Thursday, September 21, 2006

Hero Honda Street : RIP

Brand : Street
Company : Hero Honda


Brand Count : 128


Hero Honda Street was the first venture of Hero Honda to the the scooter category. Street is not a scooter but a step through bike. The product category lies between a Scooterette and Scooter. Street launched in 1997 died a slow and quiet death.

The product was launched as a step thru bike was not entirely new product category. There was a step thru bike running in the Indian roads named Bajaj M80. Street wanted to create a market for itself or perhaps a new category. But the product failed because it was haunted by M80.

Street was the Indian version of the world famous Honda Cub series of stepthrus. Honda Cub was the world's largest selling single model bike which has sold more than 2.5 crore units. But how come such a product fail in India.
The case is about marketing mistake.The product failed in all aspects of marketing mix except the distribution.
The product was not good enough. It looked like a glorified M80 which was used by Fish vendors and the like. M80 was the cheapest and rugged step thru from Bajaj aimed mainly at the vendors who had bought this product not for its looks but for the price and utility. Since Street exactly looked like M80, it put off all the urban buyers.
The brand was priced extremely high. Hero Honda thought that because of the success of its bikes, they can charge the Street a premium but this price around 30% higher than M80 failed to show value to the customers.
The campaign was also not successful. The initial campaign tried to teach the customers the new Clutch less gear system and its efficacy, the customers was not impressed with this feature. Infact this gear system is famous elsewhere in the world but in India it did not click.
I wonder why Hero Honda ventured into bringing this model to India fully knowing that an exact replica is selling here that too at a lower price and quality ? It is plain arrogance or myopia trying to sell such a product with out any design change. Hero Honda thought that the brand name Honda will differentiate the product but it didn't happen. More over the product did not offer any value proposition to the customer except that it has a unique gear system.
The brand was also not sure about the target segment ,whether it aims at the gender or any specific category. Kick start mode eliminated the entry chance to the Ladies category and the lack of styling repelled the guys.
Brand Report Card for Street ( Dr Kevin Lane Keller)
Delivering on Customer's desires : Negative . The brand failed to understand the need for the customer in the aspect of design of the vehicle.
Relevance : The category had some relevance since the customers were looking for a powerful scooterette. Most of the mobikes were sub 60 cc. But the brand failed to capitalise on this opportunity.
Value: Negative. The high price of the brand did not offer any value proposition to the customer. Although the product was of high quality
Positioning : Negative. The brand was not positioned on any sustainable and important feature. This prevented the effective communication of value to the customer. This was one of the major cause of this brand's failure. Besides the Points of Parity with M80 created problems for the brand. The owners failed to foresee this problem.
Integrated Marketing Activities: Since the problem was with the basic design of the product, there was not much the other activities could do. The marketing activities was bound to fail.

Street could have been a success if it had changed its design. Indian consumers are very discerning and value conscious. This brand failed to understand that.

5 comments:

  1. i love my street modle 1997. Still i am running it. I call it my loding rikhshaw.

    Its unique gear system without clutch and rotary gear system is very good.

    Although i am not getting good service, parts for it nor its easy to get repaired easily anywere otherthan showroom (chares are very high)

    But i could not found its alternative and i have decided to run it till i can.

    ReplyDelete
  2. Anonymous11:58 AM

    Dear Harish

    I respectfully beg to disagree with you w.r.t. the reasons you have mentioned for the failure of Street model in India.

    Firstly, we fail to acknowledge that this was the largest selling two wheeler model of Honda and was selling like hot cakes in Indonesia (indonesian market is pretty similar to indian in terms of step thru's). That was why Hero and Honda wanted to replicate the same success story in India and that was why they brought it to india,

    Secondly, its comparison is not justified with M80, because M80 as a product and a brand was known mostly in Maharashtra and south India, whereas it had no brand equity in northern india, so the question of people comparing street with M80 does not arises, in the major market of north India.

    Thirdly, it was a revolutionary product in Indian two wheeler industry and was of highest quality standards. Even through it was launched in 1997 but people still drive it and are getting a mileage of 70kmpl, which is anything but magnifient. The engine quality was better that any other two wheeler at that time. So the allegation that the product was not good is far fetched.

    Fourthly,
    While communcating the qulities of your product, you also try to show POP's and emphasise on POD's, thats exactly what Hero Honda did while emphasizing on 'Happy Riding School' advertisement. They positioned it that way.

    Fifthly, when you say that the it was not clear for which sex it was aimed, perhaps it was aimed at both sexes. Incidently both sexes can drive step thru's were equal elegance.

    Now let us come to the reasons, why street failed.
    I read it somewhere that Hero Honda after suffering the debacla of Street, conducted MR and found out a great insight that, people of India were of lesser average height that people of indonesia and japan (for which the product was actually designed, so the people of india were not feeling comfortable while sitting over a street.
    Also the 30% premium which you talk about, is very right. Which can be termed as a blunder, which must have alienated potential customer.

    That is all I have.

    ReplyDelete
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    ReplyDelete
  4. Anonymous12:14 PM

    Honda's street is highest selling problematic to its other high end city models like passion,splendore,and getting less profilt from street, it shut down production of street and cd100ss because these are competing other prooducts of its own but today petrol is 70 rs need relaunch street and cd100ss

    ReplyDelete
  5. Indian buyers are price sensitive.The quality comes next .Indian buyers have a tendency of followers.Lack of technical knowledge and general education is another reason.I am at Bhopal,and the other day when I was talking to my mechanic,I asked as to why there were plenty of Yamaha scooters in kerala and not many seen in this part of the country.His immediate reply was, the people of Kerala are educated lot.

    ReplyDelete

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