Head of Marketing | 28 Jun 2006
We have constantly upgraded our approach. From a production driven organisation, we have become a marketing driven company. Also, our focus is on customers. Customer is the god. We believe in customer services. Secondly, for any brand, we have always identified a target market and categorising a particular brand has always helped. We offer good after-sales service and maintain feedbacks. Also, we stress on rural marketing as 50 per cent of the potential car market is in rural India.
There are very few brands that symbolise the common man’s empowerment. Maruti Udyog Ltd (MUL), which will celebrate its Silver Jubilee in two years’ time, represents a brand that many Indians swear by. With good reason too – MUL has made it possible for Indians to own an affordable high-technology car.
The man leading Maruti’s marketing initiatives is Mayank Pareek, who has 15 years of experience in the automobile sector. He joined MUL in 1991 as a sales representative, took care of the all-India dealer network, and is now MUL’s Head of Marketing. This management graduate from IIM-Bangalore attributes Maruti’s acceptance to the way the company has taken care of customer preferences. For the last six years, Maruti has been leading in the JD Power Customer Satisfaction Survey.
A perfectionist who swears by his customers, Pareek is also an avid golf player. In conversation withAmrita Talwar, Pareek talks about Maruti’s journey that has made it India’s No. 1 carmaker. Excerpts:
Q. What does brand Maruti signify?
Brand Maruti means reliability, flexibility, trust and fun. It is an Indian icon, as many Indians had their first motoring experience in it. We put the nation on the wheel. People have faith in it and it’s etched into the nation’s psyche. We have transformed from being a sales-driven organisation to a totally customer-centric organisation. The secret of our success is our customers.
Q. Can your recount the evolution of brand Maruti?
MUL has undergone four key phases – first in 1983 when the car was launched, then the early 80s when we indigenised the car by making the components in India, the pre-90s when the car industry opened up, and the post-90s, the most important period, as other car players entered the market significantly. In 1983, when we launched Maruti 800, the Indian car market had stagnated at a total volume of 35,000 cars a year. There were only two competitors – Fiat and Ambassaddor, both had high maintenance cost.
Our car looked good, was light and had new technology. Moreover, it was a fuel-efficient car. We sold 50,000 units in the first year. We had set up the production capacity for two lakh cars. People criticised us saying that we will not manage to sell so many cars. But today we produce half of all the cars made in India.
As Maruti 800 gained importance, we upgraded the engine and introduced a 1000 cc engine car, Esteem, as well as the Gypsy. We went on introducing a new model every year. We constantly set new benchmarks in quality, production, and cost, and laid the foundation for other car players to enter this market. From a monopolistic era we broke into a competent market. Maruti also holds the distinction of being the first Indian car to be exported to Europe and South America.
Q. From the branding point of view, why do models like Baleno and Swift sport Suzuki’s logo, whereas models like 800 and Esteem have the Maruti logo?
Branding has got nothing to do with the logo. We swear by the ‘M’, that is, Maruti. It’s just that Suzuki launched Baleno and Swift globally and in India on the same day. That is why the ‘S’ logo was used. But the products that are launched exclusively in India have the M sign. M is the core of our existence.
Q. How many advertising agencies does MUL work with? How do you allocate campaigns among them?
Currently, MUL advertises through four agencies – Lowe, O&M, Capital and Hakuhodo Percept. The set of brands are fixed for each agency. While hiring the agency, we make sure that MUL is the only car brand which the agency is promoting. These four agencies have been with us for a long time and we provide them with ample work. We have divided our work so that duplication doesn’t happen. There are no specific parameters
Q. With the constant hike in petrol prices, would you be venturing into diesel cars?
Diesel is a cheaper fuel and diesel cars account for one-fifth of the Indian car market. To keep up with the competition, we are launching a new diesel car with a capacity of 1.2 litre by the yearend. But as far as launches are concerned, we will have a new model every year.
Q. Alto was launched as a ‘vacation’ car, while WagonR was placed as the ‘choice of new India’. Would it not restrict sales if you brand a car with a theme?
Yes, I agree that by labelling a car, we reduce its potential. But this is a marketing and production era. Markets have evolved. You have to create new niche segments. One cannot be everything to everyone. You have to sport a label. It’s like running a specialised restaurant serving authentic Japanese, Chinese or Continental cuisine. If you offer everything to everyone, nobody will come. If we don’t label it, the product will end up not being anything to anyone. Also, multi-branding strategy keeps a check on monopoly.
Q. How do you position a brand?
We believe in research. Today, Maruti is the car leader in India because of its research team. Before launching a brand, our team does an extensive research on the needs of the customer; we follow the trends in the market and follow the suggestions made by our existing customers. We try understanding the customers’ demography and psychology. Once the research is done, our brand team tries to come out with a design, test runs are done, following which we again take feedback from the customer and corrections are made. Only then is the product ready.
Q. Is there any clash between the various Maruti brands?
Labeling and positioning a brand for a certain segment helps all the brands to survive. And the brand fight is minimised. Multi-brand strategy is always successful.
Q. Both Maruti 800 and Alto are entry-level cars. Would you phase out the Maruti 800?
India has a large middle class. No, we are not phasing out any of our brands. As one of the lowest priced cars in the world, Maruti 800 has been India’s largest selling model for nearly two decades. It has survived the severest of Indian terrain and is still the bread and butter brand of MUL. Both Alto and Maruti are entry-level cars and would continue to be so. There would be no change in their positioning. Also, Maruti 800 is a day-to-day car, while Alto is the vacation car.
In fact, it is Maruti 800 which set the stage for other cars – Zen, Alto, WagonR, Esteem and so on.
Q. But the sales reports are not too positive – from a market share of 51 per cent, Maruti 800 has come down to 21 per cent…
Sales figures are not a true representation of a brand’s image, they keep going up and down.
Q. MUL had decided to withdraw the popular Zen from the market? Why?
No, we are not withdrawing Zen from the market. We have just temporarily withdrawn the car from the market. We are coming out with a new look Zen with a better design.
Q. Maruti Swift seems to be quite a rage despite competition in its category from the Hyundai Getz? Can you explain its positioning?
More than positioning, the brand Swift speaks for itself. It’s a better car in terms of technology and has the appeal of a very cool and smooth brand. It displays Maruti’s engineering competence. Swift is a successful venture because of its outdoor media campaign. We created 500 innovative displays of Swift spread all over India. For a brand to be successful, you have to capture the imagination of a consumer and be in his shoes to know his likes and dislikes; we did it with Swift. It not only has an eye-catching appeal, but we also presented it as the dream of a consumer. In Delhi, we displayed cardboard models of Swift at the busy Rajiv Chowk and the ITO crossing. The quality of plastic, steering wheel, fabrics, controls and instruments are good and feel classy. It has a more driver-centric interior with good headroom. It has a futuristic look.
Q. What are the current trends in pricing?
Prices have come down by 1.5 per cent, but if the input costs on account of steel, plastic, diesel, excise and custom duties go up, chances are that there would be a hike in car prices.
Q. MUL has remained the Goliath in the car market for a quarter of a century. How do you explain this?
We have constantly upgraded our approach. From a production driven organisation, we have become a marketing driven company. Also, our focus is on customers. Customer is the god. We believe in customer services. Secondly, for any brand, we have always identified a target market and categorising a particular brand has always helped. We offer good after-sales service and maintain feedbacks. Also, we stress on rural marketing as 50 per cent of the potential car market is in rural India. We go with our floats – trucks carrying our models – in rural areas and organise rural melas. Farmers have a lot of money, but are not confident enough of walking into a showroom. We introduce our various financial schemes at these melas and ensure healthy sales of our cars.
The same goes for government employees. They have good income levels and financing schemes, but are not well-informed about them. We educate them by holding workshops. Similarly, we have special schemes for teachers. We try to create the need for a car in the market. It is not true that consumers in these segments don’t need a car.
Q. What are your marketing tools?
Cyber media is a big help. We display our banners on various Internet sites. Now, with the boom in malls and cineplexes, marketing has become easy. Also, one of our most important marketing tools is our dealers and Maruti service providers. A dealer is an interface between Maruti and the customer, he is the true face of the company. Our dealer should have good financial capabilities, good ambience and a good business track record. We, in return, brand the dealership and give our corporate signage. We also have various schemes for people like Maruti Financial Ltd, Maruti Countrywide and tie-ups with banks like SBI, HDFC and ICICI.