68
Acknowledgements 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 K. J. Jaims for entrusting our group with this huge responsibility. We wish to express a profound sense of gratitude to Prof. Jaims for his generous suggestions and valuable insights, without which this project would not have been a success. We would like to thank Mr. Rashid, Bullet mechanic, Manipal for his help in providing the necessary impetus in the exploratory phase. We also wish to express our thanks to Mr. Imran Jeddy, Ms. Deepti Jacob, Mr. Arijit Bhattacharya, Mr. Sandeep Menon and Mr. Arun for their constant support and help in providing us invaluable data and insights during the exploratory phase of this project. Last but not the least, we would like to thank all the respondents and our team members who participated and contributed towards the successful completion of this project.

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Page 1: Royal Enfield market research

Acknowledgements

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 K. J. Jaims for entrusting our group with this huge

responsibility. We wish to express a profound sense of gratitude to Prof. Jaims for his

generous suggestions and valuable insights, without which this project would not have been a

success.

We would like to thank Mr. Rashid, Bullet mechanic, Manipal for his help in providing the

necessary impetus in the exploratory phase.

We also wish to express our thanks to Mr. Imran Jeddy, Ms. Deepti Jacob, Mr. Arijit

Bhattacharya, Mr. Sandeep Menon and Mr. Arun for their constant support and help in

providing us invaluable data and insights during the exploratory phase of this project.

Last but not the least, we would like to thank all the respondents and our team members who

participated and contributed towards the successful completion of this project.

Page 2: Royal Enfield market research

Executive Summary

Research Objectives

The Research is aimed at the study of attitudes of Bullet Riders in Manipal. Bullet, or the

Royal Enfield stable of motorcycles have been an iconic brand in India. 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 establish

a psychological and demographic profile of the Bullet Riders.

Concise Statement of Method

The Research was done in a number of Phases of study.

An initial Focus Group Discussion was conducted online with members of Bullet Clubs from

across the country. Each of these riders have more than 40,000 km to their credit and are

respected across the country in the Bullet community.

The findings from the FGD were taken into consideration to develop a questionnaire which

was subsequently filled up by Bullet riders from Manipal and other cities of the country and

also by Non-Bullet riders from Manipal.

The data collected was analyzed both quantitatively and qualitatively to arrive at a

representative customer profile for Royal Enfield motorcycles.

Summary of Findings

Despite our best efforts, we could collect data only from 17 Bullet riders and 20 users of

other two-wheelers.

We used Cluster Analysis, Multi-Dimensional Scaling, Factor Analysis for segregation of the

collected data into identifiable attitude determining portions.

Page 3: Royal Enfield market research

From the study, we found that

1. Most Bullet riders exhibited Value-Expressive behavior while few others showed

Ego-Defensive attitudes.

2. While there was a wide range of age groups and backgrounds for people who used

Bullets and other RE motorcycles, most riders seemed to associate the motorcycle

with a sense of freedom and respect.

3. Most people exhibited an internal locus of control, quite contrary to the macho

strong-man image non-users held of the bike.

4. Most non-users turned out to be a price sensitive group with a slight tendency

towards an Ego-Defensive attitude with respect to strength.

5. There was also a dismally low recall of advertising campaigns by the company.

6. Quite a few riders also expressed that they might be willing to pay a premium for

the RE motorcycles as it is the feel of the bike and not the price that dictated their

choice.

7. The customer is seen a male professional, around 25 years of age, with a strong

internal locus of control.

Conclusion

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.

Recommendations

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.

Page 4: Royal Enfield market research

Table of ContentsIntroduction...........................................................................................................................................5

Indian automobile industry...............................................................................................................6

Indian two wheeler market...............................................................................................................6

Profile of the Organization................................................................................................................8

Profile of the Products.......................................................................................................................9

Rationale for the Project..................................................................................................................11

Objectives........................................................................................................................................13

Scope/Terms of References.............................................................................................................13

Definition of Constructs...................................................................................................................13

Internal Parameters – Customer’s Internal Locus of Control.......................................................14

External Parameters – Influncers, Marketing and Company........................................................14

Research Methods and Procedures.................................................................................................15

Data Analysis and Findings..................................................................................................................17

Demographics..................................................................................................................................17

Occupation..................................................................................................................................17

Gender.........................................................................................................................................17

Annual Income.............................................................................................................................18

Bike Ownership............................................................................................................................18

Age...............................................................................................................................................19

Classification of Bullet riders and Non-Bullet riders based on Demographic Data......................19

Quantitative Analysis.......................................................................................................................21

Perception about Spare Parts Availability....................................................................................42

After Sales Service.......................................................................................................................42

Barriers of Purchase.....................................................................................................................43

Media Habits...............................................................................................................................43

Other findings..............................................................................................................................46

Qualitative Analysis.........................................................................................................................48

Conclusion and Recommendations.....................................................................................................50

Limitations...........................................................................................................................................51

Page 5: Royal Enfield market research

References...........................................................................................................................................52

Appendices………………………………………………………………………………………………………………………………………53

Questionnaire……………………………………………………………………………………………………………………………..53

Page 6: Royal Enfield market research

Introduction

Indian automobile industryThe 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.

India’s 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 marketEver 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 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.

Page 7: Royal Enfield market research

The story of Mr. Ratan Tata inspired by a family of four members travelling in Indian roads,

not concerned about safety and the evolution of the idea of TATA Nano has been quite

famous globally.

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 Kinetic’s

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 one’s son rides to college.

With rising incomes and purchasing capacity of the average Indian, the demand for two

wheelers in the power segment has increased considerably. There also have been constant

signs of maturing of the market when the manufacturers reacted by coming up with

innovations, catching attention of potential buyers and sometimes creating a new class of

customers or altering the preferences and attitudes of existing consumers

Page 8: Royal Enfield market research

Profile of the Organization

Royal Enfield are the makers of the famous Bullet brand

in India. Established in 1955, Royal Enfield (India) is

among the oldest bike companies. It stems from the

British manufacturer, Royal Enfield at

Redditch. Royal Enfield has its headquarters at Chennai in

India. 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 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 still in

production and Bullet is the longest production run model.

Page 9: Royal Enfield market research

Profile of the ProductsRoyal 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 Enfield Bullet 500 (Cast Iron)

Royal Enfield Bullet 500 is a classic bike having

vintage styling. The bike has hand-painted 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.

Page 10: Royal Enfield market research

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 features to align themselves with the more

contemporary manufacturers. From a right-hand

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 Enfield’s “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 Enfield’s

collaboration with an Austrian Engine manufacturer, AVL.

Page 11: Royal Enfield market research

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

tourer’s 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 Single-Spark Engine. Today the

Thunderbird Twinspark is a 350cc Unit Construction

Twin-spark 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 50’s 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.

Rationale for the ProjectRoyal Enfield motorcycles have for a long time held the fancy of Indian two-wheeler users.

However, this awe and enthusiasm has not really translated into sales for the company.

On a superficial level, it seems that this may be caused by high prices, low fuel-efficiency,

and maintenance issues. However, it was felt that this can be caused by a strong disconnect

between the perception of the motorcycles from Royal Enfield amongst the users and the

value proposition from the company.

Page 12: Royal Enfield market research

To begin with, we asked ourselves the following questions:

Were people riding Bullets to flaunt affluence?

Were people riding Bullets because girls found it cool?

Were people riding Bullets to project an intimidating image?

Or

Were people riding Bullets because they loved the thump?

Were people riding Bullets because the open road beckoned to them?

Were people riding Bullets because of the natural respect that it commanded?

There were intuitive answers supporting both hypotheses and the only way to find out the

validity of either was to actually find out from the users why they used these motorcycles in

favor of the wide range of offerings from the other motorcycle manufacturers.

Customer Attitude, with respect to iconic brand often varies between the Ego-Defensive and

the Value-Expressive. The Ego-Defensive customer wants to protect his/her self-image from

inner feelings of doubt. They look to replace their uncertainty with a sense of security and

personal confidence. These are people who are overly concerned with the Look of the

product or its perception amongst others. They often display Veblenian, Snobbish or

Bandwagon buying behavior where their buying decision is shaped by social considerations

more than economic ones.

By sharp contrast, the Value-Expressive customer’s attitude is a reflection of the customer’s

general values, lifestyle and outlook. They have a strong internal value system that gets

reflected in their choice and thus their choice has an internal locus of control, often resilient

to external perceptions.

The research was an attempt to classify the Bullet riders into one of these two criteria because

Marketing Communication would by and large depend upon which segment the product is

targeted at.

Page 13: Royal Enfield market research

ObjectivesAs discussed, the objective of the research may be summarized as follows:

1. To arrive at the psychographic profile of Bullet Riders in Manipal

2. To ascertain the factors that affect the choice of a Bullet as a motorcycle

3. To ascertain the barriers to purchasing a Bullet for a prospective customer

4. To derive the perception of Bullet as a motorcycle amongst respondents vis-à-vis other

brands

5. To propose an effective Marketing Communication plan for brand Royal Enfield

Scope/Terms of ReferencesThe study regarding an iconic brand that is more than 100 years old opens up boundless

possibilities. Given the magnitude of the project and resource limitations, we have defined

the scope of the study to include

1. Psychographic and Demographic profile of Bullet riders

2. Factor analysis of the parameters on which the purchase decision has been based

3. Locating the barriers to purchasing a Bullet for a prospective customer

4. Finding out the perception of After Sales Service and Spares amongst users

5. Mapping the perception of the Bullet on various parameters vis-à-vis other brands

6. Deriving the media exposure of the Bullet riders for planning Communication

The results are limited by the numbers and are in no way exhaustive, but only serve as in

indication or a pilot study for a similar study that may be performed on a much larger scale.

Definition of ConstructsIn the initial brain storming sessions, various parameters were considered important to a

rider’s choice of Bullet as a vehicle and the various prime movers behind these parameters

were discussed. These parameters were broadly classified as

a) Internal parameters (Ones that stems from the user’s notions and internal values)

b) External parameters (Ones that depend on Marketing Communication and others’

perception of the user)

While most riders seemed to be influenced by both, the Ego-Defensive riders display a

greater tendency to be influenced by the external parameters. They look for the macho image

of the Bullet to rub off on them. The Value-Expressive users look for the sense of freedom in

the bike and the long rides that come with it.

Page 14: Royal Enfield market research

Internal Parameters – Customer’s Internal Locus of ControlConsidering that Power Bikes are expensive, various features need to be compared, and they

are expected to be used for a considerable period of time, purchase of bikes come under

complex consumer behavior decisions. The consumer behavior under such cases can be

defined in 4 steps namely:

1. Need Arousal / Problem Recognition – In this stage, the customer recognizes the need

for a bike based on his current situation. Study of this phase helps us identify the various

needs of customers, which needs they prioritize, ability to satisfy needs, how they satisfy

their needs etc.

2. Search for Information – Once the customer identifies his need for a product, he searches

for information related to the product before purchase. A study about this phase can evolve

insights into which medium to use to reach the customer, what communication mediums to

use, influencers, etc.

3. Brand evaluation & Purchase – As a result of information search, the customers evaluate

brands available based on their past and current information with their desired benefits. It is

very important to be in the consideration list in this stage for a brand to be consumed. A

company needs to identify if it is in the consumer’s consideration list and if not what are the

reasons for this.

4. Post Purchase Evaluation – This may be associated to satisfaction while

consumption/usage through parameters like performance, after sales support etc. Another

important aspect at this stage is post purchase dissonance etc. This stage is very important to

develop loyalty among customers and for popularity of the brand in terms of performance

reviews.

External Parameters – Influncers, Marketing and CompanySome customers exhibit choices based on how they wish to be perceived, a feeling that often

stems from an internal insecurity that needs an external cover-up. These users are heavily

influenced by Marketing communication showing the bike catering to their Ego needs and

also by the general peer evaluation of the image the bike projects.

These users migrate more towards the look and the image of a vehicle rather than its

performance or its fit with their actual riding requirements.

Page 15: Royal Enfield market research

Most of such users find a bike like Bullet unfit for them as they feel the bike is either too

costly or they are not strong enough to handle a Bullet.

Research Methods and ProceduresThe research was carried out in various phases that constituted an approach of working from

whole to part. It included subsequent phases trying to go deeper into the user’s psyche and

develop a thorough understanding of what an user looks for while buying a bike.

The first phase was completely internal where the team brain stormed over the most effective

route of action, considering that Bullet users in Manipal are greatly limited in number and

would thus pose a serious problem if multiple phases of interaction are designed.

The second phase was an online Focus Group Discussion with some of the seasoned bikers

who have been using Bullets for some time now and are generally known and respected

amongst the Bullet community for their riding abilities and attitude. The people who were

part of this FGD were:

Imran Jeddy – Project Lead at Oracle, Hyderabad. Male, 32 years old. Uses a Thunderbird

since 2002 and has clocked about 85,000 km on his bike. Generally known for impeccable

maintenance that he does all by himself. Moderator of the Hyderabad Bullet Club 23ONE.

Deepti Jacob –Research Director and Group Head at Ipsos Indica Market Research,

Mumbai. Uses a Thunderbird since 2004 and has about 39,000 km on the odometer. She

is respected as one of the most proficient lady riders in the country.

Arijit Bhattacharya – Entrepreneur in Kolkata. Moderator of the Eastern Bulls

Motorcycling Club. Uses a Standard 350cc of the 1994 vintage. He has the rare

distinction of having ridden in every state in the country. He has run for more than

1,70,000 km and is gifted with an ability to locate a mechanic in the middle of nowhere

when its needed the most.

Sandeep Menon – CEO, Novell Software Development Private Limited, Bangalore. An

ardent rider who owns 7 classic motorcycles including 3 Royal Enfields. He is an active

member of the Rolling Thunders Motorcycling Club, Bangalore and makes it a point to

participate in at least one long ride every two months.

Page 16: Royal Enfield market research

Arun – Entrepreneur in Udupi. Moderator of the United Riders Motorcycling Club. An

ardent Bullet rider and personally knows almost all Bulleteers in the Manipal, Udupi

region.

The FGD was moderated by Aditya Dixit and Subhayu Roy, research team members who

also own and ride Royal Enfield motorcycles.

For the next phase a questionnaire was prepared by the team using the findings from the

FGD. This questionnaire was then administered to Bullet Riders in Manipal and Udupi by the

interviewers in person, and some online responses were solicited from Bullet Club members

from Bangalore, Chennai and Hyderabad. On interviewing Rashid, the veteran Bullet

mechanic in Udupi, we had fixed the number of Bullet riders in Manipal region to be about

70. Assuming a confidence level of 95% and allowing for 10% Confidence Interval, we

arrived at a Sample size of 41.

However, given the limitations of time and resources, the questionnaire could be

administered only to 19 respondents.

In order to get a perspective from non-Bullet riders as to what are the reasons for not

choosing a Bullet, we administered the same questionnaire to 19 riders who used other

motorcycles.

The next phase involved the analysis of the data collected. For this all the collected data was

coded into appropriate SPSS modules and analyzed for various analytical studies:

Parallel to the quantitative analysis, a qualitative analysis was done from Focus Interviews of

the participants in the FGD. The primary objective of this was to study the Brand Image

Profile of Bullets amongst users using the Kapferer’s model.

Page 17: Royal Enfield market research

Data Analysis and Findings

Demographics

Occupation

45%

3%3%

32%

18%

StudentGovernment ServiceEx-ServicemanProfessionalSelf-Employed

45% of the respondents were students pursuing their graduation or post graduation studies and 31% were professionals. 18% of the respondents were self employed, 3% were ex-serviceman and 3% belonged to government services.

Gender

92%

8%

MaleFemale

92% of respondents were male and female respondents constituted just 8% of total responses.

Page 18: Royal Enfield market research

Annual Income

53%

13%

18%

16%

Less than 1,20,000120000 to 3,59,9993,60,000 to 719999Above 720000

53% of the respondents had an annual income of lesser than 1,20,000, 18% had income between 3,60,000 and 7,19,999, 16% earned more than 7,20,000 per annum and 13% had income between 120000 to 3,59,999.

Bike Ownership

50%50%Bullet RidersNon Bullet Riders

Equal numbers of responses were collected from both the Bullet riders and the Non Bullet riders.

Page 19: Royal Enfield market research

Age

39%

26%

18%

16%

20-2425-2930-34Above 35

40% of the respondents aged between 20 to 24, 26% between 25 to 29, 18% between 30 to 34 and only 16% aged above 35 years.

Classification of Bullet riders and Non-Bullet riders based on Demographic Data

Page 20: Royal Enfield market research
Page 21: Royal Enfield market research

Quantitative AnalysisObjective:

In order to understand the attitude of a bullet rider, we need to understand his buying behavior. The respondents were asked to rank 5 attributes such as Looks, Speed, Power, Mileage, Price and Brand. These were arrived at after the exploratory research phase. The data collected was for both bullet riders and non-bullet riders. Hence a comparison in the ratings given by both the groups would help us identify the specific factors which are differentiating the buying behavior of a bullet rider.

Methodology:

An independent sample T-Test was conducted on the total sample size of 38 respondents (19-Bullet Riders, 19-Non Bullet Riders) to compare the means of both the groups.

Results:

Notation: Bullet Riders -1; Non-Bullet Riders-0

Page 22: Royal Enfield market research

Interpretation:

The results from the T-Test tell us that there is a significant difference in terms of the way they have rated the following attributes, since their significance value is less than 0.05. The null hypothesis is rejected and the alternate hypothesis is accepted.

Looks

Power

Brand

There is not a significant difference in the way the respondents have rated Mileage and Price. The main reason for this could be the increasing willing to pay more for the desired brand or bike. Speed has now become a hygiene factor and not a significant factor as it is the common need for both the groups.

Objective:

Page 23: Royal Enfield market research

To understand the dependence of bullet riders on the factors Looks, Power and Brand. This would help us narrow down independent factors to only those factors which are highly important to differentiate a bullet rider from a non-bullet rider.

Methodology:

Cross-tabulation is used along with the Chi-squared Test to determine if there is a significant association between the dependant variable-BulletRiders and independent variables-Looks, Power and Brand.

Results:

Chi-Squared Test results:

Looks

Since the Pearson Chi-Square value is greater than 0.05, Looks do not have high association with the group a particular rider belongs to. This implies that the respondents in both groups have given importance to Looks.

Page 24: Royal Enfield market research

The above bar chart tells us that in both the groups most respondents have given looks to be either 2nd preference or 1st preference.

Brand

Crosstabs

Total0 1

Brand 1 Count 4 13 17

% within Brand 23.5% 76.5% 100.0%

% within BulletRiders 21.1% 68.4% 44.7%

% of Total 10.5% 34.2% 44.7%

2 Count 8 2 10

% within Brand 80.0% 20.0% 100.0%

% within BulletRiders 42.1% 10.5% 26.3%

Page 25: Royal Enfield market research

% of Total 21.1% 5.3% 26.3%

3 Count 3 2 5

% within Brand 60.0% 40.0% 100.0%

% within BulletRiders 15.8% 10.5% 13.2%

% of Total 7.9% 5.3% 13.2%

4 Count 2 2 4

% within Brand 50.0% 50.0% 100.0%

% within BulletRiders 10.5% 10.5% 10.5%

% of Total 5.3% 5.3% 10.5%

5 Count 2 0 2

% within Brand 100.0% .0% 100.0%

% within BulletRiders 10.5% .0% 5.3%

% of Total 5.3% .0% 5.3%

Total Count 19 19 38

% within Brand 50.0% 50.0% 100.0%

% within BulletRiders 100.0% 100.0% 100.0%

% of Total 50.0% 50.0% 100.0%

The table tells that there are 76 % people who are bullet riders and have given Brand to be their 1st preference in their buying decision making.

Page 26: Royal Enfield market research

Chi-Square Test

Since the Pearson Chi-Square significance value is less than 0.05, Brand has a significant association with the kind of bike a person owns.

Power:

Value dfAsymp. Sig. (2-sided)

Pearson Chi-Square 10.565a 4 .032

Likelihood Ratio 11.846 4 .019

Linear-by-Linear Association

4.460 1 .035

N of Valid Cases 38

a. 6 cells (60.0%) have expected count less than 5. The minimum expected count is 1.00.

Page 27: Royal Enfield market research

Crosstab

BulletRiders

Total0 1

Power 1 Count 4 11 15

% within Power 26.7% 73.3% 100.0%

% within BulletRiders 21.1% 57.9% 39.5%

% of Total 10.5% 28.9% 39.5%

2 Count 2 5 7

% within Power 28.6% 71.4% 100.0%

% within BulletRiders 10.5% 26.3% 18.4%

% of Total 5.3% 13.2% 18.4%

3 Count 3 2 5

% within Power 60.0% 40.0% 100.0%

% within BulletRiders 15.8% 10.5% 13.2%

% of Total 7.9% 5.3% 13.2%

4 Count 7 0 7

% within Power 100.0% .0% 100.0%

% within BulletRiders 36.8% .0% 18.4%

% of Total 18.4% .0% 18.4%

Page 28: Royal Enfield market research

5 Count 3 1 4

% within Power 75.0% 25.0% 100.0%

% within BulletRiders 15.8% 5.3% 10.5%

% of Total 7.9% 2.6% 10.5%

Total Count 19 19 38

% within Power 50.0% 50.0% 100.0%

% within BulletRiders 100.0% 100.0% 100.0%

% of Total 50.0% 50.0% 100.0%

The table tells us that 73 % of the people who are bullet riders have given , Power to be their 1st preference.

Page 29: Royal Enfield market research

Chi-Square Tests

Value dfAsymp. Sig. (2-sided)

Pearson Chi-Square 12.752a 4 .013

Likelihood Ratio 15.677 4 .003

Linear-by-Linear Association

9.880 1 .002

N of Valid Cases 38

a. 8 cells (80.0%) have expected count less than 5. The minimum expected count is 2.00.

Since the Pearson chi-Square significance is less than 0.05, Power has very strong association with the kind of bike a person owns.

Objective:

To reduce the number of factors that determines the buying behavior of a bullet rider. This will club together the relevant factors into one factor which is easier for us to interpret.

Methodology:

The multi-variate method, factor analysis can be used here to arrive at the factor groups.

Results:

KMO and Bartlett's Testa

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .636

Bartlett's Test of Sphericity

Approx. Chi-Square 48.938

df 15

Sig. .000

a. Only cases for which BulletRiders = 1 are used in the analysis phase.

Page 30: Royal Enfield market research

The KMO test is test for goodness fit of the model. The value, Kaiser-Meyer-Olkin Measure of Sampling Adequacy is greater than .5 and the significance less than .05, which tell us that the model is good enough and will be useful.

Communalitiesa

Initial Extraction

Looks 1.000 .775

Speed 1.000 .737

Power 1.000 .846

Mileage 1.000 .671

Price 1.000 .756

Brand 1.000 .767

Extraction Method: Principal Component Analysis.

The proportion of variance in any of the original variables which is captured by the extracted factors is known as communality. The values are greater than 0.6, hence can be considered for our analysis.

Rotated Component Matrixa,b

Component

1 2

Power .908 -.143

Looks .869 -.144

Brand .851 -.205

Speed .824 .240

Price .063 .867

Mileage -.209 .792

Page 31: Royal Enfield market research

The rotated component matrix gives the loading of each variable on each of the extracted factors. Values close to 1 represent high loadings and those close to 0, low loadings.

The above matrix tells us that the component 1 is highly loaded by Power, Looks and Brand. Speed is located somewhere in between component 1 and component 2 but close to component 1.Component 2 is highly loaded by Price and Mileage.

The above analysis clearly tell us that Brand, Power and Looks form one factor which are determining the buying behavior of the bullet riders. Speed can also be considered in the same factor group.

Page 32: Royal Enfield market research

Objective:

To determine the different segments in the bike market based on the customer’s value perception. This will help us to clearly identify the psychographic profile of our target customer.

Methodology:

Hierarchical cluster analysis is used to determine the number of clusters that exist in the data. The second stage is the K-means ( quick cluster) output with a pre-determined number of clusters to be specified.

Results:

Agglomeration Schedule

Stage

Cluster Combined

Coefficients

Stage Cluster First Appears

Next StageCluster 1 Cluster 2 Cluster 1 Cluster 2

1 22 27 .000 0 0 2

2 22 30 1.000 1 0 7

3 15 23 1.000 0 0 9

4 3 6 1.000 0 0 8

5 20 25 2.000 0 0 9

6 14 19 2.000 0 0 22

7 13 22 2.333 0 2 13

8 3 33 2.500 4 0 10

9 15 20 2.500 3 5 17

10 3 16 2.667 8 0 14

11 36 38 3.000 0 0 30

12 24 29 3.000 0 0 25

13 10 13 3.750 0 7 28

14 3 31 4.000 10 0 17

Page 33: Royal Enfield market research

15 17 32 5.000 0 0 19

16 1 8 5.000 0 0 23

17 3 15 5.250 14 9 22

18 9 11 6.000 0 0 37

19 2 17 6.500 0 15 21

20 12 26 7.000 0 0 31

21 2 21 7.333 19 0 29

22 3 14 7.333 17 6 25

23 1 7 7.500 16 0 26

24 28 37 8.000 0 0 28

25 3 24 10.227 22 12 32

26 1 35 10.333 23 0 31

27 4 5 11.000 0 0 29

28 10 28 11.800 13 24 32

29 2 4 12.250 21 27 33

30 18 36 13.500 0 11 34

31 1 12 14.750 26 20 34

32 3 10 15.011 25 28 33

33 2 3 20.833 29 32 36

34 1 18 22.000 31 30 35

35 1 34 22.778 34 0 36

36 1 2 30.585 35 33 37

37 1 9 32.778 36 18 0

Page 34: Royal Enfield market research

Dendogram:

The above Dendogram clearly tells us that are 2 major clusters of data available to us.

Page 35: Royal Enfield market research

K-means Cluster Results:

Final Cluster Centers

Cluster

1 2

SenseofFreedom 3 1

SpeedandThrill 4 2

Convinience 4 2

SenseofControl 4 2

ToShowOff 2 4

The values close to 1 indicate higher loading to that particular factor since the rankings were asked to be given from 1-5,Highest-1 and Lowest-2.

Hence the cluster 1 is governed by Speed and Thrill, Convenience and Sense of Control. Cluster 2 is governed by the factor, to show off .Sense of freedom is prevailing in both the clusters with higher loading in the cluster 2.

Page 36: Royal Enfield market research

Objective :

To determine the significance of the association of psychographic variables: Sense of Control, Sense of freedom and Speed and Thrill, on the kind of bike a person owns.

Methodology:

Cross-tabulation and Chi-square test can be used to test the significance of association of these variables on our dependant variable.

Results:

Chi-Square Tests

Value dfAsymp. Sig. (2-sided)

Pearson Chi-Square 10.566a 4 .032

Likelihood Ratio 13.247 4 .010

Linear-by-Linear Association

3.020 1 .082

N of Valid Cases 38

The Pearson Chi-Square significance value is less than .05, hence sense of control is highly significant in terms of the bike a person owns.

Page 37: Royal Enfield market research

Crosstab

BulletRider

Total0 1

SenseofControl 1 Count 2 9 11

% within SenseofControl 18.2% 81.8% 100.0%

% within BulletRider 10.5% 47.4% 28.9%

% of Total 5.3% 23.7% 28.9%

2 Count 4 4 8

% within SenseofControl 50.0% 50.0% 100.0%

% within BulletRider 21.1% 21.1% 21.1%

% of Total 10.5% 10.5% 21.1%

3 Count 6 0 6

% within SenseofControl 100.0% .0% 100.0%

% within BulletRider 31.6% .0% 15.8%

% of Total 15.8% .0% 15.8%

4 Count 5 4 9

% within SenseofControl 55.6% 44.4% 100.0%

% within BulletRider 26.3% 21.1% 23.7%

% of Total 13.2% 10.5% 23.7%

5 Count 2 2 4

% within SenseofControl 50.0% 50.0% 100.0%

% within BulletRider 10.5% 10.5% 10.5%

Page 38: Royal Enfield market research

% of Total 5.3% 5.3% 10.5%

Total Count 19 19 38

% within SenseofControl 50.0% 50.0% 100.0%

% within BulletRider 100.0% 100.0% 100.0%

% of Total 50.0% 50.0% 100.0%

The above table tells us that 81 % people who had rated Sense of Control as their number 1 preference were bullet riders. The reason for this could be the kind of stability and comfort a bullet rider associates his bike with.Sense of Freedom:

Chi-Square Tests

Value dfAsymp. Sig. (2-sided)

Pearson Chi-Square 2.561a 4 .634

Likelihood Ratio 2.963 4 .564

Linear-by-Linear Association

.674 1 .412

N of Valid Cases 38

The significance Pearson Chi-Square is 0.634 which is greater than .05,hence Sense of freedom is not significant in determining the kind of bike a person owns.

Page 39: Royal Enfield market research

Speed and Thrill:

Chi-Square Tests

Value dfAsymp. Sig. (2-sided)

Pearson Chi-Square 6.971a 4 .137

Likelihood Ratio 8.604 4 .072

Linear-by-Linear Association

.235 1 .628

N of Valid Cases 38

The significance Pearson Chi-Square is 0.137 which is greater than .05,hence Speed and Thrill is not significant in determining the kind of bike a person owns.

Hence, we can conclude that out the major psychographic variables that form the part of the target segment ,it is the sense of control with which the bullet is associated with is the most significant factor.

Page 40: Royal Enfield market research

Competitor Analysis using Multi Dimensional Scaling

From the Multi Dimensional Scaling we arrive at this plot where the 10 motorcycles are

plotted according to two Dimensions:

1. Dimension-1: Motorcycles which score high on Dimension-1 are Royal Enfield

Bullet, Royal Enfield Thunderbird, Yamaha Enticer, and Bajaj Avenger.

From the general perception of these bikes, we can estimate Dimension-1 to be a

combination of Ride Comfort and Sense of Freedom parameters. So the motorcycles

that have a tourer, or low-rider image score higher along this dimension.

2. Dimension-2: With the Hero Honda Splendor the Highest scorer on Dimension-2, we

can estimate this to be a more cost sensitive dimension, where the total Vehicle

Operation Cost of a vehicle has been considered. Hero Honda Splendor with its

legendary mileage figures, scores very high on this dimension.

Page 41: Royal Enfield market research

Looking at the plot derived from the responses, we can find the various motorcycles

grouping themselves into representative zones. The Royal Enfield motorcycles are

clubbed closely together showing that they are perceived very similarly. The Bajaj

Pulsar 220 and the Yamaha R15 are located close to each other given their

performance based image of being sporty bikes. Contrary to the marketing

communication trying to position Hero Honda Karizma as a sporty bike, it seems to

have made more of an impact as a tourer than a sport model.

The Yezdi’s placement seems to be biased as most Yezdi owners are die-hard

enthusiasts to be maintaining a motorcycle that has been out of production for quite

some time now and frequently report service and spares issues. Even then it seems to

be a costly proposition with a typically enthusiasts position in the plot.

The Avenger with its 200cc engine seems closer to the Royal Enfield bikes, and at

175cc, the Enticer hovers around this region.

The Yamaha RX100’s position is unique. It has been out of production for a while, a

2-stroke bike that does not feature latest technology and has a moderate operating

cost. However, since the study was based mostly in Manipal, the large number of

student hand-me-down RX100’s and RX135’s makes this a popular choice in this

region. We doubt if it would have the same position outside Manipal as well.

Also the Hero Honda Karizma’s position shows that people find it to be quite a

balanced vehicle along these two dimensions. However, it lays to rest Hero Honda’s

“Fill It-Shut It-Forget It” proposition.

Page 42: Royal Enfield market research

Perception about Spare Parts Availability

47%

9%

21%

24%

They are readily availableWe don’t get them readily in Manipal. Cities have themThey do not have good spares supply.Major headache!

53% of the respondents are discontent with the availability of spare parts out of which 23% of them describe the situation as Major headache for them.

After Sales Service

68%

18%

14%

Specialist MechanicCompany Service StationI do it myself

None of the respondents trust any other mechanic for the service of their bullet and prefer to go to a specialist mechanic (68%) or a company service station (18%). 14% of the respondents trusted their knowledge about bike and preferred to service it by themselves.

Page 43: Royal Enfield market research

Barriers of Purchase

14%

10%

28%

10%

3%

21%

14%

High maintenancePoor after Sales ServiceHigh PriceLow MileageNoisy vehicleIt’s too heavy. Not for meNot sporty enough

Maximum number of people (28%) described the reason for their reluctance from buying Bullet as the high price associated with it while 21% said that a heavy bike like bullet was not suitable for them. Third biggest reason as the barrio of purchase is the high maintenance required for the bike and the bike not being sporty enough. The noise produced by the bike during its run affected the least number of respondents while 10% of respondents each, refrained because of the low mileage and the poor after sales service of Bullet.

Media HabitsWhat should Bullet ads show?

4%23%

27%

10%

20%

16%

SpeedPowerRespectLookComfortReliability

Page 44: Royal Enfield market research

A major 50% of the respondents feel that Bullet ads should reflect respect and power instead of focusing on any other charcteristic of the bike like speed,comfort, look or reliability; with 27% responding in favor of respect and 23% in favor of power.

Newspaper Reading Habits

41%

24%

9%

8%

18%

Times of India The HinduEconomic TimesDeccan chronicleOthers

Times of India and The Hindu enjoy a huge market share of 65% together among the bike riders as most popular newspapers. Out of the 14 options provided to the respondents, remaining 12 are read by only 35% of the bike riders with Economic Times and Deccan chronicle preferred by 17% by of the respondents.

Popular Websites Viewed

02468

101214161820

Series1

Page 45: Royal Enfield market research

Most of the bikers visit at least one automobile related website to keep themselves updated. Royalenfield is the most visited website, followed by team-bhp and Harley-davidson, by the bike riders in automobile related websites’ category.

Magazine Reading Habits

India Today Reader's Digest

Bike India Auto Car India

OverDrive Outlook Others0

2

4

6

8

10

12

14

16

Out of the 15 magazines from different categories, the most popular magazine among the bike riders is OverDrive followed by AutoCar india and India Today. Automobile magazines dominate the share (53%) among the bike riders in comparison to other magazines from political, healthcare, business or entertainment category.

Social Media Habits

Facebook Orkut Twitter Others LinkedIn Hi50

5

10

15

20

25

30

35

Social Media industry is largely dominated by Facebook and Orkut among the bike riders with around 63% of the bike riders using one of the two websites for socialization.

Page 46: Royal Enfield market research

Other findingsPlace of Purchase

58%

37%

5%

ShowroomDirect Second handUsed vehicles dealership

58% of the Bullet riders prefer to buy their bike from showroom only and 37% may buy it Second hand dircetly. But none of them buys the bike through brokers which shows that reliability of an outside party is low while making the purchase decision among the Bullet riders.

Effect of Influencers

58%

42%

I decided before buyingFriend/Colleague

Personal decision is the biggest influencer in the buying decision of Bullet riders while 42% follow the suggestion of friends and colleagues. But reinforcing the fact that reliability of an outside party is low for Bullet riders, none of them are influenced by the recommendations of private dealers or any company employee.

Page 47: Royal Enfield market research

Advertisement Effectiveness

44%

19%

36%

Everybody makes way for the Bullet TV CommercialLeave Home print AdDon’t really recall seeing one

Out of the 3 TV commercials and 2 print ads mentioned in the questionnaire, 2 TV commercials and 1 print ad have failed to register the eyes of the respondents completely. While the maximum number (45%) of respondents could recall one of the TV commercial, a large number of respondents (36%) couldn’t recall seeing any ad of Bullet.

Page 48: Royal Enfield market research

Physique Personality

Culture (Values)Relationship

Reflection Self Image

Qualitative AnalysisAccording to Jean-Noël Kapferer, the image of a brand can be established using a human

metaphor who is perceived by customers in the same way as they would perceive the brand.

There are various factors that go into creating this identity for a brand and in the Kapferer’s

model six of these factors go into making the Brand Identity Prism.

In the case of the Bullet, the factors were discussed in detail with the interviewees and the

findings were as follows:

1. Physique (Appearance) - The significant physical image that comes to the mind of

the respondents when they think about Hunk are its muscular looks, Fuel tank and the

bull.

Most respondents felt that the bike looks best when in Black.

2. Personality – When respondents were asked what the personality of the bike was or

to describe the person if Bullet were one, the following response was obtained.

“Bullet will be a well built & confident male, aged between 25 – 35 years. He has

good height and is a professional whose annual income is between 2 and 5 Lakhs.”

Bullet was related to the following celebrities – John Abraham, Milind Soman,

Mahendra Singh Dhoni, Sanjay Dutt, Akshay Kumar and Salman Khan. This shows

an affinity for well built males with a confident image. Most of the respondents

idolized action heroes.

3. Culture – Most common associations when it came to culture exhibited extreme

Value-expressive attitude. Most people found the representative culture to be Firm yet

Polite, which is characteristically Asian. They felt the identity would be truthful,

respected and have to ability to stand out in a crowd by the dint of his ability. The

partying, loud, rebellious image was wholly negated in favor of the Freedom loving

image.

Page 49: Royal Enfield market research

PhysiqueMuscular look, Fuel tank, Black Bull

PersonalityMasculine, Well Built, Confident

Culture (Values)Polite, Firm, Asian, Honest, Standing Out

RelationshipBest Friend, Elder Brother, Exclusive

ReflectionWell Built, Masculine, Confident, Aesthetic

Self ImageStrong-Willed, Chivalrous, Loves freedom

4. Relationship – This poses an antithesis to the earlier image of a male as most riders

felt the Bullet was their wife! However, going by the trust and confidence generally

associated with the relationship, a best friend or Elder brotherly image can be

construed.

5. Reflection – When asked who would be the ideal customer for a Bullet, respondents

said that it would be a Male professional, around 25 years of age, well built, confident

and who would most probably work in a position that commands respect. His hobbies

would include long rides and photography.

6. Self Image – The customer of a Bullet would be a strong-willed, chivalrous person

with a love for freedom to whom trends of public perception would mean very little.

Page 50: Royal Enfield market research

Conclusion and Recommendations

The following are the Conclusions from the Data Analysis:

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, 20-35 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 non-Bullet

riders.

7. Bullets are perceived as low on cost-effectiveness, but high on ride comfort and

reliability.

Based on our findings, we can make the following recommendations to Royal Enfield:

1. Marketing Communication should focus on satisfying the needs for Respect, Power

and Comfort.

2. A non-flamboyant well-built brand ambassador may be chosen to represent the Brand

3. Television Commercial spots are more remembered than Print Advertisements even

when they are over 6 years old.

4. Royal Enfield should concentrate on building around the iconic status it already

enjoys if it plans to attract customers migrating to other manufacturers.

Page 51: Royal Enfield market research

Limitations

Despite best efforts, certain important facets of this study remained uncovered. Some of them

are as follows:

1. A sample of 19 respondents is not representative of the attitudes of more than 10,000

active Bullet riders across the country.

2. Enfield exports slightly modified motorcycles to 13 nations. No feedback regarding

those models was taken.

3. Discriminant Analysis could not be performed as the data was collected in Ordinal

form and was not Metric. This is why an Independent t-test was performed.

4. Important factors like Safety were never truly looked into as most riders considered

this to be a hygiene factor across all motorcycles.

The study was limited in scope and resources and as mentioned earlier, the data was only a

representative of the kind of data that would need to be analyzed if the study is scaled to a

bigger population.

Page 52: Royal Enfield market research

References

1. http://www.royalenfield.com/

2. Nargundkar, R. Marketing Research, 3rd Edition

3. Schiffman, L G. and Kanuk, L L., Consumer Behavior, 8th Edition

4. Beri, G C., Business Statistics, 2nd Edition

5. http://www.eicherworld.com/

6. http://www.wikipedia.org

7. http://www.team-bhp.com

8. August 2009, Bike India, Vol. 5, Issue 001