DISSERTATION REPORT ON

“CUSTOMER SATISFACTION AND POST PURCHASE BEHAVIOR WITH RESPECT TO HERO MOTORS”

BANGLORE

Submitted by:

PRAVEEN

ENROLLMENT NO:

Under The Guidance Of

Marketing Faculty

In partial fulfilment of award of the degree

Of

MASTER OF BUSINESS ADMINISTRATION

AMITY GLOBAL BUSINESS SCHOOL

BANGLORE

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DECLARATION

I hereby declare that the Dissertation project entitled “CUSTOMER SATISFACTION

AND POST PURCHASE BEHAVIOR WITH RESPECT TO HERO

MOTORS” submitted by me as a partial fulfillment for the award of Masters of Business

Administration to Amity Global Business School, Bangalore is original and genuine work

carried out by me.

Date:

Place:

2

ACKNOWLEDGEMENT

Apart from my own efforts, the success of any project depends largely on the encouragement and

guidelines of many others. I take this opportunity to express my gratitude to the people who have

been instrumental in the successful completion of this project.

I would like to thank my project faculty guide Prof.XXXXX, Bangalore, for his constant

follow-up, encouragement and guidance to complete this project within the allotted time frame

I would like to thank xxxxxxxxxx, Director General, AGBS, Bangalore, for giving me a

chance to gain an exposure in the corporate world. I would also like to thank

XXXXXXXXXXXXXXXXXXXXXXXXX, for their kind cooperation and providing me with

the academic support.

Last but not the least; I would like to thank my Almighty for blessing me and making this

project a success.

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TABLE OF CONTENT

Chapter No Title Page No

1 Introduction 6

2 Literature Review 10

3 Research Methodology 28

4 Industry profile 30

5 Company profile 42

6 Termination of Honda joint venture 57

7 Data collection 58

8 Data Analysis and interpretation 59

9 Findings and Discussions 73

10Suggestions and Recommendations 74

11 Conclusion75

12 Bibliography 76

13 Annexure 77

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EXECUTIVE SUMMARY

Marketing starts with identifying the needs of customers and ends in satisfying those wants. The

goal of marketing is to attract new customers by promising superior value and to keep current

customers by delivering satisfaction based on their preferences retaining them.

As the customers are regarded as the superiors in today’s market, the level of satisfaction and

their preferences should be keenly studied.

The two-wheeler industry has been expanding rapidly. Gone are the days when possessing a

two-wheeler was seen as a luxury. Now days, it is viewed as a mere necessity.

Prior, sale of two-wheelers was mainly confined to urban areas but lately in rural areas the

bicycles are being replaced by power driven two-wheelers such as scooters, motorcycles.

Not only this, this industry has also customers ranging from all demographic segments. It has

been common sights that even school going children are driving two-wheelers. The women

customers are also increasing due to increase in women literacy and employment.

Getting a new customer is difficult, than retaining a current customer is a more difficult

one and not only that it is estimated that the cost of attracting a new customer is five times the

cost of retaining current customer. It requires a great deal of effort to induce satisfied customer

to switch away from their current preference. Thus, customer satisfaction is been given top

priority in today’s competitive world.

Therefore, keeping the above stated objective in mind, this study was conducted to ascertain the

customer’s satisfaction towards Hero two-wheelers in Hero MotoCorp Ltd. In view of this, a

detailed study of customer preferences, levels of satisfaction and their complaints and

suggestions was undertaken.

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1. INTRODUCTION TO THE DISSERTATION

The Dissertation is all about measuring the customer satisfaction in Hero Motors. Every

company is trying to satisfy its customers. The emphasis is on ways of retaining customers, then

on attracting new customers. It is easy to attract new customers then to retain old customers. So,

companies are trying to focus on this aspect of customer’s satisfaction.

The sale of a product does not end with the sale transaction but it is the point at which

the original marketing concept starts. The marketer has to see that whether the customer satisfied

with that particular product/service or not. The post purchase behavior is important for a

marketer. If there is any cognitive dissonance in the minds of the customers then that is enough

to lose a customer. Keeping this in mind the companies are giving more importance to customer

satisfaction.

This project work has been done to find out whether a customer is satisfied or

dissatisfied, also to measure the level of the customer satisfaction and provide this feedback to

the company. The first phase of the project involves the collection of information from the

customers for interpreting the characteristics based on which the customer feels satisfied or

dissatisfied. This information is collected by preparing a structured questionnaire. The

questionnaire consists of both open-ended and closed-ended questions. The questionnaire is

designed in such a way that a customer feels convenient to answer.

The collated information through the questionnaire is analyzed and presented in a

statistical form. The findings are listed and suggestions to solve problems faced have been given

in the suggestion part.

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INTRODUCTION TO CUSTOMER SATISFACTION

Whether the buyer is satisfied after purchase depends on the offers performance in

relation to the buyer expectation. In general satisfaction are a person’s feelings of pleasure or

disappointment resulting from comparing a products perceived performance relation to his/her

expectations. If the performance falls short of expectation, the customer is dissatisfied. If the

performance matches the expectation customer is satisfied. If the performance exceeds the

expectation the customer is highly satisfied.

Customer satisfaction cannot be very difficult. After all you either satisfied with

the services you receive or you are not. If you don’t you are not. If it is that easy, then obtaining

people's opinion about how satisfied they are with relatively straight forward matter- or is it?

Customer satisfaction is a marketing tool and a definite value added benefit. It is often perceived

by customers as important as the primary product or service your organization offers. It looks at

what is involved from 3 different angles, the first is from the view of an organization wishing to

understand, and measures, how satisfied its customer are with the products and services they

receive from it. The second is from the perspective of a research agency that has been asked to

obtain feedback from customers and about their experiences when dealing with companies.

Finally it considers the issue from the perspective of consumers who participate in surveys,

including both business customers and members of general public

MEANING OF CUSTOMER SATISFICATION

Customer satisfaction is a business term, is a measure of how products and services

supplied by a company meet or surpass customer expectation. It is seen as a key performance

indicator within business and part of the four prospective of balanced score card.

In a competitive market place were businesses compete for customers, customer

satisfaction is seen as a key differentiator and increasingly has become a key element of business

strategy customer satisfaction drives successful private sector business.

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High performing businesses have developed principles and strategies for achieving

customer satisfaction. This paper presents a framework or set of ideas for using customer

satisfaction principles and strategies to improve the quality responsiveness, and possibility of

public sector privately provided services in vulnerable communities

The framework suggested that resident who live in tough neighborhoods can be supported

through customer satisfaction strategies to become empowered individuals who informed

perspectives influence decisions about what, how, when, and where services are available to

them.

Customer satisfaction is the customer’s response to the evaluation of the perceived discrepancy

between prior expectation and the actual performance of the product as perceived after its

consumption.

DEFINITION

Cocotte, woodruff and Jenkins (1987) define customer satisfaction as "conceptualized as a

feeling developed from an evaluation of the experience."

HERE, the timing of satisfaction response is driving consumption.

BUT there is general agreement with kotler (2003) that "customer satisfaction is a

person's feeling of pleasure or disappointment resulting from comparing a products perceived

performance in relation to his or her expectation." In short customer satisfaction is "The

provision of goods or services which fulfill the customer expectation in terms of quality and

service, in relation to price paid."

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IMPORTANCE OF CUSTOMER SATISFACTION

It costs at least 7 times more to source a new customer than it does to retain existing one

a 'satisfied' customer tells 5-7 people in a year whilst a 'dissatisfied' customer will tell 14-15

people.

Companies can boost profits anywhere from 25% to 125% by retaining a mere 5% more

of their exciting customers.

Totally satisfied customers were 6 times more likely to use that services and commend it

than ' satisfied' customers.

Customers who have a bad experience with you and do not complain are only 37% likely

to still do business with you.

Customers who have an opportunity to complain and the complaint is achieved are 95%

likely to still do business with you.

FACTORS OF CUSTOMER SATISFACTION

1. Service of quality

2. reliability of service

3. knowledge of the staff

4. Being kept informed of progress

5. The way service kept its promises

6. The way the service handled any problem Friendliness of staff

7. How sympathetic staff were to your needs

8. Speed of enquiries

9. Number of time had to contact the service.

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2. REVIEW OF LITERATURE

Planning for the future to achieve the long-term objective is integral to the

survival and growth of every business. Strategic planning today has to take into cognizance the

rapid changes in technology, increased competitiveness and the turbulent business environment,

also with the world becoming one big global village.

Strategy covers every aspect of business from business reengineering, new business

development, product development and brand positioning to advertisements promotional

campaigns, media and publicity. It is a game of innovation.

In fact, marketing people are involved in marketing 10 types of entities; goods, services,

experience, events, persons, places, properties, organizations, information and ideas. Marketing

management is the art and science of choosing target markets and getting, keeping and growing

customers through creating, delivering and communicating superior customer value.

India is second largest manufacturer and producer of two-wheelers in the world. It stands

next to Japan and China in terms of the number of two wheelers produced and domestic sales

respectively.

Indian two-wheelers industry made small beginning in early 50’s when Automobile

products of India (API) started manufacturing scooter in India. Hero was established on 13 th of

April 1984. The Indian two wheelers Industry can be broadly classified as scooter, motorcycles

and mopeds/scooters. In last six years domestic two-wheelers has seen structural charges. This

can be seen from the change in composition of two wheeler sales, where the motorcycles have

gained market share from the scooter and moped or scooters segments.

The consumer is now faced with proliferation of brand models. Getting new customers as well

as retaining them is an important task of manufacturers. So service after sales is very important.

A satisfied customer brings in more name and goodwill to the company, which is why customer

satisfaction is given more importance in today’s competitive world. A study on this aspect with

Hero two-wheelers at Hero MotoCorp Ltd was made.

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Marketing mix of Hero Motors:

Product:

Hero motors are known for its quality and advanced technology, satisfying the needs of the

customers both in urban and rural areas.

Place:

Hero Motors concentrates not only on urban areas, it targets rural areas as well. It has its

showrooms in almost every town in the country, making the two wheelers available everywhere

in the country.

Price:

The pricing strategy of the Hero two wheelers is economical and value for money, they were

very reasonably priced .

Promotion:

The promotional strategy of Hero Motors is sponsoring lot of national and international events

and endorsed by the well knows personalities of the country.

They sponsor the events like cricket world cups.

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Segmentation, Targeting and Positioning of Hero Moto Corp

1. Introduction to Two Wheeler Bikes

A motorcycle (also called a motorbike, bike) is a two wheeled motor vehicle. Motorcycles vary

considerably depending on the task they are designed for, such as long distance travel,

navigating congested urban traffic, cruising, sport and racing, or off-road conditions.

Motorcycles are one of the most affordable forms of motorized transport in many parts of the

world and, for most of the world's population, they are also the most common type of motor

vehicle. There are around 200 million motorcycles (including mopeds, motor scooters, motorized

bicycles, and other powered two and three-wheelers) in use worldwide, or about 33 motorcycles

per 1000 people.

India, is the second largest producer of two-wheelers in the world. In the last few years, the

Indian two-wheeler industry has seen spectacular growth. The country stands next to China and

Japan in terms of production and sales respectively. Majority of Indians, especially the

youngsters prefer motorbikes rather than cars. Capturing a large share in the two-wheeler

industry, bikes and scooters cover a major segment. Bikes are considered to be the favorite

among the youth generation, as they help in easy commutation. The two-wheeler market in India

is the biggest contributor to the automobile industry with a size of Rs.100,000 million. The

motorcycle market share is about 81.5% of the total two wheeler market in India. Three-fourths

of the total exports in the two wheeler automobile industry are made in the motorcycle segment.

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Segmentation, Targeting and Positioning Related to Bikes

A market segment consists of a group of customers who share a similar set of needs and wants.

The major segmentation variables—geographic, demographic, psychographic, and behavioral

segmentation.

Geographic Segmentation (nation, states, regions, cities, density, climate, etc.)

Demographic Segmentation (age, family size, gender, income, family life cycle,

occupation, religion)

Psychographic segmentation (lifestyle, personality)

Behavioral segmentation (occasions, benefits, user status, usage rate, loyalty status,

attitude towards product)

For bikes, demographic segmentation plays an important role. Bikes cater to a particular age

group, gender and/or income group. Depending upon the segment, the features of the bike varies.

Hence, marketers should have a good knowledge about what features to add on as per the

segment they want to cater to.

Market Targeting

Once the firm has identified its market-segment opportunities, it has to decide how many and

which ones to target. Marketers are increasingly combining several variables in an effort to

identify smaller, better-defined target groups. In evaluating different market segments, the firm

must look at two factors: the segment's overall attractiveness and the company's objectives and

resources. After evaluating different segments, the company can consider five patterns of target

market selection.

Single – segment concentration: Through concentrated marketing, the firm gains a strong

knowledge of the segment's needs and achieves a strong market presence.

Selective specialization: A firm selects a number of segments, each objectively attractive

and appropriate.

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Product specialization: The firm makes a certain product that it sells to several different

market segments.

Market specialization: The firm concentrates on serving many needs of a particular

customer group.

Full market coverage: The firm attempts to serve all customer groups with all the

products they might need.

Manufacturers of bikes need to be very precise while selecting their target market. They should

understand the consumer’s demand and then accordingly place their product. The product’s

features should satisfy its target customers and should be at per with the value it promises to its

target customers.

Market Positioning

Positioning is the act of designing company’s offering and image to occupy a distinctive place in

the mind of a target market. The end result of positioning is value proposition, a cogent reason

why the target market should buy the product. [4]

Positioning in market is very important as well as difficult. It’s making the consumers aware of

your product. Each bike must have a unique selling point which needs to be well portrayed in

consumer’s mind so that he has an additional choice in his mind.

Competiting Bike’s Brands

The brands that I have chosen are:

Hero MotoCorp Ltd.

Yamaha Motor Company Limited

Bajaj Auto Ltd.

TVS Motor Company

Harley Davidson

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Hero MotoCorp Ltd

Hero MotoCorp Ltd.  formerly Hero Honda is an Indian motorcycle and scooter manufacturer

based in New Delhi, India. Hero Honda started in 1984 as a joint venture between Hero

Cycles of India and Honda of Japan. The company is the largest two wheeler manufacturer in

India. In 2010, When Honda decided to move out of the joint venture,[7] Hero Group bought the

shares held by Honda. Subsequently, in August 2011 the company was renamed Hero MotoCorp

with a new corporate identity. Product range of Hero MotoCorp are: [5]

CD 100  Passion Passion Plus

CD 100 SS CBZ Karizma

Splendor  CD Dawn Ambition

Splendor + CBZ Star Ambition 135

Impulse Acheiver Pleasure

Street Hunk Joy

Glamour CD Deluxe

Market Segmentation

Hero MotoCorp caters to a wide consumer base. It has segmented its market based on income

and age. It caters to youth of all income groups. Its highest selling bike Splendor is a favorite in

sub urban and rural India. It potrays itself as the most efficient bike range to cater to Indian

Roads.

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Target Market

Hero MotoCorp follows selective specialization. It has a wide range of bikes from Rs 37,000 to

Rs 95, 000. Each product has multiple optional features. The USP that it uses are: strong, sturdy

and powerful, greater mileage, low maintenance cost, safe to ride, ease and comfort. Its target

market includes lower middle class consumer to upper middle class consumer. It is affordable,

available and acceptable by all.

Positioning Strategy

Fill it. Shut it. Forget it Campaign

This campaign focused on the mileage of Hero

bikes. It says that once you fill oil in the bike’s

tank, you are tension free. Due to its higher mileage,

you can travel as much as you want without bothering

to refill oil.

Dhak dhak go Advertisement campaign

Dhak dhak refers to the heart beat. Therefore this

campaign showed that if you are riding a Hero

bike you are listening to your heart. This campaign

connects emotionally to the consumer as it shows the

connection of bikes to the heart of every Indian.

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Desh ki Dharkan Advertisement Campaign

Desh ki dharkan refers to the heart beat of the

country. It symbolizes that all people in India

are emotionally attached to their country. Even

though there are a lot of cultural differences but

the entire country stands as one. This campaign

places Hero bikes as the heart beat of the entire

nation uniting everyone as a nation.

Event sponsorships

Event sponsorships of various cricket matches is

a positioning strategy as cricket has a huge fan

base in India. It positions itself as a strong, reliable,

affordable and greater mileage bikes.

Celebrity endorsements

Various celebrity endorsements are used as their positioning technique. Saurav Ganguly, when

he was captain of Indian Cricket team was their brand ambassador along with Hritik Roshan.

Both these personalities are unique in their fields. Saurav Ganguly was the face of Indian

cricket. People worshiped him. So, through Saurav Gaunguly, Hero potrayed itself as the heart

beat of the country. Iconic figure Hritik Roshan is known for his youth and physique. So through

him Hero tried to lure the youth.

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Hum me hai hero campaign

This is the recent advertisement of Hero MotoCorp. This advertisement tries to prove that we all

are born super starts. We just need to focus and believe in ourselves. There is nothing impossible

in this world and there is nothing that can’t be achieved. Through perseverance we can reach

great heights and achieve whatever we want. We just need to believe firmly that we are a hero.

Conclusion

Hero MotoCorp is the biggest two wheeler manufacturer in the world. It has the highest market

share in India. It has successfully delivering its promise to its target customers. The aggressive

market positioning strategy that it uses places it way above its competitors. It relates itself to

every Indian. It is a bike for the Indian consumers satisfying all their needs.

Yamaha Motor Company Limited

Yamaha Motor Company Limited, is a Japanese motorized vehicle-producing company. Yamaha

made its initial foray into India in 1985. Subsequently, it entered into a 50:50 joint-venture with

the Escorts Group in 1996. However, in August 2001, Yamaha acquired its remaining stake

becoming a 100% subsidiary of Yamaha Motor Co., Ltd, Japan (YMC). Presently, its product

portfolio includes: [6]

VMAX (1,679cc) Fazer (153cc) SS125 (123cc)

MT01 (1,670cc) FZ-S (153cc) YBR 125 (123cc)

YZF-R1 (998cc) FZ16 (153cc) YBR 110 (106cc)

FZ1(998cc) SZ-R(153cc) Crux (106cc)

YZF-R15 version 2.0 (150cc)

SZ & SZ-X (153cc)

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Market Segmentation

Yamaha caters to the market of tier I and tier II cities. It caters to males between the age group of

18 to 35. It caters to upper middle class families. It has high pick up and speed. It is the most

innovative and most stylish bike manufacturers. Therefore, it is youth centric.

Target Market

Yamaha has single segment concentration. It is known as a racing bikes manufacturer. Speed

Biking is mainly attributed to Yamaha. Thus positioning itself as a ‘manufacturer of safety first’

bikes, as well as the most style conscious segment. It also focuses on comfort, technology

advancements. Its target customers are the people who are sporty, thrill loving and style

conscious.

Positioning Strategy

YES Yamaha Advertisement

YES stands for Yamaha extended services. It tells

that now Yamaha is growing in all parts of the

country. It has good nationwide service. It can be

purchased easily. It gives good pick up, speed and

better mileage. It provides comfort. Therefore, this

advertisement portrays Yamaha as common man’s

racing bike. It conveys the message of ‘staying ahead

of tortoises’ focusing on the speed of the bike

.

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Celebrity endorsements

John Abraham is the brand ambassador for

Yamaha SZR. The hard sturdy look of the bike

can be correlated with the masculinity of John

Abraham. It thus says that it is a bike for all

masculine, speed and thrill loving people.

Use of songs for advertisement

Yamaha thought it is the best way to portray the efficiencies of the bikes. To enhance the

advertisement and make it appealing, the song “Ruk Jaana Nahin” has been used as the

background score. The campaign is a national level campaign catering to regional markets as

well including south, west and east India. The target consumer is essentially 24 yrs & above from

SEC A/B and preferably male.

Conclusion

Yamaha reflects racing bikes in India. It has good pick up and speed. It is famous for its sturdy,

stylish looks and best technologies. It caters to upper middle class and middle-middle class

income group, especially adult.

Bajaj Auto Ltd.

Bajaj Auto Limited, is an Indian motorized vehicle-producing company. Bajaj Auto is a part

of Bajaj Group. Its founded by Jamnalal Bajaj at Rajasthan in the 1930s. Bajaj Auto is the

world's third-largest manufacturer of motorcycles and second-largest in India.Over the last

decade, the company has successfully changed its image from a scooter manufacturer to a two-

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wheeler manufacturer. Its product range encompasses scooterettes, scooters and motorcycles. Its

real growth in numbers has come in the last four years after successful introduction of a few

models in the motorcycle segment.[7]

CT 100 Platina Avenger

Discover Eliminator Wind 125

Caliber 115 Pulsar 150 KS  Kawasaki Ninja

Boxer

Market Segmentation

Bajaj caters to the mass consumer. It caters to middle-middle and upper middle income group of

consumers. It does not have the rural support. It still lags behind in the rural areas. It caters to

aspiring young men of the country.

Target Market

Bajaj follows selective specialization while targeting its consumers. Its concentrates on the youth

of the country who are technology freak. It offers a wide variety, so that it can cater to various

income groups of the country.

Positioning Strategy

Celebrity endorsement

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The very first TV Commercial of the Bajaj Discover

DTSi (125 cc at that time) in 2004 featured the Cine

Star of Asia, Jackie Chan. Jackie Chan is known for

his fast moves, action, and quick reflexes. So the

features of this bike could be easily related to

that of Jackie Chan. The bike is fast, has speed and

technology and can survive in all sorts of roads.

This advertisement convinces you to be a master who always wins similar to Jackie Chan. It

portrays the image of the bike to be a master piece.

1.1.1 Pulsar mania

This advertisement symbolizes bike stunts of different range. The campaign beard innovative

punch line of “Definitely Male” positioning pulsar to be a masculine – looking model with an

appeal to sensitive customers. It boosts the male ego of its target customers. It makes them feel

themselves as the fastest Indian

Discover India with the power of 1 L petrol

This advertisement positions Bajaj as a fuel efficient bike with a greater mileage. It makes you

feel that you can travel to the most exhaustic and amazing places in India, i.e., discover the

undiscovered India. This also gives a patriotic touch to the mindset of people making them fell

proud of their nation. You can cross crowded lanes, mountain paths and explore the rich heritage

if India without any worries of oil refilling.

Hamara Bajaj

This was the tag line of Bajaj Auto Ltd. It positions Bajaj as your own bike. It gives the

feeling of belongingness therefore playing with the emotions of the consumers.

Conclusion

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Bajaj is the second largest manufacturer of bikes in India after Hero Moto Corp. Its twin spark

technology, speed, fuel efficiency had made a favorite in Indian roads. It gives you a feeling of

belongingness. It makes you feel ‘male’ and emotionally binds you to Mother India.

TVS Motor Company

TVS Motor Company is the third largest two-wheeler manufacturer in India and one among the

top ten in the world, and is the flagship company of the USD 4 billion TVS Group. TVS Motor

currently manufactures a wide range of two-wheelers from mopeds to racing inspired

motorcycles. Their bike’s range includes:

Apache RTR 180 Flame DS 125 Flame

TVS Jive StaR City Sports

Market Segmentation

The range of TVS bikes are less. It caters to the lower middle class and the middle-middle class

income groups. It caters to the youth. It segments itself on the basis of gender as well – as it

caters to male.

Target market

TVS focuses on the multisegment strategy of targeting the market. It caters to youth of both

lower middle class and the middle-middle class income groups. It caters to those who are

passionate about owning a bike.

1.2 Positioning Strategy

1.2.1 Celebrity endorsements

TVS endorses Sachin Tendulkar as its brand

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ambassador. Sachin is a the greatest cricketer

India has ever produced. Hence people can easily

link to it as something great and good. So,

TVS positions itself as a bike that is safe,

balance and can be easily maintained.

Powerful and stylish

This advertisement shows that TVS bikes are stylish, powerful, masculine and can be easily

flaunted off amongst peers. It gives you a feeling of superiority.

Conclusion

The aggressive marketing strategy along with the changed approach to advertisement campaign

boosted the demand for the TVS models. They can be easily affordable, reliable and easy to

maintain. TVS has positioned itself well in the bike’s sector. It arises a passion in you to own

something that you feel proud of.

Harley Davidson

Harley-Davidson often abbreviated H-D or Harley is an American motorcycle manufacturer.

Founded in Milwaukee,Wisconsin, during the first decade of the 20th century, it was one of

two major American motorcycle manufacturers to survive the Great Depression. The company

sells heavyweight (over 750 cc) motorcycles designed for cruising on the highway. Harley-

Davidson motorcycles (popularly known as "Harleys") have a distinctive design and exhaust

note. They are especially noted for the tradition of heavy customization that gave rise to

the chopper-style of motorcycle.[8]

Market Segmentation

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It caters to tier I and tier II cities. It caters to touring enthusiastic and outdoor oriented male of

high income groups between the age of 27 to 45. It caters to innovators or achievers who are self

employed business men and are ready to buy the product. They want to but it for leisure riding,

planning weekend rides etc.

Target market

It caters to people who golf, who own yachts, indulge in leisure activities, hoteliers, resort

owners in tourist destinations are always looking to add new luxury items intotheir fleet for their

clients to indulge into leisure activities.

 Positioning Strategy

The brand positions itself as:

Masculine

Free spirited

Rugged

Macho

Strong

Adventurous

Conclusion

Harley Davidson is a bike of the premium category. It caters to the high end people who wish to

derive pleasure while riding them.

STATEMENT OF THE PROBLEM

This Project has been titled “A comprehensive study Post purchase buyer behavior and

satisfaction towards Hero Motors Bikes after the split with Honda."

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To study the new market of Hero motors after the split with Honda, the consumer response to the

bike and needed improvement aria

The study would help to understand the consumer satisfaction to their expectation.

OBJECTIVES

This study was conducted keeping the following objectives in mind.

1. To study the factors which influence the purchase of Hero two-wheelers?

2. To know the customer level of awareness of Hero two-wheelers.

3. To know the various factors, which influence customers in purchasing, they’re two -

wheelers?

4. To find the after sales service offered by Hero MotoCorp Ltd.

5. To know the customer level of satisfaction of Hero two-wheelers with respect to Hero

MotoCorp Ltd.

6. To find the profile of Hero MotoCorp Ltd two-wheeler customers.

7. To understand two wheeler sector in India.

8. How the split with Honda has affected Hero motors.

SCOPE OF THE STUDY

This study helps the organizations to increase their service and product quality and in

turn increase the market share, top and bottom line of the company.

NEED FOR THE STUDY

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Marketing starts with identifying the needs of customers and ends in satisfying those

wants. The goal of marketing is to attract new customers by promising superior value and to

keep current customers by delivering satisfaction based on their preferences retaining them.

Without customer, no market exists. As the customers are regarded as the superiors in

today’s market, the level of satisfaction and their preferences should be keenly studied.

The two-wheeler industry has been expanding rapidly. Gone are the days when

possessing a two-wheeler was seen as a luxury. Now days, it is viewed as a mere necessity.

Prior, sale of two-wheelers was mainly confined to urban areas but lately in rural areas

the bicycles are being replaced by power driven two-wheelers such as scooters, motorcycles.

Not only this, this industry has also customers ranging from all demographic segments. It

has been common sights that even school going children are driving two-wheelers. The women

customers are also increasing due to increase in women literacy and employment.

Getting a new customer is difficult, than retaining a current customer is a more difficult

one and not only that it is estimated that the cost of attracting a new customer is five times the

cost of retaining current customer. It requires a great deal of effort to induce satisfied customer

to switch away from their current preference. Thus, customer satisfaction is been given top

priority in today’s competitive world.

Therefore, keeping the above stated objective in mind, this study was conducted to ascertain the

customer’s satisfaction towards Hero two-wheelers in Hero MotoCorp Ltd. In view of this, a

detailed study of customer preferences, levels of satisfaction and their complaints and

suggestions was undertaken.

RESEARCH METHODOLOGY

The information required for this study obtained was basically through two sources.

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Primary Data:

Primary Data has been gathered by a survey through a structured questionnaire.

The Data has been collected from 100 customers, through questionnaires, by using simple

random sampling. In addition interaction with the staff of Hero MotoCorp Ltd has also given

some information.

Secondary Data:

Secondary Data comprises of information obtained from annual reports, brochures,

manuals websites etc.

Target respondents

Gender: Male and female

Age group: 20-45

Sampling units: Hero Motors Two wheelers users

No. of Samples: 50 respondents

INDUSTRY PROFILE

The Indian two-wheeler contributes the largest volume amongst all the segments in automobile

industry. Though the segment can be broadly categorized into 3 sub-segments viz. scooters,

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motorcycles and mopeds; some categories introduced in the market are a combination of two or

more segments e.g. scooters and step-thru. The market primarily comprises five players in the

two-wheelers segment with the most of the companies having foreign collaboration with well-

known Japanese firms earlier. But most of the companies are now planning 100% subsidiaries in

India. and growth anticipated is higher than the 16 percent achieved in the past 10 years

The automobiles sector is divided into four segments-two wheelers(mopeds, scooters,

motorcycles, electric two-wheelers), passenger vehicles (passenger cars, utility vehicles, multi-

purpose vehicles), commercial vehicles (light and medium-heavy vehicles), and three wheelers

(passenger carriers and good carriers).

The industry is one of the key drivers of economic growth of the nation. Since the globalization

of the sector in 1991 and the subsequent opening up of 100 percent FDI through automatic route,

Indian automobile sector has come a long way. Today, almost every global auto major has set up

facilities in the country.

The world standings for the Indian automobile sector, as per the Confederation of Indian

Industry, are as follows:

Largest three-wheeler market

Second largest tow-wheeler market

Tenth largest passenger car market

Fourth largest tractor market

Fifth largest commercial vehicle market

Fifth largest bus and truck segment

The sector has shown a sluggish growth of 12 percent in 2012. The trend is likely to stay with a 10

percent growth outlined for 2013 citing high ownership costs (fuel costs, cost of registration, excise duty,

road tax) and slow rural income growth. Solid but cautious growth is expected over the next few years.

However, from a long-term perspective, rising incomes, improved affordability and untapped markets

present promising opportunities for automobile manufactures in India. According to Macquarie equities

research, sale of passenger vehicles is expected to double in the next four years

Two Wheeler & its role in Indian Context:

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As the cities grow & suburbs expand, transportation needs becoming more & more acute,

with mounting pressure on its public transportation for which two wheelers are ideal.

The two-wheeler Industry today has a significant role in the Indian economy, with an

annual turnover of Rs. 9000 crores and compounded average growth of 10%. In recent years, it

is of the few industrial sectors in the growth phase today considers personal transportation as one

of the basic needs.

The two-wheeler industry basically comprises mopeds, scooters, scooters and

motorcycles. Mopeds are basic entry-level products aimed at lower/middle income groups,

offering company. This category dominated by TVS SUZUKI, which has a market share of 50%

today. The other major players in this segment include KINETIC ENGG., HERO MOTORS and

BAJAJ AUTO.

Scooters, which found largest segment in the industry (37 percent) is dominated by

BAJAJ AUTO. It is however facing stiff competition from LML, which offers better style and

technology to the Indian customers. However, dominance of this category has been declining

because of shift in the customer preferences.

Major part of the growth in the two-wheeler industry has come from motorcycle

especially, the Indo-Japanese 100cc motorcycles, which are considered, fuel efficient, reliable

and suited for rough roads.

Scooters also growing at a fast phase and are being increasingly perceived as a better

option providing convenience and motor style, by urban customers. In this category, TVS Scooty

holds a dominant market share.

With sales of over three million vehicles, India is the second largest two-wheeler market

in the world. Vehicle has become a necessity for day-to-day busy life, with the accelerated

industrial and business activity in a liberalized environment. However, given the limited

purchasing power and to high cost of cars, majority of the middle class vehicle users prefer two

wheelers.

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With sales of over million vehicles, India is the second largest two-wheelers market in

the world. China is the market leader with around 51 percent of the Asia Market, India,

Thailand; Indonesia & Taiwan are the other key markets for two-wheelers with market share of

19 percent, 10 percent, 9 percent and 5 percent respectively.

In the last four to five years, the two-wheeler market has witnessed a market shift towards

motorcycles at the expense of scooters. In the rural areas, consumers have come to prefer

sturdier bikes to withstand the bad road conditions. In the process the share of motorcycle

segment has grown from 48% to 58%, the share of scooters declined drastically from 33% to

25%, while that of mopeds declined by 2% from 19% to 17% during the year 2000-01. The Euro

emission norms effective from April 2000 led to the existing players in the two-stroke segment

to install catalytic converters. 4-stroke motorcycles are now replacing all the new models.

Excise duty on motorcycles has been reduced from 32% to 24%, resulting in price reduction,

which has aided in propelling the demand for motorcycles. Fierce competition has also forced

players to cut prices of certain models.

Competition has intensified over the last couple of years altering the dynamics in the

motorcycle segment with various companies planning to cash in on this spurt in demand by

calling off their JVs like Suzuki Motors planning to break off with TVS. Recently, Honda

Corporation of Japan announced its intentions to set up a 100% subsidiary to manufacture

scooters and motorcycles. Other players in the two-wheeler industry include Bajaj Auto Ltd.,

Kinetic Motor Co.Ltd. LML and Escorts Yamaha. Low interest regime has helped in reducing

cost of loans, which will help in boosting sales of 2-wheelers, since 80% of the two-wheelers are

credit –stimulated.

The two-wheeler industry is passing through a critical but interesting phase. For many

years, it was growing continuously but the turning point came in 1996=97 when it started

slowing down. The impact was really (MI) felt in the next year when the overall growth was

hardly two percent. This was also possible only because the motorcycle segment showed a

healthy growth of 15 percent. The scooter segment went down by 3 percent and mopeds by 6

percent.

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Another highlight is that the motorcycle sales have surpassed the scooter sales for the

first time in 1998-99. Until then, motorcycle sales were always trailing behind.

The net result is that motorcycles now account for 41 percent of the two-wheeler market,

while scooters account for 36 percent. Mopeds have been able to hold their own at about 21

percent.

GROWTH OF MOTORCYCLES

It is therefore not surprising that every major player is trying to get into the Motorcycle

market to have a piece of the cake.

Hero MotoCorp Ltd is indisputable the leader with 38 percent share followed by Bajaj

with 27 percent (includes M-80), TVS at 19 percent and Escorts at 13 percent. Now LML and

Kinetic have announced their plans to manufacture motorcycles, which are likely to come in the

market by next year. The battle is expected to be fierce but the consumer will be the greater

beneficiary.

The growth in motorcycles is slowly losing its hold. It is considered a family vehicle but

perhaps there is competition from the second hand car markets where prices have fallen down

rapidly. A1992 Maruti 800 is now available for just 70,000.

The scooter manufactures have to watch this phenomenon and bring our many new

product variants in the right price slots to sustain their shares in the market. The moped market

has been steady with an average growth of 3 percent. It is dominated by TVS which holds 48

percent market share followed by Kinetic and Majestic Auto at 23 percent and 18 percent

respectively.

In each segment, there is a wide gap between the first two contenders, which makes their

products positioning and marketing strategies most interesting. The two wheelers market seems

to be maturing. There are the usual their conventional segment of scooters, mopeds and

motorcycles. Two new segments are being created.

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NEW SEGMENTS

A Step is through segment like Kinetic K4-100, Honda Street, Bajaj M-80, which is quite

close to the motorcycle segment. The other segment is scooterettes or mini scooters in which

vehicles such as Kinetic SX/Style, TVS Scooty, Hero Winner, Bajaaj Sunny/Sprite/Safire and

LML trendy can be considered. These are vehicles under 75 cc and largely targeted at the youth

market such as college students, young boys and girls and new couples. They get the advantage

of lower excise duty at 16 percent as compared to 24 percent applicable over 75 cc. The trend is

towards push button start vehicles.

Among the majors in the two-wheeler industry, first quarter figure for the current year of some

players has been encouraging. The company sold 313,303 units last month as compared to

325,360 units in the same month last year. With this, BAL has recorded as 87 percent growth in

the motorcycle segment in the first quarter with sales of 130,577 units (93,631 units in the

corresponding period last year) BAL estimates market share of the first quarter-Geared scooters

75.9%, unguarded scooters- 16.5%, Step-thrus-72.3% and motorcycle-20.5%.

In the scooters segment, sales of Bajaj Sunny and Bajaj Spirit increased by 170 percent to

7,876 units. First quarter sales registered an impressive 78 percent growth with sales of 19,562

(10,995 units). The overall sales grew by 9.3 percent in the quarter when the company sold 3.24

lakh vehicles.

BAL however reported a decline in sales of scooters by 15.6 percent in the first quarter.

The company hopes to increase the share of motorcycle in its product basket from 18 percent last

year to 30 percent by 2003-04.

Hero MotoCorp Ltd enjoys tremendous brand equity in the motorcycle segment.

Kinetic Motors, another important player, managed to grow in 1999-2000, when the

scooters segments a whole slipped by around 5 percent. TVS Suzuki, a motor two-wheeler

market, has reported a growth of 13 percent in the first quarter period and sold 2.19 lakh units.

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Sales of motorcycles and scooters were up by 18 percent and that of mopeds by 8 percent over

the same period last year.

The current year therefore promises to be a testing time for the two-wheeler industry.

Industry pundits feel that an overall growth rate of 5 percent should be possible as against 9

percent projected earlier. The sales volume therefore is expected to be around 3.8 million in

2000-2001.

DRAMATIC CHANGES:

HeroMotoCorp is now world’s largest manufacturer of two-wheelers. The company has

benefited from the demand shift to motorcycles, as it focuses solely on this product segment

(although has a product called Pleasure in Scooter segment). With fuel efficiency and riding

comfort as the main selling points, HMC has been able to address a wide market and post robust

sales growth even after its separation from the Japanese major Honda.

The coming years will see increasing competition due to the parity in products

and price. The only differentiators will be technology, quality, product range and service.

Imaginative marketing will emphasize relationship building, customer satisfaction and

relationship. All is exploring new techniques such as direct marketing and institutional sales.

Some of them are taking the vehicle actually to the customer’s doorstep. Now the customer is the

king.

HISTORICAL DEVELOPMENT OF TWO WHEELER INDUSTRY

India is the second largest manufacturer and producer of two-wheelers in the world. It

stands next 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 as if respective policy

followed by the Government of India towards the passenger car industry, rising demand for

personal transport, inefficiency in the public transportation system etc.,

In 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 1958,

API and Enfield were the sole producers.

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In 1948, Bajaj Auto began trading in imported Vespa scooters and three wheelers.

Finally, in 1980, it setup a shop to manufacture them in technical collaboration with Piaggio of

Italy. The agreement expired in 1971.

In the initial stages, API it was later overtaken by Bajaj Auto dominating the scooter

segment. Although various Government and Private enterprises entered the fray for scooters, the

only new player that has lasted until 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 via Enfield,

Ideal Jawa and Escorts. While Enfield bullet was a four-stroke bike, Jawa and the Rajdoot were

two-stroke bikes. Enfield 350cc bikes and Escorts 175cc bike initially dominated the motorcycle

segment.

The two-wheeler market was opened to foreign competition in the mid 80’s. And then

the market leaders-E5corts and Enfield- were caught unaware by the onslaught of the 100 cc

bikes of the four IndoJapanese joint ventures. With the availability of fuel-efficiency low power

bikes, demand swelled resulting in Hero Honda — the only producer of four-stroke bikes (100cc

category), gaining a top slot.

The first Japanese motorcycles were introduced in the early eighties. TYS Suzuki and Hero

Honda 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 to indigenous

manufacturing. In the 90’s the major growth for motorcycle segment was brought in by Japanese

motorcycles, which grew at a rate Of nearly 25% CAGR in the last five years.

The industry had a smooth ride in the 50’s, 60’s and70’s when the government prohibited new

entries and strictly controlled capacity expansion. The industry saw a sudden growth in the 80’s.

The industry witnessed a steady growth of 14% leading to a peak volume of 1.9mm vehicles in

1990.

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The entry of Kinetic Honda in mid-eighties with a variometric scooter helped in

providing ease of use to the scooter owners. This helped in inducing youngsters and working

women towards buying scooters, who were earlier inclined towards moped purchases. In line

with this, the scooter segment has consistently lost its part of the market share in the

two~whee1er market.

In 1990, the entire automobile industry saw a drastic fall in demand. This resulted in a

decline of 15% in 1991 and 8% in1992, resulting in the production loss of 0.4mn vehicles.

Barring Hero Honda, all the major producers suffered from recession in FY93 and FY94. Hero

Honda showed a marginal decline in 1992.

The reasons for recession in the sector were the incessant rise in fuel price, high input

costs and reduced purchasing power due to significant rise in general price level and credit

crunch in consumer financing. Factors as if increased production in 1992, due to new entrants

coupled with the recession in the industry resulted in either company reporting losses or fail in

profits.India is one of the very few countries manufacturing three wheelers in the world. It is the

world’s largest manufacturer and seller of three wheelers. Bajaj Auto commands a monopoly in

the domestic market with a market share of above 80%; Bajaj Tempo, Greaves Ltd and Scooters

in India share the rest.

The total number of registered two-wheelers and three-wheelers on road in India, as on

March 1998 was 27.9nm and 1 .7nin respectively. The two-wheeler population has almost

doubled in 1996 from a base of 12.6mn in 1990.

PENETRATION OF TWO-WHEELERS:

On a base of around 28mn vehicles on Indian roads and around 175mn households, there

were only 160 motorized two-wheelers per thousand households in FY98. This compares poorly

with countries like Thailand where it is around 600 per thousand households. Also with a

household size of 5.5 persons and more than one wage earner in about 60% of the households,

the potential for a second vehicle demand is also good.

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The number of households in the low-income group has fallen since FY86 and has been

more pronounced in the post-reform period. On the other hand, the number of households in the

middle, upper middle and high-income groups that form the consumer base for twowheelers,

have increased. Their share of the total number of households has increased from 10.6% in FY88

to 20.5% inFY96. This rising income profile however, has, been more pronounced in the urban

areas as average annual growth in industry surpassed that of agriculture in the period FY93 to

FY96.

Major Developments & Investments

Tata Motors Ltd plans to invest about £30 million (US$ 49.17 million) in the National

Automotive Innovation Campus (NAIC) for research and development (R&D). The

investment would be made through its subsidiary Tata Motors European Technical

Centre (TMETC) at the University of Warwick campus, UK.

Volvo India Pvt Ltd plans to set up truck and bus manufacturing facility in Malur,

Karnataka, with an investment of Rs 974 crore (US$ 158.32 million). The facility is

expected to give employment to about 2,125 people.

Manufacturing companies in Japan continue to view India as the top destination for

investments—over China, Thailand, Vietnam, Brazil and Indonesia—in the next three

years, according to Mr Masanori Nakano, Consul General of Japan in Chennai.

Tata Motors-owned Jaguar Land Rover (JLR) has entered into an agreement with the

state of Rio de Janeiro to build a manufacturing plant in Brazil with an investment of Rs

4,626 crore (US$ 751.95 million).

JBM Auto has formed a joint venture (JV) with Italian bus maker BredaMenarinibus to

manufacture luxury buses in India. The Indo–Italian venture plans to set up a plant at

Kosi, near Faridabad in Haryana, and produce 2,000 buses every year initially, at an

investment of Rs 500 crore (US$ 81.27 million).

Mahindra & Mahindra (M&M) plans to develop the world's first hybrid technology that

can be deployed in vehicles with manual transmission and enhance fuel efficiency by

almost 20 per cent.

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Amtek Auto has signed an agreement to buy Germany-based Kuepper Group of

companies for about €200 million (US$ 272.73 million) in its second big European

acquisition in 2013.

Honda Cars India will use the Ennore Port to export cars to South Africa. The

infrastructure for car exports at Ennore Port is attractive and cost effective.

Government Initiatives

The Government of India plans to introduce fuel-efficiency ratings for automobiles to encourage

sale of cars that consume less petrol or diesel, as per Mr Veerappa Moily, Union Minister for

Petroleum and Natural Gas, Government of India.

The Union Budget 2013–14 added some incentives to the industry. The analysis by Deloitte on

the Union Budget highlighted the following points:

The period of concession available for specified part of electric and hybrid vehicles till

April 2013 has been extended up to March 31, 2015.

The basic customs duty (BCD) on imported luxury goods such as high-end motor

vehicles, motor cycles, yachts and similar vessels was increased. The duty was raised

from 75 per cent to 100 per cent on cars/motor vehicles (irrespective of engine capacity)

with CIF value more than US$ 40,000; from 60 per cent to 75 per cent on motorcycles

with engine capacity of 800 cc or more and on yachts and similar vessels from 10 per

cent to 25 per cent.

In addition, an increase in excise duty from 27 to 30 per cent has been allowed for SUVs

with engine capacity exceeding 1,500 cc, while excise duty was decreased from 80 to 72

per cent, in case of SUVs registered solely to be used for taxi purposes.

An exemption from BCD will be provided to lithium ion automotive battery for

manufacture of lithium ion battery packs for supply to manufacturers of hybrid and

electric vehicles.

The excise duty on chassis of diesel motor vehicles for transport of goods reduced from

14 per cent to 13 per cent.

The Government of India allows 100 per cent FDI in the automotive industry through automatic

route.

Road Ahead

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The vision of Automotive Mission Plan (AMP) 2006–2016 expects India, “to emerge as the

destination of choice in the world for design and manufacture of automobiles and auto

components with output reaching a level of US$ 145 billion; accounting for more than 10 per

cent of the gross domestic product (GDP) and providing additional employment to 25 million

people by 2016.”

With special focus on exports of small cars, multi-utility vehicles (MUVs), two and three

wheelers and auto components; the automotive sector’s contribution to the GDP is expected to

double reaching a turnover worth US$ 145 billion in 2016, according to the AMP 2006–2016.

Latest update: January, 2014

RevenuesThe gross turnover of automobile manufacturers in India expanded at a compound annual growth rate (CAGR) of 17.7 per cent over FY07-11.

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Market SegmentsTwo wheelers segment accounted for about three quarters of the total automotive production in the country during FY13.

COMPANY PROFILE

Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.) is the world's largest manufacturer of

two - wheelers, based in India. In India, it has a market share of about 46% share in 2-wheeler

category. The 2006 Forbes 200 Most Respected companies list has Hero Honda Motors ranked at

108. On 31 March 2013, the market capitalisation of the company was INR 308 billion (USD

5.66 billion)

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Hero Honda started in 1984 as a joint venture between Hero Cycles of India and Honda of

Japan. In 2010, when Honda decided to move out of the joint venture, Hero Group bought the

shares held by Honda. Subsequently, in August 2011 the company was renamed Hero MotoCorp

with a new corporate identity.

In 2001, the company achieved the coveted position of being the largest two-wheeler

manufacturing company in India and also, the 'World No.1' two-wheeler company in terms of

unit volume sales in a calendar year. Hero MotoCorp Ltd. continues to maintain this position till

date.

HeroMotoCorp is now world’s largest manufacturer of two-wheelers. The company has

benefited from the demand shift to motorcycles, as it focuses solely on this product segment

(although has a product called Pleasure in Scooter segment). With fuel efficiency and riding

comfort as the main selling points, HMC has been able to address a wide market and post robust

sales growth even after its separation from the Japanese major Honda.

VISION

The story began with a simple vision – the vision of a mobile and an empowered India, powered

by its bikes. Hero MotoCorp Ltd., company’s new identity, reflects its commitment towards

providing world class mobility solutions with renewed focus on expanding company’s footprint

in the global arena.

MISSION

Hero MotoCorp's mission is to become a global enterprise fulfilling its customers' needs and

aspirations for mobility, setting benchmarks in technology, styling and quality so that it converts

its customers into its brand advocates. The company will provide an engaging environment for

its people to perform to their true potential. It will continue its focus on value creation and

enduring relationships with its partners.

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STRATEGY

Hero MotoCorp's key strategies are to build a robust product portfolio across categories, explore

growth opportunities globally, continuously improve its operational efficiency, aggressively

expand its reach to customers, continue to invest in brand building activities and ensure customer

and shareholder delight.

MANUFACTURING

Hero MotoCorp two wheelers are manufactured across three globally benchmarked

manufacturing facilities. Two of these are based at Gurgaon and Dharuhera which are located in

the state of Haryana in northern India. The third and the latest manufacturing plant are based at

Haridwar, in the hill state of Uttrakhand.

TECHNOLOGY

In the 1980's the Company pioneered the introduction of fuel-efficient, environment friendly

four-stroke motorcycles in the country. It became the first company to launch the Fuel Injection

(FI) technology in Indian motorcycles, with the launch of the Glamour FI in June 2006.

Its plants use world class equipment and processes and have become a benchmark in leanness

and productivity.

Hero MotoCorp, in its endeavor to remain a pioneer in technology, will continue to innovate and

develop cutting edge products and processes

DISTRIBUTION

The Company's growth in the two wheeler market in India is the result of an intrinsic ability to

increase reach in new geographies and growth markets. Hero MotoCorp's extensive sales and

service network now spans over to 5000 customer touch points. These comprise a mix of

authorized dealerships, service & spare parts outlets and dealer-appointed outlets across the

country.

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Supply chain management

As the Company prepares to produce a wider range of products, efforts are being taken to align

the supply chain and prime up its supplier base. During the year, the Company kick-started the

process of migrating its existing brands to the new brand. The exercise is expected to be

completed during 2012-13.

During the year, the Company also commenced the process of working with its vendors to

develop new parts. The Company’s Supply Chain Management function is built on three planks:

Cost

Quality

Sustainability

Tracking inventory cost effectively and efficiently is known to be a key source of competitive

advantage in the automobile industry. Hence, it comes as no surprise that cost leadership is the

Company’s prime focus area. Continual pressure on margins forced the Company and its supply

chain partners to find innovative and alternate ways to combat inflation. Considerable attention

was given to managing component inventory in the system, with double-digit growth in

inventory turnover. To align HR processes with the supply chain, top two HR consulting firms in

India are working with supply chain partners. The exercise is aimed at improving robustness of

people processes and resulting in a direct impact on quality, cost, productivity, delivery and

reliability. The move will enable supply chain partners move to the next orbit of operational

excellence. The Company initiated more than 30 quality improvement projects with supply chain

partners to provide better quality products to customers.

BRAND

The new Hero is rising and is poised to shine on the global arena. Company's new identity "Hero

MotoCorp Ltd." is truly reflective of its vision to strengthen focus on mobility and technology

and creating global footprint. Building and promoting new brand identity will be central to all its

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initiatives, utilizing every opportunity and leveraging its strong presence across sports,

entertainment and ground- level activation.

Termination of Honda joint venture

In December 2010, the board of directors of the Hero Honda Group has

decided to terminate the joint venture between Hero Group of India and Honda of Japan in a

phased manner. The Hero Group would buy out the 26% stake of the Honda in JV Hero

Honda. Under the joint venture Hero Group could not export to international markets (except Sri

Lanka) and the termination would mean that Hero Group can now export. Since the beginning,

the Hero Group relied on their Japanese partner Honda for the technology in their bikes. So there

are concerns that the Hero Group might not be able to sustain the performance of the Joint

Venture alone.

The Japanese auto major will exit the joint venture through a series of

off market transactions by giving the Munjal family—that held a 26% stake in the company—an

additional 26%. Honda, which also has an independent fully owned two wheeler subsidiary—

Honda Motorcycle and Scooter India (HMSI)—will exit Hero Honda at a discount and get over

$1 billion for its stake. The discount will be between 30% and 50% to the current value of

Honda's stake as per the price of the stock after the market closed on Wednesday.

The rising differences between the two partners gradually emerged as an

irritant. Differences had been brewing for a few years before the split over a variety of issues,

ranging from Honda's reluctance to fully and freely share technology with Hero (despite a 10-

year technology tie-up that expires in 2014) as well as Indian partner's uneasiness over high

royalty payouts to the Japanese company. Another major irritant for Honda was the refusal

of Hero Honda (mainly managed by the Munjal family) to merge the company's spare parts

business with Honda's new fully owned subsidiary Honda Motorcycle and Scooter India (HMSI).

As per the arrangement, it will be a two-leg deal. In the first part,

the Munjal family, led by Brijmohan Lal Munjal group, will form an overseas-incorporated

special purpose vehicle (SPV) to buy out Honda's entire stake, which will be backed by bridge

loans. This SPV would eventually be thrown open for private equity participation and those in

44

the fray include Warburg Pincus, Kohlberg Kravis Roberts (KKR), TPG, Bain Capital,

and Carlyle Group.

Honda will continue to provide technology to Hero Honda motorbikes until 2014 for existing as

well as future models.

Hero No. 1 and going strong

When Hero parted ways with Honda three years ago, there were a whole lot of people who

thought it was all over for the Munjals-promoted group.

If the numbers of 2013-14 are anything to go by, these naysayers would probably have to eat

their words. Hero MotoCorp wrapped up with sales of 6.25 million bikes and scooters,

considerably ahead of its former Japanese partner’s tally of 3.72 million units. Bajaj Auto

followed with 3.42 million with TVS Motor just short of the two million-unit mark (1.99

million).

Industry sources say Hero will sit pretty so long as its killer duo, the Splendor and Passion,

continue to catch the eye of the market. “Sure, they have been around for years but buyers don’t

seem to mind,” an executive from a rival two-wheeler company said. These two brands account

for nearly 60 per cent of Hero MotoCorp’s sales and are going as strong as ever.

Expansion

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Yet, there is no denying the fact that Honda is already proving to be a serious adversary. At the

time of its split with Hero, it only had one plant in Haryana which was churning out 1.6 million

bikes/scooters annually. Since then, the company has added Rajasthan, Karnataka and Gujarat to

its expansion plans. In the following weeks, its capacity will reach 4.6 million units and,

following the commissioning of the Gujarat facility, this will be close to six million units.

This remarkable buildup will happen in the next 18 months which means Honda will quickly

bridge the gap with Hero unless the latter manages to replicate this kind of a feverish pace. By

the end of 2015-16, Honda is targeting 40 per cent of the market and is likely to take the top slot

very soon thereafter.

It will also be interesting to see what Bajaj Auto has up its sleeve while the tug-of-war between

Hero and Honda intensifies in the coming months. The Pune-based company has reiterated that it

will focus on its Pulsar and Discover brands in motorcycles while leveraging KTM both here and

overseas. Bajaj will also continue to focus on building its exports business which could take up

50 per cent of its volumes in the next couple of years.

TVS Motor, likewise, is gradually building its numbers and will have reason to be pleased with

its scooter business. The Jupiter has quickly established itself as a brand to reckon with while the

more established Scooty is also in auto mode.

Indeed, scooters have been the biggest growth story of 2013-14 as evident in the portfolio of

Honda, Hero, TVS, Yamaha and Suzuki. The notable exception to this list is Bajaj, once

synonymous with the traditional geared scooter. The company is categorical that it will stick to

motorcycles which form a larger part of the global canvas. Will it change its mind about scooters

in the near future? This remains the million dollar question.

Directors

Founder Director and Chairman : Dr. Brijmohan Lall Munjal

Managing Director and CEO : Mr. Pawan Munjal .

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Board of Directors

Name of the person Nature of the Office

Mr. Sunil Kant Munjal Non Executive Director

Mr. Suman Kant Munjal Director

Mr. Paul Edgerley Non Executive Director

Mr. Pradeep Dinodia Director

Gen. (Retd.) V. P. Malik Director

Mr. Analjit Singh Director

Dr. Pritam Singh Director

Mr. M. Damodaran Director

Mr. Ravinath Director

Dr. Anand C.Burman Director

Dr. Brijmohan Lall Munjal

Mr. Munjal is the founder Director and Chairman of the Company and the

$3.2 billion Hero Group. He is the Past President of Confederation of Indian Industry (CII),

Society of Indian Automobile Manufacturers (SIAM) and was a Member of the Board of the

Country's Central Bank (Reserve Bank of India). In recognition of his contribution to

industry, Mr. Munjal was conferred the Padma Bhushan Award by the Union Government.

Corporate Governance

At Hero MotoCorp, it is the firm’s belief that the essence of Corporate Governance lies in the

phrase ''Your Company''. It is ''Your'' Company because it belongs to you - the shareholders. The

Chairman and Directors are ''Your'' fiduciaries and trustees. Their objective is to take the

business forward in such a way that it maximizes ''Your'' long-term value.

This Company is committed to benchmarking itself with global standards for providing good

Corporate Governance. It has put in place an effective Corporate Governance System which

ensures that the provisions of Clause 49 of the Listing Agreement are duly complied with.

47

The Board has also evolved and adopted a Code of Conduct based on the principles of Good

Corporate Governance and best management practices being followed globally.

GRADING POSITIVES

Market leadership, strong brand equity, professional management, high operating efficiency and

established scale economies. Strong financial profile characterized by healthy margins, high

profitability and cash generation. Potential upsides to our estimates: (1) HMCL sustains its

current market share, leveraging its brand equity, product performance and distribution strengths;

(2) industry growth exceeds our estimates over the medium term despite existing concerns on

macro-economic scenario; (3) HMCL betters the margins estimated by us via sustained business

growth and increases in operating efficiency even in the face of competitive and cost pressures.

GRADING SENSITIVITIES

Key sensitivities to our estimates include:

(1) Inflation in input costs not being neutralized by price increases because of competitive

pressures;

(2) High concentration on Executive segment;

(3) Intensifying competition from global players;

(4) Ability to develop in-house technical capability or form alternate technical tie-ups with

external institutions.

Company History - Hero Moto Corp

1956—Formation of Hero Cycles in Ludhiana(majestic auto limited)

48

1975—Hero Cycles becomes largest bicycle manufacturer in India.

1983—Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed

Shareholders Agreement signed

1984—Hero Honda Motors Ltd. incorporated

1985—Hero Honda motorcycle CD 100 launched.

1989—Hero Honda motorcycle Sleek launched.

1991—Hero Honda motorcycle CD 100 SS launched.

1994 – Hero Honda motorcycle Splendor launched.

1997—Hero Honda motorcycle Street launched.

1999 – Hero Honda motorcycle CBZ launched.

2001 – Hero Honda motorcycle Passion and Hero Honda Joy launched.

2002—Hero Honda motorcycle Dawn and Hero Honda motorcycle Ambition launched.

2003—Hero Honda motorcycle CD Dawn, Hero Honda motorcycle Splendor plus, Hero

Honda motorcycle Passion Plus and Hero Honda motorcycle Karizma launched.

2004—Hero Honda motorcycle Ambition 135 and Hero Honda motorcycle CBZ* launched.

2005—Hero Motocorp SuperSplendor, Hero Honda motorcycle CD Deluxe, Hero Honda

motorcycle Glamour, Hero Honda motorcycle Achiever and Hero Honda Scooter Pleasure.

2007—New Models of Hero Honda motorcycle Splendor NXG, New Models of Hero Honda

motorcycle CD Deluxe, New Models of Hero Honda motorcycle Passion Plus and Hero

Honda motorcycle Hunk launched.

2008—New Models of Hero Honda motorcycles Pleasure, CBZ Xtreme, Glamour, Glamour

Fi and Hero Honda motorcycle Passion Pro launched.

2009—New Models of Hero Honda motorcycle Karizma:Karizma – ZMR and limited edition

of Hero Honda motorcycle Hunk launched

49

2010—New Models of Hero Honda motorcycle Splendor Pro and New Hero Honda

motorcycle Hunk and New Hero Honda Motorcycle Super Splendor launched.

2011—New Models of Hero Honda motorcycles Glamour, Glamour FI, CBZ Xtreme,

Karizma launched. New licensing arrangement signed between Hero and Honda. In August

Hero and Honda parted company, thus forming Hero MotoCorp and Honda moving out of

the Hero Honda joint venture. In November, Hero launched its first ever Off Road Bike

Named Hero "Impulse".

2012-New Models of Hero Motocorp Maestro the Musculine scooter and Ignitor the young

generation bike are launched.

2013-Hero MotoCorp unveiled line-up of 15 updated products including Karizma R, ZMR,

Xtreme, Pleasure, Splendor Pro, Splendor iSmart, HF Deluxe ECO, Hero Motocorp

SuperSplendor, Passion Pro and Xpro, Glamour and Glamour FI etc. It also introduced

three new technologies- Engine Immobilizer in new Xtreme, Integrated Braking System

(IBS) in new Pleasure and i3S (Idle Stop and Start System) in new Splendor iSmart.

Awards & Recognitions on 2011

Two-wheeler Manufacturer of the Year award by Bike India magazine. Adjudged the

"Bike Manufacturer of the Year" at the Economic Times ZigWheels Car and Bike

Awards.

CNBC Awaaz - Storyboard special commendation for "Effective rebranding of a new

corporate entity" by CNBC Awaaz Consumer Awards

"Most Recommended Two-Wheeler Brand of the Year" award by CNBC Awaaz

Consumer Awards

Colloquy Loyalty Awards "Innovation in Loyalty Marketing International 2011" for Hero

Good Life

50

"Best Activity Generating Short or Long-Term Brand Loyalty" by the Promotion

Marketing Award of Asia Order of Merit for Hero Good Life

Ranked No 1 brand in the Auto (Two-Wheelers) category in the Brand Equity "Most

Trusted Brand" 2011 serve

• Profile of target customer

Hero MotoCorp basically targets the every each and segments of the market. So there are some

products like splendor, CD- dawn (rs40000-50000) they made for lower segment of the market

and glamour, passion, CBZ, karizma (rs above 50000) for the upper segment of the market. And

now they are trying to target the young people of the market.

India’s Hero MotoCorp, the world’s largest producer of motorcycles and scooters, has

announced its intention to expand globally, with plans to sell vehicles on three continents and

nearly double its unit sales within five years. The company, whose family shareholders bought

out its former partner Honda Motor this year, said it would invest about $1bn to expand

internationally in south-east Asia, Africa, and Central and Latin America.

• Customer Relationship Activity

For making a better relationship with customer they always use genuine parts in their product.

And after selling they have the services and maintenances. Their constant endeavor is to support

the company's mandate of providing highest level of customer satisfaction by taking good care of

customer’s two-wheeler service and maintenance through their vast network of more than 2100

committed dealers and service outlets spread across the country.

Apart from that hero motocorp focused on cleanliness and other aesthetics of the service stations

and add such air conditioned waiting area, internet surfing, coffee shops etc to enhance the in

house experience of the customers at those “customer touch point”. To ensure that millions of

customers in the rural area are not left waiting for adequate service as it is impossible for the

company to introduce service station at every nook and corner of the country, mobile service

51

stations are regularly arranged with prior intimation to public about the rout that the mobile

workshop would take when passing through that region so that customers can come and get their

two wheelers serviced. All these activities are aimed to increase the customer loyalty and thus

retaining customers.

Good life: Customer Loyalty Program

Good Life is a Customer Relationship Program introduced a decade ago, which Endeavour’s to

enhance customer satisfaction and initiate increased levels of member engagement.

The main objective of this Program is to make our customers our Brand Ambassadors to

generate referral sales and boost service visits.

The GoodLife Program has enabled the Company build a consolidated base of 10 million plus

loyal customers; in the process, a new distribution platform has emerged. GoodLife now

contributes a huge 14% to the Company’s overall sales (purely through referrals), in addition to

incremental sales. GoodLife has emerged as the largest Customer Relationship Program in India,

witnessing additions of 0.38 million members each month. During the year, the Program’s

member base shot up 16%, with new 4.51 million transactions being undertaken.

Besides aiming to increase the number of customers and volume of transactions, the Program

seeks to enhance revenue opportunities for dealers as well. Different levels of engagement have

been in-built into the Program with the aim of increasing its people engagement initiatives. Some

of these are: transaction-based rewards, exclusive event invites, personal accidental insurance,

service continuity bonus, transaction benefits on special occasions (birthdays, anniversaries),

quarterly newsletters and interaction through a program website.

The Program began with a member transaction booklet, a replica of the Passport Booklet, which

helps in engaging with customers. However, the Program has been e-enabled now to improve its

geographical reach and efficiency level. It runs on the backbone of a robust and engaging front-

end and a sound, solid and technical back-end. The Program includes customized technology,

combining a mix of Magnetic Swipe/Bar Code. Personalized Membership Cards are shared with

GoodLife members, which are easy to carry, transact and earn/redeem rewards. Online member

profiling and real-time customer feedback module (via questionnaires) are some more salient

52

features of the Program. During the year, GoodLife has been the recipient of several accolades

and awards on national and international platforms. Some of these were:

‘Order of Merit’ in PMAA awards 2011 under ‘Best Activity Generating Short or Long

Term Brand Loyalty’ category

Colloquy Award under Innovation in Loyalty Marketing (International) category

Qualified as ECHO Finalist (5th place) in 2011 DMA International ECHO™ Awards

competition Loyalty Award under Auto Sector

OPERATION RAMP-UP

With demand for bikes recording a stupendous growth of 15% during the year under review, the

Company’s capacities were severely strained. This prompted it to augment its capacity at its

three plants – up from 5.4 million units to 6.35 million – during the year. This was made possible

through a number of de-bottlenecking measures. For example, the Company’s plants were made

leaner by outsourcing non-critical processes and operations.

Besides this, a number of structural changes and alterations were made in its manufacturing

strategy to effectively implement its Sales Plan for 2012-13.

Major replacements were also executed in the paint and assembly shop, ensuring little or no

shutdown along the assembly line. Apart from the above measures, several innovative

technologies were inculcated to reduce operational costs. Some examples of these are:

A breakthrough technology for gear rolling was implemented for mass-production

Fine blanking, an alternate process of hobbling, was introduced for sprocket

components

Advanced cam grinding was introduced to increase productivity and control costs

The Company’s oldest plant at Dharuhera was in the limelight for two specific reasons:

Wage negotiations were concluded

Plant won TPM Excellence Award

53

The Company continues to set new industry benchmarks in the areas of energy conservation and

sustainability. Vapour absorption machines and heat recovery units were installed during the

year to utilize waste heat from Gas DGs for air-conditioning and pre-heating of hot water

generation. Other green initiatives included projects on waste water management, LED lighting

and solar power. These cost leadership and green projects yielded considerable savings to the

Company within a short period of time.

PORTFOLIO OF PRODUCTS

Hero MotoCorp offers wide range of two wheeler products that include motorcycles and

scooters, and has set the industry standards across all the market segments.

100cc

Bike category

SPLENDOR PLUS

SPLENDOR NXG

SPLENDOR PRO

PASSION PRO

PASSION XPRO

MAESTRO

PLEASURE

HF DAWN

HF DELUXE

125cc

Bike category

GLAMOUR

54

SUPER SPLENDOR

IGNITOR

Glamour PGM FI

150cc

Bike category

ACHIEVER

KARIZMA

KARIZMA ZMR

IMPULSE

HUNK

XTREME

55

Termination of Honda joint venture

In December 2010, the board of directors of the Hero Honda Group has decided to

terminate the joint venture between Hero Group of India and Honda of Japan in a phased manner. The

Hero Group would buy out the 26% stake of the Honda in JV Hero Honda. Under the joint venture Hero

Group could not export to international markets (except Sri Lanka) and the termination would mean that

Hero Group can now export. Since the beginning, the Hero Group relied on their Japanese partner Honda

for the technology in their bikes. So there are concerns that the Hero Group might not be able to sustain the

performance of the Joint Venture alone.

The Japanese auto major will exit the joint venture through a series of off

market transactions by giving the Munjal family—that held a 26% stake in the company—an additional

26%. Honda, which also has an independent fully owned two wheeler subsidiary—Honda Motorcycle and

Scooter India (HMSI)—will exit Hero Honda at a discount and get over $1 billion for its stake. The discount

will be between 30% and 50% to the current value of Honda's stake as per the price of the stock after the

market closed on Wednesday.

The rising differences between the two partners gradually emerged as an irritant.

Differences had been brewing for a few years before the split over a variety of issues, ranging

from Honda's reluctance to fully and freely share technology with Hero (despite a 10-year technology tie-up

that expires in 2014) as well as Indian partner's uneasiness over high royalty payouts to the Japanese

company. Another major irritant for Honda was the refusal of Hero Honda (mainly managed by the Munjal

family) to merge the company's spare parts business with Honda's new fully owned subsidiary Honda

Motorcycle and Scooter India (HMSI).

As per the arrangement, it will be a two-leg deal. In the first part, the Munjal

family, led by Brijmohan Lal Munjal group, will form an overseas-incorporated special purpose vehicle

(SPV) to buy out Honda's entire stake, which will be backed by bridge loans. This SPV would eventually be

56

thrown open for private equity participation and those in the fray include Warburg Pincus, Kohlberg Kravis

Roberts (KKR), TPG, Bain Capital, and Carlyle Group.

Honda will continue to provide technology to Hero Honda motorbikes until 2014 for existing as well as

future models.

Data Collection

1. Which type of Hero two wheeler model owned by you?

57

SPLENDOR 40%

GLAMOUR24%

KARIZMA 8%

MAESTRO8%

PLEASURE18%

IMPULSE2%

Using model

Interpretation:- From the above table it is inferred that, 40% of respondents are using splendor

and 24% of respondents using Glamour, 18% use pleasure ,8% use Karizma, 8% use Maestro

and only 2% of respondents use Impulse.

2. What is the source from which you found the advertisements about Hero Motors

NO Source Respondents

1 Television 20

58

Number Model Respondents

1 SPLENDOR 20

2 GLAMOUR 12

2 KARIZMA 4

3 MAESTRO 4

4 PLEASURE 9

5 IMPULSE 1

Total 50

2 Newspapers 12

3 Radio 6

4 Hoardings 12

Total 50

Television Newspapers Radio Hoardings02468

101214161820

Advertisements

Advertisements

Interpretation:

From the above table it is very clear that most of the respondents watched the advertisements

of Hero in Televisions i.e 40% and newspapers, Hoardings combinely 48% and radio is very

less i.e 12%.

3. Who influenced you to make the purchase of Hero Motors.

A) Friends B) Family C)Sales People

59

Influencers Response

Friends 21

Family 18

Sales People 11

Total 50

Friends Family Sales People0

5

10

15

20

25

Series1

Interpretation:

From the above interpretation it is observed that the purchase is mostly influenced by friends

42% , family 36% and by sales people is just 22% which is the least of the others.

4.What is your preferred capacity and color about your motor cycle.

A) 100cc B) 125cc C)150cc D)200cc

60

A) Red B) Black C)Blue D)Other

Capacity Response Colour Response

100cc 5 Red 12

125cc 14 Black 22

150cc 20 Blue 10

200cc 11 Others 6

Total 50 Total 50

100cc 125cc 150cc 200cc0

5

10

15

20

25

preference

preference

61

Red Black Blue Others0

5

10

15

20

25

Preferred color

Preferred color

Interpretation:

Capacity:

From above table it is observed that most of the two wheeler users are interested in 150cc

bikes i.e 40%, 125cc is 28%, 200 cc is 22%,100cc is just 10%

Colour:

Maximum people prefer black colour 44% followed by red 24% , blue and the others

62

5. Are you satisfied with the delivery time of your motor cycle.

A) Yes B) No

Response

Yes 36

No 13

Total 50

Yes No 0

5

10

15

20

25

30

35

40

delivery time

delivery time

Interpretation:

From the above table it is very clear that maximum respondents are satisfied with the

delivery time of the motorcycle i.e 72% and the remaining 28% were not satisfied by the

delivery time.

63

6. How do you think is the reliability of the hero vehicles.

A) Excellent B) Good C)Average D)poor

Response

Excellent 20

Good 22

Average 6

Poor 2

Total 50

ExcellentGood

AveragePoor

0

5

10

15

20

25

Reliability

Reliability

Interpretation:

From the above table it is very clear that maximum respondents feel that reliability of hero

Vehicles is excellent and good i.e 40% and 44% and 12% feel average and only 4% of

respondents feel its poor. Hero motors can take measures to improve reliability of its

vehicles to attract more customers and to satisfy the existing customers.

64

7. What is your level of satisfaction of service with Hero Motors

A) Excellent B) Good C) Average D)poor

Response

Excellent 20

Good 22

Average 6

Poor 2

Total 50

Excellent Good Average Poor0

5

10

15

20

25

service

service

Interpretation:

From the above table it is very clear that maximum respondents feel that they were satisfied

with the service offered by Hero Motors is excellent and good i.e. 40% and 44% and 12%

feel average and only 4% of respondents feel its poor. Hero motors can take measures to

improve the service to its customers for maintaining the maximum satisfied customers which

will bring in more customers and good word of mouth for Hero Motors.

65

8. What is the reason for your preference of Hero.

A) Quality B) Fuel Efficiency C) Economic D) Good service

Preferences Responses

Quality 10

Fuel efficiency 20

Economic 8

Good Service 12

Total 50

Quality Fuel efficiency Economic Good Service 0

5

10

15

20

25

Reason for preference

Reason for preference

Interpretation:

From the above table it can be concluded that maximum respondents prefer hero vehicles as

they were satisfied with the service offered by Hero Motors is excellent and good i.e. 40%

and 44% and 12% feel average and only 4% of respondents feel its poor. Hero motors can

take measures to improve the service to its customers for maintaining the maximum satisfied

customers which will bring in more customers and good word of mouth for Hero Motors.

66

9. From how long are you using the Hero vehicle.

A) <6months B) 6-9 months C)9-12 months D)more than year

Usage Responses

Less than 6 months 5

6-9 months 10

9-12 months 13

More that year 22

Total 50

Less than 6 months

6-9 months 9-12 months More that year0

5

10

15

20

25

usage period

usage period

Interpretation:

From the above table it can be concluded that maximum respondents i.e 44% using Hero

vehicles for more than a year and 26% of respondents using from 9-12 months, 20% using

from 6-9 moths and 10% are the new customers.

From this we can conclude that most of the hero vehicles users are using from long period .

so if hero motors concentrate on providing better service after the purchase to the customers

they will keep using the Hero vehicles for longer period.

67

10. How do you think Hero can improve on customer service .

A) Service in time B)well trained mechanics C)Less labor cost

Preference ResponseService in time 15Well trained mechanics 24Less labor cost 11Total 50

Service in time Well trained mechanics

Less labor cost0

5

10

15

20

25

30

Improving serivce

Improving serivce

Interpretation:

48% of respondents feel that the customer service at hero motors can be improved by training the mechanics and 30% feel by doing service in time, 22% feel it by providing the service for lesser costs.

Providing the satisfying service is very essential for any company to keep its customers satisfied. Hero must take care of all the three as they were important to increase service.

68

11.Which age group do you belong.

A)20-25 B)25-35 C) 35-45 D) above 45

Age group Responses20-25 years 525-35 1635-45 21Above 45 8Total 50

20-25 years10%

25-3532%

35-4542%

Above 4516%

Age groups

Interpretation:

The maximum users of the hero vehicles belong to the age group of 35-45 followed by 25-35, 42% belong to age group of 35-45 and 32% belong to 25-35, 10 % of respondents are between 20-25 years of age and 16 % are above 45.

From this is clear that the mid aged people are using the hero vehicles mostly. It has to produce different models for younger population.

69

12. Problems faced at the time of service.

A) High spare parts cost B)Low quality C) Delay in service D)No Problems

Problem faced ResponseHigh spare parts cost 10Low quality 10Delay in service 14No problems 16Total 50

High spare parts cost

Low quality Delay in service

No problems0

2

4

6

8

10

12

14

16

18

customer issues

customer issues

Interpretation:

It was very good that 32% customers not facing any problems with the service with the hero but there were some problems faced by the customers which should mostly concentrate. 20% feel the spare parts cost is high and 20% that the quality of service is low, 28% feel that the service is slow.

70

13. Will you recommend Hero Motors to others.

A) Yes B) No

Recommendation ResponseYes 41No 9Total 50

Yes82%

No18%

Recommendation to others

Interpretation:

From the above responses from the customers it is clear that 82% of the respondents would like to recommend Hero to others and only 18% don’t want to recommend which is less percentage but hero should have to take measures to convert the unsatisfied as satisfied customers who inturn recommend hero products to others.

71

14. Are you satisfied with the overall service of Hero.

A) Yes B) No

Recommendation ResponseYes 40No 10Total 50

Yes No0

5

10

15

20

25

30

35

40

overall satisfaction

overall satisfaction

Interpretation:

From the above responses from the customers it is clear that 80% of the respondents were satisfied with the overall service of the Hero motors and 20% were not satisfied hero should have to take measures to convert the unsatisfied as satisfied customers.

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SUMMARY OF FINDINGS

1. The Hero MotoCorp is leading the market. The difference is too big to cope up with, for

any manufacturer in short span. With proven products and many people having faith in

brand, it is quite a difficult task for others to take the Hero’s number one position.

2. Ability to understand customer’s needs and wants, maintenance cost is low.

3. Passion Pro, Splendor Plus, are the two models that Hero MotoCorp selling a big number

4. The TV promotions are more influence the customer behavior of two wheeler sector.

5. The purchase desiccations of consumers are influence by friends and family.

6. Blue, Red, Black color bike with 150 cc to 200cc is fast moving.

7. Most of the despondences are agree that the bikes are delivering proper time.

8. The service provide by Hero MotoCorp is satisfied by more than 70% of customers.

9. Brand name of Hero is still good in market after split with Honda

10. Quality, price, Brand image, Fuel efficiency is getting equal importance in satisfaction

11. The research showing that consumer want to get more service satisfaction.

12. Maximum of the customer likes to recommend Hero two wheeler to their friends, its

shows they are satisfied with the bike.

13.Hero MotoCorp wrapped up with sales of 6.25 million bikes and scooters, considerably

ahead of its former Japanese partner’s tally of 3.72 million units

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SUGGESTIONS AND RECOMMENDATIONS

It is very hard to hold the pulse of a customer in the market. Customer’s satisfaction is different

for different people at different situations;

Majority of the respondents were still unaware about different versions of Hero bikes.

Therefore I suggest the company personals should take initiative to create awareness

about these versions.

Few of the customers expressed concern over frequency of the maintenance & service

problems faced by their vehicle and expressed ‘high satisfaction’ over it. Therefore, I

suggest them to re look at the vehicle & re-develop in order to stop the frequency of these

problems.

Hero MotoCorp want to give more importance in there service part its include timely

service, and quality of service

Hero want to develop more promotion for there some models like sports bike and gear less

scooter

Hero bikes can concentrate to increase their export market

Hero MotoCorp Ltd should try to give more advertisements in news paper, bill boards in

that area to enable easy recall of the people for Hero MotoCorp Ltd.

Hero Motors can also increase models attracting the Indian youth.

74

CONCLUSION

Customer satisfaction is a marketing tool and a definite value added benefit. It is often perceived

by customers as important as the primary product or service your organization offers.

For making a better relationship with customer they always use genuine parts in their product.

And after selling they have the services and maintenances. Their constant endeavor is to support

the company's mandate of providing highest level of customer satisfaction by taking good care of

customer’s two-wheeler service and maintenance through their vast network of more than 2100

committed dealers and service outlets spread across the country.

Apart from that hero MotoCorp Ltd focused on cleanliness and other aesthetics of the service

stations and add such air conditioned waiting area, internet surfing, coffee shops etc to enhance

the in house experience of the customers at those “customer touch point”. To ensure that millions

of customers in the rural area are not left waiting for adequate service as it is impossible for the

company to introduce service station at every nook and corner of the country, mobile service

stations are regularly arranged with prior intimation to public about the rout that the mobile

workshop would take when passing through that region so that customers can come and get their

two wheelers serviced. All these activities are aimed to increase the customer loyalty and thus

retaining customers.

75

7

BIBILOGRAPHY

http://www.ibef.org/industry/india-automobiles.aspx

http://en.wikipedia.org/wiki/Hero_MotoCorp

http://www.heromotocorp.com/en-in/

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ANNEXURE

1.Which type of Hero two wheeler model owned by you?

A) Splendor B)Glamour c)Passion D)Karizma

E) Impulse F)Maestro G) Pleasure

2. What is the source from which you found the advertisements about Hero Motors

A) Television B)Newspapers C)Radio D)Hoardings

3. Who influenced you to make the purchase of Hero Motors.

A) Friends B) Family C)Sales People

4. What is your preferred capacity and color about your motor cycle.

A) 100cc B) 125cc C)150cc D)200cc

A) Red B) Black C)Blue D)Other

5. Are you satisfied with the delivery time of your motor cycle.

A) Yes B) No

6. How do you think is the reliability of the hero vehicles.

A) Excellent B) Good C)Average D)poor

7. What is your level of satisfaction of service with Hero Motors

A) Excellent B) Good C) Average D)poor

8. What is the reason for yout preference of Hero.

77

A) Quality B) Fuel Efficiency C) Economic

9. From how long are you using the Hero vehicle.

A) <6months B) 6-9 months C)9-12 months D)more than year

10. How do you think Hero can improve on customer service.

A) Service in time B) well trained mechanics C) Less labor cost

11. Which age group do you belong?

A) 20-25 B) 25-35 C) 35-45 D) above 45

12. Problems faced at the time of service.

A) High spare parts cost B) Low quality C) Delay in service D) No Problems

13. Will you recommend Hero Motors to others?

A) Yes B) No

14. Are you satisfied with the overall service of Hero?

A) Yes B) No

78