PROJECT REPORT

ON

COMPARATIVE STUDY OF CONSUMER BUYING BEHAVIOUR OF

HERO AND BAJAJ BIKE

V/S

SUBMITTED FOR THE PARTIAL FULFILLMENT OF THE DEGREE OF

BACHELOR OF BUSINESS ADMINISTRATION

Of

Panjab University

By

JITESH AHUJA

University Roll.No.

17510001069

College Roll No:

6807

BBA 3rd YEAR

UNDER THE SUPERVISION OF

Ms. HARNEET KAUR

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DECLARATION

I, hereby declare that the research project report titled “ COMPARATIVE STUDY OF

CONSUMER BUYING BEHAVIOUR OF HERO MOTO CORP AND BAJAJ BIKE”

is my own original research work and this report has not been submitted to any

University/Institute for the award of any professional degree or diploma.

Date: JITESH AHUJA

Place: DAV COLLEGE BBA 3rd YEAR

SEC10 CHD

2

ACKNOWLEDGEMENTS

The research on “Comparative Study between Bajaj and Hero” has been given to me as part

of the curriculum in 3-Years Bachelor Degree in Business Administration.

I have tried my best to present this information as clearly as possible using basic terms that I

hope will be comprehended by the widest spectrum of researchers, analysts and students for

further studies.

I have completed this study under the able guidance and supervision of Ms.HARNEET KAUR.

I will be failed in my duty if I do not acknowledge the esteemed scholarly guidance, assistance

and knowledge. I have received from them towards fruitful and timely completion of this work.

Mere acknowledgement may not redeem the debt I owe to my parents for their direct/indirect support during the entire course of this project.

I am also thankful to my friend who helped me a lot in the completion of this project.

JITESH AHUJA

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PREFACE

This is a specialization project report on comparative study of buying behavior of hero and

Bajaj bikes. The objective of the study is to gain knowledge about the strategies of both the

companies and the whole background of the company.

During the project I researched how both the companies are satisfying the needs of the buyers.

This study also includes the comparison between HERO MOTOCORP AND BAJAJ.

In order to make the students competent, all students are required to take a real time Project

Work. The exposure to real life situation gives an insight the students about what problem they

can expect to face during their career.

Practical Training is an important part of the Management Courses. The theoretical studies are

not sufficient to get into the corporate world .Theoretical aspects are not sufficient to understand

the complexities of large scale organization & whenever we have to solve any problem the

practical study assist with the theoretical aspect in order to solve that problem so if we have

practical than only that problem can be solved . Studying books and merely passing exams, is

not worth, the education knowledge and in fact experience is incomplete without being exposed

to what is happening in real.

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CONTENTS

CHAPTER NO

TOPIC PAGE NO

CHAPTER 1 INTRODUCTION 7 – 14

1.1 INTRODUTION OF AUTO INDUSTRY 7 – 9

1.2 OBJECTIVES OF STUDY 10

1.3 RESEARCH METHODOLOGY 11 – 13

RESEARCH DESIGN AND SOURCES OF DATA

1.4 LIMITATIONS OF STUDY 14

CHAPTER 2 INFORMATION 16 – 54

2.1 HERO MOTO CORP LTD. 16 – 35

2.2 BAJAJ AUTO LTD. 36 – 54

CHAPTER 3 COMPARISION OF HERO MOTOCORP AND BAJAJ 56 – 60

CHAPTER 4 DATA ANALYSIS AND INTERPRETATION 62 – 76

CHAPTER 5 SUGGESTIONS AND CONCLUSION 78 – 79

BIBLOGRAPHY

ANNEXURES

QUESTIONAIRE

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CHAPTER-1

6

INTRODUCTION TO INDIAN MOTORCYCLES INDUSTRY

Motorcycles have come a long way since they were first introduced in the country way

back in the 1950s. The Indian government had got the first set of these mean machines

from the Royal Enfield Company of UK for its' Army and Police to patrol the border

highways on the rough and tough terrain of the West. Today these sets of two wheelers

not only cater to the men in uniform, but also common people who have different needs

and expectations from their motorcycles. Today motorcycle companies are taking

special care to make their products more user friendly comfortable, safe, and ergonomic

without compromising on the fun and thrills of riding. Some bikes like the Hero

Karizma can touch speeds up to 125kmph thus truly satisfying the riders need for

speed. motorcycles have also invaded the Hindi film industry where Bollywood heart

throbs like John Abraham, Hrithik Roshan , Uday Chopra and Fardeen Khan are seen

setting the roads on fire with their set of two wheels. Thus the trend of motorcycles

have caught up with the average Indian and there a bike to suit everyone's needs and

usage. Premium Segment bikes like the Hero Karizma and Bajaj Pulsar provides the

Generation a chance to emulate their idols on screen. These motorcycles come with 5

speed gear box and disc brakes to provide one the extra throttle with the adequate safety

measure. These motorcycles also come with factory fitted allow wheels to provide the

extra strength and stability.

India has a burgeoning middle class, which means that value for money bikes like the

Hero splendor, Bajaj “Discover” have retained their importance with every passing day.

These bikes are a hit among the office goers and small time business men who demand

maximum output from their two wheelers. Motorcycles like the Hero splendor come in

a wide range of colors and give an average mileage of 70 km per litre.

The entry level segment of motorcycles also has a cut throat competition with the two

wheeler manufacturers trying to outdo each other by providing that extra edge in

economy biking. Some of the bikes which are available at the entry level include the

Hero Honda CD Dawn, and Bajaj CT 100.

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The motorcycle is being increasingly used by youngsters/bachelors in urban

areas and by rural folk as a sturdy means of personal transportation. Bigger wheels,

better road grip, higher ground clearance, power, fuel efficiency, low maintenance cost

are the major attraction of this segment. In the last two years, the motorcycle segment

has witnessed the launch of several new models from existing players. Majority of

these have been in the four-stroke engine category for which the technology has come

from Japanese parents. Increasing product differentiation and competition has resulted

in new sub-segments emerging. The efficiency segment is currently the fastest growing

and constitutes four-stroke motorcycles. This has caused a dent in the demand for two-

stroke motorcycles, which is expected to further drop in the future. Taking in to

consideration the limited availability of mass transportation in rural and semi-urban

areas and suitability of motorcycles to these conditions, there are better chances of

growing the Motorcycle segment in the future.

The major growth in motorcycle segment will be coming from Japanese

segment and in particular four-stroke motorcycles, leading to marginalization of Indian

motorcycles. The Japanese motorcycles will continue to improve penetration in the

rural areas by providing additional features like luggage carrying provision etc. The

rush of new models in the small car market combined with up gradation of small car

users to new mid-size cars has lead to sharp drop in prices of second hand cars. In some

cases the price of a second hand car is just twice the price of a brand new motorcycle.

This will accelerate shift of two-wheeler users to cars and hence affect the demand for

high-end motorcycles. Therefore, in the coming years the high end motorcycle

manufacturers will have to take into consideration prices of second hand cars, while

positioning the vehicle. Nearly 80% of the motorcycle sales are of Japanese

motorcycles with the rest coming from Indian motorcycles. Eight major players Hero

Moto Corp, Bajaj Auto Ltd, LML, Kinetic Motors Limited, Escorts Yamaha Motors

Ltd, TVS LTD, Suzuki Motors and Royal Enfield control the Indian Motorcycle

industry. Among this Hero Honda is the market leader in the Motorcycle segment with

healthy market share of 48%, followed by the Bajaj Auto with market share of around

29%. There is a full dominance of two players Hero and Bajaj Auto at present in the

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Indian Motorcycle industry The manufacturers of Motorcycle manufacturer distinguish

there products based on power, fuel efficiency, maintenance requirement, Looks, style,

Comfort, price etc.

The Indo-Japanese segment is catered by three to five models from each of the players

viz Bajaj Auto Ltd., Hero , TVS, and Escorts Yamaha. But majority of the sales is of

100cc-125cc vehicles. The motorcycle segment will be broadened on the high price

front by introducing high powered bikes priced above Rs55000. These bikes have been

targeted at college going students who have a flavor for high-powered rides. To cater to

this segment, Hero launched CBZ, a 156cc four-stroke motorcycle, in March 1999.

It is priced around Rs 49000. 'Fiero' from TVS has been the one addition in this

list. Bajaj Auto is with its 220cc d pulsar, competition will hot up in the Japanese

motorcycle segment with players like LML and Kinetic Motors standing ready with

their offerings. More players are jostling for space in the market. Global majors —

Honda and Kawasaki already have a presence in the Indian market through their local

technological partners, while Yamaha has a full-fledged production base in India.

Suzuki, the other global major, which recently severed its ties with TVS Motor

Company, has now decided to set-up manufacturing facilities in the country. Apart

from international companies, there is growing competitive pressure from existing

domestic producers as well.

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OBJECTIVES OF THE STUDY

“Good better best, never let it rest till your good is better and your better is best”.

The objectives of the study are as follows:-

1) To know the factors which affect the consumer buying behavior.

2) To know the Advertisement source which attracts the consumers .

3) To know the Purpose of consumer behind the purchase of motorcycle.

4) To know the level of Satisfaction with their present motorcycle.

5) To know what are their preferences while buying a motorcycle.

6) To know the features of a motorcycle which fascinate them most.

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RESEARCH METHODOLOGY

Research Methodology comprises defining and redefining the problem, formulating hypothesis

or suggesting solution, collecting, organizing and evaluating the data, making deduction and

reaching to conclusions and determines whether the formulated hypothesis is right and wrong.

Research Methodology is a way to solve research in study and solving research problems alongwith logic behind them are defined through research methodology.

SAMPLE DESIGN

Sample design is that part of universe, which we select for the purpose of investigation. On the

basis of sample, we can predict and generalize the behavior of mass phenomena. The researcher

must decide the way of selecting sample. Sample can be either probability samples or non-

probability samples. So here in this project I have taken the non- probability samples of the

research works.

SAMPLE FRAME

It is also known as “Source of list” from which sample is to be drawn. The sample frame is as

following: Area of Tricity.

SAMPLE SIZE

It refers to the number of items to be selected from the universe to constitute a sample.

An optimum sample is one, which fulfills the requirement of efficiency, representative,

reliability, and flexibility. So sample size for comparsion study of Bajaj and Hero

MotoCorp is 150.And the sampling used here are convenient sampling.

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DATA COLLECTION

Primary Data:

Whatever the data I have collected, it is primary data which was collected with help of

a questionnaire by asking directly to the consumers.

a) Questionnaire:

For the above purpose and to get a better insight I needed to conduct a consumer

survey. I gave questionnaire to respondent so that they can fill it and return to me.

I preferred questionnaire method because it does not pressurize the consumer and

in this way he gives correct information about the questions, which are asked to

him in the questionnaire.

b) Direct Interview:

I have also conducted direct interview in some areas with consumer of Bajaj and

Hero MotoCorp. Why I have done so because my questionnaire was open-ended,

sorespondents could not express their views thoroughly but in personnel interview we

can do it much better than questionnaire.

Secondary Data:

I have also collected the secondary data for research work, which I have taken from

Bajaj and Hero MotoCorp’s internal records, trade and business publications, and

various sites related to Bajaj and Hero MotoCorp.

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TECHNIQUES USED FOR DATA ANALYSIS

Data collected would be analyzed by method of percentages. To analyze the data obtained with the help questionnaire following tools would be used:

Percentage, Graphs and Pie-Charts.

TOOLS USED FOR DATA COLLECTION

Questionnaire: A formulized instruments for asking information directly from a respondent consumer behavior, demographic characteristic, level of knowledge attitudes, beliefs, feelings.

Personal interview or face to face interview.

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LIMITATIONS OF THE STUDY

Although full efforts have been made in this study, still because of following limitations a more

detailed research is required to reach to the effective conclusion.

1) Research work is carried out in the local area of Chandigarh only, so the

findings may not applicable to the different other parts of the Country because

of Social and Cultural differences

2) Sample size is very small as compared to the population.

3) Personal biasness of consumer also affected the survey.

4) Time and Money constraints were also there.

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CHAPTER 2

15

INTRODUCTION TO COMPANIES

INTRODUCTION

Hero Motocorp Ltd

Type Public company

Traded asBSE: 500182NSE: HEROMOTOCOBSE SENSEX Constituent

Industry Automotive

Founded January 19, 1984

Founder(s) Brijmohan Lall Munjal

Headquarters New Delhi, India

Area served India, Sri Lanka

Key people Deya Varadh Sens (Chairman)

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Pawan Munjal (MD & CEO)

ProductsMotorcycles, Scooters, Three-Wheeler vehicles

Revenue 239.43 billion (US$4.36 billion)

(2012)

Net income23.78 billion (US$432.8 million)

(2012)

Total assets 60.58 billion (US$1.1 billion)

(2012)

Parent Hero Group

Website www.heromotocorp.com

Hero Motocorp Ltd., formerly Hero Honda, is an Indian motorcycle and scooter manufacturer

based in New Delhi, India. Hero Honda started in 1984 as a joint venture between Hero Cycles

of India and Honda of Japan.The company is the largest two wheeler manufacturer in India.The

2006 Forbes 200 Most Respected companies list has Hero Honda Motors ranked at #108.

In 2010, when Honda decided to move out of the joint venture,Hero Group bought the shares

held by Honda. Subsequently, in August 2011 the company was renamed Hero MotoCorp with a

new corporate identity. On June 4, 2012,Hero Motocorp approved a proposal to merge the

investment arm of its parent Hero Investment Pvt. Ltd. into the automaker. The decision comes

after 18 months of its split from Honda Motors.

Hero Honda has a reputation of being the most fuel-efficient and the largest selling

Indian motorcycle. Its commitment of providing the customer with excellence is self-

evident. A rich background of producing high value products at a reasonable price led

the world's largest manufacturer of motorcycles to collaborate with the world's largest

bicycle manufacturer.

It was this affinity in working cultures of Honda Motor Company of Japan and the Hero

Group that resulted in the setting up of Hero Honda Motors Ltd. A relationship so

harmonious that Hero Honda has managed to achieve indigenization of over 95 percent,

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a Honda record worldwide. Tactical promotions and excellent marketing helped Hero

Honda establish itself as an intelligent purchase. Its unique features like fuel

conservation, safety riding courses and mobile workshops helped the group reach in the

interiors of the country.

Finance services helped facilitate purchase, as did an efficient dealer network across the

country.

Well-entrenched in the domestic market, Hero Honda Motors Ltd. turned its attention

overseas, and exports have been steadily on the rise. Over the years, the Company has

received its share of accolades, including the National Productivity Council's Award

(1990-91), and the Economic Times - Harvard Business School Association of India

Award.

Hero Honda Motors Ltd is the World's largest manufacturer of motorcycles (by

quantity). Hero Honda is a 50:50 joint venture that began in 1984 between the Hero

group of India and Honda from Japan. It has been the world's biggest manufacturer of

2-wheeled motorized vehicles since 2001, when it produced 1.3 million motorbikes in a

single year. Hero Honda's Splendor+ is the world's largest selling motorcycle. Its 2

plants are in Dharuhera and Gurgaon, both in India. Third plant at Haridwar. It have

world class production facilities like Lean Manufacturing concept, more flexible lines

& Stream line material flow, within & proximity.

History

Hero MotoCorp was started in 1984 as Hero Honda Motors Ltd.

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1956—Formation of Hero Cycles in Ludhiana(majestic auto limited)

1975—Hero Cycles becomes largest bicycle manufacturer in India.

1983—Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed

Shareholders Agreement signed

1984—Hero Honda Motors Ltd. incorporated

1985—Hero Honda motorcycle CD 100 launched.

1989—Hero Honda motorcycle Sleek launched.

1991—Hero Honda motorcycle CD 100 SS launched.

1994 - Hero Honda motorcycle Splendor launched.

1997—Hero Honda motorcycle Street launched.

1999 - Hero Honda motorcycle CBZ launched.

2001 - Hero Honda motorcycle Passion and Hero Honda Joy launched.

2002—Hero Honda motorcycle Dawn and Hero Honda motorcycle Ambition launched.

2003—Hero Honda motorcycle CD Dawn, Hero Honda motorcycle Splendor plus, Hero

Honda motorcycle Passion Plus and Hero Honda motorcycle Karizma launched.

2004—Hero Honda motorcycle Ambition 135 and Hero Honda motorcycle CBZ*

launched.

2005—Hero Honda motorcycle Super Splendor, Hero Honda motorcycle CD Deluxe,

Hero Honda motorcycle Glamour, Hero Honda motorcycle Achiever and Hero Honda

Scooter Pleasure.

2007—New Models of Hero Honda motorcycle Splendor NXG, New Models of Hero

Honda motorcycle CD Deluxe, New Models of Hero Honda motorcycle Passion Plus and

Hero Honda motorcycle Hunk launched.

2008—New Models of Hero Honda motorcycles Pleasure, CBZ Xtreme, Glamour,

Glamour Fi and Hero Honda motorcycle Passion Pro launched.

2009—New Models of Hero Honda motorcycle Karizma:Karizma - ZMR and limited

edition of Hero Honda motorcycle Hunk launched

2010—New Models of Hero Honda motorcycle Splendor Pro and NewHero Honda

motorcycle Hunk and New Hero Honda Motorcycle Super Splendor launched.

2011—New Models of Hero Honda motorcycles Glamour, Glamour FI, CBZ Xtreme,

Karizma launched. New licensing arrangement signed between Hero and Honda. In

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August Hero and Honda parted company, thus forming Hero MotoCorp and Honda

moving out of the Hero Honda joint venture. In November, Hero launched its first ever

Off Road Bike Named Hero "Impulse".

2012-New Models of Hero Motocorp Maestro the Musculine scooter and Ignitor the

young generation bike are launched.

Termination of Honda joint venture

In December 2010, the Board of Directors of the Hero Honda Group have decided to terminate

the joint venture between Hero Group of India and Honda of Japan in a phased manner. The

Hero Group would buy out the 26% stake of the Honda in JV Hero Honda. Under the joint

venture Hero Group could not export to international markets (except Sri Lanka) and the

termination would mean that Hero Group can now export. Since the beginning, the Hero Group

relied on their Japanese partner Honda for the technology in their bikes. So there are concerns

that the Hero Group might not be able to sustain the performance of the Joint Venture alone.

The Japanese auto major will exit the joint venture through a series of offmarket transactions by

giving the Munjal family—that held a 26% stake in the company—an additional 26%. Honda,

which also has an independent fully owned twowheeler subsidiary—Honda Motorcycle and

Scooter India (HMSI)—will exit Hero Honda at a discount and get over $1 billion for its stake.

The discount will be between 30% and 50% to the current value of Honda's stake as per the price

of the stock after the market closed on Wednesday.

The rising differences between the two partners gradually emerged as an irritant. Differences had

been brewing for a few years before the split over a variety of issues, ranging from Honda's

reluctance to fully and freely share technology with Hero (despite a 10-year technology tie-up

that expires in 2014) as well as Indian partner's uneasiness over high royalty payouts to the

Japanese company. Another major irritant for Honda was the refusal of Hero Honda (mainly

managed by the Munjal family) to merge the company's spare parts business with Honda's new

fully owned subsidiary Honda Motorcycle and Scooter India (HMSI).

As per the arrangement, it will be a two-leg deal. In the first part, the Munjal family, led by

Brijmohan Lal Munjal group, will form an overseas-incorporated special purpose vehicle (SPV)

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to buy out Honda's entire stake, which will be backed by bridge loans. This SPV would

eventually be thrown open for private equity participation and those in the fray include Warburg

Pincus, Kohlberg Kravis Roberts (KKR), TPG, Bain Capital, and Carlyle Group.

Honda will continue to provide technology to Hero Honda motorbikes until 2014 for existing as

well as future models.

Hero MotoCorp

The new brand identity and logo of Hero MotoCorp were developed by the British firm Wolff

Olins. The logo was revealed on 9 August 2011 in London, to coincide with the third test match

between England and India.

Hero MotoCorp can now export to Latin America, Africa and West Asia. Hero is free to use any

vendor for its components instead of just Honda-approved vendors.

Company performance

During the fiscal year 2008-09, the company sold 3.7 million bikes, a growth of 12% over last

year. In the same year, the company had a market share of 57% in the Indian market. Hero

Honda sells more two wheelers than the second, third and fourth placed two-wheeler companies

put together. Hero Honda's bike Hero Honda Splendor sells more than one million units per year.

On 1 June 2012, Hero MotoCorp reported its highest ever monthly sales at 5,56,644 units in

May, registering a growth of 11.28%.

Logo of Hero Honda, as the company was known till Aug. 2011

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Growth

Hero experienced great growth throughout its early days. The Munjal family started a

modest business of bicycle components. By 2002 Hero Group had sold 86 million

bicycles producing 16000 bicycles a day. Today Hero has an assembly line of nine

different models of motorcycles available. It holds the record for most popular bike in

the world by sales for Its Splendor model. Hero Honda Motors Limited was established

in joint venture with Honda Motors of Japan in 1984, to manufacture motorcycles. It is

currently the largest producer of Two Wheelers in the world. Recently it has also

entered in scooter manufacturing, with its model PLEASURE mainly aimed at girls.

The growth of the Group through the years has been influenced by a number of

factors discussed below.

>>Just-in-Time Manufacturing

The Hero Group through the Hero Cycles Division was the first to introduce the

concept of just-in-time manufacturing. The Group boasts of superb operational

efficiencies. Every assembly line worker operates two machines simultaneously to save

time and improve productivity. The fact that most of the machines are either developed

or fabricated in-house, has resulted in low inventory levels.

In Hero Cycles Limited, the just-in-time inventory principle has been working since the

beginning of production in the unit. This is the Japanese style of production. In India,

Hero is probably the only company to have mastered the art of the just-in-time

inventory principle.

>>Labor relations

In Hero Group there is no organized labor union and family members of employees

find ready employment within Hero. The philosophy with regard to labor management

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is "Hero is growing, grow with Hero." Hero workers receive a uniform allowance, as

well as House Rent Allowance (HRA) and Leave Travel Allowance (LTA).

Extra benefits include medical check-ups not just for workers, but also for the

immediate family members. For the majority of the production workers, who are hired

through contractors, these benefits are out of reach.

>>Diversification

Throughout the years of enormous growth, the Group Chairman, Mr. Lal has actively

looked at diversification. A considerable level of vertical integration in its

manufacturing activities has been ample in the Group's growth and led to the

establishment of the Hero Cycles Cold Rolling Division, Munjal and Sunbeam

Castings, Munjal Auto Components and Munjal Showa Limited amongst other

component-manufacturing units.

Then there were the expansion into the automotive segment with the setting up of

Majestic Auto Limited, where the first indigenously designed moped, Hero Majestic,

went into commercial production in 1978. Then came Hero Motors which introduced

Hero Puch, in collaboration with global technology leader Steyr Daimler Puch of

Austria. Hero Honda Motors was established in 1984 to manufacture 100 cc

motorcycles.

The Hero Group also took a venture into other segments like exports, financial services,

information technology, which includes customer response services and software

development. Further expansion is expected in the areas of Insurance and

Telecommunication.

The Hero Group's phenomenal growth is the result of constant innovations, a close

watch on costs and the dynamic leadership of the Group Chairman, characterized by a

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culture of entrepreneurship, of right attitudes and building stronger relationships with

investors, partners, vendors and dealers and customers.

COMPANY PROFILE

Founder Munjal Brothers: Mr. Satyanand Munjal, Mr. Brijmohan Lal Munjal and Mr. O. P. Munjal.

Year of Establishment 1984 (The Hero Group was established in 1956)

Mission "Its our mission to strive for synergy between technology, systems and human resources, to produce 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."

- Mr. Brijmohan Lal Munjal, Chairman & MD

Foundational Work Before the establishment of the Hero Group in 1956, Munjal Brothers use to manufacture bicycle components in the early 1940's.

Industry Automotive - Two Wheelers

Business Group The Hero Group

Capitalization Ratio Hero Group - 26% Honda Motor Co., Ltd. - 26% Others - 48% (listing)

Listings & its codes BSE - Code: 500182 NSE - Code: HERO Bloomberg - Code: HH@IN

No. of Sales Outlets 1500+

Joint Venture The Hero Group (India) with Honda Motor Co., Ltd. (Japan)

Registered & Corporate Office

34, Community Centre Basant Lok, Vasant Vihar New Delhi - 110057Tel.: +(91)-(11)-26142451 - 59

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Fax: +(91)-(11)-26143321 / 3198 / 1830; 26152453

Website www.heromotocorp.com

GROUP COMPANIES

No. Name of Company

1 Hero Motocorp Limited

2 Hero Cycles Limited

3 Hero Finlease Limited

4 Munjal Showa Limited

5 Sunbeam Auto Limited

6 Hero Financial Services Limited

PRODUCTS

Hero Moto Corp Limited is currently manufacturing the following models of two

wheelers:

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BIKES

Hero CD Super Dawn Hero CD Deluxe Hero Splendor Hero Splendor NXG Hero Splendor+ Hero Passion Hero Passion Plus Hero Glamour Hero Glamour-FI Hero Achiever Hero Karizma Hero CBZ Hero CBZ* (pronounced CBZ-Star) Hero CBZ X-Treme Hero Karizma ZMR

SCOOTERS

Hero Pleasure

MOST SELLING BIKES OF HERO HONDA

HERO SPLENDOR+

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HERO PASSION PRO

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Social Responsibility

Hero Group's humane approach is manifest in all aspects of commercial

production. The Group undertakes various projects and activities of socio-humanitarian

nature to contribute to the National Mainstream. Group Companies, Hero Cycles

Limited and Hero Moto Corp Limited have been pioneers within the Group, in

undertaking socially-productive-work-of-myriad.

Healthcare

Raman Munjal Memorial Hospital is a 100-bed hospital with a well-equipped

laboratory, a fully functional operation theatre, an out patient department as well as a

casualty section.

A fully equipped mobile clinic provides comprehensive health care to the rural masses.

The medical centre on the factory premises of the Group Companies is open for the

sub-urban and rural communities of the surrounding areas. The medical centre is also

equipped to provide First Aid and ambulance facility for road accident victims.

Other efforts, under the auspices of Hero Moto Corp Limited include:

Eye Camps: With over 15,000 patients examined and about 1700 cataract operations

performed so far, these Eye Camps have also aided patients with free accommodation,

food and medicines.

Family Planning Camps: Held since 1993 at the Civil Hospital, Rewari and Bawal,

these camps offer monetary incentives to the masses to adopt family planning

measures.

Blood Donations Camps: These camps are being organised on a regular basis since

1992. 464 units have been donated to Indian Red Cross Society in the last camps.

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ENT Check up Camps: Conducted by specialists from AIIMS, these camps have been

organized-since-November-1997.

Heart Check-up Camps: Since July 1988, free camps are being organized in

collaboration with Escorts Heart Institute and Research Centre, where specialized

diagnosis methods like Echocardiography and ECG are used.

Rehabilitation Camps: Conducted with the assistance of the District Rehabilitation

Centre, Red Cross Society, Rewari, these camps help physically challenged villagers to

rehabilitate and re-employ themselves. Many patients have found a new lease of life on

account of the physical-aids-given-to-them.

Dermatology Camps: Held for the first time in October 1999, the camp saw around

460 patients, where 365 patients underwent treatment for various skin ailments.

Furthermore, three Acupressure camps were also held in January 2000 where 450

persons were offered treatment-and-advice.

Immunization Programmes: All HMCL employees and their families benefit from

immunization programmes for Hepatitis and Typhoid fever. More than 6,000 people

have been immunized so far. The company is also an active participant in the National

Pulse Polio-immunization-programmes.

AIDS Awareness Programmes: In association with CIL Hero has done immense work

to promote awareness about AIDS.

Education

The Raman Kant Munjal Trust fund, instituted in 1992, has helped set up a

primary school in Dharuhera. Today the Raman Kant Munjal Vidya Mandir has

grown into one of the best senior secondary schools in Daruhera. The school is

affiliated to the Central Board of Secondary Education.

Engineering

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Innovative engineering for Hero means using the right and specifically designed

technology that meets the Indian consumer's requirements as well as testing road

conditions. This is exemplified by Honda's reliable 4 stroke engines and their amazing

fuel efficiency. No wonder then, that Hero has manufactured 4-stroke engines ever

since its inception in 1985. Hero has received ISO 14001 certification for

Environmental Conservation.

Environment

Hero Group Companies have strived to provide environmental friendly products as well

as manufacturing units. Hero Honda's "We Care" programme was initiated with a focus

on environmental conservation and awareness, and now extends its influence to multi-

dimensional activities, for the socio-economic betterment of society.

The 4-stroke Hero motorcycles undergo a high technology process to meet the most

demanding of pollution norms at every level. Hero mopeds and motorcycles having the

lowest pollution emission levels in their categories on Indian roads.

KEY MILESTONES OF HERO

Hero success saga contains an element of spirit and enterprise; of achievement

through grit and determination, coupled with vision and meticulous planning.

Year Event

1983 Joint Collaboration Agreement with Honda Motor Co., Ltd., Japan signed.

Shareholders Agreement signed

1984 Hero Honda Motors Ltd. Incorporated

1985 First motorcycle "CD 100" rolled out

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1987 100,000th motorcycle produced

1989 New motorcycle model - "Sleek" introduced

1991 New motorcycle model - "CD 100 SS" introduced

500,000th motorcycle produced

1994 New motorcycle model - "Splendor" introduced

1,000,000th motorcycle produced

1995 Hero Corporate Services Limited as the service segment for the Hero Group Companies,

ancillaries, suppliers, dealers and other associates

1996 Hero Winner, a large-wheeled scooter was introduced by Hero Motors Limited with a

choice of 50 cc and 75 cc engines.

1997 New motorcycle model - "Street" introduced

Hero Honda's 2nd manufacturing plant at Gurgaon inaugurated

1998 2,000,000th motorcycle produced

1999 New motorcycle model - "CBZ" introduced.

Raman Munjal Memorial Hospital inaugurated - A Hospital in the memory of founder

Managing Director, Mr. Raman Kant Munjal

2000 4,000,000th motorcycle produced.

31

Splendor declared 'World No. 1' - largest selling single two-wheeler model.

"Hero Honda Passport Programme" - CRM Programme launched.

2001 New motorcycle model - "Passion" introduced.

One million production in one single year.

2002 New motorcycle model - "Dawn" introduced.

New motorcycle model - "Ambition" introduced.

Appointed Virender Sehwag, Mohammad Kaif, Yuvraj Singh, Harbhajan Singh and

Zaheer Khan 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, and 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.

Splendor - World's largest selling motorcycle crossed the 5 million mark.

New motorcycle model - "CBZ*" introduced.

Total sales crossed a record of 10 million motorcycles.

2005 Hero Honda 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.

32

2006 Hero Honda is the World No. 1 for the 5th year in a row. Hero Honda launched Glamour

FI - India's first Fuel Injection motorcycle. Hero Honda rolled out its first scooter, the

100cc “Pleasure” and launched 22 women-exclusive scooter showrooms “Just4her”

across the country

2007 HERO HONDA WORLD NO 1 FOR SIX YEARS IN A ROW

Turnover increases 15% to Rs 2700 crore for Q3 2006-07. Turnover increased from Rs

2351 crore to Rs 2700 crore, a healthy growth of 15% per cent.

33

2009-10

GROWTH STORY CONTINUES AT HERO HONDA

WITH EBIDTA AT 14.47 PER CENT IN Q3, 2009-10

Highlights of Q3, FY'09-10

Corporate Performance:

Total turnover (Net sales & Other Operating income)  Rs 2881.27 crores, growth

of 4.77 per cent

Net profit after tax at Rs 300.42 crores, growth of 9.24 per cent

Achievements:

Crossed the landmark retail sales of more than six lakh two-wheelers in a month

in October

Growth of 11 per cent in two-wheelers despatch sales in the first nine months

(April-December) this financial year

Over 56 per cent share in domestic motorcycle market

New Launches:

Launched seven new models this quarter - New CD Deluxe, New Passion Pro,

Splendor NXG, New Pleasure,Hero Honda street, New Glamour, New Glamour

FI and the all new CBZ X-treme.

2010 New model Splendor Pro launchedLaunch of new Super Splendor and New Hunk

2011 New licensing arrangement signed between Hero and Honda (Hero Honda is renamed as Hero)Launch of new refreshed versions of Glamour, Glamour Fi, CBZ Xtreme, KarizmaCrosses the landmark figure of 5 million cumulative sales in a single year

34

35

INTRODUCTION

Bajaj Auto is a major Indian automobile manufacturer. It is India's largest and the

world's 4th largest two- and three-wheeler maker. It is based in Pune,

Maharashtra, with plants in Waluj near Aurangabad, Akurdi and Chakan, near

Pune. Bajaj Auto makes and exports motor scooters, motorcycles and the auto

rickshaw.

Over the last decade, the company has successfully changed its image from a scooter

manufacturer to a two wheeler manufacturer. Its product range encompasses

Scooterettes, Scooters and Motorcycles. Its real growth in numbers has come in the last

four years after successful introduction of a few models in the motorcycle segment.

The company is headed by Rahul Bajaj whose worth more than US$1.5 billion.

Company's history

Bajaj Auto is a major Indian automobile manufacturer. It is India's largest and the

world's 4th largest two- and three-wheeler maker. It is based in Pune, Maharashtra, with

plants in Akurdi and Chakan (near Pune),Waluj (near Aurangabad) and Pantnagar in

Uttaranchal. Bajaj Auto makes and exports motor scooters, motorcycles and the auto

rickshaw.

36

Bajaj Auto came into existence on November 29, 1945 as M/s Bachraj Trading

Corporation Private Limited. It started off by selling imported two- and three-wheelers

in India. In 1959, it obtained license from the Government of India to manufacture two-

and three-wheelers and it went public in 1960. In 1970, it rolled out its 100,000th

vehicle. In 1977, it managed to produce and sell 100,000 vehicles in a single financial

year. In 1985, it started producing at Waluj in Aurangabad. In 1986, it managed to

produce and sell 500,000 vehicles in a single financial year. In 1995, it rolled out its ten

millionth vehicles and produced and sold 1 million vehicles in a year.

COMPANY PROFILE

Founder Jamnalal Bajaj

Year of Establishment 1926

Industry Automotive - Two & Three Wheelers

Business Group The Bajaj Group

Listings & its codes BSE - Code: 500490; NSE - Code: BAJAJAUTO

Presence Distribution network covers 50 countries.Dominant presence in Sri Lanka, Bangladesh, Columbia, Guatemala, Peru, Egypt, Iran and Indonesia.

Joint Venture Kawasaki Heavy Industries of Japan

Registered & Head Office

Akurdi, Pune – 411035, IndiaTel.: +(91)-(20)-27472851, Fax: +(91)-(20)-27473398

37

Works Akurdi, Pune 411035 Bajaj Nagar, Waluj Aurangabad 431136 Chakan Industrial Area, Chakan, Pune 411501

E-mail rahulbajaj@bajajauto.co.in

Website www.bajajauto.com

GROUP COMPANIES

Bajaj Auto is the flagship of the Bajaj group of companies. The group comprises

of 26 companies and was founded in the year 1926. The companies in the group

are:

38

39

Bajaj Auto Ltd. Mukand International Ltd.

Mukand Ltd. Mukand Engineers Ltd.

Bajaj Electricals Ltd. Mukand Global Finance Ltd

Bajaj Hindustan Ltd Bachhraj Factories Pvt. Ltd

Maharashtra Scooters Ltd. Bajaj Consumer Care Ltd.

Bajaj Auto Finance Ltd. Bajaj Auto Holdings Ltd.

Hercules Hoists Ltd. Jamnalal Sons Pvt. Ltd.

Bajaj Sevashram Pvt Ltd. Bachhraj & Company Pvt. Ltd.

Hind Lamps Ltd. Jeevan Ltd.

Bajaj Ventures Ltd. The Hindustan Housing Co Ltd.

Bajaj International Pvt Ltd. Stainless India Ltd.

Hind Musafir Agency Pvt Ltd. Bombay Forgings Ltd.

Bajaj Allianz General Insurance Company Ltd.

Bajaj Allianz Life Insurance Company Ltd.

PRODUCTS

40

Some of the models that Bajaj makes (or has made) are:

SCOOTERS

Bajaj Kristal DTSi, Bajaj Bravo, Bajaj Wave DTSi

Motorcycle (Presently available in market)

Bajaj Avenger

Bajaj CT 100

Bajaj Discover

Bajaj Discover DTSi

Bajaj Platina

Pulsar

Pulsar 180 DTS-I UG

Pulsar 150 DTS-I UG

Pulsar 200 Cc

Pulsar 220 DTS-Fi

Ninja 250R

Upcoming Models

Bajaj Blade

Bajaj Sonic

Discontinued Models

Bajaj Sunny Bajaj Chetek Bajaj Super

Bajaj Wave

Bajaj Legend

41

Bajaj Bravo

Kawasaki Eliminator

Bajaj Kawasaki 4s Champion

Bajaj Kawasaki KB 100 RTZ

Bajaj Boxer

Bajaj Caliber

42

MOST SELLING BIKES OF BAJAJ

BAJAJ PULSAR

BAJAJ DISCOVER

43

SOCIAL RESPONSIBILITY

Bajaj in the community: Bajaj Auto is committed to nation-building and

contributing to the uplift and development of the weaker sections of society. This is a

legacy of our founders, Jamnalal and Kamalnayan Bajaj. Because of their close links

with Mahatma Gandhi and the freedom struggle, they sincerely believed that as

businessmen they were trustees of the community and the profits they earned must be

ploughed back for the development of the community.

Jankidevi Bajaj Gram Vikas Sanstha (JBGVS)

Samaj Seva Kendra

Kamalnayan Bajaj Hospital

Jankidevi-Bajaj-gram-Vikas-Sanstha-(JBGVS):

Bajaj Auto’s philanthropic activities among the rural poor are carried out by a

trust, the Jankidevi Bajaj Gram Vikas Sanstha (JBGVS). This trust was formed

15 years ago by Ramakrishna Bajaj in memory of his mother, Jankidevi Bajaj.

JBGVS acts as a catalyst to development at the grass root level in 32 villages

around Bajaj Auto’s Pune and Aurangabad plants.

Vision-Statement-of-JBGVS:

JBGVS is a non-political and secular organization, which strives to improve the

quality of life of the rural poor by creating self employment opportunities at the

grass-root level, through the use of appropriate technologies, in harmony with

nature.

44

Focus

The trust initiates sustainable, integrated development through long term projects

in rural health, hygiene and sanitation, education and adult literacy, improving

agricultural and livestock yield, watershed development and women’s empowerment.

Through its poverty alleviation schemes, the trust provides micro credit and income

generation opportunities for the poor. These projects have a positive impact on the

quality of rural living standards.

Under the auspices of the ‘model village scheme’ of the Maharashtra Government,

JBGVS has assisted the development of several villages in the last five years. Under

this scheme, NGOs, public institutions, colleges, hospitals, local self-government

bodies and state government departments for agriculture and horticulture, work together

to bring about a holistic and sustainable improvement in rural living conditions.

Samaj-Seva-Kendra:

Social activities in semi urban areas on the outskirts of Pune are undertaken by the

Samaj Seva Kendra (SSK), set up by Bajaj Auto in 1975. SSK provides local industrial

workers with opportunities for self development, education, healthcare, sports and

recreation. It involves local institutions and municipal bodies, local Rotary Clubs and

NGOs in its activities.

SSK has helped empower wives of factory workers by providing them earning

opportunities. Last year, its Laxmi Mahila Cooperative Credit Society (started in 1990)

earned Rs 1 Lakh by supplying chapattis, prepared by its members, to industrial

canteens. SSK also organizes weekly medical consultation and health awareness

programmes, child and adult education, vocational training and personality

development programmes, leisure and recreational facilities for women.

45

Kamalnayan Bajaj Hospital:

A modern, 135-bed hospital at Aurangabad in Western Maharashtra, the Kamalnayan

Bajaj Hospital provides high-quality secondary and tertiary healthcare and specialist

facilities under one roof.

Its panel of renowned full-time consultants provides comprehensive multi-specialty

care and advanced surgical procedures such as coronary artery bypass, beating heart

graft surgeries, joint replacements, complex neurosurgical procedures, kidney

transplants. The hospital's well-designed suite of five operation theatres is equipped to

cater to complex surgical procedures.

The hospital has state-of-the-art facilities like a cardiac catheterization lab, advanced

spiral computer topography (CT) scanner, a color Doppler — all from GE Medical

Systems — a Mac 5000-series stress test machine, a holter monitor from GE-

Marquette, ultra-touch dialysis equipment from Baxter and an advanced reverse

osmosis plant.A well-equipped, 26-bed multi-specialty intensive care unit (ICU)

provides emergency and post-operative care that is on par with the best in the country.

The hospital’s facilities range from spacious and hygienically maintained general wards

with all essential amenities to large deluxe rooms furnished with sofas, telephones,

refrigerator, television and a small kitchenette. For relatives of patients, the hospital

provides guesthouse-facilities-and-a-professionally-managed-cafeteria.

The hospital offers a specially designed health insurance and annual medical check-up

plan in association with Bajaj Allianz General Insurance, which provides cash-less

hospitalization and treatment.

46

KEY MILESTONES OF BAJAJ AUTO LIMITED

Year Milestones

2008 Bajaj Launches XCD 135 DTS-Si!

2007

September

Launch of XCD DTS-Si

June National Launch of 220 cc Pulsar DTS-Fi.

April Bajaj Auto Commissions New Plant at Pantnagar, Uttarakhand

February 200 cc Pulsar DTS-I launched

January Bajaj Kristal DTS-I launched

20066

April Bajaj Platina launched

2005

December Bajaj Discover launched

June Bajaj Avenger DTS-I launched

February Bajaj Wave DTS-I launched

42004

October Bajaj Discover DTS-I launched

August New Bajaj Chetek 4 stroke with Wonder Gear launched

May Bajaj CT100 Launched

January Bajaj unveils new brand identity, dons new symbol, logo and brand line

47

32003

October Pulsar DTS-I is launched

July Bajaj Wind 125, The World Bike, is launched in India.

February Bajaj Auto launched its Caliber115 "Hoodibabaa!" in the executive motorcycle segment.

12001

November Bajaj Auto launches its latest offering in the premium bike segment ‘Pulsar’

January The Eliminator is launched

02000 The Bajaj Saffire is introduced.

1999 Caliber motorcycle notches up 100,000 sales in record time of 12 months and

Production commences at Chakan plant.

81998

June 7th Kawasaki Bajaj Caliber rolls out of Waluj.

July 25th Legend, India’s first four-stroke scooter rolls out of Akurdi.

October Spirit launched

1997 The Kawasaki Bajaj Boxer and the RE diesel Auto rickshaw are introduced

1995

November 29

Bajaj Auto is 50

Agreements signed with Kubota of Japan for the development of diesel engines for three-wheelers and with Tokyo R&D for ungeared Scooter and moped development

The Bajaj Super Excel is introduced while Bajaj celebrates its ten millionth vehicle

One million vehicles were produced and sold in this financial year.

1994 The Bajaj Classic is introduced.

48

1991 The Kawasaki Bajaj 4S Champion is introduced

1990 The Bajaj Sunny is introduced.

1986 The Bajaj M-80 and the Kawasaki Bajaj KB100 motorcycles are introduced and 500,000 vehicles produced and sold in a single financial year.

1985

November 5

The Waluj plant inaugurated by the erstwhile President of India, Shri Giani Zail Singh

Production commences at Waluj, Aurangabad in a record time of 16 months

11984

January 19

Foundation stone laid for the new Plant at Waluj, Aurangabad

11981 The Bajaj M-50 is introduced.

71977

The Rear Engine Auto rickshaw is introduced.

Bajaj Auto achieves production and sales of 100,000 vehicles in a single financial year.

61976 The Bajaj Super is introduced

1975 BAL & Maharashtra Scooters Ltd. joint venture

71972 The Bajaj Chetek is introduced.

11971 The three-wheeler goods carrier is introduced

1970 Bajaj Auto rolls out its 100,000th vehicle

1960 Bajaj Auto becomes a public limited company. Bhoomi Poojan of Akurdi Plant

1959 Bajaj Auto obtains licence from the Government of India to manufacture two- and three-wheelers

41948 Sales in India commence by importing two- and three-wheelers.

49

Bajaj to Launch new Bikes in 2011

Bajaj Auto said that it will launch new bikes in India in 2011. The company

would launch one bike every month for next 6 months starting Jan 2009.

Bajaj has recorded 37 percent fall in motorcycle sales during this November’08.

The company doesn’t predict any increase in Dec 2008 either as the dealers have

rejected to pickup any additional deliveries because of inventory pile-up.

The expecting bikes include - all new facelifted Bajaj-KTM, Pulsar 250cc, new Pulsar

200 FI,New Boxer 150 cc, a new variant of Discover, XCD sprint and Blade scooter.

Bajaj also plans to launch its new low cost product (christened as Steel).

Bajaj is offering the cheaper finance plans from Bajaj Auto Finance Ltd. They will

finance all vehicles bought from Bajaj dealers and will provide cheaper loans to its

clients.

50

CONSUMER BEHAVIOR

Introduction

The actions a person takes in purchasing and using product and services,

including the mental and social processes that precede and follow these actions. The

behavioral sciences help answer questions such as:

Why people choose one product or brand over another, how they make these choices,

and How companies use this knowledge to provide value to consumers.

Psychology + Marketing = Consumer Behavior

Consumer Behavior is defined as "the dynamic interaction of affect and cognition,

behavior, and environmental events by which human beings conduct the exchange

aspects of their lives." More generally, Consumer Behavior is the psychology behind

Marketing and the behavior of consumers in the Marketing environment. Two major

psychological disciplines come into play when observing and trying to explain

Consumer Behavior. The first is Cognitive Psychology. Cognitive Psychology is the

study of all knowledge related (mental) behaviors. The second psychological discipline

that has theories to explain certain phenomenon of Consumer Behavior is Social

Psychology. Social Psychology is "the study o the manner in which the personality,

attitudes, motivations, and behaviors of the individual influence and are influences by

social groups. The Affect and Social Influence and Reference Groups links are two

important topics studied in social psychology that have an important impact on

Consumer Behavior.

A consumer is a living bundle or needs and to a great extent he dictates the nature of

products to be made, distribution channels to be used and prices. It is paramount for the

marketers to know the consumer needs and wants and what he is ready to pay for them.

51

This helps in deciding about the marketing mix i.e. product, price, place and promotion.

The study of consumer behavior offers the marketers an insight into the purchase

decision-making process. Accordingly, he can chalk out a strategy so as to reap

maximum benefit from it.

CONSUMER DECISION-MAKING PROCESS

Five stage model of Consumer Buying Process

Problem Recognition:-

The starting point of consumer buying process is the Problem recognition. Problem

recognition is the awareness of the want or a desire or a consumption problem without

whose satisfaction the consumer feels restless and tension charged i.e. he or she feels

that a desire or want has arisen, which has to be satisfied.

52

Problem Recognition

Information Search

Evaluation of Alternatives

Purchase Decision

Post Purchase Behavior

Information Search:-

A need aroused and recognized can be satisfied only when the product or service is

available. Consumer interest is indicated in the consumer’s willingness to seek further

information about product or service. Since there are varieties of products and he seeks

to have maximum satisfaction, he searches relevant information. Consumers have many

alternative sources of information to tap such as friends, relatives, neighbors, salesman,

dealers, advertisements etc.

Evaluation of Alternatives:

Its consumer’s deep interest in the product or service that paves the way for evaluation.

The evaluation is the stage of the mental trial of the product. Once he evaluates, he

develop the intention to accept or reject a given product or service. The final purchase

depends on the relative strength of the positive intention to buy. In evaluation of

alternatives many values are taken into consideration like product characteristics, brand

image etc.

Purchase Decision: -

It’s the positive intention of the consumer that leads to a purchase decision. Decision to

purchase implies consumer commitment for a product or a service. Practically it is the

stage in which consumer is taken into a purchase of the product which is selected by the

consumer in the earlier stages.

Post Purchase Behavior:

Post purchase behavior reaction stands for the behavior of a consumer after a

commitment to product has made. This post purchase behavior may be a set of positive

53

or negative feelings. Positive feelings go toward satisfaction and negative feelings go

for dissatisfaction.

FACTORS AFFECTING THE MOTORCYCLE PURCHASE

The motorcycle purchase decision is affected by the personality and life style of an

individual as well as the product features. On the basis of this they can be divided

personal into personal and product factors.

Personal Factors:

Personal factors are related to individual traits and personality characteristics. They

differ form person to person and affect the consumer perception, motivation and

attitude formation.

Product Factors:

Product characteristics affect the final purchase decision of the consumer / buyer.

Before purchasing any buyer or customer gives due consideration to its physical

characteristics and the services provided.

1. Availability of Finances:

This factor has a strong bearing on the purchase decision. An individual will first of

all analyze the available resources including his income and saving. If these fall

short of the required amount, he will have to ascertain the sources of finance open

to him (example installment payment; zero% loans by various banks and companies

etc.)

54

2. Product Features:

A consumer is affected by the product characteristics its, Looks. Pick Up, Fuel

Efficiency etc. this known as “effective appeal” There can be emotional for a

particular purchase decision. An individual may opt for a particular brand if he

thinks it adds to his prestige. This is known as “symbolic appeals”

3. Brand Image:

There is cut throat competition in the motor cycle market. The leaders in this arena

are Hero Honda and Bajaj. Brand preference and consumer regarding quality; looks

distribution networks, after sale services and supporting network.

55

CHAPTER 3

56

COMPARISION OF HERO MOTOCORP V/S BAJAJ

Bajaj Auto (BAL) and Hero MotoCorp (HMCL) together have 80% of market share in the

domestic motorcycle segment. Interesting both the companies are also Sensex participants with a

weight of 2.99%. The growth angle to the companies is that they have exposure to the rural

segment where there is the next wave of growth.

CATEGORIES:

The distinctive feature of their business is that BAJAJ has three wheeler categories. BAJAJ

also derives exports revenues which forms a major part of its revenues. HERO also has exports

revenues but it does not have any three wheeler category.

BRANDS:

In the highly competitive market, both the companies have a long list of brands. BAJAJ has a

top brand Pulsar while HERO also has brands like CBZ, Karizma, and Splendor etc. Over

the years HERO has played volume game while BAL has placed most of its brands in the

premium segment. BAJAJ also markets foreign brands in India. HERO on the other hand is also

expected to enter in the premium segment and has sourced the high end technology in

partnership with a US based company Erik Buell Racing (EBR).

KEY AREAS:

On the financial front HERO has shown a volume as well as revenue growth over the past few

years and in that terms it has outpaced the industry as well as its rival BAJAJ. Bajaj on the other

hand is more profitable and has show a very good margin improvement in last 5 years.

57

STATICS:

For the quarter ended June 2012, Bajaj Auto sold 1,078,971 units - a growth of six per cent

over the previous quarter. However, there was a drop of 1.3 per cent when compared with June

2011. Hero on the other hand sold 1,642,292 registering a growth of 4.5 per cent over the

previous quarter and a 7.4 per cent growth over the same quarter in 2011.

NET SALES:

Net sales at Bajaj Auto stood at Rs 4,713.64 crore in June 2012, a growth of 4.4 per cent over

March 2012 and 3.93 per cent over June 2011. Hero MotoCorp posted sales of Rs 6,207.78

crore growing by 4.11 per cent over March 2012 while it posted a more robust 10 per cent as

compared to June 2011.

REALISATION:

Average per unit realisation stood at Rs 43,686 for Bajaj Auto on account of a better product

mix, while the same figure for Hero was at Rs 37,799.

EXPORT:

Exports sales for Hero stood at 44,665 a gain of 7.4 per cent over previous quarter, while Bajaj

Auto posted much higher numbers at 364,134 in June 2012, though the growth rate was a

similar figure of seven per cent. Bajaj Auto has a much stronger presence in Africa and Sri

Lanka, but was impacted by unrest in Egypt and a hike in excise duty in Sri Lanka.

OPERATING MARGIN:

Bajaj Auto is operationally more efficient with its operating margin being at 19.4 per cent

as compared to 15.1 per cent for Hero in the quarter under consideration. The main reason for

better operating margin can be seen in the raw material to sales ratio. In case of Bajaj Auto for

every Rs 100 of sales it consumes Rs 67.9 worth of raw material, while Hero consumes more at

58

Rs 75.2. Part of the reason of higher raw material for Hero is that it consumes some imported

components.

TAX RATE:

At the net profit level, Bajaj Auto posted a 7 per cent decline over the previous quarter at Rs

718.4 crore and a 1 per cent growth over previous year on account of higher effective tax rate

which moved up to 29.5 per cent for June 2012 as compared to 25 per cent in earlier periods.

Hero, on the other hand, posted a profit of Rs 614.46 crore growing by 10.3 per cent over

previous year and 1 per cent over previous quarter after providing for tax at a rate of 16.25 per

cent against 19.2 per cent in March 2012.

VALUATION:

On valuations, Bajaj Auto trades at 14 times its trailing one-year earnings, while Hero trades

at 17 times reflecting its higher market share in India

As sales and profit growth has tapered off from levels seen earlier indicating that Indian markets

have matured, both companies are now looking at global markets. Hero has indicated that it

plans to touch an export volume of 1 million units by FY17 from its current level of nearly

100,000 a year. It intends to increase its export sales with launches in Africa and South America.

Bajaj, on the other hand, is also aggressively pushing export sales as can be seen from its

strategy of reducing prices in Sri Lanka, after the local government increased excise duties.

It is clear that the two companies will continue to compete aggressively against each other with

new product launches. But the more interesting battle and one which can decide the ultimate

leader will be fought on foreign soils where Bajaj has the lead as of now.

59

Both the companies are very competitive to eachother. The main bike of Bajaj is Bajaj Pulsar while that of hero motocorp is Hero CBZ XTREME. After the comparision between the profiles of the two companies, here given is the comparision between the main bikes of the two companies.

BAJAJ PULSAR 150 DTSi HERO MOTOCORP CBZ XTREME

★★★✭✰

★★★★✭

68,400 rupees 72,300 rupees50-55 50-55

 Specifications Summary :Engine Displacement (cc) 149.0 cc, 4 Stroke, DTSi, Air cooled 149.2 cc, 4 Stroke, Air cooledMaximum Power (bhp) 14.09 @ 8500 14.4 @ 8500Maximum Torque (Nm) 12.76 @ 8500 12.8 @ 6500Top speed (kmph) 118 110 

Details :Acceleration 0-60 km 5 5Gear Shift Pattern 1 down 4 up 1 down 4 upStart System Kick / Electric Self / KickTank Capacity (Reserve) 15 (3.2) L 12.3 (1.5) L 

 Dimensions :Length (mm) - 2080Width (mm) - 765Height (mm) - 1145Ground Clearance (mm) 155 145 

60

 Chasis :

Front Suspension Telescopic, 135mm strokeTelescopic, Hydraulic shock absorbers

Rear Suspension Triple Rated Spring 5 step adjustable HydraulicFront Tyre 90/90 x 17 – tube 2.75 x 18-42 pRear Tyre 100/90 x 17 – tube 100/90 x 18-56 p tuff-up tubeFront Brake Type Disk - 240mm Disk - 240mm

Rear Brake Type Drum - 130mmInternal expanding shoe type - 130mm

61

CHAPTER 4

62

DATA ANALYSIS

Q (1): Income Group (Monthly In Rupees)

Income Group(Monthly in Rupees) 0-10,000 10,000-15,000 15,000-20,000 20,000 or More

Number of Respondents

79 34 29 7

Interpretation:-

From the above chart it is clear that majority of respondents i.e. 79 have motorcycle

whose monthly income lies between 0- 10,000 Rupees. 34 respondents lies between

Rs.10,000-15,000 income groups, 29 respondents lies between income group

15,00020,000 Rupees and very small group of respondents who have motorcycle i.e. 7

lies between income group more than Rupees 20,000.

63

Q (2): You belong to which category of society?

Category Professional Student Serviceman Businessman

Number of Respondents

29 43 56 22

Interpretation: -

In the above chart it shows the categories of society that include 29 respondents are

professional (include Lawyers, Doctors, CA`s), 43 respondents are students, 56

respondents are serviceman and 22 respondents are those who run their own business.

64

Q (3): Among these two which company’s motorcycle do you have?

COMPARATIVE STUDY

Interpretation: -

Out of 150 respondents, 89 have Hero motorcycles and rest of them i.e. 61 respondents

has Bajaj motorcycles. It shows that majority of respondents like Hero Company

motorcycles.

65

Company’s Name Hero Bajaj

Number of Respondents 89 61

Q (4): Which of the following motorcycle do you have?

Motorcycle Name

CBZ Passion Plus

Splendor Discover Pulsar Platina Others

Number of Respondents

5 18 51 21 31 19 5

Interpretation:-

Out of Hero motorcycles 51 respondents have Splendor which is leader in Hero

motorcycles then 18 respondents have Passion Plus ,5 respondents have CBZ and in

66

case of Bajaj 21 respondents have Discover ,31 respondents have Pulsar , 19

respondents have Platina and 5 respondents have other motorcycle( it include 1 Hero

CD 100,1 Hero Dawn,2Bajaj Caliber ,1 Bajaj CT 100).

Q (5): How long you have been driving your motorcycle?

Years 0-1 year 1-3 Year 3-5 year More than 5 Year

Number of Respondents

37 63 42 8

Interpretation: -

Out of the 150 respondents 63 respondents are those who have been driving their

motorcycle for last 3 years, 37 respondents are those who recently bought the

67

motorcycle,, 42 respondents are those who have been driving their motorcycle for last

5 years and only 8 respondents are those who have been driving their motorcycle for

more than last 5 years.

Q (6): Which factor influence you to buy this motorcycle?

Factor Brand Name

Price Status Product Design

Resale Value

Comfort Functional Performance

Number of Respondents

30 40 18 12 26 14 10

68

Interpretation: -

In the above chart majority of respondents i.e. 27% respondents bought due to the price

factor, 20% bought due to the brand image and only,17% respondents are those who get

influenced by good resale value in the market, 12% respondents bought motorcycle due

to the status symbol, 9% respondents bought motorcycle due to the conformability of

motorcycle. 8% respondents get influenced by product design, and 7% respondents

consider functional performance while buying the motorcycle.

Q (7): For what purpose you have taken motorcycle?

Purpose Business Joy Riding College Going Office Going

Number of Respondents

35 20 32 63

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Interpretation:-

Out of 150 respondents, majority of the respondent’s i.e.42% respondents for office

going. 23% respondents buy motor-cycle for business purpose, 14% for joy riding, 21%

for college going.

Q (8): Are you aware of all the models of motorcycles made available to people by

these two company’s (Hero and Bajaj)?

Response Yes No

Number of Respondents 135 15

70

Interpretation: -

Above chat shows that 135 respondents are those who are fully aware of all the

models of Hero and Bajaj company’s motorcycles. Only 15 respondents are those who

are not fully aware about all the models available by these two companies.

Q (9): What is source of information that made you opt for this motorcycle?

Source of Information

TV Ads Newspaper Ads

Magazines Friends and Relatives

Bike Dealers Suggestions

Number of Respondents

62 9 15 49 15

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Interpretation: -

The above chart shows that sources of information from where the respondents get

information before the purchase of motorcycle. 62 respondents said that they get

information from TV Ads, 9 respondents get information from Newspaper, 15

respondents get information from Magazines, 49 respondents get information from

Friends and Relatives, 15 respondents get information from Bike Dealers.

Q (10): How much are you satisfied with your present motorcycle?

Response Very Much Satisfied

Satisfied Average Dissatisfied Very Much Dissatisfied

Number of Respondents

59 56 30 4 1

72

Interpretation: -

The above chart shows the level of satisfaction of respondents. 59 respondents

said that they are very much satisfied with their present motorcycle, 56

respondents are only satisfied, 30 respondents are those whose level of

satisfaction regarding their present motorcycle is average and there are only 4

respondents who is very much dissatisfied with their present motorcycle and one

respondent is there who is dissatisfied with their present motorcycle.

Q (11): Do you find finance schemes offered by motorcycle companies worthwhile? If yes please specify the name of the company?

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Response Hero motocorp

Bajaj No

Number of Respondents 63 55 32

Interpretation: -

Out of 150 respondents, 118 respondents said that company’s financial schemes are worthwhile and 32 respondents said that financial schemes offered by the company were not worthwhile.

Out of 118 respondents who are satisfied with financial schemes of company’s it include 63 consumer of Hero and 55 consumers of Bajaj.

Q (12): Which factor do you suggest the company should lay emphasis to

enhance its sales?

Factors Quality Improvement

Product Design Advertisement Campaign

After Sale Services

Number of Respondents

46 35 39 30

74

Interpretation

In the above chart 46 respondents gave suggestions to company regarding

quality Improvement, 35 respondents gave suggestion regarding improvement of

their current product design of motorcycle ,39 gave suggestions regarding

improvement in their advertisement campaign and 30 respondents suggested that

company should improve their after sale services.

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FINDINGS

I. Out of 150 respondents, majority of respondents i.e. 79 have motorcycle whose

monthly income lies between 0- 10,000 Rupees. 34 respondents lies between

Rs.10,000-15,000 income groups, 29 respondents lies between income group

15,000-20,000 Rupees and very small group of respondents who have motorcycle

i.e. 7 lies between income group more than Rupees 20,000.

II. Out of 150 respondents, the categories of society that include 29 respondents are

professional (include Lawyers, Doctors, CA`s), 43 respondents are students, 56

respondents are serviceman and 22 respondents are those who run their own

business.

III. Out of 150 respondents, 89 have Hero motorcycles and rest of them i.e. 61

respondents has Bajaj motorcycles. It shows that majority of respondents like

Hero Company motorcycles.

IV. Out of Hero motorcycles 51 respondents have Splendor which is leader in Hero

motorcycles then 18 respondents have Passion Plus ,5 respondents have CBZ and

in case of Bajaj 21 respondents have Discover ,31 respondents have Pulsar , 19

respondents have Platina and 5 respondents have other motorcycle( it include 1

Hero CD 100,1 Hero Dawn,2Bajaj Caliber ,1 Bajaj CT 100)

V. Out of the 150 respondents 63 respondents are those who have been driving their

motorcycle for last 3 years, 37 respondents are those who recently bought the

motorcycle,, 42 respondents are those who have been driving their motorcycle for

last 5 years and only 8 respondents are those who have been driving their

motorcycle for more than last 5 years.

VI. Out of 150 respondents, majority of respondents i.e. 27% respondents bought due

to the price factor, 20% bought due to the brand image and only,17% respondents

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are those who get influenced by good resale value in the market, 12% respondents

bought motorcycle due to the status symbol, 9% respondents bought motorcycle

due to the conformability of motorcycle. 8% respondents get influenced by product

design, and 7% respondents consider functional performance while buying the

motorcycle.

VII. Out of 150 respondents, majority of the respondent’s i.e.42% respondents for

office going. 23% respondents buy motor-cycle for business purpose, 14% for joy

riding, 21% for college going.

VIII. Out of 150 respondents, 135 respondents are those who are fully aware of all the

models of Hero and Bajaj company’s motorcycles. Only 15 respondents are those

who are not fully aware about all the models available by these two companies.

IX. Out of 150 respondents, sources of information from where the respondents get

information before the purchase of motorcycle. 62 respondents said that they get

information from TV Ads, 9 respondents get information from Newspaper, 15

respondents get information from Magazines, 49 respondents get information from

Friends and Relatives, 15 respondents get information from Bike Dealers.

X. Out of 150 respondents, the level of satisfaction of respondents. 59 respondents

said that they are very much satisfied with their present motorcycle, 56

respondents are only satisfied, 30 respondents are those whose level of satisfaction

regarding their present motorcycle is average and there are only 4 respondents who

is very much dissatisfied with their present motorcycle and one respondent is there

who is dissatisfied with their present motorcycle.

XI. Out of 150 respondents, 118 respondents said that company’s financial schemes

are worthwhile and 32 respondents said that financial schemes offered by the

company were not worthwhile. Out of 118 respondents who are satisfied with

financial schemes of company’s it include 63 consumer of Hero and 55 consumers

of Bajaj.

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XII. Out of 150 respondents, 46 respondents gave suggestions to company regarding

quality Improvement, 35 respondents gave suggestion regarding improvement of

their current product design of motorcycle ,39 gave suggestions regarding

improvement in their advertisement campaign and 30 respondents suggested that

company should improve their after sale services.

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CHAPTER 5

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SUGGESTIONS

Both the companies should build-up their services centers in small towns as

well as distant areas for the betterment of their services.

Bajaj should launch one bike which could be considered as durable for e.g. as in

case of Hero , Splendor is one model which is durable and has been selling for

long time.

Both companies should work on the concept of most economical bike for lower-

income group. It is concluded from the survey, such people wants a bike which

costs up to Rs 25,000-30,000 approximate.

Both companies should provide consumer with all the financial resources they

need (Include low interest loan schemes, exchange offers, installment system

etc) under one roof i.e. authorized dealer center.

There should be original spare parts available at the authorized services centers.

Well qualified and experienced staff should be recruited for better services to

the customers.

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CONCLUSION

At the end we can say that India have very good position in two-wheeler

industry. Bajaj and Hero is the major player of two wheeler industries. But the Hero’s

volume is more from Bajaj. In Hero motorcycle’s “Splendor” is the most saleable

motorcycle.

According to my research in local areas the Brand Image of the motorcycle more

influences the consumer behavior. Consumer mostly gets information for buy the

motorcycle from T.V ads, friends and relatives .Consumers are very much satisfied

with their current motorcycle. They have no planning to change their present

motorcycle. Hero more satisfies the customer with comparison to BAJAJ. Because the

Bajaj have not resale value. And its pick up is not good. At the end we can say that the

consumer wants that both companies should improve their present Quality of

motorcycle and after sale services.

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BIBLIOGRAPHY

Books

Kothari.C.R, Research Methodology,Delhi,Wishwa Prakashan Pvt.Ltd.

Dr. Sontakki C.N, Marketing management.

Prasad L.M, Fundamental Of Market Research

Kotler Philip, Marketing management,Delhi,Pearson education Pvt.Ltd.

Websites www.Indiainfoline.com

http://www.hero motocorp.com

http://www.bajajauto.com

http://www.answers.com/topic/hero-honda

http://www.google.com

http://www.financialexpress.com/old/fe_full_story.php?

content_id=141258

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ANNEXURE

QUESTIONNAIRE

Dear Respondent,

This survey will help us understand consumer behavior for motorcycles. Please

note that there is no right or wrong answers to this questionnaire. It will only take 10

minutes of your time.

Name _____________

Age _____________

Q 1: Income Group (Monthly in Rupees)?

(a) 0-10,000 (b) 10,000-15,000

(c) 15,000-20,000 (d) 20,000 or above

Q2: You belong to which category of society?

(a) Professional (b) Student

(c) Serviceman (d) Businessman

Q3: Among these two which company’s motorcycle do you have?

(a)Hero (b) Bajaj

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Q4: Which of the following motorcycle do you have?

(a)CBZ (b) Discover

(c) Passion Plus (d) Pulsor

(e) Splendor (f) Platina

If any other please specify________________

Q5: How long you have been driving your motorcycle?

(a) 0-1 year (b) 1-3 year

(c) 3-5 year (d) More than 5 year

Q6: What does influence you to buy this motorcycle?

(a)Brand Image (b) Price

(c)Status (d) Product Design

(e) Resale value (f) Comfort

(g) Functional Performance

Q7: For what purpose you have taken motorcycle?

(a) Business (b) Joy Riding

(c) College Going (d) Office Going

If any other purpose please specify ________________

Q8: Are you aware of all the models of motorcycles made available to people by

these two company’s (Bajaj and Hero Honda)?

(a) Yes (b) No

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Q9: Which are the sources of information that made you opt for this bike?

(a) TV Ads (b) Newspaper Ads

(c) Magazines (d) Friends and Relatives

(e) Bike Dealers

Suggestions --------------------

Q10: How much are you satisfied with your present motorcycle?

(a) Very Much Satisfied (b) Satisfied

(c) Average (d) Dissatisfied

(e) Very Much Dissatisfied

Q11: Do you find finance schemes offered by motorcycle companies worthwhile?

(a) Yes (b) No

If yes please specify the name of the company_____________________

Q12: Which factor do you suggest the company should lay emphasis to enhance

its sales?

(a) Quality Improvement (b) Product design

(c) Advertisement Campaign (d) After Sale Services

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