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On
June 25, 2007, Bajaj Auto Limited (BAL), a major Indian
manufacturer of two and three wheelers, announced that its new
corporate strategy would be based on the guiding philosophy
termed as 'Distinctly Ahead'. In its press release, the company
explained, "The vision is about being Ahead by being
Distinctive. Being "Distinct" in all that the company does - in
products and technology, in marketing and communication
strategy, in manufacturing models, in distribution and to that
extent in each and every function."1
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Analysts viewed this as yet another effort by BAL to
regain its market leadership in the Indian two-wheeler market.
BAL's first scooter model 'Chetak' was launched under
the Bajaj brand in 1972. It remained its flagship model right until the
late nineties. In the early 1990s, in an effort to strengthen its brand,
BAL launched an ad campaign called 'Hamara Bajaj'. The advertisements,
which prominently featured the 'Chetak', were successful in positioning
the Bajaj brand as a reliable and trustworthy one.
However in the late 1990s, the Indian two-wheeler market witnessed a
shift in consumer preferences. The popularity of motorcycles began to
soar and consumers' interest in scooters began to wane. The reasons
cited for the shift were demographic change, with the proportion of
younger people in the population growing significantly; a buoyant
economy which increased the disposable incomes of the middle class; and
several newer models of motorcycles, with improved designs and modern
technology, becoming available in the market.
While these changes were taking place in the market, the features of
scooters remained essentially unchanged. Consequently, by the early
2000s, BAL lost its title of 'India's largest two-wheeler company' to
Hero Honda Ltd, a motorcycle manufacturer. With the overall scooter
market facing a slowdown due to the growing popularity of motorcycles,
the overwhelming image of a scooter company that had once been nurtured
through the 'Hamara Bajaj' ad campaign in the 1990s, seemed to be
working against the company.
In an attempt to recapture market share, BAL decided to reorient its
business, launching a series of new motorcycle models, which halted the
downward trend in sales. It did not want to give up on scooters either.
It launched new scooter models and upgraded existing ones. However, with
the introduction and subsequent popularity of Honda Motorcycle and
Scooter India2 (HMSI) scooters, especially
the Activa, a gearless scooter, BAL lost its dominance over the Indian
scooter market as well.
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1] Bajaj Auto Ltd., Press Release, June 25, 2007.
2] Honda Motorcycle and Scooter India Pvt. Ltd. was incorporated in 1999 as a fully-owned subsidiary of Honda Motor Co. Ltd., the auto major of Japan.
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