bajaj auto ltd maximus
TRANSCRIPT
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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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