A STUDY ON CONSUMERS ATTITUDE, PREFERENCE AND

SATISFACTION TOWARDS MSK MOTORS, ERODE.

PROJECT REPORT

Submitted by

P.ELANGO

Register No: 732812631008

in partial fulfillment of the requirements of Anna University, Chennai

for the award of the degree

of

MASTER OF BUSINESS ADMINISTRATION

SURYA ENGINEERING COLLEGE

METTUKADAI

ERODE – 638 107

JUNE-2014

1

SURYA ENGINEERING COLLEGE

METTUKADAI, ERODE - 638 107

PROJECT REPORT

JUNE -2014

This is to certify that the project entitled

“A STUDY ON CONSUMERS ATTITUDE, PREFERENCE AND

SATISFACTION TOWARDS MSK MOTORS, ERODE”.

is a bonafide record of project work done by

P.ELANGO

Register No: 732812631008

of MBA Degree during the year 2012-14

_____________________ _____________________

Project Guide HOD

Submitted for the Project Viva-Voce examination held on

_____________________ _____________________

Internal Examiner External Examiner

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DECLARATION

I affirm that the project work entitled“A STUDY ON CONSUMERS

ATTITUDE, PREFERENCE AND SATISFACTION TOWARDS MSK

MOTORS, ERODE” being submitted in partial fulfillment of the

requirements of Anna University, Chennai for the award of MBA degree

is the original work carried out by me. It has not formed the part of any

other project work submitted for award of any degree or diploma, either

in this or any other University.

P.ELANGO

732812631008

I certify that the declaration made above by the candidate is true

Ms. R.GOMATHI, MBA.,M.Phil.,(Ph.D).,

Assistant Professor

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ABSTRACT

The study entitled, “A STUDY ON CONSUMERS ATTITUDE,

PREFERENCE AND SATISFACTION TOWARDS MSK MOTORS, ERODE”

was conducted to know about the consumer attitude of purchasing two wheelers. The

success of the company depends on knowing the consumer attitude, preference and

satisfaction level of the HERO vehicle.

The major objective of the project is to identify the consumer attitude,

preference and satisfaction level of the HERO vehicle. The study also aimed at

finding the factor influencing customer preference. In order to study the objective,

primary data have been collected through questionnaire and secondary data through

company documents and books for the study. The sample size for the study was 300

which were collected according to the convenience of the researcher. Five different

charts are used in the study.

The research design used in descriptive research. The sampling technique used

is simple random sampling method. The data is analyzed using the percentage

analysis, factor analysis, correlation analysis and ranking. The findings, suggestions

and conclusion are given according to study conducted.

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ACKNOWLEDGEMENT

First I thank and praise the God and parents for the countless blessings that they

showered upon me to complete this project work.

I take this opportunity to express my sincere thanks to

Thiru K.KALAISELVAN, Secretary and Correspondent, Surya Engineering College, Erode,

for providing necessary facilities to complete this project.

I would like to express my sincere thanks to Dr.S.VIJAYAN, Principal, Surya

Engineering College, Erode for having permitted me to undergo this project.

I extend my heartful thanks to Dr. G.R. VASANTHA KUMAR, M.B.A., M.Phil.,

Ph.D.,HOD, Department of Management Studies, Surya Engineering College, Erode for his

valuable ideas and advice for the successful completion of this project.

I would like to express my sincere thanks to my beloved guide

Ms. R.GOMATHI, MBA.,M.Phil., (Ph.D).,Assistant Professor,Department of

Management Studies, Surya Engineering College, Erode for her valuable guidance and

suggestions.

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TABLES OF CONTENTS

CHAPTER NO PARTICULAR PAGE NO

ABSTRACT v

LIST OF TABLES viii

LIST OF CHARTS ix

I INTRODUCTION OF STUDY 1 – 30

1.1 INTRODUCTION ABOUT PROJECT 1

1.2INDUSTRY PROFILE 9

1.3 COMPANY PROFILE 22

1.4 STATEMENT OF PROBLEM 27

1.5 OBJECTIVES OF THE STUDY 28

1.6 SCOPE OF THE STUDY 29

1.7 LIMITATIONS OF THE STUDY 30

II REVIEW OF LITERATURE 31

III RESEARCH METHODOLOGY 37

IV ANALYSIS AND INTERPRETATION 40–63

4.1 SIMPLE PERCENTAGE ANALYSIS 40

4.2 FACTOR ANALYSIS 57

4.3 CORRELATION 60

4.4 RANKING 62

VFINDING, SUGGESTIONS AND

CONCLUSION64 – 67

5.1 FINDINGS 64

5.2 SUGGESTION 66

5.3 CONCLUSION 67

APPENDIX 68

BIBLIOGRAPHY 72

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LIST OF TABLES

TABLE

NOTABLE NAME PAGE NO

1 Gender of the respondents 40

2 Age group of the respondents 41

3 Respondents educational level 42

4 Respondents marital status 43

5 Profession of the respondents 44

6 Income of the respondents 45

7 Area of the respondents 46

8 Family size of the respondents 47

9 Source information about hero 48

10 Consideration for purchasing other vehicle 50

11 Mileage of hero bike 51

12 Present maintance cost of the bike 52

13 Frequency of bike service 53

14 Maintanance period of the vehicle 54

15 Resale value of the hero bike 55

16 Recommendation by the respondents 56

17 KMO and Bartlett's Test 57

18 Total Variance Explained 58

19 Rotated Component Matrix 59

20 Correlation analysis 60

21 Features of Hero products 62

22 Features of MSK motors, erode 63

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LIST OF CHARTS

TABLE

NOTABLE NAME PAGE NO

1 Gender of the respondents 40

2 Age group of the respondents 41

3 Respondents educational level 42

4 Respondents marital status 43

5 Profession of the respondents 44

6 Income of the respondents 45

7 Area of the respondents 46

8 Family size of the respondents 47

9 Source information about hero 49

10 Consideration for purchasing other vehicle 50

11 Mileage of hero bike 51

12 Present maintance cost of the bike 52

13 Frequency of bike service 53

14 Maintanance period of the vehicle 54

15 Resale value of the hero bike 55

16 Recommendation by the respondents 56

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CHAPTER-I

1.1 INTRODUCTION ABOUT THE STUDY

CONSUMER ATTITUDE

An individual with a positive attitude towards a product/service offering is

more likely to make a purchase; this makes the study of consumer attitudes highly

important for a marketer. An attitude may be defined as a feeling of favourableness or

unfavourableness that an individual has towards an object (be it a person, thing or

situation). It is a learned predisposition to exhibit and act based on evaluation

resulting in a feeling of like or dislike towards and object. In terms of consumer

behaviour, consumer attitudes may be defined as an inner feeling of favourableness or

unfavourableness towards a product or service offering and the 4Ps. As Schiffman has

defined, “Attitudes are an expression of inner feelings that reflect whether a person is

favourably or unfavourably predisposed to some "object" (e.g., a brand, a service, or a

retail establishment),” and “Attitude formation, in turn, is the process by which

individuals form feelings or opinions toward other people, products, ideas, activities,

and other objects in their environment”.

In terms of consumer behaviour, an attitude is reflective of a consistent

favourable or unfavourable feeling that a consumer or a prospect forms as a result of

an evaluation about an object; the object being, a product/service offering, brand,

price, store and dealer, salesperson, advertisement, promotion etc.

Attitudes are a learned predisposition. Attitudes are learned; they are formed

as a result of i) self experiences with the product/service offering and the mix; ii)

interaction with other people, be it family, friends, peers and colleagues; iii)

information obtained from the marketer through promotion particularly

advertisements as well as dealers and salespeople. Attitude formation as a process is

impacted by needs and motivation, perception as well as learning.

Apart form helping a consumer make evaluations about a product/service

offering ending up in purchase decisions (to buy/not to buy), attitudes play other

functions as well. They perform four basic functions, viz., utilitarian function, ego

defensive function, value expressive function, and knowledge function. The four

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functions are not mutually exclusive. In fact, they are related to each other and

consumer attitudes are illustrative of a combination of functions

a) Utilitarian function: Consumers form positive attitudes towards product/service

offerings because they provide a utility, in other words, they provide a rewarding

experience through the benefits that they provide. Consumers learn to relate a reward

with the use of the offering. On the other hand if they do not offer a rewarding

experience, consumers form a negative attitude towards such an offering.

b) Ego defensive function: Consumers form attitudes as they help defend their ego,

self-image and self-concept. If a consumer is high on ethnocentrism, and patronizes

Indian products, he would have a positive attitude towards Indian brands. He would

speak for and promote such brands even if he knows that a foreign made product

provides better value. Attitudes are formed to protect the ego.

c) Value expressive function: Positive attitudes are formed when a product or service

expresses a person’s values and lifestyle, personality and self image, and self concept.

This is because attitudes provide people with a basis for expressing their values. In

cases where there is a mismatch between the product image and a consumer’s self-

image, a negative attitude is developed. Attitudes are a reflection of value.

d) Knowledge function: Attitudes are formed when consumers want to reaffirm their

knowledge base, to finally help them simplify purchase decision making. If a

consumer thinks positive about a brand, it helps reaffirm his opinion, and makes

decision making simpler and faster. Attitudes help in decision making.

The attitude-toward-object model states that a consumer’s attitudes towards a

product/service offering or a brand, is a function of the presence or absence of certain

attributes, and the corresponding evaluation. Attitude is function of evaluation of

product -specific beliefs and evaluations. In other words, while evaluating an offering,

the consumer’s attitude would be based on:

- the presence of attributes, and the aggregation of a consumer’s belief about

each of these, and

- the overall evaluation of the relevance of each of these attributes in providing

the necessary gains and benefits.

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Thus, consumers would tend to have favourable attitudes toward such

offerings and/or brands that they have sufficient amount of attributes that are deemed

important and evaluated as positive. On the other hand, they would have unfavourable

attitudes towards offerings and/or brands which do not have the desired attributes or

have many negative attributes.

Nature of consumer attitudes:

Consumer attitudes are reflective of a consistent favourable or unfavourable

feeling that a consumer or a prospect forms as a result of an evaluation about an

object; the object being, a product/service offering, brand, price, store and dealer,

salesperson, advertisement, promotion etc. The nature of consumer attitudes is

discussed as follows:

1. Attitudes are directed towards an object (product/service offering, price,

store, dealer, promotion, advertisement etc.) about which a consumer has feelings and

beliefs.

2. Attitudes have a direction; they could be positive or negative. A consumer

could possess feelings of like/dislike, favourableness and unfavourableness towards a

product or service as well as the mix. They vary in degrees and intensity, and can fall

anywhere along a continuum from very favourable to very unfavourable.

3. Attitudes are consistent in nature, particularly with respect to the third

component, i.e. behaviour. Consumers are consistent with respect to their behaviour.

However, they are not entirely permanent and may change if the cognitive or the

component is changed. This implies that if the consumer witnesses new experience or

is exposed to new information about product/service offering and the mix (cognition),

and) feelings are changed from dislike to like (affect), attitudes towards the offering

and the mix can undergo change. In other words, while attitudes are stable and do not

change frequently, they can be changed if something is done to change them.

4. Attitudes are a learned predisposition. Attitudes are learned; they are

formed as a result of i) self experiences with the product/service offering and the mix;

ii) interaction with other people, be it family, friends, peers and colleagues; iii)

information obtained from the marketer through promotion particularly

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advertisements as well as dealers and salespeople. Attitude formation as a process is

impacted by needs and motivation, perception as well as learning.

5. Attitudes cannot be observed directly. While attitudes are comprised of

three components, behaviour is just one of them. It is only this component that can be

seen; the cognitive and affect components cannot be seen. Thus it is said that attitudes

cannot be seen; they can only be inferred from the manner in which an individual

behaves.

6. While attitudes can be inferred from our behaviour, it is not synonymous to

behaviour. It has two other components, and reflects a learned predisposition to act

favourable or unfavourably towards a product and service offering and the mix.

CONSUMER PREFERENCES

The underlying foundation of demand, therefore, is a model of how consumers

behave. The individual consumer has a set of preferences and values whose

determinations are outside the realm of economics. They are no doubt dependent upon

culture, education, and individual tastes, among a plethora of other factors. The

measure of these values in this model for a particular good is in terms of the real

opportunity cost to the consumer who purchases and consumes the good. If an

individual purchases a particular good, then the opportunity cost of that purchase is

the forgone goods the consumer could have bought instead.

We develop a model in which we map or graphically derive consumer

preferences. These are measured in terms of the level of satisfaction the consumer

obtains from consuming various combinations or bundles of goods. The consumer’s

objective is to choose the bundle of goods which provides the greatest level of

satisfaction as they the consumer define it. But consumers are very much constrained

in their choices. These constraints are defined by the consumer’s income, and the

prices the consumer pays for the goods.

We will formally present the model of consumer choice. As we go along, we

will establish a vocabulary in order to explain the model. Development of the model

will be in three stages. After a formal statement of the consumer’s objectives, we will

map the consumer’s preferences. Secondly, we present the consumer’s budget

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constraint; and lastly, combine the two in order to examine the consumer’s choices of

goods.

The budget line plays two important roles. The first is determined by the level

of income. The more income the consumer has to spend the greater number of the

commodity bundles that are affordable. An increase in income would be portrayed as

a parallel shift outwards of the budget line. It is a parallel shift because we are holding

the prices of goods X and Y constant, therefore there would be no change in the line’s

slope.

The second role for the budget line is to act as a price line. A price line

demonstrates the relative price of two goods.A relative priceis the price of one good

in terms of another.

The consumer’s objective is to allocate income between goods X and Y so that

they achieve the greatest amount of utility, i.e., to reach the highest indifference curve

possible within their budget constraint. They must choose that commodity bundle on

their budget line which has the highest level of utility. Utility levels, as we have seen,

are measured by indifference curves; therefore the consumer tries to reach the highest

feasible indifference curve.

Because the consumer’s wants are unlimited or, in any event, exceed his or her

ability to satisfy them all, it is important that the consumer spend income so as to

maximize satisfaction. Thus, a model is provided to illustrate and predict how a

rational consumer maximizes satisfaction, given his or her tastes (indifference curves)

and the constraints that the consumer faces (the budget line). The “At the Frontier”

section presents a different way to examine consumer tastes and derive a consumer’s

indifference curves.

Preference can be described as “how we see the world around us “. Two

individuals may be subject to the same stimuli under apparently the same conditions,

but how they recognize them select them, organize then interpret them is an highly

individual process based on each person’s own needs values and expectations the

influence that each of three variables has an perceptual process, and its relevance to

the marketing will be explored in some detail.

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Preference can be defines as a process by which individual selects, organize

and interprets stimuli into a meaningful and coherent picture of the world. A stimulus

is any of input to any of the sense.

CUSTOMER SATISFACTION

Whether the buyer is satisfied after a purchase depends on the offer’s

performance in relationship to the buyer’s expectations and whether the buyer

interprets any deviations between the two.7 In general, satisfactionis a person’s

feelings of pleasure or disappointment that result from comparing a product’s

perceived performance (or outcome) to expectations.

If the company increases customer satisfaction by lowering its price or increasing its

services, the result may be lower profits. The company might be able to increase its

profitability by means other than increased satisfaction (for example, by improving

manufacturing processes). Also, the company has many stakeholders, including

employees, dealers, suppliers, and stockholders. Spending more to increase customer

satisfaction might divert funds from increasing the satisfaction of other “partners.”

Ultimately, the company must try to deliver a high level of customer satisfaction

subject to delivering acceptable levels of satisfaction to the other stakeholders, given

its total resources.

Satisfaction is level of persons felt state resulting from comparing a products

performance in relation to the person’s expectation.

Thus the satisfaction level is function of the difference between perfervid

performance and expectation. A customer could experience one of the three board

levels of satisfactions, if the performance falls short of expectation the customer is

dissatisfied, if the performance matches, the customer is satisfied, if the performance

exceeds expectations, the customer is highly satisfied, pleased or delighted.

Expectations are made on the basis of the buyers past experience statements

by friends and associates and marketer and competitor information and promises. If

marketer raise expectation too high, the buyer is likely to be sis appointed. Some of

the most successful companies are arising expectations and delivering performances

to matches. These companies are aiming for total customer satisfaction.

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FACTORS INFLUENCING THE CONSUMERS PREFERENCE

The various factors affecting the consumer’s preference are as follows:-

Consumer preference and consumer behaviour are similar, attributed in broad

prospective. Consumer behaviour or buyers attitude is a process by which an

individual decides what, when, how, whether or not, from whom to purchase goods

and the service. The consumer's decisions are not hollow but influenced by cultural,

social, personal and psychological factors substantially influence the purchases of the

buyer. Most of the factors are “NOT CONTROLLABLE "by the marketers which are

also to be taken into account.

CULTURAL FACTORS

Cultural factors such as buyer's culture, sub-culture and social class

identification bear in depth and wide influences of consumer preference.

CULTURE

Culture is the most basic determinant of a person. His wants and behaviour are

governed by instincts human trait is intellectual in behaviour. Cultural is a most

fundamental determinant person’s wants and behaviour, the growing child acquires a

set of values, perceptions, preferences and behaviour, through his family and key

institutions.

SOCIAL FACTORS

A consumer's preference is also influenced by social factors, such as the

consumer's reference groups, family and social roles and status.

OCCUPATION

A person's consumption pattern is also influence by his or her occupation. A

blue colour worker's clothes, work shoes, powder, lunch boxes, bowling recreation are

pertinent to his group. A company president affords expensive blue stage suits air

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travel club membership and vehicle hence marketers try to identify the occupational

groups.

ECONOMIC CIRCUMSTANCES

A person's economic circumstances will do affect a great extent in his product

choice. People economic circumstances consist of their spend able income, saving,

borrowing power and attitudes towards spending versus saving.

LIFE STYLE

People coming from the same sub-culture, social classes and even occupation

may lead quiet different life different. Life style portrays the whole person interaction

with his or her environment. Life style reflects something beyond the person's social

class on the one hand and personality on the other. Life style attempts to bring out

one's way of living based on a whole person's pattern of acting in the world.

PERSONALITY AND SELF-CONCEPT

Each person has a distinct that will influence his on her buying preference. A

person's personality is usually described in terms of such trait as 'self-confidence,

dominance, autonomy, deference, sociability defensiveness and adoptability.

INCOME

Income is a vital factor that affects buying preference off consumer to a great

extent. It is the per-capital income is high, and then the demand of consumer goods

will be high, if it is less the demand will also be less.

PSYCHOLOGICAL FACTORS

A person's buying choice is also influenced from major psychological factors

like motivation, perception, learning, beliefs and attitudes. It is useful for themarketer

who can identify what generic level need this brand is capable fulfilling and

accordingly position his brand up with relevant marketing inputs. Brands such as food

and clothes are bought to fulfil psychological needs.

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INDUSTRY: PRESENT AND FUTURE TRENDS

Automobile is one of the largest industries in global market. Being the leader

in product and process technologies in the manufacturing sector, it has been

recognized as one of the drivers of economic growth. During the last decade, well-

directed efforts have been made to provide a new look to the automobile policy for

realizing the sector's full potential for the economy. Steps like abolition of licensing,

removal of quantitative restrictions and initiatives to bring the policy framework

inconsonance with WTO requirements have set the industry in a progressive

track .Removal of the restrictive environment has helped restructuring, and enabled

industry to absorb new technologies, aligning itself with the global development and

also to realize its potential in the country.

The liberalization policies have led to continuous increase in competition

which has ultimately resulted in modernization in line with the global standards as

well as in substantial cut in prices. Aggressive marketing by the auto finance

companies have also played a significant role in boosting automobile demand,

Especially from the population in the middle income group.

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1.2 INDUSTRY PROFILE

INTRODUCTION ABOUT THE TWO-WHEELER INDUSTRY

India is the second largest manufacturer and producer of two-wheelers in the

world. It stands next only to Japan and China in terms of the number of two-wheelers

produced and domestic sales respectively. This distinction was achieved due to

variety of reasons like restrictive policy followed by the Government of India towards

the passenger car industry, rising demand for personal transport, inefficiency in the

public transportation system etc. The Indian two-wheeler industry made a small

beginning in the early 50s when Automobile Products of India (API) started

manufacturing scooters in the country. Until 1958, API and Enfield were the sole

producers. Under the regulated regime, foreign companies were not allowed to

operate in India.

The two wheeler industry has been going steadily over the years all over the

world. India is not an exception for that. Today India is the second largest

manufactures of two wheelers in the world. It stands next only to Japan and China in

terms of number of two wheelers produced and sold. Until 1990 geared scooters

dominated the two wheelers market so much so that their sales equalled the combined

sales of Motor cycles and Mopeds. Today the customer preferences have shifted from

geared scooters to motorcycles and also to an extent to the premium end scooters.

With rising fuel cost and more recently stringent emission norms imposed by the

government, there is a distinct consumer preference for high efficiency.

Earlier the customer used to buy a two wheeler based on its reliability and

price comfort and utility were the two basic traits he needed in the two wheelers. Now

with the opening up of the economy and availability of new design and technology the

consumer is increasingly according greater priority to power and style.

An interesting trend is the shift in the reference towards Japanese designed

two wheelers as compared to the Italian designed machines. In the last one year the

motorcycle segment has consistently kept its growth chart intact and grown by 30%.

Its share is increasing year by year. Today motorcycles command 58% of total two

wheeler industries.

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Hero and Honda alone command nearly half of the market shares that are

48%. A key trend in the motorcycles segment has been the single-minded preference

for 4 stroke engines in motor cycles.

The motorcycles segment was no different, with only three manufacturers via

Enfield, Ideal Jawa and Escorts. The two-wheeler market was opened to foreign

competition in the mid-80s. And the then market leaders - Escorts and Enfield - were

caught unaware by the onslaught of the 100cc bikes of the four Indo-Japanese joint

ventures The industry had a smooth ride in the 50s, 60s and 70s when the Government

prohibited new entries and strictly controlled capacity expansion.

The industry saw a sudden growth in the 80s. The industry witnessed a steady

growth of 14% leading to a peak volume of 1.9mn vehicles in 1990. In 1990, the

entire automobile industry saw a drastic fall in demand. This resulted in a decline of

15% in 1991 and 8% in 1992, resulting in a production loss of 0.4mn vehicles. The

total number of registered two-wheelers and three-wheelers on road in India, as on

March 31, 1998 was 27.9mn and 1.7mn respectively.

The two-wheeler population has almost doubled in 1996 from a base of

12.6mn in 1990. The last few years have seen a fundamental shift in preference from

scooters and mopeds towards motorcycles. Motorcycle sales have grown at a CAGR

of 27% for the last 6 years Vs Two Wheelers, which have grown at a CAGR of 11%

over the same period. In 02-03, motorcycle sales have grown at 30% vs. 17% for two-

wheelers. The faster growth rate of motorcycles has seen its share doubling from 38%

in 97-98 to 76% in 02-03. Henceforth we do not expect motorcycles to grow at a rapid

rate. However the growth rate for motorcycles in 03-04 is expected to be faster than

overall 2-wheeler growth and we expect it to be around 12-15%.

In 1999 the share of scooter was more but from the mid of 1999 – 2000 the

whole scenario is changed. It started out, as a Joint Venture between Hero Group, the

world's largest bicycle manufacturers. Driven by the trust of over 5 million customers,

the Hero Honda product range today commands a market share of 48% making it a

veritable giant in the industry. Hero Honda is currently the world’s largest motorcycle

manufacturer thanks to its fuel efficient, high quality products made in collaboration

with Honda motorcycles, Japan. Hero, a name synonymous with two wheelers in

India, began its journey around four decades ago. Starting as a manufacturer of

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bicycle components, Hero has today grown into a multi-unit, multi-product,

geographically diversified group of companies. 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.

The Hero Group began with a simple philosophy: to provide excellent

transportation to the common man, at a price he could easily afford. It is this spirit,

which drives Hero even today; the dream of providing total satisfaction in all its

spheres of activity. To consumers, in excellent products at an affordable price; to

employees, in a fine quality of life and to business associates, in a total sense of

belonging. A thorough understanding of fast-changing consumer behaviour, new

market segments and product opportunities, and a marketing mix sensitive to

changing customer needs, form the core of Hero's marketing strategy and philosophy.

Keeping the wheels of progress turning are the individual companies of the

Hero Group. Each an independent profit centres. Each a success story in its own right.

The two wheeler division of the Hero Group has already networked more than 3,500

dealer outlets, each with its complement of trained mechanics and workers.

Established in 1945, it was incorporated as a trading company. From 1948 till 1959, it

imported scooters and three wheelers from Italy and sold them in India.

The company has a wide array of models both in the two-stroke and four-

stroke configurations. However, with the implementation of the latest emission

norms, it is slowly moving away from two-stroke vehicles and converting them to

four-stroke ones. The company is all set to increase its margins to double – digits

through concerted cost cutting, value engineering, gains from ‘ Total Productive

Maintenance ‘ (TPM) and VRS. In the last four to five years, the two-wheeler market

has witnessed a marked shift towards motorcycles at the expense of scooters.

In the rural areas, consumers have come to prefer sturdier bikes to withstand

the bad road conditions. In the process the share of motorcycle segment has grown

from 48% to 58%, the share of scooters declined Drastically from 33% to 25%, while

that of mopeds declined by 2% from 19% to 17% during the year 2000-01.The Euro

emission norms effective from April 2000 led to the existing players in the two-

stroke segment to install catalytic converters. Nevertheless, in the past five years the

company recognized the important role of motorcycles in its portfolio.

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The scooter market is predominantly located in the Northern and Eastern

India and the rationalization of sales taxes to a uniform rate of 12% pushed the price

of scooters by 6-8% without offering any perceived value advantage to the customer.

The company posted total 2-wheeler sales of Rs1.05 million in 2000-01 as against

Rs1.24 million in 1999-00.

The motorcycle sales contributed to almost 50% of the total sales volumes

accompanied by the decline in geared scooter sales, which contributed, to only 33%

of sales volumes. The company has been introducing models in the middle end Rs.36,

000 – Rs. 48,000 and high end segments viz; Rs. 48,000 and above but has found

difficult to market such models in competition to Hero Honda models in the similar

price category. However BAL is on its way to recapture the highly differentiated

product market by becoming a flexible and market – driven supplier of various

models of two and three wheelers at specific price – points. BAL has performed fairly

in the current fiscal 2001-02 with the Net Sales going up by 3.06% to Rs19720

million HY ended September 2001 from Rs19133.3 mn in the corresponding period

previous year.

Evolution of two-wheeler industry in India

Two-wheeler segment is one of the most important components of the

automobile sector that has undergone significant changes due to shift in policy

environment. The two wheeler industry has been in existence in the country since

1955. It consists of three segments viz. scooters, motorcycles and mopeds. According

to the figures published by SIAM, the share of two-wheelers in automobile sector in

terms of units sold was about 80 per cent during 2003 ¬04.

This high figure itself is suggestive of the importance of the sector In the

initial years, entry of firms, capacity expansion, choice of products including capacity

mix and technology, all critical areas of functioning of an industry, were effectively

controlled by the State machinery. The lapses in the system had invited fresh policy

options that came into being in late sixties. Amongst these policies Monopolies and

Restrictive Trade Practices (MRTP) and Foreign Exchange Regulation Act (FERA)

were aimed at regulating monopoly and foreign investment respectively.

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This controlling mechanism over the industry resulted in: (a) several firms

operating below minimum scale of efficiency; (b) under-utilization of capacity; and

(c) usage of out-dated technology. Recognition of the damaging effects of licensing

and fettering policies led to initiation of reforms, which ultimately took a more

prominent shape with the introduction of the New Economic Policy (NEP) in

1985.However, the major set of reforms was launched in the year 1991 in response to

the major macroeconomic crisis faced by the economy. The industrial policies shifted

from a regime of regulation and tight control to a more liberalized and competitive

era.

Two major results of policy changes during these years in two-wheeler

industry were that the, weaker players died out giving way to the new entrants and

superior products and a sizeable increase in number of brands entered the market that

compelled the firms to compete on the basis of product attributes. Finally, the two

wheeler industry in the country has been able to witness a proliferation of brands with

introduction of new technology as well as increase in number of players. However,

with various policy measures undertaken in order to increase the competition, though

the degree of concentration has been lessened over time, deregulation of the industry

has not really resulted in higher level of competition.

Key players in the two-wheeler industry

After facing its worst recession during the early 1990s, the two-wheeler

industry bounced back with a 25% increase in volume sales in February 1995. The

scooters are considered as family vehicles. There are many two-wheeler

manufacturers in India. Major players in the 2-wheeler industry are Hero MotoCorp

Ltd (HMCL), Bajaj Auto Ltd (Bajaj Auto) and TVS Motor Company Ltd (TVS). The

other key players in the two-wheeler industry are Kinetic Motor Company Ltd

(KMCL), Kinetic Engineering Ltd (KEL), LML Ltd (LML), Yamaha Motors India

Ltd (Yamaha), Majestic Auto Ltd (Majestic Auto), Royal Enfield Ltd (REL) and

Honda Motorcycle & Scooter India (P) Ltd (HMSI).

22

Overview

The Indian two-wheeler (2W) industry has shown a strong volume growth

over the last two-years, having grown by 25% in 2009-10 and 27% in 2010-111 to

reach 13.3 million units. This strong double-digit growth has been driven by multiple

factors. One reason, of course, is statistical as this period of high double-digit growth

has showed up after a rather sedate previous two years, when the 2W industry

volumes had shrunk by 5% in 2007-08 and had grown by a mere 5% in 2008-09.

In addition to the contribution of pent-up demand, the 2W industry growth

over the last two years has been supported strongly by various underlying factors

including India’s rising per capita GDP, increasing rural demand, growing

urbanization, swelling replacement demand, increasing proportion of cash sales and

the less measurable metric of improved consumer sentiment.

Going forward, ICRA expects the 2W industry to report a volume CAGR of

10-12% over the next five years to reach a size of 21-23 million units by 2015-16 as it

views the fundamental growth drivers - comprising of expected steady GDP growth,

moderate 2W penetration levels, favourable demographic profile, under developed

public transport system and utility quotient of a 2W - to be intact. Additionally, the

entry of new players in the industry, multitude of new model/ variant launches,

growing distribution reach, cheaper ownership costs on a relative basis are expected

to be some of the other prime movers for industry growth over the medium term. In

ICRA’s view, while the trend in rising commodity prices, hardening interest rates and

increasing fuel costs may lead to some moderation in industry growth over the short

term, the growth over the medium to long term is expected to remain in double digits.

INTRODUCTION ABOUT THE HERO INDUSTRY

Hero MotoCorp Limited, formerly Hero Honda Motors Limited is an India-

based company engaged in the manufacture of motorcycles. The Company is engaged

in manufacturing of two wheelers and its parts and ancillary services. The Company’s

bikes are manufactured across three manufacturing facilities. Two of these are based

at Gurgaon and Dharuhera, which are located in the state of Haryana in northern

India. The third manufacturing plant is based at Haridwar, in the hill state of

23

Uttrakhand. The Company offers a range of bikes which include CD Dawn, CD

Deluxe, Splendor Plus, Splendor NXG, super splendor and Passion Pro.

In April 2013, Hero Motocorp Ltd incorporated an off-shore investment

subsidiary in the Netherlands. In July 2013, Hero Motocorp Ltd announced has

incorporated a wholly owned subsidiary in the United States by the name of HMCL

(NA), Inc. In December 2013, Hero Motocorp Ltd formed a joint venture with

Magneti Marelli to develop and manufacture new fueling systems.

History

The Beginning

“Hero” is the brand name used by the Munjal brothers for their flagship

company, Hero Cycles Ltd. A joint venture between the Hero Group and Honda

Motor Company was established in 1984 as the Hero Honda Motors Limited

at Dharuhera, India. Munjal family and Honda group both owned 26% stake in the

Company.

During the 1980s, the company introduced motorcycles that were popular in

India for their fuel economy and low cost. A popular advertising campaign based on

the slogan 'Fill it – Shut it – Forget it' that emphasised the motorcycle's fuel efficiency

helped the company grow at a double-digit pace since inception. In 2001, the

company became the largest two-wheeler manufacturing company in India and

globally. It maintains global industry leadership till date. The technology in the bikes

of Hero Motocorp (earlier Hero Honda) for almost 26 years (1984–2010) has come

from the Japanese counterpart Honda.

Further developments and milestones

1956—Formation of Hero Cycles in Ludhiana(majestic auto limited)

1975—Hero Cycles becomes largest bicycle manufacturer in India.

1983—Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed

Shareholders Agreement signed

1984—Hero Honda Motors Ltd. incorporated

1985—Hero Honda motorcycle CD 100 launched.

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1989—Hero Honda motorcycle Sleek launched.

1991—Hero Honda motorcycle CD 100 SS launched.

1994 – Hero Honda motorcycle Splendor launched.

1997—Hero Honda motorcycle Street launched.

1999 – Hero Honda motorcycle CBZ launched.

2001 – Hero Honda motorcycle Passion and Hero Honda Joy launched.

2002—Hero Honda motorcycle Dawn and Hero Honda motorcycle Ambition

launched.

2003—Hero Honda motorcycle CD Dawn, Hero Honda motorcycle Splendor

plus, Hero Honda motorcycle Passion Plus and Hero Honda motorcycle

Karizma launched.

2004—Hero Honda motorcycle Ambition 135 and Hero Honda motorcycle CBZ*

launched.

2005—Hero Motocorp SuperSplendor, Hero Honda motorcycle CD Deluxe, Hero

Honda motorcycle Glamour, Hero Honda motorcycle Achiever and Hero Honda

Scooter Pleasure.

2007—New Models of Hero Honda motorcycle Splendor NXG, New Models of

Hero Honda motorcycle CD Deluxe, New Models of Hero Honda motorcycle

Passion Plus and Hero Honda motorcycle Hunk launched.

2008—New Models of Hero Honda motorcycles Pleasure, CBZ Xtreme,

Glamour, Glamour Fi and Hero Honda motorcycle Passion Pro launched.

2009—New Models of Hero Honda motorcycle Karizma:Karizma – ZMR and

limited edition of Hero Honda motorcycle Hunk launched

2010—New Models of Hero Honda motorcycle Splendor Pro and New Hero

Honda motorcycle Hunk and New Hero Honda Motorcycle Super Splendor

launched.

2011—New Models of Hero Honda motorcycles Glamour, Glamour FI, CBZ

Xtreme, Karizma launched. New licensing arrangement signed between Hero and

Honda. In August Hero and Honda parted company, thus forming Hero MotoCorp

and Honda moving out of the Hero Honda joint venture. In November, Hero

launched its first ever Off Road Bike Named Hero "Impulse".

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2012-New Models of Hero Motocorp Maestro the Musculine scooter and Ignitor

the young generation bike are launched.

2013-Hero MotoCorp unveiled line-up of 15 updated products including Karizma

R, ZMR, Xtreme, Pleasure, Splendor Pro, Splendor iSmart, HF Deluxe

ECO, Hero Motocorp SuperSplendor, Passion Pro and Xpro, Glamour and

Glamour FI etc. It also introduced three new technologies- Engine Immobilizer in

new Xtreme, Integrated Braking System (IBS) in new Pleasure and i3S (Idle Stop

and Start System) in new Splendor iSmart.

Since the beginning, the Hero Group relied on their Japanese partner Honda for

the technology in their bikes. So there are concerns that the Hero Group might not

be able to sustain the performance of the joint venture alone.

Formation of Hero MotoCorp

The name of the company was changed from Hero Honda Motors Limited to

Hero MotoCorp Limited on July 29, 2011. The new brand identity and logo of

Hero MotoCorp were developed by the British firm Wolff Olins. The logo was

revealed on 9 August 2011 in London, to coincide with the third test

match between England and India.

Hero MotoCorp can now export to Latin America, Africa and West Asia. Hero

is free to use any vendor for its components instead of just Honda-approved

vendors.

49% stake in Erik Buell Racing

In July 2013, HMC acquired 49.2% shareholding in Erik Buell Racing,

a motorcycle sport company which produces street and racing motorcycles

based in East Troy, Wisconsin, USA. It paid approx. USD 25 million for this

stake.

Operation:

Hero MotoCorp has three manufacturing facilities based

at Dharuhera and Gurgaon in Haryana and at Haridwar inUttarakhand. These

plants together have a production capacity of 6.9 million 2-wheelers per

year. Hero MotoCorp has a sales and service network with over 3,000

26

dealerships and service points across India. It has a customer loyalty program

since 2000, called the Hero Honda Passport Program.

It is reported that Hero MotoCorp has five joint ventures or associate

companies, Munjal Showa, AG Industries, Sunbeam Auto, Rockman

Industries and Satyam Auto Components, that supply a majority of its

components.

The company has a stated aim of achieving revenues of $10 billion and

volumes of 10 million two-wheelers by 2016–17. This in conjunction with

new countries where they can now market their two-wheelers following the

disengagement from Honda. Hero MotoCorp hopes to achieve 10 per cent of

their revenues from international markets, and they expected to launch sales

in Nigeria by end-2011 or early-2012. In addition, to cope with the new

demand over the coming half decade, the company is coming up with their

fourth factory in Neemrana in Rajasthan while their fifth factory is planned to

be set up at Halol in Gujarat.

Motorcycles

It has 17 models of motorcycles across the 100 cc, 125 cc, 150 cc, 225 cc categories.

CBZ, CBZ Star, CBZ Xtreme, Hero Xtreme

CD 100, CD 100 SS, Hero Honda Joy, CD Dawn, CD Deluxe, CD Deluxe (Self

Start)

HF Dawn, HF Deluxe

Glamour, Glamour F.I.

Hunk

Karizma, Karizma R, Karizma ZMR FI

Passion, Passion Plus, Passion Pro, Passion XPro

Splendor, Splendor+, Splendor+ (Limited Edition), Hero

MotocorpSuperSplendor, Splendor NXG, Splendor PRO, SplendoriSmart

Hero Impulse launched in 2011 after the separation of Hero and Honda. Its India's

first off-road and on road Bike.

Hero Ignitor launched in 2012

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Scooters

It has 2 models in scooters:

Pleasure

Maestro

In 2013, Hero MotoCorp registered best ever calendar year performance of

more than 6.1 million unit sales. By selling 6.25 million units in the month of

October, it became the first-ever manufacturer to cross landmark 6 lakh unit sales in a

month. In the last quarter of the year or say in the festive season, the company sold

more than 1.6 million units, while in non festive time in April–May 2013, it managed

to sell out quite good numbers of units- 1.1 million.

Hero MotoCorp Limited is the World's single largest two-wheeler motorcycle

company. The company is engaged in the manufacture of two wheelers motorcycles

and its parts. The company has three manufacturing facilities namely Dharuhera,

Gurgaon at Haryana and Haridwar at Uttarakhand. The company is based in New

Delhi, India. The company offers a range of bikes starting from CD Dawn, CD

Deluxe, Splendor Plus, Splendor NXG, Passion and Passion Pro. The 125 cubic

centimetre segment offers Glamour, Super Splendor and Glamour F1.

It also has an offering called Achiever in 135 cubic centimetre segment. In the

150 cubic centimetres and above the company offers brands like Hunk, CBZ X-treme,

Karizma and the Karizma ZMR. It also offers a 100 cubic centimeter scooter,

Pleasure. Hero MotoCorp Limited was incorporated in the year 1984 with the name

Hero Honda Motors Ltd. The company was established as a joint venture company

between Honda Motor Company of Japan and Hero Group.

In the year 1983, they signed a joint collaboration agreement and formed the

company. The joint venture between India's Hero Group and Honda Motor Company,

Japan has not only created the world's single largest two wheeler company but also

one of the most successful joint ventures worldwide. In the year 1985, the company

commenced their commercial production at Dharuhera plant in Haryana and

introduced their first motorcycle, CD 100 in the market. In the year 1989, they

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launched the new motorcycle model, Sleek in the market and in the year 1991, they

introduced new motorcycle model, CD 100 SS in the market.

In the year 1995, the company introduced their extraordinary product,

Splendor in the market. In the year 1997, the company inaugurated their second

manufacturing facility at Gurgaon in Haryana. Also, they introduced new motorcycle

model, Street in the market. In the year 1999, they launched Hero Honda CBZ, the

first 150cc motorcycle in the Indian two wheeler industry. In the year 2001, the

company introduced new models, Passion and Joy in the market. In the next year,

they introduced new models, Dawn and Ambition in the market. In the year 2003, the

company launched new motorcycle models namely, CD Dawn, Splendor+ and

Passion Plus in the market.

Also, they launched Hero Honda Karizma, the industry's first 223cc

motorcycle. In the year 2004, they introduced new models, Ambition 135 and CBZ*

in the market. During the year, they renewed the joint technical agreement with the

Honda Motors Company, Japan. In the year 2005, the company launched Super

Splendor, CD Deluxe, Glamour and Achiever in the market. In the year 2006, the

company forayed into scotter segment and launched 100cc gearless scotter, Pleasure

in the market.

In the year 2007, the company launched Splendor NXG, CD Deluxe, Passion

Plus and Hunk in the market. During the year 2007-08, the company commissioned

their third plant at Haridwar in Uttarakhand with an initial installed capacity of

500,000 units. This plant had lean manufacturing and practices that ensure efficiency.

During the year, the company launched new models (including variants) including

Splendor NXG, Hunk, New Super Splendor, New Passion Plus, Commemorative

Splendor+ and a refreshed version of Pleasure.

During the year 2008-09, the company increased the installed capacity of

Motorised 2 wheelers upto 350CC engine by 1800000 Nos to 5200000 Nos. Also,

they launched eight models: Passion Pro (100 cubic capacity-4 Stroke), CBZ-Extreme

(150 cubic capacity - 4 Stroke), Pleasure New Aesthetics, Splendor NXG (Self Start),

CD Deluxe (Self Start), Glamour FI, Glamour (Carb) and HUNK Special Edition.

Also, they launched new motorcycle model, Karizma - ZMR in the market. During

29

the year 2009-10, the company increased the installed capacity of Motorised 2

wheelers upto 350CC engine by 200000 Nos to 5400000 Nos.

The company launched nine new models during the year. During the year

2010-11, the company launched six new models including variants of existing models

successfully. They refreshed Glamour and Glamour FI. They introduced the New

Hunk, Super Splendor and Splendor Pro. The company launched the new upgraded

versions of CBZ Xtreme and Karizma. Also, they breached the landmark 5 million

figure cumulative sales in a single year. During the year, the Indian Promoter Group

of the company, which comprised of Hero Investments Pvt Ltd (HIPL), Bahadur

Chand Investment Pvt Ltd (BCIPL) and Hero Cycles Limited (Hero Cycles) re-

aligned the shareholding in the company, following a family agreement.

As a result, Hero Cycles transferred its shareholding in the company to HIPL

on May 28, 2010. As a result of these transactions, the Indian Promoter Group of the

company now comprises of HIPL and BCIPL owned and controlled entirely by the

Munjal Family headed by BrijmohanLallMunjal. Also, during the year, the Indian

Promoter Group and Honda Motor Co Ltd, Japan (Honda) entered into a Share

Transfer Agreement (the Agreement) on January 22, 2011. As per the terms of the

Agreement, Honda had agreed to transfer its entire shareholding of 26% in the

Company to the Indian Promoter Group, bringing an end to the joint venture between

the two promoter groups of the company. The acquisition was completed on March

22, 2011 and the shares held by Honda were transferred to the Indian joint venture

partner.

In addition to the Agreement, the Indian Promoter Group and Honda also

entered into a License Agreement on January 1, 2011. As per this agreement, Honda

has given to the company, the right and license to manufacture, assemble, sell and

distribute certain products and their service parts under their Intellectual Property

Rights. In July 2011, the company changed their name from Hero Honda Motors Ltd

to Hero MotoCorp Ltd. In February 2012, the company entered into a strategic

partnership with Erik Buell Racing (EBR) Of USA for contemporary technology and

design inputs to enable the company to launch high end bikes for the domestic and

international markets.

30

1.3 COMPANY PROFILE

MSK Motors is an authorized and leading Hero dealer in South India, dealing

Hero motorcycles Sales, Spares, service and Safety. We have been in automobile

business for over five decades and started our journey with Hero on 14th September

2005 and through our customer centric approach, quickly scaled up to become one of

the leading dealers of the country. A Team of exemplary, highly motivated &

dedicated Engineers, Managers and well experienced Service Manager and employees

are our assets. We have three State of Art Showrooms attached with Automated

Workshops and fully equipped Spares Centre. We also have branches at

Sathyamangalam, Bhavani, Pallipalayam, Anthiyur and Puliyampatti. Our Automated

Workshops are open on Sundays for regular maintenance of motorcycles. And we are

very proud to mention that we are also a stockiest in Spare Parts and have a wide

range of spares inventories and Motorcycles at all times.

He also authorised stockist for genuine Hero spare parts for Erode, Namakkal,

Salem, Dharmapuri, Krishnagiri, Coimbatore, Tirupur, Nilgiris and Karur Districts

The performance and safety of your bike not only depends on the world class

design and workmanship assured by Hero but also on the parts being used in the

assembly line. Even the finest components manufactured need replacement from time

to time. And to ensure the continued impeccable performance of your vehicle, the

spare parts should also be made and replaced as good as the components fitted by

Hero. To ensure this, we procure the replacement parts according to the specifications

and standards set by us and Hero Moto Corp. As a responsible Hero bike owner, we

recommend that for your safety, long life and high performance of your bike, use only

Hero genuine parts.

 PRODUCTS:

Acheiver

Passion-pro

Super splendour

Splendor NXG

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Splendor +

Splendor pro

CD deluxe

Pleasure

CD dawn

SPARE PARTS:

In MSK Motors we’ll get Genuine Hero parts that are engineered to provide

the quality and performance that is the hallmark of Hero. Whether we know the exact

Hero part we require or need help finding which part fits your needs, we’ll get

unparalleled expertise and prompt, efficient service from parts department staff at our

MSK Auto Parts.

EXTENDED WARRANTY

Extended Warranty period ranges from 1 year to upto 3 years after

manufacturer’s warranty period.

Hero Moto Corp Advantage beats the competition in all aspects and sets a new

trend in the market.

Beats the competition both in terms of parts coverage and pricing.

Has the most comprehensive parts covered list which (almost 15 –

20% more than the next best in the market)

Has the lowest prices in the market (5% – 20% less than the

competition)

as the widest range of extended warranty plans for the customers starting from 1

year to 3 years and upto 60,000 kms (Scooters) & 70,000 kms (Motorcycles)

CUSTOMER BENEFITS

Peace of mind motoring for up to 5 years.

- Nominal Cost

- All major parts covered under the programme

- Enhanced value of the vehicle through regular servicing and extended

warranty protection.

- Extended Warranty is transferable to new customer

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- Improved ability to ‘trade-in’ or ‘trade-up’ (resale value) through the

improved value of the vehicle

- A trusted source of two wheeler repairs.

- Nation wide sales/service network.

- Reliable and genuine spares.

SCOPE OF WARRANTY

Hero MotoCorp Ltd. warrants all its two-wheelers manufactured/assembled in

Dharuhera, Gurgaon and Haridwar plants, distributed in India and sold through its

authorized dealers to be free, under normal use and condition from any defect both in

material and workmanship, subject to the following terms and conditions.

 

TERMS AND CONDITIONS

All Hero MotoCorp two-wheelers are warranted for a certain period specified

in terms of time and kms from the date of purchase, whichever term gets satisfied

earlier.

It is mandatory for the customer to avail all free and paid services as per the

recommended schedule to be eligible for the warranty benefits.

If a defect is observed in any Hero MotoCorp two-wheeler, Hero MotoCorp’s

only obligation/liability is to repair or replace those parts which is/are considered to

be the cause of malfunction free of charge of both labour and material, when Hero

MotoCorp acknowledges that such malfunction has not come out of misuse or

improper handling etc. such defective two-wheeler should be brought to the nearest

Hero MotoCorp dealer/authorised service centre by the owner for necessary

inspection and subsequent repairs.

LIMITATIONS OF WARRANTY

The warranty shall not apply:

If there is any damage due to modification or fitting of accessories other than

the ones recommended by Hero MotoCorp.

If the two-wheeler has been used in any competitive events like track races or

rallies.

33

If there is any damaged caused due to usage of improper oil/grease, non

genuine parts.

For two-wheelers which have been used for any commercial purposes as taxi

etc.

For maintenance repairs required due to misuse while driving or due to

adulteration of oil, petrol or due to bad road conditions.

For consumables like oil, grease etc. used during free services or used during

warranty repairs.

If any part of the vehicle is tampered/repaired by unauthorized

persons/workshops etc.

For two-wheelers not used in accordance with the owner’s manual supplied

with each two-wheeler by Hero MotoCorp.

HISTORY:

Our journey in the automobile industry started more than four decades ago.

Today, we are one of the leading private automobile business groups in the state of

Tamil Nadu.

MSK Group has interests in Automobile dealerships, Spare-parts distribution,

Non-banking leasing and Finance, Transports, Textiles & Real estate developments.

The MSK Group is a well-recognized brand name among the Southern States’

automobile dealership fraternity. The various companies in the group have enjoyed

long standing associations with automobile manufacturers, generations of loyal

customers, the local community and workforce and the finance and banking industry.

VALUES AND BELIFES

The MSK Group realizes that we can sustain and grow to be a successful

company only if we cater to the needs of our customers and respect the environment

in which we live.

We strive to continuously improve our service to customers:

Through clear and honest information exchange,

Through timely fulfillment of our commitments and

By earning their trust at every step.

We strive to give back to the community:

34

By being a fair and honest business group,

By recycling water and waste wherever possible,

Using cfl lights and environmentally-friendly construction material when

possible,

By maintaining a green environment by saving trees when possible and

Continuously planting new saplings.

We strive to create a healthy working environment for our employees:

By creating an unbiased work culture,

Giving each employee the opportunity to grow within the company,

Providing on-site and off-site training opportunities to aid in his/her own

personal development,

By having a fair grievance redressal system when needed.

ENVIRONMENTAL RESPONSIBILITIES:

Energy-saving lighting systems: CFL (Compact Fluorescent Lamp): Our aim

is to use CFL bulbs in lighting areas wherever possible, thus reducing the amount of

energy consumed and reducing its harmful effects on the environment.

Water Recycling Units :Since our business requires a large amount of water

to wash and maintain vehicles, we aim to equip our workshops with water recycling

units where water from the water wash area is recycled through this equipment and

reused three times before being let out into the storm water drains.

Greenery: With a constant battle being waged between urbanization and the

maintenance of the green areas in and around cities, we aim to try and avoid the

unnecessary cutting of plants and trees in all our properties.

Rain water harvesting: We aim to harvest rain water wherever possible.

When any new area is being developed, we try to limit the amount of property that is

paved and let more rain water seep into the ground, thus improving the water table.

EMPLOYMENT:

The success of the MSK Group is primarily due to the strong bond that has

been created and is constantly renewed amongst the employees, partners and the

management of the company.  As it is often said, it is the employees that make a

company.

35

We at MSK Group strongly believe the success of our companies and our

branches is fully dependent on the strong core team players who comprise that

particular company or branch.

We look for motivated individuals who have the initiative to think beyond

their daily task. Individuals who are interested in working in a challenging

environment and high pressure situations along a team of like-minded individuals are

encouraged to apply.

Being a medium size group, performers have the ability to be quickly

recognized and constantly promoted to positions that carry more responsibility.

The group’s business interests are large and diverse and thus there are ample

opportunities that will always be available. Individuals who wish to learn fast and

grow within the group are encouraged to apply.

36

1.4 STATEMENT OF THE PROBLEM

Motor cycle industry is one of the few industries in growth phase today. A

consumer who wants to be mobile today considers personal transportation as one of

his basic needs. Motor cycles satisfy this need immensely. This fact could be clearly

from the data recorded as the share of motor cycles in the two wheeler industry has

grown from 26 % in 1988-89 to 48% in 1998-99.Motor cycles have also become very

common among our large middle class population. To study the reasons for this

success story recorded by motorcycles in a span of a short period the study of

consumer preference for motor cycles will be of great use .The study gains

importance since it could throw light on the reasons for the growth of motor cycle’s

industry.

37

1.5 OBJECTIVES OF THE STUDY

Primary objectives:

To analysis the consumers attitude, preference and satisfaction towards MSK

motors Erode.

Secondary objectives:

To study the existing consumer preference with regards to Hero bikes.

To know the satisfaction level of customer towards the two wheelers.

To know the existing features on two wheelers.

To know the drawback of two wheelers other than vehicles in MSK motors.

To find out the factors influencing the consumer attitude for choosing Hero

bikes.

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1.6 SCOPE OF THE STUDY

The study would help the company to know the customer’s satisfaction

towards competitor’s product.

The study would focus on the competitor’s product features.

This study will help us to know the satisfaction level of the consumers.

The study will also help the company to increase the level of the customers in

future.

This study reveals actual attitude of the customers.

Similar type of study can be made for other organization also.

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1.7 LIMITATIONS OF THE STUDY

Limitation of this survey was carried within a short period of Six months.

The sample selected cannot be judged as error free as the respondents and

their attitudes are heterogeneous in nature and the chance of based information

to keep in cannot be eliminated.

The study has been restricted in Erode region.As such the results cannot be

generalized.

Since only a sample of 300 was selected due constraints it is difficult to

generalized and to come conclusion.

40

CHAPTER-II

REVIEW OF LITERATURE

1. Richard Feinberg, Rajesh Kadam(2002)Business is moving online, not as a

matter of choice, but as a matter of necessity and the use of the Internet as a channel

for commerce and information presents an opportunity for business to use the Internet

as a tool for customer relationship management (CRM)/(e-CRM) and companies will

benefit from the same.

2. V.G. Ramakrishnan (2003) The vehicle servicing business in India is undergoing

a transformation. In early days, the servicing needs of the vehicles were undertaken

mostly by roadside mechanics and a few organized workshops. Companies need to

focus on building a chain of authorized service stations covering the entire country to

service its vehicles. As the competition in the market has intensified and profit

margins squeezed, companies need to view servicing as a money spinner for the entire

operation. In the recent years, other players have entered in the field and the creation

of national chain of organized workshops is underway and that is likely to change the

nature of vehicle servicing market in India.

3. CalinGurau (2003) mentioned that the advantages of the Internet as a transaction

and communication channel present new opportunities for businesses to create a long-

term relationship with their customers and the level of e-service quality is an essential

component of this customer-centric strategy, thus the companies need to establish the

optimum level of e- service quality, taking into consideration customers’

satisfaction, , the competitive conditions of the market, but however, the effective use

of this method requires the implementation of e-CRM systems, structured around a

customer-centric approach.

4. Injazz J. Chen (2003)has mentioned that Customer relationship management is a

combination of people, processes and technology that seeks to understand a

company's customers and companies that successfully implement CRM will reap the

rewards in customer loyalty and long run profitability and managing a successful

CRM implementation requires an integrated and balanced approach to technology,

process, and people.

41

5. Alan Smith (2006) mentioned that since the mid-1990s many industries were

experiencing increased demand from their customers for higher quality and easier

access to service thus corporations and top managers started to rethink their traditional

ways of providing service and customer relationship management started to become a

strategic asset among corporations.

6. Celent(2006) concluded that banks can gain full value from their investments in

CRM technology by leveraging on customer knowledge and TCF bank a midsize that

has a community banking culture realised the same and implemented CRM for its

online banking process and this helped TCF bank to reap rewards during direct

customer interaction.

7. GauravPatra (2006) has mentioned that investing in cutting edge technologies,

high end equipments and robust infrastructure, will be of little use, unless the

customers are serviced satisfactorily, thus Tata Teleservices Limited, adopted and

deployed CRM solution, which helped the company to cater to the varied needs of its

vast customer base and this moved the company to higher customer service levels.

8. Mary Moylan (2006)conclude in his chapter “Customer Relationship

Management”, that due to changing scenario in financial service sector Allied Irish

Bank (AIB) , noticed the need to provide quality customer service as a means to retain

customer and attract new ones and thus focused attention on CRM which helped AIB

to shift its business focus from transactional to relationship market.

9. Paul Szwarc (2006)has noted that CRM involves more than just gathering data

and developing programmes to identify the most profitable customer, then managing

the relationship by offering them more suitable products and services. Handled well

CRM can allow for stages in the relationship to be identified and managed and the

organisations that use CRM systems sensibly can often change customer’s opinions

and behaviour.

10. Gordon Fullerton (2006), “Putting relationship in CRM”, that JEEP, a division

of Daimler Chrysler Automobile Company, has served a classic example of CRM

program that provides a considerable value to both the customers and the firm by

42

developing a program exclusively for jeep owners and fostered a community that is

highly effectively committed to the product, the brand and the customers.

11.KoushikiChoudhury, Arvinandan Mukherjee(2007)argue that relationship

marketing implies attracting, maintaining and enhancing customer relationships and it

is beneficial because acquiring new customers is more costly than retaining existing

ones, and one of the determinants of the success of the relationship marketing

strategies of a firm is how the customers perceive the resulting service quality.

12.BiswajitMahanty and VirupaxiBagodi (2007) More than 55 million two-

wheelers are moving on Indian roads. Accordingly, two-wheeler service sector should

have generated revenue amounting to INR 100,000 million per year, but in reality,

this has not been realised in the organised service sector, the Indian two-wheeler

service industry has not considered servicing as a line of business and providing

conveniently reliable services is most important in two-wheeler services in India to

capture the market.

13.Steve Kahl and Fernaando Suarez (2008) in their research paper “Product,

Process, and Service: A New Industry Lifecycle Model”, has concluded that Existing

models of industry lifecycle evolution tend to focus on changes in the products and

processes and largely overlook the dynamics of services, but increasingly, the

revenues of many firms are becoming dominated by sales of services rather than

products, or products sold with services to gain competitive differentiation in

markets marked by increasing product commoditization.

14.BiswajitMahanty and VirupaxiBagodi(2008) It is an era of customer delight for

the two wheeler industry and the conventional measures implemented by the service

organizations tend to be inadequate to attract customers persistently.

15. Datta (2008) Advertising is the non-personal communication of the information

usually paid for and persuasive in nature about products, services or ideas by

identified sponsors through the various media.

16. Kotwal et al (2008) While purchasing cosmetics, toiletries, stationary, gifts and

cards, the girls give importance to informational input by the TV advertisements into

43

their decision to buy. It was also found that girls had positive attitude towards TV

commercials.

17.S.Saravan, N Panchanathan and S Pragadeeswaran (2009) concluded in their

research paper “Markets and Consumers- Consumer Behavior Towards Showroom

Services of Two- Wheeler with reference to Cuddalore District” that students and

employees are more satisfied about showroom service and age of consumer is an

important factor while choosing the brand of bike and all the consumers give

importance all factors relating to buying a vehicle.

18. Mrs. M.L. kamaeswari (The Indian Journal Marketing – Oct - 2009) has

expressed that, industrialization has bought vast changes in the automobile industry,

because and development of any area requires appropriate transportation facilities,

automobile industry in one of the fastest growing sectors in our country. The rapid

growth of middle class section is the primary reason for the growth of two – wheeler

industry people in rural and semi urban areas are trying to devote their life style and

people in metropolitan cities are completely disappointed with the public transport

system. Indian is the third largest manufacture and second largest consumer of two-

wheeler in the world. It has been achieved due to variety of reason like restrictive

policy of the government of Indian and rising demand for personal transport.

19. Dr. Senthilkumar , department of business management, Indian automobile, in

his research study 2009, found that competitive hostility, supplier, “power” and

market turbulence relationship appreciate the role of public private partnership as win

–win situation for private entities government an individual consumers. In recent we

saw two-wheeler manufacture like bikes focus being on the domestic market and then

on exports. There are signs of becoming a developed nation and this will increase the

energy need if the country even more.

20.V S Ramaswamy (2010) CRM is not merely the response of the times, but the

necessity of the time as well it is the effective CRM which converts buyers into

profitable customers and then builds relations and retains them as a customer for life.

21. Mona J Fitzsimmons (2010) has concluded that the profitability of automobile

manufacturers depends on exploiting value added services for instance automobile

44

manufacturers have discovered that financing and after sales service can achieve

significant profits.

22.R K Garg (2011) CRM requires a seamless, single view of the customer with

consistent cross-channel interaction models and it is recommend that companies

bundle all internal CRM strategies into one comprehensive multi-channel strategy.

More over if the two wheeler manufacturer integrate CRM with SCM, then product

design and production planning can be aligned with the customer information

available, to increase customer loyalty.

23. Graham Charlton (2011) has highlighted the findings in the report from E-

consultancy 2011 Customer Engagement Report, that companies have stared the use

of social media for customer service and companies are really seeing the benefits of

social media as customer service channel which allows companies to handle

complaints, question and deliver real – time information.

24.Lavanya T (2011)has mentioned that CRM solutions aim to eliminate the

organisationsstovepipes that hamper proactive customer interaction.CRM applications

are also designed to increase the effectiveness of the staff members who interacts with

the customers or prospects and the use of CRM applications can lead to improved

customer responsiveness and a more comprehensive view of the entire “cradle –to-

grave” customer life cycle.

25. Abhijeet Singh and Brijesh Kumar (2011) Hero Honda Motors Ltd, is running a

program called Good life Passport to Relationship Reward, with an objective to create

an innovative environment for interaction between Hero Honda and its customers.

Members of this program are given a magnetic card in which all information is stored

and this card is swiped when using any service at a showroom or workshop and it

works like a loyalty benefit card.

26. PawanChabra (2011) has mentioned that the death knell off Bajaj’s scooters

business was sounded when the company officially stopped the production of its

flagship Chetak in December 2002, to get cracking on its ambition of becoming a

credible motorcycle brand manufacturer, the company invested big in R&D and

product development, but the company faced challenges in the sales and distribution

45

because their dealers had little idea how to sell motorcycles, so the entire dealership

network was trained to sell motorcycles.

27.Tamilarasan R(2011)has mentioned that CRM becomes effective when customers

are involved in the CRM process and it is necessary the organisation include the

customers into the mix and if CRM practices are conceived and implemented

properly, it will enable companies to retain customers for life, get maximum value out

of each customer and generate exemplary customer bonding.

28.Philip Kotler (2012) Harley – Davidson dealers ranging from the CEO to the sales

staff, maintain personalized relationships with customers through face to face and

social media contact. Knowing customers as individuals and conducting ongoing

research to keep up with their changing expectations and experiences which helps

Harley – Davidson to define their customers’ needs better.

29. Kevin Keller (2012) Caterpillar has become a leading firm by maximizing the

total customer value with the help of effective CRM, best after sales service in the

industry and better trained dealer. This allows the firm to command a premium price

of 10% to 20% higher than competitors such as Volvo, Komatsu etc.

30. Oyama (2012) Honda Motor wants to be number one in the Indian market and the

company wanted 30% of Honda’s global sales to come from Indian operations by

2020. HMSI have had issues related to production in the past with most of its models

having the longest waiting period in the country, this reduced in Honda’s penetration

in the rural market, which is less than a third of Hero Moto Corp.

46

CHAPTER-III

RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem.

It may be understood as a science of study how research is done scientifically. In it we

study the various steps that are generally adopted by the researcher in studying his

research problem along with the logic behind them

RESEARCH DESIGN:

Research Design is a plan for addressing the research objective or hypothesis.

In essence, the Researcher develops a structure or framework to answer a specific

research problem/opportunity.

DESCRIPTIVE RESEARCH DESIGN:

The Descriptive approach attempts in describing the characteristics of a

particular individual, or a group. The study concerning whether certain variables are

associated with as against this, studies concerned with specific predictions, with

narration of facts and characteristics concerning individual, group or situation. In this

study, the researcher must be able to define clearly, what he wants to measure and

must find adequate methods for measuring it along with a clear cut definition of

population he wants to study.

SAMPLE DESIGN:

          The universe of study being large, researcher has to resort to sampling method

of data collection. On the basis of a section of the universe selected in a prescribed

manner one is able to deduce for the universe. For the sample results to be applicable

on the universe, sample should be adequately chosen so to make it representative and

reliable.

METHODS OF DATA COLLECTION:

A questionnaire has been used for data collection. The researcher interviews

the respondents. Respondents are guided by the researcher to answer the questions in

the questionnaire.

47

DATA TYPE

PRIMARY DATA:

Conducting direct interview using Structured Questionnaire has collected the

primary data

QUESTIONNAIRE DESIGN:

Proper care has been taken to ensure that the information needs match the

objectives which in turn match the data collected through the questionnaire. The basic

cardinal rules of questionnaire design like using simple and clear words, the logical

and sequential arrangement of questions has been taken care of.

SAMPLING TECHNIQUE:

There are two sampling techniques. They are probability sampling & Non-

Probability sampling. In this study the researcher had adopted convenient sampling.

SAMPLE SIZE:

Sample size taken for the study is 300 respondents.

STATISTICAL TOOLS USED:

Tools used for this study is,

SIMPLE PERCENTAGE ANALYSIS

FACTOR ANALYSIS

CORRELATION

HENRY GARRETT RANKING METHOD

Simple Percentage analysis:

Percentage analysis refers to a special kind of ratio. Percentages are used in

making comparison between two are more series of data. Percentage is used to

describe relative terms the distribution of two or more data.

48

Actual respondents

Percentage of Respondents = ------------------------------------------ X 100

Total respondents

Factor analysis:

Factor analysis can be used to explore the data for patterns, confirm our

hypothesis, or reduce the many variables to a more manageable number.

Correlation analysis

This tool helps in determining the degree of relationship between two

variables. It establishes the co-variation of two variables. In this study this tool is used

to find the degree of correlation.

Henry Garrett Ranking Method

Henry Garrett Ranking Method is used to find the factor which affecting the

features of Hero products and MSK motors, Erode.

49

CHAPTER-IV

ANALYSIS AND INTERPRETATION

PERCENTAGE ANALYSIS

TABLE NO: 1

GENDER OF THE RESPONDENTS

SL.NO

GENDER FREQUENCY PERCENTAGE

1 Male 262 87%

2 Female 38 13%

TOTAL 300 100%

Interpretation:

The above table reveals that 87% of the respondents are male and 13% of the

respondents are female.

CHART NO: 1

GENDER OF THE RESPONDENTS

Male

Female

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

87%

13%

PERCENTAGE

GE

ND

ER

50

TABLE NO: 2

AGE GROUP OF THE RESPONDENTS

SL.NO AGE GROUP FREQUENCY PERCENTAGE

1 Below 25 yrs 140 47

2 26-30 110 37

3 31-40 39 13

4 41-50 7 2

5 Above 50 yrs 4 1

Total 300 100

Interpretation:

It is inferred that majority of the respondents(47%) are in the age group of

Below 25 yrs, 37% belongs to 26-30 yrs and 13% are in the age group of 31-40 yrs,

2% are in the age group of 41-45 yrs, and the remaining 1% are in the age group of

Above 45 years of age.

CHART NO: 2

AGE GROUP OF THE RESPONDENTS

Below 25 yrs

26-30

31-40

41-50

Above 50 yrs

0% 5% 10%15%20%25%30%35%40%45%50%

47%

37%

13%

2%

1%

PERCENTAGE

AG

E

51

TABLE NO: 3

RESPONDENTSEDUCATIONAL LEVEL

SL.NO EDUCATION FREQUENCY PERCENTAGE

1 Below HSC 93 31

2 HSC/Diploma 90 30

3 Under Graduate 66 22

4 Post Graduate 51 17

Total 300 100

Interpretation:

The above table depicts that 31% of the respondents belongs to the category of

Below HSC, 30% of the respondents comes under HSC/Diploma, 22% of the

respondents belongs to the category of Under Graduate, and the remaining 17%

respondents are Post Graduates.

CHART NO: 3

RESPONDENTSEDUCATIONAL LEVEL

Below H

SC

HSC/Dipl

oma

Under

Gradua

te

Post G

radua

te0%

5%

10%

15%

20%

25%

30%

35% 31% 30%

22%

17%

EDUCATIONAL LEVEL

PE

RC

EN

TA

GE

52

TABLE NO: 4

RESPONDENTS MARITAL STATUS

SL.NO MARITAL STATUS FREQUENCY PERCENTAGE

1 Married 130 43

2 Unmarried 170 57

Total 300 100

Interpretation:

The above table reveals that 57% of the respondents are Unmarried and 43%

of the respondents are Married.

CHART NO: 4

RESPONDENTS MARITAL STATUS

Married Unmarried0

10

20

30

40

50

60 43

57

MARITAL STATUS

PE

RC

EN

TA

GE

53

TABLE NO: 5

PROFESSION OF THE RESPONDENTS

SL.NO PROFESSION FREQUENCY PERCENTAGE

1 Government Employee

65 22

2 Self Employee 85 28

3 Private 40 13

4 Business 37 12

5 Student 73 25

TOTAL 300 100

Interpretation:

The above table reveals that 28% of the respondents are Self Employed, 25%

of the respondents are Students, 22% of the respondents are Government Employees,

13% of the respondents are Private employees and the remaining 12% of the

respondents are doing Business.

CHART: 5

PROFESSION OF THE RESPONDENTS

0

5

10

15

20

25

30

22

28

13 12

25

PROFESSION

PE

RC

EN

TA

GE

54

TABLE NO: 6

INCOME OF THE RESPONDENTS

SL.NO INCOME FREQUENCY PERCENTAGE

1 Less than 5000 90 30

2 5001-10000 118 39

3 10001-15000 62 21

4 15001-20000 19 6

5 Above 20000 11 4

TOTAL 300 100

Interpretation:

It is inferred that majority of the respondent(39%) are having income between

Rs.5001-10000, 30% of the respondent income isLess than Rs.5000, 21% of the

respondent are having income Rs.10001-15000, 6% of the respondent are having

income of Rs.15001-20000 and the remaining 4% of the respondent are having Above

Rs.20000.

CHART NO: 6

INCOME OF THE RESPONDENT

Less than 5000

5001-10000

10001-15000

15001-20000

Above 20000

0

5

10

15

20

25

30

35

4030

39

21

64

INCOME

PE

RC

EN

TA

GE

55

TABLE NO: 7

AREA OF THE RESPONDENTS

SL.NO AREA FREQUENCY PERCENTAGE

1 Rural 80 27

2 Semi-Urban 153 51

3 Urban 67 22

TOTAL 300 100

Interpretation:

The above table represents that 51% of the respondents are from Semi-Urban

areas, 27% of the respondents are fromRural areas and 22% of the respondents are

from Urban areas.

CHART NO: 7

AREA OF THE RESPONDENTS

Rural Semi-Urban Urban0

10

20

30

40

50

60

27

51

22

AREA

PE

RC

EN

TA

GE

56

TABLE NO: 8

FAMILY SIZE OF THE RESPONDENTS

SL.NO FAMILY SIZE FREQUENCY PERCENTAGE

1 1-3 members 103 34

2 4 members 137 46

3 5 members 48 16

4 6 members 9 3

5 Above 6 members 3 1

TOTAL 300 100

Interpretation:

The above table shows that 46% of the respondents are having 4 members in

their family, 34% of the respondents are having 1-3 members in their family, 16% of

the respondents are5membersin their family, 3% of the respondents are 6members in

their family and the remaining 1% of the respondents are in their family Above

6members in their family.

CHART NO: 8

SIZE OF THE FAMILY OF THE RESPONDENTS

1-3 members

4 members 5 members 6 members Above 6 members

05

101520253035404550

34

46

16

3 1

FAMILY SIZE

PE

RC

EN

TA

GE

57

TABLE NO: 9

SOURCE OF INFORMATION ABOUT HERO

SL.NO PARTICULARS FREQUENCY PERCENTAGE

1 Family / Relatives 115 38

2 Friends 127 42

3 Show room 13 4

4 Magazines 8 3

5 Advertisement 19 7

6 Internet 14 5

7 Exhibition 4 1

TOTAL 300 100

Interpretation:

The above table represents that 42% of the respondents received

informationabout Hero from Friends, 38% of the respondents received information

from Family / Relatives, 7% of the respondents received information through

Advertisement, 5% of the respondents received information from Internet, 4% of the

respondents received information from Showroom, 3% of the respondents received

information from Magazines and the remaining 1% of the respondents received

information from Exhibition.

CHART NO: 9

58

SOURCE INFORMATION ABOUT HERO

Family

/ Rela

tives

Friend

s

Show ro

om

Mag

azine

s

Advert

isemen

t

Inter

net

Exhibi

tion

0

5

10

15

20

25

30

35

40

4538

42

4 37

51

SOURCE OF INFORMATION

PE

RC

EN

TA

GE

TABLE NO: 10

59

CONSIDERATION FOR PURCHASING OTHER VEHICLE

SL.NO PARTICULARS FREQUENCY PERCENTAGE

1 Yes 148 49

2 No 152 51

TOTAL 300 100

Interpretation:

The above table shows that 51% of the respondents did not considered other

vehicles before purchasing Hero, and the remaining 49% of the respondents

considered other vehicles before purchasing Hero.

CHART NO: 10

CONSIDERATION FOR PURCHASING OTHER VEHICLE

Yes No48

48.5

49

49.5

50

50.5

51

49

51

CONSIDERATION

PE

RC

EN

TA

GE

TABLE NO: 11

60

MILEAGE OF HERO BIKE

SL.NO PARTICULARS FREQUENCY PERCENTAGE

1 Below 40kms 18 6

2 41-50kms 54 18

3 51-60kms 140 47

4 61-70kms 87 29

5 Above 70kms 1 0

TOTAL 300 100

Interpretation:

The above table reveals that 47% of the respondents says that the present

mileage of the bike is 51-60kms, 29% of the respondents bike mileage is 61-70kms,

18% of the respondents bike mileage is 41-50kms, 6% of the respondents bike

mileage is Below 40kms and the remaining of the respondents bike mileage is Above

70kms.

CHART NO: 11

MILEAGE OF HERO BIKE

Below 40kms

41-50kms 51-60kms 61-70kms Above 70kms

0

10

20

30

40

50

6

18

47

29

0

MILEAGE

PE

RC

EN

TA

GE

TABLE NO: 12

61

PRESENT MAINTANCE COST OF THE BIKE PER ANNUM

SL.NO PARTICULARS FREQUENCY PERCENTAGE

1 Below Rs.1000 66 22

2 Rs.1001-2000 143 48

3 Rs.2001-3000 62 20

4 Above Rs.3000 29 10

TOTAL 300 100

Interpretation:

The above table represents shows that 48% of the respondents spends

Rs.1001-2000 per annum to maintain the bike, 22% of the respondents spends Below

Rs.1000 and only 10% of the respondents spends more than Rs.3000 for the

maintenance of the bike.

CHART NO: 12

PRESENT MAINTANCE COST OF THE BIKE

Below Rs.1000

Rs.1001-2000

Rs.2001-3000

Above Rs.3000

0

5

10

15

20

25

30

35

40

45

50

22

48

20

10

MAINTANCE COST

PE

RC

EN

TA

GE

TABLE NO: 13

62

FREQUENCY OF BIKE SERVICE

SL.NO PARTICULARS FREQUENCY PERCENTAGE

1 0-2times 78 26

2 3-5times 125 42

3 6-8times 76 25

4 9-11times 21 7

TOTAL 300 100

Interpretation:

The above table represents that 42% of the respondents service their bike 3-

5times, 26% of the respondents service their bike 0-2times, 25% of the respondents

service their bike 6-8times, 7% of the respondents service their bike 9-11times in a

year.

CHART NO:13

FREQUENCY OF BIKE SERVICE

0-2times 3-5times 6-8times 9-11times05

1015202530354045

26

42

25

7

BIKE SERVICES

PE

RC

EN

TA

GE

TABLE NO: 14

63

MAINTANANCE PERIOD OF THE VEHICLE

SL.NO PARTICULARS FREQUENCY PERCENTAGE

1 one year 75 25

2 Upto 2 years 103 34

3 Upto 3 years 79 27

4 Upto 4 years 28 9

5 5 years and above 15 5

TOTAL 300 100

Interpretation:

The above table represents that 34% of the respondents are maintaining the

vehicle upto 2 years, 27% of the respondents are maintaining the vehicle upto 3years,

25% of the respondents are maintaining the vehicle upto one year, 9% of the

respondents are maintaining the vehicle upto 4 years and the remaining 5% of the

respondents are maintaining the vehicle 5years and above.

CHART NO: 14

MAINTANANCE PERIOD OF THE VEHICLE

one year upto 2 years

upto 3 years

upto 4 years

5 years and above

0

5

10

15

20

25

30

35

25

34

27

95

MAINTANANCE PERIOD

PE

RC

EN

TA

GE

TABLE NO: 15

64

RESALE VALUE OF THE HERO BIKE

SL.NO PARTICULARS FREQUENCY PERCENTAGE

1 Highly Dissatisfied 11 4

2 Dissatisfied 15 5

3 Neutral 88 29

4 Satisfied 101 34

5 Highly Satisfied 85 28

TOTAL 300 100

Interpretation:

The above table shows that 34% of the respondents are satisfied with the

resale value, 28% of the respondents are highly satisfied with the resale value, 5% of

the respondents are dissatisfied with the resale value and the remaining 4% of the

respondents are highly dissatisfied with the resale value.

CHART NO: 15

RESALE VALUE OF THE HERO BIKE

Highly

Dissati

sfied

Dissati

sfied

Neutra

l

Satisfi

ed

Highly

Satisfi

ed05

101520253035

4 5

2934

28

RESALE VALUE

PE

RC

EN

TA

GE

TABLE NO: 16

65

RECOMMANDATION BY THE RESPONDENTS

SL.NO PARTICULARS FREQUENCY PERCENTAGE

1 Yes 194 65%

2 No 106 35%

TOTAL 300 100

Interpretation:

65% of the respondents recommend Hero bike to others and 35% of the

respondents says that they will not recommend.

CHART NO: 16

RECOMMANDATION BY THE RESPONDENTS

Yes No0

10

20

30

40

50

60

70

65

35

RECOMMANDATION

PE

RC

EN

TA

GE

FACTOR ANALYSIS

66

It is a multivariate technique used for data reduction. This analysis is made to

study a large number of variables affecting particular situation and combining the

related variables into a smaller number of relevant factors.

H0: The factor analysis is not valid.

H1: The factor analysis is valid.

TABLE NO: 17

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.655

Bartlett's Test of Sphericity

Approx. Chi-Square 229.102

Df 45

Sig. .000

Interpretation:

From the above table it can be inferred that the significance (0.000) is less

than the assumed value (0.05). So reject the H0. This means that the factor analysis is

valid.KMO coefficient (0.655) is more than 0.5 which implies that the factor analysis

for data reduction is effective.

67

TABLE NO: 18

Total Variance Explained

Component Initial Eigen values Extraction Sums of Squared

Loadings

Rotation Sums of Squared

Loadings

Total % of

Variance

Cumulative

%

Total % of

Variance

Cumulative

%

Total % of

Variance

Cumulative

%

1 2.136 21.361 21.361 2.136 21.361 21.361 1.587 15.869 15.869

2 1.378 13.778 35.140 1.378 13.778 35.140 1.569 15.691 31.560

3 1.041 10.412 45.552 1.041 10.412 45.552 1.399 13.992 45.552

4 .980 9.797 55.349

5 .919 9.186 64.535

6 .884 8.839 73.374

7 .778 7.780 81.154

8 .734 7.340 88.494

9 .602 6.019 94.513

10 .549 5.487 100.000

Extraction Method: Principal Component Analysis.

Interpretation:

From the above table, it is inferred that the extracted nine factors showed a

cumulative variance of 46%, which means a good factor analysis has been done.

68

TABLE NO: 19

Rotated Component Matrix

Factors

Component

1 2 3

Delivery time .755 -.026 -.106

Service quality .615 .087 .124

Spare parts cost .242 .361 .276

Spare parts Availability -.024 .804 -.223

Spare parts Quality -.087 .740 .145

Attention of service Personal .004 -.097 .466

Explanation about service .490 -.126 .168

Service Data Intimation .484 .404 .164

Customer waiting Room Facility .053 .109 .788

Restroom Facility .308 .188 .576

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 4 iterations.

Interpretation:

The above table shows the extracted three factors which have higher effect on

the variables. The factor extracted includes the optimum score of (.755) in first

component shows that the respondents feels that the vehicle delivery time is good.

The factor extracted includes the optimum score of (.804) in first component shows

that the respondents feels that the availability of vehicle spare parts is very good. The

factor extracted includes the optimum score of (.788) in first component shows that

the respondents feels that the waiting room facility is good.

69

CORRELATION ANALYSIS

The following table shows the relationship between the problems of vehicle

and users recommendation for the future buyers.

TABLE NO: 20

CorrelationsMileage Brakes Clutch Engine

SoundStarting trouble

Fork Recommend for Future

Buyers

Mileage

Pearson Correlation

1 .252** .186** -.030 -.044 .215** .106

Sig. (2-tailed)

.000 .001 .611 .446 .000 .067

N 300 300 300 300 300 300 300

Brakes

Pearson Correlation

.252** 1 .037 -.071 -.053 .266** .065

Sig. (2-tailed)

.000 .524 .218 .364 .000 .263

N 300 300 300 300 300 300 300

Clutch

Pearson Correlation

.186** .037 1 .380** .261** .038 .118*

Sig. (2-tailed)

.001 .524 .000 .000 .514 .041

N 300 300 300 300 300 300 300

Engine Sound

Pearson Correlation

-.030 -.071 .380** 1 .409** .101 .197**

Sig. (2-tailed)

.611 .218 .000 .000 .080 .001

N 300 300 300 300 300 300 300

Starting trouble

Pearson Correlation

-.044 -.053 .261** .409** 1 -.028 .222**

Sig. (2-tailed)

.446 .364 .000 .000 .625 .000

N 300 300 300 300 300 300 300

Fork

Pearson Correlation

.215** .266** .038 .101 -.028 1 .218**

Sig. (2-tailed)

.000 .000 .514 .080 .625 .000

N 300 300 300 300 300 300 300

70

Recommend for Future Buyers

Pearson Correlation

.106 .065 .118* .197** .222** .218** 1

Sig. (2-tailed)

.067 .263 .041 .001 .000 .000

N 300 300 300 300 300 300 300**. Correlation is significant at the 0.01 level (2-tailed).*. Correlation is significant at the 0.05 level (2-tailed).

Interpretation:

Pearson correlation value shows that the variables Engine sound(.197),

Starting trouble(.222) and Fork(.218) are moderately correlated; Hence there is a

relationship between the problems of vehicle and the users recommendation for the

future buyers.

71

TABLE NO: 21

FEATURES OF HERO PRODUCTS

The following table shows the Following features of hero products.

Interpretation:

From the above table it is inferred that the respondents are mainly attracted by

the mileage given by the Hero bike followed by the vehicle style, driving comfort,

colour, spares parts availability.

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Particulars Henry Garrett Ranking

Total

scores Mean Rank

Suspension 2772 1078 3007 3168 2850 1692 3162 2024 3367 5040 28160 93.86 9

Long life 3069 3332 2037 2592 2280 3478 2790 3128 3913 1710 28329 94.43 6

Performance 2673 2254 3783 1632 2185 2632 3720 3956 2366 3060 28261 94.20 8

Price 2574 2744 2037 2496 3040 2914 3813 3680 2457 2520 28275 94.25 7

Style 4356 2058 3201 2880 4560 4418 2325 1840 1911 990 28539 95.13 2

Driving

comfort 2871 3332 2328 4704 4275 2726 2139 1840 1911 2340 28466 94.88 3

Colour 2277 4214 3589 3552 2090 3854 2418 2208 2548 1710 28460 94.86 4

Mileage 2673 5978 4753 2400 2755 1692 1767 2576 2093 1890 28577 95.25 1

Spares

availability 4356 3626 2134 2784 2090 1692 3348 2116 2912 3330 28388 94.62 5

Maintenance 2079 784 2231 2592 2375 3102 2418 4232 3822 4410 28045 93.48 10

TABLE NO: 22

FEATURES OF MSK MOTORS, ERODE

The following table shows the Following features of MSK motors, Erode.

Particulars Henry Garrett Ranking

Total

scores Mean Rank

Location of

showroom 5940 4312 6984 5280 6555 29071 96.90333 4

Attractiveness

of showroom 6336 5586 4462 5664 7030 29078 96.92667 3

Quick delivery

process 6435 5782 6790 5952 4180 29139 97.13 2

Model

availability 6930 6174 6014 6624 3420 29162 97.20667 1

Easy Finance

arrangements 4059 7546 4850 5280 7315 29050 96.83333 5

Interpretation:

From the above table it is inferred that the respondents are mostly attracted by

the showroom in case of Model availability, Quick delivery process, Attractiveness of

showroom, etc., from the following features of Hero products.

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CHAPTER V

5. FINDINGS, SUGGESTION AND CONCLUSION

5.1 FINDINGS

PERCENTAGE ANALYSIS

87% of the respondents are male.

47% of the respondents are below 25 years of age.

31% of the respondents were below HSC of educational level.

57% of the respondents are unmarried.

28% of the respondents are working as self employee.

39% of the respondents are got monthly income of Rs.5001 to Rs10000.

51% of the respondents are came from semi urban areas.

46% of the respondents are having 4 members in their family.

42% of the respondents are got information from friends.

51% of the respondents are not consider any other vehicle before purchasing

Hero.

47% of the respondents are having mileage of 51 to 60kms of Hero bikes.

48% of the respondents are maintaining cost of Rs.1001-2000 of their Hero

bikes.

42% of the respondents are 3-5times service their Hero bikes.

34% of the respondents are maintaining Hero bikes upto 2 years.

34% of the respondents are satisfied with the resale value of Hero bikes.

65% of the respondents are recommending to future buyers about Hero.

FACTOR ANALYSIS:

The factors of consumer’s perception towards problem faced by 10 individual

statements. Out of 10 factors, 3 individual factors contribute more towards

consumer perceptions towards MSK Motors showroom.

The factors are:

1. Delivery time

2. Spare parts Availability

3. Customer waiting Room Facility

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CORRELATION:

There is a positive correlation between the problems of vehicle and the

recommendation of Hero bikes.

RANKING:

In the 10 features, the respondents are mainly attracted by the mileage given

by the Hero products.

In the 5 features, the respondents are mainly attracted by the showroom in case

of model availability.

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5.2 SUGGESTIONS

Television advertisements can be improved for providing information about

the offers given by the dealer.

Offers, discounts and other facilities given by the dealers can be passed

through internet, magazine, etc.

The dealer has to help the customers for their financial arrangements.

The retail showrooms can impress the loyal customer by giving them special

discounts during purchase of Hero bikes and also during festival seasons.

The customers are always preferred to purchase updated models. It will lead to

increase the sales of the products in MSK Motors.

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5.3 CONCLUSION

The study mainly reveals the customer attitude, preference and satisfaction

towards Hero bikes rendered in MSK motors.

Customer has associated strong belief with Hero motocorp due to the

mileageand resale value of the product.

A customer requirement shows thatthey want mileage as well as engine power

in the product. They are least bothered about theprice. If price is more and mileage

and power exists into the product they are ready to buy it.Manufacturer must focus on

the requirement of the customer.

Thus concluded that most of the customers are satisfied with the delivery time,

mileage and spares availability. But some of the customers not satisfied with the

no.of.colours, exchange offers.

So, the dealers (MSK motors) have to increase more exchange mela and

exclusive offers to attract more customers and the Hero Company have to increase

no.of.colours in bikes.

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APPENDIX

A STUDY ON CONSUMERS ATTITUDE, PREFERENCE AND

SATISFACTION TOWARDS MSK MOTORS, ERODE.

QUESTIONNAIRE

1. Name:_________________________

2. Gender:

a) Male[ ] b) Female[ ]

3. Age:

a) Below 25years[ ] b) 26-30years[ ] c) 31-40years[ ] d) 41-50years[ ] e) above

50years[ ].

4. Educational Qualification:

a) Below HSC[ ] b) HSC/Diploma[ ] c) Under Graduate[ ] d) Post Graduate[ ]

5. Marital Status:

a) Married[ ] b) Un-Married[ ]

6. Profession:

a) Govt.Employee[ ] b) Self Employee[ ] c) Private[ ] d) Business[ ]e) Student[ ].

7. Income:

a) Less than 5000[ ] b) 5001-10000[ ] c) 10001-15000[ ] d) 15001-20000[ ] e)

Greater than 20000[ ]

8. Area:

a) Rural[ ] b) Semi-Urban[ ] c) Urban[ ].

9.Size of the family.

a) 1-3 members[ ] b) 4 members[ ] c) 5 members[ ] d) 6 members[ ] e) above

6 members[ ]

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10. Where did you get the information to purchase Hero?

a) Family / Relatives[ ] b) Friends[ ] c) Show room[ ] d) Magazines[ ]

e) Advertisement[ ] f) Internet [ ] g) Exhibition[ ].

11. Did you consider any other vehicle before purchasing Hero?

a) Yes[ ] b) No[ ]

12. If Yes, which one?

a) Bajaj[ ] b) Honda[ ] c) Yamaha[ ] d) TVS[ ] e) Royal Enfield[ ] f) Ma[ ] g)

Any other[ ]

13. Give your opinion to the following features of your Hero products.

S.NO Attribute Rank

1 Suspension

2 Long life

3 Performance

4 Price

5 Style

6 Driving Comfort

7 Colour

8 Mileage

9 Spares availability

10 Maintance

14. What makes you to purchase the two wheeler from MSK motors , Erode.

S.NO Particulars Rank

1 Location of showroom

2 Attractiveness of showroom

3 Quick delivery process

4 Model Availability

5 Easy Finance Arrangements

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15. What is your present mileage of your hero bike?

a) Below 40kms[ ] b) 41-50kms[ ] c) 51-60kms[ ] d) 61-70kms[ ] e) Above

70kms[ ]

16. What is your present maintance cost per annum?

a) Below Rs.1000 [] b) Rs.1001-2000[ ] c) Rs.2001-3000[ ] d) Above Rs.3000[ ]

17.How many time you service your Hero bike per annum?

a) 0-2times[ ] b) 3-5times[ ] c) 6-8times[ ] d) 9-11times[ ] e) 12 and above[ ].

18. How long you are maintaining this vehicle?

a) one year[ ] b) upto 2 years[ ] c) upto 3 years[ ] d) upto 4 years[ ] e) 5

years and above[ ]

19. How do you feel about the resale value of your Hero bike?

a) Highly Satisfied b) Satisfied c) Neutral d) Dissatisfied e) Highly Dissatisfied

20. Kindly rank the problem you faced with your vehicle?

(VG-Very Good, G-Good, F-Fair, P-Poor, VP-Very Poor)

S.No Problem V G G F P V P

1 Mileage

2 Brakes

3 Clutch

4 Engine sound

5 Starting trouble

6 Fork

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21. Kindly rank the problem you faced with your service station?

(V H-Very High, H-High, F-Fair, P-Poor, V P-Very Poor)

S.NO Factors V H H N P V P

1 Delivery time

2 Service Quality

3 Spare Parts cost

4 Spare Parts Availability

5 Spare Parts Quality

6 Attention of service Personal

7 Explanation about service

8 Service Data Intimation

9 Customer waiting Room Facility

10 Restroom Facility

22. Would you recommend your vehicle for future buyers?

a) Yes [ ] b) No [ ]

23. Provide your valuable suggestion about this Hero vehicle.

____________________________________________________________________

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BIBLIOGRAPHY

REFERENCES:

1) Jahanshahi, A. A., Hajizadeh Gashti, M. A., Mirdamadi, S. A., Nawaser,

K., &Sadeq Khaksar, S. M. (2011). Study the Effects of Customer Service and

Product Quality on Customer Satisfaction. International Journal of Humanities and

Social Science, 1(7), 253-260.

2) Jain, T. (2010). After Sale Service. Principle of Marketing (1 ed., p. 241).

New Delhi: V.K Global Publication Pvt. Ltd.

3) Kotler, P., Keller, K. L., Koshy, A., & Jha, M. (2009). Creation Customer

Value Satisfaction and loyalty. Marketing Management (13 ed., pp. 120-125). New

Delhi: Pearson Education.

4)Lohana, S. R., & Sharma, O. (2012). A study on Customer Satisfaction towards

Hero two wheelers in Nanded city. International Journal of Marketing and Management

Research, 3 (4), 118-138.

5) Rao, V. R., & Kumar, R. V. (2012). Customer Satisfaction towards MSK Motors.

South Asian Journal of Marketing and Management Research, 2(4), 127-150.

WEBSITES:

www.studymode.com

www.perference.about.com/consumer preference

www.researchgate.net/publication/satisfaction A review of the

literature

www.MSK group. in

www.HERO.com

www.wikipedia.org/wiki/MSK motors

www.company profile.about.com

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