A PROJECT REPORT ON

STUDYING THE SATISFACTION LEVEL OF DEALERS

A PROJECT REPORT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATIONOF Maharshi Dayanand University INDIA

SUBMITTED BY:IRFAN KHAN

MBA-IV REGN. NO. 09-JNDE-2414

GUIDE:Mr. G.D Kapoor

PRESIDENTMARKETING DEPARTMENT, HERO CYCLE LTD.

NEEV EDUCATION PVT. LTD.AFFILIATED TO MAHARSHI DAYANAND UNIVERSITY

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INDEX Page no. Executive Summary

4 Research Methodology

6 Primary Objectives

7 Hypothesis

7 Research Design

8 Sample Design

8 Scope of the Study

11 Limitations

11 Critical Review of Literature

12 Industry Profile

14 Swot Analysis of Bicycle Industry

20 Company Profile

21 Swot Analysis of Hero Cycles ltd.

42 Data

43

2

Collection 43

Primary Data 43

Secondary Data 43

Findings & Analysis 44

Conclusions 68

Recommendations 70

Bibliography 71

Annexure 73

Case Study 79Synopsis of the project 86

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EXECUTIVE SUMMARY

Hero Cycles is a product of the philosophy that instills commitment, team work and foresight. Hero’s journey started before independence. The four Munjal brothers, hailing from a small town called Kamalia, now in Pakistan, are the men who are behind the mission. Brotherhood apart, what knit the men together was the wealth of will, integrity, ambition & determination. In the year 1944, they decided to start a business of bicycle spare parts in Amritsar. It is modest beginning and the next 3 years saw the business grow rapidly. But the dark clouds of partition eclipsed their plans of the future. With renewed vigor and optimism, the operational base was shifted to

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Ludhiana. By 1956, the brothers had began manufacturing key components of bicycles and as a logical way forward, began to assemble the entire cycle at their manufacturing plant in Ludhiana. In the early days, the plant had a capacity for 25 cycles per day. Over the next few years, the Bicycle Unit started growing in stature and size, attracting skilled engineers, technocrats, administrators and entrepreneurs. From a modest beginning of mere 639 bicycles in the year 1956, Hero Cycles products over 18500 cycles a day today, the highest in global reckoning. With the 48% share of the Indian market, this volume has catapulted Hero in the ‘Guinness Books of World Records’ in 1986 and edge over global players is being maintained since then.

A tiny acorn has now become a mighty Oak. From cycle to two - wheelers were a natural step, and the Hero Group came into being. The Hero Group, today, is a vast conglomerate of companies, either in the form of collaborations, joint ventures or fully owned subsidiaries, with more than Rs. 10000 Crore turnover annually. Hero Group, besides being the world’s largest manufacturers of bicycles, motorcycles and chains to this date, has diversified into newer segments like Information Technology, IT Enabled Services and Financial Services.

The project which I had undertaken is on the topic ‘Satisfaction Level of Bicycle Dealers’. It is a research based projects in which I have to get the Questionnaires filled by 60 Dealers and I have found that all the dealers were co-operative. This project was based on four objectives which are mentioned further in the report. The survey was conducted in six cities i.e. Ludhiana, Jalandhar, Phagwara, Moga, Jagraon and Chandigarh.I have personally visited all the dealers and ask them the questions.

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Through survey I found that all the dealers were satisfied with Hero Cycles Ltd. in all the aspects whether relating to its price, Quality or any other facilities which the company is providing them. Even Hero is most responsive to their complaints. According to dealers, customers also prefer Hero Cycles only as it provides many new models of cycles. So overall in my survey I found that Hero is the company which satisfies its dealers the most.

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RESEARCHMETHODOLOGY

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RESEARCH METHODOLOGY

The research methodology enumerates the description of the sampling plan, research instruments used for collection of data, presenting of questionnaire and use of statistical tools and techniques for analysis of the collected data.

OBJECTIVES

To study the scope of improvement of relationship of dealers with the company.

To study different factors affecting the satisfaction level of the dealers.

To study what facilities dealers want from a company.

To study if the dealers are satisfied with the services provided by the company.

Hypothesis

For getting hypothesis, I have used Chi –Square Test for which:

Ho: The null hypothesis which I have taken is that there exists no significance difference between the preference of dealers and various brands of cycles.

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In the result I found that calculated value i.e. 29.92 is more than the Table value i.e 15.5.Therefore, the null hypothesis is rejected.There exists a difference between the preferance of dealers and various brands of cycles.

Research design

A research design is the framework or plan, which guides the collection of the data and analysis of the data. The purpose of the research design is to ensure that the data collected is accurate and relevant. Any research work requires clarity of objectives and a set pattern, so that the objectives can be achieved efficiently. Here a study on satisfaction level of bicycle dealers is done. So the research design is so chosen that the analysis is accurate.

Sampling plan

The cities mainly Ludhiana, Chandigarh, Jalandhar,Phagwara, Jagraon and Moga were taken for the purpose of the study.

Sampling Unit

Dealers of bicycles were taken as the sampling unit.

Sampling Size

In all 70 dealers of bicycles of 6 cities were studied. But owing to certain constraints like non-response the sample size was reduced to 60 dealers only.

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Sampling procedure

Non probability convenience sampling method was used for the purpose of study.

Data collection methodThe study included collection of the data through primary and secondary sources. Secondary data was collected through various books and some sites also. Primary data was collected through personal interviews by using questionnaires.

Research instrumentsA structured and undisguised questionnaire was prepared for the purpose of collecting the primary data. The questionnaire included closed ended type of questions, which were aimed at knowing instant and unbiased response of the respondents.

Data analysis and interpretationThe statistical tool to analyze and interpret the collected data was mainly PERCENTAGES. For analyzing the questions involved ranking, weight age method was used to determine the relative importance of the various factors studied. The ranks were assigned weights and results were obtained firstly by multiplying the responses by weight.

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SCOPE OF THESTUDY

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Scope of the study

The study has been done in the cities of Ludhiana, Chandigarh, Jalandhar, Phagwara, Jagraon and Moga and was confined only to dealers of cycles.

Significance of the study

This study aims at providing suggestions to the manufactures of the bicycles. Hero cycles distribution channel has only one middlemen i.e. dealers, it is essential to maintain a close relationship with them and to ensure that they are satisfied as they are customers for the company. If the company has to do well in future they should know what the dealers want now and in future. My focus was on the various benefits that dealers expect from the company and also to find out what do the customers want.

Limitations of the study

Some of the phenomenal and unavoidable limitations which occurred during the study were:-

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1. Due to resource and constraints study was limited to 6 cities only.

2. Sample was chosen according to convenience and such sample might not be the representative of the universe.

3. Although care was taken, interviewer bias might have also affected the results to some extent.

4. According to the sample size, the findings might only be suggestive and not conclusive.

Critical Review Of Literature

www.herocycles.com http://www.ludhianaindustry.com/world_production_data.ht www.bike-eu.com/news/1785/ ludhiana - bicycle - industry www. atlascycles onepat.com www. avoncycles .com www. ti india.com/Div_ Cycles .html

Annual Report of hero’s cycles 2007-08

The first site which I have searched for is www.herocycles.com .This site was very useful for me as I have got large amount of information from this site mainly about the company profile. Then I have searched for another site i.e. Where I have got the Statistical Report of the company.Then I have searched for another site i.e. http://www.ludhianaindustry.com/world_production_data.htm Where I have got the information regarding the bicycle

Industry of India and also I got the world production data Of some major countries for bicycle industry.

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Another site which helped a lot to me i.e. www.bike-eu.com/news/1785/ ludhiana - bicycle - industry . Here I have got information about Ludhiana bicycleindustry As if we talk about bicycle industry its main hub in India is Ludhiana only. So this site gave me information about What’s the present scenario of Indian bicycle industry?

Other sites which searched for are:-www. atlascycles onepat.com , www. avoncycles .com , www. ti india.com/Div_ Cycles .html . Here I was able to get information about the other major players in bicycle industry that is about atlas, Avon, and Ti.These are some of the well known players in India.

I have also gone through the Annual Report of Hero Cycles 2007-08. From which I was able to get Knowledge about Companies application of funds, also about what kind of provident funds company is engaged with then I also got information about company’s contribution towards exchequer.

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Industry Profile

The bicycle, cycle, or bike is a pedal-driven, human-powered vehicle with two wheels attached to a frame, one behind the other.

Bicycles were introduced in the 19th century and now number about one billion worldwide.

With an annual turnover of more than 12 million bicycles, the bicycle industry is one of the most established industries in India. It has raised the country's position to that of the second largest bicycle manufacturer in the world, next only to China. India has seen a tremendous increase in the number of bicycle manufacturers and bicycle exporters in the recent past. Today, the Indian bicycle manufacturing and bicycle spares industry is well accepted and is also widely recognized for its quality standards in international markets.

Today the Indian roads can be seen packed with all kinds of luxury vehicles, but during the early years of Independence the scenario was not same. The bicycle, though not invented in India, became the most popular vehicle among Indians.

In 1960’s, 70’s, 80’s and 90’s, bicycle was used by large number of Indians. In fact, bicycle was available in almost every Indian family. The number of bicycles has now crossed one billion all over the world. From the far-flung areas, big and small towns to metros bicycle are still having its importance and used commonly in India.

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Though the most progressive phase started in 1950, when Mr. Janki Dass Kapur had established Atlas Cycles Industries Ltd.Then came Hero Cycles by Munjal Brothers, Avon by Shri Hans Raj Pahwa, RMI by Aggarwals and Goyals.

In India the cycle industry is mainly classified into two segments i.e. Standard and Fancy. The standard segment, which constitutes about two-thirds of the market, has a growth rate of 2% to 3%. The opportunity before cycle makers, thus, will be in fancy bikes, which, according to Mr. Munjal, has grown by "a fabulous 15-18 per cent" across the various brands.

Major Players

There are four major players in Indian Bicycle Industry i.e:-

HeroAtlas

Avon

TI

All these companies are mainly concentrating in domestic market but now a days they are also exporting to other countries.

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Atlas

Late Janki Dass Kapur

A man had a dream. To provide quality bicycles to his countrymen at reasonable prices. The man was Late Janki Das Kapur. The dream: Atlas Cycle Industries Ltd.

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A modest beginning in an improvised shed at Sonepat. This was transformed into a 25 acre factory complex in a record period of 12 months.

In the very first year of operation 12000 Atlas Cycles rolled out of the plant. Soon, the first consignment of Atlas Cycles was sent overseas. Atlas has since then exported to over 35 countries.

TI Bicycle Industries Ltd

One of the leading bicycle manufacturers in India, started in 1949, has been at the forefront of innovations and is a pioneer in the market of cycles. TI cycles are the makers of country’s most famous brands like Hercules, BSA and Philips cycles. The company’s vision is to be a worldwide leader in cycling and cycling solutions by “instilling the pride of ownership in the customers”. 

Avon

Avon cycle industries Ltd. was established in 1952 by Pahwa Brothers. In Bicycles and Bicycle Parts, the company distinguishes itself as the Largest Manufacturer Exporter from India. That it has enjoyed this

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status now for several years in a row, speaks of the popularity of its brands overseas. Currently the company is engaged in development of a range of e-bikes and e-scooters. Entry level model AVON e-bike is already in the market.

Production of bicycles in India

In Million Units

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Production of cycles in different countries for 10 years

In Million Units

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

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China 31.9 36.8 40.3 41.0 42.0 43.0 38.0 30.0 23.1 42.7 52.2

France

1.5 1.2 1.0 1.0 1.3 1.3 1.3 1.3 1.6 1.8 1.9

Germany

3.9 4.9 4.6 4.1 3.5 3.2 2.9 2.8 3.2 3.2 3.2

India 8.4 8.8 9.0 9.9 10.5 11.5 11.3 11.0 10.5 11.0 11.0

Indonesia

2.0 2.0 2.2 2.5 2.8 3.0 2.3 3.0 2.8 2.6 N/A

Italy 3.5 3.6 4.1 5.2 5.8 5.3 4.0 4.0 3.0 3.3 3.2

Japan 8.0 7.5 7.3 6.9 6.7 6.6 6.1 6.0 5.9 5.6 4.7

Korea 1.5 1.5 1.3 1.1 1.2 N/A 0.9 0.8 0.6 0.6 N/A

Malaysia

0.3 0.4 0.6 0.7 0.8 0.8 0.5 0.8 0.7 0.8 N/A

Taiwan

6.8 7.7 7.5 7.9 9.2 9.7 7.4 11.9 10.1 8.3 7.5

Thailand

0.7 0.8 1.0 1.0 1.1 1.8 1.5 1.8 1.6 1.5 N/A

Unite1.3 1.2 1.2 1.1 1.2 1.2 1.2 1.3 1.2 1.3 1.2

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d Kingd

om

United

States

5.6 7.6 8.9 7.7 7.3 8.8 8.0 6.0 2.5 1.7 1.1

N/A Indicates Not Available

Bicycle vs. car production

As recently as 1965, world production of cars and bikes was essentially the same, with each at nearly 20 million, but as of 2003 bike production had climbed to over 100 million per year compared with 42 million cars. Bicycle production was 105 million units globally in 2004, a 1.5% increase over 2003 (World Watch Institute).

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SWOT Analysis Of Bicycle Industries

Strengths:-

The capital input was increased generally to strengthen the technical transformation of enterprises.i.e. Technological Upgradiation.Quality Upgradiation

Companies are setting up their own Research & Development.

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Intensive production bases were built up by strong players' alliance.

Weaknesses:-

Not able to attract large number of customers.In today’s fast moving world, People are interested in other vehicles like cars, etc.

Opportunity:-

In India Department of Industrial Policy and Promotion is responsible for formulation and implementation of promotional and developmental measures for growth of Bicycle industrial sector.Companies are entering into Joint Ventures with other Foreign Companies.

Threats:-

Steel Prices are increasing day by day.Less safety as in India we don’t have separate Bicycles Lanes.

Duty draw back schemes

Cheap Chinese cycles are coming in India.

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COMPANY PROFILE

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Men of Steel

The success of the Hero Group lies in the determination and foresight of the Munjal brothers, who shared their vision with their workers and led the Group to a position where its name has become synonymous with top-quality two wheelers.

The flame kindled by the Munjal brothers in 1956 with the flagship company Hero Cycles; Mr. Satyanand Munjal, Mr. Brijmohan Lall Munjal and Mr. O. P. Munjal continue to carry the torch and are actively involved in the day-to-day operations of the Hero Group.

The saga is being continued with the same zeal by the second and third generations of the family and by the large working force of the Hero Group. The spirit of enterprise which dominates the progress of the Group is characteristic of the land where it all began - the City of Ludhiana, in Punjab - home to some of India’s finest workers and entrepreneurs.

The Hero Group is a thriving example of three generations of a family working and striving together to ensure quality, satisfaction and extensive growth.

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Milestones

Hero's success saga contains an element of spirit and enterprise; of achievement through grit and determination, coupled with vision and meticulous planning.

1956 Hero Cycles Limited is established.

1961 Rockman Cycles Industries Limited established which the largest manufacturer of bicycle chains and hubs is today.

1963 It pioneered bicycle exports from India - a foray into the international market.

1971 Highway Cycles was set up to meet the demands of Hero Cycles. It is today the largest manufacturer of single speed and multi-speed freewheels.

1984 Hero Honda Motors Limited established in joint venture with Honda Motors of Japan, to manufacture motorcycles.

1985 The 100 cc Hero Honda Motorcycle arrived and by 1988 was the No. 1 among all motorcycles in India.

1986 Hero Cycles Limited entered the Guinness Book

of Records as the largest bicycle manufacturer in the World.

1987 Hero Motors, a division of Majestic Auto Limited set up in collaboration with Steyr Daimler Puch of Austria.

1991 Hero Honda receives National Productivity

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Council's Award.

1992 Munjal Showa Limited receives National Safety Award.

2000-2001 Hero Honda emerges as the market leader in motorcycles with sales of over a million motorcycles and a strong market share of 47%.

2002 Easy Bill Established to offer utility bill collection & retail services.

2003 Tie up with Livebridge Inc., USA.

2004 Tie up with Bombardier - Rotax GmbH for scooter engines.

2004 Tie up with Aprilia Scooters, Italy.

2004 Hero Honda continues as the World's largest manufacturer of two-wheelers with annual sales volume of 2.07 million motorcycles and a market share of 48%.

2004Retail Insurance business established.

2005Heroite strengthens its relationship with ACS, USA, USD 5.0 billion market cap and Fortune 500 company.

2006 Hero Honda enters the scooter segment, launches 100cc "Pleasure"

2006 Hero Honda crosses a unit sales threshold of 3.0 million motorcycles

2006Hero Group celebrates Golden Jubilee year since inception. It was commemorated by sales of over 15 million motorcycles & over 100 million bicycles.

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Today, Hero Group comprises of 20 companies, 300 ancillary suppliers, deep market penetration with over 5,000 outlets, 23,000 + employee and has a turnover of US$ 3.20 billion (FY 2006).

ACHIEVEMENTS

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Hero Group ranks amongst the Top 10 Indian Business Houses comprising 20 companies, with an estimated turnover of US$ 3.2 billion during the fiscal year 2005-2006.Hero Group Management style has been acclaimed internationally by World Bank and BBC, UK.Hero Group is discussed as a case study at London Business School, UK and INSEAD, France. World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study.

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Group Chairman, Mr. Brijmohan Lall Munjal received the coveted "Ernst & Young Entrepreneur of the Year" award for 2001.

Hero Honda Motors was ranked 3rd amongst top Indian companies Review 2000 - Asia's leading companies award (2004) by Far Eastern Economic Review.

Hero Honda Motors has been awarded the highest rating for Corporate Governance (2003) by CRISIL - India's Leading Ratings, Risk & Advisory Company and as the Best Governed Company in private sector(Dec 2004).

Hero Honda ranked Number One in the two-wheeler category on Environmental Performance by the Centre for Science Environment.

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Hero Cycles Limited is a Guinness Book Record holder since 1986 as the world's largest manufacturer of bicycles, with annual sales volume of 5 million bicycles in FY 2006.

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession.

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The Driving Force

Dr.Brijmohan Lall Munjal

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Chairman

Dr.Brijmohan Lall Munjal, patriarch of the US$ 3.19 billion Hero Group was born in 1923, in what is now Pakistan. After partition, the

Munjal brothers started a small business of manufacturing bicycle components in Ludhiana in North India in the face of the bottlenecks of

industrial infrastructure and investments. Dr Lall led a small time manufacturer of 60 cycles a day to become a manufacturing giant,

which churns out not only over 17,000 cycles per day but is also diversified into various domains. Undoubtedly, Dr.Lall is a first

generation business entrepreneur of the 1950s'.

Dr.Lall has received various accolades and awards for his immense contribution to the Indian industry. He was adjudged Businessman of the Year in 1994 by a leading business magazine - Business India.

In 1995, Dr.Lall received the National Award for outstanding contribution to the Development of Indian Small Scale Industry. (NSIC award - presented by the President of India)

In 1999, the Business Baron recognized him as the "Most Admired CEO."

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The PHD Chamber of Commerce and Industry presented him with the Distinguished Entrepreneurship Award in 1997, in recognition of his outstanding exemplary entrepreneurship.

Xavier Labors Relations Institute (XLRI), a premier institution has conferred on him the honor of Sir Jehangir Ghandy Medal for Industrial Peace in 2000.

Ernst and Young have recognized him as the "Entrepreneur of the year 2001."

All India Management Association conferred him with the Lifetime Achievement award for "Management"(2003)

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Growth Models

The Hero Group has done business differently right from the start and that is what has helped us to achieve break-through in the competitive two-wheeler market. The Hero Group through the Hero Cycles Division was the first to introduce the concept of just-in-time inventory. The Group boasts of superb operational efficiencies. Every assembly line worker operates two machines simultaneously to save time and improve productivity. The fact that most of the machines are either developed or fabricated in-house, has resulted in low inventory levels.

Ancillarisation:

An integral part of the Group strategy of doing business differently was providing support to ancillary units. There are over 300 ancillary units today, whose production is dedicated to Hero's requirements and also a large number of other vendors, which include some of the better known companies in the automotive segment.

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Employee Policy

Another Striking feature within the Hero Group is the commitment and dedication of its workers. There is no organized labour union and family members of employees find ready employment within Hero. The philosophy with regard to labour management is "Hero is growing, grow with Hero."

Dealer Network:

The relationship of the Munjals with their dealers is unique in its closeness. The dealers are considered a part of the Hero family. A nation-wide dealer network comprising of over 5,000 outlets, the Munjals have a formidable distribution system in place. Sales agents from Hero travels to all the corners of the country, visiting dealers and send back daily postcards with information on the stock position that day, turnover, fresh purchases, anticipated demand and also competitor action in the region. The manufacturing units have a separate department to handle dealer complaints and problems and the first response is always given in 24 hours.

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Financial Planning:

The Hero Group benefits from the Group Chairman's financial acumen and his grasp on technology, manufacturing and marketing. Group Company, Hero Cycles Limited has one of the highest labour productivity rates in the world. In Hero Honda Motors Limited, the focus is on financial and raw material management and a low employee turnover.

Consolidated Family Business:

The Hero Group is a strong family run business - there is no other Group that has so successfully managed to stay together for nearly 50 years. The system is to bring in any new family member, coming of age, within the fold of the existing business or set him up in a new business. The third generation is already actively involved in existing as well as the new initiatives within the Group. The Group's future is being consolidated with the same zeal by the second and the third generations of the family, aided by workers who typify the hardy spirit of the Punjab.

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Diversification: Throughout the years of mammoth growth, the Group Chairman, Mr. Lall has actively looked at diversification. Then there were the expansion into the automotive segment with the setting up of Majestic Auto Limited, where the first indigenously designed moped, Hero Majestic, went into commercial production in 1978. Then came Hero Motors which introduced Hero Puch, in collaboration with global technology leader Steyr Daimler Puch of Austria. Hero Honda Motors was established in 1984 to manufacture 1000 cc motorcycles.

In Conclusion:

The Hero Group's phenomenal growth is the result of constant innovations, a close watch on costs and the dynamic leadership of the Group Chairman, characterized by an ethos of entrepreneurship, of right attitudes and building stronger relationships with investors, partners, vendors and dealers and customers.

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Marketing Strategy

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A thorough understanding of the fast-changing consumer behavior, new market segments and product opportunities along with sensitivity to changing customer needs, form the core of Hero's marketing strategy and philosophy.

At Hero we essentially have a completely customer-driven approach. A nation-wide dealer network comprising of over 3,500 bicycle dealers, 350 dealers for mopeds and 225 franchise holders for motorcycles, ensures convenient access to the Group's products across the country.

Conventionally, very few Indian bicycle manufacturers were interested in exports. However, the Hero Group's foray into the overseas markets pioneered Indian exports in the bicycle segment as early as 1963. It was a move prompted primarily by the need to be attuned to the global marketplace.

While initial exports were restricted to Africa and the Middle East, today more than 50 percent of the Group's bicycle exports meet the

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demands of sophisticated markets in Europe and America. This is primarily because of appropriate product development and excellent quality that Hero offers.

Alliances

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Over the years, Hero Group has strengthened its joint ventures, forged profitable relationships with its partners and allied itself with some of the best players in the market. Technology assimilation through wide sourcing has been and will continue to be an integral part of the progression of the Hero Group.

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Technology Related

Partnerships/ Alliances & Joint

Ventures

IT Related Alliances

Product Engineering

Related Alliances

Honda Motor Company of Japan

Showa Corporarion, Japan

Honda Foundry Company Limited, Japan

Fein Tools, Switzerland

Gujarat Industrial Investment Corporation

Wean United, USA

Kawasaki Steel Corporation, Japan

National Bicycle, Japan

Aprilia, Italy

Microsoft, Singapore

DynEd International

ACS, USA

PTC

Porsche Design

Target Design

Universal Cycles Plc, UK

EralMetall, Germany

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PRODUCTS

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Mountain/ATB

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HERO BUZZ NUAGE

HERO DEVIL DX

HERO DEVIL DX MULTISPEED

HERO NITROGEN

HERO RANGER BUZZ

HERO RANGER MAX

HERO RANGER MAX NUAGE

HERO SIREN 48

Racer

HERO HAWK NUAGE

HERO HAWK

HERO THUNDER

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City Bike

HERO NEON

HERO SLR GOLD

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Children

CHILDREN KID

CHILDREN KID DX

CHILDREN ACTIVE

CHILDREN BANDIT

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Roadsters

HERO JET

HERO CHAMPION

HERO ROYAL

HERO ROYAL CROWN

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Ladies

HERO QUEEN

HERO PRINCESS

HERO STAR GIRL

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HERO GROUPFINANCIALS

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Hero Group: Growth In Revenue

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Hero Group: Growth in Net Profits

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SWOT Analysis of Hero Cycles

Strengths:-Upgrading Technology both in Domestic and Exports.Increasing Reputation in industry.Its Fancy segment shows significant growth due to intensive in-house Research & Introduction of new models.Having alliances with many of the foreign companies.

Weaknesses:-People prefer for other vehicles instead of cycles.

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Mainly focusing in Fancy segment instead of Standard.

Opportunity:-Government is also helping in promoting their business as its R& D center is being recognized by government giving them a competitive edge.

Threats:-Increase in steel prices.Avon is coming up with many new offers.Atlas is dominating in Standard segment.

Data

Data which I have collected is both Primary and Secondary data.

Primary Data For collection of Primary Data a Questionnaire was being designed keeping in mind the research project.Questionaire method was chosen as it is able to give dependable and reliable results.

The questionnaire was a structured one and was non-disguised, so making it easy to administer and relatively inexpensive to analyze.

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The method adopted for communication was personal approach, because it gave me in depth into the dealer’s views and also helps me to extract other information in informal way. It also enabled me to get a questionnaire stamped as to give proof to my visit to a dealer.

The sample size The sample size that was of 70 Dealers covering cities: Ludhiana, Jalandhar, Phagwara, Moga, Jagraon and Chandigarh.Owing to non-response sample size were reduced to 60 Dealers.

Secondary Data The Secondary Data was collected from various sites mainly of the Hero Groups only also I have got large amount of help from the Annual Report of 2007-08 of the company.

Sourceswww.herocycles.comhttp://www.ludhianaindustry.com/world_production_data.htmwww.bike-eu.com/news/1785/ ludhiana - bicycle - industry www. atlascycles onepat.com www. avoncycles .com www. ti india.com/Div_ Cycles .html

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Findings and Analysis

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Q1) - Which all cycle companies you are dealing with?

Table1

ATLAS 71AVON 81HERO 100TI 25OTHERS 46

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AnalysisAll the 60 dealers are dealing with Hero cycles, 49 with Avon, only 15 with TI & 28 dealers were selling other brands like Neelam, S.K, & many other.

Q2)-For how long you are into this business?

Table 2

Years Percentage0-5 YRS 9%5-10 YRS 0%10-15 YRS 5%15 & ABOVE 86%

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AnalysisMostly dealers i.e. 86% dealers are into the cycle business for more than 15 years & only 9 % are from 0-5 years.

Q3)-What is your sales per month (in units)?

TABLE 3

Sales per month(units)

Atlas Avon Hero TI Others

0-100 27 20 15 9 16101-200 5 4 32 5 0201-300 2 3 4 1 3

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301-400 2 4 5 1 4

AnalysisThrough survey, I found that dealers are selling large number of Hero Cycles followed by Avon, Atlas and least are of TI.

Q4)-What is your sales per month in percentage?

Table4

Wholesale 30%Retail 70%

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AnalysisIt has been seen that most of the dealers are engaged in Retail only.

Q5)-What percentage of bicycle category you are able to sell?

Table 5.1

Standard bicycles

Atlas Avon Hero TI Others0-20 0 1 19 6 121-40 2 2 7 0 1

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41-60 5 9 8 1 161-80 5 9 3 1 581-100 21 14 5 3 13

Table5.2

Fancy bicycles

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AnalysisThrough survey it was found that Hero is the major player in Fancy Bicycles, while Atlas dominates the market in standard bicycle. If we talk about Avon, TI, Others; for them dealers have mixed views.

Q6) - Rank the following factor which your customer consider while buying a bicycle?

Table 6

FEATURES WEIGHTED SCORE RANK

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PRICE 235 2QUALITY 269 1 GUARANTEE 207 5LOOKS 221 3BRAND IMAGE 217 4 AFTER SALES SERVICES 97 6

AnalysisFrom table we can see that customer mainly consider Quality while buying a bicycle after that comes other factors like Price, Looks while After Sales Services is the least preferred factor.

Q7)-Rank the following categories of customers who come to your showrooms?

Table 7

Customers Weighted Score RankStudent 213 1

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Kids 162 2Businessmen 93 4Workers 142 3

AnalysisThrough survey I found that Students are the main customers, after that comes Kids.

Q8)-Which of the following factors influence you the most?

Table 8

Family Suggestions 9Friends Suggestions 10

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Advertisements 29Your Recommendations 21Brouchers 0Others 12

AnalysisThrough survey I found that Advertisements are the most important factor which influences its customers to purchase bicycles, while not at all affects the customers. In other factor which mainly influences the customers Rising petrol prices, etc.

Q9)-Which media influences customer while buying bicycles?

Table 9

Media Weighted Scores RankTelevision 296 1

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Magazine 188 3Newspaper 244 2Radio 154 4Internet 81 5

AnalysisAccording to dealers, Television is the most influencing media as today large number of people watch T.V; this is the only entertainment and through this we came to know about new models of cycles while the least influencing media is Internet.

Q10)-Which promotional tools help you in increasing your sales?

Table 10

Free Gifts 21Extended Guarantee 17Price Offs 16

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Heavy Advertisements 4Others 4

Analysis According to dealers, free gifts attract their customers, after that comes extended guarantees.

Q11)-Rank the price range which you sells the most:-

Table 11

Price Weighted Scores RankRs 1000-Rs 1500 71 4Rs 1600-Rs 2000 148 2

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Rs2100-Rs 2500 244 1Rs2600& Above 143 3

AnalysisRs 2100- Rs 2500 is the price range which dealers sells the most. According to the them today most of the cycles come in this range only.

Q12)-Which features are preferred by customer?

Table 12

Features Weighted Scores RankDesign 251 1Colour 226 2

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Graphics 157 3Shape 129 4Size 89 5

AnalysisCustomers mainly prefer Design & Colour while size is the least important factor for them.

Q13)-Do you think location of your showroom will help in selling a bicycle?

Table 13

Yes 86%

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No 14%

Analysis 86% Dealers says that yes location of the showroom helps in selling their bicycles, while only 14% are against it; according to them it’s the goodwill of the company which helps them in selling their bicycles.

Q14)-After placement of order in how many days you receive your supply?

Table14

Days Atlas Avon Heros TI Others0-2 10 3 17 7 12

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3-5 9 15 21 7 86-8 16 14 12 2 49-11 7 7 5 2 3

AnalysisIn this case,Heros dominates the market, as they make delivery immediately on receiving the order after that comes Avon, Atlas ,TI them Others.

Q15)-Which companies offer better benefits to dealers?

Table 15

Atlas 18Avon 25Heros 56

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TI 5Others 15

Analysis Here I found that according to dealers companies are not offering the much benefits, though Hero offers them large number of benefits like credit purchases, etc as out of 60 dealers 56 are in favour of Hero.

Q16)-Which companies are most responsive to their complaints?

Table 16

Atlas 5Avon 9Heros 54

77

TI 4Others 11

AnalysisHere also Hero is the only company which is most responsive to the complaints of dealers. While dealers were totally dissatisfied with Atlas as they were not at all making replacements, they didn’t bother to listens the complaints of their customer’s i.e. the cycle dealers.

Q17)-Are you satisfied with performance of field executives coming to your showrooms?

Table 17

YES NOAtlas 37 6

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Avon 47 2Heros 59 1TI 14 1Others 26 2

AnalysisHere almost all the dealers were satisfied with the performance of Hero’s Field Executives except one. But with Atlas they have complaints that field executives didn’t turn up even for 3-4 months.

Q18)-How often Field Executive visits your showroom?

Table 18

Days Atlas Avon Hero TI OthersOnce in a month

20 31 25 5 20

2-3 days 6 12 29 10 6

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4 days &above

1 2 2 2 2

AnalysisField Executives of Hero and Avon are quite efficient and regular, while that of atlas are least responsible, owner of the company himself doesn’t listens to dealers.

Q19)-What factors you consider while buying a bicycles from companies?

Table 19

Price 11Timely Supply 15Brand Image 30Credit Facilities 15

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Variety 20Cash Discounts 5

AnalysisMost of the dealers goes for particular brand of a company as according to them customer also prefer name of the brand only. After that dealers goes for variety as customers wants something unique in bicycles.

Q20)-Which companies comes with more of promotional campaigns?

Table 20

Atlas 3 Avon 13Hero 60TI 12Others 4

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Analysis According to dealers, Today Hero is coming with large number of promotional campaigns. Hero is putting a lot of emphasis on Advertisements and Promotions, so that people should come to know about its new models.

Q21)-How do you perceive you relations with the companies in past, present and future?

Table 21

Improving Deteriorating Not ChangedAtlas 21 3 19Avon 33 0 16Hero 39 0 21

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TI 5 0 10Others 19 0 9

AnalysisDealers view their relationship with the companies as of improving nature. Hero has formed a very good relationship as they immediately make the delivery of orders, quicker to response for complaints.

Conclusions

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Conclusions

After the analysis of study, following conclusions can be made:

Most of the respondents sell Fancy cycles of Hero.

Mostly customers consider quality while purchasing a cycle.

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Advertisements and dealers recommendations Friends/Relative suggestions for bicycles have an impact on decision making of the customers.

Television is the most common means of communication which affects the choice of customers.

Extended warranty and free gifts acts as a major promotional tool which helps in increasing sales of dealers.Rs 2100-Rs 2500 is the price range which dealers sells the most.

According to dealers, Hero is the company which is most responsive to their complaints.

Brand image and variety were considered to be the most important factors in bicycles by respondents.

According to dealers Hero is coming with large number of new models.

Dealers view their relationship with the companies as of improving nature.

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RECOMENDATIONS

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Recommendations

Hero should try to increase its sales of standard cycles as Atlas is dominating the market in this category.

Promotional schemes should be mainly centered around free gifts as market mainly favors these schemes.

Hero should try to give more advertisement in newspapers also, as this is the second most important media to which customers are exposed to.

Hero should offer more varieties of bicycles as dealers mainly look after these factors while buying a bicycle.

Hero should open an exclusive Hero’s Showroom, so that customers can get knowledge about Hero’s upcoming models.

Dealers should be provided with certain incentives for increasing the sales of hero cycles, this would increase the satisfaction level of dealers.

All the companies have same policies regarding benefits so Hero should come with some unique benefits.

Introduce more promotional schemes and should offer more free offers to attract the dealers.

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BIBLIOGRAPHY

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BIBLIOGRAPHY

www.herocycles.com http://www.ludhianaindustry.com/world_production_data.htm www.bike-eu.com/news/1785/ ludhiana - bicycle - industry www. atlascycles onepat.com www. avoncycles .com www. ti india.com/Div_ Cycles .html

Annual Report 2007-08 of Hero Cycles Ltd.

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Annexure

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STUDYING THE SATISFACTION LEVEL OF DEALERS

DEAR RESPONDENT,This survey is being conducted as a part of a research project. You are required to answer all the questions which are as follows:-

Name …………………………Age ………………………...Address ………………………..

Q1)-Which all cycle companies you are dealing with?

a) Atlas b) Avonc) Herosd) TIe) Others

Q2)-For how long you are into this business?

a) 0 years-5 yearsb) 5 years-10 yearsc) 10 years-15 yearsd) 15 years and above

Q3)-What is your sales per month (in units)?

Sales per month(units)

Atlas Avon Hero TI Others

0-100101-200201-300

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301-400

Q4)-What is your total sales in percentage?

a) Wholesale %b) Retail %

Q5)-What percentage of bicycle category you are able to sell? Standard bicycles

Atlas Avon Hero TI Others0-2021-4041-6061-8081-100

Fancy BicyclesAtlas Avon Hero TI Others

0-2021-4041-6061-8081-100

Q6)-Rank the following factors from 1-6 which your customer consider while buying a bicycle?

a) Priceb) Qualityc) Guaranteed) Looks e) Brand Imagef) After sales services

Q7) - Rank the following category of customers from 1-4 who comes to your Showroom?

a) Students

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b) Kidsc) Businessmend) Workers

Q8)-Which of the following factors influences your customer to buy a bicycle?

a) Family Suggestionsb) Friends Suggestions c) Advertisementsd) Your Recommendatione) Brouchersf) Others

Q9)-Which media influences your customer most while buying a bicycle? Rank them from 1-5

a) Televisionb) Magazinec) Newspaperd) Radioe) Internet

Q10)-Which promotional tools you think helps in increasing sales?

a) Free accessories/giftsb) Extended guarantee/warranteesc) Price offsd) Heavy advertisementse) Others

Q11)-Rank the following price range from 1-4 which you sells maximum:-

a) Rs1000-Rs1500b) Rs1600-Rs2000c) Rs2100-Rs 2500d) Rs2600 & above

Q12)-Which features are most preferred by customers rank them accordingly?

a) Designb) Colourc) Graphicsd) Shapee) Size

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Q13)-Do you think the location of your showrooms will helps in selling bicycle?

a) Yes b) No

Q14)-After placement of order you receive your supply after how many days? a)-Atlas

b)-Avonc)-Herosd)-TIe)-Others

Q15)-Which companies offer you a better package of benefits in relation to credit purchases, discounts, etc?

a)-Atlasb)-Avonc)-Herosd)-TIe)-Others

Q16)-Which of the following companies are more responsive to your complaints?

a)-Atlas b)-Avon c)-Heros d)-TI e)-Others

Q17)-Are you satisfied with the performance of the field executives coming to your showrooms? YES NO a)-Atlas

b)-Avon c)-Heros d)-TI e)-Others

Q18)-How often field executives visit your showrooms?

Atlas Avon Heroes TI OthersOnce in a month2-3 days in a month

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4 days or more

Q19)-What factors you consider while buying bicycles from the companies?

a) Priceb) Timely Supplyc) Brand Imaged) Credit facilitiese) Varietyf) Cash discounts

Q20)-Which companies comes with more of promotional campaigns? a)-Atlas b)-Avon c)-Heros d)-TI e)-Others

Q21)-How do you perceive your relations with the following companies in the past, present and future?

Improving Deteriorating Not changed

AtlasAvonHeroesTIOthers

~~THANK YOU ~~

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CASE STUDY

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HERO CYCLES LTD.

“We look over our shoulders, we see the past. We use it to make a better present and a beautiful tomorrow, as tomorrow isn’t just another day; it’s another chance for us to better ourselves and to excel.”

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Hero Cycles is a product of this philosophy. The philosophy that instills commitment, team work and foresight. Hero’s colossal journey started before independence. The four Munjal brothers, hailing from a small town called Kamalia, now in Pakistan, are the men who are behind the mission. Brotherhood apart, what knit the men together was the wealth of will, integrity, ambition & determination. In the year 1944, they decided to start a business of bicycle spare parts in Amritsar. Its is modest beginning and the next 3 years saw the business grow rapidly. But the dark clouds of partition eclipsed their plans of the future. With renewed vigor and optimism, the operational base was shifted to Ludhiana. By 1956, the brothers had began manufacturing key components of bicycles and as a logical way forward, began to assemble the entire cycle at their manufacturing plant in Ludhiana. In the early days, the plant had a capacity for 25 cycles per day. Over the next few years, the Bicycle Unit started growing in stature and size, attracting skilled engineers, technocrats, administrators and entrepreneurs. From a modest beginning of mere 639 bicycles in the year 1956.The Company extended its wings to establish its second unit in 1988 at Sahibabad in Uttar Pradesh. Today the combined production of both the units, at Ludhiana and Sahibabad is more than 12,500 bicycles, the highest in global reckoning.

The Hero Cycles wide product range caters to the entire spectrum of buyers and includes roadsters, racers and the latest all-terrain and city bicycles. The massive Hero Cycles plant at Ludhiana also houses the centralized rim-making facility for the entire range of Hero two-wheelers. Besides manufacturing all major components, it has in-house facilities for making pedals, handlebars, chain wheels, brakes and saddles.

In 2001, Hero Cycles launched twelve new products, including Hero Devil Dx, Hero Neon, Ranger Swing 21, Hero Buzz, Hero Missile, Hero

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Boss, Hero Terminator, Hero Salsa, Hero Limbo, Hero Lambada, Hero Jet and the Power bike. The Ranger Swing 21 is India's most advanced performance MTB, offering a 21-speed variant. Hero Buzz is India's first Y-frame bike.

Hero Cycles pioneered bicycle exports from India as early as 1963 and today exports bicycles and components to Europe, USA, Africa and the Middle East. While initial exports were restricted to Africa and the Middle East, today more than 50 percent of the bicycle exports meet the demands of markets in Europe and the US.

Hero Cycles Limited has been continuously upgrading technology and has even set up special units - like Gujarat Cycles Limited (now known as Munjal Auto Industries Limited), as a completed Export Oriented Unit (EOU), to meet international quality standards and demands

To keep pace with technological development in the field of Systems and MIS, the company has implemented ERP by tying up with SAP and Siemens Information Systems Limited.

A tiny acorn has now become a mighty Oak. From cycle to two - wheeler was a natural step, and the Hero Group came into being. The Hero Group, today, is a vast conglomerate of companies, either in the form of collaborations, joint ventures or fully owned subsidiaries, with more than Rs. 10000 Crore turnover annually. Hero Group, besides being the world’s largest manufacturers of bicycles, motorcycles and chains to this date, has diversified into newer segments like Information Technology, IT Enabled Services and Financial Services.

Hero is such a company, which since its establishment have never faced any kind of problem. If any problem had exists it was just a minor problem and that also company have solved in a smooth manner. Hero is a company which take care of its employees, dealers, customers.

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Here people at the senior level are very co-operative. And if employees have any problem, they can approach their senior any time and get it solved.

Nearly about ten years ago Company realized that a stagnation had came in the growth of Hero cycles. They were earning profit, but it was not increasing. When the company realized it they decided to innovate new models. The main step which company undertook was that of Segmentation. They started manufacturing cycles for different segments which were Kids Segment, Ladies Segment, and Mens Segment. They further subdivided the Ladies Segment into two sub segments. The first one were for the School and College going girls who mainly goes after the attractive looks of the cycles; they mainly like the Fancy cycles which should have nice baskets , colours; which means they were mainly interested in the Looks of the cycle but not so considered about how it works.

While the other sub segment was mainly considered about the Self Employed women (Lower Middle Class); who were mainly working in Factories and other alike places. They prefer the cycle which should work in a smooth manner, which they can easily drive on a rough terrain also; as they have to go through many different places. And they require cycle not just to show off but to go on work.

They like the cycle whose tyre should be rugged one. So for this segment Hero cycles came up with new model i.e. The Empress, which ad brought large amount of profits to the company, as it have break the stagnation which had came in hero cycles market. The company had manufactures this model by keeping in mind The Roadsters Model .So the workability of the model was that of Roadsters which was having rugged tyres so that it could move on rough terrain also. But as this model was for the Female Segment, so the company didn’t overlook the

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looks of the cycles, they give it a nice colour, design; as female also goes for looks. In this way the company which was undergoing the period of stagnation, came out of that period and started earning more of profits.

SYNOPSIS

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Synopsis

“ Studying The Satisfaction Level Of Dealers”

Ritika NayyarMr. G.D. Kapoor (President of Marketing Department)Dr.Rajendra Gratia

As my project is a research project in which I have to study the satisfaction level of bicycle dealers. For which I was required to visit dealers of 6 different cities and get my questionnaires filled by them. Before making a questionnaire I have made some objectives; first, is to assess the relationship of dealers with the company whether it’s improving, deteriorating or same as earlier. Second is that if they are not satisfied; whether there is any scope of improvement or not. Third is how we can improve their relationship with the company and last is what kind of facilities they want from the company. The findings which I got are being interpreted from the data which I received from dealers. For every question, I have made graphs & analysis is also being provided.

In my project I have found that all the dealers were satisfied with the Hero Cycles Ltd.The company is able to maintain good relations with the dealers. A Hero cycle is ahead of its competitors it is at the no. 1 position in India and no. 2 in the world after China. Hero is most responsive to the complaints of its dealers.

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Perception about my Industry Guide

My industry Guide is Mr. G.D Kapoor who is the president of the Marketing Department in the Hero Cycles Ltd. I have found him a very responsible person who knows what to do at what time. On the very first day he briefed me about the company. He is a very helpful man as whenever I was having any problem I approach him any time without any hesistation.He treat his employees in a very kind manner; a very calm person who does all his work in a very smooth manner.

Apart from my project he also taught me other things which are very essential for becoming a successful manager. In just a span of 7 years he had become President of a company from General Manager; this shows how hard working he is.

I m very thankful to him for every knowledge he have given me.

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