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A cult brand that hates ads

Opinion, 31 May 2017
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Anvar Alikhan dives into the brand building that has made the motorcycle company Royal Enfield the market leader in India, with 90% market share. Without traditional or new media advertising, the brand has concentrated both on its identity and the identity of bikers to impressive effect.

Visitors to India in the 1980s were often surprised - and delighted - to see brand new Royal Enfield motorbikes on the roads, and one visiting advertising guru suggested they could become an important global brand out of India. It's taken longer than one might have thought, but it seems to be happening now.

Royal Enfield has been growing consistently at over 50% in the Indian market in recent years, and today it has a market share of over 90% in its segment. Its cult motorbikes command a waiting period of up to three months. And the company exports to over fifty countries, with its own retail stores in places like Milwaukee (the biking capital of the US), London, Paris, Sydney and Manila. The company's share price has multiplied by an astonishing one thousandfold over the past fifteen years and, according to Brand Finance, it now has a brand value of over $500 million.

So what exactly has the brand's journey been, and what are the learnings it offers us?

Royal Enfield is arguably the world's oldest continuously manufactured motorbike and, after the British motorbike industry imploded in the 1970s, it continued to be made in India. In the 1990s, it merged with Eicher Motors, a leading Indian automotive player, but by 2000, Eicher's board decided to shut down the business because of its losses. The person who fought to keep Royal Enfield going was Siddhartha Lal, the 27-year-old motorbike-fiend son of the family that runs Eicher, and he was handed the responsibility of the business.

Lal proved to be to Royal Enfield what Phil Knight was to Nike. Perhaps one of the few CEOs who wears biking gear to the office, he has built a biker culture within the company, and has ridden hundreds of miles testing his bikes. He has transformed the self-image of the company from being an engineering company to a consumer marketing company. Or, to be more precise, a biker company.

Royal Enfield is a case study in brand building. Its bikes have been re-engineered over the past few years, and strategically positioned, both in terms of engine size and price point. The company is said to 'hate advertising' (although it has done some very interesting work through Weiden+Kennedy). Instead of conventional advertising, it focuses on creating experiences, such as its annual Himalayan Odyssey - a ride from Delhi to Ladakh, 11,000 feet up in the Himalayas. It has also promoted a series of other events, like the Royal Enfield Rider Mania in Goa and international events, like a Royal Enfield ride through Germany.

The programme also seeks to build an ecosystem around the brand by engaging with India's numerous Royal Enfield biker clubs, which have been organised into a network called the Brotherhood of Bulleteers (after the company's Bullet model). It has co-opted India's community of specialist independent Royal Enfield mechanics and bike customisers, some of whom it has even appointed as consultants. And it takes part in events like the Isle of Man TT and the Goodwood Revival to burnish its serious biker image.

Though the brand rarely advertises, it has developed a brand identity programme inspired by its hundred-year-old heritage and the purity of its riding experience. One of the key insights was that Royal Enfield's craftsmanship is very human, which has led to a visual identity that is functional and yet slightly quirky. This rich, resonant identity unites all the brand's touchpoints, from retail stores to packaging, accessories, biking gear and other brand communications.

The Royal Enfield brand seems to be doing everything right. But, according to CEO Siddhartha Lal, its success so far is Phase I in the journey - creating a viable domestic platform that will drive the development of Phase II, which is the building of a global brand. Towards this end he has set up a UK-based in-house R&D facility, and assembled a team drawn from companies such as Harley-Davidson, Triumph, Ducati and cutting-edge design firm Xenophya. And, to supervise this effort, he has now relocated to the UK.

Lal believes the task of building this global brand, carefully positioned in the mid-size motorbike segment, will take up to fifteen years - and that is the deadline he has set, coinciding with the time he retires. A reminder that doing the right things to build your brand is all very well, but it's only the entry ticket. To pull it all off, you need more stamina than some people might factor in.

About the author

Anvar Alikhan is Senior VP & strategy consultant at JWT, India. He is also a columnist and guest faculty at the Indian Institute of Management, Calcutta.

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