Marketing Response Modelling: Impact of Digital Marketing for a Luxury Car Brand

Abstract

The luxury car segment is the most vibrant segment in the luxury goods market, experiencing high growth in recent years in the emerging economies of China, India, and Brazil. In India, the luxury car segment is dominated by three major players, that is, Audi, Mercedes-Benz, and BMW, together accounting for 85 per cent of the total Indian luxury car segment. The study proposes a marketing response model for luxury car brands, involving a linear model with all possible interaction effects. The model is applied in the case of a luxury car brand which had recently adopted digital marketing in addition to its traditional advertising media mix. The response in the form of customer queries at its showroom (situated in Bangalore, India) was taken as the dependent variable. The independent variables were the advertising expenditure in different media, viz. newspapers and magazines, display events, and digital media. The results of the model provide a measure of the effectiveness of each of the media, the interaction between them, as well as the impact of digital marketing.