Case study is about the lauch of Reva car into the market without marketing strategies and later on facing the consequences

2. Case Facts
In early 2001, news magazines and papers started publishing
articles of a battery driven car under manufacture at ‘Maini
Industries’.
Maini Industries was known to supply precision mechanical
components to M/s Bosch

Later on started making material handling equipements like trolleys,
battery operated mobile trolleys.
Transformation of the company from SSI units to pvt ltd company
with about 18-20 years of market presence.
 Mr Sudshan is the chairman and his son Chetan is the MD OF Maini
Industries
 Chetan has studied in USA andit was in his stay at USA that he did
his project work on electric car and hence the passion to do it on
commercial scale caught up.

3. Availability of cars in India in 2001
Segment Car models Approx.share of the
total
1. Economy
(upto 2.5 lac/car)
Maruti 800, Maruthi Van,
Premier Padmini
45%
2. Mid –Range
(2.5-4.5 lac)
Zen, Flat Uno, Santro,
Matiz, Indica
25%
3. Luxury Cars
(4.5 lacs-10 lacs)
Ceilo, Esteem, Baleno,
Honda City, Ford Ikon
20%
4. Super Luxury Cars
(Above 10 lacs)
Sonata, Mercedes Benz 10%

4.  Reva prototype were made and displayed in Bangalore, Delhi and
Mumbai
Size was very small, two doors, two children and two adult seats
with negligible baggage space.
 Big Batteries were used to power the vehicle and batteries needed
to be re- charged every 80 km.
Vehicle makes too much noise and looks like a big toy model

5. Car advantages according to the companies MD chetan:
 It is environmental friendly due to zero pollution
It is meant for scooter users, housewives, retired people and
students.
It requires very less parking space and hence city people prefer it for
narrow roads and easy parking
People prefer to keep it as a second car for use by family members.
Due to zero pollution and it will get tax benefits and hence sales will
boost
Since its price will be around 2.o lac people wont hesitate to buy.

6. Consumers Complaints:
Frequent battery charge is nuisance
Slows down when the battery is in recharge stage
Too high cost for its worthiness( 2.20 lacs)
Friends didn’t appreciate it
Battery is too big and
Noise is irritating

7. Reva’s performance in the market:
 Reva’s sales volume didn’t increase though the total number of cars
sold was increasing steadily
Reva could not be sold only on the economy friendly tag
The sales per year was only 200 Nos instead of 2000 Nos. planned by
the company
For all makes, in 1994 total 2,10,000 cars were sold and this rose to
total 5,90,000 Nos. in 2001
All others sales increased except Reva

8. Chairman’s Strategy:
 Didn’t feel necessary to do any sales promotion to push the sales
He felt it will sell automatically due to its environmental reasons
Friends and consultants suggested him to advertise and organize
product demonstrations to get publicity
MD tried to get new battery and making some cosmetics changes to
attract customers.

9. QUESTION AND ANSWERS
Q1. Explain the development of Reva from technology point of
view
• change the battery
•Increase the size
•Redesign
•Change in interior

10. Q2. Do you feel market survey, market share, and pricing
factors were neglected? If so how you would have solved it
Yes
Initially the price of car was 1 lakh but when the car was
actually sold
become 2.2 lakh
• the chairman of reva did not do any sales promotion to push
the product

11. Q3. So far there is no competitor to economy model of Maruthi
800 car. Explain reasons for this.
 maruthi was the market leader.
45% of total share in market.
 reasonable price.
Targeting middle class people.