Maruti Suzuki India Limited: Leveraging the Changed Economy
(9 pages of text)
Although Maruti Suzuki India Limited (MSIL) was the leader in passenger vehicle sales in India in May 2016, it was having difficulties breaking into the high-end car segment. There were multiple strategies that MSIL could have used to deal with this problem, such as; changing its brand image from small automaker to high-end automaker; staying in the small car market; penetrating the market further by introducing new models and their variants in the same segment; or striking a balance between both of the other suggestions (i.e., a mixed strategy).
A sudden change in MSIL's image could harm the company's existing share of the small car segment. At the same time, remaining firmly in the small car market could be detrimental for MSIL's market leader position in the years following, as the small-car-dominated market was gradually moving towards segments such as mid-size and executive cars in India. Which strategy (or combination of strategies) should the company pursue?
The case is designed for use in a core MBA-level marketing management and strategy management course, but it can also work well in elective courses such as brand management. The case can be used to do the following:
- Illustrate the concept of brand image, and encourage discussion of the product, price, place, and promotion of a brand, as well as the positioning of a brand in relation to its competitors.
- Highlight the issues involved with a stagnant brand image in a dynamic and competitive market, and to explore the pros and cons of different marketing strategies by analyzing the growth of different segments of cars, MSIL's portfolio gap, and shifts in consumers' perceptions.
- Illustrate the concept of product line extension by explaining upward and downward line stretching.
- Show students how the decoy effect pricing strategy can prove profitable when the implementation of long-term strategies requires substantial time and investments.
India, Large, 2016
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