Scorpio From Mahindra
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The document discusses the launch of the Mahindra Scorpio vehicle in India. It provides background on Mahindra & Mahindra and the context for why they launched the Scorpio, as they were losing market share. It describes the objectives and process for developing the Scorpio, called IDAM, which utilized a cross-functional team and global partnerships. Marketing strategies included positioning it as a premium SUV at an affordable price point. The Scorpio was a success, helping Mahindra increase market share and improving their brand image.
Scorpio From Mahindra
- 1. Scorpio from Mahindra Given by Presented by Prof. N. H. Mullick Tarun Kumar Arya Zia Ahmad Vivek Sharma Geared Up For Success
- 3. Introduction: Indian Automobile Industry Today most international car manufacturers have entered the Indian market. As it one of the fastest growing economies in the world. As India provides excellent global technologies, most international Car manufacturers can access these through joint ventures with India. Some interesting facts about the Indian Automobile industry:
- 4. Introduction: Indian Automobile Industry India is a second largest two wheeler manufacturer in the world. India is the second largest Tractor Manufacturer in the world. India is the 5 th largest commercial vehicle manufacturer in the world. India is the 3 rd largest car market in Asia.
- 5. Major Players in the Indian Automobile (car) Market Maruti Hyundai Tata Ford Hindustan Motors Mahindra and Mahindra
- 6. Multi Utility Vehicle (MUV) The multi-utility vehicle (MUV) as the name suggests can be used for transporting goods as well as passengers over medium and small distances. “Major Players in the Indian UV Market are”:-
- 7. Multi Utility Vehicle (MUV) Mahindra & Mahindra : Product range includes- Jeep Scorpio Marshal etc. Tata : Product range includes- Tata Safari Tata Sierra Tata Sumo Toyota: Product range includes- Toyota Qualis
- 8. Consumer Perspective for UV A study conducted to understand the UV customer by advertising agency ‘Interface Communication’ revealed the following criterion of consumer buying process:- Customer preferred big size as it stands for status. Consumers seek latest technology. Consumers wants the sheer thrill and passion of driving an SUV at affordable prices.
- 9. Segmentation of the Cars F iat Uno, Maruti Zen, Maruti- Alto, Maruti Wagon R, Hyundai Santro, Daewoo- Matiz, Tata Indica B Segment F iat Palio. B+ Segment O mni, Maruti800 A Segment
- 10. Segmentation of the Cars S koda Octavia, Opel Vectra, Toyota Camry, Ford Mondeo, Honda Accord, Mercedes-C- Class D Segment O pel Astra , Honda City , Toyota Corolla, Mitsubishi-Lancer Upper C Segment M aruti Esteem, Ford Ikon, Fiat Siena, Opel Corsa, Daewoo Nexia, Hyundai- Accent, Tata Indigo etc. Lower C Segment
- 11. Segmentation of the Cars M ercedes S Class Luxury Segment M ercedes E- class E Segment
- 12. Introduction: Mahindra & Mahindra Mahindra & Mahindra Limited (M&M) is a major automobile company in India. It is the flagship company of the Mahindra Group. It was set up in 1945 to make general-purpose utility vehicles for the Indian market. The company has recently started a separate Sector, Mahindra Systems and Automotive Technlogies (MSAT) in order to focus on developing components as well as offering engineering services.
- 13. Mahindra Context In late 1990’s Mahindra, a leader in the UV segment, was fast witnessing loss of market share. Global players were entering the Auto market and aggressively launching products. The Mahindra image was a big barrier as well. Though it had positives as rugged, tough, reliable, economical vehicle. The negative parameter were: Uncomfortable, rough, not easy to drive, rural imagery, down market, fuddy-duddy etc.
- 14. Mahindra Context When the Mahindra started to lose its market share because of previous mentioned problems they decided to launch a product with the following objectives: To create a new segment and retain market domination. To differentiate offering (vis-a vis MNCs)- i.e. to provide an excellent value proposition to the customer. To optimize project costs.
- 15. India: Company market share in MUVs 20.4% 20.0% - - - - Toyota 21.7% 24.4% 26.7% 28.0% 32.7% 14.0% Telco 4.2% 3.9% 5.1% 5.3% 5.8% 8.6% B.Tem. 4.8% 4.9% 7.3% 4.5% 2.6% 2.7% Maruti 2.7% 1.9% 2.2% 4.1% 6.6% 3.1% HM 46.2% 44.9% 58.7% 58.0% 52.2% 71.6% M&M FY02 FY01 FY00 FY99 FY98 FY97 Co.
- 16. Strategic Interface With Market Providing the low cost transportation range to rural & semi-urban market. Develop the strong presence in urban market with VFM product. To compete with global players & make his presence in urban market M&M embarked on project Scorpio.
- 17. Problems For MNC competition it did not have deep pockets. The project cost had to by optimized. Product should give VFM. Product should be very affordable. Product was needing innovation & thinking out of the box.
- 18. Key Achievement of Process A unique process called IDAM (integrated design & manufacturing). Best in worlds tie ups but in-house executions. Customer focus from thought to finish. A cross-functional, co-located, young, lean team.
- 19. Key Achievement of Process Lowest project cost Intensive testing All new manufacturing set up It is easer to make what you can sale then to sale what you have made. Guide line of the force of the IDAM (Mumbai)
- 20. Cross Functional Strength Of Team Every aspect of product development Design & development Testing & validation Manufacturing Vendor development & marketing
- 21. Global Alliances For The Best M&M tied up with the best in the world in their respective areas in auto industries. As:- Seats & interiors Lear, USA Paint shop Durr, Germany Tester of final assembly Fori Automation, USA Body shop Wooshin, Korea Dies Fuji, Japan Press shop Fukui, Japan
- 22. Global Alliances For The Best Petrol engines Renault A.C. BHER, Germany Suspension Samlip, Korea Exteriors Visteon, USA
- 23. To Focus The Consumer Trapped the consumer requirement Mapped the market potential of the various vehicle categories. Visited to market & met the customer The customer requirement were converted into product specification. Customer inputs were taken at every stage.
- 24. Facts of IDAM They took a number of 120 person of an average of 27 years. They had worked round the clock & divided in to 19 cross functional design teams. The project cost was 120 million US dollars. This was only 5 th that worlds major players have spent on same size project.
- 25. Facts of IDAM Seventy four vehicles were built only for testing. They used the (STEP) simultaneous testing & examining process. They checked & retested every component till they didn’t got the best combination. The product was put through the NOVA-C (new overall vehicle audit-customer) system to measure the overall quality of production process.
- 26. Manufacturing Set Up A world class manufacturing set up was spread over 120 acres. Its capacity was 40,000 units annual on a 2 shift basis. It was stabilized in Nashik with a investment of USD 120 million. Infrastructure wise three new state of art line were developed for production.
- 27. Marketing Strategy First year of launch To capture the 22% of the premium hard top market in 9 months (fev.03) To sale 12000 Scorpio To increase Mahindra unaided brand recall score by 22 points (defined by brand track study score) To make Scorpio brand recall score to achieve 50 points.
- 28. Marketing Strategy With in three years of launch To capture 45% of the premium hard top market To sell 24000 units in Feb. 04 To make Mahindra emerge as a true urban player Strategic branding approach Scorpio didn’t take the traditional UV image It needed to be seen like car to appeal car buyer
- 29. Marketing Strategy It gives car like driving pleasure & the space, fuel efficiency, power style, luxury & comfort like a car. It provides the status of a Pajero (international SUV) at the price of mid size car. It offered superior technology, dynamic looks, car like product and value for money. Car + Parent brand relation
- 30. Marketing Strategy Brand endorsement Advertisement & promotion strategy Media strategy Dynamic & high impact launch High visibility Push brand image even by the media vehicle
- 31. Marketing Strategy Branding impact through PR Mass media Direct marketing Events Customer Relationship Management
- 32. Pricing Strategy Competition with Accent Ikon Corsa Esteem Qualis Safari Sumo
- 33. Pricing Strategy It have to adopt the penetrative pricing strategy. So It had adopted 5-7 Lack Rs. .
- 34. Distribution Strategy Serve less markets but serve them well Phased launch Mumbai, Bangalore, Delhi & Chennai With in four months---20 cities With in a year---50 cities Showroom experience Infrastructure
- 35. Response- The strategy delivered Volumes and Market Shares: Scorpio achieved its targets on market share and achieved a volume of 12,000 vehicles in the first 9 months of its launch. Image: Scorpio advertising had a very high recall for the mahindra brand as well as for the product. Apart from this, advertising actually positioned scorpio as a power ful vehicle with a sporty look.
- 36. Impact on Mahindra image Well respected manufacturers Technologically advanced Suitable for city driving Great to drive Makes VFM vehicles Proud to own Makes good quality vehicles
- 37. Scorpio Brand Recall In the SUV/MUV segment, Scorpio has the second largest awareness and has emerged as a strong brand in the C and sub-C car segment, however as compared to Qualis, it needed higher recall.
- 38. Scorpio buyer Profile Scorpio managed to pull out customers from the C segment of vehicles. The strategy delivered with more and more small and mid-size car buyers choosing the Scorpio over the other.
- 39. Awards The Scorpio was awarded various from various bodies. M&M has more than 39% of market share in hard tops, sold 11,800 Scorpios in the first 9 months of operation and due to this campaign, Mahindra image improved.
- 40. Scorpio Impact on M&M Scorpio was launched on June 19, 2002. At that time Mahindra was losing-market share and the share prices were also at an all time low at around Rs. 100. With the launch of Scorpio, things started looking up for Mahindra. The revenue for M&M auto sector incresed from Rs. 1827 Cr. In F 02 to Rs. 2511 Cr. In F 03 agrowth of 37%. The PBIT too zoomed up from Rs. 102 Cr. In F 02 to Rs. 147 Cr. In F 03, an increase of 47%.
- 41. Scorpio Impact on M&M The share prices have outperformed the sensex and share prices had zoomed from Rs.100 to Rs.400 by Dec. 2003. The mahindra saliency scores improved by points among MUV/SUV owners and by points among all car-owners The overall positive opinion about mahindra also moved up by 18% among MUV/SUV owners and by 11% among all car owner.