Rural Marketing

Anand Agarwal | Siddharth Ahuja | Ashwani Singh | Vishrut Sharma

About Hero Honda

• “Hero” - Munjal brothers (1956) - Hero Cycles• Joint venture between India's Hero Group and

Honda Motor Company• Established in 1984 as the Hero Honda

company, India• World's largest manufacturer of two -

wheelers, based in India

About Hero Honda

• Three manufacturing facilities based at Dharuhera and Gurgaon in Haryana, Haridwar in Uttarakhand, and Mangli near Ludhiana

• Vision is to see mobile and empowered India• Mission is to become a global enterprise

fulfilling its customers' needs and aspirations for mobility, setting benchmarks in technology, styling and quality

Har Gaon, Har Aangan

• Started in Dec 07

• Penetration in Rural Market- 10%

• 500 Sales Representatives to meet potential customer (local people as sales executives)given work tasks rather than sales targets

• Average of 16000 bikes per month ( sales )

Har Gaon, Har Aangan (Cont.)

• Free service and check-up camps• Consultations for obtaining driving licenses• Safe riding educational programs• Health check- ups and awareness camp• "Sikhao Baliye"

Rural vertical

• Rural vertical in 2007 to focus on• Product development• Consumer understanding• Marketing• Distribution• After-sales service

Market Research

• Under the rural vertical, they started collecting a lot of data at rural touch points

• Many of their dealers are now meeting• Sarpanches• Headmasters • Aanganwadi • Workers• Opinion makers to understand the rural consumer better.

Suitable Segments

Suitable Products

• The most successful product is SPLENDOR in rural market and the company kept on focusing on upgrading the models so, then they later came up with SPLENDOR PLUS and SPLENDOR NXG, which provided extra features and the consumers were satisfied

“The rural market is the right strategy for Hero as the penetration in these markets is low,”

Umesh Karne, Analyst ,Brics Securities Ltd.

Brand Hero

• Hero Honda has been accepted by people because its strong brand image and product quality

• The punch line of Hero Honda gives a emotional touch to customers “Desh Ki Dadkhan”

• Now “Hum Mein Hain Hero”

4 A’s of Hero

• Availability• 3 plants• 3000 customer touch points• 5000 dealership plus sales service outlets

• Affordability• Cheapest motorcycles in India• Easy installments and loan facilities

4 A’s of Hero

• Awareness• 500 sales rep for “Har Gaon Har Aangan”• Free service camps every year• Advertisements in TV, newspapers, magazines etc

• Acceptability• Strong brand image and product quality• Most fuel efficient bike on Indian roads• Preferred by daily users (utility as well as looks)

Promotion

• Mapping the demographic landscape to formulate region-specific modules to tap customers at a very local level

• leverage regional festivals such as Pongal and Onam in the south, Gudi Padwa in Maharashtra, Durga Puja in the eastern region , Dhanteras and Diwali in the north region

Promotion (Cont.)

• Skits and Dramas• Village haats and mandis are also being

targeted to reach customers• Tie-up’s with new partners, including local

cooperative banks and financing units to have a robust financial model and promotions

CSR for Rural areas

• Integrated Rural Development Centre• Adopted villages within vicinity of factory at

Dharuhera and worked on• Roads• Clean water• Education facilities

CSR (Cont.)

• Raman Munjal Vidya Mandir• Senior secondary CBSE affiliated• 1200 students and 61 teachers

• Raman Munjal Memorial Hospital• Accident and Trauma victims driving along the

Delhi-Jaipur highway

• Raman Munjal Sports Complex

Competitive Market Share

Rural Expansion Strategy

Vs.

• Started Social Development activities : – Employment generating program– Adult Literacy Program– Rural Health Project– Public Amenities– Road Safety Program

• With an indirect vision to create animage in Rural India

Hero’s Strategy

• Tie up with State bank of India to help Uttar Pradesh farmers

• Similar tie-up with Punjab State Cooperative Bank

Hero’s Strategy (Cont.)

Bajaj’s Strategy

• To reach each village with a population size of over 5000

• Participation in Mega/Mini melas, Weekly market called Hatts

• Specialist dealership called Rural Dealerships• Worked with NABARD to conduct

Rural Entrepreneurship Development Programs (REDP)

Bajaj’s Strategy

• REDP’s success resulted in creation of 1400 Rural Service Outlets (RSO)

• Tie-up with 22 commercial, cooperative and rural banks with special concessions to the farming sector

• “Bajaj Kisan Chakra” Scheme

Conclusion

• Hero has generated over 40 percent of sales from rural areas

• Increase in market share in the coming years

• Focus is on reducing maintenance cost and increasing fuel efficiency

Thank-You

Bibliography

• https://books.google.co.in/books?id=vI9vE7_LJX4C&pg=PT328&lpg=PT328&dq=hero+honda+rural+marketing+strategy&source=bl&ots=Ojj4OS_KD3&sig=0MBmGatKNL4TLWNI58ZRREZPGoE&hl=en&sa=X&ei=oiXbVOyRBM2MuATygYGoBg&ved=0CDEQ6AEwBDgK#v=onepage&q=hero%20honda%20rural%20marketing%20strategy&f=false

• http://www.bloomberg.com/news/articles/2013-01-14/hero-turns-to-bharat-to-thwart-honda-s-growth-in-india

• http://articles.economictimes.indiatimes.com/2008-04-28/news/27698503_1_rural-market-hero-honda-pawan-munjal

• http://www.business-standard.com/article/management/rural-is-a-long-term-strategy-for-honda-keita-muramatsu-ys-guleria-114080300622_1.html