Customer Preference for Bi-cycles in Bagpat With Special Reference to Hero

7/29/2019 Customer Preference for Bi-cycles in Bagpat With Special Reference to Hero

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STUDENT DECLARATION

I Deepak Sharma student BBA here by declared that the research report entitled

CUSTOMER PREFERENCE FOR BI-CYCLES IN BAGPAT is completed and

submitted under the guidance of Mr. Vikhyat Singhal, Faculty of Management, FIT

Meerut is my original work. The imperial finding in this report is based on the data

collected by me. I have not submitted this project report to FIT, Meerut, or any other

University for the purpose of compliance of any requirement of any examination or

degree.

DATE: DEEPAK SHARMA

PLACE: BBA 6 SEM

ROLL NO. 9423530

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ACKNOWLEDGEMENT

Interdependence is a higher value than independence the making of any report calls for

contribution and co-operation from many others besides the individual alone. It

is the result of meticulous effort put in by many minds that contribute to the

final report formation and this report is no exception. Several eminent people

have valuable contribution to this report through their inputs. I am sincerely

indebted to Dr. P.K. Aggarwal (Director Hero Cycle) for his valuable suggestion

and inspiration to undergo this study and his unstilted help which he gave for the

completion of this Research.

I am thankful to of Mr. Mrs. Pooja Chaudhary Faculty of Management, and FIT Meerut

who helped me to materialize this report.

I am also thankful to all those people who directly or indirectly help me during my

project.

DEEPAK SHARMA

BBA 6 SEM

ROLL NO. 9423530

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PREFACE

This Project Report is result of my six weeks summer training at HERO CYCLES Ltd.

Summer training is an integral part of our courses and its aim is to provide a practical

experience of the industry to the students. This helps the students to view the real

business world closely. They also come to know about the conditions under which they

have to work in the near future.

Keeping all this in view, this project report CUSTOMER PREFERENCE FOR BI-

CYCLES IN BAGPAT is prepared by me. Although Ive tried to keep this report free

from errors but as we all know the maxim To Err Is Human. Therefore there is a chance

of some mistake. A critical appraisal by anyone will be heartily welcomed.

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TABLE OF CONTENTS

S.No. CONTENTS PAGE No.

I STUDENT DECLERATION 2

II ACKNOWLEDGEMENT 3III PREFACE 4

Iv INTRODUCTION 6

V CYCLE 8

VI COMPANY PROFILE 26

VII CONSUMERBEHAVIOUR 57

VIII OBJECTIVE OF THE RESEARCH 79

IX RESEARCH METHODOLOGY 80

X DATA ANALYSIS INTERPRATION 84XI RECOMMENDATION 92

XII CONCLUSION 93

XIII APPENDICES 95

XIV BIBLIOGRAPHY 98

INTRODUCTION

Bicycle, bike, or cycle, is a pedal-driven, human-powered vehicle with two wheels

attached to a frame, one behind the other.

First introduced in 19th-century Europe, bicycles now number over one billion

worldwide, providing the principal means of transportation in many regions, notably

China and the Netherlands. They are also a popular form of recreation, and have been

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adapted for use in many other fields of human activity, including children's toys, adult

fitness, military and police applications, courier services, and cycle sports.

The basic shape and configuration of a typical bicycle has hardly changed since the first

chain-driven model was developed around 1885 , although many important details have

been improved, especially since the advent of modern materials and computer-aided

design. These have allowed for a proliferation of specialized designs for individuals who

pursue a particular type of cycling.

The bicycle has affected history considerably, in both the cultural and industrial realms.

In its early years, bicycle construction drew on pre-existing technologies; more recently,

bicycle technology has, in turn, contributed ideas in both old and newer areas.

The Indian Cycle Industry

Bicycle was seen in India in the year 1890. Import of cycles, however, started in 1905

and continued for more than 50 years. Complete ban on imports was announced by the

Government in July, 1953, but cycle kept on simmering in the country till 1961. In 1890,

selling price of an imported bicycle was around Rs. 45/-; in 1917, during the First World

War the price jumped to Rs. 500/- but dropped considerably, month by month and came

down to Rs. 35/- or so (U. K. makes) and Rs. 15/- or so (Japanese

It would be interesting to mention that in 1919, five persons in Bagpat imported cycles

and used them on The Mall, Simla. These included one Bishop, Two military men andtwo

contractors including S. Pala Singh Bhogal (Grand Father of Mr. M.S. Bhogal of

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Ludhiana). Under special permission of the Governor, they were allowed to use cycles on

'The Mall' only for one hour in a day. They imported B.S.A. Cross Bar Cycle from U.K.

and it used to be a kind of Mela at that particular hour on the Mall in Simla, the scene

watched by hundreds of people everyday. Later, a firm was formed under the name of

Singh & Co. with shops on Railway Road, Jalandhar and Bazar Vakillan, Hoshiarpur,

which imported bicycles in the year 1930 onwards. With an annual turnover of 12 million

bicycles in a year, Indian bicycle industry stands at no-2 position in the world.

MAJOR PLAYERS IN INDIA IN BI- CYCLE INDUSTRY

HERO CYCLE

ATLAS

AVON

LOCAL PLAYERS OPERATING IN BAGPAT

NEELAM

KW

RAJA CYCLE

CYCLE

The changing cycle

India may be the second largest producer of bicycles in the world but precious little has

been done to promote the cause of cycling in the country. Shveta Pathak reports that the

cycle industry is today churning out beauties that could easily make a style statement but

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the road ahead is rough for the two-wheeled bikes. And, the status-conscious still refuse

to adopt them as a DO you remember the tinkle of the bell as daakiya Rajesh Khanna

delivers the post in the song Daakiya daak laya? Or, the very urbane Aamir Khan making

your breath stop for a while as he competes for the famous race in Jo Jeeta Wohi

Sikander? If you do, you mustnt have forgotten the spirit lent to these moments by the

good old bicycle.

India is the largest cycle manufacturer in the world after China. The Indian industry doles

out 1.25 crore bicycles every year with almost each day witnessing new designs,

colours and features. Even as environmentalists and the health-conscious worry about the

rising number of motorized vehicles on our roads, the easy-on-pocket two-wheeled

vehicle still pedals its way to almost every Indian household.

The good old black or green cycle bought by your grandpa and passed on to your father

has now given way to a mind-boggling range to choose from. In short, today you could

make a style statement with your bike.

Mode of Transport

Market players say they are bringing varied innovations to cater to the changing demands

of the consumers. Onkar Singh Pahwa, managing director, Avon Cycles India, one of the

leading cycle producers in the country, says: "The regular black or green bicycles

dominated the market a few years ago and the customers ranged from workers and office-

goers to school and college students. However, the customer profile has enormously

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changed and the proportion of those relying on cycles as a mode of transport is declining.

A significant number of buyers now are school-goers and to attract them, we are coming

out with a large number of models with variations in colours, shapes, accessories, key

features and the type of material used."

As per estimates, the proportion of those going in for standardised bicycles has come

down from 90-95 per cent to 50-55 per cent in the last five-10 years. The consumer

segment that is speedily getting bigger comprises kids. This brings relief to cycle-makers

as the affordability range is higher and there is more scope for innovations. Thanks to this

segment, the loss in terms of volumes is covered up by the revenue inflow.

No wonder school-goers on bikes are a common sight. To attract the young, there are all

kinds of attractive colours to choose from: silver, golden, red, hot pink, turquoise,

fluorescent shades, etc. The same applies to designs that could have a K, R, Y or a

diamond-shaped frame; raised handles, handles with elbow rest, bar ends; brakes with a

side pull system; foam-padded saddles; wheels with plastic discs; and an in-built dress

guard for ladies bikes.

The designs cater to needs as well as the budget of cyclists. So besides the regular bikes

for routine cycling, the market offers sports bikes, mountain terrain bicycles, bikes with

gears, and roadsters that accommodate two riders. One of the latest offerings includes the

battery-operated bikes.

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"Earlier purchase decisions were instant on account of the limited options. But these days

people like to know about the many varieties and are much more conscious," a dealer

says.

Priced Rs 15,000 onward, the battery-operated bikes are the latest attraction. On a single

charge, they can run 40-60 km at a speed of 23 km an hour. These bikes, however, would

be preferred by those who are planning a purchase for reasons other than health

improvement.

"Considering the rising fuel costs and pollution, these bikes are ideal. They are low on

maintenance cost too," says Pahwa. The company is targeting office-goers and students

for these slick bikes and is hopeful of an encouraging response.

"Howsoever much might be the rise in number of cars, motor cycles et al, it remains

unlawful to hand them over to kids. In contrast, battery-operated bikes need no

registration and licence to ride them."

Indian companies, which have come out with a large variety of bikes, have a long way to

go even as they effectively combated competition that came from global market leader

China. The diminishing number of cyclists is a cause of worry for environmentalists and

economists. While manufacturers attribute the change in trend to rising income levels, the

other factors could be easy finance options for motorized vehicles, urbanization and

status symbol attached to expensive vehicles. "Despite studies coming out with shocking

details on rise in diseases like heart attacks, people are more worried about their status,"

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remarks Pramod Sharma, co-ordinator, Yuvsatta, an NGO that has also launched a

project to promote cycling.

Sadly, efforts to motivate people to take to cycling remain negligible when compared

with the situation in other countries. Most countries provide separate tracks for cyclists,

have regular cycling tours and even film festivals promoting bicycles.

New York and London are celebrating the sixth annual bicycle film festival, and it is

quite common for various organizations in most countries to conduct cycle tours. This

phenomenon is rare in our country.

One might find a few tour operators giving an option to "foreign tourists" for cycle tours,

but there is no such attractive offer for domestic tourists and the general public.

The industry rues that the government is not taking measures to promote use of cycles.

Barring places like Chandigarh that has cycle tracks (which incidentally are not put to

much use), a cycle rider is not safe on Indian roads keeping in view the stupendous

increase in fast-moving motorized vehicles.

"Time and again we have been asking the government to take measures in this direction.

Come to think of it, the bicycle is the need of the day given the increasing pollution,

rising fuel costs and health hazards on account of leading a fast-paced life. Unfortunately,

efforts in this direction do not seem to be a priority with the government," says a leading

manufacturer.

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"Safety is a major concern when it comes to using the cycle as a mode of transport.

Unless people feel safe about the vehicle, the usage is unlikely to increase," says Tejinder

Singh, director, physical education, Sri Aurobindo College of Management and

Commerce, Baddowal.

If the cycle industry is to continue growing, India has to ensure the safety of cyclists and

popularize cycling as sport too besides generating awareness about its other benefits.

Otherwise, we would lose out on not just the industry but also on a healthier and cost-

effective means of transport, say industrialists.

A case for bikes

ONE of its kinds in the country, Green tire, a project launched by Chandigarh-based NGO

Yuvsatta, is an Endeavour to "motivate more and more people to ride bicycle more often".

Says co-ordinator Pramod Sharma, "We have got a good response and some of our

members, who include students and office-goers, have even taken to going to offices on

bicycles."

The NGO promotes use of cycles by forming cycle clubs, organizing cycle tours around

Chandigarh and by holding cycle games.

Quoting a recent study, Sharma says: "Considering that every third death in a place like

Chandigarh is due to heart attack, using the cycle becomes all the more important."

A major hurdle is the mindset of the status-conscious against using the cycle. Sharma

insists that it is important to break this mind-set. "Unlike other countries where people do

not make a fuss about cycling and happily take to it, people here consider it below their

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dignity to cycle to office. It is from here that excuses like time consumption arise."

Insisting on the need for efforts from the government, he says building cycle tracks would

be a step in the direction. "Barring Chandigarh, no other city has them, which is sad. We

are perhaps the only country that doesnt even seem bothered about the issue."

Despite the odds, this NGO has had many successes in terms of various people, including

bank and corporate employees, shedding their initial hesitation and taking to cycling as a

mode of transport.

"While it would require a lot of effort to make people use it for transportation, we have

been quite successful in gathering people for cycle tours and games," he smiles.

For the status-conscious, Sharma suggests: "May be they could go in for the Mercedes

bicycle, priced at Rs 1.5 lakh plus. Even though the bike wouldnt get the luxury of six-

lane metalled roads, the pleasure is every bit worth it."

Bicycle industry eyes urban market

If car manufacturers are flooding the market with luxury brands, why should the bicycle

industry lag behind? Bicycle companies in India are now focusing on urban markets and

are looking to expand their base in the professional and adventure categories.

The bicycle business is flourishing worldwide with the poor and the moneyed classes

alike are interested in using this mode to reach their destinations. It resulted in the global

companies experimenting with the change and spreading their wings across the globe.

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The latest bikes are for the urban kids. This sizable population has the tendency to

facsimile the West, especially in their lifestyles. And since the adventure sport is growing

rapidly there, we hope a good response in India too. The opening up of amusement parks

in Indian cities is a positive sign, he added.

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He further said the sales of hi-end products is expected to grow with the Commonwealth

games in 2010. Rajendra Varma, Coordinator, non motorized transport, Initiative for

Transportation and Development Programmes (ITDP), a Delhi based NGO, believes that

growing awareness among people about the benefits of cycling for body muscles could

be one reason for constant hike in the sale.

As people dont have much time for physical exercise nowadays, we have instituted an

organization called Delhi Cycling Club with an aim to make people aware about the

benefits of cycling in keeping the body fit and also participate in minimizing air pollution

by not using heavy vehicles, he adds.

He further said that we should promote culture of cycling in India by making stricter laws

for cyclists safety on roads. Demanding biking to be given the status of a professional

sport like cricket, a biker from Bangalore, Vibhor feels, Cycling in India should be

promoted to make it a professional sport.

A local club owner at Pune, Nilesh says, Cycling has evolved from being a hobby to a

passion for me. With a group of few, we work with local cyclists, who also own biking

shops and try to make the people aware about the sport. Gary Fisher introduced the

adventure sport Mountain biking to the west for the first time in 1974. Since then it has

grabbed the attention of the youth.

An eco-friendly mode of transportation, bicycles are being revived across the world and

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the steps are taken, especially by the symbols of modernization, like the Metro in the

capital in encouraging commuters to pedal their way to their destinations

Profile(HEROGROUP)

"Hero", the brand name symbolizing the steely ambition of the Munjal brothers, came

into being in the year 1956. From a modest manufacturer of bicycle components in the

early 1940's to the world's largest bicycle manufacturer today, the odyssey was fueled by

one vision - to build long-lasting relationships with everyone, including workers, dealers

and vendors. This philosophy has paid rich dividends through the years.

Hero, a name synonymous with two wheelers in India is today a multi-unit, multi-

product, geographically diversified Group of companies. Through fully integrated

operations, the Munjals roll their own steel, make critical components such as free wheels

for their bicycles, and have the foresight to simultaneously diversify into myriad

ventures, like product designing, IT enabled services, finance and insurance, just to name

a few.

Like every success story, Hero's saga contains an element of spirit and enterprise; of

achievement through grit and determination, coupled with vision and meticulous

planning. Throughout its success trail, the Hero Group and its members have displayed

unwavering passion of setting higher standards for themselves and delivering simply the

best to their customers.

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The Hero Group philosophy is: "To provide excellent transportation to the common man

at easily affordable prices and to provide total satisfaction in all its spheres of activity."

Thus apart from being customer-centric, the Hero Group also provides its employees with

a fine quality of life and its business associates with a total sense of belonging.

"Engineering Satisfaction" is the prime motive of the Hero Group and it has become a

way of life and a part of the work culture of the Group. This is what drives the Group to

seek newer vistas, adopt faster technology and create quality driven products to the

utmost satisfaction of customers, partners, dealers and vendors.

Today the Hero Group has a number of accolades and achievements to its credit yet

consumer requirements and newer technologies provide fresh challenges every day, and

at Hero the wheels of progress continue to turn

Men of Steel

The success of the Hero Group lies in the determination and foresight of the Munjal

brothers, who shared their vision with their workers and led the Group to a position

where its name has become synonymous with top-quality two wheelers.

The flame kindled by the Munjal brothers in 1956 with the flagship company Hero

Cycles; Mr. Satyanand Munjal, Mr. Brijmohan Lall Munjal and Mr. O. P. Munjal

continue to carry the torch and are actively involved in the day-to-day operations of the

Hero Group.

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The saga is being continued with the same zeal by the second and third generations of the

family and by the large working force of the Hero Group. The spirit of enterprise which

dominates the progress of the Group is characteristic of the land where it all began - the

City of Ludhiana, in Bagpat - home to some of lndia's finest workers and entrepreneurs.

The Hero Group is a thriving example of three generations of a family working and

striving together to ensure quality, satisfaction and extensive growth.

TheDrivingForce-Chairman

Dr.Brijmohan Lall Munjal, patriarch of the US$ 3.19 billion Hero Group was born in

1923, in what is now Pakistan. After partition, the Munjal brothers started a small

business of manufacturing bicycle components in Ludhiana in North India in the face of

the bottlenecks of industrial infrastructure and investments. Dr Lall led a small time

manufacturer of 60 cycles a day to become a manufacturing giant, which churns out not

only over 17,000 cycles per day but is also diversified into various domains.

Undoubtedly, Dr.Lall is a first generation business entrepreneur of the 1950s'.

Dr.Lall has enriched the Hero Group with his vision of sound business governance and

value driven management practices. His foresight has made the Hero Group a leader in its

business. Dr Brijmohan Lall is a role model for Indian Industry in corporate governance

and ethical and value-driven management practices. His principle-based leadership has

led the Group companies to receive the best industrial governance and safety awards and

acquire stringent value certifications.

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Dr.Lall was amongst the first Indian industrialists to effectively implement backward

integration and he is acknowledged as the trend setter in the area. Apart from the

promotion of the Indian industry, he is the actively involved in many national

associations such as CII, SIAM, ASSOCHAM and PHD and is a member of the Regional

Board of the Reserve Bank of India. He is Honorary Fellow of the Indian Institute of

Industrial Engineering.

In 1995, Dr.Lall received the National Award for outstanding contribution to the

Development of Indian Small Scale Industry. (NSIC award - presented by the President

of India)

In 1999, the Business Baron recognized him as the "Most Admired CEO."

The PHD Chamber of Commerce and Industry presented him with the Distinguished

Entrepreneurship Award in 1997, in recognition of his outstanding exemplary

entrepreneurship.

Banaras Hindu University, Varanasi one of the most prestigious Universities of India

conferred him with a Doctrate; degree of " Doctors of letters" Honoris Causa in October

2004

The Government Of India honoured him with the prestigious " Padma Bhushan"in March

2005 for his contribution to Trade and Industry

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Dr.Lall has made an unfailing commitment of his time, energy and resources to strive for

the upliftment of the communities and villages around the Group's manufacturing units.

He has encouraged the setting up of numerous medical, educational and infrastructure

facilities. Amongst his notable contributions to his adoptive city, Ludhiana, are the

Ludhiana Stock Exchange, the Ludhiana Aviation Club - of which he is still the president

- and the Dayanand Medical College and Hospital.

HeroGroupCompanies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising following

companies, with an estimated turnover of 5600 Crores during the fiscal year 2011-2007.

The spirit to manufacture outstanding quality products at affordable prices and to manage

the perfect balance of fine quality and engineering satisfaction, is the Hero Group

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philosophy that drives the wheels of progress for the Group Companies and the Hero

Group, as a whole

A brief overview of the ever progressing and highly success-oriented Hero Group

Companies are:

1. Hero Honda Motors Limited

2. Hero Cycles Limited

3. Hero Cycles Limited (Unit II)

4. Munjal Showa Limited

5. Majestic Auto Limited

6. Hero Exports

7. Munjal Auto Industries Limited

8. Sunbeam Auto Limited

9. Munjal Castings

10. Highway Industries Limited

11. Rockman Cycle Industries Limited

12. Hero Cycles Cold Rolling Division

13. Munjal Auto Components

14. Satyam Auto Components Limited

15. Hero Global Design

16. Easy Bill Limited

17. Hero Motors Limited (Hero Puch

18. Herosoft

19. Hero Corporate Service Limited

20. Hero Mindmine

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Turnover of the group (2011-07): Rs. 5600 Crores

Hero Cycles Limited

Hero Honda Motors

Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Roc kman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited LOGO

Munjal Auto Industries

Limited

Munjal Showa Limited

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Munjal Castings

Munjal Auto Components

Hero Global Design

Hero Corporate Services

Limited -

- Hero ITES

- Hero Mind mine

- Hero Soft

Munjal e-systems

Profile (HERO CYCLES)

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Hero Cycles Limited

Type Private company

Founded 1956

Headquarters Ludhiana

Key people Brijmohan Lal Munjal

Industry Bicycles

Revenue 10,0000 crores Rs 2004-2005

Website http://www.herocycles.com/

Hero Cycles Limited, based in LudhianaBagpat, India, is the largestbicycle and related

product manufacturing company of India. The Hero Cycles Factory in Ludhiana is

considered to be the largest and the most efficient factory in the world

History

Hero group was started by the four Munjal brothers, hailing from a small town called

Kamalia, now in Pakistan in the year1944by establishing bicycle spare parts business in

Amritsar. After independence and partition of India, they moved to Ludhiana and started

a bicycle unit called Hero Cycles in 1956. By 1975, Hero cycles became the largest

bicycle manufacturer in India. In 1984, Hero group joined Honda Motors of Japan to

create Hero Honda Motors Limited which soon became one of the market leader in

motor-cycle sales in India. By the year 2004, Hero Honda became the world' largest

manufacturer of two-wheelers with over 48% market share in India. In year 2011, Hero

Honda entered the scooter production with launch of its new model - Pleasure.

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COMPANY PROFILE

Year of establishment: 1956

Registered Office: Hero Nagar G.T. road, Ldh

No. of employees: 3155 (513 staff &2642 workers)

Turnover of the company: 1400 crores

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Net profit: 63 crores

Products: mfg. of Bicycles & Bicycles parts

Constitution Closely Held Public Company

Works / Plant Unit no.I (cycle and C.R Division);

Hero Nagar, G.T road, ldh

Unit no. II;

Plot no.8, site IV,

Sahibabad Industrial Area,

Ghaziabad (U.P)

Unit No.III; (New Hero Auto Rim Division &New

Cycle Division) Focal Point, Phase VIII,

Mangli, Chandigarh Road,ldh

Promoters of the hero cycles

Mr. Dayanand Munjal founded the Hero Group of companies. The mission of the hero

Group was to establish themselves as the leaders in the bicycle industry in India and

strive to sustain this position continuously looking for technology and product innovation

Hero Group has come a long way. The Hero Group is a multifaceted group of companies,

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which has been successfully operating in the areas of bicycles, motor cycles, mopeds,

ancillary units and cold rolled steel. It is uncompromising quest for leadership, not just in

numbers but also in huge number.

Leadership in Hero is a way of word the Spirit of Hero. It is the spirit that keeps the

group moving all the way. It manifests it-self in whatever the group does and it is every

where, in the company, whether its employees, customers, vendors, suppliers etc. Munjal

brothers run the company with great dedication and sincerity. Hero is the largest selling

company of bicycles and motor cycles. Sh. BrijMohan Lall munjal is chairman of the

company, and his two brothers Sh. Satyanand munjal and Sh. Omparkash Munjal are co-

chairman cum managing directors of the company.

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The Mission Statement

"Its our mission to strive for synergy between technology, systems and human resources,

to produce products and services that meet the quality, performance and price aspirations

of our customers. While doing so, we maintain the highest standards of ethics and

societal responsibilities. "

This mission is what drives us to new heights in excellence and helps us forge a unique

and mutually beneficial relationship with all our stakeholders. We are committed to move

ahead resolutely on this path, shown to us by visionaries like Mr. Satyanand Munjal, Mr.

Om Prakash Munjal, the late Mr. Dayanand Munjal and lateMrRamanKantMunjal.

Mr Brijmohan Lall Munjal, Chairman & MD - THE HERO GROUP.

The Vision

"We, at the Hero Group are continuously striving for synergy between technology,

systems and human resources to provide products and services that meet the quality,

performance, and price aspirations of the customers. While doing so, we maintain the

highest standards of ethics and societal responsibilities, constantly innovate products and

processes, and develop teams that keep the momentum going to take the

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SUPER BRAND

Globally, a select few, exceptionally powerful brands, are recognized as Super Brands.

Some of the Indian brands have made it into this unique hall of fame, and amongst that

coveted group features Hero Cycles. Super Brands are actually the big ideas which

provoke us to explore the realms of our dreams and inspire us to live satisfying life styles.

Anchored in omnipotent consumer insights, the super brands go beyond mere functional

promises as they trigger deeply embedded emotional chords.

Hero Cycles has been one of the most progressive and dynamic brands for the decades

now. More than 3200 dealers, 4800 employees and more than 9.6 Crore satisfied

customers, have directly or indirectly, endeavoured tirelessly to make Hero Cycles a

phenomenal success and are the true guardians of this brand.

Ambitions, belief, empathy and a strong culture of sensitivity are at the heart of Hero

Cycles brand. Each of these values is reflected in the companys products, its

communication and its dealings with suppliers, employees, dealers and customers. Be it

companys environment friendly manufacturing processes or the brand initiatives for the

lower income customers, leadership is all about capturing the hearts & minds of the

people- the way a true Hero always does.

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Born out of Passion

The ore goes into fire only to shed off its impurities. Similar is the man whose virtues

shine when he is tried by the fire of life. Taking upon Novelty itself as a competitor, the

Hero Cycles, has been always striving for perfection and innovation in every aspect of

their dealings. The pursuit to innovate is endless at Hero, so much so that innovation

has become a buzz word in Hero premises. Hero Cycles has been able to use changes and

new trends to its advantage by identifying emerging need gaps and expanding its product

portfolio to appeal to different kinds of customers. In its endeavour to keep a step-ahead

of times, Heros most advanced & modern R & D department continuously creates

innovative products having functional attributes & aesthetics, meeting the aspirational

needs of its proud customers around the globe. As a result, Hero Cycles was able to

launch several new concepts and models in bicycles like the Mountain Bikes, Racer

Bikes, Dirt Terrain Bikes & D-frame bikes besides creating a variety of cycles for

different user segments and sub-segments including women and children, students,

adventure seekers, labourers, city customers and fitness conscious. Rolling out nineteen

new models in just one year, itself speaks volume for Heros emphasis on innovations &

designs

Quality : The Driving Force

At Hero Cycles, quality is a tradition, be it in the form of well trained labour, technically

superb machines or world class quality. The conformance to quality at Hero begins on

shop floor, with every worker ensuring at each stage manufacturing, that only perfect

product passes through his hands. Heros production department too believes in following

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the zero-defect approach and continuous upgradation of its manufacturing systems. The

marketing and operations teams are also constantly creating new and effective strategies

using modern management techniques. And finally, every Hero cycle goes through a

series of rigorous quality checks before it leaves the factory. No wonder, Hero is in proud

possession of ISO-9001, ISO-9002 & BVQI certifications and also ISO 14001,

environmental compliance endorsement from the Ministry of Environment.

Constant quality upgradation ensures that the company stays in the global mainstream

and maintains its edge, through excellence. A technology tie-up with National Bicycle

Industries of Japan led to the launch of the World 1 series of cycles, besides

introduction of new frame designing and features like- A-frame, D-frame, Y-frame, Swan

shaped frame, speedometers & indicators among others

Heroes moving the Globe

Today Hero Cycles is one of the handful companies in India which can boast of the

global scale of operations, not just in size or superior technology, but also its innovative

marketing strategies. True to its leadership stature, Hero has not only achieved a volume

of production that can be matched by no other cycle manufacturer in the world, but has

also started exporting bicycles to countries like US, Germany and Japan, which is a

manifestation of Heros quality and marketing capability. Heros forays into the overseas

markets pioneered the Indian export in bicycle segment as early as 1963. While initial

exports were restricted to the Africa and the Middle-East, today more than 50% bicycle

exports meet the demands of sophisticated markets in Europe and America. Indeed, to

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dare to explode from a small town of Ludhiana to worlds best and household name in 89

countries, it has Herculean task by any standards.

This Super Brand has still a long way to go but there is no hurdle too big and no

accomplishment permanent as this super brand thrives on the philosophy that Heroes in

the market-place are the ones, who forge strong relationship by being relevant, constant

and persistent, ...the True Heroes - in spirit and in form.

BULIDING RELATION

At Hero, its always believed that there is much more to life than just business. As a

company with a heart, it has certain commitments towards its employees, the society and

the nation. Though growing incomes, changing life styles and availability of cheap

customer finance has changed the market scenario enormously, Hero believes that cycles

can still be the driving force of the rural economy. By introducing the loan facilities

under Hero Cycle Loan Yojana through Corporation Bank and Oriental Bank of

Commerce, Hero Cycles has enabled low income customers to purchase cycles on easy

terms.

Commitment to its employees is just as important as commitment to the society. All

efforts are taken to make sure that employees are provided the best working conditions as

work culture at Hero revolves around the philosophy-if theres one way to work, its with

the heart. At Hero Cycles, there is a strong affinity towards building the relationships

with employees, workers, vendors and dealers. Job security, growth opportunity and

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respect are the unspoken, yet understood components of every mans package who

chooses to work within the fold of Hero family. It is quite common to find two

generations of the same family working together in the company, or the workers sharing

their skills with other family members and passing on finest training to each other. It goes

without saying that people at Hero are its largest investment and easily the largest asset.

At customer front too, Heros perception of customer relationship management (CRM)

does not end with merely meeting their expectations and aspirations or by ensuring

complete customer delight by overnight turnaround of customer complaints, but it goes

several steps beyond that horizon. The company believes in delivering value to the

customers even before they feel the need. This has helped Hero Cycles develop immense

brand loyalty and customer satisfaction. Like a true Super Brand, Hero has been able to

attract the respect and awe of not only its users, but also those who are directly or

indirectly exposed to it

Promotions

Until 1986, the company had no need for mass communication. But as competition

started growing, Hero Cycles begun to feel the need for creating lasting impression on the

customers mind. In the mid 1980s Hero was perceived to be the manufacturer of the

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basic black bicycles. The company required an image change. It needed to communicate

to customers the vast portfolio of products that it had, particularly in the recreational

segment. The launch of innovative products and their use as image builders happened

simultaneously. Since 1986, the communication strategy has been to build each product

separately and create a unique positioning for them. In this way the Ranger was

positioned as the bike for outdoor fun, Impact was the preferred choice among city riders

and Jet was projected as the lightest running roadster while Hawk was the racers edge.

Each of these launches and their promotion, gave the Hero brand a new meaning. The

brand has also used celebraties - including film stars Sanjay Dutt, Rani Mukherjee,

Hrithik Roshan and Ameesha Patel. The latest is Indias new bowling sensation, Irfan

Pathan who has also been a real life Hero cycle user.

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Krokx 10T

FRAME Ergonomically designed MIG weldedframe.

FORK Uni-Crown MIG welded fork.

HANDLE Stylishly designed, extra raisedHandle for comfortable riding. Soft

synthetic resin grips.

BRAKES Specially Engineered side pull

Caliper Brake system. Friction-freecable casings for effective braking.

PEDALS Specially designed resin molded

anti-skid body reflectorised pedals.

SADDLE Adjustable, hi-riser style bananatype comfortable saddle with

attractive backrest.

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TRAINER WHEELS Specially designed extra strong side

supporters. Attractive, large resinmolded wheels.

CRASH PAD SET Available crash pad on handle bar.

COLOR & GRAPHICS Available in attractive colors andgraphics.

Note : Due to continuous innovation & improvements,

specification is subject to change without notice. Accessories shown in the picture may or may not be a part of the

standard equipment with the bike.

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Milestones

Hero's success saga contains an element of spirit and enterprise; of achievement through

grit and determination, coupled with vision and meticulous planning.

1956 Hero Cycles Limited is established.

1961 Rockman Cycles Industries Limited established, which is

today the largest manufacturer of bicycle chains and hubs.

1963 It pioneered bicycle exports from India - a foray into the

international market.

1971 Highway Cycles was set up to meet the demands of Hero

Cycles. It is today the largest manufacturer of single speed

and multi-speed freewheels.

1975 Hero Cycles Limited became the largest manufacturer of

bicycles in India.

1978 Majestic Auto Limited was formed and the Hero Majestic

Moped was introduced.

1981 Munjal Castings established.

1984 Hero Honda Motors Limited established in joint venture

with Honda Motors of Japan, to manufacture motorcycles.

1985 Munjal Showa Limited established to manufacture shock

absorbers and struts and is today among the top two shock

absorber manufacturing companies in India.

1985 The 100 cc Hero Honda Motorcycle arrived and by 1988

was the No. 1 among all motorcycles in India.

1986 Hero Cycles Limited entered the Guinness Book of

Records as the largest bicycle manufacturer in the World.

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1987 Hero Motors, a division of Majestic Auto Limited set up

in collaboration with Steyr Daimler Puch of Austria.

1987 Gujarat Cycles Limited, now known as Munjal Auto

Industries Limited was established to manufacture and

export state-of-the-art bicycles and allied products in its

fully automated plant at Waghodia.

1987 Sunbeam Auto Limited, earlier a unit of Highway Cycles

Limited, established as an ancillary to Hero Honda. It is

the largest die casting plant in India.

1988 Introduced "Hero Puch" from Hero Motors Limited. This

revolutionary machine immediately set new records of

petrol efficiency and usable power in 50 - 65 cc machines.

1990 Hero Cold Rolling Division established and is one of the

most modern steel cold rolling plants.

1991 Hero Honda receives National Productivity Council's

Award.

1991 Hero Honda receives the Economic Times - Harvard

Business School Association Award against 200

contenders.

1992 Munjal Showa Limited receives National Safety Award.

1993 Hero Exports established as the International Trading

Division for Group and non-Group products.

1993 Hero Motors becomes Indias largest exporter of two

wheelers

1995 Hero Corporate Services Limited as the service segment

for the Hero Group Companies, ancillaries, suppliers,

dealers and other associates.

1996 - Hero Winner, a large-wheeled scooter was introduced by

Hero Motors Limited with a choice of 50 cc and 75 cc

engines.

1996 Munjal Showa Limited receives British Council's National

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Safety Award.

1998 - Hero Briggs and Stratton Auto Private Limited was set

up to produce 4-stroke two-wheeler engines in various

cubic capacities.

1998 Munjal Auto Components established to manufacture gear

shafts and gear blanks for motorcycles.

2000 The Hero Group diversifies into IT and IT enabled

services through its service segment - Hero Corporate

Services Limited.

2000-2001 Hero Honda emerges as the market leader in motorcycles

with sales of over a million motorcycles and a strong

market share of 47%.

2001 Hero Global Design established to offer engineering

services in CAD/CAM/CAE related to New Product

Development, Design, Engineering and Manufacturing.

2002 Hero Cycles ties up with National Bicycle Industries, part

of Matsushita Group to manufacture high-end bicycles.

2002 Fastener World Established.

2002 Easy Bill Established to offer utility bill collection &

retail services.

2003 Tie up with Livebridge Inc., USA.

2004 Tie up with Bombardier - Rotax GmbH for scooter

engines.

2004 Tie up with Aprilia Scooters, Italy.

2004 Hero Honda continues as the World's largest manufacturer

of two-wheelers with annual sales volume of 2.07 million

motorcycles and a market share of 48%.

2004Retail Insurance business established.

2004

HeroITES, a division of HeroCorporate Service Limited

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hived off as a division of new company Hero

Management Service Limited.

2005

HeroITES strengthens its relationship with

ACS,USA,USD 5.0 billion market cap and Fortune 500

company.

2011 Hero Honda enters the scooter segment, launches 100cc

"Pleasure"

2011 Hero Honda crosses a unit sales threshold of 3.0 million

motorcycles

2011Hero Group celebrates Golden Jubilee year since

inception.It was commemorated by sales of over 15

million motorcycles & over 100 million bicycles.

Today, Hero Group comprises of 20 companies, 300 ancillary suppliers, deep market

penetration with over 5,000 outlets, 23,000 + employee and has a turnover of US$ 3.20

billion (FY 2011).

Board of directors

Sh. Brijmohan lal munjal (Chairman)

Sh. Satyanand munjal (Co- Chairman cum M.D. of works)

Sh. Om parkash munjal (Co- Chairman cum M.D. of mktg. & admn.)

Sh. Vijay kumar munjal (M.D. of international marketing)

Sh. Suresh chandra munjal (M.D. of domestic mktg.)

Sh. Ashish kumar munjal (M.D. of unit-II Sahibabad)

Sh. Sunil kant munjal (M.D. of C.R..division)

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Sh. Pankaj munjal (M.D. of new hero auto rim division)

Sh. S.k. rai (M.D. of works)

Dr. M.a. zahir (Director)

Dr. D.r. singh (Director)

Organization Chart: Hero Group

44

Board of Directors

Mr. BrijMohanLalMunjal

Mr. O.P.Munjal

Mr.YogeshMunjal

Mr.VijayKumarMunjal

Mr.SunilKantMunjal

Mr.SureshChandraMunjal

Mr.AshishKumarMunjal

Mr. G.D.Kapoor

President

Mr.KJS

Bindra(SVP)

Mr. Bharat

Goel(SVP)

Mr. ACTiwari(VP)

Mr. MRMunjal(VP)

Mr. SSSaini(VP)

Mr. SK

Bhandari(SVP)

Mr. YN

Gupta(SVP)

Mr.AshokAbrol(VP)

Mr. AKMathur(VP)


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Physical Layout of Hero Cycles Ltd.

C.R.Division

Key to the physical Layout

1. Security 12. Scrap Yard2. Admn, Block and systems 13. Rim plant

3. Lawn 14. Boiler house

4. Tabular 15. Paint shop

5. Generator Room 16. Main store

6. Scrap Yard 17. Polish Shop

12

13

14

15

16

17

11

410

2

1

20

21

5

8

7

6

3 18

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Mr.NipunDang(GM)

Mr.VLSehgal(Sr.GM)

Mr.RKSehgal(AVP)

Mr. KNVijay(AVP)

Mr. AnilBhatia(AVP)

Mr.SwranSingh(GM)

Lt Col TKAnand(GM)

Mr. JitSingh(GM)

Mr. DalipKumar(GM)


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7. Export Store 18. Effluent Treatment plant

8. Export packing 19. Main Shed

9. Canteen 20. Stores

10. Ranger 21. Receipt and dispatch Store

11. Unit V

Major Products

The Hero Cycles Ltd. Manufactures cycles, rims, free wheels, hubs & chains and cold

rolled strips as a main product. Company has long portfolio of different range of cycles.

Company has 132models in the list, covers all the three section-gents, ladies and kids. It

also manufactures cycle parts for its own requirements. After fulfilling the requirements

of company, it can export its remaining quantity.

The main products are:-

i) Cycles

ii) Rims

iii) Free wheels

iv) Hubs and Chains

v) Cold Rolled strips

.Another feather in the cap

'Hero Cycles Limited'- has added another feather in the cap by entering into

strategic tie up with a leading bicycle manufacturer of Japan namely National

Bicycle Industries of National Panasonic in august 2002 to provide on technology

transfer for up gradation in phased manner.

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After its tie up with national Bicycle industries, it has introduced new models as

Cross fire, razorback, Synergy, Ranger Max, Hawlk NU Age, Nitrogen and

Princess.

Customer satisfaction

HERO has been consistently keeping pace with the time, by steady adhering to

consumer's aspiration. Over the year, the company has created market segments through

product innovation, meeting the aspirations of the youth and middle class the company is

honoring the watchword Customer Satisfaction. With its human approach, the company

is manufacturing an environment-friendly range of products.

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Global Gearing - Alliances

Over the years, Hero Group has strengthened its joint ventures, forged profitable

relationships with its partners and allied itself with some of the best players in the market.

Technology assimilation through wide sourcing has been and will continue to be an

integral part of the progression of the Hero Group.

Technology Related

Partnerships/

Alliances & Joint

Ventures

IT Related Alliances Product Engineering

Related Alliances

Microsoft,

Singapore

DynEd

International

ACS, USA

PTC

Porsche Design

Target Design

Universal CyclesPlc, UK

EralMetall,

Germany

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T.I Murugappa Group

Type Public (NSE,BSE)

Founded 1900

Headquarters Chennai

Key people M.A. Alagappan (Executive Chairman)

Industry

sanitaryware,Life Insurance, General

Insurance, fertilisers, abrasives,

automotive chains, car door frames &

steel tubes

Revenue $ 2 billion

Employees 28,000

Website http://www.murugappa.com/

Murguppa Group is an Indian conglomerate with interests in engineering, abrasives,

sanitaryware, fertilisers, finance, bio-products and plantations.

The group started in early 20th century. Started at the same Tiruvottriyur, Chennai (Now

Carborundum Universal Ltd)in the name of Ajax India Ltd and made hardwares.

The Murugappa Group, headquartered in Chennai, India, is a $ 2 billion (Rs 8,500 crore)

conglomerate with interests in engineering, abrasives, sanitaryware, fertilisers, finance,

bio-products and plantations. It has 29 companies under its umbrella, of which eight are

listed and actively traded on the National Stock Exchange and the Bombay Stock

Exchange. Together, they have over 28,000 employees.

CONSUMERS BUYING BEHAVIOR

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http://en.wikipedia.org/wiki/Category:Types_of_companieshttp://en.wikipedia.org/wiki/Public_companyhttp://en.wikipedia.org/wiki/National_Stock_Exchange_of_Indiahttp://en.wikipedia.org/wiki/Bombay_Stock_Exchangehttp://en.wikipedia.org/wiki/1900http://en.wikipedia.org/wiki/Chennaihttp://en.wikipedia.org/w/index.php?title=M.A._Alagappan&action=edit&redlink=1http://en.wikipedia.org/wiki/Industryhttp://en.wikipedia.org/wiki/Plumbing_fixturehttp://en.wikipedia.org/wiki/Life_Insurancehttp://en.wikipedia.org/w/index.php?title=General_Insurance&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=General_Insurance&action=edit&redlink=1http://en.wikipedia.org/wiki/Fertilisershttp://en.wikipedia.org/wiki/Abrasiveshttp://en.wikipedia.org/wiki/Roller_chainhttp://en.wikipedia.org/wiki/Coachworkhttp://en.wikipedia.org/wiki/Tubing_(material)http://en.wikipedia.org/wiki/Revenuehttp://en.wikipedia.org/wiki/Employmenthttp://en.wikipedia.org/wiki/Websitehttp://www.murugappa.com/http://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Image:Murugappa_logo.gifhttp://en.wikipedia.org/wiki/Category:Types_of_companieshttp://en.wikipedia.org/wiki/Public_companyhttp://en.wikipedia.org/wiki/National_Stock_Exchange_of_Indiahttp://en.wikipedia.org/wiki/Bombay_Stock_Exchangehttp://en.wikipedia.org/wiki/1900http://en.wikipedia.org/wiki/Chennaihttp://en.wikipedia.org/w/index.php?title=M.A._Alagappan&action=edit&redlink=1http://en.wikipedia.org/wiki/Industryhttp://en.wikipedia.org/wiki/Plumbing_fixturehttp://en.wikipedia.org/wiki/Life_Insurancehttp://en.wikipedia.org/w/index.php?title=General_Insurance&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=General_Insurance&action=edit&redlink=1http://en.wikipedia.org/wiki/Fertilisershttp://en.wikipedia.org/wiki/Abrasiveshttp://en.wikipedia.org/wiki/Roller_chainhttp://en.wikipedia.org/wiki/Coachworkhttp://en.wikipedia.org/wiki/Tubing_(material)http://en.wikipedia.org/wiki/Revenuehttp://en.wikipedia.org/wiki/Employmenthttp://en.wikipedia.org/wiki/Websitehttp://www.murugappa.com/http://en.wikipedia.org/wiki/India


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Understanding the buying behavior of the target market is the essential task of marketing

management under the marketing concept.

The consumer market consists of all the individuals and households who buy or acquire

goods and services for personal consumption.

Consumers vary tremendously in age, income, educational level, mobility patterns and

taste.

MODEL OF CONSUMER BEHAVIOR

Due to the growth in the size of firms and markets, marketing decision makers have been

removed from direct contact with their customers. Managers have had to turn to

consumer research. They spend more money in trying to learn : Who buys? How do they

buy? When do they buy? Where do they buy? Why do they buy?

How do consumers respond to various marketing stimuli, arranged by the company, is

main question. Therefore, business & academic researchers have invested much energy in

researching the relationship between marketing stimuli and consumer response.

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Outside Stimuli Buyers Black box Buyer

respo

nses

Marketing Other

Product

Price

Place

Promotion

Economic

Technological

Political

Cultural

Buyer

Characteristics

Buyer

Decision

Process

Product choice

Brand choice

Dealer choice

Purchase choice

Purchase

amount

MODEL OF BUYER BEHAVIOR

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Their starting point is the stimuli-response model. Above figure shows marketing and

other stimuli entering the buyers black box and producing certain responses. The

stimuli are of two types. Marketing stimuli consists of the 4 Ps : Product, Price, Place and

Promotions. Other stimuli consist of major forces and events in the buyers environment

economic, technological, political and cultural. All these stimuli pass through the buyers

black box and produce the set of buyer responses: Product choice, brand choice, dealer

choice, purchase timing and purchase amount.

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MAJOR FACTORS INFLUENCING CONSUMER

BEHAVIOR

Consumers purchases are highly influenced by cultural, social, personal andpsychological factors.

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Cultural

Culture Social

Subculture

Social class

Reference

grou

ps

Personal

Family

Roles and

status

Age and life

Cycle

stage

Occupation

Psychological

Motivation

Perception

Learning belief& attitude

Buyer

DETAILED MODEL OF FACTORS INFLUENCING BEHAVIOR

(A) CULTURAL FACTORS:

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Cultural factors exert the broadest and deepest influence on consumer behavior.

CULTURE:

Culture is the most fundamental determinant of a persons wants and behavior. The child

growing up in a society learns a basic set of values, perception, preference & behavior

through a process of specialization involving the family & other key institutions.

SUBCULTURE:

Each culture contains smaller groups of subcultures that provide more specific

identification & socialization for its members. Four types of sub culture can be

distinguished.

(i) Nationality groups.

(ii) Religious groups.

(iii) Racial groups

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(iv) Geographical areas.

SOCIAL CLASS:

Virtually all human societies exhibit social stratification. More frequently, stratification

takes the form of social classes. Social classes are relatively homogenously and enduring

divisions in a society, which are hierarchy ordered and whose members share similar

values, interests, and behavior.

(B) SOCIAL FACTORS:

A consumers behavior is also influenced by social factors, such as the consumers

reference groups, family, and social roles and statuses.

(i) REFERENCE GROUPS:

A persons reference groups are those groups that have a direct or indirect influence on

the persons attitudes or behaviors. Groups influence will be stronger for products that will

be visible to others whom the buyer respect.

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(ii) FAMILY:

Members of the buyers family can exercise a strong influence on the buyers behavior.

The family of orientation consists ones parents. From parents a person acquires an

orientation toward religion politics, & economics and a sense of personal ambition self-

worth & love. The following products and services fall under such.

Husband-dominant : Life insurance, automobiles

Wife-dominant : Mixer, Washing Machine, and Kitchenware

Equal : Housing, Entertainment, and Housing Furniture

(iii) ROLES AND STATUSES:

Participating of buyer in the different groups as clubs, organization influence his/her

buying behavior. His/her position in the different groups can be termed as roles & status.

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A role consists of the activities that a person is expected to perform according to the

persons around him/her. Each role carries a status reflecting the general esteem :

accorded to it by society.

(C) PERSONAL FACTORS:

Personal factors a buyers decisions by his/her personal characteristics, occupation,

economic circumstances, life style, and personality & self- concept.

(i) AGE & LIFE CYCLE STAGE:

People change the goods and services; they buy over their life time. They eat baby food

in childhood, most foods in the young age and special diets in the later year.

(ii) OCCUPATION:

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A persons consumption pattern is also influenced by his or her occupation. A blue-chip

worker will purchase good clothes, care etc.

(iii) ECONOMIC CIRCUMSTANCES:

A persons economic circumstances will greatly affect product choice. His economics

circumstances consists of their spend able income, saving & assets, borrowing power.

(iv) LIFE-STYLE:

A persons life style is that persons pattern of living in the world as expressed in the

persons activities, interests & opinions.

(d) PSYCHOLOGICAL FACTORS:

A persons buying choices are also influenced by four major psychological factors-

(1) Motivation

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(2) Perception

(3) Learning

(4) Beliefs and Attitudes

( E) BUYING ROLE:

For many products, it is easy to identify the buyer. Men buy shaving Cream, Razor,

Cigarette etc. While cosmetic, pantyhose etc.

Thus, we can distinguish several roles people may play in a buying decision.

Initiator : One who first suggests or thinks of the idea of buying the particular

product or service.

Influencers : One whose views or advice carries some weight in making

the final decision.

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Decider : One who ultimately determines any part of, or the entire

buying decision whether to buy, what to buy, or where to

Buy.

Buyer : One who makes the actual purchase.

User : One who consumes or uses the product or service.

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TYPES OF BUYING BEHAVIOR

There are four types of consumer buying behavior based on the degree of buyer

involvement in the purchase and the degree of differences among brands.

High involvement Low involvement

Significant

Differences

Between brand

Complex buying

Behavior

Variety seeking buying

behavior

Few difference between

brand

Dissonance reducing

buying behavior

Habitual buying behavior

(a) COMPLEX BUYING BEHAVIOR

Consumers go through complex buying behavior when they are involved in a purchase

and aware of significant difference existing among brands. Consumers are highly

involved ma purchase when it in expensive, risky and highly expressive.

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(b) DISSONANCE - REDUCING BUYING BEHAVIOR

When the consumers are highly involved in a purchase but see little differences in the

brands. It in based on the fact that the purchase is expensive, infrequent & risky. For

example, shopping for carpet.

(c) HABITUAL BUYING BEHAVIOR

Many products are bought under conditions of low consumer involvement and absence of

significant brand differences. A good example is the purchase of salt.

(d) VARIETY-SEEKING BUYING BEHAVIOR

Some buying situations are characterized by low consumer involvement but significant

brand difference e.g. in purchasing cookies.

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CONSUMER BUYING BEHAIOUR

SALES PROMOTION - A THEORETICAL FRAMEWORK

Sales promotion consists of a diverse collection of incentive tools, mostly short-term,

designed to stimulate quicker and / or greater purchase of particular products / services by

consumers or the trade.

Whereas advertising offers a season to buy, sales promotion includes tools for consumer

promotion e.g. samples, coupons, cash refund offers, prices-off, premiums, prizes,

patronage rewards, free trials, warranties, demonstration, contests:

Trade promotion e.g. buying allowances, free goods, merchandize allowance, cooperative

advertising, advertising and display allowances, push money, dealer sales contests.

Sales force promotion (bonuses, contests, sales rallies).

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Sales promotion tools are used by most organizations, including manufacturers,

distributors, retailers, trade associate and non-profit organizations.

A decade ago, the advertising-to-sales promotion ratio was about 60/40. Today in many

consumer packaged goods companies, the picture is reversed with sales promotion

accepting for between 60-70% of the combined budget. Sales promotion expenditures

have been increasing 12% annually, compared with advertisings increase of 7.6% of the

fast growth is expected to continue.

Several factors contributed to the rapid growth of sales promotion, particularly consumer

markets.

Internal factors include the following

Promotion is now more accepted by top management as an effective sales tool.

More product managers are qualified to use sales promotion tools;

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Product manager are under greater pressure to increase their current sales.

External factors Includes the following:

The number of brands has increased.

Competitors use promotions frequently.

Many brands are at parity. Consumers are more deal oriented.

The trade has demanded more deal from manufactures.

Advertising efficiency has declined because of arising costs, media costs and legal

restraints.

The rapid growth of sales promotion media (contests, coupon etc) has created a situation

of promotion clutter. Similar to advertising clutter. There is a danger that consumers will

start tuning out, in which case coupons. And other media will weaken in their ability to

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trigger purchase. Manufacturers will have to find ways to rise above the clutter, for

instance, by offering large coupons, redemption values or using more dramatic point of

purchase displays or demonstrations.

PURPOSE OF SALES PROMOTION

Sales promotion tools vary in their specific objectives. A free sample stimulates

consumer trial, while a free management advisory service cements a long term

relationship with retailers.

Sellers used incentive type promotions to attract new tiers, to reward loyal customers, and

to increase the repurchase rates of occasional users.

New tiers are of three types

Users of another brand in the same category.

Users in other categories and

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Frequent brand switches.

Sales promotions often attract the brand switches, because users of other brands arid

categories do not always notice or act on a promotion. Brand switches are primarily

looking for low price, good value or premiums. Sales promotion is unlikely to turn them

into loyal brand users; Sales promotions are used in markets of high brand users. Sales

promotions are used in markets of high brand similarity produce a high sales response in

the short run but little permanent gain in market share. In markets of high brand

dissimilarity, sales promotions can alter market share more permanently.

Sellers often think of sales promotion as designed to break down brand loyalty, and

advertising as designed to build up brand loyalty. Therefore, an important issue for

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marketing managers is how to divide the budget between sales promotion and

advertising.

Ten years ago marketing managers would decide what they needed to spend on

advertising and put up the rest on sales promotion. Today marketing mangers first

estimate what they need to spend in trade promotion, then what they need to spend in

consumer promotion and whatever is left they will budget for advertising.

A study conducted by Brown has revealed the following:-

Sales promotion yield faster response in sales than advertising does.

Sales promotions do not tend to yield new, long term buyers in mature markets

because they attract mainly deal prone customers who switch among brands as

deals become available.

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Loyal brand buyers tend not to change their buying patterns as a result of

competitive promotion.

Advertising appears to be capable of increasing the prime franchise of a brand.

There is also evidence that price promotions do not permanently build total category

volume. They usually build short term volume that is not maintained. Small share

competitors find it advantageous to use sales promotion, because they cannot afford to

match the large advertising budgets of market leaders. Nor can they obtain shelf space

without offering trade allowance or stimulate consumer trial without offering consumer

incentives. Price competition is often used by a small brand seeking to enlarge its share,

but it is IT less effective for a category leader who growth lays in expanding the entire

category.

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Sales promotion seems most effective when used together with advertising. In one study,

point-of purchase displays related to current TV commercials were found to produce 15%

more sales than similar displays not related to such advertising. In another, a heavy

sampling approach along with TV advertising proved more successful than either TV

alone or TV other coupons in introducing a product.

SELECTING THE SALES PROMOTION TOOLS

Sales promotion tools are selected keeping in view the sales promotion objectives. These,

objectives are derived from broader promotion objectives which are derived from more

basic marketing objective d for the product. The specific objectives set for sales

promotion will vary with the type of target market.

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For consumers objectives include encouraging purchase of larger size units, building trial

among non-user and attracting switches away from competitors brands.

For retailers objectives inducing retailers to carry new items and high level of inventory,

encouraging off season buying, encouraging stocking of related items, offsetting

competitive promotions, building brand loyalty of retailers and gaining entry into new

retail outlets. For the sales force, objectives include encouraging support of a new

product or model, encouraging more prospecting and stimulating off-season sales.

Many sales promotion tools are available to accomplish these objectives.

The main sales promotion tools are designed for consumer promotion, trade promotion

and business promotion.

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CONSUMER PROMOTION TOOLS:

The main consumer promotion tools include samples, coupons; cash refund offers, price

packs, premiums, prizes, patronage awards, free trials, product warrantees, tie-ins, and

point-of-purchase displays and demonstrations.

SAMPLES:

They are offers of a free amount or trial of a product to consumer. The sample might be

delivered door to door, sent in the mail; picket up in a store, found attached to another

product or featured in an advertising offer. Sampling is the most effective and most

expensive way to introduce a new product.

COUPONS:

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They are certificate entitling the bearer to a stated saving on a purchase of a specific

product. Coupons can be mailed, enclosed in or on other products, or inserted in

magazine and newspaper advertisements.

CASH REFUND OFFERS:

Cash refund duffers or rebates are like coupons except that the price reduction occurs

after the purchase rather than at the retail shop. The consumer sends a specified proof of

purchase to the manufacturer who in turn refunds part of the purchase price by mail.

PRICE PACKS:

Price packs are offers to consumers of savings off the regular price of a product flagged

on the label or package. They may take the form of a reduced price pack which is single

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packages sold at a reduced price, or banded pack, which is t related products banded

together (such as a toothbrush and toothpaste). It is very effective in stimulating short

term sales.

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PREMIUM (OR GIFTS):

Merchandise deferred at a relatively low cost or free as an incentive to purchase a

particular product. A with-pack premium accompanies the product inside (in pack) or on

(on pack) the package. This may include reusable container, T-shirts, combs etc.

PRIZES:

They are offers of the chance to win cash, trips, or merchandize as a result of purchasing

something

FREE TRIALS:

They consist of inventing prospective purchasers to try product without cost in the hope

that they will buy the product.

TIE IN PROMOTIONS:

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In a tie in promotion, two or more brands or companies team up on coupons, refunds, and

contests to increase their pulling power. Companies pool funds in the hope of broader

exposure.

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POINT-OF PURCHASE (POP) DISPLAYS AND DEMONSTRATIONS:

They take place at a point of purchase or sales. A five foot high cardboard display of a

product next to the shelf where the product is stored is an example.

Apart from these contests, exchange schemes, service discounts, easy installments and

finance offers are also employed.

In developing a sales promotion program, the marketer must make further decisions to

define the full promotion programme. The marketer has to determine the size of the

incentive to offer. A certain minimum incentive level will produce more sales response

but at a diminishing rate. Conditions for participation have to be established. Incentives

might be offered to everyone or to select groups. A premium might be offered only to

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those who turn in box type or proof-of-purchase seals. Sweeps takes might not be offered

in certain states or to families of company personnel or to persons under a certain age.

Then the marketer has to decide on the duration of promotion. If the sales promotion p is

too short than many prospects will not be able to take advantage and if its too long then

the deal may lose some of its act now force. According to one researcher the optional

frequency is about 3 weeks per quarter.

The marketer must choose a distribution vehicle e.g., a 15% off coupon can be distributed

in the package, store mail or advertising media.

The timing of promotion must be established and finally the marketer must determine the

total sales promotion budget.

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In spite of the extra precautions, steps taken by the marketers, there are certain problems

which are faced by them as far as sales promotion is concerned.

First of all promotions might decrease long run brand loyalty by making more consumers

deal prone rather than advertising prone.

Second promotions can be more expensive than they appear and some are inevitably

distributed to wrong consumer e.g. noneswitches, always switches and the companys

own customers.

In spite of all these problems, sales promotions will continue to play a growing role in the

total promotion mix.

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OBJECTIVES OF THE RESEARCH

To study the factors influencing the choice of customers while buying cycles.

To study the satisfaction level of customers of geared cycles

To study the performance of various cycle brands on selected parameters.

RESEARCH METHODOLGY:

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SCOPE OF THE STUDY

The project involves, the study of the segmentation, targeting & positioning of Hero

Cycle two-wheeler in the market. And what people think about it.

Hero Cycle. It includes carrying out a survey among customers & the industry people as

well as the dealers. It also involves the devising of repositioning of the existing brand by

some modifications; advertisement should be so made that the targeted segment comes to

know what the Cycle is. How is it better from others. So, that in near future this Cycle

becomes a grand success. Information regarding the market share, cost factors, the

marketing and promotional strategies etc was collected from primary data sources

Research Design

The research design is a pattern or an outline of a research projects working, it is a

statement of only the essential elements study, those that provide the basic guidelines for

the details of the project. Further a research design is an arrangement of conditions for

collection and analysis of data in a manner that aims to combine relevance to the research

purpose with economy in procedure. It constitutes the blueprint for collection,

measurement and analysis of data. Research design stands for advance planning of the

methods to be adopted for collecting the relevant data and the techniques to be used in

their analysis, keeping in view of the objectives of the research.

The present study, being conducted, followed a descriptive design. It produces a picture

of the phenomenon in which the decision maker is interested. As the data would be

responses from a sample containing large number of source. Design of descriptive studies

includes the nature and source of the data, the nature of expected results and the

analytical method.

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The research design for my research is descriptive, as I will be exploring some new facts

about the CYCLES IN BAGPAT-selected insight into Market Behavior.

Data Collection

For my research study the data has been collected by both the primary & secondary

means. The primary data has been collected regarding the different attributes to be

considered while preparing the questionnaire. The questionnaire was then designed

keeping in mind the objectives of the study.

For primary data collection I adopted the structured questionnaire, which was filled by 21

respondents. The questionnaire was filled personally by visiting the respondents at their

respective locations.

The secondary data of my research has been collected through magazines, journals and

some previous researches.

Sampling Plan

Sampling is an effective step in the collection of primary data and has a great influence

on the quality of results. The sampling plan includes the universe, population, sample size

and sample design.

Universe

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Documents

Customer Preference for Bi-cycles in Bagpat With Special Reference to Hero