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MARKETING STRATEGY OF HERO MOTOCORP LTD.
HERO MOTOCORP LTD.
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[ P i c k t h e d a t e ]
Abhinav Jain
CERTIFICATE FROM INSTITUTE
This is to certify that as per best of my belief the project entitled“MARKETINGSTRATEGIES OF HERO MOTO CORP.” is the bonfire research work carried our by….under the guidance of… , in partial fulfilment of the requirements for the summer training project of the Degree of Bachelor of Business Administration
He / She have worked under my guidance.…..............................
Name:….(Lecturer)Project Guide (Internal)
Date:
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PREFACE
If we want to go global in the world market then we must know the trend of the market, what features must be there in the product so that it should get popularity among the masses and also should know about competitor’s position in every field. The objective of survey is to know the strategy of Hero Moto Corp in the world m a r k e t a n d w e m u s t k n o w w h a t s h o u l d b e t h e p r i c e r a n g e a n d w h a t t y p e s o f marketing should be done so that it gets familiar with every type of person. So needs and objectives of the market survey is very important to get a good market share ,stand in the market and to survive the business in the present competitive world where there is a trend of cutthroat competition .Hero Moto Corp is a leading company in bikes sector.
Knowing the comparative position of a brand vis-à-vis its competitor’s is an essential thing as well as product is essential for deciding appropriate marketing strategies for any company.
ACKNOWLEDGMENT2
At the very onset, I would sincerely like to thank of building up our confidence, which let to the fulfilment of our project. The completion of this project is due to the help of few individuals whom I cannot let go unhip nded . I wish to express our deep gratitude especially to our guide without whose guidance, support and encouragement. I would have not been able to complete this report that delves cursorily on the aspects of Marketing Strategy of Hero Moto Corp LtdIt is needless to say that any piece of creative work require the involvement of a number of individuals, since it is beyond the scope of limitation to enlist each and every individuals associated with this work who extended their co-operation in sharing unbiased views and feedback which helped to collect concrete data. Hence, I would express our sincere gratitude to all those who played contributory role directly or indirectly towards accomplishment of our project..
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EXECUTIVE SUMMARY
Hero Moto Corp the Pr inc ipal act iv i t ies of the Company is manufactur ing and marketing of motorcycles and spare parts. The Company is a joint venture between Hero Group, India. The Motorcycles of the Company features facilities such as four stroke technology, phenomenal fuel economy and low exhaust pollution levels. T h e t w o manufactur ing fac i l i t ies of the Company are located in Haryana. Motorcyc les accounted for 95% of fiscal 2009 gross revenues and spare parts, 5%. Grows over 500% in five years For 2010-11, volume up by 38 %; net profit soars by 88 per cent; total turnover up by 42 per cent Achieves a high 48 per cent motorcycle market share; and 33 per cent two-wheeler market share Announces 350 per cent final dividend and 250 per cent celebration dividend (over and above special interim dividend of 250%) Over the last five years, company's total turnover grows by whopping 580 %; PAT by 919 % New Delhi, April13, 2011: Hero Moto Corp Co.., the newly crowned Wor ld No.1 two wheeler companies, dec lared outstanding financial results for the year 2010-11. Profit after tax (PAT) is Rs. 462.93 crore, a growth of 88 per cent. The company's total turnover (sales plus other income, net of excise) grew to Rs. 4539.49 crore, a growth of 42 per cent. In a landmark run, the company achieved a 48 per cent market share in the motorcycle category during the ear; and 33 per cent of the total two –
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wheeler market. The company recorded accumulati- ve sale of over 14.25 laces motorcycles for the year 2010-11.The company's Spare Parts business also showed a remarkable increase of 39 %, tak ing the annual sa les to Rs. 209 crore.
Encouraged by the response the company has set a target of Rs. 250 crore for the current financial year. Hero Moto Corp's growth over the last five years has been truly outstanding, with both revenue and PAT showing significant jumps of over 5 times. While the revenue increased from Rs. 783 crore in 2008-09 to Rs. 4539 crore in 2010-11. PAT has increased from Rs. 50 crore in 2008-09 to Rs. 463 crore in 2010-11. The total sales has also increased from 2,68,931 motorcycles in 2010-11 to 14,25,302 motorcycles in2010-11, wi th volume market share jumping f rom 27 per cent to 48 per cent in motorcycles; and 9% to 33% in two-wheelers .
Mr. Brijmohan Lall, Chairman and Managing Director ,Hero Moto Corp., commending the company's achievement said ,"I thank all our stakeholders - our Hero Moto Corp family of employees, ancillaries, -vendors, dealers, other business associates, and most importantly, our customers .They have been instrumental in our achieving the World No.1 status. I would also like to make special mention of the excellent support provided all through by our joint venture partners Hero Moto Corp Company, and Hero Cycles Ltd. Our relationship with them has been wonderful
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and mutually satisfying. As we move forward, our collaborative approach will help us continue our lead."
On the momentous occasion , Mr. Pawan Munjal, Director and CEO, Hero Moto Corp. Said, "The key reason for our success has been our continuous pursuit of pro-actively delivering value and delight to our customers. This is evident from the pioneering initiatives we undertook during 2011 - like the full two-year warranty on all Hero Moto Corp models, and the launch of the most comprehensive Customer Relationship Programme, 'The Hero Moto Corp Passport Programme'. Further, despite strong competition and pressures on the economy as a whole, the company has improved operating profits significantly, mainly because of cost rationalization, strong working capital management and manufacturing efficiencies. "He added, "We are committed to continue our lead, by delivering even better value to the customers, in the year ahead. Accordingly, several new and exciting product launches are lined up for 2008-09, and in the future. The manufacturing facilities to support the customer demand would also be pro-actively set up, as has been done till now." Especially present on the occasion was Mr. K Suzuki , Senior Managing Director, Hero Moto Corp Company, Japan, who had flown in only that morning to attend the Press Conference and the World No. 1 celebrations. Clearly ecstatic he said,
“I congratulate Hero Moto Corp for their wonderful and consistent achievements .
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Last year they achieved the distinction of being No. 1 Joint Venture of Hero Moto Corp Company worldwide; and this year achieved the unique status of World No. 1 two wheeler companies. Our relationship has always been strong and solid. We are proud of this achievement for the Hero Group, Hero Moto Corp Company, and the Indo-Japanese co-operation. We would continue to provide all the necessary support to Hero Moto Corp, for it to remain on the top".
INTRODUCTION7
The Indian Two Wheeler Industry
The Indian two wheeler sector contr ibutes the largest vo lumes amongst a l l the segments in automobile Industry. Though the segment can be broadly categorized into 3-sub segments viz; scooters, motorcycles and mopeds; some categories introduced in the market are a combination of two or more segment e.g. scooter and stepthru ’s. The market prima- rily comprises five players in the two wheeler segment with most of the companies having foreign collaborations with well-known Japanese firms earlier. But with most of the companies now planning 100% subsidiaries in India. In the process of the share of motor cycle segment has grown from 48% to 58%, the share of scooters declined drastically from 33% to 25%, while that of mopeds declined by 2% from19% to 17% during the year 2009-10. Hero, a name synonymous with two wheelers in India, began its journey around four decades ago. Starting as a manufacturer of by cycle components, hero has today grown into a multiunit, multi-product, geograp- hically diversified group of companies .The hero group began with simple Philosophy: to provide excellent transportation to the common man, at a price he could easily afford. Even today the dream providing the total satisfaction is all its sphere of activity. To consumers , in excellent products at a n a f f o r d a b l e p r i c e ; a
t h o r o u g h u n d e r s t a n d i n g t h e f a s t C h a n g i n g c o n s u m e r understanding the fast changing
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consumer behaviour, new market segment and opportunities, and marketing mix sensitive changing customer needs from the core of Hero’s marketing strategy and philosophy.
Hero Moto Corp. is one of the leading companies in the two wheeler Industry. At present, it is segment with around 47% the market share during financial year 2000-01.The company has emerged one of the most of successful players, much ahead of it compete- tors by it superior and reliable product quality comple- mented with excellent marketing techniques.
Hero Moto Corp has been an early entrant in the 4-stroke segment of the two wheeler industry. With a right mix of product styling and pricing the company has graped the4-stoke market as compared to Bajaj Auto and TVS.TVS Motors Ltd has been the largest manufacturer of mopeds which are prevalent as a low cost transportations and provide a tremendous potential is all parts of India. However the company is likely to face threat Bajaj Auto Ltd (BAL) which continued its price based competitions and Hero Moto Corp cycle and Scooter Ltd. a new entrants in the 2 wheeler market .Infact the company has achieved excelled the Industry growth rates by a huge margin .
From Apr i l to December 2008 whi le the motor cyc le industry sa les were upto38.68% TVS motor’s sales surged by a whopping 73.6% sat more importantly it is the success of its model Victor.
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Baja Auto has continued with its impressive performance witnessing significantgrowth is the motor cycle and three wheeler segments. Based on the performance fill data one can expect the company to meet it excellence by FY09.
Hero Moto Corp is the largest p layer is the motorcyc le segment. Focused on contemporary design and style, the company has a compare leusine ranges bikes viz;
CD-100 DX
CD-100 SS
Splendor
Street Smart Steek
CBZ
Passion
It splendor model is an urban centric with its fuel efficiency which accounts to over 60-70% of its sales. The passion launched in mid Jan. 2001 has a resending success contributing to 26% of its sales.
TVS offers a wide ranges of two-wheelers motorcycles-Victor/Fiero/Max100/max100R/Max DL
.Scooterette- TVS scooty
Moped- chap/XL/XL super/XL supper HD/sports.
TVS plans to launch 4 new models in the coming 15 months.
A 4-stroke version of India’s best selling scooterttes; TVS-scooty and 4-
stroke version of the existingmoped line will be launched this year.2
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Bajaj Auto Ltd: Offer product a service to the customers so as to satisfy their needs .It’s having 4-stroke single cylinder natural air cool the displacement of engine is111.6 CC having the engine power it 7-7 bhp at 7000 spm. The bike is having a hydrometric disc brake in front wheel. “Flash” is an added future in the bike.
In 1993 BAL manufactured 12 different model 5-5 scooter model, 3-motorcyclemodel, moped model, 3-three wheeler model.
But in the recent year Bajaj developed various model in the motorcycle segment which providing good riding conditions is urban road as well as ratter roads.
Scooter-cub/super/super FE/chetak/stride/Msl Priya.
Moped- Bajaj Sunny.
Motorcyc le- M- 80/kawasaki RTZ/Kawasaki45 by 1993 and latest model are. Eliminator/Pulsor –180/Pulsor 150/Boxer/Caliber Crowa/Caliber Sales performance of the player: Hero Moto Corp repeated a y-o-y growth of 6.3% is its motorcycle sales for the month of Jan 2006 at 1,45,708 units. Export during the month
have surged almost64% y-o-y. On a month –on-month basis the sales growth has been even higher up16.5%.
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Bajaj Auto: Bajaj auto has reported y-o-y growth of 19.8% in motorcycle sales for Jan2006 at 75059 uni ts .
On a month-on month bas is the growth is 8 .8%. Export performance continues to be impressive with 10,089 two and three wheelers exported in Jan 2006, a growth of 98.6% y-o-y. Two wheeler sales for the current year are up 6.8%. The growth is driven sharply in the motor cycle sales upto 37% in two wheeler segment, the share of motor cycle has jumped from 52.8% to 67.8% during the current year. this sharp growth in the motor cycle can be attributed to the positive response received by its need products and the encouraging performance of select existing model.
India is the second largest manufacturer and producer of two wheelers in the world.
It stands next only to Japan and China in terms of the number of two-wheelers produced and domestic sales respectively. This distinction was achieved due to variety of reasons like restrictive policy followed by the Government of India towards the passenger car industry, rising demand for personal transport, inefficiency in the public transportation system etc .The Indian two-wheeler industry made a small beginning in the early 50s when Automobile Products of India (API) started manufacturing scooters in the country. Until
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1958, API and Enfield were the sole producers .In 1948, Bajaj Auto began trading in imported Vespa Scooters and three-wheelers. Finally, in 1960, it set up a shop to manufacture them in technical collaboration with Piaggio of Italy.
The agreement expired in 1971.
In the in i t ia l s tages, the scooter segment was dominated by API , i t was later overtaken by Bajaj Auto. Although various government and private enterprisesentered the fray for scooters, the only new player that has lasted till today is LML. Under the regulated regime, foreign companies were not allowed to operate in India. It was a complete seller market with the waiting period for getting a scooter from Bajaj Auto being as high as 12 years .The Motorcycles segment was no different, with only three manufacturers viz Enfield, ideal Jawa and Escorts. While Enfield bullet was a four stroke bike, Jawa and the Rajdoot were two-stroke bikes. The motorcycle segment was initially dominated by Enfield 350cc bikes and Escorts 175cc bike. The two wheeler market was opened to foreign competition in the mid-80s. And the then market leaders- Escorts and Enfield were caught unaware by theonslaught of the100cc bikes of the four Indo-Japanese joint ventures. With the availability of fuel efficient low power bikes, demand swelled, resulting in Hero Moto Corp then the only producer of four stroke bikes (100cc category), gaining a top slot. The first Japanese motorcycles were introduced in the early eighties. TVS Suzuki and Hero Moto Corp brought in the first two-stroke and four –stroke engine motorcycles respectively. These two players initially started with assembly of CKD kits, and later on progressed
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to indigenous manufactur ing . In the 90s the major growth for
COMPANY PROFILE
Fill it. Shut it. Forget it
What started out as a Joint Venture between Hero Group, the world's largest bicycle manufacturers and the Hero Moto Corp Company of Japan, is today the leading manufacturer of India's largest selling motorcycle. Coming into existence on January 19, 1984. Hero Moto Corp gave India nothing less than a revolution on two-wheels made even more famous by the 'Fill it - Shut it - Forget it' campaign. Driven by the trust of over 30 lakh customers, the
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Hero Moto Corp product range today commands as much as 47% making it a veritable giant in the industry. Add to that technological excellence, an expansive dealer network, and reliable after sales service, and you have one of the most customer-friendly companies .In fact , every second b ike so ld in India today is a Hero Moto Corp ! Customer satisfaction, a high quality product, the strength of Hero technology and the Hero group's dynamism have helped HML scale new frontiers and exceed limits .In the words of Mr. Brijmohan Lall Munjal, the Chairman and Managing Director ," W e w i l l c o n t i n u e t o m a k e e v e r y e f f o r t r e q u i r e d f o r t h e d e v e l o p m e n t o f t h e motorcycle industry, through new product development, technological innovation, and investment in equipment and fac i l i t ies and through and through ef f ic ient management."
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MILESTONE
KEY MILESTONES OF HERO MOTO CORP
Year Event 1983 Joint Collaboration Agreement with Honda Motor Co. Ltd.
1984Hero Honda Motors Ltd. incorporated
1985First motorcycle "CD 100" rolled out
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1987100,000th motorcycle produced
1989New motorcycle model - "Sleek" introduced
1991New motorcycle model - "CD 100 SS" introduced500,000th motorcycle produced
1992Raman Munjal Vidya Mandir inaugurated - A School in the memory of founder Managing Director, Mr. Raman Kant Munjal
1994New motorcycle model - "Splendor" introduced 1,000,000th motorcycle produced
1997New motorcycle model - "Street" introduced Hero Honda's 2nd manufacturing plant at Gurgaon inaugurated
19982,000,000th motorcycle produced
1999New motorcycle model - "CBZ" introduced Environment Management System of Dharuhera Plant certified with ISO-14001 by DNV HollandRaman Munjal Memorial Hospital inaugurated - A Hospital in the memory of founder Managing Director, Mr. Raman Kant Munjal
20004,000,000th motorcycle produced Environment Management System of Gurgaon Plant
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certified ISO-14001 by DNV Holland Splendor declared 'World No. 1' - largest selling single two-wheeler model "Hero Honda Passport Programme" - CRM Programme launched
2001New motorcycle model - "Passion" introducedOne million production in one single yearNew motorcycle model - "Joy" introduced5,000,000th motorcycle produced
2002New motorcycle model - "Dawn" introducedNew motorcycle model - "Ambition" introducedAppointed Virender Sehwag, Mohammad Kaif, Yuvraj Singh, Harbhajan Singh and Zaheer Khan as Brand Ambassadors
2003Becomes the first Indian Company to cross the cumulative 7 million sales markSplendor has emerged as the World's largest selling model for the third calendar year in a row (2000, 2001, 2002)New motorcycle model - "CD Dawn" introducedNew motorcycle model - "Splendor +" introducedNew motorcycle model - "Passion Plus" introducedNew motorcycle model - "Karizma" introduced
2004New motorcycle model - "Ambition 135" introducedHero Honda became the World No. 1 Company for the
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third consecutive year.Crossed sales of over 2 million units in a single year, a global record.Splendor - World's largest selling motorcycle crossed the 5 million markNew motorcycle model - "CBZ*" introducedJoint Technical Agreement renewed Total sales crossed a record of 10 million motorcycles
2005Hero Honda is the World No. 1 for the 4th year in a rowNew motorcycle model - "Super Splendor" introducedNew motorcycle model - "CD Deluxe" introducedNew motorcycle model - "Glamour" introducedNew motorcycle model - "Achiever" introducedFirst Scooter model from Hero Honda - "Pleasure" introduced
2006Hero Honda is the World No. 1 for the 5th year in a row15 million production milestone achieved
2006Hero Honda is the World No. 1 for the 5th year in a row15 million production milestone achieved
2007Hero Honda is the World No. 1 for the 6th year in a rowNew 'Splendor NXG' launchedNew 'CD Deluxe' launchedNew 'Passion Plus' launchedNew motorcycle model 'Hunk' launched20 million production milestone achieved
2008Hero Honda Haridwar Plant inaugurationNew 'Pleasure' launchedSplendor NXG lauched with power start feature
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New motorcycle model 'Passion Pro' launchedNew 'CBZ Xtreme' launched25 million production milestone achievedCD Deluxe lauched with power start featureNew 'Glamour' launchedNew 'Glamour Fi' launched
2009Hero Honda GoodLife Program launched Hunk' (Limited Edition) launchedSplendor completed 11 million production landmarkNew motorcycle model 'Karizma - ZMR' launched Silver jubilee celebrations
2010New model Splendor Pro launchedLaunch of new Super Splendor and New Hunk
2011New licensing arrangement signed between Hero and Honda (Hero Honda is renamed as Hero)Launch of new refreshed versions of Glamour, Glamour Fi, CBZ Xtreme, KarizmaCrosses the landmark figure of 5 million cumulative sales in a single year
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KEY POLICIES
AN ENVIRONMENTALLY AND SOCIALLY, AWARE COMPANY
At Hero Moto Corp, our goal is not only to sell you a bike, but also to help you everystep of the way in making your world a better place to live in. Besides its will to provide a high-quality service to all of its customers, Hero Moto Corp takes a stand asa socially responsible enterprise respectful of its environment and respectful of theimportant issues.Hero Moto Corp has been strongly committed not only to environmental conservation programmes but also expresses the increasingly inseparable balance between theeconomic concerns and the environmental and social issues faced by a business. A business must not grow at the expense of mankind and man's future but rather mustserve mankind."we must do something for the community from whose land we generate our wealth."A famous quote from our worthy chairman mr.brijmohan lall munjal.
ENVIRONMENT POLICY
WE at Hero Moto Corp are committed to demonstrate excellence in our environmental performance on a continual basis, as an intrinsic element of our corporate philosophy.
TO ACHIEVE THIS WE COMMIT OURSELVES TO:21
Integrate environmental attributes and cleaner production in all our business processes and practices with specific consideration to substitution of hazardous chemicals, whereviable and strengthen the greening of supply chain.Continue product innovations to improve environmental compatibility.Comply with a l l appl icable environmental leg is lat ion and a lso contro l l ing our environmental discharges through the principles of "alara" (as low as reasonablyachievable). Institutionalise resource conservation, in particular, in the areas of oil, water, electricalenergy, paints and chemicals.Enhance environmental awareness of our employees and dealers / vendors, while promoting their involvement in ensuring sound environmental management.
QUALITY POLICY
Excel lence in qual i ty is the core value of Hero Moto Corp's phi losophy. We arecommitted at all levels to achieve high quality in whatever we do, particularly in our products and services which will meet and exceed customer's growing aspirationsthrough: Innovation in products, processes and services. Continuous improvement inour total quality management systems. Teamwork and responsibility.
MISSION STATEMENT IN PURSUIT OF EXCELLENCE
We, at Hero Moto Corp, are continuously striving for synergy between technology,systems, and human
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resources to provide products and services that meet the quality, performance, and price aspirations of our customers. While doing so, we maintain thehighest standards of ethics and societal responsibilities, constantly innovate productsand processes, and develop teams that keep the momentum going to take the companyto excellence in the new millennium".
WE CARE FOR ENVIRONMENT
A philosophy closest to Hero Moto Corp is that which pertains to the environment,which is why the company goes that extra step to ensure that each one of the hightechnology 4-stroke Hero Moto Corp motorcycles meet the most demanding of pollution norms at every level. This is a policy that the company has followed sincethe very beginning.
WE CARE FOR COMMUNITY
Hero Moto Corp is a company with a d i f ference. Constant ly involved in soc ia lactivities, spreading. Awareness about the community and environment, the companyh a s t a k e n a g i a n t s t e p i n t h e f i e l d s o f H e a l t h c a r e ; E d u c a t i o n ; E n g i n e e r i n g ; Environment and many more
INTERNATIONAL MARKETING
Based on our own brand of globalization, they have built our distribution network over 60 countries worldwide and multiplied our exports from
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5 percent of total turnover in Fiscal 2007-08 to over 15 percent in Fiscal 2010-11.
Motorcycles form the major chunk of the sales revenue of Hero Moto Corp. A small proportion of the revenue comes from the sales of spares. The proportion of salesrevenue coming from each of these two segments in the FY10 is depicted in the graph below:
MAIN OBJECTIVE OF COMPANY
Through the company has wide list goals to be achieved but the major objective of thecompany has to achieve areas follows:-
To provide right product to right people at right time.
P r i c e s h o u l d b e r e a s o n a b l e ; b y t h i s e v e r y l e v e l o f p e r s o n c a n a f f o r d t h e product
To maximize the share holder’s value by customer value enhancement
Changes should be according to prospective customer
To provide delivery of standard product.
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To provide value for money to there consumers.
COMPETITORS OF HERO MOTO CORP
BAJAJ
The Bajaj Group came into existence during the turmoil and the heady euphoria of India 's f reedom struggle. Jamnala l Baja j , founder of the Baja j Group, was aconfidante and disciple of Mahatma Gandhi, and was deeply involved in the effort for freedom. The integrity, dedication, resourcefulness and determination to succeedwhi
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ch are characteristic of the Company today, are often traced back to its birthduring those long days of relentless devotion to a common cause.Kamalnayan, the eldest son of Jamnalal Bajaj, succeeded his father in 1942, at the ageof twenty-seven. Putting the Nation before business, he devoted himself to the latter only after India achieved independence in 1947. But when he did so, he put his heartand soul into it. Within a short while, he not only consolidated the Group, but alsodiversified into various manufacturing activities, elevating the Group to the status itenjoys till this dayRahul Bajaj today heads the Group. He has been the Chief Executive Officer of Bajajsince 1968 and is recognized as one of the most outstanding business leaders in India.As dynamic and ambitious as his illustrious predecessors, he has been recognized for his achievements at various national and international forums. Bajaj is currentlyIndia's largest two and three-wheeler manufacturer and one of the biggest in theworld. Bajaj has long left behind its annual turnover of Rs.72 million (1968), tocurrently register an impressive figure of Rs.42.16 billion (US$ 936 million).
TVs- Ltd:
They have a vision of being a highly profitable and socially responsible, leadingmanufacturer of high value, environmentally friendly, lifetime personal transportation products for customers in global markets
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and to provide fulfillment and prosperity for employees, dealers and vendors
Suzuki
TVS Suzuki broke out of the bottoming formation with a rise in volume and wentinto a major uptrend. The stock is well above its rising 30 WMA and its earlier intermediate bottoms, and hence, the major trend of the stock is up. The relativestrength line for the stock has moved past its zero line, indicating that the stock isoutperforming the indices. Investors ust hold on to the long positions in the stock while more long positions in the stock must be added after the next intermediatecorrection.The intermediate trend of the stock is still up and investors will have to wait for somemore time before the stock actually goes into an intermediate downtrend. Keep a closewatch at the stock and investors holding the stock must continue to do so. Tradingvolumes are less, and hence, investors must pick small quantities.
LML
LML is also in a major uptrend like the other stocks in this sector, as the stock moved past its earlier intermediate top and its 30 WMA in the current intermediate rise. Thestock is still in an intermediate uptrend and is currently moving sideways. It coulddrop into an intermediate downtrend on a close
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below 19. The breakout by the stock was not accompanied by a rise in volume and this is not a very bullish sign. Thus,investors must look at other stocks in this sector which are also in a major uptrendand are more stronger. The relative strength line has moved above its zero line andcould fall back if the stock goes into an intermediate downtrend. Investors mustalways pick up the strongest stocks in the strong sector, and hence, must avoid thisstock, even though it is in a major uptrend.
KINETIC MOTORS
Kinetic Engineering Ltd., founded in the year 1970, is the leading manufacturer andexporter of 2-wheelers. Born of the vision of the late Shri H. K. Firodia, KineticEngineering Ltd., it has produced useful, heart - winning products for over twodecades. KEL manufactures a wide range of Mopeds, Scooters and Motorcycles thatare very popular in the country and are well recognized for their fuel economy,quality and reliability.KEL has 3 manufacturing plants at Ahmednagar Pitampur (Indore) an Goregaon(Pune) with the capacity to manufacture 4 lakh vehicles per year. Their well endowedtechnologically advanced manufacturing set up have enabled them to reach highquality standards. The company also exports these vehicles to countries like USA,Canada, Sweden, Latin America, Denmark and the Middle EastAn agreement has recently been reached between Yamaha Motor Co., Ltd. (YMC)and its joint venture partner in India, Escorts Limited (Chairman and ManagingDirector:
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Mr. Rajan Nanda. Location: Faridabad, suburbs of New Delhi) under whichYMC will acquire all of the 26% of the stock presently held by Escorts Limited in the two companies 'motorcycle manufacturing and marketing joint venture, Yamaha Motor Escorts Ltd. (YMEL).The aims of this move to make Yamaha Motor Escorts a 100% YMC subsidiary are to increase the overall speed of managerial and business decisions, to improve product development capabilities and production efficiency, while also strengthening the marketing organization. Plans call for the change in the company's name and other procedures to be completed by the end of June. Ever since the establishment of the first technical assistance agreement between thet w o c o m p a n i e s i n 1 9 8 5 , Y M C a n d E s c o r t s L i m i t e d h a v e b u i l t a c o o p e r a t i v e relationship dedicated to the manufacture and sales of Yamaha brand motorcycles in an environment of growing motorcycle demand in the Indian market. In November of 1995, the two companies established the joint venture company Escorts Yamaha Motor Limited, based on a 50-50 capital investment. In June of 2005, that investment ratio was changed to 74% for YMC and 26% for Escorts Limited and YMC assumed managerial control of the company with the name being changed to YMEL and undertook numerous measures to build the company's motorcycle manufacturing and marketing operations. In addition to YMC acquiring Escorts' 26% of YMEL stock, the company's name will be changed to Yamaha Motor India Private Limited (YMI) and concerted efforts will be made to heighten its competitiveness in the Indian market and promote the spread of the
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Yamaha brand with target themes of developing products with greater appeal and a distribution network that can respond more quickly to user needs.Furthermore, YMC wi l l work to develop YMI as an exporter of bus iness type motorcycles to neighboring countries and other markets such as Africa and Latin America, and also as a production base that can assume a variety of roles in Yamaha's global manufacturing network. Presently, India's annual motorcycle demand has grown to exceed 3.8 million units, which makes i t the second largest market in the wor ld , wi th steady growth is anticipated for the future. Now that YMI has become a 100% YMC subsidiary, the introduction of several new models is planned, and it is our goal to increase annual production to 350,000 units in the fiscal year 2005 and to 550,000 units by the fiscal year 2010 .
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SWOT ANALYSIS
STRENGTH WEAKNESS
OPPORTUNITY THREAT
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STREANTH
• Huge brand equity/reputation among customers.
• Models/products• Healthy growth in profits• Brilliant relations with
customers and dealers.• Strong Research &
Development.• Good advertising and
excellent rebranding from Hero Honda to Hero Moto Corp
WEAKNESS
• Absence in the premium bike segment
• High imports for its spare parts i.e. over 30% imports
• Exports has never grown beyond 4%
• Most of the products have similar features and low on design and innovation
OPPORTUNITY
• Two-wheeler segment is one of the most growing industries
• Export of bikes is limited i.e. untapped international markets32
• can still make it up by launching a strong model in 150cc segment
HHML.
THREAT • Exports market is yet to be properly exploited.
• Cruiser bike segment is unexplored by HHML..
• Variants can be launched to increase the market share.
• Hero Honda is the most reliable bike manufacturer in India strong brandfollower.
• Strong competition from Indian as well as international brands
DATA PRESENTATION33
Marketing Strategy
A thorough understanding of the fast changing Marketing Strategy, 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 h a v e a c o m p l e t e l y c u s t o m e r -d r i v e n a p p r o a c h .
A n a t i o n w i d e d e a l e r n e t w o r k comprising of over 3,500 bicycle dealers, 350 dealers for mopeds and 225 franchiseholders for motorcycles, ensures convenient access to the Group's products across the country.
With a deep sense of belonging to the Hero fraternity, the Group's dealer network hascatalyzed growth and acted as a strong bridge between the customers and the Group.
Conventionally,very few Indian bicycle manufacturers were interested in exports.
However, the Hero Group's foray into the overseas markets pioneered Indian exports inthe 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 demands of sophisticated markets inEurope and
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America. This is primarily because of appropriate product development andexcellent quality that Hero offers.The Group has undertaken a steady up gradation of technologies and there has beendiversifications and setting up of newer establishments to meet stringent internationals t a n d a r d s . A t t h e c o r e o f i t a l l i s a c u s t o m e r c e n t r i c s c h e m e o f p o l i c i e s a n d production ... and the bottom line is to "Add Value while Engineering Satisfaction."
PARTNERSHIPS, ALLIANCES AND JOINT VENTURES
• Hero's quest for a low-budget, fuel-efficient and environment-friendly two-wheeler led Hero Moto Corp to enter into a Technical Collaboration with Steyr Daimler Punch of Austria in 1987 for the manufacture of the 65cc, Porsche-design mini-motorcycles.
• Munjal Showa Limited was formed in Technical and Financial Collaboration withShowa Corporation, Japan, to design, develop and manufacture of front forks,shock absorbers, struts and gas struts.
• Sunbeam Auto Limited has set-up a state of the art piston manufacturing facilityin technical collaboration with M/S Hero Foundry Company Limited of Japan, the pioneers in the world for manufacturing high-strength lightweight pistons used inlight, powerful fuel-efficient engines Munjal Auto Industries Limited has a jointventure with the State-owned Gujarat
35
Industrial Investment Corporation, to cater to the needs of the overseas market.
• Hero Cycles CR Division was set up in consultation with MECON, Asia's largestengineering consultants and in Technical Collaboration with Wean United, USA.
• Hero Cycles Cold Rolling Division has also entered into a technical collaborationwith Kawasaki Steel Corporation, Japan for the improvement of production yield, e l iminat ion of defects ,
reduct ion of customer returns and enhancement of maintenance operations against certain predetermined targets.
QUALITY
Quality at Hero is attained not just by modern plants and equipment and through latesttechnology, but by enforcing a strict discipline. At the Group factories, attainingquality standards is an everyday practice - a strictly pursued discipline. It comes froman amalgamation of the latest technology with deep-rooted experience derived fromnearly four decades of hard labor.It is an attitude that masters the challenge of growth and change - change in consumers' perceptions about products and new aspirations arising from a new generation of buyers. Conformance to quality at Hero begins on the shop floor. Every worker ensuresat each stage of manufacturing that any of the faulty products are not allowed to gothrough further manufacturing and distribution cycles.Today qual i ty is ensured f rom steel process ing to the f in ished product . Eachcomponent goes t
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hrough numerous tests at the stages of des ign, raw mater ia l procurement and, of course, during the manufacturing process.C o n s t a n t t e c h n o l o g y u p g r a d a t i o n e n s u r e s t h a t t h e G r o u p s t a y s i n t h e g l o b a l mainstream and maintains its competitive edge. With each of its foreign collaborations, the Group goes onto strengthen its quality measures as per the book. The Group alsoemploys the services of independent experts from around the world to assist in newdesign and production processes. Nevertheless, in this race to acquire the most modern techniques and technologies andto collaborate with the most advanced players in the market, the core competence continues to be derived from the Group's philosophy - "To Engineer Satisfaction."
RESEARCH METHODOLOGY
DATA COLLECTION SOURCES:
According to chosen project I decided to find out the raw information and data collection regarding the topic for that most of the time I decided with HERO MOTO CORP city owner as well as thank for the technology that really is curious and helping out in finding of raw information which I listed to web sites of HERO MOTO CORP.
DATA COLLECTION TOOLS:
There are two sources for the data collection, primary and secondary sources.
PRIMARY SOURCES:
As per my requirement to know about brand loyalty of HERO MOTO CORP brands.
I have been conducting open ended questions and close ended questions , those will allow us to understand and making bright picture of brand loyalty .
SECONDARY SOURCES:
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Secondary research includes information from magazines, internet, encyclopedia, books, newspapers, articles, etc. I have conducted secondary research from internet, magazines, newspapers, etc.
MARKETING MIX Product mix Price mix Place mix Promotion mix
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Product Mix
Quality Service Design Brand
NameFeature
sWarrentie
sProduct Variety
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Price Mix
List Price Discount Allowance Payment Period Credit
Place Mix
Channels Coverage Transportation Assortment Inventory
MARKETING MIX: -
Standardised Marketing Mix:
An international marketing strategy for using basically the same product, advertising,distribution channels & other elements of the marketing mix in all the countries of company’s international market.
Adapted Marketing Mix:
An international marketing strategy for adjusting the marketing mix elements to eachinternational target
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Promotion Mix
Sales Promotion Advertisment Public
RelationDirect
Marketing
market, bearing more costs but hoping for a larger market share &return.
International Scenario :
A two-wheeler is used as a personal/family vehicle or a goods carrier in the envelopingcountries, whereas it is confined to sports/racing (heavy motorcycles) or short istanceshopping (mopeds) in developed countries.The world twowheeler market is dominated by Japan. Japanese manufacturers account for around 65% of the total two-wheeler production in the world. However, production within Japan has been declining due to lower domestic demand and shiftin manufacturing base outside the country. Japan is also the world's largest exporter of two-wheelers in the world controlling around 75% of the world trade. Its major markets are China, USA and Europe. In terms of player positions, Hero Moto CorpCorporation, Yamaha Motors and Suzuki Motors Corporation share the top three slotsin the world two-wheeler market. The table below shows the production and salesfigures of motorcycles and scooters in Japan during the past decade More than 50% of the production in Japan is exported out of the country. This scenario contrasts directly with the Indian scenario. In India, only about 15% of the production in FY11 were exported. The Asian continent is the largest user of two-wheelers in the world. This is due to poor road infrastructure and low per capita income, restrictive policy on car industry.The technology for two-wheelers is not as well developed as for car industry. This is due to o l igopoly between top f ive p layers in the
41
segment, compared to th i r tymanufacturers in the car industry.
EXPORTS
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PLACEMENT OF HERO MOTO CORP
Hero Moto Corp Limited sells the motorcycle through a widely spread all India networks of over 450 of dealers. The motorcycle can be serviced at the authorized dealers or SSP’s (Spare and Service points).In the year 1996, Hero Moto Corp was the first company to introduce India’s first chain of automated services workshops. To expand the service network further to smaller towns, thecompany has appointed Service extensions.Hero Moto Corp genuine spare parts are available from the dealers, SSP’s and the stockiest.The company provides good after sales service through its well-established dealer network.The company has a policy of three S, Single S for stockiest, Double S
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Hero cycles
Hero moto Corp
Hero Puch
HERO CORPORATE SERVICES (Herosoft, HeroMindmine, Hero serveITMunjal show a limited
for services and threeSSS for sales.The company is having about 460 of SSS, which deals in Sales, Service, and Stock, 260 of SS, which deals in Service and Stock and 12 of S, which exclusively deals in stocks.The Network As On 31st March 2002 Is As Under: Dealers (3s_-Sales, Service, Spares)-458, Ssp’s (2 S-Service And Spares)-256, Stockiest (Single S-Spares)-12The company has developed a unique distribution network, which has given it a distinctivecompetitive advantage. The whole idea behind establishing this vast distribution network isto reach the customer even in the remote areas.The company has segregated the areas as Urban, Rural, and semi rural and has appointeddealers in many of these areas, after seeing the potential. The company’s major thrust is theeasy availability of all the models in every part of the country.The company’s bikes are sold through the dealers and they are required to provide proper Infrastructure , Workshops, Facilities, and trained Personals. The dealers are given targets and they are required to sell sufficient number of vehicles to earn a return on investments.Regional offices are in constant touch with these dealers.Presently the company is having 8 regional offices in the country. The regional officesconstantly assist these offices as a kind of linkage between the company and the dealer andthe dealers. The sales and the marketing personals at the regional offices are trained andencourage maintaining a cordial relationship with various dealers on the basis of trust and understanding . The company’s service engineer and the other sales staff supervise all thefacilities at the dealer and the service outlet from planning the layout to the
44
errection of thespecially designed benches and the tools. Infact all the possible efforts are made by the company to make the dealers to become the part of the Hero family and its culture .The company has appointed fleet of more than 400 trucks from around 45 transporters toassist them in the delivery of vehicle. From the factory and within the factory premises, the company has a good fleet of trucks and trailers. The company to deliver the vehicle to the dealer’s showroom in the gactory fresh condition uses these trucks and trailers. The cargosare loaded in the trucks and the trailers and they are delivered at the stockyards of thedealers in whichever part of the country they may be located. So the company in this way delivers the motorbikes in the fresh factory conditions. By the time the bike reaches our dealers they might have done hardly a coupler of kilometers. The company believes themarketing efforts should go beyond ensuring product availability.The focus is therefore on a vast distribution network. In order to ensure the customers a better quality service at the various stations, the company mounts an effective training porograme in which all the mechanic, supervisory staff and the other senior staff personnel participate.The company is also planning to set up some of the fully equipped express authorizedhighway. In these h ighways, one would seea Hero Moto Corp dealer every 15-25KMS.This concept is thought by the company with a view to provide good after salesservices to the customer. This exercise will also check the company to check the use of spurious products, which ultimately spoil the bike.
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The highways to be covered in thisscheme are:
NEW DELHI-GWALIOR NEW DELHI-CHANDIGARH AMBALA-LUDHIANA KOLKATTA-DHANBAD
The company has a dream to increase this figure of 458 dealers to 650 by the end of 2003and increase the figure of 256 service stations to 350 by the end of the year 2003.Thecompany is going by an expansion process.The company is perhaps the second company after Maruti Udyog Limited to implement afactory fresh concept. The company is the only company in the two-wheeler segmenthaving so much of vast distribution network. Hero Moto Corp will be adding 25 moredealers and 50service stations to build a network of 575 dealership-cum-service points (including 400 dealerships) across the country.The level of investment in an automated Hero Moto Corp service station is expected to bearound Rs 10 lakh, apart from land and building. ``No dealer has any problem in expanding business,'' says Tapan, Marketing manager. ``We've tied up with Citibank and Centurion to provide bill discounting through our dealers.’ Consumer Finance: In order to focus onorganized consumer financing, Hero Moto Corp tied up with Tata Finance a week ago. Thisis Hero Moto Corp's second tie-up following Centurion, which is accounting for around3,000 bikes a month through 100 dealerships.A thorough understanding of the fast-changing consumer behaviour, new market segmentsand product opportunities along
46
with sensitivity to changing customer needs, form the coreof Hero's marketing strategy and philosophy. At Hero we essentially have a completelycustomer-driven approach. A nation-wide dealer network comprising of over 3,500 bicycle dealers , 350 dealers For mopeds and 225 f ranchise holders for motorcyc les, ensures convenient access to the Group's products across the country.With a deep sense of belonging to the Hero fraternity, the Group's dealer network hascatalysed growth and acted as a strong bridge between the customers and the Group .Convent ional ly , very few Ind ian b icyc le 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 market place.While initial exports were restricted to Africa and the Middle East, today more than 50 per cent of the Group's bicycle exports meet the demands of sophisticated markets in Europe and America. This is primarily because of appropriate product development and excellent quality that Hero offers. The Group has undertaken a steady up gradation of technologies and there has been diversifications and setting up of newer establishments to meet stringent international standards. At the core of it all is a customer-centric scheme of policies and production and the bottom line is to "Add Value while Engineering Satisfaction.
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PRODUCT STRATEGIES OF HERO MOTO CORP
Hero Hero shifted its focus from catering to the fuel efficient conscious consumer to tryand occupy other segments of the motorbike market and therefore the new product launches from Hero Moto Corp in the last three year have been in this direction. Thecompany has also upgraded some of its bikes to stay in contention and to meet Euroemission norms. The new underlining theme for the company “One for everyone” has ledto the launching of new products, which are as follows:
Street Smart:Hero Moto Corp introduced its Street Smart in 1997. The company whowere more inclined towards the scooters and who thought that the scooters were more safer than the motorcycles, thus Hero Moto Corp decided to launch the Street Smart. The bikewas built in such a way that it resembled more like a scooters, than a motorcycle, butactually it is a motorbike. I.e. it is a “hybrid”
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Product Description (HERO MOTO CORP Ltd.)
Hero Moto Corp has launched the following motorbikes in the Indian market.
HERO MOTO CORP CD 100
HERO MOTO CORP CD 100 SS
HERO SLEEK
HERO MOTO CORP Splendor
HERO MOTO CORP Street Smart
HERO MOTO CORP CBZ
HERO MOTO CORP Joy
HERO MOTO CORP Passion
HERO MOTO CORP Ambition
Hero Hero shifted its focus from catering to the fuel efficient consciousconsumer to try and occupy other segments of the motorbike market and therefore thenew product launches from Hero Moto Corp in the last three year have been in thisdirection. The company has also upgraded some of its bikes to stay in contention and to meet Euro emission norms. The new underlining theme for the company “One for e v e r y o n e ” h a s l e d t o t h e l a u n c h i n g o f n e w p r o d u c t s W i t h t h e l a u n c h o f n e w motorbi
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kes and various other motorbikes in the pipeline, Hero Moto Corp’s strategyis to get into these segments of the motorcycle market where they have not made inroads earlier.
PRICING STRATEGIES OF HERO MOTO CORP
The company has a policy to price its product very competitively. In today’s world,one cannot has a skimming pricing says Mr. Tapan, marketing manager, Hero MotoCorp. Necessarily the pricing policy is completely a blend of two strategies i.e.Penetration and Skimming. It has been the company’s policy to provide the customerswith value for money-give more for less. We are the only company in the two wheeler segment that is in the process of passing on the whole benefit of cost advantageachieved as a result of the increased localization levels of upto 60% to the customers.We are in the process of keeping our product increasing
50
popular and affordable. Thecompany keeps telling its customers to think about Quality rather than price. Further if one talks about the changes in the price in the last three years, the prices have never been changed except the budgets except once in APRIL 2011,when the companystarted off with their “celebration offer”, and thus decided to sanctioned a discountand curta i l on every Model Rs 1001\- . The company is sure ly in a bus iness of delivering quality rather than price. For instance the Boxer, which is of only 29,990and is the cheapest bike of the industry. The company gives importance to the qualityrather than cheap products.Well Hero Moto Corp has bikes at different price point but there is one commonthing that is they are priced at a premium of INR 2000- 3000 from the competitorsand it seems their strategy is working fine with the target customers as it is the largestseller of bikes in the Indian market with a market share of 48 % .Customers are redyto shell out the extra money because they believe and its fact that the fuel efficiencyof the bikes is much better than its competitors the different price points for HeroMotors Limited are :
NAME PRICEDawn 32,000Splendor 41,000Passion 44,000Cbz 52,000 – 60,000
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Thus we find that HML has bikes for every one for entry level customers they havedawn which is a no f r i l l at tached product whose emphasis is on mi leage with performance .And for customers who like to have bike which is good at performanceand with descent looks they have Splendor which is their fastest selling bike and account for hal f o f the tota l sa les .
Customers who are looking for sty le with performance can go for Passion which is a huge success among the urban class as it is priced little bit higher than splendor and the looks of the bike are astounding. For customers who want style and power they have CBZ which is targeted towards the premium segment and it was a runaway success initially but is not a hot seller nowdue to some problems. Hero Moto Corp is planning to introduce few more models inyears time in order to make their portfolio of products more versatile. They are tryingto introduce new models and they are trying to introduce models at the premiumsegment as it has high margins and the company feels that it’s the segment which iswill grow in the near future as the income of people will increase with the change of life styles .HML also intend to introduce few models which are economical in natureas they this segment provides the volumes to the company. Hero Moto Corp stillwants to charge a price of premium as its brand enjoys a high level of respectabilityand reliability
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among the target customers as their products have already proved their mettle in the market and enjoy high level of brand equity among the target customers.Hero Moto Corp has an advantage of large no of dealers and also economies of scalewhich help them to absorb the costs to a great extent.
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PROMOTIONAL STRATEGIES OF HERO MOTO CORP
Hero Moto Corp rides safe
Hero Moto Corp's `Ride Safe and Good Rider' campaign is aimed at communicatingthe philosophy of delivering safe products and promoting good driving for the overallsafety of the Hero Moto Corp customer. Created by McCann Erickson, the ad-- HeroMoto Corp cares for your safety--invited all Hero Moto Corp owners to attend theRide Safe programme on October 27, 2011 at Delhi's India Gate lawns. This was the first phase of the programme, where three instructors from Japan demonstrated techniques of right driving. In the second phase, Hero Moto Corp will communicatethe launch of the 4S concept (sales, service, spare parts and safety) at Hero Moto Corpdealerships. The focus of the third phase will be to promote the launch of the HeroMoto Corp Safety Riding Promotion School, which will have riding simulators andsafety riding tracksHero Hero will take the riding programme-- where trained personnel will give ridingtips to bike owners-- to over 100 dealerships across 90 towns.
P r o m o t i o n i n t h i s s e c t o r c a n n o t b e l i k e t h a t i n t h e F a s t M o v i n g A u t o p a t s (Automobile) sector. The promotions in this sector are like 0% finance schemes and other sort of things. The company takes the services of many good and
54
reputedadvertising agencies like Reddifuusion, Lintas, sachi & Sachi and others. The company has also signed a kind of agreement with two celebrities just now to betheir brand ambassadors. Hero Moto Corp, a leading manufacturer of motorcycles,has roped in film actor Hrithik Roshan and captain of Indian Cricket team SouravGanguly as its brand ambassadors for three years till 2003.They would endorse the company products, attend corporate and brand events andhelp promote its "we care" campaign comprising safety riding, environment, and friendliness.
Hrithik and Ganguly said they were glad to be associated with Hero Moto Corp. Herohas embarked upon an ambitious project to achieve sale of one million bikes this year with a market share of 47 per cent. The turnover would be in excess of Rs. 3000 crore.In October alone, 1,12,000 motorcycles have been sold, Compared to 66,063 units inthe corresponding period last year, the increase in sales is a phenomenal 69 per cent.Cumulative sales jumped up by 41.58 per cent to 5.72 lakhs units during April-October as against 4.04 lakh units in the same period last year.At Hero Moto Corp , our goal is not only to sell the customer a bike, but also to helphim at every step of the way in making the correct riding decisions. Assisting him inmaking the right judgments on the road, and helping him to choose the right helmetand other riding equipmentAnd as bike handling requires know-how, skill, and rigorous mental conditioning,
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wehave put together certain safety tips and suggestions that will enhance the ridingcomfort. Last but not the least, it is always important to remember - a good rider is asafe rider.Hero Moto Corp is enhancing the Advertising &Promotion budget by around 35 per cent f rom Rs 41 crore in 1999-2000.
Apart f rom concentrat ing on mainstreamSplendor-- the world's largest selling bike-- and upscale CBZ motorcycles, Hero MotoCorp has identified ``soft areas'' like services and spares parts for the purpose of intense communication. The creative account of Hero Moto Corp rest with big nameslike Hindustan Thompson Association, Lintas, Sachi and Sachi and so on. Hero MotoCorp is also planning a major campaign to re-launch the restyled step-thru StreetSmart. While customer references-- and not media strategy-- are expected to supportthe CD brand sales, Hero Moto Corp will look at social areas -- like civic issues, association with Non Government Organizations, contribution to greener causes-- for corporate communications.The corporate campaign will be largely complemented by on-ground initiatives under the umbrella brand of ``We Care'', incorporating activities in the arena of communityservices, safety and services programmes, tree-plantations and environmental-friendly projects.In line with Hero's worldwide, safety riding programme, this fiscal Hero Moto CorpMotors Limited will take the
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riding programme-- where trained personnel will giveriding tips to bike owners
SPORTS & ENTERTAINMENT
In sports promot ions, Hero Moto Corp wi l l s t ickto cr icket ( fo l lowing t i t le sponsorship of the World Cup last year, it has signed a three-year contract for Hero-Hero-Salve Challenger Trophy) and golf (it will continue with Hero-Hero Masters Golf).Moreover, after a successful association with movies-- last year it signed Pyar Mein Kabhi Kabhi starring Dino M and Twinkle-- Hero Moto Corp is in theprocess of identifying title sponsorships of youth-centric movies. Says Sobti, “In terms of media exposure, we are looking at sports, movies and news. Niche channels are also worth putting your money on.'' For the CBZ, this year it is planning to run commercials in youth channels like MTV; Discovery and Star Movies .In sports promotions, Hero Moto Corp will stick to cricket, it has signed a three-year contract for Hero-Hero-Salve Challenger Trophy) and golf (it will continue with Hero-Hero Masters Golf).
Moreover, after a successful association with movies—last year it signed Pyar Mein Kabhi Kabhi starring Dino M and Twinkle-- Hero Moto Corp is in the process of identifying title sponsorships of youth-centric movies. In terms of media exposure, the company is looking at sports, movies, and news. For the CBZ Motorcycle, this year it is planning to run commercials in youth channels like MTV; Discovery and Star Movies.
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In sports promotions, Hero Moto Corp will stick to cricket, it has signed a three-year contract for Hero-Hero-Salve Challenger Trophy) and golf (it will continue with Hero-Hero Masters Golf). Moreover, after a successful association with movies—last year it signed Pyar Mein Kabhi Kabhi starring Dino M and Twinkle-- Hero Moto Corp is in the process of identifying title sponsorships of youth-centric movies. In terms of media exposure, the company is looking at sports, movies, and news. For the CBZ Motorcycle, this year it is planning to run commercials in youth channels like MTV; Discovery and Star Movies.
The Target:
“Services will be a major differentiator,'' says Sobti.``The campaignswill highlight the high level of services and automated facilities at our dealerships. ''Hero Moto Corp is expecting a 30-35 per cent growth in spare parts revenue, which accounted for Rs 100 crore in 1999-2000.In the new fiscal, Hero Moto Corp is aiming to take the sales of Splendor from40,000 a month to 50,000 a month; CBZ from 4,500a month to 5,000; and a10-15 per cent growth in CD and CD-SS brands up from 25,000 a month now. There-launched step-thru Street Smart is expected to account for around 25,000-30,000 in the first year. Services will be and is the differentiator. The campaigns will highlight the high level of services and automated facilities at the company’s dealerships. Hero Moto Corp is expecting a 30-35 per cent growth in spare parts revenue, which accounted for Rs
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100crore in 1999-2000.In the new fiscal, Hero Moto Corp is aiming to take the sales of Splendor from40, 000 a month to 50,000 a month; CBZ from 4,500 a month to 5,000; and 10-15 per cent growth in CD 100 and CD100-SS brands up from 25,000 a month now. Supporting all of the Hero Moto Corp's growth projections are amulet-pronged strategy including a thrust on a customer relationship programme, major increase in advertising and promotion (A&P) spending, expansion of dealership network, and a focus on organized consumer financing.
DEALERSHIP EXPANSION
Hero Moto Corp will add 25 more dealers and 50service stations to build a network of 575 dealership-cum-service points(including 400 dealerships) across the country.The level of investment in an automated Hero Moto Corp service station isexpectedto be around Rs 10 lakh, apart from land and building. “No dealerhas any problem inexpanding business,'' says Sobti. “We've tied up withCitibank and Centurion to provide bill discounting through our dealers.''Consumer Finance: In order to focus onorganised consumer financing, HeroHero tied up with Tata Finance a week ago. Thisis Hero Moto Corp's secondtie-up following Centurion, which is accounting for around 3,000 bikes a month through 100 dealerships.“We've got a good internal rate (based on IRM), which is standard acrossthe country,''says Sobti. ``These finance companies bring refreshinglycustomer-friendly focus toour
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organisation.''With Tata Finance, Hero-Hero's reach will be extended to over 150 dealerships. Also, Tata Finance is expected to add 2,000 bikes a month. Presently, consumefinancing, including non-organised financing, contributes around 20,000 Hero MotoCorp b ikes a month. Gauging Consumer: Hero Moto Corp is chalk ing out acustomer relationship programme, which is expected to be established in the nextthree years. “We're discussing with Result McCann,'' says Sobti.The programme will initially attempt at building relationships with Hero Moto Corp'stop three to five lakh owners, out of its customer base of three million.
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DATA ANALYSIS
For finding the result of Marketing Strategy in purchase of motor bike we have togo through the customers perception and attitude. As for example age group,house holds annual income and purchase. These things focus the Marketing Mix.Then we have to go in details of all factors of coaster of Marketing Strategy asfami ly , gender, geographic locat ion, soc ia l , cu l tura l , income age, sex etc .consumer behaviour are quite different their prepurchase, purchase decision and post purchase behaviour. For different product consumer behaves in different way.For buying the motel motor bike consumer prefer look robustness, Mileage andcomfortable. Brand image of the products is very important. Finding through theconsumer survey through questionnaire as follows.
Approximately 60% user are between the age group of 18 to 25, then 25-35.thus mostly the young prefer to riding the bike generation.
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Most of the customer are in the annual income group 60,000 to 1 lakh. Itmeans high income group mostly preferred four wheeler.
Most of the customer between the age group of 25 to 35 use bike office going purpose and 18 to 25 for college going or maintain their fined circle
Brand of the product most affect the behaviour of the consumer.
Customer known about the brand mostly through T.V. and word of month.
Price a not effect the consumer it the quality, availability and after salesservices are good.
In case of decision making friends, parents players an important role
Consumer buying decision affected by physical feature and technological feature of the bike
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MOTOR BIKE USERS AGE GROUP
AGE %14 -18 2018-25 6025-35 15ABOVE 35 5
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MOTOR BIKE USERS AGE GROUP
14 -1818-2525-35ABOVE 35
PURPOSE OF PURCHASE OF BIKE?
OFFICE GOING 39COLLEGE GOING 25MAINTAINS FRIENDS 14OTHER PURPOSE 22
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OFFICE GOINGCOLLEGE GOINGMAINTAINS FRIENDSOTHER PURPOSE
MARKET SHARE OF BIKE?
HERO MOTO CORP 40BAJAJ 32SUZUKI 12YAMAHA 11OTHERS 5
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HERO MOTO CORPBAJAJSUZUKIYAMAHAOTHERS
BRAND AWARENESS MEDIUM?
TV 38NEWSPAPER 25WORD OF MOUTH 23DEALER EFFORT 9OTHER 5
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TVNEWSPAPERWORD OF MOUTHDEALER EFFORTOTHER
PURCHASE INFLUENCER
QUALITY & FEATURE OF PRODUCT
15
PRICE 10EASE OF ABILITY 15
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BRAND IMAGE OF THE PRODUCT
24
AFTER SALES SERVICES 32VALUE OF MONEY 4
QUALITY AND FEATURESPRICEEASE OF ABILITYBRAND IMAGEAFTER SALES SERVICESVALUE OF MONEY
PHYSICAL FEATURES THAT EFFECTS MOST?
LOOKS 35
68
BODY BUILDING 25STYLE 22ROBUSTNESS 18
LOOKSBODY BUILDINGSTYLEROBUSTNESS
BETTER AFTER SALES SERVICES
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BAJAJ 18%PASSION 24%TVS VICTOR 28%AMBITION 25%OTHER 9%
BETTER AFTER SALES SERVICES
BAJAJ PASSIONTVS VICTORAMBITIONOTHER
RECOMMENDATION
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There are no two opinions that the automobile industry is faring very well in theIndian market since the early 90’s.However it can perform better in the market of it
OThe first recommendation is obviously about the customer care. Presently thecompany has a customer relation department but it has to be made stronger and more service provider to help the customers.
The distribution network should be made stronger so that the customers don’tfeel dissatisfied for services, sales, and stocks.
This is a age of customer delight and the company should not forget that“customer is the king”
Everywhere there is a game of production and volumes, the company that produces more can save more and prices could be made more competitively
The company should always go for quality The R & D base should be made stronger as
the level of indigestion shouldcome down.
After doing market research I would like to suggest or recommend to the Companythat there are certain out comes of research, which followed through the formal andinformal procedure during the research. Thus we are bound to draw the attention of Company to certain points which are ought to be perceived by the Company with fullcare.1. Publicity and advertisement should
be broad, because competition is more.
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2. 2. Size and weight of bike should be match with their C.C.
3.company should fo l low wor ld wide strategies for increas ing their g lobal revenue.
4. Bike should have stepping facility. Which may help during critical situation.
5. Company should provide promotional schemes to the customers.
6. All the protective parts of wheels should made of plastic and leg guard also bestrong.
7.Now Company is required to recover the faith of customers towards the brandimage.
8. Company should improve the mileage of the Bikes.
9.P r i c e s o f t h e B i k e m u s t b e s e t a s i t c a n b e a p p r o v e d b y m a j o r p a r t o f t h e population.
10. Fuel tank portion can be changed
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APPENDICES
QUESTIONNAIRE
Motor bike is not a luxury it has become the necessity in 21St century .I would like take few minutes of your prec ious t ime, Just to know about your v iews for different bike. I assure you that your information will be confidential and it would not be share by other organization.
Name :Age: Sex:Occupation:
1. Which of the following best describe your age group?
a) 14-18b) 18-25c) 25-35d) Above 35
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2.What is the size of your family (Including children)?
a) Singleb) 2 to 3c) 3 -4d) Above 4
3. Which of the following best identifies you house hold annual income?
a) Below 600000b) 60000 to 1 lakhc) 1 to 2 lakhd) Above 2 lakh
4.For which purpose you purchase the motorbike?
a) College goingb) Office goingc) Maintain friend circled) Other purpose
5.Which of following company’s motorbike do you have ?
a) Bajajb) Hero moto corp
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c) Suzukid) Yamahae) Any other
6. How come you know about that brand? (can make more than one)?
a) Tv b) Newspaperc) Dealer effortd) Word of mouthe) Internetf) Any other
7. Rate the following in order of influence you purchase a bike?
a) Brand image of the productb) Pricec) After sales serviced) Quality and feature of producte) Ease of availabilityf)Value for money
8. Which option you prefer when you purchase a bike ?
a) One time paymentb) Financial optionc) Exchange offerd) Any other
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9.Who was the decision maker in your purchase of motor bikes?
a) Parentsb) Friendsc) Yourselfd) Spousee) Other
10. Which physical features contributed most in your buying decision?
a) Looksb) Body buildingc) Styled) Robustness
11. What technological feature effected in your buying decision?
a) Power b) Mileagec) Four stroke engined) Any other
12. Which brand has better after sales services?
a) Bajaj calibreb) Passionc) TVS victord) Ambitione) l.m.l freedom
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f)other
13. Are you satisfied with your decision?
a) Highly satisfiedb) Satisfiedc) Neither satisfied nor dissatisfiedd) Dissatisfied
14. Which bike do your prefer for buying future?
a) Calibreb) TVS victorc) Pulserd) Passione) Ambitionf)LML freedomg) Other
BIBLIOGRAPHY
1. Phillip Litler “Marketing management” (Prentice-Hall of India Pvt.).
2.Harper W. Bayd, Ralph West Fall , and Stanley F. Stasch “Marketing research (AITBS Publisher 7th ed. 2001 ).
3. A.G. Sawyer and Davied J Howard, Journal of Marketing research 1999.
4.consumer Behaviour by Leon G. Schi f fman and Les l ie Lazar Kanuk (F i f th edition)
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5. Research Methodology by C.R. Kothari (Second Edition)
6. Business world and Business India magazine.
7.Auto India Magazine for two and four wheeler.
INTERNET
http://encyclopedia.thefreedictionary.com/Hero+ Her o
http://www.heroHero.com/co_policy.htm http://www.hero Hero.com/co_board_directors.htm http://www.cmsnl.com/news/ Hero-to-strengthen-
structure-of-its-rd- operations_news245.html http://www.etalkindia.com/
indian_automobiles_news_forums/new_variant_of_hero_ Hero_bikes_launchedglamour_fi _and_cd_delux-t3336.0.html
http://www.cmsnl.com/search.php [email protected] website of Hero Moto
Corp bike. [email protected] website of Suzuki motor bike. nvswaminathan@bajajauto,com .
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