REVA THE CAR OF THE FUTURE MM Project

C Niranjan (PGP13/064A) Anuradha Tadepalli (PGP13/074) Gavli Abhijeet P (PGP13/084) Rohit Kawatra (PGP13/104) Sumit Solanki (PGP13/114) Ventaka Prasad V (PGP13/124)

Reva The Car of the Future

TABLE OF CONTENTS
EXECUTIVE SUMMARY ________________________________________________________________ 5 BRIEF HISTORY _________________________________________________________________ 5 CURRENT STATUS________________________________________________________________ 5 PLAN OF ACTION ________________________________________________________________ 5 BRAND CHOICE RATIONALE ____________________________________________________________ 6 MARKETING SURVEY _________________________________________________________________ 7 AGE GROUP____________________________________________________________ 7 GENDER_______________________________________________________________ 7 PREVIOUSLY/CURRENTLY OWNED CAR ______________________________________ 7 IMPORTANCE OF POWER DRIVE ___________________________________________ 8 IMPORTANCE OF FUEL EFFICIENCY _________________________________________ 8 IMPORTANCE OF MAINTENANCE COSTS _____________________________________ 8 IMPORTANCE OF REPUTATION OF BRAND ___________________________________ 8 IMPORTANCE OF PRICE __________________________________________________ 9 IMPORTANCE OF SIZE OF CAR _____________________________________________ 9 IMPORTANCE OF LOOKS AND COMFORT ____________________________________ 9 IMPORTANCE OF EASE OF SERVICE _________________________________________ 9 IMPORTANCE OF ADDITIONAL SERVICES LIKE INSURANCE______________________ 10 IMPORTANCE OF ENVIRONMENT FRIENDLINESS OF CAR _______________________ 10 TIME PERIOD FOR BUYING A NEW CAR _____________________________________ 10 PRICE RANGE OF CAR DESIRED ____________________________________________ 10 REQUIREMENT OF A CAR AS A SECOND VEHICLE INSTEAD OF A 2 WHEELER ________ 11 GENERAL AWARENESS ABOUT REVA _______________________________________ 11

Reva The Car of the Future

SOURCES OF INFORMATION OF REVA ______________________________________ 11 PREFERENCE OF REVA GIVEN THAT IT HAS 10 TIME THE FUEL EFFICIENCY __________ 11 SITUATION ANALYSIS ________________________________________________________________ 12 5CS ________________________________________________________________________ 12 COMPANY _____________________________________________________________ 12 PRODUCT ______________________________________________________________ 12 CUSTOMER ____________________________________________________________ 13 COLLABORATOR _________________________________________________________ 13 COMPETITION___________________________________________________________ 13 CONTEXT ______________________________________________________________ 14 SWOT ANALYSIS _____________________________________________________________ 16 STRENGTHS ____________________________________________________________ 16 WEAKNESSES ___________________________________________________________ 16 OPPORTUNITIES _________________________________________________________ 17 THREATS ______________________________________________________________ 17 PORTERS 5 FORCES ___________________________________________________________ 17 THREAT OF NEW ENTRANTS - LOW ____________________________________________ 17 BARGAINING POWER OF BUYERS - HIGH ________________________________________ 17 BARGAINING POWER OF SUPPLIERS -LOW _______________________________________ 17 CURRENT RIVALS IN THE CATEGORY -HIGH ______________________________________ 18 PRESSURE DUE TO SUBSTITUTES - HIGH_________________________________________ 18 MARKETING OBJECTIVES _____________________________________________________________ 18 INCREASING SALES ______________________________________________________________ 18 CREATE BRAND AWARENESS _______________________________________________________ 18

Reva The Car of the Future

MARKETING STRATEGIES _____________________________________________________________ 18 SEGMENTATION SCHEME _________________________________________________________ 18 SEGMENTATION PROFILES _________________________________________________________ 19 TARGET SEGMENT ______________________________________________________________ 20 POSITIONING __________________________________________________________________ 20 MARKETING ACTION PROGRAMS ______________________________________________________ 21 PRODUCT ____________________________________________________________________ 21 PRICE _______________________________________________________________________ 21 PLACE_______________________________________________________________________ 22 PROMOTION __________________________________________________________________ 22 PR __________________________________________________________________ 22 MASS MEDIA ___________________________________________________________ 22 ADVERTISING ___________________________________________________________ 22 PERSONAL SELLING (PUSH STRATEGY) __________________________________________ 23 DIRECT MARKETING _______________________________________________________ 23 IMPLEMENTATION __________________________________________________________________ 23 BUDGET _____________________________________________________________________ 23 ACTIVITY SCHEDULE _____________________________________________________________ 23 FINANCIAL PROJECTIONS _____________________________________________________________ 24 TABLE OF AUTHORITIES ______________________________________________________________ 25 TABLE OF FIGURES __________________________________________________________________ 25

Reva The Car of the Future

EXECUTIVE SUMMARY
BRIEF HISTORY
REVA Electric Car Company Private Ltd. (RECC), based in Bangalore, India, was established in 1994 as a joint venture between the Maini Group India and AEV LLC, California USA, to manufacture environmentfriendly and cost-effective electric vehicles (EVs). Seven years of R&D earned the RECC recognition in the form of 10 patents and a globally accepted product. REVA, India's first zero polluting Electric Vehicle for city mobility, was commercialized in June 2001.

CURRENT STATUS
REVA is currently being sold primarily in Bangalore, the city where it is manufactured. It has sales points in other major cities like Bombay, Ahmedabad, Hyderabad, Delhi, Pune, Kolkata, Goa and Agra. It is also sold in 9 other countries which include United Kingdom, Italy, Malta, Cyprus, Norway, Spain Ireland, Japan, Srilanka, and being test marketed in Australia, Switzerland, Germany, and Austria, Nepal The company currently uses direct word of mouth publicity to gain customer base. It doesnt advertise on TV or other media. The sources of information for the customer Most of the sales come from referrals from previous customers. For most of the customers this is the second car and 50 per cent of the customers are women. The car is being predominantly sold in Bangalore.

PLAN OF ACTION
We intend to create a complete and comprehensive marketing strategy for the product REVA. We understand that different customers have different perceptions about the product because of lack of product positioning done by the company. We want to market a new concept like REVA in the Indian market by first identifying target markets not only in one or two cities like in the current case but across the whole of India and then positioning the product accordingly to maximize sales in all cities. In this marketing strategy, we shall also take into account the customer inertia that the car will face, not only because it is the first of its kind but also because it would be difficult to get people to change their style of driving from petrol cars to electric cars.

Reva The Car of the Future

BRAND CHOICE RATIONALE

We chose this product because we think that REVA is a concept for the future. It has the advantage of being environment friendly, something that will appeal to the customer. Because of spiraling fuel prices and the fact that REVA will provide road travel at 40 paise per km, this car will appeal to customers even more, if marketed properly. Moreover, with an increased realization in the automobile industry about the non-renewability of petrol as a resource, the focus will now be on vehicles that run either on electricity or on other fuels such as hydrogen. This gives REVA a head start in the paradigm shift towards development and deployment of such kinds of vehicles. But the sale of this product is currently restricted only to a limited segment of people. Hence the company is not doing as well as it would want to in terms of sales. We chose this product because the company does not market its product using any other medium other than word-of-mouth and its website. Hence we intend to come up with an effective marketing strategy for the product from scratch.

Reva The Car of the Future

MARKETING SURVEY
We conducted a market survey among urban people who are a part of the current target clientele. The questions asked and the resulting answers are given below graphically.

AGE GROUP

FIGURE 1: AGE GROUP OF SURVEY RESPONDENTS

GENDER

FIGURE 2: GENDER DISTRIBUTION OF SURVEY RESPONDENTS

PREVIOUSLY/CURRENTLY OWNED CAR

FIGURE 3: PREVIOUSLY OWNED CARS

Reva The Car of the Future

IMPORTANCE OF POWER DRIVE

FIGURE 4: IMPORTANCE OF POWER DRIVE

IMPORTANCE OF FUEL EFFICIENCY

FIGURE 5: IMPORTANCE OF FUEL EFFICIENCY

IMPORTANCE OF MAINTENANCE COSTS

FIGURE 6: IMPORTANCE OF MAINTENANCE COSTS

IMPORTANCE OF REPUTATION OF BRAND

FIGURE 7: IMPORTANCE OF REPUTATION OF BRAND

Reva The Car of the Future

IMPORTANCE OF PRICE

FIGURE 8: IMPORTANCE OF PRICE

IMPORTANCE OF SIZE OF CAR

FIGURE 9: IMPORTANCE OF SIZE OF CAR

IMPORTANCE OF LOOKS AND COMFORT

FIGURE 10: IMPORTANCE OF LOOKS AND COMFORT

IMPORTANCE OF EASE OF SERVICE

FIGURE 11: IMPORTANCE OF EASE OF SERVICE

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Reva The Car of the Future

IMPORTANCE OF ADDITIONAL SERVICES LIKE INSURANCE

FIGURE 12: IMPORTANCE OF ADDITIONAL SERVICES

IMPORTANCE OF ENVIRONMENT FRIENDLINESS OF CAR

FIGURE 13: IMPORTANCE OF ENVIRONMENT FRIENDLINESS

TIME PERIOD FOR BUYING A NEW CAR

FIGURE 14: TIME PERIOD FOR BUYING A NEW CAR

PRICE RANGE OF CAR DESIRED

FIGURE 15: PRICE RANGE OF CAR DESIRED

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REQUIREMENT OF A CAR AS A SECOND VEHICLE INSTEAD OF A 2 WHEELER

FIGURE 16: REQUIREMENT OF A CAR AS A SECOND VEHICLE

GENERAL AWARENESS ABOUT REVA

FIGURE 17: GENERAL AWARENESS ABOUT REVA

SOURCES OF INFORMATION OF REVA

FIGURE 18: SOURCES OF INFORMATION OF REVA

PREFERENCE OF REVA GIVEN THAT IT HAS 10 TIME THE FUEL EFFICIENCY

FIGURE 19: PREFERENCE OF REVA GIVEN THAT IT HAS 10 TIMES EFFICIENCY

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SITUATION ANALYSIS
For situation analysis, we decided to do with 5Cs, SWOT and Porters 5 forces analyses to provide a holistic view of the entire situation and encompass internal and external forces at work.

5CS
COMPANY
Some basic facts about the company include: Incorporated in 1994 as Reva Electric Car Company (RECC) RECC is a joint venture between Maini Group, Bangalore, India and AEV LLC, California, USA Based on the principle of energy conservation and environment friendliness, the company was built to produce Indias first zero pollutant car that ran on electricity for urban transportation First Reva released on 11th May 2001 The Company received ISO certification in August 2002 The company has a policy of launching a new model every year with technological advancements and allocates about 30-50% of its funds for the same Funds from private funds and venture capitalists Projected sales of 3,000-4,000 cars by 2010 and 10,000 by 2011 New plant being built to produce 30,000 cars

PRODUCT
Maximum speed of 80 kmph with a battery life of 80 km. 6 hours to charge 100% and 2.5 hours for 80% charge USP of being eco-friendly and possesses fuel saving characteristics. Capacity of carrying 2 adults and 2 children Low turning radius and size Cost of 2.49 lakhs initially and now 3.3 lakhs Additional safety and strength features incorporated following past complaints. Dent proof body material used to prevent damage during accidents. High visibility from within the car due to small bonnet and high seat

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Low maintenance cost of Rs 700 for every 6 months Better suited for city driving with ease of maneuvering and parking and small size 20-25% growth since 2001 in sales

CUSTOMER
Customer is well informed. As there are no advertisements in TV or other mass media, the information is spread through word of mouth or news in the media 50% current customers are women in urban centers Customers from all age segments present Adopted by elderly due to ease of driving due to lack of clutch and gears. Used as a second vehicle for daily activities by many

COLLABORATOR
Suppliers are ready for small batch production schedules Showrooms in 6 cities across the country run by the company itself Research and development is also internal Direct contact with customers of the company eliminating middle men

COMPETITION
The REVA was priced at a moderate Rs 2,49,000 earlier and now Rs 3,30,000 The expense of fuel comes out to about Rs. 0.40 per km The company faces no direct competition in this segment apart from the probable entry in the segment by big companies like TATA, Renault-Nissan, GM and even BMW within a period of 10 years. Indirect competition involves 2-wheelers also Faces competition from Maruti 800 because it is priced in the same range and has been attributed as common peoples car for quite a long time. Similarly, other cars like Hyndai Santro and Tata Indica are also priced in the same range. New competition from TATA NANO which is the cheapest car till date priced at a mere Rs 1,00,000. NANO provides space for 4 adults even up to 5 while REVA provides space for 2 adults and 2 children at such a low price.

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CONTEXT
REVA was launched in the year 2001, the petrol prices in that year and in present year 2009 alongwith the cost per kilometer is as follows:
TABLE 1: COST OF PETROL PER LITER IN CONVENTIONAL CARS

YEAR Petrol Price (Rs. Per liter) Fuel Efficiency of Average Small Car (km/liter) Cost per kilometer (Rs.)

2001 30.00 14 2.14

2009 49.00 14 3.50

Considering the above data, the cost per kilometer of the car is increasing by 13.6% per year which is very high There is an increasing awareness among people pertaining to global warming. Also savings due to Reva are significant given that people can recover the entire cost of the car within a period of 5 years as shown below. V ALUE PROPOSITION FOR CORPORATES
Revas contribution to the company bottom line is not limited to its ridiculously low cost of operation and maintenance alone. Under the Income Tax Act, the REVA qualifies for 80% depreciation on a Written Down Value (WDV) basis, as compared to 20% for other cars. This means an unbelievable excess tax saving of over 21% of the cost of the car in the first year itself. In cash flow terms this means that the Reva makes the most car sense. Just take a look at what Reva saves you vis--vis a competing product in the first year itself.
TABLE 2: SAVINGS PER MONTH DUE TO REVA USAGE FOR CORPORATES

Cost saving per month In Rs. ITEMS

Average On Road Price (Rs) Depreciation allowed in Yr 1 Tax Benefit Tax savings (Rs) Fuel (Petrol) cost (Rs/Litre)

REVA
400000 320000 108800 88400

CONVENTIONAL CAR
400000 60000 20400

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Reva The Car of the Future

Electricity cost (Rs/Unit) Total operating Cost/month Total operating Cost/annum Cost Savings for REVA Fuel savings on REVA (Rs) Total Savings (Rs)

3.6 607.5 7290 67278 71925 160325 6214 74568

*Assuming that a person travels 1500 kms a month, the average fuel economy achieved in city driving condition 14km/lts *Average maintenance V ALUE P ROPOSITION TO THE CUSTOMER Price of the Reva i, standard car: 3.3 lacs. The average cost of coverage per kilometre for the Reva: 40 paisa = Rs 0.4 Through our survey we found out that the weighted average of the number of kilometres that an average respondent travels daily: 30 km The average of fuel economy of cars in Revas price range (for example Hyundai Santro, Maruti Zen, Maruti Suzuki WagonR) is: 12-13 km per litre of petrol. But for the purposes of city driving, which is stop and go in nature with long halts, the average drops to 10 km per litre. We shall take an average of 11 km per litre on a conservative estimate. Minimum saving of over a 1 year period with REVA = Rs. 40,843 Minimum saving of over a 3 year period with REVA = Rs. 1,22,530 Minimum saving of over a 5 year period with REVA = Rs. 2,04,215 The depreciation costs same in both types of cars and hence we shall not factor them in. This shows that this car will actually recover 2,04,215/3,31,000 = 62% of its costs in 5 years of operation in comparison to a similar petrol driven car. For long distance travellers, taking the average no of kilometres per day to 50 km, we get the following results, Distance travelled per day: 50 km Minimum saving of over a 1 year period with REVA = Rs. 68,072 Minimum saving of over a 3 year period with REVA = Rs. 2,04,218 Minimum saving of over a 5 year period with REVA = Rs. 3,40,360

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This shows that this car will actually recover 3,40,360/3,31,000 > 100% of its costs in 5 years of operation for a long distance traveller. In any case this car offers a great value proposition for the customers in terms of economy. Note that we havent yet quantified the environmental benefits that this car has over other petrol/diesel driven cars.

FIGURE 20: COST SAVINGS DUE TO REVA FOR PERSONAL USERS

SWOT ANALYSIS
STRENGTHS
No Competition in the Electronic Vehicle Segment. Environment friendly car Economic to Drive (0.4 paise/KM) Successful in Export Markets (no 1 in UK) Easy to Drive (gearless, clutchless, small turning radius) Easy to park (small size)

WEAKNESSES
Competition from gasoline vehicles Small size High Price Low consumer awareness Low top speed (80KM/hr)

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Small driving range (upto 80 KM)

OPPORTUNITIES
Huge untapped EV market Growing demand of green technologies Rising fuel costs Growing road congestion in urban cities

THREATS
Government incentives to gasoline vehicles Entry of competitors Stringent safety requirements anticipated Availability of hybrid vehicles

PORTERS 5 FORCES
THREAT OF NEW ENTRANTS - LOW
Suzuki Global Car Tata Motors- Nano( Priced At 1 Lakh) Bajaj-Renault-Nissan Small Car (Electric) Field Marshall (India) and Farnow Group (Austarlia) Small Car Ajanta Group Small Car Project

BARGAINING POWER OF BUYERS - HIGH

The product is currently one of a kind and hence it doesnt have a competition to compare against As there are many alternatives to the car like 2 wheelers and other petrol driven cars, the buyers has to make more than one choices while buying the Reva. Hence, the buyers need to decide if the price is appropriate for the value provided.

BARGAINING POWER OF SUPPLIERS -LOW

Reva has a strong base of 175 suppliers and these have been supplying to Reva for its industrial material handling products. Reva is also into Automotive Components Manufacturing for many years and manufactures many components for itself thus giving less bargaining power to its suppliers

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Reva The Car of the Future

CURRENT RIVALS IN THE CATEGORY -HIGH

Tata Indica, Maruti Alto, Maruti-800 are the current rivals Also, 2 wheelers provide indirect competition to Reva as a substitute with nearly similar purchasing and operating costs.

PRESSURE DUE TO SUBSTITUTES - HIGH

Tata Indica,Maruti-800,Wagon-R,Alto & Maruti Zen are striving for increasing their market share and this puts continuous pressure on Reva to innovate and compete with these substitutes Future Substitutes- Tata Nano, Bajaj-Renault-Nissan Small Electric Car, field Marshall Group Small Car, Ajanta Group Small Electric Car (Proposed Price Rs. 85,000) also pose a challenge to REVA

MARKETING OBJECTIVES
The main marketing objectives for REVA are: 1. Increase Sales 2. Create brand awareness

INCREASING SALES
The current sales of REVA are not sufficient to achieve break even. As a result, RECC is having problems in deciding the long term strategies for the company. Though people like the concept of car on electricity, still many people are apprehensive when it comes to buying the car. This is because of the unavailability of recharge points on existing roads and the present scenario of power deficiency in India.

CREATE BRAND AWARENESS

Reva as of now is a well know product, as reflected by the survey. It doesnt have an advertising program but depends on its site and word-of-mouth publicity. But, when it comes to other big players in the automotive sector, Reva lags behind. To add to this, big players like GM, Renault-Nissan, Toyota and even TATA are planning to make an entry in the Environment Friendly Car Segment. As a result, RECC has to make itself a good brand in order to compete with the big players. Otherwise, RECC may lose the first mover advantage in this sector.

MARKETING STRATEGIES
SEGMENTATION SCHEME
The current segmentation scheme for Reva is based on utility, gender and income preference. The target segment includes working women, college going students, small families with one or no children and for families that are looking to substitute a 2-wheeler with a car for the purpose of a second vehicle.

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Highly environment friendly people also prefer Reva for city use. The geographic distribution is restricted to 6 states and overseas operations in 10 countries.

SEGMENTATION PROFILES
We recommend a widening of the customer base on various grounds. Firstly, the sales should be expanded to all of the country as compared to just 6 states. Tier I and Tier II cities can be targeted for sales. In Tier I cities, the congestion in traffic, lack of parking space and long queues at the petrol pump can be avoided if Reva is used by a high percentage of the population. Also, in these cities pollution is a major cause of concern that can be addressed by Reva. Some states like Rajasthan, Uttarakhand, Andhra Pradesh, etc, have given subsidy in road taxes or other taxes for public and corporate using environment friendly vehicles like Reva. In Tier II cities, the economy of the car can be emphasized to the middle income bracket that forms a majority of the working population. As the car is preferred by women for its ease of driving, the following data presents the potential for use in case expansion to all the states across the country. The current coverage is only 40% of the entire female working population in urban centers.
TABLE 3: NUMBER OF WORKING WOMEN IN INDIA AND A FEW STATES

Number of working women(000)

Geographic Segment Delhi Uttar Pradesh West Bengal Gujarat Maharashtra Goa Karnataka India Public Sector 92.98 173.01 107.24 147.51 373.77 10.18 267.69 3002.82 Private Sector 33.78 53.03 120.08 94.24 233.38 6.91 323.61 2117.69 Total 126.76 226.04 227.32 241.75 607.15 17.09 591.29 5120.5

The age distribution given below, shows that the majority of the population in the country is within the age segment of 20-60. This is the age when driving is most required for working people. Hence, age wise, this age segment is most appropriate for Reva.
TABLE 4: AGE WISE POPULATION DISTRIBUTION IN URBAN CENTERS IN INDIA

Age wise Population Distribution in the Urban centers

Age Group 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 Males 28365228 25737253 22445165 21615541 17173126 14453974 10809961 7682278 Females 15193668 13180373 11673137 11157103 9458276 7844213 6038917 4010268 Total 13171560 12556880 10772028 10458438 7714850 6609761 4771044 3672010

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Secondly, using the findings of the market survey mentioned earlier, we see that for most people, fuel efficiency is the most important factor considered while buying a car followed by

TARGET SEGMENT
The target segment that we propose is middle and upper income groups across geographic locations throughout the country. As explained earlier, Tier I and Tier II cities, both should be targeted. Increasing the coverage to across the country will involve a few initial costs, as the showrooms and outlets are managed by the company itself, but a 150% increase in target audience occurs validating the initial expenses. Women, college goers and also people looking for a bike can be given the Reva as a car made to save them money and meet all their requirements of driving in the city where the average speed is 20 kmph. An EMI Calculator is shown for people who would like to buy the Reva instead of a 2-wheeler.
TABLE 5: EMI CALCULATOR

Months Loan Amount Applied For Rate Of Interest Rs 264912.8 14% 12 24 36 48 60 72

EMI Rs. 23786/Rs. 12719/Rs. 9054/Rs. 7239/Rs. 6164/Rs. 5459/-

EMI/lakh Rs. 8979/Rs. 4801/Rs. 3418/Rs. 2733/Rs. 2327/Rs. 2061/-

POSITIONING
The Reva is positioned as the following based on the statistics and survey results presented earlier. Environment friendly car, electric run and non polluting Easy to drive Easy to maneuver Small size Stable and safe while driving City car High value for money for user and environment also

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Considerable savings during usage Ideal second vehicle for performing daily routine tasks like going to the market, picking up children from school, etc. Representing progressive innovation

MARKETING ACTION PROGRAMS

PRODUCT
Battery electric vehicle designed for low speed, congested, urban conditions Market and technology leader in EVs Inherent benefits of an electric car Highly differentiated due to advanced technologies Easy to charge, charging is as simple as charging a mobile Easy to park due to small size Low operating cost 40 paise /Km compared to 4 Rs/km for petrol cars Low maintenance cost due to low number of movable parts Easy serviceability Not causing any pollution while usage REVA has the best-in-class safety features like dent-proof ABS body panels, side-impact beams, a steel space frame and dual-braking system. REVA is one of the most feature rich vehicles available in the market. Features like the Climate Control Seat (CCS) and Remote Controlled A/C have been especially incorporated to improve passenger comfort at an affordable price. The design methods and manufacturing philosophy used in REVA allow it to be manufactured cost effectively even at low volumes.

PRICE
Actual Price - 3.3 lakhs Competitive pricing strategy based on the cost of the production and return on investment

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Main cost of lithium ion batteries. Government subsidizes 33 % of EV costs for purchases involving PSUs, govt departments, private institutions when ordered in bulk Road taxes are subsidized for users of EV

PLACE
Exclusive showrooms and sales outlets in major Tier I and Tier II cities Retail battery outlets across the country Collaboration with Reliance Digital to leverage its well established distribution network Target corporations and government organizations for bulk deals Service and customer care centers in all the major cities

PROMOTION
Currently Reva doesnt have any promotion strategy. Its site acts as a point of contact between peo ple and the company. Currently the public is aware about its being a zero-emission vehicle, but other benefits of the car are unknown. Also some misconceptions exist regarding its safety, power and drive. Building impact through various media public relations, mass media, advertising and events can be done to increase public awareness about the other aspects of Reva and clear up misconceptions.

PR
Pre launch excitement and buzz created before the release of the new model every year, because of being the first of its kind in Indian market High coverage of the launch in media

MASS MEDIA
Creating awareness among the target segment about electric vehicles emphasizing the key features like low maintenance costs and easy to drive etc Clearing misconceptions through positive advertising Appealing to the target segment by emphasizing the importance of being eco friendly

ADVERTISING
Displaying in college festivals and major events like trade fairs, Auto shows in major cities. Placing hoardings at major junctions in cities. Print advertisements in all the major dailies.

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Advertising through radio and Television using film stars or cricketers as Brand ambassadors Advertising in Car magazines Booklets and Pamphlets can be distributed at car showrooms and retail battery outlets

PERSONAL SELLING (PUSH STRATEGY )

Dealer acts as the interface between company and customer The sales personnel of the dealership attend to the individual customers The sales executive of the company needs to make sales presentation to corporate buyers Tie ups with banks for loans for customers Tie ups with organizations for bulk sales

DIRECT MARKETING
In the case of Direct Marketing the Company Officials directly contact the Prospective buyers with the information available through various sources. For example in case of Road Shows, Trade Fairs, Auto shows etc. Sometimes the existing customers also provide references of prospective buyers such as their friends or relatives.

IMPLEMENTATION
BUDGET
The expenses of the company for marketing include mainly that of an advertising budget. We would like to use the percentage of sales method. The desired sales for Reva are around 7,000 cars to break even when the current sales are of around 3,000 cars per annum. Hence, the desired revenue amount is 7,000 * 3,30,000 = Rs 2,31,00,00,000. Hence if we consider 20% of these costs as this will be the first advertising campaign for the product, the total budget for advertising is Rs 46,20,00,000. The costs for Research and development are fixed at $ 20 million which has been funded by private equity.

ACTIVITY SCHEDULE
The activity schedule around the advertising campaign will revolve around the product launch that happens every year. 3 months prior to the product launch, the advertisements in the media, print, television and radio, should start that create curiosity regarding the product. During the product launch, along with the advertisements, the messages regarding loans should be sent across to the public to facilitate conversion of 2 wheeler buyers into Revas customers.

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For the remaining period, testimonials from satisfied customers can be sent across to concretize the message for buyers to be pulled towards Reva.

FINANCIAL PROJECTIONS
Fresh investments that Reva got = $ 20 million (from Private Equity) New capacity (by end of 2010) = 30,000 cars. Target sales by 2010: 30,000 Sales achieved in 2009: 3000 Sales to be achieved for break-even = 7000 cars. (Company claims) Selling Price of iReva = 3.3 lakhs Break-even revenue = 7000 x 330,000 = 2,310,000,000 = Rs. 2.3 billion Revenue achieved in 2009 = 3000cars x 3.3 lakhs/car = Rs 1 billion Rate of growth achieved till now 10% Rate of growth expected for the next 3 years: 7000 = 3000 (1 + r/100)3 R = 32.6% The companys sales have been growing only very steadily The company needs 3 times the growth of 32.63% for the next 3 years to just achieve breakeven sales, which in itself is an uphill task Since the company is relying primarily on funding and Private equity investments, it has probably got the last big boost of equity from a partner and hence this is the companys last chance to improve sales and turn profitable The horizon for improvement of 3 years seems unreasonable given the past growth Considering a 5 year period: 7000 = 3000(1 + r/100)5 R = 18.46% growth in sales So if the sales still grow at twice the rate, it shall take about 5 years to just break-even. Hence the companys decision to increase capacity to 30,000 cars seems a step in preparation for the future and is the last effort to save it from bankruptcy.

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REFERENCES
i. ii. iii. iv. v. vi. vii. www.revaindia.com www.dnaindia.com www.business.outlookindia.com www.auto.indiamart.com http://www.businessworld.in/index.php/Can-Reva-Go-the-Extra-Mile.html http://www.businessworld.in/index.php/Automobiles/Reva-Takes-Charge/Page-2.html http://www.indiastat.com

TABLE OF AUTHORITIES
Table 1: Cost of petrol per liter in conventional cars __________________________________________________ 14 Table 2: Savings per month due to reva usage for corporates __________________________________________ 14 Table 3: number of working women in india and a few states __________________________________________ 19 Table 4: age wise population distribution in urban centers in india ______________________________________ 19 Table 5: EMI calculator _________________________________________________________________________ 20

TABLE OF FIGURES
Figure 1: Age group of survey respondents __________________________________________________________ 7 Figure 2: Gender distribution of SURVEY RESPONDENTS ________________________________________________ 7 Figure 3: Previously owned cars ___________________________________________________________________ 7 Figure 4: importance of power drive _______________________________________________________________ 8 Figure 5: Importance of Fuel Efficiency______________________________________________________________ 8 Figure 6: Importance of Maintenance Costs _________________________________________________________ 8 Figure 7: Importance of reputation of brand _________________________________________________________ 8 Figure 8: Importance of Price _____________________________________________________________________ 9 Figure 9: Importance of size of car _________________________________________________________________ 9 Figure 10: importance of looks and comfort _________________________________________________________ 9 Figure 11: importance of ease of service ____________________________________________________________ 9 Figure 12: importance of additional services ________________________________________________________ 10 Figure 13: importance of environment friendliness ___________________________________________________ 10 Figure 14: time period for buying a new car ________________________________________________________ 10 Figure 15: Price range of car desired ______________________________________________________________ 10 Figure 16: requirement of a car as a second vehicle __________________________________________________ 11 Figure 17: general awareness About reva __________________________________________________________ 11 Figure 18: sources of information of reva __________________________________________________________ 11 Figure 19: preference of reva given that it has 10 times efficiency _______________________________________ 11 Figure 20: Cost savings due to reva for personal users ________________________________________________ 16

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