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INTRODUCTION

HISTORYABOUT THE CHAIRMAN
Brijmohan Lall Munjal - Seeding a Dream
"Don't dream if you can't fulfill your dreams'' Brijmohan Lall Munjal is often fond of
saying. The founder and patriarch of the $ 2.8 billion Hero Group is your classic first
generation entrepreneur. He is a man who started small, dreamt big and used a
combination of grit and perseverance to create one of the country's largest corporate
groups and the World's No.1 Two Wheeler Company. Instinctive from a young age,
Brijmohan Lall made a rather unusual start in life. Around the time when the freedom
movement in India was taking shape in the late 1920s, he walked into a newly opened
Gurukul (Indian heritage school) near his home in Kamalia (now in Pakistan). He was only
six years old then. Thus began an extraordinary tale of courage and perseverance.
Brijmohan began his business story after partition in 1947, when he and his brothers
relocated to Ludhiana. The family set up a company that provided poor people with basic
transport (cycles). Three decades later, as India evolved, he added a second crucial chapter
which visualized affordable and technologically superior transport to millions of middle
class Indians. The rest is history.
Building Relationships When Brijmohan and his brothers started out, there was no concept
of organized dealer networks. Companies just produced, and most dealers functioned like
traders. Brijmohan changed the rules of the business by trusting his gut instincts;
introducing business norms that were ahead of their time, and by investing in strategic
relationships. Brijmohan built a series of bonds and networks with hundreds of family
members, vendors, dealers and employees. Much like the 1apanese keiretsu system, these
networks are now the glue that holds the Hero Group together. "Thanks to the
relationships that we have nurtured so passionately in the Hero Family, the younger
generations of some of our bicycle dealers have become dealers of Hero Honda. These
relationships have survived through generations - through bad times and good times'' the
patriarch now reminiscences. Besides bonding with his vendors and dealers, Brijmohan has
been personally responsible for kindling a spirit of entrepreneurship amongst his
employees, and today, 40 of his former employees are successful entrepreneurs.
Staying Ahead Though not technically qualified in the conventional sense, few of his
contemporaries have understood the dynamics of technology better than Brijmohan Lall
has. He could always visualize the applicability of technology before others could. For
example, in the 1980s, when all two-wheeler companies in India opted for two-stroke
engine technology, Brijmohan preferred a four-stoke engine - a technology that
dramatically increased fuel efficiency and reduced maintenance costs. This technology was
one of the biggest reasons for Hero Honda's stupendous success. Time and again,
Brijmohan managed to steal a march over his industry peers. For example, when Honda
Motors of 1apan was looking for a collaborator in the 1980s, the Hero Group was not high
up the pecking order initially as there were other more eligible and established suitors. Yet
it didn't take long for the astute 1apanese to realize that the Hero Group and Honda had
much more in common than earlier perceived; there a sharp focus on financial and raw
material management, and employee turnover was low. Honda officials were also amazed
to find that the Munjals were already practicing "1ust-in-time-inventory" at the time
(1IT). It turned out that Brijmohan Lall's aspiration to provide cheap transportation to
India's poor by default ensured lean and costeffective operations. This in turn increased
vendor efficiency and led to near-zero inventories.
A Corporate Citizen A frugal upbringing and a value system modeled on the famous
Gurukul system - which stresses the sanctity of the teacher-pupil relationship - imbibed in
Brijmohan a strong sense of social commitment and responsibility. There is a special place
in his heart for Ludhiana, the city where he took roots. Today, Ludhiana is a modern,
bustling city, but Brijmohan has played no mean role in its evolution. Several schools and
educational institutions in Ludhiana owe their existence to the Munjal family. The
Ludhiana Stock Exchange owes its existence to Brijmohan's vision as does the Ludhiana
Flying Club. He's also set up the not-forprofit Dayanand Medical College and Hospital-an
institute now rated as one of the best medical colleges in India, in terms of infrastructure,
quality of staff and alumni profile. In and around Dharuhera, near the first Hero Honda
plant, Brijmohan and his family have left their stamp of philanthropy. The Raman Kant
Munjal Foundation - which Brijmohan set up in memory of his eldest son, today runs a
higher secondary school and a very modern and well-equipped 100-bed hospital at
Dharuhera. The group has also adopted numerous villages and provides education,
vocational training, drinking water, roads, streetlights and sewerage.



The Board of Directors of The Hero Honda Group Comprises of : -

Mr. Brijmohan Lall Munjal Chairman
Mr. Pawan Munjal Managing Director

Mr. Akio Kazausa 1oint Managing Director
Mr. Kazumi Yanagida Director
Mr. Satyanand Munjal Director
Mr. Om Prakash Munjal Director
Mr. M P Wadhawan Director

Mr. S P Virmani Director
Mr. O P Gupta Director
Mr. M. Sudo Director
Mr. S Toshida Director

Mr. N N Vohara Director
Mr. Pradeep Dinodia Director
Gen. ( Retd.) V P Malik Director


The legend of Hero Honda
What started out as a 1oint Venture between Hero Group, the world's largest bicycle
manufacturers and the Honda Motor Company of 1apan, has today become the World's
single largest two wheeler Company. Coming into existence on 1anuary 19, 1984, Hero
Honda Motors Limited gave India nothing less than a revolution on two-wheels, made even
more famous by the 'Fill it - Shut it - Forget it ' campaign. Driven by the trust of over 5
million customers, the Hero Honda product range today commands a market share of 48
making it a veritable giant in the industry. Add to that technological excellence, an
expansive dealer network, and reliable after sales service, and you have one of the most
customer- friendly companies.

Customer satisfaction, a high quality product, the strength of Honda technology and the
Hero group's dynamism have helped HHML scale new frontiers and exceed limits. In the
words of Mr. Brijmohan Lall Munjal, the Chairman and Managing Director, "We will
continue to make every effort required for the development of the motorcycle industry,
through new product development, technological innovation, and investment in equipment
and facilities and through and through efficient management."

History Of Company
1984
The Company was Incorporated on 19th 1anuary, at New Delhi. The Company
Manufacture motor cycles up to 100 cc capacity. The Company was promoted by Hero
Cycles (P) Ltd. (HCPL).

The Company entered into a technical-cum-financial collaboration agreement with Honda
Motor Co. Ltd., 1apan (HML). As per this collaboration agreement, HML was to furnish
complete technical information and know-how and trade secrets and other relevant data.
Hero Honda CD-100 is the first four stroke motorcycle to be introduced in India in 100cc
range. Its most attractive features are fuel efficiency and its light weight. CD-100 will be
equipped with electronic ignition system, illuminated speedometer, 4 speed gear box,
neutral and flasher indicators, etc. 15 No. of equity shares subscribed for by the promoters,
etc. In November, 119,99,985 No. of equity shares issued at par of which 71,99,985 shares
reserved for allotment as under:
(i) 31,19,998 shares to Hero Cycles (P) Ltd., Hero Investments (P) Ltd., and
Bahadur Chand Investments (P) Ltd.
(ii) 31,20,000 shares to Honda Motor Co. Ltd., 1apan and
9,59,987 shares to friends and association of promoters. Out of the balance
48,00,000 shares, 2,40,000 shares were reserved for subscription by the
employees of the Company and 96,000 shares by business associates. The
remaining 44,64,000 shares were offered at par for public subscription during
November
1985
The Company embarked on its 2nd phase of expansion of increasing its installed capacity
from 1,20,000 to 1,50,000 vehicles per annum by the addition of several critical aliminium
and steel components
1986
36,00,000 rights equity shares issued at par in prop. 3:10
1987
The Company offered 6,00,000 - 15 secured redeemable non-convertible debentures of
Rs 100 each for cash at par on rights basis in the proportion 1 debenture: 18 equity shares.
Another 3,00,000 - 15 debentures were allotted to retain oversubscription.
Thedebentures were to be redeemed at a premium of Rs 5 per debenture on the expiry of
the 7th year from the date of allotment of the debentures
3,75,000 rights equity shares issued at par in prop.3:10
1989
The Company introduced a new model "Sleek" during 1uly.850 No. of equity shares
forfeited.
1990
The Company was planning to launch a new model motor cycle-CD 100 SS sutiable to
semi-rural conditions. In the domestic market the Company was reported to have a market
share of 46.- 850 forfeited shares reissued
1994
The Company proposed to expand the capacity of existing plant at Dharuhera to 2,40,000
nos. per annum. Another plant with an installed capacity of 1,50,000 nos. per annum at
Gurgaon Industrial Estate was being set up.
The Company issued 39,79,500 bonus shares to the existing shareholders in the ratio of 1:4.
The Company also issued 28,557 number of fractional coupons representing 14,250 shares
against which shares shall be allotted to presenting the same for consolidation and
allotment. The Company's production and turnover increased to 1,83,490 motorcycles and
Rs.483.85 crores respectively due to growth in demand for two wheelers and declining
inflation.
1995
14,420 bonus shares issued by way of consolidation of fractional coupons. - A new
Technical Collaboration Agreement has been signed with Honda Motor Co. Ltd., 1apan for
the period up to the year 2004 which includes technology related to models of higher
Engine displacement. The Company allotted 39,79,500 No. of Equity Shares of Rs. 10/-
each as Bonus shares on 7th February, by way of capitalization of General Reserves.
The Company had issued 28557 No. of Fractional Coupons representing 14.250 shares
against which the Shares shall be alloted on presenting the same for consolidation and
allotment.
1997
Hero Honda Motors has launched its newest motorcycle, the Street, a 100 cc bike designed
for use in congested urban traffic conditions. Hero Honda Motors Ltd (HHML) has set up
a new motorcycle plant in Gurgaon, near Delhi for the manufacture of the Honda Super
Cub 100 cc step thro bike. Hero Honda has set up a new state-of-the-art plant, heralding a
new phase of development of motorcycle industry in India, to provide the most modern and
technologically advanced production facilities
Hero Motors of the Rs.1,600 crore Hero group, as part of its globalisation plan, has set up a
plant in Brazil for manufacturing hero winner scooters.
A new step thru model `Street-100' with unique feature was launched on 24th 1anuary.
1998
The company proposes to increase the share capital to 5 crore equity shares of Rs. 10 each,
4 lakh cumulative redeemable preference shares of Rs. 100 each and 4 lakh cumulative
convertible preference shares of Rs. 100 each with power to increase or reduce it from time
to time. The company further proposes to capitalise Rs. 19,96,87,500 from general reserve
to share capital through issue and allotment of bonus shares. Altogether, 1,99,68,750 fully
paid bonus shares will be allotted and distributed to members of the company holding
equity shares of the company in the proportion of one bonus share for every fully paid
equity shares of Rs.10 each. Motorcycles major Hero Honda is considering entry into
scooters in collaboration with partners, Honda Motors, after the 1apanese company
decided to walk out of Kinetic Honda, their scooter venture with the Firodias of Pune.
Honda Motors recently pulled out of its joint venture with the Firodias in which it held a 51
per cent equity stake.
Honda Motor Company Ltd of 1apan (Honda) and Kinetic Honda Motor Ltd (KHML)
have signed a five-year licence and technical assistance agreement under which KHML will
continue to receive the technical knowhow, critical vehicle parts and access to Honda's
markets even after the sale of Honda stake in KHML to Kinetic Engineering Ltd (KEL).
- The Company changed the paradigm in two-wheelers by launching the most powerful
and fast bike- CBZ with a unique feature of Transient Power Fuel Control (TPEC)
system.
23,962,500 bonus shares issued in prop. 1:1.
1999
Hero Honda Motors Ltd (HHML) and 20th Century Finance Corporation Ltd have signed
a Memorandum of Understanding (MoU) for financing of Hero Honda motorcycles.
The company, a joint venture between Honda Motor Company of 1apan and Hero group of
India to produce four-stroke motorcycles, also aims to increase its share by 1 per cent to
38.6 per cent during the current fiscal. Leading two-wheelers manufacturer Hero Motors
has formed a joint venture with Briggs Stratton of US to develop and manufacture four-
stroke engines for mopeds and scooters in India, a top company. Honda Motor Company of
1apan has decided to re-enter the scooter market in India as also foray into three-wheelers
in a joint initiative with its existing joint venture company Hero Honda Motors Ltd.
2000
Hero Honda Motors Ltd. and Tata Finance Ltd. have signed a national tie-up agreement.
The Company is the largest manufacturer of motorcycles in the country. The Company will
relaunch its stepthru Stree Smart on Baisakhi 13th April. Hero Honda Motors Ltd
(HHML), has launched an upgraded version of the existing step-through motorcycle - the
Hero Honda Street. The Company was ranked as the 9th Highest Value Creator among 12
industry groups within the Bombay Stock Exchange top 100 companies over a five year
period (1994-99).
2001
Hero Honda Motors Ltd. has launched a new 100cc motorcycle named `Passion'. The
Company has secured shareholders' approval for splitting one equity share of Rs 10 each
into five equity shares of Rs 2 each in the ratio of 1:5.
Hero Honda Motors Ltd. has become the largest seller of motorcycles amongst all Honda
companies and ventures in the world by selling one million motorcycles during the current
financial year. Credit rating Agency Crisil has reaffirmed outstanding `AAA' rating
assigned to the proposed Rs 15 crore non-convertible debenture issue, Rs 16 crore
commercial paper programme and fixed deposit programme of Hero Honda Motors.
Promoter-Chairman of the country's largest motorcycle manufacturing company, Hero
Honda Ltd, Brijmohan Lall Munjal has bagged the prestigious Ernst & Young
Entrepreneur of the Year (EOY) award here on September 27.


CLASSIFICATION OF THE INDUSTRY

The two-wheeler segment can be categorized into the scooter, mopeds, and motorcycles.
Motorcycles: this segment has shown the best performance in the recent years. The market
leaders in this section are Bajaj Auto. TVS, Mahindra, Hero Honda. The splendor is the
most popular segment among motorcycles.]
Two Wheeler Industry
It wasn`t an easy year for the two wheeler industry. Rising interest rates and the economic
slowdown resulted in delayed consumer decision making and a rise in loan defaults. Over
the course of the year, banks withdrew financing facilities from satellite towns. The share
of financing, which had increased rapidly to 50-60 per cent of the total retail sales by early
2007, has now come down to below 30 per This came as a major setback for the two-
wheeler industry. Ongoing government investments very clearly emphasis inclusive growth
through improved connectivity, job-creation and improving quality of life. The rural road
outlay has been upped by close to 60 per cent, the budget for the Urban Renewal Mission
has been hiked by 87 per cent, and fund allocation to the ongoing National Highways
program has been upped by 23 per cent. Importantly, India has added fresh impetus to its
flagship job creation program for rural India: the National Rural Employment Guarantee
Scheme. During 2008-09, this scheme, which provides 100 guaranteed days of work a day
for the country`s rural poor, provided employment opportunities to more than 44 million
households last year; a year ago, 33 million households were covered. During the year,
there have been important developments in two wheeler industry. The competition has
strengthened though there are hardly any new entrants into the industry. There is an
increasing emphasis on price and this has led to cost cutting efforts all across cent. the
industry, thereby, making the customer an ultimate beneficiary. The trend also saw
introduction of new motorcycles with capacity ranging from 100 to 250cc bikes. We
anticipate that many more new models will be launched during the year and provide
customers plenty of choice at competitive prices. Businesses cannot consistently grow at 25-
30 per cent. Each business has a tendency to taper and plateau after attaining a particular
size. An annual growth rate of 10-12 per cent over a period of time is extremely healthy.
The TCS study rankings are conducted at the motorcycle segment level to provide
comparisons among similar groups of motorcycles. Motorcycles ranking highest in their
respective segments for TCS are: Hero Honda splendor plus (best standard motorcycle
segment); Bajaj pulser (best executive motorcycle segment); Hero Honda karizma (best
premium motorcycle segment); and Royal Enfield Bullet Electra (best cruiser motorcycle
segment). "The relatively low score for the executive segment indicates that most
manufacturers have fallen short of meeting the high expectations of these buyers,".
SEGMENTATION, TARGETING & POSITIONING
From the current segmentation, targeting & positioning and consumer surveys we found
that our client has targeted the following segments
+ Congested areas of urban cities.
+ Males/Females between the age group of 18-36
+ Middle class people , mostly officials & executives The client analysis from our
questionnaire it was found that our client has targeted the right segment HHML is
overlooking one feature in bike which is its low maintenance cost and reliability (i.e. less
chances of breakdown) which is absent in its competitors. Therefore, in order to meet the
sales target, two option are available with the client, one is to redesign the bike and second
is to reposition the bike as ~Bike with one time investment. Since redesigning of bike may
involve a big task and huge investment therefore we recommended repositioning the bike.

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 1apan 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:

Production, sales growth of the industry

The two-wheeler companies have been operating at high capacities due to high growth
rates between 2009 and 2008. The growth is expected to lead to increase in the capacities
from present 52 lakh units to 65 lakhs per annum in the year 2009-10, whereas the actual
production estimates by that period at an estimated growth rate of 18 is only 60 lakhs.
Charts showing two-wheeler industry growth rates Demand
In India the two-wheeler provide an easy and popular mode of personal transport for the
middle classes. With public transportation system being inadequate and ineffective the
demand for the two wheeler is likely to rise. The two-wheeler sales are expected to touch
the 5 million mark by the end of the decade as against the annual sales of 35,49,271 in 2008-
09. Technology With liberalization and the increasing competition. The two- wheeler
industry has witnessed technological changes. The four- stroke engine is being introduced
in place of the traditional populations and fuel inefficient two stroke engine. The smaller
capacity engine with the electronic fuel injection is also being used. Bajaj auto is now
feeling the need to increase its technological competence. Wit the competition cashing in on
the technological competence for their collaborators. Emphasizes being laid on lighter and
fuel- efficient vehicles. A class of vehicle having fuel efficiency of a moped and sleekness
and style of the motorcycles called scooter is growing. The vehicles offer a fuel efficiency of
60-65 km p/h. They enter into new segment, Bajaj Auto has come out with TVS with Scooty
pep and Hero Honda has come out with a Pleasure and upgraded version of sleek.
Government policy The excise duty on two-wheeler , which has previous 10 percent to 30
percent according to the engine capacity, was rationalized is only two categories size. 15
percent for 75 cc engine capacity and 25 percent for above 75 cc engine capacity the excise
duty structure has been left untouched since the 1993-94 budget.
The Indian two-wheeler industry is experiencing a major shift in its shape and structure.
The established players in the industry are taking a hard look at their portfolio of products
and are in the process of reshuffling them to meet the expectations of customers. The
beneficiary is of course the consumer, who has an increased array of products to choose
from. The last four-five years have brought about a great change in the consumer
preferences for two-wheelers. The market leaders of yesteryears are being driven to
maintain their leadership position in the forthcoming years. Those who have had a great
going in the last few years are fighting hard to retain their new supremacy. The two-
wheeler industry is perhaps the most happening place in terms of new models launched,
upgraded products and innovative marketing techniques. Gone are the days of regulation
when the production of scooters and motorcycles was limited to two or three brands and
the number of products produced was decided by the Government; today the Indian two-
wheeler market is highly competitive with numerous players who offer anything and
everything a consumer demands and that too at affordable price. From a sellers market
where one had to wait for a scooter for 12 years to the days when you can just walk into
any showroom and drive out in the vehicle of your choice, the market of two-wheelers in
India has come a long way. But this is only the beginning of the transformation

Marketing and The Distribution

Like any other emerging country, India experienced the knock-on effects of the global
crisis during the year in review. The effects were felt through the monetary, financial and
real channels. Drying up of global finance impacted from the middle of the fiscal impacted
domestic capital finance; and corporate earnings came off peaks. In April 2009, Reserve
Bank of India predicted that the Indian economy's growth for 2008-09 would slow to 6.6
per cent, breaking an excellent five-year growth sequence. There were two dimensions to
the economic slowdown. In the first half, inflation ran into double digits as a result of the
global crude shock and the global food grain shortage. To control inflation, the RBI
clamped down on money supply, and reduced liquidity in the economy. By the time
inflation started coming under control, domestic interest rates started shooting up.
Meanwhile, the global crisis erupted, putting further pressure on liquidity levels. By
October 2008, slowdown was clearly apparent in export-intensive sectors, both in the
manufacturing and service side. By December, the slowdown turned into de-growth. The
cutback in demand from Europe and the US was so sharp that even a competitive rupee,
which devalued by around 12 per cent during the year, couldn't act as a buffer. By
December 2008, the growth momentum of the first six months was lost. Planned investment
projects were shelved; live projects faced a shortage of funds as credit flows dried up. As
money became dearer, pay packets became slimmer and risk aversion grew both from the
demand and supply side. Compulsions of coalition politics at the Centre and the impending
Lok Sabha elections didn't help either, and slowed down reforms and implementation of
projects, particularly in critical sectors like roads, ports and power. The worst hit was the
manufacturing sector. From the second half of the financial year, the index of industrial
production contracted on three occasions, remained close to zero on two occasions, and was
mildly positive only once. Two -Wheeler Financing Though two-wheeler are the most
preferred from of transport in India, the fact remains that it is a lower end market
product. Most two-wheeler manufacturer like Bajaj Auto and kinetic engineering have set
up their own finance company since organized financiers do not think the returns are
particularly attractive. The argument given by some financiers is that the price of a
Yamaha or Hero Honda is so high that people prefer to buy a second hand car instead.
This is particularly true of small town where people desire to own a car and they have the
means the two wheeler is then only a second vehicle for the family. MARKET
MECHANICS: Since 1985, when the first Hero Honda it has been and instant hit. A
mileage miser with just about adequate performance further backed by image of Honda
and Hero Cycles brand of aggressive marketing, it climbed up the sales chart outselling
every other motorcycle by ten of thousands every year. Over the years, company has
received its share of accolades, including the National Association of India Award against
200 contenders


4PS OF MARKETING
Hero Honda Karizma
Now is the time for you to drive in style the new Hero Honda Karizma D.N.A in India. Any
Hero Honda Bike is a great product to covet and own. The Hero Honda Karizma price in
India is reasonable and the Bike surely appeals to all youngsters as a personal choice and
as an ideal city commute. The Karizma Bike has a neat look along with a great rev-up and
acceleration. Take a few minutes to read the new Hero Honda Karizma Review here!

The Hero Honda Karizma may be the most modern bikes presently on Indian roads today.
Until you have really seen it with your own eyes you don't know what it means to see a
zKarizma. The extremely streamlined angles and body frame, the stunning colors, the
powerful 225 cc engine, the magnesium alloy wheels, and Hero Honda reliability makes the
Karizma a bike to covet.
Looks
Diamond shaped tubular chassis
18 inch black magnesium alloy wheels front and rear
Chrome Plating and Gold Colored pipes for the black Powder Coated Exhaust
Trapezoidal Headlamp
Knee recesses on the sleek 15 lit tank enhances looks
amazing front panels
crystal clear headlamp
black powder coated exhaust pipe
three pod instrument cluster with a digital fuel indicator
Control
Users reach speed of 120-130 kmph easily
Transmission system is sport bike like shift pattern - 1 Down, 4 Up
Partly digital console
Ignition : Digital - CDI (AMI-Advanced Microprocessor Ignition System)
Electric start
Powerful throttle
Stupendous braking
17 bhp at 7000 rpm
Comfort
The suspension has been so set as to provide minimal backaches
Ride for the pillion is equally comfortable as the rear suspension is generally set
perfectly for the average Indian pillion
Front disc and rear drum brakes perform without the least glitch or complaint
High quality front and rear suspension gives an extremely comfortable riding experience
135 mm wheelbase adds stability
Superlative riding experience
Excellent cornering manners
Mileage and Economy
Average mileage is about 40 kmpl in city conditions
CV carburetor with a variable ignition system that alters timing based on engine power
and throttle position
Sleek looking tank holds 15 liters of petrol

Product Range and New Models: The Company's product range includes "Splendor+"
which is the largest selling motorcycle brand in the world with over 10 lacs vehicles sold in
2008-09. A cumulative over 40 million customers are the real foundation of the company's
strength. The total shall soon cross the 7 million mark. Its volumes have been growing at a
strong pace of 40 p.a. over the last five years. The Company launched a new 100 cc model
"Passion pro" in 1une 2008. The motorcycle is focused on style and contemporary design,
compared to the Company's earlier motorcycles that were focused on utility and/or style.
"Passion pro" has received an excellent response from the market and has established itself
well, with sales reaching a level of 29000 units in august 2008, within just three months of its
launch

PRICING
Pricing is a important component of marketing mix of the firm. Determining the prices of
different products of a firm is very difficult task of the marketing manager. Price denotes
money value of a product. If represent the amount of money for which a product can be
exchange. In other words, prices represents the money which the buyer pays to the seller
for a product price represent the exchange value of goods and services in terms of money.
Price is all around. Price factor has very well been touched by the manufacturers. The
pricing strategy of the company is very set. they price their product according to the cost of
production and also by keeping an eye on the price of the competitors of that segment and
demand of the product in the market. A pricing strategy that ensured an average
manufacturer margin that game dealer an adequate return and created a reputation with
consumers like ~a company selling a good quality product at a reasonable price. Industry
focus them selves the low cost producer with good quality and aimed to maintain the price
advantage in every market of two wheelers. Hero Honda group ensures an easily affordable
pricing through excellent transportation to common man. I fixes customer centric pricing
that provide customer total satisfaction. Hero Honda`s pricing objectives are: List price,
Discount , Financing schemes, Credit terms , Maximize profits Hero Honda group ensures
an easily affordable pricing through excellent transportation to common man. It fixes
customer centric pricing that provides the customer with total satisfaction.
DISTRIBUTION
HERO HONDA HAS direct contact with the dealers. There are no middlemen involved.
The dealers directly sell to the customers. The channel is of 1st level which has only the
dealers as the link between the customers and the company.
Distribution Channel
Manufacturer
Dealer
Sub-dealer Customer
How Promptly The Work Done? The dealers keep in contact with the manufacturer or the
head office or the regional office. As the order fax reach the manufacturer, as in Delhi it
takes only one-nights time of transit from the manufacturer to the dealer. The dealers in
far off places like in Assam, South India and others, it takes a maximum of 7 days to reach
the placed order due to the transit. Basically, the delay of delivery of the order is basically
due to the transit time. The transit time in near places is not more than one night. How The
Transit Done? The manufacturer's have their own transportation facilities. The
manufacturers have trucks which can load 18-25 units of bikes at a time, individually.
When the units are dispatched from the factory, or manufacturing it, it is in its standard
form and accessories like seat cover, handle cover, back-looking glass and others are not
part of the standard unit of the two wheeler of Hero Honda. The transportation trucks
straightway reach the warehouses of the dealers. In case the warehouse of the dealer is not
there then the trucks straight away come to the dealers showroom where they usually have
some place for storing the stock as in the case of Daryaganj dealer. The Daryaganj dealer`s
stock is stored in the place
1ust behind the show room. For this particular dealer the transportation cost to bring the
units from the warehouse to the showroom is saved and thus the distribution cost is saved.
But there are dealers like in Green Park, this dealer does not have their ware house nearby
to the showroom which means that this dealer has to keep their own transportation system
to bring the units from the warehouse to the showroom which is not cost effective. The sub-
dealers usually hire the trucks to get the units delivered to their outlets. Sometimes the
dealer`s truck is used by the sub-dealers to carry the units to their outlets on goof faith. If
the sub-dealer is the part of the same dealer then the transportation charge are less and if
they hire it then the cost is high for the sub-dealers. What Does Customer Want? The
customers of Hero Honda, according to the Asst. Manager (Sales) are very particular about
the colors that Hero Honda offers in its wide variety of scooters. He said that the customers
are very much aware of their purchase. Gone are the days when the sales people could
influence the buyer to buy a particular product. Almost 90-93 of the customer, whoever
comes to the showroom. Usually comes after he/she had made a decision. So, the work of
the sales person is less. The rest 7-10 have some doubts with regard to the purchase of
Hero Honda. It is here, where the sales persons have to do some work in convincing the
customers about the scooter. The sales person in this regard convey the customers about
the mileage, strokes and also the parameters that the customers enquire. When Do They
Sell More? Hero Honda scooters peak season selling state from the month of April, just
after the budget and after the month of November the sells become slack. This is mainly
due to the people think that the budget can reduce the prices and moreover the budget
usually brings in a difference at Rs. 1000 - 1500. This is an important factor for increasing
in sells. Usually in the month of November the manufacturer comes with re-modeling and
also new launches. People wait till the month of April to see whether the prices are slashed
or not. How Is The Price Determined According To The Change? Manufacturer, on the
basis of the cost of production determines the price and the factors like tax and others.
Usually the sales tax on the two wheelers is 8 but in Hero Honda it 4. This is because
Delhi Government has found out that the pollution from Hero Honda is very less due to the
catalytic converter which every model of Hero Honda have. The government has identified
that by using the catalytic converter Hero Honda is helping the environment which is a
social cause. Hero Honda Bikes not only have market in India, but also in abroad. To
maintain the differences in market of the different companies it takes the help of the local
manufacturers or the dealers outside for the distribution of their scooters smoothly. How's
The Relationship Between The Manufacturer And Dealers? Improvement of sells is the
first and foremost concern of the trading people. He said that they are given the dealership
to sell the products of Hero Honda and the relationship is better when the sells are more.
On an average, sells around 5 to 6 scooters per day. The company representatives keeps in
contact with the dealers over telephone and keeps an pressuring the sales managers of the
dealers to improve the sells. The Dealer have 2 sales staff in the showroom and 7 more sales
staff who moves around their sells territory on the call of the customers. The
representatives of the company visit the dealers weekly or fortnightly. As per Mr. Ayub,
the representatives of the company keeps on pressuring the dealers to increase the sales as
in the case of the aforesaid dealer. Earlier they use to sell around 5-6 scooters a day and
now they are asked to sell around 8-10 scooters on an average per day. The company keeps
a very good relationship with the dealers. As the launch of the new models the company
calls on all the dealers for meeting. In these meetings the company executives discusses the
strategies that the company will follow during the forthcoming months. The company
accordingly asks the dealers to change their strategies. Things like the target of sales sells
for the forthcoming year, what should be the attitude towards the market, the company's
forecast and many such issues are discussed in these meetings. The company also meets
with the dealers during the time of new launch. Here the company invites the dealers and
also the sub dealers to train them about the new product that is going to be launched. The
company gives the dealers and sub dealers mechanics a training of around 15 to 20days.
The most important fact about the dealers of Hero Honda is that they organize training
programmes for the local mechanics who doesn't have any affiliation from any brand two-
wheelers. These mechanics who are running their business in very small scale are invited to
the training camps of the dealers at the launch of new models. The dealers improve the
relationship at personal level with these local garage by giving them gifts. Sales forecast So
depending on the market demand, the dealers place the order. The dealers make a sales
forecast taking into consideration the market demands the past years sales in the same
month, and also whether the present season is a peak slack season. Once, the sales forecast
is made, then the dealers place the orders depending on the forecast.
ADVERTISEMENT
Advertisement, local events sponsorship and promotions and inviting a prominent
personality for the inaugural or first like delivery function would contribute effectively in
generating a wider local interest and attention. Hero Honda`s latest DKD commercial its
two brand starring its Ambassador and India`s heart throbs, Hritik Roshan and priyanka
chopra, truly reflects the multi fact roles that today`s new generation plays. The
commercial reflecting the charisma and vibrancy of these two stars, takes Desh Ki
Dhadkan to dazzling new heights. It is young, colorful and vibrant and represent the icons
of contemporary times. And it will go a long way in strengthening the leadership status of
the product by the mile. The new commercial is powerful film repeat with an impressive
storyline. The effort to pack the story, drama and impact in just 60 seconds was
phenomenal challenge itself. The idea was born itself. The idea was born out of the very
essence of ~Hero and Stars. Keeping in mind would cause on the drama and impact it
would cause on the audience. It is a commercial packed with action where today`s heart
throbs, Hritik roshan and Priyanka Chopra, are seen tackling new roles. The story being in
a field adjoining a hill with Hritik and priyanka on Hero Honda bikes and Pleasure
respectively. Both Sameer and Aditya win lifetime opportunity act with Hritik and
Priyanka, the two star heartthrobs of millions in India and all four will be seen in action in
the new commercial DKD. These are some of the Slogan for every product (Bike) and these
are following:CD-100 : Fill it, shut it, Forget it.
Celebrity Endorsement: Hero Honda has roped in film actor Hrithik Roshan, Priyanka
chopra, Mohammed Kaif, Harbhajan Singh, Zaheer Khan, Yuvraj Singh and Virender
Sehwag as its brand ambassadors. Announcing the formation of the Hero Honda `Team
Ambition', Mr. Pawan Munjal, said, "Indian Cricket and Hero Honda have both made the
nation proud and helped the world recognize India's potential. The `Team Ambition' has
many similarities in personality with Hero Honda, such as `splendor of performance',
`passion to excel' and `ambition to win". In their role as brand ambassadors, the `Team
Ambition' would soon star in Hero Honda's new commercials. As part of the association,
Hero Honda will also find prominence on the bats to be used by Yuvraj Singh and Zaheer
Khan in the forthcoming cricket events.
Sourav Ganguly, who has been associated with Hero Honda since 2000, said, "Through
Team Ambition, we are looking forward to communicate more directly with over 6 million
Hero Honda customers in India and the millions more added every year." Says Mr. Anil
Dua, Senior Vice-President, Marketing and Sales, Hero Honda, "Hero Honda has been
promoting cricket for over a decade now. Starting with the memorable Hero Cup in 1993,
we have adequately benefited through the promotion of this national fervor. Cricket is one
sport which binds our entire nation and is, perhaps, the largest platform in the world,
enabling companies to communicate with millions of consumers in the shortest possible
time." The `Team Ambition' would also provide coaching and guidance to the budding
talent in the country and support cricket projects undertaken by Hero Honda in India and
abroad, a company release said. Hero Honda will keep up its promotional activities with
emphasis on cricket and entertainment. The company claims that its Desh Ki Dhadkan
campaign featuring brand ambassadors priyanka chopra and Hrithik Roshan has received
a very good response and helped build the company's image. Last year, the company spent
around Rs 90 crore on advertising and marketing.


SALES PROMOTION
A fundamental concern of any customer during the purchase Of a double product is the
quality and provision of efficient service. After all queries on product quality, performance,
features and benefits have been satisfied, the customer invariably focuses on the service
factor for the product as the end objectives is to ensure trouble free operation. In this
respect servicing acquires paramount importance and Hero Honda`s focus and emphasis
on these key result area have been instrumental in establishing its superiority and
technological edge in the market. The host of training programmes and relationship
enchantment activity additionally backs the spates of servicing camp, organized
throughout the country. The active support of servicing and co-operation rendered by the
dealer in the form of logistics and infrastructure further aid in making such programmes
highly collecting information meaningful and valuable. They are doing free check up
camps reinforce customer trust. Service advisor`s from a customer about his satisfaction
level after the servicing of their bike. For the promotion of products the Hero Honda dealer
rally. Hero Honda is organizing so many events in sports, cultural programmes, film -
festivals etc for the promotion of the product eg. Hero Honda NKP salue Challenger
Cricket Cup brings new talent to the force, MALTA 1unior Tennis Tournament, Hero
Honda social`s Commitment rehabilitating children affected by violence, operational,
Relief, donation for drought relief, Rota Trade Mela 2007, Road Show, Training
programmers to enhance quality of service, free back up camps reinforce customer`s trust,
ride safe programmes held for Delhi Traffic Police, Mobile Revolution in servicing etc. The
powerful benefits of test rides, special promotions and communication drives to draw in the
initial customers, preparation of Accurate customer information forms to create a
customers database, offer of finance facility and active steps to impart specific transiting at
the dealer`s sales and services levels would be essential steps to achieving the brand and the
company objectives. Mr. Uppal also touched upon the servicing policy for passion and
cautioned the invitees to remain alert for substitution in Hero Honda brands among its
customers. The sales increase would have do be targeted from new customers and not its
existing ones. The key attitude that would constantly contribute towards sales would be
total and passionate commitment.

PUBLICITY
For the purpose of publicity Hero Honda is always organizing different events, etc. and
they are always inviting celebrities from film, sports, media, politics, etc. There are some of
event and parties are as follows: The Hero Honda stardust millennium Honours and BF1A
awards for Bengali films. In a gesture that honors and salutes some of the finest talent in
south Indian Cinema. Hero Honda also security sponsored the 20th Cinema Express
Awards. The sponsorship of the women`s World Cup in 1997 came next, then the ICC
Cricket World Cup 2004. Hero Honda, the largest two wheeler leader in Indian sponsored
the 21st Cinema express Awards. Marketing Convention 2006. They are priyanka Chopra,
Miss World, Lara Dutta Miss Universe, Diya Mirza Miss Asia Pacific, Sourav Ganguly
Indian Cricket Captain, Daler Mehndi, Mr. Harsha Bhogle the famous cricket
commentator etc. Dandiya programme at Kota and Banswara. In this Ms Sunita Rao, the
popular singer entertains at the festivals at the Dandiya Programme. Thrill and the
excitement at the Hero Honda Master Golf tournament. In this tournament Kapil Dev,
virendra sehwag, Pronoy Roy, Milkha Singh and so many celebrities were present. Galaxy
of stars add to the glitter Surat rang 2008. Pinaz Masani, the famous gazhal singer, Kavita
Krishnamurthy the famous play back Singer, Shibani Kashyap the pop singer are the main
highlight of this programme.
Hero Honda sponsor`s 26th Cinema Express Awards and the main celebrities of this
programme are evergreen Hero Devanand, Film Makers Hero Honda sponsor Army
ordnance Corp Motor Cycle Expedition. 1oy of buying At Hero Honda, we believe in
providing the best of service, as reflected in our corporate We Care` philosophy. An
extension of this is the passport programme, popularly known as suhana safar`. This
unique programme aims to build long-term relationship with customers.
The Passport Programme membership benefits customers in a number of ways:-
+ For new customers, a change to win a Hero Honda Splendor or Rs.50,000 in cash; and a
one -year accident incident insurance cover worth Rs. 1 lakh
+ Special rewards and discount on accumulation points
+ Invites to exclusive local events
+ Attractive discount on spare parts
+ And much more to come
REVIVING UP TO ENTICE BUYERS With manufacturer offering attractive finance
schemes, now is a good time to buy, says Dr. Pritam Singh. TWO- WHEELER sales have
been increasing thanks to the continue thanks to the continuing upward swing in
motorcycle sales. To make sure that this happiness continues and that they grab the largest
share of the pie, manufacturer have been offering the customers finance schemes. Hop
across to the Hero Honda dealership. The industry leader is offering finance option from
ICICI, Centurion Bank and Tata Finance All normally offer a 9.9-percent rate of interest
on two-wheeler finance, though there are other schemes too. Keeping in mind the ongoing
festive season, Hero Honda is offering a Special 8.4-pecent rates of interest on two-wheeler
finance Another schemes is the low EMI schemes where one has to pay just 777 every
month(for 48 month). But Hero Honda offers this for on 65-70 percent of the total amount
against the usual 90-percent. Bajaj has tie-up with Centurion Bank, apart from its own
two-wheeler finance. The prevailing rates are 11.9 percent against a finance of 8590
percent of the total value. Kinetic also has its own finance arm besides its dealer its dealers
can get your vehicle financed through Tata Finance. The rates are 9.9 percent but there are
many varying rates of interest available. There is a heavily advertised schemes of 2.99
percent rate available on a limited period. TVS offers the same 9.9 percent rate of interest.
yamaha has a tie-up with the Association apart from the other option. Finance is easily
available for up to 85-90 percent of the total value and the rates are 9.9 percent. The
interest rates vary according to the period of loan and the amount.