit. (January 2015). Mahindra & Mahindra Sales Down 8% in December. [online] available at: http://profit.ndtv.com/news/corporates/article-mahindra-mahindra-sales-down-8-in-december-721065 [accessed 25 June 2015].