Ter m paper Of Consumer Behavior

Topic: To study the Brand Loyalty towards two Wheelers

Submitted to: Submitted by: Mr. sanjay sir Liyakat Ali Khan Section : 1803

Roll No : B50 Reg.No: 1087803

DECLARATION

I, "Liyakat Ali Khan, hereby declare that the work presented herein is genuine work done originally by me and has not been published or submitted elsewhere for the requirement of a degree programme. Any literature, data or works done by others and cited within this dissertation has been given due acknowledgement and listed in the reference section.

_______________________ (Student's name & Signature) (Registration No.) 10807803

Date: 04/12/2009

Acknowledgement

I would like to express my sincere thanks towards Lovely Professional University management for providing me an opportunity to pursue my term paper.

My special thanks are also due to Mr. Sanjay Sir who gave me his valuable time and guided me at each step with his expertise and provided me all the required information. I am highly obliged for the guidelines he took to help me complete my term paper.

Above all, thanks to almighty Allah for showing his blessings for the accomplishment of this term paper.

Table of contents 1.1 Introduction to Industry 1-3 1.2. Current Scenario..

3-5 1.3 Introduction about Hero Honda . 6 1.4 Introduction about Bajaj.78 1.5 Introduction about TVS.... .. 9 1. 6 Yamaha Motor Pvt. Ltd .. 10-11

1.7 FACTORS INFLUENCING 16 1.8

CONSUMER BUYING BEHAVIOU12-

Data

interpretation

and

analysis.17-24 1.9 25 2.0 Suggestions.26 2.1 2.3 .28 1.3.7 29 References and bibliography.. Recommendations ... 27 Conclusion Key findings

Two Wheeler Industry: An Overview

The two-wheeler industry (henceforth TWI) in India has been in existence since 1955. It consists of three segments viz., scooters, motorcycles, and mopeds. The increase in sales volume of this industry is proof of its high growth. In 1971, sales were around 0.1 million units per annum. But by 1998, this figure had risen to 3 million units per annum. Similarly,

capacities of production have also increased from about 0.2 million units of annual capacity in the seventies to more than 4 million units in the late nineties

It was in the year 1954 that the Indian government ordered for total number of 800 motorcycles to man the Pakistani borders. In came the Bullets which were initially launched in England as a 350cc bike and it was upgraded to 500cc a year or so later. These bikes have remained unaltered, barring some cosmetic changes which have undergone over the years. Thus one can say without much of a doubt that the 1955 Bullet was one of the initial hits of the Indian two-wheeler industry and till today it continues to be a darling of the motorcycle enthusiasts. Enfield Bullet had a close competition with another sturdy bike named Rajdoot; as the bike was strong enough to handle the rough Indian roads The two-wheeler industry in India has to a great extent been shaped by the evolution of the industrial policy of the country. Regulatory policies like FERA and MRTP caused the growth of some segments in the industry like motorcycles to stagnate. These were later able to grow (both in terms of overall sales volumes and number of players) once foreign investments were allowed in 1981. The reforms in the eighties like broadbanding caused the entry of several new firms and products which caused the existing technologically outdated products to lose sales volume and/or exit the market. Finally, with liberalization in the nineties, the industry witnessed a proliferation in brands.

\A description of the evolution of the two wheeler industry in India is usefully split up into four ten year periods. This division traces significant changes in economic policy making. The first time-period, 1960-1969, was one during which the growth of the two-wheeler industry was fostered through means like permitting foreign collaborations and phasing out of non-manufacturing firms in the industry. The period 1970-1980 saw state controls,

through the use of the licensing system and certain regulatory acts over the economy, at their peak. a) 1960 1969 The automobile industry being classified as one of importance under the Industrial Policy Resolution of 1948 was therefore controlled and regulated by the Government. In order to encourage manufacturing, besides restricting import of complete vehicles, automobile assembler firms were phased out by 1952 (Tariff Commission, 1968), and only manufacturing firms allowed to continue. Production of automobiles was licensed, which meant that a firm required a licensing approval in order to open a plant. It also meant that a firms capacity of production was determined by the Government. b) 1970 1980 This was a period during which the overall growth rate of the two-wheeler industry was high (around 15% per annum). Furthermore, the levels of restriction and control over the industry were also high. The former was the result of the steep oil price hikes in 1974 following which two-wheelers became popular modes of personal transport because they offered higher fuel efficiency over cars/jeeps8. On the other hand, the introduction of regulatory polices such as MRTP and FERA resulted in a controlled industry. The impact of MRTP was limited as it affected only large firms like Bajaj Auto Ltd. whose growth rates were curbed as they came under the purview of this Act. However, FERA had a more far-reaching effect as it caused foreign investment in India to be restricted. In the motorcycle segment FERA caused technological stagnation, as a consequence of which, neither new products nor firms entered the market since this segment depended almost entirely on foreign collaborations for technology.

c) 1981 1990 The technological backwardness of the Indian two-wheeler industry was one of the reasons for the initiation of reforms in 1981. Foreign collaborations were allowed for all twowheelers up to an engine capacity of 100 cc.

d) 1970 1980 This was a period during which the overall growth rate of the two-wheeler industry was high (around 15% per annum). Furthermore, the levels of restriction and control over the industry were also high. The former was the result of the steep oil price hikes in 1974 following which two-wheelers became popular modes of personal transport because they offered higher fuel efficiency over cars/jeeps8. On the other hand, the introduction of regulatory polices such as MRTP and FERA resulted in a controlled industry. The impact of MRTP was limited as it affected only large firms like Bajaj Auto Ltd. whose growth rates were curbed as they came under the purview of this Act. However, FERA had a more far-reaching effect as it caused foreign investment in India to be restricted. In the motorcycle segment FERA caused technological stagnation9, as a consequence of which, neither new products nor firms entered the market since this segment depended almost entirely on foreign collaborations for technology. The scooter and moped segments on the other hand were technologically more self-sufficient and thus there were two new entrants in the scooter segment and three in the moped segment. c) 1981 1990 The technological backwardness of the Indian two-wheeler industry was one of the reasons for the initiation of reforms in 1981. Foreign collaborations were allowed for all twowheelers up to an engine capacity of 100 cc.

Current Scenario
Two- wheeler sales in the country have sky rocketed in the recent years, and the annual sales of motorcycles in India expected to cross the 10 million mark by 2010. The low penetration of two-wheelers in the country 31 two-wheelers per 1000 citizens (2004) leaves

immense scope for the growth of the market. Overall the industry sales of two-wheelers have grown by 15% from 6.57 million in 2004/2005 to 7.57 million in 2005/2006. The buoyant Indian economy with a growth rate of around 8% per annum is further expected to fuel the growth of two wheelers in the country. The share of motorcycles have increased over the years, while that of other two-wheelers like geared scooters, scooterettes and mopeds have shown a negative growth or remained stagnant. The two-wheelers have penetrated 7% of rural house hold and 24% of urban markets, thus it leaves an immense scope for the market to grow. Bajaj Auto one of the leading producers of automobiles in the country has been able to sell close to 2.3 million vehicles in 2005/2006, the sales of the company grew by almost 31%. The company registered a 32% growth in the sales of motorcycles much above the industry average of 19%. Bajaj Auto has emerged as a market leader in the entry level or price segment motorcycle with the Bajaj CT 100 accounting for nearly 40% of the market share. It also commands a 62% market share in the premium segment of motorcycles with products like the Bajaj Pulsar DTSI. TVS Motors which has lots of firsts to its credit in the two-wheeler sector in the country was able to sell 1.34 million units during the same period thus registering an overall growth of 15% from the previous year. In the motorcycle segment the company's growth in sales was in sync with the industry average. The introductions of motorcycles like the TVS Star range of motorcycles have helped the company in gaining a healthy market share in this segment. Where the company has emerged as a clear winner by holding onto its leadership position is in the moped segment. The company has posted a 10% growth in sales accounting for a market share of about 77%. If this figures have daunted you the best is yet to come, the country leader in two-wheelers hero honda have crossed the three million mark during the year 2005/2006 which is a good few lakhs more than its nearest competitor Bajaj Auto. The company accounted for nearly 40% of then two-wheeler market. In the motorcycle segment the company has been able to attain a market share of about 50%. The segment in which Hero Honda has emerged as a clear winner is the Deluxe segment, which is the largest segment in the motorcycles

category, with its flagship family of motorcycles splendor selling over 1.2 million units which is just a shade less than all the two wheelers sold by TVS during the same year.

Hero Honda
Hero Honda: Hero is the brand name used by the Munjal brothers for their flagship company Hero Cycles Ltd. A joint venture between the Hero Group and Honda Motor Company was established in 1984 as the Hero Honda company. During the 1980s, the company introduced motorcycles that were popular in India for their fuel economy and low cost. A popular advertising campaign based on the slogan 'Fill it Shut it - Forget it' that emphasized the motorcycle's fuel efficiency helped the company grow at a double-digit pace since inception. Hero Honda has three manufacturing facilities based at Dharuhera and Gurgaon in Haryana and at Haridwar in Uttarakhand. These plants

together are capable of churning out 3.9 million bikes per year. Hero Honda's has a large sales and service network with over 3,000 dealerships and service points across India. Hero Honda's customer loyalty program, the Hero Honda Passport Program, claims to be one of the largest programs of its kind in the world with over 3 million members. The 2006 Forbes 200 Most Respected companies list has Hero Honda Motors ranked at 108.

Brand Name: The name HERO HONDA, is inspired by the parental companies, the
hero group and the Honda company from Japan. The brand name has been into place from the day the two firms came into joint venture.

BAJAJ

Bajaj Auto is a major Indian automobile manufacturer. It is India's largest and the world's 4th largest two- and three-wheeler maker. It is based in Pune, Maharashtra, with plants in Akurdi and Chakan (Pune),Waluj (near Aurangabad) and Pantnagar inUttaranchal. Bajaj Auto makes and exports motorscooters, motorcycles and the auto rickshaw The Forbes Global 2000 list for the year 2005 ranked Bajaj Auto at 1946.

Over the last decade, the company has successfully changed its image from a scooter manufacturer to a two wheeler manufacturer. Its product range encompasses scooterettes, scooters and motorcycles. Its real growth in numbers has come in the last four years after successful introduction of a few models in the motorcycle segment. The company is headed by Rahul Bajaj who is worth more than US$1.5 billion. Bajaj Auto came into existence on November 29/1945 as M/s Bachraj Trading Corporation Private Limited. It started off by selling imported two- and threewheelers in India. In 1959, it obtained license from the Government of India to manufacture two- and three-wheelers and it went public in 1960. In 1970, it rolled out its 100,000th vehicle. In 1977, it managed to produce and sell 100,000 vehicles in a single financial year. In 1985, it started producing at Waluj in Aurangabad In 1986, it managed to produce and sell 500,000 vehicles in a single financial year. In 1995, it rolled out its ten millionth vehicle and produced and sold 1 million vehicles in a year.

Brand Name: The brand name BAJAJ is kept after its founder member Jamnalal bajaj.

TVS

TVS Motor Company is the third largest two-wheeler manufacturer in India and one among the top ten in the world, with annual turnover of more than USD 1 billion in 20072008, and is the flagship company of the USD 4 billion TVS Group. The company was incorporated in 1982 as Indian Motorcycle Pvt. Ltd. on 15th July. Its name was changed to Indo Suzuki Motorcycles Pvt. Ltd. and it was converted into a public limited company on 12th January, 1984. TVS-Suzuki (TSL) - a joint venture between the TVS group and Suzuki Motor Corporation, Japan - was the first company to launch a 100-cc motorcycle in the Indian market. Great milestone in Indian automobile history: Countrys first 2 seater 50 cc mopedTVS 50 launched. TVS became the first Indian Company to introduce 100cc Indo-Japanese motorcycles. The Company launched two new models of motor cycles viz. `Sumurai' and `Shogun'. Then the company launched a new model of moped viz. `TVS Scooty'. In 2000 The TVS group and Suzuki Motor Corporation September 27 parted ways from their 15year-old joint venture with the former buying out the 25.97 per cent stake of the Japanese company for Rs 9 crore.

Brand Name: The brand name TVS is after its its founder Shri T V Sundaram Iyengar.

India Yamaha Motor Pvt. Ltd.

Yamaha made its initial foray into India in 1985. Subsequently, it entered into a 50-50 joint venture with the Escorts Group in 1996. However, in August 2001, Yamaha acquired its

remaining stake becoming a 100% subsidiary of Yamaha Motor Co., Ltd, Japan (YMC). In 2008, YMC entered into an agreement with Mitsui & Co., Ltd. to become a joint investor in the motorcycle manufacturing company "India Yamaha Motor Private Limited (IYM)". IYM operates from its state-of-the-art-manufacturing units at Surajpur in Uttar Pradesh and Faridabad in Haryana and produces motorcycles both for domestic and export markets. With a strong workforce of more than 2000 employees, IYM is highly customer-driven and has a countrywide network of over 400 dealers. The new Surajpur plant has been inaugurated by Mr. T.Kazikawa C.E.O & MD Yamaha Global on 6th July 2009, which have capacity to produce 6 lakh motorcycles annually including Fazer followed by FZ-16, FZ-S, YZF-R15 and other models. The plant capacity can be augmented up to 1 million units. This fully integrated assembly plant is built on the lines of Yamahas globally tried, tested and successfully implemented standards and meets the global quality benchmarks. At the core are the 5-S and TPM activities that fuel its Manufacturing Processes. The plant has 3 vehicle assembly lines and 4 engine assembly lines including one dedicated for export engines. The engine and vehicle assembly lines are synchronized and incorporate concepts of Unit Assurance i.e. Complete Product Assurance, Parts Assurance through 100% kit supply on lines and synchronization of parts storage, supply and production. The innovative production processes along with high tech final assurance processes are aimed to achieve Zero Claims at our dealers and thus, a highly satisfied customer base.

FACTORS INFLUENCING CONSUMER BUYING BEHAVIOUR A consumer, making a purchase decision will be affected by the following three factors: 1. 2. 3. Personal Factors Psychological Factors Social Factors

Personal Factors These factors were varying from person to person. Demographic Factors. Sex, Race, Age etc. played major role in buying two wheelers for individual use. Young people in age group of 18-35yrs purchased two wheelers for different various reasons while older people in age group of 35-50yrs purchased just for travelling purpose only. Psychological Factors There were many people who wanted to purchase two wheelers just because they had sense of love and belonging for bikes. This was found more among Hero Honda user. They are mostly see performance of the bike and services that provided by companies and want their bike to be smooth while driving the bike. Social Factors There were many people who bought bikes because of social factors like on their parents, friends and relatives opinion. There were few people who bought their bikes for style and status. Besides this to my surprise I found out that in todays world boys play major role in buying decisions for themselves and for their family also. This also played a greater role in purchasing decision of two wheelers by individuals. Boys who were in age group of 1825yrs were more interested in features as compared to other factors described.

Data interpretation and analysis

Q. Do you have a bike?

Yes

No

Bike s
YES 38 NO 2

Out of 40 respondents 38 have bikes while as 2 respondents does not have bike.

Q. Using bike for which purpose? Office Traveling Both Others

PU RPOSE
TRAVELLING 16 OFFI CE 10 BOT H 8 OTHE RS 6

Q. Which company bike do you possess? Bajaj Hero Honda Others

COMPANY

HERO HONDA 21

BAJAJ 12

OTHERS 7

Q. Why did you prefer this brand over other brand? Quality features Availability Price

PREFERENCE
QUALITY 12 FEATURES 19 AVAILIBILI TY 3 PRICE 5

6. If the quality of the product deteriorates suddenly what you do?

swithh over other 21% Stuck to same 50%

inform 29%

7. How long you have been using this brand

2-4 yrs 19%

0-2yrs 43%

4-6yrs 25%
a. 0-2 yrs C.4-6 yrs b. 2-4 yrs. d. More than 6 yrs more

13%

20. Which age group do you belong?

30-35 yrs 27%

10-30 yrs 38%

35-40 yrs 19%

more than 40 16%

Findings

According to the report hero Honda has great brand loyalty followed by Bajaj Looking at all the above information we can infer that the people perceive the two wheeler industry as: Male: With these days most of the market is dominated by the motor bikes, their presence makes the sector viewed as a Male. Age Group 18-30: The youth is the target market for the bikes, that comes out in the perception of people for age , as the youth of 18-30 id perceived for the sector. Costumer are very much brand loyal and will not change their brand easily Some costumers are using the same brand from last six years and have a very strong brand loyality
The quality of products should be very good. Todays customers want value for money if that is not provided than company will find it difficult to position itself in the market.

Companies should make sure that they provide good after sale service to their customers and there problems are rectified as soon as possible. The turnaround time should be very less that customers dont have to wait too long for their problems so to be solved.

Limitations and Recommendations

As the study was taken in one area only, and also the sample size of doing the survey was also very limited i.e. 40 samples the results need to be understood keeping in mind. In future, the study in more localities or a town may reveal difference if any in respondent preferences. Also for the study of two wheelers reveals that, the consumers the decider, have only the preference of Hero Honda and Bajaj pulsar even if the price of two wheelers rises and if the same trend continues the other companies would be finding it very difficult to be stable. This study has made conjoint design but alternate ways to measure consumer preferences which can be used in future.

In the recommendations it can be said that there should be more development in finding out the different buying behavior and preferences by the other two wheeler industries in a promotion intensive environment and also the quality.

Conclusion

The term paper makes several contributions to the literature. It provides comprehensive knowledge about brand loyality and methods of implementing brand loyality. It provides theoretical arguments how consumer behaviour and brand loyality can overcome unique risks of an organization. Paper investigated that in absence of learning a portfolio has market risk i.e. state of economy, political, natural claims etc which may affect a portfolio. This market risk remains in a well diversified portfolio also.

This paper has been made by following the real examples and shows that to adapt new trends of the market and to survive in the market.

References And Bibliography

http//:www.herohonda.com http//:www.bajaj.com http//:www.twowheeler.com http//:www.extrememachines.com http://www.dancewithshadows.com/autoindia/yamaha-fz-16-motorcycle-a-macho-streetfighter-from-yamaha/ http://www.learnmarketing.net/consumer.htm http://auto.indiamart.com/two-wheelers/

Annexure
Questionnaire Name: Location: Contact:... Occupation..

Q.1 Do you have a bike? Yes Q2. Using bike for which purpose? Office Others Traveling Both No

Q3. Which company bike do you possess? Bajaj Hero Honda Others

Q4. Why did you prefer this brand over other brand? Quality Price features Availability

Q5. If the quality of the product deteriorates suddenly what you do? a. stuck to same brand b. switch over to other brand c. inform or give suggestion to manager

Q6.. How long you have been using this brand a. 0-2 yrs C.4-6 yrs Q7. Which age group do you belong? a. 10-30 yrs c . 35-40 yrs. b. 30-35 yrs d. more than 40 yrs. b. 2-4 yrs. d. More than 6 yrs