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Bajaj auto limited company

Info: 2845 words (11 pages) Essay
Published: 1st Jan 2015 in Marketing

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Introduction

Bajaj auto limited company is the biggest two wheeler manufacturing company in India actually this Bajaj company has a poor technology when enter in to the market that’s why this company faced so many struggles form their business rivals, but company was invested huge amount of finance to get the success finally they made high volume products and became cheapest cost scoter manufacturing company in the world.

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Bajaj Company was established by jamnalal Bajaj in 1926 after that his son mr.kamalnayan Bajaj has taken reins of business in 1942 the now present chairman of this whole company mr.Rahul Bajaj is, he took all the responsibilitys of the company in his organisation, Bajaj company annual turnover gone up from 72million to 100.75 billions . in 2007 april 30 the company was incorporated as Bajaj aoto limited company(holding company)with the name of Bajaj investment and holding limited. In a same year this company received the certificate of commencement of business and organisation, Bajaj company is the second biggest motor cycle manufacturing limited company in India , smaller than Honda motor cycle limited company and this Bajaj company is in forth place in producing 2-3 wheeler company’s and this company research and development is well known .

Bajaj auto is dedicated to nation-building and causal to the strengthen and expansion of the weaker sections of culture. This is inheritance of the founder’s jamanalalji, kamalnayanji and ramkrishna Bajaj.

In 90`s two wheeler market had a major problem with recession in India almost all two wheeler companys lost more than 15 persons in their profits respectively. In a same year the way of demand was changed and instead of scooters, motorcycles became the fastest growing sector at the movement scooters was available in village areas only, because of lack of good transportation

Important dates in Bajaj Company:

Jamnalal Bajaj was established Bajaj Auto Company in -1926.

This Bajaj auto company got a license from the GOI in -1956

This company had been to public and joined with piaggio in -1960

Manufacturing scooters -1961

Manufacturing three wheelers-1962

Introducing to the market under the Bajaj brand in-1971

Bajaj auto limited company selling Bajaj chetak scooters -1972

Bajaj auto limited had been to joint ventures sector with Maharashtra development corporation -1975

Bajaj auto limited joined in technical partnership with Kawasaki -1986

Bajaj was launched famous ladies bike” sunny”-1990

Bajaj auto limited company introduced to the market a new bike Bajaj boxer-1997

Bajaj auto limited company introduced to the market producing Bajaj caliber in -1998

After 27 years company was introduced a gared scooters in the market called bravo

Introduced saffire(gear less scooter for ladies)in -2000

Pulsar was introduced in -2001

Bajaj auto limited company selected a new logo for their latest innovation in-2004

Again saffire was reintroduced in the market as a name of wave in-2005

Platina enter in to the two wheeler market in-2006

In a same year this company has achieved second place in world two wheeler market

Indian two wheeler market and Bajaj Company

Scooters demand increased here due to the lack of good transportation, that’s why consumers were more preferred to buy scooters .in 1960`s management relaxation to household companies.

Scooters and motorcycle sector in Bajaj auto limited company:

Scooter sector:

In 1982 lml came in to joint venture and working with piaggio to manufacture vespa.

In 1984 honda tied up with kinetic to produce new models and new technology like electronic starter and automatic gare system.

Motor cycle sector:

Many competitors like Honda , Suzuki, Yamaha enter in to joint venture with domestic company’s

Many international companies came with latest innovation and sufficient production system e.t.c.in India.

Declined product of Bajaj auto limited company:

Bajaj chetak:

Bajaj chetak was a famous family scooter in India, manufactured by Bajaj auto ltd. This is first scooter in Bajaj brand history , this vehicle was introduced in 1972 .this was the dream vehicle for lakhs of Indian middle class family’s to their daily transport and maintenance this vehicle plays a tremendous role in two wheeler marketing segment from 1970 to until 1990`s . this vehicle has getting popularity in brand equity. The scooter manufacturing, based on Italian scooter vespa.

Reason for the decline of Bajaj chetak:

Company manufacturing same type of vehicles with quality and style from the past 40years.

Bajaj company never ever concentrate on product development

Bajaj company has not pay attention on customer requirements

Lack of responsibility at decision, research and development and customer satisfaction

New motor cycles were enter in to the market

Young people population rapidly growing

Latest technology and design available in the market

Company manufacturing same type of vehicles with quality and style from the past 40years:

This vehicle was launched in 1972 in the market at the movement people were not having any proper communication with transport to go from one place to another place and their economic is also very low. That’s why they need vehicle with in short amount of money for their daily transportation. So when ever Bajaj auto limited company introduced this vehicle in the market, they got un-believable response from the customers in India and Bajaj auto limited company achieved high level of profit around 40 years. With the past results company doesn’t make any changes like in quality and in style until around 40years. So, finally consumer feels normal to buy this vehicle in the market because they had high economic growth in present scenario, they can buy another good vehicle with same price .we can find out Bajaj company idleness over here.

Lack of concentration on product development:

Here Bajaj auto limited company has no concentration on product development according to the customer nature in 1980, this vehicle was a status symbol in anywhere in India and it is like a gift in some wedding ceremony as well that`s why company thought they can get good sales in every year but consumer were think about latest technology which model was suitable to them and company never think about future technology. So finally this vehicle started to fail after 1985.

Lack of attention on customer requirements:

Generally any manufacturing company, they should have to fallow some rules and regulations according to the customer requirements and they are not thinking about customer needs especially all most all the customers had a problem with starter rod (kick rod) that was very difficult to start the vehicle by using the kick rod so company has to produce the vehicle with self starter and consumer had a problem with the weight of the vehicle especially at back side of the scooter. The weight of the engine was too high, and it is placed on one side of the vehicle, as a result there are many chances of accidents while on turnings and possible skids on soft roads.

Failure of R&D:

Research and development department of Bajaj Auto Ltd was not so efficient in the early 90’s. They mostly concentrated on the model and design, ignoring the circumstances which took place in that decade. Like gulf war, because of this war the fuel prices went high drastically where a normal person using a scooter couldn’t afford the price for just 45kms that is provided by Bajaj scooters. The minus points are poor averages, unbalanced ride, stiff gear-shifting, lacklustre braking and higher pollution levels. This model is not Y2K proof. As we know the substitutes will be at the corners looking for the chance, the bikes from Honda took the lead. Bajaj used to give a mileage of 40 – 45kms per litre and a Honda bike like Splender gives a mileage of 60-70kms per litre. This attracted the customers a lot and they started going for a bike instead of a scooters. The R&D concentrated more on design and model than mileage at particular time, this failure paid a lot and it took nearly 5 years for the company to release a 4stroke engine scooter in the market. By then the bike took control on the market.

New Generation:

In the mid 90’s a new generation of technology started and it has an incredible effect on youth. By the end of 90’s scooter has been elder’s ride more than any others. The youth mostly concentrated on bikes and the companies as well introduced more models and new technology which attracted the youth to an extent that everyone felt that scooter is for middle aged guys. This reduced the sales of scooter. Even at this stage the management and the research units couldn’t make any effort on providing the requirements of the customers to keep up their product. It took nearly 5 years for the company to bring its new product which is a long time in market to keep its existence.

Product Life Cycle:

Introduction:

The word Bajaj ruled the roads of India for more than 25 years. The brand which was launched in 1972 ruled the middle class life with a status of two wheelers. Chetak was an avoidable gift to the newly married couple in 70’s and 80’s. It used to have a waiting list on delivery for about 10 years. The brand was named after the legendary stallion of the Rajput king Maharana Pratap, was known for the reliability and sturdiness. The brand thrived during this period with virtually no competition or could be said monopoly.

Growth:

Bajaj chetak has huge brand equity. The brand has a persona of “work horse”. With a reasonable price affordable by the Indian middle class families. The low maintenance of the product made this product a big hit in the auto mobile industry. With the slogan of ‘hamara bajaj’ it has gone in to millions of families as a family vehicle. At the initial stage there was no substitute to the vehicle, though there are few it has overcome them with its low cost maintenance and affordable price with good mileage.

Maturity:

By the mid 80’s Bajaj has been a family vehicle a need to every family in daily needs. A personal vehicle with affordable price and low maintenance gave it a huge boost. For 40 yrs the model and design was the same but the sale or the demand was never down. This proves the monopoly business it has done in India. No matter what the design and model is the brand name Bajaj dominated the design and model. Even the customer had no objections about the model or the design as the brand name earned a lot of durable trust in customers its strong body, low maintenance and good mileage is what the customer attracted to.

Decline:

The initial reason is that the Brand neglected the customers, another case of Marketing Myopia. The company completely 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 did nothing with the product, for 40 years Chetak had the same look, same quality and style. During the mid nineties the company realised lately that the segment has shifted to motorcycles. Scooters were no longer the option. But did the company made a mistake in discarding the scooter segment? Looking at the way the share prices are going, the market thinks that Bajaj Auto made the right decision. But I think that they made a mistake in leaving the scooter segment completely. Contrary to expectation, the scooter segment has not died. Bajaj never seriously looked at customer perception about Chetak. The product had serious problems like starting trouble and riding comfort. The “Tilting the chetak to the side for starting” was a common joke. Did the company do anything for that? No!!!

Marketing Mix:

Price:

The price of Bajaj is so affordable by the middle class people of India. It was gaining the popularity of the motor bikes which led the downfall of the vehicle in market, not only the market but also the company.

Product:

Bajaj product gained the trust of millions of people that they did not think of the design and model for 40 yrs. The strong body and low maintenance with affordable price gave the best results for the company. And moreover till mid 90’s the roads of India where not so good, so only Bajaj was the best option for everyone from rural or urban. Bajaj never seriously looked at customer perception about Chetak. The product had serious problems like starting trouble and riding comfort.

Promotion:

In the initial stage of the product there was no much need of the promotions as the product ruled the roads and the mouth publicity played a crucial part. After once the product started to promote there was nothing that went wrong. ‘Hamara Bajaj’ and ‘No one can beat Bajaj’ where famous base lines.

Place:

The place the product launched was India, a place where there were no perfect roadways. With small roads and metal roads which used to be very risky to use big vehicles and travel. Scooter was the best option for everyone to use in any kind of roads. The strong body and low maintenance played its role here as well.

SWOT Analysis:

Strength:

Affordable price

Strong Body

Low Maintenance

Good mileage

Weakness:

Uncomfortable Drive

Starting Troubles

No Safety as the engine is setup to one side of the vehicle, so possibilities of accidents.

Opportunities:

After the decline of Bajaj Chetak for the existence of the company, it has moved its segment to motor cycles. This motor cycle segment is expected to grow at a considerable rate and this could be provided a good opportunity for Bajaj marketing shares. Introduction of Bajaj pulsar gave a boost to the company share in marketing its products.

Threats:

Bajaj Chetak ruled the roads of india for about 4 decades, it could be said that it has no threats for all those years. Though it had some from LML it was just minimal. After the company entered in to the motor cycle segment it has encountered many threats from many other substitutes like Honda, TVS, Yamaha, kinetic, etc; Struggling for the existence of the company it had tried its best to regain its historic glory of Bajaj scooter era.

Factors of Decline:

Economic factor:

IN mid 90’s there was a drastic change in the life of middle class people in India. By the time the motor cycle segment started to take control of the market. As the price of Bajaj was a little bit high by the time and the motorcycle companies tried to take control of the market, they tried to be close to the scooter price so that they can get to attract more customers from Bajaj scooter to motorcycle. At the same time the banks started to provide two wheeler loans, this increased the motor cycle sales in the market. One who was able to afford a scooter directly moved in to motor cycle as they were being given the two wheeler loans. This was the major economic factor for the decline of scooter segment.

Social factor:

There was a big change in the life of middle class people in India by mid 90’s. Motor Cycles dominated scooters a little high price than scooters showed status of living. Scooter was treated as elderly vehicle by the time and youth were more attracted to motor cycles than scooters. The major problem was that the person already used the vehicle for long term suggested the young to go for motor vehicles as most people who used scooters on long run used to face back pains. This increased the usage of motorcycles than scooters which influenced the sale of motorcycle and decline of scooters.

Technological Factors:

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For 40yrs of scooters segment there were no technological developments given to the customers. Motor vehicles introduced self start, disk break, hydraulic engine, and many more to attract the customers, this attracted more customers towards bikes, and the introduction of technology in engines as well has given best results for faster bikes and convenient drive even on long run. The technological factor was not even close in the scooter segment.

Environmental factor:

Coming to the environmental factors the 2stroke vehicles like scooters are more polluted compared to 4stroke. There used to be a lot of smoke and carbon dioxide released from scooters.

Marketing Plan:

 

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