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Submitted by
DHARAMVEER GOYAL
31780
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CERTIFICATE
STROKE BIKES” submitted in partial fulfillment of the requirement for the award of degree
of Master of Business Administration to Punjabi University Patiala is a bonafide Project work
carried out by Dharamveer Goyal. No part of this work has been submitted for any other degree
or diploma.
Signature : Signature :
Place:
Date:
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ACKNOWLEDGEMENT
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CONTENTS
A) Certificate
B) Acknowledgement
1) INTRODUCTION
2) INDUSTRY OVERVIEW
3) MARKETING STRATEGIES
4) LITERATURE REVIEW
5) RESEARCH METHODOLOGY
6) HYPOTHESIS TESTING
7) DATA ANALYSIS AND INTERPRETATION
8) FINDINGS
9) SUGGESTIONS
10) CONCLUSION
11) REFERENCES AND ANNEXURES
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INTRODUCTION
HISTORY OF BIKES Through the years…
Bob Stark has been involved with Indian motorcycles throughout his entire life. Bob's father
became an Indian dealer in 1918, after returning from military service during
World War I. Bob still has a photo of his mother riding in a sidecar in 1923. Since Bob was born
in 1934, his parents were involved with Indian cycles long before that.
At the age of 10 Bob started staying around his fathers shop, and developed quite an interest in
the Indian cycles. The mechanic considered him a pest, but allowed him to do minor items, such
as changing oil & polishing cycles.
By 1946 Bob was riding his own Whizzer motorbike, and in 1947 graduated to a Cushman
scooter. By 1950, he had learned quite a bit more about the cycles and got his first Indian, a 741
Scout with skirted fenders. He bought the cycle for $50.00 without his father’s permission and
had it for 4 months before his father knew it was his. By 1951, Bob purchased the '48 Chief,
which he still rides. In addition, his father deemed the $50.00 741 Scout to be unsafe. So he
traded a new Triumph 650cc even up for it. That was the best cycle deal in Bob's life. 1951 also
was high school graduation, and the start of college. Some extra money was obtained during the
next 3 summers by working on cycles. Bobs father had sold the Indian shop in 1952, so the work
was done in the "ex" chicken coop at home. 1955 was the big change, graduation from Case
Institute of Technology, Akron Ohio (Now called Case/Western) with a degree in mechanical
engineering. This was a year of working days at Goodyear Tire & Rubber and nights on Indians.
A short time was spent in the army during 1956 & 1957. The off hours were spent at Herb
Reiber' s Indian shop in Washington D.C. The '48 Chief (purchased in 1951) was kept about 2
miles from Fort Belvoir.
After an army discharge in the fall of 1957 Bob returned to Goodyear Tire during the day and
worked on Indians at home during the evenings. By 1957 he reopened his fathers shop part time,
selling the Royal Enfield built Indians, servicing them, and servicing the older Chiefs & Scouts.
By 1958 Goodyear Tire was no longer in the picture as Bob quit to spend full time at the cycle
shop. In 1959 health reasons mandated a move to Florida, and more building of cycles at home,
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while working at Martin Marietta Corporation. 1961 was a move to California, and the nominal
home workshop for night work. Later 60' s meant trips back to Florida as part of the launch crew
on the first 2 moon shots from Cape Canaveral. Gary was born during this time frame and started
riding between Shorty & Bob by age 2. In 1970, Starklite Cycle was formed and Bob was back
to full time work on Indians. Again, Starklite took on the Indian dealership, this time for the
Taiwan/Italian built models. This was different, but the main business was restoring the older
Indians and manufacturing parts for them. By now Gary was riding. He got his first Indian at age
5, and his second one at age 7. He was given a '47 Chief at age 5 and he finished his restoration
of it at age 16.
As the years have progressed, Indian parts have become increasingly scarcer. This has led to the
need to design and build increasing amounts of Indian parts. In 1989, Gary graduated from
California State University of Long Beach with an Engineering degree in Manufacturing
Engineering. The engineering has helped both Bob and Gary in the production of what we
believe to be the best quality of Indian parts available.
The line now stands at over 3000 items. Shortly has done her part by putting up with all of this
for nearly 30 years, as well as handling most of the work in connection with the Indian
Motorcycle Club. Gary has started helping her the last couple or years with much of the mailing
and typesetting, as he has become very proficient on the computer.
In the fall of 1988, Starklite moved from Fullerton to Perris. The shop in Fullerton was left in the
hands of Wilson Plank, who was employed there for 14 years. He is currently operating it under
the name of American Indian Specialists and is running it very successfully working on Indians.
As you can see from this brief background, The Stark Family has been involved in Indians from
1918 to the present with virtually no interruptions. Starklite is a family owned business involving
Bob, Shorty, and Gary, as well as others. Gary is the third generation to be involved.
The most gratifying part of the business has been the amount of nice people we have met. We
consider them friends, not just a customer.
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BACKGROUND
When we think of Indian Two-wheelers market, we think of stodgy Vespa based models of
scooters and Japanese models of motorcycles, but now the situation is completely changed as the
industry is sizzling hot with continuous poaching of scooters by motorcycles as well as regular
launches of new models by all players. Earlier the shelf life of models was in tune of 10-15 years
but now it has come down drastically due to intense competition. Hero Honda is trying to save its
dominance in motorcycles market from rigorous attacks of Bajaj Auto and TVS while Bajaj Auto
is changing its portfolio by heavy inclusion of motorcycles in it. In this battle LML Group,
Kinetic Group, Yamaha Motors, Honda Motors and Royal Enfield are also trying to have a say.
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1. INDUSTRY OVERVIEW
Two-Wheelers
India is the second largest manufacturer and producer of two-wheelers in the world. It stands
next only to Japan and China in terms of the number of two-wheelers produced and domestic
sales respectively. This distinction was achieved due to variety of reasons like restrictive policy
followed by the Government of India towards the passenger car industry, rising demand for
personal transport, inefficiency in the public transportation system etc.
The Indian two-wheeler industry made a small beginning in the early 50s when Automobile
Products of India (API) started manufacturing scooters in the country. Until 1958, API and
Enfield were the sole producers. In 1948, Bajaj Auto began trading in imported Vespa scooters
and three-wheelers. Finally, in 1960, it set up a shop to manufacture them in technical
collaboration with Piaggio of Italy. Although various government and private enterprises entered
the fray for scooters, the only new player that has lasted till today is LML. Under the regulated
regime, foreign companies were not allowed to operate in India. It was a complete sellers market
with the waiting period for getting a scooter from Bajaj Auto being as high as 12 years.
The motorcycles segment was no different, with only three manufacturers viz Enfield, Ideal Jawa
and Escorts. While Enfield bullet was a four-stroke bike, Jawa and the Rajdoot were two-stroke
bikes. The motorcycle segment was initially dominated by Enfield 350cc bikes and Escorts
175cc bike. The two-wheeler market was opened to foreign competition in the mid-80s.
Moreover, the then market leaders -Escorts and Enfield - were caught unaware by the onslaught
of the 100cc bikes of the four Indo-Japanese joint ventures. With the availability of fuel-efficient
low power bikes, demand swelled, resulting in Hero Honda - then the only producer of four
stroke bikes (100cc category), gaining a top slot. The first Japanese motorcycles were introduced
in the early eighties. TVS Suzuki and Hero Honda brought in the first two-stroke and four-stroke
engine motorcycles respectively. These two players initially started with assembly of CKD kits,
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and later on progressed to indigenous manufacturing. In the 90s the major growth for motorcycle
segment was brought in by Japanese motorcycles, which grew at a rate of nearly 25% CAGR in
the last five years. The industry had a smooth ride in the 50s, 60s and 70s when the Government
prohibited new entries and strictly controlled capacity expansion. The industry saw a sudden
growth in the 80s. The industry witnessed a steady growth of 14% leading to a peak volume of
1.9mn vehicles in 1990. The entry of Kinetic Honda in mid-eighties with a variometric scooter
helped in providing ease of use to the scooter owners. This helped in inducing youngsters and
working women, towards buying scooters, who were earlier inclined towards moped purchases.
In the 90s, this trend was reversed with the introduction of scooterettes. In line with this, the
scooter segment has consistently lost its part of the market share in the two-wheeler market.
In 1990, the entire automobile industry saw a drastic fall in demand. This resulted in a decline of
15% in 1991 and 8% in 1992, resulting in a production loss of 0.4mn vehicles. Barring Hero
Honda, all the major producers suffered from recession in FY93 and FY94. Hero Honda showed
a marginal decline in 1992. The reasons for recession in the sector were the incessant rise in fuel
prices, high input costs and reduced purchasing power due to significant rise in general price
level and credit crunch in consumer financing. Factors like increased production in 1992, due to
new entrants coupled with the recession in the industry resulted in companies either reporting
losses or a fall in profits
Three-Wheelers
India is one of the very few countries manufacturing three-wheelers in the world. It is the world's
largest manufacturer and seller of three-wheelers. Bajaj Auto commands a monopoly in the
domestic market with a market share of above 80%, the rest is shared by Bajaj Tempo, Greaves
Ltd and Scooters India.
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2. MAJOR PLAYERS AND COMPETITION
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b. BAJAJ AUTO LIMITED
The Bajaj Group came into existence during the turmoil and the heady euphoria of India's
freedom struggle. Jamnalal Bajaj, founder of the Bajaj Group, was a confidante and disciple of
Mahatma Gandhi, and was deeply involved in the effort for freedom. The integrity, dedication,
resourcefulness and determination to succeed which are characteristic of the Company today, are
often traced back to its birth during those long days of relentless devotion to a common cause.
Kamalnayan, the eldest son of Jamnalal Bajaj, succeeded his father in 1942, at the age of twenty-
seven. Putting the Nation before business, he devoted himself to the latter only after India
achieved independence in 1947. But when he did so, he put his heart and soul into it. Within a
short while, he not only consolidated the Group, but also diversified into various manufacturing
activities, elevating the Group to the status it enjoys till this day.
Rahul Bajaj today heads the Group. He has been the Chief Executive Officer of Bajaj since 1968
and is recognized as one of the most outstanding business leaders in India. As dynamic and
ambitious as his illustrious predecessors, he has been recognised for his achievements at various
national and international forums.
Bajaj is currently India's largest two and three-wheeler manufacturer and one of the biggest in
the world. Bajaj has long left behind its annual turnover of Rs.72 million (1968), to currently
register an impressive figure of Rs.42.16 billion (US$ 936 million).
Group/ Management
Mr. Jamanalal Bajaj founded the Bajaj Group in the 30s. The group now has 24 companies,
including 6 listed companies. Besides BAL, the major companies in the group are Mukand Ltd.
(Alloy/ Special Steel, term key projects), Bajaj Electricals Ltd.(Electrical equipments, fans, and
appliances) and Bajaj Hindustan Ltd.(Sugar, industrial alcohol)
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BELIEFS
Transparency: A commitment that the business is managed along transparent lines.
Fairness: To all stakeholders in the Company, but especially to minority shareholders.
Disclosure: Of all relevant financial and non-financial information in an easily understood
manner.
Supervision: Of the Company’s activities by a professionally competent and independent
board of directors.
PRESENCE
Dominant presence in Sri Lanka, Mexico, Bangladesh, Columbia, Guatemala, Peru, Egypt,
Iran and Indonesia.
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Different models of Bajaj 4-stroke bikes:
Bajaj CT 100
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Bajaj Discover Electricstart
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Bajaj Pulsar 150 ES DTSi
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c. LML AUTO LTD.
The company was incorporated in 1972 as a private limited company called Lohia Machine Ltd.
and starting manufacturing machine in technical collaboration with ARCT FRANCE in terms of
companies Act 1956. The company was converted into public limited company. The activities
were diversified by putting up synthetic yarn processing unit in 1978. Nylon 6 chips
manufacturing of LML scooter. The activity of engineering unit was phased out and fiber unit
was de-linked. As such as the company now manufacturing scooters and motorbike under the
brand name of LML.
During the last 14 years the company has produced and sold over 19 Lacks scooters that is a
remarkable achievement inspire of formidable competition formats competitors when LML
entered the scooter industry in 1982. It was essentially operating in a seller market which had
huge unmeet demand it was able to gain substantial and market shore approached operand from
14000 a month in 1990 to 5000 a month in 1992. Overall sales in1991 were half that of 1990. It
introduced a new vehicle LML is in early 1992 which was priced higher than LML TS in
September 1992 both the vehicles were restyled and re-launched as the NV special and TS
special there was no immediate impacts on sales. Total sales in 1992 were lower than even
1991.
However there was considerable reshaping within the existing demand with the higher price TS
rapidly wresting a 35 percent shares of LML 20 sales. By end 1992 the company had managed
to fix its mingling quality problems which has been preventing it from attaining a premium
states in the eye of the consumer it started spending on advertisement also for provide- ding
product related information to potential customers.
Innovative marketing such as exchanging any old scooter for new LML one and paying the
difference is easy installment he helped in booming up the market share of LML considerable
LML enthused its dealer with mere generous morging which ranges from Rs-725 to Rs-1100.
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By 1993, it introduced a new model LML select that proved an instant success by mid 1993 as
much a 60 percent of LML sales to percent by 1993 had increased to 15000 per month. It stayed
at the sales reputed to 20000 a per month by the year-end.
The severe demand recession during October 1990 top September 1992 upset the working of
company resulting into heavy loses. As a result of house Research and Development. Activities
the company could introduce a new range of scooter with lot of added features like a better fuel,
efficient engine and attractive metallic colors etc with earning of recession the sales of company
picked up a level of about 5000 scooter to 2000 scooter per month. During the year end 30-9-97
LML has achieved a remarkable turn over by earning a net profit Rs-2640 lacks as compared to
net loss of 607 during the year proved further and the company has earned a net profit of Rs-467
crores during the period ended on 30-9-97 before exceptional item has also gone up from Rs-
346.39 crores during 1993-94 to Rs-748.72 crores during 1996-97.
From a mere 7 percent, market share in 1991-1992 LML has today made significant result and
commands an impressive market share of about 26 percent.
LML achieved 14.63% increase in volumes against the backdrop of a slow down in the two-
wheeler industry and a negative growth in the scooter segment.
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Different models of LML 4-strokes bikes:
LML Freedom DX
Ignition CDI
Front Brakes Drum
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LML Freedom Prima 125 Disc Brake Motorcycle
Ignition CDI
Front Brakes Disc
Rear Brakes 130mm Drum
Wheelbase 1235mm
Ground Clearance 165mm
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LML Graptor Kick Start Motorcycle
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d. TVS Motor Company
TVS Suzuki became the first Indian company to introduce 100 cc Indo-Japanese motorcycles in
collaboration with Suzuki Motor Company. Having amicably parted ways TVS Motor Company
continues to manufacture highly reliable mopeds, motorcycles & scooters. TVS have one of the
most comprehensive line-ups of motorcycles. The 2 Stroke Max 100 range provide the entry
level. The new TVS Centra and the latest TVS Victor GLX 125 both use the new VT-i (Variable
Timing Ignition) to good effect.
The Indian two- wheeler market has a size of over Rs100,000 million with the sales of more than
3.7 million units in 2000-01 and has been growing at 7% CAGR over 1997-2001. TVS Suzuki
Ltd (TSL) is one of the three companies that account for more than 80% of the industry. The
company has 23% market share in domestic two-wheeler industry. TSL is present in all the three
leading segments of the 2-wheeler market viz; mopeds, motorcycles and scooters. The company
is India’s largest manufacturer of mopeds with a market share of 66%, and dominates the
southern parts of India. It is also a market leader in the fast growing vario-scooter (Scooty)
market with a market share of 34%. In FY01, motorcycle sales contributed to 53% followed by
sales in mopeds to 24% of total sales of Rs 18,408.2mn. TSL’s first 4-stroke premium segment
motorcycle ‘Suzuki Fiero’ has achieved about 3% market share within the first year of its launch.
Most recently the 19-yr old JV with Suzuki Motor Corporation (SMC) has fallen off and TVS
has been renamed as ‘TVS Motor Company Ltd.
The Indian two-wheeler sector 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 with most of the companies now planning 100%
subsidiaries in India, a few JV’s have fallen out.
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In the last four to five years, the two-wheeler market has witnessed a marked shift towards
motorcycles at the expense of scooters. In the rural areas, consumers have come to prefer sturdier
bikes to withstand the bad road conditions. In the process the share of motorcycle segment has
grown from 48% to 58% , the share of scooters declined drastically from 33% to 25% , while
that of mopeds declined by 2% from 19% to 17% during the year 2000-01. The Euro emission
norms effective from April 2000 led to the existing players in the two- stroke segment to install
catalytic converters. 4-stroke motorcycles are now replacing all new vehicles. Reduced excise
duty and fierce competition has led to a fall in prices of certain models.
TSL has been the largest manufacturer of mopeds, which are predominantly prevalent as a means
of low cost transportation and provide a tremendous potential in all the parts of India. However
the company is likely to face threat from domestic competitors viz; Bajaj Auto Ltd (BAL) which
would continue its price-based competition and Honda Motorcycles and Scooters Ltd (HMSL) a
new entrant in the 2-wheeler market. Since the two-wheeler industry has grown vigorously in the
past, there has been excess capacity and cost pressures will lead to reduce margins. The removal
of quantitative restrictions has also led to a threat from the Chinese players. In addition to this
there has been a decline in the demand for mopeds, which is matter of concern for the company.
Consequently, the company has been planning to launch a range of 4-stroke vehicles covering all
segments over a period of time. Of late, TVS has been able to produce 100cc 4-stroke
motorcycles indigenously and none of the company’s fast selling 2-wheelers have a major
Suzuki contribution.
Current Scenario
TVS - Suzuki ‘s motorcycle volume growth at around 1.3% is way behind that of its competitors
such as Hero Honda (37.28 %) and Bajaj Auto (34.5 %). The company for the first half of FY02
posted a drop in turnover by 8% to Rs8332.8mn. Operating profit margin has declined to 7.39%
from 9.53% and has been affected on account of disproportionate increase in raw material cost in
relation to the turnover. Increase in staff costs to Rs364.2mn from Rs312.3mn accompanied by
marginal increase in depreciation and interest costs has affected the company’s bottom line. The
post–tax earnings declined by about 53% to Rs191.6mn. However the earnings during second
quarter are relatively better than the first quarter of current fiscal 01-02. The pick up in sales
volumes of ‘ Victor ‘ and the steady off take of Fiero have helped the company stage some sort
of recovery during the second quarter.
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Different models of TVS 4-strokes bikes:
TVS Centra
Wheelbase 1235mm
Ground Clearance 150mm
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TVS Fiero
Ignition CDI
Front Brakes 240mm Disc
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TVS Victor
The TVS Victor offers amongst the best value for money in the Indian two-wheeler industry.
Its 110cc engine, 4 stroke engine develops 8.1 BHP and, thanks to its digital ignition, can be
optimised for power or fuel economy depending on your riding style.
Its multi-reflector headlamps provide better illumination for safer riding while its long broad seat
offers great comfort both for the pillion and the rider.
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e. YAMAHA MOTOR INDIA PVT. LTD.
Yamaha Motor India Private (YMIPL) Ltd. is the fully owned subsidiary of Yamaha Motor Co
of Japan. YMIPL was initially known as Yamaha Motor Escorts Ltd. But the parent company,
Yamaha Motor Company, purchased Escorts Ltd's remaining 26 per cent holding in their
motorcycle joint venture Yamaha Motor Escorts Ltd in June 2001. It was therefore renamed as
Yamaha Motor India Private Ltd.
YMI follows Yamaha Motor's corporate mission of creating 'Kando' - a unique Japanese word
that means 'touching people's hearts.' 'Kando' also describes the 'spirit of challenge" to create
new value surpassing customer expectations. YMIPL is committed to making products that
benefit from the skills and technology used by Yamaha worldwide.
Now, the company being 100% subsidiary holder is known as the Yamaha Motor India (Pvt.)
Limited. The logo of YMC has been adopted by YMIPL.
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Motorcycles, Yamaha being manufacturing Powerboats and out boards motors in 1960. Since
then, engine and FRP technology were used as a base to actively diversify and globalize the area
of business. Today our fields of influence extend from the land to the sea and even into the skies
as our business divisions have grown Motorcycles operations to include Marine operations,
Power Product operations, Automotive operations, Intelligent Machinery operations, Aeronautic
operations and PAS operations.
Yamaha Crux
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Yamaha Enticer Electric Start Disc Brake
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Yamaha Libero
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MARKETING STRATEGIES
MARKETING STRATEGIES OF HERO HONDA
The Company's product range includes "Splendor" which is the largest selling motorcycle brand
in the world with over 6.9 lacs vehicles sold in 2000-01. A cumulative over 4 million customers
are the real foundation of the company's strength. The total shall soon cross the 5 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" in January 2001. 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" has received an excellent response from the
market and has established itself well, with sales reaching a level of 19000 units in March 2001,
within just three months of its launch.
In April 2001, another 100 cc model "Joy" was launched successfully. Its focus is on better
styling and improved riding comfort.
Hero Honda launches cheapest bike to ‘stall’ Bajaj Auto19.03 IST 16th Apr 2003 By India
Express Bureau
In an attempt to beat competition from its rival Bajaj Auto, Hero Honda Motors launched its
cheapest 100cc motorbike yet on Wednesday. The motorbike maker, in which India's Munjal
family and Japan's Honda Motor Co each hold 26 per cent stakes, said the new model, CD-
Dawn, would carry a showroom price of Rs 31,899 in Delhi. The company expects to sell 7,000-
8,000 units of the bike in April and hopes sales will touch 20, 000 a month in six months. Hero
Honda, which accounts for 45 per cent share of the domestic market, has faced slowing demand
and cutthroat competition after two consecutive years of 30 per cent-plus growth in the world's
biggest motorcycle market. But the firm has forecast at least 10 per cent growth in sales volume
in the current financial year to March 2004. Its sales in the past year to March grew 17.7 per cent
to 1.68 million bikes.
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Different models of Hero Honda 4-strokes bikes:
Presenting CD deluxe, the stylish, true value 100 cc motorcycle from Hero Honda.
Encompassing the legendary Hero Honda values of fuel efficiency, economy and rock solid
dependability.
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The world's best-selling motorcycle just got better. The Splendor+, a bike that will stop you right
in your tracks. Both by its looks and performance. Needless to add, owning a Splendor+ means a
lot of other things too. Like getting admiring looks. Or the pride of riding a motorcycle that
meets the pollution control standards of this decade. That's the Splendor+. The new face of trust.
Displacement 97.2.cc
Transmission 4-speed constant mesh
Ignition Electronic
Head light 12V 35/35W multi-reflector with halogen lamp
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Engine 4-Stroke OHC, Single Cylinder, Air Cooled
Bore X Stroke 52.4 X 57.8 mm
Displacement 124.7 cc
Compression Ratio 9.1: 1
Max Power 6.72 Kw (9 BHP) @ 7000 rpm
Torque 10.35 Nm @ 4000 rpm
Max Speed 90 Kmph
Clutch 4 - Speed Constant Mesh
Final Drive Roller Chain
Ignition Digital - CDI Ignition (AMI)
Advanced Micro Processor Ignition system
Starting Kick Start
Self Start (Optional)
Frame Tubular Double Cradle
Suspension Front : Telescopic Hydraulic Fork
Rear : Swing Arm with Hydraulic Shock Absorbers
Dimensions (LXWXH) 1995 X 735 X 1095 mm
Wheel Base 1265 mm
Ground Clearance 150 mm
Kerb Weight 117 Kg (Kick Version)
121 Kg (Self Version)
Tyres Front : 2.75 X 18 - 4 PR / 42P
Rear : 2.75 X 18 - 6 PR / 48P
Brakes Front Drum Type : Internal Expanding Type - 130 mm Dia
Front Disc Type : Hydraulic Disc Type - 215 mm Dia
(Optional
Rear: Internal Expanding Type - 130 mm Dia
Fuel Tank Capacity 12 Ltrs. (Min)
Head Light 12V - 35W Multi Reflector Halogen Bulb - AC Type
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New two-tone body colours PLUS Body colour rear view mirrors PLUS Aluminum die cast rear
grip PLUS Heat protector on the muffler. All this and much more to make the biker and his bike
stay married for eve.
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Karizima
The Karizima features a 223cc, 17PS power pack that accelerates you from 0-60 in 3.8 seconds.
Distinctive styling and Mag alloy wheels make this bike stand out before it races away from the
pack.
Digital ignition and a constant vacuum carburetor facilitate better control of ignition timing.
The legend refreshed…with all new body language. The original spirit of CBZ, now with a cool,
new look. A wonder bike that can take on the winds. And like you, it runs on passion. Rev up
and flaunt your style.
CBZ
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PLACE STRATEGY OF HERO HONDA
Today Hero Honda has managed to achieve indigenization of over 95 percent, a Honda record
worldwide. Hero Honda is at present the largest-selling Indian motorcycle and the most fuel-
efficient in its category - the outcome of Hero Group's foresight and another classic example of
how the Group strives to provide the customer with excellence and satisfaction.
Hero Honda became the first company in the country to introduce four-stroke motorcycles and
set the standards for fuel efficiency, pollution control and quality. It has a production capacity of
1.2 million motorcycles, which shall be enhanced to 1.5 million motorcycles in the coming years.
It has an excellent distribution and service network spread throughout the country. Hero Honda
is the market leader in motorcycles, with sales of over a million motorcycles and a strong market
share of 47% during 2000-01.
YEAR SALES
2002-03 43,000 units
2003-04 96,200 units
2004-05 5,30,600 units
2005-06 7,61,210 units
2006-07 10,29,555 units
2007-08 14,25,195 units
2008-09 16,77,537 units
2009-10 18,23,234 units
As economies open up, are Asian enterprises ready for the global battle for export markets and
investment?
Our Bureau
36
NEW DELHI, May 1
HERO Honda, the country's largest motorcycle manufacturer, saw its sales decline by 1.2 per
cent to 1,34,318 units in April 2003 from 1,35,961 units in the same month last year.
According to industry sources, sales of the company could have been affected by sluggish rural
demand combined with the 10-day trucker's strike affecting production as well as distribution of
products in April.
The company saw a growth of 16.06 per cent in sales volume during April compared to March.
Meanwhile, Hero Honda is planning to launch new 200 plus cc motorcycle during May, a
company release said.
The company today announced that it has achieved a milestone with its Daruhera plant, in
Haryana, becoming the first Indian two-wheeler plant to produce 5 million units. The 5 millionth
motorcycle was a Splendor. The first motorcycle, CD100, had rolled off the assembly line in
April 1985.
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, investment in equipment and facilities and
through and through efficient management."
37
PRICING STRATEGY OF HERO HONDA
The Karizima features a 223cc, 17PS power pack that accelerates you from 0-60 in 3.8 seconds.
Distinctive styling and Mag alloy wheels make this bike stand out before it races away from the
pack.
Digital ignition and a constant vacuum carburetor facilitate better control of ignition timing
That’s why Priced at Rs. 76,206/- on road Mumbai the Karizma is available in seven attractive
shades.
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PROMOTION STRATEGY OF HERO HONDA
A thorough understanding of the fast-changing consumer behavior, new market segments and
product opportunities along with sensitivity to changing customer needs, form the core of Hero's
marketing strategy and philosophy.
With a deep sense of belonging to the Hero fraternity, the Group's dealer network has catalyzed
growth and acted as a strong bridge between the customers and the Group.
Conventionally, very few Indian bicycle manufacturers were interested in exports. However, the
Hero Group's foray into the overseas markets pioneered Indian exports in the bicycle segment as
early as 1963. It was a move prompted primarily by the need to be attuned to the global
marketplace.
While initial exports were restricted to Africa and the Middle East, today more than 50 percent
of the Group's bicycle exports meet the demands of sophisticated markets in Europe and
America. This is primarily because of appropriate product development and excellent quality that
Hero offers.
The Group has undertaken a steady up gradation of technologies and there has been
diversifications and setting up of newer establishments to meet stringent international standards.
At the core of it all is a customer-centric scheme of policies and production ... and the bottom
line is to "Add Value while Engineering Satisfaction.
Advertisement strategy
Hero Honda has snagged the brat pack — Virender Sehwag, Mohammad Kaif, Yuvraj Singh and
Zaheer Khan. The two-wheeler maker, an official sponsor of the World Cup tournament to be
played in South Africa in February, has brought the young and exciting cricketers of the Indian
team on board as brand ambassadors.
39
The Fab Four — along with team captain Sourav Ganguly — will feature in the ads for its latest
motorcycle model: the Ambition. Hero Honda is extremely cagey about saying how much they
had to fork out to bring the top cricketers to feature in the ads.
Atul Sobti, senior vice-president, marketing and sales declined to say how much they planned to
invest in the ad campaign. "It will give a lot of leverage to the new product Ambition by giving
the image of a powerful and efficient motorcycle. The powerfu-e-l bike will be well represented
by the leadership qualities, power and the capacity to face any challenges," he added.
The current ad for Ambition is tame; it shows an important file reaching a destination in time
because of the power of the motorcycle. "It does not properly appeal to the customers about the
power and efficiency of the product. 'Team Ambition' will be much better suited to represent the
product," sources said.
Hero Honda is hoping to crank up sales of Ambition because of the endorsements by the top
cricketers during the World Cup when cricket fever will be at its highest.
One major advantage is that none of its rivals will be able to use cricketers to endorse their
products before and after the World Cup because of the ambush-marketing clause that the
International Cricket Council (ICC) has worked into the players contracts.
The issue had sparked a row when it was raised just before the ICC champions trophy in Sri
Lanka in September but was resolved after a stand-off between ICC, the cricket boards of several
nations and the players.
Hero Honda plans to increase its market-share to 50 per cent this fiscal and is targeting sales of
10,000 Ambitions a month. Its share dipped from 48 per cent to 45 per cent.
The 133 cc Ambition generates 11 bhp of thrust, which has been kept low in order to improve
fuel efficiency. It has been placed in between the 125cc and 150cc motorcycle categories to draw
the maximum clientele. The bike accelerates from 0-60 kmph in only six seconds.
While launching the new campaign with the cricketers, Hero Honda is also drawing up plans for
a couple of ads with the other brand ambassador, Hrithik Roshan.
Hero Honda's association with cricket goes back to 1993, when it sponsored the Hero Cup. It
was the official sponsor of the recent ICC Champions Trophy in Sri Lanka and will have the
same status for the ICC World Cup in 2003.
40
3. PURPOSE OF THE STUDY
Whenever we think of the origin of Indian Two-wheelers market, we think of old and stodgy
Vespa based models of scooters and Japanese models of motorcycles, but now in the era of
globalization the situation has completely changed as the many industries are sizzling hot with
continuous poaching of scooters by motorcycles as well as regular launching of new models of
motor bikes. Earlier the shelf life of models was in tune of 10-15 years but now it has come
down drastically due to intense competition in motor bike industry. Hero Honda is trying to save
its dominance in motorbike market from rigorous attacks of Bajaj Auto and TVS while Bajaj
Auto is changing its portfolio by heavy inclusion of motorcycles in it. In this battle LML Group,
Kinetic Group, Yamaha Motors, Honda Motors and Royal Enfield are also trying to provide
something new to the customers.
4. RESEARCH OBJECTIVES
41
LITERATURE REVIEW
LITERATURE REVIEW
Motorcycles are the most expensive of all two-wheelers. They are more powerful than scooters
and mopeds, have the highest load carrying capacity (which is essential for rural areas), are fuel-
efficient, have better road grip, and are the most expensive. Besides, motorcycles are viewed as
“trendy” in the urban areas as compared with scooters and mopeds.
Motorcycle production in India began in 1952, when Enfield India Limited commenced
manufacture at its plant in Tamil Nadu. It was the only motorcycle producer in the country until
the early 1960s when Ideal Jawa (India) Private Limited and Escorts Limited entered the market.
By 1970-71, production of motorcycles had reached 39,000 units per annum.
The fortunes of the motorcycle industry changed after the announcement of the liberal licensing
policy in 1982 whereby foreign collaboration was allowed. In 1982, the Government allowed
foreign players to enter the industry through joint ventures. Within four years, the TVS Group
tied up with Suzuki, the Hero Group with Honda, the Escorts Group with Yamaha, and Bajaj
Auto Limited (Bajaj Auto) with Kawasaki. TVS Suzuki introduced Ind-Suzuki in 1984, Hero
Honda Motors Limited (HHML) launched CD100 in 1985, and both Escorts and Bajaj Auto
launched their models in 1986-87. These models catered for the upwardly mobile, middle-to-
upper income group consumers who preferred a stylish, powerful vehicle that could be used as
an urban personal transportation vehicle. The principal brands that competed in the 1980s were
the HHML CD100 (a four-stroke 100cc), the Ind-Suzuki AX100 (from TVS, two-stroke, 100cc)
and the Escorts-
Yamaha RX100 (two-stroke, 100cc). While the CD100 was positioned primarily on the
efficiency plank, giving riders an unprecedented mileage of 80 kms per litre (kmpl), the RX100
became popular with young buyers because of its high power. The AX100 took the middle path,
balancing power with reasonable fuel efficiency. To reinforce its image of being a maker of
42
powerful motorcycles, Escorts launched the 350cc twin-carb, twin-cylinder Yamaha RD350, a
vehicle that soon gained cult status. It offered 36bhp, but was plagued by problems—very few
mechanics could tune the engine and the average fuel consumption was as low as 15 kmpl.
Subsequently, the product had to be discontinued. The launch of the 100cc motorcycles was path
breaking, as till then the existing big models like the Yezdi, Rajdoot and Bullet could not
compete with scooters.
A significant development in the motorcycle industry during the late 1990s was the shift from
two-stroke to four-stroke technology. The attraction of the four-stroke technology was earlier
limited to fuel efficiency, while two-stroke held its own by offering better performance and
easier maintenance. But, following the enforcement of India 2000 emission norms beginning
April 1, 2000, the less polluting four-stroke has become the preferred technology. The two-stroke
technology can also meet the existing environment norms, but only when supplemented by
catalytic converters—an option that is both costly and shortsighted. The high temperature of the
exhaust, combustion irregularities, the problem of lubricating oil contamination with metallic
additives, and finally, fuel adulteration can poison the catalyst and render it completely
ineffective. Further, the use of catalytic converter affects the initial pick-up of two-stroke
engines, which is one of their main attractions. Given these shortcomings, most motorcycle
manufacturers have offered four-stroke vehicles. While the four-stroke motorcycle segment is
the fastest growing, it is also highly competitive. Competition has intensified in this segment
since CY2001 when players introduced new products at a relatively fast pace. Also, new entrants
have entered the market by introducing their products at lower price points, while the existing
players have announced price cuts. This has led to price competition in the domestic market. At
the lower end of the segment, Bajaj Auto has its Boxer range of motorcycles and Byk; HHML
has Dawn as well as CD Dawn and KEL Boss. Above this segment, there are strong brands such
as Victor (TVS), Passion and Splendor (HHML), Caliber 115 and Aspire (Bajaj Auto), Freedom,
Adreno and Energy (LML), and Crux R (Yamaha). Through its CBZ model, HHML had tapped
the premium segment of the market in 1999.
Since then, however, quite a few models such as Pulsar 180 by Bajaj Auto and Fiero by TVS
have been launched in this segment. Royal Enfield is the market leader in the lifestyle segment.
43
This segment has also attracted new model launches such as Eliminator by Bajaj Auto, Aquila by
KEL and Karizma by HHML.
Growth of Bikes
Significant growth has been witnessed in the motor cycle segment and the company is fully
aware of the need to enter in this segment for maintaining growth and optimizing product mix
the growth in motor cycle is attributed largely to the opening up the rural markets and also to its
wider acceptance in the youth market. It is growing at any average rates of 20% over the last
three years. Another high legal is that the motorcycle sales have surpassed the scooter sales for
the first time in 1998-1999 until then motorcycle was always trailing behind.
The two-wheeler industry has been rather slow in taking advantages of the board bandings
introduced in Rajeev Gandhi time way back in 1994.
Even today, there are manufactures such as Escort, Hero Honda, Bajaj, Yamaha and LML, which
later to only a single segment like motorcycle or scooter. Any variation of demand in a particular
segment hits them hands it is therefore a product policy to have presence in each segment.
Growth of two-wheeler
44
Emission Norms
The years 2004 emission norms are more stringent than stringent norms as may be seen from
table:
The industry need to adopt suitable technology so that it can conveniently meet these horns in
time since the production largely of two stroke engines figment of catalytic converter will
become necessary. But it will lead some in case in prices. The life of these converter is limited to
25/30 thousand hence consumer will prefer something durable and longer lasting.
Some manufacture is therefore planning to switch over to stroke technology to comply with the
emission norms. It has an additional advantage of more complete combustion of hydrocarbons in
petrol, which gives higher mileage and better fuel economy. The 4 strokes bike are currently
giving of fuel 70 to 80 km/hr. this will important from consumers point of view because of high
price level of petrol in India. It is therefore not surprising that every major player is trying to get
into the motor cycle market to have a piece of cake.
Just when the market of scooter is shrinking in India residents London seem to be switching to
scooter. The number of scooter on Britons road rise 40 %over the part 12 months. As roads get
alleged with traffic and average speed of traffic is London has dropped to 19.2 km/hr more and
more people are buying scooter to get around traffic shares.
Motorcycle association has released figures acknowledging the new popularity of 4-strokes
bikes.
45
RESEARCH METHODOLOGY
RESEARCH METHODOLOGY
Meaning of Research
Research is a common parlance refers to a search for knowledge. One can also define research as
a scientific and systematic search for pertient information on a specific topic. In fact, research is
an art of scientific investigation. The Advance Learner’s Dictionary of current English lays down
the meaning of research as “A careful investigation or inquiry specially through search for new
facts in any branch of knowledge.” Redman and Mory defines research as a ”Systematized
efforts to gain new knowledge.” Some people consider research as a movement, a movement to
from the known to unknown. It is actually a voyage of discovery. We possess the vital instinct of
inquisitiveness for, when the unknown confronts us, we wonder and our Inquisitiveness make us
probe and attain full and fuller understanding of the unknown.
Methodology
In planning and designing a specific research project, it is necessary to anticipate all the steps
that must be undertaken if the project is to be successful in collecting valid and reliable
information.
46
RESEARCH DESIGN
The research design is the determination and statement of general research approach of strategy
adopted for the particular product. It is the heart of the planning which the design adheres to the
research objected which will ensure that the needs will be served. My study is based on
Descriptive Research as it is invested to produce accurate descriptive of various relevant to the
decision faced without demonstrating that some relationship exist within variable. It is used to
measure the behavior variables of people of subject who are under the study.
The research undertaken was descriptive research in nature. The emphasis was made to
understand the nature and the expectations of the customers.
SAMPLE
SAMPLING TECHNIQUES
The type of sampling that was carried out was probability (convenience) Sampling due to limited
resources available.
In non-probability sampling, I have chosen RANDOM sampling. Because this was best
sampling method to do market survey. On the other aspect, to cover all consumers in Ghaziabad
was easy task.
SAMPLE SIZE
The total number of these selected persons is called sample size. In this case, study sample units
are Two Hundred Eighty Two.
SAMPLE AREA: Ghaziabad (Raj Nagar, Rajendra Nagar, Nehru Nagar, G.T. Road)
47
DATA COLLECTION METHOD
Primary data:
Through survey researcher obtains primary data directly from the Reader through following
method.
Observation method.
Interview method.
Questionnaires.
Observation method:
Researcher went to the dealer’s showroom and service center and even parking places.
Researcher directly observes the customers researcher with out asking any question. Here
researcher found most of the customer was empty buying behavior.
Interview Method:
Researcher went to the service center and parking places and collects the data through personal
interview.
48
SURVEY INSTRUMENTS
Research’s instrument is questionnaires for collecting the primary data. This is very common and
flexible instrument.
Through Questionnaires:
Researcher collects most of the data through questionnaires; researcher went to the consumers
and requested them to fill the questionnaires.
Secondary data:
Through Company Profile
Through Newspapers
Times of India
Hindustan Times
The Hindu
Economics Times
Through Magazines
Business India
Auto Express
Business India
Auto India
Through T.V. Channel
CNBC Awaz
49
LIMITATIONS
Time Constraint:
Time for this project is not sufficient. As I go for the survey at the dealership then time
for completing and filling the questionnaires is not sufficient.
Sample Area:
The study was conducted in GHAZIABAD only. Hence, the study may not be useful for
projection of behavioral aspect of consumers living in other cities.
Money Constraint:
Budget and finance are always been constraints in doing any project.
50
HYPOTHESIS TESTING
Hypothesis Testing
As mentioned before, methods of making inferences about parameters is either estimating the
parameter or testing a hypothesis about the value of the parameter. In this lesson we will
introduce the concepts of hypothesis testing and then talk about the test for population
proportion (instead of following the order of our textbook to talk first about hypothesis testing
for population mean).
This lesson introduces the rejection region approach to hypothesis testing and compares it to
the p-value approach. One sample t-test for population mean is introduced. The lesson is
concluded by a discussion of computation of power and sample size for one sample t-test.
Objectives
learn how to calculate power and to choose the sample size for testing the population mean.
Hypothesis Testing
The second type of inference method - confidence intervals was the first, is hypothesis testing.
A hypothesis, in statistics, is a statement about a population where this statement typically is
represented by some specific numerical value. In testing a hypothesis, we use a method where
we gather data in an effort to gather evidence about the hypothesis. In hypothesis testing
there are certain steps one must follow. Below these are summarized into six such steps to
conducting a test of a hypothesis.
1. Setting up two competing hypotheses - Each hypothesis test includes two hypothesis about
the population. One is the null hypothesis, notated as Ho, which is a statement of a particular
parameter value. This hypothesis is assumed to be true until there is evidence to suggest
otherwise. The second hypothesis is called the alternative, or research, hypothesis, notated as
Ha. The alternative hypothesis is a statement of a range of alternative values in which the
parameter may fall. One must also check that any assumptions (conditions) needed to run the
51
test have been satisfied e.g. normality of data, independence, and number of success and
failure outcomes.
2. Set some level of significance called alpha. This value is used as a probability cutoff for
making decisions about the null hypothesis. As we will learn later, this alpha value represents
the probability we are willing to place on our test for making an incorrect decision in regards to
rejecting the null hypothesis. The most common alpha value is 0.05 or 5%. Other popular
choices are 0.01 (1%) and 0.1 (10%).
3. Calculate a test statistic. Gather sample data and calculate a test statistic where the sample
statistic is compared to the parameter value. The test statistic is calculated under the
assumption the null hypothesis is true, and incorporates a measure of standard error and
assumptions (conditions) related to the sampling distribution. Such assumptions could be
normality of data, independence, and number of success and failure outcomes.
4. Calculate probability value (p-value), or find rejection region - A p-value is found by using
the test statistic to calculate the probability of the sample data producing such a test statistic or
one more extreme. The rejection region is found by using alpha to find a critical value; the
rejection region is the area that is more extreme than the critical value.
5. Make a test decision about the null hypothesis - In this step we decide to either reject the
null hypothesis or decide to fail to reject the null hypothesis. Notice we do not make a decision
where we will accept the null hypothesis.
6. State an overall conclusion - Once we have found the p-value or rejection region, and made
a statistical decision about the null hypothesis (i.e. we will reject the null or fail to reject the
null). Following this decision, we want to summarize our results into an overall conclusion for
our test.
We will continue our discussion by considering two specific hypothesis tests: a test of one
proportion, and a test of one mean. We will provide the general set up of the hypothesis and
the test statistics for both tests. From there, we will branch off into specific discussions on each
of these tests.
In order to make judgment about the value of a parameter, the problem can be set up as a
hypothesis testing problem.
We usually set the hypothesis that one wants to conclude as the alternative hypothesis, also
called the research hypothesis.
52
There are three types of alternative hypotheses:
1. The population parameter is not equal to a certain value. Referred to as a "two-sided test".
2. The population parameter is less than a certain value. Referred to as a "left-tailed test"
3. The population parameter is greater than a certain value. Referred to as a "right-tailed test".
For all three alternatives, the null hypothesis is the population parameter is equal to that
certain value.
Since hypothesis tests are about a parameter value, the hypotheses use parameter notation - p
for proportion or \(\mu\) for mean - in their arrangement. For tests of a proportion or a test of
a mean, we would choose the appropriate alternative based on our research question. Below
are the possible alternative hypothesis from which we would select only one of them based on
the research question. The symbols \(p_0\) and \(\mu_0\) are just used in these general
statements. In practice, these get replaced by the parameter value being tested. The examples
following will illustrate.
1. The population parameter is not equal to a certain value. Referred to as a "two-tailed test".
2. The population parameter is less than a certain value. Referred to as a "left-tailed test"
3. The population parameter is greater than a certain value. Referred to as a "right-tailed test".
When debating the State Appropriation for Penn State, the following question is asked:
"Are the majority of students at Penn State from Pennsylvania?" To answer this question, we
can set it up as a hypothesis testing problem and use data collected to answer it. This example
is about a population proportion and thus we set up the hypotheses in terms of p. Here the
value \(p_0\) is 0.5 since more than 0.5 constitute a majority. The hypthoses set up would be a
right-tailed test:
A consumer test agency wants to see the whether the mean lifetime of a brand of tires
is less than 42,000 miles as the tire manufacturer advertises that the average lifetime is at least
42,000 miles. In this example, we are discussing a mean and therefore set up the hypotheses in
terms of \(\mu\). Here the value of \(\mu_0\) is 42,000. With the consumer test agency
wanting to research that the mean lifetime is below 42,000, we would set up the hypotheses as
a left-tailed test:
53
The length of a certain lumber from a national home building store is supposed to be
8.5 feet. A builder wants to check whether the shipment of lumber she receives has a mean
length different from 8.5 feet. In this example, we are discussing a mean and therefore set up
the hypotheses in terms of \(\mu\). Here the value of \(\mu_0\) is 8.5. With the builder
wanting to check if the mean length is different from 8.5, she would set up the hypotheses as a
two-tailed test:
A political news company believes the national approval rating for the current
president has fallen below 40%. In this example, we are discussing a proportion and therefore
will set up the hypothesis in terms of p. Here is the \(p_0\) value is 0.4 and the hypotheses
would be set up as a left-tailed test:
If the conditions necessary to conduct the hypothesis test are satistified, then we can use the
formulas below to calculate the appropriate test statistic from our sample data. These
assumptions and test statistics are as follows:
Test of One Proportion: the conditions are that \(np_0\) and \(n(1- p_0\)) are at least 5. If so,
then the one proportion test statistic is:
Test of One Mean: the condition is that the data satisfies the conditions similar to those used
for constructing a t-confidence interval for the mean. Those were either the data comes from
an approxmately normal distribution, or the sample size is large enough (at least 30), or a small
sample size (less than 30) the data is not skewed or has outliers. If any of these conditions are
satisfied, the we can calculate the following test statistic:
NOTE - do not get too hung up on symbols. We just want to use a notation that helps to remind
us that these values are a test statstic.
If the sample data are consistent with the null hypothesis, then we do not reject it.
If the sample data are inconsistent with the null hypothesis, but consistent with the
alternative, then we reject the null hypothesis and conclude that the alternative
hypothesis is true.
54
Referring back to the first example above, say we take a random sample of 500 Penn
State students and find that 278 are from Pennsylvania. Can we conclude that the proportion is
larger than 0.5?
Is 278/500 = 0.556 much bigger than 0.5? What is much bigger? This depends on the standard
deviation of \(\hat{p}\) under the null hypothesis.
The standard deviation of \(\hat{p}\), if the null hypotheses is true (e.g. when \(p_0 = 0.5\)) is:
In the lumber example above, the mean length of the lumber is supposed to be 8.5
feet. A builder wants to check whether the shipment of lumber she receives has a mean length
different from 8.5 feet. If the builder observes that the sample mean of 61 pieces of lumber is
8.3 feet with a sample standard deviation of 1.2 feet. What will she conclude?
Thus, we are asking if -1.3 is very far away from zero, since that corresponds to the case when
\(\bar{X}\) is equal to \(\mu_0\). If it is far away, then it is unlikely that the null hypothesis is
true and one rejects it. Otherwise, one cannot reject the null hypothesis.
How do we determine whether to reject the null hypothesis? It depends on the level of
significance \(\alpha\) (step 2 of conducting a hypothesis test), and the probability the sample
data would produce the observed result.
How do we determine whether to reject the null hypothesis? It begins the level of
significance α, which is the probability of the Type I error.
What is Type I error and what is Type II error?
When doing hypothesis testing, two types of mistakes may be made and we call them
Type I error and Type II error.
Reality
Decision
\(H_0\) is true \(H_0\) is false
Reject \(H_0\) Type I error Correct
Fail to Reject \(H_0\) Correct Type II error
55
If we reject \(H_0\) when \(H_0\) is true, we commit a Type I error. The probability of
Type I error is denoted by: \(\alpha\).
If we fail to reject \(H_0\) when \(H_0\) is false, we commit a Type II error. The
probability of Type II error is denoted by: \(\beta\).
Our convention is to set up the hypotheses so that Type I error is the more serious error.
There are two approaches for making a statistical decision regarding a null hypothesis. One is
the rejection region approach and the second is the p-value (or probability value) approach.
Of the two methods, the latter is more commonly used and provided in published literature.
However, understanding the rejection region approach can go a long way in one's
understanding of the p-value method. Regardless of method applied, the conclusions from the
two approaches are exactly the same. In explaining these processes in this section of the
lesson, we will build upon the prior steps already discussed (i.e. setting up hypotheses, stating
the level of significance α, and calculating the appropriate test statistic).
Let's start out here by having Dr. Wiesner walk through a comparison of the p-value approach
with the rejection region approach to hypothesis testing.
Test statistic: The sample statistic one uses to either reject Ho (and conclude Ha) or not to reject
Ho.
Critical values: The values of the test statistic that separate the rejection and non-rejection
regions.
Rejection region: the set of values for the test statistic that leads to rejection of Ho.
Non-rejection region: the set of values not in the rejection region that leads to non-rejection of
Ho.
P-value: The p-value (or probability value) is the probability that the test statistic equals the
observed value or a more extreme value under the assumption that the null hypthothesis is
true.
As mentioned previously in this lesson, the logic of hypothesis testing is to reject the null
hypothesis if the sample data are not consistent with the null hypothesis. Thus, one rejects the
null hypothesis if the observed test statistic is more extreme in the direction of the alternative
hypothesis than one can tolerate. The critical values are the boundary values obtained
corresponding to the preset α level.
56
DATA ANALYSIS AND
INTERPRETATION
PURCHASE OF 2-STROKE AND 4-STROKE BIKES:
Bikes No. of Consumers % age
2-strokes 76 27%
TOTAL 282
Series1, 4-
strokes, 103,
73%
Series1, 2-
strokes, 38,
27%
2-strokes 4-strokes
INTERPRETATION:
Most of the consumers i.e. 73% want to purchase a 4-strokes bike.
Whereas, 27% consumers want to purchase a 2-strokes bike.
57
INFLUENCING FACTORS:
Factors No. of consumers %age
Advertisement 70 25
Sales Team 50 18
Friends 110 39
Family 52 18
TOTAL 282
45
Series1, Friends,
39
40
35
RESPONDENTS
30
25
25
20 18 18
15
10
INTERPRETATION:
Most of the consumers i.e. 39% are influenced by the friends.
25% consumers out of 282 respondents are influenced by advertisement.
18% consumers out of 282 respondents are influenced by the family.
Whereas, rest of the consumers i.e. 18% are influenced by sales team while making the
purchase decision.
58
RESPONSE OF THE CONSUMERS REGADING MODELS AND
COLOURS:
BAJAJ, No. of
80 models &
colours, 70
70
NO. OF RESPONDENTS
60
50
40
INTERPRETATION:
Most of the consumers i.e. 50% like colours and models of Bajaj motorcycles.
Whereas, equal 14% consumers like colours and models of Hero Honda and LML
motorcycles.
Moreover, rest equal 11% consumers like colours and models of TVS and YAMAHA
motorcycles.
59
PREFERENCE FACTOR:
Features of bikes No. of consumers % age
Power 136 48%
Mileage 112 40%
Low maintenance 34 12%
Total 282
Series1, Low
Maintenance,
17, 12%
Series1,
Mileage, 56, Series1,
40% Power, 68,
48%
INTERPRETATION:
40 % consumers prefer mileage in their bike.
48 % consumers prefer power in their bike.
12 % consumers prefer low maintenance in their bike.
60
PREFERENCE OF BIKE REGARDING CC:
Prefer CC of bikes by No. of consumers % age
consumers
Under 100cc 0 0%
100-125cc 84 30%
125-150cc 144 51%
150cc & above 54 19%
Total 282
Series1, 150cc
& above, 27,
19% Series1, Under
100cc, 0, 0%
Series1, 100-
125cc, 42,
30%
Series1, 125-
150cc, 72,
51%
INTERPRETATION:
Most of the consumers i.e. 51% like to purchase the bike in between 125 cc and 150 cc.
And 30% of consumers like to purchase the bike in between 100 cc and 125 cc.
Whereas, rest 19% of consumers like to purchase the bike in 150 cc and above.
61
FACTORS AFFECTING CONSUMER BUYING BEHAVIOUR:
Looks, No. of
50 Respondents,
45
45
Pick up, No.
RESPONDANTS
40 of
35 Respondents,
Average, No. 28
30 of Low
Respondents,Brand Image, After Sales
25 Maintenance,
Price, No. of18 No.Power
of Service, No.
20 , No. of No. of
Respondents, Respondents, of
Respondents,Respondents,
15 11 11 Respondents,
10 10
10 8
5
0
INTERPRETATION:
31% consumers out of 282 are influenced by Looks Factors (Most Influencing Factor).
20% consumers out of 282 are influenced by pick up factor.
13% consumers out of 282 are influenced by mileage.
62
COMPARATIVE ANALYSIS:
Brand Name No. of consumers %age
Yamaha 20 7
Hero Honda 116 41
Bajaj 76 27
TVS 36 13
LML 20 7
Others 14 5
TOTAL 282
45
40
35
CONSUMERS (in %)
30
25
20
15
10
0
Yamaha Hero Honda Bajaj TVS LML Others
INTERPRETATION:
41% respondents out of 282 consumers like to purchase Hero Honda (Surva Guna Smpana).
27% respondents out of 282 consumers like to purchase Bajaj.
13% respondents out of 282 consumers like to purchase TVS.
7 –7 % respondents out of 282 consumers like to purchase LML and YAMAHA.
63
POST PURCHASE ANALYSIS:
Post Purchase Behavior No. of consumers %age
Full Satisfied 42 14.89
Satisfied 160 56.74
Dissatisfied 80 28.37
TOTAL 282
Series1,
Satisfied,
56.74, 57%
INTERPRETATION:
64
FINDINGS
FINDINGS
The age group 20-25 years figures out to be very much aware regarding 4-strokes bikes
Warranty/Guarantee never influenced any age far the purchase availability of spare part is
considered most important
Mileage was given top priority
Gift schemes and finance option are not option is not more success to influence the people
The income group Rs. 8000-12000 seems to be very aware regarding 4-strokes bikes market
65
SUGGESTIONS
SUGGESTIONS
The best target market for any new product is 20 to 35 yrs and income group of 8000 to
12000
Before the launch an aggressive advertising must be carried out in order to inform the
consumer about the new bike
The media adopted for such purpose should be electronic as it is wildly accepted
Continuous innovation in product process and services too are recommended to get the
competitive edge
Nicely designed and fuel efficient vehicle Is must to find better prospects and widen its
market
Easily available spare parts at reasonable price backed by efficient sales as competitions
An eye on competitors policies and review of its own according to changing market
condition will help in formulation of effective strategies from time to time
The pricing TAG which BAJAJ is going to put on its bikes should not be more Rs.35,000 –
50,000 in any case, because it is the price which is going to determine the success of the
product
Through demonstration in rural area so that they can get specification of bike
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CONCLUSIONS
CONCLUSIONS
From the analysis of the data, it can be concluded that the Bajaj and Hero Honda motorbikes are
most familiar by people.
Good looks
Good mileage
Affordable price
After sales services
Durability
Solid body
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REFERENCES AND ANNEXURE
REFERENCES
In this project while finalizing and for analyzing quality problem in detail the following books,
magazines and websites have been referred.
Books Consulted:
Magazines Consulted:
Newspapers:
Hindustan times
Times of India
The Hindu
Financial Express
Economics times
Websites Consulted:
www.bajajauto.com
www.herohonda.com
www.lml.com
www.yamaha.com
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ANNEXURE
QUESTIONNAIRE
Name : ……………………………………………………….
Father's Name : ……………………………………………………….
Age : …….
Nationality : …………..
Address : ……………………………………………………….
……………………………………………………….
……………………………………………………….
Telephone Nos. : ……………………………………………………….
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8. Which company produce minimum maintenance bike
a. Hero Honda b. Bajaj
c. LML d. TVS
e. Yamaha f. Others
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