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The Indian Auto Industry consists of mainly five segments i.e. commercial vehicles, multi utility vehicles and passenger cars, two wheelers, three wheelers and tractors.

BAJAJ AUTO LIMITED and the Two-Wheeler Industry

Bajaj Auto came into existence on November 29, 1945 as M/s Bachraj Trading Corporation Private Limited. It started off by selling imported two- and three-wheelers in India. In 1959, it obtained license from the Government of India to manufacture two- and three-wheelers and it went public in 1960. In 1970, it rolled out its 100,000th vehicle. In 1977, it managed to produce and sell 100,000 vehicles in a single financial year. Bajaj Auto is the flagship of the Bajaj Group of Companies. Bajaj is currently India's largest two- and three-wheeler manufacturer and one of the biggest in the world The two-wheeler industry is one of the fastest growing industries in the country with key players like Hero Honda, TVS, HONDA (HMSI), and Bajaj Auto Ltd etc. As mentioned before Bajaj Auto limited which is one of the leading manufacturer and seller of two wheeler in the Indian market and the fourth largest in the world is

facing stiff competition from companies like Hero Honda which is well established and trusted brand in the company and also from companies like TVS who recently are coming up with strong products to attack the established market of Hero Honda and Bajaj. There have been a number of drivers which have created a competitive two-wheeler market. They are: Inadequate public transportation system, especially in the semi-urban and rural areas. Increased availability of cheap consumer financing. Increasing availability of fuel-efficient and low-maintenance models. Changes in the demographic profile. Increasing number of models with different features to satisfy diverse consumer needs.

RESOURCES:The resources of the company are the top management team, continuous innovation i.e. extensive Research and Development,


manpower, use

use of



technology, raw

company strong




distribution channels, value based manufacturing etc. As because Bajaj encompasses on providing value of product and service to customers they ensure that the resources that they use are standardized and the end product is of value to a customer.


Highly experienced management.

Product design and development capabilities(Redesign) Extensive Research & Development focus. Widespread distribution network. High performance products across all categories. High export to domestic sales ratio. Great financial support network (For financing the


Example-Bajaj Finance.

High economies of scale.

WEAKNESS Hasn't employed the excess cash for long. Still has no established brand to match Hero Honda's
Splendor in commuter segment. Product development is subsequently not very strong in this segment.

Not a global player in spite of huge volumes. Sometimes the rate of Redesign is faster than the
consumers acceptance.

Bajaj Auto Limited is currently outperforming the Indian twowheeler industry. It is currently holding 32.7% market share in the year 2007-08. Bajaj is the market leader in terms of sale in the 150cc+ segment, Bajaj Auto is present here with the Pulsar range (150 cc, 180 cc, 200 cc and the new 220 cc) and the Avenger DTS-i. The company holds more than 45% share

in this segment and has been a market leader for the past few years. Due to the recent changes in the economy, while the whole industry witnessed a fall Bajaj Auto felt it too. Still Bajaj Auto has been able to maintain its position in the top in respect of 150cc+ segment and second best to its rival Hero Honda in the 100cc+ and 125cc+ segment, but it is catching up fast. Without doubt, the market is moving towards the 125 cc and above segment, with an increasing mass migrating to the 125 cc variants. In fact, Bajaj Auto has catalyzed this trend, and it forms the core of the Companys integrated marketing, product development and R&D strategy. Chart B shows the trendwhere the 125 cc market has grown from 2% of total motorcycle sales in2003-04 to 23% in 2007-08, and the 150 cc plus market has grown from 10% to 13% over the same period of time the 100 cc entry segment, from 88% of the market in 2003-04 to 64% in 2007-08.It has also been the largest exporter in the past two years.

Bajaj Auto has segmented its two-wheelers into three segments 100cc+, 125cc+ and 150cc+. 100cc+ Segment BAJAJ PLATINA In the 100cc+ segment the company offers Platina which is a leader in mileage. The Bajaj Platina is resplendent in Platinum silver color and shiny chrome graphics enhanced by a contrasting matt black silencer and graphite-tinted engine. The company has targeted its customers who are looking at low cost bike with fuel efficiency. Its a low end customers product especially in rural areas where transportation is a problem. 125cc+ Bajaj XCD The Bajaj XCD DTS-Si 125 cc is easy to control, easy on the pocket, and a good choice for a 125 cc motorbike. The alloy wheel rims add flamboyance to the strong diamond frame body. The folding number plate is a cool idea and the electric start without a kick. The company here is looking for customers who are looking

for a bike with mileage, low price and looks and they are ready to pay an extra price what they can pay for a 100cc bike. Recently Bajaj has modified this product to 135cc after the product has already succeeded in the semi urban and urban market. Bajaj Discover 135ccDTS-i Bajaj Discover 135 cc lies in between the 125 cc and 150 cc segments. This is a bike for the medium segment of people who dont want to compromise on cost as well as quality. Bajaj Discover has been in the market for a very long period of time with minor changes it the product to attract customers.

150cc+ Bajaj Pulsar Series The Bajaj Pulsar DTS-I is a higher class segment product made for consumers who are looking for performance, service and value for money. Price is not the factor here. Customers are ready to pay the price for the value they are looking for.

The Bajaj Pulsar Series consists of the Bajaj Pulsar DTS-i 150cc, 180cc, 200cc and the Pulsar DTS-fi 220cc. Each product is targeted at different customers based on their desire. The higher the consumer requirements higher is the product value and too the price. For example Pulsar 220 is the highest model available with all modern specifications but it also priced highly, still there is a desire for the product as the customer are more value based. The company is currently the market leader in this segment i.e 150cc+ segment Bajaj Avenger Bajaj Avenger (DTSi) offers the ultimate cruiser experience. Offering high stability and long cruising delights, Bajaj Avenger (DTSi) possesses wider saddle seat, special backrest besides 180cc and 200cc powerful engine. It is targeted at the upper middle-class bike lovers. Apart from these Bajaj also have Scooters like Krystal which are meant for college going girls with good speed and economy. A product life cycle of the various products is shown below.


Products like XCD 125 & 135 Pulsar 200cc and

220cc.These product are introduce newly to the market and have a potential for cash generation.

Products like Pulsar 150cc and 180cc have high

demand in the market and provide good revenue to the company.


Products like Bajaj Discover are at their maturity

stage and are giving low returns to the company. DECLINE STAGE: Avenger Platina market get new substitute

product and new technologies thus the demand has gone down in this stage and substantially there is very less market share for them.


The company has a network of 485 dealers and over 1,600 authorized service centers and 171 exclusive three-wheeler dealers spread across the country. Around 3,750 rural outlets have been created in towns with population of 25,000 and below. The company has plants located at Pune (with two plants operating there), Waluj(Near Aurangabad) and Pantnagar in Uttaranchal. Bajaj Auto is also adopting FMCG distribution strategies and has setup separate channels for every segment of its business and consumers and has also identified a pro-biking








throughout the country for high end products. The distribution network is carried through authorized dealers. So therefore it can be seen that Bajaj follows a Three tier distribution system which is shown below.



CUSTOMER Bajaj Auto also has strong export presence and distribution network over 50 countries. S

Promotion is one the most strategies that is used to position a companys product in the mind of consumers. The various modes through which promotion is done are Television media,

Newspapers, Magazines, Celebrity endorsements etc. Bajaj has a unique way of promoting its product. The company doesnt use any celebrity endorsement unlike Hero Honda or TVS but use innovative ads through television media which is the fastest reachable media today. For example the Bajaj Pulsar series ads which are shown through various stunts, performed simply attract any consumer. Apart from this Bajaj has also identified and started a segment of Pro-Bikers to promote their 150cc+ segment. Bajaj patented DTS-i technology has also been used as a promotion tool to attract customers and positioned themselves in the minds of consumers as superior technology than its competitors. Bajaj Auto also heavily promotes themselves in Auto Shows and Auto Magazines. The company also uses strategies like the pull strategy by offering a scheme of taking home a scooter at Rs 999. The slogan Hamara Bajaj is being widely used by the company to promote their products substantially making owners proud of their possession of a Bajaj.

Pricing is the one element of the marketing mix that generates revenue, the rest are cost. So therefore pricing has to be done carefully. As it can be seen from prices of Bajaj Auto products that they use a dual pricing strategy i.e. low price for low end products in order to penetrate the market, i.e. Market Penetration. For example Bajaj XCD which is priced relatively low at Rs 41000 in order to penetrate into the market because of similar existing products like Hero Honda Splendor whereas a higher price for high end bikes i.e. PRICE Skimming is done. for example Pulsar DTS-I 220 is priced relatively high, close to Rs 90,000 for high end customers who are looking at performance not price and are technology conscious. Also that heavy R&D is also incurred in the higher segment than in the lower segment.

Marketing is the front-line business function and this assignment reflects on the marketing strategy of the Bajaj Auto, which is

India's the biggest two and three wheeler industry. Successful market depends largely upon company's ability to manage its marketing programmers within its environment. To cover market Bajaj Auto marketing division makes different marketing policies and accordingly market research is done. According to need, want and demand of the customers marketing policies of the company is implemented It also reflects how Bajaj Auto handles main competitors. Bajaj Auto has been constantly in the process of innovation and product development to create more demand and desire for their products among customers. The company has successfully adopted itself to the changing technology and has been constantly giving consumers higher quality products without sacrificing economy especially in the 150cc+ segment in which the company has dominated and has been a major player in this segment at all price points in the market, although it is a suggestion to the company to develop its product in the 100cc segment in order to be competitive in this segment. The pricing policy of the company has also been done carefully targeting

each consumer segment and proportionately positioned itself among the consumers.


Strategic marketing for business growth by Subhash Ch. Jian