''Once Marley has decided to go the niche way, the company must work hard to own that area and expand the appeal of its bikes'' Siddhartha Lal, Chief Executive, Royal Enfield Motors

Let's evaluate the two main alternatives: Marley changes its stance, develops a 100-cc fuel-efficient bike, and fights with the big boys. Should it? After 20 years of understanding the commuter market, perfecting fuel-efficient technologies and building up huge scale, the Indo-Japanese manufacturers are hardly going to lie on their backs and let Marley walk away with the prize. Also, it will take huge resources and understanding of a very different business for Marley to be successful in this area. At best, this route will give Marley a sense of hope, but eventually it'll be fighting a never-ending war with giants without the right artillery. Besides, with the scale and muscle that the large manufacturers have, Marley will need a lot of staying power, and will probably get squeezed hard on margins-as this has become more of a commodity business of selling fuel-efficient commuting machines.

On the other hand, Marley is perfectly placed to market a very well-differentiated product effectively. As the market evolves, it is in the nature of the individual to want something more interesting, exciting, and differentiated. And the individual will be willing to pay a higher price for it. Marley already understands this area of the market better than all the others, and has a strong brand that can be strengthened.

The margins at the upper-end of the market are always much higher than in the mass market. There is also room at this end of the market to build further expertise, which the Indo-Japanese mass producers cannot pay attention to, such as individual customer addressal and customisation, right now. In short, Marley will be closer to the pulse of the increasingly discerning motorcyclist. This makes a value-generating difference to the fulfilment of this individual's expressed and latent needs.

Once Marley has decided to go the niche way, the company must work hard to own that area and expand the appeal of its bikes. It must concentrate on getting high realisation from the bikes it sells, and to come out with new models that are appealing enough to broaden the brand's net. Apart from the incremental new models it has already unveiled, it should continue to plan many years in advance and conceptualise products with genuine market insights. These new products should embody the soul of the brand, while pushing the design and performance envelope and achieving world-class quality in the process.

In addition, Marley should use the vast and competitive vendor network of the commuter bike manufacturers to reduce its own costs and bring up their quality to world standards. With its international brand and cruiser bike range, Marley should also work hard on a long-term play in high-margin overseas markets, as there is opportunity for such bikes. In the Indian market, where the early gains have to come from, the team should focus on increasing realisation by cutting costs and by improving distribution and sales processes. Also, in a market that is driven increasingly by upgrades-the company should pay attention to the existing large base of commuters by offering attractive exchange and finance packages.

To conclude, Marley should stick to its guns, invest in its niche and be the aspirational motorcycle in India (with a different play for overseas markets)-and eventually make various mobikes for people to upgrade to. This route will give them both glory and great financial reward, as well as a long-term sustainable advantage in the market.

''Catering to the lower-end commuter would amount to diluting the marque's associations and brand image'' Amul Gogna, Executive Director, ICRA

Needless to say, the success of any business is a derivative of (a) revenue maximisation and (b) cost optimisation. These fundamental truths apply to Marley Simpson as much. However, we must bear in mind that while Marley's product has niche lifestyle appeal, its new investment ability is limited and it is incapable of competing in the segment dominated by players such as Halo Handa.

Marley's bike is clearly for the classes, who value the motorcycling experience. Importantly, Marley has held on to its premium brand image as an awe-inspiring, aspirational brand among motorcyclists. Thus, any attempt to cater to the 100-150cc commuter segment would dilute the marque's image.

The issue here is one of mindset, and not as much of technology (for that can be easily outsourced). The prudent path to tread for Marley would be to create new markets, even as it nurtures its brand heritage. A multi-pronged strategy towards this goal could be deployed on the following fronts:

Product Differentiation: Critical in the niche that Marley occupies. The company should move up the value chain by incorporating non-replicable ideas such as innovative safety features, among others. Relationship Building: The focus should be on building a lifetime relationship with the customer. This could include nurturing the emotional bond associated with the Marley bike, through owner's club memberships, do-it-yourself workshops, newsletters and so on.

New Launches: These must build on the core values of the Marley brand. Besides enlarging the choice for the prospective member of the Marley club, this would also widen the choice for upgraders. Globally, marketers are focusing on product development, branding and marketing, rather than trying to reinvent the wheel. With outsourcing a viable alternative, newer launches may not be so expensive as they once were.

Service Standards: Besides ensuring a good service network, much sophistication is required to handle discerning biking enthusiasts. The company should offer an authentic Marley retail experience.

Cost Reductions: It is not a volume play. Yet, cost-cutting is not a function of scale alone. The company would do well to re-examine the manufacturing processes to trim flab wherever necessary.

All this could ensure that Marley Simpson keeps cruising on its high road even while the masses commute on the streets.

''Marley should focus on product development in close coordination with the best design house in the world and on marketing'' Rakesh Jayal, Senior Vice President (Corporate Affairs), LML Ltd

For Marley Simpson to become a mass producer is fraught with grave danger. The only option before the firm is to remain in the niche segment.

It is also evident that Marley Simpson has, knowingly or unknowingly, been pursuing this path so far. This is borne out by its last two launches, which were essentially upgrades of the old models with changes in gearbox, engine and suspension, as also by its yet-to-be-launched models.

The company, however, should not pin all its hopes on its new introductions or its proposed launches. It is time for the management to re-think the mid- and long-term strategy, which should ideally be as follows :

• To remain in the niche segment even while building on the brand's core values.

• To bring about a change in its image, shedding its image of a 50-year-old motorcycle company. It should instead project itself as a modern company that has the capacity to market contemporary niche or lifestyle products.

• To recognise that technology, as much as anything, can be outsourced. For the medium term, Marley Simpson could work, on the present powertrain platform or on a new one, with leading global design houses to bring about a refreshing change to its existing cruiser bikes. It could also offer them in various engine displacements, to be able to widen its consumer base. It should also simultaneously work to offer a variety of new products in the lifestyle segment, including naked, chopper, off-road, and sports bikes.

Having outlined the broad shape of a strategy, Marley Simpson should expand the lifestyle segment by taking advantage of the segmentation currently taking place in the market, which would also bring it the necessary volumes. Today, mass-market manufacturers, on account of the clutter in the entry-level segment, are busy launching products in the niche segment. This indicates a trend towards greater segmentation in the Indian market. This is good news. Nobody is better placed than Marley Simpson to wholly appropriate the niche segment as its own.

The strategy for Marley, therefore, should be to position itself in the prospect's mind as a lifestyle biking leader. Marley should also launch a variety of models in the various subsections of the lifestyle segment on a common powertrain platform. This would provide the benefit of low investment as a result of common parts usage, while giving it the advantage of a wider range of models on offer.

Marley should remain focused on product development in close coordination with the best design house in the world and on marketing. To sharpen its image, Marley should start taking part in motor races, by developing racing teams. This is another way it can kindle enthusiasm for performance biking in the Indian market. Only after it establishes itself in India can it look upon exports.