BAJAJ PLATINA INTO DTS-I FAMILY

Bajaj platina is the lowcost motorcycle from bajaj, which crossed sales of 500,000 units within eight months of its launch in April 2006. Bajaj platina sales reduced by 16% in 2007, which is followed by further reduction of 11% in 2008. Bajaj is the first company to intoduce DTS-I technology in India in 2003. DTS-I (Digital Twin Spark-ignition) became a special attraction to the customers .
With the slow growth in the 100cc motorcycle market, bajaj introduced a 125cc engine model in september 2007 with a new technology DTS-SI (Digital Twin Spark-Swirl induction), named as Bajaj XCD 125 DTS-SI. DTSI is the parent technology to the DTS-SI. Bajaj has a dominant market share of almost 50 per cent in the 125 cc + segment. Bajaj XCD 125 alone contributes 13 per cent of the 125 cc + segment, a feat not achieved by other 125cc products after years of existence.

To capture the growth in the 125cc sector, bajaj has to introduce another model in 125cc. If bajaj goes for a new brand creation, it has to spend more in creating a brand. So, bajaj went for brandline extension of Bajaj Platina from 100cc to 125cc using the new DTS-Si technology.

Risks Involved in Brand Endorsement

Do you think the Brand Ambassadors will be paid more after the new Companies Bill 2008. The new law says that “Celebrities will be subjected to legal action, if they use misleading claims to induce consumers to buy a product and the companies shall be charged a penalty”. The law makes Brand Ambassadors to be careful, cautious and ensure the authenticity of the claims while they endorse a brand.
Is there anything in the law about the post endorsement actions?, i.e. A celebrity endorses for a brand and after few months if the claims about the product prove to be wrong, is there any action taken against the Celebrity? Don’t you think the law is biased towards celebrities. Is this the risk taken by the celebrities? Will this make the celebrities demand more remuneration because of the risk involved?

Advertisements in Recession

Do you think expenditure on advertisements has to be reduced during Recession? Such a period is plagued by lay-offs, non availability of funds and so on. But yes, companies should not stop promoting their brands just because of recession.

Research on marketing during a recession showed that cutting TV spending is damaging. The argument is irrefutable, but the reasons that some advertisers still reduce spending are often based on short termism and shareholder ignorance of how marketing works. Sometimes this is induced by the City, because cutting the marketing budget is an obvious way to reduce over-heads, but it costs a fortune to recover afterwards.

Smart businesses recognize that this is no way to manage a brand. Maintaining advertising expenditure gives huge benefit during a down-turn, and pays off when in an upturn. If you have to cut any marketing budget, choose anything but TV, as TV is the best medium for building brands.

When the other brands are opting for reducing their marketing expenditures, smart companies can take advantage of this by taking steps to increase brand visibility through keeping with their expenditure with respect to marketing the brand. This would be true only if companies are sure to survive the recession period.