Saturday, September 1, 2012

Innovate or Perish -- Lessons to be learnt from Indian market


By Neeraj Mahajan

Indian consumers may recall the days when just two cars – Ambassador and Fiat used to dominate Indian roads. Both these cars manufacturers were not inclined towards innovations – hence over say 50 years, they almost reluctantly brought in newer versions of the old models. But realistically speaking, apart from a small metal plate which read, Ambassador Mark IV instead of Mark I, there was hardly any fundamental change in the basic design, looks or functionality. These cosmetic changes did not satisfy the needs or wants of the average users who were highly dissatisfied. Still this went on for quite some time. Then almost overnight the scenario changed. Suddenly the floodgates of Indian automobile industry were flung open. Many new players brought it many new products. Suddenly there was a plethora of choices for the consumer as far as colors, show-off value, style statement, utility or functionality was concerned. All of a sudden, a range of cars- were available off the shelf for different target segment and price bands -- catering to the buyer’s needs, affordability and aesthetics sense. Soon, low and high end versions as well as petrol, diesel or CNG variants of the same cars were available for the discerning buyer. This was truly the age of innovations, new ideas and new ways of doing things to satisfy, keep the customer happy and engaged. This episode is an eye-opener which teaches us three things:  

Lesson # 1: Innovation is the key to success. 

You may ignore it at your own risk and cost. Where are the Ambassador or Fiat today? From being the market leaders they have been reduced to insignificant players because of lack of innovative spirit. In whatever you do you cannot ignore the present and future trends as far as customer preference or buying decisions are concerned. This is very important.   

Lesson # 2: Customers are ready to buy provided you give them the reason to buy

Surprisingly, the manner, in which the Indian consumers have purchased, sold off and again purchased new cars in the last one decade or so, has disproved the traditional belief that Cars are a lifetime purchase for the Indian buyers. This is not so anymore… people are ready to buy a new car and change it every 2-3 years if there is a better car available in the market.

Lesson # 3: Need to innovate is not unique to Cars alone, even buses need to innovate

One of the reasons why Cars have changed so much in terms of design and utility while buses haven’t-- is because each individual car is associated with its owners pride. The way it looks, drives or attracts attention – makes a big difference to his/her comfort, style and status in the society. On the other hand, buses have been considered to be just another means of public transport, or utility vehicle. That is why – buses a majority of which are in any case state-owned haven’t seen many changes in terms of design, structure, comfort and interior-exterior get up. That is why their function and utility to pick up and drop, large number of passengers – and carry them over a distance is considered to be more important than their looks or in-transit comforts.

All this is set to change in a big way. The buses in future are going to be very different from the ones that exist today. Winds of change have already begun to sweep across the global bus and coach industry. The buses in future will be more efficient and more environmentally-friendly. The core philosophy behind them as movers of people -- would be to move more people, move them comfortably, silently – making the least possible noise and with the least possible impact on the environment. In true sense of the term, it will be the age of green, clean, smart and efficient mass transit systems.