Royal Enfield- Financial Aspects of Marketing

‘Made like a gun. . Goes like a Bullet’

Sagar DusaneMMS- B-11-(2015-17)AIAIMS- Mumbai 01

What are we going to see ?

History Organizational structure Problems faced in the last decade

HistoryBeginning The Enfield Cycle company

Redditch, Worcestershire

Brand name license – 1890

Birth of the bullet -1931

The Indian Connection 1949- Introduction into Indian market

1955- Indian army’s calling

Partnership with Madras motors

1971- Closeout in the UK

Eicher chapter1991- Strategic alliance with Eicher motors 1994- Merger into Eicher Group and conversion into Royal Enfield from Enfield India1996- Immediate compliance to stringent emission norms

Post millennium2002- Launch of India’s first cruiser

2003- First Rider Mania in Goa

2005- Fifty glorious years in India

2010- Successful migration of entire product

line to UCE

Organizational StructureBoard of directors

Problems faced in the last Decade Keeping up with the times; Need for change Board at the threshold of either shutting down or selling off RE Sales down to 2000 units instead of 6000 units per month Issues due to maintenance, weight and kick start Support of Siddhartha Lal Appointment of R.L Srinivasan as the CEO in 2005, who had earlier

worked in both TVS Motors and Bajaj Design of a new engine and alteration in the gear position Shop floor process tuning to improve quality Gradual reduction in problems and warranty claims And now? – 100% capacity and waiting period of up to a year

Royal Enfield Industry- Motorcycles, Bicycles, Lawnmowers. Founded- 1893, As Enfield Manufacturing Co. ltd. Headquarters- Chennai (India). 1st Motorcycle was built in 1901.

History

In 1893 Albert Eadie and R.W. Smith started company by name “The Enfield Manufacturing Company Limited” At Redditch (England).

VISION “To be recognized as the industry leader driving modernization in biking in India and the developing world”MISSION “Aims to continuously improve biking efficiency in India and developing markets. Customers are the integral part of the Organization & Creating a Family of Bikers Bond”

4 P’s Of Royal Enfield

Product IT MAKES US TO FEEL LIKE A LEGEND

Place

The royal Enfield bullet was first introduced in Brittan in 1949 as 350cc bike.

The 500cc model was introduced in Britain in 1950.

1. Showroom2. Online3. Bike consultancies

This was the first look of bullet

Price

350cc Electra=1,16,000

350cc classis=1,24,00500cc classic=1,59,000

350 cc Thunderbird=1,35,000500cc thunderbird=1,72,000

Promotion Internet Newspaper Advertisement

STP Segment Middle-class people who want a bike that is stylish and powerful Target Group Middle class youth from the age bracket of 25-35 Positioning A powerful motorcycle for bike adventurers

Product Life Cycle

The product life cycle describes the period of time over which an item is developed, brought to market and eventually removed from the market. The cycle is broken into four stages: introduction, growth, maturity and decline. The idea of the product life cycle is used in marketing to decide when it is appropriate to advertise, reduce prices, explore new markets or create new packaging.

Product life cycle of Royal Enfield

Product life cycle of Royal Enfield

Porters Five Forces

Threat of new entry Movement of industry towards premium segments eg. Karizma Entry of exclusive foregn player

Buyer power Availibilty of big popular brand Nowadays people go to unique brands because of good service

they provide after purchase Supplier power

Cheap import of auto component from china The automobile supply business is quite fragmented.

Threat of substitution There are many substitute available in the

segment, passenger car are considered to be the closest substitute after the launch of world cheapest car Tata Nano

Competitive rivalry  The key players in two-wheeler industries are

Hero Moto Corp ltd., Bajaj Auto ltd and TVS motor Company ltd. The other players are Kinetic, LML, Yamaha, Majestic auto ltd, Royal Enfield ltd and Honda motorcycle & scooter India.

Existing Product

New Products Mid-size motorcycle space ranging between 200-750cc R&D centre in the UK has been working on a new 600-650cc twin-cylinder motorcycle

codenamed 'P61

Royal Enfield Continental GT

2.05-2.14 Lakhs

Royal Enfield Himalayan

1.55-1.78 Lakhs

Expansion Royal Enfield, plans to invest Rs. 600 crore during the current fiscal for

product development  Two R&D centres and expansion of manufacturing capacities in India

and the UK. The UK technology centre will be operational by the second half of

2016-17 while the Chennai centre will be operational by 2017-18, he added

2016-17, Royal Enfield plan to manufacture 675,000 motorcycles Chennai-based firm sold 1,48,185 motorcycles best ever performer

March 31, 2016

Substitution For Royal EnfieldStrengths

1. Size and scale of parent company2. Effective Advertising Capability3. High emphasis on R and D4. Established brand name in the cruiser market5. Established market distribution channel6. Exports motorcycles to 31 countries like the USA, Japan, UAE, Korea, Bahrain, UK, France, Germany, Argentina and many other countries

Weaknesses1. Weight of the motor cycle can be an issue for few customers.2. Mileage of high cc bikes is an issue

Opportunities1.Two-wheeler segment is one of the most growing industries2.Export of bikes is limited i.e. untapped international markets

Threats1. Strong competition from Indian as well as international brands2. Dependence on government policies and rising fuel prices3. Better public transport will affect two-wheeler sales

Substitution For Royal Enfield

Harley-Davidson - Harley 500m – 3.5 lakhs Bajaj- Bajaj Avenger Street 220 CC & 150 CC- 75-85k Yamaha R3 CBR 250 New enter Bikes in 2017

1.Avenger 400cc2.TVS Motors- BMW-380CC