Market entry and growth strategy for

Hero in Nigerian market

Presented By:Shantnu Mukesh Jain

Why Nigeria?• 2nd Largest Economy in Africa• A Healthy GDP growth rate of around 6-8% over the past few years• Huge consumer base• Young and dynamic work force – 70% below 30 years• Rising per capita income• India-like emerging economy• Lack of reliable public transport system• Traffic problems

Market scope• Market size of 1 million two-wheelers annually • US $380 million worth annual turnover• Bajaj has already penetrated, selling 22000 bikes monthly• Tough competition to Chinese leader (30000 bikes monthly)• Obsession with foreign-made products from more economically

developed nations• Negative image of Made-in-Nigeria label• Good demand for fuel efficient bikes

Challenges

• High start up costs• Ranks 133 of 183 on ease-of-doing-business index• Hero has to begin operations as the third or forth ranked player• Presence of informal markets• Government restrictions• Rising fuel prices• Competition from cheap Chinese competitors and old foe Bajaj

Mode of entry

• Follow direct export mode of entry• Partnership with local distributer• Ease of penetration• Achieve market segmentation by utilizing Hero’s wide

product range• Correct positioning• Rely on own home grown technology

Growth prospects• Reach out to identify the demands of the customer through

feedbacks• Beat Chinese prices by exporting CKD kits instead of Full body kits• Set up in situ assembly plants• With good response and increase in demand set up local

manufacturing plants• Gradually develop own distribution network• Utilize cheap Nigerian labor

Marketing strategy

• Rope in local youth icons as brand ambassadors• Highlight strength - Fuel efficiency• Position it to tackle traffic• Association with sporting events• Provide easy financing solutions• Highlight the importance of brand to shrink informal trade

Thank You