Home | Current Issue | Editorial | About Us | Subscribe | Advertise
Contact Us
| Feedback
| 4Ps TEAM
| 4Ps Calendar | 4Ps Archives
Cover Story

Special Columns
Arindam Chaudhuri, Editor-in-Chief, 4Ps B&M Chief Consulting Editor's Desk
Rajita Chaudhuri
A.Sandeep Editor’s Desk
A.Sandeep
Share |
Go to Page Number - 1   2   

WHEN YUPPIES AND PUPPIES CAME OF AGE

Issue Date - 06/05/2010
 
India of the early 1980s was well represented in the advertising campaign, “Buland Bharat ki Buland Tasveer” by Bajaj; an era where the scooter was symbolic of Indian middle class aspirations. A car, meanwhile was for the rest of the world. Hero Honda and Maruti Suzuki came, saw and transformed this landscape and made middle class Indians see beyond. They even ensured that incumbents either followed their rules or went off road. In this historic analysis, 4Ps B&M goes deep into the growth of Hero Honda and Maruti, and draws parallels between the two iconic brands, with exclusive and live interviews from the various management levels of both these organisations



We often dedicate India’s current levels of prosperity to the glorious 1990s; but the decade of ‘80s is what is considered as the period when India began turning the corner as far as its record of technological development and adoption was concerned. In itself, 1981 was a remarkable year; the year when HCL started its software export division in Chennai, Wipro started selling its computers and also the year when Infosys was born. While 1982 witnessed the launch of the ephemeral Insat 1A and the revolutionary colour television just before the Ninth Asian Games took place, the years that followed marked the launch of two of India’s topmost cult brands – the first hatchback, Maruti 800 (1983) and the first four-stroke bike Hero Honda CD 100 (1985). And this eulogy an unabashed pandering of how they succeeded.

The history, foremost. For decades, and especially during the ‘80s, those were the Premier Padminis and Ambassadors that were the ‘four wheels with motors’ Indians could ever think of. According to records, the waiting list for cars was as high as 62,000 in 1970s, much higher than the then annual production capacities of auto majors. Similarly, Bajaj’s waiting list for its legacy scooters was almost 25 times higher than that of its annual production capacity in the 1980s (Bajaj Auto once even said that it didn’t require a marketing department and was focusing only on its sales department).

Says a former senior employee of Hindustan Motors to 4Ps B&M, “Yes, the pre-Maruti era was of Ambassadors in India but the technology of Maruti 800 and the price at which the product was launched revolutionised the way the business of automotives was done in the country.” Truly, that unquestioned leadership – of the Premiers, Ambassadors, and even the Bajajs – became flimsy once Hero Honda and Maruti Suzuki entered the Indian market and changed the rules of the game. For example, when Hero Honda launched its four-stroke motorcycles for the Indian market, the consumer was used to scooters from the Bajaj stable (with the first lesson learnt on how to tilt the contraptions to one side before a kick-start). But the existing obsolete technology and complacent approach towards the lopsided supply-demand equation provided the Ludhiana-based Munjals with an upper hand. Meanwhile, Maruti was taking the four-wheeler market by storm, making a clear sweep as far as competition was concerned – in fact, competition became almost non-existent.

Clearly, the way the ‘People’s Car’ and the ‘Fill it Shut it Forget it’ bikes created history, and paved the way for a booming and self sustaining automotive industry that has gone on to become one of the largest drivers – and evidence – of economic growth, has become part of marketing folklore, more so as the duo shared a lot in common than just the decade in which they commenced operations in India. We list a few notable ones.

 
‘AIBOU’ TILL WE...

Both Hero Group and Maruti started their journey in collaboration with a Japanese ally – Maruti partnered with Suzuki and Hero Group tied in with Honda to attain its ambitious goals in the two-wheeler sector. Both ‘aibous’ (Japanese for ‘partner’) helped the home-grown companies get the latest products to decimate the outdated technologies of the counterparts in the 1980s. But their roles, more or less, remained limited to that of a technology partner only. While this has been quite evident in the case of Hero Honda, R. C. Bhargava, Chairman, Maruti Suzuki India, whom we meet in the course of our journey through the two companies, accepts the same too (His latest book, ‘The Maruti Story’, describes details of how Suzuki remained confined to the tech-aspect).

KEEP IT ‘CHEAP’ MANTRA

The duo of Maruti and Hero Honda played the right set of cards for the price sensitive Indian consumers by banking on their core competence of fuel efficiency. Notably, while it takes several years to book a profit for most automakers, Maruti Suzuki was profitable right from its first year of commencing operations. And the connection they developed with Indian customers continued to be very strong throughout. “Even today, if a prospective customer walks in and is weighing the options between a Maruti car and your product, it always takes that extra bit effort to convince him/her to be on your side,” explains a Delhi-based dealer of a US competitor of Maruti. Hero Honda similarly enthralled the value-for-money conscious Indians with their unforgettable ‘Fill it-shut it-forget it’ mantra, and continued to reap rich dividends.

WHITE HINTERLANDS

The rural parts of the country have been integral pillars of growth for both the companies. Be it the ‘on the spot’ service initiative of Hero Honda or the strong network of Rural Development Sales Executives (RDSE) of Maruti Suzuki, both have been able to beat the slump due to their rural presence. For the uninitiated, Hero Honda banks more than 40% of its total sales from rural areas and Maruti garners around 10-12%, portraying the best urban-rural sales mix in the industry. But they’ve been open to change quite pro-actively. Even last year when Pawan Munjal, MD, Hero Honda spoke to 4Ps B&M, he accepted, “We decided in the last couple of years that we have to have leadership across segments. We should not be seen as a company for rural masses only.

So we have refreshed our portfolio and have been growing at almost 40% in premium segments.”

          
Share |
 
Go to Page Number - 1   2        Next
 
 
 
 
Home | Current Issue | Editorial | About Us | Subscribe | Advertise | Contact Us | Feedback | 4Ps TEAM | 4Ps Calendar | 4Ps Archives
 
4Ps Business and Marketing is also associated with :
Copyright © Planman Media Pvt. Ltd. 2004-2007 All Rights Reserved