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INTRODUCTION

1.1 HISTORY

ABOUT THE CHAIRMAN

Brijmohan Lall Munjal – Seeding a Dream

"Don't dream if you can't fulfill your dreams'' Brijmohan Lall Munjal is often fond of saying. The

founder and patriarch of the $ 2.8 billion Hero Group is your classic first generation

entrepreneur. He is a man who started small, dreamt big and used a combination of grit and

perseverance to create one of the country's largest corporate groups and the World's No.1 Two

Wheeler Company.

Instinctive from a young age, Brijmohan Lall made a rather unusual start in life. Around the time

when the freedom movement in India was taking shape in the late 1920s, he walked into a newly

opened Gurukul (Indian heritage school) near his home in Kamalia (now in Pakistan). He was

only six years old then.

Thus began an extraordinary tale of courage and perseverance. Brijmohan began his business

story after partition in 1947, when he and his brothers relocated to Ludhiana. The family set up acompany that provided poor people with basic transport (cycles). Three decades later, as India

evolved, he added a second crucial chapter - which visualized affordable and technologically

superior transport to millions of middle class Indians. The rest is history.

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Building Relationships

When Brijmohan and his brothers started out, there was no concept of organized dealer

networks. Companies just produced, and most dealers functioned like traders. Brijmohan

changed the rules of the business by trusting his gut instincts; introducing business norms thatwere ahead of their time, and by investing in strategic relationships.

Brijmohan built a series of bonds and networks with hundreds of family members, vendors,

dealers and employees. Much like the Japanese keiretsu system, these networks are now the glue

that holds the Hero Group together.

"Thanks to the relationships that we have nurtured so passionately in the Hero Family, the

younger generations of some of our bicycle dealers have become dealers of Hero Honda. These

relationships have survived through generations - through bad times and good times'' the

patriarch now reminiscences.

Besides bonding with his vendors and dealers, Brijmohan has been personally responsible for

kindling a spirit of entrepreneurship amongst his employees, and today, 40 of his former

employees are successful entrepreneurs.

Staying Ahead

Though not technically qualified in the conventional sense, few of his contemporaries have

understood the dynamics of technology better than Brijmohan Lall has. He could always

visualize the applicability of technology before others could. For example, in the 1980s, when all

two-wheeler companies in India opted for two-stroke engine technology, Brijmohan preferred a

four-stoke engine - a technology that dramatically increased fuel efficiency and reduced

maintenance costs. This technology was one of the biggest reasons for Hero Honda's stupendous

success.

Time and again, Brijmohan managed to steal a march over his industry peers. For example, when

Honda Motors of Japan was looking for a collaborator in the 1980s, the Hero Group was not high

up the pecking order initially as there were other more eligible and established suitors.

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Yet it didn't take long for the astute Japanese to realize that the Hero Group and Honda had much

more in common than earlier perceived; there a sharp focus on financial and raw material

management, and employee turnover was low. Honda officials were also amazed to find that the

Munjals were already practicing "Just-in-time-inventory" at the time (JIT). It turned out that

Brijmohan Lall's aspiration to provide cheap transportation to India's poor by default ensured

lean and cost-effective operations. This in turn increased vendor efficiency and led to near-zero

inventories.

A Corporate Citizen

A frugal upbringing and a value system modeled on the famous Gurukul system - which stresses

the sanctity of the teacher-pupil relationship - imbibed in Brijmohan a strong sense of social

commitment and responsibility.

There is a special place in his heart for Ludhiana, the city where he took roots. Today, Ludhiana

is a modern, bustling city, but Brijmohan has played no mean role in its evolution. Several

schools and educational institutions in Ludhiana owe their existence to the Munjal family.

The Ludhiana Stock Exchange owes its existence to Brijmohan's vision as does the Ludhiana

Flying Club. He's also set up the not-for-profit Dayanand Medical College and Hospital-an

institute now rated as one of the best medical colleges in India, in terms of infrastructure, quality

of staff and alumni profile.

In and around Dharuhera, near the first Hero Honda plant, Brijmohan and his family have left

their stamp of philanthropy. The Raman Kant Munjal Foundation - which Brijmohan set up in

memory of his eldest son, today runs a higher secondary school and a very modern and well-equipped 100-bed hospital at Dharuhera. The group has also adopted numerous villages and

provides education, vocational training, drinking water, roads, streetlights and sewerage.

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Hero Honda Group & Hero Honda Motors Ltd.

"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 & two-wheeler manufacturer today (Hero Honda Motors Ltd. was startedin the year 1984 as a JV between Hero Group & Honda Motors, Japan), the odyssey was fuelled

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, group roll

its 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.

"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.

From now on, we would mean Hero Honda Motors Ltd. whenever we state either “Hero Honda”

or “HHML” and the Hero Group in totality when we state simply “Hero”.

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1.2.Mission:

“Hero Honda’s mission is to strive for synergy between technology, systems and human

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

aspirations of its customers. At the same time maintain the highest standards of ethics and social

responsibilities.

This mission is what drives Hero Honda to new heights in excellence and helps the organization

forge a unique and mutually beneficial relationship with all its stake holders.”

1.3. Vision:

Aspiration of providing “cheapest” transportation to the poorest of India’s poor

Hero Honda now the leader in the two wheeler industry. Leaders are not born, they evolve over

time. It all started on the auspicious. “Baisakhi Day” the 13 th of April 1984, when the Hero

Honda Motor Company joined hands. On its journey to take on the No. 1 morale, Hero Honda

created some prominent milestones…..

This leadership has been achieved only because of its philosophy to excel in all areas. In fact,

passion to excel is a credo of the entire Hero Honda family and is a way of life in Hero Honda.

The changing Scenario of increasing competition and the entry of new brands has made thecredo even more relevant. It serves as a constant reminder to ensure excellence in providing

service to the customer. They are providing outstanding customer service.

It is in keeping with Hero Honda’s own passionate commitment to provide ultimate customer

satisfaction. Today, they consistently meet and exceed all requirements on quality,

cost and delivery.

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Mandate:

“Hero Honda is a world leader because of its excellent manpower, proven management,

extensive dealer network, efficient supply chain and world-class products with cutting edge

technology from Honda Motor Company, Japan. The teamwork and commitment are manifested

in the highest level of customer satisfaction, and this goes a long way towards reinforcing its

leadership status.”

1.4. Objective & Values:

Hero Honda’s mission is to strive for synergy between technology, systems and human

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

aspirations of its customers. At the same time maintain the highest standards of ethics and social

responsibilities.

This mission is what drives Hero Honda to new heights in excellence and helps the organization

forge a unique and mutually beneficial relationship with all its stake holders.

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."

The group philosophy clearly states what the group objectives are and stresses the focus on –

customers, providing reliable and affordable mobility for the masses and other stakeholders like

employees, suppliers, distributors, society and environment at large.

Apart from being customer-centric, the Hero Group provides its employees with a fine quality of

life and its business associates (suppliers & distributors) with a total sense of belonging, thus

strengthening the bond that is already deep-rooted

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1.5. Update on Business Strategies

Sales and market share leadership

Hero Honda crossed a unit sales threshold of 3 million units in the FY 2005-06, which is a

worldwide first. This helped the company achieve the distinction of having a 15 million strong

customer base since its inception. The company maintained its market leadership position with a

healthy 40% share in the two wheeler industry.

Extending brand equity to new categories

Year 2005-06 saw the entry of Hero Honda into the scooter segment with 100 cc Pleasure,

targeted primarily at women, which was launched in January 2006. Pleasure has been received

very well by the market and is expected to revitalize the scooter market in India, and enhance the

share of scooters amongst overall two wheelers.

Hero Honda has also delivered an industry first by launching a business line for pre-owned

motorcycles branded as Hero Honda Sure!

Technological leadership

Continuing its two decade old tradition of introducing best-in-class products and technologies,

Hero Honda introduced two new engine platforms (Quantum Core) for the 125 cc and 150 cc

motorcycle categories, thereby consolidating its technological leadership in the motorcycle

segment. These engines provide higher power and higher fuel efficiency, currently unmatched in

the industry.

Stronger product portfolio

A total of 4 new motorcycles were launched in 2005-06 -- CD Deluxe, the 125 cc Glamour, the

150 cc Achiever and the 125 cc Super Splendor all with long term warranty, and superior

proposition in terms of fuel consumption and power delivery. Company’s new motorcycle

launches have been a whopping success.

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Path breaking retail and consumer initiatives

FY 2005-06, also witnessed industry redefining market initiatives by Hero Honda – launch of

women exclusive retail outlets for the new scooter, Pleasure, under the brand name, Just4Her and

launch of Lady Rider, India’s first women rider club.

Hero’s strategy that made Hero Cycles and Hero Honda

Global leaders revolved around 5 themes:

1. Hero Group NOT only as a “low cost provider” but also as “VALUE FOR MONEY” provider

2. Build strong alliances and relationships with all stakeholders in the chain

3. Benchmark against best global practices Product Innovation keeping in mind thesensitivities of the target market

4. Strong culture of performance

5. Thorough understanding of

*Fast-changing consumer behavior,

*new market segments and*product opportunities through customer interaction &feedback

6. Superior service orientation

7. Investments in Technology up gradation

8. Using foreign collaboration to assist in new design and production processes

9. Focus on “Quality”

10. Productivity and Profitability

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A SWOT Analysis is used to evaluate a company's strengths, weaknesses, opportunities and

threats. This report examines Hero Honda Motors Limited's key business structure and

operations, history and products, and it provides summary analysis of key revenue lines and

strategy. Use this report to understand the internal and external factors that affect Hero Honda

Motors Limited's performance in achieving its business goals.

The Hero Honda Motors Limited - SWOT Analysis company profile is the essential source for

top-level company data and information. Hero Honda Motors Limited - SWOT Analysis

examines the company’s key business structure and operations, history and products, and

provides summary analysis of its key revenue lines and strategy.

1.6 SWOT analysis of Hero Honda Motors

(India):

Strengths:

• Technological support from Honda Motors, Japan.

• The company has a deeply penetrated dealer network.

• The company provides good after sales service through its well-established dealer network.

• The company enjoys a huge market share and well established brands like Splendor+,

Passion+, CBZ-xtreme

Weaknesses:

• Hero Honda depends on Honda for new products and this is a big weakness.

• The company doesn't have a product catering to Rs. 25,000 - Rs. 35,000 segment, and the

company might suffer on account of this as the imported motorcycles and foreign players'

motorcycles are expected to cater to this particular segment of the market. This can result in

fall in the market share of the company.

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• The company imports about 31% of its spare requirements. This makes the company

vulnerable to the import policies of the government. It also exposes them to the exchange rate

risk.

Opportunities:

• The motorcycle segment is growing at the rate of 33%, which provides a great opportunity

for the company to cash on.

• Also it is experiencing a shift in the customer preference for 4-stroke mobikes (automatic

scooters). This again provides an excellent opportunity to Hero Honda to leverage its market

share and market leadership for sustained profitability

Threats:

• The technical collaboration with Honda is valid only for a period and this is a serious threat

as they have been dependant on Honda for technology. Also Honda has set up its 100%

subsidiary in India which has start producing motorcycles from 2008. This has further

increased the competition.

• The company has plans to foray into the scooter segment, which can also be a major threat

for the future prospects of the company. The reason being that the consumers are shifting

from scooters to motorcycles and at this hour moving from motorcycles to scooters doesn't

sound logical.

TOOLS:

2.1. BENCHMARKING

AVAILABLE NOW! LABOR PRODUCTIVITY BENCHMARKS AND VERTICAL GAP ANALYSIS ON

Hero Honda

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San Diego - – Published today by ICON Group International, Ltd. Two of the most

comprehensive studies to date on labor productivity and vertical gap analysis benchmarks for

Hero Honda (BOM).

The methodologist for this unique study is Philip Parker, Eli Lilly Chair Professor of Innovation,

Business and Society at INSEAD (Fontainebleau, France and Singapore). According to Professor

Parker, “With the globalization of markets, greater foreign competition, and the reduction of

barriers to entry, it becomes all the more important to benchmark a company’s financial

indicators on a worldwide basis. World stock markets have recently witnessed a return to

fundamental financial analysis. ” The goal of the reports is to assist consultants, financial

managers, strategic planners, and corporate officers in gauging certain indicators of Hero

Honda’s financial and human resource structure.

The report has benchmarked Hero Honda against competing firms in the Transportation

Equipment Manufacturing industry worldwide—going beyond traditional methods of company

benchmarking. The results are two specialized reports: (1) global financial benchmarks using

common-size statement ratios (vertical analysis), and (2) labor productivity and utilization

measures collected across borders.

1. FINANCIAL BENCHMARKS2. LABOR BENCHMARKS

2.2 Value Chain Analysis:

It is quite obvious that Hero Honda possesses some competitive advantages over competition,

enabling them to be the largest two-wheeler maker in the world for the 7 th year in a row and

commanding a hefty market share of 52% of Indian two-wheeler market (Ref. Annual Report,

’07-’08, HHML) and continuing to grow at a healthy rate of 13% (PAT) amid worsening

financial crisis and deepening of recessionary influences. We attempt to ascertain the

competitive advantages that HHML has by analyzing its value chain.

Primary Activities

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Inbound Logistics

From early days, HHML tried to have close integration with suppliers as vendor management is

critical for its operation, for the simple fact that 73% of production cost is due to material

components. Thus it is essential for HHML to ensure tight control & reduction of logistical cost

and/or transaction cost when procuring components. Additionally, reduction of inventory will be

an added boon so that working capital requirement will be less.

With these aims, HHML adopted “ Just In Time” (JIT) manufacturing philosophy which

demanded close coordination between its manufacturing facilities and the vendors and 25

ancillary units.

Operations

As was being described above, HHML is probably the only Indian company to have truly

mastered the art of JIT manufacturing. HHML also follows Lean Manufacturing, uses high

degree of automation levels (full automatic robotic operation in welding and some other specific

areas) to ensure high efficiency, low inventory production, with usual benefits like increased

cash flow, reduced cash & operating cycles and thus improved working capital conditions. These

fully equipped plants where these manufacturing concepts have been applied during plant layout,

design & commissioning phases are the unique tangible assets that HHML has.

HHML has three manufacturing facilities at Dharuhera, Gurgaon and Haridwar (newest), with

annual production capacity of 4.5 million units. With employee strength being in the range of

4320, the productivity per employee is very high. Further, the concepts of Lean Manufacturing,

JIT & Integrated Supply Chain have been applied from the start in Haridwar plant making it

highly efficient.

Technological know-hows, design improvements etc for two-wheelers are provided by Honda

after the initial design requirements as espoused by customers and market trends put in astructured form by Hero Honda R&D team in India.

Outbound Logistics

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HHML feeds the demand in India & exports ~ 95,000 bikes through its well established delivery

channels from the 3 plants. The effort is to provide for minimum waiting period or rather filling

the regions as per the demand forecasts and market trends

Marketing & Sales

Marketing arm of HHML started the hugely successful “Fill it, Shut it, Forget it” campaign years

ago to pitch for its better fuel efficiency and thus lower owning cost. It has been a constant strive

for HHML’s marketing efforts (in advertisements, in promos) to focus the value for money and

reliability of its products and thus attracting new customers and retaining customers as well. Toensure customer loyalty, HHML has come up with Hero Honda Passport Program which gives

special privileges to its customers. HHML does not indulge in price wars in an effort to maintain

the perception of enduring quality among present & potential customers. Of late, there were

complaints from customers that HHML is not dynamic enough to present newer, flashier & more

powerful bike models in the premium segment that competitors like recharged Bajaj is offering.

Another complaint was that many of the variants offered by HHML have little or insignificant

product differentiation which can justify the price difference. HHML has paid heed to these

stated & unstated needs of its customers and improved the 4P’s (Product, Price, Place &

Promotion). Its offerings now are well accepted in the market.

HHML has roped in popular heartthrob Hrithik Roshan as its brand ambassador to give impetus

to its marketing efforts. It has been a constant endeavor of HHML to cater to both urban and

rural markets with similar zest, with advertising campaigns and promotional events clearly

focusing on the two markets – “Har Gaon, Har Angaan” is the recent rural connect initiative to

cover ~ 23,360 villages with a population of 5000 or more by 500 specially trained rural sales

executives.

HHML has a conscious strategy of penetrating new markets and unrepresented territories

through its distribution network which is made up of dealers, authorized representatives,

stockiest and SSPs. In March 2001, the company had 826 such customers’ points in India. By

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March 2008, this number went up to over 3500. On an all India basis, 50 dealers, 150 SSPs, 267

dealers and 45 city work agents were added within this period.

The distribution network of HHML is both wide & deep rooted; it is based on both mutual trust

& relationship between HHML & its distributors and HHML’s philosophy of ensuring its

partners to grow with its own growth. Trust & loyalty of distribution network is very important

in maintaining the leadership position in this highly competitive industry. In fact, HHML’s

strength in Supply Chain & distribution network is one of the unique intangible resources that it

has; superior brand image & reliability perception of its brand is the outcome of these intangible

& tangible key assets

Service:

HHML has constituted one the best after-sales service network in the industry. Apart from

improving the quality of service and easy availability of spare parts, HHML has also focused on

cleanliness and other aesthetics of the service stations and added amenities such as air-

conditioned waiting area, internet browsing and coffee shops etc. to enhance the in-house

experience of the consumers at those “customer touch-points”.

To ensure that millions of customers in the rural areas are not left waiting for adequate service as

it is impossible for HHML to introduce service stations at every nook & corner of the country,

mobile service stations are regularly arranged with prior intimation to public about the route

that the mobile workshop would take when passing through that region, so that consumers can

come and get their two-wheelers serviced. All these activities are aimed to increase the customer

loyalty and thus retaining customers.

The value activities done by HHML in its value chain (both primary & support activities) are

given in Fig. IA1. The unique value activities of HHML that is at the heart of its competitive

advantages are shown in Fig. IA2.

Virtual Value Chain

All the activities that HHML is doing in its Physical Value Chain (PVC) are being

augmented multifold by its efforts in establishing and improving the Virtual

Value Chain (VVC -the flow of information across its value activities). For

example, HHML has implemented SAP ERP package for all necessary modules

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like production, materials, finance, marketing, assets, quality, sales and

distribution so that only single version of right information is available with

everybody at any time. It reduced duplication of efforts across many functional

areas.

2.3.PROFIT SENSUALLY:

Sales performance hero Honda reports leadership performance with 50% net profit in 2008-2009

Defies industry trend with turnover (net sales and other operating income) atrs.crore; Ebidta at

13.58 percent 3202

Aug'06 Aug'07 FY 06-07 FY 07-08

Total Sales 2,15,076 2,40,875 12,82,860 12,63,254

Highlights of Q2, FY'08-09

• Total turnover (Net sales & Other Operating income)Rs 3202 crores, growth of 35.6 per cent• Net profit after tax at Rs 306.30 crores, growth of 50 per cent

• EBIDTA margin for the quarter 13.58 per cent

• Total sales for Q2 stands at 9,72,095 units, growth of 28.5 per cent

• Total sales for H1 stands at 18,66,349, growth of 19.7 per cent

• Over 55 per cent share in domestic motorcycle market

• Launches first-of-its kind music video to celebrate 25 years of Hero Honda

New Delhi, October 21, 2008: Hero Honda Motors Ltd (HHML), the world's largest two-

wheeler company for seven consecutive years, today firmly reiterated its undisputed leadership

in the domestic two-wheeler market with impressive bottom line growth for the second quarter

(Q2) – July to September - of this financial year (FY) 2008-09.

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Even as the industry continued to face tough market conditions on account of uncertainty over

interest rates and overall credit squeeze, the company reported 50 per cent growth in profit after

tax (PAT) at Rs 306.30 crore for the second quarter. Hero Honda's profit after tax in the

Corresponding period last fiscal (July - Sept, 2007-08) stood at Rs 204.33 crore.

Total turnover (Net sales & Other Operating income) grew to Rs 3202 crore, a growth of 35.6

per cent over Rs 2361 crore recorded in the corresponding period last fiscal. The company has

recorded an EBIDTA margin of 13.58 per cent in the quarter. The EBIDTA margin in the

previous quarter (April - June '08) was 12.20 per cent.

The strong financial performance is in line with the company's better-than-industry top line

growth. After posting a growth 11.38 per cent in the first quarter, the company kicked off the

second quarter with a 39.8 per cent growth in sales in the month of July, and followed up with

26.8 per cent growth in August and 22.4 per cent in September. Hero Honda consistently keeps

growing its share in the domestic motorcycle market, and currently enjoys over 55 per cent

share.

Hero Honda's cumulative sales for the second quarter (Q2) this FY stands at 9,72,095 units - a

growth of 28.5 per cent over Q2 last FY (2007-08). The cumulative sales for the first six months

(H1) stands at 18, 66,339 units of two-wheelers compared to 15, 59,486 units sold in H1 in the

last FY – reflecting a consistent 19.7 per cent growth in cumulative sales.

1. HERO HONDA CLOSES CALENDAR YEAR 2007 WITH SALES OF OVER 33

LAKH BIKES

2. HERO HONDA CONSOLIDATES MARKET LEADERSHIP WITH IMPRESSIVE

GROWTH OF 15% IN MARCH’08

3. HERO HONDA CONTINUES GROWTH MOMENTUM WITH 9.5 PER CENT

INCREASE IN MAY SALES

4. HERO HONDA CONTINUES TO CONSOLIDATE MARKET LEADERSHIP

WITH 27 PER CENT GROWTH IN AUGUST SALES

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http://www.herohonda.com/invest_sales_performance.asp#113


















5. HERO HONDA NET PROFIT ZOOMS 31% TO Rs 275 CRORE IN Q3 (FY

2007-2008)

6. HERO HONDA PASSES ON EXCISE DUTY CUT BENEFIT TO CUSTOMERS

7. HERO HONDA POSTS RECORD 6 LAKH-PLUS UNITS IN RETAIL SALES IN

OCTOBER 2008

8. HERO HONDA’S POSITIVE PERFORMANCE CONTINUES IN NOV’08

9. HERO HONDA’S SEPTMEBER ’08 SALES JUMP 22 PER CENT

10.HERO HONDA’S STRONG SALES PERFORMANCE CONTINUES INTO 2008

11.REPORTS 13% GROWTH IN CUMULATIVE SALES IN APR-NOV’08

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Market Share:

Hero Honda Motors Ltd on 14- July- 2009 reported a forecast-beating 7.1 per cent rise in net

profit. Helped by falling commodity prices, a cut in excise duties and sales in rural areas.

Hero Honda's closest rival, Bajaj Auto Ltd, second week of July, 2009 reported a 23 per cent

drop in net profit for its fiscal third quarter as a lack of financing and high interest rates

crimped demand.

Hero Honda was not as affected, as 60 per cent of its revenues come from rural markets, where

purchase are less reliant on loan financing than in urban areas and where its 100 cc bikes are

popular,

SALES

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3. Key success factors:

1. Best-in-breed products and solutions

2. Global Scale

3. Achieving excellence in with ALL stakeholders

Diversified Businesses.

4. Relationship Management Achieving excellence in with ALL stakeholders

5. Efficient Asset Management

6. Maximizing Customer Value

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Corporate Parenting & Critical Success Factors: Hero Group

We have already stated that many of the group technical/strategic alliances and JVs are aimed at

increasing the vertical integration of the businesses. From the corporate parenting concepts also,

these initiatives are falling mostly in the Heartland zone (shown below), i.e., these related

diversifications are helped by accumulated competencies of the group as well as complementing

the core business as well. The following Parenting Fit Matrix shows how major Hero group

companies are placed

The unrelated diversifications into IT/ITES arena should fall in the Ballast zone. But none of the

business ventures are either in Alien Territory or in Value Trap category.

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4. LIMITATIONS

1. Due to lack of time I was not able to cover many customers.

2. As I reside in Delhi, so customers of Delhi were taken into account.

3. Answers given by the customers may be biased one.

4. Research work was confined to South Delhi.

5. Some time Co-operation from respondents was missing.

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5. Recommendations:

After the complete analysis of entire assignment we put forward a set of recommendations whichare a follows:

Since the client has targeted the right segments, but the reason for the low sales of Hero

Honda

Cbz is high price. Moreover the client has positioned the bike as “city ride made easy” fuel –

efficient bike as a result of which if comes in direct competition with.

TVS Victor and Bajaj Boxber. But HHML is overlooking one feature in bike. Which is its

low maintenance, and reliability (i.e. less chances of breakdown) which are 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.

In order to increase the market share, customers’ promotional activities should be encouraged

through advertisements to attract the male & female segment.

Hero Honda, if it starts functioning independently, has to innovate and develop their own

technology to support their growth aspirations.

The dissatisfied customers should be dealt with appropriately should be satisfied so that they

do not break the relationship with company.

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6. Conclusions:

1. Most of the Hero Honda Bikes are purchased by young generation 18 to 30 because they prefer stylish looks and rest of the models of Hero Honda are purchased more by daily

users who needs more average of bikes than looks.

2. Hero Honda is considered to be most fuel-efficient bike on Indian roads.

3. Service & Spare parts are available throughout India in local markets also.

4. While buying a motorcycle, economy is the main consideration in form of maintenance

cost, fuel efficiency.

5. Hero Honda started growing in rural market rapidly with its add campaign and promotion

strategies in rural market.

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7. BIBLIOGRAPHY

NEWS AND VIEWS FROM MARKETING DIVISION OF HERO HONDA.

AME BUSINESS MAGAZINE.

AUTO MAGAZINE.

BUSINESS INDIA

FINANCIAL EXPRESS

OVER DRIVE MAGAZINE.

WWW. INDIAINFOLINE.COM

WWW. HEROHONDA.COM

WWW.ECONOMICTIMES.COM

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