Rajiv’s decision to focus on twin – brand strategy

1. Refer to the case study “Bajaj Auto Ltd.’s Brand Centric Strategy”. Do you feel justified
with Rajiv’s decision to focus on twin – brand strategy? Provide your argument supported
by necessary external and internal analysis.
Bajaj Auto Ltd: Two brand strategic analysis Page 1

2. I. INTRODUCTION OF THE COMPANY
A. The Indian Two-Wheeler Industry
The 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-wheeler
industry was highly regulated by the Government of India (GOI) and was largely structured by
Indian industrial policies. The License Raj system imposed a strict control on the industry by
regulating the entry of new players, imports, and foreign investments.
B. History of Bajaj Auto
Founded in 1956, at the height of India’s movement for independence from the British, the
group has an illustrious history. Theintegrity, dedication, resourcefulness and determination to
succeedwhich are characteristics o the group today are often tracked back to its birth during
those days of relentless devotion to a common cause. Jamnalal Bajaj, founder of the group, was
close 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 leave
Jamnalal 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 to
Ghandhiji and it was only after independence in 1947, that he was able to give his full attention
to the business. Kamalnayan Bajaj not only consolidated the group, built also diversified into
various manufacturing activities. The present chairman of the group, Rahul Bajaj, took charge of
the business in 1965. Under his leadership, the turnover of the Bajaj Auto the flagship company
has gone up from Rs. 72 million to Rs. 46.16 billion, its product portfolio has expanded from one
to and the brand has found a global market. He is one of the India’s most distinguish business
leaders 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 wheeler
manufacturer in the world, Bajaj Auto Ltd., adopted in 2009. The scooters produced under the
Bajaj Auto Ltd: Two brand strategic analysis Page 2

3. Chetak brand name dominated the Indian two wheelers market from early 1970s to the early
1990s and helped Bajaj Auto became a leader in the industry. As the Indian Two wheeler
Industry was deregulated and faced the competition in the 1990s, Bajaj Auto began to face a
threat from foreign players. In addition, in late 1990s, due to the shift in consumer preferences
and demand from scooters to motorcycles, Bajaj Auto’s sales and market shares started declining
and posed a challenge of sustenance for the company.
As a result, by the early 2000s, motorcycle sales surpassed that of scooters and Bajaj Auto lost
its market share to Hero Honda. In an attempt to recapture market share, Bajaj Auto restructured
its business and launched new motorcycle models. However, Bajaj Auto lost its dominance in the
scooter market. Realizing the changing dynamics of the Indian two-wheeler industry and the
deficiencies at Bajaj Auto, Rajiv Bajaj began to develop a new strategy for the company. He
shifted the focus from scooters to motorcycles and emphasized enhancing the quality of
products. With the twin- brand strategy, he focused in only two brands Discover and pulsar
pulling back the Bajaj name, as it is associated with various other products. And with the change
in 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-based
Piaggio. Once the agreement with Piaggio2 expired, the company made and sold vehicles under
the Bajaj name. Since the mid-1960s, under the reins of Rahul Bajaj, the thirdgeneration head of
the company, Bajaj Auto began to grow and create the image of a reliable scooter brand in India.
C. Managerial Style at Bajaj Auto
Off late Bajaj Auto Ltd has emphasized a lot on organizational restructuring for the auto
business. With this restructuring the exiting business roles and responsibilities at the company
has strengthened and enhanced to ensure greater operational empowerment and effective
management. The five pillars of this new structure (strategic units) are R&D, Engineering, Two
Wheeler Business Unit, Commercial Vehicles Business Unit and International Business Unit.
These pillars are being supported by functions of finance, MIS, HR, Business development and
Commercial.
Bajaj Auto Ltd: Two brand strategic analysis Page 3

4. D. Brand Centric strategy
From the case we can observe that there is a shift in Bajaj Auto product life cycle that enjoyed
tremendous growth in certain stage but due to lack of product differentiation, innovation and
only focusing in cost leadership strategy the Bajaj’s faced an intense competition in the industry
and nearly lost the business. So, to gain the lost position, growth and revival of their position in
the two-wheeler market they needed some strategic move to capture that lost position or to set a
new position in the mind set of the customer. And among the different alternative growth
strategies, Rajiv chose product development strategy that was focused on the twin brand by
developing a new product for the existing market with new features that is highly valued by the
customers and proved to be the smartest move that doubled their market share in the existing two
wheeler market segments. And to identify the growth strategies and the focus of Rajiv’s twin
brand decision we should carefully analyze the external and internal environment.
II. EXTERNAL ANALYSIS
To analyze the performance of Bajaj Auto, there is the need to analyze every factor related to the
industry and market. And one of the important factors is the external factor that directly affects
any strategic decision of the company. The external analysis deliberately commences with the
customer and competitor that help define the relevant industry.
A. Customer Analysis
Customer 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** Ibef.org, April 2010, Market Overview – Automotives
Bajaj Auto Ltd: Two brand strategic analysis Page 4

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 Motivation
Growth is due to rural market demand.
Segment Motivation Reason
Motorcycle 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 transportation
Mopeds Less fuel consumption, manual
paddling, gearless
Electric Two-wheeler Eco-awareness Shortage of conventional fossil fuels
Bajaj Auto Ltd: Two brand strategic analysis Page 5

6. A1 Scooter <75cc Lower Price, light weight, low-fuel consumption, low maintenance
cost
A2 75-125cc Lower Price, low-weight, low-fuel consumption, low maintenance
cost, higher mileage
A3 125-250cc Powerful engine, self start, gearless,
B2 Motorcycle 75- Variations in model, enhanced technology, fuel efficiency, light
125cc weight
B3 125-250cc Variations in models, enhanced technology,quality, looks, sporty
designs and appearance, speed, better performance
B4 >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 Tyres
Bajaj Auto Ltd: Two brand strategic analysis Page 6

7. D. Competitors
Competitors 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 0.7
Strategic 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: Bikeadvice.com, 6 months data. Details are given below in Annex 1
Bajaj Auto Ltd: Two brand strategic analysis Page 7

8. E. Strategic Group Analysis
Bajaj Auto Ltd: Two brand strategic analysis Page 8

9. F. Major Competitors
Bajaj Auto Ltd: Two brand strategic analysis Page 9

10. G. Competitor Strength Grid
Two 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. MarketAnalysis
Market 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 11,429,572
Source: SumanTiwari , PESTLE Analysis of automobile sector of India, Lovely Institute of
Management
Bajaj Auto Ltd: Two brand strategic analysis Page 10

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 centers
I. Environment Analysis
Source Description Importance
Technological - Global collaboration High
Regularity - Liberation, open High
economy,
globalization
Economic - Growth High
- High disposable
Income
Cultural - High
Demographic - Proportion of High
increasing youth
population
Threat - New entrants High
Opportunity - Double-digit growth, High
growing market of
higher CC (>180)
bike.
Bajaj Auto Ltd: Two brand strategic analysis Page 11

12. J. Porter’s 5 forces model
Bajaj Auto Ltd: Two brand strategic analysis Page 12

13. Porter’s Five Forces Analysis:
Supplier Bargaining Power:
Suppliers of auto components are fragmented and are extremely critical for this industry since
most of the component work is outsourced. Proper supply chain management is a costly yet a
critical need.
Buyer's Bargaining Power:
Buyers in automobile market have more choice to choose from and the increasing competition is
driving the bargaining power of customers’higher. With more models to choose from in almost
all categories, the market forces have empowered the buyers to a large extent. All these have
been helped by the fact that the customers are well informed about the products as well through
the 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 by
competitors. This instinct of the industry is primarily driven by the technical capabilities
acquired 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 or
come in consideration while selecting a two-wheeler. However, with the recent introduction of
Tata Nano cars that come at a very cheap rate, they are slowly trying to be a substitute and a
threat to the two-wheeler industry. Cycles do never even compete with the low entry-level
moped 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 it
scores 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. 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 Centers
Note: Bajaj Auto has a network of 422 dealers and over 1,300 authorized service centers. The
company plans to increase the number of dealers to 500 by this financial year. A large number of
these new dealerships are planned in semi-urban & rural areas.
L. Market Trends and Development
The Indian two-wheeler industry has come a long way since its humble beginning in 1948 when
Bajaj Auto started importing and selling Vespa Scooters in India. Since then, the customer
preferences have changed in favor of motorcycles and gearless scooterettes that score higher on
technology, fuel economy and visual appeal, at the expense of metal-bodied geared scooters and
mopeds. 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 new
leaders have emerged.
Rising income levels, reducing excise duties, higher loan tenure and loan-to-value offered by the
financing 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 increasing
women working population, changing social philosophy and broad-mindedness, the penetration
Bajaj Auto Ltd: Two brand strategic analysis Page 14

15. of two-wheelers that is currently at awfully low level is expected to increase significantly going
forward.
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 Analysis
Portfolio Analysis
BCG 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 Low
Bajaj Auto Ltd: Two brand strategic analysis Page 15

16. B. Strength of Weakness
SWOT
Let's 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:
 Hasn't employed the excess cash for long.
 Still has no established brand to match Hero Honda's 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.  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 Kawasaki's 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. D. The Marketing Mix
The four P's
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 Organization
MISSION
Focus on value based manufacturing
Fostering team work & enhancing the capability of the team Continual
Improvement
Total elimination of wastes
Pollution free & safe environment
Bajaj Auto Ltd: Two brand strategic analysis Page 18

19. VISION
To attain World Class Excellency by demonstrating Value added products to customers
Source: Bajaj Auto Ltd. Website
CULTURES AND VALUES
BRAND 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. 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
-
CUSTOMER
Focus value
1. Innovation
2. Speed
3. Perfection
Source: http://www.slideshare.net/jsunil07/project-on-bajaj-auto-ltd-5530179
THE INVETIBALE CHANGE
Bajaj 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. 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 also
offer some basic platforms to be manufactured and marketed in India. Kawasaki of Japan is a
world-renowned manufacturer of high performance bikes. Bajaj entered into a strategic tie-up
with Kawasaki in late 1990s to enhance its product line and knowledge up-gradation to support
long-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 and
innovation 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 premium
segment 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 largest
manufacturer grew at just 6%. This stands a testimony to the various important strategic
decisions over the past decade.
Bajaj Auto Ltd: Two brand strategic analysis Page 21

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-
wheelers
market overview … (1/2) Source: Industry sources
ers have grown Domestic sales of10
two-wheelers in 2008–09
al 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 0.43
stitutes more than 80 2006-07 7.11 0.94 0.37
market.
2005-06 6.20 1.02 0.37
nes 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. market overview … (2/2)
Two-wheelers – segment-wise share of production
ustry is the (2008–09)
orld after
mited, the Scooters
13.9%
s the world’s Mopeds
mpany. 5.2%
Motorcycles
80.6%
ral Electric two-
aunches and 0.3%
wheelers
exports … (2/2) Source: SIAM
e the developing Two-wheelers — company-wise share of exports
d Latin America. (2008–09)
Bajaj Auto 63%
der in exports with a share
TVS Motor Company and
d. TVS Motor Company19%
Hero Honda Motors
8%
12
Growing Honda Motorcycle &
Scooter India 5%
disposable
income
Others 4%
ration specially in
and rural areas
Bajaj Auto Ltd: Two brand strategic analysis Page 23
14

24. F. Current Situation & Current Performance
BAL 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 been
improving 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 - an
increase of 28%, which is very healthy.
BAL has significant presence in all the three basic segments - Price Segment, Value Segment
and 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 there
overall 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 Industry
The demand shift from scooters to motorcycles in the 1990s was without parallel in any
comparable product category in India. This was mainly attributed to the change in customers'
preference towards fuel-efficient and aesthetically appealing models, which scooter
manufacturers failed to provide. The delayed launch of new, advanced scooter models, fear of
four-stroke scooters being prone to increased skidding risks and vibrations, and the difficulty of
maintenance also contributed to this shift.
Bajaj Auto Ltd: Two brand strategic analysis Page 24

25. Interestingly, the growth in the motorcycle segment was mainly driven by the demand from rural
and semi-urban consumers. An estimated 60% of the demand for motorcycles came from rural
and semi-urban customers.
The rise in their disposable incomes on account of good monsoons in the 1990s provided the
normally conservative rural and semi-urban customers with extra money that induced them to
experiment 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 1
Advanced technology, larger wheelbase, higher ground clearance and the ability to ride on bad
roads with less effort and less danger of skidding and decreased maintenance cost were the other
factors that encouraged customers to choose motorbikes over other two-wheelers.
Bajaj Auto Ltd: Two brand strategic analysis Page 25

26. IV. BAL STRATEGY ANALYSIS AND CONCLUSION
A. Analyzing Two Brand Strategy of Bajaj Auto Ltd
Rajiv Bajaj after taking over the management of Bajaj Auto Ltd. adopted the new branding
strategy and with this strategy Bajaj Auto has been doing quite well compared to how they were
performing in the market. While analyzing the two-brand strategy it is found that the major focus
of this strategy is to redefine the positioning of the Bajaj Auto Products. Theoretically
describing positioning refers to how the brand is perceived in the mind of the customer. In other
words, what does the customer think of the brand. Positioning is all about creating a perception
of the brand in the mind of the customer or providing an experience to the customer that
develops the brand image in customer mind. In other word we can say positioning is what we do
to 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 of
different items starting from bikes to lights to fans to insurance to finance, auto rickshaw. This
was creating confusion in the mind of customers. To change this situation Rajiv Bajaj wanted to
change the positioning of Bajaj Bikes. The Bajaj umbrella was only providing financial
advantage but it was not allowing forming a distinct image of its product in mind of customer
and it is in the mind of the customers where all the marketing battles are lost and won and not in
the retail stores. The essence of branding and positioning is to distinguish the product from other
products. In case of Bajaj, its own wide range of products was creating confusion in the
customer’s mind. Moreover, Bajaj was synonymous to Chetak Scooter and the auto rickshaws
and from the various data also we have seen that due to shift in the customer preference, the sale
of scooter was declining and the sale of motor bike was increasing. The Bajaj Umbrella was
giving too many meaning and because of this the customer’s point of view was confusing. This
was not helping the cause of Bajaj Auto. The competition was increasing and the sales of Bajaj
were declining.
Bajaj Auto Ltd: Two brand strategic analysis Page 26

27. Rahul Bajaj with the aim of improving the situation adopted two brand strategies. Under this
strategy Pulsar and Discover was put onto major focus of the positioning venture. Rahul decided
to 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 'Bajaj
Auto' to market either. This effort was started being noticed and recognizedslowly. Highly
differentiated target groups (TG) for Pulsar and Discover is the prime reason behind the effort to
divorce these sub-brands from the parent brand, Bajaj Auto. Efforts were aimed at making these
two individual brands stronger than the parent brand and to position them as brands in their own
right.
Bajaj had designed Pulsar and Discover for two extreme ends of the consumer spectrum. The
target group for Discover was 'the commuter' as it stands for balance, responsibility and all
things homely. Conversely, Pulsar, 'the performer', symbolized arrogance, irreverence and
attitude and hence categorized in the sports category. The styling, imagery and tonality of the
brand 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. Rebranding of Hamara Bajaj
Bajaj Company made sure that the mind space and level of engagement are very conventional for
Discover as opposed to those of Pulsar. Even the media that they choose differ markedly for the
two - Discover uses conventional advertising and Pulsar uses newer techniques such as
Advertiser Funded Programming (AFP) and digital advertising. With this approach the company
was successful to categorize and position the two vehicles as separate brands. This helped Bajaj
Auto in its growth of sales. They have been doing extremely well compared to its competitor in
international market. In domestic market also they have been able to close the gap with the
market 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 successfully
created a separateposition for its motorbikes. Today the reason why consumers buy a Pulsar is
because it is a Pulsar, not because it belongs to Bajaj.
Bajaj Auto Ltd: Two brand strategic analysis Page 28

29. V. Annex
Annex 1: Monthly Bike sales volum
Total %
Manufacturer June July August September October November December
sales Share
Hero Honda 365,734 366,808 415,137 401,290 354,156 381,378 375,838 2,660,341 45
Bajaj 165,697 192,835 182,441 249,795 249,681 242,390 219,920 1,502,759 25
TVS 115,448 120,994 126,842 142,553 131,000 120,844 119,701 877,382 15
HMSI 103,000 112,855 96,149 624,008 11
Yamaha 17,878 17,316 19,508 26,394 26,879 17,055 13,612 138,642 2
Suzuki 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