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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.

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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

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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.

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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 two-
wheeler 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 two-
wheeler 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

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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 post-
reform period. In 1991, the shares of scooters were about 50 per cent of the total 2-
wheeler 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 de-
licensed. 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 Scooter Motorcycle Moped Total Growth %


FY92 769,955 428,118 408,022 1,606,095 -
FY93 709,725 379,060 414,567 1,503,352 (6.40)
FY94 840,173 472,582 457,471 1,770,226 17.75
FY95 1,033,524 652,012 523,700 2,209,236 24.80
FY96 1,223,425 809,527 627,079 2,660,031 20.41
FY97 1,301,051 978,682 683,756 2,963,489 11.41
FY98 1,262,699 1,131,314 648,842 3,042,855 2.68
FY99 1,325,868 1,395,657 681,902 3,403,427 11.85
FY2000 1,253,969 1,796,734 726,075 3,776,778 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 %) Scooter Motorcycle Moped


FY93 47.2 25.2 27.6
FY94 47.5 26.7 25.8
FY95 46.8 29.5 23.7
FY96 46.0 30.4 23.6
FY97 43.9 33.0 23.1
FY98 41.5 37.2 21.3
FY99 39.0 41.0 20.0
FY2000 33.2 47.6 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

Income
Annual income FY86 FY96
group
(Rs at FY96 Urban Rural Total Urban Rural Total

29
prices)
<=25,000 Low 42.1 73.6 65.2 27.9 57.2 48.9
25,001 - 50,000 Low Middle 35.8 21.4 25.2 34.9 29.0 30.7
50,001 - 77,000 Middle 15.2 4.0 6.9 20.3 8.6 11.9
Upper
77,001 - 106,000 3.9 0.7 1.5 9.6 3.1 5.0
Middle
> 106,000 High 3.1 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 FY86 to FY89 FY93 to FY96


Urban Rural Total Urban Rural Total
Low 0.93 -0.20 -0.01 -7.03 -3.03 -3.72
Low Middle 3.34 4.91 4.33 5.46 10.20 8.59
Middle 8.53 17.82 12.72 11.96 3.11 7.01
Upper Middle 18.52 16.39 17.83 11.90 12.25 12.06
High 9.57 13.90 10.65 18.22 15.68 17.14
Total 4.14 2.04 2.61 3.50 1.44 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 % OF RESPONDENTS


42 42%

18-25
34 34%

25-40
19 19%

40-55
5 5%

ABOVE 55
100 100%

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

No of 25
Respondents 20

15

10

0
18-25 25-40 40-55 >55
Age

Analysis:

42
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 No of Respondents % of Respondents


Business 18 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

30
No of Respondents

25

20

15

10

0
Business Pfsnl Emplye Stdnt Others
Occupation

Analysis:

44
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 % OF


RESPONDENTS
ADVERTISEMENT 38 38%

FRIENDS 24 24%

RELATIVES 10 10%

OTHERS 28 28%

TOTAL 100 100%

Source: survey data

INTERPRETATION: -

45
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


40.00% 38% HONDA

35.00%

30.00% 28%
% of Respondents

25.00% 24%

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 % OF
RESPONDENTS RESPONDENTS

YES 92 92%

NO 08 08%

TOTAL 100 100%

Source: survey data

47
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%

80.00%
% of Respondents

70.00%

60.00%

50.00% No of Respondent

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

120

100
No. of Respondents

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%

50.00%

40.00%
% of Respondents

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%

70.00%
% of Respondents

60.00%

50.00%

40.00%

30.00%

20.00%

10.00% 7%

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 RESPONDENTS
YES 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

70
No of Respondents

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

25
No of Respondents

20

15

10

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

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

20
No of Customers

15

10

0
tm

r
Z

re
+

n+

dr

ou
ti o

m
CB
aw
r

su
pl
nd

Ex
io

ri z

m
bi

rS
-D

ea
ss
l

la
Sp

BZ

Am

Ka
D
Pa

Pl
p
Su
C

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

40
No of respondents

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 QUESTIONS

1. TO ANALYSE CONSUMER a. HOW DID YOU COME TO


PERCEPTION TOWARDS HERO KNOW THE NAME HERO
HONDA BIKES HONDA
b. WHAT IS YOUR OPINION
ABOUT OVER 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 CONSUMER a. ARE YOU SATISFIED WITH THE


PERCEPTION 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 HELPS TO ANALYSE
THAT WHO 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

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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.

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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.

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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.

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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.

82
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.

83
BIBLIOGRAPHY

84
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

85
WEB SITE REFERRED

www.herohonda.com

www.herogroup.com

www.autoindia.com

86
ANNEXURE

87
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 40-55 >55

3. Sex Male Female

4. Occupation:-
Business Professional Employee

Student Others

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 Local Mechanic

89
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+ CD-Dawn C.B.Z

Ambition 135 Karizma Super Splendor

C B Z Extreme Glamour Pleasure

17. Rank the Companies as per your preference, Rank1-Most, Rank-Least

T.V.S Bajaj Yamaha

Honda Suzuki Others

90