Polaris India Pvt. Ltd: A Case of Experiential Marketing Strategy

Introduction

A long list of challenging goals has always bemused the all-terrain vehicle (ATV) manufacturer Polaris management team in India. All-terrain vehicles’ not being road legal was the most critical of all other challenges. Finding buyers was on the top of the list. It was true that some sports and biking aficionados were developing an interest in ATVs, but the numbers were nothing to sit up and take note of. Getting the vehicles financed was another area of concern. Though this does not sound alarming, it was significant as in India, majority of vehicles purchased are financed either by banks or by non-banking financial companies. Getting a vehicle that was not road legal made the task that much more difficult. An indication of acceptability of the product was a section of the population that was living in the suburbs of tier-I cities with healthy income, exposure to Western culture and sports with a fascination for ATVs. Size, style and purpose of the vehicle were of no concern to them and most importantly they liked the roads seldom taken, the uneven terrain.

In the Indian ATV segment, Polaris is the category prototype and has first-movers’ advantage meaning there is no one to follow strategically, no role models to look up to, no benchmark to set and no beaten path to tread. What is even more worrying is that owners or interested off-roaders have the option to get assembled ATVs from local players who generally import component parts, such as engine, gearbox and other cosmetic parts, from the Chinese market creating cost advantages. How to create, capture and encapsulate value in order to reach out to an audience and register brand Polaris for creating positive impacts on the bottom line remains an uphill task for team Polaris in India.

Polaris Industries Inc.

Started in the mid-1940s by Hetteen Hoist and Derrick, Polaris is led by innovation-driven solutions. From farm equipment, including straw choppers, portable grain elevators and sprayers, Polaris became known as a problem-solving job shop for farmers at Roseau, a small city in Minnesota. In 1954, Edgar and David incorporated the business as ‘Polaris Industries Inc.’ along with Allan, Edgar’s younger brother, as the third partner (History & Evolution, 12 February 2016). Polaris meant ‘the North Star’. The name describes the company well. Polar meant cold, snow, rough terrain and the North Star has been the guiding star for explorers since the dawn of expedition itself.

In 1956, Polaris launched its first snowmobile (History & Evolution, 12 February 2016). The company led by Edgar was in unknown waters and faced challenges that it had never experienced before. Edgar was concerned with crafting a position in the minds of the customers. He had to think beyond. His dilemma was to generate and broaden interest in the machine beyond the functional usage to grab attention of the recreational user. For all practical purposes, Edgar had to provide a new channel to experience ‘fun’. His definition of fun, in this case, involved riding the snowmobile on the snow on a small, fast-paced, open vehicle. But that was not enough; in addition to the positioning challenge, he faced another dilemma. He had to identify and engage a sales and distribution network at places that had snow and through them reach out to people who were certain that they did not need this product. His major dilemma was that he had identified a need and created a solution to cater to the need but the target audience lacked awareness and thus acceptance eluded Polaris.

Few days and a series of meetings later, he had realized that there was nothing wrong with the product, rather it was the audience that lacked the experience of the snowmobile. He changed his approach from telling about the product to giving an experience of the abilities of the product. In March 1960, he led a group of three Polaris snowmobiles on a remarkable 1,200-miles trip across Alaska to prove the Polaris Sno-Traveler’s mobility and dependability and to let people experience the ride on his snowmobile (Tribute: Edgar Hetteen, Co-Founder of Polaris, 1920–2011). Edgar became the greatest champion the snowmobile industry has ever known. The rest is history.

Polaris entered the ATV market in 1985 with two ATV designs, a three-wheel and a four-wheel with automatic shifting, which caught the interest and commitment of distributors who by now were already familiar with Polaris and had been in a relationship for long (Annual Report, 2002). The ATVs had added features, such as racks and trailers, to appeal to the usual client base consisting of farmers, ranchers and lawn maintenance workers. Following on the success of snowmobiles, the ATVs too blended recreation and utility. Experience has always been the core strategy at Polaris ever since the days of success with snowmobiles. They shot to become the market leaders in both the snowmobiles and the ATV segments in North America by giving people an ‘experience’ to remember.

Organizational Values

Polaris was based on innovation to meet the needs of the local people, and shaped by visionaries who turned their dreams into outstanding products and experiences. These fundamentals are etched into steel and are embedded at prominent places at all Polaris offices, productions centres and showrooms. Polaris, through its administration and employees, believes and practices these organizational values which are now sacrosanct. They believe the key to their success is in the ethics and values of their employees. Polaris’s culture is based on eight simple principles and is developed by the employees themselves. This creates a composite culture that is as inspiring as it is indicative of the spirit of innovation (Polaris Creed, 12 February 2016). Exhibit 1 shows the eight fundamental values of Polaris.

Polaris India Pvt. Ltd.

Established on 24 August 2011, Polaris India Pvt. Ltd is a wholly owned subsidiary of Polaris Industries Inc. (USA). It aims at leveraging the Polaris brand and range of offerings including ATVs, snowmobiles and motorbikes to the Indian market. Polaris India has a wide array of diversified off-road vehicles which qualify both on the quality standards and in innovativeness. Polaris India has 16 dealerships and offers a diversified range of its own flagship products, such as ATVs, Polaris Ranger RZR, snowmobiles and side x side vehicles, through them (About Polaris India, 12 February 2016). (Exhibit 2)

Through its constant innovation, Polaris India is attempting to be at the forefront of technology and find a niche in Indian markets. To serve the Indian territory, Polaris India offers a wide array of diversified off-road vehicles designed exclusively for its elite customers and various utility services. A special range of light tactical vehicles of the company is being procured by the Indian defence to enable quick movement in anti-insurgency and anti-terrorist operations in difficult terrains. They have recently entered into an agreement with leading e-tailer Snapdeal to become the first off-road vehicle manufacturer in India to foray into the burgeoning e-market space. This enables the company to be on an omni-channel platform, reaching out to all prospective customers, who are outside the purview of 75 plus Polaris touch points.

Leadership and Company Awareness

When Polaris Industries wanted to enter into the Indian market in 2010, they were conscious of the fact that they needed someone who lives with passion and acts with energy. They were already a major player in the power sports segment. As Indians experienced higher purchasing power, an urban life and exiting solutions to the existing needs, the country’s significant middle-, upper-middle- and higher-class segments were ready to move to the next level. The market was ripe for high-adrenaline adventure sports. Polaris identified the opportunity but had the benefit of hindsight. The decision-makers were aware of the difficulties that they had to face when they launched their snowmobiles. They needed someone with zeal and vision to take the lead. In came Mr Pankaj Dubey as the Managing Director of India operations. Mr Dubey is different from many other stereotypical head honchos. His experience, leadership style and aura coupled with an attitude to never let go made him the right person to lead the India venture of one of the most innovative companies in the world. His previous stints at Hero, LML and Yamaha resulted in launching products, such as LML Freedom and the Yamaha R15, in the Indian market. It was his strategic vision that translated these products into successful ventures.

It was 1954 all over again. The person, the product, the market were different but the context had an eerie similarity. Instead of Edgar, it was Mr Dubey this time around, instead of snowmobiles it was ATVs and the market was India not the USA.

In the words of the managing director himself, people often confuse Polaris India Pvt. Ltd with a software company bearing the same name. Such was the awareness that when Mr Dubey joined Polaris on 1 January 2011 as the managing director, there was also a piece in the media stating that he joined a software company after leaving Yamaha.

However, things have begun to change with 500 people directly or indirectly working for the company; Polaris has touch points across the country, they have also worked out a joint venture with Eicher and a couple of technical tie-ups. The company has come a long way. People have started to recognize Polaris ATVs, Indian motorcycle and its range of other vehicles. The fact remains though that many a time, we are aware of things but it is just not good enough.

Understanding Experiential Marketing

Experiential marketing is considered to be an innovative approach for companies and brands to fulfil customer expectations and to create and maintain competitive advantage (Carù & Cova, 2006; Tynan & McKechnie, 2009). Experience means ‘practical contact with and observation of facts or events’ and ‘an event or occurrence which leaves an impression on someone’. In the age of laptops, tabs and mobile phones that are seamlessly connected to the world wide web, there is no dearth of information. In addition to the Internet, print, electronic and outdoors are also active in inundating the customers with non-stop information. This activity is central to the marketing efforts of all companies. The heart of marketing strategy for most of the companies is how to reach out and engage. Being aware and physically experiencing things first-hand are at times poles apart. This was realized by Polaris very early on. Edgar saw the potential that experience had as a means to creating lasting impressions on those who had the same and those who wanted to have the same. But this was history.

Experiential marketing can be a redeemer but creating experiences is not an easy task. Customers should also feel enthused to be a part of campaign. Marketers have also realized that it is not just the utilitarian and functional benefits that customers derive from a product but also the hedonic and experiential values that surround it (Schmitt, Brakus & Zarantonello, 2015). Experience marketing makes an attempt to establish memorable relations with the customers. This kind or genre of marketing is different from a mere sponsorship programme since (i) customers are encouraged to experience the product instead of just making them passive addresses, (ii) it offers a platform for dialogue and interaction between the participants, brand representatives, viewers, etc. and (iii) it surprises the customers with emotional experience of the brand (Vila-López & Rodríguez-Molina, 2013). Through creation of personally relevant and emotional experiences, experiential marketing can generate brand advocacy, loyalty and positive word-of-mouth (Chanavat & Bodet, 2014).

Multiple ways of creating experiences through experiential marketing have been proposed in the past, primary ones being direct and indirect. Direct experience is a resultant of physical interaction between a product and a customer. Indirect experience is a resultant of mediated interaction between a product and a customer, the most common one being advertising. Impact of experiential marketing on brands has been estimated to prevent brands from being reduced to simple identifiers, and to reach a status of experience providers (Schmitt, 1999).

Creating Experience

Mr Dubey knew that oversized billboards and dynamic product displays are not going to do it for the company. Everyone in the country is doing it, right from those who are selling cosmetics to those selling cars. This became even more important and inexcusable for the company as not only the product and company were new to the country but also off-roading and ATV culture in India was in a very nascent stage 3 years back. Mr Dubey hoped that he could appeal to the enthusiasts who spend long hours just looking at the specifications of the ATVs and can only read and ask about the features of the vehicles but cannot stop by for a refreshing, high-adrenaline ride and experience.

He wondered how rewarding such possibility had in terms of bringing more business to the company. People who are willing to experience the vehicle and the ride would want to talk about it, would want to be spoken about, write about it and post pictures on social media, be brand ambassadors and in all probability recommend Polaris to those who are actually on a lookout to buy a vehicle which can tread in all terrain. This would mean traversing rough terrain for Mr Dubey and the company in India. It is true that experience marketing through test drives for cars, etc. has been used by the automobile industry to foster sales. But this was different. The strategy was to use experience marketing for a whole new and higher purpose. The idea of creating a market and expanding market share through experiential marketing is at best an experiment.

Polaris Experience Zone: Creation and Branding

To give enthusiasts a taste of what it is like to wade through the off-road rugged terrain and to showcase the power of Polaris vehicles, the first Polaris Experience Zone (PEZ) was launched in April 2013 in Bangalore. The following 15 months saw addition of another 20 to this list. To keep the experience thrilling and adventurous, the tracks are specially designed comprising of mounts, cliffs, slush pit, humps, axel breakers, side-inclined slopes (45 and 60 degrees), stones, sand and wood logs, thus offering a complete off-roading experience to the enthusiasts. People come here to experience an adventure ride while allowing potential customers to have hands-on experience of living life off the roads. With an operational cost of approximately ₹50,000, the revenues go up to ₹1 lac per week during festive seasons or holidays. Polaris Experience Zones like the one at Chennai have achieved break-even in around 2 years.

Polaris Branding

The biggest buzz is at the launch event. Polaris being a known name in the industry and the only major player in the segment in India leverages vastly on its brand. The PEZ launch, where the MD is present and makes a point to reach out, is a huge attraction for the off-roading experience enthusiast. After the launch, Polaris enters into a contract with the PEZ owner in terms of doing various promotions for and around the PEZ. The contract also includes the responsibility of the owner to post pictures on its Facebook page and other social media channels, giving incentives, such as special riding offers, apparels and accessories, to participants who can perform best in conducting activities. In all of these, the focus is on strengthening recall and building a strong relationship with enthusiasts. At its end, Polaris ensures support and suggestion to these PEZs on the present activities and long-term planning.

Success of Experiential Marketing for Polaris

Led by a dynamic leader, the idea has contributed to the success of Polaris in India. Reaching out to an audience that matters could not have been possible without an idea as robust as this. Meta- and micro-level planning to execute this idea are also to be given due credit. Detailing each activity beginning with the selection of the partner, infrastructure required, marketing plan, launch support and prompt after-sales services are few things to recognize as well. In addition, the growing enthusiasm among the youth to experience the thrill of wading in an uneven terrain is a boon for the company. Within a short span of 3 years of creating first PEZ, the company now has over 40 PEZs. Polaris Experience Zones are contributing significantly to the culture of adventure sports and off-roading in India.

The Dilemma

At this stage, the dilemma is to be able to devise a strategy to convince the partners or potential experience zone owners not to get into the trap of buying those that are lookalikes or are assembled products imported from China. Although these vehicles are lesser in cost, they are highly compromised on quality. These are low on durability and longevity and owners incur more cost on maintenance and wear and tear of these kinds of vehicles yet they are gaining market share and slowly chipping away from the dominant position that Polaris has. Lately, issues related to repair and maintenance of the ATVs at several PEZs and the frequency of the same have cropped up due to mishandling, rash driving and freak accidents of ATVs by inexperienced riders. This is increasing the total cost of the vehicle to the owner and consumes too much time of the steering team leading to a slide in the interest of the target audience. The team was faced with a dilemma to manage costs and maintain a status quo, if not enhance the interest among enthusiasts.

Another challenge is of visibility and recall of brand Polaris. Customers at any point of time should not be detached from the brand, that is, Polaris, the sturdy vehicle that gave them the high-adrenalin rush. It should remain at the top of the mind of the potential customer. Social media, which primarily rests on the principle of sharing and engaging, should be optimally used to increase the brand recall. The advent of global competitors in ATVs, especially their love for the Indian marketplace, means that even after establishing its name firmly in ATV business, Polaris cannot be insular. A major challenge that Polaris continues to face from the legal side is restriction of usage of ATVs as any other vehicle on the road. In India, legislation requires all vehicles to get a homologation (approval) certification by the Automotive Research Association of India (ARAI) before they can be registered by the RTO. During homologation, vehicles are generally tested for safety standards and various other parameters, such as driver’s visibility and ergonomics, to ascertain their roadworthiness. Polaris or any other ATV manufacturer has not been homologated yet and hence prospective owners had to restrict use to private farms and tracks only. This will continue to remain a major dilemma for Polaris until the time RTO and ARAI resolve the issue of homologation and registration or set up an alternate mechanism.

Unboxing the Future

As the culture of off-roading and adventure sports grows in India, more and more number of industry players are expected to take a plunge. Also, low-cost assembled ATVs are attracting the owners of such sporting facilities. Polaris, although has registered its case strongly in the minds of the customers, will have to be ready to manoeuvre through an even more difficult terrain in the Indian market with its ATVs. In the backdrop of these realities, Mr Dubey and his team wondered whether the franchisee model would work in the long run and whether it is ‘experience’ that has the capability to power Polaris into the realm of success in a nascent market like India. The market is showing acceptance in tier-I cities but the potential in tier-II cities in India is quite sizeable too. The team pondered whether the same strategy of creating awareness PEZs would bear results or something different would have to be tried in such markets. They knew for a fact that in pockets awareness was not the issue any more but this awareness was not leading the customers to purchase the vehicles. The team wanted to move to the next level and make sales but did not know how to convert awareness and recall to revenues.