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A bumpy ride

With a 2.2% market share since its launch in India a decade ago, Nissan is clearly struggling to get its act right in the country. Here's what other marketers can learn from the Japanese automaker's mistakes

Devina Joshi 

Evalia is probably the most obvious example where we took frugality to mean cheap, and it doesn't. You can't sell a van in a passenger car market," Andy Palmer, executive vice-president and chief planning officer at Nissan Motors told The Strategist during a recent interview. Palmer went on to explain how the Evalia, designed for Europe, failed to realise that skimping on space at the rear of the car - acceptable in Europe when commuters tend to stock travel gear for long weekends - is a terrible idea in the Indian context, as the owner of the car tends to sit at the back, driven that he usually is by a chauffeur.

A dismal performance, missed sales targets and customer feedback led to a refurbished avatar of the Evalia within a year of its launch. The seven-seater MUV, priced at Rs 7.2 lakh (ex-showroom, Mumbai), was reconfigured to suit the Indian market with reclining captain seats in the middle row, sliding Euro windows on rear doors and greater room at the back, among other things. But it wasn't just the Evalia - Nissan India's sedan Sunny and hatchback Micra are also guilty of a series of execution and gaffes. Then there was Nissan's unsuccessful distribution partnership with Hover in India, which ended in a bitter divorce earlier this year.

It is worth noting how the formidable Japanese car maker - responsible for masterpieces like the Infiniti series globally - has underperformed in India and is now trying to correct itself on virtually each of Kotler's four Ps. Hidden somewhere in its mistakes are crucial lessons for other global brands looking to prise open the Indian market. Lessons that can help them stay smart and relevant in a market that will no longer tolerate a one-size-fits-all approach.

An 'insightful' lesson

It really boils down to the nature of the market and the category's mental models. A car is not a car in precisely the same way across different markets. For instance, in India, car safety is currently not of paramount consideration the way it is in developed markets. Indians, besides expecting fuel efficiency and value for money, look at the size of a vehicle and its outward appearance while making a purchase decision, as it is a social status-driven category. Indeed, if SUVs are sold on ruggedness and capability in the Western markets, in India, it is more about the looks and the size. "The Mahindra XUV 500 was a success because at that price point, it allowed people to get a sense of bigness," says Santosh Desai, MD & CEO, Future Brands.

Why this quest for status in a car? That is probably because India's current auto buying generation has not grown up with an automobile in the house. A lot of these buyers probably got their first car as an office car in their late 30s or early 40s and hence, these are high status products. While today's children are growing up with cars and will probably be minutely discerning about engine capacities, power steering, automatic windows etc, the previous generation may not be so nuanced in their car knowledge. "For a farmer in Punjab, there is no difference between a BMW and a Mercedes; they are both just symbols of wealth," says brand consultant Anand Halve of chlorophyll. So, whether an auto major likes it or not, auto products can't get away from that association of 'status' in India.

This was also the most important consumer and category insight that Nissan overlooked and hence, the brand never really became a status symbol. 'Zero status' is perhaps a problem shared by Fiat: the brand name immediately evokes memories of Mumbai cabs and the old Premier Padmini. "No matter how many Lineas are launched, Fiat first needs to wipe out that old impression," Halve sums up.

Kellogg's is a brand that comes to mind as one talks of not tailoring one's strategy according to the demands of the local market. Culturally, Indians like their breakfast hot, and also seek variety in their meal; across households there are discussions at night on what should be had for breakfast the next day. Kellogg's offered neither of the two. The American corn-based cereal worked best with cold milk, and expected Indians to significantly change consumption habits simply because it was a 'superior breakfast' item from the West. But Indians didn't take too kindly to a perceivably elitist, 'soggy' product for breakfast.

Kellogg's change-your-habits-so-that-you-can-appreciate-me strategy bombed and it took quite some time for the company to come back on track. "A classic mistake in having too much faith in what you have to offer," says Desai. The brand eventually introduced variants in Indian flavours and in the form of chocolate snacks, managing to correct its entry-point mistake somewhat. Over the years, its growth has also been propelled by increasing relevance, with the emergence of working couples and the resultant need for food that can be prepared in a jiffy.

If changing habits was a difficult process, why did Maggi succeed where Kellogg's failed? Two factors, say brand analysts - Maggi didn't position itself as a breakfast/lunch/dinner mainstay, nor did it compete with the main meal. The anytime snack was delivered on taste - which gets disproportionate importance in India - thanks to its 'masala' tastemaker. India didn't become a noodle-eating nation, neither did our habits change because of Maggi. "Maggi made the change seem like an extension of our current eating habits, along the axis of tradition," says Desai.

Or take the example of teabags, a still underpenetrated category in India. Some feel they still don't fit in with the prevalent tea drinking behaviour of the huge majority of Indians, who prefer to boil tea leaves to 'fully' extract the flavour out of it. "That is Indian frugality at play," says Pranesh Misra, CMD, Brandscapes Worldwide. Also, the whole premise of teabags is built on convenience - a proposition that may be relevant to a certain section of the market but not for the vast majority. Which brings us to the next lesson: customisation.

With you, for you, always

Nissan made quite a few errors in product design in its early days. Take the Nissan Micra, a fabulous performer in Europe. "But in India, the interiors were not on par with competitors like the Maruti Suzuki Swift or the Volkswagen Polo," says automotive expert Amit Kaushik, principal analyst, IHS Automotive. The Micra fell short on the quality of plastic used in its interiors and the comfort and stature of seating positions. That apart, the use of expensive imported AV systems made the newbie a tad more expensive than what people would have liked. On its part, Nissan's Sunny also left a lot to be desired, which meant it would lag behind the Maruti Suzuki Dzire and the Honda Amaze. To give it credit, Nissan has been quick to launch a revamped version of the Sunny some time ago, with a clear attempt to make it look more 'premium'.

Here one can draw an analogy between the Nissan Sunny and the Honda Civic. For any car to run smoothly on Indian roads, ground clearance (distance between the lowest point of a vehicle and the road) is a deciding factor, as India doesn't boast of a good road infrastructure. Civic, because of its low ground clearance, didn't meet with expected success in India initially. "One can't dump a product made for a developed market here," says Kaushik. Honda got the packaging right at the first shot with the Amaze which had higher ground clearance.

Sometimes it is the little things. General Motors' Chevrolet Optra and Aveo, for instance, challenged the habit of drivers, who would end up activating the wipers while trying to signal a turn. Simply because the levers were placed differently. Or take the Ford Escort, which was launched in 1997 and had power windows next to the front seats only. This essentially meant that the driver on the back seat had roll-up windows while the chauffeur had power-up. It took the company some time to identify the problem and fix it.

Some global brands think, says an analyst, that India is an emerging market where habits can be taught or changed. So when consumers see something better, they will switch. "The thinking goes like this: so you are emerging, let me pull you up on a road to a better future," says Desai. "But in India it doesn't work like that because the Indian consumer doesn't grant any brand that right." It is a very difficult lesson to learn.

So customisation is a big deal in India. Even a behemoth like Nokia lost its plot in the country by missing out on the dual SIM revolution initially and then on many other counts. Being largely a pre-paid market, Indian consumers often switch between service providers in search of the best deal. As they exhaust talk-time on one SIM, they quickly switch to the other without having to change the phone. So the value attached to a dual-SIM phone is much higher than probably warranted.

Initially, Nokia innovated with products like the 'torch' phone for India, but one strategic mistake - not latching onto the dual SIM technology - led to a stumble from which it never really recovered.

and distribution must-dos

Needless to say reading your audience well is Rule # 1 in But the task becomes difficult if we're talking of audiences with different psychographics. "A BMW participating in a bridal show to push the brand as the ideal bridal car, for instance, will have repercussions that will be damaging in long run," says Naresh Gupta, managing partner at digital agency Bang in the Middle and ex-planning head at Grey Worldwide.

Another rule of marketing is if the product operates in the lifestyle category, the communication must speak that language. Again, Nissan failed to make an impression here. Its 'Caaaaar' ad for the Sunny didn't say anything about the brand or its heritage. There are brands that have gone the other extreme, assuming Indians will shed a tear faced with emotion-laden advertising and open their purses. One would recall Chevrolet's early communication which had a whole 'dip in the Ganga' sequence with a 'welcome to India' type positioning. "Don't tell me you're more Indian than I am," says Halve. "If you're a Lamborghini, by all means tell me about design. But if you don't have that exceptional design - which most brands don't - then please just appreciate the category's role in my life."

Even on the distribution front, Nissan has struggled to form strong partnerships. A "flirtation with Bajaj" as Palmer put it, didn't work out, and its only long-standing partnership with Hover failed miserably. "When you come up with an additional distribution partner, you need to pay a premium to him and that additional cost gets passed onto the consumer," explains Kaushik of IHS.

Not having a distribution network can affect even the most prestigious brand. "Apple in India, while a great branding success, is a distribution failure," says Siddharth Singh, associate professor and director of the Fellow Programme in Management, ISB. On entering the Indian market, by tying up solely with telecom companies like Airtel and Vodafone for distribution, the brand limited its reach. It isn't a telecom company's core business to push handsets as a majority of consumers have pre-paid services. "Just think - if Apple wants a significant share of the smartphones pie in India, it isn't even available enough for purchase," says Singh. And only so much of that non-availability has to do with creating artificial scarcity.

Nissan's Palmer has also admitted to other key mistakes -like not having its own R&D facility in India - which it corrected by launching one. As things stand, Nissan plans on increasing its dealer network to 200 dealerships by FY 2014-15, and is also putting greater emphasis on the after sales support.

Mind you, Nissan is not the only one. Many global companies that arrived before - and after - it are guilty of making assumptions about the Indian market that aren't backed by credible research. Some wind up as fast as they land up thinking India won't change as a market. But Indian consumers have demonstrated they move fast if they see a merit in that change. "This resistance to change is, in fact, more apparent in the developed markets," says Misra recounting his own experience. The Nissan story also illustrates that one mustn't import ideas blindly into this country. Like any other market, India is unique and needs customisation. "I suspect Nissan has been a little cautious in its approach to the Indian market. It is a highly successful company and will get its India act together soon," says MG Parameswaran, advisor to FCB Ulka.

The point, clearly, is about how quickly one identifies one's mistakes and fixes them.

Anand Halve
Anand Halve
More than meets the eye: Anand Halve

There are three classes of products:

1. Products that fit into my normal routine where the brand needs to find a place in my home. If you try and persuade me that I am a junglee if I don't use your product, it won't go down well. Pomposity cannot be there. Such a brand is not visible to the world and fits into what I already do.

2. The second class has products that are visible, with high brand prestige value but are also changeable, like Lacoste, Benetton, Nike etc. The world is aware of the brand I use which, in a way, speaks of who I am. In a lot of such product categories, people don't have a singular brand preference. There may be a Nike T-shirt in your wardrobe, along with a Lacoste one. The same holds true for restaurants. I won't eat only at McDonald's; I will eat at other places too - it is about getting me to include the brand in that favoured basket. Here, the brand's challenge is to get into a consumer's cluster of consideration and to stay there.

3. The third class of brands involves serious investment, which is where auto comes in. Globally, people owning a BMW do not sit in the rear because BMW was designed for the pleasure of driving. In India, it is the driver's joy to be driving it, but you're still happy in the passenger seat. This is because when you get out, people notice you getting out of a BMW. So that is an example of the culture of a country. The numero uno rationale for Indians buying a car is fame/status. If you want to bring in product features, make them so different that it stands out at that price point. Nissan has to be your third car. The Renault has done this well with Duster. At a basic price point, it was a pseudo SUV that made a consumer feel good about it.

In India, cars aren't simply about luxury or joy. Even if a customer goes to a Maruti Suzuki showroom to buy an Alto, why do we see a pooja thali with agarbatti and mithai there? Why do you not do that for a washing machine, which is a functional product too?

Co-founder & Director, Chlorophyll

First Published: Mon, November 03 2014. 00:15 IST