Tata Xenon Second Innings

TATA Motors launched TATA Xenon, a lifestyle premium pickup truck for sale in Indian Market on 25^th Feb 2009 at an ex show room price of Rs 7.62-8.58 Lakhs in Delhi. Intended customer segment was customer buying premium pickup trucks, a segment which did not exist. Prior to launch in India Xenon was being sold in South East Asia, Thailand and European countries and had achieved a good 6000 units of sales. TATA Xenon could not repeat a similar story in the Indian Market although getting good reviews from auto enthusiasts and experts. After almost 21months of its launch the marketers could not sell more than 2000 units, in a pickup truck market of about 230000 units per year and an UV/SUV market of roughly 100000 units per year. From above figures we can surely say that Xenon failed to make its place in the Indian Automotive Industry. Was Xenon not fit for Indian customers? Was it ahead of its time in addressing a segment which never existed? Was there any flaw in the launching and marketing strategy of Xenon? What strategies shall marketers and strategists at TATA Motors follow in order to revive Xenon? In our report we would try to answer these questions by analyzing Indian Market, Marketing customers and strategy of Xenon.

Let us start with analyzing marketing strategy implemented by marketers of Xenon

PRODUCT: Xenon is a five seater lifestyle Pickup truck, with better features like, power window, power steering and HVAC system etc. than its competitors like M&M Maxx, Force Ltd’s Trax, TATA 207DI offered to the customers. Xenon is good on any kind of roads or no roads. Also the vehicle is not able to walk the talk of being a premium pickup as it lacked basic safety features like airbags which is a must, ABS, poor back row seat, while the good thing is it being highly customizable with canopies, railing at the roof, . Xenon has more features than a regular Pickup truck and less features when compared to a UV/SUV.

PLACE: Xenon was retailed through 58 passenger car dealers in 39 Indian cities. The problem here was TATA motors put Xenon at a passenger car dealer along with other easily sellable cars like, Indica, Indigo, Safari, Sumo, Linea, Punto and Vista. All these cars had their own market segment, proven track record and required least efforts from the dealer to make a sale, while the same sales person would face difficulty in convincing customers to buy a pickup for their family. In India a normal middle-class family travelling in a pickup truck is not a frequent scene. Why would a dealer put its effort in selling a newly launched vehicle which was struggling to find a segment for itself, while there were easy options available to get more profit?

PRICE: Xenon was launched in two variants in 2 wheel and four wheel drive at price of R 7.62 Laks and Rs 8.58 Lakhs ex showroom Delhi, which was approximately 40% higher than existing pickup trucks in Indian Market. People buying a pickup truck in India generally use it for commercial purposes and are price conscious. Xenon’s price was at par with SUVs like Mahindra Scorpio and Tata safari. The marketers from TATA were not able to communicate the extra value that Xenon could provide than a Scorpio or a Safari to the prospects effectively.

PROMOTION: Marketers and the ad agency did the maximum damage in this category. They faltered in conveying Xenon’s segment and category to the customers, whether it was just a pickup truck or SUV/UV. This confusion was very much evident from the tag line “Fits no Label” of Xenon. The marketers of TATA themselves were not clear about the segment they wanted to put Xenon in. The adage ‘ Have one’s finger in many pies’ is not relevant to market positioning since targeting many people is targeting no one at all.

Apart from facing problems in all 4 Ps there were some other factors too. Although every new product which tries to create its own segment need to have points-of-parity (POPs) and those that lacks PoPs has a recipe for disaster since the customer does not know where to associate the product in his cognitive space. In this case the intended segment is directly borrowed from the US, the biggest market for pickup trucks in the world. Such a segment and the lifestyle does not exist in India, The regular pickup buyers won’t buy it for its higher prices and the SUV/UV buyers wouldn’t be fascinated because of its lack luster interior aesthetics, safety features and lack of comfort when compared to the present SUVs. We can say that Xenon was launched ahead of its time or atleast in the wrong time of the economic slowdown for the segment it was intended to appeal.

In the following part of this report we have found out the opportunity available and marketing strategy that could give Xenon a second Innings.

SWOT ANALYSIS

Strengths: Looks (Attitude), Size, Engine, All terrain, 4x4 drive, Handling, customisability

Weakness: Interior, Safety measures, Wheels, similar parts of other vehicles, Price, Lifestyle Vs Pickup

Opportunities: Option to create new segment, First mover advantage, presently only one competition in the form of Mahindra getaway.

Threats: Misunderstanding of position of Xenon due to lack of Point of Parities. Lifestyle Pick-ups are new for Indian Consumers

NEW MARKETING STRATEGY: Tata’s have two choices to make here.

· Either they can move down the commercial segment – they lose the advantage of looks, attitude, need to bring down price, unattractive segment due to large competition

· Or they can move the product up into the luxury space – better interiors, more safety features, Richer feel, association to out-door adventure, more options for accessorization.

We would suggest moving towards luxury, lifestyle as per the original intention.

WHY?

Xenon has the potential to move upward. Also Pickups being primarily vehicle used by Americans, converting the youth of India would be easier than a person looking for Pickups for business purpose. Also consumers need to be educated on the Pick-up truck usage so that they build right kind of image of Xenon in their mind and become willing to pay a premium. The Xenon should lose the association to truck through enforcement and be more associated with UV/SUV’s.

WHO?

The Brand association needs to be with Sophistication – young successful people who enjoy their time off, adventure – camping, off-road trips, mountaineering, hiking etc., with manhood- macho personality. Showing ads where such people drive the Xenon enthusiastically would not only create the lifestyle value in the cognitive space of the perceivers but also create the need to differentiate from the Sumo’s, Scorpio’s and Safari’s of this market and create its own segment.

HOW?

The target customers should be go- getters, high-level, young-at-heart adventure loving people who love trekking and to go off the road, people with hunger for power, rather than targeting the high level farmers who would use it as a pickup truck for their commercial purposes.

When Xenon is advertised, it needs to be shown off with complete accessories road terrains, highways, etc where it can be shown as the dominator of the roads, demanding respect, showing other small cars out which would be the ego booster for the rider. Involving Xenon in the Racing teams of off-road tracks like Himalayan Rallies and adventure would establish clear perceptions in the mind of the customers.

TAG LINES

‘Why Live a Half-Life?’

Half-life refers to the usual boring professional life where home-office-home is routine. Adding vigour to lives by adding Xenon arouses the second life and the other half of the personality. This essentially persuades the desired customers to change their lifestyle and also creates the Brand personality to be associated to the people who come in a Xenon. The Half-Lives would be those who use sedans and Small cars – essentially the crowd, and this image would help to rise above the rest.

‘Run Anywhere Fun Everywhere!’

Simply put take your Xenon to any kind of terrain on road, off- road, you will enjoy the experience.

SOME SUGGESTED MEASURES

· Launch the vehicle under the UV/SUV category in tier 1 and 2 cities.

· Establish good relations in the social media.

· Follow online forums like BhP, Indian automotive etc. to provide accurate and expert feedback to the enthusiastic, inquisitive mind. Satiating the hunger of knowledge of people will definitely pull them towards the product. Any marketing strategy should be backed by the feedback to measure the Brand appeal. Feedbacks should be followed on personal basis. Developing relations with the customer will definitely help in long term.

· A ‘Xenon family’ shall be started on social media forums like facebook, twitter etc. The family of persons owning or desiring to own Xenon. Let the customers bond among themselves and feel superior.

· Special sales training to dealers is a must. Special sales based incentive for dealers.

· Sponsor Himalayan rallies.

MEASURES OF SUCCESS OF THE PROPOSED STRATEGY

· Awareness-Increase in number of enquiries about Xenon online and offline.

· Brand Inclination-Number of people joining the online ‘Xenon family’.

· Category development Index, Brand Development Index, Product development Index.

· Number of entrepreneurs showing interest to get dealership of Xenon.

· Brand recognition and recall after conducting survey for the same.

· OFCOURSE, THE SALES FIGURES.

ALL THE BEST TO XENON

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RP And Jha