BAJAJ C'sRoAp it - A Marketing Challen:BAJAJ CF RoAD Circuit - A Marketing Challenge FEE eT ATO Cee: AR ERECEEEEEEEE EEC Extending the gauntlet to the sharpest minds in top B-schools acrass the country. Salve a real-world business challenge by thinking laterelly and believing in your unique point of view. Earn the right to contend with the best across the country and learn from top leaders in the industry. Start ahead of the rest, start Offroad. Participation This contest is open only to second year students from IIMB, IMC. 1IM L. 1IM | IM K. XLRI, IIFT and FMS (other than PPO holders), Rules + Register here, in teams of two. + Tnly one exchenge student can be part of a team. + The ideas and content emerging from the contest are solely owned by Bajaj Auto including copyrights and should not be pasted ar shared without prior approval. Submissions + The marketing chellege willbe rolled eu by 10° November + Please convert your final solution document into a POF fle. The solution should be na longer than & slides. + Please submit your solution to your Place-Com SPOC Rewards + Campus winners will be given a PPI and cash prize of INR 2,00,000. + Top teams on campus receive a sur-prize! + Top teams on campus stand the chance to win PPls Communication Channel Alltimelines, shortlists and deadlines will be updated on our Facebook page. Dates + The last date to register is 2359 hrs, 12" November, 2017. + The deadline for submission is on or before 2359 hrs, 20° November, 2017. WAY a a, SESE TTT TE PPPCHRoAD Circuit - A Marketing Challenge Bajaj Boxer: Ace Africa Challenge Kiran, a Management Trainee at Bajaj Auto Ltd. was being briefed on his first project. The subject made him nostalgic. The thrust was on India’s largest exported bike & a market leader in Africa - Bajaj Boxer. He remembered his childhood days when Bajaj Boxer was launched in India in 1997, he recalled an ad campaign that showed a pair of boxing gloves strung around the throttle, positioning the bike as tough & rugged. This had helped Kiran convince his father, a loyal Bajaj Chetak rider, to migrate from Chetak to Boxer Mr. Suresh, Sales Head at Bajaj Auto Ltd., Pune, explained Vision 2020 for the Brand Bajaj Boxer to Kiran: “Attain a dominant share in the utility segment by gaining share from the Chinese.” Today Bajaj Boxer is Africa's No. 1 two-wheeler brand living up to its tagline, “Made Stronger to Last Longer.” With a market share of 35% (see Annexure) & a presence in over 20 countries of the 54 Nation African continent, it dominates the market in 8 countries with Number 1 or 2 position. In Africa, the Boxer is positioned as a bike that signifies Strength, Ruggedness and Durability that outlives any punishable road across the continent which makes Boxer a popular brand among Okadas. The 4 stroke, natural air-cooled bike equipped with an SI (Spark Ignition) engine comes in 3 variants: 100ce, 125ce & 150ce.The (1285-95) mm long wheelbase, SNS (Spring iN Spring) rear suspension, longer and wider seats & higher fuel economy have positioned the Boxer into a rugged utility motorcycle in the African Market. Who are the Okadas? Known in local lingo asOkada in Nigeria, Zemidjan in Benin, Boda-Boda in Kenya, Tanzania & Uganda, Kabu-Kabu in Niger, Oleyia in Togo & Bendskin in Cameroon, Okadas are motorbike taxis carrying passengers around rapidly urbanizing Africa providing a cost-effective service with last mile connectivity. The riders of Okadas are also known as Okadas locally. This form of taxi has emerged as a popular alternative in response to the inadequate infrastructure including road networks && absence of a robust public transport system. It is also an accessible, affordable & fast mode of transportation as the Okadas are available on call and have the ability to easily manoeuver through the traffic. Okadas are set to become a major mode of transportation in African villages, towns & cities over the next 5 years. Reports by leading consultancies project the two-wheeler market in Africa to reach over $9.2 billion by 2020 from 4.5$ billion in 2016. Nigeria, Tanzania, Uganda, Algeria, Ethiopia, Kenya, Egypt, Morocco and Angola are the leading markets in the continent and by 2020 will surpass 50% of the cumulative market share.CHRoAD Circuit - A Marketing Challenge A Day in the Life of an Okada rider ‘The Okada rider is a typical African youth belonging to the low-income segment of society who rides the Okada in order to make a decent living. Lack of job opportunities, unstable political environment, knowledge of the local routes, opportunity to earné entrepreneurial aspirations have made both the skilled and unskilled youth take to the Okada business either as riders or contractors. An Okada starts his day at 5-6 AM on weekdays and 3-4AM on weekends, usually transporting residents who want to beat the traffic to & from city outskirts. Some Okadas also drop children to school in the morning. They take a break usually around 9-10AM to eat. Radio is the only mode of entertainment they have on the road, often attached to the chassis of the bike. The customers come from all segments of society such as government servants, working professionals, traders & businessmen, students and pregnant women & mothers too! The Okadas usually make anywhere between US $6-$10 as profits after paying for fuel & rent to the owner, if the bike is not owned by the rider. Okada Ownership Model If the Okada rider does not own the bike, he either rents it on daily basis by paying a fixed amount to the owner and pocketing the rest as profit (after paying for the fuel and maintenance) or signs a contract with the owner whereby the rider owns the bike after paying for it in installments over a period of time. The Okada riders also become owners by saving enough to buy a new bike. Since the capital required to enter this business is relatively high, the investors are people who have a steady primary source of income (e.g. Public/Private sector employees) and who want to have an additional source of income or entrepreneurs s to credit from cooperatives, banks, Micro Finance Institutions (MF), family, friends & moneylenders. Since the fuel and maintenance costs of the bike are paid by the Okada rider, a prudent rider would chose a bike which gives high mileage, costs less to maintain and is comfortable to ride since it is a physically demanding job. Could these factors influence the buying decision of investors, thought Kiran.CHRoAD Circuit - A Marketing Challenge Africa: Land of Opportunities Comprising of over 1.2 billion people from 54 Nations, spanning 30 million sq. km, rich natural resource base and thousands of ethnic groups speaking over 2000 languages, the African continent is as diverse as it can get. It is the fastest growing continent, in economy terms, in the world and is expected to grow at 6% each year in the next decade. Africa is young, possessing a potential demographic dividend of over 800 million adult population by 2030. It is making a transition from being a primarily natural resource exporting economy to being an industrialized and manufacturing economy. Africa is rapidly urbanizing as currently more than 40% of Africans live in cities, a number which will grow to over 50% by 2030. The rising middle class in Africs represents the final growth frontier of the world represented by untapped markets & growth potential. The African middle class will constitute of 360 million people making the transition from being able to meet their basic needs to being full range consumers. This will increase the combined spending power of this urban populace with estimates of $1.3-$1.5 trillion by 2020. An important factor behind rise of motorbike imports in Africa is the supportive policy of various national Governments. By extending tax waivers to imports of motorbikes and encouraging local assembly of motorbikes, the governments are trying to foster foreign investments and create employment simultaneously. This represents a huge opportunity for Bajaj Auto and it couldn't have come at a better time. However, there are reports which show that Okadas do violate traffic laws, ride unregistered vehicles, evade traffic police, engage in bribing the traffic police, and involve themselves in robberies and other crimes. Also the accident rate among the Okadas is increasing causing many national Governments to think of bringing stringent regulation in the ‘Okada’ business.CHRoAD Circuit - A Marketing Challenge ‘The Challenge Bajaj Boxer's Market Share in Africa currently stands at 35%, the Vision 2020 for Boxer envisions Brand Boxer with a Market Share of 75% (See Annexure). Unlike the Indian middle-class utility segment consumer, the African Okada owners do not think of the long term benefits associated with the cost of ownership of the vehicle. Many Okadas think of short term profits and Chinese brands like Haojue, Sanya, Haojin, Sanlg, Apsonic, Royal etc. seem to be appealing to Okada owners as they are inexpensive. Bajaj Boxer is more durable, better in terms of quality, commanding a good resale value, having trained mechanics & service set ups with genuine spare parts, however it comes at a premium ranging between 10-25% over the equivalent Chinese models (See Annexure). As Kiran, your job is to create a detailed end-to-end marketing strategy and an action plan for Bajaj Boxer to Ace in Africa while maintaining the price premium. Annexure: 1, Boxer Vision 2020; Attain dominant share in this segment by gaining share from Chinese ee pee seer (Est.) ee peas eta Bn eee CS Cn eat Te Ctr eae Boxer 23% Chinese 11% Others (Indian + International) se 2. Bajaj Boxer Product Attributes Lasts Longer than others ‘Strong Chassis, parece | 2 Faster Payback period. strong Suspension Has good after sales service BUIn¢a| Reliable Engine Is a trustworthy brand Pirained mechanics & Tian’ gery higilftsale value Perr isb] service setups, Genuine spare parts Less fuel consumption & Higher returns Is comfortable to ride ITs not expensive Coote)CHRoAD Circuit - A Marketing Challenge 3. Key Chinese competition overview Paroa cE Hagjue Coos eta 10% Sanya 15% Haojin| 25% Sanlg 10% Apsonic 13% Royal Senke Sanili => ONeeees er Ute esr citcny Rugged Reliable Repairable Returns Not Expensive