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Rajiv Bajaj: Being original to succeed

Profile: Managing Director, Bajaj Auto



Age: 45



Why He Won: For spearheading Bajaj Auto's strategic shift from scooters to motorcycles. And for forging an entry into large markets in China and Africa.
I've often pondered over a critical question: Why do 90-95 per cent of all new products fail? This is a very fundamental issue because if the failure rate is so high, it clearly means there is something wrong with the tools with which we operate. For instance, would you go to a cardiac surgeon who has a reputation of 90 per cent failure? For me, there's only one conclusion: Our management tool kit is outdated.

For us, this wasn't just an academic discussion though. In 2008, we were in all kinds of trouble. We had a string of failures, with the XCD, Caliber and Wind. Yet on the face of it, we had done almost everything right. We did all the R&D right. We had done all the manufacturing right. Our costs were under control. We had at least one version of marketing right. We backed the products with big ad spends, a large dealer network, and a good service and parts policy. So, what was really the issue?



A Mix of Left and Right
Now, there are two dominant ways that most consumer companies are run. At one end of the spectrum is the auto or consumer durables industry. It's run like a quasi-engineering industry. It's all about quality and technology. There's a mad rush to do things better — you could call it left-brain thinking — very quantitative and logical. On the other extreme is the fast-moving consumer goods (FMCG) industry, where there's very little physics. It's driven more by psychology, where it's not uncommon to find propositions that promise fairness of the skin or freshness of breath. In a way, that is more right brained — more creative, holistic and qualitative.
My view is that much of the current marketing ecosystem — marketing, market research and advertising agencies — are bred of the stables of the FMCG industry. They think that they can just repackage a product with some new sticker or give it some new name, some funny buzzword like PSPO. It simply doesn't work because somebody makes a better product. And then there's a small minority of CEOs and marketing directors who will go only by cold, rational logic. They often ask: Oh, I made a better product, why doesn't the customer understand? Well, there's something called herd mentality, there's something called making a safe decision or peer pressure and word of mouth. So, what we realised is that you need to have a mix of both.
I've come to believe that we can't operate like an FMCG company because we can't sell a motorcycle by some psychological aura around it. On the other hand, we didn't think we were entirely an engineering company because when we looked out at any market and the products, they were not necessarily the best. The Maruti 800 is not the best product in the small car segment. It's the same with the Hero Honda Splendor or the Pulsar. So, just being better in terms of physics is important, but not enough. So, we said to ourselves that we are in the fast moving consumer technology industry. We need a fair mix and balance of physics and psychology. So, if you look at the Pulsar, the technology of the DTSI (Digital Twin Spark Ignition) is the 50 per cent physics it needs. And then saying "definitely male" or India's most selling sports bike is the psychology that's required.
And in my book, the best way to create brands is to create a category. So, if you create a category of sports bikes, the name you give it — Pulsar — also eventually becomes a brand. I'll come back to why category creation is so crucial to weeding out failures in just a bit.
Don't Confuse Cause and Result
I always tell my people that we live in two worlds; the world of cause and the other of result. The problem is we confuse the two. Take, for instance, our most famous campaign: Hamara Bajaj. Now the reality is Hamara Bajaj is not the cause of our success even in those days. It's the result of it. It's because we became so big, dominant and popular that that emotion found some echo. If we had started with Hamara Bajaj, it wouldn't have had any credibility.
So, how do you tell the difference? I've usually found that the result lies in the material world, while the cause is usually found in the immaterial world. So, if you produce good profits, it's a result where you can count the money. The cause of that is the strategy, which is no more than a thought. It is immaterial. That's no different from what we do on the shop floor. So, if there is defective material, it could be because the tool has worn out. So, why did the tool wear out? It could be because it was not replaced. It wasn't replaced because the guy who should have done it wasn't adequately trained.


Source:
Rajiv Bajaj: Being original to succeed - Forbes India News - IBNLive

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Noor

News approved

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aargee

Nice article; Tks for sharing romeoinvisible5

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rx100.7050

Have to read the whole article... amaxing find, Romeo

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Short Honeymoon trip with my beloved two
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In Pursuit of Swarghat
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Anniversary trip
http://www.xbhp.com/talkies/tourer/2...sary-trip.html

abhichotu.abhi

I'm a big fan of Rajiv Bajaj and Ratan Tata mainly because of them being involved in inventing new segments and possibilities. As rx100 said I had to READ this. Amazing as always.

Samarth 619

What clarity of thoughts and goal... Amazing. Mr. Rahul Bajaj knows what the company needs to do, only that its implementation is the problem.

But when it comes to buying products, often psychology takes the pole position over physics.
Think about it: Did you see someone intentionally purchasing "non-best" product just because their relative/ friend/ everyone is purchasing it?
or deliberately purchasing an inferior/ unsuitable product just to be exclusive?
or because the buyer's perception about "best product" itself is different/ limited?


I have seen girls buying Sony Laptops because it matches their favourite lipstick's/ purse's color. And Sony's products sell mostly at MRP, which is around Rs. 90,000 or so. Whereas I can give you laptops with better specs than that, plus from reliable companies, in under 50k.
(No offence ladies, I really respect and adore you all, its just an example).

Unfortunately, Psychology wins over physics mostly, especially among uninformed consumers. Practical but a very Sad fact.

vrugonnab

Often search for his interview videos just to see how he answers the questions! amazing clarity in thoughts. Whenever you ask about scooters, his answer is our share in global motorcycles market is 10%, so there lot of headroom to grow here. Once we fulfill this potential, then we can look at scooters!!

There is no denying the fact that psychology plays the most important role with uninformed buyers and unfortunately they form majority in any market. Back in the days, when Splendor was launched, it's an amazing bike for whatever it has to offer. But now, there are better options at the same price, still people love to buy Splendor and the same goes for Pulsar. If Bajaj manages to strengthen Discover & Boxer brands equally, then there is no stopping them in Indian motorcycle market.

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Satyamzma

But What's this??? Bajaj playing it Wrong ??

Bajaj Discover 125 'Chalta Nahin, Daudta Hai' TV Commercial - YouTube

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j4zb4

^^ Actually true reasons of most people buying those bikes...

A friend of mine works for O&M... He says an extensive research was carried out... Cannot comment more on it...

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saurabh81

Amazing and inspiring as usual...
+1
Two visionaries of India who are brave enough to do the new...
I think its fine... It's the new breed of ads from west...
Even ford is doing the same...
It's just to shake the conventional buyers toward's a non conventional product....

Best part "A Mix of Left and Right" actually two different worlds exist in one space: Physics driven and psychology driven or unconventional and conventional or for that matter use any other words....

The first group always crave for the new and the other old one always for tried and tested....
And both react accordingly for a product launch...

Having an optimum mix for both will help growth a lot....
for example "Pulsar" its a well settled product now so it will keep the conventional happy, at the same time launching new versions will make unconventional satisfied....

What Bajaj need to work most now is to get rid of the low quality badge... The new products are much better than the old one, but ppl (specially in commuter class) have a deep seated -ve impression about bajaj, may be a proper add campaign help out...

All the best bajaj....