DECLARATION

We are, Kishan G. Patel (127420592040) and Heena G. Prajapati

(127420592044), hereby declare that the report for Comprehensive
Project entitled the study of Consumer Perception towards Hero
Bikes is a result of our own work and our indebtedness to other work
publications, references, if any, have been duly acknowledged.

Place :

Kishan G. Patel(127420592040)

Date :

Heena G. Prajapati(127420592044)

PREFACE
MBA is a two year degree course. This is based on management
studies. Practical knowledge is also necessary for developing skill about
industrial environment and business practice.
The marketing research to Hero Bikes is very helpful to students of
management because it helps to get better prospects and understanding
of the working condition of various industries.
As a part of first year study program, we need to make a project report
on practical study and we have decided to prepare a project report on
the study of Consumer Perception towards Hero Bikes.
While preparing a project report, we met customers of Hero Motocorp
and ask them questions related to their consumption habit, what they
keep in their mind while buying this product.
Preparing the project report is a good learning experience for us where
in we come to know about the various aspects of the practical scenario.
The report is a compilation of this experience.

ACKNOWLEDGEMENT

Through this acknowledgement I express my sincere gratitude towards

all those people who helped me in the preparation of this project, which
has been learning experience.
I would like to thank our Director Dr. Bijal Zaveri and our faculty guide
Prof. Vidhita Sinha to encourage me for a practical study.
Finally, I express my sincere thanks to our faculty members who guided
us throughout the project work and gave us valuable suggestions and
encouragement and I also thanks to them who helped me in this project
directly or indirectly.

TABLE OF CONTENT

Basic Information

Idea Cellular Limited

Type

Public company
{{|532822}}
NSE: IDEA

Industry

Telecommunications

Founded

1995

Headquarters

Santacruz East, Mumbai,India

Key people

Kumar Mangalam Birla

(chairman)

Products

Mobile telephony, wireless broadband

Revenue

265 billion (US$4.3 billion) (201314)

Operating
income

28.79 billion(US$470 million) (2011)

Net income

19.68 billion(US$320 million) (201314)

Total assets

US$5.334 billion (2010)

Employees

6,481 (2010)

Parent

Aditya Birla Group (49.05%)

Axiata Group Berhad (19.96%)
Providence Equity (10.6%)

Website

www.ideacellular.com

IDEA CELLULAR
ABOUT US
Idea Cellular is an Aditya Birla Group Company, India's first truly
multinational corporation. Idea is a pan-India integrated GSM
operator offering 2G and 3G services, and has its own NLD and ILD
operations, and ISP license. With revenue in excess of $4 billion;
revenue market share of nearly 15%; and subscriber base of over
121 million in FY 2013, Idea is Indias 3rd largest mobile operator.
Idea ranks among the Top 10 country operators in the world with a
traffic of over 1.5 billion minutes a day.
Idea is listed on the National Stock Exchange (NSE) and the Bombay
Stock Exchange (BSE) in India. Idea has been ranked #1 in the
Telecom sector in Indias Best Companies to Work for Study 2013
and the "Best Place to Work" at the Asia Communication Awards
2013.

VISION
To develop an integrated supply chain focusing on maximizing the
return on our spend and assets to efficient information systems
supported processes, making its supply chain a benchmark across
industry

MISSION
"We will Delight our Customers while meeting their individual
communication needs anytime anywhere"

STRATEGY
The Idea Cellular Limited falls in the question mark quadrant of
BCG matrix and in the High attractive and Strong Competitive
strength category as per the GE Matrix. Thus they need to formulate
some strategies to try capturing some market share, growing and
building their brand image as well as brand value.

BRAND
The new Hero is rising and is poised to shine on the global arena. Company's
new identity "Hero MotoCorp Ltd." is truly reflective of its vision to strengthen
focus on mobility and technology and creating global footprint.
Building and promoting new brand identity will be central to all its initiatives,
utilizing every opportunity and leveraging its strong presence across sports,
entertainment and ground-level activation.

MANUFACTURING
Hero

MotoCorp

two

wheelers

are

manufactured

across 3

globally

benchmarked manufacturing facilities. Two of these are based at Gurgaon

and Dharuhera which are located in the state of Haryana in northern India.
The third and the latest manufacturing plant is based at Haridwar, in the hill
state of Uttrakhand.

DISTRIBUTION
The Company's growth in the two wheeler market in India is the result of an
intrinsic ability to increase reach in new geographies and growth markets.
Hero MotoCorps extensive sales and service network now spans over to
6000 customer touch points. These comprise a mix of authorized dealerships,
service & spare parts outlets, and dealer-appointed outlets across the country.

FORMATION OF HERO MOTOCORP

The name of the company was changed from Hero Honda Motors Limited to
Hero MotoCorp Limited on July 29, 2011. The new brand identity and logo of
Hero MotoCorp were developed by the British firm Wolff Olins. The logo was
revealed on 9 August 2011 in London, to coincide with the third test
match between England and India.
Hero MotoCorp can now export to Latin America, Africa and West Asia. Hero
is free to use any vendor for its components instead of just Honda-approved
vendors.

COMPANY PERFORMANCE
7

 The company has sold over 47 million 2-wheelers since its inception in 1984
till March 2013.
It sold 6.07 million 2-wheelers in 2012, out of which 5.5 million were
motorcycles.
Hero Motocorp sells more two wheelers than the second, third and fourth
placed two-wheeler companies put together.
Its most popular bike Hero Honda Splendor sells more than one million units
per year.
In 2013, Hero MotoCorp registered best ever calendar year performance of
more than 6.1 million unit sales.
By selling 6.25 million units in the month of October, it became the first-ever
manufacturer to cross landmark 6 lakh unit sales in a month.
In the last quarter of the year or say in the festive season, the company sold
more than 1.6 million units, while in non festive time in AprilMay 2013; it
managed to sell out quite good numbers of units- 1.1 million.

HISTORY
2013

Became the 3rd largest mobile operator in subscriber terms as well

Received a USD 1 million Grant from US Trade and Development Agency for
a Green Telecom Project
2012
Subscriber base as on December 31, 2012: 113,946,827
Won back spectrum for 7 circles for which licenses were quashed by the
Supreme Court.
Became a $4 Billion Company in revenue
Established a robust network of over 100,000 cell sites across the country
2011
Subscriber base as on December 31, 2011: 106,380,111
First operator to announce the launch of Mobile Number Portability, have
been the Top gainer ever since the service was launched.
Launched 3G in 10 circles Andhra Pradesh, Gujarat, Haryana, Himachal
Pradesh, Jammu & Kashmir, Kerala, Madhya Pradesh and Chhattisgarh,
Maharashtra and Goa, Uttar Pradesh (East), Uttar Pradesh (West).
Entered the devices category with the launch of affordable 3G smartphones.
Only operator in the country to have ISO 9001:2008 certification for its
service delivery platform for all 22 service areas and the corporate office
2010
Subscriber base as on December 31, 2010: 81,778,655
Idea won 3G Spectrum in 11 service areas in India. These markets account
for over 81% of the companys total revenue
Idea crossed usage of One Billion Minutes per day on the network,
propelling it amongst the Top 10 country operators in the world
Idea emerged as the 3rd largest mobile operator in India, in revenue terms.
2009
Subscriber base as on December 31, 2009: 57,611,872
Idea becomes a pan-India operator
Emerging Company of the Year - fastest growing mobile operator in the
worlds fastest growing telecom market
Becomes pan-India operator in 2009
2008
Subscriber base as on December 31, 2008: 40,016,153
Idea acquired 9 licences for Punjab, Karnataka, Tamil Nadu & Chennai,
West Bengal, Orissa, Kolkata, Assam, North East and Jammu & Kashmir
9

Acquired Spice Communications with the operating circles of Punjab and

Karnataka
Launched services in Mumbai metro in the largest single metro city launch,
ever
Launched services in Bihar
2007
Subscriber base as on December 31, 2007: 21,054,027
Won an award for the "CARE" service in the "Best Billing or Customer Care
Solution" at the GSM Association Awards in Barcelona, Spain
Initial Public Offering aggregating to Rs. 28,187 million and Listing of Equity
Shares on the Bombay Stock Exchange and the National Stock Exchange
Merger of seven subsidiaries with Idea Cellular Limited
Reached the twenty million subscriber mark
2006
Subscriber base as on December 31, 2006: 12,442,450
Became part of the Aditya Birla Group subsequent to the TATA Group
transferring its entire shareholding in the Company to the Aditya Birla
Group
Acquired Escorts Telecommunications Limited (subsequently renamed as
Idea Telecommunications Limited)
Restructuring of debt
Launch of the New Circles
Reached the 10 million subscriber mark
Received Letter of Intent from the DoT for a new UAS License for the
Mumbai Circle.
Received Letter of Intent from the DoT for a new UAS License for the Bihar
Circle through Aditya Birla Telecom Limited. ABNL, the parent of Aditya
Birla Telecom Limited, pursuant to a letter dated November 22, 2006,
agreed to transfer its entire shareholding in Aditya Birla Telecom Limited to
the Company for the consideration of Rs. 100 million.
2005
Subscriber base as on December 31, 2005: 6,473,962
Reached the five million subscriber mark
Turned Profit Positive
Won an Award for the "Bill Flash" service at GSM Association Awards in
Barcelona, Spain
Sponsored the International Indian Film Academy Awards
2004
Completed debt restructuring for the then existing debt facilities and
additional funding for the Delhi Circle.
Acquired Escotel Mobile Communications Limited (subsequently renamed as
Idea Mobile Communications Limited)
10

Reached the four million subscriber mark

First operator in India to commercially launch EDGE services 2005
Acquired Escotel, incumbent cellular service provider in Haryana,
UP(W) & Kerala and new licensee in HP
2003
Reached the two million subscriber mark
2002
Changed name to Idea Cellular Limited and launched "Idea" brand name
Commenced commercial operations in Delhi Circle
Reached the one million subscriber mark
Brand IDEA launched Delhi operations commence (Nov)

2001
Acquired RPG Cellular Limited and consequently the license for the Madhya
Pradesh (including Chattisgarh) Circle
Changed name to Birla Tata AT&T Limited
Obtained license for providing GSM-based services in the Delhi Circle
following the fourth operator GSM license bidding process
Acquired RPG Cellcom, service provider in Madhya Pradesh (Feb)
Awarded

2000
Merged with Tata Cellular Limited, thereby acquiring original license for the
Andhra Pradesh Circle

1999
Migrated to revenues share license fee regime under New
Telecommunications Policy ("NTP")

1997
Commenced operations in the Gujarat and Maharashtra Circles
MoU for merger between Birla AT&T and Tata Cellular Limited Andhra
Pradesh signed (Jan)
1996
Changed name to Birla AT&T Communications Limited following joint
venture between Grasim Industries and AT&T Corporation
1995
Incorporated as Birla Communications Limited
Obtained licenses for providing GSM-based services in the Gujarat and
Maharashtra Circles following the original GSM license bidding process

11

Industry Analysis

12

INDIAN AUTOMOBILE AT A GLANCE

It is now the second largest telephone network in the world, after China.2nd largest
two wheeler market
4th largest commercial vehicle market
India emerged as Asias 4th largest exporter of automobiles, behind Japan,
South Korea and Thailand.
By 2050, the country is expected to top the world in car volumes with approx.
611 million vehicles on the nations road.

TWO WHEELERS IN INDIA

Started in 1851 when the first operational land lines were laid by the government near
Calcutta (seat of British power). Telephone services were introduced in India in 1881. In
1883 telephone services were merged with the postal system. Indian Radio Telegraph
Company (IRT) was formed in 1923.
After independence in 1947, all the foreign telecommunication companies were nationalized
to form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's
Ministry of Communications. Telecom sector was considered as a strategic service and the
government considered it best to bring under state's control.
The first wind of reforms in telecommunications sector began to flow in 1980s when the
private sector was allowed in telecommunications equipment manufacturing. In 1985,
Department of Telecommunications (DOT) was established. It was an exclusive provider of
domestic and long-distance service that would be its own regulator (separate from the
postal system). In 1986, two wholly government-owned companies were created: the Videsh
Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar
Telephone Nigam Limited (MTNL) for service in metropolitan areas. In 1990s,
telecommunications sector benefited from the general opening up of the economy. Also,
13

examples of telecom revolution in many other countries, which resulted in better quality of
service and lower tariffs, led Indian policy makers to initiate a change process finally
resulting in opening up of telecom services sector for the private sector.

Private operators hold 89.01% of the wireless subscriber market share

where as BSNL and MTNL, the two PSU operators hold only 10.99%
market share. The graphical representations of market shares and shares
in net additions of all the service providers during the month of January,
2014 are given below:
A. Service Provider wise Market Share as on 31st January, 2014.

National Telecom Policy (NTP) 1994 was the first attempt to give a comprehensive roadmap
for the Indian telecommunications sector. In 1997, Telecom Regulatory Authority of India
(TRAI) was created. TRAI was formed to act as a regulator to facilitate the growth of the
telecom sector. New National Telecom Policy was adopted in 1999 and cellular services were
also launched in the same year.

14

 Telecommunication sector in India can be divided into two segments: Fixed Service Provider
(FSPs), and Cellular Services. Fixed line services consist of basic services, national or domestic
long distance and international long distance services. The state operators (BSNL and MTNL),
account for almost 90 per cent of revenues from basic services. Private sector services are
presently available in selective urban areas, and collectively account for less than 5 per cent
of subscriptions. However, private services focus on the business/corporate sector, and offer
reliable, high- end services, such as leased lines, ISDN, closed user group and
videoconferencing. Cellular services can be further divided into two categories: Global
System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). The
GSM sector is dominated by Airtel, Vodfone-Hutch, and Idea Cellular, while the CDMA sector
is dominated by Reliance and Tata Indicom.
Opening up of international and domestic long distance telephony services are the major
growth drivers for cellular industry. Cellular operators get substantial revenue from these
services, and compensate them for reduction in tariffs on airtime, which along with rental
was the main source of revenue. The reduction in tariffs for airtime, national long distance,
international long distance, and handset prices has driven demand.

15

 B. Service Provider wise net subscriber addition during January,

2014

http://www.telecomlead.com/telecom-statistics/indian-telecom-market-share-report-february2014-trai-85888-50423.

Key players in the Two-wheeler Industry

There are many two-wheeler manufacturers in India. Major players in the 2-wheeler
industry are:

The major players in the mobile phone service industry are enlisted as:
BSNL
The Bharat Sanchar Nigam Limited, countrys largest cellular service operator was
set up in the year 2000. It is a state owned telecom company with its
headquarters located in New Delhi. BSNL is also the largest land line telephone
16

establishment in India. As of April, 2011 87.1 million users have been reported to
be BSNL users.
MTNL
Mahanagar Telephone Nigam Limited (MTNL) was set up in the year 1985, to run
telecom operations in the major metro cities of India, Mumbai and Delhi. Its
headquarters are based in Mumbai. MTNL was the first company in India to
initiate 3G services in India, having the brand name of MTNL 3G Jadoo Services
which provided options as Video call, Mobile TV, Mobile Broadband etc to the
customers.
Airtel
Also known as Bharti Airtel Limited was started in July 1995, with its head office
based in New Delhi. Airtel runs its operations in as many as 19 countries across
the world and is also ranked fifth as telecom service provider globally. As of April
2011, figures show that Airtel has over 164.61 million users which make it the
biggest mobile service operator in India. Its service includes both 2G and 3G
facilities
.Reliance Communication
Also known as RCOM was set up in 2004, with its head office in Navi
Mumbai. Reliance Communications as of now has more than 128 million users all
across the world.
Aircel
Aircel was founded in 1999, with its head office in New Delhi. It is a joint
enterprise between Maxis Communications and the Apollo Hospitals.
Vodafone Essar
Vodafone Essar was founded in 1994 with its head office at Mumbai. Vodafone
provides services to 23 telecom circles across India.
Tata Indicom
The Tata Teleservices was founded in 1996, with its headquarters in Navi
Mumbai.
Idea Cellular

17

Idea Cellular was started in 1995, with its head office in Mumbai. It also provides
3G services to its subscribers.
Virgin Mobile
Virgin Mobile started its services in India in 2008, March. It is a U.K. based
company.
Uninor
This Company is a joint venture between Telenor Group and Unitech Group and
was started in 2009. - See more at:
http://business.mapsofindia.com/communicationsindustry/companies/#sthash.1cD3kEIO.dpuf

http://1.bp.blogspot.com/-4am2b94uC44/UTC0X1L0Z5I/AAAAAAAAAa0/LxomKgN7SU/s1600/india-mobile-networks.gif

MANUFACTURER DETAILS
Name of
Manufacturers
vodafone
airtel

Head Quarter

Established In

Peninsula Corporate Park, Ganpatrao Kadam Marg,Lower

Parel, Mumbai,Maharashtra, India[1]
Bharti Crescent, 1, Nelson Mandela Road, New Delhi,
India[1]
Mumbai, India

21,February,1992
July 7, 1955

Reliance
communications
bsnl
New Delhi, India

2002

Tata indicom

Mumbai, Maharashtra, India

1996

aircel

Chennai, Tamil Nadu, India

1999

uninor

Gurgaon, India

2009

15 September 2000

18

Types of Two-wheelers in India

There are mainly three types of two-wheelers available in India:
Motorcycles
Scooters
Scooterettes/Mopeds.

19

Literature Review

20

 Coupey et al., (1998) argue that prior knowledge of product attributes allows
consumers to formulate more questions and therefore, lead them to look for
more information. These researchers further argue that category-specific
knowledge helps individual consumers to evaluate responses to questions,
thereby reducing cognitive cost of using information and increasing the
benefits of obtaining it.
Goodwin and Smith, (1990) Consumers influence more trust in product
information created by other consumers than in information generated by
manufacturers. Another consumer's personal experience with a product
seems important to several participants who view such feedback as more
credible than that obtained from other sources some consumers may be
unlikely to complain regardless of the context, due to their extremely polite
and restraining nature. More specifically, they may have an interaction style
that prevents them from confronting the dealer/ retail employees. Politeness
may have such an unassuming effect on the consumer behavior. Politeness
has already been identified as an interaction style within customersalesperson encounters by (Goodwin and Smith, 1990)
Sharma and Patterson, (1999) affirm that car dealers are implementing a
strategy to position themselves, more effectively in the market place than
before, by means of continuous improvement of quality maintenance through
services delivery packages, as car dealers are increasingly being confronted
by demanding and technologically knowledgeable consumers, shortened
product model lifecycles, intensified competition and fragmented market
segments.
Reynolds and Arnold, (2000) Highly satisfied customers will convey their
success stories of satisfaction and directly recommend that others try the
source of satisfaction, as stated in the studies conducted by (Reynolds and
Arnold, 2000).

21

 Ewing, (2000) investigated brand loyalty by examining actual past behaviour

and its impact on future behavioral intentions, as well as willingness to
recommend the brand to another customer known to him. Findings indicate
that purchase expectation/intention remain a valid research metric. It would
appear that the brand/consumer interface offers greater predictive ability than
the retailer/consumer interface. Willingness to recommend a brand to another
consumer does not seem to be influenced by past behavior, but the higher the
respondents expectation to purchase the brand, the higher will be their
willingness to recommend the brand.
Cordell, 1992; Thorelli, et al., (1989) Information - processing theories posits
that consumers use product and psychological cues to form beliefs and to
evaluate of products. Generally, country of origin of the brand, peer
recommendation and whether the brand is used by people who are
considered affluent by the prospective buyers etc. are considered as an
extrinsic product cue (Cordell, 1992; Thorelli, et al., 1989).
Srikatanyoo and Gnoth, (2002) Consumers are known to develop
stereotypical beliefs about products from particular countries and have
opinions about the attributes of those products. Thus, the country of origin
image has the power to arouse importers and consumers belief about the
product attributes and to influence the evaluation of products and brands
(Srikatanyoo and Gnoth, 2002).
Farrell, et al., (2000) It is plausible, therefore, that this effect can be
leveraged by brand managers. The process may involve screening out less
favorable information and/or selectively communicating appealing information
to the brand's target market. This can be thought of as activating the
celebrity for the benefit of the brand. Evidence for the proposed effects of
celebrity activation is provided by (Farrell, et al., 2000), who initiated that the
proficient success of a celebrity endorser, if publicized by the endorsed
product's firm, improved consumer brand-evaluations of the endorsed product
(measured as excess returns for the endorsed brand). On the basis of Farrell
et al. (2000) discussion, it is proven that more a celebrity endorser is

22

activated, the more the endorsed products brand image will benefit from
endorsement by the celebrity.
White, (2004) discusses the factors that affect car-buyers' choices and
comments that people expect to haggle with dealers over price and to receive
substantial rebates or incentives as well as low-interest payment plans. He
points out that with an increase in multi-car households, car porch and
advertisers need to target the right audience, taking into account the pester
power of children and the importance of life stage. Despite the fact that
women are the primary buyers of most new cars, he admits that the motor
trade has traditionally been contemptuous of women's role in the car-buying
process.
Herrmann, et al., (2007) seek to examine specific factors that influence
fairness perceptions, including price perception and consumer vulnerability, in
the context of car purchases in major German car dealerships. Their research
paper shows that price perceptions directly influence satisfaction judgments
as well as indirectly through perceptions of price fairness.
Awasthy et al., (2012) First, prior knowledge suffices the need to know about
the attributes of various alternatives and consequently limits the additional
information search from external sources. Second, the knowledgeable
consumers can perform more efficient information searches because they
know what information is important and useful. Information may be
categorized by consumers according to their degree of importance (Awasthy
et al., 2012).
Menon and Raj, (2012) Customer satisfaction can be considered the central
determinant in all phases of the contact chain. Multi-dimensional recording of
customer loyalty reveals clear differences in the interactions, first, with brand
loyalty and, second, with dealer loyalty. In contrast to the opinion widely held
in practice, customers in the automotive sector definitely do not perceive the
brand and the dealer as one unit. Since similar studies in different countries
come to almost the same conclusions, it can be argued that the results are
valid in several cultural settings.
23

 Till and Shimp, (1998) Several studies suggest that when a brand becomes
associated with a celebrity via the endorsement process, information
regarding that celebrity's activities and achievements can transfer to the brand
and have an effect on its image (Till and Shimp, 1998).
Chaudhuri and Holbrook, (2001) examined two aspects of brand loyalty,
purchase loyalty and attitudinal loyalty, as linking variables in the chain of
effects from brand trust and brand affect to brand performance (market share
and relative price).
www.ijrcm-1-IJRCM-1_vol-4_2013_issue-11-art-04.pdf
www.ssrn.com

24