CHAPTER-I

1. INTRODUCTION
1.1. Indian Two-wheeler Sector:

The Indian automotive industry consists of five segments: commercial vehicles; multi-utility vehicles & passenger cars; two-wheelers; three-wheelers; and tractors. With 7,822,963 units sold in the domestic market and 753,591 units exported during the first nine months ofFY2007, the industry (excluding tractors) marked a growth of 43% over the corresponding. The two-wheeler sales have witnessed a spectacular growth trend since the mid nineties. India is the second largest producer and manufacturer of two-wheelers in the world. Indian two-wheeler industry has got spectacular growth in the last few years. Indian two-wheeler industry had a small beginning in the early 50s. The Automobile Products of India (API) started manufacturing scooters in the country. Bikes are a major segment of Indian two wheeler industry, the other two being scooters and mopeds. Indian companies are among the largest two-wheeler manufacturers in the world. Hero Honda and Bajaj Auto are two of the Indian companies that top the list of world companies manufacturing two-wheelers. The twowheeler market was opened to foreign companies in the mid 1980s. The openness of Indian market to foreign companies leads to the arrival of new models of two-wheelers into India. Easy availability of loans from the banks, relatively low rate of interest and the discount of prices offered by the dealers and manufacturers lead to the increasing demand for twowheeler vehicles in India.

1.2.

OBJECTIVE OF STUDY

To know the market share of Bajaj & Hero Honda.

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.

1.3.

CORPORATE OVERVIEW

BAJAJ AUTO

COMPANY HISTORY

The Bajaj Group is amongst the top 10 business houses in India. Its footprint stretches over a wide range of industries, spanning automobiles (two-wheelers and three-wheelers), home appliances, lighting, iron and steel, insurance, travel and finance. The groups flagship company, Bajaj Auto, is ranked as the worlds fourth largest two-and three- wheeler manufacturer and the Bajaj brand is well-known across several countries in Latin America, Africa, Middle East, South and South East Asia. Founded in 1926, at the height of Indias movement for independence from the British, the group has an illustrious history. The integrity, dedication, resourcefulness and determination

to succeed which are characteristic of the group today, are often traced back to its birth during those days of relentless devotion to a common cause. Jamnalal Bajaj, founder of the group, was a close confidant and disciple of Mahatma Gandhi. Infact, Gandhiji had adopted him as his son. This close relationship and his deep involvement in the independence movement did not leave Jamnalal Bajaj with much time to spend on his newly launched business venture. His son, Kamalnayan Bajaj, then 27, took over the reins of business in 1942. He too was close to Gandhiji and it was only after Independence in 1947, that he was able to give his full attention to the business. Kamalnayan Bajaj not only consolidated the group, but also diversified into various manufacturing activities. The present Chairman of the group, Rahul Bajaj, took charge of the business in 1965.Under his leadership, the turnover of the Bajaj Auto the flagship company has gone up from Rs.72 million to Rs.46.16 billion (USD 936 million), its product portfolio has expanded from one to and the brand has found a global market. He is one of Indias most distinguished business leaders and internationally respected for his business acumen and entrepreneurial spirit. Company PROFILE

HERO HONDA
HISTORY 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 1940s and turned into the worlds 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 relati onships 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. Hero Honda is a joint venture that began in 1984 between the Hero group of India and Honda from Japan. It has been the worlds biggest manufacturer of 2-wheeled motorized vehicles since 2001, when it produced 1.3 million motorbikes in a single year. Hero Hondas Splendor is the worlds largest selling motorcycle. Its 2 plants are in Dharuheraand Gurgaon, both in Haryana, India. It specializes in dual use motorcycles that are low powered but very fuel efficient. Hero Group expanded so big that by 2002 they had sold 86 million bicycles producing16000 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.

TIMELINE ACHIEVEMENTS

1956Formation of Hero Cycles in Ludhiana(majestic auto limited) 1975Hero Cycles becomes largest bicycle manufacturer in India. 1983Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed Shareholders Agreement signed

1984Hero Honda Motors Ltd. incorporated 1985Hero Honda motorcycle CD 100 launched. 1989Hero Honda motorcycle Sleek launched. 1991Hero Honda motorcycle CD 100 SS launched. 1994 Hero Honda motorcycle Splendor launched. 1997Hero Honda motorcycle Street launched. 1999 Hero Honda motorcycle CBZ launched. 2001 Hero Honda motorcycle Passion and Hero Honda Joy launched. 2002Hero Honda motorcycle Dawn and Hero Honda motorcycle Ambition launched. 2003Hero Honda motorcycle CD Dawn, Hero Honda motorcycle Splendor plus, Hero Honda motorcycle Passion Plus and Hero Honda motorcycle Karizma launched.

2004Hero Honda motorcycle Ambition 135 and Hero Honda motorcycle CBZ* launched.

2005Hero Honda motorcycle Super Splendor, Hero Honda motorcycle CD Deluxe, Hero Honda motorcycle Glamour, Hero Honda motorcycle Achiever and Hero Honda Scooter Pleasure.

2007New Models of Hero Honda motorcycle Splendor NXG, New Models of Hero Honda motorcycle CD Deluxe, New Models of Hero Honda motorcycle Passion Plus and Hero Honda motorcycle Hunklaunched.
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2008New Models of Hero Honda motorcycles Pleasure, CBZ Xtreme, Glamour, Glamour Fi and Hero Honda motorcycle Passion Pro launched.

2009New Models of Karizma: Karizma ZMR and limited edition of Hero Honda motorcycle Hunk launched

2010new Models of Hero Honda motorcycle Splendor Pro and New Hero Honda motorcycle Hunk and New Hero Honda Motorcycle Super Splendor launched.

2011New Models of Hero Honda motorcycles Glamour, Glamour FI, CBZ Xtreme, Karizma launched. New licensing arrangement signed between Hero and Honda. In August Hero and Honda parted company, thus forming Hero MotoCorp and Honda moving out of the Hero Honda joint venture. In November, Hero launched its first ever Off Road Bike Named Hero "Impulse".

2012-New Models of Hero Motocorp Maestro the Musculine scooter and Ignitor the young generation bike are launched.

CHAPTER-II

2.1

MARKETING STRATEGY OF BAJAJ AUTO

The focus of BAL off late has been on providing the best of the class models at competitive prices. Most of the Bajaj models come loaded with the latest features within the price band acceptable by the market. BAL has been the pioneer in stretching competition into providing latest features in the price segment by updating the low price bikes with the latest features like disk-brakes, anti-skid technology and dual suspension,etc.BAL adopted different marketing strategies for different models, few of them are discussed below: CALIBER The focus for the Caliber 115 was youth. And though Bajaj made the bike look bigger and feel more powerful than its predecessor (characteristics that will attract the average, 25-plus, executive segment bike buyer). Going by the initial market response, the campaign was clearly a hit in the 5-10 years age bracket. So, the teaser campaign and the emphasis on the Caliber 115 being a `Hoodibabaa bike placed it as a trendy motorcycle for the college-goers and the 25 plus executives both at the same time. PULSAR Pulsar was launched in direct competition to the Hero Hondas CBZ model in150 cc plus segment. The campaign beared innovative punch line of "Definitely Male positioning Pulsar to be a masculine-looking model with an appeal to the performance sensitive customers. Pulsar currently offers four varieties the Bajaj Pulsar 150 cc,the Bajaj Pulsar 180 cc, the Bajaj Pulsar 200 cc,and the Bajaj Pulsar 220cc. Bajaj Pulsar bikes range in on road prices from around Rs. 62,500 to Rs. 90,500. The Pulsar DTS Fi is the first bike in the Indian market to have both front and rear disc brakes.

DISCOVER The Bajaj Discover has two variants with 110 cc and 135cc engine. Bajaj Discover targets the middle class two wheeler consumers with Bajaj bike prices ranging from Rs. 46,000 to Rs. 55000. The Bajaj Discover 135 cc is easy to control, easy on the pocket, and a good choice between a 125 cc and 150 cc motorbike. PLATINA It is the leader in mileage & looks in the 100 cc class. The Bajaj Platina is resplendent in Platinum silver colour and shiny chrome graphics enhanced by a contrasting matt black silencer and graphite-tinted engine. The bike has a plush ride without sacrificing handling. It has an upright riding posture in line with other commuter bikes currently there are two variants of Platina available with engine capacities of 100and 125 cc. The 100 cc Platina was launched in April 2006 at an ex-showroom price offs 36,000 and crossed sales of 500,000 units within eight months of its launchedPlatina125 DTS-Si was introduced in September 2008 with sales of more than 30,000 units AVENGER Bajaj Avenger (DTSi) offers the ultimate cruiser experience. Offering high stability and long cruising delights, Bajaj Avenger (DTSi) possesses wider saddle seat, special backrest besides 180cc powerful engine. It is targeted at the upper middle-class bike lovers. The Avenger now has a single variant, the Bajaj Avenger priced at around Rs. 70,000. BAJAJ AUTOS MISSION: We at Bajaj Auto continue to firmly believe in providing the customer Value for money, for years through our products and services. This we shall maintain and improve, in our decision making, quality, safety and service will be given as much consideration as productivity, cost and delivery. Quality shall be built into every aspect of our work life and business operations.

Quality improvements and customer satisfaction shall be the responsibility of every employee. SWOT ANALYSIS Lets analyze the position of Bajaj in the current market set-up, evaluating its strengths, weaknesses, threats and opportunities available. STRENGTHS High performance products across all categories. Widespread distribution network. High economies of scope. High economies of scale. Great financial support network (For financing the automobile) High export to domestic sales ratio. OPPURTUNITIES Growing world demand for entry-level motorcycles especially in emerging markets. Untapped market above 180 cc in motorcycles. Double-digit growth in two-wheeler market More maturity and movement towards higher-end motorcycles The growing gearless trendy scooters and scooterette market THREATS The competition catches-up any new innovation in no time. Threat of cheap imported motorcycles from China. Margins getting squeezed from both the directions (Price as well as Cost)

The Inevitable Change Bajaj on internal analysis found that it lacked 1. The technical expertise to deliver competitive goods. 2. The design know-how. 3. And the immediate inability to support the onslaught of competitors.

All these forced Bajaj to look for an international partner who could bring in technology and also offer some basic platforms to be manufactured and marketed in India. Kawasaki of Japan is a world-renowned manufacturer of high performance bikes. Bajaj entered into a strategic tie-up with Kawasaki in late 1990s to enhance its product line and knowledge up-gradation to support long-term strategies. This served the purpose of sustaining the market competition for a while. From 1996to 2000, Bajaj invested hugely in infrastructure while simultaneously developing product design and innovation capabilities, which is the prime reason behind the energetic Bajaj of21st century. Bajaj introduced a slew of products right from entry-level motorcycle to the high premium segment right from 2001 onwards, and since then its raining success all the way for Bajaj. Last quarter, Bajaj had impressive performance growing at a rate of 20%+ when the largest manufacturer grew at just 6%. This stands a testimony to the various important strategic decisions over the past decade. Current Situation Current Performances BAL is currently outperforming the industry growth rate in two-wheeler segment with32% growth in year 2004-05 v/s industry growth of 19%.3 Market share in Motorcycles is improving with every passing year. It has also increased from 28% in 2004-05 to 31% in 2005-06.f Annual turnover for the year 2005-06 is Rs. 81.06 billion v/s Rs. 63.23 billion a

10

year before - an increase of 28% which is very healthy BAL has significant presence in all the three basic segments - Price Segment, Value Segment and Performance Segment - and has been showing increased sales in all the segments over years. Besides this, BAL is a market leader in two-wheeler exports and it consists a great chunk of their overall revenues. Currently, BAL is selling over 1 lac motorcycles annually in SriLanka, further, they are commanding 50% market share in Central America. pg. 35 The Industry Analysis - Five Forces Analysis-BAL 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 scopes 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. 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. Buyers 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.

11

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, Bajaj has presence in it. 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. Product & Advertising Strategies OF BAL The focus of BAL off late has been on providing the best of the class models at competitive prices. Most of the Bajaj models come loaded with the latest features within the price band acceptable by the market. BAL has been the pioneer in stretching competition into providing latest features in the price segment by updating the low price bikes with the latest features like disk-brakes, anti-skid technology and dual suspension, etc.BAL adopted different marketing strategies for different models, few of them are discussed below: -Kawasaki 4S First attempt by Bajaj to make a mark in the motorcycle segment. The target customer was the father in the family but the target audience of the commercial was the son in the family. The time at which Kawasaki 4S was launched Hero Honda was the market leader in fuelefficient bikes and Yamaha in the performance bikes. The commercial of Kawasaki 4S had the punch line "Kyun Hero" means "now what hero which reflected the aggressiveness in the marketing front by the company. Boxer - It took the reins from where the Kawasaki 4S

12

left. Target was the rural population and the price sensitive customer. Boxer marketed as a value for money bike with great pg. 37 38. Mileage. Larger wheelbase, high ground clearance and high mileage were the selling factors and it was in direct competition to Hero Honda Dawn and Suzuki MX100.Caliber The focus for the Caliber 115 was youth. And though Bajaj made the bike look bigger and feel more powerful than its predecessor (characteristics that will attract the average, 25-plus, executive segment bike buyer), its approach towards advertising is even more radically different this time around. Bajaj gave the mandate for the ad campaign to Lowe, picking them from the clique of three agencies that do promos for the company (the other two being Leo Burnett and O&M). Going by the initial market response, the campaign was clearly a hit in the 5-10 years age bracket. So, the teaser campaign and the emphasis on the Caliber 115 being a `Hoodibabaa bike placed it as a trendy motorcycle for the college-goers and the 25 plus executives both at the same time. Pulsar - Pulsar was launched in direct competition to the Hero Hondas CBZ model in 150cc plus segment. The campaign bearded innovative punch line of "Definitely Male" positioning Pulsar to be a masculine-looking model with an appeal to the performance sensitive customers. The Pulsar went one step ahead of Hero Hondas CBZ and launched a twin variant of Pulsar with the 180 cc model. The model was a great success and has already crossed 1 million marks in sales. Discover - The same DTSI technology of Pulsar extended to 125 cc Discover was a great success. With this, Bajaj could realize its success riding on the back of technological innovation rather than the joint venture way followed by competitors to gain market share. Strategies & Implementation FMCG Business Model BAL now is taking a leaf out of the FMCG business model to take the company to greater heights. Bajaj has kicked off a project to completely restructure the companys retail network

13

and create multiple sales channels. Over the next few months, the company will set-up separate sales channels for every segment of its business and consumers. Bajaj Autos entire product portfolio, from the entry-level to the premium, is being sold by the same dealers. The restructuring will involve separate dealer networks catering to the urban and rural markets as well as its three-wheeler and premium bikes segments. Bajaj Auto also plans to set-up an independent network of dealers for the rural areas. The needs of financing, selling, distribution and even after-sales service are completely different in the rural areas and do not makes sense for city dealers to control this. The company also plans to set-up exclusive dealerships for its three-wheeler products instead of having them sold through an estimated 300 of its existing dealers. Other Strategic Issues Cash is strength: Bajaj Auto has been sitting on a cash pile for over five years now. Over the next couple of years, competition in the two-wheeler market is set to intensify. TVS Motors and Hero Honda are on a product expansion binge. To fight this battle and retain its hard-earned market share in the motorcycle segment, Bajaj Auto will need its cash muscle. A look at its own story over the past five years provides valuable insight. Delisting worry: What is worrying is that there is an idea to delist the investment company (also an indirect indication that it would be listed initially). This would be closing the valve of equitable ownership distribution. There is a hint of a buyback of shares of the investment company as this is the only way it cane delisted. The company would not be short of cash to put through such a buyback. Factors such as low valuation, low trading interest and the need to provide shareholders maybe cited as plausible reasons for the buyback. Stake for Kawasaki: Bajaj Autos attempt to vest the surplus cash in a separate company may be a prelude to offering a stake to Kawasaki of Japan in the equity of the automobile company. The latter has been playing an increasingly active role in Bajajs

14

recent models, and its brand name is also more visible in Bajaj bikes than in the past. Better value proposition: Shareholder interests may be better served if the cash is retained to pursue growth in a tough market. This would also obviate the need to fork-out fancy sums as stamp duty to the government for the de-merger. A combination of a large one-time dividend and a regular buyback program through the tender route may offer better value. A strategic stake for Kawasaki would only positively influence the stocks valuation. Strategies for the Overseas Markets Bajaj Auto looks at external markets primarily with three strategies: -1) A market where all BAL need to do is distribute through CKD or CBU routes.2) Markets where BAL need to create new products.3) Markets where BAL need to enter with existing products and probably with a good distributor or a production facility or a joint venture. Earlier, most of the products that Bajaj exported were scooters and some motorcycles. However, in its target markets, like in India, the shift was towards motorcycles. With the expansion in Bajajs own range to almost five-six platforms of motorcycles, it had a better offering to export, also the reason for its stronger showing. For the last fiscal, 60 per cent obits exports were twowheelers and the rest three-wheelers. Of the two-wheeler exports, closet 90 per cent were motorcycles. Bajaj has identified certain key markets, which hold potential. Its first overseas office established at the Jebel Ali free trade zone has been the focal point for exports to middle Africa and the Saharan nations. Egypt and Iran also continue to be strong markets for Bajaj. The other market, which would be a focus area, is South America, where the company feels its fairly well represented in most countries, except in Brazil, the largest market. The company Recently participated in a large auto exhibition in Brazil and found good consumer acceptance to products like Pulsar and Wind 125.The other focus area is the ASEAN nations, which constitute the third biggest consumer of two-wheelers. The biggest among them is Indonesia, where Bajaj distributors are looking to introduce eco-friendly four-stroke auto

15

rickshaws. But two-wheeler market requires great deal of effort from BAL. Everybody is there with Honda leading the show. Theres Suzuki, Kawasaki and some Korean and Chinese models. BAL should look at the right product mix for two-wheelers. Bajajs Pulsar model has taken off well there. It also wants to develop a new step-through model for the Indonesian market, but for now it will create a base therewith its motorcycle models. Bajaj has also made a beginning by selling bikes in the Philippines branded in the name of its technical partner, Kawasaki. The two signed a MoU in February. Kawasaki, a large multi-product conglomerate, only makes high-end bikes and does not have sub-200cc models. Kawasaki is marketing the new model, Wind 125, developed by both companies, in the Philippines. The Bajaj-developed models, Caliber and by, which is a fuel-efficient bike, are also being distributed by Kawasaki. This is a good beginning strategically for Kawasaki to evince interest in Bajaj products for markets which can still buy less than 150 cc. R&D Bajaj Auto has a huge, extensive and very well-equipped Research and Development wing geared to meet two critical organizational goals: development of exciting new products that anticipate and meet emerging customer needs in India and abroad, and development of ecofriendly automobile technologies. While the manpower strength of the R&D represents a cross-section of in-depth design and engineering expertise, the company has also been investing heavily in the latest, sophisticated technologies to scale down product development lifecycles and enhance testing capabilities Bajaj Auto R&D also enjoys access to the specialized expertise of leading international design and automobile engineering companies working in specific areas. Based on their own brand of globalization, they have built their distribution network over 60countries worldwide and multiplied the exports from 1% of total turnover in Fiscal 1989-90to over 5% in Fiscal 1996-97.The countries where their products have a large market are USA, Argentina, Colombia, Peru, Bangladesh, Sri Lanka, Italy,

16

Sweden, Germany, Iran and Egypt. Bajaj leads Colombia with65% of the scooter market, in Uruguay with 30% of the motorcycle market and in Bangladesh with 95% of the threewheeler market. Several new models are being developed specifically for global markets and with these the company will progressively endeavour to establish its presence in Europe too. The Future Although the avalanche of motorcycles offered Indian consumers a wide variety of models to choose from, it also resulted in increased pressure on the companies to concentrate on cost-cuts, technology enhancements and up-gradations and styling. Their margins came under pressure as marketing costs escalated. The companies were forced to reduce prices and offer discounts to survive the competition. Moreover, analysts were sceptical about the segments ability to maintain the growth rate in the years to come. One of the major assumptions underlying the motorcycles rush was that if the market was considerably large and was growing at a constant pace, there was room for profitable existence for all brands. In 2001, there were over 30 motorcycle brands in the market. However, with the top firebrands accounting for more than 60% of the market, only 40% of the market was available for all other new brands put together. Despite the launch of more vehicles, the survival prospects of many of the individual brands were deemed to be rather bleak. Further, the growth in the motorcycle segment was dependant on continuing favorable market conditions. Analysts claimed that to sustain this growth rate, the segment would have to completely cannibalize the market for scooters and a considerable part of the market for scooters and mopeds. Considering the fast growing scooter segment, with high demand from female customers, followed by the moderately growing moped segment and the restructuring in the scooter segment with major national and foreign players reinforcing their presence, it was unlikely that the entire growth in the two-wheeler sector would be due to motorcycles. Analysts also commented that as the two-wheeler industry had grown steadily for eight years, stages in the product life cycle would apply to the field sooner, rather than later and the

17

decline stage would invariably come some day. There was little differentiation between the brands being launched apart from styling as most companies had introduced their four-stroke vehicles. With the failure of the joint ventures, the expected introduction of cheaper Chinese brands, stringent emission norms and threat from major international players, the survival of indigenous brands looked uncertain.

2.2

MARKETING STRATEGIES OF HERO HONDA

Hero Honda globally known of being the most fuel-efficient and the largest CBZ selling Indian motorcycle company. This is a relationship so harmonious that Hero Honda has managed to achieve indigenisation of over 95 percent, a Honda record worldwide. The company is committed to provide the customer with excellence. A rich background of producing high value products at reasonable prices led the worlds largest manufacturer of motorcycles to collaborate with the worlds largest bicycle manufacturer CD DAWN Honda CD Dawn is a beginners bike well tested on Indian roads and proven in city conditions. Hero Honda CD Dawn is a no-nonsense bike that all about price and utility. New bikes have showroom prices of around Rs. 32,000 and on-road prices of around Rs.37,000. SPLENDOR NXG The Hero Honda Splendor NXG is a new age bike in Hero Hondas 100 cc stable. Stunning looks, economic performance, and a multitude of features backed by Hero Hondas reliable support network, makes this a good choice for the city commuter. The Hero Honda Splendor NXG is now available at a showroom price of around Rs. 42,000.Hero Honda Splendor Plus is one of the largest selling bikes in India. It sports several improvements over the old splendour. Hero Honda Super Splendor is not a bike to race with, but one you can depend on to get you to your destination and back in the city safely and economically.
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PASSION PLUS Hero Honda Passion Plus is a bike meant for the executive city commuter. This improved version of the Hero Honda Passion comes with several improvements over its earlier .conversions and gives an easy ride and easy handling. New bikes have showroom prices of around Rs. 42,700.CBZ EXTREME Expected to capture the top position in the premium segment with this bike. Price for two variants of kick-start and self-start for CBZ X-treme is Rs 54,000 and Rs 56,000. Both the variants come with alloy wheel and disc brakes as standard fitment. Alloy wheels, Speedo console, split rear grab rail and bikini fairing all add to the muscular styling giving it a big bike feel. Launched in early, was the first sports oriented4-stroke bike. Sporting an original Honda 156.8 cc engine, it made good 12.8PS of power which was sufficient enough to propel it to 110[120 on Speedo] km/h. The styling of the bike was a scaled version of the famous Honda CB series. Sufficient mid-range torque ensured a 060 km/h (0-37 mph) in just 5 seconds. KARIZMA ( R, ZMR) The Hero Honda Karizma is the flagship motorcycle of Hero Honda. It was launched in May 2003 and was replaced by a cosmetic upgrade Karizma R .The bike has been prominently associated with the reality show MTV Roadies. It currently retails at Rs82,502. The bike addresses to those who have a passion for speed and styling and head-turning looks. Karizma sports all aluminium, under square engine (bore 65.5 mm and stroke 66.2 mm) running a compression ratio of 9:1.The top speed is around 120 km/hand the 0-60 km/h is achieved around 3.8 seconds. The Karizma is reported to have an overall fuel economy of 38 km/l (90 mpg or 2.4 l/100 km), with a best of 50 km/l (120mpg) and a worst of 28 km/l (66 mpg).

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Hero Honda has launched the revamped version of its performance motorcycle, the Karizma ZMR. Introduced at a price of 91,000 showrooms Delhi to compete with Bajaj Pulsar 220.

Mission statement: Hero Hondas mission is to strive for synergy between technology, systems and human resources, to produce products and services that meet the quality, performance and price aspirations of its customers. At the same time maintain the highest standards of ethics and social responsibilities. This mission is what drives Hero Honda to new heights in excellence and helps the organization forge a unique and mutually beneficial relationship with all its stake holders.

HERO HONDAS MANDATE: Hero Honda is a world leader because of its excellent manpower, proven management, extensive dealer network, efficient supply chain and world-class products with cutting edge technology from Honda Motor Company. The team work and commitment are manifested in the highest level of customer satisfaction, and this goes a long way towards reinforcing its leadership status. S.W.O.T ANALYSIS: STRENGTHS: Debt equity ratio is only 0.1. Best customer preference. It gives better service for customers. It has a good brand image. It has the highest share in automobile sector. Better sale service. Huge sale network (3500 Dealers).

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Hero Honda gives 80 Km/Litre Avg. The company has clarified about its intention of setting a third plant in addition to its existing two plants. The company has embarked upon a green field expansion plan and has earmarked Rs 2 bn for the same. It should be noted that the company has a strong cash flow position; it generated Rs 9 bn from operation in FY04 and is virtually a debt free company. WEAKNESS: Its market share is reducing from last few years. They have big gap between cubic capacities of its products. Not fit for ruler India. Suppose to be very sophisticated OPPURTUNITIES: They have big opportunities in heavy bike segments. There is large no. of young consumers in the market. Company has to focus on them. They should go in new segments of bikes. Hero Hondas the first manufacture to launch eco friendly bikes with 4-stroke engines. They have attained a stronger good will and popularity in the industry and the consumers. As government policies are amended against pollution in metro cities, Hero Honda being 4 stroke bike manufactures has great opportunities to explore its new innovations and technologies. THREATS Decreasing market share. The cost of the product is very high in comparison to other companies. Main threats to Hero Honda are their competitors like: - o Bajaj Auto Ltd. o TVS motors Ltd. Yamaha Motors India. Honda motorcycle and scooter India

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HERO HONDAS CORE VALUES Prompts transparency Enables relationship buildings. Is a caring organization? Providing learning environment. Is self-reliant. Provide fearless, enjoyable working environment. Is striving for excellence. Is a boundary less organization? Is a responsive organization? Respect for Human Beings.

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CHAPTER-III
3.1 ANALYSIS AND INTERPRETATION

FACTORS INFLUENCING SALES OF TWO WHEELERS FEATURES: It plays major role in sale on any bikes. Today people are more attracted towards the features of bikes and are ready to spend huge amount of money on buying handset having huge numbers of features. E.g. Hero Honda Karizma price: Price also plays a major role. Companies need to place their products in such a way that it can differentiate itself from others by its price. If price of bike is kept low and more features are provided to customers than company can create market for itself. AVAILABILITY: Products need to be available easily. Customers dont like to travel much to buy bikes. They prefer to get their bikes from nearest showrooms so in order to be market leader companies should make sure that there products are easily available to customers. AFTER SALES SERVICE: Companies should make sure that they provide good after sale service to their customers and there problems are rectified as soon as possible. The turnaround time should be very less that customers dont have to wait too long for their problems so to be solved. QUALITY: The quality of products should be very good. Todays customers want value for money if that is not provided than company will find it difficult to position itself in the market.

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3.2

ANALYSIS

1) Which bike do you have? HERO HONDA BAJAJ ANY OTHER 47 38 15

15 47 38

HERO HONDA BAJAJ ANY OTHER

2) Which model do you have? Hero Honda Slender Passion Karizma Any other 21 13 7 6 Bajaj CT 100 Discover Pulsar Any other 7 12 11 8

25 20 15 10 5 0 Splender Passion Karizma Any other

14 12 10 8 6 4 2 0 CT 100 Discover Pulsar Any other

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3) In which family income do they fall?

100000-200000 200000-300000 300000-400000 Above 400000

22 45 23 10

50 40 30 20 10 0

4) For how long do you own a bike? 0-1 yrs 1-2 yrs 2-3 yrs Above 3 yrs 34 29 26 11

40 30 20 10 0 0-1 yrs 1-2 yrs 2-3 yrs Above 3 yrs

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5) For what purpose you use your motor bike? Hero Honda Office purpose Personal purpose Joy purpose Other purpose 9 13 19 6 Bajaj 4 15 16 3

20 18 16 14 12 10 8 6 4 2 0 Office purpose Personal purpose Joy purpose Other purpose Hero honda Bajaj

6) How do you come to know about this motor bike? Hero Honda Newspapers Television Magazines Friends & relatives 4 23 2 18 Bajaj 2 16 1 19

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40 35 30 25 20 15 10 5 0

Bajaj Hero honda

7) Does advertisement influence your decision while choosing motor bike? Yes No Cant say 87% 5% 8%

5% 8% Yes 87% No Cant say

8) Do you have full knowledge about bikes before buying? Hero Honda Yes No 25 22 Bajaj 23 15

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25 20 15 10 5 0 Hero honda Bajaj Yes No

9) Which factor below influence your decision? Hero Honda Price Mileage Quality Resale value Status symbol 72% 78% 65% 40% 10% Bajaj 78% 64% 48% 28% 7%

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Price Mileage Quality Resale value Status symbol Hero honda Bajaj

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10) How would u rate the following factors of bikes with respect to different companies? Hero Honda Mileage Price Pick-up Maintenance Look & shape Brand image 74% 68% 70% 58% 85% 53% Bajaj 72% 65% 80% 62% 80% 55%

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

Hero honda Bajaj

11) If good bike with new features comes in, then would you like to change your bike? Hero Honda Yes No Cant say 19 17 11 Bajaj 21 14 3

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25 20 15 10 5 0 Yes No Cant say

Hero honda Bajaj

RECOMMENDATIONS
Bajaj should introduce some more models having more engine power. Hero Honda should think about fuel efficiency in case of upper segment bikes. More service centres should be opened. Maintenance cost and the availability of the spare parts should also be given due importance. They also introduce some good finance/discount schemes for students. The price should be economic.

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CHAPTER IV
CONCLUSIONS
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. Hero Honda is considered to be most fuel-efficient bike on Indian roads. Service & Spare parts are available throughout India in local markets also. While buying a motorcycle, economy is the main consideration in form of maintenance cost, fuel efficiency. Majority of the respondent had bought their motorcycle more than 3 years.

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BIBLIOGRAPHY
www.wikipedia.com www.herohonda.com www.bajaj.com www.bikeindia.com

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