A Landmark Shift in Bajaj's Advertising???

vasudeva · 27th July 2009, 11:42

I have been reading India Today for the last 30 years (perhaps since it was launched). Have been noticing Bajaj ad on the back cover for as long as I remember.

However, recently, I did notice a Honda ad on the back cover with Bajaj no longer advertising on the back page.

What has happened???.

A little background: From a leadership position till the 1990s, Bajaj's market share in two wheelers (2Ws) has slid to 17% in 2008-09. Although it is 2nd, it trails the market leader-Hero Honda-by a mile, and could soon become 3rd. hero Honda has a 49% share. Bajaj is virtually non-existent in the scooter segment (remember Bajaj scooters).

In motorcycles too, its share has declined from 28% in 2002-03 to 15.5% in 2008-09. Significantly, after a period of decline, the 2w segment has grown in 2009. However, Bajaj continues to post declines. For example, in Apr-june 2009, while 2w sales increased 14.5%, Bajaj's sales declined 15.2%. In fact, if you analyse the last 2 years trend, you will notice that Bajaj's sales have been declining constantly over the last few years.

gpa · 27th July 2009, 11:52

Vasudeva,

An interesting thread. I have been a reader of India Today as well for as long as I can remember and have noticed their ads decline in terms of frequency.

What is also interesting to note is that they have made a sugre in terms of TVCs in the recent past. Remember the blitzkrieg of ads on the Pulsar when launched a few years ago and also now on the new Pulsar 220?

I think they have shifted focus from print to television, although I can remember seeing a few Pulsar ads in auto mags in the recent past.

As for the Bajaj Scooters, I have vivid memories of the jingle, "humara Bajaj". Correct me if I'm wrong, but I don't think Bajaj still manufactures those scooters anymore?

Cheers,
gpa

vasudeva · 27th July 2009, 12:33

Bajaj consciously shifted from scooters to motorcycles in the early-2000s correctly forecasting a long-term growth in motorcycle segment. As a result, their scooter sales in India declined from 4.63 lakh in 2001-02 to around 9,700 in 2008-09. This is entirely in the 75-125 cc segment.

They got one part right, about motorcycle becoming the desired 2W. However, they have been hit hard by two factors:
1. sharp decline in their motorcycle sales from a peak of 2.08 million in 2006-07 to 1.28 million in 2008-09. Over the same period, the overall domestic sales declined from 6.55 million to 5.84 million. Motorcycle have become preferred, but from 2006-07, extremely tight credit and lack of financing has forced many consumers to go for lower priced scooters. Which brings to the second point.
2. As Bajaj exited scooters, scooter sales did remain stagnant till 2005-06. However, since then, they have increased from 0.94 million in 2006-07 to 1.15 million in 2008-09.

So Bajaj
1. reduced its presence in a segment in which (a) it was the leader (b) which increased in sales during last three years.
2. increased its marketing effort in a declining segment, and a segment in which it has lost market share to Honda.

Some innovative way to destroy a brand.

Ajaybiz · 27th July 2009, 13:10

Offtopic, Last year Bajaj announced that they are quiting 100 CC segment and setting a industry benchmark of 125cc what happen to that?As again saw in news that they are launching some TDSI 100 cc.

indian21r · 27th July 2009, 13:23

One of the primary reasons for the fall in absolute numbers is the fact that Bajaj does not have a stong brand in 100cc-125 cc Bikes. They keep launching bikes with new names destroying what they have built like 4s, caliber, caliber 115, Platina ,wind, discovery ,Ct100, etc. This has affectd the resale market as well. Too many prodcuts of same type and too small product life.

After the launch of Pulsar they decided to focus more on the high Margin bikes read 150cc+
And Pulsar of 4 varieties is again too much brand extension. new and better products from competitors is a big blow. In addition they were hit big time when the Zero percent interest regime went away.

After Bajaj Chetak they never had a strong scooter. And they killed Chetak with their own hands. Never giving a transition opportunity from geared to gearless segment.

Finally the lower quality of service fron Bajaj

wanderluster · 27th July 2009, 13:28

Good post. In fact i had heard that Bajaj had blocked the back page for years and had paid a premium to the publication to do that. This was a very prestigious (and expensive) space for advertisers - though in light of the numerous publications in the market today, i don't know if this still holds that prestige. Anyhow, this is big step over by HH. I guess lower sales mean lower marketing budgets.

benbsb29 · 27th July 2009, 13:35

Quote:

Originally Posted by indian21r

One of the primary reasons for the fall in absolute numbers is the fact that Bajaj does not have a stong brand in 100cc-125 cc Bikes. They keep launching bikes with new names destroying what they have built like 4s, caliber, caliber 115, Platina ,wind, discovery ,Ct100, etc. This has affectd the resale market as well. Too many prodcuts of same type and too small product life.

I would attribute the discontinuation of older models and names on a regular and frequent basis which led to erosion of customer confidence in this segment. Whatever happened to all those who went and bought their older models example the Wind, which was promoted very aggressively? As far as i see, customers hold on to a bike for much longer periods, and would expect to have availability of spares as a given.

In Bajaj's case, atleast in this segment, they have kept replacing models like there's no tomorrow and if i owned a Wind or a Caliber, i would be highly disgruntled.

Looking at things the other way, HH has been known to retain their models with minimal modifications for ages, thereby retaining resale value, and also customer confidence.

Question is, do i always want to remain in the stone age? No, but i would expect the older customers to be always accounted for when the company progresses.

WasavaTyres · 27th July 2009, 14:29

And kudos to the guys at Percept advertising to come up with the punchline "India Today rides on hero Honda"

vasudeva · 27th July 2009, 14:36

If I remember correctly, Rahul Bajaj was one of the main opponents of economic liberalisation. In the mid-1990s, Indian industries were screaming and lobbying against foreign competition, which they claimed would result in job losses. Actually, it threatened their monopoly profits and shoddy products. If I can recollect, Rahul Bajaj was also in the Bombay Club, which opposed liberalisation till there was a level playing field for Indians and foreigners.

indian21r · 28th July 2009, 18:05

Quote:

Originally Posted by vasudeva

If I remember correctly, Rahul Bajaj was one of the main opponents of economic liberalisation. ... If I can recollect, Rahul Bajaj was also in the Bombay Club, which opposed liberalisation till there was a level playing field for Indians and foreigners.

Yeah true he was one of the most vocal opponents of liberlization.

hollywoodhogan · 29th July 2009, 00:22

Quote:

Originally Posted by indian21r

Yeah true he was one of the most vocal opponents of liberlization.

yeah, and isn't he the one who famously quoted in the 80s, "why do i need a marketing department? all i need is a manufacturing department"

lol........ guess he needs one NOW.

ac 427 · 29th July 2009, 14:09

Bajaj Auto a company that i truly admire. Under Rahul Bajaj they have ventured into newer and newer territories.

My 2 bits on this one, Bajaj exited the scooter market to work on the bike segment. they realized they cant beat HH at their own game, i.e the commuter bikes and hence they started investing heavily in 135 cc bikes, which acc to them and many a few was the new 100 cc, but the 100 cc segment stuck on and Bajaj had to enter back in the 100 cc segment, but while all the shift was happenign, HH took lead.

At a point whwen the pulsar was launch, bajaj became so strong it threatened HH No.1 position, but the Indian consumer were so stuck to the 100 cc segment Bajajs move did not capitalize.

Anyways IMHO Bajaj is the most brand / marketing savy 2 wheeler in India, their ads and their communication rocks.

cheers,
ac

jaganm · 31st July 2009, 07:05

Bajaj has completely screwed up its marketing message in so many different ways. Firstly, by having too many models. Just look at the Pulsar, the 150, 180,200,220,220FI. There is no real differentiation between them. To add insult to injury, the features that made them somewhat exclusive have migrated down to the lower end bikes (e.g. digital speedo). The other problem is that the Pulsar is just too common and has completely lost its wow factor. People want to stand out and today, they go for a FZ16 or Apache RTR rather than a Pulsar.

27th July 2009, 11:42	#1
vasudeva Senior - BHPian Join Date: Mar 2007 Location: Delhi Posts: 2,223 Thanked: 212 Times	A Landmark Shift in Bajaj's Advertising??? I have been reading India Today for the last 30 years (perhaps since it was launched). Have been noticing Bajaj ad on the back cover for as long as I remember. However, recently, I did notice a Honda ad on the back cover with Bajaj no longer advertising on the back page. What has happened???. A little background: From a leadership position till the 1990s, Bajaj's market share in two wheelers (2Ws) has slid to 17% in 2008-09. Although it is 2nd, it trails the market leader-Hero Honda-by a mile, and could soon become 3rd. hero Honda has a 49% share. Bajaj is virtually non-existent in the scooter segment (remember Bajaj scooters). In motorcycles too, its share has declined from 28% in 2002-03 to 15.5% in 2008-09. Significantly, after a period of decline, the 2w segment has grown in 2009. However, Bajaj continues to post declines. For example, in Apr-june 2009, while 2w sales increased 14.5%, Bajaj's sales declined 15.2%. In fact, if you analyse the last 2 years trend, you will notice that Bajaj's sales have been declining constantly over the last few years.
	() Thanks

27th July 2009, 11:52	#2
gpa Senior - BHPian Join Date: Aug 2008 Location: Bangalore Posts: 1,789 Thanked: 342 Times	Vasudeva, An interesting thread. I have been a reader of India Today as well for as long as I can remember and have noticed their ads decline in terms of frequency. What is also interesting to note is that they have made a sugre in terms of TVCs in the recent past. Remember the blitzkrieg of ads on the Pulsar when launched a few years ago and also now on the new Pulsar 220? I think they have shifted focus from print to television, although I can remember seeing a few Pulsar ads in auto mags in the recent past. As for the Bajaj Scooters, I have vivid memories of the jingle, "humara Bajaj". Correct me if I'm wrong, but I don't think Bajaj still manufactures those scooters anymore? Cheers, gpa
	() Thanks

27th July 2009, 12:33	#3
vasudeva Senior - BHPian Join Date: Mar 2007 Location: Delhi Posts: 2,223 Thanked: 212 Times	Bajaj consciously shifted from scooters to motorcycles in the early-2000s correctly forecasting a long-term growth in motorcycle segment. As a result, their scooter sales in India declined from 4.63 lakh in 2001-02 to around 9,700 in 2008-09. This is entirely in the 75-125 cc segment. They got one part right, about motorcycle becoming the desired 2W. However, they have been hit hard by two factors: 1. sharp decline in their motorcycle sales from a peak of 2.08 million in 2006-07 to 1.28 million in 2008-09. Over the same period, the overall domestic sales declined from 6.55 million to 5.84 million. Motorcycle have become preferred, but from 2006-07, extremely tight credit and lack of financing has forced many consumers to go for lower priced scooters. Which brings to the second point. 2. As Bajaj exited scooters, scooter sales did remain stagnant till 2005-06. However, since then, they have increased from 0.94 million in 2006-07 to 1.15 million in 2008-09. So Bajaj 1. reduced its presence in a segment in which (a) it was the leader (b) which increased in sales during last three years. 2. increased its marketing effort in a declining segment, and a segment in which it has lost market share to Honda. Some innovative way to destroy a brand.
	() Thanks

27th July 2009, 13:10	#4
Ajaybiz BANNED Join Date: Nov 2004 Location: Bangalore Posts: 1,441 Thanked: 321 Times View My Garage	Offtopic, Last year Bajaj announced that they are quiting 100 CC segment and setting a industry benchmark of 125cc what happen to that?As again saw in news that they are launching some TDSI 100 cc.
	() Thanks

27th July 2009, 13:23	#5
indian21r BHPian Join Date: Mar 2006 Location: Hyderabad Posts: 971 Thanked: 814 Times	One of the primary reasons for the fall in absolute numbers is the fact that Bajaj does not have a stong brand in 100cc-125 cc Bikes. They keep launching bikes with new names destroying what they have built like 4s, caliber, caliber 115, Platina ,wind, discovery ,Ct100, etc. This has affectd the resale market as well. Too many prodcuts of same type and too small product life. After the launch of Pulsar they decided to focus more on the high Margin bikes read 150cc+ And Pulsar of 4 varieties is again too much brand extension. new and better products from competitors is a big blow. In addition they were hit big time when the Zero percent interest regime went away. After Bajaj Chetak they never had a strong scooter. And they killed Chetak with their own hands. Never giving a transition opportunity from geared to gearless segment. Finally the lower quality of service fron Bajaj
	() Thanks

27th July 2009, 13:28	#6
wanderluster BHPian Join Date: Sep 2007 Location: Gurgaon Posts: 105 Thanked: 20 Times	Good post. In fact i had heard that Bajaj had blocked the back page for years and had paid a premium to the publication to do that. This was a very prestigious (and expensive) space for advertisers - though in light of the numerous publications in the market today, i don't know if this still holds that prestige. Anyhow, this is big step over by HH. I guess lower sales mean lower marketing budgets.
	() Thanks

27th July 2009, 14:29	#8
WasavaTyres BHPian Join Date: Aug 2006 Location: Indore Posts: 819 Thanked: 456 Times View My Garage	And kudos to the guys at Percept advertising to come up with the punchline "India Today rides on hero Honda"
	() Thanks

27th July 2009, 14:36	#9
vasudeva Senior - BHPian Join Date: Mar 2007 Location: Delhi Posts: 2,223 Thanked: 212 Times	If I remember correctly, Rahul Bajaj was one of the main opponents of economic liberalisation. In the mid-1990s, Indian industries were screaming and lobbying against foreign competition, which they claimed would result in job losses. Actually, it threatened their monopoly profits and shoddy products. If I can recollect, Rahul Bajaj was also in the Bombay Club, which opposed liberalisation till there was a level playing field for Indians and foreigners.
	() Thanks

29th July 2009, 14:09	#12
ac 427 Senior - BHPian Join Date: Oct 2005 Location: Mumbai Posts: 1,413 Thanked: 285 Times View My Garage Infractions: 0/1 (5)	Bajaj Auto a company that i truly admire. Under Rahul Bajaj they have ventured into newer and newer territories. My 2 bits on this one, Bajaj exited the scooter market to work on the bike segment. they realized they cant beat HH at their own game, i.e the commuter bikes and hence they started investing heavily in 135 cc bikes, which acc to them and many a few was the new 100 cc, but the 100 cc segment stuck on and Bajaj had to enter back in the 100 cc segment, but while all the shift was happenign, HH took lead. At a point whwen the pulsar was launch, bajaj became so strong it threatened HH No.1 position, but the Indian consumer were so stuck to the 100 cc segment Bajajs move did not capitalize. Anyways IMHO Bajaj is the most brand / marketing savy 2 wheeler in India, their ads and their communication rocks. cheers, ac
	() Thanks

31st July 2009, 07:05	#13
jaganm BHPian Join Date: May 2007 Location: Bangalore Posts: 390 Thanked: 460 Times	Bajaj has completely screwed up its marketing message in so many different ways. Firstly, by having too many models. Just look at the Pulsar, the 150, 180,200,220,220FI. There is no real differentiation between them. To add insult to injury, the features that made them somewhat exclusive have migrated down to the lower end bikes (e.g. digital speedo). The other problem is that the Pulsar is just too common and has completely lost its wow factor. People want to stand out and today, they go for a FZ16 or Apache RTR rather than a Pulsar.
	() Thanks