Final Project

EFFECTIVENESS OF MARKET SEGMENTATION
CHAPTER-1
INTRODUCTION
1.1 PART - A
ABOUT THE INDUSTRY
The Indian two-wheeler contributes the largest volume among all the segments in
automobile industry. Though the segment can be broadly categorized into 3 sub-segments
viz. scooters, motorcycles and mopeds; some categories introduced in the market are a
combination of two or more segments e.g. scooters and step-thru. The market primarily
comprises five players in the two-wheelers segment with the most of the companies having
foreign collaboration with well-known Japanese firms earlier. But most of the companies are
now planning 100% subsidiaries in India. And growth anticipated is higher than the 16
percent achieved in the past 10 years.
The automobiles sector is divided into four segments-two wheelers(mopeds, scooters,

motorcycles and electric two-wheelers), passenger vehicles(passenger cars, utility vehicles,
multi-purpose vehicles), commercial vehicles (light and medium heavy vehicles), and three
wheelers (passenger carriers and goods carriers).
The industry is one of the key drivers of economic growth of the nation, since the
globalization of the sector in 1991 and the subsequent opening up of 100% FDI through
automatic route; Indian automobile sector has come a long way. Today, almost every global
auto major has set up facilities in the country.
The world standings for the Indian automobile sector, as per the confederation of the Indian
industry, are as follows;
 Largest three-wheeler market

 Second largest two-wheeler market
 Tenth largest passenger car market
 Fourth largest tractor market
 Fifth largest commercial vehicle market
 Fifth largest bus and truck segment
RNS FIRST GRADE COLLEGE Page 1

The sector has shown a sluggish growth of 12% in 2012. The trend is likely to stay with a
10% growth outlined for 2013 citing high ownership costs (fuel costs, cost of registration,
excise duty, road tax) and slow rural income growth. Solid but cautious growth is expected
over the next few years. However, from a long-term perspective, rising incomes, improved
affordability and untapped markets present promising opportunities for automobile
manufactures in India. According to Macquarie equities research, sale of passenger vehicles
is expected to double in the next four years.
Two Wheeler & its role in Indian Context:
As the cities grow & suburbs expand, transportation needs becoming more & more
acute, with mounting pressure on its public transportation for which two wheelers are ideal.
The two-wheeler industry today has a significant role in the Indian economy, with an
annual turnover of Rs. 9000 crores and compound average growth of 10%. In recent years, it
is of the few industrial sectors in the growth phase today considers personal transportation as
one of the basic needs.
The two-wheeler industry basically comprises mopeds, scooters and motorcycles. Mopeds
are basic entry-level products aimed at lower/middle income groups, offering company. this
category dominated by TVS SUZUKI, which has a market share of 50% today. The other
major players in this segment include KINETIC ENGG., HERO MOTORS and BAJAJ
AUTO.
Scooters which found largest segment in the industry (37 percent) is dominated by BAJAJ
AUTO. It is however fcing stiff competition from LML, which offers better style and
technology to the Indian customers. However, dominance of this of this category has been
declining because of shift in the customer preferences.
Major part of the growth in the two-wheeler industry has come from motorcycle especially,
the Indo-Japanese 100cc motorcycles, which are considered, fuel efficient, reliable and
suited for rough roads.
Scooters also growing at a fast phase and are being increasingly perceived as a better option
providing convenience and motor style, by urban customers. In this category, TVS scooty
holds a dominant market share.

With sales of over three million vehicles, India is the second largest two-wheeler market in
the world. Vehicle has become a necessity for day-to-day busy life, with the accelerated
industrial and business activity in a liberalized environment. However, given the limited
purchasing power and to high cost of cars, majority of the middle class vehicle users prefer
two wheelers.
With sales of over million vehicles, India is the second largest two wheelers market in the
world. China is the market leader with around 51 percent of the Asia Market, India, and
Thailand: Indonesia & Taiwan are the other key markets for two wheelers with market share
of 19 percent, 10 percent, 9 percent and 5 percent respectively.
In the last four to five years, the two-wheeler market has witnessed a market shift towards
motorcycles at the expense of scooters. In the rural areas, consumers have come to prefer
sturdy bikes to withstand the bad road conditions. In the process the share of motorcycle
segment has grown from 48% to 58%, the share of scooters declined drastically from 33% to
25%, while that of mopeds declined by 2% from 19% to 17% during the year 2000-01. The
Euro emission norms effective from April 2000 led to the existing players in the two-stroke
segment to install catalytic converters. 4-stroke motorcycles are now replacing all the new
models. Excise duty on motorcycles has been reduced from 32% to 24%, resulting in price
reduction, which has aided in propelling the demand for motorcycles. Fierce competition has
also forged players to cut prices of certain models.
Competition has intensified ever the last couple of years altering the dynamics in the
motorcycle tent with various companies planning to cash in on this spun in demand by
calling off their JVs Suzuki Motors planning to break off with TVS.
Recently, Honda Corporation of Japan announced intentions to set up a 100% subsidiary to

manufacture scooters and motorcycles. Other players in the two wheeler industry include
Bajaj Auto Lid., Kinetic motor Co.Ltd. LML and Escorts Yamaha in boosting sales of 2-
wheelers, since 80% of the two-wheelers are credit stimulated.
The two wheeler industry is passing through a critical but interesting phase. For many years,
it when it started slowing down. The impact was really (MI) felt in the next year when the
overall growth was hardly two percent. This was also possible only because the motorcycle
segment showed a healthy growth of 15 percent. The scooter segment went down by 3
percent and mopeds by 6 percent.

Another highlight is that the motorcycle sales have surpassed the scooter sales for the first
time in 1998-99. Until then, motorcycle sales were always trailing behind.
The net result is that motorcycles now account for 41 percent of the two-wheeler market,
while scooters account for 36 percent. Mopeds have been able to hold their own at about 21
percent.
GROWTH OF MOTORCYCLES
It is therefore not surprising that every major player is trying to get into the Motorcycle
market to have a piece of the cake.
Hero Moto Corp Ltd is indisputable the leader with 38 percent share followed by Bajaj with
27 percent (includes M-80), TVS at 19 percent and Escorts at 13 percent. Now LML and
Kinetic have announced their plans to manufacture motorcycles, which are likely to come in
the market by next year. The battle is expected to be fierce but the consumer will be the
greater beneficiary.
The growth in motorcycle is slowly losing its hold. It is considered a family vehicle but
perhaps there is competition from the second hand car market where prices have fallen down
rapidly. A 1992 Maruti 800 is now available for just 70,000.
The scooter manufactures have to watch this phenomenon and bring our many new product
variants in the right price slots to sustain their shares in the market. The moped market has
been steady with an average growth of 3 percent. It is dominated by TVS which holds 48
percent market share followed by Kinetic and Majestic Auto at 23 percent and 18 percent
respectively.
In each segment, there is a wide gap between the first two contenders, which makes their
product positioning and marketing strategies most interesting. The two wheelers market
seems to be maturing. There are the usual their conventional segment of scooters, mopeds
and motorcycles. Two new segments are being created.

NEW SEGMENTS
A Step is through segment like Kinetic K4-100, Honda Street, Bajaj M-80, which is
quite close to the motorcycle segment. The other segment is scooterette or mini scooters in
which vehicles such as Kinetic SX/Style, TVS Scooty, Hero Winner, Bajaj
Şunny/Spirit/Safire and LML trendy can be considered. These are vehicles under 75 cc and
largely targeted at the youth market such as college students, young boys and girls and new
couples. They get the advantage of lower excise duty at 16 percent as compared to 24
percent applicable over 75 cc. The trend is towards push button start vehicles.
Among the majors in the two-wheeler industry, first quarter figure for the current
year of some players has been encouraging. The company sold 313,303 units last month as
compared to 325,360 units in the same month last year. With this. BAL has recorded as 87
percent growth in the motorcycle segment in the first quarter with sales of 130,577 units
(93631 units in the corresponding period last year) BAL estimates market share of the first
quarter-Geared scooters 75.9% unguarded scooters. 16.5%. Step-thrus-72.3% and
motorcycle-20.3%
In the scooters segment, sales of Bajaj Sunny and Bajaj Spirit increased by 170
percent to 7,876 units. First quarter sales registered an impressive 78 percent growth with
sales of 1956210995 units). The overall sales grew by 9.3 percent in the quarter when the
company sold 3.24 lakh vehicles.
BAL however reported a decline in sales of scooters by 15.6 percent in the first
quarter. The company hopes to increase the share of motorcycle in its product basket from
18 percent last year to 30 percent by 2003-04
Hero MotoCorp Ltd enjoys tremendous brand equity in the motorcycle segment.
Kinetic Motors, another important player, managed to grow in 19992000 when the scooters
segments a whole slipped by around 5 percent. TVS Suzuki, a motor Two-wheeler market,
has reported a growth of 13 percent in the first quarter period and sold 2.19 lakh units. Sales
of motorcycles and scooters were up by 18 percent and that of mopeds by 8 percent over the
same period last year.

The current year therefore promises to be a testing time for the two-wheeler industry.
Industry pundits feel that an overall growth rate of 5 percent should be possible as against 9
percent projected earlier. The sales volume therefore is expected to be around 3.8 million in
2000-2001.
DRAMATIC CHANGES:
Hero Moto Corp Is now world's largest manufacturer of two-wheelers. The company has
benefited from the demand shift to motorcycles, as it focuses solely on this product segment
(although has a product called Pleasure in Scooter segment),With fuel efficiency and riding
comfort as the main selling paints. HMC has been able to address a wide market and post
robust sales growth even after its separation from the Japanese major Honda.
The coming years will see increasing competition due to the party in products and price. The
only differentiators will be technology, quality, product range and service. Imaginative
marketing will emphasize relationship building, customer satisfaction and relationship. All is
exploring new techniques such as direct marketing and institutional sales. Some of them are
taking the vehicle actually to the customer's doorstep. Now the customer is the king.
HISTORY
India is the second largest manufacturer and producer of two-wheelers in the world. It stands
next to Japan and China in terms of the number of two-wheelers produced and domestic
sales respectively. This distinction was achieved due to variety of reasons as if respective
policy followed by the Government of India towards the passenger car industry, rising
demand for personal transport, inefficiency in the public transportation system ete,
In Indian two-wheeler, industry made a small beginning in the early 50s when Automobile
Products of India (API) started manufacturing scooters in the country. Until 1958, API and
Enfield were the sole producers
In 1948. Bajaj Auto began trading in imported Vespa scooters and three wheelers. Finally, in
1980, it setup a shop to manufacture them in technical collaboration with Piaggio of Italy.
The agreement expired in 1971.

In the initial stages, API it was later overtaken by Bajaj Auto dominating the scooter
segment. Although various Government and Private enterprises entered the fray for scooters,
the only new player that has lasted until today is LML.
Under the regulated regime, foreign companies were not allowed to operate in India. It was a
complete seller market with the waiting period for getting a scooter from Bajaj Auto being as
high as 12 years.
The motorcycle segment was no different, with only three manufacturers via Enfield, Ideal
Java and Escorts. While Enfield bullet was a four-stroke bike. Jawa and the Rajdoot were
two-stroke bikes. Enfield 350cc bikes and Escorts 175 co bike initially dominated the
motorcycle segment.
The two-wheeler market was opened to foreign competition in the mid 80's. And then the
market leaders-Escorts and Enfield-were caught unaware by the onslaught of the 100 cc
bikes of the four Indo Japanese joint ventures. With the availability of fuel-efficiency low
power bikes, demand swelled resulting in Hero Honda -- the only producer of four-stroke
bikes (100cc category), gaining a top slot.
The first Japanese motorcycles were introduced in the early eighties. TYS Suzuki and Hero
Honda brought in the first two-stroke and four-stroke engine motorcycles respectively. These
two players initially started with assembly of CKD kits, and later on progressed to
indigenous manufacturing. In the 90's the major growth for motorcycle segment was brought
inby Japanese motorcycles, which grew at a rate Of nearly 25% CAGR In the last five years.
The industry had a smooth ride in the 50's, 60's and 70's when the government prohibited
new entries and strictly controlled capacity expansion. The industry saw a sudden growth in
the 80's. The industry witnessed a steady growth of 14% leading to a peak volume of 1.9mm
vehicles in 1990.
The entry of Kinetic Honda in mid-eighties with a variomatic scooter helped in providing
ease of use to the scooter owners. This helped in inducing youngsters and working women
towards buying scooters, who were earlier, inclined towards moped purchases. In line with
this, the scooter segment has consistently lost its part of the market share in the two-wheeler
market.

In 1990, the entire mobile industry resulted saw a drastic fall in demand. This resulted in a
decline of 15% in 1991 and 2 in 1952. g in the production lens of 0 In vehicles. Barring Hero
Honda, all the major producer suffer from recession in FY93 and FY94 Hero Honda showed
a marginal decline in 1992.
The reasons for recession in the sector were the item is in fuel price, high input costs and
reduced purchasing power due to significant rise in general price level and credit crunch in
consumer financing Factors as if increased production in 1992, due to new entrants coupled
with the recession in the industry resulted in either company reporting losses or fail in profits
India is one of the very few countries manufacturing three wheelers in the world. It is the
world's largest manufacturer and seller of three wheelers. Bajaj Auto commands a monopoly
in the domestic market with a market share of above 80% Bajaj Tempo, Greaves Ltd and
Scooters in India share the rest.
The total number of registered two-wheelers and three-wheelers on road in India, as on

March 1998 was 27.9nm and 1. 7nin respectively. The two-wheeler population has almost
doubled in 1996 from a base of 12.6mn in 1990.
PENETRATION OF TWO-WHEELERS:
On abuse of around 28mn vehicles on Indian roads and around 175 households, there were
only 160 motorized two-wheelers per thousand households in FY98. This compares poorly
with countries like Thailand where it is around 600 per thousand households. Also with a
household size of 5.5 persons and more than one wage camera in about 60% of the
households the potential for a second vehicle demand is also good.
The number of households in the low-income group has fallen since FY86 and has been
more pronounced in the post-reform period. On the other hand, the numbers of households in
the middle, upper middle and high-income groups that form the consumer base for two
wheelers, have increased. Their share of the total number of households has increased from
10.6% in FY88 to 20.5% inFY96. This rising income profile however, has been more
pronounced in the urban areas as average annual growth in industry surpassed that of
agriculture in the period FY93 to FY96.

Major Developments & Investments
 Tata Motors Ltd plans to invest about £30 million (USD 49.17 million) in the
National Automotive Innovation Campus (NAICS) for research and development
(R&D). The investment would be made through its subsidiary Tata Motors European
Technical Centre (TMETC) at the University of Warwick campus,UK
 Volvo India Pvt Ltd plans to set up truck and bus manufacturing facility in Malur,
Karnataka, with an investment of Rs 974 crore (USS 158.32 million). The facility is
expected to give employment to about 2.125 people.
 Manufacturing companies in Japan continue to view India as the top destination for
investments-over China, Thailand, Vietnam, Brazil and Indonesia-in the next three
years, according to Mr. Masanori Nakano, Consul General of Japan in Chennai.
 Tata Motors-owned Jaguar Land Rover (JLR) has entered into an agreement with the
state of Rio de Janeiro to build a manufacturing plant in Brazil with an investment of
Rs 4.626 crore (USD 751.95 million).
 JBM Auto has formed a joint venture (JV) with Italian bus maker Bredamenarinibus
to manufacture luxury buses in India. The Indo-Italian venture plans to set up a plant
at Kosi, near Faridabad in Haryana, and produce 2,000 buses every year initially, at
an investment of Rs 500 crore (USS 81.27million)
 Mahindra & Mahindra (M&M) plans to develop the world's first hybrid technology
that can be deployed in vehicles with manual transmission and enhance fuel
efficiency by almost 20 per cent.
 Amtek Auto has signed an agreement to buy Germany-based Kuepper Group of
companies for about €200 million (USD 272.73 million) in its second big European
acquisition in 2013.
 Honda Cas India will use the Ennore Port to export cars to South Africa. The
infrastructure for car exports at Ennore Port is attractive and cost effective.

Government Initiatives
 The Government of India plans to introduce fuel-efficiency ratings for automobiles to

encourage sale of cars that consume less petrol or diesel, as per M Veerappa Moily,
Union Minister for Petroleum and Natural Gas, Government of India.
 The Union Budget 2013-14 added some incentives to the industry. The analysis by
Deloitte on the Union Budget highlighted the following points:
 The period of concession available for specified part of electric and hybrid vehicles
till April 2013 has been extended up to March 31, 2015
 The basic customs duty (BCD) on imported luxury goods such as high-end motor
vehicles, motor cycles, yachts and similar vessels was increased. The duty was raised
from 75 per cent to 100 per cent on cars/motor vehicles (irrespective of engine
capacity) with CIF value more than US$ 40,000; from 60 per cent to 75 per cent on
motorcycle with engine capacity of 800 cc or more and on yachts and similar vessels
from 10 per cent to 25 per cent.
 In addition, an increase in excise duty from 27 to 30 per cent has been allowed for
SUVs with engine capacity exceeding 1,500 cc, while excise duty was decreased
from 80 to 72 per cent, in case of SUVs registered solely to be used for taxi purposes.
 An exemption from BCD will be provided to lithium ion automotive battery for
manufacture of lithium ion battery packs for supply to manufacturers of hybrid and
electric vehicles.
 The excise duty on chassis of diesel motor vehicles for transport of goods reduced
from 14 per cent to 13 per cent.
 The Government of India allows 100 per cent FDI in the automotive industry through
automatic route.
Road Ahead
The vision of Automotive Mission Plan (AMP) 2006-2016 expects India, 10 emerge as the
destination of choice in the world for design and manufacture of automobiles and auto
components with output reaching a level of US$ 145 billion; accounting for more than 10
per cent of the gross domestic product (GDP) and providing additional employment to 25
million people by 2016."

With special focus on exports of small cars, multi-utility vehicles (MOVe), two and three
wheelers and auto components; the automotive sector's contribution to the GDP is expected
to double reaching a turnover worth USS 145 billion in 2016, according to the AMP 2006-
2016
Market Segments
Two wheelers segment accounted for about three quarters of the total automotive production
in the country during FY13.
Graph showing automotive market segment.
4%
4%
15%
Two Wheelers Passenger Vehicles
Commercial Vehicles Three Wheelers
77%

INDIAN PERSPECTIVES
Motorized two-wheeler riders are one among the most vulnerable Indian road users.
However, there is limited research on psychological factors that are likely to influence riding
behaviours of youth. The present paper focuses on exploring and documenting emotional
states associated with two-wheeler riding in urban Indian youth. The study sampled 1,650
youth, aged between 17-30 years, from 30 educational institutes in Bangalore and Delhi.
A Riding Survey developed during the pilot phase was used for data collection. Positive
emotional states were commonly reported to be associated with riding and a sense of
freedom was one of the commonest factors that were linked to the same, from the
perspectives of the youth. Other than commuting, riding for fun (54%) and riding for
relaxation (30%), relief from boredom (22%) and getting away from distress (17%) were
endorsed as some of the reasons for taking out the two-wheeler.. Seeking a sense of power
and control, seeking joy, seeking relief from anger or feeling upset were reported by varying
proportions of young riders as some of the reasons for speeding. This exploratory survey
highlights an urgent need for addressing the role of emotions in preventive intervention
programs that target young two-wheeler riders.

1.2 PART-B
ABOUT THE SUBJECT
INTRODUCTION
In today's world of marketing, everywhere you go you are being marketed to in one form or
another. Marketing is with you each second of your walking life. From morning to night you
are exposed to thousands of marketing messages every day. Marketing is something that
affects you even though you may not necessarily be conscious about it.
MEANING OF MARKETING
Marketing is communicating the value of a product or service to customers, for the purpose
of selling the product or service.
Marketing techniques include choosing target market through market analysis and market
segmentation, as well as understanding consumer behaviour and advertising a product's
value to customer. From a societal point of view, marketing is the link between a society's
material requirements and its economic patterns of response. Marketing satisfies the needs
and wants trough exchange process and building long-term relationships. Marketing blends
art and applied science (such as behavioural sciences) and makes use of information
technology.
Marketing is the process of interesting potential customers and clients in your products
and/or services
The key word in this marketing definition is process, marketing involves researching,
promoting. Selling and distributing your products or services.
DEFINITION OF MARKETING
According to American Marketing Association (2004). "Marketing is an organizational

function and set of processes for creating communicating and delivering value to customers

and for managing relationships in a way that benefits both the organization and the
stakeholder".
According to Philip Kotler (2000)- "A societal process by which individuals and group
obtain what they need and want through creating, offering and freely exchanging products
and services of value with others"
NATURE OF MARKETING
1. Marketing is an Economic Function
Marketing embraces all the business activities involved in getting goods and services, from
the hands of producers into the hands of final consumers. The business steps through which
goods progress on their way to final consumers is the concept of marketing.
2. Marketing is a Legal Process by which Ownership Transfers
3. Marketing is a System of Interacting Business Activities
Marketing is that process through which a business enterprise, institution, or organization

interacts with the customers and stakeholders with the objective to eur profit, satisfy
customers, and manage relationship. It is the performance of business activities that direct
the flow of goods and services form producer to consumer.
4. Marketing is a Managerial Function
According to managerial or system approach-Marketing is the combination of activities

designed to produce profit through ascertaining, creating, stimulating and satisfying the
needs and/or wants of a selected segment of the market".
According to this approach the emphasis is on how the individual organization processes
marketing and develops the strategic dimensions of marketing activities.
5. Marketing is a social process
Marketing is the delivery of a standard of living to society. According to Cunningham and

Cunningham (1981) societal marketing performs three essential functions:-
1. Knowing and understanding the consumers changing needs and wants

2. Efficiently and effectively managing the supply and demand of products and
services, and
3. Efficient provision of distribution and payment processing system.
6. Marketing is a philosophy based on consumer orientation and satisfaction
7. Marketing had dual objectives. Profit making and consumer satisfaction
SCOPE OF MARKETING
1. Study to Consumer Wants and Needs
Goods are produced to satisfy consumer wants. Therefore study is done to identify consumer
needs and wants. These needs and wants motivates consumer to purchase.
2. Study on Consumer Behavior
A marketer performs study of consumer behavior. Analysis of buyer behavior helps marketer
in market segmentation and targeting.
3. Product Planning and Development
Product planning and development starts with the generation of product idea and ends with
the product development and commercialization. Product planning includes everything from
branding and packaging to product line expansion and contraction.
4. Pricing Policies
Marketer has to determine pricing policies for their products. Pricing policies differs from
product to product. It depends on the level of competition, product life cycle, marketing
goals and objectives, etc.
5. Distribution
Study of distribution channel is important in marketing. For maximum sales and profit goods
are required to be distributed to the maximum consumers at minimum cost.
6. Promotion

Promotion includes personal selling, sales promotion and advertising. Right promotion mix
is crucial in accomplishment of marketing goals.
7. Consumer satisfaction
The product or service offered must satisfy consumer. Consumer satisfaction is the major
objective of marketing.
8. Market Segmentation
The premise of market segmentation is that to maximize sales to a large population of

customers, it is best to divide it into logical subgroups. The assumption is that by dividing
one large, amorphous mass into subgroups, you can fine-tune your product, messaging,
support, or distribution channels to meet the specific needs of unique customer groups. Thus,
the goal is to use a market segmentation model to improve marketing success and optimize
marketing ROI.
The Four Types of Market Segmentation
 Demographic segmentation.
 Psychographic segmentation.
 Behavioral segmentation.
 Geographic segmentation.
STEPS IN MARKET SEGMENTATION

1. Identify the target market
The first and foremost step is to identify the target market. The marketers must be very clear
about who all should be included in a common segment. Make sure the individuals have
something in common. A male and a female can’t be included in one segment as they have
different needs and expectations.
Segmentation helps the organizations decide on the marketing strategies and promotional
schemes.
2. Identify expectations of Target Audience
Once the target market is decided, it is essential to find out the needs of the target audience.
The product must meet the expectations of the individuals. The marketer must interact with
the target audience to know more about their interests and demands.
Marketing professionals or individuals exposed to sun rays for a long duration need
something which would protect their skin from the harmful effects of sun rays. Keeping this
in mind, many organizations came with the concept of sunscreen lotions and creams with a
sun protection factor especially for men.
3. Create Subgroups
The organizations should ensure their target market is well defined. Create subgroups within
groups for effective results.
4. Review the needs of the target audience
It is essential for the marketer to review the needs and preferences of individuals belonging
to each segment and sub-segment. The consumers of a particular segment must respond to
similar fluctuations in the market and similar marketing strategies.
5. Name your market Segment
Give an appropriate name to each segment. It makes implementation of strategies easier. A

kids section can have various segments namely new born, infants, toddlers and so on.
6. Marketing Strategies

Devise relevant strategies to promote brands amongst each segment. Remember you can’t
afford to have same strategies for all the segments. Make sure there is a connect between the
product and the target audience. Advertisements promoting female toiletries can’t afford to
have a male model, else the purpose gets nullified.
A model promoting a sunscreen lotion has to be shown roaming or working in sun for the
desired impact.
7. Review the behavior
Review the behavior of the target audience frequently. It is not necessary individuals would
have the same requirement (demand) all through the year. Demands vary, perceptions
change and interests differ. A detailed study of the target audience is essential.
8. Size of the Target Market
It is essential to know the target market size. Collect necessary data for the same. It helps in
sales planning and forecasting.

CHAPTER-2
RESEARCH DESIGN
2.1. TITLE OF THE STUDY
"A study on effectiveness of market segmentation towards HERO motors cop with
special reference to SS Motors”
INTRODUCTION
Customer segmentation is the practice of dividing a company's customer into group relevant
to particular business.
Customer segmentation as the potential to address each customer in the most effective way
using large amount of data available on customers.
2.2. STATEMENT OF THE PROBLEM:
A customer segmentation analysis allows marketer to identify discrete group of customer

with a high degree of accuracy based on demographic, behavioral and other indicators
Customer segmentation will focus on long term customer life value.
The goal of segmenting customer is to decide how to release customer in each segmentation
in order to maximize the value each customer to the business.
2.3. OBJECTIVE OF THE STUDY
 To identify strategic management goals and breaking down mass into groups of
consumers.
 To understand differences among general targeting strategies.
 To become familiar with major segmentation variables.
 To understand how to evaluate market segment.

2.5. LIMITATIONS
 Study of segmentation is not possible as whole and in depth.

 A study is based on approximate facts and not exact facts.
 The project is limited due to time constraints.
 The study is based on the response of the company’s customer.
2.6. TYPE OF RESEARCH
Descriptive Research Design
 Descriptive research design includes surveys and fact finding, enquires of different
kinds. The major purpose of Descriptive research is description of state of affairs, as
it exists at present. In social business research we quiet often use the term Ex post
facto research for descriptive studies.
 The main characteristic of this method is that the researcher has no control over the
variable: he can only report what has happened or what is happening. Most Ex post
facto research projects are used for descriptive studies in which the researcher seeks
to measure such items, for example, frequency of shopping, and consumer
preferences on products or services.
 Descriptive Research method will be applicable to the existing problem. Here the
study is conducted for a fact i.e., to know the "Effectiveness of market segmentation
towards hero moto corp so the process was conducted through questionnaire.
It has been defined also as follows:
 1. "The analysis of the principles of methods, rules, and postulates employed by a

discipline"
 2. The systematic study of methods that are, can be or have been applied within a
discipline"
 3. "The study or description of methods"
2.7. METHODOLOGY OF THE STUDY

Methodology is the systematic, theoretical analysis of the methods applied to a field of

study. It comprises the theoretical analysis of the body of methods and principles associated
with a branch of knowledge. Typically, it encompasses concepts such as paradigm,
theoretical model phases and quantitative or qualitative techniques.
A methodology does not set out to provide solutions - it is, therefore, not the same thing as a
method. Instead, it offers the theoretical underpinning for understanding which method, set
of methods or so called "best practices" can be applied to specific case, for example, to
calculate a specific result.
SOURCES OF DATA
The task of collecting data begins after a research problem has been defined and plan is
chalked out. This study pertains to collection of data from primary and secondary sources
 PRIMARY DATA
Data are collected for the first time for a specific purpose, has been collected directly
from the sample respondents through descriptive research method. Questionnaire
through personal contact i.d. by interview,
 SECONDARY DATA
Secondary data has been collected from already published standard books,
newspaper, magazines and internet portals referred by the company sales guide.
2.8. RESEARCH INSTRUMENT
Closed-ended Questionnaires is used as instrument for this research study and the size of the
sample is restricted to 100 sample
INFORMATION REQUIRED
 Demographic profiles of the respondents.

 Information on factors influencing respondents while choosing a particular brand.
 On which brand the respondents are interested in and the reason why they are stick
on to the particular brand. Whether they will switch over to other brands

RESEARCH INSTRUMENT DESIGN
QUESTIONNAIRE DESIGN
Designing and implementing the question is one of the most interesting and challenging
tasks of conducting research and analysis. This questionnaire has revealed the importance of
the above.
QUESTIONNAIRE
This method of data collection is quiet popular particularly in case of big enquiries. Private
individuals are adopting it. Research workers, private and public organizations and even by
government. In this method, a questionnaire is sent to the persons concerned with the request
to answer the questions and return the questionnaire. A questionnaire consists of number of
questions printed or typed in a definite order on a form.
The researcher has used questionnaire for the following purposes:
 For identify the demographic profiles of the respondents.

 To study the interest and satisfaction level towards the various attributes of Hero
bikes compared to other cars.
 To know the maintenance handling system adopted by the users. To identify the
consumers opinion towards the advertisement of Hero Bikes and identifying the
general satisfaction level on Hero Bikes.
SAMPLING UNIT
Sampling unit deals with persons to be surveyed. The researcher must define the target
population. Among the motor bike users customers of Hero in Bangalore is the sample
population for the study. On the basis of random sampling grouped on the basis of
geographical area.
SAMPLE SIZE
Once the sampling sized was determined, the sampling size was fixed to 100 consumers.

CHAPTER-3
COMPANY PROFILE
INTRODUCTION
Hero MotoCorp is the World's single largest two-wheeler motorcycle company. Honda
Motor Company of Japan and the Hero Group entered a joint venture to setup Hero Honda
Motors Limited in 1984. The joint venture between India's Hero Group and Honda Motor
Company. Japan has not only created the world's single largest two wheeler company but
also one of the most successful joint ventures worldwide.
During the 80s, Hero Honda became the first company in India to prove that it was possible
to drive a vehicle without polluting the roads. The company introduced new generation
motorcycles that set industry benchmarks for fuel thrift and low emission . A legendary Fill
it - Shut it - Forget it campaign captured the imagination of commuters across India, and
Hero Honda sold millions of bikes purely on the commitment of increased mileage.
Over 20 million Hero Honda two wheelers tread Indian roads today. These are almost as
many as the number of people in Finland, Ireland and Sweden put together.
Hero Honda has consistently grown at double digits since inception; and today, every second
motorcycle sold in the country is a Hero Honda. Every 30 seconds, someone in India buys
Hero Honda's top-selling motorcycle - Splendor. This festive season, the company sold half
a million two wheelers in a single month in global automotive history,
Hero Honda became the first company in the country to introduce four-stroke motorcycles
and set the standards for fuel efficiency, pollution control and quality. It has an excellent
distribution and service network spread throughout the country.

Hero Honda bikes currently roll out from its three globally benchmarked manufacturing
facilities. Two of these are based at Dharuhera and Gurgaon in Haryana and the third state of
the art manufacturing facility was inaugurated at Haridwar, Uttarakhand in April this year.
These plants together are capable of producing out 4.4 million units per year.
Having reached an unassailable pole position in the Indian two wheeler market, Hero Honda
is constantly working towards consolidating its position in the market place. The company
believes that changing demographic profile of India, increasing urbanization and the
empowerment of rural India will add millions of new families to the economic mainstream.
This would provide the growth ballast that would sustain Hero Honda in the years to come.
As Brijmohan Lall Munjal, the Chairman, Hero Honda Motors succinctly points out, 'We
pioneered India's motorcycle industry, and it's our responsibility now to take the industry to
the next level. Well do all it takes to reach there."
3.1 HISTORY
The success of the Hero Group lies in the determination and foresight of the Munjal brothers,
who shared their vision with their workers and led the Group to a position where its name
has become synonymous with top-quality two wheelers. The flame kindled by the Munjal
brothers in 1956 with the flagship company Hero Cycles: Mr. Satyanand Munjal, Mr.
BrijmohanLal Munjal and Mr. O.P. Munjal Continue to carry the torch and are actively
involved in the day to-day operations of the Hero Group. The saga is being continued with
the same zeal by the second and third generations of the family and by the large working
force of the Hero Group. The spirit of enterprise which dominates the progress of the Group
is characteristic of the land where it all began - the City of Ludhiana, in Punjab - home to
some of India's finest workers and entrepreneurs. The Hero Group is a thriving example of
three generations of a family working and striving together to ensure quality, satisfaction and
extensive growth.
Company History - Hero Moto Corp
1956 Formation of Hero Cycles in Ludhiana(majestic auto limited)
1975 Hero Cycles becomes largest bicycle manufacturer in India.
1983-Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed

Shareholders Agreement signed
1984 Hero Honda Motors Ltd. incorporated
1985-Hero Honda motorcycle CD 100 launched.
1989 Hero Honda motorcycle Sleek launched.
1991–Hero Honda motorcycle CD 100 SS launched.
1994-Hero Honda motorcycle Splendor launched.
1997-Hero Honda motorcycle Street launched.
1999 - Hero Honda motorcycle CBZ launched.
2001 - Hero Honda motorcycle Passion and Hero Honda Joy launched.
2002-Hero Honda motorcycle Dawn and Hero Honda motorcycle Ambition launched.
2003-Hero Honda motorcycle CD Dawn, Hero Honda motorcycle Splendor plus, Hero
Honda motorcycle Passion Plus and Hero Honda motorcycle
karizma launched.
2004 Hero Honda motorcycle Ambition 135 and Hero Honda motorcycle CBZ launched.
2005—Hero Motocorp Super Splendor, Hero Honda motorcycle CD Deluxe, Hero Honda
motorcycle Glamour, Hero Honda motorcycle Achiever and Hero Honda Scooter Pleasure.
2007-New Models of Hero Honda motorcycle Splendor NXG. New Models of Hero Honda
motorcycle CD Deluxe, New Models of Hero Honda motorcycle Passion Plus and Hero
Honda motorcycle Hunk launched.
2008-New Models of Hero Honda motorcycles Pleasure, CBZ Xtreme, Glamour, Glamour
Fi and Hero Honda motorcycle Passion Pro launched.
2009-New Models of Hero Honda motorcycle Karizma:Karizma ZMR and limited edition of
Hero Honda motorcycle Hunk launched
2010-New Models of Hero Honda motorcycle Splendor Pro and New Hero Honda
motorcycle Hunk and New Hero Honda Motorcycle Super Splendor launched.

2011-New Models of Hero Honda motorcycle Glamour, Glamour FI, CBZ Xtreme, Karizma
launched. New licensing arrangement signed between Hero and Honda. In August Hero and
Honda parted company, thus forming Hero MotoCorp and Honda moving out of the Hero
Honda joint venture. In
November, Hero launched its first ever Off Road Bike Name Hero "Impulse". 2012-New
Models of Hero Motocorp Maestro the Musculine scooter and Ignitor the young generation
bike are launched.
2013-Hero MotoCorp unveiled line-up of 15 updated products including
Karizma R, ZMR, Xtreme, Pleasure, Splendor Pro, Splendor iSmart, HF Deluxe
ECO, Hero Motocorp Super Splendor. Passion Pro and Xpro, Glamour and Glamour FI etc.
It also introduced three new technologies. Engine Immobilizer in new Xtreme, Integrated
Braking System (IBS) in new Pleasure and i3S (Idle Stop and Start System) in new Splendor
iSmart.
CHALLENGES FOR THE INDUSTRY
Several factors including high inflation, firm interest rates, rising petrol prices, besides weak
monsoons have been dampening demand in the domestic market over last several quarters.
At the same time, overseas sales have been adversely impacted by increase in interest rates
in several target countries, increase in import duty in Sri Lanka, trade restrictions imposed by
Argentina and dollar sales embargo with Iran. This apart, the reduction in incentives
available to two-wheeler exporters, twice over the last 18 months, has persuaded Indian
original equipment manufacturers (OEMs) to partially hike product prices in overseas
markets, adding to the pressure on export volumes.
GROWTH OF INDUSTRY
The report highlights that based on calendar year 2012 volumes, however, India is now the
largest two-wheeler market in the world, with sales volumes of 13.8 million units (domestic).
It has overtaken China at 12.6 million units. In fact, while two wheeler sales volumes in
India grew by 5.8 per cent during 2012 calendar year over the previous year, the domestic
demand both in China and Indonesia second and third largest two-wheeler markets,
respectively) shrunk by 10.0 per cent and 9.2 percent, respectively.

Several industry participants have announced green field capacity expansion plans in recent
periods, Hero MotoCorp plans to invest Rs 1,500 er over the next two years towards
establishing facilities in Rajasthan and Gujarat: Honda Is in the process of setting-up its third
manufacturing facility in Karnataka; Yamaha too is setting-up a new plant in Tamil Nadu at
an investment of Rs 1,500 er Together, these three OEMs will add 4 million units of
additional two-wheeler capacity over the next two years, representing 22 per cent addition on
existing industry capacity.
ICRA expects these large investments to exert pressure on the industry's profitability metrics
over the near term as volume growth moderation further takes root in the absence of
immediate demand triggers.
The domestic two-wheeler industry is expected to report moderate volume growth of around
4-5 per cent in 2012-13, as demand slowdown as well as base effect catches up with the
industry, says a recent ICRA report on the industry. The two wheeler industry, however, has
clocked a compounded annual growth rate (CAGR) of 21.8 percent over the last three years.
The report further adds that over the medium term, the two-wheeler industry is expected to
report a volume CAGR of 8-9 per cent, to reach a size of 22-23 million units (combining
domestic and exports) by 2016-17.
"Our long-term growth forecast remains at 9-11 per cent, as we believe the various structural
positives associated with the domestic two-wheeler industry including favorable
demographic profile, moderate two-wheeler 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; as also the
large opportunity available to grow presence in overseas markets, mainly Africa and Latin
America," the report says.
With domestic volume growth of 3.9 per cent year-on-year (yoy) and exports volume dip of
Li per cent yoy in 11 months of 2012-13, the Indian two-wheeler is currently amidst a
slowdown phase last experienced in 2007-08 / 2008-09.

3.2. 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:
3.3. 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.
STRATEGY
Hero MotoCorp's key strategies are to build a robust product portfolio across categories,
explore growth opportunities globally continuously improve its operational efficiency,
aggressively expand its reach to customers, continue to invest in brand building activities
and ensure customer and shareholder delight.
MANUFACTURING
Hero MotoCorp two wheelers are manufactured across three globally benchmarked
manufacturing facilities. Two of these are based at Gurgaon and Dharuhera which are
located in the state of Haryana in northern India. The third and the latest manufacturing
plants are based at Haridwar, in the hill state of Uttarakhand.
TECHNOLOGY
In the 1980's the Company pioneered the introduction of fuel-efficient, environment friendly
four-stroke motorcycles in the country. It became the first company to launch the Fuel
Injection (FI) technology in Indian motorcycles, with the launch of the Glamour FI in June
2006.
Its plants use world class equipment and processes and have become a benchmark in
leanness and productivity

Hero MotoCorp, in its endeavor to remain a pioneer in technology, will continue to innovate
and develop cutting edge products and processes
DISTRIBUTION
The Company's growth in the two wheeler market in India is the result of an intrinsic ability
to increase reach in new geographies and growth markets. Hero MotoCorp's extensive sales
and service network now spans over to 5000 customer touch points. These comprise a mix of
authorized dealerships, service & spare parts outlets and dealer-appointed outlets across the
country.
Supply chain management
As the Company prepares to produce a wider range of products, efforts are being taken to
align the supply chain and prime up its supplier base. During the year, the Company kick-
started the process of migrating its existing brands to the new brand, The exercise is
expected to be completed during 2012-13.
During the year, the Company also commenced the process of working with its vendors to
develop new parts. The Company's Supply Chain Management function is built on three
planks:
 Cost
 Quality
 Sustainability
Tracking inventory cost effectively and efficiently is known to be a key source of

competitive advantage in the automobile industry. Hence, it comes as no surprise that cost
leadership is the Company's prime focus area. Continual pressure on margins forced the
Company and its supply chain partners to find innovative and alternate ways to combat
inflation. Considerable attention was given to managing component inventory in the system,
with double-digit growth in inventory turnover, To align HR processes with the supply
chain, top two HR consulting firms in India are working with supply chain partners. The
exercise is aimed at improving robustness of people processes and resulting in a direct
impact on quality, cost, productivity, delivery and reliability.

3.4. BOARD OF DIRECTORS

Dr. Brijmohan Lall Munjal

Mr. Munjal is the founder Director and Chairman of the Company and the $3.2 billion Hero
Group. He is the Past President of Confederation of Indian Industry (CII), Society of Indian
Automobile Manufacturers (SIAM) and was a Member of the Board of the Country's Central
Bank (Reserve Bank of India). In recognition of his contribution to industry, Mr. Munjal was
conferred the Padma Bhushan Award by the Union Government.
Corporate Governance
At Hero MotoCorp. it is the firm's belief that the essence of Corporate Governance lies in the
phrase "Your Company". It is "Your" Company because it belongs to you - the shareholders.
The Chairman and Directors are "Your" fiduciaries and trustees. Their objective is to take
the business forward in such a way that it maximizes "Your" long-term value.
This Company is committed to benchmarking itself with global standards for providing good
Corporate Governance. It has put in place an effective Corporate Governance System which
ensures that the provisions of Clause 49 of the Listing Agreement are duly complied with.
The Board has also evolved and adopted a Code of Conduct based on the principles of Good
Corporate Governance and best management practices being followed globally.
GRADING POSITIVES
Market leadership. Strong brand equity, professional management, high operating efficiency
and established scale economies. Strong financial profile characterized by healthy margins,
high profitability and cash generation. Potential upside to our estimates:
(1) HMCL sustains its current market share, leveraging its brand equity, product
performance and distribution strengths;
(2) Industry growth exceeds our estimates over the medium term despite existing concerns
on macro-economic scenario:
(3) HMCL betters the margins estimated by us via sustained business growth and increases
in operating efficiency even in the face of competitive and cost pressures.
GRADING SENSITIVITIES

Key sensitivities to our estimates include:
(1) Inflation in input costs not being neutralized by price increases because of competitive
pressures:
(2) High concentration on Executive segment;
(3) Intensifying competition from global players
(4) Ability to develop in-house technical capability or form alternate technical tie ups with
external institutions.
Profile of target customer
Hero MotoCorp basically targets the every each and segments of the market. So there are
some products like splendor, CD- dawn (r 4000050000 they made for lower segment of the
market and glamour, passion, CBZ, karizma (rs above 50000)for the upper segment of the
market. And now they are trying to target the young people of the market.
India's Hero MotoCorp, the world's largest producer of motorcycles and scooters, has
announced its intention to expand globally, with plans to sell vehicles on three continents
and nearly double its unit sales within five years. The company, whose family shareholders
bought out its former partner Honda Motor this year, said it would invest about $lbn to
expand internationally in south-east Asia, Africa, and Central and Latin America
Customer Relationship Activity
For making a better relationship with customer they always use genuine parts in their
product. And after selling they have the services and maintenances. Their constant endeavor
is to support the company's mandate of providing highest level of customer satisfaction by
taking good care of customer's two-wheeler service and maintenance through their vast
network of more than 2100 committed dealers and service outlets spread across the country.
Apart from that hero motocorp focused on cleanliness and other aesthetics of the service
stations and add such air conditioned waiting area, internet surfing, coffee shops etc to

enhance the in house experience of the customers at those customer touch point". To ensure
that millions of customers in the rural area are not left waiting for adequate service as it is
impossible for the company to introduce service station at every nook and comer of the
country, mobile service stations are regularly arranged with prior intimation to public about
the rout that the mobile workshop would take when passing through that region so that
customers can come and get their two wheelers serviced. All these activities are aimed to
increase the customer loyalty and thus retaining customers.
3.5.ORGANIZATIONAL STRUCTURE
3.6. BUSINESS OPERATION
Hero Honda, is an Indian motorcycle and scooter manufacturer based in New Delhi, India.
The company is the largest two-wheeler manufacturer in the world, and also in India, where
it has a market share of about 46% in the two-wheeler category. The 2006 Forbes list of the
200 World's Most Respected Companies has Hero Honda Motors ranked at #108. On 31
March 2013, the market capitalisation of the company was ₹308 billion (US$4.3 billion).

Hero Honda started its operations in 1984 as a joint venture between Hero Cycles
(sometimes called Hero Group, not to be confused with the Hero Group food company of
Switzerland) of India and Honda of Japan. In 2010, when Honda decided to move out of the
joint venture, Hero Group bought the shares held by Honda, and focused on its entirely
owned subsidiary, Honda Motorcycle and Scooter India (HMSI).
In June 2012, Hero MotoCorp approved a proposal to merge the investment arm of its parent
Hero Investment Pvt. Ltd. with the automaker. This decision came 18 months after its split
from Hero Honda.
"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.
During the 1980s, the company introduced motorcycles that were popular in India for their
fuel economy and low cost. A popular advertising campaign based on the slogan 'Fill it –
Shut it – Forget it' that emphasised the motorcycle's fuel efficiency helped the company
grow at a double-digit pace since inception. In 2001, the company became the second largest
two-wheeler manufacturing company in India and globally. It maintains global industry
leadership to date. The technology in the bikes of Hero Motocorp (earlier Hero Honda) for
almost 26 years (1984–2010) has come from the Japanese counterpart Honda.
3.7. PRODUCT PROFILE
Product range of the company includes:
 XPULSE

 XTREME
 GLAMOUR
 SUPER SPLENDOR
 PASSION
 SPLENDOR I-SMART
 HF DELUXE
 MASTERO
 DUET
 PLEASURE
 DESTINI

SPLENDOR BS6
Type : Air cooled, 4-stroke, Single cylinder, OHC

Displacement : 124.7 cc
Length : 2042 mm
Width : 740 mm
Height : 1102 mm
Fuel Tank Capacity : 12 L
Kerb Weight : 123 kg (Disc) | 122 kg (Drum)

PASSION I-SMART
Type : Air Cooled, 4- Stroke Single Cylinder OHC

Length : 1966 mm
Width : 774 mm
Height : 1087 mm
Fuel Tank Capacity : 8.2 Litres
Kerb Weight : 119 kg

Xtreme
Engine Type : Air cooled, 4 Stroke 2 Valve Single cylinder OHC
Displacement : 163 cc
Engine Type : Air cooled, 4 Stroke 2 Valve Single cylinder OHC
Kerb Weight : 138 Kg
Fuel Tank Capacity : 12 .l

MAESTRO EDGE
Type : Air - Cooled, 4 - Stroke Single Cylinder OHC

Length : 1841 mm
Width : 695 mm
Height : 1190 mm
Kerb Weight : 110 Kg
Fuel Tank Capacity :4.8 litres

HERO DUET
Type : Air cooled, 4 - stroke single cylinder OHC

Length : 1830 mm
Width : 726 mm
Height : 1139 mm
Kerb Weight : 116 kg
Fuel Tank Capacity : 4.8 litres

PLEASURE
Type : Air cooled, 4-Stroke Single Cylinder OHC

Length : 1769 mm
Width : 704 mm
Height : 1161 mm
Fuel Tank Capacity : 4.8 litres

3.8.MARKET SHARE OF HERO
HERO MOTOCORP
Gaining market share amidst falling overall sales numbers in the market. YoY numbers show
only negligible fall and I guess Hero will be happy with it.
Splendor retains the No#1 seller spot
HF Deluxe is closing in on the Activa for the 2nd spot as well - with sales improving over
11.6% YoY.
The newly launched Destini 125 is off to a great start, but unfortunately seems to have come
at the cost of Hero Maestro.The country's largest two-wheeler maker Hero MotoCorp
Sunday reported 13.5 per cent rise in sales to over 6.5 lakh units in May over the previous
month.
The company sold about 5.7 lakh units in April 2019, it said in a BSE filing."Hero
MotoCorp reported sales of 6,52,028 units of motorcycles and scooters in May 2019. The
company recorded a sequential increase in sales compared to the previous month (April
2019) when it sold 5,74,366 units of two-wheelers," the filing said.

3.9. COMPETITORS
1. Bajaj
2. TVS Motors
3. YAMAHA

4. ATHER
5. HONDA
6. Royal Enfield
7. SUZUKI

8. Mahindra
9. Harley Davidson
10. Ducati

3.10. SWOT ANALYSIS OF HERO MOTO CROP
Formerly known as Hero Honda, Hero Monocorp Ltd. is an Indian manufacturing company
of scooters and motorcycles. The headquarter is located in New Delhi, India. Presently, Hero
Motocorp is the largest manufacturers of two-wheelers around the world. It enjoys 46%
market share in the two-wheeler category.
The market capitalization of the company touched the magic figure of Rs 30,800 crore on
31st March 2013. The company started its operation in 1984 as a joint venture with Hero
Cycle.
STRENGTHS
 Huge Brand Equity– This is really one of the biggest strengths of Hero Motocorp.
This company is one of the biggest players in the market of two-wheelers.
 Strong Brand Image– A Company can only grow once it is popular by its brand
name. Hero Motocorp is really one of those companies who can play hard on the
popularity field.
 Excellent Distribution– Hero Motocorp has more than 3000 dealerships and service
centers which have made it the leading company in the industry.
 Wide Variety of Products– The more products a company launch successfully, the
more popular it becomes. Hero Motocrop is, therefore, the real hero in the market.
 Awards and Recognition– Customers can rely on a brand when it is acknowledged
with rewards and awards. Hero Motocorp has received many in all these years.
 Sponsorships– Events, related to sports and racing provide sponsorships to the
company that has made it hugely popular of all its competitors.
WEAKNESS
Strong Competition– There are lots of national and international players in the market who
give tough competition to the Hero Motocorp.
Lack of Innovation– Maximum products of Hero Motocorp comes with almost similar
features, whether is design and functions.

OPPORTUNITIES
Growing Industry– The demand for two-wheelers are increasing a lot, and that brings the
opportunity for the company to grow bigger.
THREATS
Strong Competition– There are lots of other companies which are emerging rapidly and give
tough competition to the company.
Betterment of Public Transport– As other modes of transportation have increased a lot, the
use of two-wheelers is not in demand.
3.11. AWARDS & ACHIEVEMENTS
 Two-wheeler Manufacturer of the Year award by Bike India magazine. Adjudged the
"Bike Manufacturer of the Year at the Economic Times Zigwheels Car and Bike
Awards.
 CNBC Awaaz - Storyboard special commendation for "Effective rebranding of a new

corporate entity" by CNBC Awaaz Consumer Awards
 "Most Recommended Two-Wheeler Brand of the Year" award by CNBC Awaaz

Consumer Awards
 Colloquy Loyalty Awards "Innovation in Loyalty Marketing International 2011"for

Hero Good Life
 Ranked No 1 brand in the Auto (Two-Wheelers) category in the Brand Equity "Most
Trusted Brand" 2011 serve
 Best value for Money Bike Maker and Best Advertising in Two Wheelers Category
at the Auto India Best Brand Awards 2012
 Zigwheels - Entry-Level Bike of the year: Hero Splendor iSmart

 Overdrive - 'Viewers' Choice Scooter of the Year - Hero Maestro Edge
 Best two-wheeler pavilion at the CNB Auto Expo Awards
 Hero Glamour - Commuter Motorcycle Of The Year - NDTV Car and Bike awards
2017
 Highest Ranked Executive Motorcycle in Initial Quality - Hero Super Splendor - by

JD Power India
 Best launch - Two wheeler at the CNB Auto Expo Awards for Excellence 2018

CHAPTER – 4
DATA ANALYSIS AND INTERPRETATION
TABLE NO 4.1:
Table showing ‘the classification of respondents on gender’
Percentage
Sl. No Gender Respondents
1 60 60%
Male
40 40%
2 Female
100 100%
3 Total
Analysis:
The above table showing that male respondents are more than female respondents, 60% and
40% respectively.
Inference:
The above information says that gender place an important role in any consumable product
in market.

Graph no 4.1:
Graph showing ‘the classification of respondents on gender’
Sales Based On Gender
Men
40%
Women
60%

Table no 4.2:
Table showing ‘the classification of respondents on the basis of occupation’
Sl. No Occupation Respondent Percentage
1 Business 16 16%
2 Govt. Employee 16 16%
3 Student 64 64%
4 Pvt. Employee 4 4%
Total 100 100%
Analysis:
The above table shows it’s clear that 4% are Pvt Sector followed by 16% are govt employee
64% students, 20% business.
Inference:
Occupation is an important segmenting factor, which the dealer should consider, thus the
dealer should have a best interest of this segment.

Graph no 4.2:
Showing ‘the basis of occupation’
Coustmer Occupatiom
70
60
50
40
30
20
10
0
Business Govt. Employee Student Pvt. Employee
Coustmer Occupatiom

Table 4.3:
Table showing ‘the classification of respondents on the basis of their income’
Sl. No Income Respondent Percentage
1 Below 15,000 64 64%
2 Rs. 15,001-25,000 18 18%
3 25,001 & above 18 18%
Total 100 100%
Analysis:
The above table shows that below income people are purchasing Hero bikes by respondents
on 64%.
Inference
Income is an important differentiating factor that influences buying behaviour. So above

graph shows that income of below 15,000 is the customers of SS MOTORS.

Graph no 4.3:
Graph showing ‘the classification of respondents on the basis of their income’
Income Of Customer
70
60
50
Income Of Customer
40
30
20
10
0
Below 15,000 15,001-25,000 25,001

Table no 4.4:
Table showing ‘the classification of respondents on the basis of their Educational

Qualification’
Educational
Sl. No Respondent Percentage
qualification
1 Graduate 78 78%
2 Post graduate 18 18%
3 Diploma 0 0%
4 SSLC&BELOW 4 4%
Total 100 100%
Analysis
From the above table 78% are graduate and followed by 788% post graduates 0% diploma &
4% SSLC&Below.
Inference
From the above graph, it is clear that consumer of HERO are educated and also uneducated
like below SSLC. So special reference should be made to encourage and make aware the
genuineness of spares to the diploma holders and not to educated class.

Graph no 4.4:
Showing “the classification of respondents on the basis of their educational qualification”
Coustmer's Educational Qualification

80
70
60
50 Coustmer's Educational Qualifi-

cation
40
30
20
10
0
Graduate Post Graduate Diploma SSLC & Below

Table no 4.5(a):
Table showing “the opinion of the respondent about the styling of Hero bikes”
Sl. No Styling Respondent Percentage
1 Attractive 6 6%
2 Good 74 74%
3 Need more changes 20 20%
Total 100 100%
Analysis
The above table shows that 6% feel that the style of Hero bikes are attractive, 74% feel that
it is good and 20% of the respondent would like see more changes in the looks of Hero
bikes.
Inference
The above information says that maximum numbers of respondents are happy with the
stylish looks of Hero bikes.

Graph no 4.5(a):
Showing the results for “the opinion of the respondents about the style of Hero bikes”
Opinion On Style
Attractive
Opinion On Style
Good
Need more changes
0 10 20 30 40 50 60 70 80

Table no 4.5(b):
Table showing “the opinion of the respondent about the fuel efficiency of Hero bikes”
Sl. No Fuel efficiency Respondent Percentage
1 Good 60 60%
2 Average 34 34%
3 Need to improve 6 6%
Total 100 100%
Analysis:
The above table shows that 60% of the respondents feel that the fuel efficiency of Hero bikes
is good, 34% feel that it is average and 6% say that Hero bikes must need to improve the fuel
efficiency.
Inference:
The above information says that maximum number of the respondent feel that the fuel
efficiency of Hero bikes is good.

Graph no 4.5(b):
Showing the graph for “the opinion of the respondent about the fuel efficiency of Hero
bikes”
Opinion Of Fuel Efficiency
60
50
40
Opinion Of Fuel Efficiency
30
20
10
0
Good Average Need to improve

Table no. 4.5(c):
Table showing “the opinion of the respondent about the maintenance of Hero bikes”
Sl. No Maintenance Respondent Percentage
1 Zero maintenance 2 2%
2 Very less 92 92%
3 More maintenance 6 6%
Total 100 100%
Analysis
The above table shows that 2% of the respondents feel that Hero bikes have zero
maintenance, 92% feel that Hero bikes have very less maintenance and 6% feel that it has
more maintenance.
Inference
The above information says that maximum number of respondent feel that the maintenance
of the Hero bike is very less.

Graph no 4.5(c):
Graph showing the result for “the opinion of the respondent about the maintenance about the
Hero bikes”
Opinion on Maintenance
More maintenance
Very Less
Zero maintenance
0 10 20 30 40 50 60 70 80 90 100
Opinion on Maintenance

Table no 4.6:
Table showing “through what mode has the respondent made the purchase of the vehicle”
Sl. No Mode of payment Respondent Percentage
1 Instalment 34 34%
2 Spot cash 66 66%
Total 100 100%
Analysis:
The above table shows that 34% of the respondents have made the purchase through
instalment and 66% have made the payment through spot cash.
Inference:
The above information says that maximum number of respondent have made the purchase
through the mode of spot cash.

Graph no 4.6:
Graph showing the result for “the mode of payment made by the respondent for the purchase
of vehicle”
Mode Of Payment
70%
60%
50%
Axis Title 40%
30%
20%
10%
0%
Instalment purchase Spot cash

Table no 4.7:
Table showing “what is the opinion of the respondent about the occasional discount/free
gifts offered by Hero”
Percentage
Sl. no Scale Respondent
1 Attractive 24 24%
Insufficient compared
2 38 38%
to others
3 Best offers 20 20%
4 Makes no difference 18 18%
Total 100 100%
Analysis:
The above table shows that 24% of the respondents feel that he discount offers and free gifts
provided by Hero motors is attractive, 38% say that it is insufficient when compared to
others, 20% feel that this is the best offer provided and 18% say that this does not make any
difference.
Inference:
The above information says that maximum number of respondent fell that the company is
insufficient compared to others when compared to others.

Graph no. 4.7:
Showing the results for “the opinion of the respondents about the discount offers and free
gifts given by Hero motors”
Opinion On Discounts, Offers & Free Gifts
18%
24%
Attractive
Insufficient compared to others
Best offers
Makes no differnce
20%
38%

Table no 4.8:
Table showing “what is the opinion of the respondent about Hero motor cycle?”
Sl. No Scale Respondent Percentage
1 Affordable 68 68%
2 Competitive 22 22%
3 Comparatively high 8 8%
4 Comparatively less 2 2%
Total 100 100%
Analysis:
The above table shows that 68% of the respondent feel that Hero motor cycle is affordable,
22% feel that Hero is competitive, 8% feel that it is comparatively high and 02% feel that it
is comparatively low.
Inference:
The above information provided says that maximum number of respondents feel that Hero
motor cycle is affordable and hence they would prefer to purchase Hero vehicles rather than
other companies.

Graph no 4.8:
Showing the results for “the opinion about the respondents about Hero motor cycle”
Price Of Hero Bikes
70
60
50
40 Price Of Hero Bikes
30
20
10
0
Affordable Competitive Comparitively Comparitively
high low

Table no 4.9:
Table showing “whether the respondent is satisfied with the after sales service provided by
Hero motor cycle”
1 Yes 82 82%
2 No 18 18%
Total 100 100%
Analysis:
The above table shows 82% of the respondents feel that the after sales service provided by
Hero motor is good and only 18% are not happy with the after sales service.
Inference:
The above information says that maximum number of respondent are happy with the after
sales service provided by Hero motors.

Graph no 4.9:
Showing “whether the respondent is satisfied with the after sales service provided by Hero
motor cycle”
After Sales Service
18%
Yes No
82%

Table no 4.10:
Table showing “what would a respondent like the most in the bike?”
1 Style 8 8%
2 Power of bike 10 10%
3 Mileage 48 48%
4 Maintenance 34 34%
Total 100 100%
Analysis:
That above table shows that 8% of the respondent would like the style of the bike, 10% like
the power of the bike, 48% would like it for its mileage and 34% like the maintenance of the
bike.
Inference:
That above information says that maximum number of respondent would like the mileage of
the bike instead of stylish looks or maintenance.

Graph no 4.10:
Showing the results for “what would be the most likely part in a bike for a respondent”
Likely Part in Bike
50
45
40
35
30 Likely Part in Bike
25
20
15
10
5
0
Style Power of bike Mileage Maintenance

Table no 4.11:
Table showing “for what purpose would a respondent purchase a bike?”
1 College 20 20%
2 Family 14 14%
3 Office 4 4%
4 All of the above 62 62%
Total 100 100%
Analysis:
The above shows that 20% of the respondents would use their bike for college purpose, 14%
would use it for the sake of family, 4% use their bike for office usage and 62% use their bike
for all the purpose.
Inference:
The above information says that maximum number of respondents would use their bikes for
college purposes.

Graph no 4.11:
Graph showing the results for “what purpose would a respondent use a bike”
Purpose of Usage
All of the
above
Office Purpose of Usage
Family
College
0 10 20 30 40 50 60 70

Table no 4.12:
Table showing whether Hero bikes are good on all roads?
1 Yes 72 72%
2 No 28 28%
Total 100 100%
Analysis:
The above table shows that 72% of the respondents feel that Hero bikes are good on all kind
of roads and only 28% feel that Hero bikes are not good on all roads.
Inference:
The above information says that maximum number of respondent feel that Hero bikes are
good and suitable for all types of roads.

Graph no 4.12:
Showing “the results for whether Hero bikes are good on all roads?”
Comfortable on all roads
28%
Yes
No
72%

Table no 4.13:
Table showing “how did a respondent got to know about Hero bikes”
1 Newspaper 6 6%
2 Advertisement 52 52%
3 Friends/Relatives 38 38%
4 Sales Executive 4 4%
Total 100 100%
Analysis
The above table shows that 6% of the respondent came to know about Hero bike through
newspaper, 52% came to know about it through advertisement, 38% got to know about it
through their friends and relatives and 4% got to know it through sales executives.
Inference
The above information says that maximum number of respondent came to know about Hero
bikes through advertisement.

Graph no 4.13:
Showing the result for “how a respondent came to know about Hero bikes?”
Got to know about Hero

60
50
40
30 Got to know about Hero
20
10
0
News Paper
Advertisment
Friends/Relatives
Sales Executive

Table no 4.14:
Table showing “what is the opinion of the respondent about the appearance of Hero bike?”
1 Super 12 12%
2 Excellent 4 4%
3 Good 76 76%
4 Better 8 8%
Total 100 100%
Analysis:
The above table shows that 12% of the respondents feel that Hero bikes have super
appearance, 4% feels that it has excellent appearance, 76% feel that Hero bikes have good
appearance and 8% feel that they have better appearance.
Inference:
The above information says that maximum number of respondents have good opinion about
the appearance of the bikes.

Graph no 4.14:
Showing the results for “the opinion of the respondent about the appearance of the Hero
bikes”
Appearance of Hero bikes
Better
Good
Appearance of Hero bikes
Excellent
Super
0 10 20 30 40 50 60 70 80

Table no 4.15:
Showing “the opinion of the respondent about the maintenance of the Hero bikes”
1 Expensive 4 4%
2 Affordable 64 64%
3 Average 20 20%
4 Cheap 12 12%
Total 100 100%
Analysis:
The above table shows that 4% of the respondent feels that hero bikes are expensive to
maintain, 64% feel that hero bikes are affordable, 20% feel that hero bikes are easy to
maintain as they are cheap and 12% feel that it is average to maintain.
Inference:
The above information says that maximum number of respondents feel that hero bikes are
affordable and hence, easy to maintain.

Graph no 4.15:
Graph showing the results for “the opinion of the respondent about the maintenance of the
hero bikes”
Maintenance of Hero bikes
Cheap
Average
Maintenance of Hero bikes
Affordable
Expensive
0 10 20 30 40 50 60 70

Table no 4.16:
Table showing “whether the respondent is comfortable with their bikes?”
1 Yes 88 88%
2 No 12 12%
Total 100 100%
Analysis
The above table shows that 88% of the respondents are comfortable with hero bikes and only
12% are not comfortable with hero bikes.
Inference
The above information says that maximum number of respondent is comfortable with hero
bikes.

Graph no 4.16:
Showing “the results for whether the respondent is comfortable with his bike”
Comfort of Hero bikes
12%
Yes
No
88%

Table no 4.17:
Table showing “whether the respondent would recommend Hero bikes to their friends and
relatives?”
1 Yes 90 90%
2 No 10 10%
Total 100 100%
Analysis
The above table shows that 90% of the respondent would like to recommend hero bikes to
their relatives and friends whereas, 10%of the respondent would not think of recommending
this to their friends or relatives.
Inference
The above information says that maximum number of respondent would like to recommend
hero bikes to relatives and friends.

Graph no 4.17:
Graph showing “the result for whether the respondent would recommend hero bikes to their
friends and relatives?”
Recommend Hero Bikes
90
80
70
60 Recommend Hero Bikes
50
40
30
20
10
0
Yes No

Table no 4.18:
Table showing “the ranking rates given by a respondent to hero bikes.”
1 01 2 2%
2 02 20 20%
3 03 40 40%
4 04 30 30%
5 05 8 8%
Total 100 100%
Analysis
From the above table we can analyze that the 35% of the respondents gave 02 rank to Hero
moto corp, 32% of respondents ranked hero as 03.
Inference
From the above details, we can interpret, that hero stood in 2nd rank in the market.

Graph no 4.18:
Showing “the results for the ranking rates given by a respondent to hero bikes”
Rating to Hero Bikes

2
5 1

CHAPTER-5
SUMMARY OF FINDINGS & CONCLUSION
FINDINGS
 From the survey it was found that most of the S. S. motors customers are satisfied
with the overall selling process of dealers.
 From the survey it was found that Male consumers are more than Female consumers.
 From the survey it was found that pvt. Employees are the more customers to Hero
bikes.
 From the survey it was found that the Hero bikes are purchased because it has less
maintenance cost
 From the survey it was found that the Hero Company is concentrated on mileage
rather than speed of the bike.
 From the survey the consumer of Hero Company are less income people because
Hero bike has very less cost of spare parts.
 From the survey the hero company gives best offers than the competitors.
 From the survey Hero bikes are affordable.
 From the survey Hero customers are satisfied with after sales service provided by SS
MOTORS.
 From the survey Hero company advertisement influence more on the customer to
purchase the hero bikes.
 From the survey I came to know that from 100 customers 92 customers are
comfortable with Hero bikes.
 From the survey 98% of the consumers will recommend their friends and relatives to
buy the hero bikes because of its good mileage, good after saleservice.
 From the survey over all Hero bikes are good for mileage: hero company has
concentrated on low income consumers.

SUGGESTIONS
 SS motors have to increase the promotion activity that which helps to increase the
female customers.
 It has to still improve on its processing time for the installment schemes with easier
forms and better management procuring installment schemes it can reduce on the
time factor
 More and more discount and better gifts help in gaining more customers, the
company should innovative curtain buy back scheme and heavy festival offers to
improve its sales.
 The pricing of HERO is also a major factors, with the increase in competition,
competitors are doing all they can to improve their sales. Hero should see to it that
the price range is so attractive that it soothes the eye and catches everyone's attention.
 The fuel efficiency and the maintenance have to be looked major factors influencing
the purchase of a vehicle. The company's R&D team has to look into the matter to
speed up its vehicle sales.
 Hero has to improve on its styling factor and make it more attractive.
 Hero has to from latest expertise in the field of bikes. Bikes designed for the various
segments of the society like the youth, middle aged men and the senior grades should
be made depending on the customer handling capability of the customer. learn know
how from foreign companies and even take guidance heavy duty engines and study
body make a life span of the bike more.
 Company should focus on the basic aspects like speed and style also
 Recommendations help increase the sales and profile of the company. With Increased
competitors are seeing to it that they capture the buyers and impress on them that
they are the best.

CONCLUSION
Once a business has identified its target market--the people most likely to purchase its ods
and services--it may divide the customers further using segmentation strategies. Customers
in these segments share one or more characteristics. Using this knowledge, the individual
responsible for marketing a business develops specific plans to reach these targeted
customers effectively. Segmentation allows companies to build relationships and loyalty in
customers by better providing for their wants and needs. Although a company could use
countless variables to segment its overall market, there are a few variables that are most
commonly used for customer segmentation.

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EFFECTIVENESS OF MARKET SEGMENTATION

ABOUT THE INDUSTRY

The automobiles sector is divided into four segments-two wheelers(mopeds, scooters,

 Largest three-wheeler market

RNS FIRST GRADE COLLEGE Page 1

Two Wheeler & its role in Indian Context:

RNS FIRST GRADE COLLEGE Page 2

Recently, Honda Corporation of Japan announced intentions to set up a 100% subsidiary to

RNS FIRST GRADE COLLEGE Page 3

RNS FIRST GRADE COLLEGE Page 4

RNS FIRST GRADE COLLEGE Page 5

RNS FIRST GRADE COLLEGE Page 6

RNS FIRST GRADE COLLEGE Page 7

The total number of registered two-wheelers and three-wheelers on road in India, as on

RNS FIRST GRADE COLLEGE Page 8

Major Developments & Investments

RNS FIRST GRADE COLLEGE Page 9

 The Government of India plans to introduce fuel-efficiency ratings for automobiles to

RNS FIRST GRADE COLLEGE Page 10

Graph showing automotive market segment.

Commercial Vehicles Three Wheelers

RNS FIRST GRADE COLLEGE Page 11

RNS FIRST GRADE COLLEGE Page 12

ABOUT THE SUBJECT

According to American Marketing Association (2004). "Marketing is an organizational

RNS FIRST GRADE COLLEGE Page 13

1. Marketing is an Economic Function

2. Marketing is a Legal Process by which Ownership Transfers

3. Marketing is a System of Interacting Business Activities

Marketing is that process through which a business enterprise, institution, or organization

4. Marketing is a Managerial Function

According to managerial or system approach-Marketing is the combination of activities

5. Marketing is a social process

Marketing is the delivery of a standard of living to society. According to Cunningham and

1. Knowing and understanding the consumers changing needs and wants

RNS FIRST GRADE COLLEGE Page 14

6. Marketing is a philosophy based on consumer orientation and satisfaction

7. Marketing had dual objectives. Profit making and consumer satisfaction

1. Study to Consumer Wants and Needs

2. Study on Consumer Behavior

3. Product Planning and Development

RNS FIRST GRADE COLLEGE Page 15

The premise of market segmentation is that to maximize sales to a large population of

The Four Types of Market Segmentation

STEPS IN MARKET SEGMENTATION

RNS FIRST GRADE COLLEGE Page 16

1. Identify the target market

2. Identify expectations of Target Audience

4. Review the needs of the target audience

5. Name your market Segment

Give an appropriate name to each segment. It makes implementation of strategies easier. A

RNS FIRST GRADE COLLEGE Page 17

7. Review the behavior

8. Size of the Target Market

RNS FIRST GRADE COLLEGE Page 18

2.1. TITLE OF THE STUDY

2.2. STATEMENT OF THE PROBLEM:

A customer segmentation analysis allows marketer to identify discrete group of customer

Customer segmentation will focus on long term customer life value.

2.3. OBJECTIVE OF THE STUDY

RNS FIRST GRADE COLLEGE Page 19

 Study of segmentation is not possible as whole and in depth.

2.6. TYPE OF RESEARCH

Descriptive Research Design