amir two wheeler automobile marketing strategy

8/7/2019 AMIR Two Wheeler Automobile Marketing Strategy

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TWO WHEELER AUTOMOBILE INDUSTRIES

TABLE OF CONTENT

Objective of the project

Introduction to Indian automobile industry

BCG matrix representation of automobile sector among various sectors

Overview of two-wheeler sector

Fleet composition of all vehicles

Two-wheeler fleet composition in India

Structure of two-wheeler industry

Usage pattern of two-wheeler in India

Key players in two wheeler industry

Introduction & Product mix Hero Honda & Bajaj (competitor)

4 P¶s of marketing of Hero Honda

Market segmentation, Targeting and Positioning of Hero Honda.

Porters five force model for Hero Honda

SWOT analysis of Hero Honda (Karizma)

SWOT analysis of Bajaj (Pulsar)

Comparison of advertising strategy of Hero Honda and Bajaj

Future challenges ,Plans and Suggestions



OBJECTIVE OF THE PROJECT:-

The main objectives of the Project study are:

y Detailed analysis of Automobile industry which is gearing towards international

standards.

y To conduct market research with regard to two-wheeler automobile industry and

understand its marketing strategies.

y Analyze the impact of qualitative factors on industry¶s and company¶s prospects

y Comparative analysis of major tough competitor.

y To understand the current trends in two-wheeler automobile industry.



INTRODUCTION TO INDIAN AUTOMOBILE INDUSTRY

Automobile is one of the largest industries in global market. Being the leader in

product and process technologies in the manufacturing sector, it has been recognized

as one of the drivers of economic growth. During the last decade, well directed effortshave been made to provide a new look to the automobile policy for realizing the

sector's full potential for the economy. Aggressive marketing by the auto finance

companies have also played a significant role in boosting automobile demand,

especially from the population in the middle income group.

A Nations economy is well known from its transport system. For instant and rapid

growth in economy, a well-developed and well-networked transportation system is

essential. As India's transport network is developing at a fast pace, Indian Automobile

Industry is growing too. Also, the Automobile industry has strong backward and

forward linkages and hence provides employment to a large section of the population.

Thus the role of Automobile Industry is very essential in Indian economy. Various

types of vehicles are manufactured by the Automobile Industry. Indian Automobile

Industry includes the manufacturing of trucks, buses, passenger cars, defence

vehicles, two-wheelers.

The two-wheeler manufacturing is dominated by companies like TVS, Honda

Motorcycle & Scooter India (Pvt.) Ltd., Hero Honda, Yamaha, Bajaj, etc.

The automobile industry in the country is one of the key sectors of the economy in

terms of the employment opportunities that it offers. The industry directly employs

close to around 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.



BCG Matrix Representation of Automobile Sector among various Sectors:-

In an economy, different industries are present and different industries have

different growth rate as compared to the growth of the economy. In an economy,

there are a number of major industries and they all occupy different positions in

the BCG matrix according to their growth and contribution towards the economy.

In the Indian economy, some of the major sectors are FMCG, automobiles,

banking and insurance, steel, telecom, software, pharmacology and retail sectors

and these can be placed in the different positions in the matrix as shown below:

INDUSTRY BCG MATRIX

BCG matrix is used to determine the relative position of the companies of an industry

or different SBU¶s of any institution, in terms of the market growth rate and the

High LowRelative market share

AUTOMOBILES

M

a

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k

e

t

G

r

o

w

t

h

HighBanking &

Insurance

Software

STARS QUESTION MARKS

Retail

Telecom

CASH COWS

Low

FMCG

DOGS



market share of the company in the industry. In the Indian automobile sector, the

major players are Maruti Suzuki Limited, General motors, Mahindra and Mahindra,

Tata Motors, Hero Honda and Bajaj auto. In the BCG matrix, the companies are

placed in one of the following four categories: Star, Cash Cows, Dogs and Question

marks. In the Stars we place the companies with high market growth and high market

share, cash cows are the companies who have low market growth rate and high

relative market share, the category of the question marks include the companies with

low relative market share and high market growth rate and dogs include the

companies who have low relative market share and low market growth rate.

OVERVIEW OF TWO WHEELER SECTOR

Two Wheeler Industry

Indian two -wheeler contributes the largest volumes amongst all the segments in

automobile industry. This segment can be broadly categorized into 3 sub-segments

viz.; scooters, motorcycles and mopeds. 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 2008-09. The Euro

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

stroke segment to install catalytic converters. All the new models are now being

replaced by 4-stroke motorcycles. Excise duty on motorcycles has been reduced from

32% to 24%, resulting in price reduction, which has aided in propelling the demand

for motorcycles.

Within the two-wheeler industry, motorcycle segment grew at a phenomenally high

rate of 35% as against a deceleration of 3% for scooters and 27% for mopeds. In fact,

motorcycle has been taking away the share of scooters and mopeds in a 4.3 million

two-wheeler market and surging ahead with its market share of 68%. The increasing



demand from semi-urban and rural segments may have caused this positive shift

towards motorcycles. Also, easy credit coupled with low interest rate regime,

constrained personal transport, increasing income levels in middle class and higher

aspirations of young people all seem to be the factors responsible for such high

growth in two-wheelers. The growth in two-wheelers has been robust enough to

counter the slowdown and other factors constraining the overall business activity in

the country. Also, rationalization of excise duty in the Union Budget 2002-03 had a

positive impact on the demand for motorcycles. We also expect the motorcycles to

continue to lead the two-wheeler segment like in all other Asian countries. Available

forecasts suggest that this trend would continue for another couple of years and the

industry would record nearly double-digit average annual growth up to 2006.

During the year, there have been important developments in two-wheeler industry.The competition has strengthened though there are hardly any new entrants into the

industry. There is an increasing emphasis on price and this has led to cost cutting

efforts all across the industry, thereby, making the customer an ultimate beneficiary.

The trend also saw introduction of new motorcycles with capacity ranging from 100

to 180cc bikes. We anticipate that many more new models will be launched during the

year and provide customers plenty of choice at competitive prices.

Businesses cannot consistently grow at 25-30 per cent. Each business has a tendency

to taper and plateau after attaining a particular size. An annual growth rate of 10-12

per cent over a period of time is extremely healthy.

The TCS study rankings are conducted at the motorcycle segment-level to provide

comparisons among similar groups of motorcycles. Motorcycles ranking highest in

their respective segments for TCS are: Hero Honda CD100 SS (best standard

motorcycle segment); Hero Honda Splendor (best executive motorcycle segment);

Bajaj Pulsar (best premium motorcycle segment); and Royal Enfield Bullet Electra

(best cruiser motorcycle segment).

The feeling of freedom and being one with the Nature comes only from riding a two

wheeler. Indians prefer the two wheelers because of their small manageable size, low

maintenance, and pricing and easy loan repayments. Indian streets are full of people

of all age groups riding a two wheeler. Motorized two wheelers are seen as a symbol



of status by the populace. Two wheelers in India are the second largest producer and

manufacturer 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.

Indian two-wheeler industry has got spectacular growth in the last few years. Indian

two-wheeler industry had a small beginning in the early 50's. The Automobile

Products of India (API) started manufacturing scooters in the country.

Bikes are a major segment of Indian two wheeler industry, the other two being

scooters and mopeds. Indian companies are among the largest two-wheeler

manufacturers in the world. In the initial stages, the scooter segment was dominated

by API; it was later overtaken by Bajaj Auto. Although various government and

private enterprises entered the fray for scooters, the only new player that has lasted till

today is LML.

The motorcycle segment was initially dominated by Enfield 350cc bikes and Escorts

175cc bike. 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. With the

availability of fuel efficient low power bikes, demand swelled, resulting in Hero

Honda - then the only producer of four stroke bikes (100cc category), gaining a top

slot.

The first Japanese motorcycles were introduced in the early eighties. TVS Suzuki

and Hero Honda brought in the first two-stroke and four-stroke engine motorcycles

respectively. These two players initially started with assembly of CKD kits, and later

on progressed to indigenous manufacturing. In the 90s the major growth for

motorcycle segment was brought in by Japanese motorcycles, which grew at a rate of

nearly 25% CAGR in the last five years.

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. Barring Hero Honda, all the major producers suffered from recession



in FY93 and FY94. Hero Honda showed a marginal decline in 1992.

The reasons for recession in the sector were the incessant rise in fuel prices, high

input costs and reduced purchasing power due to significant rise in general price level

and credit crunch in consumer financing. Factors like increased production in 1992,

due to new entrants coupled with the recession in the industry resulted in company

either reporting losses or a fall in profits.



Two wheeler fleet composition in India:-

STRUCTURE OF TWO WHEELER INDUSTRY

Mopeds:-

Over the last 15 years, moped¶s contribution in overall 2-wheelers has declined

significantly and now it remains a marginal category with just one manufacturer for

the product. Its contribution in the 2-wheelers industry now stands at 5% and we

expect that this segment will continue to be marginalised. The only player in this

segment is TVS Motor.

Scooters:-

Advent of fuel efficient motorcycles in the Indian 2-wheelers industry led to decline

of

Scooters. However, over the last five years, it has made a recovery and is emerging as

a niche segment targeted towards women commuters. One of the reasons for this is

the increasing need of mobility for the women commuters especially in the urban



areas is due to higher number of college going girls and greater participation of

women in urban work force. The product itself has gone for a complete revamp and

now this category mainly consists of gearless products. This segment is now

dominated by Japanese manufacturers with HMSI having the leadership. HH, which

is a late entrant in this segment, has also cornered a sizeable market share in the

scooter segment. Another development in this segment is the launch of battery

operated scooters. However, given the high replacement cost for the batteries, this has

remained a marginal segment.

Motor cycles and bikes:-

Executive Segment

Executive segment is the largest motorcycle segment and this is the stronghold of

market leader HH. Competitors have tried to challenge HH in this segment, however

all such challenges have fizzled out over time. With higher growth in economy

segment, the contribution of this segment had come below 50% in FY06. However

over the last three years, it has made a strong come back and now accounts for almost

60% of the motorcycle share.

Premium Segment

This segment was creation of HH with 'CBZ' And µKARIZMA¶; however major boost

to the segment was given by BAJAJ through 'Pulsar' which has dominated the

segment. HH has remained a marginal player in this segment and one of the reasons

for this is presence of HMSI in this segment. This segment remains a small segment

in the Indian market with contribution of around 23% to the motorcycle industry. This

is the performance segment and customers pay a premium for the novelty. Hence

constant upgradation in the product is a requisite for success in this segment.



Usage Pattern of two-wheelers in India

Is quite different from other countries

Initial cost and fuel economy are highest priority.

Low maintenance costs are desired.

Small entrepreneurs and farmers conduct their business carrying loads.

Very limited usage for sports bike.

Indians prefer the two wheelers because of their small manageable

size, low maintenance, and pricing and easy loan repayments.

K ey players in the Two-wheeler industry:

Hero Honda motors ltd.

Bajaj auto ltd.

TVS motors company ltd.

Yamaha motors India

Honda motorcycle and scooters India



COMPANY BCG MATRIX

HIGH LOW

HERO HONDA

M

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G

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wt

h

High

MAHENDARA &

MAHENDARA

AUTO BAJAJ

STARS QUESTION MARKS

GENERAL MOTORS

TVS

CASH COWS

Low

TATA MOTORS

DOGS

TATA MOTORS



Motorcycles in India:

Bikes comprise a major segment of Indian two wheeler industry.

Companies:

Hero Honda M otors Ltd ( HH ML)

Hero Honda Motors Limited was established in 1984, as a joint venture between

India's Hero Group (world's largest bicycle manufacturers) and Japan's Honda Motor

Company. And created the world's single largest two wheeler company and also one

of the most successful joint ventures worldwide. During the 80s, Hero Honda became

the first company in India. Over 19 million Hero Honda two wheelers running on

Indian roads today.

* Hero Honda CD Dawn

* Hero Honda CD Deluxe

* Hero Honda Glamour

* Hero Honda Glamour-Fi

* Hero Honda K arizma* Hero Honda Passion Plus

* Hero Honda Pleasure

* Hero Honda Super Splendor

* Hero Honda Splendor NXG

* Hero Honda CBZ X-Treme



TVS Motor Company :

TVS Motors is the third largest company in the two-wheeler industry with a market

share of 16%. Infect, it is the only Indian company without a foreign collaboration in

the two-wheeler industry. When the company opted out of the collaboration with

Suzuki in 2002, many believed that TVS was headed towards extinction. But the

company proved the doomsayers wrong and came out with a very successful `TVS

Victor'. TVS Motors Ltd. originally incorporated in 1982 to manufacture two-

wheelers in collaboration with Suzuki Motors of Japan, TVS was one of the leaders in

two-wheeler industry.

* TVS Apache

* TVS Centra

* TVS Fiero* TVS Star

* TVS Victor



Yamaha Motor India:

Yamaha Motor Corporation is the auto mobile company of Japan (1953) which works

in India since 1955 and providing latest technology in India from last two decades.

Yamaha Motor India was incorporated in august 2001 as a 100% subsidiary of

Yamaha motor corporation, Japan

* Yamaha CruxS

* Yamaha G5* Yamaha Gladiator

* Yamaha FZ 16

* Yamaha R15

* Yamaha Fazer



Honda motor:

Honda motors of Japan is not a new name in t e two wheeler scenar io in the country,

they were in a tie up with the Firodias owned K inetic group. However in the late 90s

they par ted ways af ter problems arose over issues li e introduction of new models,

adver tising expenditure, marketing strategies and other related issues. In the mid 80

Honda motors of Japan joined hands with the largest bicycle maker of India the Hero

cycles to create Hero Honda which in a couple of decades or so have gone on to

become the single largest motorcycle company in the wor ld. Though Honda has come

on its own on the Indian market yet it will be providing technological suppor t to Hero

Honda for the next ten years. Thus presenting a uni ue situation in which the

company will be in direct competition with the company which it has been associated

for near ly two decades. Honda Motorcycles and Scooters India limited, a 100%

subsidiary of Honda motor company Japan eventually entered the Indian market with

Honda Unicorn in 2004.

* Honda Uni orn

Honda acti a



Now further the marketing strategies of HERO HONDA and its competitor

BAJAJ will be analyzed.

HERO HONDA

The Company was Incorporated on 19th January,1984 at New Delhi as a

joint venture.

Today Hero Honda is the largest two-wheeler manufacturer in the world

producing more than 3 million units of two-wheeler per year.

The company's most popular model is the Hero Honda Splendour, which is

the world's largest-selling motorcycle.

Over 19 million Hero Honda two wheelers are on Indian roads today.

Hero Honda CD-100 is the first four stroke motorcycle to be introduced in

India in 100cc range.

During the fiscal year 2008-09, the company has sold 3.28 million bikes.

Marke t sha re o f tw o w he eler a utom ob ile

sector

35 .60% 27.50%

1 6 %

7 %4 %

9.50%

Hero Honda

Bajaj M otors

TVS Motors

YamahaMotors

Honda M otors

Others



PRODUCT MIX

SCOOTER BIKE 100CC 125CC 150CC 220CC

PLEASURE CD 100SPLENDOR

SPLENDOR+PASSION

PASSION+

AMBITIONGLAMOR

CBZCBZ

XTREME

KARIZMA

BAJAJ (COMPETITOR)

Established in 1945.

Started production of scooters in 1961 and became first two wheeler

manufacturing company of India.

Bajaj Auto, is ranked as the world's fourth largest two and three- wheeler

manufacturer.

Bajaj Auto is India¶s largest exporter of two wheelers.

During 2008-09, the company exported 772,519 two and three-wheelers

recording a growth of 25 percent over 2007-08.

Exports now constitute 37 per cent in volume terms and 35 per cent IN value

of net sales.



PRODUCT MIX

100CC 125CC 135CC 150CC 180CC 200CC 220CC

BAJAJ

CT 100,

BAJAJ

PLTINIA

,

BAJAJWAVE

DISCOVE

R,

BAJAJ

WIND,

BAJAJ

XCD

PULSAR

-135

PULSAR

-150

PULSAR-

180,

AVENGE

R

PULSAR

-200

PULSAR

-220

4 P¶s OF MAR K ETING OF HERO HONDA :-

PRODUCT

Hero Honda, which has a technology tie-up with Japan's Honda Motors, was currently

discussing the feasibility of manufacturing scooters for the Indian market, Mr. Munjal

said. However, the company has a binding clause with Honda's scooter manufacturing

Indian subsidiary, preventing it from making scooters till 2004.

Hero Honda Motors, India's largest motorcycle company, has launched the premium

segment 223cc motorcycle Karizma priced at Rs 79,000 (ex-showroom, Delhi). Many

of the products which the company has started with have been phased off. Now the

existing products are Karizma, Ambition, CBZ, Splendor, Splendor+, Passion,

Passion Plus, CD 100 SS, CD 100 and CD Dawn.

The TCS study examines customer evaluations at three distinct ownership periods: 1

to 6 months, 7 to 18 months, and 25 to 36 months. This helps in understanding the

differences in satisfaction during initial ownership, in-warranty and post-warranty

ownership periods. Satisfaction ratings decline as the length of vehicle ownership

increases. However, Hero Honda Splendor is among the few models to maintain

consistency across the three ownership periods.



PRICING

Pricing is a important component of marketing mix of the firm. Determining the

prices of different products of a firm is very difficult task of the marketing manager.Price denotes money value of a product. If represent the amount of money for which a

product can be exchange. In other words, prices represents the money which the buyer

pays to the seller for a product price represent the exchange value of goods and

services in terms of money. Price is all around.

Price factor has very well been touched by the manufacturers. The pricing strategy of

the company is very set. They price their product according to the cost of production

and also by keeping an eye on the price of the competitors of that segment and

demand of the product in the market.

A pricing strategy that ensured an average manufacturer margin that game dealer an

adequate return and created a reputation with consumers like ³a company selling a

good quality product at a reasonable price. Industry focus themselves the low cost

producer with good quality and aimed to maintain the price advantage in every market

of two wheelers.

Hero Honda group ensures an easily affordable pricing through excellent

transportation to common man. It fixes customer centric pricing that provide customer

total satisfaction.

Hero Honda¶s pricing objectives are: List price, Discount, Financing schemes, Credit

terms, and Maximize profits

Hero Honda group ensures an easily affordable pricing through excellent

transportation to common man. It fixes customer centric pricing that provides the

customer with total satisfaction.



PLACE

CHANNELS OF DISTRIBUTION:

As a company, dealers play a major role in serving customers, while growing and

sustaining markets. Hero Honda has a network of more than 3500 strong and

dedicated Authorized dealers. A network that has helped Hero Honda¶s name and its

promise of reliable quality to every part of the country. The power of this highly

efficient and motivated network goes a long way to create goodwill for Hero Honda

brand among countless consumers besides creating availability and after sales

services.

The channel of distribution is a direct dealer network. A direct dealer is a dealer who

is authorized to purchase the product directly from the company and sell.

PHYSICAL DISTRIBUTION:

Hero Honda has more than 3500 showrooms in India. Some of the Authorized dealers

of Hero Honda Karizma, in and around Bombay, are:

� Max Motors (Bombay)

� F. P. Motors (Bombay)

� Axis Motors (Thane)

� Ranjeet Motors (Thane)

� Ahir Motors (Kalyan)

� Spectra Motors (New Bombay)

� H. M. Motors (Panvel)



PROMOTION

Promotional tools

1. ADVERTISING: It is defined as a paid non-personal communication with a

target (usually mass) market. It is cost effective and can reach a large number of people. It can also be used for long term or short term objectives.

There are various forms or mediums through which can advertise.

A. Broadcast Media:

y Television

y Radio

y Cinema

B. Print media:

y Newspapers

y Magazines

y Leaflets

C. Outdoor media:

y Posters and billboards.

2. PUBLIC RELATIONS AN PUBLICITY:

Public relations are an umbrella term and refer to the totality of the organization¶s

behavior with respect to the society in which it operates. The maybe regarded as good

or bad and is reflected in the company¶s reputation and image.



3. SPONSORSHIP:

Sponsorship can be seen as a part of public relations and it is certainly the case

that some sponsorship goes on to generate positive publicity for the organization.

The company has not left any stone untamed in sponsoring the major events both

globally and domestically. The biggest of all is the sponsorship of the ³WORLD

CUP´ for which Hero Honda has the credit of being the only two-wheeler company in

the world to do so. Recently they are sponsoring the Hockey World cup. Besides this,

the company has also sponsored events like ³Master Golf´, television academy

awards, etc,

Thus the company has gained a lot of reputation by doing so.

4. DISCOUNTS/OFFERS:

The company has started giving discounts and other offers to the customers on the

purchase of a new bike, for instance, with the World Cup offer, in which the

consumer was to get a 1 gm gold coin with every purchase.

But after all these schemes and benefits may be because of cut-throat competition

in the segment with heavyweight competition such as Bajaj, kinetic, Yamaha, and

TVS the company (HERO HONDA) officially says:

³Our aim is to proactively and consistently deliver value to the customer. We are

giving back to the customer after becoming successful. Most companies give

discounts only when their products are not doing well in the market. There is lost of

competition in the segment, especially from Bajaj. But the reason for Hero Honda¶s

success it that we are consumer-focused while other companies such as Bajaj tends to

be more competitor-focused.



5. Test ride and Road show

PROMOTION POLICY:

Company gives advertisement in different media vehicles time to time. Like in

TV. Magazines, newspaper, etc.

Hero Honda also organizes free service camps every year.

Hero Honda also takes art in trade fair.

Hero Honda with the help of ICICI Bank provides loan to the customers &

also provide easy monthly installment scheme to customers.

Hero Honda gives huge commission to their dealers.

Advertisement, local events sponsorship and promotions and inviting a prominent

personality for the inaugural or first like delivery function would contribute

effectively in generating a wider local interest and attention.

Hero Honda¶s latest DKD ±2 commercial its two brand starring its Ambassador and

India¶s heart throbs, Hritik Roshan and Sourav Ganguly, truly reflects the multi fact

roles that today¶s new generation plays. The commercial reflecting the charisma and

vibrancy of these two stars, takes Desh Ki Dhadkan to dazzling new heights. It is

young, colorful and vibrant and represents the icons of contemporary times. And it

will go a long way in strengthening the leadership status of the product by the mile.

The new commercial is powerful film repeat with an impressive storyline. The effort

to pack the story, drama and impact in just 60 seconds was phenomenal challenge

itself. The idea was born itself. The idea was born out of the very essence of ³Hero

and Stars´. Keeping in mind would cause on the drama and impact it would cause on

the audience. It is a commercial packed with action where today¶s heart throbs, Hritik

and saurav, are seen tackling new roles. The story being in a field adjoining a hill withtwo cool men, Hritik and Sourav on Hero Honda bikes and Passion respectively.

Both Sameer and Aditya win lifetime opportunity act with Hritik and Sourav, the two

star heartthrobs of millions in India and all four will be seen in action in the new

commercial DKD-2.



These are some of the Slogan for every product (Bike) and these are following:-

CD-100 : Fill it, shut it, Forget it.

CD100SS : Tough and Rugged.

Splendor : Designed to Excel.

Street Smart : License to enjoy.

Passion : When style matters, Bike born in studio not in

factory.

CBZ : Motorcycling Unplugged.

MAR K ET SEGMENTATION OF HERO HONDA

Demographic Segmentation

Income: HERO HONDA products are offered to the public taking into

consideration all the income groups in the society.

Age: The main segmented group for the motorcycle are 18 years and

above.

Occupation: All kinds of people are taken into account. Students,

professionals, Govt. Servants, etc.

Geographic Segmentation: The potential customers are basically

from every regions of India.

Psychographic segmentation: People purchasing bikes are very

economical, quality, brand conscious and loyality.



Porters f i e force model for Hero Honda:-

Bargaining Power of suppliers:

Suppliers of auto components are fragmented and are extremely cr itical for this

industry since most of the component work is outsourced. Proper supply chain

management is a costly yet cr itical need.

Bargaining Power of Buyer:

Buyers in automobile market have more choice to choose from and the increasing

competition is dr iving the bargaining power of customers uphill. With more models to



choose from in almost all categories, the market forces have empowered the buyers to

a large extent.

Competitive rivalry:

The industry rivalry is extremely high with any product being matched in a few

months by competitor. This instinct of the industry is primarily driven by the technical

capabilities acquired over years of gestation under the technical collaboration with

international players.

Threat of substitute Products:

There is no perfect substitute to this industry. Also, if there is any substitute to a two-

wheeler, Bajaj has presence in it. Cars, which again are a mode of transport, do never

directly compete or come in consideration while selecting a two-wheeler, cycles do

never even compete with the low entry level moped for even this choice comes at a

comparatively higher economic potential.

Threat of new entrants

Here the threat of new depends on the economies of scale of the cost of production

, and customer switching costs, access to industry distribution channels.



S.W.O.T. ANALYSIS OF HE RO H ONDA (KARIZMA):-

STRE NGT H :

� It has a good speed and sporty look

� Karizma is the First bike in India launched under Sports Bike Segment .

� Loyal Customer Base: In the past four years, Karizma has been successful in

building up a good and loyal base among its customers.

� After Sales Service: Till today, customers are satisfied with the after sales service

provided by Hero Honda for this particular product.

� Refinement, comfort, great handling and that much-sought-after big bike feel are

all available on the Karizma.

� Brand Recall: the name Karizma itself is a metaphor to its success. The brand

Karizma has given a good platform to this product in the Sports Bike Segment.

W E AKN E SS:

� High Maintenance: The maintenance of Karizma is high as compared to its biggest

competitor Bajaj Pulsar 200cc and 220cc.

� Fuel Efficiency: The pulsar 200cc offers an impressive mileage of 38.3kpl in city

and 42.4kpl in highway against the Karizma offers only 30kpl in city and a decent

figure of 45kpl in highway.

� Less Promotion: the promotions and ads of Karizma are very less as compared to

its competitors.

OPPORTUNITI E S:

� If Hero Honda comes up with the idea of changing some features of Karizma, like

self cancelling indicators, soft touch handle bar and digital speedometer, it will help

them to boost up the sales of Karizma.

� If they are able to improvise the fuel efficiency of K arizma, it will be a golden

opportunity to take over the market.



T H RE ATS:

� The major threat faced by Hero Honda Karizma is from Bajaj Pulsar, who has

always been the market leader in the 150 plus segment with 60% market share.

� Karizma¶s strong competitors Bajaj and TVS, in 150 cc plus segment, already

posses certain features like self-controlling indicators, soft touch handle bar

which K arizma lacks.

� The competitor Pulsar 200cc has already come up with oil cooled engine which

delivers maximum power. This is again a major threat to Karizma.

S.W.O.T. ANALYSIS OF BAJAJ (PULSAR 220cc)

STRE NGT H S:

� Pulsar 220cc features India¶s First Oil Cooled Engine which delivers maximum

power making it most powerful engine offered by Bajaj.

� New Pulsar also provides Digital Speedometer, Self Canceling Indicators which

is for the First time in this segment in India.

� Fuel efficiency: Pulsar 220cc delivers an impressive mileage of 38.2 kmpl in city as

compared to Karizma which delivers 30 kmpl in city.

� Customer Base: In past decade Bajaj has established a strong base amongst its

customers.

W E AKN E SS:

� Style and Design: PULSAR 200cc and 220cc derives their styling from there

previous version Pulsar 150 Dts-i and 180 Dts-i.

� Pricing; Bajaj 220cc (Rs 82449 basic price) is costlier than karizma(Rs 78000 basic

price)



OPPORTUNITI E S:

� If they derive new styling, shape, design for pulsar 200cc and 220cc then they can

attract more customers.

� Taking into consideration the reviews of the customers regarding the ³fairing´ of

220cc and making the needful changes will be an opportunity to capture an even

larger share of the 200cc+ segment

T H RE ATS:

� The biggest threat is faced from the goodwill of K arizma in this segment who is the

³Four-Stroke Two Wheeler Ruler´ of the Indian bike market.

� Certain technical faults in the bike design which are potentially dangerous to the

rider¶s safety can be disastrous to the image of the bike.

COMPARISION OF ADVERTISING STRATEY OF H.H.M. AND BAJAJ

ADVERTISING STRATEGY OF HERO HONDA:-

Currently the number one company in terms of sales and has been dominant in the

two-wheeler segment since the past decade. Since the inception of hero Honda, the

company has been using television as a major role for its publicity. Though hero

Honda was dominant in sales it lacked the skills of creating a spectacular ad till now.

Though it had a vast range of mobiles, its advertising strategy was not up to the mark.

For its publicity hero Honda has been using many famous celebrities like Saurav

Ganguly, the captain of Indian cricket team, Hritik Roshan and other famous

personalities as their brand ambassadors. Thus, hero Honda has been spending huge

amounts on its publicity.

The biggest of all is the sponsorship of the ³WORLD CUP´ for which Hero Honda

has the credit of being the only two-wheeler company in the world to do so.

Presently they have tried to gain publicity by sponsoring the hockey world cup event which is

the national game of India. There by creating a sense oneness and Nationalism through

providing publicity and encouragement to the game by various ads.



ADVERTISING STRATEGY OF BAJAJ:-

Bajaj is always known for its outstanding ads over the period of time. Since its

inception, Bajaj has come out with variety of ads and were always successful in their

advertisements. Scooters were well known by the brand name of Bajaj. Be it any

scooter, one used to recognize it by the brand name Bajaj. This was the identity a

decade ago which the Bajaj has still maintained. Bajaj is always known for its ads

without well-known brand ambassadors which is again a plus point to its cart as it

saves a huge cost in terms of brand ambassadors unlike Hero Honda and TVS. Prior,

Bajaj used to convey the feeling of µIndianness¶ in its ads. With a punch line µHamara

Bajaj¶ Bajaj drove into everybody¶s hearts and the title song of µNaye Bharat Ki Naye

Tasveer¶ added a great value to its mobikes and scooters.

A couple of years back, Bajaj had introduced an advertisement which

promoted all the different ranges it had, wherein they had shown each product they

had with a feeling of Indianness. Example: Eliminator passes-by a rangoli and drives

slowly sideways without disturbing it. People on boxer pass-by a temple and bend

their head to give a little offering. Such ads had revealing Indian culture had a great

effect on Indians and Bajaj was successful in most of its ads.

But recently, Bajaj had changed its brand logo along with its punch line i.e.

µHamara Bajaj¶ got converted to µInspiring Confidence¶. The reason for this change as

told by the company officials was to keep pace with the new technologies in the fast

moving world. Even though it had changed its punch line, it didn¶t have much effect

on its brand image.

A year back, Bajaj introduced DTSi technology upgrading its always

successful PULSAR 150cc and 180cc. Though Bajaj had changed its identity it still

dominates for its creativity in ads.



Future Challenges and Plans:-

� Sustaining the growth rate.

� Need for innovation ± low cost/ hybrid vehicles.

�

Upgrading Indian two-wheeler products.

� Taking the products to the global market.

� Capturing Indian as well as global market.

Suggestions:-

� Encourage exports.

� Provide various two-wheeler financing schemes among manufacturers.

� Open R&D centers.

� Pressurize government to reduce taxes and duties.

� Collaborate with global players.

Conclusion :-

The outlook for India¶s automotive sector is highly promising. In view of current

growth trends and prospect of continuous economic growth of over 6 per cent, all

segments of the auto industry are likely to see continued growth.

Large infrastructure development projects underway in India combined with

favourable government policies will also drive automotive growth in the next few

years.

amir two wheeler automobile marketing strategy

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