Submitted in the partial fulfillment of requirement for the award of degree in Master of Business Administration (MBA) (2009-20011


Supervised by Narender tanwar Faculty B.S.A.I.T.M FARIDABAD

Submitted By Rahul Gandhi 09/MBA/040

Submitted to Controller of Examination Maharishi Dayanand University, Rohtak


Marketing should not be looked upon in a vacuum or in isolation. It is an essence taking a view of the whole business organization and its ultimate objective concern for marketing


must penetrate all areas of the enterprise. Market survey in today’s competitive world is a must for every organization. This project is a study of marketing strategy of Hero Honda. The rational behind this particular study is to find out the present market scenario of various brands & to find out the corporate need and perception. It was a pleasurable experience to conduct a research on behalf of Hero Honda pertaining to the study of the Automobile Sector. Conclusion and there by recommendation has been arrived at by proper and justified interpretation of the result derived from the above said analytical tools and techniques.


I Rahul Gandhi, Class MBA –IV Semester of B.S.A.I.T.M Faridabad hereby declare that the project entitled “MARKETING STRATEGY” HERO HONDA PVT.


LTD. is an original work and the same has not been submitted to any other institutions for the award of any other degree. The feasible suggestion has been duly incorporated in consultation with the supervisor.

Rahul Gandhi

I would like to thank Mr. Narender Tanwar assigning me a project to work on and for the help and guidance offered by them during my project work. Working with them was


Manager) who helped me get over my hard times during my sales job. A company’s implant welfare facilities have been kept in the course curriculum of the management program. I would like to thank all other staff members of HRD Dept. so that the candidates can get to know about the corporate world. The welfare facilities in a reputed concern like Crew were itself a great learning experience Rahul Gandhi TABLE OF CONTENTS S. PARTICULARS Page No.really a very good & learning experience. I also thank to BSAITM. industries. Also one gets a chance to visualize practically what has been taught theoretically. My thanks to all the financial advisors of Hero Honda especially Mr. I can never forget his support and encouragement. without their help it would have very difficult for me to carry out any of my work successfully. 4 . It increases my knowledge about markets in which future will be struggle.No. Ashish Kapoor (Regional Mkt. Faridabad who give me opportunity to work with Hero Honda.


• 6 . In the 90s the industry witnessed an average growth rate of above 20 percent.OVERVIEW OF AUTOMOBILE SECTOR IN INDIA • The Automobile sector is one of the fastest growing manufacturing sectors in India.

ranking second only to Taiwan. precision aluminum castings. manufacturing components such as grey-iron castings. delivery valves. nozzles. front axles. The world leaders in the sector are evincing keen interest in establishing manufacturing facilities for manufacturing and assembling components. which would give a proper direction to the growth of the sector. broad base of auto component manufacturers. clutch covers. diesel fuel injection equipment. electronic regulators.etc. pistons. cylinder liners. gears. international airports. highly trained. alternators. starter motors. skilled and disciplined manpower and is therefore. pressed metal components. assured and reliable power supply. oils and lubricants. • ABOUT THE COMPANY 7 . the preferred location for Automobile industries. who have indicated their interest to consider Andhra Pradesh for establishing manufacturing facility. • • • The interest of the state has been duly noted by Global Auto Majors. fuel filters .• Indian Automobile Industry is characterized by a very high percentage (75 per cent) of two wheeler production. There are more than 20 auto –component manufacturing companies in the State. A politically stable and vibrant State. leaf springs. high pressure die castings. abundant water. Andhra Pradesh is centrally located with the support of seaports. machined components. • The Government is also formulating an Auto Policy. forging. electronics and auto electronics and auto electrical.

A relationship so harmonious that Hero Honda has managed to achieve indigenization of over 95 percent. Hero Honda Motors Ltd. Its commitment of providing the customer with excellence is self-evident. Its unique features like fuel conservation. safety riding courses and mobile workshops helped the group reach in the interiors of the country. turned its attention overseas. Tactical promotions and excellent marketing helped Hero Honda establish itself as an intelligent purchase. and exports have been steadily on the rise. Finance services helped facilitate purchase. a Honda record worldwide. Its main Models are o o Cbz Splendor 8 . A rich background of producing high value products at a reasonable price led the world's largest manufacturer of motorcycles to collaborate with the world's largest bicycle manufacturer. as did an efficient dealer network across the country. Well-entrenched in the domestic market. It was this affinity in working cultures of Honda Motor Company of Japan and the Hero Group that resulted in the setting up of Hero Honda Motors Ltd.Hero Honda has a reputation of being the most fuel-efficient and the largest selling Indian motorcycle.

o o o o o o o CD100 Cd100ss Street smart Passion Karizma CD dawn Ambition 135 VISION OF THE COMPANY 9 .

Brijmohan Lal Munjal. technological innovation. and reliable after sales service. “We will continue to make every effort required for the development of the motorcycle industry. In the words of Mr. investment in equipment and facilities and through efficient management”. the world’s largest bicycle manufacturers and the Honda Motor Company of Japan. and you have one of the most customer-friendly companies. has today become the World’s single largest two wheeler Company. OBJECTIVE OF THE STUDY 10 . Hero Motors Limited gave India nothing less than a revolution on two-wheels. the Hero Honda product range today commands a market share of 48% making it a veritable giant in the industry. Coming into existence on January 19. Add to that technological excellence. an expensive dealer network. made even more famous by the ‘Fill it – Shut it – Forget it ‘campaign.The Legend of Hero Honda What started out as a Joint Venture between Hero Group. the Chairman and Managing Director. through new product development. 1984. Driven by the trust of over 5 million customers.

To provide useful information to the company about the product features of various competiting companies. 7. To study the market strategies followed by Hero Honda. 5. 4.1. 8. To find out the customer preference towards the product of the company. To find out the promotional tools used by Hero Honda. 9. 6. To study the impact of advertising by Hero Honda. 2. 3. To study the features of different brands that gives a good idea of various products and services offered by the company. INDUSTRY SCENARIO 11 . To find out the total market share of Hero Honda. To study the brands of Hero Honda & consumers perception about the product of hero Honda. To understand the competitive environment in which the company is operating and is desired to meet customer need and satisfaction.

In the present scenario of automobile industry the major companies are: Manufacturers Products % of market share 75% market share 25% market share 30% market share 15% market share 15% market share 10% market share HERO HONDA BAJAJ AUTO LML TVS YAMAHA ENFIELD Motorbikes Scooter+Motorbikes Scooter+Motorbike Motorbikes Motorbikes Motorbikes 12 .

Hero Honda Glamour F1 13 .

3 x 57.4 Ps ) @ 8500 rpm 12.7 cc 6. of Variants Quantum Core 124.6 KW ( 14. Silver. Blue.52 P / 6 PR 35/35 W Halogen Bulb (Multi-Reflector) Kick / Self Drum / Disc Drum 4 Hero Honda CBZ Xtreme The 4 Stroke. Technical Specifications Engine Displacement Maximum Power Maximum Speed Gears Frame Tyre Size (Front) Tyre Size (Rear) Headlight Starting Brakes (Front) Brakes (Rear) No. Air Cooled speed machine from Hero Honda is a cool one.75 x 18 . We have all the five colors in Black.72 KW (9 BHP) @ 7000 rpm 95 kmph 4 Gears Tubular Double Cradle 2.42 P / 4 PR 3.00 x 18 . Green & Red available with us.2 c.8 mm 14 . 4 Stroke Single Cylinder OHC 149.We are one of the major exporters of Hero Honda Glamour F1.c Single cylinder . Technical Specification Type Displacement Cylinder Arrangement Maximum Power Maximum Torque Bore x Stroke Air Cooled. Vertical Engine 10. It gives us a sense of pride to forward this gleaming machine to our clientele that is Hero Honda first fuel injection technology-driven motorcycle.80 N-m @ 6500 rpm 57. Single Cylinder.

Compression Ratio Carburetor Starting Idle speed Ignition Clutch Gear box Type Front Rear Rim Size Tyre Size Battery Head Lamp Tail Lamp Stop Lamp Fuel tank capacity Reserve Length Width Height Wheelbase Ground clearance Minimum turning radius Kerb weight 9.Advanced Microprocessor Ignition System Multiplate wet 5 Speed constant mesh Tubular .7 Ah ( Self ) 35W / 35W .5W ( LED LAMPS) 12V / 5 W ( LED LAMPS) 12. Alloy Wheels Front 12. Diamond Type Disc Dia 240 mm Disc .75 x 18 .Non Asbestoes type Drum Internal expanding shoe type ( 130 mm ) .5 Ltrs ( Usable reserve ) 2080 mm 765 mm 1145 mm 1325 mm 145 mm 2.15 .3 Ltrs ( Min ) . Alloy Wheels Rear 8 x 2.V Type Self Start / Kick Start 1400 rpm + 100 AMI .Non Asbestoes type Front 18 x 1.42 P Rear 100/90 x 18 .56P ( With Tuff-up Tube) 12 V . 15 .85 .Halogen Bulb ( Multi-Reflector Type ) 12V / 0.1 :1 C.10 mtrs 141 Kg (Kick) / 143 Kg (Self).

Technical Specification 16 .8 Liters Black.75 X 18 3.5 BHP @ 8000rpm 4 Speed CDI 130mm Drum 110mm Drum 2.2cc 7. Silver. Single Cylinder. providing a smooth ride and coping up efficiently with sudden jerks due to the uneven road and bumps has made Hero Honda CD Dawn a popular bike. Power Gear Box Ignition Front Brakes Rear Brakes Front Tyre Rear Tyre Wheelbase Ground Clearance Dry Weight Tank Capacity Colours 4 Stroke.00 X 18 1235mm 159mm 116 Kg 12.Hero Honda Splendor We deal in one of the most successful bikes in Indian motorcycling history . Air Cooled 97.Hero Honda Splendor. The bike is available in a number of shades and models Technical Specification Engine Cubic Capacity Max. Blue & Red Hero Honda CD Dawn The shock absorbing rear suspension.

Air Cooled 97. It has rotary gears. Air Cooled 97. Single Cylinder. Power Gear Box Ignition Front Brakes Rear Brakes Front Tyre Rear Tyre Wheelbase Ground Clearance Dry Weight Tank Capacity 4 Stroke.Engine Cubic Capacity Max. Single Cylinder.2 cc 7.5 Ah Kick Starter The Street 100 is Hero Motor's latest two-wheeler on offer in the step-through category.00 X 18 1230mm 160mm 114 Kg 10.2cc 7.2.75 X 18 3.5 Liters Hero Honda Passion Technical Specification Engine Displacement Maximum Power Ignition Frame Head Light Final Drive Battery Starting 4 Stroke.5 ps at 8000 rpm Electronic CDI Tubular Double Cradle Halogen Bulb 35 W / 35 W Roller Chain 12 V . which allow the rider to flip 17 . The Hero Honda Street 100 is equipped with unique features like city-clutch. which is designed specially for city driving.4 BHP @ 8000rpm 4 Speed CDI 130mm Drum 110mm Drum 2.

a must for the present ‘stop-and-go’ traffic.the maximum capacity this modular design theme can be taken to. larger luggage tray. etc.50x17" KARIZMA If you look at the 223c mill of the Karizma. the liberal use of plastics negates much of the ‘feel good’ factor and has hindered sales to a large extent.2cc Tachometer : N/A Max Power : N/A Wheel base : 1. The crankcase is of virtually the same size though the covers do have some detail differences and the engine mounts are the same as in the other two bikes and completing the picture are the scaled-up barrel (with an additional fin) and head. you can make out the familiar streak that runs through the engines on the CBZ and the Ambition. Its major competitor is the much cheaper K4 from Kinetic. Technical Specifications Engine : Four-stroke/petrol Transmission : Four-speed Engine Displacement : 97.25x17" Rear Tyre size : 2.directly from the fourth gear to neutral once the bike has come to a halt. 18 . spray can. The Street can be purchased with a variety of seat layouts and has options like a water pump.205mm Ground Clearance : 133mm Ignition : Electronic Dry Weight : 101kg Fuel tank Capacity : 11litres Battery : 12V F/R suspension : Telescopic R/R suspension : Swing arm and Hydraulic dampers Max Speed : N/A Front Tyre size : 2. No prizes on this count as to the reason but the 223cc Karizma engine represents .for the moment . However. Major plus points that justify the higher price are the centrifugal clutch and the rotary gears. A self-starter button comes as an option.

The single overhead cam motor features slightly undersquare cylinder dimensions with a 65. the Karizma engine develops 16.76bhp at 7000rpm and 18.2mm stroke to give a 223cc swept volume. for low and high speed operation. an air cut off valve (to prevent afterburning in the exhaust muffler) and like on the CBZ and Ambition. With all this and the extra cubic capacity. ENGINE: TRANSMISSION: 19 .0 : 1) for silent running and good power delivery while also giving it the latest Keihin VE 3EA constant vacuum type carburettor which also packs in the CCVI switch. This time round Hero Honda has not faulted and equipped the engine within electric starter even though the kick starter to be actuated requires the front right footrest to be folded out of the way.5mm bore and a 66. Hero Honda has designed in the latest convex-type combustion chamber (compression ratio being of two ignition maps. Transmission is via a five-speed gearbox which has had its final drive ratios revised from those in the CBZ. This is about 2bhp and 5Nm more than what the Pulsar 180 makes but the reasoning is that the engine had to be stress free and this fact holds true when out on the roads. an air injection valve to keep tail pipe emissions in check.35Nm of torque at 6000rpm. This was one area which disappointed appreciably in the CBZ wherein the engine sounded and felt harsh as one went past the middle range but here this detail has eliminated such The all aluminum alloy engine (with pressed-in steel liner) features an automatic cam chain tensioner. A stronger multi-plate clutch is used to take care of the enhanced power and torque figures. The CCVI term stands for carb-controlled variable ignition timing which as it suggests actuates via throttle position .

20 .

marketing is defined as "the management process that seeks to maximize returns to shareholders by developing relationships with valued customers and creating a competitive advantage. business planning and execution. because the academic study of marketing makes extensive use of social sciences. anticipating and satisfying customer requirements profitably. psychology. and exchanging offerings that have value for customers. economics. anthropology and neuroscience. distribution and selling. It is also related to many of the creative arts. communicating. The marketing literature is also adept at Re-inventing itself and its vocabulary according to the times and the culture. and society at large. clients. Marketing is a product or service selling related overall activities.” A different concept is the value-based marketing which states the role of marketing to contribute to increasing shareholder value.[5] whose methods can be improved using a variety of relatively new approaches. the profession is now widely recognized as a science." Marketing practice tended to be seen as a creative industry in the past. delivering.and post-sales promotional activities. allowing numerous universities to offer Master-of-Science (MSc) programmes. The overall process starts with marketing research and goes through market segmentation. In this context.Marketing is defined by the American Marketing Association (AMA) as "the activity. [4] The term developed from an original meaning which referred literally to going to a market to buy or sell goods or services. sales process engineering marketing is "a set of processes that are interconnected and interdependent with other functions. mathematics. ending with pre. which included advertising." The Chartered Institute of Marketing defines marketing as "the management process responsible for identifying. However. sociology. set of institutions. Seen from a systems point of view. and processes for creating. 21 . partners.

Strategies in game theory may be random (mixed) or deterministic (pure). In military usage strategy is distinct from tactics. a strategy refers to one of the options that a player can choose. whereas if the opponent does C.g. in a dialectic of wills – there have to be at least two sides to a conflict. A strategy must specify what action will happen in each contingent state of the game e. Building on the work of many thinkers on the subject. then take action B. In game theory. in which only probabilities 0 or 1 are assigned to actions. one can define strategy as "a comprehensive way to try to pursue political ends. take action D. That is. a word of military origin. if the opponent does A. while strategy is concerned with how different engagements are linked. operations. including the threat or actual use of force. players choose mixed strategies. and must choose one of the choices. How a battle is fought is a matter of tactics: the terms and conditions that it is fought on and whether it should be fought at all is a matter of strategy. 22 .Strategy. These sides interact. which is part of the four levels of warfare: political goals or grand strategy. in some games. refers to a plan of action designed to achieve a particular goal. That is. and tactics. and thus a Strategy will rarely be successful if it shows no adaptability. every player in a non-cooperative game has a set of possible strategies. strategy. which are concerned with the conduct of an engagement. Pure strategies can be thought of as a special case of mixed strategies.

A marketing strategy often integrates an organization's marketing goals. 23 . defining how the organization will successfully engage customers. A marketing plan contains a set of specific actions required to successfully implement a marketing strategy. Many companies cascade a strategy throughout an organization. A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement. higher-margin products and services that enhance the consumer's interaction with the low-cost product or service.Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable advantage. Marketing strategy is a method of focusing an organization's energies and resources on a course of action which can lead to increased sales and dominance of a targeted market niche. has established a relationship with consumers. and explains how they will be achieved. This is why it is important to make each strategy goal measurable. A marketing strategy should be centered on the key concept that customer satisfaction is the main goal. channel marketing. Marketing strategies serve as the fundamental underpinning by marketing plans designed to fill market needs and reach marketing objectives. pricing. which might include advertising. promotion. marketing mix. relationship management and other elements. and competitors in the market arena. Marketing strategies are dynamic and interactive. positioning. identifies the firm's marketing goals. A marketing strategy combines product development. policies. Similarly." A strategy consists of a well thought out series of tactics to make a marketing plan more effective. prospects. Corporate strategies. Once our organization. and allocation of resources. corporate missions. Plans and objectives are generally tested for measurable results. As the customer constitutes the source of a company's revenue. It is most effective when it is an integral component of overall firm strategy. promotion and public relations can be orchestrated. the various strands of the strategy . distribution. Each group is expected to take that strategy goal and develop a set of tactics to achieve that goal. via our low cost product. marketing strategy is closely linked with sales. and corporate goals. For example: "Use a low cost product to attract consumers. ideally within a stated timeframe. by creating strategy tactics that then become strategy goals for the next level or group. our organization will sell additional. and action sequences (tactics) into a cohesive whole. A marketing strategy can serve as the foundation of a marketing plan. internet marketing. Marketing strategy determines the choice of target market segments. They are partially planned and partially unplanned.

SWOT Analysis of HERO HONDA 24 .

The technique is credited to Albert Humphrey. • • • • Strengths: characteristics of the business or team that give it an advantage over others in the industry. who led a convention at Stanford University in the 1960s and 1970s using data from Fortune 500 companies. Strategic Planning has been the subject of much research. Threats: external elements in the environment that could cause trouble for the business. the decision makers have to determine whether the objective is attainable. A SWOT analysis may be incorporated into the strategic planning model. First. The SWOT analysis is often used in academia to highlight and identify strengths. A SWOT analysis must first start with defining a desired end state or objective. given the SWOTs. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. opportunities and threats. Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs. weaknesses.SWOT analysis is a strategic planning method used to evaluate the Strengths. Weaknesses: are characteristics that place the firm at a disadvantage relative to others. Opportunities. and Threats involved in a project or in a business venture. If the objective is NOT attainable a different objective must be selected and the process repeated. Weaknesses. Opportunities: external chances to make greater sales or profits in the environment. It is particularly helpful in identifying areas for development Internal and external factors 25 .

The results are often presented in the form of a matrix. The importance of individual SWOTs will be revealed by the value of the strategies it generates. External factors – The opportunities and threats presented by the external environment to the organization. For example. 26 . What may represent strengths with respect to one objective may be weaknesses for another objective. SWOT analysis groups key pieces of information into two main categories: • • Internal factors – The strengths and weaknesses internal to the organization. It also presents the resulting lists uncritically and without clear prioritization so that. weak opportunities may appear to balance strong threats. It is prudent not to eliminate too quickly any candidate SWOT entry. as well as changes in the marketplace or competitive position. it may tend to persuade companies to compile lists rather than think about what is actually important in achieving objectives. The external factors may include macroeconomic matters. A SWOT item that produces valuable strategies is important. and sociocultural changes. technological change. for example. A SWOT item that generates no strategies is not important. These come from within the company's unique value chain. - The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organization's objectives. as well as personnel. The factors may include all of the 4P's. SWOT analysis is just one method of categorization and has its own weaknesses. manufacturing capabilities. legislation. and so on. finance.The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective.

6. 8. 9. 3. 2. Huge brand equity/reputation among customers. Models/products in almost every bike segment. Strong Research & Development.Strength 1. 4. Awareness in the people. 10. Strong Resale Value. Healthy growth in profits. Dedicated Human Resource. 7. Highly competitive features neology with international collaboration. 27 . 5. Quality product for each category. Brilliant relations with customers and dealers.

Very difficult to cop up if contract discontinues. 8. 28 . 6. 9. 3. HHML can still make it up by launching a strong model in 150cc segment. 5.late entrants into the 125cc segment. Low cash reserves. Cruiser bike segment is unexplored by HHML. Virtual absence in the highly lucrative bike segments Imports >31% of its spare parts requirements. 6. It will be a great threat for Hero is the collaboration breaks up. Strong competition from Bajaj. Absence of digital speedometer except Karizma. Opportunities 1. 125cc bike segment . Bikes Segment is still a fast growing sector. 7. Variants can be launched to increase the market share. 2. 2. Slow to react to market changes. 3.Slow innovation. 4. 4. Hero Honda is the most reliable bike manufacturer in India strong brand follower. Exports market is yet to be properly exploited. 7. Hero Honda will need to have a bigger presence in the executive segment. Too much dependence on few models. 3. 5. 5. Low cash reserves due to massive dividend payouts. Absence of variants except Hunk. Yamaha & TVS. All major bike makers in the world are lining up for India.This segment is yet to pick pace.Weakness 1. 4. 2. Threats 1. 6. Absence in 150cc could harm the growth plans of HHML as future lies in the 150cc and 125cc markets. Hero is very much dependent on Honda.

Segmentation of Hero Honda 29 .

generation. income. by personality type). habits or even dress codes are representative examples in this regard. In the South Asian context. nationality and social class. buyers are divided into different groups on High Resources High within the the basis of psychological/personality traits. In psychographic segmentation. Another is that they’re easy to measure. occupation. religion. across different countries. The strict norms that consumers follow with respect to food. geographic segmentation assumes importance due to variations in consumer preferences and purchase habits across different regions. race. or values. family size. Values and Motivation lifestyles significantly affect product and brand choice of consumers. PeopleInnovation same Primary demographic group can exhibit very different psychographic profiles. Innovators Low Resources Low Innovation 30 . states. countries. Psychographic Segmentation Psychographics is the science of using psychology and demographics to better understand consumers. we divide the market into groups on the basis of variables such as age. cities. lifestyle. Demographic Segmentation In Demographic Segmentation. Even when we describe the target market in nondemographic terms (say. regions. and across different states in these countries. family life cycle. Religion has a significant influence on values and lifestyles. One reason demographic variables are so popular with marketers in that they’re often associated with consumer needs and wants. we may need the link back to demographic characteristics in order to estimate the size of the market and the media we should use to reach it efficiently.Geographical Segmentation Geographic Segmentation calls for division of the market into different geographical units such as nations. education. or neighborhoods.

mature. and value in products. 3. excitement. “take. enthusiastic. Purchases often reflect cultivated tastes for relatively upscale. functionality. Achievers. goal-oriented people who focus on career and family. satisfied.Young. impulsive people who seek variety and favor premium products that demonstrate success to their peers 4. niche-oriented products and services. they Experiences. and reflective people who are motivated by ideals and who value order. knowledge and responsibility.Ideals Thinker s Achievement Self-expression Achieve rs Experie nces Believer s Strivers Makers Survivors The four groups with higher resources are: 1. The four groups with lower resources are: 31 . active. They seed durability. Innovators: - successful. 2.charge” people with high self-esteem. sophisticated. entertainment and socializing. Thinkers.successful. They spend a comparatively high proportion of income on fashion.

They favor stylish products that emulate the purchases of those with greater material wealth. and traditional people with concrete beliefs. Behavioral Variables: - Many marketers believe behavioral variables-occasions. Survivors. usage rate.Practical. Believers. Influencer. 4. marketers divide buyers into groups on the basis of their knowledge of. self-sufficient people who like to work with the hands.Elderly. Recognition of the different buying roles and specification of the people who play these roles for specific products and services are vital for marketers. They are loyal to their favorite brands. or response to a product. loyalty status. use of. Decider. They prefer familiar products and are loyal to established brands. Decision Roles: . conventional. Makers. This is especially useful for designing the communication strategy. 2. Behavior Segmentation: In behavioral segmentation. passive people who are concerned about change. 3. They seek products with a practical or functional purpose. user status. down-to-earth. and attitude-are the best starting points for constructing market segments. Buyer and User. benefits.People play five roles in a buying decision: Initiator.conservative.trendy and fun-loving people who are resource constrained. Market Targeting: Effective Segmentation Criteria 32 .1. Strivers. buyer readiness stage. attitude toward.

for an automobile manufacture to develop cars for people who are less four feet tall. If married and unmarried women respond similarly to a sale on perfume. The segments are conceptually distinguishable and respond differently to different marketing-mix elements and programs.  Substantial. they do not constitute separate segments. market segments must rate favorably on five key criteria:  Measurable. purchasing power and characteristics of the segments can be measured.To be useful. The segments can be effectively reached and served. Effective programs can be formulated for attracting and serving the segments. A segment should be the largest possible homogenous group worth going after with a tailored marketing program.Segment Concentration M1 P1 P2 P3 M2 M3 Selective Specialization M1 M2 M3 33 . for example. Evaluating and Selecting the Market Segment Single.   Accessible. the size.  Actionable. The segments are large and profitable enough to serve. Differentiable. It would not pay.

P1 P2 P3 Product Specialization M1 M2 M3 P1 P2 P3 Market Specialization M1 M2 M3 P1 P2 P3 Full Market Coverage 34 .

The firm makes a certain product that it sells to several different market segments. This multisegment strategy has the advantage of diversifying the firm’s risk.M1 M2 M3 P1 P2 P3 Single Segment Concentration: . heart specialty. Especially hospitals focus on specific therapeutic areas such as cancer care. Selective specialization: . distribution and promotion. the firm can earn a high return on its investment. If it captures segment leadership. When Procter & Gamble launched crest Whitestrips. initial target segments included newly engaged women and brides to be as well as gay males. 35 . Product specialization: . The downside risk is that the product may be supplanted by an entirely new technology. but each promises to be moneymaker. A microscope manufacturer. The Zodiac brand concentrates on formal shirts for executives and professionals. Hero Honda used Product Specialization for target market of Hero Honda Splendor. sells to university.A firm selects a number of segments. each objectively attractive and appropriate. Through concentrated marketing. the firm enjoys operating economies through specializing its production. neonatal care and gynecology. government. The firm makes different microscopes for the different customer groups and builds a strong reputation in the specific product area. There may be little or no synergy among the segments. primarily targeted at agricultural markets. Furthermore.The farm equipment division of Mahindra & Mahindra concentrates on tractors. and commercial laboratories. for instance. the firm gains a strong knowledge of the segment’s needs and achieves a strong market presence.

General motors’ (vehicle market). Company A meets all the computer needs of airlines. Additional considerations Two other considerations in evaluating and selection segments are segment-by-segment invasion plans and ethical choice of market targets. Elderly consumers who don’t feed their age may not appreciate products that identify them as “old” market targeting also can generate public controversy. Large firms can cover a whole market in two broad ways: through undifferentiated marketing or differentiated marketing. For instance. passenger transport. 36 . The downside risk is that the customer group may suffer budget cuts or shrink in size. Segment-by-segment invasion plans: . Segment-by-segment invasion plans are illustrated three firms. Such as Microsoft (software market).The firm concentrates on serving many needs of a particular customer group. a firm can sell an assortment of products only to university laboratories. can undertake a full market coverage strategy. Serve food packaging because they don’t want to be reminded they are eating alone. Some consumers may resist being labeled. Only very large firms.The firm attempts to serve all customer groups with all the products they might need. Full market coverage: . Competitors must not know to what segment(s) the firm will move into next. The firm gains a strong reputation in serving this customer group and becomes a channel for additional products the customer group can use.Market specialization: . and goods transport companies. Ethical choice of market targets: . A. B. and coca-cola (nonalcoholic beverage market). Singles may reject single. and C. have specialized in adapting computer systems to the needs of airlines.marketers must target segments carefully to avoid consumer backlash.A company would be wise to enter on segment at a time.

TARGETING & POSITIONING From the current segmentation. Competitive analysis will consider a whole host of factors-including the resources.Positioning: Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the minds of the target market. Everyone in the organization should under. mostly officials & executives The client analysis from our questionnaire it was found that our client has targeted the right segment HHML & TVS is overlooking one feature in bike which is its low maintenance cost and reliability (i. ♦ Males/Females between the age group of 18-36 ♦ Middle class people . Therefore. the goal is to locate the brand in the minds of consumers to maximize the potential benefit to the firm. in order to meet the sales target. two options are available with the client. and how it does so in a unique way. 37 . A good brand positioning helps guide marketing strategy by clarifying the brand’ essence. capabilities and likely intension of various other firms-in choosing those markets where consumers can be profitably served. less chances of breakdown) which is absent in its competitors. SEGMENTATION. targeting & positioning and consumer surveys we found that our client has targeted the following segments: ♦ Congested areas of urban cities. Since redesigning of bike may involve a big task and huge investment therefore we recommended repositioning the bike. what goals it helps the consumer achieves.stand the brand positioning and use it as context for making decisions. one is to redesign the bike and second is to reposition the bike as “Bike with one time investment”.e. Competitive Frame of Reference A starting point in defining a competitive frame of reference for a brand positioning is to determine category membership-the products or sets of products with which a brand competes and which function as close substitutes.

3. 38 . Handle. 2. Gear box and chain set etc. Basic Product: The basic product of Hero Honda splendor are Engine. Shockers. It should be 5 gear boxes. It provides fast service of the product. It should be steel body. 4.Product:Core Product: The core product or benefit of Hero Honda Splendor is Traveling and saving the time by reach on desire place at right time. 5. Wheels. Augmented Product: The augmented products of Hero Honda Splendor are: 1. Expected Product: The expected products of Hero Honda splendor are: 1. Hero Honda Used penetration pricing strategy because that time Hero Honda use National Segment and low income persons so they used penetration strategy. It should be 120 Km/hour Maximum speeds. It should be disk brake or power brake. 2. It provides monthly check up for decrease the pollution. Pricing Strategy: Penetration Pricing: The price charged for products and services is set artificially low in order to gain market share. It should be 90 Kmpl mileages. This approach was used by France Telecom and Sky TV. Once this is achieved. the price is increased.

penetration pricing. the advantage is not sustainable. Once other manufacturers were tempted into the market and the watches were produced at a lower unit cost. Premium pricing. However there are other important approaches to pricing.Price Skimming: Charge a high price because you have a substantial competitive advantage. They form the bases for the exercise. Hero Honda used Above the Line Promotion because in the Above the Line promotion co. and internet.V. economy pricing. The high price tends to attract new competitors into the market. Newspaper and Other media communications. 39 . and price skimming are the four main pricing policies/strategies. Major above-the-line techniques include TV and radio advertising. This type of communication is conventional in nature and is considered impersonal to customers. other marketing strategies and pricing approaches are implemented. Those consumer items where the customer will rely on immediate information than previously researched items. newspapers. Manufacturers of digital watches used a skimming approach in the 1970s. The ATL strategy makes use of current traditional media: television. members used advertisement through Radio. T. magazines. and the price inevitably falls due to increased supply. However. print advertising and internet banner ads. outdoor.. Promotion: Below the Line Promotion: - ‘Below The Line is a common technique used for touches and feel products. Below The Line techniques ensure recall of the brand while at the same time highlighting the features of the product. Above The Line Promotion: Above the line (ATL) is an advertising technique using mass media to promote brands. radio.

International Hero Honda used National Market for sale the Hero Honda Splendor.Geographical placing of the product has divided into 4 markets and these are: 1. 40 .Place: Geographical Placing: . National 3. Local 2. Regional 4.

41 .

16 48.70 70.06 0.96 49.62 55.00 87.32 58.02 97.06 147.62 100.76 72.84 14.95 -25.05 142.34 47.24 20.52 173.19 43.75 10.55 518.06 93.57 0. st loans) Quick ratio Inventory turnover ratio Payout ratios Dividend payout ratio (net profit) Dividend payout ratio (cash profit) Earning retention ratio Cash earnings retention ratio Coverage ratios Adjusted cash flow time total debt Financial charges coverage ratio Fin.15 218.23 188.24 43.46 0.56 0.26 42.00 68.18 92.45 42 .65 0.50 19.01 0.96 17.38 20.09 50.89 0.64 54.27 9.49 42.48 46.45 0.44 49.77 121.06 11.00 60.63 0.76 5.93 47.29 0.76 113.70 496.00 58.13 6.79 190.Ratios Per share ratios Adjusted EPS (Rs) Adjusted cash EPS (Rs) Reported EPS (Rs) Reported cash EPS (Rs) Dividend per share Operating profit per share (Rs) Book value (excl rev res) per share (Rs) Book value (incl rev res) per share (Rs.29 39.62 15.07 0.70 123.33 190.70 12.55 13.41 41.67 9.36 0.22 12.21 100.73 33.00 69.50 73.14 84.00 14.53 68.33 617.26 44.09 91.40 173.22 11.34 0.51 53.02 0.12 48.33 0.00 137.04 105.15 71.32 16.73 43.86 -15.16 111.53 11.01 98.45 31.52 793.06 0.57 0.57 0.88 41.53 36. charges cov.13 10.73 42.30 10.48 0.19 55.31 42.18 48.19 123.62 436.06 0.72 8.01 0.48 0.52 17.56 0.48 0.11 14.07 121.04 0.84 30.80 115.84 30.39 47.50 67.34 60.19 73.82 45.50 149.04 95.73 6.74 111.59 28.31 0.18 93.16 37.64 98.22 171.35 110.55 149.53 6.65 46.02 255.31 47.01 65.) Net operating income per share (Rs) Free reserves per share (Rs) Profitability ratios Operating margin (%) Gross profit margin (%) Net profit margin (%) Adjusted cash margin (%) Adjusted return on net worth (%) Reported return on net worth (%) Return on long term funds (%) Leverage ratios Long term debt / Equity Total debt/equity Owners fund as % of total source Fixed assets turnover ratio Liquidity ratios Current ratio Current ratio (inc.09 0.13 108.33 70.ratio (post tax) Component ratios Material cost component (% earnings) (Rs crore) Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 102.58 8.80 46.48 0.55 64.47 56.35 50.97 5.72 43.14 32.95 60.48 0.44 73.41 75.46 0.87 64.86 39.11 34.33 14.

98 59.98 59.98 43 . in raw mat.66 2.35 2.65 0.90 1.98 59.11 4.10 1.80 4.66 0.78 59.98 59.67 1.Selling cost Component Exports as percent of total sales Import comp.63 2.77 0.79 0.72 4.69 0.86 5.13 2. consumed Long term assets / total Assets Bonus component in equity capital (%) Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 4.82 0.01 2.80 0.

why. and where people do or do not buy a product.What is Consumer Behavior? Consumer behaviour is the study of when. It blends elements from psychology. social anthropology and 44 . how. sociology.

personalization. Each method for vote counting is assumed as social function but if Arrow’s possibility theorem is used for a social function. neutrality. payer and buyer. social welfare function is achieved. facility expansion.economics. Relationship marketing is an influential asset for customer behaviour analysis as it has a keen interest in the rediscovery of the true meaning of marketing through the re-affirmation of the importance of the customer or buyer. customer relationship management. The most important characteristic of a social function is identification of the interactive effect of alternatives and creating a logical relation with the ranks. It also tries to assess influences on the consumer from groups such as family. and many other aspects of a company. A greater importance is also placed on consumer retention. purchase. the consumer. both individually and in groups. Marketing provides services in order to satisfy customers. With that in mind. customization and one-to-one marketing. the productive system is considered from its beginning at the production level. Customer behaviour study is based on consumer buying behaviour. work force expansion/contraction. purchases of capital equipment. Dimensions of market analysis David A. to the end of the cycle. with the customer playing the three distinct roles of user. anonymity. What is marketing analysis? A Market analysis is a documented investigation of a market that is used to inform a firm's planning activities particularly around decisions of inventory. It attempts to understand the buyer decision making process. homogeneity and weak and strong Pareto optimality. unanimity. No social choice function meets these requirements in an ordinal scale simultaneously. It studies characteristics of individual consumers such as demographics and behavioural variables in an attempt to understand people's wants. promotional activities. Aaker outlined the following dimensions of a market analysis Market size (current and future) 45 . friends. reference groups. and society in general. Some specifications of the social functions are decisiveness. Social functions can be categorized into social choice and welfare functions. monotonic.

Such drivers serve as leading indicators that are more accurate than simply extrapolating historical data. purchases of capital equipment. Organizations use the findings to guide the investment decisions they make to advance their success. Affected areas may include inventory levels. 46 . Examples include changes in economic. legal. The following are examples of information sources for determining market size: • • • • Government data Trade association data Financial data from major players Customer surveys Market trends Changes in the market are important because they often are the source of new opportunities and threats. Organizations evaluate the future attractiveness of a market by gaining an understanding of evolving opportunities and threats as they relate to that organization's own strengths and weaknesses. regulatory. and level of emphasis on service and support. and promotional activities Elements Market size The most common measure of market size is the sum of the revenues of its participants. it does not predict important turning points. social. The findings of a market analysis may motivate an organization to change various aspects of its investment strategy. price sensitivity. both now and in the future. While this method may provide a first-order estimate. A better method is to study market trends and sales growth in complementary products. a work force expansion/contraction.• • • • • • Market growth rate Market profitability Industry cost structure Distribution channels Market trends Key success factors The goal of a market analysis is to determine the attractiveness of a market. and political conditions and in available technology. facility expansion. Market growth rate A simple means of forecasting the market growth rate is to extrapolate historical data into the future. demand for variety. Moreover. they have the potential to dramatically affect the market size.

Therefore it is also important for investors to identify and evaluate the various segments that make up the total channels can offer the opportunity to develop a competitive advantage. For example.for example. The cost structure also is helpful for formulating strategies to develop a competitive advantage. identifies five factors that influence the market profitability: • • • • • Buyer power Supplier power Barriers to entry Threat of substitute products Rivalry among firms in the industry cost structure The cost structure is important for identifying key factors for success. Market profitability While different organizations in a market will have different levels of profitability. This analysis helps organizations determine which areas account for the greatest share of the market's growth and are more susceptible to change. in turn. This framework. Porter's value chain model is useful for determining where value is added and for isolating the costs. Success factors The key success factors are those elements that are necessary in order for the firm to achieve its marketing objectives.can be described by how direct they are to the customer. A few examples of such factors include: • Access to essential unique resources 47 . known as Porter's five forces.Market segments Markets are not uniform. helps them pinpoint the most promising opportunities within the overall market and guides the choice of specific investments. This information. retailers have negotiating power over manufacturers and can capture more margins. Michael Porter devised a useful framework for evaluating the attractiveness of an industry or market. Channel power structure . they are all similar to different market conditions. in the case of a product having little brand equity. in some environments the experience curve effect can be used to develop a cost advantage over competitors. To this end. Distribution channels Examining the following aspects of the distribution system may help with a market analysis: • • • Existing distribution channels . Trends and emerging channels .

000people.8 %. What this needs are the products at different price Points. motorcycle continues to dominate the two-wheeler market. Out view is that motor cycle demand in India will grow at around 15% per year over the coming years. Applications The literature defines several areas in which market analysis is important. The industry sale of two-wheelers: Motorcycle while the motorcycle as a whole grew at 18.2 million in 2006-07 consequently. It will there for be our endeavor to grow at a pace significantly higher that the market growth. As in the previous years. has penetration of 122 two wheelers per 1000.57 million in 2006-07.2 million in 2005-06 to 6. India is a poorly penetrated market for motorcycles. it is important for managers that use market analysis data to how analysts derive their conclusions and what techniques they use to do so.57 million in 2005-06 to 7. sales and service set. Hero Honda motors sales of motorcycle increased across the length and breadth of the country. Nevertheless.even afteraccunting for a relatively low per capita income of around US$. which resulted in the company’s market share improving from 27. the share of motorcycle in two-wheeler market further increase from 79% in 2005-06 to 82% in 2006-07. Two-wheelers: Overall industry sales of tow-wheelers increased by 15% from 6. It grew at 18.• • • Ability to achieve economies of scale Access to distribution channels Technological progress It is important to consider that key success factors may change over time. And Vietnam. Hero Honda motors have all three levers in places to drive this change and expand the market. Indonesia.8% in 2005-06 to 30. These include: sales forecasting. especially as the product progresses through its life cycle. which are backed by attractive financing options to make two wheelers affordable to the vast majority of the population.The fact is that with the Indian economy growing close to 8% CAGR in the last three years.8% in 2006-07. Malaysia and Thailand are at 223 & 264 two wheelers per 1000. Not all managers will need to conduct a market analysis.000 citizens in 2005.3100 per year on purchasing power parity (PPP) basis. Consumer Markets: at less than 31 two. three is enormous headroom fro increasing two wheelers penetration in the country. 48 . from 5.wheeler per 1. and marketing strategy.9%. market research. despite having a 13% lower per capital income. whose PPP per capital income is just 15% grater than India‘s has 83 twowheelers per 1.8% in 2007-08.

the – art facilities encompassing engine and vehicle design and testing. electrical and electronics laboratory materials laboratory and trial manufacturing. 49 . component testing. Hero Honda motors have over the years built a completely integrated R&D center at Japan. Recognizing this.Research & Development: Technology leadership is the first step towards market leadership. analysis. this world class center is equipped with state – of. With staff strength of over 300 engineers.

paints and chemicals. Environment Policy We at Hero Honda are committed to demonstrate excellence in our environmental performance on a continual basis. Hero Honda has been strongly committed not only to environmental conservation programmers but also expresses the increasingly inseparable balance between the economic concerns and the environmental and social issues faced by a business. Institutionalise resource conservation. in the areas of oil. Hero Honda takes a stand as a socially responsible enterprise respectful of its environment and respectful of the important issues. as an intrinsic element of our corporate philosophy. We are committed at all levels to achieve high quality in whatever we do.KEY POLICIES Hero Honda. our goal is not only to sell you a bike.Brijmohan Lall Munjal. in particular." A famous quote from our Worthy Chairman Mr.” We must do something for the community from whose land we generate our wealth. To achieve this we commit ourselves to: Integrate environmental attributes and cleaner production in all our business processes and practices with specific consideration to substitution of hazardous chemicals. Quality Policy Excellence in quality is the core value of Hero Honda's philosophy. Besides its will to provide a highquality service to all of its customers. Continue product innovations to improve environmental compatibility. where viable and strengthen the greening of supply chain. electrical energy. A business must not grow at the expense of mankind and man's future but rather must serve mankind. water. particularly in our products and services which will meet and exceed customer’s growing aspirations through: 50 . but also to help you every step of the way in making your world a better place to live in.

motivated workforce and higher productivity. suppliers and Contractors. SKD or CKD modes • Specially designed export packing procedure fowled • Fully container (FCL) or less than container load (LCL) dealt with safety and security • 51 . • Ensuring compliance with all applicable legislative requirements. We shall create a safety culture in the organization by: • Integrating safety and health matters in all our activities. • Promoting safety and health awareness amongst employees. factor stuffed cargo shipped in CBU. Proven technological know how Cost and quality balance Product in sync with market need Warranty and trained support Supply chain management Partners with globally trusted shipping lines. • Teamwork and responsibility Safety Policy Hero Honda is committed to safety and health of its employees and other persons who may be affected by its operations. • Empowering employees to ensure safety in their respective work places. We believe that the safe work practices lead to better business performance. • Continuous improvements in safety performance through precautions besides participation and training of employee GLOBAL PRESENCE • • • • • Internationally competitive R&D capabilities. • Continuous improvement in our total quality management systems. • Efficiently packed.• Innovation in products processes and services.

52 .

Industries are classified according to number of sellers. presence or absence of entry. and degree of globalization. mobility. and exit barriers.Industry Concept of Competition An industry is a group of firms that offer a product or class of products that are close substitutes for one another. degree of vertical integration. cost structure. Number of sellers and degree of differentiation: 53 . degree of product differentiation.

No competitor will advertise unless advertising can create psychological differentiation (cigarettes. If competitors match on price and services. Hero Honda Competitors The Pulsar 220 which is currently the fastest bike in India faces a stiff challenge from new models on speed & style. styling. Pure competition many competitors offer the same product and service (stock market. If partial substitutes are available and there is some danger of competition. 2. and charge a price premium for that attribute. Monopolistic competition many competitors are able to differentiate their offers in whole or in part (restaurants. steel). An unregulated monopolist might charge a high price. the monopolist might invest in more service and technology. Competitors focus on market segments where they can meet customer needs in a superior way and command a price premium. Just after 2 months release which created a quite a bit stirr among the bike enthusiasts across the country by giving them the fastest Indian. Each competitor may seek leadership in one of these major attributes. do little or no advertising and offer minimal service. A regulated monopolist is required to charge a lower price and provide more service as a matter of public interest. Such companies would find it hard to charge anything more than the going price. Pure oligopoly consists of a few companies producing essentially the same commodity (oil. the media industry has continued to consolidate. 4. commodity market). Because there is no basis for differentiation. Bajaj’s Pulsar 220 DTSi can achieve a speed of 144 km an hour. turning from monopolistic into a differentiated oligopoly. beauty shops). beer) in which case it would be more proper to describe the industry as monopolistically competitive. and can accelerate from 0 to 60 km in four seconds.The starting point for describing an industry is to specify the number of sellers and whether the product is homogeneous or highly differentiated give rise to four industry structure types: 1. attract the customers favoring that attribute. or services. Oligopoly a small number of (usually) large firms produce products that range from highly differentiated to standard. features. the only way to gain a competitive advantage is through lower costs. 3. almost 20 km more than its predecessor. For instance. An industry competitive structure can change over time. cameras) partially differentiated along lines of quality. Bajaj maybe the brand for years in scooter making in India and true enough it has set a mark in motorcycle industry too but one should not forget that Yamaha and Honda have 54 . Pure monopoly only one firm provides a certain product or services in a certain country or area (a local water or cable company). Differentiated oligopoly consists of a few companies producing products (autos. competitor’s process will be the same.

If you see the history of Yamaha. They have launched so many bikes after RX 100 but all of them were not very successful. the performance bar will be raised. Same story is with Hero Honda. The forte which Bajaj Pulsar was holding for a long time would surely pass on to others who are coming up with good versions in this category. Yamaha which has significantly sprung back like a phoenix for that matter and are giving stiff competition for everyone in the bike segment and even Karizma from Hero Honda is a great bike and gives great performance. I think both of them will not give stiff competion to Bajaj. FZ16. It seems yamaha is treating Indian market as dump and hence these kind of bikes. Once technology shifted from 2 strokes to 4 stroke Yamaha lose his sheen in the Indian Market. Also with the add on kits now available for the R15 & FZ16. The new bred Yams are not just good looking. Fazer & FZS the competition is tougher than ever for Bajaj Pulsars. The biking industry is in for a toss. But with the return of turning forks with line up like R1.been the pioneers in motorcycle industry for quiet long it was their absence which gave bajaj time to stabilize but as they are back with some amazing concepts with user friendly price they already have raked bajaj's market share plus bajaj has been cashing too long on the pulsar model while all the models from Yamaha are distinctive and have a charisma of their own which brings on freshness to the stale Indian market. Bajaj has already made their reputation in Power bike. Yamaha. 150cc bike for over one lakh bucks? And huge sales among that? Yamaha has to seriously consider Indian market as a highest priority n should release much better looking bike than r15/fazer. Hero Honda is very successful with fuel economic bike but not with Power bikes. Yamaha's all bikes after RX 100 were not very successful in Indian market.Bajaj picked up from where Yamaha left in terms of performance bikes in India. most of the bike companies are vying this spot like. No I don't see this happening as Bajaj pulsar has time and again proved themselves in this 55 . I can see Bajaj going down in the coming years with Yamaha especially entering this market very aggressively with performance based bikes where it is giving real tough competion out there but then people remember one thing that Yamaha has a history of giving a good race bikes all these years may be not in India but the concept is coming and who better than yamaha can deliver such kind of bikes. Yes I think the race to being the fastest Indian is getting hotter as the day goes by. the true blue biker's choice is sending everybody in for a spin. Yamaha stands for performance to the max and they surely are on a roll and will get to the top spot with new models to come from them the huge success of Pulsar. According to me Yamaha is the one who will dethrone Bajaj from their top position in this segment. R15. but also have the technology & hardware to go for.

and also with that performance they also come up with a good mileage tag and this is where there are many takers for Bajaj pulsar.performance based biking for a long time in India. 56 . whereas Karizma and the Yamaha series doesn't give one a great mileage for that matter. so it would be very difficult to give competition for Bajaj Pulsar in this regard.

Porter five forces analysis Porter's Five Forces is a framework for industry analysis and business strategy development formed by Michael E. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very 57 . Attractiveness in this context refers to the overall industry profitability. It draws upon Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Porter of Harvard Business School in 1979.

three forces from 'horizontal' competition: threat of substitute products. Porter's five forces include . Firms are able to apply their core competencies. A change in any of the forces normally. This five forces analysis is just one part of the complete Porter strategic models. and two forces from 'vertical' competition: the bargaining power of suppliers and the bargaining power of customers. and the threat of new entrants. profitability is low and yet individual companies. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. The remainder is internal threats. in which available profits for all firms are driven down to zero. As an industry. to contrast it with the more general term macro environment. Porter referred to these forces as the micro environment. by applying unique business models. The other elements are the value chain and the generic strategies. The overall industry attractiveness does not imply that every firm in the industry will return the same profitability. have been able to make a return in excess of the industry average. business model or network to achieve a profit above the industry average. A clear example of this is the airline industry. requires a business unit to re-assess the marketplace given the overall change in industry information. 58 . Three of Porter's five forces refer to competition from external sources.unattractive industry would be one approaching "pure competition". the threat of established rivals.

rights.) The most attractive segment is one in which entry barriers are high and exit barriers are low. This results in many new entrants. Few new firms can enter and non-performing firms can exit easily. • • • • • • • • • The existence of barriers to entry (patents.The five forces: The threat of the entry of new competitors Profitable markets that yield high returns will attract new firms. Economies of product differences Brand equity Switching costs or sunk costs Capital requirements Access to distribution Customer loyalty to established brands Absolute cost Industry profitability. etc. which eventually will decrease profitability for all firms in the industry. the abnormal profit rate will fall towards zero (perfect competition). the more profitable the industry the more attractive it will be to new competitors 59 . Unless the entry of new firms can be blocked by incumbents.

which also affects the customer's sensitivity to price changes.The intensity of competitive rivalry For most industries. Level of advertising expense Powerful competitive strategy The visibility of proprietary items on the Web used by a company which can intensify competitive pressures on their rivals. the intensity of competitive rivalry is the major determinant of the competitiveness of the industry. • • • • • • • • • • • Buyer concentration to firm concentration ratio Degree of dependency upon existing channels of distribution Bargaining leverage. • • • • • Sustainable competitive advantage through innovation Competition between online and offline companies. particularly in industries with high fixed costs Buyer volume Buyer switching costs relative to firm switching costs Buyer information availability Ability to backward integrate Availability of existing substitute products Buyer price sensitivity Differential advantage (uniqueness) of industry products RFM Analysis 60 . click-and-mortar -v.slags on a bridge. The threat of substitute products or services The existence of products outside of the realm of the common product boundaries increases the propensity of customers to switch to alternatives: • • • • • • • Buyer propensity to substitute Relative price performance of substitute Buyer switching costs Perceived level of product differentiation Number of substitute products available in the market Substandard product Quality depreciation The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs: the ability of customers to put the firm under pressure.

e. labor.. and services (such as expertise) to the firm can be a source of power over the firm.The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs. Suppliers may refuse to work with the firm.g.g. • • • • • • • • Supplier switching costs relative to firm switching costs Degree of differentiation of inputs Impact of inputs on cost or differentiation Presence of substitute inputs Strength of distribution channel Supplier concentration to firm concentration ratio Employee solidarity (e. when there are few substitutes. or. labor unions) Supplier competition .ability to forward vertically integrate and cut out the buyer. 61 . charge excessively high prices for unique resources. Suppliers of raw materials. components.

62 .

Superior customer value is the best leading indicator of market share and competitiveness (think Hero Honda). Wal-Mart has recognized Abhishek Industries as the International Supplier of the Year 2001. Abhishek Industries in Ludhiana. And market share and competitiveness in turn drive the achievement of long-term financial goals such as profitability.Customer Value Analysis towards Hero Honda Companies succeed by providing superior customer value. growth and shareholder value. widely-accepted principles: • • Companies succeed by providing superior customer value. you have the means to know what to change to ensure that more of them will buy from you. consistency and on-time delivery with Wal-Mart. The factors that contribute to quality in the customer's mind need not be mysterious. has built an outstanding record for quality. the flagship company of the Trident Group. Companies should use a method of business planning that allows for 'action learning'. For example. For survival and success. Some companies focus on a few (sometimes. At the core of this recognition is customer-perceived quality/value. Companies should track the customer value they provide through a method like customer value analysis. we need a few clear. Customers will gladly tell you what they are. Companies need a comprehensive strategic navigation system to provide data on both financial and customer value performance. And value is simply 'quality' whichever way the customer defines it . A customer value analysis uses information from customers to show how customers make decisions in your marketplace. With this information.offered at the right price. • • 63 . In turn. it is far more important to commit yourself to superior quality and customer value than to commit yourself to attaining financial goals. Particularly when they are dealing with the world's premier corporations. To drive a company wisely. even just one) customers to deliver extraordinary value. While this strategic principle is simple. it is also very powerful. such as the war-room method of conducting business meetings. Understanding that is the central objective of customer value analysis. The first step in achieving leadership in market-perceived quality and value is to understand what causes customers in your targeted market to make their decisions – to decide that one product offers better value than another.

Data sources can either be primary or secondary. It has maximum market share with comparison to its competitors. Therefore. Proper defining of the problem is a must for proceeding further with the research process. Data.e. effort and data. Defining the problem and deciding research objectives: Defining the objective is the most important part of any study process. it requires great care to select the sources of data. It is the raw material with which a researcher functions. Identified problem or the objectives of the research discussed in the report are: 1. and the data to be collected. the research job can be simplified and completed with the minimum cost. whom to contact for gathering the relevant data. And it is the company that gives highest sales and it is also the highest two-wheeler manufacturer. 64 . all depends on a correct understanding of the problem. The type of study to be carried out. Data is the foundation of all research. by clearly focusing on the real problem. or facts. Developing the research plan: In this a plan was developed about how to collect the require information i. Also. may be obtained from several sources. the questions to be raised. the sampling procedure to be followed.RESEARCH METHODOLOGY The methodology used in conducting the research work on HERO HONDA with major emphasis on its sales and marketing strategies involve the following steps: Why I have selected HERO HONDA only? I have selected Hero Honda for my summer training because it is the company that is growing day by day.

herohonda. Newsletters and In-house journals. Research approach: It means the way by which the information was collected. getting information from the staff members of the agency. Secondary data: The sources from which secondary data was collected: • • • • • Press releases of the company. frequent visit to the showrooms of the company was of great help to conduct the analysis and research work. Beside this. Primary data: Collection of primary data was conducted by visiting the people the preparation of the report. 2. Outlook. personally for 65 . contacting to the motor mechanics was sufficient enough to conduct the study. Contact methods: Instrument or Data collected Forms: It is the method by which data is gathered. etc. Most of the information presented in this report was extracted from the above data sources. They provide the relevant information regarding the profile of the company as compared to the other company in the Indian market.A. It could be done through various instruments like questionnaires. www. Websites such as www. These were the sources from which secondary data has been gathered. Brochures and detailed descriptive leaflets Magazines like Business World. Most employees suggested visiting company’s web site. as it was not possible for them to spare time from their busy schedules. Collection of information: The primary information was collected by face-to-face and direct interviews with the peoples and the customers. getting the questionnaire filled by different individuals. Auto India. Visiting the various places of Delhi. observations.

The finding also includes charts. After collection and analysis of data.5. The research and analysis of the information has been done on the basis of various sales and marketing strategies adopted by the company during its tenure. 6. Analyzing the information: The data collected was carefully analyzed. Then conclusion has been drawn out of the findings and various recommendations have been given at the end of the report. it was recorded in the form as prescribed. Certain tables on the basis of which the findings were made have been included in the appendices section followed by the bibliography. 66 . Reporting and conclusions and recommendations: This is the most vital part of the work undertaken. tables and diagrams etc. The report also mentioned the limitations of the project undertaken. The major part of the report is the findings.

which maximize customer needs and convenience. 67 . The study is oriented towards the concept of different brands offered by Hero Honda and its competitors to its customers. using multiple delivery channels in composing the agency network. service centers. The company services are backed by a highly motivated and technology driven team to achieve customers need.SCOPE OF THE STUDY Hero Honda is spreading its wings and widening its business horizon to reach and serve customers at new centers in the year ahead. product expertise and geographic reach. lower service cost and increased efficiency. The company has endeavored to move fast in providing market solution.

 It is very difficult to check the accuracy of the information provided. During the course of the study the following limitations were observed:  The method will be unsuitable if the number of persons to be surveyed is very less as it will be difficult to draw logical conclusions regarding the satisfaction level of customers. 68 .  Interpretation of data may vary from individual depending on the individual understanding the product features and services of the company.  The method lacks flexibility. In case of inadequate or incomplete information the result may deviate.  Since all the products and services are not widely used by all the customers it is difficult to draw realistic conclusions based on the survey.LIMITATIONS OF THE STUDY As said a basic research was conducted at the company to enable the company to assess how far the customers are satisfied with product and services of Hero Honda.

which was considered earlier to be out of range for middle class families is now becoming very fast an article for them. Family income (Rs. This may be because of the conditions of roads there.FACTS & FIGURES Sale of Hero Honda in Rural area and Urban area In the survey of rural as well as urban area it is found that in rural area the sale of Hero Honda is less but in urban area it gives very exiting result. Features Performance Look Availability Price % of respondents 18 11 5 1 69 % of Responses 10 46 36 08 % of Respondents 72 28 . The possible combination and corresponding number of respondents are shown in the table below. Area Urban Area Rural Area FAMILY INCOME OF RESPONDENTS The income distribution of the families of respondents shows that the bike.) 5000-10000 10000-15000 15000-20000 Above 20000 FACTOR PROMPT TO BUY HERO HONDA It should be stated that the performance is the most important factor followed by look.

Only 6% of the respondents say that they have purchased their bike through bank loans. Friends & magazine are the other sources. Medium of Advertisement Television Magazine Friends Hoardings Others PURCHASE OF BIKE Almost 94 % of the respondents say that they have purchased the bike by cash.Maintenance Brand image After sale service 4 5 6 HOW THE RESPONDENT DID CAME TO KNOW ABOUT THE BIKE? The best media of advertisement (according to which the respondents came to know about the bike) is the ads on television. % of Respondents 46 36 14 02 02 Purchase Type Cash Purchase Hire Purchase % of Respondents 94 06 70 . Only 2 % of them came to know through hoardings.

Bikes Splendor Passion Ambition Pulsar Fierro Others % rating by Respondents 38 08 06 28 14 06 71 . Influencer Parents Self Friends Relatives Others RATING OF BIKES % of Respondents 16 54 18 08 04 42% of the respondents have rated as the best bike they have used.DECISION INFLUENCED BY Maximum no. After that their friends and parents influenced them. of the Respondents have taken decision to buy the bike on their own. but it is facing a stiff competition from Pulsar & Fierro.

the buyer has to first narrow down his search to a given category of two wheeler.? Yes! But. A lady doctor may decide to look only at gearless scooters while a collegian with a rich father may only look at premium bikes.Findings: The Indian two wheeler industry today offers more than 70 models to a buyer.. And manufacturers are launching new models every day…… More than 20 models were launched in the last year. within my selected category of premium bikes… So which premium bike has lesser problems? Do new launches have more problems than older ones? Naa…! Does PPM score depend on who manufactured the vehicle…? See for yourself! Manufacturer-wise Problems per 100 vehicles (PP100V) scores in Survey 72 . What next……? Which bike should I buy? A bike with more power…… better looks…… more reliability…… errrr! Lesser problems per vehicle for a given model could be a good enough reason to go for the model…. Top this up with a variety of promises ranging from free gifts and financial schemes to the attractive looking models and jingles in the advertisement. choosing the right pair of wheels can be a trying experience for the common man. In such a situation. In this whirlwind of speed and confusion maze.

Sr.No. 1 2 3 4 5 6 7

Vehicle Honda LML Kinetic TVS Bajaj Yamaha

PP100V 146 165 183 196 196 223

Hero Honda 176

Executive bikes scored less problems than economy bikes…however simpler machines like scooters have the fewest problems This year we classified motorcycles by the market as premium, executive and economy…... Amongst the bikes, we found the number of problems were lowest in executive bikes and highest in economy bikes…. Executive bikes (179 PP100V), then premium bikes (209 PP100V) and last were economy bike (230 PP100V).

ENGINE Trouble. Splendor the largest selling executive bike from Hero Honda has reported the lowest number of problems with ENGINE (37 PP100V) closely followed by the newly launched geared scooter Eterno (38 PP100V) from Honda.

Simplicity is the beauty


TRANSMISSION WOES: Gearless scooters/scooterettes have lowest number of TRANSMISSION problems. Complains who fulfilled the promised performance and how much…? S No. 1 2 3 4 5 6 7 Manufacturer Honda LML Hero Honda Bajaj Auto TVS Yamaha Kinetic % models above category average 100 100 67 43 33 33 25


It is clear from the report that the Hero Honda Motors is facing cutthroat competition; hence the company’s manager has to be fast and smart so as to understand the customers needs. They have to come up with various new techniques or schemes to be able to cater to different categories of people. Customers are becoming more wise day by day and they are now willing to know all the in and out of the things happening around them. This has led to increased customer awareness. We can analyze that if the brand is reputed that doesn’t win the customers delight unless it’s provided same value-added features or else we can say competitive advantage. • For gaining a competitive advantage it has to continuously compare the product and services with the competitors and find the weak area of the rivals for gaining competitive advantage. • Surveys revealed that awareness of Hero Honda Motors is low among its target segment for creativity awareness. The company has to take some keen step for promotional activity. • The company should regularly send the sales person who has good communication skill to the customers so that they should be aware about the product and services in market and know the quality of the services offered by the company.


If Yes. [ [ [ [ ] ] ] ] 10. Age _____________________________________________ _____________________________________________ ___________________ ___________________ 18 – 22 years [ ] 28 – 32 years [ ] 23 – 27 years [ ] above 32 years[ ] 5. 3.QUESTIONNAIRE FOR THE SURVEY OF MOTORBIKES. 9.M. Name and Company of the Bike. Do you remember any advertisement of Hero Honda? ________________________________________________________. 2. Name __________________________________________________ 2. Mobile No. Address 3. 76 . 4.L. 4. ________________________________________________________. 1. Rank the Motorbike manufacturing company. Phone No. Do you have any plan to buy it in next 6 months? Yes [ ] No [ ] 7. 1. If No. Do you have any bike in your house? Yes [ ] No [ ] 6. Hero Honda Yamaha Bajaj L. Which Bike does you like most? ________________________________________________________. 8.

11. Good [ ] Excellent [ ] Don’t have a Bike Very Good Out standing [ ] [ ] [ ] 15 Give remark to Hero Honda. 14. ________________________________________________________ _________________________________________________________________ _______________________________________________. Good [ ] Excellent [ ] Don’t have a Bike Very Good Out standing [ ] [ ] [ ] Thanks Surveyed by: ……………………… Checked by: ……………………… 77 . Any new facilities or any improvement that you want. What should the price range in your opinion? Splendor + CD dawn Passion + CBZ Karizma ___________________ ___________________ ___________________ ___________________ ___________________ Sufficient Sufficient Sufficient Sufficient Sufficient [ ] [ ] [ ] [ ] [ ] 12. Give remark to your old Bike Company.

google.slideshare. 78 .herohonda.Dr.Marketing research : .Marketing research : www.Mr. Annual Report INTERNET:     www. C.scribd.Mamoria :.BIBLIOGRAPHY BOOKS:  Name of the book Author  Name of the book Author :. JOURNALS AND NEWSPAPERS:  Journals published by Hero Honda. www.

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