MAHINDRA GUSTO BUSINESS PLAN F16 2015-16

Marketing Management Project

Business Plan F16 of Mahindra GUSTO
in India

Prepared by:
Chandan Kr Mishra

Heena Parag

EPGP-07-026

EPGP-07-040

Territory Business Manager,

Resident Manager

Mahindra & Mahindra

PHD Chamber of Commerce and Industry

1of 12

MAHINDRA GUSTO BUSINESS PLAN F16 2015-16

Introduction:
In India, a two-wheeler is used as a personal/family vehicle or a goods carrier, whereas it is
confined to sports/racing (heavy motorcycles) or short distance shopping (mopeds). As
incomes grow and people feel the need to own a private means of transport, sales of twowheelers will rise. Penetration is expected to increase approximately to more than 25% by
2016. While buying a motorcycle economy is the main consideration in form of maintenance
cost, fuel efficiency.
Mahindra Gusto first indigenously designed scooter with distinctive Italian styling,
advanced M-TEC engine, superior ride quality and Indias first patented Height
Adjustable Seat.

Synopsis:
Creating new benchmarks in styling, performance, ride quality and comfort, the
GUSTO comes with a wide array of consumer inspired technology features:
Height Adjustable Seat: GUSTO is Indias first scooter to offer a patented Height
Adjustable Seat. Now anyone in the family can effortlessly raise or lower the seat according
to their height for a safe and comfortable ride.
Innovations: GUSTO has a host of category-first features like Remote Flip Key, Find-Me
Lamps, Guide Lamp, Bright Halogen Head Lamp with LED pilot lamps, easy Front Kick and
a Quick Storage compartment
Italian Styling: GUSTO boasts of a distinctive, bold, and aspirational style
Performance: It is powered by the high performance, refined 110 cc M-TEC engine with
advanced features such as stronger crankshaft and bearings, high inertia magneto, high
energy HT coil and series regulator to deliver superior power, efficiency and reliability.
Ride Quality: The Large 12 inch Wheels, Front Telescopic Suspension with Air Springs,
Long Stroke Hydraulic Rear Suspension, High Ground Clearance, Wide Wheel Base and
Tubeless Tyres, ensure best-in-class ride quality, safety and stability, even on the toughest
roads.
Available in 3 variants : GUSTO Vx , GUSTO Hx & Gusto Dx.
The two-wheelers market has had a perceptible shift from a buyers market to a sellers market
with a variety of choices. Players will have to compete on various fronts viz pricing,
technology, product design, productivity, after sale service, marketing and distribution. In the
short term, market shares of individual manufacturers are going to be sensitive to capacity,
product acceptance, pricing and competitive pressures from other manufacturers.

All the three segments, motorcycles, scooters and mopeds have witnessed capacity
additions in the last one-year and it will continue in the upcoming period.
While buying two wheeler, economy is the main consideration like maintenance cost,
fuel efficiency.
2of 12

MAHINDRA GUSTO BUSINESS PLAN F16 2015-16

Table I: SITUATION ANALYSIS

ANAYLISIS

Company

Customers

Competition

KEY FACTORS

Mahindra & Mahindra

1.
2.
3.
4.
5.

Youngsters/Students
House lady
Working Lady
Parents
2nd Purchase to Bike

HONDA ACTIVA
TVS JUPITER
YAMAHA ALPHA

Banks & shareholders.

Collaborators

Context/Macro
Environment

Indian Government policies &

world market.

OBSERVATIONS
Mahindra Two Wheelers Ltd. (MTWL) started
with the acquisition of the business assets of
Kinetic Motor Company Limited (KMCL) in
2008. It brings together a combination of
Mahindra
and
Mahindras
automotive
experience of 65 years and its expertise in both
Indian and global markets
Mahindra Two Wheelers new range of
motorcycles Mahindra Centuro and Mahindra
Pantero, designed completely in-house at the
future ready, state-of-the-art Mahindra R&D
Centre. The Mahindra Centuro has won 7
awards.
M&M is seen as leader in Tractor & CV
industry with its channel well distributed in
rural & urban areas.
90% of the scooter market is of 110 cc
segment.
Customers looks to something different
aspect and stylish model along with fuel
economy as a combo offer.
Honda being the major player enjoys the
market with better visibility and customer
trust. Company has energized its Activa with
Activa I to maintain penetration.
a. Two wheeler loans and financing been
done largely by M&M group financial
service MMFSL.
b. With the growth in opportunities of
individual salary led to raise purchasing
power of individuals.
a. The government of India has been
working to reduce subsidies on
kerosene and diesel which will keep
petrol prices more or less same level
promoting 2 W industry.
b. The implementation of the mass
transport system has been delayed.

3of 12

MAHINDRA GUSTO BUSINESS PLAN F16 2015-16

Analysis:
In India, a two-wheeler is used as a personal/family vehicle or a goods carrier, whereas it is confined
to sports/racing (heavy motorcycles) or short distance shopping (mopeds). As incomes grew and
people feel the need to own a private means of transport, sales of two-wheelers will rise. Penetration
is expected to increase approximately to more than 25% by 2016.
The two-wheelers market has had a perceptible shift from a buyers market to a sellers market with a
variety of choices. Players are competing on various fronts viz pricing, technology, product design,
productivity, after sale service, marketing and distribution. In the short term, market shares of
individual manufacturers are going to be sensitive to capacity, product acceptance, pricing and
competitive pressures from other manufacturers.

All the three segments, motorcycles, scooters and mopeds have witnessed capacity additions
in the last one-year and it will continue in the upcoming period.

While buying two wheeler, economy is the main consideration like maintenance cost, fuel efficiency.
M&M after buying Kinetic since 2008 was struggling to create eye catching onto his two wheeler.
With the launch of Mahindra Gusto, market is to get pulled by M&M.

SWOT Analysis:
Strength
1.
2.
3.
4.

Mahindra has been one of the strongest brands in the Indian automobile market
Mahindra group give employment to over 110,000 employees.
Excellent branding and advertising, and low after sales service cost.
Sturdy Gusto with attractive features for Indian roads and off-road terrain.

Weakness
1. Gusto being 1st completely Indian made design of two wheeler by M&M.
2. Brand image of M&M two wheeler has been vague due to poor performance of Rodeo and
other earlier models.
Opportunity
1.
2.
3.
4.

Developing higher CC and fuel efficient with innovative scooters for the future.
Tapping emerging markets across the world and building a global brand.
Fast growing two wheeler market with the diversion more towards scooter.
Growing in the market through Gusto and exist into two-wheeler segments as a major player.

Threats
1.
2.
3.
4.

Government policies for the two wheeler sector across the world.
Ever increasing petrol prices.
Intense competition from global two wheeler brands.
Substitute modes of private & public transport like bicycle, bike, bus, auto etc

4of 12

MAHINDRA GUSTO BUSINESS PLAN F16 2015-16

The Indian two-wheeler (2W) industry registered sales volumes of 13.7 million units in 201415, a growth of 2.9% over the previous year FY 2013-14. Other automobile segments like
passenger car and commercial vehicle (M&HCV), shown de growth due to slowdown in
overall economy. Market sentiments are negative due to high inflation, fuel prices and
interest rates - the 2.9% growth recorded by the 2W industry which is less compare to last
year growth of 14%. Feb 2013. Scooter segment has shown 14.4% growth where Motorcycle
has shown .1% growth only this year.

Scooter segment has shown 14.4 % growth where Motorcycle has shown 1% growth.

Market share of M&M is around 1.3 %.

5of 12

MAHINDRA GUSTO BUSINESS PLAN F16 2015-16

The present scenario has demanded shift of buyers from motorbikes to scooters thus creating
more value to the manufacturer and interest to bring newer segment. The study of M&M to
this market has led him to launch new product named Mahindra Gusto.

There is a strong fluctuation of vehicle choice as per age changes. 30-40 people age group
prefer to buy scooter compare to bikes due to its versatile use.

6of 12

MAHINDRA GUSTO BUSINESS PLAN F16 2015-16

Mahindra GUSTO with its Competitors

The Mahindra Gusto and the Honda Aviator can pack away the largest quantity of fuel, both
storing a full 6 litres. The Yamaha Alphas tank capacity is 5.2 litres, Honda Activa at 5.3
litres and TVS Jupiter, 5 litres.
Keeping abreast of the market, the Mahindra Gusto comes well equipped with a much
required set of telescopic front suspension, with a single monoshock at the rear, just like the
Yamaha Alpha, Honda Aviator and the TVS Jupiter. The Honda Activa lets buyers down in
this department, deploying a set of dated and nowhere near as efficient linked twin-shock
absorbers in front.
The Mahindra Gusto is the tallest scooter among this competition, with the best ground
clearance at 165mm.
The Mahindra Gusto and the TVS Jupiter share the same long wheelbase measurements at
1,275mm. The Honda Activa features the shortest wheelbase of all at 1,238mm. Out of all
these scooters, the homegrown Mahindra Gusto and TVS Jupiter offer larger diameter 12inch wheels front and rear. The Honda Aviator offers a front 12-inch wheel with the option of
a front disc brake, mated to a useful combined braking system. The Yamaha Alpha and
Honda Activa use 10inch wheels.
The Mahindra Gusto is the heaviest of these scooters, a disadvantage in this segment, where
lightness is always going to be a big bonus, but it makes up some ground by offering a
conveniently adjustable seat that can be easily moved 35mm up or down as an option, and
opens backwards with a clever stopper to secure it in place when opened. The Gusto also
features the convenience of an extra front storage bin.
As for pricing, the Mahindra Gusto costs Rs 43,000 for the base version, which does not
come with the option to adjust seat height. The fully loaded Gusto costs Rs 47,000. The
Honda Activa for Rs 49,700, and the TVS Jupiter, Rs 44,250 (all prices ex-showroom,
Delhi).

7of 12

MAHINDRA GUSTO BUSINESS PLAN F16 2015-16

Elements of Marketing Plan

Brand
performance
and
Position in the market
(Compare
Sales, market
share (category /segment),
growth
over
years),
profitability)

Key
opportunities
and
challenges for the brand
(outcome
of
situation
analysis)

Mahindra Gusto

M&M is trusted
name
for
commercial
vehicles but new to
2 W. Enjoys only
1.3 % share in 2W
with
marginal
growth of 0.2 %. Its
last launch in 2W
Mahindra Centuro
has gained good
attractions.

Honda Activa

TVS Jupiter

Honda Motorcycle &

Scooter India Pvt.
Ltd. is the 100%
owned subsidiary of
Honda
Motor
Company Ltd. Japan.
It
started
Indian
operations in May,
2001 at IMT Manesar Stands at 32.7 %
(Haryana) and has MS with range
acquired over 15 of scooters.
Million
happy
customers in its 13th
year of successful
operations.
Today,
HMSI is recognized
as the fastest growing
2 wheeler company in
India

Market is big and

growing at a rate of
26%, poor network
in rural areas.

Newly
launched
Activa I catching new
eyes with its better
mileage.

Multicolour
Jupiter becomes
first choice for
lady customer.

Expected volume
growth of scooters
YOY 30.7% in 2W
Business
Strategy
and
industry with a 2W
Marketing Objectives- 2014industry growth by
15
8-9%. (2W industry
is around 18-20
million units).

Achieved MS of
56.1%
with new
launch of Activa and
Activa I. Focussing
both male and female
customers.

Targeting
college girls and
lady
buyers
multi
colour
scooter
pampered
to
achieve 32.7%
MS.

Comments

Although
well
established brands
are
available,
looking
into
market
opportunities
innovations are yet
to be done on
scooters which can
attract
customer
and gain MS for
M&M.

Existing
opportunities are
explored by settled
player but no one
add
value
to
design,
which
could be USP for
Gusto because of
its unique features.
New launch of
Mahindra Gusto
with its attractive
features will lead
to grow volume
with its existing
channel available
in India.

Current Marketing Strategy

110 cc scooters with
Target Segment(s)
This is the highest
total volume of 3.5 110 cc scooters and 110 cc scooters
( share of brand in different
selling sector of
million
units above
and above.
targeted consumer segments)
scooter.
industry.
M&M 2 W being a
non-contributing
To first get a good
to
industry
Better efficiency
foot hold into the Best quality with
presently it is good
and
mileage
Positioning Statement
market, gain high greater
mileage
thought
of
scooter
with
share and then grow product.
management
to
light weight.
further.
first create a mark
in the market then
to grow further.
8of 12

MAHINDRA GUSTO BUSINESS PLAN F16 2015-16

Note: Mahindra Gusto being a new launch in the market, there has been a business achievement of
10000 units only for FY15 with strategically v launching carried in the year with a planned business for
FY 2015-16

Marketing Program

Product & brand

Management
(analyse product
mix; product/brand
extension decisions
in the past)

Promotions:
promotion mix,
spends (analyse
successful /not so
successful
campaigns for
insights)

Place: Channel
share

Pricing Strategy
(brand extension,
variants and
pricing)

Stylish, smooth high

performance scooter for
generations with
features that are
designed to make every
scooter feel inadequate.

HMSI's marketing strategy

emphasized on offering
innovative products at
competitive prices, novel
promotional campaigns and
developing an extensive
distribution network.

Getting auto and tractor

sector dealers to also
display, sell and service
Gusto.
With series of attractive
TV and paper ads.

Honda is a brand known for

its quality and innovation.
Honda was never into an
aggressive promotional
activities but the company
always tried to maintain the
quality and created a brand
image by providing better
customer service

The company has a

network of over 450
dealers in India, in which
280 are in the northern
region will be promoted
to sell Gusto.
Start a series of TV and
newspaper advertisement
and lot of ground
activities. Plan to spend
around Rs 40 crore on
marketing activities for
Gusto in FY15-16

Strong sales and

distribution network : 114
facilities and in 57 cities
and 51 Exclusive
Dealership. HSCI
dealerships are based on the
3S Facility (Sales,
Service, Spares) format,
offering complete range of
services to its customers

Activa 125 comes in four

colours -- pearl sunbeam
white, midnight blue
metallic, asteroid black
metallic and force silver
The new model will be
metallic. The scooter is
available in two versions available for sale in two
Gusto DX and Gusto VX
variants - Standard and
priced at Rs 43,000 and
Rs 47,000 (ex-showroom) Deluxe. It is priced at Rs
55,679 for Standard
variant and Rs 61,489 for
the Deluxe variant (both
prices ex-showroom,
Chennai).

Focus has been to

constantly provide
freshness to our products
and maximize customer
delight and with TVS
Jupiter increasingly
becoming a preferred
choice in its category,
management felt that it
would be fitting to
celebrate with a special
edition TVS Jupiter
TVS Jupiter is aimed at
male buyers. TVS
Jupiter will focus on selfemployed, businessmen
and traders The Jupiter
has been the scooter of
the year at MotorBeam
because of the value for
money quotient, attention
to detail and fantastic ride
and handling balance.

TVS only needs to

strengthen their
dealership and service
network in key cities and
towns to enjoy a lot more
success.

TVS Jupiter is aimed at

male buyers. It will be
priced at Rs.44,200 exshowroom Delhi.
The launch of the 110cc scooter will make
TVSM a complete
player in the scooter
space

9of 12

MAHINDRA GUSTO BUSINESS PLAN F16 2015-16

Marketing Plan 2015-16

Objective: With the launch of new model GUSTO, M&M plan to place its brand among
trusted and loyal 2 wheeler segment.
a. Against a last year volume of 10000 nos(in Six month after its launch), plan to attain
26000 nos volume.
b. Against 1.1% M.S last fiscal, plan to attain 1.6% M.S.
c. Strengthening 350 nos additional channel network in India.
d. Place Gusto as premium quality scooter among user.

Strategy: Place Gusto to compare with its competitive model of Honda, TVS & Hero and
review made by reporters to post on all social media to get notice USPs of Gusto.
Recently these reviews has helped Gusto to receive prestigious award as
CNBC TV18 OVERDRIVE Viewer's Choice Scooter of the Year.
Few steps to concrete FY 16 plan:a. Mahindra has automotive and tractor dealers in urban and rural areas which is to be
used as subsequent sales outlet for two wheeler. Channel team will work on
strengthening existing tractor & automotive dealer to sell two wheeler including
GUSTO.
b. More Gusto is seen on roads, better branding will get created among customers.
Dealer employees of tractor & automotive could be incentivize in their regular
business achievement with GUSTO.
c. GUSTO will be promoted on social media and online selling thru PAYTM, EBAY.IN
for the first in India for sale thru online facility with features like COD, CC, DC
payment mode.
d. Promote exclusive scooter & bike exchange offer against sale of new GUSTO.
e. Tie up with SRIRAM AUTOMALL to liquidate exchange bikes & scooters purchased
against sale of GUSTO.
f. Tie ups with Local mechanics region wise to ease the exchange liquidation of 2
wheelers under umbrella of new program TECHMASTERS.
g. Monthly events planned at Colleges, High schools to offer test drive at their own
place with launching slogan TEST DRIVE AT YOUR EASE.

10of 12

MAHINDRA GUSTO BUSINESS PLAN F16 2015-16

Month-wise Break up of Gusto Sales Plan F16

Nation

INDIA

Initiator

Area office

29

Approver

Marketing Manager

DEALER AVERAGE PRICE

Rs. 42,000/-

FOCUS MODEL (2 Wheeler - GUSTO)

VOLUME
GUSTO
Month
GUSTO
MANPOWER
(as per F16 Plan)
Sales Executive
T Sales Manager
Engineers
Spare Parts Manager
State Head

F15 ACTUAL YTD DEC'14

IND
VOL
3
0.003

M.S.
0.1%

IND
1

APR
2500

JUN
2500

JUL
2500

GAP

Target Date of Appointment

-25
-20
-15
-4
-8

Jan'16
Mar'16
Mar'16

Exchange

Mar'16

% Exchange

189
112
58
26
38

Available
(till Dec'14)
164
92
43
22
30

Required

Zonal Head

MAY
2500

BG (Rs. Lacs)

F13 PFS (Rs.

Lacs)

1500

3250

F16 PLAN (LACS)

TARGET DATE

2250
Feb-15

3250
Feb-15

SYSTEM IMPLEMENTATION

F15 H1

FINANCE
F15 DEC. CLSG.

(LACS)

GAP PFS FOR

F15

F15 JAN - MAR PROJECTION

VOL
M.S.
0.001
0.1%
F16 MONTH WISE PLAN in numbers
AUG
SEP
2500
3500

ACTION PLAN TO COVER PFS GAP

OWN FUNDS

SOURCE / BANK

SBI

(Lacs)
TARGET DATE

1000
Feb-14

IND
4

Business Head
F15 PROJECTION
VOL
0.004

M.S.
0.1%

IND
5

F 16 PLAN
VOL
0.007

M.S.
0.2%

JAN
2500

FEB
1500

MAR
2000

TOTAL F15
31500

SERVICE REACH

F15 PLAN

Act till DEC

Exp F15 closing

F16 Plan

45%

58%

58%

40%

85%

37%

38%

85%

F14 PLAN

Act till DEC

Exp F14 closing

F15 PLAN

70

57.28

75.09

105.12

10.5

10.68

OCT
3500

NOV
2500

DEC
3500

DSQI

F15 Plan

F15 H-1 Actual

F16 Plan

DSQI SCORE

70

85

90

ITEM SCORE

750

934

934

F14 PROJ.

F15 PLAN

6.0%

20.0%

GAP
COVERED

GAP NOT
COVERED

Doorstep (as % of
jobcard opened)
% Customer complaint
resolved in 48 Hrs
SPARES
SPARE PARTS
(Lacs)
OIL F13 PLAN (K.L.)
REACH

Region

Current Outlets
(F15 till Dec)

Location

14
Dealer Point
(name of
location)

19.89
Target Date

171

Haryana

S
E

213
129

Madurai
Siliguri

Target Date

214

Gandhidham

Nov-15

June'15
June'15

E
S

280
146

Durgapur
Tiruchiplli

Dec-15
Feb-15

1000

-1000

F16 PLAN
13
13

15-Oct

F16 Planned Outlets

MSS Score
MDMS Score
Coverage Ratio

150
75
55%

F15 PLAN
(MONTH)
300
125
60%

Hit Ratio

53%

50%

Business Head

CURRENT
(DEC'14)
6
4

F16 PLAN
275
110
85%

TSM
Engineers

38%

NOTE :

National Head

All units are in

millions

MD

Chairman

Way Ahead F17:

With the total sales volume for GUSTO by 31500 nos from 10000 nos by F16 will lead to
grow MS from 1.1% to 1.6% in India. GUSTO will see two more variants in same section to
retain customers along with promoting model to International regions.

Executive Summary:

With the launch of its feature-rich 110 cc scooter Gusto, Mahindra Two Wheelers, part of the
$ 16 billion Mahindra Group, is planning to reach 1.6% MS with the end of F16. This would
mark the companys entry a way towards gaining a strong foothold of the Indian twowheeler market.
The company already has two bikes, Centuro and Pantero selling in the market and has
recently launched the Centuro Rockstar, a more affordable version of its commuter bike
Centuro.

11of 12

MAHINDRA GUSTO BUSINESS PLAN F16 2015-16

While motorbikes are the volume segment in the two-wheeler space, scooters are growing at
a faster rate. Mr Mishra explained that while bikes have a larger base (selling around 900,000
units per month), the scooters segment is growing faster, at around 20 per cent. Volume-wise
scooters sell around 300,000 units a month, he added.
Further, close to 90 per cent of the automatic scooter market in India are 100 and 110 cc
scooters.
The product has been developed over two years with an investment of close to Rs 65 crore.
With features like adjustable seats, find-me lamps, guide lamps, quick storage compartments,
and priced aggressively at Rs 43,603 (starting price ex-showroom Delhi), M&M expects the
GUSTO to be a runaway hit new fiscal.

12of 12