Segmentation targeting and positioning of hero moto corp


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Segmentation targeting and positioning of hero moto corp

  1. 1. Segmentation, Targeting and Positioning of Hero Moto Corp Khushboo Priyambada MFM I NIFT, Bengaluru 1
  2. 2. 1. Introduction to Two Wheeler Bikes A motorcycle (also called a motorbike, bike) is a two wheeled motor vehicle. Motorcycles vary considerably depending on the task they are designed for, such as long distance travel, navigating congested urban traffic, cruising, sport and racing, or off-road conditions. Motorcycles are one of the most affordable forms of motorized transport in many parts of the world and, for most of the world's population, they are also the most common type of motor vehicle. There are around 200 million motorcycles (including mopeds, motor scooters, motorized bicycles, and other powered two and threewheelers) in use worldwide, or about 33 motorcycles per 1000 people. [1] India, is the second largest producer of two-wheelers in the world. In the last few years, the Indian twowheeler industry has seen spectacular growth. The country stands next to China and Japan in terms of production and sales respectively. Majority of Indians, especially the youngsters prefer motorbikes rather than cars. Capturing a large share in the two-wheeler industry, bikes and scooters cover a major segment. Bikes are considered to be the favorite among the youth generation, as they help in easy commutation. The two-wheeler market in India is the biggest contributor to the automobile industry with a size of Rs.100,000 million. The motorcycle market share is about 81.5% of the total two wheeler market in India. Threefourths of the total exports in the two wheeler automobile industry are made in the motorcycle segment. [2] 2. Segmentation, Targeting and Positioning Related to Bikes 2.1 Segment marketing A market segment consists of a group of customers who share a similar set of needs and wants. The major segmentation variables—geographic, demographic, psychographic, and behavioral segmentation. [3]  Geographic Segmentation (nation, states, regions, cities, density, climate, etc.)  Demographic Segmentation (age, family size, gender, income, family life cycle, occupation, religion)  Psychographic segmentation (lifestyle, personality)  Behavioral segmentation (occasions, benefits, user status, usage rate, loyalty status, attitude towards product) [3] 2
  3. 3. For bikes, demographic segmentation plays an important role. Bikes cater to a particular age group, gender and/or income group. Depending upon the segment, the features of the bike varies. Hence, marketers should have a good knowledge about what features to add on as per the segment they want to cater to. 2.2 Market Targeting Once the firm has identified its market-segment opportunities, it has to decide how many and which ones to target. Marketers are increasingly combining several variables in an effort to identify smaller, betterdefined target groups. In evaluating different market segments, the firm must look at two factors: the segment's overall attractiveness and the company's objectives and resources. After evaluating different segments, the company can consider five patterns of target market selection. [3]  Single – segment concentration: Through concentrated marketing, the firm gains a strong knowledge of the segment's needs and achieves a strong market presence. [3]  Selective specialization: A firm selects a number of segments, each objectively attractive and appropriate. [3]  Product specialization: The firm makes a certain product that it sells to several different market segments. [3]  Market specialization: The firm concentrates on serving many needs of a particular customer group. [3]  Full market coverage: The firm attempts to serve all customer groups with all the products they might need. [3] Manufacturers of bikes need to be very precise while selecting their target market. They should understand the consumer’s demand and then accordingly place their product. The product’s features should satisfy its target customers and should be at per with the value it promises to its target customers. 2.3 Market Positioning Positioning is the act of designing company’s offering and image to occupy a distinctive place in the mind of a target market. The end result of positioning is value proposition, a cogent reason why the target market should buy the product. [4] 3
  4. 4. Positioning in market is very important as well as difficult. It’s making the consumers aware of your product. Each bike must have a unique selling point which needs to be well portrayed in consumer’s mind so that he has an additional choice in his mind. 3. Competiting Bike’s Brands The brands that I have chosen are:  Hero MotoCorp Ltd.  Yamaha Motor Company Limited  Bajaj Auto Ltd.  TVS Motor Company  Harley Davidson 4. Hero MotoCorp Ltd Hero MotoCorp Ltd. formerly Hero Honda is an Indian motorcycle and scooter manufacturer based in New Delhi, India. Hero Honda started in 1984 as a joint venture between Hero Cycles of India and Honda of Japan. The company is the largest two wheeler manufacturer in India. In 2010, When Honda decided to move out of the joint venture,[7] Hero Group bought the shares held by Honda. Subsequently, in August 2011 the company was renamed Hero MotoCorp with a new corporate identity. Product range of Hero MotoCorp are: [5]  CD 100  Passion  Passion Plus  CD 100 SS  CBZ  Karizma  Splendor  CD Dawn  Ambition  Splendor +  CBZ Star  Ambition 135  Impulse  Acheiver  Pleasure  Street  Hunk  Joy  Glamour  CD Deluxe 4
  5. 5. 4.1 Market Segmentation Hero MotoCorp caters to a wide consumer base. It has segmented its market based on income and age. It caters to youth of all income groups. Its highest selling bike Splendor is a favorite in sub urban and rural India. It potrays itself as the most efficient bike range to cater to Indian Roads. 4.2 Target Market Hero MotoCorp follows selective specialization. It has a wide range of bikes from Rs 37,000 to Rs 95, 000. Each product has multiple optional features. The USP that it uses are: strong, sturdy and powerful, greater mileage, low maintenance cost, safe to ride, ease and comfort. Its target market includes lower middle class consumer to upper middle class consumer. It is affordable, available and acceptable by all. 4.3 Positioning Strategy 4.3.1 Fill it. Shut it. Forget it Campaign This campaign focused on the mileage of Hero bikes. It says that once you fill oil in the bike’s tank, you are tension free. Due to its higher mileage, you can travel as much as you want without bothering to refill oil. 5
  6. 6. 4.3.2 Dhak dhak go Advertisement campaign Dhak dhak refers to the heart beat. Therefore this campaign showed that if you are riding a Hero bike you are listening to your heart. This campaign connects emotionally to the consumer as it shows the connection of bikes to the heart of every Indian. 4.3.3 Desh ki Dharkan Advertisement Campaign Desh ki dharkan refers to the heart beat of the country. It symbolizes that all people in India are emotionally attached to their country. Even though there are a lot of cultural differences but the entire country stands as one. This campaign places Hero bikes as the heart beat of the entire nation uniting everyone as a nation. 4.3.4 Event sponsorships Event sponsorships of various cricket matches is a positioning strategy as cricket has a huge fan base in India. It positions itself as a strong, reliable, affordable and greater mileage bikes. 6
  7. 7. 4.3.5 Celebrity endorsements Various celebrity endorsements are used as their positioning technique. Saurav Ganguly, when he was captain of Indian Cricket team was their brand ambassador along with Hritik Roshan. Both these personalities are unique in their fields. Saurav Ganguly was the face of Indian cricket. People worshiped him. So, through Saurav Gaunguly, Hero potrayed itself as the heart beat of the country. Iconic figure Hritik Roshan is known for his youth and physique. So through him Hero tried to lure the youth. 4.3.6 Hum me hai hero campaign This is the recent advertisement of Hero MotoCorp. This advertisement tries to prove that we all are born super starts. We just need to focus and believe in ourselves. There is nothing impossible in this world and there is nothing that can’t be achieved. Through perseverance we can reach great heights and achieve whatever we want. We just need to believe firmly that we are a hero. 4.4 Conclusion Hero MotoCorp is the biggest two wheeler manufacturer in the world. It has the highest market share in India. It has successfully delivering its promise to its target customers. The aggressive market positioning strategy that it uses places it way above its competitors. It relates itself to every Indian. It is a bike for the Indian consumers satisfying all their needs. 7
  8. 8. 5. Yamaha Motor Company Limited Yamaha Motor Company Limited, is a Japanese motorized vehicle-producing company. Yamaha made its initial foray into India in 1985. Subsequently, it entered into a 50:50 joint-venture with the Escorts Group in 1996. However, in August 2001, Yamaha acquired its remaining stake becoming a 100% subsidiary of Yamaha Motor Co., Ltd, Japan (YMC). Presently, its product portfolio includes: [6]  VMAX (1,679cc)  Fazer (153cc)  SS125 (123cc)  MT01 (1,670cc)  FZ-S (153cc)  YBR 125 (123cc)  YZF-R1 (998cc)  FZ16 (153cc)  YBR 110 (106cc)  FZ1(998cc)  SZ-R(153cc)  Crux (106cc)  YZF-R15 version 2.0 (150cc)  SZ & SZ-X (153cc) 5.1 Market Segmentation Yamaha caters to the market of tier I and tier II cities. It caters to males between the age group of 18 to 35. It caters to upper middle class families. It has high pick up and speed. It is the most innovative and most stylish bike manufacturers. Therefore, it is youth centric. 5.2 Target Market Yamaha has single segment concentration. It is known as a racing bikes manufacturer. Speed Biking is mainly attributed to Yamaha. Thus positioning itself as a ‘manufacturer of safety first’ bikes, as well as the most style conscious segment. It also focuses on comfort, technology advancements. Its target customers are the people who are sporty, thrill loving and style conscious. 8
  9. 9. 5.3 Positioning Strategy 5.3.1 YES Yamaha Advertisement YES stands for Yamaha extended services. It tells that now Yamaha is growing in all parts of the country. It has good nationwide service. It can be purchased easily. It gives good pick up, speed and better mileage. It provides comfort. Therefore, this advertisement portrays Yamaha as common man’s racing bike. It conveys the message of ‘staying ahead of tortoises’ focusing on the speed of the bike. 5.3.2 Celebrity endorsements John Abraham is the brand ambassador for Yamaha SZR. The hard sturdy look of the bike can be correlated with the masculinity of John Abraham. It thus says that it is a bike for all masculine, speed and thrill loving people. 5.3.3 Use of songs for advertisement Yamaha thought it is the best way to portray the efficiencies of the bikes. To enhance the advertisement and make it appealing, the song “Ruk Jaana Nahin” has been used as the background score. The campaign is a 9
  10. 10. national level campaign catering to regional markets as well including south, west and east India. The target consumer is essentially 24 yrs & above from SEC A/B and preferably male. 5.4 Conclusion Yamaha reflects racing bikes in India. It has good pick up and speed. It is famous for its sturdy, stylish looks and best technologies. It caters to upper middle class and middle-middle class income group, especially adult. 6. Bajaj Auto Ltd. Bajaj Auto Limited, is an Indian motorized vehicle-producing company. Bajaj Auto is a part of Bajaj Group. Its founded by Jamnalal Bajaj at Rajasthan in the 1930s. Bajaj Auto is the world's third-largest manufacturer of motorcycles and second-largest in India.Over the last decade, the company has successfully changed its image from a scooter manufacturer to a two-wheeler manufacturer. Its product range encompasses scooterettes, scooters and motorcycles. Its real growth in numbers has come in the last four years after successful introduction of a few models in the motorcycle segment.[7]  CT 100  Platina  Avenger  Discover  Eliminator  Wind 125  Caliber 115  Pulsar 150 KS  Kawasaki Ninja  Boxer 6.1 Market Segmentation Bajaj caters to the mass consumer. It caters to middle-middle and upper middle income group of consumers. It does not have the rural support. It still lags behind in the rural areas. It caters to aspiring young men of the country. 6.2 Target Market 10
  11. 11. Bajaj follows selective specialization while targeting its consumers. Its concentrates on the youth of the country who are technology freak. It offers a wide variety, so that it can cater to various income groups of the country. 6.3 Positioning Strategy 6.3.1 Celebrity endorsement The very first TV Commercial of the Bajaj Discover DTSi (125 cc at that time) in 2004 featured the Cine Star of Asia, Jackie Chan. Jackie Chan is known for his fast moves, action, and quick reflexes. So the features of this bike could be easily related to that of Jackie Chan. The bike is fast, has speed and technology and can survive in all sorts of roads. This advertisement convinces you to be a master who always wins similar to Jackie Chan. It portrays the image of the bike to be a master piece. 6.3.2 Pulsar mania This advertisement symbolizes bike stunts of different range. The campaign beard innovative punch line of “Definitely Male” positioning pulsar to be a masculine – looking model with an appeal to sensitive customers. It boosts the male ego of its target customers. It makes them feel themselves as the fastest Indian. 11
  12. 12. 6.3.3 Discover India with the power of 1 L petrol This advertisement positions Bajaj as a fuel efficient bike with a greater mileage. It makes you feel that you can travel to the most exhaustic and amazing places in India, i.e., discover the undiscovered India. This also gives a patriotic touch to the mindset of people making them fell proud of their nation. You can cross crowded 12
  13. 13. lanes, mountain paths and explore the rich heritage if India without any worries of oil refilling. 6.3.4 Hamara Bajaj This was the tag line of Bajaj Auto Ltd. It positions Bajaj as your own bike. It gives the feeling of belongingness therefore playing with the emotions of the consumers. 6.4 Conclusion Bajaj is the second largest manufacturer of bikes in India after Hero Moto Corp. Its twin spark technology, speed, fuel efficiency had made a favorite in Indian roads. It gives you a feeling of belongingness. It makes you feel ‘male’ and emotionally binds you to Mother India. 7. TVS Motor Company TVS Motor Company is the third largest two-wheeler manufacturer in India and one among the top ten in the world, and is the flagship company of the USD 4 billion TVS Group. TVS Motor currently manufactures a wide range of two-wheelers from mopeds to racing inspired motorcycles. Their bike’s range includes:  Apache RTR 180  Flame DS 125  Flame  TVS Jive  StaR City  Sports 13
  14. 14. 7.1 Market Segmentation The range of TVS bikes are less. It caters to the lower middle class and the middle-middle class income groups. It caters to the youth. It segments itself on the basis of gender as well – as it caters to male. 7.2 Target market TVS focuses on the multisegment strategy of targeting the market. It caters to youth of both lower middle class and the middle-middle class income groups. It caters to those who are passionate about owning a bike. 7.3 Positioning Strategy 7.3.1 Celebrity endorsements TVS endorses Sachin Tendulkar as its brand ambassador. Sachin is a the greatest cricketer India has ever produced. Hence people can easily link to it as something great and good. So, TVS positions itself as a bike that is safe, balance and can be easily maintained. 7.3.2 Powerful and stylish This advertisement shows that TVS bikes are stylish, powerful, masculine and can be easily flaunted off amongst peers. It gives you a feeling of superiority. 14
  15. 15. 7.4 Conclusion The aggressive marketing strategy along with the changed approach to advertisement campaign boosted the demand for the TVS models. They can be easily affordable, reliable and easy to maintain. TVS has positioned itself well in the bike’s sector. It arises a passion in you to own something that you feel proud of. 8. Harley Davidson Harley-Davidson often abbreviated H-D or Harley is an American motorcycle manufacturer. Founded in Milwaukee,Wisconsin, during the first decade of the 20th century, it was one of two major American motorcycle manufacturers to survive the Great Depression. The company sells heavyweight (over 750 cc) motorcycles designed for cruising on the highway. Harley-Davidson motorcycles (popularly known as "Harleys") have a distinctive design and exhaust note. They are especially noted for the tradition of heavy customization that gave rise to the chopper-style of motorcycle.[8] 8.1 Market Segmentation It caters to tier I and tier II cities. It caters to touring enthusiastic and outdoor oriented male of high income groups between the age of 27 to 45. It caters to innovators or achievers who are self employed business men and are ready to buy the product. They want to but it for leisure riding, planning weekend rides etc. 8.2 Target market It caters to people who golf, who own yachts, indulge in leisure activities, hoteliers, resort owners in tourist destinations are always looking to add new luxury items intotheir fleet for their clients to indulge into leisure activities. 8.3 Positioning Strategy The brand positions itself as:  Masculine 15
  16. 16.  Free spirited  Rugged  Macho  Strong  Adventurous 8.4 Conclusion Harley Davidson is a bike of the premium category. It caters to the high end people who wish to derive pleasure while riding them. 9. References 1. (assessed on 10.9.2012) 2. (assessed on 10.9.2012) 3. Philip Kotler, Marketing Management (Pearson Education, Eleventh Edition), ch. 10. 4. Philip Kotler, Marketing Management (Pearson Education, Eleventh Edition), ch. 11. 5. (assessed on 10.9.2012) 16
  17. 17. 6. (assessed on 10.9.2012) 7. (assessed on 10.9.2012) 8. (assessed on 10.9.2012) 17
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