A Study on 4p S of Motor Cycle Industry in India

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MARKETING – II

A STUDY ON THE 4P’S OF THE
MOTOR CYCLE INDUSTRY

Submitted By,

Ankit Jain (25063) Deepak Chordia (25069) Karthik P (25080) Ram chakravarthy S (25094) Vineet Goenka (25115) Executive Summary

Marketing strategies employed by a growing industry are usually strikingly different than that of a mature industry. Quite intriguing will be the marketing strategies when the industry is both mature and also growing and expanding rapidly. Motor Cycles industry in India is quite in a phase of rapid expansion while at the same time has existed as long as 55 years to be mature enough. The report tries to identify the Segmentation, Targeting, Positioning, and the four P’s in this industry by studying varied industry practices, constituent company characteristics, and their strategies for distribution, communication and promotions.

Introduction

Today, when we ask any youngster about his desire, the first thing that comes out of his mouth is a bike. Bikes or generally 2 wheelers has come a long way from the days of Enfield and Rajdooth’s dominating the market till today with pulsar and Karizma racing in the same streets. The perception and the positioning of the industry might have changed but the basic desire remained the same all through the years. The fundamental needs of transport is always catered but recent trends forced to shape the vehicle with new value additions like comfort, disc brakes and so on.

We begin our discussion with a brief introduction on the history of the Indian 2 wheeler industry from its origin, various pitfalls and the different innovations in order. India is the second largest producer and manufacturer of two-wheelers in the world. It stands next only to Japan and China in terms of the number of two-wheelers produced and domestic sales respectively. Indian two-wheeler industry has got spectacular growth in the last few years. Indian two-wheeler industry had a small beginning in the early 50's. The Automobile Products of India (API) started manufacturing scooters in the country.

Bikes are a major segment of Indian 2 wheeler industry, the other two being scooters and mopeds. Indian companies are among the largest two-wheeler manufacturers in the world. In the initial stages, the scooter segment was dominated by API; it was later overtaken by Bajaj Auto. The motorcycle segment was initially dominated by Enfield 350cc bikes and Escorts 175cc bike. The two-wheeler market was opened to foreign competition in the mid-80s. And the then market leaders - Escorts and Enfield - were caught unaware by the onslaught of the 100cc bikes of the four Indo-Japanese joint ventures. With the availability of fuel efficient low power bikes, demand swelled, resulting in Hero Honda - then the only producer of four stroke bikes (100cc category), gaining a top slot.

The first Japanese motorcycles were introduced in the early eighties. TVS Suzuki and Hero Honda brought in the first two-stroke and four-stroke engine motorcycles respectively. These two players initially started with assembly of CKD kits, and later on progressed to indigenous manufacturing. In the 90s the major growth for motorcycle segment was brought in by Japanese motorcycles, which grew at a rate of nearly 25% CAGR in the last five years. The industry had a smooth ride in the 50s, 60s and 70s when the Government prohibited new entries and strictly controlled capacity expansion. The industry saw a sudden growth in the 80s. The industry witnessed a steady growth of 14% leading to a peak volume of 1.9mn vehicles in 1990. In 1990, the entire automobile industry saw a drastic fall in demand. This resulted in a decline of 15% in 1991 and 8% in 1992...
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