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RESEARCH PROJECT REPORT

ON

HERO MOTO CORP

Submitted in the partial fulfillment of the requirement for

the Bachelor of Business Administration

Session: 2010-2013

(SCHOOL OF MANAGEMENT SCIENCES, VARANASI)

SUBMITED TO SUBMITED BY

Anupam Sir Sumit Singh

Reader, SMS B.B.A. 6th Sem.Roll No. B/14/099

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PREFACE

If we want to go global in the world market then we must know the trend of the

market, what features must be there in the product so that it should get popularity

among the masses and also should know about competitors position in every field.

The objective of survey is to know the strategy of Hero Moto Corp in the world

market and we must know what should be the price range and what types of

marketing should be done so that it gets familiar with every type of person. So needs

and objectives of the market survey is very important to get a good market share ,

stand in the market and to survive the business in the present competitive world where

there is a trend of cutthroat competition.

Hero Moto Corp is a leading company in bikes sector. Knowing the comparativeposition of a brand vis--vis its competitors is an essential thing as well as product is

essential for deciding appropriate marketing strategies for any company.

It was then the project was undertaken in order to

1. What is the prospective customers market for Hero Moto Corp in the world

2. Know the choice of residents of other foreign countries

3. Know the brand image of Hero Moto Corp

4. Perceive the future sales of Hero Moto Corp products

5. Pricing in the view of prospective customers

6. Mode of purchasing the product

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EXECUTIVE SUMMARY

Hero Moto Corp the Principal activities of the Company is manufacturing and

marketing of motorcycles and spare parts. The Company is a joint venture between

Hero Group, India. The Motorcycles of the Company features facilities such as four

stroke technology, phenomenal fuel economy and low exhaust pollution levels. The

major brands of the Company include Splendor, Joy and Passion. The two

manufacturing facilities of the Company are located in Haryana. Motorcycles

accounted for 95% of fiscal 2009 gross revenues and spare parts, 5%. Grows over

500% in five years For 2010-11, volume up by 38 per cent ; net profit soars by 88 per

cent; total turnover up by 42 per cent Achieves a high 48 per cent motorcycle market

share; and 33 per cent two-wheeler market share Announces 350 per cent finaldividend and 250 per cent celebration dividend (over and above special interim

dividend of 250%) Over the last five years, company's total turnover grows by a

whopping 580 %; PAT by 919 % New Delhi, April13, 2011: Hero Moto Corp Co..,

the newly crowned World No. 1 two wheeler companies, declared outstanding

financial results for the year 2010-11. Profit after tax (PAT) is Rs. 462.93 crore, a

growth of 88 per cent. The company's total turnover (sales plus other income, net of

excise) grew to Rs. 4539.49 crore, a growth of 42 per cent. In a landmark run, the

company achieved a 48 per cent market share in the motorcycle category during the

year; and 33 per cent of the total two -wheeler market. The company recorded a

cumulative sale of over 14.25 lacs motorcycles for the year 2010-11.

The company's Spare Parts business also showed a remarkable increase of 39 per

cent, taking the annual sales to Rs. 209 crore. Encouraged by the response the

company has set a target of Rs. 250 crore for the current financial year.

Hero Moto Corp's growth over the last five years has been truly outstanding, with

both revenue and PAT showing significant jumps of over 5 times. While the revenue

increased from Rs. 783 crore in 2008-09 to Rs. 4539 crore in 2010-11. PAT has

increased from Rs. 50 crore in 2008-09 to Rs. 463 crore in 2010-11. The total sales

has also increased from 2,68,931 motorcycles in 2010-11 to 14,25,302 motorcycles in

2010-11, with volume market share jumping from 27 per cent to 48 per cent in

motorcycles; and 9% to 33% in two-wheelers.Mr. Brijmohan Lall, Chairman and

Managing Director, Hero Moto Corp., commending the company's achievement said,

"I thank all our stakeholders - our Hero Moto Corp family of employees, ancillaries,

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-vendors, dealers, other business associates, and most importantly, our customers.

They have been instrumental in our achieving the World No.1 status. I would also like

to make special mention of the excellent support provided all through by our joint

venture partners Hero Moto Corp Company, and Hero Cycles Ltd. Our relationship

with them has been wonderful and mutually satisfying. As we move forward, our

collaborative approach will help us continue our lead." On the momentous occasion,

Mr. Pawan Munjal, Director and CEO, Hero Moto Corp. Said, "The key reason for

our success has been our continuous pursuit of pro-actively delivering value and

delight to our customers. This is evident from the pioneering initiatives we undertook

during 2011 - like the full two-year warranty on all Hero Moto Corp models, and the

launch of the most comprehensive Customer Relationship Programme, 'The Hero

Moto Corp Passport Programme'. Further, despite strong competition and pressures

on the economy as a whole, the company has improved operating profits significantly,

mainly because of cost rationalization, strong working capital management and

manufacturing efficiencies."He added, "We are committed to continue our lead, by

delivering even better value to the customers, in the year ahead. Accordingly, several

new and exciting product launches are lined up for 2008-09, and in the future. The

manufacturing facilities to support the customer demand would also be pro-actively

set up, as has been done till now." Especially present on the occasion was Mr. K

Suzuki, Senior Managing Director, Hero Moto Corp Company, Japan, who had flown

in only that morning to attend the Press Conference and the World No. 1 celebrations.

Clearly ecstatic he said, I congratulate Hero Moto Corp for their wonderful and

consistent achievements. Last year they achieved the distinction of being No. 1 Joint

Venture of Hero Moto Corp Company worldwide; and this year achieved the unique

status of World No. 1 two wheeler companies. Our relationship has always been

strong and solid. We are proud of this achievement for the Hero Group, Hero Moto

Corp Company, and the Indo-Japanese co-operation. We would continue to provide

all the necessary support to Hero Moto Corp, for it to remain on the top".

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TABLE OF CONTENTS

Sl.No. Topic Pages. No

1. TITLE PAGE i

2. ACKNOWLEDGMENTS ii

3. PREFACE iii

4. EXECUTIVE SUMMARY v

5. TABLE OF CONTENTS vi

6. INTRODUCTION 1-11

7. COMPANY PROFILE 12-21

8. LITERATURE REVIEW 22-56

9. RESULTS AND DISCUSSIONS 57-66

10. CONCLUSIONS & RECOMMENDATIONS 67-70

11. FUTURE PROSPECTS 71

12. REFERENCE & BIBLIOGRAPHY 75

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INTRODUCTION

The Indian Two Wheeler Industry

The Indian two wheeler sector contributes the largest volumes amongst all the

segments in automobile Industry. Though the segment can be broadly categorized in

to 3-sub segments viz; scooters, motorcycles and mopeds; some categories introduced

in the market are a combination of two or more segments e.g. scooter and stepthrus.

The market primarily comprises five players in the two wheeler segment with most of

the companies having foreign collaborations with well known Japanese firms earlier.

But with most of the companies now planning 100% subsidiaries in India.

In the last four to five years, the two-wheeler market has witnessed a market shift

towards motor cycles at the expense of scooters. In the rural areas, consumers havecome to prefer sturdier bikes to with stand the bad road conditions. In the process of

the share of motor cycle segment has grown from 48% to 58%, the share of scooters

declined drastically from 33% to 25%, while that of mopeds declined by 2% from

19% to 17% during the year 2009-10. All new vehicles are a now being replaced by 4

stock motorcycles. Reduced excise duties and fierce competition has led to a fall in

prices of certain models.

Hero, a name synonymous with two wheelers in India, began its journey around four

decades ago. Starting as a manufacturer of by cycle components, hero has today

grown into a multiunit, multi-product, geographically diversified group of companies.

The hero group began with simple Philosophy: to provide excellent transportation to

the common man, at a price he could easily afford. Even today the dream providing

the total satisfaction is all its sphere of activity. To consumers, in excellent products at

an affordable price; a thorough understanding the fast changing consumer

understanding the fast changing consumer behaviour, new market segment and

opportunities, and marketing mix sensitive changing customer needs from the core of

Heros marketing strategy and philosophy.

Hero Moto Corp. is one of the leading companies in the two wheeler Industry. At

present, it is segment with around 47% the market share during financial yr. 2000-01.

The company ahs emerged one of the most of successful players, much ahead of it

competitors by it superior and reliable product quality complemented with excellent

marketing techniques.

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Hero Moto Corp has been an early entrant in the 4-stroke segment of the two wheeler

industry. With a right mix of product styling and pricing the company has graped the

4-stoke market as compared to Bajaj Auto and TVS.

TVS Motors Ltd has been the largest manufacturer of mopeds which are prevalent as

a low cost transportations and provide a tremendous potential is all parts of India.

However the company is likely to face threat Bajaj Auto Ltd (BAL) which continued

its price based competitions and Hero Moto Corp cycle and Scooter Ltd. a new

entrants in the 2 wheeler market.

Infact the company has achieved excelled the Industry growth rates by a huge margin.

From April to December 2008 while the motor cycle industry sales were upto

38.68% TVS motors sales surged by a whooping 73.6% sat more importantly it is the

success of its model Victor.

Baja Auto has continued with its impressive performance witnessing significant

growth is the motor cycle and three wheeler segments. Based on the performance fill

data one can expect the company to meet it excellence by FY09.

Hero Moto Corp is the largest player is the motorcycle segment. Focused on

contemporary design and style, the company has a compare leusine ranges bikes viz;

CD-100 DX

CD-100 SS

Splendor

Street Smart

Steek

CBZ

Passion

It splendor model is an urban centric with its fuel efficiency which accounts to over

60-70% of its sales. The passion launched in mid Jan. 2001 has a resending success

contributing to 26% of its sales.

TVS offers a wide ranges of two-wheelers motorcycles- Victor/Fiero/Max100/

max100R/Max DL.

Scooterette- TVS scooty

Moped- chap/XL/XL super/XL supper HD/sports.

TVS plans to launch 4 new models in the coming 15 months. A 4-stroke version of

Indias best selling scooterttes; TVS-scooty and 4-stroke version of the existing

moped line will be launched this year.

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Bajaj Auto Ltd: Offer product a service to the customers so as to satisfy their needs.

Its having 4-stroke single cylinder natural air cool the displacement of engine is

111.6 CC having the engine power it 7-7 bhp at 7000 spm. The bike is having a

hydrometric disc brake in front wheel. Flash is an added future in the bike.

In 1993 BAL manufactured 12 different model 5-5 scooter model, 3-motorcycle

model, moped model, 3-three wheeler model.

But in the recent year Bajaj developed various model in the motorcycle segment

which providing good riding conditions is urban road as well as rater roads. Scooter-

cub/super/super FE/chetak/stride/Msl Priya.

Moped- Bajaj Sunny.

Motorcycle- M-80/kawasaki RTZ/Kawasaki45 by 1993 and latest model are.

Eliminator/Pulsor 180/Pulsor 150/Boxer/Caliber Crowa/Caliber

Sales performance of the player:

Hero Moto Corp repeated a y-o-y growth of 6.3% is its motorcycle sales for the

month of Jan 2006 at 1,45,708 units. Export during the month have surged almost

64% y-o-y. On a month on-month basis the sales growth has been even higher up

16.5%.

MOTORCYCLE APRIL TO DEC 2010 APRIL TO DEC 2009 % CHANGE

INDUSTRY SALE 2897842 2089637 38.68INDUSTRY SALE 1281342 1026102 24.85

MARKET SHARE 44.21 49.11

Bajaj Auto: Bajaj auto has reported y-o-y growth of 19.8% in motorcycle sales for Jan

2006 at 75059 units. On a month-on-month basis the growth is 8.8%. Export

performance continues to be impressive with 10,089 two and three wheelers exported

in Jan 2006, a growth of 98.6% y-o-y.

Two wheeler sales for the current year are up 6.8%. The growth is driven sharply in

the motor cycle sales upto 37% in two wheeler segment, the share of motor cycle has

jumped from 52.8% to 67.8% during the current year. this sharp growth in the motor

cycle can be attributed to the positive response received by its need products and the

encouraging performance of select existing model.

SALES (UNITS) JAN 10 JAN 09 % CHANGE APR-JAN 10 APR-JAN 09 % CHANGE

SCOOTERS (GEARED) 20211 30233 -33.15 235829 348700 -32.37

SCOOTER- UNGEARED 4349 4333 0.37 56072 57686 2.80

STEPTHRUS 4563 5810 -21.46 47636 59576 -20.04

MOTORCYCLE 75059 62640 19.83 717397 523508 37.04

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TOTAL 2-WHEELER 104182 103016 1.13 1056934 989470 6.82

THREE WHEELERS 17426 14405 20.97 163359 132864 22.95

TOTAL 121608 117421 3.57 1220293 1122334 8.73

India is the second largest manufacturer and producer 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. This distinction was achieved due to variety of

reasons like restrictive policy followed by the Government of India towards the

passenger car industry, rising demand for personal transport, inefficiency in the public

transportation system etc.

The Indian two-wheeler industry made a small beginning in the early 50s when

Automobile Products of India (API) started manufacturing scooters in the country.

Until 1958, API and Enfield were the sole producers.

In 1948, Bajaj Auto began trading in imported Vespa Scooters and three-wheelers.

Finally, in 1960, it set up a shop to manufacture them in technical collaboration with

Piaggio of Italy. The agreement expired in 1971.

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.

Under the regulated regime, foreign companies were not allowed to operate in India.

It was a complete seller market with the waiting period for getting a scooter from

Bajaj Auto being as high as 12 years.

The Motorcycles segment was no different, with only three manufacturers viz Enfield,

ideal Jawa and Escorts. While Enfield bullet was a four stroke bike, Jawa and the

Rajdoot were two-stroke bikes. 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 Moto Corp 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 Moto Corp brought in the first two-stroke and four stroke engine motorcycles

respectively. These two players initially started with assembly of CKD kits, and lateron progressed to indigenous manufacturing. In the 90s the major growth for

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Company stable. This achievement is expected to spiral the overall growth of TVS

Motorcycles sales in the coming months.

The impressive sales figures reflect the customer's faith in the technological capability

of TVS Motor Company to fully live up to its promise of delivering a world-class

product at an affordable price. Due to excellent customer feedback across the country,

TVS dealers are being pressurised with enquiries on the new 100 CC 4 Stroke Centra

and its revolutionary VT-i engine technology. Having caught the public's imagination,

TVS Centra has fully lived up to its promise of a 'Fill it Once a Month Bike' where a

full tank of petrol lasts for a month based on the average use of motorcycle customers.

A panel of leading auto experts in India, after having tested TVS Centra, have

endorsed the fact that it was the 'best in its class' and also commended TVS Motor

Company on its technology prowess and innovation.

TVS Centra is powered by VT-i engines which are designed to deliver superb

performance on fuel efficiency and torque delivery based on three fundamental

actions namely variable ignition timing and superior combustion of fuel, friction

reduction and fuel wastage reduction.

Added to its technological edge are features that include attractive price, fuel

efficiency, low maintenance, contemporary style, ride comfort and backed by TVS

Motor Company's reliability, making it truly the preferred two-wheeler in its class.

Chennai, January 5, 2004: India's leading two wheeler major, TVS Motor Company's

commitment to produce the best technology in its products for its customers has led to

the launch of TVS Centra with Variable Timing intelligent engines

(VT-i), a 100 CC 4 Stroke motorcycle targeted at the Popular Segment.

This revolutionary new VT-i engine technology, developed indigenously by TVS

Motor Company, inbuilt into TVS Centra will make it the most fuel-efficient

motorcycle in the Country. It will be rightfully called as the 'Fill it Once a Month

Bike' where a full tank of petrol will last for a month based on the average use of

motorcycle customers.

The VT-i Engines by TVS Motor Company will go down in the history of the

Automobile Industry in India as one of the most innovative technology

developed indigenously. The VT-i engines are designed to deliver superb

performance on fuel efficiency and torque delivery based on three fundamental

actions namely variable ignition timing and superior combustion of fuel, friction

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reduction and fuel wastage reduction. This action facilitates deceleration fuel cut off,

faster warm up of the Engine and has four curve ignition mapping

Like all TVS Motor Company products, TVS Centra too has been engineered and

designed keeping in mind extensive customer feedback and changing customer needs.

TVS Centra will be the first motorcycle in India that will bundle price, mileage,

maintenance, style, reliability, power, ruggedness and ride comfort making it truly a

value for money personal transportation two-wheeler. Those who want all these

performance attributes in a commuter motorcycle at a great price; nothing will beat

the TVS Centra for all the advantages it offers.

TVS Centra is built around to give a mileage that will offer atleast 10 per cent more

than any other motorcycle in the country, today. It will be powered by 7.5 Brake

HorsePower (Bhp) at 7250 RPM making it the most powerful motorcycle in its class.

TVS Centra will also be known for its nimble handling and riding comfort enabling

easy maneuvering even in busy city traffic. Its contemporary style with big muscular

tank and well-rounded looks with a horizontal engine and superior ergonomics will

mark a new standard in the popular segment of two wheelers. It will come with

Econometer to keep a check on the mileage / power ratio, wide and skid free seat and

Utility space.

Victor the Saviour

TVS launched Victor 110 cc model in September 2001, with leading cricketer Sachin

Tendulkar as the brand ambassador the model has proved to be a big success. The

success of TVS Victor is especially significant because it was developed with

indigenous technology.

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Two stroke Max Range On the way out

The company is currently looking forward to phase out its two stroke Max range,

which is perceived to be less fuel efficient with a new four stroke range. The change

over is expected to take place by the end of June 2010.

Two new launches could out TVS on a high growth trajectory

TVS Centra

TVS Centra a new 100 cc model has recently been launched and the company has set

ambitions targets of achieving monthly sales in the range of 15000-20000 bikes per

month.

Also, a new upgraded 125 cc TVS Victor has been launched which will improve the

trajectory of the company.

Three Wheeler Project- Entering A New Market

TVS Motor has set the stage for entry into the three-wheeler markets with the setting

up of a new plant at Nanjangud, near Mysore in Karnataka. We understand that the

company would be targeting the sub-one ton passenger and goods carriers segment of

the market.

With an investment of about Rs 50 crore in phase-1, it will cater to both passenger

and cargo segments. The total investments for the three wheeler and four-wheeler

quardricycle project are expected to be in the range of Rs 500 crore in the next two-

three years. It plans to go with petrol version of three wheelers and expects higher

demand to come from B class towns. The company expects higher margin and low

competition in three-wheeler business as compared to its two-wheeler business. Three

wheeler sales have grown at a CAGR of 7% over the last 9 years to 2.26 lakh units

FY 03, and are expected to grow at the same rate for the next five years. TVS is

expected to roll out its first three-wheeler by the end of FY05 to garner a 30% market

share with around 100,000 unit sales by the end of FY08.

Three-Wheeler Market Scenario

These are two main segments in the Indian passenger three -wheeler markets are:

Number of seats including driver not exceeding 4 and maximum max not exceeding 1

tonne.

Number of seats including driver excluding 4 but not exceeding 7 max mass not

exceeding 1.5 tonnes.

The three-wheeler goods carrier segments are:

Maximum mass not exceeding 1 tonne Others.

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Around 95% of the three-wheeler sold in India belong to the smaller vehicles category

in which Bajaj Auto is the major player and has around 90% market share. The other

players in the segment are Atul Auto and Piaggio group, Italy.

Similarly, in the three-wheeler segment, domestic sales of the goods carrying variety

grew a whopping 46.95%. This growth in 2008-09 could have possibly come from

two factors.

1) The increasing number of cities whose corporations have legislated that larger

goods carrier, like trucks be kept out for logistics purpose.

2)The increase in the number of offerings in this category, especially from companies

such as Mahindra & Mahindra and Piaggio vehicles pvt. Ltd.

Quardricycle-A new introduction in the Indian market

There is a new challenger emerging in the Quardricycle segment. These new vehicles

could impact on the entry level sales. These new vehicle could impact on the entry

level sales. Quardricycles are three wheelers converted into four wheelers by using, a

column axle. All the major three-wheeler units have prepared Quardricycles

prototypes.

Plans setting up manufacturing units in Indonesia / Vietnam

TVS motor is actively looking to set up a foothold in the south east Asian markets and

has made top level visits to Indonesia & Vietnam. Indonesia is the third largest two-

wheeler market in the world with an estimated size this year of two million units.

Presently in Indonesia there is one motorcycle for every 15 people, in Vietnam one

for every seven people. Further in Indonesia forty million households, representing

86% of the total not having a motorcycle.

Merger of engine components Division of Lakshmi Auto components with TVS

Motor:

TVS motor would merge engine component division of Lakshmi Auto Component

Ltd. (LAC) and investments and other assests with itself and the dwap ratio has been

fixed at once phase of TVS motor for every seven share held as consideration for the

merger. Presently TVS motor holds 66.5% of equity capital of LAC, which would be

cancelled. Around 66% of LACs sales come from the engine components division,

mode of which is currently being sold to TVS motor. LACs total net sales in HI FY

09 were Rs. 69 crore and made anet profit of Rs. 10.5 crore..

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The Plastics and Rubber components division of LAC will be transferred to the

wholly owned subsidiary company, Sundaram Auto Components Ltd. The total

consideration on slump sale based is Rs. 12.25 crore.

Strong focus on R&D

The company has put in place a strong R & D team consisting 400 engineers & is

spending about 3% of its turnover on R & D every year and has in the process setup a

strong world class facility for product design and development. During 2009-10, the

company applied for 16 patents & published five technical research papers in

international conference. Modified research projects are carried in association with

leading international research labs and Indian institutes. R & D as percentage of sales

in expected to increase from 1.5% in FY o2 to 3.2% in FY 11.

Valuation

The companys valuations are dependent on five events:

Current four businesses grow at the normal industry growth rates.

New product launches achieve their targets and are well accepted by the

market.

Three wheeler foray achieve targeted volume in the desired rates of return on

capital employed.

Quadricycle foray achieve the desired rate of return on the capital employed.

Overall investment returns.

In TVS motor company VICTOR is the most popular bike and very

interestingly without any media interaction FIERO F2 has taken the 2nd spot

with CENTRA on the 3rd spot which has taken a lead with only one place

from MAX-R .It is recommended that FIERO F2 should be given equal sales

promotion than CENTRA because of its popularity has come through peoplenetwork and not through channel media.

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COMPANY PROFILE

Fill it. Shut it. Forget it

What started out as a Joint Venture between Hero Group, the world's largest bicycle

manufacturers and the Hero Moto Corp Company of Japan, is today the leading

manufacturer of India's largest selling motorcycle. Coming into existence on January

19, 1984. Hero Moto Corp gave India nothing less than a revolution on two-wheels

made even more famous by the 'Fill it - Shut it - Forget it' campaign. Driven by the

trust of over 30 lakh customers, the Hero Moto Corp product range today commands

as much as 47% making it a veritable giant in the industry. Add to that technological

excellence, an expansive dealer network, and reliable after sales service, and you have

one of the most customer-friendly companies.

In fact, every second bike sold in India today is a Hero Moto Corp ! Customer

satisfaction, a high quality product, the strength of Hero technology and the Hero

group's dynamism have helped HML scale new frontiers and exceed limits.

In the words of Mr. Brijmohan Lall Munjal, the Chairman and Managing Director,

"We will continue to make every effort required for the development of the

motorcycle industry, through new product development, technological innovation,

and investment in equipment and facilities and through and through efficient

management."

MILESTONE

KEY MILESTONES OF HERO MOTO CORP

Year Event

1983 Joint Collaboration Agreement with Hero Moto Corp, Ltd.,

1984 Hero Moto Corp. Incorporated

1985 First motorcycle "CD 100" rolled out

1987 100,000th motorcycle produced

1989 New motorcycle model - "Sleek" introduced

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1991 New motorcycle model - "CD 100 SS" introduced 500,000th motorcycle

produced

1992 Raman Munjal Vidya Mandir inaugurated - A School in the memory of

founder

1994 New motorcycle model - "Splendor" introduced 1,000,000th motorcycle

produced

1997 New motorcycle model - "Street and 2nd manufacturing plant at Gurgoan

inaugurated

1998 2,000,000th motorcycle produced

1999 New motorcycle model - "CBZ" introduced Environment Management System

of Dharuhera Plant certified with ISO-14001 by DNV Holland Raman Munjal

Memorial Hospital inaugurated - A Hospital in the memory of founder

Managing Director, Mr. Raman Kant Munjal

2000 4,000,000th motorcycle produced Environment Management System of

Gurgaon Plant certified ISO-14001 by DNV Holland Splendor declared

'World No. 1' - largest selling single two-wheeler model " Hero Moto Corp

Passport Programmed" - CRM Programmed launched

2001 New motorcycle model - "Passion" introduced One million production in one

single year New motorcycle model - "Joy" introduced 5,000,000th motorcycle

produced

2002 New motorcycle model - "Dawn" introduced New motorcycle model -

"Ambition" introduced Appointed Virender Sehwag, Mohammad Kaif, Yuvraj

Singh as Brand Ambassadors

2003 Becomes the first Indian Company to cross the cumulative 7 million sales mark

Splendor has emerged as the World's largest selling model for the third

calendar year in a row (2000, 2001, 2002) New motorcycle model - "CD

Dawn" introduced New motorcycle model - "Splendor +" introduced New

motorcycle model - "Passion Plus" introduced New motorcycle model

-"Karizma" introduced

2004 New motorcycle model - "Ambition 135" introduced Hero Moto Corp became

the World No. 1 Company for the third consecutive year. Crossed sales of

over 2 million units in a single year, a global record. Splendor - World's

largest selling motorcycle crossed the 5 million mark New motorcycle model -

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"CBZ*" introduced Joint Technical Agreement renewed Total sales crossed a

record of 10 million motorcycles

2005 Hero Moto Corp is the World No. 1 for the 4th year in a row New motorcycle

model - "Super Splendor" introduced New motorcycle model - "CD Deluxe"

introduced New motorcycle model - "Glamour" introduced New motorcycle

model - "Achiever" introduced First Scooter model from Hero Moto Corp -

"Pleasure" introduced

2006 Hero Moto Corp is the World No. 1 for the 5th year in row Fill it. Shut it.

Forget it

The joint venture between india's hero group and Hero Moto Corp company, has not only

created the world's single largest two wheeler company but also one of the most successful

joint ventures worldwide.

During the 80s, Hero Moto Corp 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 Moto Corp sold millions of bikes purely on the commitment of increased

mileage

Over 20 million Hero Moto Corp two wheelers tread indian roads today. These are almost as

many as the number of people in finland , ireland and sweden put together!

Hero Moto Corp has consistently grown at double digits since inception; and today, every

second motorcycle sold in the country is a Hero Moto Corp. Every 30 seconds, someone in

india buys Hero Moto Corp's top -selling motorcycle splendor. This festive season, the

company sold half a million two wheelers in a single montha feat unparalleled in global

automotive history.

Hero Moto Corp bikes currently roll out from its three globally benchmarked manufacturing

facilities. Two of these are based at dharuhera and gurgaon in haryana and the third state of

the art manufacturing facility was inaugurated at haridwar, uttrakhand in april this year.

These plants together are capable of producing out 4.4 million units per year.

Hero Moto Corp 's extensive sales and service network now spans over 3000 customer touch

points. These comprise a mix of dealerships, service and spare points, spare parts stockiest

and authorized representatives of dealers located across different geographies.

Hero Moto Corp values its relationship with customers. Its unique crm initiative - Hero Moto

Corp passport program, one of the largest programs of this kind in the world, has over 3

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million members on its roster. The program has not only helped Hero Moto Corp understand

its customers and deliver value at different price points, but has also created a loyal

community of brand ambassadors.

Having reached an unassailable pole position in the indian two wheeler market, Hero Moto

Corp is constantly working towards consolidating its position in the market place. The

company believes that changing demographic profile of india , increasing urbanization and

the empowerment of rural india will add millions of new families to the economic

mainstream. This would provide the growth ballast that would sustain Hero Moto Corp in

the years to come. As brijmohan lall munjal, the chairman, Hero Moto Corp motors

succinctly points out, "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.''

HERO MOTO CORP'S MISSION

Hero Moto Corps mission is to strive for synergy between technology, systems and human

resources, to produce products and services that meet the quality, performance and price

aspirations of its customers. At the same time maintain the highest standards of ethics and

social responsibilities.

This mission is what drives Hero Moto Corp to new heights in excellence and helps the

organization forge a unique and mutually beneficial relationship with all its stake holders.

HERO MOTO CORP 'S MANDATE

Hero Moto Corp is a world leader because of its excellent manpower, proven management,

extensive dealer network, efficient supply chain and world-class products with cutting edge

technology from Hero Moto Corp Company. The teamwork and commitment are manifested

in the highest level of customer satisfaction, and this goes a long way towards reinforcing its

leadership status.

FROM THE CHAIRMAN'S DESK LEADING WITH A DREAM

We had a dream. The dream of making motorcycles that would touch and transform the lives

of our customers by giving them a mode of transport that was fuel-efficient, comfortable and

environment friendly. One that would enhance their efficiency at work, enable them to share

moments of joy with their families and add up to a better quality of life.

In a scenario where the customer had a few choices, our vision was to offer the highest

quality at a reasonable price, to meet our customers expectations, and to exceed them.

Behind the success of Hero Moto Corp, is the saga of team-work. We would like to

acknowledge the role played by our jv partners, Hero Moto Corp company, all our business

associates, shareholders and employees.

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In the new millennium, we stand committed to innovation, to change, to achieving

breakthroughs to moving forward in the new century, while retaining the values that have

been like a beacon in this journey thus far.

2007

-Hero Moto Corp. has appointed Mr. Yutaka Kudo as Director and

Whole-time Director of the Company in the category of Executive

Director w.e.f. April 1, 2007.

- Hero Moto Corp is the World No. 1 for the 6th year in a row

- New 'Splendor NXG' launched

- New 'CD Deluxe' launched

- New 'Passion Plus' launched

- New motorcycle model 'Hunk' launched

- 20 million production milestone achieved

2008

- Hero Moto Corp has informed that Mr. Arun Nath Maira. has been appointed as an

Additional Director in the category of Non Executive and Independent Director w.e.f.

December 20, 2008 by the Board of Directors by way of passing a resolution by

circulation.

- Hero Moto Corp Haridwar Plant inauguration

- New 'Pleasure' launched

- Splendor NXG lauched with power start feature

- New motorcycle model 'Passion Pro' launched

- New 'CBZ Xtreme' launched

- 25 million production milestone achieved

- CD Deluxe lauched with power start feature

- New 'Glamour' launched

- New 'Glamour Fi' launched

2010

- Hero Moto Corp has appointed Mr. Ravi Nath as an Additional Director in the

category of Non Executive and Independent Director w.e.f. October 14, 2010 by the

Board of Directors by way of Passing a resolution by circulation on October 14, 2010.

BOARD OF DIRECTORS

No. Name of the directorscategory of directorship

1 Mr. Brijmohan Lall Munjal

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Chairman & whole-time director

2 Mr. Pawan Munjal managing director

3 Mr. Toshiaki Nakagawa joint managing director

4 Mr. Yutaka kudo whole-time director

5 Mr. Om prakash munjal non-executive director

6 Mr. Sunil kant munjal non-executive director

7 Mr. Masahiro takedagawa non-executive director

8 Mr. Takashi nagai non-executive director

9 Mr. Narinder nath vohra non-executive & independent director

10 Mr. Pradeep dinodia non-executive & independent director

11 Gen.(retd.) Ved prakash maliknon-executive & independent director

12 Mr. Analjit singh non-executive & independent director

13 Dr. Pritam singh non-executive & independent director

14 Ms. Shobhana bhartia non-executive & independent director

15 Mr. Sunil bharti mittal non-executive & independent director

Hero Moto Corp is the world no. 1 for the 5th year in a row

PROMINENT AWARDS TO THE COMPANY

Year Awards & recognitions

2008 Ndtv profit car india & bike india awards - bike manufacturer of the year

Overdrive magazine - bike manufacturer of the year

Tns voice of the customer awards:

No.1 executive motorcycle splendor nxg

No.1 standard motorcycle cd deluxe

No. Premium motorcycle cbz xtreme

2007 The ndtv profit car india & bike india awards 2007 in the following category:

Overall "bike of the year" - cbz x-treme

"bike of the year" - cbz x-treme (up to 150 cc category)

"bike technology of the year" - glamout pgm fi

"auto tech of the year" - glamout pgm fi by overdrive magazine

bike of the year" - cbz x-treme by overdrive magazine

ranked cbz x-treme " bike of the year" - by b s motoring magazine

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most trusted company , by tns voice of the customer awards 2006.

Cd deluxe rated as "no 1 standard motorcycle" by tns voice of the customer awards2006.

2006 Adjudged 7th top indian company by wallstreet journal asia (top indian two wheeler

company)

one of the 8 indian companies to enter the forbes top 200 list of worlds most reputed

companies.

No. 1 in automobile industry by tns corporate social responsibility award

Best in its class awards for each category by tns total customer satisfaction awards

2006:

Splendor plus (executive)

Cd deluxe (entry)

Pleasure (gearless scooters)

Splendor & passion - top two models in two wheeler category by et brand equity

survey 2006Adjudged 7th top indian company by wallstreet journal asia (top indian two wheeler

company)

Top indian company in the automobile - two wheeler sector by dun & bradstreet -

american express corporate awards 2006

Hero Moto Corp splendor rated as india's most preferred two-wheeler brand at the

awaaz consumer awards 2006.

Certificate of export excellence for outstanding export performance during 2003-04

for two-wheeler & three- wheelers - complete (non ssi) by engineering export

promotion council

The ndtv profit car india & bike india awards 2006 in the following category:

Bike maker of the year

Bike of the year - achiever

Bike of the year - achiever (up to 150 cc category)

Bike of the year - glamour (up to 125 cc category)

Ndtv viewers' choice award to glamour in the bike category

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2005 Awaaz consumer awards 2005 - india's most preferred two-wheeler brand by cnbc in

the 'automobiles' category

Bike maker of the year award by overdrive magazine

Icwai national award for excellence (second) in cost management 2004 in the privatesector category by icwai

10th motilal oswal wealth creator award for as the most consistent wealth creator for

the period 1991-2005

2004 Winner of the review 200 - asia's leading companies award (3rd rank amongst the top

10 indian companies)

Gvc level 1 (highest rating) by crisil for corporate governance

Adjudged as the best value creator - large size companies 2003-04 by the outlook

money

Corporate excellence award 2004 by indian institute of materials management

Adjudged as the organization with innovative hr practices by ht power jobs for hr

excellence

Icsi national award for excellence in corporate governance 2004 by the institute of

company secretaries of india

2003 Winner of the review 200 - asia 's leading companies award (3rd rank amongst the

top 10 indian companies)

Most respected company in automobile sector by business world

Bike maker of the year by overdrive magazine

2002 Bike maker of the year by overdrive magazine

Winner of the review 200 - asia 's leading companies award (4th rank amongst the top

10 indian companies)

Company of the year of et awards for corporate excellence

Ranked 4th in 'overall best managed company' category, ranked 3rd in 'best financial

management' and 'best operational efficiency' category, ranked 6th in 'overall best

investor relations' category, by asiamoney

Highest wealth creating company of the year award by the money

Gvc level 1 (highest rating) by crisil for corporate governance

2001 Bike maker of the year by overdrive magazine

Winner of the review 200 - asia 's leading companies award (9th rank amongst the top

10 indian companies)Winner of three leaves award for showing corporate environment responsibility in the

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automobile sector by centre for science & environment

1999 National productivity award for the best productivity award in the category of

automobile & tractor presented by vice president of india

1995 The analyst award 1995 presented to Hero Moto Corp. On being ranked 9th amongst

the most investor rewarding companies in India

1995 National award for outstanding contribution to the development of Indian small scale

industry (nsic award - presented by president of India)

1991 Economic times-harvard business school award for corporate performance to

Hero Moto Corp.

KEY POLICIES

AN ENVIRONMENTALLY AND SOCIALLY, AWARE COMPANYAt Hero Moto Corp, our goal is not only to sell you a bike, but also to help you every

step of the way in making your world a better place to live in. Besides its will to

provide a high-quality service to all of its customers, Hero Moto Corp takes a stand as

a socially responsible enterprise respectful of its environment and respectful of the

important issues.

Hero Moto Corp has been strongly committed not only to environmental conservation

programmes but also expresses the increasingly inseparable balance between the

economic concerns and the environmental and social issues faced by a business. A

business must not grow at the expense of mankind and man's future but rather must

serve mankind.

"we must do something for the community from whose land we generate our wealth."

A famous quote from our worthy chairman mr.brijmohan lall munjal.

ENVIRONMENT POLICY

WE at Hero Moto Corp are committed to demonstrate excellence in our environmental

performance on a continual basis, as an intrinsic element of our corporate philosophy.

TO ACHIEVE THIS WE COMMIT OURSELVES TO:

Integrate environmental attributes and cleaner production in all our business processes

and practices with specific consideration to substitution of hazardous chemicals, where

viable and strengthen the greening of supply chain.

Continue product innovations to improve environmental compatibility.

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Comply with all applicable environmental legislation and also controlling our

environmental discharges through the principles of "alara" (as low as reasonably

achievable).

Institutionalise resource conservation, in particular, in the areas of oil, water, electrical

energy, paints and chemicals.

Enhance environmental awareness of our employees and dealers / vendors, while

promoting their involvement in ensuring sound environmental management.

QUALITY POLICY

Excellence in quality is the core value of Hero Moto Corp's philosophy. We are

committed at all levels to achieve high quality in whatever we do, particularly in our

products and services which will meet and exceed customer's growing aspirations

through: Innovation in products, processes and services. Continuous improvement in

our total quality management systems. Teamwork and responsibility.

MISSION STATEMENT IN PURSUIT OF EXCELLENCE

We, at Hero Moto Corp, are continuously striving for synergy between technology,

systems, and human resources to provide products and services that meet the quality,

performance, and price aspirations of our customers. While doing so, we maintain the

highest standards of ethics and societal responsibilities, constantly innovate products

and processes, and develop teams that keep the momentum going to take the company

to excellence in the new millennium".

WE CARE FOR ENVIRONMENT

A philosophy closest to Hero Moto Corp is that which pertains to the environment,

which is why the company goes that extra step to ensure that each one of the high

technology 4-stroke Hero Moto Corp motorcycles meet the most demanding of

pollution norms at every level. This is a policy that the company has followed since

the very beginning.

WE CARE FOR COMMUNITY

Hero Moto Corp is a company with a difference. Constantly involved in social

activities, spreading. Awareness about the community and environment, the company

has taken a giant step in the fields of Health care; Education; Engineering;

Environment and many more

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International Marketing

Based on our own brand of globalization, they have built our distribution network

over 60 countries worldwide and multiplied our exports from 5 percent of

total turnover in Fiscal 2007-08 to over 15 percent in Fiscal 2010-11.

Motorcycles form the major chunk of the sales revenue of Hero Moto Corp. A small

proportion of the revenue comes from the sales of spares. The proportion of sales

revenue coming from each of these two segments in the FY10 is depicted in the graph

below:

MAIN OBJECTIVE OF COMPANY

Through the company has wide list goals to be achieved but the major objective of the

company has to achieve areas follows:-

1. To provide right product to right people at right time.

2. Price should be reasonable; by this every level of person can afford the

product.

3. To maximize the share holders value by customer value enhancement.

4. Changes should be according to prospective customer

5. To provide delivery of standard product.

6. To provide value for money to there consumers.

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LITERATURE REVIEW

Marketing Strategy

A thorough understanding of the fast-changing Marketing Strategy, new market

segments and product opportunities along with sensitivity to changing customer needs,

form the core of Hero's marketing strategy and philosophy. At Hero we essentially

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.

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.

Conventionally, very few Indian bicycle manufacturers were interested in exports.

However, the Hero Group's foray into the overseas markets pioneered Indian exports in

the bicycle segment as early as 1963. It was a move prompted primarily by the need to

be attuned to the global marketplace.

While initial exports were restricted to Africa and the Middle East, today more than 50

percent of the Group's bicycle exports meet the demands of sophisticated markets in

Europe and America. This is primarily because of appropriate product development andexcellent quality that Hero offers.

The Group has undertaken a steady up gradation of technologies and there has been

diversifications and setting up of newer establishments to meet stringent international

standards. At the core of it all is a customer-centric scheme of policies and

production ... and the bottom line is to "Add Value while Engineering Satisfaction."

PARTNERSHIPS, ALLIANCES AND JOINT VENTURES

Hero's quest for a low-budget, fuel-efficient and environment-friendly two-wheeler

led Hero Moto Corp to enter into a Technical Collaboration with Steyr Daimler

Punch of Austria in 1987 for the manufacture of the 65cc, Porsche-design mini-

motorcycles.

Munjal Showa Limited was formed in Technical and Financial Collaboration with

Showa Corporation, Japan, to design, develop and manufacture of front forks,

shock absorbers, struts and gas struts.

Sunbeam Auto Limited has set-up a state of the art piston manufacturing facility in

technical collaboration with M/S Hero Foundry Company Limited of Japan, the

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pioneers in the world for manufacturing high-strength lightweight pistons used in

light, powerful fuel-efficient engines Munjal Auto Industries Limited has a joint

venture with the State-owned Gujarat Industrial Investment Corporation, to cater

to the needs of the overseas market.

Hero Cycles CR Division was set up in consultation with MECON, Asia's largest

engineering consultants and in Technical Collaboration with Wean United, USA.

Hero Cycles Cold Rolling Division has also entered into a technical collaboration

with Kawasaki Steel Corporation, Japan for the improvement of production yield,

elimination of defects, reduction of customer returns and enhancement of

maintenance operations against certain predetermined targets.

QUALITY

Quality at Hero is attained not just by modern plants and equipment and through latest

technology, but by enforcing a strict discipline. At the Group factories, attaining

quality standards is an everyday practice - a strictly pursued discipline. It comes from

an amalgamation of the latest technology with deep-rooted experience derived from

nearly four decades of hard labor.

It is an attitude that masters the challenge of growth and change - change in consumers'

perceptions about products and new aspirations arising from a new generation of

buyers. Conformance to quality at Hero begins on the shop floor. Every worker ensures

at each stage of manufacturing that any of the faulty products are not allowed to go

through further manufacturing and distribution cycles.

Today quality is ensured from steel processing to the finished product. Each

component goes through numerous tests at the stages of design, raw material

procurement and, of course, during the manufacturing process.

Constant technology up gradation ensures that the Group stays in the global

mainstream and maintains its competitive edge. With each of its foreign collaborations,

the Group goes onto strengthen its quality measures as per the book. The Group also

employs the services of independent experts from around the world to assist in new

design and production processes.

Nevertheless, in this race to acquire the most modern techniques and technologies and

to collaborate with the most advanced players in the market, the core competence

continues to be derived from the Group's philosophy - "To Engineer Satisfaction."

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MARKETING MIX STRATEGY

Product Mix

Product Variety Quality Design Brand Name Warranties Service Features

Price Mix

List Price Discount Allowances Payments Periods

Credit Terms

Place Mix

Channels Coverage Assortments Inventory Transport

Promotion Mix

Sales Promotion Advertising Public Relations Direct Marketing

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MARKETING MIX: -

Standardised Marketing Mix:

An international marketing strategy for using basically the same product, advertising,

distribution channels & other elements of the marketing mix in all the countries of

companys international market.

Adapted Marketing Mix:

An international marketing strategy for adjusting the marketing mix elements to each

international target market, bearing more costs but hoping for a larger market share &

return.

International ScenarioA two-wheeler is used as a personal/family vehicle or a goods carrier in the enveloping

countries, whereas it is confined to sports/racing (heavy motorcycles) or short istance

shopping (mopeds) in developed countries.

The world two-wheeler market is dominated by Japan. Japanese manufacturers

account for around 65% of the total two-wheeler production in the world. However,

production within Japan has been declining due to lower domestic demand and shift

in manufacturing base outside the country. Japan is also the world's largest exporter of

two-wheelers in the world controlling around 75% of the world trade. Its major

markets are China, USA and Europe. In terms of player positions, Hero Moto Corp

Corporation, Yamaha Motors and Suzuki Motors Corporation share the top three slots

in the world two-wheeler market. The table below shows the production and sales

figures of motorcycles and scooters in Japan during the past decade More than 50% of

the production in Japan is exported out of the country. This scenario contrasts directly

with the Indian scenario. In India, only about 15% of the production in FY11 were

exported

The Asian continent is the largest user of two-wheelers in the world. This is due to

poor road infrastructure and low per capita income, restrictive policy on car industry.

The technology for two-wheelers is not as well developed as for car industry. This is

due to oligopoly between top five players in the segment, compared to thirty

manufacturers in the car industry.

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EXPORTS

HERO CYCLES

HERO MOTO CORP

HERO PUCH

HERO CORPORATE SERVICES (Herosoft, Hero

Mindmine, Hero serveIT)

MUNJAL SHOWA LIMITED

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THE HERO MOTO CORP MISSION

1. Enhancing quality of life

The Hero Moto Corp group is committed to creating a better quality of life for people

everywhere and to furthering the interest of the society by being a responsible

corporate citizen.

2. Creating Happiness

We will bring happiness into every home, offering high consumer durable vehicles at

affordable prices, and comfort.

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3. Achieving progress

We will pursue innovative technologies in the field of customer care vehicles and

energy, create product and services that will improve to quality of life, realize the

goals of the world community and protect the environment

4. Sustaining growth

We will be a source of pride to our business associates by ensuring mutual prosperity

and growth through the implementation of forward looking corporate strategies aimed

at identifying opportunities and responding intelligently to dynamics of change.

5. Pursuing Excellence

We will provide a conducive environment for enabling our employees to develop

their potential and make a significant contribution to the group success.

PLACEMENT OF HERO MOTO CORP

Hero Moto Corp Limited sells the motorcycle through a widely spread all India networks of

over 450 of dealers. The motorcycle can be serviced at the authorized dealers or SSPs

(Spare and Service points).

In the year 1996, Hero Moto Corp was the first company to introduce Indias first chain of

automated services workshops. To expand the service network further to smaller towns, the

company has appointed Service extensions.

Hero Moto Corp genuine spare parts are available from the dealers, SSPs and the stockiest.

The company provides good after sales service through its well-established dealer network.

The company has a policy of three S, Single S for stockiest, Double S for services and three

SSS for sales.

The company is having about 460 of SSS, which deals in Sales, Service, and Stock, 260 of

SS, which deals in Service and Stock and 12 of S, which exclusively deals in stocks.

The Network As On 31st March 2002 Is As Under: Dealers (3s_-Sales, Service, Spares)-

458, Ssps (2 S-Service And Spares)-256, Stockiest (Single S-Spares)-12

The company has developed a unique distribution network, which has given it a distinctive

competitive advantage. The whole idea behind establishing this vast distribution network is

to reach the customer even in the remote areas.

The company has segregated the areas as Urban, Rural, and semi rural and has appointed

dealers in many of these areas, after seeing the potential. The companys major thrust is the

easy availability of all the models in every part of the country.

The companys bikes are sold through the dealers and they are required to provide proper

infrastructure, Workshops, Facilities, and trained Personals. The dealers are given targets

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and they are required to sell sufficient number of vehicles to earn a return on investments.

Regional offices are in constant touch with these dealers.

Presently the company is having 8 regional offices in the country. The regional offices

constantly assist these offices as a kind of linkage between the company and the dealer and

the dealers. The sales and the marketing personals at the regional offices are trained and

encourage maintaining a cordial relationship with various dealers on the basis of trust and

understanding. The companys service engineer and the other sales staff supervise all the

facilities at the dealer and the service outlet from planning the layout to the errection of the

specially designed benches and the tools. Infact all the possible efforts are made by the

company to make the dealers to become the part of the Hero family and its culture.

The company has appointed fleet of more than 400 trucks from around 45 transporters to

assist them in the delivery of vehicle. From the factory and within the factory premises, the

company has a good fleet of trucks and trailers. The company to deliver the vehicle to the

dealers showroom in the gactory fresh condition uses these trucks and trailers. The cargos

are loaded in the trucks and the trailers and they are delivered at the stockyards of the

dealers in whichever part of the country they may be located. So the company in this way

delivers the motorbikes in the fresh factory conditions. By the time the bike reaches our

dealers they might have done hardly a coupler of kilometers. The company believes the

marketing efforts should go beyond ensuring product availability.

The focus is therefore on a vast distribution network. In order to ensure the customers a

better quality service at the various stations, the company mounts an effective training

porograme in which all the mechanic, supervisory staff and the other senior staff personnel

participate.

The company is also planning to set up some of the fully equipped express authorized

highway. In these highways, one would see a Hero Moto Corp dealer every 15-25

KMS.This concept is thought by the company with a view to provide good after sales

services to the customer. This exercise will also check the company to check the use of

spurious products, which ultimately spoil the bike. The highways to be covered in this

scheme are:

NEW DELHI-GWALIOR

NEW DELHI-CHANDIGARH

AMBALA-LUDHIANA

KOLKATTA-DHANBAD

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The company has a dream to increase this figure of 458 dealers to 650 by the end of 2003

and increase the figure of 256 service stations to 350 by the end of the year 2003.The

company is going by an expansion process.

The company is perhaps the second company after Maruti Udyog Limited to implement a

factory fresh concept. The company is the only company in the two-wheeler segment

having so much of vast distribution network. Hero Moto Corp will be adding 25 more

dealers and 50service stations to build a network of 575 dealership-cum-service points

(including 400 dealerships) across the country.

The level of investment in an automated Hero Moto Corp service station is expected to be

around Rs 10 lakh, apart from land and building. ``No dealer has any problem in expanding

business,'' says Tapan, Marketing manager. ``We've tied up with Citibank and Centurion to

provide bill discounting through our dealers. Consumer Finance: In order to focus on

organized consumer financing, Hero Moto Corp tied up with Tata Finance a week ago. This

is Hero Moto Corp's second tie-up following Centurion, which is accounting for around

3,000 bikes a month through 100 dealerships.

A thorough understanding of the fast-changing consumer behaviour, new market segments

and product opportunities along with sensitivity to changing customer needs, form the core

of Hero's marketing strategy and philosophy. At Hero we essentially 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.

With a deep sense of belonging to the Hero fraternity, the Group's dealer network has

catalysed growth and acted as a strong bridge between the customers and the Group.

Conventionally, very few Indian bicycle manufacturers were interested in exports.

However, the Hero Group's foray into the overseas markets pioneered Indian exports in the

bicycle segment as early as 1963. It was a move prompted primarily by the need to be

attuned to the global marketplace.

While initial exports were restricted to Africa and the Middle East, today more than 50

percent of the Group's bicycle exports meet the demands of sophisticated markets in Europe

and America. This is primarily because of appropriate product development and excellent

quality that Hero offers. The Group has undertaken a steady upgradation of technologies

and there has been diversifications and setting up of newer establishments to meet stringent

international standards. At the core of it all is a customer-centric scheme of policies and

production and the bottom line is to "Add Value while Engineering Satisfaction.

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PRODUCT STRATEGIES OF HERO MOTO CORP

Hero Hero shifted its focus from catering to the fuel efficient conscious consumer to try

and occupy other segments of the motorbike market and therefore the new product

launches from Hero Moto Corp in the last three year have been in this direction. Thecompany has also upgraded some of its bikes to stay in contention and to meet Euro

emission norms. The new underlining theme for the company One for everyone has led

to the launching of new products, which are as follows:

Street Smart: Hero Moto Corp introduced its Street Smart in 1997. The company who

were more inclined towards the scooters and who thought that the scooters were more safer

than the motorcycles, thus Hero Moto Corp decided to launch the Street Smart. The bike

was built in such a way that it resembled more like a scooters, than a motorcycle, but

actually it is a motorbike. I.e. it is a hybrid

Product Description (HERO MOTO CORP Ltd.)

Hero Moto Corp has launched the following motorbikes in the Indian market.

HERO MOTO CORP CD 100

HERO MOTO CORP CD 100 SS

HERO SLEEK

HERO MOTO CORP Splendor

HERO MOTO CORP Street Smart

HERO MOTO CORP CBZ

HERO MOTO CORP Joy

HERO MOTO CORP Passion

HERO MOTO CORP Ambition

Hero Hero shifted its focus from catering to the fuel efficient conscious

consumer to try and occupy other segments of the motorbike market and therefore the

new product launches from Hero Moto Corp in the last three year have been in this

direction. The company has also upgraded some of its bikes to stay in contention and

to meet Euro emission norms. The new underlining theme for the company One for

everyone has led to the launching of new products With the launch of new

motorbikes and various other motorbikes in the pipeline, Hero Moto Corps strategy

is to get into these segments of the motorcycle market where they have not made in

roads earlier.

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PRICING STRATEGIES OF HERO MOTO CORP

The company has a policy to price its product very competitively. In todays world,

one cannot has a skimming pricing says Mr. Tapan, marketing manager, Hero Moto

Corp. Necessarily the pricing policy is completely a blend of two strategies i.e.Penetration and Skimming. It has been the companys policy to provide the customers

with value for money-give more for less. We are the only company in the two wheeler

segment that is in the process of passing on the whole benefit of cost advantage

achieved as a result of the increased localization levels of upto 60% to the customers.

We are in the process of keeping our product increasing popular and affordable. The

company keeps telling its customers to think about Quality rather than price. Further

if one talks about the changes in the price in the last three years, the prices have never

been changed except the budgets except once in APRIL 2011,when the company

started off with their celebration offer, and thus decided to sanctioned a discount

and curtail on every Model Rs 1001\-. The company is surely in a business of

delivering quality rather than price. For instance the Boxer, which is of only 29,990

and is the cheapest bike of the industry. The company gives importance to the quality

rather than cheap products.

Well Hero Moto Corp has bikes at different price point but there is one common

thing that is they are priced at a premium of INR 2000- 3000 from the competitors

and it seems their strategy is working fine with the target customers as it is the largest

seller of bikes in the Indian market with a market share of 48 % .Customers are redy

to shell out the extra money because they believe and its fact that the fuel efficiency

of the bikes is much better than its competitors the different price points for Hero

Motors Limited are :

NAME PRICE

Dawn ------------------- 32,000

Splendor --------------- 41,000

Passion ---------------- 44,000

Cbz--------------------- 52,000-60,000

Thus we find that HML has bikes for every one for entry level customers they have

dawn which is a no frill attached product whose emphasis is on mileage with

performance .And for customers who like to have bike which is good at performance

and with descent looks they have Splendor which is their fastest selling bike and

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account for half of the total sales. Customers who are looking for style with

performance can go for Passion which is a huge success among the urban class as it is

priced little bit higher than splendor and the looks of the bike are astounding. For

customers who want style and power they have CBZ which is targeted towards the

premium segment and it was a runaway success initially but is not a hot seller now

due to some problems. Hero Moto Corp is planning to introduce few more models in

years time in order to make their portfolio of products more versatile. They are trying

to introduce new models and they are trying to introduce models at the premium

segment as it has high margins and the company feels that its the segment which is

will grow in the near future as the income of people will increase with the change of

life styles .HML also intend to introduce few models which are economical in nature

as they this segment provides the volumes to the company. Hero Moto Corp still

wants to charge a price of premium as its brand enjoys a high level of respectability

and reliability among the target customers as their products have already proved their

mettle in the market and enjoy high level of brand equity among the target customers.

Hero Moto Corp has an advantage of large no of dealers and also economies of scale

which help them to absorb the costs to a great extent.

PROMOTIONAL STRATEGIES OF HERO MOTO CORP

Hero Moto Corp rides safe

Hero Moto Corp's `Ride Safe and Good Rider' campaign is aimed at communicating

the philosophy of delivering safe products and promoting good driving for the overall

safety of the Hero Moto Corp customer. Created by McCann Erickson, the ad-- Hero

Moto Corp cares for your safety--invited all Hero Moto Corp owners to attend the

Ride Safe programme on October 27, 2011 at Delhi's India Gate lawns. This was the

first phase of the programme, where three instructors from Japan demonstrated

techniques of right driving. In the second phase, Hero Moto Corp will communicate

the launch of the 4S concept (sales, service, spare parts and safety) at Hero Moto Corp

dealerships. The focus of the third phase will be to promote the launch of the Hero

Moto Corp Safety Riding Promotion School, which will have riding simulators and

safety riding tracks

Hero Hero will take the riding programme-- where trained personnel will give riding

tips to bike owners-- to over 100 dealerships across 90 towns.

Promotion in this sector cannot be like that in the Fast Moving Auto pats

(Automobile) sector. The promotions in this sector are like 0% finance schemes and

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other sort of things. The company takes the services of many good and reputed

advertising agencies like Reddifuusion, Lintas, sachi & Sachi and others.

The company has also signed a kind of agreement with two celebrities just now to be

their brand ambassadors. Hero Moto Corp, a leading manufacturer of motorcycles,

has roped in film actor Hrithik Roshan and captain of Indian Cricket team Sourav

Ganguly as its brand ambassadors for three years till 2003.

They would endorse the company products, attend corporate and brand events and

help promote its "we care" campaign comprising safety riding, environment, and

friendliness.

Hrithik and Ganguly said they were glad to be associated with Hero Moto Corp. Hero

has embarked upon an ambitious project to achieve sale of one million bikes this year

with a market share of 47 per cent. The turnover would be in excess of Rs. 3000 crore.

In October alone, 1,12,000 motorcycles have been sold, Compared to 66,063 units in

the corresponding period last year, the increase in sales is a phenomenal 69 per cent.

Cumulative sales jumped up by 41.58 per cent to 5.72 lakhs units during April-

October as against 4.04 lakh units in the same period last year.

At Hero Moto Corp , our goal is not only to sell the customer a bike, but also to help

him at every step of the way in making the correct riding decisions. Assisting him in

making the right judgments on the road, and helping him to choose the right helmet

and other riding equipment

And as bike handling requires know-how, skill, and rigorous mental conditioning, we

have put together certain safety tips and suggestions that will enhance the riding

comfort. Last but not the least, it is always important to remember - a good rider is a

safe rider.

Hero Moto Corp is enhancing the Advertising &Promotion budget by around 35 per

cent from Rs 41 crore in 1999-2000. Apart from concentrating on mainstream

Splendor-- the world's largest selling bike-- and upscale CBZ motorcycles, Hero Moto

Corp has identified ``soft areas'' like services and spares parts for the purpose of

intense communication. The creative account of Hero Moto Corp rest with big names

like Hindustan Thompson Association, Lintas, Sachi and Sachi and so on. Hero Moto

Corp is also planning a major campaign to re-launch the restyled step-thru Street

Smart. While customer references-- and not media strategy-- are expected to support

the CD brand sales, Hero Moto Corp will look at social areas -- like civic issues,

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association with Non Government Organizations, contribution to greener causes-- for

corporate communications.

The corporate campaign will be largely complemented by on-ground initiatives under

the umbrella brand of ``We Care'', incorporating activities in the arena of community

services, safety and services programmes, tree-plantations and environmental-friendly

projects.

In line with Hero's worldwide, safety riding programme, this fiscal Hero Moto Corp

Motors Limited will take the riding programme-- where trained personnel will give

riding tips to bike owners

SPORTS & ENTERTAINMENT

In sports promotions, Hero Moto Corp will stickto cricket (following title

sponsorship of the World Cup last year, it has signed a three-year contract for Hero-

Hero-Salve Challenger Trophy) andgolf (it will continue with Hero-Hero Masters

Golf).

Moreover, after a successful association with movies-- last year it signed Pyar Mein

Kabhi Kabhi starring Dino M and Twinkle-- Hero Moto Corp is in theprocess of

identifying title sponsorships of youth-centric movies. Says Sobti, In terms of media

exposure, we are looking at sports, moviesand news. Niche channels are also worth

putting your money on.'' For theCBZ, this year it is planning to run commercials in

youth channels like MTV;Discovery and Star Movies.

In sports promotions, Hero Moto Corp will stick to cricket, it has signed a three-year

contract for Hero-Hero-Salve Challenger Trophy) and golf (it will continue with

Hero-Hero Masters Golf). Moreover, after a successful association with movies-- last

year it signed Pyar Mein Kabhi Kabhi starring Dino M and Twinkle-- Hero Moto

Corp is in the process of identifying title sponsorships of youth-centric movies. In

terms of media exposure, the company is looking at sports, movies, and news. For the

CBZ Motorcycle, this year it is planning to run commercials in youth channels like

MTV; Discovery and Star Movies.

The Target: Services will be a major differentiator,'' says Sobti.``The campaigns

will highlight the high level of services and automatedfacilities at our dealerships.''

Hero Moto Corp is expecting a 30-35 per centgrowth in spare parts revenue, which

accounted for Rs 100 crore in 1999-2000.In the new fiscal, Hero Moto Corp is aiming

to take the sales of Splendor from40,000 a month to 50,000 a month; CBZ from 4,500

a month to 5,000; and a10-15 per cent growth in CD and CD-SS brands up from

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25,000 a month now. There-launched step-thru Street Smart is expected to account for

around25,000-30,000 in the first year.

Services will be and is the differentiator. The campaigns will highlight the high level

of services and automated facilities at the companys dealerships. Hero Moto Corp is

expecting a 30-35 per cent growth in spare parts revenue, which accounted for Rs 100

crore in 1999-2000.In the new fiscal, Hero Moto Corp is aiming to take the sales of

Splendor from40, 000 a month to 50,000 a month; CBZ from 4,500 a month to 5,000;

and 10-15 per cent growth in CD 100 and CD100-SS brands up from 25,000 a month

now. Supporting all of the Hero Moto Corp's growth projections are amulet-pronged

strategy including a thrust on a customer relationship programme, major increase in

advertising and promotion (A&P) spending, expansion of dealership network, and a

focus on organized consumer financing.

DEALERSHIP EXPANSION

Hero Moto Corp will add 25 more dealers and 50service stations to build a network

of 575 dealership-cum-service points(including 400 dealerships) across the country.

The level of investment in an automated Hero Moto Corp service station isexpected

to be around Rs 10 lakh, apart from land and building. No dealerhas any problem in

expanding business,'' says Sobti. We've tied up withCitibank and Centurion to

provide bill discounting through our dealers.''Consumer Finance: In order to focus on

organised consumer financing, HeroHero tied up with Tata Finance a week ago. This

is Hero Moto Corp's secondtie-up following Centurion, which is accounting for

around 3,000 bikes a month through 100 dealerships.

We've got a good internal rate (based on IRM), which is standard acrossthe country,''

says Sobti. ``These finance companies bring refreshinglycustomer-friendly focus to

our organisation.''

With Tata Finance, Hero-Hero's reach will be extended to over 150dealerships.

Also, Tata Finance is expected to add 2,000 bikes a month. Presently, consume

financing, including non-organised financing, contributes around 20,000 Hero Moto

Corp bikes a month. Gauging Consumer: Hero Moto Corp is chalking out a customer

relationship programme, which is expected to be established in the next three years.

We're discussing with Result McCann,'' says Sobti.

The programme will initially attempt at building relationships with Hero Moto Corp's

top three to five lakh owners, out of its customer base of three million.

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SALES PROMOTIONS

Hero Moto Corp regularly has promotions running for its dealers as well as customers

in order to ensure that there is a interest among the target customers abut the company

and its products. Normally Company participates in road shows, Sponsors college

festivals, promotes eco friendly initiatives, Have festive Season offers, and sometimes

price discounts to attract the attention of the people. These promotions are targeted

mainly on youngsters as they are the primary buyers of bikes.

The company launches financial schemes as Zero % finance schemes in collaboration

with different banks so that customers can pick bikes in easy installments. The effect

of these promotions can be understood from the fact that 35 % of bikes are sold

through this medium.

INTRODUCTION OF MARKET RESEACH

Marketing is a restless, changing dynamic field, since 1920 many important and

dramatic changes have taken place in marketing. Thousands of new products,

including those of entire new industries such as automobiles, electronic and

computers, textiles, footwear etc. have appeared on the market.

Though al these occur through a gradual procedure of change but pronounced shift in

the orientation of times from production to marketing moreover, the role of marketing

itself has been changing. The various crises of the 1970s material and energy

shortage, inflation, economic stagnation, high unemployment, dying industries have

forced the marketing executives to assume a wide range of responsibilities that have

grown in complexities.

Due to the many challenges offered by the environment, the companies executives are

becoming more driven in their strategy decision making for making sound marketing

decisions in response to this requirement of formalized means of acquiring many

ways has reached a stage of maturity i.e, marketing research.

Market research has become a great tool for these companies to get the feedback and

formulate strategies accordingly in todays eager to know. What consumer perceives

about various brands for the perfect selection of target market. In an era where

competitive pressures have make the cost of failure prohibitive, research has become

crucial in getting the market plan right. As the project was globalization of Hero

Moto Corp I found that the company is making its marketing mix strategies by

considering the consumer at the central point because, now a days, the consumer has

become more aware and is no more a novice. Thats why marketing research has

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become an important tool in the hand of marketer to understand the versatile nature of

ever changing consumer behavior as depicted by the marketing research, as refined by

American Marketing Association.

Is the function which links the consumer, customer and public to the marketer

through the information used to identify and refined marketing opportunities and

problems, generate, refine and evaluate marketing actions: monitor marketing

performance and improve understanding of marketing as a process.

Marketing research specifies the information required to address these issues designs

the method for collecting information managers and implements the data collection

process, analysis the results and communicates the finding and their implications.

ADVERTISING

The