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Brand Analysis- Mahindra Scorpio

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Introduction• Scorpio launched in 2002 as an SUV with a ‘car plus’ package the message

conveyed –the car you would walk into, not crawl into.

• Increased SUV market size, also touched base with the `C' class cars segment

• Received a National Award for Research & Development 2003

• Car of the Year Award 2003 from Business Standard Motoring, BBC World Wheels and CNBC Auto car

• Went global in 2003 with its launch in Latin American, Middle East and South African markets

• In 2006, just 4 years after its launch it crossed the one lakh mark

• Chosen for the Gondwanaland Expedition-a landmark assignment for the vehicle

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Household products limited

Concept development and testing

• A toilet soap in high price segment that contain jasmine fragrance

• Made from pure vegetable oil against animal fats

BRAND MAP

Product development

• Task given to R&D to develop jasmine fragrance perfume

• 2 out of 6 developed were finalized based on better impact than competitor

• Based on panel survey of 3 panel with women 18-35 years age final product was finalized

Market testing

• Testing the products in market which was responsive like indore and not responsive like Hyderabad

• Run test for the period of 9-12 months• Launch planned with launch conference

attended by sales manager, supervisor and sales man. For the market selected

• Display contest in retail shops to achieve high visibility and slides in cinema

Commercialization

Company was late entrant in the marketCompany would go nationally based on performance in test marketTargeted traditional customer with high income (above 15000rs per month

Company should go nationallyMarket stratergy

• 1st partTarget customer with income level above Rs 30000Target jaimala customer in responsive states as company cannot gain market shareIgh growth should be preference against profit in initial phase• 2nd partPricing should be kept sameTo capture market initiallyintroductory offer should be given

Market stratergy

3rd part

In long term after initial discount company should focus more on advertising

Interpretation from exhibits

• After initial offer company was able to push itself better in responsive state in 2 months 200% more market share than jaimala and gradually it tapered off

• Penetration was high in Indore in both income group as compared to Hyderabad in A income group during last 6 months of testing

• Even cumulative penetration shows the same pattern• Sehra gained its market share mostly from low priced

offering and was able to gain share from jaimala in second period

Exhibit 1

0

100

200

300

400

500

HyderabadIndore

Initial increase in the sales is due to intro-ductory discount pe-riod offer, where many schemes were given to consumers.

Market Share By Retail Shop AuditSehra vs. Jaimala (Exhibit 2)

OctoberDecemberFebuary April June02468

1012141618

SehraJaimala

Month by Month Analysis of % of households buying Sehra and Jaimala

( Exhibit 4)

Oct+Nov

Dec+ Jan

Feb+Mar

Apr+May

02468

101214161820

Sehra

Oct+Nov

Dec+ Jan

Feb+Mar

Apr+May

0123456789

Sehra

I.C. ‘A’- Income above 10,000

I.C. ‘B’- Income between 5,000 and 10,000

Market Share as measured on consumer panel, by value (Exhibit 5)

Oct+Nov

Dec+ Jan

Feb+Mar

Apr+May

012345678

Sehra

Oct+Nov

Dec+ Jan

Feb+Mar

Apr+May

00.5

11.5

22.5

33.5

44.5

5

Sehra

FOR HYDERABAD FOR INDORE

Market Share and Market Potential

Market Share

Currently, Mahindra’s Scorpio commands a huge market share of 38.5% in the Indian SUV segment.

Market Potential

Indian auto-sales grew by 8.86% (929,596 vehicles) in May 2009, compared to the May 2008 (Source: SIAM).

Mahindra’s UV segment sales in April 2008 stood at 9,809 units as against 7,126 units in April 2007, which translates into a growth of 37.7%.

Mahindra’s exports grew to 295 units during April 2008 from 147 units a year ago.

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Market Share and Market Potential

Potential Markets:

• SUV segment

• C-segment

• Global Markets (geographic)

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M & M Segment

Industry M & M Market Share

Q4’09 Growth Q4’09 Q4’08 Growth Q4’09 Q4’08

UVs 76,280 -10.90% 48,088 42,999 11.80% 63.0% 50.2%

Cars C-segment

74,571 11.20% 2567 8120 -68.40% 3.40% 12.1%

Source: SIAM and Industry Data

Category 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Passenger Vehicles

989,560 1,209,876 1,309,300 1,545,223 1,777,583 1,838,69

Growth 36.81% 22.26% 8.22% 18.02% 15.04% 3.44%

Growth Rate of Passenger Vehicles in Indian Market

Comparative Growth Rates

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Market Potential

MARKET PENETRATION

•Semi urban•Potential C-Segment

•Untapped SUV Segment

PRODUCT DEVELOPMENT

•Scorpio Hybrid•Scorpio Caravan

MARKET DEVELOPMENT

• Rural• Global

DIVERSIFICATION

EXISITING PRODUCTS

NEW PRODUCTS

EXISITING MARKETS

NEW MARKETS

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Geographic Share

Asia Pacific Europe Americas Africa and Middle East

Indonesia United Kingdom Uruguay Egypt

Australia Italy Brazil South Africa

Malaysia France United States Qatar

Sri Lanka Spain Chile

Bangladesh Turkey

Nepal

• Country wise geographic reach

• Positioned across all geographical segments targeting both the urban as well as rural consumer

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Powerful, in control, Sophisticated

Living life at one’s own

terms

A cut above, Expects the best

from Life, Nothing Else Matters.

Styling, International Looks, Power Car Like

Comfort

Styling, International Looks, Power

Car Like Comfort

Successful, new economy

Businessman, Self Made, Evolved Taste

Physique

Relationship

User Image

Persona

Culture

Self Image

Value PropositionBrand Identity Prism - Scorpio

Product extensionProduct

ExtensionProduct Offering Price

Scorpio LX Base model INR 7 L

scorpio SLE Base model with added features like voice assist, Anti lock braking system (ABS), Fog lamps and two toned upholstery

INR 8 L

scorpio VLX High end gadget stuffed model for tech savvy consumers. Features include tyre-tronics, intellipark, Rain and light sensor, cruise control etc.

INR 9.5 L

scorpio VLX Automatic

The VLX model with automatic gear box. Targeted towards the urbane as well as women drivers

INR 10 L

scorpio Getaway Pickup version aimed at adventure and weekend drives

INR 8.6 L

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Product Life Cycle

Launched in June 2002. Engine designed in

collaboration with AVL, Austria

2004 – scorpio SLX launched with two tone

exteriors giving it an upmarket look

2005 – first Indian car with CRDe (common rail

diesel engine). More power and environment

friendly

2006 – Major changes in scorpio with 43

additional features.

2007 – V series ( VX and VLX) and getaway

version launched. V series aimed at the luxurious segment

2008 – scorpio automatic launched. Aimed at city drivers

and female drivers

2009 – Minor facelifts. Compliance with BS IV

Emission norms

Introductory Growth Maturity

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Product Category‘C’ Segment SUV Class

Mahindra projected scorpio between the ‘C’ segment and the Sports utility segment (SUV) and appeals to more of ‘C’ segment customers. It was not all compared with the utility

vehicle segment

Utility Vehicle Segment(Mahindra Bolero,TATA Sumo)

Ford Ikon

Hyundai Accent

Honda City

TATA Safari

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Competitor Analysis• The mid size car(C-segment) market was the competitive arena for Scorpio

• It had to appeal to segment C buyer and be aspirational for segment B buyers

• Scorpio perceived Segment C cars as its main competitors even though it was not the other way around.

• Hyundai Accent, Ford Ikon, Opel Corsa, Maruti Suzuki Esteem on one side whereas Tata Safari and Toyota Innova on other side.

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Threats1) Other Sedan’s2) Indian consumer mentality.3) Mini SUV segment4) Second Hand Luxury SUV

MarketWeaknesses1) Mahindra Image of

being uncomfortable, rough, not easy to drive

2) Rural imagery

Strengths1) Rugged & Tough2) Reliable3) Economical Vehicle4) Well-respected

manufacturer5) Scorpio has the

largest top of mind recall in the SUV segment

6) Technologically advanced Opportunities

1) Introduction of new variants to remain the market leader in the segment

2) Growing market for Tough, stylish but affordable cars

Scorpio

SWOT ANALYSIS

TATA Safari Toyota Innova

Strengths Weaknesses

1) Spacious interiors

2) Greater comfort factor

3) Height adjustable drivers seat

4) Ride Quality5) Both diesel and

petrol variants6) Affordable

Range

1) High maintenance cost

2) Costly spare parts

3) Less stylish as compared to Scorpio and Innova

Strengths Weaknesses

1) Commercial vehicle as well as a family car

2) Luxurious and comfortable

3) Bridged the gap of space and seating capacity in sedans

4) Both diesel and petrol variants

5) Less operating cost6) High resale value

1) Higher price. as compared to scorpio and safari

2) Not meant for hilly areas and rough roads

3) Tough to get through in traffic

Major Competitors

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Comparison on other parametersMileageHighway (Kmpl)

Mileage City

(Kmpl)

Mileage Overall(Kmpl)

Fuel Tank Capacity (Liters)

MaxSpeed

(Km/hr)

Seating Capacity

Scorpio 12.7 9.8 10.4 60 149 7

Tata Safari

13.3 8.6 11 65 139.5 7

Toyota Innova

12.8 10.2 11.4 55 148.5 8

• Toyota Innova is more fuel efficient as compared to Scorpio.• Scorpio did not exceed its seating more than 7 to restrict its use as a taxi or a

commercial vehicle.• With its new powerful engine (mHawk) , Scorpio can attain speed of 60kmph in

just5.7 seconds.• With its new variants scorpio has been able to maintain its leadership position.• First preference for tough drive in hilly areas and troublesome Indian Roads.

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The Consumer- Car Perceptions

• Size matters- big size stands for status

• Consumers seek latest technology

• The sheer thrill and passion of driving an power packed SUV.

• But along with the others, luxury was a very important parameter

• International vehicles define imagery .

• Consumers wanted to consume premium imagery at prices affordable to them.

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Identifying the need gap• There was a need to look beyond UVs in terms of competitive framework to attain volumes.

• Volumes in the automobile industry were coming from B and C segment cars. Thus Mid sized car segment was the arena for Scorpio to attain volume growth and market share.

• There was no SUV in the country that masses could buy.

• To make SUVs a mass concept in India- UVs needed to be seen as comfortable, easy for city driving and should have the imagery comparable to international brands.

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Market Strategy Positioning

Car Plus approach was very bold and innovative. Created new frames of reference.

Brand Promise Luxury of a car, Thrill of an SUV.

“Nothing else will do”-superiority and uncompromising attitude.

Endorsement Scorpio from Mahindra, a shadow endorsement. Instability in the automobile

sector after Daewoo fallout. Mahindra name used to indicate stability.

Pricing Adopted the penetrative pricing strategy positioned with a starting price of Rs. 5 -7

Lakhs. High degree of cost competitiveness.

Promotions A phased communication approach. Promotions-PR, Mass Media, Direct

Marketing, Events. The television commercials depicted the product and a pan-global imagery , even

as the print advertisements focused on functional benefits 30

Strategy• Distribution Strategy

• Serve less markets at a time but serve them well

• Phased Launch

• First in Metros Mumbai, Delhi, Bangalore, Chennai. • Twenty cities were included over a period of 4 months • 50 cities were covered in a year

• Unique Customer Experience

• The showroom revamp was centered around the intention to provide a uniform customer experience at all the touch points and to provide the customer with a unique “experience” and not just a “product”.

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Response - The strategy delivered

• Volumes and Market Shares:

• Achieved its volume target of 12000 vehicles in the first 9 months of its launch.

• Image:

• High recall for the Mahindra brand as well as for the product .

• Awards

• Scorpio Impact on M&M• Increase in share price • Increase in market share• Image makeover from a rural player to a national player

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• It is a brand built on an ever-evolving game plan.

• It is a tale of category creation and a great example of the ability of a company to derive market growth.

• The product has gone through stages of continuous innovation and improvement.

• ‘Scorpio’ has proved as a Milestone for M&M and the Indian Automobile Industry. Its strategy has been the crux of sustainable growth.

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Conclusion

References• www.gaadi.com

• www.mahindra.com

• http://www.mahindrascorpio.com/scorpio_refresh/index.asp

• www.mouthshut.com

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