31671884 Marketing Stratergy Hero Honda[1]

7/28/2019 31671884 Marketing Stratergy Hero Honda[1]

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A

PROJET REPORT

ON

HERO HONDA MARKETING STRATERGYIN CONTEXT WITHHERO 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 MANAGEMENTSHRI SHANKARACHARYA MAHAVIDYALAYA


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SECTOR-6 BHILAI (C.G)

Certificate

To whom may ever it may

concern

This is to certify that abhishek kumarstudent of B.B.A 6th sem of shrishankaracharya mahavidyalaya , bhiaihas carried a research project on thetopic to hero Hondaunder my supervision .

This report is original and data collectedby the researchers him self are trueauthentic up to my knowledge.We wish abhishek success in hisprofessional career .


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Declaration

I abhishek kumar student of sixthsemester at

shri shankaracharya mahavidyalaya here by declare that these researchreport under the title is the record

of my original work under the guidance ofMr. 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-6bhilai (CG)


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Certificate

This is to certify that abhishek kumara student of B.B.A sixth semester at

our institute under my guidance andsupervision he had carried out the

research project under title

marketing strategy of hero Honda

This research report is the originalone.

Place:

Date :

Project guide(lecturer)

Department of


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B.B.ASSM Bhilai

Acknowledgement

Perhaps the most awaited moment of anyendeavor in its successful competition of theirproject report cases study having worked onher project for the whole academic session. Iwould like to express my sincere gratitude toall those who made it possible.

Firstly I am humbly and respectfully to myguideMr. Sandeep Jaswant (H.O.D) of the B.B.Adepartment under whose able guidance. I hadthe privilege to work and who guided at everystage.

I take this opportunity to express my

sincere gratitude to our principle for beingguide of philosopher throughout B.B.Aprogram.


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I shall be failing in my duty if I dontexpress my deep sense of gratitude to all myfriends and the relatives who have share their

valuable time and helped me directly orindirectly in the preparation of their project .

At the end last but not the least, I wouldlike to thanks the other staff and non staffmember the of this college.

(B.B.A sixth semester)

Preface

The topic chosen by me for my project ismarketing strategyIn reference to hero Honda automobiles

the two wheeler especially in the stylishmotorcycle. At present hero Honda ismarket leader in the Indian market.


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Today there are various companiescoming in Indian and these certainly willexist a cutthroat competition in these

field . I have chosen a hero Honda as atopic essence of my project .today twowheeler consumer due to newmanufacturing entrant has startedgetting a wide choice while buying onethese gave to considered the facility

provided by the two wheeler the pricemileage , maintenance and service etc.while buying a two wheeler .

A normal customer is quit puzzled andfaces for an uneven some time hugeproblems in deciding which vehicle to

buy. I realized the problem and decide totake these up as the challenge and

provide answer to as the requirement ofthe Hero Honda.


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Chapter - 1

Introduction


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Satisfaction is the persons feeling of pleasure(or) disappointment resulting from comparinga product perceived performance (outcome) in

relation to his/her expectation. if theperformance fall short of expectation thecustomer is dissatisfied . if the performancematches the exception the customer issatisfied if the performance exceeds theexpectation the customer is highly satisfied( or ) delighted many companies are aimingfor high satisfaction because they are muchready to switch. ]

Buyers expectation formed on the basis ofpast buying experience,friend and the associate advice and themarketers and the competitors informationand promises. if marketers raise expectationstwo high , the buyer is likely to be

disappointed . Even if the company setsexpectation should match the performances.

} A customer is the most importantperson even in

any company} A customer never depend oncompany, but the

company depends on him.} A customer is the person who bringcompany his


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Wants.} A customer is not a interruption ofmarketers

Work he is the purpose of it.

Two wheelers in

IndiaIn 60 decade several vehicles wererunning in the Indian roads those are thesun beams, AIS, BBA and Royal Enfield.From these motor cycles only the RoyalEnfield has existence in the motorcyclemarket.

After 60 decade some other motorcyclesand scooter had been launched in Indiantwo wheeler market those are theRajdoots,Java,Vespa and Lamrata .

Indian witrossed the first spate ofmodernization in two wheeler industry in1978-79 during that period Piaggiosauntered the Indian market in a joint


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venture with the Lohia machines and ourmajor Japanese motor cycle manufactureset up joint venture companies to

produce 50cc two wheeler for the firsttime.

Objectives of thestudy

} To know the customersexpectations

towards hero Honda.


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} to find out the customeropinion regarding

Various aspect of the bike.

} To give the appropriatesuggestion to the

company regarding heperformances.

Our brand

Our brand identity:

Our brand is the visualexpression of the ought and the


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action it conveys to everyoneour 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 beliefin hero Honda as the as it itsour brand.

We can do this by the livingon the brand essence and bycontinuously seeking toenhance our customer

experience. In doing so, we ensure a

special pace for our self in theheart and in the mind of thecustomer.

Our brand essence


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Our brand essence is thjesoul of our brand

Our brand essenceencapsulates or mission atHerohonda

It is the singularrepresentation of our terms ofendearment with ourcustomers.

It provies the basis on whichwe grow profitability in themarket.

Our brand essence is

excitement Hero Honda strives to inspire

the confidence through teexcitement engineering.

Blending together youthfull

creativity and competitivetechnology to exceed thespoken and the implict


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expectations of ourcustomers.

By challenging the given . byexploring the unknown andthereby stretching ourselftowards tomorrow, today.

Learning Learning is how we insure

our proactively It is the values that

embraces knowledges as theplat form for the building wellinformed.

Innovation

It is how we can create the

future It is that which provokes us

to reach beyond the abivous


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in persuite of that whichexceeds the ordinary.

Speed

It is how we convey clearconvection.

It is the value that keeps ussharpley responsive ,mirroring our commitmenttowards our goal and process.


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Chapter-2

History


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India has the largest number of twowheeler in the world with41.6 million vehicles.India has a mix of 30 percent automobile and

70 % two wheeler in the country. India was thesecond largest two wheeler manufacture inthe world starring in 1950s with the Britishautomobiles product of India (API) thatmanufactured the scooter. API manufacturethe lamberts but, another company Bajajautomobiles LTD. Surpassed API andremaining through the turn of the centuryfrom its association with piaggio of Italy

(Manufacturer of Vespa)The license raj that exist between the

1940s to 1980s in India , did not allow theforeign companies to enter the market andimport were tightly controlled .theseregulatory maze , before the economic

liberalization , made the business easier forlocal player to have a seller market . Customerin India was forced to wait 2 years to buy ascooter from Bajaj. The CEO of Bajajcommented that he did not make a marketingdepartment, only in dispatch department. Bythe year 1990, Bajaj has a waiting list that has

twenty six times of annual output for scooter.The motorcycle segment has the same longwait time with three manufacture; RoyalEnfield, ideal Jawa and Escorts. Royal Enfieldmade a 350cc bullet wit the only four stroke


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engine at that time and took the higher end ofthe higher end of the market but , there waslittle competition for there costumer . Ideal

Jawa and escorts took the middle and lowerend of the market respectively.

In the mid-1980s the Indiangovernment regulation changed and

permitted companies to enter theIndian through minority joint venture.

The two wheeler market with for indoJapanese joint venture: Hero HondaTVS S Suzuki, Bajaj Kawasaki andkinetic Honda. The entry of these

foreign companies changed the Indianmarket dynamics from the supply sideto demand side with a large selectionof two wheelers on Indian marketcustomer started gain over theproduct they bought and raise the

higher customer expectation.

Hero entered the joint venture fortechnical and financial participation withone of the largest automotive makers


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Honda motors company limited of Japan,in 1984 for the manufacturing of 100cc

motor cycles in India.

Group companies Hero corporate servicelimited Hero mind mine munlal

In 1984-1985HHML came in existence bycollaboration of hero motor limited and JapansCompany Honda motors limited for the first100cc with four stroke motorcycle is made byHero Honda motor limited in India.

Companyprofile

Hero is the brand name used by the Munjalbrother in the year 1956 with the flag shipcompany hero cycles .the two wheelermanufacturing business of bicycle component


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had originally started in the 1940s and turnedin the world largest bicycle manufacturetoday. The Munjal run their own steel make

free wheel and other critical bicyclecomponent and and have diversified in todifferent like product design. the Hero groupphilosophy is; to provide excellent transportation tothe common man at easily available andaffordable and to provide the totalsatisfaction in all its sphere of activity he hero group has a passion for setting thehigher standard and engineering satisfactionis the prime motivation way of life and workculture of the group .

In year 1984 Mr. Brijmohan lal munjal , thechair man and managing director of hero

Honda motors , headed an alliance betweenthe Munjal family and Hero Honda companyLTD HHM mission statement is : we, at hero Honda , are continuouslystriving for synergy betweentechnology , system and humanresources to provide product and

services that meet the quality price andaspirations of the customer.


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Product profile

Price list

Model PRICE RTO INS TOTAL

CD-Dawn 32900 1699 845 35444

CD-DLX(MAC) 36650 1850 918 39467

PLEASURE 36740 1850 912 39502

SPL.NXG 39550 2050 999 42599

SPL.PLUS 41250 2099 999 42599

PASION PLUS 43750 2105 1005 46905

SUP.SPL.(RING) 44150 2199 1024 47373

SUP.SPL(MAC) 44900 2399 1109 48408

GLR.(MAC/SELF) 46250 2250 1055 49555

GLR.(DISK/SELF 48250 2350 1086 51686

CBZ.EXE (SELF/DISK) 57500 2750 1218 61468

HUNK 57000 2725 1216 60941

KARIZMA 73900 3400 1446 78746

CD-DELUXE(RING) 35400 1800 899 38098


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Colors in Vehicle GLAMOUR

Candy blazing red, cloud silver metallic,tornado metallic grey, impulseorange metallic, excellent blue metallic.

CD DELUXECandy blazing red, cloud silver, candyTahitian blue, amaranth maroon, cool mint

grey.

SPLEDOURblack candy red , blaze , boon silver, metallic,

sierra metallic, granti blue metallic.

PLEASUREOrange , Candy blazing red, grey silver,

Tahitian blue metallic.

CD DAWNBlack ,maroon, red

CD 100SSCandy ruby red black , amazing blue

metallic,green metallic.

PASSION PLUS


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Moon yellow, cloud silver ,amaranth maroon,Tahitian blue, Candy blazing red,black with

purple strips.

KARIZMAGreen , sky blue black metallic, yellow

shade.

Hero Hondas MarketingStrategies in India

New Delhi, October 21, 2008: Hero Honda Motors Ltd (HHML), the

world's largest two-wheeler company for sevenconsecutive years, today firmly reiterated its

undisputed leadership in the domestic two-wheeler market with impressive bottom linegrowth for the second quarter (Q2) July toSeptember - of this financial year (FY) 2008-09.

Even as the industry continued to face tough marketconditions on account of uncertainty over interest ratesand overall credit squeeze, the company reported 50per cent growth in profit after tax (PAT) at Rs 306.30

crore for the second quarter. Hero Honda's profit aftertax 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


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Rs 2361 crore recorded in the corresponding period lastfiscal. The company has recorded an EBIDTA margin of13.58 per cent in the quarter. The EBIDTA margin in theprevious quarter (April - June '08) was 12.20 per cent.

The strong financial performance is in line with thecompany's better-than-industry top line growth. Afterposting a growth 11.38 per cent in the first quarter, thecompany kicked off the second quarter with a 39.8 percent growth in sales in the month of July, and followedup with 26.8 per cent growth in August and 22.4 percent in September. Hero Honda consistently keepsgrowing its share in the domestic motorcycle market,and currently enjoys over 55 per cent share.

Dr. Brij Mohan Lall, Chairman, HeroHonda Motors Ltd,

Said "We are happy with our financial performance.It gives immense joy to see this kind of results in the25th year of our company. I wish to thank all ourstakeholders 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,


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said "Our numbers speak for themselves. Even inthis volatile and competitive environment, our topline continues to outpace the industry growth, ourmarket share is at an all time high, and the financialbalance sheet is a delight all the factors whichform the hallmark of a resilient company withcutting-edge management. We will continue to keepinnovating in bringing in technologically-superiorproducts, in our network expansion, in brandbuilding, in our financial management, and in ourcommunication."

"Going forward, we will have to keep a close watchon the commodity prices movement, and otherfactors such as inflation, interest rate scenario andavailability of retail finance. These factors will play acrucial role in the industry growth in the subsequentquarters," he added.

Mr. Pawan Munjal, Managing

Director, Hero Honda MotorsLtd ,


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The year 2007-08 has seen a leadershipperformance from us. Despite the industryslowdown, we have been able to manage

positive growth thereby taking our share inthe domestic motorcycle market upward of 52per cent. At the end of the financial year, Iwould definitely like to thank our millions ofcustomers across the country, who have madeit possible. We will continue to focus on ourcustomers and they can surely look forward tomany more launches and various initiatives inthe coming year.

HHMLs good run through the industry slumpin 2007 has been possible due to thecompanys multi-focal strategy of bringing innew models and variants across segments,supporting them with innovative

communication across media, leveragingproperties such as cricket and entertainmentfor brand building and augmenting itsdistribution network

(HERO HONDA CONSOLIDATES MARKET

LEADERSHIP WITH IMPRESSIVE GROWTH OF15% IN MARCH09FOR FY 2008-09, HERO HONDA OVERTAKESPREVIOUS FISCALS SALES TALLY, EVEN ASDOMESTIC MOTORCYCLE INDUSTRY DECLINESBY MORE THAN 10 %)


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HERO HONDA CONTINUES TOCONSOLIDATE MARKET LEADERSHIPWITH 27 PER CENT GROWTH IN AUGUSTSALES

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 hingeson creating winning brands across segments,investing in brand building, exploring untappedmarkets in rural and upcountry areas whileconsolidating urban presence and rapidly expandingour network. However, the industry continues toface uncertainty on account of high interest ratesand overall credit squeeze. The festival month ofOctober is going to be crucial in determining theoverall outlook of the industry for the year.

Key Hero Honda brands continue to drive strongvolumes across segments - CD Deluxe in entrysegment, Glamour, the new Splendor NXG, Splendor


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+ and Passion Plus in deluxe segment, and Hunk,CBZ X-treme and Karizma in the premium segment.

Hero Hondas scooter Pleasure has also beengrowing strongly, with more than 12,000 unitsbeing sold in August this year.

New Delhi, Tuesday, April 21, 2009:Highlights

Corporate performance: Consolidated over 50% share in thedomestic 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 arevery enthused by our robust financial numbers for

the third quarter. However, this was not unexpected.We had undertaken some strategic initiatives sincethe beginning of this fiscal, including a consciouseffort to rationalize costs across the board, and itsresults are now visible. Our bottom line has seen aconsistent improvement, and we have been able to


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demonstrate that it is possible to keep gainingmarket share while maintaining a robust bottom line.

With input costs softening and our sharp focus oncost efficiencies, we should be able to furtherimprove upon our financial results, he added.

Hero Honda's strategy for aggressive top line growththrough new product launches, brand buildinginitiatives backed by innovative communication hasresulted in market share gain across every segment.Indeed, Hero Hondas 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 ourclient 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


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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 itsclosest rival is approximately 1 m units (23% of industrysize). One of the reasons for the tremendous performanceof Hero Honda is the significant increase of share ofmotorcycles in the two-wheeler segment, from 42% in FY99to 77% in FY04. No doubt, that the shift in preference ofIndian populace from scooters and mopeds towardsmotorcycles has facilitated the growth of Hero Honda.

However its performance vis--vis industry indicates thatthe performance of Hero Honda was better than theindustry peers, barring two years. In the seven-year periodending FY04, it has achieved a CAGR of 30% in two-wheelervolumes against 11% of the industry.


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Key factor of marketing strategy

India and Bharat co- exist today. India comprises of fastgrowing cities and town; Bharat is made up of villages

entering the economic main stream. We seek to walk &march with both India and Bharat

PositioningSegmentation

Targeting


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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 bnfrom operation in FY04 and is virtually a debt free

company.


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EXAMPLESSuper Splendor

This Bike comes with 125 cc new generation quantum core engine with an output of 9 bhp (6.7 kw). Its relaxingseating arrangement with other comfort features like less strain while clutching and declutching, low noise and lessvibration 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 forsafer 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 performanceengine. 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 enginerpm. Circuitry for the low beam andpilot lamp has also been enhanced for low variation in intensity arising from
http://auto.indiamart.com/motorcycles/hero-honda-splendor/http://auto.indiamart.com/motorcycles/hero-honda-splendor/http://auto.indiamart.com/motorcycles/hero-honda-splendor/


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changes in the engine rpm.

Segmentation of Hero Honda

Splendor: -

Geographical Segmentation

Geographic Segmentation calls for division of the market into different

geographical units such as nations, states, regions, countries, cities, or

neighborhoods. 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.

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

theyre often associated with consumer needs and wants.

Another is that theyre easy to measure. Even when we


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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.

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.


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The four groups with higher resources

are:

1. Innovators: - successful, sophisticated, active, take- charge people with

high self-esteem. Purchases often reflect cultivated tastes for relatively upscale, niche-

oriented products and services.

2. Thinkers- mature, satisfied, and reflective people who are motivated by ideals

and who value order, knowledge and responsibility. They seed durability, functionality,

and value in products.


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3. Achievers- successful, goal-oriented people who focus on career and family.

they favor premium products that demonstrate success to their peers

4. Experiences- Young, enthusiastic, impulsive people who seek variety and

excitement. They spend a comparatively high proportion of income on fashion,

entertainment and socializing.

The four groups with lower resources are:

1. Believers- conservative, conventional, and traditional people with concrete

beliefs. They prefer familiar products and are loyal to established brands.

2. Strivers- trendy and fun-loving people who are resource constrained. They favorstylish products that emulate the purchases of those with greater material wealth.

3. Makers- Practical, down-to-earth, self-sufficient people who like to work with the

hands. They seek products with a practical or functional purpose.

4. Survivors- Elderly, passive people who are concerned about change. They are

loyal to their favorite brands.

Behavior Segmentation: -

In behavioral segmentation, marketers divide buyers into groups on the

basis of their knowledge of, attitude toward, use of, or response to a

product.

Decision Roles:


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People play five roles in a buying decision: Initiator, Influencer,

Decider, Buyer and User. Recognition of the different buying roles and

specification of the people who play these roles for specific products

and services are vital for marketers. This is especially useful for

designing the communication strategy.

Behavioral Variables:

Many marketers believe behavioral variables-occasions,

benefits, user status, usage rate, buyer readiness stage, loyalty

status, and attitude-are the best starting points for constructing

market segments.

Market Targeting: -

Effective Segmentation Criteria

To be useful, market segments must rate favorably on five key criteria:


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Measurable, the size, purchasing power and characteristics of the

segments can be measured.

Substantial, The segments are large and profitable enough to serve.

A segment should be the largest possible homogenous group worth

going after with a tailored marketing program. It would not pay, for

example, for an automobile manufacture to develop cars for people

who are less four feet tall.

Accessible, The segments can be effectively reached and served.

Differentiable, The segments are conceptually distinguishable and

respond differently to different marketing-mix elements and

programs. If married and unmarried women respond similarly to a

sale on perfume, they do not constitute separate segments.

Actionable, Effective programs can be formulated for attracting and

serving the segments.

Evaluating and Selecting the Market Segments

Single- Segment

Concentration

M1 M2 M3


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P1

P2

P3

Selective Specialization

M1 M2 M3

P1

P2

P3

Product Specialization

M1 M2 M3

P1

P2

P3

Market Specialization


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M1 M2 M3

P1

P2

P3

Full Market Coverage

M1 M2 M3

P1

P2

P3


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Single Segment Concentration:-

The farm equipment division of Mahindra & Mahindra concentrates on tractors,

primarily targeted at agricultural markets. The Zodiac brand concentrates on formal

shirts for executives and professionals. Especially hospitals focus on specific therapeutic

areas such as cancer care, heart specialty, neonatal care and gynecology. Through

concentrated marketing, the firm gains a strong knowledge of the segments needs and

achieves a strong market presence. Furthermore, the firm enjoys operating economies

through specializing its production, distribution and promotion. If it captures segment

leadership, the firm can earn a high return on its investment.

Selective specialization: - A firm selects a number of segments, each

objectively attractive and appropriate. There may be little or no synergy among the

segments, but each promises to be moneymaker. This multi segment strategy has the

advantage of diversifying the firms risk. When Procter & Gamble launched crest White

strips, initial target segments included newly engaged women and brides to be as well as

gay males.

Product specialization: - The firm makes a certain product that it sells to

several different market segments. A microscope manufacturer, for instance, sells to

university, government, and commercial laboratories. The firm makes different

microscopes for the different customer groups and builds a strong reputation in the

specific product area. The downside risk is that the product may be supplanted by an

entirely new technology.

Hero Honda used Product Specialization for target market of Hero Honda

Splendor.


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Market specialization: - The firm concentrates on serving many needs of a

particular customer group. For instance, a firm can sell an assortment of products only

to university laboratories. The firm gains a strong reputation in serving this customer

group and becomes a channel for additional products the customer group can use. Thedownside risk is that the customer group may suffer budget cuts or shrink in size.

Full market coverage: - The firm attempts to serve all customer groups with

all the products they might need. Only very large firms. Such as Microsoft (software

market), General motors (vehicle market), and coca-cola (nonalcoholic beverage

market).

Additional considerations

Two other considerations in evaluating and selection segments are

segment-by-segment invasion plans and ethical choice of market targets.

Segment-by-segment invasion plans: -

A company would be wise to enter on segment at a time. Competitors must

not know to what segment(s) the firm will move into next. Segment-by-

segment invasion plans are illustrated three firms, A, B, and C, have

specialized in adapting computer systems to the needs of airlines, passenger

transport, and goods transport companies. Company A meets all the

computer needs of airlines.


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Ethical choice of market targets: -

marketers must target segments carefully to avoid consumer backlash.Some consumers may resist being labeled. Singles may reject single. Serve

food packaging because they dont want to be reminded they are eating

alone. Elderly consumers who dont feed their age may not appreciate

products that identify them as old market targeting also can generate

public controversy.

Positioning: -

Positioning is the act of designing the companys offering

and image to occupy a distinctive place in the minds of the

target market, the goal is to locate the brand in the minds

of consumers to maximize the potential benefit to the firm.

A good brand positioning helps guide marketing strategy by

clarifying the brand essence, what goals it helps the

consumer achieves, and how it does so in a unique way.

Everyone in the organization should understand the brand

positioning and use it as context for making decisions.


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Competitive Frame of Reference

A starting point in defining a competitive frame of reference

for a brand positioning is to determine category

membership-the products or sets of products with which a

brand competes and which function as close substitutes.

Competitive analysis will consider a whole host of factors-

including the resources, capabilities and likely intension of

various other firms-in choosing those markets where

consumers can be profitably served.

Product:-

Core Product: -

The core product or benefit of Hero Honda Splendor is Travelling and saving the time

by reach on desire place at right time.]

Basic Product: -

The basic product of Hero Honda splendor are Engine, Handle, Shockers, Wheels, Gear

box and chain set etc.


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Expected Product: -

The expected products of Hero Honda splendor are: -

1. It should be 5 gear boxes.

2. It should be 90 Km/l mileages.3. It should be 120 Km/hour Maximum speeds.

4. It should be disk brake or power brake.

5. It should be steel body.

6.

Augmented Product: -

The augmented products of Hero Honda Splendor are: -

1. It provides monthly check up for decrease the pollution.

2. It provides fast service of the product.

Pricing Strategy: -

Penetration Pricing: -

The price charged for products and services is set artificially

low in order to gain market share. Once this is achieved, the

price is increased. This approach was used by France

Telecom and Sky TV.


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Hero Honda Used penetration pricing strategy because that

time Hero Honda use National Segment and low income

persons so they used penetration strategy.

Price Skimming: -

Charge a high price because you have a substantial

competitive advantage. However, the advantage is not

sustainable. The high price tends to attract new competitors

into the market, and the price inevitably falls due to

increased supply. Manufacturers of digital watches used askimming approach in the 1970s. Once other manufacturers

were tempted into the market and the watches were

produced at a lower unit cost, other marketing strategies

and pricing approaches are implemented.

Premium pricing, penetration pricing, economy pricing, and

price skimming are the four main pricing policies/strategies.

They form the bases for the exercise. However there are

other important approaches to pricing.

Promotion: -

Below the Line Promotion: -


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Below The Line is a common technique used for touches

and feel products. Those consumer items where the

customer will rely on immediate information than previously

researched items. Below The Line techniques ensure recall

of the brand while at the same time highlighting the

features of the product.

Above The Line Promotion: -

Above the line (ATL) is an advertising technique using massmedia to promote brands. Major above-the-line techniques

include TV and radio advertising, print advertising and

internet banner ads. This type of communication is

conventional in nature and is considered impersonal to

customers. The ATL strategy makes use of current

traditional media: television, newspapers, magazines, radio,

outdoor, and internet.

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.


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Place: -

Geographical Placing: -Geographical placing of the product has dividedinto 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 forproper and efficient definition of marketing.


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Marketing

threats


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MANAGING RISK IS

HALF THE BATTLE WON


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RISKS AND CONCERNS

Slowdown: Sales in the lucrative premium two wheelersegment (150 cc and above) have been affected by theeconomic slowdown; a quick return to robust growth isunlikely, and this could affect Hero Honda's near term plansfor an increasedpresence in this segment.

Interest rates: Lending rates have started softening but

effective lending rates for the two-wheeler industry remainhigh on account of risk aversion by banks. However, HeroHonda has de-risked its business by focusing on segmentswhich are not too dependent on financing. Still, if interestrates for two-wheelers continue to remain high and theoverall credit-squeeze persists, it is likely to adverselyimpact the company's efforts in realizing its full growthpotential.

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 couldpush up inflation again during the year. Rising inflation maylimit the downwardtrend in interest rates.

Increasing competition: Several two-wheelercompanies introduced new models in the lucrative premiumsegment; over time this could impact the profitability of thissegment. At the same time, the expected fresh competitionin the 100 cc segmentin 2010 poses a challenge to the company's stronghold onthis segment.


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Input costs: Prices of critical inputs came down duringthe year thanks to lower commodity prices. However, pricesmay be close to bottom levels, and may start perking up inthe 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-wheelerindustry during the year in review. It sold more twowheelers during the year than the combined volumes of thesecond, third and fourth placed competitor.Overall, the company sold 3.72 million two-wheelers, up 12per cent. Motorcycle sales in the domesticmarket, which account for more than 95 per cent of HeroHonda's sales, were up 11 per cent.

During the year, the company also turned in a rollickingperformance with its scooter portfolio, with a 49 percent growth in domestic sales to 156,210 units. Thisperformance allowed Hero Honda to increase its sharein the domestic scooter market by more than threepercentage points. Hero Honda's performance in the two-wheeler industry was the only standout performance duringthe year amongst the large players. Without Hero Honda's

numbers, the two wheeler industry growth would have beenmarginal.


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These prime constitutes aproper set up of themarketing program in order toget thedesired output.

Planning

controlobserve


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Products of the company


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Bibliography

WEBSITE:

WWW.HEROHONDA.COM WWW.HEROCYCLES.COM WWW.WEKIPEDIA.COM WWW.TIMESOFINDIA.COM HTTP://WWW.THEHINDUBUSINESSLINE.COM HTTP://ECONOMICTIMES.INDIATIMES.COM/SEARCH.CMS WWW.INDIAINFOLINE.COM HTTP://WWW.FADAWEB.COM/INDIA BOOKS:

AUTOCARE

OVERDRIVE

INDIA AUTO
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Documents

31671884 Marketing Stratergy Hero Honda[1]