Ideas for today and tomorrow

Recommendinga Strategy

Bajaj QuadricyclesSubmitted to Dr. Radhakrishnan S

Submitted byGroup B6Rahul Thampi 12035Madhev Das 12086Sakshi Ranadive 12100Sandeep Haneefa 12102Arun K P 12129

Bajaj Auto Ltd.• Bajaj group is founded by Jamnalal Bajaj in 1926

• Bajaj Auto is a flagship company of Bajaj group – formed in November 29th 1945

• BAL is currently worlds largest three wheeler manufacturer and third largest two wheeler manufacturer

• BAL is India’s 23rd largest publicly traded company with a market capitalization of INR 520 billion

• Exports to 57 countries

Two Wheeler and Three Wheeler Segment• BAL accounts for 31% of the total two wheeler sales in FY ‘12

• Of the total sales 44% is exported

• BAL pioneered in three wheeler manufacturing leading them to be the market leader in passenger segment with 51% market share

• In Goods segment Bajaj accounts for 7% market share

• Differentiation

• The emergence of brand led strategy

• Example of Pulsar 200 NS

• Positioning school

Strategic intend

Concept of Quadricycles• In Europe

• Four wheeled micro cars with less weight, power and speed• Seen as leisure vehicles used off the road rather than on it• Light quadricycles which are limited to 350 kg and top speed exceeds not more

than 45 km/h• Heavy quadricycles which are limited to 400 kg and maximum power not

exceeding 15 KW

• In India• As an alternative to the unsafe three wheeler auto rickshaws• Not targeted at small cars but pricing of the vehicle makes it a competition to

small cars

Re-60• Quadricycles are low speed light weight four wheelers having

an engine at the rear meant for intra-city commuters.

• Concept- Not a car, a replacement for three wheelers(auto rickshaws)

• Bajaj is considering process of cannibalization by looking to convert its existing market base of auto-rickshaws into the RE60 market.

Benefits & comparison • Higher power• Fuel efficiency• Ultra low emissions

PARAMETERS BAJAJ RE 60 BAJAJ AUTOS

     

FUEL EFFICIENCY 35-40 Kmpl 25-30

MAX POWER 20Bhp 8Bhp

CO2 EMISSION 60gm/km 85.6gm/km

WEIGHT 400Kg 330kg

SEATING CAPACITY 4 N.A

PRICE 1,10,000-1,30,000 1,00000-130,000

View Points of players • Bajaj Auto

• Has opposed the idea in the past• Re-introduced with RE60• Better safety than a three wheeler and less CO2 emissions when compared to car• Proposed EU norms to be adopted for quadricycles in India ( 400 kg and 70 km/h)• Quadricycles to be limited to urban use

• TATA Motors• First introduced by V Sumantaran as a cheaper alternative to car• Opposed by Maruti and Bajaj Auto seeking emission and safety issues• Went on to manufacture Nano• Introduction of quadricycle would decrease share of Nano. Hence opposing RE60

• TVS Motors• Proposed idea of quadricycles a decade ago• Launch opposed by Maruti and Bajaj Auto citing safety and emission issues• Second largest manufacturer of three wheelers• Launch of quadricycles would decrease sales drastically. Hence against RE60

• Piaggio • Pioneers of quadricycles in Europe• Proposed idea of quadricycles in India along with TVS• Open to RE60 as they have the competency in design of quadricycles

• Mahindra & Mahindra• Present in 2 wheeler, 3 wheeler, cars and trucks• Open to RE60 as it would create opportunities for three wheelers to upgrade to

four wheelers

• Threat of substitute for three wheeler – example of Gillete

• Major part of the production exported

• Growing need for economically viable non polluting and technological superior intra city transportation

• Example of Indonesia – ‘Bajai’

Why RE??

Porters Five Force Analysis

Potential of new entrants-Low

Bargaining power of

suppliers - Low

Bargaining power of

customers- High

Competition in the industry - High

Threat of substitutes - High

SWOT AnalysisHARMFUL

To achieving the objectivesHELPFUL

To achieving the objecives

INTE

RN

AL

FAC

TOR

SEX

TER

NA

L FA

CTO

RS

• Brand Image• First Mover advantage • Global presence• Robust distribution network

• Inadequate service ecosystem

• Lack of experience in marketing similar products

• Auto driver’s mentality towards change

• Future competition • Lobbying• Govt regulation

• Growth prospect of Indian economy

• Need for a greener & safer alternative for 3 –wheeler

• Opportunity in export market

STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS

SWOTAnalysis

 

Challenges in quadricycles

• Safety and emission norms

• Government regulations- lack of proper norms and policies

• Consumer acceptance- number of people that can be accommodated

• Opposition from competition

SLEPT framework• Social

• Status of a four wheeler owner• Safer and stable when compared to a three wheeler• Affordability to the target customers

• Legal • Can only be used as commercial vehicle within the municipality limit• New category of quadricycle will be amended to CMVR• Comply to EU norms for quadricycle and is subjected to future revision• Should have ‘Q’ on the body

• Economic & Environment• Affordability• Maintenance cost• Carbon dioxide emission lower than a car

• Political• Lobbying from other car manufacturers• Lack of proper government policies

• Technology• Lack of technology expertise in quadricycles• Association with Nissan and Renault

Targeting and positioningTARGETING

Targeted towards Three wheel(auto rickshaws) owners.

POSITIONING

Up gradation to three wheelers

4P’s of MarketingProduct

• Re-60 is a replacement for conventional auto rickshaws .

• Features –Better fuel efficiency, power and safety features(seat belts)

• Variants- Petrol,CNG AND LPG.

• PRICE

Priced between three wheel auto rickshaws and Tata Nano(world’s cheapest car).

Price range- 1,10,000-1,50,000

• PLACE

High penetration in urban and rural areas with the help of large presence of dealerships and showrooms of Bajaj.

PROMOTION

Biggest challenge is to change the mind-set of existing auto drivers.

• Test Driving Facilities to be given at Bajaj outlets.

• Attractive exchange and finance schemes to be introduced.

McKinsey 7S model• Strategy

• Differentiation and defensive

• Structure• R&D• Engineering• Two wheeler business unit• Commercial vehicles business unit• International business unit

• Systems • Individual owned learning• User friendly learning management software• Idea management and knowledge sharing

• Shared Values• Innovation• Customer satisfaction• Delivering quality products• Latest manufacturing technologies like robotics and automation

• Style • Integrity, dedication, resourcefulness and determination to succeed are the main

characteristics of the group today• Relentless devotion to a common cause• Rajiv Bajaj brought in an entrepreneurial spirit to the company

• Staff • Recruits the best through campus and lateral process• Organic growth and numerous opportunities for employees• Employee engagement

• Skills • Technological innovation• Employee skills• R&D skills• Organization culture which provide employees with high degree of autonomy in

their day to day decisions empower and motivate them in their performance

Conclusion

• Prospects of RE60 seems to promising in the long run

• Marketing campaign will be decisive

• Opportunity outside India in countries like Indonesia and Srilanka

• Possibilities in the European market – Italy, France & Spain

Thank you