Marketing Strategy of Two Wheeler Segment in Automobile Industry – a Study on Bajaj & Hero Honda

Name: Chaittick Sahdev (2008 -2010)
Title: Marketing Strategy of Two Wheeler Segment in
         Automobile Industry – a Study on Bajaj & Hero Honda

Summary
In India, a two-wheeler is used as a personal/family vehicle or a goods carrier, whereas it is confined to sports/racing (heavy motorcycles) or short distance shopping (mopeds). So this report records the findings and analysis of a survey conducted in order to assess the marketing strategies of two wheeler segment in automobile industry of bajaj and hero Honda. The survey has been conducted in a systematic manner right from investigating the objective and breaking it down to the various components of the research to arriving at final conclusions on possible parameters to study the customer satisfaction level toward dealer services. An attempt has been made to understand the satisfaction level of the customers toward dealer services depending on the profile, i.e. customer income, demographics such as age, gender, occupation, etc. The questionnaire was designed on the basis of an exploratory research. The actual data collection was through personal surveys of a convenient sample of units. Based on analysis and what was found, I have tried to develop that the players will have to compete on various fronts viz pricing, technology, product design, productivity, after sale service, marketing and distribution. In the short term, market shares of individual manufacturers are going to be sensitive to capacity, product acceptance, pricing and competitive pressures from other manufacturers.
According to the survey, All the three segments, motorcycles, scooters and mopeds have witnessed capacity additions in the last one-year and it will continue in the upcoming period. Over this period, only the motorcycle segment is expected witness higher demand vis-à-vis supply, while the scooters and mopeds supply will outstrip demand. As incomes grow and people feel the need to own a private means of transport, sales of two-wheelers will rise. Penetration is expected to increase to approximately to more than 25% by 2009. While buying a motorcycle economy is the main consideration in form of maintenance cost, fuel efficiency. Hero Honda is considered to be most fuel-efficient bike on India road.

Objectives:
The project title “Marketing Strategies of Two Wheeler Segment in Automobile Industry: A Study on Bajaj and Hero Honda” tells about the objective of the study in a nutshell.

• To identify and analyze the marketing strategies of automobile industry in two wheeler segment of:
  
  
  
  
  • Bajaj Auto
  • Hero Honda 
• To assess a comparative analysis of the above 2 companies
• To study the customer satisfaction level toward dealer services.
• To study the preference / perception of the customers toward the two-wheeler brand satisfaction

Conclusion:
The two-wheelers market has had a perceptible shift from a buyers market to a sellers market with a variety of choices. Players will have to compete on various fronts viz pricing, technology, product design, productivity, after sale service, marketing and distribution. In the short term, market shares of individual manufacturers are going to be sensitive to capacity, product acceptance, pricing and competitive pressures from other manufacturers.

• All the three segments, motorcycles, scooters and mopeds have witnessed capacity additions in the last one-year and it will continue in the upcoming period. Over this period, only the motorcycle segment is expected witness higher demand vis-à-vis supply, while the scooters and mopeds supply will outstrip demand. 
• As incomes grow and people feel the need to own a private means of transport, sales of two-wheelers will rise. Penetration is expected to increase to approximately to more than 25% by 2009. 
• While buying a motorcycle economy is the main consideration in form of maintenance cost, fuel efficiency
• Hero Honda is considered to be most fuel-efficent bike on India road.

Recommendations:
Bajaj Auto

• Broader production base: The Company should be poised to drop its costs and increase its competitive strength in the market place so that it may be able to broader its production bases.
• Low per capita use: The per capita consumption Bajaj auto products in general and Bajaj Caliber in particulars in India is not so high as in China and Japan. This notwithstanding the fat that the Company has been able to achieve a mixed bag of success and failures recently. The fact remains that this disparity is expected over the coming years especially with prices expected to drop in the coming year
• It should increase its number of authorized dealers and service centers in India.
• Global thrust: It can thrust to emerge as a global player of respect for which it is necessary to export in bigger quantities than it has done in the past. This will require big capacities.
• The media Revolution, Exposure to foreign brands and raising incomes will promote greater consumer awareness. The market for consumer goods will continue to grow and rural demand is expected to be particularly strong as a result of several years of comparative agricultural prosperity. Therefore the company should increase its production capacity and capitalize on its resource-mobilizing capabilities to this end only.

Hero Honda

• The company should supply products of highest quality at restorable prices for customers satisfaction and for the benefit of the society in general.
• The company should ensure timely supply.
• The company should have a better work culture among all employees and it should generate and sustain the concretion among all employees and it should generate and sustain the concretion among all employees through systems education and training.
• The company has to increase its capacity. This shall cater to the demand for the future. The company shall be spending Rs.100 Cr this year towards this end. For expansion a feasibility study should be conducted on the setting up of a new plant.
• They should also give a thought to venture into other segments of two wheelers.

Limitations:

• The sample was collected using convenient sampling technique. So result may not give an exact representation of the population.
• Shortage of time is also reason for incomprehensiveness.
• The views of the people are biased therefore it does not reflect true pictures.
• The data is secondary and has been collected from various websites. So its authenticity is questionable. 
  

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The above article is a summary extract from the dissertation projects of the MBA and BBA students of Skyline College. Skyline, situated in Delhi and Gurgaon (NCR) is a premier institute providing management education specialising in MBA and BBA degrees and specialist courses for travel and tourism as well as mass communication.