Mahindra Case Study - Creating the Scorpio
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The document discusses how Mahindra should position the Scorpio SUV in the Indian market. It analyzes competitors and market segments. It describes the development of the Scorpio, including a $120 million investment and 6 years to create an indigenous vehicle. Market research showed consumers wanted image and minor details over functionality. Mahindra used a unique manufacturing strategy of outsourcing design and engineering to lower costs. The Scorpio was positioned as a "Car Plus" to appeal to those wanting an SUV's power in a car. Dealerships and marketing differentiated the Scorpio from other Mahindra vehicles. The document recommends positioning the Scorpio as multi-utility for families and urban buyers through branding, targeting
Mahindra Case Study - Creating the Scorpio
- 1. How should Mahindra position the Scorpio? SMP12 Mumbai Borivali Team
- 2. United States ◦ General Motors ◦ Ford Motors ◦ Daimler Chrysler Group Japanese ◦ Toyota ◦ Nissan ◦ Honda European Market ◦ Volkswagen ◦ Peugot
- 3. Five Segments based on price ranges ◦ Two wheelers ◦ Micro hatchback cars ◦ Ultra hatchback cars ◦ Mid-sized cars ◦ Utility vehicles
- 4. Established and assembled Willys Jeep kits. Listed on BSE 2 years later 1945 1961 Started production of light commercial vehicles and tractors Restructuring of Mahindra forming in the core activities of Uvs, LCVs and tractors in one group 1994 1997 Scorpio story began as part of the restructuring
- 5. $120 million investment with 120 full time team members making it the largest initiation of the company 19 cross functional teams looking after various divisions including design, manufacturing, testing etc. handled very differently than industry standards 6 years for completion, 100% indigenous Stylish and powerful, value for money, some exciting taglines making it very interesting
- 6. Increased revenue of the company in 2002-2003 Changed the automotive market and forced competition relook at the UV sector differently Market scenario in the 1990s had forced Mahindra to rethink strategy due to players like Toyota, Telco, etc.
- 7. Setup plant in Nashik to manufacture Scorpio Integrated Design and Manufacturing (IDMA) ◦ Multifunctional product design and development team ◦ Quick decisions along with checks and balances ◦ Flat hierarchy reporting into 1 head, allowed for high performance ◦ Balancing of costs within departments Project scope changed from Rural to Urban market
- 8. Building of the brand considering the Indian consumer in mind 6 months of market research holding product clinics with vehicle owners, qualitative research Key highlights showed surprising results ◦ Noise and vibration not a priority was highlighted in the survey ◦ Consumer paying attention to minor details ◦ Image conscious ◦ No one sees my house but my car, so I need to make an impression
- 9. Need to keep low costs, employed unique technique in auto manufacturing – moved away from the conventional strategy Turned over significant part of process to suppliers All major systems designed and engineered by suppliers, also carried out testing Allowed flexibility to suppliers by conveying requirements ◦ Temperature drop needed over time, rather than number of air vents needed. Provided flexibility to suppliers to determine their own ways to meet requirements
- 10. Low cost investments for manufacturing ◦ $120 million against $280 million Flexibility in choosing partners, though unknown against MNCs who had a preferred vendor list Fewer hires, low manpower costs for engineering development in India Managed very low costs at the testing phase ◦ MNCs build 200 prototypes at 15-20 times cost of the vehicle ◦ M&M build 75 prototypes at 2-3 times cost of the vehicle
- 11. Launch of Bolero used for various marketing activities including media, brand development and planning of the launch What customers wanted was distinctly different than existing perception of Mahindra Built brand identity prisms showed significant gap to be bridged Chose to position the Scorpio as a car, not a UV because of blurring boundaries Advertising phrases of “Car Plus” and “Luxury of a Car, Thrill of a SUV” was meant for those considering a car but wanting added SUV power Held press driven events to sell positives of the car to auto experts. Provided publicity for functional elements
- 12. Capitalized on existing dealers while differentiating Scorpio from other products Dealers needed to have separate outlets for Bolero and Scorpio, reinforcing the message that vehicles had distinct identities Sales areas separated visually by using color scheme and décor Upgrading of the outlets and staff with personnel to handle queries of the urban market
- 13. Core Product – Multi-utility big car Embodied product – the styling, seating, colors, space, add on features, power Augmented product – credit and financing schemes, delivery, service, guarantees, perceptions Embodied product Augmented product
- 14. Product classification ◦ Moving from a business to consumer product ◦ Moving from rural to urban brand Branding for the target audience: Male, Female, Young, Families ◦ Male: Sportiness in showrooms, technology innovation, urban feel, SUV styling ◦ Female: comfort, show women drivers in ads, up-styling, luxury, market it as a car and not SUV ◦ Young: Sportiness, technology innovation, urban, trendy ◦ Families: Safety, cost effective, reliable, high customer service, comfort seating, user friendly features beyond the driving seat
- 15. Using the target audience build a brand personality that addresses the five dimensions of psychosocial meaning: ◦ Sincerity: down to earth ◦ Excitement: spirited, imaginative ◦ Competence: intelligent, successful ◦ Sophistication: urban, upper class ◦ Ruggedness: tough, solid, reliable Brand Person ality Sinceri ty Excite ment Comp etence Sophis ticatio n Rugge dness
- 16. Deepak Bhandari Hema Wagh Shreepad Bhogaonkar Vipin Om Sharma Vivek Chandra Kosha Desai Shashank Shyam Abhyankar