A

PROJET REPORT

ON

“HERO HONDA MARKETING STRATERGY”

IN CONTEXT WITH “HERO HONDA”
DURG (C.G)

Submitted in the partial fulfillment for the award of degree of

BACHELOR OF BUSSINESS AMINISTRATION

Of
Pt.Ravishankar Shukla University, Raipur (C.G)
Session 2007-2010

Submitted by

ABHISHEK KUMAR

DEPARTMENT OF MANAGEMENT
SHRI SHANKARACHARYA MAHAVIDYALAYA
SECTOR-6 BHILAI (C.G)
 Certificate

To whom may ever it may

concern

This is to certify that abhishek kumar

student of B.B.A 6th sem of shri
shankaracharya mahavidyalaya , bhiai
has carried a research project on the topic
to hero Honda under my supervision .
This report is original and data collected
by the researchers him self are true
authentic up to my knowledge.
We wish abhishek success in his
professional career .
 Declaration

I abhishek kumar student of sixth

semester at ‘
shri shankaracharya mahavidyalaya ‘
here by declare that these research report
under the title is the record of my
original work under the guidance of Mr.
Sandeep Jaswant (H.O.D ) B.B.A . These
report has never been submitted any
where for award of any degree or diploma.

Place:

Date:

Department of BBA
Shri shankaracharya mahavidyalaya sector-6
bhilai (CG)
 Certificate
This is to certify that abhishek kumar
a student of B.B.A sixth semester at
our institute under my guidance and
supervision he had carried out the
research project under title

“ marketing strategy of hero Honda“

This research report is the original

one.

Place:

Date :

Project guide
(lecturer)
Department of
B.B.A
SSM Bhilai
 Acknowledgement

Perhaps the most awaited moment of any

endeavor in its successful competition of their
project report cases study having worked on
her project for the whole academic session. I
would like to express my sincere gratitude to
all those who made it possible.

Firstly I am humbly and respectfully to my

guide
Mr. Sandeep Jaswant (H.O.D) of the B.B.A
department under whose able guidance. I had
the privilege to work and who guided at every
stage.

I take this opportunity to express my

sincere gratitude to our principle for being
guide of philosopher throughout B.B.A
program.

I shall be failing in my duty if I don’t

express my deep sense of gratitude to all my
friends and the relatives who have share their
valuable time and helped me directly or
indirectly in the preparation of their project .
 At the end last but not the least, I would like
to thanks the other staff and non staff member
the of this college.

(
B.B.A sixth semester)

Preface
The topic chosen by me for my project is
marketing strategy
“In reference to hero Honda automobiles
the two wheeler especially in the stylish
motorcycle. At present hero Honda is
market leader in the Indian market.

Today there are various companies

coming in Indian and these certainly will
exist a cutthroat competition in these field
. I have chosen a hero Honda as a topic
essence of my project .today two wheeler
consumer due to new manufacturing
entrant has started getting a wide choice
while buying one these gave to
considered the facility provided by the
two wheeler the price mileage ,
maintenance and service etc. while buying
a two wheeler .

A normal customer is quit puzzled and

faces for an uneven some time huge
problems in deciding which vehicle to buy.
I realized the problem and decide to take
these up as the challenge and provide
answer to as the requirement of the Hero
Honda.
Chapter - 1

Introduction
Satisfaction is the persons feeling of pleasure
(or) disappointment resulting from comparing a
product perceived performance (outcome) in
relation to his/her expectation. if the
performance fall short of expectation the
customer is dissatisfied . if the performance
matches the exception the customer is
satisfied if the performance exceeds the
expectation the customer is highly satisfied ( or
) delighted many companies are aiming for
high satisfaction because they are much ready
to switch. ]
Buyer’s expectation formed on the basis of
past buying experience,
friend and the associate advice and the
marketers and the competitor’s information
and promises. if marketers raise expectations
two high , the buyer is likely to be disappointed
. Even if the company sets expectation should
match the performances.

≈} A customer is the most important

person even in
any company
≈} A customer never depend on company,
but the
company depends on him.
≈} A customer is the person who bring
company his
Wants.
≈} A customer is not a interruption of
marketers
Work he is the purpose of it.

Two wheelers in
India
In 60 decade several vehicles were
running in the Indian roads those are the
sun beams, AIS, BBA and Royal Enfield.
From these motor cycles only the Royal
Enfield has existence in the motorcycle
market.

After 60 decade some other motorcycles

and scooter had been launched in Indian
two wheeler market those are the
Rajdoots, Java, Vespa and Lamrata .

Indian witrossed the first spate of

modernization in two wheeler industry in
1978-79 during that period Piaggio
sauntered the Indian market in a joint
venture with the Lohia machines and our
major Japanese motor cycle manufacture
set up joint venture companies to produce
50cc two wheeler for the first time.

Objectives of the
study

≈} To know the customers

expectations
towards hero Honda.

≈} to find out the customer

opinion regarding
 Various aspect of the bike.

≈} To give the appropriate

suggestion to the
company regarding he
performances.

Our brand

Our brand identity:

 Our brand is the visual
expression of the ought and the
action it conveys to everyone
 our intention two constantly
inspire the confidence.
 Our customers are the primary
audience for our brand.
 Indeed, our brand identity is
shaped as much by their belief
in hero Honda as the as it it’s
our brand.
 We can do this by the living on
the brand essence and by
continuously seeking to enhance
our customer experience.
 In doing so, we ensure a special
pace for our self in the heart
and in the mind of the customer.

Our brand essence

 Our brand essence is thje

soul of our brand
 Our brand essence
encapsulates or mission at
Herohonda
 It is the singular
representation of our terms of
endearment with our
customers.
 It provies the basis on which
we grow profitability in the
market.
 Our brand essence is
excitement
 Hero Honda strives to inspire
the confidence through te
excitement engineering.
 Blending together youthfull
creativity and competitive
technology to exceed the
spoken and the implict
expectations of our customers.
 By challenging the given . by
exploring the unknown and
 thereby stretching ourself
towards tomorrow, today.

Learning
 Learning is how we insure
our proactively
 It is the values that embraces
knowledges as the plat form
for the building well informed.

Innovation

 It is how we can create the

future
 It is that which provokes us
to reach beyond the abivous in
persuite of that which exceeds
the ordinary.

Speed
 It is how we convey clear
convection.
 It is the value that keeps us
sharpley responsive , mirroring
our commitment towards our
goal and process.

Chapter
-2
 History
India has the largest number of two
wheeler in the world with41.6 million vehicles.
India has a mix of 30 percent automobile and
70 % two wheeler in the country. India was the
second largest two wheeler manufacture in the
world starring in 1950’s with the British
automobiles product of India (API) that
manufactured the scooter. API manufacture the
lamberts but, another company Bajaj
automobiles LTD. Surpassed API and remaining
through the turn of the century from its
association with piaggio of Italy
(Manufacturer of Vespa)
The license raj that exist between the
1940s to 1980s in India , did not allow the
foreign companies to enter the market and
import were tightly controlled .these regulatory
maze , before the economic liberalization ,
made the business easier for local player to
have a seller market . Customer in India was
forced to wait 2 years to buy a scooter from
Bajaj. The CEO of Bajaj commented that he did
not make a marketing department, only in
dispatch department. By the year 1990, Bajaj
has a waiting list that has twenty six times of
annual output for scooter.
The motorcycle segment has the same long
wait time with three manufacture; Royal
Enfield, ideal Jawa and Escorts. Royal Enfield
made a 350cc bullet wit the only four – stroke
engine at that time and took the higher end of
the higher end of the market but , there was
little competition for there costumer . Ideal
Jawa and escorts took the middle and lower
end of the market respectively.

In the mid-1980s the Indian

government regulation changed and
permitted companies to enter the
Indian through minority joint venture.
The two wheeler market with for indo
Japanese joint venture: Hero Honda
TVS S Suzuki, Bajaj Kawasaki and
kinetic Honda. The entry of these
foreign companies changed the Indian
market dynamics from the supply side
to demand side with a large selection
of two wheelers on Indian market
customer started gain over the
product they bought and raise the
higher customer expectation.

 Hero entered the joint venture for

technical and financial participation with
one of the largest automotive makers

 Honda motors company limited of Japan,

in 1984 for the manufacturing of 100cc
motor cycles in India.

 Group companies Hero corporate service

limited – Hero mind mine –munlal

In 1984-1985 HHML came in existence by

collaboration of hero motor limited and Japans
Company Honda motors limited for the first
100cc with four stroke motorcycle is made by
Hero Honda motor limited in India.
 Company
profile
Hero is the brand name used by the Munjal
brother in the year 1956 with the flag ship
company hero cycle’s .the two wheeler
manufacturing business of bicycle component
had originally started in the 1940’s and turned
in the world largest bicycle manufacture today.
The Munjal run their own steel make free wheel
and other critical bicycle component and and
have diversified in to different like product
design. the Hero group philosophy is;
“ to provide excellent transportation to
the common man at easily available and
affordable and to provide the total
satisfaction in all its sphere of activity “
he hero group has a passion for setting the
higher standard and engineering satisfaction is
the prime motivation way of life and work
culture of the group .
In year 1984 Mr. Brijmohan lal munjal , the
chair man and managing director of hero
Honda motors , headed an alliance between
the Munjal family and Hero Honda company
LTD HHM mission statement is :
” we, at hero Honda , are continuously
striving for synergy between technology ,
system and human resources to provide
product and services that meet the
quality price and aspirations of the
customer”.

Product profile
Price list

Model PRICE RTO INS TOT

AL
CD-Dawn 32900 1699 845 35444

CD-DLX(MAC) 36650 1850 918 39467

PLEASURE 36740 1850 912 39502

SPL.NXG 39550 2050 999 42599

SPL.PLUS 41250 2099 999 42599

PASION PLUS 43750 2105 1005 46905

SUP.SPL.(RING) 44150 2199 1024 47373

SUP.SPL(MAC) 44900 2399 1109 48408

GLR.(MAC/SELF) 46250 2250 1055 49555

GLR.(DISK/SELF 48250 2350 1086 51686

CBZ.EXE (SELF/DISK) 57500 2750 1218 61468

HUNK 57000 2725 1216 60941

KARIZMA 73900 3400 1446 78746

CD-DELUXE(RING) 35400 1800 899 38098

Colors in Vehicle
 GLAMOUR
Candy blazing red, cloud silver metallic,
tornado metallic grey, impulse
orange metallic, excellent blue metallic.

 CD DELUXE
Candy blazing red, cloud silver, candy Tahitian
blue, amaranth maroon, cool mint grey.

 SPLEDOUR
black candy red , blaze , boon silver, metallic,
sierra metallic, granti blue metallic.

 PLEASURE
Orange , Candy blazing red, grey silver,
Tahitian blue metallic.
 CD DAWN
Black ,maroon, red

 CD 100SS
Candy ruby red black , amazing blue
metallic,green metallic.

 PASSION PLUS
Moon yellow, cloud silver ,amaranth maroon,
Tahitian blue, Candy blazing red,black with
purple strips.
 KARIZMA
Green , sky blue black metallic, yellow shade.

Hero Honda’s Marketing

Strategies in India

New Delhi, October 21, 2008: Hero Honda Motors Ltd (HHML), the
world's largest two-wheeler company for seven
consecutive years, today firmly reiterated its
undisputed leadership in the domestic two-
wheeler market with impressive bottom line
growth for the second quarter (Q2) – July to
September - of this financial year (FY) 2008-09.
 Even as the industry continued to face tough market
conditions on account of uncertainty over interest rates
and overall credit squeeze, the company reported 50
per cent growth in profit after tax (PAT) at Rs 306.30
crore for the second quarter. Hero Honda's profit after
tax in the corresponding period last fiscal (July - Sept,
2007-08) stood at Rs 204.33 crore.

Total turnover (Net sales & Other Operating income)

grew to Rs 3202 crore, a growth of 35.6 per cent over
Rs 2361 crore recorded in the corresponding period last
fiscal. The company has recorded an EBIDTA margin of
13.58 per cent in the quarter. The EBIDTA margin in the
previous quarter (April - June '08) was 12.20 per cent.

The strong financial performance is in line with the

company's better-than-industry top line growth. After
posting a growth 11.38 per cent in the first quarter, the
company kicked off the second quarter with a 39.8 per
cent growth in sales in the month of July, and followed
up with 26.8 per cent growth in August and 22.4 per
cent in September. Hero Honda consistently keeps
growing its share in the domestic motorcycle market,
and currently enjoys over 55 per cent share.

Dr. Brij Mohan Lall, Chairman, Hero

Honda Motors Ltd,

Said "We are happy with our financial performance.

It gives immense joy to see this kind of results in the
25th year of our company. I wish to thank all our
stakeholders – customers, associates, dealer friends,
ancillaries and also our joint venture partners Honda
Motors Co – for their continuous support."

Mr. Pawan Munjal, MD & CEO, Hero Honda Motors

Ltd,
said "Our numbers speak for themselves. Even in
this volatile and competitive environment, our top
line continues to outpace the industry growth, our
market share is at an all time high, and the financial
balance sheet is a delight – all the factors which form
the hallmark of a resilient company with cutting-edge
management. We will continue to keep innovating –
in bringing in technologically-superior products, in
our network expansion, in brand building, in our
financial management, and in our communication."

"Going forward, we will have to keep a close watch

on the commodity prices movement, and other
factors such as inflation, interest rate scenario and
availability of retail finance. These factors will play a
crucial role in the industry growth in the subsequent
quarters," he added.
Mr. Pawan Munjal, Managing
Director, Hero Honda Motors
Ltd ,

“The year 2007-08 has seen a leadership

performance from us. Despite the industry
slowdown, we have been able to manage
positive growth thereby taking our share in the
domestic motorcycle market upward of 52 per
cent. At the end of the financial year, I would
definitely like to thank our millions of
customers across the country, who have made
it possible. We will continue to focus on our
customers and they can surely look forward to
many more launches and various initiatives in
the coming year.”

HHML’s good run through the industry slump in

2007 has been possible due to the company’s
multi-focal strategy of bringing in new models
and variants across segments, supporting them
with innovative communication across media,
leveraging properties such as cricket and
entertainment for brand building and
augmenting its distribution network

(HERO HONDA CONSOLIDATES MARKET

LEADERSHIP WITH IMPRESSIVE GROWTH OF
15% IN MARCH’09
FOR FY 2008-09, HERO HONDA OVERTAKES
PREVIOUS FISCAL’S SALES TALLY, EVEN AS
DOMESTIC MOTORCYCLE INDUSTRY DECLINES
BY MORE THAN 10 %)

HERO HONDA CONTINUES TO

CONSOLIDATE MARKET LEADERSHIP WITH
27 PER CENT GROWTH IN AUGUST SALES

New Delhi, Tuesday, April 21, 2009: Reports robust sales of 305,516 units during the
month

Mr. Anil Dua, Sr. Vice President (Marketing & Sales), Hero Honda Motors Ltd,
“Our strategy is yielding results. The strategy hinges
on creating winning brands across segments,
investing in brand building, exploring untapped
markets in rural and upcountry areas while
consolidating urban presence and rapidly expanding
our network. However, the industry continues to face
uncertainty on account of high interest rates and
overall credit squeeze. The festival month of October
is going to be crucial in determining the overall
outlook of the industry for the year.”
Key Hero Honda brands continue to drive strong
volumes across segments - CD Deluxe in entry
segment, Glamour, the new Splendor NXG, Splendor
+ and Passion Plus in deluxe segment, and Hunk,
CBZ X-treme and Karizma in the premium segment.

Hero Honda’s scooter Pleasure has also been

growing strongly, with more than 12,000 units
being sold in August this year.

New Delhi, Tuesday, April 21, 2009: Highlights

Corporate performance: • Consolidated over 50% share in the
domestic motorcycle market

• Reported highest ever sales in a month in October 2007

(365,022 units)
• Crossed half a million retail sales in the festive season
• Closed calendar year 2007 with sales of over 33 lakh two-
wheelers

Mr. Pawan Munjal, Managing Director & CEO, Hero

Honda Motors Ltd.
said, “Given the industry slowdown scenario, we are
very enthused by our robust financial numbers for the
third quarter. However, this was not unexpected. We
had undertaken some strategic initiatives since the
beginning of this fiscal, including a conscious effort to
rationalize costs across the board, and its results are
now visible. Our bottom line has seen a consistent
improvement, and we have been able to demonstrate
that it is possible to keep gaining market share while
maintaining a robust bottom line.

“With input costs softening and our sharp focus on

cost efficiencies, we should be able to further
improve upon our financial results,” he added.

Hero Honda's strategy for aggressive top line growth

through new product launches, brand building
initiatives backed by innovative communication has
resulted in market share gain across every segment.
Indeed, Hero Honda’s share in domestic motorcycles
market has been growing upward of 50 per cent,
despite the slowdown in the two-wheeler industry.

SEGMENTATION, TARGETING & POSITIONING

From the current segmentation, targeting &

positioning and consumer surveys we found that our
client has targeted the following segments:

♦ Congested areas of urban cities.

♦ Males/Females between the age group of 18-36
♦ Middle class people , mostly officials & executives

The client analysis from our questionnaire it was found that our client has
targeted the right segment

HHML & TVS is overlooking one feature in bike which is its low
maintenance cost and reliability (i.e. less chances of breakdown) which
is absent in its competitors. Therefore, in order to meet the sales target,
two options are available with the client; one is to redesign the bike and
second is to reposition the bike as “Bike with one time investment”.
Since redesigning of bike may involve a big task and huge investment
therefore we recommended repositioning the bike.

The gap between motorcycles sold by Hero Honda and its

closest rival is approximately 1 m units (23% of industry
size). One of the reasons for the tremendous performance of
Hero Honda is the significant increase of share of
motorcycles in the two-wheeler segment, from 42% in FY99
to 77% in FY04. No doubt, that the shift in preference of
Indian populace from scooters and mopeds towards
motorcycles has facilitated the growth of Hero Honda.
However its performance vis-à-vis industry indicates that the
performance of Hero Honda was better than the industry
peers, barring two years. In the seven-year period ending
FY04, it has achieved a CAGR of 30% in two-wheeler
volumes against 11% of the industry.
 Segmentation Positioning

Targeting

Key factor of marketing strategy

“India and Bharat co- exist today. India comprises of fast
growing cities and town; Bharat is made up of villages
entering the economic main stream. We seek to walk &
march with both India and Bharat”
 Strong Fundamentals

The company has clarified about its intention of

setting a third plant in addition to its existing two
plants. The company has embarked upon a green
field expansion plan and has earmarked Rs 2 bn for
the same. It should be noted that the company has a
strong cash flow position, it generated Rs 9 bn from
operation in FY04 and is virtually a debt free

company.
EXAMPLES
Super Splendor

This Bike comes with 125 cc new generation quantum core engine with an output of 9 bhp (6.7 kw). Its relaxing
seating arrangement with other comfort features like less strain while clutching and declutching, low noise and less
vibration engine etc, makes it more market friendly bike.

For the convenience of the biker, there are few features included here are trip meter, peep hole, large utility box etc.
Some safety features included here are pass switch and push cancel indicator switch, muffler with heat shield etc.

Splendor +

4 stroke single cylinder lair-cooled, OHC engine delivers power of 5.5 Kw (7.5PS) @ 8000 rpm . Running with the
maximum mileage of 85 kmph, this bike is giving the optimum satisfaction for long journey.
Its double cradle frame gives the steadiness in biking. Its wider 1230 mm wheelbase provides the proper base for safer
riding.
Lighting fitting included in it like multi reflector with halogen bulb makes the biking secured at every time.

Splendor NXG

Splendor NXG comes with a new engine and pioneering features and combines stylish looks with a high performance
engine. It features trapezoidal multi -reflector headlamps which is powerful even at low speeds. This is achieved by
powerful battery which powers the DC high beam in the headlamp and its strength is not dependent on the engine rpm.
Circuitry for the low beam and pilot lamp has also been enhanced for low variation in intensity arising from changes in
the engine rpm.
Segmentation of Hero Honda
Splendor: -

Geographical Segmentation

Geographic Segmentation calls for division of the market into different

geographical units such as nations, states, regions, countries, cities, or
neighborhoods. In the South Asian context, geographic segmentation
assumes importance due to variations in consumer preferences and
purchase habits across different regions, across different countries, and
across different states in these countries.

Demographic Segmentation

In Demographic Segmentation, we divide the market into

groups on the basis of variables such as age, family size,
family life cycle, income, occupation, education, religion, race,
generation, nationality and social class. One reason
demographic variables are so popular with marketers in that
they’re often associated with consumer needs and wants.
Another is that they’re easy to measure. Even when we
describe the target market in non-demographic terms (say, by
personality type), we may need the link back to demographic
characteristics in order to estimate the size of the market and
the media we should use to reach it efficiently.
Psychographic Segmentation

Psychographics is the science of using psychology and demographics to better

understand consumers. In psychographic segmentation, buyers are divided into
different groups on the basis of psychological/personality traits, lifestyle, or values.
People within the same demographic group can exhibit very different
psychographic profiles. Values and lifestyles significantly affect product and brand
choice of consumers. Religion has a significant influence on values and lifestyles.
The strict norms that consumers follow with respect to food, habits or even dress
codes are representative examples in this regard.
 The four groups with higher resources are:

1. Innovators: - successful, sophisticated, active, “take- charge” people with high

self-esteem. Purchases often reflect cultivated tastes for relatively upscale, niche-oriented
products and services.

2. Thinkers- mature, satisfied, and reflective people who are motivated by ideals
and who value order, knowledge and responsibility. They seed durability, functionality,
and value in products.

3. Achievers- successful, goal-oriented people who focus on career and family.

they favor premium products that demonstrate success to their peers

4. Experiences- Young, enthusiastic, impulsive people who seek variety and

excitement. They spend a comparatively high proportion of income on fashion,
entertainment and socializing.

The four groups with lower resources are:

1. Believers- conservative, conventional, and traditional people with concrete beliefs.

They prefer familiar products and are loyal to established brands.

2. Strivers- trendy and fun-loving people who are resource constrained. They favor
stylish products that emulate the purchases of those with greater material wealth.

3. Makers- Practical, down-to-earth, self-sufficient people who like to work with the
hands. They seek products with a practical or functional purpose.

4. Survivors- Elderly, passive people who are concerned about change. They are
loyal to their favorite brands.
 Behavior Segmentation: -
In behavioral segmentation, marketers divide buyers into groups on the
basis of their knowledge of, attitude toward, use of, or response to a
product.

Decision Roles:
People play five roles in a buying decision: Initiator, Influencer,
Decider, Buyer and User. Recognition of the different buying roles and
specification of the people who play these roles for specific products and
services are vital for marketers. This is especially useful for designing the
communication strategy.

Behavioral Variables:
Many marketers believe behavioral variables-occasions,
benefits, user status, usage rate, buyer readiness stage, loyalty
status, and attitude-are the best starting points for constructing
market segments.
Market Targeting: -

Effective Segmentation Criteria

To be useful, market segments must rate favorably on five key criteria:

 Measurable, the size, purchasing power and characteristics of the

segments can be measured.

 Substantial, The segments are large and profitable enough to serve. A

segment should be the largest possible homogenous group worth

going after with a tailored marketing program. It would not pay, for
example, for an automobile manufacture to develop cars for people
who are less four feet tall.

 Accessible, The segments can be effectively reached and served.

 Differentiable, The segments are conceptually distinguishable and

respond differently to different marketing-mix elements and

programs. If married and unmarried women respond similarly to a
sale on perfume, they do not constitute separate segments.
  Actionable, Effective programs can be formulated for attracting and

serving the segments.

Evaluating and Selecting the Market Segments

Single- Segment

Concentration

M1 M2 M3

P1

P2
P3

Selective
Specialization
M1 M2 M3

P1
P2
P3
Product
Specialization
M1 M2 M3

P1

P2

P3

Market Specialization
 M1 M2 M3

P1

P2

P3

Full Market Coverage

M1 M2 M3

P1

P2

P3

Single Segment Concentration:-

The farm equipment division of Mahindra & Mahindra concentrates on tractors, primarily
targeted at agricultural markets. The Zodiac brand concentrates on formal shirts for
executives and professionals. Especially hospitals focus on specific therapeutic areas
such as cancer care, heart specialty, neonatal care and gynecology. Through concentrated
marketing, the firm gains a strong knowledge of the segment’s needs and achieves a
strong market presence. Furthermore, the firm enjoys operating economies through
specializing its production, distribution and promotion. If it captures segment leadership,
the firm can earn a high return on its investment.

Selective specialization: - A firm selects a number of segments, each

objectively attractive and appropriate. There may be little or no synergy among the
segments, but each promises to be moneymaker. This multi segment strategy has the
advantage of diversifying the firm’s risk. When Procter & Gamble launched crest White
strips, initial target segments included newly engaged women and brides to be as well as
gay males.

Product specialization: - The firm makes a certain product that it sells to

several different market segments. A microscope manufacturer, for instance, sells to
university, government, and commercial laboratories. The firm makes different
microscopes for the different customer groups and builds a strong reputation in the
specific product area. The downside risk is that the product may be supplanted by an
entirely new technology.

Hero Honda used Product Specialization for target market of Hero Honda
Splendor.

Market specialization: - The firm concentrates on serving many needs of a

particular customer group. For instance, a firm can sell an assortment of products only to
university laboratories. The firm gains a strong reputation in serving this customer group
and becomes a channel for additional products the customer group can use. The downside
risk is that the customer group may suffer budget cuts or shrink in size.
 Full market coverage: - The firm attempts to serve all customer groups with
all the products they might need. Only very large firms. Such as Microsoft (software
market), General motors’ (vehicle market), and coca-cola (nonalcoholic beverage
market).

Additional considerations
Two other considerations in evaluating and selection segments are segment-
by-segment invasion plans and ethical choice of market targets.

Segment-by-segment invasion plans: -

A company would be wise to enter on segment at a time. Competitors must
not know to what segment(s) the firm will move into next. Segment-by-
segment invasion plans are illustrated three firms, A, B, and C, have
specialized in adapting computer systems to the needs of airlines, passenger
transport, and goods transport companies. Company A meets all the
computer needs of airlines.

Ethical choice of market targets: -

marketers must target segments carefully to avoid consumer backlash.
Some consumers may resist being labeled. Singles may reject single. Serve
food packaging because they don’t want to be reminded they are eating
alone. Elderly consumers who don’t feed their age may not appreciate
products that identify them as “old” market targeting also can generate
public controversy.

Positioning: -

Positioning is the act of designing the company’s offering

and image to occupy a distinctive place in the minds of the
target market, the goal is to locate the brand in the minds of
consumers to maximize the potential benefit to the firm. A
good brand positioning helps guide marketing strategy by
clarifying the brand’ essence, what goals it helps the
consumer achieves, and how it does so in a unique way.
Everyone in the organization should under- stand the brand
positioning and use it as context for making decisions.

Competitive Frame of Reference

A starting point in defining a competitive frame of reference

for a brand positioning is to determine category
membership-the products or sets of products with which a
brand competes and which function as close substitutes.
Competitive analysis will consider a whole host of factors-
including the resources, capabilities and likely intension of
various other firms-in choosing those markets where
consumers can be profitably served.

Product:-

Core Product: -
The core product or benefit of Hero Honda Splendor is Travelling and saving the time by
reach on desire place at right time.]

Basic Product: -
The basic product of Hero Honda splendor are Engine, Handle, Shockers, Wheels, Gear
box and chain set etc.

Expected Product: -
The expected products of Hero Honda splendor are: -
1. It should be 5 gear boxes.
2. It should be 90 Km/l mileages.
3. It should be 120 Km/hour Maximum speeds.
4. It should be disk brake or power brake.
5. It should be steel body.
6.

Augmented Product: -
The augmented products of Hero Honda Splendor are: -
1. It provides monthly check up for decrease the pollution.
2. It provides fast service of the product.

Pricing Strategy: -

Penetration Pricing: -
The price charged for products and services is set artificially
low in order to gain market share. Once this is achieved, the
price is increased. This approach was used by France
Telecom and Sky TV.
Hero Honda Used penetration pricing strategy because that
time Hero Honda use National Segment and low income
persons so they used penetration strategy.

Price Skimming: -
Charge a high price because you have a substantial
competitive advantage. However, the advantage is not
sustainable. The high price tends to attract new competitors
into the market, and the price inevitably falls due to
increased supply. Manufacturers of digital watches used a
skimming approach in the 1970s. Once other manufacturers
were tempted into the market and the watches were
produced at a lower unit cost, other marketing strategies
and pricing approaches are implemented.
Premium pricing, penetration pricing, economy pricing, and
price skimming are the four main pricing policies/strategies.
They form the bases for the exercise. However there are
other important approaches to pricing.

Promotion: -

Below the Line Promotion: -

‘Below The Line is a common technique used for touches and
feel products. Those consumer items where the customer
will rely on immediate information than previously
researched items. Below The Line techniques ensure recall
of the brand while at the same time highlighting the features
of the product.

Above The Line Promotion: -

Above the line (ATL) is an advertising technique using mass
media to promote brands. Major above-the-line techniques
include TV and radio advertising, print advertising and
internet banner ads. This type of communication is
conventional in nature and is considered impersonal to
customers. The ATL strategy makes use of current traditional
media: television, newspapers, magazines, radio, outdoor,
and internet.
Hero Honda used Above the Line Promotion because in the
Above the Line promotion co. members used advertisement
through Radio, T.V., Newspaper and Other media
communications.

Place: -
Geographical Placing: - Geographical placing of the product has divided
into 4 markets and these are: -

1. Local
2. National
3. Regional
4. International

Hero Honda used National Market for sale the Hero Honda Splendor.
Considering all facts of marketing in a unique way for
proper and efficient definition of marketing.

Marketing threats
 MANAGING RISK IS
HALF THE BATTLE WON

RISKS AND CONCERNS

• Slowdown: Sales in the lucrative premium two wheeler

segment (150 cc and above) have been affected by the
economic slowdown; a quick return to robust growth is
unlikely, and this could affect Hero Honda's near term plans
for an increased
presence in this segment.
• Interest rates: Lending rates have started softening but
effective lending rates for the two-wheeler industry remain
high on account of risk aversion by banks. However, Hero
Honda has de-risked its business by focusing on segments
which are not too dependent on financing. Still, if interest
rates for two-wheelers continue to remain high and the
overall credit-squeeze persists, it is likely to adversely
impact the company's efforts in realizing its full growth
potential.

• Inflation: After climbing to double digits in the first half,

inflation growth was close to zero per cent by year-end.
However, high fiscal deficit and rising food prices could push
up inflation again during the year. Rising inflation may limit
the downward
trend in interest rates.

• Increasing competition: Several two-wheeler companies

introduced new models in the lucrative premium segment;
over time this could impact the profitability of this segment.
At the same time, the expected fresh competition in the 100
cc segment
in 2010 poses a challenge to the company's stronghold on
this segment.

• Input costs: Prices of critical inputs came down during the

year thanks to lower commodity prices. However, prices may
be close to bottom levels, and may start perking up in the
second half of the coming year if there is an economic
revival.
HERO HONDA'S PERFORMANCE
SETTING THE BENCHMARK
Hero Honda was the torchbearer for the two-wheeler
industry during the year in review. It sold more two wheelers
during the year than the combined volumes of the second,
third and fourth placed competitor.
Overall, the company sold 3.72 million two-wheelers, up 12
per cent. Motorcycle sales in the domestic
market, which account for more than 95 per cent of Hero
Honda's sales, were up 11 per cent.

During the year, the company also turned in a rollicking

performance with its scooter portfolio, with a 49 per
cent growth in domestic sales to 156,210 units. This
performance allowed Hero Honda to increase its share
in the domestic scooter market by more than three
percentage points. Hero Honda's performance in the two-
wheeler industry was the only standout performance during
the year amongst the large players. Without Hero Honda's
numbers, the two wheeler industry growth would have been
marginal.
 Planni
ng

observ
control
e

These prime constitutes a

proper set up of the
marketing program in order to get
the desired output.
Products of the company
Bibliography

WEBSITE:
WWW.HEROHONDA.COM
WWW.HEROCYCLES.COM
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WWW.TIMESOFINDIA.COM
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HTTP://ECONOMICTIMES.INDIATIMES.COM/SEARCH.CMS
WWW.INDIAINFOLINE.COM
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