TWO-WHEELER AUTOMOBILE INDUSTRY IN INDIA

NMIMS FY PT-MBA Sec B

Submitted to : Mr. Souvik Dhar Submitted by :

Sharad Gupta B011 Kunal Khanna B014 Mihin Mehta B018 rateek Sharma B0!! "ahul Sharma B0!4 radnya Shinde B0!# $idhi %anna B0!8 Divya %oprani B0!& ra'ad $aik B04(

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The satisfaction and joy that accompanies the successful completion of a task is incomplete without mentioning the name of the person who extended his help and support in making it a success. We are greatly indebted to

Mr. Souvik Dhar,

for being a constant source of

knowledge, inspiration and help during this period of making project.

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Objective of the project ntroduction to ndian automobile industry !"# matrix representation of automobile sector among various sectors Overview of two$wheeler sector %leet composition of all vehicles Two$wheeler fleet composition in ndia &tructure of two$wheeler industry 'sage pattern of two$wheeler in ndia (ey players in two wheeler industry ntroduction ) *roduct mix +ero +onda ) !ajaj ,competitor . */s of marketing of +ero +onda 0arket segmentation, Targeting and *ositioning of +ero +onda. *orters five force model for +ero +onda &WOT analysis of +ero +onda ,(ari1ma &WOT analysis of !ajaj ,*ulsar "omparison of advertising strategy of +ero +onda and !ajaj %uture challenges ,*lans and &uggestions

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The main objectives of the *roject study are: 2etailed analysis of 3utomobile industry which is gearing towards international standards. To conduct market research with regard to two$wheeler automobile industry and understand its marketing strategies.

3naly1e the impact of 4ualitative factors on industry/s and company/s prospects "omparative analysis of major tough competitor. To understand the current trends in two$wheeler automobile industry.

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3utomobile is one of the largest industries in global market. !eing the leader in product and process technologies in the manufacturing sector, it has been recogni1ed as one of the drivers of economic growth. 2uring the last decade, well directed efforts have been made to provide a new look to the automobile policy for reali1ing the sector5s full potential for the economy. 3ggressive marketing by the auto finance companies have also played a significant role in boosting automobile demand, especially from the population in the middle income group. 3 6ations economy is well known from its transport system. %or instant and rapid growth in economy, a well$developed and well$networked transportation system is essential. 3s ndia5s transport network is developing at a fast pace, ndian 3utomobile ndustry is growing too. 3lso, the 3utomobile industry has strong backward and forward linkages and hence provides employment to a large section of the population. Thus the role of 3utomobile ndustry is very essential in ndian economy. 7arious types of vehicles are manufactured by the 3utomobile ndustry. ndian 3utomobile ndustry includes the manufacturing of trucks, buses, passenger cars, defence vehicles, two$wheelers. The two$wheeler manufacturing is dominated by companies like T7&, +onda 0otorcycle ) &cooter ndia ,*vt.- 8td., +ero +onda, 9amaha, !ajaj, etc. The automobile industry in the country is one of the key sectors of the economy in terms of the employment opportunities that it offers. The industry directly employs close to around :.;

million people and indirectly employs around <: million people. The prospects of the industry also has a bearing on the auto$component industry which is also a major sector in the ndian economy directly employing :.;= million people.

B*G Matri7 "epre'entation o8 )utomobile Se9tor amon: variou' Se9tor':4

n an economy, different industries are present and different industries have different growth rate as compared to the growth of the economy. n an economy, there are a number of major industries and they all occupy different positions in the !"# matrix according to their growth and contribution towards the economy. n the ndian economy, some of the major sectors are %0"#, automobiles, banking and insurance, steel, telecom, software, pharmacology and retail sectors and these can be placed in the different positions in the matrix as shown below:

INDUSTRY BCG MATRIX

Hig h M a r k e t G r o w t h

STA QUESTION RS MARKS

Banking Te"e#o$

Reta AUTOMOBIL i" ES So!twa re

DOG CASH S COWS

%M& G

Low Hig Re"ati'e $arket (hare Low

!"# matrix is used to determine the relative position of the companies of an industry or different &!'/s of any institution, in terms of the market growth rate and the market share of the company in the industry. n the ndian automobile sector, the major players are 0aruti &u1uki 8imited, #eneral motors, 0ahindra and 0ahindra, Tata 0otors, +ero +onda and !ajaj auto. n the !"# matrix, the companies are placed in one of the following four categories: &tar, "ash "ows, 2ogs and >uestion marks. n the &tars we place the companies with high market growth and high market share, cash cows are the companies who have low market growth rate and high relative market share, the category of the 4uestion marks include the companies with low relative market share and high market growth rate and dogs include the companies who have low relative market share and low market growth rate.

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%;o ,heeler 1ndu'try ndian two $wheeler contributes the largest volumes amongst all the segments in automobile industry. This segment can be broadly categori1ed into ? sub$segments vi1.@ scooters, motorcycles and mopeds. n the last four to five years, the two$wheeler market has witnessed

a marked shift towards motorcycles at the expense of scooters. n the rural areas, consumers have come to prefer sturdier bikes to withstand the bad road conditions. n the process the share of motorcycle segment has grown from .AB to =AB, the share of scooters declined drastically from ??B to ;=B, while that of mopeds declined by ;B from <CB to <DB during the year ;::A$:C. The Euro emission norms effective from 3pril ;::: led to the existing players in the two$ stroke segment to install catalytic converters. 3ll the new models are now being replaced by .$stroke motorcycles. Excise duty on motorcycles has been reduced from ?;B to ;.B, resulting in price reduction, which has aided in propelling the demand for motorcycles. Within the two$wheeler industry, motorcycle segment grew at a phenomenally high rate of ?=B as against a deceleration of ?B for scooters and ;DB for mopeds. n fact, motorcycle has been taking away the share of scooters and mopeds in a ..? million two$wheeler market and surging ahead with its market share of FAB. The increasing demand from semi$urban and rural segments may have caused this positive shift towards motorcycles. 3lso, easy credit coupled with low interest rate regime, constrained personal transport, increasing income levels in middle class and higher aspirations of young people all seem to be the factors responsible for such high growth in two$wheelers. The growth in two$wheelers has been robust enough to counter the slowdown and other factors constraining the overall business activity in the country. 3lso, rationali1ation of excise duty in the 'nion !udget ;::;$:? had a positive impact on the demand for motorcycles. We also expect the motorcycles to continue to lead the two$wheeler segment like in all other 3sian countries. 3vailable forecasts suggest that this trend would continue for another couple of years and the industry would record nearly double$digit average annual growth up to ;::F. 2uring the year, there have been important developments in two$wheeler industry. The competition has strengthened though there are hardly any new entrants into the industry. There is an increasing emphasis on price and this has led to cost cutting efforts all across the industry, thereby, making the customer an ultimate beneficiary. The trend also saw introduction of new motorcycles with capacity ranging from <:: to <A:cc bikes. We anticipate that many more new models will be launched during the year and provide customers plenty of choice at competitive prices.

!usinesses cannot consistently grow at ;=$?: per cent. Each business has a tendency to taper and plateau after attaining a particular si1e. 3n annual growth rate of <:$<; per cent over a period of time is extremely healthy. The T"& study rankings are conducted at the motorcycle segment$level to provide comparisons among similar groups of motorcycles. 0otorcycles ranking highest in their respective segments for T"& are: +ero +onda "2<:: && ,be't 'tandard motor9y9le 'e:ment<= +ero +onda &plendor >be't e7e9utive motor9y9le 'e:ment<= !ajaj *ulsar ,best premium motorcycle segment-@ and Goyal Enfield !ullet Electra >be't 9rui'er motor9y9le 'e:ment<. The feeling of freedom and being one with the 6ature comes only from riding a two wheeler. ndians prefer the two wheelers because of their small manageable si1e, low maintenance, and pricing and easy loan repayments. ndian streets are full of people of all age groups riding a two wheeler. 0otori1ed two wheelers are seen as a symbol of status by the populace. Two wheelers in ndia are the second largest producer and manufacturer of two$wheelers in the world. t stands next only to Hapan and "hina in terms of the number of two$wheelers produced and domestic sales respectively. ndian two$wheeler industry has got spectacular growth in the last few years. ndian two$wheeler industry had a small beginning in the early =:5s. The 3utomobile *roducts of ndia ,3* - started manufacturing scooters in the country. !ikes are a major segment of ndian two wheeler industry, the other two being scooters and mopeds. ndian companies are among the largest two$wheeler manufacturers in the world. n the initial stages, the scooter segment was dominated by 3* @ it was later overtaken by !ajaj 3uto. 3lthough various government and private enterprises entered the fray for scooters, the only new player that has lasted till today is 808. The motorcycle segment was initially dominated by Enfield ?=:cc bikes and Escorts <D=cc bike. The two$wheeler market was opened to foreign competition in the mid$A:s. 3nd the then market leaders $ Escorts and Enfield $ were caught unaware by the onslaught of the <::cc bikes of the four ndo$Hapanese joint ventures. With the availability of fuel efficient low power bikes, demand swelled, resulting in +ero +onda $ then the only producer of four stroke bikes ,<::cc category-, gaining a top slot. The first Hapanese motorcycles were introduced in the early eighties. T7& &u1uki and +ero +onda brought in the first two$stroke and four$stroke engine motorcycles respectively. These two players initially started with assembly of "(2 kits, and later on progressed to

indigenous manufacturing. n the C:s the major growth for motorcycle segment was brought in by Hapanese motorcycles, which grew at a rate of nearly ;=B "3#G in the last five years. The industry had a smooth ride in the =:s, F:s and D:s when the #overnment prohibited new entries and strictly controlled capacity expansion. The industry saw a sudden growth in the A:s. The industry witnessed a steady growth of <.B leading to a peak volume of <.Cmn vehicles in <CC:. n <CC:, the entire automobile industry saw a drastic fall in demand. This resulted in a decline of <=B in <CC< and AB in <CC;, resulting in a production loss of :..mn vehicles. !arring +ero +onda, all the major producers suffered from recession in %9C? and %9C.. +ero +onda showed a marginal decline in <CC;. The reasons for recession in the sector were the incessant rise in fuel prices, high input costs and reduced purchasing power due to significant rise in general price level and credit crunch in consumer financing. %actors like increased production in <CC;, due to new entrants coupled with the recession in the industry resulted in company either reporting losses or a fall in profits.

%;o ;heeler 8leet 9ompo'ition in 1ndia:4

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Mopeds:Over the last <= years, moped/s contribution in overall ;$wheelers has declined significantly and now it remains a marginal category with just one manufacturer for the product. ts contribution in the ;$wheelers industry now stands at =B and we expect that this segment will continue to be marginalised. The only player in this segment is T7& 0otor.

Scooters:3dvent of fuel efficient motorcycles in the ndian ;$wheelers industry led to decline of &cooters. +owever, over the last five years, it has made a recovery and is emerging as a niche segment targeted towards women commuters. One of the reasons for this is the increasing need of mobility for the women commuters especially in the urban areas is due to higher

number of college going girls and greater participation of women in urban work force. The product itself has gone for a complete revamp and now this category mainly consists of gearless products. This segment is now dominated by Hapanese manufacturers with +0& having the leadership. ++, which is a late entrant in this segment, has also cornered a si1eable market share in the scooter segment. 3nother development in this segment is the launch of battery operated scooters. +owever, given the high replacement cost for the batteries, this has remained a marginal segment.

Motor cycles and bikes:-

Executive Segment
Executive segment is the largest motorcycle segment and this is the stronghold of market leader ++. "ompetitors have tried to challenge ++ in this segment, however all such challenges have fi11led out over time. With higher growth in economy segment, the contribution of this segment had come below =:B in %9:F. +owever over the last three years, it has made a strong come back and now accounts for almost F:B of the motorcycle share.

Premium Segment
This segment was creation of ++ with 5"!I5 3nd J(3G I03/@ however major boost to the segment was given by !3H3H through 5*ulsar5 which has dominated the segment. ++ has remained a marginal player in this segment and one of the reasons for this is presence of +0& in this segment. This segment remains a small segment in the ndian market with contribution of around ;?B to the motorcycle industry. This is the performance segment and customers pay a premium for the novelty. +ence constant upgradation in the product is a re4uisite for success in this segment.

5'a:e attern o8 t;o4;heeler' in 1ndia

s 4uite different from other countries nitial cost and fuel economy are highest priority. 8ow maintenance costs are desired. &mall entrepreneurs and farmers conduct their business carrying loads. 7ery limited usage for sports bike. ndians prefer the two wheelers because of their small manageable si1e, low maintenance, and pricing and easy loan repayments.

Key player' in the %;o4;heeler indu'try:

+ero +onda motors ltd. !ajaj auto ltd. T7& motors company ltd. 9amaha motors ndia +onda motorcycle and scooters ndia

Motorcycles in India: !ikes comprise a major segment of ndian two wheeler industry.

Companies :

Hero Honda Motors Ltd (HHML )

+ero +onda 0otors 8imited was established in <CA., as a joint venture between ndia5s +ero #roup ,world5s largest bicycle manufacturers- and Hapan5s +onda 0otor "ompany. 3nd created the world5s single largest two wheeler company and also one of the most successful joint ventures worldwide. 2uring the A:s, +ero +onda became the first company in ndia. Over <C million +ero +onda two wheelers running on ndian roads today.

K +ero +onda "2 2awn K +ero +onda "2 2eluxe K +ero +onda #lamour K +ero +onda #lamour$%i K +ero +onda (ari1ma K +ero +onda *assion *lus K +ero +onda *leasure K +ero +onda &uper &plendor K +ero +onda &plendor 6L# K +ero +onda "!I L$Treme

Bajaj Auto Ltd Company :

!ajaj is the first ndian two wheeler automobile company in the market since <C.= with the name 0Ms !acharj trading corporation private limited. n <C=C 0Ms !acharj trading corporation private limited change its name as !ajaj 3uto 8td. !ajaj 3uto obtains license from the #overnment of ndia to manufacture two$ and three$wheelers vehicles in <C=C.

K !ajaj 3venger K !ajaj "T <::

K !ajaj *latina K !ajaj 2iscover 2T&i K !ajaj *ulsar 2T&i K !ajaj Wave K !ajaj Wind <;= K &onic 2T&i

TVS Motor Company :

T7& 0otors is the third largest company in the two$wheeler industry with a market share of <FB. nfect, it is the only ndian company without a foreign collaboration in the two$wheeler industry. When the company opted out of the collaboration with &u1uki in ;::;, many believed that T7& was headed towards extinction. !ut the company proved the doomsayers wrong and came out with a very successful NT7& 7ictor5. T7& 0otors 8td. originally incorporated in <CA; to manufacture two$wheelers in collaboration with &u1uki 0otors of Hapan, T7& was one of the leaders in two$wheeler industry.

K T7& 3pache K T7& "entra K T7& %iero K T7& &tar K T7& 7ictor

Yamaha Motor India:

9amaha 0otor "orporation is the auto mobile company of Hapan ,<C=?- which works in ndia since <C== and providing latest technology in ndia from last two decades. 9amaha 0otor ndia was incorporated in august ;::< as a <::B subsidiary of 9amaha motor corporation, Hapan

K 9amaha "rux& K 9amaha #= K 9amaha #ladiator K 9amaha %I <F K 9amaha G<= K 9amaha %a1er

Honda motor:

+onda motors of Hapan is not a new name in the two wheeler scenario in the country, they were in a tie up with the %irodias owned (inetic group. +owever in the late C:s they parted ways after problems arose over issues like introduction of new models, advertising expenditure, marketing strategies and other related issues. n the mid A: +onda motors of Hapan joined hands with the largest bicycle maker of ndia the +ero cycles to create +ero +onda which in a couple of decades or so have gone on to become the single largest motorcycle company in the world. Though +onda has come on its own on the ndian market yet it will be providing technological support to +ero +onda for the next ten years. Thus presenting a uni4ue situation in which the company will be in direct competition with the company which it has been associated for nearly two decades. +onda 0otorcycles and &cooters ndia limited, a <::B subsidiary of +onda motor company Hapan eventually entered the ndian market with +onda 'nicorn in ;::..

K +onda 'nicorn K +onda activa

Market share of two wheeler automobile sector

+ero +onda

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,a-a- Motors ./S Motors 0amaha Motors +onda Motors 1thers

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$o; 8urther the marketin: 'trate:ie' o8 3."+ 3+$D) and it' 9ompetitor B)0)0 ;ill be analy?ed.

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The "ompany was ncorporated on <Cth Hanuary,<CA. venture.

at 6ew 2elhi as a joint

 Today +ero +onda is the largest two$wheeler manufacturer in the world producing more than ? million units of two$wheeler per year. The company5s most popular model is the +ero +onda &plendour, which is the world5s largest$selling motorcycle. Over <C million +ero +onda two wheelers are on ndian roads today. +ero +onda "2$<:: is the first four stroke motorcycle to be introduced in ndia in <::cc range. 2uring the fiscal year ;::A$:C, the company has sold ?.;A million bikes.

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S&OOTER

BI)E *++&&

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.LEASURE

&D *++ S.LENDOR S.LENDOR/ .ASSION .ASSION/

AMBITION GLAMOR

&B0 &B0 1TREME

)ARI0MA

B)0)0 >*+M .%1%+"<

Established in <C.=.

 &tarted production of scooters in <CF< and became first two wheeler manufacturing company of ndia. !ajaj 3uto, is ranked as the world5s fourth largest two and three$ wheeler manufacturer. !ajaj 3uto is ndia/s largest exporter of two wheelers. 2uring ;::A$:C, the company exported DD;,=<C two and three$wheelers recording a growth of ;= percent over ;::D$:A. Exports now constitute ?D per cent in volume terms and ?= per cent 6 value of net sales.

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100CC

125CC

135CC

*-+&&

*2+&&

200CC

220CC

BA3A3 &T *++4 BA3A3 .LTINIA4 BA3A3 WA5E

DIS&O5E R4 BA3A3 WIND4 BA3A3 1&D

.ULSAR*6-

.ULSAR*-+

.ULSAR*2+4 A5ENGER

.ULSAR,++

.ULSAR,,+

4 A' +/ M)"K.%1$G +/ 3."+ 3+$D) :4

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+ero +onda, which has a technology tie$up with Hapan5s +onda 0otors, was currently discussing the feasibility of manufacturing scooters for the ndian market, 0r. 0unjal said. +owever, the company has a binding clause with +onda5s scooter manufacturing ndian subsidiary, preventing it from making scooters till ;::.. +ero +onda 0otors, ndia5s largest motorcycle company, has launched the premium segment ;;?cc motorcycle (ari1ma priced at Gs DC,::: ,ex$showroom, 2elhi-. 0any of the products which the company has started with have been phased off. 6ow the existing products are (ari1ma, 3mbition, "!I, &plendor, &plendorO, *assion, *assion *lus, "2 <:: &&, "2 <:: and "2 2awn. The T"& study examines customer evaluations at three distinct ownership periods: < to F months, D to <A months, and ;= to ?F months. This helps in understanding the differences in satisfaction during initial ownership, in$warranty and post$warranty ownership periods. &atisfaction ratings decline as the length of vehicle ownership increases. +owever, +ero +onda &plendor is among the few models to maintain consistency across the three ownership periods.

"1*1$G *ricing is a important component of marketing mix of the firm. 2etermining the prices of different products of a firm is very difficult task of the marketing manager. *rice denotes money value of a product. f represent the amount of money for which a product can be exchange. n other words, prices represents the money which the buyer pays to the seller for a product price represent the exchange value of goods and services in terms of money. *rice is all around. *rice factor has very well been touched by the manufacturers. The pricing strategy of the company is very set. They price their product according to the cost of production and also by keeping an eye on the price of the competitors of that segment and demand of the product in the market. 3 pricing strategy that ensured an average manufacturer margin that game dealer an ade4uate return and created a reputation with consumers like Pa company selling a good 4uality

product at a reasonable price. ndustry focus themselves the low cost producer with good 4uality and aimed to maintain the price advantage in every market of two wheelers. 3ero 3onda group ensures an easily affordable pricing through excellent transportation to common man. t fixes customer centric pricing that provide customer total satisfaction. +ero +onda/s pricing objectives are: 8ist price, 2iscount, %inancing schemes, "redit terms, and 0aximi1e profits +ero +onda group ensures an easily affordable pricing through excellent transportation to common man. t fixes 9u'tomer 9entri9 pri9in: that provides the customer with total satisfaction.

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3s a company, dealers play a major role in serving customers, while growing and sustaining markets. +ero +onda has a network of more than ?=:: strong and dedicated 3uthori1ed dealers. 3 network that has helped +ero +onda/s name and its promise of reliable 4uality to every part of the country. The power of this highly efficient and motivated network goes a long way to create goodwill for +ero +onda brand among countless consumers besides creating availability and after sales services. The channel of distribution is a direct dealer network. 3 direct dealer is a dealer who is authori1ed to purchase the product directly from the company and sell.

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+ero +onda has more than ?=:: showrooms in ndia. &ome of the 3uthori1ed dealers of +ero +onda (ari1ma, in and around !ombay, are:

Q 0ax 0otors ,!ombayQ %. *. 0otors ,!ombayQ 3xis 0otors ,ThaneQ Ganjeet 0otors ,ThaneQ 3hir 0otors ,(alyanQ &pectra 0otors ,6ew !ombayQ +. 0. 0otors ,*anvel-

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Promotional tools <. )D2."%1S1$G: t is defined as a paid non$personal communication with a target ,usually mass- market. t is cost effective and can reach a large number of people. t can also be used for long term or short term objectives.

There are various forms or mediums through which can advertise. ). Broad9a't Media:

Television

Gadio "inema

B.

rint media:

6ewspapers 0aga1ines 8eaflets

*. +utdoor media:

*osters and billboards.

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5B-1* ".-)%1+$S )$ 5B-1*1%6:

*ublic relations are an umbrella term and refer to the totality of the organi1ation/s behavior with respect to the society in which it operates. The maybe regarded as good or bad and is reflected in the company/s reputation and image.

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&ponsorship can be seen as a part of public relations and it is certainly the case that some sponsorship goes on to generate positive publicity for the organi1ation. The company has not left any stone untamed in sponsoring the major events both globally and domestically. The biggest of all is the sponsorship of the PWOG82 "'*R for which +ero +onda has the credit of being the only two$wheeler company in the world to do so. Gecently they are sponsoring the +ockey World cup. !esides this, the company has also sponsored events like P0aster #olfR, television academy awards, etc, Thus the company has gained a lot of reputation by doing so.

4. D1S*+5$%SB+//."S: The company has started giving discounts and other offers to the customers on the purchase of a new bike, for instance, with the World "up offer, in which the consumer was to get a < gm gold coin with every purchase. !ut after all these schemes and benefits may be because of cut$throat competition in the segment with heavyweight competition such as !ajaj, kinetic, 9amaha, and T7& the company ,+EGO +O623- officially says: POur aim is to proactively and consistently deliver value to the customer. We are giving back to the customer after becoming successful. 0ost companies give discounts only when their products are not doing well in the market. There is lost of competition in the segment, especially from !ajaj. !ut the reason for +ero +onda/s success it that we are consumer$ focused while other companies such as !ajaj tends to be more competitor$focused.

#. %e't ride and "oad 'ho;

"+M+%1+$ +-1*6:

 "ompany gives advertisement in different media vehicles time to time. 8ike in T7. 0aga1ines, newspaper, etc. +ero +onda also organi1es free service camps every year. +ero +onda also takes art in trade fair. +ero +onda with the help of " " !ank provides loan to the customers ) also provide easy monthly installment scheme to customers. +ero +onda gives huge commission to their dealers.

3dvertisement, local events sponsorship and promotions and inviting a prominent personality for the inaugural or first like delivery function would contribute effectively in generating a wider local interest and attention. +ero +onda/s latest 2(2 S; commercial its two brand starring its 3mbassador and ndia/s heart throbs, +ritik Goshan and &ourav #anguly, truly reflects the multi fact roles that today/s new generation plays. The commercial reflecting the charisma and vibrancy of these two stars, takes 2esh (i 2hadkan to da11ling new heights. t is young, colorful and vibrant and represents the icons of contemporary times. 3nd it will go a long way in strengthening the leadership status of the product by the mile. The new commercial is powerful film repeat with an impressive storyline. The effort to pack the story, drama and impact in just F: seconds was phenomenal challenge itself. The idea was born itself. The idea was born out of the very essence of P+ero and &tarsR. (eeping in mind would cause on the drama and impact it would cause on the audience. t is a commercial packed with action where today/s heart throbs, +ritik and saurav, are seen tackling new roles. The story being in a field adjoining a hill with two cool men, +ritik and &ourav on +ero +onda bikes and *assion respectively. !oth &ameer and 3ditya win lifetime opportunity act with +ritik and &ourav, the two star heartthrobs of millions in ndia and all four will be seen in action in the new commercial 2(2$;.

These are some of the &logan for every product ,!ike- and these are following:$

*D4100 *D100SS Splendor Street Smart a''ion *BE

: : : : : :

/ill itC 'hut itC /or:et it. %ou:h and "u::ed. De'i:ned to .79el. -i9en'e to enDoy. ,hen 'tyle matter'C Bike born in 'tudio not in 8a9tory. Motor9y9lin: 5nplu::ed.

M)"K.% S.GM.$%)%1+$ +/ 3."+ 3+$D)

 2emographic Segmentation

Income: HERO HONDA products are offered to the public taki ! i to co sideratio all the i co"e !roups i the societ#. 3ge: $he "ai se!"e ted !roup for the "otorc#cle are 1% #ears a d abo&e. 1ccupation: All ki ds of people are take professio als( )o&t. 'er&a ts( etc. i to accou t. 'tude ts(

4eographic Segmentation: $he pote tial custo"ers are basicall# fro" e&er# re!io s of * dia.

Psychographic segmentation :

+eople purchasi ! bikes are &er#

eco o"ical( ,ualit#( bra d co scious a d lo#alit#.

,ehavioral segmentation: user status( be efit -ise.

$his se!"e tatio

is do e co sideri !

.354E.I64 362 P1SI.I16I64 17 +E51 +1623

.354E.I64

The proposed targeting people in the age group of <A years and above with a average monthly income of approximately Gs. <:,::: and above, who are brand loyal and who are either students or retired individuals or may be employed as professionals, government servants or having their own business, but mostly male i.e on the different stratas of the population.

P1SI.I16I64

The image that +ero +onda creates in the mind of the customers is the faith. The add shown by it says P2esh ki 2hadkanR. That means it/s a member of the ndian family. t represents the ndian culture and society. The objectives can be achieved through the implementation of suitable marketing strategy by the organisation. t is the marketing logic that is formulated keeping in mind the needs of the consumers and also strategies of the competitors.

orter' 8ive 8or9e model 8or 3ero 3onda:4

Bar:ainin: o;er o8 'upplier': &uppliers of auto components are fragmented and are extremely critical for this industry since most of the component work is outsourced. *roper supply chain management is a costly yet critical need. Bar:ainin: o;er o8 Buyer: !uyers in automobile market have more choice to choose from and the increasing competition is driving the bargaining power of customers uphill. With more models to choose from in almost all categories, the market forces have empowered the buyers to a large extent.

*ompetitive rivalry: The industry rivalry is extremely high with any product being matched in a few months by competitor. This instinct of the industry is primarily driven by the technical capabilities ac4uired over years of gestation under the technical collaboration with international players.

%hreat o8 'ub'titute rodu9t': There is no perfect substitute to this industry. 3lso, if there is any substitute to a two$ wheeler, !ajaj has presence in it. "ars, which again are a mode of transport, do never directly compete or come in consideration while selecting a two$wheeler, cycles do never even compete with the low entry level moped for even this choice comes at a comparatively higher economic potential. %hreat o8 ne; entrant' +ere the threat of new depends on the economies of scale of the cost of production , and customer switching costs, access to industry distribution channels.

S.

.!.T. A"ALYSIS !# H$%! H!"&A ('A%I(MA):)

ST%$"*TH: 7 It ha( a good speed and sport Segment. 7 (o a! C$stomer 'ase: In the 9a(t !o:r ;ear(4 )ari8$a ha( <een (:##e((!:" in <:i"=ing :9 a goo= an= "o;a" <a(e a$ong it( #:(to$er(. 7 A)ter Sa!es Ser*i%e: Ti"" to=a;4 #:(to$er( are (ati(!ie= with the a!ter (a"e( (er'i#e 9ro'i=e= <; Hero Hon=a !or thi( 9arti#:"ar 9ro=:#t. 7 Re)inement+ %om)ort+ great &and!ing an= that $:#h-(o:ght-a!ter <ig <ike !ee" are a"" a'ai"a<"e on the )ari8$a. , 'rand Re%a!!: the na$e )ari8$a it(e"! i( a $eta9hor to it( (:##e((. The <ran= )ari8$a ha( gi'en a goo= 9"at!or$ to thi( 9ro=:#t in the S9ort( Bike Seg$ent. !oo"

7 )ari8$a i( the %ir(t #i"e in India !a$n%&ed $nder Sports 'i"e

$A'"$SS: 7 Hig& Maintenan%e: The $aintenan#e o! )ari8$a i( high a( #o$9are= to it( <igge(t #o$9etitor Ba>a> .:"(ar ,++## an= ,,+##. , -$e! E))i%ien% : The 9:"(ar ,++## o!!er( an i$9re((i'e $i"eage o! 62.6k9" in #it; an= ?,.?k9" in highwa; again(t the )ari8$a o!!er( on"; 6+k9" in #it; an= a =e#ent !ig:re o! ?-k9" in highwa;. 7 (ess .romotion: the 9ro$otion( an= a=( o! )ari8$a are 'er; "e(( a( #o$9are= to it( #o$9etitor(.

!++!%T,"ITI$S: 7 I! Hero Hon=a #o$e( :9 with the i=ea o! %&anging some )eat$res o!

)ari8$a4 "ike (e"! #an#e""ing in=i#ator(4 (o!t to:#h han="e <ar an= =igita" (9ee=o$eter4 it wi"" he"9 the$ to <oo(t :9 the (a"e( o! )ari8$a. 7 I! the; are a#!e to impro*ise t&e )$e! e))i%ien% <e a go"=en o99ort:nit; to take o'er the $arket. TH%$ATS: o) Kari/ma4 it wi""

7 The $a>or threat !a#e= <; Hero Hon=a )ari8$a i( !ro$ 'a0a0 .$!sar4 who ha( a"wa;( <een the mar"et !eader in t&e 123 p!$s segment with @+A $arket (hare. 7 )ari8$aB( (trong #o$9etitor( Ba>a> an= T5S4 in *-+ ## 9":( (eg$ent4 a"rea=; 9o((e( #ertain )eat$res !i"e se!)4%ontro!!ing indi%ators+ so)t to$%& &and!e #ar 5&i%& Kari/ma !a%"s6 7 The #o$9etitor .:"(ar ,++## ha( a"rea=; #o$e :9 with oi! %oo!ed engine whi#h =e"i'er( $aCi$:$ 9ower. Thi( i( again a $a>or threat to )ari8$a.

S. ../00) ST%$"*THS:

.!.T. A"ALYSIS !# BA-A- (+,LSA%

7 .:"(ar ,,+## !eat:re( India7s -irst Oi! Coo!ed Engine whi#h =e"i'er( $aCi$:$ 9ower $aking it $o(t 9ower!:" engine o!!ere= <; Ba>a>. 7 New .:"(ar a"(o 9ro'i=e( Digita! Speedometer+ Se!) Can%e!ing Indi%ators whi#h i( !or the %ir(t ti$e in thi( (eg$ent in In=ia. 7 -$e! e))i%ien% D .:"(ar ,,+## =e"i'er( an i$9re((i'e $i"eage o! 62.,

k$9" in #it; a( #o$9are= to )ari8$a whi#h =e"i'er( 6+ k$9" in #it;. , C$stomer 'aseD In 9a(t =e#a=e Ba>a> ha( e(ta<"i(he= a (trong <a(e a$ong(t it( #:(to$er(.

$A'"$SS:
7 St !e and Design: .ULSAR ,++## an= ,,+## =eri'e( their (t;"ing !ro$ there 9re'io:( 'er(ion .:"(ar *-+ Dt(-i an= *2+ Dt(-i. 7 .ri%ing8 Ba>a> ,,+## ER( 2,??F <a(i# 9ri#eG i( #o(t"ier than kari8$aER( H2+++ <a(i# 9ri#eG

!++!%T,"ITI$S:
7 I! the; =eri'e new st !ing+ s&ape+ design !or 9:"(ar ,++## an= ,,+## then the; #an attra#t $ore #:(to$er(. 7 Taking into #on(i=eration the re'iew( o! the #:(to$er( regar=ing the I!airingJ o! ,,+## an= $aking the need)$! %&anges wi"" <e an o99ort:nit; to #a9t:re an e'en "arger (hare o! the ,++##/ (eg$ent

TH%$ATS:
7 The <igge(t threat i( !a#e= !ro$ the good5i!! o) Kari/ma in thi( (eg$ent who i( the I%o:r-Stroke Two Whee"er R:"erJ o! the In=ian <ike $arket. 7 &ertain te%&ni%a! )a$!ts in t&e #i"e design whi#h are 9otentia""; dangero$s to the rider7s sa)et #an <e =i(a(tro:( to the i$age o! the <ike.

*+M )"1S1+$ +/ )D2."%1S1$G S%")%.6 +/ 3."+ 3+$D) )$D B)0)0

32/E5.ISI64 S.53.E40 17 +E51 +1623:"urrently the number one company in terms of sales and has been dominant in the two$ wheeler segment since the past decade. &ince the inception of hero +onda, the company has been using television as a major role for its publicity. Though hero +onda was dominant in sales it lacked the skills of creating a spectacular ad till now. Though it had a vast range of mobiles, its advertising strategy was not up to the mark. %or its publicity hero +onda has been using many famous celebrities like &aurav #anguly, the captain of ndian cricket team, +ritik Goshan and other famous personalities as their brand ambassadors. Thus, hero +onda has been spending huge amounts on its publicity. The biggest of all is the sponsorship of the PWOG82 "'*R for which +ero +onda has the credit of being the only two$wheeler company in the world to do so. *resently they have tried to gain publicity by sponsoring the hockey world cup event which is the national game of ndia. There by creating a sense oneness and 6ationalism through providing publicity and encouragement to the game by various ad/s.

)D2."%1S1$G S%")%.G6 +/ B)0)0:4 !ajaj is always known for its outstanding ads over the period of time. &ince its inception, !ajaj has come out with variety of ads and were always successful in their advertisements. &cooters were well known by the brand name of !ajaj. !e it any scooter, one used to recogni1e it by the brand name !ajaj. This was the identity a decade ago which the

!ajaj has still maintained. !ajaj is always known for its ads without well$known brand ambassadors which is again a plus point to its cart as it saves a huge cost in terms of brand ambassadors unlike +ero +onda and T7&. *rior, !ajaj used to convey the feeling of J ndianness/ in its ads. With a punch line J+amara !ajaj/ !ajaj drove into everybody/s hearts and the title song of J6aye !harat (i 6aye Tasveer/ added a great value to its mobikes and scooters. 3 couple of years back, !ajaj had introduced an advertisement which promoted all the different ranges it had, wherein they had shown each product they had with a feeling of ndianness. .7ample: Eliminator passes$by a rangoli and drives slowly sideways without disturbing it. *eople on boxer pass$by a temple and bend their head to give a little offering. &uch ads had revealing ndian culture had a great effect on ndians and !ajaj was successful in most of its ads. !ut recently, !ajaj had changed its brand logo along with its punch line i.e. J+amara !ajaj/ got converted to J nspiring "onfidence/. The reason for this change as told by the company officials was to keep pace with the new technologies in the fast moving world. Even though it had changed its punch line, it didn/t have much effect on its brand image.

3 year back, !ajaj introduced 2T&i technology upgrading its always successful *'8&3G <=:cc and <A:cc. Though !ajaj had changed its identity it still dominates for its creativity in ads.

/uture *hallen:e' and lan':4

Q Q Q Q Q S:(taining the growth rate. Nee= !or inno'ation K "ow #o(tL h;<ri= 'ehi#"e(. U9gra=ing In=ian two-whee"er 9ro=:#t(. Taking the 9ro=:#t( to the g"o<a" $arket. &a9t:ring In=ian a( we"" a( g"o<a" $arket.

Su::e'tion':4
Q Q Q Q Q En#o:rage eC9ort(. .ro'i=e 'ario:( two-whee"er !inan#ing (#he$e( a$ong $an:!a#t:rer(. O9en R D #enter(. .re((:ri8e go'ern$ent to re=:#e taCe( an= =:tie(. &o""a<orate with g"o<a" 9"a;er(.

*on9lu'ion :4
The o:t"ook !or In=iaB( a:to$oti'e (e#tor i( high"; 9ro$i(ing. In 'iew o! #:rrent growth tren=( an= 9ro(9e#t o! #ontin:o:( e#ono$i# growth o! o'er @ 9er #ent4 a"" (eg$ent( o! the a:to in=:(tr; are "ike"; to (ee #ontin:e= growth. Large in!ra(tr:#t:re =e'e"o9$ent 9ro>e#t( :n=erwa; in In=ia #o$<ine= with !a'o:ra<"e go'ern$ent 9o"i#ie( wi"" a"(o =ri'e a:to$oti'e growth in the neCt !ew ;ear(.