Renault Duster

Dusting away competition or

facing a dust storm

By Group A4

Introduction
Renault was established in 1899 as a French multinational

vehicle manufacturer.

In 1996, the company was privatized and expanded

globally.

A strategic alliance was forged with Nissan in 1999 and, in

the same year, Renault took over car maker Dacia from
Romania. Renault became the major (20 per cent)
shareholder of Volvo in 2000.

Renault entered into the Indian market in 2005 through

joint venture with Mahindra & Mahindra Limited.
https://www.youtube.com/watch?v=0ITLWCfxmLc
In April 2007, Mahindra Renault launched Logan – an
entry sedan – with prices starting from INR 428,000 (base
variant, petrol) and INR 547,000 (base variant, diesel).
The Logan was launched to cater to the Indian mid-sized
car market.

Though it was a great success in European market it could

not succeed in India due to several problems such as an
ineffective branding strategy, improper pricing, and poor
localization.

Logan was never aggressively promoted, except for some

weak discount ads by the local dealers. Thus, the low
demand could be attributed to low customer pull effect.
Cars Garages
Growing Landscape for Automobile Sector in India

The passenger vehicle industry displayed a healthy growth in

the past decade until 2010-2011 (25 per cent).

The Indian socioeconomic conditions favored the growth of

the passenger car industry as a whole.

The average gross domestic product (GDP) growth rate of the

Indian economy in the period 2009-2013 was approximately 8

per cent and has led to an increase in the middle class income

along with other factors such as employment opportunities.

This was backed by a reasonably high per-capita GDP of

around USD1,500 in 2012-2013.

Around 5 per cent of the Indian population had a car according

to the 2011 census. Given the Indian population was around 120

billion at the time, this was not a small figure.

Easy financing options available from banks have reduced the

upfront payment burden for the buyers and have contributed

to car sales. Increasing urbanization is leading to new needs

such as own vehicles for commuting and is fuelling the sales of

passenger cars.
Increasing Brand Presence By Deploying Multiple Channels

Even though Renault had entered the Indian market in 2005, it made
its presence felt only after the launch of Renault Duster, as the Duster
was one of the first car brands to apply buzz marketing..
The car was first displayed at the Delhi Auto Expo in 2012, which
created publicity in the media.
Along with that, the company has also started to build up some
excitement about the Duster’s pricing by inviting people to guess the
price of the Duster. This is similar to the contest that Mahindra ran
just before the XUV500 was launched, and the winner got a brand
new XUV500. However, in the Duster’s case the prizes aren’t that
grand and are restricted to Renault merchandise which banked on
the deprivation or “opportunity lost” appeal
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Both the moves were well-received by the target audience who were
Internet-savvy. The hype generated about the car could be adjudged
by the 6,000 units that were booked within a week of its launch.
The brand also capitalized on the association with India’s most
popular sport. The Duster was reserved as the Man of The Series
award for the Micromax Cup 2012, which was won by the Indian
cricketer Virat Kohli.

The company had adopted a social media-based

campaign on Facebook that invited customers to
share their experience with others in electronic social
media.
 Porter's 5 forces

Competitive Rivalry: High

Renault faces off against several other automakers, including Nissan, Ford, and Honda. As diverse

manufacturers join forces in mergers and alliances to combine resources for improved output, the industry

will likely continue to expand.

As a car costs hundreds of dollars, customers would face a moderate switching fee if they wanted to buy one

from another manufacturer. Customers and producers must engage since each product is complex. As a

result, rivalry among competitors is fierce.

Threat of New Entrant: Low
The capital requirements within the industry are high, therefore, making it difficult for new entrants to

set up businesses as high expenditures need to be incurred. Capital expenditure is also high because of

high Research and Development costs. All of these factors make the threat of new entrants a weaker

force within this industry.

The government policies within the industry require strict licensing and legal requirements to be fulfilled

before a company can start selling. This makes it difficult for new entrants to join the industry, therefore,

making the threat of new entrants a weak force.

Bargaining Power of Supplier:Low

Renault requires a variety of raw materials which are uniform, standardized products. As a result of the lack of differentiation in the raw
materials, businesses in this sector also have low switching costs.
Contracts with suppliers are short-term, since quality and other factors require confidence that is developed over time, new suppliers
cannot readily enter the market.
The suppliers also benefit from the business since they receive regular orders from Renault. As a result, they are not in a position to
bargain with the company

Bargaining Power of Buyer: High

Although there are many buyers, each one is
spending a lot of money and may even make several-year-long installments.
Since consumers may always sell their old car and acquire a new one, switching expenses for buyers are likewise minimal. The client is aware of
the need for the information and can able to obtain it from a variety of other sources without depending on the seller.
Customers are also price-sensitive , and they typically buy cars that fit within their budget. Each brand offers a different product, and based on the
customer's ability to pay in full upfront and the cost of monthly installments, special discounts are prepared for them. .This provides buyers with
excessive bargaining power.
The Threat of Substitute:Moderate

There are several alternatives to driving a car.

There are many alternatives to the items made by Renault.

Once customers are used to driving their vehicle regularly and

have access to a range of automobiles, they might not choose

these alternatives.
Renault can focus on providing greater quality in its products.

Buyers would choose its products, which provide greater

quality at a lower price as compared to substitute.

Getting 5P’s Correct:

SUV demand is on the rise as a result of several releases by both Indian and foreign automakers,
as is typical in most markets.
Competitive pricing: The Duster is properly priced between Rs 10 lakh and Rs 25 lakh, as the
majority of SUVs had been priced beyond Rs 15 lakh.
Safety: Given the heavy traffic in most cities and the horrific tragedies we witness every day, SUVs'
safety features score better than those of sedans since they are perceived as being safer,
particularly for families with young children.
Increased road use: Families are travelling more on the road for vacations and other leisure
activities, which makes SUVs highly appealing.
Image: Although most people may never go off-roading, SUVs are popular due to their manly
appearance and the notion that they can be employed in challenging terrain.
Fuel efficiency and the high cost of gasoline increased demand for diesel vehicles.
Declining Stage:

The sales kept growing and in April 2013, the company

saw its sales for the month increasing by tenfold, with
6,314 units delivered to customers against 615 units in
the same period in 2012.

At the same time, the Duster contributed to more than

80 per cent of the total sales of the company in India
which could raise concerns. To top it off, all the other
brands of Renault India were erratic or declining.

Moreover, the Duster deferred its mass advertising

campaign and focused more on online
communications. This might have led to the loss of
non-tech-savvy consumers.
 The Way Ahead
Renault Should continue its laser-sharp focus on complete

customer delight as a part of its customer strategy.

To do this ,Renault has already introduced several customers

focused breakthrough initiatives which include faster after-

sales operations, network productivity and efficiency

improvement, an efficient call centre, and digitised operations

amongst others.
Further Renault Should Try to Focus more On Rural Market as

this market is not so much penetrated by its competitor’s.

Understanding the demands of its customers by staying in touch with them and providing extremely competitively

priced service and spares—an area where most brands appear to fall short.
Indian consumers like a strong dose of chrome on their cars, especially the exterior. They also like body coloured

bumpers, So Renault could shift its Focus towards this area.

India's population prefers SUVs with a tough appearance that stands out in a crowd, but they also want them to do tasks

like sedans, which are simple to drive and give good fuel efficiency, so this is a factor that cannot be disregarded.
https://youtu.be/9LPXZgCDoBg
Thank you!
Angela Boxi_009
Debdeep Mukherjee_019
MD Afridi_034
Robin Roy_046
Rukmini Das_048
Subham Roy_059