Case study of Royal Enfield.

The case is structured to achieve the following teaching objectives:

To understand the importance of product quality in the success of a brand

Analyse the strategies followed by the management of Royal Enfield to revive the fortunes of the brand

To understand the role of different marketing mix elements in building brand equity

Appreciate the importance of creating better brand experiences to connect with customers

To understand the threats faced by a business due to the entry of new players into the market

Suggest the future strategies that should be followed by the management of Royal Enfield.

For 2014, Royal Enfield, the motorcycle division of the India-based automobile manufacturer Eicher Motors, recorded sales of 302,592 units. The sales for the year were higher than even the worldwide sales of Harley-Davidson for the first time in the brands history. The spectacular figures resulted from the turnaround strategy the companys management implemented after its sales hit a low of 2,000 units per month in the year 2000.

During the early 2000s, Royal Enfield suffered from several problems like poor quality of its products, outdated design, changes in customers' tastes and preferences, and the entry of Japanese two-wheeler manufacturers in the Indian market. Despite having a cult following among its fans, many prospective customers saw Royal Enfield Brand as a relic of the past.

To turn around the fortunes of Royal Enfield, the management began taking several marketing initiatives in the early 2000s. Despite facing strong opposition from the brands fans, several design changes were made to the vehicles. A lightweight aluminum engine was developed to replace the old cast iron one. Further changes like using a single platform for all its vehicles and introducing new models like the Royal Enfield Thunderbird saved costs and boosted sales. To enhance the brand experience for its customers, Royal Enfield improved the quality of its dealer outlets and started company-owned flagship outlets called Royal Enfield Concept Stores

The origins of Eicher Motors (Eicher) date back to 1948 when Goodearth Company was set up to import tractors from other foreign markets and sell them in India. Between 1952 and 1957, Goodearth Company imported and sold 1,500 tractors in India. In 1958, it entered into a joint venture with Eicher Tractor Company of Germany to manufacture tractors in the Indian market.

The joint venture was named Eicher Tractor Corporation of India Private Limited (ETCI). ETCI built its first factory in Faridabad and sold its first tractor in the Indian market in 1959. The name was changed to Eicher Tractors India Limited when it was converted into a public limited company when its Indian shareholders bought out the German stake in the company in 1965. By the year 1975, 100 percent indigenization had been achieved in the manufacturing of Eicher Tractors.

In 1980, Goodearth Company was renamed Eicher Goodearth Limited to leverage the Eicher brand image in the country. In 1982, the company agreed with the Mitsubishi Group of Japan to manufacture Light Commercial Vehicles in India. A new company called Eicher Motors Limited was incorporated the same year to manufacture commercial vehicles other than tractors. In 1990, the Eicher Group entered the two-wheeler business when it bought a 26 percent stake in Enfield India Limited. By 1993, the Eicher Group had acquired 60 percent of shareholding in Enfield India Limited and had become its controlling stakeholder.

ROYAL ENFIELD: In 1893, Enfield Manufacturing Company Ltd (Enfield Manufacturing) was set up in England to manufacture bicycles. The company manufactured its products under the Royal Enfield brand. Not content with limiting its product line to bicycles, Enfield Manufacturing soon decided to focus on building other types of vehicles. In 1899, it started manufacturing a Quadricycle called the Royal Enfield Quadricycle. A rear-mounted engine powered the Royal Enfield Quadricycle. Despite being an innovative concept then, the Quadricycle had limited market potential. In the year 1901, Enfield Manufacturing launched its first motorcycle. This was fitted with a 239 cc engine.

ROYAL ENFIELD INDIA: As part of its global expansion strategy, Enfield started selling its motorcycles in the Indian market in 1949. In 1955, the Indian government placed an order for eight hundred 350 cc Royal Enfield motorcycles for use by its police and armed forces. The Royal Enfield motorcycles were considered an ideal choice for the Indian army for patrolling the countrys border...

A CULT BRAND IN TROUBLE: Despite operating in a niche segment, Royal Enfield remained one of the most admired two-wheeler brands in India. Both motorcycle enthusiasts and customers preferred bikes in rural areas...

REVIVING THE BRAND: Immediately after taking over as CEO, Siddhartha analyzed the strengths and weaknesses of Royal Enfield to come up with a strategy to put the brand on its path to revival. He concluded that the sales of Royal Enfield motorcycles needed to be improved quickly to save the brand...

FOCUS ON OTHER BRAND ELEMENTS: With the quality issues addressed, the management focused on improving the customers experience of buying and owning the brand. To improve the sales experience, Royal Enfield improved the look of the dealer outlets...

AIMING HIGHER GROWTH: Even though the prices of Royal Enfield were higher than that of the low-powered Japanese motorcycle brands sold in India, they were cheaper than the major global brands. And to keep the motorcycles affordable in the price-conscious Indian market, the company did not revise its prices even after the brand's prospects started to improve...

LOOKING AHEAD: The strong pricing power of the Royal Enfield brand and the improved operating margins rapidly increased the valuation of the company. By 2015, Eicher Motors had become one of India's most expensive automobile stocks.

What is the importance of product quality in the success of the above brand? Analyze the strategies followed by the management of Royal Enfield to revive the brand's fortunes. What was the role of different marketing mix elements in building brand equity in the abovementioned case? What steps should be taken to create a better brand experience to connect with customers? Suggest the future strategies that the management of Royal Enfield should follow. Who were the major customers of royal Enfield? Who was the CEO who helped the brand turn around? Briefly summarize Enfield's history.