CHAPTER TITLE PAGE NO:

NO:
I.
INTRODUCTION AND
RESEARCH METHODOLOGY

II.
CONCEPTS AND REVIEW OF
LITERATURE

III.
PROFILE OF THE COMPANY

IV.
ANALYSIS AND
INTERPRETATION OF DATA

V.
FINDINGS,SUGGESTIONS
AND CONCLUSION
 CHAPTER I

INTRODUCTION
&
RESEARCH
METHODOLOGY
 CHAPTER I

INTRODUCTION

INTRODUCTION TO THE STUDY

In today’s intensely competitive environment, companies today are constantly
looking for ways to attract customers by having a better understanding of
changing customer preferences. The Indian two‐wheeler industry is
experiencing a major shift in its shape and structure. The established players in
the industry are taking a hard look at their promotion of products and are in
the process of reshuffling them to meet the attraction of customers. The
beneficiary is of course the consumer, who have increased array of brands to
choose products.

The last four‐five years have brought about a great change in the consumer
attitude for two‐ wheelers. The market leaders of yesteryears are being driven
to maintain their leadership position in the forthcoming years. Those who have
had a great going in the last few years are fighting hard to retain their new
supremacy. The two‐wheeler industry is perhaps the most happening place in
terms of new models launched, upgraded products and innovative marketing
techniques. Today the Indian two‐wheeler market is highly competitive with
numerous players who offer anything and everything a consumer demands
and that too at affordable price. From a seller’s market where one had to wait
for a scooter for 12 years to the days when you can just walk into any
showroom and drive out in the vehicle of your choice, the market of two‐
wheelers in India has come a long way.

The story of two‐wheelers in India is a good case study of how fortunes

change overnight. Two‐ wheelers in India were hardly popular and Hero was
the only player, which had carved a niche for motorcycles. Earlier market was
small and limited while scooters ruled the roost but today, it is one of the
biggest success stories.  
 INDUSTRY PROFILE
ABOUT THE INDUSTRY
India is the second largest producer and manufacturer of two-wheelers in the
world. Indian two-wheeler industry has got spectacular growth in the last few
years. Indian two-wheeler industry had a small beginning in the early 50's. The
Automobile Products of India (API) started manufacturing scooters in the country.
Bikes are a major segment of Indian two wheeler industry, the other two being
scooters and mopeds. Indian companies are among the largest two-wheeler
manufacturers in the world. The two-wheeler market was opened to foreign
companies in the mid 1980s. The openness of Indian market to foreign companies
leads to the arrival of new models of two-wheelers into India. Easy availability of
loans from the banks, relatively low rate of interest and the discount of prices
offered by the dealers and manufacturers lead to the increasing demand for two-
wheeler vehicles in India. This leads to the strong growth of Indian automobile
industry.
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 Motors corp. (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).
Riding high on the expectations of consumers, Hero has successfully crossed
over the one million units mark in sales. As a part of this initiative, it started a
mobile workshop and showroom, through which people will be able to gather
knowledge about the companies' vehicles and can also buy them. These
mobile marketing efforts are focused on Splendor and Joy.  

NEED FOR THE STUDY

In today’s scenario when customer attraction is the mantra for success, a

study on factors influencing consumer attitude towards promotional strategy
is a necessity.

  The two wheeler business has acquired the characteristics of a matured

market, driven by momentum of new product launches, offer of a large variety
of models for customers and very competitive marketing and financing.
Notably, premium motor cycle consolidated their importance both in terms of
brand image and relatively good market share. Manufacturers such as Hero,
Honda, Yamaha and Suzuki grew faster than industry average, albeit from a
small base, as they focused on premium products. Scooter sales have also
started to pick up again underscoring some resurgence of this sector after
almost a decade of decline. This parallels a global trend where scooters are
becoming more popular as chic, stylish and practical urban commuter vehicles.
The dynamics here are obviously closely linked to buyer priorities and road
traffic conditions.

     Brand Hero has a strong presence in the market and it is difficult to

promote in all areas. The recent recession across the globe had its own
repercussions in the automobile sector also, in terms of slowing down of sales
etc. Of late the industry is recovering. Against this backdrop the Indian auto
industry fared better. The present study deals with the factors influencing
consumer attitude towards promotional strategy of Hero Two Wheeler.  
OBJECTIVE OF THE STUDY

 To know about the promotion strategies of the Hero Moto Corp.

 To know the customer attraction towards various promotional strategy

in term of rank.

 To know the customer buying behaviour of various models of Hero

motorcycle.

 To know the customer attitude towards sales promotion and

advertisement by Hero Moto Corp.

 To know their marketing strategies, product and the services they

deliver.

SCOPE OF THE STUDY:

This study covers the promotions which influence the customers to opt
for a particular brand Hero motor cycles. This survey will help the
company to evaluate their marketing strategies, product and the
services they deliver. This will act as a tool for the company to know
their promotion effectiveness in the market. It covers the buying
behavior of the customers.
 RESEARCH METHODOLOGY

Overview of the project

Hero MotoCorp may be the market leader in the entry-level bikes segment with
about 69 per cent market share. But it is the middle-of-the-road segment bikes and
scooters that came to its rescue in the June quarter.

Sales volume for the entry segment bikes (Dawn, Deluxe, Splendor, Passion)
dropped by almost 10 per cent in the current quarter compared with the same
quarter last year.

But the Super Splendor, Glamour and Ignitor as well as scooters such as the
Pleasure and Maestro stood the company in good stead with robust volume growth
of 18 per cent and 49 per cent respectively.

The superior product mix , coupled with a price increase in the range of Rs 500-Rs
1,500 in May, moved up average realisations for the company. It stood at Rs
39,300 in the quarter ended June vis-à-vis Rs 37,800 last year. Hence, despite a 5
per cent drop in overall sales volume, the fall in net sales was restricted to about 1
per cent. This was further aided by a drop in raw material expenses, which helped
the company hold on to the same operating margins of 14.8 per cent as in the June
2012 quarter.

Despite lower depreciation and amortisation charges and higher other income, net
profit declined by 11 per cent to Rs 548 crore as tax expenses shot up.
Objectives of the Study

 To explore the product line of Hero MotorCorp

 To know the various factors, which influence customers in purchasing,

 To find the after sales service offered by Hero MotoCorp Ltd.
 To understand two wheeler sector in India.
 How the split with Honda has affected Hero motors.

Data Sources
There are two types of data:

Secondary data was collected through online journals, previous studies done in
same field, company websites, online articles, books and magazines .

Primary data is which is collected through survey from customer.

LIMITATION OF THE STUDY:      

The main limitation of the study is as follows,

• The results are based entirely on survey conducted in trichy location and cannot
be generalized as a whole for other geographical regions.

• This study is based upon primary data so any wrong information given by the
respondent may mislead the findings.

• The respondents may be biased about furnishing the information.  

• Involves a great deal of money and time.

• Data collected under this technique is subjective in nature therefore they may
not lend easily to quantitative checks.
Chapter II

CONCEPTS AND REVIEW

OF LITERATURE
CONCEPTS:
Definition of customer:
Customer is defined as “An individual or business that purchases the goods or
services produced by a business. The customer is the end goal of businesses, since
it is the customer who pays for supply and creates demand. Businesses will often
compete through advertisements or sales in order to attract a larger customer
base”.
Customer Satisfaction:
Customer satisfaction is the determination of the degree to which a company’s
products or services meet the requirements of the end user.
Customer satisfaction is the customer’s evaluation of a product or service in terms
of whether that product or service has met their needs and expectations.
Customer’s expectations are continuously increasing. Brand loyalty sis a thing of
past. Customers seek out products and services that are best able to satisfy their
requirement.
It is not enough if the product meet customer’s expectations like the behavior or
attitude of the person. Customer satisfaction is the combination of both technical
features and human behavioral aspects.

Customer satisfaction can be represented as follows :

Performance features addresses the issues on conformance to the standards and
variability.
Behavior aspectsdeal with the following component of service:
Responsiveness– readiness of employee to provide service.
Courtesy – respect, friendliness, politeness and consideration.
Complete resolution – listening to customers.
Communication – speaking to the customers in their language.
Credibility– taking ownership and resolving the complaints.
If customer’s experience matches with customer expectations, it leads to
customer satisfaction and if customer’s experience doesn’t match with customer
expectations it leads to customer dissatisfaction. On similar lines, if it exceeds
customer expectations it leads to customer delight.

Phases in Customer Satisfaction:

➢ Pre-sales period: During this phase, the customer satisfaction are built
through the various information on the products i.e., its quality, core benefits, its
price distribution outlets and so on. The customer is in a way attracted to the
benefits of the product that he would gain after the purchase of the product.

➢ During sales period: During this phase, the customer is experiencing on being
converted from a prospect to an actual buyer. Here customer satisfaction will be
felt if given an opportunity to inspect the products, attentive services ambiance
etc.
➢ After sales period: This phase starts after the customer has bought the
product and started using it. Customer satisfaction will be matching the customer
expectation if the required support or advice is provided by the firm, efficient and
effective follow-up process, efficient repair and maintenance service.

Ten Rules for Great Customer Service:

➢ Commit to quality services: Everyone in the company needs to be devoted to
creating a positive experience for the customer. Always try to go above and
beyond customer expectations.
➢ Know your products: Convey and articulate an in-depth knowledge of products
and services to win customer’s trust and confidence. Know your company’s
products, services and return policies inside and out.
➢ Know your customers: Try to learn everything you can about your customer in
order to tailor your service approach to their needs and buying habits.
➢ Treat people with courtesy and respect: Remember that every time you, your
employees make contact with customer – whether it’s by email, phone or a face
to face meeting - the interaction leaves an impression with that customer. Use
conciliatory phrases – “sorry to keep you waiting”, “thanks for your order”. “You
are welcome” etc., - to demonstrate not only your commitment to customer
satisfaction but your dedication to courtesy also.

➢ Never argue with a customer: You know very well that the customer isn’t
always right however it is important that you don’t focus on the missteps of a
particular situation, instead concentrate how to fix it.

➢ Don’t leave customers in limbo: Repairs, call backs and emails need to be
handled with a sense of urgency. Customers want immediate resolution and if
you can give it to them, you will probably bring win their repeat business.

➢ Always provide what you promise: You will lose both your credibility and
customers, if you fail to full fill the promise. If and when you neglect to make
good on your promise, apologize to your customer and offer some type of
compensation such as free delivery or discount. Overall, only make promises that
you can and your business can keep.

➢ Assume that your customers tell the truth: Even though it may appear that
customers lie to manipulate a situation to their advantage, it is to your advantage
to give them the benefit of the doubt. If you hear unhappy rumblings from your
customer, take their complaints to heart and do your best to disappear the
dissatisfaction.

➢ Focus on making customers – not on sales: 20 Sales people, especially those

who get pay on commission focus on the volume instead of the quality of the sale.
Remember that – a customer’s business is more important than to close a sale.
Moreover happy customers are the best and the most effective way to find new
customers.

➢ Make it easy to buy: The buying experience in your store or on your website
or through catalogue should be as easy as possible. Eliminate unnecessary paper
work and forms, explain how products work and do whatever else you can to
facilitate transaction.
Measuring Customer Satisfaction:
Customer satisfaction refers to the extent to which customers are happy with the
products and services provided by the business. Customer satisfaction levels can
be measured using survey techniques and questionnaire. Gaining high levels of
customer satisfaction is very important to a business because satisfied customers
are most likely to be loyal and to make a repeat orders and to use a wide range of
services offered by a business.
There are many factors which lead to high levels of customer satisfaction
including- Products and services which are customer focused and then provide
high levels of value for money.
 Customer service giving personal attention to the needs of individual
customers.
 After sales service.
 Following up the original purchase with after sales support such as
maintenance and so on ….

II. REVIEW OF LITERATURE

Pai, Vadivel & Kamala (1995) have studied about the diversified companies and
financial performance. Main purpose of research was found out the relationship
between diversified firms and their financial performance. For the purpose of
research, they have selected seven large firms and analysed those firm which
having different products-both related and otherwise-in their portfolio and
operating in diverse industries. In this study, a set of performance measures /
ratios was employed to determine the level of financial performance and
variation in performance from one firm to another has been observed and
statistically established. They revealed that the diversified firms studied have
been healthy financial performance.
Samuel & Vanniarajan (2007) discussed about financial performance of bank by
applying Du-Pont analysis. They concluded that the liberalization of the finance
sector in India has divulged Indian banks to a new economic environment that is
considered by increased competition and new regulatory requirements. They also
revealed that Indian and foreign banks need to explore development
opportunities in India by initiating new products for different customer segment,
and many of which were not conservatively viewed as customer for the banking
industry. They suggested all banks should to evaluate their performance and
compare with the others. In the last they depicted from the analysis the
performance of the banks may be viewed on the base of three dimensions like
structural, functioning and efficiency factors which was suggested by the India
Bank Association.
Bhunia, Mukhuti & Roy (2011) have discussed about “Financial Performance
Analysis-A Case Study”. The main aim of study was to identify the financial
strengths and weaknesses by covering two public sector drug & pharmaceutical
enterprises listed on BSE. For study purpose, they have been selected twelve
years from 1997- 98 to 2008-09. They analysed the data by using ratios, and
statistical tools like A.M., S.D., C.V., linear multiple regression analysis and test of
hypothesis t-test. They used SWOT analysis to overcome the weakness and grab
the opportunities available in public sector drug & pharmaceutical enterprises in
consideration of strengths and threats. They concluded that growth during last
decade was noteworthy and market trend was growing at a faster rate. They
suggested that the opportunities can be grabbed through the diversification of
export basket in untouched foreign destinations. They also revealed that strict
quality standards, services and use of latest technology can provide an edge over
competitors across the globe.
Bhunia, Mukhuti & Roy (2011) “Financial Performance Analysis-A Case Study”
Current Research Journal of Social Sciences 3(3): 269-275, 2011
Dr Pratibha Jain & Prof. Megha Mehta (2013) In their study on financial
performance of automobile companies finds that Hero Honda company
performed well because of its usage of latest technology and Tata motors weak
performance due to increased manufacturing overheads and company’s inability
to face competition
 Tariq Zafar & Khalid (2012) have discussed about “A Comparative Evaluation of
Financial Performance and Market Value of Maruti& Tata Company”. For the
purpose of analysis, they have been selected two most preferred companies like
Maruti Suzuki Ltd. and Tata Motors Ltd., and for the using period of 2006-2010.
They tried to analyse qualitative and quantitative performance of both companies
and to investigated their risk and returns factors, their market position, their
collective impact on profitability and to come up with the best and worst
performing company by using modern performance evaluating techniques and
later ranking them according to their achieved performance. They concluded from
the ratio analysis there was a lack authenticity in data, in calculation which may
manipulating presentation by the promoters. They have also found that different
firms follow different accounting policies like depreciation allowance; valuation of
inventory etc. and often management ignore these differences while making
inter-firm comparison. They revealed that the change in price levels due to
inflation is also not properly considered by management.
 CHAPTER III

COMPANY PROFILE
COMPANY PROFILE

Hero Moto Corp formerly Hero Honda is a motorcycle and scooter manufacturer
based in India. Hero Honda started in 1984 as a joint venture between Hero
Cycles of India and Honda of Japan. The company is the largest two wheeler
manufacturer in India. The 2006 Forbes 200 Most Respected companies list has
Hero Honda Motors ranked at 108.

“Hero” is the brand name used by the Munjal brothers for their flagship company
Hero Cycles Ltd. A joint venture between the Hero Group and Honda Motor
Company was established in 1984 as the Hero Honda Motors Limited at
Dharuhera India. Munjal family and Honda group both own 26% stake in the
Company. In 2010, it was reported that Honda planned to sell its stake in the
venture to the Munjal family.

During the 1980s, the company introduced motorcycles that were popular in India
for their fuel economy and low cost. A popular advertising campaign based on the
slogan 'Fill it - Shut it - Forget it' that emphasised the motorcycle's fuel efficiency
helped the company grow at a double-digit pace since inception. The technology
in the bikes of Hero Honda for almost 26 years (1984–2010) has come from the
Japanese counterpart Honda.

Hero Honda has three manufacturing facilities based at Dharuhera, Gurgaon in

Haryana and at Haridwar in Uttarakhand. These plants together are capable of
churning out 3 million bikes per year. Hero Honda has a large sales and service
network with over 3,000 dealerships and service points across India. Hero Honda
has a customer loyalty program since 2000, called the Hero Honda Passport
Program.
Hero Honda Rebranding to Hero Motocorp

The year 2010 marked the end of one of the world’s most successful corporate
marriages – Hero Honda and a new beginning for The Munjals of the Hero Cycles
Ltd. Back in 1984, the two firms shared a common belief that India with its
burgeoning population, low per capita income and unorganized public transport
system, would be in need of frugal means of personal transportation. Hero with its
inherent knowledge of selling products in India was the champion in Sales &
Marketing and Honda was the undisputed leader in two wheeler technologies
worldwide. After 26 years of sharing technology to make the most economical and
fuel efficient motorcycles for the Indian consumers, Honda Motors decided to
move out of the joint venture. This divorce enables the Hero Group to export its
motorcycles to other nations which was not possible earlier and brings us to an
exciting birth of a new brand – Hero MotoCorp.

The world’s largest manufacturer of two-wheelers by volume sales for nine

consecutive years since 2001and one of The Forbes 200 Most Respected
Companies in the world – Hero Honda has come a long way. With a massive 5
million strong consumer base and more than 20 million two-wheelers on Indian
roads, Hero Honda truly became Desh Ki Dhadkan with DhakDhak image
touching the hearts and strings of everyone across the nation. Rebranding this big a
brand would be a mammoth task in order to move out of the mould of Hero Honda
and ride into newer and different horizons. The Hero Group roped in London-
based Wolff Olins -a global brand and innovation specialist, to work on its new
identity including the brand architecture, brand name, brand logo and brand
positioning with an underlying theme of Creation, Renewal and Re-energizing the
brand. The entire re-branding exercise would involve a gradual shrinkage of brand
Honda and place Brand ‘Hero’ on all its products by 2014.

The new logo shows the letter ‘H’ in capital with a clear white background along
with ‘Hero’ written beneath in Red. The black color in the logo stands for solidity
and premiumness while the Red gives a feeling of energy, passion, and confidence.
To represent ‘Hero’ in 3D, the logo even has a triangle, trapezoid and a
parallelogram in the first letter of its name. The sharp edges depict style,
engineering and innovation. The new logo is designed to relate to the youth and
their 'can do' spirit.
The company has rolled out a new anthem‘Hum Mein Hai HERO’ (There’s a
Winner in All of us), composed by A.R Rahman with the campaign launch on 15th
August to capture the maximum eyeballs and was received with a lot of excitement
and applause by the masses that could connect the HERO-ism of the brand with
their daily challenges and a true winning spirit. I agree with Mr. Pawan Munjal, the
CEO of Hero MotoCorp, who explains this campaign as a true sense of Indian
Catapult which signals that although its roots are very Indian, it is ready for global
expansion.

I like the way the Hero Group has re-positioned itself for the emerging Brand
India. But the real test begins for the Munjals who will now have to look at
building very crucial R&D facilities required to operate in a tough market like
India. As a consumer, I’ve always felt that the real Hero in the new-age Hero
Honda bikes was the Honda engineviz. CBZ, Hunk and Karizma. Hero MotoCorp
needs to make its consumers aware of the technology advancements and progress
they make in their motorcycles to maintain their leadership position in the market.
With players like Bajaj, TVS and Honda rolling out exciting models every year, we
just need to wait and watch if the new HERO becomes India Ki Nayi Dhadkan or
not.

The Brand Journey of Hero

The Transition to Responsible Corporate Restructuring:

As developing markets reform their systems of corporate Restructuring, they must

take into account several factors complicating the process. One nuance is the
dichotomy of corporate Restructuring and political Restructuring, exemplified by
state-owned enterprises. These publicly-owned businesses are run with certain
characteristics of the private sector model, but political influence is expected, and
often unconstructive. State-owned enterprises are usually structured to deliver a
product or service to society, a commitment that is illustrated by board conduct.
During privatization there is an intermediate step of corporatization that can
weaken a state-owned enterprise. The best way to prepare for the privatization
process is by implementing sound corporate Restructuring practices before the
process begins. In developed markets, privatized firms can survive far better than
in emerging markets, where privatized companies in distress will likely flounder.
Corporate Restructuring codes must also be adaptable to the business environment
where they work. For example, codes have been adapted to fit the dynamics of
family-owned firms so that in emerging economies, where family-owned firms are
likely to be in their first or second generation, families know best how to adapt
standards of Restructuring to accommodate the fact that all the firm’s actors are
related. In Africa, society tends to see firms as having a greater role within the
community than merely the production of profits for shareholders, creating tension
and sensitivity around the issue of corporate citizenship and leaving the
development of corporate Restructuring at a standstill.

Current Trends and Future Considerations:

While developed markets cultivate more sophisticated systems of Restructuring,

emerging market leaders focus merely on improving current systems. There is
concern that auditing firms (and their comprising mergers) and corporate collapses
in developed markets have negatively affected emerging markets. Debates over
U.S. and British systems of Restructuring also impact regulation design in
emerging markets. Lately, there has also been interest in moving back to state-
owned enterprises implementing corporate Restructuring, reprising the issue of
political Restructuring. Another consideration concerns interested investors – are
they more active at home or in emerging markets? And do they exhibit consistency
in their behavior in both locations? As institutions increasingly invest around the
world, cross-border voting issues become more important as leaders wait to see
which international regulatory systems will survive. Confidence and consistency in
implementing policies of corporate Restructuring should triumph at any level. The
public and private sectors must work together to ensure that policies are non-
negotiable, trustworthy, streamlined, and effective processes and that corporate
Restructuring creates a constructive environment for investment and growth.Birla
Committee recommendations in 2000, the Naresh Chandra may well be viewed as
a milestone in the evolution of corporate Restructuring practices in India. It is
similar in spirit and in scope to the Sarbanes-Oxley measures in the United States.
The requirements of Clause 49 were applied in the first instance to the companies
in the BSE 200 and S&P C&X NIFTY stock indices, and all newly listed
companies, on March 31, 2001. These rules were applied to companies with a paid
up capital of INR 100 million (≈ $2.5 million) or with a net worth of INR 250
million (≈ $6.3 million) at any time in the past five years on March 31, 2002, and
to other listed companies with a paid up capital of over INR 30 million (≈ $0.75
million) on March 31, 2003. The Narayana Murthy Committee worked on further
refining the rules, and Clause 49 was amended accordingly in 2004. The key
mandatory features of Clause 49 regulations deal with the following: (i)
composition of the board of directors; (ii) the composition and functioning of the
audit committee; (iii) Restructuring and disclosures regarding subsidiary
companies; (iv) disclosures by the company; (vi) CEO/CFO certification of
financial results; (vi) reporting on corporate Restructuring as part of the annual
report; and (vii) certification of compliance of a company with the provisions of
Clause 49. The composition and proper functioning of the board of directors
emerges as the key area of focus for Clause 49. It stipulates that non-executive
members should comprise at least half of a board of directors. It defines an
“independent” director and requires that independent directors comprise at least
half of a board of directors if the chairperson is an executive director and at least a
third if the chairperson is a non-executive director. It also lays down rules
regarding compensation of board members, sets caps on committee memberships
and chairmanships, lays down the minimum number and frequency of board
meetings, and mandates certain disclosures for board members. Clause 49 pays
special attention to the composition and functioning of the audit committee,
requiring at least three members on it, with an independent chair and with two-
thirds made up of independent directors--and having at least one “financially
literate” person serving. The Clause spells out the role and powers of the audit
committee and stipulates minimum number and frequency of and the quorum at the
committee meetings. With regard to “material” non-listed subsidiary companies
(those with turnover/net worth exceeding 20% of a holding company’s
turnover/net worth), Clause 49 stipulates that at least one independent director of
the holding company must serve on the board of the subsidiary. The audit
committee of the holding company should review the subsidiary’s financial
statements, particularly its investment plans. The minutes of the subsidiary’s board
meetings should be presented at the board meeting of the holding company, and
the board members of the latter should be made aware of all “significant” (likely to
exceed in value 10% of total revenues/expenses/assets/liabilities of the subsidiary)
transactions entered into by the subsidiary. The areas where Clause 49 stipulates
specific corporate disclosures are: (i) related party transactions; (ii) accounting
treatment; (iii) risk management procedures; (iv) proceeds from various kinds of
share issues; (v) remuneration of directors; (vi) a Management Discussion and
Analysis section in the annual report discussing general business conditions and
outlook; and (vii) background and committee memberships of new directors as
well as presentations to analysts. In addition, a board committee with a non-
executive chair is required to address shareholder/investor grievances. Finally, it is
mandated that the process of share transfer (that had been a long-standing problem
in India) be expedited by delegating authority to an officer or committee or to the
registrar and share transfer agents. The CEO and CFO or their equivalents need to
sign off on the company’s financial statements and disclosures and accept
responsibility for establishing and maintaining effective internal control systems.
The company is also required to provide a separate section of corporate
Restructuring in its annual report, with a detailed compliance report on corporate
Restructuring. It is also required to submit a quarterly compliance report to the
stock exchange where it is listed. Finally, it needs to get its compliance with the
mandatory specifications of Clause 49 certified by auditors or by practicing
company secretaries. In addition to these mandatory requirements, Clause 49 also
mentions non-mandatory requirements concerning the facilities for a non-executive
chairman, the remuneration committee, half-yearly reporting of financial
performance to shareholders, moving towards unqualified financial statements,
training and performance evaluation of board members, and perhaps most notably
a clear “whistle blower” policy. By and large, the provisions of Clause 49 closely
mirror those of the Sarbanes-Oxley measures in the United States. In some areas,
like certification compliance, the Indian requirements are even stricter. There are,
however, areas of uniqueness as well. The distinction drawn between boards
headed by executive and non-executive chairmen and the lower required share of
independent directors is special to India—and is also somewhat intriguing, given
the prevalence of family-run business groups. The market reaction to the corporate
Restructuring improvements sought by Clause 49 seems to have been quite
positive, somewhat in contrast to the mixed response to Sarbanes-Oxley’s
adoption. They use an event-study approach to measure the stock price impact of
the adoption of Clause 49 by Indian firms.18 Focusing on the May 7, 1999
announcement by SEBI about the formation of the Kumar Mangalam Birla
Committee, when an earlier application to large companies was expected, they
report that large firms that adopted these measures first witnessed a 4% (7%)
positive price-jump in a two-day (five-day) event-window beginning with the
announcement day compared to
PRODUCTS LINE OF HERO MOTOCORP

 KARIZMA ZMR

 KARIZMA

 XTREME

 HUNK

 IMPULSE

 ACHIEVER

 IGNITOR

 GLAMOUR PROGRAMMED FI

 GLAMOUR

 SUPER SPLENDOR

 MAESTRO

 PLEASURE

 PASSION XPRO

 PASSION PRO

 PASSION PRO TR

 SPLENDOR ISMART

 SPLENDOR PRO CLASSIC

 SPLENDOR PRO

 SPLENDOR+
 HF DELUXE ECO

 HF DELUXE

Vision, Mission, Goals, Objectives and values of Hero group

The Vision
"We, at the Hero Group are continuously striving for synergy between technology,
systems and human resources to provide products and services that meet the
quality, performance, and price aspirations of the customers. While doing so, we
maintain the highest standards of ethics and societal responsibilities, constantly
innovate products and processes, and develop teams that keep the momentum
going to take the group to excellence in everything we do."

The Mission Statement

"It’s our mission to strive for synergy between technology, systems and human
resources, to produce products and services that meet the quality, performance and
price aspirations of our customers. While doing so, we maintain the highest
standards of ethics and societal responsibilities. "

This mission is what drives us to new heights in excellence and helps us forge a
unique and mutually beneficial relationship with all our stakeholders. We are
committed to move ahead resolutely on this path, shown to us by visionaries like
Mr. Satyanand Munjal, Mr. Om Prakash Munjal, the late Mr. Dayanand Munjal
and late Mr. Raman Kant Munjal. Mr Brijmohan Lall Munjal, Chairman & MD -
THE HERO GROUP.
Goals & Objectives
To provide excellent transportation to the common man at easily affordable prices
and to provide total satisfaction in all its spheres of activity." The group philosophy
clearly states what the group objectives are and stresses the focus on – customers,
providing reliable and affordable mobility for the masses and other stakeholders
like employees, suppliers, distributors, society and environment at large.

Apart from being customer-centric, the Hero Group provides its employees with a
fine quality of life and its business associates (suppliers & distributors) with a total
sense of belonging, thus strengthening the bond that is already deep-rooted.

Values
 Respect for Human Beings.
 Is a responsive organization?
 Is a boundary less organization?
 Is striving for excellence.
 Provide fearless, enjoyable working environment.
 Is self-reliant.
 Providing learning environment.
 Is a caring organization?
 Enables relationship buildings.
 Prompts transparency & trust.
 Is creativity promoting.
 Is performance oriented?
Product: -

The main strategy of this company I product is to provide a stylish, durable bikes
which can easily fit to Indian peoples and easily can able to run in particular Indian
road.

Price: -

Hero Moto corp is a company that provides the new technology product in Indian
market in very less price. There are many products like splendor, passion that it’s
were very less comparing to that segments bikes in market. This company bits its
competitor with related to price.

Place: -

Hero Moto corp’s service centers and showrooms are available in all parts of the
any city so that the consumers as can easily go to nearest service center and
showrooms. Due to this strategy the sales of hero bikes are also increase.

Promotion:-

The promotion of Hero Moto corp is very unique in past when the Hero and Honda
companies we partners. The use the sentence likes “Hero desh ki dhadkan”. The
company also has big names in brand promoters.

Strategy

Hero MotoCorp's key strategies are to build a robust product portfolio across
categories, explore growth opportunities globally, continuously improve its
operational efficiency, aggressively expand its reach to customers, continue to
invest in brand building activities and ensure customer and shareholder delight.

Manufacturing

Hero MotoCorp two wheelers are manufactured across three globally benchmarked

manufacturing facilities. Two of these are based at Gurgaon and Dharuhera which
are located in the state of Haryana in northern India. The third and the latest
manufacturing plant is based at Haridwar, in the hill state of Uttrakhand.

Technology

In the 1980's the Company pioneered the introduction of fuel-efficient,

environment friendly four-stroke motorcycles in the country. It became the first
company to launch the Fuel Injection (FI) technology in Indian motorcycles, with
the launch of theGlamour FI in June 2006. 

Its plants use world class equipment and processes and have become a benchmark
in leanness and productivity.

Hero MotoCorp, in its endeavor to remain a pioneer in technology, will continue to

innovate and develop cutting edge products and processes

Products

Hero MotoCorp offers wide range of two wheeler products that

include motorcycles and scooters, and has set the industry standards across all the
market segments. 
Distribution

The Company's growth in the two wheeler market in India is the result of an

intrinsic ability to increase reach in new geographies and growth markets. Hero
MotoCorp's extensive sales and service network now spans over to 5000 customer
touch points. These comprise a mix of authorized dealerships, service & spare
parts outlets, and dealer-appointed outlets across the country.

Brand

The new Hero is rising and is poised to shine on the global arena. Company's new
identity "Hero MotoCorp Ltd." is truly reflective of its vision to strengthen focus
on mobility and technology and creating global footprint. Building and promoting
new brand identity will be central to all its initiatives, utilizing every opportunity
and leveraging its strong presence across sports, entertainment and ground- level
activation. 

Performance

Total unit sales of 54,02,444 two-wheelers, growth of 17.44 per cent

Total net operating income of INR 19401.15 Crores, growth of 22.32 per cent
Net profit after tax at INR 1927.90 Crores 
Total dividend of 5250% or INR 105 per share including Interin Dividend of INR
70 per share on face value of each share of INR 2 each
EBIDTA margin for the year 13.49 per cent
EPS of INR 96.54

Milestones

1983
Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed
Shareholders Agreement signed

1984

Hero Honda Motors Ltd. incorporated

1985

First motorcycle "CD 100" rolled out

1987

100,000th motorcycle produced

1989

New motorcycle model - "Sleek" introduced

1991

New motorcycle model - "CD 100 SS" introduced

500,000th motorcycle produced

1992

Raman Munjal Vidya Mandir inaugurated - A School in the memory of founder

Managing Director, Mr. Raman Kant Munjal

1994

New motorcycle model - "Splendor" introduced 

1,000,000th motorcycle produced

1997
New motorcycle model - "Street" introduced 
Hero Honda's 2nd manufacturing plant at Gurgaon inaugurated

1998

2,000,000th motorcycle produced

1999

New motorcycle model - "CBZ" introduced 

Environment Management System of Dharuhera Plant certified with ISO-14001 by
DNV Holland
Raman Munjal Memorial Hospital inaugurated - A Hospital in the memory of
founder Managing Director, Mr. Raman Kant Munjal

2000

4,000,000th motorcycle produced 

Environment Management System of Gurgaon Plant certified ISO-14001 by DNV
Holland 
Splendor declared 'World No. 1' - largest selling single two-wheeler model 
"Hero Honda Passport Programme" - CRM Programme launched

2001

New motorcycle model - "Passion" introduced

One million production in one single year
New motorcycle model - "Joy" introduced
5,000,000th motorcycle produced
2002

New motorcycle model - "Dawn" introduced

New motorcycle model - "Ambition" introduced
Appointed Virender Sehwag, Mohammad Kaif, Yuvraj Singh, Harbhajan Singh
and Zaheer Khan as Brand Ambassadors

2003

Becomes the first Indian Company to cross the cumulative 7 million sales mark
Splendor has emerged as the World's largest selling model for the third calendar
year in a row (2000, 2001, 2002)
New motorcycle model - "CD Dawn" introduced
New motorcycle model - "Splendor +" introduced
New motorcycle model - "Passion Plus" introduced
New motorcycle model - "Karizma" introduced

2004

New motorcycle model - "Ambition 135" introduced

Hero Honda became the World No. 1 Company for the third consecutive year.
Crossed sales of over 2 million units in a single year, a global record.
Splendor - World's largest selling motorcycle crossed the 5 million mark
New motorcycle model - "CBZ*" introduced
Joint Technical Agreement renewed 
Total sales crossed a record of 10 million motorcycles

2005
Hero Honda is the World No. 1 for the 4th year in a row
New motorcycle model - "Super Splendor" introduced
New motorcycle model - "CD Deluxe" introduced
New motorcycle model - "Glamour" introduced
New motorcycle model - "Achiever" introduced
First Scooter model from Hero Honda - "Pleasure" introduced

2006

Hero Honda is the World No. 1 for the 5th year in a row
15 million production milestone achieved

2007

Hero Honda is the World No. 1 for the 6th year in a row
New 'Splendor NXG' launched
New 'CD Deluxe' launched
New 'Passion Plus' launched
New motorcycle model 'Hunk' launched
20 million production milestone achieved

2008

Hero Honda Haridwar Plant inauguration

New 'Pleasure' launched
Splendor NXG lauched with power start feature
New motorcycle model 'Passion Pro' launched
New 'CBZ Xtreme' launched
25 million production milestone achieved
CD Deluxe lauched with power start feature
New 'Glamour' launched
New 'Glamour Fi' launched

2009

Hero Honda GoodLife Program launched Hunk' (Limited Edition) launched

Splendor completed 11 million production landmark
New motorcycle model 'Karizma - ZMR' launched 
Silver jubilee celebrations

2010

New model Splendor Pro launched

Launch of new Super Splendor and New Hunk

2011

New licensing arrangement signed between Hero and Honda (Hero Honda is
renamed as Hero)
Launch of new refreshed versions of Glamour, Glamour Fi, CBZ Xtreme, Karizma
Crosses the landmark figure of 5 million cumulative sales in a single year .

Competition Information

While a slowing in sales volumes has taken the shine off Hero MotoCorp’s (Hero)
stock, down four per cent in April against a one per cent fall in the Sensex, the
expected rise in competitive pressures over the coming months and slowing
industry volumes have raised concerns over its medium- to long-term outlook.
A drop in crop realisations and lower two-wheeler sales has translated to a mere
2.4 per cent year-on-year growth for Hero in the month of March. Given the high
base, it is likely to achieve eight to 12 per cent growth in volumes , estimate
analysts, compared to 15.4 per cent.

The key threat for Hero is the launch of Honda Motorcycle and Scooter India’s
(Honda) Dream Yuga, which Citigroup Global Markets analysts Jamshed
Dadabhoy and Arvind Sharma believe has the potential to destabilise market share
in the executive segment.

Further, a slowing in the domestic segment will hurt Hero more than Bajaj Auto, as
the latter gets about 36 per cent of its volumes from exports. The areas of
opportunity for Hero will be exports, the fast growing scooter market and the
premium motorcycle segment.

At Rs 1,973, the stock is trading at 15 times its estimates. Given competitive

pressures at home and untried export markets, most analysts have a sell/hold
rating, with price targets at Rs 1,650-1,950.

While the company has lined new products such as the 110cc Passion X Pro bike
and 125cc motorcycle Ignitor for launch in , it is likely to face increasing
competition in the executive segment from Honda and TVS. While Honda will pull
out all the stops to market its 110cc Dream Yuga, TVS is also expected to re-
launch its popular bike, Victor, in a new avatar. Bajaj, too, is expected to launch a
bike in this segment.

The Street will be keenly monitoring the battle between Honda and Hero, given
that the executive segment accounts for about two-thirds of overall motorcycle
sales, and that Honda was until recently Hero’s partner (for 26 years), with equally
good understanding of the Indian market.
Hero currently dominates the executive segment, with 74 per cent market share.
Due to an estimated slowing in the sector, Citi has cut volume forecasts for Hero
and anticipates slight erosion in its market share, particularly in the executive
segment. The battle in the segment, however, will be played out over a long term,
with Hero unlikely to yield much in the short term, believe experts.

Says the head of research at a leading brokerage firm, “Though Hero

MotoCorp will shed some market share, the gains for competition in the short term
will be marginal, as Hero still has enough brand pull and distribution reach.” As a
comparison, while Hero has a 4,000-dealer network, Honda’s is just a fourth of
this. This will be difficult to replicate any time soon.

If the Honda bike is successful, it could generate sales volumes of 500,000-

750,000 units annually.

SWOT Analysis of the Organization

Strength

1 Ability to understand customer’s needs and wants.

2 Recognized and established brand name.
3 Effective advertising capability.
4 It’s after sales service
5 Maintenance cost is low
6 Resale value is high
7 Company’s name is synonymous with fuel efficient bikes and
connectivity.
8 Huge brand equity and one of the biggest players in the two
 wheelers Indian market
9 Huge variety of products in every segment
10 Excellent distribution, over 5000 dealerships and service centers
11 Good advertising and excellent rebranding from Hero Honda to
Hero Moto Corp

Weakness

1 Market share in premium segment is low.

2 People are concerned after brand migration regarding technology.
3 Spare parts availability issues.

Opportunities

1 Global expansion in countries of Africa and South America.

2 Expansion of target market (include women, male scooter and
trans road bike).
3 Scooter market is increasing thus they can be India’s leader in
scooter market.
4 Financial help easily available to customers.
 5 Relatively low rate of interest and the discount of prices offered
by the dealers and manufacturers lead to the increasing demand
for two wheeler vehicles.
6 Large market for the high performance segment which is
increasing with the upliftment of the lifestyle of people.
7 Purchasing power has increased of customers.
8 Strategic alliance with EBR and AVL for technology transfer.

Threat

1 Honda motorcycles and scooters India has become aggressive and

launching products for mass market in 100cc eg. Dream yuga
2 Bajaj motors is a strong competition in premium segment
3 FDI announced in automobiles is 100%
4 Petrol prices are increasing thus sale of premium segment bikes
may decrease
5 Aluminum and steel prices will increase.
6 Strong competition from Indian as well as international brands
7 Dependence on government policies and rising fuel prices

To understand deeper on the available segments (Motorcycles) and the respective

offerings –

1) Economy Segment -
2) Executive Segment - 3) Premium Segment

-
Even though the number of offerings in the premium segment seems high,
maximum volume churners still remain the products in executive & economy
segments. With an aggressive pricing for Pulsar 200 NS & Duke 200; Bajaj plans
to gain strategically in terms of volumes over the period of time. Bajaj's dominance
in Executive segment is the the primary reason for its high operating margin and
thus emerge as one of the most profitable 2-wheeler OEMs.

Profile of the Indian 2-wheeler companies -

HeroMotoCorp is now world’s largest manufacturer of two-wheelers. The

company has benefited from the demand shift to motorcycles, as it focuses solely
on this product segment (although has a product called Pleasure in Scooter
segment). With fuel efficiency and riding comfort as the main selling points, HMC
has been able to address a wide market and post robust sales growth even after its
separation from the Japanese major Honda.

Bajaj Auto is well positioned in the motorcycle segment as the 2nd largest player
with around 30% market share. Over the last decade, the company has successfully
changed its image from a scooter manufacturer to a two-wheeler manufacturer. Its
product range encompasses scooterettes, scooters and motorcycles. Though the
company is miles behind Hero in terms of sales volumes, it is now India’s most
profitable two-wheeler manufacturer.

TVS Motor Company Limited is the third largest two-wheeler manufacturer in

India. It is the flagship company of the parent TVS Group employing over 40,000
people with an estimated 15 million customers. It manufactures
motorcycles, scooters, mopeds and auto rickshaws. TVS Motor is credited with
many innovations in the Indian automobile industry, notable among them being the
introduction of India's first two-seater moped, the TVS 50cc. The company became
the leader in its category of sub 100 cc mopeds, having sold 7 million units. It also
introduced the TVS Scooty, which is India's second largest brand in the scooterette
segment. The TVS Jive launched in November 2009 became India's first clutch-
free motorbike aimed at a stress-free rider experience. But the growth in F12 was
dismal and seems to lose ground against competition.

Honda Motorcycle and Scooter India, Private Limited (HMSI) is the wholly
owned Indian subsidiary of Honda Motor Company, Limited, Japan. Founded in
1999, it was the fourth Honda automotive venture in India, after Hero
Honda, Kinetic Honda Motor Ltd and Honda Siel Cars India. The entry of Honda
into the Indian market as HMSI began with the launch of the Honda Activa, a 100
cc scooter. A slightly modified trendier version of the Activa was soon launched,
as the Honda Dio. Honda Eterno was launched thereafter to add to the portfolio of
HMSI's scooters. The Honda Unicorn was the first motorcycle released by HMSI.
The Honda Shine has since been released.

India Yamaha Motor, IYM (officially India Yamaha Motor Private Limited) is

an Indian subsidiary of Yamaha Motor Company, formed in 2008 as a joint
venture with Mitsui. It produces a range of motorcycles for domestic consumption
and export. Yamaha motors in India have been present in the market of low range
economy bikes for a long time. All bikes in their store were designed for mass
market, but with the introduction of FZ-16, FZ-S, Fazer, and R15 they have made
an impression on the mid range bike market in India.

Suzuki Motorcycle India Pvt. Ltd. is a subsidiary of one of the world's leading

two-wheeler manufacturer Suzuki Motor Corporation. The company’s products
include motorcycles and scooters. The company was incorporated in 1997 in
India. 

Mahindra Two Wheelers Limited (MTWL) is backed by the Mahindra

Engineering Services (MES), the Italy-based design house, engines engineering
and Taiwan’s Sanyang Industry Company Limited (SYM). In 2011 Mahindra
became the first Indian two-wheeler manufacturer to enter the Moto Grand Prix
Championships. This two wheeler maker formally entered the two wheeler
industry by acquiring with the successful acquisition of business assets of Kinetic
Motor Company Limited.

CHAPTER –V

FINDING, SUGGESTION
AND
CONCLUSION
 CHAPTER 5

FINDINGS AND OBSERVATIONS

After mega corporate restructuring of old, trusted and dominant brands, there is a
fear whether the new corporate entity and the new brands will be able to receive
the same response as the long trusted original entity had. On the other hand,
consumers or clients are also under immense doubt whether the new corporate
entity or its brands are also going to be as trustworthy as the original brand was.
Hence, it becomes increasingly important that a brand repositioning and a very
strong communication of its new position takes place.

Hero Motocorp is one such classic example in which after divorce with Japanese
partner, Honda which was providing the technological support, there were
concerns all over and hence the company had to do the mega, brand repositioning
exercise.

The key point in the case is how sales Positioning and the loyalty program in
general have persuaded customers to use the credit card as a daily payment
method and that way contributed to long-term sales. Peattie & Peattie (1993) state
that if consumers are satisfied with the brand that is being promoted, it is more
likely that they will also buy it later after the Positioning is over. Thus, if
customers are satisfied, it is likely that longterm sales are also influenced
positively.
Key observations

 Passion Pro, Splendor Plus, are the two models that Hero MotoCorp selling
a big number

 The TV promotions are more influence the customer behavior of two

wheeler sector.

 The purchase desiccations of consumers are influence by friends and family.

 Blue, Red, Black color bike with 150 cc to 200cc is fast moving.

 Most of the despondences are agree that the bikes are delivering proper time.

 The service provide by Hero MotoCorp is satisfied by more than 70% of

customers.

 Brand name of Hero is still good in market after split with Honda

 Quality, price, Brand image, Fuel efficiency is getting equal importance in

satisfaction
 CONCLUSION

Customer satisfaction is a marketing tool and a definite value added benefit. It is

often perceived by customers as important as the primary product or service your
organization offers.

For making a better relationship with customer they always use genuine parts in
their product. And after selling they have the services and maintenances. Their
constant endeavor is to support the company's mandate of providing highest level
of customer satisfaction by taking good care of customer’s two-wheeler service
and maintenance through their vast network of more than 2100 committed dealers
and service outlets spread across the country.

Apart from that hero MotoCorp Ltd focused on cleanliness and other aesthetics of
the service stations and add such air conditioned waiting area, internet surfing,
coffee shops etc to enhance the in house experience of the customers at those
“customer touch point”. To ensure that millions of customers in the rural area are
not left waiting for adequate service as it is impossible for the company to
introduce service station at every nook and corner of the country, mobile service
stations are regularly arranged with prior intimation to public about the rout that
the mobile workshop would take when passing through that region so that
customers can come and get their two wheelers serviced. All these activities are
aimed to increase the customer loyalty and thus retaining customers.
 RECOMMENDATION

 From the findings we conclude that a customers while purchasing a bike,

customers takes into consideration mainly fuel efficiency, good looks, low
maintenance cost and reliability.

 The main competitors of Hero are Bajaj Auto, Yamaha, TVS, Suzuki.

 The consumer preference basically depends upon wider network and better
services.

 Customers are influenced more to buy a product by advertisements rather than

dealer friend’s or family recommendations.

 Hero want to develop more promotion for there some models like sports bike
and gear less scooter
 Hero bikes can concentrate to increase their export market
 Hero MotoCorp Ltd should try to give more advertisements in news paper,
bill boards in that area to enable easy recall of the people for Hero MotoCorp Ltd.
 Hero Motors can also increase models attracting the Indian youth.