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Reasons for Re Launching Electric Car – Reva

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Reasons for Re Launching Electric Car – Reva Introduction : The Reva Electric Car Company (RECC) was founded in 1994 by Chetan Maini, as a joint venture between the Maini Group of Bangalore and Amerigon Electric Vehicle Technologies (AEVT Inc.) of the USA.The company’s sole aim was to develop and produce an affordable compact electric car.

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Several other automakers were also aiming to do so, but in 2001 RECC launched the REVA Reva, started off with a bang : The first electric car in India and the people behind the car were confident of the success of the car.

Plans were set and the forecasting team estimated that 1500 cars would be sold by the end of the first year. Three years after its launch, Reva barely managed to sell a total of 300 cars. Reva was subsequently pulled off Indian markets. On May 26th 2010, Mahindra Group bought a 55. 2% majority stake in Reva and now has plans of relaunching the car in Indian markets. This article explores reasons for the failure of Reva and what should be Mahindra Reva’s Strategy for achieving success in the Indian market. * Reva was positioned as a “Green, low operating cost car”.

The marketing strategy when Reva was first launched mainly concentrated on the car being green and the first of its type in the electric car segment. But this was not enough to create ripples amongst the consumers. * With a small size, easy to drive (no clutch or gear) and slow speed, Reva was targeted at small families, old couples and female drivers. While Reva had a beneficial cost proposition of only Rs. 0. 40 paise per km travelled, it was not a cheap car. Priced at around Rs. 3. 75 lakhs, people would have preferred to purchase a Maruti Zen or an Alto which are within the same price range.

The major problem with Reva was that it was perceived to be a low cost car, but it was actually not. Also it was not a car that the rich wanted to buy, as it looked below their league. In one word, Reva, was a total misfit. * Aesthetically, Reva did not appeal to the youth. It was not fast, did not have a high range, had high maintenance problems (100 % charging needed 8 hours) and was not meant for long drives. The small car space and the design made it look like a rather uncomfortable car. People do advocate being green but they are not willing to sacrifice their comfort for it. * The arketing campaign for Reva also was not an aggressive one. The car made news for itself for being the first electric car in the Indian market but no marketing effort was made to create ripples in the customers. The buzz through promotions and advertisements was very low. There was no excitement and curiosity created in the minds of the consumers before the product launch. A research done by me amongst 50 female drivers, 35 elderly people (50+ age) and 20 couples has helped me come up with the following customer value hierarchy for a Car: 1. Core benefit: Takes you from one place to another without an inconvenience. . Basic product: Easy to drive, comfortable seats and leg room, high mileage. 3. Expected Product: Safety, does not break down, easy to repair. 4. Augmented Product: Speed, smooth on road, Stylish. 5. Potential Product: Environment friendly. As seen the points bolded in red font are the ones that Reva clearly misses. Not being able to satisfy the core, basic and expected product benefits has been a major miss in the marketing strategy of Reva. If Reva has to be successful it has to first cater to these customer benefits, satisfy them and then only will being environment friendly be a product differentiator.

Reva had expected to sell around 1500 cars in its first year itself. After 3 years, Reva managed to sell only about350 odd cars. This is a definite failure in the first innings of Reva. However the fact that it is the only one in the electric car market, a proper marketing strategy can help it become a success. Reva’s Second Innings: A Re-launch Strategy It is not like Green cars are boring and cannot be successful. Take the example of Roadster Tesla an electric car which is the coolest and one of the most aspired cars in the automobile market. So surely there is no reason for Reva to fail if it is marketed in the right way.

If the car is able to satisfy the core, basic and expected benefits of its target audience then we have a winner on our hands. In today’s, Global warming era. Being green is in fact the in thing. But just Green Cannot Sell. Reva should market itself on its other facets as well. Consider the slogan below for marketing Reva: Reva: “Easy to drive, Stylish, Comfortable Car … By the way, we are also Green” The easy to drive attribute is already present in Reva. Reva needs to do slight alterations in its design to make it look more stylish, ergonomically designed for seating and safety needs.

As given in the figure above, Reva should look at targeting the growing female car owners. Also it should target the young and old couples, who find the cuteness factor in the car, exciting enough to purchase it. Reva should be promoted as a “Fun” car to hang out with. Promotions The Reva advertisements should not hire any stars to advertise it. Instead it should look at taking the common office going man, the girl next door, the college couple to brand it. This will ensure that its target audience connect to the advertisement and Reva to a greater extent.

The greenness in Reva can be subtly highlighted in the advertisements. The promotion ideas for both print and television advertisements are: 1. The office goer: How because of heavy traffic he used to reach late to office and get reprimanded by his boss. How now Reva has made him reach office in time and get promotions. Catch line: “Traffic problems. No Problem. Reva is here” 2. The girl next door: How Reva has made her independent. Highlight the ease and comfort of driving the car in the advertisement. Catch line: “Get Independent. Do The Reva” 3.

The lovebirds: A part by part ad series in which an old couple get nostalgic on how they started their love story in a Reva and their memories associated with the Reva car. Highlight the comfort of the Reva car. Catch line: “Reva getting you closer” Social media promotions – Low cost and high effect. 1. Social gaming applications in which users play a car racing game and get green credits for using the Reva Car. This will help spread the Reva brand virally. 2. Get expert reviews on the Reva car and publish them on the Reva Blog. 3. Have a contest in which users can upload their Reva moment on YouTube.

Also upload YouTube videos to show how Reva makes a greener world. 4. Have, “The Spacious Reva Contest”: Customers try to fit in as many of their friends in a Reva car and upload a picture of it on Facebook. The one with maximum likes would win the contest. 5. Listen to what your customers are saying about Reva, how are they feeling about Reva? Have you managed to create the right buzz? Social media would tell you instantly and help you to do any kind of damage control if necessary. The social media is a good measure on how well your marketing strategy has worked.

In conclusion , Reva has already in its “First Innings”, highlighted its attribute of being a Green Car. The “Second Innings” strategy that has been mentioned will market Reva as an easy to drive, safe, stylish and comfortable car. Thus satisfying the core, basic and expected needs of its customers which will help the Reva car become a success story. While the Mahindra brand name and its distribution network and capabilities in the Indian market should definitely benefit Reva, in having a successful second innings. The strategy outlined above should help Reva preventing burns and scars the second time round.

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