TWO-WHEELER AUTOMOBILE

INDUSTRY IN INDIA
By group IX, MBA ‘Sec A’

Submitted to : Submitted by :

Mrs. Smitha Nayak Anooj

Balachandra

Chandrakanti
 Shatrudra

Saurabh

ACKNOWLEDGEMENT

The satisfaction and joy that accompanies the successful completion of a task is incomplete
without mentioning the name of the person who extended her help and support in making it a
success.

We are greatly indebted to Mrs. Smitha Nayak

, our Project Guide and Mentor for devoting her valuable time and efforts towards our
project. We thank her for being a constant source of knowledge, inspiration and help during
this period of making project.

GROUP IX

Anooj

Balachandra

Chandrakanti

Shatrudra
 Saurabh

TABLE OF CONTENT

 Objective of the project

 Introduction to Indian automobile industry
 BCG matrix representation of automobile sector among various sectors
 Overview of two-wheeler sector
 Fleet composition of all vehicles
 Two-wheeler fleet composition in India
 Structure of two-wheeler industry
 Usage pattern of two-wheeler in India
 Key players in two wheeler industry
 Introduction & Product mix Hero Honda & Bajaj (competitor)
 4 P’s of marketing of Hero Honda
 Market segmentation, Targeting and Positioning of Hero Honda.
 Porters five force model for Hero Honda
 SWOT analysis of Hero Honda (Karizma)
 SWOT analysis of Bajaj (Pulsar)
 Comparison of advertising strategy of Hero Honda and Bajaj
 Future challenges ,Plans and Suggestions
OBJECTIVE OF THE PROJECT:-

The main objectives of the Project study are:

• Detailed analysis of Automobile industry which is gearing towards international

standards.

• To conduct market research with regard to two-wheeler automobile industry and

understand its marketing strategies.

• Analyze the impact of qualitative factors on industry’s and company’s prospects

• Comparative analysis of major tough competitor.

• To understand the current trends in two-wheeler automobile industry.

 INTRODUCTION TO INDIAN AUTOMOBILE
INDUSTRY
Automobile is one of the largest industries in global market. Being the leader in product and
process technologies in the manufacturing sector, it has been recognized as one of the drivers
of economic growth. During the last decade, well directed efforts have been made to provide
a new look to the automobile policy for realizing the sector's full potential for the economy.
Aggressive marketing by the auto finance companies have also played a significant role in
boosting automobile demand, especially from the population in the middle income group.

A Nations economy is well known from its transport system. For instant and rapid growth in
economy, a well-developed and well-networked transportation system is essential. As India's
transport network is developing at a fast pace, Indian Automobile Industry is growing too.
Also, the Automobile industry has strong backward and forward linkages and hence provides
employment to a large section of the population. Thus the role of Automobile Industry is very
essential in Indian economy. Various types of vehicles are manufactured by the Automobile
Industry. Indian Automobile Industry includes the manufacturing of trucks, buses, passenger
cars, defence vehicles, two-wheelers.

The two-wheeler manufacturing is dominated by companies like TVS, Honda Motorcycle &
Scooter India (Pvt.) Ltd., Hero Honda, Yamaha, Bajaj, etc.
The automobile industry in the country is one of the key sectors of the economy in terms of
the employment opportunities that it offers. The industry directly employs close to around 0.2
million people and indirectly employs around 10 million people. The prospects of the
industry also has a bearing on the auto-component industry which is also a major sector in the
Indian economy directly employing 0.25 million people.

BCG Matrix Representation of Automobile Sector among

various Sectors:-

In an economy, different industries are present and different industries have different
growth rate as compared to the growth of the economy. In an economy, there are a
number of major industries and they all occupy different positions in the BCG matrix
according to their growth and contribution towards the economy. In the Indian economy,
some of the major sectors are FMCG, automobiles, banking and insurance, steel, telecom,
software, pharmacology and retail sectors and these can be placed in the different
positions in the matrix as shown below:

INDUSTRY BCG MATRIX

Hig STA QUESTION

h Banking
&
M Telecom
a
AUTOMOBIL Retai
r
ES l
k
e Softwa
t re

G
r
o
w
t
h
R
 CASH DO

FMC
G

Low

Hig Relative market Low

share

BCG matrix is used to determine the relative position of the companies of an industry or
different SBU’s of any institution, in terms of the market growth rate and the market share of
the company in the industry. In the Indian automobile sector, the major players are Maruti
Suzuki Limited, General motors, Mahindra and Mahindra, Tata Motors, Hero Honda and
Bajaj auto. In the BCG matrix, the companies are placed in one of the following four
categories: Star, Cash Cows, Dogs and Question marks. In the Stars we place the companies
with high market growth and high market share, cash cows are the companies who have low
market growth rate and high relative market share, the category of the question marks include
the companies with low relative market share and high market growth rate and dogs include
the companies who have low relative market share and low market growth rate.

OVERVIEW OF TWO WHEELER SECTOR

Two Wheeler Industry

Indian two -wheeler contributes the largest volumes amongst all the segments in automobile
industry. This segment can be broadly categorized into 3 sub-segments viz.; scooters,
motorcycles and mopeds. In the last four to five years, the two-wheeler market has witnessed
a marked shift towards motorcycles at the expense of scooters. In the rural areas, consumers
have come to prefer sturdier 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 2008-09. The Euro emission norms effective from April 2000 led to the existing
players in the two- stroke segment to install catalytic converters. All the new models are now
being replaced by 4-stroke motorcycles. Excise duty on motorcycles has been reduced from
32% to 24%, resulting in price reduction, which has aided in propelling the demand for
motorcycles.

Within the two-wheeler industry, motorcycle segment grew at a phenomenally high rate of
35% as against a deceleration of 3% for scooters and 27% for mopeds. In fact, motorcycle
has been taking away the share of scooters and mopeds in a 4.3 million two-wheeler market
and surging ahead with its market share of 68%. The increasing demand from semi-urban and
rural segments may have caused this positive shift towards motorcycles. Also, easy credit
coupled with low interest rate regime, constrained personal transport, increasing income
levels in middle class and higher aspirations of young people all seem to be the factors
responsible for such high growth in two-wheelers. The growth in two-wheelers has been
robust enough to counter the slowdown and other factors constraining the overall business
activity in the country. Also, rationalization of excise duty in the Union Budget 2002-03 had
a positive impact on the demand for motorcycles. We also expect the motorcycles to continue
to lead the two-wheeler segment like in all other Asian countries. Available forecasts suggest
that this trend would continue for another couple of years and the industry would record
nearly double-digit average annual growth up to 2006.

During the year, there have been important developments in two-wheeler industry. The
competition has strengthened though there are hardly any new entrants into the industry.
There is an increasing emphasis on price and this has led to cost cutting efforts all across the
industry, thereby, making the customer an ultimate beneficiary. The trend also saw
introduction of new motorcycles with capacity ranging from 100 to 180cc bikes. We
anticipate that many more new models will be launched during the year and provide
customers plenty of choice at competitive prices.
Businesses cannot consistently grow at 25-30 per cent. Each business has a tendency to taper
and plateau after attaining a particular size. An annual growth rate of 10-12 per cent over a
period of time is extremely healthy.

The TCS study rankings are conducted at the motorcycle segment-level to provide
comparisons among similar groups of motorcycles. Motorcycles ranking highest in their
respective segments for TCS are: Hero Honda CD100 SS (best standard motorcycle
segment); Hero Honda Splendor (best executive motorcycle segment); Bajaj Pulsar (best
premium motorcycle segment); and Royal Enfield Bullet Electra (best cruiser motorcycle
segment).

The feeling of freedom and being one with the Nature comes only from riding a two wheeler.
Indians prefer the two wheelers because of their small manageable size, low maintenance,
and pricing and easy loan repayments. Indian streets are full of people of all age groups
riding a two wheeler. Motorized two wheelers are seen as a symbol of status by the populace.
Two wheelers in India are the second largest producer and manufacturer of two-wheelers in
the world. It stands next only to Japan and China in terms of the number of two-wheelers
produced and domestic sales respectively. Indian two-wheeler industry has got spectacular
growth in the last few years. Indian two-wheeler industry had a small beginning in the early
50's. The Automobile Products of India (API) started manufacturing scooters in the country.
Bikes are a major segment of Indian two wheeler industry, the other two being scooters and
mopeds. Indian companies are among the largest two-wheeler manufacturers in the world. In
the initial stages, the scooter segment was dominated by API; it was later overtaken by Bajaj
Auto. Although various government and private enterprises entered the fray for scooters, the
only new player that has lasted till today is LML.

The motorcycle segment was initially dominated by Enfield 350cc bikes and Escorts 175cc
bike. The two-wheeler market was opened to foreign competition in the mid-80s. And the
then market leaders - Escorts and Enfield - were caught unaware by the onslaught of the
100cc bikes of the four Indo-Japanese joint ventures. With the availability of fuel efficient
low power bikes, demand swelled, resulting in Hero Honda - then the only producer of four
stroke bikes (100cc category), gaining a top slot.
 The first Japanese motorcycles were introduced in the early eighties. TVS 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 90s the major growth for motorcycle segment was brought
in by Japanese motorcycles, which grew at a rate of nearly 25% CAGR in the last five years.

The industry had a smooth ride in the 50s, 60s and 70s when the Government prohibited new
entries and strictly controlled capacity expansion. The industry saw a sudden growth in the
80s. The industry witnessed a steady growth of 14% leading to a peak volume of 1.9mn
vehicles in 1990.

In 1990, the entire automobile industry saw a drastic fall in demand. This resulted in a
decline of 15% in 1991 and 8% in 1992, resulting in a production loss of 0.4mn vehicles.
Barring Hero Honda, all the major producers suffered from recession in FY93 and FY94.
Hero Honda showed a marginal decline in 1992.
The reasons for recession in the sector were the incessant rise in fuel prices, high input costs
and reduced purchasing power due to significant rise in general price level and credit crunch
in consumer financing. Factors like increased production in 1992, due to new entrants
coupled with the recession in the industry resulted in company either reporting losses or a fall
in profits.
Two wheeler fleet composition in India:-
 STRUCTURE OF TWO WHEELER INDUSTRY

➢ Mopeds:-

Over the last 15 years, moped’s contribution in overall 2-wheelers has declined significantly
and now it remains a marginal category with just one manufacturer for the product. Its
contribution in the 2-wheelers industry now stands at 5% and we expect that this segment
will continue to be marginalised. The only player in this segment is TVS Motor.

➢ Scooters:-

Advent of fuel efficient motorcycles in the Indian 2-wheelers industry led to decline of
Scooters. However, over the last five years, it has made a recovery and is emerging as a niche
segment targeted towards women commuters. One of the reasons for this is the increasing
need of mobility for the women commuters especially in the urban areas is due to higher
number of college going girls and greater participation of women in urban work force. The
product itself has gone for a complete revamp and now this category mainly consists of
gearless products. This segment is now dominated by Japanese manufacturers with HMSI
having the leadership. HH, which is a late entrant in this segment, has also cornered a
sizeable market share in the scooter segment. Another development in this segment is the
launch of battery operated scooters. However, given the high replacement cost for the
batteries, this has remained a marginal segment.

➢ Motor cycles and bikes:-

✔ Executive Segment

Executive segment is the largest motorcycle segment and this is the stronghold of market
leader HH. Competitors have tried to challenge HH in this segment, however all such
challenges have fizzled out over time. With higher growth in economy segment, the
contribution of this segment had come below 50% in FY06. However over the last three
years, it has made a strong come back and now accounts for almost 60% of the motorcycle
share.

✔ Premium Segment

This segment was creation of HH with 'CBZ' And ‘KARIZMA’; however major boost to the
segment was given by BAJAJ through 'Pulsar' which has dominated the segment. HH has
remained a marginal player in this segment and one of the reasons for this is presence of
HMSI in this segment. This segment remains a small segment in the Indian market with
contribution of around 23% to the motorcycle industry. This is the performance segment and
customers pay a premium for the novelty. Hence constant upgradation in the product is a
requisite for success in this segment.
Usage Pattern of two-wheelers in India

Is quite different from other countries

 Initial cost and fuel economy are highest priority.

 Low maintenance costs are desired.

 Small entrepreneurs and farmers conduct their business carrying loads.

 Very limited usage for sports bike.

 Indians prefer the two wheelers because of their small manageable size, low
maintenance, and pricing and easy loan repayments.

Key players in the Two-wheeler industry:

➢ Hero Honda motors ltd.

➢ Bajaj auto ltd.
➢ TVS motors company ltd.
➢ Yamaha motors India
➢ Honda motorcycle and scooters India
Motorcycles in India:

Bikes comprise a major segment of Indian two wheeler industry.

Companies :

Hero Honda Motors Ltd (HHML )

Hero Honda Motors Limited was established in 1984, as a joint venture between India's Hero
Group (world's largest bicycle manufacturers) and Japan's Honda Motor Company. And
created the world's single largest two wheeler company and also one of the most successful
joint ventures worldwide. During the 80s, Hero Honda became the first company in India.
Over 19 million Hero Honda two wheelers running on Indian roads today.

* Hero Honda CD Dawn

* Hero Honda CD Deluxe
* Hero Honda Glamour
* Hero Honda Glamour-Fi
* Hero Honda Karizma
* Hero Honda Passion Plus
* Hero Honda Pleasure
* Hero Honda Super Splendor
* Hero Honda Splendor NXG
* Hero Honda CBZ X-Treme

Bajaj Auto Ltd Company :

Bajaj is the first Indian two wheeler automobile company in the market since 1945 with the
name M/s Bacharj trading corporation private limited. In 1959 M/s Bacharj trading
corporation private limited change its name as Bajaj Auto Ltd. Bajaj Auto obtains license
from the Government of India to manufacture two- and three-wheelers vehicles in 1959.

* Bajaj Avenger
* Bajaj CT 100
* Bajaj Platina
* Bajaj Discover DTSi
* Bajaj Pulsar DTSi
* Bajaj Wave
* Bajaj Wind 125
* Sonic DTSi

TVS Motor Company :

TVS Motors is the third largest company in the two-wheeler industry with a market share of
16%. Infect, it is the only Indian company without a foreign collaboration in the two-wheeler
industry. When the company opted out of the collaboration with Suzuki in 2002, many
believed that TVS was headed towards extinction. But the company proved the doomsayers
wrong and came out with a very successful `TVS Victor'. TVS Motors Ltd. originally
incorporated in 1982 to manufacture two-wheelers in collaboration with Suzuki Motors of
Japan, TVS was one of the leaders in two-wheeler industry.

* TVS Apache
* TVS Centra
* TVS Fiero
* TVS Star
* TVS Victor

Yamaha Motor India:

Yamaha Motor Corporation is the auto mobile company of Japan (1953) which works in
India since 1955 and providing latest technology in India from last two decades. Yamaha
Motor India was incorporated in august 2001 as a 100% subsidiary of Yamaha motor
corporation, Japan

* Yamaha CruxS
* Yamaha G5
* Yamaha Gladiator
* Yamaha FZ 16

* Yamaha R15

* Yamaha Fazer
Honda motor:

Honda motors of Japan is not a new name in the two wheeler scenario in the country, they
were in a tie up with the Firodias owned Kinetic group. However in the late 90s they parted
ways after problems arose over issues like introduction of new models, advertising
expenditure, marketing strategies and other related issues. In the mid 80 Honda motors of
Japan joined hands with the largest bicycle maker of India the Hero cycles to create Hero
Honda which in a couple of decades or so have gone on to become the single largest
motorcycle company in the world. Though Honda has come on its own on the Indian market
yet it will be providing technological support to Hero Honda for the next ten years. Thus
presenting a unique situation in which the company will be in direct competition with the
company which it has been associated for nearly two decades. Honda Motorcycles and
Scooters India limited, a 100% subsidiary of Honda motor company Japan eventually entered
the Indian market with Honda Unicorn in 2004.

* Honda Unicorn

* Honda activa

Market share of tw o w heeler automobile

sector
Hero Honda

35.60% 27.50% Bajaj M otors

T VS M otors

Yamaha
M otors
Honda M otors

Others
9.50% 16%
4% 7%
Now further the marketing strategies of HERO HONDA and its competitor
BAJAJ will be analyzed.

HERO HONDA

➢ The Company was Incorporated on 19th January,1984 at New Delhi as a joint

venture.
➢ Today Hero Honda is the largest two-wheeler manufacturer in the world producing
more than 3 million units of two-wheeler per year.
➢ The company's most popular model is the Hero Honda Splendour, which is the
world's largest-selling motorcycle.
➢ Over 19 million Hero Honda two wheelers are on Indian roads today.
➢ Hero Honda CD-100 is the first four stroke motorcycle to be introduced in India in
100cc range.
➢ During the fiscal year 2008-09, the company has sold 3.28 million bikes.

PRODUCT MIX

SCOOTER BIKE 100CC 125CC 150CC 220CC

PLEASURE CD 100 AMBITION CBZ KARIZMA

SPLENDOR GLAMOR CBZ XTREME
SPLENDOR+
PASSION
PASSION+
 BAJAJ (COMPETITOR)
➢ Established in 1945.

➢ Started production of scooters in 1961 and became first two wheeler manufacturing
company of India.

➢ Bajaj Auto, is ranked as the world's fourth largest two and three- wheeler
manufacturer.

➢ Bajaj Auto is India’s largest exporter of two wheelers.

➢ During 2008-09, the company exported 772,519 two and three-wheelers recording a
growth of 25 percent over 2007-08.

➢ Exports now constitute 37 per cent in volume terms and 35 per cent IN value of net
sales.

PRODUCT MIX

100CC 125CC 135CC 150CC 180CC 200CC 220CC

BAJAJ CT DISCOVE PULSAR- PULSAR- PULSAR- PULSAR- PULSAR-
100, R, 135 150 180, 200 220
BAJAJ BAJAJ AVENGER
PLTINIA, WIND,
BAJAJ BAJAJ
WAVE XCD

4 P’s OF MARKETING OF HERO HONDA :-

PRODUCT

Hero Honda, which has a technology tie-up with Japan's Honda Motors, was currently
discussing the feasibility of manufacturing scooters for the Indian market, Mr. Munjal said.
However, the company has a binding clause with Honda's scooter manufacturing Indian
subsidiary, preventing it from making scooters till 2004.

Hero Honda Motors, India's largest motorcycle company, has launched the premium segment
223cc motorcycle Karizma priced at Rs 79,000 (ex-showroom, Delhi). Many of the products
which the company has started with have been phased off. Now the existing products are
Karizma, Ambition, CBZ, Splendor, Splendor+, Passion, Passion Plus, CD 100 SS, CD 100
and CD Dawn.

The TCS study examines customer evaluations at three distinct ownership periods: 1 to 6
months, 7 to 18 months, and 25 to 36 months. This helps in understanding the differences in
satisfaction during initial ownership, in-warranty and post-warranty ownership periods.
Satisfaction ratings decline as the length of vehicle ownership increases. However, Hero
Honda Splendor is among the few models to maintain consistency across the three ownership
periods.

PRICING

Pricing is a important component of marketing mix of the firm. Determining the prices of
different products of a firm is very difficult task of the marketing manager. Price denotes
money value of a product. If represent the amount of money for which a product can be
exchange. In other words, prices represents the money which the buyer pays to the seller for a
product price represent the exchange value of goods and services in terms of money. Price is
all around.

Price factor has very well been touched by the manufacturers. The pricing strategy of the
company is very set. They price their product according to the cost of production and also by
keeping an eye on the price of the competitors of that segment and demand of the product in
the market.

A pricing strategy that ensured an average manufacturer margin that game dealer an adequate
return and created a reputation with consumers like “a company selling a good quality
product at a reasonable price. Industry focus themselves the low cost producer with good
quality and aimed to maintain the price advantage in every market of two wheelers.

Hero Honda group ensures an easily affordable pricing through excellent transportation to
common man. It fixes customer centric pricing that provide customer total satisfaction.

Hero Honda’s pricing objectives are: List price, Discount, Financing schemes, Credit terms,
and Maximize profits

Hero Honda group ensures an easily affordable pricing through excellent transportation to
common man. It fixes customer centric pricing that provides the customer with total
satisfaction.

PLACE
CHANNELS OF DISTRIBUTION:

As a company, dealers play a major role in serving customers, while growing and sustaining
markets. Hero Honda has a network of more than 3500 strong and dedicated Authorized
dealers. A network that has helped Hero Honda’s name and its promise of reliable quality to
every part of the country. The power of this highly efficient and motivated network goes a
long way to create goodwill for Hero Honda brand among countless consumers besides
creating availability and after sales services.

The channel of distribution is a direct dealer network. A direct dealer is a dealer who is
authorized to purchase the product directly from the company and sell.

PHYSICAL DISTRIBUTION:

Hero Honda has more than 3500 showrooms in India. Some of the Authorized dealers of
Hero Honda Karizma, in and around Bombay, are:

• Max Motors (Bombay)

• F. P. Motors (Bombay)

• Axis Motors (Thane)

• Ranjeet Motors (Thane)

• Ahir Motors (Kalyan)

• Spectra Motors (New Bombay)

• H. M. Motors (Panvel)

PROMOTION

Promotional tools

1. ADVERTISING: It is defined as a paid non-personal communication with a target

(usually mass) market. It is cost effective and can reach a large number of people. It can
also be used for long term or short term objectives.

There are various forms or mediums through which can advertise.

A. Broadcast Media:

• Television
• Radio
• Cinema

B. Print media:

• Newspapers
• Magazines
 • Leaflets

C. Outdoor media:

• Posters and billboards.

1. PUBLIC RELATIONS AN PUBLICITY:

Public relations are an umbrella term and refer to the totality of the organization’s
behavior with respect to the society in which it operates. The maybe regarded as good or bad
and is reflected in the company’s reputation and image.

2. SPONSORSHIP:

Sponsorship can be seen as a part of public relations and it is certainly the case that some
sponsorship goes on to generate positive publicity for the organization.

The company has not left any stone untamed in sponsoring the major events both globally
and domestically. The biggest of all is the sponsorship of the “WORLD CUP” for which
Hero Honda has the credit of being the only two-wheeler company in the world to do so.
Recently they are sponsoring the Hockey World cup. Besides this, the company has also
sponsored events like “Master Golf”, television academy awards, etc,
Thus the company has gained a lot of reputation by doing so.

3. DISCOUNTS/OFFERS:
The company has started giving discounts and other offers to the customers on the
purchase of a new bike, for instance, with the World Cup offer, in which the consumer was
to get a 1 gm gold coin with every purchase.

But after all these schemes and benefits may be because of cut-throat competition in the
segment with heavyweight competition such as Bajaj, kinetic, Yamaha, and TVS the
company (HERO HONDA) officially says:

“Our aim is to proactively and consistently deliver value to the customer. We are giving
back to the customer after becoming successful. Most companies give discounts only when
their products are not doing well in the market. There is lost of competition in the segment,
especially from Bajaj. But the reason for Hero Honda’s success it that we are consumer-
focused while other companies such as Bajaj tends to be more competitor-focused.

4. Test ride and Road show

PROMOTION POLICY:

➢ Company gives advertisement in different media vehicles time to time. Like in TV.
Magazines, newspaper, etc.
➢ Hero Honda also organizes free service camps every year.
➢ Hero Honda also takes art in trade fair.
 ➢ Hero Honda with the help of ICICI Bank provides loan to the customers & also
provide easy monthly installment scheme to customers.
➢ Hero Honda gives huge commission to their dealers.

Advertisement, local events sponsorship and promotions and inviting a prominent personality
for the inaugural or first like delivery function would contribute effectively in generating a
wider local interest and attention.

Hero Honda’s latest DKD –2 commercial its two brand starring its Ambassador and India’s
heart throbs, Hritik Roshan and Sourav Ganguly, truly reflects the multi fact roles that
today’s new generation plays. The commercial reflecting the charisma and vibrancy of these
two stars, takes Desh Ki Dhadkan to dazzling new heights. It is young, colorful and vibrant
and represents the icons of contemporary times. And it will go a long way in strengthening
the leadership status of the product by the mile.

The new commercial is powerful film repeat with an impressive storyline. The effort to pack
the story, drama and impact in just 60 seconds was phenomenal challenge itself. The idea was
born itself. The idea was born out of the very essence of “Hero and Stars”. Keeping in mind
would cause on the drama and impact it would cause on the audience. It is a commercial
packed with action where today’s heart throbs, Hritik and saurav, are seen tackling new roles.
The story being in a field adjoining a hill with two cool men, Hritik and Sourav on Hero
Honda bikes and Passion respectively.

Both Sameer and Aditya win lifetime opportunity act with Hritik and Sourav, the two star
heartthrobs of millions in India and all four will be seen in action in the new commercial
DKD-2.

These are some of the Slogan for every product (Bike) and these are following:-

CD-100 : Fill it, shut it, Forget it.

CD100SS : Tough and Rugged.

Splendor : Designed to Excel.

Street Smart : License to enjoy.

Passion : When style matters, Bike born in studio not in factory.

CBZ : Motorcycling Unplugged.

MARKET SEGMENTATION OF HERO HONDA

➢ Demographic Segmentation

 Income: HERO HONDA products are offered to the public taking into
consideration all the income groups in the society.

 Age: The main segmented group for the motorcycle are 18 years and
above.

 Occupation: All kinds of people are taken into account. Students,

professionals, Govt. Servants, etc.

➢ Geographic Segmentation : The potential customers are basically

from every regions of India.

➢ Psychographic segmentation : People purchasing bikes are very

economical, quality, brand conscious and loyality.

➢ Behavioral segmentation : This segmentation is done considering

user status, benefit wise.
 TARGETING AND POSITIONING OF HERO HONDA

TARGETING

The proposed targeting people in the age group of 18 years and above with a average
monthly income of approximately Rs. 10,000 and above, who are brand loyal and
who are either students or retired individuals or may be employed as professionals,
government servants or having their own business, but mostly male i.e on the
different stratas of the population.

POSITIONING

The image that Hero Honda creates in the mind of the customers is the faith. T he
add shown by it says “Desh ki Dhadkan”. That means it’s a member of the Indian
family. It represents the Indian culture and society.

The objectives can be achieved through the implementation of suitable marketing strategy by
the organisation. It is the marketing logic that is formulated keeping in mind the needs of the
consumers and also strategies of the competitors.
Porters five force model for Hero Honda:-

Bargaining Power of suppliers:

Suppliers of auto components are fragmented and are extremely critical for this industry since
most of the component work is outsourced. Proper supply chain management is a costly yet
critical need.
Bargaining Power of Buyer:

Buyers in automobile market have more choice to choose from and the increasing
competition is driving the bargaining power of customers uphill. With more models to choose
from in almost all categories, the market forces have empowered the buyers to a large extent.

Competitive rivalry:

The industry rivalry is extremely high with any product being matched in a few months by
competitor. This instinct of the industry is primarily driven by the technical capabilities
acquired over years of gestation under the technical collaboration with international players.

Threat of substitute Products:

There is no perfect substitute to this industry. Also, if there is any substitute to a two-
wheeler, Bajaj has presence in it. Cars, which again are a mode of transport, do never directly
compete or come in consideration while selecting a two-wheeler, cycles do never even
compete with the low entry level moped for even this choice comes at a comparatively higher
economic potential.

Threat of new entrants

Here the threat of new depends on the economies of scale of the cost of production

, and customer switching costs, access to industry distribution channels.

S.W.O.T. ANALYSIS OF HERO HONDA (KARIZMA):-

STRENGTH:

• It has a good speed and sporty look

• Karizma is the First bike in India launched under Sports Bike
Segment.
• Loyal Customer Base: In the past four years, Karizma has been
successful in building up a good and loyal base among its customers.
• After Sales Service: Till today, customers are satisfied with the after
sales service provided by Hero Honda for this particular product.
• Refinement, comfort, great handling and that much-sought-after
big bike feel are all available on the Karizma.
• Brand Recall: the name Karizma itself is a metaphor to its success. The
brand Karizma has given a good platform to this product in the Sports
Bike Segment.

WEAKNESS:
• High Maintenance: The maintenance of Karizma is high as compared
to its biggest competitor Bajaj Pulsar 200cc and 220cc.
• Fuel Efficiency: The pulsar 200cc offers an impressive mileage of
38.3kpl in city and 42.4kpl in highway against the Karizma offers only
30kpl in city and a decent figure of 45kpl in highway.
• Less Promotion: the promotions and ads of Karizma are very less as
compared to its competitors.

OPPORTUNITIES:

• If Hero Honda comes up with the idea of changing some features of

Karizma, like self cancelling indicators, soft touch handle bar and digital
speedometer, it will help them to boost up the sales of Karizma.
• If they are able to improvise the fuel efficiency of Karizma, it will
be a golden opportunity to take over the market.

THREATS:

• The major threat faced by Hero Honda Karizma is from Bajaj Pulsar,
who has always been the market leader in the 150 plus segment with
60% market share.
• Karizma’s strong competitors Bajaj and TVS, in 150 cc plus segment,
already posses certain features like self-controlling indicators, soft
touch handle bar which Karizma lacks.
• The competitor Pulsar 200cc has already come up with oil cooled
engine which delivers maximum power. This is again a major threat to
Karizma.
 S.W.O.T. ANALYSIS OF BAJAJ (PULSAR
220cc)

STRENGTHS:

• Pulsar 220cc features India’s First Oil Cooled Engine which delivers
maximum power making it most powerful engine offered by Bajaj.
• New Pulsar also provides Digital Speedometer, Self Canceling
Indicators which is for the First time in this segment in India.
• Fuel efficiency: Pulsar 220cc delivers an impressive mileage of 38.2
kmpl in city as compared to Karizma which delivers 30 kmpl in city.
• Customer Base: In past decade Bajaj has established a strong base
amongst its customers.

WEAKNESS:

• Style and Design: PULSAR 200cc and 220cc derives their styling from
there previous version Pulsar 150 Dts-i and 180 Dts-i.
• Pricing; Bajaj 220cc (Rs 82449 basic price) is costlier than karizma(Rs
78000 basic price)

OPPORTUNITIES:
• If they derive new styling, shape, design for pulsar 200cc and 220cc
then they can attract more customers.
• Taking into consideration the reviews of the customers regarding the
“fairing” of 220cc and making the needful changes will be an
opportunity to capture an even larger share of the 200cc+ segment

THREATS:

• The biggest threat is faced from the goodwill of Karizma in this

segment who is the “Four-Stroke Two Wheeler Ruler” of the Indian bike
market.
• Certain technical faults in the bike design which are potentially
dangerous to the rider’s safety can be disastrous to the image of the
bike.

COMPARISION OF ADVERTISING STRATEY OF HERO HONDA AND BAJAJ

ADVERTISING STRATEGY OF HERO HONDA:-

 Currently the number one company in terms of sales and has been dominant in the two-
wheeler segment since the past decade. Since the inception of hero Honda, the company has
been using television as a major role for its publicity. Though hero Honda was dominant in
sales it lacked the skills of creating a spectacular ad till now. Though it had a vast range of
mobiles, its advertising strategy was not up to the mark. For its publicity hero Honda has
been using many famous celebrities like Saurav Ganguly, the captain of Indian cricket team,
Hritik Roshan and other famous personalities as their brand ambassadors. Thus, hero Honda
has been spending huge amounts on its publicity.

The biggest of all is the sponsorship of the “WORLD CUP” for which Hero Honda has the
credit of being the only two-wheeler company in the world to do so.

Presently they have tried to gain publicity by sponsoring the hockey world cup event which is
the national game of India. There by creating a sense oneness and Nationalism through
providing publicity and encouragement to the game by various ad’s.

ADVERTISING STRATEGY OF BAJAJ:-

Bajaj is always known for its outstanding ads over the period of time. Since its
inception, Bajaj has come out with variety of ads and were always successful in their
advertisements. Scooters were well known by the brand name of Bajaj. Be it any scooter, one
used to recognize it by the brand name Bajaj. This was the identity a decade ago which the
Bajaj has still maintained. Bajaj is always known for its ads without well-known brand
ambassadors which is again a plus point to its cart as it saves a huge cost in terms of brand
ambassadors unlike Hero Honda and TVS. Prior, Bajaj used to convey the feeling of
‘Indianness’ in its ads. With a punch line ‘Hamara Bajaj’ Bajaj drove into everybody’s hearts
and the title song of ‘Naye Bharat Ki Naye Tasveer’ added a great value to its mobikes and
scooters.
 A couple of years back, Bajaj had introduced an advertisement which promoted all
the different ranges it had, wherein they had shown each product they had with a feeling of
Indianness. Example: Eliminator passes-by a rangoli and drives slowly sideways without
disturbing it. People on boxer pass-by a temple and bend their head to give a little offering.
Such ads had revealing Indian culture had a great effect on Indians and Bajaj was successful
in most of its ads.

But recently, Bajaj had changed its brand logo along with its punch line i.e. ‘Hamara
Bajaj’ got converted to ‘Inspiring Confidence’. The reason for this change as told by the
company officials was to keep pace with the new technologies in the fast moving world.
Even though it had changed its punch line, it didn’t have much effect on its brand image.

A year back, Bajaj introduced DTSi technology upgrading its always successful
PULSAR 150cc and 180cc. Though Bajaj had changed its identity it still dominates for its
creativity in ads.
Future Challenges and Plans:-
• Sustaining the growth rate.

• Need for innovation – low cost/ hybrid vehicles.

• Upgrading Indian two-wheeler products.

• Taking the products to the global market.

• Capturing Indian as well as global market.

Suggestions:-
• Encourage exports.

• Provide various two-wheeler financing schemes among

manufacturers.

• Open R&D centers.

• Pressurize government to reduce taxes and duties.

• Collaborate with global players.

Conclusion :-
The outlook for India’s automotive sector is highly promising. In view of
current growth trends and prospect of continuous economic growth of
over 6 per cent, all segments of the auto industry are likely to see
continued growth.

Large infrastructure development projects underway in India combined

with favourable government policies will also drive automotive growth in
the next few years.