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Page 1: 31427477 consumer-perception-towards

CHAPTER 1

INTRODUCTION

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1. INTRODUCTION

1.1 GENERAL INTRODUCTION TO THE STUDY

Two-Wheeler industry is one of the largest industries in the automobile sector of 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. 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.

Presently many international brands like Honda, Suzuki, etc. are competing with Indian

brands such as Hero Honda, Bajaj, and T V S, Kinetic etc. to capture Indian markets.

These aggressive marketing strategies have resulted in making the consumer the major

key for success in the industry. Each product offering is now designed to meet and

exceed the expectations of the consumer. But understanding consumer behaviour and

knowing consumers is never simple. And it is more difficult that to understand what a

consumer perceives about the product. Customers may say one thing but do another.

They may not be in touch with their deeper motivations. They may respond to influences

that change their minds at the last moment. Small companies such as a corner grocery

store and huge corporations stand to profit from understanding how and why their

consumers buy.

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.1.2 THEORETICAL BACKGROUND OF STUDY

1.2.1. Market

The term market may be considered as a convenient meeting place where buyers and

sellers gather together for the exchange of goods and services. Market means a group of

people having unmet wants, purchasing power to make their demand effective and the

will to spend their income to fulfill those wants. Today a market is equated with the total

demand.

The American marketing association defines a market, ‘as the aggregate demand of

potential buyers for a product or service’.

Under keen competition, a marketer wants to create or capture and retain the market i.e.

customer demand through an appropriate marketing mix offered to a target market. The

market offering i.e. supply must meet customer demand, which are unmet needs and

desires.

1.2.2. Marketing

Marketing is a comprehensive term and it includes all resources and set of activities

necessary to direct and facilitate the flow of goods and services form the producer to the

consumer through the process of distribution. Businessmen regards marketing as a

management function to plan promote and deliver products to the clients or customers.

Human efforts, finance and management constitute the primary resources in marketing.

We have twin activities, which are most significant in marketing:

1. Matching the product with demand i.e. customer needs and desires or the target

market.

2. The transfer of ownership and possession at every stage in the flow of goods from the

primary producer to the ultimate consumer.

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The American marketing association defines marketing as the process of planning and

executing the conception, pricing, promotion and distribution of ideas, goods and services

to create exchanges that satisfy individual and organizational objectives.

1.2.3. Marketing Management

Marketing management represents an important functional area of business management

efforts for the flow of goods and services from the producer to the consumers. It looks

after the marketing system of the enterprise. It has to plan and develop the product on the

basis of known customer demand.

Marketing management may be defined as, ‘a process of management of marketing

programs for accomplishing organizational goals and objectives’.

Marketing management has to build up appropriate marketing plan or marketing mix to

fulfill the set goals of the business. It has to formulate sound marketing policies and

programs. It looks after their implementation and control. It has to implement marketing

strategies, programs and campaigns. It must evaluate the effectiveness of each part of

marketing mix and introduce necessary modifications to remove discrepancies in the

actual execution of plans, policies, strategies, procedures and programs.

1.2.4. Marketing Mix

Marketing mix is the set of marketing tools the firm uses to pursue its marketing

objectives in the target market.

There are four elements or variables that make a marketing mix, they are:

1. Decisions on product or service.

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2. Decisions on promotion

3. Decisions on price

4. Decisions on distribution.

The four ingredients are closely interrelated. Under the systems approach the decision in

one area affects action in the other. Marketing mix decisions constitute a large part of

marketing management.

According to Philip Kotler the term marketing mix is, ‘the set of controllable variables

that the firm can use to influence the buyers response’. In the simplest manner, the basic

marketing mix is the blending of four inputs or sub mixes, which form the core of the

marketing system.

Product mix decision refers to decisions on product variety, quality, design, features,

brand image, packaging, sizes, services, warranties and returns.

Price mix decision refers to decisions on the product list price, discounts, allowances, and

payment period and credit terms available.

Place mix decision refers to decisions on the channels, coverage, assortments, locations,

inventory and transport of the market offering.

Promotion mix decisions refer to decisions on the products advertising, sales promotion,

sales force, public relations and direct marketing.

Together they form the four P’s of marketing.

1.2.5. Marketing Planning

A marketing plan lies down in writing the marketing objectives, programs and policies to

be adopted to achieve the set marketing objectives. Even before an integrated marketing

plan is prepared the company shall prepare functional plan for each component of

marketing mix. To have a sound marketing plan, every operation is to be examined and

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the problems are to be identified. The overall marketing plan should be linked to the

distribution channel of the company to have effective marketing operations.

The marketing planning covers the preparation of functional plans, integration of this

plan and the preparation of master marketing plan to serve the objective of the

organization. Marketing planning is bound to get a better hold of environmental factor.

1.2.6. Marketing Research

Marketing research is the systematic gathering, recording and analyzing of the data about

problems connected to the marketing of goods and services i.e. problems relating to

product, price, promotion and distribution of the 4p’s of the marketing mix.

Marketing research is concerned with all those factors, which have a direct impact upon

the marketing of products and services. Marketing research has grown along with the

expanded role of marketing as the focus for the business decision-making.

Need of marketing research

Marketing research is conducted for different purposes. They are:

1. To estimate the potential market for a new product.

2. To know the reactions of consumers to a product already existing in the market.

3. To find out the general marketing condition and tendencies.

4. To know the types of consumer buying and their buying motives.

5. To know the reactions of failure of a product already in the market.

6. To assess the strength and weakness of competitors.

1.2.7 Consumer

A person who purchase or has the capacity to purchase the goods of service often for sale

by the marketing firm in order to satisfy personal need and desires.

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1.2.8 Perception

Perception is the sensing of stimuli external to the individual organism the act or process

of comprehending the world in which the individual exists.

Perception has been defined by social psychologists as the “Complex process” by which

people select organize and interpret sensory stimulation in to a meaningful and coherent

picture of the work.

1.2.9 Attitude

Social psychologist defined attitude as an emotionalized predisposition to respond

positively or negatively to an object. Predisposition can be thought of as categories of

meaning stored in the memory of a person and are based on previous experience.

Predisposing the person to have in an specific manner towards a certain objects in the

environment.

1.2.9 Brand

A brand is a name, term, symbol, design or a combination of them which is intended to

identify the goods or services of one seller or group of sellers and to differentiate them

from those of competitors.

1.2.10. Consumer Behavior

The term consumer behavior can be defined, as, ‘the behavior that the consumer display

in searching for, purchasing, using and evaluating products, services and ideas, which

they expect, will satisfy their needs’. The study of consumer behavior enables marketers

to understand and predict consumer behavior in the market place; it also promotes

understanding of the role that consumption plays in the lives of individuals.

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Consumer behavior refers to all psychological social and physical behavior of potential

consumers as they become aware of, evaluate, purchase and consume and tell others

about products and services. It is the pattern of response of buyers to marketing offer of a

firm. It refers to the process as how consumers make their purchase decisions. It is

concerned with what, why, how much, when and from whom buyers make their

purchases of goods and services.

Model of consumer behavior

The starting point of understanding consumer behavior is the stimulus-response model.

Marketing and environmental stimuli enter the buyer’s consciousness. The buyer’s

characteristics and decision process lead to certain purchase decisions. The marketer’s

task is to understand what happens in the buyer’s consciousness between the arrival of

outside stimuli and the buyers purchase decisions.

1.2.11. Major Factors Influencing Consumer Behavior

Consumers buying behavior is influenced by cultural, social, personal and psychological

factors.

1. Cultural Factors

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

roles played by the buyers culture, subculture and social class are particularly

important.

o Culture

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Culture refers to that complex whole which includes in it knowledge, beliefs, art or

anything man acquires as a member of society.

o Subculture

Each culture consists of smaller subcultures that provide more specific identification

and socialization for their members. Sub cultures include nationalities, religions,

racial groups and geographic regions.

o Social Class

Virtually all-human societies exhibit social stratification. Stratification sometimes

takes the form of a caste system where the members of different castes are reared for

certain roles and cannot change their caste membership more frequently; stratification

takes the form of social class.

2. Social Factors

o Reference Groups

A persons reference groups consists of all the groups that have a direct or indirect

influence on the person’s attitudes or behavior.

o Family

The family is the most important consumer buying organization in the society and it

constitutes the most influential primary reference group.

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o Roles and statuses

A person participates in many groups, family, clubs, organizations etc. The person’s

position in each group can be defined in terms of role and status. A role consists of

the activities that a person is expected to perform. Each role carries a status.

3. Personal Factors

o Age and stage in the life cycle

People buy different goods and services over their lifetime. Taste in clothes, furniture

and recreation is all age related.

Consumption is shaped by the family life cycle. Marketers often choose life-cycle

groups as their target market.

o Occupation and economic circumstances

Occupation also influences a person’s consumption pattern.

Product choice is greatly affected by economic circumstances; spendable income,

savings and assets, debts, borrowing power and attitude toward spending versus

saving.

o Lifestyle

People from the same subculture, social class, and occupation may lead quite

different lifestyles. A lifestyle is the person’s pattern of living in the world expressed

in activities, interest’s ands opinions. Lifestyle portrays the world person interacting

with his or her environment.

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o Personality and self concept

Each person has a distinct personality that influences buying behavior. It is that

distinguishing psychological characteristics that lead to relatively consistent and

enduring responses to environment. Related to personality is self-concept or self

image. Marketers try to develop brand images that match target markets self image.

4. Psychological Factors

o Motivation

A person has many needs at a given time. A need becomes a motive when it is

aroused to a sufficient level of intensity. A motive is a need that is sufficiently

pressing to drive the person to act.

o Perception

Perception is the process by which an individual selects, organizes and interprets

information inputs to create a meaningful picture of the world. How a, motivated

person actually acts is influenced by his or her perceptions of the situation.

o Learning

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When people act they learn. Learning involves changes in an individual’s behavior

arising from experience. Learning theory teaches marketers that they can build up

demand for a product by associating it with strong drives, using motivating cues and

positive reinforcement.

o Beliefs and attitudes

Through doing and learning, people acquire beliefs and attitudes. These in turn

influence buying behavior. A belief is a descriptive thought that a person holds about

something. The beliefs make up product and brand images and people act on these

images.

An attitude is a person enduring favorable or unfavorable evaluations, emotion

feelings and action tendencies toward some object or idea. Thus a company would be

well advised to fit product into existing attitudes rather than try and change people’s

attitudes.

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CHAPTER 2

RESEARCH DESIGN

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2. RESEARCH DESIGN

2.1 Introduction

The two wheeler industry in India collectively produces 20 Lakh vehicles a year.

Some players have managed to cut through consumer resistance with innovation, pricing

and aggressive marketing. The competition level in the two wheeler industry is very high

now. Many brands are fighting in the market for maximum share. They have to bring out

a lot of differentiation among them. The major duty of the marketer is to know the

reasons for preferring particular motor bike by the consumers.

2.2 Review of Literature

The Customer Perception Report includes questions in four key areas,

Expectations, Purchase Decisions, Customer Service, and Future Purchases. So the

customer should be invited to participate in the survey. Setting realistic expectations

during the sales process is a vital component of making happy customers. How a

company sets and meets product and service expectations plays a pivotal role in

fashioning customer opinions. How a company meets or exceeds expectations is

measured in three important areas: product/service, support, and price. These three areas

will be used to factor a score for the Expectations category. The results of the three

questions will be used to factor an overall expectations perception score.

The Purchase Decision category gives us a better understanding of how the customer

perceives the purchase process. Two key areas for questions include an open ended

question on why they purchased and a ratings question on their experience. The rating

Question data will be used for the analysis of Purchase Decision category. The open

ended responses from the “Why” questions will be used for product strengths analysis.

The results of the purchase experience question will be used for the overall Purchase

perception analysis. Customer service is one of the most important differentiations a

company can have. For this report, customers will rate a company in three key areas:

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customer service, timeliness for problem resolution, and expertise. These three areas will

be used to factor a score for the Customer Service category.

Purpose o of Literature Review

Literature review is one of the prime parts of every project. The very basic purpose of

the literature review is to gain insight on the theoretical background of the research

problem. It helps the researcher to gain strong theoretical basis of the problem under

study and also help to explore whether any one has done research on the related issue.

That’s why literature review helps one to find out the path of problem solving. In this

regards the very basic purpose of the literature review in this dissertation is same as

mentioned

2.3 Statement of the Problem

Stepping down of Hero Honda’s position form a market leader to an ordinary

market survivor has posed and alarming condition before the company. The present study

would like to have an insight of consumer’s perception about the criteria of selecting the

bikes. Especially to figure out whether it is brand driven or quality driven.

2.4 Need of the study

Before five years Hero Honda was the market leader in motor bike industry in

India. But in now a day they are losing their grip in motor bike industry, none of their

bike except ‘Splendor’ became a success. And the competitors like Bajaj and TVS has

taken advantage of this. There is no doubt that the companies market share is falling

down. So this study will help to understand and identify what the consumer feels or

perceives about Hero Honda motor bikes. This will help the marketer to identify which

all are the factors that a consumer looks in to when he selects a particular bike. And also

explains how a consumer selects and interprets the qualities of bike that Hero Honda

offers.

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2.5 Objectives of the Study

1) To analyze consumer perception towards Hero Honda motor bikes

2) To get feed back on what consumer expects from Hero Honda

3) To analyze consumer perception towards services offered by Hero Honda and

performance of the motor cycle

2.6 Methodology

The research will be done through survey method. The collection of data will be

done through questionnaire, interview and related websites

The sample size taken for this research is 100 customers those who having Hero

Honda motor bikes.

The area of this survey consist of Bangalore city

The collection of data will be done with the help of a structured questionnaire. The

designing of questionnaire needs precision and classification of the subject, so that the

respondents can easily understand the question and can answer it sincerely and correctly.

2.7 Sources of Data

Primary data:-

Primary data consists of original information for the specific purpose at hand. It is

first hand information for the direct users of respondents. The tools used to collect the

data may vary and can be collected through various methods like questionnaire, personal

interview

Secondary data:-

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Secondary data is the data which is already been collected and assembled. This

data is available with the companies or firms and it can be collected from newspapers,

periodicals, magazines, websites etc.

Sample Design

Sample

The sample size taken for this research is 100 customers having Hero Honda motorbikes.

Sampling Technique

Convenient Sampling technique is used for this project.

Data Collection Tool

Questionnaires as the primary form of collecting data.

Statistical techniques

1. Bar Diagrams

2. Pie-Chart

Statistical tools

1. Statistical software like Microsoft Excel

2.8 Scope of the study:-

The study helps in having an awareness of customer satisfaction towards “Hero

Honda”. As the product had a good reputation in the market, this study will help to know

that how Hero Honda lost their grip in motor bike industry. It also helps us to increase

our practical knowledge towards marketing of a company.

2.9 Limitations of the study:-

a) In this study it is not possible to collect the opinion of all the customers owing

to personal constraints. So the assumptions are drawn on the basis of the

information given by the respondents.

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b) The study needs to be completed within a specified time of one month and in

certain restricted areas. So the findings cannot be generalized for the company

as a whole.

c) This study covers only a limited Hero Honda sector. So this study will not be

applicable for those areas.

2.10 CHAPTERIZATION

1. Introduction

2. Research Methodology

3. Profile of the Industry and Company

4. Analysis of the Data Collected

5. Findings, Suggestions and Conclusion

Bibliography

Appendix

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CHAPTER 3

PROFILE OF THE INDUSTRY AND

COMPANY

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3.1 INDUSTRY PROFILE

Historical Industry Development

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 the 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.

In 1948, Bajaj Auto began trading in imported Vespa scooters and three-wheelers.

Finally, in 1960, it set up a shop to manufacture them in technical collaboration with

Piaggio of Italy. The agreement expired in 1971.

In the initial stages, the scooter segment was dominated by API; it was later overtaken by

Bajaj Auto. Although various government and private enterprises entered the fray for

scooters, the only new player that has lasted till today is LML.

Under the regulated regime, foreign companies were not allowed to operate in India. It

was a complete seller market with the waiting period for getting a scooter from Bajaj

Auto being as high as 12 years.

The motorcycles segment was no different, with only three manufacturers viz Enfield,

Ideal Jawa and Escorts. While Enfield bullet was a four-stroke bike, Jawa and the

Rajdoot were two-stroke bikes. The motorcycle segment was initially dominated by

Enfield 350cc bikes and Escorts 175cc bike.

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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. With the availability of fuel efficient low

power bikes, demand swelled, resulting in Hero Honda - then the only producer of four

stroke bikes (100cc category), gaining a top slot.

The first Japanese motorcycles were introduced in the early eighties. TVS Suzuki and

Hero Honda brought in the first two-stroke and four-stroke engine motorcycles

respectively. These two players initially started with assembly of CKD kits, and later on

progressed to indigenous manufacturing. In the 90s the major growth for motorcycle

segment was brought in by Japanese motorcycles, which grew at a rate of nearly 25%

CAGR in the last five years.

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.

The entry of Kinetic Honda in mid-eighties with a variometric scooter helped in

providing ease of use to the scooter owners. This helped in inducing youngsters and

working women, towards buying scooters, who were earlier, inclined towards moped

purchases. In the 90s, this trend was reversed with the introduction of scooterettes. In line

with this, the scooter segment has consistently lost its part of the market share in the two-

wheeler market.

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.

Barring Hero Honda, all the major producers suffered from recession in FY93 and FY94.

Hero Honda showed a marginal decline in 1992.

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The reasons for recession in the sector were the incessant rise in fuel prices, high input

costs and reduced purchasing power due to significant rise in general price level and

credit crunch in consumer financing. Factors like increased production in 1992, due to

new entrants coupled with the recession in the industry resulted in company either

reporting losses or a fall in profits.

India is one of the very few countries manufacturing three-wheelers in the world. It is the

world's largest manufacturer and seller of three-wheelers. Bajaj Auto commands a

monopoly in the domestic market with a market share of above 80%, the rest is shared by

Bajaj Tempo, Greaves Ltd and Scooters India.

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.

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.

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

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outdated 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.

A Growth Perspective

The composition of the two-wheeler industry has witnessed sea changes in the post-

reform period. In 1991, the shares of scooters were about 50 per cent of the total 2-

wheeler demand in the Indian market. Motorcycle and moped had been experiencing

almost equal level of shares in the total number of two-wheelers. In 2003-04, the share of

motorcycles increased to 78 per cent of the total two-wheelers while the shares of

scooters and mopeds declined to the level of 16 and 6 per cent respectively. A clear

picture of the motorcycle segment's gaining importance during this period is exhibited by

the Figures 1, 2 and 3 depicting total sales, share and annual growth during the period

1993-94 through 2003-04.

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INDIAN TWO WHEELER INDUSTRY

The two-wheeler market has had a perceptible shift from a buyers market to a sellers

market with a variety of choices. Players are competing on various fronts such as pricing,

technology, product design, productivity, sales process, after sales service, marketing and

distribution. In the short term, market shares of individual manufacturers are sensitive to

capacity, product acceptance, pricing and competitive pressures from other

manufacturers.

All the four segments, Motor Cycles, Scooters, Scooterettes and Mopeds have witnessed

capacity additions in the last one year and it will continue in the upcoming period as and

when the foreign companies opens a local subsidiary. Over this period as and when the

foreign companies’ opens a local subsidiary. Over this period, only the Motor Cycle

segment is expected witness higher demand vise-versa supply, while the Scooters,

Scooterettes and Mopeds supply will outstrip demand.

As incomes grew and people felt the need to own a private means of transport, sale of

two-wheelers raised. Penetration of the two-wheelers is expected to increase to

approximately to more than 25%by 2005.

The Motor Cycle segment will continue to lead the demand for two-wheelers in the

coming years. Motor Cycle sales are expected to increase by 20% as compared to 1%

growth in the Scooter market and 3% by Scooterttes and Moped sales respectively for the

next two-years.

The Indian two and three wheeler industry produced and sold about 4.5million units in

2003-2004. Like any other Indian Industry, the policy environment guided and controlled

this segment of the industry as well. Licensing norms ruled the day till mid 80’s. Access

to foreign technology inputs and foreign investment were strictly government controlled.

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Since mid 80’s, the Indian automobile industry was administered select doses of

liberalization. Foreign collaborations with equity up to 26%, fresh licenses and

conditional CKD imports, etc. were allowed. This liberalization coupled with the Indian

market potential attracted world majors like Honda, Yamaha, Suzuki and Piaggio setup

their Joint Ventures during mid 80’s in India. From 1991 onwards, the industry was de-

licensed. Automatic approvals for foreign equity up to 51% and equity participation in

excess of 51% with specific approvals entered the rulebook. Honda converted one of its

Joint Ventures to a 51% subsidiary

On regulation front, Central Motor Vehicles Regulations mandates the safety, emissions

and other norms. Vehicular emissions standards came into effect first in 1991 and were

tightened further in 1996. For the two and three wheeler these are among the tightest in

the world. Further tightening has taken effect from April 2000.

The four-stroke Motor Cycle has added new dimensions to the two-wheeler segment. The

major players in the Motor Cycle market are Bajaj Auto Ltd. with its Pulsar DTS-i, Hero

Honda Co. with its Hero Honda Karizma. Competition is intense in all segments of the

two-wheeler industry with fuel efficiency and price being crucial considerations for

success. In the recent past, a manufacturer’s ability at product innovation and opening

new market niches have also been crucial for the growth of the industry. Bajaj Auto Ltd.

entered the Motor Cycle segment in the mid 80’s. Since then it has won market shares

increasing indigenization and by opening new market niches for their products. Bajaj has

emphasized its higher safety and superior quality. Fuel efficiency allowed Hero Honda to

dominate the 100cc Motor Cycle segment for most of the last eight years. Bajaj Auto Ltd.

has gained considerable market share in this segment since it also launched a four-stroke

Motor Cycle two years ago. The 100-cc segment is further power (dominated by Bajaj

Pulsar DTS-i), fuel economy and sub-segments. The semi-urban and rural markets will

increase in importance in the future and all manufacturers’ plan to launch heavier bikes

with stronger suspensions.

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The relatively affordable and stable prices of Bajaj Motor Cycles backed by flexible loan

options have caused other Motor Cycles to continuously lose market share to them in the

previous few years.

Industry Structure

The Indian two-wheelers Industry can be broadly classified as scooters, motorcycles and

mopeds. The domestic two wheeler sales of 3.4mn in FY99 are constituted by these

segments as shown below.

Table. 3.1

Table showing the Industry Structure

Year Scooter Motorcycle Moped Total Growth %

FY92 769,955 428,118 408,022 1,606,095 -

FY93 709,725 379,060 414,567 1,503,352 (6.40)

FY94 840,173 472,582 457,471 1,770,226 17.75

FY95 1,033,524 652,012 523,700 2,209,236 24.80

FY96 1,223,425 809,527 627,079 2,660,031 20.41

FY97 1,301,051 978,682 683,756 2,963,489 11.41

FY98 1,262,699 1,131,314 648,842 3,042,855 2.68

FY991,325,868 1,395,657 681,902 3,403,427 11.85

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FY20001,253,969 1,796,734 726,075 3,776,778 10.97

Source: SIAM

In the last six years, the domestic two-wheeler industry has seen structural changes. This

can be seen from the change in composition of two-wheeler sales, where the motorcycles

have consistently gained market share from the scooter and moped segments to corner a

share of 41% of total two-wheeler sales. This trend is expected to continue in the next

two years till the four-stroke scooters make their presence felt in the segment. The table

below gives an idea about the strides made by the motorcycle segment in the last six

years. 

Table 3.2

Table showing Motor Cycle Segment from 1993 to 2000

(In %) Scooter Motorcycle Moped

FY93 47.2 25.2 27.6

FY94 47.5 26.7 25.8

FY95 46.8 29.5 23.7

FY96 46.0 30.4 23.6

FY97 43.9 33.0 23.1

FY98 41.5 37.2 21.3

FY99 39.0 41.0 20.0

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FY200033.2 47.6 19.2

Source: SIAM

The scooter market is dominated by 150cc vehicles from Bajaj Auto and LML, with the

rest being served by 100cc variometric scooters from Kinetic Honda.

For scooters, northern India is the major market contributing nearly 46% of the total

scooter sales. Western and southern India take up second and third position with 27.5%

and 15.7% respectively.

For our calculations we consider TVS Scooty sales as part of scooter sales as given by

Society of Indian Automobile Manufacturers (SIAM).

The Indian motorcycle industry can be broadly categorized in to Indian motorcycles and

Indo-Japanese motorcycles. The Indo-Japanese motorcycle segment is dominated by

Hero group, Bajaj and Escorts in collaboration with Japanese vehicle manufacturers

Honda, Kawasaki and Yamaha respectively. The Indian motorcycles segment is

dominated by Bajaj (M80), Escorts and Royal Enfield.

In motorcycles sales, western region leads with a market share of 40% of the total

motorcycle sales. South and north regions come second and third with a market share of

27.5% and 17.4% of total motorcycle sales respectively.

For mopeds southern and western regions of India are the major contributors with nearly

52% and 28% of the over all moped sales. Looking at the population of moped sales in

south it appears that the sale of mopeds has reached stagnation.

Western and southern region lead in three-wheeler sales with a contribution of 42% and

35.8% of total three-wheeler sales respectively.

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In terms of two-wheeler vehicle population, Maharashtra stands first with a population of

2.96mn vehicles and Gujarat stands second with 2.64mn vehicles as on March 31st 1997.

Tamil Nadu is the third largest state with 2.45mn two-wheeler population.

In terms of three-wheeler vehicle population Maharashtra stands first with a population of

0.39mn and Gujarat in the second place with 0.22mn as on March 31st 1997.

Penetration of Two-Wheelers

On a base of around 28mn vehicles on Indian roads and around 175mn households, there

were only 160 motorized two-wheelers per thousand households in FY98. This compares

poorly with countries like Thailand where it is around 600 per thousand households. Also

with a household size of 5.5 persons and more than one wage earner in about 60% of the

households, the potential for a second vehicle demand is also good.The NCAER in its

latest report on market demographics has clearly indicated that post-liberalization (ie

FY92 to FY96) Indian households have graduated to higher income groups as can

be seen in the table below.

Table 3.3

Table showing Distribution of Households In %age

Annual incomeIncome

groupFY86 FY96

(Rs at FY96

prices)

  Urban Rural Total Urban Rural Total

<=25,000 Low 42.1 73.6 65.2 27.9 57.2 48.9

25,001 - 50,000 Low Middle 35.8 21.4 25.2 34.9 29.0 30.7

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50,001 - 77,000 Middle 15.2 4.0 6.9 20.3 8.6 11.9

77,001 - 106,000Upper

Middle3.9 0.7 1.5 9.6 3.1 5.0

> 106,000 High 3.1 0.3 1.1 7.3 2.0 3.5

Table 3.4

Table showing Growth in Income Groups (%) In Pre and Post Reform Period

Income group FY86 to FY89 FY93 to FY96

Urban Rural Total Urban Rural Total

Low 0.93 -0.20 -0.01 -7.03 -3.03 -3.72

Low Middle 3.34 4.91 4.33 5.46 10.20 8.59

Middle 8.53 17.82 12.72 11.96 3.11 7.01

Upper Middle 18.52 16.39 17.83 11.90 12.25 12.06

High 9.57 13.90 10.65 18.22 15.68 17.14

Total 4.14 2.04 2.61 3.50 1.44 2.01

Source: NCAER

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As seen from the above tables, the number of households in the low income group has

fallen since FY86 and has been more pronounced in the post-reform period. On the other

hand, the numbers of households in the middle, upper middle and high income groups,

which form the consumer base for two wheelers, have increased. Their share of the total

number of households has increased from 10.6% in FY88 to 20.5% in FY96. The rising

income profile has, however, been more pronounced in the urban areas as average annual

growth in industry has surpassed that of agriculture in the period FY93 to FY96.  

3.2 COMPANY PROFILE

Hero Honda Motors Limited was established in 1984, as a joint venture between India's

Hero Group (world's largest bicycle manufacturers) and Japan's Honda Motor Company.

In 1985 production began with the launch of its first motorcycle, the CD100, which gave

80 km to the liter. In 1987 the engine plant was started and in 1989 the Company

produced its 3,00,000th motorcycle. In 2001 Hero Honda manufactured its 50,00,000th

motorbike. Hero Honda has a reputation of being the most fuel-efficient and the world's

single largest two wheeler Company. Shri Brijmohan Lall Munjal is the chairman and

managing director of this Company. Both the manufacturing plants are located in

Haryana, one at Dharuhera (district Rewari) and the other in Gurgaon.

The Gurgaon plant is situated on the Delhi-Jaipur Highway, in Sector 33. The Dharuhera

plant, set up in 1987 in the Dharuhera Industrial Area, is spread over an area of 140 acres.

The Dharuhera plant manufactures CD100, CD100ss and CD Dawn motorcycles while

the Gurgaon plant manufactures the other models. Splendor is manufactured at both the

plants. With both these plants running at full capacity, Hero Honda is looking for a

suitable location to set up their third manufacturing unit.

When Hero Cycles and Honda Motor Company of Japan inked their joint venture in India

in April 1984, few could have imagined that the two would go on to create history and

become the subject of a case study at business schools, internationally.

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That's the Hero Honda saga for you. In a little over two decades, the world's largest

manufacturer of bicycles and the global leader in motorcycles have created not only the

world's single largest motorcycle company but also the most endearing and successful

joint venture for Honda Motor Company worldwide. The company has sold over 15

million motorcycles and has consistently grown at double digits since its inception and

today, every second motorcycle sold in the country is a Hero Honda.

In two decades, Hero Honda has built two world-class manufacturing facilities at

Dharuhera and Gurgaon in Haryana that now churn out over 3 million bikes per year.In

this period, Hero Honda has set up over 2400 customer touch points, comprising a mix of

dealers, service centers and stockiest across rural and urban India. Today, Hero Honda is

an amalgam of winning networks and relationships with internal and external

stakeholders, including Investors, Dealers, Vendors and Employees. These relationships

have helped the company hold on to the mantle of World No.1 for years in succession.

What makes Hero Honda well, Hero Honda, is a synergy. The two partners, leaders in

their respective domains, have been able to consistently draw on each other's strengths.

The Hero Group's deep domain knowledge of the Indian market and its supplier network

has meshed with Honda's mastery over four-stroke engine technology to create modern

and fuel-efficient machines at affordable prices for India 's 250-300 million strong middle

class.

Progressively through the 1980s, the 1990s and now in the 2000s, Hero Honda has relied

on 3 R's-- Reach, Research and Reliability as its basic building blocks. Using feedback

from the market, a fully-equipped R&D center has consistently created best practices in

designing, testing and harmonization, besides placing strong emphasis on road safety and

ride quality. This emphasis has helped Hero Honda build products that are ahead of their

time. In the 1980s, for example, Hero Honda became the first company in India to prove

that it was possible to drive a vehicle without polluting the roads. The company

introduced new generation motorcycles that set industry benchmarks for fuel thrift and

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low emission. A legendary 'Fill it - Shut it - Forget it' campaign captured the imagination

of commuters across

The Legend of Hero Honda:-

What started out as a Joint Venture between Hero Group, the world’s largest bicycle

manufacturers and the Honda Motor Company of Japan, has today become the World’s

single largest two wheeler Company. Coming into existence on January 19,1984. Hero

Honda Motors Limited gave India nothing less than a revolution on two-wheels made

even more famous by the ‘fill it – shut it – forget it’ campaign. Driven by the trust of

over 5 million customers, the HERO HONDA product range today commands a market

share of 48% making it a giant in the industry. Add to that technological excellence, an

expansive dealer network, and reliable after sales service, and you have one of the most

customer-friendly companies.

This is proved by the company’s sales over the years:

1985-86 43,000 units

1989-90 96,200 units

1998-99 5,30,600 units

1999-00 7, 61,210 units

2000-01 10,29,555 units

2001-02 14,25,195 units

2002-03 16,77,537 units

2003-04 1.9 million units

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Key Policies of Hero Honda

Environment Policy:

Integrate environmental attributes and cleaner production in all business processes

and practices with specific consideration to substitution of hazardous chemicals,

where viable and strengthen the greening of supply chain.

Continue product innovations to improve environmental compatibility.

Comply with all applicable environmental legislation and also controlling our

environmental discharges through the principles of "alara" (as low as reasonably

achievable).

Institutionalise resource conservation, in particular, in the areas of oil, water,

electrical energy, paints and chemicals

Quality Policy:

Innovation in products processes and services.

Continuous improvement in total quality management systems.

Teamwork and responsibility

Safety Policy:

Integrating safety and health matters in all activities.

Ensuring compliance with all applicable legislative requirements.

Empowering employees to ensure safety in their respective work places.

Promoting safety and health awareness amongst employees, suppliers and

contractors.

Continuous improvements in safety performance through precautions besides

participation and training of employees.

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Products:

Pleasure - Scooter with 102 cc air-cooled four-stroke engine.

Karizma - Motorbike with 223 cc four-stroke air-cooled engine.

Super Splendor - Motorcycle with 125 cc four-stroke air cooled engine

Splendor + - Motorbike with 97 cc four stroke air cooled engine.

Glamour - Motorbike with 125 cc (9 bhp) "quantum core" engine

Passion + - Motorbike with 97 cc four stroke air-cooled engine.

CD Deluxe - Motorbike with 97 cc four-stroke air cooled engine.

CD 100 SS - Motorbike with 97 cc four-stroke air-cooled engine.

CD Dawn - Motorcycle with 97 cc four-stroke air-cooled engine.

Achiever - Motorcycle with 149 cc four-stroke air-cooled engine.

CBZ Xtreme – Motorcycle with 150 cc four-stroke air-cooled engine.

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CHAPTER 4

ANALYSIS AND INTERPRETATION OF

DATA

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4. 1 ANALYSIS OF DATA COLLECTED

Consumer Perception towards HERO HONDA Motor Bikes in

Bangalore City

Statement of Problem

Stepping down of Hero Honda’s position form a market leader to an ordinary market

survivor has posed and alarming condition before the company. The present study would

like to have an insight of consumer’s perception about the criteria of selecting the bikes.

Especially to figure out whether it is brand driven or quality driven

Before five years Hero Honda was the market leader in motor bike industry in India. But

in now a day they are losing their grip in motor bike industry, none of their bike except

‘Splendor’ became a success. And the competitors like Bajaj and TVS has taken

advantage of this. There is no doubt that the companies market share is falling down. So

this study will help to understand and identify what the consumer feels or perceives

about Hero Honda motor bikes. This will help the marketer to identify which all are the

factors that a consumer looks in to when he selects a particular bike. And also explains

how a consumer selects and interprets the qualities of bike that Hero Honda offers.

Objectives of the Study

1. To analyze consumer perception towards Hero Honda motor bikes

2. To get feed back on what consumer expects from Hero Honda

3. To analyze consumer perception towards services offered by Hero Honda and

performance of the motor cycle

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Methodology

The research will be done through survey method. The collection of data will be

done through questionnaire, interview and related websites

The sample size for this research is 100 customers those who having Hero Honda

motor bikes.

The area of this survey consist of Bangalore city

The collection of data will be done with the help of a structured questionnaire. The

designing of questionnaire needs precision and classification of the subject, so that the

respondents can easily understand the question and can answer it sincerely and correctly.

Sources of Data

Primary data:-

Primary data consists of original information for the specific purpose at hand. It is

first hand information for the direct users of respondents. The tools used to collect the

data may vary depend can be collected through various methods like questionnaire, direct

personal interview

Secondary data:-

Secondary data is the data which is already been collected and assembled. This

data is available with the companies or firms and it can be collected from newspapers,

periodicals, magazines, websites etc.

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Analysis of the Data Collected

4.1.1 Gender of the Respondents

Table No 4. 1

GENDER NO OF RESPONDENTS % OF RESPONDENTS

MALE 96 96%

FEMALE 4 4%

TOTAL 100 100%

Source: survey data

Interpretation:

The above table showing the sex of the respondents those who participated

in the survey

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Chart No 4.1

Analysis:

Above 90% of respondents of the survey were male customers and there were

only a few female respondents.

Gender of Respondents

MaleFemale

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4.1.2 Age of the Respondents

Table No 4. 2

AGE NO. OF RESPONDENTS % OF RESPONDENTS

18-25

42 42%

25-40

34 34%

40-55

19 19%

ABOVE 55

5 5%

TOTAL

100 100%

Source: survey data

Interpretation:

The above table showing the age categories of the Hero Honda customers who

participated in the survey

.

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Chart No 4.2

0

5

10

15

20

25

30

35

40

45

No of Respondents

18-25 25-40 40-55 >55

Age

Age of the respondents

Analysis:

Above 40% of the participants of the survey were between18-25 of age and second

most participants were between25-40. There were only 5 participants responded above 55

age group

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4.1.3 Occupation of the Respondents

Table No 4. 3

Occupation No of Respondents % of Respondents

Business 18 18%

Professional 14 14%

Employee 20 20%

Student 38 38%

Others 10 10%

Total 100 100%

Source: survey data

Interpretation:

The above table showing the occupation of the Hero Honda owners those who

participated in the survey and their percentage wise analysis

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Chart No 4.3

Occupation of the Respodents

0

5

10

15

20

25

30

35

40

Business Pfsnl Emplye Stdnt Others

Occupation

No

of

Res

po

nd

ents

Analysis:

The majority of the Hero Honda customers participated in the survey were

students. There were 38% and the 20% employees who are Hero Honda owners.

And the Professionals and Businessmen constitute only 32%.

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4.1.4 SOURCES OF AWARENESS OF HERO HONDA

Table No 4. 4

SOURCE NO. OF RESPONDENTS % OF

RESPONDENTS

ADVERTISEMENT 38 38%

FRIENDS 24 24%

RELATIVES 10 10%

OTHERS 28 28%

TOTAL 100 100%

Source: survey data

INTERPRETATION: -

The above table tells about which of the source is more effective in spreading the

awareness about Hero Honda bikes

Chart No 4.4

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Analysis:

This statistic reveals that greater part of respondents have got the information from T.V

and advertisement other than friends & relatives which plays an important role in

influencing them to opt for Hero Honda.

This reveals that Hero Honda is able to influence its consumer base to tell other about

their product.

4.1.5 SATISFACTION ABOUT PRODUCT BRIEFING DONE BY SALES

EXECUTIVE

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Table No 4. 5

SATISFACTION NO. OF

RESPONDENTS

% OF

RESPONDENTS

YES 92 92%

NO 08 08%

TOTAL 100 100%

Source: survey data

INTERPRETATION: -

This table showing the satisfaction level of customer about the product briefing

done by the sales executive

Chart No 4.5

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Analysis:

The statistic reveals that the product profile presented by the Salesman of Hero Honda is

truly trustworthy with a majority of 92% of respondents showing satisfaction towards

products briefing.

4.1.6 TEST RIDE PROCESS

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Table No 4. 6

TEST RIDE NO. OF RESPONDENTS % OF RESPONDENT

YES 100 100%

SNO 0 0%

TOTAL 100 100%

Source: survey data.

INTERPRETATION: -

This table showing no. of respondents took a test drive of Hero Honda bike

Chart No 4.6

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Test Ride Process

0

20

40

60

80

100

120

Yes No

Test Ride

No

. o

f R

es

po

nd

en

ts

Analysis:

The statistic reveals that almost all the customers are offered for a test drive and were

satisfied with the process.

The test ride is offered within the limits of the showroom and a service employee is

sent with the customer.

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4.1.7 PERCEPTION TOWARDS SALES PROCESS

Table No 4. 7

PERCEPTION NO. OF RESPONDENTS % OF RESPONDENTS

VERY GOOD 33 33%

GOOD 56 56%

FAIR 11 11%

POOR 00 00%

TOTAL 100 100%

Source: survey data.

Interpretation: -

This table indicates perception level of Hero Honda customers about the over all

sales process of Hero Honda bikes providing by the manufacturer through their dealers

Chart No 4.7

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Analysis:

The study reveals that the consumer perceives the dealer’s sales process as good and

very good with the percentage being 56% and 33% respectively.

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4.1.8 SATISFACTION ABOUT AFTER SALES SERVICE

Table No 4.8

Source: survey data

SATISFIED NO. OF RESPONDENTS % OF RESPONDENTS

YES 93 93%

NO 07 07%

TOTAL 100 100%

Interpretation: -

This table shows the satisfaction level of customers about the after sales services

provided by Hero Honda

Chart No 4.8

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Analysis:

The statistic indicates that the greater part of respondent are satisfied with the

sales service which falls

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4.1.9 PERCEPTION OF RESPONDENTS REGARDING

COMPLAINT RECOGNITION

Table No 4.9

PERCEPTION NO. OF RESPONDENTS % OF RESPONDENTS

VERYGOOD 36 36%

GOOD 53 53%

FAIR 11 11%

POOR 0 0%

TOTAL 100 100%

Source: survey data.

Interpretation: -

The table reveals that the complaints of consumer after sales were duly attended by the

sales force. This shall be of competitive tool to be used to build up the brand image.

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Chart No 4.9

Perception of Respondents regarding complaint recognition

Very Good

Good

Fair

Poor

Analysis:

More than 50% of the respondents said that the complaint recognition of Hero

Honda is good. And nobody claimed that their complaint recognition is poor. This

indicates that Hero Honda is providing their customers good services.

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4.1.10 PERCEPTION TOWARDS MECHANICS OF HERO HONDA

Table No 4.10

EXPERT

MECHANICS

NO.OF

RESPONDENTS

% OF RESPONDENTS

YES 78 78%

NO 22 22%

TOTAL 100 100%

Source: survey data

Interpretation:

This table shows that whether Hero Honda have their own well trained and

expert mechanics those who can meet the needs and expectation of the consumer or

not

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Chart No 4.10

Expert Mechanics

0

10

20

30

40

50

60

70

80

90

Yes No

Response

No

of

Res

po

nd

ents

Analysis:

Majority of the consumers felt that Hero Honda having good and

well trained mechanics to provide better service to the customers as per their

expectation.

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4.1.11 PERCEPTIOIN TOWARDS THE ATTRIBUTES OF HERO

HONDA

Table No 4.11

ATTRIBUTES NO OF RESPONDENTS % OF RESPONDENTS

STYLE 13 13%

MILEAGE 32 32%

PERFORMANCE 24 24%

COMFORT 11 11%

PRICE 4 4%

BRAND NAME 16 16%

TOTAL 100 100%

Source: survey data

Interpretation:

The above table showing that the attribute of Hero Honda which the customers ranked

most. This indicates that which of the attribute the consumer likes most in a Hero Honda

motor bike

Chart No 4.11

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Perception towards Attributes

0

5

10

15

20

25

30

35

Style Mileage Perfmns Comfort Price Brd nme

Attributes

No

of

Res

po

nd

ents

Analysis:

Most of the consumers those who participated in the survey ranked mileage as

most attractive attribute of Hero Honda. And the second most attribute which got

ranked first is the performance of Hero Honda bike. The least attractive attribute

is price.

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4.1.12 CONSUMER PERCEPTION TOWARDS PERFORMANCE

OF HERO HONDA

Table No 4. 12

OPINION NO. OF RESPONDENTS % OF RESPONDENTS

EXCELLENT 27 27%

GOOD 56 56%

SATISFACTORY 17 17%

POOR 0 0%

TOTAL 100 100%

Source: survey data.

INTERPRETATION: -

This table indicates consumer’s satisfaction towards the performance of the

Hero Honda motor bikes

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Chart No 4.12

Perception towards Performance

Excellent

Good

Satsfctry

Poor

Analysis:

As per the above table the respondents feel that Hero Honda’s performance is good

revealed by their personal experience of using the bike. This shows that Hero Honda has

very good market potential through its performance

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4.1.13 AVAILABILITY OF SPARE PARTS OF THE HERO HONDA

Table No 4.13

AVAILABILITY NO OF RESPONDENTS % OF RESPONDENTS

EASILY AVAILABLE 100 100%

HARDLY AVAILABLE 0 0%

NOT AVAILABLE 0 0%

TOTAL 100 100%

Source: survey data

Interpretation:

The above table showing the availability of the Hero Honda spares parts

Chart No 4.13

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Availablity of Spare Parts

Esly avail

Hdly avail

Not avail

Analysis:

The Hero Honda customers are satisfied about the availability of its spare parts. All

the respondents said that the Hero Honda spares are easily available.

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4.1.14 CONSUMER’S PREFERENCE IN SERVICING THE BIKE

Table No 4.14

SERVICE PREFERENCE NO OF RESPONDENTS % OF RESPONDENTS

SERVICE CENTRE 47 47%

AUTHORISED DEALER 34 34%

LOCAL MECHANIC 19 19%

TOTAL 100 100%

Interpretation:

This is about where would the consumer prefers when it comes to the servicing

bike. Whether they choose service centre or authorized dealer. Other than this would they

prefer local mechanics?

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Chart No 4.14

0

5

10

15

20

25

30

35

40

45

50

No of Respondents

Ser cntr Auth dlr Lcl mech

Preference

Service preference

Analysis:

Majority of the consumers prefers service centre for servicing their bike. And the

second most preference is authorized dealers apart from this only a small no. of

consumers prefers local mechanics.

4.1.15 FACTORS INFLUENCED IN PURCHASE DECISION

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Table No 4. 15

FACTORS NO. OF RESPONDENTS % OF RESPONDENTS

POWER 13 13%

STYLE 17 17%

PRICE REDUCTION 26 26%

MORE COLOURS 9 9%

FREE ACCESSORIES 11 11%

FUEL EFFICIENCY

TOTAL

24

100

24%

100%

Source: survey data.

Interpretation: -

This is about the factor which influenced the customer to take his decision to

buy a Hero Honda bike.

.

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Chart No 4.15

Factors influenced in Purchase Decision

Power

Style

Prce rdtn

Mre clrs

Fre acsrs

Fuel efncy

Analysis:

From the study its revealed that the price cut from Hero Honda influenced customer

most for buying the bike and the percentage being 26%. This is followed by an influence

of fuel efficiency and style with 24% and 17% of the respondents

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4.1.16 CONSUMERS PREFERENCE FOR HERO HONDA BRANDS

Table No 4. 16

BRANDS NO OF RESPONDENTS % OF RESPONDENTS

SPLENDOR+ 20 20%

PASSION+ 16 16%

CD-DAWN 7 7%

CBZ 12 12%

CBZ EXTREME 5 5%

AMBITION 2 2%

KARIZMA 10 10%

SUPER SPLENDOR 18 18%

GLAMOUR 6 6%

PLEASURE 4 4%

TOTAL 100 100%

Source: survey data

Interpretation:

This table showing consumers preference towards Hero Honda brands

Chart No 4.16

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Consumers preference for Hero Honda Brands

0

5

10

15

20

25

Splnd

r+

Passio

n+

CD-Daw

nCBZ

CBZ Ext

m

Ambit

ion

Karizm

a

Supr S

pldr

Glam

our

Pleas

ure

Brands

No

of

Cu

sto

mer

s

Analysis:

The most preferred two brands of Hero Honda are Splendor and Super

Splendor. The other brands like Passion, Karizma and CBZ extreme is also preferred by

the customers. But the fact is that the most of the Hero Honda customers are Splendor+

owners.

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4.1.17 CONSUMERS PREFERENCE FOR ALTERNATIVE BRAND

OF TWO WHEELER

Table No 4. 17

BRANDS NO OF RESPONDENTS %OF RESPONDENTS

TVS 22 22%

BAJAJ 48 48%

YAMAHA 14 14%

HONDA 12 12%

SUZUKI 4 4%

OTHERS 0 0%

TOTAL 100 100%

Source: survey data

Interpretation:

This table indicates that which brand consumer prefer most other than Hero

Honda.

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Chart No 4.17

Consumers Preference for other two wheeler Brands

0

10

20

30

40

50

60

TVS Bajaj Yamaha Honda Suzuki Others

Brands

No

of

resp

on

den

ts

Analysis:

The consumers prefer Bajaj most other than Hero Honda in the two wheeler

industry. The 48% of the Hero Honda customers prefer Bajaj other than Hero Honda

that’s why Bajaj becoming a big threat to Hero Honda. And also there is significant

increase in the preference of TVS, Yamaha, Honda and even in Suzuki as well.

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4.2 ANALYSIS OF THE OBJECTIVE OF THE STUDY AND QUESTIONS

ASKED

Table No 4. 18

OBJECTIVE OF THE STUDY QUESTIONS

1. TO ANALYSE CONSUMER

PERCEPTION TOWARDS HERO

HONDA BIKES

a. HOW DID YOU COME TO

KNOW THE NAME HERO

HONDA

b. WHAT IS YOUR OPINION

ABOUT OVER ALL SALES

PROCESS OF HERO HONDA

c. RANK THE ATTRIBUTES OF

HERO HONDA AS PER YOUR

PREFERENCE

d. HOW IS THE AVAILABILITY

OF THE SPARE PARTS OF

HERO HONDA

e. RANK THE COMPANIES AS

PER YOUR PREFERENCE

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2. TO GET FEED BACK ON WHAT

CONSUMER EXPECTS FROM HERO

HONDA

a. DO THEY HAVE EXPERT

MECHANIC WHO CAN CATER

THE NEEDS OF THE

CUSTOMER

b. RANK THE FACTORS WHICH

HAVE INFLUENCED YOU

PURCHASE OF HERO HONDA

BIKE

c. WHICH MODEL DID YOU BUY

d. RANK THE ATTRIBUTES OF

HERO HONDA AS PER YOUR

PREFERENCE

3. TO ANALYSE CONSUMER

PERCEPTION TOWARDS SERVICE

OFFERED BY HERO HONDA AND THE

PERFORMANCE OF THE BIKE

a. ARE YOU SATISFIED WITH THE

PRODUCT BRIEFING DONE BY THE

SALES EXECUTIVE

b. HAVE YOU GONE FOR TEST RIDE

c. ARE YOU SATISFIED WITH THE

AFTER SALE SERVICES

d. WHAT IS YOUR OPINION ABOUT

THE PERFORMANCE OF HERO

HONDA BIKE

e. WHERE WOULD YOU PREFER TO

SERVICE THE BIKE

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OTHER QUESTIONS RELEVANCE

1. AGE

2. SEX

3. OCCUPATION

1. THIS IS TO ANALYSE THAT

WHICH AGE CATEGORY IS

THE MAIN CUSTOMERS OF

HERO HONDA

2. THIS HELPS TO ANALYSE

THAT WHO IS MAIN

CUSTOMER OF HERO HONDA

WHETHER MEN OR WOMEN

3. THIS QUESTION REVEALS

THAT WHO ARE THE MAIN

HERO HONDA OWNERS SUCH

AS EMPLYEES, BUSINESS

MEN, STUDENTS ETC.

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CHAPTER 5

FINDINGS, SUGGESTIONS AND

CONCLUSION

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5.1 FINDINGS

The old prophecy that once a customer is a customer has become a myth in the

present day competitive world. Brand image is no longer works a magic with the

consumer. So to hold the customer to the brand and attract new consumers the company

must produce products that are efficient and competent along with its marketing activities

that help in sales of the product.

After analyzing the response of the consumer interviewing through questionnaire and

observation the following were found in the study.

1. Hero Honda motor cycles were the market leader in the Two Wheeler

segment. But they are losing their grip in the market. Even the 48% Hero

Honda customers said that if they get a second chance they would prefer

Bajaj.

2. The Brand Name of Hero Honda is still there in the market and in the

minds of the customer.

3. There are only a few women Hero Honda customers and they own Hero

Honda Pleasure.

4. Now days the main Hero Honda customers are students between 18-25

years of age and they like the bike because of its mileage.

5. Advertisements of Hero Honda bikes are very effective. Introduction of

Hrithik Roshan helps Hero Honda a lot.

6. Majority of the customers got the opportunity of test ride and they are

satisfied with the product briefing by the Hero Honda sales executive.

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7. The most demanded Hero Honda Brands are Splendor+ and Super

Splendor. Major part of the users of this brand is employees next are

students.

8. Most of the Hero Honda customers have satisfied with the after sale

service and servicing of bike.

9. From analysis and interpretation it is found that Hero Honda is mainly

chosen for its mileage performance and brand image.

10. Majority of the customers have satisfied with the performance of Hero

Honda.

11. HERO HONDA is the only two wheeler company in India which has

given these vast ranges of motorcycles to the market, obtained form

general observation during the study

12. HERO HONDA has plans of letting some more new models in future such

as CBZ Extreme .As per the information it was found that splendor is the

world’s largest selling bike.

13. Majority of the customers were aware of HERO HONDA through T.V. &

newspapers advertisement. Other than this there friends & Relatives also

place an important role in influencing the customer

14. And in the case of servicing and repairing the bike most of them prefer

Service Centers Majority of customers get their vehicle service a

Authorized service units and authorized dealers and very few services on

to local services centers.

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15. The most important factor which influenced the customer to buy a Hero

Honda bike is price reduction followed by fuel efficiency.

16. Customers are satisfied about HERO HONDA bike because of easy

availability of spares parts of their bike.

17. From the survey it’s revealed that Bajaj motors is the foremost competitor

of Hero Honda followed by TVS.

18. HERO HONDA bikes are said to have very good resale value in the

market.

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5.2 CONCLUSION

Hero Honda is one of leading two wheeler producer in the world and a major player in

the Indian Market. They were the producer of largest selling motor cycle of the world that

is Hero Honda Splendor it has its own importance still in the market. But from the past

two or three years Hero Honda suffered a slight loss in its market share and Bajaj became

a big competitor to Hero Honda. The introduction of Bajaj Pulsar is one of the biggest

threat to Hero Honda. Hero Honda is one of the leading two wheeler producer in the

globe. It holds an important place in the minds of consumer by providing efficient service

and better products. Product efficiency and innovations are the method they live up

today. Their engineering is comprehensive.

Consumer perception towards Hero Honda motorcycles is very good. It has created a

very good brand image for it self by providing low maintenance, fuel efficient, sleek

looking models along with efficient after sales service. It has attracted every class of

customers.

In today’s competitive business environment, it is only due to the positive perception of

the consumer that the company is being able to compete in the market with its other

competitors.

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5.3 RECOMMENDATONS AND SUGGESTIONS

1. Most of the customers are of the view that the price tag of HERO HONDA

bikes as compared to other similar bikes is a bit higher. Hence the price of the

bikes especially the power range bikes like CD DELUXE, CBZ XTREME,

and KARIZMA could be reduced.

2. CD-Dawn, Splendor+ and Passion Plus, could be added with more power,

mileage and given with more colours.

3. The customers should be provided with enough information regarding

effective maintenance of the bike so that the consumers get the best from the

bike.

4. HERO HONDA has to identify those dealers who are facing the problem with

sales and take adequate measures to keep up the so far created brand image.

5. Hero Honda has to use more promotional techniques to improve the sales in

future. It has to conduct more road shows/public display by which the

consumer is given with much detailed information about the product and more

public awareness is created.

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6. Many existing customer have stated that some Hero Honda vehicle

(CD-Dawn, Splendor) do not have a good road grip. Hence it is suggested that

those vehicle must be re-engineered for better road grip.

7. Many existing customers have stated that the splendor+ be provided with self

starter and disc brakes. So the company should focus on those factors.

8. HERO HONDA has offered just one model (HERO HONDA PLEASURE)

for women whereas its competitors are offering more then two so they should

concentrate on that aspect.

9. The models ACHIEVER and AMBITION should be re-launched with more

value added features.

10. Apart from KARIZMA and CBZ-XTREME all other models are light weight

and hence are prone to accidents.

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BIBLIOGRAPHY

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BIBLIOGRAPHY

TEXTBOOKS REFERRED

Kotler Philip, Marketing Management, Pearson Education Inc. 11th Edition.

Consumer Behaviour – Building Marketing Strategy 9th Edition 2003, Tata McGraw

Hill.

Stanton William J, Etzel Michael J, Walker Bruce J, Fundamentals of Marketing,

McGraw-Hill international, Singapore, 1998

MAGAZINES

Business Today

Business World

Business standard

Auto India

Overdrive

NEWSPAPER REFERRED

Economics Times

Business Times

The Times of India

Business Standard

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WEB SITE REFERRED

www.herohonda.com

www.herogroup.com

www.autoindia.com

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ANNEXURE

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ANNEXURE. 1

QUESTIONNAIRE

Dear customer, .

I Joyal John final year MBA student of the Kristu Jayanti College of Management and Technology doing a project work on “Consumer Perception towards HERO HONDA Motor Bikes in Bangalore City” for my academic purpose. I request you to kindly fill this questionnaire.

Thanking you,

Sincerely yours,.1. Name:-

2. Age: - 18-25 25-40 40-55 >55

3. Sex Male Female

4. Occupation:- Business Professional Employee Student Others 5. How did you come to know the name HERO HONDA?

Friends Advertising Relatives Others

6. Are you satisfied with product briefing done by the sales executive?

Yes No

7. Have you gone for test drive?

Yes No

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8. What is your opinion about overall sales process?

Very good Good

Fair Poor

9. Are you satisfied with the after sales service provided by Dealer?

Yes No

10. Do they have expert mechanics who can cater to the needs of the customers?

Yes No

11. Rank the attributes of HERO HONDA bikes as per your preference, Rank 1-Most attractive, Rank 6-Least attractive

Style Mileage Performance Comfort Price Br Brand Name

12. What is your opinion on the performance of HERO HONDA bikes?

Excellent Good

Satisfactory Poor

13. How is the availability of spare parts of the HERO HONDA?

Easily available Hardly available Not available

14. When it comes to service the bike, where would you prefer?

Service centre Authorized Dealer Local Mechanic

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15. Rank the factors which have influenced you purchase of HERO HONDA bike? Rank 1- Most influenced, Rank 6- Least influenced

Power Style

Price reduction More colors

Free accessories Fuel Efficiency

16. Which model did you buy?

Splendor+ Passion+ CD-Dawn C.B.Z

Ambition 135 Karizma Super Splendor C B Z Extreme Glamour Pleasure

17. Rank the Companies as per your preference, Rank1-Most, Rank-Least

T.V.S Bajaj Yamaha Honda Suzuki Others

91