Bajaj- only automobiles or more than that?

Taking on the establishment or taking risks, runs in the Bajaj family. From Rahul Bajaj championing the cause of Indian industry to stop foreign players into India to his son shifting focus from the cash cow scooters to motorbikes to take on the Japanese players in motorbikes to the radical thought of making Bajaj Auto from a ‘Branded House’ to a ‘House of Brands’, surely they are a family who think to out-maneuver competition.

Rahul Bajaj was initially averse to the idea the bikes sporting individual brand names and Bajaj Auto will be a house of independent brands like FMCG giants Unilever and P&G. The focus was to be on four brands – Pulsar, Boxer, Discover and KTM. It would not use the parent name on its identity. But with the success of Bajaj Auto as one of the leading motorbikes manufacturers and stopping the scooters with Rajiv Bajaj at the helm, the senior Bajaj has to accept it.

Now with the help of one of the leading Marketing gurus and management consultants Jack Trout of Trout and Partners who has given the positioning bible to us, Rajiv has taken an enormous step. An attempt to associate the Bajaj brand name exclusively with the motorcycles made by his company and the removal of Bajaj name from other products/ services ranging from hair oil, home appliances, insurance to financial services.

The strategy to do this is based on Trout’s thoughts that a particular brand must stand for only one thing in the mind of the consumer. Line extension is the gravest mistake any brand can do. This though not a line extension has similar areas. According to them, Bajaj should stand only for motorbikes in the consumer’s mind. All other Bajaj brands such as Bajaj-Allianz, Bajaj Electricals, and Bajaj Finserv among others should remove the brand name and try to get an individual identity. This would not only help them stand on their own accord based on brand qualities and brand values but also act as a differentiation from competition.

I tend to differ with the thought because the principle which applies to brands in the developed world is being applied to the developing world that have emerged and evolved in a different way. The consumer behavior is starkly diverse and the emotional quotient among brands in the eastern world is far more pronounced than in the west. In India, line extension has worked till now because of the trust that has been instilled in the brand. Tatas, Birlas, Godrejs, Ambanis and a host of other family have run businesses have ventured into diverse fields with using the same brand name. And they have done well and continue to do so.

These brands have evolved since the pre-liberalization days and have a trust and understanding among Indian consumers. New brands have emerged since then but these old brands have stood the test of time. The Tatas cannot even think of removing the name from their diverse offerings to make Tata a ‘House of Brands’.

Changing the automotive business and marketing it individually is one thing but doing it across industries is slightly off target I would presume. One of the biggest brands in the world GE, which has a product offering which no company, can boast of. There are into all products and services ranging from consumer goods to aviation. They have not changed their GE lineage inspite of being in the most competitive and diverse market as the US. Bajaj name is even more important in the rural and semi-rural areas of the country which are yet to be tapped. Bajaj name would give the company a head start over other foreign brands.

All said and done, this is even more difficult since some of the Bajaj businesses are run by other family members who are strictly against the name change. So such a thing happening would be highly improbable if not impossible.