Assignment Session 3 Varun Jain 1301 431 Section A Group 8

Case Analysis Scorpio: Developing Brand Identity

In 2002, Mahindra and Mahindra (M&M) was one of the largest industrial houses in India with a turnover of INR 55 billion (US$ 1.38 billion). The groups automotive business, the flagship of the company, was in the business of manufacturing and marketing utility and light commercial vehicles, and was a market leader in the utility-vehicles segment. The company carried out a rationalization of its product and brand portfolio and had redesigned and re-branded some of its models for the urban market. Simultaneously, it had launched new models targeted at the rural rich to strengthen its hold on the traditional rural markets. As M&M was planning to launch a new sports utility vehicle(SUV), it had to look at market realities and some important trends. The utility-vehicle market in India was only about 16 per cent of the passenger-car market. Moreover the passenger car segment, where M&M did not have a presence, was growing almost twice as fast as the utility-vehicle segment. Rural markets, the traditional stronghold of M&M, were stagnating, and the company did not have a significant presence in the fast-evolving urban markets. Another noticeable trend being observed was the poaching of the car market in a similar price band by the new generation of utility vehicles. Given the fact that M&M had invested considerable resources in the development of the vehicle, the company needed to generate substantial volumes and garner a significant market share for the new vehicle. This implied that the new SUV had to search for opportunities beyond the market for utility vehicles. In order to participate in the growing urban market, the company, based on an intensive market-research exercise, identified customer requirements and designed a new vehicle following a well-defined new product-development process. This process involved customers as well as suppliers in all major stages. The vehicle finally developed with the aesthetic appearance of an SUV, followed an endorsement-branding strategy and was called Scorpio from Mahindra. An important issue that the company had to address before the launch of the vehicle was on the positioning strategy. Based on market research studies, M&M figured that there was a hidden and unmet taste for style, power and ruggedness that was not being met by any of the offerings. After an evaluation of options it felt an opportunity to create a new point of reference in the UV with car plus experience. By making a clean break with the ruggedness perception, it was able to break the mould of the parent Mahindra which was

more associated with a transportation and rural vehicle. Because an entirely new frame of reference was being created, this brand penetrated long term memory.

To arrive at a positioning strategy Mahindra & Mahindra generated a number of possible positioning alternatives. These included alternatives such as, a vehicle that could cruise on any type of road, a vehicle designed by the worlds top designers, the most powerful vehicle on Indian roads, and a rare combination of luxury and brute force. In order to get customer inputs at this stage, the company held a static and drive clinic in one city. Respondents belonging to the defined target segment were invited to inspect and drive the vehicle. The purpose was to obtain customer evaluation of the vehicle and to obtain their reactions as an input for arriving at a positioning decision. In the static evaluation phase, the respondents gave superior ratings for exterior fit and finish, exterior appearance, interior styling and comfort, and overall interior fit and finish. The vehicle was also perceived as sturdy. In the drive evaluation phase, the vehicle scored well on power and pick up, overall quietness of the vehicle, ease of gear shifting, and overall drive quality. Respondents also perceived the vehicle as sturdy and strong, but not very rough or rugged, good looking, stylish, having a good finish, luxurious, and comfortable. Regarding the question whether this vehicle could be a car, some of the respondents reacted negatively by saying that this vehicle did not look like a car, although it could be a car. Based on these inputs, the company finally decided to position the new vehicle on the platform of Luxury of a car. Thrill of a SUV - a Car Plus positioning.

Since the communication strategy also had to be in line with the brand positioning, the visuals in the advertisements avoided any suggestions about off-road usage and presented the vehicle in urban settings. The TV commercials depicted a woman driving the vehicle, to provide the image that on functional and comfort dimensions the vehicle was easy to use and suited for everyone. The print ads, while highlighting the functional benefits avoided the SUV word and repeatedly used the word car to reinforce the hybrid positioning. M&M also redesigned its retailing and service network to reflect the ethos of the Scorpio brand and to give the stores a more upmarket experience. In 2003, Scorpio was rated as the most successful new brand launch in India and became one of the largest selling SUVs in India. Segmentation - Since the conventional UV market was not significant in India, it was a necessity for Scorpio to look beyond UVs. Market research showed that the volumes in the automobile industry were coming from midsize car market (C class) and small luxury car segment (B class) segments. Targeting - M&M strategized to target a wider target audience, beyond UV customers - C class and B class, but would cut across rural and urban customers. It wanted to avoid the taxi trap that Indica and Qualis had fallen to it and did not offer colour of white. Targeting was for those who wanted a lifestyle product that assured style, performance and ruggedness. The ruggedness appeal came from the parent brand itself. Class was more of the growing upper middle class.

Positioning M&M built an innovative positioning around the theme of an SUV with a `car plus' package. The positioning communicated that the vehicle was better than competition in terms of any of these cars and is a better buy in terms of money. The commercials intentionally used foreign models to give an international look and feel to the product, there was a deliberate emphasis on the aspirational and world-class orientation of the Scorpio. It adopted a bold car plus approach that because it was a totally new frame of reference that was being created. The primary focus was on the lifestyle a carefree, successful and bold attitude depicted by cruising on international highways. Mahindra purposely wanted to breakway from its brand of ruggedness. The nothing else will do was another play on the excellence that was attempting to be pushed. Advertising was strongly reinforced with below the line marketing sponsoring events and strong test drive marketing.

M&M had a number of possible positioning strategies for Scorpio. The choice had to be based on whether the positioning strategy appealed to a large enough segment to support the volumes; whether the positioning strategy was supported by the attributes of the offering; and the cost of implementing the positioning strategy. The offering of the company (Scorpio) had a number of attributes such as its powerful engine, ruggedness and design, which could support the various positioning strategies as discussed in the case. However, the positioning as an SUV would have constrained the market size. The company, based on its market research, had identified a need in the market for the dual benefits of comfort and luxury of a car as well as the ruggedness and thrill of an SUV. Also, this segment was big enough to generate the volumes required to justify the investment in the development of the new vehicle and to get the desired return. Finally, the hybrid positioning was considered to be feasible, communicable, and sustainable with an acceptable cost. Scorpio was positioned as Luxury of a car. Thrill of an SUV, a strategy through which the vehicle tried to acquire membership in two different categories. This strategy had a number of advantages. M&M was able to extend its reach beyond the SUV segment to the car segment, and it was able to get itself included in the consideration set of customers looking for a car as well as an SUV. It was able to target the customers looking for the mixed benefits of, the thrill and ruggedness of an SUV and the comfort, luxury, and easy handling of a car effectively. Finally, by adopting a straddle positioning, Scorpio was able to differentiate itself from other competitors by acquiring a distinct point-of-difference. The disadvantage of such a positioning strategy is that it might leave customers confused as to the actual category membership of Scorpio and might deter some segment of customers. Customers, who are looking for pure benefits of either an SUV or a car, might also not include Scorpio in their consideration set. However, M&M was able to minimize the harm, by effectively establishing points-of-parity with the two categories of car and SUV.

Target Audience: o Male o Female o Young Thrill of an SUV Sportiness and technological touch Advertisement showing woman driving the car Comfort dimensions appropriate for all Luxury of a car imaged it as luxurious automobile Thrill of an SUV as a feel Sportiness look given to showrooms Technology as a design theme Urban touch

o Families Building customer relationship Safety and Reliability as entrusted by brand Mahindra More spacious and comfortable

Choosing brand elements They named their product Scorpio after evaluating the feedback of the consumer through consumer research. It was finally named Scorpio from Mahindra which meant prominence and assurance of reliability. Brand Positioning Positioned there car as Car plus and not as an SUV. This means they presented consumer with a car having more space, more comfort and more mileage.

Rational benefits: World class vehicle, good looks, car like comfort, great value Emotional benefits: Ownership experience of thrill, excitement and power Relational benefits: Young modern, premium, city companion / extension of lifestyle.

Brand Promise: Luxury of a car. Thrill of an SUV Baseline - Nothing Else Will do The baseline captures the essence of the brand, which is superiority and uncompromising attitude.

Designing Holistic Marketing Activities Redesigning of retail showrooms to connect with the urban consumers. Brand Endorsement strategy was - Scorpio from Mahindra - shadow endorsement, one which does not shout Mahindra. The TVCs as well as the press still-shots were shot in Australia to provide an international city feel. Media Strategy - Dramatic and high impact launch, High visibility and Push brand image even by the media vehicle TV as medium to communicate emotional benefits and provide international imagery. Print media used to communicate functional benefits related to emotional claims. Launched ads on August 15th to give positive rub of patriotism and have maximum audience coverage. Cavalcades of 3 Scorpios with bikers used in Mumbai to increase product visibility. Tied up with different lifestyle retail shops.

Brand communities Top gear club formed by the company. People were asked to fill the form at the time of purchase to be the member of the club. Tied up with KC Mahindra trust which increased response rate to 75%. Two telephonic calls made in the first 30 days of purchase After two months, vehicle satisfaction and service satisfaction surveys were conducted. Greeting cards sent on the day of special occasion

Future Initiatives to be taken

To make linkages with other Mahindra ventures like Club Mahindra, to get customer data and promote their brand. This customer data will help in developing relations with future customers and also to advertise the Scorpio brand among them. Make new technological innovations and advancements in the present car. Like Mahindra collaborated with Vodafone to bring innovative changes in Reva. The new technological features implemented mobile use where customer can know about the status of battery charge left through there mobiles. As more market competition is increasing and new players like Volkswagen are coming from outside in India, this will affect the market share of the company. So they should also look for export opportunities. China is a great market for automobile. China recorded the highest growth rate in the world. It grew by 11% in August 2013.

Learnings from Class

Brand Identity Prism Bolero

Indian Macho

Personality

Off Roader Rugged Sturdy

Physique

Culture

Modern Energetic

Bolero
Outdoor Jeep Look and Feel Enjoy Life
Relationship Self Image

User Image

City Dweller Youthful

Brand Identity Prism - Scorpio

Technologically Advanced Sophisticated Powerful

Personality

Luxurious International Looks Car Like Comfort

Living life on ones own terms

Physique Culture

Scorpio
Extension of users lifestyle
Relationship Self Image

Car Plus

User Image

Sporty Value for Money

Know the difference between a product and a commodity Is it a Line extension or a brand extension Valuation of a Brand o S.P. of Commodity = X S.P. with Brand = X + Y Value of Brand = [(X + Y) X] * Total Forecasted Sales

New Product requires a new Sales Force Bajaj ProBike Concept To maintain the brand Scorpio, launch another model in 2014 Always look at the different product offerings of the company you are analyzing Download images of products and visit their website. Makes it easier to analyze