bajaj auto ltd maximus

8/9/2019 Bajaj Auto Ltd Maximus

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Case study

BAJAJ AUTO

LIMITED


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MAXIMUS

ABHISHEK SINGH 1201

MONIL GANDHI 1210

PUNIT PATEL 1220 MAULIK BRAHMBHATT 1230

JATIN GOHIL 1233

AMAN HEGDE 1235


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MAIN AREA OF CONCERNED

Declination in domestic market of two and

three wheelers by 11% per annum.

Faced increasing competition from themajor Japanese two-wheelers

manufacturers.

Strategy to protect both BALS dominant

share of Indian market and permit exports

to rise 15% of total sales by 1998.


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BAJAJ AUTO LTD.

Started by Jamanalal Bajaj in late 40s.

Imported scooters and three wheelersfrom Piaggio (Italian manufacturer of

Vespa brand).

In 1961, BAL started manufacturing

scooters at Akurdi near Pune


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BAJAJ AUTO LTD.

In 1975, BAL established a manufacturing

joint venture with the state Government of

Maharashtra. In 1980s their goal is to increase product

demand and build both volume and market

share.

In 1984 BAL entered in motorcycle and

moped segments by collaborating with

Kawasaki.


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BAL business strategys

objectives1. Keeping cost and prices low

2. Improving product quality

3. Focusing on two and three wheelervehicles

4. Striving for economies of scale


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PRODUCTS

In 1993 BAL manufactured 12 different

models-

5 scooter models like Chetak, Super,Stride etc.

3 motorcycle models:M80, Kawasaki RTZ

&4S

1 Moped model: Sunny

3 Three-wheelers models: Auto-rickshaw

& goods carrier


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MANUFACTURING

Producing over 3000 vehicles a day

In 1993 Manufactures worlds lowest cost

two wheelers model.

PLANT WORKER PRODUCTS

Akurdi 5800 4 Scooter model,

M-80 motorcycle,

F-E Auto

Waluj 4800 3 scooter model,

KB-100, 4S bike,

R-E Auto


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MARKET SEGMENTATION

Scooter: for family man, aged between 27

and 38 years, to transports whole family.

Brand name, word-of-mouthrecommendation, low maintenance and

mileage were the main concern for this

kind of customers.


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Motorcycle: Young single men, aged

between 21-30 years.

Customer concerned with mileage,product durability, power and style.


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Moped: appealed to a broader customer

segment due to low price.

Targeted mainly to women and teenager,

who looked for style and trendy features.


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COMPETITORS

The best of the world are here and theyre

here to stay.

Only competitors manufacturing a fullrange of two-wheelers and three wheelers

products.


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1. Kinetic Honda:

Manufactured for scooters and mopeds

Had collaborations with Honda formotorcycles.

Market share (scooter)-14% in 1992.

Introduced Electric starter but was 15%costlier than BAL


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1993, Honda increases its equity in Kinetic

to 51% and aimed to become number one

in Indian two-wheelers market.


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2. Hero Honda:

Manufactured both motorcycles and

Moped. Market leader in 1992 with share of 33%

in motorcycles segment.


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3. LML Vespa:

Manufactured only scooters in

collaboration with Piaggio. Market share- 11%

4. ESCORTS:

Manufactured motorcycles incollaboration with Yamaha

Market share- 26%


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5. TVS:

Manufactured mopeds and motorcycles

in collaboration with Suzuki Market share (motorcycle)- 8%

Market share (moped)- 31%


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BALS MARKETING STRATEGY

In 1980s capacity constraints were lifted and

marketing dept. evolved.

Marketing dept. objectives:

1.To increase annual sales to 1 million units

2.Retaining at least 50% domestic market

share

3.Maintain share leadership in a two and three

wheelers segments


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DISTRIBUTION AND SALES

In 1993, 330 exclusive dealers were their

across the country.

Distribution system was computerized with30% dealers connected by modern link.

Pricing strategy: readily available parts

anywhere at reasonable prices.


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THREE-WHEELER GLOBAL MARKET

SHARE


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TWO-WHEELER GLOBAL

MARKET SHARE


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ADVERTISING &

PROMOTIONS Advertising expenditure: 1990-1991: 54 million

1991-1992: 110 million 45% in TV & press advertising each.

10% in magazines and radio commercials.

Aim was to maintain brand awareness andpreference, and new products.


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Planned new marketing campaigns

1st to companies, offering discounts for

groups of employees 2nd to small business for transport

requirements.


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PRICING

The Bajaj M-80 was priced at 50% of

comparable Japanese motorcycles.

Because of the more features Sunny was

priced slightly higher.

Because of the BALs profits from scooters

and three-wheelers, the other products

were priced lower to retain market share.


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EXPORTS

In 1992, Bangladesh and Sri Lanka remain

BALs major export markets for three-wheeler.

Market share of 90% and 95% respectively in

above countries.

Between 1976 and 1982, over 60,000 units of

CKD scooters and over 14,000 units of CKD

three-wheelers were exported to Indonesia.


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80,000 of CKD Bajaj Chetak scooters

were exported to Taiwan.

BAL earned technical know-how fees for

helping both the licensees establish their

assembly plants.


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RECOMMENDATION

Give high profit margin to dealers compared

to competitor.

Joint venture with overseas dealer to

increase foreign market share.

Increase work-station which would reduce

the cycle time for a new model.


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Increase expenditure on R&D.

Skilled R&D personnel.

IN Europe, under 50cc vehicle was thelargest market. So, need to focus at this

point.

Schemes for the new buyers likeinsurance, gifts.

Launch new generation bikes with stylish

look, greater mileage


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bajaj auto ltd maximus

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