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Old 29th April 2010, 15:03   #1
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Default Wierd but effective positioning strategies

I am really curious about the positioning of various brands in the car market in India. Currently, there is no thread which discusses the positioning of these various brands, so I decided to start this.

To illustrate, let's consider these brands
Skoda Fabia 1.4 Elegance mpi-7.32 L (ex-showroom, Mumbai)
Mahindra XYLO E8-7.77 L (ex-showroom, Mumbai)
Hyundai Verna 1.5 CRDi VGT-7.89 L (ex-showroom, Mumbai)

So, what we have is a hatchback, an MUV and a sedan in the same essential price range (7-8L). And yet, all these different brands have been selling.
This is quite interesting as it gives us a great introspective into the mind of the Indian consumer.
How does he make his decision here?
I, for one would struggle. Any more such dilemmas you guys can recollect?
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Old 29th April 2010, 16:16   #2
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The Verna and Fabia examples you have mentioned are each targeted to different segments of buyers. There are couple of threads which are already discussing the buyer's dilemma between a fully loaded hatch vs. a sedan with basic features from a supposedly higher segment, for the same kind of money.

On the other hand, an SUV/MPV purchase can mainly be attributed to large families, or people carrying needs to be precise. Sure politicos also patronize these vehicles but don't they also travel with their entourage most of the time?

There is nothing specific to Indian customers' mindset when it comes to making such choices. This dilemma would exist anywhere in the world.
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Old 29th April 2010, 22:38   #3
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Quote:
Originally Posted by Finject View Post
To illustrate, let's consider these brands
Skoda Fabia 1.4 Elegance mpi-7.32 L (ex-showroom, Mumbai)
Mahindra XYLO E8-7.77 L (ex-showroom, Mumbai)
Hyundai Verna 1.5 CRDi VGT-7.89 L (ex-showroom, Mumbai)

So, what we have is a hatchback, an MUV and a sedan in the same essential price range (7-8L). And yet, all these different brands have been selling.
This is quite interesting as it gives us a great introspective into the mind of the Indian consumer.
Well, I don't think the first one (in your example) is selling at all compared to the other two. The fact that the first one is not selling and the second one is selling the most out of the three (and not that they are all priced in the same band) should give us real perspective into the minds of customer. Unfortunately, the customer seems to prefer just the "bigger" vehicle given that the price band is same. Apart from the exception of i20, I don't think there is any other premium hatch priced in the same band as bigger sedans and even MUVs, that is selling well.

By the way, great thread! Thanks for starting it, this is actually a very interesting topic.
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Old 30th April 2010, 02:43   #4
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In my opinion, I feel that Skoda is crazy about their brand image. Thus the higher pricing for the Fabia. Hyundai and Mahindras are more concerned about numbers (sales). So to attract buyers, they have priced bigger vehicles at competitive prices.
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Old 30th April 2010, 04:05   #5
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Quote:
Originally Posted by Finject View Post
Skoda Fabia 1.4 Elegance mpi-7.32 L (ex-showroom, Mumbai)
Mahindra XYLO E8-7.77 L (ex-showroom, Mumbai)
Hyundai Verna 1.5 CRDi VGT-7.89 L (ex-showroom, Mumbai)

How does he make his decision here?
If one makes their requirements clear, then the decision is easy; if I were you, I would list down the needs;
Xylo - My family is big, I need atleast 6 people sitting in car
Verna - My family is small, I need power punched big diesel car
Fabia - I have a constraint on parking but cannot compromise on luxury of sedan

So, IMHO, if the requirements are clear, the choice becomes easy & there's no confusion.
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Old 30th April 2010, 13:27   #6
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Well, I don't think the first one (in your example) is selling at all compared to the other two. The fact that the first one is not selling and the second one is selling the most out of the three (and not that they are all priced in the same band) should give us real perspective into the minds of customer. Unfortunately, the customer seems to prefer just the "bigger" vehicle given that the price band is same. Apart from the exception of i20, I don't think there is any other premium hatch priced in the same band as bigger sedans and even MUVs, that is selling well.

By the way, great thread! Thanks for starting it, this is actually a very interesting topic.
Do forgive my ignorance about the Fabia's sales. i just assumed it sold well as you can see a lot of em' around where I live.

I remember that when the Xylo was launched, Mahindra refused to call it a MUV, and based its positioning around the whole 'Sedan Killer' rhetoric.
An extremely smart move which seems to have paid off well.

The Indian consumer will always prefer the bigger car at the same price, in my opinion. Something a certain 'people's car' is also attempting vis-a-vie motorbikes.
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Old 30th April 2010, 13:38   #7
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Even I believe gvivek75 is right. The consumer is mainly driven by the car he 'requires' rather than the car he'll 'get' within his budget. As far as Xylo is concerned, I have doubts on whether it was able to sell itself based on their initial punchline of being a 'Sedan Killer'.
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Old 30th April 2010, 13:43   #8
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Quote:
Originally Posted by Finject View Post
The Indian consumer will always prefer the bigger car at the same price, in my opinion. .
not at all. simply compare the sales of all sedans vs xylo/innova

size does matter but its not everything .

as far as the Indian market is concerned, i think buyers have reached a certain level of maturity as far as "sedan " buying is concerned. meaning - they dont necessarily go after metal

this maturity would reach the hatch market also soon which still is plagued by the "more metal at same price" syndrome. it will take time but soon, we will be more ready to pay for utility than for metal

good thread
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Old 30th April 2010, 14:41   #9
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Talking about poor strategies, try this for an example.

3 cars with same price point, same engine, and targetting same kind of customer, almost same length and breadth and what else manufactured by same company
what do you get..

Answer: a collective sales figures of around 20k.

I am talking about A Star, WagonR and Zen Estilo. Its surely a case study of sorts for the management guys.

I can bet, if anyone questions about the positioning strategy that the Maruti marketing guys have in mind, they will not be able to differentiate between all the three target customers.
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Old 30th April 2010, 15:16   #10
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Talking about poor strategies, try this for an example.

3 cars with same price point, same engine, and targetting same kind of customer, almost same length and breadth and what else manufactured by same company
what do you get..

Answer: a collective sales figures of around 20k.

I am talking about A Star, WagonR and Zen Estilo. Its surely a case study of sorts for the management guys.

I can bet, if anyone questions about the positioning strategy that the Maruti marketing guys have in mind, they will not be able to differentiate between all the three target customers.
It is just that MUL does not want any of its products to die at all. probably they think instead of estabilishing a new sub-brand, its better to leverage an existing sub-brand so that it reaches the 'top of mind' recall of prospects.
Zen was a huge success among Indian public and they just tagged it along with Estillo. Although the original Zen was long gone, they still create an image that Estillo is nothing but a revamped, reskinned and rebadged Zen.

Same with Alto, it was such a success that the world wide replacement for Alto, the 'A-Star' actually was launched along side its previous version, exclusivley in India. The Paradox now is that Alto outsells A-Star.

Wagon R too was a huge hit in urban areas. Ideally the Ritz should have replaced the Wagon R. But Still MUL sells both.

This is one type of strategy where you give the customer a nmber of options within a price range, hoping that the customer falls for anyone of the products.

This strategy is more common with Volume players, as they have the luxury if having so many sub-brands. Take Hero Honda for exmaple.
At one stage they had: Splendor, Dawn, Passion running with same engine. Had CBZ Xtreme, Acheiver and Hunk (had ATFT) with same engine. Had Super Splendor and Glamour with same engine.

Last edited by Mi10 : 30th April 2010 at 15:36.
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Old 30th April 2010, 16:29   #11
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Quote:
Originally Posted by xingamazon View Post
I am talking about A Star, WagonR and Zen Estilo. Its surely a case study of sorts for the management guys.

I can bet, if anyone questions about the positioning strategy that the Maruti marketing guys have in mind, they will not be able to differentiate between all the three target customers.
A Star---> for the young college crowd, but sadly the young crowd prefers a Swift and then mod it.

Wagon R---> For the no-nonsense 30s professional who doesn't need a car to tell that he has arrived in life. Strategy has clicked to a large extent.

Zen Estilo---> For the fairer sex and for those families where women have a large say in car buying decisions. So far sucessfull to a certain extent but will take a big hit after Micra is launched.
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Old 30th April 2010, 16:36   #12
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A Star---> for the young college crowd, but sadly the young crowd prefers a Swift and then mod it.
Even then they don't lose business.
Very soon MSIL will have a custom made car for each and every family in the country.
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Old 30th April 2010, 16:43   #13
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Originally Posted by Daewood View Post
A Star---> for the young college crowd, but sadly the young crowd prefers a Swift and then mod it.

Wagon R---> For the no-nonsense 30s professional who doesn't need a car to tell that he has arrived in life. Strategy has clicked to a large extent.

Zen Estilo---> For the fairer sex and for those families where women have a large say in car buying decisions. So far sucessfull to a certain extent but will take a big hit after Micra is launched.
Daewood, thats interesting opinion on positioning of the car. Belive me I really had totally different opinions about each ones target customers.

I am sure a take by all of the members we would arrive at different perspective of target customers for these cars.

In my opinion Estilo is for the no nonsense guys and WagonR for the group mentality sticking guys.

Last edited by xingamazon : 30th April 2010 at 16:45.
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Old 30th April 2010, 17:58   #14
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To get an idea about Maruti's positioning, the best clue would be the content of their advertisements that are used to market these cars.
The A Star goes with the tag line 'Generation A-Star' something akin to Pepsi's generation ad campaigns.
The Wagon R shows the entire family including the guy, his wife, their kid, the grandpa and the grandma. Giving it a family oriented view.
The new Estilo shows the woman going wow after a ride in the car.
The Swift always have had a persona where it is shown zooming around and the punchline ' You're the fuel' (stupid IMO) - giving it a sporty profile.
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Old 1st May 2010, 19:35   #15
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It's all about market segmentation. Traditionally this only involved identifying the different segments, but the modern marketing funda is to create a segment where it does not exist.

For e.g. in the earlier days of Ambassadors and Padminis, the auto companies rarely bothered to create segments. There was just one product with two or three variants, which catered to an existing segment of managers of big companies, (prominent) doctors and other professionals. The companies hardly targetted anyone (or at least not outside the existing customer profile).

With the costs of the vehicles going down, purchasing power of the people increasing, companies started targetting salaried people with easy loan offers, PSU employees, teachers, college-goers, young professionals, women, joint families and so on. Each of these was a segment created by the auto companies through their marketing. If you look at Maruti, it frequently launches schemes for PSU employees and teachers. Did teachers ever need cars earlier? Nope. But now Maruti will advertise and make them feel that they need one. This artificially created/stimulated need forms a segment.

When you had a Premier Padmini, you used it for all the travel needs, there was no choice. So if you went to college, you would be driving the Padmini. If you went to a marriage, you would take your family in the Padmini. If you went on a long journey, you would fit all your family into the Padmini, load the luggage in the boot or on a carrier on top and go. Today you are unlikely to drive a Mercedes to college, unlikely to drive a Sumo to marriage functions and unlikely to travel outstation in a Maruti Alto. Of course that's assuming you have the money to afford all three
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