MARKETING MANAGEMENT

BAJAJ AUTO& HINDUSTAN MOTORS

ABHISHEK KUMARPIBM

SECTOR OVERVIEW • The automotive industry in India is one of the largest automotive markets in the world.

• The automobile industry accounts for 7.1 per cent of the country's gross domestic product (GDP).

• In four wheeler category cars is the major segment in Indian automotive industry.

• The automotive industry accounts for 45% of the country's manufacturing gross domestic product (GDP)and employs about 19 Million people both directly and indirectly.

AUTOMOBILE MARKET RECOVERY

PORTER’S FIVE FORCE ANALYSIS

PORTER’S FIVE FORCE ANALYSIS

MARKET SIZE VEHICLE CATEGORY PERCENTAGE

CONTRIBUTEDTwo wheelers 8.9%

Three wheelers 10.80%

Passengers carriers 12.16%

Goods carriers 5.27%

Utility vehicles 5.30%

Passenger vehicles 3.9%

CAPITALISING ON STRONG DEMAND AND PRODUCT INNOVATION

Growing demandRising income young

population

Availability of credit and financing option

Strong growth in exports

EMERGENCE OF LARGE AUTOMOTIVE CLUSTER IN THE COUNTRY

INVESTMENTS IN AUTOMOBILE SECTOR • General Motors plans to invest US$1 billion in India by 2020.

• US-based car maker Chrysler has planned to invest Rs 3,500 crore (US$ 525.5 million) 

• Mercedes Benz has decided to manufacture the GLA entry SUV in India.

• Electric vehicles are most waited investment in India in up coming months

• Total electric vehicles sales would amount to 6-7 Million units by 2020.

ABHI MOTORS

Abhi Motors is an Indian (auto) manufacturer is going to launch electronic car in 2017.

 The company will largest car manufacturer in India before the rise of Maruti udyog. 

Hindustan Motors was the producer of the Ambassador which was once a mainstream car in India.

 Moreover first made by Morris Motor Limited at Cowley, Oxford in the United Kingdom from 1956 to 1959.

BAJAJ MOTORS • Bajaj Auto Limited is an Indian two-wheeler and three-wheeler manufacturing company. Bajaj Auto is a part of the Bajaj Group. It was founded by Jamnalal Bajaj in Rajasthan in the 1930s. 

• Bajaj Auto is the world's sixth-largest manufacturer of motorcycles and the fourth-largest in India. It is the world’s largest three-wheeler manufacturer.

What went wrong [Ambassador]• COMPETITION: 

New players venturing into Indian automobile market due to globalization. 

Maruti Udyog, General Motors, Honda penetrated into the market.

• INTERNAL MANAGEMENT:  Internal environment of the organization was not feasible. Huge conflict between management and workers. Shortage of funds and large accumulation of liabilities.

• CONSUMER BEHAVIOR: Preferences and perceptions of consumers changed over time. High maintenance, and low fuel efficiency reduced interest among customers. 

Customers did not find any value for money in ambassadors after introduction of Maruti 800cc model.

• TECHNOLOGY AND INNOVATION: Spending on R&D projects by Hindustan motors were very low. No upgradation and updation in technology used by the company.

• OTHER FACTORS:  No joint venture with foreign automobile companies. Highly depended on government policies.

What went wrong [Bajaj super]

• Liberalization in Indian economy after 1990’s 

• Many foreign players entered into the market with strong competition.

• Not able to co-up with Structural changes happening  two wheeler industry customer were shifting to motor cycles. 

•  Bajaj continued to invest time and resources in the geared scooter segment even till the early 2000s when the sales of geared scooters were negligible as compared to the gearless scooters.

• Technology and innovation • Bajaj never seriously looked at customer perception and their changing demands over the time .

• Bajaj were still manufacturing product with same feature , style no upgradition in model and technology which was a bad sign.

• Scooter were  getting out from the market day by day 

• Product issue- • Moreover a great issue was Bajaj super had  serious problems like starting trouble and riding comfort which was neglected by the company.

Right marketing approach to be adopted

Customer is king : make the king happy • Hindustan motors & Bajaj can still be the leader in

the automobile market with their products if they change their products according to changing demand of the customers what exactly customers need.

Product is everything: • Customer always purchase product where they

find value for proposition

• Ambassador and Bajaj failure was just because of the their product which was not giving value for money whereas marketing and sales approach comes after product.

.

Market sensitivity: In automobile sector consumer feels the fact that today’s new is tomorrow’s old so Bajaj and Hindustan motors could have understand the point have to come up with new product to keep them in market

• As scoter was becoming out of fashion and motor cycle was becoming the choice of the customers but Bajaj was ignoring this evolution in two wheeler segment.

• Same was with ambassador, Hindustan motors was still stuck with their same product and policies and didn’t change with changing aspects of market.

Technology and advancement :• change is the law of nature • Hindustan motors and Bajaj can be the leader of

the market if they have upgraded or they would have came with new features style and looks in their existing product.

Right approach to market mix :• Product- what to produce how to produce • Place -where to produce and where to sell • Price -what should be the price of the product • Promotion- what kind of promotional and

advertising strategies company have to adopt.