Market Research Report on Marketing Mix of Automotive Sector

Projectsformba.blogspot.com AUTOMOTIVE

PROJECT REPORT

On

MARKETING MIX OF AUTOMOTIVE SECTOR

Submitted in the partial fulfilment of the requirement

For the award of degree of

MASTER OF BUSINESS ADMINISTRATION (MBA)

To

UNIVERSITY BUSINESS SCHOOL

PANJAB UNIVERSITY REGIONAL CENTRE, LUDHIANA

SUPERVISED BY: SUBMITTED BY:-

1 Projectsformba.blogspot.com


ACKNOWLEDGMENTS

Words fail us to express our deep sense of gratitude to our revered supervisor,
……………………………… University Business School, whose erudite guidance
and supervision have made this work possible. We are very thankful for this valuable
guidance and constant encouragement during the preparation of this project.

We are highly thankful to all other members of department of UBS (PURC) for their
suggestions and kind co-operation in this project work.

We would like to thank all the respondents whose responses were of great importance
for the project.



OBJECTIVE OF THIS STUDY

This study is done in keeping following objectives in view:

 To find out the present status of the automobile industries
in India.
 To study the market research of the automobile industries.
 To study the distribution and marketing strategy adopt by
automobile industries.
 To enhance our analytical skills in the field of practical
application of Marketing

“The marketer’s watchwords are quality, service, and value.”
PHILIP KOTLER



CONTENTS

S.NO. PARTICULARS PAGE
NO.

1 OVERVIEW 06
2 MARKET RESEARCH 15
3 MARKET ENVIRONMENT 16
4 SEGMENTATION 18
5 TARGET MARKET 20
6 NICHE MARKET 22
7 MARKET MIX 23
8 PRODUCT MIX 25
9 PRICE 32
10 PROMOTION 33
11 PLACE 44
12 PEOPLE 45
13 PHYSICAL EVIDENCE 46
14 PROCESS 48
15 DEALING WITH THE COMPETITION 49
16 DISTRIBUTION CHANNELS 51
17 THE VALUE CHAIN 52
18 SWOT ANALYSIS OF MARUTI UDYOG LTD. 53
19 PRODUCT LIFE CYCLE 56
20 INTRODUCTION OF TWO WHEELER 58
21 KEY PLAYER IN TWO WHEELER INDUSTRY 60
22 SEGMENTATION OF TWO WHEELER 61
23 KEY DRIVERS OF THE INDIAN TWO WHEELER 63
24 HERO HONDA PROFILE 66
25 MARKET MIX OF HERO HONDA 68
26 CASE STUDY OF KARIZMA 78
27 SWOT ANALYSIS OF KARIZMA 79
28 SWOT ANALYSIS OF COMPETITIOR (BAJAJ PULSAR 220) 81
29 MARKETING MIX OF KARIZMA 84
30 CONCLUSION 89
31 BIBILIOGRAPHY 90



OVERVIEW OF AUTOMOTIVE SECTOR

The industry is estimated to be a US$ 34 billion industry with exports
contributing 5 per cent of the revenues. The growth of the Indian middle class
with increasing purchasing power along with the strong growth of the
economy over the past few years has attracted global major auto
manufacturers to the Indian market. Moreover, India provides trained
manpower at competitive costs making India a favoured global manufacturing
hub. The Indian automobile industry is going through a technological change
where each firm is engaged in changing its processes and technologies to
maintain the competitive advantage and provide customers with the optimized
products and services. The de-licensing of the sector in 1991 and the
subsequent opening up of 100 per cent foreign direct investment (FDI)
through the automatic route marked the beginning of a new era for the
Indian automotive industry. Since then almost all the global major
automobile players have set up their facilities in India taking the level of
production of vehicles from 2 million in 1991 to 10.83 million in 2007–08.

Stagnation of the auto sector in markets such as Europe, US and Japan on the
other, have resulted in shifting of new capacities and flow of capital to the
Indian auto industry. The Indian automobile industry has been growing at the
rate of 15–27 per cent over the past five years. In two wheelers industry,
Indian companies are the largest manufacturers in the world. Bikes are a major
segment in the industry, the other two being scooters and mopeds. Moreover,
Indian car makers are earning acclaim worldwide. The home-grown
automaker, Maruti Suzuki has emerged as the fourth most reputed among
auto companies in the world, even ahead of its parent Suzuki Motor Co of
Japan, according to the Global 200: The World's Best Corporate
Reputations list, compiled by US-based Reputation Institute.



EVOLUTION OF THE INDIAN AUTOMOBILE
INDUSTRY



Pre
1983
1983-19
93
1993-20
07

• Closed market
• Growth of market
limited by supply
• Outdated models

Players
• Hindustan Motors
• Premier
• Telco
• Ashok Leyland
• Mahindra &
Mahindra
• Suzuki, Japan and
GOI joint venture to
form Maruti Udyog
• Joint ventures with
companies in
commercial vehicles
and components

Players
• Maruti Udyog
• Hindustan Motors
• Premier
• Telco
• Ashok Leyland
• Mahindra &
Mahindra
• De-licensing of the
sector in 1993
• Global major OEMs
start8assembly in India
Projectsformba.blogspot.com


LEADING PLAYERS AND SEGMENTS IN WHICH THEY OPERATE

Manufacturer Segments
Ashok Leyland LCVs, M&HCVs, Buses
Asian Motor Works M&HCVs
Atul Auto Three wheelers
Bajaj Auto Two and Three Wheelers
BMW India Cars and MUVs
Daimler Chrysler India Cars
Eicher Motors LCVs, M&HCVs, Buses
Electrotherm India Electric Two Wheelers
Fiat India Cars
Force Motors Three Wheelers, MUVs and LCVs
Ford India Cars and MUVs
General Motors India Cars & MUVs
Hero Honda Motors Two Wheelers
Hindustan Motors Cars, MUVs and LCVs
Honda Two Wheelers, Cars and MUVs
Hyundai Motors Cars and MUVs
Kinetic Motor Two Wheelers
Mahindra & Mahindra Three Wheelers, Cars, MUVs, LCVs
Majestic Auto Three Wheelers
Maruti Suzuki Cars, MUVs
Piaggio Three Wheelers, LCVs
Reva Electric Car Co. Electric Cars
Royal Enfield Motors Two Wheelers
Scooters India Three Wheelers
Skoda Auto India Cars
Suzuki Motorcycles Two Wheelers
Swaraj Mazda Ltd. LCVs, M&HCVSs, Buses
Tata Motors Cars, MUVs, LCVs, M&HCVs, Buses
Tatra Vectra Motors M&HCVs
Toyota Kirloskar Cars, MUVs
TVS Motor Co. Two Wheelers
Volvo India M&HCVs, Buses
Yamaha Motor India Two Wheelers



MARKET RESEARCH
Market research often refers to either primary or secondary research. Secondary
research involves a company using information compiled from various sources, which
is about a new or existing product.. Primary market research involves qualitative
research (such as focus groups or one-on-one interviews) and quantitative research
(such as surveys) as well as field tests or observations conducted for or tailored
specifically to that product. Primary research, which is also called field research or
original research, is useful for finding new information and getting customers' views
on products.

SCORPIO

Having defined the competitive framework, the next task undertaken was that of
analyzing the consumer. Consumer segments of B and C category car buyers were
analyzed in terms of their expectations from a car, their perceptions about cars and
their relationship. Proprietary techniques of research, of the advertising agency
Interface Communications, like Mind & Mood, ICON and VIP were used to
understand this consumer. The findings were:
* Size matters- big size stands for status
* Consumers seek latest technology
* Imagery but at affordable prices
* The sheer thrill and passion of driving an SUV
* Power of the vehicle makes a statement
* But along with the others, luxury was a very important parameter
* International vehicles define imagery
SUVs like Pajero, Land Cruiser and Prado are seen as urban vehicles for the rich and



famous consumers aspire to own these vehicles as the imagery of these vehicles has
become very desirable.

“Consumers want to consume premium imagery at prices affordable to them”

The Marketing Environment

Marketing environment consists of the actors and forces outside marketing that affect
marketing management’s ability to build and maintain successful relationships with
target customers. The marketing environment offers both opportunities and threats.
The environment continues to change rapidly. The marketing environment is made up
of Micro-environment and Macro-environment.

The Micro environment consists of the actors close to the company that affect its
ability to serve its customers. These actors are: the company, suppliers, marketing
intermediaries, customer markets, competitors and publics.

The Macro environment consists of the larger societal forces that affect the
microenvironment. These forces are: demographic, economic, natural, technological,
political and cultural forces.

GM STUXX

THE DEMOGRAPHIC ENVIRONMENT

The demographic position will be on the United States. Since, the target market is for
the middle class; it will provide a boost for the 32% of the total population. This
product will produce a superior value to customers who always value the brand. Also,
it will keep the popularity of the product at their trend. In this case, more and more
customers will be able to keep this product if it satisfies their condition. Additionally,
the middle class group will be loyal to this product brand and as generation goes by;
this product will be there forever. On the other hand, this product is also designed for
students, and working class people. This is due to the fancy and environmental design.



Students will be so grateful to have fancy car while the working class group will tend
to afford such an affordable environmental car design.

THE NATURAL ENVIRONMENT

This product is basically designed to reduce the carbon emission from fuels and help
to preserve our environment. It is very important to design such car to help decrease
the rate of carbon dioxide from the air and provide a better condition to tackle global
warming. This car will provide a boost to the natural environment because it is safer
and has an image to be friendlier to the environment itself. In this case, more and
more people will tend to buy such car to protect the environment by reducing the
carbon emission to the air.

THE ECONOMICAL ENVIRONMENT

The world is facing a shortage of fuel and it has become an economical crisis to
everycountry. This is evidence as the price of fuel is increasing and the probability of
the price of a barrel to increase at any day is very high. Therefore, this product will
help customers to save money because it consumes less fuel. The fuel consumption is
one of the best criteria based on this product. On the other hand, customers will be
able to satisfy with this kind of product because it is not too expensive and everybody
has the privilege to afford one. This product will satisfy the superior value of all
different customers since it has a very good design to solve to fuel shortage, less
expensive, and can be affordable to anyone.

THE TECHNOLOGICAL ENVIRONMENT

The fastest growing of information technology helps this product to be at its best. Its
design is basically provided with the help of information technology. Looking at its
design, this product benefits a lot from the technological sectors. This proves that this
product is favourable to the environment. Also, this product can be modified or even
upgraded to the standard where it will be suitable at any environmental condition. The


Information technology is very effective in letting this product to be very efficient. In
this case, it helps customers to satisfy this kind of product in this technological
environment.

THE SOCIAL AND CULTURAL ENVIRONMENT

It is believed that protecting the environment is a great concern. Therefore, this
product is purposely designed to be environmentally friendly. As a result, most people
in the United States and elsewhere are willing to offer such kind of product to save the
environment. If more and more people are keen to buy such kind of product then the
environment would be safe at any cost. Consequently, people will be more supportive
to save what is best for the communities and the environment.

SEGMENTATION

A market segment consists of a group of customers who share a similar set of wants

The marketer does not create the segments; the marketer’s task is to identify the
segments and decide which one(s) to target. Segment marketing offers several
benefits over mass marketing. The company can create a more fine-tuned product or
service offering and price it appropriately for the target segment. The company can
more easily select the best distribution and communication channels, and it will also
have a clearer picture of its competitors, which are the companies going after the
same segment.

In the context of automotive sector, we would be classifying it in the following ways-:

 BASED ON THE PRICE OF THE CAR
 BASED ON THE LENGTH OF THE CAR



 BASED ON THE USER SEGMENT

BASED ON THE PRICE OF THE CAR
On the basis of price of car we can segment the car in following ways-:

 Economy Segment
o The economy segment of car ranges up to Rs. 2.5 lacs. The products in
ths segment are Maruti 800, Alto and the newly launched product of
TATA motors i.e. NANO.

 Mid- Size Segment
o The mid-size segment of car ranges from 2.5 lacs to 4.5 lacs. It
includes the products like Hyundai santro, Maruti zen, Tata Indica etc.

 Luxury car segment

o The luxury segment of car ranges from 4.5 lacs to 10 lacs. It includes
the products like Honda city, Hyundai Verna, Mahindra Scorpio etc.

 Super luxury car segment
o The super luxury segment of car ranges above 10 lacs. This segment
satisfies the elite class of the society. It includes the products like
Skoda Laura, Honda Accord, BMW, Mercedes, Audi etc.

BASED ON THE LENGTH OF THE CAR

 A segment- Cars that are less than 3.5 meters long (800, omni)
 B segment- Cars between 3.5 meters to 4 meters long( Zen, SX4, Santro)
 C Segment- Cars between 4 meters to 4.5 meters long (Verna, Honda city,
ford fiesta)



 D segment- Cars that are more than 4.5 meters long( Mercedez, Sonata,
Accord, Skoda)

BASED ON THE USER

Segmentation of automotive sector is also based on the user of the products. Like the
example of TATA Motors, when it observed that their product ‘INDICA’ is used
extensively by the taxi operators, it came up with a new model of the car having
Round Tail Lights to distinguish it from the car having vertical tail lights used by the
individual buyers.

 Individual Buyers
 Taxi operators -:
 Government /non-government institutions

TARGET MARKETS

The segment that gives the greatest opportunity to the marketer is called target
marketing.

VOLVO MOTORS

Volvo Motors develops its cars for buyer to whom automobile safety is a major
concern. Volvo therefore positions it’s as a safest a customer can buy.



.

HYUNDAI MOTORS

Hyundai marketing strategy is differentiated marketing. Its primary consumer target
is middle to upper income professionals who need true value for their money and
comfortable ride in city conditions. Its secondary consumer target is college students
who need style and speed. Its primary business target is midsized to large sized
corporate that want to help their managers and employees by providing them a car for
ease of transport. Its secondary business target is entrepreneurs and small business
owners who want to provide discounts to managers buying a new car.

Each of the four marketing strategies conveys Hyundai differentiation to the target
marketing segments identified above.

Hyundai Santro is targeting middle
professionals

Accent was launched to target corporate clients



NICHE MARKET

A niche is a more narrowly defined group seeking a distinctive mix of
benefits. Marketers usually identify niches by dividing a segment into sub segments.

BMW is targeting high class people but it is mainly targeting
the young people who earn a lot of money up to the age of 35-40 years and want to
have a stylish saloon.

Mercedes is also targeting high class people but it is mainly
targeting the CEO’s, chairmen, etc of age group of 50-60 years.



MARKETING MIX
A Marketing mix is the division of groups to make a particular product by pricing,
product, branding, place, and quality. Although some Day1 marketers have added
other P's, such as personnel, packaging and physical evidence, the fundamentals of
marketing typically identifies the four P's of the marketing mix as referring to:

"Marketing Mix" is set of correlated tools that work together to achieve company's
objectives, they are: product, price, promotion, place.

The set of controllable tactical marketing tools, product, price,place and promotion -
that the firm blends to produce the response it wants in the target market:

• Product - A tangible object or an intangible service that is mass produced or
manufactured on a large scale with a specific volume of units. Intangible
products are often service based like the tourism industry & the hotel industry.
Typical examples of a mass produced tangible object are the motor car and the
disposable razor. A less obvious but ubiquitous mass produced service is a
computer operating system.
• Price – The price is the amount a customer pays for the product. It is
determined by a number of factors including market share, competition,
material costs, product identity and the customer's perceived value of the
product. The business may increase or decrease the price of product if other
stores have the same product.
• Place – Place represents the location where a product can be purchased. It is
often referred to as the distribution channel. It can include any physical store
as well as virtual stores on the Internet.
• Promotion – Promotion represents all of the communications that a marketer
may use in the marketplace. Promotion has four distinct elements -
advertising, public relations, word of mouth and point of sale. A certain
amount of crossover occurs when promotion uses the four principal elements
together, which is common in film promotion. Advertising covers any



communication that is paid for, from television and cinema commercials, radio
and Internet adverts through print media and billboards. One of the most
notable means of promotion today is the Promotional Product, as in useful
items distributed to targeted audiences with no obligation attached. This
category has grown each year for the past decade while most other forms have
suffered. It is the only form of advertising that targets all five senses and has
the recipient thanking the giver. Public relations are where the communication
is not directly paid for and includes press releases, sponsorship deals,
exhibitions, conferences, seminars or trade fairs and events. Word of mouth is
any apparently informal communication about the product by ordinary
individuals, satisfied customers or people specifically engaged to create word
of mouth momentum. Sales staff often plays an important role in word of
mouth and Public Relations



PRODUCT

MARUTI SWIFT

European Styling. Japanese Engineering. Dream-Like Handling.

The new Swift is a generation different from Suzuki design. Styled with a clear sense of
muscularity, its one-and-a-half box, aggressive form makes for a look of stability, a sense
that it is packed with energy and ready to deliver a dynamic
drive. Its solid look is complemented by an equally rooted road presence and class-
defining ride quality. New chassis systems allow for the front suspension lower arms,
steering, gear box and rear engine mounting to be attached to a suspension frame. You
get lower road noise, and a greater feeling of stability as you sail over our roads with
feather-touch ease.

TATA INDICA

Though a late entrant, the Indica quickly established itself as the benchmark for the
segment. By offering exciting features, the car changed the rules of the category in
Space, Power, Style, Safety and Economy for international market. The Indica
ensured a pleasant ride and handling experience as it had features like wide large
tyres, generous leg room and independent front and rear suspension. It developed a
new segment of diesel small cars along with its petrol offering. The luggage space
was also the best in its class.



The rigid 980 kgs steel body of the car was rigorously tested at India's first and only
crash test facility. A collapsible steering wheel, impact absorbing bumpers, anti-
submarine seats, crumple zones and side impact beams are just a few of the features
that make the Indica one of the safest cars on the roads today. Savings are ensured
with the fuel-efficient 1.4L diesel engine, while the 1.4L petrol engine is optimized
for performance.

Indica features for international market:

• Collapsible steering column
• Side-impact beam
• Energy-absorbing crumple zones in the front
• Anti-submarine seats
• Child-safety locks on rear doors
• Laminated front and rear windshield glass

SCORPIO

Rational benefits: World class vehicle, good looks, car like comfort, great value
Emotional benefits: Ownership experience of thrill, excitement and power
Relational benefits: Young modern, premium, city companion / extension of lifestyle.

PRODUCT, SERVICES AND BRANDING STRATEGY


What is a Product?

Product is anything that can be offered to a market for attention, acquisition, use, or
consumption that might satisfy a want or need. Products include more than just
tangible goods. Broadly defined, products include physical objects, services, events,
persons, places, organizations, ideas or mixes of these entities. Services are a form of
product that consists of activities, benefits or satisfactions offered for sale that are
essentially intangible and do not result in the ownership of anything.
Example: banking, hotel and airline.

Products, Services and Experiences:

Today, companies are creating and managing customer experiences with their
products.

Levels of Products and Services:

Product Planners need to think on three levels:

1. Core Benefit: This addresses the question “What the buyer is really buying?”. At
this level, marketers must define the core: problem-solving benefits or services that
consumer seeks.

2. Actual Product: At this level, the core benefits must be turned into actual
products. Product planners need to develop product and service features, design,
quality level, brand name and packaging.

3. Augmented Product: Finally at this level, the product planners must bundle the
products with services. They must build an augmented product by offering additional
consumer services and benefits.

Hyundai Santro



CORE PRODUCT

Core Product is the problem solving services or benefits that consumers purchase the
product for, and by applying this concept to Santro you can state that the core product
is speed, transportation, and freedom to go anywhere, easy traveling, and
convenience.

ACTUAL PRODUCT

Actual product meaning the product’s parts, quality, features, design, brand name and
other attributes received. Now, if we use these things and combine it with Santro we
can state that the actual product is: Santro, as the brand name, it matters little about
the name, because HYUNDAI is very famous already, people will recognize the
brand in an instance, and features such as the fact that the car is fully customizable, so
you can add most things to your car, i.e. Stereo, big speakers, rims for the tires, TV in
seat etc., also design, where you can choose between a lot of colours, seat colour, and
fabrics, all the things you can imagine. And of course the quality, the car will be
regular HYUNDAI standard, meaning quality will be the same as for any other car
made by HYUNDAI, which is high quality.

AUGMENTED PRODUCT

Augmented product is the additional consumer services and benefits built around the
core and actual product, as well as add value and differentiate the product from its
competition. The augmented product for Santro is after-sale services such as free
yearly check up, as well as a free oil check after 2 years, free installation of additional
features when you customize your car, and help with car insurance, and quick repair
services.

PRODUCT CLASSIFICATIONS

GM STUXX


From the 4 product classifications, convenience, shopping, specialty and unsought,
the Stuxx is classified as a specialty good, since specialty goods are purchased
infrequently, and most of the times, buyers make special purchasing effort. By listing
some of the characteristics for specialty products we can say that substitutes are not
accepted, and that the product is infrequently purchased, and since our Stuxx is a GM
we know that there are some brand loyalty as well. And if we look at the strategy, we
can note limited distribution, and consumers “might” seek our product regardless of
location,

STAGES IN DEVELOPING PRODUCT AND SERVICE
ATTRIBUTES

PRODUCT ATTRIBUTES

Product attributes consist of several categories, such as Product quality, Product
features, Product style and design. For Stuxx product quality is the performance
quality, because it can be used a lot and still last for a long time (Durability). And as
for Product style we know that Stuxx offers many colours and many styles used to
attract attention from trendy consumers, and general consumers, the style however
does not contribute to better performance. For Product design, the car has a very
special chassis that allows many changes, making this a fully customizable car, where
you are free to alter appearance, features, construction, such as adding items on the
back of the car, lowering the car making it look more stylish like a race car.

BRANDING

There are several advantages for buyers when talking about branding, first of all
product recognition, everyone knows GM, so if they know GM, then they know Stuxx
as well. Quality on Stuxx is same standard as the rest of GM‘s cars. There are. But not


only buyers have advantages, no, sellers as well. Here are a few examples, basis for
product’s quality, provides legal protection, helps to segment the markets.

BRAND STRATEGY
A study of international brand names was done and a classification of brand names of
midsize cars and SUVs was done into groups. International brand naming trends and
strategies were analyzed. New names were generated. These brand names were
researched massively first by qualitative techniques and then by quantitative
techniques.

The name that emerged as most popular, and which was also the most liked name
internally at Mahindra was SCORPIO.

BRAND ENDORSEMENT STRATEGY
The relation between Scorpio and the mother brand Mahindra was also deliberated
upon. The strategy chosen for Brand Endorsement was - Scorpio from Mahindra -
shadow endorsement, one which does not shout “Mahindra.”
The Mahindra brand image was not modern and young. There was a need to create a
strong distinct modern brand. Hence Mahindra as a Masterbrand could not contribute
towards enhancing the Value Proposition. Yet Mahindra had to provide source
reassurance. Also the distribution would be through Mahindra dealerships. Hence it
became a shadow endorser.

PACKAGING



Since product is a car, packaging might not be of much importance. Cars usually
don’t come in a box. However, since Santro is made for students and older, they have
decided to make a big box, free of all charges, if the car is a gift for someone’s
birthday. Santro is a good choice as a “first” car; parents can easily buy it as a gift for
their young teenagers/students.

LABELING
No labelling, however for curious users, there will be a small brochure about the
“ingredients” car parts, so they can see how exactly the car works, and what and
where the different parts are from.

PRODUCT SUPPORT SERVICES
As for product support services, there are 3 things to know: Assess the value of
current services and obtain ideas for new services. Assess the cost of providing the
extra services and putting together a package of services that delights the customers
and yields profits for the company. All these, are already applied to Santro if we look
at Augmented Product, which I wrote about earlier. Customers would be delighted
about those extra services, and might tell friends about them and in the end make
more profit for the company.

PRODUCT LINE DECISIONS (The Product Mix)
When it comes to product line decisions, and product mix to be exact; we will find
that there are 3 types, namely width, length and depth. As for Stuxx, it is definitely
width, because Stuxx is a different product line for GM.

PRICE

MARUTI SWIFT



After launching cars for the masses since so many years, India’s largest automobile
manufacturer is now targeting the premium segment with their latest model from the
Suzuki’s stable. Pricing of this premium hatchback is start from Rs.4 lakh. This price
range would practically rip apart Hyundai’s offering in Getz, which is priced at a
much higher tag of Rs. 4.5 lakh. Both the companies are known for their value based
offerings and Maruti with their extensive service network and brand reputation for
making reliable cars should get the customer’s nod over their competition.

TATA INDICA
Tata Motors adopted a competitive pricing strategy for Indica in the global market.
Prices were fixed on the basis of the norms prevailing in the international market.
Also the prices offered by their competitors like Toyota, Ford, Fiat, were kept in mind
while deciding the prices.

SCORPIO

Pricing Strategy: to be a premium brand yet
having universal appeal .Scorpio was to compete with the midsize
cars like Hyundai Accent, Ford Ikon, Opel Corsa, Maruti Suzuki Esteem on the one
side and UVs like Toyota Quails, Tata Safari and the Tata Sumo on the other. Scorpio
adopted the penetrative pricing strategy positioned in the psychological price barrier
of Rs. 5 -7 Lakhs.

PROMOTION

MARUTI SWIFT



When Maruti Udyog launched the Swift, the automotive industry was agog with
expectation that the car had the makings of a real winner. Three versions were
launched with the base variant carrying a retail tag of Rs 3.85 lakh, ex-showroom,
New Delhi, and this aggressive pricing only reinforced this feeling.

Event Organized By Maruti to Promote Swift

Fever FM and Maruti Suzuki Swift organize a Night
Rally for Delhi-ites
On March 24, 2009

In a co-operative marketing initiative, Fever FM and
Maruti Suzuki Swift came together to organize a Night
Rally in Delhi. The Swift Night Life Rally was
organized for the Swift Life Club. The brand tied up with the station to extend the
experience to the people who were unable to participate in the activity.

Honda
Road Shows
The company plans to stage road shows, to
display vehicles in the pavilions during various
college festivals and exhibition.

Hyundai
Television advertisements
Advertisements to promote and market
our product are shown on leading television


channels. Major music and sports channels promote and they reach out to the youth
will be promoted through Star, Zee, Sony and

A TV Commercial by Hyundai doordarshan etc as it has more viewers.

.

Radio
Radio is the medium with the widest coverage. Studies have recently shown high
levels of exposure to radio broadcasting both within urban and rural areas, whether or
not listeners actually own a set. Many people listen to other people's radios or hear
them in public places. So radio announcements are made and advertisements are
announced on the radio about the product features and price, qualities, etc.

Print Ads
Daily advertisements in leading newspapers and
magazines are used to promote the product.
Leaflets at the initial stage are distributed at
railway stations, malls, college areas and various
other locations.

Print ad by BMW

Workshops and Seminars
Workshops and seminars are held in colleges and big corporate to make people aware
about the companies past performance and product features, its affordability and
usage, vast distribution network.



Banners, neon signs
Hoardings, banners, neon signs are displayed at clubs,
discs, outside theatres, highways and shops to promote its
brand car.

Booklets and pamphlets
Booklets are kept at car showrooms, retail battery outlets, etc for the customer to read.
These booklets provide information about its company; the products offered which
suits the customers need accordingly.

TOYOTA COROLLA
The Promotion for Toyota Corolla consists of a blend of activities making its
Promotion Mix. Its Promotion Mix consists of almost all the possible techniques of
Promotion used for any other product. Some of the major elements of Promotion Mix
of Toyota Corolla are listed as under:

Advertising
It uses many different techniques of Advertisement as a part
of its Advertising Strategy.

Most of the Print Ads of Toyota Corolla are individually
targeted at one of these factors such as Comfort, Performance,
Styling, Power, Leg Room, Design, and Driving Pleasure.
One most common feature of almost all the Ads is that in every Advertisement, the
fact that it is the World’s Largest Selling Car and its presence across 160 countries
is present. This is done to because the company wants to differentiate the product in
terms of its Reliability that it is an entrusted brand of 30 Million people across the
globe. The fact that it is present in 160 countries proves that it is a Global Car.

There are 3 TV Commercials of this Car in India. The Commercials show that this
Car is targeted mainly at the Indian youth and young Executive. It has been positioned



as a little sportier which is the main reason that it is for young people and is also like
by them too.

The Brochures, Posters/Leaflets are such designed that shows that Corolla is a car for
people who demand Performance, Style, Power and Sheer Driving Pleasure. The car
being a perfect combination of these factors makes it a huge success across its
segment.

The Other Sources of Advertisement include Bill Boards, Display Signs, POP,
Displays, Symbol/Logo. The company does the Advertising of Corolla by displaying
Bill Boards and Display Signs at various target places where it feels that prospective
buyer will come across it. At the showroom also, there are huge amount of Point Of
Purchase Displays and also Symbols/Logo which add to it.

One of the major sources of Sales Promotion is Trade Fairs like AUTO EXPO,
MOTOR SHOW etc. The company used to take part in these types of fairs and used
it for its Sales Promotion. But now the trend is shifting because the company thinks
that if they want to launch a product on a National
Level, then there is no need for such kind of shows as
now there are various other powerful sources of media
available to them. Moreover the cost spent on these
kinds of fairs was not justified. So therefore the
company is now keeping away from fairs. In 1999 Toyota last time participant at the
RAC rally in Britain.



Some other Sales Promotion technique used by the company is the Festival Season
Offers it introduces in the market at the time of Diwali, New Year, Christmas,
Navratri etc to boost short term sales.

Public Relations and Community Building Exercise

• Contribution to Tsunami
• Toyota Kirloskar Motor wins Best Ornamental Garden award for its landscape
• Toyota Kirloskar signs MoU with Bangalore University for promotion of
Japanese Language
• Toyota observes earth day by supporting local schools
• Organizing Drawing/Painting Competition on ‘Me and my Environment’ for
kids from Govt. Schools.



PERSONAL SELLING


Personal Selling largely takes place at the Dealers’ End. The way the customer is
attended depends mainly on the Dealer as he acts as an interface between the
company and the Consumer.

The various cases in which Personal Selling takes place is Individual Sales, Corporate
Sales, Sales Presentations, Fair and trade Shows. Mostly in case of Individual Sales
the Customer goes to the showroom and takes a look at the product. There he is
attended to by the Sales Personnel of the Dealership. Sometimes the Senior Sales
Executive has to make Sales Presentation to Corporate Buyers. Personal Selling is
also practiced at Trade Fairs and Auto Shows wherein the Company appointed Sales
Personnel attend prospective customers and also book their orders.

DIRECT MARKETING
In the case of Direct Marketing the Company Officials directly contact the
Prospective buyers with the information available through various sources. For
example in case of Road Shows, Trade Fairs, Auto shows etc. Sometimes the existing
customers also provide references of prospective buyers such as their friends or
relatives.

Toyota Stall at the Auto Expo
GM STUXX



GMI has launched several industry first programs such as Opel Club Card facility,
Opel Carnivals, Opel Autobahn newsletter, chauffeur training programmes, mobile
road-show caravan, car exchange programme for Opel customers, OK 5-Star used car
programme,
There is two-year and four-year warranty schemes, 2 year service holiday etc. Such
programmes have helped GM in building its brand equity and developing a loyal
customer base.

SCORPIO
Brand Promise: ‘Luxury of a car. Thrill of an SUV’
this brand positioning addresses the key consumer Insight and the product delivers the
promise. The position is also a unique proposition, which will help the brand have a
distinct image in the consumers’ mind.

‘Baseline - “Nothing Else will do”

The baseline captures the essence of the brand, which is superiority and
uncompromising attitude. It also summarises the spirit behind the making of the
Scorpio.

Media Strategy

*Dramatic and high impact launch
* High visibility
* Push brand image even by the media vehicle

Building impact through multiple-media
* PR, Mass Media, Direct Marketing, Events



Public Relations
Pre-launch excitement and buzz was created by a full blown PR program. Media
coverage on the IDAM process, the people behind the Scorpio, the obsession, the
world class technology, etc set the tone for the hyped up launch. PR was also the first
tool used for launching the Scorpio. The coverage of the launch was massive. It got
four cover stories

Mass Media
‘While the media targets would be achieved through the right selection of the media
mix, the Scorpio media posture was to ensure that Scorpio was present on the decided
media but ‘with a difference.’ Scorpio would use media innovations to create
differentiation on the traditional media and do things in a ‘bigger and better’ manner.

Customer Relationship Management (CRM)
CRM as a tool was used to create positive word-of-mouth, to monitor customer
experiences and generate referrals. A series of CRM activities were implemented with
regular direct communication, events and customer research. The CRM plan included
a welcome Pack on filling up Scorpio Club (Top Gear) form, satisfaction surveys,
Events, Festive offers, Rewards Program, etc.

TATA INDICA
‘More car per car’ is the famous tagline of this product. The Indica’s positioning has
remained consistent with the brand's offering in an increasingly competitive market.
The Indica is now synonymous with the word ‘More, by encapsulating the inherent
product strengths and marrying them with the customer trait of desiring ‘More’.

A promotion strategy for Indica v2 in international market is more or less same as that
of the Indian market. Media innovations have been a key to the success of the Indica.



Tata at 29th Bangkok International Motor Show 2008

The positioning was strengthened with the successful launch of the Indica V2, which
assumed the leadership position in the year of its launch.

The Indica v2 was launched in the international market only through the press
medium, with three diesel versions and a petrol version, and this campaign shattered
many automobile advertising myths. The car was launched without any television
advertising, but through high-impact newspaper ads, dominating the medium and
delivering the desired impact. Headlines such as ‘You’ll never have to suffer a small
car again’ assisted customers in distinguishing between their old choices and the
Indica. This, in effect, placed the Indica on the pedestal of leadership, set to change
the rules of the game.

A recent campaign for the Indica V2 has helped in building the product on the rational
platform and adds an emotional layer. Anchored on the insight ‘It’s only human to
want more’, the campaign revolves around interesting candid moments in the daily
lives of normal everyday people who desire more; be it a boy wanting the other boy’s
bigger lollipop, or a baby crying when her parents stop driving her around in the
Indica V2. The latest campaign moves to the ‘Even more car per car’ positioning.

PLACE



MARUTI SWIFT

The car manufacturing company, called Maruti Suzuki Automobiles India Limited, is
a joint venture between Maruti Udyog and Suzuki Motor Corporation holding a 70
per cent and 30 per cent stake respectively.

The Rs1,524.2 crore plant has a capacity to roll out 1 lakh cars per year with a
capacity to scale up to 2.5 lakh units per annum. The car manufacturing plant will
begin commercial production by the end of 2006.

The engine and the transmission plant has owned by Suzuki Power train India Limited
in which Suzuki Motor Corporation would hold 51 per cent stake and Maruti Udyog
holding the balance. The ultimate total plant capacity is three lakh diesel engines.
However, the initial production is 1 lakh diesel engines, 20,000 petrol engines and 1.4
lakh transmission assemblies.

TATA INDICA
Tata automobile group have a very large distribution network all over the world. Tata
Indica v2 is exported and assembled in many countries. South Africa has an
assembling unit for consumer vehicles. Other places where the company’s products
(Tata Indica) are exported and in some assembled also are mentioned below:

• Africa :- Algeria , Angola , Ethiopia , Ghana , Kenya , Mauritius , Sudan ,
Uganda , South Africa , Senegal etc.

• Europe: - Greece, Hungary, Italy, Malta, Portugal, Spain,
• Switzerland, UK and Ireland.
• CIS: - Belarus, Russia, Ukraine.
• Asia: - Bangladesh, Malaysia, Sri-Lanka, Nepal, Bhutan.
• Australia continent

PEOPLE



There are various types of people in any Organization. The various types of people in
case of Toyota can be classified as Customers, Sales Executives, Society,
Government, Competitors, and Media.

The most important out of these is our Customers. A customer can be any person who
purchases the product; he may or may not use that product for himself. A consumer is
one who actually uses the product himself. For example a father purchases Corolla for
his son. In this case the father will be the Customer and son will be the Consumer.
The main people involved in the purchase decision of the car are the Family
Members. In a recent study conducted, it was found out that these days children play a
major role in deciding which car to buy for the family. The company has to seriously
take into consideration all these factors. Also the factors that whether one uses the car
for travelling, office, shopping or family/personal etc.

As this car falls into a segment where price range is between 9-11 Lacs, so the
company has to target those people who not only have the ability to spend that much
amount of money but are also willing to spend that much amount of money. Data
regarding the purchasing power of different classes of people is also very necessary.
Customers’ tastes and preferences have to be taken into consideration.

Next comes the Sales Executives who deal with the final customers and finish the
sales call. The Sales Executives play a major role. As the people of the organization
they are a window through which the customers interact with the company. They have
to be trained properly through customized modules designed especially for them
taking into consideration the various factors.

Corolla Owners’ Profile
• Age : 25-45



• Occupation : Business Class or High Level Service Executives
• Social Class : These people (Lower Upper to Higher Upper Class) generally
have an existing C
segment car before they purchase Corolla
• Areas : Urban/ Sub Urban, major Cities/Towns
• Income Level : More than Rs. 2 lacs p.m.

PHYSICAL EVIDENCE

The Physical Evidence is created by displaying physically the product. Along with
that creating an atmosphere for the customers where in they feel the presence of
product. Toyota creates a powerful physical evidence for its customers through its
Showrooms, Hoardings, Logo etc. All the showrooms are designed on a common
platform. The interiors of all the showrooms across India are the same. The designs
for the same are created by a team of Professionals in this field. The designs are
prepared very carefully keeping into consideration various factors such as customers’
tastes and preferences, likes and dislikes etc. You will always find a Toyota
showroom having the Toyota Bill Board outside with white base and red foreground.
This creates a physical presence and people can feel the product.

SHOWROOM INTERIOR AND EXTERIOR



SCORPIO

Infrastructure
Thirty-five showrooms across the country were redone entirely with the same look
and identity and a décor built around movement, technology and sportiness. The
theme focused on giving the customer a memorable experience.


The showroom revamp was centered on the intention to provide a uniform customer
experience at all the touch points and to provide the customer with a unique
“experience” and not just a “product”. Therefore the back office would remain outside
the customer’s line of vision because the customer would be concerned with the
product and not with the paperwork.

PROCESS
The various processes involved in getting available the product from the manufacturer
to the end consumer are to be efficiently performed by the company. The processes
start when the customer is contacted by the Sales Personnel of the Dealership or the
customer contacts the Dealership if he is interested to buy a Corolla. The data
regarding the various customers can be had from various sources of data available
through different agencies which specialize in providing data. After the call is made,
an appointment is fixed. The Sales Executive prepares for the meet. He collects all the
possible information which would be needed for the meeting i.e. data about the
customer, details about the car, maximum permissible discount structure, finance
options, delivery terms, free accessories which will be provided to the customer.

The sales personnel will find out that what is the present vehicle used by the
customer, his present buying power, satisfaction level, seriousness in buying etc.
Along with that he will also find out his exact needs, desired level of satisfaction,
lifestyle patterns etc. Sales personnel also ask certain questions through which he
comes to know about the various factors he wants to know. He asks both open as well
as closed ended questions. With the help of these questions, he can come to know the
various reasons due to which he is buying that car. These can be Performance, Safety,
Comfort, Driving Pleasure, Appearance etc.

These processes either lead to completion of sales call or sometimes unfortunately
leads to unsuccessful sales call which could not be competed.

DEALING WITH THE COMPETITION


“Poor firms ignore their competitors; average firms copy their competitors; winning
firms lead their competitors” PHILIP KOTLER

GENERAL ATTACK STRATEGY
FRONTAL ATTACK: the attacker matches its opponent’s product, advertising, price and
distribution.

In this advertisement BMW is using frontal attack strategy against its biggest competitor
AUDI



AUDI is replying the BMW advertisement

Along with AUDI and BMW, SUBARU and BENTLEY are using frontal attack strategy
against each other’s products.

DISTRIBUTION CHANNELS


SCORPIO

Since the Scorpio was targeted at an urban clientele it needed a stronger distribution
presence in Metros and urban areas. Hence, the distribution channel had to focus on
providing an appealing experience for modern car buyers and on offering
international standards of auto retail.
The Scorpio was launched in a phased manner - first in Metros Mumbai, Delhi,
Bangalore, Chennai. Twenty cities were included over a period of 4 months and
within a year 50 cities were covered. This ensured attention to main markets and to
ensure that initial production of the vehicle could match demand. Dealerships were
revamped prior to launch in a particular city.

The Marketing Distribution Channel of Toyota Kirloskar Motor India, the
Manufacturer of Corolla, is a Single Level Channel depicted

Manufacturer-TKM India, Bangalore

Toyota Flagship Dealer

Consumer



DISTRIBUTION CHANNEL OF HYUNDAI

STOCKIST

DEALERS

SUB DEALERS

BOOKING AGENTS

THE VALUE CHAIN
The Value-Chain Network within Stuxx is a significant medium for measuring the
products quality and performance, from Inbound Logistics-to- Operations-to-
Outbound Logistics-to- Marketing/Sales-to-Service. As a manufacturing firm, GM
that produces Stuxx manufactures the vehicle and then distributes it to its store all
over USA. The whole team network has a common purpose in operation and that is to
produce and to sell it to make the customer smiling when disembarking. This common
belief has brought a successful feedback to the overall sales and because providing the
service for selling is considered an important task by the employees at Stuxx, it has
never failed. Stores are designed so that accommodating a customer is luxurious but
keeping his/her perception to as “not expensive”-sense.

SWOT ANALYSIS OF
MARUTI UDYOG LTD.



 STRENGTHS
 WEAKNESSES
 OPPURTUNITIES
 THREATS

STRENGTHS

The Quality Advantage

Maruti Suzuki owners experience fewer problems with their vehicles than any
other car manufacturer in India (J.D. Power IQS Study 2004). The Alto was
chosen No.1 in the premium compact car segment and the Esteem in the entry
level mid - size car segment across 9 parameters.

The J.D. Power APEAL Study 2004 proclaimed the Wagon R no. 1 in the
premium compact car segment and the Esteem No.1 in the entry level mid -
size car segment. This study measures owner in terms of design, content,
layout and performance of vehicles across 8 parameters.

A Buying Experience like No Other

Maruti Suzuki has a sales network of 307 state-of -the-art showrooms across
189 cities, with a workforce of over 6000 trained sales personnel to guide our
customers in finding the right car. Our high sales and customer care standards
led us to achieve the No.1 nameplate in the J.D. Power SSI Study 2004.

Quality Service across 1036 Cities



In the J.D. Power CSI Study 2004, Maruti Suzuki scored the highest across
all 7 parameters: least problems experienced with vehicle serviced, highest
service quality, best in-service experience, best service delivery, best service
advisor experience, most user-friendly service and best service initiation
experience.

92% of Maruti Suzuki owners feel that work gets done right the first time
during service. The J.D. Power CSI study 2004 also reveals that 97% of
Maruti Suzuki owners would probably recommend the same make of vehicle,
while 90% owners would probably repurchase the same make of vehicle.

WEAKNESSES

Commodity price risk
MUL’s commodity price risk relates to higher cost due to change in price of input
such as Ferro-alloys (steel), non Ferro alloys (aluminium), plastic and rubber, which
go into the production of automobile.
In order to mitigate these risks, the company continues to attempt to enter into long
term contracts based on its projection of prices in a volatile commodity market, where
your company gives top priority to ensuring smooth availability of inputs, long term
contracts are helpful. They also help to minimise the impact of growing input price.
Conversely, long term contractor dilute the benefit if any, of a decline in input price.
Exchange Rate Risk
Your company is exposed to the risks associated with the fluctuation in foreign
exchange rates mainly on import of component & raw material and export of vehicles.
Your company has a well structured exchange risk management policy. The company
manages its exchange risk by using appropriate hedge instrument depending on the
prevailing market condition and the view on the currency.

OPPURTUNITIES



Leading Growth

As the market leader, your company led the growth in the passenger car sector last
year. Maruti's sales went up 30% to 4,72,000 units. This, as I said earlier, is the highest
annual sale since your company began operations 20 years ago. Maruti also gained
market share, mainly on account of its performance in the competitive A2 segment
where it increased its share from 40.3% in 2002-03 to 47.7% in 2003-04.

The record sales performance was reflected in the financials. Net Sales (excluding
excise) grew by 31% to Rs 93,456 million. Operating Profit Margin increased from 0.8
% in 2002-03 to 4.7 % in 2003-04. Profit after Tax jumped 270% to Rs 5421 million.
Your company is committed to motorising India. Towards this end, your company's
partnership with State Bank of India and its Associate Banks took organised finance to
small towns to enable people to buy Maruti cars.

THREATS
In the course of its business, MUL is exposed to a variety of market and other risks
including the effects of demand dynamics, commodity prices, currency exchange
rates, interest rate, as well as risk associated with financial issues, hazards event and
specific asset risk. Wherever possible, we use the instrument of insurance to mitigate
risk.
Business risk
The automotive industry is very capital intensive. Such investment requires a certain
scale of operation to generate viable returns. These scales depend on demand. Maruti
is still depending mainly on the Indian market. Although 2004-05 was year of
continued growth for the Indian economy, whether this growth momentum will
continue has to be seen.

THREATS FROM COMPETITORS



Tata Motors Limited
In the 2004 fiscal year, Tata Motors generated revenues of $3,542.2 million
(INR154,935.2 million). The company made a net profit of $185 million (INR8,103.4
million) in the 2004 fiscal year.

General Motors Corporation
For the fiscal year ended December 2004, GM generated revenues of $193,517
million, an increase of 4.3% from the previous year. The company reported a net
income of $2,805 million for fiscal 2004, down 26.6% from the previous year.

PRODUCT LIFE CYCLE



INTRODUCTION

The feeling of freedom and being one with the Nature comes only from riding a two
wheeler. Indians prefer the two wheelers because of their small manageable size, low
maintenance, and pricing and easy loan repayments. Indian streets are full of people
of all age groups riding a two wheeler. Motorized two wheelers are seen as a symbol
of status by the populace. Thus, in India, we would see swanky four wheels jostling
with our ever reliable and sturdy steed: Two wheelers in India are the second largest
producer and manufacturer of two-wheelers in the world. It stands next only to Japan
and China in terms of the number of two-wheelers produced and domestic sales
respectively. Indian two-wheeler industry has got spectacular growth in the last few
years. Indian two-wheeler industry had a small beginning in the early 50's. The
Automobile Products of India (API) started manufacturing scooters in the country.
Bikes are a major segment of Indian two wheeler industry, the other two being
scooters and mopeds. Indian companies are among the largest two-wheeler
manufacturers in the world. In the initial stages, the scooter segment was dominated
by API; it was later overtaken by Bajaj Auto. Although various government and
private enterprises entered the fray for scooters, the only new player that has lasted till
today is LML.

The motorcycle segment was initially dominated by Enfield 350cc bikes and Escorts
175cc bike. The two-wheeler market was opened to foreign competition in the
mid-80s. And the then market leaders - Escorts and Enfield - were caught unaware by
the onslaught of the 100cc bikes of the four Indo-Japanese joint ventures. With the
availability of fuel efficient low power bikes, demand swelled, resulting in Hero
Honda - then the only producer of four stroke bikes (100cc category), gaining a top



slot.

The first Japanese motorcycles were introduced in the early eighties. TVS Suzuki and
Hero Honda brought in the first two-stroke and four-stroke engine motorcycles
respectively. These two players initially started with assembly of CKD kits, and later
on progressed to indigenous manufacturing. In the 90s the major growth for
motorcycle segment was brought in by Japanese motorcycles, which grew at a rate of
nearly 25% CAGR in the last five years.

The industry had a smooth ride in the 50s, 60s and 70s when the Government
prohibited new entries and strictly controlled capacity expansion. The industry saw a
sudden growth in the 80s. The industry witnessed a steady growth of 14% leading to a
peak volume of 1.9mn vehicles in 1990.

In 1990, the entire automobile industry saw a drastic fall in demand. This resulted in a
decline of 15% in 1991 and 8% in 1992, resulting in a production loss of 0.4mn
vehicles. Barring Hero Honda, all the major producers suffered from recession in
FY93 and FY94. Hero Honda showed a marginal decline in 1992.
The reasons for recession in the sector were the incessant rise in fuel prices, high
input costs and reduced purchasing power due to significant rise in general price level
and credit crunch in consumer financing. Factors like increased production in 1992,
due to new entrants coupled with the recession in the industry resulted in company
either reporting losses or a fall in profits.



Key players in the Two-wheeler Industry

There are many two-wheeler manufacturers in India. Major players in the 2-wheeler
industry are Hero Honda Motors Ltd (HHML), Bajaj Auto Ltd (Bajaj Auto) and TVS
Motor Company Ltd (TVS).



SEGMENTATION OF TWO WHEELER
A Two Wheeler Sector Sub-Segmenting in the three Segments.

1. Motorcycle

2. Scooter

3. Mopeds



Segment-wise Analysis of Indian Two Wheeler Market

Segment Description share in Share in CAGR
2001-02 2006-07
A1 Scooter with 5% 0% 33.99%
engine
capacity less
than 75 cc
A2 Scooter with 5% 10% 32.9%
engine
capacity
between
75-125 cc
(Scooterette)



A3 Scooter with 12% 1% -27.7%
engine
capacity
between
125-250 cc
B1 Motorcycle 62% 66% 14.9%
with engine
capacity
between
75-125 cc
with engine
capacity
between
75-125 cc
with engine
capacity
between
75-125 cc
C1 Mopeds 10% 5% -2.7%

Growth Prospects and Key Drivers of the Indian Two Wheelers Industry

The growth witnessed by the Indian two wheeler industry indicates the growing
demand for low cost personal transportation solutions amongst the 300 million Indian
middle class consumers. Despite this spectacular growth rate, the two wheeler
penetration (number of two wheelers per 1000 inhabitants) in India remains lower
than other Asian countries. This fact provides an opportunity for continued growth in
the market. India has the lowest Penetration of two wheelers as compared to countries
like Taiwan, Thailand, Malaysia, Vietnam, Indonesia and China. In the present
scenario, growth in the two wheeler Industry will be driven by several factors:

Rise in India’s Young Working Population



With the rising levels of per capita income of people, the Indian two wheeler market
offers a huge potential for Growth. This growth is relevant in the light of the fact that
70 per cent of India’s population is below the age of 35 Years and 150 million people
will be added to the working Population in the next five years. The number of women
in the urban work force is also increasing; this will lead to the Growth of gearless
scooters.

Rise of India’s Rural Economy and Growth in Middle Income Households

The growth prospects of the Indian rural economy offer a significant opportunity for
the motorcycle industry in India. The penetration of motorcycles amongst rural
households with income levels greater than US$ 2,200 per annum has already
increased to over 50 per cent. The current target Segment for two wheelers, i.e.,
households belonging to the Income category of US$ 2,200–12,000 is expected to
grow at a CAGR of 10 per cent.
Greater Affordability of Vehicles

The growth in two-wheeler sales in India has been driven by an increase in
affordability of these vehicles. An analysis of the price trends indicates that prices
have more or less stagnated in the past. This has been part of the marketing strategy
adopted by the manufacturers to gain volume, as well as conscious efforts adopted to
bring down costs. The operating expenses of leading manufacturers have declined by
around 15 per cent in the last five years. With greater avenues of financing, the
customer’s capacity to own a two wheeler has improved.

Rapid Product Introduction and Shorter Product Life Cycle

The last five years have witnessed a sharp increase in new product launches in the
two-wheeler industry. It is estimated that close to 50 new products have been



launched by manufacturers during this period, filling up all price points and targeted
at various consumer segments.

Inadequate Public Transport Systems in most Urban Areas
The economic boom witnessed in the country and the increased migration to urban
areas have increased the traffic congestion in Indian cities and worsened the existing
infrastructure bottlenecks. Inadequate urban planning has meant that transport systems
have not kept pace with the economic boom and the growing urban population. This
has increased the dependence on personal modes of transport and the two wheelers
market has benefited from this infrastructure gap.

Challenges faced by the industry
Despite the high growth achieved in the past and the high potential in the future, the
two-wheelers market faces some challenges.

Rising Customer Expectations
The growth witnessed by the Indian two wheeler industry has attracted a number of
new entrants to the market and it is expected that the Indian industry will become
more competitive in the future. The plethora of products introduced in the past has
also raised customer expectations with respect to reliability, styling, performance and
economy.

Environmental and Safety Concerns
The increasing demand for two wheelers will need to be managed to address issues
relating to overcrowding of roads. Another problem is the insufficient infrastructure
for inspection to ensure adherence to emission norms. As the industry grows, it is
important to regulate the sale of used two wheelers in a more organised manner for
which a mechanism needs to be evolved. Unregulated sale of two wheelers, especially
in the rural areas, are likely to create issues related to emissions and safety of vehicles.



Creation of Distribution Infrastructure
Leading companies need to ensure that on one hand they build adequate infrastructure
in terms of dealerships and servicing stations in the urban areas and on the other
ensure that their distribution infrastructure also reaches the rural areas

COMPANY PROFILE
Hero Cycles and Honda Motor Company of Japan linked
their joint venture in India in April 1984, few could have
imagined that the two would go on to create history and
become the subject of a case study at business schools,
internationally.

But that's the Hero Honda saga. In a little over two decades, the world's largest
manufacturer of bicycles and the global leader in motorcycles have created not only
the world's single largest motorcycle company but also the most endearing and
successful joint venture for Honda Motor Company worldwide. The company has



sold over 15 million motorcycles and has consistently grown at double digits since its
inception and today, every second motorcycle sold in the country is a Hero Honda.

In two decades, Hero Honda has built two world-class manufacturing facilities at
Dharuhera and Gurgaon in Haryana that now churn out over 3 million bikes per
year. In this period, Hero Honda has set up over 2400 customer touch points,
comprising a mix of dealers, service centres and stockists across rural and urban
India. Today, Hero Honda is an amalgam of winning networks and relationships with
internal and external stakeholders, including Investors, Dealers, Vendors and
Employees. These relationships have helped the company hold on to the mantle of
World No.1 for years in succession.

Hero Honda has relied on 3 R's-- Reach, Research and Reliability as its basic
building blocks. Using feedback from the market, a fully-equipped R&D centre has
consistently created best practices in designing, testing and harmonization, besides
placing strong emphasis on road safety and ride quality. This emphasis has helped
Hero Honda build products that are ahead of their time.

In the 1980s, for example, Hero Honda became the first company in India to prove
that it was possible to drive a vehicle without polluting the roads. The company
introduced new generation motorcycles that set industry benchmarks for fuel thrift
and low emission. A legendary 'Fill it - Shut it - Forget it' CAMPAIGN captured
the imagination of commuters across India, and Hero Honda sold millions of bikes
purely on the commitment of increased mileage.

Hero Honda was also one of India's first automotive companies to get close to the
customer. As Brijmohan Lall Munjal, the Chairman, Hero Honda Motors succinctly
puts it, "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.''

Key Highlights



• Hero Honda enjoys a significant brand premium. Its aggressive pricing strategy to
take on the competition has helped it in volume growth.
• Variant launches in each of Splendor and Passion has helped in stemming the loss
in market share in the face of the competition. Hero Honda now plans to launch
two new models in the 100cc segment in FY05 on a new platform.
• The company has started logging good volume growth after the launch of Passion
Plus and Splendor Plus as well as the CD-Dawn, which has also rejuvenated its
product range. Volumes should improve further, due to the base effect and
improved rural sentiment on the back of higher farm incomes.
• Aggressive cost controls and significant economies of scale are expected to aid
Hero Honda in retaining margins.
• Hero Honda will continue to be an attractive dividend yield play as the company
continues to generate significant free cash flows as its capital requirements are
limited

Marketing MIX

PRODUCT

Product Range and New Models

The Company's product range includes "Splendour" which is the largest selling
motorcycle brand in the world with over 6.9 lakhs vehicles sold in 2000-01. A
cumulative over 5 million customers are the real foundation of the company's
strength.

The identity of Hero Motors in the market has been established through two of its
leading international products - Hero Puch and Hero Winner. When Hero Motors
entered into a technical collaboration with Styr Daimler Puch of Austria, Hero Puch
was born which marked a new chapter in the two-wheeler scenario of the country.
Hero Puch, the mini-motorcycle designed by Ferdinand Porsche combined the power
(4.15 bhp) and ease of a motorcycle and at 91 km/hr, the economy of a moped.


CASE STUDY OF HERO HONDA HUNK

Hero Honda new Bike hunk launched with a new features after the study of
market research by company A sure-shot head-turner, the Hunk comes with
never before features and looks:-

Product highlights:

• 150cc Engine, delivering raw power of 14.2 BHP @ 8500 RPM and a torque
of 12.80 N-m @ even at a low RPM of 6500
• Unmatched super acceleration of 0-60 Km ph in flat 5 seconds
• New Generation "Advanced Tumble Flow Induction" (ATFI) Technology
engine - which delivers the best balance of Fuel efficiency and Power
• Advanced Microprocessor Ignition System -"AMI" with Multi Mapping
Digital CDI along with "Carburettor controlled Variable Ignition" delivers
the optimum Power, quicker throttle response and Fuel efficiency
• Unique "Anti-Kick back" device prevents Kick back during starting -
convenient, safe and effortless kick start.

PRICE

Faced with an uncomfortable scenario of Bajaj Auto closing in on Hero Honda
Motors in monthly unit sales, managing director Pawan Kant Munjal said the
company has put in place a strategy to retain its leadership in the Rs 33,000 crore two-
wheeler markets. That includes developing new high-performance engines in 100cc,
expanding capacity to beyond 5 million units and reducing the price of 100cc bikes, if
needed.

“As confident as they are of upstaging us, we are confident of retaining our leadership
and growing our lead,” Munjal told FE in an exclusive interview.



Reiterating that unlike Bajaj, which is exiting the 100cc segment, Munjal said Hero
Honda intends to strengthen its offerings in the segment. He said the company is
developing new engines that will deliver superior performance in the 100cc bikes in
future.

To counter Bajaj’s move to offer 125cc bikes at the price of 100cc bikes, Munjal said
Hero Honda could reduce prices of its 100cc bikes to nullify Bajaj’s strategy.

Bajaj Auto plans to exit the entry-level motorcycle market by August-September next
year and offer higher capacity bikes in the 100cc price range of Rs 34,000 to Rs
42,000. “We have dominated the 100cc segment for many years and will continue to
dominate. Possibly it may be the reason for Bajaj Auto leaving the segment,” Munjal
told FE.

The gap between Hero Honda and Bajaj Auto has narrowed from 92,206 in
September, 2005 to 37,833 in September, 2006

PLACE

DEALER NETWORK

At Hero essentially they have a completely customer-driven approach. A nation-wide
dealer network comprising of over 3,500 bicycle dealers, 350 dealers for mopeds and
225 franchise holders for motorcycles, ensures convenient access to the Group's
products across the country.

Strong dealer company relationship with a deep sense of belonging to the Hero
fraternity, the Group's dealer network has catalyzed growth and acted as a strong
bridge between the customers and the Group.

Sales agents from Hero travels to all the corners of the country, visiting dealers and
send back daily postcards with information on the stock position that day, turnover,
fresh purchases, anticipated demand and also competitor action in the region.



There are more than 1000 committed dealers & service outlets spread across the
country. The authorized workshop have well laid out standards for motorcycle
servicing supported by fully equipped infrastructure in terms of quality precision
instruments, pneumatic tools & a team of highly trained service technicians. Having
your motorcycle serviced at an authorized workshop ensures highest standards of
service quality and reliability

PROMOTION

HHML is an organization, which is known for its innovative & Aggressive
Marketing. Rs.120 crores was the Annual budget for market for the financial year
2002-2003. All the mediums are used extensively, be it print or mass media like T.V
& hoardings.

HHML also promotes sports in the country. It is also the sponsor of the ICC world
Cup 2003 and half of the Indian team represents Hero Honda. Those players are
Virender Sehwag, Mohammad Kaif, Yuvraj Singh, Harbhajan Singh, Zaheer Khan
and Sourav Ganguly as Brand Ambassadors. Superstar Hrithik Roshan is also a
Brand Ambassador for Hero Honda Company. They will endorse the company
products, attend corporate and brand events and help promote its "We Care"
campaign comprising safety riding, environment and friendliness Also, advertising is
done at a local level by dealers, in which HHML also contributes to help dealer
promote the dealership in the local area.

HHML has print ads that the customer gets to see almost every day in newspapers,
magazines, etc. This has increased the brand recall by a significant number. They also
have their bikes featured in various TV programs like top drive on star news and
others which act as a strong reference.



ADVERTISING STRATEGY

Hero Honda is currently the number one company in terms of sales and has been
dominant in the two-wheeler segment since the past decade. Since the inception of
hero Honda, the company has been using television as a major role for its publicity.
Though hero Honda was dominant in sales it lacked the skills of creating a spectacular
ad till now. Though it had a vast range of mobikes, its advertising strategy was not up
to the mark. For its publicity hero Honda has been using many famous celebrities like
Saurav Ganguly, the captain of Indian cricket team, Hritik Roshan and other famous
personalities as their brand ambassadors. Thus, hero Honda has been spending huge
amounts on its publicity.


Print adds

Glamour



Some of the Events Sponsored During the Years

2000

 NKP Salve Challenger Trophy.
 Stardust Hero Honda Millennium Honours Award.
 Masters Golf Championship.
 20th Cinema Express Award.
2002

 India-England Women's Cricket Series.
 Masters Golf Championship.
 Second Indian Television Academy Award.
 21st Cinema Express Award.
 First Indian Television Academy Award 2003
 8th Cricket World Cup in South Africa.

HERO HONDA ROADIES

To attract young generation Hero Honda sponsored MTV Roadies. It is the one of the
most popular Show among
youngster. A Live reality show in
which some group of people travel
across the country on the bike.
They ride HERO HONDA
KARIZMA. This show become the
key factor in promoting the bike
karizma between the youngster

HERO HONDA CAMPUS ROCK IDIOLS


In today scenario in India rock culture is becoming very popular among
youngster. To capture this young generation, Hero Honda is organizing
Campus Rock Idols every year at all over major cities in India.

HERO HONDA SA RA GA MA PA CHALLANGE

Brand Ambassadors



CRICKETERS

Hero Honda promotes his cricketers brand ambassadors as a ‘Team Ambition’ in
2003 World Cup. The 'Team Ambition' has many similarities in personality with the
Hero Honda brand, such as 'splendor of performance', 'passion to excel' and 'ambition
to win', signifying their respective desires to lead the way



Hero Honda, through the advertisements, hopes to communicate the brand identity
to its customers in a language and appeal that is well identified and comprehended
by them.

FILM STAR

Hero Honda signed bollywood star Hrithik Roshan for his
premium bike Karizma. The customised all-chrome
Karizma, a very stylish bike that truly befits his brand
ambassador and style icon Hrithik Roshan

BOLLYWOOD STAR
HRITHIK ROSHAN

HERO HONDA SIGNED MAHESH BABU A SUPERSTAR IN
ANDHRA PRADESH TO CAPTURE MARKET IN AP



Hero Honda -India‘s number one two wheeler in sales. Now this big company is
roping Mahesh Babu as their Brand ambassador for AP. The company is very much
confident that young Mahesh Babu brings them up in their sale figure and at the same
time Mahesh Babu‘s fan following will be utilized for brand image of Hero Honda.

HERO HONDA KARIZMA

Hero Honda Karizma was the first real sports bike in India. The bike addresses to
those who have a passion for speed and styling and head-turning looks. It has 17 ps
power thrust and picks up 0-60 in 3.8 heart-stopping seconds. The bike is based on
power and styling. Disc brakes and Mag wheels makes Karizma the safest jet on the
road.

Company Stroke Maximum Power Displacement Hero Honda Motors India Ltd. 4-
Stroke 16.8 bhp @ 7000 rpm 232 cc

Striking Features:

1. Style

2. Sporty position of the seat.



3. It stands on its feet even at speeds reaching up to 130 kmph.

S.W.O.T. ANALYSIS OF KARIZMA

STRENGTH

• It has a good speed and sporty look
.
• Karizma is the First bike in India launched under Sports Bike Segment.

• Loyal Customer Base: In the past four years, Karizma has been successful in
building up a good and loyal base among its customers.

• After Sales Service: Till today, customers are satisfied with the after sales service
provided by Hero Honda for this particular product.

• Refinement, comfort, great handling and that much-sought-after big bike feel are all
available on the Karizma.

• Brand Recall: the name Karizma itself is a metaphor to its success. The brand
Karizma has given a good platform to this product in the Sports Bike Segment.

WEAKNESS



• High Maintenance: The maintenance of Karizma is high as compared to its biggest
competitor Bajaj Pulsar 200cc and 220cc.

• Fuel Efficiency: The pulsar 200cc offers an impressive mileage of 38.3kpl in city
and 42.4kpl in highway against the Karizma offers only 30kpl in city and a decent
figure of 45kpl in highway.

• Less Promotion: the promotions and ads of Karizma are very less as compared to its
competitors.

OPPORTUNITIES

• If Hero Honda comes up with the idea of changing some features of Karizma, like
self cancelling indicators, soft touch handle bar and digital speedometer, it will help
them to boost up the sales of Karizma.

• If they are able to improvise the fuel efficiency of Karizma, it will be a golden
opportunity to take over the market.

THREATS

• The major threat faced by Hero Honda Karizma is from Bajaj Pulsar, who has
always been the market leader in the 150 plus segment with 60% market share.

• Karizma’s strong competitors Bajaj and TVS, in 150 cc plus segment, already
posses certain features like self-controlling indicators, soft touch handle bar which
Karizma lacks.

• The competitor Pulsar 200cc has already come up with oil cooled engine which
delivers maximum power. This is again a major threat to Karizma.



S.W.O.T. ANALYSIS OF COMPETITOR

(BAJAJ PULSAR 220cc)

STRENGTHS

• Pulsar 220cc features India’s First Oil Cooled Engine which delivers maximum
power making it most powerful engine offered by Bajaj.

• New Pulsar also provides Digital Speedometer, Self Cancelling Indicators which is
for the First time in this segment in India.

• Fuel efficiency: Pulsar 220cc delivers an impressive mileage of 38.2 kmpl in city as
compared to Karizma which delivers 30 kmpl in city.

• Customer Base: In past decade Bajaj has established a strong base amongst its
customers.



WEAKNESS
• Style and Design: PULSAR 200cc and 220cc derives their styling from there
previous version Pulsar 150 Dts-i and 180 Dts-i.
• Pricing; Bajaj 220cc (Rs 82449 basic price) is costlier than karizma (Rs 78000 basic
price)

OPPORTUNITIES

• Taking into consideration the reviews of the customers regarding the “fairing” of
220cc and making the needful changes will be an opportunity to capture an even
larger share of the 200cc+ segment.

THREATS
• The biggest threat is faced from the goodwill of Karizma in this segment who is the
“Four-Stroke Two Wheeler Ruler” of the Indian bike market.

• Certain technical faults in the bike design which are potentially dangerous to the
rider’s safety can be disastrous to the image of the bike.

Brand Image create By Bajaj

Brand image create by Bajaj through his pro bike showroom which display his
premium bikes range such as pulsar 220, Avenger, Pulsar 180 etc.

BAJAJ’s Pro Bike Showroom

The Bajaj Prebaking showrooms will definitely be
one of the integral elements in his overall brand
strategy to reinforce the image of Bajaj being a
manufacturer of quality performance motorcycles in



the country. It's the retail experience a dedicated biker feels when he or she steps into
a Probiking outlet. It's a new space they have created and there's a lot of work to be
completed.

BAJAJ PULSAR ‘DEFINATELY MALE’

Bajaj pulsar make an image of that there bike is only for guys. Through his Definitely
Male Campaign they shows behave of a young guys. This Advertisement helped lot
Bajaj to create brand positioning.

Chatting merrily, three girls One's dupatta skims over the
bikes and then gets stuck...
Walk by a line of motorbikes.

...making her turn in ... The logo, "Pulsar". MVO: Bajaj
Pulsar, definitely male
Consternation. She pulls it away

Slowly to reveal...



MARKET MIX OF KARIZMA

PRODUCT

DESIGN, ENGINEERING AND INTERIORS

Hero Honda has taken a lot of styling cues for this bike from Honda’s old model VFR
800, the Japanese giant’s legendary and largest selling superbike. Similarities are
visible in the alloy die-cast wheels, the tailpiece, the front indicators, the fairing, the
silencer unit, seat, panel shapes and instrument binnacle. Even the way Hero Honda
has painted parts of the side panels silver to look like exposed aluminium frame
sections, reminds one of the genuine thing on the VFR. One cannot help but think that
the steering column section of the bike looks crude and empty just below the
handlebar mounts. Fit and finish is excellent and no less than the high standards we
have come to respect Hero Honda for. The company has kept with the times, and
grafted an aircraft-type fuel filler cap onto the tank. The tank recesses easily
accommodated the legs of our tallest testers. The amber backlighting for instruments
is exciting. Being connected directly to the battery, all lights and instruments work
independently of the rpm of the engine, and are a boon at night.



BRANDING:

BRAND NAME: KARIZMA
In Hindi, “KARISHMA” means “something inexplicably magical”. In English,
“CHARISMA” (pronounced Karizma) means “the ability to inspire followers with
devotion and enthusiasm”. The way this bike has turned out to be, it is probably both.
The monogram of Karizma itself is very attractive and eye catchy because of the
colour.

In order to overcome the competition faced from its biggest competitor bajaj220 dts-I,
the company has tried to attract the customers by changing the graphics of Karizma
i.e. an attractive new logo, which represents the bike’s cutting edge imagery of being
racy.

International styling graphics with a pronounced `R’ on the tank and an asymmetrical
one on the visor in keeping with the latest international trend.

PRICING

the new Karizma will also continue to be priced at almost the same level as the
previous version, with on-road prices for the regular variant working out to Rs
79,000-80,000. The special edition variant with red mag-wheels will be costlier by
about Rs 1,000. Bajaj has launched 52 Prebaking outlets – which will house only high
performance bikes. Pulsar 200cc would be available at such Probiking showrooms at
select locations across the country for an attractive price of Rs.65, 497 (ex showroom,
New Delhi).



PROMOTION

ADVERTISEMENT:

Hero Honda Karizma
Agency:
A fighter plane is on a regular sortie when the pilot notices a moving object. Zooming
his camera, he captures a bike cruising at high speed. Informing the control tower, the
pilot dives in for a closer look.

The bike gathers speed and enters a tunnel to beat the fighter aircraft. Reaching the
air-base, the rider meshes with the staff as they examine the images... ... of the
motorcycle, unaware that its owner is amidst them. MVO: "Hero Honda Karizma. Jet
Set Go."


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Market Research Report on Marketing Mix of Automotive Sector

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