Objective:

The purpose of the study is related to analyse the channel management in the two wheeler segment of automobile industry. Here we analyse the way the channel are operating and the importance of channel in the two wheeler segment of Automobile industry. In the study, we also make an understanding of the strategy behind the way by which they have design the channel members.

Research methodologies:
The methodology adopted will be data collection from primary and secondary sources. The secondary data will be collected includes articles published in journals, publications, annual reports, websites relating to the subject under study will be used extensively. The primary data will be collected by visiting the dealers in the Mysore city. To collect the data from the dealers, a questionnaire will be prepared as a means of collecting the data. In addition to this, models and conceptual frameworks relevant to topic of discussion will also be considered.

Dimensions in channel management:

1. 2. 3. 4. 5. 6. 7. 8.

Role of channel Distribution objectives Types of marketing channel Developing the channel design Selection and appointment of channel Appraisal of channel members Channel evaluation Logistics management

Channel Management and Physical distribution management:

Channel management and physical distribution, though closely related, are quite distinct from each other. While physical distribution deals with logistics, warehousing, and inventory management. Channel management is much broader and is concerned with the entire process of setting up and operating the channel for meeting the company objectives.

Physical distribution:
Physical distribution refers to the actual physical flow of products. Physical distribution management is the development and operation of processes resulting in the effective and efficient physical flow of products Effective physical distribution management requires careful attention to five interrelated activities:

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1. 2. 3. 4. 5.

Order processing Inventory control Inventory location and warehousing Materials handling Transportation

Channel management:
Channel management refers to the way that a business or supplier of products uses various marketing techniques and sales strategies to reach the widest possible customer base. Under channel management, the company deals with the external organisation. The company uses these external organisations to achieve its objectives of profitability and customer satisfaction and in turn ensure that the channel members objectives are satisfied. Channel management aims at satisfying the three entities consumers, channel members and the company.

Consumers

Channel members

Company

Channel Management help the organization to maintain excellence in two ways By improving the effectiveness of their sales investments and interactions with customers; By simultaneously driving for efficiency in all channels and the associated back office/sales operations.

Channel management and sales and distribution management encompass how and to whom companies sell their products and services, the channels they use, and the back-office operations that support these efforts. It helps to address specific challenges in their market strategy, sales-force effectiveness, and other areas. Optimize return on sales investments: Channel management approach helps companies gain transparency on the performance of their route-to-market mix while identifying potential improvement areas and concrete ways to achieve them, in areas such as sales operations.

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Find and capture pockets of granular growth: Nearly every company with a dispersed customer base and a large number of sales transactions has considerable opportunity for organic growth if it looks at the right level of granularity. Channel management take a fine-grained view by geography, industry segment, and offerings to find the hidden pockets of growth and then tailor the strategies and approaches needed to capture them. Align sales channels in a multichannel world: Customers are increasingly moving across all channels to get what they want. Some of them demand increased services for certain transactions while others prefer low-touch. Channel management help companies form effective selling.

Defining a channel management strategy for each segment allows you to be more effective within each segment, while gaining efficiency at the same time. Still, maintaining brand consistency across all channel segments is critical to your long-term success. Few companies really comprehend channel management in a way that really helps them. Sales channels - being the conduits by which we distribute our products to the end-user come in many shape, from direct, to the web, to the traditional retail environment. And, were just doing whatever we can to get any business from any of them. But is that the most efficient and effective approach. Thats where Channel Management comes in. Channel management, as a process by which a company creates formalized programs for selling and servicing customers within a specific channel, can really impact your businessand in a positive way. To get started, first segment your channels by like characteristics (their needs, buying patterns, success factors, etc.) and then customize a channel management program that includes: Goals: Define the specific goals you have for each channel segment. Policies: Construct well-defined polices for administering the accounts within this channel. Be sure about the unique characteristics of each segment in mind, in defining policies for account set up, order management, product fulfilment, etc. Products: Identify which products in your offering are most suited for each segment and create appropriate messaging. Also, determine where your upsell opportunities lie. Sales/Marketing Programs: Design support programs for your channel that meet their needs, not what your idea of their needs are.

Automobile industry:
The Indian automobile Industry consists of five segment: commercial, vehicles, multi utility vehicles, and passenger cars, two-wheeler, three wheeler, tractors. The automobile industry in India the tenth largest in the world with the annual production of the approximately 2 million units expected to become one of the major global automotive industries in coming year. A number of the domestic companies produce to the automobile

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industry in India and growing presence of multinational investment to has increase in overall growth. De-licensing in 1991 has put the Indian automobile industry on a new growth track, attracting foreign auto gains to setup the production facilities in the country to take advantage of various benefits its offers. This took that Indian automobile production from the 5.3 million units in the 2001-02 to 10.8 million units in 2007-08. The other reason is to be attracting global auto manufacture to Indian are the country's large class population, growing earning power, strong technology capability and availability of trained manpower at competitive price.

Indian two wheeler industry:

The Indian two-wheeler industry recorded sales volumes of 3.4 million units in Q3, 2011121, a growth of 11.0% year on year. Although the year on year volume growth of the industry remained in double digits, the pace of growth during the last quarter was at its lowest gear in the last three years. The deceleration in growth was contributed mainly by the motorcycles segment which grew at a much lower rate of 9.2% year on year in Q3, 2011-12. Even as the scooters segment continued to post 20% year on year expansion. Overall, ICRA expects the domestic 2W industry to report a volume growth of 13% in 2011-12 as we expect growth to fade further in Q4, 2011-122 due to base effect. In an environment where the northward movement of inflation, fuel prices and interest rates has been the nemesis of the Indian automobile industry at large, the two wheeler industry has been the most resilient reflected in its healthy volume growth of 15.0% year on year , 2011-12, The growth has been supported by various structural positives associated with the domestic two wheeler industry including favourable demographic profile, moderate two wheeler penetration levels (in relation to several other emerging markets), under developed public transport system, growing urbanization and expected strong replacement demand, besides moderate share of financed purchases.

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Q1 Domestic 2009-10 2010-11 2011-12

Motorcycles Scooters Mopeds Total Domestic

Q2 2011-12

Q3 2009-10 2011-12 2010-11

Q1 2011-12

Q2 2011-12

Q3 2011-12

7,341,122 9,019,090 1,462,534 2,073,797 564,584 697,418

2,464,143 532,867 190,672 3,187,682

Q1

2,558,515 650,155 192,859 3,401,529

Q2

2,556,782 25.9% 659,643 186,472 27.4% 30.9%

22.9% 41.8% 23.5% 25.8%

17.5% 13.3% 21.0% 17.0%

Q1

15.4% 29.0% 7.0% 17.3%

Q2

9.2% 21.6% 2.6% 11.0%

Q3

9,368,240 11,790,305

3,402,897 26.0%
Q3 2009-10

Exports

2009-10

2010-11 2011-12 2011-12 2011-12

2010-11 2011-12 2011-12 2011-12

Motorcycles Scooters Mopeds Total Exports

1,102,978 1,480,983 30,125 6,905 52,312 6,295

482,566 20,949 1,461 504,976

492,408 24,696 3,478 520,582

448,090 23,950 2,796 474,836

13.6% 16.7% -5.4% 13.5%

34.3% 73.6% -8.8% 35.0%

27.1% 100.4% -44.0% 28.6%

31.7% 88.5% 159.2% 34.0%

21.8% 92.0% 188.0% 24.5%

1,140,008 1,539,590

Sales Volumes Analysis Motorcycles:

The domestic motorcycles segment recorded a volume growth of 9.2% YoY in Q3, 2011-12 and as has been the trend over the last several quarters, the >125cc segment of motorcycles grew much faster than the 75-125cc segment. With this, the contribution of the >125 cc segment to the total motorcycles segment increased from 26% in 2009-10 to 29% in 9m, 2011-12. Market Share Trends: The Indian motorcycles segment continues to be dominated by Hero MotoCorp which has maintained its market share at over 55% in the domestic motorcycles segment over the last five quarters . The top three players accounted for 89.5% of the industrys volumes in Q3, 2011-12 (92.0% in 2007-08), with Honda Motorcycles reclaiming its spot as the third largest player, a position which it had lost out to TVS in the previous quarter after having retained it since Q4, 2009-10. In the 75-125cc segment of motorcycles (that represented 71% of total motorcycles sales volumes in 9m, 2011-12), Hero MotoCorp continues to be a strong market leader with a share of 74.2% in 9m, 2011-12 (70.4% in 9m, 2010-11). In the >125cc segment of motorcycles, while Bajaj Auto continues to account for nearly half the segments volumes (49.1% in 9m, 2011-12), Yamaha has been the fastest growing having improved its market share from 8.1% in 9m, 2010-11 to 10.1% in 9m, 201112.

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Sales volume analysis of scooters:

Barring Q1, 2011-12, the growth in scooter segments sales volumes has generally outperformed that of the motorcycles segment, partly due to the formers smaller base. In Q3, 2011-12 too, the sales volumes of the domestic scooters segment at 660,000 units recorded a growth of 21.6%, higher than the 9.2% growth in motorcycle sales. With this, the share of the scooters segment in the total domestic two-wheeler volumes increased to 19.4% in Q3, 201112 from 17.6% in 2010-11. Market Share Trends: Overall, Honda Motorcycles continues to maintain its leadership position in the scooters segment through its flagship brand Activa (besides Aviator and Dio) enjoying a market share of 50.7% in Q3, 2011-12. While capacity shortfall at the companys plant at Manesar (Haryana) had restricted its volume growth in the recent past, the company began commercial production at its new plant at Tapukara (Rajasthan) in July 2011. This has allowed the company to consolidate its market position over the last two quarters. However, Hero Motocorps demonstrated success in improving market share (through its sole brand Pleasure) coupled with new scooter models proposed to be launched by Hero MotoCorp, TVS and Yamaha over the short to medium could imply shrinkage of market share gap between the market leader and others over time.

Hero Motocorp:
Hero is the brand name used by the Munjal brothers in the year 1956 with the flagship company Hero Cycles. The joint venture between India's Hero Group and Honda Motor Company, Japan has not only created the world's single largest two wheeler company but also one of the most successful joint ventures worldwide. During the 80s, Hero Honda became the first company in India to prove that it was possible to drive a vehicle without polluting the roads. The company introduced new generation motorcycles that set industry benchmarks for fuel thrift and low emission. A legendary 'Fill it - Shut it - Forget it' campaign captured the imagination of commuters across India, and Hero Honda sold millions of bikes purely on the commitment of increased mileage Having reached an unassailable pole position in the Indian two wheeler market, Hero Honda is constantly working towards consolidating its position in the market place. The company believes that changing demographic profile of India, increasing urbanization and the empowerment of rural India will add millions of new families to the economic mainstream. This would provide the growth ballast that would sustain Hero Honda in the years to come. As Brijmohan Lall Munjal, the Chairman, Hero Honda Motors succinctly points out, "We pioneered India's motorcycle industry, and it's our responsibility now to take the industry to the next level. We'll do all it takes to reach there. Hero Honda has a large sales and service network with over 3,000 dealerships and service points across India. Hero Honda has a customer loyalty program since 2000, called the Hero Honda Passport Program.
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The story of Hero Honda 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. 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.

Bajaj auto:
The Bajaj Group is amongst the top 10 business houses in India. Its footprint stretches over a wide range of industries, spanning automobiles (two-wheelers and three-wheelers), home appliances, lighting, iron and steel, insurance, travel and finance. The group's flagship company, Bajaj Auto, is ranked as the world's fourth largest two- and three- wheeler manufacturer and the Bajaj brand is well-known across several countries in Latin America, Africa, Middle East, South and South East Asia. Founded in 1926, at the height of India's movement for independence from the British, the group has an illustrious history. The integrity, dedication, resourcefulness and determination to succeed which are characteristic of the group today, are often traced back to its birth during those days of relentless devotion to a common cause. Jamnalal Bajaj, founder of the group, was a close confidant and disciple of Mahatma Gandhi. In fact, Gandhiji had adopted him as his son. This close relationship and his deep involvement in the independence movement did not leave Jamnalal Bajaj with much time to spend on his newly launched business venture. His son, Kamalnayan Bajaj, then 27, took over the reins of business in 1942. He too was close to Gandhiji and it was only after Independence in 1947, that he was able to give his full attention to the business. Kamalnayan Bajaj not only consolidated the group, but also diversified into various manufacturing activities. The present Chairman of the group, Rahul Bajaj, took charge of the business in 1965. Under his leadership, the turnover of the Bajaj Auto the flagship company has gone up from INR.72 million to INR. 120 billion, its product portfolio has expanded and the brand has found a global market. He is one of Indias most distinguished business leaders and internationally respected for his business acumen and entrepreneurial spirit.

TVS motors:
The TVS Group is one of India's largest industrial conglomerates. TV Sundram Iyengar and Sons Limited, established in 1911, is the parent and holding company of the TVS Group. TVS Motor Company is the third largest two-wheeler manufacturer in India and one among the top ten in the world, with annual turnover of more than USD 1 billion in 2008-2009, and is the flagship company of the USD 4 billion TVS Group. With a workforce of over 5000, the company has 4 plants - located at Hosur and Mysore in South India, in Himachal Pradesh,
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North India and one at Indonesia. The company has a production capacity of 300 thousand units a year. TVS and Sons also distribute Heavy Duty Commercial Vehicles, Jeeps and Cars. It represents premier automotive companies like Ashok Leyland, Mahindra and Mahindra Ltd., Fiat and Honda. It also distributes automotive spare parts for several leading manufacturers. TVS & Sons has grown into a leading logistics solution provider and has set up state-of-theart warehouses all over the country. It has also diversified into distributing Garage equipment that ranges from paint booths to engine analyzers and industrial equipment products.

Segment of motorcycles in automobile:

1-Economy segment:

2-Executive segment

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3-Premium segment:

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References:

www.tvsmotor.in/index.asp www.heromotocorp.com/en-in/ www.bajajauto.com/ www.mckinsey.com www.gtms-inc.com www.management-punditz.blogspot.in

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