Market Segmentation

The division of a market into different homogeneous groups of consumers is known as market segmentation. Rather than offer the same marketing mix to vastly different customers, market segmentation makes it possible for firms to tailor the marketing mix for specific target markets, thus better satisfying customer needs. Not all elements of the marketing mix are necessarily changed from one segment to the next. For example, in some cases only the promotional campaigns would differ. A market segment should be: • • • • • measurable accessible by communication and distribution channels different in its response to a marketing mix durable (not changing too quickly) substantial enough to be profitable

A market can be segmented by various bases, and industrial markets are segmented somewhat differently from consumer markets, as described below. Consumer Market Segmentation: A basis for segmentation is a factor that varies among groups within a market, but that is consistent within groups. One can identify four primary bases on which to segment a consumer market.
• • • •

Geographic segmentation is based on regional variables such as region, climate, population density, and population growth rate. Demographic segmentation is based on variables such as age, gender, ethnicity, education, occupation, income, and family status. Psychographic segmentation is based on variables such as values, attitudes, and lifestyle. Behavioral segmentation is based on variables such as usage rate and patterns, price sensitivity, brand loyalty, and benefits sought.

The optimal bases on which to segment the market depend on the particular situation and are determined by marketing research, market trends, and managerial judgment. Business Market Segmentation: While many of the consumer market segmentation bases can be applied to businesses and organizations, the different nature of business markets often leads to segmentation on the following bases:

Geographic segmentation - based on regional variables such as customer concentration, regional industrial growth rate, and international macroeconomic factors. Customer type - based on factors such as the size of the organization, its industry, position in the value chain, etc.

Buyer behavior - based on factors such as loyalty to suppliers, usage patterns, and order size.


Pulsar is one of my favorite brands both as a bike rider and as a marketer. This bike has virtually redefined biking in this country. Pulsar launched in 2001 is the market leader in the 150 cc + performance bike segment. More than that , this brand changed the fortune of Bajaj Auto Ltd. Before the launch of Pulsar, Indian bike market was divided broadly into Economy , Executive and Premium Bikes. In 1999 Hero Honda created a new segment of 150 cc performance segment with its CBZ. But Pulsar came and gave a new life into the Performance segment. Although not a pioneer, Pulsar made the performance segment one of the fastest growing segment in the two wheeler market. It was not only the bike's performance that triggered the brand becoming an icon, a major part of the success was due to the classic advertising campaign by O&M. According to agencyfaqs, the birth of the "Definitely Male" campaign is interesting. The creative honchos found the new product from Bajaj distinctly different. It was Bajaj's first bike without Kawasaki label. The new bike was an R&D and design marvel .Pulsar was designed by the renowned design house Tokyo R&D. O&M knew that the communication of this brand should also be different.Starting with lot of ideas, O&M stuck upon the Big Idea of India's He-Bike. Although lot of bike take the persona of Macho bikes it was more oriented towards being "sexy". The Big Idea was to position the bike as World's first bike endowed with a Sex (Gender).Thus born the classic campaign of all times " Definitely

Male". The campaign together with the design and performance catapulted the brand into stratospheric sales level. Bajaj targeted the 18-24 with Pulsar but later found that the brand appealed to a much older audience. This helped Bajaj to change its target audience to 21-35 years. Unlike its old ways of doing things, Bajaj did not rest with the laurels. It knew that Pulsar is the golden key to control the entire bike market. Hence Pulsar got undivided attention from the company. In 2003 another milestone event happened in the product lifecycle of the brand. Bajaj launched its new technology DTSI. DTSi stands for Digital Twin Spark Ignition which delivered more power and efficiency. The increased performance of the brand took Pulsar to greater heights. 2004 and 2005 saw some cosmetic changes in the brand which excited the customers and thus cementing Pulsar's position in the market.


Good DTSi technology engine Stylish look and good mileage Very good pick up in moving Good breaking system Good shock absorbing system Stylish digital speedometer Excellent breaking system

DIS ADVANTAGES The bike heavy feels insecurity. Uncomfortable handling After 50000 km pulsar needs more maintenance Sensitive dis breaking


Suzuki Motorcycle India Pvt. Ltd., a subsidiary of one of the world’s leading two-wheeler manufacturer Suzuki Motor Corporation, Japan announced their foray in the scooter segment while unveiling its latest offering to the Indian customer, the Suzuki ACCESS 125 a scooter. A Mid-sized scooter, ACCESS 125 is sporty and designed exclusively for every member of the Indian family. Powered by a 125cc air cooled, 4-stroke engine, Access 125 comes with automatic transmission and better mileage per liter of fuel. Its attractive and aerodynamic styling also assures of a rust free body thus reducing maintenance expenses.

In addition to its sporty, stunning and stylish design, Suzuki ACCESS 125 is equipped with many other attractive features such as Xtra Torque Performance (XTP) for enhanced Performance and excellent riding quality.Central locking system with unique shutter mechanism for a single control point for the entire machine will help avoid theft. For safety and convenience, this scooter is equipped with unique Multireflector Headlamp with focused and brither vision.The ACCESS 125 will be available in an appealing range of 5 colors such as Red, Blue, Black, Grey and Silver. ACCESS 125 scooters in all these colors will be available at Suzuki dealerships across the country.

The Honda Activa is an amazing bike. Ask anybody who owns it and they will vouch for it. Let me introduce you to this 2 wheeled marvel and show you why Honda is a master of their art of building 2 wheelers.

Since its launch in 2001 the Honda Activa has become a hit with both men and women as it caters to the needs of both genders. Practical, comfortable, convenient, reliable, durable, maintenance and stress free, workhorse, family carrier etc… are some of the adjectives associated with the Activa. The bike has a 102 cc engine with v-matic 4-speed transmission and 7 bhp of power. The only shortcoming is, the bike gives only 40 km/ltr in city and 45 on highway. I am sure this is a small price to pay as once you ride the bike and feel the refinement of the engine even at 70 km/hr you won’t mind about mileage at all As we knowing that Suzuki Access 125cc is definitely competing the Honda Activa , then we coming to the technical conditions

1. Suzuki Access is more efficient technology than Honda Activa. 2.Suzuki is also having market plan is quick delivery ,it means if we come to the Honda Activa, there is so much uncomfortable bike delivery , customer dissatisfaction and also price of Honda Activa is very higher than Suzuku Access but the engine capacity of Honda Activa is 102cc and Suzuki Access engine capacity is 125cc.

BAJAJ AUTO Pvt Ltd is one of the leading company in two wwheeler manufacturing company in india .It is the first indian two wheeler manufacturing company also.Honda and Suzuki are competating in two wheeler scooter world.In this Hero Honda is already inn.But Bajaj released only one two-wheeler scooter bike names as Bajaj Kristal . The Bajaj Kristal DTS-i is a sleek looking two-wheeler that has been designed exclusively for the new age urban women. This scooter is very easy to ride in the heavy traffic, is light weight and comes in attractive colors like red, black, blue and silver. But what takes the cake is the fact that this is the first un-geared scooter introduced by Bajaj. The Bajaj Kristal DTS-i is equipped with technology like Digital Twin Spark Ignition, SNS (Spring-in-Suspension technology) and the ExhausTEC. While Kristal DTS-I has a 95cc engine and delivers a power of 7.2 Ps (5.38 KW) at 7,500 rpm, the maximum torque of this bike is around 7.66 Nm at 5,500 rpm.

Above details of bike ,this bike was manufactured only for women ,this technology has to improve for making family bikes .considering this reason Bajaj Kristal is not the competator for Honda Activa 150cc and Suzuki Access 125cc.

3. MOTOR CYCLE SEGMENT: In the midst of the festive celebration of the colorful Auto Expo 2010, brought to you live by BikeAdvice in, we bring in our regular article on the monthly sales figures of our Indian two wheeler manufacturers. Broadly speaking, sales have been on a constant rise after the black clouds of recession and every company is looking forward hoping for the best. So let’s see how our manufacturers did in the last month of the bygone year. HERO HONDA: Well, there is no hiding from the fact that, Hero Honda has been constantly ranking the biggest selling automobile company in the world for the past eight years and the lead simply seems to be growing bigger. December 2009 saw Hero Honda an upsurge of an unprecedentedly massive 74 percent. The company sold 3,75,838 units as compared to 2,15,931 units sold during the corresponding month last year. Recently Hero Honda launched the much awaited upgraded version of their premium 223cc Karizma, named Karizma ZMR with PGMFi and a host of other features. Hero Honda is expected to concentrate on the entry level 100cc segment in the times to come. BAJAJ AUTO: Countries second largest two wheeler manufacturer, Pune based Bajaj Auto, recorded a remarkable increase of 86 percent in December 2009. Bajaj Auto sold 2,19,920 motorcycles as compared to the meager 1,18,510 motorcycles it sold in December 2008. Total two wheelers sale stood at 2,20,429 units as compared to 1,19,215 units sold during the corresponding month of 2008 registering an increase of 85 percent. Bajaj also registered an impressive 26 percent increase in the number of units it exported. Total exports stood at 91, 369 units as compared to 72,744 units exported in December 2008. Bajaj has been concentrating more on the Pulsar and Discover brands of late because of the profit margins they provide along with the brand premium they command over other brands. They sold 86,769 Discovers (which includes Discover 135 and Discover 100) and 44,518 Pulsars which included Pulsar 150, Pulsar 180, Pulsar 220 and the recently launched Pulsar 135 LS. Bajaj launched the smallest Pulsar (Pulsar 135 LS) in December which is expected to take the company’s sales to a million units per year. Bajaj is all set to launch the streetfighter (non- faired) version of their premium bike in India (Pulsar 220 DTSI F) which would be named as Pulsar 220 DTSi S at a reduced price.

TVS MOTOR: Indias third largest manufacturer, Chennai based TVS Motors, also had an impressive time at the sales tally. TVS recorded an increase of 34 percent in December 2009 registering total two wheeler sales of 1,19,701 units against 89,285 units they managed to sell in December 2008. Domestic sales of the company increased by 42 percent with the firm recording 1,02,479 units compared to 72,355 units in the last December. Motorcycles, which have been the major contributors for TVS Motors of late, also witnessed 24 percent growth in sales registering 49,560 units this month as against 40,057 units sold in December 2008. Scooter sales also saw an

upsurge of 45 percent selling 21,566 units against 14,912 sold in corresponding December last year. After a continues negative trend shown by exports, TVS managed to register a marginal 2 percent increase registering 17,222 two wheelers as compared to 16,930 units it managed to export in December 2008. TVS recently launched a 125cc scooter, Wego and an innovative clutchless bike Jive which would be launched all over India in the times to come. TVS is also expected to launch a sub 200cc bike in the near future along with an upgrade to its existing Apaches. YAMAHA INDIA: Yamaha, which have been showing positive trends after the launch of the R15 and the FZ series, showed a decline in sales for the first time after a long period. Sales in December 2009 dipped 15.15 percent to 13,612 units as compared to 16,043 they managed during the same month last year. However, Yamaha is all set to launch plethora of smaller volume enhancing bikes which would definitely see Yamaha back in positives pretty soon. Yamaha is also expected to roll out an updated version of their flagship model, the YZF R15 pretty soon. SUZUKI INDIA: Suzuki Motorcycle India Pvt. Limited (SMIL) registered a whopping 61 percent increase in its December 2009 sales. The company managed to sell 14,806 units of two wheelers as against 9,196 units they managed to sell in December last year. Suzuki attributed the growth momentum to the fantastic response received to its 125cc scooter Access and the 150cc powerful commuter bike, GS150R. Currently, Suzuki is concentrating on enhancing its dealer base to better the penetration levels in the country so that they can provide better service to the buyers. Honda Motorcycle and Scooter in India (HMSI) did not publish open their sales data. According to SIAM (Society of Indian Automobile Manufacturers), two wheeler sales grew 77 percent at 5.92 lakh units against 3.35 lakh units recorded in December 2008 which reflects the awesome response the two wheeler industry received and also demystifies the fact that the black clouds of recession are almost over. The growth is also a reflection of the fact that Indian economy has recovered better than most of the other economies of the World. Automobile companies are investing a lot in the Research and Development of new and exciting technologies to provide better products and the rest is being taken care by the competition. Looking at the technology display fest in the ongoing Auto Expo 2010, we are set sure to witness some fine products from some of the finest companies in India.

ECONOMIC ANALYSIS OF BAJAJ AUTO: Countries second largest two wheeler manufacturer, Pune based Bajaj Auto registered 52 percent growth compared to the corresponding month last year. Since the start of this year, Bajaj has been on a roller coaster ride advancing further with each passing month. With the sales declining last year, Bajaj was struggling to keep pace with the competition. Last month Bajaj declared the second quarter as the best ever for Bajaj and things look even better this quarter with the way Bajaj has kicked off this third quarter. During October 2009, Bajaj managed to sell 2,49,974 two wheelers which comprised of 2,49,681 motorcycles. Last October these figures were 1,65,477 and 1,63,850 respectively. This is the second month on the trot in which Bajaj has managed to sell close to 2.5 lakh two wheelers. Last month Bajaj sold 2,49,795 two

wheelers. Similar to the previous month, Bajaj sold 55,413 Pulsars and 95,139 Discovers which caters to the company’s policy of yielding maximum from its sales by selling more profitable bigger and sporty bikes in majority. Bajaj sold 127 units of the flagship Kawasaki Ninja 250R which was launched on 7th October 2009. Along with these Bajaj also sold 30,481 three wheelers which were 16 percent more than 26,363 units sold in October last year which takes the total tally of vehicles sold in October 2009 to 2,80,455 units. Out of these, exports formed 84,012 units which were 12 percent more than last October and were also the highest ever for Bajaj.With the festive season over, a lot needs to be seen in the coming months as to how would Bajaj perform. But currently, there seems to be nothing stopping Bajaj.

4. Bajaj Auto is in the process of setting up a chain of retail stores across the country exclusively for high-end, performance bikes. These stores are called “Bajaj Probiking". Fifty two such stores have been opened across the India. Catering to demand in this sector requires a strong and effective distribution network as consumers are more demanding and expect delivery on time. Early delivery is a cause of delight for customers. With such vast global and Indian rural presence, designing an efficient distribution system becomes a complex task even for a company like Bajaj Auto. Lot of time and effort goes into designing a strategy based efficient distribution system.

Product Segmentation The company classifies motorcycles into three segments, based on consumer categories and approximate price points. These are: Entry Segment: These are typically 100 cc motorcycles at a price point in the neighbourhood of Rs.35000. Bajaj Auto has a presence in this segment through the Platina. Here, Bajaj Auto has been a major player and despite an overall market degrowth, it accounted for 34% of this segment in India in 2008-09. Executive segment: This largely comprises 100 cc to 135 cc motorcycles, priced between Rs.40000 to Rs.50000. Bajaj Auto has two brands in this segment, namely XCD and Discover. These are sleek, high performance bikes with price points in excess of Rs.50000. They are present here with their flagship brand, the Pulsar and cruiser, the Avenger. They dominate this space with a domestic market share of more than 47%. Key competitors (3 wheeler)

Bajaj manufactures commercial vehicles for passenger carrier as well as goods carrier other players in the three-wheeler segment in India are Mahindra and Mahindra ,

Piaggio and atul auto. Bajaj is facing tough competition by aggressively launched Mahindra gio

Organization Structure

Supplier Detail

Key suppliers: Bajaj auto has approximately 198 suppliers for their raw materials. Some of the key suppliers are:-

JBM MRF & Dunlop –

Frames tires

Minda Reinder – Endurance – Varroc –

locks & ignition system headlamps & lights brakes, clutch & Cast wheel Plastic parts & Digital Meter

Max auto components –ignition system and switches Silco cable – Makino industry – wires and cables Brake shoes . Brake lining, clutch center

Inventory policy-

Bajaj auto maintains seven days inventory . Demand Estimations were based on Panel Regression, which takes into account both time series and cross section variation in data .All the Mediators are connected with each other through IT linkage to know exact status of delivery of goods

With operations spanning to such vast geographies, managing a supply chain globally becomes more and more complex. In countries where Bajaj perceives a strong market potential, they establish a tie up with one major industrial establishment eager to invest in the project. This investment may include setting up strategic manufacturing or assembly units, apart from a well-established nation-wide network for marketing, distribution and after sales services. These investors who form alliances with Bajaj Auto are termed as “Business Partners”. Bajaj Auto offers a number of services to its business partners. They include: Training in sales, service and spare parts management based on the Bajaj distribution system Active support for setting up manufacturing facilities overseas including transfer of technical know-how Assistance in setting up an assembly plant for assembly of vehicles from complete knocked down (CKD) kits Selecting of machinery and equipment and training of technical personnel, all in a phased manner as required by the regulations in the recipient country Active support in setting nation-wide dealer network, also involving identification and recommending suitable partner who would assist the distributor in Business growth

Distribution Detail

For distribution bajaj auto uses mix of depots and Cnf agents. This is completely dependent on the distance of manufacturing location from dealer point .For example due to extensive distance from manufacturing plant from west Bengal to north-east India ,there exist a depot in Khadakpur with capacity of housing 800vehicles. There are similar depots in Punjab , Rajasthan and southern India.

Dealers Like mentioned above, the company has a network of 498 dealers and over 1,500 authorised service centres and 162 exclusive three-wheeler dealers spread across the country. Around 1,400 rural outlets have been created in towns with population of 25,000 and below. The current dealer network is servicing these outlets. Dealers can be classified under 3 heads. They are as follows: COCOThese are Company Owned & Company Operated showrooms. These concepts exist only for Pro-Biking showrooms. Here Bajaj Auto has tried showcasing their muscle power in high end biking segment. The concept has evolved very fast and now there are 52 Pro-Biking showrooms in the country. The company itself does not take any order from the customer in these showrooms. The giant dealer of the region who is acting as a logistics partner for the pro-biking concept takes the order on behalf of the company and fulfils the customer requirement.

CODOThese are Company Owned & Dealer Operated showrooms. In case of this concept, showrooms are owned by the company but the operations in the showroom are managed by the dealer. This is generally the case where Bajaj wants to provide the dealer financial benefits considering the high working capital requirement of the company. DODOThese are Dealer Owned & Dealer Operated. These dealers are fewer in number because they are generally the giant dealers who are the financial muscle for the company. In our talks, the management indicated that the top management wants to do away with this concept. The reason behind this is that the bargaining power increases in the hands of the dealer, which puts the company in an knotty situation. National Level Partnerships There is an exisisting generic channel which is used for segmentation of this category of two-wheelers and three wheelers.

Transport & Logistics This function of distribution is not owned by the company in any form. This is outsourced in to the third party vendors. The third party here is Transport Corporation of India (TCI) and a few other private vendors. The fleet to be transported is customdesigned for Bajaj Auto by the vendor. Key Facts  There are twenty vendors all across India  OSL  Jamuna Transport  Sumit Transport  A Transit Insurance Compliance Letter(TICL) is signed between the two parties  The local level sub-dealer sometimes gets to decide the last mile logistics, as he can decide to pick up the vehicles himself or have it transported to him  Logistics of the vendor is decided by the company  Freight charge is built-in in the product price Bajaj selects those suppliers who provides majority of the required raw materials together. The company believes in situation so if any suppliers do not keep their requirement so at that time bajaj left the contract.

Relation with the supplier firm : B.ajaj auto lt believes in good relationship with its suppliers and customers. The suppliers who supply raw material to the company, Bajaj auto pay them regularly. If any when advanced payment required Bajaj also pay advance for bulky consumption. During annual day of the company, Philips rewarded those suppliers who contracted with company for whole year and survive company without any problems. Services provided by Bajaj Auto to the dealer  Workshop Training  In a month:  30-40 Mechanics can be trained per dealer  15-20 Sales personnel can be trained per dealer  New Product Launch  Information is percolated around a month before the product is to be launched  The date of launch can be rescheduled in case the current stocks of the dealer are not getting cleared.  Promotional Activities  The cost of sending the staff to the Pune branch for training is borne by the dealer


Trail balance of ABC Auto as on
Debit(amount) Particular Bank loan RS(000) Credit(amount) RS(000) 12,000







Purchases Trade creditors Sales Sundry creditors

12,400 11200 14600 1,620



Banks loan interest


Other expenses








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