Sunday, March 20, 2011

Honda Jazz : Why So Serious !

Brand : Honda Jazz
Company : Honda

Brand Analysis Count : # 476

Honda Jazz is an interesting marketing story. The brand, which is from world's renowned automobile company, is struggling to find its space in India's automobile market. Indian passenger vehicle market is seventh largest in the world and despite the recession, the market grew at a rate of  25.6 % in 2010. According to an estimate from ICRA, the passenger vehicle market in India is expected to touch 2.5 million units in 2011. 

The small car segment is the largest segment in the Indian passenger vehicle market with a contribution of 79% of volume sold. The small car segment is classified as A1 and A2 segments with A2 segment denoting the premium hatchback cars. The market is dominated by Maruthi , Hyundai and Tata Motors with Ford and Chevrolet gaining marketshare at a rapid place.

Honda Jazz was a much awaited small car from Honda. The brand was launched in India in 2009 quickly disappointed the consumers with its arrogant pricing. Before going into the marketing practices, a quick look at the history of the brand. Jazz had its origins way back in 2001. Jazz is the Indian version of Honda Fit which  has achieved commendable success in other markets. Everyone expected Jazz to create a new segment of premium hatchback but alas.

When Honda  announced the intention to launch a hatchback, analysts were Gung-ho  about the prospects. Main  factor behind the excitement was the huge success of Honda City which created unmatched brand equity for Honda cars. 

Honda Jazz was undoubtedly the best looking hatch on the road ( personal opinion). The car is sexy and sporty and the Honda tag ads tremendous equity on Jazz. But despite all these, the sales was lukewarm. The main reason being the arrogant pricing.
Jazz was launched at a price point of Rs 6.98- 7.33 lakhs making it one of the most expensive mini hatchbacks at that point of time. The brand was priced around 2-3 lakhs premium from the nearest comparable hatchback . 
Another significant dampener to the success of Jazz was that its price was almost near the price of the best selling Honda City. While City was 1-2 lakh more than Jazz, potential buyers could easily stretched their budget to own the best sedan in the Indian market. Jazz being a petrol car also lacked the economy factor which is a significant criterion for Indian consumers. 

Honda seemed very laid-back about this issue. The company was in an arrogant mode and displaced this issue with an attitude " if one wants to buy Jazz, let him pay this price ". And consumer opted not to pay that price. 
The company never admitted that Jazz sales were low or below expectations and maintained that they were happy at the sales figures. In my personal opinion, Jazz had the potential to be the next Swift and lost an opportunity to become one. Its ambition of creating a super-premium hatchback also was not realized because of close pricing with Honda City.

Jazz was launched with a positioning of a sporty hatch . The brand had the tagline " Why So Serious " . The brand invested very little in terms of promotions .
Watch the launch campaign  : Honda Jazz

There was nothing great in the launch campaign and the company did not do much to strengthen the positioning of Jazz as a sporty car.
Recently there was lot of activity around the brand. Honda launched a spruced up version  Jazz X with a new campaign " Bring Back the Feeling ". The campaign was clutter breaking and focused more on the feeling of exhilaration rather than rational product features.
Watch the campaign here : Jazz 
The new campaign is not going to do much for the brand. Having said that the market has matured and consumers are now open to spending more on premium hatchbacks. Lot of upmarket hatchbacks are now on road which is a good news for Jazz. But the fact that Jazz is petrol is still the Achilles heel for the brand. 

Am still confused about rationale behind the pricing of Jazz. Honda is a master marketer and why did the company chose to play down the potential of Jazz ? It is common sense to anyone looking at Indian market to observe that pricing Jazz and City in a close range can be suicidal for Jazz. 
Any ideas ??