RENAULT KWID CASE STUDY

(CONSUMER BEHAVIOUR & MARKETING STRATEGY)

BY

AKUNURI SAI VISHNU KANTH

ANKUSH DEWALKAR
ARDLY MELBA REENA B
DIPANWITA GHOSH
D RANDHEER KUMAR
KARTHIK P

GROUP 6, PGPMEX APR_A’21

❖ INTRODUCTION:

India’s automotive industry is one of the most competitive industries in the world,
mostly dominated by Maruti Suzuki and Hyundai. Seeing the immense growth of Indian
automobile market, Renault had set up manufacturing unit to emerge as an active
competitor for Indian market.

Source : Data from “Domestic Sales Trends”, Society of Indian Automobile Manufacturers, accessed June 3, 2016

Although five out of seven products failed for Renault, KWID’s success was quite
impressive and it made the then market leaders evaluate their marketing strategy.
Renault India sensed that the preference of Indian consumers was shifting from
functionality and utility to an aesthetically superior automobile. With the introduction
of KWID, Renault India challenged the market giants with a superior design, well-
appointed interiors, a sporty instrument panel, better ride height and a first-in-class
media navigation system.

Being a foreign brand, Renault’s first challenge was to develop an indigenous supply
chain for entry level car segment. They accounted the price sensitivity factor of Indian
customers and explored options to make KWID fuel efficient. Also, after the initial
success of KWID, Renault had to maintain the momentum with perfect marketing
strategy. Competing with giants like Maruti Suzuki and Hyundai, Renault had to
optimize the marketing mix to build KWID a desirable entry level passenger car for
Indian consumers.

❖ CUSTOMER INSIGHTS:

In Indian passenger car industry, the hatchback segment accounted for more than
50% of the industry. The entry level segment was usually the source of excitement and
KWID added spark in that segment despite the presence of other established market
leaders.
 With approximately 97% of indigenous companies, India’s automotive industry had
become one of the most competitive industries in the world. Moderate interest rates and
low fuel prices made passenger car market customer friendly.

First time car owners found KWID to be a very lucrative product for its dynamic
performance, aesthetics, high mileage and aggressive pricing. The entry-level segment
was also bound to grow as two wheeler owners aspired to upgrade and Renault captured
this segment successfully instead of competing with two-wheelers like TATA Nano did.

The entry level segment was forecasted to grow from 12 vehicles per 1000 people in
2010 to 72 cars per 1000 people in 2025. All the market players were interested to tap
this opportunity by introducing new and innovative products.

The increased affinity of Indian market towards Renault KWID can be observed in the
below trend –

Sources : “Renault Kwid Sales Figures”, accessed in Oct 2016; “Maruti Suzuki Alto 800 Sales Figures”, accessed in Oct 2016;
“Hyundai EON Sales Figures”, accessed in 2016

❖ INTEGRATED MARKETING MIX:

To sustain the initial success and meet the sales targets, Renault went all in to
develop a robust and consumer friendly marketing strategy which will delight the
customers while considering KWID as their owned car.

• Product
As the KWID was designed to compete against the more expensive vehicles in
same class, the marketers emphasised on building a vehicle which is robust and easy
to use.
Additionally, they groomed the product with high quality of features like a
seven-inch infotainment system, Bluetooth connectivity, genuine interior trim, best-
in-class ground clearance and aggressive SUV-style body design.
 With 25.17 KM per litre, KWID claimed to be the most “Fuel Efficient” car in
India.

The prior success of Renault Duster made the French brand familiar with
Indian consumers. Renault encashed the brand image it gained from Duster to
establish KWID.

• Price

Renault studied the pricing of their competitors in detail and came up with a
value based pricing for KWID. The marketers knew that they have a price ceiling for
entry level car and they ensured that they don’t cross it while providing a variety of
features.

With the aggressive pricing (Rs. 262,000), marketers tried to push KWID to
reach many more consumers and establish a foothold in the entry level segment.

• Place

Aligning with the government reforms, Renault marked its presence in India
in alliance with Nissan and built a new manufacturing plant in Chennai with a
capacity of producing 400,000 cars per year. Later, they increased the production
capacity by 50 per cent to reduce the waiting period.

As the demand for KWID was rising in the market, Renault drastically
increased the number of dealers and service centres from 14 to 255 in the country.

This localization of supply chain helped KWID to innovate and supply

components and parts at competitive prices.

• Promotion

Promotion of any brand is a vital part of marketing strategy as it speaks what

the brand stands for. For KWID, marketers pointed out the tagline “Live for More”
and made multiple innovation to support that statement.

The bookings for KWID were taken with the Virtual Showroom and Mobile
App, which were quite innovative at that time. Customer engagements took a new
level with these developments.

To increase KWID’s visibility and grab consumer’s attention, the brand

started promotions in airports by hanging a replica of car from the roof.
❖ CONCLUSION:

Execution of all the above strategies was successful as we can see that KWID
caused a disruption in the entry level passenger car segment. This segment was known
as “Red Ocean” and it was not very easy to introduce a new product from a less
familiar brand in this category. With the launch of the Renault KWID, Renault India
registered a growth of 160 per cent in domestic sales in December 2015.

With quality and affordable design, accessories and spare parts, KWID forced the
market leaders to analyse their success and plan a strong response to the success of
Renault KWID.

No. of Units sold in the year 2015-2016, Source : Economictimes.com, top gear

❖ LEARNINGS:
One of the key learnings was how Renault managed to penetrate the entry
level market segment. Before the launch of KWID, consumers had to choose from
affordability, attractiveness and innovativeness. Renault noticed this space and offered
KWID which had all three factors and delighted the consumers.

Also, KWID’s success teaches us that market evolves with time and
established players have to keep on innovating new products to keep their brand
relevant. Otherwise by adopting a perfect marketing mix strategy and studying
customer’s requirements thoroughly, a new brand can cause disruption in the market.