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Old 11th February 2011, 20:55   #61
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Its simply a story about brand/product positioning i guess.Consumers taste differ widely & chauvenism in Indian consumers head is hard to overcome. There is an array of people who love a VFM vehicle like a figo & find no point spending more for a Polo or Micra diesel, on the other hand some people buy a product ore due to the snob value it may command. I have no hard felings for honda city buyers but given the sam amount anyday i would go for another vehicle may be even an etios and save some money, actually loads of money or buy myself a good SUV which has some road presence thereby giving me a bang for every buck of the hard earned money.
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Old 16th February 2011, 15:12   #62
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

IMO, with the Indian market growing to a respectable size in sales numbers, all established players want to make the most of a finger in every pie before the competation increases. That probably explains the companies stepping out of the box and launching products that do not match their local image. On the global scale, each car maker has a different image in different countries. It is goint to be a intersting couple of years as companies try to fight the trends and market image they have spent time and money building up. Example would be the Maruti ad: 'Kithna deti hai?'
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Old 19th February 2011, 03:24   #63
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

I too have some thoughts like - Ford did itself good to position itself as a big car maker and came down the value chain with a cheaper & mass market car.
Maruti has done it the other way round , by starting at the lowest end and gone to the top.
Though its not exactly like a Toyota - Lexus, Honda - Accura , but a Kizashi is somewhat similar with an internationally built car but still holding the maruti suzuki brand.
With GTOs views on the i10, i somewhat disagree, its overpriced for what it offers, no Climate control, no Alloys, smaller patch tyres but still priced higher than ritz and nearly the same as swift.
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Old 19th February 2011, 07:53   #64
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

IMHO, in today's market, its not the brand that counts what it has to offer in terms of package and after sales service that matters. Maruti, before launching Kizashi, infact any vehicle for that matter, should take a stock of its dealerships, identify the weaker links (the ones that have numerous complaints against them), take them to task and make sure they offer quality service. Hyundai is to launch the new Verna soon, but are its dealerships ready to offer the quality service required to handle these vehicle. What Hyundai should realize is that its dealerships across the country treat these sophisticated cars the same way cars were treated in the early 1900s.

Honestly makes a customer return to the same brand? The car he had bought had already been used and now out-dates, the sales rep changeover the years, SA, WMs change...its only how the customer and his beauty are treated in the initial years that makes him return to the same brand years later. We did so, Hyundai-Maruti-Hyundai, only to realize Hyundai should be ranked on top of the customer dis-satisfaction list.

Just ti cite another example, there are two service center in a city nearby, one has dealership + service center the other is just a service center. People from the neighbouring towns prefer to bring the car to the service center rather than the dealership. Both the service centers are authorised by Maruti, but the quality of service offered by this service center is much better than the dealership.

VFM brands are becoming overpriced, they can justify the price tag only if they are able to offer better service than what they are offering today. Its not a mammoth task to offer quality service, identify the weak links are train them. But quality service can be offered only if the person is willing to serve. This is the service industry we are talking about, unless the customer is treated rightly, he will never return. The very fact the the common man is today able to afford Toyota, Honda (Merc very soon) and the likes goes to show the committment of these companies to the Indian market. I am not saying these Premium brands do not err, loopholes to exist, proper training to technically sound people who are willing to serve, and a little more careful approach to the customer's feedback are the keys to making a brand successful.
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Old 19th February 2011, 11:55   #65
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

What we must not forget is that Internationally Ford, GM, Toyota and WV amongst others are large volume brands, which have today a whole range of vehicles starting from low end VFM to the high end.

In a way it is easier for the VFM manufacturers to have tighter control on the prices as they are a "mass market" producers with a large base of suppliers and cost effective manufacturing processes in place.

In contrast manufacturers in the premium segment have lower numbers and higher per piece cost. When they venture into the VFM market, they pay a cost penalty due to lower offtake from the component suppliers. Once the numbers rise, they can tweak the costs, but not before that. That is why the lower cost offering from premium segment can rarely compete on price with those from VFM manufacturers, but they can give better build.

As to increasing costs from VFM manufacturers, I think it has more to to do with "what market can bear" rather that higher costs of manufacturing. Their rationale would be if a competitor can sell at a higher price, why not I?

Last edited by Aroy : 19th February 2011 at 11:59.
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Old 19th February 2011, 12:14   #66
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

As others pointed out rightly. Ford, Toyota, Honda are not a luxury brand on a global scenario. They have luxury tag only in India and since their entry into our market was with premium sedans, that tag stayed forever.

Whereas, Maruti, Hyundai and Tata knew the pulse of our country which was growing rapidly from last 20 years started by targetting masses and become tagged accordingly.

Now since the faith and reliability has been struck into indian consumers mind, Indian big 3 slowly but, steadily increased their product and also their A.S.S prices. And, as we all know when a brand name is created, most consumers dont mind paying a premium. That's my assumption of this strange phenomena offlate.

For the luxury brands they now want to jump onto the bandwagon of volumes and coming up with cars in the most popular price segment ( 3L-9L)

I too was shocked to see the pricing of Kizashi and Santa Fe. I am sure it wont find buyers except for people who are loaded with money and looking just for a new experience.

Last edited by mobike008 : 19th February 2011 at 12:15.
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Old 19th February 2011, 12:24   #67
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

If the Kazashi works for Maruti, imagine what it would do to the market.

Currently, premium brands have a very sparse dealer and service network and limited to Metros and Major cities. Where as a VFM brand like Maruti has centers in virtually all parts of the country. Of course not all places will have knowledge, spares and tools to deal with premimum cars from Maruti.

But it would be so much easier to build on a existing platform than creating an entirely new one along with building the brand image and what not!

If the Kazashi clicks Maruti can tke it to Tier2 or even tier3 cities/towns much faster and bring in more luxary segment vehicles and train people and stock spares in strategic centers.
Only time will tell if any of the above is eve realistic.
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