A PROJET REPORT ON “HERO HONDA MARKETING STRATERGY” IN CONTEXT WITH “HERO HONDA” DURG (C.G) Submitted in the partial fulfillment for the award of degree of BACHELOR OF BUSSINESS AMINISTRATION Of Pt.Ravishankar Shukla University, Raipur (C.G) Session 2007-2010 Submitted by ABHISHEK KUMAR
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A
PROJET REPORT
ON
“HERO HONDA MARKETING STRATERGY”IN CONTEXT WITH “HERO HONDA”
DURG (C.G)
Submitted in the partial fulfillment for the award of degree of
BACHELOR OF BUSSINESS AMINISTRATION
OfPt.Ravishankar Shukla University, Raipur (C.G)
Session 2007-2010
Submitted by
ABHISHEK KUMAR
DEPARTMENT OF MANAGEMENT SHRI SHANKARACHARYA MAHAVIDYALAYA
SECTOR-6 BHILAI (C.G)
Certificate
To whom may ever it may concern
This is to certify that abhishek kumar student of B.B.A 6th sem of shri shankaracharya mahavidyalaya , bhiai has carried a research project on the topic to hero Honda under my supervision . This report is original and data collected by the researchers him self are true authentic up to my knowledge.We wish abhishek success in his professional career .
Declaration
I abhishek kumar student of sixth semester at ‘
shri shankaracharya mahavidyalaya ‘ here by declare that these research report
under the title is the record of my original work under the guidance of Mr.
Sandeep Jaswant (H.O.D ) B.B.A . These report has never been submitted any
where for award of any degree or diploma.
Place:
Date:
Department of BBAShri shankaracharya mahavidyalaya sector-6
bhilai (CG)
Certificate
This is to certify that abhishek kumar a student of B.B.A sixth semester at our institute under my guidance and supervision he had carried out the
research project under title
“ marketing strategy of hero Honda“
This research report is the original one.
Place:
Date :
Project guide (lecturer) Department of
B.B.A SSM Bhilai
Acknowledgement
Perhaps the most awaited moment of any endeavor in its successful competition of their project report cases study having worked on her project for the whole academic session. I would like to express my sincere gratitude to all those who made it possible.
Firstly I am humbly and respectfully to my guide Mr. Sandeep Jaswant (H.O.D) of the B.B.A department under whose able guidance. I had the privilege to work and who guided at every stage.
I take this opportunity to express my sincere gratitude to our principle for being guide of philosopher throughout B.B.A program.
I shall be failing in my duty if I don’t express my deep sense of gratitude to all my friends and the relatives who have share their valuable time and helped me directly or indirectly in the preparation of their project .
At the end last but not the least, I would like to thanks the other staff and non staff member the of this college.
(B.B.A sixth semester)
Preface
The topic chosen by me for my project is marketing strategy “In reference to hero Honda automobiles the two wheeler especially in the stylish motorcycle. At present hero Honda is market leader in the Indian market.
Today there are various companies coming in Indian and these certainly will exist a cutthroat competition in these field . I have chosen a hero Honda as a topic essence of my project .today two wheeler consumer due to new manufacturing entrant has started getting a wide choice while buying one these gave to considered the facility provided by the two wheeler the price mileage , maintenance and service etc. while buying a two wheeler .
A normal customer is quit puzzled and faces for an uneven some time huge
problems in deciding which vehicle to buy. I realized the problem and decide to take
these up as the challenge and provide answer to as the requirement of the Hero
Honda.
Chapter - 1
Introduction
Satisfaction is the persons feeling of pleasure (or) disappointment resulting from comparing a
product perceived performance (outcome) in relation to his/her expectation. if the performance fall short of expectation the customer is dissatisfied . if the performance matches the exception the customer is satisfied if the performance exceeds the expectation the customer is highly satisfied ( or ) delighted many companies are aiming for high satisfaction because they are much ready to switch. ] Buyer’s expectation formed on the basis of past buying experience, friend and the associate advice and the marketers and the competitor’s information and promises. if marketers raise expectations two high , the buyer is likely to be disappointed . Even if the company sets expectation should match the performances.
≈} A customer is the most important person even in any company≈} A customer never depend on company, but the company depends on him.≈} A customer is the person who bring company his Wants.
≈} A customer is not a interruption of marketers Work he is the purpose of it.
Two wheelers in India
In 60 decade several vehicles were running in the Indian roads those are the sun beams, AIS, BBA and Royal Enfield. From these motor cycles only the Royal Enfield has existence in the motorcycle market.
After 60 decade some other motorcycles and scooter had been launched in Indian two wheeler market those are the Rajdoots, Java, Vespa and Lamrata .
Indian witrossed the first spate of modernization in two wheeler industry in 1978-79 during that period Piaggio sauntered the Indian market in a joint venture with the Lohia machines and our
major Japanese motor cycle manufacture set up joint venture companies to produce 50cc two wheeler for the first time.
Objectives of the study
≈} To know the customers expectations towards hero Honda.
≈} to find out the customer opinion regarding
Various aspect of the bike.
≈} To give the appropriate suggestion to the company regarding he performances.
Our brand
Our brand identity: Our brand is the visual
expression of the ought and the action it conveys to everyone
our intention two constantly inspire the confidence.
Our customers are the primary audience for our brand.
Indeed, our brand identity is shaped as much by their belief in hero Honda as the as it it’s our brand.
We can do this by the living on the brand essence and by continuously seeking to enhance our customer experience.
In doing so, we ensure a special pace for our self in the heart and in the mind of the customer.
Our brand essence
Our brand essence is thje soul of our brand
Our brand essence encapsulates or mission at Herohonda
It is the singular representation of our terms of endearment with our customers.
It provies the basis on which we grow profitability in the market.
Our brand essence is excitement
Hero Honda strives to inspire the confidence through te excitement engineering.
Blending together youthfull creativity and competitive technology to exceed the spoken and the implict expectations of our customers.
By challenging the given . by exploring the unknown and
thereby stretching ourself towards tomorrow, today.
Learning
Learning is how we insure our proactively
It is the values that embraces knowledges as the plat form for the building well informed.
Innovation
It is how we can create the future
It is that which provokes us to reach beyond the abivous in persuite of that which exceeds the ordinary.
Speed
It is how we convey clear convection.
It is the value that keeps us sharpley responsive , mirroring our commitment towards our goal and process.
Chapter -2
History
India has the largest number of two wheeler in the world with41.6 million vehicles. India has a mix of 30 percent automobile and 70 % two wheeler in the country. India was the second largest two wheeler manufacture in the world starring in 1950’s with the British automobiles product of India (API) that manufactured the scooter. API manufacture the lamberts but, another company Bajaj automobiles LTD. Surpassed API and remaining through the turn of the century from its association with piaggio of Italy
(Manufacturer of Vespa)The license raj that exist between the
1940s to 1980s in India , did not allow the
foreign companies to enter the market and import were tightly controlled .these regulatory maze , before the economic liberalization , made the business easier for local player to have a seller market . Customer in India was forced to wait 2 years to buy a scooter from Bajaj. The CEO of Bajaj commented that he did not make a marketing department, only in dispatch department. By the year 1990, Bajaj has a waiting list that has twenty six times of annual output for scooter.The motorcycle segment has the same long wait time with three manufacture; Royal Enfield, ideal Jawa and Escorts. Royal Enfield made a 350cc bullet wit the only four – stroke engine at that time and took the higher end of the higher end of the market but , there was little competition for there costumer . Ideal Jawa and escorts took the middle and lower end of the market respectively.
In the mid-1980s the Indian government regulation changed and permitted companies to enter the Indian through minority joint venture. The two wheeler market with for indo Japanese joint venture: Hero Honda
TVS S Suzuki, Bajaj Kawasaki and kinetic Honda. The entry of these foreign companies changed the Indian market dynamics from the supply side to demand side with a large selection of two wheelers on Indian market customer started gain over the product they bought and raise the higher customer expectation.
Hero entered the joint venture for technical and financial participation with one of the largest automotive makers
Honda motors company limited of Japan, in 1984 for the manufacturing of 100cc motor cycles in India.
Group companies Hero corporate service limited – Hero mind mine –munlal
In 1984-1985 HHML came in existence by collaboration of hero motor limited and Japans Company Honda motors limited for the first 100cc with four stroke motorcycle is made by Hero Honda motor limited in India.
Company profile
Hero is the brand name used by the Munjal brother in the year 1956 with the flag ship company hero cycle’s .the two wheeler manufacturing business of bicycle component had originally started in the 1940’s and turned in the world largest bicycle manufacture today. The Munjal run their own steel make free wheel and other critical bicycle component and and have diversified in to different like product design. the Hero group philosophy is; “ to provide excellent transportation to the common man at easily available and affordable and to provide the total satisfaction in all its sphere of activity “he hero group has a passion for setting the higher standard and engineering satisfaction is the prime motivation way of life and work culture of the group .
In year 1984 Mr. Brijmohan lal munjal , the chair man and managing director of hero Honda motors , headed an alliance between the Munjal family and Hero Honda company LTD HHM mission statement is :” we, at hero Honda , are continuously striving for synergy between technology , system and human resources to provide product and services that meet the quality price and aspirations of the customer”.
CD DELUXECandy blazing red, cloud silver, candy Tahitian
blue, amaranth maroon, cool mint grey.
SPLEDOUR black candy red , blaze , boon silver, metallic, sierra metallic, granti blue metallic.
PLEASURE Orange , Candy blazing red, grey silver,
Tahitian blue metallic.
CD DAWN Black ,maroon, red
CD 100SS Candy ruby red black , amazing blue metallic,green metallic.
PASSION PLUS Moon yellow, cloud silver ,amaranth maroon, Tahitian blue, Candy blazing red,black with
purple strips. KARIZMA Green , sky blue black metallic, yellow shade.
Hero Honda’s Marketing Strategies in India
New Delhi, October 21, 2008: Hero Honda Motors Ltd (HHML), the world's largest two-wheeler company for seven consecutive years, today firmly reiterated its undisputed leadership in the domestic two-wheeler market with impressive bottom line growth for the second quarter (Q2) – July to September - of this financial year (FY) 2008-09.
Even as the industry continued to face tough market conditions on
account of uncertainty over interest rates and overall credit squeeze, the company reported 50 per cent growth in profit after tax (PAT) at Rs 306.30 crore for the second quarter. Hero Honda's profit after tax in the corresponding period last fiscal (July - Sept, 2007-08) stood at Rs 204.33 crore.
Total turnover (Net sales & Other Operating income) grew to Rs 3202 crore, a growth of 35.6 per cent over Rs 2361 crore recorded in the corresponding period last fiscal. The company has recorded an EBIDTA margin of 13.58 per cent in the quarter. The EBIDTA margin in the previous quarter (April - June '08) was 12.20 per cent.
The strong financial performance is in line with the company's better-than-industry top line growth. After posting a growth 11.38 per cent in the first quarter, the company kicked off the second quarter with a 39.8 per cent growth in sales in the month of July, and followed up with 26.8 per cent growth in August and 22.4 per cent in September. Hero Honda consistently keeps growing its share in the domestic motorcycle market, and currently enjoys over 55 per cent share.
Dr. Brij Mohan Lall, Chairman, Hero
Honda Motors Ltd,
Said "We are happy with our financial performance. It gives immense joy to see this kind of results in the 25th year of our company. I wish to thank all our stakeholders – customers, associates, dealer friends,
ancillaries and also our joint venture partners Honda Motors Co – for their continuous support."
Mr. Pawan Munjal, MD & CEO, Hero Honda Motors Ltd, said "Our numbers speak for themselves. Even in this volatile and competitive environment, our top line continues to outpace the industry growth, our market share is at an all time high, and the financial balance sheet is a delight – all the factors which form the hallmark of a resilient company with cutting-edge management. We will continue to keep innovating – in bringing in technologically-superior products, in our network expansion, in brand building, in our financial management, and in our communication."
"Going forward, we will have to keep a close watch on the commodity prices movement, and other factors such as inflation, interest rate scenario and availability of retail finance. These factors will play a crucial role in the industry growth in the subsequent quarters," he added.
Mr. Pawan Munjal, Managing Director, Hero Honda Motors Ltd ,
“The year 2007-08 has seen a leadership performance from us. Despite the industry slowdown, we have been able to manage positive growth thereby taking our share in the domestic motorcycle market upward of 52 per cent. At the end of the financial year, I would definitely like to thank our millions of customers across the country, who have made it possible. We will continue to focus on our customers and they can surely look forward to many more launches and various initiatives in the coming year.”
HHML’s good run through the industry slump in 2007 has been possible due to the company’s multi-focal strategy of bringing in new models and variants across segments, supporting them with innovative communication across media, leveraging properties such as cricket and entertainment for brand building and augmenting its distribution network
(HERO HONDA CONSOLIDATES MARKET LEADERSHIP WITH IMPRESSIVE GROWTH OF
15% IN MARCH’09FOR FY 2008-09, HERO HONDA OVERTAKES PREVIOUS FISCAL’S SALES TALLY, EVEN AS DOMESTIC MOTORCYCLE INDUSTRY DECLINES BY MORE THAN 10 %)
HERO HONDA CONTINUES TO CONSOLIDATE MARKET LEADERSHIP WITH 27 PER CENT GROWTH IN AUGUST SALES
New Delhi, Tuesday, April 21, 2009: Reports robust sales of 305,516 units during the month
Mr. Anil Dua, Sr. Vice President (Marketing & Sales), Hero Honda Motors Ltd,
“Our strategy is yielding results. The strategy hinges on creating winning brands across segments, investing in brand building, exploring untapped markets in rural and upcountry areas while consolidating urban presence and rapidly expanding our network. However, the industry continues to face uncertainty on account of high interest rates and overall credit squeeze. The festival month of October is going to be crucial in determining the overall outlook of the industry for the year.”
Key Hero Honda brands continue to drive strong volumes across segments - CD Deluxe in entry segment, Glamour, the new Splendor NXG, Splendor + and Passion Plus in deluxe segment, and Hunk, CBZ X-treme and Karizma in the premium segment.
Hero Honda’s scooter Pleasure has also been growing strongly, with more than 12,000 units being sold in August this year.
New Delhi, Tuesday, April 21, 2009: Highlights
Corporate performance: • Consolidated over 50% share in the domestic motorcycle market
• Reported highest ever sales in a month in October 2007 (365,022 units)• Crossed half a million retail sales in the festive season• Closed calendar year 2007 with sales of over 33 lakh two-wheelers
Mr. Pawan Munjal, Managing Director & CEO, Hero Honda Motors Ltd.
said, “Given the industry slowdown scenario, we are very enthused by our robust financial numbers for the third quarter. However, this was not unexpected. We had undertaken some strategic initiatives since the beginning of this fiscal, including a conscious effort to rationalize costs across the board, and its results are now visible. Our bottom line has seen a consistent
improvement, and we have been able to demonstrate that it is possible to keep gaining market share while maintaining a robust bottom line.
“With input costs softening and our sharp focus on cost efficiencies, we should be able to further improve upon our financial results,” he added.
Hero Honda's strategy for aggressive top line growth through new product launches, brand building initiatives backed by innovative communication has resulted in market share gain across every segment. Indeed, Hero Honda’s share in domestic motorcycles market has been growing upward of 50 per cent, despite the slowdown in the two-wheeler industry.
SEGMENTATION, TARGETING & POSITIONING
From the current segmentation, targeting & positioning and consumer surveys we found that our client has targeted the following segments:
Congested areas of urban cities.
Males/Females between the age group of 18-36
Middle class people , mostly officials & executives
The client analysis from our questionnaire it was found that our client has targeted the right segment
HHML & TVS is overlooking one feature in bike which is its low maintenance cost and reliability (i.e. less chances of breakdown) which
is absent in its competitors. Therefore, in order to meet the sales target, two options are available with the client; one is to redesign the bike and second is to reposition the bike as “Bike with one time investment”. Since redesigning of bike may involve a big task and huge investment therefore we recommended repositioning the bike.
The gap between motorcycles sold by Hero Honda and its closest rival is approximately 1 m units (23% of industry size). One of the reasons for the tremendous performance of Hero Honda is the significant increase of share of motorcycles in the two-wheeler segment, from 42% in FY99 to 77% in FY04. No doubt, that the shift in preference of Indian populace from scooters and mopeds towards motorcycles has facilitated the growth of Hero Honda. However its performance vis-à-vis industry indicates that the performance of Hero Honda was better than the industry peers, barring two years. In the seven-year period ending FY04, it has achieved a CAGR of 30% in two-wheeler volumes against 11% of the industry.
Key factor of marketing strategy“India and Bharat co- exist today. India comprises of fast growing cities and town; Bharat is made up of villages entering the economic main stream. We seek to walk & march with both India and Bharat”
Positioning Segmentation
Targeting
Strong Fundamentals
The company has clarified about its intention of
setting a third plant in addition to its existing two
plants. The company has embarked upon a green
field expansion plan and has earmarked Rs 2 bn for
the same. It should be noted that the company has a
strong cash flow position, it generated Rs 9 bn from
operation in FY04 and is virtually a debt free
company.
EXAMPLES Super Splendor
This Bike comes with 125 cc new generation quantum core engine with an output of 9 bhp (6.7 kw). Its relaxing seating arrangement with other comfort features like less strain while clutching and declutching, low noise and less vibration engine etc, makes it more market friendly bike.
For the convenience of the biker, there are few features included here are trip meter, peep hole, large utility box etc. Some safety features included here are pass switch and push cancel indicator switch, muffler with heat shield etc.
Splendor +
4 stroke single cylinder lair-cooled, OHC engine delivers power of 5.5 Kw (7.5PS) @ 8000 rpm . Running with the maximum mileage of 85 kmph, this bike is giving the optimum satisfaction for long journey. Its double cradle frame gives the steadiness in biking. Its wider 1230 mm wheelbase provides the proper base for safer riding.Lighting fitting included in it like multi reflector with halogen bulb makes the biking secured at every time.
Splendor NXG
Splendor NXG comes with a new engine and pioneering features and combines stylish looks with a high performance engine. It features trapezoidal multi -reflector headlamps which is powerful even at low speeds. This is achieved by powerful battery which powers the DC high beam in the headlamp and its strength is not dependent on the engine rpm. Circuitry for the low beam and pilot lamp has also been enhanced for low variation in intensity arising from changes in the engine rpm.
Hero Honda used Above the Line Promotion because in the
Above the Line promotion co. members used advertisement
through Radio, T.V., Newspaper and Other media
communications.
Place: -
Geographical Placing: - Geographical placing of the product has divided into 4 markets and these are: -
1. Local
2. National
3. Regional
4. International
Hero Honda used National Market for sale the Hero Honda Splendor.
Considering all facts of marketing in a unique way for
proper and efficient definition of marketing.
Marketing threats
MANAGING RISK IS HALF THE BATTLE WON
RISKS AND CONCERNS
• Slowdown: Sales in the lucrative premium two wheeler segment (150 cc and above) have been affected by the economic slowdown; a quick return to robust growth is unlikely, and this could affect Hero Honda's near term plans for an increasedpresence in this segment.
• Interest rates: Lending rates have started softening but effective lending rates for the two-wheeler industry remain high on account of risk aversion by banks. However, Hero Honda has de-risked its business by focusing on segments which are not too dependent on financing. Still, if interest rates for two-wheelers continue to remain high and the overall credit-squeeze persists, it is likely to adversely impact the company's efforts in realizing its full growth potential.
• Inflation: After climbing to double digits in the first half, inflation growth was close to zero per cent by year-end. However, high fiscal deficit and rising food prices could push up inflation again during the year. Rising inflation may limit the downwardtrend in interest rates.
• Increasing competition: Several two-wheeler companies introduced new models in the lucrative premium segment; over time this could impact the profitability of this segment. At the same time, the expected fresh competition in the 100 cc segmentin 2010 poses a challenge to the company's stronghold on this segment.
• Input costs: Prices of critical inputs came down during the year thanks to lower commodity prices. However, prices may be close to bottom levels, and may start perking up in the second half of the coming year if there is an economic revival.
HERO HONDA'S PERFORMANCE
SETTING THE BENCHMARKHero Honda was the torchbearer for the two-wheeler industry during the year in review. It sold more two wheelers during the year than the combined volumes of the second, third and fourth placed competitor.Overall, the company sold 3.72 million two-wheelers, up 12 per cent. Motorcycle sales in the domesticmarket, which account for more than 95 per cent of Hero Honda's sales, were up 11 per cent.
During the year, the company also turned in a rollicking performance with its scooter portfolio, with a 49 percent growth in domestic sales to 156,210 units. This performance allowed Hero Honda to increase its sharein the domestic scooter market by more than three percentage points. Hero Honda's performance in the two-wheeler industry was the only standout performance during the year amongst the large players. Without Hero Honda's numbers, the two wheeler industry growth would have been marginal.
These prime constitutes a proper set up of the marketing program in order to get the desired output.