SDM-Institute For Management Development, Mysore
Marketing Management-1
Project on
YAMAHA INDIA MOTORS
Submitted to:
Dr. H. Gayathri
Submitted By: Group 12
Aditi Singh – 10004
Krishna Chandra – 10020
Rajiv N. – 10032
Srikiran C. Rai – 10048 1. INTRODUCTION BRIEF HISTORY OF THE INDIAN TWO-WHEELER INDUSTRY: In the 50s the two wheeler segment was largely dominated by Automobile Products of India (API) and Enfield. Later on towards the end of the 50s Bajaj Autos began importing Vespa scooters from the Italian company Piaggio. In the following decades, the automobile industry in India was mainly dominated by scooters with API and later Bajaj dominating the market. There were very few products and choices available as far as motorcycle is concerned and Enfield bullet and Rajdoot dominated the market. The 80s saw the entry of Japanese companies in the Indian market with the opening up of the market to foreign companies. Hero Honda and TVS Suzuki are companies formed in this era of market reform. The market was still predominantly scooter dominated and Bajaj and LML were the leading brands producing two-wheelers at that time. Scooter was viewed as a more family and utility friendly vehicle than motorcycle and hence was preferred. The Japanese companies not only collaborated with Indian companies to produce the already existing products but also brought in new technology as a result of which the ever conquering 100cc bikes which were extremely fuel efficient with 4 stroke engines were launched in India. These proved to be highly successful as they provided a cheap and affordable means of personal transport to all those who could not buy a car. The flourishing middle class took a great liking for these bikes and the bike sales in India began to grow exponentially year on year leading to Hero Honda becoming the leader in the two wheeler industry in India and the largest producer of two wheelers in the world. The post 90s era was the era of liberalization and weakening of restrictive measures. The government went on an overdrive to support the industry and all FDI regulations and licensing was abolished. 100% FDI was allowed in the automobile industry and the excise duty was also considerably reduced to its current level of 12% on two wheelers. All these factors combined with the rising fuel prices, the increasing dispensable incomes of households, easy access to finance, etc. have led to two wheeler industry becoming the backbone of the automobile industry in India. The two wheeler industry in India forms a major chunk of the automobiles produced in India. According to Society of Indian Automobile Manufacturers(SIAM) statistics for the year 2008 – 2009, two – wheelers comprise 76.49% of market share among the vehicles produced in India.
The production share of two wheelers is quite similar to the market share. The two wheeler industry comprises around 74% of the total automobiles produced in India. The SIAM data for the year 2008-09 states that 8,418,626 two wheelers were produced during the year against a total of 11,175,479 vehicles produced during the year.
SEGMENTATION OF TWO WHEELERS:
A Two-Wheeler segment can be sub-segmented into the three segments:
.
1. Motorcycles 2. Scooters 3. Mopeds
Domestic Market Share 2008 – 09 | Commercial Vehicles | 3.95% | Total Passenger Vehicles | 15.96% | Total Two Wheelers | 76.49% | Three Wheelers | 3.60% | 1.1.1 Domestic Market Share 2008-09
1.1 The Domestic Market Share of Two wheelers in 2008-09
YAMAHA HISTORY
Yamaha's history goes back over a hundred years to 1887 when Torakusu Yamaha founded the company, which began producing reed organs. The Yamaha Corporation in Japan (then Nippon Gakki Co., Ltd.) has grown to become the world's largest manufacturer of a full line of musical instruments, and a leading producer of audio/visual products, semiconductors and other computer related products, sporting goods, home appliances and furniture, specialty metals, machine tools, and industrial robots. The Yamaha Motor Corporation, Ltd., begun on July 1, 1955, is a major part of the entire Yamaha group, but is a separately managed business entity from the Yamaha Corporation. The Yamaha Motor Corporation is the second largest manufacturer of motorcycles in the world. Yamaha Motor Corporation owns its wholly-owned subsidiary in the U.S. called Yamaha Motor Corporation, USA, that is handling not only motorcycles, but also snow mobiles, golf carts, outboard engines, and water vehicles, under the brand name of Yamaha as well. In 1954 production of the first motorcycles began, a simple 125cc single-cylinder two-stroke. It was a copy of the German DKW design, which the British BSA Company had also copied in the post-war era and manufactured as the Bantam. The first Yamaha, the YAI, known to Japanese enthusiasts as Akatombo, the "Red Dragonfly", established a reputation as a well-built and reliable machine. Racing successes helped boost its popularity and a second machine, the 175cc YCI was soon in production. The first Yamaha-designed motorcycle was the twin-cylinder YDI produced in 1957. The racing version, producing 20bhp, won the Mount Asama race that year. Production was still modest at 15,811 motorcycle, far less than Honda or Suzuki. The company grew rapidly over the next three years and in 1959 introduced the first sports model to be offered by a Japanese factory, the twin-cylinder YDSI with five-speed gearbox. Owners who wanted to compete in road racing or motocross could buy kits to convert the machine for both road and motocross racing. By 1960 production had increased 600% to 138,000 motorcycles. In Japan a period of recession followed during which Yamaha, and the other major Japanese manufacturers, increased their exports so that they would not be so dependent on the home market. To help boost export sales, Yamaha sent a team to the European Grand Prix in 1961, but it was not until the 1963 season that results were achieved. After the Korean War the American economy was booming and Japanese exports were increasing. In 1962 Yamaha exported 12,000 motorcycles. The next year it was 36,000 and in 1964 production rose to 87,000. In 1963 Yamaha had produced a small batch of 250CC road racing motorcycles for sale, the air-cooled, twin-cylinder TDI. Ever since then Yamaha has built and sold motorcycles that could be raced successfully "straight out of the crate", and as a consequence Yamaha machines have won more road races than any other make, exposing Yamaha to a good deal of publicity. By 1965 production was 244,000 units, split about 50/50 between home and export sales. One of the biggest drawbacks to the sales of two-strokes was that the rider had to mix oil with their gas. Yamaha technicians accomplished a major technical feat by the development and introduction of a new Autolube system.
1.2 COMPANY PROFILE
About India Yamaha Motor Pvt. Ltd.
Yamaha made its initial foray into India in 1985. Subsequently, it entered into a 50:50 joint venture with the Escorts Group in 1996. However, in August 2001, Yamaha acquired its remaining stake as well, bringing the Indian operations under its complete control as a 100% subsidiary of Yamaha Motor Co., Ltd, Japan.
India Yamaha Motor operates from its state-of-the-art-manufacturing units at Faridabad in Haryana and Surajpur in Uttar Pradesh and produces motorcycles both for domestic and export markets. With a strong workforce of 2000 employees, India Yamaha Motor is highly customer-driven and has a countrywide network of over 400 dealers.
YAMAHA INDIA operates from its state-of-the-art manufacturing units at Surajpur in Uttar Pradesh and Faridabad in Haryana and produces motorcycles for both domestic and export markets. With a strong workforce of more than 2,000 employees, YAMAHA INDIA is highly customer-driven and has a countrywide network of over 400 dealers. Presently, its product portfolio includes VMAX (1,679cc), MT01 (1,670cc), YZF-R1 (998cc),YZF-R15 (150cc), Fazer (153cc), FZ-S (153cc), FZ16 (153cc), SZ & SZ-X (153cc), SS125 (123cc), YBR 125 (123cc), YBR 110 (106cc) and Crux (106cc).
VISION
To establish YAMAHA as the "exclusive & trusted brand" of customers by "creating Kando" (touching their hearts) - the first time and every time with world class products & services delivered by people having "passion for customers".
MISSION
We are committed to:
Be the Exclusive & Trusted Brand renowned for marketing and manufacturing of YAMAHA products, focusing on serving our customer where we can build long term relationships by raising their lifestyle through performance excellence, proactive design & innovative technology. Our innovative solutions will always exceed the changing needs of our customers and provide value added vehicles.
Build the Winning Team with capabilities for success, thriving in a climate for action and delivering results. Our employees are the most valuable assets and we intend to develop them to achieve international level of professionalism with progressive career development. As a good corporate citizen, we will conduct our business ethically and socially in a responsible manner with concerns for the environment.
Grow through continuously innovating our business processes for creating value and knowledge across our customers thereby earning the loyalty of our partners & increasing our stakeholder value.
CORE COMPETENCIES
Customer #1
We put customers first in everything we do. We take decisions keeping the customer in mind.
Challenging Spirit
We strive for excellence in everything we do and in the quality of goods & services we provide. We work hard to achieve what we commit & achieve results faster than our competitors and we never give up.
Team-work
We work cohesively with our colleagues as a multi-cultural team built on trust, respect, understanding & mutual co-operation. Everyone's contribution is equally important for our success.
Frank & Fair Organization
We are honest, sincere, open minded, fair & transparent in our dealings. We actively listen to others and participate in healthy & frank discussions to achieve the organization's goals.
THE 4 P’S OF INDIA YAMAHA MOTORS
Product : India Yamaha Motors has recently launched its sports bike R15 and FZS in the 150cc. The bikes in the premium segment include MT01 and YZF R1. Yamaha is bringing its latest technologies to India and aims to come up with a new product for the Indian market every quarter.
The reliability and riding quality of a Yamaha have already been established through its earlier products.
Price: The Yamaha range of products has been very competitively priced and the prices of its premium segment bikes MT01 and YZF R1 are priced much below any present or prospective competitor in the segment at Rs.10.5 lacs.
Its other products like the R15 has also been priced optimally looking at the specifications of the bike. The bike despite being only 150 cc provides around 22 BHP of power, more than any other bike in the 150-220cc. bracket. The bike has also brought the liquid cooled engine technology to India and other features like the styling etc. are also quite new for the Indian market and hence considering what it gives you it is a bargain at Rs.97, 500.
Promotion: Yamaha has been constantly losing market share over the last few years and has thus decided to change its brand image with change in its market strategy. The company now wants to be known for its style and speed. It looks to be known as a sports bike manufacturer and not as an economy bike segment player.
Taking these factors into consideration the company has started a complete makeover of its image. The recent R15 and FZS ads on numerous channels on TV and other ads on both electronic and print media vindicate the point.
The company has also opened ‘Yamaha bike stations’ which are company owned showrooms and completely symbolize the brand image that Yamaha wants to achieve in India.
Place: India Yamaha Motors has adopted a two tier marketing channel consisting of the Primary dealers at tier1 and the secondary dealers or retailers at tier2. In addition to these two tiers there are also the ‘company owned showrooms’ and the multibrand outlets.
7
YAMAHA’S STRATEGY IN INDIA
The marketing strategies of Yamaha have been evolving through the years. It has fluctuated from being a mass product to a niche. Yamaha has shifted its focus from the lower end segments to the premium segment of bikes. It aims to provide its customers the full range of its engineering marvels.
The strategies of Yamaha can be broadly classified as the 2 stroke era, the post 2 stroke era and the modern/current era. 2 stroke era
The 2 stroke era was dominated by products for the masses.
The superior performance of Yamaha made them popular and helped Yamaha in capturing the market space.
They had a sound distribution channel and were able to penetrate even the Rural market with lot of ease and this made Yamaha popular among the masses.
Some of the major bikes in the 2 stroke era were:
Rx Series
Rajdoot Rx series was launched in the year 1985. It had 3 successors RXG, RX-135, RXZ.
The specifications of the RX series:
Performance specifications are as follows * Acceleration: 0–60 km/h in 5 seconds. * Top speed: 115 km/h. * Chamber: 120Km/h. * stock+keninfilter: 120Km/h.
Rajdoot Excel T was a 173cc two-stroke motorcycle made in India by Escorts group.
The Rajdoot was the favourite among the Indian masses. Its relevant technology for the Indian road condition makes it suitable for all types of terrain. This tough and highly durable motorcycle has excellent load carrying capacity.
Challenges Faced
The environmental laws which came into effect in the late 90’s had a severe impact on Yamaha India. The government then, decided to impose a ban on all the 2 stroke engines because they were not environment friendly. Yamaha had a serious challenge in terms of revamping the entire product line and launch environment friendly 4 stroke engines.
2000-2007
This development paved way for one of the most unsuccessful times in Yamaha india’s history.
It slowly moved from being a competitor in the mass market motorcycle segment to focusing on niche products for future growth.
They wanted to concentrate their efforts on brand building and enhancing its equity through new products and have a youth-centric approach.
Gladiator, Crux r, Enticer, Alba was some of the main bikes which were launched during this period. Challenges Faced
Yamaha india was reeling under a major crisis in 2007 with a stipulated loss of 336 crores in 2007. These products from Yamaha met with a lukewarm response in the market and were not able to make any impact on the market. Modern/ Revival Period The company is successfully cashing in on the current market sentiment of increasing tilt towards premium bikes, sales of which are growing y-o-y at 5 per cent
Premium bike sales have in the meanwhile leaped up to over 15 per cent of total sales during and are said to be still climbing.
Yamaha India launched two upmarket 150-cc models R15 and FZ, modelled after Yamaha’s highly successful 1000cc superbikes R1 and FZ1000, which gave it a new lease of life in the Indian market and was able to capture the market share. Yamaha is planning to expand its network to 2000 touch points in 2010 with a sales target of 3 Lakhs. Moreover, the company will focus on the 150cc+ segment to achieve a target of 25 % share in the near future. The current Strategies Include 1. Focus On Premium Segment of Indian Society.
2. Focus on Style & Racing (as It Is aiming at youths (Between the age of 18 – 35), as these young guns are very conscious of the style quotient and looking forward to their ride being a Personality Statement.
3. To make a trading path of buying the “Sport Bike” rather than a “utility Two Wheeler”.
4. To Become No. 1 in customer Satisfaction and is looking forward to providing the customer with an ‘experience’ with its products.
5. Strong Focus On technical Department.
6. To come up with as much as new model as it could so as to provide customer with a wide variety of choice.
7. The business strategies and principles of this company is customer fulfillment through quality service, research and development for introducing high end motorcycles and optimization of the working system
8. Yamaha has given a face to the brand by signing up with John Abraham who happens to be a youth icon, thereby improving the image and visibility.
9. The tag line “YES YAMAHA” aims to give a cult status to the brand there by positioning it as youthful and an exuberant one.
PRODUCT LINE: Segment | Yamaha's Models | Approx. On-Road price | Targeting | Positioning | Premium Segment | VMAX | 20,00,000 | Elite class | HighTech,Style,Power | | MT 01 | 10,50,000 | Elite class | HighTech,Style,Power | | YZF R1 | 10,62,853 | Elite class | HighTech,Style,Power | | YZF R15 | 1,03,000 | Upper middle class | High Style | Deluxe Segment | FZ | 65000 | Youngsters, College Goers | High Style,Good handling,comfortable ride | | FAZER | 72000 | Students | High Style,Comfortable ride | | FZ S | 75116 | Students | High Style,Good handling,comfortable ride | | FZ 16 | 73456 | Students | High Style,Good handling,comfortable ride | Executive Segment | G5 | 46200 | Middle Income, Working Professionals | Good style,high economy | | Gladiator SS | 52100 | Office Goers | Good style,high economy | | Gladiator RS | 52600 | Office Goers | Good style,high economy | Entry Level | Alba | 35200 | Low Income Group | Moderate Styling,High Economy | | YBR 110 | 41000 | Families,Office Goers | Good style,high economy | | Crux | 33400 | Low Income Group | Moderate Styling,High Economy |
STARS | FAZER QUESTION MARKS G5,GLADIATOR | R15,FZ CASH COWS VMax,MT01,YZFR1 | DOGS YBR CRUX,ALBA |
BCG MATRIX
MARKET
GROWTH
MARKET SHARE
COMPETITORS ANALYSIS (Players Operating in The Market)
1. Bajaj Auto Ltd.
Established in 1945 Bajaj Auto Ltd was incorporated as a trading company. Till 1959, they imported scooters and three-wheelers from Italy and sold them in India. The company got a production license in the year 1959 and fastened a technical collaboration with Italian PIAGGIO in 1960.
Bajaj Auto Ltd. is one among India's top ten companies in terms of market capitalization and among the top five in terms of annual turnover.
Today, the company has become a market leader. These days, Bajaj Auto Ltd. has started offering products in all segments (mopeds & scooterettes, scooters, motorcycles, three wheelers).
2. Hero Honda Motors Ltd.
Hero Honda Motors Ltd. is a result of the joint venture between India's Hero Group and Japanese Honda Motors Company in the year 1983. This joint venture has not only created the world's single largest two wheeler company but also one of the most successful joint ventures worldwide. Hero Honda is globally known of being the most fuel-efficient and the largest CBZ selling Indian Motorcycle Company. This is a relationship so harmonious that Hero Honda has managed to achieve indigenisation of over 95 percent, a Honda record worldwide.
The company is committed to provide the customer with excellence. A rich background of producing high value products at reasonable prices led the world's largest manufacturer of motorcycles to collaborate with the world's largest bicycle manufacturer. During 80s, Hero Honda became the first company in India to prove that it was possible to drive a vehicle without polluting the roads.
The unique features like fuel conservation, safety riding courses and mobile workshops helped the group reach in the interiors of the country. Well-entrenched in the domestic market, Hero Honda Motors Ltd. turned its attention overseas, and exports have been steadily on the rise.
3. Honda Motorcycles & Scooters India Private Limited
Established in 1999, the Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI) is a wholly owned subsidiary of Honda Motor Company Ltd., Japan and is located at Manesar, Haryana. The company's most well known brand is the Honda Activa that revolutionized the Indian scooterette market in terms of design and features. The company exports scooters to the European Union.
4. TVS Motor
TVS Motor is a leading and trusted two wheeler company began with the vision of TVS Scooty the founder of the Sundaram Clayton Group, the late T.S. Srinivasan - 'to design, develop and produce an affordable moped for the Indian family.' This vision was realized in 1980 when TVS 50, India's first two-seater moped rolled out of the factory at Hosur in Tamil Nadu, Southern India.
The company has been known for its ruggedness and reliability.
TVS Motor has continually worked on innovation of the motorcycle segment along with two wheeler range. The Suzuki Shaolin, developed by TVS Suzuki is India's first 5-speed, 140 cc motorcycle. Another example of the company success is TVS Scooty, a 60 cc Scooterette which keep one step ahead of its time in India..
The company is the third largest two-wheeler manufacturer in India and ranks among the top ten globally. The company was the first in India to launch 2-seater 50cc moped and 100cc Indo-Japanese motorcycles. At present TVS Apache, TVS Victor, TVS Scooty, TVS Centra and TVS Fiero are the popular bikes in Indian market.
5. Royal Enfield Motors Ltd.
Established in 1955, Royal Enfield was the brand of the Enfield Cycle Company. Royal Enfield is one the oldest bike on the road. The company is well known for producing motorcycles, but they also produce bicycle, stationary engines, lawnmowers and rifle small parts for the Royal Small Arms Factory in Enfield. In 1990, Royal Enfield entered into a strategic alliance with the Eicher Group, and later merged with it in 1994. The annual turnover of the company is Rs.10 billion. The Eicher Group has a range of interests in the automotive industry, including small trucks, tractors, exports, automotive gears, management consultancy and cartography.
The corporate philosophy of Royal Enfield Motors Ltd. is built around quality and unflinching loyalty to the customer, a few reasons why the legendary Bullet is not just a bike but a motorcycling icon. The ruggedness and reliability of the bike is endorsed by the army, the police, the paramilitary forces and over 500 institutions which form part of the die-hard customer base of the Bullet, dubbed the "Rajagadi", or royal vehicle.
Segment | Yamaha's Models | Bajaj's Models | Hero Honda's Models | TVS models | Royal Enfield's Models | Honda | Premium Segment | VMAX, MT 01,YZF R1, YZF R15 | Avenger,Pulsar 220,Pulsar 200 | Karizma, Karizma ZMR | Hayabusa, Intruder | Bullet 350, 500, Deluxe, Electra, Machismo, Lightning, Thunderbird | - | Deluxe Segment | FZ, FZ S, FAZER, FZ 16 | Pulsar 150 | Hunk, CBZ-Extreme | Apache RTR 180,160;GS 150R | - | Unicorn | Executive Segment | G5, Gladiator SS, Gladiator RS, | Discover 135, KB 125, Wind 125, XCD | Glamour, Glamour FI | Flame,Star City | - | Shine,Stunner CBF,Stunner CBF FI | Entry Level Segment | YBR 110, Alba, Crux | CT 100, Platina | CD Dawn, CD Deluxe, CD 100, CD 100 SS, Splendor, Passion, Passion +, | Centra,Fiero,Samurai, Victor | - | - |
SWOT ANALYSIS FOR YAMAHA INDIA MOTORS:
Strength * Size and scale of parent company. * Effective Advertising Capability * Committed and dedicated staff. * High emphasis on R and D. * Experience in the market. * Established brand. * Established market channel. * Power, Speed & Acceleration | Weaknesses * Small showrooms. * Not much emphasis on aggressive selling. * Weak product diversity. | Opportunities * Growing premium segment. * Global expansion into the Caribbean & Central America. * Expansion of target market (include women). * Increasing dispensable income. * 1st mover advantage. | Threats * Cut throat competition * Increasing number of players in the market * Rising raw material costs * Increasing rates of interest on finance |
FUTURE LAUNCHES:
YAMAHA R125
The most advanced 125 production super sport machine that Yamaha will launch in 2009 will be YZF-R125. This radical, high-revving, fuel-injected 125 is the work of the same engineers who created our legendary YZF-R1 and YZF-R6 super sport bikes.
Main Features of Yamaha R125:
-Liquid-cooled single-cylinder 4-stroke
-SOHC 4-valve cylinder head
-Wet-sump lubrication system
-Fuel injection
-Electric start
-6-speed transmission
-R6-style mid-ship muffler
-Dual catalysers
-Air Induction system
Expected In: July, 2011 YAMAHA R6
What you will feel when you on Yamaha's new R6 a quick progress, not rapid, beneath 70 mph in top, however rest over the legal limit insignificant six takes off as if a scolded cat without so a lot of as a down shift. Drop to moment at this speed and you will find yourself looking at the sky as everything disappears behind you at an alarming rate and it will be interesting to see what the six will do in the quarter mile.
ENGINE SPECIFICATIONS
Displacement: 599cc
Engine: 4-stroke, 4-cylinder, 16-valves, D0HC
Maximum Power: 127 Bhp @ 14500 rpm
Maximum Torque: 65.8 Nm @ 11000 rpm
Gears: 6 Manual
DIMENSIONS
Length: 2040.00 mm
Width: 705.00 mm
Height: 1100.00 mm
Weight: 185.00 kg
Ground Clearance: 130.00 mm
Fuel Tank: 17.30 ltrs
Wheelbase: 1380.00 mm
Wheel Type: Alloys
Expected In : July, 2011
YAMAHA GLADIATOR 165
Yamaha's 165cc Gladiator will develop around 16.5 PS and complete a 0 – 60 sprints in less than 5 seconds and it believed that Yamaha has already sent the bike for homologation and will launch its mid Next Year. Bike was first displayed in last year’s Auto Expo.
ENGINE SPECIFICATIONS
Displacement: 165cc
Engine: Air-cooled, 4-stroke, SOHC, 2-valve
Maximum Power: 15 Bhp (Expected)
Maximum Torque: 14 Nm ( Expected) gears: 5 Speed
DIMENSIONS
Length: 2065.00 mm
Width: 730.00 mm
Height: 1100.00 mm
Ground Clearance: 155.00 mm
Fuel Tank: 13.00 ltrs
Wheelbase: 1300.00 mm
Expected In : July, 2011
RECOMMENDATIONS:
* SHOULD IMPROVE THE AFTER SALE SERVICES: Yamaha should increase the number of service centers as the ratio of the number of service centers to the number of bikes is lower than its competitors. This is the major drawback in capturing the market share so Yamaha should take some better steps to satisfy and retain their customers. * AGGRESSIVE SELLING: The Company should follow an aggressive selling concept. A non-aggressive selling concept which is clearly visible in its advertising campaign which does not hit the customer. Emotional advertising which is the norm in India and which is very successful is not followed. * VARIETY IS NEEDED TO BE PROVIDED: Yamaha at the moment has a very weak product portfolio and its products are not that visible in the market or displays in dealerships except the FZ series and R15. The lack of product range visibility in dealerships and in the media and advertisements is adversely affecting the brand of Yamaha. * BRAND EXPOSURE SHOULD BE INCREASED TO TAP THE NICHES : There is a large market of unsatisfied customers in India. This effort would be in the direction to capture the unsatisfied customers and who are willing to change their brands on bike replacement.
* FOCUSSED ADVERTISEMENT ON PRODUCT USP: The maximum demand among customers constituting the target market of India Yamaha Motors is for the power and style features of bikes. Hence, the company should produce products keeping the above factors in mind. 