PROJECT REPORT

ON
Study on Consumer Buying Behaviour & Satisfaction Level
for Hero MotoCorp
A PROJECT REPORT SUBMITTED IN THE
PARTIALFULFILLMENT OF THE REQUIREMENT OF

BACHELOR OF BUSINESS ADMINISTRATION

TO

GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY

By:

AKASHDEEP KUMAR
ENROLLMENT No. 08190201712

Under the guidance of

Ms.Astha Dhupar

SHRI GURU TEGH BAHADUR INSTITUTE OF

MANAGEMENT
& INFORMATION TECHNOLOGY
(Affiliated to GGSIP University Delhi)
(2012-2015)

9
 DECLARATION
I Akashdeep Kumar, hereby declare that the project work entitled STUDY ON
CONSUMER BUYING BEHAVIOUR & SATISFACTION LEVEL FOR HERO
MOTOCORP submitted to GURU GOBIND SINGH INDRAPRASTHA
UNIVERSITY is a record of an original work done by me under the guidance of
Ms.AsthaDhupar, Faculty member, SHRI GURU TEGH BAHADUR INSTITUTE
OF MANAGEMENT & INFORMATION TECHNOLOGY

---------------------------------

(Signature of the scholar)

Name of scholar:

Enrolment No. :

Place: Delhi

Date:

10
 CERTIFICATE

This is to certify that AKASHDEEP KUMAR, 08190201712, BBA (G) student of

Shri Guru Tegh Bahadur Institute of Management and Information Technology has
done project work onSTUDY ON CONSUMER BUYING BEHAVIOUR &
SATISFACTION LEVEL FOR HERO MOTOCORP under the guidance of
Mrs. ASTHA DHUPAR

..

Signature of Director

Prof. (Dr.) P.L. Sethi

Signature of Project Incharge

Ms.Inderpreetkaur

...

Signature of Guide

Ms.AsthaDhupar

Signature of Scholar

Name of scholar:

Enrolment number:

Place: Delhi

Date:

11
 ACKNOWLEDMENT

With profound sense of gratitude and regards, I expressed my sincere thanks to my

guide and mentor Ms.ASTHA DHUPAR for her valuable guidance and the
confidence she installed in me, that helped me in the successful completion of this
project report. Without her help, this project would have been a distant affair.
Herthrough understanding of the subject and the professional guidance is indeed of
immense help to me. I am also thankful to the faculty member of our institute who
cooperated with me and gave me their valuable time and wants to thank all the
people who help me in collecting necessary information and making of the project.
I am grateful to all of them for their time energy and wisdom.

....................................................

(Signature of guide)

Name of scholar:

Enrolment number:

Place: Delhi

Date:

12
 Executive Summary
The project which i choose is on Hero Motocorp which made large variety of
products. It is not only the market leader in the two wheeler segment in India but
also is the number one two wheeler company in the world by volumes. The
companys name is synonymous with fuel-efficient bikes and longevity. The
company has a presence in all bike segments viz. economy (CD Deluxe, CD
Dawn) executive (Super Splendor, Splendor+) and premium (Karizma, CBZ).
Splendor is the most successful product of the company and accounts for almost
50% of the companys turnover.

The project covers the following topics:-

The introduction and the history of the company, strategic planning of this
company like vision , mission statement and the customer driven marketing,
strategies of company like ( market segmentation , targeting, positioning);

The project also covers the four Ps of marketing (product, price, place and
promotion strategies). It also covers about the positioning strategies like how
company sets its positive position in the minds of the consumers .it also tells the
target market of the products.

Micro and Macro environment of this company also discussed. At the last my
conclusion about the whole marketing process of the companys product. I also
give the reference of those websites which provide me relevant material. And there
commendations about this project.

Objective of the Study

To know market position of Hero bike in the market.

To know consumer behavior for purchase of two wheeler bike.

To identify the factor which influences on consumer decision?

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 To classify which types of customers visiting of Dealers with reference to age,
gender, income

To know which medium play important role for purchasing bike.

To study who is the decision make in purchasing bike?.

To study whether customers are satisfied with staff and services or not?

identifying possible areas of Improvement.

To know the status of different offers.

SCOPE OF STUDY
The main scope of the study is restricted to New Delhi.

This study has been made to find the level of satisfaction the customer has
regarding the service provider by bike place at New Delhi

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 TABLE OF CONTENTS

CHAPTER TITLE PAGE

NO. NO.
Declaration
Certificate
Acknowledgement
Executive Summary
1. INRODUCTION OF THE INDUSTRY 9

1.1 NATURE OF COMPANY 9

1.2 TYPE AND QWNERSHIP 13

1.3 ORGANIZATION STRUCTURE 14

1.4 PRODUCTION LAYOUT 17

1.5 ORGANIZATION POLICIES 23

1.6 INDUSTRY OVERVIEW 26

26
1.7 CURRENT ISSUES
2. COMPANY OVERVIEW 29

2.1HERO MOTOCORP SPREAD IN 29

INTERNATIONAL MARKETS

2.2 HEROHONDA FINALLY BECOME HERO 30

MOTOCORP

2.3 KEY COMPETITORS 31

2.4ENVIRONMENT SCANNING 33
2.5 Porters five forces model 38

2.6 MARKETING STRATEGIES 41

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 2.7 4 PS product, place, price, promotion 44

2.8 STP (segmentation, targeting, positioning) 46

2.9DISTRIBUTION CHANNEL 50

2.9.1 Promotion strategies 54

2.9.2 REASON FOR EXPENSION 57

2.9.3 REASON FOR DIVERSIFICATION 59

2.9.4 REASON FOR CONTRACTION 61

2.9.5 Comment on Organization leadership 62

2.9.6 MARKET SHARE GROWTH RATE 64

2.9.7 SWOT ANALYSIS 64

3 RESEARCH METHODOLOGY 66
4 DATA ANALYSIS 68
5 FINDINGS 88
88
5.1 FINDINGS
6 CONCLUSION AND SUGGESTION 91
7 BIBLIOGRAPHY 92
8 ANNEXTURE 93
8.1 QUESTIONNAIRE

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 Chapter -1 Introduction of the Industry
1.1 Nature of Hero motocorp
Hero Motocorp Ltd., formerly Hero Honda, is an Indian motorcycle
and scooter manufacturer based in New Delhi, India. Hero Honda started in 1984
as a joint venture between Hero Cycles of India and Honda of Japan. The company
is the largest two wheeler manufacturer in India. The 2006 Forbes 200 Most
Respected companies list has Hero Honda Motors ranked at #108.

In 2010, when Honda decided to move out of the joint venture, Hero Group bought
the shares held by Honda. Subsequently, in August 2011 the company was renamed
Hero MotoCorp with a new corporate identity. On 4 June 2012, Hero
Motocorp approved a proposal to merge the investment arm of its parent Hero
Investment Pvt. Ltd. into the automaker. The decision comes after 18 months of its
split from Honda Motors.

Hero is the brand name used by the Munjal brothers for their flagship company,
Hero Cycles Ltd. A joint venture between the Hero Group and Honda Motor
Company was established in 1984 as the Hero Honda Motors Limited
at Dharuhera, India. Munjal family and Honda group both owned 26% stake in the
Company. In 2010, it was reported that Honda planned to sell its stake in the
venture to the Munjal family.

During the 1980s, the company introduced motorcycles that were popular in India
for their fuel economy and low cost. A popular advertising campaign based on the
slogan 'Fill it Shut it Forget it' that emphasized the motorcycle's fuel efficiency
helped the company grow at a double-digit pace since inception. The technology in
the bikes of Hero Honda for almost 26 years (19842010) has come from the
Japanese counterpart Honda. These plants together are capable of churning out 3

17
million bikes per year. HeroMotoCorp has a large sales and service network with
over 3,000 dealerships and service points across India. Hero Honda has a customer
loyalty program since 2000, called the Hero Honda Passport Program.

The company has a stated aim of achieving revenues of $10 billion and volumes of
10 million two-wheelers by 201617. This in conjunction with new countries
where they can now market their two-wheelers following the disengagement from
Honda.

Hero MotoCorp hopes to achieve 10 per cent of their revenues from international
markets, and they expected to launch sales in Nigeria by end-2011 or early-2012.
In addition, to cope with the new demand over the coming half decade, the
company is coming up with their fourth factory in Neemrana, Rajasthan while their
fifth factory is planned to be set up in Gujarat.

The Hero Motocorp was started in 1984 as Hero Honda Motors Ltd.

1956Formation of HEROCYCLES in Ludhiana (majestic auto limited)

1975Hero Cycles becomes largest bicycle manufacturer in India.
1983Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed
Shareholders Agreement signed
1984Hero Honda Motors Ltd. incorporated
1985Hero Honda motorcycle CD 100 launched.
1989Hero Honda motorcycle Sleek launched.
1991Hero Honda motorcycle CD 100 SS launched.
1994 Hero Honda motorcycle Splendor launched.
1997Hero Honda motorcycle Street launched.
1999 Hero Honda motorcycle CBZ launched.
2001 Hero Honda motorcycle Passion and Hero Honda Joy launched.
2002Hero Honda motorcycle Dawn and Hero Honda motorcycle Ambition
launched.

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 2003Hero Honda motorcycle CD Dawn, Hero Honda motorcycle Splendor
plus, Hero Honda motorcycle Passion Plus and Hero Honda motorcycle
Karizma launched.
2004Hero Honda motorcycle Ambition 135 and Hero Honda motorcycle
CBZ* launched.
2005Hero Honda motorcycle Super Splendor, Hero Honda motorcycle CD
Deluxe, Hero Honda motorcycle Glamour, Hero Honda motorcycle Achiever and
Hero Honda Scooter Pleasure.
2007New Models of Hero Honda motorcycle Splendor NXG, New Models
of Hero Honda motorcycle CD Deluxe, New Models of Hero Honda motorcycle
Passion Plus and Hero Honda motorcycle Hunk launched.
2008New Models of Hero Honda motorcycles Pleasure, CBZ Xtreme,
Glamour, Glamour Fi and Hero Honda motorcycle Passion Pro launched.
2009New Models of Karizma: Karizma ZMR and limited edition of Hero
Honda motorcycle Hunk launched
2010New Models of Hero Honda motorcycle Splendor Pro and New Hero
Honda motorcycle Hunk and New Hero Honda Motorcycle Super Splendor
launched.
2011New Models of Hero Honda motorcycles Glamour, Glamour FI, CBZ
Xtreme, Karizma launched. New licensing arrangement signed between Hero and
Honda. In August Hero and Honda parted company, thus forming Hero MotoCorp
and Honda moving out of the Hero Honda joint venture. In November, Hero
launched its first ever Off Road Bike Named Hero "Impulse".
2012-New Models of Hero Motocorp Maestro the Masculine scooter and Ignitor
the young generation bike are launched.

In December 2010, the board of directors of the Hero Honda Group have decided
to terminate the joint venture between Hero Group of India and Honda of Japan in
a phased manner. The Hero Group would buy out the 26% stake of the Honda in

19
JV Hero Honda. Under the joint venture Hero Group could not export to
international markets (except Sri Lanka and Nepal) and the termination would
mean that Hero Group can now export. Since the beginning, the Hero Group relied
on their Japanese partner Honda for the technology in their bikes. So there are
concerns that the Hero Group might not be able to sustain the performance of the
Joint Venture alone.

The Japanese auto major will exit the joint venture through a series of off market
transactions by giving the Munjal familythat held a 26% stake in the company
an additional 26%. Honda, which also has an independent fully owned two-
wheeler subsidiaryHonda Motorcycle and Scooter India (HMSI)will exit Hero
Honda at a discount and get over $1 billion for its stake. The discount will be
between 30% and 50% to the current value of Honda's stake as per the price of the
stock after the market closed on Wednesday.

The new brand identity and logo of Hero MotoCorp were developed by the British
firm Wolff Olins. The logo was revealed on 9 August 2011 in London, to coincide
with the third test match between England and India.

Hero MotoCorp can now export to Latin America, Africa and West Asia. Hero is
free to use any vendor for its components instead of just Honda-approved vendors.
During the fiscal year 200809, the company sold 3.7 million bikes, a growth of
12% over last year. In the same year, the company had a market share of 57% in
the Indian market. Hero Honda sells more two wheelers than the second, third and
fourth placed two-wheeler companies put together. Hero Honda's bike sells more
than one million units per year.

Logo of Hero Honda, as the company was known till Aug. 2011

20
The Brand Trust Report published by Trust Research Advisory has ranked Hero
Honda in the 13th position among the brands in India.

1.2 TYPE AND OWNERSHIP

Type Public company

Traded as BSE: 500182
NSE: HEROMOTOCO
BSE SENSEX Constituent
Industry Automotive
Founded 19 January 1984
Founder(s) BrijmohanLallMunjal
Headquarter New Delhi, India
s
Area served India, Sri Lanka
Key people DeyaVaradhSens (Chairman)
PawanMunjal (MD & CEO)
Products Motorcycles, scooters, three-
wheeler vehicles
Revenue 239.43
billion (US$3.8 billion)
(2012)
Net income 23.78
billion (US$380 million)
(2012)
Total assets 60.58
billion (US$960 million)
(2012)
Parent Hero Group
Subsidiaries Erik Buell Racing (49.2%)

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1.3 Organization structure

Vijay sethi, vice-president and CIO, Hero MotoCorp

Vijay Sethi, vice president and CIO, Hero motocorp Vice president and CIO

HeroMotocorpVijay sethi is responsible for Information systems at Hero

motocorp.

Vijay sethi has more than 22 years of experience in the industry and consulting
environment. Prior to his current role at hero MotoCorp, he worked at Ranbaxy
and Tata Consultancy services in various IT leadership roles across global IT
management and planning, and in the development, deployment, and maintenance
of enterprise-wide applications and infrastructure projects. In the career, he has led
a number of IT integration projects for global M&As. He is a member of various
national firms including national IT and Its committee of CII, CII knowledge
Council and on the co- chairman of the IT committee of SIAM. He is the board
member and north India Region head of SAP India user group (INDUS).

Widely respected as a leading IT thought in the country, Vijay is a regular speaker

at various symposia across the globe on topics including IT strategy, information
security, cloud computing, SAP, and supply chain. He has won several prestigious
awards including global CIO-2011, CIO Hall of fame -2011, Champion CIO-2011,
INDIAs best CIOs 2010 and Indias best IT manager -2009. He has also been the
jury member for some of the leading IT and telecom awards in India.

22
Vijay Sethi has a Masters degree in industrial Engineering, MBA in Materials
Management and a Bachelors degree in Mechanical Engineering.

Hero MotoCorp, in the last year, had under gone such a large and public change
(with its rebranding, if you were living under a rock), that its hard to believe its
actually the companys second ground-breaking transformation in recent memory.

Yup, the second.

The first and possibly more important one,(at least form a bean counters
perspective)took place in 2008, a year when most other Indian companies had
battened down their hatches and were to sail out the slowdown. Thats when Hero
Motocorp decided to get ready for the sales explosion that it was sure would take
place once the slowdown loosened its icy grip on the economy.

The slowdown wasnt a permanent situation. I knew that, says Vijay sethi VP
and CIO at Hero MotoCorp. What I was worried about was whether our current
infrastructure would enable us to take up the challenges of heavy growth post-
recession, saysSethi.

To do that, would need to create a single platform for all the Hero MotoCorps
hundreds of dealers, a projects so complex it would make his first ERP project
the standard against which he measured all tough projectspale in comparison.

Steering into the skid

Flashback. Its the 31st of March 2008, and Sethi is about to walk into a budget
meeting at the companys headquarters in New Delhi. He remembers thinking
what next?

To be honest, he wasnt sure what to expect. Hero MotoCorps performance,

although better than its rivals, had been middling: it had sold as many motorcycles
as had in 2006-2007, while the industry had shrunk by 5 percent. Thats compared

23
to its average of 15 percent CAGS. Flat was the new growth during the
recession, says sethi. Many consultants advised us to cut capex and put a hold on
new expansion and investment.

But Hero MotoCorps forward-looking management team would have none of this
overly-cautious chatter. It had already decided that it wasnt going to go with the
flowit was going to row against it. So, in April 2008, it unveiled third
manufacturing unit at haridwar, today the largest two-wheeler manufacturing plant
anywhere in the world.

Creating more supply however, wasnt going to get the demand. The companys
executives figured that one of the ways they could release Hero MotoCorp from
the gravitational pull of this sales plateau was by understanding their customers
better, faster, and by doing exactly what Hero MotoCorps sales engine, its
dealers, had been asking them for sometime: Help them connect in a more
predictable, less burdensome way with Hero MotoCorp.

We wanted to ensure our ability to track customer information, sales and service
trends, defect analysis, etcetera, to enhance customer experience. Also, our
dealership network had grown to a complex mammoth and we wanted to
standardize it because it was only going to get more complex, says sethi.

Part of the problem was that Hero MotoCorps sales and marketing team interacted
with all their dealers separately, leading to a slew of interdependencies. Manual
inventory or sales updates, for example, meant a high probability of erratic
inventory management at both Hero MotoCorps end and at the dealers. Also,
without a common platform where product prices were updated on a real-time
basis, keeping up with products and spare part prices was a pain. And thats just
two of the multiple processes between dealers and Hero MotoCorp.

24
Sethi believed he could eradicate this problem and Hero MotoCorps executives
the insights they wanted if he could put all the companys dealers on a single
platform. This was the time IT could be the business biggest enabler, remember
sethi. We had to improve our customer experience and dealers experience to gain
a stronger foothold against competition.

That was the intention of a project that was christened Hero connects: To make
processes uniform across dealers, and introduce a direct, real-time, and predictable
information channel between the company and its dealers..

1.4 PRODUCTION LAYOUT

Manufacturing

Hero MotoCorp 2-wheelers manufactured across three globally benchmarked

manufacturing facilities. Two of these are based on Gurgaon and Dharuhera which
are located in the state of Haryana in northern India. The third and the latest
manufacturing plant are based at Haridwar in the hill state of uttarakhand.

Product range

Hero MotoCorp offers wide range of two wheeler products that include
motorcycles and scooters and has set the industry standard across the entire market
segment.

1. HF Dawn

2. HF Deluxe

25
3. Pleasure

4. Splendor +

5. Splendor NXG

26
 6. PassionxPRO

7. Passion Pro

8. Super Splendor

27
9. Splendor PRO

10. Glamour

11. Glamour PGM FI.

28
12. Achiever

13. CBZ Xtreme

14. Hunk

29
15. Karizma

16. KarizmaZMRma ZMR

17. Maestro

30
18. Impulse

19. Ignitor

1.5Organization policies

Caring for ecology

A company that believes in maintaining ecological standards along with

business standards.

31
 We must do something for the community from whose land we generate our
wealth.

-Chairman Dr.BrijmohanLallMunjal..

At Hero MotoCorp, our goal isnt limited to business but encompasses the
broader spectrum of serving humanity through social initiatives. Hero
MotoCorp takes a stand as a socially responsible enterprise respectful of
its environment.

Hero MotoCorp has been strongly devoted not only to environmental

conservation programs but also expresses the increasingly inseparable
balance between economic concerns, environmental and social issues
faced by business. A business must not grow at the expense of mankind
but must serve humankind at large.

1.6 Quality policies

Excellence in quality is the core value of Hero MotoCorp 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:

Innovation in products, processes and services..

Continuous Improvement in our total quality management system.
Teamwork and responsibility

Environment policies

We at Hero MotoCorp have been committed to demonstrate excellence in our

environmental performance on a continuous basis, as an intrinsic element of our
corporate philosophy to achieve this we commit ourselves to:

Safety policies
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 Integrate environmental attributes and cleaner production in all our business
processes and practices with specific consideration to substitution of
hazardous chemicals and strengthening the greening of supply chain.
Continuous product innovations to improve environmental compatibility.
Comply with all applicable environmental legislation and legislation and
also controlling our environmental discharges through the principles of
alara (as low as reasonably achievable).
Institutionalize resource conservation in the areas of oil, water, electrical
energy, paints and chemical.
Enhance environmental awareness of our employees and dealers / vendors,
while promoting their involvement in ensuring sound environmental
management.

We believe that safe work practices lead to better business performance, motivated
workforce and higher productivity.

We shall create a safely culture in the organization by:

Integrating safety and health matters in all our activities.

Promoting safety and health awareness amongst employees, suppliers and
contractors.
Continuous improvements in safety performance through precautions
besides participation and training of employees.
Ensuring compliance with all applicable legislative requirements.
Empowering employees to ensure safety in their respective work places.

1. 7INDUSTRY OVERVIEW

India, the worlds second-fastest growing auto market, it in top-gear growth. The
country is a hot destination for automobile manufacturers due to its robust

33
economic growth, favourable demographics, higher disposable income, changing
lifestyle and positive industrial eco-system. India is expected to become the third
biggest automaker in the world within next decade, according to Diane H Gulyas,
president, DuPont Performance polymers. Owing to its vertical and horizontal
integration with other key segment of the economy, the industry is said to be a
major growth driver

Competition pressures

While the company has lined new product such as the 110cc passion x pro bike and
125cc motorcycle Ignitor for launch in FY13, it is likely to face increasing
competition in the executive segment from Honda and TVS. While Honda will pull
out all the stops to market its 110cc dream yoga, tvs is also expected to relaunch its
popular bike, victor, in a new avatar. Bajaj, too, is expected to launch a bike in
this segment.

1.8Current issues

Labour unrest brews at Hero MotoCorps\Gurgaon unit

Following a series of pay increment in the Gurgaon-Manesar automobile belt, a

labour problem seems to be brewing over wage settlement teams at the Gurgaon
unit of hero MotoCorp, promoted by the manuals. The immediate trigger could
have been increment at the manesar factory of former partner Honda motorcycle
and scooter India (HMSI)

For the past 15days, workers at the hero factory have been wearing black arm-
bands and abstaining from tea within the premises. A company spokesperson,
commenting on the issue, said: wage negotiations are on and talks are progressing
amicably.

34
However, a representative of the employees union at heros gurgaon unit,
elaborating on the wage talks, informed: the management is offering only a
marginal hike over that offered to workers at the Dharuhera unit, though cost of
living in Gurgaon is much more expensive.

We produce more two-wheeler than Hondas manesar plant. Why should not be
given a similar wage hike?

WAGE WARRIOR

Recent increments in the automobile sector (wage hike over a three-year period)

MARUTI SUZUKI

GROSS SALARY: 50% increase to Rs 14,800

TRAVEL ALLOWANCE: of Rs 1,200

INTEREST-FREE PERSONAL LOANSS: Of up to Rs 20000

INSURANCE COVERAGE: Double to Rs 5,500

2800 permanent workers at Gurgaon and 700 at manesar to benefit

Hyundai Motor

WAGES: 45% increase to Rs 11,000-13,000 per month.

AVERAGESALARY HIKE

Of Rs 14,283 per month

2,007 permanent workers at Chennai factory to benefit

Honda Motorcycle& scooter India

SALARY INCREASE: Of50% to Rs 14,770

35
ADDITION BENEFITS: Those in the form of diwali bonus, improved med
claimpolicy, production bonus, attendance bonus and model and new model launce
incentive added

1800 permanent workers at manesar to benefit

36
 CHAPTER-2 COMPANY OVERVIEW
2.1 HERO MOTOCORP SPREAD IN INTERNATIONAL
MARKETS

Hero Motocorp, the wheeler manufacturer, is planning to spread its wings in the
international market by designing and developing new future products according to
the global markets by the end of this financial year.

The munjals led firm has already scheduled the launch of hybrid scooter leap and
is working on the other products to expand its footprint overseas, said the media
report. The leap is not only targeted at Indian customers but is for the global
market. In fact, all future product developments plans will be fed by Indian as well
as global requirement. That is why we do not term it exports operation but call it
over international business. Our idea is not to see what we have and what we can
give but to address what the market requires. All future products will be based on
this principal, Hero Motocorp, senior vice president (sales & marketing), Anil dua
told media.

Hero motocorp hasindentified 30 countries to establish its presence in the

international market and has planned to enter 8-10 new markets in Africa and Latin
America by the of the current fiscal year.

Moreover, Hero is targeting at 10 percent of total revenues of USD 10 billion form

its international business by the end of the decade and to meet upon the targets
company would set up assembly plants in Kenya, Nigeria, Columbia and
Bangladesh.

2.2 HEROHONDA FINALLY BECOME HERO MOTOCORP

37
Heres the much awaited news in the Indian 2 wheeler market. I started posting
about third news in Bike Advice and here it now. Hero Honda has finally become
hero motocorp. This much anticipated news is now implemented. The company is
the largest two wheeler manufacture in India.

The 2006 Forbes 200 most respected companies list had Hero Honda motors
ranked at 108 which enabled the world to know about this great brand. Also, the
brand trust report published by trust research advisory has ranked Hero Honda in
the 13th position among the brands in India.

Hero is the brand name used by the Munjal brothers flagship company Hero cycles
Ltd. A joint venture between the Hero Group and Honda motor company was
established in 1984 as the hero Honda motors limited at Dharuhera, India. Munjal
family and Honda group both own 26% stake in the venture to the Munjal family.

During the 1980s, the company introduced motorcycles that were popular in India
for their fuel economy and low cost. A popular advertising campaign based on the
slogan fill in shut it forget it that emphasized the motorcycles fuel efficiency
helped the company grow at a double-digit pace since inception. The technology in
the bikes of Hero Honda for almost 26 years (1984-2010) has come from the
Japanese counterpart Honda.

Hero Honda has three manufacturing facilities based aDharuhera, Gurgaon in

Haryana and at haridwar inuttarakhand. These plants together are capable of
churning out 3 million bikes per year. Hero Honda has a large sales and service
network with over 3,000 dealerships and service point across India. Hero Honda
has a customer loyalty program since 2000 called the hero Honda passport
program.

In December 2010, the board of directors of the hero Honda decided to terminate
the joint venture between hero group of India and Honda of Japan in a pleased

38
manner. The hero group of India would buyout the 26% stake of the Honda in
jvHonda. Under the joint venture hero group could not sell into international
markets and the termination would mean that hero group can exploit global
opportunities now. Since last 25 years the hero group relied on their Japanese
partner Honda for R&D for new bike models. So there are concerns that the hero
group might not be able to sustain the performance of the joint venture alone.

When there were rumours that the company depends totally on its Japanese
counterparts- Honda for all its R&D and that the company would face a tough time
following the exit, the company proved the concept wrong with a series of
upgraded (face lifted actually) bikes making the company to be in the limelight
always. The company has bikes right from 100 cc to the 225 cc. The pleasure
scooter is also a decent performing vehicle for the company.

2.3KEY COMPETITORS

The street will be keenly monitoring the battle between Honda and Hero, given
that the executive segment accounts for about two-thirds of overall motorcycle
sales, and that Honda was until recently Heros partner(for 26 years), with equally
good understanding of the Indian market.

Hero currently dominates the executive segment, with 74 percent market share.
Due to an estimated slowing in the sector, citi has cut volume forecasts for Hero
and anticipates slight erosion in its market share, particularly in the executive
segment. The battle in the segment, however, will be played out over along term,
with Hero unlikely to yield much in the short term, believe experts.

Says the head of research at a leading brokerage firm, Though Hero Motocorp
will shed some market share, the gains for competition in the short term will be
marginal, as Hero still has enough brand pull and distribution reach. As a

39
comparison, while Hero has a 4000 dealer network, Hondas is just a fourth of this.
This will be difficult to replicate any time soon.

If the Honda bike is successful, it could generate sales volumes of 500000-750000

units annually. The increment market share Honda would capture within the
commuter bike segment in fy14 would be six to nine percent, feelciti analysis.

Scooters, export focus

Hero is also looking to improve its share of the scooter market, currently 16
percent. Unlike motorcycle, this segment expected to clock another year of higher
volume, with growth estimates pegged at a little over 15 percent. The company has
recently launched a gearless scooter, the maestro. While analysts say it is too early
to predict its impact on the segment (dominated by Hondas active), Vijaysarthy T
S and N Ravindranathan of spark capital say the launch is likely to impact sales of
TVS Wego. Hero is also likely to test market its hybrid scooter, the Leap, later this
year.

The other area which could open substantial opportunities for hero is expert,
current at two percent of its volumes. The company has an export target of a
million units by 2016-17, from just over 100000 currently. Heros managing
director and CEO, PawanMunjal, has already indicated exports would be a focus
area and at the company was targeting opportunities in markets such as Africa and
Latin/central America. To compete effectively, both in the premium end of the
domestic market as well as exports, the company recently entered into a strategic
tie-up with US-based Erik Buell Racing. Analysts say the move will help the
company turn the heat on Bajaj Auto in the premium segment and offset some of
the pressure in the executive segment.

Hero MotoCorp Ltd. Competition

40
Hero MotoCorp is putting forth an spic performance in the manufacture of two-
wheeled motor vehicles. Serving the Indian market, hero MotoCorp (formerly
Hero Honda Motors Ltd).Sells more than 3 million bikes annually with offerings
ranging from fuel-efficient scooters to powerful motorcycles. The company,
considered the largest two-wheeler manufacturing company in the world, export to
Africa, Asia, Eastern Europe, and Latin America. Hero MotoCorp started as a joint
venture between hero Group (run by the Munjal family) andHonda, Motors. In
mid-2011 Honda sold its 26% stake In Hero MotoCorp to hero Group. CEO
PawanMunjal and the Munjal family own 52% of Hero MotoCorp.

Top competitor for Hero MotoCorp Ltd.

Get a clear understanding of a company competitive landscape.

Competitors

1. Suzuki motor competitor.

2. Yamaha motor competitors.

3. Bajaj auto limited.

2.4 Environment scanning

Pest analysis

A PESTanalysis is used to identify the external forces affecting an organization.

This is a simple analysis of an organizations political, economical, social and
technological environment. A Pest analysis incorporating legal and environment
factors is called a PESTLE analysis.

Social environment

We would like our vendors to undertake the following action and demonstrate
continual improvement in their environmental performance:

41
 Establish the environmental footprint of their operations.
Develop green management policies to promote conservation of natural
resources.
Institutionalize an effective compliances management tool within the
business strategy.
Monitor the pollution load (emission, effluents, wastes, hazardous/ non-
hazardous/other types, etc.) released in the ambient environment.
E generation from the processes.
Improve environmental performances by adopting pollution prevention
strategies.
Set targets to reduce water, energy utilization and waste.

Be a safe hero

As a world leader in the two wheeler and a caring company, Hero MotoCorp
has taken up the initiative to inculcate a sense of road safety and riding habits
amongst its customers and public at large assisting individuals in making the
right judgments on the road, and helping them choose the right riding gear that
can have save your life!

Safety riding education is made an integral part of the motorcycle delivery at

the 4s dealership (sales, service, spares and safety). These dealership have a
specially designed interface called the safety corner where advisors educate the
customers on correct riding techniques and provide important and information
related to health, safety, environment, road signs, first aid,etc.using specially
designed audio visual communication.

POLITICAL ENVIRONMENT

The first element of a PEST analysis is a study of political factor. Political factors
influences organization in many ways. Political factors can create advantages and

42
opportunities for organization. Political factors include the following types of
instrument:

- Legislation such as the minimum wages or anti discrimination laws.

- Voluntary codes and practices

- Market regulations

-Trade agreements, tariffs or restriction

-Tax levies and tax breaks

-Type of government regimeeg communist, democratic, dictatorship

Non conformance with legislative obligation can lead to sanctions such as fines,
adverse publicity and imprisonment. Ineffective voluntary codes and practices will
often lead to governments introducing legislation to regulate the activities covered
by the codes and practices.

ECONOMICAL ENVIRONMENT

The second element of PEST analysis involves a study of economic factors. All
businesses are affected by national economic factors. National and global interest
rate and fiscal policy will be set around. Economic condition. The climate of the
economy dictates how customers, suppliers and other organizational stakeholders
such creditor behaves within society. An economy undergoing recession will be
high unemployment, low spending power and low stakeholder confidence.
Conversely a booming or growing economy will have low unemployment, high
spending power and high stakeholder behaviour. Furthermore organization will
need to review the impact economic condition...

TECHNOLOGICAL ENVIRONMENT

43
Hero Motor Corp. announced US-based Erik Buell Racing (EBR) as a technology
partner on Wednesday. Founder Erik Buell is renowned for his engineering skill in
motorcycle racing. In 1983, he started a company making motorcycles in
Wisconsin. Harley- Davidson eventually took over the unit, distributing the Buell
Motorcycle company machines through its dealerships. But the global slump saw
the Buell division being closed in 2009. Buell launched Erik Buell Racing (EBR)
shortly after that. Pawanmunjal,

Is the partnership confined to technology sharing or will there be equity

involvement as well?

PawanMunjal, CEO, Hero MotoCorp.

We will come to that at a later stage. Right now its more about technology.

Will EBR be your only technology partner?

No, we will have multiple alliances. We will be looking at specific and niche
experts in various areas and various plans.

Will EBR also help with design?

They will be working at our R&D (research and development) centre in close
association without engineers. There will be a lot of synergies. On the design
aspect, we will get back to you as and when there is progress.

This is being done jointly. Their people will come and work with us in our R&D.
our people are stationed there. They are working together. Training is happening at
both ends. At our end, we are investing in R&D and people. Its not something that
happens overnight. It will take at least a couple of years for our own R&D to be
fully equipped. Also, we are not starting from scratch. We have the basic
infrastructure. We were doing a fair amount

Green Vendor development program

44
The green vendor development program of Hero MotoCorp is the supply chain
initiative drive taken to extend the corporate environment responsibility down the
supply chain. It is based one-to- many mentoring program. As the production is
increasing at hero motocorpfacilities, the manufacturing activities at the vender end
are also increasing in the same proportion, thus giving rise to the environmental
load. In an order to improve the vendor environmental performance hero motocorp
has developed this exclusive vendor development program, which is a
collaborative effort between the hero motocorp environmental group and the
materials department, in order to influence the vendors to adopt pre-specified
environmental requirements undertaken environment initiatives. Undertaken
environment initiatives.

We at Hero motocorp ltd. (HMCL) are continuously striving for synergy between
environment and technologies, by providing products and services that meet the
quality, performance and price aspirations of our customer. While doing so , we
maintain the highest standards of ethics and societal responsibilities.

At Hero Motocorp environmental protection and preservation is one of the core

business values. As a responsible corporate citizen, we believe that we can improve
environmental generation in our premises but also partner with vendors to ensure
that they adopt similar environmental management strategies. Hero motocorp,
expanding the horizons of its environmental practices, is launching a green vendor
development program (GVDP) in collaboration with our business partners.

2.5 Porters five forces model

Porter five forces analysis definition

Porter five forces analysis is a framework for industry analysis and business
strategy development. It draws upon industrial organization (IO) economics to
derive five forces that determine the competitive intensity and therefore

45
attractiveness of a market. Attractiveness in this context refers to the overall
industry profitability. An "unattractive" industry is one in which the combination of
these five forces acts to drive down overall profitability. A very unattractive
industry would be one approaching "pure competition", in which available profits
for all firms are driven to normal profit.

The five forces model has three components that measure competition. External
forces include: intensity of existing rivalry, threat of substitutes, and threat of new
competitors. These forces are out of the control of the subject company, whereas,
internal forces (bargaining power of suppliers and bargaining power of customers)
are a direct result of the subject companys decisions. The combination of these
forces determines the level of competition that will affect the subject company.

The Five Components of posters five forces model are listed below:-

Intensity of existing rivalry (external): This is usually the most important

determination of competitive forces. It gauges the level of competition
between rivals that compete directly on prices and quality. Examples
include: low exit barriers and low storage costs.
Threat of substitutes (external): The availability of substitute products
increases the chances that a business will lose customers; thus, substitution
risk lowers profitability. Examples include: limited number of substitutes
and high cost of switching to substitutes.
Threat of new competitors (external): new competitors are often drawn to
an industry because of the opportunity to make profits. When new
competitors enter markets, they become rivals to existing market
participants, which tends to lower the profitability of all market participants.
An increase in competition lowers profit with all else staying the same.
Examples of the external component include: patents limiting new
competition and industry requires economies of scale.

46
 Bargaining power of suppliers (internal): The more pressure suppliers
can exert on a company, the more bargaining power they have over that
company. Bargaining power generally increases profitability for the party
that exerts it. Examples that affect bargaining power to suppliers include:
volume is critical to suppliers and there are diverse distribution channels.
Bargaining power of customers (internal): The more pressure customers
can exert on a company, the more bargaining power they have over that
company. Bargaining power generally increases profitability for the party
that exerts it. Examples that affect bargaining power to customers include:
limited buyer choice and large number of customers.

How Does Porters Five Forces Analysis Improve?

Wiki Wealth uses the five forces template to improve the qualitative analysis for
each investment research report. Generally, the more competitive an industry,
less profits are available to each participant. Therefore, investors should look
for industries with low competition. The five forces analysis helps to model the
characteristics that affect competition.

Sum of the worlds knowledge to produce the highest quality research reports
for over 6,000 stocks, ETFs, mutual funds, currencies, and commodities. To
ensure quality, Wiki Wealth reviews all inputs

HERO MOTOCORP FIVE FORCES ANALYSIS

1. Intensity of Existing rivalry

Large industries allow multiple firms and produces to prosper without having to
steal market share.

When industries are growing revenue quickly, they are less likely to compete.

47
 2. Bargaining power of suppliers

High levels of competition among suppliers act to reduce prices to producers.

This is positive.

The more diverse distribution channels become the less bargaining power a
single distributor will.

When suppliers are reliant on high volumes, they have less bargaining power,
because a producer can.

3. Threat of Substitute
Unlimited number of substitute.
Substitute products are inferior.

4. Bargaining power of customers

When buyers are less sensitive to prices, prices can increase and buyers will still
buy the product.

When customers cherish particular products they end up paying more for that one
product.

2.6 MARKETING STRATEGIES

PRODUCTS OF A COMPANY

Hero MotoCorp offers wide range of that include and scooters, and has set the
industry standards across all the market segments.

48
 PRODUCT UNITS INSTALLED PRODUCTIVE SALES SALES
CAPACITY QUANTITY QUANTITY VALUE
NAME
(RS
CRORES)

Motorized N.A 0.00 0.00 6235205.00 23494

Two
Wheelers
up to 350cc
engine
capacity
Spares N.A 0.00 0.00 0.00 1529.9
(Two
Wheelers)
Other N.A 0.00 0.00 0.00 108.80
Operating
Income
Other N.A 0.00 0.00 0.00 53.480
Services
Duty N.A 0.00 0.00 0.00 48.700
drawback
Scrap N.A 0.00 0.00 0.00 17.960

PRODUCTS OF A COMPANY

ALL bikes and scoter models of Hero in India

49
50
51
2.7 4 PS product, place, price, promotion

Hero motocorp ltd. (formerly hero Honda motors ltd.) is the worlds largest
manufacturer of two- wheelers, based in India. In 2001, the company
achieved the coveted position of being the largest two wheelers
manufacturing company in India and also, the world no. 1 two- wheeler
company in terms of unit volume sales in a calendar year. Hero motocorp
ltd. Continues to maintain this position till date.
The story of hero Honda began with a simple vision- the vision of a mobile
and an empowered India, powered by its bikes. Heromotocorp ltd.,
52
 companys new identity, reflects its commitment towards providing world
class mobility solutions with renewed focus on expanding companys
footprint in the global arena.
Hero MotoCorps mission is to become a global enterprise fulfilling its
customers needs and aspirations for mobility, setting benchmarks in
technology, styling and quality so that it converts its customers into its brand
advocates. The company will provide an engaging environment for its
people to perform to their true potential. It will continue its focus on value
creation and enduring relationships with its partners.
Hero MotoCorps key strategies are to build a robust product portfolio across
categories, explore growth opportunities globally , continuously improve its
operational efficiencies, aggressively expand its reach to customers,
continue to invest in brand building activities and ensure customer and
shareholder delight.

PLACES

Hero motocorp are manufactured across three globally benchmarked

manufacturing facilities. Two of these are based at gurgaon and Dharuhera which
are located in the state of Haryana in northern India. The third and the latest
manufacturing plant are based at haridwar, in the hill state of uttarakhand.

PROMOTION

In the 1980s the company pioneered the introduction of fuel- efficient,

environment friendly four strokes in the country. It became the first to launch the
Fuel Injection [FI] technologyin; with the launch of the
in June 2006.

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

53
Hero motocorp, in its endeavour to remain a pioneer in technology, will continue to
innovate and develop cutting edge products and processes

PRODUCTS

Hero motocorp offers wide range of that includes motorcycle and scooters, and has
set the industry standards across all the market segments.

BRAND AND PRICES

The new hero is rising and is poised to shine on the global arena. Companys new
identity Hero MotoCorpLtd.Is truly reflective of its vision to strengthen focus on
mobility and technology and creating global footprint. Building and promoting
new brand identity will be central to its initiatives, utilizing every opportunity and
leveraging its strong presence across sports, entertainment and ground- level
activation.

2010-11 PERFORMANCE

Total unit sales of 54, 02,444 two- wheelers, growth of 17.44 per cent total net
operating income of INR 19401.15 crores, growth of 22.32 per cent Net profit after
tax at INR 1927.90 Crores total dividend of 5250% or INR 105 per share including
Interim Dividend of INR 70 per share on face value of each share of INR 2 each
EBITDA margin for the year 13.49 per cent EPS of INR 96.54

2.8 STP (segmentation, targeting, positioning)

Segmentation

Dua said Hero MotoCorp is trying to create a new segment in the market with the
impulse. We are not positioning Hero Impulse as a niche segment motorcycle. We
are targeting all the typing 150-cc bikers who have desires to do off-road activities
with their motorcycle.

54
Initially, the company will target metros and tier-I in the first phase and then
gradually reach out other smaller cities and towns for the new models, Duasaid .To
promote the Hero Impulse the firm, which is one of the sponsors of the outgoing
India-England cricket series, is giving away Hero Impulse motorcycle to a player
who excels with both bat and ball in a match.

The idea is to bring out the dual purpose of the hero Impulse, he said, adding that
the company would also conduct test ride in different cities. We are not looking at
this bike as a niche product, but trying to have an extensive market reach, he
added. Is hoping to compensate for falling motorcycle sale by pushing scooter sale.
The company is aiming to take scooter sales from the current 7% to total sales to
12% over the next one year. So as Hero gets ready to take on former partner Honda
in the scooter market, Ronojoybenerjee of CNBC-TV 18 says opinion is divided on
the timing of this move.

Increase competition and pressure on market share in the motor cycle segment
could push Indias largest bike market to step up its focus on its scooter business.

Hero Motorcycle wants to increase the share of scooter sales to about 12% of total
from the current 7% at present. For this purpose, the company is now looking as
increasing production of scooter and will also look at beefing up its current product
offerings. The move does not come as surprise as the companys sales in the
second quarter of this fiscal recorded a 14% decline the sharpest fall in 10 years
that dragged the companys net profit for the quarter to Rs 441 crore --- lower by
27%.

Anil Dua, senior vice president marketing & sales, Hero Motor Corp, says that
scooter is an important business for the company. We are increasing scooter
production to 60,000 units per month from 40,000. We will increase our overall
scooter sales to two-wheelers also to 12% from 7-8% now. The scooter market is
likely to become 25% of the market we will keep growing this business.

55
With a plan to increase capacity to 10 million units with the addition of its
manufacturing facilities in Gujarat and Rajasthan, Hero Motor corp. over all
scooter shares could be well over one million unit mark in the next few year. Hero
entered the scooter segment in2006 in market that former scooter specialist decided
to exit.

Since then of scooter sales to the overall two-wheeler business has increased two-
fold to nearly 20% for the financial year. while overall motorcycle sales has
declined marginally the scooter segment led by Hondas Activa and Heros
pleasure and maestro has jumped over 20% nearly 60% of HMSIs total sales from
scooters today.

YS Guleria, vice-president, sales &marketing, HMSI, says that we cannot

comment on what competition is doing but we are ready for any challenge. We are
ready for any kind of challenge. We are clear market leaders in automatic scooters.
We have exciting product plans lined up hence we will not give away ground to
other players in the market.

Going the scooter way may not be the answer to Hero Motor Corps problems.
Honda is the clear market leader and Hero will struggle to find its feet without a
technology edge or a clear brand positioning. It may also prudent for Hero to open
a new battle front at this time as it struggles to secure its leadership in the
motorcycle market.

TARGETING

First call research has recommended hold rating on with a target price of Rs 1969in
its march 11, 2013 research report.

Hero MotoCorp has merged with Hero Investment Pvt. Ltd to create incremental
shareholder value of Hero Motor Corp Ltd. Hero Motocorp commenced
construction of its fourth manufacturing plants and the global parts centre in

56
Neemrana in Rajasthan with an investment of about Rs. 550 crore. During the
quarter, the robust growth of Net sales is increased by 2.59% to Rs. 61876.20
million. Hero MotoCorp has also soon going to announce the launch of Brand
Hero in its new markets in Latin America and Africa. Hero Motocorp sold a record
5, 57,797 units of two wheelers in January this year. This is HMCLs highest-ever
sales for any single month. The company new facilities are expected to be
operational towards the end of the financial year 2013-14, Net sales and pats of the
company are expected to grow at a CAGR of 9% and 5% over 2011 to 2014E
respectively. The companys net profit decreased to Rs.4878.90 million against
Rs.6130.30 million in the corresponding quarter ending previous year, a decrease
of 20.41%. Revenue for the quarter rose by 2.59% to Rs. 61876.20 million from
Rs60 million when compared with the prior year period. Reported earnings per
share of the company stood at Rs 24.43, registering 20.41% decreased over
previous year period. Profit before interest, depreciation and tax is Rs.8687.50
million as against Rs.10192.70 million in the corresponding period of the previous
year.

POSITIONING

Indias largest two wheeler maker Hero MotoCorp today said it will soon start
selling the first Hero branded bike to be launched after the break-up of Hero
Honda last year, impulse in the Indian market at Rs 66,800 (Ex-Showroom, Delhi),
according to a BS report quoting PTI.

The company is positioning the new 150-cc motorcycle as a dual purpose vehicle
that can be used for both normal commuting as well as off-road adventure. It is
using the ongoing India-England cricket series as a platform to promote the new
product, said the report.

Hero Impulse is the first motorcycle from us which will be sold only under the
Hero brand. We have already started dispatched and it will soon be available at

57
showrooms in metros and tier-I cities, Hero MotoCorp Senior Vice-president
(marketing and sales) AnilDuatoldtheagency.

While announcing the new brand identity of the company in August this year in
Landon, Hero MotoCorp had introduced Hero Impulse and a 110-cc scooter, Hero
Maestro, to be sold under the hero brand, As per our agreement with Honda, this
bike is with the support of their technology and we are not selling it under the Hero
Honda brand, motorcycle.

2.9DISTRIBUTION CHANNEL

The host city for the 2012 Olympics was burning on the night of august 9. Landon
was convulsed by the worst rioting in Britain in living memory. The memory paper
was emblazoned with the silhouette of a woman jumping from a building in
flames. Policemen moved through apocalyptic streets, hunting thugs and looter to
the rise and fall of sirens.

But in a surreal scene only Bollywood could have conjured up, a different kind of
pyrotechnics was exploding on the Southbank of the Thames, in the massive
Millennium Dome, now called the 02 Arena

There, amidst fireworks, a laser show, prancing heroes and heroines, and the
obligatory ode A.R. Rahman, the main item descended from rafters Hero
MotoCorps new logo three geometric chunks forming an isometric H to the
hoarse cheers of 1300 dealer, vendors and employees led by Pawan Kant Munjal.
Less than eight months earlier, Munjal and his merry men were there to
celebrate as divorce parties go, this one too, was a bit over the top, brimming with
optimism about the future. But no one badmouthed the erstwhile spouse. Instead,
Honda was fondly remembered. That may be because Hero got a true sweetheart
deal; it got to keep the house, the car and the kids. The Munjalfamily, the
Promoters of Hero, who held 26 percent, the same as Honda, got to buy out the

58
partner at a price significantly lower than the market price rumours put the
confidential price at half the market value. Hero can launch products with Honda
technology till June 2014 and can continue to sell them for as long as it wants.
Hero Hondas exports were confined to some minor abroad since Honda did not
want a clash with its export from Japan; Hero MotoCorp can go anywhere.

Not surprisingly, it was with palpable ebullience that pawan Kant Munjal, who was
just30 years old when his father Brij Mohan Lall forget the venture with Honda in
1984, walked on to the 02 stage and said the company held the event in London to
showcase our new global ambitions as well as to highlight both our legacy and
modernity, like London does. Thats a long journey for a group that started with a
small cycle repair shop in old Delhis Chandnichowk a year the Independence and
later moved to Ludhiana to set up Hero Cycles. Until the tie-up with Honda, the
munjals, who came from Pakistan in the aftermath of the dreaded partition, were
known just for their Ludhiana-made cycle.

Twenty-seven years later, the Munjals once again need to invoke the Ludhiana
spirit the town in Punjab is known to spawn entrepreneurs, including the
countrys telecom czar Sunil Mitttal to face life after Honda.

They have begun on a good note, but a good divorce settlement can ensure only
short-term happiness; it does not guarantee the proverbial happily-ever-after. That
is what Hero Honda shareholder family of 67,000 would be sweats over. A part of
the 30-share sensitive index of the Bombay stock Exchange, the is one large cap
which is actively traded and is among the top 25 stock by trading volume.

As many of you might know, responsibilities get shared when you live as a couple.
When you are single, there is always something that causes a headache. It could be
the plumbing, the cooking, or the electrician may not turn up. And there is the fine
print of the divorce; here is paying Honda Rs 2479 crore as license and exports
fees. That is 14 percent of heros 2010/11 revenues.

59
Ravi Sud, Heros chief financial officer, says the figure will go down just 2.2
percent of 2013/14 revenues on a pro-rate basis. However, this is about more than
just money. This shows how dependent Hero was - and is on Honda for
technology.

Among Indian two wheeler companies, only Bajaj Auto, which morphed under
Rajiv Bajaj from a scooter maker into a motorcycle company in the late 1990s, has
done well on its own. It has had a technology tie-up no equity partnership with
Kawasaki of Japan, but its biggest success of the recent years, the Pulsar, was
developed in-house.

Bajaj does not even share the badge with Kawasaki any more, though it sell some
high-end motorcycles imported from Kawasaki under its premium prebaking
network.

On the other hand, Kinetic, promoted by the Pune-based Firodia family, collapsed
after Honda walked out of their scooter making joint venture. LML, promoted by
Kanpur-based Deepak Singhania, is making a feeble comeback with electric
scooters after its Vespas disappeared in the aftermath of its breakup with Italys
Piaggio. TVS, which split with Suzuki, carries on and develops new products in
house, but it has always been, despite the thrust provide by stepthrough, a distant
third in the two-wheeler market- making little of chairman Venuesrinivasans
avowed ambition to overtake Bajaj.

While Hero has done significant work on stayling and design of its products for
a few years now, Munjal admits that the company has little know-how of its own in
the crucial engine and gearbox departments(see box: Cracking the Bajaj Code).
Hero MotoCorp unveiled two new products in London, a scooter named Maestro
and a motorcycle named impulse. The two with wear the Hero badge no Honda
there but have been developed in association with the Japanese
company.

60
Every village householdIn the financial year, four million motorcycles were sold
outside the metros and big cities, giving 45 percent of the total sales to rural and
semi urban areas. These are markets where it is not easy to outpace the company
which made its bone in cycles. If this outlet does not get you, the next one will.
Hero has more than 4500 touch point across the country, almost double then 2300
it had in early 2006, and expects to have 5000 by March next year, including over
800 full-fledged dealers (several dealers own the multiple outlets).

Bajaj has 589 dealers, according to its latest annual report. Small towns,
villages we are everywhere, says Anil Duas, Senior vice President, Marketing
and Sales, Hero MotoCorp. Add to this Heros focus on rural sales, which have
increased from 45 percent of the total in 2007 to 47 percent, and you begin to
understand why Hero Hondas share of the motorcycle market stands at 56.5
percent, well ahead of Bajajs 25 percent and the below seven percent share of
Hondas fully owned subsidiary, Honda Motorcycles and Scooters India, or HMSI
Rajiv Bajaj outside Bajaja^TMs Pune plant Cracking the Bajaj Cod Around the
turn of the century, scooter lost their appeal. I soon become apparent that Hondas
fully owned subsidiary Honda Motor cycles and scooter India, would be the only;
major votary of the stolid vehicle that had carried Indian families for decades. The
other would, at best, look at scooter as supporting cast to the protagonist; the
agilesturd .Motorcycle, whose utility on Indian terrain could not be hatched by
scooters.

Bajaj Auto, which had risen to the top on the back of its scooters- in the 1980s, it
was common or buyer to wait for a decade to get a Bajaj embraced motor cycles
with the zeal of the new convert. Going the whole hog, the company, which was
converted into an out-and-out motorcycle maker by Rajiv Bajaj, the elder of the
two sons of Chairman Rahul Bajaj, also wanted to be self-reliant in technology. It
invested heavily in research and development, not only in the simpler frame and
aesthetic department but also in engines.
61
The result was the dual Twin spark, or DTS, engine which went into that boy
racers dream, the Pulsar, which continues to dominate the 150cc segment. Which
Hero and Honda have managed to chip away at its lead, Bajaj is still reaping the
dividends of its R&D efforts.

Can Hero match that? Managing director Pawan Kant Munjal says he has had a
large R&D team working mainly on the frame and looks of our products, but he
concedes that they are a bit thin on the engine side of thing. Heros success in the
Indian market has been on the back of Hondas reliable 100cc engine, which has
surprised many its longevity. Barring a few tweaks, the same engine has been
driving products for two decades.

Until June 2014, Heros fortunes remain tied to Honda, as the Japanese company
will continues to provide technology (read engine). New products after that will
have to be developed without Honda. Munjal talks about a group of Japanese
people with whom Hero will jointly develop products. This, while boosting in-
house R&D at the factory in Dharuhera, Haryana. I am quite sure we can do this,
says Munjal.

2.9.1 Promotion strategies

Not only do manufacturers have to develop innovative new products, they have to
create high capacity channels and reduce channel conflict. The success of your
product or service is riding on the quality of your channel strategy.

1. As tough as it is for marketing executive to make channel strategy

changes, its even worse to jeopardize your success by running your
business on cruise control. Frequent channel assessments should be
conducted on a regular basis. The manager who understands and plans
for changes will capture more market share. Whether the market is

62
 slowly shifting or you are driving change, ask yourself the following
question:
2. Coverage:
Does your channel strategy give you access to each customer
segment? To achieve success, you must be present at the point of sale.
Do you have the ability to reach your target audience at each
purchasing cross road and at the key buying time? Are your channels
calling on the right customers?

3. Competency :

Does your channel marketing strategy have the skill and capabilities
to communicate and deliver your value proposition? Value represents
the benefits the customer perceives versus the total cost the customer
incurs. These costs include all adoption costs, risk and the purchase
price the customer pays. You win more when customers perceive
your offer as a greater value than the alternatives.

4. Your channel strategy must meet the need and the expectation of your
customers. Do your customers want knowledgeable sales help? Does
your channel have strong pre sales skill? What are their transaction
capabilities? What about p to post-sales support? Your commitment to
your customers extends beyond the purchase of your product.
5. Connection:
Your channel marketing strategy must provide the customer
relationship necessary to become a valued customer partner. The
channel should introduce you to customers senior management,
planning and R&D to expend knowledge of your customers needs.
The affiliation between your channel and customers. Above all, your
customer partner should not be just another vender. Your goal is to
develop structural and social bonds with your target customers. What

63
 role is your channel strategy playing to make this happen? Is it a help
hindrance or not a factor at all?

6. Commitment:

You cant overestimate the importance of your relationship with your channel
partner. Your success depends in their success. If your channels are congested with
conflicting product lines, youre not receiving the level of commitment you need to
win the sale. Can you identify gaps in your relationship that could be repaired? A
good relationship with your channel partner can accelerate the adoption of your
product and dramatically reduce the resources needed to meet your market share
objectives.

7. Each of these performance metrics impacts the market share your channel
strategy can deliver. QDI can help you determine if your existing channels are
capable of achieving your three to five year objective.

Hero Motocorp Chairman BrijmohanLall formally announced on July 29, 2011 the
end of relationship with Honda and soon after that the new logo and corporate
identity, with the tagline Hum Mein hai Hero , was launched and communicated
through different media.

The first priority was given to the TV ads and print media. A 120s TVS and a full
page print ad were the branding strategy planned and executed. Later radio
channels and online social media were focused.

The TVS had everything it needed (AR Magic, Indian Culture, True life story and
patriotism since ad was written as an anthem and was launched on independence
day) to create the spirit of a hero.

Branding factors:

64
Charles Wright, managing director says, in an interview with afaqs, that it did take
them 3-4 months in launched their logo. The red color indicated continuity &
change and angular H symbolized that Hero was no longer dependent.

AnuragKashyap, the director too many eminent films like black Friday, Bombay
Bombling etc, was proposed to direct this ad so as to bring a natural life and
story to it. The commercial was created with the motive of understanding that
everyone had a hero inside him/her rather than creating an ad with the motive as a
manufacture.

The TVC had everything it needed (AR Magic, Indian Culture, True life story and
patriotism since ad was written as a anthem and was launched on independence
day) to create the spirit of a hero.

Bollywood actors Ranbirkapoor and cricketer IrfanPathan are also brought in to

endorse the brand. It is said HrithikRoshan will be also continuing with the brand.

2.9.2 REASON FOR EXPENSION

Hero motocorp, the leading two wheeler manufacturer, is planning to spread its
wings in the international market by designing and developing new future products
according to the global markets by the end of this financial year. The munjals led
firm has already scheduled the launch of hybrid scooter leap and is working on the
other products to expand its footprint overseas, said the media report. The leap is
not only targeted at Indian Customers but is for the global market. In fact, all future
product developments plans will be fed by Indian as well as global requirements.
That is why we do not term it exports operations but call it our international
business. Our idea is not to see what we have and what we can give but to address
what the market requires. All future products will be based on this principle, Hero
motocorp, senior vice-president (sales & marketing), and Anil dua told media.
Hero Motocorp has identified 30 countries to establish its presence in the

65
international market and has planned to enter 8-10 new markets in Africa and Latin
America by the end of the current fiscal year.

Moreover, hero is targeting at 10% of total revenues of USD 10 billion from its
international business by the end of decade and to meet upon the targets the
company would set up assembly plants in Kenya, Nigeria, Columbia, and
Bangladesh. Hero motocorp, the countries largest two wheeler manufacturer, on
Monday announced an investment of rs 2575 crore to set up, among other things,
two more manufacturing units to the existing three factories.

Those two new ones are to be in Gujarat and Rajasthan. Also, an integrated
research and development centre is to be made operational by the middle of 2013-
14.

Hero has a total annual capacity of nine million two-wheelers and this move would
put it well ahead of rivals Bajaj auto (capacity of 6.3 million by 2013-14) and its
former ally, now rival, Honda, which is building two-wheeler capacity of four
million units yearly and making an aggressive entry into the 100cc mobile market.
The two new units of HERO would together add an additional capacity of two
million units.

BIG PLANS

Unit Investment Date of

(Rs crore) Commission

4th two-wheeler factory in 400 Q1 FY14

Rajasthan

Another, the5th, in Gujarat 1100 Q2FY14

R&D centre at Kukas, Rajasthan 400 Q2FY14

66
Capacity expansion at

Dharuhera, gurgaon and 500 ONGOING

Haridwar plants

Other investments 175 ONGOING

The Munjal-promoted company had bought out its joint venture partner of 26
years, Honda, in December 2010.it had agreed to take HMCS 26 % stake in the
JV, HERO HONDA, for RS. 3842 crore.

It is also putting up RS 400 crore to set up its R & D centre, where the next bikes
are to be conceived. Earlier, Hero Honda was dependent on the Japanese partner
for new bikes as well as technology, and did not make any major investments in
this area.

We have huge investment plans in various parts of the organization. We will be

setting up our fourth plant at Neemrana in Rajasthan, which will come up first.
Said managing director and CEO Pawanmunjal.

2.9.3 REASON FOR DIVERSIFICATION

Its been over a year since HERO MOTOCORP parted ways with Honda. As the
Worlds largest two-wheeler maker scripts its own story, its MD & CEO,
Mr.PawanMunjal, tells Business Line how multiple technical alliances will help it
rapidly cover the time it lost out in developing proprietary technology.

With plans to look into new segments and spread beyond two-wheelers, this will be
critical to its global plans and help meet a $10-billion turnover target over the next
5-6 years.

Your first technical tie-up is with Erik Buell Racing (EBR). Where does it
figure in your game plan?

67
Though EBR does high-end bikes and has technology for high-performance, racing
bikes, this can be adapted for mid-segment bikes beyond 200cc. I feel they have
lots of new ideas, I think I can talk to them about even 100cc engines over time.

Some of our current bikes with EBR technology will be launched by the next
fiscal. These will probably be a mix with Honda Technology as its too short a time
to completely shift. Were also working on completely new platforms with EBR,
which would be launched by 2013-14.

Ideally, how many tie-ups would you look at?

We will not restrict ourselves to a single technology/arrangement, but have

multiple tie-ups with experts. To my mind, 3-4(tie-ups) is a good number.

With EBRwere finding everything forma certain segment of bikes, with somebody
else (AVL, Ricardo) were working on only engine. For styling, we will hire
experts, since our customer is global; we will have to become a multinational as
well

Were also working on own smaller engine in our R&D,with the support of
technology partner,

In the 100-125cc range.

Will hero Moto venture beyond two-wheelers?

There definitely is a vision to do that, but right now were focusing our energies on
two-wheeler. There is a plan to diversify into other segments, maybe cars or
commercial vehicles- thought thats a more mid and long-term strategy.

At an about 50 per cent discount, Hero stuck a strong bargain in buying out
Hondas stake

68
We believe we got a very good term of the valuation of the shares that we got back
the transition arrangement and our signing of two new licenses

The arrangement is that we have to make a certain amount of payment to Honda

over three years. Its not royalty really but more a lump-sum payment that we
agreed with them to retain the right to manufacture the models here. That will start
happening soon.

What gains do you think Honda walked away with?

Both partner benefitted from the joint venture. Before we started around 1985, the
Honda brand was relatively unknown. After that, Honda cars came in and then
power products. Also, they gain end market experience.

I would think supplies are very important. Going forward there would be synergies
in various area, which if they desire and work out well for both companies and the
suppliers there can be some arrangement.

2.9.4 REASON FOR CONTRACTION

Investor faith in the countrys largest motorcycle maker, has been shaken. Earlier
in the month, a 1% contraction in December quarters sales volumes when
compared with a year ago, coupled with a significant drop in market share to
competition, had set the stage for lower expectation .But the20.4% year-on-year
drop in net profit to rs.487.9 crore has quashed analysts hopes of a better outlook
on grounds that a better winter agricultural harvest (rabbi crop) would lift demand
from rural areas. It was a significant 17% below Bloombergs consensus estimates.

The biggest jolt was a precipitous drop in operating margin to 12.6%-305 basis
points (bps, or 3.05 percentage points) from a year back and 128 bps even
compared with the preceding quarter. Cost pressures by way of higher raw material
to sales expenses and a little over a RS. 100 crore jump in advertising expenses to

69
promote new models from its stable ate into income earned. The 3.6% increase in
average realization per vehicle could do nothing to save profitability.

Operating profit plunged, too, by 17.5% from the year-ago period to RS.778.7
crore, although it was marginally higher than the September quarter.

The management, in its analysts conference call, reportedly attributed the fall in
profits to new products with a higher raw material cost and ad-spending and
conceded that profit margins are lower on some new launches. The change in
product mix will only get reinforced going forward, which will, in turn, put to test
the companys ability to rev up profitability to higher levels. Although employee
costs as a percentage of sales rose very marginally, this could rise in the future, as
media reports suggest that wage negotiations are round the corner.

2.9.5 Comment on Organization leadership

Hero motocorp union leaders plan hunger strike for higher wages

NEW DELHI: situation can worsen at Hero motocorps troubled as workers

seeking are, concidring to go the Anna way with an within the factory premises if
there demands are not met.

Even as talks are being held to resolve the issue that has been hanging fire since
august last year, resentment among the worker is growing and there is a sense that
something concrete need to be done to make the management agree to demand,
some of the worker briefed on the move told TOI, though wising anonymity The
management is just not ready to agree to our demands and this is not acceptable to
us. Our patience wearing out and our union leaders will go on an indefinite hunger
strike, just like activist, if the matter is not resolved soon, the workers involved in
the wage negotiation with the management-said.

70
The management of has, however, said it cannot be coerced into decision
governed by pressure tactics.

Hero MotoCorp has always given top priority to the overall welfare and well-
being of all our workers.And we will strive to react at a reasonable, sustainable
and sensible settlement, a company spokesperson had said earlier. The two sides
have been negotiating a fresh wage settlement over the last six months, but so far it
has not yielded any results. The workers are understood to be asking for an
increment of between rs 15000 and rs. 18000 ( over a three year period), much
higher than the RS.6500 increment given to workers at the bike majors Dharuhera
plant in2011.

Gurgaon;s labour union leaders justify the demand for higher increment, saying
that cost of living is higher in the city which is part of the national capital
region(NCR).

The workers said that they will now make it clear it to the management that they
cannot be holding the talks in perpetuity, and a decision has to be taken soon. This
is the reason that the hunger strike is being contemplated, one of them said. Hero
motocorp management, however, is not very keen to give a fatter increment to
workers at gurgaon as it might spoil its wages settlement at Dharuhera and lead to
similar demands from labour union leaders there. The workers at the gurgaon plant,
who had reduced production temporarily to press for their demands, are still
maintaining the output.

However, union leaders have threatened that this may not continue for long if their
demands are not met. if they do not agree to the increment levels suggested by us,
we will have to go on strike, kanwalpreet Singh, president of hero
motocorpgurgaon labour union, had told TOI recently. The Gurgaon plant has a
daily average output of around 7000 units. It employs about 1200 permanent
workers and about 4000 casual

71
2.9.6 MARKET SHARE GROWTH RATE

Hero Motocorps shareholding pattern

Description percent of shares (%)

Promoters 52.21

Individuals 6.94

Institutions 5.94

FII 33.21

Govt. 0.00

Others 1.70

2.9.7 SWOT ANALYSIS

STRENTH
Technical and financial collaboration with Honda.
Wide range of motor bike
Extensive research and development both in house development facility
interface with other independent engineering units.
Large and competitive workforce.
producing challenging product in market

WEAKNESS

Slow to react to market changes

Late entrants into the 125cc segment

OPPORTUNITY

72
 Boast up production to fully utilize the installed capacity.

To take the monopoly in motor vehicle category where the competition is much
more increased.

Effectively meet the demand created by way of operation victor creating

awareness among the rural consumers.
THREATS

Strong competition from Indian as well as international brands.

Sever competition by light motor and heavy vehicle faced from the side BAJAJ.

Stiff competition with BAJAJ AUTO which has now increase market with active
participation in both northern and southern market.

Change in Government fiscal policy toward import and customer duty.

COMPETITORS

Yamaha

Bajaj auto

TVS

Suzuki

Harley Davidson

Royal Enfield

Ducati

73
 CHAPTER-3 RESEARCH METHODOLOGY

Researchmethodology is a way to systematically solve the research problem, as to

how research is done scientifically. It consist of the different that generally adopted
by researcher to study his research problem along with logic behind them. It is
necessary for the researcher to develop certain tests

The following are the methods adopted for the projects:

The Research Design is made as per the requirements of the project

For the secondary data collection, the information in the record of the
company proved to be sufficient.
For the primary datacollection, the researcher has preferred the survey
method to the other methods.
In the survey method, the researcher chose to undertaken field work. This is
because there is perception that in the geographical area in which he was to
conduct the survey, better and quicker data was possible to be collected only
through direct field work.
In the field work, instead of choosing any interviews or recorded
Observation, the researcher chose to incorporate all the questions in from of
a questionnaire.

Research Design

The researcher after choosing the subject, company and the area to conduct his
research decided establish the theme or the important factor upon which the entire
project is to base.

At the outset, the objectives of the project were identified. Thereupon, the
conclusive research was undertaken upon consideration, the researcher projects
requirements. This method decided to embark upon a survey and the analysis
andinterpretation of the findings of the surveys can only be done properly only if
he chose the statistical design.

74
Data Collection:It was necessitated in order to obtain data relevant to the project.
In order to collect the primary data, survey method was chosen. No observation
techniques and the likes were resorted only questionnaire method was adopted. The
sample size was chosen keeping in mind out only the time factor but also the area
of coverage. The sample size was limited to 100 customers.

The primary data was collected in the geographical limit of New Delhi. The
questionnaire has been physically carried out by the researcher and filled up by the
respondents.

Sampling Method: Random sampling is also known as probability sampling. It is

chosen such a way that each member of the universe has known chance of being
selected. It is this condition- know chance-that enables statistical procedures to be
used on the data to estimate sampling errors. The most frequently used probably
samples are sample random samples, systematic samples, satisfied. Samples and
cluster samples the researcher had chose Random sampling in the case of customer.
The sample size was taken as 100 customers for the Survey.

THE QUESTIONNAIRE DESIGN:

The questionnaire has been prepared on the following lines

The questionnaire includes the entire relevant question so as to provoke and elicit
the data from the respondents in a brief manner.

There are some open ended questions which are incorporated in the
questionnaire.

The reason behind this is to get the subjective data which if otherwise put in the
form of a close ended form would not elicit the answer in a proper form.

The questions were able to fully cover the themes concerned.

75
 CHAPTER4:- DATA ANALYSIS

TABLE NO.1

TABLES SHOWING RESPONDENTS PROFILE

SEX NO. OF RESPONDENTS PERCENTAGE

MALE 86 86
FEMALE 14 14
TOTAL 100 100

ANALYSIS: The above table shows that out of 100 respondents.86% ARE male
and 14% of them are female.

GRAPH NO.1

GRAPH SHOWING SEX PROFILE

TOTAL

FEMALE PERCENTAGE
NO. OF RESPONDENTS

MALE

0 20 40 60 80 100 120 140 160 180 200

INFERENCE:-THE ABOVE GRAPH SHOWS THAT LARGER PERCENTAGE

OF RESPONDENTS ARE MALE.

76
 TABLE NO. 2

TABLE SHOWING AGE GROUP OF RESPONDENTS

AGE OF NO. OF RESPONDENTS PERCENTAGE

RESPONDENTS
15-25 32 32
25-35 36 36
35-45 18 18
45-55 13 13
55 AND ABOVE 1 1
TOTAL 100 100

ANALYSIS:the above table shows that out of 100 Respondents, 32,(32%) were
from age Group of 15-25, 36, (36%) were from age group of 25-35, 18, (18%)
were from the age group of 35-45, 13,(13%) were from the age group of 45-55, 1,
(1%) is from the age group of 55,(55%) & ABOVE.

GRAPH NO. 2
GRAPH SHOWING AGE GROUP OF RESPONDENTS

77
 NO. OF RESPONDENTS

15-25
25-35
35-45
45-55
55 AND ABOVE
TOTAL

INFERENCE:-From the above chart it has been found that most of respondents
are from the age group of 15-25 & 25-35.
TABLE NO.3

SHOWING THE OCCUPATION OF RESPONDENTS

OCCUPATION OF NO. OF RESONDENTS PERCENTAGE
RESPONDENTS
PROFESSIONAL 34 34
BUSSINESS 37 37
OTHERS 29 29
TOTAL 100 100
ANALYSIS: AMONG THE 100 RESPONDENTS MAJORITY OF THEM FALL
UNDER THE CATEGORY OF BUSSINESS 37%, FOLLOWED BY
PROFESSIONAL 34% AND OTHERS 29%.

GRAPH NO. 3

GRAPH SHOWING THE OCCUPATION OF RESPONDENTS

78
 120

100

80

60 NO. OF RESONDENTS
PERCENTAGE

40

20

0
PROFESSIONAL BUSSINESS OTHERS TOTAL

INFERENCE: MOST OF THE BUYERS ARE BUSSINESSMAN FOLLOWED

BY PROFESSIONAL AND THEN OTHERS.

TABLE NO. 4

TABLE SHOWING THE INCOME OF THE RESPONDENTS

INCOME OF NO. OF RESPONDENTS PERCENTAGE

RESPONDENTS
BELOW 50000 24 24
50001-75000 30 30
75001-100000 20 20
ABOVE 100000 26 26
TOTAL 100 100

ANALYSIS: The above table shows that out of 100 Respondents 24% respondents
are from the Income group below 50,000, 30% from the Income group

50,001-75,000, 20% from the Income group 75,001- 1, 00, 00 0, and 26% from
the Income group 1, 00,000Above

79
 GRAPH NO. 4

GRAPH SHOWING THE INCOME OF RESPONDENTS

120

100

80

60

40 NO. OF RESPONDENTS
PERCENTAGE
20

0
00 00 00 00 L
0 0 0 0 TA
50 75 00 00 TO
W 1- 1-
1 1
LO 00
0 0 OVE
BE 5 7 50 AB

INFERENCE: FROM THE ABOVE GRAPH IT HAS BEEN FOUND THAT

ALMOSTOF ALL INCOME GROUP PEOPLE ARE BUYERS.

TABLE NO. 5

TABLE SHOWING MEDIA SELECTION TO KNOW ABOUT THE HERO

VEHICLE

MEDIA NO. OF RESPONDENTS PERCENTAGE

ADVERTISEMENT 52 52
FRIENDS 38 38
MECHANIC 2 2
SALESMAN 8 8
TOTAL 100 100

80
ANALYSIS: The above table shows that out of 100 respondents, 52% of them got
influenced from Advertisement media, 38% or they are from Friends, 8% from
company sales Man, and 2% from Mechanics.

GRAPH NO. 5

GRAPH SHOWING MEDIA SELECTION TO KNOW ABOUT THE HERO

VEHICLE

120

100

80

60

40 NO. OF RESPONDENTS
PERCENTAGE
20

0
T DS C L
EN NI AN TA
M I EN HA SM TO
SE FR EC LE
RTI M SA
VE
AD

INFERENCE:THE ABOVE GRAPH SHOWS THAT MOST OF THE

RESPONDENTS ARE INFLUENCED FROM ADVERTISEMENT.

TABLE NO. 6

TABLE SHOWING FACTORS INFLUENCED TO BUY HERO HONDA

VEHICLE

FACTOR NO. OF RESPONDENTS PERCENTAGE

MILEAGE 26 26
PRICE 10 10
ROAD CONDITION 64 64
TOTAL 100 100

81
ANALYSIS:The above table showsthat out of 100 respondents 26% respondents
are influenced from mileage, 10% from price, and 64% of them are influenced
from Road condition.

GRAPH NO.6

GRAPH SHOWING WHY RESPONDENTS (FACTOR INFLUENCED) BUY

HERO VEHICLE

120

100

80

60 NO. OF RESPONDENTS
PERCENTAGE
40

20

0
MILEAGE PRICE ROAD CONDITION TOTAL

INFERENCE: ABOVE GRAPH SHOWS THAT MOST OF THE

RESPONDENTS ARE INFLUENCED BY ROAD CONDITION FACTOR.

TABLE NO.7

TABLE SHOWING KIND OF VEHICLE OWN BY RESPONDENTS

KINDS OF VEHICLE NO. OF RESPONDENTS PERCENTAGE

WITHOUT GEAR 88 88
WITH GEAR 12 12
TOTAL 100 100

82
ANALYSIS:The above table shows that out of 100 Respondents, 88% of
respondents are having with out gear vehicle, 12% of respondents are having with
gear vehicle

GRAPH NO.7

GRAPH SHOWING KIND OF VEHICLE OWN BY RESPONDENTS

120

100

80

60 NO. OF RESPONDENTS
PERCENTAGE
40

20

0
WITHOUT GEAR WITH GEAR TOTAL

INFERENCE: THE ABOVE GRAPH SHOWS THAT MOST OF THE

RESPONDENTS USING WITHOUT GEAR VEHICLES WHICH WILL SUIT
FOR CITY.

TABLE NO. 8

TABLE SHOWING BRAND OF VEHICLES CHOSEN BY THE

RESPONDENTS

BRAND OF VEHICLES NO. OF PERCENTAGE

RESPONDENTS
SPLENDER+ 32 32
PASSION + 25 25
HF DAWN 18 18
HF DELUXE 15 15
CBZ 3 3

83
GLAMOUR 2 2
KARIZMA 2 2
ACHIEVER 2 2
HUNK 1 1
ANALYSIS: The above table shows that out of 100 Respondents, 32%
respondents are having Splendor +, 5% of them are having Passion plus, 18% of
then are having CD- Dawn, 15% of them are Having CD-Deluxe, 3% of them are
having CBZ, 2% of them are having Glamour, 2% of them are having Karizma, 2%
of them are having Achiver, 1% of them are having Hunk.

GRAPH NO.8
GRAPH SHOWING BRAND OF VEHICLE CHOOSEN BY THE
RESPONDENTS

35

30

25

20

15
NO. OF RESPONDENTS
10 PERCENTAGE

0
+ + N E Z R A R K
DER ON AW LUX CB OU I ZM EVE UN
N I D E I H
LE PAS
S
HF HF
D AM KAR ACH
SP GL

INFERENCE:- ABOVE GRAPH SHOWS THAT MOST OF THE

RESPONDENTS ARE HAVING SPLENDOR+

84
 TABLE NO.9

TABLE SHOWING SATISFACTION LEVEL OF MILEAGE GIVEN BY

THE VEHICLE

MILEAGE OF NO. OF PERCENTAGE

VEHICLE RESPONDENTS
SATISFIED 56 56
HIGHLY SATISFIED 14 14
NOT SATISFIED 27 27
NOT REPLY 3 3
TOTAL 100 100
ANALYSIS: The above table shows that out of 100 Respondents, 56% of them are
satisfied with mileage, 14% of them are highly satisfied, 27% of them are Not
satisfied, and 3% of them are Not reply with the mileage of the vehicle.

GRAPH NO.9

GRAPH SHOWING SATISFACTION LEVEL OF MILEAGE GIVEN BY THE

VEHICLE

120

100

80

60

40 NO. OF RESPONDENTS
PERCENTAGE
20

0
ED ED ED LY L
FI FI FI EP OTA
IT S IT S IT S T R T
SA Y SA T SA NO
GHL NO
HI

INFERENCE:ABOVE GRAPH SHOWS THAT MOST OF THE

RESPONDENTS ARE SATISFIED BY THE MILEAGE GIVEN BY THE
VEHICLE.
85
 TABLE NO.10

TABLE SHOWING SATISFACTION LEVEL OF PRICE OFTHE

VEHICLE.

PRICE OF THE NO. OF PERCENTAGE

VEHICLE RESPONDENTS
SATISFIED 76 76
HIGHLY SATISFIED 6 6
NOT SATISFIED 17 17
NOY REPLY 1 1
TOTAL 100 100
ANALYSIS:

The above table shows that out of 100 Respondents, 76% of them are satisfied with
price of the vehicle, 6% of them are highly satisfied, 17% of them are Not
satisfied, and 1% of them are Not reply with the price of the vehicle.

GRAPH NO.10

GRAPH SHOWING SATISFACTION LEVEL OF PRICE OF THE VEHICLE

120

100

80

60

40

20

0
LE ED ED ED LY L
IC FI FI FI EP TA
EH IT S IT S IT S Y R TO
HEV SA YS
A
TS
A NO
L
FT GH NO
EO HI
IC
PR

86
INFERENCE:- ABOVE GRAPH SHOWS THAT MOST OF THE
RESPONDENTS ARE SATISFIED WITH THE PRICE OF THE VEHICLE

TABLE NO.11

TABLE SHOWING SATISFACTION LEVEL OF REPLACEMENT OF

SPARE PARTS IN SERVICE CENTER

REPLACEMENT OF NO. OF PERCENTAGE

SPARES RESPONDENTS
SATISFIED 82 82
HIGHLY SATISFIED 4 4
NOT SATISFIED 12 12
NOT REPLY 2 2
TOTAL 100 100
ANALYSIS: The above table shows that out of 100 Respondents, 82% of them are
satisfied With Replacement of spare parts, 4% of them are Highly satisfied, 12% of
them are Not satisfied, And 2% of them e Not reply with Replacement of spare part

GRAPH NO.11

GRAPH SHOWING SATISFACTION LEVEL OF REPLACEMENT OF SPARE

PARTS IN SERVICE CENTER.

87
100
90
80
70
60
50
40
NO. OF RESPONDENTS
30
PERCENTAGE
20
10
0
ED ED ED LY L
FI FI FI EP TA
S S S R TO
TI AT
I TI T
SA YS T SA NO
L
GH NO
HI

INFERENCE: ABOVE GRAPH SHOWS THAT MOST OF THE

RESPONDENTS ARE SATISFIED WITH THE REPLACEMENT OF SPARE
PARTS.

TABLE NO.12

TABLE SHOWING SATISFACTION LEVEL OF RESPONDENTS

TOWARDS DEALERS INSTRUCTION

DEALER NO. OF PERCENTAGE

INSTRUCTIONS RESPONDENTS
SATISFIED 90 90
HIGHLY SATISFIED 3 3

88
NOT SATISFIED 5 5
NOT REPLY 2 2
TOTAL 100 100
ANALYSIS:The Above Shows That out of 100 Respondents, 90% of them are
satisfied with the instruction given by the dealer 3% of them are Highly satisfied,
5% of them are Not satisfied, and 2% of them are Not reply with Instruction given
by the Dealer.

GRAPH NO.12

GRAPH SHOWING SATISFACTION LEVEL OF RESPONDENTS TOWARDS

DEALERS INSRUCTIONS

89
 100
90
80
70
60
50
40
NO. OF RESPONDENTS
30
PERCENTAGE
20
10
0
ED ED ED LY L
FI FI FI EP TA
S S S R TO
TI TI TI T
SA Y SA T SA NO
L
GH NO
HI

INFERENCE:-ABOVE GRAPH SHOWS THAT MOST OF THE CUSTOMERS

ARE SATISFIED WITH DEALERS INSTRUCTIONS.

TABLE NO.13

TABLE SHOWING RECOMMENDATION OF HERO VEHICLES TO

OTHERS BY RESPONDENTS

RECOMMENDATION NO. OF PERCENTAGE

RESPONDENTS
YES 90 90
NO 10 10
TOTAL 100 100
ANALYSIS: The above table shows that out of 100 Respondents, 90% of them are
recommending Hero vehicles to others, 10% of them are not recommending Hero
vehicles.

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 GRAPH NO.13

GRAPH SHOWING RECOMMENDATION OF HERO VEHICLE TO OTHERS

NO. OF RESPONDENTS

YES
NO
TOTAL

INFERENCE:- ABOVE GRAPH SHOWS THAT MOST OF THE

RESPONDENTS ARE RECOMMENDED HERO MOTOCORP

TABLE NO.14

RESPONDENTS AWARNESS TOWARDS VARIOUS AUTOBIKES

COMPANIES

91
AUTOBIKE RESPONDENTS PERCENTAGE
COMPANY
HERO 95 95
BAJAJ 75 75
HONDA 60 60
YAMAHA 25 25
TVS 50 50
SUZUKI 45 45
FREEDOM 18 18
OTHERS 12 12
Sources: Primary Data

INTERPRETATION:

The above table represents therespondents awareness towards various autobikes

companies.( 95 5%) of the respondents are aware of the Hero , (75%) of the
respondents are aware of e Bajaj motors, 60 (60%) of the respondents are aware of
the Honda, 25 (25%) of the respondents are aware of the Yamaha, 50 (50%) of the
respondents are aware of the SUZUKI, Freedom autobikes is known by 18 (18%)
of the respondents, 12 (12%) of the respondents know various others autobikes.

GRAPH NO. 14

GRAPH SHOWING AWARENESS OF VARIOUS AUTOBIKES COMPANIES

92
100
90
80
70
60
50
40 RESPONDENTS
30 PERCENTAGE
20
10
0
J A A S I S
RO JA ND AH TV UK OM ER
HE BA O Z D H
H YA
M SU EE OT
FR

TABLE NO.15

AUTOBIKES COMPANY OPTED BY THE RESPONDENTS

AUTOBIKE RESPONDENTS PERCENTAGE

COMPANY

93
HERO 70 70
BAJAJ 60 60
HONDA 45 45
YAMAHA 22 22
TVS 40 40
SUZUKI 35 35
FREEDOM 15 15
OTHERS 18 18

Sources: Primary Data

INTERPRETATION: The Above Table represents theauto bikes opted by the

respondents. 70 (70%) of the respondents have choose the Hero motor Ltd., 60
(60%) of the respondents have chosen e Bajaj motors, 45 (45%) of the respondents
have chosen the Honda, 22 (22%) of the respondents have chosen the Yamaha, 40
(40%) of the respondents have chosen the TVS,( 35 5%) of the respondents have
chosen the SUZUKI, 15 (15%) of the respondents have chosen e Freedom, 18
(18%) of the respondents have chosen the Others companies.

GRAPH NO.15

AUTOBIKES COMPANY OPTED BY RESPONDENTS

94
80
70
60
50
40
30 RESPONDENTS
PERCENTAGE
20
10
0
J A A S I S
RO JA ND AH TV UK OM ER
HE BA O Z D H
H YA
M SU EE OT
FR

95
 Chapter 5 FINDING

5.1 FINDING

Hero MotoCorp, Indias biggest two -wheeler maker, posted a better-than

anticipated 19.3% increase in the quarterly net profit motored by record
sales, and stated it is executive of preserving the tempo in spite of concerns
over growing inflation and fuel rates.

The companys net profit surged to Rs602 crore during the three months
period mendedSeptember 30 as against Rs 506 crore a year ago.

The Delhi based company sold around 15.44 lakh two wheeler in the july-
september period, an increase of 20% over a year ago.

The festive period, which starts a month and a half beforediwali, promoted
sales of splendour and passion to a record for the third consecutive quarterly
period.

Hero motocorp MD and CEO Pawan, Munjal stated, Our performance

improved despite rising food inflation and fuel prices, which are the two
major areas of concern for the industry and might adversely impact
consumer sending in the coming months.

This out performance, as Hero MotoCorp relocated it self in its new avatar
accompanying confuse times after the JV break-up, seems to have actuated a
rally in the stock during the past few months.

The stock has gradually outperforThe flip side is that the up and down in the
scrip does not leave much room for more admiration, as the existing market
rate of Rs 1,985 discounts financial 2012 and 2013 incomes by around 17
and 13 times, respectively.
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The interested investors can hold the stock for medium and long term
targets.

At present, the stock of the company is ruling with an EPS of 103.86%.

The current P/E ratio is19.11.

Hero MotoCorp has registered highest ever quarterly sales and turnover.
Something really good is expected from this company. I would say that its a
long term story and will be interesting to see this stock jumping even in
lacklustremarket.

I am sure that it will touch 52-week high pretty soon. They rule two-wheeler
market in India.

Technically expert from Emkay Global Finance Services, Krishna Kumar

Karwa has said that they are positive on the stock. They expect Bajaj auto to
perform well also.

VK Sharma of HDFC securities has given a hold call for Hero MotoCorp.
He added, the stock is looking good due to good Q2 result. It may go up by
2-3%in near term.

Hero MotoCorp net profit falls 20% to Rs 488 cr inQ3HeroMotoCorp

(HMCL) on Thursday reported net profit of Rs488 crore for the third quarter
ended December 31,2012,down 20 per cent from Rs 613 crore in the
corresponding period last year.

However, the companys turnover (net sales and other operating income)
went up by2.5per cent to Rs 6,188 crore for the October-December
compared with Rs 6,036crore in the same period of 2011.

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 The last two quarters have been challenging for the Indian auto industry on
account of the delayed mansoons,rising fuel prices and subdued sentiments.
However, we have had good growth this festive season,PawanMunjal,
Managing Director and Chief Executive Officer, HMCL, said.The profits
have gone up even after the company reportedly paid about Rs180 crore to
erstwhile Japanese partner Honda as royalty in the quarter. Royalties are
expected to go up with the Yen appreciating around 20 per cent in the period.

Hero MotoCorp plans to launch three new models in the next few months
the 110cc passion X pro, an 110cc masculine scooter, Maestro, and 125cc
bike, Ignitor. It is also enhancing its research and development capabilities,
where it is currently developing this hybrid technology supplies for
collaboration to developed new models.

Hero MotoCorp shares ended at rs 1,900.75 per share on the BSE, up 2.35
per cent on Thursday.

CHAPTER-6 CONCLUSION AND SUGGESTION

CONCLUSION
98
 CUSTOMERS are preferred to Hero MOTOCORP vehicles because those
vehicles from Hero are suitable for all age group and Income group. From this
study what I come to is almost all the customers are satisfied with services
provided by Hero Auto bikes. The way the dealers respond to the customers is
exemplary. Because of the dealers commitment and quality Services they stand in
number good position.

SUGGESTION

This chapter gives clear position and offers suggestion for forecasting the future
plans and further action. These suggestions are made taking into consideration
various aspect of product, price, promotion and distribution to over come the
deficiencies.
Hero should upgrade vehicles periodically.
Frequent market survey should be conduct to be informed about the
customer choice and demand.
The company should be concentrate on the up gradation in knowledge of its
staff and train them in all necessary skills required to serve the customers
better there by retaining them.
The dealer should be customer oriented rather than sales oriented and thus
strive to focus on relationship marketing.
Customer feed back is crucial important and feedback forms can be
regularly taken through which Hero will find valuable suggestion from its
customers as to how they can improve their product and services.

CHAPTER-7 BIBILIOGRAPHY

BIBILIOGRAPHY

99
WEB-SITES:

WWW.google.com

www.wikipedia.com

www.heromotocorp.com

TEXT BOOKS: MARKETING MANAGEMENT BY PHILIP KOTLER.

BUSINESS STATISTICS: S. P. GUPTA

HERO AUTOBIKES: DIRECTOR, MANAGER AND EMPLOYEES

CHAPTER-8 ANNEXTURE

8.1 QUESTIONNAIRE

A study of customer preference regarding hero motocorp in India.

100
I. PERSONAL DATA

1. NAME. :

2. Age:

3. Education:

A) Schooling B Intermediate C) Degree/Diploma D) Others

4. Occupation:

A) Profession B) Business C) Others

5. Annual Income:
A) Below Rs. 50000 B) Rs. 50001-75000 C) 75001-100000 D) Above Rss.100000
II.BUYING BEHAVIOUR:
1. What kind of vehicle you owe _________________________
2. How did you hear about hero vehicle _____________
A) Advertisement B) Friends C) Mechanics D) Company Salesman
3. How long you are using Hero vehicles? _____________
4. What factor influenced you the most in buying Hero Honda vehicle?
A) Mileage B) Price C) Road condition
5. How long you have relationship with dealers? ______________
III. SATISFACTION ABOUT THE DEALER
1. Dealer Instructions:
A) Satisfied (B) Highly satisfied (C) Not satisfied (D) Not Reply
2. The replacement of spare parts:
(A) Satisfied (B) Highly satisfied (C) Not satisfied (D) Not Reply
3 Dealer is customer friendly:
(A) Satisfied (B) Highly satisfied (C) Not satisfied (D) Not Reply

101
4. Promptness of delivery
(A) Satisfied (B) Highly satisfied (C) Not satisfied (D) Not Reply
IV. SATISFACTION ABOUT THE VEHICLES
1. Price of vehicles:
(A) Satisfied (B) Highly satisfied (C) Not satisfied (D) Not Reply
2. Mileage given by the vehicle:
(A) Satisfied (B) Highly satisfied (C) Not satisfied (D) Not Reply
3. Road grip of the vehicle:
(A) Satisfied (B) Highly satisfied (C) Not satisfied (D) Not Reply
4. Durability of the vehicle:
(A) Satisfied (B) Highly satisfied (C) Not satisfied (D) Not Reply
V. POST PURCHASE BEHAVIOUR
1. Do you recommend Hero vehicle to others?
A) Yes B) No
2. Will you continue to buy Hero vehicle in future?
A) Yes B) No
3. Did you ever have problem with the dealer?
A) Yes B) No
4 If yes, how did the dealer respond to you?
A) Promptly B) Belatedly C) Never respondent
5 Did you have any compliant with the vehicle?
A) Yes B) No

6 How was the compliant solved?

A) Replacement B)BY service C) By refund of money
IV. RANK ORDER

102
 Rank order for brands:-
a. Honda____________________
b. kinetic__________________
c. Hero motocorp_________________
d. TVS________________________
e. Suzuki
Rank order for preferring Hero Motocorp vehicle:
a. Better road grip___ __ __
b. Extra mileage_____________________
c. Price consumption__________
d. service____________________________
e. If others please mention below------------

103