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Take Maruti Suzuki: The now wholly-owned Japanese brand, it seems, changed gears just in time to survive and thrive despite the slowdown. Though not completely unaffected by the slowdown (the market leader posted a decrease in sales for all three months in the last quarter), in January 2009, Maruti Suzuki bucked the trend and reported a 5.59% increase in domestic sales. A closer look at their figures reveal that their recent additions to the A3 segment (D’zire and SX4) is what is making the numbers look so cool. The segment saw a two-fold growth, selling 6,590 units (even higher than their cash cow Maruti 800) as against 2,939 units in the same month last year.

But managing their brand portfolio well is not Maruti’s only claim to the marketing fame. Over the last quarter of stagnating sales, the motor company went on an overdrive to enhance its market penetration. For one, instead of restricting its annual dealer level discount scheme till the end of December (as it does every year to clear year-end sales), Maruti extended the lucrative cash discounts way into February; next up is their strategic tie-up with Corporation Bank to finance Maruti Suzuki vehicles on an all India basis to enable credit access at a time when banks are antsy about lending too easily; and finally, proactively embracing the ‘voluntary disclosure of fuel economy’ to drive home the message to consumers about their leadership in making highly fuel efficient cars. As per Shinzo Nakanishi, MD & CEO, Maruti Suzuki India Limited, the move “would enable customers to make an informed choice when purchasing a car in the market.” Look closely and you realise that all these measures were perhaps aimed at luring those 40 million PSU guys, presently flush with funds they made from the 6th Pay Commission killing. “The recent pay hikes and arrears given to more than 5 million government employees after implementation of 6th Pay Commission report can bring back the lost momentum in the industry,” says Shushmul Maheshwari, CEO, RNCOS.

What did the guys at Maruti do? They revitalised their brand despite and in spite of the slowdown by simply emphasising its core brand proposition – value for money, fuel efficient cars – and increasing its value!

What? You think that was a fluke? Okay, here’s another one!

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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