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Transcript of Hero Motor Corp. Minor Project
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MINOR PROJECT REPORT
ON
HERO MOTO CORP
Submitted in Partial Fulfillment of the Requirements of
Bachelor of Business Administration Of
Guru Gobind Singh Indraprastha University
Submitted by Submitted to:
MAHENDER SINGH MEENA MRS. ANU BHARDWAJ
BBA 3RD SEM ASSISTANT PROFESSOR
09714201713
Jagannath International Management School
Vasant Kunj, New Delhi – 70
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CERTIFICATE
This is to certify that this project ―HERO MOTO CORP” is the original work of MAHENDER
SINGH MEENA (09714201713) student of Jagannath International Management School, Vasant
Kunj (affiliated GGIPU ) who has completed this project under my guidance.
This project has not been submitted as a part of any other degree or course to this or any other
university.
Mrs. ANU BHARDWAJ
Assistant professor
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ACKNOWLEDGEMENT
I would like thanks people who helped me out on this project under their supervision this project
get prepared.
This project focuses on understanding and analyzing the journey of “HERO MOTO CORP”
Company. This study is based on the timeline of HERO COMPANY that how company start
since from their establishment and till now hero make their position to the top in the market.
I would like to extend my deepest thanks to my college professor, Mrs. Anu Bhardwaj, who
acted as a constant guide and mentor in the process of drafting of this project and who constantly
supported me with her innumerable suggestions and priceless teachings.
Last but not the least, I would also extend a heartfelt thanks to my family and well-wishers
without whom this project would have been a distant reality.
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TABLE OF CONTENTS
s.no Topic Page
1 Chapter 1: Introduction
1.1. Overview of Industry as whole
1.2. Profile of the Organization
1.3 targeting, positioning, segmentation
1
2 Chapter 2: Research methodology
2.1 Overview of the Project
2.2 Objective of Studies
2.3 Data Sources
3 Chapter 3: Analysis
4 Chapter 4: Findings/ Observations
5 Chapter 5: Conclusion
6 Chapter 6: Bibliography
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Chapter1: Introduction
During the 80s, Hero Moto Corp (previously 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 Moto Corp (previously Hero Honda) sold millions of bikes purely on the
commitment of increased mileage. In today world customer is the king irrespective of whatever
the business may be ,wherever the operations may be .A good business organization is known
by its strong customer loyalty, which turns to become a unified family.
The project assigned to me by the company was a market study on 100cc bikes among the
dealers and customers with special reference to Hero Moto Corp (previously Hero Honda) dealer
and loyalty of customers towards the bike. The objective of the study was to find out the dealers
and customers opinion about the 100cc bikes with special reference to Hero Moto Corp
(previously Hero Honda) dealer to understand how market fluctuations affect their strategicdecision. The research methodology was descriptive in nature encompassing a sample of
200customers for in-depth analysis It was observed that 80%of the respondents are interested to
purchase Hero Moto Corp (previously Hero Honda) motor vehicle .are in the age group of 18-35.
A large part of respondents with majority of 60% are satisfied with the availability of spare part
and remaining 40% says no. It was observed that the 92% resplendence are either highly satisfied
are just satisfied and remaining 8% are dissatisfied. Different models Hero Moto Corp
(previously Hero Honda) vehicles can be introduced for ladies, with better comfort, speed and
power, so that it can cater to the changing tastes of women.
More service station should be established in every part of the city, so those customers have an
easy accessibility. With a strong sales and service network of 650 Authorized dealership, 1500
authorized service centers and over 1000 certified service points, Hero Moto Corp (previously
Hero Honda) is growing from strength to strength. Hero Moto Corp (previously Hero Honda)
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motor should also start producing other models and should add a different style and variety to
their product line. This will surely attract more customers. This will help to increase the existing
goodwill and position in the market. The experience gained during the analysis and drawinginferences was an exiting and informative exercise under the guidance of unit head.
HISTORYABOUT THE CHAIRMAN
Brijmohan Lall Munjal – Seeding a Dream
"Don't dream if you can't fulfill your dreams'' Brijmohan Lall Munjal is often fond of saying. The
founder and patriarch of the $ 2.8 billion Hero Group is your classic first generation
entrepreneur. He is a man who started small, dreamt big and used a combination of grit and
perseverance to create one of the country's largest corporate groups and the World's No.1 Two
Wheeler Company. Instinctive from a young age, Brijmohan Lall made a rather unusual start in
life. Around the time when the freedom movement in India was taking shape in the late 1920s,
he walked into a newly opened Gurukul (Indian heritage school) near his home in Kamalia (now
in Pakistan). He was only six years old then. Thus began an extraordinary tale of courage and
perseverance. Brijmohan began his business story after partition in 1947, when he and his
brothers relocated to Ludhiana. The family set up a company that provided poor people with
basic transport (cycles). Three decades later, as India evolved, he added a second crucial chapter
which visualized affordable and technologically superior transport to millions of middle class
Indians. The rest is history.
Building Relationships When Brijmohan and his brothers started out, there was no concept of
organized dealer networks. Companies just produced, and most dealers functioned like traders.
Brijmohan changed the rules of the business by trusting his gut instincts; introducing business
norms that were ahead of their time, and by investing in strategic relationships. Brijmohan built a
series of bonds and networks with hundreds of family members, vendors, dealers and employees.
Much like the Japanese keiretsu system, these networks are now the glue that holds the Hero
Group together. "Thanks to the relationships that we have nurtured so passionately in the Hero
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Family, the younger generations of some of our bicycle dealers have become dealers of Hero
Moto Corp (previously Hero Honda). These relationships have survived through generations -
through bad times and good times'' the patriarch now reminiscences. Besides bonding with hisvendors and dealers, Brijmohan has been personally responsible for kindling a spirit of
entrepreneurship amongst his employees, and today, 40 of his former employees are successful
entrepreneurs.
Staying Ahead Though not technically qualified in the conventional sense, few of his
contemporaries have understood the dynamics of technology better than Brijmohan Lall has. He
could always visualize the applicability of technology before others could. For example, in the
1980s, when all two-wheeler companies in India opted for two-stroke engine technology,Brijmohan preferred a four-stoke engine - a technology that dramatically increased fuel
efficiency and reduced maintenance costs. This technology was one of the biggest reasons for
Hero Moto Corp (previously Hero Honda)'s stupendous success. Time and again, Brijmohan
managed to steal a march over his industry peers. For example, when Honda Motors of Japan
was looking for a collaborator in the 1980s, the Hero Group was not high up the pecking order
initially as there were other more eligible and established suitors. Yet it didn't take long for the
astute Japanese to realize that the Hero Group and Honda had much more in common than earlier
perceived; there a sharp focus on financial and raw material management, and employee turnover
was low. Honda officials were also amazed to find that the Munjals were already practicing
"Just-in-time-inventory" at the time (JIT). It turned out that Brijmohan Lall's aspiration to
provide cheap transportation to India's poor by default ensured lean and costeffective operations.
This in turn increased vendor efficiency and led to near-zero inventories.
A Corporate Citizen A frugal upbringing and a value system modeled on the famous Gurukul
system - which stresses the sanctity of the teacher-pupil relationship - imbibed in Brijmohan a
strong sense of social commitment and responsibility. There is a special place in his heart for
Ludhiana, the city where he took roots. Today, Ludhiana is a modern, bustling city, but
Brijmohan has played no mean role in its evolution. Several schools and educational institutions
in Ludhiana owe their existence to the Munjal family. The Ludhiana Stock Exchange owes its
existence to Brijmohan's vision as does the Ludhiana Flying Club. He's also set up the not-
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forprofit Dayanand Medical College and Hospital-an institute now rated as one of the best
medical colleges in India, in terms of infrastructure, quality of staff and alumni profile. In and
around Dharuhera, near the first Hero Moto Corp (previously Hero Honda) plant, Brijmohan andhis family have left their stamp of philanthropy. The Raman Kant Munjal Foundation - which
Brijmohan set up in memory of his eldest son, today runs a higher secondary school and a very
modern and well-equipped 100-bed hospital at Dharuhera. The group has also adopted numerous
villages and provides education, vocational training, drinking water, roads, streetlights and
sewerage.
The Board of Directors of The Hero Moto Corp (previously Hero Honda) Group
Comprises of : -
Mr. Brijmohan Lall Munjal Chairman
Mr. Pawan Munjal Managing Director
Mr. Akio Kazausa Joint Managing Director
Mr. Kazumi Yanagida Director
Mr. Satyanand Munjal Director
Mr. Om Prakash Munjal Director
Mr. M P Wadhawan Director
Mr. S P Virmani Director
Mr. O P Gupta Director
Mr. M. Sudo Director
Mr. S Toshida Director
Mr. N N Vohara Director
Mr. Pradeep Dinodia Director
Gen. ( Retd.) V P Malik Director
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HERO MOTO CORP (PREVIOUSLY HERO HONDA) MISSION
Hero Moto Corp (previously Hero Honda)’s mission is to strive for synergy between technology,
systems and human resources, to produce products and services that meet the quality,
performance and price aspirations of its customers. At the same time maintain the highest
standards of ethics and social responsibilities. This mission is what drives Hero Moto Corp
(previously Hero Honda) to new heights in excellence and helps the organization forge a unique
and mutually beneficial relationship with all its stakeholders.
VISION
Hero Moto Corp (previously Hero Honda) now the leader in the two wheeler industry. Leaders
are not born, they evolve over time. It all started on the auspicious. ―Baisakhi Day‖ the 13th of
April 1984, when the Hero Moto Corp (previously Hero Honda) Motor Company joined hands.
On its journey to take on the No. 1 morale, Hero Moto Corp (previously Hero Honda) created
some prominent milestones….. This leadership has been achieved only because of its philosophy
to excel in all areas. In fact, passion to excel is a credo of the entire Hero Moto Corp (previously
Hero Honda) family and is a way of life in Hero Moto Corp (previously Hero Honda). The
changing Scenario of increasing competition and the entry of new brands has made the credo
even more relevant. It serves as a constant reminder to ensure excellence in providing service to
the customer. They are providing outstanding customer service. It is in keeping with Hero Moto
Corp (previously Hero Honda)’s own passionate commitment to provide ultimate customer
satisfaction. Today, they consistently meet and exceed all requirement on quality, cost and
delivery.
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OBJECTIVES
Hero Moto Corp (previously Hero Honda)’s mission is to strive for synergy between technology,
systems and human resources, to produce products and services that meet the quality,
performance and price aspirations of its customers. At the same time maintain the highest
standards of ethics and social responsibilities. This mission is what drives Hero Moto Corp
(previously Hero Honda) to new heights in excellence and helps the organization forge a unique
and mutually beneficial relationship with all its stake holders.
ACHIEVEMENTS AWARDS AND ACCOLADES
Year Awards & Recognitions 2009
ET Awards for Corporate Excellence - Hero Moto Corp (previously Hero Honda) is the winner
of the ―Company of the Year" award for 2008 - 09. NDTV Profit Business Leadership Award
2008 - Hero Moto Corp (previously Hero Honda) Wins the Coveted "NDTV Profit Business
Leadership Award 2008" Top Gear Design Awards 2008 - Hunk Bike of the Year Award NDTV
Profit Car India & Bike India Awards - NDTV ―Viewers’ Choice Award‖ to Hunk in Bike
category India Times Mindscape and Savile Row ( A Forbes Group Venture ) Loyalty Awards -
―Customer and Brand Loyalty Award‖ in Automobile (two-wheeler) sector Asian RetailCongress Award for Retail Excellence (Strategies and Solutions of business innovation and
transformation) - Best Customer Loyalty Program in Automobile category NDTV Profit Car
India & Bike India Awards - Bike Manufacturer of the year Overdrive Magazine - Bike
Manufacturer of the year TNS Voice of the Customer Awards:
2008
No.1 executive motorcycle Splendor NXG No.1 standard motorcycle CD Deluxe No. premium
motorcycle CBZ Xtreme
2007
The NDTV Profit Car India & Bike India Awards 2007 in the following category:
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Overall "Bike of the Year" - CBZ X-treme "Bike of the Year" - CBZ X-treme (up to 150 cc
category) "Bike Technology of the Year" - Glamour PGM FI
"Auto Tech of the Year" - Glamour PGM FI by Overdrive Magazine. "Bike of the Year" - CBZ
X-treme by Overdrive Magazine.
Ranked CBZ X-treme "Bike of the Year" - by B S Motoring Magazine ―Most Trusted Company‖
, by TNS Voice of the Customer Awards 2006. CD Deluxe rated as "No 1 standard motorcycle"
by TNS Voice of the Customer Awards 2006. 2006 Adjudged 7th Top Indian Company by
Wallstreet Journal Asia (Top Indian Two Wheeler Company). One of the 8 Indian companies to
enter the Forbes top 200 list of world’s most reputed companies. No. 1 in automobile industry by
TNS Corporate Social Responsibility Award.
Best in its class awards for each category by TNS Total Customer Satisfaction Awards 2006:
Splendor Plus (Executive) CD Deluxe (Entry) Pleasure (Gearless Scooters)
Splendor & Passion - Top two models in two wheeler category by ET Brand Equity Survey
2006. Adjudged 7th Top Indian Company by Wallstreet Journal Asia (Top Indian Two Wheeler
Company). Top Indian company in the Automobile - Two Wheeler sector by Dun & Bradstreet -
American Express Corporate Awards 2006. Hero Moto Corp (previously Hero Honda) Splendor
rated as India's most preferred two-wheeler brand at the Awaaz Consumer Awards 2006.
Certificate of Export Excellence for outstanding export performance during 2003-04 for two-
wheeler & three- wheelers - Complete (Non SSI) by Engineering Export Promotion Council.The
NDTV Profit Car India & Bike India Awards 2006 in the following category:
Bike Maker of the Year Bike of the Year - Achiever Bike of the Year - Achiever (up to 150 cc
category) Bike of the Year - Glamour (up to 125 cc category) NDTV Viewers' Choice Award to
Glamour in the bike category
2005
Awaaz Consumer Awards 2005 - India's most preferred two-wheeler brand by CNBC in the
'Automobiles' category. Bike Maker of the Year Award by Overdrive Magazine. ICWAI
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National Award for Excellence (Second) in Cost Management 2004 in the private sector
category by ICWAI. 10th Motilal Oswal Wealth Creator Award for as the most consistent wealth
creator for the period 1991-2005.
2004
Winner of the Review 200 - Asia's Leading Companies Award (3rd Rank amongst the top 10
Indian companies). GVC Level 1 (Highest Rating) by CRISIL for corporate Governance.
Adjudged as the Best Value Creator - Large Size Companies 2003-04 by The Outlook Money.
Corporate Excellence Award 2004 by Indian Institute of Materials Management. Adjudged as
the Organization with Innovative HR Practices by HT Power Jobs for HR Excellence. ICSI
National Award for Excellence in Corporate Governance 2004 by The Institute of Company
Secretaries of India.
2003
Winner of the Review 200 - Asia 's Leading Companies Award (3rd Rank amongst the top 10
Indian companies). Most Respected Company in Automobile Sector by Business World. Bike
Maker of the Year by Overdrive Magazine.
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COMPANY PROFILE
The Hero Moto Corp (previously Hero Honda) story began with a simple vision – the vision of a
mobile and an empowered India, powered by Hero Moto Corp (previously Hero Honda). This
vision was driven by Hero Moto Corp (previously Hero Honda)'s commitment to customer,
quality and excellence, and while doing so, maintain the highest standards of ethics and societal
responsibilities. Twenty five years and 25 million two wheelers later, Hero Moto Corp
(previously Hero Honda) is closer to fulfilling this dream. This vision is the driving force behind
everything that we do at Hero Moto Corp (previously Hero Honda). We understood that the
fastest way to turn that dream into a reality is by remaining focused on that vision. There were
many unknowns but we kept faith, and today, Hero Moto Corp (previously Hero Honda) has
been the largest two wheeler company in the world for eight consecutive years. Our growth has
kept compounding. The company crossed the ten million unit milestone over a 19-year span. In
the new millennium, Hero Moto Corp (previously Hero Honda) has scaled this to 15 million
units in just five years! In fact, during the year in review, Hero Moto Corp (previously Hero
Honda) sold more two wheelers than the second, third and fourth placed two wheeler company
put together. With Hero Moto Corp (previously Hero Honda), the domestic two wheeler market
was able to show positive growth during the year in review. Without Hero Moto Corp
(previously Hero Honda), the domestic market would have actually shrunk. Over the course of
two and a half decades, and three successive joint venture agreements later, both partners have
fine-tuned and perfected their roles as joint venture partners. What the two partners did was
something quite basic. They simply stuck to their respective strengths. As one of the world's
technology leaders in the automotive sector, Honda has been able to consistently provide
technical knowhow, design specifications and R&D innovations. This has led to the development
of world class, value - for- money motorcycles and scooters for the Indian market. On its part,
the Hero Group has taken on the singular and onerous responsibility of creating world-class
manufacturing facilities with robust processes, building the supply chain, setting up an extensive
distribution networks and providing insights into the mind of the Indian customer. Since both
partners continue to focus on their respective strengths, they have been able to complement each
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hundred dealerships and SSPs. In terms of sheer numbers, the network has grown by 16% during
the year 2008-09. We would endeavor to increase our reach to every corner of this country. Plans
for the future In the previous year, the domestic two-wheeler industry entered a period of de-growth. However, this was arrested in 2008-09, largely on the back of Hero Moto Corp
(previously Hero Honda)'s performance. After the blip of last year, the two-wheeler industry
went back to a growth phase, largely driven by Hero Moto Corp (previously Hero Honda) and
exports. The industry clocked total volumes of 8.5 million during the year in review, a growth of
5 per cent compared to a fall of 5 per cent in the previous year. The pace of growth was lower in
the domestic market, where the industry clocked sales of 7.43 million, a rise of only 2.60 per
cent. This, however, was a significant improvement over previous year when the industry had
shrunk by 8 per cent. Motorcycles continue to constitute the largest chunk of the two wheeler
industry, and during the year in review, accounted for four fifth of sales. Interestingly, for the
second year in succession, scooters increased their share in the two-wheeler pie from 14 per cent
to 16 per cent. This is clearly a trend reversal from the last 10 years, where the share of scooters
in the two-wheeler pie had been shrinking. Changing lifestyles among women, and the
introduction of feature-rich, high-quality scooters possibly has much to do with the revival in
demand
The entry segment – made up of basic 100 cc bikes -Had started slowing two years ago, and
during the year in review, sales in this segment were down by more than 15 per cent. This could
be attributed to the fact that deluxe segment bikes have become affordable on account of a 4 per
cent excise cut, 1 per cent reduction in CST and the special package of reduction in excise duty
in December, which most manufacturers passed on to the consumers. The deluxe segment-made
up of value for money and feature-rich bikes in the 100-125 cc category-grew by 15.2 per cent.
The 125-250 cc category-grew at 8.8 per cent. The pace of growth has fallen from last year's
levels. There is no doubt that the higher interest rates have brought down growth. Nevertheless,
this segment was still able to clock a growth rate in high single digits mainly because of the
excitement caused by a slew of new models that came into this segment during the year. The
bigger story, of course, is that buyers in small-town India and rural India, as well as employees
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of the state and Central government, were relatively less affected by the slowdown, and this
benefitted the two wheeler industry.
The legend of Hero Moto Corp (previously Hero Honda)
What started out as a Joint Venture between Hero Group, the world's largest bicycle
manufacturers and the Honda Motor Company of Japan, has today become the World's single
largest two wheeler Company. Coming into existence on January 19, 1984, Hero Moto Corp
(previously Hero Honda) Motors Limited gave India nothing less than a revolution on two-
wheels, made even more famous by the 'Fill it - Shut it - Forget it ' campaign. Driven by the trust
of over 5 million customers, the Hero Moto Corp (previously Hero Honda) product range today
commands a market share of 48% making it a veritable giant in the industry. Add to thattechnological excellence, an expansive dealer network, and reliable after sales service, and you
have one of the most customer- friendly companies.
Customer satisfaction, a high quality product, the strength of Honda technology and the Hero
group's dynamism have helped HHML scale new frontiers and exceed limits. In the words of
Mr. Brijmohan Lall Munjal, the Chairman and Managing Director, "We will continue to make
every effort required for the development of the motorcycle industry, through new product
development, technological innovation, and investment in equipment and facilities and through
and through efficient management."
History Of Company
1984
The Company was Incorporated on 19th January, at New Delhi. The Company Manufacture
motor cycles up to 100 cc capacity. The Company was promoted by Hero Cycles (P) Ltd.
(HCPL).
The Company entered into a technical-cum-financial collaboration agreement with Honda Motor
Co. Ltd., Japan (HML). As per this collaboration agreement, HML was to furnish complete
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technical information and know-how and trade secrets and other relevant data.
Hero Moto Corp (previously Hero Honda) CD-100 is the first four stroke motorcycle to be
introduced in India in 100cc range. Its most attractive features are fuel efficiency and its lightweight. CD-100 will be equipped with electronic ignition system, illuminated speedometer, 4
speed gear box, neutral and flasher indicators, etc. 15 No. of equity shares subscribed for by the
promoters, etc. In November, 119,99,985 No. of equity shares issued at par of which 71,99,985
shares reserved for allotment as under:
(i) 31,19,998 shares to Hero Cycles (P) Ltd., Hero Investments (P) Ltd., and Bahadur
Chand Investments (P) Ltd.
(ii) 31,20,000 shares to Honda Motor Co. Ltd., Japan and
(iii)
9,59,987 shares to friends and association of promoters. Out of the balance 48,00,000
shares, 2,40,000 shares were reserved for subscription by the employees of the
Company and 96,000 shares by business associates. The remaining 44,64,000 shares
were offered at par for public subscription during November.
1985
The Company embarked on its 2nd phase of expansion of increasing its installed capacity from
1,20,000 to 1,50,000 vehicles per annum by the addition of several critical aliminium and steel
components.
1986
36,00,000 rights equity shares issued at par in prop. 3:10.
1987
The Company offered 6,00,000 - 15% secured redeemable non-convertible debentures of Rs 100
each for cash at par on rights basis in the proportion 1 debenture: 18 equity shares. Another
3,00,000 - 15% debentures were allotted to retain oversubscription. Thedebentures were to be
redeemed at a premium of Rs 5 per debenture on the expiry of the 7th year from the date of
allotment of the debentures
3,75,000 rights equity shares issued at par in prop.3:10
1989.
The Company introduced a new model "Sleek" during July.850 No. of equity shares forfeited.
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1990
The Company was planning to launch a new model motor cycle-CD 100 SS sutiable to
semi-rural conditions. In the domestic market the Company was reported to have a market shareof 46%.- 850 forfeited shares reissued.
1994
The Company proposed to expand the capacity of existing plant at Dharuhera to 2,40,000 nos.
per annum. Another plant with an installed capacity of 1,50,000 nos. per annum at Gurgaon
Industrial Estate was being set up.
The Company issued 39,79,500 bonus shares to the existing shareholders in the ratio of 1:4. The
Company also issued 28,557 number of fractional coupons representing 14,250 shares against
which shares shall be allotted to presenting the same for consolidation and allotment. The
Company's production and turnover increased to 1,83,490 motorcycles and Rs.483.85 crores
respectively due to growth in demand for two wheelers and declining inflation.
1995
14,420 bonus shares issued by way of consolidation of fractional coupons. - A new Technical
Collaboration Agreement has been signed with Honda Motor Co. Ltd., Japan for the period up to
the year 2004 which includes technology related to models of higher Engine displacement. The
Company allotted 39,79,500 No. of Equity Shares of Rs. 10/- each as Bonus shares on 7th
February, by way of capitalization of General Reserves.
The Company had issued 28557 No. of Fractional Coupons representing 14.250 shares against
which the Shares shall be alloted on presenting the same for consolidation and allotment.
1997
Hero Moto Corp (previously Hero Honda) Motors has launched its newest motorcycle, the
Street, a 100 cc bike designed for use in congested urban traffic conditions. Hero Moto Corp
(previously Hero Honda) Motors Ltd (HHML) has set up a new motorcycle plant in Gurgaon,
near Delhi for the manufacture of the Honda Super Cub 100 cc step thro bike. Hero Moto Corp
(previously Hero Honda) has set up a new state-of-the-art plant, heralding a new phase of
development of motorcycle industry in India, to provide the most modern and technologically
advanced production facilities.
Hero Motors of the Rs.1,600 crore Hero group, as part of its globalisation plan, has set up a plant
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in Brazil for manufacturing hero winner scooters.
A new step thru model `Street-100' with unique feature was launched on 24th January.
1998The company proposes to increase the share capital to 5 crore equity shares of Rs. 10 each, 4
lakh cumulative redeemable preference shares of Rs. 100 each and 4 lakh cumulative convertible
preference shares of Rs. 100 each with power to increase or reduce it from time to time. The
company further proposes to capitalise Rs. 19,96,87,500 from general reserve to share capital
through issue and allotment of bonus shares. Altogether, 1,99,68,750 fully paid bonus shares will
be allotted and distributed to members of the company holding equity shares of the company in
the proportion of one bonus share for every fully paid equity shares of Rs.10 each. Motorcycles
major Hero Moto Corp (previously Hero Honda) is considering entry into scooters in
collaboration with partners, Honda Motors, after the Japanese company decided to walk out of
Kinetic Honda, their scooter venture with the Firodias of Pune. Honda Motors recently pulled out
of its joint venture with the Firodias in which it held a 51 per cent equity stake.
Honda Motor Company Ltd of Japan (Honda) and Kinetic Honda Motor Ltd (KHML) have
signed a five-year licence and technical assistance agreement under which KHML will continue
to receive the technical knowhow, critical vehicle parts and access to Honda's markets even after
the sale of Honda stake in KHML to Kinetic Engineering Ltd (KEL).
- The Company changed the paradigm in two-wheelers by launching the most powerful
and fast bike- CBZ with a unique feature of Transient Power Fuel Control (TPEC) system.
23,962,500 bonus shares issued in prop. 1:1.
1999
Hero Moto Corp (previously Hero Honda) Motors Ltd (HHML) and 20th Century Finance
Corporation Ltd have signed a Memorandum of Understanding (MoU) for financing of Hero
Moto Corp (previously Hero Honda) motorcycles.
The company, a joint venture between Honda Motor Company of Japan and Hero group of India
to produce four-stroke motorcycles, also aims to increase its share by 1 per cent to 38.6 per cent
during the current fiscal. Leading two-wheelers manufacturer Hero Motors has formed a joint
venture with Briggs Stratton of US to develop and manufacture four-stroke engines for mopeds
and scooters in India, a top company. Honda Motor Company of Japan has decided to re-enter
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the scooter market in India as also foray into three-wheelers in a joint initiative with its existing
joint venture company Hero Moto Corp (previously Hero Honda) Motors Ltd.
2000Hero Moto Corp (previously Hero Honda) Motors Ltd. and Tata Finance Ltd. have signed a
national tie-up agreement. The Company is the largest manufacturer of motorcycles in the
country. The Company will relaunch its stepthru Stree Smart on Baisakhi 13th April. Hero Moto
Corp (previously Hero Honda) Motors Ltd (HHML), has launched an upgraded version of the
existing step-through motorcycle - the Hero Moto Corp (previously Hero Honda) Street. The
Company was ranked as the 9th Highest Value Creator among 12 industry groups within the
Bombay Stock Exchange top 100 companies over a five year period (1994-99).
2001
Hero Moto Corp (previously Hero Honda) Motors Ltd. has launched a new 100cc motorcycle
named `Passion'. The Company has secured shareholders' approval for splitting one equity share
of Rs 10 each into five equity shares of Rs 2 each in the ratio of 1:5.
Hero Moto Corp (previously Hero Honda) Motors Ltd. has become the largest seller of
motorcycles amongst all Honda companies and ventures in the world by selling one million
motorcycles during the current financial year. Credit rating Agency Crisil has reaffirmed
outstanding `AAA' rating assigned to the proposed Rs 15 crore non-convertible debenture issue,
Rs 16 crore commercial paper programme and fixed deposit programme of Hero Moto Corp
(previously Hero Honda) Motors.
Promoter-Chairman of the country's largest motorcycle manufacturing company, Hero Moto
Corp (previously Hero Honda) Ltd, Brijmohan Lall Munjal has bagged the prestigious Ernst &
Young Entrepreneur of the Year (EOY) award here on September 27.
CLASSIFICATION OF THE INDUSTRY
The two-wheeler segment can be categorized into the scooter, mopeds, and motorcycles.
Motorcycles: this segment has shown the best performance in the recent years. The market
leaders in this section are Bajaj Auto. TVS, Mahindra, Hero Moto Corp (previously Hero
Honda). [The splendor is the most popular segment among motorcycles.]
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Two Wheeler Industry
It wasn’t an easy year for the two wheeler industry. Rising interest rates and the economic
slowdown resulted in delayed consumer decision making and a rise in loan defaults. Over the
course of the year, banks withdrew financing facilities from satellite towns. The share of
financing, which had increased rapidly to 50-60 per cent of the total retail sales by early 2007,
has now come down to below 30 per This came as a major setback for the two-wheeler industry.
Ongoing government investments very clearly emphasis inclusive growth through improved
connectivity, job-creation and improving quality of life. The rural road outlay has been upped by
close to 60 per cent, the budget for the Urban Renewal Mission has been hiked by 87 per cent,
and fund allocation to the ongoing National Highways program has been upped by 23 per cent.Importantly, India has added fresh impetus to its flagship job creation program for rural India:
the National Rural Employment Guarantee Scheme. During 2008-09, this scheme, which
provides 100 guaranteed days of work a day for the country’s rural poor, provided employment
opportunities to more than 44 million households last year; a year ago, 33 million households
were covered. During the year, there have been important developments in two wheeler industry.
The competition has strengthened though there are hardly any new entrants into the industry.
There is an increasing emphasis on price and this has led to cost cutting efforts all across cent.
the industry, thereby, making the customer an ultimate beneficiary. The trend also saw
introduction of new motorcycles with capacity ranging from 100 to 250cc bikes. We anticipate
that many more new models will be launched during the year and provide customers plenty of
choice at competitive prices. Businesses cannot consistently grow at 25-30 per cent. Each
business has a tendency to taper and plateau after attaining a particular size. An annual growth
rate of 10-12 per cent over a period of time is extremely healthy. The TCS study rankings are
conducted at the motorcycle segment level to provide comparisons among similar groups of
motorcycles. Motorcycles ranking highest in their respective segments for TCS are: Hero Moto
Corp (previously Hero Honda) splendor plus (best standard motorcycle segment); Bajaj pulser
(best executive motorcycle segment); Hero Moto Corp (previously Hero Honda) karizma (best
premium motorcycle segment); and Royal Enfield Bullet Electra (best cruiser motorcycle
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segment). "The relatively low score for the executive segment indicates that most manufacturers
have fallen short of meeting the high expectations of these buyers,".
Production, sales growth of the industry
The two-wheeler companies have been operating at high capacities due to high growth rates
between 2009 and 2008. The growth is expected to lead to increase in the capacities from present
52 lakh units to 65 lakhs per annum in the year 2009-10, whereas the actual production estimates
by that period at an estimated growth rate of 18% is only 60 lakhs. Charts showing two-wheeler
industry growth rates Demand
In India the two-wheeler provide an easy and popular mode of personal transport for the middleclasses. With public transportation system being inadequate and ineffective the demand for the
two wheeler is likely to rise. The two-wheeler sales are expected to touch the 5 million mark by
the end of the decade as against the annual sales of 35,49,271 in 2008-09. Technology With
liberalization and the increasing competition. The two- wheeler industry has witnessed
technological changes. The four- stroke engine is being introduced in place of the traditional
populations and fuel inefficient two stroke engine. The smaller capacity engine with the
electronic fuel injection is also being used. Bajaj auto is now feeling the need to increase its
technological competence. Wit the competition cashing in on the technological competence for
their collaborators. Emphasizes being laid on lighter and fuel- efficient vehicles. A class of
vehicle having fuel efficiency of a moped and sleekness and style of the motorcycles called
scooter is growing. The vehicles offer a fuel efficiency of 60-65 km p/h. They enter into new
segment, Bajaj Auto has come out with TVS with Scooty pep and Hero Moto Corp (previously
Hero Honda) has come out with a Pleasure and upgraded version of sleek. Government policy
The excise duty on two-wheeler , which has previous 10 percent to 30 percent according to the
engine capacity, was rationalized is only two categories size. 15 percent for 75 cc engine
capacity and 25 percent for above 75 cc engine capacity the excise duty structure has been left
untouched since the 1993-94 budget.
The Indian two-wheeler industry is experiencing a major shift in its shape and structure. The
established players in the industry are taking a hard look at their portfolio of products and are in
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2008, the growth momentum of the first six months was lost. Planned investment projects were
shelved; live projects faced a shortage of funds as credit flows dried up. As money became
dearer, pay packets became slimmer and risk aversion grew both from the demand and supplyside. Compulsions of coalition politics at the Centre and the impending Lok Sabha elections
didn't help either, and slowed down reforms and implementation of projects, particularly in
critical sectors like roads, ports and power. The worst hit was the manufacturing sector. From the
second half of the financial year, the index of industrial production contracted on three
occasions, remained close to zero on two occasions, and was mildly positive only once. Two –
Wheeler Financing Though two-wheeler are the most preferred from of transport in India, the
fact remains that it is a lower end market product. Most two-wheeler manufacturer like Bajaj
Auto and kinetic engineering have set up their own finance company since organized financiers
do not think the returns are particularly attractive. The argument given by some financiers is that
the price of a Yamaha or Hero Moto Corp (previously Hero Honda) is so high that people prefer
to buy a second hand car instead. This is particularly true of small town where people desire to
own a car and they have the means the two wheeler is then only a second vehicle for the family.
MARKET MECHANICS: Since 1985, when the first Hero Moto Corp (previously Hero Honda)
it has been and instant hit. A mileage miser with just about adequate performance further backed
by image of Honda and Hero Cycles brand of aggressive marketing, it climbed up the sales chart
outselling every other motorcycle by ten of thousands every year. Over the years, company has
received its share of accolades, including the National Association of India Award against 200
contenders.
SEGMENTATION, TARGETING & POSITIONING
From the current segmentation, targeting & positioning and consumer surveys we found that our
client has targeted the following segments
♦ Congested areas of urban cities.
♦ Males/Females between the age group of 18-36
♦ Middle class people , mostly officials & executives The client analysis from our questionnaire
it was found that our client has targeted the right segment HHML is overlooking one feature in
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bike which is its low maintenance cost and reliability (i.e. less chances of breakdown) which is
absent in its competitors. Therefore, in order to meet the sales target, two option are available
with the client, one is to redesign the bike and second is to reposition the bike as ―Bike with onetime investment‖. Since redesigning of bike may involve a big task and huge investment
therefore we recommended repositioning the bike.
Growth
The business growth of Hero Moto Corp (previously 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 Moto Corp (previously 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.
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.
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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'srequirements 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
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 Moto Corp (previously Hero Honda)
Motors Limited, the focus is on financial and raw material management and a low employee
turnover.
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Chapter2: conceptual discussion
“Marketing strategy of hero Moto corp”
The 4 P’s of Marketing
All four are essential to the success of a marketing plan for either a product or a service
4 P’s stand for
– Product
– Price
– Place
– Promotion
A mix of the four is necessary to sell a product
Product
Refers to the benefits of buying a product
What need does the service/product fulfill
Quality
What will the quality of your service/product be?
Some people really want quality (Ferrarri) vs. others that don’t really matter (McD’s)
Features
How will your product/service differ from the competition
What will you do differently?
Design
• How is it going to look?
• Consumers often will purchase because “it looks cool”
– Packaging – if your selling a product what image will the packaging communicate?
• If a service – how will the appearance of your operation communicate an image
about your business
–
Range of Products – what complimentary products may you offer
• If service: Will you offer other products with your service
• Example: Moose Winooski’s – you can buy T-Shirts and Hats
• Example: Think of the range of products that apple has
Price
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• Marketing is responsible for establishing the price of their service/product
• Must consider the costs of all the inputs (materials, labour, etc)
• Mark-up Price – How much profit do you want to make on every product/customer
• Example: Selling Cupcakes
–
Every cupcake uses $1 of materials and labour roughly costs $0.25 to make one muffin
– You must charge at least $1.25 to break-even
• The price of your product or service tells the customer a lot about your product
• Price
• Different Pricing Strategies
–
Competition – basing your prices on those of the competition
– Penetration – making your price low while new just to get some business
– Bundle – putting the product/service with another item and bundling the prices
– Psychological – making the price say something about the quality of your product
– Place
• Simply refers to how & where you are going to sell the product to the consumer
•
Direct Distribution – selling your product directly to the consumer – Brick & Mortar vs. Virtual Store
• Indirect Distribution – sold through a 3rd party
– What retailers are the best for reaching your Target Market?
– Example: Selling protein powder – where do I sell?
• Place
• For a service : where are you going to locate in order to best reach your target market
• You want to be in an area that
–
your target market frequents
– Says something about your business
• Notice how car dealerships are
always on the outskirts oftown or close to a highway?
• Brantford Commons
• Promotion
• A successful product or service means nothing unless the benefit of that product/service can be
communicated to the Target Market
• There are many ways to get the “word out”
• How many can we think of...
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Chapter3: DATA ANALYSIS AND INTERPRETATION
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Chapter4: FINDINGS
During this research project I came in to contact with many customers who are having bikes. It
has been found that in Hero Moto Corp (previously Hero Honda) mostly the customers are
having splendor while the ratio of the customers using Passion, Karizma and other bikes are
comparatively low. In Bajaj the customers are giving more preference to Discover and Pulsar
models and in case of TVS Bikes the customers are givig more preference to the other models
rather than Flame,Starcityand Apache. The maximum numbers of customers that are using these
bikes fall in the income group of 200000-300000.
It has been observed that the customers are using their bikes mostly for official and personal
purpose. It is observed that the awareness of Hero Moto Corp (previously Hero Honda) bikesmostly comes from friends while of Bajaj and TVS the awareness comes from newspapers and
televisions. Out of the sample size of 100 customers, 65 customers agree with the fact that
advertisements play a very significant role in influencing their behavior to choose the bike. On
the other hand 15 customers do not agree to this fact. While remaining 17 customers are not sure
about it.
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Chapter5: CONCLUSION
1. Most of the Flame, Apache, Pulsar, CBZ & Karizma are purchased by young generation 18
to 30 years because they prefer stylish looks and rest of the models of Hero Moto Corp
(previously Hero Honda), TVS and Bajaj are purchased more by daily users who needs
more average of bikes than looks.
2. Hero Moto Corp (previously 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.
6. Number of products is large in comparison to others
7. The distribution policies are more efficient then any other company .
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RECOMMENDATIONS1. Hero Moto Corp (previously Hero Honda) should think about fuel efficiency in case of
upper segment bikes.
2. More service centers should be opened.
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Chapter6: BIBLIOGRAPHY
1. www.herohonda.com
2. www.google.com
3. www.bajaj.com
4. www.twowheeler.com
5. www.extrememachines.com BOOKS:
Marketing Management (Philip Kotler)
Marketing Management ( Rajan Saxena)
Foundation of Advertising Theory & Practice(S.A.Chunawala /K.C. Sethia.)
Fundamental of Marketing
(Etzel Machel / J.Bruce.Walker)