REVA CAR-INNOVATION VS MARKETING

Group membersNikhil Das MAslam KKHafeel FasilShafeeq

Case Facts

In early 2001, news magazines and papers started publishing articles of a battery driven car under manufacture at ‘Maini Industries’.

Maini Industries was known to supply precision mechanical components to M/s Bosch Later on started making material handling equipements like trolleys, battery operated mobile trolleys.

Transformation of the company from SSI units to pvt ltd company with about 18-20 years of market presence.

Mr Sudshan is the chairman and his son Chetan is the MD OF Maini Industries

Chetan has studied in USA andit was in his stay at USA that he did his project work on electric car and hence the passion to do it on commercial scale caught up.

Segment Car models Approx.share of the total

1. Economy(upto 2.5 lac/car)

Maruti 800, Maruthi Van, Premier Padmini

45%

2. Mid –Range (2.5-4.5 lac)

Zen, Flat Uno, Santro, Matiz, Indica

25%

3. Luxury Cars (4.5 lacs-10 lacs)

Ceilo, Esteem, Baleno, Honda City, Ford Ikon

20%

4. Super Luxury Cars (Above 10 lacs)

Sonata, Mercedes Benz 10%

Availability of cars in India in 2001

Reva prototype were made and displayed in Bangalore, Delhi and Mumbai

Size was very small, two doors, two children and two adult seats with negligible baggage space.

Big Batteries were used to power the vehicle and batteries needed to be re- charged every 80 km.

Vehicle makes too much noise and looks like a big toy model

Car advantages according to the companies MD chetan:

It is environmental friendly due to zero pollution

It is meant for scooter users, housewives, retired people and students.

It requires very less parking space and hence city people prefer it for narrow roads and easy parking

People prefer to keep it as a second car for use by family members.

Due to zero pollution and it will get tax benefits and hence sales will boost

Since its price will be around 2.o lac people wont hesitate to buy.

Consumers Complaints:

Frequent battery charge is nuisance

Slows down when the battery is in recharge stage

Too high cost for its worthiness( 2.20 lacs)

Friends didn’t appreciate it

Battery is too big and

Noise is irritating

Reva’s performance in the market:

Reva’s sales volume didn’t increase though the total number of cars sold was increasing steadily

Reva could not be sold only on the economy friendly tag

The sales per year was only 200 Nos instead of 2000 Nos. planned by the company

For all makes, in 1994 total 2,10,000 cars were sold and this rose to total 5,90,000 Nos. in 2001

All others sales increased except Reva

Chairman’s Strategy:

Didn’t feel necessary to do any sales promotion to push the sales

He felt it will sell automatically due to its environmental reasons

Friends and consultants suggested him to advertise and organize product demonstrations to get publicity

MD tried to get new battery and making some cosmetics changes to attract customers.

QUESTION AND ANSWERS

Q1. Explain the development of Reva from technology point of view

• change the battery

•Increase the size

•Redesign

•Change in interior

Q2. Do you feel market survey, market share, and pricing factors were neglected? If so how you would have solved it

Yes

Initially the price of car was 1 lakh but when the car was actually sold become 2.2 lakh

• the chairman of reva did not do any sales promotion to push the product

Q3. So far there is no competitor to economy model of Maruthi 800 car. Explain reasons for this.

maruthi was the market leader.

45% of total share in market.

reasonable price.

Targeting middle class people.

THANKYOU