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Exploratory researchsecond hand motor-bike preference in Bangalore City

An Exploratory Study on Second Hand Motor


Bike Preference in Bangalore City

Submitted in partial Fulfillment of the requirements for


MBA
Degree of Bangalore University

Submitted By
Manit Sony

Register Number:
03XQCM6056

M.P.Birla Institute of Management


Associate Bharatiya Vidya Bhavan
Bangalore-560001
2003-2005

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

PRINCIPALS CERTIFICATE

This is to certify that An Exploratory Study on Second Hand


Motor Bike Preference in Bangalore City has been prepared by
Mr. Manit Sony registration number 03XQCM6056, under the
guidance of Prof. Sumithra Sreenath, Faculty marketing.
MP Birla Institute Of Management, Associate Bharatiya Vidya
Bhavan, Bangalore.

Place: Bangalore
Malavalli
Date:

Dr. Nagesh S.
Principal

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

GUIDES CERTIFICATE

This is to certify that An Exploratory Study on Study on


Second Hand Motor Bike Preference in Bangalore City has
been prepared by Mr. Manit Sony registration number
03XQCM6056, under the guidance of Prof.Sumithra
Sreenath, Faculty marketing
MP Birla Institute Of Management, Associate Bharatiya Vidya
Bhavan, Bangalore.
This has not formed a basis for the award of any Degree/
Diploma by Bangalore University or any other university.

Place: Bangalore
Sreenath
Date:

Prof. Sumithra

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

STUDENT DECLARATION



I hereby declare that An Exploratory Study on Second

Hand Motor Bike Preference in Bangalore City has been


undertaken and completed by me under the valuable guidance of
Prof. Sumithra Sreenath, Faculty marketing in partial
fulfillment of degree of Master of Business Administration
(MBA) program is my original work and not submitted for the
award of any other degree, diploma, fellowship or other similar
title or prizes.



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03XQCM6056



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Reg No:

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

ACKNOWLEDGEMENT
I am extremely great full to Dr. Nagesh S. Mallavali,
Principal (MP Birla Institute Of Management) for permitting
me to carry out this study.
I am extremely great full to Prof. Sumithra Sreenath,

Faculty marketing Internal Guide (MP Birla Institute Of


Management) for permitting me to carry out this study.
I would like to express my profound gratitude to all those who
have helped me directly or indirectly in the course of this study.

BANGALORE
DATE:

03XQCM6056

Manit Sony

Reg. No.:

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


CONTENTS
PRELIMINARY PAGES OF THE REPORT:

PAGE:

TITLE PAGE.
DECLARATION BY THE STUDENT.
CERTIFICATE BY THE PRINCIPAL.
CERTIFICATE BY THE PROJECT GUIDE.
ACKNOWLEDGEMENT.
TABLE FO CONTENTS.
LIST OF TABLES ANDGRAPHS.
EXECUTIVE SUMMARY.
PART A:
A: BACKGROUND OF THE STUDY
INDIAN TWO WHEELER INDUSTRY
CURRENT SCENARIO
INDUSTRY STRUCTURE
INDUSTRY OWNERSHIP PATTERN
B: NEED AND IMPORTANCE OF THE STUDY
C: REVIEW OF LITERATURE
D: STATEMENT OF THE PROBLEM
E: OBJECTIVES
RESEARCH DESIGN
SAMPLING TECHNIQUE

3
10
13
14
18
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PART B:
SURVEY FINDINGS
PRESENTATION AND ANALYSIS OF DATA

28
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ANALYSIS

58

PART C:
SUGGESTIONS AND RECOMMENDATIONS
CONCLUSION

60
62

ANNEXURE
QUESTIONNAIRE
BIBLIOGRAPHY

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

List of Graphs and Tables


Serial Number
of Tables
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15

Contents
PRESENTATION AND ANALYSIS OF DATA
AGE GROUP OF THE RESPONDENT
INCOME OF THE RESPONDENTS
ATTRIBUTES THAT INFLUENCE CONSUMER
CONSUMER PREFERENCE OF MOTORBIKS
TAKING ATTRIBUTES INTO CONSIDERATION
CONSUMER PREFERENCE TOWARDS
MOTORBIKES CONCERNING FUEL MILEAGE
CONSUMER PREFERENCE TOWARDS MOTOR
BIKES CONCERNING POWER / PICK-UP
CONSUMER PREFERENCE TOWARDS MOTOR
BIKES CONCERNING PRICE
CONSUMER PREFERENCE TOWARDS MOTOR
BIKES CONCERNING PRE AND AFTER SALESSERVICE
CONSUMER PREFERENCE TOWARDS MOTOR
BIKES CONCERNING TECHNICALLY
SOPHISTICATED
OWNERSHIP
RESPONDENTS PURPOSE OF PURCHASE
MEET EXPECTATIONS
RESPONDENTS AWARENESS LEVEL
OFADVERTISEMENTS OF MOTORBIKES
LOCATION OF SHOWROOM AFFECTS PURCHASE
DECISION
CONSUMER RANKING OF MOTORBIKES

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

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Exploratory research second hand motor-bike preference in Bangalore City

Serial Number
of Graphs
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Contents
PRESENTATION AND ANALYSIS OF DATA
AGE GROUP OF THE RESPONDENT
INCOME OF THE RESPONDENTS
ATTRIBUTES THAT INFLUENCE CONSUMER
CONSUMER PREFERENCE OF MOTORBIKS
TAKING ATTRIBUTES INTO CONSIDERATION
CONSUMER PREFERENCE TOWARDS
MOTORBIKES CONCERNING FUEL MILEAGE
CONSUMER PREFERENCE TOWARDS MOTOR
BIKES CONCERNING POWER / PICK-UP
CONSUMER PREFERENCE TOWARDS MOTOR
BIKES CONCERNING PRICE
CONSUMER PREFERENCE TOWARDS MOTOR
BIKES CONCERNING PRE AND AFTER SALESSERVICE
CONSUMER PREFERENCE TOWARDS MOTOR
BIKES CONCERNING TECHNICALLY
SOPHISTICATED
OWNERSHIP
RESPONDENTS PURPOSE OF PURCHASE
MEET EXPECTATIONS
RESPONDENTS AWARENESS LEVEL
OFADVERTISEMENTS OF MOTORBIKES
LOCATION OF SHOWROOM AFFECTS PURCHASE
DECISION
CONSUMER RANKING OF MOTORBIKES

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

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Exploratory research second hand motor-bike preference in Bangalore City

Executive Summary
With per capita income in the country growing at a fair clip, growth prospects
of the Indian auto industry appear to be quite encouraging. The population is
moving towards the middle class or lower middle class this is resulting in the
higher disposable income.
From the secondary data collected showing the growth rate in purchase of
new first hand vehicles, thus the question arises, where does the used vehicle
go?

The report has been drawn up with the objective of identifying and
analyzing the key factors and attributes, which influence consumers
while deciding to purchase a second hand motorbike. The category of
motorbike chosen for the purpose of this study is fuel-efficient; four
stroke motorbikes in the range of 95 to 115 cubic-capacity engines.

The study starts with a brief insight into the evolution of the Indian
automobile industry, the two wheeler industry, motorbike industry and
the present structure. As mentioned earlier the study is on Consumers
preference towards second hand motorbikes, which includes the
attributes that influence the consumers the most and the second hand
motorbike that they prefer the most.

The methodology adopted for this study was conducted by interviewing


100 respondents through a questionnaire.

The respondents were

asked a series of questions through which an analysis has been made


on the key factors and attributes that influence and drive the
consumers preference towards a particular motorbike in their purchase
decision process.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

The motorbikes, which were chosen for the purpose of this study, as
mentioned above are fuel-efficient, four-stroke bikes in the range of 95
to 115 cubic capacity engines.

The bikes that fall in this category are

Hero Honda Splendor, TVS Victor, Kawasaki Caliber, Yamaha Crux


and Kinetic Boss. These bikes contribute to the highest sales in term
of revenue and numbers (motorbikes), in their respective companies,
regarding segments mentioned above.

The following chapters in this report will give a clear analysis,


conclusion and understanding, regarding the purpose of this study and
the objectives that have already been mentioned.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


PART A: INTRODUCTION
A. BACKGROUND OF THE STUDY
AUTOMOBILE INDUSTRY
Following India's growing openness, the arrival of new and existing models,
easy availability of finance at relatively low rate of interest and price discounts
offered by the dealers and manufacturers all have stirred the demand for
vehicles and a strong growth of the Indian automobile industry.
The data obtained from ministry of commerce and industry, shows high
growth obtained since 2001- 02 in automobile production continuing in the first
three quarters of the 2004-05. Annual growth was 16.0 per cent in AprilDecember, 2004; the growth rate in 2003-04 was 15.1 per cent. The
automobile industry grew at a compound annual growth rate (CAGR) of 22
per cent between 1992 and 1997. With investment exceeding Rs. 50,000
crores, the turnover of the automobile industry exceeded Rs. 59,518 crores in
2002-03. Including turnover of the auto-component sector, the automotive
industry's turnover, which was above Rs. 84,000
crores in 2002-03, is
estimated to have exceeded Rs.1,00,000 crores ( USD 22. 74 billion) in 200304.
Automobile Dealers Network in India
In terms of Car dealer networks and authorized service stations, Maruti leads
the pack with Dealer networks and workshops across the country. The other
leading automobile manufactures are also trying to cope up and are opening
their service stations and dealer workshops in all the metros and major cities
of the country. Dealers offer varying kind of discount of finances who in tern
pass it on to the customers in the form of reduced interest rates.
Major Manufacturers of Automobiles in India

Maruti Udyog Ltd.


General Motors India
Ford India Ltd.
Eicher Motors
Bajaj Auto
Daewoo Motors India
Hero Motors
Hindustan Motors
Hyundai Motor India Ltd.
Royal Enfield Motors
Telco
TVS Motors

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

DC Designs
Swaraj Mazda Ltd

Government has liberalized the norms for foreign investment and import of
technology and that appears to have benefited the automobile sector. The
production of total vehicles increased from 4.2 million in 1998- 99 to 7.3
million in 2003-04. It is likely that the production of such vehicles will exceed
10 million in the next couple of years.
Even Growth
Opposing the belief that the growth in automobile industry has catered only to
the top income-stratum of society, Growth of exports of 32.8 % in the first
three quarters of 2004-05, the fastest growth in volumes has come from
commercial vehicles as against passenger cars.
Between 1998-99 and 2003-04, output of commercial vehicles has grown 2.8
times compared to the 2.2 times increase in passenger cars.
Furthermore, two-wheeler output continues to dominate the volume statistics
of the sector. In 2003-04, for every passenger car turned out by the sector,
there were 7 two-wheelers produced. In the two wheeler segment, there is a
greater preference for motorcycles followed by scooters, with both production
and domestic sales of motorcycles increasing at faster rates than for scooters
in the current and previous years. However, mopeds have registered low or
negative growth. Export growth rates have been high both for motorcycles
and scooters.
THE KEY FACTORS BEHIND THESE UPSWING
Sales incentives, introduction of new models as well as variants coupled with
easy availability of low cost finance with comfortable repayment options
continued to drive demand and sales of automobiles during the first two
quarters of the current year. The risk of an increase in the interest rates, the
impact of delayed monsoons on rural demand, and increase in the costs of
inputs such as steel are the key concerns for the players in the industry.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


As the players continue to introduce new models and variants, the competition
may intensify further. The ability of the players to contain costs and focus on
exports will be critical for the performance of their respective companies.
The auto component sector has also posted significant growth of 20 per cent
in 2003-04, to achieve a sales turnover of Rs.30,640 crores (US$ 6.7 billion).
Further, there is a potential for higher growth due to outsourcing activities by
global automobiles giants. Today, this sector has emerged as another sunrise
sector.

INDUSTRY FEATURES
Presence of a large number of players especially in the passenger car and
two wheeler segments has ensured stiff competition.

Competition is based

both on technology and more importantly price. Key to success is therefore


value added products but at affordable prices.

Since customers of all

segments of the automobile industry are value conscious, factors such as fuel
efficiency and diesel engines are also key differentiators in the Indian market.
The Indian consumer is now having an increasing choice with large number of

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


vehicle models launched each year. In line with the growing income of the
Indian middle class the entry-level vehicle is moving up the ladder. The entry
level two wheeler has become the scooter instead of moped and the preferred
family vehicle is the more expensive motorcycle instead of scooter. Moped
and the preferred family vehicle is the more expensive motorcycle instead of
scooter. Mopeds, or low capacity engine vehicles, are now more stylish and
are preferred only by students. In the passenger car segment, the B class
vehicles, consisting of the more powerful hatchbacks are the fastest growing
segment, indicating and increasing affluence of an entry-level car buyer. The
capacity utilization, which also has a critical bearing on the profitability, has
been low for Commercial vehicle, Car and MUV segments while it has been
healthy for the two wheeler segment.
TRENDS IN OUTPUT PRICES
Competition ushered in by liberalization measures, has not only brought down
prices of all categories of products but also expanded the product range and
turned the Indian market into buyers market.

The WPI of all automobile

categories except mopeds was lesser than the all commodity WPI during the
period 1994-2004. The product range for both budget as well as value added
models has expanded., Compliance with

the increasingly stricter emission

norms has led to some increase in prices with moped segment being the
worst affected. Prices are expected to fall in the medium to long term, due to
increase in competition and growth in scale of operations due to continuous
growth, especially in the passenger vehicle segments.
AUTO POLICY 2003
The Government of India announced a new auto policy in March 2003. The
auto policy seeks to establish a globally competitive automotive industry in
India and to double its contribution to the economy by 2010. Some salient
features of the policy

are given below:

100% FDI allowed in the auto sector.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

Import tariff to be designed to give maximum fillip to manufacturing in


the country, without giving undue protection.

Anti-dumping duties to be put in place.

Production of small cars of length less than 380 cms to be encouraged


with the aim of making India as an Asian hub for export of small cars.

Fiscal incentives to be provided to MUV sector, and

Rebate in excise duties to be considered as incentive for expenditure


on R&D.

The industry has been adversely affected by the increasing cost of inputs,
especially steel, as well as the rise in oil prices during FY 04. The tractor
industry has been adversely affected by the set back in the agricultural sector
due to drought.
Brief details of 9-months performance, of select companies, is given in the
table below:
Company
TELCO
(Cars, CV)
Hero
Honda
(2
Wheelers)
Bajaj Auto
(2
Wheelers)
Mahindra
&
Mahindra
(MUV,
tractor, 3
wheeler)
TVS Motor
(2wheeler)
Ashok
leyland
(CV)

Net Sales
9 mths 9 mths FY 02
FY 04
FY 03
72487.4 58321.3 88948.0

Net Profit Rs. Mn


9 mths 9 mths FY 02
FY 04
FY 03
1625.4
-2162.7 -537.3

39463.8

32538.0

45394.9

4318.0

3103.7

4629.3

37894.9

32476.9

44027.0

3878.1

3726.4

5210.9

26090.7

23640.2

32730.8

968.6

47.6

1026.9

20118.1

13594.6

19304.8

901.1

303.9

539.1

20276.2

17491.9

26304.3

538.7

226.3

922.6

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


As can be observed, both sales and profits have shown improvement in all
cases with two wheeler companies being the outstanding performers.

LOOKING AHEAD
SIAM, the representative of automobile industry, has suggested various
changes in existing duty structure.

Reduction of Central excise Duty (CED) on all vehicles from 32% at


present to 16% either in one go or over a two-year period.

Reduction in CED on multi-axle commercial vehicle, to 8% from the


existing level of 16%.

Imposition of excise duty of 16% on unorganized vehicle body builders


to bring them on par with the players in the organized sector.

Retention of custom duty on other vehicles at current levels.

To provide an objective means to determine a CBU, SIAM proposes


that any imported vehicle where the value added is less than 30%
between the CIF price of import and the ex-factory price be called a
CBU.

Reduction in import duty for CNG engines, conversion kits and


components of electric vehicles to 5% and a 10% reduction in the duty
for raw materials.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

OTHER PROPOSALS

Allowance of 100% Cenvat(Central Value Added Tax) credit on capital


goods in the year of receipt itself rather than spread over two years.

Changes in definitions of Station Wagon and Job worker to avoid


confusion in the applicability of central excise and availability of Cenvat
credit.

Increased allocation of funds from the Automotive Cess fund for R&D
activities and extending the benefit to approved project undertaken by
the industry.

Depreciation on commercial vehicles should be increased to 50% for


one year and should be allowed to be availed of in the year of
purchase itself.

Valuation of imported goods should be the same by the Customs and


the income tax departments.

Wealth tax on vehicles to be abolished.

SIAM also proposes a scheme called Project modern fleet for improving
ambient quality of air in India and reduce the fuel cost to consumers. This is
to be achieved by the simple measure of forcing all commercial vehicles more
than 10 years old and private vehicles more than 15 years old, off road,
initially in the seven largest cities and then in all cities in India. The vehicles
are to be forced off the road, by increasing the road tax on older vehicles and
by increasing the insurance premium payable by such vehicles.

As an

incentive to the consumer, a 505 reduction in excise duties and sales tax
would be provided for consumers wishing to change to new, less polluting and
fuel efficient vehicles.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

INDIAN TWO WHEELER INDUSTRY

With per capita income in the country growing at a fair clip, growth prospects
of the Indian auto industry appear to be quite encouraging. Therefore its an
opportune time for an investor to stay invested in an auto company for the
longer term and benefit by way of attractive returns. Hero Honda, the world's
largest two wheeler manufacturer (volume terms), announced its results for
FY05. Though it achieved 27.2% growth in sales, profits grew by only 11.3%
YoY. Further, in the last quarter of FY04, there was a decline of 2% in profits,
though revenues were up over 15%. This is mainly because of significant rise
in the input cost vis-a-vis last year.
The company has emerged as one of the most successful players, much
ahead of its competitors an account of its superior and reliable product quality
complemented with excellent marketing techniques. the company has been
consistently addressing the growing demand for motorcycles

and has a

cumulative customer base of over 4 million customers which is expected to


reach 5 min mark with the rural and semi-urban segment being the new class
of consumers.

The Indian two wheeler contributes the largest volumes amongst all the
segments in automobile industry.

Though the segment can be broadly

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


categorized into 3 sub-segments viz., scooters, motorcycles and mopeds;
some categories introduced in the market are a combination of two or more
segments e.g. scooters and step-thrus. The market primarily comprises five
players in the two-wheeler segment with most of the companies having
foreign collaborations with well-known Japanese firms earlier. But most of the
companies are now planning 1005 subsidiaries in India.
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 585, the share of scooters declined drastically from 33% to 25%, while
that of mopeds declined by 25 from 195 to 17% during the

year 2000-01.

The Euro emission norms effective from April 2000 led to the existing players
in the two stroke segment to install catalytic converters. All the new models
are now being replaced by 4-stroke motorcycles. Excise duty on motorcycles
has been reduced from 32% to 24%, resulting in price reduction, which has
aided in propelling the demand for motorcycles. Fierce competition has also
forced players to cut prices of certain models. Hero Honda has been an
early-entrant in the 4 stroke segment of the two wheeler industry. With a
right mix of product styling and pricing the company helped garner a larger
market chunk of the 4 stroke market as compared to Bajaj Auto. A shifting
consumer preference towards motorcycles also enabled the fast growth of the
company in the last few years.
Competition has intensified over the last couple of years altering the dynamics
in the motorcycle segment with various

companies planning to cash in on

this spurt in demand by calling off their JVs like Suzuki Motors planning to
break off with TVS. Recently, Honda Corporation of Japan announced its
intentions to set up a 1005 subsidiary to manufacture scooters and
motorcycles. Other players in the two wheeler industry include Bajaj Auto
Ltd., Kinetic Motor Co Ltd., LML and Escorts Yamaha. Low interest regime

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


has helped in reducing cost of loans, which will help in boosting sales of 2
wheelers, since 80% of the two-wheelers are credit-stimulated.
HHML, a part of the Hero group, is a reputed name in the two-wheeler sector
and the management ha a rich experience in the business. HHML is a joint
venture with Honda Corporation, Japan and over the years has been the most
successful Indo-Japanese venture in two-wheelers.

The company has

invested in capex, in the past three years to cater to the increasing demand.
The company has been cash-rich and has been effectively utilizing its surplus
resources combined with prudent working capital management. Hero Honda
has set a target of 20% volume growth and 25% turnover growth for the fiscal
2001-02. The company has also set a turnover target of Rs. 200 min from
spare parts business in fiscal 2001-02 up from Rs. 145 min in 2000-01 and
the business is expected grow faster than bike sales for the next 5 yrs. It has
planned to bring in operational efficiencies with special focus on distribution,
dealerships and pricing and the successful implementation of SAP R/3 (ERPProgram- Project Synergy) has enabled proper planning and company wide
efficiency.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

CURRENT SCENARIO
1980s

Indian two wheeler markets liberalized.

Major Japanese two wheeler manufacturers make an entry into Indian


market through joint ventures/technical collaboration with Indian
players.

The major joint venture is HERO HONDA, TVS SUZUKI,

BAJAJ KAWASAKI, ESCORTS YAMAHA and KINETIC HONDA.

Motorcycle merges as area for growth.

Change in consumer

perception for motorcycles.


1990 - 1998

Scooters and mopeds loose sheen against motorcycles thus adding


more fuel to growth of motorcycles.

Four stroke motorcycles registering highest growth in the market.

Hero Honda grew by leap and bounds and emerges as the country
leader in two wheeler markets.

1998 till date

Bajaj forays into four stroke motorcycle market.

Emission norms came into force.

Breaking up of joint ventures.

Declining growth in motorcycle segment.

Entry of Kinetic Motors and LML into four strokes segments.

Chinese motorcycles making an entry into the market.

Consumer preference reaching a balance between fuel efficiency and


power.

Thus, Indian motorcycle market has evolved in the latter 89s of pure
monopoly of Hero Honda to differentiated oligopoly in the latter 90s as key
indicators points out, the industry will evolve into monopolistic competition
where a player having technological and marketing edge will have a bigger
pie of the market.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


INDUSTRY STRUCTURE

NUMBER

PRODUCT

UNDIFFERENTIATED

DIFFERENTIATED

OF SELLERS
ONE

PURE MONOPOLY

TWO

PURE OLIGOPOLY

DIFFERENTIATED
OLIGOPLY

THREE

PURE COMPETITION

MONOPLOISTIC
COMPETITION

SOURCE : MARKETING MANAGEMENT, (THE MILLENIUM EDITION) BY


PHILIP KOTLER, PUBLISHED BY ASOKE K. GHOSH ON JULY, 2000.
There are five basic types of industry structure on the basis of number of
sellers and ability to differentiate product. These are:
PURE MONOPOLY (ONE SELLER UNDIFFERENTIATED

PRODUCT):

Prices tend to be high, there is little advertising, service

levels tend to be low and barriers to entry often exist.


PURE OLIGOPOLY (FEW SELLERS UNDIFFERENTIATED

PRODUCT): Differentiation is difficult to achieve and prices are set at the


going rate. The only way in which to achieve a sustainable competitive
advantage is by means of cost reduction.
DIFFERENTIATED

OLIGOPOLY(FEW

SELLERS

Differentiation is achieved by

UNDIFFERENTIATED PRODUCT):

pursuing a strategy of quality, adding feature or styling. The extent to


which leadership or premium pricing can be achieved is the measure of
the measure of the success of the strategy.
MONOPOLISTIC

COMPETITION

UNDIFFERENTIATED PRODUCT):

FEW

SELLERS

Companies typically or particular

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


market segments where scope exists either for minimizing the degree of
direct competition or in which scope for premium pricing exist.
PURE COMPETITION (MANY SELLERS UNDIFFERENTIATED

PRODUCT): At this most extreme, there is no scope for differentiation


and prices are at the same level. Advertising is only worthwhile if it can
create a degree of psychological differentiation (where this feasible, the
market should be correctly labeled as monopolistically competitive).
Relative profit levels are directly determined by each companys ability to
manage cost.
During 1980s and early 90s Indian Motorcycle was of differentiated oligopoly.
There were few players in the market and market was segmented into Indian
players and Indo Japanese players.

Main point of differentiation of the

product was the fuel efficiency and power, or four strokes that were fuelefficient. Taking into account only four stroke segment, there was pure
monopoly of Hero Honda during this period as it was the only manufacturer of
four stroke motorcycles in the market.
In later 90s to till date, the Indian motorcycle market is shifting towards
monopolistic competition. It has attracted number of players in the market
and players are differentiating their offerings on styling, delivery, ease of
financing and after sales service apart from technology.
THE BCG STRATEGIC ENVIRONMENT MATRIX:
SIZE OF THE ADVANTAGE
SMALL
NO. OF

APPRO
ACHES

LARGE

MANY

Fragmented

Specialized

FEW

Stalemated

Volume

TO
Adopting BOSTON CONSULTING GROUP strategic environment matrix, an
ACHIEV
industry can be classified into following types on the basis of sizes of
E

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


competitive advantage and number of approaches to gaining advantage.
These are:
VOLUME INDUSTRY: A volume industry is one in which organizations

can typically gain only a few, but generally large advantages.


STALEMATED INDUSTRY: Here there are few potential competitive

advantages and those that do exist are generally small.


FRAGEMENTED INDUSTRY: A fragmented industry is one in which

companies have numerous opportunities for differentiation, although each


is of limited value.
SPECIALIZED INDUSTRY: In a specialized industry the opportunities

for differentiation are numerous and the payoffs from each can be
significant.
Putting Indian motorcycle industry in this matrix, it can be classified as
Volume Industry during the period of 1980s and early 1990s. During this
period, due to lack to technology among players, Hero Honda had a
competitive edge in the market by manufacturing four stroke motorcycles
through its joint venture with Honda motors. But lately, the industry is going to
take a shape of a Specialized Industry as a number of players are
concentrating on technological development, thanks to government regulation
and consumer changing tastes as demonstrated by the success of new
product launched by different players.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


PORTERS FIVE FORCE MODEL FOR INDIAN MOTORCYCLE INDUSTRY
Threat of new

STATUS

REASONS

High

Breaking up of joint ventures and

entrants

FACTORS

foreign partners planning also entry into


the market.
Entry of other foreign players through

direct imports.
High

Thirteen new models with an average

power of

Bargaining

of two variants of each, thus expanding

customers

consumer choice set.


Customer favorable response for new

products. New products launched since


2001 comprises 50% of June 2002 sales
of motorcycles.
Customer getting cost and aesthetics

conscious.
High

Technological advancement of

substitute

Threat of

scooters with hand starters.

products or

Increase of secondary or resale

services

market for two wheelers and cars.


Availability of auto finance at low

interest rates.
Reducing disparity between scooters

and motorcycles prices.


Development of categories like step

thrus and scooterettes.


High

Discounts offered by existing players

current

Rivalry among

Launching finance schemes at zero

competitors

on different products.
percent interest rates.
Heavy investment in R&D and

capacity expansion by existing players.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


Bargaining

Low

Fragmented ancillary industry.

power of
suppliers

INDUSTRY OWNERSHIP PATTERN


Indian motorcycle market can be classified in a following way according to the
ownership:
INDIAN

INDO-JAPANESE

This classification will soon become redundant, if developments in the


industry are any indication:
Breaking up of major joint ventures; TVS SUZUKI, ESCORTS

YAMAHA, KINETIC HONDA.


Honda entry into the market through it wholly owned subsidiary to

manufacture scooters and motorcycles.


Launch of Chinese motorcycles by Monto Motors.

Thus, possible classification that can result could be:


INDIAN

INDO-JAPANESE

FOREIGN

SEGEMENTS:
According to the buying pattern of customers, the market can be segmented
into three categories:

ECONOMY
(Rs.25,000-40,000)

COMMUTERS
(Rs.40,000-50,000)

LUXURY/LIFESYTLYE
(Rs.50,000 and above)

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Exploratory research second hand motor-bike preference in Bangalore City


The spurt in growth in motorcycle was by commuters segment, which
accounts for majority share of the market and is also the most competitive.
This can be inferred by number of models, which are launched by different
players in this segment.
But last two years have seen the market shifting towards economy segment
due to rationalization of taxes which decreased the price differential between
scooters and motorcycles, acceptance of motorcycles as better mode of
transportation due to low running cost and sturdiness. The macroeconomic
factor has been growing in real income of households.
In past two years there has been some fizzle in the luxury segment, but this
segment has still to make a mark as market move towards maturity phase.
As market matures and new players eye for the pie of the Indian consumer
income, the classification will also evolve. The predictable classification could
be:

ECONOMY COMMUTERS

LUXURY

SUPERLUXURY

Though economy and commuters segment will cover the bottom line for
players but top-line growth will take few more years. The reasons can be
attributed to:

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


MACRO ECONOMIC FACTORS

Indias GDP India's GDP in FY 04 growth rate at 7.5


Increase in
household real income.(source : Financial Daily from THE HINDU
group of publications )
Government policy.

India ranks lowest penetration of vehicles in the world.

Infrastructure development.
INDUSTRY SPECIFIC FACTORS
Trade of between four wheeler and two wheelers.

Propensity of Indian consumer to trade up.

Technology.
PRODUCT
In India, motorcycles are manufactured in four categories on the basis of
engine capacity i,e 95 115cc; 125cc; 150 180cc and above 180cc. The
star performer has been 95-115cc segment which has grown at a larger rate
than any other segment of four stroke and has been the other areas which
players have targeted. 95 115cc motorcycles provide greater fuel efficiency
whereas 150cc motorcycles give greater power. The forecast in next three to
five years could be 125cc segment since it provides balance between fuel
efficiency and power.

The success factor for this segment is the price

differential between 95 115cc and 125cc motorcycles, which is at the


moment Rs.5000-8000 that can be brought down to Rs.2000 or less.
B: NEED AND IMPORTANCE OF THE STUDY
The need and importance of this study, is to provide the two wheeler industry
in general, a clear picture of what consumers prefer in fuel efficient, four
stroke motorbikes in the range of 95 to 115 cubic capacity engines.
This being a segment of the two wheeler industry which is highly competitive,
as it offers motorbikes to the middle class, which makes up a large

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


percentage of the Indian population. These commuters require such forms of
personal transportation during the daily course of their lives, thus being
extremely important to the survival and the growth of the Indian two wheeler
industries.
When the industry meets the requirements of a particular segment of the
population, the required attributes that a motorbike should possess in the
above mentioned range. The particular company in the industry be
competitive enough to provide a motorbike which satisfies these consumer
preferences.
Hence this report will provide a clear and precise analysis and conclusion to
the two wheeler industry, which will help them understand consumers
preferences in motorbikes.

C: REVIEW OF LITERATURE
Hero-Honda Motors Limited is one of the leading companies in the Indian twowheeler industry, which is due to Hero Honda Splendor which is its largest
selling motorbike.

At present, it is the market leader in the motorcycle

segments with around 47% in market share during FY 2003-04.

The

company has emerged as one of the most successful players, much ahead of
its competitors an account of its superior and reliable product quality
complemented with excellent marketing techniques. The company has been
consistently addressing the growing demand for motorcycles and has a
cumulative customer base of over four million customers which is expected to
reach the five million mark with the rural and semi-urban segment being the
new class of consumers.
Analysis of growth path revealed that Hero-Honda Splendor has adopted an
organic approach to growth. The company made intensive growth in its area
of operation.

Then adopted backward and forward integration and after

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


clearly establishing itself as a leader in its area of operation, the company now
plans to diversify into information technology and telecom sectors.
D: STATEMENT OF THE PROBLEM
Determining the attributes, which influence and drive consumers preference
towards a particular second hand motorcycle, is a key factor in their purchase
decision.
These attributes include aesthetics, fuel mileage, power/pick-up, price,

after sales service, comfort driving, easy handling, spare availability,


resale value and zero maintenance.
E: OBJECTIVES
Based on the above problem-statement, the following specific objectives have
been crystallized:
To determine the attributes that influence and drive the consumers

purchase decisions and preferences second hand towards motorbikes.


To determine which second hand motorbike the consumers prefer for

transportation in the category of fuel-efficient, four stroke and in the


range of 95 115 cubic capacity motorbikes.
To determine which the best among the top selling second motorbikes

of different motorcycle companies which include; Hero Honda


Splendor, TVS Victor, Kawasaki Bajaj Caliber, Yamaha Crux and
Kinetic Boss, regarding the attributes that have been mentioned earlier.
To determine the purpose for which consumers purchase these

motorbikes, which include for the purpose of this study; daily


commuting, basic use, critical in work profile, gifting purpose, etc.,
To determine whether the motorbike owned by the consumer meets

his/her expectations and whether or not it suits their lifestyle.


To determine which advertising media influences consumers purchase

decision of second hand motor-bikes.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


To determine whether, the showroom or service station location also

influences consumers purchase decision.

RESEARCH DESIGN
Research design is the arrangement of conditions for collection and analysis
of data in a manner that aims to combine relevant to the research purpose
with economy in procedure. In fact, the researcher design is the conceptual
structure within which research is conducted; it constitutes the blue print for
the collection, measurement and analysis of data.
The main aim of the study is to measure the awareness, preferences, attitude
and perception of people toward second-hand motorbike (95-115cc, fuel
efficient and four strokes) and to find out what attributes attract the most to the
consumer in a motorbike.
Marketing research studies can be broadly classified into three basic types
namely, exploratory, descriptive and casual, depending on the objectives and
prior knowledge on the issues being examined.

The study conducted is

Exploratory in nature. The major emphasis of exploratory research is on the


discovery of ideas.
Next comes the question of selecting the methods by which the data are to be
obtained. In other words techniques for collecting the information must be
devised.

Several methods like observation, questionnaire, interviewing,

examination of records, etc., so survey method is used for the

study.

Surveys are usually undertaken to learn about peoples knowledge, belief,


preference, satisfaction and to measure these magnitudes in the population.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

SAMPLING TECHNIQUE
The researcher decided the type of sampling technique used in this study is
Convenience Sampling Method. In fact, this technique or procedure stands
for the sample design itself. There are several sample designs out of which
the researcher must choose one for his study. In this survey the sampling
procedure consists of all people who own and are aware about motorbikes. It
could a student, an employee, a business man, etc.
In this survey the sample size of the respondents is in the age group of 18-60
and includes a total of 100 respondents who lives in the Bangalore city and
were interviewed for the purpose of this study.
SOURCES OF DATA:
The task of data collected after a research problem has been defined and
research design. While deciding about the method of data collection to be
used for the study, the researcher should keep in mind two types of data viz,
Primary and Secondary.

The primary data are those which are collected

freshly and for the first time, and thus happen to be original in character. The
secondary data, on the other hand, are those, which have already, been
passed

through the statistical process.

The sources of data for this

research are both from primary and secondary.


PRIMARY DATA:
Primary data was collected by means of a structured questionnaire
administered personally.

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Exploratory research second hand motor-bike preference in Bangalore City


SECONDARY DATA:
Secondary data include appropriate materials from Magazines, internet and
by means of discussion with the guide.
SAMPLE SIZE:
The sampling size was 100 and all the samples were collected within the time
of three Weeks during the month of April 2005.
SAMPLING METHOD:
Basically, these methods can be divided into two types, called probability
based sampling scheme and non-probability based schemes.
A Non-Probability Convenience Sampling Method has been used in this
research. The customers who had purchased and are aware of the motorbike
were approached and interviewed who had come to get their bikes serviced.
DATA COLLECTION INSTRUMENT
The Questionnaire method of data collection is quite popular, particularly in
case of big enquiries. The instrument used for the data collection was very
simple and easy to understand. The respondents were easily available at the
service point.

The respondents had sample of time to answer all the

questions in the questionnaire.

A questionnaire consists of a number of

questions printed or typed in a definite order on a form or set of forms. The


questionnaire is given to respondents who are expected to read and
understand the questions and answer them.

The researcher uses the

questionnaire in this research. Questions related to objectives of the study,


form major portion of the questionnaire. It mainly consists of multiple choice
questions or the checklist types questions, so that respondent can check or
mark one of the several choices of answers.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


Questionnaire was formed based on the ideas obtained from researchers
discussion of the problem guide.
FIELD WORK:
The researcher covers 100 respondents and all of them filled up the
questionnaire. Some of the respondents had no patience but on the other
hand there were some of them who were truly interested into the survey.
Such respondents really encouraged the researcher a lot to carry out the
survey.
Average time taken by the respondent to fill up the questionnaire was 10
minutes. Some of them thought they were making commitments on their part
even though the researcher told them that it was not so.
However an honest attempt is made to report and analyze the respondents as
objectively as possible without allowing the investigators bias to dominate
them.
DATA PROCESSING & ANALYSIS PLAN:
The data after collection has to be processed and analyzed in accordance
with the outline laid down for the purpose at the time of developing the
research plan. This is essential for a scientific study and for ensuring that we
have all relevant data for making contemplated comparison and analysis.
Technically speaking, processing implies editing, coding, classification and
tabulation of collected data so that they are amenable to analysis. The team
analysis refers to the computation of certain measures along with searching
for patterns of relationship that exist among data groups.

Thus, in the

process of analysis, relationships or differences supporting or conflicting with


original or new hypothesis should be subjected to statistical test of

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


significance to determine with what validity data can be said to indicate any
conclusion.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


PART B : SURVEY FINDINGS
PRESENTATION AND ANALYSIS OF DATA
AGE GROUP OF THE RESPONDENT
Table 1
Age Group

No. of Respondents

Percentage

18-28

32

32%

28-38

36

36%

38-48

23

23%

48 and above

9%

Total

100

100%

SOURCE: FIELD INVESTIGATION


The above table shows the age of the respondents.

Most of the

respondents belong to the age group of 28-38. In the survey it was found
36% of the respondents belong to the age group of 28 38.32% of them
belong to the age group of 18-28.23% belong to the age group of 38-48 and
the lowest age group was 48 and above who were only 9%.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


INCOME OF THE RESPONDENTS
Table 2
Income Groups

Number of Respondents

Upto 5000

19

5000--10000

31

10000-13000

13000-15000

14

15000 & Above

28

The above table shows the approximate monthly income of the


respondents. In the survey it was found that 31% of the respondents got an
income of Rs. 5000 10000 per month. 28% of them got an income of 15000
and above. 19% of them have an income less than 5000 per month. 14% of
them have an income of 13000-15000 per month and 8% of respondents
have an income of 1000 13000.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


ATTRIBUTES THAT INFLUENCE CONSUMER
Table 3
ATTRIBUTES

VI

Aesthetics

52

42

Mileage

90

10

Power

55

36

Price

53

35

Resale Value

40

38

16

After Sales Service

49

34

16

Comfort Driving

46

43

10

Zero Maintenance

38

38

16

Easy Handling

38

45

11

Spares Availability

35

37

20

Legend:
VI

Very Important

Important

Less Important

Not Important

The above table gives the information on the attributes that influences
the consumer. The table is divided into 4 degree of importance, i.e., Very
Important, important, Less Important and Not Important.

From the above

mentioned where 90% of the respondents feel it is Very Important and 10% of
them feel it is important. 55 among 1000 respondents feel Power is the next
attribute which is Very Important. 53 among 100 respondents find Price as
the next attribute that is respondents feel Pre & After Sales Service as Very
Important.

The attributes, i.e. Comfort Driving, Resale Value, Zero

Maintenance, Easy Handling and Spares Availability, when compared to the

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


other important attributes are given less priority. Spares Availability is one
attribute which is given least importance.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


CONSUMER PREFERENCE OF MOTORBIKS TAKING ATTRIBUTES INTO
CONSIDERATION
Table: 4
Bikes

Number of Respondents

KB Caliber

20

Yamaha Crux

16

HH Splendor

25

TVS Victor

37

Kinetic Boss

2
Total

100

From the above table taking aesthetics into consideration 37% of the
respondents feel TVS Victor is the best bike. 25% of them feel Hero Honda
Splendor as the best bike. 20% of them feel Kawasaki Bajaj Caliber as the
best bike. 16% of them feel Yamaha Crux as the best bike and only 2% of
them feel Kinetic Boss is the best bike. Based on this Analysis we can come
to know that TVS Victor is the best looking bike.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


CONSUMER PREFERENCE TOWARDS MOTORBIKES CONCERNING
FUEL MILEAGE
Table: 5
Bikes

Number of Respondents

KB Caliber

17

Yamaha Crux

09

HH Splendor

50

TVS Victor

18

Kinetic Boss

06
Total

100

From the above table taking Fuel Mileage into consideration 50% of the
respondents feel Hero Honda Splendor is the best Mileage bike. 18% of them
feel TVS Victor as the best bike. 17% of them feel Kawasaki Bajaj Caliber as
the test bike. 9% of them feel Yamaha Crux as the best bike and only 6% of
them feel Kinetic Boss is the best bike. Based on this analysis we can come
to know that Hero Honda Splendor is the best Mileage bike.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


CONSUMER PREFERENCE TOWARDS MOTOR BIKES
CONCERNING POWER / PICK-UP
Table: 6
Bikes

Number of Respondents

KB Caliber

17

Yamaha Crux

45

HH Splendor

10

TVS Victor

23

Kinetic Boss

05
Total

100

From the above table taking Power / Pick-up into consideration 45% of
the respondents feel Yamaha Crux is the best Power bike. 23% of them feel
TVS Victor as the best bike. 17% of them feel Kawasaki Bajaj Caliber as the
best bike. 10% of them feel Hero Honda Splendor as the best bike and only
5% of them feel Kinetic Boss is the best bike. Based on this analysis Yamaha
Crux is the best Power / Pick-up bike from the consumers point of view.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


CONSUMER PREFERENCE TOWARDS MOTOR BIKES
CONCERNING PRICE
Table: 7
Bikes

Number of Respondents

KB Caliber

12

Yamaha Crux

12

HH Splendor

30

TVS Victor

18

Kinetic Boss

28
Total

100

From the table taking Price into consideration 30% of the respondents
feel Hero Honda Splendor is the best-priced bike. 28% of them feel Kinetic
Boss as the best bike. 18% of them feel TVS Victor as the best bike. 12% of
them feel Yamaha Crux as the best bike and 12% of them feel Kawasaki Bajaj
Caliber as the best bike. Based on this analysis Hero Honda Splendor is the
best priced Motorbike from the consumers point of view

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


CONSUMER PREFERENCE TOWARDS MOTOR BIKES
CONCERNING PRE AND AFTER SALES-SERVICE
Table: 8
Bikes

Number of Respondents

KB Caliber

16

Yamaha Crux

13

HH Splendor

43

TVS Victor

23

Kinetic Boss

05
Total

100

From the above table taking Pre and After Sales Service into
consideration 43% of the respondents feel Hero Honda Splendor is the best
when service is taken into consideration. 23% of them feel TVS Victor is the
best. 16% of them feel Kawasaki Bajaj Caliber as the best bike. 13% of them
feel Yamaha Crux as the best bike and only 5% of them feel Kinetic Boss is
the best bike.

Based on this analysis Hero Honda Splendor is the best

Motorbike when Pre and After Sales Service is considered from the
Consumers point of view.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


CONSUMER PREFERENCE TOWARDS MOTOR BIKES
CONCERNING TECHNICALLY SOPHISTICATED
Table: 9
Bikes

Number of Respondents

KB Caliber

20

Yamaha Crux

11

HH Splendor

20

TVS Victor

38

Kinetic Boss

11
Total

100

From the above table taking Technical Sophistication into consideration


38% of the respondents feel TVS Victor is the Test Technical Sophisticated
bike. 20% of them feel Hero Honda Splendor as the best bike. 20% of them
feel Kawasaki Bajaj Caliber as the best bike. 11% of them feel Yamaha Crux
as the best bike and 11% of them feel Kinetic Boss as the best bike. Based
on this analysis TVS Victor is the best Motorbike when Technical
Sophistication is considered from the consumers point of view.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


OWNERSHIP
Table: 10
Bikes

Number of Respondents

KB Caliber

19

Yamaha Crux

13

HH Splendor

37

TVS Victor

25

Kinetic Boss

06
Total

100

The above table shows the brand of motorbikes owned by the


consumers. Hero Honda Splendor is the bike, which is, owned the most i.e.
37% of them consumers own it. 25% of the consumers own TVS Victor. 19%
of them own Kawasaki Bajaj Caliber. 13% of them own Kinetic Boss.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


RESPONDENTS PURPOSE OF PURCHASE
Table: 11
PURPOSE

NUMBER OF RESPONDENTS

Daily Commuting

44

Critical in work Profile

22

Basic Use

28

Gifting Purpose

Others

0
Total

100

From the above data it is clear that most of the respondents purchase
a motorbike for daily commuting, i.e. 44% of them. 28% of the respondents
purchase it for Basic use. 22% of them Purchase it because it is Critical in
Work Profile and only 6% of them purchase it for getting purpose.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


MEET EXPECTATIONS
Table: 12
RECOMMENDS

NUMBER OF RESPONDENTS

Yes it Does

57

To An extent

34

No it Doesnt

09
Total

100

The above table shows that whether the motorbike the respondents
have purchased has met their expectations.

It shows that 57% of the

respondents say it does meet their expectations.

34% of them say

expectations have met to an extent and only 9% of them say it hasnt met
their expectations.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


RESPONDENTS AWARENESS LEVEL OF ADVERTISEMENTS OF
MOTORBIKES
Table: 13
MEDIA

NUMBER OF RESPONDENTS

PRINT MEDIA

20

TELEVISION

36

WORD OF MOUTH

30

HORADINGS

13

OTHERS

1
Total

100

The above table shows that 36% of the respondents have seen the
Advertisement of the motorbike on television out of which, 30% of them
through Word of Mouth. 20% of them are aware through Print Media. 13%
through hoardings and only 1% of respondents say through Radio. Based on
this analysis we can say that advertisement of motorbikes through television
is the best way to increase awareness among the consumers.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


LOCATION OF SHOWROOM AFFECTS PURCHASE DECISION
Table: 14
RECOMMENDS

NUMBER OF RESPONDENTS

YES

42

NO

58
Total

100

The above data shows whether the location of the showroom will affect
the respondents purchase decision. 58% of the respondents say no and 42%
of the respondents say that it will affect their purchase decision.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


CONSUMER RANKING OF MOTORBIKES
Table: 15
BIKES

NUMBER OF RESPONDENTS

Hero Honda Splendor

40

Kawasaki Caliber

20

TVS Victor

22

Kinetic Boss

Yamaha Crux

13
Total

100

The above table shows consumers preference towards motorbikes.


Hero Honda Splendor has been preferred the most by the consumer i.e. 40%
of them have ranked Hero Honda Splendor as number one.

22% of the

respondents have ranked TVS VICTOR as number one. 20% of them have
ranked Kawasaki Bajaj Caliber as number one. 13% of them have ranked
Yamaha Crux and only 5% of them have ranked Kinetic Boss as number one.
Based on this analysis it is clear that Hero Honda Splendor is still a winner of
the battle but the war remains.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


ANALYSIS
The questionnaire has been framed in a manner so as to determine the
key factors and attributes that influence second hand motorbike consumers,
purchase decision and preferences.
The number of respondents for the purpose of this study is 100, of
which, the majority have preference for a motorbike which gives good fuel
mileage.
As we have seen in the previous chapters, 90% of the respondents feel
that fuel mileage is a very important attribute that a motorbike should pssess.
Fuel Mileage, Pricing, Pre and After Sales Service
From the findings, majority of the respondents says that Hero Honda
Splendor is the best fuel mileage motorbike due to the fact that it has been
priced the best and is also considered the best regarding Pre and After
Sales service is considered.
Aesthetics and Power / Pick-Up
The majority of respondents from our analysis state that TVS Victor is
the best bike regarding aesthetics i.e. where looks are considered.
Regarding Power / Pick Up Yamaha Crux is considered to be the winner as
per the respondents views.
Ownership
Most of the respondents who own a Hero Honda Splendor claim that
the bike meets their expectation and suits their lifestyle, thus resulting in
satisfying their purchase decision.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


Purchase of Purchase
Most of them purchase the bike for daily commuting, some of them for
basic use and is critical in work profile and few of them buy for the purpose of
gifting.
Location of the showroom or service station
When location of the showroom or service station is considered
majority of the respondents feel that it does not affect their purchase decision.
Advertising Media
Another fact that was found in the survey was that majority of the
respondents feel that television is the best media for motorbike advertising.
Attributes: Comfort Driving, Resale Value, Zero Maintenance, Easy Handling
and spares availability
Regarding the above-mentioned attributes, when compared to the
other important attributes as mentioned earlier, respondents have given them
less priority and importance in their purchase decision and preference. Also
regarding spares availability the respondents do not consider it a vital factor,
regarding their preference and purchase decision.
Overall Best Bike
Finally, when asked which is the bike respondents preferred the most,
majority of them voted for Hero Honda Splendor as the best motorbike,
when compared to TVS Victor, Kawasaki Bajaj Caliber, Yamaha Crux and
Kinetic Boss.
This preference can clearly be seen from our analysis in the previous
chapters, and clearly supports our findings.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


PART C : SUGGESTIONS AND RECOMMENDATIONS
From the analysis that has been made in the previous chapters we
have seen that the attributes which have been mentioned play a very
important role for a motorbike to be a success in this segment of second hand
two wheelers, for example fuel, mileage, etc.
Hero Honda Splendor the motorbike from Hero Honda Motors Limited
has turned out to be the most successful motorbike in this segment of second
hand two wheelers as it satisfies the majority of important attributes that the
consumer desires. The attributes are mentioned earlier includes, fuel mileage,
price, after sales service, power / pick-up, comfort driving, easy handling,
aesthetics, spare availability, resale value and zero maintenance.
We can also conclude that consumers have preference for this range
of motorbikes due to the fact that they are more economical in terms of the
attributes mentioned above, as it suits the purpose for which they purchased
it, which includes daily commuting, basic use, critical in work profile, etc.
We can also state that advertising through television is the most
appropriate media for this particular product, which has been analyzed, in the
previous chapters.
Finally, through the conclusions made above we can suggest to the
following top Indian four stroke producing motorbike companies in order to
increase their market share:
Hero Honda Splendor: Improvements could be made concerning the


aesthetics and power/pick-up.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


TVS Victor: They could increase the sales of the motorbike by


improving consumers perception on its reliability and dependability


thus increasing its resale value.
Kawasaki Bajaj Caliber: As they have already adopted the strategy of


cost leadership till now and since they have consistently flanked Hero
Honda on price, in future Bajaj has to focus on development of better
technologically sound products.
Yamaha Crux: Improvements could be made in aesthetics,


power/pick-up and better after sales service in order to increase their


market share.
Kinetic Boss: They have to improve the customers image of the


motorbike, as majority of the respondents does not view this product


favorably as compared to the above motorbikes.
It is our firm conviction and belief that our research findings, if they are
not pigeonholed, will give an insight to the marketers of these motorbikes and
will help them to tackle the strategic issues of brand marketing.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


Conclusion
The research work embodied in this report is highly qualitative and is
not amenable for vigorous hypothesis testing through statistical packages.
However, based on our analysis of qualitative data, we prove, beyond doubt,
criteria that our respondent had response is very similar to the study of the
perception of adopting to any new products. Our analysis calls for nothing less
than the appropriate product that has been manufacture that matches the
expectations of the customer has more share in the market for both new and
second hand.
Thus from the above chapters that have been discussed, we have
arrived at precise conclusions at the end of each chapter, giving
manufacturers, retailers clear insight into the customers perception on the
preference of second hand motor bikes in the Bangalore city.
Also we have covered the behavioral aspect of consumers, concerning
viewing of advertisements on television, which gives influence in decision
making of purchase the most, followed by print medias.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

ANNEXURE

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


Questionnaire
Dear respondent,
I am a management student of MP Birla Institute of Management, Bangalore;
conducting a research project as a partial fulfillment of MBA program.
I solicit your co-operation in filling up this questionnaire to facilitate
completion of my project work. I assure you that the response given will be kept
confidential and will be used for academic purpose only.
1 Gender:
[ ]Male

[ ] Female

2. Age: (Please check the appropriate box)


[ ] 18-28
[ ] 38-48

[ ] 28-38
[ ] 48 and above

4. Occupation (Please Specify)______________________________


5. Income per month:
[ ] Up to 5000
[ ] 13000-15000

[ ] 5000-10000
[ ] 15000 and above

6. Please tick the following attributes according to your degree of preference


in a motorcycle
ATTRIBUTES
1. Aesthetics /
Looks / styles
2. Mileage
3. Power / Pick
up
4. Price
5. Resale value
6. After sales
service
7. Comfort
driving
8. Zero
maintenance
9. Easy handling
10. Spares
availability

VERY IMP.

IMPORTANT

LESS IMP.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

NOT IMP.

Exploratory research second hand motor-bike preference in Bangalore City


7. Please tick the following motorbikes, considering the following
attributes according to your preference.
Brand
Attributes
1.
Aesthetics /
Style
2. Fuel Mileage
3. Power / Pick-up
4. Price
5. Resale value
6. Pre-salesservice/After sales
/ Service
7. Spares
Availability
8. Technically
sophisticated
9. Road Grip

Kawasaki
Yamaha Herohonda
TVS
KINETIC
Bajaj
Crux
Splendor VICTOR
BOSS
Caliber

8. Given below are different brands of two-wheeler motorcycles,


kindly rank them according to your preference.
BRAND

RANK

HEROHONDA SPLENDOR
KAWASAKI BAJAJ CALIBER
TVS VICTOR
KINETIC BOSS
YAMAHA CRUX
10. Which bike do you own?
___________________________________________________________
11. What was the purpose of purchase? (Please check the appropriate box)
Daily commuting
[
]
Critical work profile
[
]
Basic use
[
]
Gifting purpose
[
]
Others specify
___________________________________






M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


12. Does the bike meet to your expectations? (Please check the appropriate
box)


Yes it does
To an extent
No it doesnt

[
[
[

]
]
]




13. Does the bike you bought match your life style? (Please check the
appropriate box)


Yes it does
To an extent
No it doesnt

[
[
[

]
]
]




14. How did you get to know about the bike you purchased? (Please check
the appropriate box)


Print media
[
]
Television
[
]
Word of mouth
[
]
Harding
[
]
Other, specify ______________________________________





15 Will the location of the showroom affect your purchase


decision? (Please check the appropriate box)


Yes
No

[
[

]
]

Thank You Very Much

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City


BIBLIOGRAPHY
Sites on the internet :
www.indiainfoline.com


www.economywatch.com


www.thehindubusinessline.com


Magazines :
Autoindia
motoring




Text Books:
Marketing Management by Philip Kotler (The Millenium edition) : Tata


Mc. Graw hill publications, New Delhi 2000


Business Research Method by Cooper R. Donald and Pamela S.


Schindler : Tata Mc. Graw hill publications, New Delhi 2001.

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

AGRE GROUP OF THE RESPONDENTS


40%
35%
30%
25%
Number of
20%
Respondents
15%
10%
5%
0%

18-28

28-38

38-48

48 and
above

Age

Graph-1

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

INCOME OF RESPONDENTS
35
30
25
Number of 20
Respondents 15
10
5
0

Upto 5000

5000-10000

1000013000
Income Groups

Graph-2

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

1300015000

15000 &
Above

Exploratory research second hand motor-bike preference in Bangalore City

Attributes that Influence Consumers


90
80
70
60
Numbe of 50
Respondents 40
30
20
10
0
Aesthetics

Price

Comfort
Driving
Attributes

Graph-3

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Spares
Availability

Exploratory research second hand motor-bike preference in Bangalore City

Consumer Preference towards Bikes Concerning


Aesthetics
40
35
30
25
Number of
20
Respondents
15
10
5
0

KB
Caliber

Yamaha
HH
Crux Splendor

TVS
Victor

Bikes

Graph-4

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Kinetic
Boss

Exploratory research second hand motor-bike preference in Bangalore City

Consumer Preference towards Bikes Concerning


Fuel Mileage
50
45
40
35
Number of 30
25
Respondents 20
15
10
5
0

KB
Caliber

Yamaha
HH
Crux Splendor

TVS
Victor

Bikes

Graph-5

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Kinetic
Boss

Exploratory research second hand motor-bike preference in Bangalore City

Consumer Preference towards Bikes Concerning


Price
30
25
20
Number of
15
Respondents
10
5
0

KB
Caliber

Yamaha
HH
TVS
Crux Splendor Victor

Kinetic
Boss

Bikes

Graph-7

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

Consumer Preference towards Bikes Concerning


Pre and After Sales Service
45
40
35
30
Number of 25
Respondents 20
15
10
5
0

KB
Caliber

Yamaha
HH
Crux Splendor

TVS
Victor

Kinetic
Boss

Bikes

Graph-8
Graph 8

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

Consumer Preference towards Bikes Concerning


Technically Sophisticated
40
35
30
25
Number of
20
Respondents
15
10
5
0

KB
Caliber

Yamaha
HH
Crux Splendor

TVS
Victor

Bikes
Graph-9

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Kinetic
Boss

Exploratory research second hand motor-bike preference in Bangalore City

OWNERSHIP
40
35
30
25
Number of
20
Respondents
15
10
5
0

KB
Caliber

Yamaha
HH
Crux
Splendor

TVS
Victor

Bikes
Graph-10

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Kinetic
Boss

Exploratory research second hand motor-bike preference in Bangalore City

MEET EXPECTATIONS

No it Doesnt
To An extent

Yes it Does

Yes it Does
To An extent
No it Doesnt

Graph-12

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

40
35
30
25

PRINT MEDIA
TELEVISION
WORD OF MOUTH
HORADINGS
OTHERS

20
15
10
5
0

PRINT
MEDIA

WORD OF
MOUTH

OTHERS

Graph-13

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

SHOWROOM LOCATION AFFECTS PURCHASE


DECISION

YES
YES
NO
NO

Graph-14

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

Exploratory research second hand motor-bike preference in Bangalore City

Consumers Preference towards Motor Bikes


40
35
30
25
Number of
20
Respondent
15
10
5
0

Hero Kawasaki TVS


Honda Caliber Victor
Splendor

Kinetic Yamaha
Boss
Crux

Bikes
Graph-1

M.P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan

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