MARKETING PLAN ON MAHINDRA SCORPIO
Submitted by
J.REES (09BA128)
A PROJECT REPORT
Submitted in partial fulfillment of
the requirements for the
TERM PAPER
Under the guidance of
Dr.J . CLEMENT SUDHAKAR , MBA, M.Phil., Ph.D.,
Associate Professor,
School of Management
(Declared as a deemed to be university under sec. 3 of the UGC Act 1956)
Karunya Nagar, Coimbatore-641 114.
NOVEMBER 2009
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CERTIFICATE
This is to certify that the Project entitled ‘Marketing Plan On Mahindra Scorpio’ submitted
by Mr. Rees.J (Reg. No. 09BA128) for the term Paper in Master of Business Administration to the
Karunya University, Karunya Nagar, Coimbatore – 641 114 is a record of Bonafide work carried out
by him during the period 2009
Dr. SAMUEL JOSEPH Dr. CLEMENT SUDHAHAR
(Administrative Coordinator) (Faculty Guide)
Place:
Date:
Certified that the candidate was examined by us in the Project work and Viva-Voce Examination
held on _______________________ at Karunya University, Karunya Nagar, Coimbatore- 641 114.
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ACKNOWLEDGEMENT
We give all the glory to our LORD GOD Almighty for guiding and being with us and helping us
complete this project successfully.
We thank our Chancellor Dr. Paul Dhinakaran for his constant prayer and support. We also
thank the Vice-Chancellor Dr. Paul P. Appasamy and the Registrar Dr. Anne Mary Fernandez for her
support.
We thank the Director of the School of Management, Dr. S. Samuel Joseph. We are also
thankful to our mentor for the guidance he gave for our project.
We are indebted to our Project Guide and Class advisor, Dr.J . Clement Sudhakar, MBA,
M.Phil., Ph.D., for his valuable guidance and interest throughout this project.
Finally we thank our beloved Parents heartily for their constant support, prayer and
encouragement. We also thank our Friends for their support and encouragement.
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About Mahindra & Mahindra
Type Public Company
Founded 1945
Headquarters Mumbai, India
Key people Keshub Mahindra (Chairman),
Anand Mahindra (Vice-Chairman & Managing Director)
Industry Automotive,Farm Equipment
Revenue US$ 10 billion (2009 H1).
Employees 16,000 plus
Website Mahindra.com
Mahindra & Mahindra Limited is part of the Mahindra Group, an automotive, farm equipment, financial services, trade and logistics, automotive components, after-market, IT and infrastructure conglomerate. The company was set up in 1945 as Mahindra & Mohammed. Later, after the partition of India, Ghulam Muhammad returned to Pakistan and became that nation's first finance minister. Hence, the name was changed from Mahindra & Mohammed to Mahindra & Mahindra in 1948.
Initially set up to manufacture general-purpose utility vehicles, Mahindra & Mahindra (M&M) was first known for assembly under licence of the iconic Willys Jeep in India. The company later branched out into manufacture of light commercial vehicles (LCVs) and agricultural tractors, rapidly growing from being a manufacturer of army vehicles and tractors to an automobile major with a growing global market. At present, M&M is the leader in the utility vehicle (UV) segment in India with its flagship UV, the Scorpio (known as the Mahindra Goa in Italy).
M&M is India's largest SUV maker.
Business
Mahindra & Mahindra grew from being a maker of army vehicles to a major automobile and tractor manufacturer. It has acquired plants in China and the United Kingdom, and has three assembly plants in the USA. M&M has partnerships with international companies like Renault SA, France and International Truck and Engine Corporation, USA.
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M&M has a global presence[ and its products are exported to several countries. Its global subsidiaries include Mahindra Europe Srl. based in Italy, Mahindra USA Inc., Mahindra South Africa and Mahindra (China) Tractor Co. Ltd.
M&M is one of the leading tractor brands in the world. It is also the largest manufacturer of tractors in India with sustained market leadership of over 25 years. It designs, develops, manufactures and markets tractors as well as farm implements. Mahindra Tractors(China) Co. Ltd. manufactures tractors for the growing Chinese market and is a hub for tractor exports to the USA and other nations. M&M has a 100% subsidiary, Mahindra USA, which assembles products for the American market.
M&M made its entry into the passenger car segment with the Logan in April 2007 under the Mahindra Renault joint venture. M&M will make its maiden entry into the heavy trucks segment with Mahindra Navistar, the joint venture with International Truck, USA.
M&M's automotive division makes a wide range of vehicles including MUVs, LCVs and three wheelers. It offers over 20 models including new generation multi-utility vehicles like the Scorpio and the Bolero.
At the 2008 Delhi Auto Show, Mahindra executives said the company is pursuing an aggressive product expansion program that would see the launch of several new platforms and vehicles over the next three years, including an entry-level SUV designed to seat five passengers and powered by a small turbodiesel engine. True to their word, Mahindra & Mahindra launched the Mahindra Xylo in January 2009, and as of June 2009, the Xylo has sold over 15000 models.
Also in early 2008, Mahindra commenced its first overseas CKD operations with the launch of the Mahindra Scorpio in Egypt, in partnership with the Bavarian Auto Group. This was soon followed by assembly facilities in Brazil. Vehicles assembled at the plant in Bramont, Manaus, include Scorpio Pik Ups in single and double cab pick-up body styles as well as SUVs.
The US based Reputation Institute recently ranked Mahindra among the top 10 Indian companies in its 'Global 200: The World's Best Corporate Reputations' list.
Mahindra is currently gearing up to sell the Scorpio SUV and pickup starting in the Fall of 2009 in North America, through an independent distributor, Global Vehicles USA, based in Alpharetta, Georgia. Mahindrahas announced it will import pickup trucks from India in knockdown kit (CKD) form to circumvent the Chicken tax. CKDs are complete vehicles that will be assembled in the U.S. from kits of parts shipped in crates.
Awards
1. Bombay Chamber Good Corporate Citizen Award for 2006-072. Businessworld FICCI-SEDF Corporate Social Responsibility Award – 20073. Deming Prize
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4. Japan Quality Medal in 2007
Models
Mahindra Bolero o Mahindra Bolero Campero Mahindra Bolero Inspirao Mahindra Bolero Stinger Concept
Mahindra Scorpio o Mahindra Scorpio Getawayo Mahindra Scorpio First
Mahindra Xylo Mahindra Legend Mahindra MM550 XD Mahindra-Renault Logan (in cooperation with Renault) Mahindra Axe Mahindra Major
o Mahindra Souvenir Concept Mahindra Commander Mahindra Grand Vitara Mahindra DI Mahindra Cab Chassis
Core Business Activities
Automotive Farm Equipment Systech Financial Services Information Technology Infrastructure Development After-Market Two-wheelers Mahindra Partners Division Specialty Services
Community Initiatives
Mahindra United World College of India Mahindra United, a football club based in Mumbai, Maharashtra Mahindra Foundation K. C. Mahindra Education Trust: Nanhi Kali
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About Mahindra Scorpio
The Mahindra Scorpio is an SUV manufactured by Mahindra & Mahindra Limited, the flagship company of the $6.3 billion Mahindra Group. It was the first SUV from the company built for the global market. The Scorpio has been successfully accepted in international markets across the globe, and will shortly be launched in the US.
The Scorpio was conceptualized and designed by the in-house integrated design and manufacturing (IDAM) team of M&M. The car has been the recipient of three prestigious awards - the "Car of the Year" award from Business Standard Motoring, the "Best SUV of the Year" by BBC World Wheels and the "Best Car of the Year" award, again, from BBC World Wheels.
The making of the Mahindra Scorpio
Prior to the mid-nineties, Mahindra & Mahindra was an automobile assembly company. The company manufactured Willys Jeeps and its minor modified versions (modifications carried out in India). In 1996, the company planned to enter the SUV segment with a new product which could compete globally. Since M & M didn't have the technical know-how to make a new age product, they devised a whole new concept among Indian auto companies. Roping in new executives such as Dr. Pawan Goenka and Alan Durante who had worked in the auto industry in western countries, the company broke the rule that says automakers must design, engineer and test their own vehicles (spending millions of dollars in the process). The new Mahindra Scorpio SUV had all of its major systems designed directly by suppliers with the only input from Mahindra being design, performance specifications and program cost. Design and engineering of systems was done by suppliers, as was testing, validation and materials selection. Sourcing and engineering locations were also chosen by suppliers. The parts were later assembled in a Mahindra plant under the Mahindra Badge (as Mahindra is a well known brand in India in the MUV segment). Using this method the company was able to build a from scratch a new vehicle with virtually 100 percent supplier involvement from concept to reality for $120 million, including improvements to the plant. The project took 5 years to move from concept to final product.
In April 2006, the company launched an upgraded Scorpio – dubbing it the 'All-New' Scorpio. In June 2007, Mahindra launched a pick-up version in India known as the Scorpio Getaway.Recently, M & M has launched a face lifted version of the model.
Exports
The Mahindra Scorpio is sold across the world in countries such as:
India Italy France Spain Turkey
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Sri Lanka Nepal Bangladesh Egypt Russia Malaysia South Africa Qatar Brazil Chile: The Scorpio Pick Up is the first passenger vehicle of the Mahindra brand to be
offered in Chile, and both were presented to the press the night of July 25, 2007.
In Western Europe, so as not to confuse the vehicle with a previous Ford vehicle of the same name, it is called the Mahindra Goa.
Safety
A new Mahindra Pick-Up model being introduced to Australia mid-09 will have additional safety features to the current model, such as ABS Brakes and Airbags which should elevate its rating to a minimum of 3 stars from the current 2 star ANCAP rating.
Future
Soon after the success of the Scorpio, Mahindra launched an upgraded Scorpio with plush seats and rear centre arm rest, dual tone exterior colour and various minor changes.
At the Auto Expo 2006, Delhi, Mahindra showcased their future plans on the Scorpio model by showcasing a Hybrid Scorpio with CRDe engine and a Scorpio based on a pick-up truck. The Hybrid, the first such vehicle developed in India was developed by Arun Jaura, a former Ford employee. His senior, Dr. Pawan Goenka, a former GM engineer currently heads Mahindra's automotive division and looks after the overall Scorpio project.
In November 2007, Mahindra launched a teaser campaign for their new Scorpio Model, the m_Hawk on their official website.
On April 14, 2008, Mahindra revealed a concept of a diesel-electric hybrid version of their Scorpio SUV at the 2008 SAE World Congress.
21st Sep 2008 Mahindra launched their latest Scorpio with 6 speed automatic transmission gears.
Mahindra has for a while had plans on exporting to the United States, possibly with a diesel-electric hybrid. In 2006 it entered into an agreement with Global Vehicles USA to import and distribute Mahindra vehicles. It now plans to release a modified Pick-up version of the Scorpio (currently unnamed due to copyright issues with the Ford Scorpio) in the US by the end of 2009. This vehicle is projected to cost in the low $20,000s.
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First year of launch
8Scorpio to capture 22 per cent of the premium hard top market in F03 (9 months) Sell 12000 Scorpios in F03 (9 months) Mahindra unaided brand recall score to increase by 22 pts (defined in terms of Brand
Track study scores) Scorpio brand recall score to achieve 50 points (in W4)
2nd generation
Specifications: 120 horsepower
6-speed auto
Wheelbase: 105.5 in (2,680 mm) Length: 176.9 in (4,493 mm) Width: 71.5 in (1,816 mm) Height: 77.8 in (1,976 mm) Base curb weight: 3,850 lb (1,750 kg) (CG estimate)
Within three years of launch
Scorpio to capture 45 per cent of the premium hard top market Scorpio to sell 24,000 units in F04 Mahindra to emerge as a true urban player
Overview Mahindra Scorpio's:
Make Mahindra
Model Scorpio
Variant 2.6 LX 9-seater
Body Type SUV
Number of doors 5
Fuel Efficiency
City Mileage 9.4 kmpl
Highway Mileage 13.9 kmpl
Fuel Capacity 60 litre
Fuel Type Diesel
Fuel Grade -
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Engine Parameters
Displacement 2609 cc
Bore 94 mm
Stroke 94 mm
Cylinder Configuration 4-inline
Valve Gear Operation Pushrod
Compression Ratio 18.5:1
No. Of Valves 8
Aspiration Turbo-charged
Fuel System CRDi
Horse Power 115@3800 ps@rpm
Torque 277.52@2200 Nm@rpm
Steering and Suspension
Steering Type Rack and pinion, power assist
Power Steering Yes
Front Suspension 2WD Independent, Coil Spring,Anti Roll Bar
Rear Suspension Multilink, Coil Spring
Dimensions
Length 4495 mm
Height 1975 mm
Width 1817 mm
Wheelbase 2680 mm
Clearance 180 mm
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SWOT Analysis
Strength
India's first BS IV Car. Revolutionary Micro-Hybrid Technology. Powerful mHawk Diesel Engine.
Weakness
Effortless Acceleration. Fire Retardant Upholstery. Excellent Driving Experience.
Threats
Automatic Transmission only on Top-End Variant.
Opportunities
• Mahindra vehicles have gone on display to auto enthusiasts around the world, participating in prestigious automobile shows in Paris, Rome, Bologna, Johannesburg and São Paulo.
STP Analysis
Segment
A BRAND is a thought, and launching brands can be a great growth strategy for any corporate. But, it takes two to tango. A brand founded on a good idea needs to be built with an ever-evolving gameplan. A case in point is the launch of the sports utility vehicle (SUV), Scorpio, by Mahindra & Mahindra (M&M).
When Scorpio hit the streets, it arrived as an SUV with a `car plus' package. Two-and-a-half years later, it has caused a paradigm shift in its category. Equipped with a savvy marketing strategy, the brand has not only grown the SUV market, but almost touched base with the `C' class cars segment (Rs 5 lakh and upwards.)
According to automobile manufacturers' data, the premium utility vehicle segment grew at approximately 14 per cent up to June 2002.
With the launch of Scorpio, the growth rate from July 2002 to March 2003 rose to about 51 per cent. Between April 2003 and March 2004, the segment grew by 33 per cent.
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Positioning
attract a lot of cross-over customers. Unlike for its competitors in the UV category, people who wished to purchase a C class car would also consider a Scorpio," says Hormazd Sorabjee, Editor, Autocar India.
Cut to market expansion of premium utility vehicles against `C' class cars. Out of the total number of premium utility vehicles and `C' segment cars put together, premium UVs accounted for about 21 per cent during the year 2000. The figure touched 49 per cent this year.
"The Scorpio launch did play a significant role in driving the UV market up. This to me is the ultimate measure of success - the ability of a company to drive the growth of markets," remarks Abraham Koshy, Professor of Marketing, Indian Institute of Management, Ahmedabad.
Marketing gurus suggest that the positioning of Scorpio was also very bold and innovative.
Mahindra Scorpio Pick Up secures third position in T2 category of Rally dos Sertoes in Brazil
Target
The track monitors `high value' consumers, and registers those who are in the SEC A and B categories, while 67 per cent of the sample size is from the top eight metros; the rest from the next 50-60 towns across India.
Sales too has been zooming, says the company. According to brand-wise data, the company claims to be matching sales of most C segment cars, even outselling some of them. In the last six months, M&M sold 14,389 Scorpios, against a total C segment sales of 79,346, according to company data.
PEST Analysis
Political
Taxation Policy Government Policy
Social
Give good quality to their customers
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Providing offers to its retailer and customers Providing life style product Change the customer attitudes and opinions
Economy
Launch low cost car in rural areas Launch economy related brand Launch power full car in the market so customers make good image in their mind
Technological
Provide new innovative product to their customers Provide the compete ting technology Provide new technology to their worker
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Market Mix
The soft tops sales, which were Mahindra’s strength, were stagnating. Hard top vehicles like Sumo and Qualis were garnering market share. The urban market was showing more potential for vehicle sales and UVs were gaining higher acceptability in urban cities. The competition was getting tougher with international UVs entering the market. And also operating in the urban market meant competing with cars.The market was moving from traditional multi utility, non-luxurious vehicles to luxurious vehicles. M&M had launched Bolero in 2000 to cater to this newly emerging segment. However, to add to the category’s woes, it declined at the rate of 3.1 percent in year 2001 over year 2000. UVs as a percentage of the overall passenger car market was just 16 per cent in 2001. This simply meant that for attaining the volumes, Scorpio needed to look beyond UVs in terms of competitive framework to decide on a marketing strategy.
Competitive
The conventional UV market was too small in size. The UV market in urban markets was even smaller a percentage. The trend was that the UVs operating in the urban market were eating into the car share, primarily the cars which operated in the same price bracket. Qualis was taking market away from midsize cars. With these facts in place the whole of automobile market was studied in details.
In the arena of cars, A-segment cars, which have been the leaders in terms of volumes and
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grew at the rate of 55.2 percent in the year 1999, were having a reduced growth rate of 34.2 percent in the year 2001. It was found that the fastest growing segment (growing at the rate of 42.9 per cent) in year 2001 was semi luxurious cars or B segment cars. And the luxurious car segment i.e. C segment cars were also growing at a healthy rate of 14.2 percent in that year. However, super premium cars termed as segment D and E cars, were not growing at such healthy rates and did not offer volume in terms of number of cars sold.It was imperative for Scorpio to look beyond UVs. Apart from appealing to a typically UV buyer, it was also necessary to appeal to a wider target audience - prospective car buyers belonging to 5 lakh and 5 lakh+ segment. The midsize car market (C class) which was in the Rs. Five to Seven lakh price bracket had grown in F’00 at 36 per cent and in F’01 at 22 per cent, and small luxury car segment (B class) which was up to Five lakh segment was also showing a healthy growth.
Analysis showed that the volumes in the automobile industry were coming from B and C segment cars. This meant that the mid size car market was the competitive arena for Scorpio for it to attain the volume growth and market share it was looking for. It was decided that the offer had to appeal to segment C buyer and should be aspirational for segment B buyers. Therefore, an analysis of the offers of all the segment C cars and the relevant UVs was done. The table below summarises the analysis:
Interpretations: All the vehicle are feature packed within a price range of Rs. 6-8 Lakhs. All of them, including UVs, are with a proposition of luxury and comfort, with no differentiation.
Implication: With this analysis it came out clearly that the positioning of Scorpio has to be such that it should communicate that the vehicle is better than any of these cars and is a better buy in terms of money.
Consumer
Having defined the competitive framework, the next task undertaken was that of analyzing the consumer. Consumer segments of B and C category car buyers were analyzed in terms of their expectations from a car, their perceptions about cars and their relationship. Proprietary techniques of research, of the advertising agency Interface Communications, like Mind & Mood, ICON and VIP were used to understand this consumer. The findings were:Size matters-
big size stands for status Consumers seek latest technology Imagery but at affordable price The sheer thrill and passion of driving an SUV Power of the vehicle makes a statement But along with the others, luxury was a very important parameter International vehicles define imagery
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SUVs like Pajero, Land Cruiser and Prado are seen as urban vehicles for the rich and famous
Consumers aspire to own these vehicles as the imagery of these vehicles has become very desirableThe Key Consumer Insight that emerged from all the consumer analysis and which was used for strategy development was “Consumers want to consume premium imagery at prices affordable to them”
Company
The Mahindra Scorpio is an SUV manufactured by Mahindra & Mahindra Limited, the flagship company of the $6.3 billion Mahindra Group. It was the first SUV from the company built for the global market. The Scorpio has been successfully accepted in international markets across the globe, and will shortly be launched in the US.
The Scorpio was conceptualized and designed by the in-house integrated design and manufacturing (IDAM) team of M&M. The car has been the recipient of three prestigious awards - the "Car of the Year" award from Business Standard Motoring, the "Best SUV of the Year" by BBC World Wheels and the "Best Car of the Year" award, again, from BBC World Wheels.
Context
SUVs in India have a tough terrain to navigate given that competition means a traffic jam of car brands on the road. It’s in this context that a SUV brand like Scorpio deserves mention. It had its glorious era, but it doesnt match with the new age and new look suvs of the modern times. Tavera, Innova, Tuscan, Endeavour and to some extent Scorpio rank much better in looks.Scoprio may loose somewhat in comfort, but safari seems overall out of context. Off course, these are my personal views.
Collaborator
Deliver value through integration, collaboration and synergy within the Mahindra group. "We have been an advocate of technology as a pivotal pillar on our journey towards enabling business excellence," said Mr. Arvind Tawde, Senior Vice- President and CIO, Mahindra & Mahindra, "We cherish the continuing evolution of this long-standing relationship; together we hope to take this relationship to newer heights of collaboration and co-innovation."
This agreement extends SAP's position as a leader in providing comprehensive enterprise software for the automotive and manufacturing industries. The ability to rapidly integrate new operations resulting from mergers and acquisitions, shift supplies due to changing demand and collaborate across a business network of partners is vital to companies as they strive for market share and greater profitability in the industry.
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Place
Mahindra & Mahindra has emerged as a well-known tractor brand in the US. It is now planning to launch the Scorpio in the US sports utility vehicle market.
• Mahindra Automobiles have a strong and growing presence in international markets
– Yugoslavia,
– Bangladesh
– Sri Lanka
– Australia
– Uruguay
– South Africa in 2004 (Mahindra South Africa)
– Europe in 2005 (Mahindra Europe)
• Mahindra vehicles have gone on display to auto enthusiasts around the world, participating in prestigious automobile shows in Paris, Rome, Bologna, Johannesburg and São Paulo.
• In 2006 Mahindra announced that it would be the first Indian automobile manufacturer to enter the world’s most demanding and critical market – USA.
Price
MODEL PRICE (in INR)**
LX 735500
M2DI 691100
SLE 834500
SLX-4WD 972100
VLX BS3 2WD 938700
VLX BS3 2WD-Air Bag 958000
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VLX BS3 4WD 1015100
VLX BS3 4WD-Air Bag 1034400
*Note : Any other levies or taxes if applicable are extra.
For exact prices, please contact our dealerships.
Prices are applicable within the specified city limits only.
All prices are subject to change, and Mahindra Scorpio reserves the right to modify the prices at its discretion at any point in time.
Promotion
The creative strategy was to drive home the ‘Car Plus’ positioning forward. There was a need to leverage on product strengths. And a need to establish car plus story. Hence the product was to be the hero in all communications
The tone and manner was to help associate the brand with the modern and urban lifestyle. The TVCs as well as the press still-shots were shot in Australia to provide an international city feel. This brought in the international, premium, up-market association for the brand.
Product
Mahindra Scorpio o Mahindra Scorpio Getawayo Mahindra Scorpio First
Model
LX M2DI SLE SLX-4WD VLX BS3 2WD VLX BS3 2WD-Air Bag VLX BS3 4WD
VLX BS3 4WD-Air Bag
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Market summary:
The conventional SUV market was too small in size. The SUV market in urban markets was even smaller a percentage. The trend was that the SUVs operating in the urban market were eating into the car share, primarily the cars which operated in the same price bracket. Qualis was taking market away from midsize cars. Mahindra vehicles have gone on display to auto enthusiasts around the world, participating in prestigious automobile shows in Paris, Rome, Bologna, Johannesburg and São Paulo. In 2006 Mahindra announced that it would be the first Indian automobile manufacturer to enter the world’s most demanding and critical market – USA. The tone and manner was to help associate the brand with the modern and urban lifestyle. The TVCs as well as the press still-shots were shot in Australia to provide an international city feel. This brought in the international, premium, up-market association for the brand. Since the Scorpio was targeted at an urban clientele it needed a stronger distribution presence in Metros and urban areas. Hence, the distribution channel had to focus on providing an appealing experience for modern car buyers and on offering international standards of auto retail.
Development
Made survey and collect customer preference and perception for designee and feature Introduction of quality function development (qfd) process Create the benchmark according to word class suva’s
Big size Latest technology Affordable size Have thrill and passion in driving Have luxury International vehicles define image
Criticism
Some companies said that Mahindra & Mahindra did not have the capacity to provide vehicles in house
No crash testing Mahindra & Mahindra did not re-designed its product
Technology
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• Collapsible steering column & split intrusion beams• Crash protecting crumple zones and child locks • Fire resistant upholstery• Voice assist system, vehicle security system & remote locking/unlocking• Tubeless tyres• Poly coated grand deck
STYLE
• Bonnet scoop• Air extractor• Two tone interiors• Sporty decal• Full wheel caps
COMFORT
• Tilt able steering• Full fabric seats• Individual armrests on 1st row seats• Heating, ventilation & AC with rear vents• ORVM manual remocon & swivel interior lamp
CONVENIENCE
• Power steering• Power windows• Spaces for storage on centre bezel, IP & console • Mobile charging facility for the front and middle row seats • Intelligent front wipers• Follow me home' lamps • Theatre style interior illumination• Illuminated key ring• Side step• Head lamp levelling switch• Front fog lamps
SEATING
• 5 Seater
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Brand Strategy - Parent brand relationship defining
A study of international brand names was done and a classification of brand names of midsize cars and SUVs was done into groups. International brand naming trends and strategies were analysed. New names were generated. These brand names were researched massively first by qualitative techniques and then by quantitative techniques.The name that emerged as most popular, and which was also the most liked name internally at Mahindra was SCORPIO.
Brand Endorsement Strategy
The relation between Scorpio and the mother brand Mahindra was also deliberated upon. The strategy chosen for Brand Endorsement was - Scorpio from Mahindra - shadow endorsement, one which does not shout “Mahindra.”The Mahindra brand image was not modern and young. There was a need to create a strong distinct modern brand. Hence Mahindra as a Masterbrand could not contribute towards enhancing the Value Proposition. Yet Mahindra had to provide source reassurance. Also the distribution would be through Mahindra dealerships. Hence it became a shadow endorser.
Advertising and Promotions Strategy
The creative strategy was to drive home the ‘Car Plus’ positioning forward. There was a need to leverage on product strengths. And a need to establish car plus story. Hence the product was to be the hero in all communications
The tone and manner was to help associate the brand with the modern and urban lifestyle. The TVCs as well as the press still-shots were shot in Australia to provide an international city feel. This brought in the international, premium, up-market association for the brand.
Media Strategy
Role of Media Dramatic and high impact launch High visibility Push brand image even by the media vehicle
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Building impact through multiple-media
PR, Mass Media, Direct Marketing, Events
Public Relations
Pre-launch excitement and buzz was created by a full blown PR program. Media coverage on the IDAM process, the people behind the Scorpio, the obsession, the world class technology, etc set the tone for the hyped up launch. PR was also the first tool used for launching the Scorpio. The coverage of the launch was massive. It got four cover stories
Mass Media
‘While the media targets would be achieved through the right selection of the media mix, the Scorpio media posture was to ensure that Scorpio was present on the decided media but ‘with a difference.’ Scorpio would use media innovations to create differentiation on the traditional media and do things in a ‘bigger and better’ manner.
Customer Relationship Management (CRM)
CRM as a tool was used to create positive word-of-mouth, to monitor customer experiences and generate referrals. A series of CRM activities were implemented with regular direct communication, events and customer research. The CRM plan included a welcome Pack on filling up Scorpio Club (Top Gear) form, satisfaction surveys, Events, Festive offers, Rewards Program, etc.
Pricing Strategy: to be a premium brand yet having universal appeal
Scorpio was to compete with the midsize cars like Hyundai Accent, Ford Ikon, Opel Corsa, Maruti Suzuki Esteem on the one side and UVs like Toyota Qualis, Tata Safari and the Tata Sumo on the other. Scorpio adopted the penetrative pricing strategy positioned in the psychological price barrier of Rs. 5 -7 Lakhs.
Distribution Strategy - Serve less markets at a time but serve them well
Since the Scorpio was targetted at an urban clientele it needed a stronger ditribution presence in Metros and urban areas. Hence, the distribution channel had to focus on providing an appealing experience for modern car buyers and on offering international standards of auto retail.
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Strategic Branding Approach –
Identifying the need gap and occupying it
There existed a gap that wasn’t tapped. There was no SUV in the country that the 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 imagery comparable to international brands. Therefore, as a strategy it was decided that Scorpio would not take the traditional UV imagery of tough, off-roading and 4x4. A 4x4 approach would be a very niche category and would not generate numbers. To appeal to a car buyer, the Scorpio needed to be seen as a car that offers much more.
A Scorpio had to be seen as providing car-like driving pleasure and at the same time providing the edge over cars in space, power, style, fuel efficiency, luxury and comfort. In short, to provide status of a Pajero (international SUV) at the price of midsize car The Scorpio product package offered - Superior technology, Dynamic Looks, Car-like product and great value for the price Value Proposition for Scorpio:
To capture the identified need -gap, the value proposition of Scorpio was defined as -
‘Car plus’
Rational benefits: World class vehicle, good looks, car like comfort, great valueEmotional benefits: Ownership experience of thrill, excitement and powerRelational benefits: Young modern, premium, city companion / extension of lifestyle.Brand Promise: ‘Luxury of a car. Thrill of an SUV’This brand positioning addresses the key consumer Insight and the product delivers the promise. The position is also a unique proposition, which will help the brand have a distinct image in the consumers’ mind.
Baseline - “Nothing Else Will do”
The baseline captures the essence of the brand, which is superiority and uncompromising attitude. It also summarises the spirit behind the making of the Scorpio.
Phased Launch
The Scorpio was launched in a phased manner - first in Metros Mumbai, Delhi, Bangalore,
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Chennai. Twenty cities were included over a period of 4 months and within a year 50 cities were covered. This ensured attention to main markets and to ensure that initial production of the vehicle could match demand. Dealerships were revamped prior to launch in a particular city.
Showroom Experience
The showroom revamp was centred 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”. Therefore the back office would remain outside the customer’s line of vision because the customer would be concerned with the product and not with the paperwork.
Infrastructure
Thirty-five showrooms across the country were redone entirely with the same look and identity and a décor built around movement, technology and sportiness. The theme focussed on giving the customer a memorable experience.
Response - The strategy delivered
Volumes and Market Shares: Scorpio achieved its targets on market share and achieved a volume of 12000 vehicles in the first 9 months of its launch.Image: Scorpio advertising had a very high recall for the Mahindra brand (Exhibit 3) as well as for the product (Exhibit 4). Apart from this, advertising actually positioned Scorpio as a powerful vehicle with a sporty look, solidly built with good cargo capacity amongst the premium car consumers and sports utility vehicle consumers. Overall response to the Scorpio was stupendous. The product was well received across the country and got rave reviews across media. More importantly the product and the strategy delivered in terms of the various objectives set before launch. Footfalls in the showrooms had been massive and demand had far exceeded supply of vehicles with a waiting period of three months.
Impact on Mahindra Image:
The saliency of Mahindra increased considerably. Mahindra enjoyed stronger recall as a manufacturer of personal vehicles and stronger customer perceptions on the following attributes –
Well-respected manufacturers Technologically advanced Suitable for city driving Great to drive
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Makes VFM vehicles Proud to own Makes good quality vehicles
Scorpio Brand Recall
In the SUV/MUV segment, Scorpio has the second-largest awareness and has emerged as a strong brand in the C & sub-C car segment, however as compared to Qualis, it needed higher recall. Scorpio advertising had been able to create a good impression on appearance and styling of the vehicle.
Scorpio buyer profile
Scorpio managed to pull out customers from the C segment of vehicles. The product, communication and the retail experience of the Scorpio passed the stringent test of luxury car buyers and the buyer profile was exactly as per the target profile. The strategy delivered with more and more small and midsize car buyers choosing the Scorpio over the others.
Awards
The Scorpio was awarded various awards from various bodiesMahindra achieved the objectives it set out to achieve. M&M has more than 39 per cent of market share in hard tops, sold 11800 Scorpio in first nine months of operation and due to this campaign, Mahindra image improved.
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. The Mahindra share of business was largely from the semi-urban and rural market of India and the markets where Mahindra was strong were stagnating. With the launch of Scorpio, things started looking up for Mahindra. There was an improvement in the bottom line as well as the return to the shareholder. The revenue for M&M Auto Sector increased from Rs. 1827 Cr. in F 02 to Rs. 2511 Cr. in F 03, a growth of 37 per cent. The profits before Interest and Tax (PBIT) too zoomed up from Rs. 102 Cr. in F 02 to Rs. 147 Cr. in F 03, an increase of 43 per cent. In F04 the scenario has further improved. The half-yearly results show a growth of 54 per cent in revenue and 218 per cent increase in PBIT. The share prices have outperformed the Sensex and Share prices have zoomed from Rs. 100 to Rs. 400 by December ‘03.As regards Mahindra image in the customers mind, the post launch study conducted gave the following improvements (Brand track Study - Nov 2002 - IMRB):
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The Mahindra saliency scores improved by 27 points among MUV/ SUV owners and by 29 points among all car-owners.
The overall positive opinion about Mahindra also moved up by 18per cent among MUV/ SUV owners and by 11per cent among all car owners.
Mahindra Scorpio has fared excellently in overall opinion as against its key competitors.
Future Directions - World class product goes global
Having done well in the domestic market, Mahindra and Mahindra is now moving forward on its path to become a global niche player. i.e, it is stretching its activities in foreign markets. The company is in the process of negotiating joint ventures in markets like Spain, Italy, South Africa, Indonesia, Russia, Equador for marketing of Scorpio.
Mahindra ‘Scorpio’
Activity: Banners, Shoshkele & Direct Mailer
Objective: To generate test drive leads and Branding
Est. Spends: Rs. 15 + lacs
Mahindra Scorpio on ET
The Scorpio “2nd Anniversary” promotion campaign Banner and Pop Under
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Mahindra on Economic Times
Scorpio Shoshkele on ET on 5-04-06 Total Spend is 5 Lakhs for 1 Month
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Mahindra on Indiatimes
Scorpio Mouse Over Banners
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Mahindra Innovations
One-Year Total Return:
65.6%
Site: www.mahindra.com
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Balance sheet
Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Sources of fundsOwner's fundEquity share capital 272.62 239.07 238.03 233.40 116.01Share application money - - - - -Preference share capital - - - - -Reserves & surplus 4,959.26 4,098.53 3,302.01 2,662.14 1,881.93
Loan fundsSecured loans 981.00 617.26 106.65 216.68 336.82Unsecured loans 3,071.76 1,969.80 1,529.35 666.71 715.80Total 9,284.64 6,924.66 5,176.05 3,778.92 3,050.56
Uses of fundsFixed assetsGross block 4,893.89 3,552.64 3,180.57 2,859.25 2,676.51Less : revaluation reserve 12.09 12.47 12.86 13.33 14.32Less : accumulated depreciation 2,326.29 1,841.68 1,639.12 1,510.27 1,335.56Net block 2,555.51 1,698.49 1,528.59 1,335.65 1,326.63Capital work-in-progress 646.73 649.94 329.72 205.46 133.93Investments 5,786.41 4,215.06 2,237.46 1,669.09 1,189.79
Net current assetsCurrent assets, loans & advances 5,081.20 3,816.41 3,916.94 2,805.04 2,356.41Less : current liabilities & provisions 4,797.76 3,468.77 2,854.20 2,254.37 1,980.58Total net current assets 283.44 347.64 1,062.74 550.66 375.83Miscellaneous expenses not written 12.55 13.53 17.55 18.05 24.38Total 9,284.64 6,924.66 5,176.05 3,778.92 3,050.56
Notes: Book value of unquoted investments 4,305.50 1,429.16 1,515.23 1,419.01 1,047.67Market value of quoted investments 3,218.81 7,669.90 10,285.25 2,030.85 240.83Contingent liabilities 1,220.39 985.35 1,008.27 946.36 758.14Number of equity sharesoutstanding (Lacs) 2726.16 2390.73 2380.33 2334.00 1116.48
Profit and Loss Account
Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
IncomeOperating income 13,125.98 11,310.37 9,921.34 8,136.59 6,594.69
ExpensesMaterial consumed 9,365.00 7,814.71 6,930.76 5,782.01 4,655.24Manufacturing expenses 174.05 164.68 134.00 111.90 100.65
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Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05Personnel expenses 1,024.61 853.65 666.15 551.78 464.25Selling expenses 575.34 804.51 635.10 458.32 369.72Adminstrative expenses 937.56 561.66 466.22 387.57 317.79Expenses capitalised -42.83 -46.49 -47.10 -26.53 -31.84Cost of sales 12,033.73 10,152.72 8,785.12 7,265.04 5,875.81Operating profit 1,092.25 1,157.65 1,136.22 871.54 718.88Other recurring income 305.98 364.05 404.87 195.82 186.46Adjusted PBDIT 1,398.23 1,521.70 1,541.09 1,067.36 905.34Financial expenses 134.12 87.59 19.80 26.96 30.24Depreciation 291.51 238.66 209.59 200.01 184.05Other write offs - 0.59 0.33 0.28 0.15Adjusted PBT 972.60 1,194.86 1,311.37 840.12 690.89Tax charges 199.69 303.40 350.10 242.40 201.50Adjusted PAT 772.91 891.46 961.28 597.72 489.39Non recurring items 63.87 211.91 126.30 259.38 23.28Other non cash adjustments 4.07 - -19.19 - -Reported net profit 840.85 1,103.37 1,068.39 857.10 512.67Earnigs before appropriation 3,807.00 3,228.45 2,544.13 1,853.50 1,255.52Equity dividend 278.83 282.61 282.23 243.97 150.81Preference dividend - - - - -Dividend tax 33.23 38.48 42.50 34.22 21.15Retained earnings 3,494.94 2,907.36 2,219.40 1,575.31 1,083.55
Cash Flow Statement
Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05Profit before tax 1,026.20 1,241.57 1,315.69 889.49 700.62Net cashflow-operating activity 1,631.30 825.83 1,168.95 686.90 379.21Net cash used in investing activity -1,941.00 -2,075.08 -950.39 -502.66 -174.30Netcash used in fin. Activity 696.91 811.34 418.08 -89.78 192.45Net inc/dec in cash and equivlnt 387.21 -437.91 636.64 94.47 397.36Cash and equivalnt begin of year 1,174.62 1,361.79 725.15 630.69 233.33Cash and equivalnt end of year 1,561.83 923.88 1,361.79 725.15 630.69
Conclusion:
Thus ‘Scorpio’ has proved as a Milestone for Mahindra & Mahindra and the Indian Automobile Industry. It has given a unique place to Mahindra & Mahindra in Indian market because; it was innovated with High quality, Reliability, Flexibility, Style, Driving Comfort...
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etc. In short it offered a customized product. Hence, again Operation’s components: Time, quality& technology made a success story.
Reference:
1. http://www.slideshare.net/VivekSharma/scorpio-from-mahindra
2. http://economictimes.indiatimes.com/Features/Brand-Equity/What-makes-MMs-Scorpio-as-highest-selling-SUV-brand/articleshow/4908859.cms
3. http://blog.gaadi.com/blog-243-Mahindra_Scorpio_AT_Review
4. http://www.mouthshut.com/review/Mahindra_Scorpio-38212-1.html
5. http://autos.maxabout.com/cvid0000367/mahindra_scorpio_m_hawk_2.aspx
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