Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
transport had begun. Since then he continually sought to devise an automated, labor saving
machine to replace the horse. Innumerable attempts reached conclusion in the early 1760s
with the building of the first steam driven tractor by a French Captain, Nicolas Jacob
Cugnot. It was however left to Karl Benz and Gottlieb Damlier to produce the first vehicles
powered by the internal combustion engine in 1885. It was then that the petrol engine was
introduced, which made the car a practical and safe proposition. Then onwards, it has been
one big journey...on the roads
The automobile as we know it was not invented in a single day by a single inventor. The
history of the automobile reflects an evolution that took place worldwide. It is estimated
that over 100,000 patents created the modern automobile. However, we can point to the
many firsts that occurred along the way. Starting with the first theoretical plans for a motor
vehicle that had been drawn up by both Leonardo da Vinci and Isaac Newton.
In 1769, the very first self-propelled road vehicle was a military tractor invented by French
engineer and mechanic, Nicolas Joseph Cugnot (1725 - 1804). Cugnot used a steam engine
to power his vehicle, built under his instructions at the Paris Arsenal by mechanic Brezin. It
was used by the French Army to haul artillery at a whopping speed of 2 1/2 mph on only
three wheels. The vehicle had to stop every ten to fifteen minutes to build up steam power.
The steam engine and boiler were separate from the rest of the vehicle and placed in the
front (see engraving above). The following year (1770), Cugnot built a steam-powered
tricycle that carried four passengers.
In 1771, Cugnot drove one of his road vehicles into a stone wall, making Cugnot the first
person to get into a motor vehicle accident. This was the beginning of bad luck for the
inventor. After one of Cugnot's patrons died and the other was exiled, the money for
Cugnot's road vehicle experiments ended.
Steam engines powered cars by burning fuel that heated water in a boiler, creating steam
that expanded and pushed pistons that turned the crankshaft, which then turned the wheels.
During the early history of self-propelled vehicles - both road and railroad vehicles were
being developed with steam engines. (Cugnot also designed two steam locomotives with
engines that never worked well.) Steam engines added so much weight to a vehicle that
they proved a poor design for road vehicles; however, steam engines were very
successfully used in locomotives. Historians, who accept that early steam-powered road
vehicles were automobiles, feel that Nicolas Cugnot was the inventor of the first
automobile.
The automotive industry has certain trends it has to follow, just like fashion designers and
musical composers. In times of recession and decreasing sales there is less room to take
chances and manufacturers are prone to follow the common pattern as a safer bet rather
than releasing a controversial product or idea that might or might not be successful.
However throughout the automotive industry's history, great innovators have "boldly gone
where no man has gone before" to set new trends which have dynamically altered the
industry as a whole.
1970's
ℑ Major factors affecting the industry's structure were the implementation of
MRTP Act, FERA and Oil Shocks of 1973 and 1979.
ℑ During this decade there was not much change in the four wheeler industry
except the entry of Sipani Automobiles in the small car market.
ℑ Oil Shock of 1973 quickened the process of dieselization of the Commercial
Vehicle segment.
ℑ Three other companies, namely, Kirloskar Ghatge Patil Auto Ltd, Indian
Automotive Ltd and Sen & Pandit Engg products Ltd entered the market during
1971-75. They ultimately withdrew in early eighties.
ℑ During the seventies the economy was in bad shape. This and many specific
problems affected the Automobile Industry adversely.
Despite the adverse trend in the growth of the industry, it is resolutely trying to meet the
challenges. Various issues of critical importance to the industry are being dealt with
forcefully.
India is the second largest manufacturer of two-wheelers in the world. It stands next only to
Japan and China in terms of the number of two-wheelers produced and sold respectively.
India is one of the very few countries manufacturing three wheelers in the world. It is the
world's largest manufacturer and seller of three-wheelers. India’s 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.
The automobile industry is fairly concentrated, as in most of the segments two to three
players have cornered a major chunk of the total sales. For instance, in the two wheelers
segment, the sales volumes of Hero Honda, Bajaj Auto and TVS Motors constitute around
80 percent of the total sales. The auto components industry on the other hand is highly
fragmented, though there are dominant players in some of the critical segments.
Given the high growth expectations and a liberal government policy, the investment
potential in the India auto sector is huge. CRIS INFAC is forecasting around 10% in two
wheelers. In the next 2-3 years, the two-wheeler industry is expected to attract investment
amounting to Rs 10 billion. The expected rise in income levels, wide choice of models and
easy availability of finance at low interest rates will drive growth in, two wheelers growth,
which is likely to marginally slow down, but still grow at an average annual growth rate of
around 16%.
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.
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.
GOVERNMENT REGULATIONS AND SUPPORT
The Government of India (GoI) has identified the automotive sector as a key focus area for
improving India’s global competitiveness and achieving high economic growth.The
Government formulated the Auto Policy for India with a vision to establish a globally
competitive industry in India and to double its contribution to the economy by 2010. It
intends to promote Research & Development in automotive industry by strengthening the
efforts of industry in this direction by providing suitable fiscal and financial incentives.
• Automatic approval for foreign equity investment Upto 100 per cent of manufacture of
automobiles and component is permitted.
• The customs duty on inputs and raw materials has been reduced from 20 per cent to 15
per cent. The peak rate of customs duty on parts and components of battery-operated
vehicles have been reduced from 20 per cent to 10 per cent. These new regulations would
strengthen India’s commitment to globalisation. Apart from this, custom duty has been
reduced from 105 per cent to 100 per cent on second hand cars and motorcycles.
• National Automotive Fuel Policy has been announced, which envisages a phased
programme for introducing Euro emission and fuel regulations by 2010.
• Tractors of engine capacity more than 1800 cc for semi-trailers will now attract excise
duty at the rate of 16 per cent.
• Excise duty is being reduced on tyres, tubes and flaps from 24 per cent to 16 per cent.
Customs duty on lead is 5 per cent.
• A package of fiscal incentives including benefits of double taxation treaty is now
available. These government policies reflect the priority government accords to the
automobile sector. A liberalised overall policy regime, with specific incentives, provides a
very conducive environment for investments and exports in the sector.
In India the Rules and Regulations related to driving license, registration of motor vehicles,
control of traffic, construction & maintenance of motor vehicles etc are governed by the
Motor Vehicles Act 1988 (MVA) and the Central Motor Vehicles rules 1989 (CMVR).
The Ministry of Shipping, Road Transport & Highways (MoSRT&H) acts as a nodal
agency for formulation and implementation of various provisions of the Motor Vehicle Act
and CMVR.
In order to involve all stake holders in regulation formulation, MoSRT&H has constituted
two Committees to deliberate and advise Ministry on issues relating to Safety and Emission
Regulations, namely –
In addition, the other Ministries like Ministry of Environment & Forest (MoEF),
Ministry of Petroleum & Natural Gas (MoPNG) and Ministry of Non-conventional
Energy Sources are also involved in formulation of regulations relating to Emissions,
Noise, Fuels and Alternative Fuel vehicles.
External Environment
Entry Barriers:
The market runs on high economies of scale and on high economies of scope.
High competition from the substitute available in the market as the product is innovative
and it has no existing competitor at moment.
Legal and political constraints for the set up of company and launching of the product.
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 critical need.
Buyers in automobile market have more choice to choose from and the increasing
competition is driving the bargaining power of customers uphill. With more models to
choose from in almost all categories, the market forces have empowered the buyers to a
large extent.
Industry Rivalry:
The industry rivalry is extremely high with any product being matched in a few months by
competitor. This instinct of the industry is primarily driven by the technical capabilities
acquired over years of gestation 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, Cars, which again are a mode of transport, do never directly compete or come in
consideration while selecting a two-wheeler, 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.
Key Earnings Drivers:
Below are the key factors, which strongly affect the auto industry: -
Government policy impact on petrol prices: Petrol prices determine the running cost of
two/three wheelers expressed in Rupees per kilometer. Petrol prices are the highest in India
as GOI subsidizes kerosene and diesel. But with the recent change in GOI policy to reduce
the subsidy, the prices of petrol will remain constant at the current prices. This will have a
positive effect on purchases of two/three wheelers.
Improvement in disposable income: With the increase in salary levels, due to entry of
multinationals following liberalization process and fifth pay commission, the disposable
income has improved exponentially over the years. This will have multiplier effect on
demand for consumer durables including two-wheelers.
Changes in prices of second-hand cars: The second hand car prices of small cars have
come down sharply in the recent past. This will shift the demand from higher-end two-
wheelers to cars and affect the demand for two-wheelers negatively. A further drop in
second-hand car prices will lead to pressure on the two-wheeler majors who plan to release
higher-end scooters and motorcycles.
Implementation of mass transport system: Many states have planned to implement mass
transport systems in state capitals in the future. This will have negative impact on demand
for two-wheelers in the long run. But taking into account the delays involved in
implementation of such large infrastructure projects the demand to be affected only five to
seven years down the line.
Availability of credit for vehicle purchase: The availability and cost of finance affects
the demand for two- and three-wheelers as the trend for increased credit purchases for
consumer durables have increased over the years. Therefore, any change with respect to
any of these two parameters as a result of change in RBI policy has to be closely watched
to assess the demand for two- and three-wheelers.
Company Profile:
NAME: Ingenious Power Ltd.
Founded and headquartered in Delhi India, Ingenious Ltd. Company is setting up an auto
project for manufacturing of an innovative and conceptual product viz Electric Motor Bike.
The project will have great significance in the present day context of increasing pollution
due to auto emission and is expected to create a revolution in the Indian automobile market.
Its products manufacturing will commence in Delhi & Uttar Anchal. Ingenious Ltd. is
entering the Indian market with the aim of establishing its brands as a necessity for the
Indian buyers.
The company will follow a strategic positioning approach for the target market. Ingenious
Ltd. has kept into account the income & behavioral factor of the Indian buyers while
designing the product. It is important for the company to understand the consumer behavior
before it goes into such a market. The Indian consumer for the first time will have a
premium product which is eco-friendly and affordable.
OBJECTIVES
1. Image building.
2. Establishing the brand in the Indian market through various strategies and
marketing mix.
3. Achieving image, profit and growth through marketing strategies and promotion
mix over the period of time.
• Definition of the technical specifications for the vehicles and the necessary
infrastructure and system development.
• Development of an appropriate training scheme oriented towards the efficient use of
clean vehicles.
• Planning and implementation of pilot tests of the clean vehicles and the associated
technologies in the cities using our products.
• Technological and socio-economic assessment, usability and risk analysis of the
proposed scheme.
• Review, monitoring and evaluation of the general legal and organisational issues
associated with clean vehicles.
• Cost Benefit Analysis (CBA) of clean vehicle technologies and cost-efficiency
analysis (CEA) of the proposed policies.
• Formulation of application guidelines and policy recommendations
Raw Materials
The primary raw materials used in the manufacture of the body of motorcycle are metal,
plastic and rubber. The motorcycle frame is composed almost completely of metal, as are
the wheels. The frame may be overlaid with plastic. The tires are composed of rubber. The
seat is made from a synthetic substance, such as polyurethane. The power system consists
of a four-stroke engine, a carburetor to transform incoming fuel into vapor, a choke to
control the air-fuel ratio, transmission, and drum brakes. The transmission system contains
a clutch, consisting of steel ball flyweights and metal plates, a crankshaft, gears, pulleys,
rubber belts or metal chains, and a sprocket. The electrical system contains a battery,
ignition wires and coils, diodes, spark plugs, head-lamps and taillights, turn signals, solar
cells and a horn.
1. Raw materials as well as parts and components arrive at the manufacturing plant by
truck or rail, typically on a daily basis. As part of the just-in-time delivery system
on which many plants are scheduled, the materials and parts are delivered at the
place where they are used or installed.
2. Manufacturing begins in the weld department with computer-controlled fabrication
of the frame from high strength frame materials. Components are formed out of
tubular metal and/or hollow metal shells fashioned from sheet metal. The various
sections are welded together. This process involves manual, automatic, and robotic
equipment.
3. In the plastics department, small plastic resin pellets are melted and injected into
molds under high pressure to form various plastic body trim parts. This process is
known as injection molding.
4. Plastic and metal parts and components are painted in booths in the paint
department using a process known as powder-coating (this is the same process by
which automobiles are painted). A powder-coating apparatus works like a large
spray-painter, dispersing paint through a pressurized system evenly across the metal
frame.
5. Painted parts are sent via overhead conveyors or tow motor (similar to a ski lift tow
rope) to the assembly department where they are installed on the frame of the
motorcycle.
6. The engine and solar cells are mounted in the painted frame, and various other
components are fitted as the motorcycle is sent down the assembly line.
7. Wheels, brakes, wiring cables, foot pegs, exhaust pipes, seats, saddlebags, lights,
radios, and hundreds of other parts are installed on the motorcycle frame. A Honda
Gold Wing motorcycle, for example, needs almost as many parts to complete it as a
Honda Civic automobile.
Solar cells are powered by the sun's energy. The main component of a solar bike is its solar
array, which collect the energy from the sun and converts it into usable electrical energy.
The solar cells collect a portion of the sun’s energy and store it into the batteries of the
solar bike. Before that happens, power trackers converts the energy collected from the solar
array to the proper system voltage, so that the batteries and the motor can use it. After the
energy is stored in the batteries, it is available for use by the motor & motor controller to
drive the bike. The motor controller adjusts the amount of energy that flows to the motor to
correspond to the throttle. The motor uses that energy to drive the wheels.
Quality Control
At the end of the assembly line, quality control inspectors undertake a visual inspection of
the motorcycle's painted finish and fit of parts. The quality control inspectors also feel the
motorcycles with gloved hands to detect any bumps or defects in the finish. Each
motorcycle is tested on a dynamometer. Inspectors accelerate the motorcycle from 0-60
mph. During the acceleration, the "dyno" tests for acceleration and braking, shifting, wheel
alignment, headlight and taillight alignment and function, horn function, and exhaust
emissions. The finished product must meet international standards for performance and
safety. After the dyno test, a final inspection is made of the completed motorcycle. The
motorcycles are boxed in crates and shipped to customers across North America and
around the world.
SOURCES OF FINANCE
Various sources through which the seed money will be raised for the set up of the
manufacturing plant, distribution network and selling of the product efficiently in order to
earn profits are:-
1. Self finance:-
• The promoters will contribute some portion of the expense for the set up of the money
from their own personal funds. The promoters will give the money in equal ratio and
make some reserve and surplus account for the contingency and other purposes.
2. Venture Capital
• Venture Capital is one of the most relevant sources of finance for innovative
companies to fund their investments. Venture capital consists of funds raised on the
capital market by specialised operators.
• Venture Capital funds buy shares or convertible bonds in the company. They do not
invest in order to receive an immediate dividend, but to allow the company to expand
and ultimately increase the value of their investment. Hence, they are interested in
innovative ideas with very rapid growth rates.
• As our product is new and innovative, this will also be an option to raise funds for the
company set up.
3. Bank loans:-
Term loans will be taken from banks and financers as per requirement and availability of
the money at certain interest rate.
o Short term
o Mid term
o Long term
4. Leasing:-
The company will set up its manufacturing plant in Uttaranchal where government has
provided attractive offers and subsidiaries. The land will be taken on lease from the
government against the yearly payment of fixed amount of interest on the lease. Few types
of machinery can also be taken on lease.
5. Hire purchase
The product manufacturing will require few highly technical and costly types of machinery.
Such machineries will be taken on hire and purchase. Especially those machineries which
are not available in India and it have to be imported in the country. A fixed amount of
yearly or monthly installment will be paid for the machine.
BUSINESS STRATEGY
Our business strategy will include the determination of the most beneficial product market
in term of establishing itself in this new product segment. The most important factor for the
success of Ingenious Ltd. brand is the perception of the consumer and to what extent it can
build a positive image in the consumer’s mind. The intensity of the business environment,
the sustainable competitive advantage of a quality product will give it a strong base to build
the market.
It is important for us to adopt a different strategy for the Indian market since it is composed
of quality buyers as well as those who will buy for their family. Thus, we shall introduce
some new strategies so as to establish our self in the Indian market and develop a strong
customer base.
The Model used for preparing the marketing strategy by INGENIOUS LTD. in the
Indian Market
Product Range
Internal Analysis
External Analysis
Competitors Analysis
Environment Analysis
Marketing Strategies
Future Plans
Conclusion
The first growth vector will involves gaining penetration with the existing product-market
– Ingenious Ltd. will attempt to attract customers from competitors through its strategic
positioning and will establish strong brand equity.
The second growth vector will involves product expansion while staying in the current
market. Ingenious Ltd. will then offer a new product. It will be aimed not only for the
existing market but also for the price conscious segment.
The third growth vector will apply the same products to the new markets.
The fourth growth vector will be to diversify into new product markets. We shall
concentrate on the second growth vector and study the strategy with respect to the two
wheeler market.
The Indian market with its vast size and demand base offers great opportunities to
marketers. Two-thirds of countries consumers live in rural areas and almost half of the
national income is generated here. It is only natural that rural markets form an important
part of the total market of India though the urban market is increasing drastically. Our
nation is classified in around 450 districts, and approximately 630000 villages, which can
be sorted in different parameters such as literacy levels, accessibility, income levels,
penetration, distances from nearest towns, etc.
The rural bazaar is booming beyond everyone's expectation. This has been primarily
attributed to a spurt in the purchasing capacity of farmers now enjoying an increasing
marketable surplus of farm produce. In addition, an estimated induction of Rs 140 billion in
the rural sector through the government's rural development schemes in the Seventh Plan
and about Rs 300 billion in the Eighth Plan is also believed to have significantly
contributed to the rapid growth in demand. The high incomes combined with low cost of
living in the villages have meant more money to spend. And with the market providing
those options, trends and tastes are also changing.
Thus, Ingenious Ltd. has decided to enter this market with the basic idea of tapping the
Indian middle class which had established itself as a huge untapped market in the
perceptions of a lot of national & multinational players who were then trying forays into
the Indian market.
Keeping all this in mind Ingenious Ltd. will launch its ELECTRO range of two wheelers
addressing the Indian palate with the first time ever product launched specifically for a
local rural & urban market to some extent. Ingenious Ltd. will position on pricing and its
all-pervasive cheap plank. . The ZEAL BIKE will be priced at Rs. 55,000-60,000
especially meant for guys segment, MIRACLE SCOOTER will be priced around Rs.
40,000- 45,000 designed for general public not exclusively for males or females, it will
cater also veterans and middle-aged and ECO CARRIER will be introduced as a product
for public transport. Ingenious Ltd. through this product range will try to make its presence
on the Indian Rural & Urban market by positioning its product as a Eco-Friendly,
Affordable & Comfortable Bike.
Benefits sought:
‘Customer is the profit, everything else is the overhead’
The basic contention of people has been price and safety. People prefer bikes which
provide healthy drive with proper comfort and good looks along with a reasonable price
and not just the Brand name. The product still has a long way to go before it proves to be a
success.
The customer buys the product as per the benefits he/she gets out of the deal. The company
has to sell the advantages of the product as per the benefits for the consumer, keeping either
the price as the distinguishing factor or the quality as perceived by the consumer.
NEED OF COMPARISION
ℑ Consumer Mindset
The consumers always have a different loyalty status for different brands.
Sometimes they buy some brand due to the price or sometimes due to the features.
Studying the consumer’s mindset is of vital importance as perception of individuals
at the buying stage of various brands is unpredictable and ever changing.
ℑ Market Share
The market share of the players in the two wheeler auto market needs to be studied
to know which company is in the booming stage and which company is in its
closure stage. Also the advertisement and promotional share needs to be studied.
Thus, market share helps us know the current market leader and market follower so
that our company can develop an efficient marketing strategy for its product range
after analyzing the current market player’s position.
ℑ SWOT Analysis
The SWOT Analysis i.e. the Analysis of the Strengths, Weaknesses, Opportunities
and Threats of the company products and its competitors at a glance. It needs to be
compared to get an overall analysis of all the major companies and to know the
company having better strengths, more opportunities and on the other hand the
company having more of weaknesses and threats.
The Indian automobile market is currently estimated at a modest Rs. 504bn. It is projected
to grow at 16% annually.
As our product is innovative and one of its kind in Indian market it does’t have any
immediate competitors but substitute to our product are present.
If well established brand like HERO HONDA come up with same concept they
have advantage over us due to their well established brand image and availability of
resources.Hence our strategies will be towards creating a brand image in the initial year
through marketing mix and after sales service.
The Hero Honda dominates the market with a combined share of 48% it a veritable
giant in the industry. TVS and Bajaj Auto are tied at 23% each according to ORG
estimates.The present market for two wheeler is segmented mainly on the bases of income
and lifestyle. Where Honda and Yamaha cater to the premium class, Hero Honda cater to
the popular class, Bajaj and TVS cater to the popular and economy class respectively.
HERO HONDA
Launch: What started out as a Joint Venture between Hero Group, the world's largest
bicycle manufacturers and the Honda Motor Company of Japan, has today become the
World's single largest two-wheeler Company. Coming into existence on January 19,
1984, Hero Honda Motors Limited gave India nothing less than a revolution on two-
wheels, made even more famous by the 'Fill it - Shut it - Forget it ' campaign. Driven
by the trust of over 5 million customers, the Hero Honda product range today
commands a market share of 48% making it a veritable giant in the industry. Add to
that technological excellence, an expansive dealer network, and reliable after sales
service, and you have one of the most customer- friendly companies.
Target: The target group of Hero Honda is different for its different bike ranges.
Product: Splender plus, Karizma, Glamour, Passion Plus, CD Dawn and various other
models.
Positioning:- Designed with your comfort in mind, with a contoured low-slung seat,
specially designed handlebar and a strong double-cradled tubular frame. The bikes by Hero
Honda epitomizes riding pleasure. Truly, the limousine of Indian two wheelers.
Differentiation: Better or wider distribution: the distribution network of the splendor plus is
excellent example. Their distribution divided into four zones.
Price:-
Price Range
Prices (in Rupees)
Bike / Scooter Ex. Showroom Price On Road Price
CD DELUXE 34,000 36,250
CD DAWN 30,899 34,912
PASSION PLUS DRUM 43,816 47,920
SPLENDER PLUS DRUM 42,351 46,328
ACHIEVER 51,650 53,650
GLAMOUR 50,350 54,150
KARIZMA 74,292 81,049
PLEASURE SCOOTER 34,240 36,340
Place:- It distribution channel is one of the largest with distributers spread all over the
country having more than 500 service stations.
Promotions:- Hero Honda has roped in film actor Hrithik Roshan, Captain of Indian
Cricket team Sourav Ganguly, Mohammad Kaif, Harbhajan Singh, Zaheer Khan, Yuvraj
Singh and Virender Sehwag as its brand ambassadors.
They will endorse the company products, attend corporate and brand events and help
promote its "We Care" campaign comprising safety riding, environment and friendliness.
BAJAJ AUTO
Launch: Bajaj Auto Ltd was incorporated in 1945 as Bachraj Trading Corporation.
Initially it started by assembling two and three wheelers in collaboration with Piaggio of
Italy. After the expiry of the agreement in 1971 the two and three wheelers acquired the
brand name of Bajaj. Bajaj Auto's two vehicle manufacturing plants are spread over 1 500
acres in two cities, produce a vehicle every 17 seconds and employ over 18 000 people.
Target: Bajaj Auto cater to the popular and economy class respectively.
Positioning: It is a value that makes Bajaj worthy of credibility through integrity, of trust
through sensitivity and of loyalty through interdependence.
Price:
Price Range
Prices (in Rupees)
Bike/ Scooter Ex. Showroom Price On Road Price
Bajaj Chetak 30,899 34,912
Bajaj CT 100 35,100 38,000
Bajaj Discover 43,700 46,150
Pulsar DTS-i 52,345 55,750
Bajaj Eliminator 67,245 72,344
Bajaj Avenger 60,000 63,250
Differentiation: Better value for the consumers money (passport schemes): additional
facilities are given to the customers like issuing passports and giving free insurance. More
dependable product and service.
YO-BIKES
Electrotherm’s range of seven Yo-Bikes are priced between Rs 14,000 and Rs 23,000
approximately, Ace Motor’s E-Bikes command Rs 26,500 each. The economy kicks in
where running costs are concerned. While a regular two-wheeler has a fuel cost of Rs 1 per
kilometer, electric bikes can run for as little as 10 to 15 paise per kilometer, inclusive of
battery maintenance.
Market for electric vehicles isn’t restricted to bikes alone. Bajaj Auto is currently
experimenting with three-wheelers, while Electrotherm is also looking at the feasibility of
launching battery-powered hybrid buses
MARKET SHARE OF THE COMPETITORS
100
90
80
70
60
50
Marke t Share
40
30
20
10
0
He ro Honda Bajaj TVS Yamaha O the rs
Ingenious Ltd. does not come in this graph because it’s a new entrant in to the two wheeler
segment of the automobile industry.
Bajaj Auto
Table: December month volumes
Dec-05 Dec-04 yoy (%) April - Dec 05 April - Dec 04 Yoy (%)
Motorcycle 143,727 71,623 100.7 1,053,566 760,658 38.5
Total two wheeler 154,101 85,086 81.1 1,178,017 956,188 23.2
Three-wheeler 14,705 21,483 (31.6) 168,260 168,745 (0.3)
Total Vehicles 168,806 106,569 58.4 1,346,277 1,124,933 19.7
Table: Motorcycle sales
Although Bajaj Auto registered a 100.7% yoy growth in motorcycle sales, the volumes
declined by 6.8% on a month on month (mom) basis. The cumulative motorcycle sales
have crossed the one million mark and registered a 38.5% yoy growth to 1,053,566 units.
All three Bajaj motorcycles - CT100, Discover DTS-I and Pulsar DTS-I - are leaders in
their respective segments. The three-wheeler sales decreased substantially by 31.6% yoy to
14,705 units and on a cumulative basis, the sales were almost flat at 168,260 units.
Hero Honda
Table: Motorcycle sales
Hero Honda registered a 44% yoy growth in motorcycle sales. However, on a mom basis,
the volumes declined marginally by 0.5%. On a cumulative basis, the company witnessed a
31% yoy growth to 1,935,981 units.
TVS Motors
Table: Motorcycle sales
In the motorcycle segment, TVS Victor GLX 125cc and TVS Centra have witnessed steady
growth and the new TVS Victor GX 110cc has received excellent response across the
country. In the scooterettes segment, TVS Scooty Pep received yet another accolade by
winning the outstanding design award in the two-wheeler category in the recently
concluded Business World – NID Design Excellence Awards 2005.
The above present market analysis shows that there is a huge scope and expansion growth
for the major players as well as the new entrants in the two wheeler segment. So, on this
basis also, our company, INGENIOUS LTD has decided to launch two wheelers running
on batteries.
There is a large front-ended investment made in new products including cost of product
development, market research, test marketing and most importantly its launch. To create
awareness and develop franchise for a new brand requires enormous initial expenditure is
required on launch advertisements, free samples and product promotions. Launch costs are
as high as 50-100% of revenue in the first year and these costs progressively reduce as the
brand matures, gains consumer acceptance and turnover rises. For established brands,
advertisement expenditure varies from 5 - 12% depending on the categories. It is common
to give occasional push by re-launches, which involves repositioning of brands with sizable
marketing support.
Marketing driven
In relative terms, marketing function has greater importance in the automobile industry.
The players have to reach out to mass population and compete with several other brands.
The perceived differences are greater than the real differences in the product.
Market research
Customers purchase decisions are based on perceptions about brands. They also keep on
changing with fashion, income and changes in lifestyle. Unlike industrial products, it is
difficult to differentiate products on technical or functional grounds. With increasing
competition, companies spend enormous sums on product launches. Market research and
test marketing become inevitable. The business rests on the two aspects that are brand
equity and distribution network.
Brand equity
Brand equity refers to the intangible asset in the form of brand names. The consumer's
loyalty for a particular brand is due to the perception that the product has distinctively
superior and consistent quality, satisfies his/ her specific needs and provides better value
for money than other competing brands. A successful brand generates strong cash flow
which enables the owner of the brand to reinvest a part of it in the form of aggressive
advertisement/ promotion to reinforce the perceived superiority of the brand. The worth of
a brand is manifested in the consumer's insistence on a particular brand or willingness to
pay a price premium for the preferred brand.
Distribution network
In this sector, one of the most critical success factors is the ability to build, develop, and
maintain a robust distribution network. Availability near the customer is vital for wider
penetration as most products are high value products. It takes enormous time and effort to
build a chain of stockiest, retailers; dealers etc and establish their loyalties. There are entry
barriers for a new entrant as a new product is typically slow moving and has lesser
consumer demand. Therefore dealers/ retailers are reluctant to allocate resources and time.
Established players use their clout to inhibit new entrants. However, when a product offers
a strong breakthrough, equity build up rapidly and so does the distribution network.
The major problems faced while marketing in the Indian market
c. Dispersed Market:
Areas are scattered and it is next to impossible to ensure the availability of a brand all
over the country. Seven Indian states account for 76% of the country’s retail outlets, the
total number of which is placed at around 3.7 million. Advertising in such a highly
heterogeneous market, which is widely spread, is very expensive.
d. Prevalence of spurious brands and seasonal demand: -
For any branded product there are a multitude of ‘local variants’, which are cheaper,
and, therefore, more desirable to mass.
And coming up with line extensions with regular frequency. The only alternative for
Ingenious Ltd. to survive in this industry will be to differentiate itself. This differentiation
could be on the basis of the marketing mix. (Product, Price, Promotion, Place) Thus, as per
the different factors of marketing mix 4 Different strategies are made to market in the
developing cities in India.
We will follow the differentiation high cost focus strategy as our product is one of its kind.
It has no competition from any company even though substitutes are available for this
product i.e. existing product and new battery operated bike “YO BIKES” launched
recently in the market.
The need for environment friendly yet cost efficient motor vehicles is the strong need and
demand of the consumers which we will fulfill; hence we can charge the amount we want.
We will keep track of our product on different life cycle in future so that necessary
strategies and steps could be taken to boost up the sales and build brand image in the
market. For that purpose BCG MATRIX, PORTER’S GENERIC MODEL etc will be used.
As our product is very innovative and it doesn’t have any competitors right at the moment
the strategy that will be followed is the high cost focused strategy.
BROAD
COST LEADERSHIP DIFFERENTIATION TARGET
The hybrid bikes are innovative and new concept in the market. The product yet has to
penetrate in the market. This product will be bought only by those consumers who are
initiators and take enough risk to buy new and innovative product. This product will also
attract the segment that are conscious about environment pollution and seeks environment
friendly products.
These customers will form a small focused group in the market. As there is no immediate
competitor for our product, we can charge the amount we want after evaluation of benefits
and returns the product will give to our consumers.
Hence, the strategy followed will be “HIGH COST FOCUSED STRATEGY”. By the
time when others will introduce the same product, it can follow cost leadership as it will be
market leader and can achieve economies of scale so as to reduce the cost per unit of the
product.
The Boston Matrix
Market Growth
High
Problem Children Stars
Market Share
Low
High
One axis shows the market share relative to The expert system will position your
the industry leader which is always the enterprise on the chart based upon your
leftmost circle. description of:
share of market
The other axis shows market growth rate for condition of the market
the industry. You can trace through the supporting
analysis and its conclusions, adjusting your
A circle is drawn for each competitor. The input until you are satisfied your description
size of each circle represents that company's accurately characterizes your enterprise.
dominance.
Our product will be in QUESTION MARK STAGE at the time of launch. Where it will
require high investments and high advertisement and sales promotion. The returns will be
very less at the initial level but it will attract lot more customers and gain high market share
share due to its new and innovative concept and lack of any competitor in the market.
B
A C
Time
o The company will do heavy advertisement and involve in sales promotion to create
awareness in the market.
o The company will achieve its break even point through aggressive selling and
providing after sales benefits.
o Once the company will start earning its profits after reaching its break even point
the product will enter into star age. The product will start earning revenues and market
share. The expansion strategy can be followed to establish strong competitive position.
o Once the company will start earning generous profits and enough of the market
share, the growth of the product will be stable but revenues will be large. At this point
of time reinvestment or stability strategies can be followed. Diversification strategy will
help in earn profits in other areas of related or unrelated products.
o If timely decision will not be taken in cash cow stage or any other stage of the
product life cycle, the product will enter into declining stage i.e. declining stage. The
strategies that could be used at this point of time are retrenchment or introduce some
innovation in the product to enter in the stage of problem child.
Sales
Development Introduction Growth Maturity Saturation Decline
Time
• Product Life Cycle – shows the stages that products go through from development
to withdrawal from the market
• Introduction/Launch:
– Advertising and promotion campaigns
– Target campaign at specific audience?
– Monitor initial sales
– Maximise publicity
– High cost/low sales
– Length of time – type of product
• Growth:
– Increased consumer awareness
– Sales rise
– Revenues increase
– Costs - fixed costs/variable costs, profits may be made
– Monitor market – competitor’s reaction?
• Maturity:
– Sales reach peak
– Cost of supporting the product declines
– Ratio of revenue to cost high
– Sales growth likely to be low
– Market share may be high
– Competition likely to be greater
– Price elasticity of demand?
– Monitor market – changes/amendments/new strategies?
• Saturation:
– New entrants likely to mean market is ‘flooded’
– Necessity to develop new strategies becomes more pressing:
• Searching out new markets:
o Linking to changing fashions
o Seeking new or exploiting market segments
o Linking to joint ventures – media/music, etc.
• Developing new uses
• Focus on adapting the product
• Re-packaging or format
• Improving the standard or quality
• Developing the product range
B. Product Features:
ℑ Pollution noise free two – wheeler ( due to battery/ solar energy)
ℑ Economical: Rs. 3 -7 per 100 kms.
ℑ Price range: Rs.40,000 – 60,000/- (Inclusive of Tax)
ℑ Extremely safe and reliable to drive.
ℑ No PUC required.
ℑ Battery design: Indigenous and full charge in 60 mins.
ℑ Built in Charger.
ℑ Switch to any mode as per the preference.
ℑ Economical.
ℑ Works on both battery and solar energy, therefore usage of petrol is very less.
ℑ Innovative design –Gen X
C. Brand Name:
The name of a company will also help to differentiate itself and build image in the long
run. When Ingenious Ltd. will first come to the Indian market as Hybrid two wheeler
automobile. It will try to use its brand name to pierce the Indian market and
revolutionize the two wheeler market. This has been hardly been the case in the launch
of the motorcycle segment. Ingenious Ltd. will leverage on its brand name in order to
attain competencies.
D. Product Varieties
Ingenious Ltd. will launch its bike and scooter of two wheelers addressing the Indian
palate with the first time ever product launched specifically for a local rural & urban
market to some extent. Ingenious Ltd. will position on pricing and its all-pervasive
cheap plank. The ZEAL BIKE will be priced at Rs. 55,000-60,000 especially meant
for guys segment, MIRACLE SCOOTER will be priced around Rs. 40,000- 45,000
designed for general public not exclusively for males or females, it will cater also
veterans and middleaged and ECO CARRIER will be introduced as a product for
public transport..
The leading States in India in terms of two – wheeler population are Gujurat, Maharashtra,
U.P, A.P, M.P, Punjab, Delhi & Rajasthan.
Uttaranchal is a major industrial zone of Uttar Pradesh and Delhi & is well connected by
rail and road which is beneficial for procurement of raw materials and marketing of
finished goods and cheap availability of man power.
Due to the above pros, the product has been segmented on the basis of location. Our plant
will be located at Uttaranchal.
ZEAL BIKE
Zeal Bike is specially designed for the Male Customer Group aged between
18 – 40 years due to the following features:
ℑ More Mileage
ℑ Low maintenance
ℑ 125 cc.
ℑ Price range: Rs.35,000 – 40,000/- (Inclusive of Tax)
ℑ Extremely safe and reliable to drive.
ℑ Battery design: Indigenous and full charge in 60 mins.
ℑ Built in Charger.
ℑ Switch to any mode as per the preference.
ℑ Economical.
ℑ Works on both battery and solar energy, therefore usage of petrol is very less.
ℑ Innovative design –Gen X
MIRACLE SCOOTER
MIRACLE SCOOTER is designed for general public not exclusively for males or females;
it will cater also veterans and middleaged aged between 18 – 50 years due to the following
features:
ℑ Light Weight
ℑ Extremely safe and reliable to drive.
ℑ Front & Rear Hand Brakes
ℑ Side Stand
ℑ 100cc.
ℑ Low maintenance
ℑ Auto Start
ℑ Price range: Rs.50,000 – 60,000/- (Inclusive of Tax)
ℑ Pollution noise free two – wheeler
ℑ Comfortable Seating Arrangement
ℑ Works on both battery and solar energy, therefore usage of petrol is very less.
ℑ Switch to any mode as per the preference
ℑ Built in Charger
ℑ Economical
ℑ Low maintenance
ℑ Extremely safe and reliable to drive.
Thus, Ingenious Ltd has its target group as 18-50 i.e. the youngsters as well the middle
aged people. Since all the other products have their target group as 25 and above, Ingenious
Ltd. will face less competition in the youngster group. It is providing Indians with new
funky colours which are specially meant for youngsters as now Indian youngsters are
shifting towards western culture. The target group being youngsters the product will enjoy
good market share as it is the product with current trends taken into consideration.
The company is trying to position its product in the minds of the customer as a product,
which is fashion oriented as well as economical and is safe to use.
During the second year, one can with additional pay of Rs. 5000/- take an AMC, wherein if
any part of the bike is damaged it will be replaced by the company for free.
Company’s estimated working life of battery is from 2 ½ - 3 years depending on usage.
It is as simple as recharging mobile phones. All that is required is a 3 pin domestic electric
point. Just plug in the cord and switch on the electricity and the battery gets recharged
automatically. The company is building a network of charging stations in the near future.
The solar energy system which IIT was fitting was specially designed by Japan and has a
long life. It will recharge it self during the day time and its charging will be directed to
battery. One can easily switch to solar system while riding during the day time to drive eco
friendly and cost free. It will too work on petrol as a normal two wheeler.
Safety Measures
Bike would be traceable with an in built censor in case of emergency and thus even if bikes
are stolen; there is no need to worry. Every censor chip has a uniue code which specifies
the model no. of the vehicle. Even in case of emergency the rider can switch to any mode,
suppose petrol gets empty so he/she can switch to battery or solar energy mode.
Customers will be educated on Safe Riding techniques through various audio visual aids.
Safety Instructors will be imparting riding skills as well as education to the customers.
The performance and safety of a bike not only depends on the world-class design and
workmanship assured by Ingenious Ltd. but also on the parts being used in the assembly
line.
Even the finest components manufactured need replacement from time to time. And to
ensure the continued impeccable performance of your vehicle, the spare parts should also
be made and replaced as good as the components fitted by Ingenious Ltd.
To ensure this, we manufacture and procure the replacement parts according to the
specifications and standards set by us.
As a responsible bike company owner, we will recommend our customers for their safety,
long life and high performance of bike, to use only Ingenious Ltd. made genuine parts.
Ingenious Ltd. would be economically priced, stylishly designed, has low running cost, has
good battery capacity and well-developed electronics technology.
Pull promotion strategy involves promoting your product on a very large scale and
making it visible on the market, thus raising the customers curiosity about the product and
hence inducing them to buy it.
We will give all the retailers/direct-dealers a good profit margin than our competitors are
providing them but not at the initial stage because we are focusing to attract our target
market using diversified means of promotions and advanced technology to our customers at
reasonable price. We will also give them incentives for vouching for our product at a later
stage as we settle down in the market. Hence we have decided not to go for push promotion
strategy at present but instead we have decided to go for pull promotion strategy.
ℑ Road Shows: The company plans to stage road shows, to display vehicles in the
pavilions during various college festivals, like Malhar, Space, Indigo, Bhavams etc.
These vehicles will appeal to youngsters more.
ℑ Radio is the medium with the widest coverage. Studies have recently shown high
levels of exposure to radio broadcasting both within urban and rural areas, whether
or not listeners actually own a set. Many people listen to other people's radios or
hear them in public places. So radio announcements will be made and
advertisements will be announced on the radio about the product features and price,
qualities, etc.
ℑ Print Ads: Daily advertisements in leading newspapers and magazines will be used
to promote the product. Leaflets at the initial stage will be distributed at railway
stations, malls, college areas and various other locations.
ℑ Banners, neon signs: Hoardings, banners, neon signs will be displayed at clubs,
discs, outside theatres and shops to promote our range of bikes.
ℑ Booklets and pamphlets: Booklets will be kept at bike showrooms, retail battery
outlets, college campuses etc for the customer to read. These booklets will provide
information about our company, the products offered which suits the customers
need accordingly.
ℑ After sales service: The after sales service will add into the appeal for the Electric
Vehicles (E.V.S). First of all, these are maintenance free vehicles. There is one-year
guarantee. Moreover, most of the spare parts are non-corrosive (made of plastic)
and easily available in the market. The company itself provides the vital parts. The
company has developed vendors to manufacture these parts as per the company’s
standard, quality and design. So there will be steady supply of spare parts to the
customer’s satisfaction. At every dealer counter, full fledged after sales service has
been committed. The vehicles are warranted for one year from the date of delivery.
It will have a venture with Bharat petroleum. At all the leading BPCL pumps we
will arrange for charging batteries for customers who wish to travel more kilometer
but is left with less power at concessional rates
Charging would be done at a very nominal charge and the customer has to give his
old battery for charging and take away the spare battery which is kept charged and
continue with his journey without any trouble. But while returning he will have to
return the spare battery and take away his own old battery completely charged. All
this data and check up will be totally computerized and once the customer
exchanges his battery at one of the petroleum outlets of Ingenious Ltd., and wishes
to exchange the battery again at another outlet, all information will be properly
noted down in the computer.
DISTRIBUTION CHANNEL
STOCKIST
DEALERS
SUB DEALERS
BOOKING AGENTS
------------------------
The profit earned
By Manufacturer is: 15% (i.e. 4,200)
------------------------
Retailer’s buys
From manufacturer is: Rs. 32,200/-
------------------------
The margin to
Retailers is: 10% (i.e. 3,220)
------------------------
Market cost of
the Product: Rs. 35,420/-
COST BENEFIT ANALYSIS
1. Costs:
Training costs:
Other costs:
2. Benefits: -
• 6000 bikes
= > 3,600
• 3000 scooters
= 86,07,000
Segmentation of Ingenious Ltd. is done considering the consumer market. The major
markets in India for two – wheeler across all segments is constituted by the western,
Northern & Southern Region. In terms of weight age, the largest sales came from North,
West, South & East respectively according to ORG Estimates.
The leading States in India in terms of two – wheeler population are Gujarat, Maharashtra,
U.P, A.P, M.P, Punjab, Delhi & Rajasthan.
Uttaranchal is a major industrial zone of northern India & is well connected by rail and
road which is beneficial for procurement of raw materials and marketing of finished goods
and cheap availability of man power. Govt. has provided special incentives and benefits for
the investment in the state of Uttaranchal.
Due to the above pros, the product has been segmented on the basis of location. Our plant
will be located at Uttaranchal.
Ingenious power limited will be launching its two wheelers (scooter and bike) in the festive
season. This Diwali and Eid is one of the best time to launch a product in to the market
because people mostly use to but new products in this festive season.
Weaknesses:
ℑ Inoperative in areas where power is unavailable.
ℑ Battery replacement after 300 cycles of operation.
ℑ There are no service stations till now for such products.
ℑ It’s a new product so it will be difficult for the company to convince customers
to switch over towards our product.
Opportunities:
ℑ Reduction in oil imports
ℑ Solar power stations for battery charging.
ℑ Light weight plastic grid battery will have an international market.
ℑ Export potential.
Threats:
ℑ Reaction or competition from existing manufacturers of two wheelers.
ℑ Duplication of product.
Automobiles have become an indispensable part of our lives, an extension of the human
body that provides us faster, cheaper and more convenient mobility every passing day.
Behind this betterment go the efforts of those in the industry, in the form of improvement
through technological research. What actually lie behind this betterment of the automobiles
are the opinions, requirements, likes and dislikes of those who use these vehicles.
These wheeled machines affect our lives in ways more than one. Numerous surveys and
research are conducted throughout the world every now and then to reveal one or the other
aspect of automobiles, be it about the pollution caused due to vehicle population in cities,
or rising motor accidents and causes, vehicular technology, alternative medicine and so on.