CHAPTER I

INTRODUCTION

1. INTRODUCTION
1.1 GENERAL 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.

LITERATURE
REVIEW

Review of Literature
The Customer Perception Report includes questions in four key areas, Expectations,
Purchase Decisions, Customer Service, and Future Purchases. So the customer should be invited
to participate in the survey. Setting realistic expectations during the sales process is a vital
component of making happy customers. How a company sets and meets product and service
expectations plays a pivotal role in fashioning customer opinions. How a company meets or
exceeds expectations is measured in three important areas: product/service, support, and price.
These three areas will be used to factor a score for the Expectations category. The results of the
three questions will be used to factor an overall expectations perception score.
The Purchase Decision category gives us a better understanding of how the customer perceives
the purchase process. Two key areas for questions include an open ended question on why they
purchased and a ratings question on their experience. The rating
Question data will be used for the analysis of Purchase Decision category. The open ended
responses from the Why questions will be used for product strengths analysis. The results of
the purchase experience question will be used for the overall Purchase perception analysis.
Customer service is one of the most important differentiations a company can have. For this
report, customers will rate a company in three key areas: customer service, timeliness for
problem resolution, and expertise. These three areas will be used to factor a score for the
Customer Service category.
Purpose o of Literature Review
Literature review is one of the prime parts of every project. The very basic purpose of the
literature review is to gain insight on the theoretical background of the research problem. It
helps the researcher to gain strong theoretical basis of the problem under study and also help
to explore whether any one has done research on the related issue. Thats why literature
review helps one to find out the path of problem solving. In this regards the very basic
purpose of the literature review in this dissertation is same as mentioned
THEORETICAL BACKGROUND OF STUDY
Market

The term market may be considered as a convenient meeting place where buyers and sellers
gather together for the exchange of goods and services. Market means a group of people having
unmet wants, purchasing power to make their demand effective and the will to spend their
income to fulfill those wants. Today a market is equated with the total demand.
The American marketing association defines a market, as the aggregate demand of potential
buyers for a product or service.
Under keen competition, a marketer wants to create or capture and retain the market i.e.
customer demand through an appropriate marketing mix offered to a target market. The market
offering i.e. supply must meet customer demand, which are unmet needs and desires.
Marketing
Marketing is a comprehensive term and it includes all resources and set of activities necessary to
direct and facilitate the flow of goods and services form the producer to the consumer through
the process of distribution. Businessmen regards marketing as a management function to plan
promote and deliver products to the clients or customers. Human efforts, finance and
management constitute the primary resources in marketing.
We have twin activities, which are most significant in marketing:
1. Matching the product with demand i.e. customer needs and desires or the target market.
2. The transfer of ownership and possession at every stage in the flow of goods from the
primary producer to the ultimate consumer.
The American marketing association defines marketing as the process of planning and executing
the conception, pricing, promotion and distribution of ideas, goods and services to create
exchanges that satisfy individual and organizational objectives.
Marketing Management
Marketing management represents an important functional area of business management efforts
for the flow of goods and services from the producer to the consumers. It looks after the
marketing system of the enterprise. It has to plan and develop the product on the basis of known
customer demand.
Marketing management may be defined as, a process of management of marketing programs for
accomplishing organizational goals and objectives.
5

Marketing management has to build up appropriate marketing plan or marketing mix to fulfill the
set goals of the business. It has to formulate sound marketing policies and programs. It looks
after their implementation and control. It has to implement marketing strategies, programs and
campaigns. It must evaluate the effectiveness of each part of marketing mix and introduce
necessary modifications to remove discrepancies in the actual execution of plans, policies,
strategies, procedures and programs.

Marketing Mix
Marketing mix is the set of marketing tools the firm uses to pursue its marketing objectives in the
target market.
There are four elements or variables that make a marketing mix, they are:
1. Decisions on product or service.
2. Decisions on promotion
3. Decisions on price
4. Decisions on distribution.
The four ingredients are closely interrelated. Under the systems approach the decision in one
area affects action in the other. Marketing mix decisions constitute a large part of marketing
management.
According to Philip Kotler the term marketing mix is, the set of controllable variables that the
firm can use to influence the buyers response. In the simplest manner, the basic marketing mix
is the blending of four inputs or sub mixes, which form the core of the marketing system.
Product mix decision refers to decisions on product variety, quality, design, features, brand
image, packaging, sizes, services, warranties and returns.
Price mix decision refers to decisions on the product list price, discounts, allowances, and
payment period and credit terms available.
Place mix decision refers to decisions on the channels, coverage, assortments, locations,
inventory and transport of the market offering.

Promotion mix decisions refer to decisions on the products advertising, sales promotion, sales
force, public relations and direct marketing.
Together they form the four Ps of marketing.
Marketing Planning
A marketing plan lies down in writing the marketing objectives, programs and policies to be
adopted to achieve the set marketing objectives. Even before an integrated marketing plan is
prepared the company shall prepare functional plan for each component of marketing mix. To
have a sound marketing plan, every operation is to be examined and the problems are to be
identified. The overall marketing plan should be linked to the distribution channel of the
company to have effective marketing operations.
The marketing planning covers the preparation of functional plans, integration of this plan and
the preparation of master marketing plan to serve the objective of the organization. Marketing
planning is bound to get a better hold of environmental factor.
Marketing Research
Marketing research is the systematic gathering, recording and analyzing of the data about
problems connected to the marketing of goods and services i.e. problems relating to product,
price, promotion and distribution of the 4ps of the marketing mix.
Marketing research is concerned with all those factors, which have a direct impact upon the
marketing of products and services. Marketing research has grown along with the expanded role
of marketing as the focus for the business decision-making.
Need of marketing research
Marketing research is conducted for different purposes. They are:
1. To estimate the potential market for a new product.
2. To know the reactions of consumers to a product already existing in the market.
3. To find out the general marketing condition and tendencies.
4. To know the types of consumer buying and their buying motives.
5. To know the reactions of failure of a product already in the market.
7

6. To assess the strength and weakness of competitors.

Consumer
A person who purchase or has the capacity to purchase the goods of service often for sale by the
marketing firm in order to satisfy personal need and desires.
Perception
Perception is the sensing of stimuli external to the individual organism the act or process of
comprehending the world in which the individual exists.
Perception has been defined by social psychologists as the Complex process by which people
select organize and interpret sensory stimulation in to a meaningful and coherent picture of the
work.
Attitude
Social psychologist defined attitude as an emotionalized predisposition to respond positively or
negatively to an object. Predisposition can be thought of as categories of meaning stored in the
memory of a person and are based on previous experience. Predisposing the person to have in an
specific manner towards a certain objects in the environment.
Brand
A brand is a name, term, symbol, design or a combination of them which is intended to identify
the goods or services of one seller or group of sellers and to differentiate them from those of
competitors.
Consumer Behavior
The term consumer behavior can be defined, as, the behavior that the consumer display in
searching for, purchasing, using and evaluating products, services and ideas, which they expect,
will satisfy their needs. The study of consumer behavior enables marketers to understand and
predict consumer behavior in the market place; it also promotes understanding of the role that
consumption plays in the lives of individuals.
Consumer behavior refers to all psychological social and physical behavior of potential
consumers as they become aware of, evaluate, purchase and consume and tell others about
8

products and services. It is the pattern of response of buyers to marketing offer of a firm. It refers
to the process as how consumers make their purchase decisions. It is concerned with what, why,
how much, when and from whom buyers make their purchases of goods and services.
Model of consumer behavior
The starting point of understanding consumer behavior is the stimulus-response model.
Marketing and environmental stimuli enter the buyers consciousness. The buyers
characteristics and decision process lead to certain purchase decisions. The marketers task is to
understand what happens in the buyers consciousness between the arrival of outside stimuli and
the buyers purchase decisions.
Major Factors Influencing Consumer Behavior

Consumers buying behavior is influenced by cultural, social, personal and psychological factors.
1. Cultural Factors
Cultural factors exert the broadest and deepest influence on consumer behavior. The roles
played by the buyers culture, subculture and social class are particularly important.
o Culture
Culture refers to that complex whole which includes in it knowledge, beliefs, art or anything
man acquires as a member of society.
o Subculture
Each culture consists of smaller subcultures that provide more specific identification and
socialization for their members. Sub cultures include nationalities, religions, racial groups
and geographic regions.
o Social Class
Virtually all-human societies exhibit social stratification. Stratification sometimes takes the
form of a caste system where the members of different castes are reared for certain roles and
cannot change their caste membership more frequently; stratification takes the form of social
class.
2. Social Factors
9

o Reference Groups
A persons reference groups consists of all the groups that have a direct or indirect influence
on the persons attitudes or behavior.
o Family
The family is the most important consumer buying organization in the society and it
constitutes the most influential primary reference group.
o Roles and statuses
A person participates in many groups, family, clubs, organizations etc. The persons position
in each group can be defined in terms of role and status. A role consists of the activities that a
person is expected to perform. Each role carries a status.
3. Personal Factors
o Age and stage in the life cycle
People buy different goods and services over their lifetime. Taste in clothes, furniture and
recreation is all age related.
Consumption is shaped by the family life cycle. Marketers often choose life-cycle groups as
their target market.
o Occupation and economic circumstances
Occupation also influences a persons consumption pattern.
Product choice is greatly affected by economic circumstances; spendable income, savings
and assets, debts, borrowing power and attitude toward spending versus saving.
o Lifestyle
People from the same subculture, social class, and occupation may lead quite different
lifestyles. A lifestyle is the persons pattern of living in the world expressed in activities,
interests ands opinions. Lifestyle portrays the world person interacting with his or her
environment.
o Personality and self concept
Each person has a distinct personality that influences buying behavior. It is that
distinguishing psychological characteristics that lead to relatively consistent and enduring
10

responses to environment. Related to personality is self-concept or self image. Marketers try

to develop brand images that match target markets self image.

4. Psychological Factors
o Motivation
A person has many needs at a given time. A need becomes a motive when it is aroused to a
sufficient level of intensity. A motive is a need that is sufficiently pressing to drive the person
to act.
o Perception
Perception is the process by which an individual selects, organizes and interprets information
inputs to create a meaningful picture of the world. How a, motivated person actually acts is
influenced by his or her perceptions of the situation.
o Learning
When people act they learn. Learning involves changes in an individuals behavior arising
from experience. Learning theory teaches marketers that they can build up demand for a
product by associating it with strong drives, using motivating cues and positive
reinforcement.
o Beliefs and attitudes
Through doing and learning, people acquire beliefs and attitudes. These in turn influence
buying behavior. A belief is a descriptive thought that a person holds about something. The
beliefs make up product and brand images and people act on these images.
An attitude is a person enduring favorable or unfavorable evaluations, emotion feelings and
action tendencies toward some object or idea. Thus a company would be well advised to fit
product into existing attitudes rather than try and change peoples attitudes. The two wheeler
industry in India collectively produces 20 Lakh vehicles a year. Some players have managed
to cut through consumer resistance with innovation, pricing and aggressive marketing. The
competition level in the two wheeler industry is very high now. Many brands are fighting in
the market for maximum share. They have to bring out a lot of differentiation among them.

11

The major duty of the marketer is to know the reasons for preferring particular motor bike by
the consumers.

Research Gap
Stepping down of Hero 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 consumers 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 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 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.

12

Objectives of the Study

1) To analyze consumer perception towards Hero motor bikes

2) To get feedback on what consumer expects from Hero
3) To analyze consumer perception towards services offered by Hero and performance of
the motor cycle

13

HYPOTHESIS
Hypothesis 1
H0 There is no Association between age and consumer perception
H1 There is an Association between age and consumer perception

Hypothesis 2
H0 There is no Association between Qualification and consumer perception
H1 There is an Association between Qualification and consumer perception

Hypothesis 3
H0 There is no Association between Gender and consumer perception
H1 There is an Association between Gender and consumer perception

Hypothesis 4
H0 There is no Association between income and consumer perception
H1 There is an Association between income and consumer perception

Hypothesis 5
H0 There is no Association between area and buying decision
H1 There is an Association between age and buying decision

Hypothesis 6
H0 There is no Association between market position of the company and buying decision
H1 There is an Association between market position of the company and buying decision

Hypothesis 7
H0 There is no Association between price of the bike and buying decision
H1 There is an Association between price of the bike and buying decision

Hypothesis 8
H0 There is no Association between trends and fashion of the bike and buying decision
H1 There is an Association between trends and fashion of the bike and buying decision

Hypothesis 9
H0 There is no Association between services provided by the hero motors and buying decision
H1 There is an Association between services provided by the hero motors and buying decision

14

Scope of the study:The study helps in having an awareness of customer satisfaction towards Hero moto
corp. 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.
a) In this study it is not possible to collect the opinion of all the customers owing to
personal constraints. So the assumptions are drawn on the basis of the information
given by the respondents.
b) The study needs to be completed within a specified time of one month and in certain
restricted areas. So the findings cannot be generalized for the company as a whole.
c) This study covers only a limited Hero sector. So this study will not be applicable for
those areas.
Period of the study
The duration of the study is 45 days

15

Methodology
The research will be done through survey method. The collection of data will be done
through questionnaire, interview and related websites. The area of this survey consists of
Thirumulgherry. The collection of data will be done with the help of a structured questionnaire.
The designing of questionnaire needs precision and classification of the subject, so that the
respondents can easily understand the question and can answer it sincerely and correctly.
Sources of Data
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 100 customers having Hero motorbikes.
Sampling Technique
Convenient Sampling technique is used for this project.
Data Collection Tool
Questionnaires as the primary form of collecting data.
Statistical techniques
16

1. Bar Diagrams
2. Pie-Chart

CHAPTER II
INDUSTRY PROFILE

COMPANY PROFILE

17

INDUSTRY PROFILE
Historical Industry Development
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.
18

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 - 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
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 two-wheeler 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
Honda, all the major producers suffered from recession in FY93 and FY94. Hero Honda 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.
19

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.

Evolution

of

Two-wheeler

Industry

in

India

Two-wheeler segment is one of the most important components of the automobile sector that has
undergone significant changes due to shift in policy environment. The two-wheeler industry has
been in existence in the country since 1955. It consists of three segments viz. scooters,
motorcycles and mopeds. According to the figures published by SIAM, the share of twowheelers in automobile sector in terms of units sold was about 80 per cent during 2003-04. This
high figure itself is suggestive of the importance of the sector. In the initial years, entry of firms,
capacity expansion, choice of products including capacity mix and technology, all critical areas
of functioning of an industry, were effectively controlled by the State machinery. The lapses in
the system had invited fresh policy options that came into being in late sixties. Amongst these
policies, Monopolies and Restrictive Trade Practices (MRTP) and Foreign Exchange Regulation
Act (FERA) were aimed at regulating monopoly and foreign investment respectively. This
controlling mechanism over the industry resulted in: (a) several firms operating below minimum
scale of efficiency; (b) under-utilization of capacity; and (c) usage of outdated technology.
Recognition of the damaging effects of licensing and fettering policies led to initiation of
reforms, which ultimately took a more prominent shape with the introduction of the New
Economic

Policy

(NEP)

in

1985.

However, the major set of reforms was launched in the year 1991 in response to the major
macroeconomic crisis faced by the economy. The industrial policies shifted from a regime of
20

regulation and tight control to a more liberalized and competitive era. Two major results of
policy changes during these years in two-wheeler industry were that the, weaker players died out
giving way to the new entrants and superior products and a sizeable increase in number of brands
entered the market that compelled the firms to compete on the basis of product attributes. Finally,
the two-wheeler industry in the country has been able to witness a proliferation of brands with
introduction of new technology as well as increase in number of players. However, with various
policy measures undertaken in order to increase the competition, though the degree of
concentration has been lessened over time, deregulation of the industry has not really resulted in
higher level of competition.
A Growth Perspective
The composition of the two-wheeler industry has witnessed sea changes in the post-reform
period. In 1991, the shares of scooters were about 50 per cent of the total 2-wheeler demand in
the Indian market. Motorcycle and moped had been experiencing almost equal level of shares in
the total number of two-wheelers. In 2003-04, the share of motorcycles increased to 78 per cent
of the total two-wheelers while the shares of scooters and mopeds declined to the level of 16 and
6 per cent respectively. A clear picture of the motorcycle segment's gaining importance during
this period is exhibited by the Figures 1, 2 and 3 depicting total sales, share and annual growth
during the period 1993-94 through 2003-04.

INDIAN TWO WHEELER INDUSTRY

The two-wheeler market has had a perceptible shift from a buyers market to a sellers market with
a variety of choices. Players are competing on various fronts such as pricing, technology, product
design, productivity, sales process, after sales service, marketing and distribution. In the short
term, market shares of individual manufacturers are sensitive to capacity, product acceptance,
pricing and competitive pressures from other manufacturers.
All the four segments, Motor Cycles, Scooters, Scooterettes and Mopeds have witnessed
capacity additions in the last one year and it will continue in the upcoming period as and when
the foreign companies opens a local subsidiary. Over this period as and when the foreign
21

companies opens a local subsidiary. Over this period, only the Motor Cycle segment is expected
witness higher demand vise-versa supply, while the Scooters, Scooterettes and Mopeds supply
will outstrip demand.
As incomes grew and people felt the need to own a private means of transport, sale of twowheelers raised. Penetration of the two-wheelers is expected to increase to approximately to
more than 25%by 2005.
The Motor Cycle segment will continue to lead the demand for two-wheelers in the coming
years. Motor Cycle sales are expected to increase by 20% as compared to 1% growth in the
Scooter market and 3% by Scooterttes and Moped sales respectively for the next two-years.
The Indian two and three wheeler industry produced and sold about 4.5million units in 20032004. Like any other Indian Industry, the policy environment guided and controlled this segment
of the industry as well. Licensing norms ruled the day till mid 80s. Access to foreign technology
inputs and foreign investment were strictly government controlled.
Since mid 80s, the Indian automobile industry was administered select doses of liberalization.
Foreign collaborations with equity up to 26%, fresh licenses and conditional CKD imports, etc.
were allowed. This liberalization coupled with the Indian market potential attracted world majors
like Honda, Yamaha, Suzuki and Piaggio setup their Joint Ventures during mid 80s in India.
From 1991 onwards, the industry was de-licensed. Automatic approvals for foreign equity up to
51% and equity participation in excess of 51% with specific approvals entered the rulebook.
Honda converted one of its Joint Ventures to a 51% subsidiary
On regulation front, Central Motor Vehicles Regulations mandates the safety, emissions and
other norms. Vehicular emissions standards came into effect first in 1991 and were tightened
further in 1996. For the two and three wheeler these are among the tightest in the world. Further
tightening has taken effect from April 2000.

The four-stroke Motor Cycle has added new dimensions to the two-wheeler segment. The major
players in the Motor Cycle market are Bajaj Auto Ltd. with its Pulsar DTS-i, Hero Honda Co.
22

with its Hero Honda Karizma. Competition is intense in all segments of the two-wheeler industry
with fuel efficiency and price being crucial considerations for success. In the recent past, a
manufacturers ability at product innovation and opening new market niches have also been
crucial for the growth of the industry. Bajaj Auto Ltd. entered the Motor Cycle segment in the
mid 80s. Since then it has won market shares increasing indigenization and by opening new
market niches for their products. Bajaj has emphasized its higher safety and superior quality.
Fuel efficiency allowed Hero Honda to dominate the 100cc Motor Cycle segment for most of the
last eight years. Bajaj Auto Ltd. has gained considerable market share in this segment since it
also launched a four-stroke Motor Cycle two years ago. The 100-cc segment is further power
(dominated by Bajaj Pulsar DTS-i), fuel economy and sub-segments. The semi-urban and rural
markets will increase in importance in the future and all manufacturers plan to launch heavier
bikes with stronger suspensions.
The relatively affordable and stable prices of Bajaj Motor Cycles backed by flexible loan options
have caused other Motor Cycles to continuously lose market share to them in the previous few
years.
The scooter market is dominated by 150cc vehicles from Bajaj Auto and LML, with the rest
being served by 100cc variometric scooters from Kinetic Honda.
For scooters, northern India is the major market contributing nearly 46% of the total scooter
sales. Western and southern India take up second and third position with 27.5% and 15.7%
respectively.
For our calculations we consider TVS Scooty sales as part of scooter sales as given by Society of
Indian Automobile Manufacturers (SIAM).
The Indian motorcycle industry can be broadly categorized in to Indian motorcycles and IndoJapanese motorcycles. The Indo-Japanese motorcycle segment is dominated by Hero group,
Bajaj and Escorts in collaboration with Japanese vehicle manufacturers Honda, Kawasaki and
Yamaha respectively. The Indian motorcycles segment is dominated by Bajaj (M80), Escorts and
Royal Enfield.
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In motorcycles sales, western region leads with a market share of 40% of the total motorcycle
sales. South and north regions come second and third with a market share of 27.5% and 17.4% of
total motorcycle sales respectively.
For mopeds southern and western regions of India are the major contributors with nearly 52%
and 28% of the over all moped sales. Looking at the population of moped sales in south it
appears that the sale of mopeds has reached stagnation.
Western and southern region lead in three-wheeler sales with a contribution of 42% and 35.8% of
total three-wheeler sales respectively.
In terms of two-wheeler vehicle population, Maharashtra stands first with a population of
2.96mn vehicles and Gujarat stands second with 2.64mn vehicles as on March 31 st 1997. Tamil
Nadu is the third largest state with 2.45mn two-wheeler population.
In terms of three-wheeler vehicle population Maharashtra stands first with a population of
0.39mn and Gujarat in the second place with 0.22mn as on March 31st 1997.
Penetration of Two-Wheelers
On a base of around 28mn vehicles on Indian roads and around 175mn households, there were
only 160 motorized two-wheelers per thousand households in FY98. This compares poorly with
countries like Thailand where it is around 600 per thousand households. Also with a household
size of 5.5 persons and more than one wage earner in about 60% of the households, the potential
for a second vehicle demand is also good.The NCAER in its latest report on market
demographics has clearly indicated that post-liberalization (ie FY92 to FY96) Indian households
have graduated to higher income groups as can be seen in the table below.

24

Company Profile
MPM Auto Private Limited is established in the year 1998, at headed by Arvind Patel , who is
the proprietor of this unit. It is authorized by. It provides financial assistance through Indus Ind
Bank, Family Credit and Sri Ram Finance. It also has automated workshop.
It has various departments:

Accountant department

Sales department.

Spares department.

Workshop department.

Total employees in MPM Auto Private Limited are sixty members in various departments.

In Accountant department three employees are employed.

In Sales department four employees are employed.

In Spares department four employees are employed.

In Housekeeping there are four workers.

In Security there are two.

In Workshop department eighty six employees are employed.

SALES:
Sales of the MPM Auto Private Limited are higher than any of the two wheeler company at
Trimulgherry.
Performance of MPM Auto Private Limited in Sales:

With a sales of 150 200 units per months.

Sales of spare parts: With the sales of 11 lakhs per month.

PROMOTIONAL ACTIVITIES:
The promotional activities adopted by MPM Auto Private Limited are:
25

Advertising in Newspapers.

Free campaigns.

Test rides.

Gift schemes.

Hoarding and Wall paintings.

Mileage content.

Pamphlets are distributed all over

They started doing research to find out the sales, customer satisfaction, brand awareness of
vehicles.
Promotional expenses have been born by MPM Auto Private Limited and Hero, shares in
advertisement cost.
SERVICE OFFERED:
The service offered to the customers MPM Auto Private Limited is six free services after sales of
motor cycles.

Free check up.

Finance through banks.

Demonstrations for new Product.

Acceptance of warranty claims.

WORKING TIME:
The working time in MPM Auto Private Limited are ten hours per day commencing, from nine
a.m to eight p.m with one hour break for lunch.

HISTORY:
Hero Motors Limited is the World's single largest two-wheeler motorcycle company.
Honda Motor Company of Japan and the Hero Group entered a joint venture to setup Hero
Honda Motors Limited in 1984.
26

The joint venture between India's Hero Group and Honda Motor Company, Japan has not
only created the world's single largest two wheeler company but also one of the most successful
joint ventures worldwide.
During the 80s, Hero Honda became the first company in India to prove that it was
possible to drive a vehicle without polluting the roads. The company introduced new generation
motorcycles that set industry benchmarks for fuel thrift and low emission. A legendary 'Fill it Shut it - Forget it' campaign captured the imagination of commuters across India, and Hero
Honda sold millions of bikes purely on the commitment of increased mileage.
Over 20 million Hero Honda two wheelers tread Indian roads today. These are almost as
many as the number of people in Finland, Ireland and Sweden put together. Hero Honda has
consistently grown at double digits since inception; and today, every second motorcycle sold in
the country is a Hero Honda. Every 30 seconds, someone in India buys Hero Honda's top -selling
motorcycle Splendor. This festive season, the company sold half a million two wheelers in a
single montha feat unparalleled in global automotive history.
Hero Honda became the first company in the country to introduce four-stroke
motorcycles and set the standards for fuel efficiency, pollution control and quality. It has an
excellent distribution and service network spread throughout the country.
Hero Honda bikes currently roll out from its three globally benchmarked manufacturing
facilities. Two of these are based at Dharuhera and Gurgaon in Haryana and the third state of the
art manufacturing facility was inaugurated at Haridwar, Uttrakhand in April this year. These
plants together are capable of producing out 4.4 million units per year.
Having reached an unassailable pole position in the Indian two wheeler market, Hero is
constantly working towards consolidating its position in the market place. The company believes
that changing demographic profile of India, increasing urbanization and the empowerment of
rural India will add millions of new families to the economic mainstream. This would provide
the growth ballast that would sustain Hero in the years to come. As Brijmohan Lall Munjal, the
Chairman, Hero Motors succinctly points out, 'We pioneered India's motorcycle industry, and it's
our responsibility now to take the industry to the next level. We'll do all it takes to reach there.''
27

Product range of the company includes:

CD Dawn

CD Deluxe

Pleasure

Splendor +

Splendor NXG

Passion PRO

Passion Plus

Super Splendor

Glamour

Glamour PGM FI

Achiever

CBZ Extreme

Hunk

Karizma

28

CHAPTER III
DATA ANALYSIS
&
INTERPRETATION

29

ANALYSIS OF DATA COLLECTED

1 Gender of the Respondents
Table No 4. 1

GENDER

NO OF RESPONDENTS

% OF RESPONDENTS

MALE

96

96%

FEMALE

4%

TOTAL
100
100%
Interpretation: The above table showing the sex of the respondents those who participated in
the survey
Chart No 4.1

Analysis: Above 90% of respondents of the survey were male customers and there were only a
few female respondents.

30

2. Age of the Respondents

Table No 4. 2
AGE

NO. OF RESPONDENTS

% OF RESPONDENTS

18-25
25-40
40-55

42
34
19

42%
34%
19%

ABOVE 55

5%

100

100%

TOTAL

Interpretation: The above table showing the age categories of the Hero customers who
participated in the survey
Chart No 4.2

Analysis: Above 40% of the participants of the survey were between18-25 of age and second
most participants were between25-40. There were only 5 participants responded above 55 age
group
31

3.

Occupation of the Respondents

Table No 4. 3
Occupation No of Respondents

% of Respondents

Business
Professional

18
14

18%
14%

Employee

20

20%

Student
Others
Total

38
10
100

38%
10%
100%

Interpretation: The above table showing the occupation of the Hero owners those who
participated in the survey and their percentage wise analysis
Chart No 4.3

Analysis: The majority of the Hero customers participated in the survey were students. There
were 38% and the 20% employees who are Hero owners. And the Professionals and
Businessmen constitute only 32%.
32

4.

SOURCES OF AWARENESS OF HERO

Table No 4. 4
SOURCE

NO. OF RESPONDENTS

% OF RESPONDENTS

ADVERTISEMENT

38

38%

FRIENDS

24

24%

RELATIVES

10

10%

OTHERS
TOTAL

28
100

28%
100%

INTERPRETATION: - The above table tells about which of the source is more effective in
spreading the awareness about Hero bikes

Chart No 4.4

Analysis: This statistic reveals that greater part of respondents have got the information from
T.V and advertisement other than friends & relatives which plays an important role in
influencing them to opt for Hero. This reveals that Hero is able to influence its consumer base to
tell other about their product.

5.

SATISFACTION ABOUT PRODUCT BRIEFING DONE BY SALES EXECUTIVE

33

Table No 4. 5
SATISFACTION

NO.

OF %

YES
NO
TOTAL

RESPONDENTS
92
8
100

OF

RESPONDENTS
92%
8%
100%

INTERPRETATION: - This table showing the satisfaction level of customer about the product
briefing done by the sales executive

Chart No 4.5

Analysis: The statistic reveals that the product profile presented by the Salesman of Hero is truly
trustworthy with a majority of 92% of respondents showing satisfaction towards products
briefing.

6. TEST RIDE PROCESS

Table No 4. 6
34

TEST RIDE
YES
NO
TOTAL

NO. OF RESPONDENTS
100
0
100

% OF RESPONDENT
100%
0%
100%

INTERPRETATION: - This table showing no. of respondents took a test drive of Hero bike
Chart No 4.6

Analysis:
The statistic reveals that almost all the customers are offered for a test drive and were
satisfied with the process.
The test ride is offered within the limits of the showroom and a service employee is sent with
the customer.

7.

PERCEPTION TOWARDS SALES PROCESS

Table No 4. 7

35

PERCEPTION

NO. OF RESPONDENTS

% OF RESPONDENTS

VERY GOOD
GOOD
FAIR
POOR
TOTAL

33
56
11
0
100

33%
56%
11%
0%
100%

Interpretation: - This table indicates perception level of Hero Honda customers about the over
all sales process of Hero bikes providing by the manufacturer through their
dealers

Chart No 4.7

Analysis: The study reveals that the consumer perceives the dealers sales process as good and
very good with the percentage being 56% and 33% respectively.

8.

SATISFACTION ABOUT AFTER SALES SERVICE

Table No 4.8
36

SATISFIED

NO. OF RESPONDENTS

% OF RESPONDENTS

YES
NO
TOTAL

93
7
100

93%
7%
100%

Interpretation: - This table shows the satisfaction level of customers about the after sales
services provided by Hero

Chart No 4.8

Analysis: The statistic indicates that the greater part of respondent are satisfied with the sales
service which falls

9.

PERCEPTION OF RESPONDENTS REGARDING COMPLAINT RECOGNITION

Table No 4.9

PERCEPTION

NO. OF RESPONDENTS

37

% OF RESPONDENTS

VERYGOOD

36

36%

GOOD
FAIR
POOR
TOTAL

53
11
0
100

53%
11%
0%
100%

Interpretation: - The table reveals that the complaints of consumer after sales were duly
attended by the sales force. This shall be of competitive tool to be used to build up the
brand image.

Chart No 4.9

Analysis: More than 50% of the respondents said that the complaint recognition of Hero is
good. And nobody claimed that their complaint recognition is poor. This indicates that Hero
is providing their customers good services.

10. PERCEPTION TOWARDS MECHANICS OF HERO

Table No 4.10
EXPERT MECHANICS

NO.OF RESPONDENTS

% OF RESPONDENTS

YES

78

78%
38

NO

22

22%

TOTAL

100

100%

Interpretation: This table shows that whether Hero have their own well trained and expert
mechanics those who can meet the needs and expectation of the consumer or not
Chart No 4.10

Analysis: Majority of the consumers felt that Hero having good and well trained mechanics to
provide better service to the customers as per their expectation.

11.

PERCEPTIOIN

TOWARDS

THE

ATTRIBUTES

Table No 4.11
ATTRIBUTES

NO OF RESPONDENTS
39

% OF RESPONDENTS

OF

HERO

STYLE
MILEAGE

13
32

13%
32%

PERFORMANCE

24

24%

COMFORT
PRICE
BRAND NAME

11
4
16

11%
4%
16%

TOTAL

100

100%

Interpretation: The above table showing that the attribute of Hero which the customers ranked
most. This indicates that which of the attribute the consumer likes most in a Hero motor bike
Chart No 4.11

Analysis: Most of the consumers those who participated in the survey ranked mileage as most
attractive attribute of Hero. And the second most attribute which got ranked first is the
performance of Hero bike. The least attractive attribute is price.

12. CONSUMER PERCEPTION TOWARDS PERFORMANCE OF HERO

Table No 4. 12
OPINION

NO. OF RESPONDENTS

40

% OF RESPONDENTS

EXCELLENT

27

27%

GOOD
SATISFACTORY

56
17

56%
17%

POOR
TOTAL

0
100

0%
100%

INTERPRETATION: - This table indicates consumers satisfaction towards

the performance of the Hero motor bikes
Chart No 4.12

Analysis: As per the above table the respondents feel that Hero performance is good revealed by
their personal experience of using the bike. This shows that Hero has very good market potential
through its performance

13. AVAILABILITY OF SPARE PARTS OF THE HERO

Table No 4.13
41

AVAILABILITY

NO OF RESPONDENTS

% OF RESPONDENTS

EASILY AVAILABLE

100

100%

HARDLY AVAILABLE

0%

NOT AVAILABLE

0%

TOTAL

100

100%

Interpretation: The above table showing the availability of the Hero spares parts
Chart No 4.13

Analysis: The Hero Honda customers are satisfied about the availability of its spare parts. All the
respondents said that the Hero spares are easily available.

14. CONSUMERS PREFERENCE IN SERVICING THE BIKE

Table No 4.14

42

SERVICE PREFERENCE

NO OF RESPONDENTS

% OF RESPONDENTS

SERVICE CENTRE

47

47%

AUTHORISED DEALER

34

34%

LOCAL MECHANIC

19

19%

TOTAL

100

100%

Interpretation: This is about where would the consumer prefers when it comes to the servicing
bike. Whether they choose service centre or authorized dealer. Other than this would they prefer
local mechanics.
Chart No 4.14

Analysis: Majority of the consumers prefers service centre for servicing their bike. And the
second most preference is authorized dealers apart from this only a small no. of consumers
prefers local mechanics.

15. FACTORS INFLUENCED IN PURCHASE DECISION

Table No 4. 15
FACTORS

NO. OF RESPONDENTS

% OF RESPONDENTS

POWER

13

13%
43

STYLE
PRICE REDUCTION

17
26

17%
26%

MORE COLOURS
FREE ACCESSORIES

9
11

9%
11%

FUEL EFFICIENCY

24

24%

TOTAL

100

100

Interpretation: - This is about the factor which influenced the customer to take his decision to buy
a Hero bike.
Chart No 4.15

Analysis: From the study its revealed that the price cut from Hero influenced customer most for
buying the bike and the percentage being 26%. This is followed by an influence of fuel
efficiency and style with 24% and 17% of the respondents
16. CONSUMERS PREFERENCE FOR HERO BRANDS
Table No 4. 16
BRANDS

NO OF RESPONDENTS
44

% OF RESPONDENTS

SPLENDOR+

20

20%

PASSION+
CD-DAWN

16
7

16%
7%

CBZ
CBZ EXTREME
AMBITION
KARIZMA
SUPER SPLENDOR
GLAMOUR
PLEASURE

12
5
2
10
18
6
4

12%
5%
2%
10%
18%
6%
4%

TOTAL

100

100%

Interpretation: This table showing consumers preference towards Hero brands

Chart No 4.16

Analysis: The most preferred two brands of Hero are Splendor and Super Splendor. The other
brands like Passion, Karizma and CBZ extreme is also preferred by the customers. But the fact is
that the most of the Hero customers are Splendor+ owners.
17. CONSUMERS PREFERENCE FOR ALTERNATIVE BRAND OF TWO WHEELER
Table No 4. 17
BRANDS
TVS

NO OF RESPONDENTS
22

%OF RESPONDENTS
22%
45

BAJAJ
YAMAHA
HONDA
SUZUKI
OTHERS
TOTAL

48
14
12
4
0
100

48%
14%
12%
4%
0%
100%

Interpretation: This table indicates that which brand consumer prefer most other than Hero.
Chart No 4.17

Analysis: The consumers prefer Bajaj most other than Hero in the two wheeler industry. The
48% of the Hero Honda customers prefer Bajaj other than Hero thats why Bajaj becoming a big
threat to Hero. And also there is significant increase in the preference of TVS, Yamaha, Honda
and even in Suzuki as well.

46

CHAPTER IV
FINDINGS
SUGGESTIONS

FINDINGS
The old prophecy that once a customer is a customer has become a myth in the present
day competitive world. Brand image is no longer works a magic with the consumer. So to hold

47

the customer to the brand and attract new consumers the company must produce products that
are efficient and competent along with its marketing activities that help in sales of the product.
After analyzing the response of the consumer interviewing through questionnaire and
observation the following were found in the study.
1. Hero Honda motor cycles were the market leader in the Two Wheeler segment.
But they are losing their grip in the market. Even the 48% Hero customers said
that if they get a second chance they would prefer Bajaj.
2. The Brand Name of Hero is still there in the market and in the minds of the
customer.
3. There are only a few women Hero customers and they own Hero Pleasure.
4. Now days the main Hero customers are students between 18-25 years of age and
they like the bike because of its mileage.
5. Advertisements of Hero bikes are very effective. Introduction of Hrithik Roshan
helps Hero a lot.
6. Majority of the customers got the opportunity of test ride and they are satisfied
with the product briefing by the Hero sales executive.
7. The most demanded Hero Brands are Splendor+ and Super Splendor. Major part
of the users of this brand is employees next are students.
8. Most of the Hero customers have satisfied with the after sale service and servicing
of bike.
9. From analysis and interpretation it is found that Hero is mainly chosen for its
mileage performance and brand image.
10. Majority of the customers have satisfied with the performance of Hero Honda.

48

11. HERO is the only two wheeler company in India which has given these vast
ranges of motorcycles to the market, obtained form general observation during the
study
12. HERO has plans of letting some more new models in future such as CBZ Extreme
.As per the information it was found that splendor is the worlds largest selling
bike.
13. Majority of the customers were aware of HERO through T.V. & newspapers
advertisement. Other than this there friends & Relatives also place an important
role in influencing the customer
14. And in the case of servicing and repairing the bike most of them prefer Service
Centers Majority of customers get their vehicle service a Authorized service units
and authorized dealers and very few services on to local services centers.
15. The most important factor which influenced the customer to buy a Hero bike is
price reduction followed by fuel efficiency.
16. Customers are satisfied about HERO bike because of easy availability of spares
parts of their bike.
17. From the survey its revealed that Bajaj motors is the foremost competitor of Hero
followed by TVS.
18. HERO bikes are said to have very good resale value in the market.

Conclusions

49

Hero is one of leading two wheeler producer in the world and a major player in the Indian
Market. They were the producer of largest selling motor cycle of the world that is Hero Splendor
it has its own importance still in the market. But from the past two or three years Hero suffered a
slight loss in its market share and Bajaj became a big competitor to Hero. The introduction of
Bajaj Pulsar is one of the biggest threats to Hero. Hero is one of the leading two wheeler
producer in the globe. It holds an important place in the minds of consumer by providing
efficient service and better products. Product efficiency and innovations are the method they live
up today. Their engineering is comprehensive.
Consumer perception towards Hero motorcycles is very good. It has created a very good brand
image for it self by providing low maintenance, fuel efficient, sleek looking models along with
efficient after sales service. It has attracted every class of customers.
In todays competitive business environment, it is only due to the positive perception of the
consumer that the company is being able to compete in the market with its other competitors.

RECOMMENDATONS AND SUGGESTIONS

50

1. Most of the customers are of the view that the price tag of HERO bikes as compared
to other similar bikes is a bit higher. Hence the price of the bikes especially the power
range bikes like CD DELUXE, CBZ XTREME, and KARIZMA could be reduced.
2. CD-Dawn, Splendor+ and Passion Plus, could be added with more power, mileage
and given with more colours.
3. The customers should be provided with enough information regarding effective
maintenance of the bike so that the consumers get the best from the bike.
4. HERO has to identify those dealers who are facing the problem with sales and take
adequate measures to keep up the so far created brand image.
5. Hero has to use more promotional techniques to improve the sales in future. It has to
conduct more road shows/public display by which the consumer is given with much
detailed information about the product and more public awareness is created.
6. Many existing customer have stated that some Hero vehicle
(CD-Dawn, Splendor) do not have a good road grip. Hence it is suggested that those
vehicle must be re-engineered for better road grip.
7. Many existing customers have stated that the splendor+ be provided with self starter
and disc brakes. So the company should focus on those factors.
8. HERO has offered just one model (HERO PLEASURE) for women whereas its
competitors are offering more then two so they should concentrate on that aspect.
9. The models ACHIEVER and AMBITION should be re-launched with more value
added features.
10. Apart from KARIZMA and CBZ-XTREME all other models are light weight and
hence are prone to accidents.

51

ANNEXURE

ANNEXURE. 1
52

QUESTIONNAIRE
Dear customer .
I Farooq final year MBA student of the St. Peters Engineeering College doing a project work on
Consumer Perception towards HERO Motor Bikes in Thirumulgheery area for my
academic purpose. I request you to kindly fill this questionnaire.
Thanking you,
.1. Name:2. Age: - a) 18-25
3. Sex

b)25-40

c)40-55

Male

d) >55

Female

4. Occupation:a) Business

b) Professional

d) Student

c)Employee

e) Others

5. How did you come to know the name HERO?

a) Friends

b) Advertising

c) Relatives

d) Others

6. Are you satisfied with product briefing done by the sales executive?
a) Yes

b) No

7. Have you gone for test drive?

a) Yes

b) No

8. What is your opinion about overall sales process?

a) Very good

b) Good

c) Fair

d) Poor

9. Are you satisfied with the after sales service provided by Dealer?
a) Yes

b) No

10. Do they have expert mechanics who can cater to the needs of the customers?
a) Yes

b) No

53

11. Rank the attributes of HERO bikes as per your preference, Rank 1-Most attractive, Rank 6Least attractive

12. What is your opinion on the performance of HERO bikes?

13. How is the availability of spare parts of the HERO HONDA?

Easily available

Hardly available

Not available

14. When it comes to service the bike, where would you prefer?
Service centre

Authorized Dealer

Local Mechanic

15. Rank the factors which have influenced you purchase of HERO bike?

Rank 1- Most

influenced, Rank 6- Least influenced

Power

Style

Price reduction

More colors

Free accessories

Fuel Efficiency

16. Which model did you buy?

a) Splendor+

b) Passion+

Karizma g) Super Splendor

i) Glamour

c)CD-Dawn

d) C.B.Z

e) Ambition 135

h) C B Z Extreme

j) Pleasure

17. Rank the Companies as per your preference, Rank1-Most, Rank-Least

T.V.S
Honda

Bajaj
Suzuki

54

Yamaha
Others

f)

BIBLIOGRAPHY

55

BIBLIOGRAPHY

TEXTBOOKS REFERRED
Kotler Philip, Marketing Management, Pearson Education Inc. 11th Edition.
Consumer Behaviour Building Marketing Strategy 9th Edition 2003, Tata McGraw Hill.
Stanton William J, Etzel Michael J, Walker Bruce J, Fundamentals of Marketing,
McGraw-Hill international, Singapore, 1998
NEWSPAPER REFERRED
Economics Times
Business Times
The Times of India
Business Standard

WEB SITE REFERRED

www.herogroup.com
www.autoindia.com

56