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News18 » India
4-min read

Rajiv Bajaj: Being original to succeed

Making a successful product is often a case of being original in a new segment.

News18test sharma |

Updated:October 29, 2011, 10:01 AM IST
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Rajiv Bajaj: Being original to succeed
Making a successful product is often a case of being original in a new segment.

Name: Rajiv Bajaj

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 For me, there's only one conclusion: Our management tool kit is outdated.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.

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