NEWS NO.

1 PIAGGO CUTS PRICES

VESPA: A Brief History

The worlds most famous and best-selling scooter. Invented by Piaggio in 1946 as the world's first scooter 1960s : Piaggio entered India for the first time in a partnership with Bajaj Auto. 1971 : had to leave due to license problems. 1983 : re-entered in partnership with LML 1999 : Broke its partnership with LML. 2012 : Piaggio launched Vespa LX125 scooter in India, alone this time, with an exshowroom price tag of Rs 66,000. Initial capacity to manufacture 150,000 scooters annually. Piaggio aims to double output by same time next year. It is priced highly at 66000(Rs 20,000 dearer than rival automatic scooter brand) and wants to project itself as a premium lifestyle scooter. Tough competition from Suzuki, TVS, Bajaj, Hero MotoCorp and Honda Motors, etc. Piaggio will have a network of 50 dealers in India which will be spread across 35 cities

Brand value
The Vespa is an ageless brand that is now a symbol of a distinctive lifestyle in market after market around the world.

Since 1946,rose rapidly in popularity to become a loved and revered emblem of 'made in Italy' and 'a new, unique way of enjoying mobility'.
It has remained chic and stylish since 1946, fashionable in every age. Present in more than 100 countries with over 17 million units being sold since its inception. With its Indian foray, Piaggio intends to create an exclusive, premium segment for the brand.

With it retro yet contemporary magic,Vespa in India will meet the aspirational needs of the fashion, style and brand conscious individuals.

Positioning strategy
It is positioned as a timeless and ageless lifestyle product that leverages its rich heritage and unique values to appeal to the finer emotions of the consumer.

It has created a new luxury segment in the two wheeler space for consumers who want to be a breed apart.
It has positioned the scooter as a premium, stylish and iconic lifestyle product aimed at women, college students and the upwardly mobile. Besides the young and trendy, people in early 50s who had Vespa as an integral part of their lives in younger days are also demanding the product. Thus it focuses on an unchanged style articulated in the tagline 'Fashion Unchanged.

Fashion Icon- lifestyle, iconic, ageless product

and

Pricing & Distribution strategy

Originally priced at Rs 66,000 Reduced price to Rs 59,000 Stated reasons: 1.Better operational productivity in the plant and efficiency through systems 2.Increased localization Objectives of reducing price: 1.New price reflects its intent to share these benefits with potential consumers. 2. To ensure a top-quality image as well as increasing sales. Few sales of 25,000 units during the last calendar year in the Indian markets due to very high price. 3. To gain market share. To generate demand from buyers in interior towns apart from the big cities 4. To give stiff competition to other prominent scooter makers of the country, like Honda, Yamaha, Suzuki, TVS Motors and Hero MotoCorp.

Pricing strategy being followed:

1. Premium pricing :The price set is high to reflect the exclusiveness of the product. 2. Skimming price : Sets an initial high price and then slowly lowers the price to make the product available to a wider market. The objective is to skim profits of the market layer by layer Pricing methods being followed: 1.Psychological pricing : Base the price on factors such as signals of product quality, popular price points, brand value and what the consumers perceives to be fair. 2.Value based pricing: Base the price on effective value to the customer relative to alternative scooters.

Competition Strategy
While Honda is the clear leader with the Activa, the other players include TVS Motor, Hero MotoCorp, Suzuki and Mahindra. The latest entrant is Yamaha which has decided to prioritise scooters for the future. In this milieu, Piaggio has made it clear that it will only focus on the premium end in gearless scooters to be able to carve a niche for itself with virtually no competition. With reduction in prices,Piaggio now gives stiff competition to its competitors. Intense TV campaigns ,advertisements and promotions . Buoyed by the good response for its Vespa brand in India, Italian two-wheeler maker Piaggio is planning to launch a mass market scooter by the end of 2013

STRENGTH Rich history and brand value. Fashion Icon- lifestyle, iconic, timeless and ageless product

WEAKNESS Higher price than the competitors. Vespa misses several features like front disc brakes and tubeless tyres, which are somehow present in its fellow counterparts.

A 125 cc engine, which has the potential to churn out a maximum power of around 10 bhp with a highest torque of 10 Nm.
It can smoothly accelerate from 0-60 kmph in just 10 seconds, following a top speed of 90 kmph. With a brilliant engine configuration, the scooter also offers a decent fuel economy of around 40 to 42 kmpl in normal driving conditions.

Sources
http://www.rushlane.com/piaggio-vespa-scooterprice-features-specs-photos-plant-inaugaration-pawar1233483.html/comment-page-1 http://www.vespaindia.com/pdf/media/Docpdf13.pdf http://www.vespaindia.com/pdf/media/Docpdf12.pdf http://timesofindia.indiatimes.com/business/indiabusiness/Piaggio-brings-back-iconicVespa/articleshow/12886666.cms http://articles.economictimes.indiatimes.com/201208-06/news/33065363_1_vespa-brand-indian-marketpiaggio-group