Royal enfield- Operations, Production, market mix, brand value

Royal enfield

Royal enfieldMade like a gun goes like a bullet

Contact Details:(A Unit of Eicher Motors Limited)Tiruvottiyur High Road,Tiruvottiyur,Chennai - 600 019.

flashback..

What is a bullet???Its basically a cruiser bike tailor made for Indian roads.Powerful (very very powerful, with her massive 350,500 cc engines)slow speed, thumping sound and nearly 190 kg bodyweight.Moreover, its a feeling

ROYAL ENFIELD ARMY CREW:STANDARD 350 UCESTANDARD 500 UCECLASSIC 350CLASSIC 500THUNDERBIRD 350THUNDERBIRD 500Electra RE CAF RACER (CONTINENTAL GT)

THE BEGINNING OF NEW ERAThe royal ride, faced a serious trouble during early 2000s Customers started to complain about continuous engine troubles and heavy maintenance costs & the companys market shares went downFuel consumption rates were also very highSocomplete changeover was inevitable!!

So..The new royal enfield avatar was introduced in the market!!30% less parts and 30% more power compared to old version.A perfectly unbeatable UCE (Unit Cast Engine) with maximised performance and reduced maintenance costintroduction of electronic fuel injectionTwin spark engine( made of aluminium, instead of cast iron)Unique right legged gear box to new universal left gear boxSelf start(in selected models)Aerodynamically stable designFuel efficiency nearly about 50 kmpl.

Manufacturing techniques:Royal enfield adapted the LEAN MANUFACTURING method for new production. (POKA-YOKE)Also adopted the KAIZEN TECHNIQUE in processOne of their uniqueness is TOTAL PRODUCTIVE MAITENANCE in their plant

Production procedure:Like cococola, royal enfield also maintains a secrecy in its production procedure.Still, the company provides a quick factory visit for bull lovers. (every second Saturday, 10-11.30 am.) which costs Rs.600/person!The factory visit shows us the three main steps in production:The paint shopEngine assemblyVehicle assembly

Engine assembly:

The paint shop:The uniqueness of Bull includes the flawless freehand drawing.

Vehicle assembly:

Change in strategy after 2000:Marketing mixProduct: upgraded with technology efi, left gear, aluminium engine cylinder, but still maintained the royal VINTAGE looks!

Place: the market of Royal Enfield can basically be divided into two segments:1. metropolitans: Tier 1 and Tier 2 cities2. Small cities: tier 3 and district head quarters.

Promotion: it is promoted in MENs magazines, adventure magazines, local prin medias, fans clubs, social medias etc

Price: it is a premium product, hence demands a premium price

Segmentation, Targeting and Positioning (STP)Segmentation: it is segmented as leisure and cruiser bike. though in Tier3 and district head quarters market it is associated with the social/ status symbol.Targeting: bikers in the age group of 25-45 years of age. They are working executives in the case of tier 1& 2 cities and young, rich and powerful in terms of tier 3 and DHSegment size and profile: RE has a niche segment in motor bikes with a demand of about 2.5 L bikes per year. It comes in premium and cult category with a niche market aimed at lifestyle bikes among customers.

Market performancePrice elasticity:Moderate price elasticity. (since they have monopoly in the cruiser bike market)Market shares:In the premium segment of motorbikes, Royal Enfield has nearly 95% in 350, 500 cc motorbikes, and now, they are trying to attack the higher segments of this category (700, 1500 cc bikes)Expansion success:The annual capacity was about 60k units per year, but due to exponentially increasing demand, RE started to think about new expansion process, building new factory having capacity of 1.5 L per annum. (with capital of 1.5 billion)

Profitability:The profit after tax of RE is about 1.064 billion at the end of FY 2014 which has almost doubled from FY 2012 (0.529 billion) and it is forecasted that it will touch about 2.30 billion mark by the end of FY 2015.

Share holder value:Predictable revenue:Having 95% of the market share in the premium segment and also a waiting period of 6-12 months shows that the demand for RE increasing constantly predicted the growth of 100% by the end of FY 2015. Stock price:The stock price of Eicher Motors ( parent company of RE) has increased from Rs 2841 to Rs 4126.9 per share. P/E ratio: 76.97 (EPS: Rs 53.61)

The company is ISO 9001, ISO 14000, and ISO 16949 certified.The TNS survey has rated ROYAL ENFIELD as the BEST CUSTOMER SATISFACTION bike in cruiser category.

Sales overview:2012-78000 units.2013-82000 units.2014-112000 units.2015-2.5 lakhs.2016-4.5 lakh units.

Future expansion plan:In india, RE have a niche market for premium bikes more than 250cc. In future, they are going to expand their market segment to 750 cc premium bikes also.Now, Siddhardha lal, the CEO and managing director of Eicher Motors, hired Pierre Ter Blanche, head designer of Ducati motors.Apart from the plants at Oragadam and Thiruvottiyur, Royal Enfield bought 50 acres plot in Vallam Vadagal, for future expansion needs.

Brand building activities:Advertisements: RE rarely uses tv, radio and other media for its promotion.Branding through Royal Enfield Rider Mania:To keep users engaged with the brand, RE organises adventure trips, in which HIMALAYAN ODYSSEY is the prominent.Bullet clubs (every districts)Branding through Royal Enfield Riders Club and CommunitiesIt promotes the brotherhood feeling for riders, organising trips, training sessions, social activities etcOnline media and Social media marketing:Through their website, RE organises trips and encourage people to share their stories.Social websites like FB and TWITTER have their verified accounts, for their promotional activities.

Royal Enfield Merchendise:Following the Harley Davidson model of branding, RE also started selling their riders jackets, biking gears, helmets etc through their exclusive showrooms.Branding through film industry!!Think about lalettan.In AARAM THAMPURANGoing to fight with Keerikkadan JoseIn a Splendor Bike. :pHELL!!!! THERE IS NO SUBSTITUTE FOR THE AWESOME BULL FOR SHOWING OFF!!!

Imp. Terms in academic point of view Lean manufacturing.Kaizen techniqueTotal productive maintenancePoke yokeJust in time.Business process re-engineering (BPR)Niche marketing/ market

thank you!!!!

Abhimanue V S9567827146