2001 Kawasaki Eliminator 125 Review
Visit Us at www.fcbulkacomstrat.comNote: All the information in the case has been garnered from sources in the publicdomain.This case has been developed for purely academic purposes and is not in anyway the intended plan of TVS Motor Company.Visit Us at www.fcbulkacomstrat.comTVS Motor Company: To the Victor, Go The spoilsStylish, contemporary and economical, motorcycles have taken the Indian market bystorm over the last decade and a half.Defying analysts expectations and recessionarytrends, motorcycle sales have been spiraling upwards, clocking consistent double-digitIndian motorcycle landscape has witnessed a slew of launches in recent years asThe Indian Motorcycle MarketIndia has traditionally been a two-stroke scooter market.With the introduction of stricterEuro I and Euro II emission norms, scooter makers were forced to upgrade theirtheir substantial price advantage overmotorcycles.This, coupled with aggressive pricing by motorcycle majors and the fuelefficiency advantage of a four-stroke motorcycle turned the tables of the two wheelerThe recent years have seen the motorcycle market grow at scorching rates as it wrestlesshare from the scooter and moped market.For the period of 1993-94 to 2001-02,motorcycle sales recorded a CAGR of 25.8% compared to a CAGR of 0.6% for scootersCreating New SegmentsThe booming motorcycle market coupled with the low growth rates of the scooter andfour-stroke motorcycle bandwagon.The majority of the market is still accounted for bythe basic 100 cc Rs 40,000 to Rs 45,000 motorcycle.However, new launches in the lasthave been successful launches in the Rs 30,000- Rs 35,000 band, which have redefined category.These segments also look allset to be further sub segmented as market players continue to launch new products to fillWhile the scooter appeals to the family man, a motorcycles main target audience hasalways been the young male individual.
Niche brands such as Hero Honda CBZ
aretargeted toward college kids, while most mainline brands have concentrated on therational benefits derived are very important in deciding the purchase.At the same time, amotorcycle, like a car is one of the most obvious statements of self leading to immensepotential on the emotional benefit paradigm as well.The brands in the market have tried every trick in the book to appeal to the Indianmarket- from promoting rational benefits such as performance to creating brandpersonalities that would appeal to the male buyer.From trying to cash in on nationalisticfeelings through corporate campaigns to using celebrities such as Hrithik Roshan andSachin Tendulkar to endorse the brand, various tactics have been used by variousVisit Us at www.fcbulkacomstrat.comThe PlayersHero Honda: Desh Ki Dhadkanhas been credited with creating a market for four stroke motorcycles virtually out ofnothing.The countrys first four-stroke motorcycle CD100 was launched by Hero Hondaway back in 1985.Backed by a memorable advertising campaign Fill it, Shut it, Forget itwhich stressed the fuel efficiency of the product, CD 100 was an outstanding success.This was followed by the Splendor launched in 1994, which again redefined the marketwith its attractive package of looks and fuel efficiency and was lapped up by the Indianconsumer.Thanks to these successes, Hero Honda has been clocking double-digitgrowth rates for most of the last decade and today is the unquestionable market leaderFacing a typical market leaders dilemma, Hero Honda finds itself today where Maruticompetitors.
And it is using a very Maruti-like tactic to ward off competition- a Herolaunches by Hero Honda across price points, such as the entry level Dawn and Joy andPassion in 2001, which is basically the same machine with more stylish looks.HeroHonda has also sent Honda a wish list of 10 new products to be launched in the Indianmarket in the next five years.These new launches will be used to replace the ageing CD100 and Splendor and also to plug every possible price point in the market.Being a pioneer, Hero Honda has always stood for fuel efficient and modern motorcyclesand its superior product has been its strongest plus point.
But the launch of similarthe market leader also focus on achievingadvertising salience.Recent Hero Honda launches such as Ambition, CBZ and Dawnhave been backed by aggressive advertising.
Ambition attempts to ride on the twinbenefits of power and fuel efficiency while the high end CBZ has tried to sell style andfeatures.
Passions positioning is simple: good looks.The company has also tried toHamara Bajaj nationalistic appeal by the Desh Ki Dhadkan campaignHero Honda has successfully shifted the balance of the Indian two wheeler market fromscooters to motorcycles and in the process has almost single handedly created thesecond largest motorcycle market in the world.However, warding off competition fromscavenging market share is a daunting task for any market leader.How Hero Hondarises to the challenge and continues to remain the
is a story worthBajaj Auto Ltd: Hamara Naya BajajAlthough a major player in all two-wheeler segments, Bajaj Auto was popularly known asthe king of scooters as it virtually dominated the scooter market for most of the last threedecades.Bajaj has been present in the motorcycle market since 1986.It has a technicalcollaboration with Kawasaki, Japan for the production of motorcycles.
However, for theearlier part of the last decade it stuck to selling two stroke motorcycles like KawasakiBajaj 100.
Four stroke motorcycles such as Kawasaki Bajaj 4S and Caliber wereVisit Us at www.fcbulkacomstrat.comintroduced only in 1998 to counter Hero Honda.The Caliber was the first successfulmotorcycle market.Faced with shrinking scooter sales and the huge potential of the motorcycle market,Bajaj decided to shift its focus on the motorcycle market.
It has undertaken a series oflaunches since 2001 aimed at segments in which Hero Honda was not present.Its firstsuccess was the Boxer, launched in June 2001, priced below the Hero Honda ruled Rs39,000- Rs 45,000 price band.
The Boxer was a runaway success, accounting foraround 50,000 units sold per month and 70% of Bajajs motorcycle sales.
The Bajajonslaught has not been confined to the volume segment alone.It has also launched twohigh-end 150cc+ motorcycles Pulsar and Eliminator in the last two years.Since 2000-01, Bajajs motorcycle sales have shown impressive growth rates.For theowth rates achieved by Hero Honda.
Thecompany has shifted its full focus on motorcycles- motorcycle sales in 2002-03 wereexpected to account for 58% of the turnover up from 19% in 1993-94
A number of newlaunches have been planned- new variants of the Boxer and the Caliber as well as anew 125-135 cc motorcycle to be launched in December 2002.TVS Motor CompanyCompany in 1983.It launched its first motorcycle, the AX 100 in 1984.A number of twostroke motorcycle launches by the company in the last decade such as the Shaolin,Shogun and Samurai met with limited success.
The absence of a four-stroke motorcyclein its portfolio during the motorcycle boom has ensured that TVS lagged at number threein the motorcycle sweepstakes.In September 2001, TVS bought out its partner Suzukis26% stake and the company was renamed as TVS Motor Company.Subsequent to the break up, the company introduced its indigenously developed four-stroke motorcycle called the Victor in 2001.
This motorcycle was a stylish, fuel efficient110 cc motorcycle priced at the same price range as the popular 100 cc Hero Hondaofferings, Splendor and Passion.The company also launched an aggressive campaignbased on the motorcycles strong product features and value for money positioning.The rest, as they say, is history.The Victor shored unprecedented volumes for thecompany and had a waiting list of three months in January 2002.
TVS clockedphenomenal growth rates of 85% in the April to June 2002-03 quarter compared to lastion.The Victor has forced the company toincrease its capacity from 10,600 to 15,000 slated to further go up to 50,000 units per month by March 2003.Over the years, the company has made a conscious effort to build the TVS brand name.It first separated the brand name from Suzuki in 1998 and launched a corporate identityIn 2002, the company roped in Sachin Tendulkar to endorse the brand and broad baseits appeal in the north and the west, where it is primarily known as a south basedcompany.Through its choice of celebrity and its campaign TVS has painstakingly buildvalues of confidence, trust, sincerity and humility around its brand.Visit Us at www.fcbulkacomstrat.comThe Consumer (Refer Annexure 2)There is an equal distribution of motorcycle owners in both urban and rural India.
Thetypical consumer belongs to a SEC A2, B or C household, earning a stated MHI of Rs2,000
Rs10,000, whose Chief Wage Earner(CWE) is a clerk/ skilled labourer or a landowner.While the ownership of basic durables such as TV, fridge and music systems isquite high, ownership of higher end durables such as microwaves, PCs and AirConditioners is negligible.In India, the 125 cc segment accounts for only 5-7% of the market.The Yamaha YBX,YD 125 and the Kinetic Engineerings GF 125 are the only 125 cc motorcycles in themarket today.However, this scenario is likely to change in the near future as themotorcycle buyer starts trading fuel efficiency for performance.While the 100 cc bikes provide great fuel efficiency of between 60-65 kilometers per liter(kmpl) ; at an average of 7-8 bhp, they are considered too sluggish.At the other end isthe 150 cc category of bikes which deliver between 12-13 bhp but only 35-40 kmpl inThe 125 cc has been touted as the next big story in the motorcycle market as the Indianconsumer starts looking beyond the economy motorcycle.A typical 125 cc motorcyclehas a substantial power advantage over the economy 100 cc motorcycle delivering a 11-12 bhp.In China the 125 cc category accounts for a little over 50% of the market.In view of the outlook, it is no wonder that all motorcycle manufacturers have eitherlaunched or are planning to launch motorcycles in the 125-135 cc gap.Hero Honda hasalready launched Ambition, its 133 cc bike while Bajaj, LML and Kinetic are planninglaunches in the 125cc segment.TVS Motor Company cannot be far behind.
It is planningto launch its own 125 cc motorcycle in January 2003 to provide formidable competitionThe TVS offering will not only have to match up to competition in motorcycles, it will alsohave to counter the booming second hand car market to become the vehicle of choiceDevelop a comprehensive communication strategy for the planned 125 cc TVSmotorcycle.This should include Branding Approach/Name Key Target Audience Positioning Brand Personality etcPlease support your recommendations with requisite rationale and critical assumptions.Creative concepts/ renditions are not a part of this assignment.Visit Us at www.fcbulkacomstrat.comAnnexure 1: Two Wheeler Sales over the 2: Profile of a Household Owning A MotorcycleMotorcycle (%age of base)(%age of and urban Rs.500-200053.812.4Rs.
2,001-5,00032.938.5Rs. Us at www.fcbulkacomstrat.comBase:All IndiaMotorcycle (%age of base)(%age of base)Education Of CWE Illiterate29.44.9Some School40.725.4SSC/HSC/Not Graduate21.136.9Graduate General5.819.2Post Graduate General1.87.6Grad/ Post Grad Professional1.26.0Occupation of CWE Off/Exec/Self Emp Professional2.612.4Shop Owners7.717.8Clerks/ Skilled labourers31.637.9Unskilled labourers15.83.4Student0.20.2Not working/ Products OwnedBlack and White TV28.036.6Colour TV15.255.7Any TV42.589.0Any Radio31.157.6Any Music System23.558.7Fridge: Not Frost Free7.025.9Frost Free Fridge4.621.2Any Conditioner0.42.2Any Washing Machine3.115.0Personal Computer0.63.2Source: NRS 2002 Household DataVisit Us at www.fcbulkacomstrat.comAnnexure 3: The Indian Motorcycle Market3.1 Company Wise Sales of Motorcycles Over the in Motor Co Ltd
1036,16044,723Kinetic Engg Limited
45,277Royal Enfield India Market Share of share of the Motorcycle marketHero Honda Motors Auto Motor Co Ltd
0.01.71.5Kinetic Engg Limited
1.5Royal Enfield India. ACMA 2000-01, SIAMVisit Us at www.fcbulkacomstrat.comAnnexure 4: Estimated Sales Brand WiseBrandsSales Per 10025,000Victor10,500Caliber and Caliber Croma9,800Crux and Crux R8,000Challenger6,000TVS Fiero4,500Energy Fx3,000CBZ2,600CD 1002,300Kinetic GF 1252,000Annexure 5: Media Spends in 2001 (Rs Million)AdvertiserBrandBajaj Kawasaki Boxer CT172Bajaj Kawasaki Caliber111Bajaj Kawasaki Aspire79Bajaj Range84Bajaj KawasakiI Caliber Croma55Bajaj M80 Major29Bajaj Eliminator29Bajaj Total 559HERO HONDAHero Honda Passion245Hero Honda CBZ241Hero Honda Joy120Hero Honda Range65Hero Honda Splendor56Hero Honda Service Center19Hero Honda Corporate2Hero Honda Desh Ki Dhadkan2Hero Honda Total 750TVS Victor186TVS Fiero136TVS Max 100119TVS Samurai11TVS Total 452Grand TotalSource: ADMON, Map 2.0Visit Us at www.fcbulkacomstrat.com1.Participating teams should contain three members.2.A synopsis on the case should be submitted either through email to the firstname.lastname@example.org floor, Nirmal, NarimanPoint, Mumbai 400 021.The last date for receipt of the synopsis is 103.The synopsis should not exceed 15 pages with a minimum font size of 10 and single4.A shortlist of six teams shall be arrived at on the basis of synopsis received.Theshortlist shall be declared on 13 November, 2002 and posted on the website5.These six teams have to make a presentation to a panel of judges on 23November, 2002 in Mumbai..
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