TUESDAY, AUGUST 31, 2010
Brand Update : Can Ambassador be saved ?
Recently the good old Ambassador was in the news that the brand owners - Hindustan Motors is planning to relaunch /rejuvenate this heritage brand. Both the brand and company is in deep crisis with HM posting losses of Rs 43 crore last year and its networth declining by about 50%.
The company plans to relaunch the Amby in a new look and is planning to entrust a design house with the task. The report also suggest that the new Amby will have a retro- look and will be in the price range of Rs 5- Rs 7 Lakhs. The new Amby will be a niche product.
The interesting question is can this brand be saved with the new strategy ?
From the report about the new Amby launch, it will be tough for the brand to regain its lost glory if the brand is going for a niche variant. According to Economic Times, Ambassador sells around 600 units per month in a market of 2 lakh cars/month.
Ambassador is now in a rut which is its own creation. The brand is the classic example of marketing myopia. The company took the customers for granted and refused to change when the entire market changed. The brand did nothing when faced with competition from Tatas and Maruti. Instead of changing its core DNA, the brand relied upon cosmetic changes. When the brand needed a drastic revolutionary change, HM decided to get stuck with the old product.
The current strategy of a niche Amby is again a patch-up . This brand cannot survive on patch-up strategies. I don't think that the core brand Ambassador will revive with the launch of a niche high priced Ambassador. With the brand equity in shambles, how can the brand expect consumers to pay a premium for the new Amby variant ?
The high priced Marquee variant will work for iconic brand which are facing a decline. But Ambassador was not an icon. It was a market leader and consumers bought the car because they did not had a choice. Not because...