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Mahindra War Room 2013

2Wheelers - Frontline Challenges

MAHINDRA 2WHEELER SECTOR FRONTLINE CHALLENGES IN A MARKET SLOWDOWN CASELET Mahindra 2 Wheelers Limited (MTWL) offers a range of Scooters and Bikes and is the rst Indian two-wheeler manufacturer to enter the Moto Grand Prix Championship. This caselet, titled Frontline Challenges in a Market Slowdown is one of the two optional caselets that can be chosen in this sector. BUSINESS BACKGROUND Mahindra entered the Two Wheeler industry in 2008 and launched a portfolio of PowerScooters to critical acclaim in September 2009. Within a year of launch, MTWL captured a double digit market share! of the domestic 2 wheeler market. In 2011, Mahindra became the rst Indian two-wheeler manufacturer to enter the Moto Grand Prix Championship, showcasing engineering and technology expertise on a platform where the best in the world compete. The racing DNA was continued further with recent launch of motorcycles such as Centuro and Pantero. Mahindra 2Wheelers aspire to launch one new model every quarter for the next 10 quarters, to keep pace with the fast growing Indian Two-wheeler market. India is the 2nd largest 2wheeler market in the world, and the domestic industry is volume driven. With several global players in the fray, the meat in the market lies in the commuter segment which is also the most competitive. The other 2 ends of the spectrum are relatively less developed, with product offerings widely dispersed on the price line. The market is expected to grow by 5-6% in FY14, as against ~10% in the previous year, with expected zero growth in bikes and a llip from scooters. OEMs are resorting to higher marketing spends and launching several new products and variants to entice the Indian consumer to spend on 2 wheelers. Several new subsegments and niches have emerged, with OEMs aiming to create niches to dominate and protect as a long-term hedge. Some key attributes of the Industry currently are:!Ineffective mass media plans; overreliance on high-cost, low-impact traditional media; Capacity glut due to massive expansion plans and low demand; Rising input costs, both in raw materials and logistics; Greater adverse impact on small players in difcult market environment; too many new launches that impede establishing of brand identities, and Rapid product development plans. In the current phase, all players have been caught off-guard, and aim to strike a balance between being conservative, yet innovative and aggressive to ride out the storm. It is expected that the survivors of this phase will emerge stronger with consumers being net gainers. FRONTLINE CHALLENGES IN A MARKET SLOWDOWN MTWL realized the need for agility, focusing of marketing approaches and maximization of front-line spend efciency. Considering the diversity across markets,
Broadvision Perspectives Client Condential Page 1 of 2

Mahindra War Room 2013

2Wheelers - Frontline Challenges

MTWL has carved out clusters that offer greater exibility in customizing go-to-market strategies across diverse domestic markets. A cluster is dened as a market area where about 15,000-20,000 two-wheelers sell every month. Each cluster is headed by a Cluster Business Manager (CBM), with a monthly budget and a team to manage dealers in the cluster. A CBM owns the P&L, Stocks & Inventory, Brand Presence and Dealer Health goals for a cluster, akin to a mini-organization. A group of clusters form a Zone, headed by a Zonal Business Manager (ZBM) with Zonal Marketing Managers (ZMMs) supporting the zone and CBMs in various marketing activities. With this backdrop, please provide develop the frontline strategy, considering the current market slowdown: 1.!Enhancing Marketing Effectiveness, Brand Building & Communication How should MTWL deliver clutter-breaking communication? Should MTWL invest in creating/developing multiple brands across categories or focus on umbrella branding strategy? With a plethora of traditional/mass media in use and their inability in the current situation to deliver value/disruptivity, what are the new or innovative media options that MTWL can adopt to reach out to the customers at an optimized cost? What is the approach MTWL should take to measure the efcacy of spends? Are there any Beat the market plans, both strategic and tactical, that MTWL should take up to create disruption and win customers? ! 2. Building Network capabilities Suggest innovative and unique ideas for building consideration in MTWL brand and increasing walk-ins. With network playing a key role in terms of reach, what should be MTWLs network strategy and way of Dealer engagement/relationship management? What is the best way for MTWL to reach out to its customers? Is there an asset light customer touch point model? ! 3. Delivering Consumer Experience How can MTWL deliver/enhance Consumer Experience, both in-store and beyond? In what ways can relationship management beyond the product experience be leveraged for Customer retention and word-of-mouth generation? How should Service experience be used in enhancing MTWLs overall value proposition? ! 4. Cluster Management How should the Return on investment approach be used to measure the protability of a cluster? How should the Cluster ecosystem (Dealers/Vendors/Consumers) be managed to ensure and deliver protability? What should be the extent of decentralization at the Cluster/Zone level to ensure accelerated decision making while safeguarding delivery of business objectives? Please ensure that the plans and strategies are contextualized to the foreseeable market dynamics, while being relevant to what is happening in the industry and the economy right now.
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