Hero MotoCorp- A Rural Outlook

Abhishek Naik (P14037)Kakoli Laha (P14026)

Shashank Buddhavarapu (M14019)

About Hero• Incorporated as Hero Honda Motors Ltd in 1984 • Mr. Brijmohan lall Munjal (Chairman), Mr.

Pawan Mujal (CEO)• JV between Hero Group and Honda Motor

Company (HMC) of Japan• The world's largest manufacturer of two-

wheelers since 2001• Ended the JV in 2010• Leading manufacturer of motorcycles and

scooters in India

About HeroDerives around 60% of its revenue from rural

areas as compared to approximately 45% for the industry as a whole

About Rural

Automobile sector-RuralThe rural market contributes approximately

45% of the total industry demandOnly 10% of the households own a two-

wheeler in the rural areas

Demographics

About Hero Motocorp Started a separate 'rural vertical‘

in December 2007 Started sales, servicing, and

spare part outlets in several small towns and villages

Recruited local people as rural sales executives, trained them to market products to rural consumers

Extensive presence in rural India; 100,000+ villages covered

DISTRIBUTION "Hub and Spoke System" of

distributing products in rural areas

Dealership to one dealer who takes care of a district.

Hero Motocorp Rural Strategies

Brand Displays in various Hariyali Kissan Bazaar Centres across UP, MP, Haryana and Punjab

Genuine Spare Parts Programs Camps held in association with

Monsanto, Godrej Aadhar, IFFCO etc.

Use of IT to capture details of sales in rural markets

Identify customer mix, demand forecast, enhanced coordination with distribution partners

Splendor, Splendor Plus & Splendor PRO

Har Gaon Har Aangan and Service Har Jagah Programs

Results - • Covered

1,30,000 villages

• Increased Awareness

• Increased buy-in for products

Method• Meeting customers/

opinion leaders• Free check up bike camps/

Loan melas• Test ride camps• Ride Safe Program to

educate customers on Safety & Maintenance

Objectives• To reach every Indian home and every Indian

village• To build long-lasting relationships with people • Ensuring purchase and service of two wheelers in

India is affordable and convenient• Implement with the help of over 2000 channel

partners in villages with population of up to 2000

Other Notable Programs Dhadkanon Ki Rally - The Queen’s Baton program passed through 124 cities using Karizma ZMR

bikes To compensate for this, a massive rural activation campaign ‘Dhadkanon Ki

Rally’ was started across 22,000 villages, touching more than 2 million people

Khushiyan Har Angan – Undertaken to celebrate the spirit of caring and sharing during Diwali Rural executives travelled to 56,932+ villages in 2 weeks Met 4,58,000+ people at their doorsteps and wished them personally Distributed branded box of sweets with diyas

Good Life Program – Provides magnetic card with special rewards Free riders’ insurance worth Rs. 1 Lakh Points on all workshop and showroom spends can be redeemed at stores or

on their website

Other Notable Programs

Saral Finance – Tie-up with Cooperative and

Grameen banks Best rates, easy

documentation Shwet-Labh – Specially designed loan

package for Milk Cooperative members

Competitors’ Rural Marketing Strategies

Bajaj Auto Rural Marketing Strategies

• Special Finance Scheme for Rural customers, even if they have no bank account• Appointed 135 dealers in small towns and mini metros where it had only 25 dealers• Rural customers can schedule their repayment according to crop cycle rather than monthly instalments• Extensive market research surveys conducted• According to results obtained from these surveys, company now focusing on manufacturing bikes with higher power and larger wheelbase

Honda Rural Marketing Strategies•  CD 110 Dream at a competitive price tag of ₹ 41,000 launched specially with rural markets in focus• The company hopes to cash in on the brand value of the CD Series• When it comes to service, the customer is not willing to go beyond 10 kilometres- a study by Honda• The ‘Service-on-Wheels’ initiative has catered to above one lakh customers• To take this forward as a planned activity on a monthly basis, the company recently launched a mobile service van• The van will be equipped with audiovisual equipment, washing facilities, generator sets and a training work base• The AV equipment allows the company to have a class and conduct private workshops through videos

SourceSociety of Indian Automobile Manufacturers

(SIAM)http://www.ibef.org/industry/india-automobiles.aspxCRISILhttp://www.heromotocorp.com/en-in/uploads/Annual_Reports/pdf/20140708105458pdf291.pdfHero Honda Annual Reportshttp://www.heromotocorp.com/en-in/investors/annual-reports/2013-2014-50.html