In the early 1760s with the building of the first steam driven tractor by a French Captain, Nicolas Jacob Cugnot
In 1769, the very first self-propelled road vehicle was a military tractor invented by French engineer and mechanic, Nicolas Joseph Cugnot (1725 – 1804). Nicolas Cugnot was the inventor of the first automobile.
1880's & early 1900's
About hundred years ago -The first motor car was imported , Simpson & Co established in 1840.
Railways first came to India in 1850's.
1942 Hindustan Motors Ltd incorporated and their first vehicle was made in 1950.
In 1947 the Government of Bombay accepted a scheme of Bajaj Auto to replace the cycle rickshaw by the auto.
Escorts and Ideal Jawa entered the field in the beginning of sixties.
Association of Indian Automobile Manufacturers formally established in 1960.
Major factors affecting the industry's structure were the implementation of MRTP Act, FERA and Oil Shocks of 1973 and 1979.
Oil Shock of 1973 quickened the process of dieselization of the Commercial Vehicle segment.
Three other companies, namely, Kirloskar Ghatge Patil Auto Ltd, Indian Automotive Ltd and Sen & Pandit Engg products Ltd entered the market during 1971-75
1980's - The period of liberalized policy and intense competition
Lots of new Foreign Collaborations came up in the eighties. Many companies went in for Japanese collaborations LIKE Hindustan Motors Ltd. in collaboration with Isuzu of Japan introduced the Isuzu truck in early eighties.
In 1983 Maruti Udyog Ltd was started in collaboration with Suzuki, a Japanese firm.
Mass Emission Norms were introduced for in 1991 for Petrol Vehicles and in 1992 for Diesel Vehicles.
In 1991 new Industrial Policy was announced. It was the death of the License Raj and the Automobile Industry was allowed to expand.
Further tightening of Emission norms was done in 1996.
In 1997 National Highway Policy has been announced which will have a positive impact on the Automobile Industry.
India is the second largest manufacturer of two-wheelers in the world. It stands next only to China in terms of the number of two-wheelers produced and sold respectively.
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.
The automobile industry is fairly concentrated, as in most of the segments two to three players have cornered a major chunk of the total sales.
For instance, in the two wheelers segment, the sales volumes of Hero Honda, Bajaj Auto and TVS Motors constitute around 80 percent of the total sales.
In the next 2-3 years, the two-wheeler industry is expected to attract investment amounting to Rs 10 billion. The expected rise in income levels, wide choice of models and easy availability of finance at low interest rates will drive growth in, two wheelers growth, which is likely to marginally slow down, but still grow at an average annual growth rate of around 16%.
Shares of Two-Wheeler Manufacturers in Industry Sales (FY2000-9MFY2005)
Electric vehicles EKO vehicle: EKO vehicle a Bangalore based company offers EKO cosmic –I scooter and EGO bike. This company has been in this business for a long time and has dealers in various locations in India than its counterparts. Battery weighs at 28kgs and has a life of 12000 – 15000kms. EKO vehicle: EKO vehicle a Bangalore based company offers EKO cosmic –I scooter and EGO bike. This company has been in this business for a long time and has dealers in various locations in India than its counterparts. Battery weighs at 28kgs and has a life of 12000 – 15000kms. REVA: Reva car is the Indian face of Toyota Prius and Honda FCX. The Reva is offered in three variants — Standard (non-a/c), Air-conditioned and Classe. Priced at Rs 3.1 lakh (on-road) for the base variant and Rs 4.05 lakh for the Classe variant The non air-conditioned base variant has a driving range of 80 km on a full charge, while the other two air-conditioned variants will give you about 60km EX: Yobykes: Indus - division of Electro therm a Gujarat based company is the recent player in electric vehicle market. It offers two scooterette and four bikes models with the motor power range 200-250W. YO-smart scooter model from Indus come with a very compact dimension. The vehicle weighs less and has a payload of 75kg
Problems: These vehicles failed to make definite market why?
Some of their biggest misuses of these vehicles are underpowered performance, the heavy weight of batteries, which consequently drags the performance even further, poor driving range per charge of the batteries and inability to offer all the devices that gasoline/diesel powered cars offer since they will drain the battery and charge needs to be saved for the main purpose of driving the car.
The industry requires consolidation and proper marketing.
“ It is estimated that India’s fossil fuel dependency on other countries currently from 70% to 82% in 2012. If we can have three lakh Electric Vehicles on the roads by 2020, including three-wheelers, cars, and scooters, this could result in a reduction of over 16 lakh metric tons of CO, NOx and HC by 2020, savings of over Rs 3,700 crores in foreign exchange and significant health costs savings”— Automonitor
If you are ready to buy an EV just read what the Indian government offers:
Government has reduced the custom duty on three of the imported components in battery operated vehicles (BOV) to 10%. Excise duty reduced on electric vehicles from 16% to 8% in 2004 budget. But the industry feels that the efforts are not sufficient.
Toyota Prius the model which accounts for nearly 80 per cent of the hybrid vehicle sold globally is about Rs 10 lakh in the US. In India at current levels of duty, it could cost anywhere between Rs 20-25 lakh because of the high import duty.
Dazzel Ltd. Company is setting up an auto project for manufacturing of an innovative and conceptual product viz Electric scooty and rick.
The project will have great significance in the present day context of increasing pollution due to auto emission and is expected to create a revolution in the Indian automobile market.
Its products manufacturing will commence in northern ,eastern and western parts of the Indian market with the aim of establishing its brands as a necessity for the Indian buyers.
The company will follow a strategic positioning approach for the target market. Dazzel Ltd. has kept into account the income & behavioral factor of the Indian buyers while designing the product.
It is important for the company to understand the consumer behavior before it goes into such a market. The Indian consumer for the first time will have a premium product which is eco-friendly and affordable
Our business strategy will include the determination of the most beneficial product market in term of establishing itself in this new product segment.
The most important factor for the success of Dazzel Ltd. brand is the perception of the consumer and to what extent it can build a positive image in the consumer’s mind.
The intensity of the business environment, the sustainable competitive advantage of a quality product will give it a strong base to build the market.
It is important for us to adopt a different strategy for the Indian market since it is composed of quality buyers as well as those who will buy for their family. Thus, we shall introduce some new strategies so as to establish our self in the Indian market and develop a strong customer base .
The first growth vector will involves gaining penetration with the existing product-market – Dazzle Ltd. will attempt to attract customers from competitors through its strategic positioning and will establish strong brand equity.
The second growth vector will involves product expansion while staying in the current market. Dazzle Ltd. will then offer a new product. It will be aimed not only for the existing market but also for the price conscious segment.
The third growth vector will apply the same products to the new markets.
The fourth growth vector will be to diversify into new product markets. We shall concentrate on the second growth vector and study the strategy with respect to the two wheeler market.
Target group of age 18-30 , which can be sorted in different parameters such as literacy levels, accessibility, income levels, penetration, distances from colleges, schools, etc.
Also is targeted for rural areas as an estimated induction of Rs 140 billion in the rural sector through the government's rural development schemes in the Seventh Plan and about Rs 300 billion in the Eighth Plan is also believed to have significantly contributed to the rapid growth in demand.
Thus, DAZZLE Ltd. has decided to enter this market with the basic idea of tapping the Indian lower middle class which had established itself as a huge untapped market in the perceptions of a lot of national & multinational players who were then trying forays into the Indian market.
Electro Scooty will be priced around Rs. 25000 designed exclusively for Students, Girls, Veterans and middle-aged and Electro Rick will be introduced as a product for public transport at a later stage.
The Indian automobile market is currently estimated at a modest Rs. 504bn. It is projected to grow at 16% annually.
The Hero Honda dominates the market with a combined share of 48% it a veritable giant in the industry. TVS and Bajaj Auto are tied at 23% each according to ORG estimates.
The present market for two wheeler is segmented mainly on the bases of income and lifestyle. Where Honda and Yamaha cater to the premium class, Hero Honda cater to the popular class, Bajaj and TVS cater to the popular and economy class respectively.
Launch : What started out as a Joint Venture between Hero Group, the world's largest bicycle manufacturers and the Honda Motor Company of Japan, has today become the World's single largest two-wheeler Company. Coming into existence on January 19, 1984, Hero Honda Motors Limited gave India nothing less than a revolution on two-wheels, made even more famous by the 'Fill it - Shut it - Forget it ‘ campaign. It has a market share of 48% Launch: Bajaj Auto Ltd was incorporated in 1945 as Bachraj Trading Corporation. Initially it started by assembling two and three wheelers in collaboration with Piaggio of Italy. After the expiry of the agreement in 1971 the two and three wheelers acquired the brand name of Bajaj. Bajaj Auto's two vehicle manufacturing plants are spread over 1 500 acres in two cities, produce a vehicle every 17 seconds and employ over 18 000 people.
Paramaters Hero Honda Bajaj TARGET The target group of Hero Honda is different for its different bike ranges. : Bajaj Auto cater to the popular and economy class respectively. PRODUCT The target group of Hero Honda is different for its different bike ranges. Chetak, Pulsar, Eliminator etc POSITIONING :- Designed with your comfort in mind, with a contoured low-slung seat, specially designed handlebar and a strong double-cradled tubular frame. It is a value that makes Bajaj worthy of credibility through integrity, of trust through sensitivity and of loyalty through interdependence DIFFERENTITATION Better or wider distribution: the distribution network of the splendor plus is excellent example. Their distribution divided into four zones Better value for the consumers money (passport schemes ):additional features are given to customers issuing passports & insurance.
PRICE RANGE Bike Ex Showroom Price On Road Price Bajaj Chetak 30,899 34,912 Pulsar DTS-I 52345 55750 Bajaj Eliminator 67245 72344 PRICE RANGE Bike Ex Showroom Price On Road Price CD DAWN 30,899 34,912 PASSION PLUS DRUM 43,816 47,920 SPLENDER PLUS DRUM 42,351 46,328 KARIZMA 74,292 81,049
Market share of the competitors Dazzle Ltd. does not come in this graph because it’s a new entrant in to the two wheeler segment of the automobile industry
The major players in the domestic two-wheeler industry have announced robust growth in volumes for the month of December 2004. The total motorcycle sales of the top three players registered a 54.1% yoy growth to 437,974 units. The major contributor to the growth was Bajaj Auto, which registered a 100.7% yoy growth in volumes for motorcycles .
Although Bajaj Auto registered a 100.7% yoy growth in motorcycle sales, the volumes declined by 6.8% on a month on month (mom) basis. The cumulative motorcycle sales have crossed the one million mark and registered a 38.5% yoy growth to 1,053,566 units. All three Bajaj motorcycles - CT100, Discover DTS-I and Pulsar DTS-I - are leaders in their respective segments. The three-wheeler sales decreased substantially by 31.6% yoy to 14,705 units and on a cumulative basis, the sales were almost flat at 168,260 units.
Dec 2004 Dec 2003 yoy (%) April - Dec 04 April - Dec 03 Yoy (%) Motorcycle 143,727 71,623 100.7 1,053,566 760,658 38.5 Total two wheeler 154,101 85,086 81.1 1,178,017 956,188 23.2 Three-wheeler 14,705 21,483 -31.6 168,260 168,745 -0.3 Total Vehicles 168,806 106,569 58.4 1,346,277 1,124,933 19.7
To create awareness and develop franchise for a new brand requires enormous initial expenditure is required on launch advertisements, free samples and product promotions .
In relative terms, marketing function has greater importance in the automobile industry. The players have to reach out to mass population and compete with several other brands.
Customers purchase decisions are based on perceptions about brands. They also keep on changing with fashion, income and changes in lifestyle. Unlike industrial products, it is difficult to differentiate products on technical or functional grounds
Brand equity refers to the intangible asset in the form of brand names. The consumer's loyalty for a particular brand is due to the perception that the product has distinctively superior and consistent quality, satisfies his/ her specific needs.
Distribution network: Availability near the customer is vital for wider penetration as most products are high value products. There are entry barriers for a new entrant as a new product is typically slow moving and has lesser consumer demand.
The concept is to make the product different from those of its competitor. When we look at the Indian two wheeler market we see that the leaders Hero Honda has constantly maintained its market leadership by constantly differentiating on the basis of newer products, newer slogans like “Jet Set Go”
And coming up with line extensions with regular frequency. The only alternative for DAZZEL Ltd. to survive in this industry will be to differentiate itself.
This differentiation could be on the basis of the marketing mix. (Product, Price, Promotion, Place) Thus, as per the different factors of marketing mix 4 Different strategies are made to market in the developing cities in India.
DAZZEL Ltd. will put forward itself to the customer as a product of superior quality with features like eco-friendly, no harmful gas emission because it is totally battery operated and at a reasonable price.it will use 2 fold strategy.
One will be to introduce a new product in the market, which is priced less than its present brand of two wheelers like TVS, Bajaj & Hero Honda, and will lead ad campaigns so that the customer can perceive it as a superior & reliable product.
The other strategy will be to hold on to its present brand of batteries. If we critically examine the success of Hero Honda in recent times we find that it is largely due to its Splendor model, which is targeted at the lower middle class segment.
Price range: Rs. 25000 – 30000/- (Inclusive of Tax)
Extremely safe and reliable to drive.
No PUC required.
Battery design: Indigenous and full charge in 60 mins.
Built in Charger
The name of a company will also help to differentiate itself and build image in the long run. When DAZZEL Ltd. will first come to the Indian market as a electronic battery operated two wheeler manufacturer it will try to use its international name to pierce the Indian market and revolutionize the two wheeler market. This has been hardly been the case in the launch of the motorcycle segment. DAZZEL Ltd. will leverage on its international name in order to attain competencies.
DAZZEL Ltd. will launch its ELECTRO range of two wheelers addressing the Indian palate with the first time ever product launched specifically for a local rural & urban market to some extent. DAZZEL Ltd. will position on pricing and its all-pervasive cheap plank. The Electro Bike MLX will be priced at Rs. 25000-27000 especially meant for Student segment, Electro Scooty will be priced around Rs. 27000-30000 designed exclusively for Youth, Veterans and Disabled.
Electro Scooty is specially designed for the Students and Female Customer Group aged between 15 – 35 years due to the following features:
Light Weight, Extremely safe and reliable to drive, Front & Rear Hand Brakes, Side Stand
Low maintenance, Auto Start
Pollution noise free two – wheeler
Comfortable Seating Arrangement
With latest R&D the battery is charged in less hours and giving more o/p..
Replacement life is about two years..less expensive
No Driver’s License require, No Registration Required.
Thus, DAZZEL Ltd has its target group as the youngsters as well the middle aged people. Since all the other products have their target group as 18 and above, DAZZEL Ltd. will face less competition in the Teenager group.
It will also be provided in new funky colours and styles which are specially meant for youngsters as now Indian youngsters are shifting towards western culture.
Push promotion strategy involves getting the retailers/dealers to vouch for your product by giving them larger profit margins and giving them incentives for the number of sales of your product that are made from their shops/showrooms.
Pull promotion strategy involves promoting your product on a very large scale and making it visible on the market, thus raising the customers curiosity about the product and hence inducing them to buy it.
Road Shows: The company plans to stage road shows, to display vehicles in the pavilions during various college festivals, like Malhar, Space, Indigo, Bhavams etc.
Television advertisements : Advertisements to promote and market our product will be shown on leading television channels. Major music and sports channels will promoteas they will reach out to the youth while our ELECTRO SCOOTY meant especially for female riders will be promoted through Star, Zee, Sony and Doordarshan etc as it has more female viewers.
Radio is the medium with the widest coverage. Studies have recently shown high levels of exposure to radio broadcasting both within urban and rural areas, whether or not listeners actually own a set. Many people listen to other people's radios or hear them in public places. So radio announcements will be made and advertisements will be announced on the radio about the product features and price, qualities, etc.
Print Ads: Daily advertisements in leading newspapers and magazines will be used to promote the product. Leaflets at the initial stage will be distributed at railway stations, malls, college areas and various other locations.
Workshops and seminars: Workshops and seminars will be held in colleges to make people aware about the companies past performance and product features, its affordability and usage, vast distribution network. Road shows will be conducted where free trials of the bike would be given.
Banners, neon signs: Hoardings, banners, neon signs will be displayed at clubs, discos, outside theatres and shops to promote our range of bikes.
Booklets and pamphlets: Booklets will be kept at bike showrooms, retail battery outlets, etc for the customer to read. These booklets will provide information about our company, the products offered which suits the customers need accordingly.
After sales service : The after sales service will add into the appeal for the Electric Vehicles (E.V.S). First of all, these are maintenance free vehicles. There is one-year guarantee.
Proper care & maintenance are paramount for trouble free operation & optimum performance for every Motorcycle.
DAZZEL Ltd. offers 6 free services on its motorcycles. The customers must avail these services after purchase within a year or as per the below mentioned km range, whichever is earlier:
First Free service By 500 kms
Second Free service 500 - 1500 kms
Third Free service 1500 - 3500 kms
Fourth Free service 3500 - 6500 km
Fifth Free service 6500 - 9500 km
Sixth Free service 9500 - 11500 km
Bike would be traceable with an in built sensor in case of emergency and thus even if bikes are stolen; there is no need to worry. It has a password protection and if in case it is forgotten by the customer, just by a call on the helpline and the password would be delivered according to the customer’s choice as soon as possible.
Customers will be educated on Safe Riding techniques through various audio visual aids. Safety Instructors will be imparting riding skills as well as education to the customers.
The pricing strategy adopted by DAZZEL Ltd. for its two wheeler electronic bikes is PENETRATION PRICING because it is a total new brand, which is entering a market, which is already facing immense competition. And breaking this competition and attracting new requires quality product at low price. Hence our product will be priced low which will be economical and will encourage new buyers. Hence we have adopted the penetration pricing method for capturing market share and establishing ourselves in the market.
The Actual Cost of Production of our ELECTRO SCOOTY
Our Manufacturing cost Rs. 16700/-
The profit earned By Manufacturer is: 31.75% (i.e. 5302.259)
Retailer’s buys From manufacturer is: Rs. 22002.25/-
Strengths: Fixed capital cost of ownership Minimum recurring expenses. Convenience to use Instant appeal to young fraternity in terms of design Maintenance free and low wear and tear Pollution free-noise and air (environmental friendly) Contributing to national objective and saving Opportunities: Reduction in oil imports Solar power stations for battery charging. Light weight plastic grid battery will have an international market. Export potential. Weaknesses: Inoperative in areas where power is unavailable. Travel distance restricted to Km per charge Battery replacement after 300 cycles of operation. Threats: Reaction or competition from existing manufacturers of two wheelers.