[mints21]

In order to boost its image, Maruti Suzuki will set up brand centres at upmarket locations across India to showcase its products and emerging technology.

The company is in the process of acquiring land across different strategic locations which are either state capitals or located in the vicinity of its regional marketing offices.

Maruti Suzuki already has one brand centre in Vasant Kunj, South Delhi which also happens to be the head office of Maruti Suzuki.

These centres would purely engage customers to the new products and modern technology that the company plans to debut in India.

The total investment for these centres is approximately ₹1000crores.

These centres would only cater to brands and will not transact any kind of commercial business. They will allow customers to directly interact with the company, a move that Maruti expects will help generate long term positive brand perception.

Complete Link to the News item:

http://epaper.timesofindia.com/Defau...&ViewMode=HTML

[swiftnfurious]

If Maruti wants to improve it's brand image, it needs to work on the quality of parts! They can NOT produce tinny rattle boxes and then try to create a premium brand image. I for one, was happy with my Swift's purchase; but would NOT look at Maruti as another option for the current prices & service costs.

Maruti has it's products positioned for the rural folks and that's exactly where they stand & shine today. Just like TATA, all their efforts so far has got them the image of a cheap cost, no non-sense car which is going to take AGES to change.

[RSR]

Why do they need to acquire acres of land and spend a thousand crore rupees to set up brand centres?

Aren't these Maruti Suzuki brand centres going to be similar (in concept) to the Fiat Caffès? If yes, then renting one building/showroom space in a strategic location in each city should suffice, shouldn't it?

Or is there more than meets the eye? Are they planning something much bigger and grander than the Fiat Caffès? Has anyone been to the existing brand centre at their corporate HQ?

[GTO]

From my Thread on Boutique Showrooms: Linky

Originally Posted by GTO

It's a commonly accepted fact that the cost of property, along with that of inventory, form the two largest expenses for any car dealership. Of course, we are only talking metro cities here. As a fast developing economy, India's urban property prices continue to shoot skyward. The situation is such that, some car dealers have actually forfeited their franchises and rented their property instead (for a net profit).

Where does that leave car brands who want to expand their dealer network and "urban presence"? Service stations have already started moving to the far suburbs. After all, it doesn't matter where you get your car serviced, and everyone offers free pickup / drop-off facility today. On the other hand, a brands visibility to the mass market is crucial to its success.

Enter the Boutique Showroom:

You'll generally find boutique showrooms in upmarket localities. They are noticeably smaller in size, enough to hold only 2 cars at the most, yet boutiques emphasize on the "experience factor". Plush interiors are the norm here. Touch & feel premium cars, buy accessories & merchandise, be sold on the brands "lifestyle" positioning, have sales discussions in a luxurious environment (upmarket coffee et al).

The advantage of boutique showrooms:

• Enhances brand visibility in the market
• Substantially lowers the cost of rent (and thus, overall operational costs). Ground floor showroom space in Bandra can run as high as Rs. 500 to 750 / sq. ft. per month. Having a massive 10,000 sq. ft. showroom area is impossible for any dealer at such a location. Boutique showrooms occupy barely a 1,000 sq. ft. carpet.
• With commuting times getting longer by the day, potential customers are unwilling to travel to the other end of town. Boutique showrooms allow the brand to go closer to its customers, at a fraction of the cost of running a regular sized dealership.
• Boutique showrooms are not only about selling cars; in fact, they stress on the "brand & lifestyle experience". Skoda's boutique at Bandra focuses on its range of accessories & merchandise. Dippy went & bought a Skoda scale model for his collection

The Cons: Of course, boutique showrooms are more relevant to a manufacturer with luxury aspirations (in this case, Skoda) than an economical mass market brand (like say, Tata). Also, due to the limited space available, it isn't possible to display your entire product range. Typically, a brand will chose its more expensive products (Skoda showcases the Superb & Laura; no Octavia or Fabia to be seen). Such a showroom is perfect for its upcoming Yeti, a product with a "lifestyle" positioning. Then, there's the consideration that luxury car customers expect door service. Which top honcho / businessman walks into a showroom asking for a test-drive? In all probability, its his secretary who calls for the car to his office itself.

Again, the key words here are "visibility" and "presense" in upmarket areas. Is Skoda the first to introduce this concept in India? Not at all. You'll remember the BMW Studio in Delhi (Link to thread). We can fully expect the other premium brands to follow suit (read Mercedes, Audi etc.).

[ghodlur]

This unrequired expenditure from Maruti is totally uncalled for. They already have been established as a brand and have a pan India visibility. Buying properties in posh areas huh - Why cant they rent it, will be far more economical? Instead of this wasted expediture they can utilize the funds to improve the QC process, train the dealers & their staff in areas of courteousness, look at options at expanding workshops in towns where there is only one.

Its ironical that they can spend crores on building brand but wont reduce the prices of models in their kitty. I am surprised that when they are already facing heat from investors from investing in Gujarat why are they on the splurge mode?

[sourabhzen]

Originally Posted by swiftnfurious

If Maruti wants to improve it's brand image, it needs to work on the quality of parts! They can NOT produce tinny rattle boxes and then try to create a premium brand image. I for one, was happy with my Swift's purchase; but would NOT look at Maruti as another option for the current prices & service costs.

Maruti has it's products positioned for the rural folks and that's exactly where they stand & shine today. Just like TATA, all their efforts so far has got them the image of a cheap cost, no non-sense car which is going to take AGES to change.

Maruti is cashing on the 'relativity' with other brands. Maruti, IMO, is relatively a hassle free car to own. I met with an accident with my swift last year. The damages included boot, tail lights and rear bumper. I got my car repared and handed over in four days and had to pay 4k after inssurance. One of my collegue had met with an accident wth exactly similar damages to her Duster. The car is in garage for past one week for want of tail lights. She is promissed the delivery day after tomorrow and she will have to shell out 15k after insurance.

My point is that these rattle boxes will continue to attract customers till other manufacturers reach their level of service. These 'Brand Centres' will prove more dangerous to all manufacturers till they relatively become better service providers than Maruti.

[swiftnfurious]

Originally Posted by sourabhzen

....My point is that these rattle boxes will continue to attract customers till other manufacturers reach their level of service. These 'Brand Centres' will prove more dangerous to all manufacturers till they relatively become better service providers than Maruti.

They already have a strong customer base. I doubt, with the current product line up, they will ever be able to chase customers from the premium competition offerings - whatever they do.

[scopriobharath]

I personally feel this is a waste of time and energy. How Brand image is determined is not by what the buyer thinks but buy how the world sees a brand.

Simple Example - Aria even though is a much better vehicle in terms of features and comfort than a toyota Innova, the average person feels that the Toyota badge is more upmarket and aspirational compared to the "Tata" Badge.

Maruti is perceived to be a middle class brand. The bset example is the selling of far few Kizashi compared to Laura/Superbs. Even though Toyotas and Hondas do not have a brand store, they are perceived much more upmarket brands than the Maruti badge. My personal view is that this is a waste of time and effort. I do not know what might be an effective way to promote a brand, but definetly not a brand center.

There is absolutely no way a Rs 20 lac car customer (Kizashi/Superb/CRV) would walk into a Maruti brand center compared to a Skoda/Honda showroom. Most People do their research well before shelling out that kind of money.

[GTO]

Originally Posted by ghodlur

This unrequired expenditure from Maruti is totally uncalled for. They already have been established as a brand and have a pan India visibility. Buying properties in posh areas huh - Why cant they rent it, will be far more economical?

Maruti has cash reserves of 10,000 crore and growing. It can afford to. Plus, Maruti is shrewd; it will only buy land which has scope for appreciation.

I do think such branding exercises make sense (for reasons highlighted in my earlier post).

Originally Posted by sourabhzen

My point is that these rattle boxes will continue to attract customers till other manufacturers reach their level of service.

Maruti's overall quality has definitely improved. Compare current gen Swift & Dzire to their earlier generations and its obvious.

Originally Posted by scopriobharath

the average person feels that the Toyota badge is more upmarket and aspirational compared to the "Tata" Badge.

Is it so? The Indica & Vista and the Indigo & Manza do outsell the Liva & Etios (respectively). The Innova sells because of its indestructible reputation, but the regular passenger cars have proven that the "T" badge isn't enough to get orders.

Maruti is perceived to be a middle class brand. The bset example is the selling of far few Kizashi compared to Laura/Superbs....There is absolutely no way a Rs 20 lac car customer (Kizashi/Superb/CRV) would walk into a Maruti brand center compared to a Skoda/Honda showroom. Most People do their research well before shelling out that kind of money.

Mahindra is also a middle-class brand. Yet it has managed something no other brand in Indian history has; that is, consistent 3000 - 4000 sales of a 15 lakh product (XUV500).

Maruti's failure in the premium segment is due to poorly positioned, overpriced CBUs. Hyundai faced the same problem until it launched the new Elantra.

[S2!!!]

So one thing I am trying to figure out. If Maruti does intend do set up Brand Centers at upmarket locations how exactly will they be able to boost their image and change the way customers perceive the brand?

I understand that the company will be 'more visible' but visibility was never an issue with the country's best selling automobile brand. If they are going to display engines or AMTs at these places then I doubt they will really attract commoners apart from a handful of curious souls and some auto junkies. If they will display their range of cars at these places then they are just about doing nothing more than just increasing their visibility and/ or recognition.

What IMO seems to be a good idea is display only niche models like the Stingray and introduce a whole range of niche products - eg. Swift Sport, SX4 Cross, etc. and start offering various customizations for these as well as regular vehicles - paintjobs, interiors, performance upgrades, etc. IMO all this shall not only compliment its strong presence in Indian motorsports but also shall change the perception of how we perceive the brand and may evolve to be a brand that connects to the heart as well as the brain.

[hothatchaway]

As a strategy this is not at all surprising, even though only time will tell whether it succeeds. Even in the electronics world many Taiwanese/Korean outfits have refurbished their brand image after decades of being just the OEM suppliers to the premium brands; Samsung is a shining example.

The kind of target audience is important; its not a bad idea IMO to set up a brand touchpoint at lets say a prominent commercial area (not necessarily tony locations like Vittal Malya road for e.g.) and drive footfall among folks who currently own Altos and Santros as their primary vehicle, because for this TA even a decked out Swift with all the bells and whistles is 'aspirational'. (One may see a lot of Swifts on the road but the touch and feel effect on one kitted out in leather and LEDs is an experience)

So it really boils down to what is 'premium' and 'aspirational' for an individual. Even a humble Maruti can have that effect on people, a sizeable chunk at that

[ad3952n]

Originally Posted by mints21

In order to boost its image, Maruti Suzuki will set up brand centres at upmarket locations across India to showcase its products and emerging technology.

These centres would purely engage customers to the new products and modern technology that the company plans to debut in India.

Dear sir, This is a very intelligent step taken by Maruti Suzuki because it's a brand that is holding a large chunk of share in the automotive market in India and has one of the most customer friendly after-sales network.

To further increase their goodwill in the customers (pan-india) they have taken this step. It will not only lead to rise in positive customer relations with the brand but it will also help the present showrooms of Maruti Suzuki too; as whenever a customer shall visit them; he/she will be informed about the latest technical upgrades in advance.

Thanks

AD

[scopriobharath]

Originally Posted by GTO

Is it so? The Indica & Vista and the Indigo & Manza do outsell the Liva & Etios (respectively). The Innova sells because of its indestructible reputation, but the regular passenger cars have proven that the "T" badge isn't enough to get orders.

Mahindra is also a middle-class brand. Yet it has managed something no other brand in Indian history has; that is, consistent 3000 - 4000 sales of a 15 lakh product (XUV500).

Maruti's failure in the premium segment is due to poorly positioned, overpriced CBUs. Hyundai faced the same problem until it launched the new Elantra.

Indica and Indigo are basic segments and not premium segments. The brand image building exercise is mainly for upmarket models and those which are 15-20 lacs+ . They translate to Aria/Kizashi et all. I dont think Brand centre would push Alto/WagonR. They will focus only at 15-20 lacs segment (Kizashi and above).

Instead of launching brand centers, they can do what Elantra did without a hyundai brand center. As metioned by you earlier, the only reason i see is to buy some property across regions. IF there is a proposal to acquire property, it would be rejected by the board. The only way to make them approve the porperty purchase is to give some ideas like this.

[carwatcher]

I was not following this thread and guessed that someone will anyway post the small four letter word linking to this news, but surprised that no one has mentioned it.
Its 'Ciaz', the next most important launch for Maruti as they have no promising product in the 8 Lac plus price range.
Going by the feature list, design, etc. I am sure MSIL would like to offer the maximum 'premiumness' with this Sedan.
So considering all this, I think its the perfect time to do this branding exercise as the target customers for the Sedans has to be Executives who are 35+ with kids. So brand building exercise is not a bad move.
Few people who believe that no one will consider MSIL if he wants to go for premium car shall not forget the success story of Hyundai in US of A. We have a thread discussing the same.
http://www.team-bhp.com/forum/intern...ml#post2747573

Here's one pic of Ciaz with BMW type tail lamps. The tail lamp design is already copied by Honda City as mentioned in the T-BHP reviews, so MSIL has missed out on the novelty factor. But man this car does look premium from any angle. I believe this can do to MSIL in Sedans what Swift did in Hatchbacks, not wrt sales volume but image.

[ad3952n]

Dear Mate, To be very frank, for me as an individual, the definition of an up market brand is not confined to it's sales and infrastructure rather up-market brand is one whose cars can be repaired even at road-side shop.

Originally Posted by scopriobharath

The bset example is the selling of far few Kizashi compared to Laura/Superbs. Even though Toyotas and Hondas do not have a brand store, they are perceived much more upmarket brands than the Maruti badge.

Mate, Tell me one brand which does not have a history of failures. In my view bring any brand into Indian car market and it will fall like a pack of cards when one shall compare it's stats with that of Maruti. Talking about Honda; I as a owner would throw away my City Ivtec because of it's sub standard built quality and terming them as up-market is too good to be true.

OT: Honda cannot take a minor hit from a bike. A big "Zero" in strength.

Talking about Skoda; I guess writing about it here will be a sheer waste of time. The forum is full of horror stories about it.

Originally Posted by scopriobharath

I personally feel this is a waste of time and energy.

Mate, Maruti has earned a reputation for itself by serving the people for decades and in the process it has made itself so strong in financial terms that it can spend on these lavish outlets. Maruti vehicles have been over-booked and I can bet on GTO sir's remark on Maruti's potential as a brand.

Maruti is perceived to be a middle class brand.

Who says so?

Gone are the days when a 800 (ac or non-ac) was the only car one could afford because now the Maruti line-up can give any brand a run for their worth and people pan-India happily own Maruti's different vehicles. Unlike Daewoo whose cars are now mostly found with scrap dealers; Maruti even in worst condition can sell at a better price than any old Italian or German brand.

My above statements are not biased rather I have tried to pacify your thoughts.

Thanks

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