Motorcycle market analysis presentation submitted as part of group assignment on Marketing Basics by our SMP09 group. Presentation submitted to Prof. Ramanuj Majumdar, IIMC Kolkata.
3. The Motorcycle Market
• South East Asia has a huge motorcycle market
– demographics favor further growth
IIMC SMP09 – Motorcycle Team 3
• Global Market eyeing India
– Piaggio plans to increase production in India
– KTM plans to set up plant in India
• Indian brands need to increase R&D
– to compete with global brands in local market
4. The Motorcycle Market ..contd.
• 2W sales growth drop in 2012, matter of concern
IIMC SMP09 – Motorcycle Team 4
• Rise in raw material costs
• Global demand for
electric 2W is
projected
5. Market trends
Before competition act:
• 1955-69: Collaboration
• 1970-80: Manufacturing Increased
– Growth in demand
– fuel price increase
– FERA caused technological stagnation
• 1981-90: Foreign collaboration
– up to 100cc motor cycles license capacity was increased
• 1991-99: Liberalization of economy
– more brands
– increased sales
IIMC SMP09 – Motorcycle Team 5
6. Market trends ..contd.
Post competition act(2002):
• 2000-2010:
– Rapid growth in urban areas.
– Parking space, traffic chaos made 2W preferred option
– demand of gearless scooters
• women working population increase
• 2010-2020:
– Overcapacity – Potential speed bump in urban areas
– Rural market needs to tapped to continue growth rate
– Need to tie up with local (service) centers in rural areas
• to display brand presence across every corner in the country
• have an edge over others in providing service
– Need for rollover of success trend
• from urban Tier I cities to Tier II and III cities
IIMC SMP09 – Motorcycle Team 6
7. Product Segments
IIMC SMP09 – Motorcycle Team 7
• Standard
– Rational:
• Basic cost effective model available.
• Good fuel efficiency (around 65-70 kmpl)
– Emotional:
• Doesn’t get affected by emotional aspects.
• Doesn’t mind being seen riding entry level models.
– Models :
• Bajaj Platina, Hero Honda CD Dawn/Deluxe, TVS Star City, Yamaha Crux
• Deluxe
– Rational:
• Good fuel efficiency (around 50-65 kmpl).
• Simple sober styling, in some cases matching the looks of upper segments.
– Emotional:
• Doesn’t like to be seen buying into the least price (entry) models.
• Models in this segment has more prestige value than standard models
– Models:
• Hero Splendor, Hero Passion, Hero Glamour, Bajaj Discover, TVS Star City, Honda
Shine, Yamaha YBR, Suzuki Slingshot, TVS Flame, Honda CB Twister
8. Product Segments ..contd.
• Sports
– Rational:
• Combination of decent fuel efficiency (around 40-50 kmpl) with decent pick up
• Top speed around the (150-20) kmph mark
– Emotional:
• Power and pickup takes equal importance.
• Bikes in this segment are also expected to be styled in a muscular manner
• Good engine performance
– Models:
• Bajaj Pulsar, Hero CBZ Xtreme, Honda CB Unicorn, Honda CB Unicorn Dazzler, TVS Apache RTR,
Suzuki GS150R, Hero Karizma, Yamaha Fazer, Honda CBR250R, KTM 200 Duke
• Cruiser
– Rational:
• Standing apart from the crowd
• Typical fuel efficiency (around 30-40 kmpl)
• More emphasis on power and pickup
– Emotional:
• Stand apart from the crowd
• Styling elements like Half Fairing, Full Fairing, Differentiated Styling
– Models:
• Bajaj Avenger, Royal Enfield Thunderbird, Harley Davidson FLST, Ducati Strada, Hyosung Aquila
IIMC SMP09 – Motorcycle Team 8
10. Customer Segments
IIMC SMP09 – Motorcycle Team 10
Deprived (< 90K) Aspirers (90K-2L) Middle Class (2-10L) Rich (> 10L)
Standard Public transportation
not available. Business
needs. Rural areas.
Needed for regular
commuting. Can
commute in public
transport but feels
good in own vehicle.
Maybe for alternate
transport option
NA
Deluxe NA Proud to own a deluxe
motorcycle.
Alternate transport option NA
Sports NA Very passionate about
riding sports
motorcycles
Medium range sports
category for young siblings
High end sports
category for young
siblings
Cruiser NA NA Very passionate about
riding two wheelers
Passionate about
riding two wheelers
11. Consumer Behaviour
• Standard
– Typical consumer class:
• Rural middle class
• Urban Lower and Lower-Middle class
– Behavioral characteristics:
• Fuel efficiency
• Low maintenance
• Low cost
– Used for
• Business commute - newspaper, milk, daily use vendor distributor
• Lack of public transportation, especially in rural areas
• Convenience for small family commute
• Deluxe
– Typical consumer class:
• Rural middle class
• Urban Lower-Middle and Middle class
– Behavioral characteristics:
• Motorcycle looks not too sporty but decently styled
• Doesn’t want to own an entry level bike, social status is important
• Doesn’t mind paying more, but demands value for money
• Should be a good mix of fuel efficiency, maintenance, safety, style and cost
– Used for
• Daily office commute
• Lack of public transportation, especially in rural areas
• Convenience for small family commute
IIMC SMP09 – Motorcycle Team 11
12. Consumer Behaviour ..contd.
• Sports
– Typical consumer class:
• Urban Middle class
• Young professionals
• College students
– Behavioral characteristics:
• Fast and furious
• Young and impatient
• Weakness to imitate powerful stars
• Style statement takes precedence over mileage or cost
– Used for
• Commuting to college, office
• Casual and official racing
• Cruiser
– Typical consumer class:
• Rich on the road movers
– Behavioral characteristics:
• Passionate about motorcycles
• Typically like to be independent and travel alone or in small groups
• Loves to be close to nature
– Used for
• Casual long distance tours
• Adventure travel
IIMC SMP09 – Motorcycle Team 12
13. Positioning
• Hero MotoCorp
– New Brand identity, post split with Honda
– Connect with people on all product segments
• Bajaj
– Product segments targeted : Deluxe, Sports
– Brave strategy : targeting premium performance segment
• TVS
– Product segments targeted : Standard, Deluxe
– Launch new products in the standard and deluxe segment
• Honda
– Product segments targeted : Standard, Sports
– Targeting Indian common man in standard
– Targeting Indian racing enthusiasts in sports
• Mahindra
– Product segments targeted : Deluxe
– Create new market segment within 110 cc
• Harley Davidson
– Product segments targeted : Cruiser
– Planning affordable machines for Indian market
IIMC SMP09 – Motorcycle Team 13
14. Positioning –Comparison
IIMC SMP09 – Motorcycle Team 14
Standard Segment
Brand Name Bajaj Platina Yamaha Crux
Tagline/ Slogan Dumdaar sawari Aapke irade sa mazboot; Yes Yamaha
USP Durable stylish and good performance Bike which has good mileage
Segment Middle-class people who want a bike that is stylish and
gives a good mileage
Middle-class people who want a bike that is stylish and
gives a good mileage
Target Group Middle class youth from the age bracket of 25-36 Middle class youth from the age bracket of 25-35
Positioning For bikes who want to experience a powerful ride A strong bike which encourages a strong life
Strength Strong brand name and huge market
Excellent distribution through franchisees
Most reliable as it requires low maintenance
Good mileage
Huge market
Excellent distribution through franchisees
Good mileage
Weakness Simplistic Design
Focuses on just mileage
Limited market share as compared to other
leading brands
Opportunity Expansion in rural and tier-2 cities
Innovations in technology
Expansion in rural and tier-2 cities
Innovations in technology
More brand visibility
Threats New entrants
Competitors
Low cost bikes
New entrants
Competitors
Low cost bikes
Competitors Victor
Apache
Passion
Yamaha Crux
Victor
Apache
Discover
Bajaj Platina
15. Positioning – Comparison ..contd.
IIMC SMP09 – Motorcycle Team 15
Deluxe Segment
Brand Name Hero Honda(Hero MotoCorp) Splendor Bajaj Pulsar
Tagline/ Slogan Yaari ki Gaadi; Desh ki dhadkan Definitely Male, The Fastest Indian
USP A bike with low maintenance and good mileage Powerful engine and good pickup
Segment Middle-class people who want a bike that is stylish and gives
a good mileage
Young boys looking for fast sporty bikes for Indian
roads
Target Group Middle class youth from the age bracket of 25-35 Young boys in the age 18-30 middle class
Positioning A motorcycle for making friends in life The No.1 Sports bike in India
Strength Strong brand name and huge market
Excellent distribution through franchisees
Most reliable as it requires low maintenance
Good mileage
Excellent brand name
High product quality
High performance, speed and pickup
Weakness Focuses on just mileage and no power Mileage on a lower side due to focus on
Power
High cost in various variants
Opportunity Expansion in rural and tier-2 cities
Innovations in technology
Expansion in rural and tier-2 cities
Cost management thus reducing the price of
the bike
Developmental changes thus reducing bike's
weight
Threats New entrants
Competitors
Low cost bikes
New entrants
Competitors
Low cost bikes
Competitors Passion
Discover
Pulsar
Passion
Discover
Splendor
16. Positioning – Comparison ..contd.
IIMC SMP09 – Motorcycle Team 16
Sports Segment
Brand Name Hero Honda CBZ Yamaha FZ
Tagline/ Slogan Live off the edge; Desh ki dhadkan Lord of the street
USP Fast and Sport looking bike Powerful engine and good pickup
Segment Young boys looking for fast sporty bikes for Indian roads Young boys looking for fast sporty bikes for Indian
roads
Target Group Young boys in the age 18-30 middle class Young boys in the age 18-30 middle class
Positioning For bikers who want to live life in the extreme For sports bike lovers who like to rule the streets
Strength Excellent brand name
High product quality
Excellent brand name
High product quality
High performance, speed and pickup
Weakness Lower on mileage
High cost
Very low mileage
High cost and thus limited target segment
Opportunity Expansion in rural and tier-2 cities
Cost management thus reducing the price of the bike
Developmental changes thus reducing bike's weight
Expansion in rural and tier-2 cities
Cost management thus reducing the price of
the bike
Developmental changes thus reducing bike's
weight
Threats New entrants
Competitors
Low cost bikes
New entrants
Competitors
Low cost bikes
Competitors Karizma
Yamaha FZ
CBZ
Karizma
17. Positioning – Comparison ..contd.
IIMC SMP09 – Motorcycle Team 17
Cruiser Segment
Brand Name Royal Enfield Classic Bajaj Avenger
Tagline/ Slogan Handcrafted in Chennai Feel like God
USP Indian cruiser bike Indian cruiser bike
Segment Boys who want to go for bike cruises Boys who want to go for bike cruises
Target Group Middle class boy of the age group 18-31 Middle class boy of the age group 18-30
Positioning Handmade classic powerful bike for Indian roads For people who want to take control on the road
Strength Oldest motorcycle brand in the world
Excellent branding and positioning
High performance and comfort
Used on a large scale for military purposes because of
its sturdiness
Strong brand name
Excellent distribution
Good performance
Comfortable, safe, stylish
Weakness Weight of the motor cycle can be an issue for few
customers.
Mileage of high cc bikes is an issue
Comparatively smaller market for cruiser
bikes
High price
Opportunity Tap the urban market
More brand visibility
Expansion in rural and tier-2 cities
Cost management thus reducing the price of
the bike
Developmental changes thus reducing bike's
weight
Threats Threat from other competitors New entrants
Competitors
Low cost bikes
Competitors Avenger
Harley Davidson
Royal Enfield
Harley Davidson
18. Positioning – Comparison ..contd.
IIMC SMP09 – Motorcycle Team 18
• Competitor strength grid of major players
Description Hero Bajaj Honda Yamaha Suzuki
Brand Recognition
Price
Distribution Channel STRONG
Availability of service centres ABOVE AVERAGE
Sporty Look AVERAGE
Warranty LESS THAN AVERAGE
Re-sale Value WEAK
India market Sales
19. Advertising and Promotion
• Royal Enfield
– power and royalty
– unique thump sound
– Flagship product :Bullet
– promotes cult culture through social
networking over net
– organizes leisure and adventure trips
IIMC SMP09 – Motorcycle Team 19
20. Advertising and Promotion ..contd.
• Bajaj
– Switch from Scooter to Motorcycle
– Definitely Male campaign - Pulsar
– Feel like God : Cruiser segment
– Mileage campaign
– Easy financing options
– “Humara Bajaj” -> “Inspiring Confidence”
-> ”Distinctly Ahead”
IIMC SMP09 – Motorcycle Team 20
21. Advertising and Promotion ..contd.
• Hero
– Flagship product : Splendor
– New modern logo
– Communicate R&D focus
– Stylish in upcoming products
– “Desh ki dhadkan” to “Hum mein hai
Hero”
IIMC SMP09 – Motorcycle Team 21
22. Advertising and Promotion ..contd.
• Mahindra
– Entering motorcycle market
– Communicating focus on
R&D
– Create sub-segments
• targeting specific customer
experiences
IIMC SMP09 – Motorcycle Team 22
23. Advertising and Promotion ..contd.
• Honda
– marketing itself as an Indian
company
– “Sach kar denge sapne”
Indian translation of “The
power of dreams”
– targeting mass section
– strengthening network and
dealership outlets
– Sports segment
• racing enthusiasts
• “Taste First Blood” campaign
• CBR club
IIMC SMP09 – Motorcycle Team 23
24. Advertising and Promotion ..contd.
• Harley Davidson
– Currently targeting customers wanting Intl. products
– Promoting typical US cruiser attitude
• Don’t care attitude (Screw it, lets ride)
– Planning custom products by 2014 for Indian market
IIMC SMP09 – Motorcycle Team 24
25. Marketing Strategies
• Bajaj:
– Brave steps taken to move from Scooter to Motorcycle
market
– Switch customers from standard to deluxe segments
– credibility through integrity
– providing better value for consumer’s money
– dependable product and service
• TVS Motors:
– stronghold in low standard segment
– product specific to geographic division
– dirt bike rally, MRF super cross championship rally
– Brand ambassador like Virat Kohli and MS Dhoni
IIMC SMP09 – Motorcycle Team 25