AUTOMOTIVE PROJECT REPORT On MARKETING MIX OF AUTOMOTIVE SECTOR Submitted in the partial fulfilment of the requirement For the award of degree of MASTER OF BUSINESS ADMINISTRATION (MBA) To UNIVERSITY BUSINESS SCHOOL 1 University Business School, Panjab University Regional Centre, Ludhiana
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AUTOMOTIVE
PROJECT REPORT
On
MARKETING MIX OF AUTOMOTIVE SECTOR
Submitted in the partial fulfilment of the requirement
For the award of degree of
MASTER OF BUSINESS ADMINISTRATION (MBA)
To
UNIVERSITY BUSINESS SCHOOL
PANJAB UNIVERSITY REGIONAL CENTRE, LUDHIANA
SUPERVISED BY: SUBMITTED BY:-
Mr. ASHISH SAIHJPAL NAVDEEP ROSHAN
FACULTY PUNEET JAIN
UNIVERSITY BUSINESS SCHOOL SAHIL AGGARWAL
SUMITGOYAL
VIRENDER SINGH
1 University Business School, Panjab University Regional Centre, Ludhiana
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2 University Business School, Panjab University Regional Centre, Ludhiana
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ACKNOWLEDGMENTS
Words fail us to express our deep sense of gratitude to our revered supervisor, Mr.
Ashish Saihjpal, University Business School, whose erudite guidance and
supervision have made this work possible. We are very thankful for this valuable
guidance and constant encouragement during the preparation of this project.
We are highly thankful to all other members of department of UBS (PURC) for their
suggestions and kind co-operation in this project work.
We would like to thank all the respondents whose responses were of great importance
for the project.
NAVDEEP ROSHAN
PUNEET JAIN
SAHIL AGGARWAL
SUMIT GOYAL
VIRENDER SINGH
3 University Business School, Panjab University Regional Centre, Ludhiana
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OBJECTIVE OF THIS STUDY
This study is done in keeping following objectives in view:
To find out the present status of the automobile industries in India.
To study the market research of the automobile industries.
To study the distribution and marketing strategy adopt by automobile industries.
To enhance our analytical skills in the field of practical application of Marketing
“The marketer’s watchwords are quality, service, and value.”
PHILIP KOTLER
4 University Business School, Panjab University Regional Centre, Ludhiana
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CONTENTS
S.NO. PARTICULARS PAGENO.
1 OVERVIEW 062 MARKET RESEARCH 153 MARKET ENVIRONMENT 164 SEGMENTATION 185 TARGET MARKET 206 NICHE MARKET 227 MARKET MIX 238 PRODUCT MIX 259 PRICE 3210 PROMOTION 3311 PLACE 4412 PEOPLE 4513 PHYSICAL EVIDENCE 4614 PROCESS 4815 DEALING WITH THE COMPETITION 4916 DISTRIBUTION CHANNELS 5117 THE VALUE CHAIN 5218 SWOT ANALYSIS OF MARUTI UDYOG LTD. 5319 PRODUCT LIFE CYCLE 5620 INTRODUCTION OF TWO WHEELER 5821 KEY PLAYER IN TWO WHEELER INDUSTRY 6022 SEGMENTATION OF TWO WHEELER 6123 KEY DRIVERS OF THE INDIAN TWO WHEELER 6324 HERO HONDA PROFILE 6625 MARKET MIX OF HERO HONDA 6826 CASE STUDY OF KARIZMA 7827 SWOT ANALYSIS OF KARIZMA 7928 SWOT ANALYSIS OF COMPETITIOR (BAJAJ PULSAR 220) 8129 MARKETING MIX OF KARIZMA 8430 CONCLUSION 8931 BIBILIOGRAPHY 90
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OVERVIEW OF AUTOMOTIVE SECTOR
The industry is estimated to be a US$ 34 billion industry with exports
contributing 5 per cent of the revenues. The growth of the Indian middle class
with increasing purchasing power along with the strong growth of the
economy over the past few years has attracted global major auto
manufacturers to the Indian market. Moreover, India provides trained
manpower at competitive costs making India a favoured global manufacturing
hub. The Indian automobile industry is going through a technological change
where each firm is engaged in changing its processes and technologies to
maintain the competitive advantage and provide customers with the optimized
products and services. The de-licensing of the sector in 1991 and the
subsequent opening up of 100 per cent foreign direct investment (FDI)
through the automatic route marked the beginning of a new era for the
Indian automotive industry. Since then almost all the global major
automobile players have set up their facilities in India taking the level of
production of vehicles from 2 million in 1991 to 10.83 million in 2007–08.
Stagnation of the auto sector in markets such as Europe, US and Japan on the
other, have resulted in shifting of new capacities and flow of capital to the
Indian auto industry. The Indian automobile industry has been growing at the
rate of 15–27 per cent over the past five years. In two wheelers industry,
Indian companies are the largest manufacturers in the world. Bikes are a major
segment in the industry, the other two being scooters and mopeds. Moreover,
Indian car makers are earning acclaim worldwide. The home-grown
automaker, Maruti Suzuki has emerged as the fourth most reputed among
auto companies in the world, even ahead of its parent Suzuki Motor Co of
Japan, according to the Global 200: The World's Best Corporate
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Reputations list, compiled by US-based Reputation Institute.
EVOLUTION OF THE INDIAN AUTOMOBILE INDUSTRY
Pre 1983
1983-1993
1993-2007
• Closed market• Growth of market limited by supply• Outdated models
• De-licensing of the sector in 1993• Global major OEMs start assembly in India(GM, Ford, Honda, Hyundai, etc.)• Imports allowed from April 2001; alignmentof duty on components and parts to ASEANlevels• Implementation of VAT
PRODUCTION: INDIA AS THE MANUFACTURING HUB
India with its rapidly growing middle class, market-oriented stable economy,
availability of trained manpower at competitive cost, fairly well-developed
credit and financing facilities and local availability of almost all the raw
materials at a competitive cost has emerged as one of the favourite investment
destinations for the automotive manufacturers.
Japanese auto major, Nissan Motor Co, has identified India as one of
the five low-cost countries to manufacture its new generation compact
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cars, including the Micro.
Hyundai has made India its global hub for manufacturing small cars. It
will invest US$ 1 billion in its second plant in Chennai by 2013. In
addition, it is also investing US$ 40 million in its R&D facility in
Hyderabad.
General Motors has so far invested about US$ 1 billion into its Indian
operations. It has already started production of its small car, Spark in
its new Talegaon factory in Maharashtra, which has been set up with
an investment of US$ 300 million.
Mercedes-Benz will invest about US$ 64. 21 million in its plant at
Chakan near Pune, which would begin operations in February-March
next year. The plant would have a production capacity of 2,500 trucks
and buses and 10,000 cars over two shifts per year.
Renault has entered into 50:50 joint ventures with Nissan Motors and
together they have set up a manufacturing facility near Chennai at a
cost of US$ 901.35 million to deliver 400,000 cars annually.
Skoda Auto plans to make India its regional manufacturing hub. It will
start producing cars in India by 2010 with a manufacturing target of
50,000 units. Besides the domestic market, these will also be exported
to neighbouring countries like Nepal, Sri Lanka, Burma and
Bangladesh.
DOMESTIC MARKET
According to the Society of Indian Automobile Manufacturers (SIAM), the
Indian auto industry recorded a production growth of 8.39 per cent during the
current fiscal year till October 2008, over the same period in the previous
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fiscal.
SALES
The growth of the passenger vehicles segment during April–October 2008 was
4.87 per cent over the same period, the previous year. Passenger cars grew by
3.51 per cent, utility vehicles by 6.33 per cent and multi-purpose vehicles by
18.15 per cent in this period. However, cumulative sales of commercial
vehicles segment registered a decline during the period. The segment
registered a decline of 2.97 per cent during April–October 2008 as compared
to the same period last year.
In the three-wheelers segment, passenger carriers grew by 19.64 per cent
during April-–October 2008.
Two-wheelers registered a growth of 6.65 per cent during April–October
2008. Mopeds, motorcycles and scooters grew by 4.77 per cent, 6.59 per cent
and 6.79 per cent, respectively. Electric two-wheelers segment also grew by
54.25 per cent.
INDIA AS THE EXPORT HUB
In terms of manufacturing excellence and availability of low-cost quality
components as well as a fast expanding domestic market, India is all set to
become the global export hub of the automobile industry. The exports markets
have helped carmakers such as Maruti Suzuki and Hyundai Motor India post
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greater sales overseas than in the domestic market.
According to the figures released by SIAM, the period from April–October
2008 saw automobile exports registering a growth of 29.36 per cent.
As the world moves away from big cars to smaller makes, owing to high fuel
costs and general recessionary trends, the small car advantage presents a huge
business opportunity for car makers in India. The Indian car market accounts
for 71 per cent of small cars, while in China it accounts for 33 per cent.
Home-grown auto major, Maruti Suzuki, the country's largest car maker,
currently exports Alto, M800, Omni, Wagon R and Zen Estilo to non-
European markets such as Chile, UAE, Algeria and East Africa. The Japanese
car maker, which exported 53,000 units in 2007–08, will up it to 200,000 units
by 2010.
Korean car maker Hyundai exports 40 per cent of its small car production,
primarily 'i10' and 'Santro', which sells as 'Autos' in 97 countries across
the world. The sales of its newly-launched compact car ‘i10’ touched 106,749
units in the overseas markets within seven months of being launched in
December 2007.
As a part of its strategy to make India an export hub for compact cars,
Hyundai Motors has raised production to 0.6 million units per annum.
The latest addition to the list is Nissan, which plans to buy 50,000 A-Star
compact cars from its rival Maruti Suzuki and export to markets in Europe as
well as make small cars in India and start exporting it to Latin American and
African countries by 2010. The car makers in the markets like Latin America
and Europe too have ramped up sourcing orders of small cars from Indian
companies.
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FDI, MERGERS, ACQUISITIONS AND JOINT VENTURES
In sync with the dynamics of an open market, mergers and acquisitions and
joint ventures have continued to be the driving force in the Indian automobile
industry. Leading Japanese, Korean, European, French, Italian and American
automobile companies have either set up their own manufacturing base in
India or have tied up with Indian automotive firms to roll out new products
from Indian market. The list includes Toyota, Nissan, Renault, Fiat, Honda,
Kawasaki, Cummins and many more. On the other hand, Indian companies
have also been bullish in acquiring foreign automobile companies to reinforce
their presence in the global market.
The biggest acquisition in the first half of 2008 has been the Tata Motors'
acquisition of Jaguar-Land Rover from US automobile firm for US$ 2.3
billion. During this period, another auto major, Mahindra & Mahindra has
acquired three Italian companies - G R Grafica Ricerca, Metalcastello
and Engines Engineering. Another event is Daimler AG's acquisition of 26
per cent stake in Sutlej Motors.
The prominent private equity deals in the first half of the year include Golbot
Holding's (a Goldman Sach arm) 3.68 per cent stake in M&M for US$ 175
million, AIG Global Investment's US$ 20 million in Unipart, AIG's 14.5 per
cent in Kinetic Engineering and Phi Advisors' 10 per cent in M&M's
subsidiary First Choice.
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EMERGING TRENDS: SMALL CARS, HYBRID CARS
One of the innovative cars which is prominent in existence in the southern
zone of India is the electric car, Reva. Reva has now begun to capture other
markets too, with emphasis shifting to saving fuel. Other carmakers such as
Hero Electric and M&M are coming out with electric versions.
Recently, after the launch of Nano by Tata Motors, the global automotive
market has shifted its focus on the huge potential of small car segment. The
landmark innovation has shed light on a vast market of potential consumers
who were hitherto unable to afford a car.
The Invest India Incomes and Savings Survey 2007, by IIMS Data works, and
another study by CRISIL Research suggest that there is a huge demand base
for entry level cars in India. The immediate potential demand base for a car of
1.6 million units, according to the former, is based on the respondents, who do
not own a car at present but aspire to own one in the next 12 months. Nearly
all automotive giants have geared up towards leveraging the prospect of this
segment.
Quite a few of Indian auto-makers—Maruti-Suzuki with its 'Splash'
and 'A Star', Hyundai with 'i20', Fiat with 'Grande Punto'—plan to
roll out new small car models by the end of 2008.
General Motors plans to roll out its new mini car next year from its
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Talegaon plant, near Pune. This will be followed by the launch of a
sedan category car named Cruz by 2010.
Tata Motors is also set to offer an all-new version of its Indica, which
has lured the Indian auto consumer segment for the last many years.
Many new players would also make an entry into the small car
segment. Honda, with its much-awaited 'Jazz', and Volkswagen, with
an Indian version of its popular 'Polo compact', are among the
prominent ones.
Global biggies like Toyota and General Motors are also expected to
join the bandwagon by 2010.
Apart from that it is the hybrid car that has caught the attention of the
Indian auto manufacturers. India's first hybrid car, Honda's 'Civic'
sedan has been launched in June 2008.
Following the precedence, home-grown majors like, Tata Motors and
Mahindra & Mahindra are developing hybrid cars.
Even BMW is planning to introduce its hybrid car to India within two
years of its global launch due in the next 18 months.
AUTOMOTIVE MISSION PLAN 2006–2016
The vision of the Automotive Mission Plan (AMP) 2006–2016 is “to emerge
as the destination of choice in the world for design and manufacture of
automobiles and auto components with output reaching a level of US$ 145
billion accounting for more than 10 per cent of the GDP and providing
additional employment to 25 million people by 2016.”
As per the AMP, it is estimated that the total turnover of the automotive
industry in India would be in the order of US$ 122 billion–159 billion in 2016.
It is expected that in real terms, India would continue to enjoy its eminent
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position of being the largest tractor and three-wheeler manufacturers in the
world and the world’s second largest two-wheeler manufacturer. By 2016,
India would emerge as the world’s seventh largest car producer (as
compared to the eleventh largest currently) and retain the fourth largest
position in world truck manufacturing sector. Further, by 2016, the
automotive sector would double its contribution to the country’s GDP
from current levels of 5 per cent to 10 per cent.
LEADING PLAYERS AND SEGMENTS IN WHICH THEY OPERATE
Manufacturer SegmentsAshok Leyland LCVs, M&HCVs, BusesAsian Motor Works M&HCVsAtul Auto Three wheelersBajaj Auto Two and Three WheelersBMW India Cars and MUVsDaimler Chrysler India CarsEicher Motors LCVs, M&HCVs, Buses Electrotherm India Electric Two WheelersFiat India CarsForce Motors Three Wheelers, MUVs and LCVsFord India Cars and MUVsGeneral Motors India Cars & MUVsHero Honda Motors Two WheelersHindustan Motors Cars, MUVs and LCVsHonda Two Wheelers, Cars and MUVsHyundai Motors Cars and MUVsKinetic Motor Two WheelersMahindra & Mahindra Three Wheelers, Cars, MUVs, LCVsMajestic Auto Three WheelersMaruti Suzuki Cars, MUVsPiaggio Three Wheelers, LCVsReva Electric Car Co. Electric CarsRoyal Enfield Motors Two WheelersScooters India Three WheelersSkoda Auto India CarsSuzuki Motorcycles Two WheelersSwaraj Mazda Ltd. LCVs, M&HCVSs, Buses
14 University Business School, Panjab University Regional Centre, Ludhiana
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Tata Motors Cars, MUVs, LCVs, M&HCVs, BusesTatra Vectra Motors M&HCVsToyota Kirloskar Cars, MUVsTVS Motor Co. Two WheelersVolvo India M&HCVs, BusesYamaha Motor India Two Wheelers
MARKET RESEARCH
Market research often refers to either primary or secondary research. Secondary
research involves a company using information compiled from various sources, which
is about a new or existing product.. Primary market research involves qualitative
research (such as focus groups or one-on-one interviews) and quantitative research
(such as surveys) as well as field tests or observations conducted for or tailored
specifically to that product. Primary research, which is also called field research or
original research, is useful for finding new information and getting customers' views
on products.
SCORPIO
Having defined the competitive framework, the next task undertaken was that of
analyzing the consumer. Consumer segments of B and C category car buyers were
analyzed in terms of their expectations from a car, their perceptions about cars and
their relationship. Proprietary techniques of research, of the advertising agency
Interface Communications, like Mind & Mood, ICON and VIP were used to
understand this consumer. The findings were:
* Size matters- big size stands for status
* Consumers seek latest technology
* Imagery but at affordable prices
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* The sheer thrill and passion of driving an SUV
* Power of the vehicle makes a statement
* But along with the others, luxury was a very important parameter
* International vehicles define imagery
SUVs like Pajero, Land Cruiser and Prado are seen as urban vehicles for the rich and
famous consumers aspire to own these vehicles as the imagery of these vehicles has
become very desirable.
“Consumers want to consume premium imagery at prices affordable to them”
The Marketing Environment
Marketing environment consists of the actors and forces outside marketing that affect
marketing management’s ability to build and maintain successful relationships with
target customers. The marketing environment offers both opportunities and threats.
The environment continues to change rapidly. The marketing environment is made up
of Micro-environment and Macro-environment.
The Micro environment consists of the actors close to the company that affect its
ability to serve its customers. These actors are: the company, suppliers, marketing
intermediaries, customer markets, competitors and publics.
The Macro environment consists of the larger societal forces that affect the
microenvironment. These forces are: demographic, economic, natural, technological,
political and cultural forces.
GM STUXX
THE DEMOGRAPHIC ENVIRONMENT
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The demographic position will be on the United States. Since, the target market is for
the middle class; it will provide a boost for the 32% of the total population. This
product will produce a superior value to customers who always value the brand. Also,
it will keep the popularity of the product at their trend. In this case, more and more
customers will be able to keep this product if it satisfies their condition. Additionally,
the middle class group will be loyal to this product brand and as generation goes by;
this product will be there forever. On the other hand, this product is also designed for
students, and working class people. This is due to the fancy and environmental design.
Students will be so grateful to have fancy car while the working class group will tend
to afford such an affordable environmental car design.
THE NATURAL ENVIRONMENT
This product is basically designed to reduce the carbon emission from fuels and help
to preserve our environment. It is very important to design such car to help decrease
the rate of carbon dioxide from the air and provide a better condition to tackle global
warming. This car will provide a boost to the natural environment because it is safer
and has an image to be friendlier to the environment itself. In this case, more and
more people will tend to buy such car to protect the environment by reducing the
carbon emission to the air.
THE ECONOMICAL ENVIRONMENT
The world is facing a shortage of fuel and it has become an economical crisis to
everycountry. This is evidence as the price of fuel is increasing and the probability of
the price of a barrel to increase at any day is very high. Therefore, this product will
help customers to save money because it consumes less fuel. The fuel consumption is
one of the best criteria based on this product. On the other hand, customers will be
able to satisfy with this kind of product because it is not too expensive and everybody
has the privilege to afford one. This product will satisfy the superior value of all
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different customers since it has a very good design to solve to fuel shortage, less
expensive, and can be affordable to anyone.
THE TECHNOLOGICAL ENVIRONMENT
The fastest growing of information technology helps this product to be at its best. Its
design is basically provided with the help of information technology. Looking at its
design, this product benefits a lot from the technological sectors. This proves that this
product is favourable to the environment. Also, this product can be modified or even
upgraded to the standard where it will be suitable at any environmental condition. The
Information technology is very effective in letting this product to be very efficient. In
this case, it helps customers to satisfy this kind of product in this technological
environment.
THE SOCIAL AND CULTURAL ENVIRONMENT
It is believed that protecting the environment is a great concern. Therefore, this
product is purposely designed to be environmentally friendly. As a result, most people
in the United States and elsewhere are willing to offer such kind of product to save the
environment. If more and more people are keen to buy such kind of product then the
environment would be safe at any cost. Consequently, people will be more supportive
to save what is best for the communities and the environment.
SEGMENTATION
A market segment consists of a group of customers who share a similar set of wants
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The marketer does not create the segments; the marketer’s task is to identify the
segments and decide which one(s) to target. Segment marketing offers several
benefits over mass marketing. The company can create a more fine-tuned product or
service offering and price it appropriately for the target segment. The company can
more easily select the best distribution and communication channels, and it will also
have a clearer picture of its competitors, which are the companies going after the
same segment.
In the context of automotive sector, we would be classifying it in the following ways-:
BASED ON THE PRICE OF THE CAR
BASED ON THE LENGTH OF THE CAR
BASED ON THE USER SEGMENT
BASED ON THE PRICE OF THE CAR
On the basis of price of car we can segment the car in following ways-:
Economy Segment
o The economy segment of car ranges up to Rs. 2.5 lacs. The products in
ths segment are Maruti 800, Alto and the newly launched product of
TATA motors i.e. NANO.
Mid- Size Segment
o The mid-size segment of car ranges from 2.5 lacs to 4.5 lacs. It
includes the products like Hyundai santro, Maruti zen, Tata Indica etc.
Luxury car segment
o The luxury segment of car ranges from 4.5 lacs to 10 lacs. It includes
the products like Honda city, Hyundai Verna, Mahindra Scorpio etc.
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Super luxury car segment
o The super luxury segment of car ranges above 10 lacs. This segment
satisfies the elite class of the society. It includes the products like
Skoda Laura, Honda Accord, BMW, Mercedes, Audi etc.
BASED ON THE LENGTH OF THE CAR
A segment- Cars that are less than 3.5 meters long (800, omni)
B segment- Cars between 3.5 meters to 4 meters long( Zen, SX4, Santro)
C Segment- Cars between 4 meters to 4.5 meters long (Verna, Honda city,
ford fiesta)
D segment- Cars that are more than 4.5 meters long( Mercedez, Sonata,
Accord, Skoda)
BASED ON THE USER
Segmentation of automotive sector is also based on the user of the products. Like the
example of TATA Motors, when it observed that their product ‘INDICA’ is used
extensively by the taxi operators, it came up with a new model of the car having
Round Tail Lights to distinguish it from the car having vertical tail lights used by the
individual buyers.
Individual Buyers
Taxi operators -:
Government /non-government institutions
TARGET MARKETS
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The segment that gives the greatest opportunity to the marketer is called target
marketing.
VOLVO MOTORS
Volvo Motors develops its cars for buyer to whom automobile safety is a major
concern. Volvo therefore positions it’s as a safest a customer can buy.
.
HYUNDAI MOTORS
Hyundai marketing strategy is differentiated marketing. Its primary consumer target
is middle to upper income professionals who need true value for their money and
comfortable ride in city conditions. Its secondary consumer target is college students
who need style and speed. Its primary business target is midsized to large sized
corporate that want to help their managers and employees by providing them a car for
ease of transport. Its secondary business target is entrepreneurs and small business
owners who want to provide discounts to managers buying a new car.
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To attract young generation Hero Honda sponsored MTV Roadies. It is the one of the
most popular Show among
youngster. A Live reality show in
which some group of people travel
across the country on the bike.
They ride HERO HONDA
KARIZMA. This show become the
key factor in promoting the bike
karizma between the youngster
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HERO HONDA CAMPUS ROCK IDIOLS
In today scenario in India rock culture is becoming very popular among
youngster. To capture this young generation, Hero Honda is organizing
Campus Rock Idols every year at all over major cities in India.
HERO HONDA SA RA GA MA PA CHALLANGE
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Brand Ambassadors
CRICKETERS
Hero Honda promotes his cricketers brand ambassadors as a ‘Team Ambition’ in
2003 World Cup. The 'Team Ambition' has many similarities in personality with the
Hero Honda brand, such as 'splendor of performance', 'passion to excel' and 'ambition
to win', signifying their respective desires to lead the way
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Hero Honda, through the advertisements, hopes to communicate the brand identity
to its customers in a language and appeal that is well identified and comprehended
by them.
FILM STAR
Hero Honda signed bollywood star Hrithik Roshan for his
premium bike Karizma. The customised all-chrome
Karizma, a very stylish bike that truly befits his brand
ambassador and style icon Hrithik Roshan
BOLLYWOOD STAR
HRITHIK ROSHAN
HERO HONDA SIGNED MAHESH BABU A SUPERSTAR IN ANDHRA PRADESH TO CAPTURE MARKET IN AP
Hero Honda -India‘s number one two wheeler in sales. Now
this big company is roping Mahesh Babu as their Brand
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ambassador for AP. The company is very much confident that young Mahesh Babu
brings them up in their sale figure and at the same time Mahesh Babu‘s fan following
will be utilized for brand image of Hero Honda.
HERO HONDA KARIZMA
Hero Honda Karizma was the first real sports bike in India. The bike addresses to
those who have a passion for speed and styling and head-turning looks. It has 17 ps
power thrust and picks up 0-60 in 3.8 heart-stopping seconds. The bike is based on
power and styling. Disc brakes and Mag wheels makes Karizma the safest jet on the
road.
Company Stroke Maximum Power Displacement Hero Honda Motors India Ltd. 4-
Stroke 16.8 bhp @ 7000 rpm 232 cc
Striking Features:
1. Style
2. Sporty position of the seat.
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3. It stands on its feet even at speeds reaching up to 130 kmph.
S.W.O.T. ANALYSIS OF KARIZMA
STRENGTH
• It has a good speed and sporty look
.
• Karizma is the First bike in India launched under Sports Bike Segment.
• Loyal Customer Base: In the past four years, Karizma has been successful in
building up a good and loyal base among its customers.
• After Sales Service: Till today, customers are satisfied with the after sales service
provided by Hero Honda for this particular product.
• Refinement, comfort, great handling and that much-sought-after big bike feel are all
available on the Karizma.
• Brand Recall: the name Karizma itself is a metaphor to its success. The brand
Karizma has given a good platform to this product in the Sports Bike Segment.
WEAKNESS
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• High Maintenance: The maintenance of Karizma is high as compared to its biggest
competitor Bajaj Pulsar 200cc and 220cc.
• Fuel Efficiency: The pulsar 200cc offers an impressive mileage of 38.3kpl in city
and 42.4kpl in highway against the Karizma offers only 30kpl in city and a decent
figure of 45kpl in highway.
• Less Promotion: the promotions and ads of Karizma are very less as compared to its
competitors.
OPPORTUNITIES
• If Hero Honda comes up with the idea of changing some features of Karizma, like
self cancelling indicators, soft touch handle bar and digital speedometer, it will help
them to boost up the sales of Karizma.
• If they are able to improvise the fuel efficiency of Karizma, it will be a golden
opportunity to take over the market.
THREATS
• The major threat faced by Hero Honda Karizma is from Bajaj Pulsar, who has
always been the market leader in the 150 plus segment with 60% market share.
• Karizma’s strong competitors Bajaj and TVS, in 150 cc plus segment, already
posses certain features like self-controlling indicators, soft touch handle bar which
Karizma lacks.
• The competitor Pulsar 200cc has already come up with oil cooled engine which
delivers maximum power. This is again a major threat to Karizma.
81 University Business School, Panjab University Regional Centre, Ludhiana
AUTOMOTIVE
S.W.O.T. ANALYSIS OF COMPETITOR
(BAJAJ PULSAR 220cc)
STRENGTHS
• Pulsar 220cc features India’s First Oil Cooled Engine which delivers maximum
power making it most powerful engine offered by Bajaj.
• New Pulsar also provides Digital Speedometer, Self Cancelling Indicators which is
for the First time in this segment in India.
• Fuel efficiency: Pulsar 220cc delivers an impressive mileage of 38.2 kmpl in city as
compared to Karizma which delivers 30 kmpl in city.
• Customer Base: In past decade Bajaj has established a strong base amongst its
customers.
82 University Business School, Panjab University Regional Centre, Ludhiana
AUTOMOTIVE
WEAKNESS
• Style and Design: PULSAR 200cc and 220cc derives their styling from there
previous version Pulsar 150 Dts-i and 180 Dts-i.
• Pricing; Bajaj 220cc (Rs 82449 basic price) is costlier than karizma (Rs 78000 basic
price)
OPPORTUNITIES
• Taking into consideration the reviews of the customers regarding the “fairing” of
220cc and making the needful changes will be an opportunity to capture an even
larger share of the 200cc+ segment.
THREATS
• The biggest threat is faced from the goodwill of Karizma in this segment who is the
“Four-Stroke Two Wheeler Ruler” of the Indian bike market.
• Certain technical faults in the bike design which are potentially dangerous to the
rider’s safety can be disastrous to the image of the bike.
Brand Image create By Bajaj
Brand image create by Bajaj through his pro bike showroom which display his
premium bikes range such as pulsar 220, Avenger, Pulsar 180 etc.
BAJAJ’s Pro Bike Showroom
The Bajaj Prebaking showrooms will definitely be
one of the integral elements in his overall brand
strategy to reinforce the image of Bajaj being a
manufacturer of quality performance motorcycles in
83 University Business School, Panjab University Regional Centre, Ludhiana
AUTOMOTIVE
the country. It's the retail experience a dedicated biker feels when he or she steps into
a Probiking outlet. It's a new space they have created and there's a lot of work to be
completed.
BAJAJ PULSAR ‘DEFINATELY MALE’
Bajaj pulsar make an image of that there bike is only for guys. Through his Definitely
Male Campaign they shows behave of a young guys. This Advertisement helped lot
Bajaj to create brand positioning.
Chatting merrily, three girls
Walk by a line of motorbikes.
One's dupatta skims over the
bikes and then gets stuck...
...making her turn in
Consternation. She pulls it away
Slowly to reveal...
... The logo, "Pulsar". MVO: Bajaj
Pulsar, definitely male
84 University Business School, Panjab University Regional Centre, Ludhiana
AUTOMOTIVE
MARKET MIX OF KARIZMA
PRODUCT
DESIGN, ENGINEERING AND INTERIORS
Hero Honda has taken a lot of styling cues for this bike from Honda’s old model VFR
800, the Japanese giant’s legendary and largest selling superbike. Similarities are
visible in the alloy die-cast wheels, the tailpiece, the front indicators, the fairing, the
silencer unit, seat, panel shapes and instrument binnacle. Even the way Hero Honda
has painted parts of the side panels silver to look like exposed aluminium frame
sections, reminds one of the genuine thing on the VFR. One cannot help but think that
the steering column section of the bike looks crude and empty just below the
handlebar mounts. Fit and finish is excellent and no less than the high standards we
have come to respect Hero Honda for. The company has kept with the times, and
grafted an aircraft-type fuel filler cap onto the tank. The tank recesses easily
accommodated the legs of our tallest testers. The amber backlighting for instruments
is exciting. Being connected directly to the battery, all lights and instruments work
independently of the rpm of the engine, and are a boon at night.
85 University Business School, Panjab University Regional Centre, Ludhiana
AUTOMOTIVE
BRANDING:
BRAND NAME: KARIZMA
In Hindi, “KARISHMA” means “something inexplicably magical”. In English,
“CHARISMA” (pronounced Karizma) means “the ability to inspire followers with
devotion and enthusiasm”. The way this bike has turned out to be, it is probably both.
The monogram of Karizma itself is very attractive and eye catchy because of the
colour.
In order to overcome the competition faced from its biggest competitor bajaj220 dts-I,
the company has tried to attract the customers by changing the graphics of Karizma
i.e. an attractive new logo, which represents the bike’s cutting edge imagery of being
racy.
International styling graphics with a pronounced `R’ on the tank and an asymmetrical
one on the visor in keeping with the latest international trend.
PRICING
the new Karizma will also continue to be priced at almost the same level as the
previous version, with on-road prices for the regular variant working out to Rs
79,000-80,000. The special edition variant with red mag-wheels will be costlier by
about Rs 1,000. Bajaj has launched 52 Prebaking outlets – which will house only high
performance bikes. Pulsar 200cc would be available at such Probiking showrooms at
select locations across the country for an attractive price of Rs.65, 497 (ex showroom,
New Delhi).
86 University Business School, Panjab University Regional Centre, Ludhiana
AUTOMOTIVE
PROMOTION
ADVERTISEMENT:
Hero Honda Karizma
Agency:
A fighter plane is on a regular sortie when the pilot notices a moving object. Zooming
his camera, he captures a bike cruising at high speed. Informing the control tower, the
pilot dives in for a closer look.
The bike gathers speed and enters a tunnel to beat the fighter aircraft. Reaching the
air-base, the rider meshes with the staff as they examine the images... ... of the
motorcycle, unaware that its owner is amidst them. MVO: "Hero Honda Karizma. Jet
Set Go."
87 University Business School, Panjab University Regional Centre, Ludhiana
AUTOMOTIVE
The all-new-Karizma has been created by the Hero Honda’s research and development team to mark the company’s highest-ever sales of over 3.03 lakh units in May 2006.
Celebrating its milestone of rolling out 15 million bikes, two-wheeler major Hero Honda, presented a tailor-made ‘all-chrome Karizma’ motorcycle to Bollywood star Hrithik Roshan.
“This super bike will surely match my super hero image,” Hero Honda brand ambassador Hrithik said, as Hero Honda Managing Director Pawan Munjal handed over the keys to the star.
HERO HONDA MTV ROADIES
In mtv roadies the all competent use only the Hero Honda karizma bike from the last six years. So, by sponsoring the show hero Honda promoting their brand karizma among the youngster.
88 University Business School, Panjab University Regional Centre, Ludhiana
AUTOMOTIVE
The Hero Honda family is elated to have achieved the landmark figure of 15 million
motorcycles in the shortest ever time-span. The customized all-chrome Karizma truly