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Global Shared Feature: Establishing Category Membership

Mahindra and Mahindra (M&M), the market leader in the Indian utility-vehicles (UV)
market, was looking for a positioning strategy for its new SUV. The market for UVs in
India was limited in size and came mainly from rural and semi-urban markets, which
were stagnating. As the urban market for automobiles was growing rapidly, M&M
decided to plan a move to urban markets and to look for opportunities beyond the UV
market. Based on market research, M&M positioned its new vehicle, named Scorpio, as,
“Luxury of a car. Thrill of an SUV.” In 2003, Scorpio was rated as the most successful
new brand launch in India.

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In 2002, Mahindra and Mahindra (M&M) was one of the largest industrial houses in
India with a turnover of INR 55 billion (US$ 1.38 billion). The group’s automotive
business, the flagship of the company, was in the business of manufacturing and
marketing utility and light commercial vehicles, and was a market leader in the utility-
vehicles segment. The company carried out a rationalization of its product and brand
portfolio and had redesigned and re-branded some of its models for the urban market.
Simultaneously, it had launched new models targeted at the rural rich to strengthen its
hold on the traditional rural markets.

As M&M was planning to launch a new sports utility vehicle(SUV), it had to look at
market realities and some important trends. The utility-vehicle market in India was only
about 16 per cent of the passenger-car market. Moreover the passenger car segment,
where M&M did not have a presence, was growing almost twice as fast as the utility-
vehicle segment. Rural markets, the traditional stronghold of M&M, were stagnating, and
the company did not have a significant presence in the fast-evolving urban markets.
Another noticeable trend being observed was the poaching of the car market in a similar
price band by the new generation of utility vehicles. Given the fact that M&M had
invested considerable resources in the development of the vehicle, the company needed
to generate substantial volumes and garner a significant market share for the new vehicle.
This implied that the new SUV had to search for opportunities beyond the market for
utility vehicles. In order to participate in the growing urban market, the company, based
on an intensive market-research exercise, identified customer requirements and designed
a new vehicle following a well-defined new product-development process. This process
involved customers as well as suppliers in all major stages. The vehicle finally developed
with the aesthetic appearance of an SUV, followed an endorsement-branding strategy and
was called “Scorpio from Mahindra.” An important issue that the company had to address
before the launch of the vehicle was on the positioning strategy.
To arrive at a positioning strategy M&M generated a number of possible positioning
alternatives. These included alternatives such as, a vehicle that could cruise on any type
of road, a vehicle designed by the world’s top designers, the most powerful vehicle on
Indian roads, and a rare combination of luxury and brute force. In order to get customer
inputs at this stage, the company held a “static and drive” clinic in one city. Respondents
belonging to the defined target segment were invited to inspect and drive the vehicle. The
purpose was to obtain customer evaluation of the vehicle and to obtain their reactions as
an input for arriving at a positioning decision. In the “static” evaluation phase, the
respondents gave superior ratings for exterior fit and finish, exterior appearance, interior
styling and comfort, and overall interior fit and finish. The vehicle was also perceived as
sturdy. In the “drive” evaluation phase, the vehicle scored well on power and pick up,
overall quietness of the vehicle, ease of gear shifting, and overall drive quality.
Respondents also perceived the vehicle as sturdy and strong, but not very rough or
rugged, good looking, stylish, having a good finish, luxurious, and comfortable.
Regarding the question whether this vehicle could be a car, some of the respondents
reacted negatively by saying that this vehicle did not look like a car, although it could be
a car. Based on these inputs, the company finally decided to position the new vehicle on
the platform of “Luxury of a car. Thrill of a SUV —a “Car Plus” positioning.

Since the communication strategy also had to be in line with the brand positioning, the
visuals in the advertisements avoided any suggestions about off-road usage and presented
the vehicle in urban settings. The TV commercials depicted a woman driving the vehicle,
to provide the image that on functional and comfort dimensions the vehicle was easy to
use and suited for everyone. The print ads, while highlighting the functional benefits
avoided the SUV word and repeatedly used the word “car” to reinforce the hybrid
positioning. M&M also redesigned its retailing and service network to reflect the ethos of
the “Scorpio” brand and to give the stores a more “up-market” experience. In 2003,
Scorpio was rated as the most successful new brand launch in India and became one of
the largest selling SUVs in India.

Abraham Koshy, “Scorpio from Mahindra: Brand Positioning Decision,” Case registered
at the Indian Institute of Management Ahmedabad, IIMA/MAR 378, 2006.

Abraham Koshy, “Scorpio from Mahindra: Developing Brand Identity,” Case registered
at the Indian Institute of Management Ahmedabad, IIMA/MAR 379, 2006.

Questions for Discussion

1. M&M had an option of choosing from a number of positioning strategies. What might
have prompted M&M to adopt this particular positioning strategy?
2. What are the advantages and disadvantages of Scorpio’s strategy of straddling across
two different categories of car and SUV?