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Q: Marketing Strategy A: Marketing Mix of Hero Honda Karizma ZMR Product: Product name: - Hero Honda Karizma ZMR

R Brand Name: - Hero Honda Features: -

ENGINE SPECIFICATIONS Displacement: Engine: Maximum Power: Maximum Torque: Gears: Clutch: Bore: Stroke: No. of Cylinders: Chassis Type: Cooling Type: 0 to 60: 223cc 4 Stroke, Fuel Injection, OHC 17.6 Bhp @ 7000 rpm 18.35 Nm @ 6000 rpm 5 Speed Multiplate Wet 65.5 66.2 1 Tubular Single Cradle, Diamond Type Liquid Cooling 3.70 sec.

OTHER SPECIFICATIONS Weight: 159.00 kg Ground 159.00 mm Clearance: Fuel Tank: 16.00 ltrs Wheel Type: Die Cast Black Alloys Front - 80/100x18 47P Wheel Size: Rear - 100/90 18 56P mm Tyres Tubeless Colors: Pearl White, Sports Red, Vibrant Blue, Moon Yellow & Panther Black

Speedometer: Top Speed:


Design: o

Digital 126kph

In the early years Hero Honda Karizma gained a lot of acceptance, later sales went going down for the Hero Honda which they felt was a serious problem. The solution to diminishing Karizma sales was a new model, the Karizma R. Karizma R model was not a different bike from its predecessor the only difference it received was red alloys. Cosmetic change didnt help the Karizma to hold on the road. People at Hero Honda took the matter too serious and brought something that was refreshed, Karizma ZMR. The design of the new Hero Honda Karizma ZMR in India is totally reworked and takes minimum cues from its predecessor. The ZMR looks sportier with new full fairing which resembles to international styled models. The faring is made of overlapping surfaces covering reworked engine painted in gold. The side of the front cows has big ZMR vinyl which is very similar to that found on the Hayabusa Kanjis. Like most other sport models Hero Honda dropped the kick start for Karizma. Hero Honda Karizma ZMR is magic touched almost everywhere. With no stone left unturned Hero Honda Karizma in India receives large digital instrumentation with a round LCD digital tachometer which dominates the instrument panel.

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Warranties: o o Hero Honda Karizma ZMR comes with a maintenance-free battery. It comes with a breakthrough 3yrs or 40,000 kms warranty (whichever happens first, from the date of purchase).

Price: Hero Honda Karizma ZMR is currently available at the price of Rs. 1,09,500 (on road price). Hero Honda here follows the premium pricing strategy here. The final price may actually increase for the customers since they also have the options of choosing from the various accessories and colours.

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Discounts: o Normally Hero Hondas dealers give discounts during festival seasons or on some special events, but in the case of Karizma ZMR that is rarely seen. The reason behind the same is that it is targeted towards the premium segment, whose purchase decision is not influenced by price discount.

Place: -

Manufacturer

Dealers

Customer

Sub - Dealers

Channel: o Hero Honda has a very strong distribution channel all throughout the nation. This affects the availability and serviceability of the product in a positive way. Normally the distribution channel goes from manufacturer to dealers and from dealers to customer. In some cases (especially in small towns) there are sub dealers involved, which take product either from dealers or directly from the manufacturer.

Transportation: o o The manufacturers have their own transportation facility. The manufacturers have truck which can load 18-25 units of bikes at a time, individually. When the units are dispatched from the factory, or manufacturing unit, it is in its standard form and accessories like seat cover, handle cover, rear view glass, and others are not part of the standard unit of two wheeler of Hero Honda. The transportation trucks straightaway reach the warehouse of the dealers. In case the warehouse of the dealer is not there then the trucks straight away come to the dealers showroom.

Inventory: o The stock is normally stored in the stockyard of the company, along with other models.

The vehicles are generally in display for in the dealers showroom, where the customers are handled by the sales representatives.

Assortments: o The dealers are also required to set-up the servicing facilities for the bike. These service stations have well trained mechanics, which are ready to provide their services to the customers. The dealers for the same reason are also required maintain the good stock of spares and accessories. The dealers also prefer to store high numbers of vehicles having colour which is highly preferred by the customers.

Promotion: -

Television Ads o Hero Honda Karizma ZMR has Hrithk Roshan as its brand ambassador. All the previous models of Karizma also had Hrithik as its brand ambassador. The tagline of Karizma ZMR is Above All. The bike is targeted towards the segment that thrives upon adventure, fun and passion, the tagline thus goes well with it. The video ad also conveys this message perfectly.

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Sponsorship o Karizma ZMR is also the sponsor of very famous reality show named Roadies. This goes very well with the positioning of the bike which is targeted towards the specific segment, which cherish the excitement and adventure. Karizma ZMR hasnt shy away from being co-sponsor of cricket tournaments, where usually the man of the series are awarded with the bike.

Print Ads o Karizma ZMR did a heavy print media campaign, where the all new Karizma ZMR was shown with its brand ambassador Hrithik Roshan. The ad was displayed in all the leading newspapers as well as magazines.

Outdoor Marketing o Karizma ZMR also did outdoor marketing campaign, where the hoardings of the bike were visible in the prime locations of all the metros and major cities of India.

Q: - Pricing Process and Pricing Techniques A:Following are the steps in setting price for the product: 1. Selecting The Pricing Objectives: - Before deciding upon the price of the product, a company needs to make sure that what goal it desires to achieve after setting up a particular price. Following are the possible pricing objectives: a. Survival b. Maximise Current Profit c. Maximise Market Share d. Maximise Market Skimming e. Product Quality Leadership The decision whether to select high price or low price depends on various factors: I. II. III. Price susceptibility of the market, Numbers of competitors in the market, and Production cost per unit.

The price level also depends upon the type of marketing strategy adopted for the product. Following are the possible marketing strategies:o Skimmed Pricing: - In this pricing technique the initial prices are set high in order to recover the initial capital spent on developing the product. Here the product also usually offers some unique feature, quality or service. This technique is generally used when a product with breakthrough technology is introduced into the market. E.g. the prices of mobile phones during earlier years of its introduction. Penetration Pricing: - Set initial prices low at first to quickly penetrate the market. As business develops, gradually raise prices to a more profitable level.

2. Determining The Consumers Demand: At this level we analyse the demand of the product in the market at various set of prices. In normal case, the demand and price are inversely related, i.e, the higher the price, the lower the demand, and vice versa. But some goods have 'elastic' or 'inelastic' demand. For example, demand for automobiles, perfumes, etc. are elastic; whereas the demand for rice, flour, eggs, etc. are inelastic.

3. Estimating Costs: The main objective of estimating the cost is that we should be able to set a price that covers the cost of production, selling and distribution of the product and plus a decent return for your efforts and risks. 4. Analyse the competitors cost, prices and offers: We should consider your nearest competitors price, product features and evaluate them to check their worth to the customers. We can then decide to charge more, same as competitor or less. E.g. any company introducing its product in the competitive market usually does the same. 5. Select Pricing Methods: The company has to select an appropriate method for pricing its products. Following are the suggested pricing methods: a. Mark-up Pricing: - This is the most basic way to set price. You add a standard mark up to the products cost. As a manufacturer, assume you want to earn a 20 percent mark up on sales, estimate the total cost (fixed & variable) of production and then add a standard mark up of 20 percent for profit. b. Target Return Pricing: - You begin by deciding what rate of return you want from your investment. Say your target rate of return on investment is to achieve 15 to 20 percent ROI, start by determining a price that would yield to this target. This pricing method works on condition that the cost and estimated sales turn out to be accurate. c. Perceived Value Pricing: - The market price of product is calculated on the basis of customers perceptions about the product. It is extensively used in non-durable consumer goods manufacturing companies. E.g. Olay total effects cream is charged very high. d. Value Pricing: - Here we charge fairly low price for a high quality offering. This strategy is generally used in IT hardware industry as well as in electronic goods manufacturing industry. e. Going Rate Pricing: - In this method we set the prices of our product depending upon the prices of the competitors product. This method is generally used in FMCG industry involving edible items and the goods used in daily life cycle. 6. Select The Price: The final step is to decide the price of the product. This price should have the potential of fulfilling the companys short term as well as long term goals.

Pricing Techniques: -

Geographical Pricing: - Geographical pricing refers to the product pricing for


the customers in different locations, cities and countries. It also accounts for various tariffs, taxes and shipping costs. Loss Leadership Pricing: - Select one item, and advertise it at below cost to create store traffic and sell other regularly priced items. Loss-leader pricing is appropriate for items that already have low margins, but can drive sales of accessories or related items. Generally implied by malls. Prestige and Image Pricing: - This is non-price competition. The business offers the finest merchandise, the best service, free delivery, or friendly, knowledgeable clerks in plush, convenient surroundings. E.g. prices of Kingfisher Airlines. Bundling or Unbundling Prices: - Sell products or services together as packages or break them apart and price separately. Season tickets, stereo equipment, and automobiles use this strategy. Time Period Pricing: - sseasonal Discounts are allowed on off-seasoned buying. For example, warm-wear in June-July, cold drinks in December-January, etc. Trial Pricing: - Make it easy by lowering the risk for a customer to try out what you sell. Special health club starter memberships, and free hours of on-line computer access are examples. Trial pricing is beneficial for new products or services that have not been fully accepted. Value-added Pricing: - Include free or low-cost value-added services, without raising the price, to appeal to bargain shoppers. Special reports to accompany a magazine subscription and hotel airport pickups are examples. Pay-one Price pricing: - Provide unlimited use of a service or product at one set price. All-you-can-eat buffets, super passes at amusement parks, and copier service contracts are examples. Performance Pricing: - Performance or value received determines the amount customers pay. Contingent fees to lawyers, investment managers compensation tied to performance, and games of chance or skill are examples. Captive Pricing: - Here the companies lock their customers by selling the product at a low cost and then maximising the revenue by charging high for its peripherals or servicing. E.g. Tata Sky or all DTH companies which sell the Dist & Set Top Box at low price and then charge for the channel packages. Product-line pricing: - Establish a range of price points within your line. Structure the prices to encourage customers to buy your highest-profit product or service. Luxury car lines have high-end models that enhance the prestige of the entire line. Differential Pricing: - Charge each customer or each segment what each will pay. Car sellers try to get the best deal they can from everyone. Golf courses offer discounts to local citizens. Financial planning fees often relate to income level.

Fixed, then Variable Pricing: - Here companies usually charge a particular price from customers just to start their services and then the remaining price is charged depending upon the usage. It is generally used in Taxi or Post-paid mobile service providers. Odd Pricing: - Use pricing figures that end in 5, 7 and 9 for psychological reasons. Consumers tend to round down a price of $39.95 to $39, rather than rounding it up to $40, and they see it in the $30 price range rather than the $40 price range. Cash Discount Pricing: - Consider giving discounts to customers who pay with cash or check today or within a very limited time, rather than 30, 60, or 90 days in the future. You have the money, it saves you billing and clerical costs, and it eliminates bad debts. Quantity Discount Pricing: - Quantity discounts are the price reductions generally allowed on bulk purchases, for example, 1% on less than 1000 units, 2% on 1000 units or more than 1000 units. The rationale behind them is to obtain economies of scale and pass some (or all) of these savings on to the customer. Functional Discount Pricing: - functional discounts are allowed to channel members if they perform various functions like distribution, storing, shelfstocking and record keeping. Also known as 'trade discounts'. Trade discounts are often combined to include a series of functions, for example 20/12/5 could indicate a 20% discount for warehousing the product, an additional 12% discount for shipping the product, and an additional 5% discount for keeping the shelves stocked. Volume Packaging Pricing: - Slightly lowering the price per unit of measure encourages purchasing more of the item. Buying 100 pounds of cat litter, or 48 ounces of shampoo, at one time in one container are examples. This pricing technique works when packaging costs are a high portion of total product cost.