SCORPIO FROM MAHINDRAGeared Up For Success

Presented By : Group 3 Section E

Achal DugarMayank Sinha

Shimona SiwatchPriyansh Acharya

Chinmaya Ranjan Ray

What we will learn in this case???

• How a new product development is initiated ??

• What are the ingredients needed for a successful PRODUCT LAUNCH ??

• How value preposition can be strengthened through strategic branding ??

Why INDIA is a HOT target for international car manufacturers

• Cost of Labor is very low .

• 100 % FDI for automobile industry.

• Presence of customers for every kind of car segment i.e. from economy segment to luxury segment.

Major Players in Utility Vehicle

SHARE IN PERCENTAGE (02-03)

5518

1368

MARUTIHYUNDAITATAFORDOTHERS

WHAT A CONSUMER WANTS IN Utility Vehicle

• Customer preferred big sizes as it stands for status.

• Consumers seeks latest technology.

• Customer wants to drive an SUV (Sports Utility Vehicle) but at an affordable price.

• Luxury is the top most priority.

An STP Analysis Before The Launch Of Scorpio [ANOTHER STP IS DONE AT 14TH SLIDE] • They Segmented the market into

RURAL and the SEMI URBAN.

• They found most of the sales from Army, Police, Paramilitary forces etc.

• They were positioned as a tough, reliable and economic vehicles but not technologically advanced.

As their market share starts declining, management came with

following objectives…

• To create a new segment .

• To provide an excellent value preposition to the customer.

• To optimize project costs.

• Based on the consumer research Mahindra found that there still exists an untapped market i.e. of SUV’s {Sports Utility Vehicle}…….

• And from there, success story of SCORPIO started with the vision :-

To be a global niche player and to continue the domination of UV market.

Problems Faced During The Project Scorpio

• To develop the presence in urban market without losing the dominance in rural market.

• The project cost has to be optimized as they don’t had the deep pockets as other MNC’s had.

• To develop a product which is affordable and provides greater value.

Product Development Process Of Scorpio

• IDAM {Integrated Design and Manufacturing } process was used to develop a zero-defect, trouble free product.

• Supplies were from the outside but the product was Indian.

• Project cost was $120 m. Only one fifth of the cost that MNC incurs.

Product Development Process Of Scorpio

• Scorpio was tested and re-tested again and again till every component has the right combination and form.

• New manufacturing facility was set up in Nashik to ensure quality product at the end of the line.

MARKETING STRATEGIES OF MAHINDRA

• First and foremost, they tried to provide a status of Pajero in Scorpio at affordable price.

• In another intelligent step, shadow endorsement was done which doesn’t shout Mahindra.

• Advertising, Public Relation, Mass media…nothing was left to make brand popular.

MARKETING STRATEGIES OF MAHINDRA

• Scorpio adopted penetrative pricing strategy positioned between 5-7 lakhs.

• As they were targetting urban areas, stronger distribution channels were needed.

• Scorpio was launched in phase manner i.e. first in metros and then other cities were covered so as to ensure the attention towards main market first.

STP Analysis After The Launch Of SCORPIO

• Segmented the market between rural, semi urban and the new one “URBAN”.

• Targeted the luxury car buyers & upper middle modern car buyers as the price were kept as low as between 5 to 7 lacs.

• Positioned Scorpio as a powerful vehicle with a sporty look among the premium car consumers

Objectives Set For the ScorpioObjectives Set For the Scorpio

• To make Mahindra emerge as a true To make Mahindra emerge as a true urban player.urban player.

• To capture 22 % of premium market in To capture 22 % of premium market in first year and 45% within 3 years.first year and 45% within 3 years.

PORTER’S FIVE FORCES ANALYSIS

Threat from Buyers LOW / Favorable Getting SUV at such an affordable price

Threat from Suppliers HIGH / Unfavorable Car is manufactured through global alliance of companies each company handling different sets of areas

Threat from Competitors

LOW / Favorable No presence of SUV’s at this price

Threat from New Entrant

HIGH/ Unfavorable Govt. has approved 100 % FDI and minimum capital investment for new entrant has been removed

Threat from Substitutes

Moderate / Moderately favorable

Presence of MUV, Sports bikes etc

The SCORPIO Impact on M&M• Revenue of Mahindra increased from Rs

1827cr. to Rs. 2511cr. with better returns to their share holders.

• Profit also zoomed up from Rs. 102 cr. to 147 cr. in FY 03.

THANK YOU

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