HERO HONDA

Init iative towards Rural Market, India

BY-NaveenYadav

• “Hero” is the brand name used by the Munjal brothers in the year 1956 with the f lagship company Hero Cycles.

• It is a joint venture between India's Hero Group and Honda Motor Company. It established in 1984 as the Hero Honda company, India.

• During the 1980s, the company introduced motorcycles that were popular in India for their fuel economy and low cost.

"The majority of India l ives in rural areas and the government is pumping in a lot of money through various programmers. Hero Honda is focusing a lot on rural markets. Going forward, a substantial industry growth is expected to come from these markets.”

- Pawan Munjal, MD and CEO, Hero Honda Motors Limited, in May 2009

GROWTH STRATEGIES

Concentrating On Rural Market

• Fuel-efficient Vehicles With Low Maintenance

ADVERTISEMENTS

TVC ADDS….!

Radio ….! Magazines…!

X-change melas

Adds……!

HERO HONDA OFFERS CHEAPEST MOTORCYCLES IN INDIA, COST BETWEEN 38,000 TO 48,000.

HAR GAON, HAR AANGAN (EVERY VILLAGE, EVERY COURTYARD.)

• 1,00,000 of 6,00,000 villages in country.

• Penetration in Rural Market- 10%

• 500 Sales Representatives to meet potential customer (local people as sales executives )

• Average of 16000 bikes per month. ( sales )

Contd………!

CONTD…..!These representatives

have been given work tasks and not sale targets - they need to meet potential customers and opinion leaders in vil lages.

To strengthen their network in rural areas, the company started sales, servicing and spare part outlets in small towns and vil lages across India.

FOCUSING ON UPGRADING THE MODELS

The most successful product is SPLENDOR in rural market and the company kept on focusing on upgrading the models so, then they later came up with SPLENDOR PLUS and SPLENDOR NXG, which provided extra features and the consumers were satisfied.

COLLECTION OF DATAUnder the rural vertical, they started collecting a lot of data at rural touch

points;

many of their dealers are now meeting, -SARPANCHES, -HEADMASTERS, -AANGANWADI - WORKERS

and other opinion makers to understand the rural consumer better.

THE COMPANY CONDUCTS,

SKITS

DRAMAS

To give some social message and attract the crowd and Advertise its products………..!

Once you earn the vi l lagers loyalty (and they are known for their brand loyalty), i t wi l l be diff icult for competitors to take away your customers.

Conted…….

INTEGRATED RURAL DEVELOPMENT CENTRE

Centre has been set up on 40 acres of land along the Delhi-Jaipur Highway. The Centre-complete with wide approach

-ROADS,

-CLEAN WATER,

-AND EDUCATION FACILITIES

for both adults and children

The Foundation has adopted various vil lages located within vicinity of the Hero Honda factory at Dharuhera for integrated rural development.

CHALLENGES …..

The rural consumer values old customs and tradition. They do not prefer changes.

The Infrastructure Facil it ies- Roads,- warehouses, - communication system, - f inancial facil i t ies are

inadequate in rural areas.- Physical Distribution

bacame Costly

CONTD

The price its competitors are also becoming the threat. For example: bajaj auto’s platina is priced at 38,115.

The l iteracy rate is low in rural areas as compared to urban areas.

This again leads to problem of communication for promotion purposes.

Limited Dealership : -

The dealerships in rural areas is l imited because of which the customer has to go to near by city to buy the product.

Spare Parts :-

of Hero Honda are costl ier than other companies spare parts, so there is problem for rural people to afford.

WHY COMPANY CHOOSE RURAL MARKET

Hero Honda has worked out a major expansion strategy for the rural markets and is planning to strengthen retail f inancing to support the init iat ive that could lead to sett ing up of its own finance arm.

Pawan munjal, MD of Hero Honda, told TOI that rural market would be a special focus area for the company as it is looking at new growth areas to maintain sales momentum in a shrinking market. "We have created a special ‘rural vert ical ' to push growth and this would spearhead our expansion in the rural market, ' Munjal said.

CONTD

India's largest two wheeler company Hero Honda Motors is spreading its wings to capture the commuting bikers' imagination in rural India, after witnessing flat sales growth in 2007-08.

The two wheeler market leader plans to cover 100,000 of the 600,000 vil lages in the country by the end of this financial year under a campaign named Har Gaon, Har Aangan (every vi l lage, every household).

CONCLUSION

Most of the Hero Honda Bikes are purchased by young generation 18 to 30 because they prefer styl ish 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-eff icient bike on Indian roads.

Service & Spare parts are available throughout India in local markets also.

CONTD

While buying a motorcycle, economy is the main consideration in form of maintenance cost, fuel efficiency.

Hero Honda started growing in rural market rapidly with its add campaign and promotion strategies in rural market.

Thank You..!