Monday, January 30, 2012

Product Marketing - Case of Mahindra XUV500

Mahindra & Mahindra released XUV500 in October 2011, and this SUV has been a runaway success since launch.

What's different about XUV500 has been its marketing campaign. From the very beginning, Mahindra has carried out a digital campaign on Internet: Facebook, Twitter, YouTube and has shunned the traditional TV & print media.

Secrecy as an Influencing Strategy

Before launch, Mahindra chose secrecy as a marketing strategy. The online marketing campaign had three parts:

1. Guess the Name
2. Unveil the XUV campaign
3. Guess the price

The campaign was spread mainly through social media (new way of word-of-mouth spreading message)

Marketing campaign was created using "secrecy" as a strategy and enticing the customers to guess. The excitement of getting to know this secret kept the viewers hooked, while Mahindra used a staged tactic to reveal part by part of the new car.

Secrecy is a great marketing tool - especially when the final product is really well executed and world class. Apple is renowned for its secrecy as a marketing campaign. Apple pre-announces the product, but does not reveal the details till the day of launch and at the launch, Apple will spare no quarter to promote the product. The secrecy of the product adds to the customers inquisitiveness and creates an inbuilt desire to get that latest gadget.

Secrecy is not a standard marketing tool - it must be used with great caution. There are few prerequisites for using secrecy as a marketing tool:

1. Understand your prime market demographics.
2. Know the customer expectations before hand.
3. Create a hype, mystic and emotional attachment to your product
4. The final product must beat customer expectations

When the XUV500 was launched in October - the result was a tremendous success. More than 8000 cars was booked in the first 10 days. The overwhelming response forced Mahindra to close the booking after 10 days.

The marketing campaign was a success beyond belief.

1. 150,000 people participated in reveal the name contest
2. Over 100,000 people visited the web site every day
3. Over 120,00 fans on Facebook
4. 35,000+ requests for test drives

Shortage as an Influencing Strategy

Soon after the launch, Mahindra changed gears and switched over to "shortage" as an influencing strategy.

The initial bookings of 8000 cars was achieved within 10 days, and Mahindra created a shortage by stopping all new bookings. From October 2011 to Jan 26th 2012, Mahindra had stopped taking orders for new XUV500 cars!

This created a sense of scarcity and more people rushed to car dealers to inquire about the car and when they can buy it.

In the mean time, Mahindra put considerable marketing resources to Facebook and Twitter and kept the market hooked by revealing more stories about XUV500 .

Finally on January 26th, Mahindra reopened the sales of XUV500 for 9 days only, and announced that they will stop taking new orders on 3rd February, and this will be limited time offer. I.e., customers now have an opportunity to buy the XUV500 in that short window.

To create a hype for new car buyers, Mahindra decided to allot only 8000 cars by lottery! I.e., only 8000 of the lucky customers will get the car, and rest will have to wait longer - till Mahindra opens up XUV500 sales again.

The human psychology reacts to a shortage by hoarding. Mahindra has now created a huge fan following to its car and then created a sense of shortage - thus making people rush to its dealers to buy the car.

In the mean time, Mahindra has increased the price of the car by Rs 55,000 or $1100! And people did not seem to care about the increased prices.

The notion of shortage also creates a sense of exclusivity. So people rush to get the object in shortage - thus increasing demand (which results in willingness to pay more for the same product). For customers who were "lucky" to buy the XUV500 have a aura of exclusivity.

Closing Thoughts

The marketing campaign of XUV500 by Mahindra is a text book case study - every marketing professional and student must study it.

The final product - XUV500 is a well executed product - but there is noting special about the SUV when compared to its competition: Toyota Fortuner or Tata Aria or Chevrolet Captiva. But the way Mahindra executed on the marketing campaign - ensured the success of the product.

Now coming to reality - saying that "only" 8000 cars will be made in next 3 months is a joke, Mahindra has immense manufacturing capacity and a sense of scarcity is artificially created to build a hype on the product. The marketing campaign is a tremendous success.

Also See:


Sukhwinder Singh said...

Mahindra XUV 500 equipped with 2.2L hawk Direct Injection diesel engine..Six-airbags, Electronic Stability Program, Traction Control and UBS. The SUV rides on huge 17-inch wheels and the top-end variant gets Four-wheel drive. The XUV500 can seat 7 in comfort including a third row of seats which can accommodate 2 persons. I am sure this car will rock and grab good market share and good will for Mahindra..

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france pope said...

Great post! Very informative.
Thanks for possibility to write on your website,
it's great!
I’m still hoping there will be more posts on this site.
Thanks a lot!

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