CHAPTER – I

 INTRODUCTION
 NEED FOR THE STUDY
 OBJECTIVES OF THE STUDY
 METHODOLOGY
 LIMITATIONS

1
 1.1 INTRODUTION

Marketing:-

Marketing is the process by which companies create customer interest in products or services. It
generates the strategy that underlies sales techniques, business communication, and business
development. It is an integrated process through which companies build strong customer
relationship and create value for their customers and for themselves.

Marketing is used to identify the customer, to keep the customer, and too satisfy the customer.
With the customer as the focus f its activities, it can be concluded that marketing management is
one of the major components of business management. Marketing evolved to meet the statistics in
developing new markets caused by mature markets and overcapacities in the last 2-3 centuries.
The adoption of marketing strategies requires businesses too shift their focus from production to
the perceived needs and wants f their customers as the means of staying profitable.

The term marketing concept holds that achieving original goals depends on knowing the needs
and wants of target markets and delivering the desired satisfactions. It proposes that in order to
satisfy its organizational objectives, an organization should anticipate the needs and wants of
customers and satisfy these more effectively than competitors.

Further definitions

Marketing is defined by the American Marketing Association (AMA) as “the activity set of
institutions, and processes for creating, communicating, delivering, and exchanging offerings that
have value for customers, clients, partners, and society at large.” The term developed from the
original meaning which referred literally to going to a market to buy or sell goods or services.
Seen from a systems point of view, sales process engineering views marketing as “a set of
processes that are interconnected and interdependent with other functions, whose methods can be
improved using variety of relatively new approaches.”

2
The charted institute of marketing defines marketing as “the management process responsible for
identifying, anticipating and satisfying customer requirements profitably.” A different concept is
the value-based marketing which states the role of marketing to contribute to increasing
shareholder value. In this context, marketing is defined as “the management process that seeks to
maximize returns to shareholders by developing relationships with valued customers and creating
a competitive advantage.”

Marketing practice tended to be seen as a creative industry in the past, which included
advertising, distribution and selling. However, because the academic study of marketing makes
extensive use of social sciences, psychology, sociology, mathematics, economics, anthropology
and neuroscience, the profession is now widely recognized as a science, allowing numerous
universities to offer master-of- science (MSC) programmes. The overall process starts with
marketing research and goes through market segmentation, business planning and execution,
ending with pre and post-sales promotional activities. It is also related to many of the creative
arts. The marketing literature is also adept at re-inventing itself and its vocabulary according to
the times and the culture.

From the study, we found that, the customers were highly satisfied with the products and service
of Hero Honda, but there were some complaints regarding after sales service and staff of Hero
Honda. It was found that Hero Honda Motorcycle is having a good brand image in the market.
Most of the respondents considered Hero Honda showroom is one of the best places to purchase
of Motorcycle. The present is the era of customers. Customers are more knowledgeable than ever
before and because the customer is more knowledgeable, companies must be faster, more agile
and more creative than few years ago. So companies should strive to enhance customer
satisfaction through knowing their expectations regarding products. Hero Honda should
improve on their after sales support, and have knowledgeable support staff. Also Hero Honda
should increase the range of its targeted market.

3
 Earlier approaches

The marketing orientation evolved from earlier orientations namely the production orientation,
the product orientation and the selling orientation.

Production orientation:-

Until the 1950s A firm focusing on a production orientation specializes in producing

as much as possible of a given product or service. Thus, this signifies a firm exploiting of scale,
until the minimum efficient scale is reached. A production orientation may be deployed when a
high demand for a product or service exists, coupled with a good certainty that consumer tastes
do not rapidly alter (similar to the sales orientation).

Product orientation:-

Until the 1960s a firm employing a product orientation is chiefly concerned with the
quality of its own product. A firm would also assume that as long as its product was of a high
standard, people would buy and consume the product.

Selling orientation:-

1950s and 1960s A firm using a sales orientation focuses primarily on the
selling/promotion of a particular product, and not determining new consumer desires as such.
Consequently, this entails simply selling an already existing product, and using promotion
techniques to attain the highest sales possible. Such an orientation may suit scenarios in which a
firm holds dead stock, or otherwise sells a product that is in high demand, with little likelihood
of changes in consumer tastes diminishing demand.

4
Marketing orientation:-

1970 to present the ‘marketing orientation’ is perhaps the most common orientation
used in contemporary marketing. It involves a firm essentially basing its marketing plans around
the marketing concept, and thus supplying products to suit new consumer tastes. As an example,
a firm would employ market research to gauge consumer desires, use R&D to develop a product
attuned to the revealed information, and then utilize promotion techniques to ensure persons
know the product exists.

Customer orientation

A firm in the market economy survives by producing goods that persons are
willing and able to buy. Consequently, ascertaining consume demand is vital for a firm’s future
viability and even existence as a going concern. Many companies today have a customer focus
(or market orientation). This implies that the company focuses its activities and products on
consumer demands. Generally there are three ways of doing this: the customer-driven approach,
the sense of identifying market changes and the product innovation approach.

In the consumer-driven approach, consumer wants are the drivers of all strategic
marketing decisions. No strategy is pursued until it passes the test of consumer research. Every
aspect of a market offering, including the nature of the product itself, is driven by the needs of
potential consumers. The starting point is always the consumer. The rationale for this there is no
point spending R&D funds developing products that people will not buy. History attests to many
products that were commercial failures in spite of being technological breakthroughs

A formal approach to this customer-focused marketing is known as Siva (Solution,

Information, Value and Access). This system is basically the four Ps renamed and reworded to
provide a customer focus. The SIVA model provides a demand/customer centric version
alternative to the well-known 4Ps model (Product, Price, Placement, Promotion) of marketing
management.

5
Product Solution

Promotion Information

Price value

Placement Access

Customer satisfaction:

Customer satisfaction, a business term, is a measure of how products and services

supplied by a company meet or surpasses customer expectation; it is seen as a key performance
indicator within business and is part of the four of a balanced scorecard.

In a competitive market place where businesses compete for customers, customer

satisfaction is seen as a key differentiator and increasingly has become a key element of business
strategy.

However, the importance of customer satisfaction diminishes when a firm has

increased bargaining power. For example, cell phone plan providers, such as AT&T and
Verizon, participate in an industry that is an oligopoly, where only a few suppliers of a certain
product or service exist. As such, many cell phone plan contracts have a lot of fine print with
provisions that they would never get away if there were, say, a hundred cell phone plan
providers, because customer satisfaction would be way to low, and customers would easily have
the option of leaving for a better contract offer.

There is a substantial body of empirical literature that establishes the benefits of

customer satisfaction for firms.

6
Measuring Customer satisfaction:

Organizations need to retain existing customers while targeting non-customers.

Measuring customer satisfaction provides an indication of how successful the organization is at
providing products or services to the marketplace.

Customer satisfaction is an abstract concept and the actual manifestation of the state of
satisfaction will vary from person to person and product/service to product/service. The state of
satisfaction depends on a number of both psychological and physical variables which correlate
with satisfaction behaviors such as return and recommend rate. The level of satisfaction can also
vary depending on other factors the customer.

7
 1.2 Need for the study:-

For a company t sustain and grow in the competition that prevails, it should have
a strong customer base. Today’s customers are hard to please. They are smarter, more
price conscious, more demanding, less forgiving and approached by more competitors
with equal offers. The challenge according too Geoffrey Gitomer is not to produce
satisfied customers. Several competitors can do this. The challenge is to provide loyal
customers.

Its not enough to be skillful in attracting new customers, the company must keep
them. Today’s companies must pay closer attention to the customer defection rate (the
rate at which they lose customer).

The key too customer retention is customer delightment. A highly satisfied

customer stays loyal longer, talks favorably about the company and its products; offers
product or service ideas to the company and costs less to serve the new customers. Today
more companies are recognizing the importance of satisfying and retaining current
customers.

In view of the organization’s requirement to know about the level of its customer’s
satisfaction the study is conducted in Anakapalli region which can be of little help in
identifying the customer’s expectations and the prevailing gap between expectations and
reality.

8
 1.3 OBJECTIVES OF THE STUDY

The present study has the following objectives:

 To measure the level of satisfaction based on various factors.

 Too identify the gaps that exist between customer expectations and the value offered by
the company.
 To identify key areas that influence customer’s purchase decisions.
 To recommend the company necessary steps to be taken in order to minimize customer
switch over.

9
 1.4 Methodology

Data that is required for the analysis and that fulfill our objectives has been
collected from two sources. They are

PRIMARY DATA:

These data were collected by personal interview with customers and

consumers of HEROHONDA Two wheeler users. For this purpose questionnaire was prepared in
such that all necessary data would be collected.

SECONDARY DATA:

Information regarding the project, secondary data was also required. These
data were collected from various past studies and other sources of the company.

SAMPLE SIZE:-

The sample size is 80 customers of Hero Motocorp, who are loyal customers.

SAMPLE SELECTION:-

Random sampling can also refer to taking a number of independent observations from the same
probability distribution, without involving any real population. A probability sample is one in
which each item has a known probability of being in the sample.

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 1.5 LIMITATIONS

As already stated that the scope of this study is limited and there are quite a few
limitations for this study.

 As the study is conducted in Anakapalli, customer satisfaction of Anakapalli

people only is known and this itself is a big limitation.
 There are a few more limitations which can affect the study in which time is the
most important of all as it is very limited.
 It’s not sufficient to collect more data which is nothing but lack of information.
 The next limitation is that the sample taken may not be representative of the
actual conditions.
 The data given by the customer might not be reliable; many people give the
information just for the sake of giving and it also depends on the mental state of
the customer.
 If the customer is busy he will not give clear information as he would be
preoccupied.

11
 CHAPTER - II

INDUSTRY PROFILE

12
 INTRODUCTION TO INDUSTRY

Two wheelers in India cater to various needs of the consumers. With the choice of the
Indians improving from bicycles to two wheelers, the Indian two-wheeler market has seen a
significant growth over the year. With the growth in the economy the demand for two wheelers
is increasing over the years. It is one of the most dynamic industries today and with the
increasing competition companies are bringing in new products with sophisticated technologies
and innovative features to capture a major pie of the Indian market and it‘s the consumer who is
benefited from it. With the availability of reduced consumer loans and high disposable income
the Indian two-wheeler industry has perceived an exceptional growth over the past few years
thereby making India the second largest market for two wheelers in the world only after China.

The motorcycle has now become one most popular mode of transportation among the
Indian middle class families because of it is cost effective, economical and easy to navigate
through the traffic. Moreover, the people have started preferring bikes instead of scooters and
mopeds and today bikes form a major part of the Indian two wheelers.

Indian companies are one of the largest two wheeler manufacturers in the world. The
number one bike manufacturer in the world, Bajaj is in close competition with the Indian
manufacturer Hero Honda The motorcycle industry in India has witnessed a tremendous change
in the 90‘s with the invention of 4 stroke engine which makes the bikes more fuel efficient.
Further companies are trying to bring in more innovations to make the motorcycle ride more
comfortable, safe and user friendly and economical.

In a nut shell the followings factors can be distinguished for the growth of motorcycle
industry in India:

 Easy accessibility to cheap consumer loans.

 The increase in the average income of the family.
 The reduction in duties and taxes.
 Convenience with regards to commuting as compared to the public transport system.
 Continuous innovations in technology making the bikes economic and fuel-efficient.
 The first choice among youths and teenagers.

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Overview of the Two Wheeler Industry 

India is the largest manufacturer of two wheelers in the world. It stands next only to
Japan and China in terms of the number of two wheelers manufactured and sold respectively.
Initially the motorcycles segment had only three manufacturers Enfield, Ideal, jawa and
Escorts. While bullet was a four –stroke bike, java and Rajdoot were the two strokes. Enfield
350cc bikes & escorts 175cc bike initially dominated motorcycle segment.
The two wheelers market was opened to foreign competition in the mid-80’s and the
then market leaders – Escort & Enfield were caught unaware by the onslaughts of the 100 cc
bikes of the four indo –Japanese joint ventures . With the availability of fuel efficient low power
bikes, demand swelled, resulting in Hero Honda – then the only producer of four stroke bikes
(100 cc category), gaining a top slot.
The 1st Japanese motorcycles were introduced in the early eighties. TVS Suzuki & Hero
Honda brought in the 1st two stroke & four strokes engine motorcycles respectively. These two
players initially started with assembly of Ckd kits, & later on progressed to indigenous
manufacturing .In the 90’s the major growth for motorcycle segment was brought by Japanese
motorcycles, which grew at the rate of nearly 25% CAGR in the last five years.
The Indian two wheelers can be broadly classified into three major segments –scooters,
motorcycles & mopeds. The domestic two wheeler sales of 3.800 mn in Fiscal year 2000
constitutes scooter sales of 33.4% (39%in Fiscal year 1999), motorcycles 47.7 %( 42% in Fiscal
year 99) & mopeds 18 %( 20% in Fiscal year 99). The motorcycle segment has gradually
increased its presence from 27% in the year 1992 to 48% in the year 2000, mainly at the
expenses of the scooter and, to some extent, the moped segment.

The demand for scooters is on the wane and witnessed a 19% year of year fall in Fiscal
year 2000 .Sales in the scooters segment are expected to fail further , while on the other side
motorcycle and scooterette segment will record continued growth in the future . This will
translate into a demand fall of around 20% in scooters. With the ongoing expansion from Bajaj
auto Ltd., LML & TVS Suzuki, the capacity in the sector will increase from 2mn in Fiscal year
2000 to 2.15 mn Fiscal year 2001 leading to a surplus situation.

14
 We expect the motorcycle segment to continue to grow at an average of 20% in Fiscal
year 2001. This will increase demand for motorcycles from 1.800 mn in Fiscal year 2000 to
2.15mn in Fiscal year 2001. The supply of motorcycle segment as per the present trend will
increase from 2.08 mn in Fiscal year 2000 to 2.38 mn in Fiscal year 2001. The segment will be
witnessing several new entrants in Fiscal year 2001, mainly in the four stroke sub segment. This
will lead to an over supply situation and increase the competition in the Japanese segment...

In the last six years, the domestic two wheelers industry has seen structural changes. This
can be seen from the change in composition of two –wheelers sales, where the motorcycles have
consistently gained market share from the scooter and moped segments to corners a share of 41%
of total two wheelers sales. 

This trend is expected to continue in the next two years till the four stroke scooters make
their presence felt in the segment. The table below gives an idea the strides made the motorcycle
segment in the last six years.

The Indian motorcycle industry can broadly categorized in to Indian motorcycles and
Indo Japanese motorcycles. The Indo – Japanese motorcycle segment is dominated by Hero
group, Bajaj and Escorts in collaboration with Japanese vehicle manufacturers Honda, Kawasaki
& Yamaha respectively. The Indian motorcycles segment is dominated by Bajaj, Escorts &
Enfield. In the motorcycle sales western region leads with a market share of 40% of the total
motorcycle sales. South & North regions come second & third with an market share of 28% &
17.5 % of total motorcycles sales respectively.

In terms of two wheelers vehicle population, Maharashtra stands 1st with a population of
all most 3 mn vehicle and Gujarat stands 2nd with 2.7mn vehicles population as on March 31st
1997. Tamilnadu is his largest state with 2.45 mn two wheelers population. In the period Fiscal
year 1993 – Fiscal year 99 the two wheelers industry has grown at CAGR of 14.6%.

15
 This splendid growth was possible due to the average performance of motorcycle
segment, which has grown at a CAGR of 24.3 % compared to 11% for scooters & 8.6 % for
mopeds. After lying for two years, sales of two wheelers bounced back a witness growth in
Fiscal year 1999. The sales of two wheelers have increased by 11.85% YOY to 3.4 mn. 

The trend has continued in Fiscal year 2000 with the sector sales growing by 11% to
3.78 mn vehicles. The demand of two wheelers in India is dependent upon factors like
availability of finance, increase in income levels, and restricted growth in public transportation
and movement in petrol prices. Except petrol prices, all other factors have positive correlation
with the demand of two wheelers .The increase in petrol prices on contrary, adversely affects the
demand for two wheelers, due to increase in the running cost of a vehicle.

Two wheelers are distinguished on different factors for different consumer segments.
For e.g. high powered two wheelers have a niche market as racing / sporting vehicle and have a
special appeal to youngsters. Easy maneuverability / handling ease is preferred by teenagers and
women. Urbanities are lured by fuel efficiency a low maintenance. The lower end of the market
looks for durability, value for money and higher resale values.

Some Two Wheeler Manufacturers in India are:

Hero Motocorp:

Hero Motocorp Ltd., formerly Hero Honda, is an Indian motorcycle

and scooter manufacturer based in New Delhi, 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.

Hero offers two wheelers for everyone right from mopeds to racing bikes. At the rage
of Pleasure, Maestro, Splendor, Splendor+, Passion, Passion Plus, CD 100, CD Dawn, CD
Deluxe, Hero Honda Joy, Glamour, CBZ Xtreme, Hunk, Karizma

16
 Hero Impulse launched in 2011 after the separation of hero and Honda. Its India's first
off-road and on road Bike. Recently Hero launched a new bike Ignator for both Drum and Disc
self cast.
Bajaj Auto:

Bajaj Auto is the largest exporter of two and three wheelers in India. In collaboration
with Kawasaki Heavy Industries of Japan Bajaj Auto Ltd manufactures a wide range of two
wheelers which are the best in the industry.
This company has introduced certain models like Pulsar, Discover DTSi and Kawasaki
Bajaj Eliminator which has given other two wheeler manufacturing companies a run for their
money.
TVS Motor Company:

TVS Motor Company is the third largest two wheeler manufacturer in India and
among the top ten in the world. In its wide range of products TVS offers a two wheelers for
everyone right from mopeds to racing bikes. It has a range of products for women as well like
the TVS Wego, Scotty Streak, Scotty Pep+, and Scotty Teenz and among its most famous road
dominators are: TVS Apache RTR 180, and TVS Flame DS 125.

Majestic Auto Ltd:

The Company began operations in the year 1975, having understood the requirements
of the Indian two wheeler market the company started off with manufacturing mopeds. The
company is synonymous for its mopeds under name of Hero Majestic. The company has a
phenomenal growth record since its very inception in the year 1973.
Kinetic:

Kinetic is the name that is almost synonymous with scooters in India. They were the
first to introduce auto chokes, auto fuel cork, TLAD suspensions, and gearless two wheelers to
the Indian market which was an immediate hit with the Indian women. However the latest two
wheelers introduced by Kinetic are Kinetic 4S and Kinetic Luna TFR Plus.

17
Suzuki Bikes and Scooters:

Suzuki motors first entered India in collaboration with TVS Motors. Suzuki motors
ruled the two wheeler market for quite a long time until competitors started flooding in. Some of
the most famous and stylish two wheelers by Suzuki are Suzuki Samurai, Suzuki Shogun and
Suzuki Max 100.

Trend in Sales Volumes of the Indian Two-wheeler Industry

The Indian two-wheeler (2W) industry recorded sales volumes of 13.4 million units in
2013-14.

A growth of 14.0% over the previous year. In a year wherein growth in other
automobile segments particularly, passenger vehicle (PV) and medium & heavy commercial
vehicle (M&HCV), slowed down to single digits - marred by demand slowdown due to
northward movement of inflation, fuel prices and interest rates - the 14% growth recorded by the
two-wheeler industry remained steady. However, the momentum in the two-wheeler industry’s
volume growth too has been losing steam lately as evident from the relatively lower volume
growth of 11.0% recorded in H2, 2013-14 (YoY) against a growth of 17.1% recorded in H1,
2013-14 (YoY).

The deceleration in growth is largely attributable to the motorcycles segment which grew
at a much lower rate of 7.8% (YoY) in H2, 2013-14 vis-à-vis 16.4% in H1, 2013-14; even as the
scooters segment continued to post 20%+ (YoY) expansion during both halves of the last fiscal.
With this, the share of the scooters segment in the domestic two-wheeler industry volumes
increased to 19.1% in 2013-14 from 17.6% in 2012-13.

Overall, ICRA expects the domestic two-wheeler industry to report a volume growth of
8-9% in 2013-14 as base effect catches up with the industry that has demonstrated a strong
volume expansion over the last three years at cumulative annual growth rate (CAGR) of 21.8%.

Over the medium term, the two-wheeler industry is expected to report a volume CAGR
of 9-11% to reach a size of 24-26 million units (domestic + exports) by 2016-17, as we believe
the various structural positives Associated with the domestic two-wheeler industry including

18
favorable demographic profile, moderate 2W penetration levels (in relation to Several other
emerging markets), under developed public transport system, growing urbanization, strong
replacement demand and Moderate share of financed purchases remain intact.

DOMESTIC:

VOLUME:

  volumes (units, No's)

Q1 Q2 Q3 Q4
YoY 2012-13
2013-14 2013-14 2013-14 2013-14
Motorcycles 9,019,090 2,464,143 2,558,515 2,556,782 2,514,699
Scooters 2,073,797 532,867 650,155 659,643 720,176
Mopeds 697,418 190,672 192,859 186,472 206,863
Total
Domestic 11,790,305 3,187,682 3,401,529 3,402,897 3,441,738

GROWTH:

  Growth (%)
Q1 Q2 Q3 Q4
2012-
YoY 2013- 2013- 2013- 2013-
13
14 14 14 14
Motorcycles 22.90% 17.50% 15.40% 9.20% 6.30%
Scooters 41.80% 13.30% 29.00% 21.60% 29.40%
Mopeds 23.50% 21.00% 7.00% 2.60% 16.40%
Total
Domestic 25.80% 17.00% 17.30% 11.00% 11.10%

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EXPORTS:

VOLUME:

  volumes (units, No's)

Q1 Q2 Q3 Q4
YoY 2012-13 2013- 2013- 2013- 2013-
14 14 14 14
Motorcycles 1,480,983 482,566 492,408 448,090 434,521
Scooters 52,312 20,949 24,696 23,950 21,010
Mopeds 6,295 1,461 3,478 2,796 1,341
Total
Exports 1,539,590 504,976 520,582 474,836 456,872

GROWTH:

  Growth (%)
Q1 Q2 Q3 Q4
2012-
YoY 2013-
13 2013-14 2013-14 2013-14
14
Motorcycles 34.30% 27.10% 31.70% 21.80% 18.10%
Scooters 73.60% 100.40% 88.50% 92.00% 29.00%
Mopeds -8.80% -44.00% 159.20% 188.00% -2.30%
Total
Exports 35.00% 28.60% 34.00% 24.50% 18.50%

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 MARKET SHARE FOR 2012-13

Two-Wheelers: Market Size & Growth

In terms of volume, 13,433,846 units of Two-Wheelers were sold in the country in 2013 with
1,957,266 units exported the total two-wheeler sales of the Indian industry accounted for around
75% of the total vehicles sold in the period mentioned.

21
 CHAPTER - III

COMPANY PROFILE

22
 3.1 COMPANY PROFILE

INTRODUCTION OF THE HERO MOTOCORP

LOGO
LOGO
Type Public company
BSE: 500182
Traded as NSE: HEROMOTOCO
BSE SENSEX Constituent

Products
Motorcycles, scooters, three-wheeler vehicles
Parent Hero Group
FOUNDED 19 January 1984, HARYANA, INDIA
HEAD QUARTERS Gurgaon, HARYANA, INDIA

23
HERO MOTO CROP

Company Profile
Hero Motocorp Ltd. (Formerly Hero Honda Motors Ltd.) is the world's largest
manufacturer of two – wheelers, based in India. In 2001, the Company achieved the coveted
position of being the largest two-wheeler manufacturing Company in India and also, the ‘World
No.1’ two-wheeler Company in terms of unit volume sales in a calendar year. Hero Motocorp
Ltd. continues to maintain this position till date.
In 2010, when Honda decided to move out of the joint venture, Hero Group bought
the shares held by Honda. Subsequently, in August 2011 the company was renamed Hero
Motocorp with a new corporate identity. On 4 June 2012,Hero Motocorp approved a proposal to
merge the investment arm of its parent Hero Investment Pvt. Ltd. into the automaker. The
decision comes after 18 months of its split from Honda Motors.

“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 owned 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 emphasized 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 Motocorp 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 Motocorp 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.

24
 The company has a stated aim of achieving revenues of $10 billion and volumes of 10
million two-wheelers by 2016–17. This in conjunction with new countries where they can now
market their two-wheelers following the disengagement from Honda. Hero Motocorp hopes to
achieve 10 per cent of their revenues from international markets, and they expected to launch
sales in Nigeria by end-2011 or early-2012. In addition, to cope with the new demand over the
coming half decade, the company was going to build their fourth factory in South India and their
fifth factory in Western India. There is no confirmation where the factories would be built.
Registered and corporate office - 34, Community Centre, BasantLok, VasantVihar, New Delhi

Zonal and regional office :

north South zone East zone West zone

Zonal office New Delhi Bangalore Kolkata Pune
Regional office Chandigarh, Chennai, cochin, Bhubaneswar, Baroda, Bhopal,
jaipur, dehradun, Coimbatore, hubli, Ranchi ,Patna Mum, Nagpur,
lucknow, varanasi Hyd, Vijayawada Raipur, Rajkot

Manufacturing plant

Hero Honda bikes 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 Uttarakhand.

Total no of employee- 6106

FDI/FII (Nature Of Investment)

Holder's Name % Share Holding

Promoters 52.21
Foreign Institutions 33.21
General Public 6.94
Financial Institutions 4.52
Other Companies 1.46
NBanksMutualFunds 1.42
Others 0.13
ForeignNRI 0.11

25
Vision & Mission

Vision

The story began with a simple vision – the vision of a mobile and an empowered India, powered
by its bikes. Hero Motocorp Ltd., company’s new identity, reflects its commitment towards
providing world class mobility solutions with renewed focus on expanding company’s footprint
in the global arena.

Mission

Hero Motocorp’s mission is to become a global enterprise fulfilling its customers’ needs and
aspirations for mobility, setting benchmarks in technology, styling and quality so that it converts
its customers into its brand advocates. The Company will provide an engaging environment for
its people to perform to their true potential. It will continue its focus on value creation and
enduring relationships with its partners

Hero Group aspires to deliver the best and the most cost-effective products & solutions
empowered by superior technologies. The Group is committed to ensure value for money by
developing high-quality, environment-friendly and efficient solutions that fulfill the diverse
needs of customers.

“At Hero Motors, we are committed to give our best and achieve the highest standards in
Performance, Quality, Systems, Care and Relationships. And then we want to beat these high
standards and go further…because anything that can be done can be done better.”

-PankajMunjal- Managing Director, Hero Motors Ltd.

26
Group Philosophy

Hero Group’s philosophy is laid on foundations of responsibility, transparency, accountability,

professionalism and code of ethics, which are the indispensable principles of corporate
governance. The philosophy is to strive to be a Group that society wants to exist by. The Group
focuses on building mutually beneficial relationships with customers, suppliers, partners and
employees. Customers are at the center of everything the Group plans. Hence, the Group strives
to offer cost-effective solutions to customers without compromising on highest degree of
professionalism, quality, accountability and relevance.

Suppliers who work with Hero Group are greatly benefited from its professionalism. The group
believes in maintaining long-term partnerships based on trust and values.

Hero Group’s joint ventures are running smoothly and reporting unprecedented success and
profitability. The Group ensures transparency and collaborative approach to grow mutually and
promises to maintain a productive and progressive work environment.

In short, Hero Group believes that only an ethical business can contribute towards the
development of society. And the company leaves no stone unturned to uphold ethical values.

Evolution

With a modest start in 1956 as a small manufacturer of cycle parts, Hero Group steadily evolved
into an integrated manufacturing engineering solutions provider, with a family of more than
30,000 employees, as many as 7,500 outlets and a total number of 23 companies around the
globe. Progressing by leaps and bounds, the company went on adding more and more feathers to
its cap. Soon after starting as a manufacturer of cycle parts, the company started producing
complete cycles. Currently, Hero Cycles is the world’ leading cycle producer, with more than
100 million bicycles running on Indian roads alone. In 1978, the company forayed into the
moped market. Hero Motors was set up in 1988, when the company joined hands with Steyr
Daimler Puch of Austria. In the subsequent years, Hero started a joint venture with acclaimed
automaker Honda to produce Hero Honda motorcycles.

27
 The saga of success, whose foundation was laid by Late Mr. DayanandMunjal, Mr.
SatyanandMunjal, Mr. BrijmohanLallMunjal and Mr. O. P. Munjal, is being continued with the
same zeal & passion by the second and third generations of the family that is internationally
acclaimed for its business acumen and entrepreneurial spirit.

International financial body - World Bank has applauded Hero Cycles, describing the
company as a role model in vendor development. The huge Hero Group now boasts of a number
of companies that rule the roost in their respective fields. It proudly stands among the top 10
Business Houses in India. The strength and massiveness of the Group can be determined from
the fact that it has annual revenue of around US$5.2 billion.

The Hero Group has been evolving with the passage of time. The best quality and
competitive prices of the products have empowered the group to have an edge over its
competitors and win the trust of the customs. With local stocking and logistical hubs in all the
main markets, the Group is in a position to cater to the needs of the customers from around the
world. Customized service part as well as customized documentation has enabled it to efficiently
meet the diverse needs of the customers.

Effective use of skilled labor and cutting-edge technologies has resulted in the
unprecedented growth of the Group. Keeping abreast of the trends in the automotive industry and
the changing needs of the customers, Hero Group is continuously launching innovative products
in the market. The Group is advancing, building long-term relationship with the clients and
expanding its business empire.

28
Company History - Hero Motocorp:

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

 1984
The Company was incorporated on 19th January, at New Delhi. The Company
Manufacture motor cycles up to 100 cc capacity. The Company was promoted by Hero
Cycles (P) Ltd. (HCPL).

- The Company entered into a technical-cum-financial collaboration agreement with

Honda Motor Co. Ltd., Japan (HML). As per this collaboration agreement, HML was to
furnish complete technical information and know-how and trade secrets and other
relevant data.

- Hero Honda CD-100 is the first four stroke motorcycle to be introduced in India in
100cc range. Its most attractive features are fuel efficiency and its light weight. CD-100
will be equipped with electronic ignition system, illuminated speedometer, 4 speed gear
box, neutral and flasher indicators, etc.

- 15 No. of equity shares subscribed for by the promoters, etc. In November, 119,99,985
No. of equity shares issued at par of which 71,99,985 shares reserved for allotment as
under:

- (i) 31,19,998 shares to Hero Cycles (P) Ltd., Hero Investments (P) Ltd., and Bahadur
Chand Investments (P) Ltd.

- (ii) 31, 20,000 shares to Honda Motor Co. Ltd., Japan and

- (iii) 9,59,987 shares to friends and association of promoters. Out of the balance 48,
00,000 shares, 2,40,000 shares were reserved for subscription by the employees of the
Company and 96,000 shares by business associates. The remaining 44, 64,000 shares
were offered at par for public subscription during November.

 1985
- The Company embarked on its 2nd phase of expansion of increasing its installed
capacity from 1, 20,000 to 1, 50,000 vehicles per annum by the addition of several
critical aluminum and steel components. 

29
 1986
- 36, 00,000 rights equity shares issued at par in prop. 3:10.

 1987
- The Company offered 6,00,000 - 15% secured redeemable non-convertible debentures
of Rs 100 each for cash at par on rights basis in the proportion 1 debenture: 18 equity
shares.

- Another 3, 00,000 - 15% debentures were allotted to retain oversubscription. The

debentures were to be redeemed at a premium of Rs 5 per debenture on the expiry of the
7th year from the date of allotment of the debentures.

- 3, 75,000 rights equity shares issued at par in prop. 3:10.

 1989
- The Company introduced a new model "Sleek" during July.

- 850 No. of equity shares forfeited.

 1990
- The Company was planning to launch a new model motor cycle-CD 100 SS suitable to
semi-rural conditions. In the domestic market the Company was reported to have a
market share of 46%. 
- 850 forfeited shares reissued.

 1994
- The Company proposed to expand the capacity of existing plant at Dharuhera to
2, 40,000 nos. per annum. Another plant with an installed capacity of 1, 50,000 nos. per
annum at Gurgaon Industrial Estate was being set up.

- The Company issued 39, 79,500 bonus shares to the existing shareholders in the ratio of
1:4. The Company also issued 28,557 numbers of fractional coupons representing 14,250
shares against which shares shall be allotted to presenting the same for consolidation and
allotment.

- The Company's production and turnover increased to 1, 83,490 motorcycles and

Rs.483.85 crores respectively due to growth in demand for two wheelers and declining
inflation. 1995

30
 - 14,420 bonus shares issued by way of consolidation of fractional coupons. - A new
Technical Collaboration Agreement has been signed with Honda Motor Co. Ltd., Japan
for the period up to the year 2004 which includes technology related to models of higher
Engine displacement. 

- The Company allotted 39, 79,500 No. of Equity Shares of Rs. 10/- each as Bonus shares
on 7th February, by way of capitalization of General Reserves.

- The Company had issued 28557 No. of Fractional Coupons representing 14.250 shares
against which the Shares shall be allotted on presenting the same for consolidation and
allotment.

 1997
- Hero Honda Motors has launched its newest motorcycle, the Street, a 100 cc bike
designed for use in congested urban traffic conditions.

- Hero Honda Motors Ltd (HHML) has set up a new motorcycle plant in Gurgaon, near
Delhi for the manufacture of the Honda Super Cub 100 cc stepthro bike.

- Hero Honda has set up a new state-of-the-art plant, heralding a new phase of
development of motorcycle industry in India, to provide the most modern and
technologically advanced production facilities.

- Hero Motors of the Rs.1,600 crore Hero group, as part of its globalization plan, has set
up a plant in Brazil for manufacturing hero winner scooters.

- A new step thru model `Street-100' with unique feature was launched on 24th January.

 1998
- The company proposes to increase the share capital to 5 crore equity shares of Rs. 10
each, 4 lakh cumulative redeemable preference shares of Rs. 100 each and 4 lakh
cumulative convertible preference shares of Rs. 100 each with power to increase or
reduce it from time to time.

- The company further proposes to capitalize Rs. 19, 96, 87,500 from general reserve to
share capital through issue and allotment of bonus shares. Altogether, 1,99,68,750 fully
paid bonus shares will be allotted and distributed to members of the company holding
equity shares of the company in the proportion of one bonus share for every fully paid
equity shares of Rs.10 each.

31
 - Motorcycles major Hero Honda is considering entry into scooters in collaboration with
partners, Honda Motors, after the Japanese company decided to walk out of Kinetic
Honda, their scooter venture with the Firodias of Pune.

- Honda Motors recently pulled out of its joint venture with the Firodias in which it held a
51 per cent equity stake.

- Honda Motor Company Ltd of Japan (Honda) and Kinetic Honda Motor Ltd (KHML)
have signed a five-year license and technical assistance agreement under which KHML
will continue to receive the technical knowhow, critical vehicle parts and access to
Honda's markets even after the sale of Honda stake in KHML to Kinetic Engineering Ltd
(KEL).

- The Company changed the paradigm in two-wheelers by launching the most powerful
and fast bike- CBZ (ee) with a unique feature of Transient Power Fuel Control (TPEC)
system.

- 23,962,500 bonus shares issued in prop. 1:1.

 1999
- Hero Honda Motors Ltd (HHML) and 20th Century Finance Corporation Ltd have
signed a Memorandum of Understanding (MOU) for financing of Hero Honda
motorcycles.

- The company, a joint venture between Honda Motor Company of Japan and Hero group
of India to produce four-stroke motorcycles, also aims to increase its share by 1 per cent
to 38.6 per cent during the current fiscal.

- Leading two-wheelers manufacturer Hero Motors has formed a joint venture with
Briggs Stratton of US to develop and manufacture four-stroke engines for mopeds and
scooters in India, a top company.

- Honda Motor Company of Japan has decided to re-enter the scooter market in India as
also foray into three-wheelers in a joint initiative with its existing joint venture company
Hero Honda Motors Ltd.

 2000
- Hero Honda Motors Ltd. and Tata Finance Ltd. have signed a national tie-up agreement.
The Company is the largest manufacturer of motorcycles in the country.

32
 - The Company will relaunch its step thru Street Smart on Baisakhi 13th April.

- Hero Honda Motors Ltd (HHML), has launched an upgraded version of the existing
step-through motorcycle - the Hero Honda Street.

- The Company was ranked as the 9th Highest Value Creator among 12 industry groups
within the Bombay Stock Exchange top 100 companies over a five year period (1994-99).

 2001
- Hero Honda Motors Ltd. has launched a new 100cc motorcycle named `Passion'.

- The Company has secured shareholders' approval for splitting one equity share of Rs 10
each into five equity shares of Rs 2 each in the ratio of 1:5.

- Hero Honda Motors Ltd. has become the largest seller of motorcycles amongst all
Honda companies and ventures in the world by selling one million motorcycles during
the current financial year.

- Credit rating Agency Crisil has reaffirmed outstanding `AAA' rating assigned to the
proposed Rs 15 crore non-convertible debenture issue, Rs 16 crore commercial paper
programme and fixed deposit programme of Hero Honda Motors.

- Promoter-Chairman of the country’s largest motorcycle manufacturing company, Hero

Honda Ltd, Brijmohan Lall Munjal has bagged the prestigious Ernst & Young
Entrepreneur of the Year (EOY) award here on September 27.

 2002
-Company included in the 30 companies Bombay Stock Exchange index (Sensex)

-Becomes world's largest two wheeler company by selling 1.3 million vehicles in 2001

-Japanese automaker Honda Motor for the first time decides to source motorcycles from
its Indian joint venture Hero Honda to sell as 'Honda' brand name in Vietnam

-Royalty to the Japanese parent, Honda Motor Co, hiked to Rs 630 per vehicle as
compared to the flat royalty of Rs 200 on existing models like Splendor and Passion

-Approves Foreign Institutional Investors (FIIs) to increase their stake from the present
24 per cent to 40 per cent

33
 -Comes out as the most profitable two-wheeler company in the country during the trailing
four quarters by overtaking second-largest player, Bajaj Auto

-Launches Ambition, a 133 cc 11 BHP vehicle

-Unveils Smart, a 75 cc step-thru

-Comes out with a free insurance scheme worth Rs 1,000 for all its bikes

-Bajaj Auto goes ahead of Hero Honda in market capitalization (m-cap) growth in the last
fifteen months

 2003
-Achieves a landmark sales turnover of over Rs 5,000 crore during 2002-03

-Launches its cheapest 100cc motorbike 'CD Dawn'

-Hikes production capacity at two of its manufacturing facilities to three lakh units

-Hero Honda and SBI Cards launch co-branded credit card for Hero Honda's customers

-Achieves milestone by producing five million bikes from its Dharuhera plant in Haryana

-Launches its new 223-cc, 16.8 BHP Karizma at Rs 79,000

-Joins hands with Small Industries Service Institute (SISI) to train the unemployed youth
who have finished diplomas

-Initiates a new dealer credit system which will bring down its receivable levels to around
seven days and save the company Rs 100 crore
-Introduces Passion Plus, new version of Passion motorcycle

-Forges marketing pact with Aprilia, the Italian bike maker, to introduce its range of
motor scooters and top-end motorcycles in India

-The company has bagged two Total Customer Satisfaction (TCS) Awards.

-Hero Honda Karizma bags BBC Bike of the Yr Award

34
 2004
-Hero Honda retreats Ambition

-Hero Honda unveils new version of Ambition

-Hero Honda's Dawn emerges as largest entry-level bike

-Hero Motors introduces 'Sting' new 4-stroke bike

-Hero Motors has announced a licensing agreement with Austria-based Bombardier-

Rotax that will provide 125cc-175cc engines for the upcoming `Hero Aprilia' range of
scooters.

-Hero Honda renews alliance with Honda Motor

-Two-wheeler major Hero Honda and SBI Card, the credit card arm of State Bank of
India, have joined hands to launch India's first co-branded credit card in the two-wheeler
industry

 2005
-New product launches widen HHML's product portfolio

-Two-wheeler major Hero Honda on October 5 announced launch of its first scooter
'Pleasure'
-Hero Honda rolls out 150-cc motorcycle Achiever

 2006
-Hero Honda launches CBZ variant Xtreme

-Hero Honda announced the launch of two new variants the new 'Glamour' and 'Passion
Plus' limited edition. - Hero Honda is the World No. 1 for the 5th year in a row

- 15 million production milestone achieved 

 2007
-Hero Honda Motors Ltd. has appointed Mr. Yutaka Kudo as Director and Whole-time
Director of the Company in the category of Executive Director W.e.f. April 1, 2007.

- Hero Honda is the World No. 1 for the 6th year in a row

35
 - 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 Motors Ltd has informed that Mr. Arun Nath Maira. Has been appointed as
an Additional Director in the category of Non Executive and Independent Director w.e.f.
December 20, 2008 by the Board of Directors by way of passing a resolution by
circulation.

- Hero Honda Haridwar Plant inauguration

- New 'Pleasure' launched

- Splendor NXG launched with power start feature

- New motorcycle model 'Passion Pro' launched

- New 'CBZ Xtreme' launched

- 25 million production milestone achieved

- CD Deluxe launched with power start feature

- New 'Glamour' launched

 2009
- Hero Honda Motors Ltd has appointed Mr. Ravi Nath as an Additional Director in the
category of Non Executive and Independent Director W.e.f. October 14, 2009 by the
Board of Directors by way of passing a resolution by circulation on October 14, 2009.

- Hunk' (Limited Edition) launched

- Splendor completed 11 million production landmark

- New motorcycle model 'Karizma - ZMR' launched 

- Silver jubilee celebrations 

36
 2010
- Hero Honda - Honda & Hero Honda sign MOU for New Licensing Arrangement

- Hero Honda on September 2 launched the new model of Super Splendor that comes
with 'Honda intelligent ignition system' (HIIS). Priced at Rs.45, 950.

 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

- Hero Honda Motors Ltd has received a fresh copy of Certificate of Incorporation
consequent upon change of name from Hero Honda Motors Ltd. to Hero Motocorp
Limited.

- Hero Honda rolled out the updated variants of their 125 cc motorcycle namely Glamour
and Glamour FI where the new Hero Honda Glamour will be priced at Rs 50,500 for the
drum brake variant and Rs 52,500 for the disc brake variant.

-Company has changed its name from Hero Honda Motors Ltd. to Hero Motocorp Ltd.
 2012

Hero Honda - Hero Motocorp Forms Strategic Partnership With Erik Buell Racing of
USA

- Hero Motocorp signed deal with a European design and technology partner.

- Hero Motocorp joins hands with HDFC Bank to offer financing at 6.99%

- Hero Investment Pvt. Ltd. to Merge with Hero Motocorp Ltd.

- Hero Motocorp tied up with US-based Erik Buell Racing (EBR) to outsource
technology to be used for its high-end bikes.

37
Termination of Honda joint venture:

In December 2010, the board of directors of the Hero Honda Group has decided
to terminate the joint venture between Hero Group of India and Honda of Japan in a phased
manner. The Hero Group 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.

The Japanese auto major will exit the joint venture through a series of off market
transactions by giving the Munjal family—that held a 26% stake in the company—an additional
26%. Honda, which also has an independent fully owned two-wheeler subsidiary—Honda
Motorcycle and Scooter India (HMSI)—will exit Hero Honda at a discount and get over $1
billion for its stake. The discount will be between 30% and 50% to the current value of Honda's
stake as per the price of the stock after the market closed on Wednesday.

The rising differences between the two partners gradually emerged as an irritant.
Differences had been brewing for a few years before the split over a variety of issues, ranging
from Honda’s reluctance to fully and freely share technology with Hero (despite a 10-year
technology tie-up that expires in 2014) as well as Indian partner's uneasiness over high royalty
payouts to the Japanese company. Another major irritant for Honda was the refusal of Hero
Honda (mainly managed by the Munjal family) to merge the company's spare parts business
with Honda's new fully owned subsidiary Honda Motorcycle and Scooter India (HMSI).[18]

As per the arrangement, it will be a two-leg deal. In the first part, the Munjal family,
led by Brijmohan Lal Munjal group, will form an overseas-incorporated special purpose vehicle
(SPV) to buy out Honda's entire stake, which will be backed by bridge loans. This SPV would
eventually be thrown open for private equity participation and those in the fray include
Warburg, Kohlberg Kravis Roberts (KKR), TPG, Bain Capital, and Carlyle Group.

38
Honda will continue to provide technology to Hero Honda motorbikes until 2014 for existing as
well as future models.

Company performance:

During the fiscal year 2008–09, the company sold 3.7 million bikes, a growth of 12% over last
year. In the same year, the company had a market share of 57% in the Indian market. Hero
Honda sells more two wheelers than the second, third and fourth placed two-wheeler companies
put together. Hero Honda's bike Hero Honda Splendor sells more than one million units per
year. On 1 June 2012, Hero Motocorp reported its highest ever monthly sales at 556,644 units in
May, registering a growth of 11.28%.

2011-12 Performance

 Total unit sales of 54, 02,444 two-wheelers, and growth of 17.44 percent.
 Total net operating income of Rs. 19,401.15 Crores, growth of 22.32 percent.
 Net profit after tax at Rs. 1,927.90 Crores
 Total dividend of 52.50% or Rs. 105 per share including Intern Dividend of Rs. 70 per
share on face value of each share of Rs. 2 each
 EBIDTA margin for the year 13.49 percent
 EPS of Rs. 96.54

Revenue 239.43 billion (US$4.4 billion) (2012)

Net income 23.78 billion (US$440 million) (2012)
Total assets 60.58 billion (US$1.1 billion) (2012)

39
SWOT ANALYSIS
Let’s analyze position of HERO in the current market set-up, evaluating its strengths,
weaknesses, threats and opportunities available.

Strengths:
 Highly experienced management.
 Product design and development capabilities.
 Extensive R&D focus.
 Wide spread distribution network.
 High performance products across all categories.
 High export to domestic sales ratio.
 Great financial support network (for financing the automobile).
 High economies of scale.
 High economies of scope.

Weaknesses:
 Hasn’t employed the excess ash for long.
 Not a global player in spite of huge volumes.
 Not a globally recognizable brand.

Threats:
 The competition catches-up any new innovation in no time.
 Bajaj pulsar gives a huge competition to hero Motocorp.
 Margins getting squeezed from both the directions (price as well as cost).

Opportunities:
 Double-digit growth in two-wheeler market.
 Untapped market above 180cc in motorcycles.
 More maturity and movement towards higher-end motorcycles.
 The growing gearless trendy scooters and scooterette market.
 Growing world demand for entry-level motorcycles especially in emerging markets.

40
 MANAGEMET PROFILE

FOUNDER Brijmohan Lall Munjal

CHAIRMAN Deya Varadh Sens
MD & CEO Pawan Munjal
Technical Director Mr. Sumihisa Fukuda
Non-executive Director Mr. Om Prakash Munjal
Non-executive Director Mr. Sunil Kant Munjal

Non-executive Director Mr. Masahiro Takedagawa

Non-executive Director Mr. Santoshi Matsuzawa (Alternate Director to
Mr.Takashi Nagai)
Non-executive & Independent Director Mr. Pradeep Dinodia
Non-executive & Independent Director Mr. Analjit Singh
Non-executive & Independent Director Dr. Pritam Singh
Non-executive & Independent Director Mr. Arun Nath Maira
Motorcycle models:

See also: Category: Hero Honda motorcycles

 Sleek
 Street
 Achiever
 Ambition- Ambition133, Ambition 135
 CBZ- CBZ, CBZ Star, CBZ Xtreme
 CD 100, CD 100 SS, Hero Honda Joy, CD Dawn, CD Deluxe, CD Deluxe (Self Start)
 Glamour- Glamour, Glamour F.I
 Hunk
 Karizma- Karizma, Karizma R, Karizma ZMR FI
 Passion- Passion, Passion Plus, Passion Pro
 Pleasure

41
 Maestro
 Splendor- Splendor, Splendor+, Splendor+ (Limited Edition), Super Splendor, Splendor
NXG, Splendor PRO
 Hero Impulse launched in 2011 after the separation of hero and Honda. Its India's first
off-road and on road Bike.
 Recently Hero launched a new bike Ignator for both Drum and Disc self cast.

Dealer profile:

Sri laxmi srinivasa auto mobiles pvt. Ltd. was started in the year December 12, 2005 as starting
workshop service station of HHML at Anakapalli, Visakhapatnam. In this company have a three
major departments with 56 employees, there are

1. Sales
2. Spares
3. Work shop

Department Manager No. of employees

Sales Mr. P.satish 12
Spares Mr. Seetha ramaraju 4
Work shop Mr. Vinod 40

42
43
 CHAPTER – IV

THEORETICAL FRAMEWORK OF THE STUDY

THEORETICAL FRAMEWOK OF THE STUDY

In common practice, marketing is the process of selling something at a shop or

market place, to some it has meant the study of individual and their movement in the market
place, to some it has meant the study of institutions and persons who make these products or
study of the economic contribution whereas to others it has meant the study of the behavior of
product movements and the way the persons involved move with them.

In the commodity approach to the study of marketing, the focus of study is a specific
study is a specific commodity; say wheat, ice, sugar, tea, fabrics, automobiles, et,. In this
approach, the subject matter discussion center around the specific commodity selected for the
study, and includes the souse and conditions of supply, nature and extent of demand, the
distribution channels used and the functions such as buying, selling, financing, advertising,

44
storage etc., performed by the various agencies. By repeating such studies in case of different
commodities give a complete picture of the entire field of marketing. The organization adopts
various approaches according to the necessity while fulfilling the social obligation of pollution
control; it follows the special approach and so on.

The study of marketing has thus, been approached in more than one way. However
these different approaches have immensely contributed to the evolution of the modern approach
and concept of marketing. To facilities the study, these different approaches may be broadly
classified as the commodity approach, the institutional approach and the managerial approach.
Besides this well recognized and established approaches of late, the recently developed societal
and systems approach have been attracting considerable attention. A brief description of these
approaches is given below, reflecting their respective faces and characteristics.

In this approach to the study of marketing, the entire marketing process is regarded not
as a means by which society met its own consumption needs, in it, the focus of study, therefore,
is the interactions between the various environmental factors and marketing decision and their
impact on the well being of the society. As such, in this kind of approach there is a significant

element of normative and substantial reliance on the value judgment based on an acceptance
value system in the society at a point of time.

Amount the recent approaches to the study of marketing; the one that has been emerging
considerable attention lately is the system approach. It is based on Von Bartalanffy’s general
system theory. He defined system as “set of objects together with the relationships among them
and their attributes. System thinking recognizes the inter-relations and inter-connections among
the components of marketing system in which products, services, money, and equipment and
information flow from marketers to consumers. These flows largely determine the survival and
growth capacities of a firm. The focus of system approach is therefore, the analysis of these
marketing flows and communication, which is, obviously consists of district channels and
feedback process namely sales repots.

45
 In this approach to study of marketing the focus is one of the studies of the various
middleman and facilitating agencies. The study includes their position in the distribution
channels the purpose of their existence, the functions performed and services rendered their
operating methods, the cost involved and the problems faced by them. In order to obtain a
comprehensive view of marketing, the study related to each study of institution.

In the managerial approach the focus of marketing study is on the decision making
process involved in the performance of the marketing functions at the level of the different
underlying concepts, decision influencing factors, alternative strategies, their relative
importance, strengths and weaknesses and techniques and methods of problem solving.

Marketing Strategy-Mix Outlook at Sri Laxmi srinivasa auto mobiles

The marketing-mix enables the company to satisfy the wants of its target markets
and to achieve its marketing goals. The design and later the operate ion of the marketing-mix
constitutes the bulk of the company’s marketing effort. The marketing-mix is one of the major
concepts of modern marketing.

Marketing-mix is the set of controllable marketing variables that the firm blends too
produce that response it wants in the target market. The marketing-mix consists of everything
that the firm can do to influence the demand for its product. Marketing-mix is the term that is
used to describe the combination of the four inputs that constitute the core of an organizations

46
 marketing system. These four elements are the product offering the price structural the
promotional activities and the distribution system. The four ingredients of the marketing-mix are
interrelated.

 Product:

Managing the product ingredient includes planning the right product or service to be
marketed by the company. Strategies are needed for hanging existing products, adding new ones,
and taking other actions that affect the assortment of products carried. Strategic decisions are
also needed regarding branding, packaging and other various product features.

 Price:

47
 In pricing, management must determine the right base pie for its products. It must then
decide on strategies concentrating discounts, freight payments, and many other price related
variables.

 Promotion:

Promotion is the ingredient used to inform and persuade the market regarding a company’s
products. Advertising, personnel selling and sales promotion are the major promotional
activities.

 Distribution:

Management’s responsibility is:

 To select and manage the trade channels though which the products will reach the right
market at the right time and
 To develop a distribution system for physically handling and transporting the products
through these channels.

Marketing-Mix

Product Mix Price Mix

Product variety List price

Quality Discounts

Design Allowances

48
 Features Payment period

Brand name Terms of credit

Packaging

Size

Target Market

Price Mix Price Mix

Channels Advertising

Coverage Personnel selling

Assortments Sales promotion

Locations Publicity

Product Policy

An effective product concept is the first step in the marketing-mix planning. Planning
component of the marketing-mix is a difficult, complex task.

A product is anything than an be offered to a market for attention, use of consumption

that might satisfy a want or need. Broadly, products consist of any thing that can be marketed,
including physical objects, services, persons, places, organizations and ideas.

NEW PRODUCT DEVELOPMENT

49
 New Product Development refers to certain of products, which are new to the market.
This is done by keeping in mind the customers needs and desire. From the company point of
view the new product development helps in gaining market share in that particular product.

PRICING POLICY

MEANING

Price may be defined as the value of the product attributes expressed in monitory terms
which a consumer pays or is expected to pay in exchange and anticipation of the expected or
offered utility. Price is, therefore, a link that finds consumers and the company. It helps to
establish a mutually advantageous economic relationship and facilitates the transfer of ownership
of goods and services from the company to buyers. However, price is not synonymous with
value and utility. It differs from both values is a quantitative measure of the exchange power of a
products. Both value and utility concepts are essential to the determination of price.

While “price is the value of product at distribution expressed in monitory terms”. The
managerial tasks involved in product pricing include establishing the pricing objectives,
identifying the price governing factors, ascertaining their relevance and relative importance,
determining product value in monitory terms and formulation of prime policies and strategies s
as to effectively employ pricing policies and strategies so as to effectively employ price as a
strategic instrument in marketing a company’s products. This chapter attempts to discuss some of
these tasks. However, before we proceed with this discussion, it would be appropriate to
understand the role of pricing and the economist’s perspective of it. It would help us in
developing the appropriate backdrop for further understanding.

ROLE:

Pricing as a marketing function has an important role to play both at the macro and
micro levels. In the economic development of a country, the major contribution of pricing may
be discerned in the allocation and the re-allocation of source resources in ventures, which are

50
profitable for commanding. According to Khera “pricing policy no doubt is a potential weapon
especially in a planned economy like over where it can be used in such a way as to bring about a
proper allocation of resources according to planned priorities”. In an economy, resources may be
allocated and re-allocated by a process of price reduction and increase. For example when supply
of goods exceeds demand a reduction in price encourages consumption and discourages
production leading to transfer of resources to other profitable ventures-like-wise, when demand
exceeds supply, an increase in price discourages consumption and encourages production leading
to transfer of resources from less to more. Such a competitive system characterized by flexible
prices leads in principle, to maximum economic efficiency.

However, the contribution of pricing at the level of a firm with which we have been
largely concerned throughout this text is more relevant and tangible. It plays a far greater role in
the marketing mix of a company and significantly contributes to the effectiveness and success of
the marketing strategy. A recent research study revealed that a very large number of companies
83% ranked pricing as the most important variable, next only to product, which affected the
success or failure of the enterprise. Its contributions may be briefly described as follows:

DEMAND REGULATOR

Marketing management may regulate demand for its products by employing price as
an instrument. For e.g., when there is need for promoting demand, say n account of surplus
production capacity, product price may be reduced, or when there is need for discouraging
demand, say, on account of hampered input availability, product price may be increased. In
developing country such as India, where marginal value of money is relatively more than
developed countries price is a more potent instrument of regulating demand. It is also more
relevant in implementing the de-marketing strategy to cope with the rising demand for products.

51
COMPETITIVE WEAPON

Price is an important competitive weapon in the marketing armory of a company.

Whenever a competitor launches a promotion campaign, introduces a new product or reduces its
price to enlarge its market share it is not unusual to find the company being placed in a
disadvantageous position. The company often loses its market to competitors. In such a situation
a reduction in price or suitable change in the price structure coupled with other strategic moves,
considerably helps the company in successfully meeting competitive man oeuvres. Price
determines, the profitability of a company by shopping the level of its sales revenue other things
being constant, a rise or fall in the price of products brings about the rise or fall in the
profitability by increasing or decreasing the sales revenue. It’s difficult to imagine a firm whose
profitability is unaffected by the prices it charges. When there are reveals, small changes in price
could often result in major changes in profitability.

Sales promotion

This is very modern/important element of the pharmaceutical marketing. This includes

deal offers to the wholesalers and the retailers,

Who have reached above the yearly sales target they will be getting 5 percentage on
sales. Compensation=salary incentives.

CUSTOMER SATISFICATION

Customer Value

Customer delivered value is the difference between total customer value and total
customer cost. Total customer value is the bundle of benefits customers expect from a given
product or service. Total customer cost is a bundle of costs customers expect to incur in
evaluating, obtaining, using and disposing of the product or service.

52
Customer Satisfaction

Satisfaction is person’s feelings of pleasure or disappointment resulting from comparing a

product’s perceived performance (or outcome) in relation to his or her expectations.

Perceived performance

As the definition makes clear, satisfaction is a function of perceived performance and

expectations. If the performance falls short of expectations, the customer is dissatisfied. If the
performance matches expectations the customer is satisfied. If the performance exceeds
expectations, the customer is highly satisfied or delighted.

Many companies are aiming for high satisfaction because customers who are just satisfied
still find it easy to switch when a better offer comes along. These who are highly satisfied are
much less ready to switch. High satisfaction or delight creates an emotional bond with the brand,
not just a rational preference. The result is high customer loyalty. Xerox’s senior management
believes that a very satisfied customer. A very satisfied customer is likely to stay with Xerox
many more years and buys more than a satisfied customer will buy.

Total Customer Satisfaction

Some of today’s most successful companies are raising expectations and delivering
performance to match. These companies are aiming for TCS-Total Customer Satisfaction. Xerox,
for example, guarantees “Total Satisfaction” and will replace at its expense any dissatisfied
customer’s equipment with i9n a period of three years of a purchase. Cigna advertises “We’ll
never be 100% satisfied until you are too”. And one of Honda’s ads says: “One reason our
customers are so satisfied is that we are not”. Nissan invites potential infinite buyers o drop in for
a “guest drive” (not a “test drive”), because the Japanese word for customer is “honored guest”.

53
Tools for tracking and measuring customer satisfaction

Complaint and suggestion systems

A customer –centered organization makes it easy for its customers to deliver suggestions
and complaints. Many restaurants & hotels provide forms for guests t report likes and dislikes.
Some customer-entered companies, General Electricals, Whirlpool establish hot lines with toll
free telephone numbers. Companies are also adding web pages and e-mail to facilitate two-way
communication. These information flows provide companies with many good ideas and enable
them to act quickly t resolve problems.

Customer satisfaction surveys

Studies show that although customers are dissatisfied with one out of every four purchases,
less than 5% of dissatisfied customers complain. Most customers will buy less or switch to
another brand. Complaint levels are thus not a good measure of customer satisfaction.
Responsive companies measure customer satisfaction directly by conducting periodic surveys.
They send questionnaires or make telephone calls too a random sample f recent customers. They
also solicit buyer’s views on their competitor’s performances.

While collecting customer satisfaction data, it is also useful to ask additional questions to
measure repurchase intentions, this will normally be high if customer satisfaction is high. It is
also useful to measure the likelihood or willingness too recommend the company and brand to
others. A high positive word-of-mouth score indicates that the company is producing high
customer satisfaction.

Ghost shopping

54
 Companies can hire persons to pose as potential buyers too report on strong and weak
points experienced in buying the company’s & competitor’s products. These mystery-shoppers a
even test whether the company’s sales personal handle various situations well. Thus a mystery
shopper can complain about a restaurant’s food to test how the restaurant handles this complaint.
Not only should companies hire mystery shoppers, but managers too should leave their offices
time to time, enter company and competitor sales situations where they are unknown and
experience firsthand treatment they receive as customers. A variant of this is for manager to
phone their own company with questions and complaints to see how the calls are handled.

Last customer analysis

Companies should contact customers who have stopped buying or who have switched to
another supplier to learn why this happened. When IBM loses a customer, it mounts a thorough
effort to learn where it failed. Not only it is important to conduct exit interviews when customers
first stop buying, but it is also necessary to monitor

The customer defection rate. If it is increasing, this clearly indicates that the company is
failing to satisfy customers.

Attracting and retaining customers

Today’s customers are harder to please. They are smarter, more price conscious, more
demanding, less forgiving and approached by many competitors with equal or better offers. The
challenge, according to Jerffrey Gitomer, is not too produce satisfied customer, several
competitors an do this. The challenge is to produce loyal customers.

Companies seeking to grow their profits and sales have to spend considerable time and
resources searching for new customers. Customer acquisition requires substantial skill in lead
generation, lead qualification and account conversion. To generate leads, the company develops
ads and places them in media that will reach new prospects; it sends direct mail and makes phone
calls to possible new prospects; its sales people participate in trade shows where they might find
new leads and so on. All this activity produces a list of suspects. The next task is to qualify
which of the suspects are really good prospects and this is done by interviewing them, checking
on their financial standing and so on.

55
 The prospects may be graded as hot, warm and cool. The sales people first contact the
hot prospects and work on account conversion, which involves making presentation, answering
objections and negotiating final terms.

It is not enough to be skillful in attracting new customers, the company must keep
them. Too many companies suffer from higher customer attrition rate; they gain new customers
only to lose many of them. It is like constantly adding water to a leaking pot. Today’s companies
must pay closer attention to this customer defection rate (the rate at which they lose customers).

There are four steps in trying to reduce the defection rate

1. First, the company must define & measure its retention rate.
2. Second, the company must distinguish the causes of customer attrition and identify those
that can be managed better.
3. Third, the company needs to estimate how much profit it loses when it loses customers.
4. Fourth, the company needs to figure out how much it would cost to reduce the defection
rate.

Need For Customer Retention

Unfortunately, most marketing theory and practice enter on the art of attracting new
customers rather than on retaining existing ones. The emphasis traditionally has been on making
sales rather than building relationships; on pre-selling & selling rather than building
relationships; on pre-selling and selling rather than caring for the customer afterward.

The key to customer retention is customer satisfaction. A highly satisfied customer;

1. Stays loyal longer

56
2. Buys more as the company introduces new products and upgrades existing products
3. Talks favorably about the company & its products.
4. Pays less attention to competing brands and advertisements and is less sensitive to price.

 Offers product or service ideas to the company

 Costs less to serve than new customer because transactions are reutilized

Today more and more companies are recognizing the importance of satisfying and
retaining current customers. Here are some interesting facts bearing on customer
retention.
1. Acquiring new customers can costs five times more than the cost involved in satisfying
& retaining current customers. It requires a great deal of effort to induce satisfied
Customers to switch away from their current suppliers.
2. The average company loses 10% of its customers each year.
3. A 5% reduction in customer defection rate can increase profits by 25% to 85%
Depending the industry.
4. The customer profit rate teds to increase over the life of the retained customer.

CHAPTER – V

57
DATA ANALYSIS & INTERPRETATION

58
 DATA ANALYSIS & INTERPRETATION

1. HOW DO YOU PURCHASE YOUR BIKE:

DATA:

NO.OF PERCENTAGE
PURCHASE TYPE RESPONDENTS (%)
BY CASH 36 45
THOUGH FINANCE 44 55

Analysis:

Interpretation:
Above graph shows that 45% of respondents are buy a bike through cash and remaining 55% of
respondents buy a bike through finance.

59
2. Did you receive the vehicle on promised date and time?

DATA:

PROMISED NO.OF PERCENTAGE

DATE, TIME RESPONDENTS (%)
YES 65 81.25
NO 15 18.75

Analysis:

Interpretation:

Above graph shows that 18.75% of respondents are not receiving their bike in time and
remaining 81.25% of respondents are receiving their bike in promised date, time.

60
3. Did you receive prompt response at workshop reception :

DATA:

PROMPT NO.OF PERCENTAGE

RESPONSE RESPONDENTS (%)

YES 68 85

NO 12 15

Analysis:

Interpretation:

Above graph shows that 15% of respondents are not receiving the prompt response and
remaining 85% of respondents are receiving prompt response to the workshop reception.

61
4. How much time you had waited till attended the technical person :
DATA:

ATTEND THE TECHNICAL NO.OF

PERCENTAGE (%)
PERSON RESPONDENTS
HOURS 14 17.5

MINUTES 59 73.75

SECONDS 7 8.75

Analysis:

Interpretation:

Above graph shows that 16% of respondents waited in hours of time to attend a technical
person, 75% of respondents waited a minutes of time to attend a technical person and the
remaining 9% of respondents are waited a seconds of time.

62
5. Would you recommend HERO to you friends :
DATA:

RECOMMEND NO.OF
HEROHONDA RESPONDENTS PERCENTAGE (%)
YES 59 73.75
NO 21 26.25

Analysis:

Interpretation:

Above graph shows out off 80 respondents, 73.75% of respondents are recommended HERO to
their friends, and remaining 26.25% of respondents are not recommended HERO to their
friends.

6. WOULD YOU REPURHASE HERO BIKE :

63
DATA:

NO.OF
Repurchase RESPONDENTS PERCENTAGE (%)

YES 75 93.75

NO 5 6.25

Analysis:

Interpretation:

Above graph shows out off 80 respondents, 93.75% of respondents are repurchase HERO bikes,
remaining 6.25% of respondents are not interested to repurchase HERO bike.

64
7. At the purchase time, are you satisfied with the financial desk, how
much time it took to take delivery?

DATA:

purchase time NO.OF

PERCENTAGE (%)
delivery RESPONDENTS
1hour 6 7.5
1/2day 37 46.25
1day 29 36.25
more than 1day 8 10

Analysis:

Interpretation:

65
In the above graph shows highest percent (36%, 46%) of respondents are take a delivery their
bike on 1/2day before, remaining respondents are take a delivery their bike on 1day to more
than 1day.

8. ARE YOU SATISFIED WITH THE FINANCIAL DESK?

DATA:

SATISFIED WITH NO.OF PERCENTAGE

FINANCIAL DESK RESPONDENTS (%)
YES 62 77.5
NO 18 22.5

Analysis:

Interpretation:

66
In the above graph 77.5% of respondents are satisfied with financial desk and remaining 22.5%
of respondents are not satisfied with the financial desk.

9. ARE YOU SATISFIED WITH BILLING?

DATA:

SATISFIED WITH NO.OF PERCENTAGE

BILLING RESPONDENTS (%)
YES 62 77.5
NO 18 22.5

Analysis:

Interpretation:

67
In the above graph 77.5% of respondents are satisfied with billing, and remaining 22.5% of
respondents are not satisfied with the billing.

10.WHICH MODEL YOU MOSTLY LIKE IN HERO?

DATA:

NO.OF PERCENTAGE
MODEL YOU LIKE
RESPONDENTS (%)
SPLENDER 25 31.25
PASSION 12 15
CBZ 7 8.75
HUNK 5 6.25
GLAMOUR 23 28.75
PLEASURE 8 10
Analysis:

Interpretation:
Above graph shows most of the respondents choose the models glamour and splendor.

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11. How did you know about HERO bikes?

DATA:

NO.OF PERCENTAGE
Know about Hero RESPONDENTS (%)

Print media 12 15

Electronic media 48 60

Friends 20 25

Analysis:

Interpretation:

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In the above graph shows out of 80 respondents, most of the respondents (60%) know about
Hero bikes through Electronic media, 15% of respondents are know through Print media and
remaining 25% of respondents are know through their friends.
12.Why did you prefer HERO bike?

DATA:

No. of
Prefer hero respondents percentage
style 18 22.5
compatible 39 48.75
cost safety 23 28.75

Analysis:

Interpretation:

70
It is observed that 48.5% has selected the Hero bike for its compatible, 28.75% has seen the cost
and prefer the bike, and remaining 22.5% have prefer style in Hero bikes.

13.What is the difference between HERO bike and other bikes?

DATA:

No. of
Difference respondents percentage
style 18 22.5
Condition 33 41.25
Low maintenance 29 36.25

Analysis:

Interpretation:
In the above graph shows out of 80 respondents, 41.25% respondents has seen the condition
between Hero bikes and other bikes, 36.25% of respondents has said that it is Low maintenance

71
Hero bikes is possible, remaining 22.5% of respondents has seen the style difference between
Hero and other bikes.

CHAPTER – VI

 SUMMARY
 FINDINGS
 SUGGESTIONS
 CONCLUSION

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 6.1 SUMMARY

Automobile is one of the largest industries in global market. Being the leader in
product and process technologies in the manufacturing sector, it has been recognized as one of
the drivers of economic growth.

Two-wheeler segment is one of the most important components of the automobile

sector that has undergone significant changes due to shift inn policy environment the two –
wheeler industry has been in existence in the country sine 1955.It consists of three segments viz.
Scooters, motorcycles and mopeds. According t the figures published by SIAM, the share of
two-wheelers in automobile sector in terms of units sold was abut 80 percent during 2003-04.
This high figure itself is suggestive f the importance of the sector.

The major set of reforms was launched inn the 1991 in response to the major
macroeconomic crisis faced by the economy. The industrial policies shifted from a regime of
regulation and tight control to a more liberalized and competitive era. The composition of the
two-wheeler industry has witnessed sea changes in the post-reform period.

With the two-wheeler market, especially the motorcycle market, becoming extremely
competitive and the life cycle of products getting shorter, the ability to offer new models to meet
fast changing customer preferences has become imperative. In this context, the ability to deliver
newer products calls for sound technological backing and this has become one of the critical
differentiating factors among companies in the domestic market. This, the players have increased
their focus on research and development with some having indigenously developed new models
as well as improved technologies to cater to the domestic market.

73
 In a effort t satisfy the distinct needs of consumers, producers are identifying emerging
consumer preferences and developing new models For instance, In the motorcycles segment,
motorcycles with engine capacity over 150cc, is a segment that has witnessed significant new
product launches and hence, become more competitive. The products in this segment cater for
style conscious consumers. Quite a few players are developing models combining features such
as higher engine capacity” optimum mix of power and performance, and superior styling.

However, the extent of shift to these products would depend on the positioning of such
products in terms of price. The industry has many major players like Hero Motocorp, Bajaj auto,
Honda motors, TVS motors, LML India, Yamaha motors etc. Hero enjoys market leadership
followed by Bajaj Auto in Two-wheeler segment.

The Hero Motocorp is amongst the top 10 business houses in India. Its footprint
stretches over a wide range of industries, spanning automobiles (two-wheelers), the group
flagship company, Hero Motocorp, is ranked as the world’s third largest manufacturer and the
Hero is well-known in over a some countries like USA and Asian countries. Hero Motocorp has
a vast network of about 1500 service centers and 500 dealers all over India. It has majorly 2
manufacturing plants located at Haryana and New Delhi.

It is not enough to be skillful in attracting new customers, the company must keep them.
Too many companies suffer from higher customer attrition rate; they gain new customers only to
lose many of them. It is like constantly adding water to a leaking pot. Today’s companies must
pay loser attention to this customer switch over rate. (the rate at which they lose customers).

Some of today’s most successful companies are raising expectations and delivering
performance to match. These companies are aiming for TS-Total Customer Satisfaction. Xerox,
for example, guarantees “Total Satisfaction” and will replace at its expense any dissatisfied
customer’s equipment within a period of three years after purchase. Cigna advertises “we’ll
never be100% satisfied until you are too”. And one of Honda’s ads says; “One reason our
customers are so satisfied is that we are not”. Nissan invites potential infinity buyers to drop in
for a “guest drive” (not a “test drive”), because the Japanese word for customers is “honored
guest”

74
 The key to customer retention is customer satisfaction. A highly satisfied customer
stays loyal longer, talks favorably about the company and its products; offers product or service
ideas to the company and costs less to serve the new customers. Today more and more
companies are recognizing his importance of satisfying and retaining current customers.
In view of the organization’s requirement now abut the level of its customers satisfaction, the
study is conducted in Hyderabad region which can be of little help in identifying the customer’s
expectations and the prevailing gap between expectations and reality.

6.2 FINDINGS

1. Hero has strong image in the minds of customers.

2. Major portion of the customer’s satisfaction is linked to the bike features and price.
3. Company’s promotional activities also play a vital role in attracting the customers.
4. The schemes offered by the company are not in a position to attract a greater pool of
customer satisfaction.
5. Quite a good percent of the people are satisfied with the services offered by the dealers
and company.
6. Customers have a great deal of satisfaction with spare parts availability and low cost of
maintenance.
7. Customers feel that the service stations are far from their places and they are not highly
accessible.
8. Major numbers of people are looking forward for more new models from the company
with improved efficiency.

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 6.3 Suggestions

1. Hero two wheelers have to improve its customers support service for increasing the
customer loyalty.
2. Hero two wheelers have to improve its brand image with the help of new promotional
techniques.
3. In order to attract the customers, Hero two wheelers have to adopt credit policy to the
loyal customers.
4. Hero two wheelers have to come up with new promotional techniques like attractive
advertising, creating awareness to the people about the offers.
5. Hero two wheelers have to improve their services regarding accurate supply of spare
parts, repair services and after sale services.
6. Hero two wheelers has to open new branches in remote areas so as to make avail of their
products and services.
7. Hero has to locate service stations in the reach of the customers as it help the customer’s
to save time and money.

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 6.4 CONCLUSION

As many people are not highly satisfied with the schemes offered by the company, the
company should see the possibility of redressing its strategies to develop schemes which are
customer centric.

The service stations are not in the reach of customers. This is a great problem from
customer’s point of view. In order to pacify this problem, the company should go for more
number of dealers and service stations where they are very much required.

The company should maintain its current level of promotional activities so as to attract
more number of customers.

Customer centric approaches must be adopted at dealer level functions.

Customer should be encouraged to give suggestions/complaints against any aspect so as

to make them involve and feel that they are a part and asset of the company.

More number of bikes with varied models must be launched periodically to retain
customers.

If possible, the present/current customers must be informed about new launches in

person (by mail/phone) which increases loyalty of customers.

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 Though the company goes for high-end price bikes, it should never leave the low-end
price bikes in order to satisfy varied customers.

ANNEXURE

QUESTIONNAIRE

Customer Details:

Name:

AGE :

Address & Contact no:

Vehicle REG NO:

Year of Purchase:

1. How to purchase your bike?

(A) By cash (B) Through finance

2. Did you receive the vehicle on promised date & time?

(A) Yes ( ). (B) No ( )

3. Did you receive prompt response at workshop reception?

78
(A) Yes ( ). (B) No ( )

4. How many minutes you had waited till attend technical person?

(A) Hours (B) Minutes (C) Seconds

5. Would you recommend Hero bike to your friends?

(A) Yes ( ). (B) No ( )

6. Would you repurchase the HERO bike?

(A) Yes ( ). (B) No ( )

7. At the purchase time, are you satisfied with the financial desk, how much time it took to take
delivery?

(A) 1hour (B) 1/2day (C) 1day (D) much more time.

8. Are satisfied with financial desk?

(A) Yes ( ). (B) No ( ).

9. Are satisfied with billing?

(A) Yes ( ). (B) No ( ).

10. Which model you mostly like in Hero?

(A) SPLENDER (B) PASSION (C) CBZ (D) HUNK (E) GLAMOUR (F) PLEASURE

11. How did you know about HERO bikes?

(A) Print media (B) Electronic media (C) Friends

12. Why did you prefer HERO bike?

(A) Style (B) Compatible (C) Cost

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13. What is the difference between HERO bike and other bikes?

(A) Style (B) Condition (C) Low maintenance

BIBLIOGRAPHY

BOOKS:

1. Donald.R.Cooper & Pamela.S.Schindler- Business Research Methods

2. Donald.S.Tull & Kevinlane Keller – Marketing Research –Measurement & Method- Prentice
Hall India

3. Philip Kotler & Kevinlane Keller – Marketing Management – Pearson Education

Journals:

1. Survey of Indian Industry-2013

The Hindu Publications

2. Auto India

Websites:

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 www.HeroMotocorp.com
 www.wikipedia.com
 www.autoindia.com

81