OVERVIEW OF THE TWO WHEELER INDUSTRY

The Indian two wheeler contributes the largest volumes amongst all the
segments in automobile industry. Single-digit growth for different segments of the
automobile industry in 2009-10, if consumer sentiments continue to improve. The
two stimulus packages announced by the Centre in December and January
helped the industry register flat growth for the 2009-10 fiscal. Two-wheelers are
expected to grow by less than 5%, followed by 3-5% growth in passenger
vehicles, 5-8% in three wheelers and 7-10% in commercial vehicles (CVs) in
2009-10. The high growth rate in CVs is owing to their low base during the last
financial year.
These are subject to the continuation of the current economic environment. If
there is any adverse change, for instance, in interest rates, after the new
government takes office, the numbers can change. According to Siam, while 18.9
lakh to 19.2 lakh units of passenger vehicles are expected to be sold in 2009-10,
sales of two-wheelers have been pegged at 83.4 lakh to 87.6 lakh units;
commercial vehicle sales are pegged at 5.2 lakh to 5.4 lakh units.
In 2008-09, passenger vehicles reported a flat growth at 15,51,880 units,
compared to 15,49,882 units; two-wheelers posted a growth of 2.6%, says a
report released by Siam on Wednesday.
Total vehicle sales in the country during 2008-09 increased 0.7% over the last
fiscal. The hike in sales was partly due to the reduction in Cenvat and softening
of interest rates. "Had it not been for the stimulus packages, passenger vehicle
sales would have been down 3% or would have been flat, while commercial
vehicles would have declined 30-40%. Even two-wheelers would have remained
flat or declined by 2-3%.

Incidentally, after a high double digit growth in February, demand for passenger
cars once again slowed down in March, mainly because of a higher base last
year. According to Siam, passenger car sales grew marginally last month at
1,29,358 units, compared to 1,28,098 units in 2007-08. The segment had posted
a growth of 21.7% in February.
Demand will continue to swing for the next few months. Will see some positive
growth on a sustainable basis not before the second half of this year.

The

countrys largest bike maker, Hero Honda, on Thursday said the launch of the
Rs1 lakh car Nano will not have any impact on the two-wheeler industry.
Nothing much has changed since the unveiling of Nano at the Auto Expo except
for the announcement of prices. IIt is not going to have any real impact on twowheelers. Going by the price there is a fair difference between the cost of
ownership and maintenance of Nano and two-wheelers.
The price of Nano is closer to a high-end bike, the buyer for which is not a car
customer, However, there may be some two-wheeler buyers who are attracted
to Nano. On the sales prospect of the company, looking at a double-digit growth
for the fiscal 2008-09.
Going by the current circumstances, it is difficult to predict for the next fiscal but
the first quarter is looking good and the second quarter may not be as good as
the first one due to issues like rain,. About the overall economy, have a couple of
tough quarters ahead to go through but India will probably be the first to come
out of the downturn.
Key players in the Two-wheeler Industry :
After facing its worst recession during the early 1990s, the two-wheeler industry
bounced back with a 25% increase in volume sales in February 1995. The

scooters are considered as family vehicles. There are many two-wheeler

manufacturers in India. Major players in the 2-wheeler industry are Hero Honda
Motors Ltd (HHML), Bajaj Auto Ltd (Bajaj Auto) and TVS Motor Company Ltd
(TVS).
The other key players in the two-wheeler industry are Kinetic Motor Company Ltd
(KMCL), Kinetic Engineering Ltd (KEL), LML Ltd (LML), Yamaha Motors India Ltd
(Yamaha), Majestic Auto Ltd (Majestic Auto), Royal Enfield Ltd (REL) and Honda
Motorcycle & Scooter India (P) Ltd (HMSI).
Types of Two-wheelers in India:
There are mainly three types of two-wheelers available in India. They are
Motorcycles, Scooters and Scooterettes/Mopeds.
Motorcycles in India:
Bikes comprise a major segment of Indian two wheeler industry.
New segments
Traditionally, the motorcycle market has been seen as three distinct segments:
Entry (100 cc engine capacity, 65 per cent of the market), executive (125-135 cc,
20 per cent of the market) and premium (150 cc, 15 per cent). All three have
different price points; entry-level bikes are for the rural markets, while the other
two are sold and bought in the urban markets. Hero Honda, conventional wisdom
said, is strong in the entry segment with a market share of 80 per cent and weak
in the other two where its share ranges between 15 per cent and 20 per cent.
Hero Honda found that these are not watertight categories. Customers, for
instance, trade freely between a top-end 100 cc motorcycle and a low-end 125 cc
motorcycle or between a premium 125 cc motorcycle and a basic 150 cc

motorcycle. While a customer does look at the engine capacity, what he seeks is
a holistic experience. So, Hero Honda decided to look at the motorcycle market
not from engine capacity but from the customers point of view how he
brackets the products available in the market through his demographic and
psychographic profile.
This took the company to unchartered waters of consumer profiling what is his
lifestyle and attitude, what is it that he holds dear in life and so on. The
segments, in Hero Hondas scheme of things, are: Entry (35 per cent of the
market), deluxe (50 per cent) and premium (15 per cent). Hero Honda Vicepresident (sales and marketing) Anil Dua, who joined Hero Honda around
September 2006 from Hindustan Unilever, says the company has a lions share
of the first two segments and a growing share of the premium segment.
More important, this view of the market has become the cornerstone of Hero
Hondas strategy. It now shapes the companys product development, placement
and promotion moves. Hero Honda comes out with new motorcycles, variants
and refreshes keeping the customer profile of each segment in mind. This shows
in the commercials which no longer talk of fuel economy (remember Fill it, shut
it, forget it?) or power alone. Thus, the advertisement for the Karizma (premium
segment) comes with the punch line, Always game. The ad for the premium
segment Hunk doesnt talk of speed or power at all the focus is on the looks
even while standing. The CBZ Extreme comes with the promise, Thinking is
such a waste of time.
Both the Hunk and CBZ Extreme are 150 cc bikes but talk to different
customers, says Dua. We have created very sharp positions for all our brands.
You cant substitute one model for another in any advertisement. This is
important. Hero Honda has a large portfolio of products (13 motorcycles and one

scooter), so it has to create distinct position for each so as to avoid customerconfusion and cannibalisation of products.
Several automobile companies in the world put their products through a group of
users before launch. It is standard practice. Hero Honda even puts all its
advertisements through such groups. dont move an inch without consumer
feedback, On behalf of Hero Honda, TNS talks to thousands of customers every
month to monitor the brand health share of mind (a lead indicator of share of
market) and first-choice, cut-through (how the brand and its advertisements
stand in the clutter), share of voice, loyalty indices and so on.
Hero Honda has upped the advertising ante in the last couple of years. When it
decided to chase market share and not profits, it also decided that it would offer
no discounts on its motorcycles. (Even when the Cenvat rate was cut 4 per cent
late last year, it did not cut prices of its models uniformly well-entrenched
models were left untouched, prices of some others were dropped more than 4
per cent. Clever!) The money saved by plugging the discounts was ploughed
back into brand promotion.
COMPETITION
Presently 61% of motorcycle volumes come from the 100cc segment and we feel
that this segment will reduce to 25% in the next few years. During that
interaction, Rajiv Bajaj, who has an M.S. from Warwick University, had also
talked about how the low margins in the entry level 100cc motorcycles were not
worth the production and marketing effort. We presume he must have discussed
this grand strategy with his brother Sanjiv Bajaj who now handles the financial
services arm of the Bajaj Empire. What we really dont know is if Sanjiv talked to
Rajiv about what they dont teach at Harvard Business School (Sanjiv is an

alumnus of Harvard). We also presume Pankaj Munjal was convinced there was
no chill running down his spine.
In fact, the message that the market has now sent Rajiv is quite spine chilling. In
October 2008, Bajaj Auto notched up two wheeler sales of about 160,000 units.
Last year in October, Bajaj had clocked sales of about 250,000 units. Thats an
astonishing 35% fall. Sure, these are bad times and India Inc. is being hounded
and haunted by the repercussions of the global financial meltdown. Sure even
rival Hero Honda and Pankaj Munjal have been affected badly. How badly? Sales
in October 2008 for Hero Honda are just 3.5% down at about 365,000 units as
compared to last year. Yes! It is 35% versus 3.5%. In fact, combined sales of
Bajaj and the number three TVS last October were higher than that of Hero
Honda. This year, Hero Honda has sold more than the two put together.
Not that head honchos at Hero Honda are doing cartwheels in jubilation. They
too are worried. According to Anil Dua, SVP (Marketing & Sales), Hero Honda
Motors, With the festive season being over now, we do expect to see a
slowdown in the industry with the prevailing credit squeeze and interest rates
taking their toll on consumer sentiments. Keeping this in mind, we have
consciously restricted our dispatch sales in October.
But what can explain the mind boggling difference between a 3.5% drop and a
35% in sales? There are some who ascribe this to the massive ad campaign that
has been launched by Hero Honda in recent times; an ad that reportedly cost
Hero Honda about Rs.25 crore and features actors Hrithik Roshan and Priyanka
Chopra along with the current Clint Eastwood of Indian cricket, M.S. Dhoni. The
company stunned the world of Indian advertising by airing this 180 second spot
on television screens. It was almost as if Pankaj Munjal had taken a leaf out of
American President elect Barack Obama and decided that saturation advertising

was the key to success when the times were challenging. The latest Dhak-Dhak
ad may not have quite the killer message that the iconic Fill it. Shut it. Forget it
ad that launched Hero Honda more than 20 years ago, but it sure packs a lot of
punch more so because you hardly get to see any ads from Bajaj and TVS.
Sanjay Sharma, Creative Director, Draft FCB Ulka, the creator of the new dhak
dhak campaign told this magazine, This campaign has been designed to
celebrate the 25th anniversary of Hero Honda in India and as you know that Hero
Honda is a leader in the category so we wanted to make a larger than life
campaign.
There is something even more insidious that Rajiv Bajaj may not have foreseen
when he decided to concentrate on the 125cc and above premium segment of
the two wheeler market. And how could he, because his offering the Pulsar (hiend) brand was a huge success and clocked annual growth rates in sales of
more than 30%. But just as bad times were lurking round the corner, there came
a nasty surprise from an unexpected quarter Yamaha Motor India, a company
that once upon a time had the honour of being arguably the first Japanese bike in
collaboration with Escorts. In the so called premium segment, Yamaha sales
grew by over 161% in the April-September 2008 quarter to about 60,000 units
compared to the earlier year. Even the recently launched YZF- R15 and FZ-16 by
Yamaha have taken the market by storm. All this, quite visibly, has eaten into the
market share of the Bajaj peddled premium bikes.
Whats also tilting the odds against Bajaj at present is its deliberate production
restraint. While Hero Honda increased its production by 18% and Yamaha by
26%, Bajaj only increased its production by about 7.5% in the last two months.
Analysts believe that this deliberate reduction of production due to the present
slowdown is a significant reason for Bajaj sales to decline. Even Bajajs super
performer the Pulsar range is losing sheen to fresh competition. Given that

premium segment consumers are excessively style conscious, the advent of new
models from rival brands could have tilted consumer preferences. Some analysts
also think that Bajaj has a disadvantage compared to Hero Honda because it is
very dependent on the consumer loan market to drive sales. Vaishali Jajoo, auto
analyst, Angel Broking said, Bajaj & TVS could not pick up volumes in the month
of October because of their dependence on auto financing, which in turn is
adversely effected by higher interest rates. That is quite strange because the
Bajaj group has at least outwardly an incredibly strong financial services arm
that could have beaten Hero Honda hollow when it comes to two wheeler
financing. Why that has not happened remains a mystery.

COMPANY BACKGROUND
The joint venture between India's Hero Group and
Honda Motor Company, Japan has not only created
the world's single largest two wheeler company but
also one of the most successful joint ventures worldwide. During the 80s, 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 India, and Hero Honda sold millions of bikes purely on the
commitment of increased mileage.
Over 20 million Hero Honda two wheelers tread Indian roads today. These are
almost as many as the number of people in Finland, Ireland and Sweden put
together!
Hero Honda has consistently grown at double digits since inception; and today,
every second motorcycle sold in the country is a Hero Honda. Every 30 seconds,
someone in India buys Hero Honda's top -selling motorcycle Splendor. This
festive season, the company sold half a million two wheelers in a single month
a feat unparalleled in global automotive history.
Hero Honda bikes currently roll out from its three globally benchmarked
manufacturing facilities. Two of these are based at Dharuhera and Gurgaon in
Haryana and the third state of the art manufacturing facility was inaugurated at
Haridwar, Uttrakhand in April this year. These plants together are capable of
producing out 4.4 million units per year.

Hero Honda's extensive sales and service network now spans over 3000
customer touch points. These comprise a mix of dealerships, service and spare
points, spare parts stockiest and authorized representatives of dealers located
across different geographies.
Hero Honda values its relationship with customers. Its unique CRM initiative Hero Honda Passport Program, one of the largest programs of this kind in the
world, has over 3 million members on its roster. The program has not only helped
Hero Honda understand its customers and deliver value at different price points,
but has also created a loyal community of brand ambassadors.
Having reached an unassailable pole position in the Indian two wheeler market,
Hero Honda is constantly working towards consolidating its position in the market
place. The company believes that changing demographic profile of India,
increasing urbanization and the empowerment of rural India will add millions of
new families to the economic mainstream. This would provide the growth ballast
that would sustain Hero Honda in the years to come. As Brijmohan Lall Munjal,
the Chairman, Hero Honda Motors succinctly points out, "We pioneered India's
motorcycle industry, and it's our responsibility now to take the industry to
the next level. We'll do all it takes to reach there.''
The success story of HERO HONDA started by collaboration of HERO Cycles
Private Limited, Ludhiana and HONDA Motor Company, Japan. HERO Cycles
was started as a small cycle part manufacturing unit in Ludhiana in 1956. Mr. Brij
Mohan Lal Munjal made HERO Cycles the largest cycle industry in India . Mr.
Pawan Kant Munjal introduced HERO HONDA to the Indian market. The Honda
Motor car company was established in 1984 and controls 25% worlds
motorcycle market.

HERO HONDA Motors Limited (HHML) is headed by Chairman and Managing

Director Mr. Brij Lal Munjal, with Joint Managing Director of Dharuhera being Mr.
H. Yamaguchi and that of Gurgaon plant is Mr. Nakajima.
The share holding pattern of the company is as under:
Hero Cycles & Associated Companies

26%

Honda Motor Company

26%

Public

48%

HERO Group has been a pioneer and now an unmistakable leader in an array of
consumer and industrial applications including motorcycles , light motorcycles,
mopeds, automotive components and industrial supplies. Other Companies
attached to the group are:

GURJAT CYCLES LTD.

MUNJAL SHOWA LTD.

ROCKMAN CYCLES

HIGHWAY CYCLES

SUNBEAM CASTINGS

SUNBEAM STEELS

HERO HONDA Motors Limited (HHML) has two plants one at Dharuhera & other
at Manesar, Gurgaon. The Corporate Office at Basant Lok , Vasant Vihar
coordinates the marketing operations of both the plants. Both the plants are
located on the Delhi- Jaipur National Highway amidst clean surroundings and
boasting of congenial working environment.

Hero Honda commenced operations in 1984. It is the market leader in the 100-cc
motorcycle segment with a market share of 47%, there are over four million Hero
Honda motorcycles on the road currently. The company is also the largest
producer of motorcycles among all Honda companies in the world. Splendor is
the single largest selling two-wheeler model worldwide. The board of directors of
Hero Honda has approved the splitting of equity shares to five equity shares of
Rs 2 each from the present one equity share of Rs 10 each. It commenced
production of engine components in Jan.'87 to reduce manufacturing cost. In
1990-91, Hero Honda promoted a company - Hero Honda Finlease - to provide
lease finance to its customers. In 1993-94, the company launched a new model
Splendor. Hero Honda's main characteristics are its four-stroke engine
technology, fuel efficiency and low exhaust pollution levels. It exports to around
31 countries including Srilanka, Africa, west Asia, Bermuda, Zaire, Paraguay. The
company also introduced Street, 4-stroke step through motorcycle in the year
1998. During 1999-2000, it launched its most powerful and fast bike CBZ
powered by a 156 cc engine. The company also invested Rs 300 crs to roll out a
new motorcycle model every year in collaboration with Honda. Company came
up with Hero Honda Ambition. In 2003, Company made a record by selling large
quantities of newly launched CD-DAWN. After this , the company decided to give
a new look to Splendour and Passion. In 2003, company came up with Hero
Honda Splendour Plus and Passion Plus. It has also increased its installed
capacity of motorised two wheelers by 300000 Nos during the year under review.
It has also participated in India Tech Expo in Nigeria. The response shown to the
products was very encouraging in the fair and the company expects to clock a
higher export sales during the current financial year. Recently, the company has
just launched Glamour bike with specifications like 124.7 cc engine, with a top
speed of 95 km/hr, 4 gears with options like disc or drum brakes and other

options like

kick or self start. It is

enhanced functionality combined

with

strengths of riding comfort and fuel efficiency.

Of the total motorcycle sales , HHML has a maximum of around 36.5% market
share in the Western Zone and 28.6% in the Southern Zone which has remained
more or less consistent from last year. In the Eastern Zone Hero Honda has a
market share 12%. HHML, a part of the Hero group, is a reputed name in the
two-wheeler sector and the management has a rich experience in the business.
HHML is a joint venture with Honda Corporation , Japan and over the years has
been the most successful Indo-Japanese venture in two-wheelers.
The company has emerged as one of the most successful players, much ahead
of its competitors an account of its superior and reliable product quality
complemented with excellent marketing techniques . The company has been
consistently addressing the growing demand for motorcycles and has a
cumulative customer base of over 4 million customers which is expected to reach
5mln mark with the rural and semi-urban segment being the new class of
consumers
BIKE JOURNEY
Company

Apr-Jun
2008-09

Apr-Jun
2009-10

Growth
%)

Market
Share (%)

Hero Honda

877,089

1,094,996

24.84

51.26

Bajaj Auto

391,100

331,731

-15.18

15.53

TVS Motors

292,530

315,785

7.94

14.78

Honda

226,068

284,890

26.01

13.33

1,865,767

2,135,869

Total Market

14.48 -

Highlights of Q2, FY'08-09

Total turnover(Net sales & Other Operating income)Rs 3202 crores,

growth of 35.6 per cent

Net profit after tax at Rs 306.30 crores, growth of 50 per cent

EBIDTA margin for the quarter 13.58 per cent

Total sales for Q2 stands at 9,72,095 units, growth of 28.5 per cent

Total sales for H1 stands at 18,66,349, growth of 19.7 per cent

Over 55 per cent share in domestic motorcycle market

Launches first-of-its kind music video to celebrate 25 years of Hero Honda

The world's largest two-wheeler company for seven consecutive years, today
firmly reiterated its undisputed leadership in the domestic two-wheeler market
with impressive bottom line growth for the second quarter (Q2) July to
September - of this financial year (FY) 2008-09.
Even as the industry continued to face tough market conditions on account of
uncertainty over interest rates and overall credit squeeze, the company reported
50 per cent growth in profit after tax (PAT) at Rs 306.30 crore for the second
quarter. Hero Honda's profit after tax in the corresponding period last fiscal (July Sept, 2007-08) stood at Rs 204.33 crore.
Total turnover (Net sales & Other Operating income) grew to Rs 3202 crore, a
growth of 35.6 per cent over Rs 2361 crore recorded in the corresponding period
last fiscal. The company has recorded an EBIDTA margin of 13.58 per cent in the

quarter. The EBIDTA margin in the previous quarter (April - June '08) was 12.20
per cent.
The strong financial performance is in line with the company's better-thanindustry top line growth. After posting a growth 11.38 per cent in the first quarter,
the company kicked off the second quarter with a 39.8 per cent growth in sales in
the month of July, and followed up with 26.8 per cent growth in August and 22.4
per cent in September. Hero Honda consistently keeps growing its share in the
domestic motorcycle market, and currently enjoys over 55 per cent share.
Hero Honda's cumulative sales for the second quarter (Q2) this FY stands at
9,72,095 units - a growth of 28.5 per cent over Q2 last FY (2007-08). The
cumulative sales for the first six months (H1) stands at 18, 66,339 units of twowheelers compared to 15, 59,486 units sold in H1 in the last FY reflecting a
consistent 19.7 per cent growth in cumulative sales.

LITERATURE REVIEW
Brand Image

Brand image and Punchlines

Brand image helps the customer to personify a brand. Consumers always
perceives brand as a human being, which has certain values, beliefs, attitudes
and characteristics apart from its functional and non-functional benefits. Taking
leverage of this point Marketers appoint Brand Ambassadors for their strategic or
Mega brand. For example Rajdoot Motorcycles tried to position itself as a macho
man and accordingly appointed film star Dharmendra to endorse the motorcycle.
Again ICICI appointed Amitabh bachchan as their Brand Ambassador for the
credibility image. The Punchline must also support the image of the Brand
Ambassador; point is, the Punchline must synchronize with it. A famous example
is Sachin Tendulkar's association with Visa card. The Punchline was 'Go get it".
As Sachin is a 'go getter', never afraid of any circumstances and gives 100%
performance, so the Brand image of Visa card was totally in tandem with the
image of Sachin and the Punchline depicts the same thing. Thus we can safely
conclude that Punchline is the Bridge between Positioning and Brand image.

Improving brand image

Although changes in brand awareness are probably the easiest means of
creating new sources of brand equity, more fundamental changes are often
necessary. A new marketing program may be necessary to improve the strength,
favourability, and uniqueness of brand associations making up the brand image.

As part of this repositioning - or recommitment to the existing positioning - any

positive associations that have faded may need to be bolstered, any negative
associations that have been created may have to be neutralized, and additional
positive associations may have to be created.
One interaction along cannot build or tarnish the brand image, unless it is
particularly strong. The whole of giving consistent performance is what if once in
a while the brand does not perform up to expectations, customers do not start
feeling negatively about the brand. Customers should be willing to give benefit of
doubt to the brand if its performance slips once in a while. It is very important that
a brand owns up to such one-time lackluster performance and promises to make
amends. A brand which chooses to remain in a state of denial or ignorance about
its bad performance gives the signal that the brand no more cares about living
the values embodied in the brand, and nor does it care about customer
sentiments. It is usually useless arguing against customers. Customers will
interpret a brand's performance in their own way and the company's
interpretation of the situation has no relevance to the customer. Instead of
arguing against customer's interpretations of the brand's performance, a
company should try to understand the process by which the customer arrived at
the interpretation. This would often include an impartial assessment of the
brand's performance and the customer's existential situation in which he was
using the brand. A customer should never be allowed to have a perception about
the brand which is different from the perception about the brand and not let

customers develop their own perception. Every activity of the company should be
assessed in terms of its influence on customer's perception about the brand.
Brand building is a conscious customer satisfaction orientation process. The
brand owner tries to retain customers to its fold over their competitors by a mix of
hardware 7 software because when a customer feels satisfied he / she develops
a kind of loyalty for the same. Therefore, a strong brand, apart from name,
symbol or design, ensures quality, stability of assured future market and effective
utilization of assets. Further, a strong brand, which a retailer wants to stock
because of customer pull also provides the owner of the brand with a platform for
the sale of additional products.
Brand imagedeveloping a strategy for your brand
A strong brand image can be a powerful marketplace motivator. It differentiates
you from the competition. It can allow you to charge a premium price for products
or services. It can elevate the value of your company. Research can help you
understand the personality of your brand and your competitors brands from the
consumer perspective. Using it you can develop a smart brand strategy.
First stageQualitative research is conducted by a skilled moderator using focus
groups or in-depth interviews using:

Word associations

Photo sorts

Interpretation of visual scenes

Second stageQuantitative research is conducted among consumers using a

survey to evaluate the brands:

Attributes

Characteristics

Personality traits

Final stageCorrespondence analysis is provided by us that will:

Provide a graphic representation of the relationship between product

attributes, characteristics and personality traits

Show which brands own which product associations

Give you an understanding of where your brand is positioned in the

consumers mind

Brand switchingunderstanding the competitive landscape

Keeping an eye on the competitionand understanding how it affects your brand
is vital in staying competitive. Brand fence-sittersboth yours and your
competitions can be an opportunity. Brand switching research can:

Help you retain your own vulnerable customers

Give you information to help entice your competitions customers your way

Since there is no single, direct approach to investigate brand switching, a custom

research plan will be developed to:

Evaluate the degree of loyalty to your brand

Determine practical vulnerability such as price points and features

Determine emotional vulnerability such as relief, enjoyment and

confidence in your brand

Determine aspirational vulnerability such as the status of your brand

Determine what the brand promise is to the consumer

Corporate image and reputationlearning if your name affects the buying

decision
Your good name not only attracts and retains customers, it attracts talented
employees. We can help develop a one-time study or tracking study to measure
changes in your corporate image using qualitative and quantitative research.
A corporate image study will tell you:

Your key characteristics

How your key characteristics compare with those considered most

favorable

Where you stand relative to the image you want to project

Where you stand in your customers mind

Consumer Behaviour
Consumer behavior is defined as "the behaviour that consumers display in
searching for purchasing, using, evaluating and disposing of products and
services that they expect will satisfy their needs". This means that the buying
actions of consumers are greatly affected by their thought process and their
feelings experienced. Human beings are greatly influenced in their buying actions
by various factors like opinions of others, marketing stimuli like product,
advertising, packaging and product appearance. It is important here to

understand that consumer behavior is dynamic, involves interactions, and

involves exchanges.
A persons behaviour changes from place to place and situation to
situation or, say it is very inconsistent . The person when has a need, is
willing and able to satisfy the need is called a Consumer. The consumer
would go different ways to satisfy its needs depending on his social,
cultural, family, economic

and

educational

background. Consumer is the

principle a priori of business. The efficiency with which a free market system
of enterprise operates, depends upon the extent of consumer understanding
possessed by the business community. A business community that is ignorant
of

consumer

preferences

cannot

possibly fulfill

its obligations in a

meaningful and responsive manner

There are Psychological Theories that help us

to understand and predict

the effect of all external and internal factors on a consumer. External

factors include Culture, Society, Reference group and family etc. Internal factors
comprise in a consumer mind and how consumers learning, memory,
attitude, personality , lifestyle

and

motivation

levels

effect

consumer

behaviour. What would initiate a buying process and how a buying decision
would end is all covered under the study of consumer behaviour.
Brand Awareness
Brand awareness consists of brand recognition and brand recall performance.
Brand recognition relates to consumers ability to confirm exposure to the brand
when given the brand as a cue. Brand recognition requires that consumers can
correctly discriminate the brand as having been previous seen or heard. Brand
recall relates to consumers ability to retrieve the brand from memory when given

the product category, the needs fulfilled by the category, or a purchase or usage
situation as a cue.
The relative importance of brand recall and recognition will depend on the extent
to which consumers make product-related decisions with the brand present or
not. For example, if product decisions are made in the store, brand recognition
may be more important because the brand will actually be physically present.
Outside the store or in any situation where the brand is not present, on the other
hand, it is probably more important that the consumer be able to actually recall
the brand from memory. For this reason, brand recall is critical for service and
online brands: Consumers must actively seek the brand and therefore be able to
retrieve it from memory when appropriate.
Brand awareness plays a vital role in consumer decision making for three main
reasons:
(a) Learning Advantages: The first way that brand awareness affects consumer
decision making is by influencing the formation and strength of the brand
associations that make up the brand image. A necessary condition for the
creation of a brand image is that a brand node has been established in
memory. The nature of that brand node should affect how easily different
kinds of information can become attached to the brand in memory as brand
associations. The first step in building brand equity is to register the brand in
the minds of consumers, and the choice of brand elements may make that
task easier or more difficult.
(b) Consideration Advantages: It is important that consumers think of and
consider the brand whenever they are making a purchase for which the brand
could potentially be acceptable, or whenever they are consuming a product
whose needs the brand could potentially satisfy. In particular, raising brand

awareness increases the likelihood that the brand will be a member of the
consideration set, the handful of brands that receive serious consideration for
purchase (Loudon & Della Bitta, 2000; Keller (2004, p.68). Much research has
shown that consumers are rarely loyal to only one brand but instead have a
set of brands that they would consider buying and another-possibly smallerset of brands that they actually buy on a regular basis. Because consumers
typically only consider a few brands for purchase, making sure that the brand
is in the consideration set also means that other brands may be less likely to
be considered or recalled
(c) Choice Advantages: The third advantage of creating a high level of brand
awareness is that brand awareness can affect choices among brands in the
consideration set, even if there are essentially no other associations to those
brands. For example, consumers have been shown to adopt a decision rule to
buy only more familiar, well-established brands in some cases. Thus, in lowinvolvement decision settings, a minimum 'brand awareness may be sufficient
for product choice, even in the absence of formed attitude (Keller, 2004,
p.68): Consumer purchase motivation. Although products and brands may be
critically in to marketers, to many consumers in many categories, choosing a
brand is not a life or death decision; Consumer purchase ability. Consumers
in some product categories just do not have the necessary knowledge or
experience to be able to judge product quality even if they so desired.
Brand awareness is created by increasing the familiarity of the brand through
repeated exposure, although this is generally more effective for brand recognition
than for brand recall. That is, the more a consumer "experiences" the brand by
seeing it, hearing it, or thinking about it, the more likely it is that the brand will
become strongly registered in memory. Thus, anything that causes consumers to

experience a brand name, symbol, logo, character, packaging, or slogan can

potentially increase familiarity and awareness of that brand element.
Factors that affect the Consumer decision making process
A consumer making a purchase decision will be affected by the following three
factors:
Personal Factors:

Factors, which are unique to a particular person such as

demographic factors, like sex, race, age, income, occupation etc.

Psychological Factors: Psychological factors include motives, perception, ability
and knowledge, attitudes, personality etc.
Social Factors: Consumer wants, learning, motives are influenced by
opinion leaders, family, social class, reference groups and
subculture.
Family is the most important consumer buying organization in society, and family
members constitute the most influential primary references group. The family
orientation consists of parents and siblings. From parents a person acquires an
orientation toward religion, politics and economics, and a sense of personalk
ambition, self-wroth, and love. Even if the buyer no longer interactacts ery much
with his or her parents, their influence on behaviour can be significant. A more
direct influence on every day buying behaviour is the family procreation, ones
spouse and children.
Segmental Classification and Characteristics
The three main product segments in the two-wheeler category are scooters,
motorcycles and mopeds. However, in response to evolving
demographics and various other factors, other subsegments emerged,

viz. scooterettes, gearless scooters, and 4-stroke scooters. While the

first two emerged as a response to demographic changes, the
introduction of 4-stroke scooters has followed the imposition of
stringent pollution control norms in the early 2000. Besides, these
prominent sub-segments, product groups within these sub-segments
have gained importance in the recent years.
The Indian two-wheeler industry has undergone a significant change over the
past 10 years with the preference changing from scooters and
mopeds to motorcycles. The scooters segment was the largest till
FY1998, accounting for around 42% of the two-wheeler sales
(motorcycles and mopeds accounted for 37% and 21 % of the market
respectively, that year). However, the motorcycles segment that had
witnessed high growth became larger than the scooter segment in
terms of market share for the first time in FY2007. Between FY2000
and 9MFY2007, the motorcycles segment more than doubled its share
of the two-wheeler industry to 79% even as the market shares of
scooters and mopeds stood lower at 16% and 5%, respectively.
Over the past 10-15 years the demographic profile of the typical two-wheeler
customer has changed. The customer is likely to be salaried and in the first job.
With a younger audience, the attributes that are sought of a two-wheeler have
also changed. Following the opening up of the economy and the increasing
exposure levels of this new target audience, power and styling are now as
important as comfort and utility.
The marketing pitch of scooters has typically emphasised reliability, price,
comfort and utility across various applications. Motorcycles, on the other hand,
have been traditionally positioned as vehicles of power and style, which are
rugged and more durable. These features have now been complemented by the

availability of new designs and technological innovations. Moreover, higher

mileage offered by the executive and entry-level models has also attracted
interest of two-wheeler customer. Given this market positioning of scooters and
motorcycles, it is not surprising that the new set of customers has preferred
motorcycles to scooters. With better ground clearance, larger wheels and better
suspension offered by motorcycles, they are well positioned to capture the rising
demand in rural areas where these characteristics matter most.
Scooters are perceived to be family vehicles, which offer more functional value
such as broader seat, bigger storage space and easier ride. However, with the
second-hand car market developing, a preference for used cars to new twowheelers among vehicle buyers cannot be ruled out. Nevertheless, the past few
years have witnessed a shift in preference towards gearless scooters (that are
popular among women) within the scooters segment. Motorcycles, offer higher
fuel efficiency, greater acceleration and more environment-friendliness. Given the
declining difference in prices of scooters and motorcycles in the past few years,
the preference has shifted towards motorcycles. Besides a change in
demographic profile, technology and reduction in the price difference between
motorcycles and scooters, another factor that has weighed in favour of
motorcycles is the high re-sale value they offer. Thus, the customer is willing to
pay an up-front premium while purchasing a motorcycle in exchange for lower
maintenance and a relatively higher resale value.
Factors that affect the Consumer decision making process
A consumer making a purchase decision will be affected by the following three
factors:
Personal Factors:

Factors, which are unique to a particular person such as

demographic factors, like sex, race, age, income, occupation etc.

Psychological Factors: Psychological factors include motives, perception, ability

and knowledge, attitudes, p