What is Customer Equity (2).

In continuation of the previous post on Customer Equity.

The Maruti Suzuki story illustrates both the effectiveness and the limitations to cultivating customer equity. My first car was a Maruti 800 and later I graduated to Esteem; when I could afford it I purchased a Zen as my second car. It was at this stage that I decided to move out of the Maruti brand, because they could not give me a good experience of luxury. Perhaps, my experience as a customer aptly characterises the Maruti Suzuki story in India, doesn’t it?

Maruti built up a leading position in automobiles in India since it launched the Maruti 800 in 1983. It soon followed with the Omni in 1984 and the Gypsy in 1985. Two economy models and an-off road utility vehicle, with a four-wheel drive that soon became popular as a vehicle used by the police and the armed forces. The success of Maruti Gypsy actually woke Mahindra and Mahindra from its complacence as the market leader of utility vehicles. But that is another story!

Having demonstrarted technology superiority over all the existing cars in its base model, Maruti followed the growing prosperity of its customer base in 1990 by launching the sedan-style, high-end model, the Maruti 1000. Then in 1993, it launched the mid-range hatchback, the Maruti Zen, following up the next year with another high-end sedan, the Maruti Esteem.

Like me, all Maruti customers have abandoned Maruti for other car brands that gave them a better luxury experience. While they still maintain their lead, at the both entry and midlevel, Maruti is facing a dire threat from their competitors. They can no longer remain complacent at the top! So what is the lesson we can learn from the Maruti Suzuki story?

While in the early days, the only gap in the market was the demand-supply gap, we could afford to be less concerned about the question of customer equity. The number of products in each market was so scant hat nobody was running out of customers, and it was just the production that needed enhancement. Today, the experience gap will hit marketers one day or the other.

What marketers in India are facing today is nothing short of a customer revolution that is demanding a better experience and voting with their feet.

Let us know what you think about it.


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