Maruti Suzuki is still the most trusted brand in the Indian automotive industry. Pawan Chabra gives an account of its acts...

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One cannot deny the truth that the Indian consumer still trusts the brand Maruti Suzuki more than its counterparts in the country, when it comes to purchasing a new vehicle. In fact, many experts even claim that the positioning of the company in the late 1980s of being a “people’s car-maker” is still helping Maruti Suzuki to drive its sales ahead. But quiz Shashank Srivatava, CGM- Marketing, Maruti Suzuki, on how the company has positioned itself over the years and he says, “Before the economy opened up, it was one era for the Indian automotive industry and so for Maruti Suzuki. But after liberalisation in 1992, the scenario became altogether different for the industry.” However, of late, there has been a visibly dramatic change in the positioning of Maruti, and this has been a vital factor for its success. With the launch of products like Swift, A-star, SX4 and the recent entrant Ritz, the company has shown India and the world that it is even capable of treading down a more aggressive and technologically intensive path. What’s interesting though is the fact that despite this change in the past couple of years, the image of being a people’s car maker is sill associated with the brand. How have these two positioning quotients gelled together to make Maruti Suzuki a valuable brand in India is the question here.

The tag of a people’s car maker is generally considered as a “cheap car maker in India,” says Srivastava. Considering this, the company has rightfully moved away from the same to an extent, keeping in mind the tactics involved in market segmentation game. In fact, Maruti has done a lot, stitching and knitting to stay right atop the Indian automotive industry. From a time, when the consumer could not think beyond an Ambassador or a Fiat brand, the company launched a Maruti 800 which was an instant success in the country. The smooth ride continued with the launch of products like Zen and Esteem. But on the way, the Maruti logo was replaced by the Suzuki logo on the vehicle, “which clearly signified superior technology,” added Srivastava. Moreover, the company also altered its approach when it comes to reaching end-consumers. In the past one year, Maruti Suzuki, took the dotcom route in a big way to stay close to the consumer’s heart and ensured that the company remains the most valuable brand in the Indian automotive industry.

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Source : IIPM Editorial, 2010.

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

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KS Oils Ltd.

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Entry Price: Rs.53
Target Price: Rs.64
EPS: 6.3 (FY10E)
P/E: 8.4 (FY10E)
Time Duration: One year
Rationale: KS Oil’s focus on branded products has enabled it to maintain high margins. Further, the backward integration measures ensure raw material supply. The company is also constantly in the process of expanding its capacity, which is expected to drive its growth going ahead.

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Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.
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And now its 2009…

Sitting tight at his work office in Chennai, C. K. Ranganathan (or CKR as he’s lovingly called by his friends and colleagues) is giving a fair bit of thought to the next big leap for his carefully nourished FMCG gambit CavinKare. In as much, the Rs.700 crore company is poised at a crucial inflection point in its history today. Having already dug its tentacles in regional markets and won the confidence of low-income consumers, CavinKare is now mulling its next step, which includes pan-Indian forays for some of its businesses and even bringing in some SEC A consumers within its fold. Says an enthusiastic CKR, “We are making efforts to be seen across categories. And you’ll see that in another decade, we’ll be an HUL in the making!” CKR ambition is for CavinKare to soon “become a Rs.5,000 crore group.”

It’s not just empty posturing. Peep into his detailed roadmap for achieving that target, and you realise that his ambition is neither inflated nor overrated. CKR believes that the key to CavinKare’s growth is the slew of brands in its kitty, which have a tenacious stranglehold in regional markets, spanning segments like shampoos (Chik, Meera, and Nyle), fairness cream (Fairever), deodorants and talcum powders (Spinz), masalas and ready mixes (Ruchi, Chinni’s), hair colours (Indica) and toilet cleaners (Tex, Topp Mopp). Not only that, he’s also taken his brands in select overseas markets, with a particularly strong presence in Nepal, Bangladesh and Sri Lanka. Today, says CKR, CavinKare boasts a market share of 24% in shampoos, while Fairever has a 7% share in the fairness cream segment. Going forward, it is this strength that CKR hopes to exploit in his growth pursuit. “Most Indian companies simply leverage one parent brand. That is the weakness of Indian companies. They are afraid to create more brands thinking it will cost big money. But look at us, we have dozens of brands and all are growing healthily and we are even able to fund their growth,” explains CKR, adding that the company is now raring to “grow inorganically” and while he refuses to take names yet, he promises we’ll hear about new acquisition plans soon enough.

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Source : IIPM Editorial, 2010.

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

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Fun for you, but they mean business

Ramanathan avers, “We are a company that is totally focused on domestic tourism. That is why we are in a way safe from global recession. Although we lost in the third quarter of last year, we covered it in the fourth quarter by focusing on customers, who have not been affected much by the slowdown like doctors, lawyers et al.” This can be well substantiated from the fact that almost all resorts of the company witnessed an occupancy rate of around 75% last year (69% members and 6% by non members). The company even successfully rolled out is Initial Public offer (IPO) last month for the expansion of some of its resorts and setting up of new projects to support its expansion strategy.

So is it all so good with MHRIL? Well, not exactly. There are few issues encompassing the credibility of the company. And the first one comes from its membership agreement. It is a long service obligation on part of both the company and its customers as the membership duration lasts for as long as 25 years where in the admission fee (60% of the total cost) and the entitlement fee (remaining 40%) needs to be paid on EMI basis. This is not only a burden on the part of the consumers for a quite elongated period, but also an obligation on the company to maintain its resorts for that stated time. The second problem for the company comes from the issue of demand seasonality and dependence on travel industry. Explains an industry analyst from Angel Broking, “The company relies on discretionary spending by consumers, which is a lot vulnerable to economic cycles.”

Meanwhile, in order to expand their portfolio now they are even looking at branding of their Spas, ‘Swastha’, so that it can be extended to cities as well. But how will that be possible when the company does not even have a pan India presence? Well, Ramnathan answers, “Currently we have around 23 resorts, but we have bought land in many parts of the country. Our focus will be to grow in India.” Presently MHRIL has resorts in the west and northern India only. Thus the challenges are humongous, but then that does not stop Ramanathan from dreaming big for his company, at least not at a time when the travel and tourism industry is set to contribute 8% to the Indian GDP.

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Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.
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Why does India matter to HTC?

4Ps B&M: How is the smartphone market in India shaping up and how are you placed in the same?
JT: Well, right now, India is the ideal market to be introducing smartphones in, as the market is growing quite rapidly and there is a strong demand for the phones that enable people to do more than just talking. HTC is a strong player in terms of data capable devices and we believe that the market would keep growing given the fact that 3G would be launched shortly in the country. As a matter of fact, we are quite bullish about the entire APAC region and India is a very important market for us in this region.

4Ps B&M: What are the other devices that would be offered by HTC in the immediate future? Any plans to get the second Android phone in soon?
JT: Well, we are looking at launching many devices that we have in the international market, in India too. You would see some of them shortly. But how many of them would be launched would depend on the market performance and the response our existing devices get. As for the other Android devices, that too would depend upon the response for HTC Magic and the market behaviour.

4Ps B&M: What sets apart HTC devices from all others in the market?
JT: Well, we may not have as many devices as some of our competitors, but we do have a robust portfolio in the segment we operate in and our strength lies in not the number of devices that we offer but the ease of use and innovations that we are able to offer to the end consumers. We don’t believe in packing features, but add things that would be relevant to the customers and make his mobile experience faster or simpler or both.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2009

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

For More IIPM Info, Visit below mentioned IIPM articles.
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