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Presented by: Anand Bugdane (70) Monika Agrawal (62) Purushottam Baviskar (68) Nishith Bahethy (64) Namisha

Balwani (66)

Driven By The Trust Of Our Customers

BIKE FOR ALL!!!

BIKE FOR ALL!!!


Forget priceunderstand the consumers cost to satisfy that want or need 1. Economy segment

2. Executive segment

3. Premium segment

PRICING
Sr.no 1 2 3 Brand name CD DAWN 97.2 cc CD DELUXE 97.2 cc Splendor + 97.2 cc 42,137.00 45,135.00 48,708.00 42,916.00 8 9 10 11 12 Glamour CBZ Xtreme 149.2 cc Hunk 149.2 cc Karizma 223 CC Karizma ZMR 223 CC 1,00,200.00 83,193.00 65,253.00 64,553.00 124 cc 53,700.00 38,806.00 36,179.00 Category Price(INR)

5
6 7

Splendor Nxg
97.2 cc Passion Pro 97.2 cc Pleasure 102 cc

Pricing Strategy

The pricing strategy was based on the brand positioning of HERO MOTOCORP. in the automobile industry as shown in the above BCG matrix.

Setting the price


Step 1: Selecting the price objective The objectives were survival, maximum market share and productquality leadership. Maximum Market Skimming o Skimming is referred to as selling a product at a high price; basically companies sacrificing sales to gain high profits. o This strategy is often used to target early users of a product/service because they are relatively less price sensitive than others. o Early users are targeted either because their need for the product is more than others or they understand the value of the product better than others.

Price Sensitivity

Step 2: Determining the demand : Due to the presence of many bikes in the same price range the elasticity of demand was very high. Hence with the decrease of prices, the amount of sales increased in volume.
Step 3: Estimating Cost : In the short run companys pricing strategy was to earn more profit and in the long run to invest that money for the technological advancement Step 4: Analyzing competitors cost, prices and offers : From the mistakes of Bajaj Pulsar, Hero Honda CBZ was able to take share away from the market pioneer of power bikes in India, and command the price premium in the process because of its performances advantages-smoother driving experience. Step 5: Selecting a pricing method : Hero MotoCorp did a mix of pricing methodology of Going Rate Pricing and Value Pricing. Step 6: Selecting the Final Price : While selecting the final price, Hero MotoCorp did set its price lower than its competitor to share the risk of launching a new product in the market.

Promotional Pricing: Special event prices were offered during festival seasons Zero interest financing was offered for some speculated period to attract customer Longer payment terms were provided to the customer so that the EMI would be less Three free service contracts were offered at the time of purchase. Differentiated Pricing: Market Research was done to differentiate among different income groups and their demand for Hero of different versions.

From the above data, Hero has introduced different versions of their bikes to meet different customer verticals and provide customer-segment pricing.

RESULTS: MARKET SHARE OF MOTORCYCLES IN INDIAN MARKET

2% 2% 13%

Hero
Bajaj Auto 12% 53% TVS Motors HMSI (Honda) Yamaha Others 18%