VESPA - A New Beginning

Posted in Marketing & Strategy Articles, Total Reads: 1466 , Published on 05 January 2013
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The nostalgia of the 60’s is back, flamboyance and chic are in play, it’s the time for VESPA. Remembered as the flagship scooter of the tie up between LML and Piaggio during the 90’s,it was the second largest player with a 28% market share. In 2012 scooters segment is saw the most growth, the average middle class of the country prefers scooters as a secondary vehicle along with a four-wheeler especially for the women in the family.

 

Looking at the above scenario, Piaggio has played their hand perfectly in launching Vespa TVC. Creating vintage romance in retro style they have created a very charming campaign putting their point across with a colorful zest. Its simple yet elegant, it’s the old Vespa reminding you of the paved streets of Rome, or the lip smacking hot pizza. A perfectly well made advert for the urban youth correlating to the premium pricing of the Vespa.Also thisprice of the scooter drives it into a niche segment and not a mass product, but more of a lifestyle brand.

The effect of this TVC might not cause ripples for low cost rivals like Honda Activa, Suzuki Access, TVS Scooty Pep+ and Mahindra Duro .Piaggio has promised to come out with a mass market offering late next year. Even if the salesmight be low, this has built tremendous brand equity for Vespa and a positive step towards long run sustainability of the brand. People have started talking about it, a definite win for this new entrant.

The company produces the scooters at its facility in Baramati, Maharashtra, which can produce 150,000 units a year. Plans are afoot to double capacity in a year’s time. Piaggio has invested €35 million (around Rs 243 crore) in the facility and plans to put in an additional €20 million to augment capacity. With the on-road price going to upwards of Rs. 66,000 it is definitely not a sustainable strategy, while the market is very competitive, only certainty in the scooter market is growth.

Where could have Vespa done better, they hit the nail with the appeal but I feel, the growth for this segment lies in the young women who should have been the target. The colors offered would also appeal to girls, it is definitely considered a feminine product in the Indian market. The biggest boom for scooters was the Priyanka Chopra TVC ‘ Why should boys have all the fun ‘, targeting the correct segment and racking up sales for Hero Honda. We need to wait and watch, the future of this brand. But Piaggio has made a wonderful start to their Indian journey.

If you are not prepared to be wrong, you’ll never come up with anything original” -Sir Ken Robinson

This article has been authored by Apurv Mehta from IMT Ghaziabad


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