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  1. 1. 1 A STUDY ON CONSUMERS ATTITUDE, PREFERENCE AND SATISFACTION TOWARDS MSK MOTORS, ERODE. PROJECT REPORT Submitted by P.ELANGO Register No: 732812631008 in partial fulfillment of the requirements of Anna University, Chennai for the award of the degree of MASTER OF BUSINESS ADMINISTRATION SURYA ENGINEERING COLLEGE METTUKADAI ERODE – 638 107 JUNE-2014
  2. 2. 2 SURYA ENGINEERING COLLEGE METTUKADAI, ERODE - 638 107 PROJECT REPORT JUNE -2014 This is to certify that the project entitled “A STUDY ON CONSUMERS ATTITUDE, PREFERENCE AND SATISFACTION TOWARDS MSK MOTORS, ERODE”. is a bonafide record of project work done by P.ELANGO Register No: 732812631008 of MBA Degree during the year 2012-14 _____________________ _____________________ Project Guide HOD Submitted for the Project Viva-Voce examination held on _____________________ _____________________ Internal Examiner External Examiner
  3. 3. 3 DECLARATION I affirm that the project work entitled“A STUDY ON CONSUMERS ATTITUDE, PREFERENCE AND SATISFACTION TOWARDS MSK MOTORS, ERODE” being submitted in partial fulfillment of the requirements of Anna University, Chennai for the award of MBA degree is the original work carried out by me. It has not formed the part of any other project work submitted for award of any degree or diploma, either in this or any other University. P.ELANGO 732812631008 I certify that the declaration made above by the candidate is true Ms. R.GOMATHI, MBA.,M.Phil.,(Ph.D)., Assistant Professor
  4. 4. 4 ABSTRACT The study entitled, “A STUDY ON CONSUMERS ATTITUDE, PREFERENCE AND SATISFACTION TOWARDS MSK MOTORS, ERODE” was conducted to know about the consumer attitude of purchasing two wheelers. The success of the company depends on knowing the consumer attitude, preference and satisfaction level of the HERO vehicle. The major objective of the project is to identify the consumer attitude, preference and satisfaction level of the HERO vehicle. The study also aimed at finding the factor influencing customer preference. In order to study the objective, primary data have been collected through questionnaire and secondary data through company documents and books for the study. The sample size for the study was 300 which were collected according to the convenience of the researcher. Five different charts are used in the study. The research design used in descriptive research. The sampling technique used is simple random sampling method. The data is analyzed using the percentage analysis, factor analysis, correlation analysis and ranking. The findings, suggestions and conclusion are given according to study conducted.
  5. 5. 5 ACKNOWLEDGEMENT First I thank and praise the God and parents for the countless blessings that they showered upon me to complete this project work. I take this opportunity to express my sincere thanks to Thiru K.KALAISELVAN, Secretary and Correspondent, Surya Engineering College, Erode, for providing necessary facilities to complete this project. I would like to express my sincere thanks to Dr.S.VIJAYAN, Principal, Surya Engineering College, Erode for having permitted me to undergo this project. I extend my heartful thanks to Dr. G.R. VASANTHA KUMAR, M.B.A., M.Phil., Ph.D.,HOD, Department of Management Studies, Surya Engineering College, Erode for his valuable ideas and advice for the successful completion of this project. I would like to express my sincere thanks to my beloved guide Ms. R.GOMATHI, MBA.,M.Phil., (Ph.D).,Assistant Professor,Department of Management Studies, Surya Engineering College, Erode for her valuable guidance and suggestions.
  7. 7. 7 LIST OF TABLES TABLE NO TABLE NAME PAGE NO 1 Gender of the respondents 40 2 Age group of the respondents 41 3 Respondents educational level 42 4 Respondents marital status 43 5 Profession of the respondents 44 6 Income of the respondents 45 7 Area of the respondents 46 8 Family size of the respondents 47 9 Source information about hero 48 10 Consideration for purchasing other vehicle 50 11 Mileage of hero bike 51 12 Present maintance cost of the bike 52 13 Frequency of bike service 53 14 Maintanance period of the vehicle 54 15 Resale value of the hero bike 55 16 Recommendation by the respondents 56 17 KMO and Bartlett's Test 57 18 Total Variance Explained 58 19 Rotated Component Matrix 59 20 Correlation analysis 60 21 Features of Hero products 62 22 Features of MSK motors, erode 63
  8. 8. 8 LIST OF CHARTS TABLE NO TABLE NAME PAGE NO 1 Gender of the respondents 40 2 Age group of the respondents 41 3 Respondents educational level 42 4 Respondents marital status 43 5 Profession of the respondents 44 6 Income of the respondents 45 7 Area of the respondents 46 8 Family size of the respondents 47 9 Source information about hero 49 10 Consideration for purchasing other vehicle 50 11 Mileage of hero bike 51 12 Present maintance cost of the bike 52 13 Frequency of bike service 53 14 Maintanance period of the vehicle 54 15 Resale value of the hero bike 55 16 Recommendation by the respondents 56
  9. 9. 9 CHAPTER-I 1.1 INTRODUCTION ABOUT THE STUDY CONSUMER ATTITUDE An individual with a positive attitude towards a product/service offering is more likely to make a purchase; this makes the study of consumer attitudes highly important for a marketer. An attitude may be defined as a feeling of favourableness or unfavourableness that an individual has towards an object (be it a person, thing or situation). It is a learned predisposition to exhibit and act based on evaluation resulting in a feeling of like or dislike towards and object. In terms of consumer behaviour, consumer attitudes may be defined as an inner feeling of favourableness or unfavourableness towards a product or service offering and the 4Ps. As Schiffman has defined, “Attitudes are an expression of inner feelings that reflect whether a person is favourably or unfavourably predisposed to some "object" (e.g., a brand, a service, or a retail establishment),” and “Attitude formation, in turn, is the process by which individuals form feelings or opinions toward other people, products, ideas, activities, and other objects in their environment”. In terms of consumer behaviour, an attitude is reflective of a consistent favourable or unfavourable feeling that a consumer or a prospect forms as a result of an evaluation about an object; the object being, a product/service offering, brand, price, store and dealer, salesperson, advertisement, promotion etc. Attitudes are a learned predisposition. Attitudes are learned; they are formed as a result of i) self experiences with the product/service offering and the mix; ii) interaction with other people, be it family, friends, peers and colleagues; iii) information obtained from the marketer through promotion particularly advertisements as well as dealers and salespeople. Attitude formation as a process is impacted by needs and motivation, perception as well as learning. Apart form helping a consumer make evaluations about a product/service offering ending up in purchase decisions (to buy/not to buy), attitudes play other functions as well. They perform four basic functions, viz., utilitarian function, ego defensive function, value expressive function, and knowledge function. The four
  10. 10. 10 functions are not mutually exclusive. In fact, they are related to each other and consumer attitudes are illustrative of a combination of functions a) Utilitarian function: Consumers form positive attitudes towards product/service offerings because they provide a utility, in other words, they provide a rewarding experience through the benefits that they provide. Consumers learn to relate a reward with the use of the offering. On the other hand if they do not offer a rewarding experience, consumers form a negative attitude towards such an offering. b) Ego defensive function: Consumers form attitudes as they help defend their ego, self-image and self-concept. If a consumer is high on ethnocentrism, and patronizes Indian products, he would have a positive attitude towards Indian brands. He would speak for and promote such brands even if he knows that a foreign made product provides better value. Attitudes are formed to protect the ego. c) Value expressive function: Positive attitudes are formed when a product or service expresses a person’s values and lifestyle, personality and self image, and self concept. This is because attitudes provide people with a basis for expressing their values. In cases where there is a mismatch between the product image and a consumer’s self- image, a negative attitude is developed. Attitudes are a reflection of value. d) Knowledge function: Attitudes are formed when consumers want to reaffirm their knowledge base, to finally help them simplify purchase decision making. If a consumer thinks positive about a brand, it helps reaffirm his opinion, and makes decision making simpler and faster. Attitudes help in decision making. The attitude-toward-object model states that a consumer’s attitudes towards a product/service offering or a brand, is a function of the presence or absence of certain attributes, and the corresponding evaluation. Attitude is function of evaluation of product -specific beliefs and evaluations. In other words, while evaluating an offering, the consumer’s attitude would be based on: - the presence of attributes, and the aggregation of a consumer’s belief about each of these, and - the overall evaluation of the relevance of each of these attributes in providing the necessary gains and benefits.
  11. 11. 11 Thus, consumers would tend to have favourable attitudes toward such offerings and/or brands that they have sufficient amount of attributes that are deemed important and evaluated as positive. On the other hand, they would have unfavourable attitudes towards offerings and/or brands which do not have the desired attributes or have many negative attributes. Nature of consumer attitudes: Consumer attitudes are reflective of a consistent favourable or unfavourable feeling that a consumer or a prospect forms as a result of an evaluation about an object; the object being, a product/service offering, brand, price, store and dealer, salesperson, advertisement, promotion etc. The nature of consumer attitudes is discussed as follows: 1. Attitudes are directed towards an object (product/service offering, price, store, dealer, promotion, advertisement etc.) about which a consumer has feelings and beliefs. 2. Attitudes have a direction; they could be positive or negative. A consumer could possess feelings of like/dislike, favourableness and unfavourableness towards a product or service as well as the mix. They vary in degrees and intensity, and can fall anywhere along a continuum from very favourable to very unfavourable. 3. Attitudes are consistent in nature, particularly with respect to the third component, i.e. behaviour. Consumers are consistent with respect to their behaviour. However, they are not entirely permanent and may change if the cognitive or the component is changed. This implies that if the consumer witnesses new experience or is exposed to new information about product/service offering and the mix (cognition), and) feelings are changed from dislike to like (affect), attitudes towards the offering and the mix can undergo change. In other words, while attitudes are stable and do not change frequently, they can be changed if something is done to change them. 4. Attitudes are a learned predisposition. Attitudes are learned; they are formed as a result of i) self experiences with the product/service offering and the mix; ii) interaction with other people, be it family, friends, peers and colleagues; iii) information obtained from the marketer through promotion particularly
  12. 12. 12 advertisements as well as dealers and salespeople. Attitude formation as a process is impacted by needs and motivation, perception as well as learning. 5. Attitudes cannot be observed directly. While attitudes are comprised of three components, behaviour is just one of them. It is only this component that can be seen; the cognitive and affect components cannot be seen. Thus it is said that attitudes cannot be seen; they can only be inferred from the manner in which an individual behaves. 6. While attitudes can be inferred from our behaviour, it is not synonymous to behaviour. It has two other components, and reflects a learned predisposition to act favourable or unfavourably towards a product and service offering and the mix. CONSUMER PREFERENCES The underlying foundation of demand, therefore, is a model of how consumers behave. The individual consumer has a set of preferences and values whose determinations are outside the realm of economics. They are no doubt dependent upon culture, education, and individual tastes, among a plethora of other factors. The measure of these values in this model for a particular good is in terms of the real opportunity cost to the consumer who purchases and consumes the good. If an individual purchases a particular good, then the opportunity cost of that purchase is the forgone goods the consumer could have bought instead. We develop a model in which we map or graphically derive consumer preferences. These are measured in terms of the level of satisfaction the consumer obtains from consuming various combinations or bundles of goods. The consumer’s objective is to choose the bundle of goods which provides the greatest level of satisfaction as they the consumer define it. But consumers are very much constrained in their choices. These constraints are defined by the consumer’s income, and the prices the consumer pays for the goods. We will formally present the model of consumer choice. As we go along, we will establish a vocabulary in order to explain the model. Development of the model will be in three stages. After a formal statement of the consumer’s objectives, we will map the consumer’s preferences. Secondly, we present the consumer’s budget
  13. 13. 13 constraint; and lastly, combine the two in order to examine the consumer’s choices of goods. The budget line plays two important roles. The first is determined by the level of income. The more income the consumer has to spend the greater number of the commodity bundles that are affordable. An increase in income would be portrayed as a parallel shift outwards of the budget line. It is a parallel shift because we are holding the prices of goods X and Y constant, therefore there would be no change in the line’s slope. The second role for the budget line is to act as a price line. A price line demonstrates the relative price of two goods.A relative priceis the price of one good in terms of another. The consumer’s objective is to allocate income between goods X and Y so that they achieve the greatest amount of utility, i.e., to reach the highest indifference curve possible within their budget constraint. They must choose that commodity bundle on their budget line which has the highest level of utility. Utility levels, as we have seen, are measured by indifference curves; therefore the consumer tries to reach the highest feasible indifference curve. Because the consumer’s wants are unlimited or, in any event, exceed his or her ability to satisfy them all, it is important that the consumer spend income so as to maximize satisfaction. Thus, a model is provided to illustrate and predict how a rational consumer maximizes satisfaction, given his or her tastes (indifference curves) and the constraints that the consumer faces (the budget line). The “At the Frontier” section presents a different way to examine consumer tastes and derive a consumer’s indifference curves. Preference can be described as “how we see the world around us “. Two individuals may be subject to the same stimuli under apparently the same conditions, but how they recognize them select them, organize then interpret them is an highly individual process based on each person’s own needs values and expectations the influence that each of three variables has an perceptual process, and its relevance to the marketing will be explored in some detail.
  14. 14. 14 Preference can be defines as a process by which individual selects, organize and interprets stimuli into a meaningful and coherent picture of the world. A stimulus is any of input to any of the sense. CUSTOMER SATISFACTION Whether the buyer is satisfied after a purchase depends on the offer’s performance in relationship to the buyer’s expectations and whether the buyer interprets any deviations between the two.7 In general, satisfactionis a person’s feelings of pleasure or disappointment that result from comparing a product’s perceived performance (or outcome) to expectations. If the company increases customer satisfaction by lowering its price or increasing its services, the result may be lower profits. The company might be able to increase its profitability by means other than increased satisfaction (for example, by improving manufacturing processes). Also, the company has many stakeholders, including employees, dealers, suppliers, and stockholders. Spending more to increase customer satisfaction might divert funds from increasing the satisfaction of other “partners.” Ultimately, the company must try to deliver a high level of customer satisfaction subject to delivering acceptable levels of satisfaction to the other stakeholders, given its total resources. Satisfaction is level of persons felt state resulting from comparing a products performance in relation to the person’s expectation. Thus the satisfaction level is function of the difference between perfervid performance and expectation. A customer could experience one of the three board levels of satisfactions, if the performance falls short of expectation the customer is dissatisfied, if the performance matches, the customer is satisfied, if the performance exceeds expectations, the customer is highly satisfied, pleased or delighted. Expectations are made on the basis of the buyers past experience statements by friends and associates and marketer and competitor information and promises. If marketer raise expectation too high, the buyer is likely to be sis appointed. Some of the most successful companies are arising expectations and delivering performances to matches. These companies are aiming for total customer satisfaction.
  15. 15. 15 FACTORS INFLUENCING THE CONSUMERS PREFERENCE The various factors affecting the consumer’s preference are as follows:- Consumer preference and consumer behaviour are similar, attributed in broad prospective. Consumer behaviour or buyers attitude is a process by which an individual decides what, when, how, whether or not, from whom to purchase goods and the service. The consumer's decisions are not hollow but influenced by cultural, social, personal and psychological factors substantially influence the purchases of the buyer. Most of the factors are “NOT CONTROLLABLE "by the marketers which are also to be taken into account. CULTURAL FACTORS Cultural factors such as buyer's culture, sub-culture and social class identification bear in depth and wide influences of consumer preference. CULTURE Culture is the most basic determinant of a person. His wants and behaviour are governed by instincts human trait is intellectual in behaviour. Cultural is a most fundamental determinant person’s wants and behaviour, the growing child acquires a set of values, perceptions, preferences and behaviour, through his family and key institutions. SOCIAL FACTORS A consumer's preference is also influenced by social factors, such as the consumer's reference groups, family and social roles and status. OCCUPATION A person's consumption pattern is also influence by his or her occupation. A blue colour worker's clothes, work shoes, powder, lunch boxes, bowling recreation are pertinent to his group. A company president affords expensive blue stage suits air
  16. 16. 16 travel club membership and vehicle hence marketers try to identify the occupational groups. ECONOMIC CIRCUMSTANCES A person's economic circumstances will do affect a great extent in his product choice. People economic circumstances consist of their spend able income, saving, borrowing power and attitudes towards spending versus saving. LIFE STYLE People coming from the same sub-culture, social classes and even occupation may lead quiet different life different. Life style portrays the whole person interaction with his or her environment. Life style reflects something beyond the person's social class on the one hand and personality on the other. Life style attempts to bring out one's way of living based on a whole person's pattern of acting in the world. PERSONALITY AND SELF-CONCEPT Each person has a distinct that will influence his on her buying preference. A person's personality is usually described in terms of such trait as 'self-confidence, dominance, autonomy, deference, sociability defensiveness and adoptability. INCOME Income is a vital factor that affects buying preference off consumer to a great extent. It is the per-capital income is high, and then the demand of consumer goods will be high, if it is less the demand will also be less. PSYCHOLOGICAL FACTORS A person's buying choice is also influenced from major psychological factors like motivation, perception, learning, beliefs and attitudes. It is useful for themarketer who can identify what generic level need this brand is capable fulfilling and accordingly position his brand up with relevant marketing inputs. Brands such as food and clothes are bought to fulfil psychological needs.
  17. 17. 17 INDUSTRY: PRESENT AND FUTURE TRENDS Automobile is one of the largest industries in global market. Being the leader in product and process technologies in the manufacturing sector, it has been recognized as one of the drivers of economic growth. During the last decade, well- directed efforts have been made to provide a new look to the automobile policy for realizing the sector's full potential for the economy. Steps like abolition of licensing, removal of quantitative restrictions and initiatives to bring the policy framework inconsonance with WTO requirements have set the industry in a progressive track .Removal of the restrictive environment has helped restructuring, and enabled industry to absorb new technologies, aligning itself with the global development and also to realize its potential in the country. The liberalization policies have led to continuous increase in competition which has ultimately resulted in modernization in line with the global standards as well as in substantial cut in prices. Aggressive marketing by the auto finance companies have also played a significant role in boosting automobile demand, Especially from the population in the middle income group.
  18. 18. 18 1.2 INDUSTRY PROFILE INTRODUCTION ABOUT THE TWO-WHEELER INDUSTRY India is the second largest manufacturer and producer of two-wheelers in the world. It stands next only 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 like restrictive policy followed by the Government of India towards the passenger car industry, rising demand for personal transport, inefficiency in the public transportation system etc. The 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. Under the regulated regime, foreign companies were not allowed to operate in India. The two wheeler industry has been going steadily over the years all over the world. India is not an exception for that. Today India is the second largest manufactures of two wheelers in the world. It stands next only to Japan and China in terms of number of two wheelers produced and sold. Until 1990 geared scooters dominated the two wheelers market so much so that their sales equalled the combined sales of Motor cycles and Mopeds. Today the customer preferences have shifted from geared scooters to motorcycles and also to an extent to the premium end scooters. With rising fuel cost and more recently stringent emission norms imposed by the government, there is a distinct consumer preference for high efficiency. Earlier the customer used to buy a two wheeler based on its reliability and price comfort and utility were the two basic traits he needed in the two wheelers. Now with the opening up of the economy and availability of new design and technology the consumer is increasingly according greater priority to power and style. An interesting trend is the shift in the reference towards Japanese designed two wheelers as compared to the Italian designed machines. In the last one year the motorcycle segment has consistently kept its growth chart intact and grown by 30%. Its share is increasing year by year. Today motorcycles command 58% of total two wheeler industries.
  19. 19. 19 Hero and Honda alone command nearly half of the market shares that are 48%. A key trend in the motorcycles segment has been the single-minded preference for 4 stroke engines in motor cycles. The motorcycles segment was no different, with only three manufacturers via Enfield, Ideal Jawa and Escorts. The two-wheeler market was opened to foreign competition in the mid-80s. And the then market leaders - Escorts and Enfield - were caught unaware by the onslaught of the 100cc bikes of the four Indo-Japanese joint ventures The industry had a smooth ride in the 50s, 60s and 70s when the Government prohibited new entries and strictly controlled capacity expansion. The industry saw a sudden growth in the 80s. The industry witnessed a steady growth of 14% leading to a peak volume of 1.9mn vehicles in 1990. In 1990, the entire automobile industry saw a drastic fall in demand. This resulted in a decline of 15% in 1991 and 8% in 1992, resulting in a production loss of 0.4mn vehicles. The total number of registered two-wheelers and three-wheelers on road in India, as on March 31, 1998 was 27.9mn and 1.7mn respectively. The two-wheeler population has almost doubled in 1996 from a base of 12.6mn in 1990. The last few years have seen a fundamental shift in preference from scooters and mopeds towards motorcycles. Motorcycle sales have grown at a CAGR of 27% for the last 6 years Vs Two Wheelers, which have grown at a CAGR of 11% over the same period. In 02-03, motorcycle sales have grown at 30% vs. 17% for two- wheelers. The faster growth rate of motorcycles has seen its share doubling from 38% in 97-98 to 76% in 02-03. Henceforth we do not expect motorcycles to grow at a rapid rate. However the growth rate for motorcycles in 03-04 is expected to be faster than overall 2-wheeler growth and we expect it to be around 12-15%. In 1999 the share of scooter was more but from the mid of 1999 – 2000 the whole scenario is changed. It started out, as a Joint Venture between Hero Group, the world's largest bicycle manufacturers. Driven by the trust of over 5 million customers, the Hero Honda product range today commands a market share of 48% making it a veritable giant in the industry. Hero Honda is currently the world’s largest motorcycle manufacturer thanks to its fuel efficient, high quality products made in collaboration with Honda motorcycles, Japan. Hero, a name synonymous with two wheelers in India, began its journey around four decades ago. Starting as a manufacturer of
  20. 20. 20 bicycle components, Hero has today grown into a multi-unit, multi-product, geographically diversified group of companies. Like every success story, Hero's saga contains an element of spirit and enterprise of achievement through grit and determination, coupled with vision and meticulous planning. The Hero Group began with a simple philosophy: to provide excellent transportation to the common man, at a price he could easily afford. It is this spirit, which drives Hero even today; the dream of providing total satisfaction in all its spheres of activity. To consumers, in excellent products at an affordable price; to employees, in a fine quality of life and to business associates, in a total sense of belonging. A thorough understanding of fast-changing consumer behaviour, new market segments and product opportunities, and a marketing mix sensitive to changing customer needs, form the core of Hero's marketing strategy and philosophy. Keeping the wheels of progress turning are the individual companies of the Hero Group. Each an independent profit centres. Each a success story in its own right. The two wheeler division of the Hero Group has already networked more than 3,500 dealer outlets, each with its complement of trained mechanics and workers. Established in 1945, it was incorporated as a trading company. From 1948 till 1959, it imported scooters and three wheelers from Italy and sold them in India. The company has a wide array of models both in the two-stroke and four- stroke configurations. However, with the implementation of the latest emission norms, it is slowly moving away from two-stroke vehicles and converting them to four-stroke ones. The company is all set to increase its margins to double – digits through concerted cost cutting, value engineering, gains from ‘ Total Productive Maintenance ‘ (TPM) and VRS. In the last four to five years, the two-wheeler market has witnessed a marked 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 2000-01.The Euro emission norms effective from April 2000 led to the existing players in the two- stroke segment to install catalytic converters. Nevertheless, in the past five years the company recognized the important role of motorcycles in its portfolio.
  21. 21. 21 The scooter market is predominantly located in the Northern and Eastern India and the rationalization of sales taxes to a uniform rate of 12% pushed the price of scooters by 6-8% without offering any perceived value advantage to the customer. The company posted total 2-wheeler sales of Rs1.05 million in 2000-01 as against Rs1.24 million in 1999-00. The motorcycle sales contributed to almost 50% of the total sales volumes accompanied by the decline in geared scooter sales, which contributed, to only 33% of sales volumes. The company has been introducing models in the middle end Rs.36, 000 – Rs. 48,000 and high end segments viz; Rs. 48,000 and above but has found difficult to market such models in competition to Hero Honda models in the similar price category. However BAL is on its way to recapture the highly differentiated product market by becoming a flexible and market – driven supplier of various models of two and three wheelers at specific price – points. BAL has performed fairly in the current fiscal 2001-02 with the Net Sales going up by 3.06% to Rs19720 million HY ended September 2001 from Rs19133.3 mn in the corresponding period previous year. Evolution of two-wheeler industry in India Two-wheeler segment is one of the most important components of the automobile sector that has undergone significant changes due to shift in policy environment. The two wheeler industry has been in existence in the country since 1955. It consists of three segments viz. scooters, motorcycles and mopeds. According to the figures published by SIAM, the share of two-wheelers in automobile sector in terms of units sold was about 80 per cent during 2003 ¬04. This high figure itself is suggestive of the importance of the sector In the initial years, entry of firms, capacity expansion, choice of products including capacity mix and technology, all critical areas of functioning of an industry, were effectively controlled by the State machinery. The lapses in the system had invited fresh policy options that came into being in late sixties. Amongst these policies Monopolies and Restrictive Trade Practices (MRTP) and Foreign Exchange Regulation Act (FERA) were aimed at regulating monopoly and foreign investment respectively.
  22. 22. 22 This controlling mechanism over the industry resulted in: (a) several firms operating below minimum scale of efficiency; (b) under-utilization of capacity; and (c) usage of out-dated technology. Recognition of the damaging effects of licensing and fettering policies led to initiation of reforms, which ultimately took a more prominent shape with the introduction of the New Economic Policy (NEP) in 1985.However, the major set of reforms was launched in the year 1991 in response to the major macroeconomic crisis faced by the economy. The industrial policies shifted from a regime of regulation and tight control to a more liberalized and competitive era. Two major results of policy changes during these years in two-wheeler industry were that the, weaker players died out giving way to the new entrants and superior products and a sizeable increase in number of brands entered the market that compelled the firms to compete on the basis of product attributes. Finally, the two wheeler industry in the country has been able to witness a proliferation of brands with introduction of new technology as well as increase in number of players. However, with various policy measures undertaken in order to increase the competition, though the degree of concentration has been lessened over time, deregulation of the industry has not really resulted in higher level of competition. Key players in the two-wheeler industry After facing its worst recession during the early 1990s, the two-wheeler industry bounced back with a 25% increase in volume sales in February 1995. The scooters are considered as family vehicles. There are many two-wheeler manufacturers in India. Major players in the 2-wheeler industry are Hero MotoCorp Ltd (HMCL), Bajaj Auto Ltd (Bajaj Auto) and TVS Motor Company Ltd (TVS). The other key players in the two-wheeler industry are Kinetic Motor Company Ltd (KMCL), Kinetic Engineering Ltd (KEL), LML Ltd (LML), Yamaha Motors India Ltd (Yamaha), Majestic Auto Ltd (Majestic Auto), Royal Enfield Ltd (REL) and Honda Motorcycle & Scooter India (P) Ltd (HMSI).
  23. 23. 23 Overview The Indian two-wheeler (2W) industry has shown a strong volume growth over the last two-years, having grown by 25% in 2009-10 and 27% in 2010-111 to reach 13.3 million units. This strong double-digit growth has been driven by multiple factors. One reason, of course, is statistical as this period of high double-digit growth has showed up after a rather sedate previous two years, when the 2W industry volumes had shrunk by 5% in 2007-08 and had grown by a mere 5% in 2008-09. In addition to the contribution of pent-up demand, the 2W industry growth over the last two years has been supported strongly by various underlying factors including India’s rising per capita GDP, increasing rural demand, growing urbanization, swelling replacement demand, increasing proportion of cash sales and the less measurable metric of improved consumer sentiment. Going forward, ICRA expects the 2W industry to report a volume CAGR of 10-12% over the next five years to reach a size of 21-23 million units by 2015-16 as it views the fundamental growth drivers - comprising of expected steady GDP growth, moderate 2W penetration levels, favourable demographic profile, under developed public transport system and utility quotient of a 2W - to be intact. Additionally, the entry of new players in the industry, multitude of new model/ variant launches, growing distribution reach, cheaper ownership costs on a relative basis are expected to be some of the other prime movers for industry growth over the medium term. In ICRA’s view, while the trend in rising commodity prices, hardening interest rates and increasing fuel costs may lead to some moderation in industry growth over the short term, the growth over the medium to long term is expected to remain in double digits. INTRODUCTION ABOUT THE HERO INDUSTRY Hero MotoCorp Limited, formerly Hero Honda Motors Limited is an India- based company engaged in the manufacture of motorcycles. The Company is engaged in manufacturing of two wheelers and its parts and ancillary services. The Company’s bikes are manufactured across three manufacturing facilities. Two of these are based at Gurgaon and Dharuhera, which are located in the state of Haryana in northern India. The third manufacturing plant is based at Haridwar, in the hill state of
  24. 24. 24 Uttrakhand. The Company offers a range of bikes which include CD Dawn, CD Deluxe, Splendor Plus, Splendor NXG, super splendor and Passion Pro. In April 2013, Hero Motocorp Ltd incorporated an off-shore investment subsidiary in the Netherlands. In July 2013, Hero Motocorp Ltd announced has incorporated a wholly owned subsidiary in the United States by the name of HMCL (NA), Inc. In December 2013, Hero Motocorp Ltd formed a joint venture with Magneti Marelli to develop and manufacture new fueling systems. History The Beginning “Hero” is the brand name used by the Munjal brothers for their flagship company, Hero Cycles Ltd. A joint venture between the Hero Group and Honda Motor Company was established in 1984 as the Hero Honda Motors Limited at Dharuhera, India. Munjal family and Honda group both owned 26% stake in the Company. During the 1980s, the company introduced motorcycles that were popular in India for their fuel economy and low cost. A popular advertising campaign based on the slogan 'Fill it – Shut it – Forget it' that emphasised the motorcycle's fuel efficiency helped the company grow at a double-digit pace since inception. In 2001, the company became the largest two-wheeler manufacturing company in India and globally. It maintains global industry leadership till date. The technology in the bikes of Hero Motocorp (earlier Hero Honda) for almost 26 years (1984–2010) has come from the Japanese counterpart Honda. Further developments and milestones  1956—Formation of Hero Cycles in Ludhiana(majestic auto limited)  1975—Hero Cycles becomes largest bicycle manufacturer in India.  1983—Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed Shareholders Agreement signed  1984—Hero Honda Motors Ltd. incorporated  1985—Hero Honda motorcycle CD 100 launched.
  25. 25. 25  1989—Hero Honda motorcycle Sleek launched.  1991—Hero Honda motorcycle CD 100 SS launched.  1994 – Hero Honda motorcycle Splendor launched.  1997—Hero Honda motorcycle Street launched.  1999 – Hero Honda motorcycle CBZ launched.  2001 – Hero Honda motorcycle Passion and Hero Honda Joy launched.  2002—Hero Honda motorcycle Dawn and Hero Honda motorcycle Ambition launched.  2003—Hero Honda motorcycle CD Dawn, Hero Honda motorcycle Splendor plus, Hero Honda motorcycle Passion Plus and Hero Honda motorcycle Karizma launched.  2004—Hero Honda motorcycle Ambition 135 and Hero Honda motorcycle CBZ* launched.  2005—Hero Motocorp SuperSplendor, Hero Honda motorcycle CD Deluxe, Hero Honda motorcycle Glamour, Hero Honda motorcycle Achiever and Hero Honda Scooter Pleasure.  2007—New Models of Hero Honda motorcycle Splendor NXG, New Models of Hero Honda motorcycle CD Deluxe, New Models of Hero Honda motorcycle Passion Plus and Hero Honda motorcycle Hunk launched.  2008—New Models of Hero Honda motorcycles Pleasure, CBZ Xtreme, Glamour, Glamour Fi and Hero Honda motorcycle Passion Pro launched.  2009—New Models of Hero Honda motorcycle Karizma:Karizma – ZMR and limited edition of Hero Honda motorcycle Hunk launched  2010—New Models of Hero Honda motorcycle Splendor Pro and New Hero Honda motorcycle Hunk and New Hero Honda Motorcycle Super Splendor launched.  2011—New Models of Hero Honda motorcycles Glamour, Glamour FI, CBZ Xtreme, Karizma launched. New licensing arrangement signed between Hero and Honda. In August Hero and Honda parted company, thus forming Hero MotoCorp and Honda moving out of the Hero Honda joint venture. In November, Hero launched its first ever Off Road Bike Named Hero "Impulse".
  26. 26. 26  2012-New Models of Hero Motocorp Maestro the Musculine scooter and Ignitor the young generation bike are launched.  2013-Hero MotoCorp unveiled line-up of 15 updated products including Karizma R, ZMR, Xtreme, Pleasure, Splendor Pro, Splendor iSmart, HF Deluxe ECO, Hero Motocorp SuperSplendor, Passion Pro and Xpro, Glamour and Glamour FI etc. It also introduced three new technologies- Engine Immobilizer in new Xtreme, Integrated Braking System (IBS) in new Pleasure and i3S (Idle Stop and Start System) in new Splendor iSmart.  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. Formation of Hero MotoCorp  The name of the company was changed from Hero Honda Motors Limited to Hero MotoCorp Limited on July 29, 2011. The new brand identity and logo of Hero MotoCorp were developed by the British firm Wolff Olins. The logo was revealed on 9 August 2011 in London, to coincide with the third test match between England and India.  Hero MotoCorp can now export to Latin America, Africa and West Asia. Hero is free to use any vendor for its components instead of just Honda-approved vendors.  49% stake in Erik Buell Racing  In July 2013, HMC acquired 49.2% shareholding in Erik Buell Racing, a motorcycle sport company which produces street and racing motorcycles based in East Troy, Wisconsin, USA. It paid approx. USD 25 million for this stake. Operation:  Hero MotoCorp has three manufacturing facilities based at Dharuhera and Gurgaon in Haryana and at Haridwar inUttarakhand. These plants together have a production capacity of 6.9 million 2-wheelers per year. Hero MotoCorp has a sales and service network with over 3,000
  27. 27. 27 dealerships and service points across India. It has a customer loyalty program since 2000, called the Hero Honda Passport Program.  It is reported that Hero MotoCorp has five joint ventures or associate companies, Munjal Showa, AG Industries, Sunbeam Auto, Rockman Industries and Satyam Auto Components, that supply a majority of its components.  The company has a stated aim of achieving revenues of $10 billion and volumes of 10 million two-wheelers by 2016–17. This in conjunction with new countries where they can now market their two-wheelers following the disengagement from Honda. Hero MotoCorp hopes to achieve 10 per cent of their revenues from international markets, and they expected to launch sales in Nigeria by end-2011 or early-2012. In addition, to cope with the new demand over the coming half decade, the company is coming up with their fourth factory in Neemrana in Rajasthan while their fifth factory is planned to be set up at Halol in Gujarat. Motorcycles It has 17 models of motorcycles across the 100 cc, 125 cc, 150 cc, 225 cc categories.  CBZ, CBZ Star, CBZ Xtreme, Hero Xtreme  CD 100, CD 100 SS, Hero Honda Joy, CD Dawn, CD Deluxe, CD Deluxe (Self Start)  HF Dawn, HF Deluxe  Glamour, Glamour F.I.  Hunk  Karizma, Karizma R, Karizma ZMR FI  Passion, Passion Plus, Passion Pro, Passion XPro  Splendor, Splendor+, Splendor+ (Limited Edition), Hero MotocorpSuperSplendor, Splendor NXG, Splendor PRO, SplendoriSmart  Hero Impulse launched in 2011 after the separation of Hero and Honda. Its India's first off-road and on road Bike.  Hero Ignitor launched in 2012
  28. 28. 28 Scooters It has 2 models in scooters:  Pleasure  Maestro In 2013, Hero MotoCorp registered best ever calendar year performance of more than 6.1 million unit sales. By selling 6.25 million units in the month of October, it became the first-ever manufacturer to cross landmark 6 lakh unit sales in a month. In the last quarter of the year or say in the festive season, the company sold more than 1.6 million units, while in non festive time in April–May 2013, it managed to sell out quite good numbers of units- 1.1 million. Hero MotoCorp Limited is the World's single largest two-wheeler motorcycle company. The company is engaged in the manufacture of two wheelers motorcycles and its parts. The company has three manufacturing facilities namely Dharuhera, Gurgaon at Haryana and Haridwar at Uttarakhand. The company is based in New Delhi, India. The company offers a range of bikes starting from CD Dawn, CD Deluxe, Splendor Plus, Splendor NXG, Passion and Passion Pro. The 125 cubic centimetre segment offers Glamour, Super Splendor and Glamour F1. It also has an offering called Achiever in 135 cubic centimetre segment. In the 150 cubic centimetres and above the company offers brands like Hunk, CBZ X-treme, Karizma and the Karizma ZMR. It also offers a 100 cubic centimeter scooter, Pleasure. Hero MotoCorp Limited was incorporated in the year 1984 with the name Hero Honda Motors Ltd. The company was established as a joint venture company between Honda Motor Company of Japan and Hero Group. In the year 1983, they signed a joint collaboration agreement and formed the company. The joint venture between India's Hero Group and Honda Motor Company, Japan has not only created the world's single largest two wheeler company but also one of the most successful joint ventures worldwide. In the year 1985, the company commenced their commercial production at Dharuhera plant in Haryana and introduced their first motorcycle, CD 100 in the market. In the year 1989, they
  29. 29. 29 launched the new motorcycle model, Sleek in the market and in the year 1991, they introduced new motorcycle model, CD 100 SS in the market. In the year 1995, the company introduced their extraordinary product, Splendor in the market. In the year 1997, the company inaugurated their second manufacturing facility at Gurgaon in Haryana. Also, they introduced new motorcycle model, Street in the market. In the year 1999, they launched Hero Honda CBZ, the first 150cc motorcycle in the Indian two wheeler industry. In the year 2001, the company introduced new models, Passion and Joy in the market. In the next year, they introduced new models, Dawn and Ambition in the market. In the year 2003, the company launched new motorcycle models namely, CD Dawn, Splendor+ and Passion Plus in the market. Also, they launched Hero Honda Karizma, the industry's first 223cc motorcycle. In the year 2004, they introduced new models, Ambition 135 and CBZ* in the market. During the year, they renewed the joint technical agreement with the Honda Motors Company, Japan. In the year 2005, the company launched Super Splendor, CD Deluxe, Glamour and Achiever in the market. In the year 2006, the company forayed into scotter segment and launched 100cc gearless scotter, Pleasure in the market. In the year 2007, the company launched Splendor NXG, CD Deluxe, Passion Plus and Hunk in the market. During the year 2007-08, the company commissioned their third plant at Haridwar in Uttarakhand with an initial installed capacity of 500,000 units. This plant had lean manufacturing and practices that ensure efficiency. During the year, the company launched new models (including variants) including Splendor NXG, Hunk, New Super Splendor, New Passion Plus, Commemorative Splendor+ and a refreshed version of Pleasure. During the year 2008-09, the company increased the installed capacity of Motorised 2 wheelers upto 350CC engine by 1800000 Nos to 5200000 Nos. Also, they launched eight models: Passion Pro (100 cubic capacity-4 Stroke), CBZ-Extreme (150 cubic capacity - 4 Stroke), Pleasure New Aesthetics, Splendor NXG (Self Start), CD Deluxe (Self Start), Glamour FI, Glamour (Carb) and HUNK Special Edition. Also, they launched new motorcycle model, Karizma - ZMR in the market. During
  30. 30. 30 the year 2009-10, the company increased the installed capacity of Motorised 2 wheelers upto 350CC engine by 200000 Nos to 5400000 Nos. The company launched nine new models during the year. During the year 2010-11, the company launched six new models including variants of existing models successfully. They refreshed Glamour and Glamour FI. They introduced the New Hunk, Super Splendor and Splendor Pro. The company launched the new upgraded versions of CBZ Xtreme and Karizma. Also, they breached the landmark 5 million figure cumulative sales in a single year. During the year, the Indian Promoter Group of the company, which comprised of Hero Investments Pvt Ltd (HIPL), Bahadur Chand Investment Pvt Ltd (BCIPL) and Hero Cycles Limited (Hero Cycles) re- aligned the shareholding in the company, following a family agreement. As a result, Hero Cycles transferred its shareholding in the company to HIPL on May 28, 2010. As a result of these transactions, the Indian Promoter Group of the company now comprises of HIPL and BCIPL owned and controlled entirely by the Munjal Family headed by BrijmohanLallMunjal. Also, during the year, the Indian Promoter Group and Honda Motor Co Ltd, Japan (Honda) entered into a Share Transfer Agreement (the Agreement) on January 22, 2011. As per the terms of the Agreement, Honda had agreed to transfer its entire shareholding of 26% in the Company to the Indian Promoter Group, bringing an end to the joint venture between the two promoter groups of the company. The acquisition was completed on March 22, 2011 and the shares held by Honda were transferred to the Indian joint venture partner. In addition to the Agreement, the Indian Promoter Group and Honda also entered into a License Agreement on January 1, 2011. As per this agreement, Honda has given to the company, the right and license to manufacture, assemble, sell and distribute certain products and their service parts under their Intellectual Property Rights. In July 2011, the company changed their name from Hero Honda Motors Ltd to Hero MotoCorp Ltd. In February 2012, the company entered into a strategic partnership with Erik Buell Racing (EBR) Of USA for contemporary technology and design inputs to enable the company to launch high end bikes for the domestic and international markets.
  31. 31. 31 1.3 COMPANY PROFILE MSK Motors is an authorized and leading Hero dealer in South India, dealing Hero motorcycles Sales, Spares, service and Safety. We have been in automobile business for over five decades and started our journey with Hero on 14th September 2005 and through our customer centric approach, quickly scaled up to become one of the leading dealers of the country. A Team of exemplary, highly motivated & dedicated Engineers, Managers and well experienced Service Manager and employees are our assets. We have three State of Art Showrooms attached with Automated Workshops and fully equipped Spares Centre. We also have branches at Sathyamangalam, Bhavani, Pallipalayam, Anthiyur and Puliyampatti. Our Automated Workshops are open on Sundays for regular maintenance of motorcycles. And we are very proud to mention that we are also a stockiest in Spare Parts and have a wide range of spares inventories and Motorcycles at all times. He also authorised stockist for genuine Hero spare parts for Erode, Namakkal, Salem, Dharmapuri, Krishnagiri, Coimbatore, Tirupur, Nilgiris and Karur Districts The performance and safety of your bike not only depends on the world class design and workmanship assured by Hero but also on the parts being used in the assembly line. Even the finest components manufactured need replacement from time to time. And to ensure the continued impeccable performance of your vehicle, the spare parts should also be made and replaced as good as the components fitted by Hero. To ensure this, we procure the replacement parts according to the specifications and standards set by us and Hero Moto Corp. As a responsible Hero bike owner, we recommend that for your safety, long life and high performance of your bike, use only Hero genuine parts. PRODUCTS: Acheiver Passion-pro Super splendour Splendor NXG
  32. 32. 32 Splendor + Splendor pro CD deluxe Pleasure CD dawn SPARE PARTS: In MSK Motors we’ll get Genuine Hero parts that are engineered to provide the quality and performance that is the hallmark of Hero. Whether we know the exact Hero part we require or need help finding which part fits your needs, we’ll get unparalleled expertise and prompt, efficient service from parts department staff at our MSK Auto Parts. EXTENDED WARRANTY Extended Warranty period ranges from 1 year to upto 3 years after manufacturer’s warranty period. Hero Moto Corp Advantage beats the competition in all aspects and sets a new trend in the market.  Beats the competition both in terms of parts coverage and pricing.  Has the most comprehensive parts covered list which (almost 15 – 20% more than the next best in the market)  Has the lowest prices in the market (5% – 20% less than the competition) as the widest range of extended warranty plans for the customers starting from 1 year to 3 years and upto 60,000 kms (Scooters) & 70,000 kms (Motorcycles) CUSTOMER BENEFITS Peace of mind motoring for up to 5 years. - Nominal Cost - All major parts covered under the programme - Enhanced value of the vehicle through regular servicing and extended warranty protection. - Extended Warranty is transferable to new customer
  33. 33. 33 - Improved ability to ‘trade-in’ or ‘trade-up’ (resale value) through the improved value of the vehicle - A trusted source of two wheeler repairs. - Nation wide sales/service network. - Reliable and genuine spares. SCOPE OF WARRANTY Hero MotoCorp Ltd. warrants all its two-wheelers manufactured/assembled in Dharuhera, Gurgaon and Haridwar plants, distributed in India and sold through its authorized dealers to be free, under normal use and condition from any defect both in material and workmanship, subject to the following terms and conditions. TERMS AND CONDITIONS All Hero MotoCorp two-wheelers are warranted for a certain period specified in terms of time and kms from the date of purchase, whichever term gets satisfied earlier. It is mandatory for the customer to avail all free and paid services as per the recommended schedule to be eligible for the warranty benefits. If a defect is observed in any Hero MotoCorp two-wheeler, Hero MotoCorp’s only obligation/liability is to repair or replace those parts which is/are considered to be the cause of malfunction free of charge of both labour and material, when Hero MotoCorp acknowledges that such malfunction has not come out of misuse or improper handling etc. such defective two-wheeler should be brought to the nearest Hero MotoCorp dealer/authorised service centre by the owner for necessary inspection and subsequent repairs. LIMITATIONS OF WARRANTY The warranty shall not apply:  If there is any damage due to modification or fitting of accessories other than the ones recommended by Hero MotoCorp.  If the two-wheeler has been used in any competitive events like track races or rallies.
  34. 34. 34  If there is any damaged caused due to usage of improper oil/grease, non genuine parts.  For two-wheelers which have been used for any commercial purposes as taxi etc.  For maintenance repairs required due to misuse while driving or due to adulteration of oil, petrol or due to bad road conditions.  For consumables like oil, grease etc. used during free services or used during warranty repairs.  If any part of the vehicle is tampered/repaired by unauthorized persons/workshops etc.  For two-wheelers not used in accordance with the owner’s manual supplied with each two-wheeler by Hero MotoCorp. HISTORY: Our journey in the automobile industry started more than four decades ago. Today, we are one of the leading private automobile business groups in the state of Tamil Nadu. MSK Group has interests in Automobile dealerships, Spare-parts distribution, Non-banking leasing and Finance, Transports, Textiles & Real estate developments. The MSK Group is a well-recognized brand name among the Southern States’ automobile dealership fraternity. The various companies in the group have enjoyed long standing associations with automobile manufacturers, generations of loyal customers, the local community and workforce and the finance and banking industry. VALUES AND BELIFES The MSK Group realizes that we can sustain and grow to be a successful company only if we cater to the needs of our customers and respect the environment in which we live. We strive to continuously improve our service to customers:  Through clear and honest information exchange,  Through timely fulfillment of our commitments and  By earning their trust at every step. We strive to give back to the community:
  35. 35. 35  By being a fair and honest business group,  By recycling water and waste wherever possible,  Using cfl lights and environmentally-friendly construction material when possible,  By maintaining a green environment by saving trees when possible and  Continuously planting new saplings. We strive to create a healthy working environment for our employees:  By creating an unbiased work culture,  Giving each employee the opportunity to grow within the company,  Providing on-site and off-site training opportunities to aid in his/her own personal development,  By having a fair grievance redressal system when needed. ENVIRONMENTAL RESPONSIBILITIES: Energy-saving lighting systems: CFL (Compact Fluorescent Lamp): Our aim is to use CFL bulbs in lighting areas wherever possible, thus reducing the amount of energy consumed and reducing its harmful effects on the environment. Water Recycling Units :Since our business requires a large amount of water to wash and maintain vehicles, we aim to equip our workshops with water recycling units where water from the water wash area is recycled through this equipment and reused three times before being let out into the storm water drains. Greenery: With a constant battle being waged between urbanization and the maintenance of the green areas in and around cities, we aim to try and avoid the unnecessary cutting of plants and trees in all our properties. Rain water harvesting: We aim to harvest rain water wherever possible. When any new area is being developed, we try to limit the amount of property that is paved and let more rain water seep into the ground, thus improving the water table. EMPLOYMENT: The success of the MSK Group is primarily due to the strong bond that has been created and is constantly renewed amongst the employees, partners and the management of the company. As it is often said, it is the employees that make a company.
  36. 36. 36 We at MSK Group strongly believe the success of our companies and our branches is fully dependent on the strong core team players who comprise that particular company or branch. We look for motivated individuals who have the initiative to think beyond their daily task. Individuals who are interested in working in a challenging environment and high pressure situations along a team of like-minded individuals are encouraged to apply. Being a medium size group, performers have the ability to be quickly recognized and constantly promoted to positions that carry more responsibility. The group’s business interests are large and diverse and thus there are ample opportunities that will always be available. Individuals who wish to learn fast and grow within the group are encouraged to apply.
  37. 37. 37 1.4 STATEMENT OF THE PROBLEM Motor cycle industry is one of the few industries in growth phase today. A consumer who wants to be mobile today considers personal transportation as one of his basic needs. Motor cycles satisfy this need immensely. This fact could be clearly from the data recorded as the share of motor cycles in the two wheeler industry has grown from 26 % in 1988-89 to 48% in 1998-99.Motor cycles have also become very common among our large middle class population. To study the reasons for this success story recorded by motorcycles in a span of a short period the study of consumer preference for motor cycles will be of great use .The study gains importance since it could throw light on the reasons for the growth of motor cycle’s industry.
  38. 38. 38 1.5 OBJECTIVES OF THE STUDY Primary objectives:  To analysis the consumers attitude, preference and satisfaction towards MSK motors Erode. Secondary objectives:  To study the existing consumer preference with regards to Hero bikes.  To know the satisfaction level of customer towards the two wheelers.  To know the existing features on two wheelers.  To know the drawback of two wheelers other than vehicles in MSK motors.  To find out the factors influencing the consumer attitude for choosing Hero bikes.
  39. 39. 39 1.6 SCOPE OF THE STUDY  The study would help the company to know the customer’s satisfaction towards competitor’s product.  The study would focus on the competitor’s product features.  This study will help us to know the satisfaction level of the consumers.  The study will also help the company to increase the level of the customers in future.  This study reveals actual attitude of the customers.  Similar type of study can be made for other organization also.
  40. 40. 40 1.7 LIMITATIONS OF THE STUDY  Limitation of this survey was carried within a short period of Six months.  The sample selected cannot be judged as error free as the respondents and their attitudes are heterogeneous in nature and the chance of based information to keep in cannot be eliminated.  The study has been restricted in Erode region.As such the results cannot be generalized.  Since only a sample of 300 was selected due constraints it is difficult to generalized and to come conclusion.
  41. 41. 41 CHAPTER-II REVIEW OF LITERATURE 1. Richard Feinberg, Rajesh Kadam(2002)Business is moving online, not as a matter of choice, but as a matter of necessity and the use of the Internet as a channel for commerce and information presents an opportunity for business to use the Internet as a tool for customer relationship management (CRM)/(e-CRM) and companies will benefit from the same. 2. V.G. Ramakrishnan (2003) The vehicle servicing business in India is undergoing a transformation. In early days, the servicing needs of the vehicles were undertaken mostly by roadside mechanics and a few organized workshops. Companies need to focus on building a chain of authorized service stations covering the entire country to service its vehicles. As the competition in the market has intensified and profit margins squeezed, companies need to view servicing as a money spinner for the entire operation. In the recent years, other players have entered in the field and the creation of national chain of organized workshops is underway and that is likely to change the nature of vehicle servicing market in India. 3. CalinGurau (2003) mentioned that the advantages of the Internet as a transaction and communication channel present new opportunities for businesses to create a long- term relationship with their customers and the level of e-service quality is an essential component of this customer-centric strategy, thus the companies need to establish the optimum level of e- service quality, taking into consideration customers’ satisfaction, , the competitive conditions of the market, but however, the effective use of this method requires the implementation of e-CRM systems, structured around a customer-centric approach. 4. Injazz J. Chen (2003)has mentioned that Customer relationship management is a combination of people, processes and technology that seeks to understand a company's customers and companies that successfully implement CRM will reap the rewards in customer loyalty and long run profitability and managing a successful CRM implementation requires an integrated and balanced approach to technology, process, and people.
  42. 42. 42 5. Alan Smith (2006) mentioned that since the mid-1990s many industries were experiencing increased demand from their customers for higher quality and easier access to service thus corporations and top managers started to rethink their traditional ways of providing service and customer relationship management started to become a strategic asset among corporations. 6. Celent(2006) concluded that banks can gain full value from their investments in CRM technology by leveraging on customer knowledge and TCF bank a midsize that has a community banking culture realised the same and implemented CRM for its online banking process and this helped TCF bank to reap rewards during direct customer interaction. 7. GauravPatra (2006) has mentioned that investing in cutting edge technologies, high end equipments and robust infrastructure, will be of little use, unless the customers are serviced satisfactorily, thus Tata Teleservices Limited, adopted and deployed CRM solution, which helped the company to cater to the varied needs of its vast customer base and this moved the company to higher customer service levels. 8. Mary Moylan (2006)conclude in his chapter “Customer Relationship Management”, that due to changing scenario in financial service sector Allied Irish Bank (AIB) , noticed the need to provide quality customer service as a means to retain customer and attract new ones and thus focused attention on CRM which helped AIB to shift its business focus from transactional to relationship market. 9. Paul Szwarc (2006)has noted that CRM involves more than just gathering data and developing programmes to identify the most profitable customer, then managing the relationship by offering them more suitable products and services. Handled well CRM can allow for stages in the relationship to be identified and managed and the organisations that use CRM systems sensibly can often change customer’s opinions and behaviour. 10. Gordon Fullerton (2006), “Putting relationship in CRM”, that JEEP, a division of Daimler Chrysler Automobile Company, has served a classic example of CRM program that provides a considerable value to both the customers and the firm by
  43. 43. 43 developing a program exclusively for jeep owners and fostered a community that is highly effectively committed to the product, the brand and the customers. 11.KoushikiChoudhury, Arvinandan Mukherjee(2007)argue that relationship marketing implies attracting, maintaining and enhancing customer relationships and it is beneficial because acquiring new customers is more costly than retaining existing ones, and one of the determinants of the success of the relationship marketing strategies of a firm is how the customers perceive the resulting service quality. 12.BiswajitMahanty and VirupaxiBagodi (2007) More than 55 million two- wheelers are moving on Indian roads. Accordingly, two-wheeler service sector should have generated revenue amounting to INR 100,000 million per year, but in reality, this has not been realised in the organised service sector, the Indian two-wheeler service industry has not considered servicing as a line of business and providing conveniently reliable services is most important in two-wheeler services in India to capture the market. 13.Steve Kahl and Fernaando Suarez (2008) in their research paper “Product, Process, and Service: A New Industry Lifecycle Model”, has concluded that Existing models of industry lifecycle evolution tend to focus on changes in the products and processes and largely overlook the dynamics of services, but increasingly, the revenues of many firms are becoming dominated by sales of services rather than products, or products sold with services to gain competitive differentiation in markets marked by increasing product commoditization. 14.BiswajitMahanty and VirupaxiBagodi(2008) It is an era of customer delight for the two wheeler industry and the conventional measures implemented by the service organizations tend to be inadequate to attract customers persistently. 15. Datta (2008) Advertising is the non-personal communication of the information usually paid for and persuasive in nature about products, services or ideas by identified sponsors through the various media. 16. Kotwal et al (2008) While purchasing cosmetics, toiletries, stationary, gifts and cards, the girls give importance to informational input by the TV advertisements into
  44. 44. 44 their decision to buy. It was also found that girls had positive attitude towards TV commercials. 17.S.Saravan, N Panchanathan and S Pragadeeswaran (2009) concluded in their research paper “Markets and Consumers- Consumer Behavior Towards Showroom Services of Two- Wheeler with reference to Cuddalore District” that students and employees are more satisfied about showroom service and age of consumer is an important factor while choosing the brand of bike and all the consumers give importance all factors relating to buying a vehicle. 18. Mrs. M.L. kamaeswari (The Indian Journal Marketing – Oct - 2009) has expressed that, industrialization has bought vast changes in the automobile industry, because and development of any area requires appropriate transportation facilities, automobile industry in one of the fastest growing sectors in our country. The rapid growth of middle class section is the primary reason for the growth of two – wheeler industry people in rural and semi urban areas are trying to devote their life style and people in metropolitan cities are completely disappointed with the public transport system. Indian is the third largest manufacture and second largest consumer of two- wheeler in the world. It has been achieved due to variety of reason like restrictive policy of the government of Indian and rising demand for personal transport. 19. Dr. Senthilkumar , department of business management, Indian automobile, in his research study 2009, found that competitive hostility, supplier, “power” and market turbulence relationship appreciate the role of public private partnership as win –win situation for private entities government an individual consumers. In recent we saw two-wheeler manufacture like bikes focus being on the domestic market and then on exports. There are signs of becoming a developed nation and this will increase the energy need if the country even more. 20.V S Ramaswamy (2010) CRM is not merely the response of the times, but the necessity of the time as well it is the effective CRM which converts buyers into profitable customers and then builds relations and retains them as a customer for life. 21. Mona J Fitzsimmons (2010) has concluded that the profitability of automobile manufacturers depends on exploiting value added services for instance automobile
  45. 45. 45 manufacturers have discovered that financing and after sales service can achieve significant profits. 22.R K Garg (2011) CRM requires a seamless, single view of the customer with consistent cross-channel interaction models and it is recommend that companies bundle all internal CRM strategies into one comprehensive multi-channel strategy. More over if the two wheeler manufacturer integrate CRM with SCM, then product design and production planning can be aligned with the customer information available, to increase customer loyalty. 23. Graham Charlton (2011) has highlighted the findings in the report from E- consultancy 2011 Customer Engagement Report, that companies have stared the use of social media for customer service and companies are really seeing the benefits of social media as customer service channel which allows companies to handle complaints, question and deliver real – time information. 24.Lavanya T (2011)has mentioned that CRM solutions aim to eliminate the organisationsstovepipes that hamper proactive customer interaction.CRM applications are also designed to increase the effectiveness of the staff members who interacts with the customers or prospects and the use of CRM applications can lead to improved customer responsiveness and a more comprehensive view of the entire “cradle –to- grave” customer life cycle. 25. Abhijeet Singh and Brijesh Kumar (2011) Hero Honda Motors Ltd, is running a program called Good life Passport to Relationship Reward, with an objective to create an innovative environment for interaction between Hero Honda and its customers. Members of this program are given a magnetic card in which all information is stored and this card is swiped when using any service at a showroom or workshop and it works like a loyalty benefit card. 26. PawanChabra (2011) has mentioned that the death knell off Bajaj’s scooters business was sounded when the company officially stopped the production of its flagship Chetak in December 2002, to get cracking on its ambition of becoming a credible motorcycle brand manufacturer, the company invested big in R&D and product development, but the company faced challenges in the sales and distribution
  46. 46. 46 because their dealers had little idea how to sell motorcycles, so the entire dealership network was trained to sell motorcycles. 27.Tamilarasan R(2011)has mentioned that CRM becomes effective when customers are involved in the CRM process and it is necessary the organisation include the customers into the mix and if CRM practices are conceived and implemented properly, it will enable companies to retain customers for life, get maximum value out of each customer and generate exemplary customer bonding. 28.Philip Kotler (2012) Harley – Davidson dealers ranging from the CEO to the sales staff, maintain personalized relationships with customers through face to face and social media contact. Knowing customers as individuals and conducting ongoing research to keep up with their changing expectations and experiences which helps Harley – Davidson to define their customers’ needs better. 29. Kevin Keller (2012) Caterpillar has become a leading firm by maximizing the total customer value with the help of effective CRM, best after sales service in the industry and better trained dealer. This allows the firm to command a premium price of 10% to 20% higher than competitors such as Volvo, Komatsu etc. 30. Oyama (2012) Honda Motor wants to be number one in the Indian market and the company wanted 30% of Honda’s global sales to come from Indian operations by 2020. HMSI have had issues related to production in the past with most of its models having the longest waiting period in the country, this reduced in Honda’s penetration in the rural market, which is less than a third of Hero Moto Corp.
  47. 47. 47 CHAPTER-III RESEARCH METHODOLOGY Research methodology is a way to systematically solve the research problem. It may be understood as a science of study how research is done scientifically. In it we study the various steps that are generally adopted by the researcher in studying his research problem along with the logic behind them RESEARCH DESIGN: Research Design is a plan for addressing the research objective or hypothesis. In essence, the Researcher develops a structure or framework to answer a specific research problem/opportunity. DESCRIPTIVE RESEARCH DESIGN: The Descriptive approach attempts in describing the characteristics of a particular individual, or a group. The study concerning whether certain variables are associated with as against this, studies concerned with specific predictions, with narration of facts and characteristics concerning individual, group or situation. In this study, the researcher must be able to define clearly, what he wants to measure and must find adequate methods for measuring it along with a clear cut definition of population he wants to study. SAMPLE DESIGN: The universe of study being large, researcher has to resort to sampling method of data collection. On the basis of a section of the universe selected in a prescribed manner one is able to deduce for the universe. For the sample results to be applicable on the universe, sample should be adequately chosen so to make it representative and reliable. METHODS OF DATA COLLECTION: A questionnaire has been used for data collection. The researcher interviews the respondents. Respondents are guided by the researcher to answer the questions in the questionnaire.
  48. 48. 48 DATA TYPE PRIMARY DATA: Conducting direct interview using Structured Questionnaire has collected the primary data QUESTIONNAIRE DESIGN: Proper care has been taken to ensure that the information needs match the objectives which in turn match the data collected through the questionnaire. The basic cardinal rules of questionnaire design like using simple and clear words, the logical and sequential arrangement of questions has been taken care of. SAMPLING TECHNIQUE: There are two sampling techniques. They are probability sampling & Non- Probability sampling. In this study the researcher had adopted convenient sampling. SAMPLE SIZE: Sample size taken for the study is 300 respondents. STATISTICAL TOOLS USED: Tools used for this study is,  SIMPLE PERCENTAGE ANALYSIS  FACTOR ANALYSIS  CORRELATION  HENRY GARRETT RANKING METHOD Simple Percentage analysis: Percentage analysis refers to a special kind of ratio. Percentages are used in making comparison between two are more series of data. Percentage is used to describe relative terms the distribution of two or more data.
  49. 49. 49 Actual respondents Percentage of Respondents = ------------------------------------------ X 100 Total respondents Factor analysis: Factor analysis can be used to explore the data for patterns, confirm our hypothesis, or reduce the many variables to a more manageable number. Correlation analysis This tool helps in determining the degree of relationship between two variables. It establishes the co-variation of two variables. In this study this tool is used to find the degree of correlation. Henry Garrett Ranking Method Henry Garrett Ranking Method is used to find the factor which affecting the features of Hero products and MSK motors, Erode.
  50. 50. 50 CHAPTER-IV ANALYSIS AND INTERPRETATION PERCENTAGE ANALYSIS TABLE NO: 1 GENDER OF THE RESPONDENTS SL.NO GENDER FREQUENCY PERCENTAGE 1 Male 262 87% 2 Female 38 13% TOTAL 300 100% Interpretation: The above table reveals that 87% of the respondents are male and 13% of the respondents are female. CHART NO: 1 GENDER OF THE RESPONDENTS 0% 20% 40% 60% 80% 100% Male Female 87% 13% PERCENTAGE GENDER
  51. 51. 51 TABLE NO: 2 AGE GROUP OF THE RESPONDENTS SL.NO AGE GROUP FREQUENCY PERCENTAGE 1 Below 25 yrs 140 47 2 26-30 110 37 3 31-40 39 13 4 41-50 7 2 5 Above 50 yrs 4 1 Total 300 100 Interpretation: It is inferred that majority of the respondents(47%) are in the age group of Below 25 yrs, 37% belongs to 26-30 yrs and 13% are in the age group of 31-40 yrs, 2% are in the age group of 41-45 yrs, and the remaining 1% are in the age group of Above 45 years of age. CHART NO: 2 AGE GROUP OF THE RESPONDENTS 0% 10% 20% 30% 40% 50% Below 25 yrs 26-30 31-40 41-50 Above 50 yrs 47% 37% 13% 2% 1% PERCENTAGE AGE
  52. 52. 52 TABLE NO: 3 RESPONDENTSEDUCATIONAL LEVEL SL.NO EDUCATION FREQUENCY PERCENTAGE 1 Below HSC 93 31 2 HSC/Diploma 90 30 3 Under Graduate 66 22 4 Post Graduate 51 17 Total 300 100 Interpretation: The above table depicts that 31% of the respondents belongs to the category of Below HSC, 30% of the respondents comes under HSC/Diploma, 22% of the respondents belongs to the category of Under Graduate, and the remaining 17% respondents are Post Graduates. CHART NO: 3 RESPONDENTSEDUCATIONAL LEVEL 0% 5% 10% 15% 20% 25% 30% 35% 31% 30% 22% 17% PERCENTAGE EDUCATIONAL LEVEL
  53. 53. 53 TABLE NO: 4 RESPONDENTS MARITAL STATUS SL.NO MARITAL STATUS FREQUENCY PERCENTAGE 1 Married 130 43 2 Unmarried 170 57 Total 300 100 Interpretation: The above table reveals that 57% of the respondents are Unmarried and 43% of the respondents are Married. CHART NO: 4 RESPONDENTS MARITAL STATUS 0 10 20 30 40 50 60 Married Unmarried 43 57 PERCENTAGE MARITAL STATUS
  54. 54. 54 TABLE NO: 5 PROFESSION OF THE RESPONDENTS SL.NO PROFESSION FREQUENCY PERCENTAGE 1 Government Employee 65 22 2 Self Employee 85 28 3 Private 40 13 4 Business 37 12 5 Student 73 25 TOTAL 300 100 Interpretation: The above table reveals that 28% of the respondents are Self Employed, 25% of the respondents are Students, 22% of the respondents are Government Employees, 13% of the respondents are Private employees and the remaining 12% of the respondents are doing Business. CHART: 5 PROFESSION OF THE RESPONDENTS 22 28 13 12 25 0 5 10 15 20 25 30 PERCENTAGE PROFESSION
  55. 55. 55 TABLE NO: 6 INCOME OF THE RESPONDENTS SL.NO INCOME FREQUENCY PERCENTAGE 1 Less than 5000 90 30 2 5001-10000 118 39 3 10001-15000 62 21 4 15001-20000 19 6 5 Above 20000 11 4 TOTAL 300 100 Interpretation: It is inferred that majority of the respondent(39%) are having income between Rs.5001-10000, 30% of the respondent income isLess than Rs.5000, 21% of the respondent are having income Rs.10001-15000, 6% of the respondent are having income of Rs.15001-20000 and the remaining 4% of the respondent are having Above Rs.20000. CHART NO: 6 INCOME OF THE RESPONDENT 0 5 10 15 20 25 30 35 40 30 39 21 6 4 PERCENTAGE INCOME
  56. 56. 56 TABLE NO: 7 AREA OF THE RESPONDENTS SL.NO AREA FREQUENCY PERCENTAGE 1 Rural 80 27 2 Semi-Urban 153 51 3 Urban 67 22 TOTAL 300 100 Interpretation: The above table represents that 51% of the respondents are from Semi-Urban areas, 27% of the respondents are fromRural areas and 22% of the respondents are from Urban areas. CHART NO: 7 AREA OF THE RESPONDENTS 0 10 20 30 40 50 60 Rural Semi-Urban Urban 27 51 22 PERCENTAGE AREA
  57. 57. 57 TABLE NO: 8 FAMILY SIZE OF THE RESPONDENTS SL.NO FAMILY SIZE FREQUENCY PERCENTAGE 1 1-3 members 103 34 2 4 members 137 46 3 5 members 48 16 4 6 members 9 3 5 Above 6 members 3 1 TOTAL 300 100 Interpretation: The above table shows that 46% of the respondents are having 4 members in their family, 34% of the respondents are having 1-3 members in their family, 16% of the respondents are5membersin their family, 3% of the respondents are 6members in their family and the remaining 1% of the respondents are in their family Above 6members in their family. CHART NO: 8 SIZE OF THE FAMILY OF THE RESPONDENTS 0 5 10 15 20 25 30 35 40 45 50 1-3 members 4 members 5 members 6 members Above 6 members 34 46 16 3 1 PERCENTAGE FAMILY SIZE
  58. 58. 58 TABLE NO: 9 SOURCE OF INFORMATION ABOUT HERO SL.NO PARTICULARS FREQUENCY PERCENTAGE 1 Family / Relatives 115 38 2 Friends 127 42 3 Show room 13 4 4 Magazines 8 3 5 Advertisement 19 7 6 Internet 14 5 7 Exhibition 4 1 TOTAL 300 100 Interpretation: The above table represents that 42% of the respondents received informationabout Hero from Friends, 38% of the respondents received information from Family / Relatives, 7% of the respondents received information through Advertisement, 5% of the respondents received information from Internet, 4% of the respondents received information from Showroom, 3% of the respondents received information from Magazines and the remaining 1% of the respondents received information from Exhibition.
  59. 59. 59 CHART NO: 9 SOURCE INFORMATION ABOUT HERO 0 5 10 15 20 25 30 35 40 45 38 42 4 3 7 5 1 PERCENTAGE SOURCE OF INFORMATION
  60. 60. 60 TABLE NO: 10 CONSIDERATION FOR PURCHASING OTHER VEHICLE SL.NO PARTICULARS FREQUENCY PERCENTAGE 1 Yes 148 49 2 No 152 51 TOTAL 300 100 Interpretation: The above table shows that 51% of the respondents did not considered other vehicles before purchasing Hero, and the remaining 49% of the respondents considered other vehicles before purchasing Hero. CHART NO: 10 CONSIDERATION FOR PURCHASING OTHER VEHICLE 48 48.5 49 49.5 50 50.5 51 Yes No 49 51 PERCENTAGE CONSIDERATION
  61. 61. 61 TABLE NO: 11 MILEAGE OF HERO BIKE SL.NO PARTICULARS FREQUENCY PERCENTAGE 1 Below 40kms 18 6 2 41-50kms 54 18 3 51-60kms 140 47 4 61-70kms 87 29 5 Above 70kms 1 0 TOTAL 300 100 Interpretation: The above table reveals that 47% of the respondents says that the present mileage of the bike is 51-60kms, 29% of the respondents bike mileage is 61-70kms, 18% of the respondents bike mileage is 41-50kms, 6% of the respondents bike mileage is Below 40kms and the remaining of the respondents bike mileage is Above 70kms. CHART NO: 11 MILEAGE OF HERO BIKE 0 20 40 60 6 18 47 29 0 PERCENTAGE MILEAGE
  62. 62. 62 TABLE NO: 12 PRESENT MAINTANCE COST OF THE BIKE PER ANNUM SL.NO PARTICULARS FREQUENCY PERCENTAGE 1 Below Rs.1000 66 22 2 Rs.1001-2000 143 48 3 Rs.2001-3000 62 20 4 Above Rs.3000 29 10 TOTAL 300 100 Interpretation: The above table represents shows that 48% of the respondents spends Rs.1001-2000 per annum to maintain the bike, 22% of the respondents spends Below Rs.1000 and only 10% of the respondents spends more than Rs.3000 for the maintenance of the bike. CHART NO: 12 PRESENT MAINTANCE COST OF THE BIKE 0 5 10 15 20 25 30 35 40 45 50 22 48 20 10 PERCENTAGE MAINTANCE COST
  63. 63. 63 TABLE NO: 13 FREQUENCY OF BIKE SERVICE SL.NO PARTICULARS FREQUENCY PERCENTAGE 1 0-2times 78 26 2 3-5times 125 42 3 6-8times 76 25 4 9-11times 21 7 TOTAL 300 100 Interpretation: The above table represents that 42% of the respondents service their bike 3- 5times, 26% of the respondents service their bike 0-2times, 25% of the respondents service their bike 6-8times, 7% of the respondents service their bike 9-11times in a year. CHART NO:13 FREQUENCY OF BIKE SERVICE 0 5 10 15 20 25 30 35 40 45 0-2times 3-5times 6-8times 9-11times 26 42 25 7 PERCENTAGE BIKE SERVICES
  64. 64. 64 TABLE NO: 14 MAINTANANCE PERIOD OF THE VEHICLE SL.NO PARTICULARS FREQUENCY PERCENTAGE 1 one year 75 25 2 Upto 2 years 103 34 3 Upto 3 years 79 27 4 Upto 4 years 28 9 5 5 years and above 15 5 TOTAL 300 100 Interpretation: The above table represents that 34% of the respondents are maintaining the vehicle upto 2 years, 27% of the respondents are maintaining the vehicle upto 3years, 25% of the respondents are maintaining the vehicle upto one year, 9% of the respondents are maintaining the vehicle upto 4 years and the remaining 5% of the respondents are maintaining the vehicle 5years and above. CHART NO: 14 MAINTANANCE PERIOD OF THE VEHICLE 0 5 10 15 20 25 30 35 one year upto 2 years upto 3 years upto 4 years 5 years and above 25 34 27 9 5 PERCENTAGE MAINTANANCE PERIOD
  65. 65. 65 TABLE NO: 15 RESALE VALUE OF THE HERO BIKE SL.NO PARTICULARS FREQUENCY PERCENTAGE 1 Highly Dissatisfied 11 4 2 Dissatisfied 15 5 3 Neutral 88 29 4 Satisfied 101 34 5 Highly Satisfied 85 28 TOTAL 300 100 Interpretation: The above table shows that 34% of the respondents are satisfied with the resale value, 28% of the respondents are highly satisfied with the resale value, 5% of the respondents are dissatisfied with the resale value and the remaining 4% of the respondents are highly dissatisfied with the resale value. CHART NO: 15 RESALE VALUE OF THE HERO BIKE 0 10 20 30 40 4 5 29 34 28 PERCENTAGE RESALE VALUE
  66. 66. 66 TABLE NO: 16 RECOMMANDATION BY THE RESPONDENTS SL.NO PARTICULARS FREQUENCY PERCENTAGE 1 Yes 194 65% 2 No 106 35% TOTAL 300 100 Interpretation: 65% of the respondents recommend Hero bike to others and 35% of the respondents says that they will not recommend. CHART NO: 16 RECOMMANDATION BY THE RESPONDENTS 0 10 20 30 40 50 60 70 Yes No 65 35 PERCENTAGE RECOMMANDATION
  67. 67. 67 FACTOR ANALYSIS It is a multivariate technique used for data reduction. This analysis is made to study a large number of variables affecting particular situation and combining the related variables into a smaller number of relevant factors. H0: The factor analysis is not valid. H1: The factor analysis is valid. TABLE NO: 17 KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .655 Bartlett's Test of Sphericity Approx. Chi-Square 229.102 Df 45 Sig. .000 Interpretation: From the above table it can be inferred that the significance (0.000) is less than the assumed value (0.05). So reject the H0. This means that the factor analysis is valid.KMO coefficient (0.655) is more than 0.5 which implies that the factor analysis for data reduction is effective.
  68. 68. 68 TABLE NO: 18 Total Variance Explained Component Initial Eigen values Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative % 1 2.136 21.361 21.361 2.136 21.361 21.361 1.587 15.869 15.869 2 1.378 13.778 35.140 1.378 13.778 35.140 1.569 15.691 31.560 3 1.041 10.412 45.552 1.041 10.412 45.552 1.399 13.992 45.552 4 .980 9.797 55.349 5 .919 9.186 64.535 6 .884 8.839 73.374 7 .778 7.780 81.154 8 .734 7.340 88.494 9 .602 6.019 94.513 10 .549 5.487 100.000 Extraction Method: Principal Component Analysis. Interpretation: From the above table, it is inferred that the extracted nine factors showed a cumulative variance of 46%, which means a good factor analysis has been done.
  69. 69. 69 TABLE NO: 19 Rotated Component Matrix Factors Component 1 2 3 Delivery time .755 -.026 -.106 Service quality .615 .087 .124 Spare parts cost .242 .361 .276 Spare parts Availability -.024 .804 -.223 Spare parts Quality -.087 .740 .145 Attention of service Personal .004 -.097 .466 Explanation about service .490 -.126 .168 Service Data Intimation .484 .404 .164 Customer waiting Room Facility .053 .109 .788 Restroom Facility .308 .188 .576 Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 4 iterations. Interpretation: The above table shows the extracted three factors which have higher effect on the variables. The factor extracted includes the optimum score of (.755) in first component shows that the respondents feels that the vehicle delivery time is good. The factor extracted includes the optimum score of (.804) in first component shows that the respondents feels that the availability of vehicle spare parts is very good. The factor extracted includes the optimum score of (.788) in first component shows that the respondents feels that the waiting room facility is good.
  70. 70. 70 CORRELATION ANALYSIS The following table shows the relationship between the problems of vehicle and users recommendation for the future buyers. TABLE NO: 20 Correlations Mileage Brakes Clutch Engine Sound Starting trouble Fork Recommend for Future Buyers Mileage Pearson Correlation 1 .252** .186** -.030 -.044 .215* * .106 Sig. (2- tailed) .000 .001 .611 .446 .000 .067 N 300 300 300 300 300 300 300 Brakes Pearson Correlation .252** 1 .037 -.071 -.053 .266* * .065 Sig. (2- tailed) .000 .524 .218 .364 .000 .263 N 300 300 300 300 300 300 300 Clutch Pearson Correlation .186** .037 1 .380** .261** .038 .118* Sig. (2- tailed) .001 .524 .000 .000 .514 .041 N 300 300 300 300 300 300 300 Engine Sound Pearson Correlation -.030 -.071 .380** 1 .409** .101 .197** Sig. (2- tailed) .611 .218 .000 .000 .080 .001 N 300 300 300 300 300 300 300 Starting trouble Pearson Correlation -.044 -.053 .261** .409** 1 -.028 .222** Sig. (2- tailed) .446 .364 .000 .000 .625 .000 N 300 300 300 300 300 300 300 Fork Pearson Correlation .215** .266** .038 .101 -.028 1 .218** Sig. (2- tailed) .000 .000 .514 .080 .625 .000 N 300 300 300 300 300 300 300
  71. 71. 71 Recomm end for Future Buyers Pearson Correlation .106 .065 .118* .197** .222** .218* * 1 Sig. (2- tailed) .067 .263 .041 .001 .000 .000 N 300 300 300 300 300 300 300 **. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed). Interpretation: Pearson correlation value shows that the variables Engine sound(.197), Starting trouble(.222) and Fork(.218) are moderately correlated; Hence there is a relationship between the problems of vehicle and the users recommendation for the future buyers.
  72. 72. 72 TABLE NO: 21 FEATURES OF HERO PRODUCTS The following table shows the Following features of hero products. Interpretation: From the above table it is inferred that the respondents are mainly attracted by the mileage given by the Hero bike followed by the vehicle style, driving comfort, colour, spares parts availability. Particulars Henry Garrett Ranking Total scores Mean Rank Suspension 2772 1078 3007 3168 2850 1692 3162 2024 3367 5040 28160 93.86 9 Long life 3069 3332 2037 2592 2280 3478 2790 3128 3913 1710 28329 94.43 6 Performance 2673 2254 3783 1632 2185 2632 3720 3956 2366 3060 28261 94.20 8 Price 2574 2744 2037 2496 3040 2914 3813 3680 2457 2520 28275 94.25 7 Style 4356 2058 3201 2880 4560 4418 2325 1840 1911 990 28539 95.13 2 Driving comfort 2871 3332 2328 4704 4275 2726 2139 1840 1911 2340 28466 94.88 3 Colour 2277 4214 3589 3552 2090 3854 2418 2208 2548 1710 28460 94.86 4 Mileage 2673 5978 4753 2400 2755 1692 1767 2576 2093 1890 28577 95.25 1 Spares availability 4356 3626 2134 2784 2090 1692 3348 2116 2912 3330 28388 94.62 5 Maintenance 2079 784 2231 2592 2375 3102 2418 4232 3822 4410 28045 93.48 10
  73. 73. 73 TABLE NO: 22 FEATURES OF MSK MOTORS, ERODE The following table shows the Following features of MSK motors, Erode. Particulars Henry Garrett Ranking Total scores Mean Rank Location of showroom 5940 4312 6984 5280 6555 29071 96.90333 4 Attractiveness of showroom 6336 5586 4462 5664 7030 29078 96.92667 3 Quick delivery process 6435 5782 6790 5952 4180 29139 97.13 2 Model availability 6930 6174 6014 6624 3420 29162 97.20667 1 Easy Finance arrangements 4059 7546 4850 5280 7315 29050 96.83333 5 Interpretation: From the above table it is inferred that the respondents are mostly attracted by the showroom in case of Model availability, Quick delivery process, Attractiveness of showroom, etc., from the following features of Hero products.
  74. 74. 74 CHAPTER V 5. FINDINGS, SUGGESTION AND CONCLUSION 5.1 FINDINGS PERCENTAGE ANALYSIS  87% of the respondents are male.  47% of the respondents are below 25 years of age.  31% of the respondents were below HSC of educational level.  57% of the respondents are unmarried.  28% of the respondents are working as self employee.  39% of the respondents are got monthly income of Rs.5001 to Rs10000.  51% of the respondents are came from semi urban areas.  46% of the respondents are having 4 members in their family.  42% of the respondents are got information from friends.  51% of the respondents are not consider any other vehicle before purchasing Hero.  47% of the respondents are having mileage of 51 to 60kms of Hero bikes.  48% of the respondents are maintaining cost of Rs.1001-2000 of their Hero bikes.  42% of the respondents are 3-5times service their Hero bikes.  34% of the respondents are maintaining Hero bikes upto 2 years.  34% of the respondents are satisfied with the resale value of Hero bikes.  65% of the respondents are recommending to future buyers about Hero. FACTOR ANALYSIS:  The factors of consumer’s perception towards problem faced by 10 individual statements. Out of 10 factors, 3 individual factors contribute more towards consumer perceptions towards MSK Motors showroom. The factors are: 1. Delivery time 2. Spare parts Availability 3. Customer waiting Room Facility
  75. 75. 75 CORRELATION:  There is a positive correlation between the problems of vehicle and the recommendation of Hero bikes. RANKING:  In the 10 features, the respondents are mainly attracted by the mileage given by the Hero products.  In the 5 features, the respondents are mainly attracted by the showroom in case of model availability.
  76. 76. 76 5.2 SUGGESTIONS  Television advertisements can be improved for providing information about the offers given by the dealer.  Offers, discounts and other facilities given by the dealers can be passed through internet, magazine, etc.  The dealer has to help the customers for their financial arrangements.  The retail showrooms can impress the loyal customer by giving them special discounts during purchase of Hero bikes and also during festival seasons.  The customers are always preferred to purchase updated models. It will lead to increase the sales of the products in MSK Motors.
  77. 77. 77 5.3 CONCLUSION The study mainly reveals the customer attitude, preference and satisfaction towards Hero bikes rendered in MSK motors. Customer has associated strong belief with Hero motocorp due to the mileageand resale value of the product. A customer requirement shows thatthey want mileage as well as engine power in the product. They are least bothered about theprice. If price is more and mileage and power exists into the product they are ready to buy it.Manufacturer must focus on the requirement of the customer. Thus concluded that most of the customers are satisfied with the delivery time, mileage and spares availability. But some of the customers not satisfied with the no.of.colours, exchange offers. So, the dealers (MSK motors) have to increase more exchange mela and exclusive offers to attract more customers and the Hero Company have to increase no.of.colours in bikes.
  78. 78. 78 APPENDIX A STUDY ON CONSUMERS ATTITUDE, PREFERENCE AND SATISFACTION TOWARDS MSK MOTORS, ERODE. QUESTIONNAIRE 1. Name:_________________________ 2. Gender: a) Male[ ] b) Female[ ] 3. Age: a) Below 25years[ ] b) 26-30years[ ] c) 31-40years[ ] d) 41-50years[ ] e) above 50years[ ]. 4. Educational Qualification: a) Below HSC[ ] b) HSC/Diploma[ ] c) Under Graduate[ ] d) Post Graduate[ ] 5. Marital Status: a) Married[ ] b) Un-Married[ ] 6. Profession: a) Govt.Employee[ ] b) Self Employee[ ] c) Private[ ] d) Business[ ]e) Student[ ]. 7. Income: a) Less than 5000[ ] b) 5001-10000[ ] c) 10001-15000[ ] d) 15001-20000[ ] e) Greater than 20000[ ] 8. Area: a) Rural[ ] b) Semi-Urban[ ] c) Urban[ ]. 9.Size of the family. a) 1-3 members[ ] b) 4 members[ ] c) 5 members[ ] d) 6 members[ ] e) above 6 members[ ]
  79. 79. 79 10. Where did you get the information to purchase Hero? a) Family / Relatives[ ] b) Friends[ ] c) Show room[ ] d) Magazines[ ] e) Advertisement[ ] f) Internet [ ] g) Exhibition[ ]. 11. Did you consider any other vehicle before purchasing Hero? a) Yes[ ] b) No[ ] 12. If Yes, which one? a) Bajaj[ ] b) Honda[ ] c) Yamaha[ ] d) TVS[ ] e) Royal Enfield[ ] f) Ma[ ] g) Any other[ ] 13. Give your opinion to the following features of your Hero products. S.NO Attribute Rank 1 Suspension 2 Long life 3 Performance 4 Price 5 Style 6 Driving Comfort 7 Colour 8 Mileage 9 Spares availability 10 Maintance 14. What makes you to purchase the two wheeler from MSK motors , Erode. S.NO Particulars Rank 1 Location of showroom 2 Attractiveness of showroom 3 Quick delivery process 4 Model Availability 5 Easy Finance Arrangements