Submitted bySHALIN SHAH

Bajaj Auto 2011

DIPLOMA IN MANAGEMENTADANI GROUP – SECOND TERM

MARKETING MANAGEMENT – ASSIGNMENT 1

PROF. PRABHAT KUMAR YADAV

Bajaj Auto

BAJAJ AUTO

ContentsBajaj 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

Bajaj Auto

About the companyBajaj 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.

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BAJAJ AUTO

Bajaj Pulsar 180 DTSi.

Products in 150cc category

1. Bajaj Pulsar 150cc

ProductProduct name: Bajaj PulsarBrand 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

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

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BAJAJ AUTO

2. Bajaj Discover 150cc

ProductProduct name: Bajaj DiscoverBrand 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

PricingBajaj 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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BAJAJ AUTO

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

Porter’s 5 Force Model

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GROWTH

RATE

High

MARKET SHARE

Pulsar 150 and 180cc XCD 125 Discover Pulsar 200 and 220cc Blade

Low

PlatinaCT 100

AvengerKristal

High Low

BAJAJ AUTO

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.

Branding

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Brand Positioning

Pulsar

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Discover

Rebranding from Hamara Bajaj to Distinctly Ahead

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 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

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Hamara Bajaj

Inspiring Confidence

Distinctly Ahead

BAJAJ AUTO

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 AUTO

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.

Opportunities

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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

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

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BAJAJ AUTO

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

Opportunities

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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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