Case approach crasher: Market entry strategy for Renault

Duster
How does any company start?

 What do I want to sell?

 Who are you selling to?
 Where to sell?
 How to sell?
Case

1 4 3 2

“Decided to check the opportunities in low end SUVs”

Competitive landscape
“4/5 low/medium in
porters 5 force analysis
means structurally
attractive industry”

“nascent category”
Competitive landscape
Agencies
Suppliers
Distributors
Partnerships
 Competitor analysis: Safari and Scorpio
“Both of them not family cars”

Global
competition
 Strengths Weakness Opportunities Threats

Leverage our
strengths, reduce
the weakness, Huge global
presence
Penetration in
Asia
Distribution
High
competition
grab the
opportunities and
hedge the threats
Local
Wide variety;
Invest in manufacturers
high quality Car recall
future cars enjoy market
in low cost
share
Market Research

Observational studies > Consumer behavior; time

spent on purchase (high involvement, low
involvement, impulse purchase?)

In depth interviews and Focus group discussions

(Qualitative analysis)

Quantitative analysis (Questionnaire study

What to sell:
OBJECTIVE: Renault desperately needed a "volume driver"
OPPORTUNITY : It identified a gap in the SUV segment and

"There were SUVs costing Rs 20 lakh and above manufactured by global players and those priced from
Rs 6 lakh to Rs 10 lakh produced by Indian companies”
Therefore, Duster priced between Rs 8 lakh and Rs 12 lakh

MARKET RESEARCH-
Focus group = 200 people whose profile matched the potential buyer of the Duster
30 families from FG--> 5 Indian cities for an ethnographic study (2 months)
-product development team lived with their target customers to observe them, understand
their lives and needs.
-spent time with the customers to know what they liked and did not like about their vehicles
 Consumer behaviour
41 modifications that the European Duster FOR INDIAN
CONSUMER
"People loved an SUV with rugged looks that stood out
in a crowd, but at the same time wanted it to
operationally perform like a sedan - easy to drive
and [offering] good fuel efficiency."
chrome exterior on their cars , more rear seat space, arm
rest
body-coloured bumpers
dual-tone interior
switches for power windows on the door
Good proportion of Indian cars are chauffeur-driven
-->rear seats inclined seats for greater comfort.
Rear air-conditioning was critical and so was the armrest

http://businesstoday.intoday.in/story/case-study-renault-duster-success-story/1/199321.html
 Vehicle category in India

SUV MUV

Renault’s Innovation

Compact
SUV

Comfort of a sedan and the rugged strength of an SUV

Segmentation Targeting Positioning Product Place Price Promotion

Segmentation
 Segmentation Targeting Positioning Product Place Price Promotion
Case

Segmentation Age
• 25-30 years
• 30-40
• 40-50
Behavioral

Psychographic
Family • <=5
size • >5
Benefits sought
Lifestyles

Family
Income
Opinions
Usage status

Segment name High self image Benefit buyer Price conscious Intelligent buyer
Descriptors for buyer buyer
behavioral Personality Highly social Goal seeking Self oriented Analytical
and
psychographic Lifestyle Image centric Energetic Value centric Saving
segmentation: Behavior Premium brands Brand loyal Test and use Quality searcher
Benefits sought Brand image Attributes Price Functional
 Segmentation Targeting Positioning Product Place Price Promotion
Case

Targeting

• Medium income, family size<5, age group 25-30: Price conscious buyer
• Medium/High income, family size<5, age group 30-40: Intelligent
buyer/Benefit buyer
• High income, family size<5, age group >30: High self image buyer

Different lines can be made to meet the

requirement of each target segment.
 Segmentation Targeting Positioning Product Place Price Promotion
Case

Positioning

Compact
SUV • An affordable compact family SUV car
• Effortlessly efficient
• Beautiful inside out
 Segmentation Targeting Positioning Product Place Price Promotion
Case
Product
• 3F Strategy:
• Fast (the adaptation to Indian needs must happen within 12 months)
• Frugal (on limited budget)
• Fantastic (with no compromise on quality)
• Modifications to be done locally with a local team

• The Duster will be available in eight variants - two petrol and six diesel - but is not expected to hold
the price advantage for long.
• two states of power - an entry-level 85 bhp version and a top-of-the-line 110 bhp variant
• It's a very aggressive price, but we have to see if they are able to compete on sales and service
Segmentation Targeting Positioning Product Place Price Promotion

Product

Some important terms:

• Line extension/product extension
• Category extension
• Co branding
• Joint venture (M-R)
• Same company (Gillette mp3 player shaving set with
Duracell)
• Ingredient (Dell-Intel, Nestle-Kelloggs etc)
• Dual branding
• Sub brand
 Segmentation Targeting Positioning Product Place Price Promotion
Case

Pricing
• Price of a sedan and a hatchback
• 8-12 lakhs depending on the variant

Some important terms

“An affordable SUV” • Price skimming
• Decoy pricing
• Loss leadership
• Penetration pricing
• Predatory pricing (undercutting)
• Premium pricing
• Value based pricing
Segmentation Targeting Positioning Product Place Price Promotion

Place
Segmentation Targeting Positioning Product Place Price Promotion

Promotion

1. Direct selling; Direct marketing 1. Trade promotions (Retailers)

2. Advertising 2. Consumer sales promotions (Discounts,
3. Publicity Bundling offers etc)
4. PR
Segmentation Targeting Positioning Product Place Price Promotion

Promotion
 Segmentation Targeting Positioning Product Place Price Promotion
Case
Segmentation Targeting Positioning Product Place Price Promotion

Retail landscape in India

Retail in IndiaOrg
 US 500 billion $ industry aniz
 ed Penetration of just 9%
Contributes to 14-15% of the India’s GDP
 Employment over 40 million people and over 90% of them employed 9%
in General trade
High growth potential for
900 B$ Uno Modern trade; 3 year
in 2020 rgan CAGR of 38%
ized
91%
500 B$ in  Per capita organized retail space in India is approximately around 2 feet
2014  Per capita organized retail space in China is 8 times larger than that of Fastest growing retails
India market in the world

Indian MT not growing as fast as that of

Vietnam, China & Indonesia though the
penetration of MT is just 9%

More than 3% of people are employed in unorganized retail and hence

people cannot easily shift to Modern trade
Segmentation Targeting Positioning Product Place Price Promotion

Retail landscape in India

General trade Modern trade

Change in FDI regulations has increased the limit to 100%

Huge population employed in General trade; Penetration investment in single brand retail and 51% in multi brand
is very high retail
91% 9%

Margins distributed across distributor and retailer; hence Global players to enter the market to capture the huge
producer margin is low as compared to MT potential

Unionized retailers => High coordination amongst the Creation of jobs in India
retailers in any area

Gives the shelf space to different brands

Private Higher margins; 10% more than the other brands
labels
Motivates the consumers to visit the store Cultivates brand loyalty; Walmart has a lot of
loyal customers in foreign countries
Introduces Private labels of its own to earn large margins(10% more than normal); makes the These are cheaper to produce as there are no
competition price sensitive advertising and marketing costs
Marketing budgets are more efficiently used
Motivates the people to buy the Walmart labelled goods and gives very less space to other brands
Supply chain and logistics management

Centralized
Vs
De centralized
Order quantity: Trade off between inventory carrying cost and
ordering cost
 Put fight Put crack!!!
All the best
“We are what our thoughts have made us; so take care of what you think”

For any queries contact:

Santosh -9007974513
Priyanka- 8584062265