Bikes may not sport Bajaj tag in future – Economic Times

14 Mar 2015 | Author: | Comments Off on Bikes may not sport Bajaj tag in future – Economic Times

Bikes may not sport Bajaj tag in future

( New Bajaj Pulsar 135-cc bike New Bajaj Pulsar 220 Superbikes on Indian roads Harley-Davidson )

NEW DELHI: Motorcycle maker Bajaj Auto is turning on its head its sales strategy to remodel itself as a garage of independent brands, a la Hindustan Unilever, its most radical restructuring exercise since the decision to exit scooters.

The company will distance itself from the parent brand and focus on just four motorcycle brands—Boxer, Discover, Pulsar and KTM—as well as the rear-engine three-wheeler brand, phasing out the rest, said Bajaj Auto managing director Rajiv Bajaj.

The Bajaj brand is very diffused, covering everything from heaters and hair oil to insurance and financial services. Correcting that problem is the biggest opportunity for the company, said Mr Bajaj.

Bajaj has already stopped making bikes such as the XCD 125 and 135, Wind and Caliber. Others like the CT100 will be made for some export markets, but Mr Bajaj said these models will migrate to the Boxer brand vertical in a year.

We have to be clear about what our brand stands for. A sporty Pulsar and the humble auto rickshaw are as different as chalk and cheese.

The company has no plans to wind down the entry-level Platina, but there will be no more investments. As the market evolves, we will figure out how to transition the Platina to the Discover, he said. We said to ourselves we must have a strong differentiator in the marketplace so the consumer will buy us even when he has a choice of buying a rival (Japanese) brand.

Bajaj Wind 125

It can’t be cost, quality or production levers, so it has to be a brand lever as that would be the most potent level at which to differentiate oneself—at the level of the business model itself.

The five-brand focus will realign the entire organisation and every operation from marketing and sales to RD, accounts, finance, advertising, HR, production and distribution along these verticals. It could lead to the company dropping the Bajaj brand eventually. In a brand-centred company, the brand strategy must manage all decisions, including styling, performance, sourcing, positioning, and pricing, said Mr Bajaj.

Teams will be allocated to the brands to make them verticals.

The decision means that operating margin expectations from a Boxer will be different from a KTM product and allocation of funds will alter accordingly. Similarly, all products made by the company will come under the five categories.

The company’s new game plan also explains Mr Bajaj’s decision against placing the Bajaj badge on the ultra-low-cost car being jointly developed with Nissan and Renault. Extending our existing brand name to that product would have been contra to our strategy, he said, adding that the ultra-low-cost car doesn’t fit into any of the five brands. Bajaj may jointly own the car’s brand name, though.

Bajaj Wind 125
Bajaj Wind 125
Bajaj Wind 125
Bajaj Wind 125

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