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