A RESEARCH REPORT On MARKETING STRATEGY OF TWO WHEELER SEGMENT IN AUTOMOBILE INDUSTRY

SUBMITTED TO:KURUKSHETRA UNIVERSITY KURUKSHETRA

In partial fulfillment for the degree of M.B.A Session 2011-2013

UNDER THE GUIDANCE OF: Ms. NIDHI PUNJ (Assistant Professor) MBA Deptt.

SUBMITTED BY: NARESH DUTT MBA-IV Sem. Roll No. ------

Swami Devi Dayal Institute Of Engineering &Technology Barwala, Panchkula (Haryana)

SL NO.

CONTENTS
Certificate Declaration Acknowledgement Preface

PAGE NO. 3 4 5 6

Chapter 1

Introduction

7-51
Introduction of the company

Chapter 2

REVIEW OF LITERATURE

52-57
RESEARCH METHODOLOGY Objectives of research Data sources Scope of the study Data completion Limitation of the study

Chapter 3

58-61

Chapter 4 Data analysis & interpretation 54-77 Chapter 5

DATA ANALYSIS AND INTERPRETATION

62-77

FINDINGS & SUGGESSTIONS

78-80
CONCLUSION BIBLIOGRAPHY QUESTIONNAIRE ANNEXURES

Chapter 6

81-86

CERTIFICATE

This is to certify that the project titled Marketing Strategy of Two Wheeler Segment in Automobile Industry submitted in partial fulfillment of requirement for the degree of MASTER IN BUSINESS ADMINISTRATION From swami Devi Dayal Institute of Management Studies affiliated from KURUKSHETRA UNIVERSITY is an exclusive record of bonafied research project out by Naresh Dutt under my supervision and guidance. This is also certified that while carrying out this project work Marketing Strategy of Two Wheeler Segment in Automobile Industry was constantly in touch with faculty of department for necessary guidance and essential directions this work done by her has been found satisfactory commendable. I wish his great success in his career.

RESEARCH GUIDE

PRINCIPAL

ACKNOWLEDGEMENT

The preparation of this project would not have been possible without the support of any invaluable inputs from key individuals. This research report required hard work, sincerity and devotion which I tried my best to put in this project and in turn gained a lot of knowledge and confidence from this project. I am sincerely thankful to my research Guide, Ms. Nidhi Punj Assistant Professor (MBA) and Dr.Pk. Mehta (Principal ) for their valuable support and exceptional guidance throughout my project. I express my gratitude for their valuable insights and suggestions and continuous support without which this project could to have reached successful completion. I am also thankful to all the respondents who spared their valuable time for filling up the questionnaire and helped me out with this project. Finally, I would like to thank my parents and all my friends, who provided me with their constant support and took the pain to help me in completing the project.

NARESH DUTT

PREFACE

The research studies are of a great help in enhancing the knowledge of a person. Practical knowledge is a suffix to theoretical knowledge. Classroom lectures clarify the fundamental concepts of management. But classroom lectures must be correlated with the practical research situation. It is in this sense that the research project is made compulsory for the curriculum and has a significant role to play in the field of business management. Through this type of project one can understand the application of theory into practical. But it is only difficulties, which makes the success dears. In this project I have put a lot of effort to make it a success.

DECLARATION

I am Naresh Dutt student of MBA-2nd year roll no 1018 at SWAMI DEVI DYAL Institute of management studies. I do hereby declare that the final project report entitle Marketing strategy of two wheeler segment in automobile industry is my original work and the same has been submitted to any other institute for the award of similar/any other degree.

NARESH DUTT

CHAPTER: 1

INTRODUCTION

INTRODUCTION
7

Meaning of marketing strategy:

Marketing

strategy

consists

of

the

analysis,

strategy

development,

and

implementation activities in: Developing a vision about the market(s) of interest to the organization, selecting market target strategies, setting objectives, and developing, implementing, and managing the marketing program positioning strategies designed to meet the value requirements of the customers in each market target. Strategic marketing is a market-driven process of strategy development, taking into account a constantly changing business environment and the need to deliver superior customer value. The focus of strategic marketing is on organizational performance rather than a primary concern about increasing sales. Marketing strategy seeks to deliver superior customer value by combining the customer-influencing strategies of the business into a coordinated set of market-driven actions. Strategic marketing links the organization with the environment and views marketing as a responsibility of the entire business rather than a specialized function. Because of marketings boundary orientation between the organization and its customers, channel members, and competition, marketing processes are central to the business strategy planning process. Strategic marketing provides the expertise for environmental monitoring, for deciding what customer groups to serve, for guiding product specifications, and for choosing which competitors to position against. Successfully integrating cross-functional strategies is critical to providing superior customer value. Customer value requirements must be transformed into product design and production guidelines. Success in achieving high-quality goods and services require finding out which attributes of goods and service quality drive customer value. Marketing Strategy Process The marketing strategy analysis, planning, implementation and management process is described below. The strategic situation analysis considers market and competitor analysis, market segmentation, and continuous learning about markets. Designing marketing strategy examines customer targeting and positioning strategies,
8

marketing relationship strategies and planning for new products. Marketing program development consists of product, distribution, price, and promotion strategies designed and implemented to meet the value requirements of targeted buyers. Strategy implementation and management consider organizational design and marketing strategy implementation and control.

Stage 1: Strategic Situation Analysis Marketing management uses the information provided by the situation analysis to guide the design of a new strategy or change an existing strategy. The situation analysis is conducted on a regular basis after the strategy is under way to evaluate strategy performance and identify needed strategy changes. Market Vision Structure and Analysis. Markets need to be defined so that buyers and competition can be analyzed. For a market to exist, there must be (1) people with particular needs and wants and one or more products that can satisfy buyers needs, and (2) buyers willing and able to purchase a product that satisfies their needs and wants. A product-market consists of a specific product (or line of related products) that can satisfy a set of needs and wants for the people (or organizations) willing and able to purchase it. The term product is used to indicate either a physical good or an intangible service.

Analyzing product-markets and forecasting how they will change in the future are vital to business and marketing planning. Decisions to enter new product-markets, how to serve existing product-markets, and when to exist in unattractive productmarkets are critical strategic choices. The objective is to identify and describe the buyers, understand their preferences for products, estimate the size and rate of growth of the market, and find out what companies and products are competing in the market. Evaluation of competitors strategies, strengths, limitations and plans is also a key aspect of the situation analysis. It is important to identify both existing and potential competitors. Competitor analysis includes evaluating each key competitor. The analyses highlight the competitions important strengths and weaknesses. A key issue is trying to figure out what each competitor is likely to do in future. Segmenting Markets. Market segmentation looks at the nature and extent of diversity of buyers needs and wants in a market. It offers an opportunity for an organization to focus in business capabilities on the requirements of one or more groups of buyers. The objective of segmentation is to examine differences in needs and wants and to identify the segments (sub-groups) within the product-market of interest. Each segment contains buyers with similar needs and wants for the product category of interest to management. The segments are described using the various characteristics of people, the reasons that they buy or use certain products, and their preferences for certain brands of products. Likewise, segments of industrial productmarkets may be formed according to the type of industry, the uses for the product, frequency of product purchase, and various other factors. Each segment may vary quite a bit from the average characteristics of the entire product-market. The similarities of buyers needs within a segment enable better targeting of the organizations capabilities to buyers with corresponding value requirements. Continuous Learning about Markets. One of the major realities of achieving business success today is the necessity of understanding markets and competition. Sensing what is happening and is likely to occur in the future is complicated by competitive threats that may exist beyond traditional industry boundaries. For example, CD-ROMs compete with books. Stage 2: Designing Market-Driven Strategies
10

The strategic situation analysis phase of the marketing strategy process identifies market opportunities, defines market segments, evaluates competition, and assesses the organizations strengths and weaknesses. Market sensing information plays a key role in designing marketing strategy, which includes market targeting and positioning strategies, building marketing relationships, and developing and introducing new products. Market Targeting and Strategic Positioning. Marketing advantage is influenced by several situational factors including industry characteristics, type of firm (e.g., size), extent of differentiation in buyers needs, and the specific competitive advantage(s) of the company designing the marketing strategy. The core issue is deciding how, when, and where to compete, given a firms market and competitive environment. The purpose of the marketing targeting strategy is to select the people (or organizations) that management wishes to serve in the product-market. When buyers needs and wants vary, the market target is usually one or more segments of the product-market. Once the segments are identified and their relative importance to the firm determined, the targeting strategy is selected. The objective is to find the best match between the value requirements of each segment and the organizations distinctive capabilities. The targeting decision is the focal point of marketing strategy since targeting guides the setting of objectives and developing a positioning strategy. The options range from targeting most of the segments to targeting one or few segments in a product-market. The targeting strategy may be influenced by the markets maturity , the diversity of buyers needs and preferences, the firms size compared to competition, corporate resources and priorities, and the volume of sales required to achieve favorable financial results. Deciding the objectives for each market target spells out the results expected by management. Examples of market target objectives are desired levels of sales, market share, customer retention, profit contribution, and customer satisfaction. Marketing objectives may also be set for the entire business unit and for specific marketing activities such as advertising. The marketing program positioning strategy is the combination of product, valuechain, price, and promotion strategies a firm uses to position itself against its key competitors in meeting the needs and wants of the market target, the strategies and
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tactics used to gain a favorable position are called the marketing mix or the marketing program. Marketing Relationship Strategies. Marketing relationship partners may include end user customers, marketing channel members, suppliers, competitor alliances, and internal teams. The driving force underlying these relationships is that a company may enhance its ability to satisfy customers and cope with a rapidly changing business environment through collaboration of the parties involved. Relationship strategies gained new importance in the last decade as customers became more demanding and competition became more intense. Building long-term relationships with customers and value-chain partners offers companies a way to provide superior customer value. Although building collaborative relationships may not always be the best course of action, this avenue for gaining a competitive edge is increasing in popularity. Strategic partnering has become an important strategic initiative for many well known companies and brands. Many firms outsource the manufacturing of their products. Examples include Motorola cell phones, Calvin Klein jeans, Pepsi beverages, and Nike footwear. Strong relationships with outsourcing partners are vital to the success of these powerful brands. The trend of the 21 st century is partnering rather than vertical integration. Planning for New Products. New products are needed to replace old products because of declining sales and profits. Strategies for developing and positioning new market entries involve all functions of the business. Closely coordinated new-product planning is essential to satisfy customer requirements and produce products with high quality at competitive prices. New-product decisions include finding and evaluating ideas, selecting the most promising for development, designing the products, developing marketing programs, use and market testing the products, and introducing them to the market. The new-product planning process starts by identifying gaps in customer satisfaction. The differences between existing product attributes and those desired by customers offer opportunities for new and improved products. Stage 3: Market-Driven Program Development
12

Market targeting and positioning strategies for new and existing products guide the choice of strategies for the marketing program components. Product, distribution, price, and promotion strategies are combined to form the positioning strategy selected for each market target.

The marketing program (mix) strategies implement the positioning strategy. The objective is to achieve favorable positioning while allocating financial, human, and production resources to markets, customers, and products as effectively and efficiently as possible. Strategic Brand Management. Products (goods and services) often are the focal point of positioning strategy, particularly when companies or business adopt organizational approaches emphasizing product or brand management. Product strategy includes: (1) developing plans for new products, (2) managing programs for successful products, and (3) deciding what to do about problem products (e.g., reduce costs or improve the product). Strategic brand management consists of building brand value (equity) and managing the organizations portfolio for overall performance. Value-Chain, Price, and Promotion Strategies. One of the major issues in managing program is deciding how to integrate the components of the mix. Product,
13

distribution, price, and promotion strategies are shaped into a coordinated plan of action. Each component helps to influence buyers in their positioning of products. If the activities of these mix components are not coordinated, the actions may conflict and resources may be wasted. For example, if the advertising messages for a companys brand stress quality and performance, but salesperson emphasize low price, buyers will be confused and brand damage may occur. Market target buyers may be contacted on a direct basis using the firms sales force or by direct marketing contact (e.g., Internet), or instead, through a value-added chain (distribution channel) of marketing intermediaries (e.g., wholesalers, retailers, or dealers). Distribution channels are often used in linking procedures with end user household and business markets. Decisions that need to be made include the type of channel organization to use, the extent of channel management performed by the firm, and the intensity of distribution appropriate for the product or service. The choice of distribution channels influences buyers positioning of the brand. Price also plays an important role in positioning a product or service. Customer reaction to alternative prices, the cost of the product, the prices of the competition and various legal and ethical factors establish the extent of flexibility management has in setting prices. Price strategy involves choosing the role of price in the positioning strategy, including the desired positioning of the product or brand as well as the margins necessary to satisfy and motivate distribution channel participants. Price may be used as an active (visible) component of marketing strategy, or, instead, marketing emphasis may be on other marketing mix components (e.g., product quality). Advertising, sales promotion, the sales force, direct marketing, and public relations help the organization to communicate with its customers, value-chain partners, the public, and other target audiences. These activities make up the promotion strategy, which performs an essential role in communicating the positioning strategy to buyers and other relevant influences. Promotion informs, reminds, and persuades buyers and others who influence the purchasing process.

Stage 4: Implementing and Managing Market-Driven Strategy

14

Selecting customers to target and the positioning strategy for each target moves marketing strategy development to the action stage. This stage considers designing the marketing organization and implementing and managing the strategy. Designing Effective Market-Driven Organizations. An effective organization design matches people and work responsibilities in a way that is best for accomplishing the firms marketing strategy. Deciding how to assemble people into organizational units and assign responsibility to the various mix components that make up the marketing strategy are important influences on performance. Organizational structures and processes must be matched to the business and marketing strategies that are developed and implemented. Organizational design needs to be evaluated on a regular basis to assess its adequacy and to identify necessary changes. Strategy Implementation and Control. Marketing strategy implementation and control consist of: (1) preparing the marketing plan and budget; (2) implementing the plan; and (3) using the plan in managing and controlling the strategy on an ongoing basis. The marketing plan includes details concerning targeting, positioning, and marketing mix activities. The plan spells out what is going to happen over the planning period, which is responsible, how much it will cost, and the expected results (e.g., sales forecasts). The marketing plan includes action guidelines for the activities to be implemented, which do what, the dates and location of implementation, and how implementation will be accomplished. Several factors contribute to implementation effectiveness including the skills and commitment of the people involved, organizational design, incentives, and the effectiveness of communication within the organization and externally. Marketing strategy is an ongoing process of making decisions, implementing them, and tracking their effectiveness over time. In terms of its time requirements, strategic evaluation is far more demanding than planning. Evaluation and control are concerned with tracking performance and, when necessary, altering plans to keep performance on track. Evaluation also includes looking for new opportunities and potential threats in the future. It is the concerning link in the strategic marketing planning process. By serving as both the last stage and the first stage (evaluation
15

before taking action) in the planning process, strategic evaluation assures that strategy is an ongoing activity.

INTRODUCTION TO AUTOMOBILE INDUSTRY:

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THE INDIAN AUTOMOBILE INDUSTRY From the policy standpoint, the Indian automobile industry can be viewed in terms of the pre-1991 (before liberalization) . Post-1991 (after liberalization) phase. Pre-1991, Before Liberalization 1880's & early 1900's: About hundred years ago the first motorcar was imported and Import duty on vehicles was introduced. Indian Great Royal Road (Predecessor of the Grand Trunk Road) was conceived. First car brought in India by a princely ruler in 1898. Simpson & Co established in 1840. They were the first to build a steam car and a steam bus, to attempt motorcar manufacture, to build and operate petrol driven passenger service and to import American Chassis in India. Railways first came to India in 1850's. In 1865 Col. Rookies Crompton introduced public transport wagons strapped to and pulled by imported steam road rollers called streamers. The maximum speed of these buses was 33 kms/hr. From 1888 Motors Spirit attracted a substantial import duty. In 1919 at the end of the war, a large number of military vehicles came on the roads. In 1928 assembly of CKD Trucks and Cars was started by the wholly owned Indian subsidiary of American General Motors in Bombay and in 1930-31 by Canadian Ford Motors in Madras, Bombay and Calcutta. In 1935 the proposals of Sir M Visvesvaraya to set up an Automobile Industry were disallowed. 78

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1942 Hindustan Motors Ltd incorporated and their first vehicle was made in 1950. In 1944 Premier Automobiles Ltd incorporated and in 1947 their first vehicle was produced. In 1947 the Government of Bombay accepted a scheme of Bajaj Auto to replace the cycle rickshaw by the auto and assembly started in a couple of years under a license from Piaggio. Manufacturing Program for the auto and scooter was submitted in 1953 to the Tariff Commission and approved by the Government in 1959. In 1953 the Government decreed that only firms having a manufacturing program should be allowed to operate and mere assemblers of imported CKD units be asked to terminate operations in three years. Only seven firms namely Hindustan Motors Limited, Automobile Products of India Limited, Ashok Leyland Limited, Standard Motors Products of India Limited, Premier Automobiles Limited, Mahindra & Mahindra and TELCO received approval. M&M was manufacturing jeeps. Few more companies came up later. Government continued with its protectionism policies towards the industry. Automobile Products of India (API) and Enfield India had already commenced the manufacture of scooters, motorcycles, mopeds and autos from 1955. In 1956, Bajaj Tempo Ltd entered the Indian market with a program of manufacturing Commercial Vehicles, and Simpson for making engines. AIA&AIA (association of the component manufacturers) came into being in 1959 and Government approved Bajaj Auto Ltd's plans for domestic manufacture of Vespa scooters and granted permission to produce 6000 units annually 79.

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1960s: In sixties 2 and 3 Wheeler segment established a foothold in the industry. Escorts and Ideal Jawa entered the field in the beginning of sixties. Association of Indian Automobile Manufacturers formally established in 1960. Between 1955 and 1960 only API was producing Mopeds. During the first half of the sixties three companies namely Mopeds India Ltd (1965), SZUL Gwalior (1964) and Pearl Scooters Ltd (1962) entered the arena. Standard Motors Products of India Ltd. moved over to the manufacture of Light Commercial Vehicles in 1965. Escorts and Enfield closed their scooter division and continued only with Motorcycle manufacturing. Entire scooter market was occupied by Bajaj Auto Ltd. and API in the sixties. 1970`s: Major factors affecting the industry's structure were the implementation of MRTP Act, FERA and Oil Shocks of 1973 and 1979. During this decade there was not much change in the four-wheeler industry except the entry of Sipani Automobiles in the small car market. Girnar Scooters Ltd entered into the market in 1971 and its output was less than 5000 units until 1980. In the Two Wheeler Industry there were many entries during this decade. Scooter India established in 1972. In 1972 Kinetic Engineering entered the Industry with a licensed capacity of 100,000 units per annum. Oil Shock of 1973 quickened the process of dieselization of the Commercial Vehicle segment. Three other companies, namely, Kirloskar Ghatge Patil Auto Ltd, Indian Automotive Ltd and Sen& Pandit Engg products Ltd entered 80.

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The market during 1971-75. They ultimately withdrew in early eighties. Unlike Motorcycle and Scooter segments the Mopeds segment grew rapidly. In the late seventies there were many entries in the Moped Industry. Only two firms namely, Majestic Auto Ltd and Sundaram Clayton managed to survive after 1980. During the seventies the economy was in bad shape. This and many specific problems affected the Automobile Industry adversely. 1980's The period of liberalized policy and intense competition. Since the 80s, the Indian car Industry has seen a major resurgence with the opening up of Indian shores to foreign manufacturers and collaborators. First phase of liberalization announced and unfair practices of monopoly, oligopoly, etc slowly disappeared. It was beginning of Liberalization of the protectionism policies of the Government. Lots of new Foreign Collaborations came up in the eighties. Many companies went in for Japanese collaborations. Andhra Pradesh Scooters entered into collaboration with Piaggio for manufacture of Vespa model. Hindustan Motors Ltd. in collaboration with Isuzu of Japan introduced the Isuzu truck in early eighties. ALL entered into collaboration with Leyland Vehicles Ltd. for development of integral buses and with Hino Motors of Japan for the manufacture of W Series of Engines. Telco after the expiry of its contract with Daimler Benz indigenously improved the same Benz model and introduced it in the market. Government approved four new firms in the LCV market, namely, DCM, Eicher, Swaraj and Allwyn. They had collaborations with Japanese companies namely, Toyota, Mitsubishi, Mazda and Nissan respectively 81.

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The Two Wheeler market increased. Since 1982 the Government had permitted foreign collaborations for the manufacturing of Two Wheelers up to 100 cc engine capacity. Foreign Equity up to 40% was also allowed. In 1983 Maruti Udyog Ltd was started in collaboration with Suzuki, a Japanese firm. Other three Car manufacturers namely, Hindustan Motors Ltd., Premier Automobiles Ltd., Standard Motor Production of India Ltd. also introduced new models in the market. At the time there were five Passenger Car manufacturers in India - MarutiUdyog Ltd., Hindustan Motors Ltd., Premier Automobiles Ltd., Standard Motor Production of India Ltd., and Sipani Automobiles. Ashok Leyland Ltd. and Telco were strong players in the Commercial Vehicles sector. In 1983-84 Bajaj Tempo Ltd. entered into collaboration with Daimler-Benz of Germany for manufacture of LCVs. Important policy changes like relaxation in MRTP and FERA, delicensing of some ancillary products, broad banding of the products, modifications in licensing policy, concessions to private sector (both Indian and Foreign) and foreign collaboration policy etc. resulted in higher growth / better performance of the industry than in the earlier decades. Lohia Machines Ltd entered in collaboration with Piaggio of Italy. Kinetic Engineering Ltd. entered into Financial & Technical collaboration with Honda Motor Co. of Japan for 100 cc scooters. In the Motorcycle segment firms had shifted their emphasis from heavier models to lighter and fuel-efficient models. Indian market was flooded with new 100 cc models manufactured by different firms with Japanese Technology. In Moped segment there were 23 firms engaged in their production but the virtual oligopoly of Kinetic Engineering Ltd., SCL 82

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And Majestic Auto remained intact. This segment had less collaboration. Post-1991, After Liberalization, the Freedom to Grow Beginning with mid-1991 the government of India has made some radical changes in its polices bearing on trade, foreign investment, exchange rate, industry, fiscal affairs and so on. Mass Emission Norms were introduced for in 1991 for Petrol Vehicles and in 1992 for Diesel Vehicles. In 1991 new Industrial Policy was announced. It was the death of the License Raj and the Automobile Industry was allowed to expand. Further tightening of Emission norms was done in 1996. In 1997 National Highway Policy has been announced which will have a positive impact on the Automobile Industry. The Indian Automobile market in general and Passenger Cars in particular have witnessed liberalization. Many multinationals like Daewoo, Peugeot, General Motors, Mercedes-Benz, Honda, Hyundai, Toyota, Mitsubishi, Suzuki, Volvo, Ford and Fiat entered the market. Various companies are coming up with state-of-art models of vehicles. TELCO has diversified in Passenger Car segment with Indicia. Despite the adverse trend in the growth of the industry, it is resolutely trying to meet the challenges. Various issues of critical importance to the industry are being dealt with forcefully. In 1999 The Honble Supreme Court passed an order directing all car manufacturers to comply with Euro I emission norms (India 2000 norms) by the 1st of May 1999 in National Capital Region (NCR) of Delhi. The deadline was later extended to 1st June 1999. The 90s have become the melting point for the car industry in India. The consumer is king. He is being constantly wooed by both the Indian and foreign manufacturers. Though sales had taken an 83.

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Dip in the first few months of 1999; it is back to boom time. New models like Martis Classic, Alto, Station Wagon, Fords Ikon and the new look Mitsubishi Lancer have all been launched with an eye on the emerging market. 4.5) THE INDIAN AUTOMOBILE INDUSTRY AT PRESENT The Indian automobile industry has come a long way since the first car ran on the streets of Mumbai in 1898. The initial years of the industry were characterized by unfavorable government policies. The real big change in the industry, as we see it today, started to take place with the liberalization policies that the government initiated in the 1991. The liberalization policies had a salutary impact on the Indian economy and the automobile industry in particular. The automobile industry in the country is one of the key sectors of the economy in terms of the employment opportunities that it offers. The industry directly employs close to around 0.2 million people and indirectly employs around 10 million people. The prospects of the industry also has a bearing on the auto-component industry which is also a major sector in the Indian economy directly employing 0.25 million people. The automobile industry in India is gradually evolving to replicate those of developed countries. The trends are emerging in the industry across segments, namely, passenger cars, multi-utility vehicles, commercial vehicles, two-wheelers and tractors. The qualitative analysis of the various trends reveals that the industry offers immense scope even for allied industries and those looking at investing in the auto industry. The Indian automobile industry is undergoing a revolution of sorts. The vehicle war is on. And it's a fight to the finish. Within the span of a few years, the vehicle market has displayed an array 84

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Of models that were hitherto undreamt of. Ford, General Motors, Toyota, Volvo are household names today. Launch of a vehicle in one category spawns a war for the throne. The Icon, Accent and Baleno have been launched. The Wagon R, due next, is predicted to give tough competition to those already in that sector. Czech carmaker, Skoda, a subsidiary of German auto major Volkswagen, is introducing the Octavia. India's only Sports car, the San Storm, is all set to race into our hearts. Hero Motors and the Kinetic Group are both set to launch new models. In the three-wheeler market, after its eco-friendly Bijlee, Mahindra & Mahindra (M&M) plan to enter the market in a big way with their new diesel engine vehicle yet to be christened. Toyota has been to enter the multi-utility segment with the launch of its Quails. In these last years of the millennium, suffice it is to say that Indian cars will only grow from strength to strength. There are 48 companies in the Automobile Industry in India that comprise of all vehicles, including two and three-wheelers, Passenger Cars and multi-utility vehicles, light ,medium and heavy commercial vehicles, agriculture and earth moving machinery (table 4-1). Since the inception of the Automobile Industry in India till liberalization (1942 to 1991, in a fifty-year period) only 31 companies have been established in the Industry; while in post-liberalization period (in a tenyears period from 1992 till 2001), 17 companies entered to the Industry. Most of these new entrance all multinational companies that have joint venture with Indian companies. Multinational companies own more than 50% stake in their joint ventures, and sometimes this stake comes near to 100%. For example Italian Auto major, Fiat 85

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Auto Spa has 94.77% stake in Fiat India Limited. A few of these new companies are fully subsidiary of foreign companies like Yamaha Motor India Ltd which is 100% subsidiary of Yamaha Motor Company of Japan. Some Indian Automobile companies have several subsidiaries for manufacturing different vehicles, same as Either Ltd, Sonalika Group, Escorts Ltd and Mahindra & Mahindra. Either Ltd includes Either Tractors Ltd for tractors manufacturing and Royal Enfield Motors Limited in motorcycles section. Sonalika Group has International Tractors Limited for the manufacture of tractors (incorporated 1995) and Sonalika Agriculture Corporation (established in 1971) that has approximately 80% share in Indian market of farm machinery. Escorts Ltd also includes Escorts Tractors Ltd and Escorts JCB Ltd. Mahindra & Mahindra has Mahindra Nissan Allwyn and Gujarat Tractors Corporation as subsidiaries. Several companies in the Industry were declared sick during their life; because they have come under the Sick Industrial Companies (Special Provisions) Act, 1985. Thus they have been referred to the Board of Industrial and Financial Reconstruction (BIFR). Finally 26 companies in the industry have been listed in Bombay Stock Exchange (BSE); and only 18 of them were listed in 2001 or before that date and were not delisted of BSE or not referred to BIFR. One company also has eliminated because of its negative values for average operating income during the period of the study. So the remained companies (17 companies) have been considered as population of the study which has been explained in details in the methodology of research.

INTRODUCTION OF TWO-WHEELER INDUSTRY IN INDIA

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India is the second largest manufacturer and producer of two-wheelers in the world. It stands next only to Japan and China in terms of the number of two-wheelers produced and domestic sales respectively. This distinction was achieved due to variety of reasons like restrictive policy followed by the Government of India towards the passenger car industry, rising demand for personal transport, inefficiency in the public transportation system etc. The Indian two-wheeler industry made a small beginning in the early 50s when Automobile Products of India (API) started manufacturing scooters in the country. Until 1958, API and Enfield were the sole producers. Under the regulated regime, foreign companies were not allowed to operate in India. The motorcycles segment was no different, with only three manufacturers via Enfield, Ideal Jawa and Escorts. The two-wheeler market was opened to foreign competition in the mid-80s. And the then market leaders - Escorts and Enfield - were caught unaware by the onslaught of the 100cc bikes of the four Indo-Japanese joint ventures The industry had a smooth ride in the 50s, 60s and 70s when the Government prohibited new entries and strictly controlled capacity expansion. The industry saw a sudden growth in the 80s. The industry witnessed a steady growth of 14% leading to a peak volume of 1.9mn vehicles in 1990. In 1990, the entire automobile industry saw a drastic fall in demand. This resulted in a decline of 15% in 1991 and 8% in 1992, resulting in a production loss of 0.4mn vehicles. The total number of registered two-wheelers and three-wheelers on road in India, as on March 31, 1998 was 27.9mn and 1.7mn respectively. The two-wheeler population has almost doubled in 1996 from a base of 12.6mn in 1990. The last few years have seen a fundamental shift in preference from scooters and mopeds towards motorcycles. Motorcycle sales have grown at a CAGR of 27% for the last 6 years Vs Two Wheelers, which have grown at a CAGR of 11% over the same period. In 02-03, motorcycle sales have grown at 30% vs. 17% for two-wheelers. The faster growth rate of motorcycles has seen its share doubling from 38% in 97-98 to 76% in 02-03. Henceforth we do not expect motorcycles to grow at a rapid rate. However the growth rate for motorcycles in 03-04 is expected to be faster than overall 2-wheeler growth and we expect it to be around 12-15%. The chart shows the sale of
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motorcycle grow very fast with comparison to scooters and mopeds. Motorcycle share in two wheeler industries: - The chart shows that the share of motorcycle in two wheeler industries is increasing with very fast speed. In 1999 the share of scooter was more but from the mid of 1999 2000 the whole scenario is changed. INTRODUCTION OF HERO HONDA Hero Honda Motors Limited was established in January 19,1984. It started out, as a Joint Venture between Hero Group, the world's largest bicycle manufacturers and the Honda Motor Company of Japan, has today become the World's single largest two-wheeler Company. Hero Honda Motors Limited gave India nothing less than a revolution on two-wheels made even more famous by the 'Fill it - Shut it - Forget it ' campaign. Driven by the trust of over 5 million customers, The Hero Honda product range today commands a market share of 48% making it a veritable giant in the industry. Hero Honda is currently the worlds largest motorcycle manufacturer thanks to its fuel efficient, high quality products made in collaboration with Honda motorcycles, Japan. Hero, a name synonymous with two wheelers in India, began its journey around four decades ago. Starting as a manufacturer of bicycle components, Hero has today grown into a multi-unit, multi-product, geographically diversified group of companies. Like every success story, Hero's saga contains an element of spirit and enterprise of achievement through grit and determination, coupled with vision and meticulous planning. The Hero Group began with a simple philosophy: to provide excellent transportation to the common man, at a price he could easily afford. It is this spirit, which drives Hero even today; the dream of providing total satisfaction in all its spheres of activity. To consumers, in excellent products at an affordable price; to employees, in a fine quality of life and to business associates, in a total sense of belonging. A thorough understanding of fast-changing consumer behavior, new market segments and product opportunities, and a marketing mix sensitive to changing customer needs, form the core of Hero's marketing strategy and philosophy. Keeping the wheels of progress turning are the individual companies of the Hero Group. Each an independent profit centres. Each a success story in its own right. The two wheeler division of the Hero Group has already networked more than 3,500 dealer outlets, each with its complement of trained mechanics and workers.

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INTRODUCTION OF BAJAJ AUTO LIMITED It is one of India's top ten companies in terms of market capitalization and among the top five in terms of annual turnover. Established in 1945, it was incorporated as a trading company. From 1948 till 1959, it imported scooters and three wheelers from Italy and sold them in India. Today, Bajaj Auto Ltd (BAL), the largest two and three wheeler manufacturer in the country, has a dominating 40% market share in scooters with 18.5% in unguarded scooters, 25.2% in motor cycles, 8.3% in mopeds and a leading 78% market share in three-wheelers in FY2001. Bajaj Auto has been viewed as a scooter major but with the change in the structure of demand for 2-wheelers the company has tried to make its presence felt in this key market by steadily ramping up motorcycle capacities, by introducing new models and variants and pushing up marketing and sales. However the company is well behind Hero Honda in the motorcycle. The company has a wide array of models both in the two-stroke and four-stroke configurations. However, with the implementation of the latest emission norms, it is slowly moving away from two-stroke vehicles and converting them to four-stroke ones. The company is all set to increase its margins to double digits through concerted cost cutting, value engineering, gains from Total Productive Maintenance (TPM) and VRS. In the last four to five years, the two-wheeler market has witnessed a marked 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 twostroke segment to install catalytic converters. This has been replaced by 4-stroke motorcycles, which do not incur the additional cost of such converters and fierce competition led to a fall in price of certain models Bajaj Auto Ltd has been viewed as a scooter major. Nevertheless, in the past five years the company recognized the important role of motorcycles in its portfolio. The scooter market is predominantly located in the Northern and Eastern India and the rationalization of sales taxes to a uniform rate of 12% pushed the price of scooters by 6-8% without offering any perceived value advantage to the customer. The company posted total 2-wheeler sales of Rs1.05 million in 2000-01 as against Rs1.24 million in 1999-00. The motorcycle sales contributed to almost 50% of the total sales volumes accompanied
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by the decline in geared scooter sales, which contributed, to only 33% of sales volumes. The company has been introducing models in the middle end Rs.36, 000 Rs. 48,000 and high end segments vie; Rs. 48,000 and above but has found difficult to market such models in competition to Hero Honda models in the similar price category. However BAL is on its way to recapture the highly differentiated product market by becoming a flexible and market driven supplier of various models of two and three wheelers at specific price points. BAL has performed fairly in the current fiscal 2001-02 with the Net Sales going up by 3.06% to Rs19720 million HY ended September 2001 from Rs19133.3 mn in the corresponding period previous year.The total expenditure has gone up by 5.3% with the material cost accounting for the major increase. The company has posted a growth of 69% in PBT and the Net Profit has increased by 55% to Rs2644.7 mn from Rs1701.5 mn in the corresponding period last year. The Net Profit Margin has also improved by almost 50.7% from the half year ending FY2000-01. The employee cost has fallen but the company will be charging an equal expenditure of Rs 22.6 mn over the three quarters of the current fiscal amounting to Rs 67.8 mn as the VRS expenditure incurred in June 2001 COMPARISON BETWEEN HONDA AND BAJAJ The fight to dominate the premium motorcycle segment has reached epic proportions between Pune based Bajaj Auto Limited and Delhi based Hero Honda Limited. With the motorcycle market expected to grow at around 20 per cent in 2003-2004 as compared to the growth of 16-17 percent, which the industry averaged during the past five years, manufacturers are pulling out all stops to address the top end segments of the industry. According to Brij Mohan Lal, chairman Hero Honda, Talks are on with joint venture partner Honda Motors of Japan for the next generation engines and we are also planning some more powerful bikes and are investing Rs 100 crore in this project. Bajaj Auto has discovered the goldmine in the executive segment, through the success of its executive category the Pulsar that within a short span of time, has achieved sales of around 15,000 units per month. According to Bajaj, The 125cc world bike is expected to give company to Caliber-115 in the executive segment and this will be further supplemented by another bike to be introduced in the last quarter of the current fiscal. But with the first lap gone to Hero Honda, will Bajaj take pole position remains to be seen. Bajaj: Can it become a Hero (Honda)? Some time back Bajaj lost its crown as the largest selling two-wheeler company in India to Hero Honda. The loss was all the more appalling because while Bajaj is a multi product company manufacturing scooters (both geared & un geared), motorcycles
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and three wheelers, Hero Honda is only into motorcycles. The impact is also visible in the price performance of both Bajaj Auto & Hero Honda in last one year. It is clear from the chart below that Hero Honda outperformed Bajaj comprehensively. Relative Price Performance of Bajaj Auto v/s Hero Honda The undoing for Bajaj was that it could not read the market signals well. The most important being the shifting of the market to Motorcycles from scooters. Secondly even though the company had presence in Motorcycles it was no match to Hero Honda. Hero Honda with its fuelefficient and maintenance free four stroke bikes just swept the market. Bajaj with its range of two stroke vehicles could not survive the onslaught from Hero Honda. With a loss of its pride, Bajaj started working on measures to get back the number one position. The strategy was to stem the decline in scooter sales and ramp up the bike sales. To boost bike Bajaj has planned to aggressively launch a number of products so that it has presence over the entire gamut of the motorcycle segment. The major initiatives for motorcycles include Launching a stripped down version of Boxer, the Boxer CT. The bike is priced below Rs35000 and is expected to help the scooter owners graduate to bike. The bike does not face any stiff competition and thus should help the company shore up volumes. Launch of Caliber Croma, an upgraded version of Caliber to take on the Hero Hondas Splendor. The success of this model holds the key as Splendor accounts for around half the sales of Hero Honda. Launch of Eliminator a top end bike. The bike is priced upwards of Rs85000 and is not expected to generate huge volumes but the launch is significant, as it would remove Bajajs perception of being a laggard in technology and R&D backup. Launch of Acer, a 100 CC bike to take on the CD100 of Hero Honda. The company is shortly going to launch Pulsar a 100 CC indigenously developed vehicle. The bike is positioned against Passion, the recently launched bike from Hero Honda stable. Thus Bajaj will a presence right from the low end with Boxer CT to the luxury end with Eliminator. The results of these initiatives are visible in the sales figures of the first four months of the current fiscal. With a sales growth of 52% Bajaj has been able to outperform Hero Hondas growth rate of 31%. Bike Sales April - July 01 April - July 00 Growth (%) Bajaj 170,737 111,794 52.7 Hero Honda 410,175 313,348 30.9 A part from these the company has also been successful in reversing the decline in scooter sales. This is on back of launches of stripped down version of Chetek & Super. The strategy was to encourage the scooter customers, who could not meet their aspiration of buying a new scooter. The markets have taken notice of this with the stock appreciating by around 13% in last two weeks. However the company still
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has long way to go before it can anywhere near Honda. In fact according to companys own admission it will take them two years to reach the figure of 1,00,000 bikes a month. However considering the fact that pace of growth at Hero has slowed down Bajaj can definitely hope to narrow gap. Therefore in order to regain its crown its important that performance of scooters also looks up. While the company has been able to arrest the decline in scooters and in fact show growth at spurts, to be able to show continues growth looks difficult. In such a scenario regaining the top slot looks pretty difficult. Therefore it will be some time before it has a chance to become Hero. For the time being considering the various initiatives it has taken it has definitely become a side Hero. Market share of BAJAJ and HERO HONDA: NEED FOR THE STUDY I have chosen the topic, Behavior of rural consumer regarding the purchase of Motorcycle special reference to BAJAJ and HERO HONDA. Because the two-wheeler industry is the growing sector in India. Twowheeler industry is growing with very fast speed. Every day the new models of motorcycle are introducing in the market. BAJAJ and HERO HONDA are the major players of two wheeler industries. There is very hard competition between BAJAJ and HERO HONDA. So to know the position of the companies it is very necessary to know the behavior of consumer. So I choose this topic to know that which company has good position in the minds of consumer. And to know the factors which consumer consider at the time of purchase of motorcycle. By this study we can know the behavior of consumer regarding the two major companies of two wheeler industries.

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HISTORY OF BAJAJ
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Bajaj Auto limited is one of the largest two wheeler manufacturing company in India apart from producing two wheelers they also manufacture three wheelers. The company had started way back in 1945. Initially it used to import the two wheelers from outside, but from 1959 it started manufacturing of two wheelers in the country. By the year 1970 Bajaj Auto had rolled out their 100,000th vehicle. Bajaj scooters and motor cycles have become an integral part of the Indian milieu and over the years have come to represent the aspirations of modern India. Bajaj Auto also has a technical tie up with Kawasaki heavy industries of Japan to produce the latest motorcycles in India which are of world class quality The Bajaj Kawasaki eliminator has emerged straight out of the drawing board of Kawasaki heavy industries. The core brand values of Bajaj Auto limited includes Learning, Innovation, Perfection, Speed and Transparency. Bajaj Auto has three manufacturing units in the country at Akurdi, Waluj and Chakan in Maharashtra, western India, which produced 2,314,787 vehicles in 200506. The sales are backed by a network of after sales service and maintenance work shops all over the country. Bajaj Auto has products which cater to every segment of the Indian two wheeler market Bajaj CT 100 Dlx offers a great value for money at the entry level. Similarly Bajaj Discover 125 offers the consumer a great performance without making a big hole in the pocket.

PROFILE:
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Founder Year of Establishment Industry Business Group Listings & its codes Presence

Jamnalal Bajaj 1926 Automotive - Two & Three Wheelers The Bajaj Group BSE Code: 500490; NSE - Code: BAJAJAUTO Distribution Dominant Columbia, Indonesia. network presence in Guatemala, covers Sri Peru, 50 Egypt, countries. Bangladesh, Iran and

Lanka,

Joint Venture Registered & Head Office

Kawasaki Heavy Industries of Japan Akurdi Pune - 411035 India Tel.: +(91)-(20)-27472851 Fax: +(91)-(20)-27473398

Works

Akurdi, Pune 411035 Bajaj Nagar, Waluj Aurangabad 431136 Chakan Industrial Area, Chakan, Pune 411501

E-mail Website

rahulbajaj@bajajauto.co.in www.bajajauto.com

KEY PERSONS:

Board of Directors Rahul Bajaj Madhur Bajaj Chairman Vice Chairman & Whole-Time Director
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Rajiv Bajaj Sanjiv Bajaj D.S. Mehta Kantikumar R. Podar Shekhar Bajaj D.J. Balaji Rao J.N. Godrej S.H. Khan Mrs. Suman Kirloskar Naresh Chandra Nanoo Pamnani Manish Kejriwal P Murari Niraj Bajaj

Managing Director Executive Director Whole-Time Director Director Director Director Director Director Director Director Director Director Director Director

Committees of the Board Audit Committee S.H. Khan D.J. Balaji Rao J.N. Godrej Naresh Chandra Nanoo Pamnani Chairman

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Shareholders & Investors Grievance committee D.J. Balaji Rao J.N. Godrej Naresh Chandra S. H. Khan Chairman

Remuneration committee D.J. Balaji Rao S.H. Khan Naresh Chandra Chairman

Registered under the Indian Companies Act, VII of 1913 REGISTERED OFFICE WORKS Akurdi, Pune 411 035 Akurdi, Pune 411 035 Bajaj Nagar, Waluj Aurangabad 431 136 Chakan Industrial Area, Chakan, Pune 411 501

Bajaj Autos Ltd.

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Bajaj Auto Limited

Type Founded Headquarters Key people Revenue Net income Employees Website

Public 1945 Pune, India Rahul Bajaj (Chairman) Rs. 1,01,063 billion (2006) or USD 1.87 billion Rs. 17,016 billion ??? www.bajajauto.com

Bajaj Auto is a major Indian automobile manufacturer. It is India's largest and the world's 4th largest two- and three-wheeler maker. It is based in Pune, Maharashtra, with plants in Waluj near Aurangabad, Akurdi and Chakan, near Pune. Bajaj Auto makers motor scooters, motorcycles and the auto rickshaw.

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COMPANY'S HISTORY

Bajaj Auto came into existence on November 29, 1945 as M/s Bach raj Trading Corporation Private Limited. It started off by selling imported two- and threewheelers in India. In 1959, it obtained license from the Government of India to manufacture two- and three-wheelers and it went public in 1960. In 1970, it rolled out its 100,000th vehicle. In 1977, it managed to produce and sell 100,000 vehicles in a single financial year. In 1985, it started producing at Waluj in Aurangabad. In 1986, it managed to produce and sell 500,000 vehicles in a single financial year. In 1995, it rolled out its ten millionth vehicles and produced and sold 1 million vehicles in a year. Timeline of new releases

1971 - three-wheeler goods carrier 1972 - Bajaj Chetek 1976 - Bajaj Super 1977 - Rear engine Auto rickshaw 1981 - Bajaj M-50 1986 - Bajaj M-80, Kawasaki Bajaj KB100 1990 - Bajaj Sunny 1994 - Bajaj Classic 1995 - Bajaj Super Excel 1997 - Kawasaki Bajaj Boxer, Rear Engine Diesel Auto rickshaw 1998 - Kawasaki Bajaj Caliber, Legend(India's first four-stroke scooter) 2000 - Bajaj Safire
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2001 - Eliminator, Pulsar 2003 - Caliber115, Bajaj Wind 125, Bajaj Pulsar 2004 - Bajaj CT 100, New Bajaj Chetek 4-stroke with Wonder Gear, Bajaj Discover DTS-i

2005 - Bajaj Wave, Bajaj Avenger, Bajaj Discover 2006 - Bajaj Platina 2007 - Bajaj Pulsar-200

Scooters Bajaj Sunny Bajaj Chetek Bajaj Cub Bajaj Super Bajaj Wave Bajaj Legend Motorcycles

Kawasaki Eliminator Bajaj Pulsar Bajaj Kawasaki Wind 125 Bajaj Boxer Bajaj CT 100 Bajaj Platina Bajaj Caliber Bajaj Discover Bajaj Avenger
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Bajaj Pulsar 220 DTS-Fi

Upcoming Models

Bajaj Krystal Bajaj Blade Bajaj Sonic Bajaj XCD String

New Image The company, over the last decade has successfully changed its image from a scooter manufacturer to a two wheeler manufacturer, product range ranging from Scooterettes to Scooters to Motorcycle. Its real growth in numbers has come in the last 4 years after successful introduction of a few models in the motorcycle segment. The company is headed by Rahul Bajaj who is worth more than US$1.5 billion.

STRATEGIES USED BY BAJAJ AUTOMOBILE LTD

Bajaj claims that cost effectiveness has helped them to maintain their high profit margins. Bajaj claims to save hug on marketing and advertising cost. Its marketing budget to focused only on a few brands and aimed at existing customer to gives them greater confidence that they have bought a great product. Bajaj also has 32% stake in Austrian motorcycle maker KTM and has a operating alliance with Japanese motorcycle giant Kawasaki.
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 Bajaj not only has these brand made Bajaj a strong player in the high end market in India, but they also help as distributors for Bajaj bikes in foreign market.

INTRODUCTION OF HERO HONDA

India has the largest number of two wheelers in the world with 41.6 million vehicles. India has a mix of 30 percent automobiles and 70 percent two wheelers in the country. India was the second largest two wheeler manufacturer in the world starting in the 1950s with the birth of Automobile Products of India (API) that manufactured scooters. API manufactured the Lambrettas but, another company, Bajaj Auto Ltd. surpassed API and remained through the turn of the century from its association with Piaggio of Italy (manufacturer of Vespa). The license raj that existed between the1940s to1980s in India, did not allow foreign companies to enter the market and imports were tightly controlled. This regulatory maze, before the economic liberalization, made business easier for local players to
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have a sellers market. Customers in India were forced to wait 12 years to buy a scooter from Bajaj. The CEO of Bajaj commented that he did not need a marketing department, only a dispatch department. By the year 1990, Bajaj had a waiting list that was twenty-six times its annual output for scooters. The motorcycle segment had the same long wait times with three manufacturers; Royal Enfield, Ideal Jaws, and Escorts. Royal Enfield made a 350cc Bullet with the only four-stroke engine at that time and took the higher end of the market but, there was little competition for their customers. Ideal Jaws and Escorts took the middle and lower end of the market respectively. In the mid-1980s, the Indian government regulations changed and permitted foreign companies to enter the Indian market through minority joint ventures. The two-wheeler market changed with four Indo-Japanese joint ventures: Hero Honda, TVS Suzuki, Bajaj Kawasaki and Kinetic Honda. The entry of these foreign companies changed the Indian market dynamics from the supply side to the demand side. With a larger selection of two-wheelers on the Indian market, consumers started to gain influence over the products they bought and raised higher customer expectations. The industry produced more models, styling options, prices, and different fuel efficiencies. The foreign companies new technologies helped make the products more reliable and with better quality. Indian companies had to change to keep up with their global counterparts.

BOARD OF DIRECTORS

No. Name of the Directors 1 2 3 4 5 6 Mr. Brij mohan Lal Munjal Mr. Pawan Munjal Mr. Toshiaki Nakagawa Mr. Takao Eguchi Mr. Satyanand Munjal Mr. Om Prakash Munjal

Designation Chairman & Whole-time Director Managing Director Jt. Managing Director Whole-time Director Non-executive Director Non-executive Director
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7 8 9 10 11 12 13 14 15

Mr. Tatsuhiro Oyama Mr. Masahiro Takedagawa Mr. Narinder Nath Vohra Mr. Pradeep Dinodia Gen.(Retd.) Ved Prakash Malik Mr. Analjit Singh Dr. Pritam Singh Ms. Shobhana Bhartia Dr. Vijay Laxman Kelkar

Non-executive Director Non-executive Director Non-executive & Independent Director Non-executive & Independent Director Non-executive & Independent Director Non-executive & Independent Director Non-executive & Independent Director Non-executive & Independent Director Non-executive & Independent Director

Hero Honda Motorcycle Ltd.

Type Founded Headquarters

Public company BSE:HEROHONDA M January 19, 1984 in Gurgaon, Haryana, India Haryana, India Om Prakash Munjal, Founder

Key people

Mr. Brijmohan Lall Munjal, Mr. Toshiaki Nakagawa, Joint Managing Director Mr. Pawan Munjal, Managing Director Automotive Motorcycles, Scooters U$ 2.8 billion
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Chairman

Industry Products Revenue

Website

http://www.herohonda.com/site/home/home.asp

HERO HONDA HEADQUARTERS

Hero Honda Motorcycles Limited is an Indian manufacturer of motorcycles and scooters. Hero Honda is a joint venture that began in 1984 between the Hero group of India and Honda from Japan. It has been the world's biggest manufacturer of 2wheeled motorized vehicles since 2001, when it produced 1.3 million motorbikes in a single year. Hero Honda's Splendor is the world's largest selling motorcycle. Its 2 plants are in Dharuhera and Gurgaon, both in Haryana, India. It specializes in dual use motorcycles that are low powered but very fuel efficient. [Models] Bikes

Hero Honda Splendor Plus Hero Honda Passion Plus Hero Honda Karizma Hero Honda CBZ Hero Honda Super Splendor Hero Honda CD Dawn
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Hero Honda CD Deluxe Hero Honda Achiever Hero Honda Glamour Hero Honda Ambition

Hero Honda "Splendor" Model

COMPANY PROFILE
Hero, is the brand name used by the Munjal brothers in the year 1956 with the flagship company Hero Cycles. The two-wheeler manufacturing business of bicycle components had originally started in the 1940s and turned into the worlds largest bicycle manufacturer today. Hero is a name synonymous with two-wheelers in India today. The Munjals roll their own steel, make free wheel bicycle critical components and have diversified into different ventures like product design. The Hero Group philosophy is: To provide excellent transportation to the common man at easily affordable prices and to provide total satisfaction in all its spheres of activity. The Hero group vision is to build long lasting relationships with everyone (customers, workers, dealers and vendors). The Hero Group has a passion for setting higher standards and Engineering Satisfaction is the prime motivation, way of life and work culture of the Group.

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In the year 1984, Mr. Brijmohan Lal Munjal, the Chairman and Managing Director of Hero Honda Motors (HHM), headed an alliance between the Munjal family and Honda Motor Company Ltd. (HMC). HHM Mission Statement is: We, at Hero Honda, are continuously striving for synergy between technology, systems, and human resources to provide products and services that meet the quality, performance, and price aspirations of our customers. While doing so, we maintain the highest standards of ethics and societal responsibilities, constantly innovate products and processes, and develop teams that keep the momentum going to take the company to excellence in the new millennium. This alliance became one of the most successful joint ventures in India, until the year 1999 when HMC had announced a 100% subsidiary, Honda Motorcycle & Scooter India (HMSI). This announcement caused the HHM stock price to decrease by 30 percent that same day. Munjal had to come up with some new strategic decisions as, HMSI and other foreign new entry companies were causing increased intensity of rivalry for HHM. GROWTH The business growth of Hero Honda has been phenomenal throughout its early days. The Munjal family started a modest business of bicycle components. Hero Group expanded so big that by 2002 they had sold 86 million bicycles producing 16000 bicycles a day. Today Hero Honda has an assembly line of 9 different models of motorcycles available. It holds the record for most popular bike in the world by sales for Its Splendor model. Hero Honda Motors Limited was established in joint venture with Honda Motors of Japan in 1984, to manufacture motorcycles. It is currently the largest producer of Two Wheelers in the world. It sold 3 million bikes in the year 2005-2006. Recently it has also entered in scooter manufacturing, with its model PLEASURE mainly aimed at girls. The Hero Group has done business differently right from the start and that is what has helped them to achieve break-through in the competitive two-wheeler market. The Group's low key, but focused, style of management has earned the company plaudits amidst investors, employees, vendors and dealers, as also worldwide recognition.The growth of the Group through the years has been influenced by a number of factors: Just-in-Time The Hero Group through the Hero Cycles Division was the first to introduce the concept of just-in-time inventory. The Group boasts of superb operational efficiencies. Every assembly line worker operates two machines simultaneously to
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save time and improve productivity. The fact that most of the machines are either developed or fabricated in-house, has resulted in low inventory levels. In Hero Cycles Limited, the just-in-time inventory principle has been working since the beginning of production in the unit and is functional even till date.. This is the Japanese style of production and in India; Hero is probably the only company to have mastered the art of the just-in-time inventory principle. Ancillarisation An integral part of the Group strategy of doing business differently was providing support to ancillary units. There are over 300 ancillary units today, whose production is dedicated to Hero's requirements and also a large number of other vendors, which include some of the better known companies in the automotive segment. Employee Policy: Another Striking feature within the Hero Group is the commitment and dedication of its workers. There is no organized labor union and family members of employees find ready employment within Hero. The philosophy with regard to labor management is "Hero is growing, grow with Hero." When it comes to workers' benefits, the Hero Group is known for providing facilities, further ahead of the industry norms. Long before other companies did so, Hero was giving its employees a uniform allowance, as well as House Rent Allowance (HRA) and Leave Travel Allowance (LTA). Extra benefits took the form of medical check-ups, not just for workers, but also for the immediate family members. Dealer Network The relationship of Hero Group with their dealers is unique in its closeness. The dealers are considered a part of the Hero family. A nation-wide dealer network comprising of over 5,000 outlets, and have a formidable distribution system in place. Sales agents from Hero travels to all the corners of the country, visiting dealers and send back daily postcards with information on the stock position that day, turnover, fresh purchases, anticipated demand and also competitor action in the region. The manufacturing units have a separate department to handle dealer complaints and problems and the first response is always given in 24 hours. Financial Planning

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The Hero Group benefits from the Group Chairman's financial acumen and his grasp on technology, manufacturing and marketing. Group Company, Hero Cycles Limited has one of the highest labor productivity rates in the world. In Hero Honda Motors Limited, the focus is on financial and raw material management and a low employee turnover. Quality Quality at Hero is attained not just by modern plants and equipment and through latest technology, but by enforcing a strict discipline. At the Group factories, attaining quality standards is an everyday practice - a strictly pursued discipline. It comes from an amalgamation of the latest technology with deep-rooted experience derived from nearly four decades of hard labor. It is an attitude that masters the challenge of growth and change - change in consumers' perceptions about products and new aspirations arising from a new generation of buyers. Constant technology up gradation ensures that the Group stays in the global mainstream and maintains its competitive edge. With each of its foreign collaborations, the Group goes onto strengthen its quality measures as per the book. The Group also employs the services of independent experts from around the world to assist in new design and production processes.

Diversification
Throughout the years of enormous growth, the Group Chairman, Mr. Lal has actively looked at diversification. A considerable level of backward integration in its manufacturing activities has been ample in the Group's growth and led to the establishment of the Hero Cycles Cold Rolling Division, Munjal and Sunbeam Castings, Munjal Auto Components and Munjal Showa Limited amongst other component-manufacturing units. Then there were the expansion into the automotive segment with the setting up of Majestic Auto Limited, where the first indigenously designed moped, Hero Majestic,
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went into commercial production in 1978. Then came Hero Motors which introduced Hero Puch, in collaboration with global technology leader Steyr Daimler Puch of Austria. Hero Honda Motors was established in 1984 to manufacture 100 cc motorcycles. The Hero Group also took a venture into other segments like exports, financial services, information technology, which includes customer response services and software development. Further expansion is expected in the areas of Insurance and Telecommunication. The Hero Group's phenomenal growth is the result of constant innovations, a close watch on costs and the dynamic leadership of the Group Chairman, characterized by a culture of entrepreneurship, of right attitudes and building stronger relationships with investors, partners, vendors and dealers and customers.

Marketing strategy of hero Honda Company

Hero Honda claims that cost effectiveness has helped them to maintain their high profit margins. Hero Honda claims to save hug on marketing and advertising cost. Its marketing budget to focused only on a few brands and aimed at existing customer to gives them greater confidence that they have bought a great product. Hero Honda is not only has these brands made Hero Honda a strong player in the high end market in India. Hero Honda also helps as distributors for Hero bikes in foreign market.

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CHAPTER: 2

REVIEW OF LITERATURE
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51

REVIEW OF LITERATURE
Research conducted by Cuthbert son & Bridson (2006) highlights the specific marketing strategies employed by retailers to increase customer loyalty. The research presents the internet as a potential medium of driving loyalty in the consumers. Fiorito & Lafarge (1984) on the other hand have conducted a research on smaller retailers and what kind of marketing strategies they have employed to stay competitive in the retail industry. The two types of marketing strategies which are highlighted in the research as being commonly used by small retailers pertain to integrated marketing strategy and differential marketing. The focus of the companies in the retail industry is to effectively market and differentiate themselves while providing the customers with what they demand. The mission now is ruthless efficiency, eliminating the losers and refocusing budgets on genuinely profitable activities (Parsons, 1992). A study conducted by McMaster (1987), highlighted the importance of market strategies pertaining to branding which aid the retail business to initiate growth and positioning for itself in the market. Another significant research study which contributes to the knowledge available for the retail industry pertains to the different operations of the retailers in terms of the services they provide to niche markets. The limited service offering and marketing strategy for catering to niche markets is analyzed by Campo & Gijsbrechts (2004), who state that supermarkets should adjust their product and service offerings according to the locality in which they are operating. This enables them to customize their service for the customers employ loyalty and community support based marketing strategies. The study concludes that sales growth has been the marketing strategy demonstrating highest affinity to profit performance. Apart from this, increase in market share, capital-to-labor ratios, and the average inventory level are keys to evaluating and selecting retail marketing strategies which promise high profitability. (Cronin, 1985)

Marketing literature is considerably fragmented about strategies which should perform in adversity. For example, some gurus, consultants, theorist mention the importance of industry factors, some urge firms to focus on developing their
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dynamic capabilities and higher-order learning processes, some advocate a market orientation or some urge managers to carefully segment markets, focus on innovations, and develop brand equity (Hunt, 2009 each of these approaches may be viewed as conflicting recommendations in times of adversity. Companies need to change some of their strategies that may be used by a multi-disciplinary team to support organizations in overcoming the challenge (Atkinson et al, 2010). Some research in management discusses that recession period requires a turnaround strategy and turnarounds are of increasing relevance (Schendel, Patton, and Riggs 1976; Ham brick and Schuster 1983; Hofer 1980). Marketing plays a key role in a number of decision areas (Cardiff, 1975) and, although the best time to prepare for a recession is while the economys still flourishing (Lovelock, 1997), companies need to understand changed customers in recession. Some firms are caught by surprise when recession strikes and sliding profits may in panic lead to efforts to curtail costs, often taking such forms as laying off employees, cutting back service hours, skimping on maintenance, and eliminating value-added service features (Lovelock, 1997). The effective firms see this situation a chance as creating and manufacturing customers, rather than creating and manufacturing products or services in both recession and in prosperity (Christopher, 1975).In recession period, all phases of the marketing mix can contribute (Lynn, 1975). Companies may offer special guarantees and reasonable prices, arrange trial periods for machines, accept success-dependent payment, communicate tangible, visible benefits, develop new business models and promotion can be rational and spend more for advertising (Simon, 2009; Bohlen et al, 2010; Kotler and Caslione, 2009; Lynn,1975). Increasing interdependencies have been developed between firms and between markets and being market oriented has become the main source of competitive advantage (Mattson, 2009; Pelham and Wilson, 1996). People expect firms to address social problems linked to what they sell (Quelch and Jochz, 2009). In the recession is the time for firms to utilize its marketing departments for guidance and not only must companies reduce costs and generate greater efficiencies, they must also produce and market profitably the products (Cundiff, 1975). Harvard professor John Quelch advises for revising marketing plans in a downturn.
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Due to the small amount of targeted research on the marketing strategies of artists, Craft persons, and small craft or art-related businesses, research from related fields is useful in understanding the narrower topic. A review of research from the areas offline art Marketing and small business marketing, as well as general craft and artrelated business Strategy, uncovered three major themes that are relevant to the marketing of small craft and art-related businesses. The first theme is that craft and art-related businesses base their Marketing strategies on different goals and definitions of success than traditional profit centered businesses (Fill is, 2000, p. 131; Paige & Littre, 2002). Secondly, creativity in Marketing is important (Fill is, 2000; Paige & Littrell, 2002) and the Internet may be a Significant new area where artists and related businesses can apply their creative marketing Approaches (Clarke & Flaherty, 2002; Lovelace, 1998; Poon & Swatman, 1999; Torres, 2002, p. 236; Wilkinson, 1996). Finally, strategic alliance networks and general Networking between artists and between small craft or art-related businesses can help all of the parties involved develop their general marketing practices as well as increase access to Technologically-based marketing avenues (Clarke & Flaherty, 2002; Lovelace, 1998; Paige& Littrell, 2002; Torres, 2002).People who run craft and art-related business often start their business for different Reasons than other traditional profitcentered business owners. Intrinsic factors such as Personal satisfaction and the opportunity to elevate the craft tradition are some of the Criteria craft retailers use to define success (Paige & Littrell, 200, p. 1). Fills (2000) found that the typical arts and crafts microenterprise has been shown to take risks in terms of both the products itself and in the way in which the business is developed (p. 131). The dedication to creativity and more personal business goals leads to the development of unique marketing strategies. Paige and Littrells (2002) qualitative interviews of twelve craft Retailers in the southern highlands region of the U.S. found that the businesses commonly noted educating their customers about crafts, the artisans who produced the crafts, and the culture of the region (p. 318) as a main marketing strategy. Creative strategies like this example and others, such as targeting niche, artsexclusive markets (Clarke & Flaherty, 2002), and pooling resources with other artists or small arts-related businesses (Torres, 2002), can help the business owners to achieve their unique personal and art-based Business goals. This creativity and originality in marketing is important to the success of small art and craft businesses.
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To differentiate themselves from larger retailers who offer more standardized product assortments, smaller retailers perform better with more innovative, more unique, and higher quality product lines (Paige & Littrell, 2002, p. 316). The Internet may be a beneficial avenue in which to pursue these innovative arts marketing strategies. Unfortunately, not much research has yet been done on Internet marketing because the technology is new and rapidly changing. Even the research that was done just five to ten years ago is dated. But despite these limitations, many researchers suggest the Internet as an area where small businesses and artists can gain exposure to a larger audience (Clarke& Flaherty, 2002, p.149; Lovelace, 1998, Paige & Littrell, 2002, p. 320; Poon & Swatman, 1999; Wilkinson, 1996). Poon and Swatman (1999) also found that even though small Businesses may begin to use the internet because of the perceived benefits they only Believe their businesses will gain, as opposed to actual direct quantitative benefits, the business owners reported that they did realize actual benefits in the form of new opportunities and the useful function of the Internet for communication. Researchers have found that artists are sometimes disconcerted about technology use (Clarke & Flaherty, 2002, p. 146) and that small business owners lack the resources and knowledge to launch an Internet arm of their operations (Poon & Swatman, 1999).These obstacles can be overcome by the innovative implementation of strategic network alliances between artists or small arts-related businesses (Torres, 2002). A case study of a network of ceramic artists in Ireland conducted by Torres (2002) found that by collaborating as a network and hiring a project manager, the group was able to book advertising space, send press releases, and create a website, all of which none of the artists could not have accomplished on their own. Paige and Littrell (2002) also found that collaborative strategies, like networking among family, friends, and business peers, as well as Internet marketing were strategies utilized by craft retailers. Lovelace (1998) presents the Internet as a place to find a community of artists or craft people with which to network. As the Internet continues to become a more major marketing and commercial arena, small businesses are going to feel pressure to engage in ecommerce. If a small business has a high percentage of customers and competitors online, then not adopting Internet commerce will be a competitive disadvantage (Poon & Swatman, 1999, p. 13). Online communities or group sites produced by a group of artists or business owners engaged in a strategic alliance or network could be a less overwhelming step into the online world. Research on the marketing strategies used by both small businesses and art-related business has been conducted
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in many ways, including by interviews (Lovelace, 1998; Paige & Littrell, 2002; Wilkinson, 1996), surveys (Clarke & Laherty, 2002; Paige & Littrell,(2002), and case studies (Torres, 2002; Poon & Swatman, 1999). All of these methods pointed to three major themes that can help researchers to better understand the unique marketing challenges presented by small craft and art-related businesses: businesses centered around art or craft have different definitions of success and therefore need different marketing strategies; the Internet may help art-related businesses to implement creative marketing strategies; and, networking or forming strategic alliances may help art and craft business to find greater success in general marketing and on the Internet. Greater research is needed in the narrow field of marketing by independent artists and craft persons, and also in the ever-evolving field of art and craft marketing on the Internet. An additional area of research might explore how the personal goals of artistic expression, creativity, work flexibility, and overall happiness affect the marketing strategies employed by artists and craft persons. Researchers also need to explore the utilization of the vast potential of the Internet for global exposure and creation of community between artists and craft persons.

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CHAPTER: 3

RESEARCH METHODOLOGY

RESEARCH METHODOLOGY
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It is well known fact that the most important step in marketing research process is to define the problem. Choose for investigation because a problem well defined is half solved. That was the reason that at most care was taken while defining various parameters of the problem. After giving through brain storming session, objectives were selected and the set on the base of these objectives. A questionnaire was designed major emphasis of which was gathering new ideas or insight so as to determine and bind out solution to the problems.

OBJECTIVES OF THE RESEARCH

These objectives are the following: 1. To analyze the customer preference. 2. To know which manufacturer is providing better services. 3. Specific objectives: - For achieving the main objectives, we have some specific objectives that will help us for fulfillment of the project report. 4. To know the factors which affect the consumer behavior regarding the two wheeler purchase? 5. 6. 7. To Know the Advertisement source which more attract the consumer. To Know the Promotion Schemes which more attract the consumer? To know the future plans of the consumer.

8. To analyze after sales services of bikes. 9. To study the behavioral factors of consumers in motor bikes. 10. To suggest various factors to improve sales.
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DATA SOURCE
Research included gathering both primary and secondary data. Primary data is the first hand data, which are selected a fresh and thus happen to be original in character. Primary Data was crucial to know various customers and past consumer views about bikes and to calculate the market share of this brand in regards to other brands. Secondary data are those which has been collected by some one else and which already have been passed through statistical process. Secondary data has been taken from internet, newspaper, magazines and companies web sites.

RESEARCH APPROACH
The research approach was used survey method which is a widely used method for data collection and best suited for descriptive type of research survey includes research instrument like questionnaire which can be structured and unstructured. Target population is well identified and various methods like personal interviews and telephone interviews are employed.

SAMPLING UNIT
It gives the target population that will be sampled. This research was carried in Panchkula (Haryana).These were 90 respondents.

DATA COMPLETION AND ANALYSIS

After the data has been collected, it was tabulated and findings of the project were presented followed by analysis and interpretation to reach certain conclusions.

SCOPE

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My project was based on the Marketing Strategy of Two Wheeler Segment in Automobile Industry OF HERO HONDA, AND BAJAJ BIKES and data was taken in the Haryana state panchkula City.

LIMITATIONS

1. Research work was carried out in one Distt (panchkula) Haryana only the finding may not be applicable to the other parts of the country because of social and cultural differences.

2. The sample was collected using connivance-sampling techniques. As such result may not give an exact representation of the population. 3. Shortage of time is also reason for incomprehensiveness.

4. The views of the people are biased therefore it doesnt reflect true picture.

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CHAPTER: 4 DATA ANALYSIS OF INTERPRETATION

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ANALYSIS OF INTERPRETATION
Q1) Which bike do you have? Hero Honda Bajaj Any other 30 30 30

Hero Hon d a Hero Hon d a Bajaj An yOth er Bajaj An yOth er

INTERPRETATION: - Out of the sample size of 90 customers, 30 customers are of Hero Honda, 30 are of Bajaj and 30 customers of TVs bikes are taken into consideration.
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Q2) Which Model do you Have?

Hero Honda Splendor Passion Karizma Any other 13 5 2 10

Bajaj CT 100 Discover Pulsar Any other 5 11 10 4

TVS Flame Star City Apache Any other 4 9 7 10

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HERO HONDA

INTERPRETATION: - In Hero Honda mostly the customers are having splendor while the ratio of the customers using Passion, Karizma and other bikes are comparatively low. BAJAJ

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INTERPRETATION: - In Bajaj the customers are giving more preference to Discover and Pulsar models.

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Q3) In which family Income level do you Fall?

100000-200000 200000-300000 300000-400000 above 400000

22 45 23 10

INTERPRETATION: - The maximum numbers of customers that are using these bikes fall in the income group of 200000-300000. While this ratio is minimum in case of customers whose income level fall between 300000-400000

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Q4) For how long do you own a bike?

0-1 year 1-2 year 2-3 year above 3 year

34 29 26 11

INTERPRETATION: - It is observed that mostly the customers are having new bikes.

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Q5) For what purpose do you use your Motor Bike?

Hero Honda

Bajaj

TVS

Office Purpose

13

42

38

Personal purpose

17

15

27

Joy Purpose

10

18

10

Other

40

15

15

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INTERPRETATION:- The customers are using their bikes mostly for official and personal purpose.

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Q6) How do you come to know about this Motor Bike?

Hero Honda

Bajaj

TVS

Newspaper

28

33

22

Television

22

28

18

Magazine

16

28

Friends & Relative

37

13

22

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INTERPRETATION: - It is observed that the awareness of Hero Honda bikes mostly comes from friends while of Bajaj and TVS the awareness comes from newspapers and televisions.

Q7) Does Advertisement Influence your decision in choosing a Motor Bike? Yes No Cant say 65 15 10

INTERPRETATION: - Out of the sample size of 90 customers, 65 customers agrees with the fact that advertisements play a very significant role in influencing their
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behavior to choose the bike. On the other hand 15 customers do not agree to this fact. While remaining 10 customers are not sure about it.

Q8 Are you satisfied with the performance of the bike that you are currently having? Yes No Cant say 55 28 7

INTERPRETATION:- Out of the sample size of 90 customers, 55 customers says that they are satisfied with the performance of their bikes. On the other hand 28 customers are not satisfied with the performance of the bikes that they are having. While the remaining 10 customers are unable to say anything.

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Q9) Do you have full knowledge about Bikes before buying?

Hero Honda

Bajaj

Yes

42

34

No Cant Say

37 11

27 29

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INTERPRETATION:- It is observed that most of the customers are having full knowledge of the bike before purchasing.

Q10) Which Factor below Influence your decision?

Hero Honda Price Mileage Quality Resale Value Status symbol 17 28 11 12 32

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Bajaj 22 15 20 14 19

HERO HONDA

INTERPRETATION:- In Hero Honda bikes the mileage of the bike and the value that it adds to the status symbol of the customers influences the decision criteria of most of the customers.

BAJAJ

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INTERPRETATION:- In Bajaj bikes customers gets more influenced by the price and quality of the bike and also they think that it adds value to their prestige.

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Q11) How would you rate the following factors of Bikes with respect to different company?

Hero Honda Mileage Price Pick up Maintenance Look & Shape Brand Image 74% 68% 70% 58% 85% 53%

Bajaj 72% 65% 80% 62% 80% 55%

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INTERPRETATION: - It is observed that in rating of different features of different bikes people give maximum rating to the look and shape of the bike. At the second level they give their rating to the pick up. At the third level they rate mileage. And at the fourth level they give points to maintenance. At last they rate price and brand image.

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Q12) If new Bike with good features comes in, then would you like to change your bike? Hero Honda Yes No Cant say 10 16 4 Bajaj 16 11 3

INTERPRETATION:- It is observed that the customers of Hero Honda bikes are not ready to change their bikes even if a new bike comes in with good features. While majority of the customers of Bajaj and TVS are ready to change their bikes if new bike provides some good features to them.
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CHAPTER: 5 FINDINGS

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FINDINGS
During this research project I came in to contact with many customers who are having bikes. It has been found that in Hero Honda mostly the customers are having splendor while the ratio of the customers using Passion, Karizma and other bikes are comparatively low. In Bajaj the customers are giving more preference to Discover and Pulsar models and in case of TVS Bikes the customers are givig more preference to the other models rather than Flame,Starcityand Apache. The maximum numbers of customers that are using these bikes fall in the income group of 200000300000. It has been observed that the customers are using their bikes mostly for official and personal purpose. It is observed that the awareness of Hero Honda bikes mostly comes from friends while of Bajaj and TVS the awareness comes from newspapers and televisions. Out of the sample size of 90 customers, 65 customers agree with the fact that advertisements play a very significant role in influencing their behavior to choose the bike. On the other hand 15 customers do not agree to this fact. While remaining 10 customers are not sure about it. When the customers are asked that are they satisfied with the performance of their bikes then most of them agrees to the fact. Out of the sample size of 90 customers, 55 customers says that they are satisfied with the performance of their bikes. On the other hand 28 customers are not satisfied with the performance of the bikes that they are having. While the remaining 10 customers are unable to say anything. It is observed that most of the customers are having full knowledge of the bike before purchasing. It has been seen that In Hero Honda bikes the mileage of the bike and the value that it adds to the status symbol of the customers influences the decision criteria of most of the customers. In Bajaj bikes customers gets more influenced by the price and quality of the bike and also they think that it adds value to their prestige. While in case of TVS bike the economic price of the bikes influences the buying behavior of the customers. It is observed that in rating of different features of different bikes people give
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maximum rating to the look and shape of the bike. At the second level they give their rating to the pick up. At the third level they rate mileage. And at the fourth level they give points to maintenance. At last they rate price and brand image.

It is observed that the customers of Hero Honda bikes are not ready to change their bikes even if a new bike comes in with good features. While majority of the customers of Bajaj and TVS are ready to change their bikes if new bike provides some good features to them.

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CHAPTER: 6

Conclusion

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Conclusion

1. Most of the Flame, Apache, Pulsar, CBZ & Karizma are purchased by young generation 18 to 30 years because they prefer stylish looks and rest of the models of Hero Honda, TVS and Bajaj are purchased more by daily users who needs more average of bikes than looks. 2. Hero Honda is considered to be most fuel-efficient bike on Indian roads. 3. Service & Spare parts are available throughout India in local markets also. 4. While buying a motorcycle, economy is the main consideration in form of maintenance cost, fuel efficiency. 5. Majority of the respondent had bought their motorcycle more than 3 years.

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RECOMMENDATIONS

1. 2. 3. 4.

Bajaj should introduce some more models having more engine power. Hero Honda should think about fuel efficiency in case of upper segment bikes. More service centers should be opened. Maintenance cost and the availability of the spare parts should also be given due importance.

5. 6.

They also introduce some good finance/discount schemes for students. The price should be economic.

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BIBLIOGRAPHY

1. www.herohonda.com 2. www.google.com 3. www.bajaj.com 4. www.twowheeler.com 5. www.extrememachines.com

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QUESTIONNAIRE

NAME: - CONTACT NO . AGE:15-20 25.30 OCCUPATION:Businessman Student 20-25 Above 30 Employee Other

Q1) Which Bike do you have? Hero Honda Bajaj TVS

Q2) Which Model do you have? Hero Honda: Splendor Karizma Bajaj: CT 100 Pulsar TVS:Flame Star city Other Apache Other Passion Other Discover

Q3) In which Family Income do you Fall? 100000-200000 300000-400000

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200000-300000 Above 400000

Q4) For how long do you own a Bike? 0-1 year 2-3 year 1-2 year above 3 years

Q5) For what purpose do you use your Motor Bike? Office Purpose Joy Purpose Personal Purpose Other

Q6) How do you come to know about this Motor Bike? Newspaper Magazines Television Friends / Relatives

Q7) Are you satisfied with the performance of the bike that you are currently having? Yes No cant say

Q8) Does Advertisement Influence your decision in choosing a Motor Bike? Yes No cant say

Q9) Do you have full knowledge about Bikes before buying? Yes No cant say

Q10). Which factor below influence your decision? Price Resale Value Mileage Status Symbol Quality

Q11) How would you rate the following factors of bikes with respect to different companies? Hero Honda TVS
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Bajaj

Mileage Price Pick up Maintenance Look/Shape Brand Image

Q12) If new bike with good feature comes in, then would you like to change your bikes? Yes Q13) Any Suggestions for Company No Cant say

Date: (Signature)

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