With the invention of the wheel in 4000 BC, man’s journey on the road of mechanized

transport had begun. Since then he continually sought to devise an automated, labor saving

machine to replace the horse. Innumerable attempts reached conclusion in the early 1760s

with the building of the first steam driven tractor by a French Captain, Nicolas Jacob

Cugnot. It was however left to Karl Benz and Gottlieb Damlier to produce the first vehicles

powered by the internal combustion engine in 1885. It was then that the petrol engine was

introduced, which made the car a practical and safe proposition. Then onwards, it has been

one big journey...on the roads

The automobile as we know it was not invented in a single day by a single inventor. The

history of the automobile reflects an evolution that took place worldwide. It is estimated

that over 100,000 patents created the modern automobile. However, we can point to the

many firsts that occurred along the way. Starting with the first theoretical plans for a motor

vehicle that had been drawn up by both Leonardo da Vinci and Isaac Newton.

In 1769, the very first self-propelled road vehicle was a military tractor invented by French

engineer and mechanic, Nicolas Joseph Cugnot (1725 - 1804). Cugnot used a steam engine

to power his vehicle, built under his instructions at the Paris Arsenal by mechanic Brezin. It

was used by the French Army to haul artillery at a whopping speed of 2 1/2 mph on only

three wheels. The vehicle had to stop every ten to fifteen minutes to build up steam power.

The steam engine and boiler were separate from the rest of the vehicle and placed in the

front (see engraving above). The following year (1770), Cugnot built a steam-powered

tricycle that carried four passengers.

In 1771, Cugnot drove one of his road vehicles into a stone wall, making Cugnot the first

person to get into a motor vehicle accident. This was the beginning of bad luck for the

inventor. After one of Cugnot's patrons died and the other was exiled, the money for

Cugnot's road vehicle experiments ended.

Steam engines powered cars by burning fuel that heated water in a boiler, creating steam

that expanded and pushed pistons that turned the crankshaft, which then turned the wheels.

During the early history of self-propelled vehicles - both road and railroad vehicles were

being developed with steam engines. (Cugnot also designed two steam locomotives with

engines that never worked well.) Steam engines added so much weight to a vehicle that

they proved a poor design for road vehicles; however, steam engines were very

successfully used in locomotives. Historians, who accept that early steam-powered road

vehicles were automobiles, feel that Nicolas Cugnot was the inventor of the first

automobile.

The automotive industry has certain trends it has to follow, just like fashion designers and

musical composers. In times of recession and decreasing sales there is less room to take

chances and manufacturers are prone to follow the common pattern as a safer bet rather

than releasing a controversial product or idea that might or might not be successful.

However throughout the automotive industry's history, great innovators have "boldly gone

where no man has gone before" to set new trends which have dynamically altered the

industry as a whole.

1880's & early 1900's

About hundred years ago

-The first motor car was imported

-Import duty on vehicles was introduced.

-Indian Great Royal Road was conceived.

First car brought in India by a princely ruler in 1898.

Simpson & Co established in 1840.

-They were the first to build a steam car and a steam bus, to attempt motor car

manufacture, to build and operate petrol driven passenger service and to import

American Chassis in India.

Railways first came to India in 1850's.

In 1865 Col. Rookes Crompton introduced public transport wagons strapped to

and pulled by imported steam road rollers called streamers. The maximum

speed of these buses was 33 kms. Per hour.

From 1888 Motors Spirit attracted a substantial import duty.

In 1919 at the end of the war, a large number of military vehicles came on the

roads.

In 1928 assembly of CKD Trucks and Cars was started by the wholly owned

Indian subsidiary of American General Motors in Bombay and in 1930-31 by

Canadian Ford Motors in Madras, Bombay and Calcutta In 1935 the proposals

of Sir M Visvesvaraya to set up an Automobile Industry were disallowed.

1942 Hindustan Motors Ltd incorporated and their first vehicle was made in

1950.

In 1944 Premier Automobiles Ltd incorporated and in 1947 their first vehicle

was produced.

In 1947 the Government of Bombay accepted a scheme of Bajaj Auto to replace

the cycle rickshaw by the auto and assembly started in a couple of years under a

license from Piaggio. Manufacturing Programme for the auto and scooter was

submitted in 1953 to the Tariff Commission and approved by the Government

in 1959.

In 1953 the Government decreed that only firms having a manufacturing

programme should be allowed to operate and mere assemblers of imported CKD

units be asked to terminate operations in three years.

Only seven firms namely Hindustan Motors Limited, Automobile Products of

India Limited, Ashok Leyland Limited, Standard Motors Products of India

Limited., Premier Automobiles Limited, Mahindra & Mahindra and TELCO

received approval. M&M was manufacturing jeeps. Few more companies came

up later.

Government continued with its protectionism policies towards the industry.

In 1956, Bajaj Tempo Ltd entered the Indian market with a programme of

manufacturing Commercial Vehicles, and Simpson for making engines.

1960's

In sixties 2 and 3 Wheeler segment established a foothold in the industry.

Escorts and Ideal Jawa entered the field in the beginning of sixties.

Association of Indian Automobile Manufacturers formally established in 1960.

Standard Motors Products of India Ltd. moved over to the manufacture of Light

Commercial Vehicles in 1965.

1970's

Major factors affecting the industry's structure were the implementation of

MRTP Act, FERA and Oil Shocks of 1973 and 1979.

During this decade there was not much change in the four wheeler industry

except the entry of Sipani Automobiles in the small car market.

Oil Shock of 1973 quickened the process of dieselization of the Commercial

Vehicle segment.

Three other companies, namely, Kirloskar Ghatge Patil Auto Ltd, Indian

Automotive Ltd and Sen & Pandit Engg products Ltd entered the market during

1971-75. They ultimately withdrew in early eighties.

During the seventies the economy was in bad shape. This and many specific

problems affected the Automobile Industry adversely.

1980's - The period of liberalized policy and intense competition

First phase of liberalisation announced.

Unfair practices of monopoly, oligopoly etc slowly disappeared.

Liberalisation of the protectionism policies of the Government.

Lots of new Foreign Collaborations came up in the eighties. Many companies

went in for Japanese collaborations.

Hindustan Motors Ltd. in collaboration with Isuzu of Japan introduced the Isuzu

truck in early eighties.

ALL entered into collaboration with Leyland Vehicles Ltd. for development of

integral buses and with Hino Motors of Japan for the manufacture of W Series

of Engines.

TELCO after the expiry of its contract with Daimler Benz, indigenously

improved the same Benz model and introduced it in the market.

Government approved four new firms in the LCV market, namely, DCM,

Eicher, Swaraj and Allwyn. They had collaborations with Japanese companies

namely, Toyota, Mitsubishi, Mazda and Nissan respectively.

In 1983 Maruti Udyog Ltd was started in collaboration with Suzuki, a Japanese

firm.

Other three Car manufacturers namely, Hindustan Motors Ltd., Premier

Automobiles Ltd., Standard Motor Production of India Ltd. also introduced new

models in the market.

At the time there were five Passenger Car manufacturers in India - Maruti

Udyog Ltd., Hindustan Motors Ltd., Premier Automobiles Ltd., Standard Motor

Production of India Ltd. and Sipani Automobiles.

Ashok Leyland Ltd. and TELCO were strong players in the Commercial

Vehicles sector.

In 1983-84 Bajaj Tempo Ltd. entered into a collaboration with Daimler-Benz of

Germany for manufacture of LCVs.

Important policy changes like relaxation in MRTP and FERA, delicensing of

some ancillary products, broad banding of the products, modifications in

licensing policy, concessions to private sector (both Indian and Foreign) and

foreign collaboration policy etc. resulted in higher growth / better performance

of the industry than in the earlier decades.

1990's

Mass Emission Norms were introduced for in 1991 for Petrol Vehicles and in

1992 for Diesel Vehicles.

In 1991 new Industrial Policy was announced. It was the death of the License

Raj and the Automobile Industry was allowed to expand.

Further tightening of Emission norms was done in 1996.

In 1997 National Highway Policy has been announced which will have a

positive impact on the Automobile Industry.

The Indian Automobile market in general and Passenger Cars in particular have

witnessed liberalisation. Many multinationals like Daewoo, Peugeot, General

Motors, Mercedes-Benz, Honda, Hyundai, Toyota, Volvo and Fiat entered the

market.

Various companies are coming up with state-of-art models of vehicles.

TELCO has diversified in Passenger Car segment with Indica.

Despite the adverse trend in the growth of the industry, it is resolutely trying to meet the

challenges. Various issues of critical importance to the industry are being dealt with

forcefully.

India is the second largest manufacturer of two-wheelers in the world. It stands next only to

Japan and China in terms of the number of two-wheelers produced and sold respectively.

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. India’s automobile sector

consists of the passenger cars and utility vehicles, commercial vehicle, two wheelers and

tractors segment. The total market size of the auto sector in India is approximately Rs 540

billion and has been growing at around 8 percent per annum for the last few years. Since

the last four to five years, the two wheelers segment has driven the overall volume growth

on account of the spurt in the sales of motorcycles.

The automobile industry is fairly concentrated, as in most of the segments two to three

players have cornered a major chunk of the total sales. For instance, in the two wheelers

segment, the sales volumes of Hero Honda, Bajaj Auto and TVS Motors constitute around

80 percent of the total sales. The auto components industry on the other hand is highly

fragmented, though there are dominant players in some of the critical segments.

Given the high growth expectations and a liberal government policy, the investment

potential in the India auto sector is huge. CRIS INFAC is forecasting around 10% in two

wheelers. In the next 2-3 years, the two-wheeler industry is expected to attract investment

amounting to Rs 10 billion. The expected rise in income levels, wide choice of models and

easy availability of finance at low interest rates will drive growth in, two wheelers growth,

which is likely to marginally slow down, but still grow at an average annual growth rate of

around 16%.

Profile Change in Indian Two-Wheeler Industry

The demand shift from scooters to motorcycles in the 1990s was without parallel in any comparable product category in India. This was mainly attributed to the change in customers' preference towards fuel-efficient and aesthetically appealing models, which scooter manufacturers failed to provide. The delayed launch of new, advanced scooter models, fear of four-stroke scooters being prone to increased skidding risks and vibrations, and the difficulty of maintenance also contributed to this shift.

Interestingly, the growth in the motorcycle segment was mainly driven by the demand from rural and semi-urban consumers. An estimated 60% of the demand for motorcycles came from rural and semi-urban customers. The rise in their disposable incomes on account of good monsoons in the 1990s provided the normally conservative rural and semi-urban customers with extra money that induced them to experiment with new, innovative products.

GOVERNMENT REGULATIONS AND SUPPORT

The Government of India (GoI) has identified the automotive sector as a key focus area for improving India’s global competitiveness and achieving high economic growth.The Government formulated the Auto Policy for India with a vision to establish a globally competitive industry in India and to double its contribution to the economy by 2010. It intends to promote Research & Development in automotive industry by strengthening the efforts of industry in this direction by providing suitable fiscal and financial incentives.

Some of the policy initiatives include:

• Automatic approval for foreign equity investment Upto 100 per cent of manufacture of automobiles and component is permitted.• The customs duty on inputs and raw materials has been reduced from 20 per cent to 15 per cent. The peak rate of customs duty on parts and components of battery-operated vehicles have been reduced from 20 per cent to 10 per cent. These new regulations would strengthen India’s commitment to globalisation. Apart from this, custom duty has been reduced from 105 per cent to 100 per cent on second hand cars and motorcycles.• National Automotive Fuel Policy has been announced, which envisages a phased programme for introducing Euro emission and fuel regulations by 2010.• Tractors of engine capacity more than 1800 cc for semi-trailers will now attract excise duty at the rate of 16 per cent.• Excise duty is being reduced on tyres, tubes and flaps from 24 per cent to 16 per cent. Customs duty on lead is 5 per cent.• A package of fiscal incentives including benefits of double taxation treaty is now available. These government policies reflect the priority government accords to the automobile sector. A liberalised overall policy regime, with specific incentives, provides a very conducive environment for investments and exports in the sector.

In India the Rules and Regulations related to driving license, registration of motor vehicles, control of traffic, construction & maintenance of motor vehicles etc are governed by the Motor Vehicles Act 1988 (MVA) and the Central Motor Vehicles rules 1989 (CMVR). The Ministry of Shipping, Road Transport & Highways (MoSRT&H) acts as a nodal agency for formulation and implementation of various provisions of the Motor Vehicle Act and CMVR.

In order to involve all stake holders in regulation formulation, MoSRT&H has constituted two Committees to deliberate and advise Ministry on issues relating to Safety and Emission Regulations, namely –

CMVR- Technical Standing Committee (CMVR-TSC) Standing Committee on Implementation of Emission Legislation (SCOE) CMVR- Technical Standing Committee (CMVR-TSC) – Automotive Component Manufacturers Association of India

This Committee advises MoSRT&H on various technical aspects related to CMVR. This Committee has representatives from various organisations namely; Ministry of Heavy Industries & Public Enterprises (MoHI&PE)), MoSRT&H, Bureau Indian Standards (BIS), Testing Agencies such as Automotive Research of India (ARAI), Vehicle Research Development & Establishment (VRDE), Central Institute of Road Transport (CIRT), industry representatives from Society of Indian Automobile Manufacturers (SIAM), Automotive Component Manufacturers Association (ACMA) and Tractor Manufacturers Association (TMA) and representatives from State Transport Departments. Major functions the Committee are:

o To provide technical clarification and interpretation of the Central Motor Vehicles Rules having technical bearing, to MoRT&H, as and when so desired.

o To recommend to the Government the International/ foreign standards which can be used in lieu of standard notified under the CMVR permit use of components/parts/assemblies complying with such standards.

o To make recommendations on any other technical issues which have direct relevance in implementation of the Central Motor Vehicles Rules.

o To make recommendations on the new safety standards of various components for notification and implementation under Central Motor Vehicles Rules.

o To make recommendations on lead time for implementation of such safety standards.

o To recommend amendment of Central Motor Vehicles Rules having technical bearing keeping in view of Changes in automobile technologies.

CMVR-TSC is assisted by another Committee called the Automobile Industry Standards Committee (AISC) having members from various stakeholders in drafting the technical standards related to Safety. The major functions of the committee are as follows:

o Preparation of new standards for automotive items related to safety. o To review and recommend amendments to the existing standards. o Recommend adoption of such standards to CMVR Technical Standing

Committee o Recommend commissioning of testing facilities at appropriate stages. o Recommend the necessary funding of such facilities to the CMVR

Technical Standing Committee, and o Advise CMVR Technical Standing Committee on any other issues referred

to it

In addition, the other Ministries like Ministry of Environment & Forest (MoEF), Ministry of Petroleum & Natural Gas (MoPNG) and Ministry of Non-conventional Energy Sources are also involved in formulation of regulations relating to Emissions, Noise, Fuels and Alternative Fuel vehicles.

External Environment

Industry: Automobiles: Two Wheelers

Segments: Presence in all segments

Entry Barriers:

Entry barriers are high.

The market runs on high economies of scale and on high economies of scope.

The need for technical expertise is high.

Owning a strong distribution network is important and is very costly.All these make the barrier high enough to be a deterrent for new entrants.

High competition from the substitute available in the market as the product is innovative and it has no existing competitor at moment.

Legal and political constraints for the set up of company and launching of the product.

Supplier Bargaining Power:

Suppliers of auto components are fragmented and are extremely critical for this industry since most of the component work is outsourced. Proper supply chain management is a costly yet critical need.

Buyer's Bargaining Power:

Buyers in automobile market have more choice to choose from and the increasing competition is driving the bargaining power of customers uphill. With more models to choose from in almost all categories, the market forces have empowered the buyers to a large extent.

Industry Rivalry:

The industry rivalry is extremely high with any product being matched in a few months by competitor. This instinct of the industry is primarily driven by the technical capabilities acquired over years of gestation under the technical collaboration with international players.

Substitutes:

There is no perfect substitute to this industry. Also, if there is any substitute to a two-wheeler, Cars, which again are a mode of transport, do never directly compete or come in consideration while selecting a two-wheeler, cycles do never even compete with the low entry level moped for even this choice comes at a comparatively higher economic potential.

Summarizing the industry analysis, it can be said that the two-wheeler market is attractive as it scores well on three out of five categories.

Key Earnings Drivers:

Below are the key factors, which strongly affect the auto industry: -

Government policy impact on petrol prices: Petrol prices determine the running cost of two/three wheelers expressed in Rupees per kilometer. Petrol prices are the highest in India as GOI subsidizes kerosene and diesel. But with the recent change in GOI policy to reduce the subsidy, the prices of petrol will remain constant at the current prices. This will have a positive effect on purchases of two/three wheelers.

Improvement in disposable income: With the increase in salary levels, due to entry of multinationals following liberalization process and fifth pay commission, the disposable income has improved exponentially over the years. This will have multiplier effect on demand for consumer durables including two-wheelers.

Changes in prices of second-hand cars: The second hand car prices of small cars have come down sharply in the recent past. This will shift the demand from higher-end two-wheelers to cars and affect the demand for two-wheelers negatively. A further drop in second-hand car prices will lead to pressure on the two-wheeler majors who plan to release higher-end scooters and motorcycles.

Implementation of mass transport system: Many states have planned to implement mass transport systems in state capitals in the future. This will have negative impact on demand for two-wheelers in the long run. But taking into account the delays involved in implementation of such large infrastructure projects the demand to be affected only five to seven years down the line.

Availability of credit for vehicle purchase: The availability and cost of finance affects the demand for two- and three-wheelers as the trend for increased credit purchases for consumer durables have increased over the years. Therefore, any change with respect to any of these two parameters as a result of change in RBI policy has to be closely watched to assess the demand for two- and three-wheelers.

Company Profile:

NAME: Ingenious Power Ltd.

DATE OF LAUNCH: 21st October 2006.

PROMOTERS: Mohd. Shuaib (Partners)

Mohd. Waris Ali (Partners)

Rukhsana Yasmeen (Partners)

PRODUCT: Hybrid two wheelers automobiles that works

on Solar energy/ Petrol/ Battery.

PROPOSED MODELS: * Zeal-Bike

* Miracle-Scooter

* Eco-Carrier

PROJECT: New indigenously developed hybrid (battery/

solar energy/ petrol) operated Two – Wheelers

for the first time in India which provide an

option to the user to switch to any mode as

and when needed.

INTRODUCTION

Founded and headquartered in Delhi India, Ingenious Ltd. Company is setting up an auto project for manufacturing of an innovative and conceptual product viz Electric Motor Bike. The project will have great significance in the present day context of increasing pollution due to auto emission and is expected to create a revolution in the Indian automobile market.

Its products manufacturing will commence in Delhi & Uttar Anchal. Ingenious Ltd. is entering the Indian market with the aim of establishing its brands as a necessity for the Indian buyers.

The company will follow a strategic positioning approach for the target market. Ingenious Ltd. has kept into account the income & behavioral factor of the Indian buyers while designing the product. It is important for the company to understand the consumer behavior before it goes into such a market. The Indian consumer for the first time will have a premium product which is eco-friendly and affordable.

OBJECTIVES

INGENIOUS POWER LIMITED aims to promote the improvement of urban environment quality of air and noise levels by an innovative combination of clean vehicle technologies for different vehicle types i.e. HYBRID BIKES AND SCOOTERS with other recent advances in urban transportation schemes such as application of transport information, management and mobility management schemes. While carrying such activities ingenious power will look at the other aspects like:

1. Image building.2. Establishing the brand in the Indian market through various strategies and

marketing mix.3. Achieving image, profit and growth through marketing strategies and promotion

mix over the period of time.

WITHIN IT, THE FOLLOWING ACTIVITIES WILL BE PERFORMED:

Definition of the technical specifications for the vehicles and the necessary infrastructure and system development.

Development of an appropriate training scheme oriented towards the efficient use of clean vehicles.

Planning and implementation of pilot tests of the clean vehicles and the associated technologies in the cities using our products.

Technological and socio-economic assessment, usability and risk analysis of the proposed scheme.

Review, monitoring and evaluation of the general legal and organisational issues associated with clean vehicles.

Cost Benefit Analysis (CBA) of clean vehicle technologies and cost-efficiency analysis (CEA) of the proposed policies.

Formulation of application guidelines and policy recommendations

Raw Materials

The primary raw materials used in the manufacture of the body of motorcycle are metal, plastic and rubber. The motorcycle frame is composed almost completely of metal, as are the wheels. The frame may be overlaid with plastic. The tires are composed of rubber. The seat is made from a synthetic substance, such as polyurethane. The power system consists of a four-stroke engine, a carburetor to transform incoming fuel into vapor, a choke to control the air-fuel ratio, transmission, and drum brakes. The transmission system contains a clutch, consisting of steel ball flyweights and metal plates, a crankshaft, gears, pulleys, rubber belts or metal chains, and a sprocket. The electrical system contains a battery, ignition wires and coils, diodes, spark plugs, head-lamps and taillights, turn signals, solar cells and a horn.

A cylindrical piston, made of aluminum alloy (preferred because it is lightweight and conducts heat well), is an essential component of the engine. It is fitted with piston rings made of cast iron. The crankshaft and crankcase are made of aluminum. The engine also contains a cylinder barrel, typically made of cast iron or light alloy.

The Manufacturing Process1. Raw materials as well as parts and components arrive at the manufacturing plant by

truck or rail, typically on a daily basis. As part of the just-in-time delivery system on which many plants are scheduled, the materials and parts are delivered at the place where they are used or installed.

2. Manufacturing begins in the weld department with computer-controlled fabrication of the frame from high strength frame materials. Components are formed out of tubular metal and/or hollow metal shells fashioned from sheet metal. The various sections are welded together. This process involves manual, automatic, and robotic equipment.

3. In the plastics department, small plastic resin pellets are melted and injected into molds under high pressure to form various plastic body trim parts. This process is known as injection molding.

4. Plastic and metal parts and components are painted in booths in the paint department using a process known as powder-coating (this is the same process by which automobiles are painted). A powder-coating apparatus works like a large spray-painter, dispersing paint through a pressurized system evenly across the metal frame.

5. Painted parts are sent via overhead conveyors or tow motor (similar to a ski lift tow rope) to the assembly department where they are installed on the frame of the motorcycle.

6. The engine and solar cells are mounted in the painted frame, and various other components are fitted as the motorcycle is sent down the assembly line.

7. Wheels, brakes, wiring cables, foot pegs, exhaust pipes, seats, saddlebags, lights, radios, and hundreds of other parts are installed on the motorcycle frame. A Honda Gold Wing motorcycle, for example, needs almost as many parts to complete it as a Honda Civic automobile.

WORKING OF SOLAR CELL

Solar cells are powered by the sun's energy. The main component of a solar bike is its solar array, which collect the energy from the sun and converts it into usable electrical energy. The solar cells collect a portion of the sun’s energy and store it into the batteries of the solar bike. Before that happens, power trackers converts the energy collected from the solar array to the proper system voltage, so that the batteries and the motor can use it. After the energy is stored in the batteries, it is available for use by the motor & motor controller to drive the bike. The motor controller adjusts the amount of energy that flows to the motor to correspond to the throttle. The motor uses that energy to drive the wheels.

Quality Control

At the end of the assembly line, quality control inspectors undertake a visual inspection of the motorcycle's painted finish and fit of parts. The quality control inspectors also feel the motorcycles with gloved hands to detect any bumps or defects in the finish. Each motorcycle is tested on a dynamometer. Inspectors accelerate the motorcycle from 0-60 mph. During the acceleration, the "dyno" tests for acceleration and braking, shifting, wheel alignment, headlight and taillight alignment and function, horn function, and exhaust emissions. The finished product must meet international standards for performance and safety. After the dyno test, a final inspection is made of the completed motorcycle. The motorcycles are boxed in crates and shipped to customers across North America and around the world.

SOURCES OF FINANCE

Various sources through which the seed money will be raised for the set up of the manufacturing plant, distribution network and selling of the product efficiently in order to earn profits are:-

1. Self finance:- The promoters will contribute some portion of the expense for the set up of the money

from their own personal funds. The promoters will give the money in equal ratio and make some reserve and surplus account for the contingency and other purposes.

2. Venture Capital

Venture Capital is one of the most relevant sources of finance for innovative companies to fund their investments. Venture capital consists of funds raised on the capital market by specialised operators.

Venture Capital funds buy shares or convertible bonds in the company. They do not invest in order to receive an immediate dividend, but to allow the company to expand and ultimately increase the value of their investment. Hence, they are interested in innovative ideas with very rapid growth rates.

As our product is new and innovative, this will also be an option to raise funds for the company set up.

3. Bank loans:-

Term loans will be taken from banks and financers as per requirement and availability of the money at certain interest rate.

o Short term o Mid term

o Long term

4. Leasing:-

The company will set up its manufacturing plant in Uttaranchal where government has provided attractive offers and subsidiaries. The land will be taken on lease from the government against the yearly payment of fixed amount of interest on the lease. Few types of machinery can also be taken on lease.

5. Hire purchase

The product manufacturing will require few highly technical and costly types of machinery. Such machineries will be taken on hire and purchase. Especially those machineries which

are not available in India and it have to be imported in the country. A fixed amount of yearly or monthly installment will be paid for the machine.

BUSINESS STRATEGY

Our business strategy will include the determination of the most beneficial product market

in term of establishing itself in this new product segment. The most important factor for the

success of Ingenious Ltd. brand is the perception of the consumer and to what extent it can

build a positive image in the consumer’s mind. The intensity of the business environment,

the sustainable competitive advantage of a quality product will give it a strong base to build

the market.

It is important for us to adopt a different strategy for the Indian market since it is composed

of quality buyers as well as those who will buy for their family. Thus, we shall introduce

some new strategies so as to establish our self in the Indian market and develop a strong

customer base.

The Model used for preparing the marketing strategy by INGENIOUS LTD. in the

Indian Market

Product Range

External Analysis

Competitors Analysis

Internal Analysis

Environment Analysis

Marketing Strategies

Future Plans

Conclusion

The first growth vector will involves gaining penetration with the existing product-market

– Ingenious Ltd. will attempt to attract customers from competitors through its strategic

positioning and will establish strong brand equity.

The second growth vector will involves product expansion while staying in the current

market. Ingenious Ltd. will then offer a new product. It will be aimed not only for the

existing market but also for the price conscious segment.

The third growth vector will apply the same products to the new markets.

The fourth growth vector will be to diversify into new product markets. We shall

concentrate on the second growth vector and study the strategy with respect to the two

wheeler market.

The Indian market with its vast size and demand base offers great opportunities to

marketers. Two-thirds of countries consumers live in rural areas and almost half of the

national income is generated here. It is only natural that rural markets form an important

part of the total market of India though the urban market is increasing drastically. Our

nation is classified in around 450 districts, and approximately 630000 villages, which can

be sorted in different parameters such as literacy levels, accessibility, income levels,

penetration, distances from nearest towns, etc.

The rural bazaar is booming beyond everyone's expectation. This has been primarily

attributed to a spurt in the purchasing capacity of farmers now enjoying an increasing

marketable surplus of farm produce. In addition, an estimated induction of Rs 140 billion in

the rural sector through the government's rural development schemes in the Seventh Plan

and about Rs 300 billion in the Eighth Plan is also believed to have significantly

contributed to the rapid growth in demand. The high incomes combined with low cost of

living in the villages have meant more money to spend. And with the market providing

those options, trends and tastes are also changing.

Thus, Ingenious Ltd. has decided to enter this market with the basic idea of tapping the

Indian middle class which had established itself as a huge untapped market in the

perceptions of a lot of national & multinational players who were then trying forays into

the Indian market.

Keeping all this in mind Ingenious Ltd. will launch its ELECTRO range of two wheelers

addressing the Indian palate with the first time ever product launched specifically for a

local rural & urban market to some extent. Ingenious Ltd. will position on pricing and its

all-pervasive cheap plank. . The ZEAL BIKE will be priced at Rs. 55,000-60,000

especially meant for guys segment, MIRACLE SCOOTER will be priced around Rs.

40,000- 45,000 designed for general public not exclusively for males or females, it will

cater also veterans and middle-aged and ECO CARRIER will be introduced as a product

for public transport. Ingenious Ltd. through this product range will try to make its presence

on the Indian Rural & Urban market by positioning its product as a Eco-Friendly,

Affordable & Comfortable Bike.

Benefits sought:

‘Customer is the profit, everything else is the overhead’

The basic contention of people has been price and safety. People prefer bikes which

provide healthy drive with proper comfort and good looks along with a reasonable price

and not just the Brand name. The product still has a long way to go before it proves to be a

success.

The customer buys the product as per the benefits he/she gets out of the deal. The company

has to sell the advantages of the product as per the benefits for the consumer, keeping either

the price as the distinguishing factor or the quality as perceived by the consumer.

NEED OF COMPARISION

Consumer Mindset

The consumers always have a different loyalty status for different brands.

Sometimes they buy some brand due to the price or sometimes due to the features.

Studying the consumer’s mindset is of vital importance as perception of individuals

at the buying stage of various brands is unpredictable and ever changing.

Market Share

The market share of the players in the two wheeler auto market needs to be studied

to know which company is in the booming stage and which company is in its

closure stage. Also the advertisement and promotional share needs to be studied.

Thus, market share helps us know the current market leader and market follower so

that our company can develop an efficient marketing strategy for its product range

after analyzing the current market player’s position.

SWOT Analysis

The SWOT Analysis i.e. the Analysis of the Strengths, Weaknesses, Opportunities

and Threats of the company products and its competitors at a glance. It needs to be

compared to get an overall analysis of all the major companies and to know the

company having better strengths, more opportunities and on the other hand the

company having more of weaknesses and threats.

The Indian automobile market is currently estimated at a modest Rs. 504bn. It is projected

to grow at 16% annually.

As our product is innovative and one of its kind in Indian market it does’t have any

immediate competitors but substitute to our product are present.

If well established brand like HERO HONDA come up with same concept they

have advantage over us due to their well established brand image and availability of

resources.Hence our strategies will be towards creating a brand image in the initial year

through marketing mix and after sales service.

The Hero Honda dominates the market with a combined share of 48% it a veritable

giant in the industry. TVS and Bajaj Auto are tied at 23% each according to ORG

estimates.The present market for two wheeler is segmented mainly on the bases of income

and lifestyle. Where Honda and Yamaha cater to the premium class, Hero Honda cater to

the popular class, Bajaj and TVS cater to the popular and economy class respectively.

HERO HONDA

Launch : 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 veritable 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.

Target: The target group of Hero Honda is different for its different bike ranges.

Product: Splender plus, Karizma, Glamour, Passion Plus, CD Dawn and various other

models.

Positioning:- Designed with your comfort in mind, with a contoured low-slung seat,

specially designed handlebar and a strong double-cradled tubular frame. The bikes by Hero

Honda epitomizes riding pleasure. Truly, the limousine of Indian two wheelers.

Differentiation: Better or wider distribution: the distribution network of the splendor plus is

excellent example. Their distribution divided into four zones.

Price:-

Price Range

  Prices (in Rupees)

Bike / Scooter Ex. Showroom Price On Road Price

CD DELUXE

CD DAWN

34,000

30,899

36,250

34,912

PASSION PLUS DRUM 43,816 47,920

SPLENDER PLUS DRUM

ACHIEVER

GLAMOUR

42,351

51,650

50,350

46,328

53,650

54,150

KARIZMA

PLEASURE SCOOTER

74,292

34,240

81,049

36,340

Place:- It distribution channel is one of the largest with distributers spread all over the

country having more than 500 service stations.

Promotions:- Hero Honda has roped in film actor Hrithik Roshan, Captain of Indian

Cricket team Sourav Ganguly, Mohammad Kaif, Harbhajan Singh, Zaheer Khan, Yuvraj

Singh and Virender Sehwag as its brand ambassadors.

They will endorse the company products, attend corporate and brand events and help

promote its "We Care" campaign comprising safety riding, environment and friendliness. 

BAJAJ AUTO

Launch: Bajaj Auto Ltd was incorporated in 1945 as Bachraj Trading Corporation.

Initially it started by assembling two and three wheelers in collaboration with Piaggio of

Italy. After the expiry of the agreement in 1971 the two and three wheelers acquired the

brand name of Bajaj. Bajaj Auto's two vehicle manufacturing plants are spread over 1 500

acres in two cities, produce a vehicle every 17 seconds and employ over 18 000 people.

Target: Bajaj Auto cater to the popular and economy class respectively.

Product: Chetak, Pulsar, Discover, Eliminator etc.

Positioning: It is a value that makes Bajaj worthy of credibility through integrity, of trust

through sensitivity and of loyalty through interdependence.

Price:

Price Range

  Prices (in Rupees)

Bike/ Scooter Ex. Showroom Price On Road Price

Bajaj Chetak

Bajaj CT 100

30,899

35,100

34,912

38,000

Bajaj Discover

Pulsar DTS-i

43,700

52,345

46,150

55,750

Bajaj Eliminator

Bajaj Avenger

67,245

60,000

72,344

63,250

Differentiation: Better value for the consumers money (passport schemes): additional

facilities are given to the customers like issuing passports and giving free insurance. More

dependable product and service.

YO-BIKES

Electrotherm’s range of seven Yo-Bikes are priced between Rs 14,000 and Rs 23,000

approximately, Ace Motor’s E-Bikes command Rs 26,500 each. The economy kicks in

where running costs are concerned. While a regular two-wheeler has a fuel cost of Rs 1 per

kilometer, electric bikes can run for as little as 10 to 15 paise per kilometer, inclusive of

battery maintenance.

Market for electric vehicles isn’t restricted to bikes alone. Bajaj Auto is currently

experimenting with three-wheelers, while Electrotherm is also looking at the feasibility of

launching battery-powered hybrid buses

MARKET SHARE OF THE COMPETITORS

Ingenious Ltd. does not come in this graph because it’s a new entrant in to the two wheeler

segment of the automobile industry.

MARKET SHARE OF DIFFERENT COMPANIES OF TWO WHEELER SECTOR - 2005

The major players in the domestic two-wheeler industry have announced robust growth in

volumes for the month of December 2005. The total motorcycle sales of the top three

players registered a 54.1% yoy growth to 437,974 units. The major contributor to the

growth was Bajaj Auto, which registered a 100.7% yoy growth in volumes for motorcycles.

Bajaj Auto

Table: December month volumes

  Dec-05 Dec-04 yoy (%) April - Dec 05 April - Dec 04 Yoy (%)

Motorcycle 143,727 71,623 100.7 1,053,566 760,658 38.5

Total two wheeler 154,101 85,086 81.1 1,178,017 956,188 23.2

Three-wheeler 14,705 21,483 (31.6) 168,260 168,745 (0.3)

Total Vehicles 168,806 106,569 58.4 1,346,277 1,124,933 19.7

Table: Motorcycle sales

2005 Growth (%)

90,532 27.4

87,663 0.5

97,595 18.7

103,260 32.4

106,745 39.6

126,420 32.1

143,491 34.0

154,137 68.9

143,727 100.7

Although Bajaj Auto registered a 100.7% yoy growth in motorcycle sales, the volumes

declined by 6.8% on a month on month (mom) basis. The cumulative motorcycle sales

have crossed the one million mark and registered a 38.5% yoy growth to 1,053,566 units.

All three Bajaj motorcycles - CT100, Discover DTS-I and Pulsar DTS-I - are leaders in

their respective segments. The three-wheeler sales decreased substantially by 31.6% yoy to

14,705 units and on a cumulative basis, the sales were almost flat at 168,260 units.

Hero Honda

Table: Motorcycle sales

Nos 2005 2004 Growth (%)

April 196,024 134,318 45.9

May 212,177 163,582 29.7

June 200,922 160,889 24.9

July 205,654 143,141 43.7

August 191,635 145,730 31.5

September 217,507 157,583 38.0

October 245,475 207,472 18.3

November 232,021 203,995 18.3

December 230,751 160,191 44.0

Hero Honda registered a 44% yoy growth in motorcycle sales. However, on a mom basis,

the volumes declined marginally by 0.5%. On a cumulative basis, the company witnessed a

31% yoy growth to 1,935,981 units.

TVS Motors

Table: Motorcycle sales

Nos 2005 2004 Growth (%)

April 46,881 58,291 (19.6)

May 43,180 63,973 (32.5)

June 48,159 56,444 (14.7)

July 52,958 57,227 (7.5)

August 49020 62234 (21.2)

September 59,172 64,958 (8.9)

October 74,683 61,777 20.9

November 65,066 48,052 35.4

December 63,496 52,464 21.0

Table: Scooterettes sales

Nos 2005 2004 Growth (%)

April 15,172 9,880 53.6

May 17,321 14,334 20.8

June 22,339 14,403 55.1

July 22,501 19,249 16.9

August 18576 17446 6.5

September 23,150 18,201 27.2

October 21,291 20,779 2.5

November 20,466 16,803 21.8

December 14,866 13,671 8.7

Table: Moped sales

Nos 2005 2004 Growth (%)

April 18,979 16,576 14.5

May 20,394 17,896 14.0

June 21,447 21,192 1.2

July 24,765 21,137 17.2

August 21904 21640 1.2

September 22,515 22,830 (1.4)

October 21,722 21,752 (0.1)

November 22,118 20,601 7.4

December 18,524 18,171 1.9

TVS Motors reported a strong 21% yoy increase in motorcycle sales. However, on a mom

basis, the volumes declined by 2.4%. Mopeds and scooterettes segments registered 8.7%

and 1.9% yoy increase in volumes respectively. However, the volumes for both the

segments declined by 27.4% and 16.3% respectively on a mom basis. On a cumulative

basis, the motorcycle segment witnessed a fall of 4.3% yoy, scooterettes segment saw an

increase of 21.4% yoy and the moped segment witnessed 5.8% yoy increase.

In the motorcycle segment, TVS Victor GLX 125cc and TVS Centra have witnessed steady

growth and the new TVS Victor GX 110cc has received excellent response across the

country. In the scooterettes segment, TVS Scooty Pep received yet another accolade by

winning the outstanding design award in the two-wheeler category in the recently

concluded Business World – NID Design Excellence Awards 2005.

The above present market analysis shows that there is a huge scope and expansion growth

for the major players as well as the new entrants in the two wheeler segment. So, on this

basis also, our company, INGENIOUS LTD has decided to launch two wheelers running

on batteries.

High initial launch cost

There is a large front-ended investment made in new products including cost of product development, market research, test marketing and most importantly its launch. To create awareness and develop franchise for a new brand requires enormous initial expenditure is required on launch advertisements, free samples and product promotions. Launch costs are as high as 50-100% of revenue in the first year and these costs progressively reduce as the brand matures, gains consumer acceptance and turnover rises. For established brands, advertisement expenditure varies from 5 - 12% depending on the categories. It is common to give occasional push by re-launches, which involves repositioning of brands with sizable marketing support.

Marketing driven

In relative terms, marketing function has greater importance in the automobile industry. The players have to reach out to mass population and compete with several other brands. The perceived differences are greater than the real differences in the product.

Market research

Customers purchase decisions are based on perceptions about brands. They also keep on changing with fashion, income and changes in lifestyle. Unlike industrial products, it is difficult to differentiate products on technical or functional grounds. With increasing competition, companies spend enormous sums on product launches. Market research and test marketing become inevitable. The business rests on the two aspects that are brand equity and distribution network.

Brand equity

Brand equity refers to the intangible asset in the form of brand names. The consumer's loyalty for a particular brand is due to the perception that the product has distinctively superior and consistent quality, satisfies his/ her specific needs and provides better value for money than other competing brands. A successful brand generates strong cash flow which enables the owner of the brand to reinvest a part of it in the form of aggressive advertisement/ promotion to reinforce the perceived superiority of the brand. The worth of a brand is manifested in the consumer's insistence on a particular brand or willingness to pay a price premium for the preferred brand.

Distribution network

In this sector, one of the most critical success factors is the ability to build, develop, and maintain a robust distribution network. Availability near the customer is vital for wider penetration as most products are high value products. It takes enormous time and effort to build a chain of stockiest, retailers; dealers etc and establish their loyalties. There are entry barriers for a new entrant as a new product is typically slow moving and has lesser consumer demand. Therefore dealers/ retailers are reluctant to allocate resources and time. Established players use their clout to inhibit new entrants. However, when a product offers a strong breakthrough, equity build up rapidly and so does the distribution network.

The major problems faced while marketing in the Indian market

a. Underdeveloped People and Underdeveloped Markets:

The number of people below poverty line has not decreased in any appreciable manner.

Thus underdeveloped people and consequently underdeveloped market by and large

characterize the Indian markets.

b. Many Languages and Dialects:

The number of languages and dialects vary widely from state to state, region to region

and probably from district to district. The messages have to be delivered in the local

languages and dialects. Even though the numbers of recognized languages are only 16,

the dialects are estimated to be around 850.

c. Dispersed Market:

Areas are scattered and it is next to impossible to ensure the availability of a brand all

over the country. Seven Indian states account for 76% of the country’s retail outlets, the

total number of which is placed at around 3.7 million. Advertising in such a highly

heterogeneous market, which is widely spread, is very expensive.

d. Prevalence of spurious brands and seasonal demand: -

For any branded product there are a multitude of ‘local variants’, which are cheaper,

and, therefore, more desirable to mass.

e. Different way of thinking: -

There is a vast difference in the lifestyles of the people. The kind of choices of brands

that an urban customer enjoys is different from the choices available to the rural

customer. The rural customer usually has 2 or 3 brands to choose from whereas the

urban one has multiple choices. The difference is also in the way of thinking. The rural

customer has a fairly simple thinking as compared to the urban counterpart.

The concept is to make the product different from those of its competitor. When we look at

the Indian two wheeler market we see that the leaders Hero Honda has constantly

maintained its market leadership by constantly differentiating on the basis of newer

products, newer slogans like “Jet Set Go”

And coming up with line extensions with regular frequency. The only alternative for

Ingenious Ltd. to survive in this industry will be to differentiate itself. This differentiation

could be on the basis of the marketing mix. (Product, Price, Promotion, Place) Thus, as per

the different factors of marketing mix 4 Different strategies are made to market in the

developing cities in India.

We will follow the differentiation high cost focus strategy as our product is one of its kind.

It has no competition from any company even though substitutes are available for this

product i.e. existing product and new battery operated bike “YO BIKES” launched

recently in the market.

The need for environment friendly yet cost efficient motor vehicles is the strong need and

demand of the consumers which we will fulfill; hence we can charge the amount we want.

We will keep track of our product on different life cycle in future so that necessary

strategies and steps could be taken to boost up the sales and build brand image in the

market. For that purpose BCG MATRIX, PORTER’S GENERIC MODEL etc will be used.

As our product is very innovative and it doesn’t have any competitors right at the moment

the strategy that will be followed is the high cost focused strategy.

The diagram below shows the strategy matrix:-

COMPETITIVE ADVANTAGE

BROAD TARGET

NARROW TARGET

LOW COST HIGH COST PRODUCTS/SERVICES PRODUCTS/SERVICES

The hybrid bikes are innovative and new concept in the market. The product yet has to penetrate in the market. This product will be bought only by those consumers who are initiators and take enough risk to buy new and innovative product. This product will also attract the segment that are conscious about environment pollution and seeks environment friendly products.These customers will form a small focused group in the market. As there is no immediate competitor for our product, we can charge the amount we want after evaluation of benefits and returns the product will give to our consumers.Hence, the strategy followed will be “HIGH COST FOCUSED STRATEGY”. By the time when others will introduce the same product, it can follow cost leadership as it will be market leader and can achieve economies of scale so as to reduce the cost per unit of the product.

COST LEADERSHIP DIFFERENTIATION

FOCUSSED COST LEADERSHIP

FOCUSSED DIFFERENTIATION

CO

MP

ET

ITIV

E S

CO

PE

Description of the Model

One axis shows the market share relative to the industry leader which is always the leftmost circle.

The other axis shows market growth rate for the industry.

A circle is drawn for each competitor. The size of each circle represents that company's dominance.

 

Characterize Your Enterprise

The expert system will position your enterprise on the chart based upon your description of: share of market condition of the market You can trace through the supporting analysis and its conclusions, adjusting your input until you are satisfied your description accurately characterizes your enterprise.

The Boston Matrix

Cash CowsDogs

StarsProblem ChildrenMarket Growth

Market Share

High

LowHigh

Our product will be in QUESTION MARK STAGE at the time of launch. Where it will require high investments and high advertisement and sales promotion. The returns will be very less at the initial level but it will attract lot more customers and gain high market share share due to its new and innovative concept and lack of any competitor in the market.

Analysis of Your Enterprise PositionStars Cash Cows Question Marks Dogs

High growthHigh share

Low growthHigh share

o High growth because our product is innovative, cost effective and environmental friendly.

o Low or nil share because it’s just been launched.

Low growthLow share

Business is likely to generate enough cash to be self sustaining.

Recommended tactics: promote aggressively expand your product or service invest in R & D

Business can be used to support other business units. defend & maintain

Business requires a lot of cash to maintain market share. invest more cashor, divest Heavy

advertisement and sales promotion

Business is a cash trap. focus on short term avoid risky project limited future

o At this phase of its initial development INGENIOUS power limited is in its

question mark stage. At this stage it has a relatively high market potential but low growth.

o The company will do heavy advertisement and involve in sales promotion to create awareness in the market.

o The company will achieve its break even point through aggressive selling and providing after sales benefits.

o Once the company will start earning its profits after reaching its break even point the product will enter into star age. The product will start earning revenues and market share. The expansion strategy can be followed to establish strong competitive position.

o Once the company will start earning generous profits and enough of the market

share, the growth of the product will be stable but revenues will be large. At this point of time reinvestment or stability strategies can be followed. Diversification strategy will help in earn profits in other areas of related or unrelated products.

o If timely decision will not be taken in cash cow stage or any other stage of the product life cycle, the product will enter into declining stage i.e. declining stage. The strategies that could be used at this point of time are retrenchment or introduce some innovation in the product to enter in the stage of problem child.

The Product Life Cycle and the Boston Matrix

Sales

Time

AB

C

D

(1) (2) (3)

Importance of maintaining a balance of products in the portfolio at different stages of the PLC – Boston Matrix helps with the analysis

• Product Life Cycle – shows the stages that products go through from development to withdrawal from the market

• Product Portfolio – the range of products a company has in development or available for consumers at any one time

• Managing product portfolio is important for cash flow

• Product Life Cycle (PLC):• Each product may have a different life cycle• PLC determines revenue earned• Contributes to strategic marketing planning• May help the firm to identify when a product needs support, redesign,

reinvigorating, withdrawal, etc.• May help in new product development planning• May help in forecasting and managing cash flow

• The Stages of the Product Life Cycle:– Development– Introduction/Launch– Growth– Maturity– Saturation– Decline– Withdrawal

Sales

Time

Development Introduction Growth

Maturity

Saturation

Decline

The Development Stage:

• Initial Ideas – possibly large number

• May come from any of the following – – Market research – identifies gaps in the market– Monitoring competitors– Planned research and development (R&D)– Luck or intuition – stumble across ideas?– Creative thinking – inventions, hunches?– Futures thinking – what will people be using/wanting/needing

5,10,20 years hence?

• Product Development: Stages– New ideas/possible inventions– Market analysis – is it wanted? Can it be produced at a profit? Who

is it likely to be aimed at?

– Product Development and refinement– Test Marketing – possibly local/regional– Analysis of test marketing results and amendment of

product/production process– Preparations for launch – publicity, marketing campaign

• Introduction/Launch:– Advertising and promotion campaigns– Target campaign at specific audience? – Monitor initial sales– Maximise publicity– High cost/low sales– Length of time – type of product

• Growth:– Increased consumer awareness– Sales rise– Revenues increase– Costs - fixed costs/variable costs, profits may be made– Monitor market – competitor’s reaction?

• Maturity:– Sales reach peak– Cost of supporting the product declines– Ratio of revenue to cost high– Sales growth likely to be low– Market share may be high– Competition likely to be greater

– Price elasticity of demand?– Monitor market – changes/amendments/new strategies?

• Saturation:– New entrants likely to mean market is ‘flooded’– Necessity to develop new strategies becomes more pressing:

• Searching out new markets:o Linking to changing fashionso Seeking new or exploiting market segmentso Linking to joint ventures – media/music, etc.

• Developing new uses• Focus on adapting the product• Re-packaging or format• Improving the standard or quality• Developing the product range

• Decline and Withdrawal:– Product outlives/outgrows its usefulness/value– Fashions change– Technology changes– Sales decline– Cost of supporting starts to rise too far– Decision to withdraw may be dependent on availability of new

products and whether fashions/trends will come around again?

Product Based Marketing Strategy

A. Product Quality:

Ingenious Ltd. will put forward itself to the customer as a product of superior quality

with features like eco-friendly, no harmful gas emission because it is totally battery

operated and at a reasonable price. Ingenious Ltd. will adopt a twofold strategy. One

will be to introduce a new product in the market, which is priced less than its present

brand of two wheelers like TVS, Bajaj & Hero Honda, and will lead ad campaigns so

that the customer can perceive it as a superior & reliable product. This strategy will be

suited to Ingenious Ltd. since in the automobile battery market, (batteries) is already

seen as a premium product. Looking at the level of success of this particular strategy,

Ingenious Ltd. will go for line extensions at a later stage. The point to be noted here is

that a quality strategy need not be looked at as a small competitor's strategy rather it is

an investment for the long run.

The other strategy will be to hold on to its present brand of batteries. If we critically

examine the success of Hero Honda in recent times we find that it is largely due to its

Splendor model, which is targeted at the middle and upper middle class segment.

B. Product Features:

Pollution noise free two – wheeler ( due to battery/ solar energy)

Economical: Rs. 3 -7 per 100 kms.

Price range: Rs.40,000 – 60,000/- (Inclusive of Tax)

Extremely safe and reliable to drive.

No PUC required.

Battery design: Indigenous and full charge in 60 mins.

Built in Charger.

Switch to any mode as per the preference.

Economical.

Works on both battery and solar energy, therefore usage of petrol is very less.

Innovative design –Gen X

C. Brand Name:

The name of a company will also help to differentiate itself and build image in the long

run. When Ingenious Ltd. will first come to the Indian market as Hybrid two wheeler

automobile. It will try to use its brand name to pierce the Indian market and

revolutionize the two wheeler market. This has been hardly been the case in the launch

of the motorcycle segment. Ingenious Ltd. will leverage on its brand name in order to

attain competencies.

D. Product Varieties

Ingenious Ltd. will launch its bike and scooter of two wheelers addressing the Indian

palate with the first time ever product launched specifically for a local rural & urban

market to some extent. Ingenious Ltd. will position on pricing and its all-pervasive

cheap plank. The ZEAL BIKE will be priced at Rs. 55,000-60,000 especially meant

for guys segment, MIRACLE SCOOTER will be priced around Rs. 40,000- 45,000

designed for general public not exclusively for males or females, it will cater also

veterans and middleaged and ECO CARRIER will be introduced as a product for

public transport..

E. Price Based Marketing Strategy

As Ingenious Ltd. will be introducing 2 variety of two wheelers, ZEAL BIKE meant

for guys segment and MIRACLE SCOOTER designed for general public not

exclusively for males or females, it will cater also veterans and middleaged, discounts

will be given to the buyers on cash purchases.

F. Promotion Based Marketing Strategy

To derive success in the Automobile two wheeler segment it is important to have a

good after sales service channel. Infact a good service channel guarantees a good reach

to the customer which is so vital to derive profits. When we look at the key success

factor that drove Hero Honda & Bajaj, it has been its after sale service.

Geographic Segmentation:

Segmentation of Ingenious Ltd. is done considering the consumer market. The major

markets in India for two – wheeler across all segments is constituted by the western,

Northern & Southern Region. In terms of weight age, the largest sales came from North,

West, South & East respectively according to ORG Estimates.

The leading States in India in terms of two – wheeler population are Gujurat, Maharashtra,

U.P, A.P, M.P, Punjab, Delhi & Rajasthan.

Uttaranchal is a major industrial zone of Uttar Pradesh and Delhi & is well connected by

rail and road which is beneficial for procurement of raw materials and marketing of

finished goods and cheap availability of man power.

Due to the above pros, the product has been segmented on the basis of location. Our plant

will be located at Uttaranchal.

ZEAL BIKE

Zeal Bike is specially designed for the Male Customer Group aged between

18 – 40 years due to the following features:

More Mileage

Low maintenance

125 cc.

Price range: Rs.35,000 – 40,000/- (Inclusive of Tax)

Extremely safe and reliable to drive.

Battery design: Indigenous and full charge in 60 mins.

Built in Charger.

Switch to any mode as per the preference.

Economical.

Works on both battery and solar energy, therefore usage of petrol is very less.

Innovative design –Gen X

MIRACLE SCOOTER

MIRACLE SCOOTER is designed for general public not exclusively for males or females;

it will cater also veterans and middleaged aged between 18 – 50 years due to the following

features:

Light Weight

Extremely safe and reliable to drive.

Front & Rear Hand Brakes

Side Stand

100cc.

Low maintenance

Auto Start

Price range: Rs.50,000 – 60,000/- (Inclusive of Tax)

Pollution noise free two – wheeler

Comfortable Seating Arrangement

Works on both battery and solar energy, therefore usage of petrol is very less.

Switch to any mode as per the preference

Built in Charger

Economical

Low maintenance

Extremely safe and reliable to drive.

Thus, Ingenious Ltd has its target group as 18-50 i.e. the youngsters as well the middle

aged people. Since all the other products have their target group as 25 and above, Ingenious

Ltd. will face less competition in the youngster group. It is providing Indians with new

funky colours which are specially meant for youngsters as now Indian youngsters are

shifting towards western culture. The target group being youngsters the product will enjoy

good market share as it is the product with current trends taken into consideration.

The company is trying to position its product in the minds of the customer as a product,

which is fashion oriented as well as economical and is safe to use.

The tag line of Ingenious Ltd. is “ Making Dreams come true.....”.

Maintenance

Proper care & maintenance are paramount for trouble free operation & optimum

performance for every Motorcycle.

Ingenious Ltd. offers 6 free services on its motorcycles. The customers must avail these

services after purchase within a year or as per the below mentioned km range, whichever is

earlier:

First Free service By 500km

Second Free service 500-1500 km

Third Free service 1500-3500 km

Fourth Free service 3500-6500 km

Fifth Free service 6500-9500 km

Sixth Free service 9500-11500 km

During the second year, one can with additional pay of Rs. 5000/- take an AMC, wherein if

any part of the bike is damaged it will be replaced by the company for free.

Company’s estimated working life of battery is from 2 ½ - 3 years depending on usage.

It is as simple as recharging mobile phones. All that is required is a 3 pin domestic electric

point. Just plug in the cord and switch on the electricity and the battery gets recharged

automatically. The company is building a network of charging stations in the near future.

The solar energy system which IIT was fitting was specially designed by Japan and has a

long life. It will recharge it self during the day time and its charging will be directed to

battery. One can easily switch to solar system while riding during the day time to drive eco

friendly and cost free. It will too work on petrol as a normal two wheeler.

Safety Measures

Bike would be traceable with an in built censor in case of emergency and thus even if bikes

are stolen; there is no need to worry. Every censor chip has a uniue code which specifies

the model no. of the vehicle. Even in case of emergency the rider can switch to any mode,

suppose petrol gets empty so he/she can switch to battery or solar energy mode.

Customers will be educated on Safe Riding techniques through various audio visual aids.

Safety Instructors will be imparting riding skills as well as education to the customers.

Spares - Features & Benefits

The performance and safety of a bike not only depends on the world-class design and

workmanship assured by Ingenious Ltd. but also on the parts being used in the assembly

line.

Even the finest components manufactured need replacement from time to time. And to

ensure the continued impeccable performance of your vehicle, the spare parts should also

be made and replaced as good as the components fitted by Ingenious Ltd.

To ensure this, we manufacture and procure the replacement parts according to the

specifications and standards set by us.

As a responsible bike company owner, we will recommend our customers for their safety,

long life and high performance of bike, to use only Ingenious Ltd. made genuine parts.

Ingenious Ltd. would be economically priced, stylishly designed, has low running cost, has

good battery capacity and well-developed electronics technology.

25-80 kms on single charge.

No tune ups.

One year guarantee

Easy recharging

Pollution noise free two – wheeler

Economical Price range: Rs. 35,000 – 60,000/- (Inclusive of Tax)

Extremely safe and reliable to drive.

No PUC required.

Battery design: Indigenous and full charge in 60 mins.

Built in Charger

More Mileage

Low maintenance

Light Weight

Comfortable Seating Arrangement

Works on both battery and solar energy, therefore usage of petrol is very less.

Switch to any mode as per the preference.

Push promotion strategy involves getting the retailers/dealers to vouch for your product

by giving them larger profit margins and giving them incentives for the number of sales of

your product that are made from their shops/showrooms.

Pull promotion strategy involves promoting your product on a very large scale and

making it visible on the market, thus raising the customers curiosity about the product and

hence inducing them to buy it.

We will give all the retailers/direct-dealers a good profit margin than our competitors are

providing them but not at the initial stage because we are focusing to attract our target

market using diversified means of promotions and advanced technology to our customers at

reasonable price. We will also give them incentives for vouching for our product at a later

stage as we settle down in the market. Hence we have decided not to go for push promotion

strategy at present but instead we have decided to go for pull promotion strategy.

Road Shows: The company plans to stage road shows, to display vehicles in the

pavilions during various college festivals, like Malhar, Space, Indigo, Bhavams etc.

These vehicles will appeal to youngsters more.

Television advertisements: Advertisements to promote and market our product

will be shown on leading television channels. Major music and sports channels will

promote ZEAL BIKE as they will reach out to the youth while our MIRACLE

SCOOTER meant for general riders will be promoted through Star, Zee, Sony and

Doordarshan etc as it has more mass coverage.

Radio is the medium with the widest coverage. Studies have recently shown high

levels of exposure to radio broadcasting both within urban and rural areas, whether

or not listeners actually own a set. Many people listen to other people's radios or

hear them in public places. So radio announcements will be made and

advertisements will be announced on the radio about the product features and price,

qualities, etc.

Print Ads: Daily advertisements in leading newspapers and magazines will be used

to promote the product. Leaflets at the initial stage will be distributed at railway

stations, malls, college areas and various other locations.

Workshops and seminars: Workshops and seminars will be held in colleges to

make people aware about the companies past performance and product features, its

affordability and usage, vast distribution network. Road shows will be conducted

where free trials of the bike would be given.

Banners, neon signs: Hoardings, banners, neon signs will be displayed at clubs,

discs, outside theatres and shops to promote our range of bikes.

Booklets and pamphlets: Booklets will be kept at bike showrooms, retail battery

outlets, college campuses etc for the customer to read. These booklets will provide

information about our company, the products offered which suits the customers

need accordingly.

After sales service: The after sales service will add into the appeal for the Electric

Vehicles (E.V.S). First of all, these are maintenance free vehicles. There is one-year

guarantee. Moreover, most of the spare parts are non-corrosive (made of plastic)

and easily available in the market. The company itself provides the vital parts. The

company has developed vendors to manufacture these parts as per the company’s

standard, quality and design. So there will be steady supply of spare parts to the

customer’s satisfaction. At every dealer counter, full fledged after sales service has

been committed. The vehicles are warranted for one year from the date of delivery.

It will have a venture with Bharat petroleum. At all the leading BPCL pumps we

will arrange for charging batteries for customers who wish to travel more kilometer

but is left with less power at concessional rates

Charging would be done at a very nominal charge and the customer has to give his

old battery for charging and take away the spare battery which is kept charged and

continue with his journey without any trouble. But while returning he will have to

return the spare battery and take away his own old battery completely charged. All

this data and check up will be totally computerized and once the customer

exchanges his battery at one of the petroleum outlets of Ingenious Ltd., and wishes

to exchange the battery again at another outlet, all information will be properly

noted down in the computer.

DISTRIBUTION CHANNEL

The Stockiest will represent 3 to 4 districts in a State.

The Dealer will represent a district or main City.

The Sub-Dealer shall represent a particular area or region.

The booking agents will be individuals working on freelance basis.

STOCKIST

DEALERS DEALERS

SUB DEALERSSUB DEALERS

BOOKING AGENTSBOOKING AGENTS

The pricing strategy adopted by Ingenious Ltd. for its two wheeler electronic bikes is

PENETRATION PRICING because it is a total new brand, which is entering a market,

which is already facing immense competition. And breaking this competition and attracting

new requires quality product at low price. Hence our product will be priced low which will

be economical and will encourage new buyers. Hence we have adopted the penetration

pricing method for capturing market share and establishing ourselves in the market.

The Actual Cost of Production of our ZEAL BIKE

Our Manufacturing cost Rs. 40,000/

------------------------

The profit earned

By Manufacturer is: 15% (i.e.6000)

------------------------

Retailer’s buys

From manufacturer is: Rs. 46,000/-

------------------------

The margin to

Retailers is: 10 %( i.e.4600)

------------------------

Market cost of

the Product: Rs. 50,600/-

The Actual Cost of Production of our MIRACLE SCOOTER

Our Manufacturing cost Rs. 28,000/-

------------------------

The profit earned

By Manufacturer is: 15% (i.e. 4,200)

------------------------

Retailer’s buys

From manufacturer is: Rs. 32,200/-

------------------------

The margin to

Retailers is: 10% (i.e. 3,220)

------------------------

Market cost of

the Product: Rs. 35,420/-

COST BENEFIT ANALYSIS

1. Costs:

Purchase of Machine.................... 1,00,00,000(includes interest and taxes)

Land Purchase (leasing) 25,00,000 Legal and transfer cost 5,00,000 Machinery on hire purchase 15,00,000 Factory production cost 75,000 Interest on loan

(Midterm, long term and short term @ 8%) 1, 50,000

Installation of Machine ..................... 80,000 Reduced material costs ...................... 15,00,000 Reduced Labor Costs....................... 5,00,000 New skilled labours................................ 10, 00,000

(salary plus overhead. Includes training) Utilities............................................ 25,00,000

Power consumption, stationary, maintenance, lubricants, tools etc 10 network-ready PCs with supporting software @ 20,000 – 2,00,000 10 printers @ 5,000 each – 1,50,000 Cabling & Installation @ 30,000 Sales Support Software @ 1,20,000

Training costs: Computer introduction - 8 people @ 2000 each –

16,000 Research and development cost -

50,000 Sales Support System - 12 people @ 3500 each –

42,000

Other costs: Lost time: 40 man ,30 days @ 100 / day –

1,20,000 Lost sales through disruption: estimate:

30,000 Lost sales through inefficiency during first months: estimate:

20,000

Total cost: 2, 05, 83,000 /year

[Fixed cost = 1,46, 25,000

Variable cost = 57, 75000

Other cost = 1, 83,000]

2. Benefits: -

Assume 60% is the variable cost

6000 bikes

Margin per unit = 60% of 6,000

= > 3,600

Total variable revenue = 2, 16, 00,000 (3,600 x 6,000)

3000 scooters

Margin per unit = 60% of 4,200 = 2520

Total variable revenue = 2,520 x 2,000 = 75, 60,000

Improved customer service and retention: estimate: 15,000 / year More ability to manage sales effort: 15,000 / year

Total Benefit: 2,91,90,000 / year

 Profit = total benefits – total cost

= 2,91,90,000 - 2, 05, 83,000

= 86,07,000

Payback time: 2,91,90,000 / 2, 05, 83,000 = 0.62 of a year = 1 yr and 4 months.

Ingenious Ltd. will establish its marketing network in the states of Delhi, Uttar Pradesh

Rajasthan, Chhattisgarh and Chandigarh. It will then gradually extend to all the other states

in vector two of its project as detailed in the Product Market Diagrams.

Segmentation of Ingenious Ltd. is done considering the consumer market. The major

markets in India for two – wheeler across all segments is constituted by the western,

Northern & Southern Region. In terms of weight age, the largest sales came from North,

West, South & East respectively according to ORG Estimates.

The leading States in India in terms of two – wheeler population are Gujarat, Maharashtra,

U.P, A.P, M.P, Punjab, Delhi & Rajasthan.

Uttaranchal is a major industrial zone of northern India & is well connected by rail and

road which is beneficial for procurement of raw materials and marketing of finished goods

and cheap availability of man power. Govt. has provided special incentives and benefits for

the investment in the state of Uttaranchal.

Due to the above pros, the product has been segmented on the basis of location. Our plant

will be located at Uttaranchal.

Ingenious power limited will be launching its two wheelers (scooter and bike) in the festive

season. This Diwali and Eid is one of the best time to launch a product in to the market

because people mostly use to but new products in this festive season.

DATE OF LAUNCHING: 21st – October – 2006.

Strengths:

Fixed capital cost of ownership

Minimum recurring expenses.

Convenience of use

Instant appeal to young fraternity in terms of design

Maintenance free and low wear and tear

Pollution free-noise and air (environmental friendly)

Contributing to national objective and saving

No other company has ever launched hybrid two wheeler automobiles.

Cost free due to salor energy.

Weaknesses:

Inoperative in areas where power is unavailable.

Battery replacement after 300 cycles of operation.

There are no service stations till now for such products.

It’s a new product so it will be difficult for the company to convince customers

to switch over towards our product.

Opportunities:

Reduction in oil imports

Solar power stations for battery charging.

Light weight plastic grid battery will have an international market.

Export potential.

Threats:

Reaction or competition from existing manufacturers of two wheelers.

Duplication of product.

Automobiles have become an indispensable part of our lives, an extension of the human

body that provides us faster, cheaper and more convenient mobility every passing day.

Behind this betterment go the efforts of those in the industry, in the form of improvement

through technological research. What actually lie behind this betterment of the automobiles

are the opinions, requirements, likes and dislikes of those who use these vehicles.

These wheeled machines affect our lives in ways more than one. Numerous surveys and

research are conducted throughout the world every now and then to reveal one or the other

aspect of automobiles, be it about the pollution caused due to vehicle population in cities,

or rising motor accidents and causes, vehicular technology, alternative medicine and so on.