Launch of electric scooter

By OLA

JULY 16

OLA
Authored by: Mohamed Naieem

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Executive Summary

OLA Electric scooter

This assessment analyses the product launch of Electric scooters by OLA in the
Indian market.One of the most selling segment of motor industry is scooters.
OLA has been into the segment of cabs based in India,Australia, UK and New
Zealand since 2015. There has been lot of investment from investors all across
the spectrum in to the startup. How ever, there are concerns regarding the
future growth in the new market segment of Electric scooters.

The new market segment of Electric scooters has a big potential in not only
Indian market but also across the world. In this report we will analyze the
market strategy to be adopted and How the company can transform itself into a
market leader using the market techniques followed by other Global Giants and
distinguish itself.

The marketing strategy adopted by Ola like differentiation and marketing mix
will be analyzed. How it plans to grow into US $1 Billion company. Lastly, the
product offered and the services in offers will help in future growth.

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 TABLE OF CONTENTS

1 Introduction …………………………………………………………………………………5

2. Introduction to the company……………………………………………………………….5

3.Analysing the current Business Model……………………………………………………..6

4.SWOT & VRIO Analysis……………………………………………………………………6

5.Marketing Objectives………………………………………………………………………..8

6. Market and Competitor analysis…………………………………………………………..9

7.Strategic Marketing approach……………………………………………………………..11

8.Marketing Mix………………………………………………………………………………12

9.Recommendation……………………………………………………………………………14

10.Conclusion………………………………………………………………………………….14

References……………………………………………………………………………………..15

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 1. INTRODUCTION

A Marketing Plan is an operational document that outlines an advertising strategy that an

organization will implement to generate leads and reach its target market (Chan , 2020).The
main objective of the marketing plan is to develop and strategise the launch of the new product
and target customers. The company chosen here is OLA which is basically a Cab service
providing company and How its new product of Electric scooter venturing in to the new market
of Electric Vehicles is Planned. The Product is to be launched in Indian market towards the end
of 2021.

Scope:

The scope of the assessment includes analyzing the company’s marketing objectives, Market and
Competitors analysis, Marketing approach, Marketing Mix and recommendations based on the
analysis.

Limitation:

The Assessment is limited to the launch of new product in the Indian market though the
company plans to export the product into other developing markets in the world.

2. Introduction to the company

The company has been providing Cab services in the market of India, Australia, UK and New
Zealand. Ola is India’s homegrown ride-hailing app with almost 60% market share in India
( Economic times,2014). It has users across major cities and employs 15 hundred thousand
driver-partners. Ola cabs raised $20mn from Matrix Partners & Tiger Global Management. Ola
became a unicorn after raising over $900 mn from different investors and also acquired
Taxiforsure. Ola acquired Food panda and raised $1.1 Bn from Tancet Holdings and softbank
thus venturing into food delivering business. In 2018, after raising $250mn in expanded its
services into Australia. Now it has raised $250mn from softbank and expanded its business into
Electric scooters.

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3 Analyzing the Current Business model

OLA since its introduction in 2010 ,has been following the model of private funding and
investing in growing sectors of businesses. The company operated the cabs service by partnering
with cab drivers and app model to promote growth in growing cities. The company follows a
product differentiation policy, by providing customers an experience they can value for their
money. However, with the ever growing competitors the company decided to diversify into food
delivery and electric scooter production. The company’s growth forecast has been strong.

4 SWOT Analysis

Swot analysis helps to analyze the company’s present strength, weakness, opportunities and
threat in future.

STRENGTHS:

 Affordable and flexible pricing makes customers prefer to use the brand.
 Mobility friendly and focus in customer market
 Making the product easily available by using online promotion strategy.
 Availability in wide cities and using the same model to deliver service to the customers.

WEAKNESS:

 Considerable amount of invest is required to develop the business portfolio.

 OLA has expanded its presence in 4 countries only , so the market is smaller compared to its
competitors.
 Great amount of investment is required in R&D to develop more customer specific products.
 OLA depends on its distribution predominately to deliver customer service.

OPPORTUNITIES:

 The market potential for growth in the customer cab service and related products are
significant.
 The addition of multiple cities is helping to create more customers.
 Current situation of pandemic has increased the demand for food delivery service.
 More sectors are being added in their portfolio which helps in an organic growth for the
company.

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THREATS:

 Growing competitors are entry the market which directly cuts in to the market share of the
company.
 Technological advancement has caused more services to deliver better service.
 Multinational companies have also made their foray in to the segment causing stiffer
competition.
 Other sectors also need focus and R&D to be developed further to maintain market share.

CURRENT VRIO ANALYSIS :

The Purpose of conducting a VRIO Analysis is to understand the VALUE,

RARITY,IMITABILITY AND ORGANIZATION of the company in the current market
situation. Barney, J. (1991)

VRIO analysis provides an internal analysis of the companies future growth prospects and
capabilities of the company.

Valuable

A strong global presence is required for an organization to expand its footprint and growth for
the future market. OLA cabs has been acquiring other region cab services in order to develop its
market .Yes it has been providing value for its customers

Rare

OLA cabs has a distinct advantage as it has created a niche market and the brand is associated
by its customers for cabriding.But, its not rare as many competitors are available.

Imitable

At the moment, OLA cabs has stiff competition from other global players and requires a deep
pocket investment to fend off competition. Yes its imitable.

Organization

At the current situation, the company is well organized in its organizational capability.Yes,its
well organized.

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 Valuable? Rare? Imitable? Organization? Competitive Impact

YES NO YES YES Short to Medium Term

Competitive advantage

5 MARKETING OBJECTIVES

We will look at the short and long term objectives of the company and what are the marketing
objectives needed to achieve their goal,

LAUNCHING OF NEW ELECTRIC SCOOTER:

OLA has decided to launch itself into a new market of Electric scooter with the launch of its
locally produced scooter to be launched into the Indian market during the last quarter of
2021.The segment is new in its portfolio. By the launch of this segment, OLA wants to capture
the untapped market of Electric scooters. The potential objective being the rising fuel prices
coupled with the growing consumer market will lead to its growth in the sector in long term.

This will help them to develop its relation with their customers and develop the company in
improving its sales.OLA electric scooter move towards a clean environmental product is based
on the market forecast of the segment. Though the pricing of their product is targeted towards a
sophisticated market, over the time it will create a market for itself.

SHORT AND LONG TERM OBJECTIVES:

Short term:

The short term objective of the company is to offer customers a new product which is
environment friendly and cost effective. The customers can be attracted to the product as there is
a huge potential and market demand for the product.

Long term:

By entering into a new market segment, the company wants to expand its horizon. Thus assuring
the market and investor of the long term objectives and growth potential of the company,

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6 MARKET AND COMPETITOR ANALYSIS

Market Analysis can be done by having a brief outlook about the Market definition, Market size,
Market segmentation and Porters 5 force analysis.

Market definition: The market OLA is entering is a new segment in its portfolio where only a few
players are present. The competition is not in terms of product but the segment itself is a new
entry. The eco friendly electric scooter market is in its nascent stage as there requires a lot of
investment and infrastructure to the built for the market.

Market size : The Indian electric scooter market has grown exponentialy since 2014. In 2019, about
152000 electric scooters and motorcycles were sold in India, a 20.65 rise on an annual basis from
2012.The forecast shows that the annual retail sales volume to reach 1,080,000 units by 2025. The
retail sales value is expected to rise over $1Billion by 2025 (India Electric scooter Market ,2020).

Market segmentation : The Electric scooter market is segmented based on the following category,

 Low speed , 25 km/h, are expected to dominate the Indian electric scooter and
motorcycle market during the forecast period.
 Lithium Ion Battery based Two wheelers.
 Removable battery technology.
 High speed Two wheelers.

The availability of a considerable number of electric scooter models, their low cost, as
well as their availability as a substitute for conventional fuel-based mopeds are fueling
the demand for them in the Indian two-wheeler industry. The revenue of the electric
motorcycle market was negligible in 2019; however, two-wheeler manufacturers are
expected to launch electric many motorcycle models in the country in the coming years,
thus benefiting the market for this category during the forecast period.

Porters 5 forces analysis:

Porters 5 forces analysis is an excellent model to identify and analyze the external
factors affecting the company and How the company can deal with competitors.

1.Bargaining power of suppliers of OLA : If suppliers have strong bargaining power

then they will extract higher price , but in case of OLA electric scooters are being
manufactured inhouse with a large production facility in India thus reducing the
bargaining power of suppliers.

2.Bargaining power of Buyers of OLA : If the buyers have strong bargaining power then
they usually tend to drive price down , but the electric scooter market is a new entrant
and saving in the cost of fuel will help the pricing of OLA scooters.

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3.Rivalry among existing players – If competition is intense then it becomes difficult for
existing players , but most of the competitiors here are new entrants and hence it is
manageable for OLA.

4.Threat of substitute products and services – The threat of substitute is high and OLA
has invested considerable amount in R&D in electric scooter segment.

5.Threat of new entrants – The threat of new entrant is there as all the players are new
in the market segment.

M. E. Porter (1980)

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7 STRATEGIC MARKETING APPROACH

The strategic marketing approach of the company is important as it defines the segment, target
market and market position.

Unique selling proposition (USP) : The Unique selling proposition for any company differentiates
the company’s product among others.OLA electric with its stylish design and brand building
among teens should attract lots of customers in the age group of 20-40.

SEGMENTATION, TARGETING AND POSITIONING:

Segmentation: OLA Electric scooter market segment can be divided based on ,

 Geography
 Demography
 Psychographic
 Behavioral

Geography: Mostly OLA electric scooters are target for urban and semi-urban locations as the
Electric charging facility is readily available. This infrastructure helps in targeting the
population in Major cities and tier 2 population.

Demography: The demographic segmentation of OLA electric is based on gender where both
male and female can use electric scooters. All age group can use the electric scooters. When it
comes to Income and Livelihood of segmentation, Medium to High Income and Professionals will
be using Electric scooters.

Psychographic: Mostly the segment of users shall be environment conscious and saving of fuel
prices which generally covers a major section of population.

Behavioral: The cool look and the x-factor associated with Electric scooters can attract both the
young as well as the fuel cost saving can attract major population of Scooter users.

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8 MARKETING MIX

1. Product: The company has decided to cash in on the development of the new eco friendly
Electric scooter segment. The product itself has a multiple advantage compared to the
traditional scooters. Saving on fuel cost and greater value for money are some of the
proponents in favor of the product.

NPD Process : The 8 steps involved in the New Product development plan are as follows,

Maximilian Claessens ,2015

Stage 1: Idea Generation : Under this stage the product of Electric scooter is selected based on
market demand and companies future growth.

Stage 2 : Idea Screening : This stage the various ideas of product development are refined by
group involving team members from different sections of the company.

Stage 3: Concept Development & Testing : The OLA electric scooter concept is developed and
testing for any flaws/corrections and feedback given to R&D team.

Stage 4: Market strategy/Business Analysis: Market strategy is developed to sell the product and
find the right market for the product.Various Market analysis techniques as discussed shall be
implemented.

Stage 5: Product Development: In this stage based on the feedback given to R&D , the refined
product is created to meet the needs of the customers.

Stage 6: Market Testing: Just before the product is launched in the market, the Electric scooter
is tested by customers and real time feedback is obtained.

Stage 7: Market Entry: The final product is decided for a launch date and is official entry to the
market is made known to the customers.

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2. Price: The OLA scooters are priced at medium to High segment as the cost associated and the
long term return on Investment are good for the product. A cost differentiation policy is
followed where the customer is aware of the cost and perhaps the benefits associated with it
helps to identify the product among others.

3. Place: OLA scooters manufacturing is located near to urban area , where the market is easily
available. The company can adopt a direct sale model through its outlet thus cutting out the
middle men in distribution and the price associated with it. For tier 2 , it can follow
dealership model as more hubs needs to connected and sales has to reach maximum
consumer markets.

4. Promotion: The promotional strategy to be adopted is by creating in a unique value

proposition for the product. Thus more people would want to associate with the brand. The
product itself is associated with tech savvy consumers and the promotion can be done in
digital platforms where the reach to targeted consumers is most likely.

5. People: The people associated with the brand should have the knowledge of the benefits of
environmental friendly scooters and the associated battery.

6. Process: The value added services that differentiate the product from the competition.

7. Physical evidence: The Electric scooter should itself provide value for money for the
consumer to have confidence and future market growth.

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9 RECOMMENDATIONS:

The Product life cycle contains four distinct stages: a)Introduction , b)Growth , c)Maturity and
d) Decline.

a)Introduction : The marketing strategy to be used in introduction stage is rapid skimming –

Launching the product at high price and high promotional level. This will help the product

 To establish a clear brand identity.

 Connect with the right partners to promote and grow the product.
 Price the product at high as there is a niche market and will identify with the quality level
of the product.

b)Growth : Marketing strategies used in Product growth are

 Improving product quality by investing more R&D

 Adding new features to the product and support services to improve the market share.
 keeping pricing as high as is reasonable to keep demand and profits high
 increasing distribution channels to cope with growing demand
c)Maturity : In this stage the product will enter a steady state of sales and marketing strategy
should be to add new features and upgrade the product. The strategies that should be used here
are:

 market modification – This includes entering new market and increasing the chain of
distributors.
 product modification – New features to be added and pricing differentiation policy to be
followed.
d)Decline: During the last stage of the product , sales and profits might decline, so the logical
solution will be to :

 The expenditures on promotional and marketing should be reduced.

 Discounts and price reduction to be offered to attract customers.
 Renew the brand legacy and continue the after sales service.

10 CONCLUSION:

OLA has been a brand in the field of cab driving service and by entering a new market, it is trying to
expand its business market and adapt the company to the changes around it. Electric scooter is one
of the most promising sectors as more and more customers are preferring eco friendly alternative to
modes of transport. Thus the OLA Electric would do a world of good adding the new portfolio .

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REFERENCES:

1. Nebojsa S. Davcik, P. S. (2015). Impact of Product Differentiation, Marketing Investments

and Brand Equity on Pricing Strategies: A Brand Level Investigation. European Journal of
Marketing,

2. Shefali Jaiswal, A. S. (2020). Influence of the Determinants of Online Customer Experience

on Online Customer Satisfaction. SAGE Journals, 44-45.

3. Saju B, Harikrishnan K, Joseph Jeya Anand S (2018), "Olacabs: Riding on a High Harvard
Business Review Case Study. Published by HBR Publications.

4. Barney, J. B. (1995) "Looking Inside for Competitive Advantage". Academy of Management

Executive, Vol. 9, Issue 4, pp. 49-61.

5. Kotler & Armstrong (2017) "Principles of Marketing Management Management", Published

by Pearson Publications.

6. M. E. Porter, Competitive Strategy(New York: Free Press, 1980)

7. Paul M. Healy (2018), "Krispy Kreme Doughnuts Harvard Business Review Case Study.
Published by HBR Publications.

8. O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975).

9. India Electric Scooter and Motorcycle Market , (August, 2020).

10. Maximilian Claessens (2015).New Product Development Process.

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