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Two Wheelers in Rural India
The document discusses two-wheeler companies in India and their strategies for marketing in rural areas. It provides details on Hero Honda/Hero Motocorp's extensive rural network covering thousands of villages, its "hub and spoke" distribution system, promotions during local festivals, and partnerships with local cooperatives to provide financing, demonstrating its strong focus on rural markets compared to its competitors. Hero Honda derives around 60% of its revenue from rural areas, higher than the industry average of around 45%.
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Two Wheelers in Rural India
- 1. TWO WHEELER COMPANIES BJ V S P VARUN (12PGP012) DEBOLEENA PANJA (12PGP069) 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 1
- 2. WHY RURAL INDIAMATTERS 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 2
- 3. CHALLENGES OF RURALMARKET IN INDIA No. 1 • Large population base and number of households indicates a widely spread out market • It is a challenge for the marketer to service this dispersed market. • Number of the villages is more than Five lakhs and is not uniform in size. • Nearly half of the population lives in middle sized villages which have a population ranging from 1000 to 5000 persons. • These types of distribution of population warrants appropriate distribution and promotion strategies to decide the extent of coverage of rural market. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 3
- 4. CHALLENGES OF RURALMARKET IN INDIA No. 2 • • • • • The rural per capita income is low as compared to urban area. Low per capita income leads to low purchasing power. The distribution of income is highly skewed. Rural market presents a highly heterogeneous scene. Therefore few challenges arise in this respect: – Off-taking of any product by rural consumer – Maintaining of inventory levels – Distribution system options – Frequency of distribution. • This aspect should be carefully considered by the marketers. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 4
- 5. CHALLENGES OF RURALMARKET IN INDIA No. 3 • There are lacks of proper physical communication facilities in rural areas. • Nearly half of the villages in the country do not have all-weather roads. • Reaching these villages is very physically taxing. • Distribution efforts put up by the marketers prove to be expensive and ineffective. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 5
- 6. CHALLENGES OF RURALMARKET IN INDIA No. 4 • Are characterized by underdeveloped people and consequently underdeveloped market. • A vast majority of rural people is not financially stable and is tradition-bound, fatalistic, mired in age-old customs, traditions, habits, taboos, and practices. • Unfortunately, the impact of agricultural technology has not been felt uniformly throughout the country. • The large segments of rural population have remained untouched by technological breakthroughs. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 6
- 7. CHALLENGES OF RURALMARKET IN INDIA No. 5 • There are vast variations in the levels of literacy amongst rural people. • Around two-fifth of the rural population is illiterate and only one-fifth holds a matriculate or higher degree. • Literacy levels vary hugely among different states. • These variations pose a challenge to easy and clear comprehension of the message by all sets of rural audience. • The limited reach of mass media in rural areas and its regional and state variations pose 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 7
- 8. TWO WHEELER MARKET • • • • Salesof ₹ 620 billion in the year 201213 Volume of 15.7 million units CAGR of 14.3% Divided into three segments - motorcycles, scooters and mopeds. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 8
- 9. ESTIMATED ANNUAL SIZEOF RURAL MARKET FMCG Durables Rs. 65,000 Cr Agro-Inputs Rs. 55,000 Cr Two-Four Wheelers 11/27/2013 Rs. 75,000 Cr Rs. 10,000 Cr INDIAN INSTITUTE OF MANAGEMENT RAIPUR 9
- 10. SALES VOLUME INTWO WHEELER MARKET 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 10
- 11. STATE OF AUTOMOBILESECTOR IN RURAL INDIA • The rural market contributes approximately 45% of the total industry demand • Only 10% of the households own a twowheeler in the rural areas 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 11
- 12. AUTOMOBILE- SHARE OFRURAL MARKET AS A % OF OVERALL MARKET Scooters 11/27/2013 Motorcycles Cars/Jeeps The rural market contributes approximately 45% of the total industry demand Only 10% of the households own a two-wheeler in the rural areas INDIAN INSTITUTE OF MANAGEMENT RAIPUR 12
- 13. TWO WHEELER- PLAYERWISE DOMESTIC SHARE 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 13
- 14. DEMOGRAPHIC TRENDS The growthin two-wheeler demand would be aided by: • rapid increase in the number of addressable households in the rural market • higher penetration levels in urban markets. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 14
- 15. DEMOGRAPHIC TRENDS 11/27/2013 INDIAN INSTITUTEOF MANAGEMENT RAIPUR 15
- 16. FACTORS AFFECTING RURALINCOME • Value of crop output: direct measure of farm income 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 16
- 17. FACTORS AFFECTING RURALINCOME • Agricultural credit: indirect measure influencing purchasing power 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 17
- 18. FACTORS AFFECTING RURALINCOME • Government initiatives: – Loan Waiver – MGNREGA – Expenditure on rural development 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 18
- 19. POWER OF ARURAL CUSTOMER • A sugar co-operative in Maharashtra's Kolhapur district • Asked Hero, TVS and Kinetic to stage a competitive demonstration • So that they could order 400 mopeds 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 19
- 20. HISTORY- 1980s • LunaTFR : Shaan se bolo “Chal Meri Luna” • TVS 50 XL : the first entry two-seater moped • The uses: – Farmer taking his family to nearby town. – Farmer carrying two sacks of paddy – Dhobi carrying a massive bundle of clothes 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 20
- 21. HISTORY- 1980s • Hero: India’s leading brand of cycles, launched Hero Puch in 1989 • Target: Orthodox breadwinner who wanted a convenient, fuel efficient, lowpriced vehicle 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 21
- 22. HISTORY- 1990s • Bajaj: 1st to come out with a scooterette Sunny • TVS: brought out Scooty • Hero - Puch – Urban: Turbo sport in flashy colors, style (roped in the teeny-boppers craze Amir Khan) – Rural: additional gear into higher-end-models – Semi-rural: Hero Puch Shakti with more power 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 22
- 23. 11/27/2013 INDIAN INSTITUTE OFMANAGEMENT RAIPUR 23
- 24. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ABOUT THE HERO HONDA • "We pioneered India's motorcycle industry, and it's our responsibility now to take the industry to the next level. We'll do all it takes to reach there.'' - Brijmohan Lal Munjal, Chairman, Hero Honda Motors 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 24
- 25. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ABOUT THE HERO HONDA • Incorporated as Hero Honda Motors Ltd in 1984 • JV between Hero Group and Honda Motor Company (HMC) of Japan. • The world's largest manufacturer of twowheelers since 2001 • Ended the JV in 2010. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 25
- 26. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ABOUT THE HERO HONDA • Leading manufacturer of motorcycles and scooters in India. • Derives around 60% of its revenue from rural areas as compared to approximately 45% for the industry as a whole. • Derives approximately 10% of its total sales from credit sales as compared to approximately 50% for its peers. • HHML’s relatively lesser dependence on credit sales in the environment of credit crunch provides it an edge over other domestic players. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 26
- 27. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ABOUT THE HERO MOTOCORP • Hero Motocorp Ltd. 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. • The 2006 Forbes 200 Most Respected companies list has Hero Honda Motors ranked at #108. • In 2010, when Honda decided to move out of the joint venture, Hero Group bought the shares held by Honda. • Subsequently, in August 2011 the company was renamed Hero MotoCorp with a new corporate identity. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 27
- 28. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ABOUT THE HMSI • Honda Motorcycle and Scooter India, Private Limited is the wholly owned Indian subsidiary of Honda Motor Company Limited, Japan. • Founded in 1999, it was the 4th Honda automotive venture in India, after Hero Honda, Kinetic Honda Motor Ltd & Honda Siel Cars India. • The HMSI factory is built on a plot of 52 acres (210,000 m2) at Manesar, Gurgaon district of Haryana. • The initial production capacity was 100,000 scooters per year, which is currently 600,000 scooters. • The motorcycle production capacity is 1,000,000 per annum. • The initial investment was Rs. 215 crores and has now grown to 800 crores. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 28
- 29. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML WHY TWO WHEELERS? • Two–wheelers are a dominant segment of India because – India on an average sells approximately seven million motorcycles and scooters every year compared to about 1.5 million passenger vehicles – making it the second biggest two-wheeler market in the world,behind China. – According to the latest estimates, only 23% of urban households and less than 10% of rural households own a two wheeler. – These penetration levels are only a fraction of the levels in other developing South east Asian Countries. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 29
- 30. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML DEFINITION OF RURAL • P. S. Sunder, who heads marketing at Hero Honda defines: – "Rural is defined by the character of the territory. Loosely, we term 400 towns beyond top 50 as rural." • Around 7.5 million two-wheelers were sold in the country in 2005 and, according to Sunder, 35 per cent of these were sold in 'rural markets' 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 30
- 31. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML WHAT IS HH DOING THAT THE COMPETITION ISN'T? • Penetration in urban areas is 25 per cent, it is only 10 per cent in rural areas • 'Har Gaon, Har Aangan' was launched to generate sales in rural and semi-urban areas. • Result of aggressive focus on the semi-urban and rural markets. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 31
- 32. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML IN RURAL INDIA • Began its operations in 1984 • In late 2007, Hero Honda started putting emphasis on the rural markets • In December 2007, the company started a separate 'rural vertical‘ 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 32
- 33. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML IN RURAL INDIA • Started sales, servicing, and spare part outlets in several small towns and villages across the country • Recruited local people as sales executives and trained them to market its products to rural consumers • In the fiscal year 2008-09, the sales of Hero Honda from the rural market amounted to 40 percent of the total sales compared to 35 percent during the fiscal year 2007-08 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 33
- 34. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML IN RURAL INDIA • 60 percent of its sales come from rural markets • Good performance of its mainstays, Splendor and Passion has helped it record sales of nearly 30 lakhs in first 10 months of FY09 • Increasing touch points in tier 2 and tier 3 cities from present 3000 to 3500 (Feb 16, 2009) 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 34
- 35. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML RURAL THRUST • RURAL NETWORK – During the financial year 2007-2008, the rural network of Hero Honda covered 18,000 of the targeted 23,360 villages with a population of more than 5,000 across India – The company also announced its plan to cover 100,000 villages of the total 600,000 villages in India by the end of the financial year 2008-09 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 35
- 36. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML RURAL THRUST • DISTRIBUTION – Hero Honda followed a "Hub and Spoke System" in distributing its products in rural areas – The company gave a dealership to one dealer who would take care of a district. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 36
- 37. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML RURAL THRUST • PROMOTION – Hero Honda promoted its products aggressively – during festive seasons in different regions of India – As sales during festive season was generally higher compared to the rest of the year 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 37
- 38. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML RURAL THRUST • RETAIL FINANCE – The growth of the Indian two-wheeler industry was highly dependent on the availability of retail finance – According to analysts, lack of financing could result in a decline in sales – Opened up new options of Retail Finance in Rural India 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 38
- 39. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML RURAL INITIATIVES • Tying up with new dealers in rural areas • Bringing in local co-operatives to provide finance • Company plans to cover 100,000 of the 600,000 villages by the end of this financial year under the program ‘Har Gaon Har Aangan’ • Region specific modules to tap consumers at a very local level 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 39
- 40. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML RURAL INITIATIVES • Festivals such as Pongal and Onam in the South, Gudi Padwa in Maharashtra, Durga puja in the east, Dhanteras and Diwali in the North are being leveraged • The company has employed over 500 specially trained rural sales executives at the dealership level. • Under their rural vertical their dealers meet sarpanches, headmasters, aanganwadi workers and other opinion makers to understand the rural consumer better 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 40
- 41. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML RURAL INITIATIVES • A total of 18000 villages have already been covered out of the targeted 23360 villages with population over 5000 • 100,000 opinion leaders have been approached • Village haats and mandis are being targeted to reach consumers • Penetration into affluent but underpenetrated rural towns through specialized ‘Rural Dealerships’; thirteen such dealerships have become operational 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 41
- 42. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML RURAL INITIATIVES • In addition to these, around 3750 rural outlets have been created in towns with population below 25000. • These are serviced by the dealer network • Training sons and daughters of village VIP’s who are opinion makers and thought leaders of their villages • Trying to involve rural self help groups through its financial subsidiary BAFL to promote credit. • It had also launched a special variant for the rural markets – Discover 112cc priced at Rs.39000. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 42
- 43. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML 4 As OF HERO Availability • Hero has 4 manufacturing plant • extensive sales and service • follow a "Hub and Spoke System“ 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 43
- 44. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML 4 As OF HERO Affordability • Hero Honda offer cheapest motorcycles • Hero Honda with the help of tie ups with banks provides loan • Special event pricing by Hero 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 44
- 45. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML 4 As OF HERO Awareness • Hero Honda Motors Ltd was the top advertiser • Five hundred sales representatives were taken on board for the mission Har Gaon, Har Aangan • Hero Honda also organizes free service camps every year. • Hero Honda also takes part in trade fair, haats, melas etc. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 45
- 46. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML 4 As OF HERO Acceptability • strong brand image and product quality. • considered to be most fuel-efficient bike on Indian roads. • purchased more by daily users who needs more average of bikes as well as look. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 46
- 47. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML • Set up a separate rural vertical in 2007 • Identified fuel efficiency and smaller engine sizes would be the governing characteristics in this market • Biannual studies of “Usage and attitude” • Rural footprint studies on a quarterly basis to chart different events taking place in villages for increased sales push 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 47
- 48. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML BIKES FOR RURAL • • • • • CD 100 CD dawn Splendor Passion CBZ Extreme 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 48
- 49. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML BIKES FOR RURAL 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 49
- 50. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML BIKES FOR RURAL 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 50
- 51. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • seeks to build an ongoing relationship with millions of households in rural India as penetration is only 8% • 500 sales representatives were initially hired and given work tasks rather than sales targets • No direct sales outcome 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 51
- 52. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • Plan to cover 100,000 of the 600,000 villages. • aims to ensure that the purchase and service of two wheelers in India is affordable and convenient. • organise free bike check-up camps, loan melas, OLCP, test ride camps, conducting Ride Safe Programmes to educate customers on Safety and Maintenance 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 52
- 53. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • Collecting a lot of data at rural touch points • many of our dealers are now meeting sarpanches, headmasters, aanganwadi workers and other opinion makers to understand the rural consumer better. • Strengthened its distribution network considerably • The number of touch points (dealerships plus sales and service outlets) is already 3,000 and another 500 would be added. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 53
- 54. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • Dealer inventories are down to 15-day levels against the annual average of 20 days for Hero Honda. • Purchases have also seen an increase in the cash versus financed buying from 60:40 earlier to 70:30 now. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 54
- 55. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • As most of its consumers are rural villagers who depend on loan to buy a 2 wheeler • Plans to cover 100,000 of the 600,000 villages in the country by the end of this financial year under a campaign named Har Gaon, Har Aangan (every village, every household). • Hero Honda has 3000 dealers and service outlets in India 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 55
- 56. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • RATIONALE – The two-wheeler penetration in the urban market is 25 per cent, while it is only 10 per cent in the villages, where 70 per cent of India lives. • Rural elders have been roped in to communicate message to prospective customers • In villages, the opinions of people such as village panchayat heads and teachers are taken seriously. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 56
- 57. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • IMPLEMENTATION • First Leg: Usage & Attitude studies, – Conducted by the company’s in-house research team once in every two years – Study captures every aspect of the potential customers’ lives – Tracks aspects like the level of awareness of brand Hero Honda, the current modes of transportation, what is the expectation of the customer from motorcycles etc 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 57
- 58. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • IMPLEMENTATION • Second Leg: Rural Footprint studies – Quarterly basis – Chart events that will take place in villages – Core idea is to take the brand to the customer when he is in a happy mood 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 58
- 59. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • IMPLEMENTATION • Third Leg – Ensure that the village customer doesn’t postpone buying a two wheeler just because there’s no cash in hand – Entered into numerous vehicle finance tieups with NBFCs, cooperative banks and regional rural banks – Such 30 tie ups • Fourth Leg – Ongoing Activation 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 59
- 60. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • IMPLEMENTATION • The company rolled out its on-ground activation for the rural customers • has doubled its touch-points in rural areas from 2,000 in 2006 to nearly 4,000. • They appointed 500 rural sales executives who are busy in meeting the sarpanch, the headmaster and the anganwadi workers in villages all over the country. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 60
- 61. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • IMPLEMENTATION • They are also visiting potential customers at their homes, inviting them to drop in at the company’s dealerships which might be located a few kms away. • The frequency of their visits increases in the days of Dussehra and Diwali and other celebrations of the village. • These festivals account for almost a fifth of the total annual sales of the country’s largest two-wheeler maker. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 61
- 62. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • IMPLEMENTATION • Usage & Attitude studies are conducted by the company’s in-house research team once in every two years. • The study captures every aspect of the potential customers’ lives. • It tracks aspects like the level of awareness of brand Hero Honda, the current modes of transportation, what is the expectation of the customer from motorcycles etc. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 62
- 63. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • IMPLEMENTATION • The company is also doing Rural Footprint studies on a quarterly basis. • Under this, they chart the events that will take place in villages. • The core idea is to take the brand to the customer when he is in a happy mood. And these happy times are linked to good harvests, festivals and marriages when there is cash in hand. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 63
- 64. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • IMPLEMENTATION • To ensure that the village customer doesn’t postpone buying a two wheeler just because there’s no cash in hand • Hero Honda has entered into numerous vehicle finance tie-ups with NBFCs, cooperative banks and regional rural banks. • They have 30 such tie ups. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 64
- 65. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • IMPLEMENTATION • The other cornerstone of Hero Honda’s success with its Har Gaon, Har Angan campaign is the choice of media vehicles. • The company banks on good old Doordarshan for this. • DD’s reach in the rural areas is a good enough bet to reach the target customer. • It has invested heavily in cricket on DD. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 65
- 66. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • MEDIA • Banks on good old Doordarshan for this • DD’s reach in the rural areas is a good enough bet to reach the target customer • Invest heavily in cricket on DD 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 66
- 67. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • ROAD AHEAD • Hero Honda increased its production capacity at its Haridwar manufacturing plant from 2,000 units per day to 3,000 units per day in January 2009 • Took advantage of the tax benefits offered by the government to companies for establishing manufacturing plants in hill states like Uttarakhand • In short , Tremendous growth prospects in future 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 67
- 68. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • REASON FOR MOU • Banks and NBFCs are still reluctant to lend loans for 2 wheelers because of the high rate of loan defaults. • SBI, which has close to 6505 rural and semiurban branches, does not have the reach to service the motorcycle loans and also setting up branches to service few potential customers in villages does not make sense. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 68
- 69. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • MOUs • Fullerton India (NBFC non-banking financial company) • Hero Honda and Andhra Bank • The tie-up is particularly aimed at those in the farm sector, salaried employees and institutional customers. • Buyers can avail themselves of loan up to 90 per cent on the road price. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 69
- 70. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HAR GAON HAR AANGAN • unique initiative of the ‘Har Gaon Har Aangan’ programme was ‘Khushiyan Har Angan’. • Delivered a special message from Hero MotoCorp and distributed branded box of sweets with diyas during Diwali 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 70
- 71. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML OTHER HERO HONDA INITIATIVES • Sponsoring Women’s Asia Cup Hockey Tournament. • Miss World India Regent • Constructing roads in villages. • World Cup Cricket Tournament • Durand Cup Football • Army Officers’ Rally 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 71
- 72. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML DEALERS AND SERVICE CENTERS 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 72
- 73. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML DEALERS AND SERVICE CENTERS •In the last 18 months, its 360 dealers all over the country have reported the emergence of an unofficial channel of distribution •Village mechanics, local real estate agents, shopkeepers who sell non-durables and so on. •These people are taking motorcycles from the official dealers - usually in 2s and 3s -- displaying them outside their premises and closing a sale. •The paperwork, though, is left to the dealer to complete. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 73
- 74. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML SALES CAMP AT AGRI MILLS 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 74
- 75. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML SALES CAMP AT AGRI MILLS •A Hero Honda dealer who regularly puts up stalls at agri-mills to target farmers. •He also puts up stalls outside factories and electricity boards, keeping in mind the product and the profile of the farmer/worker. •According to the dealer, setting up such a stall costs him around Rs 1,000 •He is able to target 1,000 high-potential consumers. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 75
- 76. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML SARAL FINANCE 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 76
- 77. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML SARAL FINANCE • made it easier for rural Indians to own their favourite two wheelers through a tie-up banks. • This ensured best rates, easy documentation and hassle-free processes. • Shwet-Labh, a specially designed loan package for Milk Cooperative members. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 77
- 78. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML SERVICE HAR JAGAH 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 78
- 79. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML SERVICE HAR JAGAH • Camps in villages- on the same specified day every month • Enables customers to service in their villages rather than travelling. • 600 rural support executives • 1,100 Customised bikes to cover more than 7,500 villages a month 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 79
- 80. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML DHADKANON KI RALLY • Partnered CWG Delhi,2010. • Lined up nation wide baton bearers to provide common man with a chance to participate in the Queen’s baton Relay. • Saw participation in close to 22,000 villages across the country. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 80
- 81. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML NAYE INDIAN KI KHOJ • Activation programme to identify a Naya indian in each district • Significant contribution in the fields of education, women empowerment, social and health • Added sheen to the brand • Received almost 20,000 nominations 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 81
- 82. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML FREE CHECK-UPS • Organizing free vehicle servicing and medical camps • In over 100,000 villages around the country • To bolster its presence and attract new customers 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 82
- 83. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML FESTIVE SEASON (2013) • Has the highest exposure to rural markets (45-48 per cent of sales) among two-wheeler makers • has lined up about 12 models to be launched over 18 months. • This should help it gain volume traction from the festive season and consolidate its position. • able to regain market share, from 40 per cent in the September quarter last year to 44 per cent at the end of the June quarter. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 83
- 84. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML AUTHORISED REPRESENTATIVES OF DEALERS – A new layer added to distribution network – similar to hub and spoke model. • Within a district, the company’s main liaison is located in the district headquarters. • Under him are “authorized representatives”— smaller dealerships where locals can make purchases and also get their bikes serviced. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 84
- 85. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML AUTHORISED REPRESENTATIVES OF DEALERS • These ARDs are appointed and managed by the dealers through a profit-sharing mechanism. • no additional investments in the supply chain from its side. • ramped up its touch points increasing its network of showrooms and service centers to around 4,000. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 85
- 86. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML CBZ EXTREME ACTIVATION PROGRAMME 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 86
- 87. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML CBZ EXTREME ACTIVATION PROGRAMME 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 87
- 88. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML HUNK ACTIVATION PROGRAMME 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 88
- 89. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML SPLENDOR ACTIVATION PROGRAMME 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 89
- 90. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML SPLENDOR ACTIVATION PROGRAMME 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 90
- 91. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML CSR ACTIVITIES IN RURAL INDIA • Dharuhera, Haryana – Integrated Rural Development Centre has been set up on 40 acres of land along the Delhi-Jaipur Highway • Includes – Installation of deep bore hand pumps to provide clean drinking water. – Constructing metalled roads 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 91
- 92. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML CSR ACTIVITIES IN RURAL INDIA • Includes – Renovating primary school buildings and providing hygienic water and toilet facilities. – Ensuring a proper drainage system at each of these villages to prevent water-logging. – Promoting non-conventional sources of energy by providing a 50 per cent subsidy on biogas plants. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 92
- 93. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML CSR- RAMAN MUNJAL VIDYA MANDIR • began with three classes (up to class II) and 55 students • grown into a modern Senior Secondary –CBSE affiliated –co-educational school –with over 1200 students – and 61 teachers 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 93
- 94. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML CSR- RAMAN MUNJAL VIDYA MANDIR • The school has –a spacious playground –an ultra-modern laboratory –a well-equipped audio visual room –an activity room –a well-stocked library –a computer centre 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 94
- 95. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML CSR- RAMAN MUNJAL MEMORIAL HOSPITAL • Multi-specialty hospital equipped with the latest diagnostic and surgical technology • provides healthcare to the rural population in and around Dharuhera • Also caters to accident and trauma victims 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 95
- 96. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML CSR- RAMAN MUNJAL SPORTS COMPLEX • has basketball courts, volleyball courts, and hockey and football grounds are used by the local villagers. • in the near future, sports academies are planned for volley ball and basket ball, in collaboration with National Sports Authority of India 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 96
- 97. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML CSR- VOCATIONAL TRAINING CENTRE • 26 batches comprising of nearly 625 women have been trained in tailoring, embroidery and knitting • The Company has helped women trained at this centre to set up a production unit to stitch uniforms for Hero Honda employees. • Interestingly, most of the women are now self-employed. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 97
- 98. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML 100-CC BIKES FOR RURAL PUSH IN INDIA • Betting on the small capacity 100-cc economy bikes as it embarks upon a rural push in the world's second biggest two-wheeler market. • Likely to bring in a new improved engine with fresh design cues to attract young and rural India. • Has started ramping up its dealer network and approached existing dealers in metros to open units in rural markets. • It will add 300 sales outlets under 100 dealers this year to its existing 1,200 outlets. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 98
- 99. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ‘GO RURAL’ CAMPAIGN • Overtake former partner Hero MotoCorp and Bajaj Auto in India. • Has set up a core team to identify villages and remote areas where Hero has an enormous presence. • HMSI has launched a new brand campaign with new brand ambassador Akshay Kumar. • Company adopting its global tagline - Power of Dreams. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 99
- 100. 11/27/2013 INDIAN INSTITUTE OFMANAGEMENT RAIPUR 100
- 101. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ABOUT THE COMPANY • Bajaj Auto Limited is an Indian two-wheeler and three-wheeler manufacturing company. • Bajaj Auto manufactures and sells motorcycles, scooters andauto rickshaws. • Bajaj Auto is a part of the Bajaj Group. • It was founded by Jamnalal Bajaj in Rajasthan in the 1930s. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 101
- 102. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ABOUT THE COMPANY • Three manufacturing plants. • It is based in Pune, Mumbai, with plants in Chakan (Pune), Waluj (near Aurangabad) and Pantnagar in Uttarakhand. • 1986, change from scooter manufacturer to two wheeler manufacturer. • The oldest plant at Akurdi (Pune) now houses the R&D centre 'Ahead'. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 102
- 103. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ABOUT THE COMPANY • Third-largest player in the domestic twowheelers industry. • Largest Indian exporter of two and threewheelers. • On 31 March 2013, its market capitalisation was INR 520 billion, making it India's 23rd largest publicly traded company by market value. • The Forbes Global 2000 list for the year 2012 ranked Bajaj Auto at 1,416. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 103
- 104. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ESTIMATED MARKET SHARE IN SUB SEGMENTS 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 104
- 105. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML PLATINA 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 105
- 106. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML DISCOVER 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 106
- 107. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML PULSAR 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 107
- 108. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ABOUT THE COMPANY • third-largest player in the domestic twowheelers industry. • largest Indian exporter of two and threewheelers. • The Forbes Global 2000 list for the year 2012 ranked Bajaj Auto at 1,416. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 108
- 109. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML BAJAJ BOXER • The company added, Boxer 150 cc which is dubbed as 'Tank on Two Wheels' in August, 2011 targeting the rural market. • Bajaj discontinued the boxer 100cc and 125cc variety since the rural market has been experiencing the change as reflected in the pattern of sales 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 109
- 110. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML RURAL STRATEGY • Bajaj Auto introduced seasonal collection strategy for rural areas. • This would mean that instead of monthly installments , rural customers can time their loan repayment to crop cycle, which is 2-3 months for rice and wheat. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 110
- 111. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML RURAL STRATEGY • Rural Dealership • First of which has been opened at Niphad, near Nashik, 2005 • In the year they planned to increase it to 20 and 50 by the end of 3 years. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 111
- 112. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML BAJAJ KISAN CHAKRA • MoU Between Andhra Bank and Bajaj Auto • Interest rate for farmers: 9.75% • Free 2 lakh personal accident insurance policy by both parties • 5% discount on spare parts. • 10% discount on paid labour • Five-year repayment tenure with a flexibility to pay once in half-year will be provided. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 112
- 113. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML LIST OF SOME OF BANKS OFFERING TWO WHEELER LOANS • • • • ICICI Bank - Deals on Two Wheeler Loans Bank of Baroda - Baroda Two Wheeler Loan HDFC Bank - FastTrack Schemes State Bank of India - Scheme For Loan For Two Wheelers • Bank of India - Star Autofin Scheme • Andhra Bank - Quantum of Finance For Two Wheelers • Union Bank of India - Union Miles 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 113
- 114. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML DEALERSHIPS AND CHEQUELESS LOAN SCHEME • Special finance scheme from its Bajaj Auto Finance • The rural customer could buy Bajaj two-wheeler without having a bank account. • New dealerships will operate from March end and six out of its every 10 new dealerships are in semi-urban areas like Hingoli of Maharashtra • The result was that Bajaj was able to improve its market share to more than 30% while its share was 27%. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 114
- 115. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML DIWALI PLANNING (2013) • Better-than-average monsoon is likely to encourage the rural demand for auto companies. • Rural incomes are anticipated to rise on account of better yields and higher minimum support prices for agri-produce due to elections. • Has strong presence in the rural area and nearly half of the two-wheelers are bought by rural consumers. • We expect low penetration level, lack of adequate mode of public transport and rising per capita income in rural India would lead to long-term healthy demand for two-wheelers. • BAL is betting on Discover launches, upcoming festive season, good monsoons and opening of new permits for three wheelers to revive its market share. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 115
- 116. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML RURAL ACTIVATION PROGRAMS • Conduct Skits • Contact Opinion leaders 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 116
- 117. 11/27/2013 INDIAN INSTITUTE OFMANAGEMENT RAIPUR 117
- 118. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ABOUT THE COMPANY • • • • Lohia Machineries Limited Tie up with Piaggio of Italy in 1984 Direct competition with Bajaj Chetak Launch of LML Select in 1993 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 118
- 119. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML LML SELECT 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 119
- 120. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML LML STAR 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 120
- 121. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML LML STAR 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 121
- 122. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML • By 1998, LML was the second largest scooter manufacturer in India with a market share of over 28 %. • LML was not able to upgrade the scooters since the JV with Piaggio was called off in 1999 • Entered the motorcycle segment in 2003 with LML Freedom. • LML could not emulate the success of TVS in launching indigenous technology and surviving the aftermath of a failed technical collaboration 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 122
- 123. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML LML FREEDOM 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 123
- 124. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML LML ADRENO 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 124
- 125. 11/27/2013 INDIAN INSTITUTE OFMANAGEMENT RAIPUR 125
- 126. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ABOUT THE COMPANY • TVS Motor Company Limited is a part of TVS Group. • Established by Thirukkurungudi Vengaram Sundaram Iyengar. • Manufactures motorcycles, scooters, mopeds and auto rickshaws in India. • Won the Deming Application Prize in 2002. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 126
- 127. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML RURAL INITIATIVES • To drive deeper into lucrative rural markets TVS developed an alternate channel through direct marketing. • The program was handled by RC&M. • The area influencers were involved in the program. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 127
- 128. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML AGENDA Srinivasan Services Trust (SST) TVS Chakra ‘POSTMAN AKSHAYA’ ‘WOW’-Women On Wheels Community Development & Social Responsibility Bikes for Rural India 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 128
- 129. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML SRINIVASAN SERVICES TRUST • Trust co-sponsored by TVS Motor Company with the vision of building self-reliant rural communities. • SST extended its coverage to 363 villages, serving a population of 3.71 Lakhs. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 129
- 130. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML SRINIVASAN SERVICES TRUST • Significant achievements – 100% enrolment of children in Balwadis and Schools. – 1,12,000 hectares of degraded forest land reforested. – 5,830 hectares were covered under Watershed Program. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 130
- 131. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML SRINIVASAN SERVICES TRUST • Significant achievements – Regular income of over Rs.4,000/- per month for 14,446 families. – No case of Infant and Maternal mortality in the project areas. – Morbidity caused by poor sanitation & hygiene reduced from 37% to 13%. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 131
- 132. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML TVS CHAKRA • MoU between TVS motors and Andhra Bank for financing two wheelers in Andhra Pradesh • Rate: 9.25 to 9.75 • Loan Period: 12 to 60 months 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 132
- 133. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ‘POSTMAN AKSHAYA’ • TVSFS (TVS Finance and Services Ltd.) has roped in the Department of Posts (DoP) as a franchisee to sell its loan products. • The service was launched on August 21, 2006. • Initially at Madurai and Tirunelveli, further to cover the whole state. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 133
- 134. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ‘POSTMAN AKSHAYA’ • The new initiative `Postman Akshaya,‘ aimed at financing customers in rural and semi-urban areas to buy – consumer durable products – TVS brand of two-wheelers – IT products. • The company had fixed a ceiling of Rs. 50,000 on the individual loan under the scheme. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 134
- 135. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ‘WOW’-WOMEN ON WHEELS • Empowering women in rural and semi-urban areas. • REASON 1. 31% males drive two wheelers, only 2 % women drive two wheelers in India. 2. Lack of riding skills among women. 3. Women are afraid to venture on their own in the absence of training and there are hardly any avenues for scientific learning. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 135
- 136. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ‘WOW’-WOMEN ON WHEELS • WHAT THEY DID? 1. Offer two-wheeler training to around One Lakh young women in over 100 towns in the country. 2. Involve training of women by women trainers. 3. Emphasis has been laid on scientific learning. 4. TVS has launched Scooty Pep+ in as many as 99 colours. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 136
- 137. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML COMMUNITY DEVELOPMENT & SOCIAL RESPONSIBILITY • Adopted 146 villages for economic development. • Implemented income generation programmes by forming 666 Self Help Groups (SHG) comprising over 10,800 families. • Brought 282 Ha of land under drip irrigation. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 137
- 138. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML COMMUNITY DEVELOPMENT & SOCIAL RESPONSIBILITY • Improved farm yield by 25% through modern farming practices and supply of quality seeds. • Conducted over 600 health awareness programmes, for improving the lot of malnourished children and anaemic women. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 138
- 139. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML COMMUNITY DEVELOPMENT & SOCIAL RESPONSIBILITY • Improved buildings and infrastructure at 35 schools in the adopted villages and helping them with proper academic support. • Covered over 1,200 youth under vocational education, resulting in job opportunities for them. • Helped to increase the level of adult literacy to 85% through adult education programmes. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 139
- 140. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML BIKES FOR RURAL INDIA 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 140
- 141. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML TVS JUPITER • TVS Motor launches TVS Jupiter at Rs 44,200 (Sept 18 , 2013). • Eyeing a 20 percent market share in domestic scooter segment that is expected to touch 3 Lakh units per month by the next year. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 141
- 142. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML TVS JUPITER • Festive season and good rains this year which will boost rural sales that account for 50 per cent of the company's two-wheeler sales. • Compared to Honda Activa, TVS Jupiter clearly has a clear price advantage, which is to attract rural markets. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 142
- 143. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML TVS MAX 4R – THE RURAL KING • For people carry heavy loads across long distances everyday on rough roads. • A bike that meet their no-nonsense requirements. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 143
- 144. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML TVS MAX 4R – THE RURAL KING • Features: 1. Four shock absorbers to take heavy loads 2. A detachable rear seat to accommodate goods 3. Big brakes, wheel and indicator guards to protect the bike and goods 4. An easy centre stand 5. Long wheelbase 6. Wider tyres 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 144
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- 146. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ABOUT THE COMPANY •Recent foray into rural markets with the purchase of Kinetic Motors assets. •Products will rely heavily on Mahindra’s brand name. •Also on the group’s finance company, Mahindra Finance. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 146
- 147. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ABOUT THE COMPANY •Kinetic Group, founded in 1974, has sold over 6 million vehicles in India. •The group has an international technical collaborations with Hyosung Motors of Korea. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 147
- 148. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ABOUT THE COMPANY •It has three state of the art manufacturing facilities at 1. Koregaon Bhima 2. Ahmednagar 3. Pithampur •A nationwide network of nearly 450 dealers and over 1,000 service centers. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 148
- 149. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ABOUT THE COMPANY "The company's foray into the bottom segment of the pyramid will create tremendous brand awareness in an entire section of the population and open a whole new population in the urban market. These customers will start with our twowheelers and then graduate to bigger M&M vehicles.“ -Anand Mahindra 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 149
- 150. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML PORTFOLIO EXPANSION •Its portfolio currently comprises just one scooter, branded Flyte. •M&M also sells three Kinetic products -Nuvo, 4S, and Kine •The company, which launched two new models— Rodeo and Duro 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 150
- 151. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML INCREASING TOUCH POINTS •Is gearing up to establish 2,000 touchpoints, especially in Tier-II and Tier-III cities •M&M is looking to leverage its existing standalone commercial vehicle showroom outlets where it can also display its twowheelers •M&M is also focusing on expanding its dealership network from 300 currently 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 151
- 152. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML PRICING STRATEGIES •M&M believes that its scooters are priced lower than its rivals and deliver more power. •The Duro is priced at Rs 38,299, while the Rodeo carries a price tag of Rs 41,299 , making these the cheapest scooters in their segment. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 152
- 153. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML FINANCING PLANS •Mahindra has tied up with five non-banking finance companies to finance its two-wheelers – 1. Fullerton India Credit Company 2. Sriram Transport Finance Company 3. Family Credit 4. Indusind Bank 5. Mahindra Finance •Around 25% of their two-wheelers are financed by NBFCs, about half of which comes from Mahindra Finance. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 153
- 154. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML TARGET 10% SHARE IN SCOOTER SEGMENT IN INDIA •As part of its strategic plan, Mahindra 2 Wheelers had unveiled two new scooters, under the brand name Rodeo RZ. •While speaking on the occasion, Viren Popli, Senior Vice President (Strategy and Marketing Development), Two Wheelers, M&M said that five new launches have been planned for this year, including two scooters and three motorcycles. •A few months back, the company launched another scooter, Duro DZ and now it had brought Rodeo RZ. •What is more, Mahindra will bring out three motorcycles including Mahindra Mojo later this year. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 154
- 155. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML MISSION VIJAY II •Kinetic has formed a special alliance with Mission: Vijay II. •A foundation that assists our country’s war heroes in rehabilitation. •Offers them an opportunity for earning livelihood. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 155
- 156. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML MISSION VIJAY II •Through this alliance with Kinetic, the war wounded, ex-servicemen and war widows are offered an opportunity to set up Authorized Sales and Service stations for Kinetic. •These would be set up in the Tehsils or villages across the country. •Earn commission on all sales and also income from servicing of Kinetic’s two wheelers 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 156
- 157. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML BIKES FOR RURAL 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 157
- 158. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML KINETIC BOSS •Kinetic Boss - target rural and semi urban market •Kapil Dev- brand ambassador , rose to great heights, being from rural background •Value for money bike, targeting economy segment, priced at Rs 33,500 •The dual tube cradle frame makes for a comfortable ride in the potholed roads of rural hinterland. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 158
- 159. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML KINETIC BOSS FEATURES •115 cc, 8.4 bhp power and 8.5 Nm torque - only powerful bike in economy segment •fuel efficient 4 stroke engine with a mileage of 92 kmpl (USTC) •Rectangular box-type swing arm for added stability and comfort of riding - unique in the economy segment 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 159
- 160. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML KINETIC BOSS FEATURES •Powerful MFR headlamp unique in the economy segment •Big wheelbase for additional stability •All round footrest for pillion comfort •Stylish with front fairing and front mudguard in ABS body color! 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 160
- 161. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML KINETIC LUNA SUPER •60 cc moped, attractively designed •Caters to rural and semi urban needs •Low cost, good power and pick up •Mileage of 60 kmpl •Priced at Rs 18,000 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 161
- 162. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML FUTURE PLANS •Mahindra and Mahindra intended to enter the motorcycle segment in India from 2010 •M&M is also looking at expanding its dealer base in India •it is also seeking help of cooperative banks and ‘grameen banks’ to make easy loan facilities available in tier-II and tier-III cities as well as in rural areas 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 162
- 163. 11/27/2013 INDIAN INSTITUTE OFMANAGEMENT RAIPUR 163
- 164. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML ABOUT THE COMPANY • Yamaha made its initial foray into India in 1985. • In August 2001, Yamaha India became a 100% subsidiary of Yamaha Motor Co. Ltd, Japan (YMC). 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 164
- 165. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML GETTING CLOSER TO CUSTOMER •Initiated different approaches to address urban, semi-urban and rural markets •Urban: carnivals, test ride camps, friendly exchange plans (spot exchange, spot finance & spot delivery) 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 165
- 166. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML GETTING CLOSER TO CUSTOMER •Rural: marketing through influencers, WoM, village bigwigs & private workshop owners first convinced •Booking counters and sales & service outlets at taluka levels 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 166
- 167. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML FINANCING •Launched finance arm – Busan Auto Finance as banks had stopped lending. •Finance options for Yamaha bikes are available at 13% interest rate from Busan Auto Finance. •Around 40% of their sales comes from loans and a majority of this through their finance arm. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 167
- 168. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML BIKE FOR RURAL INDIA 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 168
- 169. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML LAUNCH OF YAMAHA CRUX •85% Market dominated by •Hero Honda(CD SS, Splendor) •Kawasaki Bajaj (Boxer, Caliber) •Yamaha introduced Crux in the same segment 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 169
- 170. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML LAUNCH OF YAMAHA CRUX •The unanticipated success of Crux 1. Acceptability & Affordability- Fuel efficiency, performance categories and price 2. Availability & Awareness- Direct customer contact program 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 170
- 171. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML PLANS AHEAD •Tap rural market by launching more models at affordable price. •Announced that India will be its biggest market by 2016. •Plans to strengthen presence in Tier- III cities. •Yamaha Crux, well accepted product. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 171
- 172. Hero Honda TVS Mahindra & Mahindra BajajAuto Yamaha LML PLANS AHEAD •Installed annual capacity of 6 Lakh units at its 2 manufacturing units at Surajpur in UP and Faridabad in Haryana. •Plans to further strengthen production to 1 million units by this year. 11/27/2013 INDIAN INSTITUTE OF MANAGEMENT RAIPUR 172
- 173. THANK YOU 11/27/2013 INDIAN INSTITUTE OFMANAGEMENT RAIPUR 173
Editor's Notes
- #17 Crop output is sum product of crop production and their prices
- #18 Crop output is sum product of crop production and their prices
- #19 Crop output is sum product of crop production and their prices
- #20 Crop output is sum product of crop production and their prices
- #21 Crop output is sum product of crop production and their prices
- #22 Crop output is sum product of crop production and their prices
- #23 Crop output is sum product of crop production and their prices