Bajaj Auto 2011

Bajaj Auto

DIPLOMA IN MANAGEMENT
ADANI GROUP – SECOND TERM

MARKETING MANAGEMENT –
ASSIGNMENT 1

PROF. PRABHAT KUMAR YADAV

Submitted by
SHALIN SHAH
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Contents
Bajaj Auto ................................................................................................................................................ 3
About the company ................................................................................................................................ 3
Product Portfolio ..................................................................................................................................... 3
Products in 150cc category ..................................................................................................................... 4
SWOT Analysis......................................................................................................................................... 5
BCG Matrix Analysis ................................................................................................................................ 6
Porter’s 5 Force Model ........................................................................................................................... 7
Market Segmentation, Targeting and Positioning .................................................................................. 7
Bajaj and its Competitors ...................................................................................................................... 11

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Bajaj Auto

About the company

Bajaj Auto is a major Indian vehicle manufacturer headed by Rahul Bajaj. It is based in Pune,
Maharashtra, with plants in Chakan (Pune), Waluj (near Aurangabad) and Pantnagar (Uttaranchal).
The oldest plant at Akurdi (Pune) now houses the R&D centre Ahead. Bajaj Auto makes and exports
automobiles scooters, motorcycles and the auto rickshaw.

The Forbes Global 2000 list for the year 2005 ranked Bajaj Auto at 1,946, although it does not
feature in the 2010 list.

Over the last decade, the company has successfully changed its image from a scooter manufacturer
to a two wheeler manufacturer. Its product range encompasses scooterettes, scooters and
motorcycles. Its real growth in numbers has come in the last four years after successful introduction
of a few models in the motorcycle segment.

Bajaj Auto came into existence on 29 November 1945 as M/s Bachraj Trading Corporation Private
Limited. It started off by selling imported two- and three-wheelers in India. In 1959, it obtained
license from the Government of India to manufacture two- and three-wheelers and it went public in
1960. In 1970, it rolled out its 100,000th vehicle. In 1977, it managed to produce and sell 100,000
vehicles in a single financial year. In 1985, it started producing at Waluj near Aurangabad. In 1986, it
managed to produce and sell 500,000 vehicles in a single financial year. In 1995, it rolled out its ten
millionth vehicle and produced and sold one million vehicles in a year.

Bajaj has grown operations in 50 countries by creating a line of value-for-money bikes targeted to
the different preferences of entry-level buyers.

Product Portfolio

 Bajaj Pulsar 150 DTSi.

 Bajaj Discover.
 Bajaj Avenger.
 Bajaj Platina.
 Bajaj Kawasaki KB 100 RTZ.
 Bajaj Boxer.
 Bajaj Caliber.
 Bajaj Pulsar 220 DTS-Fi.
 Bajaj Krystal.
 Bajaj Pulsar 180 DTSi.

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Products in 150cc category

1. Bajaj Pulsar 150cc

Product
Product name: Bajaj Pulsar
Brand name: Bajaj motors pvt ltd

A combination of technology and engineering, Bajaj Pulsar 150 cc offers enhanced features like
Digital Twin Ignition Technology (DTS-i) based engine, digital console, ride feel and chassis.

Looks

 Three colors - black, red & silver

 Smashing looks
 Mean muscular aerodynamic design
 Digital speedometers
 Fuel indicator
 LED tail lamps
 New design seat cowl
Control

 Stronger alloy steel wheel base

 Smaller wheel radius (17")
 Wheel base (1300mm)
 Easy top gear driving
 Lesser gear changes
 Improved engine torque optimizing engine performance
 Engine powered to carry higher loads
Comfort

 Instant pickup in any gear

 Easy drivability in city traffic conditions due to ExhausTEC technology
 NitroX-Nitrogen assisted rear gas shockers give cushion feel
 Lesser gear change
 Engineered for carrying higher loads
 Low speed & high gear combination offers phenomenal ride
 Rip-roaring power without compromise on mileage
Mileage and Economy

 User reported 50-55 kmpl in city conditions

 Under highway conditions user reported upto 62 kmpl
 Petrol Tank Capacity: 15 Ltrs
 Petrol Tank Reserve capacity: 2 Ltrs

Pricing
Bajaj Pulsar 150 cc Price in Delhi: 62,637/- Indian Rupee

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2. Bajaj Discover 150cc

Product
Product name: Bajaj Discover
Brand name: Bajaj motors pvt ltd

Bajaj Discover was launched with 150cc engine upgrade. Bajaj Discover 150cc also 5 speed
manual, air cooling type, 4 colors, 8L fuel tank and 121 kg. Mileage has been claimed up to 50
km per liter of gasoline. - 5 speed gear-box for superior performance.

Specifications:

- 150cc DTS-i 4 Stroke engine

- 13 Bhp Power, 12.7 Nm Torque
- LED Tail Lamp
- Nitrox Suspension
- Matte Finish Alloy Wheels
- Self Start
- Front Disc Brake
- 5 Speed Gearbox
- Wider rear tyre
- Auto Choke
- Battery Charge Indicator
- Ride Control Switch

Shades Available in Bajaj Discover 150- Black with blue graphics, Black with red graphics

For complete technical specifications visit:http://www.burnyourfuel.com/news/bike-news/bajaj-

discover-150-launched-today-india

Pricing
Bajaj Discover 150cc bike is priced at Rs 46000 (ex-showroom, Delhi).

SWOT Analysis

1. Strengths
 Extensive R&D focus
 High performance products in 150cc categories
 High export to domestic sales ratio
 High economies of sale
 Legacy of brand name
 Highly experienced management
 Great finance support network
 Product design and development capabilities

2. Weaknesses
 Has presence mostly in one area of market (150cc)
 Still not a very established name in the global market

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 Hasn’t employed the excess cash for long

 Centralized paternalistic management style

3. Opportunities
 Bajaj on internal analysis found that it lacks technical expertise to deliver competitive
goods
 Growing gearless trendy scooters market
 Can use the existing R&D capabilities for new models
 Can invest and grow in the life style segment

4. Threats
 Tough competition from domestic as well as foreign players
 Threat of FDI norms, same as Hero Honda
 Margin squeezes from all the directions
 The competition catches up with any new innovation in no time

BCG Matrix Analysis

MARKET SHARE
G
R H
O i
W g
T h
H Pulsar 150 and 180cc XCD 125
Discover
R Pulsar 200 and 220cc
A Blade
T
E

L
o Platina Avenger
w CT 100 Kristal

High Low

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Porter’s 5 Force Model

Market Segmentation, Targeting and Positioning

Segmentation
 BeforePulsarBajaj was just known for its scooter as its various attempts failed to pose a
threat to the Hero Honda’s supremacy.
 But Bajaj strategically placed Pulsar in the market against the CBZ in the 150cc segment.
 Pulsar proved to be a land mark in reviving the fate and position of Bajaj thereby posing a
threat to Hero Honda’s rule in Indian market.
 USP of Pulsar wasn’t its performance but its advertising, targeting & positioning.

Targeting
 Bajaj did all the right moves by targeting the youth and “He-bike”, and making Pulsar an
inseparable attribute to Males.
 Pulsar was Bajaj’s firstbike without Kawasaki label on it.
 The bike’s orientation was towards being a macho and manly bike.

Positioning
 Bajaj has positioned Pulsar in the “High Style High Price” segment along with Hero Honda
Karizma, Hero Honda CBZ, Royal Enfield Bullet.
 It also has positioned CT 100 in the “Low Style Low Price” segment along with Hero Honda
Splendor, TVS Star City.

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Branding

Brand Positioning

Pulsar

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Discover

Rebranding from Hamara Bajaj to Distinctly Ahead

Inspiring
Hamara Bajaj Distinctly Ahead
Confidence

The decades old logo of the ‘B’ in a hexagon that stood for ‘Hamara Bajaj’ was replaced with a more
dynamic, vibrant, stylized and trendy ‘B’ with Bajaj moving from lower caps to upper caps to
symbolize the rejuvenated Bajaj Auto Ltd.

The new visual identity of Bajaj Auto emanated from the

confirmation of core values, which Bajaj identified as its brand
values. The Brand essence for the new Bajaj was defined as
“Excitement” which Bajaj promises to live its essence through
a set of five Brand Values of Learning, Innovation, Perfection,
Speed and Transparency.

The change in Identity was part of the ongoing changes. Bajaj

had transformed its facilities to state of the art manufacturing
infrastructure, with an enviable distribution and service
network, had created a benchmark R&D facility and at a time
when the customer had changed in terms of its exposure to
quality and style, the change in identity became necessary to
help invite a paradigm shift in consumer perception of the

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company.

The traditional hexagonal symbol has been replaced by an open abstract form of stylized B, the
“flying B” as it has been named represents style and technology. It also has a strong association with
the heritage of Bajaj since the external form has a hint of hexagon. “Flying B” form denotes speed
and open form denotes the transparency.

The new logotype of the all capitals BAJAJ represents precision engineering and perfection. The logo
is all about confident and bold stylistic lettering, which is very global in its outlook and its
presentation across all media be it print, television or billboard advertising.

Brand Association

Bajaj Pulsar joined hands with MTV India in 2009 to launch Pulsar MTV Stunt Mania, India’s first ever
biking stunt reality show. This association was aimed at the youth market which is the prime focus
for the performance biking sector and MTV being Youth Centric was an excellent choice.

Advertising Strategy

Bajaj is always known for its outstanding ads over the period of time. Since its inception, Bajaj has
come out with variety of ads and were always successful in their advertisements. Bajaj is always
known for its ads without well-known brand ambassadors which is again a plus point to its cart as it
saves a huge cost in terms of brand ambassadors unlike Hero Honda and TVS. Prior, Bajaj used to
convey the feeling of ‘Indianness’ in its ads. With a punch line ‘Hamara Bajaj’ Bajaj drove into
everybody’s hearts and the title song of ‘Naye Bharat Ki Naye Tasveer’ added a great value to its
mobikes and scooters. A couple of years back, Bajaj introduced an advertisement which promoted
all the different ranges it had, wherein they showed each product they had with a feeling of
Indianness. Example: Eliminator passes-by a rangoli and drives slowly sideways without disturbing it.
People on Boxer pass-by a temple and bend their head to give a little offering. Such ads revealing
Indian culture had a great effect on Indians and Bajaj was successful in most of its ads. Recently,
Bajaj changed its brand logo along with its punch line i.e. ‘Hamara Bajaj’ which got converted to
‘Inspiring Confidence’. The reason for this change as told by the company officials was to keep pace
with the new technologies in the fast moving world. Even though it had changed its punch line, it
didn’t have much effect on its brand image. A year back, Bajaj introduced DTSi technology upgrading
its successful PULSAR 150cc and 180cc. Though Bajaj had changed its identity it still dominates for its
creativity in ads.

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Bajaj and its Competitors

Competitors

1. Hero Honda

Hero Honda Motors Limited is a two wheeler manufacturer based in India. Hero Honda is a joint
venture between the Hero Group of India and Honda of Japan. The company is the largest two
wheeler manufacturer in India. The 2006 Forbes 200 Most Respected companies list has Hero
Honda Motors ranked at 108.
“Hero” is the brand name used by the Munjal brothers for their flagship company Hero Cycles
Ltd. A joint venture between the Hero Group and Honda Motor Company was established in
1984 as the Hero Honda Motors Limited at Dharuhera India. Munjal family and Honda group
both own 26% stake in the Company. In 2010, it was reported that Honda planned to sell its
stake in the venture to the Munjal family.
The technology in the bikes of Hero Honda for almost 26 years (1984–2010) has come from the
Japanese counterpart Honda. Hero Honda has three manufacturing facilities based at Dharuhera
in Gurgaon in Haryana and at Haridwar in Uttarakhand. These plants together are capable of
churning out 3 million bikes per year.Hero Honda has a large sales and service network with over
3,000 dealerships and service points across India.

Strengths
 Hero Honda has the highest market share of 40% in Indian 2-wheeler industry.
 Hero Honda is the only one company in two wheeler and automobile industry which has
collaboration with many banks in India as well as in foreign and it helps them to increase
their sale through loan.
 Hero Honda has very good brand image that of making fuel efficient bikes, and its largest
dealership and showrooms all over India makes it stronger than others.
 Hero Honda bikes are well known for its very low maintenance cost and less price for
spare parts.
 Resell value is high.
 Strong distribution network and service centres.
 Large range of products for almost the entire customer base.

Weaknesses
 R&D is not close to the Hero manufacturing plant.
 As the Indian Government has opened the market for FDI making investments an easy
path for foreign investors, Honda does not feel the need to continue the collaboration
pact been signed with the Hero.
 Hero Honda is riding on the image created by its 100cc bikes. The 150cc bikes still to
make an impact on the market.
 Did not patent the DTS-i technology launched with Ambition. This technology was later
patented by Bajaj for the model Pulsar.

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Opportunities
 Large market for the high performance segment which is increasing with the upliftment
of lifestyle of people.
 Global expansion into Caribbean and Central America.
 Expansion of target market including women.
 Hero group entered into aviation sector and invested 500 crores in MP SEZ.
 Leverage on superior distribution network to facilitate selling of more bikes.

Threats
 Bajaj Motors is a strong competitor. Bajaj Auto has found popularity with both its low-
end and premium offerings which have helped chip away at Hero Honda’s dominance.
 Increase in petrol, aluminium and steel prices.
 FDI announced by Indian Government in automobile industry

2. India Yamaha Motor Pvt. Ltd.

Yamaha made its initial foray into India in 1985. Subsequently, it entered into a 50:50 joint-
venture with the Escorts Group in 1996. However, in August 2001, Yamaha acquired its
remaining stake becoming a 100% subsidiary of Yamaha Motor Co. Ltd., Japan (YMC). In 2008,
Mitsui & Co. Ltd. entered into an agreement with YMC to become a joint-investor in the
motorcycle manufacturing company "India Yamaha Motor Private Limited (IYM)".
IYM operates from its manufacturing units at Surajpur in Uttar Pradesh and Faridabad in
Haryana and produces motorcycles for both domestic and export markets. With a workforce of
more than 2,000 employees, IYM is has a countrywide network of over 400 dealers.

Strengths
 Size and scale of parent company
 Effective advertising capabilities
 High emphasis on R&D
 Experience in the market
 Established brand
 Established market channel

Weaknesses
 Weak product diversity
 Not much aggressive selling

Opportunities
 Growing premium segment.
 Global expansion into the Caribbean& Central America
 Expansion of target market including women

Threats
 Strong competition from established players in the Indian market
 Rising cost of raw materials

3. TVS

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TVS Motor Company is the third largest two-wheeler manufacturer in India and is among the
world's top ten. It is the flagship company of the parent TVS Group employing over 40,000
people with an estimated 15 million customers. It manufactures motorcycles, scooters, mopeds
and auto rickshaws. It is India's only two-wheeler company to have won the Deming Prize
awarded for commitment to quality control, received in 2002.
TVS began its commercial production of motorcycles in 1984. TVS and Suzuki shared a 19 year
long relationship, which was aimed at technology transfer to enable design and manufacture of
two-wheelers specifically for the Indian market, which ended in 2001.
The company has manufacturing plants in Hosur, Mysore and Nalagarh in India and Karawang in
Indonesia.

Strengths
 Wide distribution network
 Dominates the market in Tamil Nadu
 TVS Motor Company Ltd. has got excellent monitoring System, which helps in smooth
working of industry

Weaknesses
 Regional dependency in South India.

Opportunities
 Not much presence in market except a few known brands.

Threats
 Major competitors in Hero Honda, Bajaj and Yamaha which are better known and
recognised.

4. Honda Motorcycle & Scooter India, Private Limited

Honda Motorcycle & Scooter India, Private Limited (HMSI) is the wholly owned Indian subsidiary
of Honda Motor Company, Limited, Japan. Founded in 1999, it was the fourth Honda automotive
venture in India, after Hero Honda, Kinetic Honda Motor Ltd and Honda Siel Cars India Limited.
The Honda Unicorn was the first motorcycle released by HMSI.

Strengths
 Wide distribution network
 Dominates the market in Tamil Nadu
 Innovation
 Strong brand equity
 Unique products
 Production System that is refined over the years
 High and powerful research and development R&D
 Best market share leadership revolutionary engine technology with the help of which
Honda is gaining success day by day

Weaknesses
 Regional dependency in South India
 Cost structure of Honda is high as compare to other automobile manufacturers

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Opportunities
 Not much presence in market except a few known brands
 Emerging market is one of the best opportunity for this company
 Fuel efficiency is now a days termed as one of the best opportunity which can results in
the best productivity for the company
 Honda can increase its production by focusing on sales and research

Threats
 Major competitors in Hero Honda, Bajaj and Yamaha which are better known and
recognised
 One of the major threat is the economic slowdown
 All the external changes for instance taxes, politics as well as government are the major
threats for Honda Company
 Another threat is the lower cost competitors
 Price war is also consider as an important threat for this company
 Second movers are the major threat for Honda company

Way Ahead for Bajaj Auto

 Choose a Brand Ambassador which could provide the face to the Brand.

 Come up with Innovative Brands so as to move up the ladder and occupy a larger market
share.

 Re-position the not so successful brands and inculcate appropriate advancements in it.

 Learn from failures and bring something unique and new in Indian market so as to be more
competitive in times to come.

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