ACTIVE HONDA CHAPTER – I GENERAL INTRODUCTION PART A ABOUT INDUSTRY India is the third largest producer of Two-Wheelers after Japan and China, and the second largest consumer after China, despite the poor road infrastructure and the meagre purchasing power, the two wheeler industry in India has enjoyed a wider appeal with the masses as a means of private transportation. Two-wheelers are usually classified in 3 types Scooters, Motorcycle and Mopeds. A look at the post independence era that the Two-wheeler industry has witnessed three distinct phases of growth. BRIEF HISTORY Phase – l (1947 to 1984): -The Indian Two-Wheeler structure was quite monopolistic during the first 37 years since independence when volumes grew at a slow pace. Bajaj auto had an undisputed leadership oven the market, which was a major player in the industry consumer, had to literally wait for years before acquiring a Bajaj vehicle. The industry registered a compounded growth rate of 12% during the seventies. Phase – ll (1984 to 1994): -The second phase began in the mid eighties when the scooter was partially deregulated. This phase saw Japanese companies typing up with SRI GOKULA COLLEGE OF BUSINESS MANAGEMENT KOLAR Page 1 ACTIVE HONDA domestic players and newer models were introduced in specific segments. Even through the demand was apparently strong for scooter, most of the Japanese ventures like Kawasaki Bajaj, hero Honda, TVS Suzuki opted to produce motor cycle except for Kinetic Honda which choose to manufacture scooter. The annual growth rate for the two-wheeler industry during the phase stood at 16.40% this phase extended till the early nineties and there was a succession during the last part of this phase i.e. 1992-1993. The production of scooter fell by a step 16% in 1992-92.and by 8% the following years. Phase – lll (1994 to … … ): - This phase began in 1994 when sales started accelerating. The market saw a step increase in the demand. In 1995, the industry produced about one million scooters, 6 lakhs motorcycle and 5 lakhs mopeds. The motorcycle segments sales grew by 27.80% from April – 1995 to December –1995. During the same period, scooter sales grew by 17.26% and mopeds by 20.70%. Almost all companies are going in for capacity expansion. GROWTH AND PROSPECTS : Gearing up for new millennium: - The motorcycle industry is growing very fast in India. It is emerging as a big motorcycle market – The reasons for this are: • Affordability • Easy finance scheme SRI GOKULA COLLEGE OF BUSINESS MANAGEMENT KOLAR Page 2 ACTIVE HONDA • Life style • Value for money • New technology Both the two-stroke and four-stroke motorcycle will be well equipped to combust pollution by 2000AD. By the Euro norms, pollution control will become very stringent and only those manufacturers will survive, who have very strong R & D for quality control. All vehicles will have to meet these norms. This is very important for the motorcycle industry. These days, motorcycles are not just for the Indian market. Indian bikes are now being manufactured by keeping in mind both international standard and the world market. Motorcycles today have become a vehicle for the middle class and upper middle class. Quality will sell and good product will run, come, what may. Gone are the days when we could expect a customer to walk in. Today the trust is on the concept of selling the vehicle, which includes marketing, advertising and after sales service. The Euro ll norms will have to be followed strictly. In order to meet the Y2K pollution norms (Euro-ll) all the other motorcycle manufactures have to adopt either SRI GOKULA COLLEGE OF BUSINESS MANAGEMENT KOLAR Page 3 ACTIVE HONDA four-stroke technology on catalytic converter fitted in their existing two-stroke motorcycle. As per the government regulation, Euro-ll norms have to be implemented by every two-wheeler manufactures from March 31, 2000. And whichever company is able to get through the chaos will exchange winner. Today, India in merging as the second largest two-wheeler market in the world. The annual sales demand is likely to touch 3.70 million by 2000A.D. Market potential: Is the limit approached by market demand as industry marketing expenditures approach infinity, for a given environment. 1. Market potential if the two-wheeler in India is 16,81,537 units. 2. Market potential if the TVS-SUZUKI in India is: Motorcycle : 1,61,566 Mopeds : 1,90,049 Scooters : 61,713 Total : 4,13,328 Market growth rate:It is the rate of growth of the two-wheelers in the market with to its previous year sales with that of the present year’s sales. SRI GOKULA COLLEGE OF BUSINESS MANAGEMENT KOLAR Page 4 ACTIVE HONDA 1. Market growth rate of two-wheelers in India is 88.24%. 2. Market growth rate of the TVS-SUZUKI in India is 28.90%. Market share of Two-Wheeler companies: - The companies overall market shares in its sales expressed as a parentage of total market sales. The market as a whole consists of Two-Wheelers and Four-Wheelers, which are used by the consumers probably for personal use for their transportation and time management. 1. Market share occupied by the two-wheeler sector in India is 77.10%. 2. Market share of the TVS-SUZUKI in the two-wheeler sector in India is 22.65%. Various players in the industry Bajaj auto Kinetic Honda LML TVS-SUZUKI Escorts Hero Honda Royal Enfield SRI GOKULA COLLEGE OF BUSINESS MANAGEMENT KOLAR Page 5 ACTIVE HONDA Kinetic engineering Majestic auto Yamaha Brief history of various players of industry SCOOTERS: Bajaj auto Ltd.: -It is the second largest manufacturers of scooter in the world. Bajaj auto started in collaboration with PIAGGIO in 1960 till they parted ways in 1971. But the Bajaj scooter still retains the original Italian design. In the two-wheeler segment there has been very title change in the technology and so the technology gap is smaller. LML Vespa LTD.: - The Italian giant piaggio’s Indian subsidiary LML vespa, took nearly 14 years to carve out a 18.96% share of the Indian scooter market. The biggest roadblock. Bajaj occupied a greater market share yet LML vespa tried to make a place in the market. The three models it offer or the select, the NV special and the smart. Kinetic Honda LTD.: -Kinetic Honda is the biggest company to have introduced the gear less scooter on the Indian roads, primarily targeted at urban consumers. SRI GOKULA COLLEGE OF BUSINESS MANAGEMENT KOLAR Page 6 ACTIVE HONDA MOTOR CYCLES: Hero Honda Motors LTD: - The company was promoted by Hero cycles (p) Ltd. In 1984, in collaboration with Hero Honda company Japan. This was the second Japanese 100cc mobile to enter the Indian market, the first being TVS-SUZUKI, HHML introduced Hero Honda CD-100, which was the first four-stroke motor cycle to be introduce in India in the 100cc range. The management had the foresight to gauge the desire to save as fuel cost by the majority of Indian consumers. TVS-SUZUKI LTD: - It is the pioneer in fringing the 100cc bikes to the market it has been continuously expanding its product like and range through never models. Shogun in the most powerful Indo-Japanese bike sold today in India, TVS is also has a bike called samurai for the price sensitive consumer. ESCORTS: -Escorts was a one-model (Rajdoot) co. for many years. Before it started producing Indo-Japanese bikes in the Mid-eighties in collaboration with Yamaha of Japan it introduced new models like Yamaha. SRI GOKULA COLLEGE OF BUSINESS MANAGEMENT KOLAR Page 7 ACTIVE HONDA MOPEDS: - Kinetic Engineering: The 1ST real moped to the Indian market was the Luna TFR 50cc vehicle did exist before but they could not really be called mopeds since a true moped must essentially have the pedal option. The Luna TFR 50cc made a tremendous improvement in riding comfort to the early models. Further innovations led to the new model called Luna Super Electronic. Majestic Auto: -The Hero Honda companies Hero cycle, the largest bicycles manufactures in the world Hero Honda, the largest selling 100cc bike as well as the largest selling 4-S bike in India, and Hero Motor, whose Hero-Puch in doing very well. Majestic Auto offers two products, the pacer and the panther of which pacer appears to be the move up-market. SRI GOKULA COLLEGE OF BUSINESS MANAGEMENT KOLAR Page 8 ACTIVE HONDA PART B ABOUT SUBJECT Introduction to MARKETING: Marketing consists of all activities by which a company adapts itself to its environment creativity and profitably. It is the whole business seen from the point of view of its final result that is from customer’s point of view. Basically business’s job is to convert societal needs into profitable opportunities. Marketing is an attempt to anticipate satisfies the needs, wants and demands of the consumers or the society. Philip Kotler has said “Marketing is determining the needs and wants of target markets and delivering the desired satisfaction more effectively and efficiently than competitors”. Thus goes to show that consumer is the key to the success to any company’s marketing services. Evolution of marketing: SRI GOKULA COLLEGE OF BUSINESS MANAGEMENT KOLAR Page 9 ACTIVE HONDA The development of marketing concept is evolutionary i.e. gradual rather than revolutionary i.e. sudden. The evolution of marketing is one of the oldest professions of the world. Marketing is both philosophy and a technology. As a philosophy, it guides and directs the business thinking i.e. whether to produce or not to produce. As a technology it is concerned with deciding what should be produced, how and when products could be most efficiently distributed among the customer.