Renault switches focus with value-led Dacia launch

Dacia: value pricing
Dacia: value pricing

The Renault-owned Romanian marque's strategy is unashamedly value-led.

There was a time when entry-level car brands were the laughing stock of the UK market. Manufacturers such as Skoda and Kia were the butt of cruel jokes from a nation far more at ease with 'mid-market' competitors such as Ford, Vauxhall, Peugeot, Citroen and Renault.

All this changed in the wake of the credit crunch. After years of slow rehabilitation, the lower-price manufacturers were given a leg-up by the UK government's car scrappage scheme, which offered £2000 toward the cost of a new car in exchange for a buyer's old vehicle.

The scheme transformed the fortunes of Korean marque Kia. It ended 2007 with a measly 1% share of the UK market; that figure is now up to about 3.2%, according to the SMMT, greater than that of bigger names such as Honda, Fiat - and Renault.

By comparison, the French manufacturer has suffered a torrid time, with its share so far in 2012 dropping below 2%. In an effort to win back those customers who have traded down, Renault's UK team has turned to its Romanian entry-level marque Dacia, which it has owned since 1999. The brand has promised to be unashamedly value-led, with launch ads by Publicis London espousing 'function over frivolity' and positioning the brand as the 'enemy of the unnecessary'. Its SUV 4x4 Duster model will be sold at less than £9000, with a five-year warranty.

However, will this be enough to attract customers, or will it convince Renault's remaining buyers to trade down?

We asked Mike Moran, a former marketer at Ford and Toyota and now chief executive of The Orchard Consultancy, and Jamie Elliott, managing director at DLKW Lowe, which previously handled the ad account for Vauxhall.

RENAULT STAT

1.85% - Renault's UK market share in 2012, to 30 June

Source: SMMT


MIKE MORAN, Managing partner, The Orchard Consultancy (former marketer at Ford and Toyota)

Once upon a time, Renault was a top-five brand in the UK with a great image. It had a 200-strong dealer network making reasonable profits, thanks to high-selling fleet models such as the Laguna and plentiful retail sales from the much-loved Clio.

Today, Renault languishes in 11th place in the market, and a recently announced strategy involves closing 30% of the dealer network and slashing five of the nine car models from sale in the UK. Papa and Nicole would surely be turning in their graves.

Or perhaps not. Renault has taken a brave but necessary step to retrench and dig in for a long-term UK recovery underpinned by more profitable distribution and the introduction of the budget Dacia brand.

The success of marques such as Skoda and, latterly, Kia and Hyundai, demonstrates what is possible from separate showrooms, but Renault's key challenge with Dacia is to make sure it doesn't cannibalise Renault sales.

Returning Renault customers might see the amazing Dacia value proposition and simply decide to opt for something cheaper.

The Plan

- Create highly distinctive tactical print communications to widely broadcast the arrival of the brand. Efforts to date have been poor.

- Focus on experiential marketing taking the product to shopping centres and high footfall areas.

- Over-invest in training to prepare sales staff for the twin challenge of minimising cannibalisation and converting interested Dacia prospects into buyers.

JAMIE ELLIOTT, Managing director, DLKW Lowe (which handled the Vauxhall account)

At £8995, the Dacia Duster has a massive price advantage versus something like Nissan's Qashqai, which is pretty much the same size but will set you back almost twice that. The Duster is not a bad SUV either: as one reviewer put it, 'there is no logical reason not to buy this car'.

This is a great starting point for an anti-brand strategy. Those who view cars as purely functional can feel they are paying not a penny for the Dacia 'marque'. Either that, or, it's 'like the brands they like, but for significantly less' (a la Aldi). Both are solid challenger territories.

The more interesting space Dacia could occupy is as 'the new car brand the used-car buyer can afford'. Encouraging used car buyers to trade up to a Dacia would also effectively position it as the best-priced new car.

This approach gives Dacia a good chance of bridging the two biggest pools of customer demand. As the market shifts, this feels like a less fragile position to occupy.

The Plan

- Run PR driving the Renault connection, providing critical technical credibility.

- Make strong activity plans for local dealers, with incentives to use centrally produced creative.

- Create partnerships to help establish the exceptional price positioning, with, say, Money Saving Expert (which has 7m subscribers).

- A digital-first strategy would enable people to discover Dacia's great value for themselves; it would also eschew the big TV and national press category conventions.

Discussion

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now

Latest

Lynx tells men not to leave love to fate
HBO captures awkwardness of watching sex scenes with parents
Primark to open first US stores with Boston chosen as flagship location
Marketing spend on the up but a reality check is needed before celebrating
Top 10 ads of the week: Jackpotjoy and BT Broadband fend off Kevin Bacon
Lidl beats Tesco to 10m Facebook fans
Center Parcs ad banned for encouraging parents to take kids out of school
Coca-Cola, Cadbury and Amazon named top brands for targeting youth market
Leaked document shows Nokia to be rebranded as Microsoft Mobile
Nike lays-off hardware staff in move that casts doubt on future of FuelBand
Greenpeace says save the bees or humans will die
What brands need to know about changes to VAT and online downloads in 2015
Jimmy Savile victims urged to claim compensation in new ad campaign
UKIP launches biggest  ad campaign and stirs up 'racist' accusations
Apple boss Tim Cook provides voiceover on ad touting firm's renewed green commitments
John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message