TVS Victor

The story behind the smiles…

By
Jagdeep Dahiya (07)
Anthony Joseph (14)
Sweta Singh (22)
Anuj Tagra (25)

NMIMS Capital Markets TVS Motor Company,

 Background
Motorcycle Market share of TVS-M

32

28 Better Plan
26

24
24 23
%

23 23

20 21
Absence of 4-Stroke 20
19 Motorcycle
Actual
16
95-96 96-97 97-98 98-99 99-00

Market share loss: From 23 % to 20 % in one year

NMIMS Capital Markets TVS Motor Company,
 Hero Honda & Mileage
• Launch of 4-stroke motorcycles – the “CD” series

• Launch of the classic “Fill it, Shut it, Forget it”

campaign

• Redefined the customer requirements

• Market shift towards more mileage

• Launch of Splendor in ’94, a runaway success

NMIMS Capital Markets TVS Motor Company,

 TVS & Suzuki
• The first Indo Jap 100cc bike - 1984

• Tried to establish power as a key choice factor

• Later opted for reliability

–Symbolized by the No Problem Samurai

• A partnership that lasted 17 years

– Took separate ways on account of differing ambitions

• TVS backed a vision that developed capability

– Demonstrated in XL Super & TVS Scooty
NMIMS Capital Markets TVS Motor Company,
 The Market - 2 stroke Vs 4 stroke
On Volume basis

154 163
146
150 2 stroke 4 stroke 130
Monthly Average Sales in `000s

125 117

100 91

Volume 75 61
44
50 35
29 44
37 35
25 26 31 32 31 32 32 32

0
95-96 96-97 97-98 98-99 99-00 Q1 Q2 Q3 Q4 Q1

2 strokes are stagnating in volumes

NMIMS Capital Markets TVS Motor Company,

 The Market-2 stroke Vs 4 stroke
On market share basis

100
2 stroke 4 stroke 81 82 83 84

75 67 77
62
58

Market 53 53
Share %

50
47 47

Share 42
38
33
25
23
19 18 17 16

0
95-96 96-97 97-98 98-99 99-00 Q1 Q2 Q3 Q4 Q1

2 strokes are declining in terms of market share

NMIMS Capital Markets TVS Motor Company,

 Customer requirement study

• Study conducted to formulate the target quality through customer voice

• Identified Hero Honda Splendor and TVS Max 100 R strong markets

Name : Mr.Raju Haratti – Field officer in Sugar factory Name : Mr.Vishnu Reddy – Agriculturist
User of Splendor , Daily travels 50 to 60 kms User of Max100 R , Daily travels 30 to 40 kms

“I bought Splendor for its mileage and not beauty. It “Max R can be used roughly and can carry 3
is a ‘Gatti gadi’ (strong) and fit for rough roads. persons easily. In Hero Honda ‘Kir Kiri Jasti’
Repair cost in Splendor is very high”. (troublesome – bothering).

projector 2

NMIMS Capital Markets TVS Motor Company,

 Customer feedback
Max R
Strengths Weaknesses
• Rugged
• Mileage
• Low maintenance
• Styling
• Affordability

Splendor
Strengths Weaknesses
• Fuel Economy • High Maintenance
• Riding Comfort
• Better Style

NMIMS Capital Markets TVS Motor Company,

 Target Quality
• Must be quality Mileage (65kmpl) Deal Stopper
Reliability
• Desirable quality Style Satisfiers
Ruggedness
Power
• Attractive quality Ride Comfort Balance
Tilters and Handling

Product that could beat Splendor and replace Max 100R

NMIMS Capital Markets TVS Motor Company,

 Benchmarking with the
consumer
- Product & Price

NMIMS Capital Markets TVS Motor Company,

 Dynamic clinic - Pre and Post
Ranking by customers on styling

Style ranking during Styling clinic Style ranking during Dynamic clinic

10 10

9 9 8.3
7.6
7.3
7.1
7 7
6.3
5.8
6 6

4 4
SPLENDOR CALIBER TVS VICTOR TVS VICTOR SPLENDOR CALIBER

Initial feedback Feedback after improvement

Customer feedback incorporated in styling

Resulted in best rank in2 its category

projector

NMIMS Capital Markets TVS Motor Company,

 Recommended Price

• Splendor at Rs. 42,500 is the benchmark price in the

market today, at the moment
• Keeping in mind the above and,
– Market Research recommendations – Rs. 38,000-42,000
– Business proposition – Rs. 41,800
• Recommend an ex-showroom price of Rs. 41,000
(Bangalore)
• A price difference of Rs. 1500 between Victor GL and
Splendor – this will decide differential pricing state-
wise
NMIMS Capital Markets TVS Motor Company,
 The Final Product
Offered
TVS Hero Honda Kawasaki Yamaha
Victor - Dlx Characteristics Splendor Passion Caliber Crux
110 / 4str. C.C. / Type 100 / 4 str. 100 / 4 str. 110 / 4 str. 106/4 st
8.1 B.H.P. 7.5 7.5 7.7 7.6
63 Mileage 65 63 62 62
 Styling    
40740 Price(B'lore Ex-sh) 42500 44500 41026 40310
Volumes 00-01 MA 57238 11756 12688 6597

Bangalore Ex-Showroom price for Apr`01

A better product than at a marginally lower price

NMIMS Capital Markets TVS Motor Company,

 The Launch
- Method of taking to
Market
NMIMS Capital Markets TVS Motor Company,
 Managing Expectations -
External
• Autoexperts’ personal feel & experience - extensive testing
on all conditions

• Assessments by all leading auto magazines

– Source of reassurance to customers

– Building credibility around the product

• Shootouts by auto-magazines with top ratings across,

against leading competitor brands

NMIMS Capital Markets TVS Motor Company,

 Managing Expectations -
Internal
• Comparative test rides and sales training to all involved parties
– Marketing & Sales staff

– Dealers (Leading to personal involvement in the sales process)

– Dealer sales & service people

– Private Garage Mechanics

Leading to “Sales on Wheels”

– Demonstrative method to show product benefits & superiorities

– Customers’ personal feel of the bike during the sales talk

NMIMS Capital Markets TVS Motor Company,
 Sales on Wheels

Customers ride the Victor while the Salesmen sit at the

back and explain product benefits & features – the
concept behind SoW
NMIMS Capital Markets TVS Motor Company,
 Brand Proposition

&

Communication

NMIMS Capital Markets TVS Motor Company,

 Defining Attractive quality
Stated
Importance

Style Mileage
High

Ride Comfort Power

Low
Ruggedness
Reliability

Uniqueness High Low

NMIMS Capital Markets TVS Motor Company,

 Brand propositions- Mileage & Style
1. Style seen to be Modern and Attractive *. But,
• Style is a continuously evolving proposition
• Involving quick turnaround of product variants
• In the Popular segment, a choice factor
• Honda is the benchmark with CBZ & Passion
2. Mileage stated as the most important need today,
• Honda occupies this position in the consumer mind
• We offer parity on this parameter
• Has become a hygiene factor & all players offer
similar mileage * Consumer research – ORG Marg

Hence, both Style & Mileage not options for us

NMIMS Capital Markets TVS Motor Company,
 Possible proposition for us
• Ride Comfort is seen as the ‘Attractive Quality’ for this product*

• Power / Acceleration of the bike is also seen to be higher as

compared to its competitors *
Ride Comfort
Power / Acceleration

Laddered into
Control

Superior Ride Experience

* Consumer research – ORG Marg
NMIMS Capital Markets TVS Motor Company,
 Brand Communication
• Splendor- perceived as a mileage bike.

• Superior Riding experience translated into

customer being confident and happy post a ride on
the vehicle
Communication was pitched on,

‘Smileage’ (Smiles + Mileage)

Hence the baseline,
‘More Smiles per hour’
NMIMS Capital Markets TVS Motor Company,
 Brand Mnemonic

NMIMS Capital Markets TVS Motor Company,

 Communication – the package
• Built around an understanding of consumer needs

• Two issues to address

-Tell me about the product

-How do you want me to feel

• Addressing both the heart and the head

ACTION:
Theme ad to address the heart – 1 TVC
Product ad (Feature-benefit) to address
the head – 3 TVCs
NMIMS Capital Markets TVS Motor Company,
 Why & Who as a Brand
Ambassador
• Growth faster than expected on Victor
• Limited visibility for TVS in the North & West

• After Suzuki we needed rapid salience build up

• Needed a marriage on performance

–Between TVS & the celebrity

• Sports and films sources to consider

• In a high salience cricket year the solution was obvious

NMIMS Capital Markets TVS Motor Company,

 Status Today

- Victor &

Competition

NMIMS Capital Markets TVS Motor Company,

 Market Share - Victor
12.0
12.0
10.0
%

8.0

6.0

4.4
4.0
Jan- Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
02

NMIMS Capital Markets TVS Motor Company,

 Victor & Competition
Victor GL Splendor Passion
Engine cap 110 97 97
Power 8.5 7.5 7.5
Mileage 65 65 63
Price 40740 40624 41563

• Hero Honda forced to drop prices

– For the 1st time in their history in Apr ’02

– Followed by another drop in Aug’02

• Victor enjoying a price premium against Splendor in all markets

NMIMS Capital Markets TVS Motor Company,

 The source of strength at
TVS
• Resilience
• Hard Work directed by logic
• Courage
• Grabbing Opportunity
• All pervasive passion for being good

NMIMS Capital Markets TVS Motor Company,

 Keep Smiling

NMIMS Capital Markets TVS Motor Company,