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Motorbikes constitute about 81.5% of the total two wheeler market in India.

There has been a perceptible shift towards motorcycles because of better styling, high fuel efficiency, reduction in the price differential between scooters and motorbikes and higher load carrying capacity. The domestic sales of the motorbikes grew from 2887194 in 2001-02 to 5815417 in 2006-07(Annexure 1). The major players in the motorbike market are Bajaj Auto, Hero Honda, TVS motors, Royal Enfield, Yamaha motors, HMSIL and Suzuki motors. Hero Honda alone sells more than half of the bikes sold in India. Company wise total sales of motorbikes is given in Annexure2

MARKET SEGMENTATION
Market segmentation is the process of dividing a market into groups of segments having similar wants. It enables a marketer to take a heterogeneous market, a market consisting of customers with diverse characteristics, need, wants and behavior, and carve it up into one or more homogenous markets which are made up of individuals or organizations with similar needs, wants and behavioral tendencies. It not only benefits the firm but consumer as well. Market segmentation in the motorbike industry is done on following basis:

A.

GEOGRAPHIC SEGMENTATION
Rural and Urban market: According to the 61st round of National Survey Sample for July 2004 – June 2005, motorcycles were possessed by 7.7% of households in 2004-2005 which had increased to 15% in 2007-2008. Motorbikes in the rural segment belong to entry level segment (100 - 125 cc), major player being HERO HONDA. Hero Honda's share of rural sales has gone up from 38 per cent in 2007-08 to 40 per cent in 2008-09. In late 2007, Hero Honda launched a rural campaign called "Har Gaon, Har Aangan (every village, every home)" which helped increase its sales. The bikes in this category are: HHML Passion Plus, Splendour Plus, Hero Honda CD Dawn. The urban market is divided into Tier I, Tier II, Tier III, Tier IV cities on the basis of population and geographic size. The sales and the variants of the motorbikes vary accordingly in these four types of cities.

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Tier I constitutes the six metropolitans in India at present and remains the centre of economic and financial activities. In the metropolitan cities, mostly the bikes which have high performance level are sold as compared to other cities where affordability factor is also taken into account. In Tier I cities such as Mumbai, the motorbikes such as Hero Honda Karizma, Pulsar 180, etc are preferred. In Tier II cities, motorbikes such as Pulsar 150, Hero Honda Passion and TVS Star are sold more. In Tier III the trend is of bikes such as Honda shine, Kinetic velocity.

The total sales of motorbikes in these cities are given in Annexure3.

young married couples with children 12000-15000 Professional. professional 10000. young married couple. young married couple 13000-18000 Student. a survey was conducted in the various showrooms located in Delhi and NCR Yamaha Motors R15 Age Family life cycle 19-28 yrs Bachelorhood. lower upper class GLADIATOR 20-39 yrs Bachelorhood. FAZER 19-28 yrs Bachelorhood. monthly income. Young professional Gen MTV Upper middle class Karizma 19-26 YRS Bachelorhood.40 YRS Bachelorhood. young married couple 13000-18000 Student.B. DEMOGRAPHIC SEGMENTATION: The segmentation variables for demographic segmentation in the motorbike industry include age. The market caters only to the male segment. occupation and social class. lower upper class Monthly income Occupation Generation Social class . young married couple. These variables are easier to measure and on basis of these one can estimate the size of markets which serve as a key indicator for distinctive markets. lower upper class Hero Honda Motors Ltd. young married couple with children 10000-13000 Professional Gen X Lower middle class. young married couple 15000-18000 Student. young married couple 20000-25000 Student Gen MTV Upper middle class. student Gen X Upper middle class Hunk 19-35 YRS Bachelorhood. young married couple > 50000 Student. lower upper class FZ-16 19-28 yrs Bachelorhood. Glamour Age Family life cycle 23. Young professional Gen MTV Upper middle class. young married couple 18000-30000 Student. Young professional Gen MTV Upper middle class. Young professional. lower upper class FZS 19-28 yrs Bachelorhood. generation. upper middle class CBZ-Xtreme 19. executives Gen x Upper middle class Monthly Income (Rs) Occupation Generation Social class Gen MTV Upper upper class.13000 Student. To better understand this segmentation. family life cycle.40 YRS Bachelorhood. Young professional Gen MTV Upper middle class.

Efficient service. high resale value. • Features of motorbikes more than 180 CC: . These bikes also offer fuel-efficient performance but also bear a higher price tag. power also increases and so does the fuel efficiency. 100-150cc. robust on road presence. The bikes in this segment have created a niche market in India that attracts those bike enthusiasts who want ultimate biking experience. mileage Low cost Stylish. • Features of motorbikes less than 100 CC • Features of 100-150 CC motorbikes: • Features of 150-180 CC motorbikes: These motorbikes also attract young riders passionate for style and performance. single cylinder engine that delivers approximate output of 7. comfortable.0-8. The 100 CC motorcycles in India consist of those bikes which offer great value for money advantage. Motorbikes in this segment contain a 4 stroke. These bikes are relatively bigger in size. brand name. These bikes attract mostly the office goers who want maximum fuel-efficiency with minimum price that may start from Rs. TVS. The motorbike market in this segment in India is very stiffly competitive and its players like Bajaj.5-15. Mileage. SEGMENTATION BASED ON BENEFITS SOUGHT BY THE BUYERS: Benefit segmentation is based on the assumption that the benefits a consumer expects out of the product are the basic reason for the purchase. power Benefit segmentation can also be done on the basis of engine capacity because as engine capacity increases. The different capacities are: less than 100cc. high pick up. 150 -180cc and greater than 180cc. Sleek model.C.0-8. Motorcycles in this category host lots of sporty features like: sporty aerodynamic looks. The customers can be grouped as per the basic reason of their purchases i. large fuel tank. large fuel tank. Bikes in this segment deliver 13. Easy maintenance. A motorcycle of 125 cc delivers an approximate output of 8.5 BHP of power with 8500-10000 RPMs. large alloy wheels etc. Hero Honda launch their bikes with comparatively attractive design and sporty features. These motorbikes attract young riders passionate for style and performance. The engine capacity in the motorbike segment has been demarcated on the basis of Cubic Capacity. Power Fuel efficient. Motorcycles in this category host lots of sporty features like: sporty aerodynamic looks. large alloy wheels etc. power. MOTORBIKE BRANDS BAJAJ AUTO HERO HONDA TVS MOTORS YAMAHA MOTORS ROYAL ENFIELD PERCIEVED BENEFITS Brand name. high pick-up and stylish. comfortable for long rides. High pick-up. robust on road presence. These bikes are also used by the fast food chains and courier services for delivering purposes.5 BHP with 8300-8500 RPMs.e. High performance Sturdy. having sporty looks and high performance. The bikes under these categories have been listed in Annexure 4. it involves classifying buyers according to the benefits they expect from the product.32000-35000 approximately.0 Brake Horse Power (BHP) with 7200-8200 Rotations Per Minute (RPMs).

Yamaha Fazer. Bajaj Avenger. PREMIUM SEGMENT: Motorbikes with price range greater than Rs. (Annexure 5) I. Hero Honda dominates this segment with a market share of ~70% followed by Bajaj Auto (20%). HMSI (~6%) and TVS Motors (1%). accounting for 80% of the domestic motorbike sales. This is the largest segment.Deluxe. . 40000 to 70000. Hero Honda Hunk. This segment retrieves higher revenues from the rural areas. TVS Star etc.Yamaha Fazer. Hero Honda Hunk. Motorbikes are bought according to individuals taste and lifestyle. Bajaj Pulsar 220. ENTRY LEVEL SEGMENT: These include motorbikes with price less than Rs. EXECUTIVE SEGMENT: Motorbikes with price range between Rs. The bikes in this category are: Glamour 125. comfort and mileage on his mind. II. XCD 135 Bajaj Discover etc. 40000 that typically have engine displacements less than 125cc. Bullet Thunderbird. PSYCHOGRAPHICS SEGMENTATION This includes the segmentation on the basis of Lifestyle and Personality. I. Hero Honda Motors is the undisputed leader in this segment. Yamaha FZS. A person who perceives himself to be very bold desires a high performance and power bike which enhances his personality A prime example for this case may be Bullet. Bullet Electra. Similarly a person who desires style. prefers bikes like Hero Honda Karizma. • Similarly Yamaha FZS aims at students who wish to use their bikes only for small distances whereas Enfield Bullet is for the consumers who wish high power and travel long distances. PERSONALITY Personality of an individual also defines what product and brand to choose to a certain extent. Enfield Bullet 350.D. The premium segment focuses more on technology and flamboyance. which are less dependence on finance. III. therefore comparatively it is among the best performing segments. • Racing Enthusiastic would prefer Yahama R15 and TVS Apache RTR II. E. The motorbikes in this segment are: Hero Honda Karizma. • Hero Honda Karizma is meant for youth who wants a stylish bike with high performance while Hero Honda Passion aims at the individual who has affordability. Yamaha FZS etc. • Adventure seekers who enjoy traveling on motorbikes prefer Royal Enfield Bullet. Hero Honda has a wide range of subbrands. Yamaha R15. Hero Honda CD. Bullet 500. The motorbikes in this category are: Hero Honda CD-Dawn. SEGMENTATION BASED ON PRICE PREFERED BY BUYERS: Motorbikes can be segmented into three categories.70000. LIFESTYLE Lifestyle affects one’s purchase decision significantly.

Designing based on “Triple Macho Concept”. • Muscular silhouette • Muscular body parts • Muscular chassis FZ-S scores high in looks not only in its segment but beyond and is designed to satiate the need for style and fashion by riders.5 BHP (Power). Brakes: Disk (Front) / Drum (Rear). In January 2009 Yamaha launched the muscular FZ-S. FZ-S is etched with style and geared to today’s fashion conscious customers. new colors & graphics. FZ-S highlights the style quotient and has more flesh to flaunt with purely European international design. High Performance: 4 stroke. stylish & sporty carbon pattern meter consol. Strong on Road Presence. Stylish and Larger capacity Fuel Tanks. Sporty and Bigger Silencer / Mufflers. Digitally Operated Spark Plug. LCD Speedometer Display. aerodynamic chiseled windshield.POSITIONING Points of Parity • • • • • • • • • • • • • Sporty Design. Funkier and Trendy Dual shade with body graphics. . well designed powerful motorcycles targeted at biking aficionados.5 -15. Points of Disparity 1. 13. FZ -S reflects visual expression of performance. Broader. “Highlight your Style.” Focus: Youth looking for distinctive style backed by performance Positioning Strategy: Yamaha Motorcycle India is shifting its focus from commuter bike segment to sporty. and more aggressive looking headlight. 150 cc engine. Aerodynamic looks. Flaring Headlamp. Larger Alloy Wheels. YAMAHA FZ-S Tagline: “Lord of the Streets”.

The bike scores very high on style and also the performance to match. 3. Launched in 2009. and the latter to provide more safety with a better rear view. designed to fulfill the needs of the adventurers and explorers.Passing on the “R series” DNA” FOCUS: High technology racing performance bike for racing enthusiasts. . Whereas in FAZER. The bike was launched in June. YAMAHA R15 Tagline: “RACING INSTINCT. The second major difference is the riding position. The bike is essentially similar to FZ-16. however this is not ideal for touring. R15 was created to lead the Super Sport category in India. well-suited to the needs of a tourer (travelling long distances). Tagline: “Touring spirit-open your horizon” “Let the weekend never end” FOCUS: Urban youth looking to explore the outdoors. 2008.tourer. The Yamaha R15 was designed by Yamaha exclusively for the Indian market. 2. The Fazer ad shows working professionals skipping work to explore the outdoors on their bike. more comfortable riding position. balancing and maneuverability. Bike is targeted at youth aspiring to set themselves apart on style. • The bike is targeted at urban youth looking to break away from the rut of the city.Moto GP Design for excellent rigidity. YAMAHA FAZER 3. • Flaring New Headlamps and newly designed Rear View Mirrors – The former to give a distinctive look. apart from 2 modifications done on the original FZ-16. which gives a sporty look and feel. so as to differentiate it from the other Yamaha Offerings. the handle bar has been raised a few notches higher. FZ-16 being a sporty bike has a forward – bent stance. to provide a straighter. • Delta Box Frame.The company emphasizes on functional beauty. The bike was able to cut through the “noise” because of its very distinctive looks and good performance. The bike comes with a number of firsts for the Indian bike industry. • Linked Type Monosuspension: For greater stability. the bike has been positioned by the company as an internationally acclaimed sports.

• Fuel Injection System: Electronic fuel injection. • Broad muscular fuel tank with brawny shoulders • Headlight Glaring headlight with aggressively styled visors • Saddle Contoured sporty saddle. powerful. HERO HONDA HUNK Tagline: “Because Muscles Matter” Focus: A well designed product for bikers who want the feel of a BIG bike. all-aluminium body reduces friction and leads to better cooling. Helmets and Riding Gear to R-15 Key Chains. 5. designed to fulfill the racing desires of the younger generation. aggressive. Yamaha has gone a step ahead and has also launched R-15 merchandise ranging from R-15 Tshirts. The bike is primarily designed with a racing approach encapsulating the following features: • Lap Timer • Provision for the last three 0–60 km/h timings. All this technology gives R-15 a definite edge over others and makes it the best racing bike in the market. • Rear Cowls: Muscular Rear Cowls. It also features an aggressive visor and muscular rear cowls. TVS APACHE Tagline: “Racing DNA Unleashed” FOCUS: A bike designed especially for racing enthusiasts. Positioning Strategy: Powerful. R-15 is the most technologically advanced indigenous bike. muscular. • 4. fiery and dashing while describing its feature. glaring. aggressive bike. The company talks about the following features with adjectives like-broad. The product has been positioned as a muscular. • Forged Aluminium Piston: Light weight. brawny.Liquid Cooled Engine: Used in MOTOGP to maintain constant temperature and to ensure higher engine performance. racing bike. The hunk has been styled to give it a big bike presence by providing fake air scoops at either sides of the fuel tank. • Petal Disc Brake . • Fiery red chrome ringed speedometer • Silencer: Dashing Inclined Muffler. toughened. TVS Motors launched Apache in the market as a bike which sported features that emulated racing bikes.

5 2006 9M 2006 9M 2007 82.5 8.7 0.9 0.3 67.4 Motorcycles >100 100-150cc 150-180cc >180cc .1 65.3 11.1 0 0 0 68.7 0.6 2004 77.9 16.6 68. thus providing an opportunity to race enthusiasts ANNEXURES ANNEXURE 1 Trends of Sales of two wheelers in India Category Scooters Motorcycles Mopeds Grand Total 2001-02 908268 2887194 408263 4203725 2002-03 825648 3647493 338985 4812126 2003-04 886295 4170445 307509 5364249 2004-05 922428 4964753 322584 6209765 2005-06 908159 5815417 332741 7056317 Share of Domestic Motorcyces Sales 2003 75.5 0.4 0.2 8.5 2005 80 0. Circuit Racing Tutorials and a hot lap competition .2 68 67.8 13.3 84. TVS has launched an ARE (Apache Racing Experience) which includes Dirt Racing .4 0.8 1.Keeping in tune with its marketed product and Tagline.1 13.4 0.4 82.

Domestic Sales and Exports Production Domestic Sales 2006 2007 Growth 2006 2007 Growth Motorcycle s 4555 5418 18.9 4283 4960 15.8 <100cc 0 0 1 0 100-150cc 3737 4256 13.4 2006 283 0 201 80 2 Exports 2007 Growth 421 0 297 122 2 52.3 44.9 3538 3961 12 150-180cc 797 1138 42.9 724 976 35 >180cc 22 24 8.1 79.8 .8 20 22 8.6 9.90 80 70 60 50 40 30 20 10 0 2003 2004 2005 2006 9M 2006 9M 2007 Motorcycles > 100 100-150cc 150-180cc > 180cc India Motorcycle Production.

2 13.8 289307 0 2155479 2329158 13.060 .6 100 47 2.7 12.1 3.5 19.3 1.9 3.6 Motorcycl es HHML Honda TVS Yamaha ANNEXURE 3 State-wise sales of Motorbikes. 17 4282930 4 1 15.7 12.2 17.6 100 50.1 752576 546322 650596 17.7 1. 1998 Delhi 21.1 8.1 98072 72151 107585 51.1 210417 153370 179932 -1.8 3.3 Market Share (%) 200 9M 9M 6 FY2006 FY2007 100 49.100% 80% 60% 40% 20% 2006 Growth 2006 2007 2006 2007 Growth 2007 Growth 0% > 180cc 150-180cc 100-150cc < 100cc Production Domestic Sales Exports ANNEXURE 2 Trends in Domestic Sales and Market Shares Domestic Sales (Units) Growth (%) 9M 9M 200 9M 2006 FY2006 FY2007 6 FY2007 58154 495986 17.1 49.

275 2.Himachal Pradesh Jammu & Kashmir Punjab Haryana Chandigarh Rajasthan Uttar Pradesh Assam Bihar Orissa West Bengal Goa Gujarat Madhya Pradesh Maharashtra Andhra Pradesh Karnataka Kerala Pondicherry Tamil Nadu Other Total 480 1537 26124 37.885 60.015 75.363 33.448 1.17.965 1.845 6.090 86.466 64.969 12.062 1.46.02.330 16.590 1.090 2.949 21.271 80.072 2.15.66.169 .283 5.42.

) Economy Low <40000 Executive Medium 40000-70000 Premium High >70000 Fuel Efficiency High High Moderate Economy Motorcycle: Market share of key models (April 09) Market Share (%) CD Dawn 35.ANNEXURE 4 Motorbikes listed according to engine capacity Less than 100 CC › Hero Honda CD Deluxe › Kinetic Boss › TVS Centra 100-150 CC Bajaj Discover Hero Honda Glamour Honda Unicorn LML Adreno FX LML Freedom Suzuki Zeus TVS Victor Yamaha Gladiator › › › › Bajaj Platina Hero Honda Passion Plus Kinetic Challenger TVS Star › Hero Honda CD Dawn › Hero Honda Splendor + › Kinetic Stryker › › › › › › › › › › › › › › › › Bajaj Wind 125 Hero Honda Super Splendor Kinetic GF 125 LML Beamer LML Graptor Suzuki Heat Yamaha Crux Yamaha Libero G5 › › › › › › › Pulsar 150 DTS-i UG Honda Shine Kinetic Velocity LML Energy FX TVS Fiero TVS Apache Yamaha Enticer 150-180 CC › Bajaj Avenger › Kinetic GF Laser More than 180 CC › Hero Honda Karizma › Bullet 350 › Bullet Machismo › Bajaj Pulsar 180 DTS-i › Kinetic GF 170 › Hero Honda Achiever - › Kinetic Comet › Bullet 500 › Thunderbird ANNEXURE 5 › Kinetic Aquila › Bullet Electra - Motorcycles: Economy vs Executive vs Premium Target Income Price Range (Rs.6 Star 26.9 Platina 29.5 .

8 Passion/Passion + 29.4 CBF Stunner 1.1 Glamour 125 5.8 FZ16 8.6 Shine 6.7 XCD135 5.9 Apache 9.7 Unicorn 11.6 CBZ Xtreme 15.9 Hunk 8 .Economy Motorcycle Market Share (% ) 40 20 0 CD Dawn Platina Market Share (%) Star Executive Motorcycle: Market share of key models (Apr 09) Market Share (%) Splendour Plus/Super Splendour 43.3 Discover 5.8 Premium Motorcycle: Market share of key models (Apr 09) Market Share (%) Pulsar 30.

Unicorn Apache treme FZ16 Hunk Bullet Karizma .9 2.9 Premium Motorcycle Segment Market Share (% ) 35 30 25 20 15 10 5 0 Pulsar CBZ X.Bullet Karizma 4.