PROJECT SCORPIO
A tale of category creation cont...

First year of launch
8Scorpio to capture 22 per cent of the premium hard top market in F03 (9 months)
* Sell 12000 Scorpios in F03 (9 months)
*Mahindra unaided brand recall score to increase by 22 pts (defined in terms of Brand Track study scores)
* Scorpio brand recall score to achieve 50 points (in W4)

Within three years of launch
* Scorpio to capture 45 per cent of the premium hard top market
* Scorpio to sell 24,000 units in F04
* Mahindra to emerge as a true urban player

Market Context
The soft tops sales, which were Mahindra’s strength, were stagnating. Hard top vehicles like Sumo and Qualis were garnering market share. The urban market was showing more potential for vehicle sales and UVs were gaining higher acceptability in urban cities. The competition was getting tougher with international UVs entering the market. And also operating in the urban market meant competing with cars.
The market was moving from traditional multi utility, non-luxurious vehicles to luxurious vehicles. M&M had launched Bolero in 2000 to cater to this newly emerging segment. However, to add to the category’s woes, it declined at the rate of 3.1 percent in year 2001 over year 2000. UVs as a percentage of the overall passenger car market was just 16 per cent in 2001. This simply meant that for attaining the volumes, Scorpio needed to look beyond UVs in terms of competitive framework to decide on a marketing strategy.

Competitive Context
The conventional UV market was too small in size. The UV market in urban markets was even smaller a percentage. The trend was that the UVs operating in the urban market were eating into the car share, primarily the cars which operated in the same price bracket. Qualis was taking market away from midsize cars. With these facts in place the whole of automobile market was studied in details.
In the arena of cars, A-segment cars, which have been the leaders in terms of volumes and grew at the rate of 55.2 percent in the year 1999, were having a reduced growth rate of 34.2 percent in the year 2001. It was found that the fastest growing segment (growing at the rate of 42.9 per cent) in year 2001 was semi luxurious cars or B segment cars. And the luxurious car segment i.e. C segment cars were also growing at a healthy rate of 14.2 percent in that year. However, super premium cars termed as segment D and E cars, were not growing at such healthy rates and did not offer volume in terms of number of cars sold.
It was imperative for Scorpio to look beyond UVs. Apart from appealing to a typically UV buyer, it was also necessary to appeal to a wider target audience - prospective car buyers belonging to 5 lakh and 5 lakh+ segment. The midsize car market (C class) which was in the Rs. Five to Seven lakh price bracket had grown in F’00 at 36 per cent and in F’01 at 22 per cent, and small luxury car segment (B class) which was up to Five lakh segment was also showing a healthy growth.
Analysis showed that the volumes in the automobile industry were coming from B and C segment cars. This meant that the mid size car market was the competitive arena for Scorpio for it to attain the volume growth and market share it was looking for. It was decided that the offer had to appeal to segment C buyer and should be aspirational for segment B buyers. Therefore, an analysis of the offers of all the segment C cars and the relevant UVs was done. The table below summarises the analysis:
Interpretations: All the vehicle are feature packed within a price range of Rs. 6-8 Lakhs. All of them, including UVs, are with a proposition of luxury and comfort, with no differentiation.
Implication: With this analysis it came out clearly that the positioning of Scorpio has to be such that it should communicate that the vehicle is better than any of these cars and is a better buy in terms of money.

Consumer Context
Having defined the competitive framework, the next task undertaken was that of analyzing the consumer. Consumer segments of B and C category car buyers were analyzed in terms of their expectations from a car, their perceptions about cars and their relationship. Proprietary techniques of research, of the advertising agency Interface Communications, like Mind & Mood, ICON and VIP were used to understand this consumer. The findings were:
* Size matters- big size stands for status
* Consumers seek latest technology
* Imagery but at affordable prices
* The sheer thrill and passion of driving an SUV
* Power of the vehicle makes a statement
* But along with the others, luxury was a very important parameter
* International vehicles define imagery
Þ SUVs like Pajero, Land Cruiser and Prado are seen as urban vehicles for the rich and famous
Þ Consumers aspire to own these vehicles as the imagery of these vehicles has become very desirable
The Key Consumer Insight that emerged from all the consumer analysis and which was used for strategy development was “Consumers want to consume premium imagery at prices affordable to them”

Strategic Branding Approach - Identifying the need gap and occupying it
There existed a gap that wasn’t tapped. There was no SUV in the country that the masses could buy. To make SUVs a mass concept in India - UVs needed to be seen as comfortable, easy-for-city driving and should have imagery comparable to international brands.
Therefore, as a strategy it was decided that Scorpio would not take the traditional UV imagery of tough, off-roading and 4x4. A 4x4 approach would be a very niche category and would not generate numbers. To appeal to a car buyer, the Scorpio needed to be seen as a car that offers much more.
A Scorpio had to be seen as providing car-like driving pleasure and at the same time providing the edge over cars in space, power, style, fuel efficiency, luxury and comfort. In short, to provide status of a Pajero (international SUV) at the price of midsize car
The Scorpio product package offered - Superior technology, Dynamic Looks, Car-like product and great value for the price
Value Proposition for Scorpio:
To capture the identified need -gap, the value proposition of Scorpio was defined as -

‘Car plus’
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’
This brand positioning addresses the key consumer Insight and the product delivers the promise. The position is also a unique proposition, which will help the brand have a distinct image in the consumers’ mind.

Baseline - “Nothing Else Will do”
The baseline captures the essence of the brand, which is superiority and uncompromising attitude. It also summarises the spirit behind the making of the Scorpio.

Brand Strategy - Parent brand relationship
defining
A study of international brand names was done and a classification of brand names of midsize cars and SUVs was done into groups. International brand naming trends and strategies were analysed. New names were generated. These brand names were researched massively first by qualitative techniques and then by quantitative techniques.
The name that emerged as most popular, and which was also the most liked name internally at Mahindra was SCORPIO.

Brand Endorsement Strategy
The relation between Scorpio and the mother brand Mahindra was also deliberated upon. The strategy chosen for Brand Endorsement was - Scorpio from Mahindra - shadow endorsement, one which does not shout “Mahindra.”
The Mahindra brand image was not modern and young. There was a need to create a strong distinct modern brand. Hence Mahindra as a Masterbrand could not contribute towards enhancing the Value Proposition. Yet Mahindra had to provide source reassurance. Also the distribution would be through Mahindra dealerships. Hence it became a shadow endorser.

Advertising and Promotions Strategy
The creative strategy was to drive home the ‘Car Plus’ positioning forward. There was a need to leverage on product strengths. And a need to establish car plus story. Hence the product was to be the hero in all communications
The tone and manner was to help associate the brand with the modern and urban lifestyle. The TVCs as well as the press still-shots were shot in Australia to provide an international city feel. This brought in the international, premium, up-market association for the brand.

Media Strategy
Role of Media
*Dramatic and high impact launch
* High visibility
* Push brand image even by the media vehicle

Building impact through multiple-media
* PR, Mass Media, Direct Marketing, Events

Public Relations
Pre-launch excitement and buzz was created by a full blown PR program. Media coverage on the IDAM process, the people behind the Scorpio, the obsession, the world class technology, etc set the tone for the hyped up launch. PR was also the first tool used for launching the Scorpio. The coverage of the launch was massive. It got four cover stories

Mass Media
‘While the media targets would be achieved through the right selection of the media mix, the Scorpio media posture was to ensure that Scorpio was present on the decided media but ‘with a difference.’ Scorpio would use media innovations to create differentiation on the traditional media and do things in a ‘bigger and better’ manner.

Customer Relationship Management (CRM)
CRM as a tool was used to create positive word-of-mouth, to monitor customer experiences and generate referrals. A series of CRM activities were implemented with regular direct communication, events and customer research. The CRM plan included a welcome Pack on filling up Scorpio Club (Top Gear) form, satisfaction surveys, Events, Festive offers, Rewards Program, etc.

Pricing Strategy: to be a premium brand yet
having universal appeal
Scorpio was to compete with the midsize cars like Hyundai Accent, Ford Ikon, Opel Corsa, Maruti Suzuki Esteem on the one side and UVs like Toyota Qualis, Tata Safari and the Tata Sumo on the other. Scorpio adopted the penetrative pricing strategy positioned in the psychological price barrier of Rs. 5 -7 Lakhs.

Distribution Strategy - Serve less markets at a time but serve them well
Since the Scorpio was targetted at an urban clientele it needed a stronger ditribution presence in Metros and urban areas. Hence, the distribution channel had to focus on providing an appealing experience for modern car buyers and on offering international standards of auto retail.

Phased Launch
The Scorpio was launched in a phased manner - first in Metros Mumbai, Delhi, Bangalore, Chennai. Twenty cities were included over a period of 4 months and within a year 50 cities were covered. This ensured attention to main markets and to ensure that initial production of the vehicle could match demand. Dealerships were revamped prior to launch in a particular city.

Showroom Experience
The showroom revamp was centred around the intention to provide a uniform customer experience at all the touch points and to provide the customer with a unique “experience” and not just a “product”. Therefore the back office would remain outside the customer’s line of vision because the customer would be concerned with the product and not with the paperwork.

Infrastructure
Thirty-five showrooms across the country were redone entirely with the same look and identity and a décor built around movement, technology and sportiness. The theme focussed on giving the customer a memorable experience.

Response - The strategy delivered
Volumes and Market Shares: Scorpio achieved its targets on market share and achieved a volume of 12000 vehicles in the first 9 months of its launch.
Image: Scorpio advertising had a very high recall for the Mahindra brand (Exhibit 3) as well as for the product (Exhibit 4). Apart from this, advertising actually positioned Scorpio as a powerful vehicle with a sporty look, solidly built with good cargo capacity amongst the premium car consumers and sports utility vehicle consumers.
Overall response to the Scorpio was stupendous. The product was well received across the country and got rave reviews across media. More importantly the product and the strategy delivered in terms of the various objectives set before launch. Footfalls in the showrooms had been massive and demand had far exceeded supply of vehicles with a waiting period of three months.

Impact on Mahindra Image:
The saliency of Mahindra increased considerably. Mahindra enjoyed stronger recall as a manufacturer of personal vehicles and stronger customer perceptions on the following attributes -
*Well-respected manufactrers
*Technologically advanced
*Suitable for city driving
*Great to drive
*Makes VFM vehicles
*Proud to own
*Makes good quality vehicles

Scorpio Brand Recall
In the SUV/MUV segment, Scorpio has the second-largest awareness and has emerged as a strong brand in the C & sub-C car segment, however as compared to Qualis, it needed higher recall. Scorpio advertising had been able to create a good impression on appearance and styling of the vehicle.

Scorpio buyer profile
Scorpio managed to pull out customers from the C segment of vehicles. The product, communication and the retail experience of the Scorpio passed the stringent test of luxury car buyers and the buyer profile was exactly as per the target profile. The strategy delivered with more and more small and midsize car buyers choosing the Scorpio over the others.

Awards
The Scorpio was awarded various awards from various bodies
Mahindra achieved the objectives it set out to achieve. M&M has more than 39 per cent of market share in hard tops, sold 11800 Scorpio in first nine months of operation and due to this campaign, Mahindra image improved.

Scorpio Impact on M&M
Scorpio was launched on June 19, 2002. At that time Mahindra was losing market share and the share prices were also at an all time low at around Rs. 100. The Mahindra share of business was largely from the semi-urban and rural market of India and the markets where Mahindra was strong were stagnating.
With the launch of Scorpio, things started looking up for Mahindra. There was an improvement in the bottom line as well as the return to the shareholder. The revenue for M&M Auto Sector increased from Rs. 1827 Cr. in F 02 to Rs. 2511 Cr. in F 03, a growth of 37 per cent. The profits before Interest and Tax (PBIT) too zoomed up from Rs. 102 Cr. in F 02 to Rs. 147 Cr. in F 03, an increase of 43 per cent. In F04 the scenario has further improved. The half-yearly results show a growth of 54 per cent in revenue and 218 per cent increase in PBIT. The share prices have outperformed the Sensex and Share prices have zoomed from Rs. 100 to Rs. 400 by December ‘03.
As regards Mahindra image in the customers mind, the post launch study conducted gave the following improvements (Brand track Study - Nov 2002 - IMRB):
*The Mahindra saliency scores improved by 27 points among MUV/ SUV owners and by 29 points among all car-owners.
*The overall positive opinion about Mahindra also moved up by 18per cent among MUV/ SUV owners and by 11per cent among all car owners.
*Mahindra Scorpio has fared excellently in overall opinion as against its key competitors.

Future Directions - World class product goes global
Having done well in the domestic market, Mahindra and Mahindra is now moving forward on its path to become a global niche player. i.e, it is stretching its activities in foreign markets. The company is in the process of negotiating joint ventures in markets like Spain, Italy, South Africa, Indonesia, Russia, Equador for marketing of Scorpio.

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