A project report on advertising effectiveness of cold drinks — Document Transcript 1. Projectsformba.blogspot.com A PROJECT REPORT ON “STUDY OF ADVERTISING EFFECTIVENESS OF COLD-DRINKS IN BHOPAL” SUBMITTED FOR THE PARTIAL FULFILLMENT OF MASTER OF BUSINESS ADMINISTRATION SUBMITTED TO:GUIDED BY: SUBMITTED BY: MILLENNIUM INSTITUTE OF TECH. & SCIENCE BARKATULLAH UNIVERSITY, BHOPAL YEAR 2010Projectsformba.blogspot.com 1 2. Projectsformba.blogspot.com A PROJECT REPORT ON “STUDY OF ADVERTISING EFFECTIVENESS OF COLD-DRINKS IN BHOPAL” SUBMITTED FOR THE PARTIAL FULFILLMENT OF MASTER OF BUSINESS ADMINISTRATION SUBMITTED BY Under the Guidance Of: FROM MILLENNIUM INSTITUTE OF TECH. & SCIENCE BARKATULLAH UNIVERSITY, BHOPAL YEAR 2010Projectsformba.blogspot.com 2 3. Projectsformba.blogspot.com ACKNOWLEDGEMENTIt gives me immense pleasure to present this project report on entitled “STUDY OFADVERTISING EFFECTIVENESS OF COLD-DRINKS IN BHOPAL” in partialfulfillment of post-graduate
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A project report on advertising effectiveness of cold drinks — Document Transcript
1. Projectsformba.blogspot.com A PROJECT REPORT ON
“STUDY OF ADVERTISING EFFECTIVENESS OF COLD-
DRINKS IN BHOPAL” SUBMITTED FOR THE PARTIAL
FULFILLMENT OF MASTER OF BUSINESS
ADMINISTRATION SUBMITTED TO:GUIDED BY:
SUBMITTED BY: MILLENNIUM INSTITUTE OF TECH. &
SCIENCE BARKATULLAH UNIVERSITY, BHOPAL YEAR
2010Projectsformba.blogspot.com 1
2. Projectsformba.blogspot.com A PROJECT REPORT ON
“STUDY OF ADVERTISING EFFECTIVENESS OF COLD-
DRINKS IN BHOPAL” SUBMITTED FOR THE PARTIAL
FULFILLMENT OF MASTER OF BUSINESS
ADMINISTRATION SUBMITTED BY Under the Guidance Of:
__________________________________VII) Size of family :
__________________________________1). Do you take cold drink
? a. Yes b. No2). How frequently you take cold drink ? a. Once a day
b. Twice a day c. More than twice d. Not regular3). Which are the
different cold drinks available in the market ? a. Coca Cola b. Pepsi
c. Limca d. Fanta e. Thums-up f. Mirinda g. Limca h. Maaza i.
Canada Dry j. All of these4). Which cold drink you like most ? a.
Coca Cola b. Pepsi c. Limca d. Fanta e. Thums-up f. Mirinda g.
Limca h. Maaza i. Canada Dry j. All of these5). Which flavour of
cold drink you like most ?Projectsformba.blogspot.com 70
71. Projectsformba.blogspot.com a. Cola b. Lemon c. Mango d.
Orange e. Other6). Have you seen the advertisement of cold drink
you like most ? a. Yes b. No7). Through which media you have seen
it? a. T.V. b. News Paper c. Magazine d. Others8). How many types
of advertisement of you preferred brand of cold drink arethere? a. 1
b. 2 c. 3 d. 49). Which slogan of cold drink you like most ? a. Taste
the Thunder b. Yara Da Tashan c. Yeh Dil Mange More d. Jo chahe
ho Jai COCA-COLA enjoy10). Why do you like the advertisement ?
a. Because it has film stars ? b. Because of Good music c. It’s theme
and making is appealable. d. Any other reason.11). Do you think that
advertisement has forced you to consume product more ? a. Yes b.
No12). Which media is presenting the advertisement is necessary for
sale of colddrink ? a. T.V. b. News Paper c. Magazine d. Others13).
Do you think the advertisement is necessary for sale of cold drink ?
a. Necessary b. Very Necessary c. Not Necessary d. Can’t
SayProjectsformba.blogspot.com 71
72. Projectsformba.blogspot.com14). The expenditure incurred on
advertisement of cold drink is such effectivethat it adds to profit ? a.
Yes b. No c. Can’t Say15) Which reason you find for the difference
of advertisement effectiveness ? a. Education b. Likings c. Standard
of Living d. Level of Development16) Is the study of effectiveness
would contribute to improvement in presentadvertisement ? a. Yes b.
No c. Can’t Say17) Is advertisement effectiveness is necessary for
company ? a. Yes b. No c. Can’t Say18) What do you think the use
of study of effectiveness is for who? a. For Company b. For
Employees c. For Customers d. None of
theseProjectsformba.blogspot.com 72
2. Projectsformba.blogspot.com INTRODUCTION OF THE REPORTSTATEMENT OF PROJECT:The statement of our topic is“EFFECTS OF ADVERTISEMENT ON THE BUYING BEHAVIOUR OFFEMALES”So at the very beginning, we’ll define that what is the advertisement, its history, itsMedias and what are the reasons to advertise.WHAT IS ADVERTISEMENT?“PAID, MEDIATED PRESENTATION OF INFORMATION ABOUT SERVICES,PRODUCTS, OR IDEAS WITH THE SPECIFIC GOAL OF INFLUENCINGCONSUMERS OR THE PUBLIC”.THE ADVERTISER PURCHASES TIME (RADIO, TELEVISION, CABLE) ORSPACE (PRINT PUBLICATIONS—NEWSPAPERS, MAGAZINES, SHOPPER)—ORON BILLBOARDS OR OTHER DISPLAY OPPERTUNITIES SUCH AS BUSCARDS. “ADVERTISING IS EVERYWHERE…” • In our homes • In the supermarkets • On the streets • On airplanes • On trains • Even in schools, colleges and universities. “WHY ADVERTISEMENT IS THE GOAL OF INFLUENSING…” ADVERTISEMENT IS A PERSUASIVE MESSAGE • HERE’S why my product (or service or idea) is better than your alternatives… • If you buy my product (or service or idea) your life will be improved in this way…Projectsformba.blogspot.com 2
4. Projectsformba.blogspot.com HISTORY OF ADVERTISEMENT HERE IS A BRIEF HISTORY OF ADVERTISEMENT IN THE WORLD… Johannes Gutenberg 1441 Inventiuon of Movable Type Volney Palmer 1841 First Advertising Agency Robert Bonner 1850 First Great Advertising Campaign "Doctor" Drake 1860- Patent Medicine Lydia Pinkham 1890 Patent Medicine George Rowell 1869 American Newspaper Directory Francis W. Ayer 1875 Open Contract John Powers 1880 First Copywriting "Superstar" Adolphus Green 1890 Branding J. Walter Thompson 1885 The Account Executive Cyrus Curtis Growth of Magazine AdvertisingEarnest Elmo Caulkins 1895 Art Direction John E. Kennedy 1904 Reason-Why Copy Albert Lasker 1904 The Modern Advertising Agency Claude C. Hopkins 1906 "Scientific" Advertising Theodore McManus 1915 Impressionism Social Sciences in AdvertisingStanley & Helen Resor 1920 Women in Advertising Advertising Research Raymond Rubicam 1923 Creative Experimentation 1926 Commercial Radio Leo Burnett 1930- Inherent Drama 1947 Commercial Television Rosser Reeves 1950 Unique Selling Proposition David Ogilvy 1950 Brand Image Marion Harper 1950-60 Agency Mergers & Integrated Services William Bernbach 1960 Creative Revolution Jay Chiat 1990- Advertising in the 90sCreativity & Brand Building Hal Riney FIRST
ADVERTISING AGENCY IN PAKISTANProjectsformba.blogspot.com 4
5. Projectsformba.blogspot.com “Manhattan Pakistan”Head : Col. Aizaz ul WaheedAffiliation : NoneBrief Intro : We were one of the first Pakistani-owned ad agencies to enter Pakistan’s advertising arena and have remained one of the front- runners ever since. Today MPL ranks as one of the top agencies in terms of business volume and client portfolio. Serving the promotional needs of numerous clients both Above The Line (ATL) and through Below The Line (BTL) for the last four decades, Manhattan Pakistan has now entered in its fifth decade with the fervor to build brands through consumer insights by converting buyers into brand believers.History : We first saw the light of day in 1954, establishing our roots in Karachi, Pakistan. We operate with a strong family feeling, with 100 professionals steering the agency on a straight course towards success! We maintain the delicate balance between conceptualization, to product positioning and an effective performance in the marketplace. We have helped influence consumer preferences and changing lifestyles. We are Manhattan Pakistan!Founded : 1954Top : InstaphoneClients Askari Bank PTV Burraq Telecom PTCL NOTE: DETAILS OF TOP ADVERTISING AGENCIES IN PAKISTAN ARE ATTACHED AT THE END OF REPORT IN ANNEXURES. Projectsformba.blogspot.com 5
6. Projectsformba.blogspot.com MAJOR ADVERTISING MEDIASIN 1970’S FOLLOWING MASS MEDIAS BOCAME MATURE IN THE WHOLEWORLD…Projectsformba.blogspot.com 6
7. Projectsformba.blogspot.com • NEWS PAPERS (DOMINATE) • TELEVISION • DIRECT MAIL • RADIO • MAGAZINES • OTHERS (BILL BOARDS, TRADE PRESS ETC…) IN 1980’s, CABLE ADVERTISING GREW AND IN 1990’s, INTERNET ADVERTISING GREW. SPECIFIC MEDIA WITHIN EACH GENERAL MEDIA TYPETelevision Yellow PagesNewspaper Magazine Major Kinds of MediaDirect Mail Outdoor Radio Internet MAJOR ADVERTISING MEDIAS IN PAKISTAN IN THE BOUNDARIES OF PAKISTAN, FOLLOWING MEDIAS ARE WORKING: Projectsformba.blogspot.com 7
8. Projectsformba.blogspot.com o TV o Radio o Media Buying Houses o Media Representatives o Media Monitoring Agencies o Media Marketing Firms o New Media Companies o Internet Service Providers o Major English Dailies o Major Urdu Dailies o English Eveningers o Urdu Eveningers o English Magazines o Urdu MagazinesProjectsformba.blogspot.com 8
9. Projectsformba.blogspot.com TYPES OF ADVERTISEMENT:Product Advertising: In which manufacturers wants to focus on productsProjectsformba.blogspot.com 9
10. Projectsformba.blogspot.com For example: Head & shoulders shampoo.Institutional Advertising When focus on brand name of the company For example: McDonald, KFC.Informative Advertising The purpose of the companies to give some sort of information For example Telenor informed earlier to its launching of networkPersuasive Advertising When any company launches a new product For example When warid telecom introduces any new packageReminder Advertising Telling the consumer that there is also additional attributes in our product For example When Pepsi introduces additional taste in bottles as Pepsi twistComparative Advertising When we compare any two products For example Supreme vs. LiptonProjectsformba.blogspot.com 10
11. Projectsformba.blogspot.comCelebrity Testimonial When companies cast a celebrity in its advertisement For example Ali zafar, reema, meera and amna huq in LUX ADD now daysRetail Advertising When shop keepers advertise their shops or malls For example PaceInteractive Advertising Contact through the telephonic conversation to sell the product. For example It happens basically in business to business advertisement like when pharmaceutical companies advertise their new medicines to the doctors.Advertising a Service Instead Of A Product Advertising services is one of the most difficult type of advertising. You dont have a tangible product you can put in someones hand. They cant touch it, feel it, see it or smell it. For example Advertisement for new admission opens in university.Projectsformba.blogspot.com 11
12. Projectsformba.blogspot.com REASONS TO ADVERTISEAdvertising is such an important thing for a business to do, advertising is not justimportant for businesses but for things that offer services. Advertising tells people aboutyour product or products so they can be sold. Big companies such as McDonalds andColgate Palmolive dont need to advertise because their products are already knownthroughout the world, but when these two first came out they would have had to havespent millions of pounds on advertising to get them to the stage where they are now.The following may be the maximum reasons to advertise…Projectsformba.blogspot.com 12
13. Projectsformba.blogspot.com • Produce leads • Educate prospects about the benefits you offer • Expand into new markets • Influence the people who influence others (the trendsetters) • Make your name known to people who have never heard of you • Pre-sell
your offering (prior to the sales persons call) • Expand upon a public relations story • Tell the story of your company • Add authority to your message (by putting it into print, people equate advertising with success) • Build your corporate identity • Build confidence in your product/services • Dispel an ugly rumor • Keep your name in the forefront of your customers minds • Head off competitors • Go after competitors business • Prove your quality with success stories • Make your stockholders happy • Assert your leadership • Maintain a constant public presence • Help your direct mail pay off • Announce the existence of your product • Gain credibility • Become a brand name • Establish a niche • Highlight testimonials from satisfied customers • Test something • Create a desire to buy • Make sales • Obtain names for your prospect or customer mailing list • Inform many people at the same time • Motivate people to call or e-mail or send coupon • Engage in research by studying the profiles of respondents • Prove your superiority • ... to earn a profitProjectsformba.blogspot.com 13
14. Projectsformba.blogspot.com PROS AND CONS OF ADVERTISEMENTSAdvertising - Good or Bad?"Advertising - Good or Bad" In todays society, one must consider – Is there any advantage ofadvertising? In many cases it is only disadvantageProjectsformba.blogspot.com 14
15. Projectsformba.blogspot.com- An annoying hindrance in our daily lives. It gets on our nerves, distorts thetruth, and adds to the cost of the product. Advertising is designed for onepurpose - to sell. To achieve this goal, advertises are willing to stretch anddistort the truth, just to convincing people to buy their product. Forexample, an advertiser may convince buyers to purchase their product bystating that has been tested and found superior. In reality, the product is notlikely to be better than any other - the tests themselves doubtlesslyconducted by the promoting company - conducted to ensure at leastsomething is superior about the product, even if it is only the color. Theseadvertisements are worded carefully so that they are telling the "literal truth"- the truth is exactly what the words say, although people misinterprets themessage by using conversational logic as something different - somethingbetter. By using ingenious tactics like these, the populace is deceived intobuying a product that may not do what is required, or a product which abuyer may have never really needed. This is why advertising is a bad thing,for our society.FOLLOWING ARE THE BASIC ADVANTAGES ANDDISADVANTAGES OF ADVERTISMENT. Advantages DisadvantagesProjectsformba.blogspot.com 15
Self-service operations ability to possible provide detailed informationPURPOSE OF
RESEARCH:Projectsformba.blogspot.com 16 Some media limit the Editorial content throwaway rate surrounds ad Some media have high Message study possible Some media require long content; lead message can be standardized time Control over message Geographic flexibility available limited Many alternatives Low cost per contact investments Some media require large Gains pass along lack readership flexibility (for print) Standardized messages Attracts a large audience 16. Projectsformba.blogspot.com
17. Projectsformba.blogspot.comEFFECT OF ADVERTISEMENT ON THE BUYING BEHAVIOR OF FEMALES:As our basic research process is concerned with the effects of advertisementson the buying behavior of females so on this regards we’ll conduct a fullresearch process to evaluate that how much the advertisement affects thebuying behavior of females.As it is a very known saying that “Customer is the king of the market”Now here we believe that females are the queens of the market.As large areas of markets are occupied by the females so their buyingbehavior means a lot for the manufacturers. They must be very careful intheir marketing strategies and should consider the females attitude towardsconsumption of their product.Now here our basic purpose of research is to come to the result that what arethe basic things regarding to products that largely affect the buying behaviorof females and how much advertising influence their buying. When we’ll getour findings then we’ll give very fruitful suggestions to the marketingdepartments of the organizations that how they can increase their saleamongst the females.Projectsformba.blogspot.com 17
18. Projectsformba.blogspot.comRESEARCH PROCESSNow coming towards the basic topic, we’ll start from here the major portion of our reportwhich is the research process through which we’ll conclude what we find and what arethe recommendations for the marketing departments of the organizations.Projectsformba.blogspot.com 18
19. Projectsformba.blogspot.comTYPE OF RESEARCH:As our research is for all the organizations so we can say that our research type is BASICor PURE RESEARCH, which is on a general topic.Projectsformba.blogspot.com 19
20. Projectsformba.blogspot.com OBSERVATION:“Observation means to see or feel what certain changes are occurring or new behaviors, attitudes and feelings are surfacing”. It is the stage when problem is not defined yet.There are four types of observation such as:Projectsformba.blogspot.com 20
21. Projectsformba.blogspot.com 1) Currently existing problem 2) Situation requiring improvements 3) Theoretical or conceptual problem 4) Problem requiring empirical answersHere in our project, the problem can beSITUATION REQUIRING IMPROVEMENT…Because we are going to conduct the whole research process on the buying behavior offemales, so situation is satisfactory as females buy more and more with the passage oftime. We just want to reach at those results which tell us that which things influence thefemales buying. Is it advertisement, quality, appearance or any other thing…?So our basic research is on a situation in which we observe the buying behavior offemales having different taste, different preferences, and living in different cities ofPakistan and are of different ages.Projectsformba.blogspot.com 21
22. Projectsformba.blogspot.com PRELIMINARY DATA COLLECTION: “It means to seek information in order to know more about what we observed”Here we are working on a broader term that which factors influence the females buyingbehavior so we have to collect data from different tools to confirm our observation thatwhich things actually influence the female buying and how much advertisement play rolein their buying behavior.Projectsformba.blogspot.com 22
Unstructured interviews STRUCTURED INTERVIEWS:“In structured interviews the interviewer asks those questions which are pre planned. All the questions are well prepared and the interviewer can easily ask the questions in a series from an appropriate Respondent. It is also called formal interview”. UNSTRUCTURED INTERVIEW: “In unstructured interviews normally the interviewer asks the questions without any predetermined sequence. The question which comes first in the mind of the interviewer will be asked first. It is also called informal interview.”For the purpose of collecting the preliminary data about our observation, we conductedsome unstructured interviews from following 2 SECTORS… A. EDUCATIONAL SECTOR B. ADVERTISING AGENCY EDUCATIONAL SECTOR: FROM EDUCATIONAL SECTOR WE SELECTED THE FEMALE MEMBERS OF FOLLOWING INSTITUTIONS…Projectsformba.blogspot.com 23 Structured interviews 23. Projectsformba.blogspot.comPrimary Data can be collected by the following two ways;1- Interviews2- Literature Survey 1. INTERVIEWS: Interviews are conducted for the following reasons… • To bring preliminary issues to the surface so that researcher can determine about variables of interest. • To understand the scenario of situation. • To explore the variables in the situation.INTERVIWS MAY BE OF TWO TYPES:
24. Projectsformba.blogspot.com 1. THE WELL KNOWNED FEMALE TEACHERS OF UNIVERSITY OF THE LAHORE 2. THE TEACHERS OF AN INSTITUTION, PAK AIMS IN LAHORE 3. THE FEMALE TEACHERS OF D & E ACADEMY GUJRANWALA. 4. FROM THE FEMALE STUDENTS OF UNIVERSITY OF THE LAHORE, PAK AIMS AND D & E ACADEMY.According to the structured and unstructured interviews which we have conducted to theabove females, we collected the following information about our situation problem… • Females mostly prefer the quality of the product • Advertisement effects their buying but the routine products which they use to buy from many years, from them they don’t see that for which product advertisement is good. they just buy that product as routine E.g. Max bar, head & shoulders shampoo… • Females are more attractive towards products like cosmetics, clothing, shoes… Especially working women • Advertisement is also the biggest cause to influence the buying behavior of females but advertisements should be approved by the marketing departments of companies. ADVERTISING AGENCYProjectsformba.blogspot.com 24
25. Projectsformba.blogspot.com2. LITERATURE SURVEYS:It is also a part of Primary Data Collection. The purpose of literature review is to ensurethat no variable is ignored that has been consider important in the past.Literature Survey can be defined in the following manner;Projectsformba.blogspot.com 25
26. Projectsformba.blogspot.com “Documentation of comprehensive review of published and unpublished work from secondary sources of data in area of interest”As far as our topic is concerned, we selected the following literatures from internet forthe purpose of preliminary data collection… 1) AAEC 3100 Food and Fiber Marketing Dr. Steven C. Turner Chapter 6 Analyzing Consumer Markets & Psychological 2) From the study of an article published in the site… www.csustan.edu/market/petrosky/Old3410/34Lect5CB/tsld0...In this article we found the following things according to consumer buying behavior…Characteristics Affecting Consumer Behavior Buyer Psychological Personal Social CultureProjectsformba.blogspot.com 26 Personal Social Cultural Buying BehaviorIn which we found the following data thatMajor Factors which Influence the Consumer Behavior can be…
27. Projectsformba.blogspot.comFactors Affecting Consumer Behavior: Culture • Social Class • People within a social class tend to exhibit similar buying behavior. • Occupation • SOURCE of Income • Education • WealthMost basic cause of a persons wants and behavior • Values • Perceptions • Subculture • Groups of people
with shared value systems based on common life experiences. • Mature ConsumersFactors Affecting Consumer Behavior: Social • Reference Group influence: • Membership Groups: • Primary and Secondary • Non-membership groups: • Aspiration and Dissociative • More important with publicly consumed products • Family influences: • Stage of the family lifecycle • Buying Roles in the family Factors Affecting Consumer Behavior: Psychological • Psychological • Factors • Motivation • Perception • LearningProjectsformba.blogspot.com 27
28. Projectsformba.blogspot.com • Beliefs and • AttitudesSo according to these literature surveys and from the interviews, we confirm ourobservation that there are some specific things which highly influence theconsumer’s buying behavior, especially of female customers.Projectsformba.blogspot.com 28
29. Projectsformba.blogspot.com PROBLEM DEFINITIONAfter the preliminary data collection, we can now develop a statement to explain thebasic problem.Any gap between desired situation and actual situation is called Problem and briefstatement that explains any thing is called Definition. So, Problem Definition means:“A statement that explains what the real problem is, what types of factors are involved in this problem and finally what are consequences of a problem.”Projectsformba.blogspot.com 29
30. Projectsformba.blogspot.comAfter going through interviews and literature review we check the following essentialelements of Problem Definition: 1) Antecedents(Contributing Factors) 2) Real Problem(What is Wrong) 3) Consequences(Results)The problem definition of our project can be explained with the help of followingdiagram: (Real situation) (Consequences) EFFECTS ON BUYING BEHAVIOUR OF PRICE AND QUALITY ORIENTED FEMALES ECONOMY 1- PRICE 2- QUALITY 3- ADVERTISEMENT (Antecedents) 4- IMPORTED PRODUCTS 5- PURCHASING POWER 6- STATUSANTECEDENTS: Antecedents are the contributing factors which are responsible for the real problem. In our project antecedents are1- PRICE2- QUALITY3- ADVERTISEMENT4- IMPORTED PRODUCTS5- PURCHASING POWER6- STATUSProjectsformba.blogspot.com 30
31. Projectsformba.blogspot.comThese are the antecedents because these are the basic reasons behind the buying behaviorof females. These above antecedents effects directly or indirectly to the buying behaviorof females.REAL PROBLEM: “As we know that well defined problem is half solved and symptoms are not the real problems.”Real problem is that situation which results from the
antecedents or contributing factors.So in our project real situation which is created from the contributing factors is:“How the buying behavior of females is influencing? Which factors influence it and is theadvertisement a basic factor”?CONSEQUENCES: “Consequences are the results of real problem”In our project consequence is “The economy will be price and quality oriented”this consequence is the result of the preliminary data collection as when we conductinterviews, mostly females think that they prefer the quality from all other factors.Projectsformba.blogspot.com 31
32. Projectsformba.blogspot.com THEORETICAL FRAMEWORK “It is a logical developed, described & elaborated network of associations among variables that have been identified through interviews, observation & literature survey”Variables: Projectsformba.blogspot.com 32
Imported products Now in the research process we’ll see that which are the basic most important factors which mostly influence the buying behavior of females. 3. Moderating Variable “The variable which has strong contingent effect on the relationship of dependent Substitutes Purchasing power Advertisement Quality Price Extraneous variable1. Dependent variable “Any variable that will depend on others for its values”In our project, our dependent variable is“BUYING BEHAVIOR OF FEMALES”Now we’ll explain the effect of other factors on this dependent variable in detail in ourwhole project.2. Independent Variables: It is the variable on which the dependant variable depends upon for its value “The major causes of a problem are called independent variables.” In our project, our independent variables are: Intervening variable Moderating variable Independent variable Dependent variable 33. Projectsformba.blogspot.com The identification of key variables is very important in every research study.It can be defined as: “A variable is anything that takes different values.” Types of Variables: & independent variable” It is also called second independent variable. Projectsformba.blogspot.com 33
Sales taxAs sales tax has little effect on the buying behavior so it can be easily ignoredHere we show the relationship of different types of variables diagrammaticallyProjectsformba.blogspot.com 34 Willingness to buyThe effect of these variables can only be felt but we can not measure them quantitatively.These variables contribute an important role on the creation of the problem.5. Extraneous Variables: “There are infinite numbers of factors which may have impact on the situation but we will ignore these factors by assuming them as constant are called extraneous variables.” In our project extraneous variable is as follows Status consciousness Above is the moderating variable because it has a strong contingent
effect on therelationship of dependent variables and independent variables. As if marketingdepartments make the good strategies to attract the customers then they can increase theirsale volume.4. Intervening Variables“There are some factors which have effect on the situation but we can not measure them quantitatively, we can just feel their effect.”These variables will be created automatically by the working of independent variables.In our project intervening variables are as follows: Role of marketing departments of the companies 34. Projectsformba.blogspot.comIn our project, our moderating variables are:
35. Projectsformba.blogspot.com (Dependant Variable) (Intervening Variables) (Independent Variables) Imported products Substitutes Purchasing power Advertisement Quality Price -Status consciousneBuying behavior of ss females -willingness (Moderating Variables) (Extraneous Variables) Role of the Sales tax marketing departmen ts of companies. . Projectsformba.blogspot.com 35
RELATIONAL This can be further classified as… o Co relational hypothesis o Casual hypothesis.Co relational Hypothesis:“When a statement will create relationship among more than two factors or when causes of a problem are more than one, the hypothesis about such a problem will be called as co relational hypothesis.” OR “When there is only one problem and there are a lot of factors or variables which Increase the problem is also called Co relational Hypothesis”.In our study there is the situation of buying behavior of females and there are manyindependent variables which influence the buying behavior of females. Now we will checkthe relationship amongst those variables by creating the Hypothesis and applying certainStatistical tools which will tell us that which factor is strongly in connection with thebuying behavior of females.Projectsformba.blogspot.com 37 DESCRIPTIVE 37. Projectsformba.blogspot.com HYPOTHESIS DEVELOPMENT “A hypothesis is a logically conjectured relationship between two or more variables expressed in the form of a testable statement.” OR “A statement whose validity will be confirm in future by applying different statistical tools”So, in hypothesis we confirmed the validity of any statement after the experiments or datacollection.KINDS OF HYPOTHESIS:
38. Projectsformba.blogspot.comSo the following is the creation of Hypothesis of different factors that affect the buyingbehavior of females…Female preferences:Hο: females do not prefer quality of the product while buyingH1: females prefer quality of the products while buying.Influence of advertisements:Hο: Advertisement has no
influence on the buying behavior of femalesH1: advertisement has influence on the buying behavior of females.Status consciousnessHο: females do not prefer status/self image while buying.H1: females prefer status/ self image while buying.Negative effects of advertisements:Hο: there is not any negative effect of advertisement on the buying behavior of femalesH1: there is any negative effect on the buying behavior of females.Advertisements of substitutes:Hο: advertisements of the substitutes do not affect the popularity of the product.H1: advertisements of the substitutes affect the popularity of the product.Imported goods:Hο: imported good are not more attractive for femalesH1: imported goods are more attractive for females.Satisfaction level:Hο: good advertisements are not the basic cause of satisfaction of females towards consumption of goods.H1: good advertisements are the basic cause of satisfaction of females towards consumption of goods.Advertised products:Hο: females do not prefer the advertised products on necessities of lifeH1: females prefer the advertised products on the necessities of life.Product success or failure:Hο: advertisements can not become the cause of any product success or failure.H1: advertisements can become the cause of product failure or success.Demand of the product:Hο: advertisements cannot create the demand of any product.H1: advertisements can create the demand of any product.Projectsformba.blogspot.com 38
40. Projectsformba.blogspot.com RESEARCH DESIGN:It is a major and pivotal step of business research. The step involves the overall schemeabout data collection.“Research design is a plan and structure of investigation to obtain answer to researchquestion. It is overall scheme and program of research which includes an outline of whatthe researcher will do from developing hypothesis and to the final analysis of data”. Research design constitutes the blue print for collection, measurement and analysis ofdata. R.D is plan and structure of investigation to obtain answer to research questions.PURPOSEOF TYPE OFSTUDY INVESTI RESEAR GATION CHER INTERFE RENCE STUDY SETTING UNIT OF ANALYSI S TIME HORIZO N SAMPLIN G DATA COLLEC MEASURE TION MENT OF METHOD MEASURE S S Projectsformba.blogspot.com 40
41. Projectsformba.blogspot.com PURPOSE OF STUDY: In the purpose of study, researcher defines the purpose behind the research. These may be 4 types of purposes: 1. exploration 2. description 3. hypothesis 4. case study Here in our research process, our purpose of study is to evaluate that WHAT affects the female’s buying behavior, WHICH are the factors, which influence the buying
behavior of females, HOW advertisements affect the buying behavior of females. So we can say that as we are explaining an existing situation so our purpose of study is Description.” Objective of descriptive study is to learn the who, how, what, when, where of a topic. TYPES OF INVESTIGATIONS: Investigation is conducted to complete the research process efficiently. Investigations may be of two types: 1. casual investigation 2. co relational investigation CO RELATIONAL INVESTIGATION: The investigation which is conducted to explain the effect of different variables on the situation is called co relational investigation.In simple words, we can say that when there are more than one reasons of a problem it iscalled co relational investigation.In our research process,Our type of investigation is “Non Casual” because there is more than one reason whichinfluences the buying behavior of females. Projectsformba.blogspot.com 41
42. Projectsformba.blogspot.comRESEARCHER INTERFERENCE:In researcher interference we see that which type of study is going to be conduct by ourgroup. Either it is 1. co relational study, in which minimum involvement of researcher is required because it is based on findings of others, or 2. Casual study, in which researcher involvement is more. As we are conducting research through the findings of others so our involvement is minimum in the findings of research. STUDY SETTING: It means in which type of environment we’ve conducted our research process. The study setting may be of 2 types: a. Contrived This can be further classified as o Lab experiment. b. non-contrived This can also be further classified as o Field study. o Field experiment. Non-contrived: “When the research is conducted in natural or normal environment, it will be called non contrived study.” Normally, this type of study is conducted inside the organization. Field Study: “When the researcher has to co related the factors then investigation out side the organization is called as Field Study.” So, the type of our study setting is non-contrived and during our research we also conducted Field Study. Projectsformba.blogspot.com 42
Non Probability Sampling Projectsformba.blogspot.com 43 Probability Sampling OrganizationsIt depends upon the nature of problem that is being investigated. In our research process, we’ve gathered the data from INDIVIDUALS in the form of questionnaires and from ORGANIZATIONS in the form of interviews. TIME HORIZON: In which we mention that how much time we’ve used in data collection. Time horizon has two types 1. cross-sectional 2. longitudinal Longitudinal study: “As In Longitudinal method the whole data is collected again and again with out any time interval.” So in our research time horizon is Longitudinal. SAMPLING: The process of using a small number of items or parts of a large
population to make conclusions about the whole population The basic purpose of sampling is; To obtain maximum information about the characteristics of population with in less time, cost and effort There are two types or styles of Sampling. That is Groups Dyads Individuals 43. Projectsformba.blogspot.com UNIT OF ANALYSIS:It is aggregation of data during subsequent analysis. Data can be gathered form:
44. Projectsformba.blogspot.comWHERE PROBABILITY SAMPLING CONTAINS: 1. Complex random sampling This further can be classify as o Systematic Sampling o Stratified Sampling o Cluster Sampling o Area Sampling o Double Sampling 2. simple random samplingAND NON PROBABILITY SAMPLING CAN BE CLASSIFIED AS: 1. Convenient sampling 2. purposive sampling o judgment approach o quota approachhere in our research process, we’ve done the complex random sampling under the head of probabilitysampling in which we’ve used the CLUSTER SAMPLING APPROACH in which sample is chosen onthe basis of intra- group heterogeneity and inter-group homogeneity.As we are comparing here the females with females so our sampling criteria is inter-group homogeneity.Projectsformba.blogspot.com 44
45. Projectsformba.blogspot.comDATA COLLECTION METHODS:There are two types of data collection methods. 1. primary data collection • structured interviews • unstructured interviews 2. secondary data collection • questionnairesStructured Interview: “Structured Interviews are conducted when it is known at the outsetwhat information is needed. The interviewer has a list of pre-determined questions to beasked of the respondents either personally, through the telephone, or by sending the mainthrough electronic mail.”Un-Structured Interview: “In case of unstructured interview, the interviewer asks thequestions without any pre-determined sequence. Those questions are asked first whichcome in the mind of the interviewer first.”So we conducted Structured Interviews with the employees of different selectedorganizations. And our method of collecting Primary Data is through StructuredInterviews and Un-structured Interviews which we have already discussed in preliminarydata collection methods.Unobtrusive measures: “It means to trace the measures from a primary source that doesnot involve people.”In the primary data collection, we also use this technique by just observing the buyingbehavior of females of our homes and near our homes.Projectsformba.blogspot.com 45
46. Projectsformba.blogspot.comQuestionnaire: “A questionnaire is a reformulated written set of questions to whichrespondents record their answers, usually within rather closely defined alternatives.”Questionnaires are an efficient data collection
mechanism when the researcher knows exactlywhat is required and how to measure the variables of interest.Questionnaire can be administered personally, mailed to respondents, or electronicallydistributed.During our research process we made close ended questionnaires, and these arepersonally administered.MEASUREMENT OF MEASURES: “Measurement of measures is a key step in research design; it means to measure theinformation collected from different respondents by different ways by using differentmethods of data collection, to check the accuracies and reliability of data or informationcollected. It is also called the MOM of research.”Scale: “Scale is a tool by which the individual units are distinguished on the basis ofvariable of interest in some meaningful way.”We can say that scales will categories the things into different groups.Types of Scales a) Nominal Scale b) Ordinal Scale c) Interval Scale d) Ratio ScaleAPPROACHES OF SCALING: a) Dictorious scaling. b) Category scaling. c) Likert scaling.Projectsformba.blogspot.com 46
47. Projectsformba.blogspot.com d) Semantic scaling. e) Numerical scaling. f) Ranking scaling. g) Fixed scaling. h) Psychological scaling i) Graphic scalingIn our Central EditingFIELD EDITING:According to this approach, researcher makes the corrections at the time of gettinginformation from the respondents.So in our research process, we used this approach at each and every step due to which ourdata is correct and having no mistake or blanks in it.Now we can analyze it through different techniques.Projectsformba.blogspot.com 47 Field editing designing of questionnaire, we have used the following approaches in questions,Dictorious scalingCategory scalingSemantic scalingRanking scalingGraphical scaling (in every question)DATA PREPERATION FOR ANALYSIS:Before analyzing the data, we’ve edit our data due to the reason that there should be notany mistake in data which can cause the error in the data analysis.Types of Editing
49. Projectsformba.blogspot.com DATA ANALYSISFor the purpose of analyze the validity and reliability of data, certain statistical toolsAveragesCorrelationPercentage etc are applied. Here for the confirmation of our research we will use thepercentage technique in which mea of the data is also calculated.NOW WE’LL ANALYZE ALL THE FACTORS INVOLVED IN ALL QUESTIONSOF OUR QUESTIONNAIR TO COME AT THE CONCLUSION THAT WHAT ARETHE BASIC FACTORS WHICH INFLUENCE THE FEMALE BUYING BEHAVIORAND HOW MUCH ADVERTISING PLAYS THE ROLE IN IT:We’ll analyze here each and every question one by one, keep in mind that
thisquestionnaire was only for females.Projectsformba.blogspot.com 49
50. Projectsformba.blogspot.comQ#1: What is your preference while buying?Frequency TableYour preference while buying Frequency Percent Valid Percent Cumulative Percent Valid price 33 11.0 11.0 11.0 quality 134 44.7 44.7 55.7 appearance 24 8.0 8.0 63.7 local or 22 7.3 7.3 71.0 imported all of the 87 29.0 29.0 100.0 above Total 300 100.0 100.0GRAPHICAL REPRESENTATION: price all of the above local or imported quality appearanceProjectsformba.blogspot.com 50
51. Projectsformba.blogspot.comIN THE NUT SHELL: In this question we want to evaluate that which factors basicallyinfluence the female buying. We filled the 300 questionnaires from 300 femalesof different ages and from different areas. When we took the frequency of ourresults provided by females, we come to the result that the main basic factorwhich hardly influences the female buying is PRODUCT QUALITY. Manyfemales have also selected the price and appearance and imported products, butaccording to the results it is approved that they give more preference to thequality of any product.At the second place, mostly females also selected the last option which is ALLOF THE ABOVE, which means now days females do shopping according to aplanning. They buy each and every thing with full concentration and do notcompromise with any thing while buying.So at the result, we can say that females give first priority while buying to thequality and then to the other influencing factors. HENCE THE RESULTQ#2: Do advertisements influence your buying?Projectsformba.blogspot.com 51
52. Projectsformba.blogspot.comFrequency TableDo adver influence buying Frequency Percent Valid Cumulative Percent Percent Valid yes 193 64.3 64.3 64.3 no 58 19.3 19.3 83.7 I don’t 49 16.3 16.3 100.0 know Total 300 100.0 100.0GRAPHICAL REPRESENTATION: 300 200 100 Count 0 yes no i dont know do adver influence buyingIN THE NUT SHELL:Projectsformba.blogspot.com 52
53. Projectsformba.blogspot.comWe structured the above question according to the basic requirement of ourresearch topic which is EFFECT OF ADVERTISEMENT ON THE BUYINGBEHAVIOUR OF FEMALES.So according to the above findings, we can see that 193 females are agreedupon the fact that their buying influenced with the advertisements. Whichmeans advertisement is also a basic factor of influencing females buyingbehavior.Secondly 58 females said that advertisement do not influence their buying. Thismay be due to the fact that Pakistan is a poor country and females can’t bear
toomuch expensive things so they always cant follow the advertisements whilebuying the necessities of life.And the last portion of females, which is 49…they said that they don’t have anyidea about it which means they do shopping according to the routine matters.They don’t prefer which things are newly emerging in advertising Medias. HENCE THE RESULTQ#3: While buying, you are more conscious towards:Projectsformba.blogspot.com 53
54. Projectsformba.blogspot.comFrequency TableConscious towards Frequency Percent Valid Cumulativ Percent e Percent Valid advertise 33 11.0 11.0 11.0 ment status 51 17.0 17.0 28.0 price, 141 47.0 47.0 75.0 quality all of the 75 25.0 25.0 100.0 above 300 Total 100.0 100.0GRAPHICAL REPRESENTATION: advertisement all of the above status price, qualityIN THE NUT SHELL:Projectsformba.blogspot.com 54
55. Projectsformba.blogspot.comAbove question was administered by our group by keeping in mind the femalepsyche that when they go to the market to buy something, they are moreconscious towards which things. So according to the results we also got thesame answers as we got in question one because mostly females said that theyprefer quality and price factor while buying. They do not compromise with thequality of the product. Others are the secondary things.Here we can observe that status also influence the buying behavior because inour country females often consider the status while buying. HENCE THE RESULTQ#4: Do you prefer status/self image during buying?Frequency TableProjectsformba.blogspot.com 55
56. Projectsformba.blogspot.comStatus preferences Frequenc Percent Valid Cumulati y Percent ve Percent Valid i think so 154 51.3 51.3 51.3 i dont 44 14.7 14.7 66.0 think so seldom 64 21.3 21.3 87.3 think so i dont 38 12.7 12.7 100.0 know Total 300 100.0 100.0GRAPHICAL REPRESENTATION 180 160 140 120 100 80 60 40 Count 20 i think so i dont think so seldom think so i dont know status preferencesIN THE NUT SHELL:Projectsformba.blogspot.com 56
57. Projectsformba.blogspot.comHere we can see that how status effects the female buying behavior. Here in ourcountry females are very conscious for their self image so we can see that in theresults 144 females agree that they consider the self image while buying.Secondly females said that they seldom think that they consider the status whilebuying because they also consider the price and quality of the products as wellbecause they are also very important.At the last some females said that they are not status conscious and some saidthat they don’t know that either they
consider the self image while buying ornot. These may be those females which only prefer to buy basic necessities lifeand belongs to middle or lower middle families. HENCE THE RESULTQ#5: Which type of advertisement is more attractive for you?Projectsformba.blogspot.com 57
58. Projectsformba.blogspot.comFrequency TableType of advertisement Frequency Percent Valid Cumulative Percent Percent Valid product 165 55.0 55.0 55.0 institutional 51 17.0 17.0 72.0 celebrity 84 28.0 28.0 100.0 Total 300 100.0 100.0GRAPHICAL REPRESENTATION: celebrity product institutionalIN THE NUT SHELL:Projectsformba.blogspot.com 58
59. Projectsformba.blogspot.comHere we’ll se that which advertisement type is more attractive for females. Thisquestion was made for the purpose to suggest the companies that females preferwhich types of advertisements.Here we can see that product advertisement is at the top of the list. Females aremore familiar towards product advertisements instead of other types.Secondary celebrity advertisements are also very famous amongst the femalesbut there should be improvements in this type for becoming more successful. HENCE THE RESULTQ#6: Is there any negative effect of advertisement on your buying behavior?Frequency TableProjectsformba.blogspot.com 59
60. Projectsformba.blogspot.comNegative effect of advert Frequency Percent Valid Cumulative Percent Percent Valid yes 59 19.7 19.7 19.7 no 66 22.0 22.0 41.7 sometimes 147 49.0 49.0 90.7 never 28 9.3 9.3 100.0 Total 300 100.0 100.0GRAPHICAL REPRESENTATION: 160 140 120 100 80 60 40 20 Count 0 yes no sometimes never negative effect of advertProjectsformba.blogspot.com 60
61. Projectsformba.blogspot.comIN THE NUT SHELL:Now we’ll see that we know that advertisements have influencing effects on thebuying behavior of females but is advertisement has negative effects as well ornot.For this purpose we illustrated the above questionnaire and took feedback fromfemales. From that feedback we came to know that mostly females think thatsometimes advertisement effects negatively. These negative effects may be ofany type.On the second and third place we can see that ratio is almost same, somefemales think that there are definitely bad effects of advertisement and somethink that there is no any negative effects of advertisements. And some said thatthere can never be any bad effects of advertisements. Advertisements aresuccessful always. HENCE THE RESULTQ#7: Negative effects of advertisement may be of which type?Frequency TableProjectsformba.blogspot.com 61
62. Projectsformba.blogspot.comNegative effects may b Frequency Percent Valid Cumulative Percent Percent Valid You often 109 36.3 36.3 36.3 neglects the price while purchasing Too much 39 13.0 13.0 49.3 prefer the celebrity advertisement Prefer only 73 24.3 24.3 73.7 appearance and reputation of company, not quality others 79 26.3 26.3 100.0 Total 300 100.0 100.0GRAPHICAL REPRESENTATION: others You of ten neglects Pref er only appearan Too much pref er theIN THE NUT SHELL:Projectsformba.blogspot.com 62
63. Projectsformba.blogspot.comIn the above question we give some options regarding to negative effects ofadvertisements. That if there is any negative effect of advertisement then thatshould be what. So according to our research, we can say that females think thatwhen new advertisement come then they often neglect the price of the productand purchase that advertised product. They don’t think that how much theproduct is expensive; they just go through to buy that product due to veryattractive advertisement.Also a group of females said that they think that they often see the goodappearance of the product and purchase that, they don’t consider the qualitymuch at that time.And also a large number of females said there are also other negative effects ofadvertisements that appear according to the conditions. HENCE THE RESULTQ#8: Effectiveness and attractiveness of advertisement depends uponFrequency TableProjectsformba.blogspot.com 63
64. Projectsformba.blogspot.comAttraction towards Frequency Percent Valid Cumulative Percent Percent Valid slogan 54 18.0 18.0 18.0 trade mark 25 8.3 8.3 26.3 company 64 21.3 21.3 47.7 repute appearance 39 13.0 13.0 60.7 all of the 118 39.3 39.3 100.0 above Total 300 100.0 100.0GRAPHICAL REPRESENTATION: 140 120 100 80 60 40 20 Count 0 slogan company repute all of the above trade mark appearance attraction towardsProjectsformba.blogspot.com 64
65. Projectsformba.blogspot.comIN THE NUT SHELL:We make this question for the marketing departments of the companies tosuggest them that which things according to the females become anadvertisement attractive and effective. That’s things may be of followings:SloganTrade markCompany reputeAnd appearanceBut the females said that all of the above options can combinely make anadvertisement effective and attractive for females.If the companies give attention to all of the above things then they can attractthe females toward their products through advertisement. HENCE THE RESULTQ#9: How the advertisements of substitutes affect the popularity of any productFrequency TableProjectsformba.blogspot.com 65
66. Projectsformba.blogspot.comAdvertisement of substitute Frequency Percent Valid Cumulative Percent Percent Valid Demand of the 121 40.3 40.3 40.3 product reduces You neglect 67 22.3 22.3 62.7 the product due to new advertisement of substitute it doesn’t 112 37.3 37.3 100.0 effect Total 300 100.0 100.0GRAPHICAL REPRESENTATION: it dosnt effect Demand of the produc You neglect the proProjectsformba.blogspot.com 66
67. Projectsformba.blogspot.comIN THE NUT SHELL:Here is a question to check that if a new advertisement of the substitute of anyexisting product come then is that affects the popularity and sale volume of theexisting product.So according to the feedback we can see that 121 females said that demand ofthe existing product decreases due the advertisement of the new product and112 females said that it doesn’t effect the popularity of the product whichmeans here is a controversy amongst the different group of females, whichmeans that females perceive the new advertisements differently according totheir mood and situations. HENCE THE RESULTQ#10: Which advertisement media is more attractive for you?Frequency TableProjectsformba.blogspot.com 67
68. Projectsformba.blogspot.comAdvertisement media Frequency Percent Valid Cumulative Percent Percent Valid electronic 187 62.3 62.3 62.3 news paper 21 7.0 7.0 69.3 fashion 52 17.3 17.3 86.7 magazines bill boards 34 11.3 11.3 98.0 others 6 2.0 2.0 100.0 Total 300 100.0 100.0GRAPHICAL REPRESENTATION: 200 100 Count 0 electronic fashion magazines others new s paper bill boards advertisement mediaProjectsformba.blogspot.com 68
69. Projectsformba.blogspot.comIN THE NUT SHELL:Now in this question we’ll see that which advertising Medias are most popularamongst females.Now here we can see that electronic media is the basic most important mediafor the popularity of the advertisements amongst the females.On the second place we can also see that fashion magazines are also verypopular amongst females like akhbar-e-jahan and others. HENCE THE RESULTQ#11: How advertisements affect the level of your buyingFrequency TableProjectsformba.blogspot.com 69
70. Projectsformba.blogspot.comAdvertisement effect level of buying Frequency Percent Valid Cumulative Percent Percent Valid buy more 106 35.3 35.3 35.3 buy less 30 10.0 10.0 45.3 remains same 164 54.7 54.7 100.0 Total 300 100.0 100.0GRAPHICAL REPRESENTATION: buy more remains same buy lessIN THE NUT SHELL:Projectsformba.blogspot.com 70
71. Projectsformba.blogspot.comHere we are checking that how the advertisement affects the level of the buyingof females. Is it positively affects or negatively or remains neutral.So here we can see that mostly females said their there level of buying remainssame with the new advertisements. They buy in the routine; there is not any bigchange due to advertisements.But on the second hand another big group of females said that their buyinglevel increases with the new and innovative advertisements. When anyadvertisement attracts them then they definitely buy that due to which theirbuying level increases. HENCE THE RESULTQ#12: Advertisements of imported products are more attractive for you due toFrequency TableProjectsformba.blogspot.com 71
72. Projectsformba.blogspot.comAdvertisement of imported products Frequency Percent Valid Cumulative Percent Percent Valid quality 120 40.0 40.0 40.0 reliability 77 25.7 25.7 65.7 company 59 19.7 19.7 85.3 image status 44 14.7 14.7 100.0 Total 300 100.0 100.0GRAPHICAL REPRESENTATION 140 120 100 80 60 40 Count 20 quality reliability company image status advertisement of imported productsIN THE NUT SHELL:Projectsformba.blogspot.com 72
73. Projectsformba.blogspot.comFemales in our country prefer a lot the imported goods on local goods so weconducted the research for this purpose also that what are the reasons behindthis so that our local companies can also adopt that strategies so that theirselling will also increaseSo according to the results we can see that females prefer them due to thequality and reliability of that products, the imported products are more reliableand have the good quality due to which they prefer them and neglect the localgoods. HENCE THE RESULTQ#13: Which advertisement, for the following categories, is more attractive for youFrequency TableProjectsformba.blogspot.com 73
74. Projectsformba.blogspot.comMore attractive advertisement categories Frequency Percent Valid Cumulative Percent Percent Valid basic 91 30.3 30.3 30.3 accessories home 52 17.3 17.3 47.7 appliances art and craft 36 12.0 12.0 59.7 cosmetics 120 40.0 40.0 99.7 others 1 .3 .3 100.0 Total 300 100.0 100.0GRAPHICAL REPRESENTATION: others basic accessories cosmetics home appliances art and craftIN THE NUT SHELL:Projectsformba.blogspot.com 74
75. Projectsformba.blogspot.comWe know that advertisement is very popular amongst the females but here wewanted to know that advertisements of which category are mostly popular.Here according to the results female like the ads of cosmetics more and thencome
towards the basic accessories of life and on the other categories. HENCE THE RESULTQ#14: Degree of your satisfaction, towards consumption of goods depends uponFrequency TableProjectsformba.blogspot.com 75
76. Projectsformba.blogspot.comDegree of satisfaction, consumption of goods Frequency Percent Valid Cumulative Percent Percent Valid good quality 174 58.0 58.0 58.0 price 38 12.7 12.7 70.7 appearance 34 11.3 11.3 82.0 company 30 10.0 10.0 92.0 image others 24 8.0 8.0 100.0 Total 300 100.0 100.0GRAPHICAL REPRESENTATION: 200 100 Count 0 good quality appearance others price company image degree of satisfaction, consumption of goodsIN THE NUT SHELL:Projectsformba.blogspot.com 76
77. Projectsformba.blogspot.comSatisfaction is very important for every one, towards consumption of goods. Ifa costumer is satisfied then he will again and again purchase that product.According to our research we came to know that females become satisfy mostlydue to good quality of the product.Price, appearance, company images have the secondary importance for thesatisfaction of females towards consumption of goods. HENCE THE RESULTQ#15: Do you prefer advertised products on basic necessities of life during buyingFrequency TablePrefer advertised products on basic necessariesProjectsformba.blogspot.com 77
78. Projectsformba.blogspot.com Frequency Percent Valid Cumulativ Percent e Percent Valid i think so 125 41.7 41.7 41.7 i dont think 82 27.3 27.3 69.0 so seldom think 60 20.0 20.0 89.0 so i dont know 33 11.0 11.0 100.0 Total 300 100.0 100.0GRAPHICAL REPRESENTATION: i dont know seldom think so i think so i dont think soIN THE NUT SHELL:Projectsformba.blogspot.com 78
79. Projectsformba.blogspot.comHere is a question to see the importance of advertised products. We ask fromthe females that if they prefer the advertised products on basic necessities thenwe can see that almost 42 % females think that yes they often prefer theadvertised products on the basic necessities.And also on the second hand almost 28 % females think that they do not preferthe advertised products on the basic necessities of life. HENCE THE RESULTQ#16: Is advertisement become the cause of product failure or successFrequency TableProjectsformba.blogspot.com 79
80. Projectsformba.blogspot.comAdvertisement cause product failure or success Frequency Percent Valid Cumulativ Percent e Percent Valid i think so 125 41.7 41.7 41.7 i dont think 53 17.7 17.7 59.3 so seldom think 52 17.3 17.3 76.7 so i dont know 42 14.0 14.0 90.7 5 28 9.3 9.3 100.0 Total 300 100.0 100.0GRAPHICAL
REPRESENTATION: 140 120 100 80 60 40 20 Count 0 i think so seldom think so 5 i dont think so i dont know advertisement cause product failure or successProjectsformba.blogspot.com 80
81. Projectsformba.blogspot.comIN THE NUT SHELL:This question was made to get the idea of females that what they think that canadvertisement cause any product failure or success?So according to the results 41.7 % females said that yes a good advertisementcan be the cause of product success and a bad advertisement can become thecause of product failure.The ratios for the rest options are almost same. HENCE THE RESULTQ#17: Is advertisement increases demand of any productFrequency TableProjectsformba.blogspot.com 81
82. Projectsformba.blogspot.comAdvertisement cause demand of product Frequency Percent Valid Cumulative Percent Percent Valid yes 214 71.3 71.3 71.3 no 39 13.0 13.0 84.3 i dont know 47 15.7 15.7 100.0 Total 300 100.0 100.0GRAPHICAL REPRESNTATION: i dont know no yesProjectsformba.blogspot.com 82
83. Projectsformba.blogspot.comIN THE NUT SHELL:In the above question we got ideas that can advertisement create more demandfor the products or not.So here we can see that 71 % females said that yes advertising can create thedemand for any product. If advertising agencies make good advertisements thenthe demand of their products will also be increased. HENCE THE RESULTQ#18: How marketing departments of companies make advertisement interestingHow mkt dept make advertisement interestingProjectsformba.blogspot.com 83
84. Projectsformba.blogspot.com Frequency Percent Valid Cumulative Percent Percent Valid By using 37 12.3 12.3 12.3 famous celebrities By using 35 11.7 11.7 24.0 different medias By 63 21.0 21.0 45.0 improving appearance of products All of the 165 55.0 55.0 100.0 above Total 300 100.0 100.0GRAPHICAL REPRESENTATION: 180 160 140 120 100 80 60 40 20 Count 0 By using famous cele By improving appeara By using different m All of the above how mkt dept make advertisement interestingIN THE NUT SHELL:Projectsformba.blogspot.com 84
85. Projectsformba.blogspot.comIn this question we collect the suggestions from the females that how the marketingdepartments can make the most attractive advertisements due to which females becomemore influence towards the product and buy that product.We gave the following options to the females for selection that areBy using famous celebritiesBy using different MediasBy improving product appearanceBut 55 % females are agreed upon one condition
that all of the above situations can becombinely put in the process of making attractive advertisements to influence the buyingbehavior of females. HENCE THE RESULTHYPOTHESIS TESTING:Projectsformba.blogspot.com 85
87. Projectsformba.blogspot.com FINDINGSIn our whole research process, we get the following findingsProjectsformba.blogspot.com 87
Marketing departments of the companies can make the advertisements more attractive by using famous celebrities, different medias and by improving the appearance of the product. CONCLUSIONSThe purpose of our research is to find out the female behaviors towards thebuying of the products and also to see that how much advertising affects theProjectsformba.blogspot.com 88 Demand of the products can be increased with the help of good advertisements. Advertisement can become the cause of product failure or success. Females mostly satisfy with the good quality of the product. Imported goods are mostly preferred due to their good quality and reliability. Advertisement doesn’t much effect the level of buying. The most attractive advertising media in Pakistan is electronic media Company reputation effects also in the effectiveness of advertisements. Advertisements can become more effective through innovative slogans, different trade marks. Advertisement often left some negative effects in the minds of consumer, according to our research process that negative effects may be categorized in this sense that females neglect the price of the product and buy that advertised product at any cost. The most popular advertisement type amongst the females is product advertisement Self image effects too much when females buy any product Advertisement influence the female buying behavior but not more than quality of the product Females are more concerned towards the quality of the product while buying 88. Projectsformba.blogspot.comThat:
89. Projectsformba.blogspot.combuying behavior of females. The basic purpose of our research is to getinformation from females and then suggest to the companies that what theycan do maximum to improve their selling. Is advertisement is the biggesttool they have to attract the females towards their products or there are someother factors as well which have the affects more than advertisements. So forthis purpose we planned a full fledge research process and for this purposewe did the cluster sampling and made the questionnaires to fill from thesample group to come to the conclusions.After collecting the data we analyzed it and made some conclusions basedon
findings. We have found that females prefer the quality of the product atvery first stage. Now days females are very intelligent, they know thatadvertisements and appearances of the products may be fake and canperceive them so they firstly check the quality of the product and then buythat product in the routine.As we conducted the whole research from the very qualified females livingin good areas so their responses are very effective for our research process.The over all trend was seen in the questionnaires regarding to the quality ofthe products so which means females do not compromise with the quality.People have mixed results about the advertisements of the products. On theone hand it also highly influences the buying behavior of females due toattractive Medias, different types, innovations in slogans but on the otherhand it also has some negative effects as well. If a good advertisement canbecome the cause of the success of any product then a bad advertisement canbecome the cause of failure of any product.More over advertisements can effect negatively and also positively to thechildren. They can perceive any thing from the ads so advertisements shouldbe much ethical and good for the children and teenagers.Further more according to females, the marketing departments should makethe advertisements better through new and unique strategies if they want toincrease their sale and want to use the advertisement a big tool to increasetheir sale volume. RECOMMENDATIONSAfter getting the conclusions of our research, we want to give somerecommendations to the marketing departments of the companies so thatProjectsformba.blogspot.com 89
Packaging must be g Advertisement affects the buying behavior but it must be realistic We also asked an open ended question from the females, they give us some value able suggestions which we want to give you And rewardingHere we suggest you the ten steps to make advertising successful1. Narrow your market to a specific group of prospective clients. Find your nichemarket.2. Analyze your media. Does it appeal to your niche market? If it does, tailor yourads to relate directly to your media.3. Appeal to the impulse in the viewers of your ad. Call your readers to action *now*... Emphasize the benefits which a consumer will get after purchasing yourproduct. Offer something free in the ad itself.4. Use other medias as well for creating more demand of your products. Analyzethe advertising strategies of others.5. Design "killer" headings (slogans). Use new and interesting techniques whiledesigning a message for your product.6. Use different famous celebrities to become the more attractive advertisement.7. Use realistic facts and figures in your ads so that the customers become moreloyal towards your product.8. Repeat again and again your advertisements so that the advertisement of yourproduct can continuously be seen by customers.9. Clearly define all the attributes of the product so that
customers also believe thatthis product has also a good quality.10. Now promise yourself this: Youre going to get your ads noticed by writing themyourself and taking these steps to advertising success. Relevant Truth full Advertisement can do any thing, it can create the demand of any product but the advertising strategies should be effective so that females believe on these ads and buy the products so advertising should be: As females mostly prefer the quality of the products so they should highly focus on the quality of their products. 90. Projectsformba.blogspot.comthey can focus on those things through which they can increase their salevolume amongst the females. Advertisements influence but to some extentProjectsformba.blogspot.com 90ood to influence the buying behavior of females
Advertisements can change the preferences of females while buying but that must be realistic.So at the end we are strongly recommending you that if you want to increasethe sale volume of your product then firstly make its quality good, makerealistic advertisements and use effective medias.Projectsformba.blogspot.com 91 Females prefer electronic media’s advertised products. Medias play an important role and advertisements must be interesting. Buying behavior varies from region to region so advertisement does not affect a lot. 91. Projectsformba.blogspot.com
A comparison study on the top ‘three’ two wheeler companies in india — Document Transcript
Projectsformba.blogspot.comA COMPARISON STUDY ON THE TOP ‘THREE’ TWO WHEELER COMPANIES IN INDIA DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION BY UNDER THE GUIDANCE OF PROF. …………………………… FACULTY GUIDE- CUIM CHRIST UNIVERSITY INSTITUTE OF MANAGEMENT BANGALORE-560029Projectsformba.blogspot.com pg. 1
Projectsformba.blogspot.com DECLARATION This is to certify that this research project titled “A COMPARISON STUDY ON THE TOP ‘THREE’ TWO WHEELER COMPANIES IN INDIA”is an original work carried out in the 5th and 6th trimester of my MBA(2008-2010) underthe guidance of ……………………... This project is made exclusively as a part of mycurriculum and will not be submitted in future to any other university or institution.Date :Projectsformba.blogspot.com pg. 2
Projectsformba.blogspot.com CERTIFICATE This is to certify that …………………., student of Christ University of Management, Bangalore, has completed this research project titled “A COMPARISON STUDY ONTHE TOP ‘THREE’ TWO WHEELER COMPANIES IN INDIA” under my guidance from in partial fulfillment of the Masters of Business Administration degree. ……………………………………….. PROFESSOR ,MARKETING DEPT. CHRIST UNIVERSITY INSTITUTE OF MANAGEMENT BANGALOREProjectsformba.blogspot.com pg. 3
Projectsformba.blogspot.com ACKNOWLEDGEMENTIt is with immense satisfaction and pride that, I am completing my Dissertation Project report. I therefore, would like to stop for a few moments and thank Christ University Institute of Management, Bangalore and …………….. for allowing me to take up my DissertationProject on comparison study of two wheeler companies in India . I am also very thankful for his extensive support, timely guidance and regular monitoring our progress and providing valuable inputs from time to time. Sincere thanks to all the respondents, for parting their valuable time and being so patient insharing the relevant information. I also express my overriding debts and thanks to my friends, without whose help it would have been impossible to complete my project. Last but not the least; I would like to thank all those concerned people who have directly or
indirectly contributed in the completion of this entire dissertation report.Projectsformba.blogspot.com pg. 4
Projectsformba.blogspot.comContentsDECLARATION........................................................................................................................................2CERTIFICATE...........................................................................................................................................3ACKNOWLEDGEMENT............................................................................................................................4 1.1 Introduction to Indian Two-wheeler Sector:............................................................................10 1.2 Evolution of Two-wheeler Industry in India:..............................................................................11 1.3 Profile Change in Indian Two-Wheeler Industry........................................................................14 1.4 Key Earnings Drivers..................................................................................................................152.1 COMPANY PROFILE .......................................................................................................................17 2.2 Hero Honda Motors Limited......................................................................................................18 2.3 Corporate Profile:.......................................................................................................................18 2.4 Mission statement:....................................................................................................................20 2.5 HERO HONDAS MANDATE:.......................................................................................................20 2.6 S.W.O.T ANALYSIS:...................................................................................................................21 STRENGTHS:.....................................................................................................................................21 WEEKNESS:.......................................................................................................................................21 2.7 HERO HONDA’S CORE VALUES.................................................................................................22 2.8 Product range of HERO HONDA................................................................................................23 2.9 BAJAJ auto ltd...........................................................................................................................27 2.11 BAJAJ AUTO’S MISSION:..........................................................................................................29Projectsformba.blogspot.com pg. 5
Projectsformba.blogspot.com 2.12 SWOT Analysis.........................................................................................................................29 2.13 The Inevitable Change.............................................................................................................31 2.14 Product range of
Bajaj.............................................................................................................32 2.15 Current Situation.....................................................................................................................35 Current Performance...................................................................................................................35 2.16 The Industry Analysis - Five Forces Analysis-BAL...................................................................36 External Environment..................................................................................................................36 2.17 Product & Advertising Strategies OF BAL................................................................................37 2.18 Strategies & Implementation..................................................................................................38 FMCG Business Model..................................................................................................................38 2.19 Other Strategic Issues..............................................................................................................39 2.20 Strategies for the Overseas Markets.......................................................................................40 2.21 R&D.........................................................................................................................................41 2.22 The Future...............................................................................................................................42 2.23 New Strategies adopted by Bajaj.............................................................................................43 2.24 HONDA MOTORCYCLE & SCOOTER INDIA (Pvt.) Ltd.(HMSI)....................................................44 2.25 About Honda Motorcycle & Scooter India Pvt. Ltd..................................................................44 2.26 CORPORATE PROFILE...............................................................................................................45 2.27 Mission Statement..................................................................................................................46 2.28 SWOT Analysis.........................................................................................................................46 2.29 PRODUCT RANGE:...................................................................................................................47 2.30 Market growth and market size (HMSI)..................................................................................50 2.31 Strategy of rivals Vs HMSI.......................................................................................................51 2.32 Strategy of HMSI.....................................................................................................................53 2.34 Strategy adopted by TVS & Bajaj for increasing sales and countering growth of HMSI...........53 2.35 Review of strategies adopted by Honda..................................................................................543.1 RESEARCH
Projectsformba.blogspot.com 3.2 STATEMENT OF PROBLEM.........................................................................................................58 3.3 HYPOTHESIS..............................................................................................................................59 3.4 AIMS AND OBJECTIVES..............................................................................................................60 3.5 SAMPLING TECHNIQUE.............................................................................................................60 3.6 SAMPLE UNIT............................................................................................................................60 3.7 SAMPLE SIZE..............................................................................................................................60 3.8 STATISTICAL DESIGN..................................................................................................................61 3.9 PRIMARY DATA..........................................................................................................................61 3.10 SECONDARY DATA...................................................................................................................62 3.11 LIMITATIONS OF STUDY...........................................................................................................624.1 RESPONDENT’S PROFILE................................................................................................................64 4.2 SEX.............................................................................................................................................64 4.3 MARITAL STATUS.......................................................................................................................65 4.4 OCCUPATION.............................................................................................................................66 4.5 AGE............................................................................................................................................67 4.6 INCOME.....................................................................................................................................695.1 DATA ANALYSIS............................................................................................................................71 5.2 OWNERSHIP OF TWO WHEELER..............................................................................................71 5.3 MOST VIEWED ADS...................................................................................................................72 5.4 MOST INFLUENTIAL ADS .........................................................................................................73 5.5 BEST RECALLED ADS.................................................................................................................74 5.6 MOST COMMON SOURCE OF ADS.............................................................................................75
5.7 SOURCE OF RELIABLE INFORMATION FOR PURCHASE DECISIONS............................................76 5.8 FACTORS WHICH MOTIVATE PURCHASING DECISION...............................................................78 5.9 PREFERRED PRICE RANGE(in 000’s)...........................................................................................79 5.10 RATING FOR VARIOUS FACTORS(1 LEAST PREFERRED AND 7 MOST PREFERRED)...................81 5.11 IS CROSSCHECKING DONE?.....................................................................................................83Projectsformba.blogspot.com pg. 7
Projectsformba.blogspot.com 6.1 DEMAND AND GROWTH DRIVERS............................................................................................85 Personal Income...........................................................................................................................86 Demography and Inspiration........................................................................................................86 Penetration Level.........................................................................................................................86 Other Factors...............................................................................................................................86 7.1 FINDINGS..................................................................................................................................87 8.1 HYPOTHESIS TESTING................................................................................................................89 9.1 RECOMMENDATIONS................................................................................................................91 Scaling Up Service Centers...........................................................................................................92 Focus on Easy Credit Lending.......................................................................................................92 Investment in Research and Development..................................................................................92 Focus on Exports and Global Market...........................................................................................92 10.1 LEARNINGS..............................................................................................................................93 11.1 BIBLIOGRAPHY.........................................................................................................................95 12.1 QUESTIONNAIRE......................................................................................................................98Projectsformba.blogspot.com pg. 8
Projectsformba.blogspot.com1.1 Introduction to Indian Two-wheeler Sector:The Indian automotive industry consists of five segments: commercial vehicles; multi-utilityvehicles & passenger cars; two-wheelers; three-wheelers; and tractors. With 7,822,963 unitssold in the domestic market and 753,591 units exported during the first nine months ofFY2007, the industry (excluding tractors) marked a growth of 43% over the correspondingProjectsformba.blogspot.com pg. 10
Projectsformba.blogspot.comprevious. The two-wheeler sales have witnessed a spectacular growth trend since the midnineties.India is the second largest producer and manufacturer of two-wheelers in the world. Indiantwo-wheeler industry has got spectacular growth in the last few years. Indian two-wheelerindustry had a small beginning in the early 50s. The Automobile Products of India (API)started manufacturing scooters in the country.Bikes are a major segment of Indian two wheeler industry, the other two being scooters andmopeds. Indian companies are among the largest two-wheeler manufacturers in the world.Hero Honda and Bajaj Auto are two of the Indian companies that top the list of worldcompanies manufacturing two-wheelers.The two-wheeler market was opened to foreign companies in the mid 1980s. The openness ofIndian market to foreign companies lead to the arrival of new models of two-wheelers intoIndia. Easy availability of loans from the banks, relatively low rate of interest and thediscount of prices offered by the dealers and manufacturers lead to the increasing demand fortwo-wheeler vehicles in India. This lead to the strong growth of Indian automobile industry.1.2 Evolution of Two-wheeler Industry in India: Two-wheeler segment is one of the most important components of the automobilesector that has undergone significant changes due to shift in policy environment. The two-wheeler industry has been in existence in the country since 1955. It consists of three segmentsProjectsformba.blogspot.com pg. 11
Projectsformba.blogspot.comviz. scooters, motorcycles and mopeds. In India there are some MNC’s and Indian companydealing in automobile sector. The main key players who are dealing in this sector are HeroHonda, Bajaj, Yamaha, Honda, and TVS. Hero Honda is the biggest player in this sector inIndia as well as in the world and playing a very important role in two wheeler automobilesector. Hero Honda, Bajaj and TVS are the Indian companies and Yamaha & Honda areinternational automobile brand. Bajaj is the first Indian two wheeler automobile company in the market since1945 with the name M/s Bacharj trading corporation private limited. In 1959 M/s Bacharjtrading corporation private limited change its name as Bajaj Auto Ltd. Bajaj Auto obtainslicense from the Government of India to manufacture two- and three-wheelers vehicles in1959. Hero Honda Motors Limited was
established in 1984, as a joint venturebetween Indias Hero Group (worlds largest bicycle manufacturers) and Japans Honda MotorCompany. And created the worlds single largest two wheeler company and also one of themost successful joint ventures worldwide. During the 80s, Hero Honda became the firstcompany in India. Over 19 million Hero Honda two wheelers running on Indian roads today. TVS Motors is the third largest company in the two-wheeler industry with amarket share of 16%. Infect, it is the only Indian company without a foreign collaboration inthe two-wheeler industry. When the company opted out of the collaboration with Suzuki in2002, many believed that TVS was headed towards extinction. But the company proved thedoomsayers wrong and came out with a very successful `TVS Victor. TVS Motors Ltd.originally incorporated in 1982 to manufacture two-wheelers in collaboration with SuzukiMotors of Japan, TVS was one of the leaders in two-wheeler industry.Projectsformba.blogspot.com pg. 12
Projectsformba.blogspot.com Yamaha Motor Corporation is the auto mobile company of Japan(1953) which works in India since 1955 and providing latest technology in India from lasttwo decades. Yamaha Motor India was incorporated in august 2001 as a 100% subsidiary ofYamaha motor corporation, Japan Honda motors of Japan is not a new name in the two wheeler scenario in thecountry, they were in a tie up with the Firodias owned Kinetic group. However in the late 90sthey parted ways after problems arose over issues like introduction of new models,advertising expenditure, marketing strategies and other related issues. In the mid 80 Hondamotors of Japan joined hands with the largest bicycle maker of India the Hero cycles to createHero Honda which in a couple of decades or so have gone on to become the single largestmotorcycle company in the world. Though Honda has come on its own on the Indian marketyet it will be providing technological support to Hero Honda for the next ten years. Thuspresenting a unique situation in which the company will be in direct competition with thecompany which it has been associated for nearly two decades. Honda Motorcycles andScooters India limited, a 100% subsidiary of Honda motor company Japan eventually enteredthe Indian market with Honda Unicorn in 2004.Projectsformba.blogspot.com pg. 13
Projectsformba.blogspot.com1.3 Profile Change in Indian Two-Wheeler IndustryThe demand shift from scooters to motorcycles in the 1990s was without parallel in anycomparable product category in India. This was mainly attributed to the change in customerspreference towards fuel-efficient and aesthetically appealing models, which scootermanufacturers failed to provide. The delayed launch of new, advanced scooter models, fear offour-stroke scooters being prone to increased skidding risks and vibrations, and
the difficultyof maintenance also contributed to this shift.Interestingly, the growth in the motorcycle segment was mainly driven by the demand fromrural and semi-urban consumers. An estimated 60% of the demand for motorcycles camefrom rural and semi-urban customers. The rise in their disposable incomes on account ofgood monsoons in the 1990s provided the normally conservative rural and semi-urbancustomers with extra money that induced them to experiment with new, innovative products.Projectsformba.blogspot.com pg. 14
Projectsformba.blogspot.comShift from Scooter to Motorcycle Scooter Motorcycle Moped Year Total In 000 Overall Growth No. % No. % No. % 1993 1,503.36 -6.40 709.73 47.2 379.06 25.2 414.57 27.6 1994 1,770.22 17.75 840.17 47.5 472.58 26.7 457.47 25.8 1995 2,209.23 24.80 1,033.52 46.8 652.01 29.5 523.70 23.7 1996 2,660.04 20.41 1,223.43 46.0 809.53 30.4 627.08 23.6 1997 2,963.49 11.41 1,301.05 43.9 978.68 33.0 683.76 23.1 1998 3,042.85 2.68 1,262.70 41.5 1,131.31 37.2 648.84 21.3 1999 3,403.43 11.85 1,325.87 39.0 1,395.66 41.0 681.90 20.0 2000 3,745.55 -0.80 901.88 24.0 2,156.03 58.0 687.64 18.0Source: (SIAM). No. Number of Units (in 000)Advanced technology, larger wheelbase, higher ground clearance and the ability to ride onbad roads with less effort and less danger of skidding and decreased maintenance cost werethe other factors that encouraged customers to choose motorbikes over other two-wheelers.1.4 Key Earnings DriversBelow are the key factors, which strongly affect the auto industry: -Government policy impact on petrol prices: Petrol prices determine the running cost oftwo/three wheelers expressed in Rupees per kilometer.Petrol prices are the highest in India as GOI subsidizes kerosene and diesel. But with therecent change in GOI policy to reduce the subsidy, the prices of petrol will remain constant atthe current prices. This will have a positive effect on purchases of two/three wheelers.Improvement in disposable income: With the increase in salary levels, due to entry ofmultinationals following liberalization process and fifth pay commission, the disposableincome has improved exponentially over the years. This will have multiplier effect ondemand for consumer durables including two-wheelers.Changes in prices of second-hand cars: The second hand car prices of small cars havecome down sharply in the recent past. This will shift the demand from higher-end two-wheelers to cars and affect the demand for two-wheelers negatively. A further drop inProjectsformba.blogspot.com pg. 15
Projectsformba.blogspot.comsecond-hand car prices will lead to pressure on the two-wheeler majors who plan to releasehigher-end scooters and motorcycles.Implementation of mass transport system: Many states have planned to implement masstransport systems in state capitals in the future. This will have negative impact on
demand fortwo-wheelers in the long run. But taking into account the delays involved in implementationof such large infrastructure projects the demand to be affected only five to seven years downthe line.Availability of credit for vehicle purchase: The availability and cost of finance affects thedemand for two- and three-wheelers as the trend for increased credit purchases for consumerdurables have increased over the years. Therefore, any change with respect to any of thesetwo parameters as a result of change in RBI policy has to be closely watched to assess thedemand for two- and three-wheelers.Projectsformba.blogspot.com pg. 16
Projectsformba.blogspot.com 2.1 COMPANY PROFILEProjectsformba.blogspot.com pg. 17
Projectsformba.blogspot.com2.2 Hero Honda Motors Limited Hero Honda Motors Limited was established in 1984, as a joint venture betweenIndias Hero Group (worlds largest bicycle manufacturers) and Japans Honda MotorCompany. In 1985 production began with the launch of its first motorcycle, the CD100,which gave 80 km to the liter. In 1987 the engine plant was started and in 1989 the Companyproduced its 3,00,000th motorcycle. In 2001 Hero Honda manufactured its 50,00,000thmotorbike. Hero Honda has a reputation of being the most fuel-efficient and the worldssingle largest two wheeler Company. Shri Brijmohan Lall Munjal is the chairman andmanaging director of this Company. As early as in 1960’s very few Indian bicycle manufacturers were interested inexports. However, the hero groups foray into the overseas markets in 1963 pioneered Indianexports in the bicycle segment. It was more prompted essentially by the need to remainattuned to the global marketplace. While initial exports were restricted to Africa and themiddle east, today more than 50% of the exports from Hero Cycles Ltd. Meet the demands ofsophisticated markets in Europe and America. This is primarily because of appropriateproduct development and excellent quality that hero offers.. Hero Honda has grown like no other company in the auto business. Severaltimes in the path, savvy observers have insisted that it has grown just too big and that nocompany its size can continue to show growth rates. But Hero Honda has ignored that opinionand continued growing at the place it has set many years ago. Hero Honda today faces more competitor than it has ever in the history. Nowthat is the undisputed two wheeler Numero Uno in the country. Every single two wheelermanufacturer in India if looking market share away from it. More over for the first time thereare so many four- stroke challengers in the market. And Hero Hondas best selling productsare ageing.2.3 Corporate Profile:Projectsformba.blogspot.com pg. 18
Projectsformba.blogspot.com The joint venture between Indias Hero Group and Honda Motor Company, Japan hasnot only created the worlds single largest two wheeler company but also one of the mostsuccessful joint ventures worldwide. During the 80s, Hero Honda became the first company in India to prove that it waspossible to drive a vehicle without polluting the roads. The company introduced newgeneration motorcycles that set industry benchmarks for fuel thrift and low emission. Alegendary Fill it - Shut it - Forget it campaign captured the imagination of commuters acrossIndia, and Hero Honda sold millions of bikes purely on the commitment of increased mileage Over 19 million Hero Honda two wheelers tread Indian roads today. These are almostas many as the number of people in Finland, Ireland and Sweden put together! Hero Honda has consistently grown at double digits since inception; and today, everysecond motorcycle sold in the country is a Hero Honda. Every 30 seconds, someone in Indiabuys Hero Hondas top -selling motorcycle – Splendor. This festive season, the company soldhalf a million two wheelers in a single month—a feat unparalleled in global automotivehistory. Hero Honda bikes currently roll out from two globally benchmarked manufacturingfacilities based at Dharuhera and Gurgaon in Haryana. These plants together are capable ofchurning out 3.9 million bikes per year. A third state of the art manufacturing facility atHardwar in Uttranchal will soon be commissioned to cope with sustained customer demand. Hero Hondas extensive sales and service network now spans over 3000 customertouch points. These comprise a mix of dealerships, service and spare points, spare partsstockiest and authorized representatives of dealers located across different geographies.Hero Honda values its relationship with customers. Its unique CRM initiative - Hero HondaPassport Program, one of the largest programs of this kind in the world, has over 3 millionmembers on its roster. The program has not only helped Hero Honda understand itsProjectsformba.blogspot.com pg. 19
Projectsformba.blogspot.comcustomers and deliver value at different price points, but has also created a loyal communityof brand ambassadors. Having reached an unassailable pole position in the Indian two wheeler market, HeroHonda is constantly working towards consolidating its position in the market place. Thecompany believes that changing demographic profile of India, increasing urbanization and theempowerment of rural India will add millions of new families to the economic mainstream.This would provide the growth ballast that would sustain Hero Honda in the years to come.As Brijmohan Lall Munjal, the Chairman, Hero Honda Motors succinctly points out, "Wepioneered India’s motorcycle industry, and its our responsibility now to take the industry tothe next level. Well do all it takes to reach there.2.4 Mission statement: Hero
Honda’s mission is to strive for synergy between technology, systems and humanresources, to produce products and services that meet the quality, performance and priceaspirations of its customers. At the same time maintain the highest standards of ethics andsocial responsibilities. This mission is what drives Hero Honda to new heights in excellence and helps theorganization forge a unique and mutually beneficial relationship with all its stake holders.2.5 HERO HONDAS MANDATE:Projectsformba.blogspot.com pg. 20
Spare parts are too costly.OPPOURTUNITIES:Projectsformba.blogspot.com pg. 21 Its market share is reducing from last few years. They have big gap between cubic capacities of its products. Not fit for ruler India. Suppose to be very sophisticated. The company has clarified about its intention of setting a third plant in addition to its existing two plants. The company has embarked upon a green field expansion plan and has earmarked Rs 2 bn for the same. It should be noted that the company has a strong cash flow position; it generated Rs 9 bn from operation in FY04 and is virtually a debt free company.WEEKNESS: Debt equity ratio is only 0.1. Best customer preference. It gives better service for customers. It has a good brand image. It has the highest share in automobile sector. Better sale service. Huge sale network (3500 Dealers). Hero Honda gives 80 Km/Liter Avg. Hero Honda introduced First stroke bike in the Indian market. Projectsformba.blogspot.com Hero Honda is a world leader because of its excellent manpower, provenmanagement, extensive dealer network, efficient supply chain and world-class products withcutting edge technology from Honda Motor Company, Japan. The teamwork andcommitment are manifested in the highest level of customer satisfaction, and this goes a longway towards reinforcing its leadership status2.6 S.W.O.T ANALYSIS:STRENGTHS:
Decreasing market share.2.7 HERO HONDA’S CORE VALUESProjectsformba.blogspot.com pg. 22 The cost of the product is very high in comparison to other companies. Main threats to Hero Honda are their competitors like:- o Bajaj Auto Ltd. o TVS motors Ltd. o Yamaha Motors India. o Honda motorcycle and scooter India. As government polices are amended against pollution in metro cities, Hero Honda being 4 stroke bike manufacture have great opportunities to explore its new innovations and technologies.THREATS: They have big opportunities in heavy bike segments. There is large no. of young consumers in the market. Company has to focus on them. They should go in new segments of bikes. Hero Hondas the first manufacture to launch eco friendly bikes with 4-stroke engines. They have attained a
stronger good will and popularity in the industry and the consumers. Projectsformba.blogspot.com
Prompts transparency Enables relationship buildings. Is a caring organization? Providing learning environment. Is self-reliant. Provide fearless, enjoyable working environment. Is striving for excellence. Is a boundary less organization? Is a responsive organization? Respect for Human Beings. Projectsformba.blogspot.com & Is performance oriented?2.8 Product range of HERO HONDAScootersProjectsformba.blogspot.com pg. 23 Is creativity promoting. trust.
Projectsformba.blogspot.com • HeroHonda Pleasure Hero Honda Pleasure Manufacturer Hero Honda motorcycle Ltd. Production 2005 -present Price Rs. 37990 Engine 102 cc, 7bhp@ 7000 rpm, torque 0.78 kg- m @5000 rpm Motorcycles • CD Dawn • CD Deluxe • Splendour + • Splendour NXG • Passion pro • Passion plus • Super Splendour • Glamour • Glamour PGM F1Projectsformba.blogspot.com pg. 24
Projectsformba.blogspot.com • Achiever CD Dawn • CBZ XTREME • HUNK • Karizma • Karizma ZMR Features of a few bikes from above mentioned list from HERO HONDA are as follows.. CD Dawn Manufacturer Hero Honda motorcycle Ltd. Production 2003-present Price Rs. 37990 Engine 97.2 cc, 7.7 ps@ 7500 rpm, torque0.77 kg -m @6000 rpm CD Deluxe CD Deluxe Manufacturer Hero Honda motorcycle Ltd. Production 2007-present Price Rs. 40,000 Engine 97.2 cc, 7.7 ps@ 7500 rpm, torque0.77 kg -m @6000 rpmProjectsformba.blogspot.com pg. 25
Projectsformba.blogspot.com • Karizma ZMR2.9 BAJAJ auto ltd Since 1986, there is a technical tie-up of Bajaj Auto Ltd. with Kawasaki HeavyIndustries of Japan to manufacture state-of-art range of latest two-wheelers in India. The JVhas already given the Indian market the KB series, 4S and 4S Champion, Boxer, the Caliberseries, and Wind125 Kawasaki Heavy Industries is a Fortune
500 company with a turnover of USD 10billion (Rs. 45,840 crore). It has crafted new technologies for more than hundred years. Thetechnologies of KHI have redefined space systems, aircrafts, jet engines, ships, locomotive,energy plants, automation system, construction machinery, and of course high reliability two-wheelersProjectsformba.blogspot.com pg. 27
Projectsformba.blogspot.com KHI has given the world its legendary series of 600-1200cc Ninja and 1600 Vulcanbikes. Straight from its design boards, the Kawasaki Bajaj Eliminator, Indias first real cruiserbike, redefines the pleasure of "biking" in looks as well as performance.2.10 Corporate Profile Inspiring Confidence, the tagline, has build up confidence, through excitementengineering, not only to domestic consumers but also internationally. Established just eightdecades back in 1926 by Jamnalal Bajaj, the company has been vested with Indias largestexporter of two and three wheelers, 196,710 units in 2004-05, a great 26 per cent jump overthe previous year. Bajaj Auto Ltd. sales have increased by approximately 21 per cent in the year2004-05, which exceeds Rs 65.4 billion, a record in the history of the company. The grossoperating profit stands at Rs. 9.3 billion, again a record. The profits after tax of the BAL areclose to Rs. 7.7 billion, and the pre-tax return on operating capital is at an impressive 80 percent. The strength of the company is its quality products, excellence in engineering anddesign, and its ability to delight the customers. The Pulsar, introduced in November 2004, iscontinually dominating the premium segment of the motorcycle market, helping to maintainthe market superiority. Discover DTSi, one more successful bike on Indian roads, is in thevalue segment of the motorcycle market. It incorporates a high degree of power with fuelefficiency of a 100 cc motorcycle. BAL is committed to prevention of pollution, continual improvement of environmentperformance and compliance with all environmental legislation and regulations. They alwaysProjectsformba.blogspot.com pg. 28
Projectsformba.blogspot.combelieve in providing the customer value for money and keep an special eye upon quality,safety, productivity, cost and delivery. Extensive R Product design and development capabilities. Highly experienced management. 2.11 BAJAJ AUTO’S MISSION: We at Bajaj Auto continue to firmly believe in providing the customer Value formoney, for years through our products and services. This we shall maintain and improve, In our decision making, quality, safety and service will be given as muchconsideration as productivity, cost and delivery. Quality shall be built into every aspect of our work life and business operations.Quality improvements and customer satisfaction shall be the responsibility of everyemployee.2.12 SWOT AnalysisLets
analyze the position of Bajaj in the current market set-up, evaluating its strengths,weaknesses, threats and opportunities available.Strengths & High performance products across all categories.Projectsformba.blogspot.com pg. 29 Widespread distribution network. D focus.
The competition catches-up any new innovation in no time.Projectsformba.blogspot.com pg. 30 Growing world demand for entry-level motorcycles especially in emerging marketsThreats The growing gearless trendy scooters and scooterette market. More maturity and movement towards higher-end motorcycles. Untapped market above 180 cc in motorcycles. Double-digit growth in two-wheeler market. Not a globally recognizable brand (unlike the JV partner Kawasaki)Opportunities Not a global player in spite of huge volumes. Still has no established brand to match Hero Hondas Splendor in commuter segment. Hasnt employed the excess cash for long. High economies of scope.Weaknesses High economies of scale. Great financial support network (For financing the automobile) High export to domestic sales ratio. Projectsformba.blogspot.com
Margins getting squeezed from both the directions (Price as well as Cost)2.13 The Inevitable ChangeBajaj on internal analysis found that it lacked –1. The technical expertise to deliver competitive goods.2. The design know-how.3. And the immediate inability to support the onslaught of competitors. All these forced Bajaj to look for an international partner who could bring intechnology and also offer some basic platforms to be manufactured and marketed in India.Kawasaki of Japan is a world-renowned manufacturer of high performance bikes. Bajajentered into a strategic tie-up with Kawasaki in late 1990s to enhance its product line andknowledge up-gradation to support long-term strategies. This served the purpose of sustaining the market competition for a while. From 1996to 2000, Bajaj invested hugely in infrastructure while simultaneously developing productdesign and innovation capabilities, which is the prime reason behind the energetic Bajaj of21st century. Bajaj introduced a slew of products right from entry-level motorcycle to thehigh premium segment right from 2001 onwards, and since then its raining success all theway for Bajaj.Projectsformba.blogspot.com pg. 31 Threat of cheap imported motorcycles from China. Projectsformba.blogspot.com
Projectsformba.blogspot.com Last quarter, Bajaj had impressive performance growing at a rate of 20%+ when thelargest manufacturer grew at just 6%. This stands a testimony to the various importantstrategic decisions over the past decade.2.14 Product range of BajajMotorcycles: • PULSAR 135 LS • PULSAR 150 DTS-i •
Projectsformba.blogspot.com • DISCOVER DTS-i • PLATINA 125 • PLATINA 100 • AVENGER 200 DTS-i • KAWAZAKI NINJA 250RFeatures of a few bikes from above mentioned list from BAJAJ are as follows.. Bajaj Pulsar 220 DTS-i PULSAR 220 DTS-i Bajaj Discover DTS-i Manufacturer Bajaj Auto Production 2008-present Price Rs. 78,200 Engine 220 cc ,21.04 @ 8500 (Ps @ RPM) 19.12 @ 7000 (Nm @ RPM) Manufacturer Bajaj Auto Production 2005-present Price Rs.47000-49200Projectsformba.blogspot.com pg. 33 Engine 135 CC ,9.64kw (13.10 ps) @ 8500rpm,11.88 nm @ 6500 rpm / 1.21 kgm
Projectsformba.blogspot.comDISCOVER135 DTS-i Bajaj Platina PLATINA 125 cc Bajaj Avenger DTS-i Manufacturer Bajaj Auto Production 2006-present Price Rs. 38621 Engine 125CC,8.5PS @7000rpm,10NM@4000rpm. Manufactur Bajaj Auto er Production 2005-present Price Rs. 64,524AVENGER 200 DTS-i Engine 200cc, 17.51 PS @ 8000 rpm 16.78 Nm @ 6000 rpmProjectsformba.blogspot.com pg. 34
Projectsformba.blogspot.com2.15 Current SituationCurrent Performance.C BAL is currently outperforming the industry growth rate in two-wheeler segment with32% growth in year 2004-05 v/s industry growth of 19%.3 Market share in Motorcycles is improving with every passing year. It has also increasedfrom 28% in 2004-05 to 31% in 2005-06.f Annual turnover for the year 2005-06 is Rs. 81.06 billion v/s Rs. 63.23 billion a yearbefore - an increase of 28% which is very healthy.b BAL has significant presence in all the three basic segments - Price Segment, ValueSegment and Performance Segment - and has been showing increased sales in all thesegments over years.Besides this, BAL is a market leader in two-wheeler exports and it consists a great chunk ofthere overall revenues. Currently, BAL is selling over 1 lac motorcycles annually in SriLanka, further, they are commanding 50% market share in Central America.Projectsformba.blogspot.com pg. 35
Projectsformba.blogspot.com2.16 The Industry Analysis - Five Forces Analysis-BALExternal EnvironmentIndustry: Automobiles: Two WheelersSegments: Presence in all segmentsEntry Barriers:Entry barriers are high.E The market runs on high economies of scale and on high economies of scope.E The need for technical expertise is high.E Owning a strong distribution network is important and is very costly.All these make the barrier high enough to be a deterrent for new entrants.Supplier Bargaining Power:Suppliers of auto components are fragmented and are
extremely critical for this industry sincemost of the component work is outsourced. Proper supply chain management is a costly yetcritical need.Buyers Bargaining Power:Buyers in automobile market have more choice to choose from and the increasingcompetition is driving the bargaining power of customers uphill. With more models to choosefrom in almost all categories, the market forces have empowered the buyers to a large extent.Industry Rivalry:The industry rivalry is extremely high with any product being matched in a few months bycompetitor. This instinct of the industry is primarily driven by the technical capabilitiesacquired over years of gestation under the technical collaboration with international players.Substitutes:There is no perfect substitute to this industry. Also, if there is any substitute to a two-wheeler,Bajaj has presence in it. Cars, which again are a mode of transport, do never directly competeProjectsformba.blogspot.com pg. 36
Projectsformba.blogspot.comor come in consideration while selecting a two-wheeler, cycles do never even compete withthe low entry level moped for even this choice comes at a comparatively higher economicpotential.Summarizing the industry analysis, it can be said that the two-wheeler market is attractive asit scores well on three out of five categories2.17 Product & Advertising Strategies OF BALThe focus of BAL off late has been on providing the best of the class models at competitiveprices. Most of the Bajaj models come loaded with the latest features within the price bandacceptable by the market. BAL has been the pioneer in stretching competition into providinglatest features in the price segment by updating the low price bikes with the latest featureslike disk-brakes, anti-skid technology and dual suspension, etc.BAL adopted different marketing strategies for different models, few of them are discussedbelow: -Kawasaki 4S - First attempt by bajaj to make a mark in the motorcycle segment. The targetcustomer was the father in the family but the target audience of the commercial was the sonin the family. The time at which Kawasaki 4S was launched Hero Honda was the marketleader in fuel-efficient bikes and Yamaha in the performance bikes.The commercial of Kawasaki 4S had the punch line "Kyun Hero" means "now what hero"which reflected the aggressiveness in the marketing front by the company.Boxer - It took the reins from where the Kawasaki 4S left. Target was the rural populationand the price sensitive customer. Boxer marketed as a value for money bike with greatProjectsformba.blogspot.com pg. 37
Projectsformba.blogspot.commileage. Larger wheelbase, high ground clearance and high mileage were the selling factorsand it was in direct competition to Hero Honda Dawn and Suzuki MX100.Caliber - The focus for the Caliber 115 was youth. And though Bajaj made the bike lookbigger and feel more powerful than
its predecessor (characteristics that will attract theaverage, 25-plus, executive segment bike buyer), its approach towards advertising is evenmore radically different this time around. Bajaj gave the mandate for the ad campaign toLowe, picking them from the clique of three agencies that do promos for the company (theother two being Leo Burnett and O&M). Going by the initial market response, the campaignwas clearly a hit in the 5-10 years age bracket. So, the teaser campaign and the emphasis onthe Caliber 115 being a `Hoodibabaa bike placed it as a trendy motorcycle for the college-goers and the 25 plus executives both at the same time.Pulsar - Pulsar was launched in direct competition to the Hero Hondas CBZ model in 150cc plus segment. The campaign beared innovative punch line of "Definitely Male" positioningPulsar to be a masculine-looking model with an appeal to the performance sensitivecustomers. The Pulsar went one step ahead of Hero Hondas CBZ and launched a twinvariant of Pulsar with the 180 cc model. The model was a great success and has alreadycrossed 1 million mark in sales.Discover - The same DTSI technology of Pulsar extended to 125 cc Discover was a greatsuccess. With this, Bajaj could realize its success riding on the back of technologicalinnovation rather than the joint venture way followed by competitors to gain market share.2.18 Strategies & ImplementationFMCG Business ModelBAL now is taking a leaf out of the FMCG business model to take the company to greaterheights.Bajaj has kicked off a project to completely restructure the companys retail network andcreate multiple sales channels.Projectsformba.blogspot.com pg. 38
Projectsformba.blogspot.comOver the next few months, the company will set-up separate sales channels for every segmentof its business and consumers. Bajaj Autos entire product portfolio, from the entry-level tothe premium, is being sold by the same dealers. The restructuring will involve separate dealernetworks catering to the urban and rural markets as well as its three-wheeler and premiumbikes segments.Bajaj Auto also plans to set-up an independent network of dealers for the rural areas. Theneeds of financing, selling, distribution and even after-sales service are completely differentin the rural areas and do not makes sense for city dealers to control this. The company alsoplans to set-up exclusive dealerships for its three-wheeler products instead of having themsold through an estimated 300 of its existing dealers.2.19 Other Strategic IssuesCash is strength: Bajaj Auto has been sitting on a cash pile for over five years now. Over thenext couple of years, competition in the two-wheeler market is set to intensify. TVS Motorsand Hero Honda are on a product expansion binge. To fight this battle and retain its hard-earned market share in the motorcycle segment, Bajaj Auto will need its cash muscle. A lookat its own story over the past five years provides valuable insight.Delisting worry: What is worrying is that
there is an idea to delist the investment company(also an indirect indication that it would be listed initially). This would be closing the valve ofequitable ownership distribution.There is a hint of a buyback of shares of the investment company as this is the only way it canbe delisted. The company would not be short of cash to put through such a buyback.Factors such as low valuation, low trading interest and the need to provide shareholders maybe cited as plausible reasons for the buyback.Stake for Kawasaki: Bajaj Autos attempt to vest the surplus cash in a separate companymay be a prelude to offering a stake to Kawasaki of Japan in the equity of the automobilecompany. The latter has been playing an increasingly active role in Bajajs recent models, andits brand name is also more visible in Bajaj bikes than in the past.Projectsformba.blogspot.com pg. 39
Projectsformba.blogspot.comBetter value proposition: Shareholder interests may be better served if the cash is retained topursue growth in a tough market. This would also obviate the need to fork-out fancy sums asstamp duty to the government for the de-merger. A combination of a large one-time dividendand a regular buyback program through the tender route may offer better value. A strategicstake for Kawasaki would only positively influence the stocks valuation.2.20 Strategies for the Overseas MarketsBajaj Auto looks at external markets primarily with three strategies: -1) A market where all BAL need to do is distribute through CKD or CBU routes.2) Markets where BAL need to create new products.3) Markets where BAL need to enter with existing products and probably with a gooddistributor or a production facility or a joint venture.Earlier, most of the products that Bajaj exported were scooters and some motorcycles.However, in its target markets, like in India, the shift was towards motorcycles. With theexpansion in Bajajs own range to almost five-six platforms of motorcycles, it had a betteroffering to export, also the reason for its stronger showing. For the last fiscal, 60 per cent ofits exports were two-wheelers and the rest three-wheelers. Of the two-wheeler exports, closeto 90 per cent were motorcycles.Bajaj has identified certain key markets, which hold potential. Its first overseas officeestablished at the Jebel Ali free trade zone has been the focal point for exports to middleAfrica and the Saharan nations. Egypt and Iran also continue to be strong markets for Bajaj.The other market, which would be a focus area, is South America, where the company feels itis fairly well represented in most countries, except in Brazil, the largest market. The companyProjectsformba.blogspot.com pg. 40
Projectsformba.blogspot.comrecently participated in a large auto exhibition in Brazil and found good consumer acceptanceto products like Pulsar and Wind 125.The other focus area is the ASEAN
nations, which constitute the third biggest consumer oftwo-wheelers. The biggest among them is Indonesia, where Bajaj distributors are looking tointroduce eco-friendly four-stroke auto rickshaws. But two-wheeler market requires greatdeal of effort from BAL. Everybody is there with Honda leading the show. Theres Suzuki,Kawasaki and some Korean and Chinese models. BAL should look at the right product mixfor two-wheelers. Bajajs Pulsar model has taken off well there. It also wants to develop anew step-through model for the Indonesian market, but for now it will create a base therewith its motorcycle models.Bajaj has also made a beginning by selling bikes in the Philippines branded in the name of itstechnical partner, Kawasaki. The two signed an MoU in February. Kawasaki, a large multi-product conglomerate, only makes high-end bikes and does not have sub-200cc models.Kawasaki is marketing the new model, Wind 125, developed by both companies, in thePhilippines. The Bajaj-developed models, Caliber and Byk, which is a fuel-efficient bike, arealso being distributed by Kawasaki. This is a good beginning strategically for Kawasaki toevince interest in Bajaj products for markets which can still buy less than 150 cc.2.21 R&DBajaj Auto has a huge, extensive and very well-equipped Research and Development winggeared to meet two critical organizational goals: development of exciting new products thatanticipate and meet emerging customer needs in India and abroad, and development of eco-friendly automobile technologies.While the manpower strength of the R&D represents a cross-section of in-depth design andengineering expertise, the company has also been investing heavily in the latest, sophisticatedtechnologies to scale down product development lifecycles and enhance testing capabilitiesBajaj Auto R&D also enjoys access to the specialized expertise of leading internationaldesign and automobile engineering companies working in specific areas.Projectsformba.blogspot.com pg. 41
Projectsformba.blogspot.comBased on their own brand of globalization, they have built their distribution network over 60countries worldwide and multiplied the exports from 1% of total turnover in Fiscal 1989-90to over 5% in Fiscal 1996-97.The countries where their products have a large market are USA, Argentina, Colombia, Peru,Bangladesh, Sri Lanka, Italy, Sweden, Germany, Iran and Egypt. Bajaj leads Colombia with65% of the scooter market, in Uruguay with 30% of the motorcycle market and in Bangladeshwith 95% of the three-wheeler market.Several new models are being developed specifically for global markets and with these thecompany will progressively endeavor to establish its presence in Europe too.2.22 The FutureAlthough the avalanche of motorcycles offered Indian consumers a wide variety of models tochoose from, it also resulted in increased pressure on the
companies to concentrate on cost-cuts, technology enhancements and up-gradations and styling. Their margins came underpressure as marketing costs escalated.The companies were forced to reduce prices and offer discounts to survive the competition.Moreover, analysts were skeptical about the segments ability to maintain the growth rate inthe years to come. One of the major assumptions underlying the motorcycles rush was that ifthe market was considerably large and was growing at a constant pace, there was room for aprofitable existence for all brands.In 2001, there were over 30 motorcycle brands in the market. However, with the top fivebrands accounting for more than 60% of the market, only 40% of the market was availablefor all other new brands put together. Despite the launch of more vehicles, the survivalprospects of many of the individual brands were deemed to be rather bleak.Projectsformba.blogspot.com pg. 42
Projectsformba.blogspot.comFurther, the growth in the motorcycle segment was dependant on continuing favorable marketconditions. Analysts claimed that to sustain this growth rate, the segment would have tocompletely cannibalize the market for scooters and a considerable part of the market forscooters and mopeds.Considering the fast growing scooter segment, with high demand from female customers,followed by the moderately growing moped segment and the restructuring in the scootersegment with major national and foreign players reinforcing their presence, it was unlikelythat the entire growth in the two-wheeler sector would be due to motorcycles.Analysts also commented that as the two-wheeler industry had grown steadily for eight years,stages in the product life cycle would apply to the field sooner, rather than later and thedecline stage would invariably come some day. There was little differentiation between thebrands being launched apart from styling as most companies had introduced their four-strokevehicles.With the failure of the joint ventures, the expected introduction of cheaper Chinese brands,stringent emission norms and threat from major international players, the survival ofindigenous brands looked uncertain. Constrained with the ruling price levels in the marketplace, limited infrastructure and lack of technological innovations when compared to theirforeign counterparts, whether the Indian companies would succeed in generating the kind ofvolumes needed to sustain in the competitive motorcycle market, remains to be seen.2.23 New Strategies adopted by BajajMajor emphasis to be on new product launches.Have a new scooter market under development – will be launched early 2010.Plan to launch a three-wheeled motorcycle, to cater to a niche segment.Bajaj expects stronger growth in the first quarter of FY10 powered by the continuing success of theXCD 135 DTS-Si as also the launch of product upgrades off the Pulsar platformAs a result of the recent
stake hike by Bajaj Auto, KTM now has Rajiv Bajaj on its board and thecooperation agreement between the two companies covers product development, technology, vendorsourcing and distribution. Existing Products New Launchs in 2009Projectsformba.blogspot.com pg. 43
Projectsformba.blogspot.comBajaj Bajaj Kristal DTSi XCD 135 DTSi Pulsar XCD Sprint Discover 135 DTSi Discover 100 DTS-Si Platina 100, 125 DTSi Kawasaki Ninja 250R2.24 HONDA MOTORCYCLE & SCOOTER INDIA (Pvt.) Ltd.(HMSI) Honda is the worlds largest manufacturer of 2-wheelers. Its symbol, the Wings,represents the companys unwavering dedication in achieving goals that are unique and aboveall, conforming to international norms. These wings are now in India as Honda Motorcycle &Scooter India Pvt. Ltd. (HMSI), a wholly owned subsidiary of Honda Motor Company Ltd.,Japan. These wings are here to initiate a change and make a difference in the Indian 2-wheeler industry. Hondas dream for India is to not only manufacture 2-wheelers of globalquality, but also meet and exceed the expectations of Indian customers with outstanding aftersales support.2.25 About Honda Motorcycle & Scooter India Pvt. Ltd.Official Name Honda Motorcycle & Scooter India Pvt. Ltd.Projectsformba.blogspot.com pg. 44
Projectsformba.blogspot.comEstablished 20th Aug, 1999Place Manesar, District Gurgaon, Haryana, IndiaInvestment Rs. 300 CroreRepresentative Mr. Shinji Aoyama, President & CEOFactory Location Manesar, District Gurgaon, Haryana, IndiaProduction Capacity 10,000,00 Units per Year Hondas dream for India is to not only manufacture 2-wheelers of global quality; butalso meet and exceed the expectations of Indian customers with outstanding after salessupport. They aim to produce technologically superior, efficient and reasonably priced 2-wheelers, with Honda tested technology, backed up with after sales service of Hondas globalstandard.2.26 CORPORATE PROFILE Honda Motor Co., Ltd., operates under the basic principles of "Respect for theIndividual" and "The Three Joys"-commonly expressed as The Joy of Buying, The Joy ofSelling and The Joy of Creating. Respect for the Individual" reflects our desire to respect theunique character and ability of each individual person, trusting each other as equal partners inorder to do our best in every situation. Based on this foundation of Respect for the Individual,"The Three Joys" expresses our belief and desire that each person working in, or coming intocontact with our company, directly or through our products, should share a sense of joythrough that experience. In line with these basic principles, since its establishment in 1948, Honda Motor Co.,Ltd., has remained on the leading edge by creating new value by providing products of theProjectsformba.blogspot.com pg. 45
HMSI is the subsidiary company of Honda Motors Ltd. Which is the largest company in the proposed sectorProjectsformba.blogspot.com pg. 46 Honda having high tech engines Honda is the first company who introduced the technology of central shock absorption in India Honda have a big share of market in scootreats segment Affordable price Reliable brand name Projectsformba.blogspot.comhighest quality at a reasonable price, for worldwide customer satisfaction. In addition, theCompany has conducted its activities with a commitment to protecting the environment andenhancing safety in a mobile society. The Company has grown to become the worlds largest motorcycle manufacturer andone of the leading automakers. With a global network of 454* subsidiaries and affiliatesaccounted for under the equity method, Honda develops, manufactures and markets a widevariety of products ranging from small general-purpose engines and scooters to specialtysports cars, to earn the Company an outstanding reputation from customers worldwide.2.27 Mission Statement Maintaining a global viewpoint, we are dedicated to supplying products of the highestquality at a reasonable price for worldwide customer satisfaction.2.28 SWOT AnalysisStrength
Threat of cheap imported motorcycles and components from China2.29 PRODUCT RANGE: SCOOTERS: • DIOProjectsformba.blogspot.com pg. 47 There is high competition in the market Honda can be use brand image of Hero HondaThreats More maturity and movement towards higher-end motorcycles Untapped market above 180 cc in motorcycles. Increase in product range Maintenance cost is very highOpportunity Low product range Spares parts are not easily available Market share very less as compare to there competitor Less number of service center Projectsformba.blogspot.comWeakness
Projectsformba.blogspot.com • ACTIVA • AVIATOR MOTORCYCLES: • CB TWISTER • SHINE • CBF STUNNER • UNICORN • CBF STUNNER PGM FI • CB1000R • CBR1000RRFeatures of a few bikes from above mentioned list from HONDA are as follows.. Activa ACTIVA Manufacturer Honda Motors Ltd. Production 2004-present Price Rs. 40661 Engine 4-stroke, air cooled,7 bhp @ 7000 rpm,102 ccProjectsformba.blogspot.com pg. 48
Projectsformba.blogspot.com CB Twister CB TWISTER Manufacturer Honda Motors Ltd. Production 2010 ONWARDS Price Rs 48,000 Engine 110cc,9bhp@8000 CBF STUNNER PGM FI rpm,9Nm@6000rpm CBF STUNNER Manufacturer Honda Motors Ltd. PGM FI Production 2010 ONWARDS Price Rs
Projectsformba.blogspot.comThe automobile industry has seen an overwhelming growth in liberal India. Almost every bigmanufacturer has made its presence felt in the country. After the foreign direct investmentregulations were removed, many manufacturers saw India as a potential market. Most of theauto manufacturers were in collaboration with the Indian companies after ’91 till ’99, whenthe rules were changed; some of them still enjoy that. With many foreign manufacturerseyeing India as the market, the giants were no exception and most of them are already havingtheir manufacturing or assembling facilities in India. Honda was into the Indian two-wheelerindustry from 1983, when it joined hands with Hero to start Hero Honda and with Kinetic tostart Kinetic Honda. Honda broke the ties with Kinetic in ’99 and set up its own 100%subsidiary called Honda Motorcycle and Scooter India (HMSI) Pvt. Ltd.HMSI laid its foundation stone in Manesar, Haryana in the same year and also signed anagreement with Hero that it won’t manufacture motorcycles for the next five years i.e. till2004 as Hero Honda was not into the scooter segment at that time. This gave Honda a licenseto manufacture scooters at will and it did that by rolling out its first scooter, Activa in 2001and followed it with Dio in the same year. Honda now enjoys a large chunk of market sharein the scooter segment with Activa, Dio and now Aviator as its products. Honda introducedits first motorcycle, Unicorn in 2004 in the 150cc segment which was followed by Shine inthe 125cc segment in 2006 followed by Stunner in the same segment in 2008. All thesemotorcycles were highly appreciated and instant hits in the growing Indian market whichover these years was mainly dominated by Hero Honda and Bajaj Auto Ltd.The main rivals HMSI is countering are BAL, Hero Honda and TVS in the motorcyclesegment and TVS, Hero Honda and Mahindra Kinetic in the scooter segment. HMSI is themarket leader in the scooter segment and is yet to have a major share in the motorcyclesegment even though it is growing at 32.24% on a monthly basis.The bike segment has a market growth rate of 43% with HMSI having a share of 18% Thebiggest rival in this segment is HMSI’s sister concern Hero Honda with a share of 55%. Thescooter segment is having a growth rate of 32.24% and HMSI having a market share of57.7%. The nearest rival in this segment is TVS motors with a share of 18.7%.2.31 Strategy of rivals Vs HMSIIn 2007, out of every 100
two-wheelers sold in the country - only 12 were scooters. Thatnumber went up to 16 in the past financial year and is projected to zoom to almost 20 thisProjectsformba.blogspot.com pg. 51
Projectsformba.blogspot.comyear. There’s more: the scooter market grew in double digits last fiscal, outperforming thetwo-wheeler market, which grew 2.6 per cent in the same period. The golden days of theearly 80s, when scooters had a 64 per cent market share, are still far away. But the revivalsignals are strong.Scooter manufacturers said the 1.14 million-strong domestic market was expected to cross 2million units in the next four years. That explains the entry of a host of newer players in thesegment, such as Mahindra-Kinetic and Yamaha. Sensing competition, the establishedplayers — Honda, TVS Motors, Bajaj Auto, Hero Honda and Suzuki — have hit the drawingboard once again, to pull out flashy, high-powered and un-geared scooters.Scooter production stands at roughly 20% of the overall two-wheeler productionYear Two Wheelers Production (Bikes + scooters) 2002-03 5,076,221 2003-04 5,622,741 2004-05 6,529,829 2005-06 7,608,697 2006-07 8,466,666 2007-08 8,026,681 2008-09 8,418,626(http://www.siamindia.com/scripts/production-trend.aspx)HMSI has 55 per cent market share, followed by TVS Motors with 19 per cent and HeroHonda with 14.5 per cent and Bajaj managing a 11% market share. Sales Growth / Decline % Projected Market share % * Growth% HMSI 55 32.24% 18% TVS 19 14% 7 Bajaj 11 -12% NA* based on year on year comparison with sales in July 2008* Comparison of scooter sales.Projectsformba.blogspot.com pg. 52
Projectsformba.blogspot. The Company has entered the bikes market since 2004. This has led to a certain degree of cannibalism between Hero Honda The company would focus on gearless scooters in the future and with the launch of the new Activa, HMSI is looking at a total of 18% growth in its two-wheeler sales in the next fiscal, 2009-10. Honda to exit geared scooter segment in India, the Japanese two-wheeler major Honda will exit the geared scooter market in India and phase out its 150 cc model — Eterno — as the company plans to focus on the gearless segment. com2.32 Strategy of HMSI & Honda remains committed to its promise to deliver superior technology and performance, even though HMSI products are priced relatively higher than other companies in the market.2.34 Strategy adopted by TVS HMSI has a one-month waiting period for its new Activa (110 cc); six months before, it was just 10 days. Encouraged, it is ramping up its monthly production to 60,000 from 40,000 earlier. HMSI. However, Honda motor company stands to gain out of either company’s success. & Bajaj for increasing sales and counteringgrowth of HMSIMost companies currently produce
scooters in the 100-125cc range that are targeted atcustomers who want higher mileage and are ready to compromise on power. Generally, anentry-level bike (100cc) is more powerful and economical than a gearless scooter.To counter this, companies are working on scooter models that generate higher power withoutundermining the fuel economy. The result will be a product that matches the performance ofmotorcycles while being more comfortable, agile and easy on the pocket.They also aim at developing E- scootersProjectsformba.blogspot.com pg. 53
The country’s second largest bike maker, Bajaj Auto, is also developing a completely new, un-geared, scooter. To be launched in 2011, it is aimed at taking on the products of HMSI. This product will be high on power output, like the company’s current bike range, but will not sacrifice on fuel economy.2.35 Review of strategies adopted by HondaThe first bike launched by Honda, Unicorn was launched in the existing 150cc segmentwhich was mainly dominated by Pulsar series and later TVS Apache also chipped in withinthe competition. Same was the case with Shine, its second bike in the 125cc segment. Afterthis, Honda slightly moved away from convention by adopting a new strategy ofsegmentation by creating a segment within two existing segments. In 2008, Honda launched a125cc Stunner CBF intended for not the conventional 125cc segment but just between 125ccand 150cc segment. Honda did not compromise on the feature rich and technologically soundproduct and not on the price either. The price of this bike was 50-60 thousand, thusovercoming the price void between the 150cc and 125cc bikes. The competitors sell their125cc bikes at 40-50 thousand while the price of 150cc segment starts somewhere around 60thousand. This pricing strategy of Honda has paid well and now they are planning topenetrate the gap between the existing 100cc and 125cc segments by launching a new featureladen and technologically sound 100cc bike. Again Honda has clearly announced that theprice of this bike won’t be in the conventional 100cc range but slightly more than that. SBU Market Market Share Market Share Relative Quadrant Growth Rate Of Nearest Market Share RivalProjectsformba.blogspot.com pg. 54 Chennai-based TVS Motors, makers of Scooty, are developing a premium un-geared scooter that will be more powerful and superior on design and styling. The company is learnt to have developed a new platform, much more powerful than the 90cc Scooty. Projectsformba.blogspot.com
Projectsformba.blogspot.com 3.1 RESEARCH DESIGN3.2 STATEMENT OF PROBLEM One of the major problem is the negative growth being faced by companies in the two wheeler industry. The two wheeler industry has been shrinking continuously. From a peak of over 40% growth in 2002 it is currently facing a growth of -12% in the second quarter of 2008. Exhibit shows the recent trends.Projectsformba.blogspot.com pg. 58
Projectsformba.blogspot.com The above exhibit shows the De-growth in the industry.3.3 HYPOTHESISProjectsformba.blogspot.com pg. 59
Projectsformba.blogspot.comNull Hypothesis, H0 : There is a negative growth in the two wheeler industryAlternative Hypothesis, H1: There is no negative growth in the two wheeler industry.3.4 AIMS AND OBJECTIVES • To study and compare the top three companies HERO HONDA,BAJAJ,& HMSI • To compare and analyze the product strategies of these three companies. • To find out the reasons for change in growth of two wheeler industry.3.5 SAMPLING TECHNIQUENon-probability sampling technique Convenience Sampling was used for collecting datafrom the consumers for the survey.3.6 SAMPLE UNIT Sample units are nothing but the respondents covered during the process of collecting data for the purpose of research. The sampling units consisted of people who own a two wheeler.3.7 SAMPLE SIZEProjectsformba.blogspot.com pg. 60
Projectsformba.blogspot.comThe sample size is the total number count of the number of total respondents covered for theresearch purposes.Total sample size =100Male – 88Female- 123.8 STATISTICAL DESIGN The data was collected and complied in Microsoft Excel and is analyzed using graphs and pie charts.3.9 PRIMARY DATA Primary data was collected through the administration of questionnaires to the sample units and conducting a pilot study to ascertain the worth of the questionnaire. • Questionnaire Design • Questionnaire Administration • Scoring Procedure • Pilot studyProjectsformba.blogspot.com pg. 61
Projectsformba.blogspot.com3.10 SECONDARY DATA Secondary data would be collected from internet, industry journals and magazines. This information and the previous research papers will
help in designing the questionnaires and various attributes on which the companies are to be assessed. The company dealers also provided valuable information.3.11 LIMITATIONS OF STUDY • Owing to the huge population size (sampling universe) spanning throughout the country, it becomes almost impossible to cover all the places in the given scope of study. • The results thus obtained are just an overview of the areas and companies covered. • The data gathered and the results interpreted are what was done in a time frame of 6 months and hence may not reveal the depth of the situation. • For the ease of analysis, percentage of respondents using the products was considered as the market share of the particular product in that category. • This dissertation is confined on the basis of more secondary data collected only hence it is not very much a reliable data for the study.Projectsformba.blogspot.com pg. 62
Projectsformba.blogspot.com 4.1 RESPONDENT’S PROFILE4.2 SEX TABLE 3: SEX OF RESPONDENTS SEX NUMBER OF PERCENTAGE OF RESPONDENTS RESPONDENTS(%) Male 88 88 Female 12 12Projectsformba.blogspot.com pg. 64
Projectsformba.blogspot.com 88 males and 12 females were covered during the survey.Hence 88% of the respondents were males and the rest 12% were females.4.3 MARITAL STATUS MARITAL STATUS OF RESPONDENTS MARITAL STATUS NUMBER OF PERCENTAGE OF RESPONDENTS RESPONDENTS(%) Unmarried 70 70 Married 30 30Projectsformba.blogspot.com pg. 65
Projectsformba.blogspot.com MARITAL STATUS MARRIED 30% SINGLE 70% Out of the total respondents ,70% were single,30% were married and separated factor was not taken into account.4.4 OCCUPATION OCCUPATION OF RESPONDENTS OCCUPATION NUMBER OF PERCENTAGE OF RESPONDENTS RESPONDENTS STUDENTS 68 68 SELF EMPLOYED 20 20 WORKING 12 12Projectsformba.blogspot.com pg. 66
Projectsformba.blogspot.com Among the 100 people surveyed ,68% were students,20% were self-employed and remaining 12% belonged to working class like office goers, clerks etc.4.5 AGEProjectsformba.blogspot.com pg. 67
Projectsformba.blogspot.comAGE GROUP NUMBER OF PERCENTAGE OF RESPONDENTS RESPONDENTS18-22 10 10%22-25 60 60%25-30 20 20%>30 10 10% AGE 18 - 22 10% > 30 10% 25 - 30 20% 22 - 25 60% Of the 100 respondents, 60% belonged to 22-25 age group,20% to 25 -30 group,10% to18-22
group and the remaining 10% to more than 30 age group.Projectsformba.blogspot.com pg. 68
Projectsformba.blogspot.com4.6 INCOME MONTHLY NUMBER OF PERCENTAGE OF INCOME(IN RESPONDENTS RESPONDENTS 000’S)RS. <20 30 30% 20-30 55 55% 30-40 10 10% >40 5 5% 30% of the total respondents earn less than Rs. 20,000 per month,55% of the respondents earn Rs. 20,000-30,000 per month,10% of the respondents earn Rs .30,000-40,000 per month and 5% of respondents earn more than Rs. 40,000 per month.Projectsformba.blogspot.com pg. 69
Projectsformba.blogspot.com 5.1 DATA ANALYSIS5.2 OWNERSHIP OF TWO WHEELER YES 80% NO 20%Projectsformba.blogspot.com pg. 71
Projectsformba.blogspot.com ANALYSIS: 80% of the respondents own a two wheeler and 20 % of them do not have one. INTERPRETATION: Since majority of my respondents are students from colleges, they own two wheelers for daily commutation. Each one of them own different brands according to the taste and preferences of the two wheelers available in the market. The most common brands are Hero Honda, Bajaj, Honda.TVS etc.5.3 MOST VIEWED ADSHERO HONDA 50%BAJAJ 40%HMSI 10%Projectsformba.blogspot.com pg. 72
Projectsformba.blogspot.com MOST VIEWED ADS HERO HONDA, 50 50 45 BAJAJ, 40 40 35 30 25 20 15 HMSI, 10 10 5 0 HERO HONDA HMSI BAJAJ ANALYSIS: The viewership rate of ads among respondents is highest for Hero Honda with 50%,then comes Bajaj with 40% and Honda with 10%. INTERPRETATION: Hero Honda and Bajaj being the long term rivals compete each other to capture the market share. Hence if one of them comes with an effective ad, the other will surely try to better it. In case of Honda it’s a late entry into the Indian market and it’s growing.5.4 MOST INFLUENTIAL ADS HERO HONDA 35% BAJAJ 55% HMSI 10%Projectsformba.blogspot.com pg. 73
Projectsformba.blogspot.com ANALYSIS: In terms of influence of ads on the respondents, Bajaj comes with 55% , then Hero Honda with 35% and Honda 10%. INTERPRETATION: Bajaj comes with ads that has more adrenalin rush specially targeting the youth and majority of them get inspired by the same. Hero Honda mainly depends on celebrities to influence the viewers. Honda mainly focuses on the international reputation of brand name they have built
for themselves. 5.5 BEST RECALLED ADSProjectsformba.blogspot.com pg. 74
Projectsformba.blogspot.com ANALYSIS: In terms of recall ,50% of respondents were for Bajaj stunt ad, then 35% were for Hero Honda KARIZMA ad with Hrithik roshan as brand ambassador. INTERPRETATION: Bajaj came with stunt ads so that it may attract the youth,and they positions their bike mainly high performing, aggressive, reliable. Hero Honda comes with the fan base of its brand ambassador who very well connects with the features of the bike .Very few recalled Honda bike ads as they were very stereotyped ads.5.6 MOST COMMON SOURCE OF ADSTV 18%NEWSPAPER/MAGAZINES 70%Projectsformba.blogspot.com pg. 75
Projectsformba.blogspot.comBILLBOARDS 5%INTERNET 7%ANALYSIS:Among the common source of ads, newspaper and magazines are marked by 70% ofrespondents, TV by 18% ,Internet by 7% and Billboards by 5%.INTERPERTATION:Newspaper and magazines comes with a lot of information related to bikes and it is a majorsource. Latest trend of internet penetration also brings in ads on bikes ,mainly through socialnetworking sites, during online matches, events etc.5.7 SOURCE OF RELIABLE INFORMATION FOR PURCHASEDECISIONS FRIENDS 5%Projectsformba.blogspot.com pg. 76
Projectsformba.blogspot.com INTERNET 65% AUTOMOTIVE 10% MAGAZINES COMPANY 20% DEALERS ANALYSIS: Out of 100 respondents ,65% found internet as a good source of reliable information,then with company dealers 20%,automotive magazines 10%,friends 5%. INTERPRETATION: The various web sites on the net provide valuable information regarding the bikes. With the availability of net, people can browse about any information about anyProjectsformba.blogspot.com pg. 77
Projectsformba.blogspot.com model before going to any dealer. Company dealers provide specific information and in depth about a particular model. The rest is from friends and auto magazines.5.8 FACTORS WHICH MOTIVATE PURCHASING DECISION. DISCOUNT RATE 30% EMI 45% RESALE VALUE 12% ALLOWANCES 8% OTHERS 3%Projectsformba.blogspot.com pg. 78
Projectsformba.blogspot.com ANALYSIS: EMI is one of the major motivating factor with 45% liking it,then comes discount rate 30%,resale value 12%,allowances 8%,and others 3% INTERPRETATION: EMI comes with a great motivational factor in
purchasing a bike. It is less risky ,and affordable way of purchasing. Discount rate normally comes during festival seasons where maximum sales happen. Resale value has few effects on certain branded bike purchases.5.9 PREFERRED PRICE RANGE(in 000’s) 30-40 5% 40-50 5% 50-60 13% 60-70 65% 70-80 10%Projectsformba.blogspot.com pg. 79
Projectsformba.blogspot.com >80 2% ANALYSIS: The most preferred price range is 60-70 with 65% going for this option.13% for 50-60, 10%for 70 to 80, 5% each for 30-40 & 40-50.and 2% for more than Rs.80,000. INTERPRETATION: Most of the performance, value segment bikes falls in the 60-70 price category, and there is huge competition among the major players. Then the preferred ones are high performance bikes in the >Rs. 70,000 and medium performance and high efficient ones in the <Rs.60,000 category .Projectsformba.blogspot.com pg. 80
Projectsformba.blogspot.com5.10 RATING FOR VARIOUS FACTORS(1 LEAST PREFERRED AND7 MOST PREFERRED)Projectsformba.blogspot.com pg. 81
Projectsformba.blogspot.com ANALYSIS: In this the most preferred factor is performance with 75% going for it. Then comes service and support and fuel efficiency with 90% and 70% in terms of preferences. This is followed by price and brand value of the bike. INTERPRETATION: Performance is one factor which most of the people specially youth look upon in a two wheeler. Also the companies have come upon with a segment of this category andProjectsformba.blogspot.com pg. 82
Projectsformba.blogspot.com have developed bikes based on this. The customers also look into the after sales and support the company offer when going for a two wheeler. Hence the service offered is of prime importance. The price is an important factor for medium segment people that is below Rs.60,000 as they try to balance price as well as efficiency of two-wheeler. Brand value plays a major role for loyal customers for eg. A person buys only HONDA, because its one of the internationally trusted brands.5.11 IS CROSSCHECKING DONE? YES 20% NO 80%Projectsformba.blogspot.com pg. 83
Projectsformba.blogspot.com ANALYSIS: Only 20% say that they do cross checking of what they see in the commercial,80% do not do it INTERPRETATION: Most of the viewers see the ads and get some information regarding it with very few doing crosschecking about what really is behind the scenes.Projectsformba.blogspot.com pg. 84
Projectsformba.blogspot.com 6.1 DEMAND AND GROWTH DRIVERSProjectsformba.blogspot.com pg. 85
Projectsformba.blogspot.comThe following factors play a major role in increasing the demand for two wheelers in India.Personal Income, demography and penetration level are key growth drivers in the twowheeler industry.Personal IncomeDemand increases as the income increases, only to be substituted later by the demand for fourwheelers. Income has been steadily growing in India and is projected to stabilise at a growthrate of 9-12 percent range by 2012.Demography and InspirationThe bigger the young and working population, the greater is its need for commutation. The ITand BPO revolution has influenced this movement. This is a favourable factor since Indianworkforce is young.Penetration LevelThe lower the penetration levels in the market, the better the scope for future demand. As thepenetration of the rural market is significantly low, it is going to be a significant long termgrowth driver.Other FactorsImprovement in infrastructure increases competition, while simultaneously improving thepublic transport. The average time period taken to replace an existing bike with a newermodel has decreased from 7 years to 5 years, resulting in replacement demand growth.Projectsformba.blogspot.com pg. 86
Projectsformba.blogspot.com 7.1 FINDINGSThe major findings during the data collection and analysis time can be summed up as follows:Projectsformba.blogspot.com pg. 87
Projectsformba.blogspot.com • Interest rates are one of the prime reasons for the sharp fall in demand. Many banks have increased interest rates which make two wheelers costlier. • Difficulty in availing loans, rising defaults, tightening of loan recovery laws and various other factors have dissuaded consumers from availing loans and led to further problems in credit lending. • Increasing oil prices have deterred many lower middle class families from buying two wheelers. • Introduction of low priced cars will directly affect the market. The family segment would want to gradually move from two wheelers to four wheelers. The major impact of this phenomenon would be experienced in the 100-125 cc two wheelers whereas the performance segment i.e. > 125cc will continue to grow strongly. • With the introduction of the Bharat-4 norms, it will be more challenging to meet these stringent norms whilst simultaneously offering competitive prices. In spite of these factors, demand drivers are present for the foreseeable future and are favourable for the two wheeler industry. However, to capture this growth, any player will have to correctly position itself to appeal to the consumer.Projectsformba.blogspot.com pg. 88
Projectsformba.blogspot.com 8.1 HYPOTHESIS TESTINGNull Hypothesis, H0 : There is a negative growth in the two wheeler industryAlternative Hypothesis, H1: There is no negative growth in the two wheeler industry.Projectsformba.blogspot.com pg. 89
Projectsformba.blogspot.comPARAMETERS TO TEST HYPOTHESISSince the hypothesis is stated in absolute subjective terms, there was a requirement to convertthis subjectivity into objectivity to arrive at a stage for testing the hypothesis. For performingthis task, 7 product categories were selected and the companies were tried on the grounds of: • Availability of product • Number of customer complaints • Dealers satisfaction level • Areas of operation and design of distribution channels • Hold on the market share Hence the companies were tested on these basis and hence the results were compiled according to the respective product categories itself.RESULT OF HYPOTHESIS TESTINGThe overall research and analysis of the two wheeler companies across these 7 categories ledto the following result: • Null hypothesis is accepted for the product categories of 100cc and 125cc segment as there is intense competition from fuel efficient small cars in India. • Null hypothesis does not hold true for product categories like 135cc,150cc,180cc,220cc.Since the null hypothesis does not hold true in majority of the product categories and hencethe null hypothesis is not valid and hence, NULL HYPOTHESIS IS NOT PROVED. InIndian markets for majority of the two wheeler product categories, Foreign companies havestreamlined their operations and distribution channels in a much more effective way ensuringhigher availability of their goods in the market in pan-India.Projectsformba.blogspot.com pg. 90
Projectsformba.blogspot.com 9.1 RECOMMENDATIONSThe following recommendations are:Projectsformba.blogspot.com pg. 91
Projectsformba.blogspot.com • The two wheeler companies should focus on gearless scooters. The market share of gearless scooters is increasing at a healthy rate. Bajaj is virtually absent in this range that caters to the needs of women and families. Presently Honda, Hero Honda and TVS are big players in this segment. • Entry into four wheeler segment Bajaj has entered into a joint venture with Renault-Nissan in the development of a small car priced at $3000. This is a significant move because it directly competes with Tata NANO. Bajaj has also displayed its small car prototype in the recently held auto expo. It promises double the mileage as compared to any car in the economy segment and is also considering the option of introducing Diesel and LPG variants. The four wheeler segment will also be able to hedge any risk that might arise because of the two wheeler industry and would profit from retaining consumers
switching from two wheelers. • Scaling Up Service Centers Companies need to scale up its service centers both in numbers and in capacity. Keeping in line with its growth target for the next 5 years, the service centers should not only cater to two wheelers but should also be upgraded to cater to the needs of four wheelers that companies plans to launch. • Focus on Easy Credit Lending • Investment in Research and Development • Focus on Exports and Global MarketProjectsformba.blogspot.com pg. 92
Projectsformba.blogspot.com 10.1 LEARNINGSI had some major learnings while working on this research project which can be summarizedas follows:Projectsformba.blogspot.com pg. 93
Projectsformba.blogspot.com • Dream High because that will help you to Achieve Big. • Systematic Planning is the essence for the project. • Making realistic time frame and following them is mandatory. • Data Collection requires a lot of patience and follow up. It requires meticulous research to select the right sample for research. • Secondary data collection is also an important task and one must be aware which source is completely authentic and reliable. • SMART
A project report on measuring customer satisfaction level and sales promotion in yamaha — Document Transcript
1. Projectsformba.blogspot.com SUMMER TRAINING PROJECT REPORT ON
“MEASURING CUSTOMER SATISFACTION LEVEL” AND “SALES PROMOTION”
IN YAMAHA AT LAKHIMPUR and UNNAOSUBMITTED IN THE PARTIAL
FULFILLMENT FOR THE REQUIREMENT OF MBA DEGREE SUBMITTED TO: