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A STUDY ON TWO WHEELER SALES, SERVICES AND SPARE

PARTS TURNOVER OF VENKATESWARA MOTORS, AN
AUTHORIZED HERO HONDA DEALER, HYDERABAD

Submitted in

Partial fulfillment of the requirement for the award of

POST GRADUATE DIPLOMA IN MANAGEMENT

Submitted By

K.SUBHASH

Roll No. -10138

Batch- XVIII

PGDM

VIGNANA JYOTHI INSTITUTE OF MANAGEMENT

(APPROVED BY AICTE, MINISTRY OF HRD, GOVT.OF INDIA)

BACHUPALLY, HYDERABAD

ACKNOWLEDGEMENT
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I avail this opportunity to express my deep sense of gratitude to all the people who have helped
me to carry out and complete this project in partial fulfillment of my PGDM degree curriculum.

I am deeply indebted to Mr. Kamal Ghosh Ray, Director, Vignana Jyothi Institute of
Management, Bachupally, for the valuable support and gave me an opportunity to do my project
work.

I wish to express my hearty thanks to all faculty members of Vignana Jyothi Institute of
Management, for the help they provided to carry out this project.

Date: 23-03-2011 K.SUBHASH

Place: Hyderabad Roll no:- 10138

TABLE OF CONTENTS

LIST OF TABLES & DIAGRAMS......................................................................................................5

ABSTRACT..........................................................................................................................................6
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INTRODUCTION.................................................................................................................................7

OBJECTIVE OF THE STUDY.............................................................................................................7

SCOPE OF THE STUDY......................................................................................................................8

LIMITATIONS OF THIS STUDY.......................................................................................................8

METHODOLOGY................................................................................................................................9

1. RESEARCH DESIGN...............................................................................................................9

2. DATA COLLECTION METHODS:.........................................................................................9

HERO HONDA- THE COMPANY....................................................................................................10

EMPIRICAL STUDY ON HERO HONDA.......................................................................................11.

HERO HONDA’S CORPORATE PROFILE......................................................................................13

COMPARISON OF TWO WHEELER SALE IN INDIA:..............................................................15

HERO HONDA 2009-10 PERFORMANCE HIGHLIGHTS..............................................................16

AT VENKATESWARA MOTORS, HYDERABAD(Primary data source)........................................18

MODELS AND VARIANTS SOLD AT VENKATESWARA MOTORS..................................19

SEGMENTS IN TWO WHEELERS..........................................................................................20.

POTENTIAL MARKET OF 2-WHEELERS AT HYDERABAD.................................................21.

Sales of Motor cycles..............................................................................................................22.

Sales of scooters.......................................................................................................................25.

Requirement vs dispatch.........................................................................................................27.

Model wise Retails at Venkateswara motors........................................................................29.

CUSTOMER SERVICES AT VENKATESWARA MOTORS..........................................................30

PROMOTIONAL ACTIVITIES AT VENKATESWARA MOTORS................................................32

ANALYSIS ON THE SERVICES OFFERED....................................................................................34

Free Service Details......................................................................................................................34

SERVICES OFFERED BY ARDs......................................................................................................35

TURN OVER OF SPARE PARTS......................................................................................................36

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FINDINGS AND SUGGESTIONS.....................................................................................................38

CONCLUSION...................................................................................................................................41

BIBLIOGRAPHY & REFERENCES..................................................................................................42

LIST OF TABLES & DIAGRAMS

Name of Table or Diagram Page.no

Pie chart no – 1(Sales two wheelers in the year 2008)……….................................................15

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Pie chart no – 2(Sales of two wheelers in the year 2009)…....................................................15

Bar chart no – 1(Comparison of two wheeler sales in India)...................................................17

Table no -1(Sales of Motorcycles)...........................................................................................22

Table no-2 (Sales of Scooters).................................................................................................25

Table no-3(Requirement Vs Sales)..........................................................................................27

Table no- 4 (Model wise sales)................................................................................................29

Table no – 5 (Customer vehicles being serviced)....................................................................34

Table no – 6(Customer vehicles being serviced at ARDs)…..................................................35

Table no- 7(Turnover from spare parts at Venkateswara motors)….........................................36

Table no- 8(Turnover of sales of spare parts from ARDs)......................................................37

Bar chart No-2(Sales of Motor Cycles)……………………………………………………….39

Bar chart No-3(Sales of Scooters)…………………………………………………………….39

Bar chart No-4(Requirements Vs Dispatches)………………………………………………..40

ABSTRACT

Venkateswara motors, An Authorized Dealer in Hero Honda has been in this business for the
past 8 years in Hyderabad city. This project throws light on analysis of sales process, number of
 Page |6

customers being serviced at the automated workshop of Venkateswara motors and the Revenue
generated through the sales of Spare parts which is one of the major functionality of their
business. In addition to this above study this paper shows detailed analysis of the entire activities
those are performed as part of their business include promotional activities, Retails of different
vehicles model wise, their social responsibilities towards public, their contribution to the
potential market geographically, and their customer relationship programs, their value added
services to the customer, their targets and competitive advantages. Some of these activities are
mentioned in this paper with exact numerical data (either sold or dispatched) happened over a
period of six months taken into study i.e. from April 2010 to September 2010. This paper
analyzes the entire numerical data provided by Venkateswara motors is processed using different
statistical tools such as Trend line in time series analysis, Calculation of standard deviation
happened in sales of vehicles and Estimation of Regression equation to forecast the demand and
sales in the future.

INTRODUCTION

Hero Honda Motors Limited, based in Delhi, India is a joint venture between the Hero Group
of India and Honda of Japan It has been referred to as the world's biggest manufacturer of 2-
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wheeled motorized vehicles since 2001, when it produced 1.3 million motorbikes in a single
year. During the fiscal year 2008-09, the company has sold 3.28 million bikes and the net profit
of the company stood at Rs. 1281.7 crore, up 32% from the previous fiscal year. Hero Honda has
been the largest two wheeler company in the world for eight consecutive years. The company
had a market share of 41.35% in the year 2008-2009 and over a 25 year span it has crossed the
15 million unit milestone. Hero Honda sells more two wheelers than the second, third and fourth
placed two-wheeler companies put together.

Objective of this study

 To understand the sales process of two wheelers by Venkateswara motors a Hero Honda
dealer in Hyderabad and in certain period.

 To Know how customers are being serviced at Venkateswara motors

 To understand how do they cope up with the number of situations (Eg:- competition from
other players in the market) occurring through the two-wheeler automobile business.

 To analyze the turnovers that is generated through selling of spare parts and also through
paid services offered by them.

SCOPE OF THIS STUDY

 Scope of this study is limited to a particular data such as sales, Value added services and
customer satisfaction
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 Data for this study has been collected from secondary sources such as company website
and some other official websites.
 For the better understanding of this study through statistical analysis the primary data
given by a Hero Honda showroom Venkateswara motors, Hyderabad has been used.

LIMITATIONS OF THIS STUDY

 This report doesn’t convey about the entire 2-wheeler automobile industry over the
country, but limited to the primary data provided by an Authorized Hero Honda dealer,
Venkateswara motors, Hyderabad.

 The data collected is analyzed mostly analytically. Qualitative analysis is restricted due to
information search constraints. Statistical concepts such as trend line, Dispersion tools
are used to analyze the obtained observations
 Data may be biased

METHODOLOGY

RESEARCH DESIGN
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The present study is an exclusive study on business issues concerned with Two-wheeler
automobile industry. In the present study descriptive research method is used. Descriptive
research is also called Statistical Research. The main goal of this type of research is to describe
the data and characteristics about what is being studied. The idea behind this type of research is
to study comparisons, averages, increase, decrease and other statistical calculations. Although
this research is highly accurate, it does not gather the causes behind a situation. Descriptive
research is used to obtain information concerning the current status of the phenomena to describe
"what exists" with respect to variables or conditions in a situation.

DATA COLLECTION METHODS

 Primary Data: Data obtained by direct interviews with officials of the company
showroom
 Secondary Data: Online Database, Hero Honda’s website and some other official two
wheeler websites and some business websites

HERO HONDA – THE COMPANY

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The company is committed to provide the customer with excellence. A rich background of
producing high value products at reasonable prices led the world's largest manufacturer of
motorcycles to collaborate with the world's largest bicycle manufacturer. During 80s, Hero
Honda became the first company in India to prove that it was possible to drive a vehicle without
polluting the roads. Their company possesses three manufacturing units based at Dharuhera,
Gurgaon and Haridwar are capable to produce 4.4 million units per year. They introduced new
generation motorcycles that set industry benchmarks for fuel thrift and low emission.

The unique features like fuel conservation, safety riding courses and mobile workshops helped
the group reach in the interiors of the country. Well-entrenched in the domestic market, Hero
Honda Motors Ltd. turned its attention overseas, and exports have been steadily on the rise.

Over the years, the Company has received its share of accolades, including the National
Productivity Council's Award ( 1990-91), and the Economic Times - Harvard Business School
Association of India Award, against 200 contenders. The gross sales of Hero Honda by March
end'2008 was 33,371,43 Crores

EMPIRICAL STUDY ON HERO HONDA

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Hero Honda Bikes in India are in great demand because of the high level of quality and superior
technical skills. Hero Honda has carved a niche in the competitive Indian market for churning
out motorcycles with high fuel efficiency and low maintenance.

Hero Honda Bikes are reputed for low maintenance and high fuel efficiency. Today, Hero Honda
is taken to be the world's largest two-wheeler manufacturer based in India. Hero Honda markets
two wheelers for the middle-class & upper class families too. Hero Honda bikes price range are
attractive in comparison of other bike manufacturing company. Hero Honda bikes have been on
Indian roads since 1984 when Hero Cycles Ltd. tied up with Hero Group of India and Honda of
Japan to start a joint venture.

Hero Honda's commitment is to customer - quality & excellence. Hero Honda's key strategy has
been driven by innovation in every sphere of activity. Hero Honda Bikes are manufactured
across three globally benchmarked manufacturing facilities. Hero Honda's product range
includes variety of motorcycles that have set the industry standards across all the market
segments.

Driven by the trust of over 5 million customers, the product range of Hero Honda commands a
market share of approximately 50%. Starting with a sale figure of only 43,000 units in 1985-86,
the company has reached a high of 26,21,400 units in 2004-05. According to Pawan Munjal,
Managing Director and CEO of Hero Honda, the gap with its nearest rival, Bajaj Auto, is over a
million units in 2004-05.

On a compounded annual growth rate (CAGR) basis, the sales volume of the company have been
growing at 33% for the last 6 years (as stated in 2003-04) and the net sales value at 36% over the
same period. Parallel to it, the profit of the company has been growing at 50% CAGR.

The company enjoys debt free status since March 01 and had zero level of contingent liabilities
as of 31st March 03. The entire long term debt of Rs. 116 Cr. as on 31st March 03 represents an
interest free loan from the Government of Haryana on account of sales tax deferment, and has no
costs attached to it.

Bikes from Hero Honda:

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 Hero Honda CD-dawn

 Hero Honda CD-Deluxe
 Hero Honda Splendor Plus
 Hero Honda Splendor NXG
 Hero Honda Passion Plus
 Hero Honda Super Splendor
 Hero Honda Glamour
 Hero Honda Achiever
 Hero Honda CBZ Xtreme
 Hero Honda Hunk
 Hero Honda Karizma
 Hero Honda Pleasure

Today, every second motorcycle sold in the country is a Hero Honda bike. Every 30
seconds, someone in India buys Hero Honda's top-selling motorcycle – Splendor.

HERO HONDA’S CORPORATE PROFILE

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Vision
The Hero Honda story began with a simple vision – the vision of a mobile and an empowered
India, powered by Hero Honda. This vision was driven by Hero Honda’s commitment to
customer, quality and excellence, and while doing so, maintaining the highest standards of ethics
and societal responsibilities. Hero Honda believes that the fastest way to turn that dream into a
reality is by remaining focused on that vision.

Strategy
Hero Honda’s key strategy has been driven by innovation in every sphere of activity – building a
robust product portfolio across categories, exploring new markets, aggressively expanding the
network and continuing to invest in brand building activities.

Manufacturing
Hero Honda bikes 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 is based at Haridwar, in the hill state
of Uttrakhand.

Technology
In the 1980’s Hero Honda pioneered the introduction of fuel-efficient, environment friendly
four-stroke motorcycles in the country. Today, Hero Honda continues to be technology pioneer.
It became the first company to launch the Fuel Injection (FI) technology in Indian motorcycles,
with the launch of the Glamour FI .

Products
Hero Honda's product range includes variety of motorcycles that have set the industry standards
 P a g e | 14

across all the market segments. The company also started manufacturing scooters. Hero Honda
offers large no. of products and caters to wide variety of requirements across all the segments.

Distribution
The company's growth in the two wheeler market in India is the result of an intrinsic ability to
increase reach in new geographies and growth markets. Hero Honda's extensive sales and service
network now spans close to 4500 customer touch points. These comprise a mix of authorized
dealerships, Service & Spare Parts outlets, and dealer-appointed outlets across the country.

Brand
The company has been continuously investing in brand building utilizing not only the new
product launch and new campaign launch opportunities but also through innovative marketing
initiatives revolving around cricket, entertainment and ground- level activation.

Activities

Hero Honda has been actively promoting various sports such as hockey, cricket and golf. Hero
Honda was the title sponsor of the various sporting events played in India.

COMPARISON OF HERO HONDA’S SALES WITH THE SALES OF

TWO-WHEELERS IN OTHER BRANDS
 P a g e | 15

Sales in 2009
5% 3% Hero Honda
23%
TVS motors
India yamaha
Suzuki

69%

Sales in 2010
20% 3% 3%
Hero Honda
TVS motors
India Yamaha
Suzuki

74%
 P a g e | 16

HERO HONDA’S 2009-10 PERFORMANCE HIGHLIGHTS

 Continues with its industry leadership as the world’s largest manufacturer of two-
wheelers as a single company for the ninth consecutive year
 Crosses the landmark figure of 4 million cumulative sales in a single year – posts sales of
more than a million units for every quarter in FY’10
 Hero Honda 'Touch Points' cross 4200 in number as part of aggressive network expansion
initiative
 Launches 9 models in the fiscal including refreshes, variants and new models
 Launches all new sporty and stylish Karizma ZMR
 Celebrates crossing 11 million sales of the hugely popular Splendor
 Keeps strengthening its presence in the scooter market, now selling over 20,000 units of
Pleasure per month
 Builds on its strong association with multiple sports – from cricket and golf to hockey,
football and Commonwealth Games
 Continues to tap rural & upcountry markets through dedicated ‘Rural Vertical’ with the
visionary "Har Gaaon…Har Aangan" platform
 Receives a slew of prestigious awards through the financial year, including the
“Company of the Year” 2009 by Economic Times
 Total unit sales of 46,00,130 two-wheelers, growth of 23.6 per cent.
 Total net operating income of Rs. 15860.51 Crores, growth of  28.1 per cent.

 Net profit after tax at Rs. 2231.83 Crores, growth of 74.1 per cent.

 Final dividend of 1500% or Rs. 30 per share on face value of each share of Rs. 2.

 EBIDTA margin for the year 17.4  per cent.

 EPS of Rs. 111.77, growth of 74.1  per cent.

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INDIAN MOTORCYCLES SALES FIGURES FOR APRIL 2009 VS 2010

 P a g e | 18

PRIMARY DATA SOURCE: VENKATESWARA MOTORS (AN

AUTHORIZED HERO HONDA DEALER), HYDERABAD

A study is done on sales, turnover from spare parts and services offered to the customers of Hero
Honda vehicles from Venkateswara motors (An Authorized Hero Honda Dealer), Hyderabad for
six months i.e. from April 2010 to September 2010

Venkateswara motors has been established in Hyderabad for 8 years winning the respect and
trust of all Hero Honda customers . Started as a Authorized Representative Dealer in Hyderabad
and it has got Authorized Dealership in 12 th June 2006 and from then it is acting as a central field
to four other ARDs (Authorized Representative dealers) in the surrounding areas . Venkateswara
motors has sales up to 50% of the potential market in surrounding areas covering 35kms radius
all round the Hyderabad City and targeting all kinds of customers.

The four Authorized Representative Dealers under this Venkateswara motors are as follows.

Four ARDs (Authorised representative dealers) under this

 Sri Rama Narayana Automobiles

 Bhagya Lakshmi Motors
 Sri Lakshmi Motors
 Vallabha Reddy Motors
 P a g e | 19

Models and Variants of two-wheelers sold by Venkateswara motors

In a nutshell Venkateswara motors showroom has 17 models of Hero Honda Two wheelers
including Motor cycles and Scooters and they maintain all over 40 variants among all two
wheeler hero Honda automobiles with a wide number of 258 SKUs (Stock Keeping Units)

Model name Variants Variant details Point to Colors SKU

note
Cd dawn 1 Drum brake,Kick start, spoke 5 5
wheel
Cd deluxe 4 Drum brake, kick/self start, 5 20
spoke/cast wheel
Splendor nxg 4 Drum brake, kick/self start, 6 24
spoke/cast wheel
Splendor bs2 2 Drum brake, kick start, spoke/cast BS2 7 14
wheel MODEL
Splendor bs3 2 Drum brake, kick start, spoke/cast BS3 8 16
wheel MODEL
Splendor pro 4 Drum brake, kick/self start, 8 32
spoke/cast wheel
Splendor plus 2 Drum brake, kick/self start, 6 12
spoke/cast wheel
Passion plus 5 Drum brake, kick start, spoke/cast 7 35
wheel
Passion pro 4 Drum brake, kick/self start, Pro with 7 28
mf spoke/cast wheel, MF battery MF battery
Super 2 Drum brake,self start, spoke/cast Self start 7 14
splendor wheel
Glamour 2 Drum brake, self start, spoke/cast Self start 6 12
wheel
Glamour fi 2 Drum/Disc brake, kick/self Fuel 3 6
start,cast wheel Injection
Cbz extreme 1 Disc Front, kick/self start,cast Self Start 5 5
wheel
Hunk 2 Disc front/ front & rear, kick/self Self Start 7 14
start, cast wheel
Pleasure 1 Drum brake, self start,cast wheel Self Start 10 10
Karizma R 1 Disc:front brake, kick/self start, 5 5
spoke/cast wheel
ZMR 1 Disk brake,self start, spoke/cast Fuel 6 6
wheel Injection
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SEGMENTS IN TWO WHEELERS

Venkateswara motors has four divisions of all models shown above from Hero Honda Two
wheelers (including 17 models and 40 variants). Those divisons are called as Segments. Those
Four segments are

Economy or entry level vehicles:

The Two wheelers from Hero Honda which are less in price and most economical vehicles come
under this segment. Generally Motor Bikes with or less than 100cc are considered as Economy
or Entry level vehicle

Eg: CD dawn, CD deluxe

Deluxe segment:

Bikes Next to the Entry level are called Deluxe Segment 2-wheelers. Price of Motor Bikes under
Deluxe segment are slightly higher than the price of bikes under economy segment. Generally
bikes with 100cc-125cc come under this segment.

Eg:- Splendor plus, Splendor pro(yet to be released), Passion pro, Super splendor, Glamour,
Glamour FI

Premium segment:

Prices of Motor Bikes under Premium segment are much higher than that of Deluxe segment.
And bikes with 150cc – 225cc come under Premium segment.

Eg:- CBZ Xtreme, Hunk, KarizmaR, ZMR

Super premium

Bikes with 600cc and above it come under super premium bikes. Motor Bikes under this segment
are highly expensive.
 P a g e | 21

Venkateswara motors showroom recorded higher sales of motor bikes under deluxe segment and
shown great performance for the last 6months and less recorded are premium segment due to
Low supply issues from other dealers. Even though there is a great demand for Premium segment
vehicles geographically, they failed to record high sales due to the less count in number of 2
wheelers dispatched from higher sources like Stock Keeping Units. Sometimes they had a
situation that they had to sell less prominent vehicles like Hunk with discounts and free gifts
instead of the customer request for either CBZ Xtreme or KarizmaR due to poor supply issues.

Model (BS2 & BS3)

BS2 & BS3 are standards set as per Indian Government Norms called Bharat Stage 2 & Bharat
Stage3. Between the both of them BS3 standards are highly accepted standards by the
government. And these standards designed with in the conscience of environmental issues. BS3
standard vehicles produce less pollution than BS2 standard vehicles. At Venkateswara motors
they sell only BS3 Standard 2 wheelers produced by Hero Honda. This can be considered as their
contribution to the part of Corporate Social Responsibility.

Sales of Motor cycles

Venkateswara motors’ sales performance of two-wheeler motorbikes for a period of six months
is as follows

Business area April‘10 May‘10 June’10 July‘10 August‘10 September’10

MC 200 210 220 215 225 230
Dispatches
MC Retails 200 195 220 260 111 205
*motorcycles include all models among all variants

MC dispatches is Total number of Motor Cycles being dispatched for each month

MC retails is the actual number of two wheelers sold for each month

We can get a regression line with the available data of Motor cycles dispatches and Motor cycles
Retails.
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Trend line showing Motorcycle retails.

MC Retails
300
250
Observations
200
from
150 MC Retails
the
100 Polynomial (MC Retails)
above
50
trend
0
line:
0

10

0
0

r '1
'1

'1

'1

ly'

st'
ne
ay
ril

be
Ju

gu

The above trend

Ap

Ju

em
Au

pt
Se

line
drawn
for Motor Cycle Retails at Venkateswara motors, Hyderabad indicates that sales of two
wheelers in all months is almost similar, that indicates consistency in doing a business by
them. Moreover by using this trend line graph they can estimate future retails also by then
they can order according to the posing requirement.

Standard deviation of sales of motor bikes

Applying a Concept of Standard deviation to the Sales of Two wheeler motorcycles at

Venkateswara motors, taking mean as a central tendency and calculating variance and
standard deviation. Both of these tell us the extent of difference between any sales
observation and central value. This can be done as follows

MC Retails Mean Deviation (X- Deviation squared Observation squared

(X) (µ) µ) (X-µ)2 X2
April'10 200 198.5 1.5 2.25 40000
May'10 195 198.5 -3.5 12.25 38025
June'10 220 198.5 21.5 462.25 48400
July'10 260 198.5 61.5 3782.25 67600
 P a g e | 23

August'10 111 198.5 -87.5 7656.25 12321

September'10 205 198.5 6.5 42.25 42025
Total ΣX=1191 Σ(X-µ)2=1197.5 Σ X2=248371

N (number of observations) = 6

Mean(X) = 198.5

Variance (σ2)= Σ(X-µ)2 /N = 1992.917

Standard Deviation (σ) = √ σ2 = 44.642

Regression analysis of sales of motor bikes

There is one more sophisticated method comes from one of the mathematical properties of a line
fitted by the method of finding a regression line. Using regression line equation future
demand can be estimated as well as sales. The method of estimating an equation is as
follows.

MC Dispatches MC Retails XY X2
(X) (Y)
April'10 200 200 40000 40000
May'10 210 195 40950 44100
June'10 220 220 48400 40000
July'10 215 260 55900 44100
August'10 225 111 24975 40000
September'10 230 205 47150 44100
Total 1300 1191 257375 252300
 P a g e | 24

To apply regression concept, one entity must depends on other entity. Here Moto Cycle retails
depends up on Motor Cycle Dispatches. The equation of regression line is as follows

mean(Y)=a+b*mean(X)

mean(X)= 216.667

mean(Y)= 198.5

From the formula b= [ΣXY-n*mean(X)*mean(Y)]/[ΣX2-n*mean(X)2]

b =1.02011 n= Number of Observations

a= mean(Y)-b*mean(X) a= -22.524

Hence the Estimating equation is Y^= 1.02*X-22.52

If the number of 2 wheelers dispatched are 500, i.e. X=500

Y^=1.02*500-22.52

Number of 2 wheeler motor bikes that could be sold by Venkateswara motors, Hyderabad if 500
motor bikes are dispatched is 487

Sales of Scooters ri Jayaram Motors’ sales performances of two-wheeler Scooter for a period of
six months taken into study are as follows

Business area April ‘10 May ‘10 June ‘10 July ‘10 August‘10 September‘10
Scooter 12 8 0 0 8 0
dispatches
Scooter retails 7 9 4 0 0 8

In turn Venkateswara motors has recorded very less number of sales for Hero Honda, one among
the main reason could be the only one model under this scooter division is Hero Honda Pleasure.
 P a g e | 25

Scooter retails
10
9
8
7
6
5 Scooter retails
4
3 Polynomial (Scooter retails)
2
1
0

Standard

deviation of sales of Scooters at Venkateswara motors, Hyderabad

Applying a Concept of Standard deviation to the Sales of Two wheeler motorcycles at

Venkateswara motors, taking mean as a central tendency and calculating variance and
standard deviation. Both of these tell us the extent of difference between any sales
observation and central value. This can be done as follows

Month MC Retails Mean Deviation Deviation squared Observation squared

(X) (µ) (X-µ) (X-µ)2 X2
April'10 7 4.67 2.33 5.4289 49
May'10 9 4.67 4.33 18.7489 81
June'10 4 4.67 -0.67 0.4489 16
July'10 0 4.67 -4.67 21.8089 0
August'10 0 4.67 -4.67 21.8089 0
September'10 8 4.67 3.33 11.0889 64
Total 28 79.3334 210

N (Number of Observations taken) = 6

Mean (X) = 4.67

Variance (σ2) = Σ(X-µ)2 /N = 13.223

Standard Deviation (σ) = √ σ2 = 3.63

 P a g e | 26

REQUIREMENT VS DISPATCH

Venkateswara motors has presented a data about Requirement Vs Dispatch. Where it focuses on
requirement of theirs and what could be the expected plan of selling set by Hero Honda Motor
Ltd Plan (HHML plan) and that to the actual number of two wheelers has been dispatched.

The data for the six months taken into study are as follows

Monthly motor cycle requirement vs dispatch

Month Requirement HH Motor Actual dispatch Percentage of bikes

Ltd plan sold as per HHML
plan
April10 400 250 200 80%
May10 420 250 210 84%
June10 425 250 220 88%
July10 410 250 215 86%
August10 420 250 225 90%
September10 350 250 230 92%

Trend line showing Percentage of bikes sold as per HHML plan

 P a g e | 27

Percentage of bikes sold as per HHML plan

94%
92%
90%
88% Percentage of bikes sold as per
86% HHML plan
Polynomial (Percentage of
84% bikes sold as per HHML plan)
82%
80%
78%
76%
74%
10-Apr 10-May 10-Jun 10-Jul 10-Aug 10-Sep

Applying one more sophisticated method comes from one of the mathematical properties of a
line fitted by the method of finding a regression line. Using regression line equation
future requirement and dispatches that can be done can be estimated. The method of
estimating an equation is as follows.

Requirement Actual XY X2
(X) dispatch
(Y)
April'10 400 200 80000 160000
May'10 420 210 88200 176400
June'10 425 220 93500 160000
July'10 410 215 88150 176400
August'10 420 225 94500 160000
September'10 350 230 80500 176400
Total 2425 1300 524850 1009200

To apply regression concept, one entity must depends on other entity. Here Moto Cycle retails
depends up on Motor Cycle Dispatches. The equation of regression line is as follows

mean(Y)=a+b*mean(X)
 P a g e | 28

mean(X)= 404.167

mean(Y)= 216.67

From the formula b= [ΣXY-n*mean(X)*mean(Y)]/[ΣX2-n*mean(X)2] b =0.52

n= Number of Observations

a= mean(Y)-b*mean(X) a= 46.24

Hence the Estimating equation is Y^= 46.24+0.52*X

If the number of 2 wheelers dispatched are 500, i.e. X=500 then Y^=46.24+0.52*500

Number of 2 wheeler motor bikes that could be dispatched from Rajahmundry Venkateswara
motors if 500 motor bikes is the actual requirement 306

MODEL WISE RETAIL AT VENKATESWARA MOTORS

As Venkateswara motors has number of models with different variants, the sales happened for a
period of 6 months taken into consideration i.e. from April 2010 to September 2010 model wise
is as shown below.

Models April’10 May’10 June’10 July’10 August’1 September’10

0
CD dawn - - - - - -
CD deluxe 10 - - 30 - -
Splendor - - - - - -
NXG
Splendor - - - - - -
BS2
Splendor - - - - - -
BS3
Splendor - - - - - -
Pro
Splendor 118 - 105 50 50 50
Plus
Passion Pro 6 81 65 127 52 112
Passion Plus 55 61 23 30 - -
 P a g e | 29

Super - - - - - -
Splendor
Glamour - 26 10 40 - 20
Glamour FI - - - - - -
CBZ 12 18 11 10 8 12
extreme
Hunk 2 - - - 1 3
Karizma - - - 3 - -
Zmr - - - - - -
Pleasure 7 9 6 - - 8
Total MC 200 195 220 260 111 205
retails

CUSTOMER RELATIONSHIP MANAGEMENT

For Customer Relationship Management they have specific Customer Relationship Program
through which they offer special privileges to the customers.

Hero Honda started a program called Customer Passport in 2000. Venkateswara motors got
benefited with this program and it helped to get more customers.

Now the same program has been changed to Good life. Right now 60 Lakh customers are
registered as members in this Good life program. Good life program helps them to maintain
entire log of information about all customers and this is main and important program for
showroom under customer relationship management. And this is a successful program; this Good
life Program has lot of benefits to the customers.

For every service they offer to each customer vehicle, the showroom allots points for that
customer. For free service they offer 100pts and for paid service they offer 150pts. And if any
customer influences other to buy a bike at Venkateswara motors showroom, then showroom
offers 3000 bonus points to that customer’s passport. And even if customers buy any spare parts
at their show room, then showroom offers number points equal to the amount of purchase of
spare parts. With this scheme every member og good life program will get a discount of 5% on
 P a g e | 30

all spare parts of Hero Honda until and unless they buy spare parts at Venkateswara motors.
Through this program, customers have an advantage of one lakh risk coverage as insurance.

Suhana-Safar Program:

In this program Venkateswara motors wishes greetings for their customers during special
occasions like Marriage Anniversaries, Birthdays.

Through this program Venkateswara motors intimates their customers about the new releases in
hero Honda, and they even offer movie tickets and conduct some entertainment programs to
maintain healthy and strong relations with customers enrolled in Good life scheme.

Program Hero Honda Advantage

Advantage is a program, through which Hero Honda showroom adds an extended warranty to the
customers’ vehicles from Venkateswara motors Showroom. For this program to be successful
Hero Honda has a tie up with Extended Warranty Corporation. Through this Advantage, they add
3 years extended warranty to the 100cc vehicles for which the actual warranty is only 2years, and
they add 2 more years as extended warranty to the vehicles with 150cc and above vehicles.
Hence this program satisfies almost every customer and even it helps in fetching new customers.

There is another channel in this program called Matrix driven extended warranty to 120 genuine
spare parts of Hero Honda. Moreover this warranty is specific to each variant in each model of
motor cycle. And there are number of options available with difference in the validity of
warranty. With this scheme every customer who bought two wheeler automobiles at
Venkateswara motors can get an extended warranty on specific spare parts in spite of the total
warranty for entire vehicle.

Trained Work force

Managers at almost all Hero Honda showrooms conduct some training program for all
executives and employees and other workforce working at all other Hero Honda showrooms. The
senior management at regional centers (Eg:- such as Managers at Vijayawada conduct training
program for entire Coastal Andhra region)
 P a g e | 31

They are getting trained by trainees from NIS (National Institute of Sales), and this is also called
as Reliance Group training program. And this is Asia’s best training program that is given to
employees.

This training helps all employees divisionally to connect with all customers of Hero Honda.

What staff will do

 They receive customers at the door step of their showroom, and there is dedicated
workforce to do this.
 When they engage with customers, they open their customer mind and try to think in
customer’s perspective and they understand the needs of customers.
 Suggest the best idea in accordance with customers’ plans and expectations.
 Company officials train their employees in such a way that to engage their work force in
knowing about the competitor and their own company about new releases and their
technical specifications. (they do this through forwarding mails).

PROMOTIONAL ACTIVITIES DONE BY VENKATESWARA MOTORS

 There are number of promotional activities those are being undertaken by Venkateswara
motors in spite of the promotional activities done by Hero Honda Company.
 Venkateswara motors usually conduct a promotional activity through exchange cum loan
mela, through which customers can exchange their old bikes with new bikes in showroom
in addition to this they can get a loan with less interest rates.
 Venkateswara motors provide finance in the showroom itself to assist their customer in
buying a two wheeler. They do finance through Corporate bankers. This helps in
attracting more customers.
 Venkateswara motors gives ads through news paper’s local edition, through which new
offers or new releases in Venkateswara motors at Hyderabad can be informed to the
people over there. They even use local media to advertise.(Despite of the actual
promotion by Hero Honda)
 Venkateswara motors take up an enquiry from customers in different forms like through
walk in of the customer directly into showroom, through telephone enquiry .
 P a g e | 32

CUSTOMER SERVICES AT VENKATESWARA MOTORS,

HYDERABAD:

Customer Facilities and Comforts:

 Automated Workshop
 Air conditioned Lounge
 Pay phone facility
 Mini-Library
 Exclusive Washrooms
 Quick Service (Delivery in 1 hour)
 Hero Honda passport (Good life)
 Help line Service
 Locker Facility to keep customers’ important things
 Customer classifieds*
 P a g e | 33

ANALYSIS ON THE SERVICE OFFERED BY THE SRI JAYARAM

MOTOR SHOWROOM TO THE CUSTOMERS’ VEHICLES

Free service details: The Below data represents the number of customers or customers’ vehicles have
been serviced at Venkateswara motors’ own automated work shop. At first they offer 6 free services to
each customer in spite extended warranty. And for every month their work shop maintains 6 schedules,
and also maintains a record of number customers they serviced over there during each schedule.

1st 2nd 3rd 4th 5th 6th FSC 2nd On-ramp Reporting
Total year pwty total
April’10 198 260 190 174 181 127 1130 586 721 2437
May’10 170 195 173 128 103 90 859 572 704 2135
June’10 172 188 175 23 101 91 859 582 715 2149
July’10 193 159 171 138 136 126 923 512 722 2157
August’10 194 164 141 140 91 99 829 504 654 1987
September’10 197 224 188 152 134 131 1026 490 623 2139

Trend line representing the total number of vehicles being serviced at Venkateswara
motors, Hyderabad

Reporting total
3000 Observations
from the above
2500
trend line
2000
1500 Reporting total
The above graph
1000 Polynomial (Reporting total) indicates the trend
500 of customers being
0
serviced at
0 0 0 10 10 0
’1 ’1 e’1 ly’ st’ ’1
ril ay n u u er Venkateswara
Ap M Ju J g
em
b
Au pt
Se motors’ automated
work shop. The
showroom recorded a highest number of services in the month of April and lowest in the month
of August.
 P a g e | 34

Services offered by the ards (authorized representative dealers) of

Venkateswara motors, Hyderabad

Below table represents the Data reported by the four ARDs of Venkateswara motors about the
services they offered to the hero Honda customers at their workshops.

Wty paid Wty paid Wty total Post Wty Total

Reporting
April’10 871 345 1216 405 1621
May’10 730 342 10072 408 1480
June’10 720 411 1131 400 1531
July’10 629 384 1013 376 1389
August’10 591 392 983 379 1362
September’10 672 400 1072 384 1456

The graph representing the trend of Customer being serviced at Authorized Representative dealers of
Venkateswara motors

1650
Total reported
1600
1550
1500
1450
1400 Total reported
1350 Linear (Total reported)
1300
1250
1200
April’10 May’10 June’10 July’10 August’10 September’10

Observations *: Above trend represents the four ARDs offered Maximum number of customers
in the month of April and the least number of customers in the month August. Observations of
this graph have a typical raise in the number of serviced customers in the month of June.
 P a g e | 35

TURNOVER OF SPARE PARTS AND SERVICES

Venkateswara motors has an inbuilt expo of genuine spare parts available for all Hero Honda
motor bikes sold in their showroom. They sell wide range of spare parts for number of customers
every month. And they say that this is one of major income source for them and also for
Authorized Representative Dealers under them. As per the data given by Venkateswara motors
i.e. the income through selling of genuine spare parts for a period of six months taken into study
are as follows.

Sales of Spare parts reporting

W/s sale report Wty Replacement Counter sale Total

April’10 3,05,648 28,995 52,663 3,87,306
May’10 2,76,484 30,659 68,966 3,76,103
June’10 2,80,246 32,441 27,111 3,97,981
July’10 1,95,572 25,549 14,230 2,35,351
August’10 3,27,303 25,666 47,840 4,00,809
September’10 3,15,200 25,498 36,097 3,76,795

Trend line showing Revenue through turnover of spare parts

Revenue through selling of spare parts

450000
400000
350000
300000
250000 Revenue through selling of
200000 spare parts
Polynomial (Revenue through
150000 selling of spare parts)
100000
50000
0
0 0 0 10 10 0
ril
’1
ay
’1 e’1 ly’ st’ r’1
Ap Ju
n Ju u be
M
A ug te
m
p
Se

Observations: Above graph shows the trend line representing the generation of revenue for
Venkateswara motors by selling spare parts to the customers, where they have a dedicated
 P a g e | 36

employees and space for Spare parts shop inside the showroom itself. This is major income
source for them. And the above trend line marked the highest revenue in the month of June and
generated least revenue in July as on the observation taken from a period of six months.

Revenue generated through selling of spare parts from ARDs (Authorized representative
Dealers) of Venkateswara motors, Hyderabad

Below table represents the data regarding revenue generated through selling of spare parts from ARDs of
Sri Jayaram Motor.

Rev-oil Rev Free service Rev Paid service Total

April’10 1,54,073 1,12,219 1,43,375 4,09,667
May’10 1,54,894 87,082 1,12,670 3,54,646
June’10 1,63,299 92,718 1,14,520 3,70,537
July’10 1,49,019 87,098 1,15,400 3,51,517
August’10 1,29,672 79,559 1,13,300 3,22,531
September’10 1,42,226 94,858 1,08,600 3,45,684

Trend line representing the trend of revenue generated through the selling of spare parts from
ARDs

Revenue generated through selling of spare parts from

ARDs
450000
400000
350000
300000 Revenue generated through
250000 selling of spare parts from ARDs
200000 Linear (Revenue generated
through selling of spare parts
150000 from ARDs)
100000
50000
0
0 0 0 10 10 0
ril
’1
ay
’1 e’1 ly’ st’ r’1
Ap Ju
n Ju u be
M
A ug te
m
p
Se
 P a g e | 37

FINDINGS AND SUGGESTIONS

The data of Modelwise sales in Hero Honda two wheeler automobiles at Venkateswara motors
showroom gives an idea that the showroom has recorded an highest number in sales of Deluxe
segment vehicles, they are Splendor plus, Passion pro and Passion plus. But It recorded less
number in Premium segment 2 wheelers compared to deluxe segment vehicles and even scooter
also doesn’t make any sense of high number in sales. If major branches or Stock Keeping units
are able to dispatch the number of bikes equal to the requirement, then Venkateswara motors
showroom could be able to make more sales by then it can generate more revenue.

One of the best finding from the entire study is Venkateswara motors posess some competitive
advatage over other competitors and they are 1) The Best Automated Workshop 2)Service
Satisfaction from Customers 3)Better Resale value of Bikes 4) Consistenet Milege of 2 wheelers
sold by them 5)Japan Technology used in engines (Core competency of Honda)

Suggestion for this above finding is Venkateswara motors can advertise these activities and they
could use these as a part of their promotional activities. Right now they are using only 2
advantages as their biggest assets.

In the Automated workshop of Sri Jayaram Motros they have one Customer Information
Board which informs customers about the service department, team supervisors, names of
mechanics in each teams and service advisors. Venkateswara motors do have a time table for this
they have 2 shifts daily in an automated workshop and there are four teams for each session and
there are four mechanics for each team with that each team has a team supervisor and one service
advisor for the entire workshop.

BAR CHARTS
 P a g e | 38

Bar chart No: 2 showing Monthly sales of Motor cycle sales at Venkateswara motors

Sri Jayaram Motors Motor cycles sales

300
250
200
150 MC Dispatches
MC Retails
100
50
0
0 0 0 0 0 0
il'1 ay
'1
ne
'1 ly'1 st'
1 r'1
A pr M Ju Ju gu be
Au em
ept
S

Bar chart No: 3 showing monthly retails of Scooters at Venkateswara motors

Scooter Retails
12
10
8
6 Scooter dispatches
Scooter retails
4
2
0
0 0 0 1 0 0 0
il'1 ay
'1
ne
'1 ly' st'
1 r'1
A pr M Ju Ju gu be
Au em
ept
S
 P a g e | 39

Bar Chart No 4 : showing Requirement Vs Retail at Venkateswara motors

Sri Jayaram Motors Requirement vs Retail

450

400

350

300 Requirement
HHML plan
250
Actual Retail
200

150

100

50

0
April'10 May'10 June'10 July'10 August'10 September'10

CONCLUSION

Statistical analysis of sales and customer service data emphasizes that the showroom
Venkateswara motors has done well in all the months taken into study and it is contributing 50%
among the potential market and surrounding area in it. But one main observation from the entire
 P a g e | 40

business process is there is a large mismatch between requirement by the Venkateswara motors
and the dispatches from Stock keeping units. And one appreciating point from the analysis is that
the gap between HHML plan of selling of motor cycles to the actual number sold by showroom
is very less. And the showroom is generating good amount of revenues through selling of spare
parts. Venkateswara motors has an efficient staff and they are being trained by NIS, this helps in
making showroom a good place for walk-in customers. Customer relationship management
through several programs conducted by them benefits many customers and it even helps in
retaining old customers and getting new customers.

Through Ride Safe Program Venkateswara motors is undertaking Corporate Social

Responsibility. In this program they are making people aware of traffic rules and mentoring
about careful bikeriding to their customers and even to non customers.Venkateswara motors has
specially trained staff and a dedicated room for that, and this even supports their ongoing
business process.

BIBLIOGRAPHY & REFERENCES

Websites:

 www.herohonda.com
 www.moneyarbour.com

 www.bikesncars.com
 www.reportjunction.com

Primary data source:

 From the data and sales records of Venkateswara motors, An Authorized Dealer in Hero
Honda, Hyderabad
 P a g e | 41

 From the records of sales and revenues of spare parts of Motor Spare Parts Shoppe,
Hyderabad
 Customer services data from the records of an Automated Workshop, Venkateswara
motors