Abstract

The case is about the revival of the iconic Royal Enfield motorcycle brand. Since the brand was introduced in the Indian market during the mid-nineteenth century, it was highly preferred by rural customers and the government departments like the police and the armed forces. During the late nineties, sales of the brand declined due to a number of factors like poor quality, lack of a proper sales and service network, and weakening of the brand image. By the year 2000, sales of the brand declined to a low of 2,000 units per month. The company’s top management decided to sell or close its two wheeler segment as it was becoming a drag on the company’s performance. However, Siddhartha Lal (Siddhartha), a young member of the Lal family which controlled the Eicher Group, opined that the fortunes of the brand could be reversed. The company’s board agreed to the proposal of Siddhartha and made him the CEO of the two wheeler segment. Siddhartha took a number of initiatives to revive the fortunes of the brand. A new light weight engine made of Aluminum was developed to replace the Royal Enfield motorcycles’ old cast iron engines. New engines had higher fuel efficiency and longer life than the older engines. Royal Enfield took the help of an Austrian design firm called AVL to design the new engines. Changes were also made to make the motorcycles look contemporary. In order to improve the quality of motorcycles, the management made the quality standards for its component suppliers stringent. A new cruiser model called Thunderbird was introduced in the year 2002 to attract new younger customers. Enhanced quality and new models improved the sales by the year 2005. Within a short period of initiating quality enhancement measures, the warranty claims went down. As the quality issues were mostly addressed, the management aimed at improving the customers’ experience with the brand while buying and owning its products. The company improved the look of its dealer outlets and expanded the number of outlets to reach customers in smaller cities and towns. As part of the turnaround strategy for the brand, it launched two advertising campaigns called ‘Trip’ and ‘Leave Home’ in the years 2008 and 2010. In order to make it easy for the customers to identify themselves with the brand, it started organizing periodic ‘Riding Events’. Official riding events involved customers of Royal Enfield going on travel tours and sharing their travel experiences. Some other initiatives launched included the launch of motorcycling gear, launch of a new brand logo in the year 2014, and the launch of a new lightweight model called Continental GT. The management was also aiming to aggressively expand in international markets by increasing its overseas dealership network and by reducing prices. By the year 2014, sales of Royal Enfield exceeded the worldwide sales of Harley Davidson. Despite the strong turnaround of the brand, some analysts were still skeptical regarding the performance of the brand due to the increased competition in the Indian market from international players like Harley Davidson and Indian.

Learning Objectives

The case is structured to achieve the following Learning 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

Keywords

Two wheelers, Motorcycles, Eicher Motors, Royal Enfield, Thunderbird, Siddhartha Lal, Royal Enfield Concept Stores, Leave Home, Trip, Brand Elements, Product Quality, Cast Iron Engine, Riding Events, Royal Enfield Himalayan Odyssey, Continental GT