PROJECT REPORT

ON

“A SURVEY OF MARKET POTENTIAL OF HERO”

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR
THE AWARD OF THE DEGREE OF
 PREFACE

Summer training program is an opportunity for the postgraduate student to apply his/her
theoretical knowledge gained in the university academic program into real world industrial based
application development and experience professional human resources management process.

The objective of such program is to enhance participants' skills and to enrich their industrial

knowledge by keeping them updated with the latest technologies.

After completing the 3rd semester as an postgraduate student of Dr. A. P. J. Abdul Kalam

Technical University, Lucknow . I got the opportunity to carry out my industrial training in

Hero.

The project is about the induction program why it is conducted, when it is conducted, what’s the

need to conduct the induction programmers, what is discussed under an induction programmer,

how the new employees interact with each other, how the information regarding company is

made to be understand by the employees and as well as how the policies and practices are

discussed among the new employees so the employees get familiar with it.

This study provided me practical exposure of the functioning of Human Resource

Department. The experience was enriching. I have tried to give my best to this project.
I hope that I have comes up to the expectation of everybody who have posed his or her
trust in me

2
 TABLE OF CONTENT

1. Executive Summary 6

2. Problem Statement 7

3. Introduction 8-15

4. Company Profile 16-61

5. Research Methodology 62-71

6. Data Analysis & Interpretation 72-83

7. Findings 84-85

8. Limitations 86

9. Suggestions 87

10. Conclusion 88

11. Bibliography 89-90

12. Questionnaire 91-93

3
 EXECUTIVE SUMMARY

I undertook six weeks summer training in Globe Automobile, Hapur as an

essential and obligatory part of MBA Programme of , Institute Of Management
and Research Meerut Road Ghaziabad and my project title is “A Survey of
market potential of Hero ”. I have completed my summer training under the
guidance of Mahesh Sharma (Regional Marketing Manager Globe Automobile,
Hapur). Mostly I have collected the primary data and secondary data also.
Actually the purpose of my project report is:
 To understand the economic factors affecting the sales volume and their
opportunities.
 To understand the advantage and limitation of the product.
 To study the price trends, etc. I used the descriptive research in my research
project. Here finite universe has been used for the research purpose. My Universe
is whole Ghaziabad and I have collected the data from 60 respondents through
questionnaire as schedule base. And I found that in my research 47 % of the two
wheeler users have Hero bikes in Ghaziabad.
 According to my research 70 % of the Person who is user of Hero never likes to
purchase another brand’s bike in future.
 Bajaj is a strong competitor of Hero.
 According to my research Splendor is a King of two wheelers in whole Ghaziabad
district.
 Youth like sporty bikes like – KARIZMA,KARIZMA ZMR and CBZ-XTREME..

4
 PROBLEM STATEMENT

The principle cause behind this project is to know that to what level customers are
enjoying and aware of Hero Moto Corp offered by the company and what further
improvement can be done in future in this area so as to get brand awareness.

This was studied by marketing potential of Hero Moto Corp on college going students
Hapur City and an analyzed of the data collected was carried out so as to know the
preferences of the dealer, retailers and other market intermediaries.

This was helpful to predict the prospective sales of Hero Moto Corp Bikes and the level
of competition faced from other key player

5
INTRODUCTION

6
 INTRODUCTION

HISTORY OF INDUSTRY DEVELOPMENT

IN INDIAN CONTEXT

The Indian two-wheeler industry made a small beginning in the early 50s when
Automobile Products of India (API) started manufacturing scooters in the country. Until
1958, API and Enfield were the sole producers.

In 1948,Bajaj Auto began trading in imported Vespa scooters and three-wheelers. Finally,
in 1960, it set up a shop to manufacture them in technical collaboration with Piaggio of
Italy. The agreement expired in 1971. In the initial stages, Automobile Products of India
dominated the scooter segment; Bajaj Auto later overtook it. Although various
government and private enterprises entered the fray for scooters, the only new player that
has lasted till today was LML.

Under the regulated regime, foreign companies were not allowed to operate in India. It
was a complete seller market with the waiting period for getting a scooter from Bajaj
Auto being as high as 12 years.

The motorcycles segment was no different, with only three manufacturers viz Enfield,
Ideal Jawa and Escorts. While Enfield bullet was a four-stroke bike, Jawa and the
Rajdoot were two-stroke bikes. Enfield 350cc bikes and Escorts 175cc bike initially
dominated the motorcycle segment.

Then the two-wheeler market was opened to foreign competition in the mid-80s. And the
then market leaders - Escorts and Enfield - were caught unaware by the onslaught of the

7
100cc bikes of the four Indo-Japanese joint ventures. With the availability of fuel-
efficient low power bikes, demand swelled, resulting in Hero Honda - then the only
producer of four stroke bikes (100cc category), gaining a top slot.

The first Japanese motorcycles were introduced in the early eighties. TVS Suzuki and
Hero Honda brought in the first two-stroke and four-stroke engine motorcycles
respectively.

The industry had a smooth ride in the 50s, 60s and 70s when the Government prohibited
new entries and strictly controlled capacity expansion. The industry saw a sudden growth
in the 80s. The industry witnessed a steady growth of 14% leading to a peak volume of
1.9mn vehicles in 1990.

The entry of Kinetic Honda in mid-eighties with a barometric scooter helped in providing
ease of use to the scooter owners. This helped in inducing youngsters and working
women, towards buying scooters, who were earlier, inclined towards moped purchases.
In the 90s, this trend was reversed with the introduction of scooterettes. In line with this,
the scooter segment has consistently lost its part of the market share in the two-wheeler
market.

Now a day, TVS Scooty is a market leader in scooterettes along with Honda motorcycles
and scooters India’s HONDA ACTIVA which is very popular even in all generation due
to its ease of usage.

In 1990, the entire automobile industry saw a drastic fall in demand. This resulted in a
decline of 15% in 1991 and 8% in 1992, resulting in a production loss of 0.4mn vehicles.
Barring Hero Honda, all the major producers suffered from recession in FY93 and FY94.
Hero Honda showed a marginal decline in 1992.

India is the third largest manufacturer of two-wheelers in the world, and the largest
manufacturer of three-wheelers. The major players in the Two Wheeler sector are Bajaj
Auto, Hero Honda, and TVS Motors. Among two-wheelers, motorcycles have led the
upsurge (88% growth) to result in a y-o-y growth of 42% for the sector. The Indian two-

8
wheelers industry can be broadly classified into three major segments -- scooters,
motorcycles and mopeds.
With sales over 5.8 million (FY 2014-15), the industry is growing at the rate of nearly
36%. The motorcycle segment is the fastest growing with its share in two wheeler sales
increasing from 37.21% in FY1997-98 to 52.65% in FY2001-02, to nearly 74% in FY
2013-14.

In the last seven to eight years, the two-wheeler market has witnessed a marked shift
towards motorcycles at the expense of scooters. In the rural areas, consumers have come
to prefer sturdier bikes to withstand the bad road conditions. In the process the share of
motorcycle segment has grown from 48% to 70%, the share of scooters declined
drastically from 33% to 12%, while that of mopeds declined by 4% from 19% to 15%
during (FY 2007-08). Sale of scooters and mopeds segment decreased 51.20% and
47.93% respectively over the last five years.

Scooters and mopeds are rapidly losing their place in the market to the more fuel-
efficient, stylish and sturdy motorcycles. The Euro2 emission norms effective from April
2005 had led to the existing players in the two- stroke segment to install catalytic
converters. 4-stroke motorcycles are now replacing all the new models. Excise duty on
motorcycles has been reduced from 32% to 24%, resulting in price reduction, which has
aided in propelling the demand for motorcycles.

Competition has intensified over the last couple of years. The players in the two-wheeler
industry include Hero MOTO CORP ,HEROHONDA Auto Ltd, Motor, TVS Motors and
Yamaha.
Low – interest regime has helped in reducing cost of loans, which will help in boosting
sales of 2-wheelers, since 80% of the two- wheelers are credit – stimulated even in this
time of recession.

9
With more than 40 per cent of the motorcycle demand flowing from the rural sector, the
success or failure of monsoon has a major influence on the sales volume. After a great
growth in the first half of the previous fiscal, motorcycle takes off was affected during the
second-half due to recession effect.

TWO WHEELERS IN INDIA

1. Hero : CBZ – XTREME- Hunk - Karizma - Passion Pro – Splendor Pro

CD-HF DELUXE – Pleasure- Ignitor

2. Bajaj : Avenger , Boxer , CT 100 , Discover ,Eliminator ,Legend

Pulsar , Pulsar 220 , Platina , Wind , XCD Kristal , Chetak
Saffire , Sunny ,Wave

3. TVS : Victor - Flame – Apache-Star-City

4. Honda : Activa - Aviator - Dio – Unicorn-Twister,Honda CBR

5. Yamaha : Crux - Gladiator - Libero - RX-135 - RX 100 - R15 ·

FZ16 - FZ-S

6. Others : Rajdoot 350 - Royal Enfield Bullet

10
 TWO WHEELER INDUSTRIES: THE CURRENT
SCENARIO

If Automobile companies have been showing poor growth rates, can the two-wheeler
industry be far behind? The two-wheeler segment of the industry had been bucking the
normal trends exhibited by the automobile industry for the past few years.

But it appears that the time has come for this segment to align itself with the overall
industry growth. The growth in two-wheeler sales has been quite steady over the past
eight years and right now, there is no reason to expect an upturn. But, the overall sales
growth rates appear to have been capped due to affected purchasing powers as like fall in
real estate vehicle purchase to of any country is affected due to income generation.

There, in fact, could be a spiel for a fall in growth in penetration levels after a decade of
steady growth.

Although this quarter had showed an positive growth rate on the part of Hero Honda
along with other players except Bajaj.

More specifically, one can argue that the higher base has been partly achieved through
generous financing packages and discount schemes.

All major two-wheeler players-Bajaj Auto, TVS Motors and Hero Honda Motors, are
battling for the maximum share in motorcycle segment. This dramatic structural shift in
the industry from scooters to motorcycles has been going on for the last seven years and
is expected to have been completed.

The Indian consumer being sensitive to prices would certainly take the lead. Besides, the
industry size has become too big to sustain the growth rates. As a result, lower margins
will follow and supernormal returns would no more be possible.

The recent acceleration in motorcycle sales has led to a serious rethinking in strategies in
the two-wheeler market Bajaj Auto and TVS Motors are targeting volumes in the 4-
stroke motorcycle segment at the expense of margins. Bajaj auto’s ct 100 once over taken
11
splendor on volume grounds in 2006 just because of its low price. This is bound to lead to
profitability pressures for the two-wheeler industry as a whole, even subjecting Hero
Honda to competitive pressures.

The two-wheeler industry is expected to undergo a period of transformation, which

would involve lower margins and profitability pressures. Both Bajaj Auto and TVS
Motors have already built in these pressures in their valuations while Hero Honda is not
in mood to play price games that’s why its products are relatively highly priced than
Bajaj as well as TVS products.

About Training Place

I have done my summer training form Globe Automobile. Hapur Globe Automobile
situated at Garh-Delhi, Ghaziabad Uttar Pradesh, 245101

Phone No: 0122-2308565, 0122-2308568

Mr. Deepak Yadav is Director and contact person of Globe Automobile

12
 Globe Automobile

Company
Globe Automobile
Name

Contact
Mr Deepak Yadav
Name
Address Opp.Century Pvt.Ltd.

Location Garh-Delhi

City Hapur-245101

Email mailto:[email protected]?subject=Enquiry
through Bypd

WebSite http://www.herohonda.com/

Hapur

13
 COMPANY PROFILE

Hero Honda Motors Ltd is one of the leading companies in the two-wheeler industry. At
present, it is the leading player in the motorcycle segment with around 42% of the market
share in FY2009. During the year, the company posted a 51.5%yoy rise in turnover,
which was driven by a 43.6%yoy rise in sales volumes. Even last year in the face of
overall sluggishness in the automotive sector, the company managed to post a 24%
volume growth in motorcycles. The company has invested in capex to bring in new
models and meet the increased market demand. All this has been without resorting to
debt and entirely from internal accruals.

Hero Honda continues to hold the coveted position of being the largest individual two
wheeler companies in the world as also being the No.1 two wheeler joint venture of
Honda Motor Co, Worldwide. The Hero Honda Splendor has maintained its leadership as
the World No.1 two wheeler brands.
New model 'hunk' recorded monthly sales of 8,000 units within three months of launch.
The total sales turnover of the company was Rs.1, 945.21 crores in quarter ended June
30, 2007 from Rs.1, 759.82 crores in the corresponding period last year.
Profit before tax was Rs.985 crores and Profit after tax was 781 crores in the FY 2009-
010.
The company's sales volume during the first quarter of the year 2004 also recorded a
splendid increase, with sales of 6, 09,123 units of motorcycles as compared to 4, 58,779
motorcycles sold during the first quarter of the last FY.

14
 The company offers the following products:

 Pleasure - Scooter with 102 cc air-cooled four-stroke engine Price: Rs 36,240

Delhi ex-showroom

 Karizma - Motorbike with 223 cc four-stroke air-cooled engine Price: Rs

79,000 Delhi ex-showroom

 Super Splendor - Motorcycle with 125 cc four-stroke air cooled engine

 Splendor + - Motorbike with 97 cc four stroke air cooled engine Price: Rs

40,579 Delhi ex-showroom

 Glamour - Motorbike with 125 cc (9 bhp) "quantum core" engine

 Passion + - Motorbike with 97 cc four stroke air-cooled engine Price: Rs 41,885

Delhi ex-showroom

 CD Deluxe - Motorbike with 97 cc four-stroke air cooled engine Price: Rs

53,779 Delhi ex-showroom

 CD 100 SS - Motorbike with 97 cc four-stroke air-cooled engine Price Rs 38,821

Delhi ex-showroom

 CD Dawn - Motorcycle with 97 cc four-stroke air-cooled engine Price: Rs

31,899 Delhi ex-showroom

 Achiever - Motorcycle with 149 cc four-stroke air-cooled engine Price: Rs

48,200 Delhi ex-showroom

 Splendor NXG

 Passion PRO

 CBZ-xtreme

15
 Industry basics

The Indian two wheeler sector is the largest in terms of volumes among all the segments
in the automobile industry. The segment can be further categorized into three main sub-
segments – scooters, motorcycles and mopeds. Lately, however, some products like
scooterettes and step-thruough have been introduced in the market, which have features
of more than one segment. Five players mainly dominate the two-wheeler segment. All
these companies have foreign collaborations mainly with well-known Japanese firms.
These ventures, set up in the mid 80s, suffered heavily due to a sharp depreciation in
rupee till the early 90s. All these players are now well established with about 95%
indigenization. HEROHONDA Auto, the local player with low cost advantage,
dominates the sector. All the existing players have been expanding capacities and
widening their product base to include 4-stroke vehicles, which conform to Euro
environmental norms. Recently, Honda Corporation of Japan announced its intentions to
set up a 100% subsidiary to manufacture scooters and motorcycles. India is one of the
lowest cost production bases for two-wheelers.

In the last four to five years, the two-wheeler market has witnessed a shift towards
motorcycles at the expense of scooters. With urban consumers aspiring to possess the
latest in terms of looks and technology, energy efficient and sleeker looking models have
replaced the staid ones in the market. In the rural areas, consumers have come to prefer
sturdier bikes to withstand the bad road conditions. Motorcycles sales now contribute
47.6% of all two-wheeler sales, up from 41% in FY10.

16
 Management

Chairman Mr. Brijmohan Lall Munjal

Managing Director Mr. Pawan Munjal

Joint Managing Director Mr. Akio Kazausa

Director Mr. Shinichi Nakayama

Director Mr. Satyanand Munjal

Director Mr. Om Prakash Munjal

Director Mr. M P Wadhawan

Director Mr. S P Virmani

Director Mr. O P Gupta

Director Mr. M. Sudo

Director Mr. S Toshida

Director Mr. N N Vohara

Director Mr. Pradeep Dinodia

Director Gen. (Retd.) V P Malik

17
HMCL, a part of the Hero group, is a reputed name in the two-wheeler sector and the
management has a rich experience in the business. HHML is a joint venture with Honda
Corporation and over the years has been the most successful Indo-Japanese venture in
two-wheelers. The management has always laid special emphasis on development of a
strong network of ancillaries, the most critical aspect of the business. While earlier it did
not pay adequate attention towards investing in capex, it has redeemed itself by
increasing capacities in the past three years to cater to the increasing demand. This it has
done by largely relying on its internal accruals. The management remains a focused
player in the segment with no plans to diversify into anything else.

Consolidated Family Business

The Hero Honda Group is a strong family business - there is no other Group that has so
successfully managed to stay together for over 40 years. The system is to bring in any
new family member, coming of age, within the fold of the existing business or set him up
in a new business. The third generation is already actively involved in existing as well as
the new initiatives within the Group. The second and the third generations of the family,
aided by workers who typify the hardy spirit of the Punjab, are consolidating the Group’s
future with the same zeal.

Hero, a name synonymous with two wheelers in India is today a multi-unit, multi-
product, geographically diversified Group of companies. Through fully integrated
operations, the Munjals roll their own steel, make critical components such as free wheels
for their bicycles, and have the foresight to simultaneously diversify into myriad
ventures, like product designing, IT enabled services, finance and insurance, just to name
a few.

Like every success story, Hero's saga contains an element of spirit and enterprise; of
achievement through grit and determination, coupled with vision and meticulous
planning. Throughout its success trail, the Hero Group and its members have displayed
18
unwavering passion of setting higher standards for themselves and delivering simply the
best to their customers

The Hero Honda Group philosophy is: "To provide excellent transportation to the
common man at easily affordable prices and to provide total satisfaction in all its spheres
of activity." Thus apart from being customer-centric, the Hero Group also provides its
employees with a fine quality of life and its business associates with a total sense of
belonging.

"Engineering Satisfaction" is the prime motive of the Hero Group and it has become a
way of life and a part of the work culture of the Group. This is what drives the Group to
seek newer vistas, adopt faster technology and create quality driven products to the
utmost satisfaction of customers, partners, dealers and vendors.

Today the Hero Group has a number of accolades and achievements to its credit, yet
consumer requirements and newer technologies provide fresh challenges every day and at
Hero the wheels of progress continue to turn.

Business
HHML manufactures motorcycles with Honda technology. HHML is the market leader in
the 100cc segment. Motorcycles contributed to 92.3% of the total turnover in FY09 with
the rest coming in from sale of spare parts and accessories.

19
 HERO MOTO CORP

In December 2010, the board of directors of the Hero Honda Group had decided to
terminate the joint venture between Hero Group of India and Honda of Japan in a phased
manner. The Hero Group would buy out the 26% stake of the Honda in JV Hero Honda.

Under the joint venture Hero Group could not export to international markets (except
Nepal, Bangladesh and Sri Lanka) and the termination would mean that Hero Group can
now export. Since the beginning, the Hero Group relied on their Japanese partner Honda

20
for the technology in their bikes. So there are concerns that the Hero Group might not be
able to sustain the performance of the joint venture alone.

The Japanese auto maker will exit the joint venture through a series of off market
transactions by giving the Munjal family—that held a 26% stake in the company—an
additional 26%. Honda, which also has an independent fully owned two wheeler
subsidiary—Honda Motorcycle and Scooter India (HMSI)—will exit Hero Honda at a
discount and get over $1 billion for its stake. The discount will be between 30% and 50%
to the current value of Honda's stake as per the price of the stock after the market closed
on December 16, 2010.

The rising differences between the two partners gradually emerged as an irritant.
Differences had been brewing for a few years before the split over a variety of issues,
ranging from Honda's reluctance to fully and freely share technology with Hero (despite a
10-year technology tie-up that expires in 2014) as well as Indian partner's uneasiness over
high royalty payouts to the Japanese company. Another major irritant for Honda was the
refusal of Hero Honda (mainly managed by the Munjal family) to merge the company's
spare parts business with Honda's new fully owned subsidiary Hero Motorcycle and
Scooter India(HMSI).

As per the arrangement, it will be a two-leg deal. In the first part, the Munjal family, led
by Brijmohan Lal Munjal group, will form an overseas-incorporated special purpose
vehicle (SPV) to buy out Honda's entire stake, which will be backed by bridge loans. This
SPV would eventually be thrown open for private equity participation and those in the
fray include Warburg Pincus, Kohlberg Kravis Roberts (KKR), TPG, Bain Capital,
and Carlyle Group.

Honda will continue to provide technology to Hero Honda motorbikes until 2014 for
existing as well as future models.

21
Formation of Hero MotoCorp

The name of the company was changed from Hero Honda Motors Limited to Hero
MotoCorp Limited on 29 July 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 no1800 266 0018w export to Latin America, Africa and West
Asia. Hero is free to use any vendor for its components instead of just Honda-approved
vendors.

On 21 April 2014, Hero MotoCorp announced their plan on a US$40 million joint
venture with Bangladesh's Nitol Niloy Group in the next five years also hero updated its
100cc engine range in 2014 for 100cc bikes except hero dawn.

In July 2013, HMC acquired 49.2% shareholding in Erik Buell Racing, a motorcycle
sport company which produced street and racing motorcycles based in East Troy,
Wisconsin, United States. EBR filed for bankruptcy in 2015 and Hero Motocorp proceed
to acquire certain assets for US$2.8 million.

 2010—New Models of Hero Honda motorcycle Splendor Pro and New Hero
Honda motorcycle Hunk and New Hero Honda Motorcycle Super Splendor launched
 2011—New Models of Hero Honda motorcycles Glamour, Glamour FI, CBZ
Xtreme, Karizma launched. New licensing arrangement signed between Hero and
Honda. In August Hero and Honda parted company, thus forming Hero MotoCorp
and Honda moving out of the Hero Honda joint venture. In November, Hero
launched its first ever Off Road Bike Named Hero "Impulse".
 2012—New Models of Hero Motocorp Maestro the Musculine scooter and Ignitor
the young generation bike were launched
 2013—Hero MotoCorp unveiled line-up of 15 updated products including
Karizma R, ZMR, Xtreme, Pleasure, Splendor Pro, Splendor iSmart, HF Deluxe
22
 ECO, Hero Motocorp SuperSplendor, Passion Pro and Xpro, Glamour and Glamour
FI etc. It also introduced three new technologies- Engine Immobilizer in new Xtreme,
Integrated Braking System (IBS) in new Pleasure and i3S (Idle Stop and Start
System) in new Splendor iSmart [13]
 2014—Hero MotoCorp Launched Splendor Pro Classic, Xtreme Sports and new
models of Karizma ZMR, Karizma R, Maestro and Pleasure.
 2014—In October 2014, Hero updated its 100cc engine range on Passion Pro and
Splendor Pro Classic
 2014—Hero invests $25 million into American motorcycle manufacturer
EBR(Erik Buell Racing)
 2016-New Models of Hero Motocorp Duet the Musculine scooter were launched

23
 Ancillaries
An integral part of the Group strategy of doing business differently was providing
support to ancillary units. There are over 300 ancillary units today, whose production is
dedicated to Hero's requirements and also a large number of other vendors, which include
some of the better-known companies in the automotive segment.

The Munjals have gone much beyond the conventional definition of ancillarisation,
making it a point to extend technical and managerial support to these ancillaries. These
ancillary units are manned by friends, relatives, ex-employees or close associates of the
Munjal family since the Group patriarch, Mr. Brijmohan Lall, "… never wanted to march
alone."

Mission

Hero MotoCorp's mission is to become a global enterprise fulfilling its customers' needs
and aspirations for mobility, setting benchmarks in technology, styling and quality so that
it converts its customers into its brand advocates. The company will provide an engaging
environment for its people to perform to their true potential. It will continue its focus on

value creation and enduring relationships with its partners.

Vision

Hero Honda began with a simple vision - the vision of a mobile and an empowered India,

powered by its two wheelers. Hero MotoCorp Ltd., company's new identity, reflects its

commitment towards providing world class mobility solutions with renewed focus on
expanding company's footprint in the global arena.

Hero is a world leader because of its excellent manpower, proven management, extensive
dealer network, efficient supply chain and world-class products with cutting edge

24
technology from Honda Motor Company, Japan. The teamwork and commitment are
manifested in the highest level of customer satisfaction, and this goes a long way towards
reinforcing its leadership.

Strategy

Hero MotoCorp's key strategies are to build a robust product portfolio across categories,

explore growth opportunities globally, continuously improve its operational efficiency,

aggressively expand its reach to customers, continue to invest in brand building activities

and ensure customer and shareholder delight.

25
 Areas of Management

Hero Group > Growth Models

The Hero Group has done business differently right from the start and that is what has
helped them to achieve break-through in the competitive two-wheeler market. The
Group's low key, but focused, style of management has earned the company plaudits
amidst investors, employees, vendors and dealers, as also worldwide recognition.

Inventory Control

The Hero Group through the Hero Cycles Division was the first to introduce the concept
of just-in-time inventory. The Group boasts of superb operational efficiencies. Every
assembly line worker operates two machines simultaneously to save time and improve
productivity. The fact that most of the machines are either developed or fabricated in-
house, has resulted in low inventory levels.

Purchase Policy

80% of the components in the manufacturing of a bike today are outsourced to the
vendors. Those vendors are located in the vicinity of the plants and company is moving
towards full employment of “Just In Time” policy wherein the components arrive, just
before they are required to be installed on the bikes, resulting in substantial savings in
terms of inventory costs. Most vendors supply the components & HMCL shares a very
nice relationship with the vendors.

In HMCL, the just-in-time inventory principle has been working since the beginning of
production in the unit and is functional even till date. The raw material vendors bring in
the goods get paid instantly and by the end of the day the finished product is rolled out of
the factory. This is the Japanese style of production and in India; Hero is probably the
only company to have mastered the art of the just-in-time inventory principle.

26
 Employee Policy

The philosophy with regard to labour management is "Hero is growing, grow with Hero.

When it comes to workers' benefits, the Hero Group is known for providing facilities,
further ahead of the industry norms. Long before other companies did so, Hero was
giving its employees a uniform allowance, as well as House Rent Allowance (HRA) and
Leave Travel Allowance (LTA). Extra benefits took the form of medical check-ups, not
just for workers, but also for the immediate family members.

Financial Planning

The Hero Group benefits from the Group Chairman's financial acumen and his grasp on
technology, manufacturing and marketing. In HeroMotoCorp Limited, the focus is on
financial and raw material management and a low employee turnover.

Diversification

In a major initiative towards diversification into fast growth areas, the BML Munjal-led
Hero Group has divested 7 million equity shares in its flagship company Hero MotoCorp
Ltd . Following the sale, the over US$5 billion Hero Group still holds a significant stake
of over 36% in the company.
The Group will use the sale proceeds to fund new growth avenues available through the
Government’s “Make in India” initiative.
The Prime Minister’s “Make in India” platform has opened up new vistas, some in very
high growth areas, and the Hero Group - with its experience, scale of operations and
brand equity - is uniquely placed to leverage these emerging opportunities.
At the same time, the Hero Group remains strongly committed to its core two-wheeler
business, where it sees enormous potential, both in India and overseas.
Hero MotoCorp has successfully consolidated its market leadership in the highly-
competitive domestic market in India, even as it expands its global footprint across Asia,
Africa and Central and South America.
Hero MotoCorp sold a record 6.64 million two-wheelers in the calendar year 2014,
including over 200,000 unit sales in its global market.
27
 Expansion plans
\

As part of its global expansion drive, two-wheeler major Hero MotoCorp Ltd plans to set
up manufacturing facilities in Mexico, Argentina and Brazil and expects to utilise the
new Colombian plant as a hub to export to nearby countries.

“Going forward in terms of manufacturing facility, we are looking at some other

countries in the region like Mexico, Argentina and Brazil.”I.

Hero MotoCorp’s first global manufacturing facility at Villa Rica in Colombia, entailing
a project investment of $70 million.With the commencement of operations at Colombia
plant, the New Delhi-headquartered Hero MotoCorp has become the first Indian two-
wheeler manufacturer to set-up a manufacturing unit in Latin America.

Hero was looking at for “Right now there are no manufacturing plans there, but we could
look at Africa as a region where Nigeria is one possibility.” Nigeria is the largest two-
wheeler market in Africa.

On products that the company would make at the Colombian facility, “It is starting with
our entry-level product to the current biggest engine that we produce - the Karizma. So
it’s a range from entry to (top-end).” The company has set a target of selling 1.2 million
two-wheelers in global markets by the year 2020.

To meet this target, Hero is aiming to be present in 50 countries by that time.

Hero is developing together with EBR would now be completed by itself in India.

Hero MotoCorp sells its products in 24 countries including Sri Lanka, Nepal,
Bangladesh, Egypt and Turkey, as also in Peru, Ecuador and Colombia in South America,
among others. In partnership with its local distributors, HMCL has also established
assembly units in Kenya, Tanzania and Uganda in East Africa.

With another overseas manufacturing plant coming up in Bangladesh, the company is fast
building up a global manufacturing base to cater to growing demand for its products in
the international markets.

28
 Outlook
With strong brand equity of its fuel-efficient vehicles, a wide range of motorcycles, and
the backing of the global HERO leader , Hero is well placed in the sector. With the
consumer shift towards motorcycles not likely to abate in the foreseeable future, growth
in the motorcycle segment seems set to continue in FY15. However, competition is slated
to rise in the segment what with players like Kinetic Motors and LML planning to make a
foray in the segment. HERO Moto Corp, too, has line up a few models with which to
challenge the ruling player. On the other hand, customers have become more discerning
and weigh all options (price, durability, aesthetics etc) before choosing a bike. However,
with adequate manufacturing capacities, high productivity levels, wide product portfolio
and a leading world player as its partner, Hero is well placed to reach its set target of 1mn
units. But all said and done, a likely imponderable in the long term will be the intended
entry of Honda in the two-wheeler market two years from now.

Earnings sensitivity factors

1 Demand growth in 100cc motor cycles, historically, has been linked to sector
growth, which in turn is dependent on the economic conditions.

2 Success in new product launches and widening of product range to meet

competition.

3 The escalating cost of Raw material prices of steel, aluminum, tyres etc.have
affected the earnings of hero moto corp.

29
 Background
The Hero group of the Munjals entered into a technical collaboration agreement with the
world’s largest two-wheeler manufacturer Honda Motors of Japan to set up HHML.
HHML is the only Honda venture outside Japan to produce Im vehicles in less than a
decade. That too, has been achieved with just one model. Munjals also have another
company Majestic Auto Ltd. (MAL) which manufactures indigenous mopeds. MAL has
entered into a technical agreement with BMW German for heavy-duty motorcycles.
HHML has renewed the agreement with Honda in early 1995 for 10 years. The renewed
agreement provides for a number of new contemporary Honda models to be
manufactured at the new plant at Gurgaon, set up in FY97.

Group
HMCL belongs to the Munjal group. The group has been founded by Brijmohanlal
Munjal and his three brothers in 1951. It began operations with a manufacturing unit for
bicycle components. Over the years, the group has become the largest manufacturer of
bicycles in the world. Besides Hero , there are 4 other major companies in the group,
namely the following:

1 Hero Cycles (1951), which is India’s leading bicycle manufacturer and exporter.

2 Gujarat Cycles (1989).

3 Majestic Auto (1978), which is one of the leading manufacturer and exporter of
mopeds. It has collaboration with Steyr Daimler Puch of Austria. It has also
entered into a technical collaboration agreement with BMW Germany to
manufacture heavy duty 650cc motor cycles.

4 Munjal-Showa (1985), which is one of the leading manufacturers of shock

absorbers, and other automotive components

30
 Plant locations
HMCL’s, plant is located at Dharuhera, Haryana near Delhi. Its rated capacity is being
increased to 0.375mn nos pa. HMCL has set up a new plant at Gurgaon, 30 kms away
from the existing plant. The new plant has a capacity of 0.15mn no’s

31
CURRENT POSITIONING OF HERO THROUGH
SWOTANALYSIS

STRENGTHS
 Ability to understand customer’s needs and wants

 Recognized and established brand name

 Effective advertising capability

 Cost Competitiveness in terms of Labor and Raw Material

 Established Manufacturing Base .

 Economies of Scale due to Domestic Market.

WEAKNESSES

 R&D is not close to the Hero manufacturing plant

 Hero is vulnerable in the joint venture because Honda Motor Company

has so much power

 Perception about Quality

32
 OPPORTUNITIES

HERO has ample of opportunity to expand its business. With the wide range in products,
features and different price range for different people, it has an advantage over the
competitors around. With the opportunity like ‘Automobile penetration in India’ being at the
peak time, HERO has an opportunity to increase its sales as well as the market share. As the
standard of living in India has increased the purchasing power of the people as increased as
well, so HERO has to target right customer at right time to gain the most out of the situation.

 Huge Export Markets (Europe ,America ,Africa etc) for Indian two wheelers

 Global expansion into the Caribbean and Central America

 Expansion of target market (include women)

Threats
HERO has many threats to tackle to maintain its position as market leader. The threats
like emerging of other Bikes companies in the market. The companies like TVS,
HONDA, BAJAJetc. These companies have come to the stand of tough competition with
HERO in the field of Bikes.

1 China, Malaysia, Thailand etc.

2 Growing of four wheeler segment is also a big threat to the two wheeler
segment.

3 Looking mainly at the competition that would take away HEROHONDA

market share.

4 Honda Motorcycles and Scooters India can take away market share and
cause joint venture to go sour

5 Bajaj Motors is a strong competitor

33
MARKETING MIX OF HERO

34
 PRICE
Hero adopt a highly systematized and efficient penetration strategy. Accordingly,
products can, in keeping with the demands of the marketing climate at large that it
operates in, be brought down to low prices. But as the present state of its brand as well as
its consistently healthy performance shows the company has not been compelled to adopt
this strategy with a view to securing the largest market share. This strategy holds
importance only when the product can be put under the fabric ‘price-sensitive’, there
appears to be considerable scope for strong competition, and the company’s unit
manufacturing costs go down within the company’s scale of production and accumulated
manufacturing experience.

The prices of Hero Honda are quite high in comparison to the prices of products of other
companies, i.e. CBZ-Xtreme and Passion-Pro, its products 76,000 and 53,000
respectively. It is because of the high quality of its products that the company has not
only maintained but enhanced its sale in spite of high prices of its products.

Now the brand name of Hero Honda is well established in the market, and this adds
another dimension to the booming success of its products.

HERO PRODUCTS

 Pleasure

 Maestro

 Maestro Edge

 Duet

 HF Dawn

 HF Deluxe

 HF Deluxe Eco

 Splendor+

35
 Splendor Pro

 Splendor Pro Classic

 Splendor iSmart

 Splendor ismart 110cc

 Passion Pro

 Passion Pro TR

 Passion XPro

 Super Splendor

 Glamour

 Glamour FI

 Ignitor

 Achiever

 Impulse

 Hunk

 Xtreme (Thriller in LATAM)

 Xtreme Sports (Thriller Sports in LATAM)

 Karizma R

 Karizma ZMR

36
 PLACE

Dealer Network

At Hero essentially they have a completely customer-driven approach. A nation-wide

dealer network comprising of over 3,500 bike dealers, 350 dealers for mopeds and 225
franchise holders for motorcycles, ensures convenient access to the Group's products
across the country.

Strong dealer company relationship with a deep sense of belonging to the Hero fraternity,
the Group's dealer network has catalyzed growth and acted as a strong bridge between the
customers and the Group.

Sales agents from Hero travels to all the corners of the country, visiting dealers and send
back daily postcards with information on the stock position that day, turnover, fresh
purchases, anticipated demand and also competitor action in the region.

There are more than 400 committed dealers & service outlets spread across the country.
The authorized workshop have well laid out standards for motorcycle servicing sorted by
fully equipped infrastructure in terms of quality precision instruments, pneumatic tools &
a team of highly trained service technicians.

Having your motorcycle serviced at an authorized workshop ensures highest standards of

service quality and reliability.

Hero stands out as one of the most reputed names in the two-wheeler industry. With its
newly launched brands such as CBZ-xtreme and passion-pro, as well as its ever soaring
sale, the company has earned an enormously vast niche for itself in the Indian market.

The basic strategy of this company rests on its skilled, all-pervasive distribution network
spread out in every corner of the country. It has short rooms in almost all the big and
small cities over the landscape of India.

LikeHERO MOTO CORP, its products have got a considerable grasp over the grassroots.
However, inspite of the fact that it is a comparatively new players in the booming

37
oligopolitic two-wheeler market, the range of its popularity and accessibility to the
masses has been enormous. This has been largely possible due to the efficient corporation
and assistance, it has been able to drive from its distribution.

PROMOTION
As one of the two-wheeler giants of India, the company is poised to take new strides in
order to promote its products like CBZ-xtreme & Sport and Passion-pro.

The essential objective of its promotion strategies is to bring to products to host of

consumers with ease, perfection and at comparatively low and affordable costs.
Distinguished in its fuel efficiency attributes, the company is willing to target those
consumers particularly who are likely to be swept off their fact by price factors and more
appearance.

38
 Promotion Strategies

BRAND AMBASSADORS - HERO MOTO CORP signed Indian hockey

captain Sardar Singh and Bollywood actor Alia Bhatt as new brand
ambassadors.

For the first time, Hero signed a regional celebrity (Allu Arjun) as brand
ambassador for one of its prominent brands (Glamour) in the deluxe
segment. Allu Arjun has a good fan following in southern states and is a
well-known face in the rest of the country. A region specific campaign
helped Hero to further strengthen its brand in the southern and eastern
regions.

39
 PRODUCT

The Hero Honda models is being increasingly used by youngsters / bachelors in urban
areas and by rural folk as a study means of personal transportation. It’s models attracts
youngsters and hi higher income group

HF-Deluxe

40
CBZ XTERME

SPLENDOR PRO

PASSION PRO

41
 CBZ XTERME

HERO KARIZMA

42
 GLAMOUR

I SMART

KARIZMA-ZMR

The company offers the following products:

1 HF-dawn
2 HF-deluxe
3 Super Splendor

43
 4 Splendor NXG
5 Splendor Pro
6 CBZ-XTREME Sports
7 Passion PRO
8 CBZ-XTREME
9 Hunk
10 KARIZMA-ZMR
11 Pleasure(scooter)

Address:

Registered & Corporate office:

HERO MOTO CORP LIMITED

34 Community Centre, Basant Lok

Vasant Vihar,

New Delhi – 110057

Tel: 011 26142451 / 26144121

Fax: 011 26143321/ 26143198 / 26141830 / 26152453 / 26152132

URL:www.herohonda.com

44
 Strategic Innovations

The strategies of Hero involve:

1 Process control quality

2 Self-inspection

3 Defect prevention through

4 Not to receive defective parts

5 Not to produce defective parts

6 Repenting the human potential though

7 Quality circles

45
 COMPETITOR’S ANALYSIS

BAJAJ GROUP

Profile of the company

Bajaj Auto Ltd (BAJAJ), the largest two and three wheeler manufacturer in the country,
has a dominating 60% market share in motor cycle, 27% in scooters, 7% in mopeds and a
leading 86% market share in three-wheelers. While it still remains a leader in the scooter
segment, it is well behind Hero Honda in the motorcycle segment. In mopeds
scooterettes, it is the number two player after TVS Suzuki. The company has a wide array
of models both in the two-stroke and four-stroke configurations. However, with the
implementation of the latest emission norms, it is slowly moving away from two-stroke
vehicles and converting them to four-stroke ones. With customer preference having
shifted away from scooters towards motorcycles,HERO has had not the best of times in
the past year or so.
46
The Indian two wheeler sector is the largest in terms of volumes among all the segments
in the automobile industry. The segment can be further categorized into three main sub-
segments – scooters, motorcycles and mopeds. Lately, however, some products like
scooterettes and step-through have been introduced in the market, which have features of
more than one segment. Five players mainly dominate the two-wheeler segment. All
these companies have foreign collaborations mainly with well-known Japanese firms.
These ventures, set up in the mid 00s, suffered heavily due to a sharp depreciation in
rupee till the early 00s. All these players are now well established with about 95%
indigenisation.HEROMOTO, the local player with low cost advantage, dominates the
sector. All the existing players have been expanding capacities and widening their
product base to include 4-stroke vehicles, which conform to Euro environmental norms.

PRODUCT
Its main models are

1 Platina-100

2 Xcd-135 Dtsi
3 Discover-150 Dtsi
4 Discover-135 Dtsi
5 Pulsar 150 Dtsi
6 Pulsar 180 Dtsi
7 Pulsar 200 Dtsi
8 Pulsar 220 Dtsi
9 Avenger

The company is launching new products to keep face with the competitive market. Being
the market leader in the scooter industry the company wants to establish the same
position in the motorcycle market. The company attracts its models to lower income
group by its technical specifications.

47
SCOOTER

WAVE Bajaj Chetak 150

BIKE

BAJAJ-CT100 BAJAJ PULSAR 150-DTSi

48
 BAJAJ-PLATINA BAJAJ DISCOVER150-DTSi

BAJAJ-ELIMINATOR BAJAJ-AVENGER

49
 Yamaha Motor India Pvt. Ltd
Yamaha motors are amongst the most popular bike manufacturers in India. The company
has given some most successful bikes like RX100 to Indian roads and is a tough
competitor for other biking giants. A wide variety of models in all categories of
motorbikes, Yamaha is the all time great brands to rely upon. Presently 13 models are
available from Yamaha's garage in India

Yamaha Motor Company, founded as a motorcycle manufacturer on July 1, 1955, have

worked, since beginning, to build products that stand out for their quality wherever they
are sold. Over the years, the company has diversified into a number of areas of business.
In the year 1960, they began manufacturing powerboats and outboard motors.
Subsequently, they have made their proprietary engine and fiberglass-reinforced plastic
(FRP) technologies. Today, the company has extended their products from land to sea
and even into the skies, with manufacturing and business operations that include
motorcycles, PAS electro-hybrid bikes, marine and power products to automotive
engines, “intelligent” machinery and even unmanned helicopters.

Yamaha made its initial foray into India in 1985. Subsequently, it entered into a 50:50
joint venture with the Escorts Group in 1996. However, in August 2001, Yamaha
acquired its remaining stake as well, bringing the Indian operations under its complete
control as a 100% subsidiary of Yamaha Motor Co., Ltd, Japan.

50
The company pioneered the volume bike segment with the launch of its 100 cc 2-stroke
motorcycle RX 100. Since then, it has introduced an entire range of 2-stroke and 4-stroke
bikes in India. Presently, its product portfolio includes Crux (100cc), Alba (106cc) and
Gladiator (125cc).

India Yamaha Motor operates from its state-of-the-art-manufacturing units at Faridabad

in Haryana and Surajpur in Uttar Pradesh and produces motorcycles both for domestic
and export markets. With a strong workforce of 2000 employees, India Yamaha Motor is
highly customer-driven and has a countrywide network of over 400 dealers.

As an Environmentally sensitive organization, YMI goes with the concept of

“Environment-friendly technology” philosophy. It boasts of effluent treatment plant, rain
water – harvesting mechanism and a motivated forestation drive. They believe in taking
care of not only customers motoring needs but also the needs of future generations.

Segment & Brands of Yamaha

 Yamaha Alba
 Yamaha Crux
 Yamaha FZ 16
 Yamaha Gladiator
 Yamaha Gladiator SS/RS
 Yamaha Libero G5
 Yamaha MT 01
 Yamaha R15
 Yamaha SZ new
 Yamaha YBR new
 Yamaha YZFR

Yamaha traces its roots very deep into the Indian bike market. The Japanese auto giant is
one of the oldest motorcycle manufacturers in India. The two stroke, 100 cc, Yamaha
RX-100 was one of the first lightweight fuel economic Japanese motorbike models in

51
India. At present Yamaha has 13 motorcycles in its fleet including VMAX (1,679cc), MT
01 (1,670cc), YZF R1 (998cc), Fazer (153cc), FZ-S (153cc), FZ16 (153cc), YZF-R15
(150cc), Gladiator Type SS and RS (125cc), Gladiator Graffiti (125cc), G5 (106cc), Alba
(106cc), LiberoG5 and Crux (106cc).

Yamaha made a very dominating debut in India in the year 1985. In 1996, it entered into
a 50:50 joint-venture with the Escorts Group. In August 2001, Yamaha acquired its
remaining stake becoming a 100% subsidiary of Yamaha Motor Co., Ltd, Japan (YMC).
In 2008, Mitsui & Co., Ltd. entered into an agreement with YMC to become a joint
investor in the motorcycle manufacturing company "India Yamaha Motor Private
Limited (IYM).

The company's manufacturing facilities in India comprises of 2 state-of-the-art plants.

One at Faridabad (Haryana) and the other at Surajpur (Uttar Pradesh). The infrastructure
of the two plants support productions of motorcycles and it's parts for both, the domestic
as well as oversees market.

The company's manufacturing facilities in India comprises of 2 state-of-the-art plants.

One at Faridabad (Haryana) and the other at Surajpur (Uttar Pradesh). The infrastructure
of the two plants support productions of motorcycles and it's parts for both, the domestic
as well as oversees market.

Corporate Office:

Yamaha Motor India Pvt Ltd,

A-3, Surajpur Ind. Area
Noida Dadri Road,
Surajpur – 201 306.
Tel: (120)2351193, 2351194
Fax: (120)2350685

http://www.yamaha-motor-india.com

52
TVS Motor Company is the third largest two-wheeler manufacturer in India and one
among the top ten in the world, with annual turnover of more than USD 1 billion in
2008-2009, and is the flagship company of the USD 4 billion TVS Group.

TVS Motor Company, the third largest two wheeler manufacturer in India is a part of
USD 4.00 Billion TVS Group and is engaged in the business of two wheelers,
automobile component manufacturing and retailing of various brands in India. The
company manufacturers an entire range of two-wheelers including motorcycles,
scooters and mopeds, offering a complete portfolio from the entry level right up to the
premium segment. The company also has product offerings for the three-wheeler
industry.

TVS Motor Company has international presence in more than 50 countries in Asian,
African and Latin American Continents and will enter more international markets
during the course of the year. In India, the company functions through a strong sales
and service network consisting over 490 authorised main dealerships, over 1800
authorised service centers and other certified service points

Company Flashback
TVS Motor Company Limited is the flagship company of TVS Group, the USD 2.2
billion group. The Group is the third largest two-wheeler manufacturer in India and
globally among the top ten, with an annual turnover of over USD 650 million.

Currently, the group has more than 30 companies and employs over 40,000 people
worldwide. With steady growth, expansion and diversification, it commands a strong
presence in the manufacturing of two-wheelers, auto components and computer
peripherals. They also have vibrant businesses in the distribution of heavy commercial
vehicles (HCV) passenger cars, finance and insurance.

53
1980 India's first 2 seater 50cc Moped TVS 50, launched in Aug.

1984 First Indian Company to introduce 100cc Indo-Japanese

motorcycles in Sept.

1994 Launched first indigenous Scooterette (sub-100 cc variomatic

scooters), TVS Scooty in June.

1996 Introduced first catalytic converter enabled motorcycle, the

110cc Shogun in Dec.

1997 Launched India's first 5-speed motorcycle, the Shaolin in Oct.

2000 Launched TVS Fiero, India's first 150 cc, 4 stroke motorcycle in
April.

2001 Launched TVS Victor, 4-stroke 110 cc motorcycle, in August,

India's first fully indigenously designed and manufactured
motorcycle.

2004 Launched TVS Centra in January, a world-class 4-stroke 100 cc

motorcycle with the revolutionary VT-i Engines for best-in-class
mileage.

Launched TVS Star in Sept, a 100 cc motorcycle which is ideal

for rough terrain.

1980 is the red letter year for TVS when India's first two-seater moped rolled out. It
ushered in an era of affordable personal transportation.

Globally, TVS Motor Company is the first two-wheeler manufacturer to be honoured

with the hallmark of Japanese Quality - The Deming Prize for Total Quality
Management.

COMPANY BACKGROUND

54
 Product and Services:

The product portfolio of the company’s motorcycle segment comprises of the TVS Star, TVS
Flame and TVS Apache series, while scooters include the latest addition, TVS Scooty Streak,
TVS Scooty Pep series and TVS Scooty TeenZ Eelctric. Mopeds, namely the XL Super
series, complete the segment , the company this having a product offering in each segment of
the motorcycle industry. TVS Motor Company has also entered the three-wheeler market
with the TVS King, India’s first two stroke 200 cc autorickshaw that will come with an
electric start, launched in Petrol, LPG and CNG versions. TVS Motor Company has
manufacturing plants that conform to world-class quality standards at Hosur (near
Bangalore), Mysore & Himachal Pradesh. As part of its global operations, TVS Motor
Company has setup a manufacturing facility in Indonesia, which caters specifically to
Indonesian and other ASEAN markets.

Other Information:

The company is committed to achieving total customer satisfaction through excellence in

Total Quality Management (TQM) and continuously strives to give the customer best value
for money, across all its products. The Deming Award from JUSE, which the company won,
is proof of its commitment to achieve total customer satisfaction through excellence in Total
Quality Management. The company’s high quality R&D talent pool, comprising of over 400
engineers, employed in new product development and advanced engineering, is backed by
one of the most modern computer aided labs

Leading from the front, the CMD, Mr.Venu Srinivasan, has won many laurels for the
company. The JRD Tata Corporate, The Star of Asia award by Business Week, The Jamsheji
TATA Lifetime Quality Achievement Award, Emerging Corporate Giant - Times & Harvard
Business School Association

A bike for anyone

TVS Motor currently manufactures a wide range of two-wheelers from mopeds to

racing inspired motorcycles.
Motorcycles (Apache RTR 180, Flame DS 125, Flame, TVS Jive, StaR City, Sports)
Variomatic Scooters (TVS Wego, Scooty Streak, Scooty Pep+, Scooty Teenz)
Mopeds (TVS XL Super, TVS XL Heavy Duty)

55
 Penchant for Quality

The company has 4 plants - located at Hosur and Mysore in South India, in Himachal
Pradesh, North India and one at Indonesia. The company has a production capacity of
2.5 million units a year.

Innovation at the helm

TVS Motor's strength lies in design and development of
new products - the latest launch of 7 products on the same
day seen as a first in automotive history. We at TVS deliver
total customer satisfaction by anticipating customer need
and presenting quality vehicles at the right time and at the
right price. The customer and his ever changing need is our
continuous source of inspiration.

15 million smiles on the Road

TVS has always stood for innovative, easy to handle, environment friendly products,
backed by reliable customer service.

No wonder, then, that our 15 million customers on the road have a reason to smile.

It’s main models are:-

TVS-Apache RTR
TVS Fiero FX
TVS STAR SPORT
TVS VICTOR EDGE
TVS STAR
TVS STAR CITY
TVS SCOOTY TEENZ
TVS SCOOTY PEP

TVS Motor Company Limited, part of the TVS Group, is one of India's leading two-
wheeler manufacturers. With a turnover of over Rs.1800 crores, the Company
manufactures a wide range of motorcycles, scooters, mopeds and scooterettes. Little
wonder, it boasts of more than 5 million happy customers.

It has a strong sales and service network of 430 Authorized Dealerships, 1018 Authorized
Service Centers and over 864 Certified Service Points, TVS is growing from strength to
strength.
56
TVS’s heavy reliance on few models like ‘star’, ‘apache’ and ‘Scooty pep’ for growth
and absence of models in the entry level segment would mean a slower growth in its
market share in the medium-term.

The apache RTR and Scooty Pep both had been designed to set new standards in style
and performance as also convenience.

TVS Motor Company Limited manufactures and sells two-wheelers in India. Its products
include motorcycles, scooters, and mopeds. The company markets its products under the
TVS Apache RTR, TVS XL Super, TVS XL Super HD, TVS Fiero F2, TVS Fiero FX,
TVS Scooty PEP PLUS, TVS Scooty Teenz, TVS Victor EDGE, TVS Victor GLX, TVS
Victor GX, StaR Sport, TVS Star, and TVS Star City names

57
Honda Motor Co., Ltd. (Honda) develops, produces and manufactures a variety of motor
products, ranging from small general-purpose engines and scooters to specialty sports
cars. Its business segments are the motorcycle business, automobile business, financial
services business, and power product and other businesses. Honda produces a range of
motorcycles, ranging from the 50 cubic centimeters class to the 1,800 cubic centimeters
class in cylinder displacement. The Company’s automobiles use gasoline engines of
three, four or six cylinder, diesel engines and gasoline-electric hybrid systems. Honda
also offers alternative fuel-powered vehicles, such as natural gas, ethanol and fuel cell
vehicles. Honda offers a variety of financial services to its customers and dealers through
finance subsidiaries. Honda manufactures a variety of power products, including tillers,
portable generators, general-purpose engines and grass cutters. Honda conducts its
operations in Japan and worldwide.

Honda Motor Co., Ltd. operates under the basic principles of "Respect for the Individual"
and "The Three Joys" — commonly expressed as The Joy of Buying, The Joy of Selling
and The Joy of Creating. "Respect for the Individual" reflects our desire to respect the
unique character and ability of each individual person, trusting each other as equal
partners in order to do our best in every situation. Based on this, "The Three Joys"
expresses our belief and desire that each person working in, or coming into contact with
our company, directly or through or products, should share a sense of joy through that
experience. In line with these basic principles, since its establishment in 1948, Honda has
remained on the leading edge by creating new value and providing products of the
highest quality at a reasonable price, for worldwide customer satisfaction. In addition, the
Company has conducted its activities with a commitment to protecting the environment
and enhancing safety in a mobile society.

58
The Company has grown to become the world's largest motorcycle manufacturer and one
of the leading automakers. With a global network of 492* subsidiaries and affiliates
accounted for under the equity method, Honda develops, manufactures and markets a
wide variety of products, ranging from small general-purpose engines and scooters to
specialty sports cars, to earn the Company an outstanding reputation from customers
worldwide.

It’s main models are

 Honda Unicorn

 Honda Twister

 Honda Activa

 Honda Shine

 Honda Unicorn Disk brake

 Honda Aviator

 Honda Dio

59
 RESEARCH

METHODOLOGY

60
 RESEARCH METHODOLOGY

Research methodology is considered as the nerve of the project. Without a proper well-
organized research plan, it is impossible to complete the project and reach to any conclusion.
The project was based on the survey plan. The main objective of survey was to collect
appropriate data, which work as a base for drawing conclusion and getting result.

Therefore, research methodology is the way to systematically solve the research problem.
Research methodology not only talks of the methods but also logic behind the methods used
in the context of a research study and it explains why a particular method has been used in
the preference of the other.

The methodology adopted for eliciting the data required for the study was survey method.
It is the overall pattern or framework of the project that will dictate as to what information is
to be collected, from which sources and by what procedures.

PROBLEM STATEMENT

The principle cause behind this project is to know that to what level customers are
enjoying and aware of HERO Bikes offered by the company and what further improvement
can be done in future in this area so as to get brand awareness.

This was studied by understanding marketing potential of Hero in college students and
an analyzed of the data collected was carried out so as to know the preferences of the
respondents.

This was helpful to predict the prospective sales of HERO Bikes and the level of
competition faced from other key players

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 DEFINITION OF RESEARCH

Research in common parlance refers to a search for knowledge. One can also define
research as scientific and systematic search for pertinent information on specific topic.

PROCEDURE OF MARKETING RESEARCH WHICH

USED BY ME IN MY RESEARCH:-

62
 RESEARCH METHOD / DESIGN

DESCRIPTIVE RESEASRCH

Research design is important primarily because of the increased complexity in the market
as well as marketing approaches available to the researchers. In fact, it is the key to the
evolution of successful marketing strategies and programmers. It is an important tool to
study buyer’s behavior, consumption pattern, brand loyalty, and focus market changes. A
research design specifies the methods and procedures for conducting a particular study.
According to Kerlinger, “Research Design is a plan, conceptual structure, and strategy of
investigation conceived as to obtain answers to research questions and to control
variance. The General study was converged as a specific study for HERO . The study
was initiated to find out the customer profile, brand perception and cross preference
among HERO and Competitor brands.

Our approach to the research design tasks went through the following tasks.

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 The Sampling Design-Process

Users of Two wheelers: Male, College

Define the population going students who are pursuing
professional course like MBA, B.Tech
Age 18-25

Research Design Descriptive research design

Specify Sample Design Non Probability Sampling

Select Sampling Technique(s) Convenience Sampling

Determine the Sample Unit Professional, Private college studentss

Select the Sampling Frame Record of RTO office (Two wheeler’s

registration)

Determine the Sample size 100 Respondents

Select the Sampling Area Hapur City (It is a tensile & of Dist.Gzb)

Execute the Sampling Process 11/06/10 to 25/07/10

64
 Information needed

 Measurement and scaling Procedures

 Appropriate Data collection

 Sampling Process and sample size

 Data Analyzed plan

These issues are addressed as the following

 Research Type- Descriptive Research

 Data Type- Primary and Secondary data

 Research Tools - Questionnaire, Enquiry

 Sampling Units-Professional Private college students

 Sample Size- 100 Respondent

 Sampling Method –Convenient Sampling

 Sample drawn from Hapur City

Research methodology must be classified on the basis of the major purpose of the
investigation. In this problem, description studies have been undertaken, as the objective of
the project is to conduct the market survey about the interactive services of Bikes.

65
 QUESTIONNAIRE DESIGN

Questionnaire design was the critical issue as the questionnaire reflects the survey
purpose .The questionnaire was meticulously prepared by identifying the various variables.
The same scale of yes/no and very important, important and not so important was used
throughout so as to make the respondent comfortable firstly a questionnaire was prepared and
few people were surveyed. After this survey we realized the flaws in the questionnaire and
then a modified questionnaire was prepared and people were surveyed on this modified
questionnaire.

DATA USED IN STUDY

Data collection is the important step after the sample is selected on which the survey is
being conducted. With data that is available in the hard form we converted that to electronic
form, to analyze the data using the MS Excel software. In the data collection customers were
approached during the working hours at dealers point.

The survey was conducted as a part of HERO project. Purpose of the survey was
explained and was asked whether they are interested to take part in the survey. Later
Questionnaire was handed over to them, and necessary instructions were given to complete
the questionnaire .The questionnaires were returned back after filing up on their convince,
While receiving the filled in questionnaire care was taken to check whether there are any
unfilled items in the questionnaire.

The information needed to further proceed in the project had been collected through
primary data and secondary data. The mode of collection was questionnaires for the dealers.

66
 PRIMARY DATA

Primary data consists of information collected for the specific purpose at hand for the
purpose of collecting primary data, survey research was used and all the dealers using
different brands and their competitors were contacted. Survey research is the approach best
suited gathering description.

SECONDARY DATA

The secondary data consists of information that already exists somewhere, having been
collected for another purpose. Any researcher begins the research work by first going through
the secondary data. Secondary data includes the information available with the company. It
may be the findings of research previously done in the field. Secondary data can also be
collected from magazines, newspapers, other surveys conducted by known research agencies
etc.

TOOLS &TECHNIQUES USED FOR ANALYZED

The instruments used for analyzed were pie charts, bar charts & perceptual maps.

Pie chart

A Pie chart is a circular chart divided into sectors illustrating relative magnitude or
frequencies in a pie chart the arc lane of each sector and its central angle and area is
proportional to the quantity represents.

67
 RESEARCH METHODOLOGY

Research Design -

The research undertaken was descriptive research in nature

Type of Sample Design -

The type of sampling that was carried out was Non- probability (convenient) sampling

due to limited resources available.

Research Approach -

There are two basic approaches to research. Quantitative and qualitative, my approaches

are both.

Source of Data Collection -

 Primary sources

 Secondary sources

Sample Size – 100 Respondents.

Sample Area - Hapur – Garh-Delhi, Goal Market, Railway road.

68
In short I summarized my whole research report:

Users of Two wheelers: Male, College

Define the population going students who are pursuing
professional course like MBA, B.Tech
Age 18-25

Research Design Descriptive research design

Specify Sample Design Non Probability Sampling

Select Sampling Technique(s) Convenience Sampling

Determine the Sample Unit Professional, Private college studentss

Select the Sampling Frame Record of RTO office (Two wheeler’s

registration)

Determine the Sample size 100 Respondents

Select the Sampling Area Hapur City (It is a tensile & of Dist.Gzb)

Execute the Sampling Process 11/06/10 to 25/07/10

69
 ANALYSIS &

INTERPRETATION

70
 DATA ANALYSIS & INTERPRETATION

Objective 1: To understand the competitive position of Hero.

1. Do you have any Motor cycles?

(i) Yes (ii) No

Configuration No.ofrespondents %age

Yes 96 96%

No 4 4%

Total 100 100%

INTERPRETATION

 Most of the i.e. 96% users have motorcycles and 4 % have not bike.

71
 2. If yes, Name and Company of the bike.

(i) Hero Moto Corp (ii) Bajaj (iii) TVS (iv) Other

Company No. of respondents %age

Hero Moto Corp 45 40%

Bajaj 30 32%

TVS 15 18%

Other 10 10%

Total 100 100%

%age

10% Hero Honda

40% Bajaj
Hero Moto Corp
18%
TVS

32% other

INTERPRETATION

According to my research it was analyzed that 40% of users have Hero Moto Corp, 32%
Bajaj, 18% TVS and 10 have other bikes in Hapur City.

72
3. You Prefer Bikes of

(i) 100cc (ii) 125cc

(iii) 150cc (IV) Above 150

Configuration No. of respondents %age

100cc 15 15%

125cc 20 20%

150cc 30 30%

Above 150cc 35 38%

Total 100 100%

%age

15%
30% 100cc
125cc
20%
150cc
Above 150cc
35%

INTERPRETATION

According to my research it was analyzed that 38% of users prefer above 150cc,
30%users prefer 150cc, 20% users prefer 125cc and 15% prefer 100cc bikes in Hapur
City.
73
 (4.) Users of Bikes.

Coding 1 2 3 4

Number 40 30 20 10

1: Hero Moto Corp 2: Bajaj

3: TVS 4: Others

4
21%
1
3 37%
17%

2
25%

INTERPRETATION

According to my research it was analyzed that 37% of users have Hero Moto Corp, 25%
Bajaj, 17% TVS and 21% have other bikes in Hapur City.

74
Objective 2: To understand the advantage and limitation of the
product

Coding 1 2 3 4

Number 48 32 6 14

1: Reliable 2:Fuelefficient
3: Poor 4: Can’t say

INTERPRETATION

To understand the advantage and result of Hero Moto Corp 40% respondent say it’s
reliable, 35% say fuel efficient, 5% say poor and 20% were unable to say something.

75
Objective 3: To study the customer’s acceptance of products.

Configuration No. of respondents %age

Splendor 30 30%

Passion 20 20%

Karizma 13 13%

Super-Splendor 12 12%

CBZ-XTREME 15 15%

CD-DAWN 10 10%

Total 100 100%

% age

10%
Splendor
30% Passion
15%
Karizma
Super-Splendor
12%
CBZ-XTREME
20% CD-DAWN
13%

INTERPRETATION

To analyzed about the most trusted bike of Hero Moto Corp 30% person say splendor,
20% passion, 13% Karizma &12% Super Splendor,15% say Cbz-xtreme,and 10% say
CD-Dawn bikes of Hero.
76
 6. What do you expect from two-wheeler manufacturer:-

(i) Consistency (ii) Reasonable up gradation

(iii) Fast up gradation (IV) can’t say

Configuration No. of respondents %age

Consistency 45 42%

Reasonable up gra 30 33%

Fast up gradation 15 15%

Can’t say 10 10%

Total 100 100%

%age

10%

Consistency
15% 42%
Reasonable up gradation
Fast up gradation
Can't say
33%

INTERPRETATION

To analyzed about customer accept from the manufacturer is 42% person say
consistency, 33% reasonable up gradation, 15% fast up gradation and 10% Can’t say
bikes of Hero Moto Corp.

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7.) The market leader according to users.

Coding 1 2 3 4

Number 45 35 15 15

1: Hero Moto Corp 2: Bajaj

3: TVS 4: Others

% age

10%

15% HEROHONDA
43%
BAJAJ Hero Moto Corp
TVS
OTHER

32%

INTERPRETATION

In Hapur City 43% person say Hero Moto Corp is the Market leader, 32% say Bajaj, 15%
say TVS and 10% say about others.

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 8. Which feature of the motorcycle you like the most

(a) Mileage (b) Pick-up (c) Maintenance (d) All of them

Company No.Of respondents %age

Mileage 22 28%

Pick-up 16 15%

Maintenance 24 22%

All of them 38 35%

Total 100 100%

Sales

28% Mileage
35%
Pick-up
Maintenance

15% All of them

22%

INTERPRETATION

 Most of the usersi.e.35 % are say that all of feature in the bike.

 28% users are say that customer like the most Mileage in the bike.

 15%users are saying that they like the most Pick-up in the bike.

 22% users are saying that. they like Maintenance in the bike.
79
 9. Would like to have your opinion on which Motorcycles performance is good

(i) Hero Moto Corp (ii) Bajaj

(iii) TVS (iv) Other

Description No. of respondents %age

Hero Moto Corp 48 48%
Bajaj 32 32%
TVS 13 13%
Other 7 7%
Total 100 100%

% age

7%
Hero Honda
13%
48% Bajaj Hero Moto Corp
TVS
32%
other

INTERPRETATION

The above graph shows the response level of users regarding the performance of

 48 % users are said Hero Moto Corp.

 32 % users are said Bajaj 13 % TVS and 7% other.
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10. Rank the Motorcycle manufacturing company.

1. Hero Moto Corp [ ] 2.Yamaha [ ]

3. Bajaj [ ] 4. Other [ ]

Description No. of respondents %age

Hero Moto Corp 42 42%

Bajaj 30 30%

TVS 18 18%

Other 10 10%

Total 100 100%

% age
10%

Hero Honda
18% 42%
Bajaj Hero Moto Corp
TVS
30%
other

INTERPRETATION

 Most of the usersi.e.42% is say that Hero Honda is the best manufacturing

company.

 30% users are saying that Bajaj is the best manufacturing company.

 15%users are saying that TVS is the best manufacturing company.

 10% users are other company is the best manufacturing company.

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FINDINGS

82
 FINDINGS

As per my survey, I received the following findings from the respondent-

 In my research report 37% of the two wheeler users have Hero Moto Copr bikes
in Hapur City.

 90% of the Students who are user of Hero Moto Corp never like to purchase
another brand’s bike in future.

 Bajaj is a strong competitor of Hero Moto Corp.

 Hero Honda bikes are Reliable as well as Fuel efficient then Bajaj.

 Splendor is a King of two wheelers in Hapur city.

 Youth like sporty bikes like – Karizma and Cbz-Xtreme.

 Mostly youth likes 150cc and more than 150cc bikes but daily user likes 100cc-
125cc bikes for fuel efficiency.

 Mostly user of the bike gives preference to fuel efficient bikes with cost
effectiveness.

 Hero Moto Corp really a market leader in Indian two wheeler market according to
the point of view of the Hapur city user.

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 LIMITATIONS

 Time duration for this project report was not sufficient. The duration of practical
training was just of six weeks
 Budget and finance are always been constraints in doing any project.
 Less involvement of respondent was also a limitation of my research.
 Respondents gave incomplete and incorrect answers.
 Geographical area was very small for any conclusion.
 Sample is collected from a limited part of whole universe that is not much
enough for satisfy results.

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 SUGGESTIONS

These are the following suggestions which are based on my discussion with the
respondent doing the survey-

 For sales promotion gifts should be given for the users.

 More schemes like “Seasonal Schemes” should be given to the retailers.

 Margin should be increased because competitors are giving more margins to

retailers.

 New look should be introduced time to time.

 Most of the youth like 150 cc bike so company should take care for this segment.

 Splendor is most trusted bike of Hero Moto Corp and giving a tough challenge to

Bajaj.

 Customer considers quality as their first preference, so the company should give
more stress on product looks & features.

 The Company should check the availability of service center for after-sales
service.

85
 CONCLUSION

The two-wheelers market has had a perceptible shift from a buyer’s market to a seller’s
market with a variety of choices. Players will have to compete on various fronts via
pricing, technology, product design, productivity, after sale service, marketing and
distribution. In the short term, market shares of individual manufacturers are going to be
sensitive to capacity, product acceptance, pricing and competitive pressures from other
manufacturers.

All the three segments, motorcycles, scooters and mopeds have witnessed capacity
additions in the last one year and it will continue in the upcoming period. Over this
period, only the motorcycle segment is expected witness higher demand vis-à-vis supply,
while the scooters and mopeds supply will outstrip demand.

As incomes grow and people feel the need to own a private means of transport, sales of
two-wheelers will rise. Penetration is expected to increase to approximately to more than
35.5% by 2015.

The motorcycle segment will continue to lead the demand for two-wheelers in the
coming years. Motorcycle sales are expected to increase by 30%yoy as compared to 1%
growth in the scooter market and 5% by moped sales respectively for the next two-years.

The four-stroke scooters will add new dimension to the two-wheeler segment in the
coming future. Perhaps, the moped segment will be the worst affected due to Y2K
emission norms applicable from April 2000 as not many of the present models confirm to
be there.

86
BIBLIOGRAPHY

87
 BIBLIOGRAPHY

In this project while finalizing and for analyzing quality problem in detail the following

books, magazines and websites have been referred.

Books Consulted -

 Kotler Philip – Marketing Management ( Pearson Education 12th Edition )

 Kothari C R – Research Methodology Methods & Techniques ( New Age

International Publishers, 2nd Edition, 2004 )

 Beri – Business Statics ( Tata Mc Graw Hill 2nd Edition)

Newspapers -

 Hindustan times

 Times of India

 The Hindu

 Financial Express

 Economics times

Websites

1 www.heromotocorp.com

2 www.wikipidea.com

3 www.indiainfoline.com

4 www.automobile.com

88
 ANNEXURE

Questionnaire for the survey of Motorbikes .

QUESTIONNAIRE

Dear sir/madam;

I am doing my dissertation research on “market potential of Hero Moto Corp on college

going students in Hapur City”

Kindly answer the following questions so that I can complete my research.

Name…………………………………………………………….. Age……………………

Profession……………………………………. Phone number…………………………….

Address…………………………………………………………………………………….

1. Do you have any bike?

(i) Yes (ii) No

2. If yes, Name and Company of the bike.

(i) Hero Moto corp (ii) Bajaj (iii) TVS (iv) other

3. You Prefer Bikes of

(i) 100cc (ii) 125cc

(iii) 150cc (iv) Above150

89
4. Users of Bikes.

1: Hero Moto Corp 2: Bajaj

3: TVS 4: Others

5.Result of Hero Bikes

(i) Reliable (ii) Fuel Efficient

(iii) Poor (iv) Can’t say

6.Most trusted brand of Hero

(i) Splendor (ii) Passion

(iii) Karizma (iv) Super-Splendor

7.The market leader according to users

(i) Hero Moto Corp (ii) Bajaj

(iii) TVS (iv) other

8.Which feature of the bike you like most

(i) Mileage (ii) Pick-up

(iii) Maintenance (iv) All of them

9.Your opinion which bike performance

is good

(i) Hero Moto Corp (ii) Bajaj

(iii) TVS (iv) other

90
 10.What do you expect from two

wheeler Manufacturer

(i)Consistency (ii)Reasonable up gradation

(iii)Fast up gradation (iv)Can’t say

11.Rank the bike manufacturing company

(i) Hero Moto Corp (ii) Bajaj

(iii) TVS (iv) other

Surveyed by: ………………………

Checked by: ………………………

(Signature)

91