Life without 'Bajaj'

Rebranding is a difficult thing to do correctly, especially if you happen

to be Bajaj Auto. Why, then, is the company taking such a drastic step?
Bajaj Auto wants to force a change in direction to once again steal a
lead on the competition. How?

To start with, by dropping the family name from its communication. One can only
imagine the behind-the-scenes deliberations at Bajaj Auto headquarters
preceding the decision, but it is one that has provoked more than a few raised
eyebrows.

Why? Because it is Bajaj Auto. A brand built on the Bajaj family name.

Indeed, the name 'Bajaj' has been an inextricable part of all Bajaj Auto
communication over the decades. In 2001 Bajaj Auto introduced a refreshed
version of the famed 'Hamara Bajaj' advertising whose earlier version had forged
an emotional connect with the 'average' Indian and had firmly established its
agency Lowe Lintas as a 'creative' powerhouse.

The ad campaign, where one could see the entire range of new generation Bajaj
models against the backdrop of new age consumers blending perfectly with
Indian tradition and values, was again hailed as one of the agency's finest.
With the tag line, 'Badal rahein hain hum yahan', it not only showcased the
changes Bajaj Auto was making within the company but also showed the
transformation that the two-wheeler industry was set to go through.

This was also the time when consumers were beginning to favour motorcycles of
rival Hero Honda known for their versatility and fuel-efficiency, ignoring the Bajaj
Chetak, an iconic geared scooter, a champion in the 1980s.

Riding piggyback on the Bajaj brand, the Pune-based company, which is India's
second largest bike making firm, launched a slew of two-wheelers including
motorcycles and gearless scooters over the next few years.

A decade on, Rajiv Bajaj, the enthusiastic mechanical engineer and managing
director of Bajaj Auto, has envisaged a brighter future for the company, which he
believes can be achieved only if the family name is dropped from all forms of
communication.

Going forward the company will do away with the 'Bajaj' brand completely,
paving way for branding by models in its stable. At present, two models
dominate its portfolio -- Pulsar, launched in 2001, and Discover, launched in 2004
-- that have several variants at different

According to Bajaj, it is essential for a company like Bajaj Auto to separate its
name from its models to ensure greater acceptability not just locally but in
overseas markets such as Europe and the US.
Rajiv Bajaj says, "Today if you talk to people or go on Google they say that they
wish to buy a 'Hero Honda' but when it comes to Bajaj the buyer will say that he
wishes to buy a 'Pulsar' or 'Discover'; he won't say I want to buy a 'Bajaj'. This
tells me we have succeeded in separating and specialising (in branding)".

Tried and tested

By putting the product brand before the company brand, Bajaj is treading the
path chosen by consumer goods giants like Apple Inc, Hindustan Unilever, Kraft
Foods Inc, among several others.

The marketing success of international automotive companies like Germany's

Volkswagen or Japan's Toyota Motor Corporation that have several brands
operating as independent entities, has also attracted Bajaj. He feels that both
Pulsar and Discover are well established in the domestic market with a loyal
customer base and no longer need the support of an umbrella brand like Bajaj
Auto.

Analysts say this strategy may prove favourable for a company that has greater
recall for its products built on their brand value rather than the equity of the
company which manufactures them.

Hero Honda, for instance, thrived on the success of the Splendor brand created
more than a decade ago. More products were launched by the Delhi-based
company and the current market leader riding on the success of Splendor and its
derivatives over time.
"The success of Splendor and later Passion proved the tipping point for Hero
Honda. Both the models were promoted as fuel-efficient bikes which, in turn,
strengthened the Hero Honda brand. The company was thus able to venture into
newer segments later ," says an analyst from a Mumbai-based brokerage firm.

As far as Bajaj Auto is concerned, the two models, Pulsar and Discover, constitute
70 per cent of its total two-wheeler sales. Pulsar is positioned as a performance-
oriented motorcycle serving mostly the younger buyers (referred internally as
Krishna at Bajaj), who preferred a bit of style and zing in their vehicle of choice.

Discover, meanwhile, is promoted as a fuel-efficient bike and is targeted at the

Splendor segment. This category of buyers (known internally as Rama) are often
those who look for high mileage, lower maintenance costs and other add-on
utilities in a bike, which is often their first.

Significant others

Bajaj Auto has two other brands in its portfolio -- Platina and Avenger -- but the
intention is to focus more on the two volume generating models, according to
Bajaj Auto officials.

"We produce the Platina and Avenger since there is a sustainable demand for
them. Our focus, however, will remain on the Pulsar and Discover. We do not
intend to add any more brands to the portfolio," adds Bajaj.

While India remains the largest two-wheeler market in the world, manufacturers
here don't go for premium pricing with most motorcycles and scooters are in the
affordable range with small engines.
The international markets will be the mainstay of the Bajaj strategy with the
managing director going on record to state that he wants his company to
become the largest two-wheeler manufacturer in the world with a significant
share of the global market.

"The reason why Bajaj decided to focus on motorcycles is that we want to be a

global player. We have no choice but to compete with global competition not
only in our market but overseas market as well -- from Chinese at the bottom to
the Japanese in the middle to the European at the top," adds Bajaj.

Bajaj intends to break into the league of European and Japanese companies like
BMW, Piaggio (Aprilia), Ducati, Triumph, Honda, Yamaha and Suzuki with KTM
Power Sports, Kawasaki and Bajaj itself.

For this too, the company believes, it will have to separate its brand from its
products. KTM, the Austria-based auto company, where Bajaj Auto holds 38 per
cent (through a subsidiary) and intends to have management control later, will
play a crucial part in Bajaj's global expansion strategy.

KTM will continue to have independent branding. Bajaj does not plan to lend its
own brand to the Austrian bike maker, which in Europe enjoys a very distinct
positioning.

Small beginning

Bajaj Auto has taken a few steps in the direction of doing away with the
company's branding on its product as the volume models no longer carry the
Bajaj name. It will soon undertake a similar rebranding exercise throughout its
massive sales and service outlets. The company will put its distribution set up
through a complete overhaul and rebrand all consumer touch points, such as
showrooms and service centres, on the lines of brands Pulsar and Discover.

Fitch, an international retail design agency which has also worked with entities
such as the Nokia, HSBC, Coca-Cola, Tata Docomo to name a few, will help in
upgrading the quality of Bajaj showrooms across the country.

The final blueprint of the new marketing plan for its 600-odd showrooms and
1,100 service outlets is in the works and should be ready by March or April this
year. Dealers will be required to spend around Rs 1.75 lakh to upgrade their
showrooms and service centres. A model dealership based on the new plan will
be opened in some markets where existing dealers can experience the changes
before they invest to employ a similar transformation.

This will collectively cost around Rs 21 crore for its dealers the strength of which
will be 600 this year in addition to 1,100 service centres. The upgradation
programme will also encompass the next generation of motorcycles comprising
KTM, Kawasaki and Bajaj models that would be launched later this year.

Source: Business Standard