Tuesday, March 14, 2006

Hercules : Ride Your Passion

Brand : Hercules
Company: TI Cycles India Ltd
Agency : Mudra

Indian Cycle market is estimated to be around 2000 crores. Hercules is one of the oldest cycle brands in India. Hercules was launched in India in 1949. The Indian cycle market was a growing market those days because it was the main mode of transportation while motorcycles and cars were not affordable to Indian consumers.

The cycle market can be broadly divided into
1. Kids cycle
2. Adults cycle (old roadster type)
3. Youth’s cycle (girls and boys versions)

The cycle market was skewed towards rural market and the market is very price sensitive. The leadership position of TI cycles was taken away by Hero cycles in the nineties. TI cycles have brands like Hercules and BSA to its fold.

Indian cycle market is facing a major crisis now. The opening up of economy has changed the psychographics of Indian consumers. With the advent of affordable motorcycles and cars, the industry which was hit hard was the cycle industry. Since consumers have shifted to more sophisticated mode of transportation, the cycle market was shrinking and became confined to rural market. In the urban market the cycles were used mainly by kids aged 6-17.
The market for cycles for youth is virtually killed with the entry of mopeds and low end motorcycles. The rural market is also facing pressure with more mopeds and motorcycles exploring that market.
The two major brands of TI cycles were Hercules and BSA. While Hercules was the ordinary adult cycle, BSA focused on the youth segment with more cotemporary look.

With Hero cycles claiming the leadership position in the mid segment of cycles in India. TI cycles were in a tight spot.TI cycle had two choices,
1. To focus on Kids cycles and rural market
2, To focus on urban market.

TI chose to tap the urban market which was virtually at the decline stage. It chose the age old Hercules brand to revive the urban cycle market. Hercules brand is originally owned by Raleigh UK. TI decided to change the brand Hercules as an Urban brand. In 1992 it launched the Hercules MTB ,the first mountain terrain bike of India. The new product was backed by some cool ads from Mudra. The ads raised the stature of Hercules brand to an aspirational level and was targeted at youth aged 14-19. The consumer insight was that the youth prefer cycle which is more masculine and the positioning also was in tune with this insight.

But a problem with cycles is that it is easy for the competitor to clone your product innovations. Hero cycles matched TI in all product launches with their own version. In 1998-2000 Hercules MTB was relaunched as a more adult like cycle.
TI hit upon the idea of tapping the adult while launching the Hercules MTB range. Since there is no incentive for adults to use cycles, the task was to create a cycling culture in the market. First the product has to appeal to adults and there should be a need to use this product. Thus came the idea of promoting cycles for leisure and exercise. This idea enabled Hercules to come out with lot of new products and value additions. The cycles were made more masculine, more comfort and promotions aimed at creating a cycling culture.
TI used the multi brand strategy to counter the threat of Hero cycles, Using BSA and Hercules, TI was able to command the premium segment of the cycle market. The geared cycles, BSA ladybird for girls, BSA city for 30+ city rider, BSA i bike designed in Italy, cycle with shock absorbers, cycle without chain etc ensured that Hercules and BSA is known for innovation and created some excitement in the otherwise dull cycle market.The latest BSA Foldman is India’s first foldable cycle . Hercules has roped in Yuvraj Singh to endorse the cycle. Although I have criticised celebrity endorsements, using Yuvraj singh makes perfect sense for a sagging market.

These innovations have helped TI to still hold 30% market share and a major share of premium value added cycle segment. But the path is not so easy to survive. One of the major task is to create the culture of cycling in India. In the West, there is a cycling culture while in China and Japan it is a major mode of transportation. With the increasing fuel prices, congested roads, increasing health consciousness are indicators that there is going to be a reinvention of cycling in India. It takes patience and money to ride that reinvention and Hercules is all set to ride that wave.