IMPACT OF RENUALT - KWID

ON INDIAN AUTOMOTIVE INDUSTRY

SUBMITTED BY:
GROUP – 5
1. ASWATHY MOHAN
2. CATHERINE SHIRLEY KARENA.M
3. GANGISETTY V N UPENDRA
4. MOHAMED RIAZ
5. VINNI
(1). Introduction: Renault, the French automaker, founded in 1899, is a well-established brand
across the global and also, known for its ‘Drive the change’ strategic plan since 2011. With KWID’s success
in India, Renault India became one of the Top 10 markets for Renault Global. And as quoted in the same
report “Despite uneven economic situations across the globe, Groupe Renault strengthened its positions
to increase its market share in all regions.

(2). Product Life Cycle (PLC): The PLC for KWID has been impressive since its launch, and that of
its competitors kept dropping when KWID entered the market.

• The Renault KWID is the only brand which shows 132% change in sales in a particular year.

• Below is the BCG matrix post its launch, where KWID was major sales contributor to
Renault India.
(3). Marketing Strategy and Marketing Mix: Renault used the perfect marketing strategy
which majorly contributed to KWID’s success. It covered all marketing aspects before creating value for
customer, namely – gathered customer and marketing insight, leveraged customer driven strategy and
integrated marketing mix management, and heavily focused on maintaining relationship management.

(a). Pricing: The indigenous production approach was a successful strategy adopted.
Renault also made minor modifications to the model to accommodate the product cost (like single
viper than double) for an entry-level segment car.

(b). Place: To have better channels, Renault drastically expanded its touchpoints in India.
(c). Promotion: Renault followed an aggressive promotion approach to gain customers. It
used advertisements, public relations, sales promotion to promote KWID.

(4). Market Segmentation: Like Carlos Ghosn stated in KWID launch interview that “Indian
automobile market is very complex and requires lots of experience and knowledge of consumer”, and that
they kept surveying and learning about the Indian market in its 10-year journey in India, Renault looked
into the demographics, geographics, psychographics (Segmentation Triangulation) of the country and
launched models to meet consumer needs. It also focused on market growth rate, competitive intensity,
government regulations apart from technology state-of-art when segmenting. Following are few factors
supporting the same:
(a). Automotive Mission plan and Make in India projects by GoI boosted trading options.

(b). Renault attracted the Indian youth, the majority population with the well-articulated
slogans like ‘Passion for Life’ and ‘Live for More’.

(5). Targeting: Renault used undifferentiated approach by targeting all sorts of customers with a
common goal to follow passion. Also, a clear perception about its strength, resources and key players was
in its advantage.

(6). Differentiation and Positioning: By incorporating celebrity promotions and slogans Renault
had positioned KWID in innovative tech-improved stylish and adventurous category. Renault India,
developed a good marketing strategy knowing its competitors. And KWID had unmatchable standards
compared to other entry-level segment cars. With its local production base and two-year head start, the
competitors had a time constraint to compete. A well-defined PoDs and quality oriented and
differentiated PoPs were the highlight of KWID. It focused on PoDs by making the car design more
desirable with new looks and drastically expanding.
Renault followed the Customer-Driven market mix strategy.
(7). Reasons for KWID’s success: Some major factors are as follows: -

(a) 98% localization and continuous upgrade unlike Duster (which did not succeed beyond 2nd
year as it failed to do upgradation on time).
(b) Indian consumers had limited choice in automotive sector.
(c) With the production base in Chennai, Renault had a two-year head start to its competitors
who planned to launch products post KWID’s success.
(d) Renault provided more benefits to the customers than any of the competitors with lesser
cost incurred.
(e) Had an advantage from Automotive Mission plan, focused on increasing growth is
Automobile sector.
(f) Increase in disposable income for Indian citizens between 2011 and 2015(increased by
17%).
(g) Consistent decline in Petrol prices over a period and KWID being a petrol-engine car.

(8). Problem Statement: The outdated marketing strategy followed by the competitors did
not analyze and address customers’ needs for a change promptly till the launch of KWID. The competitors
didn’t upgrade their existing models frequently. Constant upgrades in technology and variety in design
and features, would have retained customers of the existing brands. Also, the competitors failed to
foresee the upcoming competition and were not equipped for it. They could not reach out to customers
at every level – production, pricing, promotion and placing.

(9). Changing customer insight that led to Renault KWID’s success? A few major factors
which favored the success of KWID are:
(a) Increase in disposable income since 2011.
(b) 7th pay commission offered benefits to common man.
(c) ‘Make in India’ mission launch, favoring Indian goods over imported ones.
 (d) Despite changing technology worldwide, Indian automotive industry had not been yet
exploited and introduction of an entry-level segment car with new features, looks and feel
changed the paradigm for good. People were ready to try the new features as they had more
resources.
(e) Renault analyzed the market well and used customer-driven approach to gain more
customers. Many brands had not upgraded the models for a while and the segment lacked variety.
For instance, the Alto 800 and the Eon offered very basic music systems, even in their most
expensive variants at that time.
(f) Renault added features to KWID that were customer friendly and hence attracted more
customers. After it entered Indian market, it did not just stop there. It continued innovating by
launching its variants. It also provided good post-purchase services. And, it had no real time
competitor. As the consumers were offered better features and facilities, which they had been
waiting for a while, and had money to invest, KWID’s sales increased drastically and made it a
success which led to a drastic increase in its market shares, despite being a new player in Indian
market.

(10). Conclusion: Renault brought innovation to Indian Automobile sector in an exemplary pattern in
entry-segment with KWID. KWID helped change customer insight and vice versa. It made the competitors
to realize their flaws in the marketing strategy and urge them to meet changing customer needs and move
from Product-based approach to Customer-based approach for success in the sector as the world is
evolving faster now compared to older days.

(11). Personal Learning: