Marketing

How the XUV500 stormed the market

| Updated on January 20, 2018

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The hybrid sports utility vehicle found a niche by enabling consumers to realise their aspiration for quality life experiences



Mahindra XUV used pricing as a key differentiator in the category of sports utility vehicles. In an interview with Vivek Nayer, CMO, automotive division, Mahindra and Mahindra, authors Anisha Motwani and Ranjan Malik get behind the wheels of the XUV to find how the brand gathered speed. Excerpts:



Some markets/segments have norms that haven’t changed for years, leading to almost commoditised offerings, ritualised operations and thin margins. What were such pre-existing norms in your category?

The Indian SUV market was still evolving in 2011 when the XUV500 was launched. There was no premium SUV at a price point suited to value-conscious Indian consumers who really aspired to upgrade but had to settle for a sedan. Mahindra saw an opportunity to introduce a global SUV placed between Mahindra’s own Scorpio priced at around ₹10 lakh and Toyota’s Fortuner priced in the above-₹20 lakh price bracket.





What was your breakthrough and what insight was it based on?

We wanted to offer an SUV with international appeal so we did research among consumers from five continents to arrive at a theme that led to the product development and design. The outcome of the study was ‘Feel the Power’, with connotations of ‘power’ ranging from sheer physical power to aggressive styling. Hence the first monocoque SUV from an Indian OEM was created with a cheetah-inspired design and offered the experience of a powerful SUV with a car-like handling.

The brand’s positioning strategy was based on the consumer insight that life’s experiences, and not materialistic abundance, was the new ‘wealth’ that increasingly defined an individual’s success in today’s world. The XUV500 was positioned as an enabler of memorable stories and life experiences by empowering one to go out anywhere to seek them. The sign-off line for the brand, ‘May your life be full of stories’, captured this aptly.





To become a true game-changer, the new concept must trigger a storm and for that, it must hit the critical mass at a certain pace. What did you do to hit the critical mass?

The XUV500 launch was unique in the way it reached critical mass very early in its launch cycle. The pre-launch and launch strategy created so much hype that the first ever print ad for it, released within 10 days of launch, said, “XUV500 is out, sold out! Thank you for the overwhelming response”. We called it ‘ Mudal Naal Madness’ which was meant to signify the craze on the first day of a Rajnikant movie in the South.

The audacious aim was to make the XUV500 the most anticipated brand and create a one-year booking pipeline even before its launch. And the strategy was to engage the consumer at every stage – the design, the logo, the price, the pre-launch and the launch itself.

In the pre-launch phase we adopted the strategy to reveal the product bit by bit and to create an anticipation of a price of at least ₹17-18 lakh for the XUV500 so when it was launched at an extremely competitive price of ₹10.8 lakh, it was simply irresistible and a delight price. The result - more than 5 lakh website visits before launch, 1.5 lakh webcast views of the launch event, more than 40,000 test-drive requests on Day 1 and finally advance bookings for more than 18 months. The critical mass was already reached.



Talk about the fresh, vibrant market you created for XUV500.

M&M created a distinct brand identity for XUV500 by retaining the Mahindra DNA of creating tough and rugged vehicles but at the same time, appealing to the urban, sophisticated consumers who did not consider Mahindra earlier or considered only sedans. It successfully sourced volumes from different categories of sedans and the high-end SUVs. It was the first time that the product was relevant and appealing to people who owned a ₹7-8 lakh sedan as well as the people who owned a premium vehicle priced above ₹15-20 lakh!

If we look at the numbers, the XUV500 created a category in itself. It sold more than double the sales of all the premium sedan brands put together in its price band. The sales of all premium sedans put together (with brands such as Altis, Cruze, Civic and Elantra) in a similar price range dropped by 29 per cent from 4,118 (October 2010 to September 2011) to 2,934 (October 2011 to September 2012) after the XUV500 launch (Figure 1). Further, the XUV500 dominated the HSUV segment with a 56 per cent market share in 2012-13 (Figure2).





What qualities, according to you, separate the ‘Market Stormers’ from the rest?

A strong understanding of the consumers and getting the right insight to fulfil the unmet needs of the relevant consumer is the first step. In the case of XUV500, both the product design and its positioning were rooted in extremely relevant consumer needs and insights. Once we got the pulse of the consumer, it was backed by a clear vision, audacious goal-setting and execution excellence.





How has the brand been able to sustain the excitement around it? How have you managed to stay relevant to the audiences even after four years of being in the market that has been flooded with new products every year?

We realised that two things would be very critical: The experience of owning the product and the brand’s ability to reinvent itself

High-end sales and service experience: To create a fitting high-end experience at dealerships, we deployed specialised manpower recruited from outside the auto industry, from categories such as hospitality and retail. These personnel were trained in technical and soft-selling skills and were enabled with technology aids such as tablets and kiosks for the first time in the auto industry. We call them ‘experience executives’, not salespersons.

Purple Club: In an industry-first initiative, XUV500 owners were assigned their very own personal relationship manager, their main point of contact. Some unique benefits include privileged access to lifestyle events such as the ‘Mahindra Great Escape’, invitations to popular auto-related shows, holidays to exotic locations by Mahindra Holidays, golf and photography workshops and a host of service- related benefits such as car spa and monsoon wash. Purple Club has redefined the way consumers look at the vehicle ownership experience.

Till 2015, four ‘Torque Day’ events had been conducted since launch at Budh International Circuit and Madras Motor Race Track, where the Purple Club owners had a once in a lifetime experience of driving their own XUV500s on a race track.

Pro-active upgrades: In this era of rapidly changing technology, consumer expectations are very dynamic. Unless the product can pro-actively match up to these changing needs, it is easy for it to lose its relevance over time. Through regular upgrades and improvements in the XUV500 and through several special editions, we made sure that the product met the expectations of the fast-evolving Indian consumer.

The latest such product development has been the launch of the New Age XUV500 in May 2015 and the automatic variant launched later in November.

Keeping the core cheetah DNA of the product intact, the New Age XUV500 comes with more aggressive and muscular front styling. The interiors have been changed to match new customer preferences. It now has several new and hi-tech features such as the electric sunroof, six-way power adjustable driver’s seat, push button start, keyless entry, logo projection lamps on the ORVMs, reverse camera and a new-age 7”-touchscreen infotainment system.

Most importantly, staying true to its core promise of being a brand that provides an international experience at disruptive prices, the features included in the New Age XUV500 are seldom found even in vehicles priced above ₹30 lakh on Indian roads.



How did you arrive at the storyline of the TV communication? How did it help the brand?

We wanted to create a communication that was clutter-breaking, conveyed the differentiated positioning of ‘May your life be full of stories’ and had world-class production values.

The first theme TVC helped establish the cheetah connect and the story helped us to create an aspirational appeal by showing premium and aspirational landscapes, flora and wildlife. The advertisement exhorts the young at heart to seek out memorable experiences. The XUV500 was seamlessly integrated to showcase its on-road and off-road capabilities.

The surprise element of two cheetahs emerging and one of them jumping on the bonnet of the car towards the end of the film leaves the viewers thinking of those incredible experiences that make for life’s memorable stories and thus ties in with the positioning of the brand.

The second one was produced and released with the launch of the New Age XUV500 in May 2015. It had to live up to the high benchmarks set by the first TVC shot in South Africa. Besides reinforcing the positioning, we also wanted to focus on the new and hi-tech features.

The story was again about a group of friends who lose a camera in Thailand. The TVC again brought alive the scenic and aspirational locales that are associated with the vehicle’s premium positioning.

Both the TVCs have helped enforce the differentiated and premium positioning in the minds of the consumer. Like the product, even the TVCs have won several awards such as best creative advertising by Prime Time 2016, Effies bronze (Auto) in 2015 and Gold award at PRCI 2014, to name a few.



Storm The Norm is a business book authored by Anisha Motwani with a unique innovation framework by Ranjan Malik. It contains case studies of brands that wrote or rewrote the norms of their respective industries. In a special series for cat.a.lyst, the authors will interview these brand custodians every fortnight.

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Published on May 12, 2016
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