The most visible part of this evolution was the 'Nexa' showrooms. The premium aspect here was not limited to the luxurious interiors that greeted the customer but went beyond the tangibles to enhance customer service.
Image: Ravi Choudhary/Hindustan Times via Getty Images
Value for money, stylish, nostalgic-youthful, trustworthy-innovative—almost a collection of opposites, isn't it? Branding 101 says that to leave a lasting impact on the consumer, brands must uniquely associate with one adjective, emotion, promise, and state of mind—one identity. Coca-Cola stands for happiness, Dove for real beauty, Domino's promises fast delivery, and Paperboat hinges on nostalgia—one brand, one idea. It is well documented that brands trying to be all and do all fail to excel at even one thing. But what if we told you these sets of antonyms represent one single brand, the market leader Maruti? To understand this better, let's peel the layers of this peculiar phenomenon and begin by understanding the need for this recast. Subsequently, we will dig deeper,¬ and trace three pivotal and path-breaking initiatives Maruti undertook to bring its journey to fruition.
A Call for Reinvention
From 2012 to 2018, every other car priced below ₹10 lakh carried the Maruti logo. However, as customer behaviour, preferences, and expectations underwent a pronounced change, pivoting became necessary for the company's continued growth. Adapted from Mr. Arun Kumar Kaushik and Ms. Geetha Mohan's Article on Maruti Nexa Based on a 2016 article in Economic Times and a 2015 EY report
Based on article in ET Auto
While the Fords and Chevrolets of the world resisted the changing times, Maruti understood the need for a turnaround. To maintain its market share, Maruti wasted no time in repositioning itself. They kept their place as the people's car while making their presence felt in the aspirational segment. Maruti adopted a three-pronged strategy centred on partnerships, reimagined communication, and the 'Nexa Experience' to tackle this change.
Maruti inked tie-ups to enhance different facets of their offerings. Their partnership with Toyota provided a touch of 'premiumness', coupled with the latest technology, which was evident in their uplifted designs. They moved from the simple and safe designs of Esteem, Alto, and Zen to various chic and spunky models that talked to the country's youth. The association with IDFC Bank enabled them to offer ready financing options and provided the customers with a smoother purchasing experience.
1. Partnerships:2. Reimagined communication:
Maruti understood that it was talking to a new Indian, and the tone and style of their communication needed to reflect that. Therefore, their ads no longer depicted a typical Indian middle-class family, emulating reliance, safety, and value for money. The cars were now driven by millennials aspiring for an exciting life aided by a cool ride and accompanied by a foot-tapping background score.3. The 'Nexa Experience':
The most visible part of this evolution was the 'Nexa' showrooms. The premium aspect here was not limited to the luxurious interiors that greeted the customer but went beyond the tangibles to enhance customer service. This experience was such a crucial peg in their strategy that 'Nexa' became the first automobile sales channel in the country to have its own advertisement.Also read: Maruti Suzuki—the common man's carmaker—might be dead. Long live the new Maruti Suzuki
The present-day offerings of Maruti emulate the culmination of this strategy. The brand, once identified with mileage (Our favourite phrase, kitna deti hai?), affordable vehicles, good resale value, and cheap and readily available spare parts, is now emulating the ideas of boldness, style, and class. The old 'Gypsy' has been re-modelled as the feisty 'Jimny' (base model priced at ₹12.75 lakh, ex-showroom, Delhi). 'Invicto', their most expensive car, breaching the ₹25 lakh mark, has announced Maruti's arrival into the luxury segment.
To test out the impact of Maruti's changing strategy and messaging, we conducted a blind test where we circulated a survey after blurring out the brand-specific portions of a Nexa commercial. People from different walks of life and at different stages in their lives —entrepreneurs, MBA students, professors, old and young —everyone's responses were baked in. Since almost 90 percent of the respondents had not previously seen the advert presented during the survey, the likelihood of any biases or preconceived notions creeping in was minuscule. Someone at the Maruti headquarters would have been all smiles to hear our findings. Based on the advertisement, 77 percent of the participants categorised the brand as aspirational and more than 50 percent of people estimated the price of the cars to be beyond the ₹15 lakh price bracket.
A Maruti car is no longer limited to being the Indian family's first foray into the coveted world of four-wheelers. Instead, middle-class Indians pridefully own a Baleno and aspire to own a Grand Vitara one day. 35-40-year-olds are inclined to consider an XL6 or a Ciaz to indicate their transition into the next social strata. Maruti is making inroads in the Indian upmarket and doesn't seem to be hitting the breaks anytime soon. As Maruti marches on, let us venture ahead and try to glimpse into the future of Maruti.
The Future Awaits
Gatekeepers of the future are usually the sceptics. It can be argued that even though Maruti's journey seems smooth now, this path may lead them to the same fate suffered by many others in the automobile sector—neither commanding a significant share of the sub ₹10 lakh category nor being viewed as a viable option in the luxury car segment. However, we would like to hypothesise the opposite.
Maruti has showcased great skill in its brand reinvention journey and seems to understand that this process is continuous. They are only looking to play a catch-up game for a while and hold the potential to sprout as the unexpected threat in the luxury segment. Their malleability, acceptance and nimbleness are evident in their perfect balance between aspiration, function, and value, curated for the Indian consumer.
Recently, they have upped their game by rolling out hybrid car options, and their share in the much-touted SUV segment is close to the halfway mark. They have also laid a renewed focus on passenger safety, something the previous generation neither cared for nor expected of Maruti.
The car construction and furnishing, enigmatic unveilings at auto expos, and customer experience are just the tip of the iceberg. The change goes deeper. The naming department at Maruti seems to have their brief down to the T as well. Names like Brezza, Vitara, Fronx, and Jimny exude the peppiness of the young India. The chic sonic identity that accompanies every Nexa commercial is impossible to miss. Maruti already runs fully automated service centres where pre-booking/service reports are all available on the app, cars are identified by their RFIDs, and dedicated service bays attend to each vehicle.
All these endeavours show they have set an explicit goal and are marching towards it with full gusto. It is neither leaving its stronghold on the entry-level market nor shying away from being compared to the likes of Volkswagen, MG, or KIA. They have no qualms about being seen as an upmarket brand until they are aspirational for the first-time owner and a buyer looking for thrill and excitement. Abiding by Earl Nightingale's famous quote, "People with goals succeed because they know where they are going", the sales team at Maruti would be picturing a future where people organically walk into a Nexa dealership right after coming out of a Skoda showroom. Also read: How Maruti Suzuki is gearing up to win back its lost SUV market
Lessons On Offer
A peek into Maruti's past, present, and future paints a rosy picture of a smooth transition in a usually complicated upmarket repositioning saga. Reinventing and repositioning a legacy brand is always a tough nut to crack. This task becomes even more arduous when one aims to move up the ladder instead of going the other way. Thus, instead of only marvelling at this turnaround, let us unravel its lessons in the store for other brands. 1. Customer Awareness:
Maruti has always emulated their customers' needs, wants, and aspirations. In the 1980s, they knew that the average Indian was looking for a no-frills and cheap mode of transportation, which was aptly reflected in the models they rolled out. Maruti conducted an internal customer survey in 2003 to catch the shift in customers' aspirations. Based on the responses, they began importing Suzuki models such as 'Grand Vitara' from Japan in 2007. A sharp and snazzy Kizashi was rolled out with much fanfare in 2011. While these models failed to make a mark, as the abrupt shift to premium was not well-received by the consumer, Maruti knew that the customer requirements were shifting. 2. Covering all touchpoints:
They were ready to go the full distance with this metamorphosis rather than only working on the veneer. This was reflected in their renewed approach towards sales. The shoddy buying experience was given a facelift by overhauling the salesperson's attitude and attire and coaching the front-facing Maruti employees to hone their courtesy, politeness, and friendliness skills. The 'Nexa' experience, the introduction of automated manual transmissions, being the first to introduce Apple CarPlay and the changing protagonists of their commercials, every single aspect of the brand endorsed this shift.3. Staying true to the roots:
Maruti ensured the repositioning was embedded in its brand ethos. Instead of foregoing values people recognised and appreciated them for, Maruti stood by those propositions firmly. Thus, it always retained its traditional customer base while adding new members. While most brands fall short of catering to a varied customer segment, Maruti was able to put on a balancing act and walk the tightrope in a price-sensitive market such as India. Strict adherence to these best practices ensured everyone viewed evolution as an organic development rather than a significant departure from the past.
Amidst all the repositioning and revamping, Maruti's habit of setting precedents has remained constant. Once the benchmark for functional automobiles in India, it is laying down the steps for brands that intend to move from 'mass' to 'aspirational'.
Thus, in its journey for success, Maruti abided by a simple framework—customer sensing, capability building, and delivering on the capability. It still had the cars with the best on-road mileage, handsome resale value, affordable and accessible servicing, and reliability, but now it was also stylish, bold, aspirational, and innovative. Being in touch with the wants and needs of their customers, Maruti has successfully found harmony in their duality—staying connected to their roots as they open the doors to new markets and innovations. Apaar Singhal (PGP student at ISB), Professor Saumya Sindhwani (Faculty in the area of Strategy and Organisational Behaviour, and Associate Dean at ISB)
[This article has been reproduced with permission from the Indian School of Business, India]