Page 319 - DMGT509_RURAL MARKETING

Rural Marketing

Notes including Kinetic Engineering, LML and others account for the remaining 20 percent of the
market. The industry can be divided into three broad segments: Scooters, motorcycles and
mopeds. In the scooters segment Bajaj is the market leader, Hero Honda is the market leader
in the motorcycles segment and in the segment of mopeds, TVS controls the major chunk of
the market. Most Indian players in the two-wheeler industry had been into some kind of
strategic alliance, technical collaboration or joint venture with foreign players, mainly
Japanese firms. Hero-Honda, is a joint venture between the Munjal-promoted Hero Group
and Honda Motor Co. of Japan; TVS-Suzuki was an alliance with TVS and Suzuki Motors (till
September 2001); Bajaj-Kawasaki a joint venture between Bajaj Motors and Kawasaki; and
Yamaha-Escorts, a joint venture between Escorts and Yamaha Motor Corp. (till June 2001)
Hero Honda

The story of motorcycles in India is a good case study of how fortunes change overnight.
Motorcycles in India were hardly popular and Hero Honda was the only player, which
had carved a niche for motorcycles. Its market was small and limited while scooters ruled
the roost but today, it is one of the biggest success stories. Its established presence in the
motorcycle segment had stood it in good stead in this phase of boom in motorcycle sales.
The fact that no other player commanded the brand name which Hero Honda enjoyed in
motorcycle segment also added up to its success. In addition most other players such as
Bajaj, TVS, LML etc., took time to assimilate the change in customer preferences and come
up with models to buck the trend. Meanwhile Hero-Honda’s designs were ready on the
platter. Its R&D had been able to come up with models such as CBZ, Passion etc., in the
premium segment to capture the hot demand. Riding high on the expectations of consumers,
Hero Honda has successfully crossed over the one million units mark in motorcycle sales.
Its popular model Splendor is the largest selling motorcycle in the world. To give a boost
to its youthful image the company has chosen Saurav Ganguly and Hrithik Roshan as
brand ambassadors. The company has also embarked on in-film advertising in a
forthcoming Hindi movie. In order to expand its reach to rural areas, the company has
recently launched a marketing initiative in towns with a population of less than 50,000 in
Uttar Pradesh. As a part of this initiative, it started a mobile workshop and showroom,
through which people will be able to gather knowledge about the companies’ vehicles
and can also buy them. These mobile marketing efforts are focused on Splendor and Joy
Executive Summary

Hero Honda Motors Ltd is one of the leading companies in the two-wheeler industry. At
present, it is the market leader in the motorcycle segment with around 47% the market
share during FY 2000-01. During the year, the company posted a 41.05% y-o-y rise in
turnover to 31,686.5mn in motorcycles which was driven by a 35.17% y-o-y rise in
motorcycle sales volumes. The company has emerged as one of the most successful players,
much ahead of its competitors an account of its superior and reliable product quality
complemented with excellent marketing techniques. The company has been consistently
addressing the growing demand for motorcycles and has a cumulative customer base of
over 4 million customers which is expected to reach 5mn. mark with the rural and semi-
urban segment being the new class of consumers. The Indian two wheeler contributes the
largest volumes amongst all the segments in automobile industry. Though the segment
can be broadly categorized into 3 sub-segments viz; scooters, motorcycles and mopeds;
some categories introduced in the market are a combination of two or more segments e.g.
scooterettes and step-thru’s. The market primarily comprises five players in the two-
wheeler segment with most of the companies having foreign collaborations with well-
known Japanese firms earlier. But most of the companies are now planning 100%

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