Return to Previous Page

TVS 50 (Mopeds!) with 100% Market Share, 0% Growth Rate: TVS Motor’s Mojo?

CASE STUDY, MARKETING MANAGEMENT
ET Cases, 13 pages

Case Preview

TVS 50 (Mopeds!) with 100% Market Share, 0% Growth Rate: TVS Motor’s Mojo?

 

“Focus area has to be the entry-level segment. The bottom of the pyramid is where the money is.”1


– Venu Srinivasan, Chairman and Managing Director, TVS Motor Company


In 2010, in an interview, Venu Srinivasan (Srinivasan), the Chairman and Managing Director of one of the largest two-wheeler manufacturer in India, TVS Motor Company Limited (TVS), said that TVS would focus on the rural market and the entry level segment in the years to come. However, by November 2012, TVS slipped from its long time number three position in the Indian two-wheeler (2W) industry to number four position. Despite the company’s poor performance over the years, its mopeds remained the star performers.

TVS launched India’s first 2-seater 50cc moped (motor+pedal) in 1980 and it is credited with making the category popular, though Kinetic Engineering Limited launched India’s first moped with a single seat. TVS 50cc moped, popularly called as the TVS 50, sold more units than the other two product lines (motorcycles and scooters/scooterettes) of the company. Without much modification since the time it was launched in 1980, the trend-setter-moped became a popular mode of transportation in Indian towns, particularly in the southern states of the country. By 2000, 62% of its sales were from South India, 27% from Western India and the remaining from rest of India. After 35 years of untiring journey, the moped product line contributed 39.8% to TVS’ total two-wheeler sales by volume in financial year 2012-2013. Moreover, within the Indian two-wheeler industry, motorcycles’ sales constitute 76% (119.5 lakh units), ungeared scooters sales constitute 19% (30.1 lakh units) and the remaining 5% (7.9 lakh units) sales were contributed by mopeds. And the entire moped share is contributed by TVS’ mopeds.2

...........................................

 



  • 1 Shereen Bhan, “TVS Motor to focus on rural market, entry-level segment”, http://www.livemint.com/Companies/OYqYHeZLXndfh9eXI8bw6L/TVS-Motor-to-focus-on-rural-market-entrylevel-segment.html, January 11th 2010
  • 2 “TVS Motor Company Limited – Twenty First Annual Report 2012-2013”, http://www.tvsmotor.in/pdf/21st-Annual-Report-2012-2013.pdf

Teaching Note Preview

TVS 50 (Mopeds!) with 100% Market Share, 0% Growth Rate: TVS Motor’s Mojo?

 

Prerequisite Conceptual Understanding

Prerequisite Conceptual Understanding (PCU) material is the background material that would aid immensely in mapping the decision areas of this case study and bring a synthesis amongst the relevant concepts. The participants/students should be encouraged to read this material to benefit from the broader perspectives outlined in the case study.

This case study presupposes conceptual understanding of the following. A working knowledge along with the business implications of the following concepts would enable an effective discussion leading to more practical solutions than a mere intellectual exercise.

  • 1. A working knowledge and business implications of STP (Segmentation, Target customers and Positioning), Product Life Cycle and Brand Life Cycle
  • 2. A conceptual understanding of Blue Ocean Strategy1
  • 3. PCDL Model’s article2 – to understand the brand building strategies using PCDL model

 

Synopsis

Although the company, TVS Motor Company Limited (TVS) is not faced with the dilemmas proposed in the case study, the available facts have been constructed to enable an interesting discussion around the managerial dilemmas proposed in this case study. Accordingly, the discussion has to be steered towards finding the logical and most pragmatic choices. The class should be driven towards this end.

It is about 35 years since India’s first ever 2-seater moped, TVS 50 was launched and these 35 years saw seven product line extensions. With changing times, the parent company, TVS Motor Company Limited, moved on with introducing motorcycles, scooters and scooterettes, but its claim-to-fame in the Indian two-wheeler market, the trendsetter, TVS 50, hadn’t been given a well-deserved makeover. Some question, when old (classic) songs, movies and characters are repositioned for the changing times, why not TVS’s moped? Does it have the potential to be repositioned?

Expected Learning Outcomes

This case study would help in achieving the following learning outcomes:

  • • Understand the evolution of TVS 50 (Mopeds!) as a category killer in moped segment in Indian two-wheeler industry and analyze the factors that contributed to its success
  • • Review TVS 50 moped’s product life cycle and brand building strategies and analyze the efficacy of those strategies with the help of PCDL model
  • • Discuss and debate on whether it is economically viable for TVS 50 moped to reposition itself to make the brand more relevant to the changing times? Is there a latent blue ocean for mopeds in the Volatile Uncertain Complex Ambiguous (VUCA) times? How to create a blue ocean strategy for a semi-retired brand?

 

Assignment Questions

The ensuing discussion and analysis broadly answered the following questions that would help to achieve the three pedagogical objectives as stated:

  • I. What do you understand by product life cycle and how do you think TVS Motor Company Ltd. managed TVS moped’s product life cycle?
  • II. Why was it that TVS continued with mopeds product line despite the upsurge in demand for 4-stroke motorcycles and scooters?
  • III. ....................

 

...................


$4.22
Rs 0
Product code: MKTG-1-0023, MKTG-1-0023A

Abstract


This case study enables a discussion on how to revive once-upon-a-time category killer, TVS 50 Moped, given the market and innovation potential. Although it was Kinetic that launched India's first ever moped (motor + pedal), with its single-seater Luna, it was TVS 50 that made the category popular with its cult-like following in 1980s. However, with liberalization and lifestyle changes, TVS 50 Moped's brand is in danger of becoming a relic.
Should it stay relevant or should it become a relic? Should TVS Motor Company Limited (TVS) plan to extend the lifecycle of the moped by appropriate repositioning? Should it be repositioned more for young women from urban areas? In pure numbers, TVS 50 family (TVS XL, TVS Champ, TVS Superchamp, TVS XL Super and TVS XL Super Heavy) accounts for almost 40% of total sales of TVS with no new plans to increase the penetration. Can TVS 50 be a game changer for TVS? With 100% market share in mopeds, should TVS reposition its mopeds to reinvent itself?



Pedagogical Objectives

  • To understand the evolution of TVS 50 (Mopeds!) as a category killer in moped segment in Indian two-wheeler industry and analyze the factors that contributed to its success
  • To review TVS 50 moped's product life cycle and brand building strategies and analyze the efficacy of those strategies with the help of PCDL model
  • To discuss and debate on whether it is economically viable for TVS 50 moped to reposition itself to make the brand relevant to the changing times. Is there a latent blue ocean for mopeds in the Volatile Uncertain Complex Ambiguous (VUCA) times? How to create a blue ocean strategy for a semi-retired brand?



This Case Pack Includes:
 - Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)
$4.22
Rs 0

Related products




Request for an Inspection Copy

(Strictly for Review Purpose, Not to be Used for Classroom Discussion/Trainings)