Renualt-Kwid Case study

Q1. Examine the shifting customer insights in the Indian automotive market as described in
the case study which formed the basis of Renault Kwid’s success. Also, describe Renault
Kwid’s Marketing Mix strategy.

Introduction

Indian automobile sector is booming with the help of foreign investments. Between the periods
of April 2000 to December 2015, Indian automotive sector attracted FDI of USD 14.2 Billion.
Many global players such as Ford (introduced its iconic mustang), Nissan Motors (planned to
introduced electric and hybrid engine technologies) and General Motors wants to invest USD 1
billion by 2020 and many of the airbag suppliers such as Autoliv and takata corporation had
invested in India’s automotive sector. The government of India decides to make the automotive
sector as a cornerstone of its make in India policy and they set up a separate department under
Ministry of Shipping and Road transport and Highways. Maruti Suzuki predicted that
automotive industry would contribute more than 12% to India’s GDP.

Shift in the Customer Insights:

Renault KWID comes in the A2 segment of automobile and within A2 segment it had lot of
competitors. Before the introduction of Renault Kwid, Maruti Suzuki 800, Alto K10 and
Hyundai’s Santro and i10 was the top selling cars in the segment of entry level cars. Indian
market is a Red Ocean for entry level cars.

After the success of Duster an upper end SUV, Renault India sensed that Indian customers were
moving away from mere functionality and utility to demand an aesthetically superior
automobile in the entry level. When the duster was launched it was with a huge understanding
of the “image hungry Indians”.

Segmentation: Renault finds that huge number of Indian middle class and Aspirational two-
wheeler owners looking for upgradation. Income group of youngsters is looking for cars with
good design to showcase their social status. Renault Kwid was launched to this segment of
customers on 2015.

Targeting: The target customers of Kwid are from Tier I, Tier II and smaller towns. They are first
time car buyers and concerned over the mileage.
Positioning: The Renault positioned itself as a SUV style hatchback high end car along with the
new gadgets and with minimum price than most of the players in the same segment and also
with low maintenance expenses.

However, Renault India caught its share of this segment by targeting customers with following
marketing mix:

Product – It has Elite Design, Superior Features, Best in class ground clearance Services, Quality
interiors than its competitors.

Price – It offers the car in competitively low price rate with the help of appointing vendors
within the local region. Also, it is most fuel economical cars available in the market. Fuel is the
big concern for Indians

Promotion –Renault India hanged a replica of Renault kwid from the roof of Mumbai airport.
Also, advertising through means of Television, Newspapers etc. Consumers will not buy
products unless large scale selling, and promotion effort is done. Even the promotion will be
done by customer by word of mouth which will have strong impact in a positive way.

Place - Available in almost all well-developed cities and even in towns. Customer need not go to
longer distances to buy the product. It has launched virtual stores and Mobile apps which
makes customers to buy it with one click. It terms of distribution it has 210 service centers and
by 2017 they planned to increase 60 more service centers.

Disrupting the Market of Competitors:

With all this Marketing strategy Renault surpassed the number of cars sold by Hyundai in the
year of September 2015 to April 2016 and was only behind the Maruti Suzuki.
The percentage of growth in terms of sales of Renault Kwid is given below:
70
60
50
Renault Kwid
40
MS Alto
30
Hyundai Eon
20 Tata Nanu GenX
10 Datsun Go
0

In Renault’s product portfolio, we have total of seven variants out of which we have five misses
(Fluence, Koleos, Pulse, Sunny, Scala) and two hits (Duster and KWID). Why there are many
misses and what would have gone wrong there? It might be due to marketer was not able to
get what exactly consumer needs or at least what are most necessary and/or, targeting
problem and/or marketing mix might have gone wrong where pricing would be higher or
features not satisfying, design does not looks satisfying etc.

We can have the same mapped in BCG matrix as well as below for the 7 variants.

BCG Matrix of Renault Products: According to us, below are the classification of products and a
long term strategy, to help a business consider growth opportunities in any market where to
invest and also discontinue developing the products.

Star – Duster ?– Pulse, Scala, Lodgy

Cash Cow – KWID Dog - Fluence ,Keleos

The Renault KWID Hatchback Model’s Market SWOT analysis:

Design, Organization has Maintaining good Customer loyalty is

Performance, little market vendor a question even if
Feature rich, presence or relationships. he/she is happy
mielage, Pricing reputation with product i.e
compared to the retaining of
gaints like customers.
Maruti/Hyundai.
Localization which Still has to get more It’s a good Should be able to
will help in having into consumer's opportunity for the survive with its
maintance at low minds with respect organization as competitor gaints
cost to branding, services KWID was a success like
like how Maruti and a marketer Maruti/Hyundai.
does. would now have in Thought KWID was
mind what a success, but we
consumers have 5 misses
expectations are before getting a
and can prepare big hit.
plan for next
product accordingly.

Giving good services

and keeping
customer satisfied.
Upgradation,
getting different
versions is done
 quickly.

Keeping customer
engaged with
Renault KWID
mobile app.
Increased
production capacity
per year.

Conclusion:

Indian automotive market segments are booming, based on that many global players are
attracted towards India. Companies such as Maruti Suzuki and Hyundai should Re-analyze their
segmenting, targeting and positioning policies and marketing mix strategy and work on it
before Renault steels their current market share. Renault also needs to look and analyze its
market and do more SWOT analysis and BCG matrix to protect its market share from other new
market entrants.