Bajaj hopes to dent 125-135cc with Pulsar brand which has more brand value.

they should keep shelf life of models for longer duration for brand penetration

Chaotic moves like creating many models and failing will have far-reaching consequences on Bajaj brand as a whole.

Why not Sprint ? New Brand Name, more brand related expenses, takes time to penetrate any brand name (for that matter)...

Bajaj Auto plans 135cc Pulsar

Mumbai: Bajaj Auto is seeking to do a Discover with another powerful brand. It is launching 135cc Pulsar in the executive segment next week. With this, Bajaj will add to its Pulsar line-up of 150cc, 180cc and 220cc. Industry sources said the bike is likely to be priced at around Rs54,000 (ex-showroom Delhi).

In July this year, Bajaj chose the Discover brand to re-enter the 100cc space, ostensibly to leverage on the brand value, despite having an option of upgrading Platina -- its existing offering in the 100cc space.

VG Ramakrishnan, senior director (automotive/tractors), Frost & Sullivan, said, "Bajaj is cashing on Pulsar's brand value. Pulsar has rocked the market, be it in the 150cc, 180cc or the 220cc space. By encashing the popularity of the brand, Bajaj is undertaking product extension to the executive segment."

Bajaj already has XCD and Discover 135 in the executive segment. With these brands already there, why would Bajaj revisit the segment, which has more conservative customer attitude, with a brand that's associated with performance sports?

Milind Bade, general manager (marketing), Bajaj Auto, said, "A customer does not buy a bike looking at its 'cc', but it's the brand that he purchases. And while Discover and XCD are more of commuter bikes, Pulsar is a sports segment bike. By getting Pulsar in the executive segment of 135cc we are trying to get a small chunk of non-sports customers into the sports segment."

Bade said the executive segment is 65% of the total bike market and the sports segment is about 17%, and Bajaj would want to increase the size of the pie (the sports segment).
"Sports segment will start getting re-rated and will do higher numbers than the executive segment. So our objective is that we will concentrate on two brands -- Discover, which will help us gain market share and Pulsar, which will help in expanding the sports category," Bade said.

Executive is not a big segment and has bikes such as Hero Honda Glamour and Achiever and Super Splendor, HMSI's Stunner CBF, Shine, TVS Flame, apart from Bajaj's Discover 135 which sells around 10,000 units per month and XCD 135 which sells 5,000 units.

With Bajaj expanding its presence in the executive segment, it may lead to cannibalisation of its existing two models (Discover and XCD). However, Bade said it will not happen as a Discover customer looks at economy and mileage, is usually an elderly one, while that of a Pulsar is young who wants aggressive performance.

But according to an analyst with a leading research firm, "Our talks with Bajaj reveal that the company expects the net of cannibalisation to be around 15,000 units. While this bike will give them some incremental volumes, it will not be a game-changer for Bajaj. Pulsar being its premium brand, will add another 15,000 units to the executive segment. The only other thing this brand will do is give better margins than Discover and XCD," He said since XCD 135 sells only about 5,000 units per month, it wouldn't be surprising if Bajaj discontinues just the way XCD 125 was.

Ramakrishnan said, "It is likely that Bajaj will push its Discover brand out of the 135cc segment and since there are high chances of cannabalisation between the two brands, Discover will be pushed down to the 100cc segment and Pulsar will be kept as their top brand for the performance segment."

Pulsar has already seen an 80% jump in sales over the last 6 months. The Q2 2009-10 average sales were 45,000 units per month as compared with 25000 units per month in H2 2008-09 and have reached an overall share of 50% in the sports segment.