BRAND ANALYSIS OF ROYAL

ENFIELD
BY:
ASHISH JUDE MICHAEL (21012PGX105) , BALAKRISHNA P (2012PGX116), LIANZAL
VAPHAI (2012PGX113), P.BRAHAMIAH ( 2012PGX118), SATYABRATA SAHOO
(2012PGX127),VENKATESH RAO (2012PGX133)

INDIAN INSTITUTE OF MANAGEMENT, SHILLONG

BRAND ANALYSIS OF ROYAL ENFIELD

Acknowledgement
We would like to thank all the people who were involved with this project and whose
support and encouragement helped us complete the project. Indeed working on this
project has been a truly enriching experience for us as a team.
We are extremely grateful to Professor R.Kamle for entrusting our group with this
huge responsibility. We wish to express a profound sense of gratitude to Professor
Kamle for his generous suggestions and valuable insights, without which this project
would not have been a success.
Last but not the least, we would like to thank all our team members who participated
and contributed towards the successful completion of this project.
Entire Group

BRAND ANALYSIS OF ROYAL ENFIELD

Table Of Content
1. Executive Summary
2. Introduction
3. Product Line
4. Change In Strategy After Year 2000
5. Communication & Distribution
6. Missing Communication
7. Brand Analysis of Iconic Brand
8. Conclusion & Recommendation
Executive Summary
Executive Summary

Brand Analysis of Royal Enfield

Executive Summary
The Research is aimed at the study of Royal Enfield Brand in Indian Markets So far
how they have performed and suggestions for them to grab more market share and be
profitable. Every year, they have sold modest numbers but despite low numbers, they
continue to command a position of respect and awe in the Indian motorcycle market.
The objective of the study was to study the different product lines, marketing strategy
and Brand Management of Royal Enfield Bullets in Indian market.
1. Bullet riders are mostly Value-Expressive, with an internal locus of control
and a strong sense of independence.
2. The company has been cashing in on the iconic status it has and has done
little to reinforce its image amongst an exploding two-wheeler market.
3. The pricing of the motorcycle might also be looked upon as conservative.
Royal Enfield has for a while now targeted the youth market with lure of freedom.
However, they have done little to reinforce their position. Maybe advertising
campaigns targeted at the Value-expressive customer would enable the brand to reap
the benefits of its iconic position in a much more productive way. Also, most users
find it imperative for the company to improve its After Sales Service and Spares
availability.

BRAND ANALYSIS OF ROYAL ENFIELD

Introduction
Indian automobile industry
The automobile industry in India is the ninth largest in the world with an annual
production of over 2.3 million units in 2008. In 2009, India emerged as Asia's fourth
largest exporter of automobiles, behind Japan, South Korea and Thailand.
Indias automobile sector consists of the passenger cars and utility vehicles,
commercial vehicle, two wheelers and tractors segment. The total market size of the
auto sector in India is approximately Rs 540 billion and has been growing at around 8
percent per annum for the last few years. Since the last four to five years, the two
wheelers segment has driven the overall volume growth on account of the spurt in the
sales of motorcycles. However, lately the passenger cars and commercial vehicles
segment has also seen a good growth due to high discounts, lower financing rates and
a pickup in industrial activity respectively.
Major automobile manufacturers in India include Maruti Udyog Ltd., General Motors
India, Ford India Ltd., Eicher Motors, Bajaj Auto, Daewoo Motors India, Hero Honda
Motors, Hindustan Motors, Hyundai Motor India Ltd., Royal Enfield Motors, TVS
Motors and Swaraj Mazda Ltd.
With the economy growing at 9% per annum and increasing purchasing power there
has been a continuous increase in demand for automobiles. This, along with being the
second largest populated country, makes the automobile industry in India a very
promising one.
Indian two wheeler market
Ever since the old Lambretta scooter was replaced with the flurry of vibrant two
wheeler models, Indian two wheeler industry has seen a phenomenal change in the
way they perceive the Indian market. Two wheeler manufacturers are now competing
in an ever growing consumer market by bringing out new products and features. The
Brand Analysis of Royal Enfield


country has now grown into the second largest producer of two wheelers in the world.
Currently there are around 10 two-wheeler manufacturers in the country, and they are
Bajaj, Hero, Hero Honda, Honda, Mahindra/Kinetic, Royal Enfield, Suzuki, TVS, and
Yamaha.
There have been various reasons behind this growth. Because of poor public transport
system, the citizens found convenience in two wheelers. Added to this is the fact that
the average Indian still does not have the purchasing capacity for a more expensive,
four wheeler.
The Indian two wheeler industry can be divided into motorcycles, scooters and
mopeds. The consumer has changed his preference from mopeds to scooters and then
to motorcycles. The trends seen in the past few years include females increasingly
using two-wheelers for their personal commutation and various two wheeler
manufacturers designing vehicles specially to cater to needs of this segment. One of
the earliest revolutions in this industry was Kinetics introduction of the concept of
electronic/self-start and automatic gears which made two wheelers comfortable and
useable by women, when compared to old Bajaj Chetak advertisements which showed
middle aged females riding a Bajaj Chetak scooter. A recent trend in the industry has
been electric vehicles, which mostly leverage on their eco-friendliness and low
operating costs, but is still not accepted well due to the lack of reputation of the
manufacturers and lack of trust on technology, which is still being perceived in the
nascent stages, especially battery and inverters which prove to be very expensive
components. TVS recently leveraged this opportunity by launching a hybrid model of
their non geared scooter TVS Scooty. The end of the last decade saw Bajaj taking a
radical decision to do away with the Scooter range and completely concentrate on
motorcycles, especially stating change in customers preference as the main reason.
The customers are left without a choice in most cases than to migrate from the
traditional scooters of the Indian family to the all youthful bikes that ones son rides
to college.

BRAND ANALYSIS OF ROYAL ENFIELD


Profile of the Organization
In 1893, the Enfield Manufacturing Company Ltd was registered to manufacture
bicycles by 1893, as Enfield Manufacturing Co. Ltd. By 1899, Enfield were
producing quadricycles [ with De Dion engines and experimenting with a heavy
bicycle frame fitted with a Minerva engine clamped to the front down tube. In 1912,
the Royal Enfield Model 180 sidecar combination was introduced with a 770 cc Vtwin JAP engine which was raced successfully.
Royal Enfield motorcycles made in England were being sold in India from 1949. In
1955, the Indian government looked for a suitable motorcycle for its police and army,
for patrolling the country's border. The Bullet was chosen as the most suitable bike
for the job. The Indian government ordered 800 350 cc model Bullets. In 1955,
the Redditch company partnered with Madras Motors in India to form 'Enfield India'
to

assemble,

under licence,

the

350 cc Royal

Enfield Bullet motorcycle

in Madras (now called Chennai). The first machines were assembled entirely from
components shipped from England.

Royal Enfield are the makers of the famous Bullet brand in India.
Established in 1955, Royal Enfield (India) is among the oldest
bike companies.. Bullet bikes are famous for their power, stability
and rugged looks. It started in India for the Indian Army 350cc
bikes were imported in kits from the UK and assembled in Chennai. After a few
years, on the insistence of Pandit Jawaharlal Nehru, the company started producing
the bikes in India and added the 500cc Bullet to its line. Within no time, Bullet
became popular in India.
Bullet became known for sheer power,
matchless stability, and rugged looks. It
looked tailor-made for Indian roads.
Motorcyclists in the country dreamt to
Brand Analysis of Royal Enfield


drive it. It was particularly a favorite of the Army and Police personnel.

In 1990, Royal Enfield ventured into collaboration with the Eicher Group, a leading
automotive group in India, in 1990, and merged with it in 1994. Apart from bikes,
Eicher Group is involved in the production and sales of Tractors, Commercial
Vehicles, and Automotive Gears.
Royal Enfield made continuously incorporating new technology and systems in its
bikes. In 1996, when the Government of India imposed stringent norms for emission,
Royal Enfield was the first motorcycle manufacturer to comply. It was among the few
companies in India to obtain the WVTA (Whole Vehicle Type Approval) for meeting
the European Community norms. Today, Royal Enfield is considered the oldest
motorcycle model in the world,spanning 3 centuries and still in production and Bullet
is the longest production run model.
The company is marching on with its tagline- "Made like a gun, goes like a bullet"
Profile of the Products
Royal Enfield Bullet 350
One can be a part of classical prominence by
having a ride on Royal Enfield Bullet 350, a
macho bike which is stylish as well. The brawny
is laden with plenty of attention grabbing
features like traditional designing, astonishing
power of 18 bhp from air cooled, 4 stroke
engine, large wheels, and better sitting for
superior riding. This has been the classical offering from Royal Enfield and the
engineering and the design has remained unchanged over the years. It has remained
the flagship product with the other products being perceived more as derivatives of
this motorcycle rather than standalone products.
Royal
8

Enfield

BRAND ANALYSIS OF ROYAL ENFIELD

Bullet 500 (Cast Iron)

Royal Enfield Bullet 500 is a classic bike having vintage styling. The bike has handpainted pin stripes, a 4-speed transmission, double leading shoe front brake and was
touted as the powerhouse model with a whopping 27 bhp output. While the bike
looked mostly similar to the Standard 350cc offering, its bigger engine made it a more
potent vehicle to have on long rides.
Royal Enfield Bullet Electra 4S
Royal Enfield motorcycles were renowned for having problems starting because of
their CB Point Ignition systems. In an attempt to break this negative image, the
company came up with Electra. Electra was in effect a Standard 350cc but had a CDI
Ignition system.
This paved the way for the newer bikes from Royal Enfield which now have Digital
TCI as a a part of the standard package.
Royal Enfield Lightning 535
Looking for an image makeover back in 2001, Enfield came up with Lightning. It was
a Limited Edition 535cc motorcycle. The
single-cylinder, air-cooled 535cc engine was
the largest SCAC engine for any motorcycle
in the world. The bike received limited
acceptance

amongst

users

and

was

discontinued after 2006 but it succeeded in

rebuilding the power-bike image of Royal Enfield amongst the enthusiasts.
Royal Enfield Bullet Electra 5S
With Electra 4S receiving quite a lot of
acceptance, Royal Enfield decided to add
a

few
more

Brand Analysis of Royal Enfield


features to align themselves with the more contemporary manufacturers. From a righthand side 4-speed gear shift, they moved to a left-hand side 5-speed gear shift. Disc
brakes also made an entry, with the 280mm disc being the largest in the country. This
has been one of the most successful models from Royal Enfield and was to a large
extent responsible for the revival of the brand during the turn of the millennium.
Royal Enfield Bullet Machismo
Machismo is Royal Enfields chrome monster. Resplendent with chrome, they are
available in both 350cc and 500cc variants. They were the first bikes to have the now
legendary Lean Burn AVL Engines. These were the result of Royal Enfields
collaboration with an Austrian Engine manufacturer, AVL.
Royal Enfield Thunderbird Bike
Royal Enfield Thunderbird is a powerful bike
which for the first time broke off from the Bullet
look. They were modeled similar to the cruisers
available worldwide and were positioned as a
tourers choice. It has developed into a strong
marquee itself and continues to remain a brand
name despite engineering changes that went into it. It started as a 350cc AVL SingleSpark Engine. Today the Thunderbird Twinspark is a 350cc Unit Construction Twinspark Engine with about 20 bhp output.
Royal Enfield Classic
In 2008, Royal Enfield unveiled its latest offerings the Classic 350 and the Classic
500.Styled in the vintage 50s look, they came with
18 inch tyres, Unit Construction engines and the look
and feel of a vintage. Priced at 1.3 lakhs and 1.7 lakhs
respectively, the 350cc and the 500cc variants are
slowly gaining popularity amongst users for the lower
ride height, the greater power and above all, the
vintage feel of the bike.

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BRAND ANALYSIS OF ROYAL ENFIELD

Change in Strategy after Year 2000:

Marketing Mix:
Product: Product which is the ruff & tuff all terrain motorcycle. It has been upgraded
with technology such as EFI (Electronic Fuel Injection) for better response, heavy
cast iron diesel engine of the earlier model has been replaced by a lighter but equally
power full single cylinder four strike petrol engine which is made from aluminum.
The gears have removed from the right side to left side to need general standards. But
it was ensured that the VINTAGE and Macho appeal of the bike is not damaged.
Place:
The market of Royal Enfield can be divided basically into two segments:
1. Metropolitans: Teir 1 &Teir 2 Cities.
2. Small Cities: Teir 3 &DH (District Headquarters)
But in both the market it commands premium position.Hence the showrooms must be
opened in the prime locations of the cities irrespective of metropolitans or small
cities.
Promotion:
It is promoted in MENs magazines, Adventure magazines, local print media,
adventure trips ie. Himalayan Odyssey and Fan Clubs.
Price:
It is premium product hence demands a premium price.
Segmentation, Targeting & Positioning (STP)
Segmentation: It is segmented as a leisure and adventure curser bike. Though in Tier
3 & DH market it is associated with the social/status symbol.
Targeting:It is targeting Bikers in the age group of 25-45 years of age, they are
working executives as in the case of Tier 1 & 2 Cities and young, rich & powerful in
terms of Teir 3 & DH.

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11


Positioning:In Tier 1 & 2 cities it is positioned as a leisurely, adventure, curser bike.
But in Tier 3 & DH it is a bike which shows your social status is a symbol of your
power in society.

Communication and distribution

Indias first cult bike.

Its an iconic brand to stay true to character and be proud of what is represents.

Customers are value expressive, sense of independent

Campaigns use cinema, print media

Leave Home campaign - Thunderbird

Exhibitions Photography

The art of Motor cycling 2010.

Sponsors trips/events

Mark rides, Member rides through out the year

Organizes Himalayan Odyssey

Publications The beat, coffee table book etc.

Forums, clubs, events

No proper service channel structure

Limited number of Royal Enfield zones

Established the field quality RAF

New company owned showroom

After sales service is problem.

Dealerships and expansion

The Missing Communication

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BRAND ANALYSIS OF ROYAL ENFIELD


If we observe through the Ad word the first Ad of Bullet in year around 1960 shows
bullet as SHAAN KI SAWARI , which hits the bulls eye of showcasing it as a
premium product and associated with pride of the owner.
Then we can see the strategy to attract the youth, when Bullet was shown in Sholey
with Jai &Veeru driving it in the famous song YEH DOSTI HUM NAI
CHORENGE this gave a boost to brand equity of Royal Enfield. It was the 1970 and
it included the youth in the market base of bullet.
The 1980s saw the entrance of

Yamaha & Hero Honda. Yamaha was having

excellent pick up and Hero Honda had excellent mileage. The problem started when
Royal Enfield wrongly identified them as its competitors and started to compete with
them. They shifted their focus from the present loyal customers to the mass & much
younger generation. Their Bullet- Machismo Ad clearly shows the confusion in
their strategy. First time in the history a lady model was used, bullets was never
shown as a tool to impress girls. They had shown the impossible stunts which are
impossible

with

bike

like

Bullet.

Bullet

was

for

Joy

of

Riding

,Adventure,Shaan. Thus the phase from 1990 to 2000 can be called a dark phase
and it nearly killed the Royal Enfield brand. Even the new masters of Royal
Enfield who acquired them in 1994 were planning to shut down the Brand.
But things change a young man who was a die hard fan of Royal Enfield Mr. Lal took
charge of Royal Enfield he upgraded the bikes with modern technology but
keeping intact the Vintage and Macho attributes of Brand. He promoted Fan
Clubs, increased visibility through accessories, Organized events like Himalayan
Odyssey and launched the Ad campaign in 2004 JAB BULLET CHALE TU
DUNIYA RASTA DE. He re-launched the Bullet Classic series. And all this
revived the brand Royal Enfield.
Still there are some issues, which Royal Enfield has to solve but never the less it
seems they are on the right track.

The brand Analysis of Iconic Royal Enfield

The year 2000 could have been decisive. That was when the board of directors
at Eicher Motors decided to either shut down or sell off Royal Enfield - the company's
Brand Analysis of Royal Enfield

13


Chennai-based motorcycle division, which manufactured the iconic Bullet
motorbikes. For all its reputation, the sales of the bike was down to 2,000 units a
month against the plant's installed capacity of 6,000; losses had been mounting for
years. Though the bikes had diehard followers, there were also frequent complaints
about them - of engine seizures, snapping of the accelerator or clutch cables, electrical
failures and oil leakages. Many found them too heavy, difficult to maintain, with the
gear lever inconveniently positioned and a daunting kick-start.
Just one person stood up to the board, insisting Royal Enfield should get
another chance. He was Siddhartha Lal, a third generation member of the Delhi-based
Lal family, promoters of the Eicher group of companies. Lal, then 26, was an
unabashed Bullet fan: he even rode a redcoloured Bullet while leading the baraat
(procession) to his wedding venue, instead of the traditional horse.Lal felt Royal
Enfield could still be saved. The bike had its reputation, a cult following, an instantly
recognisable build, and aspirational value. Changes had to be made to keep up with
the times and make the bike more acceptable, and therein lay the problem. Royal
Enfield fans liked the bikes exactly the way they had always been
Retaining the bikes' rugged looks was a given, including the build, the design
of the head lamp and the petrol tank. But should the gears be shifted close to the
rider's left foot - as in most bikes - or retained on the right side? The question gave
Lal and his team many sleepless nights, since long time users were dead opposed to
the change. The engine was another thorny question. The old cast iron engine was a
relic of the past. Its separate gear box and oil sump design made it prone to oil leaks
and it seized up very often. Its ability to meet increasingly strict emission norms was
also suspect. A modern aluminium engine would eliminate these problems, but it
would lack the old engine's pronounced vibrations and beat - which Royal Enfield
customers loved. Laws of physics made it impossible to replicate these with the new
engine.
But the new engine, unlike the old, had hydraulic tappets, a new engine
arrangement, new metal and fewer moving parts. Obviously, it did not produce the
vibrations and the beat of the old, but international experts were consulted and sound
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BRAND ANALYSIS OF ROYAL ENFIELD


mapping carried outfor over 1,000 hours to ensure it produced the maximum rhythmic
vibrations possible and a beat, which was 70 per cent of the amplitude of the original.
The new engine had 30 per cent fewer parts and produced 30 per cent more
power than the old, with better fuel efficiency. By 2010, all Royal Enfield models had
begun to use the new engine. Two other problems needed to be addressed: the quality
of some of the components Royal Enfield bikes were using, and the sales experience.
To tackle the first, shop floor processes were fine-tuned, while suppliers were
exhorted to improve quality levels. Royal Enfield also embarked on a large scale
internal exercise to tone up performance.
Today, Royal Enfield's problems are of a different kind. How should it scale
up without diluting brand equity? It also faces challenges from iconic global brands
such as Harley-Davidson which has entered the Indian market. With other options
available, will its customers continue to sit out the six-month period it takes to
provide deliveries?
The questions before Royal Enfield now: what is the pen profile of its
prospective buyer? How is this pen profile different for different offerings of Royal
Enfield? For instance, Bajaj says while its 'Pulsar' is an India bike (urban), its Boxer is
a 'Bharat' bike (rural). In this sense the buyers for each of the company's offerings
must be clear. Also will the niche that appealed yesterday, appeal today? What should
Royal Enfield do to get today's aspirers on board? What are the volumes it hopes for
in this niche? How to stay profitable there? These will be the questions for tomorrow.
In order to augment the production for growing market demand, your
company has acquired 50 acres of land for construction of its new manufacturing
facility at Oragadam, Chennai, Tamil Nadu. This will enhance Royal Enfields annual
production capacity to 150,000 units. The new facility is expected to commence
production in first half of 20131.
The Company is strenuously working to ensure that the opportunities are
converted into profitable growth. A critical element in this strategy is to continually
expand the customer offering. At the 2012 Auto Expo, Royal Enfield previewed - its
Brand Analysis of Royal Enfield

15


new motorcycleThunderbird 500. It is fitted with UCE (Unit Construction Engine)
and a host of design enhancements. - its all-new Caf Racer model which will
launched in 2013 - a range of purpose built motorcycle gear. The collection included
biker apparel, bike and riding accessories.
Every year, the Company conducts a study to develop a comprehensive 360
view on the opportunities, risks and threats to the business. These include areas such
as markettrends, new competition, changing customer preferences, disruptions in
supplies, product development, talent management etc.
The Company has robust ERP systems based on SAP platform. This ensures
high degree of systems based checks and control.
The Royal Enfield unit was able to produce and sell 42% more motorcycles in
2011 as compared to 2010. Total sales volume of Royal Enfield in 2011 was 74626
motorcycles as compared to 52576 in 2010. Total income for the year was 6,709.5
MINR, 51.6% growth over previous year1.
Even during 2008 recession, when auto sector was severely damaged, Royal Enfield
Bullets had very good performance in terms of sales. It can be seen from the below
bar graph

Conclusion and Recommendations

The conclusion is

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BRAND ANALYSIS OF ROYAL ENFIELD


1. The buying behavior is governed predominantly by the need for Power and
respect for the iconic Brand.
2. The internal locus of control is by and large dependent on the Sense of Control
the motorcycle offers and also on the Sense of Freedom that users associate
with it.
3. Users are mostly Professional Males, 25-45 years of age, including some
students.
4. Users display mostly Value-Expressive behavior and Ego-defensive behavior
is not seen amongst responses.
5. People who choose not to buy Bullets do so because of high price,
maintenance and spares hassles and also because some feel they are not built
for it.
6. Advertisements are rarely recalled and are highly ineffective amongst nonBullet riders.
7. Bullets are perceived as low on cost-effectiveness, but high on ride comfort
and reliability.

The Recommendations are

1- Improved Sales and Service Network by Franchise or dealership on Profit
Sharing Basis
Royal Enfield doesnt have a very good sales and service network. Marketing
the product is not limited to sales only. There should be extensive network of
service centers so that customers have a very good bullet experience The
customer should get the service network similar to that of Maruti Suzuki.
Also a helpline number should be launched, and on calling this, customers can
avail of service even in some remote localities
2. Marketing Communication should focus on satisfying the needs for Respect,
Power and Comfort.
3. A non-flamboyant well-built brand ambassador may be chosen to represent
the Brand. John Abraham was choosen as Brand ambassador for 1 yr but some
macho personality like- Sanjay Dutt or Akshya Kumar should be chosen to
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17


give a young and adventurous personality to the brand. They should display
bullet in some action movie, as it was shown in Sholay to attract the young
towards it.
4. RE should tie up with adventurous students or corporate executives and
arrange adventurous trips on weekends to locations- like Cherapunji, lonaval
etc. brand Amabsaddor should join them occasionally to promote the event.
Television Commercial spots are more remembered than Print Advertisements
even when they are over 6 years old. So users should be given the chance to
video shoot their trips and share with other TV viewers. Lucky users should be
offered a chance to meet the Brand executive on next trip
5. They should tie-up with adventurous brands like Thumps Up or Mountain dew
to give a complete revamp of branding.
6. The RE Apparels available on their exclusive stores should be made available
in college counters to make them available to the young students. It will create
awareness among youth and more of them will feel proud using the apparels
like- bag, jacket, boots etc
7. They can plan to export RE to other developing economies like- Brazil, China
and Russia to capture the market there
Royal Enfield should concentrate on building around the iconic status it already
enjoys if it plans to attract customers migrating to other manufacturers.

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BRAND ANALYSIS OF ROYAL ENFIELD

Brand Analysis of Royal Enfield

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