HERO HONDA

CERTIFICATEThis is to certify that TEAM B students of Maharshi Dayanand University,Rohtak,has prepared academic report entitled Critical analysisofCUSTOMERSATISFACTIONFORHEROHONDA.Under myguidance.Hehasfulfilledallrequirementleadingtoawardofthe degreeofMBA(industryintegrated)thisreportistherecordofbonafide researchundertakenbyhimandnopartofithasbeensubmittedtoany otherUniversityoreducationinstitutionforawardofanyotherdegree. Iwishherallsuccessinlife.

Co-ordinator

Faculty GuidePROF.AJAY PATOLE

Hemant Sonare

1

DECLARATIONWe TEAM A hereby declare that, with exception of the suggestion and guidance from guide, Prof,Ajay Patole this project work titled CriticalanalysisofCUSTOMER SATISFACTIONFORHEROHONDALtd This my own work. This dissertation as one, which is substantially the same as this has not been by me for any other examination of this university or any other University

Place :-Nagpur Date :- __________

MR.KAILASH SOMNATHE MR.RUPESH KUMAR MR.SUMANKANT JHA

ACKNOWLEGEMENT

HERO HONDA

Completing a task is never a one-man effort. It is often the result of valuable contribution of individuals in direct and indirect manner that helps in achieving an objective. It is the indeed a great pleasure and movement of immense satisfaction for me to express my profound gratitude towards my guide Prof. AJAY PATOLE ofGURUGRAM BUSINESS SCHOOL, PARDI NAKA, NAGPUR

, I take pride to thank him for his able guidance and time to time attention that was bestowed on me right for the inception to the successful completion of the project Also, my heartful thanks to all respondents and friend who directly and indirectly helped me completing this project report. I am also thankful to all such people, the name of whom haven't appeared hear but without their help this project wouldn't have been completed

MR KAILASH SOMNATHE MR.RUPES KUMAR MR,SUMAN KANT JHA

INDEX3

CHPTER NO. 1

CONTENTS INTRODUCTION

PAGE NO5-9

10

2

IMPORTANCE AND OBJECTIVES11

3

HYPOTHESIS12

4

RESEARCH METHODOLOGY DATA ANALYSIS AND INTERPRETATION13-14

5

15

6 7

FINDINGS AND CONCLUSION LIMITATIONS ANNEXTURE16

BIBLIOGRAHY

CHAPTER NO 1

HERO HONDA

INTRODUCTION

Indian

Two-Wheeler

Industry:

A

Perspective

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 recognised as one of the drivers of economic growth. During the last decade, well-directed efforts have been made to provide a new look to the automobile policy for realising the sector's full potential for the economy. Steps like abolition of licensing, removal of quantitative restrictions and initiatives to bring the policy framework in consonance with WTO requirements have set the industry in a progressive track. Removal of the restrictive environment has helped restructuring, and enabled industry to absorb new technologies, aligning itself with the global development and also to realise its potential in the country. The liberalisation policies have led to continuous increase in competition which has ultimately resulted in modernisation in line with the global standards as well as in substantial cut in prices. 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. Evolution of Two-wheeler Industry in India

Two-wheeler segment is one of the most important components of the automobile sector that has undergone significant changes due to shift in policy environment. The two-wheeler industry has been in existence in the country since 1955. It consists of three segments viz. scooters, motorcycles and mopeds. According to the figures published by SIAM, the share of two5

wheelers in automobile sector in terms of units sold was about 80 per cent during 2003-04. This high figure itself is suggestive of the importance of the sector. In the initial years, entry of firms, capacity expansion, choice of products including capacity mix and technology, all critical areas of functioning of an industry, were effectively controlled by the State machinery. The lapses in the system had invited fresh policy options that came into being in late sixties. Amongst these policies, Monopolies and Restrictive Trade Practices (MRTP) and Foreign Exchange Regulation Act (FERA) were aimed at regulating monopoly and foreign investment respectively. This controlling mechanism over the industry resulted in: (a) several firms operating below minimum scale of efficiency; (b) under-utilisation of capacity; and (c) usage of outdated technology. Recognition of the damaging effects of licensing and fettering policies led to initiation of reforms, which ultimately took a more prominent shape with the introduction of the New Economic Policy (NEP) in 1985.

However, the major set of reforms was launched in the year 1991 in response to the major macroeconomic crisis faced by the economy. The industrial policies shifted from a regime of regulation and tight control to a more liberalised and competitive era. Two major results of policy changes during these years in two-wheeler industry were that the, weaker players died out giving way to the new entrants and superior products and a sizeable increase in number of brands entered the market that compelled the firms to compete on the basis of product attributes. Finally, the two-wheeler industry in the country has been able to witness a proliferation of brands with introduction of new technology as well as increase in number of players. However, with various policy measures undertaken in order to increase the competition, though the degree of concentration has been lessened over time, deregulation of the industry has not really resulted in higher level of competition. AGROWTHPERSPECTIVE The composition of the two-wheeler industry has witnessed sea changes in the post-reform period. In 1991, the share of scooters was about 50 per cent of the total 2-wheeler demand in the Indian market. Motorcycle and moped had been experiencing almost equal level of shares in the total number of two-wheelers.

HERO HONDA

In 2003-04, the share of motorcycles increased to 78 per cent of the total twowheelers while the shares of scooters and mopeds declined to the level of 16 and 6 per cent respectively. A clear picture of the motorcycle segment's gaining importance during this period is exhibited by the Figures 1, 2 and 3 depicting total sales, share and annual growth during the period 1993-94 through 2003-04.

National Council of Applied Economic Research (NCAER) had forecast two-wheeler demand during the period 2002-03 through 2011-12. The forecasts had been made using econometric technique along with inputs obtained from a primary survey conducted at 14 prime cities in the country. Estimations were based on Panel Regression, which takes into account both time series and cross section variation in data. A panel data of 16 major states over a period of 5 years ending 1999 was used for the estimation of parameters. The models considered a large number of macro-economic, demographic and socio-economic variables to arrive at the best estimations for different two-wheeler segments. The projections have been made at all India and regional levels. Different scenarios have been presented based on different assumptions regarding the demand drivers of the two-wheeler industry. The most likely scenario assumed annual growth rate of Gross Domestic Product (GDP) to be 5.5 per cent during 2002-03 and was anticipated to increase gradually to 6.5 per cent during 2011-12. The allIndia and region-wise projected growth trends for the motorcycles and scooters are presented in Table 1. The demand for mopeds is not presented in this analysis due to its already shrinking status compared to' motorcycles and scooters. It is important to remember that the above-mentioned forecast presents a longterm growth for a period of 10 years. The high growth rate in motorcycle segment at present will stabilise after a certain point beyond which a condition of equilibrium will set the growth path. Another important thing to keep in mind while interpreting these growth rates is that the forecast could consider the trend till 1999 and the model could not capture the recent developments that have taken place in last few years. However, this will not alter the regional distribution to a significant extent.7

Table 1 suggests two important dimensions for the two-wheeler industry. The region-wise numbers of motorcycle and scooter suggest the future market for these segments. At the all India level, the demand for motorcycles will be almost 10 times of that of the scooters. The same in the western region will be almost 20 times. It is also evident from the table that motorcycle will find its major market in the western region of the country, which will account for more than 40 per cent of its total demand. The south and the north-central region will follow this. The demand for scooters will be the maximum in the northern region, which will account for more than 50 per cent of the demand for scooters in 2011-12. Table 1: Demand Forecast for Motorcycles and Scooters for 2011-12

2-Wheeler Segment Regions

South West North-Central East & North-East All India Motorcycle 2835 (12.9) 4327 (16.8) 2624 (12.5) 883 (11.1) 10669 (14.0)

HERO HONDA

Scooter 203 (2.6) 219 (3.5) 602 (2.8) 99 (2.0) 1124 (2.08) Note: Compound Annual Rate of Growth during 2002-03 and 2011-12 is presented in parenthesis Source: Indian Automobile Industry: Optimism in the Air, Industry Insight, NCAER

The present economic situation of the country makes the scenario brighter for short-term demand. Real GDP growth was at a high level of 7.4 per cent during the first quarter of 2004. Both industry and the service sectors have shown high growth during this period at the rates of 8.0 and 9.5 per cent respectively. However, poor rainfall last year will pull down the GDP growth to some extent. Taking into account all these factors along with other leading indicators including government spending, foreign investment, inflation and export growth, NCAER has projected an average growth of GDP at 6.7 per cent during the tenth five-year plan. Its mid-term forecast suggests an expected growth of 7.4 per cent in GDP during 2004-05 to 2008-09. Very recently, IMF has portrayed a sustained global recovery in World Economic Outlook. A significant shift has also been observed in Indian households from the lower income group to the middle income group in recent years. The finance companies are also more aggressive in their marketing compared to previous years. Combining all these factors, one may visualise a higher growth rate in two-wheeler demand than presented in Table 1,9

particularly for the motorcycle segment.

COMPANY PROFILE OF HERO HONDA Hero is the brand name used by the Munjal brothers for their flagship company Hero Cycles Ltd. A joint venture between the Hero Group and Honda Motor Company was established in 1984 as the Hero Honda Motors Limited At Dharuhera India. Munjal family and Honda group both own 26% stake in the Company. In 2010, it was reported that Honda planned to sell its stake in the venture to the Munjal family. During the 1980s, the company introduced motorcycles that were popular in India for their fuel economy and low cost. A popular advertising campaign based on the slogan 'Fill it - Shut it - Forget it' that emphasised the motorcycle's fuel efficiency helped the company grow at a double-digit pace since inception. The technology in the bikes of Hero Honda for almost 26 years (19842010) has come from the Japanese counterpart Honda [6] Hero Honda has three manufacturing facilities based at Dharuhera, Gurgaon in Haryana and at Haridwar in Uttarakhand. These plants together are capable of churning out 3 million bikes per year.[7] Hero Honda has a large sales and service network with over 3,000 dealerships and service points across India. Hero Honda has a customer loyalty program since 2000,[8] called the Hero Honda Passport Program Company performance During the fiscal year 2008-09, the company sold 3.7 million bikes, a growth of 12% over last year. In the same year, the company had a market share of 57% in the Indian market Hero Honda sells more two wheelers than the second, third and fourth placed two-wheeler companies put together. Hero Honda's bike Hero Honda Splendor, the world's largest-selling motorcycle for the years 2001-2003, selling more than one million units per year Recognition The Brand Trust Report published by Trust Research Advisory has ranked Hero Honda in the 13th position among the brands in India. Motorcycle models

Achiever

HERO HONDA

Ambition 133, Ambition 135

CBZ, CBZ Star, CBZ Xtreme

CD 100, CD 100 SS, CD Dawn, CD Deluxe, CD Deluxe (Self Start) Glamour, Glamour F.I

Hunk Karizma, Karizma R, Karizma ZMR FI Passion, Passion+, Passion Pro

Pleasure

Splendor, Splendor+, Splendor+ (Limited Edition), Super Splendor, Splendor NXG,Splendor PRO

Suppliers It is reported Hero Honda has five joint ventures or associate companies, Munjal Showa, AG Industries , Sunbeam Auto, Rockman Industries and Satyam Auto Components, that supply a majority of its components.[14] Termination of Hero and Honda Joint Venture In December 2010, the Board of Directors of the Hero Honda Group have decided to terminate the joint venture between Hero Group of India and Honda of Japan in a phased manner. The Hero Group of India would buy out the 26% stake of the Honda in JV Hero Honda.[15]. Under the joint venture Hero Group could not sell into international markets and the termination would mean that Hero Group can exploit global opportunities now. Since last 25 years the Hero Group relied on their Japanese partner Honda for R & D for new bike models. So there are concerns that the Hero Group might not be able to sustain the performance of the Joint Venture alone.[16]

11

CHAPTER 2

OBJECTIVES This study has been conducted with very small sample base of around 30 respondents in order to assess the level of satisfaction of all existing customer base thus the main objectives of the research is To assess consumer satisfaction for Hero Honda India ltd. Since Hero Honda has large number of users in the Indian market. To find out what customers feel about the products offered by Hero Honda India ltd To gain insight into the strategies of the Hero Honda to retain its existing customer base as well as to attract new users in current market where large number of two wheeler player like TVS,BAJAJ are competing for lions share.

HERO HONDA

CHAPTER 3

HYPOTHESISWhile conducting this study we assumed that about 90%of the customers who are using Hero Honda bikes or other products are satisfiedHYPOTHESIS-MORE THAN 90% OF THE HERO HONDA USERS ARE SATISFIED WITH THE CURRENT PERFORMANCE OF THE COMPANY PRODUCTS,

13

CHAPTER 4

RESEARCH METHODOLOGYThe data collected for this project is prominently of primary nature .This was collected with the help of questionnaire method and interview method . For this study we had made selection of 30 people who are already using the HERO HONDA BIKES, through accidental sampling. While selecting these users we had ensured that our sample covers people from all field i.e. students, professional, business class people etc. All the users were asked about 10 different questions and their feedback were recorded accordingly. We asked all these questions trough structure questionnaire which has been enclosed at the end of the report. In this way we collected primary data. In this study we also made use of secondary data which we procured from company website, magazines ,newspapers, blogs etc. In this way we made use of both primary and secondary data for this research study.

HERO HONDA

CHAPTER 5

DATA ANALYSIS AND INTERPRETATIONTABLE NO 1

USERS RESPONSE FOR HERO HONDA BIKES PARAMETERS SPEED MILEAGE SITTING ARRENGEMENT BALANCE SPARE PARTS AVAILABILITY FUEL EFFICIENCY SERVICE 23 NO OF USERS 24 21 06 15 19 15

We have taken sample size of 30 people.

weighted averageQualit iesSpeed Mileag e Sitting

Weig ht25 20 5

Satisfi ed24 21 6

weighted avg.20

15

arrangement Balanc e Availability of spare parts Fuel efficiency Servi ce

10 10 10 20

15 19 15 23

WHILE CALCULATINJG TOTAL NUMBERS OF USERS WHO WERE SUPPOSED TO BE SATISFIED, WE MAADE USE OF WEIGHTED AVERAGE METHOD IB EXCEL GRAPH NO 1

SCALE X axis -PARAMETERS Yaxis-NO OF RESPONDENTS

HERO HONDA

CHAPTER NO 6

FINDINGS AND CONCLUSIONAfter analyzing this sat a collected through interview method we came across several interesting findings .We discovered that about 20 people out of 30 people were satisfied with the all facilities being offered with the bikes. We found that about 24 people out of 30 people were satisfied with the speed of all bikes of hero Honda. For mileage we discovered that 21 people were found to be satisfied out of 30 people. As for sitting arrangement we found only 6 people were satisfied with the way they made arrangement facilities of Hero Honda. As per table we find 15 people were dissatisfied with balance .Hero Honda really has good arrangement for delivery of their spare parts as 19 people were found to be satisfied with spare parts arrangements. Total satisfaction for fuel efficiency was good as per 15 people. And for overall services offered by Hero Honda was good for 23 people.

17

CHAPTER NO 7

LIMITATIONSwhile conducting this study we stumbled upon several problems these problems were LIMITED TIME: This study was conducted under time constraints as we had to finish it within 6-7 days. LIMITED MANPOWER: This study was conducted with only 3 people ,which we feel was really difficult to for doing this study . LIMITED SAMPLE: Practically it was not possible for us to take entire user base considering its huge subscribers In India so we have selected only 30 people for the sake of this study. LIMITED GEOGRAPHIC AREA: We conducted this study under limited geographic area.

HERO HONDA

ANNEXTURECUSTOMER SATIESFACTION SURVEY OF HERO HONDAName:Occupation:Age:Gender:-

Q. 1) Do you use Hero Honda Bike? Yes No

Q. 2) Which quality of Hero Honda do you like? a) Speed b) Mileage c) Sitting Arrangement

19

d) Balance e) CC f) Availability of spare part g) Fuel efficiency Q. 3) Are you satisfied with service? Yes No

Q. 4) What are you feeling, whether it is comfortable? Yes No

BIBLIOGRAPHYWe feel proud to make this report with the help of all primary and secondary data. As we already mentioned that we made use of QUESTIONNAIRES COMPANY WEBSITES GOOGLE TIMES OF INDIA NEWS PAPER

NOTE: WHILE ANALYZING THE DATA GIVEN IN THIS STUDY WE MADE USE OF WEIGHTEDAVERAGE METHOD WHICH WE FOUND SUITABLE HERE TO ARRIVE AT SATISFACTORY SOLUTION.