The Indian car industry always
considers Maruti as the HUL of the car industry. They are well known for their
flurry of launches. I firmly believe that Maruti's top position in the Indian
market is attributed to these new launches. Are all launches successful? The
answer is a big No. Maruti's story is entwined with prosperous as well as
failure brands. However, the customer is happy and proud to own a Maruti.
The hot news of the month is
about a brand that had a meteoric rise and was in the kitty of Maruti for a
decade, Alto K10. Launched in the year 2010, Alto K10 was a modified version of
their ever best-seller brand Alto. In Marketing terms, the launch was a line
filling. There existed a gap in the market between the entry-level segment Alto
and a slightly high-end Wagon R. Alto K10 was Maruti's answer for the need. The
brand was doing good, or I should say, still doing good. But no major facelift
has been done to the brand since 2014 as per the company sources. But why?
K10's exit was not an ignominious
one. For me, K10 was a cash cow for Maruti. To be more specific it has reached
the maturity stage of the product life cycle and without market/product modifications
survival is tough. Moreover, the success of cross over SUV – like models such
as Kwid accelerated the push outside. But I don't think there is a desperate
need to discontinue the brand. The factor that, to me, has contributed to
the exit of K10 is brand cannibalization. After the initial success of S
Presso, K10 started losing its customers to S Presso, which is a classic case
of cannibalization. The threat of cannibalization is always there if your
portfolio size is large. Companies usually manage it by withdrawing one brand.
In this case, Maruti wants to protect the younger one with a more meaningful
life. The fate of S Presso is again uncertain. But investing in a question mark
is more critical than protecting a cash cow. (Cash cow, Question Marks are two
quadrants of the BCG Matrix).
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