Beruflich Dokumente
Kultur Dokumente
award of degree in
Master of Business Administration (MBA)
(2009-20011)
Supervised by
Narender tanwar
Faculty
B.S.A.I.T.M
FARIDABAD
Submitted By
Rahul Gandhi
09/MBA/040
Submitted to
Controller of Examination
Maharishi Dayanand University, Rohtak
PREFACE
must penetrate all areas of the enterprise. Market survey in todays competitive world is a
must for every organization.
This project is a study of marketing strategy of Hero Honda. The rational behind this
particular study is to find out the present market scenario of various brands & to find out
the corporate need and perception. It was a pleasurable experience to conduct a research
on behalf of Hero Honda pertaining to the study of the Automobile Sector.
Conclusion and there by recommendation has been arrived at by proper and justified
interpretation of the result derived from the above said analytical tools and techniques.
DECLARATION
LTD. is an original work and the same has not been submitted to any other
institutions for the award of any other degree. The feasible suggestion has been duly
incorporated in consultation with the supervisor.
Rahul Gandhi
ACKNOWLEDGEMENT
I would like to thank Mr. Narender Tanwar assigning me a project to work on and for the
help and guidance offered by them during my project work. Working with them was
really a very good & learning experience. I would like to thank all other staff members
of HRD Dept, without their help it would have very difficult for me to carry out any of
my work successfully.
My thanks to all the financial advisors of Hero Honda especially Mr. Ashish Kapoor
(Regional Mkt. Manager) who helped me get over my hard times during my sales job, I
can never forget his support and encouragement.
I also thank to BSAITM, Faridabad who give me opportunity to work with Hero Honda.
It increases my knowledge about markets in which future will be struggle. A companys
implant welfare facilities have been kept in the course curriculum of the management
program, so that the candidates can get to know about the corporate world, industries.
Also one gets a chance to visualize practically what has been taught theoretically. The
welfare facilities in a reputed concern like Crew were itself a great learning experience
Rahul Gandhi
TABLE OF CONTENTS
S.No.
PARTICULARS
Page No.
INTRODUCTION
3
4
5
COMPANY PROFILE
OBJECTIVES OF THE STUDY
INTRODUCATION OF THE TOPIC
SWOT ANALYSIS
PORTOR ANALYSIS
FACTS N FINDING
RECOMANDATION
10
QUESTIONNAIRE
11
BIBLIOGRAPHY
In the 90s the industry witnessed an average growth rate of above 20 percent.
The world leaders in the sector are evincing keen interest in establishing
manufacturing facilities for manufacturing and assembling components.
A politically stable and vibrant State, Andhra Pradesh is centrally located with
the support of seaports, international airports, assured and reliable power supply,
abundant water, broad base of auto component manufacturers, highly trained,
skilled and disciplined manpower and is therefore, the preferred location for
Automobile industries.
The interest of the state has been duly noted by Global Auto Majors, who have
indicated their interest to consider Andhra Pradesh for establishing manufacturing
facility.
The Government is also formulating an Auto Policy, which would give a proper
direction to the growth of the sector.
There are more than 20 auto component manufacturing companies in the State,
manufacturing components such as grey-iron castings, precision aluminum
castings, leaf springs, oils and lubricants, diesel fuel injection equipment,
electronics and auto electronics and auto electrical, front axles, gears, forging,
machined components, pressed metal components, pistons, cylinder liners,
nozzles, delivery valves, starter motors, alternators, electronic regulators, high
pressure die castings, clutch covers, fuel filters ,etc.
Hero Honda has a reputation of being the most fuel-efficient and the largest selling Indian
motorcycle. Its commitment of providing the customer with excellence is self-evident. A
rich background of producing high value products at a reasonable price led the world's
largest manufacturer of motorcycles to collaborate with the world's largest bicycle
manufacturer.
It was this affinity in working cultures of Honda Motor Company of Japan and the Hero
Group that resulted in the setting up of Hero Honda Motors Ltd. A relationship so
harmonious that Hero Honda has managed to achieve indigenization of over 95 percent, a
Honda record worldwide.
Tactical promotions and excellent marketing helped Hero Honda establish itself as an
intelligent purchase. Its unique features like fuel conservation, safety riding courses and
mobile workshops helped the group reach in the interiors of the country.
Finance services helped facilitate purchase, as did an efficient dealer network across the
country.
Well-entrenched in the domestic market, Hero Honda Motors Ltd. turned its attention
overseas, and exports have been steadily on the rise.
Cbz
Splendor
CD100
Cd100ss
Street smart
Passion
Karizma
CD dawn
Ambition 135
What started out as a Joint Venture between Hero Group, the worlds largest bicycle
manufacturers and the Honda Motor Company of Japan, has today become the Worlds
single largest two wheeler Company. Coming into existence on January 19, 1984, Hero
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. Add to that technological excellence, an
expensive dealer network, and reliable after sales service, and you have one of the most
customer-friendly companies.
In the words of Mr. Brijmohan Lal Munjal, the Chairman and Managing Director, We
will continue to make every effort required for the development of the motorcycle
industry, through new product development, technological innovation, investment in
equipment and facilities and through efficient management.
10
INDUSTRY SCENARIO
11
Products
% of market share
75% market share
HERO HONDA
Motorbikes
BAJAJ AUTO
Scooter+Motorbikes
LML
Scooter+Motorbike
Motorbikes
Motorbikes
Motorbikes
TVS
YAMAHA
ENFIELD
12
13
We are one of the major exporters of Hero Honda Glamour F1. It gives us a sense of
pride to forward this gleaming machine to our clientele that is Hero Honda first fuel
injection technology-driven motorcycle.
Technical Specifications
Engine
Quantum Core
Displacement
124.7 cc
Maximum Power
Maximum Speed
95 kmph
Gears
4 Gears
Frame
2.75 x 18 - 42 P / 4 PR
3.00 x 18 - 52 P / 6 PR
Headlight
Starting
Kick / Self
Brakes (Front)
Drum / Disc
Brakes (Rear)
Drum
No. of Variants
Technical Specification
Type
Displacement
149.2 c.c
Cylinder
Arrangement
Maximum Power
Maximum Torque
Bore x Stroke
57.3 x 57.8 mm
14
Compression Ratio
9.1 :1
Carburetor
C.V Type
Starting
Idle speed
Ignition
Clutch
Multiplate wet
Gear box
Type
Front
Rear
Rim Size
Tyre Size
Front 12.75 x 18 - 42 P
Rear 100/90 x 18 - 56P ( With Tuff-up Tube)
Battery
12 V - 7 Ah ( Self )
Head Lamp
Tail Lamp
Stop Lamp
Reserve
Length
2080 mm
Width
765 mm
Height
1145 mm
Wheelbase
1325 mm
Ground clearance
145 mm
Minimum turning
radius
2.10 mtrs
Kerb weight
15
Technical Specification
Engine
Cubic Capacity
97.2cc
Max. Power
Gear Box
4 Speed
Ignition
CDI
Front Brakes
130mm Drum
Rear Brakes
110mm Drum
Front Tyre
2.75 X 18
Rear Tyre
3.00 X 18
Wheelbase
1235mm
Ground Clearance
159mm
Dry Weight
116 Kg
Tank Capacity
12.8 Liters
Colours
Technical Specification
16
Engine
Cubic Capacity
97.2cc
Max. Power
Gear Box
4 Speed
Ignition
CDI
Front Brakes
130mm Drum
Rear Brakes
110mm Drum
Front Tyre
2.75 X 18
Rear Tyre
3.00 X 18
Wheelbase
1230mm
Ground Clearance
160mm
Dry Weight
114 Kg
Tank Capacity
10.5 Liters
Technical Specification
Engine
Displacement
97.2 cc
Maximum Power
Ignition
Electronic CDI
Frame
Head Light
Halogen Bulb 35 W / 35 W
Final Drive
Roller Chain
Battery
12 V - 2.5 Ah
Starting
Kick Starter
The Street 100 is Hero Motor's latest two-wheeler on offer in the step-through category.
The Hero Honda Street 100 is equipped with unique features like city-clutch, which is
designed specially for city driving. It has rotary gears, which allow the rider to flip
17
directly from the fourth gear to neutral once the bike has come to a halt, a must for the
present stop-and-go traffic. A self-starter button comes as an option. The Street can be
purchased with a variety of seat layouts and has options like a water pump, spray can,
larger luggage tray, etc. Its major competitor is the much cheaper K4 from Kinetic. Major
plus points that justify the higher price are the centrifugal clutch and the rotary gears.
However, the liberal use of plastics negates much of the feel good factor and has
hindered sales to a large extent.
Technical Specifications
Engine : Four-stroke/petrol
Transmission : Four-speed
Engine Displacement : 97.2cc
Tachometer : N/A
Max Power : N/A
Wheel base : 1,205mm
Ground Clearance : 133mm
Ignition : Electronic
Dry Weight : 101kg
Fuel tank Capacity : 11litres
Battery : 12V
F/R suspension : Telescopic
R/R suspension : Swing arm and Hydraulic dampers
Max Speed : N/A
Front Tyre size : 2.25x17"
Rear Tyre size : 2.50x17"
KARIZMA
If you look at the 223c mill of the Karizma, you can make out the familiar streak that
runs through the engines on the CBZ and the Ambition. No prizes on this count as to
the reason but the 223cc Karizma engine represents - for the moment - the maximum
capacity this modular design theme can be taken to. The crankcase is of virtually the
same size though the covers do have some detail differences and the engine mounts are
the same as in the other two bikes and completing the picture are the scaled-up barrel
(with an additional fin) and head.
18
The single overhead cam motor features slightly undersquare cylinder dimensions with
a 65.5mm bore and a 66.2mm stroke to give a 223cc swept volume. Hero Honda has
designed in the latest convex-type combustion chamber (compression ratio being 9.0 :
1) for silent running and good power delivery while also giving it the latest Keihin VE
3EA constant vacuum type carburettor which also packs in the CCVI switch. The CCVI
term stands for carb-controlled variable ignition timing which as it suggests actuates via throttle position - one of two ignition maps, for low and high speed operation. This
was one area which disappointed appreciably in the CBZ wherein the engine sounded
and felt harsh as one went past the middle range but here this detail has eliminated such
The all aluminum alloy engine (with pressed-in steel liner) features an automatic cam
chain tensioner, an air cut off valve (to prevent afterburning in the exhaust muffler) and
like on the CBZ and Ambition, an air injection valve to keep tail pipe emissions in
check. With all this and the extra cubic capacity, the Karizma engine develops 16.76bhp
at 7000rpm and 18.35Nm of torque at 6000rpm. This is about 2bhp and 5Nm more than
what the Pulsar 180 makes but the reasoning is that the engine had to be stress free and
this fact holds true when out on the roads.
Transmission is via a five-speed gearbox which has had its final drive ratios revised
from those in the CBZ. A stronger multi-plate clutch is used to take care of the
enhanced power and torque figures. This time round Hero Honda has not faulted and
equipped the engine within electric starter even though the kick starter to be actuated
requires the front right footrest to be folded out of the way.
ENGINE:
TRANSMISSION:
19
20
21
22
Marketing strategy is a process that can allow an organization to concentrate its limited
resources on the greatest opportunities to increase sales and achieve a sustainable
advantage. A marketing strategy should be centered on the key concept that customer
satisfaction is the main goal.
Marketing strategy is a method of focusing an organization's energies and resources on a
course of action which can lead to increased sales and dominance of a targeted market
niche. A marketing strategy combines product development, promotion, distribution,
pricing, relationship management and other elements; identifies the firm's marketing
goals, and explains how they will be achieved, ideally within a stated timeframe.
Marketing strategy determines the choice of target market segments, positioning,
marketing mix, and allocation of resources. It is most effective when it is an integral
component of overall firm strategy, defining how the organization will successfully
engage customers, prospects, and competitors in the market arena. Corporate strategies,
corporate missions, and corporate goals. As the customer constitutes the source of a
company's revenue, marketing strategy is closely linked with sales. A key component of
marketing strategy is often to keep marketing in line with a company's overarching
mission statement.
A marketing strategy can serve as the foundation of a marketing plan. A marketing plan
contains a set of specific actions required to successfully implement a marketing strategy.
For example: "Use a low cost product to attract consumers. Once our organization, via
our low cost product, has established a relationship with consumers, our organization will
sell additional, higher-margin products and services that enhance the consumer's
interaction with the low-cost product or service."
A strategy consists of a well thought out series of tactics to make a marketing plan more
effective. Marketing strategies serve as the fundamental underpinning by marketing plans
designed to fill market needs and reach marketing objectives. Plans and objectives are
generally tested for measurable results.
A marketing strategy often integrates an organization's marketing goals, policies, and
action sequences (tactics) into a cohesive whole. Similarly, the various strands of the
strategy , which might include advertising, channel marketing, internet marketing,
promotion and public relations can be orchestrated. Many companies cascade a strategy
throughout an organization, by creating strategy tactics that then become strategy goals
for the next level or group. Each group is expected to take that strategy goal and develop
a set of tactics to achieve that goal. This is why it is important to make each strategy goal
measurable.
Marketing strategies are dynamic and interactive. They are partially planned and partially
unplanned.
23
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective. These come from within the company's unique
value chain. SWOT analysis groups key pieces of information into two main categories:
The internal factors may be viewed as strengths or weaknesses depending upon their
impact on the organization's objectives. What may represent strengths with respect to one
objective may be weaknesses for another objective. The factors may include all of the
4P's; as well as personnel, finance, manufacturing capabilities, and so on. The external
factors may include macroeconomic matters, technological change, legislation, and sociocultural changes, as well as changes in the marketplace or competitive position. The
results are often presented in the form of a matrix.
SWOT analysis is just one method of categorization and has its own weaknesses. For
example, it may tend to persuade companies to compile lists rather than think about what
is actually important in achieving objectives. It also presents the resulting lists
uncritically and without clear prioritization so that, for example, weak opportunities may
appear to balance strong threats.
It is prudent not to eliminate too quickly any candidate SWOT entry. The importance of
individual SWOTs will be revealed by the value of the strategies it generates. A SWOT
item that produces valuable strategies is important. A SWOT item that generates no
strategies is not important.
26
Strength
1. Huge brand equity/reputation among customers.
2. Models/products in almost every bike segment.
3. Healthy growth in profits.
4. Brilliant relations with customers and dealers.
5. Strong Resale Value.
6. Strong Research & Development.
7. Quality product for each category.
8. Dedicated Human Resource.
9. Awareness in the people.
10. Highly competitive features neology with international collaboration.
27
Weakness
1.
2.
3.
4.
5.
6.
Opportunities
1.
2.
3.
4.
5.
6.
7.
Threats
1.
2.
3.
4.
Hero Honda will need to have a bigger presence in the executive segment.
It will be a great threat for Hero is the collaboration breaks up.
All major bike makers in the world are lining up for India.
Absence in 150cc could harm the growth plans of HHML as future lies in the
150cc and 125cc markets.
5. Low cash reserves.
6. Strong competition from Bajaj, Yamaha & TVS.
28
Geographical Segmentation
Geographic Segmentation calls for division of the market into different geographical
units such as nations, states, regions, countries, cities, or neighborhoods. In the South
Asian context, geographic segmentation assumes importance due to variations in
consumer preferences and purchase habits across different regions, across different
countries, and across different states in these countries.
Demographic Segmentation
In Demographic Segmentation, we divide the market into groups on the basis of variables
such as age, family size, family life cycle, income, occupation, education, religion, race,
generation, nationality and social class. One reason demographic variables are so popular
with marketers in that theyre often associated with consumer needs and wants. Another
is that theyre easy to measure. Even when we describe the target market in nondemographic terms (say, by personality type), we may need the link back to demographic
characteristics in order to estimate the size of the market and the media we should use to
reach it efficiently.
Psychographic Segmentation
Psychographics is the science of using psychology and demographics to better understand
consumers. In psychographic segmentation, buyers are divided into different groups on
High Resources
High Innovation
the basis of psychological/personality traits, lifestyle, or values. People
within the same
Primary
demographic
group can exhibit very different psychographic profiles. Values and
Motivation
lifestyles significantly affect product and brand choice of consumers. Religion has a
significant influence on values and lifestyles. The strict norms that consumers follow
with respect to food, habits or even dress codes are representative examples in this
regard.
Innovators
Low Resources
Low Innovation
30
Ideals
Achievement Self-expression
Thinker
s
Achieve
rs
Experie
nces
Believer
s
Strivers
Makers
Survivors
1.
Innovators:
self-esteem. Purchases often reflect cultivated tastes for relatively upscale, niche-oriented
products and services.
2.
Thinkers- mature, satisfied, and reflective people who are motivated by ideals
and who value order, knowledge and responsibility. They seed durability, functionality,
and value in products.
3.
Achievers- successful, goal-oriented people who focus on career and family. they
31
Behavior Segmentation: In behavioral segmentation, marketers divide buyers into groups on the basis of their
knowledge of, attitude toward, use of, or response to a product.
Decision Roles: - People play five roles in a buying decision: Initiator, Influencer,
Decider, Buyer and User. Recognition of the different buying roles and specification
of the people who play these roles for specific products and services are vital for
marketers. This is especially useful for designing the communication strategy.
Behavioral Variables:
benefits, user status, usage rate, buyer readiness stage, loyalty status, and attitude-are
the best starting points for constructing market segments.
Measurable, the size, purchasing power and characteristics of the segments can
be measured.
Substantial, The segments are large and profitable enough to serve. A segment
should be the largest possible homogenous group worth going after with a tailored
marketing program. It would not pay, for example, for an automobile manufacture
to develop cars for people who are less four feet tall.
Actionable, Effective programs can be formulated for attracting and serving the
segments.
M1
M2
M3
P1
P2
P3
Selective Specialization
M1
M2
M3
33
P1
P2
P3
Product Specialization
M1
M2
M3
P1
P2
P3
Market Specialization
M1
M2
M3
P1
P2
P3
34
M1
M2
M3
P1
P2
P3
35
36
Positioning: Positioning is the act of designing the companys offering and image to occupy a
distinctive place in the minds of the target market, the goal is to locate the brand in the
minds of consumers to maximize the potential benefit to the firm. A good brand
positioning helps guide marketing strategy by clarifying the brand essence, what goals it
helps the consumer achieves, and how it does so in a unique way. Everyone in the
organization should under- stand the brand positioning and use it as context for making
decisions.
37
Product:Core Product: The core product or benefit of Hero Honda Splendor is Traveling and saving the time by
reach on desire place at right time.
Basic Product: The basic product of Hero Honda splendor are Engine, Handle, Shockers, Wheels, Gear
box and chain set etc.
Expected Product: The expected products of Hero Honda splendor are: 1. It should be 5 gear boxes.
2. It should be 90 Kmpl mileages.
3. It should be 120 Km/hour Maximum speeds.
4. It should be disk brake or power brake.
5. It should be steel body.
Augmented Product: The augmented products of Hero Honda Splendor are: 1. It provides monthly check up for decrease the pollution.
2. It provides fast service of the product.
Pricing Strategy: Penetration Pricing: The price charged for products and services is set artificially low in order to gain market
share. Once this is achieved, the price is increased. This approach was used by France
Telecom and Sky TV.
Hero Honda Used penetration pricing strategy because that time Hero Honda use
National Segment and low income persons so they used penetration strategy.
38
Price Skimming: Charge a high price because you have a substantial competitive advantage. However, the
advantage is not sustainable. The high price tends to attract new competitors into the
market, and the price inevitably falls due to increased supply. Manufacturers of digital
watches used a skimming approach in the 1970s. Once other manufacturers were tempted
into the market and the watches were produced at a lower unit cost, other marketing
strategies and pricing approaches are implemented.
Premium pricing, penetration pricing, economy pricing, and price skimming are the four
main pricing policies/strategies. They form the bases for the exercise. However there are
other important approaches to pricing.
Below The Line is a common technique used for touches and feel products. Those
consumer items where the customer will rely on immediate information than previously
researched items. Below The Line techniques ensure recall of the brand while at the same
time highlighting the features of the product.
Above The Line Promotion: Above the line (ATL) is an advertising technique using mass media to promote brands.
Major above-the-line techniques include TV and radio advertising, print advertising and
internet banner ads. This type of communication is conventional in nature and is
considered impersonal to customers. The ATL strategy makes use of current traditional
media: television, newspapers, magazines, radio, outdoor, and internet.
Hero Honda used Above the Line Promotion because in the Above the Line promotion
co. members used advertisement through Radio, T.V., Newspaper and Other media
communications.
39
Place: Geographical Placing: - Geographical placing of the product has divided into 4 markets
and these are: 1. Local
2. National
3. Regional
4. International
Hero Honda used National Market for sale the Hero Honda Splendor.
40
41
Ratios
Per share ratios
Adjusted EPS (Rs)
Adjusted cash EPS (Rs)
Reported EPS (Rs)
Reported cash EPS (Rs)
Dividend per share
Operating profit per share (Rs)
Book value (excl rev res) per share (Rs)
Book value (incl rev res) per share (Rs.)
Net operating income per share (Rs)
Free reserves per share (Rs)
Profitability ratios
Operating margin (%)
Gross profit margin (%)
Net profit margin (%)
Adjusted cash margin (%)
Adjusted return on net worth (%)
Reported return on net worth (%)
Return on long term funds (%)
Leverage ratios
Long term debt / Equity
Total debt/equity
Owners fund as % of total source
Fixed assets turnover ratio
Liquidity ratios
Current ratio
Current ratio (inc. st loans)
Quick ratio
Inventory turnover ratio
Payout ratios
Dividend payout ratio (net profit)
Dividend payout ratio (cash profit)
Earning retention ratio
Cash earnings retention ratio
Coverage ratios
Adjusted cash flow time total debt
Financial charges coverage ratio
Fin. charges cov.ratio (post tax)
Component ratios
Material cost component (% earnings)
(Rs crore)
Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06
102.16
111.74
111.77
121.35
110.00
137.40
173.52
173.52
793.22
171.52
58.50
67.55
64.19
73.24
20.00
87.79
190.33
190.33
617.23
188.33
42.09
50.12
48.47
56.50
19.00
68.50
149.55
149.55
518.06
147.55
37.26
44.26
42.96
49.96
17.00
60.19
123.70
123.70
496.07
121.70
43.44
49.18
48.64
54.38
20.00
69.21
100.62
100.62
436.64
98.62
17.32
16.11
14.00
14.00
58.87
64.41
75.07
14.22
12.75
10.30
10.84
30.73
33.72
43.33
13.22
11.67
9.27
9.59
28.14
32.41
41.57
12.13
10.72
8.58
8.84
30.11
34.73
43.48
15.84
14.53
11.06
11.19
43.16
48.34
60.31
0.01
0.01
98.13
6.29
0.02
0.02
97.97
5.34
0.04
0.04
95.76
5.89
0.06
0.06
93.73
6.01
0.09
0.09
91.53
6.45
0.57
0.57
0.49
42.80
0.46
0.46
0.31
47.53
0.48
0.48
0.31
42.82
0.56
0.56
0.39
47.48
0.48
0.48
0.35
50.65
115.04
105.95
-25.86
-15.06
36.45
31.95
60.01
65.36
45.86
39.34
47.19
55.65
46.29
39.80
46.62
55.06
46.88
41.93
47.51
53.63
0.02
255.15
218.53
0.05
142.76
113.15
0.13
108.14
84.76
0.18
93.44
73.50
0.18
92.33
70.70
68.32
71.73
72.16
73.24
70.45
42
Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06
4.80
4.72
4.86
5.11
4.63
2.13
2.01
2.35
2.66
2.90
1.66
0.79
0.67
1.10
1.69
0.65
0.82
0.80
0.77
0.78
59.98
59.98
59.98
59.98
59.98
43
44
The goal of a market analysis is to determine the attractiveness of a market, both now and
in the future. Organizations evaluate the future attractiveness of a market by gaining an
understanding of evolving opportunities and threats as they relate to that organization's
own strengths and weaknesses.
Organizations use the findings to guide the investment decisions they make to advance
their success. The findings of a market analysis may motivate an organization to change
various aspects of its investment strategy. Affected areas may include inventory levels, a
work force expansion/contraction, facility expansion, purchases of capital equipment, and
promotional activities
Elements
Market size
The most common measure of market size is the sum of the revenues of its participants.
The following are examples of information sources for determining market size:
Government data
Trade association data
Financial data from major players
Customer surveys
Market trends
Changes in the market are important because they often are the source of new
opportunities and threats. Moreover, they have the potential to dramatically affect the
market size.
Examples include changes in economic, social, regulatory, legal, and political conditions
and in available technology, price sensitivity, demand for variety, and level of emphasis
on service and support.
46
Market segments
Markets are not uniform. Therefore it is also important for investors to identify and
evaluate the various segments that make up the total market. This analysis helps
organizations determine which areas account for the greatest share of the market's growth
and are more susceptible to change. This information, in turn, helps them pinpoint the
most promising opportunities within the overall market and guides the choice of specific
investments.
Market profitability
While different organizations in a market will have different levels of profitability, they
are all similar to different market conditions. Michael Porter devised a useful framework
for evaluating the attractiveness of an industry or market. This framework, known as
Porter's five forces, identifies five factors that influence the market profitability:
Buyer power
Supplier power
Barriers to entry
Threat of substitute products
Rivalry among firms in the industry cost structure
The cost structure is important for identifying key factors for success. To this end,
Porter's value chain model is useful for determining where value is added and for
isolating the costs.
The cost structure also is helpful for formulating strategies to develop a competitive
advantage. For example, in some environments the experience curve effect can be used to
develop a cost advantage over competitors.
Distribution channels
Examining the following aspects of the distribution system may help with a market
analysis:
Existing distribution channels - can be described by how direct they are to the
customer.
Trends and emerging channels - new channels can offer the opportunity to
develop a competitive advantage.
Channel power structure - for example, in the case of a product having little brand
equity, retailers have negotiating power over manufacturers and can capture more
margins.
Success factors
The key success factors are those elements that are necessary in order for the firm to
achieve its marketing objectives. A few examples of such factors include:
It is important to consider that key success factors may change over time, especially as
the product progresses through its life cycle.
Applications
The literature defines several areas in which market analysis is important. These include:
sales forecasting, market research, and marketing strategy. Not all managers will need to
conduct a market analysis. Nevertheless, it is important for managers that use market
analysis data to how analysts derive their conclusions and what techniques they use to do
so.
Consumer Markets: at less than 31 two- wheeler per 1,000 citizens in 2005, India is a
poorly penetrated market for motorcycles- even afteraccunting for a relatively low per
capita income of around US$,3100 per year on purchasing power parity (PPP) basis.
Indonesia, whose PPP per capital income is just 15% grater than Indias has 83 twowheelers per 1,000people. And Vietnam, despite having a 13% lower per capital income,
has penetration of 122 two wheelers per 1000. Malaysia and Thailand are at 223
& 264 two wheelers per 1000.The fact is that with the Indian economy growing close to
8% CAGR in the last three years, three is enormous headroom fro increasing two
wheelers penetration in the country. What this needs are the products at different price
Points, sales and service set- ups across the length and breadth of the country, which are
backed by attractive financing options to make two wheelers affordable to the vast
majority of the population. Hero Honda motors have all three levers in places to drive this
change and expand the market. Out view is that motor cycle demand in India will grow
at around 15% per year over the coming years. It will there for be our endeavor to grow
at a pace significantly higher that the market growth.
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KEY POLICIES
Hero Honda, our goal is not only to sell you a bike, but also to help you every step of the
way in making your world a better place to live in. Besides its will to provide a highquality service to all of its customers, Hero Honda takes a stand as a socially responsible
enterprise respectful of its environment and respectful of the important issues. Hero
Honda has been strongly committed not only to environmental conservation programmers
but also expresses the increasingly inseparable balance between the economic concerns
and the environmental and social issues faced by a business. A business must not grow at
the expense of mankind and man's future but rather must serve mankind. We must do
something for the community from whose land we generate our wealth."
A famous quote from our Worthy Chairman Mr.Brijmohan Lall Munjal.
Environment Policy
We at Hero Honda are committed to demonstrate excellence in our environmental
performance on a continual basis, as an intrinsic element of our corporate philosophy.
To achieve this we commit ourselves to: Integrate environmental attributes and cleaner
production in all our business processes and practices with specific consideration to
substitution of hazardous chemicals, where viable and strengthen the greening of supply
chain. Continue product innovations to improve environmental compatibility.
Institutionalise resource conservation, in particular, in the areas of oil,
water, electrical energy, paints and chemicals.
Quality Policy
Excellence in quality is the core value of Hero Honda's philosophy. We are committed at
all levels to achieve high quality in whatever we do, particularly in our products and
services which will meet and exceed customers growing aspirations through:
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Safety Policy
Hero Honda is committed to safety and health of its employees and other persons who
may be affected by its operations. We believe that the safe work practices lead to better
business performance, motivated workforce and higher productivity.
We shall create a safety culture in the organization by:
Integrating safety and health matters in all our activities.
Ensuring compliance with all applicable legislative requirements.
Empowering employees to ensure safety in their respective work places.
Promoting safety and health awareness amongst employees, suppliers and
Contractors.
Fully container (FCL) or less than container load (LCL) dealt with
safety and security
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An industry is a group of firms that offer a product or class of products that are close
substitutes for one another. Industries are classified according to number of sellers;
degree of product differentiation; presence or absence of entry, mobility, and exit
barriers; cost structure; degree of vertical integration; and degree of globalization.
Number of sellers and degree of differentiation:
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The starting point for describing an industry is to specify the number of sellers and
whether the product is homogeneous or highly differentiated give rise to four industry
structure types:
1. Pure monopoly only one firm provides a certain product or services in a certain
country or area (a local water or cable company). An unregulated monopolist might
charge a high price, do little or no advertising and offer minimal service. If partial
substitutes are available and there is some danger of competition, the monopolist might
invest in more service and technology. A regulated monopolist is required to charge a
lower price and provide more service as a matter of public interest.
2. Oligopoly a small number of (usually) large firms produce products that range from
highly differentiated to standard. Pure oligopoly consists of a few companies producing
essentially the same commodity (oil, steel). Such companies would find it hard to charge
anything more than the going price. If competitors match on price and services, the only
way to gain a competitive advantage is through lower costs. Differentiated oligopoly
consists of a few companies producing products (autos, cameras) partially differentiated
along lines of quality, features, styling, or services. Each competitor may seek leadership
in one of these major attributes, attract the customers favoring that attribute, and charge a
price premium for that attribute.
3. Monopolistic competition many competitors are able to differentiate their offers in
whole or in part (restaurants, beauty shops). Competitors focus on market segments
where they can meet customer needs in a superior way and command a price premium.
4. Pure competition many competitors offer the same product and service (stock market,
commodity market). Because there is no basis for differentiation, competitors process
will be the same. No competitor will advertise unless advertising can create
psychological differentiation (cigarettes, beer) in which case it would be more proper to
describe the industry as monopolistically competitive.
An industry competitive structure can change over time. For instance, the media industry
has continued to consolidate, turning from monopolistic into a differentiated oligopoly.
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been the pioneers in motorcycle industry for quiet long it was their absence which gave
bajaj time to stabilize but as they are back with some amazing concepts with user friendly
price they already have raked bajaj's market share plus bajaj has been cashing too long on
the pulsar model while all the models from Yamaha are distinctive and have a charisma
of their own which brings on freshness to the stale Indian market. 150cc bike for over one
lakh bucks? And huge sales among that? Yamaha has to seriously consider Indian market
as a highest priority n should release much better looking bike than r15/fazer. It seems
yamaha is treating Indian market as dump and hence these kind of bikes.
The biking industry is in for a toss. Yamaha, the true blue biker's choice is sending
everybody in for a spin. The new bred Yams are not just good looking, but also have the
technology & hardware to go for.Bajaj picked up from where Yamaha left in terms of
performance bikes in India. But with the return of turning forks with line up like R1, R15,
FZ16, Fazer & FZS the competition is tougher than ever for Bajaj Pulsars. Also with the
add on kits now available for the R15 & FZ16, the performance bar will be raised.
If you see the history of Yamaha. Yamaha's all bikes after RX 100 were not very
successful in Indian market. Once technology shifted from 2 strokes to 4 stroke Yamaha
lose his sheen in the Indian Market. They have launched so many bikes after RX 100 but
all of them were not very successful. Same story is with Hero Honda. Hero Honda is very
successful with fuel economic bike but not with Power bikes. I think both of them will
not give stiff competion to Bajaj. Bajaj has already made their reputation in Power bike. I
can see Bajaj going down in the coming years with Yamaha especially entering this
market very aggressively with performance based bikes where it is giving real tough
competion out there but then people remember one thing that Yamaha has a history of
giving a good race bikes all these years may be not in India but the concept is coming and
who better than yamaha can deliver such kind of bikes, Yamaha stands for performance
to the max and they surely are on a roll and will get to the top spot with new models to
come from them the huge success of Pulsar.
Yes I think the race to being the fastest Indian is getting hotter as the day goes by, most
of the bike companies are vying this spot like, Yamaha which has significantly sprung
back like a phoenix for that matter and are giving stiff competition for everyone in the
bike segment and even Karizma from Hero Honda is a great bike and gives great
performance. The forte which Bajaj Pulsar was holding for a long time would surely pass
on to others who are coming up with good versions in this category. According to me
Yamaha is the one who will dethrone Bajaj from their top position in this segment. No I
don't see this happening as Bajaj pulsar has time and again proved themselves in this
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performance based biking for a long time in India, and also with that performance they
also come up with a good mileage tag and this is where there are many takers for Bajaj
pulsar, whereas Karizma and the Yamaha series doesn't give one a great mileage for that
matter, so it would be very difficult to give competition for Bajaj Pulsar in this regard.
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The existence of barriers to entry (patents, rights, etc.) The most attractive
segment is one in which entry barriers are high and exit barriers are low. Few new
firms can enter and non-performing firms can exit easily.
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost
Industry profitability; the more profitable the industry the more attractive it will
be to new competitors
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Companies should track the customer value they provide through a method like
customer value analysis.
Companies should use a method of business planning that allows for 'action
learning', such as the war-room method of conducting business meetings.
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RESEARCH METHODOLOGY
The methodology used in conducting the research work on HERO HONDA with major
emphasis on its sales and marketing strategies involve the following steps:
Why I have selected HERO HONDA only?
I have selected Hero Honda for my summer training because it is the company that is
growing day by day. It has maximum market share with comparison to its competitors.
And it is the company that gives highest sales and it is also the highest two-wheeler
manufacturer.
Defining the problem and deciding research objectives:
Defining the objective is the most important part of any study process. Proper defining of
the problem is a must for proceeding further with the research process. The type of study
to be carried out, the questions to be raised, the sampling procedure to be followed, and
the data to be collected, all depends on a correct understanding of the problem. Also, by
clearly focusing on the real problem, the research job can be simplified and completed
with the minimum cost, effort and data.
Identified problem or the objectives of the research discussed in the report are:
1. Developing the research plan:
In this a plan was developed about how to collect the require information i.e. whom to
contact for gathering the relevant data. Data is the foundation of all research. It is the raw
material with which a researcher functions.
Therefore, it requires great care to select the sources of data. Data, or facts, may be
obtained from several sources. Data sources can either be primary or secondary.
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A. Secondary data:
The sources from which secondary data was collected:
B. Primary data:
Collection of primary data was conducted by visiting the people
personally for
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Hero Honda is spreading its wings and widening its business horizon to reach and serve
customers at new centers in the year ahead. The company services are backed by a highly
motivated and technology driven team to achieve customers need, product expertise and
geographic reach.
The study is oriented towards the concept of different brands offered by Hero Honda and
its competitors to its customers. The company has endeavored to move fast in providing
market solution, which maximize customer needs and convenience, using multiple
delivery channels in composing the agency network, service centers, lower service cost
and increased efficiency.
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As said a basic research was conducted at the company to enable the company to assess
how far the customers are satisfied with product and services of Hero Honda. During the
course of the study the following limitations were observed:
The method will be unsuitable if the number of persons to be surveyed is very less
as it will be difficult to draw logical conclusions regarding the satisfaction level of
customers.
Interpretation of data may vary from individual depending on the individual
understanding the product features and services of the company.
The method lacks flexibility. In case of inadequate or incomplete information the
result may deviate.
It is very difficult to check the accuracy of the information provided.
Since all the products and services are not widely used by all the customers it is
difficult to draw realistic conclusions based on the survey.
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% of Respondents
Urban Area
72
Rural Area
28
% of Responses
5000-10000
10
10000-15000
46
15000-20000
36
Above 20000
08
% of respondents
Performance
18
Look
11
Availability
Price
1
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Maintenance
Brand image
% of Respondents
Television
46
Magazine
36
Friends
14
Hoardings
02
Others
02
PURCHASE OF BIKE
Almost 94 % of the respondents say that they have purchased the bike by cash. Only 6%
of the respondents say that they have purchased their bike through bank loans.
Purchase Type
% of Respondents
Cash Purchase
94
Hire Purchase
06
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DECISION INFLUENCED BY
Maximum no. of the Respondents have taken decision to buy the bike on their own. After that
their friends and parents influenced them.
Influencer
% of Respondents
Parents
16
Self
54
Friends
18
Relatives
08
Others
04
RATING OF BIKES
42% of the respondents have rated as the best bike they have used, but it is facing a stiff
competition from Pulsar & Fierro.
Bikes
% rating by Respondents
Splendor
38
Passion
08
Ambition
06
Pulsar
28
Fierro
14
Others
06
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Findings:
The Indian two wheeler industry today offers more than 70 models to a buyer. And
manufacturers are launching new models every day More than 20 models were
launched in the last year.
Top this up with a variety of promises ranging from free gifts and financial schemes to
the attractive looking models and jingles in the advertisement.
In this whirlwind of speed and confusion maze, choosing the right pair of wheels can be a
trying experience for the common man.
In such a situation, the buyer has to first narrow down his search to a given category of
two wheeler. A lady doctor may decide to look only at gearless scooters while a collegian
with a rich father may only look at premium bikes.
What next? Which bike should I buy? A bike with more power better
looks more reliability errrr!
Lesser problems per vehicle for a given model could be a good enough reason to go for
the model..? Yes! But, within my selected category of premium bikes So which
premium bike has lesser problems?
Do new launches have more problems than older ones? Naa! Does PPM score depend
on who manufactured the vehicle? See for yourself!
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Sr.No.
Vehicle
PP100V
Honda
146
LML
165
Kinetic
183
TVS
196
Bajaj
196
Yamaha
223
Executive bikes scored less problems than economy bikeshowever simpler machines
like scooters have the fewest problems
This year we classified motorcycles by the market as premium, executive and
economy...
Amongst the bikes, we found the number of problems were lowest in executive bikes and
highest in economy bikes.
Executive bikes (179 PP100V), then premium bikes (209 PP100V) and last were
economy bike (230 PP100V).
ENGINE Trouble.
Splendor the largest selling executive bike from Hero Honda has reported the lowest
number of problems with ENGINE (37 PP100V) closely followed by the newly launched
geared scooter Eterno (38 PP100V) from Honda.
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TRANSMISSION WOES:
Gearless scooters/scooterettes have lowest number of TRANSMISSION problems.
Complains who fulfilled the promised performance and how much?
S No.
Manufacturer
Honda
100
LML
100
Hero Honda
67
Bajaj Auto
43
TVS
33
Yamaha
33
Kinetic
25
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RECOMMENDATION
It is clear from the report that the Hero Honda Motors is facing cutthroat competition;
hence the companys manager has to be fast and smart so as to understand the customers
needs. They have to come up with various new techniques or schemes to be able to cater
to different categories of people.
Customers are becoming more wise day by day and they are now willing to know all the
in and out of the things happening around them. This has led to increased customer
awareness.
We can analyze that if the brand is reputed that doesnt win the customers delight unless
its provided same value-added features or else we can say competitive advantage.
Surveys revealed that awareness of Hero Honda Motors is low among its target
segment for creativity awareness. The company has to take some keen step for
promotional activity.
The company should regularly send the sales person who has good
communication skill to the customers so that they should be aware about the
product and services in market and know the quality of the services offered by the
company.
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_____________________________________________
_____________________________________________
3. Phone No.
Mobile No.
___________________
___________________
4. Age
18 22 years [ ]
28 32 years [ ]
23 27 years [ ]
above 32 years[ ]
[ ]
No
[ ]
7.
[ ]
No
[ ]
Hero Honda
Yamaha
Bajaj
L.M.L.
[
[
[
[
]
]
]
]
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___________________
Sufficient
[ ]
CD dawn
___________________
Sufficient
[ ]
Passion +
___________________
Sufficient
[ ]
CBZ
___________________
Sufficient
[ ]
Karizma
___________________
Sufficient
[ ]
Very Good
Out standing
[ ]
[ ]
Very Good
Out standing
[ ]
[ ]
[ ]
[ ]
Thanks
Surveyed by:
Checked by:
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BIBLIOGRAPHY
BOOKS:
Name of the book
Author
:- Marketing research
: - Dr. C.B.Mamoria
:- Marketing research
: - Mr. Kothari.
INTERNET:
www.herohonda.com
www.google.com
www.scribd.com
www.slideshare.com
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