MINOR PROJECT REPORT

ON
MARKETING STRATEGIES OF
HERO MOTOCORP
Submitted in partial fulfillment of the requirement of

Bachelors of Business Administration (BBA)

BATCH :BBA-2014-2017

JIMS VASANT KUNJ

FACULTY GUIDE
MS. SILKY GAUR
DESIGNATION

SUBMITTED BY:
NAVPREET SINGH SACHDEVA
05314201714
BBA IIIRD SEM

CERTIFICATE

Roll no 05314201714 student of BBA of: Guru Gobind Singh Indraprastha

University New Delhi, hereby declare that the project report on Marketing Strategies

Of Hero Motor Corp. is an original and authenticated work done by me.

I further declare that it has not been submitted elsewhere by any other person in any of the
institutes for the award of any degree or diploma.

(Ms. Silky Gaur)

Project Guide

ACKNOWLEDGEMENTS

A lot of effort has gone into this training report. My thanks are due to many people with
whom I have been closely associated.
I would like all those who have contributed in completing this project. First of all, I would
like to send my sincere thanks to Ms. SILKY GAUR for her helpful hand in the completion
of my project.
I would like to thank my entire beloved family & friends for providing me monetary as well
as non monetary support, as and when required, without which this project would not have
completed on time. Their trust and patience is now coming out in form of this thesis

CONTENTS

S No
1
2
3
4
5
6
7

Topic
Certificate
Acknowledgements
Executive Summary
Chapter-1: Introduction
Chapter-2: Introduction to Company
Chapter-3: Research Methodology
Chapter-4: Data Analysis and

Page No
2
3
5
16
42
43

Presentation / Study of Topic

Chapter-5: Finding and

50

9
10

Conclusions
References/Bibliography
Appendices

53
-

CHAPTER 1: CONCEPTUAL DISCUSSION

Hero Honda Rebranding to Hero Motocorp

The year 2010 marked the end of one of the worlds most successful corporate
marriages Hero Honda and a new beginning for The Munjals of the Hero Cycles
Ltd. Back in 1984, the two firms shared a common belief that India with its
burgeoning population, low per capita income and unorganized public transport
system, would be in need of frugal means of personal transportation. Hero with its
inherent knowledge of selling products in India was the champion in Sales &
Marketing and Honda was the undisputed leader in two wheeler technologies
worldwide. After 26 years of sharing technology to make the most economical and
fuel efficient motorcycles for the Indian consumers, Honda Motors decided to move
out of the joint venture. This divorce enables the Hero Group to export its
motorcycles to other nations which was not possible earlier and brings us to an
exciting birth of a new brand Hero MotoCorp.

The worlds largest manufacturer of two-wheelers by volume sales for nine

consecutive years since 2001and one of The Forbes 200 Most Respected Companies
in the world Hero Honda has come a long way. With a massive 5 million strong
consumer base and more than 20 million two-wheelers on Indian roads, Hero Honda
truly became Desh Ki Dhadkan with DhakDhak image touching the hearts and strings
of everyone across the nation. Rebranding this big a brand would be a mammoth task
in order to move out of the mould of Hero Honda and ride into newer and different
horizons. The Hero Group roped in London-based Wolff Olins -a global brand and
innovation specialist, to work on its new identity including the brand architecture,
brand name, brand logo and brand positioning with an underlying theme of Creation,
Renewal and Re-energizing the brand. The entire re-branding exercise would involve
a gradual shrinkage of brand Honda and place Brand Hero on all its products by
2014.
The new logo shows the letter H in capital with a clear white background along with
Hero written beneath in Red. The black color in the logo stands for solidity and
premiumness while the Red gives a feeling of energy, passion, and confidence. To
represent Hero in 3D, the logo even has a triangle, trapezoid and a parallelogram in
the first letter of its name. The sharp edges depict style, engineering and innovation.
The new logo is designed to relate to the youth and their 'can do' spirit.

The company has rolled out a new anthemHum Mein Hai HERO (Theres a Winner
in All of us), composed by A.R Rahman with the campaign launch on 15th August to
capture the maximum eyeballs and was received with a lot of excitement and applause
by the masses that could connect the HERO-ism of the brand with their daily
challenges and a true winning spirit. I agree with Mr. Pawan Munjal, the CEO of Hero
MotoCorp, who explains this campaign as a true sense of Indian Catapult which
signals that although its roots are very Indian, it is ready for global expansion.
I like the way the Hero Group has re-positioned itself for the emerging Brand India.
But the real test begins for the Munjals who will now have to look at building very
crucial R&D facilities required to operate in a tough market like India. As a consumer,
Ive always felt that the real Hero in the new-age Hero Honda bikes was the Honda
engineviz. CBZ, Hunk and Karizma. Hero MotoCorp needs to make its consumers
aware of the technology advancements and progress they make in their motorcycles to
maintain their leadership position in the market. With players like Bajaj, TVS and
Honda rolling out exciting models every year, we just need to wait and watch if the
new HERO becomes India Ki Nayi Dhadkan or not.

The Brand Journey of Hero

The Transition to Responsible Corporate Restructuring:

As developing markets reform their systems of corporate Restructuring, they must
take into account several factors complicating the process. One nuance is the
dichotomy of corporate Restructuring and political Restructuring, exemplified by
state-owned enterprises. These publicly-owned businesses are run with certain
characteristics of the private sector model, but political influence is expected, and
often unconstructive. State-owned enterprises are usually structured to deliver a
product or service to society, a commitment that is illustrated by board conduct.
During privatization there is an intermediate step of corporatization that can weaken a
state-owned enterprise. The best way to prepare for the privatization process is by
implementing sound corporate Restructuring practices before the process begins. In
developed markets, privatized firms can survive far better than in emerging markets,
where privatized companies in distress will likely flounder. Corporate Restructuring
codes must also be adaptable to the business environment where they work. For
example, codes have been adapted to fit the dynamics of family-owned firms so that
in emerging economies, where family-owned firms are likely to be in their first or

second generation, families know best how to adapt standards of Restructuring to

accommodate the fact that all the firms actors are related. In Africa, society tends to
see firms as having a greater role within the community than merely the production of
profits for shareholders, creating tension and sensitivity around the issue of corporate
citizenship and leaving the development of corporate Restructuring at a standstill.
Current Trends and Future Considerations:
While developed markets cultivate more sophisticated systems of Restructuring,
emerging market leaders focus merely on improving current systems. There is
concern that auditing firms (and their comprising mergers) and corporate collapses in
developed markets have negatively affected emerging markets. Debates over U.S. and
British systems of Restructuring also impact regulation design in emerging markets.
Lately, there has also been interest in moving back to state-owned enterprises
implementing corporate Restructuring, reprising the issue of political Restructuring.
Another consideration concerns interested investors are they more active at home or
in emerging markets? And do they exhibit consistency in their behavior in both
locations? As institutions increasingly invest around the world, cross-border voting
issues become more important as leaders wait to see which international regulatory
systems will survive. Confidence and consistency in implementing policies of
corporate Restructuring should triumph at any level. The public and private sectors
must work together to ensure that policies are non-negotiable, trustworthy,
streamlined, and effective processes and that corporate Restructuring creates a
constructive

environment

for

investment

and

growth.Birla

Committee

recommendations in 2000, the Naresh Chandra may well be viewed as a milestone in

the evolution of corporate Restructuring practices in India. It is similar in spirit and in
scope to the Sarbanes-Oxley measures in the United States. The requirements of
Clause 49 were applied in the first instance to the companies in the BSE 200 and S&P
C&X NIFTY stock indices, and all newly listed companies, on March 31, 2001. These
rules were applied to companies with a paid up capital of INR 100 million ( $2.5
million) or with a net worth of INR 250 million ( $6.3 million) at any time in the
past five years on March 31, 2002, and to other listed companies with a paid up
capital of over INR 30 million ( $0.75 million) on March 31, 2003. The Narayana

Murthy Committee worked on further refining the rules, and Clause 49 was amended
accordingly in 2004. The key mandatory features of Clause 49 regulations deal with
the following: (i) composition of the board of directors; (ii) the composition and
functioning of the audit committee; (iii) Restructuring and disclosures regarding
subsidiary companies; (iv) disclosures by the company; (vi) CEO/CFO certification of
financial results; (vi) reporting on corporate Restructuring as part of the annual report;
and (vii) certification of compliance of a company with the provisions of Clause 49.
The composition and proper functioning of the board of directors emerges as the key
area of focus for Clause 49. It stipulates that non-executive members should comprise
at least half of a board of directors. It defines an independent director and requires
that independent directors comprise at least half of a board of directors if the
chairperson is an executive director and at least a third if the chairperson is a nonexecutive director. It also lays down rules regarding compensation of board members,
sets caps on committee memberships and chairmanships, lays down the minimum
number and frequency of board meetings, and mandates certain disclosures for board
members. Clause 49 pays special attention to the composition and functioning of the
audit committee, requiring at least three members on it, with an independent chair and
with two-thirds made up of independent directors--and having at least one financially
literate person serving. The Clause spells out the role and powers of the audit
committee and stipulates minimum number and frequency of and the quorum at the
committee meetings. With regard to material non-listed subsidiary companies (those
with turnover/net worth exceeding 20% of a holding companys turnover/net worth),
Clause 49 stipulates that at least one independent director of the holding company
must serve on the board of the subsidiary. The audit committee of the holding
company should review the subsidiarys financial statements, particularly its
investment plans. The minutes of the subsidiarys board meetings should be presented
at the board meeting of the holding company, and the board members of the latter
should be made aware of all significant (likely to exceed in value 10% of total
revenues/expenses/assets/liabilities of the subsidiary) transactions entered into by the
subsidiary. The areas where Clause 49 stipulates specific corporate disclosures are: (i)
related party transactions; (ii) accounting treatment; (iii) risk management procedures;
(iv) proceeds from various kinds of share issues; (v) remuneration of directors; (vi) a

Management Discussion and Analysis section in the annual report discussing general
business conditions and outlook; and (vii) background and committee memberships of
new directors as well as presentations to analysts. In addition, a board committee with
a non-executive chair is required to address shareholder/investor grievances. Finally,
it is mandated that the process of share transfer (that had been a long-standing
problem in India) be expedited by delegating authority to an officer or committee or
to the registrar and share transfer agents. The CEO and CFO or their equivalents need
to sign off on the companys financial statements and disclosures and accept
responsibility for establishing and maintaining effective internal control systems. The
company is also required to provide a separate section of corporate Restructuring in
its annual report, with a detailed compliance report on corporate Restructuring. It is
also required to submit a quarterly compliance report to the stock exchange where it is
listed. Finally, it needs to get its compliance with the mandatory specifications of
Clause 49 certified by auditors or by practicing company secretaries. In addition to
these mandatory requirements, Clause 49 also mentions non-mandatory requirements
concerning the facilities for a non-executive chairman, the remuneration committee,
half-yearly reporting of financial performance to shareholders, moving towards
unqualified financial statements, training and performance evaluation of board
members, and perhaps most notably a clear whistle blower policy. By and large, the
provisions of Clause 49 closely mirror those of the Sarbanes-Oxley measures in the
United States. In some areas, like certification compliance, the Indian requirements
are even stricter. There are, however, areas of uniqueness as well. The distinction
drawn between boards headed by executive and non-executive chairmen and the
lower required share of independent directors is special to Indiaand is also
somewhat intriguing, given the prevalence of family-run business groups. The market
reaction to the corporate Restructuring improvements sought by Clause 49 seems to
have been quite positive, somewhat in contrast to the mixed response to SarbanesOxleys adoption. They use an event-study approach to measure the stock price
impact of the adoption of Clause 49 by Indian firms.18 Focusing on the May 7, 1999
announcement by SEBI about the formation of the Kumar Mangalam Birla
Committee, when an earlier application to large companies was expected, they report
that large firms that adopted these measures first witnessed a 4% (7%) positive price-

jump in a two-day (five-day) event-window beginning with the announcement day

compared to

PRODUCTS LINE OF HERO MOTOCORP

KARIZMA ZMR
KARIZMA
XTREME
HUNK
IMPULSE
ACHIEVER
IGNITOR
GLAMOUR PROGRAMMED FI
GLAMOUR
SUPER SPLENDOR
MAESTRO
PLEASURE
PASSION XPRO
PASSION PRO
PASSION PRO TR
SPLENDOR ISMART
SPLENDOR PRO CLASSIC
SPLENDOR PRO

 SPLENDOR+
HF DELUXE ECO
HF DELUXE
Product mix of Hero Motocorp
According to Philip Kotler Product mix (also called as product assortment) is the set
of all products and items a particular seller offers for sale. Product mix pertains to
the variety of products a company sells. There are four dimensions to product mix,
namely, width, length, depth and consistency.
Width: The width of the product mix consists of all the product lines that the company
has to offer to its customers. If we take P&G for example, the width of the product
line would consist of Hair Products, Oral care, Soaps and Detergents, Baby Care,
Personal Care and Home care.
Length: Length of the product mix includes the total number of products offered to
the customers. The number of products provided by P&G is 16 which is the total
length of its product mix.
Depth: Depth of a product mix pertains to the number of variants that are offered in
each product in the line. If we take the example of Ariel we can see that it is available
in a lot of sizes (100 GM, 250 GM, 1 KG etc.) and different types of like Front O
Matic and Fragrances etc.
Consistency: Consistency of a product mix refers to the relationship of a various
product lines in terms of end use, product requirements, distribution channels, or
some other way. P&Gs product lines are all consistent because they only concentrate
on selling FMCG products.

Product Line: (Length and Width):

Where,
No of items (length): 19
No of lines (width): 01
No of items (depth): 09

CHAPTER 2: INTRODUCTION

2.1. Overview of Industry as whole

Indian Two-Wheeler Industry
The Indian two-wheeler (2W) industry recorded sales volumes of 3.4 million units in
Q3, 2011-121, a growth of 11.0% (YoY) but flat (QoQ). Although the YoY volume
growth of the industry remained in double digits, the pace of growth during the last
quarter was at its lowest gear in the last three years. The deceleration in growth was
contributed mainly by the motorcycles segment which grew at a much lower rate of
9.2% (YoY) in Q3, 2011-12; even as the scooters segment continued to post 20%+
(YoY) expansion. Overall, ICRA expects the domestic 2W industry to report a volume
growth of ~13% in 2013-14as we expect growth to fade further in Q4, 2011-122 due
to base effect.
In an environment where the northward movement of inflation, fuel prices and
interest rates has been the nemesis of the Indian automobile industry at large, the 2W
industry has been the most resilient reflected in its healthy volume growth of 15.0%
(YoY) in 9m, 2011-12. The growth has been supported by various structural positives
associated with the domestic 2W industry including favourable demographic profile,
moderate 2W penetration levels (in relation to several other emerging markets), under
developed public transport system, growing urbanization and expected strong
replacement demand, besides moderate share of financed purchases. ICRA expects
these strengths, coupled with the OEMs thrust on exports, to aid the 2W industry to
report a volume CAGR of 10-12% over the medium term to reach a size of 21-23
million units (domestic + exports) by 2015-16.

Trend in Sales Volumes of the Indian 2W Industry

Although the YoY volume growth of the industry remained in double digits, the pace
of growth during the last quarter was at its lowest gear in the last three years. In an
environment where the increase in inflation, fuel prices and interest rates has been the
archenemy of growth in the Indian automobile industry at large, the 2W industry has
been the most tough and was reflected in its vigorous volume growth.
A look on the volumes of major 2-wheeler OEMs -

There seems to be an early mix shift underway - favoring scooters over bikes
(beneficial to Honda) and favoring executive segment over premium (benefits Hero
over Bajaj) has been seen. While growth in scooters appears structural (driven by
appeal of the scooter as a vehicle that cuts across gender and age biases), while the
growth in executive segment appears cyclical as consumers baulk at high fuel prices
and downshift to more fuel efficient products. A long-term trend of consumers
preferring premium bikes should resume volumes should recover, though timing
will remain uncertain - maybe in FY14, but potentially after that too.

Market Share Trends

The Indian motorcycles segment continues to be dominated by Hero MotoCorp which
has maintained its market share at over 55% in the domestic motorcycles segment
over the last five quarters. The top three players accounted for 89.5% of the industrys
volumes in Q3, 2013-14(92.0% in 2007-08), with Honda Motorcycles reclaiming its
spot as the third largest player, a position which it had lost out to TVS in the previous
quarter after having retained it since Q4, 2009-10. In the 75-125cc segment of
motorcycles (that represented 71% of total motorcycles sales volumes in 9m, 201112), Hero MotoCorp continues to be a strong market leader with a share of 74.2% in
9m, 2013-14(70.4% in 9m, 2010-11). In the >125cc segment of motorcycles, while
Bajaj Auto continues to account for nearly half the segments volumes (49.1% in 9m,
2011-12), Yamaha has been the fastest growing having improved its market share
from 8.1% in 9m, 2010-11 to 10.1% in 9m, 2011-12.

Trend in Market Share in Motorcycles Segment (Domestic)

Sales Volumes Analysis - Scooters

Barring Q1, 2011-12, the growth in scooter segments sales volumes has generally
outperformed that of the motorcycles segment, partly due to the formers smaller
base. In Q3, 2013-14too, the sales volumes of the domestic scooters segment at
~660,000 units recorded a growth of 21.6% (YoY), higher than the 9.2% growth in
motorcycle sales. With this, the share of the scooters segment in the total domestic
two-wheeler volumes increased to 19.4% in Q3, 2013-14from 17.6% in 2010-11.

Trend in Quarterly Sales Volumes of Scooters (Domestic)

Trend in Market Share in Scooters Segment (Domestic)

Vision, Mission, Goals, Objectives and values of Hero group

The Vision
"We, at the Hero Group are continuously striving for synergy between technology,
systems and human resources to provide products and services that meet the quality,
performance, and price aspirations of the customers. While doing so, we maintain the
highest standards of ethics and societal responsibilities, constantly innovate products
and processes, and develop teams that keep the momentum going to take the group to
excellence in everything we do."

The Mission Statement

"Its our mission to strive for synergy between technology, systems and human
resources, to produce products and services that meet the quality, performance and
price aspirations of our customers. While doing so, we maintain the highest standards
of ethics and societal responsibilities. "
This mission is what drives us to new heights in excellence and helps us forge a
unique and mutually beneficial relationship with all our stakeholders. We are
committed to move ahead resolutely on this path, shown to us by visionaries like Mr.
Satyanand Munjal, Mr. Om Prakash Munjal, the late Mr. Dayanand Munjal and late
Mr. Raman Kant Munjal. Mr Brijmohan Lall Munjal, Chairman & MD - THE HERO
GROUP.
Goals & Objectives
To provide excellent transportation to the common man at easily affordable prices
and to provide total satisfaction in all its spheres of activity." The group philosophy
clearly states what the group objectives are and stresses the focus on customers,
providing reliable and affordable mobility for the masses and other stakeholders like
employees, suppliers, distributors, society and environment at large.
Apart from being customer-centric, the Hero Group provides its employees with a fine

quality of life and its business associates (suppliers & distributors) with a total sense
of belonging, thus strengthening the bond that is already deep-rooted.

Values

Respect for Human Beings.

Is a responsive organization?
Is a boundary less organization?
Is striving for excellence.
Provide fearless, enjoyable working environment.
Is self-reliant.
Providing learning environment.
Is a caring organization?
Enables relationship buildings.
Prompts transparency & trust.
Is creativity promoting.

Is performance oriented?

Product: The main strategy of this company I product is to provide a stylish, durable bikes
which can easily fit to Indian peoples and easily can able to run in particular Indian
road.

Price: Hero Moto corp is a company that provides the new technology product in Indian
market in very less price. There are many products like splendor, passion that its were
very less comparing to that segments bikes in market. This company bits its
competitor with related to price.

Place: Hero Moto corps service centers and showrooms are available in all parts of the any
city so that the consumers as can easily go to nearest service center and showrooms.
Due to this strategy the sales of hero bikes are also increase.

Promotion:The promotion of Hero Moto corp is very unique in past when the Hero and Honda
companies we partners. The use the sentence likes Hero desh ki dhadkan. The
company also has big names in brand promoters.

2.2 Profile of the Organization

Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.) is the world's
largest manufacturer of two - wheelers, based in India. In 2001, the company
achieved the coveted position of being the largest two-wheeler manufacturing
companyin India and also, the 'World No.1' two-wheeler company in terms of unit
volume sales in a calendar year. Hero MotoCorp Ltd. continues to maintain this
position till date.
Vision
The story of Hero Honda began with a simple vision - the vision of a mobile and an
empowered India, powered by its bikes. Hero MotoCorp Ltd., company's new
identity, reflects its commitment towards providing world class mobility solutions
with renewed focus on expanding company's footprint in the global arena.
Mission
Hero MotoCorp's mission is to become a global enterprise fulfilling its customers'
needs and aspirations for mobility, setting benchmarks in technology, styling and
quality so that it converts its customers into its brand advocates. The company will
provide an engaging environment for its people to perform to their true potential. It
will continue its focus on value creation and enduring relationships with its partners.
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 plant is based at Haridwar, in the hill state of Uttrakhand.
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
theGlamour 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
Products
Hero

MotoCorp

offers

wide

range

of two

wheeler

products that

include motorcycles and scooters, and has set the industry standards across all the
market segments.

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.
Brand
The new Hero is rising and is poised to shine on the global arena. Company's new
identity "Hero MotoCorp Ltd." is truly reflective of its vision to strengthen focus on
mobility and technology and creating global footprint. Building and promoting new
brand identity will be central to all its initiatives, utilizing every opportunity and
leveraging its strong presence across sports, entertainment and ground- level
activation.
2010-11 Performance
Total unit sales of 54,02,444 two-wheelers, growth of 17.44 per cent
Total net operating income of INR 19401.15 Crores, growth of 22.32 per cent
Net profit after tax at INR 1927.90 Crores
Total dividend of 5250% or INR 105 per share including Interin Dividend of INR 70
per share on face value of each share of INR 2 each
EBIDTA margin for the year 13.49 per cent
EPS of INR 96.54
Milestones
1983
Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed
Shareholders Agreement signed
1984
Hero Honda Motors Ltd. incorporated
1985
First motorcycle "CD 100" rolled out

1987
100,000th motorcycle produced
1989
New motorcycle model - "Sleek" introduced
1991
New motorcycle model - "CD 100 SS" introduced
500,000th motorcycle produced
1992
Raman Munjal Vidya Mandir inaugurated - A School in the memory of founder
Managing Director, Mr. Raman Kant Munjal
1994
New motorcycle model - "Splendor" introduced
1,000,000th motorcycle produced
1997
New motorcycle model - "Street" introduced
Hero Honda's 2nd manufacturing plant at Gurgaon inaugurated
1998
2,000,000th motorcycle produced
1999
New motorcycle model - "CBZ" introduced
Environment Management System of Dharuhera Plant certified with ISO-14001 by
DNV Holland
Raman Munjal Memorial Hospital inaugurated - A Hospital in the memory of founder

Managing Director, Mr. Raman Kant Munjal

2000
4,000,000th motorcycle produced
Environment Management System of Gurgaon Plant certified ISO-14001 by DNV
Holland
Splendor declared 'World No. 1' - largest selling single two-wheeler model
"Hero Honda Passport Programme" - CRM Programme launched
2001
New motorcycle model - "Passion" introduced
One million production in one single year
New motorcycle model - "Joy" introduced
5,000,000th motorcycle produced
2002
New motorcycle model - "Dawn" introduced
New motorcycle model - "Ambition" introduced
Appointed Virender Sehwag, Mohammad Kaif, Yuvraj Singh, Harbhajan Singh and
Zaheer Khan as Brand Ambassadors
2003
Becomes the first Indian Company to cross the cumulative 7 million sales mark
Splendor has emerged as the World's largest selling model for the third calendar year
in a row (2000, 2001, 2002)
New motorcycle model - "CD Dawn" introduced
New motorcycle model - "Splendor +" introduced
New motorcycle model - "Passion Plus" introduced
New motorcycle model - "Karizma" introduced
2004

New motorcycle model - "Ambition 135" introduced

Hero Honda became the World No. 1 Company for the third consecutive year.
Crossed sales of over 2 million units in a single year, a global record.
Splendor - World's largest selling motorcycle crossed the 5 million mark
New motorcycle model - "CBZ*" introduced
Joint Technical Agreement renewed
Total sales crossed a record of 10 million motorcycles
2005
Hero Honda is the World No. 1 for the 4th year in a row
New motorcycle model - "Super Splendor" introduced
New motorcycle model - "CD Deluxe" introduced
New motorcycle model - "Glamour" introduced
New motorcycle model - "Achiever" introduced
First Scooter model from Hero Honda - "Pleasure" introduced
2006
Hero Honda is the World No. 1 for the 5th year in a row
15 million production milestone achieved
2007
Hero Honda is the World No. 1 for the 6th year in a row
New 'Splendor NXG' launched
New 'CD Deluxe' launched
New 'Passion Plus' launched
New motorcycle model 'Hunk' launched
20 million production milestone achieved
2008
Hero Honda Haridwar Plant inauguration
New 'Pleasure' launched

Splendor NXG lauched with power start feature

New motorcycle model 'Passion Pro' launched
New 'CBZ Xtreme' launched
25 million production milestone achieved
CD Deluxe lauched with power start feature
New 'Glamour' launched
New 'Glamour Fi' launched

2009
Hero Honda GoodLife Program launched Hunk' (Limited Edition) launched
Splendor completed 11 million production landmark
New motorcycle model 'Karizma - ZMR' launched
Silver jubilee celebrations
2010
New model Splendor Pro launched
Launch of new Super Splendor and New Hunk
2011
New licensing arrangement signed between Hero and Honda (Hero Honda is renamed
as Hero)
Launch of new refreshed versions of Glamour, Glamour Fi, CBZ Xtreme, Karizma
Crosses the landmark figure of 5 million cumulative sales in a single year
2.3 Problems of the Organization
Hero MotoCorp's performance in the three months to the June quarter comes as a
breather for the troubled automobile industry as the maker of two-wheelers managed
to stay on course despite lower sales volumes.
Arecent price increase towards the end of April 2013, ranging from Rs500-1,500 per
vehicle, somewhat compensated for the 5% lower sales volumes year -on- year as
Hero MotoCorp saw a marginal 140 basis point dip in its top line in June 2013 quarter
over a year ago
But, an adverse product mix which saw the company selling a higher number of 125
cc and 100 cc bikes but lower volumes of the premium 150 cc motorcycles impacted
the company's average net realisation per vehicle, even after adjusting for a higher
price.
Hero's net realisation per vehicle dropped to Rs39,293 compared to Rs39,758 in the

March 2013 quarter. But thanks to soft commodity prices, the company could
maintain its earnings before interest, tax and depreciation or EBIDTA margins at
14.9% for the quarter a tad lower compared to 15.1% reported by the company in
June 2012 quarter.

While the company has managed to sail through on the operational front, profits were
lower by 11% year- on -year as the company exhausted its five-year 100% tax holiday
on profits from its Haridwar plant which accounts for close to 35% of the company's
total volumes.
Starting this year, for the next five years, only 30% of the profits earned from the
Haridwar plant will enjoy tax concessions, implying that its tax liability will now be
higher at over 25% against the effective tax rate of 16 - 17% paid by the company
until FY13.
For the quarter, the tax liability at 26.9% was relatively higher, which the
management has also attributed to the 5% rise in surcharge on corporate tax in the
2013 budget.
The rather comfortable sailing in the first quarter of this fiscal has not been without
challenges for Hero MotoCorp, given the fact that the company has been under severe
pressure because of the economic slowdown and rising competition in the two-

wheeler industry.
The company may, however, benefit from the expected uptick in the rural economy with good monsoons so far. But it will have to reckon with intense competition from
peers.
The company's management, in a conference call with analysts after the results, said
that launch plans were underway for the festive season. But most of these are likely to
be relaunch of existing models with new launches restricted to just a couple. This
comes at a time when Bajaj Auto, has already announced six new launches under its
Discover brand this year on completely new platforms.
Going by the recent trend, buyers of two-wheelers now give greater preference to new
launches rather than refurbishing existing models.
Also with rising competition for a share in the 100cc segment of motorcycles though
new launches planned in FY14 both by Bajaj Auto and Honda Motorcycles &
Scooters all aimed at boosting market share in the 100-110 cc segment where Hero
MotoCorp is the market leader but is gradually losing market share, the going will be
more challenging for the company in the months ahead.
2.4 Competition Information
While a slowing in sales volumes has taken the shine off Hero MotoCorps (Hero)
stock, down four per cent in April against a one per cent fall in the Sensex, the
expected rise in competitive pressures over the coming months and slowing industry
volumes have raised concerns over its medium- to long-term outlook.
A drop in crop realisations and lower two-wheeler sales has translated to a mere 2.4
per cent year-on-year growth for Hero in the month of March. Given the high base, it
is likely to achieve eight to 12 per cent growth in volumes in 2012-13, estimate
analysts, compared to 15.4 per cent in 2011-12.
The key threat for Hero is the launch of Honda Motorcycle and Scooter Indias
(Honda) Dream Yuga, which Citigroup Global Markets analysts Jamshed Dadabhoy

and Arvind Sharma believe has the potential to destabilise market share in the
executive segment.
Further, a slowing in the domestic segment will hurt Hero more than Bajaj Auto, as
the latter gets about 36 per cent of its volumes from exports. The areas of opportunity
for Hero will be exports, the fast growing scooter market and the premium motorcycle
segment.
At Rs 1,973, the stock is trading at 15 times its FY13 estimates. Given competitive
pressures at home and untried export markets, most analysts have a sell/hold rating,
with price targets at Rs 1,650-1,950.
While the company has lined new products such as the 110cc Passion X Pro bike and
125cc motorcycle Ignitor for launch in FY13, it is likely to face increasing
competition in the executive segment from Honda and TVS. While Honda will pull
out all the stops to market its 110cc Dream Yuga, TVS is also expected to re-launch its
popular bike, Victor, in a new avatar. Bajaj, too, is expected to launch a bike in this
segment.
The Street will be keenly monitoring the battle between Honda and Hero, given that
the executive segment accounts for about two-thirds of overall motorcycle sales, and
that Honda was until recently Heros partner (for 26 years), with equally good
understanding of the Indian market.
Hero currently dominates the executive segment, with 74 per cent market share. Due
to an estimated slowing in the sector, Citi has cut volume forecasts for Hero and
anticipates slight erosion in its market share, particularly in the executive segment.
The battle in the segment, however, will be played out over a long term, with Hero
unlikely to yield much in the short term, believe experts.
Says the head of research at a leading brokerage firm, Though Hero MotoCorp will
shed some market share, the gains for competition in the short term will be marginal,
as Hero still has enough brand pull and distribution reach. As a comparison, while
Hero has a 4,000-dealer network, Hondas is just a fourth of this. This will be difficult
to replicate any time soon.

If the Honda bike is successful, it could generate sales volumes of 500,000-750,000

units annually.

2.5 SWOT Analysis of the Organization

Strength
1

Ability to understand customers needs and wants.

Recognized and established brand name.

Effective advertising capability.

Its after sales service

Maintenance cost is low

Resale value is high

Companys name is synonymous with fuel efficient bikes and connectivity.

Huge brand equity and one of the biggest players in the two wheelers Indian
market

Huge variety of products in every segment

10

Excellent distribution, over 5000 dealerships and service centers

11

Good advertising and excellent rebranding from Hero Honda to Hero Moto
Corp

Weakness
1

Market share in premium segment is low.

People are concerned after brand migration regarding technology.

Spare parts availability issues.

Opportunities
1

Global expansion in countries of Africa and South America.

Expansion of target market (include women, male scooter and trans road
bike).

Scooter market is increasing thus they can be Indias leader in scooter market.

Financial help easily available to customers.

Relatively low rate of interest and the discount of prices offered by the
dealers and manufacturers lead to the increasing demand for two wheeler
vehicles.

Large market for the high performance segment which is increasing with the
upliftment of the lifestyle of people.

Purchasing power has increased of customers.

Strategic alliance with EBR and AVL for technology transfer.

Threat
1

Honda motorcycles and scooters India has become aggressive and launching
products for mass market in 100cc eg. Dream yuga

Bajaj motors is a strong competition in premium segment

FDI announced in automobiles is 100%

Petrol prices are increasing thus sale of premium segment bikes may decrease

Aluminum and steel prices will increase.

Strong competition from Indian as well as international brands

Dependence on government policies and rising fuel prices

To understand deeper on the available segments (Motorcycles) and the respective

offerings 1) Economy Segment -

2) Executive Segment -

3) Premium Segment -

Even though the number of offerings in the premium segment seems high, maximum
volume churners still remain the products in executive & economy segments. With an
aggressive pricing for Pulsar 200 NS & Duke 200; Bajaj plans to gain strategically in
terms of volumes over the period of time. Bajaj's dominance in Executive segment is
the the primary reason for its high operating margin and thus emerge as one of the
most profitable 2-wheeler OEMs.

Profile of the Indian 2-wheeler companies HeroMotoCorp is now worlds 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 points, HMC has been able to
address a wide market and post robust sales growth even after its separation from the
Japanese major Honda.
Bajaj Auto is well positioned in the motorcycle segment as the 2nd largest player
with around 30% market share. Over the last decade, the company has successfully
changed its image from a scooter manufacturer to a two-wheeler manufacturer. Its
product range encompasses scooterettes, scooters and motorcycles. Though the
company is miles behind Hero in terms of sales volumes, it is now Indias most
profitable two-wheeler manufacturer.
TVS Motor Company Limited is the third largest two-wheeler manufacturer in
India. It is the flagship company of the parent TVS Group employing over 40,000
people

with

an

estimated

15 million

customers. It

manufactures

motorcycles, scooters, mopeds and auto rickshaws. TVS Motor is credited with many
innovations in the Indian automobile industry, notable among them being the
introduction of India's first two-seater moped, the TVS 50cc. The company became
the leader in its category of sub 100 cc mopeds, having sold 7 million units. It also
introduced the TVS Scooty, which is India's second largest brand in the scooterette
segment. The TVS Jive launched in November 2009 became India's first clutch-free
motorbike aimed at a stress-free rider experience. But the growth in F12 was dismal
and seems to lose ground against competition.
Honda Motorcycle and Scooter India, Private Limited (HMSI) is the wholly owned
Indian subsidiary of Honda Motor Company, Limited, Japan. Founded in 1999, it was
the fourth Honda automotive venture in India, after Hero Honda, Kinetic
Honda Motor Ltd and Honda Siel Cars India. The entry of Honda into the Indian
market as HMSI began with the launch of the Honda Activa, a 100 cc scooter. A
slightly modified trendier version of the Activa was soon launched, as the Honda

Dio. Honda Eterno was launched thereafter to add to the portfolio of HMSI's scooters.
The Honda Unicorn was the first motorcycle released by HMSI. The Honda Shine has
since been released.
India Yamaha Motor, IYM (officially India Yamaha Motor Private Limited) is
an Indian subsidiary of Yamaha Motor Company, formed in 2008 as a joint venture
with Mitsui. It produces a range of motorcycles for domestic consumption and export.
Yamaha motors in India have been present in the market of low range economy bikes
for a long time. All bikes in their store were designed for mass market, but with the
introduction of FZ-16, FZ-S, Fazer, and R15 they have made an impression on the
mid range bike market in India.
Suzuki Motorcycle India Pvt. Ltd. is a subsidiary of one of the world's leading twowheeler manufacturer Suzuki Motor Corporation. The companys products include
motorcycles and scooters. The company was incorporated in 1997 in India.
Mahindra Two Wheelers Limited (MTWL) is backed by the Mahindra Engineering
Services (MES), the Italy-based design house, engines engineering and Taiwans
Sanyang Industry Company Limited (SYM). In 2011 Mahindra became the first
Indian two-wheeler manufacturer to enter the Moto Grand Prix Championships. This
two wheeler maker formally entered the two wheeler industry by acquiring with the
successful acquisition of business assets of Kinetic Motor Company Limited.
Market Share Trends
The Indian motorcycles segment continues to be dominated by Hero MotoCorp which
has maintained its market share at over 55% in the domestic motorcycles segment
over the last five quarters. The top three players accounted for 89.5% of the industrys
volumes in Q3, 2011-12 (92.0% in 2007-08), with Honda Motorcycles reclaiming its
spot as the third largest player, a position which it had lost out to TVS in the previous
quarter after having retained it since Q4, 2009-10. In the 75-125cc segment of
motorcycles (that represented 71% of total motorcycles sales volumes in 9m, 201112), Hero MotoCorp continues to be a strong market leader with a share of 74.2% in
9m, 2011-12 (70.4% in 9m, 2010-11). In the >125cc segment of motorcycles, while

Bajaj Auto continues to account for nearly half the segments volumes (49.1% in 9m,
2011-12), Yamaha has been the fastest growing having improved its market share
from 8.1% in 9m, 2010-11 to 10.1% in 9m, 2011-12.

CHAPTER 3: RESEARCH METHODOLOGY

2.1 Overview of the project

Hero MotoCorp may be the market leader in the entry-level bikes segment with about
69 per cent market share. But it is the middle-of-the-road segment bikes and scooters
that came to its rescue in the June quarter.
Sales volume for the entry segment bikes (Dawn, Deluxe, Splendor, Passion) dropped
by almost 10 per cent in the current quarter compared with the same quarter last year.
But the Super Splendor, Glamour and Ignitor as well as scooters such as the Pleasure
and Maestro stood the company in good stead with robust volume growth of 18 per
cent and 49 per cent respectively.
The superior product mix , coupled with a price increase in the range of Rs 500-Rs
1,500 in May, moved up average realisations for the company. It stood at Rs 39,300 in
the quarter ended June vis--vis Rs 37,800 last year. Hence, despite a 5 per cent drop
in overall sales volume, the fall in net sales was restricted to about 1 per cent. This
was further aided by a drop in raw material expenses, which helped the company hold
on to the same operating margins of 14.8 per cent as in the June 2012 quarter.
Despite lower depreciation and amortisation charges and higher other income, net
profit declined by 11 per cent to Rs 548 crore as tax expenses shot up.
2.2 Objectives of the Study

To explore the product line of Hero MotorCorp

To know the various factors, which influence customers in purchasing,

To find the after sales service offered by Hero MotoCorp Ltd.

To understand two wheeler sector in India.

How the split with Honda has affected Hero motors.

2.4 Data Sources

There are two types of data:

Secondary data was collected through online journals, previous studies done in same
field, company websites, online articles, books and magazines

CHAPTER 4: ANALYSIS

Different Product Line of Hero MotorCorp

KARIZMA ZMR
Engine Type
Air cooled, 4- stroke single cylinder OHC, Fuel Injection, Oil Cooler
Displacement
223 cc

KARIZMA
Engine Type
Air cooled, 4-Stroke Single Cylinder OHC
Displacement
223 cc

XTREME
Engine Type
Air cooled, 4 - stroke single cylinder OHC
Displacement
149.2 cc

HUNK
Engine Type
Air cooled, 4 - stroke single cylinder
Displacement
149.2 cc

IMPULSE
Engine Type
Air cooled, 4- stroke single cylinder OHC, Electric start

Displacement
149.2 cc

ACHIEVER
Engine Type
Air-cooled, 4-stroke single cylinder OHC
Displacement
149.1 cc

IGNITOR
Engine Type
Air cooled, 4 - stroke single cylinder OHC
Displacement
124.7 cc

GLAMOUR
Engine Type
Air Cooled 4 - Stroke Single Cylinder OHC
Displacement
124.8 cc

SUPER SPLENDOR
Engine Type
Air cooled, 4 - stroke single cylinder OHC

Displacement
124.7 cc

MAESTRO
Engine Type
Air cooled, 4 - stroke single cylinder OHC, Self Start
Displacement
109 cc

PLEASURE
Engine Type

Air-cooled, 4-stroke single cylinder OHC

Displacement
102 cc

PASSION XPRO
Engine Type
Air cooled, 4 - stroke single cylinder OHC
Displacement
109.1 cc

PASSION PRO
Engine Type
Air-cooled, 4-stroke single cylinder OHC
Displacement
97.2 cc

PASSION PRO TR
Engine Type
Air Cooled, 4-Stroke Single Cylinder OHC
Displacement
97.2 cc

SPLENDOR ISMART
Engine Type
Air Cooled, 4 - Stroke Single Cylinder OHC
Displacement

97.2 cc

SPLENDOR PRO CLASSIC

Engine Type
Air Cooled, 4 - Stroke Single Cylinder OHC
Displacement
97.2 cc

HF DELUXE ECO
Engine Type
Air cooled, 4 - stroke single cylinder OHC
Displacement
97.2 cc
Product strategy and planning involve decisions about the firms target market,
product mix, project prioritization, resource allocation, and technology selection.
Mansfield and Wagner (1975) show that these factors have a significant influence on

the probability of economic success. In structured development environments, product

planning often results in mission statements for projects and in a product plan or
roadmap, usually a diagram illustrating the timing of planned projects. Specific
decisions include the following. What is the firms target market? What portfolio of
product opportunities will be pursued? What is the timing of the product development
projects? What assets will be shared across products? Which technologies will be
employed in the planned products? Efforts are generally made to coordinate these
decisions with the firms corporate, marketing, and operations strategies.
Decisions are made about executing product development projects in parallel and
sharing resources across different projects. The researcher highlights the congestion
effects that arise from pursuing multiple product development projects in parallel.
Their production-process metaphor also helps understand the pitfalls of high capacity
utilization and processing time variability in development projects. Resource sharing
may, however, lead to better utilization of resources, reduction in required
development hours, as well as better learning across projects. Substantial sharing of
assets across products results in the development of product platforms. Much of the
work on platforms, however, focuses only on platform benefits. Robertson and Ulrich
(1998) highlight the loss of customer-perceived differentiation due to platforms, and
researcher discuss the overdesign of low-end products due to product platforms. A key
component of product planning is the decision about which technologies to
incorporate in a forthcoming product. While prospective technologies are attractive
along several dimensions, they are also not fully proven, and can increase the degree
of risk of the new product development process. The researcher discusses the pizzabin approach, in which products are assembled from proven technologies. While this
approach can make the development process more manageable, competitive
conditions may require a firm to develop technologies and products simultaneously.

CHAPTER 5: FINDINGS AND OBSERVATIONS

After mega corporate restructuring of old, trusted and dominant brands, there is a fear
whether the new corporate entity and the new brands will be able to receive the same
response as the long trusted original entity had. On the other hand, consumers or
clients are also under immense doubt whether the new corporate entity or its brands
are also going to be as trustworthy as the original brand was. Hence, it becomes
increasingly important that a brand repositioning and a very strong communication of
its new position takes place.
Hero Motocorp is one such classic example in which after divorce with Japanese
partner, Honda which was providing the technological support, there were concerns
all over and hence the company had to do the mega, brand repositioning exercise.
The key point in the case is how sales Positioning and the loyalty program in general
have persuaded customers to use the credit card as a daily payment method and that
way contributed to long-term sales. Peattie & Peattie (1993) state that if consumers
are satisfied with the brand that is being promoted, it is more likely that they will also
buy it later after the Positioning is over. Thus, if customers are satisfied, it is likely

that longterm sales are also influenced positively.

Key observations

Passion Pro, Splendor Plus, are the two models that Hero MotoCorp selling a
big number

The TV promotions are more influence the customer behavior of two wheeler
sector.

The purchase desiccations of consumers are influence by friends and family.

Blue, Red, Black color bike with 150 cc to 200cc is fast moving.

Most of the despondences are agree that the bikes are delivering proper time.

The service provide by Hero MotoCorp is satisfied by more than 70% of

customers.

Brand name of Hero is still good in market after split with Honda

Quality, price, Brand image, Fuel efficiency is getting equal importance in

satisfaction

CHAPTER 6: CONCLUSION
Customer satisfaction is a marketing tool and a definite value added benefit. It is often
perceived by customers as important as the primary product or service your
organization offers.
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 customers 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 Ltd 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 corner 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.

CHAPTER 7: RECOMMENDATION

From the findings we conclude that a customers while purchasing a bike,

customers takes into consideration mainly fuel efficiency, good looks, low
maintenance cost and reliability.
The main competitors of Hero are Bajaj Auto, Yamaha, TVS, Suzuki.
The consumer preference basically depends upon wider network and better
services.
Customers are influenced more to buy a product by advertisements rather than
dealer friends or family recommendations.

Hero want to develop more promotion for there some models like sports bike

and gear less scooter

Hero bikes can concentrate to increase their export market

Hero MotoCorp Ltd should try to give more advertisements in news paper, bill

boards in that area to enable easy recall of the people for Hero MotoCorp Ltd.

Hero Motors can also increase models attracting the Indian youth.

BIBLIOGRAPHY
www.heromotocorp.com
www.bikewale.com
info.shine.com
www.siamindia.com
www.hero.ca/
automobiles.mapsofindia.com/automobile-industry-in-india
economictimes.indiatimes.com Industry Auto Two-wheelers
Kotler Philips, Marketing Management : Analysis, Planning Implementation &
Control 9th Edition 1998, Prentice Hall of India Ltd., New Delhi