Royal Enfield Report

MDI Gurgaon Marketing Analysis of HP Printers
PGP-HR
To devise and implement a strategy to enhance the

sales
of
Royal Enfield Bikes

By Group 7
Submitted To
Prof. J.N. Godinho
December-2004
Document No. Authorized By Roll Nos. Signature / Date

Int/01 Gaurav Kapil 04PGHR /13-Dec-2004
Gulshan Chawla 04PGHR /13-Dec-2004
Manasi Ghose 04PGHR /13-Dec-2004
Neelesh Goyal 04PGHR /13-Dec-2004
Shaveta Arora 04PGHR45 /13-DEc-2004
Team 7, PGP-HR Ver 1.0 Page 1 of 38

Acknowledgement
This project is aimed at understanding the Marketing Practices and implementation,

through Royal Enfield bikes. The attempt has been to tie the various factors like
Environment, Competitors and Consumers to understand the effectiveness of the
present target market of the product. On the basis of the same, the Strengths,
Weaknesses, Opportunities and Threats of/to Royal Enfield bikes have been
identified. Also, an attempt to suggest some recommendations for increase in sales
of the company’s bikes has been made. Several people have played a significant role
towards the successful completion of this project work and the researchers extend
their gratitude to them.
A deep sense of gratitude is owed to Mr. J.N. Godinho, Professor, Management

Development Institute, Gurgaon who extended support and assistance throughout
the project duration. Needless to say, his knowledge and experience have served as
a continuous source of encouragement and motivation. Without his invaluable
support and guidance this project would not have been possible.
Also a note of thanks to the exclusive dealer of Royal Enfield bikes, Mr. Amit
Chawla, who helped in understanding the sales and competition in the bike industry.
Finally a note of thanks is due to all those too many to single out by names, who
have helped in no small measure by cooperating during the project and by providing
constructive criticisms.
Group VII

Executive Summary
Computer hardware market is highly competitive and dynamic today, internationally.
With strong players operating, the key message is “Survival of the fittest”. Within
computer hardware market printer market has grown a lot in last 20 years. The name
“Hewlett-Packard Development Company” strikes first to the mind when one talks of
Computer hardware. Printers are considered as the most successful product under
the umbrella Hewlett-Packard Development Company. It is surprisingly how this
brand has continued to retain position of ‘Market Leader’ for such a long period of
time. The project undertaken aimed at understanding the various variables affecting
the marketing of HP-Printers. These include competitors, customers, company’s
strategy etc. HP printers is operating in a highly competitive environment with
players like Epson, Xerox, Samsung, Lexmark, Canon etc. The competitive
environment in which HP-Printers is operating vis-à-vis competitors has been taken
up in detail. Also there is an attempt to understand the segmentation done by HP-
Printers with respect to Product Life Cycle and competitors.
HP-Printers is the pioneer in the printer market and holds number 1 position in the
printer market. Other brands which emerged in the market have created niche
markets and targeted a specified type of customers. HP competes with these brands
on quality, speed and service based attributes. The only way HP is combating this
competition is by continuous innovation and creativity in terms of differentiation in its
products and other Promotional patterns like through advertisement, sales promotion
scheme, publicity etc. With its various variants, HP is targeting both individual and
industry consumers. If one talks about consumer behavior, people consider HP as the

best. Quality and service are the most critical factors determining the buying
decision. As far as income pattern is concerned, all those in upper middle and high
upper class could afford to buy. Thus, higher income group can be a potential
segment for the company.
Initially HP-Printers started with dot-matrix and inkjet printers, but later extended to
laser , color laser and multifunctional printers with scanner-fax-printer facilities.
Even though HP-printers is the market leader now, but with increasing competition
from Indian as well as foreign brands, it should realize that customer is the ‘king’ and
should make continuous efforts to identify and fulfill consumer needs.

TABLE OF CONTENTS
SNo Particulars Page

Nos
1. Acknowledgements 2
2. Executive Summary 4
3. Introduction 7
4. SWOT Analysis 8
5. Consumer Behaviour 14
6. Competitive Scenario 25
7. Segmentation Profile for HP Printers 35
8. Conclusion 37
9. References 40

Introduction
About The Company
Royal Enfield India was set up in 1955 when it started receiving 350cc bikes
in kits from the UK and assembling them in Chennai, India. But, eventually
the entire bike was manufactured in India and a couple of years later the
Company started manufacturing the 500cc Bullet. By its sheer power,
unmatched stability, superior riding comfort and rugged good looks, the
Bullet dominated and continues to dominate the Indian roads. It is the dream
choice of every motorcyclist in India with even the Indian Army and Police
endorsing the Bike.
In 1990, Royal Enfield entered into a strategic alliance with the Eicher Group, - a
Rs.10 billion conglomerate and later merged with Eicher Group in 1994. The Eicher
Group is one of India's leading automotive groups with diversified interests in the
manufacture of Tractors, Commercial Vehicles, Automotive Gears, Exports,
Garments, Management Consultancy and Motorcycles.
Since then, the Company has made considerable investments in modernizing its
manufacturing technology and systems and in 1996, when the Government decided
to impose stringent norms for emission, Royal Enfield was the first motorcycle
manufacturer to comply. Royal Enfield is amongst the first few Indian companies to
obtain the WVTA (Whole Vehicle Type Approval) for meeting the European
Community norms.

Marketing Network
To feel the pulse of the customers, Royal Enfield has set up a wide network of 13
marketing offices, 223 dealers in all major cities and towns, 25 spare parts
distributors and stockists and 150 Authorized Service Centers. The Company also
exports motorcycles to over 30 countries like the USA, Japan, Bahrain, UK, Germany
and many European countries through 5 international offices, 25 importers and over
200 dealers across the globe.
Collaborations
Royal Enfield has existing technical tie-ups with :
- AVL, Austria for new engines.

- FW Egli for high power engines for 535cc and 624cc.
- Criterion Engineers, UK for a new 5 speed transmission system.
- DB Designs, UK for styling.
The headquarters of Royal Enfield Motors is situated at Thiruvottiyur, Chennai, Tamil Nadu, India.
Manufacturing
Royal Enfield's manufacturing operations go through a series of modernization and

improvement efforts, with a number of automated processes. The Company has put
in place modern manufacturing practices like Cellular layouts, Statistical process
controls and Flexible manufacturing systems. The Chennai manufacturing facility has
received the ISO 9001 certification and for managing its operations in a clean and
safe environment, it has obtained the ISO 14001-quality certification.
Royal Enfield ensures that all the components used in the bikes are sourced from the
best vendors in the Indian automotive industry, who are geared to supply according
to the Company’s stringent quality standards. The company works closely with all of
its suppliers, giving them technical and managerial support while maintaining
practices like Direct-On-Line and Vendor Self-Certification.
Infrastructure and Technology Collaborations
To manufacture quality bikes that are well known worldwide for their reliability and
toughness state-of-the-art infrastructure is required, and that is just what Royal
Enfield has done at their Chennai manufacturing facility.
An active in-house Research & Development wing is constantly at work to meet

changing customer preferences and the challenges of Indian and International
environment standards. When introducing a new product, this team undertakes all
related planning which includes a rigorous customer contact program, design,
concurrent engineering and testing processes. The bike Design team at Royal Enfield
is well equipped with high-end CAD/CAM workstations and the latest modeling
software. Top-notch designers work continuously to come up with innovative bikes
designs to meet the markets expectations.
Royal Enfield was also amongst the first Indian companies to introduce Enterprise
Resource Planning (ERP) systems to manage its operations. It also has an online
supply chain management system in operation.
Presently there are five models of Royal Enfield bikes in the market viz.,
Thunderbird Bullet Machismo The 2004 Bullet Electra
Bullet 350 Bullet 500

SWOT Analysis
Opportunities Threats
o Introduction of bikes in o Movement of industry

entry and executive level towards premium
segment segment e.g. Karizma
o Encourage the sales with 225c.c
advertisement o Entry of exclusive
foreign players
Strengths
o No competition in 350c.c o Introduce customer o Entry of other players

bikes relationship management in 350 c.c segment
o Proven product durability
o Customer retention
o Online supply chain
management
o ERP operated operations
Weaknesses
o High Prices o Increasing awareness by

o Less Advertisement advertisement
o No bike in entry and o Innovating with styling of

executive level segment bikes

o No/little product o Offering better finance
innovation schemes
o Lack of attractive finance
schemes
Market Environment
In the last six years, the domestic two-wheeler industry has seen structural
changes. The motorcycle industry has been growing largely at the expense of
the scooter and moped segments. Scooters having bottomed out, and
mopeds likely to do so soon, the motorcycle industry is bound to have a
slower rate of growth - and this may lead to a price-war and pressure on
volumes and growth of the high volume players. Growth will be fuelled by
new introductions, tapping new segments and encouraging faster
replacement / up-gradation through introduction of differentiated /
customized offerings. For both motorcycle manufacturers and their suppliers,
the risk would be of building/ adding huge capacities in anticipation of
continued high growth rates. The motorcycles have consistently gained
market share from the scooter and moped segments to corner a share of
41% of total two-wheeler sales. The table below gives an idea about the
strides made by the motorcycle segment since 1993:
(in %) Scooter Motorcycle Moped
FY93 47.2 25.2 27.6
FY94 47.5 26.7 25.8

FY95 46.8 29.5 23.7
FY96 46.0 30.4 23.6
FY97 43.9 33.0 23.1
FY98 41.5 37.2 21.3
FY99 39.0 41.0 20.0
FY2000
33.2 47.6 19.2
Source : SIAM
The motorcycle market is broadly structured into economy/commuter bikes

and power, style and leisure bikes. The economy segment of the market
comprises of entry level bikes and typically has the 100 cc motorcycles. The
power, style and leisure segment comprises of bikes up to 180 cc. Royal
Enfield is the only player in the 250 cc and above category and is positioned
as the power and leisure bike manufacturer.
Hero Honda is the leading player in the motorcycle market, with market
share close to 48% followed by Bajaj Auto at 24%. Other players in the
market are TVS motors, Yamaha Motors, LML and Kinetic Engineering.
The Indian motorcycle industry can be broadly categorized in to Indian

motorcycles and Indo-Japanese motorcycles. The Indo-Japanese motorcycle
segment is dominated by Hero group, Bajaj and Escorts in collaboration with
Japanese vehicle manufacturers Honda, Kawasaki and Yamaha respectively.
The Indian motorcycles segment is dominated by Bajaj (M80), Escorts and
Royal Enfield.

In motorcycles sales, western region leads with a market share of 40% of the
total motorcycle sales. South and north regions come second and third with a
market share of 27.5% and 17.4% of total motorcycle sales respectively.
Over the last couple of years since 2000-01, the motorcycle market has more
than doubled to over 4.3 million units in 2003-04. The industry is expected to
continue to grow in future also due to new products, availability of low cost
finance and increase in replacement demand coupled with shift in customer
preference to motorcycles over scooters.
Different players with their offerings of bikes in different segments have been
listed below:
Executive Premium
Company Entry Level
Level Level
Bajaj Auto CT100 Discover Eliminator
Caliber115 Pulsar150 DTSi
Saffire Pulsar180 DTSi
Spirit Wind 125
Hero Honda CD-Dawn Ambition 135 Karizma
CD100 CBZ
Splendor
Passion
Honda Activa/Dio Eterno
Unicorn
Kinetic Boss EX GF170 Comet
Boss 115
Velocity
LML Aderno Freedom 125
Freedom 110
Royal Enfield Bullet 500

Bullet 350
Electra
Machismo
Thunderbird
TVS Centra Fiero F2/FX
Max 100 Victor GLX
Star
Yamaha Yamaha Crux Enticer
Consumer Behavior
It is very important for an organization to understand its consumer’s buying

behavior. Only when a company understands its consumers, it can modify its
offerings to ensure maximum consumer benefit. Somewhere decisions relating to all
4 P’s are taken keeping in mind consumer. Since today all companies are following
marketing concept, all decision making activities surrounds consumers. To
understand the consumer buying behavior, we undertook a market research to
understand what people think about HP printers as a brand and how much is their
level of awareness with respect to brand. The objectives of the consumer behavior
study are:
 Factors influencing the buying behavior of consumer
 The price-demand relationship analysis
 Consumer Loyalty towards the brand
 Consumer awareness of the brand

The primary source of data is personal interviews and questionnaire of individual

customers selected on the basis of relevance and judgment, given the academic
nature and the duration of the study.
The study was carried out in Gurgaon. The primary focus was on following
parameters:
 Psychographic and Behavioral parameters
 Brand Awareness
 Comparative attributes
 Substitutability
 Brand Usage Pattern
 Brand Loyalty
Description of sample
Sample size- 35
Brief description
INCOME GROUPS
10%
180000-240000
20%
240000-300000
70% 300000+

QUESTIONNAIRE:
This survey is being carried out for printer. The information is being used by
management students for academic purpose only
1. Which brands of printers are you aware of?

 HP
 EPSON
 CANON
 SAMSUNG
 OTHERS ( SPECIFY)
The purpose is to find out the top of the mind brand of the customer. here we
observe that the entire sample is aware of hp printers.

2. Do you have a printer?

 Yes
 No
This was framed to find out how many people actually owned printers. Here we
observed that 80% of the sample owned printers.
3. If yes then which one?

 Hp
 Epson
 Canon
 Samsung
 Others
This question confirmed the market leadership of HP as 62 % of printers

owners owned a HP printer
4. How did u come to know about HP printer?

 Print media
 TV advertisement
 Friends and family
 Showroom dealers
 Others
 Don’t know
In response to this question, we found that the social factors namely the reference
group acted as the major source of information for the sample.
5. Rank in order of preference (1-5) the parameters considered by u while

purchasing a printer (1 is most imp.)
 quality
 brand
 after sales services
 price
 printing speed
This question enabled us to access what exactly the customers are looking for when
they go in for the major purchase of a printer. This brought to light that quality and
brand are the 2 major things that a consumer looks for. Price plays a very small as
70% of the sample belonged to high income group.
6. Evaluate the various brands on a scale of 1-5 (1 is the most imp.)
QUALITY PRICE AFTER PRINTING BRAND

SALES SPEED IMAGE
SERVICE
HP
SAMSUNG
EPSON
CANON
XEROX
ENABLES US TO COMPARE HP with its competitors on the basis of key attributes. The
results for this question were strongly titled in HP’s favor with HP being the no1
choice in all except price.
7. What is the primary reason for buying a printer?

 Convenience
 Cheaper printouts from outside
 People u know also have a printer
This question helps us to recognize the need for buying a printer. The data here was
not conclusive as both convenience and price were major factors.
8. Who/what will u consult before buying a printer?

 Spouse
 Children
 Friends
 Colleagues
 Internet
 Magazines/newspapers
 Brochures
 Showrooms
This question helped to know the level of involvement of the consumers. The
answers to this question were clearly indicative of the fact that the consumers were
highly involved in the purchase.
9. Who makes decision in your house as to which printer shall be brought?

 You
 Your elder siblings
 Your parents
 Souse
 Friends
 Children
 Others(please specify)
Enabled us to shed light on the decider. Since most of the sample consisted who
were financially dependent on the parents, so it was no surprise that parents were
the main decision makers.
PERSONAL DETAILS:
NAME:
OCCUPATION:
ANNUAL HOUSEHOLD INCOME:

 60000-120000
 120001-180000
 180000-240000
 240001-300000
 300000+
The personal details were very imp. As they enabled us to analyze the consumer
behavior on the basis of very important personal factors like age, occupation, and
economic circumstances.
BUYING ROLES
Buying roles can be categorized into five roles:-
 INITIATOR: this is the person who firsts suggest the idea of buying the
product service. In this case, we found in most cases(65%) the purchase
was initiated by the students of the household in the age group.17-24
 INFLUENCER: this is the person whose views on advice influence the
decision. We found the major influence to be the reference groups- friends
(30%) and colleagues (35%).

 DECIDER: this is the person who decides of any component of a buying

decision. HP printers, major deciders (70%) were parents. We realize that this
is due to the predominant student sample and the fact that the most of them
were financially dependent on their parents.
 BUYER: this is the person who makes the actual purchase. In our case, this
tended to be the parents.
 USER: the person who uses or consumes the product or service. Here, the
initiators and the users tended to be the students.
BUYING BEHAVIOUR
FOUR TYPES ARE:-
HIGH INVOLVEMENT LOW INVOLVEMENT

SIGNIFICANT DIFFERENCE COMPLEX BUYNIG VARIETY SEEKING BUYING
BETWEEN BRANDS BEHAVIOUR BEHAVIOUR
FEW DIFFERENCES DISSONANCE REDUCING HABITUAL BUYING

BETWEEN BRANDS BUYING BEHAVIOUR BEHAVIOUR
From the above data, we can infer that most of our sample consulted more than 3
people before making the final decision. This is clear indication that the consumer
are very highly involved in the purchase of a printer, which is understandable
considering that a printer is an expensive and long term buy for most.
Also, judging by the response we got, the brand image of a high end sophisticated
item like a printer influences the buying behavior greatly, it is indicative of the kind
of after- sales services that the consumer can expect. The kind of distribution
network that hp has in India has helped promote its brand image in a big way.
Moreover, it is the market leader in printer cartridges as well, which makes the
associates between printers and hp stronger.
Therefore with reference to the figures given above, we can conclude that the
customers of printers exhibit complex buying behavior.
DECISION MAKING PROCESS
1. PROBLEM RECOGNITION: The predominant reason for buying a printer

appears to be the convenience it offers, closely followed by the fact printers
from external sources tend to be more expensive. The students usually
reiterated the convenience factor while professionals requiring a large no. of
printouts voiced the second opinion.
2. INFORMATION SEARCH: consumer information searches may be personal,
commercial, public or experimental. In our survey, the major sources of
information for the customers were the personal sources like friends and
colleagues. This goes to show that in case of printers, word of mouth plays a
very important role.
3. EVALUATION OF ALTERNATIVES: in our context, the total set consisted of HP,

Epson, canon, Samsung, Xerox. The awareness set consisted of hp, Epson,
Samsung, which were evaluated on the basis of price, brand image, etc. to
constitute the consideration and choices set.
4. PURCHASE DECISION: the purchase decision was based on the customer’s
priorities. HP has a good brand image but was perceived to be a costlier
option by most customers. Since our sample mainly consisted of the higher
income group, the price factor took a back seat.

POST PURCHASE BEHAVIOUR:
Competitive Scenario
It’s not easy to make a best choice in bikes. The specifications, style, power, price,
riding comfort and ruggedness make all the difference in the buying behavior of
customers. These factors interrelate in complicated ways to influence the buying
decision Following are the major factors on the basis of which it is decided that which
bike is better:
1. Powertrain
2. Fuel economy
3. Mileage
4. Style
5. Price
6. Top speed
7. Features e.g. e-start option
8. Engine
9. Weight
10. Riding comfort
In the modern technology industry, competition among rival firms is generally

constructive. Firms strive for a competitive advantage over their rivals, primarily by
providing better products and support. The intensity of rivalry among firms varies
across different segments, and in this report, we are interested in analyzing these for
printer industry with focus on individual and corporate customers of printing
solutions.
A number of highly competitive brands in the market have been snapping at the
heels of Goliaths like Samsung, Canon, Epson and Xerox. Samsung is as strong in
technology as HP. But in this segment, no company try to out promote the

competitors by spending large amount of money on advertising or reducing prices of

the products. Here, the competition is in making the product available, taking
initiative in innovation, using great sales force and creating awareness for the pirated
technology available in the market.
Porter’s Five Forces:

Potential Entrants
Strengths:
 Stable returns
 Access to distribution channels
 Industry Growth rate
Weakness:
 High entry and exit barriers
 High buyers’ switching costs
 Incumbents’ defense of market share
 High capital requirements
 Low product Differentiation
Suppliers Buyers
Industry Competitors
Strengths:
Strengths:  Large number of buyers
Strengths:
 Cater to strong buyers  Low product differentiation
 High market growth rate
 Supplied product is important  Buyers’ incentives
input  Existing strong or aggressive
competitors  Sources of information
 Relatively fewer substitute
inputs  Strategic stakes are high  Strong brand identity
Weakness: Weakness:  Proportion of income spent

on the purchase
 Many competitive suppliers  High level of product differentiation
Weakness:
 No credible threat of  High switching costs for the buyers
downstream integration  High Switching costs
 Brand identification
 Low product differentiation  Fragmented buyers
 No substitutes
 High product importance

Substitutes
Strengths:
 Technological advancement
Weakness:
 No actual substitutes
Bargaining power of suppliers:
Suppliers tend to be powerful when they’re concentrated or organized, when there

are few substitutes, when the supplied product is an important input, when the cost
of switching suppliers is high, and when the supplier can integrate down stream.
Since there are many competitive suppliers in the market for printer industry and
there’s no fear of downstream integration in any way because of low product
differentiation, the suppliers don’t have the benefit of bargaining.
Bargaining power of Buyers:
The bargaining power of buyers is the impact that customers have on an industry. If
the buyers possess strong or growing bargaining power, the market conditions are
such that there exists many suppliers to a few buyers. Such a segment becomes
unattractive since the buyer sets the price. Buyers are powerful if they are
concentrated, if the product represents a significant fraction of the buyer’s costs, if
buyers are price sensitive or when they can upgrade upstream. The buyer power
becomes insignificant if buyers’ switching costs are high, if buyers are fragmented or
if producers threaten forward integration.
The power of buyers is the impact that customers have on a producing industry. In
general, when buyer power is strong, the relationship to the producing industry is
near to what an economist terms a monopsony - a market in which there are many
suppliers and one buyer. Under such market conditions, the buyer sets the price. In
reality few pure monopsonies exist, but frequently there is some asymmetry
between a producing industry and buyers. The following tables outline some factors
that determine buyer power.
The printer is a product found with all the IT industries and almost all other
industries and IT professionals. The buyers are not price sensitive but they’re very

particular about the quality. As printers are available in range of prices, different
buyers target different price range according to their pocket. At the same time it
depends what application does one wants from the printer. Some companies’ need is
restricted to the A4 size printouts but the hoardings and large maps need printer
above the range of even 5 lac rupees. Rather, there’s no upper limit to the price of a
printer.
Threat of Substitute Products:

In Porter's model, substitute products refer to products in other industries. To the
economist, a threat of substitutes exists when a product's demand is affected by the
price change of a substitute product. A product's price elasticity is affected by
substitute products - as more substitutes become available, the demand becomes
more elastic since customers have more alternatives. A close substitute product
constrains the ability of firms in an industry to raise prices. The competition
engendered by a Threat of Substitute comes from products outside the industry.
A printer has become a basic necessity for any IT industry in addition to other
industries and individual customers. The Photostat, carbon copies and fax cannot
substitute printouts. This product has got so deeply engraved into the minds of the
consumer is difficult to be replaced or for that matter even substituted.
Threat from new Entrants:
It is not only incumbent rivals that pose a threat to firms in an industry; the
possibility that new firms may enter the industry also affects competition. In theory,
any firm should be able to enter and exit a market, and if free entry and exit exists,
then profits always should be nominal. In reality, however, industries possess
characteristics that protect the high profit levels of firms in the market and inhibit
additional rivals from entering the market. These are barriers to entry.
In the starting, HP had the monopoly in the printer segment but later on, the market
was inundated with many printer models from Samsung, Lexmark, and Canon etc.
The segment of printers priced between INR 10,000-20,000, HP saw good
competition from Samsung, Epson & Lexmark. In higher price range esp. in the

multifunctional printer segment, Canon & Xerox has been giving a tough competition
to HP.
Comparative Analysis in Printers Industry

Players--> HP Samsung Canon Epson Xerox
Comparative
Factors
Customer
Knowledge
Product Innovation
Quality strategy
Line-extension
Strategy
Sales
aggressiveness
Effective sales
promotion
Competitive
toughness
Performance
Dealership system
Replacement policy/
Parts management
Total 18 16 13 3 12
Legend for level of

advantage
2 Highest
1
0 Lowest

Comparative Analysis in Printers Industry: Competitors of HP Printers have been

studied under various parameters and a comparison has been drawn for these in the
above excel sheet.
Samsung:
Samsung is a key player in printer market with strong brand awareness and act as
strong market challenger to HP. Samsung printers are technologically sound as HP
printers with key features like no noise i.e. noise level below 48 dB as compared to
other printers being 52 dB or 54 dB. These printers have got lowest noise level
among all the competitors. Only Samsung printers provide free auto duplex printing.
For others, the duplex facility is either expensive or not available. Samsung’s quality,
sales force, dealership and promotion schemes are as effective as HP. In the color
laser printer class, Samsung is giving tough competition to HP.
Canon:
Canon has an edge over HP in photo printers. It does not have as good sales force as
HP has. Moreover, its distribution system also has a setback as compared to HP. But
in photo printers segment, Canon has proved its superiority by having more share of
mind of the customers. Recently, Canon has employed integrated circuited
manufacturing techniques to produce a print head capable of delivering a print
quality that in many cases exceeds the results of more costly six ink systems of its
competitors. The secret to the i965’s speed lies in the print head. Unlike other
manufacturers who must assemble their print heads from a multitude of
components, Canon employs a proprietary etching process similar to that used in
semi-conductor manufacture. the result is smaller nozzles, greater nozzle density
and longer print heads. The extremely precise 10-micron diameter nozzles are
almost half the diameter of Canon’s nearest rival and are placed seven times closer
together. Minuscule 2pl droplets are ejected with high frequency and accuracy.

Combined, these features produce a print head that puts more ink down on the page
in less time – for record breaking print speeds.
Xerox:
Xerox Corporation (NYSE:XRX) is a $15.7 billion technology and services enterprise

that helps businesses deploy smart document management strategies and find better
ways to work. Its intent is to constantly lead with innovative technologies, products
and solutions that customers can depend upon to improve business results.
Xerox provides the document industry's broadest portfolio of offerings. Digital

systems include color and black-and-white printing and publishing systems, digital
presses and "book factories," multifunction devices, laser and solid ink network
printers, copiers and fax machines.
Xerox gives competition to HP in multifunction printers. Xerox is No.130 among the

Fortune 500 companies. The company's operations are guided by customer-focused
and employee-centered core values -- such as social responsibility, diversity and
quality -- augmented by a passion for innovation, speed and adaptability.
HP as Market Leader
HP has the largest share in the printer market. HP Imaging and Printing posted
record third quarter revenue of $5.6 billion, up 8% year-over-year. During the
quarter HP shipped almost 10 million printers, bringing total shipments to
approximately 320 million units worldwide. Business hardware grew 8% year-over-
year driven by strong unit shipments in color and mono lasers, business inkjets and
multinational printers. Home hardware decreased 5% with All-in-One unit sales
growth offset by declining single-function printers and normal seasonality. Supplies
grew 9% fueled by strong growth in color and monochrome laser supplies. Digital
Imaging grew 11% as strong digital camera unit shipments helped offset an
expected decline in scanner market. Operating profit of $837 million was also a third
quarter record and represented 14.8% of revenue.
Strategies followed by HP Printer Industry:

 Customer Knowledge: HP is a customer centric industry and takes

consultation from the customers and studies their needs. In other words
through market research and intelligence gathering, HP studies its customers
—both industry and individuals and utilize the data in improving its products.
 Product Innovation: HP is an active product innovator. Presently more than

eight types of HP printers are in the market with further specifications and
varieties. HP printers range from black & white inkjet printers to
multifunctional all in one printers. HP launched more than 660 new products
in 2003 and closed the year with 21,000 patents in force worldwide, up from
17,000 in year 2002. HP spent 43.7 billion on R&D, focused in areas of
innovation where it made unique contribution and lead. HP invested more
than $1 billion in software across its portfolio, $600 in building the HP brand,
$400 million innovating its internal IT systems.
 Quality Strategy: HP designs products of superior quality and it is also the

USP of the company. That is why HP is known for its brand image.
 Line Extension Strategy: HP produces its printers for all industry requirements
and individual users. This strategy gives HP an edge over all existing printer
manufacturers and prevents the competitors from sharing the mind and heart
of the consumers.
 Aggressive sales force: HP has three national distributors in Delhi, Mumbai

and Chennai and 2000 resellers all over the country, thus making the product
available to the customers at their doors. This huge sales force serve the
retail giant works closely to improve both the products that go to the stores
and the process by which they get there.
 Effective sales promotion: HP’s sales-promotion department trains its brand

managers on the most effective promotions to achieve particular objectives.
The department develops an expertise of these deal’s effectiveness under
varying circumstances. At the same time, HP tries to minimize the use of
sales promotion or low prices.

 Performance: HP printers are known for their reliability and durability. It is

key buyer consideration in the choice of printers.
 Dealership system: HP has three distributors at the national level in Delhi,

Mumbai and Chennai. It also has online retailing and reselling facility. Some
of its online retailers are amazon.com, compusa.com, staples.com,
computers4sure.com, Vikings, etc.
 Service: HP gives warrantee on its products and has a replacement policy in

case of a faulty product delivered.
Other advertisement done for HP is by following ‘push’ methodology, range addition

and offer addition. HP also offers lease and financing options to the buyers with low
or no rate of interest. HP believes that “In this frenzied and competitive marketplace,
you not only need to provide customers with solutions to their business problems,
but to close a deal, you also have to give them more value for their dollar than the
next provide ”. HP Financial Services delivers financial tools to help the customers to
achieve superior business results by closing more transactions, closing larger
transactions, closing more profitable transactions, adding value to the customer
experience and thus keeping more customers.
Segmentation
The Printer industry is growing at a very fast pace with the arrival of several
global players. There was a time when HP was considered as the sole organized
player in the printer market but over the last couple of years more organized players
are making their presence felt in a big way. A watch is no more a luxury or industry
specific need but it has become an extension to a person’s lifestyle. The consumer
has become very technology savvy and the choice doesn’t depend merely on the
function but also on the printing and color quality. With the emergence of this trend
there are a variety of brands available in the market, giving rise to a cutthroat
competition among the players. Therefore the companies are trying to focus on the
buyers whom they have the greatest chance of satisfying. A majority of the players
have adopted target marketing, identifying the major market segments and
targeting one or more of these by developing a variety of each catering to a
particular segment.
One way to build market segments is to identify preference segments. The

printer market reveals distinct preference clusters, called natural market segments
on the basis of the features of the printers as against the price. This is as depicted
below –
There are various

factors that come into
play while effectively
identifying a good
market segment –
Measurability:
Consumers in the printer industry can be placed within or outside each segment on
the basis of a measurable factor, price. The following segments on the basis of price
characterize the printer market –
Top of the line – These are basically the color laser multifunctional
printers introduced in the market by different companies, available in the price range
of above Rs. 5 lac.
Expensive – These printers are also in color laser printer segment but
the range is Rs. 25,000- 200,000. These brands fall in the price range of Rs. 6000 to
a high of Rs. 1lac.
Up market – Printers falling in the range of Rs. 5000 – Rs. 20000 are
included in this group. These are the black and white multifunction and color laser
printers specially produced for industries which need to take printouts of big
hoardings etc.
Mass Market – These printers in the price range of Rs. 2500 – Rs. 5000
include some inkjet and dot-matrix printers

Segmentation Profile for HP Printers
Individual Customer Profile
Segmentation Factor Segment Description

Geographic
Americas, Asia-Pacific, Europe, Middle
a. Region East, Africa
b. Density Urban
Demographic
a. Age 12 and above
b. Income INR 2.5 lac and above
c. Occupation Professional and Technical
d. Social Class All upper middle and upper uppers
Behavioral
a. Benefits Utility/Service
b. User Status Regular user and potential user
c. Usage Rate Medium to heavy user
d. Loyalty Strong
e. Readiness stage Intending to buy/Interested
f. Attitude towards Product Enthusiastic

Industry Consumer Profile
Segmentation Factor Segment Description
Demographic
Almost all Industry/Educational
a. Industry institutions
b. Company Size Small to very large industries

Americas, Asia-Pacific, Europe, Middle-
c. Location East, Africa
Operating Variables
a. Technology Inkjet/Laser/Multifunction
b. User Status Light users to heavy users

Many services like selling computers
with all accessories and different
c. Customer Capabilities printers
Purchasing Approaches
a. Purchasing Function Organizations Both centralized and decentralized
b. Nature of existing relationships Both weak and strong relationships
c. General Purchase policies Contracts or direct purchase
d. Purchasing Quality and service
Situational Characteristics
a. Loyalty High Loyalty

Conclusions
HP is the most successful and established company in Printer market. There are
number of conclusions we can draw from this project:
1. Environment: The environment of HP Printers includes

Micro Variables: Company, Consumers (most important), public, employees,
intermediaries etc.
Macro variables: Demographic factors (age, income, gender, social status),
economic factors, etc.
Hp is the market leader in the printout segment with a market share of 62%
Quality, printing speed, after sales services and brand name are two major
appeals in the product.
The company should try and integrate all its micro and macro variables. Both
micro and macro variables complement each other and go hand in hand.
Company should ensure that it is able to extract maximum out of both these
variables. An organization like HP is successful today because it has integrated
all the elements of supply chain and other variables in its environments
2. Consumers: Changing technology is the key factor which prompts consumers

to choose a product in computer hardware. HP has been the market leader
because it has continuously innovated in the printer segment and came out
with new and useful features. HP should try to satisfy the customers’ quench
for innovative features and usability by bringing variants in the existing
product line. HP need to concentrate on consumers at two levels:
a. Existing customers: Retaining a customer is much harder that getting

a new customer. As a number of new companies have stepped in the
market of printers, HP should take feedback from existing consumers
and modify their offerings accordingly.
b. Potential customers: These are the people who buy printers but not
from HP. It is very critical for HP to identify reasons for their non-

usage. The research done shows that the biggest reason for non-usage
is price difference in the various printers available in the market. As
the individual customer has to see his pocket before investing in this
product, this could be a big threat to HP as the competitors are
introducing their products in low price range with same features HP-
Printers is in maturity stage but still it needs to concentrate completely
on its consumers and continuously aim at providing offerings that
ensures maximum consumer satisfaction thus ensuring brand loyalty
in the long run.
There is a high level of involvement of the customers in buying the product

A large % of the initiators in the buying of HP printers are students in the
age group 17-24.Major reference group include friends and colleagues. This
product is characterized by complex buying behavior. In spite of having a
comparatively high price, it is the convenience of the printer that has
increased to demand. In the awareness set, no. 1 recall was Hp printers.
3. Competition:
HP is facing competition on two fronts- based on price and based on service

attribute. Company needs to formulate strategies for both kinds of competitors. To
face the competition based on price, HP should offer promotions like free gift; price
offs, etc so as to induce customers who are more interested in maximizing physical
satisfaction by getting more at fewer prices. Whereas for competition serving service
conscious customers, HP needs to advertise more to highlight their large number of
outlets and dealers.
The printer is a product found with all the IT industries and almost all other industries
and IT professionals. The buyers are not price sensitive but they’re very particular about
the quality. As printers are available in range of prices, different buyers target different
price range according to their pocket. At the same time it depends what application does
one wants from the printer. Some companies’ need is restricted to the A4 size printouts
but the hoardings and large maps need printer above the range of even 5 lac rupees.
Rather, there’s no upper limit to the price of a printer.

Thus, we can conclude by saying that HP has been successful in being market leader
for past number of decades and with its ability to change with consumers need and
increasing competition, it can continue to retain its market position forever. It needs
to keep a close check on competition and anticipate their strategies. Also a proper
integration of all variables in the environment can help HP continue to be a market
leader.

References
Textbooks:
 Marketing management by Philip Kotler
 Advertising and consume behavior by Sutherland & Sylvester
Websites:
 www.hp.com
 www.canon.com
 www.samsung.com
 www.xerox.com
Discussions with Business Development team at HP, Delhi based in Gurgaon

(NCR).

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MDI Gurgaon Marketing Analysis of HP Printers

To devise and implement a strategy to enhance the

Royal Enfield Bikes

Document No. Authorized By Roll Nos. Signature / Date

Team 7, PGP-HR Ver 1.0 Page 1 of 38

This project is aimed at understanding the Marketing Practices and implementation,

A deep sense of gratitude is owed to Mr. J.N. Godinho, Professor, Management

Team 7, PGP-HR Ver 1.0 Page 2 of 38

Computer hardware market is highly competitive and dynamic today, internationally.

the umbrella Hewlett-Packard Development Company. It is surprisingly how this

the marketing of HP-Printers. These include competitors, customers, company’s

strategy etc. HP printers is operating in a highly competitive environment with

environment in which HP-Printers is operating vis-à-vis competitors has been taken

up in detail. Also there is an attempt to understand the segmentation done by HP-

Printers with respect to Product Life Cycle and competitors.

competition is by continuous innovation and creativity in terms of differentiation in its

Team 7, PGP-HR Ver 1.0 Page 3 of 38

segment for the company.

laser , color laser and multifunctional printers with scanner-fax-printer facilities.

should make continuous efforts to identify and fulfill consumer needs.

Team 7, PGP-HR Ver 1.0 Page 4 of 38

SNo Particulars Page

7. Segmentation Profile for HP Printers 35

Team 7, PGP-HR Ver 1.0 Page 5 of 38

About The Company

Team 7, PGP-HR Ver 1.0 Page 6 of 38

Royal Enfield has existing technical tie-ups with :

- AVL, Austria for new engines.

Royal Enfield's manufacturing operations go through a series of modernization and

Infrastructure and Technology Collaborations

An active in-house Research & Development wing is constantly at work to meet

Thunderbird Bullet Machismo The 2004 Bullet Electra

Bullet 350 Bullet 500

Team 7, PGP-HR Ver 1.0 Page 8 of 38

o Introduction of bikes in o Movement of industry

o No competition in 350c.c o Introduce customer o Entry of other players

o High Prices o Increasing awareness by

o No bike in entry and o Innovating with styling of

Team 7, PGP-HR Ver 1.0 Page 9 of 38

executive level segment bikes

(in %) Scooter Motorcycle Moped

FY93 47.2 25.2 27.6

FY94 47.5 26.7 25.8

Team 7, PGP-HR Ver 1.0 Page 10 of 38

FY95 46.8 29.5 23.7

FY96 46.0 30.4 23.6

FY97 43.9 33.0 23.1

FY98 41.5 37.2 21.3

FY99 39.0 41.0 20.0

The motorcycle market is broadly structured into economy/commuter bikes

The Indian motorcycle industry can be broadly categorized in to Indian

Team 7, PGP-HR Ver 1.0 Page 11 of 38

Royal Enfield Bullet 500

It is very important for an organization to understand its consumer’s buying

Team 7, PGP-HR Ver 1.0 Page 13 of 38

The primary source of data is personal interviews and questionnaire of individual

Team 7, PGP-HR Ver 1.0 Page 14 of 38

1. Which brands of printers are you aware of?

Team 7, PGP-HR Ver 1.0 Page 15 of 38

2. Do you have a printer?

3. If yes then which one?

This question confirmed the market leadership of HP as 62 % of printers

4. How did u come to know about HP printer?