2006164 Vicky Sood

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Vicky Sood To Study consumer buying behavior of 100cc motorcycle users in rural Punjab

and suggest suitable promotional plans. 1

T O S T U DY C O N S U M E R B U Y I N G

B E H AV I O R O F 1 0 0 C C M O T O R C Y C L E

U S E R S I N R U R A L P U N J A B &

S U G G E S T S U I T A B L E P R O M O T I O N A L

P L A N S .

TVS MOTORS

Faculty Guide: Prof. Simon Gorge

Industry Guide: Mr. Deepak Bajaj

Submitted in partial fulfillment of the Post Graduate Programme in Management at TAPMI, Manipal by:

Name: Vicky Sood

Roll No: 06164

Batch: 2006-2008

Date: 12 August 2007

M I P P H A S E I I R E P O R T

T A P A I M A N A G E M E N T I N S T I T U T E ,M A N I P A L , K A R N A T A K A - 5 7 6 1 0 4

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Area Marketing.

Organization TVS MOTORS

Faculty guide Prof. Simon George.

Key word Indian Two-wheeler Market, Motorcycles, Market Research, Rural Punjab,

TVS Motors.

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Date: August 12th, 2007

CERTIFICATE

This is to certify that the project titled To study consumer buying behavior of

motorcycle users in rural Punjab and suggest suitable promotional plan is a bonafide

work conducted by Vicky Sood (06164) under my guidance for partial fulfillment of Post

Graduate Diploma in Management.

Faculty Guide: Prof. Simon George

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ACKNOWLEDGEMENT

I acknowledge with gratitude the opportunity given to me by TVS Motors to work

with them. I really appreciate the confidence shown by entrusting me with this project. A

project of this nature required a lot of understanding about the organization and its

various nuances of working. In this regard, I would like to mention some people who

have been constant support in my endeavor.

I would like to express my sincere thanks to Mr. Deepak Bajaj, Area Manager for his

timely co-operation and much needed support in carrying out the project.

I also want to thank my Faculty Guide, Prof. Simon George, whose constant support

and guidance has helped me complete this project successfully.

I would also like to thank the managers of the various dealerships who helped me

doing the survey at their premises.

And finally to all those 129 people who took time out to share their thought and ideas

with me. Without you the project would not have been possible.

I express my heartfelt gratitude to the above mentioned people.

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EXECUTIVE SUMMARY

TV Sundram (TVS) Motors is the third largest company in the two-wheeler industry with

a market share of 16% and an annual turnover of over $ 650 million. It has closed the

financial year 2006-07 with 15% growth in the sale of motorcycles. The motorcycles

sales recorded 9,24,813 units in the financial year 2006-07 compared to 8,06,708 units

2005-06. It is the only automotive manufacture in India and the world's first motorcycle

company to get the prestigious Deming award. Its group company Sundaram Clayton was

the first company in India to receive the Deming award.

The project assigned was To study consumer buying behavior of motorcycle users in

rural Punjab and suggest suitable promotional or advertisement plan The project is

focused towards Star City, a motorcycle brand of TVS Motors in economy segment. Star

City, launched in beginning of 2006 is a stylish and economically priced product of TVS.

It got a very positive response from market in general. The management at TVS Motors,

Chandigarh is concerned with sales of Star City in rural Punjab. Sales figure of Star City

is increasing in urban cities of Punjab but in rural areas, the rate of growth is less as

compared to cities. The project is mainly concerned with finding out reasons of low sales

in rural sector and suggesting a suitable promotional or advertisement campaign to

increase sales.

For studying the consumer buying behavior of people in rural Punjab, intercept

interviews was conducted. People in villages, small towns in the district of Patiala,

Fategarh Sahib, Ludhiana and Amritsar were contacted. The targeted sample size was

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150, this was arrived after discussion with the management. The questionnaire prepared

was used as a guiding instrument while taking interviews.

For designing the questionnaire, 5-step model of Buying Decision Process was followed.

Questionnaire covered all 5 stages namely Problem recognition, Information search,

Evaluation of alternatives, Purchase decision, Post purchase Behavior. The response of

the person interviewed was also filled in the same questionnaire for record keeping.

Sub-dealers and dealers in the main districts were also interviewed. Their current

promotional campaigns and reasons of low sales were examined. Also buying behavior of

few customers who came to purchase the bike was also observed at the location. This

gave first hand observation of buying behavior of those customers.

The scope of project was limited to increasing sales by suggesting the regional

promotional or advertisement campaign with given centralized campaign, fixed product

range and existing prices. Also only Star City product range is considered, premium bike

range of TVS (Apache) is not considered for the project.

After the research, few promotional campaigns were suggested, out of which reference

campaign was accepted and it was decided to implement the same.

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TABLE OF CONTENTS

1. Introduction 7

2. Problem Definition 13

2.1.Management Decision Problem

2.2.Management Objective

2.3.Marketing Research Problem

3. Construct 14

4. Information To Be Collected For Study 16

5. Methodology 17

6. Findings 19

6.1.Problem recognition. 19

6.2.Information search. 20

6.3.Evaluation of alternatives. 21

6.4.Purchase decision. 23

6.5.Post purchase Behavior 24

7. Effectiveness

7.1.Effectiveness of promotional Campaigns 267.2.Effectiveness of advertisements 28

8. Conclusion 29

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9. Recommendation 31

9.1.Reference Campaign 319.2.Improvements in promotional campaigns by dealers / Sub-dealers 319.3.Free calendars and posters 33

Appendix

Check List for Personal Interviews 32

References 34

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INTRODUCTION:

TV Sundram (TVS) Motors is the third largest company in the two-wheeler industry with

a market share of 16% and an annual turnover of over $ 650 million. Interestingly, it is

the only Indian company without a foreign collaboration in the two-wheeler industry. It

has presence in all the segments viz. motorcycle, scooterettee and moped.

In 1982, the company entered into a technical collaboration to manufacture two-wheelers

in collaboration with Suzuki Motors of Japan. TVS was one of the leaders in two-wheeler

industry. However, disagreement on several aspects including development of TVS brand

and exports lead to severance of ties with the joint venture partner in 2002. This forced

the company to develop its own R&D expertise and commit itself to limited investment.

When the company opted out of the collaboration with Suzuki in 2002, many believed

that TVS was headed towards extinction. But the company proved all of them wrong and

came out with a very successful `TVS Victor'. However, since then growth has slowed.

TVS Motor Company has closed the financial year 2006-07 with 15% growth in the sale

of motorcycles. The motorcycles sales recorded 9,24,813 units in the financial year 2006-

07 compared to 8,06,708 units 2005-06.

It is the only automotive manufacture in India and the world's first motorcycle company

to get the prestigious Deming award. Its group company Sundaram Clayton was the first

company in India to receive the Deming award. TVS Brakelinings and TVS Motors

quickly followed and got the prestigious award.

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Milestone for TVS Motors:

y 1980: India's first 2 seated 50cc Moped TVS 50, launched in Aug.y

1994: Launched first indigenous Scooterette (sub-100 cc variomatic scooters), TVS

Scooty in June.

y 1997: Launched India's first 5-speed motorcycle, the Shaolin in Oct.y 2000: Launched TVS Fiero, India's first 150 cc, 4 stroke motorcycle in April.y 2001: Launched TVS Victor, 4-stroke 110 cc motorcycle, in August, India's first fully

indigenously designed and manufactured motorcycle.

y 2004: Launched TVS Star in Sept, a 100 cc motorcycle which is ideal for roughterrain.

y 2006: TVS Apache- Bike of the Year 2006 by Business Standard Motoring.

Products:

In the scooterette segment TVS has Scooty ES, Scooty PepDlx and Scooty Pep Plus. All

these are targeted towards women.

Indian motorcycle is segmented into four categories and TVS motors have sufficient

presence in all of these markets except in the high-end sports segment.

y Entry Level (below 100 cc), Priced between Rs.32,000 - Rs 40,000

- Star DLX, Star City, Star Sports and Centra.

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y Economy (120 cc - 130 cc) Priced between Rs. 40000 to Rs. 48000

- Victor GLX 125, Victor GX and Victor Edge

y Premium (140 cc - 160 cc) Priced between Rs. 48000 to Rs. 60000.

- Fiero FX, Fiero F2, Fiero F3 and Apache

'StaR Sport' is recent launch of TVS in entry-level segment. It is a stylish, compact and

affordable 100 cc motorcycle target towards urban consumers who always go for sleek

and compact style.

Competitors Information

Motorcycle manufactures in India are: -

1. Hero Honda Motors Limited (HHML).2.

Bajaj Auto Ltd. Or BAL.

3. TVS Motors or TVS.4. Honda Motorcycle & Scooter India Pvt Ltd (Honda).5. Kinetic Engineering Ltd (KEL).6. Kinetic Motor Company Ltd (KMCL).7. LML Limited (LML).8. Majestic Auto Ltd (MAL).9. Royal Enfield Ltd. (REL)-unit of Eicher.10.Suzuki Motorcycle India Pvt Ltd (Suzuki).11.Yamaha Motor India Pvt Ltd(Yamaha).

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With presence of 11 manufacturers Indian two wheeler market is very competitive.

Hero Honda Motors Limited (HHML) is the leader in the industry with a market share of

40% in H1FY2007, followed by Bajaj Auto Ltd. Or BAL (27.6%), and TVS Motors or

TVS (19.3%). Thus, the top three players account for around 86.7% of total domestic

sales of two wheelers in India.

In the motorcycle segment, Hero Honda is the dominant player with a market share of

46.3%, followed by Bajaj (32.5%), and TVS (14%). Top five players account for 98% of

total sales.

TVS Bajaj Hero Honda Honda Kinetic Yamaha

Market Share 14% 32.50% 46.30% 2.10% 0.10% 3.70%

Entry level and Economy Segment: This segment (75-125 cc) is the largest segment and

accounts for 80% of domestic motorcycle sales. Although there are only 5 players,

competition is intense amongst the leading three manufacturersHHML, BAL, and

TVS. Although HHML leads in this segment, BAL has gained market share during

H1FY2007 mainly because of increased sales of Platina and Discover brands.

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Table showing various models offered by major players in entry level and economy

segment along with their market share in H1FY2007 is given below:-


Entry level Star Boxer CD Dawn Boss Crux

Centra Wave CD Deluxe

Economy Victor Discover Splendor Shine Velocity Libero

Platina Passion

Glamour

Market share 13.70% 23.60% 58.80% Neg 0.10% 3.70%

Premium segment: The 125-250 cc motorcycle segment is the fastest growing sub-

segment. The sales in 125-250cc motorcycle segment are increasing from past few years.

In H1FY2007 it accounts for 20.8% of motorcycle sales, as compared with 16.8% in

FY2006, and 10.9% in FY2004. BAL is the leader in this segment with a market share of

62.7% in H1FY2007. However, BALs market share has declined because of entry of

new players such as Suzuki, and launch of new products by competitors.

Table showing various models offered by major players in premium segment along with

their market share in H1FY2007 is given below:-


Models Apache Pulsar CBZ Unicorn Laser Fazer

Fiero Avenger Karizma

Market Share 13.50% 62.70% 4.20% 10.80% Neg 4.30%

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The project I did was focused towards Star City, a motorcycle brand of TVS Motors in

economy segment. Star City, launched in beginning of 2006 is a stylish and economically

priced product of TVS. It got a very positive response from market in general. The

management at TVS Motors, Chandigarh is concerned with sales of Star City in rural

Punjab. Sales figure of Star City is increasing in urban cities of Punjab but in rural areas,

the rate of growth is less as compared to cities. The project is mainly concerned with

finding out reasons of low sales in rural sector and suggesting a suitable promotional or

advertisement plan to increase sales.

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PROBLEM DEFINITION

To study consumer buying behavior of motorcycle users in rural Punjab and suggest

suitable promotional or advertisement plan

MANAGEMENT DECISION PROBLEM

Decreasing growth rate of sales of TVS Star range in rural Punjab: Star city, launched in

beginning of 2006 is a stylish and economically priced product of TVS. it got a very

positive response from market in general. Management at TVS Motors, Chandigarh is

concerned with sales of star city in rural Punjab. Sales figure of star city was increasing

in urban cities of Punjab but in rural areas, the rate of growth was less as compared to

cities. The project is mainly concerned with finding out reasons of low sales in rural

sector and suggesting a suitable promotional or advertisement plan to increase sales.

MANAGEMENT OBJECTIVE

1. To increase sales in rural Punjab.2. To design the effective promotional or advertisement plan.

RESEARCH OBJECTIVE

1. To study consumer buying behavior of people in rural Punjab.2. To study effectiveness of existing promotional campaign.3. To study effectiveness of existing advertisement campaigns.

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CONSTRUCT

1. For studying consumer buying behavior: By studying the consumer buyingbehavior of people in rural Punjab we found out the consumer preferences

regarding motorcycles, in terms of what they like to purchase, what are the factors

that influence their purchase, what kind of promotional campaign will effect them

most etc. As only Star City product range is considered, only motorcycle users

using 100cc motorcycles were interviewed. Premium bike ranges like TVS

Apache, Bajaj Pulsar, Hero Honda CBZ were not considered for the project.

Intercept interviews were conducted and Questionnaires were filled by

interviewers only instead of asking person being interviewed to fill it. This is

mainly because of demographic profile of people. Most of the customers

interviewed were either illiterate or were not used to filling the questionnaire. For

obtaining their natural response interviewer have to become familiar to them and

interact with them in their language. Asking them for filling the questionnaire will

affect their natural response.

2. To study effectiveness of various existing promotional campaign: Fromexploratory research few promotional campaigns were short-listed, which could

be most effective. Through the conclusive research, effectiveness of similar

promotional campaigns launched in past was found. It was measured by finding

out the likeability of those campaigns. The customer will like a campaign, if it

fulfills the expectations in his mind. Information with the customers about the

previous promotional campaigns launched was also used as a criterion for finding

out effectiveness of promotional campaign. Sales data was not used because it

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was felt that because of number of channels in between, past failure or success

could be because of various reasons.

3. To study effectiveness of various existing advertisement campaign: Conclusiveresearch was done to find out the effectiveness of short-listed advertisement

campaigns. Effectiveness was judged based upon the percentage of people who

can recall that advertisement and attractiveness of the same to the customers. The

scope of project was limited to increasing sales by suggesting the regional

promotional or advertisement campaign with

1. Given centralized advertisement and promotional campaign.2. Fixed product range.3. Existing prices.

So effectiveness of advertisement campaign launched at regional level was only

measured.

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METHODOLOGY

Research was carried out on people living or working in rural Punjab area. District of

Patiala, Fategarh Sahib, Ludhiana and Amritsar were covered. For conducting the

research, firstly an exploratory research was done. Twelve consumers and three dealers

were interviewed during this phase. Based on these interviews, a questionnaire was

prepared for conclusive phase.

SAMPLING PLAN

Sample size Exploratory: 12

Sampling Size Conclusive: 129

Sampling Method: Convenience Sampling.

In conclusive research people in villages, small towns in the district of Patiala, Fategarh

Sahib, Ludhiana and Amritsar were interviewed. In total 129 motorbike users were

interviewed, out of which 48 were TVS owners, 30 Bajaj and 51 owned Hero Honda. In

general random sampling was done but few TVS customers were always interviewed in

each location, to know in detail about the reason behind their purchase and overall

experience with TVS bikes.

In all consumers from 25 villages were covered in 9 districts, namely Patiala, Fategarh

Sahib, Ludhiana, Amritsar, Khanna, Kharar, Derabassi, Taran Taran, Mohali.

1. People who purchased the bike in the last one year were interviewed.2. Most of the consumers interviewed were farmers or shopkeepers.3. Most of people interviewed were between 25 to 35 years of age.

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Age Distribution

0%

5%

10%

15%

20%

25%

30%

Less

then 20

20-25 26-30 31-35 36-40 41-45 Above

45

Age

Percentage

ofpeople

DATA COLLECTION METHOD

In both exploratory as well as conclusive phase data is collected through personal

interviews. After exploratory phase a Questionnaire was prepared to be used as a

checklist/guiding instrument for conducting intercept interviewsduring conclusive phase.

Sub-dealers and dealers in the main districts were also interviewed. Their current

promotional campaigns and reasons of low sales were examined. Also buying behavior of

few customers who came to purchase the bike was also observed at the location. This

gave first hand observation of buying behavior of those customers. For data analysis,

Univariate analysis was followed and mainly frequency distribution was done on data

collected. Brief demographic profile of customers interviewed:

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FINDINGS

After interviewing the customers, dealers and sub-dealers, data was analyzed and main

findings from the research grouped under various sub-headings can be listed as

following:

PROBLEM RECOGNITION

Through this part of Questionnaire reasons of purchase of motorcycle by customers in

Punjab was found out. What was the need of motorcycle to him and what triggers this

need to purchase the new motorcycle or replace the old one with new.

First time owners:

1. 63% of motorcycle customers who bought the motorcycle for the first time saidthey did so because of the style associated with the bike.

2. 54% said they bought motorcycle because of fuel efficiency.3. 14% said they bought it because of social status.4. 18% said they bought the bike because its easy to drive in farms or on rough

roads.

Customers who changed from old two-wheeler

1. 67% of motorcycle customers who changed from old two-wheeler (motorcycle orscooter) said they did so because of the improved fuel efficiency.

2. 47% changed it because of improved looks of new bike.3. 32% said they changed the bike because of social status.

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INFORMATION SEARCH

Through this part of Questionnaire sources of information for rural Punjab customers and

the brands they considered were found out.

Sources of Information

It was found out thatInformation function was performed mainly by commercial sources

like TV advertisements, road shows, cultural nights, banners, hoardings outside

dealership etc. Following facts regarding above were observed:

1. 72% of people interviewedneverpay attention to any wall paintings.2.

83% of consumers interviewed paid attention to road shows conducted by

motorcycle companies.

3. Only 19% of consumers interviewed have seen cultural nights.After obtaining the information friends and relatives performed legitimizing function.

Most of the customers discussed among their friends about various available bikes.

Brands in theirawareness set: Mainly Hero Honda, Honda, Bajaj, TVS, Yamaha, Enfield

and Suzuki. Few of them were also aware of Kinetic & LML bikes. All of them have

TVS bikes in their awareness set.

Brands in theirconsideration set: Most of the customers interviewed have Hero Honda,

Bajaj, Honda and TVS in their consideration set. Above brands fulfilled their buying

criteria. As only 100cc bike owners were interviewed most of them didnt have Enfield or

Yamaha in their consideration set.

Brands in their choice set: There was quite a variation among the short-listed brands by

various consumers; there was no common choice set. But most of respondents have more

then one brand in their choice set as from our research we found that 63% of consumers

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interviewed considered brands other then what they purchased. Approximately 56%

people have TVS bikes in their choice set. That is approx. 7% of total consumers though

considered other brands but didnt consider TVS for purchase.

EVALUATION OF ALTERNATIVES

Next step after searching for information is short-listing of brands based on various

parameters. Through this, various evaluation parameters for buying motorcycle were

found. Belief and attitude of people towards TVS were also observed.

1. The evaluation parameters for motorcycle buying include fuel efficiency, looks,power, style, price, comfort, safety features, availability on loan, availability on

exchange option, availability of dealership in the surrounding area etc.

2. Approximately 62% of people say that reasons behind their choice are features ofbike like mileage, pick-up, looks and comfort. That is these features should be

highlighted during advertisements.

3. Attitude: 36% consumers didnt want to purchase TVS probably because ofignorance or other reasons. Approx. 60% of these consumers were willing to

purchase Star City once informed about the features and competitive pricing of

Star City. That is with convincing advertisements the unfavorable attitude of

motorcycle buyers can be changed into favorable attitude. We need to do

Psychological repositioning of TVS brand in minds of these customers.

4. A good percentage of people (approx. 25%) visit or prefer to visit shop/showroom familiar to them or in which their friend or relative or a villager works.

Their deciding factor is the behavior or attitude or familiarity with shop rather

then the brand. Few TVS dealership didnt fared well on this front. I met sub-

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dealers of Patiala, Mohali, Mandi-Gobindgarh, Amritsar, Taran Taran, Ludhiana

etc. Most of these sub-dealers were happy and satisfied with interaction with their

dealers. The only problem found was with dealer of MGG (Mandi Gobindgarh).

The coordination between the dealers and sub-dealers was not appropriate in this

case. During a talk with owner of Mandi-Gobindgarh dealer, he said Life of a

sub-dealer is 2 years, 1 year he spend in establishing his business and second in

repenting and wrapping up. Above clearly proves the lack of support and

encouragement given by this dealer to its sub-dealer, which further affects the

customer dealing with that sub-dealer. At the time of survey there were 6 sub-

dealership under MGG in chunni. I visited three and out of those 3, 2 got closed

recently.

a. Chunni sub-dealership didnt have any facility, didnt have any salesman,owner also didnt have any knowledge about bikes, couldnt explain much

to customers.

b. The sub-dealer in Batala recently left the dealership and has lots ofgrudges with the main dealer on various issues including supply of

required models and colors.

c. Sub-dealership in Sirhind also closed few weeks back as the owner wentbankrupt.

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PURCHASE DECISION

The final decision of purchase of motorcycle by rural Punjab customers involves deciding

on Price range, Brand, Dealer and Payment method that is whether cash or loan.

1. Price Range: Findings regarding price range:a. Only approx. 12% of people, used price as selection criteria for choosing

the bike. Though they have broad idea of their range, only 12% of people

based their final selection on price.

b. 65% of consumers interviewed have flexible budget that is they choose thebike without considering the price. Majority of people living in rural

villages have a broad idea that they want to purchase an economical

segment bike. They select the bike among these and purchase it, without

considering the price of individual model.

2. Brand: While deciding on the brand, 25% of people give main importance toBrand Name. That is these 25% people didnt even consider other motorcycle

brands available in market.

a. 94% of these brand loyal people are loyal towards Hero Honda.b. Rest 6%, stick to their old motorcycle brand. That is, they exchange old

motorcycle for the new motorcycle but remain with same brand, only the

model changes.

c. When these Hero Honda brand loyal customers were informed about StarCity, its price and features, most of them said that they would have

considered Star City, if they had known about the bike before. That is,

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even these customers could be converted into Star City, if approached at

proper time.

3. Dealer: A good percentage of people (approx. 25%) visit or prefer to visit shop/showroom familiar to them or in which their friend or relative or a villager works.

Their deciding factor is the behavior or attitude or familiarity with shop rather

then the brand.

4. Payment method Cash or loan: 53% of customers did payment throughfinancing, so availability of attractive finance option was also an important

criteria for selection of bike for these customers. Also, more then 95% of people

didnt need low down payment schemes. Down payment of Rs.10,000 can be

easily arranged by the person interested in purchasing bike.

POST PURCHASE BEHAVIOR

Finding out the post-purchase behavior is also important for this research. It forms an

important part of buying decision process, because:-

1. Availability of spares and service centers in the nearby area: For a product likemotorcycle, availability of service center in nearby area is very important. Almost

equally important is availability of spares. TVS faired badly on this front. Though

there are service stations available in rural areas of Punjab but problem is with

spares. Many of TVS customers faced the problem of spare parts while few of

those interviewed said that they didnt bought TVS because of difficulty in spare

part availability. Sub-dealers didnt keep large inventory of spare part.

Sometimes, even dealers have to order few spare parts from area head office.

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2. Repeat purchase: A satisfied customer can not only refer others to purchase the

product but can also purchase a new bike for himself. While conducting the

survey I met number of such customers who have purchased TVS for second

time. Out of total customers, who has changed bike more then once, 27% were

loyal TVS customers whose both previous and current bike is TVS.

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EFFECTIVENESS OF PROMOTIONAL AND ADVERTISEMENTS CAMPAIGN

From consumer behavior study we found that among various promotional campaigns

reference campaign can give very positive results for customers in rural Punjab. Few

regional level advertisement campaigns were also analyzed.

PROMOTION EFFECTIVENESS: REFERENCE CAMPAIGNS

Referring a friend or a relative to purchase a bike, comes naturally to customers in rural

Punjab. By launching a reference campaign program we are just giving a small reason to

TVS bike owner to refer their TVS bike to others. Figures given below reveal the power

of such a promotional campaign:

1. Approx. 25% of people in rural Punjab purchased the brand, which was used bytheir friend or family members. They didnt search the market for the available

brands; instead they brought the bike suggested by the friend.

2. 70% of people interviewed do refer bikes to other persons.3. On an average, each person who bought the bike made at least one other person to

purchase bike.

4. 64% of people will like to have a gift for referring bike to others.5. 57% of people said that they will refer bikes to more persons, if they know that

they will get a gift.

Other promotional campaigns like loan festival, discounts etc. can only increase short

term sales, while reference campaign can increase sales in long term also. Moreover,

currently rural Punjab market is fully saturated in terms of other promotional campaigns.

Cash Discounts, Loan festival no longer excite a customer and didnt offer a reason for

customer to purchase a bike. These days customer didnt buy a bike because of a

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availability in low rate finance or because of some kind of discount, because these offers

have become very common in past. And they have taken these schemes for guaranteed.

The reference scheme was launched in the past also but at that time it was launched as a

part of another major program, Miles & Smiles which has many other things, included

in it. Reference was just a small part of it. Users hardly paid attention to the reference

part of it. So we decided to come up with a separate reference campaign program, which

will focus specifically on reference and will give benefit to both the person who has

referred a bike as well as those who have purchased a new bike with reference.

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ADVERTISEMENT EFFECTIVENESS

For finding out the effectiveness of advertisement campaigns, information to find out the

impact of these campaigns on customers and their likeability towards various kinds of

promotional campaigns was collected. Few of findings were:

Wall Paintings: 72% of people interviewedneverpay attention to any wall paintings.

Road Shows: Road shows turn out to be most effective. 83% of consumers interviewed

had paid attention[ to road shows conducted by bike manufacturers.

Cultural Nights: Only 19% of consumers interviewed have seen cultural nights, and most

of them couldnt remember the organizers name.

Mechanic encouragement: Only very few people ( 8% of those interviewed) take the

guidance of mechanic these days. So we need not focus on emphasizing more on

mechanic encouragement. The current measures in this regard are sufficient

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CONCLUSION

1. It can be observed that most of people who considered brands other then whatthey purchased, considered TVS. Also among the people who did not want to

purchase TVS, 60% were willing to do so when informed properly about latest

launches by TVS. So if more and more people are approached and properly

informed, sales can increase. We need to focus on those customers who didnt

survey the market and didnt consider various options available in market. More

and more people can be informed by having wider reach in villages or by

increasing the footfall in showroom. Few regional promotional campaigns

focused at increasing the footfall in showroom are presented in recommendation

part.

2. Psychological repositioning of TVS brand in minds of customers need to be done.This is especially for customers who initially did not want to purchase TVS but

subsequently when properly explained showed interest in purchasing it.

3. Promotion based on pricing will be helpful in setting the mindset of people.Economical prices can be promoted through low pricing of one model. All models

need not be priced low.

4. Promotions should have deeper reach; Customers who blindly considers HeroHonda need to be targeted. So promotions should be such that it gets into mind of

peoples, not just ears. People who have not seen advertisements should saw it and

people who have seen but still considered only Hero Honda, should consider

TVS. As the scope of this project is limited to regional level promotions, few

regional promotional campaigns are discussed later in report.

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5. Schemes like zero down payment are not required or sought after by consumers.Instead low rate of interest is always looked after in a finance scheme. Less

documentation or few basic formalities can also help increase sales.

6. Non-availability of a strong sub-dealer in the nearby area can also be a deterringfactor for purchasing TVS bikes. By strong sub-dealer, I mean the dealer who is

in the business from the past few years and has got reputation that he can support

service during the later years.

7. Also in places where sub-dealers are strong, sales can be increased if we canincrease footfall in the showroom and thus familiarity with the showroom and

people there.

8. Best way for promotion in area under study is through road show or culturalprogram instead of wall painting, banners.

9. Reference campaign, with proper advertisement can be highly successful for ruralvillages.

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RECOMMENDATIONS

Reference Campaign: As clear from findings a full fledged reference campaigns can

be launched in rural Punjab to increase long term sales. Proper care should be taken to

avoid the prior defects in the similar reference campaigns. In this campaign, service

manual of every new bike sold will have two coupons of bike reference. These will be

given free of cost. Whenever a person refer someone for TVS bike, his coupon will

be taken and entered for lucky draw, in this lucky draw he will get an assured gift

worth Rs.200, or he can also win various other prizes including a TVS Bike.

Following points should be taken care:

1. If possible, TVS should sponsor prizes directly, instead of dealer, this way dealerwill not hesitate in promoting the scheme.

2. Promotions for this scheme will be there in TVS showrooms and service stations.Posters will be displayed in service stations, so that customers coming for service

get reminded about this scheme and can know more about the scheme in detail

from service centre only.

Possible Improvements in promotional campaigns by Dealers / Sub-Dealers

1. At least two salespersons for the fields should be there at every sub-dealership.Though most of sub-dealerships have field salespersons but few didnt have any

field salespersons, only salespersons for showroom. These salespersons should go

to villages, set up a canopy at main entrance/main area and distribute pamphlets in

the village. While distributing pamphlets, they can also inform the villagers that

TVS people are there at the entrance/main area of village ad they can come if they

want to have test-drive or any other clarification about TVS bikes.

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2. Timings of Sales people: It was found that in most of dealership timing ofsalesperson is between 10 a.m. to 6 p.m. At about 5:30 p.m. they used to start

packing up. While potential customers in villages also are available in evening. So

timings of field sales persons should be flexible and it should be made sure that

they are promoting bike in evening. Part time workers can also be employed for

this.

3. Each sub-dealer should have at least one canopy of its own.4. Each dealership should have a Demo-Van of its own for promoting in its own area

and areas of its sub-dealers.

5. Density of TVS Star bikes in villages should also be taken care. That is all thevillages should have few Star-City bikes and villages with zero or very few Star

Citys (like Bahadurgarh near Patiala) should be concentrated upon. This is

important because reference is very important in villages. If we have few satisfied

customers in village, we will automatically get orders because of mouth to mouth

promotion. It is important to promote in villages where proportion of TVS bikes is

less. So sub-dealers should focus on getting a break in villages where we have

less proportion of TVS bikes.

6. Sales Persons should be trained and informed about how to defend their price. Heshould be able to explain to customer the difference between the competitors

model ( e.g. Bajaj Platina ) and Star City.

7. Dealers/sub-dealers with TVS representative should contact factories forlaunching special scheme for employees of that company.

8. Dealers/ Sub-dealers should promote in nearby colleges.

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Free calendars / posters - Need to increase footfall

As discussed above, it will be beneficial if number of footfalls in the showroom

increases. So for that we need to design ways in which potential customer walks in

not just for purchasing the bike but for other reasons as well. Some of such campaigns

could be:-

1. Free distribution of calendars and posters: TVS is already distributing lotsof posters and calendars, but in this promotional plan these things will be

distributed only through showrooms. Advertisements will be given in

newspaper mentioning that people can come, see and test drive Star City.

And on presenting the cuttings of this advertisement they can take poster

or caps of their choice and enter into a lucky draw coupon. Small Clipping

of various available posters will be there in advertisement to attract

people. Various possible options for posters will be a Star City bike,

Apache, a sports bike, any TVS bike with a female model, a religious

place poster etc.

2. Availability of accessories required for driving bike like Helmet, trendyjacket, caps, wrist bands etc.

.

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Appendix 1 Check List for Personal Interviews

Bike Owned (Model, Year)

1)

Does bike you own currently, your first bike? (Y/N)If Yes, Why you purchased this bike?

a. Utility ______________________________________________________b. Style _______________________________________________________c. Power ______________________________________________________d. Social status Children, Neighbor etc. ____________________________

If No, What was brand of your old bike? ________________________________

Why you changed your old bike?

a) Utility ______________________________________________________b) Style _______________________________________________________c) Power ______________________________________________________d) Social status Children, Neighbor________________________________

2) What is the special thing in the bike, because of which you purchased it?a. Price.b. Reference: Friend / Relative / Neighbor / Mechanic.c. Brand ....which one?___________d. Technical features : Mileage/Pick up/Looks/Comfort.e. Finance Scheme.f. Exchange Mela.

3) Price you were willing to pay for a motorcycle:a. 30000-40000.

b. 40000 50000

c. More then 50000

d. Doesnt matter or not important.

4) At the time of purchase, did you consider other brands before buying. (Yes / No)If Yes, which other brands were considered? ____________________

If No, Why you considered only this brand?

_______________________________________________________________________

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5) Before buying, did you tried to gain knowledge about other available brands? (Y/N)6) Did you visited TVS showroom before buying. (Yes/ No)7) Would you like to purchase TVS. (Yes/ No).8) Looking at specifications/features and price of Star City, would you like to purchase

it. (Yes/no)

9) Will you like to opt for finance scheme? (Y/N)10)What you look out for in a finance scheme?

a. Low down-payment.b. Low EMIc. Low Interest Rate.d. Less Documentation.e. Long Termf. Short Term.

11)Did you look out for low down payment option? (Y?N)_______________________.12)What is the comfortable down payment for you for purchasing a motorcycle. ______.(Less then 1000, 1000-3000, 3000-5000, 5000-7500, 7500 10000, 10000-15000,

15000-20000, 20000-25000, More then 25000)

13)What interest rate is acceptable to you?______________________14)How many bikes are there in your family?__________________15)Are u satisfied with the bikes you purchased (yes / no).16)Have you referred/will you refer your bike to some one else. ( If Yes/ No)If Yes, How many bikes were purchased with your reference.___________

If no, Why you didnt referred your bike to others.

________________________________________________________________________

17) Whose guidance you sought before buying the bike._________________________

(Mechanic, a motorcycle expert, a knowledgeable person in family)

17)Will you like to have some gift for referring someone to purchase your brand?(Yes / No)

18)If you are getting a gift, will you refer your bike to more persons. (Yes / No)19)What you will like to have as a gift for referring others.

_____________________________________________________________________

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a. Free extra service coupons for your bike.

b. Free accessories for your bike.

c. Free service or equivalent amount accessories for your bike.etc.

20)Where you generally notice advertisements other then TV?________________________________________________________________________

21)Have you ever notice wall paintings? Name few brands/products whose wallpaintings you have noticed. ______________________________________________

22)Have you ever noticed road shows? If Yes, whose___________________________23)Have you ever noticed cultural nights? If Yes, whose_________________________24)Do you have a sponsored calendar/poster at your home? Which company/shops

calendar is that? _____________________________________________________

25)Would you like to have TVS star poster/calendar at your home. ( Yes/No)26)Which photograph you will like to have on the calendar? _______________________( e.g. a. TVS Bike b. Sports Bike. c. Some religious place like golden temple)

27)Which showroom you visited for buying ?A. You selected the bike and visited nearest showroom selling that bike.B. You visited the shop in which your relative/friend/villager works.C. Visited the shop from which you purchased your old vehicle.

28) Out of the following, which one do you think is most effective, or to which you are

exposed the most?

A. Wall Paintings

B. Banners / Posters.

C. Individual Posters given to you.

D. Road Shows.

E. Cultural Show / Dance night.

29) Give you views about TVS bikes.

________________________________________________________________________

30) Suggest a punchline for a TVS ad-compaign.

________________________________________________________________________

( like motorcycle hoven tann hovey TVS Star or TVS Star Pasand Punjabian Di

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Other Details

Name: ____________________________

Age. : _________, Gender : _________( M / F)

Phone No. __________________________

E-mail id : __________________________

Village : ____________________________

District_____________________________

Profession __________________________

Other comments

________________________________________________________________________

________________________________________________________________________

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Reference:

1. www.tvsmotor.in, May 2007http://www.tvsmotor.in/pressarticle.asp?id=26&aid=146.

2. www.icra.in, May 2007http://icra.in/recentrel/Industry%20Monitor-200612.pdf

2006164 Vicky Sood

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