MAHINDRA & MAHINDRA GROUP 3

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Mahindra & Mahindra

Contents 1 2

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Executive Summary ............................................................................Error! Bookmark not defined. Market Summary.................................................................................Error! Bookmark not defined. 2.1 Market growth ...............................................................................................................................3 2.2 SWOT Analysis .......................................................................... Error! Bookmark not defined. 2.3 Competitors ....................................................................................................................................6 2.4 Product Offering ............................................................................................................................6 2.5 Keys to success ...............................................................................................................................7 2.6 Critical Issues .................................................................................................................................7 Marketing Strategy ................................................................................................................................. 7 3.1 Mission..............................................................................................................................................7 3.2 Marketing Objectives ...................................................................................................................8 3.3 Target Markets ...............................................................................................................................8 3.4 Positioning ......................................................................................................................................8 Marketing research ................................................................................................................................ 9 4.1 Distribution ................................................................................................................................. 10 4.2 Communication: ....................................................................... Error! Bookmark not defined. Financials ...............................................................................................Error! Bookmark not defined. 5.1 Sales forecast ............................................................................. Error! Bookmark not defined. Voice of Customers..............................................................................Error! Bookmark not defined. Voice of Stakeholders ........................................................................Error! Bookmark not defined.

1|Indian Institute of Management Raipur

Mahindra & Mahindra

1. Executive Summary Mahindra and Mahindra Limited (M&M) is a multinational automobile manufacturing corporation headquartered in Mumbai. It is one of the largest vehicle manufacturers by production in India and the largest manufacturer of tractors in the world. It is a part of Mahindra Group. It was ranked 21st on a list of top companies in India by Fortune India 500 in 2011. Its major competitors in the Indian market include Maruti Suzuki, Tata Motors, Ashok Leyland and others. Mahindra introduced the first utility vehicle to India in 1947 and 70 years later it has a portfolio of category defining UVs that are tough, reliable and refined. Mahindra’s UV’s are sold in 70 countries worldwide and the company has R&D facilities in India and US. With a rapidly expanding economy and an increasingly prosperous middle-class Mahindra has an immense opportunity for growth in India. Slowly and steadily Mahindra has also continued its international expansion with a product launch in Brazil last year. Global trend has been moving towards electric vehicles and environmentally sustainable solutions which Mahindra has tried to capitalize on with its investments in the Electric vehicle segment. Moving forward Mahindra should continue developing India specific products with localized innovation keeping in mind a global perspective. Strengthening after sales service and distribution would help it in cementing its position as a market leader.

2. Market Summary 2.1 Market Growth Automobile ownership pattern in India is reflective of both the income as well as the age of the buyer. India being a country with low average incomes, automobile ownership is still seen as an aspirational symbol. The chart below gives an age wise ownership trend for types of vehicles.

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Mahindra & Mahindra

While most entry level buyers in India prefer buy hatchback cars due to urban congestion and price constraints. The UV segment is also witnessing robust growth on of rapidly rising incomes.

The chart below gives comparative data regarding income levels and average car prize.

In India car ownership varies across states as a function of the income levels in that state. The more prosperous states have a higher rate of ownership than the poorer ones. The below chart ranks Indian states by ed motor vehicles per 1000 population. 3|Indian Institute of Management Raipur

Mahindra & Mahindra

The market for Mahindra UV also follows a roughly similar trend across Indian states. Two specific products of Mahindra namely Bolero and Scorpio have a special appeal to the rural segment due to their rugged image.

2.2 SWOT Analysis Strengths Weaknesses  Market leader in multiple automotive  Geographic dependence: M&M is segments: Mahindra & Mahindra has depended for the majority of its leading market share in a tractor as revenue (over 60%) from India, which well as in the utility vehicles segment. would affect its business in case of any Also, the company has strong market economic slowdown or high inflation. share in the commercial vehicle as well  Product Recalls affects brand as enger vehicle segment. Strong image: M&M has had to recall many of market share provides a competitive its products in the recent past. For advantage to the company and allows instance, In February 2015, M&M the company to focus on innovation. recalled XUV500 manufactured before  Strong Research & Development July 2014. Such incidents affect the (R&D): M&M has a highly focused brand image of the company and R&D department constantly focusing consequently affect sales. 4|Indian Institute of Management Raipur

Mahindra & Mahindra

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on developing new products and technologies. M&M majorly focuses on Value addition and Value engineering (VAVE) approach, deg modularity, use of alternate materials etc. Excellent products according to Indian road conditions: Mahindra & Mahindra’s SUVs are suited perfectly to Indian road conditions especially, Mahindra Scorpio which has been an outstanding performer for many years. Low after sale cost: M&M has a competitive advantage on after sale cost since it is lower than the industry average and also have high availability of spare parts to different parts of the country.

Opportunities  Growth in Indian automotive industry: The Indian automotive industry is growing year on year with over 12% growth from the previous 3 years. The industry is expected to grow at a CAGR of 13% in the next 4 years. This growth can be beneficial for M&M.  Increasing Demand for Hybrid Electric Vehicles: There is an increasing demand for Hybrid Electric Vehicles (HEVs) around the world. The demand for HEVs is expected to grow at a CAGR of 19% in the next 3 years. M&M has a strong portfolio of HCVs and is set to be benefited by the growing demand  Emerging nations: M&M should look forward to tapping the emerging nations around the world which have high potential. M&M should build over its global footprint to tap the emerging markets.

Threats 

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Competition in the automotive industry: M&M faces intense competition from various automotive companies such as Tata Motors, Ford, Volvo and General Motors etc. This can affect M&M’s market share and put pressure to constantly innovate on M&M. Stringent Regulations: M&M is subject to strict regulations by the government and environmental agencies in of emission levels, noise levels etc. Such regulations keep changing and thus increase compliance costs for the companies. Ever increasing fuel prices Substitute modes of public transport like buses, metro trains etc.

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Mahindra & Mahindra

2.3 Competition Mahindra faces tough competition from players like Maruti Suzuki (Vitara Brezza), Hyundai (Creta) and Toyota, whose new launches and thrust on product development in the category has eaten away a substantial chunk of M&M’s market share. . 2.4 Product offering Mahindra offers a wide range of utility vehicles at competitive pricing following its success from Scorpio and Bolero.

Mahindra XUV500

Mahindra TUV300

Price

12.47 Lakhs

Price

9.94 Lakhs

Fuel Type

Diesel

Fuel Type

Diesel

Power

140bhp@3750rpm

Power

84bhp@3750rpm

Torque

330Nm@1600-2800rpm

Torque

230Nm@1500-2250rpm

Mileage:

16 kmpl

Mileage:

18.49 kmpl

Engine Displ.:

2179 cc

1493 cc

Power Windows

Y

Engine Displ.: Power Windows

No. of gears

6

No. of gears

5

Airbags

N

Airbags

N

Central Locking Anti-Lock Braking System

Y

Central Locking Anti-Lock Braking System

Remote

N

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Y

Y

Mahindra & Mahindra Mahindra KUV100 Price Fuel Type Power Torque Mileage: Engine Displ.: Power Windows No. of gears Airbags Central Locking Anti-Lock Braking System

4.58 Lakhs Diesel 77bhp@3750rpm 190Nm@1750-2250rpm 25.32 kmpl 1198 cc Y 5 2 (Driver & Co-Driver) N Y

2.5 Keys to success The key to success of being the leader in utility vehicle segment is that right from the inception of willys jeep, by constant innovation the company has been able to increase the portfolio to cover from two wheelers to heavy trucks to SUVs. The product being designed keeping in view the end consumer expanding the reach overseas. 2.6 Critical issues According to data from companies and the Society of Indian Automobile Manufacturers (Siam), M&M’s market share in the UV segment fell from 39.7 per cent (2,22,324 units) in 2015-16 to just 29.2 per cent in 2016-17. So Mahindra and Mahindra has to start coming up with more innovative products to give a tough sweat to competitors.

3. Marketing Strategy 3.1 Mission To create India's largest automobile and automobile-related products distribution network by providing dealers and customers with the largest choice of unique world-class products and services. “We don’t have a group wide mission statement. Our core purpose is what makes all of us want to get up and come to work in the morning” – Anand Mahindra

3.2 Marketing Objectives Mahindra is providing the Indian customers with a range of products at different price levels. The company seeks to fulfill following benefits that are important to its customers: 7|Indian Institute of Management Raipur

Mahindra & Mahindra 

Quality Construction – The customers work hard on their money and do not wish to spend on a vehicle that may be easily damaged. In the Indian context with the poor roads and infrastructure this need is even more important.

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Well thought design – The Indian market and the customer has its unique needs which will not be addressed by copying and importing western designs. The Indian customer demands decent quality at a reasonable price.

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Customer Service – Exemplary service is required to build a sustainable business that has a loyal customer base. This is even more important in an extremely competitive market like India.

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Reasonable pricing- The Indian market is extremely price sensitive and hence the company requires to minimize its costs at every step of the value chain. 3.3 Target Markets For its SUV segment anchoring on its looks and competitive pricing Mahindra and Mahindra targets young executives from upper middle income bracket.

3.4 Positioning M&M s smartly. The marketing strategy is not only about our TV advertising, a lot of print, digital and social media advertising is included to.

3.4.1. Social media Marketing on social networking sites is being utilized to showcase products and services, receiving customer and staying connected to latest trends. Mahindra connects through social networking sites to reach out to current and prospecting customers. It connects with leading social networking sites like Facebook, Twitter, LinkedIn, YouTube and Google+. 8|Indian Institute of Management Raipur

Mahindra & Mahindra Anand Mahindra the executive chairman is highly active on the social media platform Twitter. He has over 5 Million Twitter followers and is influential in the twitter universe because of his wide variety of views on Twitter. His twitter handle is @anandmahindra.

3.4.2 TV Commercial Although initially one of the most preferred medium of communication, it still has a strong hold on customer preferences. ments featuring attractive models and actors with their products have been used to make Mahindra and Mahindra a household name.

4. Market Research The following things are considered by Mahindra and Mahindra while doing a Market Research for utility vehicles : 1. Conduct Market research in various demographics for understanding opportunity, demand , growth potential and competition. 2. Understand customer needs, pains and values. 3. Identify the gaps in current offerings and create multiple concepts of proposed product. 4. Offer the concepts to potential customers to analyze the difference between what is offered and what is required. 5. Develop subjective functional image targets based on proposed concept evaluation.

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Mahindra & Mahindra 4.1

Distribution

Car manufacturers don't sell directly to consumers but instead use dealers as their retail outlets. The number of intermediaries depends on the market and the products.

4.1.1 Market Influence The goal of the manufacturer is to deliver maximum value to customers. Often the market structure makes it difficult for the manufacturer to service consumers directly. Instead, specialized intermediaries take over specific tasks. If there are few, large customers concentrated in one area, it makes sense for the them to serve them directly. If thousands of customers are spread around the country and order small quantities, the manufacturer may be better off focusing on production and leaving distribution to others.

4.1.2 Product Influence A manufacturer that produces small quantities of high-value products can easily find the few customers required. A mass-market producer of millions of low-cost items requires a major effort to service customers and usually uses intermediaries. Products that require special expertise or quick delivery force manufacturers to sell directly or limit the number of intermediaries. Manufacturers have to balance costs and customer convenience with ensuring the product marketing is accurate and customer is adequate.

4.1.3 Potential Strategies Distribution strategy characteristics include the structure of the channel and the nature of the partners. Companies can gain a competitive advantage by creating shorter, low-cost channels or by selecting partners who fulfill their role more effectively than those used by competitors. The optimal distribution channel strategy uses only intermediaries that add value for the final customer, either by reducing costs or by delivering additional convenience, service or functions.

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Mahindra & Mahindra 4.2

Communication

1. Mahindra and Mahindra generally organize a pre-launch event where they release the images of the product which helps them in getting about the design. 2. Next they release a video of the vehicle plying on the road, before the official launch on various social networking sites. 3. Mahindra & Mahindra also targets various e-commerce platforms to sell their new launch and has already started taking bookings on Flipkart, car and bike portals and its own e-retail platform M2ALL. Looking at the digital market penetration, Mahindra & Mahindra has broadened its horizons by tying with e-commerce platform making the sales easier for online customers.

5 Financials 5.1 Sales Forecast

The leader in utility vehicles (UV) segment for several years, Mahindra & Mahindra (M&M), seems to finally be losing ground to other auto-makers such as Maruti Suzuki, Hyundai and Toyota, whose new launches and thrust on product development in the category have already eaten away a substantial chunk of M&M’s market share.

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Mahindra & Mahindra According to data from companies and the Society of Indian Automobile Manufacturers (Siam), M&M’s market share in the UV segment fell from 39.7 per cent (2,22,324 units) in 2015-16 to just 29.2 per cent in 2016-17. The total sales in the UV segment for the last financial year grew at a substantial 30 per cent to 7,61,997 units. However, while UV sales for Maruti Suzuki and Hyundai, for example, grew at nearly double and 52 per cent, respectively, M&M’s UV sales grew just marginally. Experts put the blame solely on the market leader lagging in new product launches in the category, especially in the compact SUV segment. Both Maruti Suzuki’s Vitara Brezza and the Hyundai Creta have grown at a significant clip as far as sales are concerned over the last year. “Customers now want more features and newer options. There needs to be constant renewal in of new models launched,” pointed out Abdul Majeed, auto analyst and partner, Pricewaterhouse Cooper. The trend is not isolated only to Maruti Suzuki and Hyundai, while the front runners in of volumes after M&M. “SUV market is growing with customers looking for newer experiences...our current SUV line is strong with Creta, Tusco, etc,” pointed out Rakesh Srivastava, director (S&M), Hyundai.

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Voice of Customers: Suraj Thakur Bolero Pickup is a very good utility vehicle for those who carry small loads or packaged to longer distance. It is very comfortable and has spacious cabin with all the necessities which definitely make the occupants comfortable. The smooth gearshifts make driving easier. This pickup truck is fatigues free which will further adds to the safety of the occupants. Rajeev Kumar Mahindra Imperio is a good utility vehicle which provides comfort and convenience. It has good loading ability. It is very spacious from inside. The look of the vehicle is also very good. Overall it is a nice blend of smart technology and usability.

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Voice of Stakeholders: Rakesh Jadhav Designation: Assistant Manager in MQA Mahindra & Mahindra is a better place for work. The area in which he was working includes spot welding and CO2 welding. It has a fast paced environment with motivated employees. The work culture is very good, it has respect for individual and family. Mahindra & Mahindra invest a lot in Marketing. It includes Auto expo and International expo. It gives ment through print media and social media. Also it conducts annual surveys to know the merits and demerits of their products which are available in the market. Overall the company has good opportunity to grow more.

Aslam Baig Designation: Assistant Manager in MQA Mahindra & Mahindra is good place for learning. The management here is very cooperative, it has many work strategies to learn, since it is a Multinational Company. It has always tried to inbuilt the best features in feasible prices. The company has great future ahead.

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