Project Report on REVA

C Niranjan (PGP13/064A) Anuradha Tadepalli (PGP13/074) Gavli Abhijeet P (PGP13/084) Rohit Kawatra (PGP13/104) Sumit Solanki (PGP13/114) Ventaka Prasad V (PGP13/124)

REVA – THE CAR OF THE FUTURE

MM Project

2 Reva – The Car of the Future

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TABLE OF CONTENTS

EXECUTIVE SUMMARY ________________________________________________________________ 5

BRIEF HISTORY _________________________________________________________________ 5

CURRENT STATUS ________________________________________________________________ 5

PLAN OF ACTION ________________________________________________________________ 5

BRAND CHOICE RATIONALE ____________________________________________________________ 6

MARKETING SURVEY _________________________________________________________________ 7

AGE GROUP____________________________________________________________ 7

GENDER_______________________________________________________________ 7

PREVIOUSLY/CURRENTLY OWNED CAR ______________________________________ 7

IMPORTANCE OF POWER DRIVE ___________________________________________ 8

IMPORTANCE OF FUEL EFFICIENCY _________________________________________ 8

IMPORTANCE OF MAINTENANCE COSTS _____________________________________ 8

IMPORTANCE OF REPUTATION OF BRAND ___________________________________ 8

IMPORTANCE OF PRICE __________________________________________________ 9

IMPORTANCE OF SIZE OF CAR _____________________________________________ 9

IMPORTANCE OF LOOKS AND COMFORT ____________________________________ 9

IMPORTANCE OF EASE OF SERVICE _________________________________________ 9

IMPORTANCE OF ADDITIONAL SERVICES LIKE INSURANCE ______________________ 10

IMPORTANCE OF ENVIRONMENT FRIENDLINESS OF CAR _______________________ 10

TIME PERIOD FOR BUYING A NEW CAR _____________________________________ 10

PRICE RANGE OF CAR DESIRED ____________________________________________ 10

REQUIREMENT OF A CAR AS A SECOND VEHICLE INSTEAD OF A 2 WHEELER ________ 11

GENERAL AWARENESS ABOUT REVA _______________________________________ 11


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SOURCES OF INFORMATION OF REVA ______________________________________ 11

PREFERENCE OF REVA GIVEN THAT IT HAS 10 TIME THE FUEL EFFICIENCY __________ 11

SITUATION ANALYSIS ________________________________________________________________ 12

5CS ________________________________________________________________________ 12

COMPANY _____________________________________________________________ 12

PRODUCT ______________________________________________________________ 12

CUSTOMER ____________________________________________________________ 13

COLLABORATOR _________________________________________________________ 13

COMPETITION___________________________________________________________ 13

CONTEXT ______________________________________________________________ 14

SWOT ANALYSIS _____________________________________________________________ 16

STRENGTHS ____________________________________________________________ 16

WEAKNESSES ___________________________________________________________ 16

OPPORTUNITIES _________________________________________________________ 17

THREATS ______________________________________________________________ 17

PORTER’S 5 FORCES ___________________________________________________________ 17

THREAT OF NEW ENTRANTS - LOW ____________________________________________ 17

BARGAINING POWER OF BUYERS - HIGH ________________________________________ 17

BARGAINING POWER OF SUPPLIERS -LOW _______________________________________ 17

CURRENT RIVALS IN THE CATEGORY -HIGH ______________________________________ 18

PRESSURE DUE TO SUBSTITUTES - HIGH _________________________________________ 18

MARKETING OBJECTIVES _____________________________________________________________ 18

INCREASING SALES ______________________________________________________________ 18

CREATE BRAND AWARENESS _______________________________________________________ 18


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MARKETING STRATEGIES _____________________________________________________________ 18

SEGMENTATION SCHEME _________________________________________________________ 18

SEGMENTATION PROFILES _________________________________________________________ 19

TARGET SEGMENT ______________________________________________________________ 20

POSITIONING __________________________________________________________________ 20

MARKETING ACTION PROGRAMS ______________________________________________________ 21

PRODUCT ____________________________________________________________________ 21

PRICE _______________________________________________________________________ 21

PLACE _______________________________________________________________________ 22

PROMOTION __________________________________________________________________ 22

PR __________________________________________________________________ 22

MASS MEDIA ___________________________________________________________ 22

ADVERTISING ___________________________________________________________ 22

PERSONAL SELLING (PUSH STRATEGY) __________________________________________ 23

DIRECT MARKETING _______________________________________________________ 23

IMPLEMENTATION __________________________________________________________________ 23

BUDGET _____________________________________________________________________ 23

ACTIVITY SCHEDULE _____________________________________________________________ 23

FINANCIAL PROJECTIONS _____________________________________________________________ 24

TABLE OF AUTHORITIES ______________________________________________________________ 25

TABLE OF FIGURES __________________________________________________________________ 25


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EXECUTIVE SUMMARY

BRIEF HISTORY

REVA Electric Car Company Private Ltd. (RECC), based in Bangalore, India, was established in 1994 as a

joint venture between the Maini Group India and AEV LLC, California USA, to manufacture environment-

friendly and cost-effective electric vehicles (EVs). Seven years of R&D earned the RECC recognition in the

form of 10 patents and a globally accepted product. REVA, India's first zero polluting Electric Vehicle for

city mobility, was commercialized in June 2001.

CURRENT STATUS

REVA is currently being sold primarily in Bangalore, the city where it is manufactured. It has sales points

in other major cities like Bombay, Ahmedabad, Hyderabad, Delhi, Pune, Kolkata, Goa and Agra. It is also

sold in 9 other countries which include United Kingdom, Italy, Malta, Cyprus, Norway, Spain Ireland,

Japan, Srilanka, and being test marketed in Australia, Switzerland, Germany, and Austria, Nepal The

company currently uses direct word of mouth publicity to gain customer base. It doesn’t advertise on TV

or other media. The sources of information for the customer Most of the sales come from referrals

from previous customers. For most of the customers this is the second car and 50 per cent of the

customers are women. The car is being predominantly sold in Bangalore.

PLAN OF ACTION

We intend to create a complete and comprehensive marketing strategy for the product REVA. We

understand that different customers have different perceptions about the product because of lack of

product positioning done by the company. We want to market a new concept like REVA in the Indian

market by first identifying target markets not only in one or two cities like in the current case but across

the whole of India and then positioning the product accordingly to maximize sales in all cities. In this

marketing strategy, we shall also take into account the customer inertia that the car will face, not only

because it is the first of its kind but also because it would be difficult to get people to change their style

of driving from petrol cars to electric cars.


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BRAND CHOICE RATIONALE We chose this product because we think that REVA is a concept for the future. It has the advantage of

being environment friendly, something that will appeal to the customer. Because of spiraling fuel prices

and the fact that REVA will provide road travel at 40 paise per km, this car will appeal to customers even

more, if marketed properly. Moreover, with an increased realization in the automobile industry about

the non-renewability of petrol as a resource, the focus will now be on vehicles that run either on

electricity or on other fuels such as hydrogen. This gives REVA a head start in the paradigm shift towards

development and deployment of such kinds of vehicles. But the sale of this product is currently

restricted only to a limited segment of people. Hence the company is not doing as well as it would want

to in terms of sales. We chose this product because the company does not market its product using any

other medium other than word-of-mouth and its website. Hence we intend to come up with an effective

marketing strategy for the product from scratch.


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MARKETING SURVEY We conducted a market survey among urban people who are a part of the current target clientele. The

questions asked and the resulting answers are given below graphically.

AGE GROUP

FIGURE 1: AGE GROUP OF SURVEY RESPONDENTS

GENDER

FIGURE 2: GENDER DISTRIBUTION OF SURVEY RESPONDENTS

PREVIOUSLY/CURRENTLY OWNED CAR

FIGURE 3: PREVIOUSLY OWNED CARS


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IMPORTANCE OF POWER DRIVE

FIGURE 4: IMPORTANCE OF POWER DRIVE

IMPORTANCE OF FUEL EFFICIENCY

FIGURE 5: IMPORTANCE OF FUEL EFFICIENCY

IMPORTANCE OF MAINTENANCE COSTS

FIGURE 6: IMPORTANCE OF MAINTENANCE COSTS

IMPORTANCE OF REPUTATION OF BRAND

FIGURE 7: IMPORTANCE OF REPUTATION OF BRAND


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IMPORTANCE OF PRICE

FIGURE 8: IMPORTANCE OF PRICE

IMPORTANCE OF SIZE OF CAR

FIGURE 9: IMPORTANCE OF SIZE OF CAR

IMPORTANCE OF LOOKS AND COMFORT

FIGURE 10: IMPORTANCE OF LOOKS AND COMFORT

IMPORTANCE OF EASE OF SERVICE

FIGURE 11: IMPORTANCE OF EASE OF SERVICE


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IMPORTANCE OF ADDITIONAL SERVICES LIKE INSURANCE

FIGURE 12: IMPORTANCE OF ADDITIONAL SERVICES

IMPORTANCE OF ENVIRONMENT FRIENDLINESS OF CAR

FIGURE 13: IMPORTANCE OF ENVIRONMENT FRIENDLINESS

TIME PERIOD FOR BUYING A NEW CAR

FIGURE 14: TIME PERIOD FOR BUYING A NEW CAR

PRICE RANGE OF CAR DESIRED

FIGURE 15: PRICE RANGE OF CAR DESIRED


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REQUIREMENT OF A CAR AS A SECOND VEHICLE INSTEAD OF A 2 WHEELER

FIGURE 16: REQUIREMENT OF A CAR AS A SECOND VEHICLE

GENERAL AWARENESS ABOUT REVA

FIGURE 17: GENERAL AWARENESS ABOUT REVA

SOURCES OF INFORMATION OF REVA

FIGURE 18: SOURCES OF INFORMATION OF REVA

PREFERENCE OF REVA GIVEN THAT IT HAS 10 TIME THE FUEL EFFICIENCY

FIGURE 19: PREFERENCE OF REVA GIVEN THAT IT HAS 10 TIMES EFFICIENCY


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SITUATION ANALYSIS For situation analysis, we decided to do with 5Cs, SWOT and Porter’s 5 forces analyses to provide a

holistic view of the entire situation and encompass internal and external forces at work.

5CS

COMPANY

Some basic facts about the company include:

Incorporated in 1994 as Reva Electric Car Company (RECC)

RECC is a joint venture between Maini Group, Bangalore, India and AEV LLC, California, USA

Based on the principle of energy conservation and environment friendliness, the company was

built to produce India’s first zero pollutant car that ran on electricity for urban transportation

First Reva released on 11th May 2001

The Company received ISO certification in August 2002

The company has a policy of launching a new model every year with technological

advancements and allocates about 30-50% of its funds for the same

Funds from private funds and venture capitalists

Projected sales of 3,000-4,000 cars by 2010 and 10,000 by 2011

New plant being built to produce 30,000 cars

PRODUCT

Maximum speed of 80 kmph with a battery life of 80 km.

6 hours to charge 100% and 2.5 hours for 80% charge

USP of being eco-friendly and possesses fuel saving characteristics.

Capacity of carrying 2 adults and 2 children

Low turning radius and size

Cost of 2.49 lakhs initially and now 3.3 lakhs

Additional safety and strength features incorporated following past complaints. Dent proof body

material used to prevent damage during accidents.

High visibility from within the car due to small bonnet and high seat


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Low maintenance cost of Rs 700 for every 6 months

Better suited for city driving with ease of maneuvering and parking and small size

20-25% growth since 2001 in sales

CUSTOMER

Customer is well informed. As there are no advertisements in TV or other mass media, the

information is spread through word of mouth or news in the media

50% current customers are women in urban centers

Customers from all age segments present

Adopted by elderly due to ease of driving due to lack of clutch and gears.

Used as a second vehicle for daily activities by many

COLLABORATOR

Suppliers are ready for small batch production schedules

Showrooms in 6 cities across the country run by the company itself

Research and development is also internal

Direct contact with customers of the company eliminating middle men

COMPETITION

The REVA was priced at a moderate Rs 2,49,000 earlier and now Rs 3,30,000

The expense of fuel comes out to about Rs. 0.40 per km

The company faces no direct competition in this segment apart from the probable entry in the

segment by big companies like TATA, Renault-Nissan, GM and even BMW within a period of 10

years.

Indirect competition involves 2-wheelers also

Faces competition from Maruti 800 because it is priced in the same range and has been

attributed as common people’s car for quite a long time. Similarly, other cars like Hyndai Santro

and Tata Indica are also priced in the same range.

New competition from TATA NANO which is the cheapest car till date priced at a mere Rs

1,00,000. NANO provides space for 4 adults even up to 5 while REVA provides space for 2 adults

and 2 children at such a low price.


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CONTEXT

REVA was launched in the year 2001, the petrol prices in that year and in present year 2009

alongwith the cost per kilometer is as follows:

TABLE 1: COST OF PETROL PER LITER IN CONVENTIONAL CARS

YEAR 2001 2009

Petrol Price (Rs. Per liter) 30.00 49.00

Fuel Efficiency of Average Small Car (km/liter) 14 14

Cost per kilometer (Rs.) 2.14 3.50

Considering the above data, the cost per kilometer of the car is increasing by 13.6% per year

which is very high

There is an increasing awareness among people pertaining to global warming.

Also savings due to Reva are significant given that people can recover the entire cost of the car

within a period of 5 years as shown below.

VALUE PROPOSITION FOR CORPORATES

Reva’s contribution to the company bottom line is not limited to its ridiculously low cost of operation and

maintenance alone. Under the Income Tax Act, the REVA qualifies for 80% depreciation on a Written

Down Value (WDV) basis, as compared to 20% for other cars. This means an unbelievable excess tax

saving of over 21% of the cost of the car in the first year itself. In cash flow terms this means that the

Reva makes the most car sense. Just take a look at what Reva saves you vis-à-vis a competing product

in the first year itself.

TABLE 2: SAVINGS PER MONTH DUE TO REVA USAGE FOR CORPORATES

Cost saving per month In Rs.

ITEMS REVA CONVENTIONAL CAR

Average On Road Price (Rs) 400000 400000

Depreciation allowed in Yr 1 320000 60000

Tax Benefit 108800 20400

Tax savings (Rs) 88400

Fuel (Petrol) cost (Rs/Litre) 58


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Electricity cost (Rs/Unit) 3.6

Total operating Cost/month 607.5 6214

Total operating Cost/annum 7290 74568

Cost Savings for REVA 67278

Fuel savings on REVA (Rs) 71925

Total Savings (Rs) 160325

*Assuming that a person travels 1500 kms a month, the average fuel economy achieved in city driving

condition 14km/lts

*Average maintenance

VALUE PROPOSITION TO THE CUSTOMER

Price of the Reva i, standard car: 3.3 lacs. The average cost of coverage per kilometre for the Reva: 40 paisa = Rs 0.4 Through our survey we found out that the weighted average of the number of kilometres that an average respondent travels daily: 30 km The average of fuel economy of cars in Reva’s price range (for example Hyundai Santro, Maruti Zen, Maruti Suzuki WagonR) is: 12-13 km per litre of petrol. But for the purposes of city driving, which is stop and go in nature with long halts, the average drops to 10 km per litre. We shall take an average of 11 km per litre on a conservative estimate. Minimum saving of over a 1 year period with REVA = Rs. 40,843 Minimum saving of over a 3 year period with REVA = Rs. 1,22,530 Minimum saving of over a 5 year period with REVA = Rs. 2,04,215 The depreciation costs same in both types of cars and hence we shall not factor them in. This shows that this car will actually recover 2,04,215/3,31,000 = 62% of its costs in 5 years of operation in comparison to a similar petrol driven car. For long distance travellers, taking the average no of kilometres per day to 50 km, we get the following results, Distance travelled per day: 50 km Minimum saving of over a 1 year period with REVA = Rs. 68,072 Minimum saving of over a 3 year period with REVA = Rs. 2,04,218 Minimum saving of over a 5 year period with REVA = Rs. 3,40,360


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This shows that this car will actually recover 3,40,360/3,31,000 > 100% of its costs in 5 years of operation for a long distance traveller. In any case this car offers a great value proposition for the customers in terms of economy. Note that we

haven’t yet quantified the environmental benefits that this car has over other petrol/diesel driven cars.

FIGURE 20: COST SAVINGS DUE TO REVA FOR PERSONAL USERS

SWOT ANALYSIS

STRENGTHS

No Competition in the Electronic Vehicle Segment.

Environment friendly car

Economic to Drive (0.4 paise/KM)

Successful in Export Markets (no 1 in UK)

Easy to Drive (gearless, clutchless, small turning radius)

Easy to park (small size)

WEAKNESSES

Competition from gasoline vehicles

Small size

High Price

Low consumer awareness

Low top speed (80KM/hr)


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Small driving range (upto 80 KM)

OPPORTUNITIES

Huge untapped EV market

Growing demand of green technologies

Rising fuel costs

Growing road congestion in urban cities

THREATS

Government incentives to gasoline vehicles

Entry of competitors

Stringent safety requirements anticipated

Availability of hybrid vehicles

PORTER’S 5 FORCES

THREAT OF NEW ENTRANTS - LOW

Suzuki Global Car

Tata Motors- Nano( Priced At 1 Lakh)

Bajaj-Renault-Nissan Small Car (Electric)

Field Marshall (India) and Farnow Group (Austarlia) Small Car

Ajanta Group Small Car Project

BARGAINING POWER OF BUYERS - HIGH

The product is currently one of a kind and hence it doesn’t have a competition to compare

against

As there are many alternatives to the car like 2 wheelers and other petrol driven cars, the

buyers has to make more than one choices while buying the Reva. Hence, the buyers need to

decide if the price is appropriate for the value provided.

BARGAINING POWER OF SUPPLIERS -LOW

Reva has a strong base of 175 suppliers and these have been supplying to Reva for its industrial

material handling products.

Reva is also into Automotive Components Manufacturing for many years and manufactures

many components for itself thus giving less bargaining power to its suppliers


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CURRENT RIVALS IN THE CATEGORY -HIGH

Tata Indica, Maruti Alto, Maruti-800 are the current rivals

Also, 2 wheelers provide indirect competition to Reva as a substitute with nearly similar

purchasing and operating costs.

PRESSURE DUE TO SUBSTITUTES - HIGH

Tata Indica,Maruti-800,Wagon-R,Alto & Maruti Zen are striving for increasing their market share

and this puts continuous pressure on Reva to innovate and compete with these substitutes

Future Substitutes- Tata Nano, Bajaj-Renault-Nissan Small Electric Car, field Marshall Group

Small Car, Ajanta Group Small Electric Car (Proposed Price Rs. 85,000) also pose a challenge to

REVA

MARKETING OBJECTIVES The main marketing objectives for REVA are:

1. Increase Sales

2. Create brand awareness

INCREASING SALES

The current sales of REVA are not sufficient to achieve break even. As a result, RECC is having problems

in deciding the long term strategies for the company. Though people like the concept of car on

electricity, still many people are apprehensive when it comes to buying the car. This is because of the

unavailability of recharge points on existing roads and the present scenario of power deficiency in India.

CREATE BRAND AWARENESS

Reva as of now is a well know product, as reflected by the survey. It doesn’t have an advertising

program but depends on its site and word-of-mouth publicity. But, when it comes to other big players in

the automotive sector, Reva lags behind. To add to this, big players like GM, Renault-Nissan, Toyota and

even TATA are planning to make an entry in the Environment Friendly Car Segment. As a result, RECC

has to make itself a good brand in order to compete with the big players. Otherwise, RECC may lose the

first mover advantage in this sector.

MARKETING STRATEGIES

SEGMENTATION SCHEME

The current segmentation scheme for Reva is based on utility, gender and income preference. The

target segment includes working women, college going students, small families with one or no children

and for families that are looking to substitute a 2-wheeler with a car for the purpose of a second vehicle.


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Highly environment friendly people also prefer Reva for city use. The geographic distribution is

restricted to 6 states and overseas operations in 10 countries.

SEGMENTATION PROFILES

We recommend a widening of the customer base on various grounds. Firstly, the sales should be

expanded to all of the country as compared to just 6 states. Tier I and Tier II cities can be targeted for

sales. In Tier I cities, the congestion in traffic, lack of parking space and long queues at the petrol pump

can be avoided if Reva is used by a high percentage of the population. Also, in these cities pollution is a

major cause of concern that can be addressed by Reva. Some states like Rajasthan, Uttarakhand, Andhra

Pradesh, etc, have given subsidy in road taxes or other taxes for public and corporate using environment

friendly vehicles like Reva. In Tier II cities, the economy of the car can be emphasized to the middle

income bracket that forms a majority of the working population. As the car is preferred by women for its

ease of driving, the following data presents the potential for use in case expansion to all the states

across the country. The current coverage is only 40% of the entire female working population in urban

centers.

TABLE 3: NUMBER OF WORKING WOMEN IN INDIA AND A FEW STATES

Number of working women(‘000)

Geographic Segment Public Sector Private Sector Total

Delhi 92.98 33.78 126.76

Uttar Pradesh 173.01 53.03 226.04

West Bengal 107.24 120.08 227.32

Gujarat 147.51 94.24 241.75

Maharashtra 373.77 233.38 607.15

Goa 10.18 6.91 17.09

Karnataka 267.69 323.61 591.29

India 3002.82 2117.69 5120.5

The age distribution given below, shows that the majority of the population in the country is within the

age segment of 20-60. This is the age when driving is most required for working people. Hence, age

wise, this age segment is most appropriate for Reva.

TABLE 4: AGE WISE POPULATION DISTRIBUTION IN URBAN CENTERS IN INDIA

Age wise Population Distribution in the Urban centers

Age Group Males Females Total

20-24 28365228 15193668 13171560

25-29 25737253 13180373 12556880

30-34 22445165 11673137 10772028

35-39 21615541 11157103 10458438

40-44 17173126 9458276 7714850

45-49 14453974 7844213 6609761

50-54 10809961 6038917 4771044

55-59 7682278 4010268 3672010


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Secondly, using the findings of the market survey mentioned earlier, we see that for most people, fuel

efficiency is the most important factor considered while buying a car followed by

TARGET SEGMENT

The target segment that we propose is middle and upper income groups across geographic locations

throughout the country. As explained earlier, Tier I and Tier II cities, both should be targeted. Increasing

the coverage to across the country will involve a few initial costs, as the showrooms and outlets are

managed by the company itself, but a 150% increase in target audience occurs validating the initial

expenses. Women, college goers and also people looking for a bike can be given the Reva as a car made

to save them money and meet all their requirements of driving in the city where the average speed is 20

kmph. An EMI Calculator is shown for people who would like to buy the Reva instead of a 2-wheeler.

TABLE 5: EMI CALCULATOR

Months EMI EMI/lakh

Loan Amount Applied For Rs 264912.8 12 Rs. 23786/- Rs. 8979/-

Rate Of Interest 14% 24 Rs. 12719/- Rs. 4801/-

36 Rs. 9054/- Rs. 3418/-

48 Rs. 7239/- Rs. 2733/-

60 Rs. 6164/- Rs. 2327/-

72 Rs. 5459/- Rs. 2061/-

POSITIONING

The Reva is positioned as the following based on the statistics and survey results presented earlier.

Environment friendly car, electric run and non polluting

Easy to drive

Easy to maneuver

Small size

Stable and safe while driving

City car

High value for money for user and environment also


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Considerable savings during usage

Ideal second vehicle for performing daily routine tasks like going to the market, picking up

children from school, etc.

Representing progressive innovation

MARKETING ACTION PROGRAMS

PRODUCT

Battery electric vehicle designed for low speed, congested, urban conditions

Market and technology leader in EVs

Inherent benefits of an electric car

Highly differentiated due to advanced technologies

Easy to charge, charging is as simple as charging a mobile

Easy to park due to small size

Low operating cost 40 paise /Km compared to 4 Rs/km for petrol cars

Low maintenance cost due to low number of movable parts

Easy serviceability

Not causing any pollution while usage

REVA has the best-in-class safety features like dent-proof ABS body panels, side-impact beams, a

steel space frame and dual-braking system.

REVA is one of the most feature rich vehicles available in the market. Features like the Climate

Control Seat (CCS™) and Remote Controlled A/C have been especially incorporated to improve

passenger comfort at an affordable price.

The design methods and manufacturing philosophy used in REVA allow it to be manufactured

cost effectively even at low volumes.

PRICE

Actual Price - 3.3 lakhs

Competitive pricing strategy based on the cost of the production and return on investment

http://www.revaindia.com/safety.htm

http://www.revaindia.com/revastdfeat.htm


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Main cost of lithium ion batteries.

Government subsidizes 33 % of EV costs for purchases involving PSUs, govt departments, private

institutions when ordered in bulk

Road taxes are subsidized for users of EV

PLACE

Exclusive showrooms and sales outlets in major Tier I and Tier II cities

Retail battery outlets across the country

Collaboration with Reliance Digital to leverage its well established distribution network

Target corporations and government organizations for bulk deals

Service and customer care centers in all the major cities

PROMOTION

Currently Reva doesn’t have any promotion strategy. Its site acts as a point of contact between people

and the company. Currently the public is aware about its being a zero-emission vehicle, but other

benefits of the car are unknown. Also some misconceptions exist regarding its safety, power and drive.

Building impact through various media public relations, mass media, advertising and events can be done

to increase public awareness about the other aspects of Reva and clear up misconceptions.

PR

Pre launch excitement and buzz created before the release of the new model every year,

because of being the first of its kind in Indian market

High coverage of the launch in media

MASS MEDIA

Creating awareness among the target segment about electric vehicles emphasizing the key

features like low maintenance costs and easy to drive etc

Clearing misconceptions through positive advertising

Appealing to the target segment by emphasizing the importance of being eco friendly

ADVERTISING

Displaying in college festivals and major events like trade fairs, Auto shows in major cities.

Placing hoardings at major junctions in cities.

Print advertisements in all the major dailies.


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Advertising through radio and Television using film stars or cricketers as Brand ambassadors

Advertising in Car magazines

Booklets and Pamphlets can be distributed at car showrooms and retail battery outlets

PERSONAL SELLING (PUSH STRATEGY)

Dealer acts as the interface between company and customer

The sales personnel of the dealership attend to the individual customers

The sales executive of the company needs to make sales presentation to corporate buyers

Tie ups with banks for loans for customers

Tie ups with organizations for bulk sales

DIRECT MARKETING

In the case of Direct Marketing the Company Officials directly contact the Prospective buyers with the

information available through various sources. For example in case of Road Shows, Trade Fairs, Auto

shows etc. Sometimes the existing customers also provide references of prospective buyers such as their

friends or relatives.

IMPLEMENTATION

BUDGET

The expenses of the company for marketing include mainly that of an advertising budget. We would like

to use the percentage of sales method. The desired sales for Reva are around 7,000 cars to break even

when the current sales are of around 3,000 cars per annum. Hence, the desired revenue amount is

7,000 * 3,30,000 = Rs 2,31,00,00,000. Hence if we consider 20% of these costs as this will be the first

advertising campaign for the product, the total budget for advertising is Rs 46,20,00,000. The costs for

Research and development are fixed at $ 20 million which has been funded by private equity.

ACTIVITY SCHEDULE

The activity schedule around the advertising campaign will revolve around the product launch that

happens every year.

3 months prior to the product launch, the advertisements in the media, print, television and radio,

should start that create curiosity regarding the product.

During the product launch, along with the advertisements, the messages regarding loans should be sent

across to the public to facilitate conversion of 2 wheeler buyers into Reva’s customers.


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For the remaining period, testimonials from satisfied customers can be sent across to concretize the

message for buyers to be pulled towards Reva.

FINANCIAL PROJECTIONS Fresh investments that Reva got = $ 20 million (from Private Equity)

New capacity (by end of 2010) = 30,000 cars.

Target sales by 2010: 30,000

Sales achieved in 2009: 3000

Sales to be achieved for break-even = 7000 cars. (Company claims)

Selling Price of iReva = 3.3 lakhs

Break-even revenue = 7000 x 330,000 = 2,310,000,000 = Rs. 2.3 billion

Revenue achieved in 2009 = 3000cars x 3.3 lakhs/car = Rs 1 billion

Rate of growth achieved till now ≈ 10%

Rate of growth expected for the next 3 years: 7000 = 3000 (1 + r/100)3

R = 32.6%

The company’s sales have been growing only very steadily

The company needs 3 times the growth of 32.63% for the next 3 years to just achieve break-

even sales, which in itself is an uphill task

Since the company is relying primarily on funding and Private equity investments, it has

probably got the last big boost of equity from a partner and hence this is the company’s last

chance to improve sales and turn profitable

The horizon for improvement of 3 years seems unreasonable given the past growth

Considering a 5 year period:

7000 = 3000(1 + r/100)5

R = 18.46% growth in sales

So if the sales still grow at twice the rate, it shall take about 5 years to just break-even. Hence the

company’s decision to increase capacity to 30,000 cars seems a step in preparation for the future and is

the last effort to save it from bankruptcy.


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REFERENCES

i. www.revaindia.com

ii. www.dnaindia.com

iii. www.business.outlookindia.com

iv. www.auto.indiamart.com

v. http://www.businessworld.in/index.php/Can-Reva-Go-the-Extra-Mile.html

vi. http://www.businessworld.in/index.php/Automobiles/Reva-Takes-Charge/Page-2.html

vii. http://www.indiastat.com

TABLE OF AUTHORITIES Table 1: Cost of petrol per liter in conventional cars __________________________________________________ 14

Table 2: Savings per month due to reva usage for corporates __________________________________________ 14

Table 3: number of working women in india and a few states __________________________________________ 19

Table 4: age wise population distribution in urban centers in india ______________________________________ 19

Table 5: EMI calculator _________________________________________________________________________ 20

TABLE OF FIGURES Figure 1: Age group of survey respondents __________________________________________________________ 7

Figure 2: Gender distribution of SURVEY RESPONDENTS ________________________________________________ 7

Figure 3: Previously owned cars ___________________________________________________________________ 7

Figure 4: importance of power drive _______________________________________________________________ 8

Figure 5: Importance of Fuel Efficiency______________________________________________________________ 8

Figure 6: Importance of Maintenance Costs _________________________________________________________ 8

Figure 7: Importance of reputation of brand _________________________________________________________ 8

Figure 8: Importance of Price _____________________________________________________________________ 9

Figure 9: Importance of size of car _________________________________________________________________ 9

Figure 10: importance of looks and comfort _________________________________________________________ 9

Figure 11: importance of ease of service ____________________________________________________________ 9

Figure 12: importance of additional services ________________________________________________________ 10

Figure 13: importance of environment friendliness ___________________________________________________ 10

Figure 14: time period for buying a new car ________________________________________________________ 10

Figure 15: Price range of car desired ______________________________________________________________ 10

Figure 16: requirement of a car as a second vehicle __________________________________________________ 11

Figure 17: general awareness About reva __________________________________________________________ 11

Figure 18: sources of information of reva __________________________________________________________ 11

Figure 19: preference of reva given that it has 10 times efficiency _______________________________________ 11

Figure 20: Cost savings due to reva for personal users ________________________________________________ 16

http://www.revaindia.com/

http://www.dnaindia.com/

http://www.business.outlookindia.com/

http://www.auto.indiamart.com/

http://www.businessworld.in/index.php/Can-Reva-Go-the-Extra-Mile.html

http://www.businessworld.in/index.php/Automobiles/Reva-Takes-Charge/Page-2.html

http://www.indiastat.com/

Date post:	27-Apr-2015
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