RENAULT KWID'S SUCCESS

I think “there is no secret to SUCCESS. It is the result of preparation, hard work and learning from failure.” And that’s what Renault did, initially when the company came in India it was not that successful but after hardworking for years, learning and understanding the Indian market, company came out with Duster-A big hit in India. Then to target the Mass specially middle class customers who want low budget car they gone through  market research and find out the needs, wants and the requirement of the customers and according to their preference, taste and features Renault finally came out with “KWID”.

HOW RENAULT WAS ABLE TO LAUNCH KWID AT JUST Rs.2.65 LAKHS?

The Indian arm of French car maker Renault decided not to graft the design or components from Abroad when it conceived the Kwid in 2012.The sculpted sides provide a fluid dynamic touch with a rectangular forms of the black wheel arches, further accentuating the Renault kwid SUV breeding. The steeply raked forward position windscreen lends a sense of movement and fluidity to cars high waistline.

The result was in aggressively price car with unmatched localization of about 98% at launch, bookings of 1 lakh cars within 6th months, and a foothold in the highly complex entry segment Indian car market. It brought its SUV-esque Kwid to India, priced at Rs.2.56 lakh. With this impressive pricing, the Kwid will take on established players like Maruti Suzuki and Hyundai in the segment. The Maruti Alto 800 is priced between Rs.2.83 lakh and Rs.3.4 lakh and the Hyundai Eon between Rs.3.09 lakh and Rs.4.22 lakh.

The Renaults Kwid’s mileage is an astounding 25.17 kmpl as per ARAI certification. This makes it the most powerful car in the segment, besting the life of Maruti Alto800 and even the Tata Nano.

Its mileage is not the only thing that’s better than the competition. The car is longer, wider and larger than all other offering in the segment. The small car is very closed segment here you cannot superimposed things from outside that does not work in this Country said Renault India CEO and MD Sumit Sawhney that’s why It took the right cues from the market studies on the kind of car buyers in the entry segment wanted and finally It stayed true to their word of providing a well-equipped small car which performs decently on both city roads and highways at a price that does not destroy buyers bank account. Details such as its fuel economy figure added to its desirability quotient. Thanks to a combination of all these aspects, the Kwid continues to be able to challenge stalwarts of the Indian budget hatchback segment including cars from Maruti, which is something that no other vehicle has been able to do.

The country’s highest selling small car, the Alto, made by Maruti Suzuki has a localization of 98% by the number of components.Renault shortlisted around three to four suppliers in each product category, providing each one with a dedicated team of designers. Likewise, suppliers too had to have dedicated teams of 8-10 people for the project based on the product. Both these teams worked day and night on the specs, the design parameters as well as styling aspects, sometimes for 2-3 weeks, in Chennai. It helped that the liaising Renault-Nissan team smoothly connected with local designers, consulted headquarters and speedily shared responses.

Thus over 400 suppliers were identified to work on kwid and told to deliver components at competitive prices. The Renault Kwid has a ground clearance of 180mm, boot space of 300 litres, the instrument cluster is digital and there is a touchscreen infotainment system with satellite navigation. All these are segment first and Renault hasn’t added to the game, it has just made its own set of rules. The new hatchback is based on the CMF-A platform, which has 98 percent of localization. Renault Kwid hasn’t just stormed the segment but also is the first automaker that is looking to possess as a serious threat to Maruti Suzuki Alto 800.

Thus a large part of the credit for the Kwid’s success goes to the sourcing of local components, because this allows the company to launch the car at Rs.2.65 lakh.

PRODUCT INNOVATION VERSUS PRODUCT IMPROVEMENT

I think Innovation is the WILLINGNESS to try new things and not follow prescribed patterns. More of a mindset then practice. Thus for a Business it is must to innovate new products ,new ideas. The main benefit of Innovation for the Organization is not competitive advantage, but it is Survival. It is a successful conversion of new concepts and knowledge into new products, services, or processes that deliver new customer value in the marketplace.

What is a Product Innovation?

Innovative products are those that replace or build on current offerings, they provide new features or other advantages that allow users to operate more efficiently and/or less expensively. Classic examples include the electric light bulb, the iPod, and GPS navigation systems. These products introduced radically new options for customers that quickly became widely demanded in markets around the globe while generating handsome profits for their producers.

Like When Sony introduced the first Walkman in the late 1970s, they changed the listening music habits of millions of people worldwide and became the industry leader making hundreds of millions of dollars in the process. That was Product Innovation  .

Product innovations include both new products and new uses for existing products.

·         New Product:

These are goods and services that differ in their characteristics or intended uses from products previously produced by the firm.

An example is the first microprocessors and digital cameras are examples of new products using new technologies.

·         New Uses for products:

Under these there are minor changes in the technical specification of a product.

 An example is the introduction of a new detergent using an existing chemical composition that was previously used as an intermediary for coating production only.

What is Product Improvement?

There is a famous saying “Continuous improvement is better than delayed perfection”.  So Companies many times prefer to do improvement in their existing product in order to compete with the competitors. Thus Product Improvement is an adjustment made to an existing product, usually made for greater appeal or functionality. An improvement may include a change to a product’s shape, adding a feature or improving its performance.

For example, the Apple iPhone was revolutionary when it came out, but it’s success was limited to a handful of early adopters. To push the smart phone into the hands of regular people Apple needed to improve their product and make it outstanding. So they improved its performance and speed. Yes, they added features but the iPhone is relatively the same as it was when it was initially released. This isn’t a innovation. This is Product Improvement.

Improvement versus Innovation:

Innovation by definition adds value, and it is probable that a successful innovative solution will be the one that improves the process and/or its output. But innovation and improvement are often referred to in tandem, as “the continuous improvement and innovation team.”

When Sony introduced the first Walkman in the late 1970s, they changed the listening music habits of millions of people worldwide and became the industry leader making hundreds of millions of dollars in the process. That was Product Innovation. But when competitors raced to match with its product by adding features or modifying the product its Product Improvement.

“Not all improvements are innovations, most innovations are improvements, and there are some innovations that are not improvements.”

STP approach and its success recipe

Sofia has just started a new job as a marketing manager in an outlet. She conducts a careful analysis of sales data within the first few weeks, and quickly identifies a profitable opportunity with a particular group of high-value customers.

So, she brainstorms several ideas with her team, and they come up with an exciting new product which has a potential to be a real success for the company.

She has identified a profitable segment of the market, but how has she done this? How can her team members develop a perfect product for these people And how should they communicate  its benefits?

 It is because a smart businessman knows very well that his business can succeed only if it can create true value to its customers. Businesses must use a customer-driven marketing strategy to create the right impression and deliver on the promises made. Marketing is a process of reaching out to consumers to create awareness about the product which eventually sell it. 

So Sofia has an offering and she wants to sell it. In this situation lets see where segmentation, targeting and positioning come into picture.

SEGMENTATION:

In an idealistic way, who is a customer? A customer is a person who expects the best possible product/service in the least possible price.

Lets see it with an example. A customer wants to buy a smart phone. What do I expect? I want Apple company to give me an iPhone 6 at Rs.2999

Ideally what a company wants to do? A company wants to sell a least cost product at a maximum price in order to make huge profit. As the world is not ideal, the consumer would know he won’t get what he expects and will settle for an optimal product for the money he/she has. So in reality what can a company give to a customer? A company can give the best possible product and services in the premium price, value based products for least possible price and the semi-premium products for the intermediate price range. So the company will segregate its customers on the basis of price, on the basis of many parameters including need, demography, usage pattern etc. of the customers which is known as Segmentation.

TARGETING:

A company could offer products or services for one or more than one of the identified segments. So choosing a particular segment out of the available segments to cater is called targeting. Let’s again take the example of smartphone market.  If we take Samsung, it targets all the available segments. In India we could find Samsung smartphone from Rs.5999 to Rs.45000 whereas Apple's offerings starts from Rs.25000. This is a strategic decision an organization makes based on their values, vision and mission. 

POSITIONING:

Positioning is all about creating an impression in the minds of the consumer. It is the way in which the end-user will define your product or service in comparison to your competitors’ offerings. For example, Tide is positioned as a powerful, all-purpose family detergent whereas Apple bee’s positioning strategy is “Eating’ Good in the Neighborhood”. There are several factors that can help companies choose the right positioning strategy such as:

·         Identifying value differences 

·         Choosing competitive advantages

·         Selecting Positioning Strategy 

Thus Businesses with a good plan for segmentation, targeting and positioning have already conquered half the battle of marketing and reaching out to their potential customers. So, if you are looking to launch your business.first take this course to make sure you get a jump start on creating a winning and differentiated business strategy.

"THE QUEST FOR COSTOMER FOCUS"

           "If you focus on your Customer they will take care of your business success."

A Customer is the most important visitor,on business premises.He is not dependent on one business to satisfy his needs or wants,rather in today's world businesses are dependent on customers.He is not an interruption on work,he is the purpose of it.He is not the outsider to the business,he is part of it.Businessmen are not doing him a favor by serving him,even he is doing a favor on them by giving the opportunity to do it.

It takes months to find a Customer and only seconds to lose one.Thus Customer focus is the process of determining customer needs and wants in order to drive the working force behind the company's products or services.In today's scenario Managers in the company must determine key factors about its customers in order to steer its marketing approach.Have you ever wondered how companies decide on how they will reach their consumer target market? Well in my view first they have to determine the demographics of their customers.Who are the consumers? What is their age group? Where do they shop? How do they communicate? Where do they receive their information?Managers identify their target market and create strategies in order to reach those customers.

The example of Customer focus is" Amazon",it is perhaps the most crowded UI on the planet.However no one has done more to bring the power of the community into the grand bazaar of retailing.The first to bring recommendation actively into site,they also bought "review helpfulness".They display not just the rating butth distribution of them.They tell you what the people did with the information as well-did they purchase the item or view other item?They try,pilot and rolloutnew ways to engage,often elevating hte experiencein ways that benefits the customers.

The article "the quest for customer focus" tells that in order to have a progressive development its not just a matter of installing a better CRM system or increase customer satisfaction level,customer focus is very important parameter to focus on. For any company knowing their customer is the prior task or else any big giant could go into dump yard.for example,continental airlines was emerging from bankruptcy because of the lack of customer focus orientation.

In the article, "the quest for customer focus taken from Haward Business Review,author has mentioned about some steps or path that every company should go with.Step -1 is Communal Coordination which covers the part in which a company collects the information about its customer and then organize the information taken from them.step two is the serial coordination in which a company gains  insight into customers from past behavior.companies go beyond just by assembling customer information to drawing influences from it. 

They analyse the information and then pass along their results to users in the business unit,who identify how best to apply it in marketing efforts,building on their knowledge of the local markets.stage three includes symbiotic coordination in which developing an understanding of likely future behavior is done. In this stage company shifts from an analysis of past customer interactions to anticipating,and even shaping the future. And the fourth part is integral coordination which simply is the integral part of all three above parts or stages. Hence these four stages will map a good strategy in which customers are in the limelight. Knowing the customer in a better way.

Saloni Chhabra

SBU-"Strategic Business Units"

For decades of upgrading and improving Marketing Management Research several theories and strategic approaches are being used by business scholars and practitioners to improve the performance of the business being represented.  

As the congestion of business organizations both SME’s and MNC’s around the world are obviously increasing today, revising and innovating marketing structure approaches is needed to meet the demand for each market unique behavior towards the company.  As I study the nature of SBU marketing approach, particular market behavior can be observed and be given concern fitted to the market environment and the direct consumer. 

A Strategic Business Unit is a fully functional and distinct unit of a business that develops its own strategic vision and direction. Within large companies, there are several smaller specialized divisions that work towards specific projects and goals, and we see this organizational setup frequently in global companies. The strategic business unit, often referred to as an SBU, remains an important component of the company and must report back through headquarters about their operational status. Typically, they will operate as an independent organization with a specific focus on target markets and are large enough to maintain internal divisions such as finance, HR, and so forth.

There are many great examples of SBUs that  can relate to. For instance, General Electric has 49 SBUs in such markets as appliances, aerospace, electronics, and so on. LG operates along the same lines, with SBUs competing in electronics and appliances,like It makes refrigerators, washing machines, air-conditioners as well as televisions. These small units are formed as separate SBUs so that revenues, costs as well as profits can be tracked independently. Once a unit is given an SBU status, it can make its own decisions, investments, budgets etc. It will be quick to react when the product market takes a shift or changes start happening before the shift happens.

Another example of SBU is Nestle.Nestle is one of the world's largest food company and has successfully grown and increased its market share since its foundation in 1866. This already indicates that Nestlé's overall strategic posture makes sense given the markets and countries Nestle participates in.Nestle is organized into seven different worldwide strategic business units (SBUs). These have responsibility for high-level strategic decisions and engage in overall strategic business development, including acquisitions and market entry strategy. Parallel to this structure, there is a regional organization that divides the world into five major geographical zones, such as Europe, North America, etc. The regional organizations are responsible for developing regional strategies and assist in the overall strategy development process. However, neither SBU nor regional managers get involved in local operating decisions.It has four different strategic units. One SBU like Maggi deals in Food products, another deals in Dairy products like Nestle milkmaid, the third SBU deals in Chocolate products like Kitkat so on and so forth. Thus, in the above example, it is very simple to change strategy for each business unit because the strategy for each is independent of the other.

Saloni Chhabra

Member of Savior Faire Marketers