A DISSERTATION REPORT

ON

“Industrial Exposure of Royal Enfiel”

BACHELOR OF BUSINESS
ADMINISTRATION (BBA)
(Affiliated to Mahatma Gandhi Kashi Vidyapith Varanasi,
Uttar Pradesh)

BATCH- 2021-2024

Under Supervision of: Submitted By:

MR, VEERESH TRIPATHI DEEPAK KR SONKAR

ASSISTANT PROFESSOR STAGE III BBA VITH Semester
SMS VARANASI ROLL.NO:-BBA2125073
 ACKNOWLEDGEMENT

First, I would like to thank almighty for keeping me healthy and

active because of which I was able to complete my project

successfully.

I express my greatest gratitude to our Prof. P.N. JHA

(Director) of SMS, Varanasi who gave me such a great

opportunity to work on a project where I can show my

creativity, my mentor Veeresh Tripathi .SMS Varanasi for

providing me knowledge, guidance, and full cooperation

extended during the perusal of my project.

And at the last but not the least I would like to thank Mr. Atish

Khadse Coordinator of BBA, SMS VARANASI who helped me and

enlighten my path. This report is the outcome of the support which

I have received from people directly or indirectly.

Finally, I would like to show my gratitude to all my family

members, friends, faculty members of SMS, Varanasi whose

guidance have helped to complete this report.

Thanks!
 DECLARATION

I,DEEPAK KR SONKAR student of School of

Management Sciences Varanasi. Hereby declare that I

have completed the project business model under the

guidance and support of VEERESH TRIPATHI

The information that I have written in this project is

original to the best of my knowledge. The content that

I am sharing is not copied and is written by myself.

 PREFACE

BBA is a stepping stone to the management career . In order

to achieve practical, positive and concrete results, the
classroom learning needs to be effectively fed to the realities
of the situations existing outside the classroom.

This is particularly true of management. Management

students have good conceptual knowledge of business
activities is somewhat in adequate. Doing a project work on a
particular topic needs a lot of detailed study. It gives a better
understanding and knowledge. As a part of curriculum, it is
exigent for the students pursuing the course to do a
Dissertation project in this course. The study project
undertaken was on the topic: -

“Industrial Exposure of Royal Enfield”

ROYAL ENFIELD
COMPANY

5
 CONTENTS

Page No.

Chapter 1: Introduction to Company ................................... 1

1.1 Nature of Business ................................................................................ 3

1.2 Type & ownership Pattern..................................................................... 5

1.3 Organizational Structure.......................................................................10

1.4 Production Lay out ............................................................................... 11

1.5 Organisational Policies ......................................................................... 12

Chapter 2: Industrial Analysis ............................................ 15

2.1 Industry Overview ................................................................................ 16

2.2 Current Issues ....................................................................................... 18

2.3 Key Competitors....................................................................................20

2.4 Environmental Scanning ....................................................................... 22

2.5 Porters five forces model of competition –Michael Porter .................. 24

Chapter 3: Marketing Strategies..........................................25

3.1 Products of Company ............................................................................ 26

6
3.2 Ps (Product: Price, Place & Promotion). ................................................ 31

3.3 STP (Segmentation, Targeting and Positioning). ................................... 33

3.4 Distribution Channels ........................................................................... 34

3.5 Promotion Strategies ............................................................................. 37

Chapter 4: Financial Analysis ................................................. 42

4.1 Sources of Finance. ................................................................................43

4.2 Ratio Analysis –Any 5. ......................................................................... 44

4.3 Net Profit/ Balance sheet (from annual report) –Analyse. ..................... 46

Chapter 5: Key Learning’s from the Company and

Recommendations ........................................................................ 48

5.1 Performance Analysis of the Company.................................................. 49

5.2 Reasons for the expansion/contraction/diversification of Company ....... 50

5.3 Comment on Organizational Leadership................................................. 53

5.4 Market share/growth rate of Company................................................... 58

5.5 SWOT Analysis of the Company ........................................................... 60

Chapter 6: Findings ............................................................... 62

6.1 Finding ...................................................................................................63

7
Chapter 7: Conclusions and Suggestions ................................ 66

7.1 Conclusions ............................................................................................... 67

7.2 Suggestion ................................................................................................. 67

Bibliography .................................................................................... 69

8
 Chapter 1:

Introduction to Company

1
1. INTRODUCTION TO COMPANY
THE BEGINNING
The Enfield Cycle Company made motorcycles, bicycles, lawnmowers and
stationary engines under the name Royal Enfield out of its works based at
Redditch, Worcestershire. The legacy of weapons manufacture is reflected in
the logo comprising the cannon, and the motto "Made like a gun". Use of the
brand name Royal Enfield was licensed by the Crown in 1890.

THE EARLY YEARS

In 1909 Royal Enfield surprised the motorcycling world by introducing a small
Motorcycle with a 2 ¼ HP V twin Motosacoche engine of Swiss origin. In 1911 the
next model was powered by a 2 ¾ HP engine and boasted of the well known
Enfield 2-speed gear. In 1912 came the JAP 6 HP 770 CC V twin with a sidecar
combination. It was this motorcycle which made Enfield a household name.
1914 saw the 3 HP motorcycles this time with Enfield’s own engine which now
had the standardised Enfield paint scheme of black enamelled parts and green
tank with gold trim.

BETWEEN THE WARS

At the time of the outbreak of WW I Royal Enfield supplied consignments of their
6 HP sidecar Outfit motorcycles with Stretchers to the Crown. This same
motorcycle also came with a Vickers machine Gun sidecar attachment which
could also be turned skywards and used against low flying aircraft. Royal Enfield
supplied large numbers of motorcycles to the British War Department and also
won a motorcycle contract for the Imperial Russian Government.

THE INDIA CONNECTION

Royal Enfield motorcycles were being sold in India ever since 1949. In 1955, the
Indian government started looking for a suitable motorcycle for its police forces
and the army for patrolling duties on the country's border. The Bullet 350 was
chosen as the most suitable bike for the job. The Indian government ordered 800
of these 350 cc motorcycles, an enormous order for that time. Thus In 1955, the
Redditch Company partnered with Madras Motors in India to form what was
called 'Enfield India' to assemble these 350 cc Bullet motorcycle under licence in
erstwhile madras (Now called Chennai). As per their agreement Madras Motors
owned the majority (over 50%) of shares in the company. In 1957 tooling

2
equipment was also sold to Enfield India so that they could manufacture
components and start full-fledged production. The Enfield Bullet dominated the
Indian highways and with each passing year its popularity kept rising.

THE EICHER CHAPTER

In 1990, Enfield India entered into a strategic alliance with the Eicher Group, and
later merged with it in 1994. It was during this merger that the name Enfield India
changed to Royal Enfield. The Eicher Group is one of India's leading automotive
groups with diversified interests in the manufacture of Tractors, Commercial
Vehicles, Automotive Gears, Exports, Garments, Management Consultancy and
Motorcycles. Since then, the Company has made considerable investments in
modernizing its manufacturing technology and systems. In 1996, when the
Government decided to impose stringent norms for emission Royal Enfield was
the first motorcycle manufacturer to comply, a tradition which has stuck on thus
making emission norms being one of the most important factors the company
focuses on.

1.1) Nature of Business

The Indian government looked for a suitable motorcycle for its police and army,
for patrolling the country's border. The Royal Enfield Bullet was chosen as the
most suitable bike for the job. The government ordered 800 units of the 350 cc
model. In 1955, the Redditch company partnered with Madras Motors in India to
form 'Enfield India' to assemble, under licence, the 350 cc Royal
Enfield Bullet motorcycle in Madras (now called Chennai). The tooling was sold
to Enfield India so that they could manufacture components. By 1962, all
components were made in India. The Indian Enfield uses the 1960 engine (with
metric bearing sizes), Royal Enfield still makes an essentially similar bike in the
350 cc and 500 cc models, along with several different models for different
market segments.

In 1990, Royal Enfield collaborated with the Eicher Group, an automotive

company in India, 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. Although Royal Enfield experienced difficulties in the 1990s,
and ceased motorcycle production at their Jaipur factory in 2002, by 2013 the
company opened a new primary factory in the Chennai suburb
of Oragadam on the strength of increased demand for its motorcycles. The

3
original factory at Tiruvottiyur became secondary, and continues to produce
engines and some motorcycle models. In 2014 Royal Enfield appointed Pierre
Terblanche as the head of new product design.

In January 2015, the company announced the appointment of Rudratej ‘Rudy’

Singh as President of Royal Enfield. Singh was previously a Vice President
of Unilever in Singapore. Royal Enfield announced its first takeover of another
company in May, 2015 with the purchase of a UK motorcycle design and
manufacturing firm, Harris Performance Products that had previously developed
the chassis of the Royal Enfield Continental GT Cafe Racer.
Royal Enfield currently sells motorcycles in more than 50 countries. Royal Enfield
surpassed Harley-Davidson in global sales in 2015.

In August 2015, Royal Enfield Motors announced it is establishing its North

American headquarters and a dealership in Milwaukee, Wisconsin, with the
intention to offer three bikes, the Bullet 500, Classic 500 and Continental GT 535
Cafe Racer as they feel this engine size represents an underserved market. The
dealership will be Royal Enfield's first company-owned store in the U.S.,
according to Rod Copes, president of Royal Enfield North America.The
company wants to establish about 100 dealerships in American cities starting
with Milwaukee.

"I live here, so I am biased. But in my mind, Milwaukee is kind of the center of
motorcycling in the United States," said Copes, a former Harley-Davidson
executive. "We view this as kind of our first flagship dealership," he added.
Later in August 2015, parent-business Eicher announced its entry in Indonesia as
a part of its global strategy in the mid-sized (250-750 cc) motorcycle segment,
initially starting retail operations from a dealership in Jakarta. From April to
September, 2015, Royal Enfield's domestic sales were 50% higher than the
previous year, despite a declining motorcycle market in India.

Although Enfield sold its first bike in India in 1949, it was not before 1955 that
India's own Royal Enfield manufacturing establishment came into existence. In
1955, Redditch Company and Madras Motors became partners and formed
Enfield India, which is currently based in Chennai. The present day Royal Enfield
company is a subsidiary of the Indian automobile stalwart Eicher Motors Limited.
Dr. Venki Padmanabhan is the CEO of Royal Enfiled India. Royal Enfield has
been the most trusted high capacity bike and the most favourite of the Indian

4
government for the past six decades. The Government of India had a
requirement of a powerful, high capacity, strong and reliable vehicle for the
Indian Army and Indian Police for patrolling purposes. Royal Enfield was the
name the Indian government counted on. In 1965, 800 350cc Royal Enfield Bullet
model units were ordered by the Government of India. The original Enfield
Manufacturing Company Limited went defunct in 1971; however, Enfield India
just kept on growing in stature and repute.

1.2) Type & ownership Pattern

Royal Enfield is an Indian motorcycle manufacturing brand with the tag of "the
oldest global motorcycle brand in continuous production" manufactured in
factories in Chennai in India. Licensed from Royal Enfield by the indigenous
Indian Madras Motors, it is now a subsidiary of Eicher Motors Limited an
Indian automaker. The company makes the Royal Enfield Bullet, and
other single-cylinder motorcycles. First produced in 1901, Royal Enfield is the
oldest motorcycle brand in the world still in production, with the Bullet model
enjoying the longest motorcycle production run of all time.

Ownership Pattern

1. It is non government based company the contribution for company is by

the owner of the company.
2. The entire uninon is controlled by the chairman of the company

5
 Fig 1.1.1

fig 1.1.2

Mr. Siddhartha lal

Siddhartha Lal, Managing Director and Chief Executive Officer of Eicher Motors,
was named the EY Entrepreneur of the year 2018, India at the annual awards
ceremony this evening.

6
45 year-old, Siddhartha Lal has led an impressive transformation at Eicher Motors
since he took over the reins in 2006, helping the company resurrect the Royal
Enfield motorcycle brand in India and establishing it as a global brand icon.
Lal will now represent India to compete for the coveted EY World Entrepreneur
of the year (WEOY) award at the annual WEOY event in Monte Carlo from 6-8
June, 2019.

EOY is a global business award program which is celebrated across 60 countries.

Fig 1.1.3

Mr. S. Sandilya

Mr S. Sandilya is presently Chairman, Eicher Group His working career spans over
44 years. He started his career in 1969 with DCM group of companies at their
Group Headquarters in the Finance function. After a year's stint with DCM he
joined Union Carbide where he worked for five years in three locations namely
Delhi, Kolkata and Chennai in Systems as well as Finance and Accounts.

He has been a part of the growth journey of the Group and held various
positions in different business units. He was the Managing Director of Eicher
Motors Limited, the Commercial Vehicles Manufacturing business unit of the
Group till 1998 before moving to the Group Office to take responsibility for
Group Finance and Strategic Planning in addition to being the MD of Eicher
Motors. He was appointed Group Chairman and CEO in April 2000. The group's
portfolio at that time included Agricultural tractors, Commercial vehicles,
Motorcycles, Engineering Components, Engineering Solutions and Business
Consulting Services. He is the Non-Executive Chairman from 2006 after
superannuation.

7
 Fig 1.1.4

Mrs. Manvi Sinha

Ms. Manvi Sinha is INDEPENDENT DIRECTOR, EICHER MOTORS LTD and television
journalist/ anchor and is presently working as consulting anchor with Times
Global Broadcasting. Ms. Sinha has over 16 years of experience in television
news/ media including a 5 year stint as the presenter of the prestigious India
Business Report on BBC World. She has also been the Managing Editor of NDTV
Profit.
A graduate in economics from St Stephen's College, Delhi University, Ms. Sinha
combines a sound academic background with rich journalism experience.

Fig 1.1.5

Mr. Inder Mohan Singh

Mr. Inder Mohan Singh is INDEPENDENT DIRECTOR, EML and fellow member of
the Institute of Company Secretaries of India, a law graduate from Delhi
University and a postgraduate in Finance. Mr. Singh is a Partner with
ShardulAmarchandMangaldas& Co., a leading law firm and specialises in
8
various practice areas including General Corporate, Mergers & Acquisitions,
Private Equity, Corporate Governance and Education. Mr. Singh has vast
experience in the automobile industry especially in matters related to joint
ventures, distribution networks, business transfers and technology licensing issues.
He has worked across industries including cement, media and entertainment,
telecom, real estate and the education sector.In the past, Mr. Singh has also
worked with Eicher Motors Limited as Head-Legal & Secretarial department.

9
1.3) Organizational Structure

Fig 1.3.1

10
1.4) Production Lay out

Fig 1.4.1

Fig 1.4.2
11
1.5) Organisational Policies

COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND

REMUNERATIONcompany's iring & Employment Policy

A number of factors are considered towards selecting candidates at theBoard

level which include Ability to contribute to strategic thinking Proficiencyin
Governance norms policies and mechanisms at the Board level Relevant
crossindustry/functional experience educational background skills and
experience Whereverrelevant independence of Directors in terms of applicable
regulations.

It is expected that the Individual Board members are willing to learnthe business
of the Company and to devote the necessary time and effort to bewell-
informed.

With respect to core competencies and personal reputation ourpractices

ensure through the selection process that all

Directors

Exhibit integrity and accountability Exercise informedjudgment Are financially

literate Are mature and confident individuals

Operate with high performance standards

Removal of Directors

Under extreme circumstances and in highly unusual situations it maybecome

necessary to remove a member from the Board of Directors. Reasons for doing
so mayrelate to any of the following (indicative other than as provided under
the Companies Act2013)

i. Breach of confidentiality in anyway ii. Failure to meet obligatoryprocedures in

the disclosure of conflict of interest

12
iii. Failure to fulfil the fiduciary duties of a Director for the

Company

iv. Acting in any other manner which is against the interests of theCompany

company's Remuneration Policy

The Company's Compensation Strategy defines the principlesunderlying

compensation philosophy for its employees.

Compensation is a critical piece of overall human-resources strategyand

broadly refers to all forms of financial returns and tangible benefits that
employeesreceive as a part of their employment relationship.

The Remuneration/Compensation Policy of the Company is designed toattract

motivate and retain manpower. This Policy applies to Directors and
SeniorManagement including Key Managerial Personnel (KMP) and other
employees of the Company.

The remuneration of the Managing Director Executive Director KMPs andCXOs

of the Company is recommended by the Nomination and Remuneration
Committee based oncriteria such as industry benchmarks the Company's
performance vis--vis the industryresponsibilities and performance assessment.
The Company pays remuneration by way ofsalary perquisites and allowances
(fixed component) incentive remuneration and/orcommission (variable
components).

Loans/ advances may be extended to employees below the executive

levelsubject to approval of Human Resources department. The maximum
amount of loan/ advancethat can be granted to an employee shall not
exceed one month's gross salary or Rs.40000 whichever is higher.

Additionally in the event of exigencies arising due to calamities theCompany

may provide financial assistance to any affected employee by way of
extendinginterest-free loan for an amount not exceeding his/her two months'
gross salary.

13
Remuneration by way of commission to the Non-Executive Directors shallbe
decided by the Board of Directors within the ceiling of a sum not exceeding 1
per annumof the net profits of the Company calculated in accordance with the
provisions of the Actand as approved by the members from time to time by
passing a resolution in the generalmeeting.

Remuneration of KMPs and employees largely consists of basicremuneration

perquisites allowances performance incentives and employee stock
optionsgranted pursuant to the Employees Stock Option Plan of the Company.
The components ofremuneration vary for different employee levels and are
governed by the compensationtrends in the industry qualifications and
experience of the employee and his/herresponsibility areas employee
performance assessment etc.

14
 Chapter 2:

Industrial Analysis

15
2.1) Industry Overview

Licensed from Royal Enfield by the indigenous Indian Madras Motors, it is now a
subsidiary of Eicher Motors Limited, an Indian automaker. The company makes
the Royal Enfield Bullet, and other single-cylinder motorcycles.
Founded: 1955 as Enfield India
Headquarters: Chennai, India
Parent: Eicher Motors

Growth rate of Royal Enfield

Fig 2.1.1
Royal Enfield, the premium bike brand from Eicher Motors, is expecting to close 2018-19
with a sales figure of about 9,25,000 units, posting a growth of 12.7 per cent over 2017-
18 when it sold 8,20,121 units.

16
The growth trajectory for the “oldest motorcycle brand in continuous
production” has been somewhat tempered by floods in Kerala, its key market, a
workers' strike and suppressed demands due to ABS and BS VI regulations kicking
in.

Rolling out the Interceptor INT 650 and Continental GT 650 motorcycles in
Calcutta on Thursday, Rudratej Singh, president of Royal Enfield, said: “We will
be growing faster than the market which is at a high single-digit growth. We had
a 35 to 40 per cent growth over a three-year period.”

“At present, we have a market share of 6.5 per cent with a 91 per cent market
share in the middle-weight category where we operate. But more than the
physical market share we are building on the brand share, where we track how
people find the brand and how the brand recognition is among buyers. There
we have a 25-to-30-per- cent share,” Singh added.

Royal Enfield has products in the category ranging from 250cc to 750 cc with
the 650 cc twins being the largest displacements in the Enfield portfolio.

“The multi-cylinder 650 cc is the largest displacement bike that is engineered in

India,” said Singh.

17
2.2) Current Issues

Strike hits production at Chennai plants of Royal Enfield, Yamaha

fig 2.2.1

Production at the plants of two-wheeler majors — Royal Enfield and Yamaha

India — in the auto cluster of Oragadam near here was affected after workers

of both companies struck work, according to union sources.

“The strike started this morning with members of Royal Enfield Employees’ Union,

who applied for registration, demanding a settlement on their charter of

demands, including wage increase,” said R Sampath, Vice-President, Working

People Trade Union Council and Vice-President of Royal Enfield Employees’

Union.

Sampath claimed that production was stopped at the plant with both

permanent employees and contract labourers participating in the strike since

morning.

18
The company had invested ₹150 crore in the Oragadam plant, which has an

installed capacity of 150,000 units to produce the entire range of Royal Enfield
motorcycles. “Every day, around 750 vehicles are produced. However, not a
single vehicle has came out today,” Sampath told BusinessLine.

Sampath alleged that the company has neither confirmed nor terminated

nearly 120 employees who were on probation. They were also not allowed to

enter the plant. The company has also not reverted on the workers’ various

demands, including that of wage increase.

On August 13, a strike notice was served on the company and a conciliatory

meeting was called by the Labour Department. However, it is alleged that on all

three occasions, the company officials did not turn up for the meetings. “We

were left with no option but to resort to strike,” said Sampath.

At the Yamaha India plant, a strike by nearly 700 workers affected production.

“Only 40 per cent production is going on,” said S Kannan, Kanchipuram District

President of CITU, representing the striking workers.

Kannan alleged that there was a sudden sit-in strike on September 21 following

the termination of two workers belonging to newly-created India Yamaha Motor

Thozhilalar Sangham (India Motor Workers Association), which is being

registered. The workers were allegedly terminated for approaching the Labour

Department to discuss matters related to the welfare of workers.

Backing the two, 800 permanent workers went on a sudden strike and even

slept inside the factory last night as a mark of protest. However, over 2,000

contract workers continued to work, but were doing only reassembling work, he

said.Yamaha did not reply to emails for a comment.

19
Royal Enfield's response

A spokesperson for Royal Enfield said that at Oragadam today, a majority of

associate engineers are fully engaged in performing their roles; some of them

did not report for work, though they were present in the facility. "We have forums

that address matters related to the well being of workmen and are working to

understand the issue that compelled a few workmen to refrain from reporting for

work today. We are hopeful of arriving at a mutually beneficial solution."

(This news report was modified on September 25, 2018, to add Royal Enfield's

response)

2.3) Key Competitors

I. Spectro Ametek

II. Honda

III. Bajaj

IV. Piaggio

V. Toyota

VI. Yamaha

VII. Nissan

VIII. Hero

IX. Ford

X. Tvs

20
Competitors analysis

Fig 2.3.1

21
2.4) Environmental Scanning
To analyse the macro and micro external environment with the help of tools like
PESTEL

A) Political Analysis:

➢ The possible passing and ratification of the goods and service Tax bill, will

resilt in the reduction of interstate and entry taxes

➢ This will facilitate Royal Enfield in transporting its motorcycles at a lower

cost

➢ This benefit, maybe passed on tp the consumer or can directly add to the
profits of the company, both of which are a positive aspects for Royal
Enfield

B) Economic Analysis:

➢ Over the years the purchasing power of the india middle class has risen
substantially

➢ There has been no substantial change in the price of the motorcycle

➢ Resulting in the consumer base of Royal Enfield motorcycle has expanded

to the middle class from the higher middle class

C) Socil Analysis:

➢ Royal Enfield has over the year has organized cross country trips

➢ These trips has provided the youth with a sense of empowerment, self-
independence, legacy and pride

22
 ➢ This strategy has also helped the brand of Royal Enfield create a legacy of
loyal Royal Enfield motorcycle enthusiast

D) Thecnological Analysis:

➢ Since its inception, the company has continuously upgraded itself with
respect to the technology it employs in the manufacturing and improving
the fule efficiency of the motorcycle it produces

➢ It has also adapted to the marginal change I customer tastes and

preferences

➢ This has kept the company competitive in the face of other brands
entering the market with cheaper and fule-efficient motorcycle

E) Environmental Analysis:

➢ Royal Enfield motorcycle currently adheres to the Bharat Stage 4 emission

norms

➢ This being said the company will have to redesign the technology

incorporated in the motorcycle to comply with new wmission norms which

will be defined by Bharat Stage 6 emission norms, to be introduced in the

year 2018-19

F) Legak Analysis:

➢ Till data despite the merger with Eicher, there has been no major legal
issues encountered by the company or its motorcycle

23
2.5) Porters five forces model of competition –Michael
Porter

1. Threat of New Entrants: o with the increasing youth population of the country

and also the earning capacities of individuals rising; the consumer tastes and

preferences are bound to change and be volatile, resulting in a reasonable

high probability for a new entrant to enter the market.

1. Threat of Substitute Products of services: o Since Royal Enfield produces

motorcycle, ther is a large number od substitutes that are available to the

consumer such as scooters, certain cars in the same price range (TATA Nano),

but these again vary depending upon the objective the consumer is looking tp

satisfy with the purchase of the motorcycle, hence it can be inferrend that the

threat of substitutes range from medium tp reasonably high.

2. Bargaining Power of Buyers: o Since the options available to the consumer

are large the bargaining power of the consumer increases, but that depends

upon the objective consumer wishes to fulfill, hence the bargaining poer of the

buyer is reasonably high.

3. Bargaining Power of Suppliers: o Royal Enfield has the ability to make its

major components in house, and only procures its minor components from

outside vendors.

Sence there are many vendors who are willing and able to provide Royal

Enfield, the bargaining power od supp;oers is low.

24
 Chapter 3:
Marketing Strategies

25
3.1) Products of Company

Royal Enfield is associated with manufacturing and marketing of motorcycles as

it deals in the automobile sector. It started its operations as a manufacturer of
motorcycles for Indian Army. It is also involved in producing lawnmowers,
stationary engines, bicycles and rifles. Some of its well-known models are as
follows

Standard Street

• Bullet Electra 5S
• Bullet 350
• Bullet Machismo 500

Retro Street

• Classic 500
• Classic Battle Green
• Classic Chrome
• Classic Squadron Blue
• Classic 350
• Classic Desert Storm

Cruiser

• Thunderbird 500
• Thunderbird 300

Café Racer

• Continental GT

26
Royal Enfield Classic

City riders who take on the highways occasionally. Perfect for tarmac roads.

Fig 3.1.1

The Royal Enfield Classic is the modern version of the Bullet. It comes with
modern looks and yet retains a retro feel. The Classic range also comes in
unique colours like Desert Storm, Battle Green, Squadron Blue and good old
chrome. The bike gets similar 350-cc and 500-cc options

Royal Enfield Thunderbird

The touring packs. The Thunderbird can go the distance till you decide to stop

27
 Fig 3.1.2

The Royal Enfield Thunderbird was one of the first cruiser motorcycles to be
launched in India. It offers the retro looks of the Bullet but gets a comfortable
riding position that makes it the perfect choice for long-distance travellers. The
Thunderbird is quite heavy and is not perfect for uphill twists but there are
thousands of such bikes climbing the terrains of the Himalayas every year
without missing a thump

Royal Enfield Interceptor (upcoming)

People who want an elegant twin-cylinder bike.

Fig 3.1.3

28
The upcoming Royal Enfield Interceptor will be the first parallel-twin engine bike
from the brand, in recent times. The bike has been revealed completely and will
be launched soon in the Indian market. The 650-cc air plus oil cooled engine
produces a maximum of 47 Bhp and 52 Nm. It will be perfect for people who
want a fast bike for daily use and an occasional ride on open highways.

Royal Enfield Himalayan

People who seek adventure and want to explore new places

Fig 3.1.4

The Himalayan is the most affordable adventure bike that you can buy in the
Indian market. The Himalayan is quite popular among enthusiasts and Royal
Enfield launched a new version of the bike with critical changes that increased
its reliability. The is powered by an all-new 411-cc LS engine that develops a
maximum of 23 Bhp. The Himalayan gets 220 mm of ground clearance and has
the capability to hook your luggage panniers and jerry cans to it. It is the bike
that will take you to extreme locations.

29
Cast Iron Royal Enfield

Purists and enthusiasts who value vintage bikes

Fig 3.1.5

The cast iron Royal Enfield bikes are not available in the market anymore but
there are many used bikes that can be restored to its full glory. The cast iron
Royal Enfield bikes have a special charm of its own and get 'wrong' sided gear
lever and brake lever. Also, it gets things like CB point ignition, which have
changed in the newer generations of the bikes. Well, they may not be as
dependent as the modern bikes but they sure have the capability of charming
fellow road users.

30
Customised Royal Enfield

People who want to be unique

Fig 3.1.6

Royal Enfield bikes are one of the most modified ones in the Indian market.
Royal Enfield offers custom bikes after partnering with a few custom garages
and also keeps launching special factory-custom bikes like Mo Powa and Lock
Stock. If you're looking to stand out on the road, customisation is the way to go.
Custom Royal Enfield bikes can look very different from the regular ones and
depending on the budget and the wishes of the owner, it can be transformed
into almost anything

3.2) 4 Ps (Product: Price, Place & Promotion)

Marketing Mix of Royal Enfield analyses the brand/company which covers 4Ps
(Product, Price, Place, Promotion) and explains the Royal Enfield marketing
strategy. The article elaborates the pricing, advertising & distribution strategies
used by the company.
Let us start the Royal Enfield Marketing Mix:

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Product:
Royal Enfield is one the leading global motorcycle brands based out of India.
Royal Enfield which started making bikes for Indian army has a concentrated
product portfolio in its marketing mix and manufactured motorbikes are: Café
Racer (Continental GT), Cruiser (Royal Enfield Thunderbird 500, Thunderbird 350),
Retro Street (Classic Squadron Blue, Classic Desert Storm, Classic Battle Green,
Classic Chrome, Classic 500, Classic 350), Standard street (Royal Enfield Bullet
500, Bullet 50, Bullet ES), Himalayan. Royal Enfield products are also known for
their versatility according to consumers demand like adjusting the gears from
ideal to left. This helps them in attracting new customers. They also utilizes the
strength of engine as their own strength to retain current customers. As the
products are not only driven by innovations but more with an understanding of
users, market and competitors so now Royal Enfield is even changing from a
manufacturing approach to become more consumer oriented. Royal Enfield
likes to make changes, implement new things in bikes without taking their initial
identity.
Price:
Royal Enfield comes up with a bike which is more demanded by the younger
generations. So Royal Enfield focused on the bike explorers and moderately
aged youths who love to catch up with the new hard style bikes and focuses
more on quality then the price. So with this Royal Enfield follows a premium
pricing strategy in its marketing mix by delivering its customers a high quality
products which are worth the value. With the goal as less of more Royal Enfield
manufacturers less number of models but each one of them is of high quality
which helps them in offering a capable and stylish product under its brand to
their users who whole heartedly accept the product regardless of premium
price. After the GST prices Royal Enfield has adopted a different strategy by
further diminishing the prices of its least popular bikes.

Place:
Royal Enfield whose central manufacturing plant is based in Chennai is now
operating in more than 50 nations all over the world. Currently Royal Enfield’s
distributors who are working for different exports markets themselves appoint
dealers in various locations who finally run the multi brand outlets. With a new
assembling plant opened in Chennai, Royal Enfield is able to tackle the
problems of product shortage and they easily export the products to all the
nations through ship route. Even after this there are few nations where shipping is
not that easy like Brazil due to various policies so Royal Enfield is looking to open
local assembly and manufacturing plants. Royal Enfield has a vast and strong

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distribution network which incorporates the goals of merchants and dealers so
that customer needs are satisfied without any issue. Royal Enfield targets both
urban and rural consumers in India with its more than 350 dealership outlets.
However urban consumers are favored a little mores seeing the past purchase
records and youngsters preference who are their main consumers.
Promotion:
Royal Enfield has always focused on a holistic and complete marketing
approach. To increase the volume of bikes sold, Royal Enfield has decided to
focuses more on the consumers need rather than engineering. They launch
what consumer wanted so as to increase the visibility of their products to a
larger audience. Seeing that their prime consumers are middle aged man who
are more inclined to the digital technology so Royal Enfield focuses more on
digital marketing i.e. by launching various online campaigns on different social
media sites like Facebook, twitter, Instagram etc. It also participates in various
shows or deal with various TV series in order to increase visibility of products.
Royal Enfield’s promotions are also seen by traditional way that is through TV,
newspaper, magazines, flyers, boards etc. Hence, this concludes the Royal
Enfield marketing mix.

3.3) STP (Segmentation, Targeting and Positioning)

Segmentation: It is segmented as a leisure and adventure curser bike. Though in

Tier- 3 & DH market it is associated with the social/status symbol.

Targeting: It is targeting Bikers in the age group of 25-45 years of age, they are
working executives as in the case of Tier 1 & 2 Cities and young, rich & powerful
in terms of Tier-3 & DH.

Positioning: In Tier 1 & 2 cities it is positioned as a leisurely, adventure, curser

bike. But in Tier 3 & DH it is a bike which shows your social status is a symbol of
your power in society.

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 Fig 3.3.1

3.4) Distribution Channels

A distribution channel is the chain of businesses or intermediaries through which

a good or service passes until it reaches the end consumer. A distribution
channel can include showroom, distributors and even the internet

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 Fig 3.4.1

Department:

1. Sales Department
2. Service Department

Explaination:

1. Sales Department

Sales Executives’ Responsibilities

• Check the assigned test ride bike status & ensure it is clean
• Check for the availability of brochures, sales stationary etc and keep it
ready
• Attend daily meeting note down the deliverable parameters
• Update current status against the targets on all parameters
• Collect follow up sheets for enquiry /bookings/payment /delivery- update
the status back to CRE or update in DMS every day
• Drop out case to be informed to sales manager for closing
• Maintain test ride route map.

35
 Tele & web:

• Collect the list from CRE every hour – do the follow up – invite the customer
for showroom visit and test ride
• Convert for home test ride and experience ride

Booking & Retail-

• Explain the booking procedure & complete delivery process to the

customer clearly mention the waiting period.
• Provide booking receipt, booking from & beat magazine
• Intimate the customer about the full payment. 15 days prior to the planned
delivery
• Provide assistance to the customer during the entire waiting period for any
queries raised
• Provide the details about various payment options available & documents
required
• Keep every customer engaged every month after looking till delivery

Delivery:

List of customer waiting for delivery on date to be shared – registration status

to be update – delivery documents to be kept ready one dau before delivery –
then inform the customers about the time of delivery

Tag the bike which are ready for delivery and ready for registration accordingly.
Perform the standard delivery process – explain the warranty guidelines.
Take delivery feedback from the customer.
Get customer installation from signed.
Explain do it yourself service page and workshop location / contact details.
Play group delivery rather one many delivery – let each delivery be celebrated.
Ask refrence, promote merchandise, explain future ride planned.
Provide any assistance required for deliveringthe vehicle successfully.

Do next day call to understand customer sstisfaction – if negative feedback

report to CRE and have it tracked until closure

Keep the delivery zone clean and plan delivery throughout the day

2. Service Department
36
 Thish department is mainly concerned to gige the service for the customer.
Like wheed aligment oil changing engine repair, mirror work, etc. any type of
work which is concermed to the vehicles. The head of the of this department is
service manager

Various Decision In Services Department

• This department is responsible to improve quality repairs.

• This department is responsible to solve the problem of the customer
accurately.
• This department is responsible to reduce customer’ complaints and
improve productive hours.
• This department is head of workshop having authority to control the
workshop.
• This department head is responsible for the maintensnce of quality system
in his department.

3.5) Promotion Strategies

But nowadays i cant take any ads from tv. Only google ads and youtube videos
are given by re.

And also RE doesnt need such ads for its sales in a promotional manner, youtube
videos are giving inspirations for a tourer to travel!

They are purchased only because of the legacy and the comfort. So we could
say RE have no promotional methods!

In case of any automobile,you can compare,only low cost vehicles provide ads
whereas you cant see ads for bentley or rolls Royce. I am seeing like that.(
joking)

Royal babes also crossed the sales of harley davidson even without any ads,
which literally means Enfield is selling their bikes only because of the legacy
brought from 1901!

37
GROWING THE ROYAL ENFIELD COMMUNITY OUTSIDE INDIA

At Royal Enfield, the vision is to create a brand that surpasses the usual
manufacture and retail mould and to become more experiential in conjoining
the global riding community. And Royal Enfield does this with its marquee rides
and events to deepen its engagement with the riding community.
In the previous years during the production of 2000 batch they have ads starting
with electra going near to a train..

Rides and Events

Fig 3.5.1

Royal Enfield’s first marquee ride event outside the Indian subcontinent, the Tour
of Thailand witnessed a participation of 31 riders who covered 1,600 kms over a
period of seven days. Flagged-off from the Royal Enfield’s store dealership at
Thonglor, and passing through several amazing terrains, country

roads, mountain twisties, naturally preserved landscapes, scenic highways and

best tarmac patches, the ride culminated in Northern Thailand’s Chiang Mai.
The last day of the tour witnessed local Royal Enfield riders in Chiang Mai joining
in through Samoeng loop, enriching the troop to 60+ riders. A cultural bonhomie
for the participants with a pleasant mix of riding and cultural interaction, the
event brought joy to riders to experience the simplicity and vividness of the Thai
culture

38
 Fig 3.5.2

REunion Khao Yai was the first-ofits-kind event for the Royal Enfield community in
Thailand. Set in at Khao Yai, a 200-km ride from Bangkok, famed for its long-
standing natural preserve, the event brought together 100 enthusiasts from
across the country. The ride to the beautiful Khao Yai Tieng Dam and different
motorcycling events at the venue provided the community the pure joy of riding
and bonding.

Fig 3.5.3

REunion Khao Yai was the first-ofits-kind event for the Royal Enfield community in
Thailand. Set in at Khao Yai, a 200-km ride from Bangkok, famed for its long-
standing natural preserve, the event brought together 100 enthusiasts from
across the country. The ride to the beautiful Khao Yai Tieng Dam and different
motorcycling events at the venue provided the community the pure joy of riding
and bonding. The six day tour started in Bogota, the capital of Colombia. The
cavalcade of riders passed through the major cities of Medellin, Cali, Pereira
and Bucaramanga. It was done to further encourage the extremely popular

39
weekend riding culture among the Royal Enfield community, with a longer multi-
day ride version taking the enthusiasts to extremely scenic parts of the country.

Fig 3.5.4

Royal Enfield's maiden edition of REUNION in Colombia was held in the city of
Pereira. The event saw participation from 140 enthusiasts from seven cities. The
event had host of motorcycling activities like slow race, obstacle race,
'assembly wars', and also a ride through the scenic coffee plantations. The
event line-up was rigorous, joyous and generated a lot of thrill for the
participants. The idea was to enjoy motorcycling at its purest. Generating
tremendous excitement, the event became very popular amongst the Royal
Enfield community in Colombia and encouraged them to celebrate leisure
riding more often

Selling an experience

Today, Royal Enfield increasingly wants people to invite and search its
motorcycles and this is where the showroom experience becomes important.
“We want to be the best relationship company in the world and not the best
marketing company. Marketing limits the scope and the passion to deliver while
relationships create the business,” adds Singh.

It is this thinking that Royal Enfield will replicate across markets like ASEAN and
Latin America where it is keen to be considered as the definitive choice for mid-
weight bikes. Like India, the idea is to replicate the experience of rides,
communities, spares and sales to create the pull. “From our point of view, it is
about fitting into what people want,” says Singh.

40
Lal chips in to add that the idea is be a motorcycle company which is just not
driven by products but the entire experience. The Himalayan, for instance, was
driven by the idea of what riders have been doing for decades with their Bullet
motorcycles.

“From a product side, it is about engineering and finding the right solutions. From
a non-product side, it is about making the experience a lot better right from
features and creating an ecosystem around motorcycles. We are trying to
move from creating an outstanding experience to putting everything around
the brand,” says Lal.

The ultimate objective is to get the brand in people’s minds. New markets have
already reacted positively to Royal Enfield and this is what gives the company
the confidence that it can quickly get a foot in the door and then do all the
hard work after that. “We want to do something different all the time but will
stay focused to our core and not go after every segment. The key is to give
business and pleasure while keeping things simple and fun to ride. It is a self
imposed goal in making mid-weight bikes since the opportunities are
enormous,” says Lal.

The recently launched Himalayan was meant to reach out to those riders who
are now in a phase in their lives where they would like to do a little bit more, go
out and experience adventure. It is their time off when they want to live and
enjoy.

“That is what we made this motorcycle for: to enjoy the great outdoors and lose
yourself in a way. Forget about everything else including the motorcycle,” he
says Lal. The Himalayan was created in a way that it was a truly a case about
form following function.

41
 Chapter 4:
Financial Analysis

42
4. 1) Sources of Finance

fig 4.1.1

Fig 4.1.2

43
4.2) Ratio Analysis –Any 5

1. Investment Valuation Ratios

2. Profitability Ratios

3. Management Efficiency Ratios

44
4. Profit & Loss Account Ratios

5. Cash Flow Indicator Ratios

45
4.3) Net Profit/ Balance sheet (from annual report) –Analyse

➢ Balance sheet

Fig 4.3.1

46
➢ Profit And Loss Account

Fig 4.3.2

47
 Chapter 5:

Key Learning’s from the Company and Recommendations

48
5.1) Performance Analysis of the Company

Indian motorcycle manufacturing company Royal Enfield’s domestic sales, for

the month of November 2017, grew by 21 per cent by selling 67,776 units as
against 55,843 units.
Royal Enfield’s exports surged 60 per cent and stood at 2,350 motorcycles when
compared with 1,470 units during November 2016.

The company’s models with engine capacity up to 350cc sold 65,751 units,
thereby growing by 26 per cent. However, sales of models with engine capacity
exceeding 350cc declined 12 per cent at 4,375 units.

During the month of November 2017, Royal Enfield also introduced its 2018
Interceptor 650 Twin and Continental GT 650 Twin bikes in India.

Both the bikes, which are powered by the company’s newly launched 648cc
twin cylinder engine, will be officially launched in the country somewhere
around second quarter of fiscal 2019 (July-September, 2018).

Eicher Motors on Thursday reported a net profit of Rs. 576 crore for the April-June
period, driven by strong performance from its flagship brand Royal Enfield.
Consolidated net profit was up 25 per cent year-on-year compared with Rs. 460
crore for the quarter ended June 30, 2017. Revenue from operations came in at
a record Rs. 2,548 crore for the quarter ended June 2018, as against Rs. 2,255
crore for the corresponding period a year ago.

Royal Enfield, the manufacturer of middleweight motorcycles, sold 2,25,286 units

in the quarter ended June. That marked an increase of 23 per cent from sales of
1,83,731 motorcycles in the year-ago period.

Commenting on Royal Enfield's performance, Eicher Motors CEO and managing

director Siddhartha Lal said, "We continue to make significant progress on all the
targets that we have set for ourselves. We are happy to report a strong financial
performance for the quarter."

VE Commercial Vehicles, Eicher's joint-venture with Sweden's AB Volvo,

registered a sales growth of 41 per cent in the quarter. Eicher Motors said the
growth in the commercial vehicles industry is likely to continue due to a variety

49
of factors including infrastructure development, growth in the manufacturing
sector post-GST and strong replacement demand.

Speaking on the auto sector's shift towards more environment-friendly measures,

Mr Lal said India will surely face teething problems, however in the long run BS-VI
emission norms will be beneficial for all.

5.2) Reasons for the expansion/contraction/diversification

of Company

Royal Enfield gearing up for expansion

Motorcycle-maker to augment capacity and add more models

Functioning at near 100 per cent capacity across its three plants, motorcycle

manufacturer Royal Enfield is awaiting the expansion project to get

commissioned to consolidate its market base.

“The expansion initiated as a part of ₹800-crore capex will take the company’s
manufacturing capacity across three plants at Thiruvottiyur, Vallam Vadagal
and Oragadam, all located in Tamil Nadu, to 9,50,000 units per annum,” Shaji
Koshy, Head, India Business, said.

Speaking on the sidelines of the launch of two new Royal Enfield motorcycles,

Interceptor INT 650 and Continental GT 650 here, Koshy said: “The expansion
taken up at the Vallam Vadagal plant, will augment further capacity in a

market where we have a share of about 91 per cent in the segment we

operate, that is, 250 cc to 750 cc motorcycles.”

“We have gained market share of this size due to our innovative approach and

by introducing motorcycles which meet the aspiration of the buyers. The

introduction of these twins at an aggressive price starting from ₹2.5 lakh ex-

50
showroom is aimed at enabling the large base of Royal Enfield customers to

upgrade to them.”

In the last fiscal ended March 31, 2018, Royal Enfield logged total sales of over 8

lakh units, registering a growth of over 23 per cent in the domestic market and

exported about 20,000 units, up 25 per cent.

“With two R&D centres, one each in the UK and India, we are well positioned to

bring in new models and continue to strengthen our offerings. Backed by these

twin offerings, we are also working on several other platforms to sustain the

growth momentum,” he said.

“The hardwork the company put in by creating the foundation for new models,

and a large network of 870 dealerships, over 9,000 working bays and training

academies, have placed us in a situation where we can further consolidate our

reach and presence.”

Asked about growing competition coming in the form of revival of the Jawa

brand, Benelli, and from Japanese and other manufacturers, Koshy said: “We

are not deterred. We welcome more players as the platform we have created

for such bikes is set to grow as more and more people buy these motorcycles.”

Koshy said at the heart of every Royal Enfield Continental GT 650 Twin and

Interceptor INT 650 Twin is the work done collaboratively by designers across its

R&D centres.

With a huge base of loyal Royal Enfield customers in India, the company

expects these twins offering them choice to upgrade and continue to be under

its fold.

51
Royal Enfield eyes further expansion in South East Asia, Latin America

CEO Siddhartha Lal says Royal Enfield is building on its team in South East Asian

countries and will do the same for Latin America as well

Milan: Royal Enfield is looking to expand further in South East Asia and Latin
America over the next five years as part of strengthening its overseas operations.
The company, which is present in few countries across both the geographies, is
now in the process of building teams in these areas to enter new territories.
“Right now, I believe that in addition to developed markets where we have
distribution like the UK, Europe, the US, Japan, Australia and New Zealand, it is
largely ASEAN and Latin America which are the two big areas for us," Royal
Enfield chief executive officer (CEO) Siddhartha Lal told PTI on the sidelines of
Eicma 2017.
Starting from Thailand and Indonesia, the company has now moved to countries
like the Philippines and Vietnam, he added. “We are in these countries with
small presence right now. But we are building a team there and same is with
Latin America," Lal said.
The company has just begun its journey in these growing markets, he added.
“Hopefully if markets pick up we will spread in rest of ASEAN and Latin America
in next 3-5 years. These are the markets with big potential," Lal said.
Elaborating on company’s presence in Latin America, Lal said Royal Enfield has
already established presence in markets such as Colombia and Brazil. “Now in
Mexico also we will have store. So 3-4 markets in South East Asian countries and
3-4 markets in Latin America, that is the situation," Lal said.
As part of Royal Enfield’s ‘city strategy’, it now has around 20 exclusive brand
stores outside India, in places like Milwaukee, London, Paris, Barcelona, Madrid,
Valencia, Bogota, Medellin, Dubai, Jakarta, Bangkok and Melbourne. The
company, a part of Eicher Motors, is focusing on international markets as part of
its strategy to expand the mid-sized motorcycle segment (250-750cc) across the
globe. PTI

52
5.3) Comment on Organizational Leader
Royal Enfield is amongst the coolest motorcycle brand in the country today. The

bike has been ruling hearts since its inception in India. Came for the purpose of

highway patrolling by Indian Army, the bike today has become the most

favourite touring motorcycle for youths. This was not the case a decade back. It

wasn’t the first choice for the youngsters as they preferred the slick and stylish

bikes for their road or college trips.

10 years back, Royal Enfield was struggling from image crisis due to less sales

and was about to shut its shop down. Then came into picture, the Siddhartha

Lal, the CEO of Royal Enfield, he had difficult decision to make-whether to make

Royal Enfield a major player in two-wheeler industry or to do 13 small businesses.

He left aside 13 businesses and put all his focus and money behind Royal Enfield

and trucks. In an interview with economic times, he told “In my mind the basic

question was this; do we want to be a mediocre player in 15 small businesses or

to be good in just one or two businesses” The rest is history.

In the next five years, he transformed the image of Royal Enfield and became a
major player in the Indian automobile industry. The marketing strategies like
sponsoring mountain biking, cross country runs helped to expand its network
rapidly across the nation. The result is now most of us has at least one friend who
keeps telling us to plan a road trip Leh-Ladakh on Royal Enfield.

With proper marketing techniques and love it generated amongst the youth,
Royal Enfield is now the most successful component of Eicher Motors. The most
of the credit for the success goes to the man who transformed the image of the
bike, the Siddhartha Lal. He is the one who developed the biking culture in his
team and motivated them to travel and connect with the brand. The brand

53
“Royal Enfield” has a rich legacy and its USP, the Siddhartha Lal is the architect
for its makeover from the scratch.

In conversation with Siddhartha Lal, Royal Enfield’s CEO

Q: How has the new engine been developed? Please take us through the entire
process.
A: Everything started with a thought process, the thought process is really two
fold. One comes from India which represents other emerging markets as well
and the other is coming from the opportunity in markets like the UK , the US and
Europe and what do they really need. And what we felt was, in the emerging
markets like ours, we needed to give an extra go. This is what our customers
were wanting and we have got 25 lakh chaps who have been riding from the
last eight years. So we know what they want, they tell us what they want and
some of them want something a bit more and we thought this was a good
jump. On the other hand we felt that (specially in richer countries) the market for
big bikes was very well developed and even what they call middle-weights is still
sort of converging to the 800 sort of cc category. It’s still a pretty large bike in our
opinion and we therefore we thought that this sort of middle point where you
have access for much more powerful markets like India yet you are able to use
it extremely well on highways and you know you can cross a tunnel but you can
certainly be riding at 120kmph on a highway at part throttle and still be enjoying
yourself. And then on the refinement requirements, all markets in the world
wants refinement, we have done a lot of work on the refinement of the engine.
We are not just working the fit and finish of the engine but we have put in a
balance shaft, a slipper clutch, a sleek 6-speed gearbox, so it has everything
you need. So basically on the brief when we had first started we had three
different concepts in 2014, with 180-, 270- and 360-degree crank. It started off as
a 600cc, we were wondering if it should be a 5-speed or 6-speed, so obviously
that’s clear. And again emissions, we had to see whether it was going to meet
emission norms, and finally we landed onto 8-valves, single overhead camshaft
set

Q: How has the new engine been developed? Please take us through the entire
process.
A: That’s not the idea, I mean I am sure somebody will try to do that at some
point, but again we have added lots of bits and bobs in the market. Especially in

54
India we have to be very cost conscious. So if you make an engine that can be
scaled up, then by definition what that means is that you are going to add fixed
costs today on the production for the next few years till the time you wanna
scale that up. So what we have done is that we have made an optimal 650.

Q: And there is no need to scale it down for some markets?

Q: No. Again, you know we have come to that point where we don’t want to
do different things for different markets. It was very important for us, for a piece
of mind, for manufacturing, for suppliers, for quality to do one engine, to do one
rolling chassis that is precisely integrated. So basically all of this is exactly one
motorcycle, there is nothing different in these two, the styling and the
ergonomics is the the difference but the bike is exactly the same underneath.
Basically, our idea is to make a rolling chassis repeatable.

Q: How important and how difficult was it to get the quality right? Because
you’ve had issues with your other new bike?
A: It is extremely important for us to continuously improve and to make sure that
we do that. I mean at every single parameter we have upped our game
tremendously. So firstly the entire development, the engine, the vehicle, the
development team, the new product introduction process, it’s all new. We
augmented our existing teams but we’ve got full new you know let’s say
extremely expanded teams, the number of people working on this bike has
gone up exponentially.

Q: So the Continental GT 650 has any carry over parts from the earlier
Continental GT?
A: That was the idea initially, especially on the styling side. We thought of having
the rolling chassis entirely new, so there was no carryover in any case in terms of
rolling chassis. We thought of retaining the tank but we weren’t able to do that
either. So the tank on the bike looks similar but if you look closely, it’s squarer. I
think a lot of people love the idea of a GT but they wanted more go on it, so we
kept the basic idea of the GT. But yes, we have actually changed the styling,
the stance and the ergonomics. The styling and the stance is just a bit lower just
a bit wider and the ergonomics are suited for a comfortable ride. It’s still
obviously a bit of a crouched position, though. And this thing can do more than
160kmph, guaranteed! I have clocked 162kmph myself.

55
Q: Which one do you prefer between the two?
A: Obviously, there is shinier newer one and I always normally keep only one
motorcycle in my so called garage. So yeah I will probably have an interceptor
first. I love the GT as well but I already had that.

Q: Did the R&D process begin after deciding upon the name?
A: It was contiguous, we wanted it (Interceptor) to be based on the same idea.
Basically this was taking the GT to the next level, but we were very clear that the
GT itself has some limitations. I am talking about the riding styles with a wider
audience, so it does a job for a few people but certainly it’s a bit crouched
down position for the general public. Older chaps and heavy people,
especially. So we were clear that we wanted a roadster and then Mark and
team worked on many different ideas on what a roadster could be like and
then we sort of converged on this while looking at our history, so it sort of came
together.
Q: And in terms of timeline how long has this been in development?
A: The first drawing that we were able to pull out was in early 2014. After
deciding onto a 270-degree crank, we had James Young join us after that. In
early 2015 he made a lot of changes and movements to the concepts which
included some changes to the gearbox. He said, it’s a twin so it’s always gonna
be a bit wide, so our idea was to try and keep it as lean as possible. We have
taken some leeway’s, true, but basically we tried to keep it as lean as possible.

Q: Did you try a V-twin or something? Or that doesn’t fit with the heritage?
A: V-twin absolutely fits with the heritage. If you go back a longer way, we have
a standing example of a KX which you didn’t see. It was there in our tech
centre, so when you come around I want you guys to see it once. It’s a 1140cc
V-Twin from the 1930s.

Q: And why such a low compression ratio? I am sure you can get more
horsepower out of the engine.
A: We have been facing fuel quality issues in some parts of the world, and we
have to focus on engine longevity as well. And you know we thought 47 was a
perfect point because that is also an A2 license in parts of the world.

56
Q: And the major work and most time went on the bike, was that on the engine
front?
A: Equally on the chassis front too I would say. We had to change the head-
stock angle at some point, not the offset, just to push it back by 25mm. It is quite
a bit actually. So there is a huge amount development that went into it,
because for us, high speed stability has become very important. And what we
found in some of the benchmark motorcycles was that some were really good
at high speeds, some were actually really very crap when you went at a
160kmph. We were clear that we had to be great on that front and yet it had to
be very nimble at low speeds. I think a huge amount of developmental effort on
geometry of the chassis went in and the suspension.

Q: And how important was it aesthetically? Do all parts need to look authentic?
A: We don’t think it’s required to disguise and to make things look what they are
not. In our opinion, we think authentic is what it actually is and what it should be.
So you have fuel injection, you don’t hide it. So for us we try and keep it as open
and naked in a way and then we have got a bit of shrouds over there but that’s
because fuel injections are normally not the prettiest things but you are not
hiding and you are not making it look like something else.

Q: How do you educate the Indian single-cylinder Royal Enfield enthusiast for
the parallel-twin?
A: We don’t educate people.
Q: …because it’s all about the thump, they all want the thump.
A: And they have got the thump, we are not taking it away. The singles are very
important to us and we are still going to make them. But really for chaps who
want a bit more go and who can afford a bit more, honestly that’s also more
important. Bu the point is that you cannot replicate a thump on a twin and you
don’t want to either and again that’s not authenticity. What you want to do is
make sure that you get the best idea out of a twin. So in terms of what does a
twin do well? I believe it has a very good mid-range, in this case, and we have
engineered a very good sound in this, it’s a lovely rumble. I think you must have
heard of that and you know it’s the air-cooler part. It’s the fact that it’s not a big
bore either, so it’s still got that old-school character, it’s got 270crank which
actually helps tremendously in that gorgeous sound and all of that.
Q: Any sportier variant of the Continental in the offering?
A: No, we think this is as sporty as you are going to get. How much more sporty
do you want ?
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5.4) Market share/growth rate of Company

Only motorcycle manufacturers Bajaj and Royal Enfield have reported a sales of
19.74 lakh units and 8.01 lakh units respectively. While Bajaj Auto’s sales did drop
by 1.3 percent YoY, Royal Enfield grew by over 23 percent and recorded its most
sales ever. Considering Royal Enfield only makes premium motorcycles in India
(350cc and above) this is a massive achievement by Sid Lal’s lead, Chennai
based motorcycle manufacturer. The company is coming months plan to
launch two new premium motorcycles in India, Royal Enfield Interceptor 650 and
Royal Enfield Continental GT 650 that were showcased at EICMA 2017.

Top two-wheeler manufacturers in India: 2.01 Crore two-wheeler

sold, Market share analysis of world’s largest two-wheeler market

Fig 5.4.1

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Growth rate of Company

Royal Enfield posts 17% growth in sales

Royal Enfield, the two-wheeler division of Eicher Motors, has reported 16.67 per
cent growth in total sales at 66,968 units in December. The company had sold
57,398 units in December 2016, Royal Enfield said in a statement today.

Domestic sales stood at 65,367 units last month against 56,316 units in December
2016, up 16 per cent. Exports rose 47.96 per cent to 1,601 units from 1,082 units in
the same month previous year.

Growth rate of Royal Enfield

Fig 5.4.2

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5.5) SWOT Analysis of the Company

Royal Enfield is the oldest motorcycle company in continuous production. It

made its first motorcycle in the year 1901. Royal Enfield is based out of India and
is a result of a merger between The Enfield Company and Eicher in India in the
year 1994. Royal Enfield has seen immense growth in the past 5 years and is
expanding exports in the global markets.

Strength in the SWOT Analysis of Royal Enfield :

Strong Brand Name: Royal Enfield has created a strong brand identity in the
market and has been able to gain credibility in the market from its customers.
Royal Enfield is has made itself a cult brand and is desired by many.

High-Quality Standards: One of the main reasons of the strong brand name of
Royal Enfield is due to its high-quality standards. Royal Enfield emphasises on
providing best quality to its customers.

Strong Research and Development: Royal Enfield has an in-house R&D centre
which takes care of further enhancement of the product portfolio of the
company and makes sure that the reliability of the consumer is maintained.
Royal Enfield has recently invested Rs. 600 crores in two more R&D units, one in
India and one in the UK.

Strong Growth: Royal Enfield has grown at over 50% in the last 5 years globally.
Such strong growth increases revenue and profits for the company which can
be further invested in improving and enhancing product portfolio.

Expanding Global Market: Royal Enfield bikes are currently exported to more
than 30 countries worldwide and due to increase in demand, Royal Enfield has
invested heavily in setting up manufacturing facilities in the UK.

Support from Eicher group: In 1994, Enfield India and Eicher Group merged
together to form Royal Enfield. Eicher, being one of the world’s leading
automotive manufacturers has supported Royal Enfield since and has been an
important reason for the success of Royal Enfield worldwide.

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Weaknesses in the SWOT Analysis of Royal Enfield :
Expensive: Royal Enfield targets a niche market of motorcycle lovers who are
ready to pay a premium for the brand. But, it misses out on a large market that is
willing to buy a low priced variant of Royal Enfield.

Low Mileage: Royal Enfield produces large volume cylinder bikes (high CC)
which have more capability to burn more amounts of air and fuel and thus they
give low mileage as compared to low CC bikes.

Opportunities in the SWOT Analysis of Royal Enfield :

Growing Market: The two-wheeler market is growing worldwide which provides
an opportunity for the company to increase customer base and sales globally.

Expand Globally: Royal Enfield needs to expand its export markets to more
countries in the Europe, Africa and Asia. The demand for such bikes is increasing
in these markets and Royal Enfield can take advantage of such an opportunity.

Higher Disposable incomes: The Disposable income of middle-class people in

countries like India has been on the rise. Thus, those individuals who could not
afford a Royal Enfield some years ago are now in a position to buy one. This is
one of the main reasons for the growing sales of Royal Enfield.

Threats in the SWOT Analysis of Royal Enfield :

Strong Competition: Royal Enfield competes with many bike companies in the
cruiser segments worldwide. It also competes with high utility bikes in the market.
Such competition in the market reduces market share.

Fuel Rise can cause the decrease in sales: As mentioned earlier, mileage of
Royal Enfield bikes are low and thus any increase in Fuel prices will affect sales of
Royal Enfield.

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Chapter 6:

Findings

62
FINDINGS:

It is revealed that majority of users are between 20 to 29 years. From thiswe can
conclude younger generation and middle age are more interested in Royal
Enfield may be because this is the age where they start earning.2.

It is clear that most of the users of Royal Enfield are males mostly becauseof the
manly look of the bikes.3.

Users are mostly Professional males, 20-35 years of age including somestudents
because of the looks and power of the bike.4.

Royal Enfield is placing their products in the appropriate price range. Asthe
people of this income bracket less than 1,20,000 can easily afford thisBike.5.

Customers are not attracted to only one particular model due to thevariants
available and because the Classic 500/350 is the newly releasedmodels they
are fast moving now.

Customers are easily affording the price of Royal Enfield bikes and theyare not
feeling much problem with the amount and purchasing way of most of the
customers is leading in cash sector.7.

Majority of the customers directly chose Royal Enfield as their bike anddint even
have a look at the nearest alternative bike and this shows theloyalty of the
customers towards the brand Royal Enfield.

Advertisements are rarely recalled and are highly ineffective amongst non-Bullet
riders. It¶s clear that Royal Enfield should concentrate on itsadvertising
campaign to reach the customers.9.

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It clearly shows that mileage of the Royal Enfield bikes is economical &mileage
between 35 and 40 that too on Indian roads with heavy traffic is agreat deal.10.

Most of the Royal Enfield bikes doesn¶t breakdown at all, it is not problematic
and not involved into repair always.11.

It is clear that most of the respondents prefer to buy their bike brand newfrom
showroom only and majority of the customers are very muchsatisfied with the
place of purchase of their Royal Enfield bike. This alsoshows there is more
demand for new bikes.12.

It is clear that majority of the respondents are satisfied with spare

partsavailability and we can say that Royal Enfield has good distributionchannel
for spare parts in the city.

It is clear that majority of the people who choose Royal Enfield as their bike
doesn¶t have any problems or issues with their bike¶s performance.

Major ty of the respondents are satisfied with their bikes power and pick up. This
shows Royal Enfield has an excellent satisfaction level within thecustomer

Majority of the respondents are satisfied with their bikes comfort andsafety. This
shows Royal Enfield has an excellent satisfaction level withinthe customers.16.

Majority of the respondents are satisfied with their after sales service andfew
respondents are not at all satisfied. This shows Royal Enfield has agood
satisfaction level within the customers.17.

It is clear that People who choose not to buy Bullets do so because of low
promotion, high price and maintenance. So Royal Enfield shouldconcentrate on
their promotional campaigns and make sure it reaches thecommon man.18.

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It is clear that most of the respondents service their bikes in theshowrooms and
also with a well known bullet mechanic. There is no muchdifference but this
shows people have less trust with the showroomservice.19.

Most of the respondents agree that the company takes action towards
thecomplaints lodged by the customers and also the satisfaction level of
thecustomers is very high. This shows Royal Enfield checks at the
complaintsregistered by their customers on regular basis to maintain its brand
value.20.

Majority of the respondents are very much interested in Rider Mania andalso
shows that respondents are very passionate Enfield fans

65
 Chapter 7:
Conclusions and Suggestions

66
CONCLUSION
The study has helped Royal Enfield dealers to understand whether the customers are
satisfied or not. If not what are main reasons for dissatisfaction of customer towards the
dealer and what are the ways of improving the satisfaction level of customer
towards dealer.

We can conclude younger generation and middle age are moreinterested in Royal Enfield,
the buying behavior is governed predominantly bythe need for Power and respect for
the iconic Brand and users are mostlyProfessional Males, 20-35 years of age, including
some students. Most of thecustomers are attracted to newly released Classic
350/500, also customers areeasily affording the price of Royal Enfield bikes and
customers are very loyaltowards the brand Royal Enfield.Royal Enfield should
concentrate on its advertising campaign to reachthe customers, mileage of the Royal
Enfield bikes is very economical and mostof them prefer to buy their bike brand new
from showroom with the spare partsavailable in market easily.Royal Enfield has an
excellent satisfaction level within the customer for its power, pick up, comfort, safety and
with after sales service.It is clear that Royal Enfield checks at the complaints
registered by their customers on regular basis to maintain its brand value and entire Royal
Enfieldowner are passionate Royal Enfield fans

SUGGESTIONS

➢ Aggressive selling- The Company should follow an aggressive

sellingconcept. A non-aggressive selling concept which is clearly visible in
itsadvertising campaign which does not hit on the customer rather aims to
provide information in a subtle manner.

➢ Promotional campaign- The Royal Enfield ads seen on electronic and print
media are absolutely out of touch with the Indian culture andthought
process. An Indian consumer irrespective of their income levelhas a soft
corner for traditions and culture of India. Hence, all companiesincluding
market leaders like Hero Honda and Bajaj capitalize on this behavior of
customers and design their ad campaigns keeping India inmind.

➢ Weak follow up from dealerships- It was observed during the study

thatRoyal Enfield was quite weak in following up with
prospectivecustomers.

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➢ Measures should be taken to improve its dealership- Showrooms are
verysmall in size and do not reflect the quality and scale of Royal Enfield
inthe market.

➢ Should improve the after sales service- During the survey it was foundthat
Royal Enfield is not satisfying all their customers in after salesservices,
employees at dealership sometimes use harsh words and become rude to
the customers, parts of the bike are not easily available in themarket. This
is the major drawback in capturing the market share soRoyal Enfield
should take some better steps to satisfy and retain their customers.

➢ Increase in customer query response- During the study it was found

thatdealers are not satisfying the queries of customers and so suggested
toincrease customer query response by dealers.

➢ Youth oriented promotion- Company should focus more on younger

generation as it can increase sales and market share in Bangalore.

➢ Purchasing way of customers- Customers are easily affording the price of

Royal Enfield bikes and they are not feeling much problem with
theamount. But the company should also take some steps towards
making purchase easier through bank loans and EMI¶s.

➢ Marketing communication- It should focus on satisfying the needs for

Respect, Power, Safety and Comfort.

➢ Brand ambassador- A non-flamboyant well-built brand ambassador may

be chosen to represent the Brand. It is necessary for Royal Enfield to
havea brand ambassador from India to connect with the Indian
customer.

➢ Build iconic status- Royal Enfield should concentrate on building

aroundthe iconic status it already enjoys if it plans to attract customers
migratingto other manufacturers.

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Bibliography

Books Referred

Marketing Management, 13th edition - Philip Kotler

Survey Research Methods - Charles Babbie

Magazines Referred

The Bullet-In, The Magazine For All Royal Enfield BulletEnthusiasts.

Royal Enfield Magazine, The BEAT

Website

• http://royalenfield.com/motorcycles/
• http://www.linkintime.co.in/admin/DownloadFiles/Annual%20Report%20201
5-16%20-%20Website%20version.pdf
• http://www.autocarpro.in/news-national/-wheeler-sales-rev-india-march-
2016-smoother-fy2016-11036

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