The Hindu Business Line : The Scorpio saga

Mahindra & Mahindra stunned the auto world when it launched its stylish SUV, the Scorpio. Today, it has caused a paradigm shift by bringing in crossover buyers from the `C' segment and driven the UV sector's growth.

A BRAND is a thought, and launching brands can be a great growth strategy for any corporate. But, it takes two to tango. A brand founded on a good idea needs to be built with an ever-evolving gameplan. A case in point is the launch of the sports utility vehicle (SUV), Scorpio, by Mahindra & Mahindra (M&M).

When Scorpio hit the streets, it arrived as an SUV with a `car plus' package. Two-and-a-half years later, it has caused a paradigm shift in its category. Equipped with a savvy marketing strategy, the brand has not only grown the SUV market, but almost touched base with the `C' class cars segment (Rs 5 lakh and upwards.)

According to automobile manufacturers' data, the premium utility vehicle segment grew at approximately 14 per cent up to June 2002.

With the launch of Scorpio, the growth rate from July 2002 to March 2003 rose to about 51 per cent. Between April 2003 and March 2004, the segment grew by 33 per cent.

"With its kind of price offering and positioning, Scorpio did attract a lot of cross-over customers. Unlike for its competitors in the UV category, people who wished to purchase a C class car would also consider a Scorpio," says Hormazd Sorabjee, Editor, Autocar India.

Cut to market expansion of premium utility vehicles against `C' class cars. Out of the total number of premium utility vehicles and `C' segment cars put together, premium UVs accounted for about 21 per cent during the year 2000. The figure touched 49 per cent this year.

"The Scorpio launch did play a significant role in driving the UV market up. This to me is the ultimate measure of success - the ability of a company to drive the growth of markets," remarks Abraham Koshy, Professor of Marketing, Indian Institute of Management, Ahmedabad.

Marketing gurus suggest that the positioning of Scorpio was also very bold and innovative.

The easiest temptation for M&M would have been to position Scorpio as a `better-looking SUV' or `a rugged, yet good-looking SUV' in sync with its tough vehicle pedigree. But this would have made Scorpio a prisoner of the category, and it would have had to compete with other players in the category. This also would have restricted the growth of the category by itself.

"The `car plus' approach is indeed very innovative and bold. Bold, because it goes against the existing frames of reference of customers and hence the need to create new frames of reference," elaborates Koshy.

The new frame of reference also had a distinct brand strategy associated with it. It all started in 1997, when M&M set up Project Scorpio in quest for new markets. As much was written about the project, the brand name Scorpio had built enough equity. Internal research showed that Scorpio featured in the top two suggested names. Since the name was reasonably accepted, the company plumped for `Scorpio from Mahindra'.

"Those were the years when there was instability in the automobile sector, especially after the Daewoo fallout . `Scorpio from Mahindra' was the shadow endorsement strategy used to endorse stability in these times," explains Rajesh Jejurikar, Executive Vice-President (Marketing & Sales), Automotive Sector, M&M Ltd.

Earlier, M&M did not have the right to use the name Scorpio as it was originally a Ford brand name for a sedan. The company, however, got approval from the latter to use the name, except in certain European markets.

The brand was launched in Italy as Mahindra Goa. This was also in line with the company's branding strategy to popularise the Mahindra name globally.

Unlike in India, Mahindra is not a known name internationally, and this was the company's conscious strategy to use the brand name Mahindra with the `Goa' badge.

As the brand started improving on its equity, the M&M shop floor was still burning midnight oil. This time around the project was to improve on the product.

Between July 2003 and January 2004, the brand was subjected to new product developments. Quieter engines were introduced after adopting the chain drive engine system. The seats were improved, and the new two-toned look was developed. Recently, Scorpio installed a Common Rail Diesel engine to meet the BS III auto emission norms

As the product development took off, a phased communication strategy was plotted for the brand . During the first phase, the need to deal with issues such as lifestyle imagery was identified by the Mumbai-based advertising agency Interface Communications.

As a result, the television commercials depicted the product and a pan-global imagery , even as the print advertisements focused on functional benefits. So one got to see copies like `Car you walk into, and not crawl into' across newspapers.

"In phase two, we did not change the television campaign, but our print creatives were centred on communicating new product developments," says Jejurikar.

The third phase of communication was released in July 2004 when the automotive giant focused on the `car plus' statement. What followed was a series of advertisements focusing on people and lifestyle rather than the product.

"All Scorpio advertisements show the vehicle in urban settings driven many times by women conveying the message of "ease of driving." Unlike competitors' advertising strategy, no imagery of off-road settings and `wilderness' or `break-free' connotations were depicted," says IIM's Koshy.

Other international majors are battle scarred in other markets. All of them have capabilities to compete with the best anywhere. But what Scorpio did was alert all of them that nothing but the best will do in the Indian market too. "Is it not interesting that the tag line of Scorpio TV ads says `nothing else will do'? Koshy asks.

The result was that the customer reacted. Since January, Scorpio has topped the charts of both customers and non-customers. While the TNS Automotive Customer Satisfaction voted Scorpio as the best SUV after Toyota Qualis, the Indicus Customer Study registered the perception of the brand among people at large.

According to Delhi-based Indicus Consumer Tracker, an independent brand-tracking firm, its study conducted in January this year revealed that 3.8 per cent of the 3,690 sample size recalled the Scorpio ad while 2.2 per cent recalled the brand, and 1.8 per cent switched to the brand.

The figures seem diminutive, but when extrapolated on to a larger universe of product categories, they tell a different story. In terms of total number of units sold in the passenger vehicles segment, SUV holds a very small mind share, and yet Mahindra Scorpio is the only SUV brand that garners both brand and ad recall across the sample size.

"Scorpio is among the only three main car sub-brands whose ad and brand recalls are higher than the master brands, Santro and Indica being the other two. It is also the only significantly recalled SUV. In fact, it is more recalled than almost all MUVs as well," says Sanjay Tiwari, Consultant Director, Indicus Consumer Tracker.

Secondly, on a canvas of sub-brands, the Scorpio SUV follows close on the heels of B class or small luxury class segment like the Hyundai Santro, and is ahead of Tata Indica, again a B segment car, he points out.

The track monitors `high value' consumers, and registers those who are in the SEC A and B categories, while 67 per cent of the sample size is from the top eight metros; the rest from the next 50-60 towns across India.

Sales too has been zooming, says the company. According to brand-wise data, the company claims to be matching sales of most C segment cars, even outselling some of them. In the last six months, M&M sold 14,389 Scorpios, against a total C segment sales of 79,346, according to company data.

M&M is also attempting innovative strategies on the digital turf, and is currently eyeing gaming as a means to promote the brand. So, the client-agency team is toying with the idea of game called `turbanator' for the mobile gaming fraternity.

Moreover, the pricing strategy of Scorpio was definitely penetrative, especially when it lured the C segment buyers, and caught the fancy of the B segment buyers. The ability of any company to play the price game is a function of cost competitiveness, explains IIM's Koshy.

In this specific case, lower price needs to be looked at as `invitation' price for the basic version while there are others who buy these kind of vehicles seeking a fully loaded version. The Mumbai ex-showroom prices vary from Rs 6.52 lakh to Rs 7.01 lakh.

"M&M is not betting on playing the price game in this market. I think that the company is certainly into the image game. Price therefore is more a tactical element and not a strategic vehicle," elaborates Koshy.

The market dynamics changed recently after Toyota decided to withdraw the Qualis, Scorpio's one-time challenger, and introduced Innova. However, the unwritten rule of innovation in sync with a correlative marketing strategy will remain the crux of sustainable growth.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
The Scorpio saga

Beauty's promise

Sharing for self-interest

The lure of the `fresh'

`The media business is too transactional'

The evergreen celebrity

Customers buy benefits, not products