How is Bajaj Auto's approach to branding it's 2/3 Wheelers different from its peers?
Automobile companies have a parent brand viz. the company and product brand with the parent brand higher in terms of positioning on the product. Bajaj Auto has adopted a contrarian approach...
On 16th Dec, 2024, in an interview with CNBC-TV18, Rajiv Bajaj the MD of Bajaj Auto said "Just the way the company's electric scooters are sold under the Chetak brand, the electric three-wheeler portfolio too, will get a separate brand identity and the company will soon launch a series of products for the commuter and cargo segment under the new brand identity”
What does different Brand identity mean in the context of 2/3 wheeler companies in India and is the different brand strategy only for Electric 2/3 W for Bajaj or even for ICE (Internal Combustion Engine) products?
2 Wheeler ICE
The major players in this category are Hero, Honda, Bajaj, TVS with Yamaha, Royal Enfield and few others relatively smaller companies. The segment100 to 125 cc and above is 85% of the total Indian Bike market as per public reports. Hero has the highest volumes, followed by Honda, TVS and Bajaj. For Hero and Honda, the bulk of sales in Bikes is in the < 125 cc segments.
Note the difference in the way the brand is positioned on the bike between different companies in the 2 pictures:
Picture 1 - Bajaj bikes have the product brands(Pulsar/Platina) on the fuel tank (the most prominent/visible place where the brand is displayed) and the name/logo of Bajaj positioned lower down on the engine and in smaller font. This is across all Bajaj ICE Bikes, indicating that the product brand is more important than the company brand. This approach is adopted even for the 100 to 125 cc bikes viz. Platina/CT where it has a very small presence
Picture 2 - Hero and Honda have the parent company name/logo prominently on the fuel tank with product brand Splendor or Shine downplayed. Similar approach is also followed by TVS where its logo of “swift steed” prominent on fuel tank. Even Royal Enfield for most of its top selling bikes follows the same approach with company name prominent on fuel tank. Hero for its higher end Bikes follows the branding approach as that of Bajaj. But 85% of Hero sales are the 100-110 cc bikes where the company name is prominent in the product. Ditto for Honda
In the scooter segment, the largest selling by a wide margin is Activa from Honda, where the Activa Brand is as prominent or more than the parent brand Honda
3 wheeler ICE
The major companies are Bajaj with 70-75% share followed by TVS and Piaggio
Bajaj has branded the 3 wheeler ICE as RE which is prominently displayed on the front and back of the vehicle with Bajaj in much smaller font. Bajaj has close to 80% market share in 3 wheeler ICE
RE was positioned as the “mother brand” for 3W ICE. However more recently with launch of wider Auto, an alternate product brand Maxima has been created. In both RE and Maxima, the branding approach is similar with Bajaj logo in much smaller font and RE/Maxima prominent.
TVS and Piaggio on the other hand have the company brand prominently displayed with product brand King and Ape in smaller fonts
Bajaj had earlier branded the 3 wheeler showrooms also as RE and not Bajaj, but this has been reverted to Bajaj now
RE history is rooted in the 3W history in India. Many years back 3W used to have engine in the front. These vehicle did not provide a comfortable ride for 3 people. Bajaj innovated and the engine went to the rear side of the 3W, it now provided comfortable ride and also 3 people sitting without squeezing. Since the engine was on the rear, hence to differentiate from front engine 3W, the brand RE(Rear Engine) was coined by Bajaj for the product and then over time it became the brand for Bajaj 3W.
Electric 2W
The major players in Electric 2W are Ola, TVS, Bajaj, HeroVida, Hero, Ather
Picture 4 - Bajaj has branded the Electric 2W as Chetak with Bajaj name underplayed significantly. The website and home page is also branded as Chetak with Bajaj under played. The showrooms are also branded as Chetak showrooms and NOT Bajaj Auto showrooms. Thus it has a created a distinctly different brand for Electric 2W
Picture 5 - Hero Electric, Hero Motocorp, TVS have the parent brand prominent viz. Hero, TVS etc. while the product brand is smaller (TVS iQube) This is across website, showrooms and product
There are 2 Hero brands (Hero and Vida powered by Hero ), but not to confuse them, they are competing products from different companies (Hero Electric and Hero Motocorp) owned by two separate arms of Munjal family.
The Electric 2W market is currently undergoing churn and traditional 2W ICE companies like Bajaj, TVS and Hero Motocorp are gaining larger pie of the market, but with contrasting brand strategies
Electric 3W
Bajaj currently has branded the Electric 3W as RE. But as we read earlier, Bajaj is planning to introduce a new brand for Electric 3W thus planning to continue its approach different from the other Industry players.
What is the pattern that we notice?
Bajaj over the years has followed branding strategy for both 2 & 3W (ICE/Electric) which is focused on the product brand and parent Bajaj name is under played
In contrast the other large companies in both 2 and 3W (ICE/Electric) have stayed focused on positioning the parent company name as prominent brand for selling in the highest volume segments in both 2 and 3W along with smaller focus on product brands and again this pattern is over the years
The exception being is much smaller (in the overall 2W ICE) segments of 150 cc and above, where TVS, Hero and Honda follow a similar brand positioning like Bajaj.
Bajaj is 4th in market share in 2W ICE, but in 3W ICE, it is a dominant player and in 2W Electric moving up in ranking very fast. Bajaj has been amongst the No. 1 or 2 in the higher cc bike segments (segment with 15%-20% of the market)
The question therefore is does the customer decide on Pulsar or Platina or Chetak or RE or does the customer focus on Bajaj vs Hero vs Honda vs TVS as key buying decision making parameter apart from 100c/125cc/150cc etc.? And is Hero or Honda success in 100-110 cc or is Bajaj success in 150 cc+ and 3W due to the brand positioning?
My views are:
Irrespective of the brand strategy followed, customers consider the parent company for 2/3W because:
These are used every day and hence the performance or quality becomes very critical in these products
These products have useful life of 8 to 10 years, hence availability and quality of service infrastructure become very important.
On both these aspects, the parent company image is very crucial parameter in the eyes of the buyer
If one product is of poor quality or service infrastructure is poor, the image rubs off on the entire portfolio of the company.
Even for 3W which is a commercial use as against private use in 2W, the owners evaluate the company as the key buying decision. I have personally spoken to many 3W owners/drivers and they know it more as Bajaj than RE/Maxima. Their decision is Bajaj vs TVS vs Piaggio vs Mahindra
Many of you are owners of these 2W from different companies. what was your purchasing decision based on? Do share your views and add to the insights.
On a parting note: In the Automobile world, there are few iconic product brands which have stood out over the parent company name. Jeep (Chrysler to FCA to Stellantis) is an iconic name and some people swear by it. Similar successes have been of Range Rover from JLR and Beetle from VW, brands which have a high recall and preference on a standalone basis. In 2W in India, Activa can be considered to be a Brand with high recall and preference
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