A PROJECT ON Royal Enfield

Submitted to
T.GHOSAL
kumar
CUJ/I/2012/MBA/O3
VI SEMESTER

Submitted by :Abhishek

Acknowledgement

The Submission of this Project Report gives us an opportunity to

convey our gratitude to our Marketing Faculty Mr T.GHOSAL for
being our mentor and guide.

We express our deepest thanks to him for providing us the

guidelines to make the project that helped us in better
understanding of ROYAL ENFIELD and its working.

Project Objective

1 : To know about the ROYAL ENFIELD

2.Market analysis(Competition,Customer
analysis,Market potential) of ROYAL ENFIELD
3.Key growth drivers of ROYAL ENFIELD
4.Segmentation,Positioning of ROYAL ENFIELD
5.Strategic Branding by ROYAL ENFIELD
6.Product market analysis of ROYAL ENFIELD
7.Marketing Strategies(w.r.t to the element of
marketing mix)

Introduction
Indian automobile industry
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.
Indias automobile sector consists of the passenger cars and utility vehicles, commercial
vehicle, two wheelers and tractors segment. The total market size of the auto sector in India is
approximately Rs 540 billion and has been growing at around 8 percent per annum for the
last few years. 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 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 twowheeler 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 story of Mr. Ratan Tata inspired by a family of four members travelling in Indian roads,
not concerned about safety and the evolution of the idea of TATA Nano has been quite
famous globally.
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 two-wheelers for their
personal commutation and various two 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.
With rising incomes and purchasing capacity of the average Indian, the demand for two
wheelers in the power segment has increased considerably. There also have been constant
signs of maturing of the market when the manufacturers reacted by coming up with
innovations, catching attention of potential buyers and sometimes creating a new class of
customers or altering the preferences and attitudes of existing consumers

Profile of the Organization

Royal Enfield are the makers of the famous Bullet brand
in India. Established in 1955, Royal Enfield (India) is
among the oldest bike companies. It stems from the
British manufacturer, Royal Enfield at
Redditch. Royal Enfield has its headquarters at Chennai in
India. 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
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 still in
production and Bullet is the longest production run model.

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 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 4S
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 Lightning 535

Looking for an image makeover back in 2001, Enfield came up with Lightning. It was a
Limited Edition 535cc motorcycle. The singlecylinder, air-cooled 535cc engine was the largest
SCAC engine for any motorcycle in the world. The
bike received limited acceptance amongst users and
was discontinued after 2006 but it succeeded in
rebuilding the power-bike image of Royal Enfield
amongst the enthusiasts.
Royal Enfield Bullet Electra 5S
With Electra 4S receiving quite a lot of
acceptance, Royal Enfield decided to add a few
more features to align themselves with the more
contemporary manufacturers. From a right-hand
side 4-speed gear shift, they moved to a left-hand
side 5-speed gear shift. Disc brakes also made an
entry, with the 280mm disc being the largest in the
country. This has been one of the most successful models from Royal Enfield and was to a
large extent responsible for the revival of the brand during the turn of the millennium.
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

Royal Enfield Thunderbird is a powerful bike which for the first time broke off from the
Bullet look. 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 height, the greater power and above

all,

the vintage feel of the bike.

Rationale for the Project

Royal Enfield motorcycles have for a long time held the fancy of Indian two-wheeler users.
However, this awe and enthusiasm has not really translated into sales for the company.
On a superficial level, it seems that this may be caused by high prices, low fuel-efficiency,
and maintenance issues. However, it was felt that this can be caused by a strong disconnect
between the perception of the motorcycles from Royal Enfield amongst the users and the
value proposition from the company.

Definition of Constructs
In the initial brain storming sessions, various parameters were considered important to a
riders choice of Bullet as a vehicle and the various prime movers behind these parameters
were discussed. These parameters were broadly classified as
a) Internal parameters (Ones that stems from the users notions and internal values)
b) External parameters (Ones that depend on Marketing Communication and others
perception of the user)
While most riders seemed to be influenced by both, the Ego-Defensive riders display a
greater tendency to be influenced by the external parameters. They look for the macho image
of the Bullet to rub off on them. The Value-Expressive users look for the sense of freedom in
the bike and the long rides that come with it.
Internal Parameters Customers Internal Locus of Control

Considering that Power Bikes are expensive, various features need to be compared, and they
are expected to be used for a considerable period of time, purchase of bikes come under
complex consumer behavior decisions. The consumer behavior under such cases can be
defined in 4 steps namely:
1. Need Arousal / Problem Recognition In this stage, the customer recognizes the need for
a bike based on his current situation. Study of this phase helps us identify the various needs
of customers, which needs they prioritize, ability to satisfy needs, how they satisfy their
needs etc.
2. Search for Information Once the customer identifies his need for a product, he searches
for information related to the product before purchase. A study about this phase can evolve
insights into which medium to use to reach the customer, what communication mediums to
use, influencers, etc.
3. Brand evaluation & Purchase As a result of information search, the customers evaluate
brands available based on their past and current information with their desired benefits. It is
very important to be in the consideration list in this stage for a brand to be consumed. A

company needs to identify if it is in the consumers consideration list and if not what are the
reasons for this.
4. Post Purchase Evaluation This may be associated to satisfaction while
consumption/usage through parameters like performance, after sales support etc. Another
important aspect at this stage is post purchase dissonance etc. This stage is very important to
develop loyalty among customers and for popularity of the brand in terms of performance
reviews.

External Parameters Influncers, Marketing and Company

Some customers exhibit choices based on how they wish to be perceived, a feeling that often
stems from an internal insecurity that needs an external cover-up. These users are heavily
influenced by Marketing communication showing the bike catering to their Ego needs and
also by the general peer evaluation of the image the bike projects.
These users migrate more towards the look and the image of a vehicle rather than its
performance or its fit with their actual riding requirements.
Most of such users find a bike like Bullet unfit for them as they feel the bike is either too
costly or they are not strong enough to handle a Bullet.

Market analysis
Market potential
Royal Enfield's MARKETING initiative to woo potential customers through its `Log
Out" campaign targeted at corporates is paying dividends. The Chennai-based
manufacturer of Bullet motorcycles and an Eicher Motors unit aims to pitch the riding
experience as a team-building exercise over weekends. And the company reports that
having ridden an Enfield, many a corporate rider has sold off his existing two-wheeler
and

upgraded

to

an

Enfield

bike.

According to Koshy, the company has been recording consistent growth for the past
three years. "We have been growing 15 to 18 percent every year. Last year when the
industry was down 12 percent, we were up 18 percent

 In a competitive marketplace, it takes out of-the-box thinking to attract buyers and

drive sales. Using its innovative marketing campaigns, Royal Enfield seems to have
hit the right note for its range of thumpers.

Customer analysis
By and large it was found that most of the customers are choosing Royal Enfield
vehicles because of its Vehicle Appearance, pickup, good models and engine
appearance etc.
Its give a pride to the customers by owning it.
Its boldness and a felling of riding on a bullet.

Competition
Harley davidson
Triumph
Hyosung DSK
KTM

Key Growth Drivers

Its a bike for Indian Roads, Even if there is no road!
The brand simplicity and its engaging quality .
The brand has a strong presence and resonance.
Only Print Ads appear online or in selected lifestyle and travel magazines.

Marketing Mix

Product

CAF RACER
CONTINENTAL GT
CRUISER
THUNDERBIRD 500
THUNDERBIRD 350
RETRO STREET
CLASSIC DESERT STORM
CLASSIC BATTLE GREEN
CLASSIC CHROME
STANDARD STREET
BULLET 500
BULLET ELECTRA
BULLET 350

Price
Its price range between 1.3 lakh- 1.85 lakh.

Place
180 dealers
11 Brand stores
100 Authorized service centre
Export to 42 countries 40 importers and 300+ dealers.

Promotion
The TRIP Campaign.
The Leave Home Campaign.
Promotions are done through Riders Community and Movies.
The Company keeps on Organizing a lot of riding events, People have there own
community symbols and flag also.

Segmentation
Geographic: Mainly the urban youth
Demographic: Age group of 22-50 years
Age group of 22-50 years.
Gender male
Upper and middle income group who want a bike that is stylish and powerful.
Psychographic: SEC A1 & A2
Classic, royal and legendry lifestyle

Positioning
Position itself in the mind of consumers creating an image which is full of royalty and
legendary image.

Swot analysis
Strength
Size and scale of parent company
Used on a large scale for military purposes because of its STURDINESS.

Established brand name in the cruiser market.

Established market distribution channel.

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

Opportunities
Two-wheeler segment is one of the most growing industries
More brand visibility

Threats
Strong competition from Indian as well as International brand.
Dependence on government policies and rising fuel prices.

Strategic branding
Celebrities now a days promoting Royal enfields bike
Jab tak hai jaan, harry potter, zindagi na milegi dubara, Ek villain.
Handcrafted in chennai.
The company doesnt use the TV Commercials and the regular channels for brand
building.

Customer analysis
By and large it was found that most of the customers are choosing Royal Enfield
vehicles because of its Vehicle Appearance, pickup, good models and engine
appearance etc.

Its give a pride to the customers by owning it.

Its boldness and a felling of riding on a bullet.
Benefits: and very much muscular
Usage rate : heavy and rough use.
Attitude: enthusiastic and kingly.

Its a Heritage brand. No promotion on technological aspects.

Royal Enfield sold just over 300,000 units in 2014 to Harley-Davidsons 267,999. To
be sure, the American motorcycles are more expensive (the cheapest is twice the price
of a top-end Royal Enfield) and popular brands of other motorcycles sell in staggering
numbers in populous India. But then again, as recently as in 2013, Harley-Davidson
dominated sales selling 100,000 more motorcycles than Royal Enfield.

Conclusion and Recommendations

The following are the Conclusions from the Data Analysis:
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, 20-35 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.