1.

Understanding the market and competition: You are expected to study and analyze the
market for your product and brand, competition, besides the market share

Introduction of 2-wheeler industry with History

Division of 2-wheeler into bikes/scooters/mopeds and extension of product line to EV

Define Brand: Brand products like cycles, finance, bikes, etc.

Hero Moto Corp: Company Profile and % retail of Bike and scooters

Define Market and competitor break up – Price and engine capacity. Rank competitor based on sales
numbers

Factors affecting Market and Marketing Mix for bikes

Core of marketing : 4 ps of Hero moto Corp.

Bike industry: Previously, there were only a handful of two-wheeler models available in the country.
Currently, India is the second largest producer of two-wheelers in the world. It stands next only to
China and Japan in terms of the number of two-wheelers produced and the sales of two-wheelers
respectively. In the year 2005-2006, the annual production of two-wheelers in India stood at around
7600801 units. The trend of owning two-wheelers is due to a variety of facts peculiar to India. One of
the chief factors is poor public transport and low per capita income (more reasons can be added) in
many parts of India. Additionally, two-wheelers offer a great deal of convenience and mobility for
the Indian family. Distribution of bikes/scooters/mopeds as on date.(Pie chart if possible)

History:

Bajaj auto began trading in imported Vespa Scooters in 1948. Meanwhile Automobile Products of
India (API) commenced production of scooters in the country in the early 50's. Until 1958, API and
Enfield were the only producers of two-wheelers in India. However, Bajaj signed a technical
collaboration in 1960 with Piaggio of Italy to produce Bajaj Scooters. This deal expired in 1971. The
condition of motorcycle manufacturers was no different. Until the mid 80's, there were only three
major motorcycle manufacturers in India namely Rajdoot, Escorts, and Enfield. The two-wheeler
market was opened to foreign manufacturers in the mid 80's. The industry, which had seen a
smooth ride before, faced fierce foreign competition. Motorcycle companies like the Yamaha,
Honda, and Kawasaki, set up shop in India in collaboration with various Indian two-wheeler
companies. Companies like Escorts, Rajdoot and faced immense competition from smaller 100 cc
Japanese technology motorbikes. Bikes manufactured by Hero Honda, the only company
manufacturing four-stroke bikes at that time, gained massive popularity. In the mid 80's, Kinetic
introduced a varied gearless scooter in collaboration with Honda. This scooter became instantly
popular with the younger generation, especially people who found it difficult to use geared scooters.
The introduction of scooters created another segment for people such as women and teenagers who
could not get used to driving either motorcycles or gearless scooters. Many companies such as
Kinetic, TVS, and Hero also started manufacturing mopeds that proved immensely popular with
people who wanted a simple riding machine. The change in the government's policy owning to
pollution control norms and the Kyoto agreement saw the phasing out of two stroke two-wheelers
from production. Currently there are around 10 two-wheeler manufacturers in the country, they
being Bajaj, Hero, Hero Honda, Honda, Indus, Kinetic, Royal Enfield, Suzuki, TVS, and Yamaha. The
latest trend in the two-wheeler market is the introduction of electrically operated vehicles from a
range of manufacturers such as Indus and Hero. These can be recharged from convenient household
electrical points. The only disadvantage is speed, which is restricted to around 25 miles per hour.
Currently, the motorcycle market is witnessing a demand for higher volume engines. Previously, the
100 c bikes were very popular owning to the high fuel efficiency offered. However, the market is
maturing fast. Sensing this movement, Bajaj has introduced the Bajaj Pulsar, with 150, 180 and 200
cc engines with Dual Twin Spark Ignition (DTSi) technology Hero Honda Motors has been at the top
of the unit sales of the July 2011. The company sold 4, 91,306 units for July 2011. In July last year,
Hero Honda had sales of 4, 27,686 units. This is an increase of 63,620 units or 15 per cent for this
year’s month of July. Bajaj Auto was also on the list of the companies that registered an increase in
their sales. Bajaj had 14 per cent of increase in their sales for the month of July 2011 as compared to
the sales of July 2010. Last July Bajaj sold 3, 18,415 units. The sales for this year’s July was recorded
at 3, 63,712 units. That is an increase of 45,297 units. TVS Motors comes third with the same
percentage of sales figures as that made by Bajaj Auto. TVS registered sales of 1, 89,962 units.
Mahindra Two Wheelers Ltd. (MTWL), the latest prominent name in the two-wheeler Indian market,
had a growth of 15 per cent since the last year. Percentage wise, Suzuki had the most successful
year. Last year, there sales stood at 18,533 units. This July it increased to 27,088 units – showing an
increase of 8555 units. This increase equals to around 46 per cent of growth. Yamaha and Honda
Motorcycle and Scooter India are also making their presence felt in the two-wheeler Indian market.
Honda Motorcycle and Scooter India, is especially making good strides and can potentially kick off
TVS from the third spot. Though they have recorded growth of only 10 per cent, the promise they
are showing is far too great than that of the figures.
Company Profile:

“Hero” is the brand name used by the Munjal brothers for their flagship company Hero Cycles Ltd. A
joint venture between the Hero Group and Honda Motor Company was established in 1984 as the
Hero Honda Motors Limited at Dharuhera India. Munjal family and Honda group both own 26%
stake in the Company. In 2010, it was reported that Honda planned to sell its stake in the venture to
the Munjal family. During the 1980s, the company introduced motorcycles that were popular in
India for their fuel economy and low cost. A popular advertising campaign based on the slogan 'Fill it
- Shut it - Forget it' that emphasised the motorcycle's fuel efficiency helped the company grow at a
double-digit pace since inception. The technology in the bikes of Hero Honda for almost 26 years
(1984–2010) has come from the Japanese counterpart Honda. 5 Hero Honda has three
manufacturing facilities based at Dharuhera, Gurgaon in Haryana and at Hardwar in Uttarakhand.
These plants together are capable of churning out 3 million bikes per year. Hero Honda has a large
sales and service network with over 3,000 dealerships and service points across India. Hero Honda
has a customer loyalty program since 2000, called the Hero Honda Passport Program

Termination of Hero and Honda Joint Venture: In December 2010, the Board of Directors of the Hero
Honda Group have decided to terminate the joint venture between Hero Group of India and Honda
of Japan in a phased manner. The Hero Group of India 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.

Hero MotoCorp: The new brand identity and logo, Hero MotoCorp, was developed by the London
firm Wolff Olins. The logo was revealed on 9 August 2011 in London, the day before the third test
match between England and India at Lord's Cricket Ground. Hero MotoCorp can now export to Latin
America, Africa and West Asia. Hero is free to use any vendors for its components instead of just
Honda-approved vendors.

Define the brand Brand:

u BRAND

u BRAND NAME

u BRAND MARK

u TRADE MARK

u COPYRIGHT

Brand 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.

Vision The story of Hero Honda 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

Market Size and competitors can be represented in graphs (Pie or Bar graphs)

Market can be broken down into Class as per price & engine capacity (Auto Car can be used)

Market forces affecting the market mix: 4 type

1) government behaviour (2 stroke to 4 stroke, BS4 to BS6, FAME 1 & 2 for EV)
2) Competitors position (as per data)
3) Trades behaviour ( Dealer network and recent addition of online selling through Amazon
Hero and Honda or example of OLX for EW scooters
4) Consumer buying behavior: based on income and preference, maintenance etc

Marketing Mix for Bikes

Can be chosen from 12 defined marketing mix.

4 ps of Hero Moto Corp:

Product Hero Honda Splendor bikes are designed with customer comfort in mind, with a contoured
low-slung seat, specially designed handlebar and a strong double-cradle tubular frame. The
suspension system works so well that the customer never realizes what happens between the tires
and the bumpy road. Hero Honda splendour+: Technical specifications Engine - Type air cooled, 4
stroke, single cylinder Displacement 97.2 cc Max.power 7.4 BHP@8000rpm /5.5KW @8000 rpm
Max.torque 7.95 N-m@ 5000rpm Transmission - Clutch multiplate wet Gear box 4 speed constant
mesh Dimensions - L*W*H 1970mm*720mm*1040mm Wheelbase 1230mm Saddle height 785mm
Ground clearance 159mm Fuel tank capacity - 11litres Reserve 1 litre (usable reserve) Hero Honda
splendour NXG: Technical specifications Engine - Type air cooled, 4 stroke, single cylinder
Displacement 97.2 cc Max.power 7.7 BHP@7500rpm /5.67KW @7500 rpm Max.torque 7.7 N-m@
6000rpm Ignition capacitor discharged ignition Transmission - Clutch multiplate wet Gear box 4
speed constant mesh Dimensions - L*W*H 1970mm*720mm*1040mm 13 Wheelbase 1230mm
Saddle height 785mm Ground clearance 159mm Fuel tank capacity - 10.3litres Reserve 1.8 litres
(usable reserve) Hero Honda super splendour: Technical specifications Engine - Type air cooled, 4
stroke, single cylinder Displacement 124.7 cc Max.power 6.72KW (9 BHP) @7000 rpm Max.torque
10.35 N-m@ 4000rpm Transmission - Clutch multiplate wet Ignition digital-CDI ignition (AMI) Gear
box 4 speed constant mesh Dimensions - L*W*H 1995mm*735mm*1095mm Wheelbase 1265mm
Saddle height 785mm Ground clearance 150mm Fuel tank capacity - 12litres

Price Determining price levels and pricing policies is the major factor affecting revenue. Factors such
as the demand for the good, the market price, and customer responsiveness to price changes
influence the price levels at hero Honda. Other factors such as a convenient location or more
personalized service allow hero Honda to charge a competitive price. Making sure your price is
standards, however, by checking to see what competitors' prices are of similar product. Hero Honda
splendor +: Hero Honda splendor plus price in delhi-41602/- Hero Honda splendor plus price in
bangalore-44502/- Hero Honda splendor plus price in chennai-44425/- Hero Honda splendor plus
price in kolkata-44875/- Hero Honda splendor plus price in mumbai-46024/- Hero Honda splendor
NXG: Hero Honda splendor NXG price in delhi-46104/- 14 Hero Honda splendor NXG price in
bangalore-45353/- Hero Honda splendor NXG price in chennai-43543/- Hero Honda splendor NXG
price in kolkata-49350/- Hero Honda splendor NXG price in mumbai-48387/- Hero Honda super
splendor: Hero Honda super splendor price in delhi-46994/- Hero Honda super splendor price in
bangalore-50356/- Hero Honda super splendor price in chennai-50235/- Hero Honda super splendor
price in kolkata-50425/- Hero Honda super splendor price in mumbai-51941/-

Promotions THE product line of the hero Honda say’s “Hero Honda desh ki dhadkan” Advertising of
hero Honda is done through  The yellow pages  A press release  Sponsoring a civic event or
activity Eg: Sponsored '7th World Cup Cricket tournament' at England in 1999 Sponsored 'India-
England Test Series' in 2001 Sponsored 'India-England Women's Cricket Series' in 2002  The
newspaper  Billboards or posters  Flyers or handbills  Direct mail advertising  Television  The
radio Hero Honda has roped in film actor Hrithik Roshan, Captain of Indian Cricket team Sourav
Ganguly, Mohammad Kaif, Harbhajan Singh, Zaheer Khan, Yuvraj Singh and Virender Sehwag as its
brand ambassadors. They will endorse the company products, attend corporate and brand events
and help promote its "We Care" campaign comprising safety riding, environment and friendliness.
Exisiting data to be used.

Place The manufacturer and wholesaler must decide how to distribute their products. Working
through established distributors or manufacturers' agent generally is most feasible for small
manufacturers. Small retailers should consider cost and traffic flow as two major factors in 15
location site selection, especially since advertising and rent can be reciprocal. In other words, low-
cost, low-customer traffic location means you must spend more on advertising to build traffic. Hero
Honda Splendor bikes are positioned all over India. Exisiting data to be used.

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 is based at Hardwar,
in the hill state of Uttarakhand. Exisiting data to be used.

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. Exisiting
data to be used.
 2. STP analysis: Identify the market segments for the product category, choice behavior of the
consumers and competitive position.

Market: Slide 12 of PPT 3 STP. This can also be used while defining Market.

Also segmentation of Hero group is not required. I suggest we stick to product:

SEGMENTATION : Slide 23
1. Demographic segmentation- In demographic segmentation, the market is divided into
groups on the basis of variables: age, family size, gender, income, occupation, education,
social class, etc. The HERO HONDA company segmented the motorcycle market on the
basis of age, income.

Age: Each age group of people have different requirements and so, HERO HONDA focused
on segment of age group: Age group Engine power Model 18-35 125cc, 150cc, 225cc
Glamour, Super Splendor, Hunk, CBZExtreme, Karizma 35-50 100cc Pleasure, CD-Dawn, CD-
Deluxe, Splendor+, Splendor Pro, Splendor-NXG

Income: Income determines the ability of consumers to purchase the product. HERO
HONDA is focussing on different income for different product. Economy: CD 100SS, CD Dawn
Executive: Splendor Pro, Super Splendor, Splendor +, Splendor NXG, Glamour Premium:
Karizma, Hunk, CBZ Extreme 9

Gender: Men and women tend to have different attitudinal and behavioural orientation
based partly on genetic make-up and partly on socialization. Hero Honda segmented its
bikes for men and for women it came up with Pleasure (Gearless bike).

2. Psychographic segmentation- In this segment, the HERO HONDA company segmented

the buyers in to different groups on the basis of psychological personality traits, lifestyle.
Hero Honda Karizma focused on outgoing youth of age group 18-25. Hero Honda Hunk is
for men who have a macho image.
3. Sociographic / Lifestyle/ behavior/ Consumption

TARGETING: After identifying the market segments, the marketer then decides which present the
greatest opportunities, which are its target markets. Hero Honda has used product specialisation in
the case of splendor by placing Splendor in all markets. It has also used selective specialization for
some of its products, for example, Karizma and Hunk are targeted at youth preferring voluminous
and bulky bikes. It is also a high-end product.

POSITIONING: For each target market, the firm develops a market offering that it positions in the
minds of the target buyers as delivering some central benefits. The HERO HONDA has positioned its
brand as fuel efficient, suitable for Indian roads and longevity engine compared to other bikes in the
market.

STP of Hero Honda Splendor:

SEGMENTATION Geographical Segmentation Geographic Segmentation calls for division of the

market into different geographical units such as nations, states, regions, countries, cities, or
neighbourhoods. In the South Asian context, geographic segmentation assumes importance due to
variations in consumer preferences and purchase habits across different regions, across different
countries, and across different states in these countries. 10 Demographic Segmentation In
Demographic Segmentation, we divide the market into groups on the basis of variables such as age,
family size, family life cycle, income, occupation, education, religion, race, generation, nationality
and social class. One reason demographic variables are so popular with marketers in that they’re
often associated with consumer needs and wants. Another is that they’re easy to measure. Even
when we describe the target market in non-demographic terms (say, by personality type), we may
need the link back to demographic characteristics in order to estimate the size of the market and the
media we should use to reach it efficiently. Age group Engine power Model 18-35 125cc, 150cc,
225cc Super Splendor 35-50 100cc Splendor, Splendor Pro, Splendor-NXG Psychographic
Segmentation Psychographics is the science of using psychology and demographics to better
understand consumers. In psychographic segmentation, buyers are divided into different groups on
the basis of psychological/personality traits, lifestyle, or values. People within the same demographic
group can exhibit very different psychographic profiles. Values and lifestyles significantly affect
product and brand choice of consumers. Religion has a significant influence on values and lifestyles.
The strict norms that consumers follow with respect to food, habits or even dress codes are
representative examples in this regard.

TARGETING :

Customer profiling is extremely important: Segment size and growth. Targeting a segment involves
choosing the one or ones that are potentially most profitable.

Hero Honda did product specialisation in case of splendor with products such as splendor (first
model) being for middle class, splendor+ was for upper middle class, splendor NXG/Super Splendor
for high-end customers. Data to be updated

Positioning

Hero Honda introduced Splendor plus to bank on the image of Splendor in the minds of customers
with the “Naye zamaane ki nayi Splendor” tagline. Splendor NXG had improved looks as compared to
Suuper Splendor and its comfortable driving was highlighted in its tagline “Bharosa bhi, Style bhi”
and “The Splendorfull bike”. Super Splendor was introduced as the 125cc bike with “Generation nayi,
Bharosa wahi” tagline relating the strengths of splendor.

7 positioning Strategies slide: 44

Repositioning by relaunching splendor multiple times and corporate positioning.

SWOT Analysis: Strengths:-

Hero Honda Splendor has a strong brand name. The company’s name is synonymous with fuel-
efficient bikes and longevity. o A huge market as it has a reputation among customers. o Hero Honda
has models/products in almost every bike segment viz. economy (CD Dawn, CD Deluxe), executive
(Super Splendor, Splendor+) and premium (Karizma, CBZ). o Ability to understand customer’s needs
and wants. o Hero Honda has excellent distribution through franchisees with 4500 dealers for its
brand comprising of scooters and bikes. o Hero Honda Splendor is considered as the most reliable
bike for Indian roads as it requires low maintenance. Weakness:- o Slow to react to market changes-
Slow innovation- late entrants into the 125 cc segment. o Focuses on only mileage but on power o
Imports >31% of its spare parts requirements o Too much dependence on few models such as
splendour which accounts for almost 50% of the company’s turnover. o Hero is vulnerable in the
joint venture because Honda Motor Company has so much power. Opportunity:- o Innovations in
technology to increase power o Exports market is yet to be properly exploited. Threats:- o All major
bike makers in the world are lining up for India. o Bajaj Motors, TVS Motors are strong competitors.
o Baja Auto has found popularity with both its low-end and premium offerings, which have helped
chip away at Hero Honda’s dominance. o Hero Honda Motors Limited is losing a foothold in the
exports market which is now dominated by Bajaj. o Hero Honda is completely dependent on Honda
for its R&D and new product development.