Hamaara Bajaj

BAJAJ CHETAK

GROUP MEMBERS: NIPUL AGARWAL NIPUN CHAWLA PAYAL MARWAHA PRANOTI PANDEY PIYUSH MISHRA

BAJAJ GROUP • The Bajaj group was founded in 1926 by Jamnalal Bajaj. • In 1945, Kamalnayan Bajaj, Jamnalal's son, set up Bachraj Trading Corporation Ltd. (BTCL), a trading company, to import and sell two- and threewheelers. This business continued till 1959. • In 1959, the company secured a license from the Government of India (GoI) to manufacture two- and three-wheelers. • In 1960, BTCL was renamed Bajaj Auto Ltd. (BAL) and the company went public. The same year, it entered into a technical collaboration with Piaggio for the manufacture of scooters. • In the mid-1940s, BAL started as an importer of twoand three-wheelers.

• With its collaboration with Piaggio coming to an end in the early 1970s, BAL started manufacturing scooters under the Bajaj brand. • In the early 1960s, BAL, in collaboration with Piaggio, started manufacturing Vespa brand scooters at its plant near Pune, Maharashtra.

SEGMENTS IN TWO WHEELER MARKET: LATE 90’s

SCOOTER MOTOR CYCLES MOPED

BAJAJ CHETAK: A BRIEF INTRODUCTION • BAJAJ CHETAK was a popular Indian made motor scooter produced by the Bajaj auto company. •Originally based on Italian Vespa, Chetak was the only choice for millions of Indian families as an affordable way of transport for decades. •The Chetak, a geared scooter, had reigned over the Indian two-wheeler market in the late 1970s to early 1990s and had come to occupy a near-iconic status. •The Chetak, BAL's first scooter model under the Bajaj brand, was introduced in 1972.

• In the 1970s and 1980s, scooters dominated the Indian two-wheeler market. • Most middle-class Indians preferred scooters because of their durability, low maintenance costs, and versatility, and the Bajaj Chetak name became synonymous with scooters. • At that time, the motorcycles available in India were heavier and not as fuel efficient as scooters. They were also costlier. • The brand which was named after the legendary stallion of the Rajput king Maharana Pratap, was known for the reliability and sturdiness.

• The brand thrived during the license raj with virtually no competition. • Bajaj Chetak had a huge brand equity . The brand had the persona of a " work horse". With reasonable price and the low maintenance cost made this product a huge hit among the middle class Indians.

DECLINE IN BAJAJ MARKET • In the late 1990s, the Indian two-wheeler market witnessed a shift in consumer preferences. • The popularity of geared scooters began to wane while that of motorcycles soared. • There were various reasons for the shift: 1. India was undergoing a demographic change, with the proportion of younger people in the population growing significantly. 2. The economy was growing, which increased the disposable incomes of the middle class. 3. Many newer models of motorcycles, with improved designs and modern technology had become available in the market.

While these changes were taking place in the market, the features of scooters, especially those of the Bajaj Chetak, remained essentially unchanged. •

The brand thrived during the license raj with virtually no competition.

• It was during 1990-91 that the brand began the journey to the end. •

Promoted along the base line " Hamara Bajaj", this was the Indian Family vehicle - a position now owned by Maruti 800.

• In January 2006, BAL announced that it had stopped production of the Chetak.

• The " Tilting the Chetak to the side for starting " was a common joke. • Scooters were BAL's main products, and when market preferences shifted to motorcycles, the company was faced with declining sales and revenues.

REASONS FOR DECLINE • The primary reason is that the Brand forgot the customers. •

Another case of Marketing Myopia. The company failed to understand the changing perception of the customers towards scooters.

• Rather than looking at the customers, the company focused on influencing Government to block the opening up of economy. • Bajaj never did anything with the product. For 40 years Chetak had the same look, same quality and style. • Bajaj never was serious about product development. The R&D spent for a long time was a miniscule 1%.

• The average cycle time for the new product development was 4-5 years compared to 2-3 years of Japanese competitors. •

There was nothing wrong with the Promotion. " Hamara Bajaj " and " No one can beat a Bajaj " were famous base lines.

• There was nothing wrong with distribution and the pricing was very reasonable. The major problem was in the first P : Product. • Bajaj never seriously looked at customer perception about Chetak. The product had serious problems like starting trouble and riding comfort.

• It was believed that the dramatic shift happened because players like BAL did not pay sufficient attention to design, R&D, and customer satisfaction. • The decline was directly related to neglect of this segment over mileage, contemporary technology, and non-stop excitement of launch of newer and newer models offered on the motorcycles platform. • The biggest drawback of Bajaj Chetak was its handling during heavy breaking.

• Shares of two wheeler manufacturers in industry sales from 2000- 2005.

COMPETITORS • The players like Vespa did not had much of success in this segment. •

Kinetic Honda managed to carve a niche with its gearless scooters.

• Another segment which was growing was the scooterette segment which was dominated by TVS scooty. • Consequently, by the early 2000s, motorcycle sales surpassed that of scooters and BAL lost its title of India's largest two-wheeler company to Hero Honda. • With the introduction and subsequent popularity of Honda Motorcycle and Scooter India (HMSI) scooters, especially the Activa, a gearless scooter, BAL lost its dominance over the Indian scooter market.

KINETIC ZOOM 1. 2 stroke- scooter. 2. maximum speed of 73 km/ hr. 3. fuel capacity of 7 litres. 4. works on electric start mechanism.

HONDA ACTIVA 1. 4 stroke- scooter. 2. maximum speed of 80 km/ hr. 3. fuel capacity of 6 litres. 4. works on electric start mechanism.

BAJAJ CHETAK: 1. 2 stroke- scooter. 2. maximum speed of 50 km/ hr. 3. fuel capacity of 6.5 litres. 4. works on kick start mechanism.

BAJAJ MARKETING MIX • PRICE 1. Bajaj Chetek's price was affordable. But the new motor cycles entering the two wheeler segment offered better technology & fuel efficiency than Bajaj Chetak at almost same price. PRODUCT 1. The company should look upon its R&D and improve the overall looks of Bajaj Chetak. 2. It should make efforts to change the quality & style of the scooter to suit the tastes & preferences of its customers. 3. The product had serious problems like starting trouble & riding comfort, which need to be eliminated.

• PROMOTION Bajaj Chetak should come out with various schemes & incentives.

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