Bajaj Auto Business Strategy Analysis
Bajaj Auto is one of the oldest automobile manufacturers of India which is more popularly known as “Hamara Bajaj”. Bajaj Auto has been ruling the scooter market of India for some decades with its household product “Bajaj Chetak”. The brand was particularly known for its trust, value as well as reliability. Basically ‘Hamara Bajaj’ summed up what Bajaj meant at that point of time.But, in the year 2001, the launch of Pulsar created a new category of common sports bikes which brought up the opportunity to deal with motorcycles. Now, the focus of the company is on motorcycle business and its well-known products that are CT, and Pulsar lies within the top 10 motorcycles which are being sold in India. The company worked in several areas for the transformation of brand perception from a scooter company to a motorcycle company and built some of the very powerful brands like Pulsar, Avenger, Dominar, V and Platina, each of them occupying its own space in the market.
The company is presently targeting to create a strong presence in the market of electric scooters or motorcycles which would certainly be an attractive space to be in. Bajaj automobile is now looking forward to entering the segment of an electric vehicle with new motorcycles and scooters in India. All these electric vehicle offerings by Bajaj Auto are expected to be launched in India by the year 2020.
The company is aiming at about 20 to 25 percent market share as it has shown an improvement from the 15 to 18 percent market share in the year 2018. Bajaj is aiming for increasing its market share in the next 12 months to come. The 10 percent gain in the market share in the next two years would be something outstanding for Bajaj Auto.
Over the last few years of time, the brand has shown tremendous growth and most importantly the growth is not limited to the Indian boundaries. At present, Bajaj is available in about 70 countries all over the world. But the markets keep on fluctuating thereby continuing to be uncertain at all the times. In spite of this, the company by the end of the year would have exceeded in exporting more than about 2 million units in a calendar year across to 70 countries over the world as per the export plan of the company. The exports which are talked about here would basically represent about 40 percent of the overall sales of the company.
The relationship of Bajaj Auto and the dealers have been quite encouraging. The business relationship manager Mr. Rahul Bajaj played a vital role to make this bonding strong during his days made the bonding very strong. Almost all the dealers are having more than 30 years of business relationship and are continuing even after the post is taken over by Mr. Rajeev Bajaj has. The present volume of the dealership is 4,450 and it is continuously growing. This is because of the frequent launch of new models, simply over the KTM products which are adding numbers to the dealerships. The upgradation of technology is a continuous process and here Bajaj is having an advantage of KTM technology which they can very easily adopt in its range of products. This makes the Bajaj products technologically quite strong which makes the competition stronger for its competitors.
It is clearly observed that in some of the instances that Bajaj Auto was not supplying the required models to the dealers when the orders were placed. In an addition to this, the models which are readily available in the inventory are getting dumped. The company began focusing on CSI (Customer Satisfaction Index) which is presently at the infant stage of implementation at the dealership. There is no dedicated team for CSI available in most of the dealership. The existing team of the dealership is sharing the responsibilities. As a result of this, the overall process is getting neglected. Also, the company has begun to tighten the dealerships regarding the small amount which the dealerships make by selling performance enhancement additives.
Most of the dealerships are bound to the fixed labor charges of the company and as a result of this, the small amount charged by the dealerships might not affect CSI significantly. Now, if the question arises as to why the dealerships run after these small amounts if the company is taking care of the income of the workshop. Yes, it is true that the labor charges of Bajaj are too low for the purpose of making their customers happy but the first customer of the company that is the dealers who are feeling the pinch.
This new positioning will necessarily be reflecting in the retail showrooms as well. Bajaj has a network of around 4,500 dealers and sub-dealers who sell the brands exclusively. Both the exterior signage and the interior look, as well as the feel of the showrooms, are being upgraded. Bajaj aims at completing this rapid and frontloaded transformation of the entire brand within this quarter.
Why Pulsar 150 is leading Motorcycle
Bajaj Pulsar 150 is among the most popular range of Bikes from the Two-wheeler manufacturer which is still going strong in terms of sales and Pulsar 150 is one of the models in the series which is the prominent choice in the 150cc segment. The main factors which attribute to the success of Pulsar 150 are its ample power, sporty design, impressive fuel economy, and lucrative pricing. The engine wheeler was designed by the Product Engineering division of Bajaj Auto in association with Tokyo R&D and later with motorcycle designer Glynn Kerr. The engine and the Vehicle got a perfect match and you can feel the excellent biking experience. By increasing the cubic capacity of the engine in order to give more powerful engine (180 and 220cc) keeping the geometry of the motorcycle same may not able to bet the required match what we get in 150cc could be one of the reasons why this
particular model (Pulsar 150) is popular among the most of the buyers apart from the four parameters mentioned above.
Products & Brand image
The products of Bajaj have state-of-the-art styling, technology as well as performance. Bajaj’s product is being sold throughout the world with a strong dominance. But they have not spoken about this position of dominance. This was a big reason as to why Bajaj chose to move the brand from being a heritage to a brand that involves modern technology and design. The entire product range and the fact that Bajaj has built each product into individual brands has been the strength. Finally, the way Bajaj has built a distribution network, nurtured its partners and serviced customers has made it into the trusted brand that they are today.
Advertise only unrelevant facts does not make any sense. As per the survey was done by Brand Koncept, the consumer does not influence by saying that Bajaj is selling in 70 countries. Other OEMs also do not follow the same pitch while they run an ad campaign in India. As per Brand Koncept, by creating proper concept ad, the company can drastically improve ROI.
The wide range of Bajaj products, be it Economy (CT100, Platina) or Premium range (Pulsar, Dominor) are doing very good in the market. CT100 is the entry-level commuter bike whose price starts from Rs 32,000. This is one of the most preferred choices of the customers who wish to upgrade from moped to motorcycle mainly because of its great mileage. The cost of maintenance as well as the service charges are on the lowers side. Moreover, the availability of spare parts is available at every spare parts shop, make these economy models quite service friendly.
Twenty years ago, if anyone bought a Bajaj Chetak, he was of the viewpoint that he was buying something that can be relied upon reliable, designed in one’s own country and available at a pocket-friendly price. ‘Hamara Bajaj’ was moving the whole country at that point in time. A huge number of customers are still of the viewpoint that Bajaj M80, the 80cc step through from Bajaj should have been continued with new 4 stroke engine for the purpose of meeting all the norms of emission. The ultimate reason for preference of M80 was due to its ruggedness and a very simple design. When M80 came up, one model from Hero Honda that is “Street” it was not quite comfortable in making a space in the market of the country. Both Street and M80 are quite like look at, but Street came with a 100cc engine and its price is more than M80. Now, if the customers wanted to buy a step through, there were two options in front of them that are M80 and Street, where M80 is slightly ahead of Street. If Bajaj looked at continuing with M80 by a modification of the engine with 4 strokes, then at this point of time, it would certainly have been one of the best sellers in the Indian market. If we look at the reviews of Bajaj M80, it would be clear that all the customers own these bikes for around 15 to 20 years and all are very happy about its performance including several aspects like pick up, mileage and ease of handling.
The strategy of Bajaj is very clear. Ignore scooters and Step through, focus only on motorcycles to become the number one motorcycle manufacturing company in India. Having a look at the trend and the activities of Bajaj till now, it can be ascertained that Bajaj is not very far from the achievement of the goal. This goal gets great support from its powerful marketing campaign. For an efficient and effective marketing campaign, Bajaj uses a powerful communication on TV, digital media, a lot of outdoor accompanied by several engaging stories. The products from Bajaj are certainly very good, their network is vast, manpower is dedicated and with a little more focus on CSI will certainly push Bajaj towards their aim.