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Market Environment

Introduction

What is a bike?

A motorcycle, also known as “bike” in today’s socially accepted terminology, is a single-track,

engine-powered, two-wheeled motor vehicle. Motorcycles vary considerably depending on the

task for which they are designed, such as long distance travel, navigating congested urban traffic,

cruising, sport and racing, or off-road conditions. The main purpose of the invention of bike was

increasing comfort of people while facilitating the process of transportation and at the same time,

speeding it.

Motorcycles are one of the most affordable forms of motorized transport in many parts of the

world and, for most of the world's population; they are also the most common type of motor 

vehicle. A motorcycle is broadly defined by law in most countries for the purposes of 

registration, taxation and rider licensing as a powered two-wheel motor vehicle. Most countries

distinguish between mopeds of 49 cc and the more powerful, larger, vehicles. Many jurisdictions

include some forms of three-wheelers as motorcycles.

The first internal combustion, petroleum fueled motorcycle was the  Petroleum Reitwagen. It was

designed and built by the German inventors Gottlieb Daimler and Wilhelm Maybach in Bad

Cannstatt, Germany in 1885. This vehicle was unlike either the safety bicycles or the boneshaker  

 bicycles of the era in that it had zero degrees of steering axis angle and no fork offset, and thus

did not use the principles of bicycle and motorcycle dynamics developed nearly 70 years earlier.

Instead, it relied on two outrigger wheels to remain upright while turning. The inventors called

their invention the  Reitwagen ("riding car"). It was designed as an expedient testbed for their 

new engine, rather than a true prototype vehicle. Many authorities who exclude steam powered,

electric or diesel two-wheelers from the definition of a motorcycle, credit the Daimler  Reitwagenas the world's first motorcycle.

In 1894, Hildebrand & Wolfmüller became the first series production motorcycle, and the first to

 be called a motorcycle (German: Motorrad ). In the early period of motorcycle history, many

 producers of bicycles adapted their designs to accommodate the new internal combustion engine.

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As the engines became more powerful and designs outgrew the bicycle origins, the number of 

motorcycle producers increased.

From the 1960s through the 1990s, small two-stroke motorcycles were popular worldwide, partly

as a result of East German Walter Kaaden's engine work in the 1950s.

Today, the motorcycle industry is mainly dominated by Japanese companies such as Honda,

Kawasaki,  Suzuki, and Yamaha, although Harley-Davidson and BMW continue to be popular 

and supply considerable markets. Other major manufacturers include Piaggio group of Italy,

KTM, Triumph and Ducati.

In addition to the large capacity motorcycles, there is a large market in smaller capacity (less

than 300 cc) motorcycles, mostly concentrated in Asian and African countries. An example is the

1958 Honda Super Cub, which went on to become the biggest selling vehicle of all time, with its

60 millionth unit produced in April 2008. Today, this area is dominated by mostly Indian 

companies with Hero Honda emerging as the world's largest manufacturer of two wheelers.

Other major producers are Bajaj and TVS Motors. For example, its Splendor  model has sold

more than 8.5 million to date.

Reason for choosing ‘bike’ as a product

Two- wheeler sales in the country have sky rocketed in the recent years, and the annual sales of 

motorcycles in India expected to cross the 10 million mark by 2010. The low penetration of two-

wheelers in the country 31 two-wheelers per 1000 citizens (2004) leaves immense scope for the

growth of the market. Overall the industry sales of two-wheelers have grown by 15% from 6.57

million in 2004/2005 to 7.57 million in 2005/2006. The buoyant Indian economy with a growth

rate of around 8% per annum is further expected to fuel the growth of two wheelers in the

country.

The share of motorcycles have increased over the years, while that of other two-wheelers like

geared scooters, scooterettes and mopeds have shown a negative growth or remained stagnant.

The two-wheelers have penetrated 7% of rural house hold and 24% of urban markets, thus it

leaves an immense scope for the market to grow.

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Talking of the two wheeler industry, the names that effortlessly come to us is Bajaj Auto, Hero

Honda, TVS Motor, Yamaha Motor, Kinetic and others. The two wheeler segment has played an

important role in giving a push to the automobile industry in India. In fact, the production, sales

and exports of the two wheelers is a fair indication of the growing importance that it enjoys in

this country's manufacturing economy. An overview of the two wheeler industry makes this clear 

that the two wheelers are among the most sought after automobiles in India for some time and

the trend is likely to stay for a while. The economic growth, need for better conveyance and

gradually improving road infrastructure coupled with better credit and financing options, have

acted as a major catalyst in encouraging the growth and development of the two wheeler segment

in India. Further, the new and improved features on the two wheelers, their stylish and trendy

looks and a rage with the country's youth who form a substantial influence in determining the

consumer behavior have ensured that the two wheelers remain on top of the automobile

industry's agenda in India.

Some of the features that deserve attention in respect of the Indian two wheeler segment

are as mentioned:

• The total sale of two wheelers in India has touched a figure of 7.86 million units by

March, 2007, up 11.42% from the previous fiscal figures of 7.05 million. Production

during the period reached 8.63 million units.

• The production of two wheelers in India is expected to reach a staggering 17.85 million

units by 2011-12, more than double of the current production level.

• The two-wheeler production capacity is to reach 22.31 million units in 2011-12 compared

with 10.78 million in 2006-07.

• India is likely to export 1.39 million two-wheelers in 2011-12 compared with 590,000 in

2006-07.

•

Total investment for new capacity generation in two-wheeler segment is likely to be morethan $2.2 billion (INR10, 000 crore).

• Hero Honda, Bajaj Auto and TVS Motor remain the leading players in terms of sales and

 popularity of their two wheelers.

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Motorcycle sales trend

India is the second largest two-wheeler market in the world

The auto component industry has come of age and now forms an important component of the

Indian economy. In recent years, it has grown more impressively, fetch double digit growth.

More interestingly, it has captured attention as well as business from leading auto makers of the

world. The industry plays a crucial role in the automobile sector. Manufacturing vehicles

typically involve assembling a large number of components out-sourced from number of 

ancillaries or component manufacturers.

Competitiveness with quality as a theme has been the watchword for the Indian industry andespecially the auto component industry ever since the Indian economy was opened up to the

world in the early 1990s. While economic revival, lower interest rates and better road

infrastructure are driving domestic demand for automobiles and, therefore, components,

increasing outsourcing by global automobile majors is creating a huge Export opportunity for 

Indian component manufacturers.

Market share of two wheelers in automobile sector

Growth Prospects and Key Drivers of the Indian Two Wheelers Industry

The growth witnessed by the Indian two wheeler industry indicates the growing demand for low

cost personal transportation solutions amongst the 300 million Indian middle class consumers.

Despite this spectacular growth rate, the two wheeler penetration (number of two wheelers per 

1000 inhabitants) in India remains lower than other Asian countries. This fact provides anopportunity for continued growth in the market. India has the lowest Penetration of two wheelers

as compared to countries like Taiwan, Thailand, Malaysia, Vietnam, Indonesia and China. In the

 present scenario, growth in the two wheeler Industry will be driven by several factors:

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Rise in India’s Young Working Population

With the rising levels of per capita income of people, the Indian two wheeler market offers a

huge potential for Growth. This growth is relevant in the light of the fact that 70 per cent of 

India’s population is below the age of 35 Years and 150 million people will be added to the

working Population in the next five years. The number of women in the urban work force is also

increasing; this will lead to the Growth of gearless scooters.

Rise of India’s Rural Economy and Growth in Middle Income Households

The growth prospects of the Indian rural economy offer a significant opportunity for the

motorcycle industry in India. The penetration of motorcycles amongst rural households with

income levels greater than US$ 2,200 per annum has already increased to over 50 per cent. The

current target Segment for two wheelers, i.e., households belonging to the Income category of 

US$ 2,200–12,000 is expected to grow at a CAGR of 10 per cent.

Greater Affordability of Vehicles

The growth in two-wheeler sales in India has been driven by an increase in affordability of these

vehicles. An analysis of the price trends indicates that prices have more or less stagnated in the

 past. This has been part of the marketing strategy adopted by the manufacturers to gain volume,

as well as conscious efforts adopted to bring down costs. The operating expenses of leading

manufacturers have declined by around 15 per cent in the last five years. With greater avenues of 

financing, the customer’s capacity to own a two wheeler has improved.

Rapid Product Introduction and Shorter Product Life Cycle

The last five years have witnessed a sharp increase in new product launches in the two wheeler 

industry. It is estimated that close to 50 new products have been launched by manufacturers

during this period, filling up all price points and targeted at various consumer segments.

Inadequate Public Transport Systems in most Urban Areas

The economic boom witnessed in the country and the increased migration to urban areas have

increased the traffic congestion in Indian cities and worsened the existing infrastructure

 bottlenecks. Inadequate urban planning has meant that transport systems have not kept pace with

the economic boom and the growing urban population. This has increased the dependence on

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 personal modes of transport and the two wheelers market has benefited from this infrastructure

gap.

Challenges faced by the industry

Despite the high growth achieved in the past and the high potential in the future, the two-

wheelers market faces some challenges.

Rising Customer Expectations

The growth witnessed by the Indian two wheeler industry has attracted a number of new entrants

to the market and it is expected that the Indian industry will become more competitive in the

future. The plethora of products introduced in the past has also raised customer expectations with

respect to reliability, styling, performance and economy.

Environmental and Safety Concerns

The increasing demand for two wheelers will need to be managed to address issues relating to

overcrowding of roads. Another problem is the insufficient infrastructure for inspection to ensure

adherence to emission norms. As the industry grows, it is important to regulate the sale of used

two wheelers in a more organised manner for which a mechanism needs to be evolved.

Unregulated sale of two wheelers, especially in the rural areas, are likely to create issues related

to emissions and safety of vehicles.

Creation of Distribution Infrastructure

Leading companies need to ensure that on one hand they build adequate infrastructure in terms

of dealerships and servicing stations in the urban areas and on the other ensure that their 

distribution infrastructure also reaches the rural areas

COMPANY NAME, BIKE NAME, TAGLINE

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DIPSTICK STUDY

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Market Segmentation

Market segmentation is the identification of portions of the market that are different from one

another. Segmentation allows the firms to better satisfy the needs of its potential customers.

The need for market segmentation:-

The marketing concept calls for understanding customers and satisfying their needs better than

the competition. But different customers have different needs and it rarely is possible to satisfy

all customers by treating them alike.

Mass marketing refers to treatment of the market as a homogenous group and offering the same

marketing mix to all customers. Mass marketing allows economies of scale to be realized

through mass production, mass distribution, and mass communication. The drawback of mass

marketing is that customer needs and preferences differ and the same offering is unlikely to be

viewed as optimal by all customers. If firms ignored the differing customer needs another firm

likely would enter the market with a product that serves a specific group and the incumbent firms

would lose those customers.

Target marketing on the other hand recognizes the diversity of customers and does not try to

 please all of them with the same offering. The first step in target marketing is to identify different

market segments and their needs.

Requirement of market segments:-

In addition to having different needs, for segments to be practical they should be evaluated

against the following criteria:

• Identifiable: - the differentiating attributes of the segments must be measurable so that

they can be identified.

• Accessible: - the segments must be reachable through communication and distribution

channels.

• Substantial: - the segment should be sufficiently large to justify the resources required to

target them.

• Unique needs: - to justify separate offerings, the segments must respond differently to the

different marketing mixes.

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• Durable: - the segments should be relatively stable to minimize the cost of frequent

changes.

A good market segmentation will result in segment members that are internally

homogenous and externally heterogeneous; that is, as similar as possible within the

segment, and as different as possible between segments.

Bases for segmentation in consumer markets:-

Consumer markets can be segmented on the following customer characteristics

• Geographic

• Demographic

• Psychographic

• Behavioralistic

  Geographic segmentation:-

The following are some examples of geographic variables often used in segmentation

• Region: by continent, country, state, or even neighborhood

• Size of metropolitan area: segmented according to size of population

• Population density: often classified as urban, suburban, or rural

• Climate: according to weather patterns common to certain geographic regions

Demographic segmentation:

Some demographic segmentation variables include:-

• Age

• Gender 

• Family size

• Family life cycle

• Generation : bay-boomers, generation x, etc

• Income

• Occupation

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• Education

• Ethnicity

•  Nationality

• Religion

• Social class

Many of these variables have standard categories for their values. For examples, family

lifecycle often is expressed as bachelor, married with no children (Dinks: double income,

no kids), full- nest, empty-nest, or solitary survivor. Some ot these categories have

several stages for example, frll-nest1, 2, or 3 depending on the age of the children.

Psychographic segmentation:

Psychographic segmentation groups customers according to their lifestyle. Activities,

interest, and opinions (AIO) SURVEYS ARE ONE TOOL FOR Measuring lifestyle.

Some psychographic variables include:

○ Activities

○ Interests

○ Opinions

○ Attitudes

○ Values

Behavioralistic segmentation:

Behavioral segmentation is based on actual customer behavior toward products. Some

 behavioralistic variables include:

○ Benefits sought

○

Usage rate○ Brand loyalty

○ User status: potential ,first-time, regular etc

○ Readiness to buy

○ Occasions: holidays and events that stimulate purchases

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Behavioral segmentation has the advantage of using variables that are closely related to

the product itself. It is a fairly direct starting point for market segmentation.

Competition

Talking of bikes cc, bikes having four-stroke engines are thought to be more fuel efficient

motorbikes. They are the main reason for the growth of motorbikes in India as a segment. Indian

 bikes market share is about 81.5% of the total two wheeler market in India. Three-fourth of the

total exports in the two wheeler automobile industry are made in the motorcycle segment.

Exports are made mainly to South East Asian and SAARC nations.

India is the manufacturer of some of the best bikes in the world. Hero Honda, Kinetic Motor,

TVS Motor, LML India are some of iconic bike manufacturers in India. There are cheapmotorcycles that comprise the commuter bikes segment, as well luxury bikes like sports bike in

India for the new age bikers. Ever year, a series of latest bike launch keep the sector buzzing.

Kawasaki Ninja, Bajaj Pulsar 135 LS, and Honda Unicorn Dazzler are some of the latest

motorcycle models that have made news in the recent past. Besides, there are also a number of 

new bikes in India that are awaiting a launch in the near future

This section provides detailed information on every bike in India, features of motorcycles,

motorcycle parts, and cheap motorcycles. If you are planning to buy a new bike, you will get

here all the details of new bikes, cheap bikes, used bikes, bikes for sale, a complete 2 wheelers

list, and authentic bike reviews. And for the die-hard bike lovers, this is the ultimate destination

to get high-resolution pictures of motorcycle, industry-sourced motorcycle reviews and

descriptions of first-hand motorcycle test rides.

Following is a comprehensive list of motorcycles in India:

* Models Awaited | * Latest Launch Models

BAJAJ AUTO HERO HONDA KINETIC MOTOR 

› Kawasaki Ninja* › Hero Honda Achiever  › Kinetic Aquila

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› Bajaj XCD 135 DTS-Si* › Hero Honda CD Dawn › Kinetic Comet

› Bajaj Discover DTSi › Hero Honda CD Deluxe › Kinetic Stryker 

› Bajaj Platina › Hero Honda Glamour 

› Bajaj Pulsar 135 LS* › Hero Honda Karizma

› Bajaj Pulsar DTSi › Hero Honda Passion Plus  

› Bajaj Pulsar 200CC* › Hero Honda Splendor 

› Bajaj Avenger  › Hero Honda Splendor NXG  

› Bajaj Pulsar DTS- Fi 220

CC*› Hero Honda CBZ X- Treme -

›  Bajaj Discover DTS-Si 

100cc*

› Hero Honda Hunk  -

› Bajaj Pulsar 220 S* › Karizma ZMR FI

LML INDIA ROYAL ENFIELD TVS MOTOR 

› LML Adreno FX › Bullet 350 › TVS Apache RTR FI 

› LML Beamer  › Thunderbird Twinspark  › TVS Flame

› LML Energy FX › Bullet Electra › TVS Star City

› LML Freedom › Bullet Machismo › TVS Taurus Fiero F3*

› LML Graptor  › Bullet Machismo 500 › TVS Apache RTR 220*

›  Royal Enfield Classic 500

HMSIL SUZUKI MOTOR  YAMAHA MOTOR 

› Honda Shine › Suzuki Access 125› Yamaha Fazer 

› Honda Unicorn 

• Grand Prix Edition› Suzuki Heat › Yamaha FZS

› Honda Stunner CBF › Suzuki Zeus › Yamaha FZ 150cc

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› Honda CBF Stunner FI › Suzuki Hayabusa 1300 › Yamaha Gladiator 

› Honda CB Twister  › Suzuki Intruder M1800R  › Yamaha Libero G5

- › Suzuki GS 150R  › Yamaha Gladiator Type JA

- - › Yamaha Alba 106

› Yamaha YZF R1

- - › Yamaha MT 01

- - › Yamaha YZF-R15

- - › Yamaha Crux

- - › Yamaha YZF-R1 2010

- - › Yamaha SZ and SZ-X

To understand the competition in the market and plan our strategies in a better way, the

following tools are available – 

• PEST Analysis

• Porter’s 5 Force Analysis

• SWOC Analysis and

• SIVA

PEST ANALYSIS ON TWO-WHEELER INDUSTRY:

Political, economic, social and technology are those factors which affects the external

environment.

Political Aspects – Tax policies, trade regulation, political influence and some of the rules and

regulation of government policies which is considered in political analysis.

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The corrections in Excise duty on electric vehicles which will enable the manufacturers

take CENVAT credit and exemption of customs duty on Electric Vehicles parts and also

weighted deduction for in-house R&D to 200% from 150% and outsourced R&D from 125% to

175%. This would encourage industry that much because this price hike isn’t expected to impact

sales in a significant way as a majority of two-wheeler buyers were prepared, and to certain

extend braced up and ready to shell out extra money for their favorite set of wheels.

Economic Aspects – Economic factor are those which is influenced by economic growth,

interest rate, exchange rate and inflation rate.

Abundant and low cost labour coupled with local availability of raw material like steel,

aluminum and natural rubber has placed India amongst the low cost producing centers of two-

wheelers. Consequently, CARE Research anticipants buoyant growth in two-wheelers exports as

well. Abundance of low labour and raw material gives India an upper hand in the export. Since

many auto finance company laid easy installment rules with less interest rate it makes more

segment people to go for it.

Social Aspects – Social aspects of two-wheelers industry are Popularity, Subculture, Mobility

and safety.

In numerous cultures, motorcycles are the primary means of motorized transport. India is

the second largest motorcycle markets in the world next to China. Socially many motor cycle

organization raise money for charities through organized ride and events. Many people ride

motorcycle for various reasons, those reasons are increasingly practical, with riders opting for a

 powered two-wheeler as a cost-efficient alternative to infrequent and expensive public transport

system, or as a means of avoiding or reducing the effect of urban congestion. Motor-cycle gives

a great advantage to the specified designation where other buses cannot enter. Since there is a

rule in some of the main states and cities in India to wear helmet while riding two-wheelers to

make them safe from accidents makes two-wheeler riders to have a safe journey.

Technical Aspects - Technical Aspects in Two-wheeler industry includes construction, fuel

economy, electric motorcycles, dynamics and accessories.

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Two-wheeler construction is the engineering, manufacturing, and assembly of 

components and systems for two-wheelers which results in performance, cost and aesthetics

desired by the designers. Construction of two-wheeler includes steel, aluminum frame, telescopic

forks and disc brakes. Motorcycle is the best fuel economy mode of transport, Nowadays two-

wheelers is designed to give more than 80km mileage per liter with low maintenance cost.

Invention of Electric motorcycle gives an added advantage since the two-wheeler users can avoid

using petrol. Different types of two-wheelers have different dynamics and these plays a vital role

in their performance. Since sufficient bike accessories are available in many place two-wheeler 

riders has a privilege to change the broken parts very easily.

PORTER’S 5 FORCES ANALYSIS

Porter’s five forces Model of Competition are as follows:

• Rivalry among competing sellers

• Potential new entrants

• Substitute products

• Competitive pressures from supplier - seller relations: Bargaining power 

• Competitive pressures from seller – buyer relations: Bargaining power.

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RIVALRY: The key players in two-wheeler industries are Hero Honda motor ltd. (HHML),

Bajaj Auto ltd and TVS motor Company ltd. The other players are Kinetic, Lml, Yamaha,

Majestic auto ltd, Royal Enfield ltd and Honda motorcycle & scooter India. Two-wheelers

domestic market growth rate for 2008-09 is 76.49% which is very high when compared to that of 

three wheelers, Passenger and commercial vehicles. The standardized product used in

manufacturing of two-wheelers is steel, aluminum and rubber, because there are many industries

in India for manufacturing those standardized product the production is going smooth. Sales of two-wheelers are very high when compared to that of three wheelers, Passenger and commercial

vehicles. Indian Auto policy 2002 gives added advantage to two-wheeler manufacturers to enter 

even other countries outside India. Since big manufacturer plant with high technology and good

R&D team needed many of them dose not enter in two two-wheeler Industries. Only the

companies which are in automobile line will expand their product line like Mahindra.

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Potential New Entrants: Capital investment is very huge in two-wheeler industries since large

  plant and large machineries needed with skilled labours and good R&D team needed for 

  producing two-wheelers. Since high technology and raw material resources are abundant to produce the production cost is less in producing two-wheelers. Since each company in industry

change the model on going basis to show differentiation among their competitors because of this

there is more learning and experience in this field. Each company in industry not only makes

differentiation in their product strategy but also makes differentiation in the promotional strategy

to create” brand preference and loyalty”. Because of low cost production, this industry enjoys

good growth rate and profitability.

Substitute Product: Substitute products for two-wheeler industries are bus transportation, Auto

transportation and even low-end cars, but people using two-wheelers can only use the service of 

 buses and auto as a substitute product. Sometimes low-end car is a substitute product for the

 people using high-end motor cycles. Because nowadays there is lot of segment in buses in urban

areas and the private companies also influenced very much, buses are available from normal

 buses to hi-tech ac buses which is threat to two-wheeler industry. Since only two people can

travel in a bike most of them uses auto when they go out with their family and if they are

affordable to buy car will use car instead of auto. Since bus service has increased when

compared to five years back people who are aged above 45 years uses buses because of their 

health condition. These are the substitute product available to two-wheelers.

Supplier – Seller Relations: Since their selling units are very high in two-wheeler industry and

 because of many competitors supplier are very high. Since they change their models on going

 basis they create good relationship between their suppliers. Some of the components in two-

wheeler industry are very common for all the two-wheeler industries like steel, aluminum, tyres

and tubes, these material are available in abundant. This makes them to drive a smooth

 production of their finished products.

Seller – Buyer Relations: Buyer has added advantage than seller because there are five to six

 big popular brands of two-wheelers are available in India, so that they can switch brand from one

another. Since full information is available to the buyers about their product details and their 

 prices buyers are fully aware of seller costs and products. Buyers are very conscious in spending

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their money to purchase two-wheeler, because it attracts most of the middle-income group’s

seller cannot price their product very high. Nowadays people go to unique brand because of the

good service they provide after purchase. Because service centers and spare parts shop available

to their customer very near to their place buyer sometimes do not mind spending little money

extra. These factors create good relationship between them.

SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,

O pportunities, and Threats involved in a project or in a business venture. It involves specifying

the objective of the business venture or project and identifying the internal and external factors

that are favorable and unfavorable to achieve that objective. The technique is credited to Albert

Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from

Fortune 500 companies.

A SWOT analysis must first start with defining a desired end state or objective. A SWOT

analysis may be incorporated into the strategic planning model. Strategic Planning, has been the

subject of much research

• Strengths: characteristics of the business or team that give it an advantage over 

others in the industry.

•

Weaknesses: are characteristics that place the firm at a disadvantage relative toothers.

• O pportunities: external  chances to make greater sales or profits in the

environment.

• Threats: external  elements in the environment that could cause trouble for the

 business.

Identification of SWOTs are essential because subsequent steps in the process of planning for 

achievement of the selected objective may be derived from the SWOTs.

Use of SWOT analysis

The usefulness of SWOT analysis is not limited to profit-seeking organizations. SWOT analysis

may be used in any decision-making situation when a desired end-state (objective) has been

defined. Examples include: non-profit organizations, governmental units, and individuals.

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SWOT analysis may also be used in pre-crisis planning and preventive crisis management.

SWOT analysis may also be used in creating a recommendation during a viability study/survey.

 Nowadays researchers believe that there is nothing like threat for any organization, everything

that seems to be a threat for it, in real they are Challenges. Hence, the SWOC analysis for our 

 product is as follows – 

Strengths

• Highly dynamic and risk taking

management.

• Product design and development

capabilities

• Extensive R & D focus

• Chosen all mechanics as a promotion

channel which have high accessibility

to customers daily thereby creating

strong word of mouth at a very fast

 pace

• Innovation if targeted to potential

customers, can be a very strong pillar 

of success of the firm

Weaknesses

• Lack of financial support due to new

entrant in the market

• Still has no established brand to match

Hero Honda's brand equity

•  Not a global player 

•  New entrant is not accepted overnight

in the market

Challenges

• The competition catches-up any new

innovation in no time.

• Threat of cheap imported motorcycles

from China

• Hero Honda and Bajaj have huge brand

equity

• The growing gearless trendy scooters

and scooterettes market

Opportunities

• Double-digit growth in two-wheeler 

market

• Untapped market above 180 cc in

motorcycles

• More maturity and movement towards

higher-end motorcycles

• Growing world demand for entry-level

motorcycles especially in emerging

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markets

Siva Analysis

The SIVA Model provides a demand/customer centric version alternative to the well-known 4Ps

supply side model (product, price, place, promotion) of marketing management.

The four elements of the SIVA model are:

• Solution: How appropriate is the solution to the customers problem/need

• Information: Does the customer know about the solution, and if so how, who from, do

they know enough to let them make a buying decision

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• Value: Does the customer know the value of the transaction, what it will cost, what are

the benefits, what might they have to sacrifice, what will be there reward?

• Access: Where can the customer find the solution. How easily/locally/remotely can they

 buy it and take delivery.

This model was proposed by Chekitan Dev and Don Schultz in the Marketing Manageemnt

Journal of the American Marketing Association, and presented by them in Market Leader - the

 journal of the Marketing Society in the UK.

It has not been yet done as dipstick study remains…………..

Branding

Marketing Mix

We are launching a new bike by new brand name. The name of our company is EPSILON

Motors and the name of our Product is AREION Bikes. We have targeted the premium segment.

So the marketing mix is done according to the premium market segment.

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Product:

A tangible object or an intangible service that is mass produced or manufactured on a large scale

with a specific volume of units.

Brand Name: - Epsilon Motors

Product name: - Areion bike

Product Specifications

➢ 650cc Engine sports bike

➢ Mileage upto 60 km

➢ Digital display

➢ LCD panel

➢ Charging Point

Core Benefits: - Mileage range 60 – 90 Kmpl, 200 - 650cc engine, charging point, digital

display via LCD panel, latest design as per demand, spoke chain replaced by propeller shaft and

hydraulic central stand.

Price:

The price is the amount a customer pays for the product. It is determined by a number of factors

including market share, competition, material costs, product identity and the customer's

 perceived value of the product. The business may increase or decrease the price of product if 

other stores have the same product.

We have decided the price of our product for Rs 89,000 as we are providing 650cc sports bike

with digital display and LCD panel. So the price charged is low compared to the features we are

 providing as we are launching a new product with new brand name.

As we are launching a new product so we will be providing 10% discounts to 1st 100 customers.

Place:

Place represents the location where a product can be purchased. It is often referred to as the

distribution channel. It can include any physical store as well as virtual stores on the Internet.

Place is not exactly a physical store where it is available Place is nothing but how the product

takes place or create image in the mind of customers. It depends upon the perception of 

customers.

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Epsilon Areion will be sold in an Epsilon showroom which will be launched firstly in metros and

the showrooms will be located in prime areas which will give easy access to the customers. After 

seeing the demand for our product we will be launching our showroom allover India from time to

time. Each showroom will provide spare parts of the product along with vehicle services and

customer services. We will be also using mobile showrooms to reach nearby villages. The main

 purpose to open showrooms at different places is reach more customers.

Distribution of Areion

Promotion:

Promotion concerns the message the firm sends out to potential consumers. It provides

information and persuades people, it creates awareness, stimulates demand and differentiates the

 product and influences public behavior. Promotion won’t make a bad product that no one wants a

success; although the absence of promotion may not make the new product successful in the

market, promotion includes all the activities or tools a company uses to communicate or promote

its product in the market.

We will be using advertising in television and print media.

The main target for promotion is to attract customers and make them aware about our new

 product.

We will be advertising through television, newspaper, magazines and internet. Also, we will be

using the strong word of mouth created through the mechanics as they have the widest and

highly accessible customer reach on a daily basis.

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Marketing Communication Mix

Advertisement:

Advertising is a form of  communication intended to persuade an audience (viewers, readers or 

listeners) to purchase or take some action upon products, ideals, or services. It includes the name

of a product or service and how that product or service could benefit the consumer, to persuade a

target market to purchase or to consume that particular  brand. These brands are usually paid for 

or identified through sponsors and viewed via various media. Advertising can also serve to

communicate an idea to a large number of people in an attempt to convince them to take a certain

action.

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In order to promote our new bike, we need to advertise our product in order to make consumers

aware about our product. We will be advertising through television, newspaper, hoardings,

internet and magazines.

Sales promotion:

Sales promotion is any initiative undertaken by an organization to promote an increase in sales,

usage or trial of a product or service.

As our product is new, in order to promote our sales we will organize events to get sponsorships

so that we can increase our market share

Personal selling:

Personal selling is oral communication with potential buyers of a product with the intention of 

making a sale. The personal selling may focus initially on developing a relationship with the

 potential buyer, but will always ultimately end with an attempt to "close the sale"

Personal selling is one of the oldest forms of promotion. It involves the use of a sales force to

support a push strategy.

We will not be using personal selling to promote our product.

Public relations:

Public relations (PR) is a field concerned with maintaining public image for businesses, non-

 profit organizations or high-profile people, such as celebrities and politicians.

Direct marketing:

Direct marketing is a form of advertising that reaches its audience without using traditional

formal channels of advertising, such as TV, newspapers or radio. Businesses communicate

straight to the consumer with advertising techniques such as fliers, catalogue distribution,

 promotional letters, and street advertising.

E- Marketing

Internet marketing ties together creative and technical aspects of the Internet,

including: design, development, advertising, and sales

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Exibitions:

An exhibition, in the most general sense, is an organized presentation and display of a selection

of items. In practice, exhibitions usually occur within museums, galleries and exhibition halls.

COMPLETE THE REST OF E-MARKETING ETC>>>>>>>>>>>>>>

Attachments

Questionnaire

Information required through this questionnaire includes what features a customer

likes in a bike, which is based in India.

1. Do you ride bike as your daily means of transportation? Yes

No

2. Do you own a bike? Yes

No

If not, which bike would you prefer to buy?

Why would you prefer the above mentioned bike?

3. If yes, which brand in bike do you own?

Hero Honda Bajaj

Kinetic LML

Yamaha Royal Enfield

Kawasaki Bajaj

Suzuki

Honda

Kawasaki

TVS

Other (Specify)

4. Why did you buy this bike? (Tick all that apply)

Price

  Mileage

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Looks / Design

Comfortable Seating

BHP (Power)

Top Speed

  Brand name is famous

Other (Specify)

5. Which design of bike do you like? (Tick all that apply)

All Terrain Bikes (ATB – like Harley Davidson)

  Commuters (like Bajaj Discover)

Sports Bikes (like Suzuki Hayabusa)

Cruiser Bikes (like Bajaj Avenger, Yamaha Enticer)

6. Are you aware of disc brakes and drum brakes in bikes?

   Yes No I am confused

If yes, where will you prefer to have disc brake?

Front wheel

Rear wheel

  Both wheels

Nowhere

7. Which type of brake do you prefer?

Disc brake Drum brake

8. What CC would you like to have in your bike?

  100 – 130 131 – 160 161 – 190

>190

9. Are you aware of alloy wheels and spoke wheels in bikes?

Yes No I am confused

If yes, what type of wheel would you prefer in your bike?

Spoke wheels Alloy wheels

10.What type of display panel would you like in your bike?

Mechanical display Digital display

Why would you like to have above mentioned display in your bike?

11.How many gears would you like to have in your bike?

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4 5 6

12.Does the size of fuel tank affect your bike buying decision?

Yes No

If yes, what is the tank size that you would prefer to have in your bike?

5 – 10 liters 10 – 15 liters 15 – 20 liters

13.What type of tires (in terms of width) would you prefer in your bike?

Narrow

Broad

Broader

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Wide

14.What type of silencer would you like to have in your bike?

Extremely long (as in Royal Enfield)

Long (as in Hero Honda Hunk)

Box (as in Yamaha FZ)

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Short

15.What type of battery would you prefer to have in your bike?

Dry battery (use and throw) Liquid battery

(requires refill)

16.Are you aware of mono – suspension and dual – suspension?

   Yes No I am

confused

If yes, what type of suspension would you prefer to have in your bike?

Mono – suspension Dual – suspension

17.What type of ignition do you prefer to have in your bike?

Self – start Kick – start

Both

18.What according to you should be the mileage of your bike? (in Kmpl)

30 – 40 41 – 50 51 – 60 61 – 70

>70

19.Would you prefer to have a bike without clutch?

Yes No

20.Which material would you like your bike to be made up of?

Fiber Metal

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21.Where did you last see any bike’s advertisement?

Television Newspaper Hoardings

Magazines

Internet Leaflets Other (Specify)

22.What media do you prefer to see any bike’s advertisement?

Print media (newspapers, magazines etc.)

Digital media (television, hoardings, etc.)

Broadcast media (radio, etc.)

I do not like advertisements of bikes

23.Would you buy a bike if you see your role model riding it in an

advertisement?

Yes No

24.Would you like to replace the reserve cork with mileage meter?

Yes No I want both

25.Would you like to have tubeless tires in your bike?

Yes No

26.Which types of firing do you like in bike?

Firing of Royal Enfield

Firing of Yamaha

Firing of Honda

Firing of ___________________________________________________________ 

27.What do you feel when you hear the firing of silencer of the bike that you

like?

Power of bike

Style

Design

Status

High Speed

Other (Specify) _______________________________________________________ 

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Perceptions (Please tick appropriate number where 1 stands for least important

and 6 stands for most important)

1. How important is mileage for you in your bike?

Least important 1 2 3 4 5 6 Most important

2. How important is CC to you?

Least important 1 2 3 4 5 6 Most important

3. How important is BHP to you?

Least important 1 2 3 4 5 6 Most important

4. How important is the design of bike for you?

Least important 1 2 3 4 5 6 Most important

5. How important is capacity of fuel tank for you?

Least important 1 2 3 4 5 6 Most important

6. How important is the type of wheel for you?

Least important 1 2 3 4 5 6 Most important

7. How important is after sales service is to you?

Least important 1 2 3 4 5 6 Most important

8. How important is disc brake for you?

Most important 1 2 3 4 5 6 Least important

9. How important is speed for you?

Most important 1 2 3 4 5 6 Least important

10.How important is elevated back seat for you?

Least important 1 2 3 4 5 6 Most important

11.How important is smooth driving even on rough surfaces for you?

Least important 1 2 3 4 5 6 Most important

12.How important is price for you?

Least important 1 2 3 4 5 6 Most important

13.How important is enjoyment while riding a bike for you?

Least important 1 2 3 4 5 6 Most important

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14.How important is stability even on high speed for you? (bike does not shake

on high speed)

Most important 1 2 3 4 5 6 Least important

15.How important is comfort while driving to you?

Least important 1 2 3 4 5 6 Most important

16.How important is handling (smooth turnings i.e. cuts) for you in bike?

Least important 1 2 3 4 5 6 Most important

Attitude

1. When I drive a bike of my choice, I feel

 ___________________________________________ 

2. Anybody who rides a Bajaj Discover is a

 ___________________________________________ 

3. Fast riding shows

 _____________________________________________________________ 

4. Bikes with broad tires are

 ______________________________________________________ 

5. Bikes that give good mileage are

 ________________________________________________ 

6. Seeing a bike stunt I feel

 ______________________________________________________ 

7. Reason for bike being pulled by any person can

be:_________________________________ 

8. The bike I love the most is

 _____________________________________________________ 

9. Backseat of my bike would be occupied by

 ________________________________________ 

10.My role model should drive

 ____________________________________________________ 

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11.Why should my role model drive the above mentioned bike?

 _________________________ 

 ___________________________________________________________________________ 

12.Someone else driving my type of bike is

 __________________________________________ 

13.My enemy should drive

 _______________________________________________________ 

14.In a dream, me, my bike and

 ___________________________________________________ 

15.The bike that I love the most is

 _________________________________________________ 

16.The bike that best suits me is

 __________________________________________________ 

17.Hearing the firing sound of a bike that I like, I feel

 __________________________________ 

Please answer the questions given below with the assumption that you get a bike as

per your choice:

1. I will take loan even at higher rates to buy it.

2. I will convince my parents even if they are against buying the bike.

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3. I will even borrow money from friends and / or relatives to buy a bike.

4. I will not buy the bike if it is out of my budget.

5. If my friends believe that the bike has a high status, I will buy it even if I am

not convinced.

6. I will buy the bike that I like, even if some other bike suits my personality.

7. If girls of my group like the bike, I will buy it even if I am not convinced with

the bike.

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Word AssociationKindly write down the word that strikes you at the very 1st instance after reading thewords given below:

  StimulusResponse

1. Status

2. Passion

3. Attitude

4. Personality

5. Showoff 

6. Rally

7. Petrol

8. Style

9. travel

10.Power

11.Stunt

12.Excitement

13.Speed

14.Pickup

15.Puncture

16.Safety17.Firing of silencer

18.Design

19.Economical

20.Mileage

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21.Style

22.Girlfriend

23.Manly

Demographic Information

Name (optional): ______________________________________________________ 

Age: 15 – 25 years 26 – 35 years 36 – 45 years

>45 years

Occupation:

Student Service person (job) Self Employed (businessman)

Profession (doctor etc.)

Thank you.

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Bibliography