COMPARATIVE ANALYSIS OF MARKET SHARE OF “ COMPARATIVE HERO HONDA HONDA V/S BAJAJ BAJAJ IN GURGO GURGOAN” AN”
Dissertation
SUBMITT SUBMITTED ED FOR THE PARTIAL PARTIAL FULFILM FULFILMENT ENT OF THE REQUIREMENT FOR THE AWARD
OF
Bachelor of Business Administration SUBMITTED BY: MANISHA YADAV ROLL NO.-AURO8O3O25 NO.-AURO8O3O25
UNDER THE GUIDENCE OF FACULTY GUIDE: MR. HIMANSHU MAHOBIA
AMITY BUSINESS SCHOOL
AMITY UNIVERSITY RAJASTHAN YEAR OF SUBMISSION: 2011
1
2
CERTIFICATE FROM THE FACULTY GUIDE AMITY BUSINESS SCHOOL AMITY UNIVERSITY, RAJASTHAN
Name of Faculty: Faculty: Mr. Himanshu Mahobia Mahobia Designation: Assistant Professor Department: Department: ABS
CERTIFICATE
I certify that the dissertation entitled “A report on comparative analysis of market share share of Hero Honda Honda v/s Bajaj” Bajaj” “submitted for the degree of Bachelors in Business Administration (BBA) by Manisha Yadav is the record of research work carried out by her under my guidance and supervision, and this work has not formed the basis for the award of any degree, diploma in this or any other University or other similar institution of Higher learning.
Place: Jaipur
Signature of faculty guide.
Date:
3
ACKNOWLEDGEMENT
The research on “Comparative Study of market share of Bajaj and Hero Honda” has been given to me as part of the curriculum in 3-Years
Bachelors Degree in Business Administration.
I have tried my best to present this information as clearly as possible using basic terms that I hope will be comprehended by the widest spectrum of researchers, analysts and students for further studies.
I have completed this study under the able guidance and supervision of Mr. HIMANSHU MAHOBIA; I will be failing in my duty if I do not acknowledge the esteemed scholarly guidance, assistance and knowledge, I have received from them towards fruitful and timely completion of this work.
Mere acknowledgement may not redeem the debt I owe to my parents for their direct/indirect support during the entire course of this project.
I am also thankful to my friends who helped me a lot in the completion of this project.
MANISHA YADAV 4
TABLE OF CONTENT PARTICULARS
CHAPTER – 1 1.1 Introduction CHAPTER-2 2.1 Review of literature CHAPTER -3 3.1 Research methodology 3.2 Objectives 3.3 Research 3.4 Research approach 3.5 Sample unit 3.6 Data collection 3.7 Scope 3.8 limitations CHAPTER-4 History of company Profile Key Person Awards Timeline of new releases Products History of hero Honda Company profile Key persons Awards or recognition Advertisement strategy
-
ANALYSIS AND INTERPRETATION CONCLUSION RECOMMENDATION BIBLIOGRAPHY
5
CHAPTER-1
6
INTRODUCTION Introduction the project is about a comparative analysis of Hero Honda and Bajaj on the basis of mkt. share of the company, customer perception regarding the products of the company. Consumer behavior, products feature of the company and performance of the company also include.
The project starts with brief introduction both the company i.e. Hero Honda and Bajaj which include the profile of the company key persons in the company board of directors. Awards and recognition, advertisement strategies, growth of the company.comprative analysis done through both prima and secondary data. For primary research questionnaire was designed & respondent taken from customer. Then analyses were done with the help of pie chart& bar diagrams.
7
CHAPTER-2
8
REVIEW OF LITERATURE
RAJ KUMAR LEISHEMBA (8Aug.2009)-
TWO WHEELER MAJORS HERO HONDA, BAJAJ AUTO FEEL THE HEAT, PROFITS DIP AS SALES SLIDE. The worst fears of two wheeler manufacturers are coming true. After struggling unsuccessfully to maintain their sales intact, they are now having to cope with declining bottom line. That all is not well in the two-wheeler industry can be gauged from the fact that in the first quarter ended June for the fiscal 2007-08, countrys largest two-wheeler manufacturers, Hero Honda and Bajaj Auto have posted not only declining sales but also double digit dip in net profit.
LIJEE PHILIP (Sept 2008) - :
Hero Honda, Bajaj Auto zooms ahead of peers in India scooter market. Competition notwithstanding, two-wheeler majors Hero Honda and Bajaj Auto continue to see their market shares growing. The consolidated market share of Hero Honda and Bajaj Auto (the top two players) has grown from 66 percent in 1999 to 79 percent in the first half of FY05. The other two-wheeler players, including TVS, LML, Kinetic Engineering, Honda Motorcycle & Scooter, Majestic Auto, Yamaha and Royal Enfield, have seen their share dropping from 34 percent to 21 percent in the same period.
9
KUSHAN MITRA (Mar.2006)
The Moto-Race Gets Hotter Hero Honda is still in front by a long way, but Bajaj Auto is gaining ground, slowly but surely . Sales of seven million vehicles in 2005-06, six lakh in April 2006- it is not a bad time to be a two-wheeler manufacturer in India. But it is an even better time to be one of the top two manufacturers, the Pawan Munjals led Hero Honda Motors Limited (HHML) and the Rajiv Bajaj led Bajaj Auto Limited (BAL). The two control close to 80 per cent of the motorcycle market. But you can't expect them to be content with their respective positions, what with bal determined to wrest back the # 1 slot it lost to HHML back in the late nineties, and HHML resolute about clinging on to the numero uno crown.
ASIA PULSE NEWS (2008)
INDIA'S BAJAJ AUTO READY TO MEET PRICE WAR. PUNE, Sept 12 Asia Pulse - Not ready to be cowed by competitive pressures despite a strain on margins, Bajaj Auto has said it was ready to meet any kind of price war "head-on" and could even afford a further reduction in prices.
10
CHAPTER-3
RESEARCH METHODLOGY
OBJECTIVES:-
1. To know the market share of Bajaj & Hero Honda.
2. To know the perception of customers regarding bikes.
3. To determine the customers satisfaction regarding bikes.
4. To determine the factors influencing the choice of customers regarding
bikes.
11
RESEARCH
It is well known fact that the most important step in marketing research process is to define the problem. Choose for investigation because a problem well defined is half solved. That was the reason that at most care was taken while defining various parameters of the problem. After giving through brain storming session, objectives were selected and the set on the base of these objectives. A questionnaire was designed major emphasis of which was gathering new ideas or insight so as to determine and bind out solution to the problems.
COLLECTION OF DATA
12
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 and to calculate the market share of this brand in regards to other brands. Questionnaire method telephone interview also conducted.
Secondary data are those which has been collected by some one else
and which already have been passed through statistical process. Secondary data has been taken from internet, newspaper, magazines and companies web sites.
RESEARCH APPROACH
The research approach was used survey method which is a widely used method for data collection and best suited for descriptive type of research survey includes research instrument like questionnaire which can be structured and unstructured. Target population is well identified and various methods like personal interviews and telephone interviews are employed. SAMPLING UNIT
It gives the target population that will be sampled. This research was carried in Dharuhera and Gurgoan
13
SAMPLE SIZE
100
DATA COMPLETION AND ANALYSIS
After the data has been collected, it was tabulated and findings of the project were presented followed by analysis and interpretation to reach certain conclusions.
SCOPE
My project was based on the Comparative Study of Bajaj V/S Hero Honda and data was taken in the Dharuhera and Gurgoan.
LIMITATIONS Research work was carried out in one Distt of Haryana (rewari and Gurgoan) only the finding may not be applicable to the other parts of the country because of social and cultural differences. The sample was collected using connivance-sampling techniques. As such result may not give an exact representation of the population.
Shortage of time is also reason for incomprehensiveness.
14
The views of the people are biased therefore it doesn’t reflect true picture.
15
CHAPTER-4
HISTORY OF THE COMPANY
Bajaj Auto came into existence on November 29, 1945 as M/s Bachraj Trading Corporation Private Limited. It started off by selling imported twoand 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 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. 16
Bajaj Auto limited is one of the largest two wheeler manufacturing company in India apart from producing two wheelers they also manufacture three wheelers. 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 2007-08. 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. 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 17
country.
PROFILE Founder
Jamnalal Bajaj
Year of Establishment
1926
Industry
Automotive - Two & Three Wheelers
Business Group
The Bajaj Group
Listings & its codes Presence
BSE
–
Code:
500490;
NSE
-
Code:
BAJAJAUTO 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
18
Registered
&
Head Akurdi
Office
Pune
-
411035
India Tel.:
+(91)-(20)-27472851
Fax: +(91)-(20)-27473398 Works
•
Akurdi, Pune 411035
•
Bajaj Nagar, Waluj Aurangabad 431136
•
Chakan Industrial Area, Chakan, Pune 411501
E-mail
[email protected]
Website
www.bajajauto.com
BOARD OF DIRECTORS RAHUL BAJAJ
CHAIRMAN
MADHUR BAJAJ RAJIV BAJAJ
VICECHAIRMAN & WHOLE DIRECTOR MANAGING DIRECTOR
SANJIV BAJAJ
EXECUTIVE DIRECTOR
D.S. BAJAJ
WHOLE TIME DIRECTOR
KANTIKUMAR R. PODAR
DIRECTOR
SHEKHAR BAJAJ
DIRECTOR
J.N.GODREJ
DIRECTOR
TIME
AWARD AND RECOGNITION
19
Type Public Founded 1945 Headquarters Pune, India Key people Rahul Bajaj (Chairman) Revenue Net income Employees
Rs. 1,01,063 billion (2006) or USD 1.87 billion Rs. 17,016 billion ???
20
2008
•
Bajaj Discover DTS-i was chosen as Bike of the Year and Indigenous Design of the Year by Overdrive
2006
Awards. •
Bajaj Auto was chosen as Bike Maker of the Year by ICICI Bank Overdrive Awards.
•
2004
DTS-i Technology was chosen as Auto Tech of the Year by ICICI Bank Overdrive Awards.
•
Bajaj Pulsar DTS-i became Bike of the Year by ICICI Bank Overdrive Awards.
•
Wind 125 chosen as the Two Wheeler of the Year by CNBC AUTOCAR Awards.
•
Wind 125 chosen as the Bike of the Year by Business Standard Motoring.
2003
•
Bajaj Pulsar 180 DTS-i chosen as Wheels Viewers Choice Two Wheeler of the Year and Best Two Wheeler by BBC World Wheels Award.
•
Bajaj Pulsar 150 DTS-i chosen as Best Two Wheeler between Rs. 45,000 to Rs. 55,000 by BBC World Wheels Award.
•
Bajaj Boxer AT KTEC chosen as Best Two Wheeler under Rs. 30,000 by BBC World Wheels Award.
•
Bajaj Pulsar chosen as Motorcycle Total Customer Satisfaction Study by NFO Automotive.
•
Bajaj Pulsar chosen as Bike of the Year by ICICI Bank OVERDRIVE Awards.
2002
•
Bajaj Pulsar chosen as Most Exciting Bike of the Year by OVERDRIVE Awards.
•
Bajaj Eliminator chosen as Bike of the Year by OVERDRIVE Awards.
2001
•
21 Bajaj Eliminator chosen as Most Exciting Bike of the
Year by OVERDRIVE Awards.
TIMELINE OF NEW REALESES •
1971 - three-wheeler goods carrier
•
1972 - Bajaj Chetek
•
1976 - Bajaj Super
•
1977 - Rear engine Auto rickshaw
•
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 Safire
•
2001 - Eliminator, Pulsar
•
2003 - Caliber115, Bajaj Wind 125, Bajaj Pulsar
22
•
2004 - Bajaj CT 100, New Bajaj Chetek 4-stroke with Wonder Gear , Bajaj Discover DTS-i
•
2005 - Bajaj Wave, Bajaj Avenger , Bajaj Discover
•
2006 - Bajaj Platina
•
2007 - Bajaj Pulsar-200
PRODUCTS OF BAJAJ
BAJAJ XCD
BAJAJ PULSAR
23
BAJAJ BOXER
BAJAJ WIND
BAJAJ PULSAR 150cc
BAJAJ PLATINA
24
BAJAJ CT100
BAJAJ PULSAR 220CC
25
BAJAJ DISCOVER
26
BAJAJ BLADE
UPCOMING MODELS
1 Bajaj Blade 2 Bajaj Sonic
ADVERTISMENT STRATEGY
Bajaj is always known for its outstanding ads over the period of time. Since its inception, Bajaj has come out with variety of ads and were always 27
successful in their advertisements. Scooters were well known by the brand name of Bajaj. Be it any scooter, one used to recognize it by the brand name Bajaj. This was the identity a decade ago which the Bajaj has still maintained. Bajaj is always known for its ads without well-known brand ambassadors which is again a plus point to its cart as it saves a huge cost in terms of brand ambassadors unlike Hero Honda and TVS. Prior, Bajaj used to convey the feeling of ‘ Indianans’ in its ads. With a punch line ‘ Hamara Bajaj ’ Bajaj drove into everybody’s hearts and the title song of ‘ Naye Bharat Ki Naye Tasveer ’ added a great value to its mobikes and scooters. A
couple of years back, Bajaj had introduced an advertisement which promoted all the different ranges it had, wherein they had shown each product they had with a feeling of Indianness. Example: Eliminator passes by a rangoli and drives slowly sideways without disturbing it. People on boxer pass-by a temple and bend their head to give a little offering. Such ads had revealing Indian culture had a great effect on Indians and Bajaj was successful in most of its ads. But recently, Bajaj had changed its brand logo along with its punch line i.e. ‘ Hamara Bajaj ’ got converted to ‘ Inspiring Confidence’. The reason for this change as told by the company officials was to keep pace with the new technologies in the fast moving world. Even though it had changed its punch line, it didn’t have much effect on its brand image.
28
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
29
ventures in India, until the year 1999 when HMC had announced a 100% subsidiary, Honda Motorcycle & Scooter India (HMSI). This announcement caused the HHM stock price to decrease by 30 percent that same day. Munjal had to come up with some new strategic decisions as, HMSI and other foreign new entry companies were causing increased intensity of rivalry for HHM.
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).. 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 four-stroke 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 30
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 twowheelers 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 Ideal Jaws and Escorts took the middle and lower end of the market respectively.
•
Hero Honda enjoys a significant brand premium. Its aggressive pricing strategy to take on the competition has helped it in volume growth.
•
Variant launches in each of Splendor and Passion has helped in stemming the loss in market share in the face of the competition. Hero Honda now plans to launch two new models in the 100cc segment in FY05 on a new platform.
•
The company has started logging good volume growth after the launch of Passion Plus and Splendor Plus as well as the CD-Dawn, which has also rejuvenated its product range. Volumes should improve further, due the Aggressive cost controls and significant economies of scale are expected to aid Hero Honda in retaining margins.
31
•
Hero Honda will continue to be an attractive dividend yield play as the company continues to generate significant free cash flows as its capital requirements are limited
BOARD OF DIRECTORS
MR.BRIJMOHON LAL MUNJAL
CHAIRMAN &WHOLE TIME DIRECTOR
MR. PAWAN MUNJAL
MANAGING DIRECTOR
MR.TOSHIAKI
JT.MANAGING DIRECTOR
MR.TAKO EGUCHI
WHOLE TIME DIRECTOR
MR.SATYANAND MUNJAL
NON- EXECUTIVE DIRECTOR
MR.OM PARKASH MUNJAL
NON- EXECUTIVE DIRECTOR
MR.MASAHORO
NON- EXECUTIVE DIRECTOR
MR.NARINDER NATH VOHRA
NON- EXECUTIVE DIRECTOR
32
Type Public company BSE:HERO HONDA Founded January 19, 1984 in Gurgaon, Haryana, India Headquarters Haryana, India Om Prakash Munjal, Founder Key people
Industry Products Revenue Website
Mr. Brijmohan Lall Munjal, Chairman Mr. Toshiaki Nakagawa, Joint Managing Director Mr. Pawan Munjal, Managing Director Automotive Motorcycles, Scooters U$ 2.8 billion http://www.herohonda.com/site/home/home.asp
AWARDS 2006
'Lifetime Achievement Award' for Translating Excellence in Corporate Governance into
33
Indian
2005
Automotive
Hall
of
Pride
by
Overdrive
CNBC TV18 Commendation of Business Leadership displaying extraordinary Corporate Padma
Leadership Bhushan
and
Entrepreneurial
by
Government
Spirit
of
India
Doctor of Letters (Honoris Causa) by Hemwati Nandan Bahuguna Garhwal University,
Srinagar
Garhwal
Lifetime Achievement Award by ET Awards for Corporate Excellence 2004
Life Time Achievement Award for Management by All India Management Association D.
Litt.
Lifetime
(Honoris Achievement
Causa) Award
by
Banaras
by
Amity
Hindu
University
Business
School
Lifetime Achievement Award by HT Power Jobs 2002
Entrepreneur
of
the
Year
Award
by
Business
Standard
Giants International Award to the Chairman in the field of Business & Industry Business Leadership Award by Madras Management Association 2001
Entrepreneur of the Year Award by Ernst & Young
2000
Sir Jehangir Ghandy Medal for Industrial Peace - by XLRI, Jamshedpur
1998
Business Leader of the Year by Business Baron
1997
Distinguished Entrepreneurship Award by PHD Chambers of Commerce & Industry
1995
National Award for outstanding contribution to the Development of Indian Small Scale Industry (NSIC Award - Presented by President of India)
1994
Businessman of the Year by Business India Group of Publications
1992
Honorary Membership - Indian Institution of Industrial Engineering Award
•
Hero Honda enjoys a significant brand premium. Its aggressive pricing strategy to take on the competition has helped it in volume growth. 34
•
Variant launches in each of Splendor and Passion has helped in stemming the loss in market share in the face of the competition. Hero Honda now plans to launch two new models in the 100cc segment in FY05 on a new platform.
•
The company has started logging good volume growth after the launch of Passion Plus and Splendor Plus as well as the CD-Dawn, which has also rejuvenated its product range. Volumes should improve further, due to the base effect and improved rural sentiment on the back of higher farm incomes.
•
Aggressive cost controls and significant economies of scale are expected to aid Hero Honda in retaining margins.
•
Hero Honda will continue to be an attractive dividend yield play as the company continues to generate significant free cash flows as its capital requirements are limited
HERO HONDA HEADQUARTERS
35
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 citation needed . 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.
PRODUCTSOF HERO HONDA
36
CBZ
AMBITION
PASSION PLUS
KRIZMA
37
SPLENDOR PLUS
CD100
HUNK
GLAMBOUR
38
PLESURE ADVERTISMENT STRTEGY “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 39
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). This announcement caused the HHM stock price to decrease by 30 percent that same day. Munjal had to come up with some new strategic decisions as, HMSI and other foreign new entry companies were causing increased intensity of rivalry for HHM.
GROWTH OF THE COMPANY
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.
40
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. 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 twowheeler 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.
41
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
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
42
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.
43
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. Lall 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 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 came Hero Motors 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.
44
The Hero Group also took a venture into other segments like exports, financial services, information technology, which includes customer response services and software development. Further expansion is expected in the areas of Insurance and Telecommunication. The Hero Group's phenomenal growth is the result of constant innovations, a close watch on costs and the dynamic leadership of the Group Chairman, characterized by a culture of entrepreneurship, of right attitudes and building stronger relationships with investors, partners, vendors and dealers and customers
ANALYSIS OR INTERPATATION
Q1) Which bike do you have?
Hero Honda
47
Bajaj
38
Any other
15
45
Q2) Which Model do you Have? HERO HONDA
NO.
BAJAJ
NO
SPLENDER
21
CT 100
7
PASSION
13
DISCOVER
12
KARIZMA
7
PULSAR
11
ANY OTHER
6
ANY OTHER
8
46
47
Q3) In which family Income level do you Fall?
100000 – 200000
22
48
200000 – 300000
45
300000 – 400000
23
ABOVE – 400000
10
50 40
100000-20000
s n o 3 0 s r e P 2 0 f o o 1 0 N
200000-30000 300000-40000 above 400000
0 1 In c o m e le le v
Q4) For how long do you own a bike?
49
0 -1
34
1 -2 YEAR
29
2 -3 YEAR
26
ABOVE – 3 YEAR
11
Q5) For what purpose do you use your Motor Bike?
50
Q6) How do you come to know about this Motor Bike
51
HERO HONDA
BAJAJ
NEWS PAPERS
4
2
TELEVISION
23
16
MAGAZINE
2
1
FRIENDS & RELATIVE
18
19
Q7) Does Advertisement Influence your decision in choosing a Motor Bike?
52
YES
87%
NO
5%
CANT’SAY
8%
Q8) Do you have full knowledge about Bikes before buying?
53
HERO HONDA
BAJAJ
YES
25
23
NO
22
15
30 25 s n o s r e p f o o N
20
Y es
15
No
10 5 0 Hero Honda
Bajaj
Com pany Nam
Q9) Which Factor below Influence your decision?
54
80% 70% 60% 50%
PRICE MILEAGE QUALITY RESALE VALUE STATUS SYMBOL
40% 30% 20% 10% 0%
Q10) How would you rate the following factors of Bikes with respect to different company? HERO HONDA
BAJAJ
MILEAGE
70%
80%
PRICE
58%
62%
PICK UP
85%
80%
MAINTANCE
53%
55%
BRAND IMAGE
65%
58%
55
90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
MILEAGE PRICE PICKUP MAINTANCE BRAND IMAGE HERO HONDA
BAJAJ
Q11) If new Bike with good features comes in, then would you like to change your bike?
Yes No Cant say
Hero Honda
Bajaj
19 17 11
21 14 3
56
25 20 s n o s r e P f o o N
15
Hero Hond
10
Bajaj
5 0 Y es
No
Cant s ay
Views
CONCLUSION 1.
2. 3.
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. Hero Honda is considered to be most fuel-efficient bike on Indian roads. Service & Spare parts are available throughout India in local markets also.
57
4. 5.
While buying a motorcycle, economy is the main consideration in form of maintenance cost, fuel efficiency. Majority of the respondent had bought their motorcycle more than 3 years.
RECOMMENDATIONS 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. 58
BIBLIOGRAPHY 1. www.herohonda.com 2. www.google.com 3. www.bajaj.com 4. www.twowheeler.com 5. www.extrememachines.com
59
QUESTIONNAIRE NAME: - ……………………………………………… CONTACT NO ……………………………………….
AGE:-
15-20
20-25
25.30
Above 30
Businessman
Employee
Student
Other
OCCUPATION:-
Q1) Which Bike do you have?
60
Hero Honda
Bajaj
Any Other
Q2) Which Model do you have? Hero Honda: -
Bajaj: -
Splendor
Passion
Karizma
Other
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
61
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
Resale Value
Status Symbol
Quality
Q10) How would you rate the following factors of bikes with respect to different companies? Hero Honda Bajaj Mileage Price Pick up Maintenance Look/Shape BRAND IMAGE
62
