Hero Honda

A PROJECT REPORT ON CONSUMER BUYING BEHAVIOUR AT TIME TO PURCHASE HERO HONDA BIKE. SUBMITTED TO PUNJAB TECHNICAL UNIVERSITY

Submitted by

submitted to Mr. Kamaldeep singh Lecturer In management

Manohar BBA-III Uni. Roll no. 81409320060

GNA INSTITUTE OF MANAGEMENT AND TECHNOLOGY (2008-11) 1

CERTIFICATE This is to certified that Manohar lal student of BBA 3rd sem GNA-IMT Phagwara ,has undergone this project of “CONSUMER BUYING BEHAVIOUR AT TIME TO PURCHASE HERO HONDA BIKE” under the supervision of Mr. Kamaldeep

singh and submitted satisfactory project report during session 2008-11. This report satisfies entire practical fulfillment for the Punjab technical university examination. In the sincere efforts of the student hardwork, this report satisfies the practical study of them certified by Punjab technical university. ……………… Teacher sign

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PREFACE

Beginning of the system project is entirely creative. This does not come all of a sudden, but it comes by result of discussion, consultation and contemplation. Problem unsolved here can never be satisfactory eliminated later. It is therefore a slow process. Moreover practical training is an important part of management courses. The theoretical studies are not sufficient to get into the corporate world. Only practical knowledge can help us to understand the complexities of large scale organizations. To develop healthy managerial and administration skill in potential managers, it is necessary that theoretical knowledge must be supplemented with exposure to the real environment. Actually, it is life for, a management itself is realized. In my case I confronted myself to CONSUMER BUyING BEHAVIOR AT

THE TIME OF PURCHASE OF HERO HONDA BIKES. And the exposure that I could not have gained from the books. I found it very interesting and challenging.i take knowledge about this project from net and make this project in my own way.

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ACKNOWLEDGEMENT

We are heartily great-full to Mr. Kamaldeep singh .He have always been an invaluable source of inspiration, hard work, sincerity and dedication. It gives me immerse pleasure in submitting this project on “consumer buying behavior at the time of purchasing hero Honda bikes”. I have developed this project from GNA-IMT. I would like to express my sincere ineptness to my project guide Mr. Kamaldeep singh for his constant guidance and valuable support during the project work. Encouragement and excellent guidance in this successful completion of the project work.

Manohar

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INDEX

NUMBER

1

2

SUBJECT •

INTRODUCTUION •

INTRODUCTUION OF INDUSTRY

•

HISTORY OF COMPANY

THEORETICAL BACKGROUND •

PAGE NO. 7 8-9 10-14 15-20

CONSUMER BUYING BEHAVIOUR

3

PROBLEM DEFINATION

21-23

4

• PROBLEM DEFINATION • SCOPE OF STUDY • OBJECTIVES OF STUDY • LIMLTATIONS OF STUDY RESEACH METHODOLOGY

24-31

5 6 7 8 9 10

• INTRODUCTION • RESEARCH DESIGN • SOURCES OF DATA • RESEARCH INSTRUMENT • SAMPLING PLAN • DATA COLLECTION METHOD • DATA ANALYSIS AND INTERPRETATION • TESTING OF HYPOTHESIS FINDINGS SUGGESTIONS SWOT ANALYSIS OF HERO HONDA REFERENCE MATERIAL •

BIBLIOGRAPHY5

•

APPENDIX

32-46 47-49 50-52 53-54 55-56 57 58 59

LIST OF TABLE AND GRAPH No.

Name of Tables And Graphs

Page No

1 2 3 4 5 6 7 8 9 10 11 12 13

Have a bike Company Media Advertisement influence Knowledge from buying Decision maker Mode of purchase Features considered Time period Schemes that Attract most Want to change bike Test drive Satisfaction

33 34 35 36 37 38 39 40 41 42 43 44 45

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CHAPTER : 1 INTRODUCTION • INTRODUCTION OF INDUSRY • HISTORY OF COMPANY

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INTRODUCTION OF INDUSTERY Throughout the centuries man has striven to expand his capabilities through the use of machine. His ever inventive mind has constantly devised ways to use tool to increase his abilities to explore the world around him. To go faster, deeper, higher and further than before. Coupled with his need to find new thrills, new adventures and new modes of transportation, the invention refinement of the motorcycle seems an inevitable out come. It would seem that Michelangelo conceived of the bicycle as early 14th century. And his drawing shows a remarkable resemblance to he modern day bike. It had wheels of similar size and even pedals and chain. Albeit without any apparent means of steering. Through never built, it was a remarkably clever design, and early bicycle makers would have done well to study his concepts, there have, in fact been 4 machines built based on his drawing, attesting to the viability of his design. It wasn’t until 1869 that the first serious attempts were made to produce motor driven bicycles. These very first were powered by steam, and driven by leather belts or as in the case of the roper steam velocipede of 1869 by a system of levers attached to a crank on the driven wheel. In 1885 the Daimler, Europe this is consider by many as the first true motorcycle or motor bicycle, as it was the first to employ an internal combustion engine and was designed from the ground up to be motor powered. Designed by gottlibe Daimler it was

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powered by an Otto cycle engine producing about ½ horse powers. Note this design again employed wooden wheels and Daimler dropped the twist grip controls from his 1877 design in favor of leavers on the frame. In 1894 Hildebrand and Wolfmuller, France Worlds first production motorcycle. It came with a 1428 cc water cooled fourstroke motor producing 2.5 bhp. And speed of 25 mph. In 1898 orient-Aster, USA the American made production motorcycle was this entry built by the Metz Company, in Waltham, mass, it used an aster engine that was a French copy of the Metz Company, in Waltham, mass.

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History OF COMPANY

Type

: Public company

Founded

: January 19, 1984

Headquarters : Haryana, Indian Key People

: Brijmohan lall munjal

(Chairman and managing Director) Industry

: Automotive

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Produce

: Motorcycle, Scooters

Hero Honda Motorcycles limited is an Indian manufacturer of motorcycles and scooters. Hero Honda is a joint Venture that began in 1984 between the Hero Group of India and Honda From Japan. It has been the world’s biggest manufacturer of 2-wheeled motorized vehicles since 2001. When it produced 1.3 million motorbikes in a single year. Hero Hondas splendor is the largest selling motorcycle its 2 plants are in Dharuhera and Gurgaon, both in Haryana India. It specializes in dual use motorcycles that are low powered but very fuel efficient. 11

India has the largest number of two wheelers in the world with 41.6 million vehicles. India has a mix of 30 percent automobiles and 70 percent two wheeler in the country. India was the second largest two wheeler manufacturer in the world starting in the1950s with the birth of Automobile products of India (API) that manufactured scooters. API manufactured the lambrettas but, another company, Baja Auto Ltd. Surpassed API and remained through the turn of the century from its association with piaggio of Italy (manufactured of vespa) The license raj that existed between the 1940s and 1980s in India. Did not allow foreign companies to enter the market and imports were tightly controlled. Customers in India were forced to wait 12 years to buy a scooter from Bajaj. The CEO of Bajaj commented that he did not need a marketing department, only a dispatch department. By the year 1990, Bajaj had a waiting list that was twenty-six times its annual output for scooters. In the mid-1980s, the Indian government regulation changed and permitted foreign companies to enter the Indian market through minority joint ventures. The two wheeler market changed with four indo-Japanese joint ventures: Hero Honda, TVS Suzuki, Bajaj Kawasaki and Kinetic Honda. The entry of these foreign companies changed the Indian market dynamics from the supply demand side. With a larger selection of two-wheelers on the Indian market, consumer started to gain influence over the products they bought and raised higher customer expectations. The industry produced more models, styling options, price, and different fuel efficiencies. The foreign companies new technologies helped make the products more reliable and with better quality. Indian companies had to change to keep up with their global.

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During the 80s, Hero Honda became the first company in India to prove that it was possible to drive a vehicle without polluting the roads. The company introduced new generation motorcycles that set industry benchmarks for fuel thrift and low emission. A legendary 'Fill it - Shut it - Forget it' campaign captured the imagination of commuters across India, and Hero Honda sold millions of bikes purely on the commitment of increased mileage. Hero Honda has consistently grown at double digits since inception; and today, every second motorcycle sold in the country is a Hero Honda. Every 30 seconds, someone in India buys Hero Honda's top -selling motorcycle - Splendor. This festive season, the company sold half a million two wheelers in a single month-a feat unparalleled in global automotive history. Hero Honda values its relationship with customers. Its unique CRM initiative - Hero Honda Passport Program, one of the largest programs of this kind in the world, has over 3 million members on its roster. The program has not only helped Hero Honda understand its customers and deliver value at different price points, but has also created a loyal community of brand ambassadors.

Performance vis-à-vis Industry The Indian two wheeler industries has seen a paradigm shift from being a regime of regulation and tight control in the 1980s to a more liberalized and a competitive present day era. After missing out on the initial boom in two wheeler segment during the period of 1993-1996, Hero Honda has emerged as a world leader. The gap between motorcycles sold by Hero Honda and its closest rival is approximately 1 m units (23% of industry size). One of the reasons for the tremendous performance of Hero Honda is the significant increase of share of motorcycles in the two-wheeler segment, from 42% in FY99 to 77% in FY04. No doubt, that the shift in preference of Indian populace from scooters and mopeds towards 13

motorcycles has facilitated the growth of Hero Honda. However its performance vis-à-vis industry indicates that the performance of Hero Honda was better than the industry peers, barring two years. In the seven-year period ending FY04, it has achieved a CAGR of 30% in two-wheeler volumes against 11% of the industry.

Excellent Collaborator Relationship: Hero Honda is now the leading two-wheeler Company in India in terms of net sales (sales less excise duty value, which was Rs 3171 crores). It is both the leading two wheeler manufacturer and sales operation among Honda's worldwide operations. The Company has maintained excellent relationship with all stakeholders including its collaborators. Hero Honda has emerged as the most successful joint venture Company of Honda in the world, their relationship over 116 years old now.

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CHAPTER:2 THEORITICAL BACKGROUND • CONSUMER BUYING BEHAVIOUR

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CONSUMER BUYING BEHVIOUR The main aim of marketing is meet and satisfy target customers need and wants buyer behavior refers to the peoples or organization conduct activities and together with the impact of various influence on them towards making decision on purchase of product and service in a market. The field of consumer behavior studies how individuals, groups and organization select, buy, use and dispse of goods, service, ideas, or experience to satisfy their needs and desires understanding consumer behavior and knowing customer are never simple. The wealth of products and service produced in a country make our economy strong. The behavior of human being during the purchase is being termed as “Buyer Behavior”. Customer says one thing but do another. They may not be in touch with their deeper motivations. They are responding to influences that change their mind at the last minute. A buyer makes take a decision whether save or spend the money.

Definition of Buyer Behavior:Buyer behavior is “all psychological, Social and physical behaviors of potential customers as they become aware of evaluate, purchase, consume and tell others about product & service.

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Consumer Buying Decision Process There are following five stages in consumer buying decision process.

1. Problem identification:The buying process starts when the buyer recognizes a problem or need. The need can be triggered by internal or external stimuli. Marketers need to identify the circumstances that trigger a particular need. By gathering information from a number of consumers, Marketers can identify the most frequent stimuli that spark an interest in a product category. They can then develop marketing strategies that trigger consumer interest.

2. Information Search:The consumer tries to collect information regarding various products/service. Through gathering information, the consumer learns about completing brands and their features. Information may be collected form magazines, catalogues, retailers, friends, family members, business association, commercial, chamber of commerce, telephone directory, tradefair etc. Marketers should find out the source of information and their relative degree of importance to the consumes.

Personal Sources: Family, friends, neighbor, as quittances. Commercial Source: Advertising, sales persons, dealers, packaging, displays. Public sources: mass media, consumer, rating organizations. Experimental sources: Handling. Examine, using the product.

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3.

Evaluation of alternative:-

There is no single process used by all consumers by one consumer in all buying situations. There is several First, the consumer processes, some basic concepts are: First, the consumer is trying to satisfy need. Second, the consumer is looking for certain benefits from the product solutions. The marketer must know which criteria the consumer will use in the purchase decision.

4

. Choice of purchasing decision:-

From among the purchase of alternatives the consumer makes the solution. It may be to buy or not to buy. If the decision is to buy. The other additional decisions are: Which types of bike he must buy? From whom to buy a bike? How the payment to be made? And so on. The marketer up to this stage has tried every means to influence the purchase behavior, but the choice is properly consumers. In the evaluation stage the consumer forms preferences among the brands in the choice set. The consumer may also form an intention to but the most preferred brand.

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5. Post Purchase Behavior:After purchase the product, the consumer will experience the same level of product. The Marketer’s job not end when the product is buying must monitor post-purchase satisfaction, post-purchase action, post-purchase use and disposal



Post Purchase Satisfaction:-

The buyer, S satisfaction is a function Of closeness between the buyer, S expectation and the products Perceiver performance. The larger the gap between expectation and performance, the g greater the consumer dissatisfaction.



Post purchase Action:-

The Consumer, S satisfaction or dissatisfaction with the product influence subsequent behavior. If the consumer satisfied, he or she will exhibit a higher probability of purchasing the product again. Dissatisfaction consumer may abandon and return the product.



Post-Purchase Use or Disposal:-

The marketer should also monitor new buyers use and dispose of the product. If the consumer store the product in a close, the product is probably not very satisfying. If the consumer throws the product away, the marketer needs to know how they dispose of it; especially it can be hurt the environment.

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Characteristic of Buyer Behaviors The chief characteristics of the buyers behaviors are as follow:-

(1) It consists of mental and physical activities which consumers undertake to get goods and services and obtain satisfaction from them. (2) It includes both observable activities such as walking through the market to examine merchandise and making a purchase and mental activities-such as forming attitudes, perceiving advertising material, and learning to prefer particular brands. (3) Consumer behaviors are very complex and dynamic to constantly changing. And therefore, management need to adjust with the change otherwise market may be lot. (4) The individuals specific behaviors in the market place is affected by internal factor, such as need , motives, perception, and attitudes, as well as by external of enviourmenatal influences such as the family social groups, culture, economics and business influences.

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CHAPTER:3 PROBLEM DEFINATION • PROBLEM DEFINATION • OBJECTIVE OF STUDY • LIMITATIONS OF STUDY

21

PROBLEM DEFINATION To know the best consumer buying behavior and demand into the minds of consumer of Phagwara city because always consumer say something and does something. There are many companies manufacturing motorcycles into the market, at the same time as there are many companies manufacturing motorcycles, idea about thinking of customer on whether, what, how, and for whom to purchase the motorcycle. Therefore, research is required to measure present consumer buying behavior at the purchase of Hero Honda bike. so the researcher problem is to identify what are the criteria that prospective customer takes into consideration before buying the motorcycles.

SCOPE OF STUDY 

The main scope of the study is limited to Phagwara city.

 It also analysis the benefits accruing to the company as a result of those service.  This study has been made to find the level of satisfaction the customer has regarding the service provider by bike place.

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OBJECTIVES

OF STUDY

 To know market position of Hero Honda bike in the market.  To know consumer behavior for purchase of two wheeler bike.

Limitations of study 

When the buyers are busy we can’t get accurate data from them.

 According to the time limit of our project we can cover only the some area.  During survey some respondents may not give answer in a proper manner.

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CHAPTER:4 RESEARCH METHDOLOGY • INTRODUCTION • RSEARCH DESIGN • SOURCES OF DATA • SAMPLING PLAN • DATA COLLECTION METHOD

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RESERCH METHODOLOGY (A)Introduction Marketing research is the function which links the consumer, customer and public to the marketers through information used to identify and define marketing, opportunities and problems, generates refine marketing action; monitor marketing performance; and improve understanding of marketing as a process. Marketing research specifies the information required to address these issues; designs the method for collection information manages and implements the data collection process; analysis the results and communication the findings and their implication.

Research definition: “Research is careful inquiry or examination to discover new information and relationship and to expand and to verify exiting knowledge,” Research always starts with questions or a problem. Its purpose is to find answer to questions through the application of the scientific method. It is a systematic and intensive study directed towards a more complete knowledge of the subject studies.

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(B) Research design “Research design is the plan, structure and strategy of investigation conceived so as to obtain answer to research question and to control variance.” - BY KERLINGER From definition it is evident that research design is ore or less a blueprint of research. At the outset may be noted that there are several ways of studying and tackling a problem. There is no signal perfect design. The research design can be classified in to true broad categories: (A) Exploratory (B) Descriptive (C) Casual Exploratory research is focus on the discovery of ideas. Exploratory research is carried out to define problems and developed hypothesis to test later. An exploratory study is generally based on the secondary data that are reading available. It does not have to change his focus of direction, depending on the availability of new ideas and relationship among variables. Descriptive studies are undertaken in many circumstances. Descriptive studies can be complex, determining a high degree of scientific skill on the part of the researcher.

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Casual research helps in determined cause and effect relationship. Between two or more variables.

The present study seeks to find out the consumers attitude towards buying of bike. The study also aims at findings out the drawbacks of the marketing set up of Hero Honda PVT. LTD. So this makes the study a descriptive one. (D)

Sources of Data

The sources of data collection methods are as follows. a)

Primary data:-

The primary data is that which details we collect first time from the market and also used first time in the research. We also say that the information is first time in the research decision. To collect the primary data questionnaire is prepared structure nondisguise questionnaire is prepared. b)

Secondary data:-

Secondary data are those data which are already collected by someone for some purpose and are available for the present study; secondary data are already collected by the company’s records and other library’s books. When the secondary data are sufficient, the researcher has to be satisfied with the primary sources of data. Secondary data can be used as bases for comparison with primary data have been collected by questionnaire.

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(E) Data Collection Method Researcher instruments is the tool by which the researcher can do research on specific problems or objective. The most popular researcher instrument for collection data is “Questionnaire” for a particular investigation. It is simple for a moiled set of questions presented to respondents for their answers. Due to this flexibility, it is most common instrument used to collect the primary data. During the pre- testing of questionnaire, I seen the reaction of respondents and suggestions required to make change in research instrument. The questionnaire contains three types of questions. 

Open-ended question:It is helpful in knowing what is uppermost in the mind of the respondents. It gives complete freedom to the respondent.



Dichotomous questions :It has only two answers in form ‘yes’ or ‘n’, ‘true’ or ‘false’, ‘use’ or ‘do not use’. So the respondent is offered two or more choice.



Multiple-choice question:-

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In this, the respondent is offered two or more choice.

(F) Sampling plan Sampling is a process of obtaining. The information about the entire population by examine a part of it .The effectiveness of the research depends on the sample size selected for the survey purpose. (A) sample Site:The survey was conducted in Phagwara CITY. (B)Sampling Unit:It means “Who is to be surveyed”. Here target population is decided and it is who are interested to purchase “Bike” and sampling frame is developed so that every one in the target population has known chance of being sampled. So the survey is conducted particularly in Phagwara City. (C)Sample size:For the purpose of proper survey, there is need of perfect research instruments to find out sample size for more accurate result about buying behavior of bike. The sample size is 40 respondents. 29

Statically Formula for Sample Size is:n=p*q (z/e) 2 Were, n=Sample Size p=0.80(probability of satisfied customer) q=0.20(I-p) z=1.96(The z (95%) score associated with the degree of Confidence) e=0.05 (tolerable error) n= (0.84)*(016)*(1.96/0.05)2 = (0.1344)*(1536.64) =206.52 Sample Size n=206.52 Here, from calculation n=206.52 is found but for the simplicity of the study n=206.52have taken.

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(D)Sampling Method:A Stratified random sample is one where the population is divided in to mutually exhaustive strata or sub-group and then a simple random is selected within each of strata on age groups, occupation etc. It may be noted that stratification does not means absence of randomness. I use a simple random sampling method.

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32

1)

Have a bike

Result Yes No

No. of respondent(30) 28 2

2) Company name 33

Company Bajaj Hero Honda TVS LML

No. of respondent(30) 11 9 3 7

3) Media Media

No. of respondent(30)

34

Newspaper Television Friends Other

4 9 14 3

4) Advertisement influence Result Yes

No. of respondent(30) 22

35

No

8

5) Knowledge before buying Result Yes No

No. of respondent(30) 18 12

36

6) Decision maker Decision Father Mother Self Other

No. of respondent(30) 16 2 11 1

37

7) Mode of purchase Mode By cash By loan

No. of respondent(30) 22 8

38

8) Features consider Features Price Style mileage Easy driving Color Brand reputation

No. of respondent(30) 2 9 8 3 4 4

39

9) Time period Years 0-1 yr 1-2 yr 2-3 yr Above 3

No. of respondent(30) 4 19 5 2

40

10)Schemes attracts Schemes Special offer Exchange offer Cash discount Festival gift

No. of respondent(30) 7 4 13 6

41

11)Change a bike Result Yes No

No. of respondent(30) 13 17

42

12)Test drive Result Yes No

No. of respondent(30) 25 5

43

13)

Satisfaction

Result Yes No

No. of respondent(30) 27 3

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CHAPTER: 6 45

•

TESTING OF HYPOTHESIS

TESTING OF HYPOTHESIS A hypothesis is a proposition, which the researcher wants to verify. It is tall test and my null hypotheses are, H0: P = 0.40 H1: P ≠ 0.40 With reference to favorable market of Hero Honda Bike. Now to verify this hypothesis I have taken significantlevel of 1 %. It means in the long run risk of making the wrong decision is I out of every 100.

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Since the sample size is more than 30 the use of Z test is most applicable. Now, P = Probability of Hero Honda is given best by consumer. Q = Probability of other company bike is given best by consumer. X = Hero Honda bike is purchased by consumer. N = Total no. of Respondents. P = x/n =51/100 =0.51 q =1-p i.e. 0.49 Z calculation

= p–q _______ _______ √ PQ _______ 100 = 0.51- 0.40 __________ __________ √ 0.49*0.4 ________ 100 =

0.11 ________ ________ √ 0.00196

=

0.11 _______ 47

0.04427 = 2.48 = 2.48 < 2.56 So, How may accepted at 1 % level of significance. It may be concluded that 40 % of consumer go for other company bike and 60 % go for Hero Honda bike.

CHAPTER: 7 48

• FINDINGS

Findings  The study shows that 51 respondents are using Hero Honda.  The current trend is that respondents give maximum no of point to price and mileage.  The study show that 48 respondents are come to know from “others” and 26 respondents are come to know from “friends” about Hero Honda bike.  The study shows that 55 respondents are purchase Hero Honda bike by Loan and 45 respondents are purchase Hero Honda bike by cash.  The study shows that 31 respondents are give point to mileage.  The study shows that more no. of respondents gives more weightage to price. The more no. of serviceman, Students, 49

Businessmen, and others give more weightage to the price when Professionals give more weightage to the mileage.  The study shows that 46 respondents are father take a decision to purchase bike And 42 respondents are self take a decision to purchase bike.  The study shows that 30 respondents are give rank to available in show rooms and 35 respondents are give rank to after service.  The study shows that 43 respondents are giving excellent to festival offer and 41 respondents are give poor rank to the anniversary offer.  The study shows that 45 respondents are purchase Hero Honda bike whose salary is below 5000 income.

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SUGGESTIONS 1. Hero Honda should introduce a low price moped 51

2. For the promotion, company show make road-show that will 3. Increase the sales. The company should give more concentrate on the advertisement. 4. Hero Honda Company should implement a new strategy to reduce the competition and lead into the bike market. 5. As people expect more mileage per kilometer, company should increase the mileage of the hero Honda bike. 6. Hero Honda should make a sports bike like to Kawasaki Suzuki Hyabusa bikes which can run with maximum speeds.

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SWOT Analysis OF HERO HONDA SWOT Analysis

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 Strengths  Ability to understand customer’s needs and wants  Recognized and established brand name  Effective advertising capability

 Weaknesses  R&D is not close to the Hero manufacturing plant  Hero is vulnerable in the joint venture because  Honda Motor Company has so much power



Opportunities

54





Global expansion into the Caribbean and Central America



Expansion of target market (include women)



Become India’s leader in the scooter market

Threats



Honda Motorcycles and Scooters India can take away market share and cause joint venture to go sour



Bajaj Motors is a strong competitor

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CHAPTRE: 8 REFERENCE MATERIAL •

BIBLOGRAPHY

•

APPENDICES

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BIBLIOGRAPHY  Marketing research, G.C.Beri, Third Edition, Tata McGraw Hill Publishing Company Limited, New Delhi, 2000  Marketing management, Philip Kotler, Twelth (Millennium) edition, Prentice-Hall of India Private Limited, New Delhi, 2003

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