CHAPTER 1
INTRODUCTION
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1. INTRODUCTION
1.1 GENERAL INTRODUCTION TO THE STUDY Two-Wheeler industry is one of the largest industries in the automobile sector of global market. Being the leader in product and process technologies in the manufacturing sector, it has been recognized as one of the drivers of economic growth. During the last decade, well¬-directed efforts have been made to provide a new look to the automobile policy for realizing the sector's full potential for the economy. The liberalization policies have led to continuous increase in competition which has ultimately resulted in modernization in line with the global standards as well as in substantial cut in prices. Aggressive marketing by the auto finance companies have also played a significant role in boosting automobile demand, especially from the population in the middle income group. Presently many international brands like Honda, Suzuki, etc. are competing with Indian brands such as Hero Honda, Bajaj, and T V S, Kinetic etc. to capture Indian markets. These aggressive marketing strategies have resulted in making the consumer the major key for success in the industry. Each product offering is now designed to meet and exceed the expectations of the consumer. But understanding consumer behaviour and knowing consumers is never simple. And it is more difficult that to understand what a consumer perceives about the product. Customers may say one thing but do another. They may not be in touch with their deeper motivations. They may respond to influences that change their minds at the last moment. Small companies such as a corner grocery store and huge corporations stand to profit from understanding how and why their consumers buy.
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.1.2 THEORETICAL BACKGROUND OF STUDY
1.2.1. Market
The term market may be considered as a convenient meeting place where buyers and sellers gather together for the exchange of goods and services. Market means a group of people having unmet wants, purchasing power to make their demand effective and the will to spend their income to fulfill those wants. Today a market is equated with the total demand. The American marketing association defines a market, ‘as the aggregate demand of potential buyers for a product or service’. Under keen competition, a marketer wants to create or capture and retain the market i.e. customer demand through an appropriate marketing mix offered to a target market. The market offering i.e. supply must meet customer demand, which are unmet needs and desires. 1.2.2. Marketing
Marketing is a comprehensive term and it includes all resources and set of activities necessary to direct and facilitate the flow of goods and services form the producer to the consumer through the process of distribution. Businessmen regards marketing as a management function to plan promote and deliver products to the clients or customers. Human efforts, finance and management constitute the primary resources in marketing. We have twin activities, which are most significant in marketing: 1. Matching the product with demand i.e. customer needs and desires or the target market. 2. The transfer of ownership and possession at every stage in the flow of goods from the primary producer to the ultimate consumer.
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The American marketing association defines marketing as the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives.
1.2.3. Marketing Management
Marketing management represents an important functional area of business management efforts for the flow of goods and services from the producer to the consumers. It looks after the marketing system of the enterprise. It has to plan and develop the product on the basis of known customer demand. Marketing management may be defined as, ‘a process of management of marketing programs for accomplishing organizational goals and objectives’. Marketing management has to build up appropriate marketing plan or marketing mix to fulfill the set goals of the business. It has to formulate sound marketing policies and programs. It looks after their implementation and control. It has to implement marketing strategies, programs and campaigns. It must evaluate the effectiveness of each part of marketing mix and introduce necessary modifications to remove discrepancies in the actual execution of plans, policies, strategies, procedures and programs.
1.2.4. Marketing Mix
Marketing mix is the set of marketing tools the firm uses to pursue its marketing objectives in the target market. There are four elements or variables that make a marketing mix, they are: 1. Decisions on product or service. 4
2. Decisions on promotion
3. Decisions on price 4. Decisions on distribution. The four ingredients are closely interrelated. Under the systems approach the decision in one area affects action in the other. Marketing mix decisions constitute a large part of marketing management. According to Philip Kotler the term marketing mix is, ‘the set of controllable variables that the firm can use to influence the buyers response’. In the simplest manner, the basic marketing mix is the blending of four inputs or sub mixes, which form the core of the marketing system. Product mix decision refers to decisions on product variety, quality, design, features, brand image, packaging, sizes, services, warranties and returns. Price mix decision refers to decisions on the product list price, discounts, allowances, and payment period and credit terms available. Place mix decision refers to decisions on the channels, coverage, assortments, locations, inventory and transport of the market offering. Promotion mix decisions refer to decisions on the products advertising, sales promotion, sales force, public relations and direct marketing. Together they form the four P’s of marketing. 1.2.5. Marketing Planning
A marketing plan lies down in writing the marketing objectives, programs and policies to be adopted to achieve the set marketing objectives. Even before an integrated marketing plan is prepared the company shall prepare functional plan for each component of marketing mix. To have a sound marketing plan, every operation is to be examined and
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the problems are to be identified. The overall marketing plan should be linked to the distribution channel of the company to have effective marketing operations.
The marketing planning covers the preparation of functional plans, integration of this plan and the preparation of master marketing plan to serve the objective of the organization. Marketing planning is bound to get a better hold of environmental factor. 1.2.6. Marketing Research
Marketing research is the systematic gathering, recording and analyzing of the data about problems connected to the marketing of goods and services i.e. problems relating to product, price, promotion and distribution of the 4p’s of the marketing mix. Marketing research is concerned with all those factors, which have a direct impact upon the marketing of products and services. Marketing research has grown along with the expanded role of marketing as the focus for the business decision-making. Need of marketing research Marketing research is conducted for different purposes. They are: 1. To estimate the potential market for a new product. 2. To know the reactions of consumers to a product already existing in the market. 3. To find out the general marketing condition and tendencies. 4. To know the types of consumer buying and their buying motives. 5. To know the reactions of failure of a product already in the market. 6. To assess the strength and weakness of competitors. 1.2.7 Consumer A person who purchase or has the capacity to purchase the goods of service often for sale by the marketing firm in order to satisfy personal need and desires.
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1.2.8 Perception Perception is the sensing of stimuli external to the individual organism the act or process of comprehending the world in which the individual exists. Perception has been defined by social psychologists as the “Complex process” by which people select organize and interpret sensory stimulation in to a meaningful and coherent picture of the work.
1.2.9 Attitude Social psychologist defined attitude as an emotionalized predisposition to respond positively or negatively to an object. Predisposition can be thought of as categories of meaning stored in the memory of a person and are based on previous experience. Predisposing the person to have in an specific manner towards a certain objects in the environment. 1.2.9 Brand A brand is a name, term, symbol, design or a combination of them which is intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. 1.2.10. Consumer Behavior
The term consumer behavior can be defined, as, ‘the behavior that the consumer display in searching for, purchasing, using and evaluating products, services and ideas, which they expect, will satisfy their needs’. The study of consumer behavior enables marketers to understand and predict consumer behavior in the market place; it also promotes understanding of the role that consumption plays in the lives of individuals.
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Consumer behavior refers to all psychological social and physical behavior of potential consumers as they become aware of, evaluate, purchase and consume and tell others about products and services. It is the pattern of response of buyers to marketing offer of a firm. It refers to the process as how consumers make their purchase decisions. It is concerned with what, why, how much, when and from whom buyers make their purchases of goods and services. Model of consumer behavior
The starting point of understanding consumer behavior is the stimulus-response model. Marketing and environmental stimuli enter the buyer’s consciousness. The buyer’s characteristics and decision process lead to certain purchase decisions. The marketer’s task is to understand what happens in the buyer’s consciousness between the arrival of outside stimuli and the buyers purchase decisions. 1.2.11. Major Factors Influencing Consumer Behavior
Consumers buying behavior is influenced by cultural, social, personal and psychological factors. 1. Cultural Factors Cultural factors exert the broadest and deepest influence on consumer behavior. The roles played by the buyers culture, subculture and social class are particularly important.
o Culture
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Culture refers to that complex whole which includes in it knowledge, beliefs, art or anything man acquires as a member of society.
o Subculture
Each culture consists of smaller subcultures that provide more specific identification and socialization for their members. Sub cultures include nationalities, religions, racial groups and geographic regions.
o Social Class Virtually all-human societies exhibit social stratification. Stratification sometimes takes the form of a caste system where the members of different castes are reared for certain roles and cannot change their caste membership more frequently; stratification takes the form of social class.
2. Social Factors
o Reference Groups A persons reference groups consists of all the groups that have a direct or indirect influence on the person’s attitudes or behavior.
o Family The family is the most important consumer buying organization in the society and it constitutes the most influential primary reference group.
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o Roles and statuses A person participates in many groups, family, clubs, organizations etc. The person’s position in each group can be defined in terms of role and status. A role consists of the activities that a person is expected to perform. Each role carries a status.
3. Personal Factors
o Age and stage in the life cycle
People buy different goods and services over their lifetime. Taste in clothes, furniture and recreation is all age related. Consumption is shaped by the family life cycle. Marketers often choose life-cycle groups as their target market.
o Occupation and economic circumstances
Occupation also influences a person’s consumption pattern. Product choice is greatly affected by economic circumstances; spendable income, savings and assets, debts, borrowing power and attitude toward spending versus saving.
o Lifestyle
People from the same subculture, social class, and occupation may lead quite different lifestyles. A lifestyle is the person’s pattern of living in the world expressed in activities, interest’s ands opinions. Lifestyle portrays the world person interacting with his or her environment.
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o Personality and self concept
Each person has a distinct personality that influences buying behavior. It is that distinguishing psychological characteristics that lead to relatively consistent and enduring responses to environment. Related to personality is self-concept or self image. Marketers try to develop brand images that match target markets self image.
4. Psychological Factors
o Motivation
A person has many needs at a given time. A need becomes a motive when it is aroused to a sufficient level of intensity. A motive is a need that is sufficiently pressing to drive the person to act.
o Perception
Perception is the process by which an individual selects, organizes and interprets information inputs to create a meaningful picture of the world. How a, motivated person actually acts is influenced by his or her perceptions of the situation.
o Learning
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When people act they learn. Learning involves changes in an individual’s behavior arising from experience. Learning theory teaches marketers that they can build up demand for a product by associating it with strong drives, using motivating cues and positive reinforcement.
o Beliefs and attitudes
Through doing and learning, people acquire beliefs and attitudes. These in turn influence buying behavior. A belief is a descriptive thought that a person holds about something. The beliefs make up product and brand images and people act on these images. An attitude is a person enduring favorable or unfavorable evaluations, emotion feelings and action tendencies toward some object or idea. Thus a company would be well advised to fit product into existing attitudes rather than try and change people’s attitudes.
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CHAPTER 2
RESEARCH DESIGN
14
2. RESEARCH DESIGN
2.1 Introduction The two wheeler industry in India collectively produces 20 Lakh vehicles a year. Some players have managed to cut through consumer resistance with innovation, pricing and aggressive marketing. The competition level in the two wheeler industry is very high now. Many brands are fighting in the market for maximum share. They have to bring out a lot of differentiation among them. The major duty of the marketer is to know the reasons for preferring particular motor bike by the consumers. 2.2 Review of Literature The Customer Perception Report includes questions in four key areas, Expectations, Purchase Decisions, Customer Service, and Future Purchases. So the customer should be invited to participate in the survey. Setting realistic expectations during the sales process is a vital component of making happy customers. How a company sets and meets product and service expectations plays a pivotal role in fashioning customer opinions. How a company meets or exceeds expectations is measured in three important areas: product/service, support, and price. These three areas will be used to factor a score for the Expectations category. The results of the three questions will be used to factor an overall expectations perception score. The Purchase Decision category gives us a better understanding of how the customer perceives the purchase process. Two key areas for questions include an open ended question on why they purchased and a ratings question on their experience. The rating Question data will be used for the analysis of Purchase Decision category. The open ended responses from the “Why” questions will be used for product strengths analysis. The results of the purchase experience question will be used for the overall Purchase perception analysis. Customer service is one of the most important differentiations a company can have. For this report, customers will rate a company in three key areas: customer service, timeliness for problem resolution, and expertise. These three areas will be used to factor a score for the Customer Service category. 15
Purpose o of Literature Review
Literature review is one of the prime parts of every project. The very basic purpose of the literature review is to gain insight on the theoretical background of the research problem. It helps the researcher to gain strong theoretical basis of the problem under study and also help to explore whether any one has done research on the related issue. That’s why literature review helps one to find out the path of problem solving. In this regards the very basic purpose of the literature review in this dissertation is same as mentioned
2.3 Statement of the Problem Stepping down of Hero Honda’s position form a market leader to an ordinary market survivor has posed and alarming condition before the company. The present study would like to have an insight of consumer’s perception about the criteria of selecting the bikes. Especially to figure out whether it is brand driven or quality driven.
2.4 Need of the study Before five years Hero Honda was the market leader in motor bike industry in India. But in now a day they are losing their grip in motor bike industry, none of their bike except ‘Splendor’ became a success. And the competitors like Bajaj and TVS has taken advantage of this. There is no doubt that the companies market share is falling down. So this study will help to understand and identify what the consumer feels or perceives about Hero Honda motor bikes. This will help the marketer to identify which all are the factors that a consumer looks in to when he selects a particular bike. And also explains how a consumer selects and interprets the qualities of bike that Hero Honda offers.
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2.5 Objectives of the Study
1) To analyze consumer perception towards Hero Honda motor bikes 2) To get feed back on what consumer expects from Hero Honda 3) To analyze consumer perception towards services offered by Hero Honda and performance of the motor cycle 2.6 Methodology The research will be done through survey method. The collection of data will be done through questionnaire, interview and related websites The sample size taken for this research is 100 customers those who having Hero Honda motor bikes. The area of this survey consist of Bangalore city The collection of data will be done with the help of a structured questionnaire. The designing of questionnaire needs precision and classification of the subject, so that the respondents can easily understand the question and can answer it sincerely and correctly. 2.7 Sources of Data Primary data:Primary data consists of original information for the specific purpose at hand. It is first hand information for the direct users of respondents. The tools used to collect the data may vary and can be collected through various methods like questionnaire, personal interview Secondary data:Secondary data is the data which is already been collected and assembled. This data is available with the companies or firms and it can be collected from newspapers, periodicals, magazines, websites etc.
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Sample Design Sample The sample size taken for this research is 100 customers having Hero Honda motorbikes. Sampling Technique Convenient Sampling technique is used for this project. Data Collection Tool Questionnaires as the primary form of collecting data. Statistical techniques 1. Bar Diagrams 2. Pie-Chart Statistical tools 1. Statistical software like Microsoft Excel 2.8 Scope of the study:The study helps in having an awareness of customer satisfaction towards “Hero Honda”. As the product had a good reputation in the market, this study will help to know that how Hero Honda lost their grip in motor bike industry. It also helps us to increase our practical knowledge towards marketing of a company. 2.9 Limitations of the study:a) In this study it is not possible to collect the opinion of all the customers owing to personal constraints. So the assumptions are drawn on the basis of the information given by the respondents. b) The study needs to be completed within a specified time of one month and in certain restricted areas. So the findings cannot be generalized for the company as a whole. c) This study covers only a limited Hero Honda sector. So this study will not be applicable for those areas.
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2.10 CHAPTERIZATION 1. Introduction 2.
Research Methodology
3. Profile of the Industry and Company 4. Analysis of the Data Collected 5. Findings, Suggestions and Conclusion Bibliography Appendix
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CHAPTER 3
PROFILE OF THE INDUSTRY AND COMPANY
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3.1 INDUSTRY PROFILE Historical Industry Development India is the second largest manufacturer and producer of two-wheelers in the world. It stands next only to Japan and China in terms of the number of two-wheelers produced and the domestic sales respectively. This distinction was achieved due to variety of reasons like restrictive policy followed by the Government of India towards the passenger car industry, rising demand for personal transport, inefficiency in the public transportation system etc. The Indian two-wheeler industry made a small beginning in the early 50s when Automobile Products of India (API) started manufacturing scooters in the country. Until 1958, API and Enfield were the sole producers. In 1948, Bajaj Auto began trading in imported Vespa scooters and three-wheelers. Finally, in 1960, it set up a shop to manufacture them in technical collaboration with Piaggio of Italy. The agreement expired in 1971. In the initial stages, the scooter segment was dominated by API; it was later overtaken by Bajaj Auto. Although various government and private enterprises entered the fray for scooters, the only new player that has lasted till today is LML. Under the regulated regime, foreign companies were not allowed 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. The motorcycle segment was initially dominated by Enfield 350cc bikes and Escorts 175cc bike.
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The two-wheeler market was opened to foreign competition in the mid-80s. And the then market leaders - Escorts and Enfield - were caught unaware by the onslaught of the 100cc bikes of the four Indo-Japanese joint ventures. With the availability of fuel efficient low power bikes, demand swelled, resulting in Hero 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. These two players initially started with assembly of CKD kits, and later on progressed to indigenous manufacturing. In the 90s the major growth for motorcycle segment was brought in by Japanese motorcycles, which grew at a rate of nearly 25% CAGR in the last five years. The industry had a smooth ride in the 50s, 60s and 70s when the Government prohibited new entries and strictly controlled capacity expansion. The industry saw a sudden growth in the 80s. The 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 variometric 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 twowheeler market. 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.
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The reasons for recession in the sector were the incessant rise in fuel prices, high input costs and reduced purchasing power due to significant rise in general price level and credit crunch in consumer financing. Factors like increased production in 1992, due to new entrants coupled with the recession in the industry resulted in company either reporting losses or a fall in profits. India is one of the very few countries manufacturing three-wheelers in the world. It is the world's largest manufacturer and seller of three-wheelers. Bajaj Auto commands a monopoly in the domestic market with a market share of above 80%, the rest is shared by Bajaj Tempo, Greaves Ltd and Scooters India. The total number of registered two-wheelers and three-wheelers on road in India, as on March 31, 1998 was 27.9mn and 1.7mn respectively. The two wheeler population has almost doubled in 1996 from a base of 12.6mn in 1990.
Evolution of Two-wheeler Industry in India Two-wheeler segment is one of the most important components of the automobile sector that has undergone significant changes due to shift in policy environment. The twowheeler industry has been in existence in the country since 1955. It consists of three segments viz. scooters, motorcycles and mopeds. According to the figures published by SIAM, the share of two-wheelers in automobile sector in terms of units sold was about 80 per cent during 2003-¬04. This high figure itself is suggestive of the importance of the sector. In the initial years, entry of firms, capacity expansion, choice of products including capacity mix and technology, all critical areas of functioning of an industry, were effectively controlled by the State machinery. The lapses in the system had invited fresh policy options that came into being in late sixties. Amongst these policies, Monopolies and Restrictive Trade Practices (MRTP) and Foreign Exchange Regulation Act (FERA) were aimed at regulating monopoly and foreign investment respectively. This controlling mechanism over the industry resulted in: (a) several firms operating below minimum scale of efficiency; (b) under-utilization of capacity; and (c) usage of 23
outdated technology. Recognition of the damaging effects of licensing and fettering policies led to initiation of reforms, which ultimately took a more prominent shape with the introduction of the New Economic Policy (NEP) in 1985.
However, the major set of reforms was launched in the year 1991 in response to the major macroeconomic crisis faced by the economy. The industrial policies shifted from a regime of regulation and tight control to a more liberalized and competitive era. Two major results of policy changes during these years in two-wheeler industry were that the, weaker players died out giving way to the new entrants and superior products and a sizeable increase in number of brands entered the market that compelled the firms to compete on the basis of product attributes. Finally, the two-¬wheeler industry in the country has been able to witness a proliferation of brands with introduction of new technology as well as increase in number of players. However, with various policy measures undertaken in order to increase the competition, though the degree of concentration has been lessened over time, deregulation of the industry has not really resulted in higher level of competition. A Growth Perspective The composition of the two-wheeler industry has witnessed sea changes in the postreform period. In 1991, the shares of scooters were about 50 per cent of the total 2wheeler demand in the Indian market. Motorcycle and moped had been experiencing almost equal level of shares in the total number of two-wheelers. In 2003-04, the share of motorcycles increased to 78 per cent of the total two-wheelers while the shares of scooters and mopeds declined to the level of 16 and 6 per cent respectively. A clear picture of the motorcycle segment's gaining importance during this period is exhibited by the Figures 1, 2 and 3 depicting total sales, share and annual growth during the period 1993-94 through 2003-04.
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INDIAN TWO WHEELER INDUSTRY
The two-wheeler market has had a perceptible shift from a buyers market to a sellers market with a variety of choices. Players are competing on various fronts such as pricing, technology, product design, productivity, sales process, after sales service, marketing and distribution. In the short term, market shares of individual manufacturers are sensitive to capacity,
product
acceptance,
pricing
and
competitive
pressures
from other
manufacturers. All the four segments, Motor Cycles, Scooters, Scooterettes and Mopeds have witnessed capacity additions in the last one year and it will continue in the upcoming period as and when the foreign companies opens a local subsidiary. Over this period as and when the foreign companies’ opens a local subsidiary. Over this period, only the Motor Cycle segment is expected witness higher demand vise-versa supply, while the Scooters, Scooterettes and Mopeds supply will outstrip demand. As incomes grew and people felt the need to own a private means of transport, sale of two-wheelers raised. Penetration of the two-wheelers is expected to increase to approximately to more than 25%by 2005. The Motor Cycle segment will continue to lead the demand for two-wheelers in the coming years. Motor Cycle sales are expected to increase by 20% as compared to 1% growth in the Scooter market and 3% by Scooterttes and Moped sales respectively for the next two-years. The Indian two and three wheeler industry produced and sold about 4.5million units in 2003-2004. Like any other Indian Industry, the policy environment guided and controlled this segment of the industry as well. Licensing norms ruled the day till mid 80’s. Access to foreign technology inputs and foreign investment were strictly government controlled.
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Since mid 80’s, the Indian automobile industry was administered select doses of liberalization. Foreign collaborations with equity up to 26%, fresh licenses and conditional CKD imports, etc. were allowed. This liberalization coupled with the Indian market potential attracted world majors like Honda, Yamaha, Suzuki and Piaggio setup their Joint Ventures during mid 80’s in India. From 1991 onwards, the industry was delicensed. Automatic approvals for foreign equity up to 51% and equity participation in excess of 51% with specific approvals entered the rulebook. Honda converted one of its Joint Ventures to a 51% subsidiary On regulation front, Central Motor Vehicles Regulations mandates the safety, emissions and other norms. Vehicular emissions standards came into effect first in 1991 and were tightened further in 1996. For the two and three wheeler these are among the tightest in the world. Further tightening has taken effect from April 2000.
The four-stroke Motor Cycle has added new dimensions to the two-wheeler segment. The major players in the Motor Cycle market are Bajaj Auto Ltd. with its Pulsar DTS-i, Hero Honda Co. with its Hero Honda Karizma. Competition is intense in all segments of the two-wheeler industry with fuel efficiency and price being crucial considerations for success. In the recent past, a manufacturer’s ability at product innovation and opening new market niches have also been crucial for the growth of the industry. Bajaj Auto Ltd. entered the Motor Cycle segment in the mid 80’s. Since then it has won market shares increasing indigenization and by opening new market niches for their products. Bajaj has emphasized its higher safety and superior quality. Fuel efficiency allowed Hero Honda to dominate the 100cc Motor Cycle segment for most of the last eight years. Bajaj Auto Ltd. has gained considerable market share in this segment since it also launched a four-stroke Motor Cycle two years ago. The 100-cc segment is further power (dominated by Bajaj Pulsar DTS-i), fuel economy and sub-segments. The semi-urban and rural markets will increase in importance in the future and all manufacturers’ plan to launch heavier bikes with stronger suspensions.
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The relatively affordable and stable prices of Bajaj Motor Cycles backed by flexible loan options have caused other Motor Cycles to continuously lose market share to them in the previous few years.
Industry Structure The Indian two-wheelers Industry can be broadly classified as scooters, motorcycles and mopeds. The domestic two wheeler sales of 3.4mn in FY99 are constituted by these segments as shown below. Table. 3.1 Table showing the Industry Structure Year FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY2000
Scooter 769,955 709,725 840,173 1,033,524 1,223,425 1,301,051 1,262,699 1,325,868 1,253,969
Motorcycle 428,118 379,060 472,582 652,012 809,527 978,682 1,131,314 1,395,657 1,796,734
Moped 408,022 414,567 457,471 523,700 627,079 683,756 648,842 681,902 726,075
Total 1,606,095 1,503,352 1,770,226 2,209,236 2,660,031 2,963,489 3,042,855 3,403,427 3,776,778
Growth % (6.40) 17.75 24.80 20.41 11.41 2.68 11.85 10.97
Source: SIAM In the last six years, the domestic two-wheeler industry has seen structural changes. This can be seen from the change in composition of two-wheeler sales, where the motorcycles have consistently gained market share from the scooter and moped segments to corner a share of 41% of total two-wheeler sales. This trend is expected to continue in the next two years till the four-stroke scooters make their presence felt in the segment. The table below gives an idea about the strides made by the motorcycle segment in the last six years.
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Table 3.2 Table showing Motor Cycle Segment from 1993 to 2000 (In %) FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY2000
Scooter 47.2 47.5 46.8 46.0 43.9 41.5 39.0 33.2
Motorcycle 25.2 26.7 29.5 30.4 33.0 37.2 41.0 47.6
Moped 27.6 25.8 23.7 23.6 23.1 21.3 20.0 19.2
Source: SIAM The scooter market is dominated by 150cc vehicles from Bajaj Auto and LML, with the rest being served by 100cc variometric scooters from Kinetic Honda. For scooters, northern India is the major market contributing nearly 46% of the total scooter sales. Western and southern India take up second and third position with 27.5% and 15.7% respectively. For our calculations we consider TVS Scooty sales as part of scooter sales as given by Society of Indian Automobile Manufacturers (SIAM). The Indian motorcycle industry can be broadly categorized in to Indian motorcycles and Indo-Japanese motorcycles. The Indo-Japanese motorcycle segment is dominated by Hero group, Bajaj and Escorts in collaboration with Japanese vehicle manufacturers Honda, Kawasaki and Yamaha respectively. The Indian motorcycles segment is dominated by Bajaj (M80), Escorts and Royal Enfield. In motorcycles sales, western region leads with a market share of 40% of the total motorcycle sales. South and north regions come second and third with a market share of 27.5% and 17.4% of total motorcycle sales respectively. 28
For mopeds southern and western regions of India are the major contributors with nearly 52% and 28% of the over all moped sales. Looking at the population of moped sales in south it appears that the sale of mopeds has reached stagnation. Western and southern region lead in three-wheeler sales with a contribution of 42% and 35.8% of total three-wheeler sales respectively. In terms of two-wheeler vehicle population, Maharashtra stands first with a population of 2.96mn vehicles and Gujarat stands second with 2.64mn vehicles as on March 31st 1997. Tamil Nadu is the third largest state with 2.45mn two-wheeler population. In terms of three-wheeler vehicle population Maharashtra stands first with a population of 0.39mn and Gujarat in the second place with 0.22mn as on March 31st 1997. Penetration of Two-Wheelers On a base of around 28mn vehicles on Indian roads and around 175mn households, there were only 160 motorized two-wheelers per thousand households in FY98. This compares poorly with countries like Thailand where it is around 600 per thousand households. Also with a household size of 5.5 persons and more than one wage earner in about 60% of the households, the potential for a second vehicle demand is also good.The NCAER in its latest report on market demographics has clearly indicated that post-liberalization (ie FY92 to FY96) Indian households have graduated to higher income groups as can be seen in the table below.
Table 3.3 Table showing Distribution of Households In %age
Annual income (Rs
at
FY96
Income group
FY86 Urban
FY96 Rural
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Total
Urban
Rural
Total
prices) <=25,000 Low 42.1 25,001 - 50,000 Low Middle 35.8 50,001 - 77,000 Middle 15.2 Upper 77,001 - 106,000 3.9 Middle > 106,000 High 3.1
73.6 21.4 4.0
65.2 25.2 6.9
27.9 34.9 20.3
57.2 29.0 8.6
48.9 30.7 11.9
0.7
1.5
9.6
3.1
5.0
0.3
1.1
7.3
2.0
3.5
Table 3.4 Table showing Growth in Income Groups (%) In Pre and Post Reform Period Income group Low Low Middle Middle Upper Middle High Total
FY86 to FY89 Urban Rural 0.93 -0.20 3.34 4.91 8.53 17.82 18.52 16.39 9.57 13.90 4.14 2.04
Total -0.01 4.33 12.72 17.83 10.65 2.61
FY93 to FY96 Urban Rural -7.03 -3.03 5.46 10.20 11.96 3.11 11.90 12.25 18.22 15.68 3.50 1.44
Total -3.72 8.59 7.01 12.06 17.14 2.01
Source: NCAER As seen from the above tables, the number of households in the low income group has fallen since FY86 and has been more pronounced in the post-reform period. On the other hand, the numbers of households in the middle, upper middle and high income groups, which form the consumer base for two wheelers, have increased. Their share of the total number of households has increased from 10.6% in FY88 to 20.5% in FY96. The rising income profile has, however, been more pronounced in the urban areas as average annual growth in industry has surpassed that of agriculture in the period FY93 to FY96. 3.2 COMPANY PROFILE
30
Hero Honda Motors Limited was established in 1984, as a joint venture between India's Hero Group (world's largest bicycle manufacturers) and Japan's Honda Motor Company. In 1985 production began with the launch of its first motorcycle, the CD100, which gave 80 km to the liter. In 1987 the engine plant was started and in 1989 the Company produced its 3,00,000th motorcycle. In 2001 Hero Honda manufactured its 50,00,000th motorbike. Hero Honda has a reputation of being the most fuel-efficient and the world's single largest two wheeler Company. Shri Brijmohan Lall Munjal is the chairman and managing director of this Company. Both the manufacturing plants are located in Haryana, one at Dharuhera (district Rewari) and the other in Gurgaon. The Gurgaon plant is situated on the Delhi-Jaipur Highway, in Sector 33. The Dharuhera plant, set up in 1987 in the Dharuhera Industrial Area, is spread over an area of 140 acres. The Dharuhera plant manufactures CD100, CD100ss and CD Dawn motorcycles while the Gurgaon plant manufactures the other models. Splendor is manufactured at both the plants. With both these plants running at full capacity, Hero Honda is looking for a suitable location to set up their third manufacturing unit.
When Hero Cycles and Honda Motor Company of Japan inked their joint venture in India in April 1984, few could have imagined that the two would go on to create history and become the subject of a case study at business schools, internationally. That's the Hero Honda saga for you. In a little over two decades, the world's largest manufacturer of bicycles and the global leader in motorcycles have created not only the world's single largest motorcycle company but also the most endearing and successful joint venture for Honda Motor Company worldwide. The company has sold over 15 million motorcycles and has consistently grown at double digits since its inception and today, every second motorcycle sold in the country is a Hero Honda. In two decades, Hero Honda has built two world-class manufacturing facilities at Dharuhera and Gurgaon in Haryana that now churn out over 3 million bikes per year.In
31
this period, Hero Honda has set up over 2400 customer touch points, comprising a mix of dealers, service centers and stockiest across rural and urban India. Today, Hero Honda is an amalgam of winning networks and relationships with internal and external stakeholders, including Investors, Dealers, Vendors and Employees. These relationships have helped the company hold on to the mantle of World No.1 for years in succession. What makes Hero Honda well, Hero Honda, is a synergy. The two partners, leaders in their respective domains, have been able to consistently draw on each other's strengths. The Hero Group's deep domain knowledge of the Indian market and its supplier network has meshed with Honda's mastery over four-stroke engine technology to create modern and fuel-efficient machines at affordable prices for India 's 250-300 million strong middle class. Progressively through the 1980s, the 1990s and now in the 2000s, Hero Honda has relied on 3 R's-- Reach, Research and Reliability as its basic building blocks. Using feedback from the market, a fully-equipped R&D center has consistently created best practices in designing, testing and harmonization, besides placing strong emphasis on road safety and ride quality. This emphasis has helped Hero Honda build products that are ahead of their time. In the 1980s, for example, Hero Honda became the first company in India to prove that it was possible to drive a vehicle without polluting the roads. The company introduced new generation motorcycles that set industry benchmarks for fuel thrift and low emission. A legendary 'Fill it - Shut it - Forget it' campaign captured the imagination of commuters across
The Legend of Hero Honda:What started out as a Joint Venture between Hero Group, the world’s largest bicycle manufacturers and the Honda Motor Company of Japan, has today become the World’s single largest two wheeler Company. Coming into existence on January 19,1984. Hero Honda Motors Limited gave India nothing less than a revolution on two-wheels made even more famous by the ‘fill it – shut it – forget it’ campaign. Driven by the trust of
32
over 5 million customers, the HERO HONDA product range today commands a market share of 48% making it a giant in the industry. Add to that technological excellence, an expansive dealer network, and reliable after sales service, and you have one of the most customer-friendly companies. This is proved by the company’s sales over the years: 1985.86
43,000 units
1989.90
96,200 units
1998.99
5,30,600 units
1999-00
7, 61,210 units
2000.1
10,29,555 units
2001.2
14,25,195 units
2002.3
16,77,537 units
2003-04
1.9 million units
Key Policies of Hero Honda Environment Policy:
•
Integrate environmental attributes and cleaner production in all business processes and practices with specific consideration to substitution of hazardous chemicals, where viable and strengthen the greening of supply chain.
•
Continue product innovations to improve environmental compatibility. 33
•
Comply with all applicable environmental legislation and also controlling our environmental discharges through the principles of "alara" (as low as reasonably achievable).
•
Institutionalise resource conservation, in particular, in the areas of oil, water, electrical energy, paints and chemicals
Quality Policy: •
Innovation in products processes and services.
•
Continuous improvement in total quality management systems.
•
Teamwork and responsibility
Safety Policy: •
Integrating safety and health matters in all activities.
•
Ensuring compliance with all applicable legislative requirements.
•
Empowering employees to ensure safety in their respective work places.
•
Promoting safety and health awareness amongst employees, suppliers and contractors.
•
Continuous improvements in safety performance through precautions besides participation and training of employees.
Products: Pleasure - Scooter with 102 cc air-cooled four-stroke engine. Karizma - Motorbike with 223 cc four-stroke air-cooled engine. Super Splendor - Motorcycle with 125 cc four-stroke air cooled engine Splendor + - Motorbike with 97 cc four stroke air cooled engine. Glamour - Motorbike with 125 cc (9 bhp) "quantum core" engine
34
Passion + - Motorbike with 97 cc four stroke air-cooled engine. CD Deluxe - Motorbike with 97 cc four-stroke air cooled engine. CD 100 SS - Motorbike with 97 cc four-stroke air-cooled engine. CD Dawn - Motorcycle with 97 cc four-stroke air-cooled engine. Achiever - Motorcycle with 149 cc four-stroke air-cooled engine. CBZ Xtreme – Motorcycle with 150 cc four-stroke air-cooled engine.
35
CHAPTER 4
ANALYSIS AND INTERPRETATION OF DATA
36
4. 1 ANALYSIS OF DATA COLLECTED Consumer Perception towards HERO HONDA Motor Bikes in Bangalore City Statement of Problem Stepping down of Hero Honda’s position form a market leader to an ordinary market survivor has posed and alarming condition before the company. The present study would like to have an insight of consumer’s perception about the criteria of selecting the bikes. Especially to figure out whether it is brand driven or quality driven Before five years Hero Honda was the market leader in motor bike industry in India. But in now a day they are losing their grip in motor bike industry, none of their bike except ‘Splendor’ became a success. And the competitors like Bajaj and TVS has taken advantage of this. There is no doubt that the companies market share is falling down. So this study will help to understand and identify what the consumer feels or perceives about Hero Honda motor bikes. This will help the marketer to identify which all are the factors that a consumer looks in to when he selects a particular bike. And also explains how a consumer selects and interprets the qualities of bike that Hero Honda offers. Objectives of the Study 1. To analyze consumer perception towards Hero Honda motor bikes 2. To get feed back on what consumer expects from Hero Honda 3. To analyze consumer perception towards services offered by Hero Honda and performance of the motor cycle
37
Methodology The research will be done through survey method. The collection of data will be done through questionnaire, interview and related websites The sample size for this research is 100 customers those who having Hero Honda motor bikes. The area of this survey consist of Bangalore city The collection of data will be done with the help of a structured questionnaire. The designing of questionnaire needs precision and classification of the subject, so that the respondents can easily understand the question and can answer it sincerely and correctly. Sources of Data Primary data:Primary data consists of original information for the specific purpose at hand. It is first hand information for the direct users of respondents. The tools used to collect the data may vary depend can be collected through various methods like questionnaire, direct personal interview Secondary data:Secondary data is the data which is already been collected and assembled. This data is available with the companies or firms and it can be collected from newspapers, periodicals, magazines, websites etc.
38
Analysis of the Data Collected
4.1.1 Gender of the Respondents
Table No 4. 1 GENDER
NO OF RESPONDENTS
% OF RESPONDENTS
MALE
96
96%
FEMALE
4
4%
TOTAL
100
100%
Source: survey data
Interpretation: The above table showing the sex of the respondents those who participated in the survey
39
Chart No 4.1
Gender of Respondents
Male Female
Analysis: Above 90% of respondents of the survey were male customers and there were only a few female respondents.
40
4.1.2 Age of the Respondents
Table No 4. 2 AGE
NO. OF RESPONDENTS 42
% OF RESPONDENTS 42%
34
34%
19
19%
5
5%
100
100%
18-25
25-40
40-55
ABOVE 55
TOTAL Source: survey data Interpretation: The above table showing the age categories of the Hero Honda customers who participated in the survey .
Chart No 4.2
41
Age of the respondents
45 40 35 30 25 No of Respondents 20 15 10 5 0 18-25
25-40
40-55 Age
Analysis:
42
>55
Above 40% of the participants of the survey were between18-25 of age and second most participants were between25-40. There were only 5 participants responded above 55 age group
4.1.3 Occupation of the Respondents
Table No 4. 3 Occupation Business
No of Respondents 18
% of Respondents 18%
Professional
14
14%
Employee
20
20%
Student
38
38%
Others
10
10%
Total
100
100%
Source: survey data
Interpretation:
43
The above table showing the occupation of the Hero Honda owners those who participated in the survey and their percentage wise analysis
Chart No 4.3
Occupation of the Respodents 40 35
No of Respondents
30 25 20 15 10 5 0 Business
Pfsnl
Emplye Occupation
Analysis: 44
Stdnt
Others
The majority of the Hero Honda customers participated in the survey were students. There were 38% and the 20% employees who are Hero Honda owners. And the Professionals and Businessmen constitute only 32%.
4.1.4 SOURCES OF AWARENESS OF HERO HONDA
Table No 4. 4 SOURCE
NO. OF RESPONDENTS
%
ADVERTISEMENT
38
RESPONDENTS 38%
FRIENDS
24
24%
RELATIVES
10
10%
OTHERS
28
28%
TOTAL
100
100%
Source: survey data
INTERPRETATION: -
45
OF
The above table tells about which of the source is more effective in spreading the awareness about Hero Honda bikes
Chart No 4.4
SOURCES OF AWARENESS OF HERO HONDA 38% 40.00%
% of Respondents
35.00%
28%
30.00%
24%
25.00%
20.00%
15.00%
10% 10.00%
5.00%
0.00% ADVERTISEMENT
FRIENDS
RELATIVES
OTHERS
Status Analysis: This statistic reveals that greater part of respondents have got the information from T.V and advertisement other than friends & relatives which plays an important role in influencing them to opt for Hero Honda. This reveals that Hero Honda is able to influence its consumer base to tell other about their product.
46
4.1.5 SATISFACTION ABOUT PRODUCT BRIEFING DONE BY SALES EXECUTIVE
Table No 4. 5 SATISFACTION
NO.
OF %
RESPONDENTS
RESPONDENTS
YES
92
92%
NO
08
08%
TOTAL
100
100%
Source: survey data
47
OF
INTERPRETATION: This table showing the satisfaction level of customer about the product briefing done by the sales executive
Chart No 4.5
SATISFACTION ABOUT SALESMANSHIP 100.00%
92%
90.00%
% of Respondents
80.00% 70.00% 60.00%
No of Respondent
50.00% 40.00% 30.00% 20.00%
8%
10.00% 0.00% YES
NO
SATISFACTION
Analysis:
48
The statistic reveals that the product profile presented by the Salesman of Hero Honda is truly trustworthy with a majority of 92% of respondents showing satisfaction towards products briefing.
4.1.6 TEST RIDE PROCESS
Table No 4. 6 TEST RIDE
NO. OF RESPONDENTS
% OF RESPONDENT
YES
100
100%
SNO
0
0%
TOTAL
100
100%
Source: survey data.
INTERPRETATION: -
49
This table showing no. of respondents took a test drive of Hero Honda bike
Chart No 4.6
Test Ride Process
No. of Respondents
120 100 80 60 40 20 0 Yes
No Test Ride
50
Analysis: The statistic reveals that almost all the customers are offered for a test drive and were satisfied with the process. The test ride is offered within the limits of the showroom and a service employee is sent with the customer.
4.1.7 PERCEPTION TOWARDS SALES PROCESS Table No 4. 7
PERCEPTION
NO. OF RESPONDENTS
% OF RESPONDENTS
VERY GOOD
33
33%
GOOD
56
56%
FAIR
11
11%
POOR
00
00%
TOTAL
100
100%
Source: survey data.
51
Interpretation: This table indicates perception level of Hero Honda customers about the over all sales process of Hero Honda bikes providing by the manufacturer through their dealers
Chart No 4.7
52
PERCEPTION TOWARDS SALES PROCESS 60.00%
56%
% of Respondents
50.00%
40.00%
33% 30.00%
20.00%
11% 10.00%
0% 0.00% VERYGOOD
GOOD
FAIR
POOR
PERCEPTION
Analysis: The study reveals that the consumer perceives the dealer’s sales process as good and very good with the percentage being 56% and 33% respectively.
53
4.1.8 SATISFACTION ABOUT AFTER SALES SERVICE
Table No 4.8 Source: survey data
SATISFIED
NO. OF RESPONDENTS
% OF RESPONDENTS
YES
93
93%
NO
07
07%
TOTAL
100
100%
Interpretation: This table shows the satisfaction level of customers about the after sales services provided by Hero Honda
Chart No 4.8
54
SATISFACTION ABOUT AFTER SALES SERVICE 100.00%
93%
90.00%
80.00%
% of Respondents
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
7%
10.00%
0.00% YES
NO
SATISFIED
Analysis: The statistic indicates that the greater part of respondent are satisfied with the sales
service which falls
55
4.1.9 PERCEPTION OF RESPONDENTS REGARDING COMPLAINT RECOGNITION
Table No 4.9 PERCEPTION
NO. OF RESPONDENTS
% OF RESPONDENTS
VERYGOOD
36
36%
GOOD
53
53%
FAIR
11
11%
POOR
0
0%
TOTAL
100
100%
Source: survey data.
Interpretation: -
The table reveals that the complaints of consumer after sales were duly attended by the sales force. This shall be of competitive tool to be used to build up the brand image.
56
Chart No 4.9
Perception of Respondents regarding complaint recognition
Very Good Good Fair Poor
Analysis: More than 50% of the respondents said that the complaint recognition of Hero Honda is good. And nobody claimed that their complaint recognition is poor. This indicates that Hero Honda is providing their customers good services.
57
4.1.10 PERCEPTION TOWARDS MECHANICS OF HERO HONDA
Table No 4.10
EXPERT
NO.OF
% OF RESPONDENTS
MECHANICS YES
RESPONDENTS 78
78%
NO
22
22%
TOTAL
100
100%
Source: survey data
Interpretation: This table shows that whether Hero Honda have their own well trained and expert mechanics those who can meet the needs and expectation of the consumer or not
58
Chart No 4.10
Expert Mechanics 90 80
No of Respondents
70 60 50 40 30 20 10 0 Yes
No Response
Analysis: Majority of the consumers felt that Hero Honda having good and well trained mechanics to provide better service to the customers as per their expectation.
59
4.1.11 PERCEPTIOIN TOWARDS THE ATTRIBUTES OF HERO HONDA
Table No 4.11 ATTRIBUTES
NO OF RESPONDENTS
% OF RESPONDENTS
STYLE
13
13%
MILEAGE
32
32%
PERFORMANCE
24
24%
COMFORT
11
11%
PRICE
4
4%
BRAND NAME
16
16%
TOTAL
100
100%
Source: survey data Interpretation: The above table showing that the attribute of Hero Honda which the customers ranked most. This indicates that which of the attribute the consumer likes most in a Hero Honda motor bike
60
Chart No 4.11
Perception towards Attributes 35 30
No of Respondents
25 20 15 10 5 0 Style
Mileage
Perfmns
Comfort
Price
Brd nme
Attributes
Analysis: Most of the consumers those who participated in the survey ranked mileage as most attractive attribute of Hero Honda. And the second most attribute which got ranked first is the performance of Hero Honda bike. The least attractive attribute is price.
61
4.1.12 CONSUMER PERCEPTION TOWARDS PERFORMANCE OF HERO HONDA Table No 4. 12 OPINION
NO. OF RESPONDENTS
% OF RESPONDENTS
EXCELLENT
27
27%
GOOD
56
56%
SATISFACTORY
17
17%
POOR
0
0%
TOTAL
100
100%
Source: survey data. INTERPRETATION: This table indicates consumer’s satisfaction towards the performance of the Hero Honda motor bikes
62
Chart No 4.12
Perception towards Performance
Excellent Good Satsfctry Poor
Analysis: As per the above table the respondents feel that Hero Honda’s performance is good revealed by their personal experience of using the bike. This shows that Hero Honda has very good market potential through its performance
63
4.1.13 AVAILABILITY OF SPARE PARTS OF THE HERO HONDA Table No 4.13 AVAILABILITY
NO OF RESPONDENTS
% OF RESPONDENTS
EASILY AVAILABLE
100
100%
HARDLY AVAILABLE
0
0%
NOT AVAILABLE
0
0%
TOTAL
100
100%
Source: survey data
Interpretation: The above table showing the availability of the Hero Honda spares parts
64
Chart No 4.13
Availablity of Spare Parts
Esly avail Hdly avail Not avail
Analysis: The Hero Honda customers are satisfied about the availability of its spare parts. All the respondents said that the Hero Honda spares are easily available.
65
4.1.14 CONSUMER’S PREFERENCE IN SERVICING THE BIKE
Table No 4.14 SERVICE PREFERENCE
NO OF RESPONDENTS
% OF RESPONDENTS
SERVICE CENTRE
47
47%
AUTHORISED DEALER
34
34%
LOCAL MECHANIC
19
19%
TOTAL
100
100%
Interpretation: This is about where would the consumer prefers when it comes to the servicing bike. Whether they choose service centre or authorized dealer. Other than this would they prefer local mechanics?
66
Chart No 4.14
Service preference
50 45 40 35 30 No of 25 Respondents 20 15 10 5 0 Ser cntr
Auth dlr
Lcl mech
Preference
Analysis: Majority of the consumers prefers service centre for servicing their bike. And the second most preference is authorized dealers apart from this only a small no. of consumers prefers local mechanics.
67
4.1.15 FACTORS INFLUENCED IN PURCHASE DECISION
Table No 4. 15 FACTORS
NO. OF RESPONDENTS
% OF RESPONDENTS
POWER
13
13%
STYLE
17
17%
PRICE REDUCTION
26
26%
MORE COLOURS
9
9%
FREE ACCESSORIES
11
11%
FUEL EFFICIENCY
24
24% 100%
TOTAL
100
Source: survey data.
Interpretation: This is about the factor which influenced the customer to take his decision to buy a Hero Honda bike. .
68
Chart No 4.15
Factors influenced in Purchase Decision
Power Style Prce rdtn Mre clrs Fre acsrs Fuel efncy
Analysis: From the study its revealed that the price cut from Hero Honda influenced customer most for buying the bike and the percentage being 26%. This is followed by an influence of fuel efficiency and style with 24% and 17% of the respondents
69
4.1.16 CONSUMERS PREFERENCE FOR HERO HONDA BRANDS Table No 4. 16 BRANDS
NO OF RESPONDENTS
% OF RESPONDENTS
SPLENDOR+
20
20%
PASSION+
16
16%
CD-DAWN
7
7%
CBZ
12
12%
CBZ EXTREME
5
5%
AMBITION
2
2%
KARIZMA
10
10%
SUPER SPLENDOR
18
18%
GLAMOUR
6
6%
PLEASURE
4
4%
TOTAL
100
100%
Source: survey data Interpretation: This table showing consumers preference towards Hero Honda brands
70
Chart No 4.16
Consumers preference for Hero Honda Brands 25
No of Customers
20
15
10
5
r
re Pl ea su
la m ou G
pl dr rS
Su p
Ka ri z m a
bi ti o n Am
Ex tm BZ
CB Z C
C
D -D
aw
n
n+ Pa ss io
Sp l
nd r
+
0
Brands
Analysis: The most preferred two brands of Hero Honda are Splendor and Super Splendor. The other brands like Passion, Karizma and CBZ extreme is also preferred by the customers. But the fact is that the most of the Hero Honda customers are Splendor+ owners.
71
4.1.17 CONSUMERS PREFERENCE FOR ALTERNATIVE BRAND OF TWO WHEELER Table No 4. 17 BRANDS
NO OF RESPONDENTS
%OF RESPONDENTS
TVS
22
22%
BAJAJ
48
48%
YAMAHA
14
14%
HONDA
12
12%
SUZUKI
4
4%
OTHERS
0
0%
TOTAL
100
100%
Source: survey data
Interpretation: This table indicates that which brand consumer prefer most other than Hero Honda.
72
Chart No 4.17
Consumers Preference for other two wheeler Brands 60
50
No of respondents
40
30
20
10
0 TVS
Bajaj
Yamaha
Honda
Suzuki
Others
Brands
Analysis: The consumers prefer Bajaj most other than Hero Honda in the two wheeler industry. The 48% of the Hero Honda customers prefer Bajaj other than Hero Honda that’s why Bajaj becoming a big threat to Hero Honda. And also there is significant increase in the preference of TVS, Yamaha, Honda and even in Suzuki as well. 73
4.2 ANALYSIS OF THE OBJECTIVE OF THE STUDY AND QUESTIONS ASKED Table No 4. 18 OBJECTIVE OF THE STUDY
1.
TO
ANALYSE
PERCEPTION
QUESTIONS
CONSUMER
TOWARDS
HERO
HONDA BIKES
a. HOW
DID
KNOW
YOU
THE
COME
NAME
TO
HERO
HONDA b. WHAT ABOUT
IS
YOUR
OVER
OPINION
ALL
SALES
PROCESS OF HERO HONDA c. RANK THE ATTRIBUTES OF HERO HONDA AS PER YOUR PREFERENCE
d. HOW IS THE AVAILABILITY OF THE SPARE PARTS OF HERO HONDA
e. RANK THE COMPANIES AS PER YOUR PREFERENCE
74
2. TO GET FEED BACK ON WHAT
a. DO
THEY
HAVE
EXPERT
CONSUMER EXPECTS FROM HERO
MECHANIC WHO CAN CATER
HONDA
THE
NEEDS
OF
THE
CUSTOMER b. RANK THE FACTORS WHICH HAVE
INFLUENCED
YOU
PURCHASE OF HERO HONDA BIKE c. WHICH MODEL DID YOU BUY d. RANK THE ATTRIBUTES OF HERO HONDA AS PER YOUR PREFERENCE
3.
TO
ANALYSE
PERCEPTION
CONSUMER a. ARE YOU SATISFIED WITH THE
TOWARDS
SERVICE PRODUCT BRIEFING DONE BY THE
OFFERED BY HERO HONDA AND THE SALES EXECUTIVE PERFORMANCE OF THE BIKE b. HAVE YOU GONE FOR TEST RIDE c. ARE YOU SATISFIED WITH THE AFTER SALE SERVICES d. WHAT IS YOUR OPINION ABOUT THE
PERFORMANCE
OF
HERO
HONDA BIKE e. WHERE WOULD YOU PREFER TO SERVICE THE BIKE
75
OTHER QUESTIONS
RELEVANCE
1. AGE
1. THIS IS TO ANALYSE THAT WHICH AGE CATEGORY IS THE MAIN CUSTOMERS OF HERO HONDA
2. SEX
2. THIS THAT
HELPS
TO
WHO
ANALYSE IS
MAIN
CUSTOMER OF HERO HONDA WHETHER MEN OR WOMEN 3. OCCUPATION 3. THIS
QUESTION
REVEALS
THAT WHO ARE THE MAIN HERO HONDA OWNERS SUCH AS
EMPLYEES,
BUSINESS
MEN, STUDENTS ETC.
76
CHAPTER 5
FINDINGS, SUGGESTIONS AND CONCLUSION
77
5.1 FINDINGS The old prophecy that once a customer is a customer has become a myth in the present day competitive world. Brand image is no longer works a magic with the consumer. So to hold the customer to the brand and attract new consumers the company must produce products that are efficient and competent along with its marketing activities that help in sales of the product. After analyzing the response of the consumer interviewing through questionnaire and observation the following were found in the study. 1. Hero Honda motor cycles were the market leader in the Two Wheeler segment. But they are losing their grip in the market. Even the 48% Hero Honda customers said that if they get a second chance they would prefer Bajaj. 2. The Brand Name of Hero Honda is still there in the market and in the minds of the customer. 3. There are only a few women Hero Honda customers and they own Hero Honda Pleasure. 4. Now days the main Hero Honda customers are students between 18-25 years of age and they like the bike because of its mileage. 5. Advertisements of Hero Honda bikes are very effective. Introduction of Hrithik Roshan helps Hero Honda a lot. 6. Majority of the customers got the opportunity of test ride and they are satisfied with the product briefing by the Hero Honda sales executive.
78
7. The most demanded Hero Honda Brands are Splendor+ and Super Splendor. Major part of the users of this brand is employees next are students. 8. Most of the Hero Honda customers have satisfied with the after sale service and servicing of bike. 9. From analysis and interpretation it is found that Hero Honda is mainly chosen for its mileage performance and brand image. 10. Majority of the customers have satisfied with the performance of Hero Honda. 11. HERO HONDA is the only two wheeler company in India which has given these vast ranges of motorcycles to the market, obtained form general observation during the study 12. HERO HONDA has plans of letting some more new models in future such as CBZ Extreme .As per the information it was found that splendor is the world’s largest selling bike. 13. Majority of the customers were aware of HERO HONDA through T.V. & newspapers advertisement. Other than this there friends & Relatives also place an important role in influencing the customer 14. And in the case of servicing and repairing the bike most of them prefer Service Centers Majority of customers get their vehicle service a Authorized service units and authorized dealers and very few services on to local services centers.
79
15. The most important factor which influenced the customer to buy a Hero Honda bike is price reduction followed by fuel efficiency. 16. Customers are satisfied about HERO HONDA bike because of easy availability of spares parts of their bike. 17. From the survey it’s revealed that Bajaj motors is the foremost competitor of Hero Honda followed by TVS. 18. HERO HONDA bikes are said to have very good resale value in the market.
80
5.2 CONCLUSION Hero Honda is one of leading two wheeler producer in the world and a major player in the Indian Market. They were the producer of largest selling motor cycle of the world that is Hero Honda Splendor it has its own importance still in the market. But from the past two or three years Hero Honda suffered a slight loss in its market share and Bajaj became a big competitor to Hero Honda. The introduction of Bajaj Pulsar is one of the biggest threat to Hero Honda. Hero Honda is one of the leading two wheeler producer in the globe. It holds an important place in the minds of consumer by providing efficient service and better products. Product efficiency and innovations are the method they live up today. Their engineering is comprehensive. Consumer perception towards Hero Honda motorcycles is very good. It has created a very good brand image for it self by providing low maintenance, fuel efficient, sleek looking models along with efficient after sales service. It has attracted every class of customers. In today’s competitive business environment, it is only due to the positive perception of the consumer that the company is being able to compete in the market with its other competitors.
81
5.3 RECOMMENDATONS AND SUGGESTIONS
1. Most of the customers are of the view that the price tag of HERO HONDA bikes as compared to other similar bikes is a bit higher. Hence the price of the bikes especially the power range bikes like CD DELUXE, CBZ XTREME, and KARIZMA could be reduced. 2. CD-Dawn, Splendor+ and Passion Plus, could be added with more power, mileage and given with more colours.
3. The customers should be provided with enough information regarding effective maintenance of the bike so that the consumers get the best from the bike. 4. HERO HONDA has to identify those dealers who are facing the problem with sales and take adequate measures to keep up the so far created brand image.
5. Hero Honda has to use more promotional techniques to improve the sales in future. It has to conduct more road shows/public display by which the consumer is given with much detailed information about the product and more public awareness is created.
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6. Many existing customer have stated that some Hero Honda vehicle (CD-Dawn, Splendor) do not have a good road grip. Hence it is suggested that those vehicle must be re-engineered for better road grip. 7. Many existing customers have stated that the splendor+ be provided with self starter and disc brakes. So the company should focus on those factors. 8. HERO HONDA has offered just one model (HERO HONDA PLEASURE) for women whereas its competitors are offering more then two so they should concentrate on that aspect. 9. The models ACHIEVER and AMBITION should be re-launched with more value added features. 10. Apart from KARIZMA and CBZ-XTREME all other models are light weight and hence are prone to accidents.
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BIBLIOGRAPHY
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BIBLIOGRAPHY
TEXTBOOKS REFERRED Kotler Philip, Marketing Management, Pearson Education Inc. 11th Edition. Consumer Behaviour – Building Marketing Strategy 9th Edition 2003, Tata McGraw Hill. Stanton William J, Etzel Michael J, Walker Bruce J, Fundamentals of Marketing, McGraw-Hill international, Singapore, 1998 MAGAZINES Business Today Business World Business standard Auto India Overdrive
NEWSPAPER REFERRED Economics Times Business Times The Times of India Business Standard
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WEB SITE REFERRED
www.herohonda.com www.herogroup.com www.autoindia.com
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ANNEXURE
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ANNEXURE. 1 QUESTIONNAIRE
Dear customer, . I Joyal John final year MBA student of the Kristu Jayanti College of Management and Technology doing a project work on “Consumer Perception towards HERO HONDA Motor Bikes in Bangalore City” for my academic purpose. I request you to kindly fill this questionnaire. Thanking you, Sincerely yours, . 1. Name:2. Age: -
18-25
25-40
3. Sex
40-55
Male
>55
Female
4. Occupation:Business
Professional
Student
Others
Employee
5. How did you come to know the name HERO HONDA? Friends
Advertising
Relatives
Others
6. Are you satisfied with product briefing done by the sales executive? Yes
No
7. Have you gone for test drive? Yes
No
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8. What is your opinion about overall sales process? Very good
Good
Fair
Poor
9. Are you satisfied with the after sales service provided by Dealer? Yes
No
10. Do they have expert mechanics who can cater to the needs of the customers? Yes
No
11. Rank the attributes of HERO HONDA bikes as per your preference, Rank 1-Most attractive, Rank 6-Least attractive Style
Mileage
Performance
Comfort
Price
Br Brand Name
12. What is your opinion on the performance of HERO HONDA bikes? Excellent
Good
Satisfactory
Poor
13. How is the availability of spare parts of the HERO HONDA? Easily available Hardly available
Not available
14. When it comes to service the bike, where would you prefer? Service centre
Authorized Dealer
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Local Mechanic
15. Rank the factors which have influenced you purchase of HERO HONDA bike? Rank 1- Most influenced, Rank 6- Least influenced Power
Style
Price reduction
More colors
Free accessories
Fuel Efficiency
16. Which model did you buy? Splendor+
Passion+
Ambition 135
Karizma
C B Z Extreme
CD-Dawn
C.B.Z
Super Splendor
Glamour
Pleasure
17. Rank the Companies as per your preference, Rank1-Most, Rank-Least T.V.S Honda
Bajaj Suzuki
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Yamaha Others
