mahindra case study - creating the scorpio
TRANSCRIPT
Case: Mahindra ScorpioHow should Mahindra position the Scorpio?
SMP12 Mumbai Borivali Team
United States◦ General Motors◦ Ford Motors◦ Daimler Chrysler Group
Japanese◦ Toyota◦ Nissan◦ Honda
European Market◦ Volkswagen ◦ Peugot
Global Automobile Industry
Five Segments based on price ranges◦ Two wheelers◦ Micro hatchback cars◦ Ultra hatchback cars◦ Mid-sized cars◦ Utility vehicles
The Indian Automobile Industry
Established and assembled Willys Jeep
kits. Listed on BSE 2 years
later1945
1961Started production of
light commercial vehicles and tractors
Restructuring of Mahindra forming in the core activities of
Uvs, LCVs and tractors in one group
1994
1997Scorpio story began
as part of the restructuring
The Mahindra Story
$120 million investment with 120 full time team members making it the largest initiation of the company
19 cross functional teams looking after various divisions including design, manufacturing, testing etc. handled very differently than industry standards
6 years for completion, 100% indigenous
Stylish and powerful, value for money, some exciting taglines making it very interesting
The Scorpio Story – Key features
Increased revenue of the company in 2002-2003
Changed the automotive market and forced competition relook at the UV sector differently
Market scenario in the 1990s had forced Mahindra to rethink strategy due to players like Toyota, Telco, etc.
The Scorpio Story – Key features
Setup plant in Nashik to manufacture Scorpio
Integrated Design and Manufacturing (IDMA)◦ Multifunctional product design and
development team◦ Quick decisions along with checks and
balances◦ Flat hierarchy reporting into 1 head, allowed
for high performance◦ Balancing of costs within departments
Project scope changed from Rural to Urban market
Project Scorpio
Building of the brand considering the Indian consumer in mind
6 months of market research holding product clinics with vehicle owners, qualitative research
Key highlights showed surprising results◦ Noise and vibration not a priority was
highlighted in the survey◦ Consumer paying attention to minor details◦ Image conscious◦ No one sees my house but my car, so I need
to make an impression
Scorpio – Market Research
Need to keep low costs, employed unique technique in auto manufacturing – moved away from the conventional strategy
Turned over significant part of process to suppliers All major systems designed and engineered by suppliers, also carried
out testing Allowed flexibility to suppliers by conveying requirements
◦ Temperature drop needed over time, rather than number of air vents needed. Provided flexibility to suppliers to determine their own ways to meet
requirements
Scorpio - Sourcing
Low cost investments for manufacturing◦ $120 million against $280 million
Flexibility in choosing partners, though unknown against MNCs who had a preferred vendor list
Fewer hires, low manpower costs for engineering development in India
Managed very low costs at the testing phase◦ MNCs build 200 prototypes at 15-20 times cost of the vehicle◦ M&M build 75 prototypes at 2-3 times cost of the vehicle
Scorpio - Manufacturing
Launch of Bolero used for various marketing activities including media, brand development and planning of the launch
What customers wanted was distinctly different than existing perception of Mahindra
Built brand identity prisms showed significant gap to be bridged Chose to position the Scorpio as a car, not a UV because of blurring boundaries Advertising phrases of “Car Plus” and “Luxury of a Car, Thrill of a SUV” was
meant for those considering a car but wanting added SUV power Held press driven events to sell positives of the car to auto experts. Provided
publicity for functional elements
Scorpio – Marketing the product
Capitalized on existing dealers while differentiating Scorpio from other products
Dealers needed to have separate outlets for Bolero and Scorpio, reinforcing the message that vehicles had distinct identities
Sales areas separated visually by using color scheme and décor Upgrading of the outlets and staff with personnel to handle
queries of the urban market
Scorpio - Distriubtion
Core Product – Multi-utility big car
Embodied product – the styling, seating, colors, space, add on features, power
Augmented product – credit and financing schemes, delivery, service, guarantees, perceptions
How should Mahindra position the Scorpio?
Core Product
Embodied product
Augmented product
Product classification◦ Moving from a business to consumer product◦ Moving from rural to urban brand
Branding for the target audience: Male, Female, Young, Families◦ Male: Sportiness in showrooms, technology innovation, urban feel, SUV styling◦ Female: comfort, show women drivers in ads, up-styling, luxury, market it as a
car and not SUV◦ Young: Sportiness, technology innovation, urban, trendy◦ Families: Safety, cost effective, reliable, high customer service, comfort
seating, user friendly features beyond the driving seat
How should Mahindra position the Scorpio?
Using the target audience build a brand personality that addresses the five dimensions of psychosocial meaning:◦ Sincerity: down to earth◦ Excitement: spirited, imaginative◦ Competence: intelligent, successful◦ Sophistication: urban, upper class◦ Ruggedness: tough, solid, reliable
How should Mahindra position the Scorpio?
Brand Personality
Sincerity
Excitement
Competenc
e
Sophisticatio
n
Ruggedness
Thank you! Deepak Bhandari Hema Wagh Shreepad Bhogaonkar Vipin Om Sharma Vivek Chandra Kosha Desai Shashank Shyam Abhyankar