Abstract: The case examines the marketing strategies adopted by Mahindra & Mahindra (M&M), leading Indian automobile manufacturer, for its newly launched sports utility vehicle 'Scorpio' in the early 21st century. It traces M&M's evolution from being just another Mahindra Group company into a major Indian business conglomerate (multi-industry company). The reasons for the decision to develop the Scorpio are explained and details on the efforts that went into the creation of the vehicle are provided. Thereafter, the case discusses the marketing strategies (positioning, advertising, pricing and promotion) adopted by M for Scorpio.The case not only examines M's strategies for popularizing Scorpio, it also explores the increasing competition in the Indian SUV market.
Situation Analysis: Understand how changing market dynamics can force an industry leader to restructure its strategies (in terms of modifying the product mix and entering new segments) Background Notes: Mahindra & Mahindra Ltd. (M&M) is the flagship company of the Mahindra Group, a diversified business group with interests in key sectors of the Indian economy. M&M was set up in 1945 to make general-purpose utility vehicles.The company soon expanded its operations to include tractors and light commercial vehicles (LCVs) in its product profile.
Over the decades, M&M diversified into other businesses with the help of alliances and joint ventures with Indian as well as foreign companies and secured a significant presence in many major business sectors in India and abroad. By the 1990s, M&M emerged as a respected business conglomerate, catering to Indian and overseas markets, with a presence in many sectors such as automobiles, farm equipment, trade and finance related services, information technology and infrastructure development.In 1994, the group restructured its operations as part of a Business Process Re-engineering program. After the restructuring, the core activities of Multi-Utility Vehicles (MUVs), LCVs and agricultural tractors remained with M&M, while the other activities (Hospitality, Trade and Financial Services, Automotive Components, Information Technology, Telecom) were spun off into separate entities and were organized under different business groups...
Project Scorpio:For 'Project Scorpio,' M&M decided to implement a new product development technique called Integrated Development & Manufacture (IDAM). Reportedly, IDAM was expected to enable M&M to develop an SUV with the most contemporary design and technology. The Marketing Strategies M&M defined two pronged strategy for the Automotive Secotr- -Continue to dominate the rural and semi-urban market with a range of product for low cost, mass transportation. -Develop a strong presence in the fast growing urban markets with range of products.
Positioning and Advertising Scorpio was positioned as a UV with great power and style that offered "the ultimate driving experience, driving thrill, luxury and comforts of a passenger car along with value for money. " It targeted individual car buyers in the top-end small car segment and mid-size car segment, who already owned cars and were ready to invest in another vehicle. Launching the Scorpio In late June 2002, Scorpio was launched in all the major Indian cities and within a year 50 cities were covered.Scorpio was targeted both at the rural and urban markets.
The Competition Heats Up M&M's market share in the UV segment increased to 54% by June 2003 from below 50% in June 2002, on account of the Scorpio. Alarmed at Scorpio's growing popularity, other players in the UV market began devising strategies to improve the standing of their products. In July 2002, Toyota announced plans to offer a new 'Qualis' variant at a price lower than the existing Qualis. Analysts felt that this move could trigger a price war in the segment.