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Customer satisfaction on Hero Motocop Ltd after split with Honda

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  • 1. 1. INTRODUCTION TO THE PROJECT The project is all about measuring the customer satisfaction in Hero motors. For the past few years every company is trying to satisfy its customers. The emphasis is on ways of retaining customers, then on attracting new customers. It is easy to attract new customers then to retain old customers. So, companies are trying to focus on this aspect of customer‘s satisfaction. The sale of a product does not end with the sale transaction but it is the point at which the original marketing concept starts. The marketer has to see that whether the customer satisfied with that particular product/service or not. The post purchase behavior is important for a marketer. If there is any cognitive dissonance in the minds of the customers then that is enough to lose a customer. Keeping this in mind the companies are giving more importance to customer satisfaction. This project work has been done to find out whether a customer is satisfied or dissatisfied, also to measure the level of the customer satisfaction and provide this feedback to the company. The first phase of the project involves the collection of information from the customers for interpreting the characteristics based on which the customer feels satisfied or dissatisfied. This information is collected by preparing a structured questionnaire. The questionnaire consists of both open-ended and closed-ended questions. The questionnaire is designed in such a way that a customer feels convenient to answer. Page 1 Garden City College of Science & Management Studies
  • 2. The collated information through the questionnaire is analyzed and presented in a statistical form. The findings are listed and suggestions to solve problems faced have been given in the suggestion part. INTRODUCTION TO CUSTOMER SATISFACTION Whether the buyer is satisfied after purchase depends on the offers performance in relation to the buyer expectation. In general satisfaction are a person‘s feelings of pleasure or disappointment resulting from comparing a products perceived performance relation to his/her expectations. If the performance falls short of expectation, the customer is dissatisfied. If the performance matches the expectation customer is satisfied. If the performance exceeds the expectation the customer is highly satisfied. Customer satisfaction cannot be very difficult. After all you either satisfied with the services you receive or you are not. If you don‘t you are not. If it is that easy, then obtaining people's opinion about how satisfied they are with relatively straight forward matter- or is it? Customer satisfaction is a marketing tool and a definite value added benefit. It is often perceived by customers as important as the primary product or service your organization offers. It looks at what is involved from 3 different angles, the first is from the view of an organization wishing to understand, and measures, how satisfied its customer are with the products and services they receive from it. The second is from the perspective of a research agency that has been asked to obtain feedback from customers and about their experiences when dealing with companies. Finally it considers the issue from the perspective of consumers who participate in surveys, including both business customers and members of general public Page 2 Garden City College of Science & Management Studies
  • 3. MEANING OF CUSTOMER SATISFICATION Customer satisfaction is a business term, is a measure of how products and services supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business and part of the four prospective of balanced score card. In a competitive market place were businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy customer satisfaction drives successful private sector business. High performing businesses have developed principles and strategies for achieving customer satisfaction. This paper presents a framework or set of ideas for using customer satisfaction principles and strategies to improve the quality responsiveness, and possibility of public sector privately provided services in vulnerable communities The framework suggested that resident who live in tough neighborhoods can be supported through customer satisfaction strategies to become empowered individuals who informed perspectives influence decisions about what, how, when, and where services are available to them. Customer satisfaction is the customer‘s response to the evaluation of the perceived discrepancy between prior expectation and the actual performance of the product as perceived after its consumption. Page 3 Garden City College of Science & Management Studies
  • 4. DEFINITION Cocotte, woodruff and Jenkins (1987) define customer satisfaction as "conceptualized as a feeling developed from an evaluation of the experience." HERE, the timing of satisfaction response is driving consumption. BUT there is general agreement with kotler (2003) that "customer satisfaction is a person's feeling of pleasure or disappointment resulting from comparing a products perceived performance in relation to his or her expectation." In short customer satisfaction is "The provision of goods or services which fulfill the customer expectation in terms of quality and service, in relation to price paid." IMPORTANCE OF CUSTOMER SATISFACTION It costs at least 7 times more to source a new customer than it does to retain existing one a 'satisfied' customer tells 5-7 people in a year whilst a 'dissatisfied' customer will tell 14-15 people. Companies can boost profits anywhere from 25% to 125% by retaining a mere 5% more of their exciting customers. Totally satisfied customers were 6 times more likely to use that services and commend it than ' satisfied' customers. Page 4 Garden City College of Science & Management Studies
  • 5. Customers who have a bad experience with you and do not complain are only 37% likely to still do business with you. Customers who have an opportunity to complain and the complaint is achieved are 95% likely to still do business with you. FACTORS OF CUSTOMER SATISFACTION 1. Service of quality 2. reliability of service 3. knowledge of the staff 4. Being kept informed of progress 5. The way service kept its promises 6. The way the service handled any problem Friendliness of staff 7. How sympathetic staff were to your needs 8. Speed of enquiries 9. Number of time had to contact the service. Page 5 Garden City College of Science & Management Studies
  • 6. 2. REVIEW OF LITERATURE Planning for the future to achieve the long-term objective is integral to the survival and growth of every business. Strategic planning today has to take into cognizance the rapid changes in technology, increased competitiveness and the turbulent business environment, also with the world becoming one big global village. Strategy covers every aspect of business from business reengineering, new business development, product development and brand positioning to advertisements promotional campaigns, media and publicity. It is a game of innovation. In fact, marketing people are involved in marketing 10 types of entities; goods, services, experience, events, persons, places, properties, organizations, information and ideas. Marketing management is the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer value. India is second largest manufacturer and producer of two-wheelers in the world. It stands next to Japan and China in terms of the number of two wheelers produced and domestic sales respectively. Indian two-wheelers industry made small beginning in early 50‘s when Automobile products of India (API) started manufacturing scooter in India. Hero was established on 13 th of April 1984. The Indian two wheelers Industry can be broadly classified as scooter, motorcycles Page 6 Garden City College of Science & Management Studies
  • 7. and mopeds/scooters. In last six years domestic two-wheelers has seen structural charges. This can be seen from the change in composition of two wheeler sales, where the motorcycles have gained market share from the scooter and moped or scooters segments. The consumer is now faced with proliferation of brand models. Getting new customers as well as retaining them is an important task of manufacturers. So service after sales is very important. A satisfied customer brings in more name and goodwill to the company, which is why customer satisfaction is given more importance in today‘s competitive world. A study on this aspect with Hero two-wheelers at Hero MotoCorp Ltd was made. STATEMENT OF THE PROBLEM This Project has been titled ―A comprehensive study Post purchase buyer behavior and satisfaction towards Hero Motors Bikes after the split with Honda." To study the new market of Hero motors after the split with Honda, the consumer response to the bike and needed improvement aria The study would help to understand the consumer satisfaction to their expectation. OBJECTIVES This study was conducted keeping the following objectives in mind. 1. To study the factors which influence the purchase of Hero two-wheelers? 2. To know the customer level of awareness of Hero two-wheelers. Page 7 Garden City College of Science & Management Studies
  • 8. 3. To know the various factors, which influence customers in purchasing, they‘re two wheelers? 4. To find the after sales service offered by Hero MotoCorp Ltd. 5. To know the customer level of satisfaction of Hero two-wheelers with respect to Hero MotoCorp Ltd. 6. To find the profile of Hero MotoCorp Ltd two-wheeler customers. 7. To understand two wheeler sector in India. 8. How the split with Honda has affected Hero motors. SCOPE OF THE STUDY  This study helps the organizations to increase their service and product quality and in turn increase the market share, top and bottom line of the company. LIMITATIONS I have observed the following limitations in the course of my study. 1. The areas which were selected were limited only to Bangalore i.e., the findings are regional and do not represent the state or country. 2. Time constraints hampered the study. 3. Since the study involved in gathering information was from upper to higher-middle class people, interaction with them became difficult. 4. There may be respondent‘s bias. Page 8 Garden City College of Science & Management Studies
  • 9. 5. Even though utmost care has been taken in conducting the survey, the findings may sometimes differ from the population. 6. The study is conducted of academic nature 7. The split happened 1 year before, the study not giving the long run result of Hero Motors Bikes NEED FOR THE STUDY Marketing starts with identifying the needs of customers and ends in satisfying those wants. The goal of marketing is to attract new customers by promising superior value and to keep current customers by delivering satisfaction based on their preferences retaining them. Without customer, no market exists. As the customers are regarded as the superiors in today‘s market, the level of satisfaction and their preferences should be keenly studied. The two-wheeler industry has been expanding rapidly. Gone are the days when possessing a two-wheeler was seen as a luxury. Now days, it is viewed as a mere necessity. Prior, sale of two-wheelers was mainly confined to urban areas but lately in rural areas the bicycles are being replaced by power driven two-wheelers such as scooters, motorcycles. Not only this, this industry has also customers ranging from all demographic segments. It has been common sights that even school going children are driving two-wheelers. The women customers are also increasing due to increase in women literacy and employment. Page 9 Garden City College of Science & Management Studies
  • 10. Getting a new customer is difficult, than retaining a current customer is a more difficult one and not only that it is estimated that the cost of attracting a new customer is five times the cost of retaining current customer. It requires a great deal of effort to induce satisfied customer to switch away from their current preference. Thus, customer satisfaction is been given top priority in today‘s competitive world. Therefore, keeping the above stated objective in mind, this study was conducted to ascertain the customer‘s satisfaction towards Hero two-wheelers in Hero MotoCorp Ltd. In view of this, a detailed study of customer preferences, levels of satisfaction and their complaints and suggestions was undertaken. METHODOLOGY OF THE STUDY The information required for this study obtained was basically through two sources. Primary Data: Primary Data has been gathered by a survey through a structured questionnaire. The Data has been collected from 100 customers, through questionnaires, by using simple random sampling. In addition interaction with the staff of Hero MotoCorp Ltd has also given some information. Secondary Data: Secondary Data comprises of information obtained from annual reports, brochures, manuals websites etc. Page 10 Garden City College of Science & Management Studies
  • 11. 3. INDUSTRY PROFILE The Indian two-wheeler contributes the largest volume amongst all the segments in automobile industry. Though the segment can be broadly categorized into 3 sub-segments viz. scooters, motorcycles and mopeds; some categories introduced in the market are a combination of two or more segments e.g. scooters and step-thru. The market primarily comprises five players in the two-wheelers segment with the most of the companies having foreign collaboration with well-known Japanese firms earlier. But most of the companies are now planning 100% subsidiaries in India. and growth anticipated is higher than the 16 percent achieved in the past 10 years The automobiles sector is divided into four segments-two wheelers(mopeds, scooters, motorcycles, electric two-wheelers), passenger vehicles (passenger cars, utility vehicles, multipurpose vehicles), commercial vehicles (light and medium-heavy vehicles), and three wheelers (passenger carriers and good carriers). The industry is one of the key drivers of economic growth of the nation. Since the globalization of the sector in 1991 and the subsequent opening up of 100 percent FDI through automatic route, Indian automobile sector has come a long way. Today, almost every global auto major has set up facilities in the country. The world standings for the Indian automobile sector, as per the Confederation of Indian Industry, are as follows:  Largest three-wheeler market  Second largest tow-wheeler market Page 11 Garden City College of Science & Management Studies
  • 12.  Tenth largest passenger car market  Fourth largest tractor market  Fifth largest commercial vehicle market  Fifth largest bus and truck segment The sector has shown a sluggish growth of 12 percent in 2012. The trend is likely to stay with a 10 percent growth outlined for 2013 citing high ownership costs (fuel costs, cost of registration, excise duty, road tax) and slow rural income growth. Solid but cautious growth is expected over the next few years. However, from a long-term perspective, rising incomes, improved affordability and untapped markets present promising opportunities for automobile manufactures in India. According to Macquarie equities research, sale of passenger vehicles is expected to double in the next four years Two Wheeler & its role in Indian Context: As the cities grow & suburbs expand, transportation needs becoming more & more acute, with mounting pressure on its public transportation for which two wheelers are ideal. The two-wheeler Industry today has a significant role in the Indian economy, with an annual turnover of Rs. 9000 crores and compounded average growth of 10%. In recent years, it is of the few industrial sectors in the growth phase today considers personal transportation as one of the basic needs. The two-wheeler industry basically comprises mopeds, scooters, scooters and motorcycles. Mopeds are basic entry-level products aimed at lower/middle income groups, offering company. This category dominated by TVS SUZUKI, which has a market share of Page 12 Garden City College of Science & Management Studies
  • 13. 50% today. The other major players in this segment include KINETIC ENGG., HERO MOTORS and BAJAJ AUTO. Scooters, which found largest segment in the industry (37 percent) is dominated by BAJAJ AUTO. It is however facing stiff competition from LML, which offers better style and technology to the Indian customers. However, dominance of this category has been declining because of shift in the customer preferences. Major part of the growth in the two-wheeler industry has come from motorcycle especially, the Indo-Japanese 100cc motorcycles, which are considered, fuel efficient, reliable and suited for rough roads. Scooters also growing at a fast phase and are being increasingly perceived as a better option providing convenience and motor style, by urban customers. In this category, TVS Scooty holds a dominant market share. With sales of over three million vehicles, India is the second largest two-wheeler market in the world. Vehicle has become a necessity for day-to-day busy life, with the accelerated industrial and business activity in a liberalized environment. However, given the limited purchasing power and to high cost of cars, majority of the middle class vehicle users prefer two wheelers. With sales of over million vehicles, India is the second largest two-wheelers market in the world. China is the market leader with around 51 percent of the Asia Market, India, Page 13 Garden City College of Science & Management Studies
  • 14. Thailand; Indonesia & Taiwan are the other key markets for two-wheelers with market share of 19 percent, 10 percent, 9 percent and 5 percent respectively. In the last four to five years, the two-wheeler market has witnessed a market shift towards motorcycles at the expense of scooters. In the rural areas, consumers have come to prefer sturdier bikes to withstand the bad road conditions. In the process the share of motorcycle segment has grown from 48% to 58%, the share of scooters declined drastically from 33% to 25%, while that of mopeds declined by 2% from 19% to 17% during the year 200001. The Euro emission norms effective from April 2000 led to the existing players in the twostroke segment to install catalytic converters. 4-stroke motorcycles are now replacing all the new models. Excise duty on motorcycles has been reduced from 32% to 24%, resulting in price reduction, which has aided in propelling the demand for motorcycles. Fierce competition has also forced players to cut prices of certain models. Competition has intensified over the last couple of years altering the dynamics in the motorcycle segment with various companies planning to cash in on this spurt in demand by calling off their JVs like Suzuki Motors planning to break off with TVS. Recently, Honda Corporation of Japan announced its intentions to set up a 100% subsidiary to manufacture scooters and motorcycles. Other players in the two-wheeler industry include Bajaj Auto Ltd., Kinetic Motor Co.Ltd. LML and Escorts Yamaha. Low interest regime has helped in reducing cost of loans, which will help in boosting sales of 2-wheelers, since 80% of the two-wheelers are credit –stimulated. Page 14 Garden City College of Science & Management Studies
  • 15. The two-wheeler industry is passing through a critical but interesting phase. For many years, it was growing continuously but the turning point came in 1996=97 when it started slowing down. The impact was really (MI) felt in the next year when the overall growth was hardly two percent. This was also possible only because the motorcycle segment showed a healthy growth of 15 percent. The scooter segment went down by 3 percent and mopeds by 6 percent. Another highlight is that the motorcycle sales have surpassed the scooter sales for the first time in 1998-99. Until then, motorcycle sales were always trailing behind. The net result is that motorcycles now account for 41 percent of the two-wheeler market, while scooters account for 36 percent. Mopeds have been able to hold their own at about 21 percent. GROWTH OF MOTORCYCLES It is therefore not surprising that every major player is trying to get into the Motorcycle market to have a piece of the cake. Hero MotoCorp Ltd is indisputable the leader with 38 percent share followed by Bajaj with 27 percent (includes M-80), TVS at 19 percent and Escorts at 13 percent. Now LML and Kinetic have announced their plans to manufacture motorcycles, which are likely to come in the market by next year. The battle is expected to be fierce but the consumer will be the greater beneficiary. Page 15 Garden City College of Science & Management Studies
  • 16. The growth in motorcycles is slowly losing its hold. It is considered a family vehicle but perhaps there is competition from the second hand car markets where prices have fallen down rapidly. A1992 Maruti 800 is now available for just 70,000. The scooter manufactures have to watch this phenomenon and bring our many new product variants in the right price slots to sustain their shares in the market. The moped market has been steady with an average growth of 3 percent. It is dominated by TVS which holds 48 percent market share followed by Kinetic and Majestic Auto at 23 percent and 18 percent respectively. In each segment, there is a wide gap between the first two contenders, which makes their products positioning and marketing strategies most interesting. The two wheelers market seems to be maturing. There are the usual their conventional segment of scooters, mopeds and motorcycles. Two new segments are being created. NEW SEGMENTS A Step is through segment like Kinetic K4-100, Honda Street, Bajaj M-80, which is quite close to the motorcycle segment. The other segment is scooterettes or mini scooters in which vehicles such as Kinetic SX/Style, TVS Scooty, Hero Winner, Bajaaj Sunny/Sprite/Safire and LML trendy can be considered. These are vehicles under 75 cc and largely targeted at the youth market such as college students, young boys and girls and new couples. They get the advantage of lower excise duty at 16 percent as compared to 24 percent applicable over 75 cc. The trend is towards push button start vehicles. Page 16 Garden City College of Science & Management Studies
  • 17. Among the majors in the two-wheeler industry, first quarter figure for the current year of some players has been encouraging. The company sold 313,303 units last month as compared to 325,360 units in the same month last year. With this, BAL has recorded as 87 percent growth in the motorcycle segment in the first quarter with sales of 130,577 units (93,631 units in the corresponding period last year) BAL estimates market share of the first quarter-Geared scooters 75.9%, unguarded scooters- 16.5%, Step-thrus-72.3% and motorcycle-20.5%. In the scooters segment, sales of Bajaj Sunny and Bajaj Spirit increased by 170 percent to 7,876 units. First quarter sales registered an impressive 78 percent growth with sales of 19,562 (10,995 units). The overall sales grew by 9.3 percent in the quarter when the company sold 3.24 lakh vehicles. BAL however reported a decline in sales of scooters by 15.6 percent in the first quarter. The company hopes to increase the share of motorcycle in its product basket from 18 percent last year to 30 percent by 2003-04. Hero MotoCorp Ltd enjoys tremendous brand equity in the motorcycle segment. Kinetic Motors, another important player, managed to grow in 1999-2000, when the scooters segments a whole slipped by around 5 percent. TVS Suzuki, a motor two-wheeler market, has reported a growth of 13 percent in the first quarter period and sold 2.19 lakh units. Sales of motorcycles and scooters were up by 18 percent and that of mopeds by 8 percent over the same period last year. Page 17 Garden City College of Science & Management Studies
  • 18. The current year therefore promises to be a testing time for the two-wheeler industry. Industry pundits feel that an overall growth rate of 5 percent should be possible as against 9 percent projected earlier. The sales volume therefore is expected to be around 3.8 million in 2000-2001. DRAMATIC CHANGES: HeroMotoCorp is now world‘s largest manufacturer of two-wheelers. The company has benefited from the demand shift to motorcycles, as it focuses solely on this product segment (although has a product called Pleasure in Scooter segment). With fuel efficiency and riding comfort as the main selling points, HMC has been able to address a wide market and post robust sales growth even after its separation from the Japanese major Honda. The coming years will see increasing competition due to the parity in products and price. The only differentiators will be technology, quality, product range and service. Imaginative marketing will emphasize relationship building, customer satisfaction and relationship. All is exploring new techniques such as direct marketing and institutional sales. Some of them are taking the vehicle actually to the customer‘s doorstep. Now the customer is the king. HISTORICAL DEVELOPMENT OF TWO WHEELER INDUSTRY India is the second largest manufacturer and producer of two-wheelers in the world. It stands next to Japan and China in terms of the number of two-wheelers produced and domestic sales respectively. This distinction was achieved due to variety of reasons as if Page 18 Garden City College of Science & Management Studies
  • 19. respective policy followed by the Government of India towards the passenger car industry, rising demand for personal transport, inefficiency in the public transportation system etc., In Indian two-wheeler, industry made a small beginning in the early 50s when Automobile Products of India (API) started manufacturing scooters in the country. Until 1958, API and Enfield were the sole producers. In 1948, Bajaj Auto began trading in imported Vespa scooters and three wheelers. Finally, in 1980, it setup a shop to manufacture them in technical collaboration with Piaggio of Italy. The agreement expired in 1971. In the initial stages, API it was later overtaken by Bajaj Auto dominating the scooter segment. Although various Government and Private enterprises entered the fray for scooters, the only new player that has lasted until today is LML. Under the regulated regime, foreign companies were not allowed to operate in India. It was a complete seller market with the waiting period for getting a scooter from Bajaj Auto being as high as 12 years. The motorcycles segment was no different, with only three manufacturers via Enfield, Ideal Jawa and Escorts. While Enfield bullet was a four-stroke bike, Jawa and the Rajdoot were two-stroke bikes. Enfield 350cc bikes and Escorts 175cc bike initially dominated the motorcycle segment. The two-wheeler market was opened to foreign competition in the mid 80‘s. And then the market leaders-E5corts and Enfield- were caught unaware by the onslaught of the 100 Page 19 Garden City College of Science & Management Studies
  • 20. cc bikes of the four IndoJapanese joint ventures. With the availability of fuel-efficiency low power bikes, demand swelled resulting in Hero Honda — the only producer of four-stroke bikes (100cc category), gaining a top slot. The first Japanese motorcycles were introduced in the early eighties. TYS Suzuki and Hero Honda brought in the first two-stroke and four-stroke engine motorcycles respectively. These two players initially started with assembly of CKD kits, and later on progressed to indigenous manufacturing. In the 90‘s the major growth for motorcycle segment was brought in by Japanese motorcycles, which grew at a rate Of nearly 25% CAGR in the last five years. The industry had a smooth ride in the 50‘s, 60‘s and70‘s when the government prohibited new entries and strictly controlled capacity expansion. The industry saw a sudden growth in the 80‘s. The industry witnessed a steady growth of 14% leading to a peak volume of 1.9mm vehicles in 1990. The entry of Kinetic Honda in mid-eighties with a variometric scooter helped in providing ease of use to the scooter owners. This helped in inducing youngsters and working women towards buying scooters, who were earlier inclined towards moped purchases. In line with this, the scooter segment has consistently lost its part of the market share in the two~whee1er market. In 1990, the entire automobile industry saw a drastic fall in demand. This resulted in a decline of 15% in 1991 and 8% in1992, resulting in the production loss of 0.4mn vehicles. Barring Hero Honda, all the major producers suffered from recession in FY93 and FY94. Hero Honda showed a marginal decline in 1992. Page 20 Garden City College of Science & Management Studies
  • 21. The reasons for recession in the sector were the incessant rise in fuel price, high input costs and reduced purchasing power due to significant rise in general price level and credit crunch in consumer financing. Factors as if increased production in 1992, due to new entrants coupled with the recession in the industry resulted in either company reporting losses or fail in profits.India is one of the very few countries manufacturing three wheelers in the world. It is the world‘s largest manufacturer and seller of three wheelers. Bajaj Auto commands a monopoly in the domestic market with a market share of above 80%; Bajaj Tempo, Greaves Ltd and Scooters in India share the rest. The total number of registered two-wheelers and three-wheelers on road in India, as on March 1998 was 27.9nm and 1 .7nin respectively. The two-wheeler population has almost doubled in 1996 from a base of 12.6mn in 1990. PENETRATION OF TWO-WHEELERS: On a base of around 28mn vehicles on Indian roads and around 175mn households, there were only 160 motorized two-wheelers per thousand households in FY98. This compares poorly with countries like Thailand where it is around 600 per thousand households. Also with a household size of 5.5 persons and more than one wage earner in about 60% of the households, the potential for a second vehicle demand is also good. The number of households in the low-income group has fallen since FY86 and has been more pronounced in the post-reform period. On the other hand, the number of households in the middle, upper middle and high-income groups that form the consumer base for twowheelers, have increased. Their share of the total number of households has increased Page 21 Garden City College of Science & Management Studies
  • 22. from 10.6% in FY88 to 20.5% inFY96. This rising income profile however, has, been more pronounced in the urban areas as average annual growth in industry surpassed that of agriculture in the period FY93 to FY96. Page 22 Garden City College of Science & Management Studies
  • 23. 4. COMPANY PROFILE Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.) is the world's largest manufacturer of two - wheelers, based in India. In 2001, the company achieved the coveted position of being the largest two-wheeler manufacturing company in India and also, the 'World No.1' two-wheeler company in terms of unit volume sales in a calendar year. Hero MotoCorp Ltd. continues to maintain this position till date. HeroMotoCorp is now world‘s largest manufacturer of two-wheelers. The company has benefited from the demand shift to motorcycles, as it focuses solely on this product segment (although has a product called Pleasure in Scooter segment). With fuel efficiency and riding comfort as the main selling points, HMC has been able to address a wide market and post robust sales growth even after its separation from the Japanese major Honda. VISION The story began with a simple vision – the vision of a mobile and an empowered India, powered by its bikes. Hero MotoCorp Ltd., company‘s new identity, reflects its commitment towards providing world class mobility solutions with renewed focus on expanding company‘s footprint in the global arena. MISSION Hero MotoCorp's mission is to become a global enterprise fulfilling its customers' needs and aspirations for mobility, setting benchmarks in technology, styling and quality so that it converts Page 23 Garden City College of Science & Management Studies
  • 24. its customers into its brand advocates. The company will provide an engaging environment for its people to perform to their true potential. It will continue its focus on value creation and enduring relationships with its partners. STRATEGY Hero MotoCorp's key strategies are to build a robust product portfolio across categories, explore growth opportunities globally, continuously improve its operational efficiency, aggressively expand its reach to customers, continue to invest in brand building activities and ensure customer and shareholder delight. MANUFACTURING Hero MotoCorp two wheelers are manufactured across three globally benchmarked manufacturing facilities. Two of these are based at Gurgaon and Dharuhera which are located in the state of Haryana in northern India. The third and the latest manufacturing plant are based at Haridwar, in the hill state of Uttrakhand. TECHNOLOGY In the 1980's the Company pioneered the introduction of fuel-efficient, environment friendly four-stroke motorcycles in the country. It became the first company to launch the Fuel Injection (FI) technology in Indian motorcycles, with the launch of the Glamour FI in June 2006. Its plants use world class equipment and processes and have become a benchmark in leanness and productivity. Page 24 Garden City College of Science & Management Studies
  • 25. Hero MotoCorp, in its endeavor to remain a pioneer in technology, will continue to innovate and develop cutting edge products and processes DISTRIBUTION The Company's growth in the two wheeler market in India is the result of an intrinsic ability to increase reach in new geographies and growth markets. Hero MotoCorp's extensive sales and service network now spans over to 5000 customer touch points. These comprise a mix of authorized dealerships, service & spare parts outlets and dealer-appointed outlets across the country. Supply chain management As the Company prepares to produce a wider range of products, efforts are being taken to align the supply chain and prime up its supplier base. During the year, the Company kick-started the process of migrating its existing brands to the new brand. The exercise is expected to be completed during 2012-13. During the year, the Company also commenced the process of working with its vendors to develop new parts. The Company‘s Supply Chain Management function is built on three planks: Cost Quality Sustainability Page 25 Garden City College of Science & Management Studies
  • 26. Tracking inventory cost effectively and efficiently is known to be a key source of competitive advantage in the automobile industry. Hence, it comes as no surprise that cost leadership is the Company‘s prime focus area. Continual pressure on margins forced the Company and its supply chain partners to find innovative and alternate ways to combat inflation. Considerable attention was given to managing component inventory in the system, with double-digit growth in inventory turnover. To align HR processes with the supply chain, top two HR consulting firms in India are working with supply chain partners. The exercise is aimed at improving robustness of people processes and resulting in a direct impact on quality, cost, productivity, delivery and reliability. The move will enable supply chain partners move to the next orbit of operational excellence. The Company initiated more than 30 quality improvement projects with supply chain partners to provide better quality products to customers. BRAND The new Hero is rising and is poised to shine on the global arena. Company's new identity "Hero MotoCorp Ltd." is truly reflective of its vision to strengthen focus on mobility and technology and creating global footprint. Building and promoting new brand identity will be central to all its initiatives, utilizing every opportunity and leveraging its strong presence across sports, entertainment and ground- level activation. Directors Founder Director and Chairman : Dr. Brijmohan Lall Munjal Managing Director and CEO Mr. Pawan Munjal . : Page 26 Garden City College of Science & Management Studies
  • 27. Board of Directors Name of the person Nature of the Office Mr. Sunil Kant Munjal Non Executive Director Mr. Suman Kant Munjal Director Mr. Paul Edgerley Non Executive Director Mr. Pradeep Dinodia Director Gen. (Retd.) V. P. Malik Director Mr. Analjit Singh Director Dr. Pritam Singh Director Mr. M. Damodaran Director Mr. Ravinath Director Dr. Anand C.Burman Director Dr. Brijmohan Lall Munjal Mr. Munjal is the founder Director and Chairman of the Company and the $3.2 billion Hero Group. He is the Past President of Confederation of Indian Industry (CII), Society of Indian Automobile Manufacturers (SIAM) and was a Member of the Board of the Country's Central Bank (Reserve Bank of India). In recognition of his contribution to industry, Mr. Munjal was conferred the Padma Bhushan Award by the Union Government Page 27 Garden City College of Science & Management Studies
  • 28. Corporate Governance At Hero MotoCorp, it is the firm‘s belief that the essence of Corporate Governance lies in the phrase ''Your Company''. It is ''Your'' Company because it belongs to you - the shareholders. The Chairman and Directors are ''Your'' fiduciaries and trustees. Their objective is to take the business forward in such a way that it maximizes ''Your'' long-term value. This Company is committed to benchmarking itself with global standards for providing good Corporate Governance. It has put in place an effective Corporate Governance System which ensures that the provisions of Clause 49 of the Listing Agreement are duly complied with. The Board has also evolved and adopted a Code of Conduct based on the principles of Good Corporate Governance and best management practices being followed globally. Headquarter and Branches Corporate & Registered Office Hero MotoCorp Ltd. 34, Community Centre, Basant Lok, Vasant Vihar, New Delhi - 110057, India. Tel: +91-11-26142451, 26144121 Fax: +91-11-26143321, 26143198 Page 28 Garden City College of Science & Management Studies
  • 29. Zonal Offices East Zone Hero MotoCorp Ltd 3F, Neelamber Building, 28B, Shakespeare Sarani, Third Floor, Kolkata - 700017, India. Tel: +91-33-22810926 22810927, 22808922, 22811185 Fax: +91-33-22808923 Email: kolkata@heromotocorp.com West Zone Hero MotoCorp Ltd. 15-A, Bhale Estate, Rear Wing, Third Floor, Pune-Mumbai Road, Wakadewali, Pune - 411 003, India. Tel: +91-20-25511577, 25512161, 56012990-91 Fax: +91-20-25511266 Email: pune@heromotocorp.com North Zone Hero MotoCorp Ltd. F-126, Katwaria Sarai, Opp. Qutab Institutional Area, New Delhi -110016, India. Tel: +91-11-26533981-2, 47619300 Fax: +91-11-26533983 Page 29 Garden City College of Science & Management Studies
  • 30. Email: delhi@heromotocorp.com South Zone Hero MotoCorp Ltd. No - 294, 2nd Floor, 6th Main, Off 100 ft Road, HAL 2nd Stage, Indira Nagar, Bangalore – 560038, India. Tel: +91-80-25550430, 25584436, 25582436, 25321139 Fax: +91-80-25594036 Email: bangalore@heromotocorp.com GRADING POSITIVES Market leadership, strong brand equity, professional management, high operating efficiency and established scale economies. Strong financial profile characterized by healthy margins, high profitability and cash generation. Potential upsides to our estimates: (1) HMCL sustains its current market share, leveraging its brand equity, product performance and distribution strengths; (2) industry growth exceeds our estimates over the medium term despite existing concerns on macro-economic scenario; (3) HMCL betters the margins estimated by us via sustained business growth and increases in operating efficiency even in the face of competitive and cost pressures. Page 30 Garden City College of Science & Management Studies
  • 31. GRADING SENSITIVITIES Key sensitivities to our estimates include: (1) Inflation in input costs not being neutralized by price increases because of competitive pressures; (2) High concentration on Executive segment; (3) Intensifying competition from global players; (4) Ability to develop in-house technical capability or form alternate technical tie-ups with external institutions. Company History - Hero Moto Corp 1983 - Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed - Shareholders Agreement signed 1984 - Hero Honda Motors Ltd. Incorporated 1985 - First motorcycle "CD 100" rolled out 1987 - 100,000th motorcycle produced1989New motorcycle model - "Sleek" introduced Page 31 Garden City College of Science & Management Studies
  • 32. 1991 - New motorcycle model - "CD 100 SS" introduced - 500,000th motorcycle produced 1992 - Raman Munjal Vidya Mandir inaugurated - A School in the memory of founder Managing Director, Mr. Raman Kant Munjal 1994 - New motorcycle model - "Splendor" introduced - 1,000,000th motorcycle produced 1997 - New motorcycle model - "Street" introduced - Hero Honda's 2nd manufacturing plant at Gurgaon inaugurated 1998 - 2,000,000th motorcycle produced 1999 - New motorcycle model - "CBZ" introduced - Environment Management System of Dharuhera Plant certified with ISO14001 by DNV Holland - Raman Munjal Memorial Hospital inaugurated - A Hospital in the memory of founder Managing Director, Mr. Raman Kant Munjal 2000 - 4,000,000th motorcycle produced Page 32 Garden City College of Science & Management Studies
  • 33. - Environment Management System of Gurgaon Plant certified ISO-14001 by DNV Holland - Splendor declared 'World No. 1' - largest selling single two-wheeler model - "Hero Honda Passport Programme" - CRM Programme launched 2001 - New motorcycle model - "Passion" introduced - One million production in one single year - New motorcycle model - "Joy" introduced - 5,000,000th motorcycle produced 2002 - New motorcycle model - "Dawn" introduced - New motorcycle model - "Ambition" introduced - Appointed Virender Sehwag, Mohammad Kaif, Yuvraj Singh, Harbhajan Singh and Zaheer Khan as Brand Ambassadors 2003 - Becomes the first Indian Company to cross the cumulative 7 million sales mark - Splendor has emerged as the World's largest selling model for the third calendar year in a row (2000, 2001, 2002) - New motorcycle model - "CD Dawn" introduced - New motorcycle model - "Splendor +" introduced - New motorcycle model - "Passion Plus" introduced - New motorcycle model - "Karizma" introduced Page 33 Garden City College of Science & Management Studies
  • 34. 2004 - New motorcycle model - "Ambition 135" introduced - Hero Honda became the World No. 1 Company for the third consecutive year. - Crossed sales of over 2 million units in a single year, a global record. - Splendor - World's largest selling motorcycle crossed the 5 million mark - New motorcycle model - "CBZ*" introduced - Joint Technical Agreement renewed - Total sales crossed a record of 10 million motorcycles 2005 - Hero Honda is the World No. 1 for the 4th year in a row - New motorcycle model - "Super Splendor" introduced - New motorcycle model - "CD Deluxe" introduced - New motorcycle model - "Glamour" introduced - New motorcycle model - "Achiever" introduced - First Scooter model from Hero Honda - "Pleasure" introduced 2006 - Hero Honda is the World No. 1 for the 5th year in a row - 15 million production milestone achieved 2007 - Hero Honda is the World No. 1 for the 6th year in a row - New 'Splendor NXG' launched - New 'CD Deluxe' launched - New 'Passion Plus' launched Page 34 Garden City College of Science & Management Studies
  • 35. - New motorcycle model 'Hunk' launched - 20 million production milestone achieved 2008 - Hero Honda Haridwar Plant inauguration - New 'Pleasure' launched - Splendor NXG lauched with power start feature - New motorcycle model 'Passion Pro' launched - New 'CBZ Xtreme' launched - 25 million production milestone achieved - CD Deluxe lauched with power start feature - New 'Glamour' launched - New 'Glamour Fi' launched 2009 - Hero Honda GoodLife Program launched Hunk' (Limited Edition) launched - Splendor completed 11 million production landmark - New motorcycle model 'Karizma - ZMR' launched - Silver jubilee celebrations 2010 - New model Splendor Pro launched - Launch of new Super Splendor and New Hunk 2011 - New licensing arrangement signed between Hero and Honda (Hero Honda is renamed as Hero) Page 35 Garden City College of Science & Management Studies
  • 36. - Launch of new refreshed versions of Glamour, Glamour Fi, CBZ Xtreme, Karizma - Crosses the landmark figure of 5 million cumulative sales in a single year 2012 - 45% market share in the domestic two-wheeler market - 56% market share in the domestic motorcycle market - Declared a dividend of 2,250% in 2011-12, i.e. 45 per equity share of the face value of 2 per share Awards & Recognitions on 2011 Two-wheeler Manufacturer of the Year award by Bike India magazine. Adjudged the "Bike Manufacturer of the Year" at the Economic Times ZigWheels Car and Bike Awards. CNBC Awaaz - Storyboard special commendation for "Effective rebranding of a new corporate entity" by CNBC Awaaz Consumer Awards "Most Recommended Two-Wheeler Brand of the Year" award by CNBC Awaaz Consumer Awards Colloquy Loyalty Awards "Innovation in Loyalty Marketing International 2011" for Hero Good Life Page 36 Garden City College of Science & Management Studies
  • 37. "Best Activity Generating Short or Long-Term Brand Loyalty" by the Promotion Marketing Award of Asia Order of Merit for Hero Good Life Ranked No 1 brand in the Auto (Two-Wheelers) category in the Brand Equity "Most Trusted Brand" 2011 serve Sales figures OEM F12 F11 Growth (%) 1 Hero Moto corp 6235205 5402444 15.41 2 Bajaj 3834405 3387043 13.21 3 TVS 2158375 2006808 7.55 4 Honda (scooters) 1240771 907832 36.67 Honda (Motorcycle) 866457 748895 15.70 Hero – HMSI 2107228 1656727 27.19 5 Yamaha 484891 373100 29.96 6 Suzuki 340893 282156 20.82 7 Mahindra 134750 163935 -17.80 Source: - www.motorbeam.com Page 37 Garden City College of Science & Management Studies
  • 38. • Profile of target customer Hero MotoCorp basically targets the every each and segments of the market. So there are some products like splendor, CD- dawn (rs40000-50000) they made for lower segment of the market and glamour, passion, CBZ, karizma (rs above 50000) for the upper segment of the market. And now they are trying to target the young people of the market. India‘s Hero MotoCorp, the world‘s largest producer of motorcycles and scooters, has announced its intention to expand globally, with plans to sell vehicles on three continents and nearly double its unit sales within five years. The company, whose family shareholders bought out its former partner Honda Motor this year, said it would invest about $1bn to expand internationally in south-east Asia, Africa, and Central and Latin America. • Customer Relationship Activity For making a better relationship with customer they always use genuine parts in their product. And after selling they have the services and maintenances. Their constant endeavor is to support the company's mandate of providing highest level of customer satisfaction by taking good care of customer‘s two-wheeler service and maintenance through their vast network of more than 2100 committed dealers and service outlets spread across the country. Apart from that hero motocorp focused on cleanliness and other aesthetics of the service stations and add such air conditioned waiting area, internet surfing, coffee shops etc to enhance the in house experience of the customers at those ―customer touch point‖. To ensure Page 38 Garden City College of Science & Management Studies
  • 39. that millions of customers in the rural area are not left waiting for adequate service as it is impossible for the company to introduce service station at every nook and corner of the country, mobile service stations are regularly arranged with prior intimation to public about the rout that the mobile workshop would take when passing through that region so that customers can come and get their two wheelers serviced. All these activities are aimed to increase the customer loyalty and thus retaining customers. Good life: Customer Loyalty Program Good Life is a Customer Relationship Program introduced a decade ago, which Endeavour‘s to enhance customer satisfaction and initiate increased levels of member engagement. The main objective of this Program is to make our customers our Brand Ambassadors to generate referral sales and boost service visits. The GoodLife Program has enabled the Company build a consolidated base of 10 million plus loyal customers; in the process, a new distribution platform has emerged. GoodLife now contributes a huge 14% to the Company‘s overall sales (purely through referrals), in addition to incremental sales. GoodLife has emerged as the largest Customer Relationship Program in India, witnessing additions of 0.38 million members each month. During the year, the Program‘s member base shot up 16%, with new 4.51 million transactions being undertaken. Besides aiming to increase the number of customers and volume of transactions, the Program seeks to enhance revenue opportunities for dealers as well. Different levels of engagement have been in-built into the Program with the aim of increasing its people engagement initiatives. Some of these are: transaction-based rewards, exclusive event invites, personal accidental Page 39 Garden City College of Science & Management Studies
  • 40. insurance, service continuity bonus, transaction benefits on special occasions (birthdays, anniversaries), quarterly newsletters and interaction through a program website. The Program began with a member transaction booklet, a replica of the Passport Booklet, which helps in engaging with customers. However, the Program has been e-enabled now to improve its geographical reach and efficiency level. It runs on the backbone of a robust and engaging front-end and a sound, solid and technical back-end. The Program includes customized technology, combining a mix of Magnetic Swipe/Bar Code. Personalized Membership Cards are shared with GoodLife members, which are easy to carry, transact and earn/redeem rewards. Online member profiling and real-time customer feedback module (via questionnaires) are some more salient features of the Program. During the year, GoodLife has been the recipient of several accolades and awards on national and international platforms. Some of these were: ‗Order of Merit‘ in PMAA awards 2011 under ‗Best Activity Generating Short or Long Term Brand Loyalty‘ category Colloquy Award under Innovation in Loyalty Marketing (International) category Qualified as ECHO Finalist (5th place) in 2011 DMA International ECHO™ Awards competition Loyalty Award under Auto Sector OPERATION RAMP-UP With demand for bikes recording a stupendous growth of 15% during the year under review, the Company‘s capacities were severely strained. This prompted it to augment its capacity at its three plants – up from 5.4 million units to 6.35 million – during the year. This was made possible through a number of de-bottlenecking measures. For Page 40 Garden City College of Science & Management Studies
  • 41. example, the Company‘s plants were made leaner by outsourcing non-critical processes and operations. Besides this, a number of structural changes and alterations were made in its manufacturing strategy to effectively implement its Sales Plan for 2012-13. Major replacements were also executed in the paint and assembly shop, ensuring little or no shutdown along the assembly line. Apart from the above measures, several innovative technologies were inculcated to reduce operational costs. Some examples of these are: A breakthrough technology for gear rolling was implemented for massproduction Fine blanking, an alternate process of hobbling, was introduced for sprocket components Advanced cam grinding was introduced to increase productivity and control costs The Company‘s oldest plant at Dharuhera was in the limelight for two specific reasons: Wage negotiations were concluded Plant won TPM Excellence Award The Company continues to set new industry benchmarks in the areas of energy conservation and sustainability. Vapour absorption machines and heat recovery units were installed during the year to utilize waste heat from Gas DGs for air-conditioning and pre-heating of hot water generation. Other green initiatives included projects on waste water management, LED lighting and solar power. These cost leadership and Page 41 Garden City College of Science & Management Studies
  • 42. green projects yielded considerable savings to the Company within a short period of time. PORTFOLIO OF PRODUCTS Hero MotoCorp offers wide range of two wheeler products that include motorcycles and scooters, and has set the industry standards across all the market segments. 100cc Bike category SPLENDOR PLUS SPLENDOR NXG SPLENDOR PRO PASSION PRO PASSION XPRO MAESTRO PLEASURE HF DAWN HF DELUXE 125cc Page 42 Garden City College of Science & Management Studies
  • 43. Bike category GLAMOUR SUPER SPLENDOR IGNITOR Glamour PGM FI 150cc Bike category ACHIEVER KARIZMA KARIZMA ZMR IMPULSE HUNK XTREME Page 43 Garden City College of Science & Management Studies
  • 44. Termination of 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 would buy out the 26% stake of the Honda in JV Hero Honda. Under the joint venture Hero Group could not export to international markets (except Sri Lanka) and the termination would mean that Hero Group can now export. Since the beginning, the Hero Group relied on their Japanese partner Honda for the technology in their bikes. So there are concerns that the Hero Group might not be able to sustain the performance of the Joint Venture alone. The Japanese auto major will exit the joint venture through a series of off market transactions by giving the Munjal family—that held a 26% stake in the company— an additional 26%. Honda, which also has an independent fully owned two wheeler subsidiary—Honda Motorcycle and Scooter India (HMSI)—will exit Hero Honda at a discount and get over $1 billion for its stake. The discount will be between 30% and 50% to the current value of Honda's stake as per the price of the stock after the market closed on Wednesday. The rising differences between the two partners gradually emerged as an irritant. Differences had been brewing for a few years before the split over a variety of issues, ranging from Honda's reluctance to fully and freely share technology with Hero (despite a 10-year technology tie-up that expires in 2014) as well as Indian partner's uneasiness over high royalty payouts to the Japanese company. Another major irritant for Honda was the refusal Page 44 Garden City College of Science & Management Studies
  • 45. of Hero Honda (mainly managed by the Munjal family) to merge the company's spare parts business with Honda's new fully owned subsidiary Honda Motorcycle and Scooter India (HMSI). As per the arrangement, it will be a two-leg deal. In the first part, the Munjal family, led by Brijmohan Lal Munjal group, will form an overseas-incorporated special purpose vehicle (SPV) to buy out Honda's entire stake, which will be backed by bridge loans. This SPV would eventually be thrown open for private equity participation and those in the fray include Warburg Pincus, Kohlberg Kravis Roberts (KKR), TPG, Bain Capital, and Carlyle Group. Honda will continue to provide technology to Hero Honda motorbikes until 2014 for existing as well as future models. Page 45 Garden City College of Science & Management Studies
  • 46. 4. DATA ANALYSIS AND INTEPRETATION Table- 4.1 Showing type of Hero two wheeler models owned Num Name of Hero two wheeler No. of respondents 1 SPLENDOR PLUS 25 2 SPLENDOR PRO 10 3 PASSION PRO 30 4 HUNK 2 5 GLAMOUR 3 6 KARIZMA ZMR 2 7 KARIZMA 1 8 MAESTRO 3 9 SUPER SPLENDOR 2 10 SPLENDOR NXG 5 11 PLEASURE 6 12 HF DAWN 1 13 PASSION XPRO 9 14 IMPULSE 1 Total 100 Inference:- From the above table it is inferred that, 30% of respondents held Passion Pro and 25% of respondents held Splendor Plus, Splendor Pro 10%, and Passion Xpro 9%. The remaining two wheelers are very less in %. The table is inferred that some of the models are very less in market. This formed the basis of the study. Page 46 Garden City College of Science & Management Studies
  • 47. Chart 4.1 Showing type of Hero two wheeler models owned in % IMPULSE 1% HF DAWN 1% PASSION XPRO 9% PLEASURE 6% SPLENDOR PLUS 25% SUPER SPLENDOR SPLENDOR NXG 5% 2% MAESTRO KARIZMA 3% 1% SPLENDOR PRO 10% KARIZMA ZMR 2% GLAMOUR 3% HUNK 2% PASSION PRO 30% Page 47 Garden City College of Science & Management Studies
  • 48. Table- 4.2 showing the source of information about Hero Sources No. of respondents News paper ads 9 Television ads 57 Roadside Boarding‘s 14 Others 20 Total 100 Inference: From the above table it is inferred that people are getting information about hero two wheelers from television ads, more than 50% of people are watching TV ads. Roadside Boarding & news paper are less in performance; other sources contain motor shows, internet ads. Page 48 Garden City College of Science & Management Studies
  • 49. Chart 4.2 showing the source of information about Hero News paper ads Television ads Roadside Boarding’s others 9% 20% 14% 57% Page 49 Garden City College of Science & Management Studies
  • 50. Table- 4.3 showing the influenced people for buying Hero Influenced people No. of respondents Family 34 Myself 16 Friend 35 Sales representative 15 Total 100 Inference: From the above table it is observed that, the buying behavior people mostly influenced by family and friends the other factor is have less level of influence. The people how using bike mostly youth & middle class people and they are influenced by their friends and family respectively. The above table showing that 35% of people influenced by their friends 34% people through family 16% people is buying on their need. 15% because of sales representative Page 50 Garden City College of Science & Management Studies
  • 51. Chart 4.3 showing the number people influenced for buying 40 35 30 25 20 15 10 5 0 family Myself friend Sales representative Page 51 Garden City College of Science & Management Studies
  • 52. Table- 4.4 showing the preference of capacity & colour Capacity No. of respondents Preference of color No. of respondents 100cc 17 Blue 23 125cc 28 Red 24 150cc 35 Black 39 200cc 20 Other 14 Total 100 Total 100 Inference: From the above table it is observed that, the bike ‗cc‘ preference is deferent customer to customer but the 35% people like 150cc bike and 28% like 125cc, 200cc bike 20% others 100cc.e preference of color ‗BLACK‘ is rating at near to 40% of people after that 24% like Red color 23% Blue also . Other color like white getting less importance in selection Page 52 Garden City College of Science & Management Studies
  • 53. Chart 4.4(1) showing the preference of capacity 40 35 30 25 20 15 10 5 0 100 cc 125cc 150cc 200cc Chart 4.4(2) showing the preference of colour 45 40 35 30 25 20 15 10 5 0 Blue Red Black Other Page 53 Garden City College of Science & Management Studies
  • 54. Table- 4.5 showing the responses on Vehicle delivery time respondents No. of respondents Yes (on time) 78 NO (not on time) 22 Total 100 Inference: From the above table it is observed that, 78% of respondents got delivery of their vehicle on time 22% says that the delivery of vehicle got delay After enquire about the 22% it‘s showing that they asked for very demand vehicle like PASSION & SPLENDOR bikes and some of them ask new bike like Maestro Page 54 Garden City College of Science & Management Studies
  • 55. Chart 4.5 showing the responses on Vehicle delivery time No 22% Yes 78% Page 55 Garden City College of Science & Management Studies
  • 56. Table- 4.6 showing availability test drive during on showroom visit Respondents No. of respondents Yes 92 NO 8 Total 100 Inference: From the above table it is observed that, 92% of respondents got test drive during their showroom visit, other 8% didn‘t got because of two reason some of them ask the bike that not showcase in showrooms and some of them gone small showrooms Page 56 Garden City College of Science & Management Studies
  • 57. Chart 4.6 showing availability test drive during on showroom visit Yes No Page 57 Garden City College of Science & Management Studies
  • 58. Table- 4.7 showing the reliability of Vehicle Respondents No. of respondents Excellent 16 Good 23 Moderate 21 Satisfactory 39 unsatisfactory 1 Total 100 Inference: The above table shows how the customer rate the reliability of Hero bike, it is observed that 16% of them telling its excellent 23% respond that its good and 21% have moderate opinion 39% is satisfied with the performance and 1 of the respondent is not satisfied with the Hero bike. Page 58 Garden City College of Science & Management Studies
  • 59. Chart 4.7 showing the reliability of Vehicle 45 40 35 30 25 Excellent Good Moderate 20 15 Satisfactory unsatisfactory 10 5 0 Page 59 Garden City College of Science & Management Studies
  • 60. Table- 4.8 showing level of Service Satisfaction Respondents No. of respondents Completely satisfied 34 satisfied 39 dissatisfied 12 Not at all satisfied 15 Total 100 Inference:The above table shows the satisfaction towards Hero bike on the time of Service 34% of respondents are completely satisfied with the service provide by the company and 39% customers are satisfied and 12% dissatisfied, 15% is not at all satisfied with the service provide by the company the following chart shows it more clearly Page 60 Garden City College of Science & Management Studies
  • 61. Chart 4.8 showing level of Service Satisfaction 40 35 Completely satisfied 30 25 20 satisfied dissatisfied 15 10 Not at all satisfied 5 0 Page 61 Garden City College of Science & Management Studies
  • 62. Table- 4.9 showing the brand name influence in purchase Respondents No. of respondents Percentage Yes 74 74% NO 26 26% Total 100 100% Inference:From the above table it is observed that, the customers are influenced by the brand name ―HERO MOTOCROP‖ 74% of respondents are influence by the brand name and 26% are not the brand ―HERO‖ is the most selling bike in India and Its is the brand that selling more bike in the world also Page 62 Garden City College of Science & Management Studies
  • 63. Chart 4.9 showing the brand name influence in purchase No 26% Yes 74% Page 63 Garden City College of Science & Management Studies
  • 64. Table- 4.10 showing the reason for preference Preference No. Of Respondents Percentage Quality 25 25% Price 20 20% Brand Image 24 24% Fuel efficiency 31 31% TOTAL 100 100% INTERPRETATION: From the above table we can infer that 25% of the respondents gave preference to quality, 20% of respondents gave preference to price, 24% of respondents gave preference to brand image and 31% of the respondents gave preference to fuel efficiency. From the above findings, we can analyze that 69% of respondents were more quality conscious and only 31% respondents gave preference to price and fuel efficiency. The reasons are even though people are price conscious to some extent; the consumers are more quality conscious than price conscious because they have enough income to buy twowheeler. Page 64 Garden City College of Science & Management Studies
  • 65. Chart 4.10 showing the reason for preference 35 30 25 20 15 10 5 0 Quality Price Brand Image Fuel efficiency Page 65 Garden City College of Science & Management Studies
  • 66. Table - 4.11 showing how long customer using hero two wheelers Time period No. Of Respondents Less than 6 month 24 6-9 month 23 9 -1 year 32 More than 1 year 21 TOTAL 100 Inference:From the above table we can infer that how long the customer holds the bike the split between Hero and Honda happen less than 3 year back and this table help to know the using period of customer 79% of people that in the research is brought their bike in the last year and 21% is using the bike more than 1 year. Page 66 Garden City College of Science & Management Studies
  • 67. Chart 4.11 showing how long customer using hero two wheelers 0 5 10 More than 1 year 15 9 -1 year 20 6-9 month 25 30 35 Less than 6 month Page 67 Garden City College of Science & Management Studies
  • 68. Table - 4.12 showing the area that Customer demanding to improve in service Area No. Of Respondents in % Service in time 31 Reliable service 16 Well trained mechanics 27 less labor charge 26 TOTAL 100 Inference:From the above table it is observed that, what is customer need that Hero wants to improve, 31% need improvement in service in time, 16% in reliable service, and 27% need well trained mechanics, 26% less labor charge. Page 68 Garden City College of Science & Management Studies
  • 69. Chart 4.12 showing the area that Customer demanding to improve in service Chart Title 35 30 25 Service in time 20 Reliable service 15 Well trained mechanics less labor charge 10 5 0 Category 1 Page 69 Garden City College of Science & Management Studies
  • 70. Table - 4.13 showing the problems face at the time of service Responses No. Of Respondents in % High price spare parts 29 Low quality of spare parts 14 Delay in service 29 No problems 28 TOTAL 100 Inference:From the above table it is observed that, the customers are facing deferent problems at the time of service, 29% face high price of spare parts, 14% face low quality of spare parts, 29% face delay in service, 28% respondents they didn‘t face any problem. Page 70 Garden City College of Science & Management Studies
  • 71. Chart 4.13 showing the problems face at the time of service Problems face at the time of service No problems 28% Delay in service 29% High price spare parts 29% Low quality of spare parts 14% Page 71 Garden City College of Science & Management Studies
  • 72. Table - 4.14 showing the rating of Service Performance of Hero Motors Response NO. OF RESPONDENTS PERCENTAGE Very good 34 34% Good 20 20% Average 32 32% Bad 8 8% Very Bad 6 6% TOTAL 100 100% Inference:From the above table it is observed that, 34% of customer says service performance gives by Hero MotoCorp Ltd, Is very good and 20% says it‘s good , 32% says the service is average,8 respondents says the service is bad and 6% says it‘s very bad, To overall we can conclude that more than 85% is satisfied with the service provide by Hero MotoCorp Ltd. Page 72 Garden City College of Science & Management Studies
  • 73. Chart 4.14 showing the rating of Service Performance of Hero Motors Chart Title 40 35 30 25 Very good Good 20 Average Bad 15 Very Bad 10 5 0 Response Page 73 Garden City College of Science & Management Studies
  • 74. Table - 4.15 showing the good thing associate with your brand Response NO. OF RESPONDENTS PERCENTAGE Solid engineering 16 16% Innovative features 25 25% Value of money 21 21% High and consistent mileage 29 29% Better after sale service 9 9% TOTAL 100 100% Inference:From the above table it is observed that, what the customer feel that make Hero deferent from other bike, 16% like the solid engineering, 25% says innovative features is good about Hero MotoCorp , 21% respond that Hero giving the value of money, 29% brought because of consistent mileage of Hero,9% like after sale service of Hero MotoCorp Ltd. Page 74 Garden City College of Science & Management Studies
  • 75. Chart 4.15 showing the good thing associate with your brand good thing associate with your brand Solid engineering Innovative features Value of money High and consistent mileage Better after sale service 9% 16% 29% 25% 21% Page 75 Garden City College of Science & Management Studies
  • 76. Table - 4.16 showing the friend recommendation for Hero bikes Respondents No. of respondents Percentage Yes 82 82% NO 18 18% Total 100 100% Inference:From the above table it is observed that, Out of the respondents 82% people will recommend Hero bike to their friends it‘s showing the 82% of customer are satisfied with their Hero bike, and the remaining 18 % because of some reason not recommending Hero bike to their friends Page 76 Garden City College of Science & Management Studies
  • 77. Chart 4.16 showing that recommendation to Hero bikes No 18% Yes 82% Page 77 Garden City College of Science & Management Studies
  • 78. SUMMARY OF FINDINGS 1. The Hero MotoCorp is leading the market. The difference is too big to cope up with, for any manufacturer in short span. With proven products and many people having faith in brand, it is quite a difficult task for others to take the Hero‘s number one position. 2. Hero MotoCorp India‘s no. 1 two wheeler companies have posted growth of 11.28% in the month of May 2012 compared to May 2011. 3. Ability to understand customer‘s needs and wants, maintenance cost is low. 4. Passion Pro, Splendor Plus, are the two models that Hero MotoCorp selling a big number 5. The TV promotions are more influence the customer behavior of two wheeler sector. 6. The purchase desiccations of consumers are influence by friends and family. 7. Blue, Red, Black color bike with 150 cc to 200cc is fast moving. 8. Most of the despondences are agree that the bikes are delivering proper time. 9. The service provide by Hero MotoCorp is satisfied by more than 70% of customers. 10. Brand name of Hero is still good in market after split with Honda, 74% of people like the brand ―HERO" 11. Quality, price, Brand image, Fuel efficiency is getting equal importance in satisfaction 12. The research showing that consumer want to get more service satisfaction. 13. 82% of the customer likes to recommend Hero two wheeler to their friends, its shows they are satisfied with the bike. Page 78 Garden City College of Science & Management Studies
  • 79. SUGGESTIONS AND RECOMMENDATIONS It is very hard to hold the pulse of a customer in the market. Customer‘s satisfaction is different for different people at different situations; Majority of the respondents were still unaware about different versions of Hero bikes. Therefore I suggest the company personals should take initiative to create awareness about these versions. Few of the customers expressed concern over frequency of the maintenance & service problems faced by their vehicle and expressed ‗high satisfaction‘ over it. Therefore, I suggest them to re look at the vehicle & re-develop in order to stop the frequency of these problems. Hero MotoCorp want to give more importance in there service part its include timely service, and quality of service Hero want to develop more promotion for there some models like sports bike and gear less scooter Hero bikes want to increase their export market Hero MotoCorp Ltd should try to give more advertisements in news paper, bill boards in that area to enable easy recall of the people for Hero MotoCorp Ltd. Page 79 Garden City College of Science & Management Studies
  • 80. CONCLUSION Customer satisfaction is a marketing tool and a definite value added benefit. It is often perceived by customers as important as the primary product or service your organization offers. For making a better relationship with customer they always use genuine parts in their product. And after selling they have the services and maintenances. Their constant endeavor is to support the company's mandate of providing highest level of customer satisfaction by taking good care of customer‘s two-wheeler service and maintenance through their vast network of more than 2100 committed dealers and service outlets spread across the country. Apart from that hero MotoCorp Ltd focused on cleanliness and other aesthetics of the service stations and add such air conditioned waiting area, internet surfing, coffee shops etc to enhance the in house experience of the customers at those ―customer touch point‖. To ensure that millions of customers in the rural area are not left waiting for adequate service as it is impossible for the company to introduce service station at every nook and corner of the country, mobile service stations are regularly arranged with prior intimation to public about the rout that the mobile workshop would take when passing through that region so that customers can come and get their two wheelers serviced. All these activities are aimed to increase the customer loyalty and thus retaining customers. Page 80 Garden City College of Science & Management Studies

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