Submitted to

Mrs. Kavita Shukla

Project Report on Rural marketing

Performance of Hero Honda in Rural market

Submitted By.

Mohd. Seraj
PG20095523
 INTRODUCTION

Hero Honda Motors Ltd, based in Delhi, India, is the world's third largest manufacturer of
motorcycles after Honda and Yamaha. Hero Honda is a joint venture that began in 1984
between the Hero Group of India and Honda of Japan. It has been the world's biggest
manufacturer of 2-wheeled motorized vehicles since 2001, when it produced 1.3 million
motorbikes in a single year. During the fiscal year 2008-09, the company has sold 3.28 million
bikes and the net profit of the company stood at Rs.1281.7 crore, up 32% from the previous
fiscal year. Hero Honda's Splendor is the world's largest selling motorcycle. Its 2 plants are in
Dharuhera and Gurgaon, both in India. Third plant at Haridwar, Uttaranchal has also started
production by April, 2008. It will have production facilities such as Lean Manufacturing
concept, more flexible lines & stream line material flow, within & proximity (planning to set
vendors in nearby locations constituting HHML Park) to achieve just-in-time manufacturing. It
specializes in dual use motorcycles that are low powered but very fuel efficient.

COMPANY PROFILE
“Hero” is the brand name used by the Munjal brothers in the year 1956 with the flagship
company Hero Cycles. It is a joint venture between India's Hero Group and Honda Motor
Company; they are related to Jagdish Lal Munjal. During the 1980s, Hero Honda became the
first company in India to prove that it was possible to drive a vehicle without polluting the
roads. The company introduced new generation motorcycles that set industry benchmarks for
fuel thrift and low emission. A legendary 'Fill it - Shut it - Forget it' campaign captured the
imagination of commuters across India, and Hero Honda sold millions of bikes purely on the
commitment of increased mileage. Hero Honda has consistently grown at double digits since
inception; and today, every second motorcycle sold in the country is a Hero Honda. Every 30
seconds, someone in India buys Hero Honda's top-selling motorcycle: Splendor. Hero Honda
bikes currently roll out from two globally benchmarked manufacturing facilities based at
Dharuhera and Gurgaon in Haryana. These plants together are capable of churning out 3.9
million bikes per year. A third state-of-theart manufacturing facility at Haridwar in Uttranchal
will soon be commissioned to cope with sustained customer demand. Hero Honda's extensive
sales and service network now spans over 3,000 customer touch points. These comprise a mix
of dealerships, service and spare points, spare parts stockists and authorized representatives of
dealers across different areas. Hero Honda values its relationship with customers. Its unique
CRM initiative, Hero Honda Passport Program, one of the largest programs of this kind in the
world, has over 3 million members on its roster. The program has not only helped Hero Honda
understand its customers and deliver value at different price points,but has also created a loyal
community of brand ambassadors.
 Two Wheelers in India

1. Hero Honda : Achiever - CBZ - Hunk - Karizma - Passion – Splendor

2.Bajaj : Avenger - Boxer - Discover - Pulsar- Platina, Wave

TVS : Victor - Flame – Apache

Honda : Activa - Aviator - Unicorn

Yamaha : Crux - Gladiator - Libero -

Others : Rajdoot 350 - Royal Enfield

HERO HONDA SPLENDOR
Hero Honda Splendor has come up with all possible features of any standard bikes. Apart from these
features, this bike also has many advanced and customer friendly features. This bike is equipped with
every safety and comfort features for the convenience of the biker.
There are found models in Hero Honda Splendor:
• Super Splendor
• Splendor +
• Splendor NXG
Super Splendor
This Bike comes with 125 cc new generation quantum core engine with an output of 9 bhp (6.7 kw).
It’s relaxing seating arrangement with other comfort features like less strain while clutching and
declutching, low noise and less vibration engine etc, makes it more market friendly bike.For the
convenience of the biker, there are few features included here are trip meter, peep hole, large utility
box etc. Some safety features included here are pass switch and push cancel indicator switch, muffler
with heat shield etc.

It is found in different colors:

• Frost Blue
• Cloud Silver
• Mono Tone Black
• Dual Tone Black
• Blazing Red
Splendor +
4 stroke single cylinder lair-cooled, OHC engine delivers power of 5.5 Kw (7.5PS) @8000 rpm .
Running with the maximum mileage of 85 kmph, this bike is giving the optimum satisfaction for long
journey.Its double cradle frame gives the steadiness in biking. Its wider 1230 mm wheelbase provides
the proper base for safer riding. Lighting fitting included in it like multi reflector with halogen bulb
makes the biking secured at every time.
It is found in different colors:
• Candy Tahitian Blue
• Hi Performance Red
• Blue Blaze Metallic
• Cloud Silver Metallic
• Chilli Green
• Hi Granite Blue
• Tornado Grey
• Black with Blue Silver Stripe
• Black Calliper Yellow
• Black Old Stripe
Splendor NXG
Splendor NXG comes with a new engine and pioneering features and combines stylish looks with a
high performance engine. It features trapezoidal multi -reflector headlamps which is powerful even at
low speeds. This is achieved by powerful battery which powers the DC high beam in the headlamp
and its strength is not dependent on the engine rpm. Circuitry for the low beam and pilot lamp has also
been enhanced for low variation in intensity arising from changes in the engine rpm.
It features:
Splendor NXG is available in a range of five attractive colors and seven stripe combinations.

• New front fairing and a new visor

• New design fuel tank with knee recesses on either side and features a chrome fuel tank lid.
• New body panels and sleek body graphics.
• New instrument panel - trip meter housed in speedometer, fuel gauge.
• Stylish tail lamp and die - cast alloy grab rail.
• 160mm of ground clearance.
Colors
• Candy blazing red
• Force Silver
• Vibrant blue
• Classy maroon
• Black

WHY COMPANY CHOOSE RURAL MARKET

Hero Honda has worked out a major expansion strategy for the rural markets and is planning to
strengthen retail financing to support the initiative that could lead to setting up of its own
finance arm. Pawan munjal, MD of Hero Honda, told TOI that rural market would be a special
focus area for the company as it is looking at new growth areas to maintain sales momentum in
a shrinking market. "We have created a special ‘rural vertical' to push growth and this would
spearhead our expansion in the rural market,' Munjal said.India's largest two wheeler company
Hero Honda Motors is spreading its wings to capture the commuting bikers' imagination in
rural India, after witnessing flat sales growth in 2007-08. The two wheeler market leader plans
to cover 100,000 of the 600,000 villages in the country by the end of this financial year under a
campaign named Har Gaon, Har Aangan (every village, every household). Anil Dua, Senior
Vice-President (Sales & Marketing), told DNA Money that "We realized that, while two-
wheeler penetration in urban areas is 25 per cent, it is only 10 per cent in
rural areas and so the latter segment needs to be tapped more, extensively. Under the rural
vertical, we started collecting a lot of data at rural touch points…….many of our dealers are
now meeting sarpanches, headmasters,aanganwadi workers and other opinion makers to
understand the rural consumer better". The rural initiative generated sales of 16,000 additional
bikes in a single month.
PROMOTIONAL STRATEGIES

1. BRAND AMBASSADORS OF HERO HONDA:

Hrithik, Saurav Ganguly, brand ambassadors of Hero-Honda Hero Honda, a leading

manufacturer of motorcycles, has roped in film actor Hrithik Roshan and captain of Indian
Cricket team Saurav Ganguly as its brand ambassadors for three years till 2003. The latest
commercial featuring Hrithik Roshan, Priyanka Chopra and six cricketers, is perhaps the
longest ad, at three minutes. They would endorse the company products, attend corporate and
brand events and help promote its “We care” campaign comprising safely riding, environment
and friendliness.Hrihik and Gauguly said they were glad to be associated with Hero Honda.
Honda has embarked upon an ambitious project to achieve sale of one million bikes this year
with a market share of 47 per cent. The turnover would be in excess of Rs. 3000 crore. In
October alone, 11, 22,000 motorcycles have been sold. Compared to 66,063 units in the
corresponding period. Last year, the increase in sales is a phenomenal 69 per cent. Cumulative
sales jumped up by 41.58 per cent to 5.72 lacks units during April-October as against 4.04
lacks units in the same period last year.
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.

2. ADVERTISEMENT:
Hero Honda - Sa Re Ga Ma Pa Challenge 2009 - Watch Hindi Zee TV
Program
Hero Honda - Sa Re Ga Ma Pa Challenge 2009 is the 3rd installment of the Sa Re Ga Ma Pa
Challenge series which premiered on July 4, 2008 on Zee TV The show is hosted by Aditya
Narayan, who also hosted the previous competition Sa Re Ga Ma Pa Challenge 2007. This
show features three new mentors, Aadesh Shrivastava, Shankar Mahadevan and Pritam, who
join Himesh Reshammiya.The concept is similar to the previous show Sa Re Ga Ma Pa
Challenge 2007 where the contest invited singers from all around the world. Auditions were
held outside India & contestants were judged by various music artistes from the Indian Music
industry. Only the top contestants from the auditions were selected to participate in the show.
Hero Honda is Rock Solid on its Top Position: An AdEx India
Analysis
The boom in the Automobile industry has also benefited TV Channels in terms of advertising
revenues from the Cars/Jeeps as well as the Two Wheelers category. Last time we delved into
the advertisers/brands within the cars/jeeps category. First, let's see which advertisers topped
TV advertising in 2002. Hero Honda Motors Ltd was the top advertiser then, accounting for a
little over 25% (one fourth) of the share. TVS Motor Company came a close 2nd with its share
just above the 25% mark and Bajaj Auto was ranked third with shares close to 17
3. PLAN HAR GAON HAR AANGAN :
Hero Honda was quick to realize that there was a huge opportunity waiting to be tapped. A
rural vertical was set up under Dua sometime in 2007. Five hundred sales representatives were
taken on board for the mission Har Gaon, Har Aangan (every village, every courtyard.) These
representatives have been given work tasks and not sale targets - they need to meet potential
customers and opinion leaders in villages. So far, Hero Honda has mounted three two-month
long "waves" through these men. Each wave has resulted in additional sale of 15,000-16,000
motorcycles. Farmers, Hero Honda knows, have money in their pockets twice a year when
they harvest their crop - once around May and June and then around October and November.
These "waves" are mounted just before the harvest so that Hero Honda is on their radar screen
when they have cash in hand. It also realised that one reason customers in these markets
choose Hero Honda over others is the easy availability of spares and authorised mechanics. As
a result, in the resale market, it commands a premium over rivals. This makes Hero Honda
a preferred brand, claims Munjal.Thus, the company decided to ramp up rapidly its touch
points with customers -showrooms, service centres and so on. From 2,000 in 2006, the number
has risen to 3,500 now. Munjal says the plan is to add at least 500 every year. Most of these
will be service points."Customers can travel over long distances to buy a motorcycle but not
for service. A customer can take his motorcycle for servicing four or five times a year," adds
Dua. Many of these touch points can start as a service centre and over time become
a sale centre.

4.CORPORATE SOCIAL RESPONSIBILITY:

STAKEHOLDER TIES AT THE GRASSROOTS

Hero Honda Motors takes considerable pride in its stakeholder relationships, especially ones
developed at the grassroots. The Company believes it has managed to bring an economically
and socially backward region in Dharuhera, Haryana, into the national economic
mainstream.
An Integrated Rural Development Centre has been set up on 40 acres
of land along the Delhi-Jaipur Highway. The Centre-complete with wide approach
roads, clean water, and education facilities for both adults and children-now nurtures a vibrant,
educated and healthy community. The Foundation has adopted various villages located within
vicinity of the Hero Honda factory at Dharuhera for integrated rural development. This
includes:
• Installation of deep bore hand pumps to provide clean drinking water.
• Constructing metalled roads and connecting these villages to the National Highway (NH -8).
• Renovating primary school buildings and providing hygienic water and toilet facilities.
• Ensuring a proper drainage system at each of these villages to prevent waterlogging.
• Promoting non-conventional sources of energy by providing a 50 per cent subsidy on biogas
plants.
The Raman Munjal Vidya Mandir
began with three classes (up to class II) and 55 students from nearby areas. It has now grown
into a modern Senior Secondary, CBSE affiliated coeducational school with over 1200 students
and 61 teachers. The school has a spacious playground, an ultramodern laboratory, a well-
equipped audio visual room, an activity room, a well-stocked library and a computer centre.
RAMAN MUNJAL MEMORIAL HOSPITAL
Multi-specialty hospital equipped with the latest diagnostic and surgical technology. The
Raman Munjal Memorial Hospital provides healthcare to the rural population in and around
Dharuhera, and also caters to accident and trauma victims driving along the Delhi-Jaipur
highway.
Raman Munjal Sports Complex
The Raman Munjal Sports Complex has basketball courts, volleyball courts, and hockey
and football grounds are used by the local villagers In the near future, sports academies
are planned for volley ball and basket ball, in collaboration with National Sports Authority of
India.
Vocational Training Centre

In order to help local rural people, especially women, Hero Honda has set up a
Vocational Training Centre. So far 26 batches comprising of nearly 625 women
have been trained in tailoring, embroidery and knitting. The Company has helped
women trained at this centre to set up a production unit to stitch uniforms for Hero Honda
employees. Interestingly, most of the women are now self-employed.

Adult Literacy Mission

This Scheme was launched on 21st September, 1999, covering the nearby
villages of Malpura, Kapriwas and Sidhrawali. The project started with a modest
enrolment of 36 adults. Hero Honda is now in the process of imparting Adult Literacy
Capsules to another 100 adults by getting village heads and other prominent villagers to
motivate illiterate adults.

Marriages of underprivileged girls

Marriages are organized from time to time, particularly for girls from backward classes, by the
Foundation by providing financial help and other support to the families.

Rural Health Care

Besides setting up a modern hospital, the Foundation also regularly provides doorstep health
care services to the local community. Free health care and medical camps are now a regular
feature in the Hero Group's community outreach program

4A’ s OF HERO HONDA

1. Availability
a) Hero Honda's 2 plants are in Dharuhera and Gurgaon, both in India. Third plant at Haridwar,
Uttaranchal has also started production by April, 2008.
b) Hero Honda's extensive sales and service network have spans over 3,000 customers touch
points.
c) The number of touch points (dealerships plus sales and service outlets) is already 3,500 from
2002 and another 500 would be added every year.

2. Affordability
a) Hero Honda offer cheapest motorcycles in India cost between Rs 30,000 and Rs 35,000.
b) Hero Honda with the help of ICICI Bank provides loan to the customers & also provide
easy monthly installment scheme to customers.

3. Awareness

a) Hero Honda Motors Ltd was the top advertiser then, accounting for a little over 25% (one
fourth) of the share.
b) Five hundred sales representatives were taken on board for the mission Har Gaon, Har
Aangan (every village, every courtyard.)
c) Company gives advertisement in different media vehicles time to time. Like in TV.
Magazines, newspaper, etc.
d) Hero Honda also organizes free service camps every year.
e) Hero Honda also takes art in trade fair.

4. Acceptability
a) Hero Honda has accepted by people because its strong brand image and
product quality.
b) Hero Honda is considered to be most fuel-efficient bike on Indian roads.
c) Hero Honda bikes are purchased more by daily users who needs more average of bikes as
well as look.
d)People prefer Hero Honda because of its product varieties & stylish design etc.

MARKET SHARE

Hero Honda Motors Ltd on 14- July- 2009 reported a forecast-beating 7.1 per cent rise in net
profit. Helped by falling commodity prices, a cut in excise duties and sales in rural areas.
Hero Honda's closest rival, Bajaj Auto Ltd, second week of July, 2009 reported a 23 per cent
drop in net profit for its fiscal third quarter as a lack of financing and high interest rates
crimped demand. Hero Honda was not as affected, as 60 per cent of its revenues come from
rural markets, where purchase are less reliant on loan financing than in urban areas and
where its 100 cc bikes are popular, Munjal said.
company Apr-Jun 08- Apr-Jun 09- Growth % Mkt. Share Rural Mkt. Urban Mkt.
09 10 % Share % Share %
Hero Honda 877089 1,094,99 24.84 51.26 10% 25%
6
Bajaj Auto 391,100 331,731 -15.18 15.53
TVS Motors 292,530 315,785 7.94 14.78
Honda 226,068 284,890 26.01 13.33
Total 1,865,76 2,135,86 14.48 -----
7 9

SALES IN RURAL MARKET

Hero Honda is a joint venture between Honda Corporation, Japan and the Mumjal family with
both parties owning 26% each. Hero Honda has made its strong presence in the rural India and
so it is able to withstand against the market competition. Selling of deluxe models of the bikes
and a decline in raw – material prices has brought an improvement in the EBITDA margin
level, in the financial year 2008. The dealership network of Hero Honda is strong and it also
has a good penetration effect in the rural areas. The company has manufactured 46,000 units
in Haridwar plant and its daily production has reached between 1000 to 1200 units on a
daily basis. Recently, Hero Honda reported an impressive July sales at 281317. The PAT
growth was driven by low tax provision at 22.2% versus estimated 29.5%. The EBITDA is at
Rs. 3.4B (verses estimation of Rs. 4.2B), which is due to lower realization growth and higher
other expenditure. There are few banks which are likely to reduce auto loan interest rate at 1 to
2%. In the coming month, Hero Honda is expected to do better sales volumes on account of
better monsoon and growth in the rural area.
 CONSUMER SEGMENT

Target Audience Tansportation Need Translate to Product Product Choice

Features
Men/Family To carry load Strong, sturdy Motorcycle/
-carrying family, and powerful Honda Activa
delivering goods etc
Women To move around with Great mileage, ScootyPep /
ease and easy to maneuver Hero Honda
comfort, not to depend and safe to ride pleasure etc.
on others
for commuting need –
scooter is
an agent of liberation

Why people prefer Hero Honda

 REASON OF CUSTOMERS PREFRENCE

Bajaj Hero-Honda

COMPETITOR IN RURAL MARKET

BAJAJ AUTO

Two-wheeler major Bajaj Auto is set to fight back falling sales with a renewed focus on bigger engine
bikes backed by six new launches in 2009.The company will kick off with a new product, which will
directly target rival Hero Honda’s best-selling Splendor/Passion range, the 135 cc XCD priced at Rs
45,000 and due for debut on January 21.Followed by this, the company also plans two more new
rollouts in value-segment (125-135 cc engine size) in April and July and three premium models (150
cc and above) later this year.Speaking to ET, Bajaj Auto managing director Rajiv Bajaj said: “We want
to pursue our strategy of being a motorcycle specialist and our focus is on motorcycles in the 125 cc
and above engine size, which has 35% share in the domestic two-wheeler market.Currently, we own
50% of the market for 125 cc and above engine size. We want to grow both our product range as well
as our marketshare in that segment. We do it through our DTSi engine technology, and for us, that’s
the core differentiator.” Apart from a head-to-head pricing with its rival brand, the XCD 135 cc DTSi
will come with a number of features than the premium stable mate Pulsar. That includes a 5-speed
gearbox, a 10.5 hp output and 65/70 km per litre mileage. It will sport a digital cockpit, nitrox rear
suspension, low-friction front suspension, twin pilot headlamps and LED tail lamps.The bike will roll
out from Bajaj’s Waluj plant and will also be produced at Pantnagar from February. Bajaj Auto has
been badly affected by the defaults that dried up financing in the twowheeler market. It’s motorcycle
sales declined 8% to 1,534,149 units during April-December from 1,660,182 units for the same period
last year. In December alone, it’s sales skid 33%. “In the entry-level segment, we witness a major sales
growth with our Platina model,” said Mr Bajaj. “Due to defaults, finance dried up and our numbers
fell to about 40,000 units per month from 75,000 units,” he added.In 2006 and 2007, the entry-level
segment, where cheap and cheerful 100 cc motorcycles rule, suddenly expanded when financiers
got aggressive and offered bikes at Rs 2,000 down payment. “It was bad business and it’s over and no
one will go back to that structure,” said Mr Bajaj. For Bajaj, that leaves the problem of a shortfall of
30,000-40,000 motorcycles a month. Mr Bajaj is using Bajaj Auto Finance (BAF), the in-house
financing company, to get over the entry-level sales spike. “However, NBFCs typically have higher
cost of finance. So we’re countering that with 1-2 years of extended free warranty cover,” Mr Bajaj
said. Already BAF has financed 25,000 bikes in December despite its 3% higher interest rate. “When
compared to other banks, that is a good performance,” said Mr Bajaj. Two years ago, Bajaj Auto had
announced that it would not look at the entry-level segment because there’s no money there. “We are
not abandoning 100 cc bikes,” said Mr Bajaj. “All we are saying is that we would want to address the
mid/value-segment that is now ruled by our competitor’s Splendor/Passion range, with 125 cc and
above products.”

COMPARISON BETWEEN HERO HONDA AND BAJAJ AUTO

There was a time when Bajaj Auto and Hero Honda were neck-and-neck race in the twowheeler
market. In April 2009, Hero Honda’s sales were up 29.5 per cent (as compared to April 2008) to
370,575 two-wheelers while Bajaj Auto’s sales slid 24 per cent. The gap between the two companies
increased to over 200,000 in the said month. However, not so long ago, Bajaj Auto was giving
sleepless nights to Hero Honda. In September 2006, it had come close to displacing Hero Honda from
the top slot. Hero Honda’s rule as the leader of the Indian motorcycle market, second only to China in
size, it looked would soon be history, writes Bhupesh Bhandari writes in Business Standard’s The
Strategist.... Left with no choice, it took a decision that changed its face forever. “We said we will
focus on market share rather than profits,” recollects Hero Honda Managing Director and CEO Pawan
Munjal. Result? From a producer of fuel-efficient motorcycles, Hero Honda has morphed into a
marketing-led organisation. Advertising campaigns, product refreshes and brand health — walk
blindfolded into the Hero Honda office in a crowded south Delhi market and the language spoken
there could lead you to mistake it for an FMCG company.“Every two-wheeler company is focused
at the product-end of the story. But all products are similar,” says brand consultant Harish Bijoor.
“Hero Honda is the first to go beyondthat. It shows in its domination of cricket, selection of youth and
style icons, andassociation with shows like MTV Roadies which improves involvement with the
hinterland.”In those days, all motorcycles and their advertisements looked similar. The diagnosis was
that the company’s differentiation in terms of propositioning to customers was weak.That was the first
gap that needed to be plugged.The second step involved discarding the earlier method of product
categorization on thebasis of engine size. This took the company to unchartered waters of consumer
profiling — what is his lifestyle and attitude, what is it that he holds dear in life and so on. As a result,
Hero Honda now comes out with new motorcycles, variants and refreshes keeping the customer
profile of each segment in mind. This shows in the commercials. Thus, the advertisement for the
Karizma (premium segment) comes with the punch line, “Always game.” The ad for the premium
segment Hunk doesn’t talk of speed or power at all — the focus is on the looks even while standing.
The CBZ Extreme comes with the promise, “Thinking is such a waste of time.” “Both the Hunk and
CBZ Extreme are 150 cc bikes but talk to different customers,” says Hero Honda Vice-president (sales
and marketing) Anil Dua, who joined Hero Honda around September 2006 from Hindustan Unilever.
“We have created very sharp positions for all our brands. You can’t substitute one model for another in
any advertisement.” This is important. Hero Honda has a large portfolio of products (13 motorcycles
and one scooter), so it has to create distinct position for each so as to avoid customer-confusion and
cannibalization of products.

WHY IT IS SUCCESSFUL BRAND

Hero Honda has managed to put in spectacular performance going from strength despite increase
in competition; the company's sales have witnessed an uptrend, registering an average growth of
42% in the three years under review. Hero Honda has managed to achieve this because its
strong brand image and proven product quality underpinned the performance growth
in recent years. Apart from the strong brand "splendor" the company's performance across the
spectrum of the motorcycle market helped it exploit the growing demand for 4-stroke motorcycle.
At the lower end the company has CD 100 SS at middle level splendor, passion and Dawn the
CBZ Extreme/ Karizma range is targeted at premium segment. Some years back Hero Honda are
getting stiff competition because of Bajaj, TVS and Yamaha have a presence in 125cc bikes
segments where Hero Honda has not any presence in this segment. Now this gap is filling up by
Hero Honda's new Splendor NXG, Glamour. But still there is a gap between 150cc to 225cc
segment which is most preferable segment by youth today. With newer and better
models are coming up customer has better and bigger choices to choose from. It is the competition
on various aspects such as price, design technology, after sales services and even purchases offers,
which provides to both buyer and seller. Even many dealers are in view that today Hero Honda
and Bajaj, thrives on competition. Right now it seems that the real war is between Hero Honda and
Bajaj auto. But one cannot discount the fact that there are other players, who are gaining strength
day by day. There was a time when Bajaj ruled the Indian Two Wheeler Industry with their
scooters in the form of Chetak and the likes. They had a minor presence in the
motorcycle market with some models from the Kawasaki range. Hero Honda was a minor
player in that market with their 4-stroke bikes, which were totally dominated by Yamaha with their
RX-100. Situation changed dramatically when the pollution norms meant, two wheelers
had to go 4-stroke and petrol started to get expensive. Hero Honda started emerging as
the dominating force with their extremely efficient engines. People started looking towards
motorcycles instead of scooters and the day arrived when Hero Honda became the largest two-
wheeler manufacturer in the world with Splendor breaking all records. Hero Honda kept playing
their cards with modest decorative upgrades to their range of bikes though competition forced
them to launch newer models in the form of Ambition, CBZ, and Karisma. However, the entry-
level bikes in the form of Hero Honda Splendor and Hero Honda Passion were not upgraded to
face the competition from Bajaj or TVS. The bike still retains extremely high confidence level
from the users and sells like hot cakes. Entry of Hero’s partner in the Hero Honda in form of
Honda changed all that. They announced their entry with an extremely successful bike Unicorn
which after months of its launch still has waiting periods of many weeks. More interesting models
are come in the market regularly. They also are competing with Bajaj heads on with their
extremely popular models in the scooters market (Activa and Dio). This has forced Hero Honda to
think again… Honda can emerge as a dominating force in the market with its extremely high
quality standards and technical expertise. And the results are coming in front of us. They have
announced their arrival in the scooters market for the first time with a model planned for launch.
Moreover, they have released a much-needed upgrade model of their best selling Splendor. Super
Splendor is a 125cc bike, which is being manufactured at the company state-ofthe- art plant in
Gurgaon, Haryana. They have priced this model at a modest Rs 42,500. This should help Hero
Honda retain their market share in the executive segment considering the brand value of Splendor.
They are also considering setting up a third plant to increase their production capacity, hich
already stands at an impressive figure of 2.4 lakh units.

WHY HERO HONDA IS A WINNER

BuildingSituation changed dramatically when the pollution norms meant, two

wheelers had to go 4-stroke and petrol started to get expensive. Hero Honda started
emerging as the dominating force with their extremely efficient engines. People started
looking towards motorcycles instead of scooters and the day arrived when Hero Honda became the
largest two-wheeler manufacturer in the world with Splendor breaking all records. Hero Honda
kept playing their cards with modest decorative upgrades to their range of bikes though
competition forced them to launch newer models in the form of Ambition, CBZ, and Karisma.
However, the entry-level bikes in the form of Hero Honda Splendor and Hero Honda Passion were
not upgraded to face the competition from Bajaj or TVS. The bike still retains extremely high
confidence level from the users and sells like hot cakes. Entry of Hero’s partner in the Hero Honda
in form of Honda changed all that. They announced their entry with an extremely successful bike
Unicorn which after months of its launch still has waiting periods of many weeks. More
interesting models are come in the market regularly. They also are competing with Bajaj heads on
with their extremely popular models in the scooters market (Activa and Dio). This has forced Hero
Honda to think again… Honda can emerge as a dominating force in the market with its extremely
high quality standards and technical expertise. And the results are coming in front of us. They have
announced their arrival in the scooters market for the first time with a model planned for launch.
Moreover, they have released a much-needed upgrade model of their best selling Splendor. Super
Splendor is a 125cc bike, which is being manufactured at the company state of the-art plant in
Gurgaon, Haryana. They have priced this model at a modest Rs. 42,500. This should help Hero
Honda retain their market share in the executive segment considering the brand value of Splendor.
They are also considering setting up a third plant to increase their production capacity, which
already stands at an impressive figure of 2.4 lakh units.

WHY HERO HONDA IS A WINNER

• Building a wide product range across segments
• Differentiated brand building campaigns
• Focus on driving sales in rural India
• Launching new models

Future Plan Of Hero Honda

If business could be called war, then business strategists are the commanders of it. What is the next
step? How is the organization to provide for the ever-growing demand of customers? How can
business leaders be aided to decipher the numbers and trends that emerge out of the company’s records
and the market? Such questions constantly surface in before businesses, as they find themselves
surrounded by unending pools of data. Leading Indian two-wheeler manufacturer Hero Honda Motors
Limited was no exception. Business heads at the two-wheeler company were constantly flooded with data
they needed to interpret and analyze. This led to Hero Honda’s They boiled down on the SAP Business
Intelligence (BI) Data Solution to ensure that the right information was provided to the right decision makers
at the right time in order to make the right business moves. Prior to the BI implementation Hero Honda Motors
had in place a combination of ERP (SAP) and homegrown reporting systems and Excel-based reporting
formats. But this did not fit the bill anymore. The main objectives that they sought to achieve through the BI
implementation were reliable presentation of information (‘one version of the truth’), assistance in quicker,
fact-based decision making, simplified graphical presentation of KPIs and other metrics, combination of
multiple data sources (ERP, DI, spreadsheets, legacy, etc.) and faster collection and dissemination of
information using portals, SMS, e-mails etc. as means. Vijay Sethi, Vice President-IS and CIO, Hero Honda
Motors Limited, says, “For example, we have robust systems for capturing transactional data which include
SAP ERP, dealer portal, vendor portal, SAP CRM, and SAP SRM etc. Each system has a lot of relevant data
and some amounts of native reporting”. While these met Hero Honda’s basic requirements, the business was
looking for help in things like aggregating from multiple sources, analyzing, graphical representation of data,
and exceptional reporting to help leaders take better as well as quicker decisions. It was this need that led to
the BI implementation. Hero Honda’s BI implementation was primarily accomplished by in-house teams. The
technology requirement to meet these business needs was identified through regular business interactions
which discussed the pain points. Based on these and looking at the business goals and requirements, it was felt
that a BI implementation would be very appropriate. The company selected SAP’s BI solution on the criterion
that they were already using SAP Business Suite as part of their strategy. Due to this exposure, Hero Honda
felt that SAP BI was a good contender. The team also evaluated the product’s features and its future roadmap.
Satisfied that the product was able to meet the organization’s requirements, Hero Honda chose to implement
the same. This also led to negligible integration issues and became a successful stepping stone forquick
implementation of BI process. Hero Honda’s BI implementation process started in March 2008. “ We
progressed with a mission of ‘Empowerment of business through delivery of ‘right’ information to the ‘right’
business decision makers at the ‘right’ time and of highest ‘quality’ data with appropriate level of formatting,
timeliness, history and other details helping them to achieve the organization’s business objectives and
goals,’” says Sethi. There were project milestones defined in theory, however, in actuality the BI
implementation was not taken as a project, but more as a change in business outlook. The company started
small with a sample set of users and certain functionalities to obtain business feedback. The team then worked
on this feedback to enhance the solution with an iterative and collaborative approach. Over a period of time,
Hero Honda added more functionality, and access was gradually given to users. Today,the Biimplementation
continues with the building of new functionalities and enrolling users for training, testing and hand-holding.
All IT projects have their share of change management, technical and other issues. Some of the problems faced
by Hero Honda during this BI implementation were:
•Usage of applications: People were so used to Excel formats that they wanted to see the same interface in the
BI solution. Effort was involved in changing their mindset and getting them used to the fact that this was an
on-line reporting and analytical system with various drill down and other query features—not a mere collation
of data from multiple sources that was being circulated in a particular format. This was resolved with the help
of extensive training and open communication between the BI implementation team as well as the users.
•Timely data updates: In some cases, data was not updated in time in the systems feeding information to the
data warehouse. This discipline was brought in by intervention of the senior management, as broadcasting
information was started from the system at a particular time.

•Change in user requirements leading to changes in data model: Modification of the existing data model
posed certain challenges depending on the extent of changes. A trial and error method was employed to finalize
these changes to meet Hero Honda's requirement from the BI implementation
•Security of information: There were concerns raised that after getting collated information would be shared
across the organization. However, these were mitigated when role-based authorization and access was brought
in.

After resolving these hassles, the BI implementation was managed by Hero Honda’s in-house team, while
technical support was received from the vendor. Even though no RoI figures were made available, the above
noted objectives were accomplished through the BI implementation at Hero Honda Motors. BI is now
integrated across the organization and users are quite reliant on this system now. In the near future, Hero
Honda plans to enhance the system based on user feedback. They also plan to work on enhancing analytical
reports along with dashboard capabilities and adding analytics derived from their Dealer Management System.
It is clear that Hero Honda’s BI journey has only just begun.
 conclusion
1. Most of the Hero Honda Bikes are purchased by young generation 18 to 30
because they prefer stylish looks and rest of the models of Hero Honda are
purchased more by daily users who needs more average of bikes than looks.
2. Hero Honda is considered to be most fuel-efficient bike on Indian roads.
3. Service & Spare parts are available throughout India in local markets also.
4. While buying a motorcycle, economy is the main consideration in form of
maintenance cost, fuel efficiency.
5. Hero Honda started growing in rural market rapidly with its add campaign
and promotion strategies in rural market.