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1. INTRODUCTION TO THE PROJECT The project is all about measuring the customer satisfaction in Hero motors. For the past few years every company is trying to satisfy its customers. The emphasis is on ways of retaining customers, then on attracting new customers. It is easy to attract new customers then to retain old customers. So, companies are trying to focus on this aspect of customer’s satisfaction. The sale of a product does not end with the sale transaction but it is the point at which the original marketing concept starts. The marketer has to see that whether the customer satisfied with that particular product/service or not. The post purchase behavior is important for a marketer. If there is any cognitive dissonance in the minds of the customers then Page 1 Garden City College of Science & Management Studies
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Customer satisfaction on Hero Motocop Ltd after split with Honda

Sep 09, 2014

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Marketing

David Franclin

 
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Page 1: Customer satisfaction on Hero Motocop Ltd after split with Honda

1. INTRODUCTION TO THE PROJECT

The project is all about measuring the customer satisfaction in Hero motors. For the past

few years every company is trying to satisfy its customers. The emphasis is on ways of

retaining customers, then on attracting new customers. It is easy to attract new customers then

to retain old customers. So, companies are trying to focus on this aspect of customer’s

satisfaction.

The sale of a product does not end with the sale transaction but it is the point at which

the original marketing concept starts. The marketer has to see that whether the customer

satisfied with that particular product/service or not. The post purchase behavior is important for

a marketer. If there is any cognitive dissonance in the minds of the customers then that is

enough to lose a customer. Keeping this in mind the companies are giving more importance to

customer satisfaction.

This project work has been done to find out whether a customer is satisfied or

dissatisfied, also to measure the level of the customer satisfaction and provide this feedback to

the company. The first phase of the project involves the collection of information from the

customers for interpreting the characteristics based on which the customer feels satisfied or

dissatisfied. This information is collected by preparing a structured questionnaire. The

questionnaire consists of both open-ended and closed-ended questions. The questionnaire is

designed in such a way that a customer feels convenient to answer.

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The collated information through the questionnaire is analyzed and presented in a

statistical form. The findings are listed and suggestions to solve problems faced have been

given in the suggestion part.

INTRODUCTION TO CUSTOMER SATISFACTION

Whether the buyer is satisfied after purchase depends on the offers performance

in relation to the buyer expectation. In general satisfaction are a person’s feelings of pleasure

or disappointment resulting from comparing a products perceived performance relation to

his/her expectations. If the performance falls short of expectation, the customer is dissatisfied.

If the performance matches the expectation customer is satisfied. If the performance exceeds

the expectation the customer is highly satisfied.

Customer satisfaction cannot be very difficult. After all you either satisfied with

the services you receive or you are not. If you don’t you are not. If it is that easy, then obtaining

people's opinion about how satisfied they are with relatively straight forward matter- or is it?

Customer satisfaction is a marketing tool and a definite value added benefit. It is often

perceived by customers as important as the primary product or service your organization offers.

It looks at what is involved from 3 different angles, the first is from the view of an organization

wishing to understand, and measures, how satisfied its customer are with the products and

services they receive from it. The second is from the perspective of a research agency that has

been asked to obtain feedback from customers and about their experiences when dealing with

companies. Finally it considers the issue from the perspective of consumers who participate in

surveys, including both business customers and members of general public

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MEANING OF CUSTOMER SATISFICATION

Customer satisfaction is a business term, is a measure of how products and services

supplied by a company meet or surpass customer expectation. It is seen as a key performance

indicator within business and part of the four prospective of balanced score card.

In a competitive market place were businesses compete for customers, customer

satisfaction is seen as a key differentiator and increasingly has become a key element of

business strategy customer satisfaction drives successful private sector business.

High performing businesses have developed principles and strategies for achieving

customer satisfaction. This paper presents a framework or set of ideas for using customer

satisfaction principles and strategies to improve the quality responsiveness, and possibility of

public sector privately provided services in vulnerable communities

The framework suggested that resident who live in tough neighborhoods can be supported

through customer satisfaction strategies to become empowered individuals who informed

perspectives influence decisions about what, how, when, and where services are available to

them.

Customer satisfaction is the customer’s response to the evaluation of the perceived

discrepancy between prior expectation and the actual performance of the product as perceived

after its consumption.

DEFINITION

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Cocotte, woodruff and Jenkins (1987) define customer satisfaction as "conceptualized as a

feeling developed from an evaluation of the experience."

HERE, the timing of satisfaction response is driving consumption.

BUT there is general agreement with kotler (2003) that "customer satisfaction is a

person's feeling of pleasure or disappointment resulting from comparing a products perceived

performance in relation to his or her expectation." In short customer satisfaction is "The

provision of goods or services which fulfill the customer expectation in terms of quality and

service, in relation to price paid."

IMPORTANCE OF CUSTOMER SATISFACTION

It costs at least 7 times more to source a new customer than it does to retain existing

one a 'satisfied' customer tells 5-7 people in a year whilst a 'dissatisfied' customer will tell 14-15

people.

Companies can boost profits anywhere from 25% to 125% by retaining a mere 5%

more of their exciting customers.

Totally satisfied customers were 6 times more likely to use that services and commend

it than ' satisfied' customers.

Customers who have a bad experience with you and do not complain are only 37%

likely to still do business with you.

Customers who have an opportunity to complain and the complaint is achieved are

95% likely to still do business with you.

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FACTORS OF CUSTOMER SATISFACTION

1. Service of quality

2. reliability of service

3. knowledge of the staff

4. Being kept informed of progress

5. The way service kept its promises

6. The way the service handled any problem Friendliness of staff

7. How sympathetic staff were to your needs

8. Speed of enquiries

9. Number of time had to contact the service.

2. REVIEW OF LITERATURE

Planning for the future to achieve the long-term objective is integral to the

survival and growth of every business. Strategic planning today has to take into cognizance

the rapid changes in technology, increased competitiveness and the turbulent business

environment, also with the world becoming one big global village.

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Strategy covers every aspect of business from business reengineering, new business

development, product development and brand positioning to advertisements promotional

campaigns, media and publicity. It is a game of innovation.

In fact, marketing people are involved in marketing 10 types of entities; goods,

services, experience, events, persons, places, properties, organizations, information and ideas.

Marketing management is the art and science of choosing target markets and getting, keeping

and growing customers through creating, delivering and communicating superior customer

value.

India is second largest manufacturer and producer of two-wheelers in the world. It

stands next to Japan and China in terms of the number of two wheelers produced and

domestic sales respectively.

Indian two-wheelers industry made small beginning in early 50’s when Automobile

products of India (API) started manufacturing scooter in India. Hero was established on 13 th of

April 1984. The Indian two wheelers Industry can be broadly classified as scooter, motorcycles

and mopeds/scooters. In last six years domestic two-wheelers has seen structural charges.

This can be seen from the change in composition of two wheeler sales, where the motorcycles

have gained market share from the scooter and moped or scooters segments.

The consumer is now faced with proliferation of brand models. Getting new customers as well

as retaining them is an important task of manufacturers. So service after sales is very

important. A satisfied customer brings in more name and goodwill to the company, which is

why customer satisfaction is given more importance in today’s competitive world. A study on

this aspect with Hero two-wheelers at Hero MotoCorp Ltd was made.

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STATEMENT OF THE PROBLEM

This Project has been titled “A comprehensive study Post purchase buyer behavior and

satisfaction towards Hero Motors Bikes after the split with Honda."

To study the new market of Hero motors after the split with Honda, the consumer response to

the bike and needed improvement aria

The study would help to understand the consumer satisfaction to their expectation.

OBJECTIVES

This study was conducted keeping the following objectives in mind.

1. To study the factors which influence the purchase of Hero two-wheelers?

2. To know the customer level of awareness of Hero two-wheelers.

3. To know the various factors, which influence customers in purchasing, they’re two -

wheelers?

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

5. To know the customer level of satisfaction of Hero two-wheelers with respect to Hero

MotoCorp Ltd.

6. To find the profile of Hero MotoCorp Ltd two-wheeler customers.

7. To understand two wheeler sector in India.

8. How the split with Honda has affected Hero motors.

SCOPE OF THE STUDY

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This study helps the organizations to increase their service and product quality and

in turn increase the market share, top and bottom line of the company.

LIMITATIONS

I have observed the following limitations in the course of my study.

1. The areas which were selected were limited only to Bangalore i.e., the findings are regional

and do not represent the state or country.

2. Time constraints hampered the study.

3. Since the study involved in gathering information was from upper to higher-middle class

people, interaction with them became difficult.

4. There may be respondent’s bias.

5. Even though utmost care has been taken in conducting the survey, the findings may

sometimes differ from the population.

6. The study is conducted of academic nature

7. The split happened 1 year before, the study not giving the long run result of Hero Motors

Bikes

NEED FOR THE STUDY

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Marketing starts with identifying the needs of customers and ends in satisfying those

wants. The goal of marketing is to attract new customers by promising superior value and to

keep current customers by delivering satisfaction based on their preferences retaining them.

Without customer, no market exists. As the customers are regarded as the superiors

in today’s market, the level of satisfaction and their preferences should be keenly studied.

The two-wheeler industry has been expanding rapidly. Gone are the days when

possessing a two-wheeler was seen as a luxury. Now days, it is viewed as a mere necessity.

Prior, sale of two-wheelers was mainly confined to urban areas but lately in rural areas

the bicycles are being replaced by power driven two-wheelers such as scooters, motorcycles.

Not only this, this industry has also customers ranging from all demographic segments.

It has been common sights that even school going children are driving two-wheelers. The

women customers are also increasing due to increase in women literacy and employment.

Getting a new customer is difficult, than retaining a current customer is a more difficult

one and not only that it is estimated that the cost of attracting a new customer is five times the

cost of retaining current customer. It requires a great deal of effort to induce satisfied customer

to switch away from their current preference. Thus, customer satisfaction is been given top

priority in today’s competitive world.

Therefore, keeping the above stated objective in mind, this study was conducted to ascertain

the customer’s satisfaction towards Hero two-wheelers in Hero MotoCorp Ltd. In view of this, a

detailed study of customer preferences, levels of satisfaction and their complaints and

suggestions was undertaken.

METHODOLOGY OF THE STUDY

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The information required for this study obtained was basically through two sources.

Primary Data:

Primary Data has been gathered by a survey through a structured questionnaire.

The Data has been collected from 100 customers, through questionnaires, by using

simple random sampling. In addition interaction with the staff of Hero MotoCorp Ltd has also

given some information.

Secondary Data:

Secondary Data comprises of information obtained from annual reports, brochures,

manuals websites etc.

3. INDUSTRY PROFILE

The Indian two-wheeler contributes the largest volume amongst all the segments in automobile

industry. Though the segment can be broadly categorized into 3 sub-segments viz. scooters,

motorcycles and mopeds; some categories introduced in the market are a combination of two

or more segments e.g. scooters and step-thru. The market primarily comprises five players in

the two-wheelers segment with the most of the companies having foreign collaboration with

well-known Japanese firms earlier. But most of the companies are now planning 100%

subsidiaries in India. and growth anticipated is higher than the 16 percent achieved in the past

10 years

The automobiles sector is divided into four segments-two wheelers(mopeds, scooters,

motorcycles, electric two-wheelers), passenger vehicles (passenger cars, utility vehicles, multi-

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purpose vehicles), commercial vehicles (light and medium-heavy vehicles), and three wheelers

(passenger carriers and good carriers).

The industry is one of the key drivers of economic growth of the nation. Since the globalization

of the sector in 1991 and the subsequent opening up of 100 percent FDI through automatic

route, Indian automobile sector has come a long way. Today, almost every global auto major

has set up facilities in the country.

The world standings for the Indian automobile sector, as per the Confederation of Indian

Industry, are as follows:

Largest three-wheeler market

Second largest tow-wheeler market

Tenth largest passenger car market

Fourth largest tractor market

Fifth largest commercial vehicle market

Fifth largest bus and truck segment

The sector has shown a sluggish growth of 12 percent in 2012. The trend is likely to stay with a 10

percent growth outlined for 2013 citing high ownership costs (fuel costs, cost of registration, excise duty,

road tax) and slow rural income growth. Solid but cautious growth is expected over the next few years.

However, from a long-term perspective, rising incomes, improved affordability and untapped markets

present promising opportunities for automobile manufactures in India. According to Macquarie equities

research, sale of passenger vehicles is expected to double in the next four years

Two Wheeler & its role in Indian Context:

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As the cities grow & suburbs expand, transportation needs becoming more & more

acute, with mounting pressure on its public transportation for which two wheelers are ideal.

The two-wheeler Industry today has a significant role in the Indian economy, with an

annual turnover of Rs. 9000 crores and compounded average growth of 10%. In recent years,

it is of the few industrial sectors in the growth phase today considers personal transportation as

one of the basic needs.

The two-wheeler industry basically comprises mopeds, scooters, scooters and

motorcycles. Mopeds are basic entry-level products aimed at lower/middle income groups,

offering company. This category dominated by TVS SUZUKI, which has a market share of

50% today. The other major players in this segment include KINETIC ENGG., HERO MOTORS

and BAJAJ AUTO.

Scooters, which found largest segment in the industry (37 percent) is dominated by

BAJAJ AUTO. It is however facing stiff competition from LML, which offers better style and

technology to the Indian customers. However, dominance of this category has been declining

because of shift in the customer preferences.

Major part of the growth in the two-wheeler industry has come from motorcycle

especially, the Indo-Japanese 100cc motorcycles, which are considered, fuel efficient, reliable

and suited for rough roads.

Scooters also growing at a fast phase and are being increasingly perceived as a better

option providing convenience and motor style, by urban customers. In this category, TVS

Scooty holds a dominant market share.

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With sales of over three million vehicles, India is the second largest two-wheeler

market in the world. Vehicle has become a necessity for day-to-day busy life, with the

accelerated industrial and business activity in a liberalized environment. However, given the

limited purchasing power and to high cost of cars, majority of the middle class vehicle users

prefer two wheelers.

With sales of over million vehicles, India is the second largest two-wheelers market in

the world. China is the market leader with around 51 percent of the Asia Market, India,

Thailand; Indonesia & Taiwan are the other key markets for two-wheelers with market share of

19 percent, 10 percent, 9 percent and 5 percent respectively.

In the last four to five years, the two-wheeler market has witnessed a market shift

towards motorcycles at the expense of scooters. In the rural areas, consumers have come to

prefer sturdier bikes to withstand the bad road conditions. In the process the share of

motorcycle segment has grown from 48% to 58%, the share of scooters declined drastically

from 33% to 25%, while that of mopeds declined by 2% from 19% to 17% during the year 2000-

01. The Euro emission norms effective from April 2000 led to the existing players in the two-

stroke segment to install catalytic converters. 4-stroke motorcycles are now replacing all the

new models. Excise duty on motorcycles has been reduced from 32% to 24%, resulting in

price reduction, which has aided in propelling the demand for motorcycles. Fierce competition

has also forced players to cut prices of certain models.

Competition has intensified over the last couple of years altering the dynamics in the

motorcycle segment with various companies planning to cash in on this spurt in demand by

calling off their JVs like Suzuki Motors planning to break off with TVS. Recently, Honda

Corporation of Japan announced its intentions to set up a 100% subsidiary to manufacture

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scooters and motorcycles. Other players in the two-wheeler industry include Bajaj Auto Ltd.,

Kinetic Motor Co.Ltd. LML and Escorts Yamaha. Low interest regime has helped in reducing

cost of loans, which will help in boosting sales of 2-wheelers, since 80% of the two-wheelers

are credit –stimulated.

The two-wheeler industry is passing through a critical but interesting phase. For many

years, it was growing continuously but the turning point came in 1996=97 when it started

slowing down. The impact was really (MI) felt in the next year when the overall growth was

hardly two percent. This was also possible only because the motorcycle segment showed a

healthy growth of 15 percent. The scooter segment went down by 3 percent and mopeds by 6

percent.

Another highlight is that the motorcycle sales have surpassed the scooter sales for the

first time in 1998-99. Until then, motorcycle sales were always trailing behind.

The net result is that motorcycles now account for 41 percent of the two-wheeler

market, while scooters account for 36 percent. Mopeds have been able to hold their own at

about 21 percent.

GROWTH OF MOTORCYCLES

It is therefore not surprising that every major player is trying to get into the Motorcycle

market to have a piece of the cake.

Hero MotoCorp Ltd is indisputable the leader with 38 percent share followed by Bajaj

with 27 percent (includes M-80), TVS at 19 percent and Escorts at 13 percent. Now LML and

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Kinetic have announced their plans to manufacture motorcycles, which are likely to come in the

market by next year. The battle is expected to be fierce but the consumer will be the greater

beneficiary.

The growth in motorcycles is slowly losing its hold. It is considered a family vehicle but

perhaps there is competition from the second hand car markets where prices have fallen down

rapidly. A1992 Maruti 800 is now available for just 70,000.

The scooter manufactures have to watch this phenomenon and bring our many new

product variants in the right price slots to sustain their shares in the market. The moped market

has been steady with an average growth of 3 percent. It is dominated by TVS which holds 48

percent market share followed by Kinetic and Majestic Auto at 23 percent and 18 percent

respectively.

In each segment, there is a wide gap between the first two contenders, which makes

their products positioning and marketing strategies most interesting. The two wheelers market

seems to be maturing. There are the usual their conventional segment of scooters, mopeds

and motorcycles. Two new segments are being created.

NEW SEGMENTS

A Step is through segment like Kinetic K4-100, Honda Street, Bajaj M-80, which is

quite close to the motorcycle segment. The other segment is scooterettes or mini scooters in

which vehicles such as Kinetic SX/Style, TVS Scooty, Hero Winner, Bajaaj Sunny/Sprite/Safire

and LML trendy can be considered. These are vehicles under 75 cc and largely targeted at the

youth market such as college students, young boys and girls and new couples. They get the

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advantage of lower excise duty at 16 percent as compared to 24 percent applicable over 75 cc.

The trend is towards push button start vehicles.

Among the majors in the two-wheeler industry, first quarter figure for the current year of some

players has been encouraging. The company sold 313,303 units last month as compared to

325,360 units in the same month last year. With this, BAL has recorded as 87 percent growth in

the motorcycle segment in the first quarter with sales of 130,577 units (93,631 units in the

corresponding period last year) BAL estimates market share of the first quarter-Geared

scooters 75.9%, unguarded scooters- 16.5%, Step-thrus-72.3% and motorcycle-20.5%.

In the scooters segment, sales of Bajaj Sunny and Bajaj Spirit increased by 170

percent to 7,876 units. First quarter sales registered an impressive 78 percent growth with

sales of 19,562 (10,995 units). The overall sales grew by 9.3 percent in the quarter when the

company sold 3.24 lakh vehicles.

BAL however reported a decline in sales of scooters by 15.6 percent in the first

quarter. The company hopes to increase the share of motorcycle in its product basket from 18

percent last year to 30 percent by 2003-04.

Hero MotoCorp Ltd enjoys tremendous brand equity in the motorcycle segment.

Kinetic Motors, another important player, managed to grow in 1999-2000, when the

scooters segments a whole slipped by around 5 percent. TVS Suzuki, a motor two-wheeler

market, has reported a growth of 13 percent in the first quarter period and sold 2.19 lakh units.

Sales of motorcycles and scooters were up by 18 percent and that of mopeds by 8 percent

over the same period last year.

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The current year therefore promises to be a testing time for the two-wheeler industry.

Industry pundits feel that an overall growth rate of 5 percent should be possible as against 9

percent projected earlier. The sales volume therefore is expected to be around 3.8 million in

2000-2001.

DRAMATIC CHANGES:

HeroMotoCorp is now world’s largest manufacturer of two-wheelers. The company has

benefited from the demand shift to motorcycles, as it focuses solely on this product segment

(although has a product called Pleasure in Scooter segment). With fuel efficiency and riding

comfort as the main selling points, HMC has been able to address a wide market and post

robust sales growth even after its separation from the Japanese major Honda.

The coming years will see increasing competition due to the parity in products

and price. The only differentiators will be technology, quality, product range and service.

Imaginative marketing will emphasize relationship building, customer satisfaction and

relationship. All is exploring new techniques such as direct marketing and institutional sales.

Some of them are taking the vehicle actually to the customer’s doorstep. Now the customer is

the king.

HISTORICAL DEVELOPMENT OF TWO WHEELER INDUSTRY

India is the second largest manufacturer and producer of two-wheelers in the world. It

stands next to Japan and China in terms of the number of two-wheelers produced and

domestic sales respectively. This distinction was achieved due to variety of reasons as if

respective policy followed by the Government of India towards the passenger car industry,

rising demand for personal transport, inefficiency in the public transportation system etc.,

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In Indian two-wheeler, industry made a small beginning in the early 50s when

Automobile Products of India (API) started manufacturing scooters in the country. Until 1958,

API and Enfield were the sole producers.

In 1948, Bajaj Auto began trading in imported Vespa scooters and three wheelers.

Finally, in 1980, it setup a shop to manufacture them in technical collaboration with Piaggio of

Italy. The agreement expired in 1971.

In the initial stages, API it was later overtaken by Bajaj Auto dominating the scooter

segment. Although various Government and Private enterprises entered the fray for scooters,

the only new player that has lasted until today is LML.

Under the regulated regime, foreign companies were not allowed to operate in India. It

was a complete seller market with the waiting period for getting a scooter from Bajaj Auto being

as high as 12 years.

The motorcycles segment was no different, with only three manufacturers via Enfield,

Ideal Jawa and Escorts. While Enfield bullet was a four-stroke bike, Jawa and the Rajdoot were

two-stroke bikes. Enfield 350cc bikes and Escorts 175cc bike initially dominated the motorcycle

segment.

The two-wheeler market was opened to foreign competition in the mid 80’s. And

then the market leaders-E5corts and Enfield- were caught unaware by the onslaught of the 100

cc bikes of the four IndoJapanese joint ventures. With the availability of fuel-efficiency low

power bikes, demand swelled resulting in Hero Honda — the only producer of four-stroke bikes

(100cc category), gaining a top slot.

The first Japanese motorcycles were introduced in the early eighties. TYS Suzuki and

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Hero Honda brought in the first two-stroke and four-stroke engine motorcycles respectively.

These two players initially started with assembly of CKD kits, and later on progressed to

indigenous manufacturing. In the 90’s the major growth for motorcycle segment was brought in

by Japanese motorcycles, which grew at a rate Of nearly 25% CAGR in the last five years.

The industry had a smooth ride in the 50’s, 60’s and70’s when the government prohibited new

entries and strictly controlled capacity expansion. The industry saw a sudden growth in the

80’s. The industry witnessed a steady growth of 14% leading to a peak volume of 1.9mm

vehicles in 1990.

The entry of Kinetic Honda in mid-eighties with a variometric scooter helped in

providing ease of use to the scooter owners. This helped in inducing youngsters and working

women towards buying scooters, who were earlier inclined towards moped purchases. In line

with this, the scooter segment has consistently lost its part of the market share in the

two~whee1er market.

In 1990, the entire automobile industry saw a drastic fall in demand. This resulted in a

decline of 15% in 1991 and 8% in1992, resulting in the production loss of 0.4mn vehicles.

Barring Hero Honda, all the major producers suffered from recession in FY93 and FY94. Hero

Honda showed a marginal decline in 1992.

The reasons for recession in the sector were the incessant rise in fuel price, high input

costs and reduced purchasing power due to significant rise in general price level and credit

crunch in consumer financing. Factors as if increased production in 1992, due to new entrants

coupled with the recession in the industry resulted in either company reporting losses or fail in

profits.India is one of the very few countries manufacturing three wheelers in the world. It is the

world’s largest manufacturer and seller of three wheelers. Bajaj Auto commands a monopoly in

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the domestic market with a market share of above 80%; Bajaj Tempo, Greaves Ltd and

Scooters in India share the rest.

The total number of registered two-wheelers and three-wheelers on road in India, as

on March 1998 was 27.9nm and 1 .7nin respectively. The two-wheeler population has almost

doubled in 1996 from a base of 12.6mn in 1990.

PENETRATION OF TWO-WHEELERS:

On a base of around 28mn vehicles on Indian roads and around 175mn households,

there were only 160 motorized two-wheelers per thousand households in FY98. This compares

poorly with countries like Thailand where it is around 600 per thousand households. Also with a

household size of 5.5 persons and more than one wage earner in about 60% of the

households, the potential for a second vehicle demand is also good.

The number of households in the low-income group has fallen since FY86 and has

been more pronounced in the post-reform period. On the other hand, the number of

households in the middle, upper middle and high-income groups that form the consumer base

for twowheelers, have increased. Their share of the total number of households has increased

from 10.6% in FY88 to 20.5% inFY96. This rising income profile however, has, been more

pronounced in the urban areas as average annual growth in industry surpassed that of

agriculture in the period FY93 to FY96.

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4. COMPANY PROFILE

Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.) is the world's largest manufacturer of

two - wheelers, based in India.

In 2001, the company achieved the coveted position of being the largest two-wheeler

manufacturing company in India and also, the 'World No.1' two-wheeler company in terms of

unit volume sales in a calendar year. Hero MotoCorp Ltd. continues to maintain this position till

date.

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HeroMotoCorp is now world’s largest manufacturer of two-wheelers. The company has

benefited from the demand shift to motorcycles, as it focuses solely on this product segment

(although has a product called Pleasure in Scooter segment). With fuel efficiency and riding

comfort as the main selling points, HMC has been able to address a wide market and post

robust sales growth even after its separation from the Japanese major Honda.

VISION

The story began with a simple vision – the vision of a mobile and an empowered India,

powered by its bikes. Hero MotoCorp Ltd., company’s new identity, reflects its commitment

towards providing world class mobility solutions with renewed focus on expanding company’s

footprint in the global arena.

MISSION

Hero MotoCorp's mission is to become a global enterprise fulfilling its customers' needs and

aspirations for mobility, setting benchmarks in technology, styling and quality so that it converts

its customers into its brand advocates. The company will provide an engaging environment for

its people to perform to their true potential. It will continue its focus on value creation and

enduring relationships with its partners.

STRATEGY

Hero MotoCorp's key strategies are to build a robust product portfolio across categories,

explore growth opportunities globally, continuously improve its operational efficiency,

aggressively expand its reach to customers, continue to invest in brand building activities and

ensure customer and shareholder delight.

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MANUFACTURING

Hero MotoCorp two wheelers are manufactured across three globally benchmarked

manufacturing facilities. Two of these are based at Gurgaon and Dharuhera which are located

in the state of Haryana in northern India. The third and the latest manufacturing plant are based

at Haridwar, in the hill state of Uttrakhand.

TECHNOLOGY

In the 1980's the Company pioneered the introduction of fuel-efficient, environment friendly

four-stroke motorcycles in the country. It became the first company to launch the Fuel Injection

(FI) technology in Indian motorcycles, with the launch of the Glamour FI in June 2006.

Its plants use world class equipment and processes and have become a benchmark in

leanness and productivity.

Hero MotoCorp, in its endeavor to remain a pioneer in technology, will continue to innovate and

develop cutting edge products and processes

DISTRIBUTION

The Company's growth in the two wheeler market in India is the result of an intrinsic ability to

increase reach in new geographies and growth markets. Hero MotoCorp's extensive sales and

service network now spans over to 5000 customer touch points. These comprise a mix of

authorized dealerships, service & spare parts outlets and dealer-appointed outlets across the

country.

Supply chain management

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As the Company prepares to produce a wider range of products, efforts are being taken to align

the supply chain and prime up its supplier base. During the year, the Company kick-started the

process of migrating its existing brands to the new brand. The exercise is expected to be

completed during 2012-13.

During the year, the Company also commenced the process of working with its vendors to

develop new parts. The Company’s Supply Chain Management function is built on three

planks:

Cost

Quality

Sustainability

Tracking inventory cost effectively and efficiently is known to be a key source of competitive

advantage in the automobile industry. Hence, it comes as no surprise that cost leadership is

the Company’s prime focus area. Continual pressure on margins forced the Company and its

supply chain partners to find innovative and alternate ways to combat inflation. Considerable

attention was given to managing component inventory in the system, with double-digit growth in

inventory turnover. To align HR processes with the supply chain, top two HR consulting firms in

India are working with supply chain partners. The exercise is aimed at improving robustness of

people processes and resulting in a direct impact on quality, cost, productivity, delivery and

reliability. The move will enable supply chain partners move to the next orbit of operational

excellence. The Company initiated more than 30 quality improvement projects with supply

chain partners to provide better quality products to customers.

BRAND

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The new Hero is rising and is poised to shine on the global arena. Company's new identity

"Hero MotoCorp Ltd." is truly reflective of its vision to strengthen focus on mobility and

technology and creating global footprint. Building and promoting new brand identity will be

central to all its initiatives, utilizing every opportunity and leveraging its strong presence across

sports, entertainment and ground- level activation.

Directors

Founder Director and Chairman : Dr. Brijmohan Lall Munjal

Managing Director and CEO : Mr. Pawan Munjal .

Board of Directors

Name of the person Nature of the Office

Mr. Sunil Kant Munjal Non Executive Director

Mr. Suman Kant Munjal Director

Mr. Paul Edgerley Non Executive Director

Mr. Pradeep Dinodia Director

Gen. (Retd.) V. P. Malik Director

Mr. Analjit Singh Director

Dr. Pritam Singh Director

Mr. M. Damodaran Director

Mr. Ravinath Director

Dr. Anand C.Burman Director

Dr. Brijmohan Lall Munjal

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Mr. Munjal is the founder Director and Chairman of the Company and the

$3.2 billion Hero Group. He is the Past President of Confederation of Indian Industry (CII),

Society of Indian Automobile Manufacturers (SIAM) and was a Member of the Board of the

Country's Central Bank (Reserve Bank of India). In recognition of his contribution to

industry, Mr. Munjal was conferred the Padma Bhushan Award by the Union Government

Corporate Governance

At Hero MotoCorp, it is the firm’s belief that the essence of Corporate Governance lies in the

phrase ''Your Company''. It is ''Your'' Company because it belongs to you - the shareholders.

The Chairman and Directors are ''Your'' fiduciaries and trustees. Their objective is to take the

business forward in such a way that it maximizes ''Your'' long-term value.

This Company is committed to benchmarking itself with global standards for providing good

Corporate Governance. It has put in place an effective Corporate Governance System which

ensures that the provisions of Clause 49 of the Listing Agreement are duly complied with.

The Board has also evolved and adopted a Code of Conduct based on the principles of Good

Corporate Governance and best management practices being followed globally.

Headquarter and Branches

Corporate & Registered Office

Hero MotoCorp Ltd.

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34, Community Centre, Basant Lok, Vasant Vihar, New Delhi - 110057, India.

Tel: +91-11-26142451, 26144121

Fax: +91-11-26143321, 26143198

Zonal Offices

East Zone

Hero MotoCorp Ltd

3F, Neelamber Building, 28B, Shakespeare Sarani, Third Floor, Kolkata - 700017, India.

Tel: +91-33-22810926 22810927, 22808922, 22811185

Fax: +91-33-22808923

Email: [email protected]

West Zone

Hero MotoCorp Ltd.

15-A, Bhale Estate, Rear Wing, Third Floor, Pune-Mumbai Road,

Wakadewali, Pune - 411 003, India.

Tel: +91-20-25511577, 25512161, 56012990-91

Fax: +91-20-25511266

Email: [email protected]

North Zone

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Hero MotoCorp Ltd.

F-126, Katwaria Sarai, Opp. Qutab Institutional Area,

New Delhi -110016, India.

Tel: +91-11-26533981-2, 47619300

Fax: +91-11-26533983

Email: [email protected]

South Zone

Hero MotoCorp Ltd.

No - 294, 2nd Floor, 6th Main, Off 100 ft Road, HAL 2nd Stage,

Indira Nagar, Bangalore – 560038, India.

Tel: +91-80-25550430, 25584436, 25582436, 25321139

Fax: +91-80-25594036

Email: [email protected]

GRADING POSITIVES

Market leadership, strong brand equity, professional management, high operating efficiency

and established scale economies. Strong financial profile characterized by healthy margins,

high profitability and cash generation. Potential upsides to our estimates: (1) HMCL sustains its

current market share, leveraging its brand equity, product performance and distribution

strengths; (2) industry growth exceeds our estimates over the medium term despite existing

concerns on macro-economic scenario; (3) HMCL betters the margins estimated by us via

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sustained business growth and increases in operating efficiency even in the face of competitive

and cost pressures.

GRADING SENSITIVITIES

Key sensitivities to our estimates include:

(1) Inflation in input costs not being neutralized by price increases because of competitive

pressures;

(2) High concentration on Executive segment;

(3) Intensifying competition from global players;

(4) Ability to develop in-house technical capability or form alternate technical tie-ups with

external institutions.

Company History - Hero Moto Corp

1983

- Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed

- Shareholders Agreement signed

1984

- Hero Honda Motors Ltd. Incorporated

1985

- First motorcycle "CD 100" rolled out

1987

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- 100,000th motorcycle produced1989New motorcycle model - "Sleek"

introduced

1991

- New motorcycle model - "CD 100 SS" introduced

- 500,000th motorcycle produced

1992

- Raman Munjal Vidya Mandir inaugurated - A School in the memory of founder

Managing Director, Mr. Raman Kant Munjal

1994

- New motorcycle model - "Splendor" introduced

- 1,000,000th motorcycle produced

1997

- New motorcycle model - "Street" introduced

- Hero Honda's 2nd manufacturing plant at Gurgaon inaugurated

1998

- 2,000,000th motorcycle produced

1999

- New motorcycle model - "CBZ" introduced

- Environment Management System of Dharuhera Plant certified with ISO-

14001 by DNV Holland

- Raman Munjal Memorial Hospital inaugurated - A Hospital in the memory of

founder Managing Director, Mr. Raman Kant Munjal

2000

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- 4,000,000th motorcycle produced

- Environment Management System of Gurgaon Plant certified ISO-14001 by

DNV Holland

- Splendor declared 'World No. 1' - largest selling single two-wheeler model

- "Hero Honda Passport Programme" - CRM Programme launched

2001

- New motorcycle model - "Passion" introduced

- One million production in one single year

- New motorcycle model - "Joy" introduced

- 5,000,000th motorcycle produced

2002

- New motorcycle model - "Dawn" introduced

- New motorcycle model - "Ambition" introduced

- Appointed Virender Sehwag, Mohammad Kaif, Yuvraj Singh, Harbhajan Singh

and Zaheer Khan as Brand Ambassadors

2003

- Becomes the first Indian Company to cross the cumulative 7 million sales mark

- Splendor has emerged as the World's largest selling model for the third

calendar year in a row (2000, 2001, 2002)

- New motorcycle model - "CD Dawn" introduced

- New motorcycle model - "Splendor +" introduced

- New motorcycle model - "Passion Plus" introduced

- New motorcycle model - "Karizma" introduced

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2004

- New motorcycle model - "Ambition 135" introduced

- Hero Honda became the World No. 1 Company for the third consecutive year.

- Crossed sales of over 2 million units in a single year, a global record.

- Splendor - World's largest selling motorcycle crossed the 5 million mark

- New motorcycle model - "CBZ*" introduced

- Joint Technical Agreement renewed

- Total sales crossed a record of 10 million motorcycles

2005

- Hero Honda is the World No. 1 for the 4th year in a row

- New motorcycle model - "Super Splendor" introduced

- New motorcycle model - "CD Deluxe" introduced

- New motorcycle model - "Glamour" introduced

- New motorcycle model - "Achiever" introduced

- First Scooter model from Hero Honda - "Pleasure" introduced

2006

- Hero Honda is the World No. 1 for the 5th year in a row

- 15 million production milestone achieved

2007

- Hero Honda is the World No. 1 for the 6th year in a row

- New 'Splendor NXG' launched

- New 'CD Deluxe' launched

- New 'Passion Plus' launched

- New motorcycle model 'Hunk' launched

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- 20 million production milestone achieved

2008

- Hero Honda Haridwar Plant inauguration

- New 'Pleasure' launched

- Splendor NXG lauched with power start feature

- New motorcycle model 'Passion Pro' launched

- New 'CBZ Xtreme' launched

- 25 million production milestone achieved

- CD Deluxe lauched with power start feature

- New 'Glamour' launched

- New 'Glamour Fi' launched

2009

- Hero Honda GoodLife Program launched Hunk' (Limited Edition) launched

- Splendor completed 11 million production landmark

- New motorcycle model 'Karizma - ZMR' launched

- Silver jubilee celebrations

2010

- New model Splendor Pro launched

- Launch of new Super Splendor and New Hunk

2011

- New licensing arrangement signed between Hero and Honda (Hero

Honda is renamed as Hero)

- Launch of new refreshed versions of Glamour, Glamour Fi, CBZ Xtreme,

Karizma

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- Crosses the landmark figure of 5 million cumulative sales in a single year

2012

- 45% market share in the domestic two-wheeler market

- 56% market share in the domestic motorcycle market

- Declared a dividend of 2,250% in 2011-12, i.e. 45 per equity share of the face

value of 2 per share

Awards & Recognitions on 2011

Two-wheeler Manufacturer of the Year award by Bike India magazine. Adjudged the

"Bike Manufacturer of the Year" at the Economic Times ZigWheels Car and Bike

Awards.

CNBC Awaaz - Storyboard special commendation for "Effective rebranding of a new

corporate entity" by CNBC Awaaz Consumer Awards

"Most Recommended Two-Wheeler Brand of the Year" award by CNBC Awaaz

Consumer Awards

Colloquy Loyalty Awards "Innovation in Loyalty Marketing International 2011" for Hero

Good Life

"Best Activity Generating Short or Long-Term Brand Loyalty" by the Promotion

Marketing Award of Asia Order of Merit for Hero Good Life

Ranked No 1 brand in the Auto (Two-Wheelers) category in the Brand Equity "Most

Trusted Brand" 2011 serve

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Sales figures

OEM F12 F11 Growth (%)

1 Hero Moto corp 6235205 5402444 15.41

2 Bajaj 3834405 3387043 13.21

3 TVS 2158375 2006808 7.55

4 Honda (scooters) 1240771 907832 36.67

Honda (Motorcycle) 866457 748895 15.70

Hero – HMSI 2107228 1656727 27.19

5 Yamaha 484891 373100 29.96

6 Suzuki 340893 282156 20.82

7 Mahindra 134750 163935 -17.80

Source: - www.motorbeam.com

• Profile of target customer

Hero MotoCorp basically targets the every each and segments of the market. So there are

some products like splendor, CD- dawn (rs40000-50000) they made for lower segment of the

market and glamour, passion, CBZ, karizma (rs above 50000) for the upper segment of the

market. And now they are trying to target the young people of the market.

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India’s Hero MotoCorp, the world’s largest producer of motorcycles and scooters, has

announced its intention to expand globally, with plans to sell vehicles on three continents and

nearly double its unit sales within five years. The company, whose family shareholders bought

out its former partner Honda Motor this year, said it would invest about $1bn to expand

internationally in south-east Asia, Africa, and Central and Latin America.

• Customer Relationship Activity

For making a better relationship with customer they always use genuine parts in their product.

And after selling they have the services and maintenances. Their constant endeavor is to

support the company's mandate of providing highest level of customer satisfaction by taking

good care of customer’s two-wheeler service and maintenance through their vast network of

more than 2100 committed dealers and service outlets spread across the country.

Apart from that hero motocorp focused on cleanliness and other aesthetics of the service

stations and add such air conditioned waiting area, internet surfing, coffee shops etc to

enhance the in house experience of the customers at those “customer touch point”. To ensure

that millions of customers in the rural area are not left waiting for adequate service as it is

impossible for the company to introduce service station at every nook and corner of the

country, mobile service stations are regularly arranged with prior intimation to public about the

rout that the mobile workshop would take when passing through that region so that customers

can come and get their two wheelers serviced. All these activities are aimed to increase the

customer loyalty and thus retaining customers.

Good life: Customer Loyalty Program

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Good Life is a Customer Relationship Program introduced a decade ago, which Endeavour’s to

enhance customer satisfaction and initiate increased levels of member engagement.

The main objective of this Program is to make our customers our Brand Ambassadors to

generate referral sales and boost service visits.

The GoodLife Program has enabled the Company build a consolidated base of 10 million plus

loyal customers; in the process, a new distribution platform has emerged. GoodLife now

contributes a huge 14% to the Company’s overall sales (purely through referrals), in addition to

incremental sales. GoodLife has emerged as the largest Customer Relationship Program in

India, witnessing additions of 0.38 million members each month. During the year, the

Program’s member base shot up 16%, with new 4.51 million transactions being undertaken.

Besides aiming to increase the number of customers and volume of transactions, the Program

seeks to enhance revenue opportunities for dealers as well. Different levels of engagement

have been in-built into the Program with the aim of increasing its people engagement initiatives.

Some of these are: transaction-based rewards, exclusive event invites, personal accidental

insurance, service continuity bonus, transaction benefits on special occasions (birthdays,

anniversaries), quarterly newsletters and interaction through a program website.

The Program began with a member transaction booklet, a replica of the Passport Booklet,

which helps in engaging with customers. However, the Program has been e-enabled now to

improve its geographical reach and efficiency level. It runs on the backbone of a robust and

engaging front-end and a sound, solid and technical back-end. The Program includes

customized technology, combining a mix of Magnetic Swipe/Bar Code. Personalized

Membership Cards are shared with GoodLife members, which are easy to carry, transact and

earn/redeem rewards. Online member profiling and real-time customer feedback module (via

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questionnaires) are some more salient features of the Program. During the year, GoodLife has

been the recipient of several accolades and awards on national and international platforms.

Some of these were:

‘Order of Merit’ in PMAA awards 2011 under ‘Best Activity Generating Short or Long

Term Brand Loyalty’ category

Colloquy Award under Innovation in Loyalty Marketing (International) category

Qualified as ECHO Finalist (5th place) in 2011 DMA International ECHO™ Awards

competition Loyalty Award under Auto Sector

OPERATION RAMP-UP

With demand for bikes recording a stupendous growth of 15% during the year under

review, the Company’s capacities were severely strained. This prompted it to augment

its capacity at its three plants – up from 5.4 million units to 6.35 million – during the

year. This was made possible through a number of de-bottlenecking measures. For

example, the Company’s plants were made leaner by outsourcing non-critical

processes and operations.

Besides this, a number of structural changes and alterations were made in its

manufacturing strategy to effectively implement its Sales Plan for 2012-13.

Major replacements were also executed in the paint and assembly shop, ensuring little

or no shutdown along the assembly line. Apart from the above measures, several

innovative technologies were inculcated to reduce operational costs. Some examples

of these are:

A breakthrough technology for gear rolling was implemented for mass-

production

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Fine blanking, an alternate process of hobbling, was introduced for sprocket

components

Advanced cam grinding was introduced to increase productivity and control

costs

The Company’s oldest plant at Dharuhera was in the limelight for two specific reasons:

Wage negotiations were concluded

Plant won TPM Excellence Award

The Company continues to set new industry benchmarks in the areas of energy

conservation and sustainability. Vapour absorption machines and heat recovery units

were installed during the year to utilize waste heat from Gas DGs for air-conditioning

and pre-heating of hot water generation. Other green initiatives included projects on

waste water management, LED lighting and solar power. These cost leadership and

green projects yielded considerable savings to the Company within a short period of

time.

PORTFOLIO OF PRODUCTS

Hero MotoCorp offers wide range of two wheeler products that include motorcycles and

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

100cc

Bike category

SPLENDOR PLUS

SPLENDOR NXG

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SPLENDOR PRO

PASSION PRO

PASSION XPRO

MAESTRO

PLEASURE

HF DAWN

HF DELUXE

125cc

Bike category

GLAMOUR

SUPER SPLENDOR

IGNITOR

Glamour PGM FI

150cc

Bike category

ACHIEVER

KARIZMA

KARIZMA ZMR

IMPULSE

HUNK

XTREME

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Termination of Honda joint venture

In December 2010, the board of directors of the Hero Honda Group has

decided to terminate the joint venture between Hero Group of India and Honda of Japan in a

phased manner. The Hero Group would buy out the 26% stake of the Honda in JV Hero

Honda. Under the joint venture Hero Group could not export to international markets (except

Sri Lanka) and the termination would mean that Hero Group can now export. Since the

beginning, the Hero Group relied on their Japanese partner Honda for the technology in their

bikes. So there are concerns that the Hero Group might not be able to sustain the performance

of the Joint Venture alone.

The Japanese auto major will exit the joint venture through a series

of off market transactions by giving the Munjal family—that held a 26% stake in the company—

an additional 26%. Honda, which also has an independent fully owned two wheeler subsidiary

—Honda Motorcycle and Scooter India (HMSI)—will exit Hero Honda at a discount and get

over $1 billion for its stake. The discount will be between 30% and 50% to the current value of

Honda's stake as per the price of the stock after the market closed on Wednesday.

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The rising differences between the two partners gradually emerged as

an irritant. Differences had been brewing for a few years before the split over a variety of

issues, ranging from Honda's reluctance to fully and freely share technology with Hero (despite

a 10-year technology tie-up that expires in 2014) as well as Indian partner's uneasiness over

high royalty payouts to the Japanese company. Another major irritant for Honda was the refusal

of Hero Honda (mainly managed by the Munjal family) to merge the company's spare parts

business with Honda's new fully owned subsidiary Honda Motorcycle and Scooter

India (HMSI).

As per the arrangement, it will be a two-leg deal. In the first part,

the Munjal family, led by Brijmohan Lal Munjal group, will form an overseas-incorporated

special purpose vehicle (SPV) to buy out Honda's entire stake, which will be backed by bridge

loans. This SPV would eventually be thrown open for private equity participation and those in

the fray include Warburg Pincus, Kohlberg Kravis Roberts (KKR), TPG, Bain Capital,

and Carlyle Group.

Honda will continue to provide technology to Hero Honda motorbikes until 2014 for existing as

well as future models.

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4. DATA ANALYSIS AND INTEPRETATION

Table- 4.1 Showing type of Hero two wheeler models owned

Inference:- From the above table it is inferred that, 30% of respondents held Passion Pro and

25% of respondents held Splendor Plus, Splendor Pro 10%, and Passion Xpro 9%. The

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Num Name of Hero two wheeler

No. of respondents

1 SPLENDOR PLUS 25

2 SPLENDOR PRO 10

3 PASSION PRO 30

4 HUNK 2

5 GLAMOUR 3

6 KARIZMA ZMR 2

7 KARIZMA 1

8 MAESTRO 3

9 SUPER SPLENDOR 2

10 SPLENDOR NXG 5

11 PLEASURE 6

12 HF DAWN 1

13 PASSION XPRO 9

14 IMPULSE 1

Total 100

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remaining two wheelers are very less in %. The table is inferred that some of the models are

very less in market. This formed the basis of the study.

Chart 4.1 Showing type of Hero two wheeler models owned in %

SPLENDOR PLUS25%

SPLENDOR PRO10%

PASSION PRO30%

HUNK2%

GLAMOUR3%

KARIZMA ZMR2%

KARIZMA1%

MAESTRO3%

SUPER SPLENDOR

2%

SPLENDOR NXG5%

PLEASURE6%

HF DAWN1%

PASSION XPRO9%

IMPULSE1%

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Table- 4.2 showing the source of information about Hero

Inference:

From the above table it is inferred that people are getting information about hero two wheelers

from television ads, more than 50% of people are watching TV ads. Roadside Boarding & news

paper are less in performance; other sources contain motor shows, internet ads.

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Sources No. of respondents

News paper ads 9

Television ads 57

Roadside Boarding’s 14

Others 20

Total 100

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Chart 4.2 showing the source of information about Hero

9%

57%

14%

20%

News paper ads Television ads Roadside Boarding’s others

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Table- 4.3 showing the influenced people for buying Hero

Influenced people No. of respondents

Family 34

Myself 16

Friend 35

Sales representative 15

Total 100

Inference: -

From the above table it is observed that, the buying behavior people mostly

influenced by family and friends the other factor is have less level of influence. The people how

using bike mostly youth & middle class people and they are influenced by their friends and

family respectively. The above table showing that 35% of people influenced by their friends

34% people through family 16% people is buying on their need. 15% because of sales

representative

Chart 4.3 showing the number people influenced for buying

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family Myself friend Sales representative0

5

10

15

20

25

30

35

40

Table- 4.4 showing the preference of capacity & colour

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Capacity No. of respondents Preference of color No. of respondents

100cc 17 Blue 23

125cc 28 Red 24

150cc 35 Black 39

200cc 20 Other 14

Total 100 Total 100

Inference: -

From the above table it is observed that, the bike ‘cc’ preference is deferent customer to

customer but the 35% people like 150cc bike and 28% like 125cc, 200cc bike 20% others

100cc.e preference of color ‘BLACK’ is rating at near to 40% of people after that 24% like Red

color 23% Blue also . Other color like white getting less importance in selection

Chart 4.4(1) showing the preference of capacity

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100 cc 125cc 150cc 200cc0

5

10

15

20

25

30

35

40

Chart 4.4(2) showing the preference of colour

Blue Red Black Other0

5

10

15

20

25

30

35

40

45

Table- 4.5 showing the responses on Vehicle delivery time

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respondents No. of respondents

Yes (on time) 78

NO (not on time) 22

Total 100

Inference: -

From the above table it is observed that,

78% of respondents got delivery of their vehicle on time

22% says that the delivery of vehicle got delay

After enquire about the 22% it’s showing that they asked for very demand vehicle like

PASSION & SPLENDOR bikes and some of them ask new bike like Maestro

Chart 4.5 showing the responses on Vehicle delivery time

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Yes78%

No22%

Table- 4.6 showing availability test drive during on showroom visit

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Respondents No. of respondents

Yes 92

NO 8

Total 100

Inference: -

From the above table it is observed that, 92% of respondents got test drive during their

showroom visit, other 8% didn’t got because of two reason some of them ask the bike that not

showcase in showrooms and some of them gone small showrooms

Chart 4.6 showing availability test drive during on showroom visit

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Yes

No

Table- 4.7 showing the reliability of Vehicle

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Respondents No. of respondents

Excellent 16

Good 23

Moderate 21

Satisfactory 39

unsatisfactory 1

Total 100

Inference: -

The above table shows how the customer rate the reliability of Hero bike, it is observed

that 16% of them telling its excellent 23% respond that its good and 21% have moderate

opinion 39% is satisfied with the performance and 1 of the respondent is not satisfied with

the Hero bike.

Chart 4.7 showing the reliability of Vehicle

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Page 56: Customer satisfaction on Hero Motocop Ltd after split with Honda

0

5

10

15

20

25

30

35

40

45

ExcellentGood ModerateSatisfactoryunsatisfactory

Table- 4.8 showing level of Service Satisfaction

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Page 57: Customer satisfaction on Hero Motocop Ltd after split with Honda

Respondents No. of respondents

Completely satisfied 34

satisfied 39

dissatisfied 12

Not at all satisfied 15

Total 100

Inference:-

The above table shows the satisfaction towards Hero bike on the time of Service 34% of

respondents are completely satisfied with the service provide by the company and 39%

customers are satisfied and 12% dissatisfied, 15% is not at all satisfied with the service provide

by the company the following chart shows it more clearly

Chart 4.8 showing level of Service Satisfaction

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Page 58: Customer satisfaction on Hero Motocop Ltd after split with Honda

0

5

10

15

20

25

30

35

40

Completely satisfied

satisfied

dissatisfied

Not at all satisfied

Table- 4.9 showing the brand name influence in purchase

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Page 59: Customer satisfaction on Hero Motocop Ltd after split with Honda

Respondents No. of respondents Percentage

Yes 74 74%

NO 26 26%

Total 100 100%

Inference:-

From the above table it is observed that, the customers are influenced by the brand name

“HERO MOTOCROP” 74% of respondents are influence by the brand name and 26% are not

the brand “HERO” is the most selling bike in India and Its is the brand that selling more bike in

the world also

Chart 4.9 showing the brand name influence in purchase

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Page 60: Customer satisfaction on Hero Motocop Ltd after split with Honda

Yes74%

No26%

Table- 4.10 showing the reason for preference

Preference No. Of Respondents Percentage

Quality 25 25%

Price 20 20%

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Page 61: Customer satisfaction on Hero Motocop Ltd after split with Honda

Brand Image 24 24%

Fuel efficiency 31 31%

TOTAL 100 100%

INTERPRETATION:

From the above table we can infer that 25% of the respondents gave preference to quality,

20% of respondents gave preference to price, 24% of respondents gave preference to brand

image and 31% of the respondents gave preference to fuel efficiency.

From the above findings, we can analyze that 69% of respondents were more quality conscious

and only 31% respondents gave preference to price and fuel efficiency.

The reasons are even though people are price conscious to some extent; the consumers are

more quality conscious than price conscious because they have enough income to buy two-

wheeler.

Chart 4.10 showing the reason for preference

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Page 62: Customer satisfaction on Hero Motocop Ltd after split with Honda

Quality Price Brand Image Fuel efficiency0

5

10

15

20

25

30

35

Table - 4.11 showing how long customer using hero two wheelers

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Page 63: Customer satisfaction on Hero Motocop Ltd after split with Honda

Time period No. Of Respondents

Less than 6 month 24

6-9 month 23

9 -1 year 32

More than 1 year 21

TOTAL 100

Inference:-

From the above table we can infer that how long the customer holds the bike the split between

Hero and Honda happen less than 3 year back and this table help to know the using period of

customer 79% of people that in the research is brought their bike in the last year and 21% is

using the bike more than 1 year.

Chart 4.11 showing how long customer using hero two wheelers

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Page 64: Customer satisfaction on Hero Motocop Ltd after split with Honda

0 5 10 15 20 25 30 35

More than 1 year 9 -1 year 6-9 month Less than 6 month

Table - 4.12 showing the area that Customer demanding to improve in service

Area No. Of Respondents in %

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Page 65: Customer satisfaction on Hero Motocop Ltd after split with Honda

Service in time 31

Reliable service 16

Well trained mechanics 27

less labor charge 26

TOTAL 100

Inference:-

From the above table it is observed that, what is customer need that Hero wants to improve,

31% need improvement in service in time, 16% in reliable service, and 27% need well trained

mechanics, 26% less labor charge.

Chart 4.12 showing the area that Customer demanding to improve in service

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Page 66: Customer satisfaction on Hero Motocop Ltd after split with Honda

Category 10

5

10

15

20

25

30

35

Chart Title

Service in time Reliable serviceWell trained mechanics less labor charge

Table - 4.13 showing the problems face at the time of service

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Page 67: Customer satisfaction on Hero Motocop Ltd after split with Honda

Responses No. Of Respondents in %

High price spare parts 29

Low quality of spare parts 14

Delay in service 29

No problems 28

TOTAL 100

Inference:-

From the above table it is observed that, the customers are facing deferent problems at the

time of service, 29% face high price of spare parts, 14% face low quality of spare parts, 29%

face delay in service, 28% respondents they didn’t face any problem.

Chart 4.13 showing the problems face at the time of service

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Page 68: Customer satisfaction on Hero Motocop Ltd after split with Honda

High price spare parts

29%

Low quality of spare parts

14%

Delay in service

29%

No problems28%

Problems face at the time of service

Table - 4.14 showing the rating of Service Performance of Hero Motors

Response NO. OF RESPONDENTS PERCENTAGE

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Page 69: Customer satisfaction on Hero Motocop Ltd after split with Honda

Very good 34 34%

Good 20 20%

Average 32 32%

Bad 8 8%

Very Bad 6 6%

TOTAL 100 100%

Inference:-

From the above table it is observed that, 34% of customer says service performance gives by

Hero MotoCorp Ltd, Is very good and 20% says it’s good , 32% says the service is average,8

respondents says the service is bad and 6% says it’s very bad, To overall we can conclude

that more than 85% is satisfied with the service provide by Hero MotoCorp Ltd.

Chart 4.14 showing the rating of Service Performance of Hero Motors

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Page 70: Customer satisfaction on Hero Motocop Ltd after split with Honda

Response0

5

10

15

20

25

30

35

40

Chart Title

Very goodGoodAverageBadVery Bad

Table - 4.15 showing the good thing associate with your brand

Response NO. OF RESPONDENTS PERCENTAGE

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Page 71: Customer satisfaction on Hero Motocop Ltd after split with Honda

Solid engineering 16 16%

Innovative features 25 25%

Value of money 21 21%

High and consistent mileage 29 29%

Better after sale service 9 9%

TOTAL 100 100%

Inference:-

From the above table it is observed that, what the customer feel that make Hero deferent from

other bike, 16% like the solid engineering, 25% says innovative features is good about Hero

MotoCorp , 21% respond that Hero giving the value of money, 29% brought because of

consistent mileage of Hero,9% like after sale service of Hero MotoCorp Ltd.

Chart 4.15 showing the good thing associate with your brand

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Page 72: Customer satisfaction on Hero Motocop Ltd after split with Honda

16%

25%

21%

29%

9%

good thing associate with your brandSolid engineering Innovative featuresValue of money High and consistent mileage Better after sale service

Table - 4.16 showing the friend recommendation for Hero bikes

Respondents No. of respondents Percentage

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Page 73: Customer satisfaction on Hero Motocop Ltd after split with Honda

Yes 82 82%

NO 18 18%

Total 100 100%

Inference:-

From the above table it is observed that, Out of the respondents 82% people will recommend

Hero bike to their friends it’s showing the 82% of customer are satisfied with their Hero bike,

and the remaining 18 % because of some reason not recommending Hero bike to their friends

Chart 4.16 showing that recommendation to Hero bikes

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Page 74: Customer satisfaction on Hero Motocop Ltd after split with Honda

Yes82%

No18%

SUMMARY OF FINDINGS

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Page 75: Customer satisfaction on Hero Motocop Ltd after split with Honda

1. The Hero MotoCorp is leading the market. The difference is too big to cope up with, for

any manufacturer in short span. With proven products and many people having faith in

brand, it is quite a difficult task for others to take the Hero’s number one position.

2. Hero MotoCorp India’s no. 1 two wheeler companies have posted growth of 11.28% in

the month of May 2012 compared to May 2011.

3. Ability to understand customer’s needs and wants, maintenance cost is low.

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

number

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

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

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

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

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

10. Brand name of Hero is still good in market after split with Honda, 74% of people like

the brand “HERO"

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

12. The research showing that consumer want to get more service satisfaction.

13. 82% of the customer likes to recommend Hero two wheeler to their friends, its shows

they are satisfied with the bike.

SUGGESTIONS AND RECOMMENDATIONS

It is very hard to hold the pulse of a customer in the market. Customer’s satisfaction is different

for different people at different situations;

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Page 76: Customer satisfaction on Hero Motocop Ltd after split with Honda

Majority of the respondents were still unaware about different versions of Hero bikes.

Therefore I suggest the company personals should take initiative to create awareness

about these versions.

Few of the customers expressed concern over frequency of the maintenance & service

problems faced by their vehicle and expressed ‘high satisfaction’ over it. Therefore, I

suggest them to re look at the vehicle & re-develop in order to stop the frequency of

these problems.

Hero MotoCorp want to give more importance in there service part its include timely

service, and quality of service

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

less scooter

Hero bikes want to increase their export market

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

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

CONCLUSION

Customer satisfaction is a marketing tool and a definite value added benefit. It is often

perceived by customers as important as the primary product or service your organization offers.

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Page 77: Customer satisfaction on Hero Motocop Ltd after split with Honda

For making a better relationship with customer they always use genuine parts in their product.

And after selling they have the services and maintenances. Their constant endeavor is to

support the company's mandate of providing highest level of customer satisfaction by taking

good care of customer’s two-wheeler service and maintenance through their vast network of

more than 2100 committed dealers and service outlets spread across the country.

Apart from that hero MotoCorp Ltd focused on cleanliness and other aesthetics of the service

stations and add such air conditioned waiting area, internet surfing, coffee shops etc to

enhance the in house experience of the customers at those “customer touch point”. To ensure

that millions of customers in the rural area are not left waiting for adequate service as it is

impossible for the company to introduce service station at every nook and corner of the

country, mobile service stations are regularly arranged with prior intimation to public about the

rout that the mobile workshop would take when passing through that region so that customers

can come and get their two wheelers serviced. All these activities are aimed to increase the

customer loyalty and thus retaining customers.

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