bajaj rebranding plans

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Life without 'Bajaj'Swaraj Baggonkar / Mumbai January 24, 2011, 0:33 IST

Rebranding is a difficult thing to do correctly, especially if you happen to be

Bajaj Auto. Why, then, is the company taking such a drastic step? Bajaj Auto

wants to force a change in direction to once again steal a lead on the

competition. How? To start with, by dropping the family name from its

communication. One can only imagine the behind-the-scenes deliberations at

Bajaj Auto headquarters preceding the decision, but it is one that has provokedmore than a few raised eyebrows.

Why? Because it is Bajaj Auto. A brand built on the Bajaj family name.

Indeed, the name ‘Bajaj’ has been an inextricable part of all Bajaj Auto

communication over the decades. In 2001 Bajaj Auto introduced a refreshed

version of the famed ‘Hamara Bajaj’ advertising whose earlier version had

forged an emotional connect with the ‘average’ Indian and had firmly

established its agency Lowe Lintas as a ‘creative’ powerhouse. The ad

campaign, where one could see the entire range of new generation Bajaj

models against the backdrop of new age consumers blending perfectly with

Indian tradition and values, was again hailed as one of the agency’s finest.

With the tag line, ‘Badal rahein hain hum yahan’, it not only showcased thechanges Bajaj Auto was making within the company but also showed the

transformation that the two-wheeler industry was set to go through. This was

also the time when consumers were beginning to favour motorcycles of rival

Hero Honda known for their versatility and fuel-efficiency, ignoring the Bajaj

Chetak, an iconic geared scooter, a champion in the 1980s.

Riding piggyback on the Bajaj brand, the Pune-based

company, which is India’s second largest bike making firm,

launched a slew of two-wheelers including motorcycles

and gearless scooters over the next few years.

A decade on, Rajiv Bajaj, the enthusiastic mechanical

engineer and managing director of Bajaj Auto, has

envisaged a brighter future for the company, which hebelieves can be achieved only if the family name is

dropped from all forms of communication.

Going forward the company will do away with the ‘Bajaj’ brand completely,

paving way for branding by models in its stable. At present, two models

dominate its portfolio Pulsar, launched in 2001, and Discover, launched in

2004 that have several variants at different price points. According to Bajaj, it

is essential for a company like Bajaj Auto to separate its name from its models

to ensure greater acceptability not just locally but in overseas markets such as

Europe and the US.

Rajiv Bajaj says, “Today if you talk to people or go on Google they say that

they wish to buy a ‘Hero Honda’ but when it comes to Bajaj the buyer will say

that he wishes to buy a ‘Pulsar’ or ‘Discover’; he won’t say I want to buy a‘Bajaj’. This tells me we have succeeded in separating and specialising (in

branding)”.

Tried and tested

By putting the product brand before the company brand, Bajaj is treading the

path chosen by consumer goods giants l ike Apple Inc, Hindustan Unilever, Kraft

Foods Inc, among several others.

The marketing success of international automotive companies like Germany’s

Volkswagen or Japan’s Toyota Motor Corporation that have several brands

operating as independent entities, has also attracted Bajaj. He feels that both

Pulsar and Discover are well established in the domestic market with a loyal

customer base and no longer need the support of an umbrella brand like Bajaj

Auto.

Analysts say this strategy may prove favourable for a company that has greater

recall for its products built on their brand value rather than the equity of the

company which manufactures them. Hero Honda, for instance, thrived on the

success of the Splendor brand created more than a decade ago. More products

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were launched by the Delhi-based company and the current market leader

riding on the success of Splendor and its derivatives over time.

“The success of Splendor and later Passion proved the tipping point for Hero

Honda. Both the models were promoted as fuel-efficient bikes which, in turn,

strengthened the Hero Honda brand. The company was thus able to venture

into newer segments later ,” says an analyst from a Mumbai-based brokerage

firm.

As far as Bajaj Auto is concerned, the two models, Pulsar and Discover,

constitute 70 per cent of its total two-wheeler sales. Pulsar is positioned as aperformance-oriented motorcycle serving mostly the younger buyers (referred

internally as Krishna at Bajaj), who preferred a bit of style and zing in their

vehicle of choice.

Discover, meanwhile, is promoted as a fuel-efficient bike and is targeted at the

Splendor segment. This category of buyers (known internally as Rama) are

often those who look for high mileage, lower maintenance costs and other

add-on utilities in a bike, which is often their first.

Significant others

Bajaj Auto has two other brands in its portfolio Platina and Avenger but

the intention is to focus more on the two volume generating models, according

to Bajaj Auto officials.

“We produce the Platina and Avenger since there is a sustainable demand for

them. Our focus, however, will remain on the Pulsar and Discover. We do not

intend to add any more brands to the portfolio,” adds Bajaj.

While India remains the largest two-wheeler market in the world, manufacturers

here don’t go for premium pricing with most motorcycles and scooters are in the

affordable range with small engines.

The international markets will be the mainstay of the Bajaj strategy with the

managing director going on record to state that he wants his company to

become the largest two-wheeler manufacturer in the world with a significant

share of the global market.

“The reason why Bajaj decided to focus on motorcycles is that we want to be aglobal player. We have no choice but to compete with global competition not

only in our market but overseas market as well from Chinese at the bottom to

the Japanese in the middle to the European at the top,” adds Bajaj.

Bajaj intends to break into the league of European and Japanese companies

like BMW, Piaggio (Aprilia), Ducati, Triumph, Honda, Yamaha and Suzuki with

KTM Power Sports, Kawasaki and Bajaj itself.

For this too, the company believes, it will have to separate its brand from its

products. KTM, the Austria-based auto company, where Bajaj Auto holds 38

per cent (through a subsidiary) and intends to have management control later,

will play a crucial part in Bajaj’s global expansion strategy.

KTM will continue to have independent branding. Bajaj does not plan to lend itsown brand to the Austrian bike maker, which in Europe enjoys a very distinct

positioning.

Small beginning

Bajaj Auto has taken a few steps in the direction of doing away with the

company’s branding on its product as the volume models no longer carry the

Bajaj name. It will soon undertake a similar rebranding exercise throughout its

massive sales and service outlets. The company will put its distribution set up

through a complete overhaul and rebrand all consumer touch points, such as

showrooms and service centres, on the lines of brands Pulsar and Discover.

Fitch, an international retail design agency which has also worked with entities

such as the Nokia, HSBC, Coca-Cola, Tata Docomo to name a few, will help in

upgrading the quality of Bajaj showrooms across the country.

The final blueprint of the new marketing plan for its 600-odd showrooms and

1,100 service outlets is in the works and should be ready by March or April this

year. Dealers will be required to spend around Rs 1.75 lakh to upgrade their

showrooms and service centres. A model dealership based on the new plan will


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be opened in some markets where existing dealers can experience the changes

before they invest to employ a similar transformation.

This will collectively cost around Rs 21 crore for its dealers the strength of

which will be 600 this year in addition to 1,100 service centres. The

upgradation programme will also encompass the next generation of motorcycles

comprising KTM, Kawasaki and Bajaj models that would be launched later this

year.


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bajaj rebranding plans

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