A Study on Consumer Perception towards Hero Motors

With reference to SVS Hero

INTRODUCTION TO THE STUDY

Two-Wheeler industry is one of the largest industries in the automobile sector of global
market. Being the leader in product and process technologies in the manufacturing sector,
it has been recognized as one of the drivers of economic growth. During the last decade,
well¬-directed efforts have been made to provide a new look to the automobile policy for
realizing the sector's full potential for the economy. The liberalization policies have led to
continuous increase in competition which has ultimately resulted in modernization in line
with the global standards as well as in substantial cut in prices. Aggressive marketing by
the auto finance companies have also played a significant role in boosting automobile
demand, especially from the population in the middle income group.
Presently many international brands like Honda, Suzuki, etc. are competing with Indian
brands such as Hero, Bajaj, and T V S, Kinetic etc. to capture Indian markets.
These aggressive marketing strategies have resulted in making the consumer the major
key for success in the industry. Each product offering is now designed to meet and
exceed the expectations of the consumer. But understanding consumer behaviour and
knowing consumers is never simple. And it is more difficult that to understand what a
consumer perceives about the product. Customers may say one thing but do another.
They may not be in touch with their deeper motivations. They may respond to influences
that change their minds at the last moment. Small companies such as a corner grocery
store and huge corporations stand to profit from understanding how and why their
consumers buy.
 INDUSTRY PROFILE

India is the second largest manufacturer and producer of two-wheelers in the world. It
stands next only to Japan and China in terms of the number of two-wheelers produced
and the domestic sales respectively. This distinction was achieved due to variety of
reasons like restrictive policy followed by the Government of India towards the passenger
car industry, rising demand for personal transport, inefficiency in the public
transportation system etc.
The Indian two-wheeler industry made a small beginning in the early 50s when
Automobile Products of India (API) started manufacturing scooters in the country. Until
1958, API and Enfield were the sole producers.
In 1948, Bajaj Auto began trading in imported Vespa scooters and three-wheelers.
Finally, in 1960, it set up a shop to manufacture them in technical collaboration with
Piaggio of Italy. The agreement expired in 1971.
In the initial stages, the scooter segment was dominated by API; it was later overtaken by
Bajaj Auto. Although various government and private enterprises entered the fray for
scooters, the only new player that has lasted till today is LML.
Under the regulated regime, foreign companies were not allowed to operate in India. It
was a complete seller market with the waiting period for getting a scooter from Bajaj
Auto being as high as 12 years.
The motorcycles segment was no different, with only three manufacturers viz Enfield,
Ideal Jawa and Escorts. While Enfield bullet was a four-stroke bike, Jawa and the
Rajdoot were two-stroke bikes. The motorcycle segment was initially dominated by
Enfield 350cc bikes and Escorts 175cc bike.
The two-wheeler market was opened to foreign competition in the mid-80s. And the then
market leaders - Escorts and Enfield - were caught unaware by the onslaught of the 100cc
bikes of the four Indo-Japanese joint ventures. With the availability of fuel efficient low
power bikes, demand swelled, resulting in Hero Honda - then the only producer of four
stroke bikes (100cc category), gaining a top slot.
The first Japanese motorcycles were introduced in the early eighties. TVS Suzuki and
Hero Honda brought in the first two-stroke and four-stroke engine motorcycles
respectively. These two players initially started with assembly of CKD kits, and later on
progressed to indigenous manufacturing. In the 90s the major growth for motorcycle
segment was brought in by Japanese motorcycles, which grew at a rate of nearly 25%
CAGR in the last five years.
The industry had a smooth ride in the 50s, 60s and 70s when the Government prohibited
new entries and strictly controlled capacity expansion. The industry saw a sudden growth
in the 80s.
The industry witnessed a steady growth of 14% leading to a peak volume of 1.9mn
vehicles in 1990.
The entry of Kinetic Honda in mid-eighties with a variometric scooter helped in
providing ease of use to the scooter owners. This helped in inducing youngsters and
working women, towards buying scooters, who were earlier, inclined towards moped
purchases. In the 90s, this trend was reversed with the introduction of scooterettes. In line
with this, the scooter segment has consistently lost its part of the market share in the twowheeler
market.
In 1990, the entire automobile industry saw a drastic fall in demand. This resulted in a
decline of 15% in 1991 and 8% in 1992, resulting in a production loss of 0.4mn vehicles.
Barring Hero, all the major producers suffered from recession in FY93 and FY94.
Hero showed a marginal decline in 1992.
The reasons for recession in the sector were the incessant rise in fuel prices, high input
costs and reduced purchasing power due to significant rise in general price level and
credit crunch in consumer financing. Factors like increased production in 1992, due to
new entrants coupled with the recession in the industry resulted in company either
reporting losses or a fall in profits.
India is one of the very few countries manufacturing three-wheelers in the world. It is the
world's largest manufacturer and seller of three-wheelers. Bajaj Auto commands a
monopoly in the domestic market with a market share of above 80%, the rest is shared by
Bajaj Tempo, Greaves Ltd and Scooters India.
The total number of registered two-wheelers and three-wheelers on road in India, as on
March 31, 1998 was 27.9mn and 1.7mn respectively. The two wheeler population has
almost doubled in 1996 from a base of 12.6mn in 1990.
 Methodology

Statement of the Problem

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

survivor has posed and alarming condition before the company. The present study would
like to have an insight of consumer’s perception about the criteria of selecting the bikes.
Especially to figure out whether it is brand driven or quality driven
Before five years Hero was the market leader in motor bike industry in India. But
in now a day they are losing their grip in motor bike industry, none of their bike except
‘Passion Pro’ became a success. And the competitors like Bajaj and TVS has taken
advantage of this. There is no doubt that the companies market share is falling down. So
this study will help to understand and identify what the consumer feels or perceives
about Hero motor bikes. This will help the marketer to identify which all are the
factors that a consumer looks in to when he selects a particular bike. And also explains
how a consumer selects and interprets the qualities of bike that Hero offers.

 What is consumer perception and criteria in selecting the bike?

 How consumer perceives and feels about Hero Motors?
 Review Of Literature

1. Dr. Dugganiyuvaraju (2013) conducted study on consumer perception towards Hero

two wheelers: a case study in tirupati. The main objective of the study is to find out the
consumer perception level towards Hero bikes . The primary data collected 100
responds the study had found that all the responds were aware about this company 60%
of the responds felt the explanation to be “excellent”. And 35% of them “very good”
and rest of the 5% felt to be “poor” according to them sales executives. Finally the
concluded that a study was useful in understanding the customer relationship,
management of Hero bikes are among various customer launching new formulation can
make Hero a to the pioneer in many market segments.
2. Dr. Sardar Gugloth (2011) A study relating to the decision-making process of
purchasing two wheelers in rural area of Andhra Pradesh. The main objective of the
study is to identify the factors influencing rural consumers, in brad selection while
purchasing two wheelers to identify the rural consumer's choice of perception while
purchasing the two wheelers. The study was conducted on a sample of 96% consumers.
The tools used in the study are simple percentage and chi-square tests have been used
in order to study the objectives. the study had found that majority of respondents are
influenced by family members and friends at the time of brand selection, most of the
rural consumers are giving their performance to mileage
3. Sheetal Soni &Abhishek Soni (2012) study on consumer perception towards two-
wheelers bike-a corporative study of rural and urban consumers of Jodhpur district
Rajasthan. The main theme of the study is to compare consumer perception of urban
and rural consumer. A sample of 100 consumers was selected for the present study
from Jodhpur district, Rajasthan. The tool used in the study is simple random method
.the study had found that in urban areas, out of 11 respondents who use TVS Two-
wheelers, 73% reported that the performances of their two wheelers was good,9% said
that it was excellent and 18% rated it as fair. In rural areas, out 12 respondents, 50%
felt the performance was good, and 25% each rated it as excellent and fair respectively.
Finally it is concluded that in a developing country like India, where sizeable
proportion of the population comprises of the middle class
 Need and Significance of Study
Before five years Hero was the market leader in motor bike industry in
India. But in now a day they are losing their grip in motor bike industry, none of their
bike except ‘Splendor’ became a success. And the competitors like Bajaj and TVS has
taken advantage of this. There is no doubt that the companies market share is falling
down. So this study will help to understand and identify what the consumer feels or
perceives about Hero Honda motor bikes. This will help the marketer to identify which
all are the factors that a consumer looks in to when he selects a particular bike. And also
explains how a consumer selects and interprets the qualities of bike that Hero
offers.
 Objectives Of the Study

1) To analyze consumer perception towards Hero Honda motor bikes

2) To get feed back on what consumer expects from Hero Honda
3) To analyze consumer perception towards services offered by Hero Honda and
performance of the motor cycle
 Research Design

Primary data:-

Primary data consists of original information for the specific purpose at hand. It is
first hand information for the direct users of respondents. The tools used to collect the
data may vary and can be collected through various methods like questionnaire, personal
interview
Secondary data:-

Secondary data is the data which is already been collected and assembled. This
data is available with the companies or firms and it can be collected from newspapers,
periodicals, magazines, websites etc.

Sample Design

Sample:

The sample size taken for this research is 70 customers having Hero Honda motorbikes.

Sampling Technique:

Convenient Sampling technique are to be used for this project.

Data Collection Tool:

Questionnaires as the primary form of collecting data.

Statistical techniques:

1. Bar Diagrams
2. Pie-Chart
Statistical tools:

1. Statistical software like Microsoft Excel

 Scope of the study

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

. As the product had a good reputation in the market, this study will help to know
that how Hero lost their grip in motor bike industry. It also helps us to increase
our practical knowledge towards marketing of a company.

The area of the study is considered to be in only Kurnool district

Time and Money are the major constraints of the study

The study is limited to only selected customer in Kurnool

The information provided to the customers is different with each other

The information given by the customer may not be accurate

Limitation Of the Study

 Primary data analysis only depended on the respondents.

 Process of study/survey is limited only to some customers.
 Survey will be conducted for the period of 45 days only.
 Due to constraint of time only city is selected and so it cannot claim to be a
comprehensive study of the population.