Bajaj Auto Ltd.’s Brand Centric Strategy


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Rajiv’s decision to focus on twin – brand strategy

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  • Rajiv bajaj his strategy is good regarding brand centric stategy.He is utilize so wanderfully .
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Bajaj Auto Ltd.’s Brand Centric Strategy

  1. 1. Refer to the case study “Bajaj Auto Ltd.’s Brand Centric Strategy”. Do you feel justifiedwith Rajiv’s decision to focus on twin – brand strategy? Provide your argument supportedby necessary external and internal analysis.Bajaj Auto Ltd: Two brand strategic analysis Page 1
  2. 2. I. INTRODUCTION OF THE COMPANYA. The Indian Two-Wheeler IndustryThe history of the Indian two-wheeler industry, comprising scooters, motorcycles, and mopeds,had its beginnings in the late 1940s, when Bajaj Auto started selling imported scooters (1948)and Automobile Products of India (API) along with Royal Enfield started manufacturing scooters(1955) and motor cycles respectively in India. In the evolution stage, the Indian two-wheelerindustry was highly regulated by the Government of India (GOI) and was largely structured byIndian industrial policies. The License Raj system imposed a strict control on the industry byregulating the entry of new players, imports, and foreign investments.B. History of Bajaj AutoFounded in 1956, at the height of India’s movement for independence from the British, thegroup has an illustrious history. Theintegrity, dedication, resourcefulness and determination tosucceedwhich are characteristics o the group today are often tracked back to its birth duringthose days of relentless devotion to a common cause. Jamnalal Bajaj, founder of the group, wasclose confidant and disciple of Mahatma Gandhi. In fact Gandhiji had adopted him as his son.The close relationship and his deep involvement in the independence movement did not leaveJamnalal Bajaj with much time to spend onhis newly launched business venture.His son, Kamalnayan Bajaj, then 27, took over the reins of business in 1942. He too was close toGhandhiji and it was only after independence in 1947, that he was able to give his full attentionto the business. Kamalnayan Bajaj not only consolidated the group, built also diversified intovarious manufacturing activities. The present chairman of the group, Rahul Bajaj, took charge ofthe business in 1965. Under his leadership, the turnover of the Bajaj Auto the flagship companyhas gone up from Rs. 72 million to Rs. 46.16 billion, its product portfolio has expanded from oneto and the brand has found a global market. He is one of the India’s most distinguish businessleaders and internationally respected for his business acumen and entrepreneurial spirit.This case is about the brand centric strategy that the fourth largest two – and three wheelermanufacturer in the world, Bajaj Auto Ltd., adopted in 2009. The scooters produced under theBajaj Auto Ltd: Two brand strategic analysis Page 2
  3. 3. Chetak brand name dominated the Indian two wheelers market from early 1970s to the early1990s and helped Bajaj Auto became a leader in the industry. As the Indian Two wheelerIndustry was deregulated and faced the competition in the 1990s, Bajaj Auto began to face athreat from foreign players. In addition, in late 1990s, due to the shift in consumer preferencesand demand from scooters to motorcycles, Bajaj Auto’s sales and market shares started decliningand posed a challenge of sustenance for the company.As a result, by the early 2000s, motorcycle sales surpassed that of scooters and Bajaj Auto lostits market share to Hero Honda. In an attempt to recapture market share, Bajaj Auto restructuredits business and launched new motorcycle models. However, Bajaj Auto lost its dominance in thescooter market. Realizing the changing dynamics of the Indian two-wheeler industry and thedeficiencies at Bajaj Auto, Rajiv Bajaj began to develop a new strategy for the company. Heshifted the focus from scooters to motorcycles and emphasized enhancing the quality ofproducts. With the twin- brand strategy, he focused in only two brands Discover and pulsarpulling back the Bajaj name, as it is associated with various other products. And with the changein strategy he was able to double his lost market share as well as sales.Bajaj Auto, which began in 1945 as a trading company, importing and selling two-and three-wheelers in India, started vehicle manufacturing in 1959 by obtaining the rights from Italy-basedPiaggio. Once the agreement with Piaggio2 expired, the company made and sold vehicles underthe Bajaj name. Since the mid-1960s, under the reins of Rahul Bajaj, the thirdgeneration head ofthe company, Bajaj Auto began to grow and create the image of a reliable scooter brand in India.C. Managerial Style at Bajaj AutoOff late Bajaj Auto Ltd has emphasized a lot on organizational restructuring for the autobusiness. With this restructuring the exiting business roles and responsibilities at the companyhas strengthened and enhanced to ensure greater operational empowerment and effectivemanagement. The five pillars of this new structure (strategic units) are R&D, Engineering, TwoWheeler Business Unit, Commercial Vehicles Business Unit and International Business Unit.These pillars are being supported by functions of finance, MIS, HR, Business development andCommercial.Bajaj Auto Ltd: Two brand strategic analysis Page 3
  4. 4. D. Brand Centric strategyFrom the case we can observe that there is a shift in Bajaj Auto product life cycle that enjoyedtremendous growth in certain stage but due to lack of product differentiation, innovation andonly focusing in cost leadership strategy the Bajaj’s faced an intense competition in the industryand nearly lost the business. So, to gain the lost position, growth and revival of their position inthe two-wheeler market they needed some strategic move to capture that lost position or to set anew position in the mind set of the customer. And among the different alternative growthstrategies, Rajiv chose product development strategy that was focused on the twin brand bydeveloping a new product for the existing market with new features that is highly valued by thecustomers and proved to be the smartest move that doubled their market share in the existing twowheeler market segments. And to identify the growth strategies and the focus of Rajiv’s twinbrand decision we should carefully analyze the external and internal environment. II. EXTERNAL ANALYSISTo analyze the performance of Bajaj Auto, there is the need to analyze every factor related to theindustry and market. And one of the important factors is the external factor that directly affectsany strategic decision of the company. The external analysis deliberately commences with thecustomer and competitor that help define the relevant industry. A. Customer AnalysisCustomer Segment Segment 2003/04 Share* 2003/05 Share* 2008/09** Motorcycle 77.40% 79.70% 80.60% Scooter 16.70% 15.00% 13.90% Mopeds 5.90% 5.30% 5.20% Electric Two-wheeler 0.30%* Case Reference**, April 2010, Market Overview – AutomotivesBajaj Auto Ltd: Two brand strategic analysis Page 4
  5. 5. Segment Description Share % 2001/02 Share % 2006/08 CAGR A1 Scooter <75cc 5 0 -33.9 A2 75-125cc 58 10 32.9 A3 125-250cc 12 1 -27.7 B2 Motorcycle 75-125cc 62 66 14.9 B3 125-250cc 5 17 44.8 B4 >250cc 1 1 5.7 C1 Moped 10 5 -2.7 B. Customer MotivationGrowth is due to rural market demand. Segment Motivation ReasonMotorcycle Variations in models, enhanced Demographic changes (growth technology, fuel efficiency younger population), economy growth, higher disposal income.Scooter Low Price andInexpensive, Increase in the number of working Lowmaintenance cost, long women who prefers scooter as the lasting, reliable. mode of transportationMopeds Less fuel consumption, manual paddling, gearlessElectric Two-wheeler Eco-awareness Shortage of conventional fossil fuelsBajaj Auto Ltd: Two brand strategic analysis Page 5
  6. 6. A1 Scooter <75cc Lower Price, light weight, low-fuel consumption, low maintenance costA2 75-125cc Lower Price, low-weight, low-fuel consumption, low maintenance cost, higher mileageA3 125-250cc Powerful engine, self start, gearless,B2 Motorcycle 75- Variations in model, enhanced technology, fuel efficiency, light 125cc weightB3 125-250cc Variations in models, enhanced technology,quality, looks, sporty designs and appearance, speed, better performanceB4 >250cc Model variations, enhanced technology, sporty and adventurous design and appearance, high speed,C1 Moped Less fuel consumption, manual paddling, gearless C. Unmet needs 1. Availability of back gear 2. Flexible height in same model 3. Theft protection technology 4. Safety of the biker rider 5. More powerful head-lights and stronger engines 6. Tubeless TyresBajaj Auto Ltd: Two brand strategic analysis Page 6
  7. 7. D. CompetitorsCompetitors Identification Company Production Capacity (millions units) Hero Honda 5.4 Bajaj Auto 3.9 TVS 2.4 HMSI 1.6 Suzuki 0.3 Yamaha 0.6 Royal Enfield 0.7Strategic Group Strategic Group Major Competitors Market Share (%) Large Player Hero Honda 45 Medium Scale Player TVS, HMSI 26 Small Scale Player Suzuki, Yamaha 4 Niche player Royal Enfield -Source:, 6 months data. Details are given below in Annex 1Bajaj Auto Ltd: Two brand strategic analysis Page 7
  8. 8. E. Strategic Group AnalysisBajaj Auto Ltd: Two brand strategic analysis Page 8
  9. 9. F. Major CompetitorsBajaj Auto Ltd: Two brand strategic analysis Page 9
  10. 10. G. Competitor Strength GridTwo Wheelers Competitors in Indian Market Description Hero Honda Bajaj Honda Yamaha Suzuki Brand Recognition Price Distribution Channel Availability of service centers Sporty Look Warranty Re-sale Value India market Sales International Sales STRONG ABOVE AVERAGE AVERAGE LESS THAN AVERAGE WEAK H. MarketAnalysisMarket Size Year Scooters Motorcycles 2001 -2002 906,978 2,183,785 2002 -2003 935,094 2,576,866 2003-2004 964,082 3,040,702 2004 -2005 993,969 3,588,029 2005 -2006 1,024,782 4,233,874 2006-2007 1,056,550 4,995,971 2007 -2008 1,089,303 5,895,246 2008 -2009 1,123,072 6,956,390 2009-2010 1,157,887 8,208,540 2010 -2011 1,193,781 9,686,078 2011 -2012 1,230,788 11,429,572Source: SumanTiwari , PESTLE Analysis of automobile sector of India, Lovely Institute ofManagementBajaj Auto Ltd: Two brand strategic analysis Page 10
  11. 11. Sub Market 1. Sales Show Rooms 2. Service Centers 3. Spare parts production units 4. Spare Parts sales outlets 5. Protection gear outlets 6. Second hand and reconditioned bikes outlets 7. Fuel filling centersI. Environment AnalysisSource Description ImportanceTechnological - Global collaboration HighRegularity - Liberation, open High economy, globalizationEconomic - Growth High - High disposable IncomeCultural - HighDemographic - Proportion of High increasing youth populationThreat - New entrants HighOpportunity - Double-digit growth, High growing market of higher CC (>180) bike.Bajaj Auto Ltd: Two brand strategic analysis Page 11
  12. 12. J. Porter’s 5 forces modelBajaj Auto Ltd: Two brand strategic analysis Page 12
  13. 13. Porter’s Five Forces Analysis:Supplier Bargaining Power:Suppliers of auto components are fragmented and are extremely critical for this industry sincemost of the component work is outsourced. Proper supply chain management is a costly yet acritical need.Buyers Bargaining Power:Buyers in automobile market have more choice to choose from and the increasing competition isdriving the bargaining power of customers’higher. With more models to choose from in almostall categories, the market forces have empowered the buyers to a large extent. All these havebeen helped by the fact that the customers are well informed about the products as well throughthe help of Internet, i.e. customers have product information.Industry Rivalry:The industry rivalry is extremely high with any product being matched in a few months bycompetitors. This instinct of the industry is primarily driven by the technical capabilitiesacquired over years of development under the technical collaboration with international players.Substitutes:There is no perfect substitute to this industry. Also, if there is any substitute to a two-wheeler,Bajaj has presence in it. Cars, which again are a mode of transport, do never directly compete orcome in consideration while selecting a two-wheeler. However, with the recent introduction ofTata Nano cars that come at a very cheap rate, they are slowly trying to be a substitute and athreat to the two-wheeler industry. Cycles do never even compete with the low entry-levelmoped for even this choice comes at a comparatively higher economic potential.Summarizing the industry analysis, it can be said that the two-wheeler market is attractive as itscores well on three out of five categories.Entry Barriers: There are high barriers to entry. The market runs on high economies of scale and on high economies of scope as well.Bajaj Auto Ltd: Two brand strategic analysis Page 13
  14. 14. Need for technical expertise is high and thus a new entrant will have a huge uphill task. Owning a strong distribution network is very important and is very costly which certainly takes a lot of time and energy. There is also involvement of huge cost. All these make the barrier high enough to be restraining for any new entrants in the market. K. Distribution Showrooms o Company owned show rooms o Franchised show rooms Dealers/Agents Service CentersNote: Bajaj Auto has a network of 422 dealers and over 1,300 authorized service centers. Thecompany plans to increase the number of dealers to 500 by this financial year. A large number ofthese new dealerships are planned in semi-urban & rural areas. L. Market Trends and DevelopmentThe Indian two-wheeler industry has come a long way since its humble beginning in 1948 whenBajaj Auto started importing and selling Vespa Scooters in India. Since then, the customerpreferences have changed in favor of motorcycles and gearless scooterettes that score higher ontechnology, fuel economy and visual appeal, at the expense of metal-bodied geared scooters andmopeds. These changes in customer preferences have had an impact on fortunes of the players.The erstwhile leaders have either perished or have significantly lost market share, whereas newleaders have emerged.Rising income levels, reducing excise duties, higher loan tenure and loan-to-value offered by thefinancing companies have all fuelled the growth of two-wheeler sales in the country. Besides,mounting traffic chaos and limited parking space has also increased the demand for two-wheelers from households that can afford or actually do own a car. Furthermore, with increasingwomen working population, changing social philosophy and broad-mindedness, the penetrationBajaj Auto Ltd: Two brand strategic analysis Page 14
  15. 15. of two-wheelers that is currently at awfully low level is expected to increase significantly goingforward.Abundant and low cost lab our coupled with local availability of raw materials like steel,aluminum and natural rubber has placed India amongst the low cost producing centers of two-wheelers. Consequently, it anticipates buoyant growth in two-wheeler exports as well. M. Key Success Factor 1. Style 2. Technology 3. Pricing strategy III. INTERNAL ANALYSIS A. Performance AnalysisPortfolio AnalysisBCG Matrix Analysis MARKET SHARE Stars Problematic Child H G i R g Pulsar 150 and 180cc XCD 125 O h Discover Pulsar 200 and 220cc W Blade T H Cash Cows Dogs R L A o T w E Avenger Platina Kristal CT 100 High LowBajaj Auto Ltd: Two brand strategic analysis Page 15
  16. 16. B. Strength of WeaknessSWOTLets analyze the position of Bajaj in the current market set-up, evaluating its strengths,weaknesses, threats and opportunities available.Strengths:  Has a highly experienced management that has a good history and reputation.  Extensively focused on R & D.  Capable of better product design and developments  Widespread distribution network.  Products across all categories have a performance that is high and noteworthy.  The export to domestic sales ratio is high.  Great financial support network (For financing the automobile)  High economies of scale.  High economies of scope.Weaknesses:  Hasnt employed the excess cash for long.  Still has no established brand to match Hero Hondas Splendor in commuter segment in spite of introducing several bikes for that segment.  Not a global player in spite of being the highest exporter from India.  Not a globally recognizable brand (unlike the JV partner Kawasaki or other brands like Honda).Threats:  The competition catches-up on any new innovation in no time.  In spite of low quality motorcycles, a sense of threat always exists from those imported motorcycles.Bajaj Auto Ltd: Two brand strategic analysis Page 16
  17. 17.  Margins getting squeezed from both the directions (Price as well as Cost)  TATA Nano and other mini-compact cars have started to become a serious threat to the two-wheeler industry in whole. They seem to have come into existence to replace the two-wheelers.Opportunities:  Double-digit growth in two-wheeler market.  Untapped market above 180 cc in motorcycles.  More maturity and movement towards higher-end motorcycles.  The growing gearless trendy scooters and scooterette market.  Growing world demand for entry-level motorcycles especially in emerging markets. C. Marketing Strategies - Twos Matrix for BAL External factors Strength weakness Opportunities Can use the existing R & D Must employ the cash in capabilities for new models. production and product Can use Kawasakis capabilities to match External Factors distribution networks competitors and for internationally. continuous export growth. Increase the customer centric initiative and command more customer loyalty. Invest in building world Improve the efficiency of class bikes to sustain the Threat the financing and the international markets insurance arm. independently in the Invest in new product coming years like WIND 125 platforms. Actively market electric range internationally.Bajaj Auto Ltd: Two brand strategic analysis Page 17
  18. 18. D. The Marketing Mix The four Ps PRODUCT PLACE Product Variety, Quality, Design, Channels Coverage, Features, Brand Locations, Name, Packaging, Inventory, Sizes, Services, Transport Warranties, Returns PRICE Promotion Least Price, Sales Promotion, Discounts, Advertising, Allowances, Sales Force, Payment Period, Public Relations, Credit Terms Direct Marketing E. Characteristics of Internal OrganizationMISSION Focus on value based manufacturing Fostering team work & enhancing the capability of the team Continual Improvement Total elimination of wastes Pollution free & safe environmentBajaj Auto Ltd: Two brand strategic analysis Page 18
  19. 19. VISIONTo attain World Class Excellency by demonstrating Value added products to customersSource: Bajaj Auto Ltd. WebsiteCULTURES AND VALUESBRAND IDENTITY Brand is the visual expression of our thoughts and actions. It conveys to everyone our intention to constantly inspire confidence. Customers are the primary audience for their brand. Indeed, their Brand Identity is shaped as much by their belief in Bajaj as it is by their own vision. Everything they do must always reinforce the distinctiveness and the power of their brand. They can do this by living their brand essence and by continuously seeking to enhance their customers experience. In doing so, they ensure a special place for themselves in the hearts and the minds of customers.BRAND ESSENCE Brand Essence is the soul of their brand. Their brand essence encapsulates their mission at Bajaj. It is the singular representation of terms of endearment with their customers. It provides the basis on which they grow profitably in the market. Their Brand Essence is Excitement. Bajaj strives to inspire confidence through excitement engineering. Blending together youthful creativity and competitive technology to exceed the spoken and the implicit expectations of customers. By exploring the unknown and thereby stretching themselves towards today and tomorrow.Bajaj Auto Ltd: Two brand strategic analysis Page 19
  20. 20. BRAND VALUES They live their brand by values of Learning, Innovation, Perfection, Speed, and Transparency. Bajaj will constantly inspire confidence through excitement engineering. Learning is how they ensure proactivity. It is a value that embraces knowledge as the platform for building well informed, reasoned, and decisive actions. Innovation: Innovation is how they create the future. It is a value that provokes them to reach beyond the obvious in pursuit of that which exceeds the ordinary.COMAPANY STRUCUTRE -CUSTOMERFocus value 1. Innovation 2. Speed 3. PerfectionSource: INVETIBALE CHANGEBajaj on internal analysis found that it lacked -1. The technical expertise to deliver competitive goods.Bajaj Auto Ltd: Two brand strategic analysis Page 20
  21. 21. 2. The design know-how.3. And the immediate inability to support the onslaught of competitors.All these forced Bajaj to look for an international partner who could bring in technology and alsooffer some basic platforms to be manufactured and marketed in India. Kawasaki of Japan is aworld-renowned manufacturer of high performance bikes. Bajaj entered into a strategic tie-upwith Kawasaki in late 1990s to enhance its product line and knowledge up-gradation to supportlong-term strategies.This served the purpose of sustaining the market competition for a while. From 1996 to 2000,Bajaj invested hugely in infrastructure while simultaneously developing product design andinnovation capabilities, which is the prime reason behind the energetic Bajaj of 21st century.Bajaj introduced a slew of products right from entry-level motorcycle to the high premiumsegment right from 2001 onwards, and since then its raining success all the way for Bajaj.Last quarter, Bajaj had impressive performance growing at a rate of 20% when the largestmanufacturer grew at just 6%. This stands a testimony to the various important strategicdecisions over the past decade.Bajaj Auto Ltd: Two brand strategic analysis Page 21
  22. 22. MARKET OVERVIEW Automotives April 2010 Market segments Automobiles Two-wheelers Passenger vehicles Commercial vehicles Three-wheelers Mopeds Passenger cars Light commercial Passenger vehicles (LCV) carriers Medium and heavy Scooters Utility vehicles commercial Goods carriers vehicles (M & HCV) Motorcycles Multi-purpose vehicles Electric two- wheelersmarket overview … (1/2) Source: Industry sources ers have grown Domestic sales of10 two-wheelers in 2008–09al growth rate from 6.5 million units 2008-09 6.80 1.15 0.43 s in 2008–09. 2007-08 6.50 1.07 0.43stitutes more than 80 2006-07 7.11 0.94 0.37market. 2005-06 6.20 1.02 0.37nes account for up to 2004-05 5.19 0.98 0.34 to the launch of fuel- 0.00 2.00 4.00 6.00 8.00 10.00 million units Motorcycle S cooter Moped Source: SIAM Bajaj Auto Ltd: Two brand strategic analysis Page 22
  23. 23. market overview … (2/2) Two-wheelers – segment-wise share of productionustry is the (2008–09)orld aftermited, the Scooters 13.9%s the world’s Mopedsmpany. 5.2% Motorcycles 80.6%ral Electric two-aunches and 0.3% wheelers exports … (2/2) Source: SIAMe the developing Two-wheelers — company-wise share of exportsd Latin America. (2008–09) Bajaj Auto 63%der in exports with a shareTVS Motor Company andd. TVS Motor Company19% Hero Honda Motors 8% 12 Growing Honda Motorcycle & Scooter India 5% disposable income Others 4% ration specially inand rural areas Bajaj Auto Ltd: Two brand strategic analysis Page 23 14
  24. 24. F. Current Situation & Current PerformanceBAL was currently outperforming the industry growth rate in two-wheeler segment with 32%growth in year 2004-05 v/s industry growth of 19%. Market share in Motorcycles has beenimproving with every passing year. It had also increased from 28% in 2004-05 to 31% in 2005-06.Annual turnover for the year 2005-06 is Rs. 81.06 billion v/s Rs. 63.23 billion a year before - anincrease of 28%, which is very healthy.BAL has significant presence in all the three basic segments - Price Segment, Value Segmentand Performance Segment - and has been showing increased sales in all the segments over years.Besides this, BAL is a market leader in two-wheeler exports and it consists a great chunk of thereoverall revenues. Currently, BAL is selling over 1 lac motorcycles annually in Sri Lanka, further,they are commanding 50% market share in Central America. G. Profile Change in Indian Two-Wheeler IndustryThe demand shift from scooters to motorcycles in the 1990s was without parallel in anycomparable product category in India. This was mainly attributed to the change in customerspreference towards fuel-efficient and aesthetically appealing models, which scootermanufacturers failed to provide. The delayed launch of new, advanced scooter models, fear offour-stroke scooters being prone to increased skidding risks and vibrations, and the difficulty ofmaintenance also contributed to this shift.Bajaj Auto Ltd: Two brand strategic analysis Page 24
  25. 25. Interestingly, the growth in the motorcycle segment was mainly driven by the demand from ruraland semi-urban consumers. An estimated 60% of the demand for motorcycles came from ruraland semi-urban customers.The rise in their disposable incomes on account of good monsoons in the 1990s provided thenormally conservative rural and semi-urban customers with extra money that induced them toexperiment with new, innovative products.Shift from Scooter to Motorcycle Total in Overall Scooter Motor cycle Moped Year 00 Growth Units % Units % Units % 1993 1503.36 -6.4 709.73 47.2 379.06 25.2 414.57 2 1994 1770.22 17.75 840.17 47.5 472.58 26.7 457.47 2 1995 2209.23 24.8 1033.52 46.8 652.01 29.5 523.7 2 1996 2660.04 20.41 1223.43 46 809.53 30.4 627.08 2 1997 2963.49 11.41 1301.05 43.9 978.68 33 683.76 2 1998 3042.85 2.68 1262.7 41.5 1131.31 37.2 648.84 2 1999 3403.43 11.85 1325.87 39 1395.66 41 681.9 2 2000 3745.55 -0.8 901.88 24 2156.03 58 687.64 1Advanced technology, larger wheelbase, higher ground clearance and the ability to ride on badroads with less effort and less danger of skidding and decreased maintenance cost were the otherfactors that encouraged customers to choose motorbikes over other two-wheelers.Bajaj Auto Ltd: Two brand strategic analysis Page 25
  26. 26. IV. BAL STRATEGY ANALYSIS AND CONCLUSION A. Analyzing Two Brand Strategy of Bajaj Auto LtdRajiv Bajaj after taking over the management of Bajaj Auto Ltd. adopted the new brandingstrategy and with this strategy Bajaj Auto has been doing quite well compared to how they wereperforming in the market. While analyzing the two-brand strategy it is found that the major focusof this strategy is to redefine the positioning of the Bajaj Auto Products. Theoreticallydescribing positioning refers to how the brand is perceived in the mind of the customer. In otherwords, what does the customer think of the brand. Positioning is all about creating a perceptionof the brand in the mind of the customer or providing an experience to the customer thatdevelops the brand image in customer mind. In other word we can say positioning is what we doto the mind of the customer and not what we do to the product in the factory.The positioning helps to create unique image of the particular brand. Bajaj was making a lot ofdifferent items starting from bikes to lights to fans to insurance to finance, auto rickshaw. Thiswas creating confusion in the mind of customers. To change this situation Rajiv Bajaj wanted tochange the positioning of Bajaj Bikes. The Bajaj umbrella was only providing financialadvantage but it was not allowing forming a distinct image of its product in mind of customerand it is in the mind of the customers where all the marketing battles are lost and won and not inthe retail stores. The essence of branding and positioning is to distinguish the product from otherproducts. In case of Bajaj, its own wide range of products was creating confusion in thecustomer’s mind. Moreover, Bajaj was synonymous to Chetak Scooter and the auto rickshawsand from the various data also we have seen that due to shift in the customer preference, the saleof scooter was declining and the sale of motor bike was increasing. The Bajaj Umbrella wasgiving too many meaning and because of this the customer’s point of view was confusing. Thiswas not helping the cause of Bajaj Auto. The competition was increasing and the sales of Bajajwere declining.Bajaj Auto Ltd: Two brand strategic analysis Page 26
  27. 27. Rahul Bajaj with the aim of improving the situation adopted two brand strategies. Under thisstrategy Pulsar and Discover was put onto major focus of the positioning venture. Rahul decidedto drop the word Bajaj from these bikes to reposition these brands.The company started advertising only Pulsar and Discover and did not use the phrase BajajAuto to market either. This effort was started being noticed and recognizedslowly. Highlydifferentiated target groups (TG) for Pulsar and Discover is the prime reason behind the effort todivorce these sub-brands from the parent brand, Bajaj Auto. Efforts were aimed at making thesetwo individual brands stronger than the parent brand and to position them as brands in their ownright.Bajaj had designed Pulsar and Discover for two extreme ends of the consumer spectrum. Thetarget group for Discover was the commuter as it stands for balance, responsibility and allthings homely. Conversely, Pulsar, the performer, symbolized arrogance, irreverence andattitude and hence categorized in the sports category. The styling, imagery and tonality of thebrand were stressed on in the case of Pulsar. Others Oct sales Data For Domestic 8% Market 3w Pulsar 16% 28% Discover 48%Bajaj Auto Ltd: Two brand strategic analysis Page 27
  28. 28. Rebranding of Hamara BajajBajaj Company made sure that the mind space and level of engagement are very conventional forDiscover as opposed to those of Pulsar. Even the media that they choose differ markedly for thetwo - Discover uses conventional advertising and Pulsar uses newer techniques such asAdvertiser Funded Programming (AFP) and digital advertising. With this approach the companywas successful to categorize and position the two vehicles as separate brands. This helped BajajAuto in its growth of sales. They have been doing extremely well compared to its competitor ininternational market. In domestic market also they have been able to close the gap with themarket leader Hero Honda. B. Conclusion:From the analysis we can say that Rahul Bajaj was correct in adopting the two brand strategy.This has increase market share of Bajaj Auto Ltd. With this approach Rahul has successfullycreated a separateposition for its motorbikes. Today the reason why consumers buy a Pulsar isbecause it is a Pulsar, not because it belongs to Bajaj.Bajaj Auto Ltd: Two brand strategic analysis Page 28
  29. 29. V. Annex Annex 1: Monthly Bike sales volum Total %Manufacturer June July August September October November December sales ShareHero Honda 365,734 366,808 415,137 401,290 354,156 381,378 375,838 2,660,341 45Bajaj 165,697 192,835 182,441 249,795 249,681 242,390 219,920 1,502,759 25TVS 115,448 120,994 126,842 142,553 131,000 120,844 119,701 877,382 15HMSI 103,000 112,855 96,149 624,008 11Yamaha 17,878 17,316 19,508 26,394 26,879 17,055 13,612 138,642 2Suzuki 12,734 12,585 13,030 15,719 16,000 14,745 14,806 99,619 2 Total Sales of bike for seven months of 2009 5,902,751 Bajaj Auto Ltd: Two brand strategic analysis Page 29