Marketing Management

Product: Hero Motocorp Splendor

Maaniya Sachdeva (Roll. No. 16A)

Manik Singh (Roll No. 17A)
Nandisha Ahuja (Roll No. 19A)
Sidhant Gupta (Roll No. 32A)
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Content

Two-Wheeler Market: Overview 2

Company Profile 5

Product Profile 7

SWOT Analysis 10

Marketing Mix – 4Ps 10

Competitor Analysis 14

STP – Segmentation, Targeting & Positioning 16

Product Level 19

Line Extension 21

Brand Extension 21

Product Life Cycle 22

Brand Strategy 24

New Product Development Strategy 27

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Two-Wheeler Market: Overview
India is the world's largest two-wheeler manufacturer. India's two-wheeler industry
accounts for 7% of the country's manufacturing GDP. In addition, it contributes 2% of
GST receipts.
The popularity of two-wheelers can be attributed to a number of factors unique to
India major being the low per capita income in many parts of India. There are many
other factors which are affecting the sale of two wheelers.

Factors leading to growth of two-wheeler market in India

Low cost of ownership Poor Public Transportation

Economic

Economic
Factors

Factors

Non-
Increase in Purchasing Power Easy manoeuvrability

Increase in Fuel Prices Improving road infrastructure

The two-wheeler market is growing at a rapid pace and is a success story in itself.
The increase in purchasing power of both urban and semi-urban customers, as well
as the low cost of ownership of two-wheelers, have been the segment's main growth
factors.
Some other factors driving the demand of two wheelers in India include its ease of
manoeuvring through congested roads, lower carbon emissions, higher fuel
efficiency, and providing an economical mode of transportation in comparison to
three or four wheeled vehicles. Furthermore, rising urbanization, improving road
infrastructure, and increasing number of women consumers are also catalysing the
demand of two wheelers in India.
Two-Wheeler Market Segmentation: The two-wheeler market in India is
segmented on the basis of scooters, motorcycles, and mopeds. The motorcycle
segment occupies two-third market share of the two-wheeler market in India, and is
followed by the scooters and mopeds segments. The market share of the
motorcycles segment decreased marginally by 1% year-on-year during the CY 2018-
CY 2019 period, while that of the scooters segment increased by 1% during the
same period.

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History of Two-Wheeler Market in India
The 2-Wheeler Industry in India entered the manufacturing course in the early 1950s
when Automobile Products of India (API) started manufacturing scooters in India.
Before that, only Bajaj auto was trading in imported Vespa Scooters starting from
1948.
Until 1958, API and Enfield were the only producers of two-wheelers in India.
However, Bajaj signed a technical collaboration in 1960 with Piaggio of Italy to
produce Bajaj Scooters. However, in 1971, the collaboration came to an end.
Year Brands in Indian Market

1948

1950s

1960s

1970s

1980s

Enfield, Ideal Jawa, and Escorts were the first three manufacturers in the motorbike
sector. The market for two-wheeler motorcycles opened up in the 1980s, and it took
the world by storm. It resulted in a market expansion, with TVS Suzuki and Hero

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Honda holding the top two positions in the Indian motorbikes industry. Since then,
the Indian two-wheeler industry has had phenomenal growth year after year for the
past four decades. Moving forward from starting in the 1950s to the current time,
India is the largest market for the two-wheeler segment right now.
Two-Wheeler Market Scenario: Current Levels and Forecast
Current Market Scenario: In FY 2020-21, Indian two-wheeler production down by
12.8% to 18.4 million units against 21 million units in FY 2019-20. Domestic sales
plunged by 13.2% to 15.1 million units against 17.4 million units in the last year.
Exports fall by 6.9% to 3.3 million units against 3.5 million units in FY 2019-20.
In FY 2020-21, Indian
two-wheeler industry
witnessed one of the
sharpest contradictions
in demand. One of the
primary reasons of
downfall in demand was
the impact of Covid-19.
Economic stress, high
fuel prices, increase in
two-wheeler price due
to new regulations,
increase in raw material
costs and critical
component shortage
due to supply chain
issues, also contributed in reduced demand for two-wheelers. However, a good
monsoon helped the rural market to show strong growth. Demand for personal
mobility was also increased due to spread of coronavirus. These factors helped in
revival of two-wheeler sales in the last year.
Forecast of Two-wheeler market in India
Many Analysts are of the opinion that Domestic two-wheeler will grow 6-8% over the
next five years as the economy comes out of the covid-19 induced downturn.
Since the unlocking of economy began in May, demand for two-wheelers especially,
that of entry level motorcycles, have risen as consumers preferred personal mobility.
The trend was more evident in rural centres despite limited impact of covid-19 in
such areas. Looking at the future growth of two-wheeler industry, it can be said that
there are a lot of opportunities for two-wheeler manufacturers in the Indian market.

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Major Players in Indian Two-Wheeler Market

Market Share of Two Wheeler OEMs in Indian Market FY2021

Piaggio; 0.37%
Suzuki Motorcycle; 3.45% Kawasaki; 0.01%
India Yamaha Motor; 3.47%
Royal Enfield; 3.79%

Bajaj Auto; 11.97% Hero Motocorp; 37.04%

TVS; 14.31%

Honda Motorcyles & Scooters; 25.58%

Major OEMs involved in the manufacturing of Two-wheelers in the Indian Market are
Hero Motocorp with the highest market share of 37.04%, followed by Honda
Motorcycles with 25.6% market share. These two companies account for almost
52% of the Indian two-wheeler market. Other major two-wheeler OEMs are TVS
(14.3%), Bajaj Auto (11.97%), Royal Enfield (3.79%), Yamaha (3.47%), Suzuki
Motorcycle (3.45%) and many others.
Currently, the new growth point for the industry is electric scooters and motorcycles.
Many of the leading manufacturers have already started the production of electric
vehicles. TVS made its entry into the EV segment last year with iQute electric
scooter and Bajaj with Chetak Electric Scooter in 2019. The electric 2W market in
India is gaining momentum, providing OEMs huge growth opportunity and therefore
all the major OEMs will enter into this market soon.

Company Profile: Hero MotoCorp

“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

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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. 5 Hero Honda has three manufacturing facilities based
at Dharuhera, Gurgaon in Haryana and at Hardwar 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
Termination of Hero and Honda Joint Venture:
In December 2010, the Board of Directors of the
Hero Honda Group have decided to terminate the
joint venture between Hero Group of India and
Honda of Japan in a phased manner. The Hero
Group of India would buy out the 26% stake of the
Honda in JV Hero Honda. Under the joint venture
Hero Group could not export to international
markets (except Sri Lanka) and the termination would mean that Hero Group can
now export. Since the beginning, the Hero Group relied on their Japanese partner
Honda for the technology in their bikes. So, there are concerns that the Hero Group
might not be able to sustain the performance of the Joint Venture alone.
Hero MotoCorp as a Brand: The new brand identity and logo, Hero MotoCorp, was
developed by the London firm Wolff Olins. The logo was revealed on 9 August 2011
in London, the day before the third test match between England and India at Lord's
Cricket Ground. Hero MotoCorp can now export to Latin America, Africa and West
Asia. Hero is free to use any vendors for its components instead of just Honda-
approved vendors.

Brand Name Hero Motocorp Limited

Brand Marks

Trademarks

The company's new name, "Hero MotoCorp Ltd.," accurately reflects its mission to
increase its focus on mobility and technology while expanding its global footprint. All
of its initiatives focus on developing and promoting a new brand identity, taking

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advantage of every opportunity and leveraging its strong presence across sports,
entertainment, and ground-level engagement.

About Hero Splendor – The National Motorcycle of India

There was a time in the Indian automobile industry when motorcycles were reserved
for those with a lot of cash. For commuting, many used to favour scooters. Then the
Hero Honda arrived with its Splendor, and everything changed. People used to leave
their heavy scooters at home and go for a bike ride instead. Till date, Hero Splendor
is a motorcycle that a middle-class man can afford.
1994 – India gets the Hero Honda Splendor
We all can recall Hero Motocorp's previous relationship with Honda, the Japanese
automaker. The Splendor was born out of this partnership. However, it was not the
manufacturer's first bike. It
was a follow-up to Hero
Honda's CD100. The
Splendor shared the same
engine as the CD100, and the
design was mostly
unchanged. However, this
bike convinced Indian
customers to move from
scooters to motorcycles. This
bike's success can be
attributed to its low ownership costs and good fuel efficiency. It was powered by a
97.2cc air-cooled 4-stroke engine that produced a respectable 7.44hp and 7.95Nm
of peak torque. It had a fuel economy of more than 50 kilometres per gallon. People
used to say at the time that a single refuelling of the tank might keep it going for
weeks. This model was produced for around ten years, and its successful run is still
regarded as one of the best in the motorcycle industry.

2004 – Hero Honda Splendor Plus

The Splendor received an upgrade ten years after its debut. It was known as
Splendor Plus and came
with a tagline "Lage Aisa
Family Jaisa" (Which
means it feels as if
Splendor Plus is a part
of the family). The new
Splendor Plus was
equipped with a multi-
reflector headlight, a

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new taillight, and new aesthetics. The spoke wheels were changed as well. It now
had alloys.

2005 –Super Splendor

In 2005, a new, more powerful Splendor was released. It was powered by a 125cc
Advanced Swirl Flow Induction System (ASFS) engine that produced 9 horsepower.
This new swirl tech was responsible for the increased fuel efficiency of an already
very fuel-efficient motorcycle.

The engine was not the only improvement made to the bike. The Super Splendor
was a lightweight two-wheeler featuring a digital speedometer, alloy wheels, front
disc brakes, graphic upgrade, and extra chrome on the engine and exhaust system.

2011 – Hero Honda Splendor Pro

This Splendor was intended to be the final partnership between Hero and Honda.
The joint venture was dissolved in 2010, but Honda was required to provide
technological support to Hero until 2014. The Splendor Pro was introduced at this
time. There were no alterations under the hood, or, in this case, under the petrol
tank! One of this bike's
selling points was its ability
to self-start. Hero had to
improve its Splendor series
to keep on track as all of
their key competitors
equipped their bikes with
the self-start feature. A few
graphic enhancements and

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alloy wheels were also included. The Hero Honda Splendor Pro is regarded as one
of the most stable 100cc motorcycles ever produced.

2014 – Hero is on its own!

The 25 years old JV was dissolved. The technical support was ended. What was
Hero going to do? It was going to Improvise, Adapt and Overcome.
The Splendor was given a
makeover. The
groundbreaking i-Smart
technology was also
included in the all-new Hero
Splendor. The Splendor was
able to achieve a fuel
economy of above 100kmph
because to this technology!
Yes, it is correct. When the
engine became idle, the tech
was that it would turn off and start again as soon as the clutch was squeezed. And
that's how you silence those who said, 'Hero won't exist without Honda.' It was
powered by a 97.2cc air-cooled engine that produced 7.2 horsepower and over 8Nm
of torque..
BS6 Hero Splendor Plus
Hero Motocorp has been prominently making sure to upgrade their bikes with time.
Splendor, as a legacy, was intended to receive the BS6 upgrade as well. And it was
given one. The Hero Splendor Plus is BS6-compliant and has Hero's sophisticated
PFi xSens Engine technology as well as the tagline "Bharosa Hai, Samjhauta Nahi."
The 97.2cc air-cooled engine's power has increased from 7.2 to 7.9 horsepower. The
torque produced is about identical.

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SWOT Analysis

STRENGTHS WEAKNESSES
- Brand Recognition - Awards & - Intense Competition
- Trust of customers Recognitions - No/Lack of Innovation
- Customer satisfaction - Gender Diversification
- Value for money
- Long lasting products - Service quality declined
- Large Product variety - Advertising Strategy - Similar product types
- Vast domestic Network - Excellent Distribution
- Supply-chain network

OPPORTUNITIES THREAT
- Top growing industry - Strong competition
- Entry to Prem. Segment - Govt. policies
- Electric Vehicles - Public transports
- Joint Ventures - Other Companies such as;
• Yamaha
• Bajaj
• TVS Motors
• Suzuki

Marketing Mix
Marketing mix can be defined as a combination of factors or tactics which can be
governed by a company to influence customers to purchase its goods & services.
Extensively, it is also known as 4Ps of marketing;
i. Product
ii. Price

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 iii. Place
iv. Promotion
The above four factors are considered as the key factors to a product’s marketing
strategy. So, the basic idea behind this is to put a right product at the right place, at
the right time and at a correct price segment.

1. Product
Product Hero Honda Splendor with a contoured low-slung seat, carefully designed
handlebar, and a robust double-cradle tubular frame, Honda Splendor bikes are
developed with customer comfort in mind. The suspension system is so good that
the customer has no idea what is going on between the tyres and the uneven road.
In the span of 27-years, Hero has made many changes in Splendor model in terms
of wheel type, ignition type, design & color, engine versions etc. At current stage
Hero Splendor has 3 variants in market, all with BS6 compliant engines.

Engine
Variants BS6 Engine Self-Start Appearance
Displacement

Splendor+ Yes 97.2 cc Yes

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 Splendor iSmart Yes 113.2 cc Yes (with I3s)

Super Splendor Yes 124.7 cc Yes

2. Price
The price set for Hero Splendor is moderate according to customer target, i.e. not
much low as entry level vehicles or not much high as premium segment vehicles.
The most important aspect affecting revenue is determining price levels and pricing
policies. Pricing levels at Hero are influenced by factors such as demand for the
good, market price, and consumer reactivity to price changes. Other factors such as
a convenient location or more personalized service allow Hero to charge a
competitive price
The three different variants are having different prices. Below listed are the prices for
all the variants. Usually, the price range varies from ₹77,000 to ₹95,000.
Ex-showroom On Road Price
Variants Sub-Variants
Price (Delhi)
Kick with Alloy
₹ 64,850 ₹ 77,766
Wheel
Self with Alloy
₹ 67,160 ₹ 81,944
Wheel
Splendor +
Self with Alloy
₹ 68,360 ₹ 83,288
Wheel and i3s
Black and Accent ₹ 68,860 ₹ 83,858
100 Million Edition ₹ 70,710 ₹ 85,935
Drum ₹ 69,650 ₹ 81,142
Splendor iSmart
Disc ₹ 72,350 ₹ 84,115
Drum ₹ 73,900 ₹ 89,959
Super Splendor
Disc ₹ 77,600 ₹ 94,123

3. Place
Hero Honda Splendor bikes are positioned all over India. Hero MotoCorp two
wheelers are manufactured across six globally benchmarked manufacturing facilities.
Two of these are based at Gurgaon and Dharuhera which are located in the state of
Haryana, one is in Neemrana, Rajasthan and one is in Halol, Gujarat. The fifth and
the latest manufacturing plant is based at Hardwar, in the hill state of Uttarakhand
and the sixth one is in Chittoor, Andhra Pradesh where the company has recently
commenced commercial production. From these factories, the Hero dealers gets

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their vehicles. Dealers are usually assigned to a particular area. They work as both
retailing units for customers as well as distributor units for sub-dealers. Sub-dealers
are located in remote areas and small towns, they sell their units directly to the
consumers.

The Company's success in the Indian two-wheeler sector is due to its inherent
capacity to expand into new geographies and growth areas. Hero MotoCorp today
has over 5000 client touch points in its wide sales and servicing network. These
comprise a mix of authorized dealerships, service & spare parts outlets and dealer-
appointed outlets across the country

4. Promotion
Hero Motocorp always has an aggressive branding and marketing campaigns in print
medias, Television advertisements, Magazines, Billboards, Hoardings, Social media,
Pham-plates etc.

The Hero Motocorp brand has a fresh and trendy identity that appeals to its target
audiences. The colors black and red in the logo give out a strong message of
passion, energy, and confidence.
The company has released an anthem that focuses on establishing an emotional
bond with all viewers and consumers. Their commercials tell the story of a typical
Indian's hardship, and how he overcomes it to become a true and successful Hero.
Even the Tag Line – “Hum Mein Hai Hero” is apt in showing the customer that every
person has a hero inside them. This helps in building the emotional connection that
the brand is aiming for. All of its advertisements have catchy slogans and display a
strong message.

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For the majority of its advertising operations, Hero Motocorp has been extensively
tied with sports. The company was previously associated with the Indian Open Golf
Tournament. In the year 2012, Hero sponsored the FIH Road to London tournament
under its own brand name. These sponsorships are a good example of the
company's effective marketing tactics. Hero has long been associated with cricket,
whether it be for international competitions or world cups.
Hero has also always chosen public figures like cricket players, Bollywood &
Tollywood superstars, singers as its brand ambassadors. Currently, captain of Indian
National Cricket Team, Virat Kohli is playing the role of brand ambassador for India,
whereas football star Yerry Mina is the brand ambassador for international market.

Competitor Analysis
Competitor Analysis of Hero Motocorp
Motorcycles are a fast-growing segment in India, accounting for around three-
quarters of the two-wheeler market. As a result, there is inevitable competition in
demand has increased the competition even further. Hero's main competitors are:

Major Competitors

Other Minor Competitors

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 In India, the two-wheeler sector is fiercely competitive, with three major players:
TVS Motors, Honda, and Bajaj Auto. Honda introduced made-in-China two-
wheelers in 2012, which are less expensive than comparable cost-effective
models. Since the end of the joint venture in 2010, Honda has been aggressively
growing. Under its Indian subsidiary, Honda Motorcycles and Scooters India Pvt.
Ltd, it began persuading Hero dealers to join the Honda network (HSMI).
Similarly, TVS Motors has teamed up with BMW to produce a premium
motorcycle line that competes directly with Hero's Xtreme series. Because India
is such a vast market to get into, competition will stay fierce.
Hero is undoubtedly the market leader and that of course calls for consistent
growth and performance in order to defend its coveted position.
Competitor Analysis of Hero Splendor
The Hero Splendor is one of the highest-selling motorcycles in India, and
definitely one of the most popular for several decades now. It is popular due to its
fuel-efficient engine and low running costs.
Most of the Competitors of Hero Motocorp have launched motorcycles in this
segment with similar features and price point. Some of them are as follows.
Model Description
TVS Radeon The TVS Radeon is TVS Motor Company's answer to the bestselling
Hero Splendor Plus. Powered by a slightly bigger 110 cc single-cylinder
engine, the TVS Radeon also makes marginally more power, with 8.08
bhp at 7,350 rpm and 8.7 Nm at 4,000 rpm. The Radeon boasts of a
slightly longer wheelbase (1265 mm), more ground clearance (180 mm,
compared to the Hero's 165 mm).
Honda CD 110 The Hero Splendor Plus started life in the 1980s as the Hero Honda
Dream Deluxe CD100, and now, Honda Motorcycle and Scooter India (HMSI) also has a
110 cc commuter motorcycle designed to compete with the Splendor
Plus. The Honda CD110 Dream Deluxe promises slightly premium
styling, along with features like the ACG silent start motor, and engine
start stop switch. The Honda CD110 Dream Deluxe is powered by a 110
cc engine, which makes 8.7 bhp at 7,500 rpm and 9.2 Nm at 5,500 rpm

TVS Star City The TVS Start City Plus is a slightly premium 110 cc commuter
Plus motorcycle which also offers an alternative to the Hero Splendor Plus.
Powered by the same 110 cc engine as the TVS Radeon, the Star City
Plus also makes 8.08 bhp at 7,350 rpm, but peak torque of 8.7 Nm
comes in marginally higher at 4,500 rpm. The Star City Plus also gets the
same four-speed transmission, but ground clearance is slightly lower
than the Radeon at 172 mm but still more than the Splendor Plus.

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 Bajaj CT 110 The Bajaj CT110 is priced at ₹ 58,061 (Ex-showroom) and offers a
superb value-for-money and fuel-efficient motorcycle, as an
alternative to the Hero Splendor Plus. The Bajaj CT110 is powered
by a 115 cc single-cylinder engine which makes 8.5 bhp at 7,000
rpm and 9.81 Nm at 5,000 rpm. The CT110 also gets a four-speed
gearbox and comes with 118 kg kerb weight. Fuel tank capacity is
10.5 litres, while wheels are 17-inchers, compared to the 18-inch
wheels of the Splendor Plus.

Bajaj Platina 100 The Bajaj Platina 100 ES is another affordable Bajaj commuter
ES motorcycle, which is positioned as a direct rival to the Hero
Splendor Plus. The Platina 100 ES is priced at ₹ 56,480 (Ex-
showroom), and is also powered by a 100 cc engine. Maximum
power is 7.8 bhp at 7,500 rpm, with peak torque of 8.3 Nm kicking
in at 5,500 rpm. The Platina 100 ES tips the scales with a kerb
weight of 117 kg.

STP- SEGMENTATION, TARGETING AND POSTIONING

STP analysis: Identify the market segments for the product category, choice,
behaviour of the consumers and competitive position.

SEGMENTATION:

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1. Geographical Segmentation
Geographic Segmentation calls for division of the market into different geographical
units such as nations, states, regions, countries, cities, or neighbourhoods. In the
South Asian context, geographic segmentation assumes importance due to
variations in consumer preferences and purchase habits across different regions,
across different countries, and across different states in these countries.
2. Demographic Segmentation
In demographic segmentation, the market is divided into groups on the basis of
variables: age, family size, gender, income, occupation, education, social class, etc.
One reason demographic variables are so popular with marketers in that they’re
often associated with consumer needs and wants. Another is that they’re easy to
measure. Even when we describe the target market in non-demographic terms (say,
by personality type), we may need the link back to demographic characteristics in
order to estimate the size of the market and the media we should use to reach it
efficiently. The Hero MotoCorp company segmented the motorcycle market on the
basis of age, income, gender etc.
Focused on segment of age group: Age group 30-40 with 125cc Glamour, Super
Splendor, Splendor+, Splendor Pro and for 18-30 with 200cc Xtreme and Xpulse.
Income: Income determines the ability of consumers to purchase the product. Hero
MotoCorp is focussing on different income for different product. Economy: Maestro
Edge 110 cc Executive: Destini 125 cc, Premium: Xpulse
Gender: Men and women tend to have different attitudinal and behavioural
orientation based partly on genetic make-up and partly on socialization. Hero
MotoCorp segmented its bikes for men and for women it came up with Pleasure
(Gearless bike).
3. Psychographic Segmentation
In this segment, the Hero MotoCorp company segmented the buyers in to different
groups on the basis of psychological personality traits, lifestyle. Hero Xtreme is
focused on outgoing youth of age group 18-25. Hero MotoCorp Xpluse is for men
who have a macho image.
4. Behavioral Segmentation
The lifestyle and behaviour of an individual is reflected in its consumption and it also
involves occasional income while evaluating the decision for same
Hero MotoCorp's Market Segmentation
Hero MotoCorp caters to a wide consumer base. It has segmented its market based
on income and age. It caters to youth of all income groups. Its highest selling bike
Splendor is a favorite in sub urban and rural India. It portrays itself as the most
efficient bike range to cater to Indian Roads Target Market Hero MotoCorp follows
selective specialization.

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TARGETING:
After identifying the market segments, the marketer then decides which market
presents the greatest opportunities, which are its target markets. Hero MotoCorp has
used product specialisation in this case by placing Splendor in all markets. It has
also used selective specialization for some of its products, for example, Xtreme and
Xpulse are targeted at youth preferring voluminous and bulky bikes. It is also a high-
end product.
Hero MotoCorp follows selective specialization. Each product has multiple optional
features. The USP that it uses are strong, sturdy, and powerful, greater mileage, low
maintenance cost, safe to ride, ease and comfort. Its target market includes lower
middle-class consumer to upper middle-class consumer. It is affordable, available,
and acceptable by all.
For each target market, the firm develops a market offering that it positions in the
minds of the target buyers as delivering some central benefits. The Hero Moto Corp
has positioned its brand as fuel efficient, suitable for Indian roads and longevity
engine compared to other bikes in the market.
POSITIONING:
Positioning is an act designing company’s profile and image to take a top place in
the minds of the targeted consumers. Positioning refers and broadly means why
targeted market should buy that product. Hero is having good brand positioning in
the market due to its look, designs, models, engine, and safety measures.
Event sponsorships of various cricket matches are a positioning strategy as cricket
has a massive fan base in India. It positions itself as a strong, reliable, affordable
and more mileage bikes. Celebrity endorsements numerous celebrity endorsements
are used as their positioning technique. Saurav Ganguly, when he became captain
of Indian Cricket team turned into their brand ambassador together with Hritik
Roshan. Both these personalities are unique in their fields. Saurav Ganguly became
the face of Indian cricket. People worshiped him. So, through Saurav Gaunguly,
Hero portrayed itself as the heartbeat of the country. Hritik Roshan is known for his
personality and physique. So, through him Hero attempted to lure the young people.
Hero MotoCorp is these days doing sponsorship in numerous sports activities
occasions such as, golf, cricket, soccer, and hockey.

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Product Level:
The Five Product Levels model offers a way to show the different levels of need
customers have for a product. These needs range from core needs to psychological
needs. At each level of product, more customer value is added.

5. Potential
4. Augmented
3. Expected
2. Basic
1. Core

Example of Hero Splendor:

1. Core Benefit The core benefit is the fundamental need or wants that
the customer satisfies when they buy the product.

In our case Core benefit is Personal travel/transport

2. Basic Product The basic product is a basic version of the product made
up of only those features necessary for it to function.

In our case basic product would be a seat/box on wheels

3. Expected Product The expected product is the set of features that the
customers expect when they buy the product.

In our case expected product would be economical &

comfortable
4. Augmented Product The augmented product refers to any product variations,
extra features, or services that help differentiate the
product from its competitors.

In our case augmented product would be stylish, more

fuel efficient with features such Self-Start, alloy wheels,
etc
5. Potential Product The potential product includes all augmentations and
transformations the product might undergo in the future.

In our case it would be Mobile charging, more storage

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 capacity, keyless entry, etc

Product Hierarchy
Product hierarchy is the arrangement of a product into its essential components. It is
inevitable that a product is related or connected to another. The hierarchy of the
products ranges from basic fundamental needs to specific items that satisfy the
particular needs. Product hierarchy is better understood by seeing the business as a
whole as opposed to looking at a specific product.
Product hierarchy is divided into several levels:
1. Need The product need is the primary reason for the existence of a product.

2. Family In product family, the attention should not be on the individual market
but rather the entire business market.
3. Class Product class occurs when categories are drawn from the same
company.
4. Line A product line consists of the entire group of products & these
products are related because they perform a comparable function,
are purchased by the same group of customers or fall within a certain
price range.
5. Type This refers to the various products within a product line

6. Item This refers to a discrete item within a product type of brand that can
distinguish itself by size, price or any other feature.

Example of Hero Splendor

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Line Extension:
Definition: A product line extension is the launch of a new product in a product
category where the brand already sells products. The new product sells alongside
the existing products. Typically, a line extension is a new flavor, scent, formula,
color, size, or style of a product in a current product line.
Why Line extension?
Line extension is less risky because customers are already familiar with the existing
products and are more likely to try the new products. Also, in case of Hero same
parts & manufacturing lines of earlier products could be used hence prove was more
cost effective to the company.
Example:
Bikes:

Scooters:

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Brand Extension:
Definition: A brand extension is when an existing brand offers a new product in a
product category that the brand has never competed in.
Why brand extension?
 Improve overall brand image hence risk perceived by the customers reduces
 The likelihood of gaining distribution and trial increases. 
 The expense of introductory and follow up marketing programs is reduced
since brand is already established.
 Diversification of funds helps in having multiple sources of revenues.

Example:

Product Life Cycle:

Every product launched in the market will have a life. The span cannot be known
earlier hence companies want their products to enjoy long lives and expect lucrative
profits out of their sales.

A product life cycle (PLC) is the course that a product’s sales and profits take over its
lifetime. It is divided into 4 stages: Introduction, Growth, Maturity & Decline and
from marketing perspective each stage is equally important for it directly impacts
company revenues.

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 Example of PLC of Hero Splendor:

Introductio Sales: Launched in 1994 (Volumes were low)

n
Investment: Very high. Expenses included media launch, celebrity advertising,
Manufacturing line planning, establishment and expansion at Gurgaon &
Dharuhera First Advertisement on Doordharshan: Tagline: “Designed for
comfort, designed for excellence”

Competition: The market was then dominated by Bajaj, Kinetic and Rajdoot.
Hence competition was low

More observations: Since product was new demand had to be created.

Customers have to be prompted to try new product. Profits were low.

Growth Sales: 2000-2005 (Volumes were high)

Investment: High due to line extensions such as Splendor Plus, Super Super,
etc. Advertising costs and purchase/development of land for manufacturing plant
in Haridwar.

However, some costs were also reduced due to economies of scale. Famous

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 Advertisement: “Lage Aisa Family Jaisa”

Competition: LML, YAMAHA, Royal Enfield, TVS, Suzuki started making their
mark.

More Observations: Public awareness was high, More customers were trying the
product. Profits were high as products were sold at premium thereby increasing
accessory sale to the maximum.

Maturity Sales: 2015-2018 (highest sales figures by volume)

Investment: Low as cost were reduced due to high production volumes and
brand was also established

Competition: Was very high. Honda had launched its own series of bikes.
Mahindra had just entered two-wheeler business. New generation preferred
Yamaha, Pulsar, Apache over Splendor.

Also, Honda Active became the highest selling 2-wheeler in 2016-2018.

More observations: Brand differentiation and feature diversification is

emphasised to maintain market share.

Decline Sales: The sales of Splendor started dropping since 2018 and though Splendor
again retained its No.1 position in 2020 the sales figures were less than 2018.
Also investments were constant hence low.

Competition: Is very high. The entry of new variants with less pricing in the
economy segment continues to be a concern for Hero Splendor. Products such as
Bajaj Platina, Bajaj Discover, Honda CB shines took away major chunk of
customers from Splendor’s share in FY2021.

Profits: Various incentives and promotional discounts are being offered by Hero
to motivate and support channel partners in pushing the sales. Hence profits are
relatively low.

Brand Strategy:

Product Line Strategy –

A product line is a group of related products all marketed under a single brand name
that is sold by the same company. Companies sell multiple product lines under their

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various brand names, seeking to distinguish them from each other for better
usability for consumers, same goes for Hero MotoCorp, as they provide their
customer with different type of products for different consumer. For example,
Splendor for a family man but on the other-hand a passion-able youth would prefer
Xtreme 200s as their main marketing strategy was to attract the younger generation.
Range Brand Strategy –
Range branding is a branding strategy used by a company to brand a range of
products that fall under the same area of competence, under their own unique brand
with their own brand strategy, promise, and positioning, while also still being tied to
the overall strategy and positioning of the master brand. For example, Hero
MotoCorp uses its Hero electric brand for range of products like City speed, Comfort
speed and E-cycle. Range branding permits brand’s expansion into nearby territories
of complimentary products, which support main products usage.
Brand Promotion Strategy
Played a crucial role with Hero event sponsorship, Celebrity endorsement, why
should boys have all the fun campaign, promotion through inter college rock music
competition and also MTV ROADIES.
The Hero organization makes use of so many gears for the promotion of their
brands. They spread awareness in clients & throw advertising. They use television,
radio, newspaper, posters, and internet as a medium for advertising. People without
difficulty understand the features and advantages of the product from these modes
of advertisement, they receive the brand identity and geared up to buy the product.
Their "Pleasure" targeted on product incentive promotion tactics. For this they
provide free trials or pattern packages, coupons prizes, and more. It uses business
to commercial enterprise promotion strategy, including trade shows, conventions,
sponsorships, contests, giveaways together with pens, notepads, hats, etc.

New
Logo

OLD
LOGO

Brand Identity-

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Includes the logo, reflected by above image, slogan and theme song- “hum mein
hero hai", sung by A.R. Rahman and visual identification. Also well positioned by
statement- every person has a hero and a winner within one’s self. The value of the
brand involves reliability, constant mileage, comfort riding, reasonable price and low
maintenance.
Line Extension/Upgradation:
Hero is one famous brand which continuously focuses on Line extension and
upgrading the existing product based on market demand.

Splendor Pro
Spendlor NXG
Splendor
Super
Splendor+
Splendor

Advertising strategy
The Hero MotoCorp brand has a fresh and trendy identity that appeals to its target
audiences. The colors black and red in the logo give out a strong message of
passion, energy, and confidence.
The brand has come out with a new anthem that focuses on creating an emotional
connection with all the viewers and customers. Their ads are about the story
involving the struggle of a common Indian, how he overcomes them and turns into a
true and successful Hero.

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Even the Tag Line – “Hum Mein Hai Hero” is apt in showing the customer that every
person has a hero inside them. This helps in building the emotional connection
that the brand is aiming for. All of its advertisements have catchy slogans and
display a strong message. These ads are aired at regular intervals on television and
radio, as well as in newspapers, magazines and even billboards.

Hero MotoCorp has been heavily associated with sports for most of its promotional
activities. Previously the company was related to the Indian Open Golf Tournament.
Hero, under its own brand name, sponsored the tournament FIH Road to London in
the year 2012. These sponsorships are an excellent example of the apt marketing
tools used by the company.
Hero has also always been associated with the cricketing fraternity, either for
international tournaments or world cups.

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Virat Kohli, Irfan Pathan, Ranbir Kapoor and Hrithik Roshan have been the
company’s brand ambassadors over the years. At present, actor Akshay Kumar can
be seen in most of the ads of the company and is synonymous with the brand now.
Along with the above Hero MotoCorp also had the Alia Bhatt as female brand
ambassador from bollywood industry.
Hero has therefore carried out many successful marketing campaigns and continues
to explore new ways to reach its audience.
Subsequent ad campaigns
‘Tomorrow Can’t Wait’ captures the restless energy of a generation hungry for new
opportunities and new experiences. The range features the Xpulse 200, a first-of-its-
kind adventure bike, its tourer twin the Xpulse 200T, the Xtreme 200S, a fully-faired
sports version of the Xtreme 200R
‘Chalta rahe tera mere Milo ka yarana’ Campaign Hero launched its new TV
advertisement for its bike Splendor, with a beautiful song ‘Chalta Rahe Tera Mera
Meelon Ka Yaarana ‘. The song is sung by the known Bollywood composer and
singer Ankit Tiwari and this advertisement is loved by everyone.
Future Expansion Plan Hero MotoCorp
Hero MotoCorp plans to launch its electric vehicles in 20 global markets and
expects 15 percent of total volumes to come from global sales by 2025.
Additionally, the company is expecting a minimum of 30 percent of its sales to come
from digital channels through 2030
Hero MotoCorp to launch over 50 new bikes and scooters by 2025.

Hero said it will launch over 10 new products every year for the next five years.

New Product Development Strategy: 

 
Factors considered before NPD: 

Factors must be considered as following:

return on investment (ROI); surveys of market trends; forecasts of market size,
sales, fuel costs and future consumer preferences; as well as technology availability
and cost. Additionally, a new vehicle built at an existing assembly plant must mesh
with the production cycle for other vehicles at that plant, as well as with the
company's overall assembly capacity. These business plan decisions - which
determine an automaker's major investments - entail many inherent uncertainties,
not the least of which is the fact that market conditions can change dramatically,
even in the midst of the process. Given such complexity, it is indeed remarkable
when a company launches a new vehicle that consumers want at the exact time they
want it.  

Timeline process for NPD 

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And for a vehicle program to be fully profitable, consumer demand must hold up
throughout the vehicle's multi-year production life prior to replacement or
redesign. Automobiles require long lead times for design, development and
production planning (including tooling and supplier contracting). The process of
developing a new program, whether for a new or redesigned vehicle or a powertrain,
typically spans two-and-a-half years from concept to launch. Speed in product
development confers a competitive advantage, with the best programs completing
the process in 24 months while others struggle with timelines of 36 months or
longer.  

The first six to 12 months is critical. During this strategy development phase, major
parameters defining the program are decided and a business case is developed.
Parameters set at this point include market segment and competitive positioning,
expected sales volume and price, and key vehicle attributes including size,
performance, drivetrain and other major technology options. The availability and
utilization of production capacity also are critical elements, since poor capacity
planning can be financially devastating.  

It is on the basis of such parameters, including capital and corporate resource needs
along with profitability metrics, that a program is submitted for top management
approval. This step, which typically happens about 24 months before product launch,
is the point at which major funds for implementing the program are released.  
Any given product program is but one element of a company's full vehicle portfolio.
An automaker's cycle plan is the resource allocation timeline that compiles the full
set of business propositions for every product in the portfolio. Auto companies
address product planning activities and development decisions broadly, and
increasingly globally, covering all their products and all their markets. A complete
cycle plan usually spans 10 to 15 years, but the plan is most detailed for the
immediate five years, when the timing of major design efforts and capital
investments are well defined.  

Hero’s Market Development Strategy: 

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Based on R4 (Revitalize, Recalibrate, Revive and Revolutionize), Hero MotoCorp
continues to invest in the development of new products for international markets and
expansion of global footprint. Developing new markets and strengthening the market
share in the existing ones by delivering superior products and enhanced customer
experiences. 

Focusing on the premium motorcycles and scooters segment in Bangladesh, Nepal

and Latin America, while in the African markets it is revamping its product portfolio,
growing the network and establishing its brand presence. 
Hero MotoCorp FY21 - highest-ever exports in any single month. The company
exported 1,91,609 units in FY21, an increase of 7.5% over FY20 despite the impact
of Covid-19. 

The company terms its entry into Mexico, a key motorbike and scooter market, as a
significant milestone in its global journey. With the Mexico entry, Hero MotoCorp’s
global footprint reached 41 markets outside India. “With Grupo Salinas partnership,
has lead to largest retail sales channels in the country, making Mexico a key
international market in the foreseeable future. 

The company has also appointed new distributor partners in Honduras and
Nicaragua, while it has introduced a new product called Hunter in Nigeria.  
During this fiscal, Hero MotoCorp plans a big push across key markets –Nigeria,
Kenya, and Uganda in Africa – with a revamped product line up, network expansion
and sales promotions activities. It will also scale up market share in Colombia,
Guatemala and Peru through network expansion, investments in brand building and
product refreshes. 

Hero’s Distribution Strategy:

Hero Motocorp has the intrinsic ability to reach the far and wide nook and corners of
any place. In order to maintain its hold in the two-wheeler category Hero has a very
efficient distribution network. They have set up a network for sales and services with
a minimum of 6000 dealerships at most of the service points in all the parts of the
country. It also has dealer-appointed retail outlets at all important and strategic
places.

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Hero is selective in it distribution model, wherein tier 1 cities are catered by dealer,
Tier 2 by Sub Dealers and 3 cities are catered by RSOs.
Hero’s Pricing Strategy:
Hero Motocorp follows the policy of competitive pricing as in today’s market
conditions it is very difficult to follow exclusively
the strategy involving skimming pricing. It believes in passing the benefit of any cost
advantage to its customers. Although the company has emphasized on qualitative
products but still it has kept the prices reasonable and affordable. Hero Motocorp
has two wheelers of varying price ranges to suit the needs of different sections of
society.

[Price are in Rs. Thousands]

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