WEL COME

Presentationof

CASE STUDY

Presented By:

Sachin . Prabhakar. MBA-II

“Consumer Buying Behaviors

in

Two Wheeler industry

With Special Reference to

Hero Honda Motorbike”

“ “ Movement is the essence of life Movement is the essence of life & change is only constant in the & change is only constant in the

movement.”movement.”

Introduction :

The dawn of new millennium has pushed the world in to age of an unprecedented velocity where loads of information travel at supersonic speed over great distances which has left sphere of human activity untouched .

The cyberspace has also changed the way of doing business where consumer always supreme.Today no business irrespective of its size can remain indifferent to changing consumer

demands.

What is Marketing What is Marketing ??

Marketing Mgmt :

This customer focused philosophy is known as the ‘marketing concept’. The marketing concept is a philosophy, not a system of marketing or an organizational structure. It is founded on the belief that profitable sales and satisfactory returns on investment can only be achieved by identifying, anticipating and satisfying customer needs and desires.

- Drucker

What What

is is

Consumer Consumer Behavior ?Behavior ?

“ Consumer Buying Behavior is the decision processes and acts of people involved in buying and using products ”.

Need to understand: •why consumers make the purchases that they make? •what factors influence consumer purchases? •the changing factors in our society.

Objectives of Case:

1. To make complete analysis of the Indian two wheeler industries with specific preference to Hero Honda.

2. To find out awareness level of consumers regarding number of brands that are available in market.

3. To find out important factor influencing the purchase decision of buyer.

4.To rate the product features or factors of consumer preferences towards different models

(100 cc, 110 cc,125 cc etc).

5.To find out post purchase behavior of the consumers about product and brand.

Automobile industry is fastest growing in our country it has two reasons,

1.Change of lifestyle.

2.People from metropolitan cities are disappointed with public transport.

This case tells about comparative study of Indian two wheeler industry, the study based on two hypothesis.

1.Association between the income of consumer and the type of two wheeler owned by him.

2.Hero Honda Company considered as market leader in two wheeler industry.

Summary of Case:

Both consumer and dealer survey was conducted .

The sample size for dealer and consumer was 20 and 150 respectively.

The study was conducted in Hyderabad city.

Overall case shows the change in view point of consumers towards modern bikes.

Outlook of Two Wheeler Industry:

•India is the third largest producer after Japan and china, the second largest consumer after china.

• Two wheeler are usually classified into three types, they are scooters, motorcycles and mopeds.

• The major players of two wheelers in India are Hero Honda, Bajaj Auto, and TVS Motors.

•As these companies announced their sales for April 2004, it shows that

Hero Honda sales grew sharply by 46%.

Bajaj Auto increased by 24%,on other hand

TVS Motors Decreased by 4.4%.

Current Scenario:Current Scenario:

The market has steadily moved from sellers to buyer market .

During the early nineties the auto industry in general was under recession.

After the 1996 the industry showed a slower growth around 22%, compared to 1990-91.Whereas the motorcycle sales increased by 77% in 2004.

Automobile SectorAutomobile Sector

Speeding Ahead!!Speeding Ahead!!- Chartered Financial Analyst ( Feb-06)

AUTO SECTOR MARKET SHARE

4%4%

13%

79%

Two wheeler

passengerVehicle

Commertialvehicle

Three wheeler

AUTO SECTOR MARKET SHARE:AUTO SECTOR MARKET SHARE:

The two wheeler segment leads the industry with big share of around 80%

• The two wheeler segment continues dominate the auto sector due to growing numbers of middle class consumers.

• Price discounts , Attractive & easy finance schemes and the launch of new models at frequent intervals have all helped this segment increase its shares from 77% in FY2004 to 79% in FY2005.

• Hero Honda the market leader in two wheeler has record of selling more than 29 lakhs units, and registered an average growth of 24.6% in last five years period.

Current Market Situation:Current Market Situation:

• Bajaj auto followed HEROHONDA with a market share of 20% in the two wheeler segment.

• For FY2005, compared to 24% during the previous year.

• The other major automobile manufacturers TVS motors however is losing ground.

• Custom duty reduced by Government from 25 to 20% will help the manufacturer to reduce expenditure on raw material (RM).

Market Share:Market share

1

2

3

4

5

Hero HondaBajaj

othersLML

TVS

Company %

Hero Honda Ltd. 46%

Bajaj Auto Ltd. 24%

TVS Motors Ltd. 17%

LML Ltd. 5%

Others 8%

Why

HERO HONDA

is

Leading Market ?

Company Profile:

                                                              

“Hero Honda, is continuously striving for synergy between technology, systems and human resources to provide products and services that meet the quality,performance, and price aspirations of our customers.

While doing so, they maintain the highest standards of ethics and societal responsibilities, constantly innovate products and processes, and develop teams that keep the momentum going to take the company to excellence in the new millennium.”

Mission:

BOARD OF DIRECTORS:

  Chairman Mr.BrijmohanLal Munjal

Managing Director Mr. Pawan Munjal

Joint Managing Director Mr. Miki Yamamoto

Wholetime Director Mr. Takao Eguchi

Non-Executive Director Mr. Satyanand Munjal

Non-Executive Director Mr. Om Prakash Munjal

Non-Executive & Independent Director

Mr. Satoshi Toshida

Products:

• Pleasure

• CD100SS

• Karizma

• Achiever

• Splendor+

Products:

• Glamour

• Passion Plus

• CD Deluxe

• CD DAWN

• Super splendor

Products:

Products:

Products:

Products:

Products:

Products:

What started out as a Joint Venture between Hero Group, the world's largest bicycle manufacturers and the Honda Motor Company of Japan, has today become the World's single largest two wheeler Company. Coming into existence on January 19, 1984, Hero Honda Motors Limited gave India nothing less than a revolution on two-wheels, made even more famous by the 'Fill it - Shut it - Forget it ' campaign. 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. Add to that technological excellence, an expansive dealer network, and reliable after sales service, and you have one of the most customer- friendly companies.

The Legend of Hero Honda:

ANALYSIS OF CONSUMER ANALYSIS OF CONSUMER SURVEYSURVEY::

Current Status:

Current Status

yes

no

33

72

Particulars Respondents PercentageYes 72 68.57No 33 31.43

Total 105 100

[68.57 % respondent have own vehicle & 31.43 do not have own vehicle.]

Brand wise Ownership of two wheelers:

No.of Respondants

0102030405060

Hero Honda Bajaj T.V.S.

No.ofRespondants

Brand Respondents PercentageHero Honda 48 66.67Bajaj 18 25T.V.S. 6 8.33Total 72 100

[ 66.67 % of respondents have Hero Honda vehicle,

25%- Bajaj vehicle,

8.33 –TVS vehicle.]

Information needs for purchase decision

Advt. In news paper

Advt.on television

Info. From friends

No.of Respondents PercentageAdvt. In news paper 18 25Advt.on television 12 16.67Info. From friends 42 58.33Total 72 100

Information needs for Purchasing decision:

[ 58.33 % respondents depend on friends for information & 25% depend on news paper,16.67 on television .]

Influence on purchase behavior of the respondents

Self

Spouse

Colleagues

friends

No. of Respondents PercentageSelf 30 41.67Spouse 6 8.33Colleagues 9 12.5friends 27 37.5Total 72 100

Influence on the Purchase behavior of the respondents:

[ 41.67 %respondents influenced by self, 37.57 by friends12.5 % by colleague, 8.33% by spouse.]

Reasons for Brand Preference

Margin

Price

Discount

Brand image

Reasons Respondents PercentageMargin 2 10Price 4 20Discount 2 10Brand image 12 60Total 20 100

Reasons for Brand Preference:

10% dealers prefer particular brand for margin,

20% -Price,

10% -Discount,

60 – Brand image.

Reasons for changes in Consumer preferences:

•Motor cycle prices have declined comparatively to scooter.

•Price in aspiration level and westernization.

•For rough and uneven roads like in rural areas, strong Fuel efficient motorcycles preferred by the consumer.

The following are the major findings from the consumer surveyThe following are the major findings from the consumer survey

1.The study reveals that 88.5% of the respondents are aware of the Various brands of the two wheeler available in the market through watching TV And reading news paper or magazines.

2.The study reveals that 93.35% of the respondents can recall the advertisement Of motorbike they have seen recently on TV or reads in newspaper or magazines.

Findings & Conclusion:

3. It is found that 68.57% of the respondents own their own two wheelers Whereas remaining 31.43% of the respondents do not own two wheelers.

4. It is found that 66.67% of the respondents own Hero Honda,25% of the Respondents own Bajaj, 8.33%of the respondents own TVS.

5. It is found that 75% of the respondents have the two wheeler since 1 to3 years 9.72%of the respondents have two wheeler since < 1 year, 8.33% of the Respondents own two wheelers since >5years and 6.94%of the respondents own it since 3 to 5 years.

6. The influencer in the purchase decision of the respondents is himself.

7. The source of the information preferred by the respondents for buying the two wheeler is collected from the friends and associates.

8. It is found that 90% of the respondents are satisfied with the performance ,Maintenance and after sale services of the dealers ,Most of the respondents opined that the maintenance cost of their Two wheelers are affordable and some expressed that maintenance cost is high and spares cost is also high.

9. It is found that 71% of the respondents do not have any plans to buy two wheeler for themselves in future.But 29.5% have plans to buy two wheeler in the future .

10. It is found that most of the respondents preferred to buy HERO HONDA due to its brand image.

1. It is found that most of the dealership is non-exclusive type.

2. it is found that if the dealership is of exclusive type , mostly it is exclusive to HERO HONDA company or Bajaj company.

3. A reason behind the dealing with a particular brand is brand image.

4. It is found that most of the respondents opined that advertisement is a good enough source to improve sales.

Findings from the dealers survey:

5.most of the respondents opined that , the consumer due to brand image prefer HERO HONDA Splendor.