Marketing Strategies of Bajaj auto
EXECUTIVE SUMMARY
We identified Bajaj Auto as the marketing company of our choice for the followingproject.
Bajaj Auto group was founded in the year 1945 and has been among thefront-runners in the motorcycle industry ever since. This very fact talks volumesabout the company since only the best of the firms survive such a long time atthe top.
During the 60s, 70s and 80s there was a 10-year waiting period for itsproducts.
The company only had to produce its quota. Marketing or sales wasnot too much of an issue for them. Also the company‟s owner was infamous for being part of the anti-liberalization lobby called Bombay Club. However the firmfaced a major crisis in the 90s and the early y ears of the new century due toincreased competition from both foreign and domestic markets. However
Bajajcame out only stronger with the competition and hardly depended on foreign helpon this account. And the product, which did this turnaround possible, was Pulsar.P uls ar is exemplifies the fighting spirit of Bajaj. It is a classic example of anIndian company of the pre -liberalization era, adapting itself to the changingscenario and coming out on tops. Another interesting fact is how liberalizationand embracing the change can work wonders for a firm, which was one of themost skeptical of liberalization policies of the Indian government.
Marketing Strategies of Bajaj auto
The following project is a detailed marketing analysis of the product Bajaj autoand its variants in the two-wheeler market. The project first of all focuses on themarketing history of Bajaj auto and its SWOT analysis. Various internal and external factors were taken into consideration while analyzing. Then we go on toanalyze the consumer behavior for Pulsar regarding purchase, decision
makingand buying roles. The third section focuses on the competitor analysis of
Bajajauto, their various strategies, activities and status to understand Pulsar‟s competitive scenario. Help has been taken for anal ysis from some consumer surveys from prominent sites and a small survey done by us.The project gives insights into various other topics. It talks about the shift in thetrend towards motorcycles in the 90s. It also talks about the process of liberalization and how it affected Bajaj as a company. The change in the marketing strategies of Bajaj according to the times, how Pulsar succeeded inachieving a turnaround for Bajaj are also discussed. The competitor analysis of Pulsar gives an understandi ng of the two- wheeler market as a whole, how it isfull of choices for customers and how many more companies are vying to enter it.
Marketing Strategies of Bajaj auto
Table of Contents
EXECUTIVE SUMMARY...... 2SECTION –
I...... 51.HISTORY AND
SWOT ANALYSIS OF BAJAJ
AUTO...... 51.1INTRODUCTION......
...... 51.2WHY BAJAJ
AUTO?...... 61.3SHIF
TING TRENDS TOWARDS
MOTORCYCLES...... 71.4MARKETING
HISTORY...... 81.5SWOT
MATRIX OF BAJAJ
AUTO...... 10 SECTION –
II...... 132.ANALYSING
CONSUMER BEHAVIOUR IN TERMS OF BUYING ROLES, DECISION
MAKING PROCESS AND KIND OF PURCHASE BEHAVIOR...... 132.1BUYING
ROLES...... 14 2.1.11
50cc...... 152.1.2180CC
...... 182.1.3200cc and
220cc...... 18 2.2CONSUMER
CENTRIC STEPS BY BAJAJ...... 21 SECTION
– III...... 243.COMPETITOR
ANALYSIS, THEIR ACTIVITIES, STATUS AND
STRATEGIES 243.1HERO H ONDA & HONDA
MOTORS...... 25 3.2TVS
MOTORS...... 27
TVS motorcycles product segment includes:
...... 283.3YAM AHA
MOTORS...... 293.4FOR
EIGN
COMPETITORS...... 31 SECTIO
N – IV...... 34
Marketing Strategies of Bajaj auto
4.Survey Analysis and
Recommendations...... 345.CONCLUSION......
...... 386.R EFERENCES......
...... 39
REFERENCES
SECTION – I1.HISTORY AND SWOT ANALYSIS OF BAJAJ
AUTO1.1INTRODUCTION ajaj Auto is a major automobile manufacturer based in Pune, India. It isone of the major producers of two wheelers and three wheelers andranks 4 th in the world in terms of two wheeler production. It is also planning a foray into the 4-wheeler market. The firm in its initial years was intomanufacturing scooters and auto rickshaws. It also enjoyed the lion‟s share of the Indian two wheeler markets for a long duration of time. In the late
Eightiesand early nineties the market made a major shift in the type of vehicles on offer.New competitors like Yamaha and Hero -Honda came out with motorcycles,which were more powerful, better, looking and easier to handle. As such the consumers got attracted to motorcycles than scooters. Bajaj was slow to respondto the changing dynamics of the market and it‟s market share started decliningquickly. Bajaj entered into a partnership with the Japanese bike manufacturer Kawasaki to produce motorcycles for the Indian market. Still, it failed to garner any major share of the market. In the year 2001, Rajiv
Bajaj, the scion of theBajaj family came up with the idea of developing a powerful, stylish, rugged motorcycle, which would be priced lower than the existing products. And thusPulsar was born. It came out in two variants 150cc and 180cc.
B
Marketing Strategies of Bajaj auto
1.2WHY BAJAJ AUTO?
Bajaj Auto sta rted in the year 1945. It started selling imported 2 & 3 wheel er vehicles in 1959. They subsequently obtained a license
to produce 2 & 3 wheelers. During the 60s, 70s and 80s there was a 10-year waiting period for itsproducts. The company only had to produce its quota. Marketing or sales wasnot too much of an issue for them. Also the company‟s owner was infamous for being part of the anti-liberalization lobby called Bombay Club.In the 80s and the 90s many foreign players like Honda, Yamaha etc. came intoplay in
Indian markets and played a significant role in easing out some of the Indian brands. Bajaj is probably the only Indian brand to emerge stronger out of the competition by developing products on its own.Pulsar it exemplifies the fighting spirit of Bajaj. It is a classic example of an Indiancompany of the pre-liberalization era, adapting itself to the changing scenarioand coming out on tops. Bajaj changed its product strategy when it started concentrating on the bike market. Pulsar was the first indigenously developedmotorcycle by Bajaj for the Indian bike market and was the reason for the turnaround of Bajaj fortunes.
Marketing Strategies of Bajaj auto
Many Indian companies, in order to acquire the technical know how entered into joint collaborations with foreign companies e.g. Hero motors with Honda, LMLwith
Vespa, Bajaj with Kawasaki etc. Though Bajaj depended on Kawasaki for itsinitial forays into the Bike market, now it has disassociated itself from Kawasaki and has emerged as a truly Global Indian brand.Another interesting fact is how liberalization can work wonders for a firm, whichwas one of the most skeptical of liberalization policies of the Indian government.So Pulsar as a whole has been a brand, which has brought major changes notonly in the Indian Motorcycle Industry but also in the Bajaj business empire.
1.3SHIFTING TRENDS TOWARDS MOTORCYCLES
First let us analyze the change in the preference of the Indian customers in thetwo-wheeler industry. In the 90s with growth in the average income of the
Indianmiddle class – the primary consumers of the two - w h e e l e r market and the increasing number of choices in the motorcycle segment, there came a gradualincrease in the sales of motorcycles. There were many other factors for this
•
Advanced technologies in the bikes
•
Larger wheel – base there fore easy to navigate rough Indian roads
•
Higher mileage, less maintenance cost, tougher.The following table shows the increasing share of motorcycles in the Indian market in the 90s.
Marketing Strategies of Bajaj auto
This factor also played an important role in the success of Indian bikes like HeroHonda
Splendor, Bajaj auto.
1.1MARKETING HISTORY
Bajaj entrusted the responsibility of communicating the brand value of Pulsar through media campaigns to O& M who came out with the brilliant ad of “DEFINITELY MALE”. Pulsar was initially targeted to 18-24 age group. The youthwanted powerful, stylish bikes, which would suit their pockets and give them good mileage. The higher powered bikes in the market e.g. RE, CBZ were toopricey, high on maintenance or low on mileage.What O&M needed to do was to attract attention of the youth, more so since thetarget market for the product was very niche. And the punch line “DEFINITELYMALE” did fire the youth‟s imagination. It was very novel of O&M to come up withthe idea of associating a motorbike
with Gender. Pulsar got positioned as the He-Bike of India. The product was unquestionably a success and Bajaj started increasing the breadth of its target market.
Marketing Strategies of Bajaj auto
Bajaj also refused to rest on its laurels. It constantly kept working on upgradingthe product and came up with DTSI (Digital Twin Spark Ignition) version of theBike in the year 2005. The new technology helped the bike to give better mileage. Also the styling was changed – stylized headlights, tail lights etc. Thistime around, Leo Burnett managed the ad campaign. They came out with the new punch line “DIGITAL-BIKING” keeping in consideration the new technologyDTSI. The mega-successful
“DEFINITELY MALE” slogan was given away with.This, though it communicated the introduction of the new technology to the consumers, missed the trick in positioning it as the classic HE-BIKE.We have examples from
Bike Manufacturers who have developed a unique theme for their Bikes and kept their positioning constant over a long duration of time earning unparalleled
Brand loyalty and exclusivity such as Harley Davidson& Royal Enfield.However Pulsar had been so well established as a Product and its pricing anddistributio n were so strong that even indifferent promotional campaigns couldhardly make too much of a difference to sales figures. In continuation of Bajaj‟sstrategy to come up with better products, the upgraded version of pulsar waslaunched in 2007 with digital console display and LED taillights, which were anovelty in the Indian market.Subsequently Bajaj came up with newer variants of Pulsar 200cc & 220 cc. The200cc bike had a lot of innovations like oil cooled engine, twin rails etc. The bikewas launched with a “F REE BIKING” campaign shot in Cuba by
O&M. TwoBikers riding Pulsar 200cc bikes were shown zip -zapping their way through buildings and crowded streets of Havana. Bajaj tried to communicate that it doesnot matter where you are biking but how you are biking, wh en you are atop a
Marketing Strategies of Bajaj auto
Pulsar 200cc. Though the message might have been a bit complex for the typicalIndian motorcycle owner, the freshness of the ad really popularized the bikes.The latest in the series of Pulsar ads is the “PULSARMANIA” one, where 4 bikersperform varied stunts atop Pulsar bikes. They have been very popular and aim toextend the macho image of Pulsar bikes further.
1.2SWOT MATRIX OF BAJAJ AUTO
SWOT Analysis
Let's analyze the position of Bajaj in the current market set-up, evaluating itsstrengths, weaknesses, threats and opportunities available.
Strengths:
Highly experienced management.Product design and development capabilities.Extensive R &
D focus.Widespread distribution network.High performance products across all categories.High export to domestic sales ratio.Great financial support network (For financing the automobile)
Marketing Strategies of Bajaj auto
High economies of scale.High economies of scope.
Weaknesses:
Hasn't employed the excess cash for long.Still has no established brand to match Hero Honda's
Splendor in commutersegment.Not a global player in spite of huge volumes.Not a globally recognizable brand (unlike the JV partner Kawasaki)
Threats:
The competition catches-up any new innovation in no time.Threat of cheap imported motorcycles from China.Margins getting squeezed from both the directions (Price as well as
Cost)TATA Ace is a serious competition for the three-wheeler cargo segment.
Opportunities:
Double-digit growth in two-wheeler market.Untapped market above 180 cc in motorcycles.More maturity and movement towards higher-end motorcycles.The growing gearless trendy scooters and scooterette market.Growing world demand for entry -l evel m ot orc ycles especially in emerging markets
SECTION – II2.ANALYSING CONSUMER BEHAVIOUR IN TERMS OFBUYING
ROLES, DECISION MAKING PROCESS ANDKIND OF PURCHASE BEHAVIOR
Marketing Strategies of Bajaj auto
AJAJ PULSAR has been one of the leading brands of motorcycles fromthe BAJAJ stable for the last 7 years or so. Right from its inception inthe year 2001, the bike has been the market leader in its segment despite stiff competition from many others including one of the biggies who hadthe first mover advantage. It has strived to be ahead of its competitors, through amix of product and marketing innovation, solid performance bikes and good marketing strategies.
Throughout this it has maintained a loyal base of supporters, which have clung to it for years. Marketing management of PULSARhas been highly successful as it has been able to acquire, retain and grow itscustomer base every year.
B
In this section we are going to analyze the behavior of consumers of
BAJAJAUTO in terms of their buying r oles, decision -making process and kind of purchase behavior.
2.1BUYING ROLES
Marketing Strategies of Bajaj auto
In the 70‟s and 80‟s Frederick E. Webster, Yoram Wind and Thomas
Bonomadeveloped the six buying role model of the consumer. According t o them abuying centre has members who play the following role in purchase process.
1.
INITIATOR:Identifies the need.
2.
INFLUENCER:influences the views of buyers
3.
DECIDER:the one who ultimately decides about buying
4.
BUYER:holds the formal authority to select
5.
USER:consumer of the product
6.
GATEKEEPER:controls information or access to decision makers.Though the model involved industrial buyers, we can take it as a r o u g h foundation for analyzing the buying roles of consumers.
Marketing Strategies of Bajaj auto
Let‟s do the analysis on the basis of the models or variants in which PULSAR isavailable.
1.1.1150cc
The target customer base of the PULSAR has always been the age group of 20-3 5 . T h e
150cc model costs about 60,000 INR and is the cheapest of a l l PULSAR models.So its target base is also the college going kids and young office going peoplemostly.In the case of the college public, the INITIATOR &
USER becomes the collegegoing kid. But the final BUYER & DECIDER in most of the cases are the parentsof the college going kids. Since Pulsar is a brand which gets very good publicityby word of mouth, the INFLUENCER in this case is the kid‟s friends, social circle,magazines, girlfriends etc.In the case of the office going people, the person using it only plays most of theroles. Only the co-workers, friend circles to a large extent and family to a smallextent plays the role of INFLUENCER.Let us now look at the factors which generally influence the decision m akingprocess of consumers in buying 150cc pulsar.For the college going student, the major factors, which influence him in buying aPULSAR, are
•
The looks and styling – very international and contemporary according tomany.
•
It brings about a macho image – people feel it heightens their esteemsamong the group especially girls.
Marketing Strategies of Bajaj auto
•
Peer influence
•
Power & acceleration – higher than the entry segment bikes.For the parents, who are the final buyers, the factors, which have been observedto be influencing, are
•
BAJAJ – Its Brand name, the feeling of stability and reliability associatedwith it.
•
Extensive service center network and dealership locations across t hecountry, so less maintenance worries.
•
Could be used as a family bike also.
•
There have also been instances when the parents might have owned aBajaj scooter earlier and is loyal to brand Bajaj in his own right.For the office going people the major factors which help in decision making, havebeen observed to be
•
Sense of style and power along with highest mileage in the segment.
•
Low maintenance.
•
High resale value etc.One of the recent factors influencing the buying has been observed to be
•
The initiation of BAJAJ into auto -finance through its company
BAJAJAUTO FINANCE LTD. (BAFL). It has been coming up with s om e veryinnovative offers like very little down payment and 0% interest loans.There has been observed, an increase or spurt in the sales figures in general during
•
College starting months June- August.
Marketing Strategies of Bajaj auto
•
Launch of a new improve d version e.g. when the DTSI model w a s launched.As concerned, buying intervals, most of the bikes are used for an average of 3-
4years and many purchases are repeat purchases. The sale of the 150cc bikeshas been observed to be the most among all brand offerings (e.g. 180 cc, 200cc) of
PULSAR not only due to its pricing but also due to the mileage factor.Entry of good competitor products e.g. UNICORN, HUNK etc. has h a d temporarily reduced the sales of PULSAR 150CC in the past but none has beenable to give a long hard competition to PULSAR.A greater portion of the buying payments has been met through EMI Loans, sothe rise of interest rates has affected the sales a bit. Also Bajaj might need tocome up with new strategies to counter the dual challenge posed by rising inflation and interest rates to sustain sales of
Pulsar 150 cc.
1.1.1180CC
It is a higher end bike in terms of features and powers. Accordingly the cost alsoincreases to about 65000 INR. The fuel costs also increase proportionately. So the target customers of BAJAJ for this level of motorcycles are the people a littlehigher in the income level E.g. Managers, executives, rich college kids etc.Thus the DECIDER, BUYER,
USER, INITIATOR roles are played by the end user himself. The people who prefer the 180cc over the 150cc are mostly thosewith a passion for biking, power lovers, bike enthusiasts etc.BAJAJ also targets this section of customer through its ads focusing on the joy of riding like PULSARMANIA, Free Biking etc.
Marketing Strategies of Bajaj auto
Let us look at the factors influencing the decision making of this group of customers. They are
•
This segment is relatively new with very less competitors. So prospectivebuyers more or less gravitate to the available choices – PULSAR beingthe prominent among them.
•
Influence from the peer group and friends.
•
Brand equity of PULSAR and word of mouth publicity.
•
People buying in these segments also tend to get influenced by onl ine reviews available on the Internet.Also since people buying in thi s category plan their purchase over a longer period of time and are relatively better off financially, this section of bikes hasobserved lesser proportion of EMI based purchases.
1.1.1200cc and 220cc
These bikes have been recent introductions to the Pulsar Brand. Their popularityis also steadily increasing at par with their other counterparts. They are oil-cooledmodels, which give better performance especially when the bike is run over l o n g e r periods of time. They are sold at a heavier price range of 72 to85thousand. They are intended mainly for biking enthusiasts and act as an alternative for those who cannot afford high power costly imported bikes.In terms of buying roles, the peer grou p of the biker etc. may play the role of INFLUENCER. Other than that the end user himself plays most of the
roles.Various sources of secondary data establish these facts as mentioned. Also our survey points to similar facts.
Marketing Strategies of Bajaj auto
Out of 53 participants a majority of 38 respondents either owned a pulsar or indicated that they prefer owning one in future. 13 of them had consulted reviews on websites before going for Pulsar. Also an amazing 16 out of the 19pulsar owners were very satisfied with the product and said they would/do recommend the product to their friends.E.g. in a survey conducted inwww.mouthshut.com, 419 existing BAJAJ AUTO150cc users were asked to rate PULSAR on v arious features on a scale of 5. The results are as follows.Additionally 83% respondents recommended the buying of a PULSAR.In another survey conducted by www.pulsarclub.com, the respondents wereasked questions regarding their buying behavior. Their responses were asfollows.
Why did you buy a Bajaj auto?
Its masculine looks...39.71% (110)Performance...
48.38% (134)
Marketing Strategies of Bajaj auto
Mileage..5.42% (15)Resale Value...1.08% (3)by Envy...5.42% (15)
Total Votes: 277Who was influential in choosing Bajaj auto?
Your Wife4.83% (10)Your Kids1.45% (3)Your Girlfriend(s)23.19% (48)You Yourself
66.67% (138)Dealer pushed you very few choices3.86% (8)
Total Votes: 207
1 . 2 C O NSUMER CENTRIC STEPS BY BAJAJ
Now, let us look at some of the measures taken by Bajaj to influence consumer behavior in the increasingly competitive market.
1.DEALERSHIP AND SERVICE NETWORK:
Bajaj Auto has an extensive network of about 485 dealers and 1500 s ervi ce centers around the country. Lately it has been concentrating on the rural frontwhich has largely been an untapped, growing market in terms of performancesegment bikes.Bajaj has identified a segment of c u s t o m e r s
'Probikers', w h o a r e knowledgeable, appreciative of contemporary technology, they are trendsettersand very choosy about what they ride. Hence, Probikers need to be addressed ina meaningful way that goes beyond the product. Bajaj Auto is in the process of expanding it‟s chain of retail stores across the country exclusively for high-end,
Marketing Strategies of Bajaj auto performance bikes. These stores are called "Bajaj Probiking". Many such storeshave been opened throughout major cities in India.
A BAJAJ PROBIKING SHOWROOM
T h e “
Probiking
” stores have features like attractive spare parts display, a trial room which is full y ai r -conditioned etc. The bikes are displayed in standing p o s i t i o n which is in itself a very novel way of attracting attention o f t h e youngsters.Bajaj Auto has come up wi th new initiative called “ e-biking
” to facilitate onlinebooking of bikes. It‟s the first and only kind of online bike booking in India andexpected to woo the prospective customers. After bike has been booked, bikewould be delivered at the doorstep of th e customer with attractive financing schemes made available to the customer. Bajaj Auto is expecting that it wouldgain significant customer base from people in cities like
Bangalore, Hyderabadand Chennai, which are IT hubs of India and where people are internet savvy.
Marketing Strategies of Bajaj auto
2.CUSTOMER RETENTION
Lifecycle of bike is relatively large (compared to other products like grocer yitems, clothes, etc.) and it is not that sort of product that people will buy twice ayear or even once every year. So customer retention is not limited to the act of customers coming back to buy the same product again and again. Here, it takesa broad meaning and encompasses customer satisfaction with its usage; serviceby the vendors and service centres; and as a result customers who have alreadybought the product recommending the same to other prospective customers, users forming clubs to support the brand and also helping in testing etc of anynew launches.
We must say Bajaj has done extremely w ell in this area also. Sales of
Pulsar as well as its popularity have been leading those of other bikes.Also in cities like Pune there are bikers clubs, which owe serious allegiance to t he brand
Bajaj. People who had bought it and were happy with it started aWebsitewww.pulsarclub.com. This all is testimony to the successful customer retention for Pulsar by the Bajaj Auto.Another initiative taken by Bajaj Auto is “
Bajaj Confidence – Extended Warranty Plans”
, which extends basic 2-year/30000km warranty coming with the purchaseof new Bajaj Bike at a very nominal price. This extended warranty gets activatedas soon as the basic warranty expires. This initiative has been taken to providebetter service to t h e existing customers and hence focuses on customer retention and better customer relationship management. It needs to be seen howthis new initiative does in achieving goals of customer retention.Marketing management is often described as the art and science of choosingtarget markets and getting, keeping and growing customers through creating,
Marketing Strategies of Bajaj auto delivering, and communicating superior customer value. While
“DEALERSHIPAND SERVICE NETWORK” is focusing on getting and growing customers,“CUSTOMER RETENTION” focuses on keeping customers through superior customer value.
Marketing Strategies of Bajaj auto
SECTION – III
3.COMPETITOR ANALYSIS, THEIR ACTIVITIES, STATUSAND STRATEGIES ajaj Pulsar has been in the market for about 7 years now.
I t h a s revolutionized the Indian bike market with its innovative offerings both int erms of product quality as well as style. Consumers now have the choice of bikes which are high both on quality i.e. mileage and performance aswell as style.
Pulsar commands about 60% of the market share in the 150cc pluscategory. This figure was higher initially, but with increased competition fromother bike manufacturers in the same category; its market share has decreased.
B
Hereon we will try to identify and analyze the status, strategies and activities of major competitors of Pulsar to understand its competitive scenario. Some of themajor competitors of Bajaj with bikes in the 150cc + category which are a competition to Pulsar are
•
Hero Honda
•
TVS
•
Yamaha
•
Foreign Competitors
Marketing Strategies of Bajaj auto
1.1HERO HONDA & HONDA MOTORS
Hero Honda is the largest Bike manufacturer in the world. In India also, it leads inthe overall bike market, but in the 150cc plus category its models are laggingBajaj auto in the overall market share. Bajaj auto‟s main competitors from the Hero
Honda stable are CBZ, Achiever, Hunk and Karizma.
CBZ was an established and famous brand when Pulsar made its entry into themarket.
Though CBZ had a better engine; Pulsar forged ahead with its styling,performance and innovative features. Demand for CBZ began to gradual l ydecrease as it was mainly positioned as a sports bike whereas Pulsar was notenclosed in any such bracket. Hero Honda came out with “CBZ
EXTREME” thenew version of CBZ in 2006. It was positioned as a bike for
Extreme adventurelovers with advertisements on the similar lines.
Though this bike helped in improving sales, but it was not as wel l received as the original one, with complaints about its looks.
Marketing Strategies of Bajaj auto
HERO-HONDA KARIZMA AND CBZ XTREME
KARIZMA has been a major competitor for Pulsar in the 180cc, 200cc category.It is a sports bike with a niche market. Hero Honda has adopted a different marketing strategy to promote it. Since it is a bike primarily targeted for the youth,they used mediums, which were frequented by youth. They have Hrithik Roshanas their brand ambassador. Hero Honda constantly sponsors adventure ralliesthrough
Karizma brand name. The popular TV show MTV Roadies sponsored byKarizma has elevated its status as a brand and increased its popularity.
A separate site for the Bike with forums for consumers to discuss the bike has beenan innovative marketing strategy.Hero Honda has recently come up with another bike Hero Honda Hunk in the150cc category. It is being positioned as a bike with macho looks and for the hunks.Honda through its separate venture has come up with many bikes. It has Unicornin its stable, which is a significant competitor of Pulsar. It has found many supporters due to its better handling and gearshifts than Pulsar. Honda has always positioned it as its main bike.Other Bikes from the Hero Honda stable have not been able to create a sufficientimpact on the market. The major advantage with Hero Honda is its wide serviceand dealership network of about 3000 outlets throughout the country, which is l arger t han all its competitors. Hero Honda also has a CRM initiative called“Passport” which is a major success having a membership of about 3 million customers. Through it the customers get a series of discounts and benefits
for aperiod of 3 years. Hero Honda lately has been on a massive drive of penetratingthe rural market through its “Har Gaon Har Aangan” initiative. Thus Bajaj has to
Marketing Strategies of Bajaj auto take note of this fact and try to expand more into the rural market to counter thecompetition from Hero – Honda.
1.2TVS MOTORS
The Indian automotive industry is increasingly getting competitive and the two - wheeler segment within it is also facing its own share of challenges. As part of the industry, TVS Motors, the country‟s third largest manufacturer of t w o - wheelers, is also giving a stiff competition to
Bajaj products. TVS Group of companies engaged in the manufacturing of almost all kinds of automotive components, two wheelers and a few other industrial products. They are also intothe financial services sector. The turnover of the entire group was close to $2billion in2003. The company has launched its latest bike Flame and has got some big plans up its sleeves. The year 2007-08 was a milestone for TVS Motor as it is likely to achieve sales one million motorcycles.
Last year, the companysold a little over 800,000 motorcycles.There was a Digital Twin
Spark Plug Ignition [DTS-i] technology debate betweenthe two-wheeler manufacturing giants Bajaj Auto and TVS Motors. The patentwar reached the
Supreme Court with Bajaj seeking a restrain on t h e manufacturing and selling of TVS‟ two -wheeler „Flame‟. Bajaj has s ought a revocation of the Madras High Court order allo w i n g T V S to go ahead with receiving bookings for and selling its new motorcycle.
TVS motorcycles product segment includes:
•
TVS MAX 100
•
TVS Suzuki Samurai
•
TVS Fiero
Marketing Strategies of Bajaj auto
•
TVS Star
•
TVS Star City
•
TVS Star Sport
•
TVS Centra
•
TVS Apache
•
TVS Flame
Strategies to stay competitive:1. Constant Quality Improvement :
Significant efforts have gone silently into quality improvement. Today, Star has the best warranty record in the Indian two -wheeler industry. It took atl east two products worth of efforts to get TVS quality up to that s t andard, where it is equal or better than the best. The new offerings are targeted atdifferent segments of the two- and three-wheeler customers with emphasis onsuperior technology, styling and engine capabilities
2. Thrust on Research and development:
TVS Motor Company has decided to double its R&D
(research and development) spending this year. Over 300 personnel are deployed for product development. The company will strive to set out a new benchmark inthis area. There was a discontinuity and break in cadence of its products. After Victor it came with Scooty Pep which has done well; Apache which hasgot a good record in the market; and then Star. Now, it has got Flame, whichwill be a worthy rival to Pulsar.
Marketing Strategies of Bajaj auto
3. Product for every pocket :
TVS Motors has just launched seven products in a first-of-its-kind rollout inthe
Indian automobile industry. The seven products include a completely new125 cc motorcycle FLAME, an all new 110 cc Star City, an Apache variantwith fuel injection technology and the electric variant of a Scooty. The newofferings are targeted at different segments of the two- and three-wheeler customers with emphasis on superior technology, styling and engine capabilities.
3.3YAMAHA MOTORS
Yamaha was one of the first foreign companies to enter into India. It began operations with a JV with Escorts India. By the turn of the century, the JV between Escorts and Yamaha broke off. With the relaxation of FDI norms to 100%, Yamaha was in Indian markets as a fully owned subsidiary of YamahaMotors, Japan. This was advantageous in many ways. Firstly Yamaha had nowfull control of its operations, it could decide the strategies.
Secondly it could bringworld-class technologies from Japan to India, which could act as its competitiveadvantage.From 2002 onwards Yamaha started a process of
rebuilding by concentratingmore on 100cc plus deluxe category of motorcycles with bikes like Libero. Theseset of two wheelers come with international style, cutting edge technology, fuelefficiency, power delivery, and stylized graphics. The present stable of Yamahaincludes bikes like Crux (100cc), Alba (106cc) and Gladiator
(125cc).
Marketing Strategies of Bajaj auto
As far as the 150 cc segment is concerned, Yamaha was not much of a competitor for Bajaj auto until now. It has some bikes in the premium categoryabove 500cc but then they too have their niche customers, which would not clashwith those of pulsar.Gladiator though not in the same category as Pulsar, has been a competitor for Pulsar. The main factors that work in favor of Gladiator is the huge price difference of about 12,000 between
Gladiator and Pulsar, the higher mileage of Gladiator and durability.The company is riding on the popularity of Bollywood heartthrob John Abrahamfor marketing its two wheelers. These campaigns focus on Yamaha as a brandfor the youth with emphasis on style, performance and technology.
T h e s e campaigns have been successful in denting the share of Pulsar a little.
YAMAHA GLADIATOR – JOHN ABRAHAM
But the year 2008 appears to be a bright one for Yamaha. It is coming out withtwo bikes in the 150cc plus cat egory, which have been very popular abroad. They are Yamaha R15 (150cc, water cooled) and FZ (150cc, air cooled).
R15has technology from R1 bikes and has six-speed transmission and has receivedexcellent initial reviews. FZ is a toned down version of the original FZ 1000ccbikes. Both these bikes have been predicted by Industry experts to be a rage intheir initial
period and may eat into the share of Pulsar in the market. Yamaha isplanning to improve on its weak -point – no. of service centers. It is going t oi ncrease it to 500 from its present 350. It also plans to open about 10 directshops in main metros for its new offerings and is coming out with aggres s ive marketing strategies for their launch.The company is also planning to come out with two new variants of the Gladiator.Thus Bajaj has to come out with new strategies to handle this new deluge of models which could affect the sales of
Pulsar in the coming few months.
YAMAHA FZ (150CC) & YAMAHA R15 (150CC)
3.4FOREIGN COMPETITORS
Foreign players have been an integral part of the Indian auto market since long.It was the foreign players‟ expertise that brought cutting edge technology intomotorbikes and scooters went out for a toss. Post liberalization some of themhave come out with b ikes form their own stables.
Also we have bike manufacturers in china who are a major threat to
Indian bike makers. Chinesemanufacturers produce at very cost and sell the products at low margins. Theyconcentrate on production rather than marketing their products. It is very evidentfrom their strategy that they target markets like India,
Africa and Latin Americaand not developed markets like US or Europe. With increasing globalization andreduction of trade barriers they will be a major threat.
Also there have been incidents when the Chinese have been found not to be very keen on conformingto IPRs or patents etc., a blatant case being a Chinese duplicate of Bajaj auto,called GULSAR and sold in the South American market.
It may well very easilygnaw into Indian bike producers‟ share. Also with the Indian economy growing ata much bigger rate then the developed countries
markets and with a sixth of world population, which is growing richer by the day, it is evident that the marketof the future is here. As a result al l big bike manufacturers will make for the Indian market in the near future.
Marketing Strategies of Bajaj auto
CHINA MADE GULSAR
One point of note is that there is no minimum investment limit for foreign companies in India and as a result the threat from the Chinese producers all butintensifies. Japanese producers like KTM and
Kawasaki (which has prior experience of the Indian motorcycle market) are coming out with their higher endproducts once again. Also it is rumored that Harley
Davidson and BMW intend tostart exporting bikes to India. This is possibly an attempt to gauge the size of themarket given that the import duty on bikes is a staggering 60%. The major threats posed are from the high cost-high performance bikes and the low cost-low mileage bikes (from china etc.). Let‟s see how Bajaj might be planning tocounter the twin threats.
Threat 1
- High cost-performance segment:This segment can be expected to be a niche segment in the near future.However Bajaj is already doing
R&D on coming out with 350cc and 500cc pulsars. Also with local manufacturing capability and given the time frame Bajajauto should be able to compete against them successfully given they come out
Marketing Strategies of Bajaj auto with consistent products. One more thing we need to keep in mind is thatbusiness India is not without its quirks, Yamaha
when it was expanding worldwide suffered losses in the Indian market and now was on the verge of closing operations few months back.
Threat 2
- Low cost-low mileage-non-performance segment:With increasing fuel costs the consumers are getting more and more mileageconscious, also initial cost and maintenance cost are major factors that influencebuyer‟s choice in India. We can safely assume that Bajaj auto is going to find ithard to ward off competition from this sector in near future. As such Bajaj needsto constantly innovate on its lower end product 150cc pulsar, Increase its mileage and probably try to cut costs by introducing economies of scale.
SECTION – IV4.Survey Analysis and Recommendations
Marketing Strategies of Bajaj auto
A primary survey has been conducted for customer behavior towards the bikes and their likes and dislikes on http://www.zoomerang.com
Survey Questionnaire and their respective interpretations
Q1: Which is your preferred brand?As we can see, most of the users have their preferred brand as Bajaj (52%) in asample of 600 responses. Other half percentage comes under other brands.Q2: How much power do you like in a bike?It can be seen that almost half of the people said that they like bike with 150 ccengine. It can be dependent on the price range because liking of high power
Marketing Strategies of Bajaj auto bikes is less as compared to 150 cc. More interpretations can be derived fromnext few questions.Q3: Price segment of the bike?58% people say, they would like to go with the bike, which is in between 40k and60k. This also goes in parallel with Q2 that people like
150cc bikes. It implies thatprice factor comes into mind of most consumers when they
purchase a bike andthat‟s why they are more diverted towards 150cc bikes.Q4: How much fuel-efficient your bike should be?54% people say that they like bikes, which have a mileage between 40kmpl to50kmpl. They do not like the bikes, which has a higher fuel consumption, whichimplies people are not ready to buy high power (180cc and above) bikes, as theyare low on fuel efficiency and high on price.
Marketing Strategies of Bajaj auto
Q5: Which bikes do you like in 150 cc segment?As it is clearly seen that Bajaj auto
150 DTSi has beaten other brands with highpercentage of 75% and other brands like
TVS apache, Hero Honda Achiever andother have constituted only 25%. This clearly indicates that Bajaj auto is one of the best in 150cc segment.Q7: Does Advertisement influence your decision in choosing a motorbike?Advertisements do affect the consumers in consumer‟s buying decision as seenfrom the result. 61% say that the advertisements impact them.
Marketing Strategies of Bajaj auto
It can be seen from above results that Bajaj is the best most of the parametersdisplayed above, be it mileage or price. Bajaj still needs to focus at its brand image because brand value of Hero Honda is more than
Bajaj. Bajaj needs tofocus on customer satisfact ion in best possible way. Brand image would automatically be established if Bajaj becomes more customers oriented.
Recommendations
As we have seen from the conducted survey that Bajaj auto or Bajaj bikes are the best in bikes segment but still we would like to give some recommendation toBajaj so that they can improvise.
1.
Long hour driving comfort is what is missing from Bajaj auto. So we wouldlike to recommend that Bajaj should introduce a better design for comfortfor long drives.2.As Bajaj is spending much on other accessories like digital speedometer or electric start, they must also spend on the comfort accessories to thedriver.3.With good power in the bikes comes a disadvantage like lower mileage. Bajaj should invest in new technology to get more mileage in high power bikes.4.Bajaj should introduce Tube less tires as an optional accessory.5.Bajaj can introduce Vehicle tracker/Central locking for
Bikes to prevent theft.6.Bajaj can introduce disk brake for Rear t i res as well, which is generallyseen in sports bike. This will give Bajaj an X-factor.
Marketing Strategies of Bajaj auto
1.CONCLUSION
Putting together these four sections on the analysis of Bajaj auto as a product, itsmarketing strategies, its competitors etc. has given us many insights into the two-wheeler market as a whole.Starting with the first section about the SWOT analysis of Pulsar, we coul d analyze the various external and internal factors, which contribute into the growthof Pulsar as a brand and the various opportunities, and threats it faces for itsfuture prospects. We learned about the various marketing strategies adopted byBajaj for Pulsar right from its inception and how they have been instrumental inbuilding the brand Pulsar. Right from its “Definitely Male” to its latest
“Pulsar-mania” campaign.In the second section, we analyzed the consumer behavior for
Pulsar in terms of purchase behavior, buying roles and decision-making process.
We segmentedthe Pulsar brand into various categories according cc of engine and analyzed theconsumer behavior for each. We also had the support of various cust om er surveys, conducted by us as well as from some external agencies to
substantiatethe analysis. This section helped us understan d h o w
Bike makers cater to various segments through various offerings and customer centric measures, incase of Pulsar these being “Probiking stores” and
“Extended Warranty” plans.In the third section we undertook the competitor analysis of Pulsar amongvarious categories from various companies. We understood the various strategies taken by these companies for their products and the effect this had onthe Pulsar sales. We understood the status and activities of the competitors likeHero Honda, Yamaha, TVS and foreign competitors.
Marketing Strategies of Bajaj auto
In the fourth section we analyzed the results of the survey conducted by us withrespect to different brands of bikes and compared them on some parameters likeprice, mileage etc. In the end, we concluded that Bajaj auto 150 DTSi is the bestbike in 150 cc segments over-powering other bikes, which include Yamaha, TVSand other brands.
Also, we were able to give recommendations to Bajaj and other bike companies, which would help them in improving the bikes and buildinga brand image.Thus overall, this project was an experiential way to understand the concepts of marketing and how they are applied in the real world.
2.REFERENCES
1.
Pulsar 150cc reviews –www.mouthshut.com
2.
Pulsar Club Site – www.pulsarclub.com
3.
Bajaj Auto site –www.bajajauto.com
4.
Buying roles model by Yoram Wind,
Frederick Webster – www.provenmodels.com
5.
Hero Honda Karizma -www.herohondakarizma.com
6.
Yamaha India -www.yamaha-motor-india.com
7. www.wikipedia.org
8.
TVS Motors -www.tvsmotor.in
Marketing Strategies of Bajaj auto
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