pbm-brand project sample project

8/8/2019 PBM-BRAND Project Sample Project

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HONDA MOTOR CYCLE &

SCOOTER INDIA LIMITED

Submitted by (PTPGPM-July 2000):

ARVIND SHARMA : 08

B.P.RATH : 11

MADAN MOHAN ACHARYA : 17

VINAY KUMAR : 54

Management Development Institute

Gurgaon

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Contents

Description Page

1. Introduction 03

2. Two wheeler Industry in India 04-06

3. Environmental Analysis 07-08

-Five force Analysis

-SWOT analysis

4. Hondas Entry to Indian Market 08-09

5. Product Positioning 09-10

6. Segmentation & Competition 11

7. Brand Building at HMSIL 12

8. Brand Identity 13

9. Marketing Strategy 13

10. Problem Faced in Marketing Strategy 14

11 Perceptual mapping of Leading Brand 15

12 Brand Perception Mapping 16

13. Present Campaign 17

14. Growth Opportunity 17

15. Future strategy (Adv and promotional campaign) 18

16. Conclusion 19

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Introduction- Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI), a wholly owned

subsidiary of Honda Motor Company Ltd., Japan established in yr 1999 with initial

capital investment of Rs 300 cr. to initiate a change and make a difference in the

Indian 2-wheeler industry. Honda's dream for India is to not only manufacture 2-

wheelers of global quality, but also meet and exceed the expectations of Indiancustomers with outstanding after sales support. Honda is the world's largest

manufacturer of 2-wheelers. Its symbol, the Wings, represents the company's

unwavering dedication in achieving goals that are unique and above all, conforming

to international norms. The factory is located at Manesar, Gurgaon, Haryana with a

present installed capacity of 2 lacs/ units per annum.

HMSI operates on a principle, which is followed worldwide by all Honda

companies. Maintaining a global viewpoint, HMSIL is dedicated to supplying

products of the highest quality, yet at a reasonable price for worldwide customer

satisfaction.

Honda's philosophy is based on the company's guiding principle and advocates 2

fundamental beliefs: Respect for individual and Three joys.

Respect for the Individual Honda recognizes and respects individual differences.

The respect for individual stems from the following three points: Initiative

Equality

Trust

It is the contribution from each individual in the company that has made our

company what it is today and that, which will take us into the future.

The Three Joys In line with Honda's Philosophy, HMSI conducts all its dailyactivities in pursuit of the following joys:

The Joy of Buying

The Joy of Selling

The Joy of Manufacturing

In a span of two years, HMSI has launched two scooters. Honda Activa - scooter

that took the Indian market by storm, and Dio India's first motoscooter.

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Two-wheeler Industry in India.

The last four-five years have brought about a great change in the consumer

preferences for two-wheelers. The two-wheeler industry is perhaps the most happening

place in terms of new models launched, upgraded products and innovative marketing

techniques. Till 1990, the two wheeler Industry was mainly dominated by metal body

geared scooters and the number of producers were less than five. This oligopolistic market

structure has changed with the entry of lighter, 100 CC motorcycles. This has resulted a

shift in the consumers preference from scooters to Motorcycles. The two wheeler segment

in India can be classified in to three major segments-

1. Scooters

2. Motor cycles

3. Mopeds.The Indian two-wheeler industry is dominated by three players, Bajaj, Hero Honda and

TVS Suzuki, who account for 80 percent of the total two-wheeler market. The other players

including Kinetic Engineering, LML and others account for the remaining 20 percent of the

market.

(Source: SIAM)

4

47.2 47.5 46.8 4643.9

41.539

33.2

2725.2 26.729.5 30.4

3337.2

41

47.6

54

27.6 25.8 23.7 23.6 23.1 21.3 20 19.2 19

0

10

20

30

40

50

60

FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY2000 FY2001

Scooter Motorcycle Moped


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Thus the share of scooters and mopeds over the years has been falling steadily

and the share of motorcycles has been rising very rapidly. This has been due to the

change in the profile of two wheeler buyers. Earlier a two wheeler was a substitute for the

passenger car. But in the nineties it has become an object of pleasure and therefore this

shift towards motorcycle.

The two wheeler penetration in India is quiet low at about 220 motor vehicles per 1000

households. Thus there is a huge potential for growth in India. The trend in the two-wheeler

industry is denoted in the following table and we can clearly see a shift from scooters to

motorcycles.

CAGR growth of 10% between 98-99 to Q1 2002-03

Motorcycle is the fastest growing category followed by ungeared scooter

Motorcycle share in the two wheeler industry has increased from 35% in 1998-99 to53% in 2002-03.

Category CAGR % (from 98-99 to Q1 2002-03)Motorcycles 33%Step thrus -25%

Ungeared scooter 18%Geared scooter -22%

Mopeds -12%Total two wheeler 10

(Source: SIAM)

Market Share Based on Category:

(Source: SIAM)Scooters Market Share

Based on Demography:

5

Scooter 20%

Moped14%

Step thru6%Scoterettes

7%

Motor cycle53%


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Demographic distribution of scooter sales

North India45%

Western India28%

South India16%

Eastern11%

(Source: SIAM)

Based on Players:

(Source: SIAM)

There are 6 players in scooter segment. Bajaj Auto, the leader in scooter market, has

largest sales and service network with 43% market share. There is stiff competition among

the six players for retaining market share.

Environmental Analysis-

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Bajaj43%

HMSIL6%

Kinetic13%

LML14%

Maharastra7%

TVS17%


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HMSIL entered in India to give differentiated product in Indian market. Let us analysed the

five force model to access the environmental aspect .

Considering the Five force analysis, it is found that bargaining power of buyer is low, threat

of substitute is high. Bargaining power of supplier is low. The most important is the

competitive rivalry is very high.

SWOT ANALYSIS

Strengths:

Strong technology driven product, As 100 % subsidiary of Honda Motor Co, the

company in India is supported by high technical support.

High Innovation

Global competitiveness and string presence.

Fuel efficient and sleek and stylish scooter for common people.

State of art manufacturing facility at Gurgaon.

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Threat of potential newentrants-

High(Chinese Imports)

(Hero Honda will bemaking Scooter)

Competitive rivalry

Very High

Bargaining power of Supplier

Low

Bargaining power of Buyer

Low(Market is fragmented)

Threat of Substitute-

High(Highly Competitive andChanging market)


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Weaknesses:

Dealership network and service network is not as widely distributed as competitor.

Distribution channel is not widely as of competitor.

Poor Rural presence in India.

Product awareness is less.

Opportunities:

Although the scooter market is declining in India, There is a much demand in new

generation scooters having sporty, stylish look, which will give a riding comfort with

economy and convenience for maintenance.

Due to huge middle class income group, there is growth of scooter market if the proper

designed scooter as per customer is given.

Threats: There are strong players in the market like Bajaj Auto, TVS Suzuki, Kinetic Engg and

LML. This will lead to strong competition in the market.

The scooter market is declining and there is much shift from scooter market to motor

cycle market. This may lead to carter for low volume market.

Future competition is expected from Hero Honda Motors and HHML is planning to

lunch scooter in India by 2005.

Hondas Entry into Indian Market-

Honda Activa- Honda Activa is the first scooter model of HMSI for the Indian

market. It has revitalised the Indian scooter market after its launch in the year 2001.

Honda Activa has set a new standard for the Indian scooter market. It has been

developed exclusively for the Indian market after closely examining the changing

lifestyles and needs of the consumers.

Honda Activa has been designed to cater to the people who believe:

The conventional Indian scooter is too big and difficult to handle

The scooterette is too small and similar to mopeds

DIO- Dio is Indias first motoscooter, a unique concept that blends the stylish and

aggressive form of a Motorcycle with the comfort and convenience of a scooter. A

trend that continues across the world today, DIO, a reflection of this concept is a

vehicle, which is youthful, energetic, sporty and innovative. It perfectly matches the

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aspirations of todays youth and asserts their feeling of being young, and helps

them express their desires in their own unique way. Exactly what the trendsetters of

today want.

This wedge shaped scooter with the futuristic design incorporates the latest worldtrends. DIO has been developed exclusively for youngsters with a desire to be at

the forefront of the latest trends. It is designed for the users who are progressive,

trendsetters and want to express themselves, through the products they use.

Dio caters to people who seek:

Additional value keeping the basic needs

Something different

2-Wheeler style reflection of self

Performance matching the driving conditions

Dio, the first motoscooter in India by Honda, is equipped with a number of new

functions and mechanisms. It is designed to satisfy customer requirements through

its innovative design and highly topical status. This model will not only be marketed

in India but will also be exported to South & Central America, Europe, Africa &

Asian countries, using Hondas global network.

Marketing strategy and demand forecasting for HMSIL:

Mapping the internal strength to opportunity in the market HMSIL want to position the

product with highly qualitative product for the modern requirement for the scooter and

motoscooter. As per the strategy plan HMSIL will have 50% of scooter markets share by

2005 apart from exporting to different countries.

Vehicles

54600

154000

240000

450000

0

100000

200000

300000

400000

500000

2000-2001 2002-2003 2003-2004 2004-2005

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(Source: www.honda2wheelerindia.com )

Honda Positioning and marketing strategy

Considering the Indian Market where the scooter market is down sliding due to lack of innovation

and customer friendly product. HMSIL has the high quality and medium price strategy for the

Indian market so as to give a face-lift for the declining scooter industry.

The product is of high quality and will be charging less. Hence, high value strategy will be

considered.

Product positioning

HMSIL launched the scooter (Activa and Dio) for the following reasons.

Segmentation for HMSIL-

Based on the customer profile, HMSIL is targeting the customer who requires comfortable

drive with easy handling and more reliability. Fact suggests that target customer is between

age group of 18 to 30 yr. including college going students, adults and woman. The target

customer base typically includes the complete range of family people except the older

people.

Competition- With declining scooter segment there is tough competition to keep the marketshare up with all five players. Considering head to head competition with scooter segment

from Bajaj, TVS, Kinetic,LML, HMSIL should understand the competition in the market &

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PriceHigh Medium Low

High1.PremiumStrategy

2.High-valueStrategy

3.Super-valuestrategy

Medium4.Overcharging strategy

5.Medium-ValueStrategy

6.Good-Valuestrategy

Low7.Rip-off strategy

8.False economystrategy

9.Economystrategy P

r o d u c t Q u a l i t

Inconvenience anddiscomfort with existing

Geared scooter

Scooterette is too small

Honda positioningScooter withconvenience,

comfort, stylish andreliability

Large gap between,scooterete andexisting scooter .
http://www.honda2wheelerindia.com/http://www.honda2wheelerindia.com/


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marketing strategy of the competitor so as to make the market strategy better. The

following matrix shows the competitors target customer and advertisement that is targeted

towards the customer.

Co Model Target customer & Product AttributesBajaj Saffire Targeted for young students whose parents will not allow them

to own motorcycles at the same time require a safe and

comfort ride for their children. With its combination of looks,

performance, operating costs and reliability, it is positioned to

give youngsters a better excitement.Kinetic Nova Targeted for younger generation of age group between 18-30

for easy and comfortable riding. Stylish look, performance,

easy in handling and operation is the key benefits to which

catering.TVS Scooty Targeting to ladies, both students, housewives for easy in

handling.LML Star Targeted for middle income group, which requires a scooter for

mobility for day to-day activities.(Source www.bajajauto.com/,www.tvssuzuki.com/www.kineticindia.com)

Product line comparison w.r.t. competition

There is a head-on competition in scooter segment, each company lunching the new

product with more innovation and technology. The direct comparison of product withfeatures is explained below

.

HMSIL Kinetic Engg Bajaj TVS

DIOKineticMarvel Saffaire(Bajaj) TVS (Scooty)

Engine

Type 4-stroke, Singlecylinder 2-Stroke 4-Stroke 2-Stroke

air cooled,OHCSingecylinder Single Cylinder Singe cylinder

Displacement 102 cc 110cc 92.2 cc 59.6cc

Max. Power 7 Bhp @ 7000rpm

7.7 Bhp @7000 rpm 5.9Bhp @ 7000 rpm 4.5 Bhp @ 5500 rpm

Max. Torque9-8 Kg-m @5500 rpm

9-8 Kg-m @5500 rpm

6.4 Kg-m @ 6000rpm

Transmission Automatic 3 Automatic 1AutomaticIgnition Self / Kick Self self self Electricals Battery 12V, 5Ah 12V,AC/DC 12V,AC/DC 12V,AC/DCHeadlamp 35WChassis

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Frame High rigidity Tubular Tubular Tubular Dimensions(lxbxh)

1760 x 710 x1110 mm

Wheel Base 1235 mm 1262mm 1250 mm NAGroundClearance 145 mm 103 mm 105 mm NAFront Bottom Link Trailing Link Trailing Link Trailing Link

With hydraulicdamper

Rear Unit swing withspring Mono shock Mono shock Dual telescopic

Tyre Size Front 3.50 - 10, 4 PR 3.50 x 10" 3.50 x 10" 3.00 x 10"Rear 3.50 - 10, 4 PR 3.50 x10" 3.50 x10" 3.00 x10"

FrontDrum, 130 mmdia Drum Drum Drum

Rear Drum, 130 mmdia Drum Drum Drum

Fuel Tank

Capacity 6 litres 6 litres 6 litres 6 litres

StyleSleek andstylish Sleek Sleek Sleek

(source: Product Brochures)

Brand Building of Honda In India-

Considering the ladder diagram we may find that HMSIL is preferring to have

product attribute and hence this will give rise to customer benefit. However

emotional benefit is not considered for the brand. The brand is relatively newand emotional benefit is not attached with at this stage in India.

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PRODUCT ATTRIBUTE OF ACTIVA ANDDIO

CUSTOMER BENEFIT

EMOTIONAL BENEFIT

Honda is consideringProduct attribute andCustomer benefit todevelop brand in India


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(Brand Building at HMSIL)

(Brand Identity of HMSIL)

The core identity of the brand is a scooter with high performance,

convenience in riding & easy driving. The extended identity is because of

reliability , esthetics and high quality product. The marketing strategy clearly focuses on developing brand in a steady phased

manner. The over all marketing programme from the time of launch focuses

on

Price

1. High Value strategy

2. Price to match customer

expectation based on benefit

Place

1. Geographical coverage

2. Major focus on developed cities

and towns.

Promotion

1. Better customer service

2. Better serving of vehicle

3. Effective and better distribution

channel

4. Trade promotions

Effective communication through

Advertisements

Product-

1. Differentiated product

2. Better feature

3. Easy in Handling

4. Riding comfort

5. High performance

6. High qualitative product

7. High reliability

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Scooter withhigh

performance/convenience& easydriving

Aesthetics

HighQuality

Reliability

ServiceQuality


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The marketing plan is mainly focused on giving better product with a better

service quality. Here the brand association with the product is based on

attribute benefit to the customer and better service.

Problem faced

With the above mentioned marketing programme HMSIL started marketing in

India. The major problem the was-

Developing Dealership in all areas - As per Company strategy, mainly all

major towns are being focused is urban area was focused. However in Indian

Market the player like Bajaj is having a strong network of dealer and service

network. The development of service network for HMSIL was limited to urbansector in first phase. This has given to dis-satisfaction of the people who

wanted to buy the product in semi urban area or other areas .

Building Awareness- As HMSIL is new to the market building awareness was

a main challenge. The brand is although well perceived outside India, However

to communicate the brand upto the local customer the company faced a bigger

challenge.

Customer waiting time - The product Activa and Dio gave competitive

advantage over the available brands in India. The demand was more and

company was not able to step up the product facility. This leads to customer

dis-satisfaction and in some extent there is switching of the brand from

Honda to other competitor.

Market Research- Questionnaire were asked to with random sample to get

the data of product awareness and result collected are summuraised in

perceptual grid.

Perceptual Map of the leading brands:

Product Awareness

Bajaj

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HondaKineticLMLTVS

Product Quality Product Benefit

Service ProvidedBy mapping different product as per above one find that people perceive that,

the product awareness is not very high although people perceive that product

quality and product benefit is better than the competitor. Hence HMSIL should

focus on improving the product awareness by improving communication.

Mapping of competitors product Vs Dio

Product performance

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DrivingPleasure &Easy inHandling SAFFIR

E

Kinetic

Chetak

LML

SCOOTY

DIO


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Brand Perception- Coming to brand perception, let us put it in grip form so that we may

understand the various factors responsible for brand perception-

Image Perception Study across all competitor models Marketing research was carried out

by through questionnaire to understand what attributes make the product differentiated and

what attributes. Benefits for which customer purchase the scooter. This activity was

carried out for all competitive products so as to know the differentiated attribute,

which has to be communicated to customer .

Model Aesthetics Performance Ridin Comfort PriceSafire ***** **** **** ****Nova *** ***** *** ****

**** ***** ***** ***** *** ** ***

Scoot *** *** *** ***Chetak ** *** ** ***(Sample size of 30 was taken and scaling was done based on 5-excellent and1- very low)

Based on the study about image of the product the three parameter, looks, performance

and riding comfort should be considered to increase the product awareness in the country.

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0

2

4

6

8

10price

looks

performance

easy in handlingstudyness

serviec level

aw areness


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Present Campaign- The present campaign is not so much focused on improving

communication as we have found in the survey. The advertisement,

dealer promotion and consumer promotions are not aggressive .The

campaign and effort is limited to trade promotion and development of

network. The campaign is not focused on targeted customers and

recognition and recall about the product is very low.

Growth opportunity and new plan- The growth opportunity is very high and the company

should focus on new strategy of improving in the following areas-

1. Increase Communication to increase the product awareness and hence brand

awareness with full advertisement campaign.2. Better product availability - On time product availability will give rise to more

customer service and less customer dis-satisfaction.

3. Developing dealers and distribution channel in semi urban areas- Developing the

dealer and service network in semi urban areas may be required to access to rural

customers.

The communication can be increased by improving advertisement and promotions. The

objective of the advertisement will be to achieve high level of product awareness, product

knowledge and brand image. Which, in turn, will attract new customers towards theproduct.

Message strategy for HMSIL should consider-

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Customers Assessmentof unique feature

Comparison withcompetitors ADcampaign with HMSILAD campaign strategy

Competitors Target Mktvs HMSIL Target Mkt

Target Media for AD campaign-Print mediaTV mediaHoardings & Posters

Target MKT for HMSILAge group 18-30College going studentWorking man/womenFull Family range (Except old) )People

Performance,Riding comfortConvenienceAesthetic


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Message strategy for HMSIL will be- benefits to be conveyed in terms of product

performance, riding comfort and convenience with product positioning.

Based on qualitative and quantitative analysis we propose to give following

advertisement to support the brand growth -

Media Class -

Television, Newspaper, Magazine, Direct Mail Hoardings and posters.

Media Vehicles-

Television - Star News, AajTak, ESPN Sun TV & Zee News

Newspaper- Times of India, HT, Telegraph, Hindu, Punjab Kesari

Magazine-. Sportstar, Auto India, India Today, Femina

Direct Mailing- To HMSIL product owners & those who visit dealership

Hoardings & Poster-Delhi,Mumbai, Chennai, Calcutta, Bangalore- Major cross section

& College locations.

Reach- The target audience for HMSIL is age from 18-30 yr and including family

members. This consists of area wise, Considering the geographical scooter market share

we find Maximum customer is in north followed by west , then south and east. So media

plan to be designed considering maximum reach of the above.

Promotional activities - The following promotional activities are to be carried out along-

with new advertisement campaign of the product.

Description Type of promotion Reason

-Attractive Finance

scheme

- Easy finance scheme -In order to improve sales and show

presence differential interest rate % to

be partly shared by HMSIL ( @ 4 %

to be shared)-Arranging collegeevents

-Cultural functionsponsorship in various

colleges

-HMSIL may go for sponsorship of cultural programme in major colleges

in metro cities to attract the college

boys and girls.Promotional

activities

-Free air ticket to GOA,

(Twice)

-Lucky draw winner from HMSIL

customer to be chosen and send to

GOA for free tickets.Free Helmet, Handy Bag etc

(For one month)

- Free bag aimed for college going

students will be given to have

association with HMSIL

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Conclusion-

HMSIL product Activa and Dio is set in Indian road to give a better convenience and

easy ride scooter in India. Honda as brand is very high outside the country ,However as

per our analysis we have seen that due to product awareness, reaching to customer ,the

brand is not very popular in India. For improving the brand image which can be achievedby more association with customers and providing better service and product . The

marketing strategy of HMSIL should focus on increasing product awareness by more

advertisements, promotional campaigns, better service, better availability of the product

and giving emotional benefit to the customer.

Earlier Two wheeler industry is focusing on product attributes, However with the present

competition and closeness with customer the focus of HMSILshould be to give emotional

benefit by better customer satisfaction, product availability, and better awareness.

The advertisement plan alongwith promotional campaign should increase the awareness

through product knowledge and brand awareness.

pbm-brand project sample project

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