Market entry and growth strategy for Hero in Nigerian market

Presented By: Shantnu Mukesh Jain

Why Nigeria?

2nd Largest Economy in Africa A Healthy GDP growth rate of around 6-8% over the past few years Huge consumer base Young and dynamic work force 70% below 30 years Rising per capita income India-like emerging economy Lack of reliable public transport system Traffic problems

Market scope

Market size of 1 million two-wheelers annually US $380 million worth annual turnover Bajaj has already penetrated, selling 22000 bikes monthly Tough competition to Chinese leader (30000 bikes monthly) Obsession with foreign-made products from more economically developed nations Negative image of Made-in-Nigeria label

Good demand for fuel efficient bikes

Challenges

High start up costs Ranks 133 of 183 on ease-of-doing-business index Hero has to begin operations as the third or forth ranked player Presence of informal markets Government restrictions Rising fuel prices

Competition from cheap Chinese competitors and old foe Bajaj

Mode of entry

Follow direct export mode of entry Partnership with local distributer

Ease of penetration
Achieve market segmentation by utilizing Heros wide product range Correct positioning

Rely on own home grown technology

Growth prospects

Reach out to identify the demands of the customer through feedbacks Beat Chinese prices by exporting CKD kits instead of Full body kits

Set up in situ assembly plants

With good response and increase in demand set up local manufacturing plants

Gradually develop own distribution network Utilize cheap Nigerian labor

Marketing strategy

Rope in local youth icons as brand ambassadors Highlight strength - Fuel efficiency

Position it to tackle traffic

Association with sporting events Provide easy financing solutions

Highlight the importance of brand to shrink informal trade

Thank You