Customized Bikes in India


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Customized Bikes in India

  1. 1. THUNDER-HOC Submitted by: S.P Manish Lokesh Radhey1|P ag e
  2. 2. ABSTRACTThe project report is made after doing an in depth market research of secondary & primarydata. On the basis of my research I have made the report on ‘Customized Choppers’. Ivisited the competitors and some local shops which provide modification. It helped me inunderstanding the concept well. I have decided upon the target segment on which we have toconcentrate after analyzing the data. Then the strategies were decided upon for selling theproduct.2|P ag e
  3. 3. CONTENTSINTRODUCTION TO SECTOR………….……………………………………………….4COMPETITOR ANALYSIS........................................................................................…...11CONCEPT DEVELOPMENT…………………………………………………………….15PLAN FOR CONCEPT TESTING………………………………………………………..19CONCLUSION …………………………………………………………………………...22REFERENCES .…………………………………………………………………………...233|P ag e
  4. 4. INTRODUCTION TO THE SECTORIn the last five to six years, in India the two-wheeler market has witnessed a marked shifttowards motorcycles at the expense of scooters. In the urban areas, consumers have come toprefer sturdier bikes to show aggression, fearlessness and courage; a passion to live life onthe edge, to stretch oneself and emerge a winner in any challenge one faces. In the processthe share of motorcycle majority of Indians, especially the youngsters prefer motorbikesrather than cars. Capturing a large share in the two-wheeler industry, bikes and scooters covera major segment. Bikes are considered to be the favourite among the youth generation, asthey help in easy commutation. The Indian two-wheelers industry can be broadly classifiedinto three major segments scooters, motorcycles and mopeds. But now a day, new culture ofcustomized bikes is increasing gradually in urban area of India or in Hyderabad. Hyderabadis an organized market but it’s highly fragmented as far as the suppliers are concerned.Customized bike has been introduced to the market as a tool for passion in the convenientway. Customization of bike is considered as a good way to decorate and designed in a way togive alternative to super bikes Customized bikes designed to allow people to feel comfortwhile they drive on road. There are many types or way of customization now. However,improvements are made from time to time to fix the disadvantages of the previous design.The current trend in the Indian two wheeler segment is on an upward trend as shown by thefigures given in the table below. The growth in the year 2011-12 compared to the previousfinancial year has been 17.5% in this segment.4|P ag e
  5. 5. The fact that Indian population mix is dominated by the youth, that is around 60% of thepopulation of the country is between age groups 15-39 in the year 2011 and it is expected toreach 70% by 2020. Between >15-59 + 60 Year Below 5 years Between 0-15 years years 1991 12.80 37.76 55.58 6.67 2001 10.70 34.33 58.70 6.97 2011 10.10 28.48 63.38 8.14 2016 9.7 27.73 63.33 8.94Income level and consumption has increased significantly in India. The penetration of theIndian bike segment in the metros is 45% and in the rural segment it is 12%. The market forbike at 11 million in rural and 4.4 million in rural shows great untapped market where wefind great opportunity in 1% of the premium customization bike segment that we intend totarget.The financing/banking has also eased since last decade to aid the increase in purchasingcapacity of people. The Bike industry in India is growing at CAGR OF 17.4%. The marketforecast for 2015 in bike sales is $10 billion. Therefore with the growing awareness andincome level people tend to buy goods to suit their preferences with an emphasis onpersonalized products and services.5|P ag e
  6. 6. OUR COMPANYCompany: Thunder-HocSignifying the strength of a thunder clap and the sleek body of a Hawk (chopped down toHoc). The name signifies strength and extraordinary features that the product (CustomizedChopper Bike) would embrace. The hyphen (-) in between representing the imminence ofrelationship that: We value our customer!Tagline: “Chop it, build it, own it!”6|P ag e
  7. 7. As the product is offering a uniqueness of its own, the tagline “Chop it! Build it! Own it!”signifies the exclusivity while offering customers, the power and right to build and own whatthey deserve!Logo:The logo with circles and shades of tattoos represents: the inventive and creativity that webelieve our team possess. With the intent of providing a strong bonding and offer ourcustomers with the same innovative and creative designs in future as well!INTRODUCTION TO THE SECTOR (Choppers)MACRO ANALYSIS OF HYDERABADDemographic- Looking at the demographic of the city. The population of Hyderabad is6,80,9,970. The city has urban population of 7,749,334 .The city is spread in an area of 650sq. Kilometres .It is 536 metres above the sea level. The climate of the city is tropical wet anddry climate.7|P ag e
  8. 8. Economic- Hyderabad is commercial and official administrative capital of A.P. The city has90 % of its people working in service industry. It is a hub to I.T. mega giants of world such asMicrosoft and Google and in houses 1300 I.T. firms. Also the city is home of variousPharmaceutical firms such as Dr. Reddys lab etc. Last year an estimated INR 36000 Croresof exports of software products was done from the city. Pharmacy exports were $3.1 2007-08, according to economic times the growth in real estate business was $20.7 billion.The places to look for in Hyderabad are historical places like Charminar, Golconda Fort,Salarjung Museum, Chowmalla palace, film city, sports complexes. Tourism accounts foranother major contribution for growth of people in the city.Natural Environment- The city of Hyderabad has been oldest centre for trade for pearls andDiamond in the world.Technological- Hyderabad since the beginning has seen several research and developmentinstitution. The city has institutions like IIIT, IIT, BITS, IMT, NIFT and NIPER. Thegovernment of A.P. has introduced new city called Hi tech city especially for IT Firms. I-Max 3D is one of the largest 3D cinema in the world. The metro development is revolving atfull swing.Culture- Hyderabad has a linguistic combustion of north and south Indian traditions. InHyderabad, we can find Telgu and Urdu speaking people commonly and now English too inHi tech city. Sankranti, Bomalu and Eid are the major festivals celebrated in the city.8|P ag e
  9. 9. PESTELECONOMICIn recent years due to economic downtown the spending power of the Indian consumers hasgone down considerably and so Hyderabad being one of the IT hubs is also greatly affectedby it. As our aim is to concentrate on age group of 25-40 so this might affect our targetcustomers spending behaviour.SOCIALAs India has a huge population of Youth. Statistics like 72 % of Indias population is belowthe age of 40, 47% of Indians is under the age of 20 and 10% of the world population is anIndian under 25 is a common assessment of India by all countries now. This predominance ofyouth in the population is expected to last until 2050. The "BRIC Report" by Goldman Sachspredicts that the economies of Brazil, Russia, India and China would become larger forcesover the next 50 years and mentions that Indias economy could be larger than Japans by2032, that the combined GDP of the BRIC countries would cross that of the G6 by 2039 andthat India could show the fastest growth in the next 30 years. The statistics thus help us insetting up our business plan.TECHNOLOGICALWhen it comes to customized bikes the numbers of players are handful and the only way wecan differentiate is through the quality product we will provide. As our research, inHyderabad most of the people are into modification and beautification of the bikes but againhandful of people are into the full customization of bike that is starting from the scratch butit’s not their core competency. We also found that the technology costs a lot and the availabletechnology is limited. INCLUDE PRIMARY DATA AND SOME TECHNOLOGIESENVIRONMENTALCO2 emissionIndia’s auto sector accounts for about 18 per cent of the total CO 2 emissions in the country.Relative CO2 emissions from transport have risen rapidly in recent years, but like the EU,currently there are no standards for CO2 emission limits for pollution from vehicles.9|P ag e
  10. 10. MICROANALYSIS OF HYDERABADEntry: It is easy to enter the market as there are no big players and the market for the productis unorganized where a huge opportunities lies.Competitors Thunder Hoc has three major competitors are Bufana Motors, Mild to WildCustoms and Ali Evolution Choppers who mainly focuses on the schools colleges andcorporate houses. Ali Evolution Choppers is the only firm which targets everyone frommodification to customization.Suppliers: - As mentioned in earlier reports the Thunder-Hoc mainly focuses on choppers,hence only acquire and use standard and certified motor parts for our customers. We wouldimport machinery for body design from Thailand, Singapore and United States of America.Major engine suppliers are from Delhi and Chennai region and other bike parts are sourcefrom Punjab. Suppliers around the Hyderabad region are highly fragmented.Threat of substitutes: The product we are offering is new as we intend to not only customizebikes but also build it from scratch for the customers, however threat exist due to entry ofplayers like Harley Davidson and SsangYong among other in the cruiser segment. But for thechopper lover the threat of substitute is not significant.Exit: The modification business is not capital extensive but customization is and thereforeexit cost is huge comparatively in Chopper customization business.10 | P a g e
  11. 11. Competitive AnalysisHyderabad is known as the IT hub of India. Also it’s one of the most happening places and isinnovative when it comes to technology. In 2011, Hyderabad had population of 4,010,238 ofwhich male and female were 2,064,359 and 1,945,879 respectively. There was change of 4.71percent in the population compared to population as per 2001. The GDP of the city grew at9.22% while the per capita income is Rs. 60458.The sales figures for the year are mentioned below for the city Two- Whe el er s2011November 1,163,2942010DecemberNovemberOctober 1,128,000SeptemberThis provides a large amount of market to tap by the two wheeler segment in the city. As weknow that Hyderabad is having various great talents with required tech skills whichimprovising the Indian custom concepts. Custom Motorcycles wasn’t unheard since longyouth started watching much Hollywood movies and dreaming to own a Harley Davidsonsince then. At present Discovery Turbo is offering a great show on custom Motorcycles, Carsand everything. We have a chance to see how American Choppers starts their projects andhow the execute them.11 | P a g e
  12. 12. COMPETITOR ANALYSIS1) Mild 2 Wild CustomsMild 2 Wild focuses on full customization. They build top end choppers.Products offered by them are as follows-: a. Performance parts like Holley NOS, Vortech, Superchips, Hypertech, and AFE. b. Suspension like Dotesh, KYB, Belltech and BDS suspension. c. Graphics like Sharp line, illusion graphics, speed stripes and Pro strips d. Rims like Motegi, lexani, centre line and Giovanna e. Tires like Bridgestone, MRF, Fuzion tires, Uniroyal, Falken tires.Target Market: Most of their customer falls under the age group of 22-50 years.Considering a few other factors: 1. Awareness. 2. Spending Power. 3. Passion towards Choppers.Marketing Mix Strategies: It consists of 4Ps: Product, Price, Promotion and Place. It helpsto produce the desired response in the target market. The following is the Strategy: a. Product offered is Customized Choppers. b. Price for Customization ranges from Rs.20000-200000 c. Promotion is done through online and distributing pamphlets2) Bufana MotorsThey build Choppers from the scratch according to customer needs.Products offered by them are as follows-: a. Performance parts like NX Nitrous, K&N, Holley NOS, Vortech, , Hypertech, b. Suspension like Air Ride, Koni, Dotesh, Fabtech and BDS suspension. c. Graphics like Sharp line, Illusion graphics, speed stripes and Pro stripsTarget Market: Most of their customer falls under the age group of 22-50.Marketing Mix Strategies: It consists of 4Ps: Product, Price, Promotion and Place. It helpsto produce the desired response in the target market. The following is there Strategy:12 | P a g e
  13. 13. Product offered by them is Customised ChoppersPrice for Customisation ranges from Rs.15000-150000Promotion is done through online social group, Bikers group.3) Ali Evolution ChoppersIt focuses on different type of customisation. They build medium type choppers.Products offered by them are as follows-: a. Performance parts like Holley NOS, Vortech, Hypertech. b. Suspension like Belltech, Dotesh, KYB, and BDS suspension. c. Graphics like Sharpline, illusion graphics, speed stripes. d. Rims like Budnik, Motegi, lexani, Foose.Target Market: Considering the product and targeting the niche segment, most of ourcustomers would fall under the age group of 18-30 years. Considering a few other factors: 1. Awareness. 2. Spending Power.Marketing Mix Strategies: It consists of 4Ps: Product, Price, Promotion and Place. It helpsto produce the desired response in the target market. The following is there Strategy:Product offered by them is Customised ChoppersPrice for Customisation ranges from Rs.10000-60000DCWe got in touch with the sales person at DC design in Hyderabad she provided us with someinformation but it was not relevant for our concept. What we concluded from it is that peoplein Hyderabad are willing to shed money if they get something different and good.13 | P a g e
  14. 14. INTERPRETATION FROM COMPETITORS DATA Age Group 18-22 yrs 23-30 yrs 30-35yrs Above 35yrs Spending Power Upto 10000 10000-40000 40000-100000 Above 10000014 | P a g e
  15. 15. MARKET SEGMENTATION & TARGETTINGTarget market in Hyderabad Basis of segmentation Target Market Gender Males Age >25 Income Upper and middle income group Lifestyle Independent, enthusiastic and passionate Geographic area That is not a constraint15 | P a g e
  16. 16. Concept Development:The two wheeler segment is divided into basically three segments 100 – 150cc, 150 – 250ccand 250cc above. We intend to target above 250cc and therefore targeting a niche segment.We want to position ourselves in high performance and high quality providing good valueproposition to our customers.Consumer needs and specification is taken as the input for development of this concept. Theneed was felt to provide a platform whereby bikers can customize and built their ownchoppers from scratch displaying independence and fulfilment of their desire to build andown.Observing the change in trend among our customers with growing demand for customizationrather than choosing from a set of standard bikes. Reports in the Overdrive and Auto Indiasuggest a growing interest among bike buyers to splurge in customizing their bikes. Thesetrends have been seen especially in modification of Avenger, Enticer and Royal Enfield.Considering the product and targeting the niche segment, most of our customers would fallunder the age group of 25-50 years. Considering a few other factors: • Awareness. • Spending Power. • Passion towards bike (specifically Choppers).Although, we have Harley Davidson which deals in standardized models and quit a fewplayers in customized bikes. We offering “Customized Chopper Bike” and being one of itskinds in the city. This would stand as a “competitive advantage” for the company.Details of product offering:We have identified two broad categories:1. Customizing Existing Bike2. Building Chopper from scratch.The second and the most important component is to deliver impeccable service to the clientswith respect to maintenance and up gradation of the bikes.The choppers would be made available in the following classification:  Traditional Chopper: based on World War II design.  Heavy Falenced Vendor: for the tough and rugged look.  Easy Rider: for the sleek and long power looks.  Custom Design: for the todays era of bike lover who are independent and choosy and wants things their way.Apart from the above categories a host of bike accessories for short and long handle ,boosters, rim and flag plate, v-twine engine etc would be made available to generateadditional and continuous revenue16 | P a g e
  17. 17. Marketing Mix Strategies: It consists of 4Ps: Product, Price, Promotion and Place. It helpsto produce the desired response in the target market. The following is there Strategy:Product:Product offered by them is Customised Choppers which is unique and would cater to theunmet demand of unavailability of product and expertise in this segment.Price:Price for Customization will range from Rs.15000-600000. The price has been kept bearingin mind the niche segment of customers ranging from young students and executives tomiddle aged high income professionalsPromotion:Promotion is done through online social group, Bikers group and sponsorship through bikerally events held in the city.Apart from opening up a store in the heart of the city we are at the verge of building awebsite. Keeping in mind the increasing role of social media, its awareness and being areliable source of information the website itself would include all the relevant informationincluding the customization details and demo customization with few of our basiccustomized design. The website would also help the customers in keeping a track on theirorders and with the facility to make alterations with personalized loginprofile page.While keeping in mind the criticality of the business and its every customer, we have plannedsurveys online, as well as events followed by the taking their feedback of their experience.Taking it further, a team of dedicated staff will be assigned which would look into theconcerns and grievances caused by the internal or external factors, they would also makeeffective strategies to resolve them.As we believe that giving value to customer is our primary concern but it is notaccomplished until it is followed by the customer after sales satisfaction.The plan is also to spread awareness among the target customers by advertising in magazines,television and newspapers prior to the product launch. Followed by an event “Chop yourBike” at In Orbit Mall which would be organized to guide the customers and spreadawareness. Customers would get an exposure of few of our customized models and would befollowed by prior booking benefits. Customers engagement would be encouraged throughonline gaming system on the official website in which customers can actually take a look atthe design while playing around with different bike parts (bike fuel tanks, silencer, fendersboth front and rear, rear and front lamps, rear view mirrors, designs on the body, indicatorsetc.).Considering the time constraint we are planning to develop 3 basic models which would becustomized by the experts in the city including some of the customers, with an appropriate“polling and prize” system. The top 3 selected designs would be displayed in the stores aswell as on website. This would help customers to know the company better, further makingthem feel as if they are part of it. Further alterations to these designs would be an option forcustomers who want something close to the existing designed product. For people who wanttheir product(chopper bike) to be build from the scratch we would define a timeline17 | P a g e
  18. 18. considering the demands of the customers further keeping them updated about the progress atevery stage.Our core competency lies in providing a real graphical visual demo of the customized bikeso that the customers will have a feel of what they are going to ride.PROMOTION AND MEDIA: Customized Bikes market is majorly an unorganized market inIndia but it is known as blooming cluster, so they need to understand the market segmentinterested in customized bikes and target them through promotion and media. According tothe study of market, the most passionate about customized bikes are the teenagers such asage group 18-22(mostly), group 22-40(rank 2), and college students are considered to be themain customers. As it is an unorganized sector companies do not spend much on promotionor media like their popularity is out due to word of mouth, satisfied customers directlyadvertise to their friends, modified bikes parked outside always attracts people. Thecompanies with a brand name in customized bikes segment uses various promotionalstrategies such as social media (Facebook, Twitter, blogs etc.), print media, television,gaming console many other. They use these media techniques to establish their active fanbase to target their audience. These companies keep a low budget for their promotion andmedia advertisement.Promotion Channels  Auto shows  Blogs  Magazines and auto journals  Test drivesWe got in touch with the sales person at DC design in Hyderabad she provided us with someinformation but it was not relevant for our concept. What we concluded from it is that peoplein Hyderabad are willing to shed money if they get something different and good.18 | P a g e
  19. 19. PLACE:LocationWe are setting up our first customized bike center at Hyderabad, the city being the secondamong doing business by “Doing business 2009 report”, in population standing at the 6 thposition and with its IT sector touching peaks. The city is known as a Cyber City of Indiawith more than 1300 reputed companies operating. We thus plan to launch our first Thunder-Hoc store in High-tech city.19 | P a g e
  20. 20. PLAN FOR CONCEPT TESTING 1. To study the Characteristics and features of Choppers. 2. To study this sector which is a powerful & growing sector?OUR OBJECTIVE 1. How we got an idea about the choppers? 2. How does chopper bring value to an entrepreneur’s Business? 3. How does chopper benefit or add value to the customer? 4. What are the problems faced from government policies? 5. What is the demand of this segment? 6. What is the cash involved in each deal? How we got an idea about the choppers? a. Just to do something different! b. Creative ideas that would fetch results! c. Buying branded choppers are expensive and people cannot afford it. d. By venturing into these kind of creative areas they would also earn profits e. We will be able to sell the imported spare parts.How does chopper bring value to an entrepreneur’s Business? a. The segment we are targeting is a to a very great extent unexplored hence we have a advantage of first mover b. Interested customers are ready to pay the premiumHow does chopper benefit or add value to the customer? a. It’s a status symbol b. Feeling of freedom c. Dream coming true for many passionate peopleBuying branded choppers are expensive and people cannot afford it.The choppers from Harley Davidson and other foreign players are very expensive and thusthere is a need to fill up the gap between the bikes and high priced choppers.What are the problems faced from government policies? a. Government has a number of rules on two wheelers b. Traffic policemen catches - Insurance, Registration Copy, and Pollution Check Chopper chances are considerably high. Noisy Silencers and the fancy looks attracts the Traffic policemen c. According to our survey 60% of the Entrepreneurs say that government policies have impact on their business. d. Bike’s owner needs to go to RTO to get the bike endorsed from the Chief Inspector. They will check the bikes Chassis number and engine number for verification. The Endorsement20 | P a g e
  21. 21. charges is Rupees 1500 per bike. Fact - None of the Police inspector accepts modified bike and choppers is safe to ride and often they reject them. No proper rules set by - government for modified bikes and choppers and so the owner of the bikes, ride the bikes without getting the endorsement.What is the demand of this segment? a. According to our survey the demand of choppers is high but actual buyers or capability of people willing to buy it is comparatively less. Disposable Income 25000-50000 upto 10000 10000-25000 50000-1 Lac 1 Lac & aboveHOW WE TESTED ITPRIMARY DATA ANALYSIS:We collected the primary data by conducting the research through questionnaires by goingto various places in Hyderabad like GVK Mall, Inorbit Mall, City Centre and Koti which is thehub for modifying of bikes.An online survey was used to conduct the primary data analysis.FEW Questions in Questionnaire: 1. Would you like to modify or customize the bike? 2. How much would you like to spend for a chopper? 3. What motivates you for buying a chopper? 4. How long will you wait after ordering a chopper?21 | P a g e
  22. 22. SECONDARY DATA ANALYSIS:Secondary Data: We collected data through online surveys, censuses, surveys,organizational records and data collected through qualitative methodologies or qualitativeresearch.Our main target customers are young professionals from age group 25-40. Our targetcustomers have high disposable income due to handsome salaries paid to them and so thinkpeople belonging to this category are capable of spending on choppers. The city likeHyderabad has majority of the population falling in this category thereby showing a hugemarket. A detailed analysis of the target customer profile is as follows:As per the Secondary data available:  Income group we are targeting is above Rs 50000 per month for choppers and above 25000 for customization which is nearly 20% of the population.  The population in the city includes 49% of the people having a family size of 3-4 members, and 15-16% having 2 members. Thus, we would expect a substantial proportion of population (app. 60%) to be our target market.  59.2% of the population falls between the age brackets of 19-35 years.  People employed in the private and public sector are around 44%. Hyderabad being a corporate hub attracts a lot of talent and has many well-to-do professionals working in various sectors.  The unmarried males make up 32.9% of the population.Niche marketing:Niche is a very targeted and focused market. Looking at the data, we can say that themarket in Hyderabad is huge related to this segment as majority of the population falls inour targeted category i.e. college going students and young professionals.Even though it is a niche market, there is a lot of scope going by the income group and thenumber of present and potential professionals.POLICIES AND THEIR JUSTIFICATIONSTIME: Building choppers takes at least 20-30 days if made from scratch. Still we wouldensure that the time lag in our services as compared to that of our competitors is less,making the entire system more efficient and responsive than theirs .In order to do this wecould run surveys enquiring as to how long is the delivery period that others are offering.We could also keep a track as to how the competitors manage their procurement,assembling, delivery and more.22 | P a g e
  23. 23. ConclusionCustomized chopper fulfils the initial needs and specifications. I enhance the desire and thepassion of the user with and it provides him separates him from the rest on the road. Theframe design proved to be stable, strong and durable from the engineering analysis which hasbeen discussed in the report. Materials have been chosen carefully to give the bestcharacteristics and purposes of each component of the bicycle such as stainless steel for themain frame, aluminium alloy for flywheel and so on. Manufacturing processes includingpermanent mould casting, thermal plastic injection moulding and die casting are selectedafter considering several factors such as melting point of the material, dimension tolerance,complexity of shape etc. The magnetic resistance mechanism brings several advantageswhich add to the value of this exercise bicycle compared to ordinary belt/fan exercise bicycle.It solves the noise and mechanical wear problems, thus provides comfortable ride and longerlife cycle time. Besides, the power generator eliminates the need of external power supply,which indirectly reduces carbon footprint. With India GDP growing at on an average of 7-8%the disposable income are bound to rise and hence the demand for our product will alsoincrease.23 | P a g e
  24. 24. References: 1. Accessed on 8th February, 2012. 2. “Two wheeler Industry Note June 2011” Wheeler%20Industry%20Note,%20June%202011.pdf . Accessed On 7th February2012 3. Accessed On 7th February 2012 4. “Procedure of Customization” .Accessed on 7th February 2012 5. Accessed On 15th February 2012 6. Accessed on 7th February 2012 7. . Accessed on 24 December, 2011 8. Macro thinks Institute, Journal of Management Research, and ISSN 1941-899 X, 2011. 9. Vol. 3, No. 2:E139) _and_2-wheel_vehicles 10. 11. 12. 13. pend3.htm 14. Two Wheelers Industry: Growth Drivers Intact. ICRA report June 2011. 15. SES.html 16. 17. 18. 00144feab49a.html#axzz1mRojxVNH 19. 20. 21. 22. 23. | P a g e