Vicky Sood

MIP PHASE II REPORT
T O S T U DY C O N S U M E R BU Y I N G B E H AV I O R O F 1 0 0 C C M O T O R C Y C L E USERS IN RURAL PUNJAB & SUGGEST SUITABLE PROMOTIONAL P L A N S.

TVS MOTORS
Faculty Guide: Prof. Simon Gorge Industry Guide: Mr. Deepak Bajaj
Submitted in partial fulfillment of the Post Graduate Programme in Management at TAPMI, Manipal by:
Name: Vicky Sood Roll No: 06164 Batch: 2006-2008
Date: 12 August 2007
T A PAI MANAGEMENT INSTITUTE, M A NI PA L , KARNATAKA-57 6 10 4
Vicky Sood
To Study consumer buying behavior of 100cc motorcycle users in rural Punjab and suggest suitable promotional plans.
Area Marketing.
Organization TVS MOTORS
Faculty guide Prof. Simon George.
Key word Indian Two-wheeler Market, Motorcycles, Market Research, Rural Punjab, TVS Motors.
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Date: August 12th, 2007
CERTIFICATE
This is to certify that the project titled To study consumer buying behavior of motorcycle users in rural Punjab and suggest suitable promotional plan is a bonafide work conducted by Vicky Sood (06164) under my guidance for partial fulfillment of Post Graduate Diploma in Management.
Faculty Guide: Prof. Simon George
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ACKNOWLEDGEMENT I acknowledge with gratitude the opportunity given to me by TVS Motors to work with them. I really appreciate the confidence shown by entrusting me with this project. A project of this nature required a lot of understanding about the organization and its various nuances of working. In this regard, I would like to mention some people who have been constant support in my endeavor.
I would like to express my sincere thanks to Mr. Deepak Bajaj, Area Manager for his timely co-operation and much needed support in carrying out the project.
I also want to thank my Faculty Guide, Prof. Simon George, whose constant support and guidance has helped me complete this project successfully.
I would also like to thank the managers of the various dealerships who helped me doing the survey at their premises.
And finally to all those 129 people who took time out to share their thought and ideas with me. Without you the project would not have been possible.
I express my heartfelt gratitude to the above mentioned people.
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EXECUTIVE SUMMARY TV Sundram (TVS) Motors is the third largest company in the two-wheeler industry with a market share of 16% and an annual turnover of over $ 650 million. It has closed the financial year 2006-07 with 15% growth in the sale of motorcycles. The motorcycles sales recorded 9,24,813 units in the financial year 2006-07 compared to 8,06,708 units 2005-06. It is the only automotive manufacture in India and the world's first motorcycle company to get the prestigious Deming award. Its group company Sundaram Clayton was the first company in India to receive the Deming award.
The project assigned was To study consumer buying behavior of motorcycle users in rural Punjab and suggest suitable promotional or advertisement plan The project is focused towards Star City, a motorcycle brand of TVS Motors in economy segment. Star City, launched in beginning of 2006 is a stylish and economically priced product of TVS. It got a very positive response from market in general. The management at TVS Motors, Chandigarh is concerned with sales of Star City in rural Punjab. Sales figure of Star City is increasing in urban cities of Punjab but in rural areas, the rate of growth is less as compared to cities. The project is mainly concerned with finding out reasons of low sales in rural sector and suggesting a suitable promotional or advertisement campaign to increase sales.
For studying the consumer buying behavior of people in rural Punjab, intercept interviews was conducted. People in villages, small towns in the district of Patiala, Fategarh Sahib, Ludhiana and Amritsar were contacted. The targeted sample size was
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150, this was arrived after discussion with the management. The questionnaire prepared was used as a guiding instrument while taking interviews.
For designing the questionnaire, 5-step model of Buying Decision Process was followed. Questionnaire covered all 5 stages namely Problem recognition, Information search, Evaluation of alternatives, Purchase decision, Post purchase Behavior. The response of the person interviewed was also filled in the same questionnaire for record keeping.
Sub-dealers and dealers in the main districts were also interviewed. Their current promotional campaigns and reasons of low sales were examined. Also buying behavior of few customers who came to purchase the bike was also observed at the location. This gave first hand observation of buying behavior of those customers.
The scope of project was limited to increasing sales by suggesting the regional promotional or advertisement campaign with given centralized campaign, fixed product range and existing prices. Also only Star City product range is considered, premium bike range of TVS (Apache) is not considered for the project.
After the research, few promotional campaigns were suggested, out of which reference campaign was accepted and it was decided to implement the same.
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TABLE OF CONTENTS
1. Introduction 2. Problem Definition 2.1. Management Decision Problem 2.2. Management Objective 2.3. Marketing Research Problem 3. Construct 4. Information To Be Collected For Study 5. Methodology 6. Findings 6.1. Problem recognition. 6.2. Information search. 6.3. Evaluation of alternatives. 6.4. Purchase decision. 6.5. Post purchase Behavior 7. Effectiveness 7.1. Effectiveness of promotional Campaigns 7.2. Effectiveness of advertisements 8. Conclusion 26 28 29 14 16 17 19 19 20 21 23 24 7 13
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9. Recommendation 9.1. Reference Campaign 9.2. Improvements in promotional campaigns by dealers / Sub-dealers 9.3. Free calendars and posters Appendix Check List for Personal Interviews References
31 31 31 33
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INTRODUCTION:
TV Sundram (TVS) Motors is the third largest company in the two-wheeler industry with a market share of 16% and an annual turnover of over $ 650 million. Interestingly, it is the only Indian company without a foreign collaboration in the two-wheeler industry. It has presence in all the segments viz. motorcycle, scooterettee and moped.
In 1982, the company entered into a technical collaboration to manufacture two-wheelers in collaboration with Suzuki Motors of Japan. TVS was one of the leaders in two-wheeler industry. However, disagreement on several aspects including development of TVS brand and exports lead to severance of ties with the joint venture partner in 2002. This forced the company to develop its own R&D expertise and commit itself to limited investment. When the company opted out of the collaboration with Suzuki in 2002, many believed that TVS was headed towards extinction. But the company proved all of them wrong and came out with a very successful `TVS Victor'. However, since then growth has slowed.
TVS Motor Company has closed the financial year 2006-07 with 15% growth in the sale of motorcycles. The motorcycles sales recorded 9,24,813 units in the financial year 200607 compared to 8,06,708 units 2005-06.
It is the only automotive manufacture in India and the world's first motorcycle company to get the prestigious Deming award. Its group company Sundaram Clayton was the first company in India to receive the Deming award. TVS Brakelinings and TVS Motors quickly followed and got the prestigious award.
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Milestone for TVS Motors: y y
1980: India's first 2 seated 50cc Moped TVS 50, launched in Aug. 1994: Launched first indigenous Scooterette (sub-100 cc variomatic scooters), TVS Scooty in June.
y y y
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 Star in Sept, a 100 cc motorcycle which is ideal for rough terrain.
2006: TVS Apache- Bike of the Year 2006 by Business Standard Motoring.
Products:
In the scooterette segment TVS has Scooty ES, Scooty PepDlx and Scooty Pep Plus. All these are targeted towards women.
Indian motorcycle is segmented into four categories and TVS motors have sufficient presence in all of these markets except in the high-end sports segment. y
Entry Level (below 100 cc), Priced between Rs.32,000 - Rs 40,000
Star DLX, Star City, Star Sports and Centra.
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Economy (120 cc - 130 cc) Priced between Rs. 40000 to Rs. 48000
- Victor GLX 125, Victor GX and Victor Edge y
Premium (140 cc - 160 cc) Priced between Rs. 48000 to Rs. 60000.
- Fiero FX, Fiero F2, Fiero F3 and Apache
'StaR Sport' is recent launch of TVS in entry-level segment. It is a stylish, compact and affordable 100 cc motorcycle target towards urban consumers who always go for sleek and compact style.
Competitors Information
Motorcycle manufactures in India are: -
1. Hero Honda Motors Limited (HHML). 2. Bajaj Auto Ltd. Or BAL. 3. TVS Motors or TVS. 4. Honda Motorcycle & Scooter India Pvt Ltd (Honda). 5. Kinetic Engineering Ltd (KEL). 6. Kinetic Motor Company Ltd (KMCL). 7. LML Limited (LML). 8. Majestic Auto Ltd (MAL). 9. Royal Enfield Ltd. (REL)-unit of Eicher. 10. Suzuki Motorcycle India Pvt Ltd (Suzuki). 11. Yamaha Motor India Pvt Ltd(Yamaha). Vicky Sood To Study consumer buying behavior of 100cc motorcycle users in rural Punjab and suggest suitable promotional plans.
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With presence of 11 manufacturers Indian two wheeler market is very competitive. Hero Honda Motors Limited (HHML) is the leader in the industry with a market share of 40% in H1FY2007, followed by Bajaj Auto Ltd. Or BAL (27.6%), and TVS Motors or TVS (19.3%). Thus, the top three players account for around 86.7% of total domestic sales of two wheelers in India.
In the motorcycle segment, Hero Honda is the dominant player with a market share of 46.3%, followed by Bajaj (32.5%), and TVS (14%). Top five players account for 98% of total sales.
TVS Market Share 14%
Bajaj 32.50%
Hero Honda 46.30%
Honda 2.10%
Kinetic 0.10%
Yamaha 3.70%
Entry level and Economy Segment: This segment (75-125 cc) is the largest segment and accounts for 80% of domestic motorcycle sales. Although there are only 5 players, competition is intense amongst the leading three manufacturersHHML, BAL, and TVS. Although HHML leads in this segment, BAL has gained market share during H1FY2007 mainly because of increased sales of Platina and Discover brands.
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Table showing various models offered by major players in entry level and economy segment along with their market share in H1FY2007 is given below:-
TVS Entry level Star Centra Economy Victor
Bajaj Boxer Wave Discover Platina
Hero Honda CD Dawn CD Deluxe Splendor Passion Glamour
Honda
Kinetic Boss
Yamaha Crux
Shine
Velocity
Libero
Market share
13.70%
23.60%
58.80%
Neg
0.10%
3.70%
Premium segment: The 125-250 cc motorcycle segment is the fastest growing subsegment. The sales in 125-250cc motorcycle segment are increasing from past few years. In H1FY2007 it accounts for 20.8% of motorcycle sales, as compared with 16.8% in FY2006, and 10.9% in FY2004. BAL is the leader in this segment with a market share of 62.7% in H1FY2007. However, BALs market share has declined because of entry of new players such as Suzuki, and launch of new products by competitors.
Table showing various models offered by major players in premium segment along with their market share in H1FY2007 is given below:-
TVS Models Apache Fiero Market Share Vicky Sood 13.50%
Bajaj Pulsar Avenger 62.70%
Hero Honda CBZ Karizma 4.20%
Honda Unicorn
Kinetic Laser
Yamaha Fazer
10.80%
Neg
4.30%
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The project I did was focused towards Star City, a motorcycle brand of TVS Motors in economy segment. Star City, launched in beginning of 2006 is a stylish and economically priced product of TVS. It got a very positive response from market in general. The management at TVS Motors, Chandigarh is concerned with sales of Star City in rural Punjab. Sales figure of Star City is increasing in urban cities of Punjab but in rural areas, the rate of growth is less as compared to cities. The project is mainly concerned with finding out reasons of low sales in rural sector and suggesting a suitable promotional or advertisement plan to increase sales.
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PROBLEM DEFINITION To study consumer buying behavior of motorcycle users in rural Punjab and suggest suitable promotional or advertisement plan MANAGEMENT DECISION PROBLEM Decreasing growth rate of sales of TVS Star range in rural Punjab: Star city, launched in beginning of 2006 is a stylish and economically priced product of TVS. it got a very positive response from market in general. Management at TVS Motors, Chandigarh is concerned with sales of star city in rural Punjab. Sales figure of star city was increasing in urban cities of Punjab but in rural areas, the rate of growth was less as compared to cities. The project is mainly concerned with finding out reasons of low sales in rural sector and suggesting a suitable promotional or advertisement plan to increase sales. MANAGEMENT OBJECTIVE 1. To increase sales in rural Punjab. 2. To design the effective promotional or advertisement plan. RESEARCH OBJECTIVE 1. To study consumer buying behavior of people in rural Punjab. 2. To study effectiveness of existing promotional campaign. 3. To study effectiveness of existing advertisement campaigns.
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CONSTRUCT 1. For studying consumer buying behavior: By studying the consumer buying behavior of people in rural Punjab we found out the consumer preferences regarding motorcycles, in terms of what they like to purchase, what are the factors that influence their purchase, what kind of promotional campaign will effect them most etc. As only Star City product range is considered, only motorcycle users using 100cc motorcycles were interviewed. Premium bike ranges like TVS Apache, Bajaj Pulsar, Hero Honda CBZ were not considered for the project. Intercept interviews were conducted and Questionnaires were filled by interviewers only instead of asking person being interviewed to fill it. This is mainly because of demographic profile of people. Most of the customers interviewed were either illiterate or were not used to filling the questionnaire. For obtaining their natural response interviewer have to become familiar to them and interact with them in their language. Asking them for filling the questionnaire will affect their natural response. 2. To study effectiveness of various existing promotional campaign: From exploratory research few promotional campaigns were short-listed, which could be most effective. Through the conclusive research, effectiveness of similar promotional campaigns launched in past was found. It was measured by finding out the likeability of those campaigns. The customer will like a campaign, if it fulfills the expectations in his mind. Information with the customers about the previous promotional campaigns launched was also used as a criterion for finding out effectiveness of promotional campaign. Sales data was not used because it
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was felt that because of number of channels in between, past failure or success could be because of various reasons. 3. To study effectiveness of various existing advertisement campaign: Conclusive research was done to find out the effectiveness of short-listed advertisement campaigns. Effectiveness was judged based upon the percentage of people who can recall that advertisement and attractiveness of the same to the customers. The scope of project was limited to increasing sales by suggesting the regional promotional or advertisement campaign with
1. Given centralized advertisement and promotional campaign. 2. Fixed product range. 3. Existing prices.
So effectiveness of advertisement campaign launched at regional level was only measured.
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INFORMATION TO BE COLLECTED FOR STUDY
For studying the consumer buying behavior 5-step model of Buying Decision Process was followed. And information for the same was collected through questionnaire. Questionnaire covered all 5 stages namely
1. Problem recognition. 2. Information search. 3. Evaluation of alternatives. 4. Purchase decision. 5. Post purchase Behavior.
The response of the person interviewed was filled in the same questionnaire for record keeping.
For finding out the effectiveness of promotional and advertisement campaigns, information to find out the impact of these campaigns on customers was collected. Then likeability of customers towards various kinds of promotional campaigns was measured. Awareness level of customers about the campaigns was also judged.
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METHODOLOGY
Research was carried out on people living or working in rural Punjab area. District of Patiala, Fategarh Sahib, Ludhiana and Amritsar were covered. For conducting the research, firstly an exploratory research was done. Twelve consumers and three dealers were interviewed during this phase. Based on these interviews, a questionnaire was prepared for conclusive phase.
SAMPLING PLAN Sample size Exploratory: 12 Sampling Size Conclusive: 129 Sampling Method: Convenience Sampling.
In conclusive research people in villages, small towns in the district of Patiala, Fategarh Sahib, Ludhiana and Amritsar were interviewed. In total 129 motorbike users were interviewed, out of which 48 were TVS owners, 30 Bajaj and 51 owned Hero Honda. In general random sampling was done but few TVS customers were always interviewed in each location, to know in detail about the reason behind their purchase and overall experience with TVS bikes.
In all consumers from 25 villages were covered in 9 districts, namely Patiala, Fategarh Sahib, Ludhiana, Amritsar, Khanna, Kharar, Derabassi, Taran Taran, Mohali.
1. People who purchased the bike in the last one year were interviewed. 2. Most of the consumers interviewed were farmers or shopkeepers. 3. Most of people interviewed were between 25 to 35 years of age. Vicky Sood To Study consumer buying behavior of 100cc motorcycle users in rural Punjab and suggest suitable promotional plans.
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Age Distribution
30% Percentage of people 25% 20% 15% 10% 5% 0% Less then 20 20-25 26-30 31-35 Age 36-40 41-45 Above 45
DATA COLLECTION METHOD
In both exploratory as well as conclusive phase data is collected through personal interviews. After exploratory phase a Questionnaire was prepared to be used as a checklist/guiding instrument for conducting intercept interviews during conclusive phase. Sub-dealers and dealers in the main districts were also interviewed. Their current promotional campaigns and reasons of low sales were examined. Also buying behavior of few customers who came to purchase the bike was also observed at the location. This gave first hand observation of buying behavior of those customers. For data analysis, Univariate analysis was followed and mainly frequency distribution was done on data collected. Brief demographic profile of customers interviewed:
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FINDINGS After interviewing the customers, dealers and sub-dealers, data was analyzed and main findings from the research grouped under various sub-headings can be listed as following: PROBLEM RECOGNITION Through this part of Questionnaire reasons of purchase of motorcycle by customers in Punjab was found out. What was the need of motorcycle to him and what triggers this need to purchase the new motorcycle or replace the old one with new. First time owners: 1. 63% of motorcycle customers who bought the motorcycle for the first time said they did so because of the style associated with the bike. 2. 54% said they bought motorcycle because of fuel efficiency. 3. 14% said they bought it because of social status. 4. 18% said they bought the bike because its easy to drive in farms or on rough roads.
Customers who changed from old two-wheeler 1. 67% of motorcycle customers who changed from old two-wheeler (motorcycle or scooter) said they did so because of the improved fuel efficiency. 2. 47% changed it because of improved looks of new bike. 3. 32% said they changed the bike because of social status.
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INFORMATION SEARCH Through this part of Questionnaire sources of information for rural Punjab customers and the brands they considered were found out. Sources of Information It was found out that Information function was performed mainly by commercial sources like TV advertisements, road shows, cultural nights, banners, hoardings outside dealership etc. Following facts regarding above were observed: 1. 72% of people interviewed never pay attention to any wall paintings. 2. 83% of consumers interviewed paid attention to road shows conducted by motorcycle companies. 3. Only 19% of consumers interviewed have seen cultural nights. After obtaining the information friends and relatives performed legitimizing function. Most of the customers discussed among their friends about various available bikes. Brands in their awareness set: Mainly Hero Honda, Honda, Bajaj, TVS, Yamaha, Enfield and Suzuki. Few of them were also aware of Kinetic & LML bikes. All of them have TVS bikes in their awareness set. Brands in their consideration set: Most of the customers interviewed have Hero Honda, Bajaj, Honda and TVS in their consideration set. Above brands fulfilled their buying criteria. As only 100cc bike owners were interviewed most of them didnt have Enfield or Yamaha in their consideration set. Brands in their choice set: There was quite a variation among the short-listed brands by various consumers; there was no common choice set. But most of respondents have more then one brand in their choice set as from our research we found that 63% of consumers
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interviewed considered brands other then what they purchased. Approximately 56% people have TVS bikes in their choice set. That is approx. 7% of total consumers though considered other brands but didnt consider TVS for purchase. EVALUATION OF ALTERNATIVES Next step after searching for information is short-listing of brands based on various parameters. Through this, various evaluation parameters for buying motorcycle were found. Belief and attitude of people towards TVS were also observed. 1. The evaluation parameters for motorcycle buying include fuel efficiency, looks, power, style, price, comfort, safety features, availability on loan, availability on exchange option, availability of dealership in the surrounding area etc. 2. Approximately 62% of people say that reasons behind their choice are features of bike like mileage, pick-up, looks and comfort. That is these features should be highlighted during advertisements. 3. Attitude: 36% consumers didnt want to purchase TVS probably because of ignorance or other reasons. Approx. 60% of these consumers were willing to purchase Star City once informed about the features and competitive pricing of Star City. That is with convincing advertisements the unfavorable attitude of motorcycle buyers can be changed into favorable attitude. We need to do Psychological repositioning of TVS brand in minds of these customers. 4. A good percentage of people (approx. 25%) visit or prefer to visit shop/ showroom familiar to them or in which their friend or relative or a villager works. Their deciding factor is the behavior or attitude or familiarity with shop rather then the brand. Few TVS dealership didnt fared well on this front. I met sub-
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dealers of Patiala, Mohali, Mandi-Gobindgarh, Amritsar, Taran Taran, Ludhiana etc. Most of these sub-dealers were happy and satisfied with interaction with their dealers. The only problem found was with dealer of MGG (Mandi Gobindgarh). The coordination between the dealers and sub-dealers was not appropriate in this case. During a talk with owner of Mandi-Gobindgarh dealer, he said Life of a sub-dealer is 2 years, 1 year he spend in establishing his business and second in repenting and wrapping up. Above clearly proves the lack of support and encouragement given by this dealer to its sub-dealer, which further affects the customer dealing with that sub-dealer. At the time of survey there were 6 subdealership under MGG in chunni. I visited three and out of those 3, 2 got closed recently. a. Chunni sub-dealership didnt have any facility, didnt have any salesman, owner also didnt have any knowledge about bikes, couldnt explain much to customers. b. The sub-dealer in Batala recently left the dealership and has lots of grudges with the main dealer on various issues including supply of required models and colors. c. Sub-dealership in Sirhind also closed few weeks back as the owner went bankrupt.
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PURCHASE DECISION The final decision of purchase of motorcycle by rural Punjab customers involves deciding on Price range, Brand, Dealer and Payment method that is whether cash or loan. 1. Price Range: Findings regarding price range: a. Only approx. 12% of people, used price as selection criteria for choosing the bike. Though they have broad idea of their range, only 12% of people based their final selection on price. b. 65% of consumers interviewed have flexible budget that is they choose the bike without considering the price. Majority of people living in rural villages have a broad idea that they want to purchase an economical segment bike. They select the bike among these and purchase it, without considering the price of individual model. 2. Brand: While deciding on the brand, 25% of people give main importance to Brand Name. That is these 25% people didnt even consider other motorcycle brands available in market. a. 94% of these brand loyal people are loyal towards Hero Honda. b. Rest 6%, stick to their old motorcycle brand. That is, they exchange old motorcycle for the new motorcycle but remain with same brand, only the model changes. c. When these Hero Honda brand loyal customers were informed about Star City, its price and features, most of them said that they would have considered Star City, if they had known about the bike before. That is,
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even these customers could be converted into Star City, if approached at proper time. 3. Dealer: A good percentage of people (approx. 25%) visit or prefer to visit shop/ showroom familiar to them or in which their friend or relative or a villager works. Their deciding factor is the behavior or attitude or familiarity with shop rather then the brand. 4. Payment method Cash or loan: 53% of customers did payment through financing, so availability of attractive finance option was also an important criteria for selection of bike for these customers. Also, more then 95% of people didnt need low down payment schemes. Down payment of Rs.10,000 can be easily arranged by the person interested in purchasing bike.
POST PURCHASE BEHAVIOR Finding out the post-purchase behavior is also important for this research. It forms an important part of buying decision process, because:1. Availability of spares and service centers in the nearby area: For a product like motorcycle, availability of service center in nearby area is very important. Almost equally important is availability of spares. TVS faired badly on this front. Though there are service stations available in rural areas of Punjab but problem is with spares. Many of TVS customers faced the problem of spare parts while few of those interviewed said that they didnt bought TVS because of difficulty in spare part availability. Sub-dealers didnt keep large inventory of spare part. Sometimes, even dealers have to order few spare parts from area head office.
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2. Repeat purchase: A satisfied customer can not only refer others to purchase the product but can also purchase a new bike for himself. While conducting the survey I met number of such customers who have purchased TVS for second time. Out of total customers, who has changed bike more then once, 27% were loyal TVS customers whose both previous and current bike is TVS.
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EFFECTIVENESS OF PROMOTIONAL AND ADVERTISEMENTS CAMPAIGN From consumer behavior study we found that among various promotional campaigns reference campaign can give very positive results for customers in rural Punjab. Few regional level advertisement campaigns were also analyzed. PROMOTION EFFECTIVENESS: REFERENCE CAMPAIGNS Referring a friend or a relative to purchase a bike, comes naturally to customers in rural Punjab. By launching a reference campaign program we are just giving a small reason to TVS bike owner to refer their TVS bike to others. Figures given below reveal the power of such a promotional campaign: 1. Approx. 25% of people in rural Punjab purchased the brand, which was used by their friend or family members. They didnt search the market for the available brands; instead they brought the bike suggested by the friend. 2. 70% of people interviewed do refer bikes to other persons. 3. On an average, each person who bought the bike made at least one other person to purchase bike. 4. 64% of people will like to have a gift for referring bike to others. 5. 57% of people said that they will refer bikes to more persons, if they know that they will get a gift. Other promotional campaigns like loan festival, discounts etc. can only increase short term sales, while reference campaign can increase sales in long term also. Moreover, currently rural Punjab market is fully saturated in terms of other promotional campaigns. Cash Discounts, Loan festival no longer excite a customer and didnt offer a reason for customer to purchase a bike. These days customer didnt buy a bike because of a
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availability in low rate finance or because of some kind of discount, because these offers have become very common in past. And they have taken these schemes for guaranteed. The reference scheme was launched in the past also but at that time it was launched as a part of another major program, Miles & Smiles which has many other things, included in it. Reference was just a small part of it. Users hardly paid attention to the reference part of it. So we decided to come up with a separate reference campaign program, which will focus specifically on reference and will give benefit to both the person who has referred a bike as well as those who have purchased a new bike with reference.
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ADVERTISEMENT EFFECTIVENESS
For finding out the effectiveness of advertisement campaigns, information to find out the impact of these campaigns on customers and their likeability towards various kinds of promotional campaigns was collected. Few of findings were: Wall Paintings: 72% of people interviewed never pay attention to any wall paintings. Road Shows: Road shows turn out to be most effective. 83% of consumers interviewed had paid attention[ to road shows conducted by bike manufacturers. Cultural Nights: Only 19% of consumers interviewed have seen cultural nights, and most of them couldnt remember the organizers name. Mechanic encouragement: Only very few people ( 8% of those interviewed) take the guidance of mechanic these days. So we need not focus on emphasizing more on mechanic encouragement. The current measures in this regard are sufficient
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CONCLUSION 1. It can be observed that most of people who considered brands other then what they purchased, considered TVS. Also among the people who did not want to purchase TVS, 60% were willing to do so when informed properly about latest launches by TVS. So if more and more people are approached and properly informed, sales can increase. We need to focus on those customers who didnt survey the market and didnt consider various options available in market. More and more people can be informed by having wider reach in villages or by increasing the footfall in showroom. Few regional promotional campaigns focused at increasing the footfall in showroom are presented in recommendation part. 2. Psychological repositioning of TVS brand in minds of customers need to be done. This is especially for customers who initially did not want to purchase TVS but subsequently when properly explained showed interest in purchasing it. 3. Promotion based on pricing will be helpful in setting the mindset of people. Economical prices can be promoted through low pricing of one model. All models need not be priced low. 4. Promotions should have deeper reach; Customers who blindly considers Hero Honda need to be targeted. So promotions should be such that it gets into mind of peoples, not just ears. People who have not seen advertisements should saw it and people who have seen but still considered only Hero Honda, should consider TVS. As the scope of this project is limited to regional level promotions, few regional promotional campaigns are discussed later in report.
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5. Schemes like zero down payment are not required or sought after by consumers. Instead low rate of interest is always looked after in a finance scheme. Less documentation or few basic formalities can also help increase sales. 6. Non-availability of a strong sub-dealer in the nearby area can also be a deterring factor for purchasing TVS bikes. By strong sub-dealer, I mean the dealer who is in the business from the past few years and has got reputation that he can support service during the later years. 7. Also in places where sub-dealers are strong, sales can be increased if we can increase footfall in the showroom and thus familiarity with the showroom and people there. 8. Best way for promotion in area under study is through road show or cultural program instead of wall painting, banners. 9. Reference campaign, with proper advertisement can be highly successful for rural villages.
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RECOMMENDATIONS Reference Campaign: As clear from findings a full fledged reference campaigns can be launched in rural Punjab to increase long term sales. Proper care should be taken to avoid the prior defects in the similar reference campaigns. In this campaign, service manual of every new bike sold will have two coupons of bike reference. These will be given free of cost. Whenever a person refer someone for TVS bike, his coupon will be taken and entered for lucky draw, in this lucky draw he will get an assured gift worth Rs.200, or he can also win various other prizes including a TVS Bike. Following points should be taken care: 1. If possible, TVS should sponsor prizes directly, instead of dealer, this way dealer will not hesitate in promoting the scheme. 2. Promotions for this scheme will be there in TVS showrooms and service stations. Posters will be displayed in service stations, so that customers coming for service get reminded about this scheme and can know more about the scheme in detail from service centre only. Possible Improvements in promotional campaigns by Dealers / Sub-Dealers 1. At least two salespersons for the fields should be there at every sub-dealership. Though most of sub-dealerships have field salespersons but few didnt have any field salespersons, only salespersons for showroom. These salespersons should go to villages, set up a canopy at main entrance/main area and distribute pamphlets in the village. While distributing pamphlets, they can also inform the villagers that TVS people are there at the entrance/main area of village ad they can come if they want to have test-drive or any other clarification about TVS bikes.
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2. Timings of Sales people: It was found that in most of dealership timing of salesperson is between 10 a.m. to 6 p.m. At about 5:30 p.m. they used to start packing up. While potential customers in villages also are available in evening. So timings of field sales persons should be flexible and it should be made sure that they are promoting bike in evening. Part time workers can also be employed for this. 3. Each sub-dealer should have at least one canopy of its own. 4. Each dealership should have a Demo-Van of its own for promoting in its own area and areas of its sub-dealers. 5. Density of TVS Star bikes in villages should also be taken care. That is all the villages should have few Star-City bikes and villages with zero or very few Star Citys (like Bahadurgarh near Patiala) should be concentrated upon. This is important because reference is very important in villages. If we have few satisfied customers in village, we will automatically get orders because of mouth to mouth promotion. It is important to promote in villages where proportion of TVS bikes is less. So sub-dealers should focus on getting a break in villages where we have less proportion of TVS bikes. 6. Sales Persons should be trained and informed about how to defend their price. He should be able to explain to customer the difference between the competitors model ( e.g. Bajaj Platina ) and Star City. 7. Dealers/sub-dealers with TVS representative should contact factories for launching special scheme for employees of that company. 8. Dealers/ Sub-dealers should promote in nearby colleges.
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Free calendars / posters - Need to increase footfall As discussed above, it will be beneficial if number of footfalls in the showroom increases. So for that we need to design ways in which potential customer walks in not just for purchasing the bike but for other reasons as well. Some of such campaigns could be:1. Free distribution of calendars and posters: TVS is already distributing lots of posters and calendars, but in this promotional plan these things will be distributed only through showrooms. Advertisements will be given in newspaper mentioning that people can come, see and test drive Star City. And on presenting the cuttings of this advertisement they can take poster or caps of their choice and enter into a lucky draw coupon. Small Clipping of various available posters will be there in advertisement to attract people. Various possible options for posters will be a Star City bike, Apache, a sports bike, any TVS bike with a female model, a religious place poster etc. 2. Availability of accessories required for driving bike like Helmet, trendy jacket, caps, wrist bands etc. .
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Appendix 1 Check List for Personal Interviews Bike Owned (Model, Year)
1) Does bike you own currently, your first bike? (Y/N) If Yes, Why you purchased this bike? a. Utility ______________________________________________________ b. Style _______________________________________________________ c. Power ______________________________________________________ d. Social status Children, Neighbor etc. ____________________________ If No, What was brand of your old bike? ________________________________ Why you changed your old bike? a) Utility ______________________________________________________ b) Style _______________________________________________________ c) Power ______________________________________________________ d) Social status Children, Neighbor________________________________ 2) What is the special thing in the bike, because of which you purchased it? a. Price. b. Reference: Friend / Relative / Neighbor / Mechanic. c. Brand ....which one?___________ d. Technical features : Mileage/Pick up/Looks/Comfort. e. Finance Scheme. f. Exchange Mela. 3) Price you were willing to pay for a motorcycle: a. 30000-40000. b. 40000 50000 c. More then 50000 d. Doesnt matter or not important. 4) At the time of purchase, did you consider other brands before buying. (Yes / No) If Yes, which other brands were considered? ____________________ If No, Why you considered only this brand? _______________________________________________________________________ Vicky Sood To Study consumer buying behavior of 100cc motorcycle users in rural Punjab and suggest suitable promotional plans.
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5) Before buying, did you tried to gain knowledge about other available brands? (Y/N) 6) Did you visited TVS showroom before buying. (Yes/ No) 7) Would you like to purchase TVS. (Yes/ No). 8) Looking at specifications/features and price of Star City, would you like to purchase it. (Yes/no) 9) Will you like to opt for finance scheme? (Y/N) 10) What you look out for in a finance scheme? a. Low down-payment. b. Low EMI c. Low Interest Rate. d. Less Documentation. e. Long Term f. Short Term. 11) Did you look out for low down payment option? (Y?N)_______________________. 12) What is the comfortable down payment for you for purchasing a motorcycle. ______. (Less then 1000, 1000-3000, 3000-5000, 5000-7500, 7500 10000, 10000-15000, 15000-20000, 20000-25000, More then 25000) 13) What interest rate is acceptable to you?______________________ 14) How many bikes are there in your family?__________________ 15) Are u satisfied with the bikes you purchased (yes / no). 16) Have you referred/will you refer your bike to some one else. ( If Yes/ No) If Yes, How many bikes were purchased with your reference.___________ If no, Why you didnt referred your bike to others. ________________________________________________________________________ 17) Whose guidance you sought before buying the bike._________________________ (Mechanic, a motorcycle expert, a knowledgeable person in family) 17) Will you like to have some gift for referring someone to purchase your brand? (Yes / No) 18) If you are getting a gift, will you refer your bike to more persons. (Yes / No) 19) What you will like to have as a gift for referring others. _____________________________________________________________________ Vicky Sood To Study consumer buying behavior of 100cc motorcycle users in rural Punjab and suggest suitable promotional plans.
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a. Free extra service coupons for your bike. b. Free accessories for your bike. c. Free service or equivalent amount accessories for your bike.etc. 20) Where you generally notice advertisements other then TV? ________________________________________________________________________ 21) Have you ever notice wall paintings? Name few brands/products whose wall paintings you have noticed. ______________________________________________ 22) Have you ever noticed road shows? If Yes, whose___________________________ 23) Have you ever noticed cultural nights? If Yes, whose_________________________ 24) Do you have a sponsored calendar/poster at your home? Which company/shops calendar is that? _____________________________________________________ 25) Would you like to have TVS star poster/calendar at your home. ( Yes/No) 26) Which photograph you will like to have on the calendar? _______________________ ( e.g. a. TVS Bike b. Sports Bike. c. Some religious place like golden temple) 27) Which showroom you visited for buying ? A. You selected the bike and visited nearest showroom selling that bike. B. You visited the shop in which your relative/friend/villager works. C. Visited the shop from which you purchased your old vehicle. 28) Out of the following, which one do you think is most effective, or to which you are exposed the most? A. Wall Paintings B. Banners / Posters. C. Individual Posters given to you. D. Road Shows. E. Cultural Show / Dance night. 29) Give you views about TVS bikes. ________________________________________________________________________ 30) Suggest a punchline for a TVS ad-compaign. ________________________________________________________________________ ( like motorcycle hoven tann hovey TVS Star or TVS Star Pasand Punjabian Di
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Other Details Name: ____________________________ Age. : _________, Gender : _________( M / F) Phone No. __________________________ E-mail id : __________________________ Village : ____________________________ District_____________________________ Profession __________________________ Other comments ________________________________________________________________________ ________________________________________________________________________
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Reference: 1. www.tvsmotor.in, May 2007 http://www.tvsmotor.in/pressarticle.asp?id=26&aid=146. 2. www.icra.in, May 2007 http://icra.in/recentrel/Industry%20Monitor-200612.pdf
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MIP PHASE II REPORT

T O S T U DY C O N S U M E R BU Y I N G B E H AV I O R O F 1 0 0 C C M O T O R C Y C L E USERS IN RURAL PUNJAB & SUGGEST SUITABLE PROMOTIONAL P L A N S.

Name: Vicky Sood Roll No: 06164 Batch: 2006-2008

Date: 12 August 2007

T A PAI MANAGEMENT INSTITUTE, M A NI PA L , KARNATAKA-57 6 10 4

Organization TVS MOTORS

Faculty guide Prof. Simon George.

Date: August 12th, 2007

Faculty Guide: Prof. Simon George

I express my heartfelt gratitude to the above mentioned people.

Milestone for TVS Motors: y y

Entry Level (below 100 cc), Priced between Rs.32,000 - Rs 40,000

Star DLX, Star City, Star Sports and Centra.

- Victor GLX 125, Victor GX and Victor Edge y

- Fiero FX, Fiero F2, Fiero F3 and Apache

Motorcycle manufactures in India are: -

TVS Market Share 14%

Hero Honda 46.30%

TVS Entry level Star Centra Economy Victor

Bajaj Boxer Wave Discover Platina

Hero Honda CD Dawn CD Deluxe Splendor Passion Glamour

TVS Models Apache Fiero Market Share Vicky Sood 13.50%

Bajaj Pulsar Avenger 62.70%

Hero Honda CBZ Karizma 4.20%

So effectiveness of advertisement campaign launched at regional level was only measured.

INFORMATION TO BE COLLECTED FOR STUDY

DATA COLLECTION METHOD

Reference: 1. www.tvsmotor.in, May 2007 http://www.tvsmotor.in/pressarticle.asp?id=26&aid=146. 2. www.icra.in, May 2007 http://icra.in/recentrel/Industry%20Monitor-200612.pdf

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