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Hero Honda is not the only ‘nail’ waiting to puncture Bajaj’s tyres... there are more; one being Yamaha, who merrily eroded Bajaj’s premium market pie with successful launches like R15 and FZ16 (a segment where Yamaha’s R15 and FZ16 competes against Bajaj’s Pulsar 220 & DTS-Si). With Hero Honda also planning a 350cc launch, the Karizma-Fi soon, this competition will only get tougher.

To up its financial performance, the company is also planning a comeback in the scooter market, as Sridhar adds, “We will be launching a gearless scooter with a 100-150cc capacity by 2010...” Who knows, Bajaj may find many takers for its scooters when the economy starts accelerating again, in 2009. Well, the future is yet to be seen. For now though, ‘hope’ and ‘confidence’ are not words to be missed in the Bajaj camp, as Sridhar claims, “We will perform way better than the industry in 2009!”

Yes, the launches are just symbolic of Bajaj’s short-term aggression; short term because TVS had also launched 7 new bikes with the same aggression at the end of 2007 under similar (sales) circumstances, but unfortunately for the company it didn’t really help shield off the recessionary effects [and TVS ended up recording a fall of 12.85% in monthly sales (y-o-y) during December 2008]. For Bajaj, the strategy to ensure real long-term sustainability would only be achieved enroute a strategy of distinctive segment branding, and therefore separating first, its executive and luxury segements bikes from the herd of sub-125cc vehicles available in the market, and secondly, branding its luxury bikes uniquely instead of overkilling the Pulsar brand name) are must do’s for Bajaj.

New launches are good, but for Bajaj, a strong branding strategy should be top on priority. New launches, lowered advertising rates and lowered advertising frequency by competitors (thanks to the slowdown)... et al, the time is just perfect to create a new premium brand for Bajaj... So what’s the hitch, Mr. Bajaj? Just advertise!

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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