Vespa's Re-entry Strategies for the Indian Market

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Case Details:

Case Code : MKTG304
Case Length :15 Pages
Period : 2012
Pub Date : 2013
Teaching Note : Available
Organization :Piaggio Vehicles Pvt Ltd
Industry : Indian scooter market, two wheeler market
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Scooter Market in India

In the 1950s, there was very limited production of scooters in India. Scooters were being manufactured only by Automobile Products of India (Lambretta) and BTC (Vespa). In those days, there was a huge demand for scooters in India and a shortage of supply. In 1972, Kinetic Engineering Ltd entered the Indian scooter market. In the 1980s, Bajaj scooters had more than a 60 % market share in the scooter segment...

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

Vespa in India

In March 2012, Piaggio launched the Vespa scooter at a price of Rs 66,661 positioned at the premium end of the Indian scooter market. It invested over $30 million in setting up a manufacturing plant at Baramati to produce 150,000 units per year. Piaggio focused on the Vespa's heritage and unique values and on sustaining the brand image of the Vespa through its communication strategy. The Vespa had a 125 cc engine of superior technology and a 3 valve engine that no other product in the Indian scooter segment provided. Though technologically and performance wise, the Vespa scooter was superior to other products in the Indian scooter segment, Piaggio pitched the Vespa only as a lifestyle statement...

Marketing Strategies

In 2012, with its re-entry, the Vespa aimed to connect with the youth. It created a digital campaign in collaboration with OgilvyOne Worldwide and Meridian Communications . As part of the digital campaign, Piaggio created a 'Once upon a Vespa' contest. This contest’s prime focus was on giving the brand’s origin, its effect on the global two-wheeler market, and its impact on the popular culture. This contest provided participants an opportunity to win a trip to Italy, Vespa scooters, and other prizes. It educated Indians about the Vespa’s rich heritage and culture in a fun way...


The Vespa was priced at a 15-25% premium compared to competing scooters like Honda Activa, Suzuki Access, and Mahindra Duro. The price was close to 40% higher than that of a basic scooter available in the market. Experts pointed out that only the Vespa model was priced approximately at Rs.67,000, with the on road price coming to about Rs.78,000. Experts commented that the product would not be sold on the basis of mileage or resale value and sighted that price preferred when there was a competition among brands, Vespa brand developed on the realms of fashion and lifestyle statement...

Future Outlook

In India, there was a clear differentiation made between the premium and economy segments in both the car and motorcycle markets. Experts said brands such as Harley Davidson and Triumph were considered as premium motorcycles and these in general had much larger engines and were superior in performance. In India, motorcycles like the Rajdoot and the Royal Enfield had garnered a premium image with the associated retro feel. Vespa aimed at achieving something similar with a retro feel and an Italian scooter image...


Exhibit I: The Purchase Patterns of Two Wheelers in India (in %)
Exhibit II: Scooters Available for the Indian Market
Exhibit III: Annual Two Wheeler Sales in India (2001-11)
Exhibit IV: Retail Outlets of Automotive Companies in India
Exhibit V: "Once Up on a Vespa" Contest
Exhibit VI: Vespa Café Decorum
Exhibit VII: Scooter Sales in India April 2012
Exhibit VIII: The Scooter Sales in India in November and Cumulative Sales for the Quarter (April -November) 2012

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