COMPARATIVE STUDY OF HERO HONDA AND BAJAJ AUTO

OBJECTIVES OF THE STUDY

Project study which is being conducted by me is not only a formality for the fulfillment of the two year full time MBA. But being a management student I tried my best to extract best of the information available in the market for the use of society and people. Objectives which are being covered by me in this project are as following To know the perception of customers regarding bikes. To determine the customers satisfaction regarding bikes. To determine the factors influencing the choice of customers regarding bikes. To find out consumer refers which bike. To know the post purchase experiences of consumer regarding bikes.

BAJAJ AUTO LTD.

Company profile
Bajaj Auto limited is one of the largest two wheeler manufacturing company in India apart from producing two wheelers they also manufacture three wheelers. It is 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 motor scooters, motorcycles and the auto rickshaw. The company had started way back in 1945. Initially it used to import the two wheelers from outside, but from 1959 it started manufacturing of two wheelers in the country. By the year 1970 Bajaj Auto had rolled out their 100,000th vehicle. Bajaj scooters and motor cycles have become an integral part of the Indian milieu and over the years have come to represent the aspirations of modern India.

Bajaj Auto also has a technical tie up with Kawasaki heavy industries of Japan to produce the latest motorcycles in India which are of world class quality the Bajaj Kawasaki eliminator has emerged straight out of the drawing board of Kawasaki heavy industries. The core brand values of Bajaj Auto limited includes Learning, Innovation, Perfection, Speed and Transparency.

Bajaj Auto has three manufacturing units in the country at Akurdi, Waluj and Chakan in Maharashtra, western India, which produced 2,314,787 vehicles in 2005-06. The sales are backed by a network of after sales service and maintenance work shops all over the country.

Bajaj Auto has products which cater to every segment of the Indian two wheeler market Bajaj CT 100 Dlx offers a great value for money at the entry level. Similarly Bajaj Discover 125 offers the consumer a great performance without making a big hole in the pocket.

PROFILE:
Founder Year of Establishment Industry Business Group Listings & its codes Jamnalal Bajaj 1945 Automotive - Two & Three Wheelers The Bajaj Group 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 Registered & Head Office Kawasaki Heavy Industries of Japan Akurdi Pune - 411035 India Tel.: +(91)-(20)-27472851 Fax: +(91)-(20)-27473398 Works Akurdi, Pune Bajaj Nagar, Waluj Aurangabad Chakan Industrial Area, Chakan, Pune E-mail Website rahulbajaj@bajajauto.co.in www.bajajauto.com

Company's history
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.

According to the authors of Globality: Competing with Everyone from Everywhere for Everything, Bajaj has grown operations in 50 countries by creating a line of value-for-money bikes targeted to the different preferences of entry-level buyers.

Origins
The Bajaj Group was formed in the first days of India's independence from Britain. Its founder, Jamnalal Bajaj, had been a follower of Mahatma Gandhi, who reportedly referred to him as a fifth son. 'Whenever I spoke of wealthy men becoming the trustees of their wealth for the common good I always had this merchant prince principally in mind,' said the Mahatma after Jamnalal's death.

Jamnalal Bajaj was succeeded by his eldest son, 27-year-old Kamalnayan, in 1942. Kamalnayan, however, was preoccupied with India's struggle for independence. After this was achieved, in 1947, Kamalnayan consolidated and diversified the group, branching into cement, ayurvedic medicines, electrical equipment, and appliances, as well as scooters.

The precursor to Bajaj Auto had been formed on November 29, 1945 as M/s Bachraj Trading Ltd. It began selling imported two- and three-wheeled vehicles in 1948 and obtained a manufacturing license from the government 11 years later. The next year, 1960, Bajaj Auto became a public limited company.

Rahul Bajaj reportedly adored the famous Vespa scooters made by Piaggio of Italy. In 1960, at the age of 22, he became the Indian licensee for the make; Bajaj Auto began producing its first two-wheelers the next year.

Rahul Bajaj became the group's chief executive officer in 1968 after first picking up an MBA at Harvard. He lived next to the factory in Pune, an industrial city three hours' drive from Bombay. The company had an annual turnover of Rs 72 million at the time. By 1970, the company had produced 100,000 vehicles. The oil crisis soon drove cars off the roads in favor of two-wheelers, much cheaper to buy and many times more fuel-efficient.

A number of new models were introduced in the 1970s, including the three-wheeler goods carrier and Bajaj Chetak early in the decade and the Bajaj Super and three-wheeled, rear engine Autorickshaw in 1976 and 1977. Bajaj Auto produced 100,000 vehicles in the 197677 fiscal year alone.

The technical collaboration agreement with Piaggio of Italy expired in 1977. Afterward, Piaggio, maker of the Vespa brand of scooters, filed patent infringement suits to block Bajaj scooter sales in the United States, United Kingdom, West Germany, and Hong Kong. Bajaj's scooter exports plummeted from Rs 133.2 million in 1980-81 to Rs 52 million ($5.4 million) in 1981-82, although total revenues rose five percent to Rs 1.16 billion. Pretax profits were cut in half, to Rs 63 million.

New Competition in the 1980s

Japanese and Italian scooter companies began entering the Indian market in the early 1980s. Although some boasted superior technology and flashier brands, Bajaj Auto had built up several advantages in the previous decades. Its customers liked the durability of the product and the ready availability of maintenance; the company's distributors permeated the country.

The Bajaj M-50 debuted in 1981. The new fuel-efficient, 50cc motorcycle was immediately successful, and the company aimed to be able to make 60,000 of them a year by 1985. Capacity was the most important constraint for the Indian motorcycle industry. Although the country's total production rose from 262,000 vehicles in 1976 to 600,000 in 1982, companies like rival Lohia Machines had difficulty meeting demand. Bajaj Auto's advance orders for one of its new mini-motorcycles amounted to $57 million. Work on a new plant at Waluj, Aurangabad commenced in January 1984.

The 1986-87 fiscal year saw the introduction of the Bajaj M-80 and the Kawasaki Bajaj KB100 motorcycles. The company was making 500,000 vehicles a year at this point.

Although Rahul Bajaj credited much of his company's success with its focus on one type of product, he did attempt to diversify into tractor-trailers. In 1987 his attempt to buy control of Ahsok Leyland failed.

The Bajaj Sunny was launched in 1990; the Kawasaki Bajaj 4S Champion followed a year later. About this time, the Indian government was initiating a program of market liberalization, doing away with the old 'license raj' system, which limited the amount of investment any one company could make in a particular industry.

A possible joint venture with Piaggio was discussed in 1993 but aborted. Rahul Bajaj told the Financial Times that his company was too large to be considered a potential collaborator by Japanese firms. It was hoping to increase its exports, which then amounted to just five percent of sales. The company began by shipping a few thousand vehicles a year to neighboring Sri Lanka and Bangladesh, but soon was reaching markets in Europe, Latin America, Africa, and West Asia. Its domestic market share, barely less than 50 percent, was slowly slipping.

By 1994, Bajaj also was contemplating high-volume, low-cost car manufacture. Several of Bajaj's rivals were looking at this market as well, which was being rapidly liberalized by the Indian government.

Bajaj Auto produced one million vehicles in the 1994-95 fiscal year. The company was the world's fourth largest manufacturer of two-wheelers, behind Japan's Honda, Suzuki, and 8

Kawasaki. New models included the Bajaj Classic and the Bajaj Super Excel. Bajaj also signed development agreements with two Japanese engineering firms, Kubota and Tokyo R & D. Bajaj's most popular models cost about Rs 20,000. 'You just can't beat a Bajaj,' stated the company's marketing slogan.

The Kawasaki Bajaj Boxer and the RE diesel Autorickshaw were introduced in 1997. The next year saw the debut of the Kawasaki Bajaj Caliber, the Spirit, and the Legend, India's first four-stroke scooter. The Caliber sold 100,000 units in its first 12 months. Bajaj was planning to build its third plant at a cost of Rs 4 billion ($111.6 million) to produce two new models, one to be developed in collaboration with Cagiva of Italy.

New Tools in the 1990s

Still, intense competition was beginning to hurt sales at home and abroad during the calendar year 1997. Bajaj's low-tech, low-cost cycles were not faring as well as its rivals' higher-end offerings, particularly in high-powered motorcycles, since poorer consumers were withstanding the worst of the recession. The company invested in its new Pune plant in order to introduce new models more quickly. The company spent Rs 7.5 billion ($185 million) on advanced, computer-controlled machine tools. It would need new models to comply with the more stringent emissions standards slated for 2000. Bajaj began installing Rs 800 catalytic converters to its two-stroke scooter models beginning in 1999.

Although its domestic market share continued to slip, falling to 40.5 percent, Bajaj Auto's profits increased slightly at the end of the 1997-98 fiscal year. In fact, Rahul Bajaj was able to boast, 'My competitors are doing well, but my net profit is still more than the next four biggest companies combined.' Hero Honda was perhaps Bajaj's most serious local threat; in fact, in the fall of 1998, Honda Motor of Japan announced that it was withdrawing from this joint venture.

Bajaj Auto had quadrupled its product design staff to 500. It also acquired technology from its foreign partners, such as Kawasaki (motorcycles), Kubota (diesel engines), and Cagiva (scooters). 'Honda's annual spend on R & D is more than my turnover,' noted Ruhal Bajaj. His son, Sangiv Bajaj, was working to improve the company's supply chain management. A marketing executive was lured from TVS Suzuki to help push the new cycles.

Several new designs and a dozen upgrades of existing scooters came out in 1998 and 1999. These, and a surge in consumer confidence, propelled Bajaj to sales records, and it began to regain market share in the fast-growing motorcycle segment. Sales of three-wheelers fell as some states, citing traffic and pollution concerns, limited the number of permits issued for them.

In late 1999, Rahul Bajaj made a bid to acquire ten percent of Piaggio for $65 million. The Italian firm had exited a relationship with entrepreneur Deepak Singhania and was looking to reenter the Indian market, possibly through acquisition. Piaggio itself had been mostly bought out by a German investment bank, Deutsche Morgan Grenfell (DMG), which was looking to sell some shares after turning the company around. Bajaj attached several conditions to his purchase of a minority share, including a seat on the board and an exclusive Piaggio distributorship in India.

In late 2000, Maruti Udyog emerged as another possible acquisition target. The Indian government was planning to sell its 50 percent stake in the automaker, a joint venture with Suzuki of Japan. Bajaj had been approached by several foreign car manufacturers in the past, including Chrysler (subsequently DaimlerChrysler) in the mid-1990s.

Employment fell from about 23,000 in 1995-96 (the year Bajaj suffered a two-month strike at its Waluj factory) to 17,000 in 1999-2000. The company planned to lay off another 2,000 workers in the short term and another 3,000 in the following three to four years.

Principal Subsidiaries: Bajaj Auto Finance Ltd.; Bajaj Auto Holdings Ltd.; Bajaj Electricals Ltd.; Bajaj Hindustan Ltd.; Maharashtra Scooters Ltd.; Mukand Ltd.

Principal Competitors: Honda Motor Co. Ltd.; Suzuki Motor Corporation; Piaggio SpA, Hero Honda Motorcycle Ltd.

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Timeline of new releases

1960-1970 - Vespa 150 (Under the license of Piaggio of Italy) 1971 - three-wheeler goods carrier 1972 - Bajaj Chetak 1976 - Bajaj Super 1977 - Rear engine Autorickshaw 1981 - Bajaj M-50 1986 - Bajaj M-80, Kawasaki Bajaj KB100 1990 - Bajaj Sunny 1994 - Bajaj Classic 1995 - Bajaj Super Excel 1997 - Kawasaki Bajaj Boxer, Rear Engine Diesel Auto rickshaw 1998 - Kawasaki Bajaj Caliber, Legend(India's first four-stroke scooter) 2000 - Bajaj Saffire 2001 - Eliminator, Pulsar 2003 - Caliber115, Bajaj Wind 125, Bajaj Pulsar 2004 - Bajaj CT 100, New Bajaj Chetak 4-stroke with Wonder Gear, Bajaj Discover DTS-i 2005 - Bajaj Wave, Bajaj Avenger, Bajaj Discover 2006 - Bajaj Platina 2007 - Bajaj Pulsar-200, Bajaj Kristal, Bajaj Pulsar 220 DTS-Fi, XCD 125 DTS-Si 2008 - Bajaj Discover 135 DTS-i - sport (Upgrade of existing 135cc model) 2009 - Bajaj Pulsar 135, Bajaj XCD 135 cc , Bajaj Pulsar 150 DTS-i UG IV, Bajaj Pulsar 180 DTS-i UG IV, Bajaj Pulsar 220 DTS-i , Bajaj Discover 100 DTS-Si.

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

Scooters
o Bajaj Sunny o Bajaj Chetak o Bajaj Cub o Bajaj Super o Bajaj Wave o Bajaj Legend

Motorcycles
o Kawasaki Eliminator o Bajaj Pulsar o Bajaj Kawasaki Wind 125 o Bajaj Boxer o Bajaj CT 100 o Bajaj Platina o Bajaj Caliber o Bajaj Discover o Bajaj Avenger

Upcoming Models
Bajaj Blade Bajaj Sonic

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New Image
The company, over the last decade has successfully changed its image from a scooter manufacturer to a two wheeler manufacturer, product range ranging from Scooterettes to Scooters to Motorcycle. Its real growth in numbers has come in the last 4 years after successful introduction of a few models in the motorcycle segment. Bajaj has redefined both the value and the premium segments with its motorcycles offering unique features not seen in their competitors in those classes.

The entry level Platina features push to cancel indicators, unique throttle control, chrome graphics, fuel gauge and alloy wheels which are not seen on more expensive executive class machines of its competitors.

The Bajaj XCD 125 offers an excellent value proposition with its larger engine, LED tail lamp and Digital meter at the price point of 100cc vehicles from its competitors.

The Discover 135 is available in Disc and Drum brake variants falls between the executive and premium segments and is ideal for those looking for a bit of additional power without sacrificing too much on fuel efficiency. Recently a Sport variant has been announced which is expected to hit the markets shortly.

In the premium segment the Bajaj range includes the Pulsar 150, 200 and 220cc variants in the sports segment and the Avenger 200 in the cruiser segment.

With the launch of the Kristal, Bajaj Auto have reentered the autogeared scooter segment and borrows a lot of technologies from the successful motorcycle range such as DTSi, ExhausTec and SNS suspension.

The GC1000 with its 416cc Diesel engine is an economical commercial vehicle and can be adapted for a wide variety of purposes. 13

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

Spinoffs and acquisitions

The demerger of Bajaj Auto Ltd into three separate corporate entitiesBajaj Finserv Ltd (BFL), Bajaj Auto Ltd (BAL), and Bajaj Holdings and Investment Ltd (BHIL)was completed with the shares listing on 26 May 2008.

In November 2007, Bajaj Auto acquired 14.5% stake in KTM Power Sports AG (holding company of KTM Sport motorcycles AG). The two companies have signed a cooperation deal, by which KTM will provide the know-how for joint development of the water-cooled four-stroke 125 and 250 cc engines, and Bajaj will take over the distribution of KTM products in India and some other Southeast Asian nations. Bajaj said it is open to taking a majority stake in KTM and is also looking at other takeover opportunities. On 8 January 2008, Managing Director Rajiv Bajaj confirmed the collaboration and announced his intention to gradually increase Bajaj's stake in KTM to 25%.

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HERO HONDA MOTORCYCLES LTD.

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Company's History
Hero Honda Motorcycles Limited is an Indian manufacturer of motorcycles and scooters. Hero Honda is a 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 Haryana, India. It specializes in dual use motorcycles that are low powered but very fuel efficient.

Company Profile
Hero, is the brand name used by the Munjal brothers in the year 1956 with the flagship company Hero Cycles. The two-wheeler manufacturing business of bicycle components had originally started in the 1940s and turned into the worlds largest bicycle manufacturer today. Hero is a name synonymous with two-wheelers in India today. The Munjals roll their own steel, make free wheel bicycle critical components and have diversified into different ventures like product design. The Hero Group philosophy is: To provide excellent transportation to the common man at easily affordable prices and to provide total satisfaction in all its spheres of activity. The Hero group vision is to build long lasting relationships with everyone (customers, workers, dealers and vendors). The Hero Group has a passion for setting higher standards and Engineering Satisfaction is the prime motivation, way of life and work culture of the Group.

In the year 1984, Mr. Brijmohan Lal Munjal, the Chairman and Managing Director of Hero Honda Motors (HHM), headed an alliance between the Munjal family and Honda Motor

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Company Ltd. (HMC). HHM Mission Statement is: We, at Hero Honda, 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. This alliance became one of the most successful joint ventures in India, until the year 1999 when HMC had announced a 100% subsidiary, Honda Motorcycle & Scooter India (HMSI).

Growth
The business growth of Hero Honda has been phenomenal throughout its early days. The Munjal family started a modest business of bicycle components. Hero Group expanded so big that by 2002 they had sold 86 million bicycles producing 16000 bicycles a day. Today Hero Honda has an assembly line of 9 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. It sold 3 million bikes in the year 2005-2006.

Recently it has also entered in scooter manufacturing, with its model PLEASURE mainly aimed at girls. The Hero Group has done business differently right from the start and that is what has helped them to achieve break-through in the competitive two-wheeler market. The Group's low key, but focused, style of management has earned the company plaudits amidst investors, employees, vendors and dealers, as also worldwide recognition. The growth of the Group through the years has been influenced by a number of factors:

Just-in-Time
The Hero Group through the Hero Cycles Division was the first to introduce the concept of just-in-time inventory. 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 and is functional even till date. This is 17

the Japanese style of production and in India; Hero is probably the only company to have mastered the art of the just-in-time inventory principle.

Ancillarisation
An integral part of the Group strategy of doing business differently was providing support to ancillary units. There are over 300 ancillary units today, whose production is dedicated to Hero's requirements and also a large number of other vendors, which include some of the better known companies in the automotive segment. Employee Policy: Another Striking feature within the Hero Group is the commitment and dedication of its workers. There is no organized labor union and family members of employees find ready employment within Hero. The philosophy with regard to labor management is "Hero is growing, grow with Hero." When it comes to workers' benefits, the Hero Group is known for providing facilities, further ahead of the industry norms. Long before other companies did so, Hero was giving its employees a uniform allowance, as well as House Rent Allowance (HRA) and Leave Travel Allowance (LTA). Extra benefits took the form of medical check-ups, not just for workers, but also for the immediate family members.

Dealer Network
The relationship of Hero Group with their dealers is unique in its closeness. The dealers are considered a part of the Hero family. A nation-wide dealer network comprising of over 5,000 outlets, and have a formidable distribution system in place. Sales agents from Hero travels to all the corners of the country, visiting dealers and send back daily postcards with information on the stock position that day, turnover, fresh purchases, anticipated demand and also competitor action in the region. The manufacturing units have a separate department to handle dealer complaints and problems and the first response is always given in 24 hours.

Financial Planning
The Hero Group benefits from the Group Chairman's financial acumen and his grasp on technology, manufacturing and marketing. Group Company, Hero Cycles Limited has one of the highest labor productivity rates in the world. In Hero Honda Motors Limited, the focus is on financial and raw material management and a low employee turnover.

Quality
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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.

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.

Diversification
Throughout the years of enormous growth, the Group Chairman, Mr. Lal has actively looked at diversification. A considerable level of backward 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 Hero Motors come 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.

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 19

companies put together. Hero Honda's bike Hero Honda Splendor, the world's largest-selling motorcycle for the years 2001-2003, selling more than one million units per year.

Recognition
The Brand Trust Report published by Trust Research Advisory has ranked Hero Honda in the 13th position among the brands in India.

Suppliers
It is reported Hero Honda has five joint ventures or associate companies, Munjal Showa, AG Industries, Sunbeam Auto, Rockman Industries and Satyam Auto Components, that supply a majority of its components.

Termination of Hero and Honda Joint Venture

In December 2010, the Board of Directors of the Hero Honda Group has decided to terminate the joint venture between Hero Group of India and Honda of Japan in a phased manner. The Hero Group of India would buy out the 26% stake of the Honda in JV Hero Honda. Under the joint venture Hero Group could not sell into international markets and the termination would mean that Hero Group can exploit global opportunities now. Since last 25 years the Hero Group relied on their Japanese partner Honda for R & D for new bike models. So there are concerns that the Hero Group might not be able to sustain the performance of the Joint Venture alone.

Motorcycle models
Achiever Ambition 133, Ambition 135 CBZ, CBZ Star, CBZ Xtreme CD 100, CD 100 SS, CD Dawn, CD Deluxe, CD Deluxe (Self Start) Glamour, Glamour F.I Hunk Karizma, Karizma R, Karizma ZMR FI 20

Passion, Passion+, Passion Pro Pleasure Splendor, Splendor+, Splendor+ (Limited Edition), Super Splendor, Splendor NXG, Splendor PRO

LITERATURE REVIEW
India has the largest number of two wheelers in the world with 41.6 million vehicles. India has a mix of 30 percent automobiles and 70 percent two wheelers in the country. India was the second largest two wheeler manufacturer in the world starting in the 1950s with the birth of Automobile Products of India (API) that manufactured scooters. API manufactured the Lambrettas but, another company, Bajaj Auto Ltd. surpassed API and remained through the turn of the century from its association with Piaggio of Italy (manufacturer of Vespa).

The license raj that existed between the1940s to1980s in India, did not allow foreign companies to enter the market and imports were tightly controlled. This regulatory maze, before the economic liberalization, made business easier for local players to have a sellers market. Customers in India were forced to wait 12 years to buy a scooter from Bajaj. The CEO of Bajaj commented that he did not need a marketing department, only a dispatch department. By the year 1990, Bajaj had a waiting list that was twenty-six times its annual output for scooters.

The motorcycle segment had the same long wait times with three manufacturers; Royal Enfield, Ideal Jawa, and Escorts. Royal Enfield made a 350cc Bullet with the only fourstroke engine at that time and took the higher end of the market but, there was little competition for their customers. Ideal Jawa and Escorts took the middle and lower end of the market respectively.

In the mid-1980s, the Indian government regulations changed and permitted foreign companies to enter the Indian market through minority joint ventures. The two-wheeler 21

market changed with four Indo-Japanese joint ventures: Hero Honda, TVS Suzuki, Bajaj Kawasaki and Kinetic Honda. The entry of these foreign companies changed the Indian market dynamics from the supply side to the demand side. With a larger selection of twowheelers on the Indian market, consumers started to gain influence over the products they bought and raised higher customer expectations. The industry produced more models, styling options, prices, and different fuel efficiencies. The foreign companies new technologies helped make the products more reliable and with better quality. Indian companies had to change to keep up with their global counterparts.

Consumer Perception
Consumer perception theory is any attempt to understand how a consumer's perception of a product or service influences their behaviour. Those who study consumer perception try to understand why consumers make the decisions they do, and how to influence these decisions. Usually, consumer perception theory is used by marketers when designing a campaign for a product or brand. However, some people study consumer perception in order to understand psychology in a much more general sense.

Perception In general psychological terms, perception is our ability to make some kind of sense of reality from the external sensory stimuli to which we are exposed. Several factors can influence our perception, causing it to change in certain ways. For example, repeated exposure to one kind of stimuli can either make us oversensitive or desensitized to it. Additionally, the amount of attention we focus on something can cause a change in our perception of it.

Branding A brand, or a brand name, is the attempt to impose some kind of identifying feature on a product or service so that it is easily recognized by the general public. A brand is oftentimes associated with an image, a set of expectations or recognizable logo. The goal of a brand is to set a product or service apart from others of its kind, and influence the consumers to choose the product over similar products simply because of its associations.

Positioning, Repositioning or Depositioning Positioning is the process whereby marketers attempt to build a brand. Marketers actively try to create an image which is both recognizable and appeals to a certain group of people or 22

target market. Repositioning is the process of altering this image, usually in order to influence a larger target market and thereby influence the behavior of a greater number of consumers. Depositioning is the practice of trying to devalue alternative, competing brands in the perceptions of a shared target market.

Value and Quality Value refers to the perceptions a consumer has of a product's benefits when weighed against its cost. Value can be measured both qualitatively--the emotional or psychological pleasure a consumer derives from a product or service--and quantitatively, in terms of the actual financial gain it wins them. Quality can be related to value, and may be taken into account when measuring the value of a product or service. More formally, it refers to the way in which a product or service relates to its competitors, or else conforms to a set of measurable standards.

Buyer's remorse Buyer's remorse is a strong feeling of regret which occurs after a purchase has been made. It is a specific case of cognitive dissonance, or the psychological state of worry or unease which comes about when attempting to come to terms with conflicting ideas, perceptions or motives. Buyer's remorse usually occurs after a consumer has made a purchase he or she has come to regret. Generally, it involves the realization that the opportunity of purchasing one product or service over another in some way outweighs the value of the purchase. In this regard, it occurs when a consumer's perception of a purchase changes after he or she has already invested in it.

Customers Satisfaction
Concept Identification
As organizations become increasingly customer focused and driven by demand, the need to gain customer loyalty and retain their loyalty is critical. Customer satisfaction is the most effective way to achieve customer loyalty. Customer satisfaction and customer loyalty share many similar traits. Customer value is the customers perception of the ratio of benefits to

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what he or she gives to obtain those benefits. The customer Value Triad is a framework used to understand what it is that customers want. The framework consists of three parts: (1) Perceived product quality, (2) Value-based pricing, and (3) Perceived service quality. Customers are satisfied, when value meets or exceeds expectations. If their expectations of value are not met, there is no chance of satisfying them. Figuring out what the customers want, however, is a difficult and complex process. To be able to create and deliver customer value is important to understand its components. On the most basic level, value from a customers perspective is the ratio of benefits to the risks being taken while buying the product.

An Insight
According to Harold E Edmondson Customer Satisfaction seems to appear in print more frequently than any other catch phrase used to describe a new found magic for industrial success. Before we proceed in to the study of the dynamics of Customer Satisfaction it is important to know about, who a customer is and what satisfaction really means.

Who really is a Customer?

The question of defining who your customers are seems fairly easy particularly if you have segmented your market properly and understand who you are trying to satisfy. However subtlety that frequently goes undetected by many firms is that is that customer set can be divided into two parts, the apparent customer and the user. The apparent customer is the person or group of people who decide what product to buy and basically have control over the purse strings. The user is a person or group who physically uses the product or is the direct recipient of a service.

What does satisfaction really mean?

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As in defining customer above, defining satisfaction also appears simple. However as with customer there is a subtlety that needs addressing. Satisfaction by most definitions simply means meeting the customers requirement. Customer satisfaction is a concept that more and more companies are putting at the heart of their strategy, but for this to be successful theyre needs to be clarity about, what customer satisfaction means and what needs to happen to drive improvement. Without this, there is a risk that customer satisfaction becomes little more than a good intention, with confused objectives failing to address the real issues for customers, one helpful way to look at the problem is to rephrase the objectives: set the sights on helping the customers meet their goals. Customer satisfaction can be defined in many different ways. Finding the right way for a company depends on understanding your customer and on having a clear vision of the role that customer satisfaction is to play in the strategy. For example, a focus on customer satisfaction can work alongside existing segmentations to support revenue generation from high value customers or it can be a company-wide objective rooted in the brand values. For the former, it may be sufficient to focus on improving customer service, but for the latter a broader definition of customer satisfaction is necessary, closer akin to corporate reputation. Whatever the strategy for customer satisfaction, it must at least include getting the basics right. Failing to achieve this can destroy the reputation as well as losing valuable customers. Every customer, regardless of their economic worth to the business, has the power to influence positively or negatively a companys reputation. Once the objectives for the customer satisfaction strategy are defined there are a number of steps we can take to make sure the focus on customer satisfaction is effective.

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RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. Research methodology constitutes of research methods, selection criterion of research methods, used in context of research study and explanation of using of a particular method or technique so that research results are capable of being evaluated either by researcher himself or by others. Why a research study has been undertaken, how the research problem has been formulated, why data have been collected and what particular technique of analyzing data has been used and a best of similar other question are usually answered when we talk of Research methodology concerning a research problem or study. The area of the study related with informing different people regarding motor bikes in the region of NORTH-EAST DELHI.

RESEARCH TYPE AND SAMPLE SIZE

Research included gathering both primary and secondary data. Primary data is the first hand data, which are selected a fresh and thus happen to be original in character. Primary data was crucial to know various customers and past consumer views about bikes in regards to other brands. Secondary data are that which has been collected by someone else and which already have been passed through statistical process. Secondary data has been taken from internet, newspaper, magazines and companys websites. Data collection has been done through by giving structured questionnaire. The research approach was used survey method which is a widely used method for data collection and best suited for descriptive type of research. The survey was done on hundred general residents of the selected region.

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In this method questionnaire were distributed to the respondents and they were asked to answer the questions in the questionnaire. The questionnaire were structured non disguised questionnaire because the question which the questionnaire contained, were arranged in a specific order besides every question asked were logical for the study, no question can be termed as irrelevant.

DATA COLLECTION
(a) PRIMARY: Questionnaires filled by local people of various income groups. (b) SECONDARY: Internet

Size of Data: 100 respondents Location: NORTH-EAST DELHI.

The following basic tool was used by for analysis: Pie Charts

SCOPE
My project was based on the Comparative Study of Bajaj V/S Hero Honda and data was taken in the City Delhi only.

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LIMITATIONS
1. Research work was carried out in a North-East region of Delhi only; the finding may not be applicable to the other parts of the country because of social and cultural differences. 2. The sample was collected using convenience-sampling techniques. As such result may not give an exact representation of the population. 3. Shortage of time is also reason for incomprehensiveness. 4. The views of the people are biased therefore it doesnt reflect true picture.

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DATA ANALYSIS AND FINDINGS

Q1. Which bike do you have?

Bike Hero Honda Bajaj Any Other

No. of respondents 45 37 18

fig.: No of respondents according to their bike

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Q2. Which model do you have?

Hero Honda Splendor No. of respondents 20 Bajaj CT 100 No. of respondents 6

Hero Honda Bajaj Any other

Passion Karizma Any Other

12 7 6

Discover Pulsar Any other

12 11 8

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Hero Honda

Bajaj
Q3. In which family Income level do you fall?

Income Level 100000-200000

No. of respondents 22

25 20 15 10 5 0 Model Name
200000-300000 300000-400000 45 23

Splendor Passion Karizma Any other

14 12 10 8 6 4 2 0 Model Name CT 100 Discover Pulsar Any other

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Above 400000 Fig.: People according to their income level

10

50 45 40

35
30 25 20 15 10 5 0 Income Level 100000-200000 200000-300000

300000-400000
Above 400000

Q4. For how long do you own a bike?

Year 0-1 1-2 2-3

No. of respondents 11 29 26 32

Above 3

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40 35 30 25 20 15 10 5 0-1 Year 1-2 Year 2-3 Year Above 3 Year

0
No. of Years

Q5. For what purpose do you use your Motor Bike?

Purpose Office Personal

Hero Honda 9 12

Bajaj 4 14

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Joy Other

18 6

16 3

20 18 16 14 12 10 8 6 4 2 0 Office Personal Joy Other Hero Honda Bajaj

Q6. How do you come to know about this Motor Bike?

Source News Paper

Hero Honda 4

Bajaj 2
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Television Response

22

16 No. of respondents

Magazine Friends & Relative

2 17

1 18

25

20

15

News Paper Television Magazine friends & Relative

10

0 Hero Honda Bajaj

Q7. Does advertisement influence your decision in choosing a Motor Bike?

35

Yes No Cant say

87 5 8

Yes No Can't say

Q8. Do you have full knowledge about Bikes before buying?

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Response Yes No

Hero Honda 24 21

Bajaj 22 15

30

25

20

15

Yes No

10

0 Hero Honda Bajaj

Q9) Which Factor below Influence your decision?

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Factor Price Mileage Quality Resale Value Status Symbol

Hero Honda 71.11% 80% 66.67% 40% 10%

Bajaj 78.38% 64.86% 48.65% 27% 8%

90.00% 80.00% 70.00%

Price
Mileage Quality Resale Value Status Symbol

60.00%
50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Hero Honda Bajaj

Q10. How would you rate the following factors of Bikes with respect to different company?
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Factor Mileage Price Pick-up Maintenance Look & Shape Brand Image

Hero Honda Ratings 74% 68% 70% 58% 85% 53%

Bajaj Ratings 72% 65% 80% 62% 80% 55%

90% 80% 70% 60% 50% 40%

Mileage
Price Pick-up Maintenance Look & Shape

30%
20% 10% 0% Hero Honda Bajaj

Brand Image

Q11. If new Bike with good features comes in, then would you like to change your bike?
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Response Yes No Cant say

Hero Honda 18 16 11

Bajaj 20 14 3

25 20 15 Hero Honda 10 5 0 Yes No Can't say Bajaj

CONCLUSION

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1. Most of the Pulsar, CBZ & Karizma are purchased by young generation 18 to 30 because they prefer stylish looks and rest of the models of Hero Honda are purchased more by daily users who needs more average of bikes than looks. 2. Hero Honda is considered to be most fuel-efficient bike on Indian roads. 3. Service & Spare parts are available throughout India in local markets also. 4. While buying a motorcycle, economy is the main consideration in form of maintenance cost, fuel efficiency. 5. Majority of the respondent had bought their motorcycle more than 3 years.

RECOMMENDATION
1. Bajaj should introduce some more models having more engine power. 41

2. Hero Honda should think about fuel efficiency in case of upper segment bikes. 3. More service centers should be opened. 4. Maintenance cost and the availability of the spare parts should also be given due importance. 5. They also introduce some good finance/discount schemes for students. 6. The price should be economic.

BIBLIOGRAPHY
1. www.herohonda.com 42

2. www.google.com 3. www.bajaj.com 4. www.twowheeler.com 5. www.extrememachines.com

ANNEXURE
NAME: - CONTACT NO. . 43

Age:-

15-20 25-30

20-25 Above 30 Employee Other

Occupation:-

Businessman Student

Q1. Which Bike do you have? Hero Honda Q2. Which Model do you have? Hero Honda:Splendor Karizma Bajaj:CT 100 Pulsar Q3. In which Family Income do you Fall? 100000-200000 300000-400000 Q4. For how long do you own a Bike? 0-1 year 2-3 year Q5. For what purpose do you use your Motor Bike? Office Purpose Joy Purpose Personal Purpose Other 1-2 year Above 3 years 200000-300000 Above 400000 Passion Other Discover Other Bajaj Any Other

Q6. How do you come to know about this Motor Bike? Newspaper Magazines Television Friends/Relatives Cant say

Q7. Does advertisement influence your decision in choosing a Motor Bike? Yes No

Q8. Do you have full knowledge about Bikes before buying? Yes Q9. Which factor below influence your decision? Price Resale Value Mileage Status Symbol Quality No

Q10. How would you rate the following factors of bikes with respect to different companies? Hero Honda Mileage Price 44 Bajaj

Pick up Maintenance Look/Shape Brand Image Q11. In new bike with good feature comes in, then would you like to change your bikes? Yes Q12. Any Suggestions for Company Date: (Signature) No Cant say

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