hero honda vs bajaj project report
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COMPARATIVE STUDY OF HERO HONDA AND BAJAJ AUTO
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OBJECTIVES OF THE STUDY
Project study which is being conducted by me is not only a formality for the fulfillment of the
two year full time MBA. But being a management student I tried my best to extract best of
the information available in the market for the use of society and people. Objectives which
are being covered by me in this project are as following-
To know the perception of customers regarding bikes.
To determine the customers satisfaction regarding bikes.
To determine the factors influencing the choice of customers regarding bikes.
To find out consumer refers which bike.
To know the post purchase experiences of consumer regarding bikes.
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BAJAJ AUTO LTD.
Company profile
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Bajaj Auto limited is one of the largest two wheeler manufacturing company in India apart
from producing two wheelers they also manufacture three wheelers. It is the world's 4th
largest two- and three-wheeler maker. It is based in Pune, Maharashtra, with plants in Waluj
near Aurangabad, Akurdi and Chakan, near Pune. Bajaj Auto makes motor scooters,
motorcycles and the auto rickshaw.
The company had started way back in 1945. Initially it used to import the two wheelers from
outside, but from 1959 it started manufacturing of two wheelers in the country. By the year
1970 Bajaj Auto had rolled out their 100,000th vehicle. Bajaj scooters and motor cycles have
become an integral part of the Indian milieu and over the years have come to represent the
aspirations of modern India.
Bajaj Auto also has a technical tie up with Kawasaki heavy industries of Japan to produce the
latest motorcycles in India which are of world class quality the Bajaj Kawasaki eliminator has
emerged straight out of the drawing board of Kawasaki heavy industries. The core brand
values of Bajaj Auto limited includes Learning, Innovation, Perfection, Speed and
Transparency.
Bajaj Auto has three manufacturing units in the country at Akurdi, Waluj and Chakan in
Maharashtra, western India, which produced 2,314,787 vehicles in 2005-06. The sales are
backed by a network of after sales service and maintenance work shops all over the country.
Bajaj Auto has products which cater to every segment of the Indian two wheeler market Bajaj
CT 100 Dlx offers a great value for money at the entry level. Similarly Bajaj Discover 125
offers the consumer a great performance without making a big hole in the pocket.
PROFILE:
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Founder Jamnalal Bajaj
Year of Establishment 1945
Industry Automotive - Two & Three Wheelers
Business Group The Bajaj Group
Listings & its codes BSE – Code: 500490;
NSE - Code: BAJAJAUTO
Presence Distribution network covers 50 countries. Dominant
presence in Sri Lanka, Bangladesh, Columbia,
Guatemala, Peru, Egypt, Iran and Indonesia.
Joint Venture Kawasaki Heavy Industries of Japan
Registered & Head Office Akurdi
Pune - 411035
India
Tel.: +(91)-(20)-27472851
Fax: +(91)-(20)-27473398
Works · Akurdi, Pune
· Bajaj Nagar, Waluj Aurangabad
· Chakan Industrial Area, Chakan, Pune
E-mail rahulbajaj@bajajauto.co.in
Website www.bajajauto.com
Company's history
Bajaj Auto came into existence on November 29, 1945 as M/s Bachraj Trading Corporation
Private Limited. It started off by selling imported two- and three-wheelers in India. In 1959, it
obtained license from the Government of India to manufacture two- and three-wheelers and it
went public in 1960. In 1970, it rolled out its 100,000th vehicle. In 1977, it managed to
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produce and sell 100,000 vehicles in a single financial year. In 1985, it started producing at
Waluj in Aurangabad. In 1986, it managed to produce and sell 500,000 vehicles in a single
financial year. In 1995, it rolled out its ten millionth vehicles and produced and sold 1 million
vehicles in a year.
According to the authors of Globality: Competing with Everyone from Everywhere for
Everything, Bajaj has grown operations in 50 countries by creating a line of value-for-money
bikes targeted to the different preferences of entry-level buyers.
Origins
The Bajaj Group was formed in the first days of India's independence from Britain. Its
founder, Jamnalal Bajaj, had been a follower of Mahatma Gandhi, who reportedly referred to
him as a fifth son. 'Whenever I spoke of wealthy men becoming the trustees of their wealth
for the common good I always had this merchant prince principally in mind,' said the
Mahatma after Jamnalal's death.
Jamnalal Bajaj was succeeded by his eldest son, 27-year-old Kamalnayan, in 1942.
Kamalnayan, however, was preoccupied with India's struggle for independence. After this
was achieved, in 1947, Kamalnayan consolidated and diversified the group, branching into
cement, ayurvedic medicines, electrical equipment, and appliances, as well as scooters.
The precursor to Bajaj Auto had been formed on November 29, 1945 as M/s Bachraj Trading
Ltd. It began selling imported two- and three-wheeled vehicles in 1948 and obtained a
manufacturing license from the government 11 years later. The next year, 1960, Bajaj Auto
became a public limited company.
Rahul Bajaj reportedly adored the famous Vespa scooters made by Piaggio of Italy. In 1960,
at the age of 22, he became the Indian licensee for the make; Bajaj Auto began producing its
first two-wheelers the next year.
Rahul Bajaj became the group's chief executive officer in 1968 after first picking up an MBA
at Harvard. He lived next to the factory in Pune, an industrial city three hours' drive from
Bombay. The company had an annual turnover of Rs 72 million at the time. By 1970, the
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company had produced 100,000 vehicles. The oil crisis soon drove cars off the roads in favor
of two-wheelers, much cheaper to buy and many times more fuel-efficient.
A number of new models were introduced in the 1970s, including the three-wheeler goods
carrier and Bajaj Chetak early in the decade and the Bajaj Super and three-wheeled, rear
engine Autorickshaw in 1976 and 1977. Bajaj Auto produced 100,000 vehicles in the 1976-
77 fiscal year alone.
The technical collaboration agreement with Piaggio of Italy expired in 1977. Afterward,
Piaggio, maker of the Vespa brand of scooters, filed patent infringement suits to block Bajaj
scooter sales in the United States, United Kingdom, West Germany, and Hong Kong. Bajaj's
scooter exports plummeted from Rs 133.2 million in 1980-81 to Rs 52 million ($5.4 million)
in 1981-82, although total revenues rose five percent to Rs 1.16 billion. Pretax profits were
cut in half, to Rs 63 million.
New Competition in the 1980s
Japanese and Italian scooter companies began entering the Indian market in the early 1980s.
Although some boasted superior technology and flashier brands, Bajaj Auto had built up
several advantages in the previous decades. Its customers liked the durability of the product
and the ready availability of maintenance; the company's distributors permeated the country.
The Bajaj M-50 debuted in 1981. The new fuel-efficient, 50cc motorcycle was immediately
successful, and the company aimed to be able to make 60,000 of them a year by 1985.
Capacity was the most important constraint for the Indian motorcycle industry. Although the
country's total production rose from 262,000 vehicles in 1976 to 600,000 in 1982, companies
like rival Lohia Machines had difficulty meeting demand. Bajaj Auto's advance orders for
one of its new mini-motorcycles amounted to $57 million. Work on a new plant at Waluj,
Aurangabad commenced in January 1984.
The 1986-87 fiscal year saw the introduction of the Bajaj M-80 and the Kawasaki Bajaj
KB100 motorcycles. The company was making 500,000 vehicles a year at this point.
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Although Rahul Bajaj credited much of his company's success with its focus on one type of
product, he did attempt to diversify into tractor-trailers. In 1987 his attempt to buy control of
Ahsok Leyland failed.
The Bajaj Sunny was launched in 1990; the Kawasaki Bajaj 4S Champion followed a year
later. About this time, the Indian government was initiating a program of market
liberalization, doing away with the old 'license raj' system, which limited the amount of
investment any one company could make in a particular industry.
A possible joint venture with Piaggio was discussed in 1993 but aborted. Rahul Bajaj told the
Financial Times that his company was too large to be considered a potential collaborator by
Japanese firms. It was hoping to increase its exports, which then amounted to just five
percent of sales. The company began by shipping a few thousand vehicles a year to
neighboring Sri Lanka and Bangladesh, but soon was reaching markets in Europe, Latin
America, Africa, and West Asia. Its domestic market share, barely less than 50 percent, was
slowly slipping.
By 1994, Bajaj also was contemplating high-volume, low-cost car manufacture. Several of
Bajaj's rivals were looking at this market as well, which was being rapidly liberalized by the
Indian government.
Bajaj Auto produced one million vehicles in the 1994-95 fiscal year. The company was the
world's fourth largest manufacturer of two-wheelers, behind Japan's Honda, Suzuki, and
Kawasaki. New models included the Bajaj Classic and the Bajaj Super Excel. Bajaj also
signed development agreements with two Japanese engineering firms, Kubota and Tokyo R
& D. Bajaj's most popular models cost about Rs 20,000. 'You just can't beat a Bajaj,' stated
the company's marketing slogan.
The Kawasaki Bajaj Boxer and the RE diesel Autorickshaw were introduced in 1997. The
next year saw the debut of the Kawasaki Bajaj Caliber, the Spirit, and the Legend, India's first
four-stroke scooter. The Caliber sold 100,000 units in its first 12 months. Bajaj was planning
to build its third plant at a cost of Rs 4 billion ($111.6 million) to produce two new models,
one to be developed in collaboration with Cagiva of Italy.
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New Tools in the 1990s
Still, intense competition was beginning to hurt sales at home and abroad during the calendar
year 1997. Bajaj's low-tech, low-cost cycles were not faring as well as its rivals' higher-end
offerings, particularly in high-powered motorcycles, since poorer consumers were
withstanding the worst of the recession. The company invested in its new Pune plant in order
to introduce new models more quickly. The company spent Rs 7.5 billion ($185 million) on
advanced, computer-controlled machine tools. It would need new models to comply with the
more stringent emissions standards slated for 2000. Bajaj began installing Rs 800 catalytic
converters to its two-stroke scooter models beginning in 1999.
Although its domestic market share continued to slip, falling to 40.5 percent, Bajaj Auto's
profits increased slightly at the end of the 1997-98 fiscal year. In fact, Rahul Bajaj was able
to boast, 'My competitors are doing well, but my net profit is still more than the next four
biggest companies combined.' Hero Honda was perhaps Bajaj's most serious local threat; in
fact, in the fall of 1998, Honda Motor of Japan announced that it was withdrawing from this
joint venture.
Bajaj Auto had quadrupled its product design staff to 500. It also acquired technology from
its foreign partners, such as Kawasaki (motorcycles), Kubota (diesel engines), and Cagiva
(scooters). 'Honda's annual spend on R & D is more than my turnover,' noted Ruhal Bajaj.
His son, Sangiv Bajaj, was working to improve the company's supply chain management. A
marketing executive was lured from TVS Suzuki to help push the new cycles.
Several new designs and a dozen upgrades of existing scooters came out in 1998 and 1999.
These, and a surge in consumer confidence, propelled Bajaj to sales records, and it began to
regain market share in the fast-growing motorcycle segment. Sales of three-wheelers fell as
some states, citing traffic and pollution concerns, limited the number of permits issued for
them.
In late 1999, Rahul Bajaj made a bid to acquire ten percent of Piaggio for $65 million. The
Italian firm had exited a relationship with entrepreneur Deepak Singhania and was looking to
reenter the Indian market, possibly through acquisition. Piaggio itself had been mostly bought
out by a German investment bank, Deutsche Morgan Grenfell (DMG), which was looking to
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sell some shares after turning the company around. Bajaj attached several conditions to his
purchase of a minority share, including a seat on the board and an exclusive Piaggio
distributorship in India.
In late 2000, Maruti Udyog emerged as another possible acquisition target. The Indian
government was planning to sell its 50 percent stake in the automaker, a joint venture with
Suzuki of Japan. Bajaj had been approached by several foreign car manufacturers in the past,
including Chrysler (subsequently DaimlerChrysler) in the mid-1990s.
Employment fell from about 23,000 in 1995-96 (the year Bajaj suffered a two-month strike at
its Waluj factory) to 17,000 in 1999-2000. The company planned to lay off another 2,000
workers in the short term and another 3,000 in the following three to four years.
Principal Subsidiaries: Bajaj Auto Finance Ltd.; Bajaj Auto Holdings Ltd.; Bajaj Electricals
Ltd.; Bajaj Hindustan Ltd.; Maharashtra Scooters Ltd.; Mukand Ltd.
Principal Competitors: Honda Motor Co. Ltd.; Suzuki Motor Corporation; Piaggio SpA,
Hero Honda Motorcycle Ltd.
Timeline of new releases
· 1960-1970 - Vespa 150 (Under the license of Piaggio of Italy)
· 1971 - three-wheeler goods carrier
· 1972 - Bajaj Chetak
· 1976 - Bajaj Super
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· 1977 - Rear engine Autorickshaw
· 1981 - Bajaj M-50
· 1986 - Bajaj M-80, Kawasaki Bajaj KB100
· 1990 - Bajaj Sunny
· 1994 - Bajaj Classic
· 1995 - Bajaj Super Excel
· 1997 - Kawasaki Bajaj Boxer, Rear Engine Diesel Auto rickshaw
· 1998 - Kawasaki Bajaj Caliber, Legend(India's first four-stroke scooter)
· 2000 - Bajaj Saffire
· 2001 - Eliminator, Pulsar
· 2003 - Caliber115, Bajaj Wind 125, Bajaj Pulsar
· 2004 - Bajaj CT 100, New Bajaj Chetak 4-stroke with Wonder Gear, Bajaj Discover DTS-i
· 2005 - Bajaj Wave, Bajaj Avenger, Bajaj Discover
· 2006 - Bajaj Platina
· 2007 - Bajaj Pulsar-200, Bajaj Kristal, Bajaj Pulsar 220 DTS-Fi, XCD 125 DTS-Si
· 2008 - Bajaj Discover 135 DTS-i - sport (Upgrade of existing 135cc model)
· 2009 - Bajaj Pulsar 135, Bajaj XCD 135 cc , Bajaj Pulsar 150 DTS-i UG IV, Bajaj Pulsar
180 DTS-i UG IV, Bajaj Pulsar 220 DTS-i , Bajaj Discover 100 DTS-Si.
Some of the models that Bajaj makes (or has made) are:
Scooters
o Bajaj Sunny
o Bajaj Chetak
o Bajaj Cub
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o Bajaj Super
o Bajaj Wave
o Bajaj Legend
Motorcycles
o Kawasaki Eliminator
o Bajaj Pulsar
o Bajaj Kawasaki Wind 125
o Bajaj Boxer
o Bajaj CT 100
o Bajaj Platina
o Bajaj Caliber
o Bajaj Discover
o Bajaj Avenger
Upcoming Models
· Bajaj Blade
· Bajaj Sonic
New Image
The company, over the last decade has successfully changed its image from a scooter
manufacturer to a two wheeler manufacturer, product range ranging from Scooterettes to
Scooters to Motorcycle. Its real growth in numbers has come in the last 4 years after
successful introduction of a few models in the motorcycle segment. Bajaj has redefined both
the value and the premium segments with its motorcycles offering unique features not seen in
their competitors in those classes.
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The entry level Platina features push to cancel indicators, unique throttle control, chrome
graphics, fuel gauge and alloy wheels which are not seen on more expensive executive class
machines of its competitors.
The Bajaj XCD 125 offers an excellent value proposition with its larger engine, LED tail
lamp and Digital meter at the price point of 100cc vehicles from its competitors.
The Discover 135 is available in Disc and Drum brake variants falls between the executive
and premium segments and is ideal for those looking for a bit of additional power without
sacrificing too much on fuel efficiency. Recently a Sport variant has been announced which
is expected to hit the markets shortly.
In the premium segment the Bajaj range includes the Pulsar 150, 200 and 220cc variants in
the sports segment and the Avenger 200 in the cruiser segment.
With the launch of the Kristal, Bajaj Auto have reentered the autogeared scooter segment and
borrows a lot of technologies from the successful motorcycle range such as DTSi, ExhausTec
and SNS suspension.
The GC1000 with its 416cc Diesel engine is an economical commercial vehicle and can be
adapted for a wide variety of purposes.
The company is headed by Rahul Bajaj who is worth more than US$1.5 billion.
Spinoffs and acquisitions
The demerger of Bajaj Auto Ltd into three separate corporate entities—Bajaj Finserv Ltd
(BFL), Bajaj Auto Ltd (BAL), and Bajaj Holdings and Investment Ltd (BHIL)—was
completed with the shares listing on 26 May 2008.
In November 2007, Bajaj Auto acquired 14.5% stake in KTM Power Sports AG (holding
company of KTM Sport motorcycles AG). The two companies have signed a cooperation
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deal, by which KTM will provide the know-how for joint development of the water-cooled
four-stroke 125 and 250 cc engines, and Bajaj will take over the distribution of KTM
products in India and some other Southeast Asian nations. Bajaj said it is open to taking a
majority stake in KTM and is also looking at other takeover opportunities. On 8 January
2008, Managing Director Rajiv Bajaj confirmed the collaboration and announced his
intention to gradually increase Bajaj's stake in KTM to 25%.
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HERO HONDA
MOTORCYCLES LTD.
Company's History
Hero Honda Motorcycles Limited is an Indian manufacturer of motorcycles and scooters.
Hero Honda is a joint venture that began in 1984 between the Hero group of India and Honda
from Japan. It has been the world's biggest manufacturer of 2-wheeled motorized vehicles
since 2001, when it produced 1.3 million motorbikes in a single year.
Hero Honda's Splendor is the world's largest selling motorcycle. Its 2 plants are in Dharuhera
and Gurgaon, both in Haryana, India. It specializes in dual use motorcycles that are low
powered but very fuel efficient.
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Company Profile
“Hero”, is the brand name used by the Munjal brothers in the year 1956 with the flagship
company Hero Cycles. The two-wheeler manufacturing business of bicycle components had
originally started in the 1940’s and turned into the world’s largest bicycle manufacturer
today. Hero is a name synonymous with two-wheelers in India today. The Munjals roll their
own steel, make free wheel bicycle critical components and have diversified into different
ventures like product design. The Hero Group philosophy is: “To provide excellent
transportation to the common man at easily affordable prices and to provide total satisfaction
in all its spheres of activity”. The Hero group vision is to build long lasting relationships with
everyone (customers, workers, dealers and vendors). The Hero Group has a passion for
setting higher standards and “Engineering Satisfaction” is the prime motivation, way of life
and work culture of the Group.
In the year 1984, Mr. Brijmohan Lal Munjal, the Chairman and Managing Director of Hero
Honda Motors (HHM), headed an alliance between the Munjal family and Honda Motor
Company Ltd. (HMC). HHM Mission Statement is: “We, at Hero Honda, are continuously
striving for synergy between technology, systems, and human resources to provide products
and services that meet the quality, performance, and price aspirations of our customers. While
doing so, we maintain the highest standards of ethics and societal responsibilities, constantly
innovate products and processes, and develop teams that keep the momentum going to take
the company to excellence in the new millennium”. This alliance became one of the most
successful joint ventures in India, until the year 1999 when HMC had announced a 100%
subsidiary, Honda Motorcycle & Scooter India (HMSI).
Growth
The business growth of Hero Honda has been phenomenal throughout its early days. The
Munjal family started a modest business of bicycle components. Hero Group expanded so big
that by 2002 they had sold 86 million bicycles producing 16000 bicycles a day. Today Hero
Honda has an assembly line of 9 different models of motorcycles available. It holds the
record for most popular bike in the world by sales for Its Splendor model. Hero Honda
Motors Limited was established in joint venture with Honda Motors of Japan in 1984, to
manufacture motorcycles. It is currently the largest producer of Two Wheelers in the world. It
sold 3 million bikes in the year 2005-2006.
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Recently it has also entered in scooter manufacturing, with its model PLEASURE mainly
aimed at girls. The Hero Group has done business differently right from the start and that is
what has helped them to achieve break-through in the competitive two-wheeler market. The
Group's low key, but focused, style of management has earned the company plaudits amidst
investors, employees, vendors and dealers, as also worldwide recognition. The growth of the
Group through the years has been influenced by a number of factors:
Just-in-Time
The Hero Group through the Hero Cycles Division was the first to introduce the concept of
just-in-time inventory. The Group boasts of superb operational efficiencies. Every assembly
line worker operates two machines simultaneously to save time and improve productivity.
The fact that most of the machines are either developed or fabricated in-house, has resulted in
low inventory levels. In Hero Cycles Limited, the just-in-time inventory principle has been
working since the beginning of production in the unit and is functional even till date. This is
the Japanese style of production and in India; Hero is probably the only company to have
mastered the art of the just-in-time inventory principle.
Ancillarisation
An integral part of the Group strategy of doing business differently was providing support to
ancillary units. There are over 300 ancillary units today, whose production is dedicated to
Hero's requirements and also a large number of other vendors, which include some of the
better known companies in the automotive segment. Employee Policy: Another Striking
feature within the Hero Group is the commitment and dedication of its workers. There is no
organized labor union and family members of employees find ready employment within
Hero. The philosophy with regard to labor management is "Hero is growing, grow with
Hero." When it comes to workers' benefits, the Hero Group is known for providing facilities,
further ahead of the industry norms. Long before other companies did so, Hero was giving its
employees a uniform allowance, as well as House Rent Allowance (HRA) and Leave Travel
Allowance (LTA). Extra benefits took the form of medical check-ups, not just for workers,
but also for the immediate family members.
Dealer Network
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The relationship of Hero Group with their dealers is unique in its closeness. The dealers are
considered a part of the Hero family. A nation-wide dealer network comprising of over 5,000
outlets, and have a formidable distribution system in place. Sales agents from Hero travels to
all the corners of the country, visiting dealers and send back daily postcards with information
on the stock position that day, turnover, fresh purchases, anticipated demand and also
competitor action in the region. The manufacturing units have a separate department to
handle dealer complaints and problems and the first response is always given in 24 hours.
Financial Planning
The Hero Group benefits from the Group Chairman's financial acumen and his grasp on
technology, manufacturing and marketing. Group Company, Hero Cycles Limited has one of
the highest labor productivity rates in the world. In Hero Honda Motors Limited, the focus is
on financial and raw material management and a low employee turnover.
Quality
Quality at Hero is attained not just by modern plants and equipment and through latest
technology, but by enforcing a strict discipline. At the Group factories, attaining quality
standards is an everyday practice - a strictly pursued discipline. It comes from an
amalgamation of the latest technology with deep-rooted experience derived from nearly four
decades of hard labor. It is an attitude that masters the challenge of growth and change -
change in consumers' perceptions about products and new aspirations arising from a new
generation of buyers.
Constant technology up gradation ensures that the Group stays in the global mainstream and
maintains its competitive edge. With each of its foreign collaborations, the Group goes onto
strengthen its quality measures as per the book. The Group also employs the services of
independent experts from around the world to assist in new design and production processes.
Diversification
Throughout the years of enormous growth, the Group Chairman, Mr. Lal has actively looked
at diversification. A considerable level of backward integration in its manufacturing activities
has been ample in the Group's growth and led to the establishment of the Hero Cycles Cold
Rolling Division, Munjal and Sunbeam Castings, Munjal Auto Components and Munjal
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Showa Limited amongst other component manufacturing units. Then there were the
expansion into the automotive segment with the setting up of Majestic Auto Limited, where
the first indigenously designed moped, Hero Majestic, went into commercial production in
1978. Then Hero Motors come which introduced Hero Puch, in collaboration with global
technology leader Steyr Daimler Puch of Austria.
Hero Honda Motors was established in 1984 to manufacture 100 cc motorcycles.
The Hero Group also took a venture into other segments like exports, financial services,
information technology, which includes customer response services and software
development.
Performance
During the fiscal year 2008-09, the company sold 3.7 million bikes, a growth of 12% over
last year. In the same year, the company had a market share of 57% in the Indian market.
Hero Honda sells more two wheelers than the second, third and fourth placed two-wheeler
companies put together. Hero Honda's bike Hero Honda Splendor, the world's largest-selling
motorcycle for the years 2001-2003, selling more than one million units per year.
Recognition
The Brand Trust Report published by Trust Research Advisory has ranked Hero Honda in the
13th position among the brands in India.
Suppliers
It is reported Hero Honda 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.
Termination of Hero and Honda Joint Venture
In December 2010, the Board of Directors of the Hero Honda Group has decided to terminate
the joint venture between Hero Group of India and Honda of Japan in a phased manner. The
Hero Group of India would buy out the 26% stake of the Honda in JV Hero Honda. Under the
joint venture Hero Group could not sell into international markets and the termination would
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mean that Hero Group can exploit global opportunities now. Since last 25 years the Hero
Group relied on their Japanese partner Honda for R & D for new bike models. So there are
concerns that the Hero Group might not be able to sustain the performance of the Joint
Venture alone.
Motorcycle models
Achiever
Ambition 133, Ambition 135
CBZ, CBZ Star, CBZ Xtreme
CD 100, CD 100 SS, CD Dawn, CD Deluxe, CD Deluxe (Self Start)
Glamour, Glamour F.I
Hunk
Karizma, Karizma R, Karizma ZMR FI
Passion, Passion+, Passion Pro
Pleasure
Splendor, Splendor+, Splendor+ (Limited Edition), Super Splendor, Splendor NXG,
Splendor PRO
LITERATURE REVIEW
India has the largest number of two wheelers in the world with 41.6 million vehicles. India
has a mix of 30 percent automobiles and 70 percent two wheelers in the country. India was
the second largest two wheeler manufacturer in the world starting in the 1950’s with the birth
of Automobile Products of India (API) that manufactured scooters. API manufactured the
Lambrettas but, another company, Bajaj Auto Ltd. surpassed API and remained through the
turn of the century from its association with Piaggio of Italy (manufacturer of Vespa).
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The license raj that existed between the1940s to1980s in India, did not allow foreign
companies to enter the market and imports were tightly controlled. This regulatory maze,
before the economic liberalization, made business easier for local players to have a seller’s
market. Customers in India were forced to wait 12 years to buy a scooter from Bajaj. The
CEO of Bajaj commented that he did not need a marketing department, only a dispatch
department. By the year 1990, Bajaj had a waiting list that was twenty-six times its annual
output for scooters.
The motorcycle segment had the same long wait times with three manufacturers; Royal
Enfield, Ideal Jawa, and Escorts. Royal Enfield made a 350cc Bullet with the only fourstroke
engine at that time and took the higher end of the market but, there was little competition for
their customers. Ideal Jawa and Escorts took the middle and lower end of the market
respectively.
In the mid-1980s, the Indian government regulations changed and permitted foreign
companies to enter the Indian market through minority joint ventures. The two-wheeler
market changed with four Indo-Japanese joint ventures: Hero Honda, TVS Suzuki, Bajaj
Kawasaki and Kinetic Honda. The entry of these foreign companies changed the Indian
market dynamics from the supply side to the demand side. With a larger selection of two-
wheeler’s on the Indian market, consumers started to gain influence over the products they
bought and raised higher customer expectations. The industry produced more models, styling
options, prices, and different fuel efficiencies. The foreign companies new technologies
helped make the products more reliable and with better quality. Indian companies had to
change to keep up with their global counterparts.
Consumer Perception
Consumer perception theory is any attempt to understand how a consumer's perception of a
product or service influences their behaviour. Those who study consumer perception try to
understand why consumers make the decisions they do, and how to influence these decisions.
Usually, consumer perception theory is used by marketers when designing a campaign for a
product or brand. However, some people study consumer perception in order to understand
psychology in a much more general sense.
Perception
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In general psychological terms, perception is our ability to make some kind of sense of reality
from the external sensory stimuli to which we are exposed. Several factors can influence our
perception, causing it to change in certain ways. For example, repeated exposure to one kind
of stimuli can either make us oversensitive or desensitized to it. Additionally, the amount of
attention we focus on something can cause a change in our perception of it.
Branding
A brand, or a brand name, is the attempt to impose some kind of identifying feature on a
product or service so that it is easily recognized by the general public. A brand is oftentimes
associated with an image, a set of expectations or recognizable logo. The goal of a brand is to
set a product or service apart from others of its kind, and influence the consumers to choose
the product over similar products simply because of its associations.
Positioning, Repositioning or Depositioning
Positioning is the process whereby marketers attempt to build a brand. Marketers actively try
to create an image which is both recognizable and appeals to a certain group of people or
target market. Repositioning is the process of altering this image, usually in order to influence
a larger target market and thereby influence the behavior of a greater number of consumers.
Depositioning is the practice of trying to devalue alternative, competing brands in the
perceptions of a shared target market.
Value and Quality
Value refers to the perceptions a consumer has of a product's benefits when weighed against
its cost. Value can be measured both qualitatively--the emotional or psychological pleasure a
consumer derives from a product or service--and quantitatively, in terms of the actual
financial gain it wins them. Quality can be related to value, and may be taken into account
when measuring the value of a product or service. More formally, it refers to the way in
which a product or service relates to its competitors, or else conforms to a set of measurable
standards.
Buyer's remorse
Buyer's remorse is a strong feeling of regret which occurs after a purchase has been made. It
is a specific case of cognitive dissonance, or the psychological state of worry or unease which
comes about when attempting to come to terms with conflicting ideas, perceptions or
22
motives. Buyer's remorse usually occurs after a consumer has made a purchase he or she has
come to regret. Generally, it involves the realization that the opportunity of purchasing one
product or service over another in some way outweighs the value of the purchase. In this
regard, it occurs when a consumer's perception of a purchase changes after he or she has
already invested in it.
Customer’s Satisfaction
Concept Identification
As organizations become increasingly customer focused and driven by demand, the need to
gain customer loyalty and retain their loyalty is critical. Customer satisfaction is the most
effective way to achieve customer loyalty. Customer satisfaction and customer loyalty share
many similar traits. Customer value is the customer’s perception of the ratio of benefits to
what he or she gives to obtain those benefits. The customer Value Triad is a framework used
to understand what it is that customers want. The framework consists of three parts:
(1) Perceived product quality,
(2) Value-based pricing, and
(3) Perceived service quality.
Customers are satisfied, when value meets or exceeds expectations. If their expectations of
value are not met, there is no chance of satisfying them. Figuring out what the customers
want, however, is a difficult and complex process. To be able to create and deliver customer
value is important to understand its components. On the most basic level, value from a
customer’s perspective is the ratio of benefits to the risks being taken while buying the
product.
An Insight
According to Harold E Edmondson “ Customer Satisfaction” seems to appear in print more
frequently than any other catch phrase used to describe a new found magic for industrial
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success. Before we proceed in to the study of the dynamics of Customer Satisfaction it is
important to know about, who a customer is and what satisfaction really means.
Who really is a Customer?
The question of defining who your customers are seems fairly easy particularly if you have
segmented your market properly and understand who you are trying to satisfy. However
subtlety that frequently goes undetected by many firms is that is that customer set can be
divided into two parts, the apparent customer and the user. The apparent customer is the
person or group of people who decide what product to buy and basically have control over
the purse strings. The user is a person or group who physically uses the product or is the
direct recipient of a service.
What does satisfaction really mean?
As in defining customer above, defining satisfaction also appears simple. However as with
customer there is a subtlety that needs addressing. Satisfaction by most definitions simply
means meeting the customer’s requirement.
Customer satisfaction is a concept that more and more companies are putting at the heart of
their strategy, but for this to be successful they’re needs to be clarity about, what customer
satisfaction means and what needs to happen to drive improvement. Without this, there is a
risk that customer satisfaction becomes little more than a good intention, with confused
objectives failing to address the real issues for customers, one helpful way to look at the
problem is to rephrase the objectives: set the sights on helping the customers meet their goals.
Customer satisfaction can be defined in many different ways. Finding the right way for a
company depends on understanding your customer and on having a clear vision of the role
that customer satisfaction is to play in the strategy. For example, a focus on customer
satisfaction can work alongside existing segmentations to support revenue generation from
high value customers or it can be a company-wide objective rooted in the brand values. For
the former, it may be sufficient to focus on improving customer service, but for the latter a
broader definition of customer satisfaction is necessary, closer akin to corporate reputation.
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Whatever the strategy for customer satisfaction, it must at least include getting the basics
right. Failing to achieve this can destroy the reputation as well as losing valuable
customers. Every customer, regardless of their economic worth to the business, has the power
to influence – positively or negatively – a company’s reputation. Once the objectives for the
customer satisfaction strategy are defined there are a number of steps we can take to make
sure the focus on customer satisfaction is effective.
RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. Research
methodology constitutes of research methods, selection criterion of research methods, used in
context of research study and explanation of using of a particular method or technique so that
research results are capable of being evaluated either by researcher himself or by others. Why
a research study has been undertaken, how the research problem has been formulated, why
data have been collected and what particular technique of analyzing data has been used and a
25
best of similar other question are usually answered when we talk of Research methodology
concerning a research problem or study.
The area of the study related with informing different people regarding motor bikes in the
region of NORTH-EAST DELHI.
RESEARCH TYPE AND SAMPLE SIZE
Research included gathering both primary and secondary data. Primary data is the first hand
data, which are selected a fresh and thus happen to be original in character. Primary data was
crucial to know various customers and past consumer views about bikes in regards to other
brands. Secondary data are that which has been collected by someone else and which already
have been passed through statistical process. Secondary data has been taken from internet,
newspaper, magazines and company’s websites. Data collection has been done through by
giving structured questionnaire. The research approach was used survey method which is a
widely used method for data collection and best suited for descriptive type of research. The
survey was done on hundred general residents of the selected region.
In this method questionnaire were distributed to the respondents and they were asked to
answer the questions in the questionnaire. The questionnaire were structured non disguised
questionnaire because the question which the questionnaire contained, were arranged in a
specific order besides every question asked were logical for the study, no question can be
termed as irrelevant.
DATA COLLECTION
(a) PRIMARY: Questionnaires filled by local people of various income groups.
(b) SECONDARY: Internet
Size of Data: 100 respondents
Location: NORTH-EAST DELHI.
The following basic tool was used by for analysis:-
Pie Charts
SCOPE
26
My project was based on the Comparative Study of Bajaj V/S Hero Honda and data was
taken in the City Delhi only.
LIMITATIONS
1. Research work was carried out in a North-East region of Delhi only; the finding may not
be applicable to the other parts of the country because of social and cultural differences.
2. The sample was collected using convenience-sampling techniques. As such result may not
give an exact representation of the population.
3. Shortage of time is also reason for incomprehensiveness.
4. The views of the people are biased therefore it doesn’t reflect true picture.
27
DATA ANALYSIS AND FINDINGS
Q1. Which bike do you have?
Bike No. of respondents
Hero Honda 45
28
Bajaj 37
Any Other 18
fig.: No of respondents according to their bike
Q2. Which model do you have?
Hero Honda No. of respondents Bajaj No. of respondents
Splendor 20 CT 100 6
Passion 12 Discover 12
Karizma 7 Pulsar 11
Any Other 6 Any other 8
29
Hero Honda
Bajaj
Any other
Hero Honda
Bajaj
Q3. In which family Income level do you fall?
Income Level No. of respondents
100000-200000 22
200000-300000 45
300000-400000 23
Above 400000 10
Fig.: People according to their income level
30
Model Name0
2
4
6
8
10
12
14
CT 100DiscoverPulsarAny other
Model Name0
5
10
15
20
25
SplendorPassionKarizmaAny other
Q4. For how long do you own a bike?
Year No. of respondents
0-1 11
1-2 29
2-3 26
Above 3 34
No. of Years0
5
10
15
20
25
30
35
40
0-1 Year1-2 Year2-3 YearAbove 3 Year
31
Q5. For what purpose do you use your Motor Bike?
Purpose Hero Honda Bajaj
Office 9 4
Personal 12 14
Joy 18 16
Other 6 3
Office Personal Joy Other0
2
4
6
8
10
12
14
16
18
20
Hero HondaBajaj
32
Q6. How do you come to know about this Motor Bike?
Source Hero Honda Bajaj
News Paper 4 2
Television 22 16
Magazine 2 1
Friends & Relative 17 18
Hero Honda Bajaj0
5
10
15
20
25
News PaperTelevisionMagazinefriends & Relative
33
Q7. Does advertisement influence your decision in choosing a Motor Bike?Response No. of respondents
Yes 87No 5
Can’t say 8
Yes No
Can't say
34
Q8. Do you have full knowledge about Bikes before buying?
Response Hero Honda BajajYes 24 22No 21 15
Hero Honda Bajaj0
5
10
15
20
25
30
YesNo
35
Q9) Which Factor below Influence your decision?
Factor Hero Honda BajajPrice 71.11% 78.38%
Mileage 80% 64.86%Quality 66.67% 48.65%
Resale Value 40% 27%Status Symbol 10% 8%
Hero Honda Bajaj0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
Price
Mileage
Quality
Resale Value
Status Symbol
36
Q10. How would you rate the following factors of Bikes with respect to
different company?
Factor Hero Honda Ratings Bajaj Ratings
Mileage 74% 72%
Price 68% 65%
Pick-up 70% 80%
Maintenance 58% 62%
Look & Shape 85% 80%
Brand Image 53% 55%
Hero Honda Bajaj0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Mileage
Price
Pick-up
Maintenance
Look & Shape
Brand Image
37
Q11. If new Bike with good features comes in, then would you like to
change your bike?
Response Hero Honda Bajaj
Yes 18 20
No 16 14
Can’t say 11 3
Yes No Can't say0
5
10
15
20
25
Hero Honda
Bajaj
CONCLUSION
38
1. Most of the Pulsar, CBZ & Karizma are purchased by young generation 18 to 30
because they prefer stylish looks and rest of the models of Hero Honda are purchased
more by daily users who needs more average of bikes than looks.
2. Hero Honda is considered to be most fuel-efficient bike on Indian roads.
3. Service & Spare parts are available throughout India in local markets also.
4. While buying a motorcycle, economy is the main consideration in form of
maintenance cost, fuel efficiency.
5. Majority of the respondent had bought their motorcycle more than 3 years.
RECOMMENDATION
39
1. Bajaj should introduce some more models having more engine power.
2. Hero Honda should think about fuel efficiency in case of upper segment bikes.
3. More service centers should be opened.
4. Maintenance cost and the availability of the spare parts should also be given due
importance.
5. They also introduce some good finance/discount schemes for students.
6. The price should be economic.
BIBLIOGRAPHY
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1. www.herohonda.com
2. www.google.com
3. www.bajaj.com
4. www.twowheeler.com
5. www.extrememachines.com
ANNEXURE
41
NAME: - ………………………………………………
CONTACT NO. ……………………………………….
Age:- 15-20 20-25
25-30 Above 30
Occupation:- Businessman Employee
Student Other
Q1. Which Bike do you have?
Hero Honda Bajaj Any Other
Q2. Which Model do you have?
Hero Honda:- Splendor Passion
Karizma Other
Bajaj:- CT 100 Discover
Pulsar Other
Q3. In which Family Income do you Fall?
100000-200000 200000-300000
300000-400000 Above 400000
Q4. For how long do you own a Bike?
0-1 year 1-2 year
2-3 year Above 3 years
Q5. For what purpose do you use your Motor Bike?
Office Purpose Personal Purpose
Joy Purpose Other
Q6. How do you come to know about this Motor Bike?
Newspaper Television
Magazines Friends/Relatives
Q7. Does advertisement influence your decision in choosing a Motor Bike?
Yes No Can’t say
Q8. Do you have full knowledge about Bikes before buying?
Yes No
Q9. Which factor below influence your decision?
Price Mileage Quality
Resale Value Status Symbol
Q10. How would you rate the following factors of bikes with respect to different companies?
Hero Honda Bajaj
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Mileage
Price
Pick up
Maintenance
Look/Shape
Brand Image
Q11. In new bike with good feature comes in, then would you like to change your bikes?
Yes No Can’t say
Q12. Any Suggestions for Company
……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
………
Date: (Signature)
43
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