Brand Arrogance: How Market leaders lose the plot – lessons from Honda

Market leaders are always in a peculiar position. Always faced with the daunting task of keeping their position, Often than not, they lose track of what got them to the top and end up as laggards in the Industry they once dominated. In other words they become victims of Brand Arrogance.

Take Hindustan Motors (HM) the makers of the iconic ‘Ambassador’ for example today they are a shadow of their former self. But up until the mid- 80’s the only challenge for Hindustan Motors was coming from Premier Motors and a substitute competition from Bajaj scooters.

But then the arrogance steeped in and HM never thought of providing what customers wanted and slowly but surely slipped into oblivion.

Twenty years later, another auto company is going down the same route and this is actually a surprise. When Honda entered India, it was with a bang. They had brought in a popular car that was in many ways built for Indian roads, the Honda City. In the early 2000’s it used to be a matter of pride to own and drive a Honda City. City ruled the roads in its segment for many years but soon the Customers were looking for a change and Honda was not listening.

They released a Civic as a logical upgrade but that did not have many takers. Honda Accord was too expensive for most. The Honda Jazz though a very good car was definitely over priced for its segment.

And after losing much of the market share Honda finally launches the Brio one of the cheapest cars in its segment. But in my opinion it is a little too late.

The Brio comes in at a time when the market is flooded with cars, and also with petrol only variant when the Petrol prices are at an all-time high. Further Honda cuts the prices on the Jazz and City, an act that it has never done.

It is not difficult to figure out what the result would be.

So how can a market leader avoid brand arrogance?

I believe there are three simple steps in which a good brand can keep its ears open and be cognizant of what the customers are saying.

Listen to the customer

Often brands go into a ‘speak only’ mode and even use their communication channels to only broadcast. They often stop listening and taking in any feedback from customers and prospects. I once recently overheard a Honda official calling the City a luxury car. I was really amazed at that analogy, it could have been 10 years ago but now with every second car being a sedan, the concept of luxury in India had become an Audi or Bentley.

Effectively Leverage Social Media

A quick check on the Honda India Twitter account shows just 240 odd followers and 740 odd tweets. In a piece earlier I had discussed what lessons Marketers can learn from Volkswagen.

Currently Volkswagen India has about 5000 followers and has been present in India only in the last two years. Also Volkswagen is running a contest which is in sync with its marketing campaign for Jetta called ‘anything4jetta’.

Brands should always strive to build a community and engage the same to bolster themselves. A good example to this effect is Apple which over the years has built a strong community of Apple fanatics who would not hesitate from paying the price for an Apple product.

Play to your strengths

Honda has traditionally been strong at R & D. Hence it should continue doing the same rather than trying to reduce the price and get into a very dangerous price war which its competitors like Suzuki and Hyundai. I feel what Honda should have done earlier was to dazzle existing customers and prospects with its technology by bringing out cars with advanced features that the Consumers are seeking. Volkswagen did introduce many new features on the Vento and stole the march over Honda.

In conclusion I feel that most brands, when they get into leadership position, forget about the very attributes that got them there. This situation is not endemic to Auto but can be seen across Industries.

It is the role of the marketing managers to ensure that Brand Arrogance is kept away and customers are always the focus of a brand whether it is a leader, challenger or niche player.

Your thoughts welcome!