hero-motor-corp.docx

8/11/2019 Hero-Motor-Corp.docx

1/64

ACKNOWLEDGMENT

At the very onset, I would sincerely like to thank of building up our

confidence, which let to the fulfillment of our market survey report.

The completion of this project is due to the help of few individuals whom

I cannot let go unhanded.

I wish to express our deep gratitude especially to our guide without

whose guidance, support and encouragement.

I would have not been able to complete this market survey report that

delves cursorily on the aspects of Marketing Strategy of Hero Moto

Bike It is needless to say that any piece of creative work require the

involvement of a number of individuals, since it is beyond the scope of

limitation to enlist each and every individuals associated with this work

who extended their co-operation in sharing unbiased views and feedback

which helped to collect concrete data.

Hence, I would express our sincere gratitude to all those who played

contributory role directly or indirectly towards accomplishment of our

market survey report.


2/64

PREFACE

If we want to go global in the world market then we must know the trendof the market, what features must be there in the product so that it should

get popularity among the masses and also should know about

competitors position in every field.

The objective of market survey is to know the strategy of Hero Moto

Bike in the world market and we must know what should be the price

range and what types of marketing should be done so that it gets familiar

with every type of person. So needs and objectives of the market survey

is very important to get a good market share , stand in the market and to

survive the business in the present competitive world where there is a

trend of cutthroat competition.

Hero Moto Bikeis a leading company in bikes sector. Knowing the

comparative position of a brand vis-- vis its competitors is an essential

thing as well as product is essential for deciding appropriate marketing

strategies for any company.

It was then the project was undertaken in order to

1. What is the prospective customers market for Hero Moto Bike in

the world

2. Know the choice of residents of other foreign countries

3. Know the brand image of Hero Moto Corp

4. Perceive the future sales of Hero Moto Bike products

5. Pricing in the view of prospective customers

6. Mode of purchasing the product


3/64

EXECUTIVE SUMMARY

Hero Moto Bikethe Principal activities of the Company is manufacturing

and marketing of motorcycles and spare parts. The Company is a joint

venture between Hero Group, India. The Motorcycles of the Company

features facilities such as four stroke technology, phenomenal fuel

economy and low exhaust pollution levels. The major brands of the

Company include Splendor, Joy and Passion. The two manufacturing

facilities of the Company are located in Haryana. Motorcycles accounted

for 95% of fiscal 2009 gross revenues and spare parts, 5%. Grows over

500% in five years For 2010-11, volume up by 38 per cent ; net profit

soars by 88 per cent; total turnover up by 42 per cent Achieves a high 48

per cent motorcycle market share; and 33 per cent two-wheeler market

share Announces 350 per cent final dividend and 250 per cent

celebration dividend (over and above special interim dividend of 250%)

Over the last five years, company's total turnover grows by a whopping

580 %; PAT by 919 % New Delhi, April13, 2011: Hero Moto BikeCo..,

the newly crowned World No. 1 two wheeler companies, declared

outstanding financial results for the year 2010-11. Profit after tax (PAT)

is Rs. 462.93 crore, a growth of 88 per cent. The company's total turnover

(sales plus other income, net of excise) grew to Rs. 4539.49 crore, a

growth of 42 per cent. In a landmark run, the company achieved a 48 percent market share in the motorcycle category during the year; and 33 per

cent of the total two -wheeler market. The company recorded a

cumulative sale of over 14.25 lacs motorcycles for the year 2010-11.

The company's Spare Parts business also showed a remarkable increase of

39 per cent, taking the annual sales to Rs. 209 crore. Encouraged by the


4/64

response the company has set a target of Rs. 250 crore for the current

financial year.

Hero Moto Corp's growth over the last five years has been truly

outstanding, with both revenue and PAT showing significant jumps of

over 5 times. While the revenue increased from Rs. 783 crore in 2008-09

to Rs. 4539 crore in 2010-11. PAT has increased from Rs. 50 crore in

2008-09 to Rs. 463 crore in 2010-11. The total sales has also increased

from 2,68,931 motorcycles in 2010-11 to 14,25,302 motorcycles in 2010-

11, with volume market share jumping from 27 per cent to 48 per cent in

motorcycles; and 9% to 33% in two-wheelers.Mr. Brijmohan Lall,Chairman and Managing Director, Hero Moto Corp., commending the

company's achievement said, "I thank all our stakeholders - our Hero

Moto Bikefamily of employees, ancillaries, -vendors, dealers, other

business associates, and most importantly, our customers. They have been

instrumental in our achieving the World No.1 status. I would also like to

make special mention of the excellent support provided all through by our joint venture partners Hero Moto BikeCompany, and Hero Cycles Ltd.

Our relationship with them has been wonderful and mutually satisfying.

As we move forward, our collaborative approach will help us continue

our lead." On the momentous occasion, Mr. Pawan Munjal, Director and

CEO, Hero Moto Corp. Said, "The key reason for our success has been

our continuous pursuit of pro-actively delivering value and delight to ourcustomers. This is evident from the pioneering initiatives we undertook

during 2011 - like the full two-year warranty on all Hero Moto

Bikemodels, and the launch of the most comprehensive Customer

Relationship Programme, 'The Hero Moto Bike Passport Programme'.

Further, despite strong competition and pressures on the economy as a

whole, the company has improved operating profits significantly, mainly

because of cost rationalization, strong working capital management and


5/64

manufacturing efficiencies."He added, "We are committed to continue

our lead, by delivering even better value to the customers, in the year

ahead. Accordingly, several new and exciting product launches are lined

up for 2008-09, and in the future. The manufacturing facilities to support

the customer demand would also be pro-actively set up, as has been done

till now." Especially present on the occasion was Mr. K Suzuki, Senior

Managing Director, Hero Moto BikeCompany, Japan, who had flown in

only that morning to attend the Press Conference and the World No. 1

celebrations. Clearly ecstatic he said, I congratulate Hero Moto Bikefor

their wonderful and consistent achievements. Last year they achieved thedistinction of being No. 1 Joint Venture of Hero Moto BikeCompany

worldwide; and this year achieved the unique status of World No. 1 two

wheeler companies. Our relationship has always been strong and solid.

We are proud of this achievement for the Hero Group, Hero Moto

BikeCompany, and the Indo-Japanese co-operation. We would continue

to provide all the necessary support to Hero Moto Corp, for it to remainon the top".


6/64

INTRODUCTION

The Indian Two Wheeler IndustryThe Indian two wheeler sector contributes the largest volumes amongst

all the segments in automobile Industry. Though the segment can be

broadly categorized in to 3-sub segments viz; scooters, motorcycles and

mopeds; some categories introduced in the market are a combination of

two or more segments e.g. scooter and stepthrus. The market primarily

comprises five players in the two wheeler segment with most of the

companies having foreign collaborations with well known Japanese firms

earlier. But with most of the companies now planning 100% subsidiaries

in India.

In the last four to five years, the two-wheeler market has witnessed a

market shift towards motor cycles at the expense of scooters. In the rural

areas, consumers have come to prefer sturdier bikes to with stand the bad

road conditions. In the process of the share of motor cycle 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 2009-10. All new vehicles are a now being replaced by 4

stock motorcycles. Reduced excise duties and fierce competition has led

to a fall in prices of certain models.

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

around four decades ago. Starting as a manufacturer of by cycle

components, hero has today grown into a multiunit, multi-product,

geographically diversified group of companies.

The hero group began with simple Philosophy: to provide excellent

transportation to the common man, at a price he could easily afford. Even

today the dream providing the total satisfaction is all its sphere of


7/64

activity. To consumers, in excellent products at an affordable price; a

thorough understanding the fast changing consumer understanding the

fast changing consumer behaviour, new market segment and

opportunities, and marketing mix sensitive changing customer needs from

the core of Heros marketing strategy and philosophy.

Hero Moto Corp. is one of the leading companies in the two wheeler

Industry. At present, it is segment with around 47% the market share

during financial yr. 2000-01. The company ahs emerged one of the most

of successful players, much ahead of it competitors by it superior and

reliable product quality complemented with excellent marketingtechniques.

Hero Moto Bikehas been an early entrant in the 4-stroke segment of the

two wheeler industry. With a right mix of product styling and pricing the

company has graped the 4-stoke market as compared to Bajaj Auto and

TVS.

TVS Motors Ltd has been the largest manufacturer of mopeds which are prevalent as a low cost transportations and provide a tremendous potential

is all parts of India. However the company is likely to face threat Bajaj

Auto Ltd (BAL) which continued its price based competitions and Hero

Moto Bikecycle and Scooter Ltd. a new entrants in the 2 wheeler market.

Infact the company has achieved excelled the Industry growth rates by a

huge margin. From April to December 2008 while the motor cycleindustry sales were u pto 38.68% TVS motors sales surged by a

whooping 73.6% sat more importantly it is the success of its model

Victor.

Baja Auto has continued with its impressive performance witnessing

significant growth is the motor cycle and three wheeler segments. Based

on the performance fill data one can expect the company to meet it

excellence by FY09.


8/64

Hero Moto Bikeis the largest player is the motorcycle segment. Focused

on contemporary design and style, the company has a compare leusine

ranges bikes viz;

CD-100 DX

CD-100 SS

Splendor

Street Smart

Steek

CBZ

PassionIt splendor model is an urban centric with its fuel efficiency which

accounts to over 60-70% of its sales. The passion launched in mid Jan.

2001 has a resending success contributing to 26% of its sales.

TVS offers a wide ranges of two-wheelers motorcycles-

Victor/Fiero/Max100/ max100R/Max DL.

Scooterette- TVS scootyMoped- chap/XL/XL super/XL supper HD/sports.

TVS plans to launch 4 new models in the coming 15 months. A 4-stroke

version of Indias best selling scooterttes; TVS -scooty and 4-stroke

version of the existing moped line will be launched this year.

Bajaj Auto Ltd: Offer product a service to the customers so as to satisfy

their needs. Its having 4 -stroke single cylinder natural air cool thedisplacement of engine is 111.6 CC having the engine power it 7-7 bhp at

7000 spm. The bike is having a hydrometric disc brake in front wheel.

Flash is an added future in the bike.

In 1993 BAL manufactured 12 different model 5-5 scooter model, 3-

motorcycle model, moped model, 3-three wheeler model.


9/64

But in the recent year Bajaj developed various model in the motorcycle

segment which providing good riding conditions is urban road as well as

rater roads. Scooter- cub/super/super FE/chetak/stride/Msl Priya.

Moped- Bajaj Sunny.

Motorcycle- M-80/kawasaki RTZ/Kawasaki45 by 1993 and latest model

are. Eliminator/Pulsor 180/Pulsor 150/Boxer/Caliber Crowa/Caliber

Sales performance of the player:

Hero Moto Bike repeated a y-o-y growth of 6.3% is its motorcycle sales

for the month of Jan 2006 at 1,45,708 units. Export during the month

have surged almost 64% y-o-y. On a month on-month basis the salesgrowth has been even higher up 16.5%.

MOTORCYCLE APRIL TO DEC

2010

APRIL TO DEC 20 % CHAN

INDUSTRY SAL 2897842 2089637 38.68

INDUSTRY SAL 1281342 1026102 24.85

MARKET SHARE 44.21 49.11Bajaj Auto: Bajaj auto has reported y-o-y growth of 19.8% in motorcycle

sales for Jan 2006 at 75059 units. On a month-on-month basis the growth

is 8.8%. Export performance continues to be impressive with 10,089 two

and three wheelers exported in Jan 2006, a growth of 98.6% y-o-y.

Two wheeler sales for the current year are up 6.8%. The growth is driven

sharply in the motor cycle sales upto 37% in two wheeler segment, theshare of motor cycle has jumped from 52.8% to 67.8% during the current

year. this sharp growth in the motor cycle can be attributed to the positive

response received by its need products and the encouraging performance

of select existing model.

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


10/64

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.

In 1948, Bajaj Auto began trading in imported Vespa Scooters and three-

wheelers. Finally, in 1960, it set up a shop to manufacture them in

technical collaboration with Piaggio of Italy. The agreement expired in1971.

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.

Under the regulated regime, foreign companies were not allowed tooperate in India. It was a complete seller market with the waiting period

for getting a scooter from Bajaj Auto being as high as 12 years.

The Motorcycles segment was no different, with only three manufacturers

viz Enfield, ideal Jawa and Escorts. While Enfield bullet was a four

stroke bike, Jawa and the Rajdoot were two-stroke bikes. The motorcycle

segment was initially dominated by Enfield 350cc bikes and Escorts175cc 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 Moto Bikethen the only producer of

four stroke bikes (100cc category), gaining a top slot.


11/64

The first Japanese motorcycles were introduced in the early eighties.

TVS Suzuki and Hero Moto Bikebrought 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 industrywitnessed a steady growth of 14% leading to a peak volume of 1.9mn

vehicles in 1990.


12/64

COMPANY PROFILE

Fill it. Shut it. Forget it

What started out as a Joint Venture between Hero Group, the world's

largest bicycle manufacturers and the Hero Moto BikeCompany of Japan,

is today the leading manufacturer of India's largest selling motorcycle.

Coming into existence on January 19, 1984. Hero Moto Bikegave 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 30

lakh customers, the Hero Moto Bikeproduct range today commands as

much as 47% making it a veritable giant in the industry. Add to that

technological excellence, an expansive dealer network, and reliable after

sales service, and you have one of the most customer-friendly companies.

In fact, every second bike sold in India today is a Hero Moto Bike!

Customer satisfaction, a high quality product, the strength of Hero

technology and the Hero group's dynamism have helped HML scale new

frontiers and exceed limits.

In the words of Mr. Brijmohan Lall Munjal, the Chairman and Managing

Director, "We will continue to make every effort required for the

development of the motorcycle industry, through new product

development, technological innovation, and investment in equipment and

facilities and through and through efficient management."


13/64

MILESTONE

KEY MILESTONES OF HERO MOTO BIKE

Year Event

1983 Joint Collaboration Agreement with Hero Moto Corp, Ltd.,

1984 Hero Moto Corp. Incorporated

1985 First motorcycle "CD 100" rolled out

1987 100,000th motorcycle produced

1989 New motorcycle model - "Sleek" introduced

1991 New motorcycle model - "CD 100 SS" introduced 500,000th

motorcycle produced1992 Raman Munjal Vidya Mandir inaugurated - A School in the

memory of founder

1994 New motorcycle model - "Splendor" introduced 1,000,000th

motorcycle produced

1997 New motorcycle model - "Street and 2nd manufacturing plant at

Gurgoan inaugurated1998 2,000,000th motorcycle produced

1999 New motorcycle model - "CBZ" introduced Environment

Management System of Dharuhera Plant certified with ISO-14001

by DNV Holland Raman Munjal Memorial Hospital inaugurated -

A Hospital in the memory of founder Managing Director, Mr.

Raman Kant Munjal2000 4,000,000th motorcycle produced Environment Management

System of Gurgaon Plant certified ISO-14001 by DNV Holland

Splendor declared 'World No. 1' - largest selling single two-

wheeler model " Hero Moto Bike Passport Programmed" - CRM

Programmed launched


14/64

2001 New motorcycle model - "Passion" introduced One million

production in one single year New motorcycle model - "Joy"

introduced 5,000,000th motorcycle produced

2002 New motorcycle model - "Dawn" introduced New motorcycle

model - "Ambition" introduced Appointed Virender Sehwag,

Mohammad Kaif, Yuvraj Singh as Brand Ambassadors

2003 Becomes the first Indian Company to cross the cumulative 7

million sales mark Splendor has emerged as the World's largest

selling model for the third calendar year in a row (2000, 2001,

2002) New motorcycle model - "CD Dawn" introduced Newmotorcycle model - "Splendor +" introduced New motorcycle

model - "Passion Plus" introduced New motorcycle model -

"Karizma" introduced

2004 New motorcycle model - "Ambition 135" introduced Hero Moto

Bike became the World No. 1 Company for the third consecutive

year. Crossed sales of over 2 million units in a single year, a globalrecord. Splendor - World's largest selling motorcycle crossed the 5

million mark New motorcycle model - "CBZ*" introduced Joint

Technical Agreement renewed Total sales crossed a record of 10

million motorcycles

2005 Hero Moto Bike is the World No. 1 for the 4th year in a row New

motorcycle model - "Super Splendor" introduced New motorcyclemodel - "CD Deluxe" introduced New motorcycle model -

"Glamour" introduced New motorcycle model - "Achiever"

introduced First Scooter model from Hero Moto Bike - "Pleasure"

introduced

2006 Hero Moto Bike is the World No. 1 for the 5th year in row Fill it.

Shut it. Forget it


15/64

The joint venture between india's hero group and Hero Moto Bikecompany, has

not only created the world's single largest two wheeler company but also one of

the most successful joint ventures worldwide.

During the 80s, Hero Moto Bikebecame the first company in india to prove that

it was possible to drive a vehicle without polluting the roads. The company

introduced new generation motorcycles that set industry benchmarks for fuel

thrift and low emission. A legendary 'fill it - shut it - forget it' campaign

captured the imagination of commuters across india , and Hero Moto Bike sold

millions of bikes purely on the commitment of increased mileage

Over 20 million Hero Moto Biketwo wheelers tread indian roads today. Theseare almost as many as the number of people in finland , ireland and sweden put

together!

Hero Moto Bikehas consistently grown at double digits since inception; and

today, every second motorcycle sold in the country is a Hero Moto Corp. Every

30 seconds, someone in india buys Hero Moto Corp's top -selling motorcycle

splendor. This festive season, the company sold half a million two wheelers in asingle month a feat unparalleled in global automotive history.

Hero Moto Bikebikes currently roll out from its three globally benchmarked

manufacturing facilities. Two of these are based at dharuhera and gurgaon in

haryana and the third state of the art manufacturing facility was inaugurated at

haridwar, uttrakhand in april this year. These plants together are capable of

producing out 4.4 million units per year.Hero Moto Bike's extensive sales and service network now spans over 3000

customer touch points. These comprise a mix of dealerships, service and spare

points, spare parts stockiest and authorized representatives of dealers located

across different geographies.

Hero Moto Bikevalues its relationship with customers. Its unique crm initiative

- Hero Moto Bike passport program, one of the largest programs of this kind in

the world, has over 3 million members on its roster. The program has not only


16/64

helped Hero Moto Bike understand its customers and deliver value at different

price points, but has also created a loyal community of brand ambassadors.

Having reached an unassailable pole position in the indian two wheeler market,

Hero Moto Bike is constantly working towards consolidating its position in the

market place. The company believes that changing demographic profile of india

, increasing urbanization and the empowerment of rural india will add millions

of new families to the economic mainstream. This would provide the growth

ballast that would sustain Hero Moto Bike in the years to come. As brijmohan

lall munjal, the chairman, Hero Moto Bike motors succinctly points out, "we

pioneered india's motorcycle industry, and it's our responsibility now to take theindustry to the next level. We'll do all it takes to reach there.''

HERO MOTO CORP'S MISSION

Hero Moto Corp s mission is to strive for synergy between technology, systems

and human resources, to produce products and services that meet the quality,

performance and price aspirations of its customers. At the same time maintain

the highest standards of ethics and social responsibilities.This mission is what drives Hero Moto Biketo new heights in excellence and

helps the organization forge a unique and mutually beneficial relationship with

all its stake holders.

HERO MOTO BIKE'S MANDATE

Hero Moto Bikeis a world leader because of its excellent manpower, proven

management, extensive dealer network, efficient supply chain and world-class products with cutting edge technology from Hero Moto BikeCompany. The

teamwork and commitment are manifested in the highest level of customer

satisfaction, and this goes a long way towards reinforcing its leadership status.

FROM THE CHAIRMAN'S DESK LEADING WITH A DREAM

We had a dream. The dream of making motorcycles that would touch and

transform the lives of our customers by giving them a mode of transport that

was fuel-efficient, comfortable and environment friendly. One that would


17/64

enhance their efficiency at work, enable them to share moments of joy with

their families and add up to a better quality of life.

In a scenario where the customer had a few choices, our vision was to offer the

highest quality at a reasonable price, to meet our customers expectations, and

to exceed them.

Behind the success of Hero Moto Corp, is the saga of team-work. We would

like to acknowledge the role played by our jv partners, Hero Moto

Bikecompany, all our business associates, shareholders and employees.

In the new millennium, we stand committed to innovation, to change, to

achieving breakthroughs to moving forward in the new century, whileretaining the values that have been like a beacon in this journey thus far.

2007

- Hero Moto Corp. has appointed Mr. Yutaka Kudo as Director and

Whole-time Director of the Company in the category of Executive

Director w.e.f. April 1, 2007.

- Hero Moto Bike is the World No. 1 for the 6th year in a row- New 'Splendor NXG' launched

- New 'CD Deluxe' launched

- New 'Passion Plus' launched

- New motorcycle model 'Hunk' launched

- 20 million production milestone achieved

2008- Hero Moto Bike has informed that Mr. Arun Nath Maira. has been

appointed as an Additional Director in the category of Non Executive and

Independent Director w.e.f. December 20, 2008 by the Board of Directors

by way of passing a resolution by circulation.

- Hero Moto Bike Haridwar Plant inauguration

- New 'Pleasure' launched

- Splendor NXG lauched with power start feature


18/64

- New motorcycle model 'Passion Pro' launched

- New 'CBZ Xtreme' launched

- 25 million production milestone achieved

- CD Deluxe lauched with power start feature

- New 'Glamour' launched

- New 'Glamour Fi' launched

2010

- Hero Moto Bike has appointed Mr. Ravi Nath as an Additional

Director in the category of Non Executive and Independent Director

w.e.f. October 14, 2010 by the Board of Directors by way of Passing aresolution by circulation on October 14, 2010.

BOARD OF DIRECTORS

No. Name of the directorscategory of directorship

1 Mr. Brijmohan Lall Munjal

Chairman & whole-time director

2 Mr. Pawan Munjal managing director3 Mr. Toshiaki Nakagawa joint managing director

4 Mr. Yutaka kudo whole-time director

5 Mr. Om prakash munjal non-executive director

6 Mr. Sunil kant munjal non-executive director

7 Mr. Masahiro takedagawa non-executive director

8 Mr. Takashi nagai non-executive director9 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

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 Mr. Sunil bharti mittal non-executive & independent director
http://www.herohonda.com/co_board_directors.htm#1#1http://www.herohonda.com/co_board_directors.htm#2#2http://www.herohonda.com/co_board_directors.htm#3#3http://www.herohonda.com/co_board_directors.htm#4#4http://www.herohonda.com/co_board_directors.htm#5#5http://www.herohonda.com/co_board_directors.htm#6#6http://www.herohonda.com/co_board_directors.htm#8#8http://www.herohonda.com/co_board_directors.htm#9#9http://www.herohonda.com/co_board_directors.htm#10#10http://www.herohonda.com/co_board_directors.htm#11#11http://www.herohonda.com/co_board_directors.htm#12#12http://www.herohonda.com/co_board_directors.htm#13#13http://www.herohonda.com/co_board_directors.htm#14#14http://www.herohonda.com/co_board_directors.htm#15#15http://www.herohonda.com/co_board_directors.htm#17#17http://www.herohonda.com/co_board_directors.htm#17#17http://www.herohonda.com/co_board_directors.htm#15#15http://www.herohonda.com/co_board_directors.htm#14#14http://www.herohonda.com/co_board_directors.htm#13#13http://www.herohonda.com/co_board_directors.htm#12#12http://www.herohonda.com/co_board_directors.htm#11#11http://www.herohonda.com/co_board_directors.htm#10#10http://www.herohonda.com/co_board_directors.htm#9#9http://www.herohonda.com/co_board_directors.htm#8#8http://www.herohonda.com/co_board_directors.htm#6#6http://www.herohonda.com/co_board_directors.htm#5#5http://www.herohonda.com/co_board_directors.htm#4#4http://www.herohonda.com/co_board_directors.htm#3#3http://www.herohonda.com/co_board_directors.htm#2#2http://www.herohonda.com/co_board_directors.htm#1#1


19/64

KEY POLICIES

AN ENVIRONMENTALLY AND SOCIALLY, AWARE

COMPANY

At Hero Moto Corp, our goal is not only to sell you a bike, but also to

help you every step of the way in making your world a better place to

live in. Besides its will to provide a high-quality service to all of its

customers, Hero Moto Biketakes a stand as a socially responsible

enterprise respectful of its environment and respectful of the important

issues.

Hero Moto Bikehas been strongly committed not only to environmentalconservation programmes but also expresses the increasingly inseparable

balance between the economic concerns and the environmental and social

issues faced by a business. A business must not grow at the expense of

mankind and man's future but rather must serve mankind.

"we must do something for the community from whose land we generate

our wealth."A famous quote from our worthy chairman mr.brijmohan lall munjal.

ENVIRONMENT POLICY

WE at Hero Moto Bikeare committed to demonstrate excellence in our

environmental performance on a continual basis, as an intrinsic element of

our corporate philosophy.

TO ACHIEVE THIS WE COMMIT OURSELVES TO:

Integrate environmental attributes and cleaner production in all our

business processes and practices with specific consideration to substitution

of hazardous chemicals, where viable and strengthen the greening of

supply chain.

Continue product innovations to improve environmental compatibility.


20/64

Comply with all applicable environmental legislation and also controlling

our environmental discharges through the principles of "alara" (as low as

reasonably achievable).

Institutionalise resource conservation, in particular, in the areas of oil,

water, electrical energy, paints and chemicals.

Enhance environmental awareness of our employees and dealers / vendors,

while promoting their involvement in ensuring sound environmental

management.

QUALITY POLICY

Excellence in quality is the core value of Hero Moto Corp's philosophy.We are committed at all levels to achieve high quality in whatever we do,

particularly in our products and services which will meet and exceed

customer's growing aspirations through: Innovation in products, processes

and services. Continuous improvement in our total quality management

systems. Teamwork and responsibility.

MISSION STATEMENT IN PURSUIT OF EXCELLENCE We, at Hero Moto Corp, are continuously striving for synergy between

technology, systems, and 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 toexcellence in the new millennium".

WE CARE FOR ENVIRONMENT

A philosophy closest to Hero Moto Bikeis that which pertains to the

environment, which is why the company goes that extra step to ensure

that each one of the high technology 4-stroke Hero Moto

Bikemotorcycles meet the most demanding of pollution norms at every

level.


21/64

OBJECTIVE

Through the company has wide list goals to be achieved but the major

objective of the company has to achieve areas follows:-

1. To provide right product to right people at right time.

2. Price should be reasonable; by this every level of person can afford

the product.

3. To max imize the share holders value by customer value

enhancement.

4. Changes should be according to prospective customer

5. To provide delivery of standard product.

6. To provide value for money to there consumers.


22/64

MARKETING MIX STRATEGY

Product Mix

Product Variety Quality Design Brand Name Warranties Service Features

Price Mix

List Price Discount Allowances Payments

Periods

Credit Terms

Place Mix

Channels Coverage Assortments Inventory Transport

Promotion Mix

Sales Promotion Advertising Public Relations Direct Marketing


23/64

MARKETING MIX: -

Standardised Marketing Mix:

An international marketing strategy for using basically the same product,

advertising, distribution channels & other elements of the marketing mix

in all the countries of companys international market.

Adapted Marketing Mix:

An international marketing strategy for adjusting the marketing mix

elements to each international target market, bearing more costs but

hoping for a larger market share & return.

International Scenario

A two-wheeler is used as a personal/family vehicle or a goods carrier in the

enveloping countries, whereas it is confined to sports/racing (heavy

motorcycles) or short istance shopping (mopeds) in developed countries.

The world two-wheeler market is dominated by Japan. Japanese

manufacturers account for around 65% of the total two-wheeler

production in the world. However, production within Japan has been

declining due to lower domestic demand and shift in manufacturing base

outside the country. Japan is also the world's largest exporter of two-

wheelers in the world controlling around 75% of the world trade. Its

major markets are China, USA and Europe. In terms of player positions,

Hero Moto BikeCorporation, Yamaha Motors and Suzuki MotorsCorporation share the top three slots in the world two-wheeler market.

The table below shows the production and sales figures of motorcycles

and scooters in Japan during the past decade More than 50% of the

production in Japan is exported out of the country. This scenario contrasts

directly with the Indian scenario. In India, only about 15% of the

production in FY11 were exported


24/64

The Asian continent is the largest user of two-wheelers in the world. This

is due to poor road infrastructure and low per capita income, restrictive

policy on car industry.

The technology for two-wheelers is not as well developed as for car

industry. This is due to oligopoly between top five players in the segment,

compared to thirty manufacturers in the car industry.


25/64

THE HERO MOTO BIKE MISSION


26/64

1. Enhancing quality of life

The Hero Moto Bikegroup is committed to creating a better quality of life

for people everywhere and to furthering the interest of the society by

being a responsible corporate citizen.

2. Creating Happiness

We will bring happiness into every home, offering high consumer

durable vehicles at affordable prices, and comfort.

3. Achieving progress

We will pursue innovative technologies in the field of customer care

vehicles and energy, create product and services that will improve toquality of life, realize the goals of the world community and protect the

environment

4. Sustaining growth

We will be a source of pride to our business associates by ensuring

mutual prosperity and growth through the implementation of forward

looking corporate strategies aimed at identifying opportunities andresponding intelligently to dynamics of change.

5. Pursuing Excellence

We will provide a conducive environment for enabling our employees to

develop their potential and make a significant contribution to the group

success.

PLACEMENT OF HERO MOTO BIKE

Hero Moto BikeLimited sells the motorcycle through a widely spread all India

networks of over 450 of dealers. The motorcycle can be serviced at the

authorized dealers or SSPs (Spare and Service points).

In the year 1996, Hero Moto Bike was the first company to introduce Indias

first chain of automated services workshops. To expand the service network

further to smaller towns, the company has appointed Service extensions.


27/64

Hero Moto Bike genuine spare parts are available from the dealers, SSPs and

the stockiest. The company provides good after sales service through its well-

established dealer network.

The company has a policy of three S, Single S for stockiest, Double S for

services and three SSS for sales.

The company is having about 460 of SSS, which deals in Sales, Service, and

Stock, 260 of SS, which deals in Service and Stock and 12 of S, which

exclusively deals in stocks.

The Network As On 31st March 2002 Is As Under: Dealers (3s_-Sales,

Service, Spares)-458 , Ssps (2 S-Service And Spares)-256, Stockiest (SingleS-Spares)-12

The company has developed a unique distribution network, which has given it

a distinctive competitive advantage. The whole idea behind establishing this

vast distribution network is to reach the customer even in the remote areas.

The company has segregated the areas as Urban, Rural, and semi rural and has

appointed dealers in many of these areas, after seeing the potential. Thecompanys major thrust is the easy availability of all the models in every part

of the country.

The companys bikes are sold through the dealers and they are required to

provide proper infrastructure, Workshops, Facilities, and trained Personals.

The dealers are given targets and they are required to sell sufficient number of

vehicles to earn a return on investments. Regional offices are in constant touchwith these dealers.

Presently the company is having 8 regional offices in the country. The

regional offices constantly assist these offices as a kind of linkage between the

company and the dealer and the dealers. The sales and the marketing personals

at the regional offices are trained and encourage maintaining a cordial

relationship with various dealers on the basis of trust and understanding. The

companys service engineer and the other sales staff supervise all the facilities


28/64

at the dealer and the service outlet from planning the layout to the errection of

the specially designed benches and the tools. Infact all the possible efforts are

made by the company to make the dealers to become the part of the Hero

family and its culture.

The company has appointed fleet of more than 400 trucks from around 45

transporters to assist them in the delivery of vehicle. From the factory and

within the factory premises, the company has a good fleet of trucks and

trailers. The company to deliver the vehicle to the dealers showroom in the

gactory fresh condition uses these trucks and trailers. The cargos are loaded in

the trucks and the trailers and they are delivered at the stockyards of thedealers in whichever part of the country they may be located. So the company

in this way delivers the motorbikes in the fresh factory conditions. By the time

the bike reaches our dealers they might have done hardly a coupler of

kilometers. The company believes the marketing efforts should go beyond

ensuring product availability.

The focus is therefore on a vast distribution network. In order to ensure thecustomers a better quality service at the various stations, the company mounts

an effective training porograme in which all the mechanic, supervisory staff

and the other senior staff personnel participate.

The company is also planning to set up some of the fully equipped express

authorized highway. In these highways, one would see a Hero Moto

Bikedealer every 15-25 KMS.This concept is thought by the company with aview to provide good after sales services to the customer. This exercise will

also check the company to check the use of spurious products, which

ultimately spoil the bike. The highways to be covered in this scheme are:

NEW DELHI-GWALIOR NEW DELHI-CHANDIGARH AMBALA-LUDHIANA KOLKATTA-DHANBAD


29/64

The company has a dream to increase this figure of 458 dealers to 650 by the

end of 2003 and increase the figure of 256 service stations to 350 by the end of

the year 2003.The company is going by an expansion process.

The company is perhaps the second company after Maruti Udyog Limited to

implement a factory fresh concept. The company is the only company in the

two-wheeler segment having so much of vast distribution network. Hero Moto

Bikewill be adding 25 more dealers and 50service stations to build a network

of 575 dealership-cum-service points (including 400 dealerships) across the

country.

The level of investment in an automated Hero Moto Bikeservice station isexpected to be around Rs 10 lakh, apart from land and building. ``No dealer

has any problem in expanding business,'' says Tapan, Marketing manager.

``We've tied up with Citibank and Centurion to provide bill discounting

through our dealers. Consumer Finance: In order to focus on organized

consumer financing, Hero Moto Biketied up with Tata Finance a week ago.

This is Hero Moto Corp's second tie-up following Centurion, which isaccounting for around 3,000 bikes a month through 100 dealerships.

A thorough understanding of the fast-changing consumer behaviour, new

market segments and product opportunities along with sensitivity to changing

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

Hero we essentially have a completely customer-driven approach. A nation-

wide dealer network comprising of over 3,500 bicycle dealers, 350 dealers formopeds and 225 franchise holders for motorcycles, ensures convenient access

to the Group's products across the country.

With a deep sense of belonging to the Hero fraternity, the Group's dealer

network has catalysed growth and acted as a strong bridge between the

customers and the Group.

Conventionally, very few Indian bicycle manufacturers were interested in

exports. However, the Hero Group's foray into the overseas markets pioneered


30/64


31/64

Product Description (HERO MOTO BIKELtd.)

Hero Moto Bikehas launched the following motorbikes in the Indian

market.

HERO MOTO BIKE CD 100 HERO MOTO BIKE CD 100 SS HERO SLEEK HERO MOTO BIKE Splendor HERO MOTO BIKE Street Smart HERO MOTO BIKE CBZ

HERO MOTO BIKE Joy HERO MOTO BIKE Passion HERO MOTO BIKE Ambition

Hero Hero shifted its focus from catering to the fuel efficient

conscious consumer to try and occupy other segments of the motorbike

market and therefore the new product launches from Hero Moto Bikein

the last three year have been in this direction. The company has alsoupgraded some of its bikes to stay in contention and to meet Euro

emission norm s. The new underlining theme for the company One for

everyone has led to the launching of new products With the launch of

new motorbikes and various other motorbikes in the pipeline, Hero Moto

Corp s strategy is to get into these segments of the motorcyc le market

where they have not made in roads earlier.

PRICING STRATEGIES OF HERO MOTO BIKE

The company has a policy to price its product very competitively. In

todays world, one cannot has a skimming pricing says Mr. Tapan,

marketing manager, Hero Moto Corp. Necessarily the pricing policy is

completely a blend of two strategies i.e. Penetration and Skimming. It has


32/64

been the companys policy to provide the customers with value for

money-give more for less. We are the only company in the two wheeler

segment that is in the process of passing on the whole benefit of cost

advantage achieved as a result of the increased localization levels of upto

60% to the customers.

We are in the process of keeping our product increasing popular and

affordable. The company keeps telling its customers to think about

Quality rather than price. Further if one talks about the changes in the

price in the last three years, the prices have never been changed except

the budgets except once in APRIL 2011,when the company started offwith their celebration offer , and thus decided to sanctioned a discount

and curtail on every Model Rs 1001\-. The company is surely in a

business of delivering quality rather than price. For instance the Boxer,

which is of only 29,990 and is the cheapest bike of the industry. The

company gives importance to the quality rather than cheap products.

Well Hero Moto Bike has bikes at different price point but there is onecommon thing that is they are priced at a premium of INR 2000- 3000

from the competitors and it seems their strategy is working fine with the

target customers as it is the largest seller of bikes in the Indian market

with a market share of 48 % .Customers are redy to shell out the extra

money because they believe and its fact that the fuel efficiency of the

bikes is much better than its competitors the different price points forHero Motors Limited are :

NAME PRICE

Dawn ------------------- 38,000

Splendor --------------- 47,000

Passion ---------------- 49,000

Cbz--------------------- 58,000-66,000


33/64

Thus we find that HML has bikes for every one for entry level customers

they have dawn which is a no frill attached product whose emphasis is on

mileage with performance .And for customers who like to have bike

which is good at performance and with descent looks they have Splendor

which is their fastest selling bike and account for half of the total sales.

Customers who are looking for style with performance can go for Passion

which is a huge success among the urban class as it is priced little bit

higher than splendor and the looks of the bike are astounding. For

customers who want style and power they have CBZ which is targeted

towards the premium segment and it was a runaway success initially butis not a hot seller now due to some problems. Hero Moto Bikeis planning

to introduce few more models in years time in order to make their

portfolio of products more versatile. They are trying to introduce new

models and they are trying to introduce models at the premium segment

as it has high margi ns and the company feels that its the segment which

is will grow in the near future as the income of people will increase withthe change of life styles .HML also intend to introduce few models which

are economical in nature as they this segment provides the volumes to the

company. Hero Moto Bikestill wants to charge a price of premium as its

brand enjoys a high level of respectability and reliability among the target

customers as their products have already proved their mettle in the market

and enjoy high level of brand equity among the target customers. HeroMoto Bikehas an advantage of large no of dealers and also economies of

scale which help them to absorb the costs to a great extent.


34/64

PROMOTIONAL STRATEGIES OF HERO MOTO BIKE

Hero Moto Bikerides safe

Hero Moto Corp's `Ride Safe and Good Rider' campaign is aimed at

communicating the philosophy of delivering safe products and promoting

good driving for the overall safety of the Hero Moto Bikecustomer.

Created by McCann Erickson, the ad-- Hero Moto Bikecares for your

safety--invited all Hero Moto Bikeowners to attend the Ride Safe

programme on October 27, 2011 at Delhi's India Gate lawns. This was the

first phase of the programme, where three instructors from Japan

demonstrated techniques of right driving. In the second phase, Hero MotoBikewill communicate the launch of the 4S concept (sales, service, spare

parts and safety) at Hero Moto Bikedealerships. The focus of the third

phase will be to promote the launch of the Hero Moto BikeSafety Riding

Promotion School, which will have riding simulators and safety riding

tracks

Hero Hero will take the riding programme-- where trained personnel willgive riding tips to bike owners-- to over 100 dealerships across 90 towns.

Promotion in this sector cannot be like that in the Fast Moving Auto pats

(Automobile) sector. The promotions in this sector are like 0% finance

schemes and other sort of things. The company takes the services of

many good and reputed advertising agencies like Reddifuusion, Lintas,

sachi & Sachi and others.The company has also signed a kind of agreement with two celebrities

just now to be their brand ambassadors. Hero Moto Corp, a leading

manufacturer of motorcycles, has roped in film actor Hrithik Roshan and

captain of Indian Cricket team Sourav Ganguly as its brand ambassadors

for three years till 2003.


35/64

They would endorse the company products, attend corporate and brand

events and help promote its "we care" campaign comprising safety riding,

environment, and friendliness.

Hrithik and Ganguly said they were glad to be associated with Hero Moto

Corp. Hero has embarked upon an ambitious project to achieve sale of

one million bikes this year with a market share of 47 per cent. The

turnover would be in excess of Rs. 3000 crore. In October alone, 1,12,000

motorcycles have been sold, Compared to 66,063 units in the

corresponding period last year, the increase in sales is a phenomenal 69

per cent. Cumulative sales jumped up by 41.58 per cent to 5.72 lakhsunits during April-October as against 4.04 lakh units in the same period

last year.

At Hero Moto Bike, our goal is not only to sell the customer a bike, but

also to help him at every step of the way in making the correct riding

decisions. Assisting him in making the right judgments on the road, and

helping him to choose the right helmet and other riding equipmentAnd as bike handling requires know-how, skill, and rigorous mental

conditioning, we have put together certain safety tips and suggestions that

will enhance the riding comfort. Last but not the least, it is always

important to remember - a good rider is a safe rider.

Hero Moto Bikeis enhancing the Advertising &Promotion budget by

around 35 per cent from Rs 41 crore in 1999-2000. Apart fromconcentrating on mainstream Splendor-- the world's largest selling bike--

and upscale CBZ motorcycles, Hero Moto Bikehas identified ``soft areas''

like services and spares parts for the purpose of intense communication.

The creative account of Hero Moto Bikerest with big names like

Hindustan Thompson Association, Lintas, Sachi and Sachi and so on.

Hero Moto Bikeis also planning a major campaign to re-launch the

restyled step-thru Street Smart. While customer references-- and not


36/64


37/64

identifying title sponsorships of youth-centric movies. In terms of media

exposure, the company is looking at sports, movies, and news. For the

CBZ Motorcycle, this year it is planning to run commercials in youth

channels like MTV; Discovery and Star Movies.

The Target: Services will be a major differentiator,'' says Sobti.``The

campaigns will highlight the high level of services and

automatedfacilities at our dealerships.'' Hero Moto Bikeis expecting a 30-

35 per centgrowth in spare parts revenue, which accounted for Rs 100

crore in 1999-2000.In the new fiscal, Hero Moto Bikeis aiming to take

the sales of Splendor from40,000 a month to 50,000 a month; CBZ from4,500 a month to 5,000; and a10-15 per cent growth in CD and CD-SS

brands up from 25,000 a month now. There-launched step-thru Street

Smart is expected to account for around25,000-30,000 in the first year.

Services will be and is the differentiator. The campaigns will highlight

the high level of services and automated facilities at the companys

dealerships. Hero Moto Bikeis expecting a 30-35 per cent growth in spare parts revenue, which accounted for Rs 100 crore in 1999-2000.In the new

fiscal, Hero Moto Bike is aiming to take the sales of Splendor from40,

000 a month to 50,000 a month; CBZ from 4,500 a month to 5,000; and

10-15 per cent growth in CD 100 and CD100-SS brands up from 25,000 a

month now. Supporting all of the Hero Moto Corp's growth projections

are amulet-pronged strategy including a thrust on a customer relationship programme, major increase in advertising and promotion (A&P)

spending, expansion of dealership network, and a focus on organized

consumer financing.


38/64

DEALERSHIP EXPANSION

Hero Moto Bike will add 25 more dealers and 50service stations to build

a network of 575 dealership-cum-service points(including 400

dealerships) across the country.

The level of investment in an automated Hero Moto Bike service station

isexpected to be around Rs 10 lakh, apart from land and building. No

dealerhas any problem in expanding business,'' says Sobti. We've tied up

withCitibank and Centurion to provide bill discounting through our

dealers.''Consumer Finance: In order to focus on organised consumerfinancing, HeroHero tied up with Tata Finance a week ago. This is Hero

Moto Corp's secondtie-up following Centurion, which is accounting for

around 3,000 bikes a month through 100 dealerships.

We've got a good internal rate (based on IRM), which is standard

acrossthe country,'' says Sobti. ``These finance companies bring

refreshinglycustomer-friendly focus to our organisation.''With Tata Finance, Hero-Hero's reach will be extended to over

150dealerships.

Also, Tata Finance is expected to add 2,000 bikes a month. Presently,

consume financing, including non-organised financing, contributes

around 20,000 Hero Moto Bike bikes a month. Gauging Consumer: Hero

Moto Bike is chalking out a customer relationship programme, which isexpected to be established in the next three years. We're discussing with

Result McCann,'' says Sobti.


39/64

SALES PROMOTIONS

Hero Moto Bikeregularly has promotions running for its dealers as well

as customers in order to ensure that there is a interest among the target

customers abut the company and its products. Normally Company

participates in road shows, Sponsors college festivals, promotes eco

friendly initiatives, Have festive Season offers, and sometimes price

discounts to attract the attention of the people. These promotions are

targeted mainly on youngsters as they are the primary buyers of bikes.

The company launches financial schemes as Zero % finance schemes incollaboration with different banks so that customers can pick bikes in

easy installments. The effect of these promotions can be understood from

the fact that 35 % of bikes are sold through this medium.

INTRODUCTION OF MARKET RESEACH

Marketing is a restless, changing dynamic field, since 1920 many

important and dramatic changes have taken place in marketing.

Thousands of new products, including those of entire new industries such

as automobiles, electronic and computers, textiles, footwear etc. have

appeared on the market.

Though al these occur through a gradual procedure of change but

pronounced shift in the orientation of times from production to marketing

moreover, the role of marketing itself has been changing. The various

crises o f the 1970s material and energy shortage, inflation, economic

stagnation, high unemployment, dying industries have forced the

marketing executives to assume a wide range of responsibilities that have

grown in complexities.


40/64

Due to the many challenges offered by the environment, the companies

executives are becoming more driven in their strategy decision making

for making sound marketing decisions in response to this requirement of

formalized means of acquiring many ways has reached a stage of

maturity i.e, marketing research.

Market research has become a great tool for these companies to get the

feedback and formulate strategies accordingly in todays eager to know.

What consumer perceives about various brands for the perfect selection

of target market. In an era where competitive pressures have make the

cost of failure prohibitive, research has become crucial in getting themarket plan right. As the project was globalization of Hero Moto Corp

I found that the company is making its marketing mix strategi es by

considering the consumer at the central point because, now a days, the

consumer has become more aware and is no more a novice. Thats why

marketing research has become an important tool in the hand of marketer

to understand the versatile nature of ever changing consumer behavior asdepicted by the marketing research, as refined by American Marketing

Association.

Is the function which links the consumer, customer and public to the

marketer through the information used to identify and refined marketing

opportunities and problems, generate, refine and evaluate marketing

actions: monitor marketing performance and improve understanding ofmarketing as a process.

Marketing research specifies the information required to address these

issues designs the method for collecting information managers and

implements the data collection process, analysis the results and

communicates the finding and their implications.


41/64

ADVERTISING

The advertising includes both print and television media. The company

uses the services of Lintas, Sachi, and Sachi but Hindustan Thompson

Association deals main of the advertising. Besides of giving the

commercial advertising the company also releases the advertisement,

which are of public interest and especially the company releases the

social advertising as to how to go about the safe driving. The company

keeps on sponsoring different Programes and various kinds of games like

the company every year sponsors Golf Championship. c The companyhas also recently decided to increase their adverting budget for the current

year as they have to release more advertisements in public interest and the

company has to re-launch the Street Smart model once again which was a

tremendous failure in the early stager of its launch.

Sale Promotion-The company does sale promotion for both dealers and

the customers. The company is currently offering the promotion to theircustomers as they are offering a discount of 1001.This discount is the

company sanctioned discount and the dealers may also offer some kind of

discount due to competition to attract customers and to increase the sale

figures. The company also offers a kind of promotion to the dealers; The

Company is having a slab system as a tool for promotion to the dealer.

Advertising & Promotion:

Hero Moto Bike is enhancing the A&P budget by around 35 per cent

from Rs 41 crore in 2010-2011. Apart from concentrating on mainstream

Splendor-- the world's largest selling bike-- and upscale CBZ

motorcycles, Hero Moto Bikehas identified ``soft areas'' like services and

spares parts for the purpose of intense communication.


42/64

While customer references-- and not media strategy-- are expected to

support the CD brand sales, Hero Moto Bike will look at social areas --

like civic issues, association with NGOs, contribution to greener causes--

for corporate communications.

The corporate campaign will be largely complemented by on-ground

initiatives under the umbrella brand of ``We Care'', incorporating

activities in the arena of community services, safety and services

programmes, tree-plantations and environmental-friendly projects.

In line with Hero's worldwide, safety riding programme, this fiscal Hero

Moto Bike will take the riding programme-- where trained personnel willgive riding tips to bike owners-- to over 100 dealerships across 90 towns.

PERSONAL SELLING-

As a part of sales promotion, the company also does personal selling to

the corporate sector. This is done in case of institutional selling. In the beginning only the CSD canteens were included but now even Multi

National Companies also form a part of the institutional selling

Heros corporate week -The week in December 2001 was observed as the

corporate week. This week was observed in the year 201 to spread

awareness among the corporate employees about the company and its

range of products. In this week various vendors participated as well asvarious dealers participated. This platform was also used as making and

building more cordial relations among the employees and the dealers.


43/64

COMPETITORS OF HERO MOTO BIKE

BAJAJThe Bajaj Group came into existence during the turmoil and the heady

euphoria of India's freedom struggle. Jamnalal Bajaj, founder of the Bajaj

Group, was a confidante and disciple of Mahatma Gandhi, and was

deeply involved in the effort for freedom. The integrity, dedication,

resourcefulness and determination to succeed which are characteristic of

the Company today, are often traced back to its birth during those long

days of relentless devotion to a common cause.

Kamalnayan, the eldest son of Jamnalal Bajaj, succeeded his father in

1942, at the age of twenty-seven. Putting the Nation before business, he

devoted himself to the latter only after India achieved independence in

1947. But when he did so, he put his heart and soul into it. Within a short

while, he not only consolidated the Group, but also diversified into

various manufacturing activities, elevating the Group to the status it

enjoys till this day

Rahul Bajaj today heads the Group. He has been the Chief Executive

Officer of Bajaj since 1968 and is recognized as one of the most

outstanding business leaders in India. As dynamic and ambitious as his

illustrious predecessors, he has been recognized for his achievements at

various national and international forums. Bajaj is currently India's largest

two and three-wheeler manufacturer and one of the biggest in the world.

Bajaj has long left behind its annual turnover of Rs.72 million (1968), to

currently register an impressive figure of Rs.42.16 billion (US$ 936

million).


44/64

TVs- Ltd:

They have a vision of being a highly profitable and socially responsible,

leading manufacturer of high value, environmentally friendly, lifetime

personal transportation products for customers in global markets and to

provide fulfillment and prosperity for employees, dealers and vendors

Suzuki

TVS Suzuki broke out of the bottoming formation with a rise in volume

and went into a major uptrend. The stock is well above its rising 30

WMA and its earlier intermediate bottoms, and hence, the major trendof the stock is up. The relative strength line for the stock has moved

past its zero line, indicating that the stock is outperforming the indices.

Investors ust hold on to the long positions in the stock while more long

positions in the stock must be added after the next intermediate

correction.

The intermediate trend of the stock is still up and investors will have towait for some more time before the stock actually goes into an

intermediate downtrend. Keep a close watch at the stock and investors

holding the stock must continue to do so. Trading volumes are less, and

hence, investors must pick small quantities.

LMLLML is also in a major uptrend like the other stocks in this sector, as the

stock moved past its earlier intermediate top and its 30 WMA in the

current intermediate rise. The stock is still in an intermediate uptrend

and is currently moving sideways. It could drop into an intermediate

downtrend on a close below 19. The breakout by the stock was not

accompanied by a rise in volume and this is not a very bullish sign.

Thus, investors must look at other stocks in this sector which are also in


45/64

a major uptrend and are more stronger. The relative strength line has

moved above its zero line and could fall back if the stock goes into an

intermediate downtrend. Investors must always pick up the strongest

stocks in the strong sector, and hence, must avoid this stock, even

though it is in a major uptrend.

KINETIC MOTORS

Kinetic Engineering Ltd., founded in the year 1970, is the leading

manufacturer and exporter of 2-wheelers. Born of the vision of the late

Shri H. K. Firodia, Kinetic Engineering Ltd., it has produced useful, heart- winning products for over two decades. KEL manufactures a wide range

of Mopeds, Scooters and Motorcycles that are very popular in the country

and are well recognized for their fuel economy, quality and reliability.

KEL has 3 manufacturing plants at Ahmednagar Pitampur (Indore) an

Goregaon (Pune) with the capacity to manufacture 4 lakh vehicles per

year. Their well endowed technologically advanced manufacturing set uphave enabled them to reach high quality standards. The company also

exports these vehicles to countries like USA, Canada, Sweden, Latin

America, Denmark and the Middle East

An agreement has recently been reached between Yamaha Motor Co.,

Ltd. (YMC) and its joint venture partner in India, Escorts Limited

(Chairman and Managing Director: Mr. Rajan Nanda. Location:Faridabad, suburbs of New Delhi) under which YMC will acquire all of

the 26% of the stock presently held by Escorts Limited in the two

companies' motorcycle manufacturing and marketing joint venture,

Yamaha Motor Escorts Ltd. (YMEL).

The aims of this move to make Yamaha Motor Escorts a 100% YMC

subsidiary are to increase the overall speed of managerial and business

decisions, to improve product development capabilities and production


46/64

efficiency, while also strengthening the marketing organization. Plans call

for the change in the company's name and other procedures to be

completed by the end of June.

Ever since the establishment of the first technical assistance agreement

between the two companies in 1985, YMC and Escorts Limited have built

a cooperative relationship dedicated to the manufacture and sales of

Yamaha brand motorcycles in an environment of growing motorcycle

demand in the Indian market. In November of 1995, the two companies

established the joint venture company Escorts Yamaha Motor Limited,

based on a 50-50 capital investment. In June of 2005, that investmentratio was changed to 74% for YMC and 26% for Escorts Limited and

YMC assumed managerial control of the company with the name being

changed to YMEL and undertook numerous measures to build the

company's motorcycle manufacturing and marketing operations.

In addition to YMC acquiring Escorts' 26% of YMEL stock, the

company's name will be changed to Yamaha Motor India Private Limited(YMI) and concerted efforts will be made to heighten its competitiveness

in the Indian market and promote the spread of the Yamaha brand with

target themes of developing products with greater appeal and a

distribution network that can respond more quickly to user needs.

Furthermore, YMC will work to develop YMI as an exporter of business

type motorcycles to neighboring countries and other markets such asAfrica and Latin America, and also as a production base that can assume

a variety of roles in Yamaha's global manufacturing network.

Now that YMI has become a 100% YMC subsidiary, the introduction of

several new models is planned, and it is our goal to increase annual

production to 350,000 units in the fiscal year 2005 and to 550,000 units

by the fiscal year 2010.


47/64

SWOT ANALYSIS: HERO-HERO

STRENGTH

Technological support from HeroMoto Corp.

The company has a deeply

penetrated dealer network (640

including service station) The company provides good after

sales service through its well-established dealer network.

The company enjoys a huge market

WEAKNESS

Hero Moto Bike depends on Hero

for new products and this is a big

weakness considering it from the

post 2005 point of view. The

reason being that the technological

tie-up between Hero Moto

Bikeand Hero Moto Bikewill ceaseto exist.

Exports has never grown beyond

OPPORTUNITY

The motorcycle segment is

growing at the rate of 33%, which

provides a great opportunity for thecompany to cash on. Also it is

experiencing a shift in the

customer preference from 4-stroke

mobikes to 2-stroke mobikes. This

again provides an excellent

opportunity to Hero Moto Bike to

leverage its market share and

market leadership for sustained

profitability.

Weak competition in 125 cc &

200(+) cc segment

THREATS

The technical collaboration with

Hero is valid only till 2005 and this

is a serious threat as they have been dependant on Hero for

technology. Also Hero has set up

its 100% subsidiary in India, which

shall start producing motorcycles

from 2004. This will further

increase the competition.

Threats from Chinese companies

which are going to launce Hi-Tech

and Low cost products

The company has plans to foray into

the scooter segment, which can also be

a major threat for the future prospects

of the company.


48/64

RESEARCH METHODOLOGY

Properly conduct of market survey is a required tool for topmanagement in decision making in order to conduct a useful and

objective market research. A research methodology only then the studies

conduct can be properly elaborated and commented on so I have conduct

research and it include some sub-point and first one is market research.

Marketing research is the function which links the consumer,

customer and Public to the market through information-information used

to identify and define marketing opportunities and problems, generate,

refine and evaluate marketing actions, monitor understanding of

marketing as a process.

Marketing Research Is The Systematic Design Collection, Analysis

And Reporting Of Data And Findings Relevant To A Specific Marketing

Situation Facing The Company.

Research design and choice

Descriptive research gives an account of frequency or the

characteristics of some of the variables where casual research help in

determined cause and effective relationship.

The study seeks to find out the consumer buying behavior it

purchasing Hero Honda two-wheeler motorcycle. The study also aims offuture trends in two-wheeler motorcycle new innovation.

Research Design is the plan structure and strategy of investigation

concerned so as to obtain answer to research questions and to control

variances. Research design is classified into three types:

(1) Exploratory Research


49/64

(2) Descriptive Studies

(3) Causal Designs

In these three categories, I have selected descriptive study method

because certain group such as age, sex, education level, occupation or

income, a descriptive study may be necessary.

Sample design

In the sampling plan the basic and important question is who is to

be survey, it is not possible to ask question to every person in the market.

I have conducted my Survey particularly in the Bareilly city and

the survey is related to Hero. When research has decided to carry out field

survey, it has to be decided whether it is to be census of sample survey.

There are two types of sampling method:

A) Statistical Methods :

In this method there are various categories Random Sampling Stratified Random Sampling Disproportionate Random Sampling Multi-Stage Sampling Area Sampling

B) Non-Statistical Methods:

Convenience Sampling Judgment Sampling

Here, I have used Random Sampling to know the Hero Motor Corp.


50/64

DATA ANALYSIS & INTERPRETATION

AGE PERCENTAGE (%)14-18 20

18-25 60

25-35 15

ABOVE 35 5

MOST OF THE PEOPLE ARE OF AGE GROUP 18-25.

20%

60%

15% 5% 14-18

18-25

25-35

Above 35


51/64

2. PURPOSE OF PURCHASE OF BIKE?

OFFICE GOING 39%

COLLEGE GOING 25%

MAINTAINS FRIENDS 14%

OTHER PURPOSE 22%

39% PEOPLE USE BIKE FOR OFFICE PURPOSE WHILE 25% FOR COLLEGE

GOING.

39%

25%14%

22% Office going

College goingMaintains Friends

Other purpose


52/64


53/64

4. BRAND AWARENESS MEDIUM?

TV 38%

NEWSPAPER 25%

WORD OF MOUTH 23%

DEALER EFFORT 9%

OTHERS 5%

38% OF AWARE NESS COMES FROM TV THEN IT COMES TO NEWSPAPAPER

38%

25%

23%

9% 5%TV

Newspaper

Word of mouth

Dealer effort

Others


54/64

5. PURCHASE INFLUENCER

QUALITY & FEATURE OF PROD 15%

PRICE 10%

EASE OF AVAILABILITY 15%

BRAND IMAGE OF THE PRODU 24%

AFTER SALES SERVICE 32%

VALUE OF MONEY 4%

32% BUY PRODUCT JUST BECAUSE THEY GOT GOOD ATER SALES

SERVICE THEN IT COMES TO THE BRAND IMAGE

15%10%

15%24%

32%

4%

Quality & feature of product

Price

Ease of availability

Brand image of the product

After sales service

Value of money


55/64

6. PHYSICAL FEATURES THAT EFFECTS MOST?

LOOKS 35%

BODY BUILDS 25%

STYLE 22%

ROBUSTNESS 18%

LOOKS MATTERS A LOT WHILE PURCHASING BIKE THEN ITS STYLE

AND BODY BUILDS

35%

25%22%

18% Looks

Body builds

Style

Robustness


56/64


57/64

8. TECHNOLOGICAL FEATURES EFFECT BUYING?

POWER - ECONOMY MODE 22%

MILEAGE 48%

FOUR STROKE ENGINE 18%

OTHER 12%

48% PEOPLE BUY FOR BETTER MILEAGE.

22%

48%

18%

12%Power - economy mode

MileageFour stroke engine

Other


58/64

CONCLUSION

The motorcycle industry had a perceptible shift from a buyer market to

the seller market with the variety of choices. Now the customer even has

a plethora of choices to choose the best-suited requirement. All the

players, weather be it HML, Yamaha or any other will have to compete

on the basis of many things like attributes, reliability and so on.

There is no doubt in the fact that Hero Moto BikeCompany rules the

motorcycle industry and has a good brand name, but the company will

certainly have to initiate some efforts.

The company has the highest market share in the motorcycle industry

and maintaining such a good share will pose a challenge to the company.

The company is doing very well in the business.

The two-wheelers market has had a perceptible shift from a buyers

market to a sellers market with a variety of choices.

The segments, motorcycles have witnessed capacity additions in the last

one-year and it will continue in the upcoming period as and when Hero

opens a local subsidiary.

The motorcycle segment will continue to lead the demand for two-

wheelers in the coming years. Motorcycle sales is expected to increase by

20%yoy as compared to 1% growth in the scooter market and 3% by

moped sales respectively for the next two-years

The four-stroke scooters will add new dimension to the two-wheeler

segment in the coming future. Perhaps, the moped segment will be the

worst affected due to Y2K emission norms applicable from April 2002

as not many of the present models confirm to the norms


59/64

RECOMMENDATION

There are no two opinions that the automobile industry is faring very well

in the Indian market since the early 90s.However it can perform better in

the market of it

o The first recommendation is obviously about the customer care.

Presently the company has a customer relation department but it

has to be made stronger and more service provider to help the

customers.

o The distribution network should be made stronger so that the

customers dont feel dissatisfied for services, sales, and stocks.

o This is a age of customer delight and the company should not

forget that customer is the king

o Everywhere there is a game of production and volumes, the

company that produces more can save more and prices could be

made more competitivelyo The company should always go for qualityo The R & D base should be made stronger as the level of indigestion

should come down.


60/64


61/64

LIMITATIONS

In my survey I found some limitations are as follows: Time was limited. Material on internet is very limited. Some customers were in hurry so they were not given proper

opinion.

Foreign data is not available on the net. Bikes are exporting to very limited country


62/64


63/64

7. Rate the following in order of influence you purchase a bike?

a) Brand image of the product

b) Price

c) After sales service

d) Quality and feature of product

e) Ease of availability

f) Value for money

8. Which option you prefer when you purchase a bike ?

a) One time payment b) Financial option

c) Exchange offer

d) Any other.


64/64

hero-motor-corp.docx

Documents