Baleno : Premium play using a phased-out brand?

Brand: Baleno
Company:  Maruti Suzuki

Brand Analysis count:  # 560

Maruti Suzuki Ltd ( MSL) is in the process of  foraying into the premium hatchback ( B+) segment with the launch of Baleno. The announcement was surprising to me since the company which is struggling to break into the premium segment has chosen to name the product with a phased out brand!

Interestingly, Baleno was MSL's foray into the premium sedan segment, 16 years ago. Baleno was first launched in 1999. Although the car was exceptional in terms of quality, MSL priced the product exorbitantly high. In 1999, the brand was priced at 8 lakhs. This along with the general VFM perception of Maruti brand caused a lukewarm response to Baleno. Later Baleno reduced the price substantially to around Rs 5.5 lakhs. Despite these efforts, Baleno failed to deliver volumes resulting in its withdrawal in 2006. It is said that the quality of the product is evident in the fact that Baleno is still used as a racing car in India.

It is in this context that the launch of the new Baleno hatchback becomes interesting. MSL has stated that it aims to break into the premium segment of the Indian automotive market. The company had created a premium distribution network branded as Nexa. The company had launched its premium crossover S-Cross through Nexa. 

Everyone knows that MSL has the issue of being perceived as a value-for-money brand. Many experts suggest that more than the VFM perception, the brand Maruti have an issue with the design. So far no product from MSL was having a premium design. 

When  the company has such a perception problem existing, why would it launch a " premium" car with a brand which was phased out? Frankly I don't see any logic or rationale behind that move. Baleno, in my personal view, doesn't have a lasting equity which  could help in the new product launch. Further, the new product is a hatchback and not a sedan. 

So what is the value that the old brand Baleno is bringing to the new product is puzzling. Baleno is also a product which failed due to its high ( premium) pricing. Now MSL is launching a high-priced hatchback in that same name is nothing but an irony. The only logic I see is that the Baleno hatchback is a global product and hence the brand. 

In my opinion, MSL has lost an opportunity to build a premium brand. By launching Nexa, the company wanted to create a separate identity away from old Maruti products. When the company has invested so much in creating a different identity, why would it bring back a brand which has the baggage of history? 

Premium-ness comes from exclusivity, stellar performance and brand equity. I wonder how could anyone relate premium-ness to a brand which was phased out because it was not successful?

On the branding front, I consider the Baleno branding as a big mistake. Baleno hatchback would be a successful product probably as a VFM product and I doubt whether it would be a premium brand as wished by MSL.

Brand Update : Wagon R Teaches How to Manage Product Lifecycle

The festive season of 2014 saw the launch of  limited edition Wagon R Krest. Wagon R which was launched in 1999 is still the 4th largest selling car brand in India. The product is a classic example of how consistent performance + value-for-money positioning will achieve long-lasting success in Indian market. 

Wagon R has become a success because it is one of  the most practical car in the Indian roads. Be it space, comfort or reliability, Wagon R has delivered consistently over the last 15 years.

On the product front, Maruti has been very smart in ensuring that the product and the brand is kept relevant to fit the changing consumer needs.

The brand went for relaunches and modifications in 2003, 2006 and 2010. 

In 2013, Wagon R launched another variant- StingRay with a new positioning to attract the young consumers. 

This year, the company is keeping the PLC rejuvenated by launching a limited edition product branded as Wagon R Krest. The new variant has new front grille, audio system, reverse parking sensors, new seats and some sticker jobs. The new limited edition is priced at a premium of Rs 22000 over the original Wagon R. 

From 1999 to present, the brand has sold around 1.3 million units and counting.  In the branding front, the company had tried to maintain the brand's visibility . Earlier it used the actor Madhavan as the celebrity endorser effectively. More than the brand's campaign, it is the practicality of the product that has made it a best-seller.
Maruti has plans for a diesel version and an AMT version for this brand. This brand will be here for a long time for sure.

Maruti Estilo : RIP ( 2009-2013)

Finally  Estilo is dead. From a sub-brand ( Zen Estilo) to an independent brand and finally to a dead brand, Estilo never had a good run in the Indian market primarily because it tried to step into the iconic place of its predecessor- Maruti Zen.

The fault was not  with the product but with the messy brand experiments and the lack of giving proper positioning of Estilo. The primary error was made when Maruti decided to brand the new car  which replaced Zen as Zen Estilo. While the intention was to keep the Zen brand alive, the main issue was that the new product did not share any commonalities with the outgoing Zen. That created unwanted dissonance in those who expected the same peppy personality of the original Zen.

To be fair to Estilo, the car was spacious and good. But Maruti never was able to give a space for Estilo in its crowded product portfolio. It was to fill the gap between Alto and Wagon- R but was not able to quite do it effectively. Consumers viewed it as a compromise primarily because of the perception. Maruti was also not keen of giving any sort of promotional push to the brand neither was any thought on the positioning of Estilo. 

So when there was an option , consumers stopped looking at Estilo as an option. 

With the death of Estilo, the legacy of Zen has completely ended.

Related Post

Zen RIP ( 1993-2009)

Maruti Suzuki Stingray : My Thing ,Everything

Brand : Stingray
Company : Maruti Suzuki

Brand Analysis : #532

Maruti Suzuki recently launched another brand in the crowded Indian hatchback market. The new brand is Stingray. The launch has created a hell lot of confusion in the branding of the new car. While most of the media has touted the new brand as a variant of Wagon-R , actually the company intended it as a brand separate from Wagon-R. But media killed that scheme. If you look at the campaigns and the brand micro-site, Maruti had intended to position this brand differently from Wagon-R.

Wagon-R has been one of the best-selling models of Maruti. All though the looks were not the best, it was one of the most practical cars especially for city drives. Launched in 1999, the brand had sold a phenomenal 12.77 lakh units till date.

Maruti had tried to push the car through its life-cycle through incremental product and design changes. The latest was the " Blue-eyed Boy" campaign in 2010. However, the intense competition has somewhat pushed Wagon-R behind. According to ET, the brand was now in the fourth position in the segment ( link).

According to reports, Stingray was first launched in Japan as a sportier variant of Wagon-R. 

Stingray is targeting the younger crowd. The brand is positioned as a cool car that have it all. The ads typically is trying to convey hip & cool attribute. Watch the ad here : Stingray

The new trend in the market seems to be the mad rush to attract the youngsters. Tata Nano is the new entrant in the mad rush with their new " Awesomeness" campaign.

The tagline of Stingray is " My thing, Everything" which in a way is trying to be everything that an young consumer needs.Stingray is priced premium over the Wagon-R. The starting range of Stingray starts with Rs 4.09 lakh while that of Wagon-R is Rs 3.5 Lakh.

What is interesting about this brand is the unique situation that it fell into. The brand tried to distance itself from Wagon-R but media has forced the label of Wagon-R Stingray into it. One cannot wish away the power of association. The new brand looks very very similar to Wagon-R so one cannot blame for this association. Similar issue is there with Vista which was launched as a new brand but is strongly associated with Indica.

I am not implying that the company doesn't know that such a kind of association will happen, its commonsense that it will happen. But its interesting that media explicitly put Stingray as an extension of Wagon-R without blinking an eye. 

The association with Wagon-R is good for Stingray because of the immense equity that Wagon-R enjoys in the market. Maruti feels that the life-cycle for Wagon-R will slowly move to the decline stage . So there needs to be a replacement for this bestselling car. By launching the new product without the endorsement of Wagon-R, Maruti hopes that the young consumer will not consider it as a " Old and Dated " brand and over a period of time, Stingray will have a position distinct from Wagon-R and in future will takeover the position of Wagon-R.