A

RESEARCH REPORT

On

MARKETING STRATEGY OF TWO WHEELER SEGMENT IN AUTOMOBILE INDUSTRY

SUBMITTED TO:-

KURUKSHETRA UNIVERSITY

KURUKSHETRA

In partial fulfillment for the degree of

M.B.A

Session 2011-2013

 

 UNDER THE GUIDANCE OF: SUBMITTED BY:

Ms. NIDHI PUNJ (Assistant Professor) NARESH DUTT

MBA Deptt. MBA-IV Sem.

Roll No. ------

Swami Devi Dayal Institute Of Engineering &Technology

Barwala, Panchkula (Haryana)

1

SL NO.

CONTENTS PAGE NO.

Certificate Declaration Acknowledgement Preface

3 4 5 6

Chapter 1

Introduction

Introduction of the company 7-51

Chapter 2 REVIEW OF LITERATURE 52-57

Chapter 3 RESEARCH METHODOLOGY Objectives of research Data sources Scope of the study Data completion Limitation of the study

58-61

Chapter 4

& interpretation 54-77

DATA ANALYSIS AND INTERPRETATION 62-77

Chapter 5 FINDINGS & SUGGESSTIONS 78-80

Chapter 6 CONCLUSION BIBLIOGRAPHY QUESTIONNAIRE ANNEXURES

81-86

2

CERTIFICATE

This is to certify that the project titled “Marketing Strategy of Two Wheeler

Segment in Automobile Industry” submitted in partial fulfillment of requirement for

the degree of MASTER IN BUSINESS ADMINISTRATION From swami Devi

Dayal Institute of Management Studies affiliated from KURUKSHETRA

UNIVERSITY is an exclusive record of bonafied research project out by Naresh Dutt

under my supervision and guidance.

This is also certified that while carrying out this project work Marketing Strategy of

Two Wheeler Segment in Automobile Industry was constantly in touch with

faculty of department for necessary guidance and essential directions this work done

by her has been found satisfactory commendable. I wish his great success in his

career.

RESEARCH GUIDE PRINCIPAL

3

ACKNOWLEDGEMENT

The preparation of this project would not have been possible without the support of

any invaluable inputs from key individuals. This research report required hard work,

sincerity and devotion which I tried my best to put in this project and in turn gained a

lot of knowledge and confidence from this project.

I am sincerely thankful to my research Guide, Ms. Nidhi Punj Assistant Professor

(MBA) and Dr.Pk. Mehta (Principal) for their valuable support and exceptional

guidance throughout my project. I express my gratitude for their valuable insights and

suggestions and continuous support without which this project could to have reached

successful completion.

I am also thankful to all the respondents who spared their valuable time for filling up

the questionnaire and helped me out with this project. Finally, I would like to thank

my parents and all my friends, who provided me with their constant support and took

the pain to help me in completing the project.

NARESH DUTT

4

PREFACE

The research studies are of a great help in enhancing the knowledge of a person.

Practical knowledge is a suffix to theoretical knowledge. Classroom lectures clarify

the fundamental concepts of management. But classroom lectures must be correlated

with the practical research situation. It is in this sense that the research project is made

compulsory for the curriculum and has a significant role to play in the field of

business management. Through this type of project one can understand the application

of theory into practical. But it is only difficulties, which makes the success dears. In

this project I have put a lot of effort to make it a success.

5

DECLARATION

I am Naresh Dutt student of MBA-2nd year roll no 1018 at SWAMI DEVI DYAL

Institute of management studies. I do hereby declare that the final project report

entitle “Marketing strategy of two wheeler segment in automobile industry” is my

original work and the same has been submitted to any other institute for the award of

similar/any other degree.

NARESH DUTT

6

CHAPTER: 1

INTRODUCTION

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INTRODUCTION

Meaning of marketing strategy:

Marketing strategy consists of the analysis, strategy development, and implementation

activities in: “Developing a vision about the market(s) of interest to the organization,

selecting market target strategies, setting objectives, and developing, implementing,

and managing the marketing program positioning strategies designed to meet the

value requirements of the customers in each market target”.

Strategic marketing is a market-driven process of strategy development, taking into

account a constantly changing business environment and the need to deliver superior

customer value. The focus of strategic marketing is on organizational performance

rather than a primary concern about increasing sales. Marketing strategy seeks to

deliver superior customer value by combining the customer-influencing strategies of

the business into a coordinated set of market-driven actions. Strategic marketing links

the organization with the environment and views marketing as a responsibility of the

entire business rather than a specialized function.

Because of marketing’s boundary orientation between the organization and its

customers, channel members, and competition, marketing processes are central to the

business strategy planning process. Strategic marketing provides the expertise for

environmental monitoring, for deciding what customer groups to serve, for guiding

product specifications, and for choosing which competitors to position against.

Successfully integrating cross-functional strategies is critical to providing superior

customer value. Customer value requirements must be transformed into product

design and production guidelines. Success in achieving high-quality goods and

services require finding out which attributes of goods and service quality drive

customer value.

Marketing Strategy Process

The marketing strategy analysis, planning, implementation and management process

is described below. The strategic situation analysis considers market and competitor

analysis, market segmentation, and continuous learning about markets. Designing

marketing strategy examines customer targeting and positioning strategies, marketing 8

relationship strategies and planning for new products. Marketing program

development consists of product, distribution, price, and promotion strategies

designed and implemented to meet the value requirements of targeted buyers. Strategy

implementation and management consider organizational design and marketing

strategy implementation and control.

Stage 1: Strategic Situation Analysis

Marketing management uses the information provided by the situation analysis to

guide the design of a new strategy or change an existing strategy. The situation

analysis is conducted on a regular basis after the strategy is under way to evaluate

strategy performance and identify needed strategy changes.

Market Vision Structure and Analysis. Markets need to be defined so that buyers

and competition can be analyzed. For a market to exist, there must be (1) people with

particular needs and wants and one or more products that can satisfy buyers’ needs,

and (2) buyers willing and able to purchase a product that satisfies their needs and

wants. A product-market consists of a specific product (or line of related products)

that can satisfy a set of needs and wants for the people (or organizations) willing and

able to purchase it. The term product is used to indicate either a physical good or an

intangible service.

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Analyzing product-markets and forecasting how they will change in the future are

vital to business and marketing planning. Decisions to enter new product-markets,

how to serve existing product-markets, and when to exist in unattractive product-

markets are critical strategic choices. The objective is to identify and describe the

buyers, understand their preferences for products, estimate the size and rate of growth

of the market, and find out what companies and products are competing in the market.

Evaluation of competitors’ strategies, strengths, limitations and plans is also a key

aspect of the situation analysis. It is important to identify both existing and potential

competitors. Competitor analysis includes evaluating each key competitor. The

analyses highlight the competition’s important strengths and weaknesses. A key issue

is trying to figure out what each competitor is likely to do in future.

Segmenting Markets. Market segmentation looks at the nature and extent of

diversity of buyers’ needs and wants in a market. It offers an opportunity for an

organization to focus in business capabilities on the requirements of one or more

groups of buyers. The objective of segmentation is to examine differences in needs

and wants and to identify the segments (sub-groups) within the product-market of

interest. Each segment contains buyers with similar needs and wants for the product

category of interest to management. The segments are described using the various

characteristics of people, the reasons that they buy or use certain products, and their

preferences for certain brands of products. Likewise, segments of industrial product-

markets may be formed according to the type of industry, the uses for the product,

frequency of product purchase, and various other factors. Each segment may vary

quite a bit from the average characteristics of the entire product-market. The

similarities of buyers’ needs within a segment enable better targeting of the

organization’s capabilities to buyers with corresponding value requirements.

Continuous Learning about Markets. One of the major realities of achieving

business success today is the necessity of understanding markets and competition.

Sensing what is happening and is likely to occur in the future is complicated by

competitive threats that may exist beyond traditional industry boundaries. For

example, CD-ROMs compete with books.

Stage 2: Designing Market-Driven Strategies

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The strategic situation analysis phase of the marketing strategy process identifies

market opportunities, defines market segments, evaluates competition, and assesses

the organization’s strengths and weaknesses. Market sensing information plays a key

role in designing marketing strategy, which includes market targeting and positioning

strategies, building marketing relationships, and developing and introducing new

products.

Market Targeting and Strategic Positioning. Marketing advantage is influenced by

several situational factors including industry characteristics, type of firm (e.g., size),

extent of differentiation in buyers’ needs, and the specific competitive advantage(s) of

the company designing the marketing strategy. The core issue is deciding how, when,

and where to compete, given a firm’s market and competitive environment.

The purpose of the marketing targeting strategy is to select the people (or

organizations) that management wishes to serve in the product-market. When buyers’

needs and wants vary, the market target is usually one or more segments of the

product-market. Once the segments are identified and their relative importance to the

firm determined, the targeting strategy is selected. The objective is to find the best

match between the value requirements of each segment and the organization’s

distinctive capabilities. The targeting decision is the focal point of marketing strategy

since targeting guides the setting of objectives and developing a positioning strategy.

The options range from targeting most of the segments to targeting one or few

segments in a product-market. The targeting strategy may be influenced by the

market’s maturity , the diversity of buyers’ needs and preferences, the firm’s size

compared to competition, corporate resources and priorities, and the volume of sales

required to achieve favorable financial results. Deciding the objectives for each

market target spells out the results expected by management. Examples of market

target objectives are desired levels of sales, market share, customer retention, profit

contribution, and customer satisfaction. Marketing objectives may also be set for the

entire business unit and for specific marketing activities such as advertising.

The marketing program positioning strategy is the combination of product, value-

chain, price, and promotion strategies a firm uses to position itself against its key

competitors in meeting the needs and wants of the market target, the strategies and

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tactics used to gain a favorable position are called the marketing mix or the marketing

program.

Marketing Relationship Strategies. Marketing relationship partners may include

end user customers, marketing channel members, suppliers, competitor alliances, and

internal teams. The driving force underlying these relationships is that a company

may enhance its ability to satisfy customers and cope with a rapidly changing

business environment through collaboration of the parties involved. Relationship

strategies gained new importance in the last decade as customers became more

demanding and competition became more intense. Building long-term relationships

with customers and value-chain partners offers companies a way to provide superior

customer value. Although building collaborative relationships may not always be the

best course of action, this avenue for gaining a competitive edge is increasing in

popularity.

Strategic partnering has become an important strategic initiative for many well known

companies and brands. Many firms outsource the manufacturing of their products.

Examples include Motorola cell phones, Calvin Klein jeans, Pepsi beverages, and

Nike footwear. Strong relationships with outsourcing partners are vital to the success

of these powerful brands. The trend of the 21st century is partnering rather than

vertical integration.

Planning for New Products. New products are needed to replace old products

because of declining sales and profits. Strategies for developing and positioning new

market entries involve all functions of the business. Closely coordinated new-product

planning is essential to satisfy customer requirements and produce products with high

quality at competitive prices. New-product decisions include finding and evaluating

ideas, selecting the most promising for development, designing the products,

developing marketing programs, use and market testing the products, and introducing

them to the market. The new-product planning process starts by identifying gaps in

customer satisfaction. The differences between existing product attributes and those

desired by customers offer opportunities for new and improved products.

Stage 3: Market-Driven Program Development

12

Market targeting and positioning strategies for new and existing products guide the

choice of strategies for the marketing program components. Product, distribution,

price, and promotion strategies are combined to form the positioning strategy selected

for each market target.

The marketing program (mix) strategies implement the positioning strategy. The

objective is to achieve favorable positioning while allocating financial, human, and

production resources to markets, customers, and products as effectively and

efficiently as possible.

Strategic Brand Management. Products (goods and services) often are the focal

point of positioning strategy, particularly when companies or business adopt

organizational approaches emphasizing product or brand management. Product

strategy includes: (1) developing plans for new products, (2) managing programs for

successful products, and (3) deciding what to do about problem products (e.g., reduce

costs or improve the product). Strategic brand management consists of building brand

value (equity) and managing the organization’s portfolio for overall performance.

Value-Chain, Price, and Promotion Strategies. One of the major issues in

managing program is deciding how to integrate the components of the mix. Product,

distribution, price, and promotion strategies are shaped into a coordinated plan of

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action. Each component helps to influence buyers in their positioning of products. If

the activities of these mix components are not coordinated, the actions may conflict

and resources may be wasted. For example, if the advertising messages for a

company’s brand stress quality and performance, but salesperson emphasize low

price, buyers will be confused and brand damage may occur.

Market target buyers may be contacted on a direct basis using the firm’s sales force or

by direct marketing contact (e.g., Internet), or instead, through a value-added chain

(distribution channel) of marketing intermediaries (e.g., wholesalers, retailers, or

dealers). Distribution channels are often used in linking procedures with end user

household and business markets. Decisions that need to be made include the type of

channel organization to use, the extent of channel management performed by the firm,

and the intensity of distribution appropriate for the product or service. The choice of

distribution channels influences buyers’ positioning of the brand.

Price also plays an important role in positioning a product or service. Customer

reaction to alternative prices, the cost of the product, the prices of the competition and

various legal and ethical factors establish the extent of flexibility management has in

setting prices. Price strategy involves choosing the role of price in the positioning

strategy, including the desired positioning of the product or brand as well as the

margins necessary to satisfy and motivate distribution channel participants. Price may

be used as an active (visible) component of marketing strategy, or, instead, marketing

emphasis may be on other marketing mix components (e.g., product quality).

Advertising, sales promotion, the sales force, direct marketing, and public relations

help the organization to communicate with its customers, value-chain partners, the

public, and other target audiences. These activities make up the promotion strategy,

which performs an essential role in communicating the positioning strategy to buyers

and other relevant influences. Promotion informs, reminds, and persuades buyers and

others who influence the purchasing process.

Stage 4: Implementing and Managing Market-Driven Strategy

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Selecting customers to target and the positioning strategy for each target moves

marketing strategy development to the action stage. This stage considers designing the

marketing organization and implementing and managing the strategy.

Designing Effective Market-Driven Organizations. An effective organization

design matches people and work responsibilities in a way that is best for

accomplishing the firm’s marketing strategy. Deciding how to assemble people into

organizational units and assign responsibility to the various mix components that

make up the marketing strategy are important influences on performance.

Organizational structures and processes must be matched to the business and

marketing strategies that are developed and implemented. Organizational design

needs to be evaluated on a regular basis to assess its adequacy and to identify

necessary changes.

Strategy Implementation and Control. Marketing strategy implementation and

control consist of: (1) preparing the marketing plan and budget; (2) implementing the

plan; and (3) using the plan in managing and controlling the strategy on an ongoing

basis. The marketing plan includes details concerning targeting, positioning, and

marketing mix activities. The plan spells out what is going to happen over the

planning period, which is responsible, how much it will cost, and the expected results

(e.g., sales forecasts).

The marketing plan includes action guidelines for the activities to be implemented,

which do what, the dates and location of implementation, and how implementation

will be accomplished. Several factors contribute to implementation effectiveness

including the skills and commitment of the people involved, organizational design,

incentives, and the effectiveness of communication within the organization and

externally.

Marketing strategy is an ongoing process of making decisions, implementing them,

and tracking their effectiveness over time. In terms of its time requirements, strategic

evaluation is far more demanding than planning. Evaluation and control are concerned

with tracking performance and, when necessary, altering plans to keep performance

on track. Evaluation also includes looking for new opportunities and potential threats

in the future. It is the concerning link in the strategic marketing planning process. By

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serving as both the last stage and the first stage (evaluation before taking action) in

the planning process, strategic evaluation assures that strategy is an ongoing activity.

INTRODUCTION TO AUTOMOBILE INDUSTRY:

16

THE INDIAN AUTOMOBILE INDUSTRY

From the policy standpoint, the Indian automobile industry can be viewed in terms of

the pre-1991 (before liberalization) .

Post-1991 (after liberalization) phase.

Pre-1991, Before Liberalization

1880's & early 1900's:

About hundred years ago the first motorcar was imported and Import duty on vehicles

was introduced. Indian Great Royal Road (Predecessor of the Grand Trunk Road) was

conceived. First car brought in India by a princely ruler in 1898. Simpson & Co

established in 1840. They were the first to build a steam car and a steam bus, to

attempt motorcar manufacture, to build and operate petrol driven passenger service

and to import American Chassis in India.

Railways first came to India in 1850's. In 1865 Col. Rookies Crompton introduced

public transport wagons strapped to and pulled by imported steam road rollers called

streamers. The maximum speed of these buses was 33 kms/hr. From 1888 Motors

Spirit attracted a substantial import duty. In 1919 at the end of the war, a large number

of military vehicles came on the roads. In 1928 assembly of CKD Trucks and Cars

was started by the wholly owned Indian subsidiary of American General Motors in

Bombay and in 1930-31 by Canadian Ford Motors in Madras, Bombay and Calcutta.

In 1935 the proposals of Sir M Visvesvaraya to set up an Automobile Industry were

disallowed. 78

17

1942 Hindustan Motors Ltd incorporated and their first vehicle was made in 1950.

In 1944 Premier Automobiles Ltd incorporated and in 1947 their first vehicle was

produced. In 1947 the Government of Bombay accepted a scheme of Bajaj Auto to

replace the cycle rickshaw by the auto and assembly started in a couple of years under

a license from Piaggio. Manufacturing Program for the auto and scooter was

submitted in 1953 to the Tariff Commission and approved by the Government in

1959.

In 1953 the Government decreed that only firms having a manufacturing program

should be allowed to operate and mere assemblers of imported CKD units be asked to

terminate operations in three years. Only seven firms namely Hindustan Motors

Limited, Automobile Products of India Limited, Ashok Leyland Limited, Standard

Motors Products of India Limited, Premier Automobiles Limited, Mahindra &

Mahindra and TELCO received approval. M&M was manufacturing jeeps. Few more

companies came up later. Government continued with its protectionism policies

towards the industry.

Automobile Products of India (API) and Enfield India had already commenced the

manufacture of scooters, motorcycles, mopeds and autos from 1955.

In 1956, Bajaj Tempo Ltd entered the Indian market with a program of manufacturing

Commercial Vehicles, and Simpson for making engines.

AIA&AIA (association of the component manufacturers) came into being in 1959 and

Government approved Bajaj Auto Ltd's plans for domestic manufacture of Vespa

scooters and granted permission to produce 6000 units annually 79.

18

1960’s:

In sixties 2 and 3 Wheeler segment established a foothold in the industry. Escorts and

Ideal Jawa entered the field in the beginning of sixties. Association of Indian

Automobile Manufacturers formally established in 1960.

Between 1955 and 1960 only API was producing Mopeds. During the first half of the

sixties three companies namely Mopeds India Ltd (1965), SZUL Gwalior (1964) and

Pearl Scooters Ltd (1962) entered the arena.

Standard Motors Products of India Ltd. moved over to the manufacture of Light

Commercial Vehicles in 1965.

Escorts and Enfield closed their scooter division and continued only with Motorcycle

manufacturing. Entire scooter market was occupied by Bajaj Auto Ltd. and API in the

sixties.

1970`s:

Major factors affecting the industry's structure were the implementation of MRTP

Act, FERA and Oil Shocks of 1973 and 1979. During this decade there was not much

change in the four-wheeler industry except the entry of Sipani Automobiles in the

small car market.

Girnar Scooters Ltd entered into the market in 1971 and its output was less than 5000

units until 1980.

In the Two Wheeler Industry there were many entries during this decade. Scooter

India established in 1972.

In 1972 Kinetic Engineering entered the Industry with a licensed capacity of 100,000

units per annum. Oil Shock of 1973 quickened the process of dieselization of the

Commercial Vehicle segment.

Three other companies, namely, Kirloskar Ghatge Patil Auto Ltd, Indian Automotive

Ltd and Sen& Pandit Engg products Ltd entered 80.

19

The market during 1971-75. They ultimately withdrew in early eighties. Unlike

Motorcycle and Scooter segments the Mopeds segment grew rapidly.

In the late seventies there were many entries in the Moped Industry. Only two firms

namely, Majestic Auto Ltd and Sundaram Clayton managed to survive after 1980.

During the seventies the economy was in bad shape. This and many specific problems

affected the Automobile Industry adversely.

1980's –

The period of liberalized policy and intense competition.

Since the 80s, the Indian car Industry has seen a major resurgence with the opening up

of Indian shores to foreign manufacturers and collaborators. First phase of

liberalization announced and unfair practices of monopoly, oligopoly, etc slowly

disappeared. It was beginning of Liberalization of the protectionism policies of the

Government. Lots of new Foreign Collaborations came up in the eighties. Many

companies went in for Japanese collaborations. Andhra Pradesh Scooters entered into

collaboration with Piaggio for manufacture of Vespa model. Hindustan Motors Ltd. in

collaboration with Isuzu of Japan introduced the Isuzu truck in early eighties. ALL

entered into collaboration with Leyland Vehicles Ltd. for development of integral

buses and with Hino Motors of Japan for the manufacture of W Series of Engines.

Telco after the expiry of its contract with Daimler Benz indigenously improved the

same Benz model and introduced it in the market. Government approved four new

firms in the LCV market, namely, DCM, Eicher, Swaraj and Allwyn. They had

collaborations with Japanese companies namely, Toyota, Mitsubishi, Mazda and

Nissan respectively 81.

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The Two Wheeler market increased. Since 1982 the Government had permitted

foreign collaborations for the manufacturing of Two Wheelers up to 100 cc engine

capacity. Foreign Equity up to 40% was also allowed.

In 1983 Maruti Udyog Ltd was started in collaboration with Suzuki, a Japanese firm.

Other three Car manufacturers namely, Hindustan Motors Ltd., Premier Automobiles

Ltd., Standard Motor Production of India Ltd. also introduced new models in the

market.

At the time there were five Passenger Car manufacturers in India - MarutiUdyog Ltd.,

Hindustan Motors Ltd., Premier Automobiles Ltd., Standard Motor Production of

India Ltd., and Sipani Automobiles. Ashok Leyland Ltd. and Telco were strong

players in the Commercial Vehicles sector.

In 1983-84 Bajaj Tempo Ltd. entered into collaboration with Daimler-Benz of

Germany for manufacture of LCVs. Important policy changes like relaxation in

MRTP and FERA, delicensing of some ancillary products, broad banding of the

products, modifications in licensing policy, concessions to private sector (both Indian

and Foreign) and foreign collaboration policy etc. resulted in higher growth / better

performance of the industry than in the earlier decades. Lohia Machines Ltd entered

in collaboration with Piaggio of Italy.

Kinetic Engineering Ltd. entered into Financial & Technical collaboration with

Honda Motor Co. of Japan for 100 cc scooters. In the Motorcycle segment firms had

shifted their emphasis from heavier models to lighter and fuel-efficient models. Indian

market was flooded with new 100 cc models manufactured by different firms with

Japanese Technology. In Moped segment there were 23 firms engaged in their

production but the virtual oligopoly of Kinetic Engineering Ltd., SCL 82

21

And Majestic Auto remained intact. This segment had less collaboration.

Post-1991, After Liberalization, the Freedom to Grow

Beginning with mid-1991 the government of India has made some radical changes in

its polices bearing on trade, foreign investment, exchange rate, industry, fiscal affairs

and so on. Mass Emission Norms were introduced for in 1991 for Petrol Vehicles and

in 1992 for Diesel Vehicles. In 1991 new Industrial Policy was announced. It was the

death of the License Raj and the Automobile Industry was allowed to expand.

Further tightening of Emission norms was done in 1996. In 1997 National Highway

Policy has been announced which will have a positive impact on the Automobile

Industry. The Indian Automobile market in general and Passenger Cars in particular

have witnessed liberalization. Many multinationals like Daewoo, Peugeot, General

Motors, Mercedes-Benz, Honda, Hyundai, Toyota, Mitsubishi, Suzuki, Volvo, Ford

and Fiat entered the market. Various companies are coming up with state-of-art

models of vehicles. TELCO has diversified in Passenger Car segment with Indicia.

Despite the adverse trend in the growth of the industry, it is resolutely trying to meet

the challenges. Various issues of critical importance to the industry are being dealt

with forcefully. In 1999 The Hon’ble Supreme Court passed an order directing all car

manufacturers to comply with Euro I emission norms (India 2000 norms) by the 1st of

May 1999 in National Capital Region (NCR) of Delhi. The deadline was later

extended to 1st June 1999. The 90s have become the melting point for the car industry

in India. The consumer is king. He is being constantly wooed by both the Indian and

foreign manufacturers. Though sales had taken an 83.

22

Dip in the first few months of 1999; it is back to boom time. New models like Marti’s

Classic, Alto, Station Wagon, Ford’s Ikon and the new look Mitsubishi Lancer have

all been launched with an eye on the emerging market.

4.5) THE INDIAN AUTOMOBILE INDUSTRY AT PRESENT

The Indian automobile industry has come a long way since the first car ran on the

streets of Mumbai in 1898. The initial years of the industry were characterized by

unfavorable government policies. The real big change in the industry, as we see it

today, started to take place with the liberalization policies that the government

initiated in the 1991. The liberalization policies had a salutary impact on the Indian

economy and the automobile industry in particular. The automobile industry in the

country is one of the key sectors of the economy in terms of the employment

opportunities that it offers. The industry directly employs close to around 0.2 million

people and indirectly employs around 10 million people. The prospects of the industry

also has a bearing on the auto-component industry which is also a major sector in the

Indian economy directly employing 0.25 million people. The automobile industry in

India is gradually evolving to replicate those of developed countries. The trends are

emerging in the industry across segments, namely, passenger cars, multi-utility

vehicles, commercial vehicles, two-wheelers and tractors. The qualitative analysis of

the various trends reveals that the industry offers immense scope even for allied

industries and those looking at investing in the auto industry. The Indian automobile

industry is undergoing a revolution of sorts. The vehicle war is on. And it's a fight to

the finish. Within the span of a few years, the vehicle market has displayed an array

84

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Of models that were hitherto undreamt of. Ford, General Motors, Toyota, Volvo are

household names today. Launch of a vehicle in one category spawns a war for the

throne. The Icon, Accent and Baleno have been launched. The Wagon R, due next, is

predicted to give tough competition to those already in that sector. Czech carmaker,

Skoda, a subsidiary of German auto major Volkswagen, is introducing the Octavia.

India's only Sports car, the San Storm, is all set to race into our hearts. Hero Motors

and the Kinetic Group are both set to launch new models. In the three-wheeler market,

after its eco-friendly Bijlee, Mahindra & Mahindra (M&M) plan to enter the market in

a big way with their new diesel engine vehicle yet to be christened. Toyota has been

to enter the multi-utility segment with the launch of its Quails’. In these last years of

the millennium, suffice it is to say that Indian cars will only grow from strength to

strength. There are 48 companies in the Automobile Industry in India that comprise of

all vehicles, including two and three-wheelers, Passenger Cars and multi-utility

vehicles, light ,medium and heavy commercial vehicles, agriculture and earth moving

machinery (table 4-1). Since the inception of the Automobile Industry in India till

liberalization (1942 to 1991, in a fifty-year period) only 31 companies have been

established in the Industry; while in post-liberalization period (in a ten-years period

from 1992 till 2001), 17 companies entered to the Industry. Most of these new

entrance all multinational companies that have joint venture with Indian companies.

Multinational companies own more than 50% stake in their joint ventures, and

sometimes this stake comes near to 100%. For example Italian Auto major, Fiat 85

24

Auto Spa has 94.77% stake in Fiat India Limited. A few of these new companies are

fully subsidiary of foreign companies like Yamaha Motor India Ltd which is 100%

subsidiary of Yamaha Motor Company of Japan. Some Indian Automobile companies

have several subsidiaries for manufacturing different vehicles, same as Either Ltd,

Sonalika Group, Escorts Ltd and Mahindra & Mahindra. Either Ltd includes Either

Tractors Ltd for tractors manufacturing and Royal Enfield Motors Limited in

motorcycles section. Sonalika Group has International Tractors Limited for the

manufacture of tractors (incorporated 1995) and Sonalika Agriculture Corporation

(established in 1971) that has approximately 80% share in Indian market of farm

machinery. Escorts Ltd also includes Escorts Tractors Ltd and Escorts JCB Ltd.

Mahindra & Mahindra has Mahindra Nissan Allwyn and Gujarat Tractors Corporation

as subsidiaries. Several companies in the Industry were declared sick during their life;

because they have come under the Sick Industrial Companies (Special Provisions)

Act, 1985. Thus they have been referred to the Board of Industrial and Financial

Reconstruction (BIFR). Finally 26 companies in the industry have been listed in

Bombay Stock Exchange (BSE); and only 18 of them were listed in 2001 or before

that date and were not delisted of BSE or not referred to BIFR. One company also has

eliminated because of its negative values for average operating income during the

period of the study. So the remained companies (17 companies) have been considered

as population of the study which has been explained in details in the methodology of

research.

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INTRODUCTION OF TWO-WHEELER INDUSTRY IN INDIA    

India is the second largest manufacturer and producer of two-wheelers in the world. It

stands next only to Japan and China in terms of the number of two-wheelers produced

and domestic sales respectively. This distinction was achieved due to variety of

reasons like restrictive policy followed by the Government of India towards the

passenger car industry, rising demand for personal transport, inefficiency in the public

transportation system etc. The Indian two-wheeler industry made a small beginning in

the early 50s when Automobile Products of India (API) started manufacturing

scooters in the country. Until 1958, API and Enfield were the sole producers. Under

the regulated regime, foreign companies were not allowed to operate in India.

The motorcycles segment was no different, with only three manufacturers via Enfield,

Ideal Jawa and Escorts. The two-wheeler market was opened to foreign competition

in the mid-80s. And the then market leaders - Escorts and Enfield - were caught

unaware by the onslaught of the 100cc bikes of the four Indo-Japanese joint ventures

The industry had a smooth ride in the 50s, 60s and 70s when the Government

prohibited new entries and strictly controlled capacity expansion. The industry saw a

sudden growth in the 80s. The industry witnessed a steady growth of 14% leading to a

peak volume of 1.9mn vehicles in 1990. In 1990, the entire automobile industry saw a

drastic fall in demand. This resulted in a decline of 15% in 1991 and 8% in 1992,

resulting in a production loss of 0.4mn vehicles. The total number of registered two-

wheelers and three-wheelers on road in India, as on March 31, 1998 was 27.9mn and

1.7mn respectively. The two-wheeler population has almost doubled in 1996 from a

base of 12.6mn in 1990. The last few years have seen a fundamental shift in

preference from scooters and mopeds towards motorcycles. Motorcycle sales have

grown at a CAGR of 27% for the last 6 years Vs Two Wheelers, which have grown at

a CAGR of 11% over the same period. In 02-03, motorcycle sales have grown at 30%

vs. 17% for two-wheelers. The faster growth rate of motorcycles has seen its share

doubling from 38% in 97-98 to 76% in 02-03. Henceforth we do not expect

motorcycles to grow at a rapid rate. However the growth rate for motorcycles in 03-04

is expected to be faster than overall 2-wheeler growth and we expect it to be around

26

12-15%. The chart shows the sale of motorcycle grow very fast with comparison to

scooters and mopeds. Motorcycle share in two wheeler industries: - The chart shows

that the share of motorcycle in two wheeler industries is increasing with very fast

speed. In 1999 the share of scooter was more but from the mid of 1999 – 2000 the

whole scenario is changed. INTRODUCTION OF HERO HONDA Hero Honda

Motors Limited was established in January 19,1984. It started out, as a Joint Venture

between Hero Group, the world's largest bicycle manufacturers and the Honda Motor

Company of Japan, has today become the World's single largest two-wheeler

Company. Hero Honda Motors Limited gave India nothing less than a revolution on

two-wheels made even more famous by the 'Fill it - Shut it - Forget it ' campaign.

Driven by the trust of over 5 million customers, The Hero Honda product range today

commands a market share of 48% making it a veritable giant in the industry. Hero

Honda is currently the world’s largest motorcycle manufacturer thanks to its fuel

efficient, high quality products made in collaboration with Honda motorcycles, Japan.

Hero, a name synonymous with two wheelers in India, began its journey around four

decades ago. Starting as a manufacturer of bicycle components, Hero has today grown

into a multi-unit, multi-product, geographically diversified group of companies. Like

every success story, Hero's saga contains an element of spirit and enterprise of

achievement through grit and determination, coupled with vision and meticulous

planning. The Hero Group began with a simple philosophy: to provide excellent

transportation to the common man, at a price he could easily afford. It is this spirit,

which drives Hero even today; the dream of providing total satisfaction in all its

spheres of activity. To consumers, in excellent products at an affordable price; to

employees, in a fine quality of life and to business associates, in a total sense of

belonging. A thorough understanding of fast-changing consumer behavior, new

market segments and product opportunities, and a marketing mix sensitive to

changing customer needs, form the core of Hero's marketing strategy and philosophy.

Keeping the wheels of progress turning are the individual companies of the Hero

Group. Each an independent profit centres. Each a success story in its own right. The

two wheeler division of the Hero Group has already networked more than 3,500

dealer outlets, each with its complement of trained mechanics and workers.

27

INTRODUCTION OF BAJAJ AUTO LIMITED

It is one of India's top ten companies in terms of market capitalization and among the

top five in terms of annual turnover. Established in 1945, it was incorporated as a

trading company. From 1948 till 1959, it imported scooters and three wheelers from

Italy and sold them in India. Today, Bajaj Auto Ltd (BAL), the largest two and three

wheeler manufacturer in the country, has a dominating 40% market share in scooters

with 18.5% in unguarded scooters, 25.2% in motor cycles, 8.3% in mopeds and a

leading 78% market share in three-wheelers in FY2001. Bajaj Auto has been viewed

as a scooter major but with the change in the structure of demand for 2-wheelers the

company has tried to make its presence felt in this key market by steadily ramping up

motorcycle capacities, by introducing new models and variants and pushing up

marketing and sales. However the company is well behind Hero Honda in the

motorcycle. The company has a wide array of models both in the two-stroke and four-

stroke configurations. However, with the implementation of the latest emission

norms, it is slowly moving away from two-stroke vehicles and converting them to

four-stroke ones. The company is all set to increase its margins to double – digits

through concerted cost cutting, value engineering, gains from ‘ Total Productive

Maintenance ‘ (TPM) and VRS. In the last four to five years, the two-wheeler market

has witnessed a marked shift towards motorcycles at the expense of scooters. In the

rural areas, consumers have come to prefer sturdier bikes to withstand the bad road

conditions. In the process the share of motorcycle segment has grown from 48% to

58%, the share of scooters declined Drastically from 33% to 25%, while that of

mopeds declined by 2% from 19% to 17% during the year 2000-01.The Euro

emission norms effective from April 2000 led to the existing players in the two-

stroke segment to install catalytic converters. This has been replaced by 4-stroke

motorcycles, which do not incur the additional cost of such converters and fierce

competition led to a fall in price of certain models Bajaj Auto Ltd has been viewed as

a scooter major. Nevertheless, in the past five years the company recognized the

important role of motorcycles in its portfolio. The scooter market is predominantly

located in the Northern and Eastern India and the rationalization of sales taxes to a

uniform rate of 12% pushed the price of scooters by 6-8% without offering any

perceived value advantage to the customer. The company posted total 2-wheeler sales

of Rs1.05 million in 2000-01 as against Rs1.24 million in 1999-00. The motorcycle

28

sales contributed to almost 50% of the total sales volumes accompanied by the decline

in geared scooter sales, which contributed, to only 33% of sales volumes. The

company has been introducing models in the middle end Rs.36, 000 – Rs. 48,000 and

high end segments vie; Rs. 48,000 and above but has found difficult to market such

models in competition to Hero Honda models in the similar price category. However

BAL is on its way to recapture the highly differentiated product market by becoming

a flexible and market – driven supplier of various models of two and three wheelers at

specific price – points. BAL has performed fairly in the current fiscal 2001-02 with

the Net Sales going up by 3.06% to Rs19720 million HY ended September 2001 from

Rs19133.3 mn in the corresponding period previous year.The total expenditure has

gone up by 5.3% with the material cost accounting for the major increase. The

company has posted a growth of 69% in PBT and the Net Profit has increased by 55%

to Rs2644.7 mn from Rs1701.5 mn in the corresponding period last year. The Net

Profit Margin has also improved by almost 50.7% from the half year ending FY2000-

01. The employee cost has fallen but the company will be charging an equal

expenditure of Rs 22.6 mn over the three quarters of the current fiscal amounting to

Rs 67.8 mn as the VRS expenditure incurred in June 2001 COMPARISON

BETWEEN HONDA AND BAJAJ The fight to dominate the premium motorcycle

segment has reached epic proportions between Pune based Bajaj Auto Limited and

Delhi based Hero Honda Limited. With the motorcycle market expected to grow at

around 20 per cent in 2003-2004 as compared to the growth of 16-17 percent, which

the industry averaged during the past five years, manufacturers are pulling out all

stops to address the top end segments of the industry. According to Brij Mohan Lal,

chairman Hero Honda, “Talks are on with joint venture partner Honda Motors of

Japan for the next generation engines and we are also planning some more powerful

bikes and are investing Rs 100 crore in this project.” Bajaj Auto has discovered the

goldmine in the executive segment, through the success of its executive category the

Pulsar that within a short span of time, has achieved sales of around 15,000 units per

month. According to Bajaj, “The 125cc ‘world bike’ is expected to give company to

Caliber-115 in the executive segment and this will be further supplemented by another

bike to be introduced in the last quarter of the current fiscal.” But with the first lap

gone to Hero Honda, will Bajaj take pole position remains to be seen. Bajaj: Can it

become a Hero (Honda)? Some time back Bajaj lost its crown as the largest selling

two-wheeler company in India to Hero Honda. The loss was all the more appalling

29

because while Bajaj is a multi product company manufacturing scooters (both geared

& un geared), motorcycles and three wheelers, Hero Honda is only into motorcycles.

The impact is also visible in the price performance of both Bajaj Auto & Hero Honda

in last one year. It is clear from the chart below that Hero Honda outperformed Bajaj

comprehensively. Relative Price Performance of Bajaj Auto v/s Hero Honda The

undoing for Bajaj was that it could not read the market signals well. The most

important being the shifting of the market to Motorcycles from scooters. Secondly

even though the company had presence in Motorcycles it was no match to Hero

Honda. Hero Honda with its fuel-efficient and maintenance free four stroke bikes just

swept the market. Bajaj with its range of two stroke vehicles could not survive the

onslaught from Hero Honda. With a loss of its pride, Bajaj started working on

measures to get back the number one position. The strategy was to stem the decline in

scooter sales and ramp up the bike sales. To boost bike Bajaj has planned to

aggressively launch a number of products so that it has presence over the entire gamut

of the motorcycle segment. The major initiatives for motorcycles include Launching a

stripped down version of Boxer, the Boxer – CT. The bike is priced below Rs35000

and is expected to help the scooter owner’s graduate to bike. The bike does not face

any stiff competition and thus should help the company shore up volumes. Launch of

Caliber Croma, an upgraded version of Caliber to take on the Hero Honda’s Splendor.

The success of this model holds the key as Splendor accounts for around half the sales

of Hero Honda. Launch of Eliminator a top end bike. The bike is priced upwards of

Rs85000 and is not expected to generate huge volumes but the launch is significant,

as it would remove Bajaj’s perception of being a laggard in technology and R&D

backup. Launch of Acer, a 100 CC bike to take on the CD100 of Hero Honda. The

company is shortly going to launch Pulsar a 100 CC indigenously developed vehicle.

The bike is positioned against Passion, the recently launched bike from Hero Honda

stable. Thus Bajaj will a presence right from the low end with Boxer CT to the luxury

end with Eliminator. The results of these initiatives are visible in the sales figures of

the first four months of the current fiscal. With a sales growth of 52% Bajaj has been

able to outperform Hero Honda’s growth rate of 31%. Bike Sales April - July 01 April

- July 00 Growth (%) Bajaj 170,737 111,794 52.7 Hero Honda 410,175 313,348 30.9

A part from these the company has also been successful in reversing the decline in

scooter sales. This is on back of launches of stripped down version of Chetek &

Super. The strategy was to encourage the scooter customers, who could not meet their

30

aspiration of buying a new scooter. The markets have taken notice of this with the

stock appreciating by around 13% in last two weeks. However the company still has

long way to go before it can anywhere near Honda. In fact according to company’s

own admission it will take them two years to reach the figure of 1,00,000 bikes a

month. However considering the fact that pace of growth at Hero has slowed down

Bajaj can definitely hope to narrow gap. Therefore in order to regain its crown it’s

important that performance of scooters also looks up. While the company has been

able to arrest the decline in scooters and in fact show growth at spurts, to be able to

show continues growth looks difficult. In such a scenario regaining the top slot looks

pretty difficult. Therefore it will be some time before it has a chance to become Hero.

For the time being considering the various initiatives it has taken it has definitely

become a side Hero. Market share of BAJAJ and HERO HONDA: - NEED FOR THE

STUDY I have chosen the topic, Behavior of rural consumer regarding the purchase

of Motorcycle – special reference to BAJAJ and HERO HONDA. Because the two-

wheeler industry is the growing sector in India. Two-wheeler industry is growing with

very fast speed. Every day the new models of motorcycle are introducing in the

market. BAJAJ and HERO HONDA are the major players of two wheeler industries.

There is very hard competition between BAJAJ and HERO HONDA. So to know the

position of the companies it is very necessary to know the behavior of consumer. So I

choose this topic to know that which company has good position in the minds of

consumer. And to know the factors which consumer consider at the time of purchase

of motorcycle. By this study we can know the behavior of consumer regarding the

two major companies of two wheeler industries.

31

32

HISTORY OF BAJAJ

Bajaj Auto limited is one of the largest two wheeler manufacturing company in India

apart from producing two wheelers they also manufacture three wheelers. The

company had started way back in 1945. Initially it used to import the two wheelers

from outside, but from 1959 it started manufacturing of two wheelers in the country.

By the year 1970 Bajaj Auto had rolled out their 100,000th vehicle. Bajaj scooters and

motor cycles have become an integral part of the Indian milieu and over the years

have come to represent the aspirations of modern India. Bajaj Auto also has a

technical tie up with Kawasaki heavy industries of Japan to produce the latest

motorcycles in India which are of world class quality The Bajaj Kawasaki eliminator

has emerged straight out of the drawing board of Kawasaki heavy industries. The core

brand values of Bajaj Auto limited includes Learning, Innovation, Perfection, Speed

and Transparency.

Bajaj Auto has three manufacturing units in the country at Akurdi, Waluj and

Chakan in Maharashtra, western India, which produced 2,314,787 vehicles in 2005-

06. The sales are backed by a network of after sales service and maintenance work

shops all over the country. Bajaj Auto has products which cater to every segment of

the Indian two wheeler market Bajaj CT 100 Dlx offers a great value for money at the

entry level. Similarly Bajaj Discover 125 offers the consumer a great performance

without making a big hole in the pocket.

33

PROFILE:

Founder Jamnalal Bajaj

Year of Establishment 1926

Industry Automotive - Two & Three Wheelers

Business Group The Bajaj Group

Listings & its codes BSE – Code: 500490; NSE - Code: BAJAJAUTO

Presence Distribution network covers 50 countries.

Dominant presence in Sri Lanka, Bangladesh,

Columbia, Guatemala, Peru, Egypt, Iran and

Indonesia.

Joint Venture Kawasaki Heavy Industries of Japan

Registered & Head Office Akurdi

Pune - 411035

India

Tel.: +(91)-(20)-27472851

Fax: +(91)-(20)-27473398

Works Akurdi, Pune 411035

Bajaj Nagar, Waluj Aurangabad 431136

Chakan Industrial Area, Chakan, Pune

411501

E-mail rahulbajaj@bajajauto.co.in

Website www.bajajauto.com

KEY PERSONS:

34

Board of Directors

Rahul Bajaj Chairman

Madhur Bajaj Vice Chairman & Whole-Time Director

Rajiv Bajaj Managing Director

Sanjiv Bajaj Executive Director

D.S. Mehta Whole-Time Director

Kantikumar R. Podar Director

Shekhar Bajaj Director

D.J. Balaji Rao Director

J.N. Godrej Director

S.H. Khan Director

Mrs. Suman Kirloskar Director

Naresh Chandra Director

Nanoo Pamnani Director

Manish Kejriwal Director

P Murari Director

Niraj Bajaj Director

Committees of the Board

35

Audit Committee  

S.H. Khan Chairman

D.J. Balaji Rao  

J.N. Godrej  

Naresh Chandra  

Nanoo Pamnani  

Shareholders’ & Investors’ Grievance committee 

D.J. Balaji Rao Chairman

J.N. Godrej  

Naresh Chandra  

S. H. Khan  

Remuneration committee

D.J. Balaji Rao Chairman

36

S.H. Khan  

Naresh Chandra  

Registered under the Indian Companies Act, VII of 1913

REGISTERED OFFICE Akurdi, Pune 411 035

WORKS Akurdi, Pune 411 035

Bajaj Nagar, Waluj Aurangabad 431 136

Chakan Industrial Area, Chakan, Pune 411 501

Bajaj Autos Ltd.

Bajaj Auto Limited

Type Public

Founded 1945

Headquarters Pune, India

Key people Rahul Bajaj (Chairman)

Revenue Rs. 1,01,063 billion (2006) or USD 1.87 billion

37

Net income Rs. 17,016 billion

Employees ???

Website www.bajajauto.com

Bajaj Auto is a major Indian automobile manufacturer. It is India's largest and the

world's 4th largest two- and three-wheeler maker. It is based in Pune, Maharashtra,

with plants in Waluj near Aurangabad, Akurdi and Chakan, near Pune. Bajaj Auto

makers motor scooters, motorcycles and the auto rickshaw.

COMPANY'S HISTORY

Bajaj Auto came into existence on November 29, 1945 as M/s Bach raj Trading

Corporation Private Limited. It started off by selling imported two- and three-

wheelers in India. In 1959, it obtained license from the Government of India to

38

manufacture two- and three-wheelers and it went public in 1960. In 1970, it rolled out

its 100,000th vehicle. In 1977, it managed to produce and sell 100,000 vehicles in a

single financial year. In 1985, it started producing at Waluj in Aurangabad. In 1986, it

managed to produce and sell 500,000 vehicles in a single financial year. In 1995, it

rolled out its ten millionth vehicles and produced and sold 1 million vehicles in a year.

Timeline of new releases

1971 - three-wheeler goods carrier

1972 - Bajaj Chetek

1976 - Bajaj Super

1977 - Rear engine Auto rickshaw

1981 - Bajaj M-50

1986 - Bajaj M-80, Kawasaki Bajaj KB100

1990 - Bajaj Sunny

1994 - Bajaj Classic

1995 - Bajaj Super Excel

1997 - Kawasaki Bajaj Boxer, Rear Engine Diesel Auto rickshaw

1998 - Kawasaki Bajaj Caliber, Legend(India's first four-stroke scooter)

2000 - Bajaj Safire

2001 - Eliminator, Pulsar

2003 - Caliber115, Bajaj Wind 125, Bajaj Pulsar

2004 - Bajaj CT 100, New Bajaj Chetek 4-stroke with Wonder Gear, Bajaj

Discover DTS-i

2005 - Bajaj Wave, Bajaj Avenger, Bajaj Discover

2006 - Bajaj Platina

2007 - Bajaj Pulsar-200

39

Scooters

Bajaj Sunny Bajaj Chetek

Bajaj Cub

Bajaj Super

Bajaj Wave

Bajaj Legend

Motorcycles

Kawasaki Eliminator

Bajaj Pulsar

Bajaj Kawasaki Wind 125

Bajaj Boxer

Bajaj CT 100

Bajaj Platina

Bajaj Caliber

Bajaj Discover

Bajaj Avenger

Bajaj Pulsar 220 DTS-Fi

Upcoming Models

Bajaj Krystal

Bajaj Blade

Bajaj Sonic

Bajaj XCD String

New Image40

The company, over the last decade has successfully changed its image from a scooter

manufacturer to a two wheeler manufacturer, product range ranging from Scooterettes

to Scooters to Motorcycle. Its real growth in numbers has come in the last 4 years

after successful introduction of a few models in the motorcycle segment. The

company is headed by Rahul Bajaj who is worth more than US$1.5 billion.

STRATEGIES USED BY BAJAJ AUTOMOBILE LTD

Bajaj claims that cost effectiveness has helped them to maintain their high

profit margins.

Bajaj claims to save hug on marketing and advertising cost.

Its marketing budget to focused only on a few brands and aimed at existing

customer to gives them greater confidence that they have bought a great

product.

Bajaj also has 32% stake in Austrian motorcycle maker KTM and has a

operating alliance with Japanese motorcycle giant Kawasaki.

Bajaj not only has these brand made Bajaj a strong player in the high end

market in India, but they also help as distributors for Bajaj bikes in foreign

market.

41

INTRODUCTION OF HERO HONDA

India has the largest number of two wheelers in the world with 41.6 million vehicles. India has a mix of 30 percent automobiles and 70 percent two wheelers in the country. India was the second largest two wheeler manufacturer in the world starting in the 1950’s with the birth of Automobile Products of India (API) that manufactured scooters. API manufactured the Lambrettas but, another company, Bajaj Auto Ltd. surpassed API and remained through the turn of the century from its association with Piaggio of Italy (manufacturer of Vespa).

The license raj that existed between the1940s to1980s in India, did not allow foreign

companies to enter the market and imports were tightly controlled. This regulatory

maze, before the economic liberalization, made business easier for local players to

have a seller’s market. Customers in India were forced to wait 12 years to buy a

scooter from Bajaj. The CEO of Bajaj commented that he did not need a marketing

department, only a dispatch department. By the year 1990, Bajaj had a waiting list

that was twenty-six times its annual output for scooters. The motorcycle segment had

the same long wait times with three manufacturers; Royal Enfield, Ideal Jaws, and

Escorts. Royal Enfield made a 350cc Bullet with the only four-stroke engine at that

time and took the higher end of the market but, there was little competition for their

customers. Ideal Jaws and Escorts took the middle and lower end of the market

respectively. In the mid-1980s, the Indian government regulations changed and

permitted foreign companies to enter the Indian market through minority joint

ventures. The two-wheeler market changed with four Indo-Japanese joint ventures:

42

Hero Honda, TVS Suzuki, Bajaj Kawasaki and Kinetic Honda. The entry of these

foreign companies changed the Indian market dynamics from the supply side to the

demand side. With a larger selection of two-wheelers on the Indian market,

consumers started to gain influence over the products they bought and raised higher

customer expectations. The industry produced more models, styling options, prices,

and different fuel efficiencies. The foreign companies new technologies helped make

the products more reliable and with better quality. Indian companies had to change to

keep up with their global counterparts.

BOARD OF DIRECTORS

No. Name of the Directors Designation

1 Mr. Brij mohan Lal Munjal Chairman & Whole-time Director

2 Mr. Pawan Munjal Managing Director

3 Mr. Toshiaki Nakagawa Jt. Managing Director

4 Mr. Takao Eguchi Whole-time Director

5 Mr. Satyanand Munjal Non-executive Director

6 Mr. Om Prakash Munjal Non-executive Director

7 Mr. Tatsuhiro Oyama Non-executive Director

8 Mr. Masahiro Takedagawa Non-executive Director

9 Mr. Narinder Nath Vohra Non-executive & Independent Director

10 Mr. Pradeep Dinodia Non-executive & Independent Director

11 Gen.(Retd.) Ved Prakash Malik Non-executive & Independent Director

43

12 Mr. Analjit Singh Non-executive & Independent Director

13 Dr. Pritam Singh Non-executive & Independent Director

14 Ms. Shobhana Bhartia Non-executive & Independent Director

15 Dr. Vijay Laxman Kelkar Non-executive & Independent Director

Hero Honda Motorcycle Ltd.

Type Public company BSE:HEROHONDA M

Founded January 19, 1984 in Gurgaon, Haryana, India

Headquarters Haryana, India

Key people

Om Prakash Munjal, Founder

Mr. Brijmohan Lall Munjal, ChairmanMr. Toshiaki Nakagawa, Joint Managing Director

Mr. Pawan Munjal, Managing DirectorIndustry Automotive

Products Motorcycles, Scooters

Revenue U$ 2.8 billion

Website http://www.herohonda.com/site/home/home.asp

44

HERO HONDA HEADQUARTERS

Hero Honda Motorcycles Limited is an Indian manufacturer of motorcycles and

scooters. Hero Honda is a joint venture that began in 1984 between the Hero group of

India and Honda from Japan. It has been the world's biggest manufacturer of 2-

wheeled motorized vehicles since 2001, when it produced 1.3 million motorbikes in a

single year. Hero Honda's Splendor is the world's largest selling motorcycle. Its 2

plants are in Dharuhera and Gurgaon, both in Haryana, India. It specializes in dual use

motorcycles that are low powered but very fuel efficient.

[Models]

Bikes

Hero Honda Splendor Plus

Hero Honda Passion Plus

Hero Honda Karizma

Hero Honda CBZ

Hero Honda Super Splendor

Hero Honda CD Dawn

Hero Honda CD Deluxe

Hero Honda Achiever

45

Hero Honda Glamour

Hero Honda Ambition

Hero Honda "Splendor" Model

COMPANY PROFILE

“Hero”, is the brand name used by the Munjal brothers in the year 1956 with the

flagship company Hero Cycles. The two-wheeler manufacturing business of bicycle

components had originally started in the 1940’s and turned into the world’s largest

bicycle manufacturer today. Hero is a name synonymous with two-wheelers in India

today. The Munjals roll their own steel, make free wheel bicycle critical components

and have diversified into different ventures like product design. The Hero Group

philosophy is: “To provide excellent transportation to the common man at easily

affordable prices and to provide total satisfaction in all its spheres of activity”. The

Hero group vision is to build long lasting relationships with everyone (customers,

workers, dealers and vendors). The Hero Group has a passion for setting higher

standards and “Engineering Satisfaction” is the prime motivation, way of life and

work culture of the Group.

In the year 1984, Mr. Brijmohan Lal Munjal, the Chairman and Managing Director of

Hero Honda Motors (HHM), headed an alliance between the Munjal family and

Honda Motor Company Ltd. (HMC). HHM Mission Statement is: “We, at Hero

Honda, are continuously striving for synergy between technology, systems, and 46

human resources to provide products and services that meet the quality, performance,

and price aspirations of our customers. While doing so, we maintain the highest

standards of ethics and societal responsibilities, constantly innovate products and

processes, and develop teams that keep the momentum going to take the company to

excellence in the new millennium”. This alliance became one of the most successful

joint ventures in India, until the year 1999 when HMC had announced a 100%

subsidiary, Honda Motorcycle & Scooter India (HMSI). This announcement caused

the HHM stock price to decrease by 30 percent that same day. Munjal had to come up

with some new strategic decisions as, HMSI and other foreign new entry companies

were causing increased intensity of rivalry for HHM.

GROWTH The business growth of Hero Honda has been phenomenal throughout its

early days. The Munjal family started a modest business of bicycle components. Hero

Group expanded so big that by 2002 they had sold 86 million bicycles producing

16000 bicycles a day. Today Hero Honda has an assembly line of 9 different models

of motorcycles available. It holds the record for most popular bike in the world by

sales for Its Splendor model. Hero Honda Motors Limited was established in joint

venture with Honda Motors of Japan in 1984, to manufacture motorcycles. It is

currently the largest producer of Two Wheelers in the world. It sold 3 million bikes in

the year 2005-2006. Recently it has also entered in scooter manufacturing, with its

model PLEASURE mainly aimed at girls. The Hero Group has done business

differently right from the start and that is what has helped them to achieve break-

through in the competitive two-wheeler market. The Group's low key, but focused,

style of management has earned the company plaudits amidst investors, employees,

vendors and dealers, as also worldwide recognition.The growth of the Group through

the years has been influenced by a number of factors:

Just-in-Time

The Hero Group through the Hero Cycles Division was the first to introduce the

concept of just-in-time inventory. The Group boasts of superb operational

efficiencies. Every assembly line worker operates two machines simultaneously to

save time and improve productivity. The fact that most of the machines are either

developed or fabricated in-house, has resulted in low inventory levels. In Hero Cycles

Limited, the just-in-time inventory principle has been working since the beginning of

47

production in the unit and is functional even till date.. This is the Japanese style of

production and in India; Hero is probably the only company to have mastered the art

of the just-in-time inventory principle.

Ancillarisation

An integral part of the Group strategy of doing business differently was providing

support to ancillary units. There are over 300 ancillary units today, whose production

is dedicated to Hero's requirements and also a large number of other vendors, which

include some of the better known companies in the automotive segment. Employee

Policy: Another Striking feature within the Hero Group is the commitment and

dedication of its workers. There is no organized labor union and family members of

employees find ready employment within Hero. The philosophy with regard to labor

management is "Hero is growing, grow with Hero." When it comes to workers'

benefits, the Hero Group is known for providing facilities, further ahead of the

industry norms. Long before other companies did so, Hero was giving its employees a

uniform allowance, as well as House Rent Allowance (HRA) and Leave Travel

Allowance (LTA). Extra benefits took the form of medical check-ups, not just for

workers, but also for the immediate family members.

Dealer Network

The relationship of Hero Group with their dealers is unique in its closeness. The

dealers are considered a part of the Hero family. A nation-wide dealer network

comprising of over 5,000 outlets, and have a formidable distribution system in place.

Sales agents from Hero travels to all the corners of the country, visiting dealers and

send back daily postcards with information on the stock position that day, turnover,

fresh purchases, anticipated demand and also competitor action in the region. The

manufacturing units have a separate department to handle dealer complaints and

problems and the first response is always given in 24 hours.

Financial Planning

The Hero Group benefits from the Group Chairman's financial acumen and his grasp

on technology, manufacturing and marketing. Group Company, Hero Cycles Limited

has one of the highest labor productivity rates in the world. In Hero Honda Motors

48

Limited, the focus is on financial and raw material management and a low employee

turnover.

Quality

Quality at Hero is attained not just by modern plants and equipment and through latest

technology, but by enforcing a strict discipline. At the Group factories, attaining

quality standards is an everyday practice - a strictly pursued discipline. It comes from

an amalgamation of the latest technology with deep-rooted experience derived from

nearly four decades of hard labor. It is an attitude that masters the challenge of growth

and change - change in consumers' perceptions about products and new aspirations

arising from a new generation of buyers. Constant technology up gradation ensures

that the Group stays in the global mainstream and maintains its competitive edge.

With each of its foreign collaborations, the Group goes onto strengthen its quality

measures as per the book. The Group also employs the services of independent

experts from around the world to assist in new design and production processes.

Diversification

Throughout the years of enormous growth, the Group Chairman, Mr. Lal has actively

looked at diversification. A considerable level of backward integration in its

manufacturing activities has been ample in the Group's growth and led to the

establishment of the Hero Cycles Cold Rolling Division, Munjal and Sunbeam

Castings, Munjal Auto Components and Munjal Showa Limited amongst other

component-manufacturing units.

Then there were the expansion into the automotive segment with the setting up of

Majestic Auto Limited, where the first indigenously designed moped, Hero Majestic,

went into commercial production in 1978. Then came Hero Motors which introduced

Hero Puch, in collaboration with global technology leader Steyr Daimler Puch of

Austria. Hero Honda Motors was established in 1984 to manufacture 100 cc

motorcycles.

49

The Hero Group also took a venture into other segments like exports, financial

services, information technology, which includes customer response services and

software development. Further expansion is expected in the areas of Insurance and

Telecommunication.

The Hero Group's phenomenal growth is the result of constant innovations, a close

watch on costs and the dynamic leadership of the Group Chairman, characterized by a

culture of entrepreneurship, of right attitudes and building stronger relationships with

investors, partners, vendors and dealers and customers.

Marketing strategy of hero Honda Company

Hero Honda claims that cost effectiveness has helped them to maintain their

high profit margins.

Hero Honda claims to save hug on marketing and advertising cost.

Its marketing budget to focused only on a few brands and aimed at existing

customer to gives them greater confidence that they have bought a great

product.

Hero Honda is not only has these brands made Hero Honda a strong player in

the high end market in India.

Hero Honda also helps as distributors for Hero bikes in foreign market.

50

CHAPTER: 2

REVIEW

OF

LITERATURE

51

52

REVIEW OF LITERATURE

Research conducted by Cuthbert son & Bridson (2006) highlights the specific

marketing strategies employed by retailers to increase customer loyalty. The research

presents the internet as a potential medium of driving loyalty in the consumers. Fiorito

& Lafarge (1984) on the other hand have conducted a research on smaller retailers

and what kind of marketing strategies they have employed to stay competitive in the

retail industry. The two types of marketing strategies which are highlighted in the

research as being commonly used by small retailers pertain to integrated marketing

strategy and differential marketing.

The focus of the companies in the retail industry is to effectively market and

differentiate themselves while providing the customers with what they demand. “The

mission now is ruthless efficiency, eliminating the losers and refocusing budgets on

genuinely profitable activities” (Parsons, 1992). A study conducted by McMaster

(1987), highlighted the importance of market strategies pertaining to branding which

aid the retail business to initiate growth and positioning for itself in the market.

Another significant research study which contributes to the knowledge available for

the retail industry pertains to the different operations of the retailers in terms of the

services they provide to niche markets. The limited service offering and marketing

strategy for catering to niche markets is analyzed by Campo & Gijsbrechts (2004),

who state that supermarkets should adjust their product and service offerings

according to the locality in which they are operating. This enables them to customize

their service for the customers employ loyalty and community support based

marketing strategies. “The study concludes that sales growth has been the marketing

strategy demonstrating highest affinity to profit performance. Apart from this,

increase in market share, capital-to-labor ratios, and the average inventory level are

keys to evaluating and selecting retail marketing strategies which promise high

profitability.” (Cronin, 1985)

Marketing literature is considerably fragmented about strategies which should

perform in adversity. For example, some gurus, consultants, theorist mention the

53

importance of industry factors, some urge firms to focus on developing their dynamic

capabilities and higher-order learning processes, some advocate a market orientation

or some urge managers to carefully segment markets, focus on innovations, and

develop brand equity (Hunt, 2009 each of these approaches may be viewed as

conflicting recommendations in times of adversity. Companies need to change some

of their strategies that may be used by a multi-disciplinary team to support

organizations in overcoming the challenge (Atkinson et al, 2010).

Some research in management discusses that recession period requires a turnaround

strategy and turnarounds are of increasing relevance (Schendel, Patton, and Riggs

1976; Ham brick and Schuster 1983; Hofer 1980). Marketing plays a key role in a

number of decision areas (Cardiff, 1975) and, although the best time to prepare for a

recession is while the economy’s still flourishing (Lovelock, 1997), companies need

to understand changed customers in recession.

Some firms are caught by surprise when recession strikes and sliding profits may in

panic lead to efforts to curtail costs, often taking such forms as laying off employees,

cutting back service hours, skimping on maintenance, and eliminating value-added

service features (Lovelock, 1997).

The effective firms see this situation a chance as creating and manufacturing

customers, rather than creating and manufacturing products or services in both

recession and in prosperity (Christopher, 1975).In recession period, all phases of the

marketing mix can contribute (Lynn, 1975).

Companies may offer special guarantees and reasonable prices, arrange “trial periods”

for machines, accept success-dependent payment, communicate tangible, visible

benefits, develop new business models and promotion can be rational and spend more

for advertising (Simon, 2009; Bohlen et al, 2010; Kotler and Caslione, 2009;

Lynn,1975). Increasing interdependencies have been developed between firms and

between markets and being market oriented has become the main source of

competitive advantage (Mattson, 2009; Pelham and Wilson, 1996). People expect

firms to address social problems linked to what they sell (Quelch and Jochz, 2009).

In the recession is the time for firms to utilize its marketing departments for guidance

and not only must companies reduce costs and generate greater efficiencies, they must

54

also produce and market profitably the products (Cundiff, 1975). Harvard professor

John Quelch advises for revising marketing plans in a downturn.

Due to the small amount of targeted research on the marketing strategies of artists,

Craft persons, and small craft or art-related businesses, research from related fields is

useful in understanding the narrower topic. A review of research from the areas

offline art Marketing and small business marketing, as well as general craft and art-

related business Strategy, uncovered three major themes that are relevant to the

marketing of small craft and art-related businesses. The first theme is that craft and

art-related businesses base their Marketing strategies on different goals and

definitions of success than traditional profit centered businesses (Fill is, 2000, p. 131;

Paige & Littre, 2002). Secondly, creativity in Marketing is important (Fill is, 2000;

Paige & Littrell, 2002) and the Internet may be a Significant new area where artists

and related businesses can apply their creative marketing Approaches (Clarke &

Flaherty, 2002; Lovelace, 1998; Poon & Swatman, 1999; Torres, 2002, p. 236;

Wilkinson, 1996). Finally, strategic alliance networks and general Networking

between artists and between small craft or art-related businesses can help all of the

parties involved develop their general marketing practices as well as increase access

to Technologically-based marketing avenues (Clarke & Flaherty, 2002; Lovelace,

1998; Paige& Littrell, 2002; Torres, 2002).People who run craft and art-related

business often start their business for different Reasons than other traditional profit-

centered business owners. “Intrinsic factors such as Personal satisfaction and the

opportunity to elevate the craft tradition” are some of the Criteria craft retailers use to

define success (Paige & Littrell, 200, p. 1). Fills (2000) found that “the typical arts

and crafts microenterprise has been shown to take risks in terms of both the products

itself and in the way in which the business is developed” (p. 131). The dedication to

creativity and more personal business goals leads to the development of unique

marketing strategies. Paige and Littrell’s (2002) qualitative interviews of twelve craft

Retailers in the southern highlands region of the U.S. found that the businesses

commonly noted “educating their customers about crafts, the artisans who produced

the crafts, and the culture of the region” (p. 318) as a main marketing strategy.

Creative strategies like this example and others, such as targeting niche, arts-exclusive

markets (Clarke & Flaherty, 2002), and pooling resources with other artists or small

55

arts-related businesses (Torres, 2002), can help the business owners to achieve their

unique personal and art-based Business goals. This creativity and originality in

marketing is important to the success of small art and craft businesses. “To

differentiate themselves from larger retailers who offer more standardized product

assortments, smaller retailers perform better with more innovative, more unique, and

higher quality product lines” (Paige & Littrell, 2002, p. 316). The Internet may be a

beneficial avenue in which to pursue these innovative arts marketing strategies.

Unfortunately, not much research has yet been done on Internet marketing because

the technology is new and rapidly changing. Even the research that was done just five

to ten years ago is dated. But despite these limitations, many researchers suggest the

Internet as an area where small businesses and artists can gain exposure to a larger

audience (Clarke& Flaherty, 2002, p.149; Lovelace, 1998, Paige & Littrell, 2002, p.

320; Poon & Swatman, 1999; Wilkinson, 1996). Poon and Swatman (1999) also

found that even though small Businesses may begin to use the internet because of the

perceived benefits they only Believe their businesses will gain, as opposed to actual

direct quantitative benefits, the business owners reported that they did realize actual

benefits in the form of new opportunities and the useful function of the Internet for

communication. Researchers have found that artists are sometimes “disconcerted

about technology use” (Clarke & Flaherty, 2002, p. 146) and that small business

owners lack the resources and knowledge to launch an Internet arm of their operations

(Poon & Swatman, 1999).These obstacles can be overcome by the innovative

implementation of strategic network alliances between artists or small arts-related

businesses (Torres, 2002). A case study of a network of ceramic artists in Ireland

conducted by Torres (2002) found that by collaborating as a network and hiring a

project manager, the group was able to book advertising space, send press releases,

and create a website, all of which none of the artists could not have accomplished on

their own. Paige and Littrell (2002) also found that collaborative strategies, like

networking among family, friends, and business peers, as well as Internet marketing

were strategies utilized by craft retailers. Lovelace (1998) presents the Internet as a

place to find a community of artists or craft people with which to network. As the

Internet continues to become a more major marketing and commercial arena, small

businesses are going to feel pressure to engage in e-commerce. “If a small business

has a high percentage of customers and competitors online, then not adopting Internet

commerce will be a competitive disadvantage” (Poon & Swatman, 1999, p. 13).

56

Online communities or group sites produced by a group of artists or business owners

engaged in a strategic alliance or network could be a less overwhelming step into the

online world. Research on the marketing strategies used by both small businesses and

art-related business has been conducted in many ways, including by interviews

(Lovelace, 1998; Paige & Littrell, 2002; Wilkinson, 1996), surveys (Clarke &

Laherty, 2002; Paige & Littrell,(2002), and case studies (Torres, 2002; Poon &

Swatman, 1999). All of these methods pointed to three major themes that can help

researchers to better understand the unique marketing challenges presented by small

craft and art-related businesses: businesses centered around art or craft have different

definitions of success and therefore need different marketing strategies; the Internet

may help art-related businesses to implement creative marketing strategies; and,

networking or forming strategic alliances may help art and craft business to find

greater success in general marketing and on the Internet. Greater research is needed in

the narrow field of marketing by independent artists and craft persons, and also in the

ever-evolving field of art and craft marketing on the Internet. An additional area of

research might explore how the personal goals of artistic expression, creativity, work

flexibility, and overall happiness affect the marketing strategies employed by artists

and craft persons. Researchers also need to explore the utilization of the vast potential

of the Internet for global exposure and creation of community between artist’s and

craft persons.

57

CHAPTER: 3

RESEARCH

METHODOLOGY

58

RESEARCH METHODOLOGY

It is well known fact that the most important step in marketing research process is to

define the problem. Choose for investigation because a problem well defined is half

solved. That was the reason that at most care was taken while defining various

parameters of the problem. After giving through brain storming session, objectives

were selected and the set on the base of these objectives. A questionnaire was

designed major emphasis of which was gathering new ideas or insight so as to

determine and bind out solution to the problems.

OBJECTIVES OF THE RESEARCH

These objectives are the following:

1. To analyze the customer preference.

2. To know which manufacturer is providing better services.

3. Specific objectives: - For achieving the main objectives, we have some

specific objectives that will help us for fulfillment of the project report.

4. To know the factors which affect the consumer behavior regarding the

two wheeler purchase?

5. To Know the Advertisement source which more attract the consumer.

59

6. To Know the Promotion Schemes which more attract the consumer?

7. To know the future plans of the consumer.

8. To analyze after sales services of bikes.

9. To study the behavioral factors of consumers in motor bikes.

10. To suggest various factors to improve sales.

DATA SOURCE

Research included gathering both primary and secondary data. Primary data

is the first hand data, which are selected a fresh and thus happen to be original in

character. Primary Data was crucial to know various customers and past consumer

views about bikes and to calculate the market share of this brand in regards to other

brands.

Secondary data are those which has been collected by some one else and

which already have been passed through statistical process. Secondary data has been

taken from internet, newspaper, magazines and companies web sites.

RESEARCH APPROACH

The research approach was used survey method which is a widely used

method for data collection and best suited for descriptive type of research survey

includes research instrument like questionnaire which can be structured and

unstructured. Target population is well identified and various methods like personal

interviews and telephone interviews are employed.

SAMPLING UNIT

It gives the target population that will be sampled. This research was carried in

Panchkula (Haryana).These were 90 respondents.

60

DATA COMPLETION AND ANALYSIS

After the data has been collected, it was tabulated and findings of the project

were presented followed by analysis and interpretation to reach certain conclusions.

SCOPE

My project was based on the Marketing Strategy of Two Wheeler Segment in

Automobile Industry OF HERO HONDA, AND BAJAJ BIKES and data was taken in

the Haryana state panchkula City.

LIMITATIONS

1. Research work was carried out in one Distt (panchkula) Haryana only the finding

may not be applicable to the other parts of the country because of social and

cultural differences.

2. The sample was collected using connivance-sampling techniques. As such result

may not give an exact representation of the population.

3. Shortage of time is also reason for incomprehensiveness.

4. The views of the people are biased therefore it doesn’t reflect true picture.

61

CHAPTER: 4

DATA ANALYSIS OF INTERPRETATION

62

ANALYSIS OF INTERPRETATION

63

INTERPRETATION: - Out of the sample size of 90 customers, 30 customers are of

Hero Honda, 30 are of Bajaj and 30 customers of TVs bikes are taken into

consideration.

Q2) Which Model do you Have?

Hero Honda Bajaj TVS

Splendor 13 CT 100 5 Flame 4

Passion 5 Discover 11 Star City 9

Karizma 2 Pulsar 10 Apache 7

Any other 10 Any other 4 Any other 10

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Q1) Which bike do you have?

Hero Honda 30

Bajaj 30

Any other 30

HERO HONDA

INTERPRETATION: - In Hero Honda mostly the customers are having splendor

while the ratio of the customers using Passion, Karizma and other bikes are

comparatively low.

BAJAJ

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INTERPRETATION: - In Bajaj the customers are giving more preference to Discover

and Pulsar models.

Q3) In which family Income level do you Fall?

100000-200000 22

200000-300000 45

300000-400000 23

above 400000 10

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INTERPRETATION: - The maximum numbers of customers that are using these

bikes fall in the income group of 200000-300000. While this ratio is minimum in case

of customers whose income level fall between 300000-400000

Q4) For how long do you own a bike?

0-1 year 34

1-2 year 29

2-3 year 26

above 3 year 11

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INTERPRETATION: - It is observed that mostly the customers are having

new bikes.

Q5) For what purpose do you use your Motor Bike?

Hero Honda Bajaj TVS

Office Purpose 13 42 38

Personal purpose 17 15 27

Joy Purpose 10 18

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10

Other 40 15 15

INTERPRETATION:- The customers are using their bikes mostly for official and

personal purpose.

Q6) How do you come to know about this Motor Bike?

Hero Honda Bajaj TVS

Newspaper 28 33 22

Television 22 28 18

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Magazine 8 16 28

Friends & Relative 37 13 22

INTERPRETATION: - It is observed that the awareness of Hero Honda bikes

mostly comes from friends while of Bajaj and TVS the awareness comes from

newspapers and televisions.

Q7) Does Advertisement Influence your decision in choosing a Motor

Bike?

Yes 65

No 15

Can’t say 10

70

INTERPRETATION: - Out of the sample size of 90 customers, 65 customers agrees

with the fact that advertisements play a very significant role in influencing their

behavior to choose the bike. On the other hand 15 customers do not agree to this fact.

While remaining 10 customers are not sure about it.

Q8 Are you satisfied with the performance of the bike that you are

currently having?

Yes 55

No 28

Can’t say 7

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INTERPRETATION:- Out of the sample size of 90 customers, 55 customers says that

they are satisfied with the performance of their bikes. On the other hand 28 customers

are not satisfied with the performance of the bikes that they are having. While the

remaining 10 customers are unable to say anything.

Q9) Do you have full knowledge about Bikes before buying?

Hero Honda Bajaj

Yes 42 34

37 27

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No

Can’t Say 11 29

INTERPRETATION:- It is observed that most of the customers are having

full knowledge of the bike before purchasing.

Q10) Which Factor below Influence your decision?

Hero Honda Bajaj

Price 17 22

Mileage 28 15

Quality 11 20

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Resale Value 12 14

Status symbol 32 19

HERO HONDA

INTERPRETATION:- In Hero Honda bikes the mileage of the bike and the value that

it adds to the status symbol of the customers influences the decision criteria of most of

the customers.

BAJAJ

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INTERPRETATION:- In Bajaj bikes customers gets more influenced by the price and

quality of the bike and also they think that it adds value to their prestige.

75

76

Q11) How would you rate the following factors of Bikes with respect to

different company?

Hero Honda Bajaj

Mileage 74% 72%

Price 68% 65%

Pick up 70% 80%

Maintenance 58% 62%

Look & Shape 85% 80%

Brand Image 53% 55%

INTERPRETATION: - It is observed that in rating of different features of different

bikes people give maximum rating to the look and shape of the bike. At the second

level they give their rating to the pick up. At the third level they rate mileage. And at

the fourth level they give points to maintenance. At last they rate price and brand

image.

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Q12) If new Bike with good features comes in, then would you

like to change your bike?

Hero Honda Bajaj

Yes 10 16

No 16 11

Can’t say 4 3

INTERPRETATION:- It is observed that the customers of Hero Honda bikes are not

ready to change their bikes even if a new bike comes in with good features. While

majority of the customers of Bajaj and TVS are ready to change their bikes if new

bike provides some good features to them.

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CHAPTER: 5

FINDINGS

FINDINGS

79

During this research project I came in to contact with many customers who are

having bikes. It has been found that in Hero Honda mostly the customers are having

splendor while the ratio of the customers using Passion, Karizma and other bikes are

comparatively low. In Bajaj the customers are giving more preference to Discover and

Pulsar models and in case of TVS Bikes the customers are givig more preference to

the other models rather than Flame,Starcityand Apache. The maximum numbers of

customers that are using these bikes fall in the income group of 200000-300000.

It has been observed that the customers are using their bikes mostly for

official and personal purpose. It is observed that the awareness of Hero Honda bikes

mostly comes from friends while of Bajaj and TVS the awareness comes from

newspapers and televisions. Out of the sample size of 90 customers, 65 customers

agree with the fact that advertisements play a very significant role in influencing their

behavior to choose the bike. On the other hand 15 customers do not agree to this fact.

While remaining 10 customers are not sure about it. When the customers are asked

that are they satisfied with the performance of their bikes then most of them agrees to

the fact. Out of the sample size of 90 customers, 55 customers says that they are

satisfied with the performance of their bikes. On the other hand 28 customers are not

satisfied with the performance of the bikes that they are having. While the remaining

10 customers are unable to say anything. It is observed that most of the customers are

having full knowledge of the bike before purchasing. It has been seen that In Hero

Honda bikes the mileage of the bike and the value that it adds to the status symbol of

the customers influences the decision criteria of most of the customers. In Bajaj bikes

customers gets more influenced by the price and quality of the bike and also they

think that it adds value to their prestige. While in case of TVS bike the economic

price of the bikes influences the buying behavior of the customers. It is observed that

in rating of different features of different bikes people give maximum rating to the

look and shape of the bike. At the second level they give their rating to the pick up. At

the third level they rate mileage. And at the fourth level they give points to

maintenance. At last they rate price and brand image.

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It is observed that the customers of Hero Honda bikes are not ready to change

their bikes even if a new bike comes in with good features. While majority of the

customers of Bajaj and TVS are ready to change their bikes if new bike provides

some good features to them.

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CHAPTER: 6

Conclusion

82

Conclusion

1. Most of the Flame, Apache, Pulsar, CBZ & Karizma are purchased by young

generation 18 to 30 years because they prefer stylish looks and rest of the

models of Hero Honda, TVS and Bajaj are purchased more by daily users who

needs more average of bikes than looks.

2. Hero Honda is considered to be most fuel-efficient bike on Indian roads.

3. Service & Spare parts are available throughout India in local markets also.

4. While buying a motorcycle, economy is the main consideration in form of

maintenance cost, fuel efficiency.

5. Majority of the respondent had bought their motorcycle more than 3 years.

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RECOMMENDATIONS

1. Bajaj should introduce some more models having more engine power.

2. Hero Honda should think about fuel efficiency in case of upper segment bikes.

3. More service centers should be opened.

4. Maintenance cost and the availability of the spare parts should also be given due

importance.

5. They also introduce some good finance/discount schemes for students.

6. The price should be economic.

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BIBLIOGRAPHY

1. www.herohonda.com

2. www.google.com

3. www.bajaj.com

4. www.twowheeler.com

5. www.extrememachines.com

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QUESTIONNAIRE

NAME: - ………………………………………………

CONTACT NO ……………………………………….

AGE:- 15-20 20-25

25-30 Above 30

OCCUPATION:- Businessman Employee

Student Other

Q1) Which Bike do you have?

Hero Honda Bajaj TVS

Q2) Which Model do you have?

Hero Honda: - Splendor Passion

Karizma Other

Bajaj: - CT 100 Discover

Pulsar Other

TVS:- Flame Apache

Star city Other

Q3) In which Family Income do you Fall?

100000-200000 200000-300000

300000-400000 Above 400000

Q4) For how long do you own a Bike?

0-1 year 1-2 year

2-3 year above 3 years

86

Q5) For what purpose do you use your Motor Bike?

Office Purpose Personal Purpose

Joy Purpose Other

Q6) How do you come to know about this Motor Bike?

Newspaper Television

Magazines Friends / Relatives

Q7) Are you satisfied with the performance of the bike that you are currently having?

Yes No can’t say

Q8) Does Advertisement Influence your decision in choosing a Motor Bike?

Yes No can’t say

Q9) Do you have full knowledge about Bikes before buying?

Yes No can’t say

Q10). Which factor below influence your decision?

Price Mileage Quality

Resale Value Status Symbol

Q11) How would you rate the following factors of bikes with respect to different companies?

Hero Honda BajajTVS

Mileage

Price

Pick up

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Maintenance

Look/Shape

Brand Image

Q12) If new bike with good feature comes in, then would you like to change your bikes?

Yes No Can’t say

Q13) Any Suggestions for Company

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Date: (Signature)

88