A PROJECT ON Hero Motocorp

Submitted to
T.GHOSAL

Submitted by :Abhishek kumar

CUJ/I/2012/MBA/O3
VI SEMESTER

PROJECT OBJECTIVE

To know:1. About the motorcycle industry

2. Market analysis
3. Key growth drivers
4. Segmentation
5. Positioning
6. Strategic Branding
7. Product Market Analysis
8. Marketing strategy (w.r.t. the elements of the Marketing Mix)

ABOUT THE MOTORCYCLE INDUSTRY

India is the largest producer of two wheelers in the world. Two wheeler consist
of three segments:
Motorcycle
Moped
Scooter
The two wheeler segment growth rate is 12.9% and sales is nearly 13.5 million
units in October 2014. The industry is expected to grow by 9% to reach 23
million units by 2016-17.
Market share in different categories:-

MARKET SHARE
Motorcycle

Scooter

moped

7%

28%

65%

DIFFERENT MOTORCYCLE COMPANY

Hero Motorcorp
Bajaj
Honda
TVS
Yamaha

BRIEF PROFILE OF HERO MOTOCORP LTD

Hero MotoCorp Ltd. formerly Hero Honda is an Indian motorcycle and scooter
manufacturer based in New Delhi, India. Hero Honda started in 1984 as a joint venture
between Hero Cycles of India and Honda of Japan. The company is the largest two
wheeler manufacturer in India. In 2010, When Honda decided to move out of the joint
venture, Hero Group bought the shares held by Honda. Subsequently, in August 2011
the company was renamed Hero MotoCorp with a new corporate identity. Product range
of Hero MotoCorp are:

DIFFERENT MODELS OF HERO MOTOCORP ARE:

HF down
HF deluxe
HF deluxe ECO
splendor plus
splendor pro CLASSIC
splendor Ismart
passion pro TR
splendor NXG
Super splendor
splendor pro
passion pro
passion Xpro
Achiever
Glamour
Glamour PROGRAMMED FI
Xtreme
Xtreme SPORTS
Impulse
Hunk
ignitor
karizma
karizma ZMR

MARKET ANALYSIS
COMPETITION ANALYSIS: -Hero motorcycle is leading with 52 percent market
share, whereas Bajaj auto share is 20.2%. Honda market share is 15.6% and others
have 12.2% market share.

MARKET SHARE OF MOTORCYCLES

heromotocorp

bajaj

honda

others

12.2%
15.6%
52%
20.2%

SWOT ANALYSIS: - It includes

1. internal factors the strengths and weaknesses internal to the organization
2. external factors the opportunities and threats presented by the environment
external to the organization

SWOT Analysis
1. Huge brand equity and one of the biggest players in the two wheelers Indian
market
2. Excellent R&D, and wide variety of products in every segment
3. Excellent distribution, over 6000 dealerships and service centers
4. Good advertising and excellent rebranding from Hero Honda to Hero Moto
Corp
Strength

5. Newly Electronic Fuel Injection System(EFI System)

1. Absence in the cruiser bike segment
2.High imports for its spare parts i.e. over 30% imports

Weakness

Opportunity

Threats

3. Joint venture of hero and Honda has been broken.

1.Two-wheeler segment is one of the most growing industries
2.Export of bikes is limited i.e. untapped international markets
1. Strong competition from Indian as well as international brands
2. Honda can be a big threat for hero
3. Better public transport will affect two-wheeler sales

KEY GROWTH DRIVER

Multiple factor has contributed to the growth in demand of two wheeler. The growth
is primarily because of the following factors.
Economic development: The Indian economy recorded an impressive growth of
6.9%in the fiscal year 2013-14, and also sharp decline in international crude-oil price.
An overall economy prospers, there is, naturally more demand for personal
transportation vehicle. This has resulted in increased demand for motorcycle that are
now most popular and affordable means of personal transportation.
Improving infrastructure: The national highway programs by union government to
create a better infrastructure to transfer the economy in a significant manner. This
factor has boosted the sale of motorcycle due to better road condition.
Increasing urbanization and inadequate public transportation system, especially in
the semi urban areas, create a greater need for personal vehicle.
Changing demographic profile: In India large number of younger age people are
now living. Also size of middle class population is also increasing. These trend are
leading to increased demand for two wheeler vehicles.
Growth in rural market: successive good monsoons has increased the purchasing
power of rural market. The rural consumer are today more keen to poses a two
wheeler instead of an ordinary bicycle. Moreover, some of the two wheeler companies
have taken special initiatives total the growing economic power of the rural market in
India.
Other favourable condition: factors like expansion in city and higher mobility of the
Indian population, increased availability of more fuel efficient and low maintenance
cost models motorcycle contributed to steady growth in demand for two wheelers.

Market Segmentation

Hero MotoCorp caters to a wide consumer base. It has segmented its market based on
income and age. It caters to youth of all income groups. Its highest selling bike Splendor
is a favorite in sub urban and rural India. It portray itself as the most efficient bike range
to cater to Indian Roads.
The present hero motocorp market in India can be classified into for broad
segment on the basis of price.
Segment

Price

Brand

Standard

Rs 35000 to 45000

HF down, HF deluxe, splendor plus

splendor NXG

Executive

Rs 45000 to 60000

Super splendor, splendor pro,

passion pro, achiever, glamour,
splendor Ismart

premium

Rs 60000 to 75000

Xtreme, impulse, hunk, glamour

PGM, ignitor

Super premium

Rs 75000 to 100000

karizma

Standard segment: standard segment is known as entry level motorcycle which

contain range from Rs 35000 to 45000.
The typical profile of the consumer belonging
to this segment is a single newly employed working professional or newly married
people who use the bike to commute small distance. This class of vehicles or segment
is most popular in the semi urban and rural area. The common consumers expectation
are that of affordability, reliability and low maintenance costs.
Executive segment: these bike are priced in the range of Rs 45000 to 60000.
All these brand of motorcycle are characterized by
style, performance, fuel efficiency and affordability. The typical consumer profile is
that a student or a working professional. The consumer expectoration are that of
comfort, fuel cost initial price, low maintenance cost and efficient performance.

Premium segment: these bike are priced in the range of Rs 60000 to 75000.
The brand in this segment are characterized by good looks,
high power and speed, smooth handling and a certain aspiration value. The typical
owner of these bikes are young men. Their main expectation are superior performance
as well as fuel efficient motorcycles.
Super premium segment: the heromotocorp has karizma in this segment. The
motorcycle is generally characterized by sporty looks, high speed and power. The
consumer expectation are that of fast, elegantly designed motorcycles.

Target Market

Hero MotoCorp follows selective specialization. It has a wide range of bikes from Rs
38,000 to Rs 103000. Each product has multiple optional features. The USP that it uses
are: strong, sturdy and powerful, greater mileage, low maintenance cost, safe to ride,
ease and comfort. Its target market includes lower middle class consumer to upper
middle class consumer. It is affordable, available and acceptable by all.
Tiger woods is the first Global Corporate Partner in a four-year deal
that targets capturing new markets in North America and Europe

Positioning

Fill it. Shut it. Forget it Campaign

This campaign focused on the mileage of Hero
bikes. It says that once you fill oil in the bikes
tank, you are tension free. Due to its higher mileage,
you can travel as much as you want without bothering
to refill oil.

Dhak dhak go Advertisement campaign

Dhak dhak refers to the heart beat. Therefore this
campaign showed that if you are riding a Hero
bike you are listening to your heart. This
campaign connects emotionally to the consumer
as it shows the connection of bikes to the heart
of every Indian.

Desh ki Dharkan Advertisement Campaign

Desh ki dharkan refers to the heart beat of the
country. It symbolizes that all people in India
are emotionally attached to their country. Even
though there are a lot of cultural differences but
the entire country stands as one. This campaign
places Hero bikes as the heart beat of the entire
nation uniting everyone as a nation.

Event sponsorships
Event sponsorships of Indian super league 2014 is
a positioning strategy as football has a huge fan
base in India. It positions itself as a strong, reliable,
affordable and greater mileage bikes.

Celebrity endorsements
Various celebrity endorsements are used as their
Positioning technique.
In one of the biggest brand endorsements for any
Indian company, Hero MotoCorp ropedin
14-time major champion Tiger Woods asits
first Global Corporate Partner in Dec 2014.Also, signed on Indian
hockey captain Sardar Singh and Bollywood actor Alia Bhatt as new brand ambassadors

Hum me hai hero campaign

This advertisement tries to prove that we all are born super stars. We just need to focus
and believe in ourselves. There is nothing impossible in this world and there is nothing
that cant be achieved. Through perseverance we can reach great heights and achieve
whatever we want. We just need to believe firmly that we are a hero.

Strategic Branding

Hero motocorp is world's largest two-wheeler manufacturer but still considered only a
domestic player. Joining hands with Woods in a four-year deal of Rs 200 crore is
clearly a move to create a space at global level. It the most expensive celebrity
endorsement yet for an Indian company.
"Tiger Woods is one of the biggest global icons and not just a sports celebrity. His
appeal cuts across geographies, nationalities, age and gender and therefore, he is the
best brand fit to be our 'Global Corporate Partner' as we go global," said by pawan
munjal MD and CEO of hero motocorp.

Product Market Analysis

BCG Matrix: -

splender
series

hunk

passion series

xtreme

karizma

glamour

HF Dawn
HF Deluxe

achiever
impulse
ignitor

BCG Matrix: It is based on the observation that the hero motocorp company unit can be
classified into four categories based on combination of market share and market growth
relative to the competitor. It divided into four part.
1. Star: - In this category product have high market share and high market growth.
Hero motocorp have splender series, passion series and karizma in this category.
2. Cash cow: - In this category product have high market share and low market
growth. Hero motocorp have HF Dawn and HF Deluxe in this category.
3. Question mark: - In this category product have low market share and high market
growth. Hero motocorp have hunk, xtreme, glamour in this category.
4. Dog: - In this category product have low market share and low market growth.
Hero motocorp have achiever, impulse, Ignitor in this category.

ANSOFF MATRIX: -

The Ansoff Matrix, designed by Igor Ansoff, classifies and explains different growth
strategies for a company. This matrix is used by companies which have a growth
target. This is a tool which consist of two axis products and markets of a company that
facilitates decision-making.
The Ansoff matrix offers four strategies to achieve the objectives:
1. Market Penetration: - For existing products and existing markets, Hero can
penetrate into market with Value delivering pricing & Finance options, Aftersales services increased visibility & marketing Value deals Focus on rural
segment by driving through make shift showroom to gain visibility. These
strategies will help hero penetrate more into the market.
2. Market Development: -In strategy, a firm tries to expand into new markets
(geographies, countries etc.) using its existing offerings. Hero is focusing on
markets of North America and Europe.
3. Product Development: -In strategy, a company tries to create new products and
services targeted at its existing markets to achieve growth. Hero can focus on
this segment to achieve this strategy i.e. Skate bikes, Bikes for women, Ecofriendly bikes.
4. Diversification: -In an organization tries to grow their market share by
introducing new offerings in new markets. It is the most risky strategy because
both product and market development is required. Hero can grow in new
markets with new products by diversifying by brand extension like 4 wheelers.

Marketing strategy

Marketing mix- The marketing mix is a business tool used in marketing and by
marketers. It consists of
1. Product: - Product could be classified on basis on engine capacity
97.2 cc - It includes product like HF DOWN, HF DELUXE, HF DELUXE
ECO, SPLENDOR PLUS, SPLENDOR PRO CLASSIC, SPLENDOR
ISMART, PASSION PRO TR, SPLENDOR PRO, PASSION PRO.
109.1 cc - PASSION XPRO
124.7 cc - SUPER SPLENDOR, GLAMOUR, GLAMOUR
PROGRAMMED FI, IGNITOR
149.2 cc ACHIEVER, XTREME , XTREME SPORTS, IMPULSE,
HUNK
223 cc KARIZMA, KARIZMA ZMR
2. Price: -Hero MotoCorp offers wide range of two wheeler products that include from low
cost bikes to high end bikes ranging from 38,000 to 103,000.
3. Place: -Hero MotoCorp two wheelers are manufactured 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. Hero MotoCorps extensive sales and service network now spans
over to 6000 customer touch points. These comprise a mix of authorized
dealerships, service & spare parts outlets, and dealer-appointed outlets across
the country.
4. Promotion: -Hero motocorp uses celebrity endorsement with the corporate
business partner tiger woods, and with brand ambassador Sardar Singh captain
of Indian cricket hockey team. Hero uses campaign like hum me hai hero. Hero
also uses event sponsor as a medium of promotion.