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AUTHOR DETAILS: Mr. Dhruv Suri Enrollment Number: A0101911112 MBA Section B Roll No.: 37 Contact No.

: +91-9999-699-321 E-mail:

CO-AUTHOR DETALS: Mr. Atul Gupta Vice President - Sales & Marketing

Sales & Marketing Office: IInd Floor, Plot No 1, Nelson Mandela Road, Vasant Kunj, New Delhi - 110070 (India) Contact No.:011-43127000 E-mail:


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HISTORICAL APPRAISAL: In the early 1980s, owning a motorcycle was equivalent in status terms to having an expensive imported car today. The motorcycle segment reported a sharp decline in growth on account of factors such as high running and maintenance costs, perception that motorcycles were more suitable for the rural roads, high price of motorcycles in comparison with scooters or mopeds and the availability of fairly new models of scooters. With the de-licensing of the automobile sector in the mid-1980s, the motorcycle sales registered a healthy growth during the late 1980s. In 1990, due to the rise in fuel prices, high input costs and reduced purchasing power, the industry witnessed a recession. In 1993, the recession began to ease off and the growth in the motorcycles segment began. The two-wheeler industry saw large-scale structural changes. With the launch of lighter, 100-cc motorcycles, a significant shift began to take place and motorcycles sales began to grow. One of the major assumptions underlying the motorcycles rush was that if the market was considerably large and was growing at a constant rate. But in 2010-11 the estimated sales of motorcycles in the Indian urban area was declining. The number of motorcycles operating on roads was reducing with increase in per capita income.

Market Share 2010-11

Bus Car Motorcycle Walk Metro Taxi Bicycle Others

Fig 1.1 Estimated shares of transportation modes in India (2010-11)

SITUATION ANALYSIS: Although the motorcycles offered to the Indian consumers comprise of a wide variety of models to choose from, but the companies are under immense pressure to concentrate on cost-cuts, technology enhancements, and up gradation along with styling. The companies were forced to reduce prices and offer discounts to survive the competition. Therefore their margins came under pressure as marketing costs increased. Virtually every Auto Magazine in this country rate the Suzuki Bikes as a good bike in the 125 cc segment. Even my own personal opinions do not differ much from these auto magazines.

Fig 1.2 Comparative graph showing market share of various motorcycle companies in India (2008) SIAM Data [1] PLANNING ASSUMPTIONS: The Indias rural economy is very large and there is immense growth in the lower middle class income households. The growth prospects of the Indian rural economy offer a significant opportunity for the motorcycles in India. The penetration of motorcycles among rural households with income greater than 1, 00,000/- per annum has already increased over 50 percent and is expected to grow even further. [1]

First lets divide this case study for rural markets into a few sections: 1. Who are the 125 cc Target Customers" and what are they looking for? 2. The "Buyer Behavior" of a125 cc customer. 3. The "Evaluation/Choice Process" of a customer, before making the Buying Decision. The 125cc customer has one most important factor in his mind that is "M I L E A G E"..!!! Price maybe another important factor, but in most cases, it is seen that the buyer can stretch his budget a little bit for a bigger and more powerful 150 cc bike. But still he does not want to opt for a 150 cc bike, because he knows that a 150 cc bike would give him less mileage. The buyer does not want to lose out too much on the around 65 kmpl of mileage of a typical 100 cc bike gives but at the same time he was also prepared to sacrifice of maybe around 5 kmpl for a little bit of more power and riding pleasure. Therefore the obvious choice is to settle for a 125cc motorcycle [1]. Suzuki Zeus/Heat: Hmm... relatively a new brand in bikes in India but the TVS-Suzuki bikes were fuel
efficient also look at the Maruti Suzuki Logo..!! It must be fuel efficient like Maruti-Suzuki cars. The bike looks like a commuter too. Must be fuel efficient.

- [2]

Now lets study the Buying Behavior of a 125cc customer: Need of Recognition - The buying process begins with recognition on the part of the buyer that he has a problem or need. Factors like price, looks/styling, and resale value will be always there, but according to me, the Fuel Efficiency happens to be the most important factor for a 125 cc buyer. Information Search - According to Marketing Book, Philip Kotler, information sources fall into 3 categories: Personal Sources (family, friends etc.) Commercial Sources (Auto Magazines, Promotional Materials) Public Sources (Newspapers, TV Commercials, Internet) [2] /consumer_review.html

The most important segment for any company as the consumers viewpoint is shortlisting a few motorcycles before making the final decision and places them in the Evoked/Choice set.

The motorcycle must make it to the evoked set/choice set before the customer makes a choice. Evoked Set consists of the shortlisted products that the consumer may compare and buy among them. If the bike doesnt make it to the Evoked Set, the game was over. So the first challenge of Suzuki Motorcycles India was to make it to the evoked set of the customer. Once the motorcycle enters into the evoked set, the customer will evaluate it amongst its competitors in various aspects and make a final choice as a purchase decision.

Challenges faced by Suzuki Motorcycles India to make it to the evoked set of the rural market customer:

Rising Customer Expectation: The growth witnessed by the Indian two wheeler industry has attracted a number of new entrants to the market expecting that Indian motorcycle industry will be more competitive in the future. The range of products in the past have increased customer expectation with respect to reliability, styling, performance and economy and this has put immense pressure on cost and margins of the players in the market.

Environmental and Safety Concerns: The increasing demand for two wheelers will need to be managed to address issues relating to overcrowding of roads. Another problem is the insufficient infrastructure in the rural areas and unregulated emission norms in these areas.

Creation of Distribution Infrastructure: Leading companies need to ensure that on one hand they build adequate infrastructure in terms of dealership network and after sales network in the rural areas.


CORPORATE INTEREST IN RURAL MARKET When rural customers discover the new and exciting choice of brands available from the urban markets, a demand for these brands is created in the rural areas. Marketers have entered the rural markets by extending the distribution of their existing offering or developing a separate marketing strategy for the rural markets. In many motorcycle categories of various companies the offerings are designed specifically keeping in mind the rural population of India and trying to extract the maximum potential out of these markets. REASONS FOR GROWTH There are quite a few reasons for growing interest in rural markets. A very straight forward reason is the growth of these markets. The growth in the motorcycle market is also because of the low penetration levels of the products in the rural market. A number of models exhibit a growth rate of more than 10 percent in the rural market. The vast untapped potential, increasing income and purchasing power, improved accessibility and the increasing completion in urban markets have made rural markets as an attractive destination and target for the markets of products like motorcycle. TARGETING THE UNTAPPED POTENTIAL Rural markets offer a great potential for marketing Suzuki Motorcycles for two reasons: 1. The large number of customers: A pointer to this is the large volume sales of certain products in rural markets as compared to the sales of the same product in the urban markets. 2. Largely untapped markets: The penetration levels of competitors are low in rural areas.

The estimated size of Indias rural market as stated with respect to the world population in 2010 was 12.4 percent. This means that 12.4 percent of the worlds consumers live in rural India. In numbers, this works out to about 120 million households. In India, a rural household forms about 72 percent of total households [3]. This means that there is an even larger market for Suzuki Motorcycles to target the 125 cc Product. The per capita expenditure is slightly less in the rural areas compared to that in the urban areas. Rural consumers own only 52 percent of products available, even though they form 72 percent of total households in India. Household ownership of two-wheeler in rural areas is 6.7 percent to 24.7 percent in the urban areas [4] MARKETING MIX Product: 1. Sling Shot: A 125cc Motorcycle with a tag line of Ride World Class. It focuses on smooth and comfortable ride, futuristic styling and superior mileage. It is available in 4 colors. It comes in various other specifications ranging from drum brakes to disc brakes and kick start to self-start. [5] 2. Access 125: A 125cc gear less scooter with a tag line of Access for All your Wishes. This product again focuses on Amazing Mileage, smart and stylishly built body for trendiness and attractiveness, wider seats for better ride comfort. [5] Place: The Products of Suzuki Motorcycles India Pvt. Ltd were majorly available in Tier1 & Tier 2 cities of India with a good service network but as of now the company plans to target the Tier3 cities and enhance its rural market share by targeting and pricing the products likewise. [3] Rural Marketing by Sumankalyan [4] [5]

Price: Price decisions are very important especially for the Motorcycles and Scooters in such a competitive market considering the target area as rural market of India. Suzukis Sling Shot is priced at Rs 45,911 (ex-showroom Delhi) and Suzukis Access 125 is priced at Rs 44,423 (ex-showroom Delhi). Promotion: The Promotion of the Products is done directly by advertisements. The recent advertisement of Suzukis Sling Shot Ride World Class was in accordance to the image of the brand Suzuki as economy, styling and power for an overall package and consumer satisfaction. Again the other product Access 125 is targeted on customers who want a hassle free ride and the advertisement was designed in accordance to that. The company aims Access125 as a unisex scooter for people who want an overall package in terms of mileage, comfort and power.

All Japanese two-wheeler makers are doing good business in India. Honda Motorcycles and Scooters India reported a 12.84% increase in August 2011 sales, while Yamaha Motor India registered 29.64% rise. Suzuki Motorcycle Indias sales are up by 39.12%. Suzuki Motorcycle India has sold 26,897 units against 19,334 units in the same month last year. We have received very good response from the market to all our products. The growing customer satisfaction among present owners of Suzuki products has led to a positive word-ofmouth in the market, SMIPL Vice-President (Sales and Marketing) Atul Gupta said in a statement [6].

[6] Co-Author: Mr. Atul Gupta, Vice-President, Sales & Marketing, SMIL

Marketing Management By Philip Kotler Marketing Management By Ramaswamy & Namakumari Marketing Management ICFAI University Publication [1] [2] /consumer_review.html [3] Rural Marketing by Sumankalyan [4] [5] [6] Co-Author: Mr. Atul Gupta, Vice-President, Sales & Marketing, SMIL