PROJECT REPORT ON

BUSINESS STATEGY
A BRAND ANALYSIS OF ROYAL
ENFIELD

MASTER
IN
ADMINISTRATION

BUSINESS

2014-2015
Submitted by:to:Miss Simran Kapoor
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Submitted

MBA 3rd Sem

Asst Manager
CPU, KOTA

TABLE OF CONTENT

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Executive summary
Introduction
Product line
Dark Phase during 1990-2000
Strategies to be framed for outcome
Change in strategy after 2005
Communication and Distribution
Conclusion and Recommendation
Why we Love ROYAL ENFIELD

EXECUTIVE SUMMARY

The Research is aimed at the study of Royal Enfield Brand in

Indian Markets So far how they have performed and
suggestions for them to grab more market share and be
profitable. Every year, they have sold modest numbers but
despite low numbers, they continue to command a position of
respect and awe in the Indian motorcycle market. The
objective of the study was to study the different product
lines, marketing strategy and Brand Management of Royal
Enfield Bullets in Indian market.
1)Bullet riders are mostly Value-Expressive, with an
internal locus of control and a strong sense of
independence.
2)The company has been cashing in on the iconic status
it has and has done little to reinforce its image
amongst an exploding two-wheeler market.
3)The pricing of the motorcycle might also be looked
upon as conservative.
Royal Enfield has for a while now targeted the youth market
with lure of freedom. However, they have done little to
reinforce their position. Maybe advertising campaigns
targeted at the Value-expressive customer would enable the
brand to reap the benefits of its iconic position in a much
more productive way. Also, most users find it imperative for

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the company to improve its After Sales Service and

Spares availability.

INTRODUCTION
INDIAN AUTOMOBILE HISTORY
The automobile industry in India is the ninth largest in the
world with an annual production of over 2.3 million units in
2008. In 2009, India emerged as Asia's fourth largest
exporter of automobiles, behind Japan, South Korea and
Thailand.
The automobile industry in India is the ninth largest in the
world with an annual production of over 2.3 million units in
2008. In 2009, India emerged as Asia's fourth largest
exporter of automobiles, behind Japan, South Korea and
Thailand.
Since the last four to five years, the two wheelers segment
has driven the overall volume growth on account of the spurt
in the sales of motorcycles. However, lately the passenger
cars and commercial vehicles segment has also seen a good
growth due to high discounts, lower financing rates and a
pickup in industrial activity respectively. Major automobile
manufacturers in India include Maruti Udyog Ltd., General
Motors India, Ford India Ltd., Eicher Motors, Bajaj Auto,
Daewoo Motors India, Hero Honda Motors, Hindustan Motors,
Hyundai Motor India Ltd., Royal Enfield Motors, TVS Motors
and Swaraj Mazda Ltd. With the economy growing at 9% per
annum and increasing purchasing power there has been a
continuous increase in demand for automobiles. This, along
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with being the second largest populated country, makes the

automobile industry in India a very promising one.

INDIAN TWO WHEELER MARKET

Ever since the old Lambretta scooter was replaced with the
flurry of vibrant two wheeler models, Indian two wheeler
industry has seen a phenomenal change in the way they
perceive the Indian market. Two wheeler manufacturers are
now competing in an ever growing consumer market by
bringing out new products and features.
The country has now grown into the second largest producer
of two wheelers in the world. Currently there are around 10
two-wheeler manufacturers in the country, and they are
Bajaj, Hero, Hero Honda, Honda, Mahindra/Kinetic, Royal
Enfield, Suzuki, TVS, and Yamaha.
There have been various reasons behind this growth.
Because of poor public transport system, the citizens found
convenience in two wheelers. Added to this is the fact that
the average Indian still does not have the purchasing
capacity for a more expensive, four wheeler. The Indian two
wheeler industry can be divided into motorcycles, scooters
and mopeds. The consumer has changed his preference from
mopeds to scooters and then to motorcycles. The trends seen
in the past few years include females increasingly using twowheelers for their personal commutation and various two

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wheeler manufacturers designing vehicles specially to cater

to needs of this segment.
One of the earliest revolutions in this industry was Kinetics
introduction of the concept of electronic/self-start and
automatic gears which made two wheelers comfortable and
useable by women, when compared to old Bajaj Chetak
advertisements which showed middle aged females riding a
Bajaj Chetak scooter. A recent trend in the industry has been
electric vehicles, which mostly leverage on their ecofriendliness and low operating costs, but

is still not accepted well due to the lack of reputation of the

manufacturers and lack of trust on technology, which is still
being perceived in the nascent stages, especially battery and
inverters which prove to be very expensive components. TVS
recently leveraged this opportunity by launching a hybrid
model of their non geared scooter TVS Scooty. The end of
the last decade saw Bajaj taking a radical decision to do away
with the Scooter range and completely concentrate on
motorcycles, especially stating change in customers
preference as the main reason. The customers are left
without a choice in most cases than to migrate from the
traditional scooters of the Indian family to the all youthful
bikes that ones son rides to college.

PROFILE OF THE ORGANISATION

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In

1893, the Enfield Manufacturing Company Ltd was

registered to manufacture bicycles by 1893, as Enfield
Manufacturing Co. Ltd. By 1899, Enfield were producing
quadricycles [ with De Dion engines and experimenting with a
heavy bicycle frame fitted with a Minerva engine clamped to
the front down tube. In 1912, the Royal Enfield Model 180
sidecar combination was introduced with a 770 cc V-twin JAP
engine which was raced successfully. Royal Enfield
motorcycles made in England were being sold in India from
1949. In 1955, the Indian government looked for a suitable
motorcycle for its police and army, for patrolling the country's
border. The Bullet was chosen as the most suitable bike for
the job. The Indian government ordered 800 350 cc model
Bullets. In 1955, the Redditch

company partnered with Madras Motors in India to form

'Enfield India' to assemble, under licence, the 350 cc Royal
Enfield Bullet motorcycle in Madras (now called Chennai). The
first machines were assembled entirely from components
shipped from England. Royal Enfield are the makers of the
famous Bullet brand in India. Established in 1955, Royal
Enfield (India) is among the oldest bike companies.. Bullet
bikes are famous for their power, stability and rugged looks.
It started in India for the Indian Army 350cc bikes were
imported in kits from the UK and assembled in Chennai. After
a few years, on the insistence of Pandit Jawaharlal Nehru, the
company started producing the bikes in India and added the
500cc Bullet to its line. Within no time, Bullet became popular
in India. Bullet became known for sheer power, matchless
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stability, and rugged looks. It looked tailor-made for Indian

roads. Motorcyclists in the country dreamt to drive it.
It was particularly a favorite of the Army and Police
personnel. In 1990, Royal Enfield ventured into collaboration
with the Eicher Group, a leading automotive group in India, in
1990, and merged with it in 1994. Apart from bikes, Eicher
Group is involved in the production and sales of Tractors,
Commercial Vehicles, and Automotive Gears. Royal Enfield
made continuously incorporating new technology and
systems in its bikes.
In 1996, when the Government of India imposed stringent
norms for emission, Royal Enfield was the first motorcycle
manufacturer to comply. It was among the few companies in
India to obtain the WVTA (Whole
Vehicle

Type Approval) for meeting the

European Community norms. Today,
Royal Enfield is considered the oldest
motorcycle model in the world,spanning 3 centuries and still
in production and Bullet is the longest production run model.
The company is marching on with its tagline- "Made like a
gun, goes like a bullet".

Profile of the Products

Royal Enfield Bullet 350

One can be a part of classical prominence by having a ride on
Royal Enfield Bullet 350, a macho bike which is stylish as
well. The brawny is laden with plenty of attention grabbing
features like traditional designing, astonishing power of 18
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bhp from air cooled, 4 stroke engine, large wheels, and better
sitting for superior riding. This has been the classical offering
from Royal Enfield and the engineering and the design has
remained unchanged over the years. It has remained the
flagship product with the other products being perceived
more as derivatives of this motorcycle rather than standalone
products.

Royal Enfield Bullet 500 (Cast Iron)

Royal Enfield Bullet 500 is a classic bike having vintage
styling. The bike has hand-painted pin stripes, a 4-speed
transmission, double leading shoe front brake and was touted
as the powerhouse model with a whopping 27 bhp output.
While the bike looked mostly similar to the Standard 350cc
offering, its bigger engine made it a more potent vehicle to
have on long rides.
Royal Enfield Bullet Electra

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Royal Enfield motorcycles were renowned for having

problems starting because of their CB Point Ignition systems.
In an attempt to break this negative image, the company
came up with Electra. Electra was in effect a Standard 350cc
but had a CDI Ignition system. This paved the way for the
newer bikes from Royal Enfield which now have Digital TCI as
a a part of the standard package.

Royal Enfield Bullet Machismo

Machismo is Royal Enfields chrome monster. Resplendent
with chrome, they are available in both 350cc and 500cc
variants. They were the first bikes to have the now legendary
Lean Burn AVL Engines. These were the result of Royal
Enfields collaboration with an Austrian Engine manufacturer,
AVL.
Royal Enfield Thunderbird Bike
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Royal Enfield Thunderbird is a powerful bike which for the first

time broke off from the Bulletlook. They were modeled
similar to the cruisers available worldwide and were
positioned as a tourers choice. It has developed into a strong
marquee itself and continues to remain a brand name despite
engineering changes that went into it. It started as a 350cc
AVL Single-Spark Engine. Today the Thunderbird Twinspark is
a 350cc Unit Construction Twin-spark Engine with about 20
bhp output.

Royal Enfield Classic

In 2008, Royal Enfield unveiled its latest offerings the
Classic 350 and the Classic 500.Styled in the vintage 50s
look, they came with 18 inch tyres, Unit Construction engines
and the look and feel of a vintage. Priced at 1.3 lakhs and 1.7
lakhs respectively, the 350cc and the 500cc variants are
slowly gaining popularity amongst users for the lower ride
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height, the greater power and above all, the vintage feel of
the bike.

Royal Enfield Continental

Launched globally in 2013, and 2014 in India, the Royal
Enfield Continental GT is the lightest, fastest, most powerful
Royal Enfield in production. Its a machine with a story, a nod
to motorcyclings finest hour; a painstaking collaboration. It is
also the best expression yet of a cultural phenomenon that
has simply refused to fade away - the caf race.
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DARK PHASE DURING 1990-2000

The problem started when Royal Enfield wrongly identified them as its
competitors and started to compete with them. They shifted their focus from
the present loyal customers to the mass & much younger generation. Their
Bullet- Machismo Ad clearly shows the confusion in their strategy. First
time in the history a lady model was used, bullets was never shown as a tool
to impress girls. They had shown the impossible stunts which are impossible
with a bike like Bullet. Bullet was for Joy of Riding,Adventure,Shaan.
Thus the phase from 1990 to 2000 can be called a dark phase and it nearly

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killed the Royal Enfield brand. Even the new masters of Royal Enfield
who acquired them in 1994 were planning to shut down the Brand.
.But

things change a young man who was a die hard fan of Royal
Enfield Mr. Lal took charge of Royal Enfield he upgraded the bikes
with modern technology but keeping intact the Vintage and Macho
attributes of Brand. He promoted Fan Clubs, increased visibility
through accessories, Organized events like Himalayan Odyssey and
launched the Ad campaign in 2004 JAB BULLET CHALE TU
DUNIYA RASTA DE. He re-launched the Bullet Classic series. And
all this revived the brand Royal Enfield.Still there are some issues,
which Royal Enfield has to solve but never the less it seems they are on
the right track. The brand Analysis of Iconic Royal Enfield The year
2000 could have been decisive. That was when the board of directors at
Eicher Motors decided to either shut down or sell off Royal Enfield the company's Chennai-based motorcycle division, which
manufactured the iconic Bullet motorbikes. For all its reputation, the
sales of the bike was down to 2,000 units a month against the plant's
installed capacity of 6,000; losses had been mounting for years. Though
the bikes had diehard followers, there were also frequent complaints

about them - of engine seizures, snapping of the accelerator or clutch

cables, electrical failures and oil leakages.Many found them too heavy,
difficult to maintain, with the gear lever inconveniently positioned and
a daunting kick-start.

STRATEGIES TO BE FRAMED FOR COME BACK

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Just one person stood up to the board, insisting Royal Enfield should
get another chance. He was Siddhartha Lal, a third generation member
of the Delhi-based Lal family, promoters of the Eicher group of
companies. Lal, then 26, was an unabashed Bullet fan: he even rode a
redcoloured Bullet while leading the baraat (procession) to his wedding
venue, instead of the traditional horse.Lal felt Royal Enfield could still
be saved.
The bike had its reputation, a cult following, an instantly recognisable
build, and aspirational value. Changes had to be made to keep up with
the times and make the bike more acceptable, and therein lay the
problem. Royal Enfield fans liked the bikes exactly the way they had
always been Retaining the bikes' rugged looks was a given, including
the build, the design of the head lamp and the petrol tank. But should
the gears be shifted close to the rider's left foot - as in most bikes - or
retained on the right side? The question gave Lal and his team many
sleepless nights, since long time users were dead opposed to the
change.
The engine was another thorny question. The old cast iron engine was a
relic of the past. Its separate gear box and oil sump design made it
prone to oil leaks and it seized up very often. Its ability to meet

increasingly strict emission norms was also suspect. A modern

aluminium engine would eliminate these problems, but it would lack
the old engine's pronounced vibrations and beat - which Royal Enfield
customers loved. Laws of physics made it impossible to replicate these
with the new engine.
But the new engine, unlike the old, had hydraulic tappets, a new engine
arrangement, new metal and fewer moving parts. Obviously, it did not
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produce the vibrations and the beat of the old, but international experts
were consulted and sound mapping carried out for over 1,000 hours to
ensure it produced the maximum rhythmic vibrations possible and a
beat, which was 70 per cent of the amplitude of the original. The new
engine had 30 per cent fewer parts and produced 30 per cent more
power than the old, with better fuel efficiency.
By 2010, all Royal Enfield models had begun to use the new engine.
Two other problems needed to be addressed: the quality of some of the
components Royal Enfield bikes were using, and the sales experience.
To tackle the first, shop floor processes were fine-tuned, while
suppliers were exhorted to improve quality levels. Royal Enfield also
embarked on a large scale internal exercise to tone up performance.
The collection included biker apparel, bike and riding accessories.
Every year, the Company conducts a study to develop a comprehensive
360 view on the opportunities, risks and threats to the business. These
include areas such as markettrends, new competition, changing
customer preferences, disruptions in supplies, product development,
talent management etc.

POSITION OF COMPANY AFTER COME BACK

STRATEGY

The Company has robust ERP systems based on SAP platform. This
ensures high degree of systems based checks and control. The Royal
Enfield unit was able to produce and sell 42% more motorcycles in
2011 as compared to 2010. Total sales volume of Royal Enfield in 2011
was 74626 motorcycles as compared to 52576 in 2010. Total income
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for the year was 6,709.5 MINR, 51.6% growth over previous year1.
Even during 2008 recession, when auto sector was severely damaged,
Royal Enfield Bullets had very good performance in terms of sales. It
can be seen from the below bar graph Conclusion and
Recommendations.
CHANGE IN STRATEGY AFTER YEAR 2000
Marketing Mix: Product: Product which is the ruff & tuff
all terrain motorcycle. It has been upgraded with
technology such as EFI (Electronic Fuel Injection) for
better response, heavy cast iron diesel engine of the
earlier model has been replaced by a lighter but equally
power full single cylinder four strike petrol engine which
is made from aluminum. The gears have removed from
the right side to left side to need general standards. But
it was ensured that the VINTAGE and Macho appeal
of the bike is not damaged. Place: The market of Royal
Enfield can be divided basically into two segments:
1) Metropolitans: Teir 1 &Teir 2 Cities.
2) Small Cities: Teir 3 &DH (District Headquarters)

But in both the market it commands premium position.

Hence the showrooms must be opened in the prime
locations of the cities irrespective of metropolitans or
small cities.
PROMOTION :

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It is promoted in MENs magazines, Adventure

magazines, local print media, adventure trips ie.
Himalayan Odyssey and Fan Clubs.

CONCLUSION AND RECOMMENDATION

1. The buying behavior is governed predominantly by the need for
Power and respect for the iconic Brand.
2. The internal locus of control is by and large dependent on the Sense
of Control the motorcycle offers and also on the Sense of Freedom that
users associate with it.
3. Users are mostly Professional Males, 25-45 years of age, including
some students.
4. Users display mostly Value-Expressive behavior and Ego-defensive
behavior is not seen amongst responses.

5. People who choose not to buy Bullets do so because of high price,

maintenance and spares hassles and also because some feel they are not
built for it.
6. Advertisements are rarely recalled and are highly ineffective
amongst non-Bullet riders.
7. Bullets are perceived as low on cost-effectiveness, but high on ride
comfort and reliability.
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RECOMMENDATIONS
1. Improved Sales and Service Network by Franchise or dealership on
Profit Sharing Basis Royal Enfield doesnt have a very good sales and
service network. Marketing the product is not limited to sales only.
There should be extensive network of service centers so that customers
have a very good bullet experience The customer should get the service
network similar to that of Maruti Suzuki. Also a helpline number
should be launched, and on calling this, customers can avail of service
even in some remote localities .
2. Marketing Communication should focus on satisfying the needs for
Respect, Power and Comfort.
3. A non-flamboyant well-built brand ambassador may be chosen to
represent the Brand. John Abraham was choosen as Brand ambassador
for 1 yr but some macho personality like- Sanjay Dutt or Akshya
Kumar should be chosen to give a young and adventurous personality
to the brand. They should display bullet in some action movie, as it was
shown in Sholay to attract the young towards it.
4. RE should tie up with adventurous students or corporate executives and
arrange adventurous trips on weekends to locations- like Cherapunji,
lonaval etc. brand Amabsaddor should join them occasionally to
promote the event. Television Commercial spots are more remembered
than Print Advertisements even when they are over 6 years old. So

5. Users should be given the chance to video shoot their trips and share
with other TV viewers. Lucky users should be offered a chance to meet
the Brand executive on next trip
6. They should tie-up with adventurous brands like Thumps Up or
Mountain dew to give a complete revamp of branding.
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7. The RE Apparels available on their exclusive stores should be made

available in college counters to make them available to the young
students. It will create awareness among youth and more of them will
feel proud using the apparels like- bag, jacket, boots etc 7. They can
plan to export RE to other developing economies like- Brazil, China
and Russia to capture the market there Royal Enfield should
concentrate on building around the iconic status it already enjoys if it
plans to attract customers migrating to other manufacturers.

WHY WE LOVE ROYAL ENFIELD

1. You can see curious faces turning towards you when you
are riding a Royal Enfield.

2. Once you accelerate the bike, you can feel the thrill and
excitement.

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3. It becomes a part of your life and you take care of it like

your family

4. Once you accelerate the bike, you can feel the thrill and
excitement.
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5. The moment you own a Royal Enfield, you want to ride it to

Ladakh.

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6. Girls love bikers and particularly the one riding Royal

Enfield.

7. You represent masculinity, stability and strength.

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8. You become a part of RE group and travel places around

the country.

9. You become a part of RE group and travel places around

the country.

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10. And the tagline of the Royal Enfield Bullet Jab Bullet
Chale toh Duniya Rasta De is so true. Bullet is not just an
eye-catcher but everyone makes the way for it. You dont
even need to honk.
8.

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