Mktg - The Logan Story

Last year, when Mahindra Renault (a 51:49 joint venture between Mahindra & Mahindra and Renault of France) launched Logan in India, expectations ran sky high. For Mahindra, which had claimed lot of appreciation for the success of Scorpio, the Logan marked an entry into the most competitive C (or A3) segment of the automotive market. With prices starting Rs 4.28 lakh for the base petrol variant, the sedan was the cheapest on the road, ready to shake up the A3 segment.

For Renault, India was a big opportunity and the company tweaked the sedan—developed by the French company and its Romanian affiliate Dacia—to make it more friendly to its driving conditions. Its air-conditioning and heating systems were designed to suit the extreme climatic conditions that prevail in the sub-continent. It was also the first right-hand drive version of the Logan aimed specifically at the Indian consumer.

On its part, the Logan did not belie the initial expectation. A huge flow of booking orders followed the launch. In a record of sorts, there were 3,000 bookings in the first three weeks. And in its first three months (April-June 2007), the Logan sold 5,167 units, parking itself right behind Tata Motors, which posted 7,201 units in cumulative sales for its two brands in this segment, Indigo and Indigo Marina. The Logan was ahead of Hindustan Motors (which sold a total of 2,551 units of the Ambassador, Lancer and Cedia) and General Motors (Chevrolet Aveo notch back: 1,290 units).

By the end of its first year, Mahindra Renault had sold 25,891 units of the Logan, which competes with Maruti Swift DZire, Tata Indigo and Hyundai Accent, to garner 11.47% share of the mid-size sedan market in 2007-08.

Within a year, however, the company has repositioned the brand with a fresh advertising campaign harping on a new slogan, “Here’s the answer”. Mahindra Renault is also rolling out an aggressive mass media advertising campaign to woo car buyers across the country. And it has initiated a nationwide test-drive campaign to induce sampling.

Above all, to give the bare-bone sedan an image boost, the company recently launched a limited edition Logan Edge for those who wanted more from Logan. Priced between Rs 5 lakh and Rs 7.15 lakh (ex-showroom New Delhi), the Logan Edge hopes to add the aspiration dimension to the brand. Hence the stylish body graphics and attractive features like anti-lock braking system (ABS), a reverse parking sensor to facilitate easy parking and so on.

What’s up? Is the Logan finding the going tough? Already?

Rajesh Jejurikar, managing director, Mahindra Renault, pooh-poohs the suggestion. “The Logan has been a big success despite stiff competition and tough market conditions. In March 2008, Logan sales zoomed past 3,000 units to post all-time high sales of 3,068 units. The significant volumes achieved are an indication of the Logan’s superior mileage, performance and quality.”

According to Jejurikar, the Logan has clocked steady sales numbers courtesy referrals from satisfied customers. “Its consistency and trouble-free run has helped the Logan capture a significant share in the market vis-à-vis competition,” he adds.

Jejurikar is upbeat, but the numbers don’t exactly look so peachy. In the first quarter of this fiscal, sales of the Logan declined by 11.46% compared its sales during the same period last fiscal to stand at 4,595 units. The A3 segment, however, grew at 14.09% in the April-June quarter to log 59,631 units, compared to 52,267 units in the corresponding quarter last year.

Growing competition may also be a cause for worry for the Logan. Tata Motors has launched a marketing offensive and introduced a new variant of the Indigo, in the form of Indigo CS, with an attractive price tag starting Rs 3.79 lakh.

For Mahindra Renault brass, however, this is just a temporary blip. It is ready to raise the bar with new variants and a refurbished communication strategy. And the repositioning of the Logan is dictated more by the need to establish an emotional connect with the consumer, than by any marketing exigency, says the company. At the time of launch, Mahindra Renault had positioned the Logan as a brand that will redefine its segment in terms of spaciousness as well as its performance and technological superiority. The slogan talked about the Logan as a ‘Wide Body’ car.

The “wide body” was a rational, product-specific positioning that has already been established in the minds of the target group, says Jejurikar. “We feel it is time to move on and connect with the TG at an emotional level.” So the new tagline, “Here’s the answer”. Of course, the brand still talks about the deliverables such as more mileage, better handling and great value for money.

To drive home the message, Mahindra Renault is beaming a high-voltage television campaign featuring Bollywood star Kunal Kapoor. “Kunal is slightly unconventional going by Bollywood standards,” admits Jejurikar. “He hasn’t done the typical Bollywood films. He lets his performance do the talking. Kunal matches Logan’s personality completely.”

The company has launched an interactive website, butwhy.in, where readers can post questions that do not have a straightforward answer. “The ‘But Why’ positioning reflects the mood of today’s youth,” Jejurikar explains. “They’re constantly asking questions: Why should I buy you? Why does this work this way? Why should I join my father’s business?”

In a way, the company is urging the new consumer to question and think before they make their purchase. “If they do question, they’ll realise that the Logan is a far superior performance car. And this insight has come from our existing customers. They are strong people who make a sound decision that is not merely based on looks,” Jejurikar asserts.

To support its mass media ad campaign, the company is also looking at below-the-line activities in a big way. “The brand that is topmost in the consumer’s consideration set is also the one that touches him instantly through what it has said to him. That’s an emotional cord, and that’s beyond reason,” says Jejuriakar.

Ramping up dealerships is an integral part of the agenda. Mahindra Renualt currently has 94 dealers in 72 cities. The company is widening the network with plans to add 54 dealers across the country with an addition of equal number of cities in a year or so.

All said, the big issue many of the so-called value-for-money cars face is striking a balance between the fleet operator and the individual owner segments. Brands such as the Qualis, Indica and Versa have come to be seen more as ‘taxis’ than private vehicles. “In Bangalore one can see Logans ferrying people to and from airports,” points out a senior advertising professional based in that city. “Will the Logan eventually go the Indica way? I also see a lot of offices using the vehicle for drops and pick-ups. Will it become the next Qualis? Bad image can act as a repellent as far as the individual consumer is concerned,” he cautions.

Yes, the Logan is attracting a significant number of fleet operators, admits Jejurikar. Being popular as a taxi car means that the car delivers. A fleet operator doesn’t want a car that is expensive to run and high on maintenance. Also, the more the number of taxis, the more affordable the spares.

“In the JD Power Asia Pacific 2007 India Initial Quality Study, the Logan received the best score of 65 PP 100, that is, Problems Per 100 vehicles, ahead of other leading passenger cars, indicating a high level of customer satisfaction. The products boast of unmatchable space both in the cabin and in the boot. This has led to a creation of new segment for us,” elaborates Jejurikar.

In short, image is not a big issue for the Logan. Connecting with the consumer is. For now, at least.