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Submitted to
T.GHOSAL
kumar
CUJ/I/2012/MBA/O3
VI SEMESTER
Submitted by :Abhishek
Acknowledgement
Project Objective
Introduction
Indian automobile industry
The automobile industry in India is the ninth largest in the world with an annual production
of over 2.3 million units in 2008. In 2009, India emerged as Asia's fourth largest exporter of
automobiles, behind Japan, South Korea and Thailand.
Indias 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. Since the last four to five years, the two wheelers segment has driven the
overall volume growth on account of the spurt in the sales of motorcycles. However, lately
the passenger cars and commercial vehicles segment has also seen a good growth due to high
discounts, lower financing rates and a pickup in industrial activity respectively.
Major automobile manufacturers in India include Maruti Udyog Ltd., General Motors India,
Ford India Ltd., Eicher Motors, Bajaj Auto, Daewoo Motors India, Hero Honda Motors,
Hindustan Motors, Hyundai Motor India Ltd., Royal Enfield Motors, TVS Motors and Swaraj
Mazda Ltd.
With the economy growing at 9% per annum and increasing purchasing power there has been
a continuous increase in demand for automobiles. This, along with being the second largest
populated country, makes the automobile industry in India a very promising one.
The story of Mr. Ratan Tata inspired by a family of four members travelling in Indian roads,
not concerned about safety and the evolution of the idea of TATA Nano has been quite
famous globally.
The Indian two wheeler industry can be divided into motorcycles, scooters and mopeds. The
consumer has changed his preference from mopeds to scooters and then to motorcycles. The
trends seen in the past few years include females increasingly using two-wheelers for their
personal commutation and various two wheeler manufacturers designing vehicles specially to
cater to needs of this segment. One of the earliest revolutions in this industry was Kinetics
introduction of the concept of electronic/self-start and automatic gears which made two
wheelers comfortable and useable by women, when compared to old Bajaj Chetak
advertisements which showed middle aged females riding a Bajaj Chetak scooter. A recent
trend in the industry has been electric vehicles, which mostly leverage on their ecofriendliness and low operating costs, but is still not accepted well due to the lack of reputation
of the manufacturers and lack of trust on technology, which is still being perceived in the
nascent stages, especially battery and inverters which prove to be very expensive
components. TVS recently leveraged this opportunity by launching a hybrid model of their
non geared scooter TVS Scooty. The end of the last decade saw Bajaj taking a radical
decision to do away with the Scooter range and completely concentrate on motorcycles,
especially stating change in customers preference as the main reason. The customers are left
without a choice in most cases than to migrate from the traditional scooters of the Indian
family to the all youthful bikes that ones son rides to college.
With rising incomes and purchasing capacity of the average Indian, the demand for two
wheelers in the power segment has increased considerably. There also have been constant
signs of maturing of the market when the manufacturers reacted by coming up with
innovations, catching attention of potential buyers and sometimes creating a new class of
customers or altering the preferences and attitudes of existing consumers
In 1990, Royal Enfield ventured into collaboration with the Eicher Group, a leading
automotive group in India, in 1990, and merged with it in 1994. Apart from bikes, Eicher
Group is involved in the production and sales of Tractors, Commercial Vehicles, and
Automotive Gears.
Royal Enfield made continuously incorporating new technology and systems in its bikes. In
1996, when the Government of India imposed stringent norms for emission, Royal Enfield
was the first motorcycle manufacturer to comply. It was among the few companies in India to
obtain the WVTA (Whole Vehicle Type Approval) for meeting the European Community
norms. Today, Royal Enfield is considered the oldest motorcycle model in the world still in
production and Bullet is the longest production run model.
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Definition of Constructs
In the initial brain storming sessions, various parameters were considered important to a
riders choice of Bullet as a vehicle and the various prime movers behind these parameters
were discussed. These parameters were broadly classified as
a) Internal parameters (Ones that stems from the users notions and internal values)
b) External parameters (Ones that depend on Marketing Communication and others
perception of the user)
While most riders seemed to be influenced by both, the Ego-Defensive riders display a
greater tendency to be influenced by the external parameters. They look for the macho image
of the Bullet to rub off on them. The Value-Expressive users look for the sense of freedom in
the bike and the long rides that come with it.
Internal Parameters Customers Internal Locus of Control
Considering that Power Bikes are expensive, various features need to be compared, and they
are expected to be used for a considerable period of time, purchase of bikes come under
complex consumer behavior decisions. The consumer behavior under such cases can be
defined in 4 steps namely:
1. Need Arousal / Problem Recognition In this stage, the customer recognizes the need for
a bike based on his current situation. Study of this phase helps us identify the various needs
of customers, which needs they prioritize, ability to satisfy needs, how they satisfy their
needs etc.
2. Search for Information Once the customer identifies his need for a product, he searches
for information related to the product before purchase. A study about this phase can evolve
insights into which medium to use to reach the customer, what communication mediums to
use, influencers, etc.
3. Brand evaluation & Purchase As a result of information search, the customers evaluate
brands available based on their past and current information with their desired benefits. It is
very important to be in the consideration list in this stage for a brand to be consumed. A
company needs to identify if it is in the consumers consideration list and if not what are the
reasons for this.
4. Post Purchase Evaluation This may be associated to satisfaction while
consumption/usage through parameters like performance, after sales support etc. Another
important aspect at this stage is post purchase dissonance etc. This stage is very important to
develop loyalty among customers and for popularity of the brand in terms of performance
reviews.
Some customers exhibit choices based on how they wish to be perceived, a feeling that often
stems from an internal insecurity that needs an external cover-up. These users are heavily
influenced by Marketing communication showing the bike catering to their Ego needs and
also by the general peer evaluation of the image the bike projects.
These users migrate more towards the look and the image of a vehicle rather than its
performance or its fit with their actual riding requirements.
Most of such users find a bike like Bullet unfit for them as they feel the bike is either too
costly or they are not strong enough to handle a Bullet.
Market analysis
Market potential
Royal Enfield's MARKETING initiative to woo potential customers through its `Log
Out" campaign targeted at corporates is paying dividends. The Chennai-based
manufacturer of Bullet motorcycles and an Eicher Motors unit aims to pitch the riding
experience as a team-building exercise over weekends. And the company reports that
having ridden an Enfield, many a corporate rider has sold off his existing two-wheeler
and
upgraded
to
an
Enfield
bike.
According to Koshy, the company has been recording consistent growth for the past
three years. "We have been growing 15 to 18 percent every year. Last year when the
industry was down 12 percent, we were up 18 percent
Customer analysis
By and large it was found that most of the customers are choosing Royal Enfield
vehicles because of its Vehicle Appearance, pickup, good models and engine
appearance etc.
Its give a pride to the customers by owning it.
Its boldness and a felling of riding on a bullet.
Competition
Harley davidson
Triumph
Hyosung DSK
KTM
Marketing Mix
Product
CAF RACER
CONTINENTAL GT
CRUISER
THUNDERBIRD 500
THUNDERBIRD 350
RETRO STREET
CLASSIC DESERT STORM
CLASSIC BATTLE GREEN
CLASSIC CHROME
STANDARD STREET
BULLET 500
BULLET ELECTRA
BULLET 350
Price
Its price range between 1.3 lakh- 1.85 lakh.
Place
180 dealers
11 Brand stores
100 Authorized service centre
Export to 42 countries 40 importers and 300+ dealers.
Promotion
The TRIP Campaign.
The Leave Home Campaign.
Promotions are done through Riders Community and Movies.
The Company keeps on Organizing a lot of riding events, People have there own
community symbols and flag also.
Segmentation
Geographic: Mainly the urban youth
Demographic: Age group of 22-50 years
Age group of 22-50 years.
Gender male
Upper and middle income group who want a bike that is stylish and powerful.
Psychographic: SEC A1 & A2
Classic, royal and legendry lifestyle
Positioning
Position itself in the mind of consumers creating an image which is full of royalty and
legendary image.
Swot analysis
Strength
Size and scale of parent company
Used on a large scale for military purposes because of its STURDINESS.
Weakness
Weight of the motor cycle can be an issue for few customers.
Mileage of high cc bikes is an issue.
Opportunities
Two-wheeler segment is one of the most growing industries
More brand visibility
Threats
Strong competition from Indian as well as International brand.
Dependence on government policies and rising fuel prices.
Strategic branding
Celebrities now a days promoting Royal enfields bike
Jab tak hai jaan, harry potter, zindagi na milegi dubara, Ek villain.
Handcrafted in chennai.
The company doesnt use the TV Commercials and the regular channels for brand
building.
Customer analysis
By and large it was found that most of the customers are choosing Royal Enfield
vehicles because of its Vehicle Appearance, pickup, good models and engine
appearance etc.
Royal Enfield sold just over 300,000 units in 2014 to Harley-Davidsons 267,999. To
be sure, the American motorcycles are more expensive (the cheapest is twice the price
of a top-end Royal Enfield) and popular brands of other motorcycles sell in staggering
numbers in populous India. But then again, as recently as in 2013, Harley-Davidson
dominated sales selling 100,000 more motorcycles than Royal Enfield.
reliability.