COMPARATIVE STUDY OF HERO HONDA AND BAJAJ AUTO

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OBJECTIVES OF THE STUDY

Project study which is being conducted by me is not only a formality for the fulfillment of the

two year full time MBA. But being a management student I tried my best to extract best of

the information available in the market for the use of society and people. Objectives which

are being covered by me in this project are as following-

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.

To find out consumer refers which bike.

To know the post purchase experiences of consumer regarding bikes.

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BAJAJ AUTO LTD.

Company profile

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Bajaj Auto limited is one of the largest two wheeler manufacturing company in India apart

from producing two wheelers they also manufacture three wheelers. It is the world's 4th

largest two- and three-wheeler maker. It is based in Pune, Maharashtra, with plants in Waluj

near Aurangabad, Akurdi and Chakan, near Pune. Bajaj Auto makes motor scooters,

motorcycles and the auto rickshaw.

The company had started way back in 1945. Initially it used to import the two wheelers from

outside, but from 1959 it started manufacturing of two wheelers in the country. By the year

1970 Bajaj Auto had rolled out their 100,000th vehicle. Bajaj scooters and motor cycles have

become an integral part of the Indian milieu and over the years have come to represent the

aspirations of modern India.

Bajaj Auto also has a technical tie up with Kawasaki heavy industries of Japan to produce the

latest motorcycles in India which are of world class quality the Bajaj Kawasaki eliminator has

emerged straight out of the drawing board of Kawasaki heavy industries. The core brand

values of Bajaj Auto limited includes Learning, Innovation, Perfection, Speed and

Transparency.

Bajaj Auto has three manufacturing units in the country at Akurdi, Waluj and Chakan in

Maharashtra, western India, which produced 2,314,787 vehicles in 2005-06. The sales are

backed by a network of after sales service and maintenance work shops all over the country.

Bajaj Auto has products which cater to every segment of the Indian two wheeler market Bajaj

CT 100 Dlx offers a great value for money at the entry level. Similarly Bajaj Discover 125

offers the consumer a great performance without making a big hole in the pocket.

PROFILE:

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Founder Jamnalal Bajaj

Year of Establishment 1945

Industry Automotive - Two & Three Wheelers

Business Group The Bajaj Group

Listings & its codes BSE – Code: 500490;

NSE - Code: BAJAJAUTO

Presence Distribution network covers 50 countries. Dominant

presence in Sri Lanka, Bangladesh, Columbia,

Guatemala, Peru, Egypt, Iran and Indonesia.

Joint Venture Kawasaki Heavy Industries of Japan

Registered & Head Office Akurdi

Pune - 411035

India

Tel.: +(91)-(20)-27472851

Fax: +(91)-(20)-27473398

Works · Akurdi, Pune

· Bajaj Nagar, Waluj Aurangabad

· Chakan Industrial Area, Chakan, Pune

E-mail rahulbajaj@bajajauto.co.in

Website www.bajajauto.com

Company's history

Bajaj Auto came into existence on November 29, 1945 as M/s Bachraj Trading Corporation

Private Limited. It started off by selling imported two- and three-wheelers in India. In 1959, it

obtained license from the Government of India to manufacture two- and three-wheelers and it

went public in 1960. In 1970, it rolled out its 100,000th vehicle. In 1977, it managed to

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produce and sell 100,000 vehicles in a single financial year. In 1985, it started producing at

Waluj in Aurangabad. In 1986, it managed to produce and sell 500,000 vehicles in a single

financial year. In 1995, it rolled out its ten millionth vehicles and produced and sold 1 million

vehicles in a year.

According to the authors of Globality: Competing with Everyone from Everywhere for

Everything, Bajaj has grown operations in 50 countries by creating a line of value-for-money

bikes targeted to the different preferences of entry-level buyers.

Origins

The Bajaj Group was formed in the first days of India's independence from Britain. Its

founder, Jamnalal Bajaj, had been a follower of Mahatma Gandhi, who reportedly referred to

him as a fifth son. 'Whenever I spoke of wealthy men becoming the trustees of their wealth

for the common good I always had this merchant prince principally in mind,' said the

Mahatma after Jamnalal's death.

Jamnalal Bajaj was succeeded by his eldest son, 27-year-old Kamalnayan, in 1942.

Kamalnayan, however, was preoccupied with India's struggle for independence. After this

was achieved, in 1947, Kamalnayan consolidated and diversified the group, branching into

cement, ayurvedic medicines, electrical equipment, and appliances, as well as scooters.

The precursor to Bajaj Auto had been formed on November 29, 1945 as M/s Bachraj Trading

Ltd. It began selling imported two- and three-wheeled vehicles in 1948 and obtained a

manufacturing license from the government 11 years later. The next year, 1960, Bajaj Auto

became a public limited company.

Rahul Bajaj reportedly adored the famous Vespa scooters made by Piaggio of Italy. In 1960,

at the age of 22, he became the Indian licensee for the make; Bajaj Auto began producing its

first two-wheelers the next year.

Rahul Bajaj became the group's chief executive officer in 1968 after first picking up an MBA

at Harvard. He lived next to the factory in Pune, an industrial city three hours' drive from

Bombay. The company had an annual turnover of Rs 72 million at the time. By 1970, the

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company had produced 100,000 vehicles. The oil crisis soon drove cars off the roads in favor

of two-wheelers, much cheaper to buy and many times more fuel-efficient.

A number of new models were introduced in the 1970s, including the three-wheeler goods

carrier and Bajaj Chetak early in the decade and the Bajaj Super and three-wheeled, rear

engine Autorickshaw in 1976 and 1977. Bajaj Auto produced 100,000 vehicles in the 1976-

77 fiscal year alone.

The technical collaboration agreement with Piaggio of Italy expired in 1977. Afterward,

Piaggio, maker of the Vespa brand of scooters, filed patent infringement suits to block Bajaj

scooter sales in the United States, United Kingdom, West Germany, and Hong Kong. Bajaj's

scooter exports plummeted from Rs 133.2 million in 1980-81 to Rs 52 million ($5.4 million)

in 1981-82, although total revenues rose five percent to Rs 1.16 billion. Pretax profits were

cut in half, to Rs 63 million.

New Competition in the 1980s

Japanese and Italian scooter companies began entering the Indian market in the early 1980s.

Although some boasted superior technology and flashier brands, Bajaj Auto had built up

several advantages in the previous decades. Its customers liked the durability of the product

and the ready availability of maintenance; the company's distributors permeated the country.

The Bajaj M-50 debuted in 1981. The new fuel-efficient, 50cc motorcycle was immediately

successful, and the company aimed to be able to make 60,000 of them a year by 1985.

Capacity was the most important constraint for the Indian motorcycle industry. Although the

country's total production rose from 262,000 vehicles in 1976 to 600,000 in 1982, companies

like rival Lohia Machines had difficulty meeting demand. Bajaj Auto's advance orders for

one of its new mini-motorcycles amounted to $57 million. Work on a new plant at Waluj,

Aurangabad commenced in January 1984.

The 1986-87 fiscal year saw the introduction of the Bajaj M-80 and the Kawasaki Bajaj

KB100 motorcycles. The company was making 500,000 vehicles a year at this point.

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Although Rahul Bajaj credited much of his company's success with its focus on one type of

product, he did attempt to diversify into tractor-trailers. In 1987 his attempt to buy control of

Ahsok Leyland failed.

The Bajaj Sunny was launched in 1990; the Kawasaki Bajaj 4S Champion followed a year

later. About this time, the Indian government was initiating a program of market

liberalization, doing away with the old 'license raj' system, which limited the amount of

investment any one company could make in a particular industry.

A possible joint venture with Piaggio was discussed in 1993 but aborted. Rahul Bajaj told the

Financial Times that his company was too large to be considered a potential collaborator by

Japanese firms. It was hoping to increase its exports, which then amounted to just five

percent of sales. The company began by shipping a few thousand vehicles a year to

neighboring Sri Lanka and Bangladesh, but soon was reaching markets in Europe, Latin

America, Africa, and West Asia. Its domestic market share, barely less than 50 percent, was

slowly slipping.

By 1994, Bajaj also was contemplating high-volume, low-cost car manufacture. Several of

Bajaj's rivals were looking at this market as well, which was being rapidly liberalized by the

Indian government.

Bajaj Auto produced one million vehicles in the 1994-95 fiscal year. The company was the

world's fourth largest manufacturer of two-wheelers, behind Japan's Honda, Suzuki, and

Kawasaki. New models included the Bajaj Classic and the Bajaj Super Excel. Bajaj also

signed development agreements with two Japanese engineering firms, Kubota and Tokyo R

& D. Bajaj's most popular models cost about Rs 20,000. 'You just can't beat a Bajaj,' stated

the company's marketing slogan.

The Kawasaki Bajaj Boxer and the RE diesel Autorickshaw were introduced in 1997. The

next year saw the debut of the Kawasaki Bajaj Caliber, the Spirit, and the Legend, India's first

four-stroke scooter. The Caliber sold 100,000 units in its first 12 months. Bajaj was planning

to build its third plant at a cost of Rs 4 billion ($111.6 million) to produce two new models,

one to be developed in collaboration with Cagiva of Italy.

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New Tools in the 1990s

Still, intense competition was beginning to hurt sales at home and abroad during the calendar

year 1997. Bajaj's low-tech, low-cost cycles were not faring as well as its rivals' higher-end

offerings, particularly in high-powered motorcycles, since poorer consumers were

withstanding the worst of the recession. The company invested in its new Pune plant in order

to introduce new models more quickly. The company spent Rs 7.5 billion ($185 million) on

advanced, computer-controlled machine tools. It would need new models to comply with the

more stringent emissions standards slated for 2000. Bajaj began installing Rs 800 catalytic

converters to its two-stroke scooter models beginning in 1999.

Although its domestic market share continued to slip, falling to 40.5 percent, Bajaj Auto's

profits increased slightly at the end of the 1997-98 fiscal year. In fact, Rahul Bajaj was able

to boast, 'My competitors are doing well, but my net profit is still more than the next four

biggest companies combined.' Hero Honda was perhaps Bajaj's most serious local threat; in

fact, in the fall of 1998, Honda Motor of Japan announced that it was withdrawing from this

joint venture.

Bajaj Auto had quadrupled its product design staff to 500. It also acquired technology from

its foreign partners, such as Kawasaki (motorcycles), Kubota (diesel engines), and Cagiva

(scooters). 'Honda's annual spend on R & D is more than my turnover,' noted Ruhal Bajaj.

His son, Sangiv Bajaj, was working to improve the company's supply chain management. A

marketing executive was lured from TVS Suzuki to help push the new cycles.

Several new designs and a dozen upgrades of existing scooters came out in 1998 and 1999.

These, and a surge in consumer confidence, propelled Bajaj to sales records, and it began to

regain market share in the fast-growing motorcycle segment. Sales of three-wheelers fell as

some states, citing traffic and pollution concerns, limited the number of permits issued for

them.

In late 1999, Rahul Bajaj made a bid to acquire ten percent of Piaggio for $65 million. The

Italian firm had exited a relationship with entrepreneur Deepak Singhania and was looking to

reenter the Indian market, possibly through acquisition. Piaggio itself had been mostly bought

out by a German investment bank, Deutsche Morgan Grenfell (DMG), which was looking to

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sell some shares after turning the company around. Bajaj attached several conditions to his

purchase of a minority share, including a seat on the board and an exclusive Piaggio

distributorship in India.

In late 2000, Maruti Udyog emerged as another possible acquisition target. The Indian

government was planning to sell its 50 percent stake in the automaker, a joint venture with

Suzuki of Japan. Bajaj had been approached by several foreign car manufacturers in the past,

including Chrysler (subsequently DaimlerChrysler) in the mid-1990s.

Employment fell from about 23,000 in 1995-96 (the year Bajaj suffered a two-month strike at

its Waluj factory) to 17,000 in 1999-2000. The company planned to lay off another 2,000

workers in the short term and another 3,000 in the following three to four years.

Principal Subsidiaries: Bajaj Auto Finance Ltd.; Bajaj Auto Holdings Ltd.; Bajaj Electricals

Ltd.; Bajaj Hindustan Ltd.; Maharashtra Scooters Ltd.; Mukand Ltd.

Principal Competitors: Honda Motor Co. Ltd.; Suzuki Motor Corporation; Piaggio SpA,

Hero Honda Motorcycle Ltd.

Timeline of new releases

· 1960-1970 - Vespa 150 (Under the license of Piaggio of Italy)

· 1971 - three-wheeler goods carrier

· 1972 - Bajaj Chetak

· 1976 - Bajaj Super

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· 1977 - Rear engine Autorickshaw

· 1981 - Bajaj M-50

· 1986 - Bajaj M-80, Kawasaki Bajaj KB100

· 1990 - Bajaj Sunny

· 1994 - Bajaj Classic

· 1995 - Bajaj Super Excel

· 1997 - Kawasaki Bajaj Boxer, Rear Engine Diesel Auto rickshaw

· 1998 - Kawasaki Bajaj Caliber, Legend(India's first four-stroke scooter)

· 2000 - Bajaj Saffire

· 2001 - Eliminator, Pulsar

· 2003 - Caliber115, Bajaj Wind 125, Bajaj Pulsar

· 2004 - Bajaj CT 100, New Bajaj Chetak 4-stroke with Wonder Gear, Bajaj Discover DTS-i

· 2005 - Bajaj Wave, Bajaj Avenger, Bajaj Discover

· 2006 - Bajaj Platina

· 2007 - Bajaj Pulsar-200, Bajaj Kristal, Bajaj Pulsar 220 DTS-Fi, XCD 125 DTS-Si

· 2008 - Bajaj Discover 135 DTS-i - sport (Upgrade of existing 135cc model)

· 2009 - Bajaj Pulsar 135, Bajaj XCD 135 cc , Bajaj Pulsar 150 DTS-i UG IV, Bajaj Pulsar

180 DTS-i UG IV, Bajaj Pulsar 220 DTS-i , Bajaj Discover 100 DTS-Si.

Some of the models that Bajaj makes (or has made) are:

Scooters

o Bajaj Sunny

o Bajaj Chetak

o Bajaj Cub

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o Bajaj Super

o Bajaj Wave

o Bajaj Legend

Motorcycles

o Kawasaki Eliminator

o Bajaj Pulsar

o Bajaj Kawasaki Wind 125

o Bajaj Boxer

o Bajaj CT 100

o Bajaj Platina

o Bajaj Caliber

o Bajaj Discover

o Bajaj Avenger

Upcoming Models

· Bajaj Blade

· Bajaj Sonic

New Image

The company, over the last decade has successfully changed its image from a scooter

manufacturer to a two wheeler manufacturer, product range ranging from Scooterettes to

Scooters to Motorcycle. Its real growth in numbers has come in the last 4 years after

successful introduction of a few models in the motorcycle segment. Bajaj has redefined both

the value and the premium segments with its motorcycles offering unique features not seen in

their competitors in those classes.

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The entry level Platina features push to cancel indicators, unique throttle control, chrome

graphics, fuel gauge and alloy wheels which are not seen on more expensive executive class

machines of its competitors.

The Bajaj XCD 125 offers an excellent value proposition with its larger engine, LED tail

lamp and Digital meter at the price point of 100cc vehicles from its competitors.

The Discover 135 is available in Disc and Drum brake variants falls between the executive

and premium segments and is ideal for those looking for a bit of additional power without

sacrificing too much on fuel efficiency. Recently a Sport variant has been announced which

is expected to hit the markets shortly.

In the premium segment the Bajaj range includes the Pulsar 150, 200 and 220cc variants in

the sports segment and the Avenger 200 in the cruiser segment.

With the launch of the Kristal, Bajaj Auto have reentered the autogeared scooter segment and

borrows a lot of technologies from the successful motorcycle range such as DTSi, ExhausTec

and SNS suspension.

The GC1000 with its 416cc Diesel engine is an economical commercial vehicle and can be

adapted for a wide variety of purposes.

The company is headed by Rahul Bajaj who is worth more than US$1.5 billion.

Spinoffs and acquisitions

The demerger of Bajaj Auto Ltd into three separate corporate entities—Bajaj Finserv Ltd

(BFL), Bajaj Auto Ltd (BAL), and Bajaj Holdings and Investment Ltd (BHIL)—was

completed with the shares listing on 26 May 2008.

In November 2007, Bajaj Auto acquired 14.5% stake in KTM Power Sports AG (holding

company of KTM Sport motorcycles AG). The two companies have signed a cooperation

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deal, by which KTM will provide the know-how for joint development of the water-cooled

four-stroke 125 and 250 cc engines, and Bajaj will take over the distribution of KTM

products in India and some other Southeast Asian nations. Bajaj said it is open to taking a

majority stake in KTM and is also looking at other takeover opportunities. On 8 January

2008, Managing Director Rajiv Bajaj confirmed the collaboration and announced his

intention to gradually increase Bajaj's stake in KTM to 25%.

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HERO HONDA

MOTORCYCLES LTD.

Company's History

Hero Honda Motorcycles Limited is an Indian manufacturer of motorcycles and scooters.

Hero Honda is a joint venture that began in 1984 between the Hero group of India and Honda

from Japan. It has been the world's biggest manufacturer of 2-wheeled motorized vehicles

since 2001, when it produced 1.3 million motorbikes in a single year.

Hero Honda's Splendor is the world's largest selling motorcycle. Its 2 plants are in Dharuhera

and Gurgaon, both in Haryana, India. It specializes in dual use motorcycles that are low

powered but very fuel efficient.

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Company Profile

“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 1940’s and turned into the world’s 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 relationships 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.

In the year 1984, Mr. Brijmohan Lal Munjal, the Chairman and Managing Director of Hero

Honda Motors (HHM), headed an alliance between the Munjal family and Honda Motor

Company Ltd. (HMC). HHM Mission Statement is: “We, at Hero Honda, are continuously

striving for synergy between technology, systems, and human resources to provide products

and services that meet the quality, performance, and price aspirations of our customers. While

doing so, we maintain the highest standards of ethics and societal responsibilities, constantly

innovate products and processes, and develop teams that keep the momentum going to take

the company to excellence in the new millennium”. This alliance became one of the most

successful joint ventures in India, until the year 1999 when HMC had announced a 100%

subsidiary, Honda Motorcycle & Scooter India (HMSI).

Growth

The business growth of Hero Honda has been phenomenal throughout its early days. The

Munjal family started a modest business of bicycle components. Hero Group expanded so big

that by 2002 they had sold 86 million bicycles producing 16000 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. Hero Honda

Motors Limited was established in joint venture with Honda Motors of Japan in 1984, to

manufacture motorcycles. It is currently the largest producer of Two Wheelers in the world. It

sold 3 million bikes in the year 2005-2006.

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Recently it has also entered in scooter manufacturing, with its model PLEASURE mainly

aimed at girls. The Hero Group has done business differently right from the start and that is

what has helped them to achieve break-through in the competitive two-wheeler market. The

Group's low key, but focused, style of management has earned the company plaudits amidst

investors, employees, vendors and dealers, as also worldwide recognition. The growth of the

Group through the years has been influenced by a number of factors:

Just-in-Time

The Hero Group through the Hero Cycles Division was the first to introduce the concept of

just-in-time inventory. The Group boasts of superb operational efficiencies. Every assembly

line worker operates two machines simultaneously to save time and improve productivity.

The fact that most of the machines are either developed or fabricated in-house, has resulted in

low inventory levels. In Hero Cycles Limited, the just-in-time inventory principle has been

working since the beginning of production in the unit and is functional even till date. This is

the Japanese style of production and in India; Hero is probably the only company to have

mastered the art of the just-in-time inventory principle.

Ancillarisation

An integral part of the Group strategy of doing business differently was providing support to

ancillary units. There are over 300 ancillary units today, whose production is dedicated to

Hero's requirements and also a large number of other vendors, which include some of the

better known companies in the automotive segment. Employee Policy: Another Striking

feature within the Hero Group is the commitment and dedication of its workers. There is no

organized labor union and family members of employees find ready employment within

Hero. The philosophy with regard to labor management is "Hero is growing, grow with

Hero." When it comes to workers' benefits, the Hero Group is known for providing facilities,

further ahead of the industry norms. Long before other companies did so, Hero was giving its

employees a uniform allowance, as well as House Rent Allowance (HRA) and Leave Travel

Allowance (LTA). Extra benefits took the form of medical check-ups, not just for workers,

but also for the immediate family members.

Dealer Network

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The relationship of Hero Group with their dealers is unique in its closeness. The dealers are

considered a part of the Hero family. A nation-wide dealer network comprising of over 5,000

outlets, and have a formidable distribution system in place. Sales agents from Hero travels to

all the corners of the country, visiting dealers and send back daily postcards with information

on the stock position that day, turnover, fresh purchases, anticipated demand and also

competitor action in the region. The manufacturing units have a separate department to

handle dealer complaints and problems and the first response is always given in 24 hours.

Financial Planning

The Hero Group benefits from the Group Chairman's financial acumen and his grasp on

technology, manufacturing and marketing. Group Company, Hero Cycles Limited has one of

the highest labor productivity rates in the world. In Hero Honda Motors Limited, the focus is

on financial and raw material management and a low employee turnover.

Quality

Quality at Hero is attained not just by modern plants and equipment and through latest

technology, but by enforcing a strict discipline. At the Group factories, attaining quality

standards is an everyday practice - a strictly pursued discipline. It comes from an

amalgamation of the latest technology with deep-rooted experience derived from nearly four

decades of hard labor. It is an attitude that masters the challenge of growth and change -

change in consumers' perceptions about products and new aspirations arising from a new

generation of buyers.

Constant technology up gradation ensures that the Group stays in the global mainstream and

maintains its competitive edge. With each of its foreign collaborations, the Group goes onto

strengthen its quality measures as per the book. The Group also employs the services of

independent experts from around the world to assist in new design and production processes.

Diversification

Throughout the years of enormous growth, the Group Chairman, Mr. Lal has actively looked

at diversification. A considerable level of backward integration in its manufacturing activities

has been ample in the Group's growth and led to the establishment of the Hero Cycles Cold

Rolling Division, Munjal and Sunbeam Castings, Munjal Auto Components and Munjal

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Showa Limited amongst other component manufacturing units. Then there were the

expansion into the automotive segment with the setting up of Majestic Auto Limited, where

the first indigenously designed moped, Hero Majestic, went into commercial production in

1978. Then Hero Motors come which introduced Hero Puch, in collaboration with global

technology leader Steyr Daimler Puch of Austria.

Hero Honda Motors was established in 1984 to manufacture 100 cc motorcycles.

The Hero Group also took a venture into other segments like exports, financial services,

information technology, which includes customer response services and software

development.

Performance

During the fiscal year 2008-09, the company sold 3.7 million bikes, a growth of 12% over

last year. In the same year, the company had a market share of 57% in the Indian market.

Hero Honda sells more two wheelers than the second, third and fourth placed two-wheeler

companies put together. Hero Honda's bike Hero Honda Splendor, the world's largest-selling

motorcycle for the years 2001-2003, selling more than one million units per year.

Recognition

The Brand Trust Report published by Trust Research Advisory has ranked Hero Honda in the

13th position among the brands in India.

Suppliers

It is reported Hero Honda has five joint ventures or associate companies, Munjal Showa, AG

Industries, Sunbeam Auto, Rockman Industries and Satyam Auto Components, that supply a

majority of its components.

Termination of Hero and Honda Joint Venture

In December 2010, the Board of Directors of the Hero Honda Group has decided to terminate

the joint venture between Hero Group of India and Honda of Japan in a phased manner. The

Hero Group of India would buy out the 26% stake of the Honda in JV Hero Honda. Under the

joint venture Hero Group could not sell into international markets and the termination would

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mean that Hero Group can exploit global opportunities now. Since last 25 years the Hero

Group relied on their Japanese partner Honda for R & D for new bike models. So there are

concerns that the Hero Group might not be able to sustain the performance of the Joint

Venture alone.

Motorcycle models

Achiever

Ambition 133, Ambition 135

CBZ, CBZ Star, CBZ Xtreme

CD 100, CD 100 SS, CD Dawn, CD Deluxe, CD Deluxe (Self Start)

Glamour, Glamour F.I

Hunk

Karizma, Karizma R, Karizma ZMR FI

Passion, Passion+, Passion Pro

Pleasure

Splendor, Splendor+, Splendor+ (Limited Edition), Super Splendor, Splendor NXG,

Splendor PRO

LITERATURE REVIEW

India has the largest number of two wheelers in the world with 41.6 million vehicles. India

has a mix of 30 percent automobiles and 70 percent two wheelers in the country. India was

the second largest two wheeler manufacturer in the world starting in the 1950’s with the birth

of Automobile Products of India (API) that manufactured scooters. API manufactured the

Lambrettas but, another company, Bajaj Auto Ltd. surpassed API and remained through the

turn of the century from its association with Piaggio of Italy (manufacturer of Vespa).

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The license raj that existed between the1940s to1980s in India, did not allow foreign

companies to enter the market and imports were tightly controlled. This regulatory maze,

before the economic liberalization, made business easier for local players to have a seller’s

market. Customers in India were forced to wait 12 years to buy a scooter from Bajaj. The

CEO of Bajaj commented that he did not need a marketing department, only a dispatch

department. By the year 1990, Bajaj had a waiting list that was twenty-six times its annual

output for scooters.

The motorcycle segment had the same long wait times with three manufacturers; Royal

Enfield, Ideal Jawa, and Escorts. Royal Enfield made a 350cc Bullet with the only fourstroke

engine at that time and took the higher end of the market but, there was little competition for

their customers. Ideal Jawa and Escorts took the middle and lower end of the market

respectively.

In the mid-1980s, the Indian government regulations changed and permitted foreign

companies to enter the Indian market through minority joint ventures. The two-wheeler

market changed with four Indo-Japanese joint ventures: Hero Honda, TVS Suzuki, Bajaj

Kawasaki and Kinetic Honda. The entry of these foreign companies changed the Indian

market dynamics from the supply side to the demand side. With a larger selection of two-

wheeler’s on the Indian market, consumers started to gain influence over the products they

bought and raised higher customer expectations. The industry produced more models, styling

options, prices, and different fuel efficiencies. The foreign companies new technologies

helped make the products more reliable and with better quality. Indian companies had to

change to keep up with their global counterparts.

Consumer Perception

Consumer perception theory is any attempt to understand how a consumer's perception of a

product or service influences their behaviour. Those who study consumer perception try to

understand why consumers make the decisions they do, and how to influence these decisions.

Usually, consumer perception theory is used by marketers when designing a campaign for a

product or brand. However, some people study consumer perception in order to understand

psychology in a much more general sense.

Perception

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In general psychological terms, perception is our ability to make some kind of sense of reality

from the external sensory stimuli to which we are exposed. Several factors can influence our

perception, causing it to change in certain ways. For example, repeated exposure to one kind

of stimuli can either make us oversensitive or desensitized to it. Additionally, the amount of

attention we focus on something can cause a change in our perception of it.

Branding

A brand, or a brand name, is the attempt to impose some kind of identifying feature on a

product or service so that it is easily recognized by the general public. A brand is oftentimes

associated with an image, a set of expectations or recognizable logo. The goal of a brand is to

set a product or service apart from others of its kind, and influence the consumers to choose

the product over similar products simply because of its associations.

Positioning, Repositioning or Depositioning

Positioning is the process whereby marketers attempt to build a brand. Marketers actively try

to create an image which is both recognizable and appeals to a certain group of people or

target market. Repositioning is the process of altering this image, usually in order to influence

a larger target market and thereby influence the behavior of a greater number of consumers.

Depositioning is the practice of trying to devalue alternative, competing brands in the

perceptions of a shared target market.

Value and Quality

Value refers to the perceptions a consumer has of a product's benefits when weighed against

its cost. Value can be measured both qualitatively--the emotional or psychological pleasure a

consumer derives from a product or service--and quantitatively, in terms of the actual

financial gain it wins them. Quality can be related to value, and may be taken into account

when measuring the value of a product or service. More formally, it refers to the way in

which a product or service relates to its competitors, or else conforms to a set of measurable

standards.

Buyer's remorse

Buyer's remorse is a strong feeling of regret which occurs after a purchase has been made. It

is a specific case of cognitive dissonance, or the psychological state of worry or unease which

comes about when attempting to come to terms with conflicting ideas, perceptions or

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motives. Buyer's remorse usually occurs after a consumer has made a purchase he or she has

come to regret. Generally, it involves the realization that the opportunity of purchasing one

product or service over another in some way outweighs the value of the purchase. In this

regard, it occurs when a consumer's perception of a purchase changes after he or she has

already invested in it.

Customer’s Satisfaction

Concept Identification

As organizations become increasingly customer focused and driven by demand, the need to

gain customer loyalty and retain their loyalty is critical. Customer satisfaction is the most

effective way to achieve customer loyalty. Customer satisfaction and customer loyalty share

many similar traits. Customer value is the customer’s perception of the ratio of benefits to

what he or she gives to obtain those benefits. The customer Value Triad is a framework used

to understand what it is that customers want. The framework consists of three parts:

(1) Perceived product quality,

(2) Value-based pricing, and

(3) Perceived service quality.

Customers are satisfied, when value meets or exceeds expectations. If their expectations of

value are not met, there is no chance of satisfying them. Figuring out what the customers

want, however, is a difficult and complex process. To be able to create and deliver customer

value is important to understand its components. On the most basic level, value from a

customer’s perspective is the ratio of benefits to the risks being taken while buying the

product.

An Insight

According to Harold E Edmondson “ Customer Satisfaction” seems to appear in print more

frequently than any other catch phrase used to describe a new found magic for industrial

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success. Before we proceed in to the study of the dynamics of Customer Satisfaction it is

important to know about, who a customer is and what satisfaction really means.

Who really is a Customer?

The question of defining who your customers are seems fairly easy particularly if you have

segmented your market properly and understand who you are trying to satisfy. However

subtlety that frequently goes undetected by many firms is that is that customer set can be

divided into two parts, the apparent customer and the user. The apparent customer is the

person or group of people who decide what product to buy and basically have control over

the purse strings. The user is a person or group who physically uses the product or is the

direct recipient of a service.

What does satisfaction really mean?

As in defining customer above, defining satisfaction also appears simple. However as with

customer there is a subtlety that needs addressing. Satisfaction by most definitions simply

means meeting the customer’s requirement.

Customer satisfaction is a concept that more and more companies are putting at the heart of

their strategy, but for this to be successful they’re needs to be clarity about, what customer

satisfaction means and what needs to happen to drive improvement. Without this, there is a

risk that customer satisfaction becomes little more than a good intention, with confused

objectives failing to address the real issues for customers, one helpful way to look at the

problem is to rephrase the objectives: set the sights on helping the customers meet their goals.

Customer satisfaction can be defined in many different ways. Finding the right way for a

company depends on understanding your customer and on having a clear vision of the role

that customer satisfaction is to play in the strategy. For example, a focus on customer

satisfaction can work alongside existing segmentations to support revenue generation from

high value customers or it can be a company-wide objective rooted in the brand values. For

the former, it may be sufficient to focus on improving customer service, but for the latter a

broader definition of customer satisfaction is necessary, closer akin to corporate reputation.

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Whatever the strategy for customer satisfaction, it must at least include getting the basics

right. Failing to achieve this can destroy the reputation as well as losing valuable

customers. Every customer, regardless of their economic worth to the business, has the power

to influence – positively or negatively – a company’s reputation. Once the objectives for the

customer satisfaction strategy are defined there are a number of steps we can take to make

sure the focus on customer satisfaction is effective.

RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem. Research

methodology constitutes of research methods, selection criterion of research methods, used in

context of research study and explanation of using of a particular method or technique so that

research results are capable of being evaluated either by researcher himself or by others. Why

a research study has been undertaken, how the research problem has been formulated, why

data have been collected and what particular technique of analyzing data has been used and a

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best of similar other question are usually answered when we talk of Research methodology

concerning a research problem or study.

The area of the study related with informing different people regarding motor bikes in the

region of NORTH-EAST DELHI.

RESEARCH TYPE AND SAMPLE SIZE

Research included gathering both primary and secondary data. Primary data is the first hand

data, which are selected a fresh and thus happen to be original in character. Primary data was

crucial to know various customers and past consumer views about bikes in regards to other

brands. Secondary data are that which has been collected by someone else and which already

have been passed through statistical process. Secondary data has been taken from internet,

newspaper, magazines and company’s websites. Data collection has been done through by

giving structured questionnaire. The research approach was used survey method which is a

widely used method for data collection and best suited for descriptive type of research. The

survey was done on hundred general residents of the selected region.

In this method questionnaire were distributed to the respondents and they were asked to

answer the questions in the questionnaire. The questionnaire were structured non disguised

questionnaire because the question which the questionnaire contained, were arranged in a

specific order besides every question asked were logical for the study, no question can be

termed as irrelevant.

DATA COLLECTION

(a) PRIMARY: Questionnaires filled by local people of various income groups.

(b) SECONDARY: Internet

Size of Data: 100 respondents

Location: NORTH-EAST DELHI.

The following basic tool was used by for analysis:-

Pie Charts

SCOPE

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My project was based on the Comparative Study of Bajaj V/S Hero Honda and data was

taken in the City Delhi only.

LIMITATIONS

1. Research work was carried out in a North-East region of Delhi only; the finding may not

be applicable to the other parts of the country because of social and cultural differences.

2. The sample was collected using convenience-sampling techniques. As such result may not

give an exact representation of the population.

3. Shortage of time is also reason for incomprehensiveness.

4. The views of the people are biased therefore it doesn’t reflect true picture.

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DATA ANALYSIS AND FINDINGS

Q1. Which bike do you have?

Bike No. of respondents

Hero Honda 45

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Bajaj 37

Any Other 18

fig.: No of respondents according to their bike

Q2. Which model do you have?

Hero Honda No. of respondents Bajaj No. of respondents

Splendor 20 CT 100 6

Passion 12 Discover 12

Karizma 7 Pulsar 11

Any Other 6 Any other 8

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Hero Honda

Bajaj

Any other

Hero Honda

Bajaj

Q3. In which family Income level do you fall?

Income Level No. of respondents

100000-200000 22

200000-300000 45

300000-400000 23

Above 400000 10

Fig.: People according to their income level

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Model Name0

2

4

6

8

10

12

14

CT 100DiscoverPulsarAny other

Model Name0

5

10

15

20

25

SplendorPassionKarizmaAny other

Q4. For how long do you own a bike?

Year No. of respondents

0-1 11

1-2 29

2-3 26

Above 3 34

No. of Years0

5

10

15

20

25

30

35

40

0-1 Year1-2 Year2-3 YearAbove 3 Year

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Q5. For what purpose do you use your Motor Bike?

Purpose Hero Honda Bajaj

Office 9 4

Personal 12 14

Joy 18 16

Other 6 3

Office Personal Joy Other0

2

4

6

8

10

12

14

16

18

20

Hero HondaBajaj

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Q6. How do you come to know about this Motor Bike?

Source Hero Honda Bajaj

News Paper 4 2

Television 22 16

Magazine 2 1

Friends & Relative 17 18

Hero Honda Bajaj0

5

10

15

20

25

News PaperTelevisionMagazinefriends & Relative

33

Q7. Does advertisement influence your decision in choosing a Motor Bike?Response No. of respondents

Yes 87No 5

Can’t say 8

Yes No

Can't say

34

Q8. Do you have full knowledge about Bikes before buying?

Response Hero Honda BajajYes 24 22No 21 15

Hero Honda Bajaj0

5

10

15

20

25

30

YesNo

35

Q9) Which Factor below Influence your decision?

Factor Hero Honda BajajPrice 71.11% 78.38%

Mileage 80% 64.86%Quality 66.67% 48.65%

Resale Value 40% 27%Status Symbol 10% 8%

Hero Honda Bajaj0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

Price

Mileage

Quality

Resale Value

Status Symbol

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Q10. How would you rate the following factors of Bikes with respect to

different company?

Factor Hero Honda Ratings Bajaj Ratings

Mileage 74% 72%

Price 68% 65%

Pick-up 70% 80%

Maintenance 58% 62%

Look & Shape 85% 80%

Brand Image 53% 55%

Hero Honda Bajaj0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Mileage

Price

Pick-up

Maintenance

Look & Shape

Brand Image

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Q11. If new Bike with good features comes in, then would you like to

change your bike?

Response Hero Honda Bajaj

Yes 18 20

No 16 14

Can’t say 11 3

Yes No Can't say0

5

10

15

20

25

Hero Honda

Bajaj

CONCLUSION

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1. 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.

2. Hero Honda is considered to be most fuel-efficient bike on Indian roads.

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

4. While buying a motorcycle, economy is the main consideration in form of

maintenance cost, fuel efficiency.

5. Majority of the respondent had bought their motorcycle more than 3 years.

RECOMMENDATION

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1. Bajaj should introduce some more models having more engine power.

2. Hero Honda should think about fuel efficiency in case of upper segment bikes.

3. More service centers should be opened.

4. Maintenance cost and the availability of the spare parts should also be given due

importance.

5. They also introduce some good finance/discount schemes for students.

6. The price should be economic.

BIBLIOGRAPHY

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1. www.herohonda.com

2. www.google.com

3. www.bajaj.com

4. www.twowheeler.com

5. www.extrememachines.com

ANNEXURE

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NAME: - ………………………………………………

CONTACT NO. ……………………………………….

Age:- 15-20 20-25

25-30 Above 30

Occupation:- Businessman Employee

Student Other

Q1. Which Bike do you have?

Hero Honda Bajaj Any Other

Q2. Which Model do you have?

Hero Honda:- Splendor Passion

Karizma Other

Bajaj:- CT 100 Discover

Pulsar Other

Q3. In which Family Income do you Fall?

100000-200000 200000-300000

300000-400000 Above 400000

Q4. For how long do you own a Bike?

0-1 year 1-2 year

2-3 year Above 3 years

Q5. For what purpose do you use your Motor Bike?

Office Purpose Personal Purpose

Joy Purpose Other

Q6. How do you come to know about this Motor Bike?

Newspaper Television

Magazines Friends/Relatives

Q7. Does advertisement influence your decision in choosing a Motor Bike?

Yes No Can’t say

Q8. Do you have full knowledge about Bikes before buying?

Yes No

Q9. Which factor below influence your decision?

Price Mileage Quality

Resale Value Status Symbol

Q10. How would you rate the following factors of bikes with respect to different companies?

Hero Honda Bajaj

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Mileage

Price

Pick up

Maintenance

Look/Shape

Brand Image

Q11. In new bike with good feature comes in, then would you like to change your bikes?

Yes No Can’t say

Q12. Any Suggestions for Company

……………………………………………………………………………………………

……………………………………………………………………………………………

……………………………………………………………………………………………

………

Date: (Signature)

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