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Thursday, March 04, 2010

Zen-Next. No more!

Dropping a successful 17 year-old brand isn’t an easy task... Pawan Chabra questions whether Maruti is doing the right thing by killing the Zen!

“Zen is a brand which I have grown up with and it is more than a car to me,” asserts Ankush Kohli who drove the ‘Jellybean’ Zen for a decade, and has been associated with the Maruti Zen brand since then. (He even purchased the ‘Teardrop’ Zen Estilo for his wife in 2008.) But then, only change is evitable; for many like Kohli today, the fact is that the Zen brand no longer remains ‘the’ banner brand for Maruti Suzuki (even he drives a Maruti Swift today). And as far as the management was concerned, it was all made clear with the launch of the new Estilo in August 2009, during which, Maruti declared that the company would now promote the Estilo brand and Zen will only be engraved accompanying the Estilo tag – in other words, reduced to a ‘dormant’ brand!

There is no questioning the fact that the Zen has been one of the cash cows for Maruti in the Indian market. The company sold a mind-boggling 7,60,000 units of the ‘Jellybean’ Zen in 14 years (before it was replaced with the ‘Teardrop’ Zen Estilo in 2006) – no mean feat by any standards. But it was perhaps after the advent of the ‘Johnny-come-lately’s’ that the Zen took a beating. The launch of the tall boyish Hyundai Santro and WagonR pushed back the sales of the Zen, which had started to fall faster than anticipated by most critics. That set all minds at Maruti working towards a replacement model. In fact, the nation’s largest automaker also spent a considerable time in building-up the WagonR brand in the Indian automotive market, all at a time when the Zen was being cannibalised, witnessing falling sales, quarter after quarter. But the new ‘Teardrop’ version of the Zen was able to somehow successfully make a mark for itself in the Indian market as Shashank Srivastava, Chief General Manager – Marketing, Maruti Suzuki affirms, “It was selling on an average of 3,000 units per month, which was more than GM’s Spark sales which accounts for its 80% of GM’s sales in the country...” One can always argue that it is still lower than the standards set by the entry level Alto and the youthful A-star, but the numbers are credible when it comes to reviving the brand and the product Zen, especially when it had almost reached the plateau of the Brand Life Cycle. Today, the automaker, which replaced the Maruti logo with a Suzuki logo some time back (to give its customers the feel of its ‘realigned superior technology and radical design’ focus), is quite pleased with the performance of the Zen Estilo during the initial months of its introduction. All said and done, the question remains – does it make sense to phase out over time (which is a definite possibility) a brand (Zen), which is today amongst the most recalled brands in the automotive sphere and has had a splendid run in the Indian market?

To establish Estilo brand in the Indian automotive market, the company is using the brand alone in its 360 degree integrated marketing campaign. “It was a part of the long-term plan to establish the Estilo brand first in the Indian market with the launch of the Zen Estilo and eventually take the Zen brand out of the umbrella,” explains Mayank Pareek, Managing Executive – Sales & Marketing, Maruti Suzuki. But ask Srivastava and you’ll see the management philosophy being shot in another direction as he claims, “The Zen Estilo was totally different from the old Zen, and is therefore today one of the most interesting marketing case studies as the Zen Estilo didn’t match the Zen brand one bit.” However, Srivastava takes no time in further disclosing that the seeds for phasing out the Zen brand was sown on the basis of customer feedback and the confusion in positioning of the vehicle ignited the fire. “We initially planned to position Zen Estilo as a synonym for style but with the use of a female model in our communication and some feminine colours, the Zen Estilo was perceived a vehicle made for girls and hence we missed out on many consumers,” he said. However, as mentioned earlier, for now, the company has no intentions to kill the Zen brand completely; of course, they don’t mind its dormancy...as “the Zen brand is one of the most reputed and recalled in the industry, and has a huge set of loyal consumers for whom Zen is more than a car,” adds Srivastava.

Yes, critics argue that eight products in the A2 (hatchback) category may just create cannibalism within the Maruti umbrella, but the management discards all such fears; one of whom is Shinzo Nakanishi, Managing Director, Maruti Suzuki, who avers, “Maruti Suzuki has been very successful in drawing segments within the A2 segment and this is the way the industry will drive the growth forward taking it to the other segments as well.” Well, the management seems very clear on the positioning there... But just a thought – what if the A-star had that Zen tag on it? Wouldn’t it have worked just fine? “Values of the Zen brand were matching more with the A-Star but we had just launched the Zen Estilo around 4-5 months earlier. So the A-star became an altogether different brand. But you never know, it may have repeated the success if the Zen brand had been used with the A-star,” opines an optimistic Srivastava.

Optimistic indeed, but isn’t it also a fact that the Indian consumers seem to lap up everything that bears the ‘Maruti’ tag? Pray, don’t drop that...

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

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