Royal Enfield (Bullet) – Consumer Profiling

Indian automobile industry

The automobile industry in India is the ninth largest in the world with an annual production
of over 2.3 million units in 2008. In 2009, India emerged as Asia's fourth largest exporter
of automobiles, behind Japan, South Korea and Thailand. India’s automobile sector consists
of the passenger cars and utility vehicles, commercial vehicle, two wheelers and tractors
segment. The total market size of the auto sector in India is approximately Rs 540 billion and
has been growing at around 8 percent per annum for the last few years. Since the last four to
five years, the two wheelers segment has driven the overall volume growth on account of the
spurt in the sales of motorcycles. However, lately the passenger cars and commercial vehicles
segment has also seen a good growth due to high discounts, lower financing rates and
a pickup in industrial activity respectively. Major automobile manufacturers in India include
Maruti Udyog Ltd., General Motors India, Ford India Ltd., Eicher Motors, Bajaj Auto, Daewoo
Motors India, Hero Honda Motors, Hindustan Motors, Hyundai Motor India Ltd., Royal Enfield
Motors, TVS Motors and Swaraj Mazda Ltd. With the economy growing at 9% per annum and
increasing purchasing power there has been a continuous increase in demand for
automobiles. This, along with being the second largest populated country, makes the
automobile industry in India a very promising one.

Indian two wheeler market

Ever since the old Lambretta scooter was replaced with the flurry of vibrant two
wheeler models, Indian two wheeler industry has seen a phenomenal change in the way they
perceive the Indian market. Two wheeler manufacturers are now competing in an ever
growing consumer market by bringing out new products and features. The country has now
grown into the second largest producer of two wheelers in the world. Currently there are
around 10 two-wheeler manufacturers in the country, and they are Bajaj, Hero, Hero Honda,
Honda, Mahindra/Kinetic, Royal Enfield, Suzuki, TVS and Yamaha. There have been various
reasons behind this growth. Because of poor public transport system, the citizens found
convenience in two wheelers. Added to this is the fact that the average Indian still does not
have the purchasing capacity for a more expensive, four wheeler. The story of Mr. Ratan Tata
inspired by a family of four members travelling in Indian roads, not concerned about safety
and the evolution of the idea of TATA Nano has been quite famous globally. The Indian two
wheeler industry can be divided into motorcycles, scooters and mopeds. The consumer has
changed his preference from mopeds to scooters and then to motorcycles. The trends seen
in the past few years include females increasingly using two-wheelers for their personal
commutation and various two wheeler manufacturers designing vehicles specially to cater to
needs of this segment. One of the earliest revolutions in this industry was Kinetic’s
introduction of the concept of electronic/self-start and automatic gears which made two
wheelers comfortable and useable by women, when compared to old Bajaj
Chetak advertisements which showed middle aged females riding a Bajaj Chetak scooter. A
recent trend in the industry has been electric vehicles, which mostly leverage on their eco-
friendliness and low operating costs, but is still not accepted well due to the lack of reputation
of the manufacturers and lack of trust on technology, which is still being perceived in the
nascent stages, especially battery and inverters which prove to be very expensive
components. TVS recently leveraged this opportunity by launching a hybrid model of
their non geared scooter - TVS Scooty. The end of the last decade saw Bajaj taking a radical
decision to do away with the Scooter range and completely concentrate on motorcycles,
especially stating change in customer’s preference as the main reason. The customers are left
without a choice in most cases than to migrate from the traditional scooters of the Indian
family to the all youthful bikes that one’s son rides to college. With rising incomes and
purchasing capacity of the average Indian, the demand for two wheelers in the power
segment has increased considerably. There also have been constant signs of maturing of the
market when the manufacturers reacted by coming up with innovations, catching attention
of potential buyers and sometimes creating a new class of customers or altering the
preferences and attitudes of existing consumers.

Profile of the Organization

Royal Enfield are the makers of the famous Bullet brand in India. Established in 1955, Royal
Enfield (India) is among the oldest bike companies. It stems from the British manufacturer,
Royal Enfield at Redditch. Royal Enfield has its headquarters at Chennai in India. Bullet bikes
are famous for their power, stability and rugged looks. It started in India for the Indian Army,
350cc bikes were imported in kits from the UK and assembled in Chennai. After a few years,
on the insistence of Pandit Jawaharlal Nehru, the company started producing the bikes in
India and added the 500cc Bullet to its line. Within no time, Bullet became popular in India.
Bullet became known for sheer power, matchless stability, and rugged looks. It looked tailor-
made for Indian roads. Motorcyclists in the country dreamt to drive it. It was particularly a
favourite of the Army and Police personnel. In 1990, Royal Enfield ventured into collaboration
with the Eicher Group, a leading automotive group in India, in 1990, 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. Royal Enfield made continuously incorporating
new technology and systems in its bikes. In1996, when the Government of India imposed
stringent norms for emission, Royal Enfield was the first motorcycle manufacturer to comply.
Currently Bullet brand in India offers different variants as per the features valued by different
consumers.
 Royal Enfield Bullet Standard
 Royal Enfield Classic (350cc and 500cc)
 Royal Enfield Bullet Electra
 Royal Enfield Bullet Thunderbird
 Royal Enfield Bullet Continental

Factors influencing Buying Behaviour

 Cultural
The culture does play an important role in the buying behaviour of the consumer. For
example, in case of Royal Enfield Bullet, it has always been linked with toughness thus
we could see its initial usage in the Indian Army and police forces. Thus those people
seeking the kind of respect that the army and the police personnel get tried to own
the bike. Thus Royal Enfield Bullet has particularly been associated with the attributes
such as toughness, masculine and respect.
 Social
The social circle that includes friends, family, relatives and the neighbourhood also
becomes an important factor that influences our buying behaviour. Bullet’s potential
customers do really get influenced by the influence of the social circle that they live
in. It makes them want to own the product even early.
  Personal
Bullet users are generally the people lying in the age groups of 25 to 35 years. But
recently it has found a new segment of customers, which are the people in the mid
40s who like to travel and explore. Generally healthy people consider buying this
particular product as it matches their personality which makes them feel confident.
As discussed it is associated with the toughness and masculine features which attracts
a whole lot of tough and adventurous riders towards Royal Enfield Bullet.
 Psychological
Most of Bullet’s customers want the society to seek themselves to be perceived as
being tough and rugged, especially the youth who wants popularity among the
opposite sex. This becomes a motivation for some, but for the others the motivation
to travel and explore the world becomes a key factor in the purchase. They would
want a bike that can travel long distances and difficult terrains without breaking down.

Buying Roles
 Initiator
In case of this particular segment of bikes, the initiator is generally seen as the need
to have a bike that can either match the personality of the user or the specific need
that can be fulfilled by the high powered engines. For example, a mountaineer may
choose bullet for over other options as the high power engine will come handy in
those tough terrains.
 Influencer
The advertisements play an important role as an influencer. Moreover, the word of
mouth marketing by the current users also influences the decision making process.
Generally, in Indian culture, the decision in this particular category is greatly
influenced by the test drive taken on a friend’s or a relative’s bike
 Decider
The Royal Enfield Bullet is popular among youth in India who generally associate their
manliness and toughness with the bike. So they may fall in the age bracket of 25 – 35
years, where they themselves belong to a working class and take their own decisions.
 Various other factors such as income, usability and family may affect the decision as
well.
 Buyer
There is no difference between the buyer and the decider in this case. The buyer
generally takes the decision.
 User
The users in Indian context are varied. If it’s a joint family then the bike may be used
by most of the male members of the family but the buyer will have the highest
authority over the bike. Nowadays, some women who wants to break the norm that
Indian women are soft have also started using these tough and rugged bikes. These
are generally the explorers and travellers who are looking for low maintenance and
tough bike that can travel long distances without causing any problems.

Type of Buying Behaviour

Customer Involvement
High Low
Considerable
High Complex Variety Seeking
Differences
Among
Low Dissonance Reducing Habitual
Brands

The consumer buying behaviour is complex for Royal Enfield bullet. It’s a high price product
with the standard variation being the cheapest priced at more than a lac. So customer
involvement in this case would be high as consumer’s would want to take an informed
decision before spending too much. Moreover, in Indian context there are not much of the
brands to choose from this particular category and at the price range for which Royal Enfield
Bullet is sold the competitors are non-existent. The nearest competitor of Royal Enfield Bullet
can be Harley Davidson which are priced much higher. So the differences among the brands
can be considered to be very high.
Stages in Buying Process
 Problem/Need Recognition
Since its inception it has always identified itself with the defence sector. Due to its
involvement in world wars 1 and 2 and it has proven its utility. Also it has associated
with the Indian army and police since 1965. Royal Enfield has identified its segment as
a middle class people that want a bike which is stylish and at the same time also
powerful coupled with the feeling of adventure and independence.

 Information Search
Once a consumer identifies a need, the natural consumer behaviour is to search for
the alternatives to fulfil the need. In Royal Enfield’s Bullet buying process the
consumer might come across different variations. Different models will have different
features and will be priced accordingly.

 Evaluation of Alternatives
The buyer will evaluate various models after gathering the information. The result of
evaluation will be the purchase decision. The evaluation may be done on the basis of
the requirements of the user. These may include the engine capacity, style, price, ease
of handling, self-start feature, mileage and other additional features that company is
willing to provide with the product.

 Purchase Decision
After evaluating the various alternatives, we may find ourselves in a position to make
a final purchase but many other factors may affect the purchase decision as well.
Many times in case of Royal Enfield Bullet, the consumer generally changes decision
based on the availability of the model or the after sales service. Sometimes the
salesperson at the showrooms also affect the buyer’s decision.

 Post Purchase Behaviour

The customers of Royal Enfield Bullet are generally found to be very loyal. We would
always observe a sense of pride among the Bullet users that has actually given rise to
a large number of Bullet communities all across the world. Moreover, Bullet users are
the long term users wherein the product does not lose much on the after sales price
as well. We will observe Bullet users to be very conscious of their bikes such that they
will equip their bikes with some additional accessories as well other than the ones
offered by the company in the particular models.