A minute for your Feedback please

Wednesday, February 1, 2012

Ssangyong Motor Co shares bull run post Auto Expo-example of savvy B2B marketing

In the Hindu business section, I recently saw an article(http://www.thehindu.com/todays-paper/tp-business/article2794132.ece) about how Ssangyong's shares rose 75% in just 5 trading days, as a ripple effect of an auto expo held in India. This episode deserves a case study in itself, as it illustrates several key tenets of both marketing and investor relations. As per the article, M&M had invited 35 Korean journalists(both print and electronic) to the Auto Expo, and then took them on plant visits to Chakan and Pune, where they could appreciate the technological advancement of M&M, and its abilities. This was an artful mix of investor relations in a B2C setting(auto expo), resulting in B2B brand enhancement and immediate share price boost. According to M&M, the media could appreciate that M&M was  'walking the talk' as evident by
  1. showcasing of the joint capabilities of the two companies
  2. communicating the company's intent about SMC, to work and turnaround SMC, the potential of SMC's models such as Rexton in India
  3. Convincing them about M&M's technological capability after seeing the new SUV model XUV50
  4. Hence they also realised how mature the Indian auto industry was now 
Seeing is believing, as evident in this case. In the world's best broadband enabled nation('South Korea'), journalists would certainly have had access to M&M annual reports, analyst reports, television/print ads, commercials etc, and could even have done conference calls with those executives. But even for them, it took a physical visit to India(at M&Ms expense) to appreciate the reality with their own eyes. And ironically, all they saw was the carefully scripted plant show/auto expo of M&M, and not really any critical thinking/independent exploration effort seemed to have been made. But the trip improved the perception of M&M(and built credibility about its avowed intentions for Ssangyong). So what do we learn from this episode?
  1. Sponsoring media junkets still seem to work
  2. When there is a trust deficit/cultural gap, showing evidence helps
  3. Sometimes, there is no substitute for 'on the ground' efforts despite the tempting ease of digital communications.
  4. Even developed markets can be irrational in pricing stocks.
  5. Even trade fairs can be used for investor relations(although auto was an extreme case)
  6. Investor Relations function should focus explicitly on media, rather than just analysts and investors
  7. Traditional media can still move markets, because even alternate media like blogs use traditional media as the base. 
That ends this longish post, but this episode was quite interesting.Maybe asset heavy companies like realty cos could explore this also.

No comments: