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Royal Enfield Consumer Decision Making Process

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Consumer decision making process

Who are the consumers of Royal Enfield?

Through our earlier project, we had identified the following 3 target segments for Royal Enfield bikes:

  1. Price insensitive middle income bike enthusiasts
  2. Brand seeker Royal Enfield enthusiasts
  3. Middle income adventure seekers

Defining the types of consumers

Segment

Prominent characteristic

Price insensitive middle income bike enthusiasts

Cognitive: While trying to satisfy their requirements, this type of consumers perform higher mental processes to arrive at a decision. Their somewhat price insensitive nature push them to buy a high end product to cater to their hobby, but at the same time they are aware of the limitations of their disposable income. They, therefore, often decide on a product like Royal Enfield Standard, which is quality-wise superior than Bajaj Avenger and also not as costly as Harley Davidson.

Brand seeker Royal Enfield enthusiasts

Emotional: These are the consumers who spend least amount of time and effort on deciding what to buy. They are loyalists and have high regards for the brand Royal Enfield.

Middle income adventure seekers

Economic: They are devoid of emotions and affinity for a particular brand. They are mostly logic driven and always attempt to optimise while considering all the decision variables. Adventure seekers (long drive enthusiasts) usually prefer cruise bikes, and Royal Enfield’s Thunderbird is one of the cheapest and the best option available under this category.

Stages of consumer decision making and buying process

  1. Problem recognition: The need recognition for Royal Enfield bikes particularly is often desired state driven as the major portion of Royal Enfield owners are brand loyalists. However, in case of adventure seekers and bike enthusiasts, the need can be actual state driven.

Through the primary survey data, following situations of need recognition have been identified:

  1. Malfunctioning of their current vehicle: This is true for both, repeat customers and new customers of a brand. This is one of the most prominent situations for middle class segments.
  2. Changing financial circumstances: An increase in disposable income encourages brand admirers to switch from low cost bikes to their favoured brand.
  3. Marketing activities: This acts as an external stimuli that attempts to create a desire based need.  
  4. Introduction of new product range: This often affects the emotional and passive category of consumers. When Royal Enfield came up with the Classis model, the sales figures went through roof as the need recognition was triggered by the new model. Today, the major portion of revenue is generated from the sale of Classic (350cc and 500 cc) model.

[pic 1]

                                        

  1. Information search: Decision of buying a bike is an extended problem solving decision. Also, the product is complex in terms of the technical details (e.g. engine volume, power, bhp etc.) and is also very costly. There are a number of alternatives available in market with varied quality and cost. All these factors make it necessary for the customers to do exhaustive information search prior to making the purchase.

Following category of sources of information were identified and were floated in a survey to understand the distribution:

[pic 2]

The majority of the buyers of bike personally examine and test ride before they decide on which bike to buy. These factors may influence each other, for e.g., the product rating might be the first step for consumers to decide which product to examine personally and move ahead with.

Search Dynamics

Decision making is a step by step process, involving awareness of various competing brands. Various brands that could give a competition to Royal Enfield were identified and floated in a survey to identify the awareness and attractiveness of the brands. Following are the awareness set and consideration set analysis from the survey.

        [pic 3]

[pic 4]

  1. Evaluation of Alternatives: Since buying a two wheeler, especially for adventure seekers, is a long term solution, a lot of rationalization and analysis goes in on evaluating the alternatives (not so much in case of brand loyalists).

Beliefs and Attributes

Royal Enfield has a very strong brand image and is considered tantamount to masculinity especially due to its strong ties with army and police.

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