A

PROJET REPORT

ON

“HERO HONDA MARKETING STRATERGY”IN CONTEXT WITH “HERO HONDA”

DURG (C.G)

Submitted in the partial fulfillment for the award of degree of

BACHELOR OF BUSSINESS AMINISTRATION

OfPt.Ravishankar Shukla University, Raipur (C.G)

Session 2007-2010

Submitted by

ABHISHEK KUMAR

DEPARTMENT OF MANAGEMENT SHRI SHANKARACHARYA MAHAVIDYALAYA

SECTOR-6 BHILAI (C.G)

Certificate

To whom may ever it may concern

This is to certify that abhishek kumar student of B.B.A 6th sem of shri shankaracharya mahavidyalaya , bhiai has carried a research project on the topic to hero Honda under my supervision . This report is original and data collected by the researchers him self are true authentic up to my knowledge.We wish abhishek success in his professional career .

Declaration

I abhishek kumar student of sixth semester at ‘

shri shankaracharya mahavidyalaya ‘ here by declare that these research report

under the title is the record of my original work under the guidance of Mr.

Sandeep Jaswant (H.O.D ) B.B.A . These report has never been submitted any

where for award of any degree or diploma.

Place:

Date:

Department of BBAShri shankaracharya mahavidyalaya sector-6

bhilai (CG)

Certificate

This is to certify that abhishek kumar a student of B.B.A sixth semester at our institute under my guidance and supervision he had carried out the

research project under title

“ marketing strategy of hero Honda“

This research report is the original one.

Place:

Date :

Project guide (lecturer) Department of

B.B.A SSM Bhilai

Acknowledgement

Perhaps the most awaited moment of any endeavor in its successful competition of their project report cases study having worked on her project for the whole academic session. I would like to express my sincere gratitude to all those who made it possible.

Firstly I am humbly and respectfully to my guide Mr. Sandeep Jaswant (H.O.D) of the B.B.A department under whose able guidance. I had the privilege to work and who guided at every stage.

I take this opportunity to express my sincere gratitude to our principle for being guide of philosopher throughout B.B.A program.

I shall be failing in my duty if I don’t express my deep sense of gratitude to all my friends and the relatives who have share their valuable time and helped me directly or indirectly in the preparation of their project .

At the end last but not the least, I would like to thanks the other staff and non staff member the of this college.

(B.B.A sixth semester)

Preface

The topic chosen by me for my project is marketing strategy “In reference to hero Honda automobiles the two wheeler especially in the stylish motorcycle. At present hero Honda is market leader in the Indian market.

Today there are various companies coming in Indian and these certainly will exist a cutthroat competition in these field . I have chosen a hero Honda as a topic essence of my project .today two wheeler consumer due to new manufacturing entrant has started getting a wide choice while buying one these gave to considered the facility provided by the two wheeler the price mileage , maintenance and service etc. while buying a two wheeler .

A normal customer is quit puzzled and faces for an uneven some time huge

problems in deciding which vehicle to buy. I realized the problem and decide to take

these up as the challenge and provide answer to as the requirement of the Hero

Honda.

Chapter - 1

Introduction

Satisfaction is the persons feeling of pleasure (or) disappointment resulting from comparing a

product perceived performance (outcome) in relation to his/her expectation. if the performance fall short of expectation the customer is dissatisfied . if the performance matches the exception the customer is satisfied if the performance exceeds the expectation the customer is highly satisfied ( or ) delighted many companies are aiming for high satisfaction because they are much ready to switch. ] Buyer’s expectation formed on the basis of past buying experience, friend and the associate advice and the marketers and the competitor’s information and promises. if marketers raise expectations two high , the buyer is likely to be disappointed . Even if the company sets expectation should match the performances.

≈} A customer is the most important person even in any company≈} A customer never depend on company, but the company depends on him.≈} A customer is the person who bring company his Wants.

≈} A customer is not a interruption of marketers Work he is the purpose of it.

Two wheelers in India

In 60 decade several vehicles were running in the Indian roads those are the sun beams, AIS, BBA and Royal Enfield. From these motor cycles only the Royal Enfield has existence in the motorcycle market.

After 60 decade some other motorcycles and scooter had been launched in Indian two wheeler market those are the Rajdoots, Java, Vespa and Lamrata .

Indian witrossed the first spate of modernization in two wheeler industry in 1978-79 during that period Piaggio sauntered the Indian market in a joint venture with the Lohia machines and our

major Japanese motor cycle manufacture set up joint venture companies to produce 50cc two wheeler for the first time.

Objectives of the study

≈} To know the customers expectations towards hero Honda.

≈} to find out the customer opinion regarding

Various aspect of the bike.

≈} To give the appropriate suggestion to the company regarding he performances.

Our brand

Our brand identity: Our brand is the visual

expression of the ought and the action it conveys to everyone

our intention two constantly inspire the confidence.

Our customers are the primary audience for our brand.

Indeed, our brand identity is shaped as much by their belief in hero Honda as the as it it’s our brand.

We can do this by the living on the brand essence and by continuously seeking to enhance our customer experience.

In doing so, we ensure a special pace for our self in the heart and in the mind of the customer.

Our brand essence

Our brand essence is thje soul of our brand

Our brand essence encapsulates or mission at Herohonda

It is the singular representation of our terms of endearment with our customers.

It provies the basis on which we grow profitability in the market.

Our brand essence is excitement

Hero Honda strives to inspire the confidence through te excitement engineering.

Blending together youthfull creativity and competitive technology to exceed the spoken and the implict expectations of our customers.

By challenging the given . by exploring the unknown and

thereby stretching ourself towards tomorrow, today.

Learning

Learning is how we insure our proactively

It is the values that embraces knowledges as the plat form for the building well informed.

Innovation

It is how we can create the future

It is that which provokes us to reach beyond the abivous in persuite of that which exceeds the ordinary.

Speed

It is how we convey clear convection.

It is the value that keeps us sharpley responsive , mirroring our commitment towards our goal and process.

Chapter -2

History

India has the largest number of two wheeler in the world with41.6 million vehicles. India has a mix of 30 percent automobile and 70 % two wheeler in the country. India was the second largest two wheeler manufacture in the world starring in 1950’s with the British automobiles product of India (API) that manufactured the scooter. API manufacture the lamberts but, another company Bajaj automobiles LTD. Surpassed API and remaining through the turn of the century from its association with piaggio of Italy

(Manufacturer of Vespa)The license raj that exist between the

1940s to 1980s in India , did not allow the

foreign companies to enter the market and import were tightly controlled .these regulatory maze , before the economic liberalization , made the business easier for local player to have a seller market . Customer in India was forced to wait 2 years to buy a scooter from Bajaj. The CEO of Bajaj commented that he did not make a marketing department, only in dispatch department. By the year 1990, Bajaj has a waiting list that has twenty six times of annual output for scooter.The motorcycle segment has the same long wait time with three manufacture; Royal Enfield, ideal Jawa and Escorts. Royal Enfield made a 350cc bullet wit the only four – stroke engine at that time and took the higher end of the higher end of the market but , there was little competition for there costumer . Ideal Jawa and escorts took the middle and lower end of the market respectively.

In the mid-1980s the Indian government regulation changed and permitted companies to enter the Indian through minority joint venture. The two wheeler market with for indo Japanese joint venture: Hero Honda

TVS S Suzuki, Bajaj Kawasaki and kinetic Honda. The entry of these foreign companies changed the Indian market dynamics from the supply side to demand side with a large selection of two wheelers on Indian market customer started gain over the product they bought and raise the higher customer expectation.

Hero entered the joint venture for technical and financial participation with one of the largest automotive makers

Honda motors company limited of Japan, in 1984 for the manufacturing of 100cc motor cycles in India.

Group companies Hero corporate service limited – Hero mind mine –munlal

In 1984-1985 HHML came in existence by collaboration of hero motor limited and Japans Company Honda motors limited for the first 100cc with four stroke motorcycle is made by Hero Honda motor limited in India.

Company profile

Hero is the brand name used by the Munjal brother in the year 1956 with the flag ship company hero cycle’s .the two wheeler manufacturing business of bicycle component had originally started in the 1940’s and turned in the world largest bicycle manufacture today. The Munjal run their own steel make free wheel and other critical bicycle component and and have diversified in to different like product design. the Hero group philosophy is; “ to provide excellent transportation to the common man at easily available and affordable and to provide the total satisfaction in all its sphere of activity “he hero group has a passion for setting the higher standard and engineering satisfaction is the prime motivation way of life and work culture of the group .

In year 1984 Mr. Brijmohan lal munjal , the chair man and managing director of hero Honda motors , headed an alliance between the Munjal family and Hero Honda company LTD HHM mission statement is :” we, at hero Honda , are continuously striving for synergy between technology , system and human resources to provide product and services that meet the quality price and aspirations of the customer”.

Product profile

Price list

Model PRICE RTO INS TOTAL

CD-Dawn 32900 1699 845 35444

CD-DLX(MAC) 36650 1850 918 39467

PLEASURE 36740 1850 912 39502

SPL.NXG 39550 2050 999 42599

SPL.PLUS 41250 2099 999 42599

PASION PLUS 43750 2105 1005 46905

SUP.SPL.(RING) 44150 2199 1024 47373

SUP.SPL(MAC) 44900 2399 1109 48408

GLR.(MAC/SELF) 46250 2250 1055 49555

GLR.(DISK/SELF 48250 2350 1086 51686

CBZ.EXE (SELF/DISK) 57500 2750 1218 61468

HUNK 57000 2725 1216 60941

KARIZMA 73900 3400 1446 78746

CD-DELUXE(RING) 35400 1800 899 38098

Colors in Vehicle

GLAMOURCandy blazing red, cloud silver metallic, tornado metallic grey, impulse orange metallic, excellent blue metallic.

CD DELUXECandy blazing red, cloud silver, candy Tahitian

blue, amaranth maroon, cool mint grey.

SPLEDOUR black candy red , blaze , boon silver, metallic, sierra metallic, granti blue metallic.

PLEASURE Orange , Candy blazing red, grey silver,

Tahitian blue metallic.

CD DAWN Black ,maroon, red

CD 100SS Candy ruby red black , amazing blue metallic,green metallic.

PASSION PLUS Moon yellow, cloud silver ,amaranth maroon, Tahitian blue, Candy blazing red,black with

purple strips. KARIZMA Green , sky blue black metallic, yellow shade.

Hero Honda’s Marketing Strategies in India

New Delhi, October 21, 2008: Hero Honda Motors Ltd (HHML), the world's largest two-wheeler company for seven consecutive years, today firmly reiterated its undisputed leadership in the domestic two-wheeler market with impressive bottom line growth for the second quarter (Q2) – July to September - of this financial year (FY) 2008-09.

Even as the industry continued to face tough market conditions on

account of uncertainty over interest rates and overall credit squeeze, the company reported 50 per cent growth in profit after tax (PAT) at Rs 306.30 crore for the second quarter. Hero Honda's profit after tax in the corresponding period last fiscal (July - Sept, 2007-08) stood at Rs 204.33 crore.

Total turnover (Net sales & Other Operating income) grew to Rs 3202 crore, a growth of 35.6 per cent over Rs 2361 crore recorded in the corresponding period last fiscal. The company has recorded an EBIDTA margin of 13.58 per cent in the quarter. The EBIDTA margin in the previous quarter (April - June '08) was 12.20 per cent.

The strong financial performance is in line with the company's better-than-industry top line growth. After posting a growth 11.38 per cent in the first quarter, the company kicked off the second quarter with a 39.8 per cent growth in sales in the month of July, and followed up with 26.8 per cent growth in August and 22.4 per cent in September. Hero Honda consistently keeps growing its share in the domestic motorcycle market, and currently enjoys over 55 per cent share.

Dr. Brij Mohan Lall, Chairman, Hero

Honda Motors Ltd,

Said "We are happy with our financial performance. It gives immense joy to see this kind of results in the 25th year of our company. I wish to thank all our stakeholders – customers, associates, dealer friends,

ancillaries and also our joint venture partners Honda Motors Co – for their continuous support."

Mr. Pawan Munjal, MD & CEO, Hero Honda Motors Ltd, said "Our numbers speak for themselves. Even in this volatile and competitive environment, our top line continues to outpace the industry growth, our market share is at an all time high, and the financial balance sheet is a delight – all the factors which form the hallmark of a resilient company with cutting-edge management. We will continue to keep innovating – in bringing in technologically-superior products, in our network expansion, in brand building, in our financial management, and in our communication."

"Going forward, we will have to keep a close watch on the commodity prices movement, and other factors such as inflation, interest rate scenario and availability of retail finance. These factors will play a crucial role in the industry growth in the subsequent quarters," he added.

Mr. Pawan Munjal, Managing Director, Hero Honda Motors Ltd ,

“The year 2007-08 has seen a leadership performance from us. Despite the industry slowdown, we have been able to manage positive growth thereby taking our share in the domestic motorcycle market upward of 52 per cent. At the end of the financial year, I would definitely like to thank our millions of customers across the country, who have made it possible. We will continue to focus on our customers and they can surely look forward to many more launches and various initiatives in the coming year.”

HHML’s good run through the industry slump in 2007 has been possible due to the company’s multi-focal strategy of bringing in new models and variants across segments, supporting them with innovative communication across media, leveraging properties such as cricket and entertainment for brand building and augmenting its distribution network

(HERO HONDA CONSOLIDATES MARKET LEADERSHIP WITH IMPRESSIVE GROWTH OF

15% IN MARCH’09FOR FY 2008-09, HERO HONDA OVERTAKES PREVIOUS FISCAL’S SALES TALLY, EVEN AS DOMESTIC MOTORCYCLE INDUSTRY DECLINES BY MORE THAN 10 %)

HERO HONDA CONTINUES TO CONSOLIDATE MARKET LEADERSHIP WITH 27 PER CENT GROWTH IN AUGUST SALES

New Delhi, Tuesday, April 21, 2009: Reports robust sales of 305,516 units during the month

Mr. Anil Dua, Sr. Vice President (Marketing & Sales), Hero Honda Motors Ltd,

“Our strategy is yielding results. The strategy hinges on creating winning brands across segments, investing in brand building, exploring untapped markets in rural and upcountry areas while consolidating urban presence and rapidly expanding our network. However, the industry continues to face uncertainty on account of high interest rates and overall credit squeeze. The festival month of October is going to be crucial in determining the overall outlook of the industry for the year.”

Key Hero Honda brands continue to drive strong volumes across segments - CD Deluxe in entry segment, Glamour, the new Splendor NXG, Splendor + and Passion Plus in deluxe segment, and Hunk, CBZ X-treme and Karizma in the premium segment.

Hero Honda’s scooter Pleasure has also been growing strongly, with more than 12,000 units being sold in August this year.

New Delhi, Tuesday, April 21, 2009: Highlights

Corporate performance: • Consolidated over 50% share in the domestic motorcycle market

• Reported highest ever sales in a month in October 2007 (365,022 units)• Crossed half a million retail sales in the festive season• Closed calendar year 2007 with sales of over 33 lakh two-wheelers

Mr. Pawan Munjal, Managing Director & CEO, Hero Honda Motors Ltd.

said, “Given the industry slowdown scenario, we are very enthused by our robust financial numbers for the third quarter. However, this was not unexpected. We had undertaken some strategic initiatives since the beginning of this fiscal, including a conscious effort to rationalize costs across the board, and its results are now visible. Our bottom line has seen a consistent

improvement, and we have been able to demonstrate that it is possible to keep gaining market share while maintaining a robust bottom line.

“With input costs softening and our sharp focus on cost efficiencies, we should be able to further improve upon our financial results,” he added.

Hero Honda's strategy for aggressive top line growth through new product launches, brand building initiatives backed by innovative communication has resulted in market share gain across every segment. Indeed, Hero Honda’s share in domestic motorcycles market has been growing upward of 50 per cent, despite the slowdown in the two-wheeler industry.

SEGMENTATION, TARGETING & POSITIONING

From the current segmentation, targeting & positioning and consumer surveys we found that our client has targeted the following segments:

Congested areas of urban cities.

Males/Females between the age group of 18-36

Middle class people , mostly officials & executives

The client analysis from our questionnaire it was found that our client has targeted the right segment

HHML & TVS is overlooking one feature in bike which is its low maintenance cost and reliability (i.e. less chances of breakdown) which

is absent in its competitors. Therefore, in order to meet the sales target, two options are available with the client; one is to redesign the bike and second is to reposition the bike as “Bike with one time investment”. Since redesigning of bike may involve a big task and huge investment therefore we recommended repositioning the bike.

The gap between motorcycles sold by Hero Honda and its closest rival is approximately 1 m units (23% of industry size). One of the reasons for the tremendous performance of Hero Honda is the significant increase of share of motorcycles in the two-wheeler segment, from 42% in FY99 to 77% in FY04. No doubt, that the shift in preference of Indian populace from scooters and mopeds towards motorcycles has facilitated the growth of Hero Honda. However its performance vis-à-vis industry indicates that the performance of Hero Honda was better than the industry peers, barring two years. In the seven-year period ending FY04, it has achieved a CAGR of 30% in two-wheeler volumes against 11% of the industry.

Key factor of marketing strategy“India and Bharat co- exist today. India comprises of fast growing cities and town; Bharat is made up of villages entering the economic main stream. We seek to walk & march with both India and Bharat”

Positioning Segmentation

Targeting

Strong Fundamentals

The company has clarified about its intention of

setting a third plant in addition to its existing two

plants. The company has embarked upon a green

field expansion plan and has earmarked Rs 2 bn for

the same. It should be noted that the company has a

strong cash flow position, it generated Rs 9 bn from

operation in FY04 and is virtually a debt free

company.

EXAMPLES Super Splendor

This Bike comes with 125 cc new generation quantum core engine with an output of 9 bhp (6.7 kw). Its relaxing seating arrangement with other comfort features like less strain while clutching and declutching, low noise and less vibration engine etc, makes it more market friendly bike.

For the convenience of the biker, there are few features included here are trip meter, peep hole, large utility box etc. Some safety features included here are pass switch and push cancel indicator switch, muffler with heat shield etc.

Splendor +

4 stroke single cylinder lair-cooled, OHC engine delivers power of 5.5 Kw (7.5PS) @ 8000 rpm . Running with the maximum mileage of 85 kmph, this bike is giving the optimum satisfaction for long journey. Its double cradle frame gives the steadiness in biking. Its wider 1230 mm wheelbase provides the proper base for safer riding.Lighting fitting included in it like multi reflector with halogen bulb makes the biking secured at every time.

Splendor NXG

Splendor NXG comes with a new engine and pioneering features and combines stylish looks with a high performance engine. It features trapezoidal multi -reflector headlamps which is powerful even at low speeds. This is achieved by powerful battery which powers the DC high beam in the headlamp and its strength is not dependent on the engine rpm. Circuitry for the low beam and pilot lamp has also been enhanced for low variation in intensity arising from changes in the engine rpm.

Segmentation of Hero Honda

Splendor: -

Geographical Segmentation

Geographic Segmentation calls for division of the market into different

geographical units such as nations, states, regions, countries, cities, or

neighborhoods. In the South Asian context, geographic segmentation

assumes importance due to variations in consumer preferences and

purchase habits across different regions, across different countries, and

across different states in these countries.

Demographic Segmentation

In Demographic Segmentation, we divide the market into

groups on the basis of variables such as age, family size,

family life cycle, income, occupation, education, religion, race,

generation, nationality and social class. One reason

demographic variables are so popular with marketers in that

they’re often associated with consumer needs and wants.

Another is that they’re easy to measure. Even when we

describe the target market in non-demographic terms (say, by

personality type), we may need the link back to demographic

characteristics in order to estimate the size of the market and

the media we should use to reach it efficiently.

Psychographic Segmentation

Psychographics is the science of using psychology and demographics to better

understand consumers. In psychographic segmentation, buyers are divided into

different groups on the basis of psychological/personality traits, lifestyle, or values.

People within the same demographic group can exhibit very different psychographic

profiles. Values and lifestyles significantly affect product and brand choice of

consumers. Religion has a significant influence on values and lifestyles. The strict

norms that consumers follow with respect to food, habits or even dress codes are

representative examples in this regard.

The four groups with higher resources are:

1. Innovators: - successful, sophisticated, active, “take- charge” people with high

self-esteem. Purchases often reflect cultivated tastes for relatively upscale, niche-oriented

products and services.

2. Thinkers- mature, satisfied, and reflective people who are motivated by ideals

and who value order, knowledge and responsibility. They seed durability, functionality,

and value in products.

3. Achievers- successful, goal-oriented people who focus on career and family.

they favor premium products that demonstrate success to their peers

4. Experiences- Young, enthusiastic, impulsive people who seek variety and

excitement. They spend a comparatively high proportion of income on fashion,

entertainment and socializing.

The four groups with lower resources are:

1. Believers- conservative, conventional, and traditional people with concrete beliefs.

They prefer familiar products and are loyal to established brands.

2. Strivers- trendy and fun-loving people who are resource constrained. They favor

stylish products that emulate the purchases of those with greater material wealth.

3. Makers- Practical, down-to-earth, self-sufficient people who like to work with the

hands. They seek products with a practical or functional purpose.

4. Survivors- Elderly, passive people who are concerned about change. They are

loyal to their favorite brands.

Behavior Segmentation: -

In behavioral segmentation, marketers divide buyers into groups on the

basis of their knowledge of, attitude toward, use of, or response to a

product.

Decision Roles:

People play five roles in a buying decision: Initiator, Influencer,

Decider, Buyer and User. Recognition of the different buying roles and

specification of the people who play these roles for specific products and

services are vital for marketers. This is especially useful for designing the

communication strategy.

Behavioral Variables:

Many marketers believe behavioral variables-occasions,

benefits, user status, usage rate, buyer readiness stage, loyalty

status, and attitude-are the best starting points for constructing

market segments.

Market Targeting: -

Effective Segmentation Criteria

To be useful, market segments must rate favorably on five key criteria:

Measurable, the size, purchasing power and characteristics of the

segments can be measured.

Substantial, The segments are large and profitable enough to serve.

A segment should be the largest possible homogenous group worth

going after with a tailored marketing program. It would not pay, for

example, for an automobile manufacture to develop cars for people

who are less four feet tall.

Accessible, The segments can be effectively reached and served.

Differentiable, The segments are conceptually distinguishable and

respond differently to different marketing-mix elements and

programs. If married and unmarried women respond similarly to a

sale on perfume, they do not constitute separate segments.

Actionable, Effective programs can be formulated for attracting and

serving the segments.

Evaluating and Selecting the Market Segments

Single- Segment

Concentration

M1 M2 M3

P1

P2

P3

Selective Specialization

M1 M2 M3

P1

P2

P3

Product Specialization

M1 M2 M3

P1

P2

P3

Market Specialization

M1 M2 M3

P1

P2

P3

Full Market Coverage

M1 M2 M3

P1

P2

P3

Single Segment Concentration:-

The farm equipment division of Mahindra & Mahindra concentrates on tractors, primarily

targeted at agricultural markets. The Zodiac brand concentrates on formal shirts for

executives and professionals. Especially hospitals focus on specific therapeutic areas

such as cancer care, heart specialty, neonatal care and gynecology. Through concentrated

marketing, the firm gains a strong knowledge of the segment’s needs and achieves a

strong market presence. Furthermore, the firm enjoys operating economies through

specializing its production, distribution and promotion. If it captures segment leadership,

the firm can earn a high return on its investment.

Selective specialization: - A firm selects a number of segments, each

objectively attractive and appropriate. There may be little or no synergy among the

segments, but each promises to be moneymaker. This multi segment strategy has the

advantage of diversifying the firm’s risk. When Procter & Gamble launched crest White

strips, initial target segments included newly engaged women and brides to be as well as

gay males.

Product specialization: - The firm makes a certain product that it sells to

several different market segments. A microscope manufacturer, for instance, sells to

university, government, and commercial laboratories. The firm makes different

microscopes for the different customer groups and builds a strong reputation in the

specific product area. The downside risk is that the product may be supplanted by an

entirely new technology.

Hero Honda used Product Specialization for target market of Hero Honda

Splendor.

Market specialization: - The firm concentrates on serving many needs of a

particular customer group. For instance, a firm can sell an assortment of products only to

university laboratories. The firm gains a strong reputation in serving this customer group

and becomes a channel for additional products the customer group can use. The downside

risk is that the customer group may suffer budget cuts or shrink in size.

Full market coverage: - The firm attempts to serve all customer groups with

all the products they might need. Only very large firms. Such as Microsoft (software

market), General motors’ (vehicle market), and coca-cola (nonalcoholic beverage

market).

Additional considerations

Two other considerations in evaluating and selection segments are segment-

by-segment invasion plans and ethical choice of market targets.

Segment-by-segment invasion plans: -

A company would be wise to enter on segment at a time. Competitors must

not know to what segment(s) the firm will move into next. Segment-by-

segment invasion plans are illustrated three firms, A, B, and C, have

specialized in adapting computer systems to the needs of airlines, passenger

transport, and goods transport companies. Company A meets all the

computer needs of airlines.

Ethical choice of market targets: -

marketers must target segments carefully to avoid consumer backlash.

Some consumers may resist being labeled. Singles may reject single. Serve

food packaging because they don’t want to be reminded they are eating

alone. Elderly consumers who don’t feed their age may not appreciate

products that identify them as “old” market targeting also can generate

public controversy.

Positioning: -

Positioning is the act of designing the company’s offering

and image to occupy a distinctive place in the minds of the

target market, the goal is to locate the brand in the minds of

consumers to maximize the potential benefit to the firm. A

good brand positioning helps guide marketing strategy by

clarifying the brand’ essence, what goals it helps the

consumer achieves, and how it does so in a unique way.

Everyone in the organization should under- stand the brand

positioning and use it as context for making decisions.

Competitive Frame of Reference

A starting point in defining a competitive frame of reference

for a brand positioning is to determine category

membership-the products or sets of products with which a

brand competes and which function as close substitutes.

Competitive analysis will consider a whole host of factors-

including the resources, capabilities and likely intension of

various other firms-in choosing those markets where

consumers can be profitably served.

Product:-

Core Product: -

The core product or benefit of Hero Honda Splendor is Travelling and saving the time by

reach on desire place at right time.]

Basic Product: -

The basic product of Hero Honda splendor are Engine, Handle, Shockers, Wheels, Gear

box and chain set etc.

Expected Product: -

The expected products of Hero Honda splendor are: -

1. It should be 5 gear boxes.

2. It should be 90 Km/l mileages.

3. It should be 120 Km/hour Maximum speeds.

4. It should be disk brake or power brake.

5. It should be steel body.

6.

Augmented Product: -

The augmented products of Hero Honda Splendor are: -

1. It provides monthly check up for decrease the pollution.

2. It provides fast service of the product.

Pricing Strategy: -

Penetration Pricing: -

The price charged for products and services is set artificially

low in order to gain market share. Once this is achieved, the

price is increased. This approach was used by France

Telecom and Sky TV.

Hero Honda Used penetration pricing strategy because that

time Hero Honda use National Segment and low income

persons so they used penetration strategy.

Price Skimming: -

Charge a high price because you have a substantial

competitive advantage. However, the advantage is not

sustainable. The high price tends to attract new competitors

into the market, and the price inevitably falls due to

increased supply. Manufacturers of digital watches used a

skimming approach in the 1970s. Once other manufacturers

were tempted into the market and the watches were

produced at a lower unit cost, other marketing strategies

and pricing approaches are implemented.

Premium pricing, penetration pricing, economy pricing, and

price skimming are the four main pricing policies/strategies.

They form the bases for the exercise. However there are

other important approaches to pricing.

Promotion: -

Below the Line Promotion: -

‘Below The Line is a common technique used for touches and

feel products. Those consumer items where the customer

will rely on immediate information than previously

researched items. Below The Line techniques ensure recall

of the brand while at the same time highlighting the features

of the product.

Above The Line Promotion: -

Above the line (ATL) is an advertising technique using mass

media to promote brands. Major above-the-line techniques

include TV and radio advertising, print advertising and

internet banner ads. This type of communication is

conventional in nature and is considered impersonal to

customers. The ATL strategy makes use of current traditional

media: television, newspapers, magazines, radio, outdoor,

and internet.

Hero Honda used Above the Line Promotion because in the

Above the Line promotion co. members used advertisement

through Radio, T.V., Newspaper and Other media

communications.

Place: -

Geographical Placing: - Geographical placing of the product has divided into 4 markets and these are: -

1. Local

2. National

3. Regional

4. International

Hero Honda used National Market for sale the Hero Honda Splendor.

Considering all facts of marketing in a unique way for

proper and efficient definition of marketing.

Marketing threats

MANAGING RISK IS HALF THE BATTLE WON

RISKS AND CONCERNS

• Slowdown: Sales in the lucrative premium two wheeler segment (150 cc and above) have been affected by the economic slowdown; a quick return to robust growth is unlikely, and this could affect Hero Honda's near term plans for an increasedpresence in this segment.

• Interest rates: Lending rates have started softening but effective lending rates for the two-wheeler industry remain high on account of risk aversion by banks. However, Hero Honda has de-risked its business by focusing on segments which are not too dependent on financing. Still, if interest rates for two-wheelers continue to remain high and the overall credit-squeeze persists, it is likely to adversely impact the company's efforts in realizing its full growth potential.

• Inflation: After climbing to double digits in the first half, inflation growth was close to zero per cent by year-end. However, high fiscal deficit and rising food prices could push up inflation again during the year. Rising inflation may limit the downwardtrend in interest rates.

• Increasing competition: Several two-wheeler companies introduced new models in the lucrative premium segment; over time this could impact the profitability of this segment. At the same time, the expected fresh competition in the 100 cc segmentin 2010 poses a challenge to the company's stronghold on this segment.

• Input costs: Prices of critical inputs came down during the year thanks to lower commodity prices. However, prices may be close to bottom levels, and may start perking up in the second half of the coming year if there is an economic revival.

HERO HONDA'S PERFORMANCE

SETTING THE BENCHMARKHero Honda was the torchbearer for the two-wheeler industry during the year in review. It sold more two wheelers during the year than the combined volumes of the second, third and fourth placed competitor.Overall, the company sold 3.72 million two-wheelers, up 12 per cent. Motorcycle sales in the domesticmarket, which account for more than 95 per cent of Hero Honda's sales, were up 11 per cent.

During the year, the company also turned in a rollicking performance with its scooter portfolio, with a 49 percent growth in domestic sales to 156,210 units. This performance allowed Hero Honda to increase its sharein the domestic scooter market by more than three percentage points. Hero Honda's performance in the two-wheeler industry was the only standout performance during the year amongst the large players. Without Hero Honda's numbers, the two wheeler industry growth would have been marginal.

These prime constitutes a proper set up of the marketing program in order to get the desired output.

Planning

controlobserve

Products of the company

Bibliography

WEBSITE:

WWW.HEROHONDA.COM WWW.HEROCYCLES.COM WWW.WEKIPEDIA.COM WWW.TIMESOFINDIA.COM HTTP://WWW.THEHINDUBUSINESSLINE.COM HTTP://ECONOMICTIMES.INDIATIMES.COM/SEARCH.CMS WWW.INDIAINFOLINE.COM HTTP://WWW.FADAWEB.COM/INDIA BOOKS:

AUTOCARE

OVERDRIVE

INDIA AUTO

Hero Honda is trying to accomplish in its latest advertisement for the entire range of Hero Honda motorcycles, which tries to engrave the brand Hero Honda in hearts across the country. “Desh ki Dhadkan” is the catch line.

Product recall: By everyone. The farmer in Punjab. The fisherman in Kerala. The trader in Mumbai. And the worker in Bengal. Imagine having a place in their hearts. Imagine echoing their heartbeats. Imagine being part of the great Indian fabric.That's the great Indian dream. Of every company.And it is what Hero Honda is trying to accomplish in its latest advertisement for the entire range of Hero Honda motorcycles. Says Navroze D. Dhondy, CEO, Percept Advertising, which made the 60-second television commercial, "We wanted to say that Hero Honda was more than a bike. It was a friend, something that has been part of your life, something that has shared your best moments."

So who's the target? Everybody. The models in the advertisement range from children to old people. The message? Everybody needs a Hero Honda. In the shape of a CD100, or a CBZ, or a Splendor, or a Street. "Desh ki Dhadkan" is the catch line. "Dhak, Dhak," the message. "We echo the heart beat of every Indian," the claim. "We were looking for something new. We wanted to tell the viewer that we were way above the rest," says Atul Sobti, senior vice-president, marketing, Hero Honda.

Did somebody say new?

The India theme was plugged by Bajaj Auto with its Buland Bharat ki Buland Tasvir. Then there was Apollo Tyres, Reynolds, Bharti Telecom… A route numerous companies have treaded time and time again.

"This is a campaign by the right company at the right time. We waited till we were actually the heartbeat of India," says Sobti. "That's why we went in for an umbrella kind of advertising," adds J. Narayan, advertising manager, Hero Honda. "We wanted to communicate two things. Our market leadership and the joy of ownership. We wanted to reach our audience at a very emotional level."

Market research carried out all over the country for three months gave the creative team at Percept the idea for the ad. "Everybody kept talking about how Hero Honda motorcycles were part of their lives," says Dhondy.That was also the message that the company wanted to communicate. A slew of product launches had glutted the market, and Hero Honda, the market leader in the motorcycle segment with a 47 per cent share, wanted to get out of the trap of product oriented or range-oriented marketing. This was the brief that was given to Percept advertising. And Percept says that the advertisement was the first and only presentation it had to make.

The advertising is in tune with Hero Honda's ambition for the Indian market. Worldwide, Honda's Splendor is the largest selling 100-cc bike. It is a success that the company hopes to repeat in India as it strives to attain leadership of the two-wheeler segment where it currently has a 26 per cent market share.

But competition is harsh. Bajaj rolls out 87,000 two-wheelers every month. Hero Honda rolls out 86,000 and is planning to take that figure up to 90,000. At the same time, the company realises that further growth in the market is tough. The competition is nipping at Hero Honda's heels. Yamaha, Suzuki and Kawasaki are the closest, while the lower end of the market is held by brands such as TVS, Escorts and Suzuki.

The market plans reflect the aspirations of the company. Hero Honda came in 1992, and has grown spectacularly. According to a survey, between 1992-93 and 1998-99, the

sales volume of Hero Honda, with a 37.5 per cent market share in the motorcycle segment, increased at a compound rate of 25 per cent per annum. By virtue of better sales performance during 1998-99, the company recorded nearly a 49 per cent jump in its operating profit and its net profit improved by over 58 per cent compared with 52 per cent the previous year. Hero Honda achieved this feat despite higher total expense, depreciation and tax burden, and currently controls 47 per cent of the market.

That leap, from material reality to emotional power, from the mind to the heart, is what Hero Honda is aiming at with the new ad. Will heartbeat translate into more market share?

In this interview, Brijmohan Lall, chairman of motorcycle manufacturer Hero Honda Motors, Ltd., and his son, Pawan Munjal, the company's managing director and CEO, speak about the part innovation has played in the company's rise to the top.

Innovation Helps Hero Honda Ride to No. 1 Spot

A question for motorcycle fans around the world: Where is largest manufacturer of motorcycles located? Japan? Germany? Italy? The answer is India, where Hero Honda Motors became the largest single-entity manufacturer of two-wheelers in 2001, shipping 1.4 million motorcycles -- seizing a dominant 48-percent share of the domestic market in the process. In 2002 it plans to increase shipments further to 1.8 million.

The New Delhi-based company is a joint venture between India's Hero Group and Japan's giant Honda Motor Company. Established in 1984, it came about when Honda chose Hero Cycles as its partner to set up a motorcycle operation in India after the Indian government relaxed foreign investment and import regulations on two-wheel motorized technology up to 100 cc. Hero Cycles was then, and still is, the world's largest maker of bicycles, selling over 5 million cycles annually. Another Hero company, Hero Majestic, had also established a moped manufacturing business. This combination of mass-production know-how and a large distribution network proved crucial to Honda's decision to join Hero, despite being ardently courted by a number of other Indian manufacturers.

"Honda saw that we had similar business philosophies," says Brijmohan Lall, chairman and founder of the Hero Group of companies. "We were careful with capital investment, and made efficient use of equipment and manpower. Honda also saw how we had created a strong relationship with the entire stakeholder community, whether it was with our employees, our dealers or our customers. So it all clicked."

From the beginning, Brijmohan Lall made the bold decision to bet on four-stroke motorcycle technology,

when two-stroke scooters were by far the most popular form of transport in India at the time. After talking with potential customers around the country, Hero engineers worked with Honda to come up with a design for an extremely fuel-efficient two-wheeler adapted for the Indian environment. In 1985 Hero launched its first motorcycle, the CD100, which gave 80 km to the liter.

"The four-stroke engine is more fuel efficient and cleaner," says Brijmohan Lall. "There was nothing like the CD100 being built in India. Scooters were not getting more than 40 km to the liter. So this was a breakthrough product, and we rode on its success in the early years."

Hero has since fine-tuned its process for finding out just what a diversified customer base across the length and breadth of India wants. It does this by regularly conducting vast market surveys that question up to 70,000 people at a time. What comes back are specific customer requirements and preferences. These are then translated by Hero's marketing and R&D teams into basic specifications, which are sent on to Honda's R&D group in Japan. Honda comes up with a prototype design, and Hero takes this back into the market to sound out customers for possible further refinement, until a winning design is eventually arrived at for Hero to build.

Reaching Out With Mobile Workshops

Given the country's one billion population and large area, it is impractical for Hero to establish sales and maintenance outlets in every town. So it's come up with the fresh idea of mobile service workshops: a complete workshop incorporated into trucks that travel predetermined routes, visiting small towns and villages where existing Hero customers reside.

"Customers are informed a workshop will be coming, so that they don't have to travel hundreds of kilometers to an authorized workshop for servicing or repairs," explains Pawan Munjal, who, as managing director and CEO of Hero Honda, has taken over the daily running of the company from his father.

These mobile workshops also double as sales outlets and spare-part distributors. The concept has been so successful that some of Hero's largest distributors have adopted the idea and send out their own workshops to supplement Hero's efforts.

At the same time Hero has brought innovation into its authorized dealerships. To reduce the amount of manual labor involved in repairs and maintenance, it has introduced pneumatic tools to replace hand tools, while hydraulic ramps now position bikes for easy inspection. It has also installed automatic ventilation systems in repair shops to remove engine exhaust fumes.

It doesn't stop there. Customers can wait in air-conditioned waiting rooms where TVs and water coolers have been installed, while in a few key dealerships, they can enjoy a cup of tea and surf the Internet in Hero cyber cafes. What's more, in certain larger dealerships, customers can actually watch ongoing repairs through glass-fronted workshops. "This gives customers more confidence in our service and support," says Pawan Munjal. "Normally, workshops are dirty areas and companies don't want their customers to see them. We've installed glass walls so customers can see the cleanliness and the type of work that's going on."

Passport to Customer Loyalty

Last April Hero launched the Hero Honda Passport, a program designed to increase customer loyalty. Customers who sign up are issued "passports," and they receive points when purchasing parts or referring new customers. "This helps us in getting to know our customers better," says Pawan Munjal. "We have 600,000 members in the program, and we also organize events where they can meet sports stars and film stars. This creates loyalty in our customers."

But to create loyal customers, a company must first have loyal employees. "Fortunately, Honda has a good name, Hero has a good name, so we attract very good people," says Brijmohan Lall, who at 79, still continues to put in a full day's work as chairman. "With our long experience we have created a friendly atmosphere. My door is never closed, so anyone can walk in at any time."

As a reward for becoming the world's largest motorcycle manufacturer, the Munjals took the managers (along with their wives) who had contributed most to this success on a vacation to Switzerland last year. "We conducted a seminar on top of a Swiss mountain to symbolize our success," says Brijmohan Lall. "We also invited a professor from Harvard University to come and give us a talk on how we must now compete and sustain ourselves at this new level."

Hero Honda's IT Strategy

With the Indian motorcycle market opening up to overseas competitors and more fierce domestic competition, Hero Honda decided it needed to overhaul its various computer systems and create a single integrated IT system. Rather than continue to use computers merely for data processing, it sought to use IT to integrate business operations such as product planning, materials resource planning, financials and sales and distribution. It was also looking to automate its internal supply chain, reduce overall costs, and create a transparent information system that would help managers make decisions more quickly. To do all this it teamed up with SAP in June 2000 to implement the system, and went live in February 2001.

"Now we can look at the same information, when earlier we had three or four different versions, which didn't always match," says Pawan Munjal. "Now we (the managers) can all look at the same costs, for example, because all the information is up there on the screen. Nothing is hidden, everything is transparent. So there are no arguments over figures now, which used to waste time and hold up decision-making."

There are improvements on the factory floor too, now that manufacturing has been brought into the new IT system. In the past there was no accurate way of checking the consumption of raw materials and inventory in general. So excess stocks in some areas became an inevitability. "Now we know what should be there and what is there," says Pawan Munjal. At the same time, defective parts and materials are no longer accepted, forcing suppliers to upgrade their quality.

"The next step is to get dealers and suppliers online, so that orders can be taken directly by the suppliers," says Pawan Munjal. This will eliminate any wastage that is still left in our supply chain."

In upcoming issues of the SAP 30th Anniversary Leadership Interview series, we learn how experience, innovation and vision are driving other major Asian corporations to be leaders in their fields.

Q1. How do you choose your management team?

A1. Brijmohan Lall: "It's a matter of experience. With over 50 years experience (in the Hero Group) we have built up a good team of managers promoting from inside the company. They in turn have created a very conducive environment to work in. This is a friendly company. In Hero Cycles, I still have people who were with me from the beginning and who are grandfathers today."

Q2. What do you do when market research doesn't reflect reality?

A2. Pawan Munjal: "This happened when we launched the Joy motorcycle in April 2000. After six months we found the market was not as receptive to the product as we had expected. So we talked directly with our customers and found that they wanted some specific changes and a different pricing structure. This April we launched the Dawn, incorporating those changes and a new pricing strategy. In the first three months since the launch, we have sold 10,000 units a month and have now reached 13,000 monthly--which is way ahead of our forecast."

Q3. Do you have a personal philosophy?

A3. Brijmohan Lall: "Yes. Make things happen!"

It is just a matter of time when Honda will exit completely from the Hero Honda joint venture. The promoters of the Hero Honda group are now working on a new branding strategy for Hero Honda, which will go live once Honda leaves. Honda’s name will be

dropped from all future communications after their exit. Come to think of it, Hero Karizma, Hero Passion sound so lackluster and even the owners of HH know that. Hence they might just drop the name of the company completely and instead focus on individual product names (HUL style). The company will also get a new logo.

Hero Honda Motors has a technology tie-up with Honda till the end of 2014. What happens after that is still a question mark and hence the company plans to showcase its technological innovations to ensure that customers keep faith in them even after Honda exists. Hero Honda will now pump a large chunk of money into research and development activities in order to ensure they don’t get stranded after they go solo. Although Kawasaki’s exit really didn’t dent Bajaj as the latter was never known as Bajaj-Kawasaki.

CAMPUS ROCK IDOLS 07 

Hero Honda Motorola Campus Rock Idols, India’s largest inter-college rock music competition

is all set for the forth edition. The annual independent competition “Campus Rock Idols” for

amateur bands at the campus level, in this third consecutive year, offers an ultimate experience

for bands to perform on a professional, technical and evolved production offering.

DNA and Sports Media Pvt Ltd are the organizers and event managers of Campus Rock

Idols which debuted in 2004 is already India’s biggest annual independent college music

festival/completion. CRI covers multiple cities and on an average involves 300 colleges and 275

bands in a two-three month rock music extravaganza.

Campus Rock Idols 07 will be held across India in 10 cities over a 2-month period, commencing

from October 27 2007, and culminating on December 2, 2007 with a grand finale in Delhi.

Hero Honda, keeping in mind the appeal of music with the youth continues to

communicate their brands through this unique initiative.

The regional events will commence in October 2007 in Indore, Hyderabad, Delhi, Manipal,

Ahmedabad, Bangalore, Shillong, Kolkata and Pune respectively. Bangalore, Hyderabad,

Manipal form the South Zone for the music fest. In the West Zone, the regional events will take

place in Pune and Ahmedabad. Jaipur, Delhi and Chandigarh form the three cities in the North

Zone. In the East Zone, the regional events will be in Calcutta and Shillong.

On completion of the regional events, the regional finals will be held at Delhi, Bangalore,

Kolkata, and Pune. The participants will be the first two winning bands from each of the regional

events including the metro events. The chosen bands will be provided with travel and

accommodation for the regional finals from the various campuses.

No other city can be more rocking for the finals than Delhi. The winning college band will

become the Hero Honda “CAMPUS ROCK IDOL”

'MTV Hero Honda Roadies' 5.0 Goes International 

 

Play up your dark side in the unknown terrains of Thailand & Malaysia on the mean machine!!

Three countries, foreign languages, unknown cultures & twisted people - 'MTV Hero Honda Roadies'

5.0 is here and it's bigger and nastier. This year, MTV Hero Honda Roadies 5.0, India 's longest

running and most popular adventure-reality show, is going to take you through the unpredictable

terrains of Thailand & Malaysia .

'MTV Hero Honda Roadies' is back for the 5 th consecutive season. If being mean, unfair and

vindictive comes easy to you then push your way to the front of the line for the chance to travel the

world on a mean machine - Hero Honda Karizma! This year the show will follow 6 girls and 7 boys as

they battle their way through the India leg of the journey from Goa to Chennai and if they survive,

through the International leg from Bangkok to Kuala Lumpur ! But remember there are no free

tickets - if you thought last year was full of surprises, get ready to be shocked this year.

Says Sandeep Dahiya, Associate Vice President, Communications and Corporate Affairs, - MTV

Networks India, " MTV Hero Honda Roadies has been the longest running adventure reality series on

Indian television and among the only ones that has grown in popularity, scale and viewership over

previous seasons."

In order to make it to the show, contenders will have to undergo and pass auditions in any of the five

cities - Kolkata (October 12 th ), Chandigarh (16 th October), Delhi (19 th October), Jaipur (23 rd

October) and Mumbai (28 th October) where their wits, guts and attitude will be put to the test by

none other than one of the most popular MTV VJs Nikhil Chinappa and the most-hated Indian judge

Raghu Ram.If you thought Raghu was just mean before..you might be shaking to find out that the

game has changed and that his middle name now starts with an R and ends with an E for plain

RUDE!

Talking about the 5th season, Mr. Anil Dua, Sr. Vice President- Sales & Marketing, Hero Honda,

adds, "We are glad to partner with MTV once again and take this unique concept to another level.

MTV Hero Honda Roadies 5.0 is going to be the ultimate test of endurance for the Roadies finalists,

of course on their Hero Honda's Karizma. MTV Hero Honda Roadies provides us the ideal platform to

put Karizma through grueling terrains, harsh weather conditions and most importantly impatient

riders.And every time Karizma can be seen proud & upright, next to the last man/woman standing."

Talking of his expectations from this year's contestants, Raghu Ram , judge & dictator, MTV Hero

Honda Roadies, says, "I am looking for people, who have an insatiable appetite for winning and at

the same time.who've got guts to stand their ground and endure whatever comes their way. So, if

you do not possess any of these.please stay at home and do not waste my time."

MTV Hero Honda Roadies made its entry in 2003 as India 's first adventure-reality show that tested

the mettle of a young group traveling cross country on bikes, by exposing them to grueling

situations, harsh conditions and tough competition! This one-of-a-kind adventure-reality show went

on in subsequent seasons to evolve into a true adrenalin junkie's dream-come-true.

Since the 1 st season many finalists of MTV Hero Honda Roadies have found fame & fortune in the

entertainment world for just being..well.'mean' - from Rannvijay, who is now one of MTV's most

popular VJs to Ayushman Khurana, a well known RJ on Big FM, tough Shubhi Mehta who starred in

blockbuster movie 'Chak De' and the girl who no one liked - Bani, who made her debut in Bollywood

with Himesh Reshamiya's 'Aap Ka Suroor'.

So.get ready for MTV Hero Honda Roadies 5.0 auditions in your city ... Raghu RUDE Ram & Nikhil

Chinappa are sharpening their claws & you better be filing your fangs to bare at the auditions.as you

might just get that one in a million chance to travel the world to show everyone.just how far you are

willing to go!

Being the only reality show on Indian television that has shown consistent increase in popularity as

well as ratings year on year, 'MTV Hero Honda Roadies' 4 showed an astounding 230% increase in

ratings over the previous year, and made MTV the most watched channel, in that 1 hour duration,

towards the final episodes, beating even the general entertainment channels.

More than mere TV ratings, the popularity of Roadies has spawned an underground cult resulting in

over 1,50,000 people forming Roadies communities across various social-networking sites,

scrapping & dissecting each episode and each Roadie. Last year, MTV Gear (MTV India's clothing &

accessories business) also launched Roadies Cargoes (pants with too many pockets) for both men &

women. The cult of Roadies also extended into music, with the launch of 'Roadies' theme song by

'Agnee', one of India's well known rock bands. For more information, sms "ROADIES" to 56882 or log

on to www.mtvindia.com.

HERO HONDA SA RE GA MA PA 

Hero Honda Sa re Ga Ma Pa Challenge 2005 is a reality show that promises to go beyond just the

participants. It is a contest between the four Mentors themselves! The epitomes of the music

industry and the four mentors - Adesh Shrivastav, Jatin-Lalit, Himesh Reshammiya and Ismail

Darbar will come together only to battle against one another in a bid to make their team win the

title of the Hero Honda Sa Re Ga Ma Pa Challenge 2005.