1. Star Marketing Spend Effectiveness
Students
Kent Van Horn
Dan Schwartz
TVS Mentors
Sourav Das
K Subramanian
NV Saikumar
Krannert Faculty
Suresh Chand, PhD

2. Who Are We?
Kent Van Horn
Kent is a junior economics student at the Krannert
School of Management. He is also majoring in
Management.
Dan Schwartz
Dan has completed his first year of the MBA program
at the Krannert School of Management. His
Concentration is in operations. Previously, he worked
as a project manager at General Electric and as a
consultant at Total Quality Logistics, a 3rd party logistics
provider.

3. Lets Look at the Agenda…
Industry Analysis
Traffic vs Retail Sales
Head Effectiveness
Problem
Indore
Recommendation

4. What is the Problem? StaR Sales Decline
Average of 500 less sales per month for the last 3 years
Unclear Effect of Promotion
Many different promotion methods used
Results of promotions unclear

5. Two Wheeler Economy Segment

6. Agenda Industry Analysis Traffic vs Retail Sales Head Effectiveness
Problem
Indore
Recommendation

7. Marketing Microenvironment
Customer
Mass market economy
Favors fuel economy
Finances
Competitors
Hero Honda
Bajaj
Collaborators
Dealers
Suppliers
Company
Largest volume product for TVS
35-40 thousand sold per month

8. Economy Segment Marketing Mix
Product
Star City
TVS Sport
Price
Rs. 36,000 onwards ex showroom
Rs. 34,000 onwards ex showroom
Placement
Retail Dealers
Sub-Dealers
Promotion
Many Sales Promotions
Discounts, Rebates
10+ Advertising Schemes
ATL-TV, Print, Radio
BTL- Demos, Activations

9. Market Segmentation Economy Segment <40,000 Rs ex showroom
15-49 years old
2 million bikes per year
Decreased in due to economy
Increasing again in 2010
Buy Decision
Price
Fuel efficiency
High durability
Specs not important

10. Who is Our Target Group?
TVS StaR City
Male, 25-35
Married
Self employed
SEC BCD
TVS Sport
Male, 20-30
Unmarried
Salaried/Self employed(2nd Generation)
Key Takeaway: TVS Sport targets a younger, wealthier market

11. Situation/Opportunity Analysis
Strengths
Brand awareness
Reliability
TVS brand name
Weaknesses
Price point
Fuel economy
Limiting design
Price conscious consumers
Opportunities
Sell on reliability
Differentiate from competitors
Threats
Quality not perceived by customers

12. Macro-Environment Environment Economic Tightening Lending Policies
Threat
Opportunity
Economic
Tightening Lending Policies
Growing Middle Class
Demographic
Socioeconomic Shift
Uniqueness
Target
Political / Legal
Environmental Regulation
Government Incentives
Technological
Obsolescence, Alternative Power
Incremental Product Modification
Sociocultural
Demand for Cars
Dissatisfaction with Public Transit
Global
Joint Venture or Import
Export trade with Pakistan

13. Market Analysis Key Takeaway: Concentrated market with few players
Hero Honda
Splendor
Reliability
Undifferentiated
CD Deluxe
Value
Bajaj
Platina
Fuel Efficiency
TVS
Star City
Toughness
Lasts a while
Sport
Sporty
Key Takeaway: Concentrated market with few players

14. Market Analysis
CD Deluxe
Splendor
Star City
Plantia
Sport
Key Takeaway: TVS products are differentiated in this segment

15. Agenda Industry Analysis Traffic vs Retail Sales Problem Indore
Head Effectiveness
Problem
Indore
Recommendation

16. Look at the Distribution Channel
TVS
Dealer
Customer
(Urban)
30%
Sub-dealer
Customer
(Rural)
70%
Margin split 50/50 between dealer and sub-dealer

17. Comparing Retail Sales Vs. Traffic
Key Takeaway: Retail Traffic and Sales are closely related.

18. Agenda Industry Analysis Traffic vs Retail Sales Problem Indore
Head Effectiveness
Problem
Indore
Recommendation

19. Head Effectiveness
Regional spend compared to sales: Correlation = R2 Highly correlated spends have highest effect Y=m x+b Positive m values indicate sales increase Negative m values indicate sales decrease Both advertising and promotion

20. Brand vs Promotion

21. Brand vs Promotion

22. Weighted Sales Method to compare sales:
Weighted Sales = 0.5 x Month n Sales + Month (n+1) Sales x Month (n+2) Sales x Month (n+3) Sales

23. West Bengal Regression Analysis
Key Takeaway: Print, advertisements, demos and hoardings appear to increase sales. There is a strong correlation between all India sales and West Bengal. Too many variables makes a difficult to use model.

24. What About Tamil Nadu?
SUMMARY OUTPUT
Regression Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations 8
ANOVA df SS MS F
Significance F
Regression 2
Residual 5
Total 7
Coefficients
t Stat
P-value
Lower 95%
Upper 95%
Lower 95.0%
Upper 95.0%
Intercept
E-05
Weighted TV
E-05
E-05
Press
E-05
Sales = x Weighted TV Spend x Press
Key Takeaway: For every 1500 Rs. Spent on press, TVS can expect one additional sale. Combining variables leads to a cleaner model.

25. Purdue Item Indian Foreigner Dan Taj 20 750 N/A Rickshaw 30 90 150
Spice
Flaming
Mild
Ketchup
Food
Naan
Rice
McDonald's
Travel
Bus
Honda Civic
Drink
Tea
Coffee
Beer

26. Opportunity Breakdown
Key Takeaway: TVS Star City and Sport are Economically Inferior goods that decrease in sales in wealthier areas. There are some areas where there is opportunity for more sales.

27. Opportunity Breakdown
Delhi
Key Takeaway: 73.2% of the sales in TVS City can be explained by its linear relationship with total market segment sales during that month. For every 9 products the market increases, 1 TVS City sale is expected.

28. Opportunity Breakdown
Key Takeaway: Uttar Pradesh, West Bengal and Andhra Pradesh all have very high potential for future sales.

29. India Promotion Regression
Diwali

30. India Advertising Regression

31. Agenda Industry Analysis Traffic vs Retail Sales Problem Indore
Head Effectiveness
Problem
Indore
Recommendation

32. Primary TVS Dealership
Our Trip to Indore!
Field Study to Indore
Indore Consumer
Sub-dealership
Primary TVS Dealership

34. Indore Consumer Feedback
House 1
House 2
House 3
Which bike do you own?
Splendor
StarCity
Why this bike?
Mileage, road presence
Mileage, max load
Mileage, bad TVS experience
What adds have you seen for Star City?
TV: Cricket Star, MS Dhoni Print: Paper and Magazines
TV: Cricket Star, MS Dhoni heavily influenced Print: Paper and Magazines
Print: Paper and Magazines
What do you think of the promotional gifts?
Good, but not enough to influence decision
Liked them, but not ecstatic about them
Not impressed
Key Takeaway: Customer perceived mileage is key.

35. Diwali>Wedding Season
Sub-Dealer
Store Traffic?
6-7/day
Average Sales?
52/month, 62 YTD
Pay Cash First Visit?
25%
What Impacts Sales?
Diwali>Wedding Season
Is Price a Factor?
TVS Fixes Prices
Star City Sales?
75-80%
Stockout Loss?
2-4/month

36. TVS Primary Dealership
Customer Service
Greeted within 1 minute
Follow up calls
Green/Pink cards
Repairs
300 Rs. Profit per bike repair
repairs per day
10-20 service bays

37. Misaligned Priorities?
Top 3 Features that Affect Purchase Intent
Party
Primary
Secondary
Tertiary
Consumer 1
Mileage
Road Presence
Power
Consumer 2
Maintenance
Max Load
Consumer 3
Sub-Dealer
Strong Sturdy
TVS Primary Dealer
Looks/Image
Brand
Key Takeaway: Customer perceived mileage is key although dealers focus on other selling points.

38. Summarizing Our Findings
Sales based on perception
Wedding season increases sales
Sub-dealer closer to customer
Customer needs misunderstood

39. Agenda Industry Analysis Traffic vs Retail Sales Problem Indore
Head Effectiveness
Problem
Indore
Recommendation

40. Recommendations Untapped Markets (West Bengal) Increase Spend
Sponsor Dealerships
Too Many Advertising Heads Used
Reduce Number
Increase Demos
Consumer Perception
Educate Consumer
Below the Line

41. Recommendations Improved Customer Perception Capture Untapped Markets
Improved Head Selection
Increased Sales

43. TVS StaR Targets SEC-BCD