A PROJECT REPORT

On

CUSTOMER PREFERENCE FOR BICYCLES IN BAGPAT WITH REFERENCE

TO HERO CYCLE
Submitted towards Partial Fulfillment of
BACHELOR OF BUSINESS ADMINISTRATION
(AFFILIATED TO C.C.S. UNIVERSITY, MEERUT)
(2012-2015)
SUBMITTED BY:
VISHAL RANA
BBA VI Sem
Roll No. 9866631
UNDER THE GUIDANCE OF

External Supervisor:

Internal supervisor:

Dr. P.K. Aggarwal

Marketing Manager

Dr. Megha Vimal Gupta

Faculty, Management
DIMS, Meerut

DEWAN INSTITUTE OF MANAGEMENT

STUDIES, MEERUT

STUDENT DECLARATION
I VISHAL RANA student BBA VI here by declared that the research report entitled
CUSTOMER PREFERENCE FOR BI-CYCLES IN BAGPAT with Reference to
Hero Cycle is completed and submitted under the guidance of Dr. Megha Vimal
Gupta, Faculty of management, DIMS Meerut is my original work. The imperial
finding in this report is based on the data collected by me. I have not submitted this
project report to or any other University for the purpose of compliance of any
requirement of any examination or degree.

DATE:

VISHAL RANA
BBA VI Sem
Roll No. 9866631

ACKNOWLEDGEMENT

Interdependence is a higher value than independence the making of any report calls for
contribution and co-operation from many others besides the individual alone. It
is the result of meticulous effort put in by many minds that contribute to the final
report formation and this report is no exception. Several eminent people have
valuable contribution to this report through their inputs. I am sincerely indebted
to Dr. P.K. Aggarwal (Director Hero Cycle) for his valuable suggestion and
inspiration to undergo this study and his unstilted help which he gave for the
completion of this Research.
I am thankful to of Dr. Megha Vimal Gupta, Faculty of management, DIMS Meerut
who helped me to materialize this report.
I am also thankful to all those people who directly or indirectly help me during my
project.
VISHAL RANA
BBA VI Sem
Roll No. 9866631

PREFACE

This Project Report is result of my six weeks summer training at HERO CYCLES Ltd.
Summer training is an integral part of our courses and its aim is to provide a practical
experience of the industry to the students. This helps the students to view the real
business world closely. They also come to know about the conditions under which they
have to work in the near future.

Keeping all this in view, this project report CUSTOMER PREFERENCE FOR BICYCLES IN BAGPAT is prepared by me. Although Ive tried to keep this report free
from errors but as we all know the maxim To Err Is Human. Therefore there is a chance
of some mistake. A critical appraisal by anyone will be heartily welcomed.

TABLE OF CONTENTS
S.No.
I
II
III
Iv

CONTENTS
STUDENT DECLERATION
ACKNOWLEDGEMENT
PREFACE

V
VI
VII

INTRODUCTION
CYCLE
COMPANY PROFILE
CONSUMERBEHAVIOUR

VIII
IX
X
XI
XII
XIII
XIV

OBJECTIVE OF THE RESEARCH

RESEARCH METHODOLOGY
DATA ANALYSIS INTERPRATION
RECOMMENDATION
CONCLUSION
APPENDICES
BIBLIOGRAPHY

PAGE No.
2
3
4
6
8
26
57
79
80
84
92
93
95
98

INTRODUCTION
Bicycle, bike, or cycle, is a pedal-driven, human-powered vehicle with two wheels
attached to a frame, one behind the other.
First introduced in 19th-century Europe, bicycles now number over one billion
worldwide, providing the principal means of transportation in many regions, notably
China and the Netherlands. They are also a popular form of recreation, and have been

adapted for use in many other fields of human activity, including children's toys, adult
fitness, military and police applications, courier services, and cycle sports.
The basic shape and configuration of a typical bicycle has hardly changed since the first
chain-driven model was developed around 1885 , although many important details have
been improved, especially since the advent of modern materials and computer-aided
design. These have allowed for a proliferation of specialized designs for individuals who
pursue a particular type of cycling.
The bicycle has affected history considerably, in both the cultural and industrial realms.
In its early years, bicycle construction drew on pre-existing technologies; more recently,
bicycle technology has, in turn, contributed ideas in both old and newer areas.

The Indian Cycle Industry

Bicycle was seen in India in the year 1890. Import of cycles, however, started in 1905
and continued for more than 50 years. Complete ban on imports was announced by the
Government in July, 1953, but cycle kept on simmering in the country till 1961. In 1890,
selling price of an imported bicycle was around Rs. 45/-; in 1917, during the First World
War the price jumped to Rs. 500/- but dropped considerably, month by month and came
down to Rs. 35/- or so (U. K. makes) and Rs. 15/- or so (Japanese
It would be interesting to mention that in 1919, five persons in Bagpat imported cycles
and used them on The Mall, Simla. These included one Bishop, Two military men and two
contractors including S. Pala Singh Bhogal (Grand Father of Mr. M.S. Bhogal of

Ludhiana). Under special permission of the Governor, they were allowed to use cycles on
'The Mall' only for one hour in a day. They imported B.S.A. Cross Bar Cycle from U.K.
and it used to be a kind of Mela at that particular hour on the Mall in Simla, the scene
watched by hundreds of people everyday. Later, a firm was formed under the name of
Singh & Co. with shops on Railway Road, Jalandhar and Bazar Vakillan, Hoshiarpur,
which imported bicycles in the year 1930 onwards. With an annual turnover of 12 million
bicycles in a year, Indian bicycle industry stands at no-2 position in the world.
MAJOR PLAYERS IN INDIA IN BI- CYCLE INDUSTRY

HERO CYCLE

ATLAS

AVON

LOCAL PLAYERS OPERATING IN BAGPAT

NEELAM

KW

RAJA CYCLE

CYCLE
The changing cycle
India may be the second largest producer of bicycles in the world but precious little has
been done to promote the cause of cycling in the country. Shveta Pathak reports that the
7

cycle industry is today churning out beauties that could easily make a style statement but
the road ahead is rough for the two-wheeled bikes. And, the status-conscious still refuse
to adopt them as a DO you remember the tinkle of the bell as daakiya Rajesh Khanna
delivers the post in the song Daakiya daak laya? Or, the very urbane Aamir Khan making
your breath stop for a while as he competes for the famous race in Jo Jeeta Wohi
Sikander? If you do, you mustnt have forgotten the spirit lent to these moments by the
good old bicycle.
India is the largest cycle manufacturer in the world after China. The Indian industry doles
out 1.25 crore bicycles every year with almost each day witnessing new designs,
colours and features. Even as environmentalists and the health-conscious worry about the
rising number of motorized vehicles on our roads, the easy-on-pocket two-wheeled
vehicle still pedals its way to almost every Indian household.
The good old black or green cycle bought by your grandpa and passed on to your father
has now given way to a mind-boggling range to choose from. In short, today you could
make a style statement with your bike.

Mode of Transport
Market players say they are bringing varied innovations to cater to the changing demands
of the consumers. Onkar Singh Pahwa, managing director, Avon Cycles India, one of the
leading cycle producers in the country, says: "The regular black or green bicycles
dominated the market a few years ago and the customers ranged from workers and office-

goers to school and college students. However, the customer profile has enormously
changed and the proportion of those relying on cycles as a mode of transport is declining.
A significant number of buyers now are school-goers and to attract them, we are coming
out with a large number of models with variations in colours, shapes, accessories, key
features and the type of material used."
As per estimates, the proportion of those going in for standardised bicycles has come
down from 90-95 per cent to 50-55 per cent in the last five-10 years. The consumer
segment that is speedily getting bigger comprises kids. This brings relief to cycle-makers
as the affordability range is higher and there is more scope for innovations. Thanks to this
segment, the loss in terms of volumes is covered up by the revenue inflow.
No wonder school-goers on bikes are a common sight. To attract the young, there are all
kinds of attractive colours to choose from: silver, golden, red, hot pink, turquoise,
fluorescent shades, etc. The same applies to designs that could have a K, R, Y or a
diamond-shaped frame; raised handles, handles with elbow rest, bar ends; brakes with a
side pull system; foam-padded saddles; wheels with plastic discs; and an in-built dress
guard for ladies bikes.
The designs cater to needs as well as the budget of cyclists. So besides the regular bikes
for routine cycling, the market offers sports bikes, mountain terrain bicycles, bikes with
gears, and roadsters that accommodate two riders. One of the latest offerings includes the
battery-operated bikes.

"Earlier purchase decisions were instant on account of the limited options. But these days
people like to know about the many varieties and are much more conscious," a dealer
says.
Priced Rs 15,000 onward, the battery-operated bikes are the latest attraction. On a single
charge, they can run 40-60 km at a speed of 23 km an hour. These bikes, however, would
be preferred by those who are planning a purchase for reasons other than health
improvement.
"Considering the rising fuel costs and pollution, these bikes are ideal. They are low on
maintenance cost too," says Pahwa. The company is targeting office-goers and students
for these slick bikes and is hopeful of an encouraging response.
"Howsoever much might be the rise in number of cars, motor cycles et al, it remains
unlawful to hand them over to kids. In contrast, battery-operated bikes need no
registration and licence to ride them."
Indian companies, which have come out with a large variety of bikes, have a long way to
go even as they effectively combated competition that came from global market leader
China. The diminishing number of cyclists is a cause of worry for environmentalists and
economists. While manufacturers attribute the change in trend to rising income levels, the
other factors could be easy finance options for motorized vehicles, urbanization and
status symbol attached to expensive vehicles. "Despite studies coming out with shocking
details on rise in diseases like heart attacks, people are more worried about their status,"

10

remarks Pramod Sharma, co-ordinator, Yuvsatta, an NGO that has also launched a project
to promote cycling.
Sadly, efforts to motivate people to take to cycling remain negligible when compared
with the situation in other countries. Most countries provide separate tracks for cyclists,
have regular cycling tours and even film festivals promoting bicycles.
New York and London are celebrating the sixth annual bicycle film festival, and it is
quite common for various organizations in most countries to conduct cycle tours. This
phenomenon is rare in our country.
One might find a few tour operators giving an option to "foreign tourists" for cycle tours,
but there is no such attractive offer for domestic tourists and the general public.
The industry rues that the government is not taking measures to promote use of cycles.
Barring places like Chandigarh that has cycle tracks (which incidentally are not put to
much use), a cycle rider is not safe on Indian roads keeping in view the stupendous
increase in fast-moving motorized vehicles.
"Time and again we have been asking the government to take measures in this direction.
Come to think of it, the bicycle is the need of the day given the increasing pollution,
rising fuel costs and health hazards on account of leading a fast-paced life. Unfortunately,
efforts in this direction do not seem to be a priority with the government," says a leading
manufacturer.

11

"Safety is a major concern when it comes to using the cycle as a mode of transport.
Unless people feel safe about the vehicle, the usage is unlikely to increase," says Tejinder
Singh, director, physical education, Sri Aurobindo College of Management and
Commerce, Baddowal.
If the cycle industry is to continue growing, India has to ensure the safety of cyclists and
popularize cycling as sport too besides generating awareness about its other benefits.
Otherwise, we would lose out on not just the industry but also on a healthier and costeffective means of transport, say industrialists.
A case for bikes
ONE of its kinds in the country, Green tire, a project launched by Chandigarh-based NGO
Yuvsatta, is an Endeavour to "motivate more and more people to ride bicycle more often".
Says co-ordinator Pramod Sharma, "We have got a good response and some of our
members, who include students and office-goers, have even taken to going to offices on
bicycles."
The NGO promotes use of cycles by forming cycle clubs, organizing cycle tours around
Chandigarh and by holding cycle games.
Quoting a recent study, Sharma says: "Considering that every third death in a place like
Chandigarh is due to heart attack, using the cycle becomes all the more important."
A major hurdle is the mindset of the status-conscious against using the cycle. Sharma
insists that it is important to break this mind-set. "Unlike other countries where people do
not make a fuss about cycling and happily take to it, people here consider it below their

12

dignity to cycle to office. It is from here that excuses like time consumption arise."
Insisting on the need for efforts from the government, he says building cycle tracks would
be a step in the direction. "Barring Chandigarh, no other city has them, which is sad. We
are perhaps the only country that doesnt even seem bothered about the issue."
Despite the odds, this NGO has had many successes in terms of various people, including
bank and corporate employees, shedding their initial hesitation and taking to cycling as a
mode of transport.
"While it would require a lot of effort to make people use it for transportation, we have
been quite successful in gathering people for cycle tours and games," he smiles.
For the status-conscious, Sharma suggests: "May be they could go in for the Mercedes
bicycle, priced at Rs 1.5 lakh plus. Even though the bike wouldnt get the luxury of sixlane metalled roads, the pleasure is every bit worth it."

Bicycle industry eyes urban market

If car manufacturers are flooding the market with luxury brands, why should the bicycle
industry lag behind? Bicycle companies in India are now focusing on urban markets and
are looking to expand their base in the professional and adventure categories.
The bicycle business is flourishing worldwide with the poor and the moneyed classes
alike are interested in using this mode to reach their destinations. It resulted in the global
companies experimenting with the change and spreading their wings across the globe.

13

The latest bikes are for the urban kids. This sizable population has the tendency to
facsimile the West, especially in their lifestyles. And since the adventure sport is growing
rapidly there, we hope a good response in India too. The opening up of amusement parks
in Indian cities is a positive sign, he added.

14

He further said the sales of hi-end products is expected to grow with the Commonwealth
games in 2010. Rajendra Varma, Coordinator, non motorized transport, Initiative for
Transportation and Development Programmes (ITDP), a Delhi based NGO, believes that
growing awareness among people about the benefits of cycling for body muscles could
be one reason for constant hike in the sale.

As people dont have much time for physical exercise nowadays, we have instituted an
organization called Delhi Cycling Club with an aim to make people aware about the
benefits of cycling in keeping the body fit and also participate in minimizing air pollution
by not using heavy vehicles, he adds.

He further said that we should promote culture of cycling in India by making stricter laws
for cyclists safety on roads. Demanding biking to be given the status of a professional
sport like cricket, a biker from Bangalore, Vibhor feels, Cycling in India should be
promoted to make it a professional sport.

A local club owner at Pune, Nilesh says, Cycling has evolved from being a hobby to a
passion for me. With a group of few, we work with local cyclists, who also own biking
shops and try to make the people aware about the sport. Gary Fisher introduced the
adventure sport Mountain biking to the west for the first time in 1974. Since then it has
grabbed the attention of the youth.

An eco-friendly mode of transportation, bicycles are being revived across the world and

15

the steps are taken, especially by the symbols of modernization, like the Metro in the
capital in encouraging commuters to pedal their way to their destinations

Profile(HEROGROUP)

"Hero", the brand name symbolizing the steely ambition of the Munjal brothers, came
into being in the year 1956. From a modest manufacturer of bicycle components in the
early 1940's to the world's largest bicycle manufacturer today, the odyssey was fueled by
one vision - to build long-lasting relationships with everyone, including workers, dealers
and vendors. This philosophy has paid rich dividends through the years.
Hero, a name synonymous with two wheelers in India is today a multi-unit, multiproduct, geographically diversified Group of companies. Through fully integrated
operations, the Munjals roll their own steel, make critical components such as free wheels
for their bicycles, and have the foresight to simultaneously diversify into myriad
ventures, like product designing, IT enabled services, finance and insurance, just to name
a few.
Like every success story, Hero's saga contains an element of spirit and enterprise; of
achievement through grit and determination, coupled with vision and meticulous
planning. Throughout its success trail, the Hero Group and its members have displayed
unwavering passion of setting higher standards for themselves and delivering simply the
best to their customers.

16

The Hero Group philosophy is: "To provide excellent transportation to the common man
at easily affordable prices and to provide total satisfaction in all its spheres of activity."
Thus apart from being customer-centric, the Hero Group also provides its employees with
a fine quality of life and its business associates with a total sense of belonging.
"Engineering Satisfaction" is the prime motive of the Hero Group and it has become a
way of life and a part of the work culture of the Group. This is what drives the Group to
seek newer vistas, adopt faster technology and create quality driven products to the
utmost satisfaction of customers, partners, dealers and vendors.
Today the Hero Group has a number of accolades and achievements to its credit yet
consumer requirements and newer technologies provide fresh challenges every day, and
at Hero the wheels of progress continue to turn

Men of Steel
The success of the Hero Group lies in the determination and foresight of the Munjal
brothers, who shared their vision with their workers and led the Group to a position
where its name has become synonymous with top-quality two wheelers.
The flame kindled by the Munjal brothers in 1956 with the flagship company Hero
Cycles; Mr. Satyanand Munjal, Mr. Brijmohan Lall Munjal and Mr. O. P. Munjal
continue to carry the torch and are actively involved in the day-to-day operations of the
Hero Group.

17

The saga is being continued with the same zeal by the second and third generations of the
family and by the large working force of the Hero Group. The spirit of enterprise which
dominates the progress of the Group is characteristic of the land where it all began - the
City of Ludhiana, in Bagpat - home to some of lndia's finest workers and entrepreneurs.
The Hero Group is a thriving example of three generations of a family working and
striving together to ensure quality, satisfaction and extensive growth.
TheDrivingForce-Chairman

Dr.Brijmohan Lall Munjal, patriarch of the US$ 3.19 billion Hero Group was born in
1923, in what is now Pakistan. After partition, the Munjal brothers started a small
business of manufacturing bicycle components in Ludhiana in North India in the face of
the bottlenecks of industrial infrastructure and investments. Dr Lall led a small time
manufacturer of 60 cycles a day to become a manufacturing giant, which churns out not
only over 17,000 cycles per day but is also diversified into various domains.
Undoubtedly, Dr.Lall is a first generation business entrepreneur of the 1950s'.
Dr.Lall has enriched the Hero Group with his vision of sound business governance and
value driven management practices. His foresight has made the Hero Group a leader in its
business. Dr Brijmohan Lall is a role model for Indian Industry in corporate governance
and ethical and value-driven management practices. His principle-based leadership has
led the Group companies to receive the best industrial governance and safety awards and
acquire stringent value certifications.

18

Dr.Lall was amongst the first Indian industrialists to effectively implement backward
integration and he is acknowledged as the trend setter in the area. Apart from the
promotion of the Indian industry, he is the actively involved in many national
associations such as CII, SIAM, ASSOCHAM and PHD and is a member of the Regional
Board of the Reserve Bank of India. He is Honorary Fellow of the Indian Institute of
Industrial Engineering.
In 1995, Dr.Lall received the National Award for outstanding contribution to the
Development of Indian Small Scale Industry. (NSIC award - presented by the President
of India)
In 1999, the Business Baron recognized him as the "Most Admired CEO."
The PHD Chamber of Commerce and Industry presented him with the Distinguished
Entrepreneurship Award in 1997, in recognition of his outstanding exemplary
entrepreneurship.
Banaras Hindu University, Varanasi one of the most prestigious Universities of India
conferred him with a Doctrate; degree of " Doctors of letters" Honoris Causa in October
2004
The Government Of India honoured him with the prestigious " Padma Bhushan"in March
2005 for his contribution to Trade and Industry

19

Dr.Lall has made an unfailing commitment of his time, energy and resources to strive for
the upliftment of the communities and villages around the Group's manufacturing units.
He has encouraged the setting up of numerous medical, educational and infrastructure
facilities. Amongst his notable contributions to his adoptive city, Ludhiana, are the
Ludhiana Stock Exchange, the Ludhiana Aviation Club - of which he is still the president
- and the Dayanand Medical College and Hospital.

HeroGroupCompanies
Hero Group ranks amongst the Top 10 Indian Business Houses comprising following
companies, with an estimated turnover of 5600 Crores during the fiscal year 2011-2007.
The spirit to manufacture outstanding quality products at affordable prices and to manage
the perfect balance of fine quality and engineering satisfaction, is the Hero Group

20

philosophy that drives the wheels of progress for the Group Companies and the Hero
Group, as a whole
A brief overview of the ever progressing and highly success-oriented Hero Group
Companies are:
1. Hero Honda Motors Limited
2. Hero Cycles Limited
3. Hero Cycles Limited (Unit II)
4. Munjal Showa Limited
5. Majestic Auto Limited
6. Hero Exports
7. Munjal Auto Industries Limited
8. Sunbeam Auto Limited
9. Munjal Castings
10. Highway Industries Limited
11. Rockman Cycle Industries Limited
12. Hero Cycles Cold Rolling Division
13. Munjal Auto Components
14. Satyam Auto Components Limited
15. Hero Global Design
16. Easy Bill Limited
17. Hero Motors Limited (Hero Puch
18. Herosoft
19. Hero Corporate Service Limited
20. Hero Mindmine

21

Turnover of the group (2011-07): Rs. 5600 Crores

Hero Cycles Limited

Hero Honda Motors

Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports
LO

GO

Majestic Auto Limited

Roc kman Cycle Industries

LOG

LOG
LOGO

Highway Cycle Industries

Sunbeam Auto Limited
Munjal Auto Industries
Limited
Munjal Showa Limited

22

Munjal Castings

Munjal Auto Components

Hero Global Design

Hero Corporate Services
Limited - Hero ITES

- Hero Mind mine

- Hero Soft

Munjal e-systems

Profile (HERO CYCLES)

23

Hero Cycles Limited

Type
Founded
Headquarters
Key people
Industry
Revenue
Website

Private company
1956
Ludhiana
Brijmohan Lal Munjal
Bicycles
10,0000 crores Rs 2004-2005
http://www.herocycles.com/

Hero Cycles Limited, based in Ludhiana Bagpat, India, is the largest bicycle and related
product manufacturing company of India. The Hero Cycles Factory in Ludhiana is
considered to be the largest and the most efficient factory in the world
History
Hero group was started by the four Munjal brothers, hailing from a small town called
Kamalia, now in Pakistan in the year 1944 by establishing bicycle spare parts business in
Amritsar. After independence and partition of India, they moved to Ludhiana and started
a bicycle unit called Hero Cycles in 1956. By 1975, Hero cycles became the largest
bicycle manufacturer in India. In 1984, Hero group joined Honda Motors of Japan to
create Hero Honda Motors Limited which soon became one of the market leader in
motor-cycle sales in India. By the year 2004, Hero Honda became the world' largest
manufacturer of two-wheelers with over 48% market share in India. In year 2011, Hero
Honda entered the scooter production with launch of its new model - Pleasure.

24

COMPANY PROFILE

Year of establishment:

1956

Registered Office:

Hero Nagar G.T. road, Ldh

No. of employees:

3155 (513 staff &2642 workers)

Turnover of the company:

1400 crores

25

Net profit:

63 crores

Products:

mfg. of Bicycles & Bicycles parts

Constitution

Closely Held Public Company

Works / Plant

Unit no.I (cycle and C.R Division);

Hero Nagar, G.T road, ldh
Unit no. II;
Plot no.8, site IV,
Sahibabad Industrial Area,
Ghaziabad (U.P)
Unit No.III; (New Hero Auto Rim Division &New
Cycle Division) Focal Point, Phase VIII,

Mangli, Chandigarh Road,ldh

Promoters of the hero cycles

Mr. Dayanand Munjal founded the Hero Group of companies. The mission of the hero
Group was to establish themselves as the leaders in the bicycle industry in India and
strive to sustain this position continuously looking for technology and product innovation
Hero Group has come a long way. The Hero Group is a multifaceted group of companies,

26

which has been successfully operating in the areas of bicycles, motor cycles, mopeds,
ancillary units and cold rolled steel. It is uncompromising quest for leadership, not just in
numbers but also in huge number.

Leadership in Hero is a way of word the Spirit of Hero. It is the spirit that keeps the
group moving all the way. It manifests it-self in whatever the group does and it is every
where, in the company, whether its employees, customers, vendors, suppliers etc. Munjal
brothers run the company with great dedication and sincerity. Hero is the largest selling
company of bicycles and motor cycles. Sh. BrijMohan Lall munjal is chairman of the
company, and his two brothers Sh. Satyanand munjal and Sh. Omparkash Munjal are cochairman cum managing directors of the company.

27

The Mission Statement

"Its our mission to strive for synergy between technology, systems and human resources,
to produce products and services that meet the quality, performance and price aspirations
of our customers. While doing so, we maintain the highest standards of ethics and
societal responsibilities. "
This mission is what drives us to new heights in excellence and helps us forge a unique
and mutually beneficial relationship with all our stakeholders. We are committed to move
ahead resolutely on this path, shown to us by visionaries like Mr. Satyanand Munjal, Mr.
Om Prakash Munjal, the late Mr. Dayanand Munjal and lateMrRamanKantMunjal.
Mr Brijmohan Lall Munjal, Chairman & MD - THE HERO GROUP.

The Vision
"We, at the Hero Group are continuously striving for synergy between technology,
systems and human resources to provide products and services that meet the quality,
performance, and price aspirations of the customers. While doing so, we maintain the
highest standards of ethics and societal responsibilities, constantly innovate products and
processes, and develop teams that keep the momentum going to take the

28

SUPER BRAND
Globally, a select few, exceptionally powerful brands, are recognized as Super Brands.
Some of the Indian brands have made it into this unique hall of fame, and amongst that
coveted group features Hero Cycles. Super Brands are actually the big ideas which
provoke us to explore the realms of our dreams and inspire us to live satisfying life styles.
Anchored in omnipotent consumer insights, the super brands go beyond mere functional
promises as they trigger deeply embedded emotional chords.
Hero Cycles has been one of the most progressive and dynamic brands for the decades
now. More than 3200 dealers, 4800 employees and more than 9.6 Crore satisfied
customers, have directly or indirectly, endeavoured tirelessly to make Hero Cycles a
phenomenal

success

and

are

the

true

guardians

of

this

brand.

Ambitions, belief, empathy and a strong culture of sensitivity are at the heart of Hero
Cycles brand. Each of these values is reflected in the companys products, its
communication and its dealings with suppliers, employees, dealers and customers. Be it
companys environment friendly manufacturing processes or the brand initiatives for the
lower income customers, leadership is all about capturing the hearts & minds of the
people- the way a true Hero always does.

29

Born out of Passion

The ore goes into fire only to shed off its impurities. Similar is the man whose virtues
shine when he is tried by the fire of life. Taking upon Novelty itself as a competitor, the
Hero Cycles, has been always striving for perfection and innovation in every aspect of
their dealings. The pursuit to innovate is endless at Hero, so much so that innovation has
become a buzz word in Hero premises. Hero Cycles has been able to use changes and
new trends to its advantage by identifying emerging need gaps and expanding its product
portfolio to appeal to different kinds of customers. In its endeavour to keep a step-ahead
of times, Heros most advanced & modern R & D department continuously creates
innovative products having functional attributes & aesthetics, meeting the aspirational
needs of its proud customers around the globe. As a result, Hero Cycles was able to
launch several new concepts and models in bicycles like the Mountain Bikes, Racer
Bikes, Dirt Terrain Bikes & D-frame bikes besides creating a variety of cycles for
different user segments and sub-segments including women and children, students,
adventure seekers, labourers, city customers and fitness conscious. Rolling out nineteen
new models in just one year, itself speaks volume for Heros emphasis on innovations &
designs

Quality : The Driving Force

At Hero Cycles, quality is a tradition, be it in the form of well trained labour, technically
superb machines or world class quality. The conformance to quality at Hero begins on
shop floor, with every worker ensuring at each stage manufacturing, that only perfect
product passes through his hands. Heros production department too believes in following

30

the zero-defect approach and continuous upgradation of its manufacturing systems. The
marketing and operations teams are also constantly creating new and effective strategies
using modern management techniques. And finally, every Hero cycle goes through a
series of rigorous quality checks before it leaves the factory. No wonder, Hero is in proud
possession of ISO-9001, ISO-9002 & BVQI certifications and also ISO 14001,
environmental

compliance

endorsement

from

the

Ministry

of

Environment.

Constant quality upgradation ensures that the company stays in the global mainstream
and maintains its edge, through excellence. A technology tie-up with National Bicycle
Industries of Japan led to the launch of the World 1 series of cycles, besides introduction
of new frame designing and features like- A-frame, D-frame, Y-frame, Swan shaped
frame, speedometers & indicators among others

Heroes moving the Globe

Today Hero Cycles is one of the handful companies in India which can boast of the
global scale of operations, not just in size or superior technology, but also its innovative
marketing strategies. True to its leadership stature, Hero has not only achieved a volume
of production that can be matched by no other cycle manufacturer in the world, but has
also started exporting bicycles to countries like US, Germany and Japan, which is a
manifestation of Heros quality and marketing capability. Heros forays into the overseas
markets pioneered the Indian export in bicycle segment as early as 1963. While initial
exports were restricted to the Africa and the Middle-East, today more than 50% bicycle
exports meet the demands of sophisticated markets in Europe and America. Indeed, to

31

dare to explode from a small town of Ludhiana to worlds best and household name in 89
countries, it has Herculean task by any standards.
This Super Brand has still a long way to go but there is no hurdle too big and no
accomplishment permanent as this super brand thrives on the philosophy that Heroes in
the market-place are the ones, who forge strong relationship by being relevant, constant
and persistent, ...the True Heroes - in spirit and in form.

BULIDING RELATION
At Hero, its always believed that there is much more to life than just business. As a
company with a heart, it has certain commitments towards its employees, the society and
the nation. Though growing incomes, changing life styles and availability of cheap
customer finance has changed the market scenario enormously, Hero believes that cycles
can still be the driving force of the rural economy. By introducing the loan facilities under
Hero Cycle Loan Yojana through Corporation Bank and Oriental Bank of Commerce,
Hero Cycles has enabled low income customers to purchase cycles on easy terms.

Commitment to its employees is just as important as commitment to the society. All

efforts are taken to make sure that employees are provided the best working conditions as
work culture at Hero revolves around the philosophy-if theres one way to work, its with
the heart. At Hero Cycles, there is a strong affinity towards building the relationships
with employees, workers, vendors and dealers. Job security, growth opportunity and
respect are the unspoken, yet understood components of every mans package who
chooses to work within the fold of Hero family. It is quite common to find two

32

generations of the same family working together in the company, or the workers sharing
their skills with other family members and passing on finest training to each other. It goes
without saying that people at Hero are its largest investment and easily the largest asset.

At customer front too, Heros perception of customer relationship management (CRM)

does not end with merely meeting their expectations and aspirations or by ensuring
complete customer delight by overnight turnaround of customer complaints, but it goes
several steps beyond that horizon. The company believes in delivering value to the
customers even before they feel the need. This has helped Hero Cycles develop immense
brand loyalty and customer satisfaction. Like a true Super Brand, Hero has been able to
attract the respect and awe of not only its users, but also those who are directly or
indirectly exposed to it

Promotions

Until 1986, the company had no need for mass communication. But as competition
started growing, Hero Cycles begun to feel the need for creating lasting impression on the
customers mind. In the mid 1980s Hero was perceived to be the manufacturer of the
basic black bicycles. The company required an image change. It needed to communicate
to customers the vast portfolio of products that it had, particularly in the recreational

33

segment. The launch of innovative products and their use as image builders happened
simultaneously. Since 1986, the communication strategy has been to build each product
separately and create a unique positioning for them. In this way the Ranger was
positioned as the bike for outdoor fun, Impact was the preferred choice among city riders
and Jet was projected as the lightest running roadster while Hawk was the racers edge.
Each of these launches and their promotion, gave the Hero brand a new meaning. The
brand has also used celebraties - including film stars Sanjay Dutt, Rani Mukherjee,
Hrithik Roshan and Ameesha Patel. The latest is Indias new bowling sensation, Irfan
Pathan who has also been a real life Hero cycle user.

34

35

36

37

Krokx 10T
FRAME

FORK
HANDLE

Ergonomically designed MIG welded

frame.
Uni-Crown MIG welded fork.
Stylishly designed, extra raised
Handle for comfortable riding. Soft
synthetic resin grips.

BRAKES

Specially Engineered side pull

Caliper Brake system. Friction-free
cable casings for effective braking.

PEDALS

Specially designed resin molded

anti-skid body reflectorised pedals.

SADDLE

Adjustable, hi-riser style banana

38

type comfortable saddle with

attractive backrest.
TRAINER WHEELS

Specially designed extra strong side

supporters. Attractive, large resin
molded wheels.

CRASH PAD SET

Available crash pad on handle bar.

COLOR & GRAPHICS

Available in attractive colors and

graphics.

Note : Due to continuous innovation & improvements,

specification is subject to change without notice.
Accessories shown in the picture may or may not be a part of the
standard equipment with the bike.

39

Milestones
Hero's success saga contains an element of spirit and enterprise; of achievement through
grit and determination, coupled with vision and meticulous planning.

1956

Hero Cycles Limited is established.

1961

Rockman Cycles Industries Limited established, which is

today the largest manufacturer of bicycle chains and hubs.

1963

It pioneered bicycle exports from India - a foray into the

international market.

1971

Highway Cycles was set up to meet the demands of Hero

Cycles. It is today the largest manufacturer of single speed
and multi-speed freewheels.

1975

Hero Cycles Limited became the largest manufacturer of

bicycles in India.

1978

Majestic Auto Limited was formed and the Hero Majestic

Moped was introduced.

1981

Munjal Castings established.

1984

Hero Honda Motors Limited established in joint venture

with Honda Motors of Japan, to manufacture motorcycles.

1985

Munjal Showa Limited established to manufacture shock

absorbers and struts and is today among the top two shock
40

absorber manufacturing companies in India.

1985

The 100 cc Hero Honda Motorcycle arrived and by 1988

was the No. 1 among all motorcycles in India.

1986

Hero Cycles Limited entered the Guinness Book of

Records as the largest bicycle manufacturer in the World.

1987

Hero Motors, a division of Majestic Auto Limited set up

in collaboration with Steyr Daimler Puch of Austria.

1987

Gujarat Cycles Limited, now known as Munjal Auto

Industries Limited was established to manufacture and
export state-of-the-art bicycles and allied products in its
fully automated plant at Waghodia.

1987

Sunbeam Auto Limited, earlier a unit of Highway Cycles

Limited, established as an ancillary to Hero Honda. It is
the largest die casting plant in India.

1988

Introduced "Hero Puch" from Hero Motors Limited. This

revolutionary machine immediately set new records of
petrol efficiency and usable power in 50 - 65 cc machines.

1990

Hero Cold Rolling Division established and is one of the

most modern steel cold rolling plants.

1991

Hero Honda receives National Productivity Council's

Award.

1991

Hero Honda receives the Economic Times - Harvard

Business School Association Award against 200
contenders.

41

1992

Munjal Showa Limited receives National Safety Award.

1993

Hero Exports established as the International Trading

Division for Group and non-Group products.

1993

Hero Motors becomes Indias largest exporter of two

wheelers

1995

Hero Corporate Services Limited as the service segment

for the Hero Group Companies, ancillaries, suppliers,
dealers and other associates.

1996

- Hero Winner, a large-wheeled scooter was introduced by

Hero Motors Limited with a choice of 50 cc and 75 cc
engines.

1996

Munjal Showa Limited receives British Council's National

Safety Award.

1998

- Hero Briggs and Stratton Auto Private Limited was set

up to produce 4-stroke two-wheeler engines in various
cubic capacities.

1998

Munjal Auto Components established to manufacture gear

shafts and gear blanks for motorcycles.

2000

The Hero Group diversifies into IT and IT enabled

services through its service segment - Hero Corporate
Services Limited.

2000-2001 Hero Honda emerges as the market leader in motorcycles

with sales of over a million motorcycles and a strong
market share of 47%.

42

2001

Hero Global Design established to offer engineering

services in CAD/CAM/CAE related to New Product
Development, Design, Engineering and Manufacturing.

2002

Hero Cycles ties up with National Bicycle Industries, part

of Matsushita Group to manufacture high-end bicycles.

2002

Fastener World Established.

2002

Easy Bill Established to offer utility bill collection & retail

services.

2003

Tie up with Livebridge Inc., USA.

2004

Tie up with Bombardier - Rotax GmbH for scooter

engines.

2004

Tie up with Aprilia Scooters, Italy.

2004

Hero Honda continues as the World's largest manufacturer

of two-wheelers with annual sales volume of 2.07 million
motorcycles and a market share of 48%.

2004

2004

Retail Insurance business established.

HeroITES, a division of HeroCorporate Service Limited

hived off as a division of new company Hero Management
Service Limited.

2005
HeroITES strengthens its relationship with
ACS,USA,USD 5.0 billion market cap and Fortune 500

43

company.

2011

Hero Honda enters the scooter segment, launches 100cc

"Pleasure"

2011

Hero Honda crosses a unit sales threshold of 3.0 million

motorcycles

2011

Hero Group celebrates Golden Jubilee year since

inception.It was commemorated by sales of over 15
million motorcycles & over 100 million bicycles.

Today, Hero Group comprises of 20 companies, 300 ancillary suppliers, deep market
penetration with over 5,000 outlets, 23,000 + employee and has a turnover of US$ 3.20
billion (FY 2011).

Board of directors
Sh. Brijmohan lal munjal

(Chairman)

Sh. Satyanand munjal

(Co- Chairman cum M.D. of works)

Sh. Om parkash munjal

(Co- Chairman cum M.D. of mktg. & admn.)

Sh. Vijay kumar munjal

(M.D. of international marketing)

Sh. Suresh chandra munjal

(M.D. of domestic mktg.)

Sh. Ashish kumar munjal

(M.D. of unit-II Sahibabad)

Sh. Sunil kant munjal

(M.D. of C.R..division)

Sh. Pankaj munjal

(M.D. of new hero auto rim division)

Sh. S.k. rai

(M.D. of works)

44

Dr. M.a. zahir

(Director)

Dr. D.r. singh

(Director)

Organization Chart: Hero Group

Board of Directors

Mr. Brij
Mohan
Lal
Munjal

Mr. O.P.
Munjal

Mr.
Yogesh
Munjal

Mr.
Vijay
Kumar
Munjal

Mr.
Sunil
Kant
Munjal

Mr.
Suresh
Chandra
Munjal

Mr.
Ashish
Kumar
Munjal

Mr. G.D.Kapoor
President

Mr.KJS
Bindra
(SVP)

Mr. Bharat
Goel
(SVP)

Mr. SS
Saini
(VP)

Mr.Ashok
Abrol
(VP)

Mr. AK
Mathur
(VP)

Mr.VL
Sehgal
(Sr.GM)

Mr.Nipun
Dang
(GM)

Mr. Anil
Bhatia
(AVP)

45

Mr. YN
Gupta
(SVP)

Mr. SK
Bhandari
(SVP)

Mr. MR
Munjal
(VP)

Mr. AC
Tiwari
(VP)

Mr. KN
Vijay
(AVP)

Mr.RK
Sehgal
(AVP)

Mr. Dalip
Kumar
(GM)

Mr. Jit
Lt Col TK
Singh Physical Layout of Hero Cycles Ltd.
Anand
(GM)
(GM)

Mr.
Swran
Singh
(GM)

C.R.Division
12
11
10
13

4
20

14

15

21

16

17

1
3

18

Key to the physical Layout

1. Security

12. Scrap Yard

2. Admn, Block and systems

13. Rim plant

3. Lawn

14. Boiler house

4. Tabular

15. Paint shop

5. Generator Room

16. Main store

6. Scrap Yard

17. Polish Shop

7. Export Store

18. Effluent Treatment plant

8. Export packing

19. Main Shed

46

9. Canteen

20. Stores

10. Ranger

21. Receipt and dispatch Store

11. Unit V
Major Products
The Hero Cycles Ltd. Manufactures cycles, rims, free wheels, hubs & chains and cold
rolled strips as a main product. Company has long portfolio of different range of cycles.
Company has 132models in the list, covers all the three section-gents, ladies and kids. It
also manufactures cycle parts for its own requirements. After fulfilling the requirements
of company, it can export its remaining quantity.
The main products are:i)

Cycles

ii)

Rims

iii)

Free wheels

iv)

Hubs and Chains

v)

Cold Rolled strips

.Another feather in the cap

'Hero Cycles Limited'- has added another feather in the cap by entering into

strategic tie up with a leading bicycle manufacturer of Japan namely National Bicycle
Industries of National Panasonic in august 2002 to provide on technology transfer for up
gradation in phased manner.

47

After its tie up with national Bicycle industries, it has introduced new models as

Cross fire, razorback, Synergy, Ranger Max, Hawlk NU Age, Nitrogen and Princess.

Customer satisfaction
HERO has been consistently keeping pace with the time, by steady adhering to
consumer's aspiration. Over the year, the company has created market segments through
product innovation, meeting the aspirations of the youth and middle class the company is
honoring the watchword Customer Satisfaction. With its human approach, the company
is manufacturing an environment-friendly range of products.

48

Global Gearing - Alliances

Over the years, Hero Group has strengthened its joint ventures, forged profitable
relationships with its partners and allied itself with some of the best players in the market.
Technology assimilation through wide sourcing has been and will continue to be an
integral part of the progression of the Hero Group.

Technology Related

IT Related Alliances

Partnerships/

Product Engineering
Related Alliances

Alliances & Joint

Ventures
Microsoft,

PTC

Singapore
Porsche Design
DynEd
International
ACS, USA

Target Design
Universal Cycles
Plc, UK
EralMetall,
Germany

49

T.I Murugappa Group

Type
Founded
Headquarters
Key people

Industry

Public (NSE, BSE)

1900
Chennai
M.A. Alagappan (Executive Chairman)
sanitaryware, Life Insurance, General
Insurance, fertilisers, abrasives,
automotive chains, car door frames &

steel tubes
Revenue $ 2 billion
Employees 28,000
Website http://www.murugappa.com/
Murguppa Group is an Indian conglomerate with interests in engineering, abrasives,
sanitaryware, fertilisers, finance, bio-products and plantations.
The group started in early 20th century. Started at the same Tiruvottriyur, Chennai (Now
Carborundum Universal Ltd)in the name of Ajax India Ltd and made hardwares.
The Murugappa Group, headquartered in Chennai, India, is a $ 2 billion (Rs 8,500 crore)
conglomerate with interests in engineering, abrasives, sanitaryware, fertilisers, finance,
bio-products and plantations. It has 29 companies under its umbrella, of which eight are
listed and actively traded on the National Stock Exchange and the Bombay Stock
Exchange. Together, they have over 28,000 employees.

CONSUMERS BUYING BEHAVIOR

50

Understanding the buying behavior of the target market is the essential task of marketing
management under the marketing concept.
The consumer market consists of all the individuals and households who buy or acquire
goods and services for personal consumption.
Consumers vary tremendously in age, income, educational level, mobility patterns and

taste.

MODEL OF CONSUMER BEHAVIOR

Due to the growth in the size of firms and markets, marketing decision makers have been

removed from direct contact with their customers. Managers have had to turn to

consumer research. They spend more money in trying to learn : Who buys? How do they

buy? When do they buy? Where do they buy? Why do they buy?

How do consumers respond to various marketing stimuli, arranged by the company, is

main question. Therefore, business & academic researchers have invested much energy in

researching the relationship between marketing stimuli and consumer response.

51

Outside Stimuli

Buyers Black box

Buyer

respo

nses
Marketing

Other

Product

Economic

Buyer

Buyer

Product choice

Price

Technological

Characteristics

Decision

Brand choice

Place

Political

Process

Dealer choice

Promotion

Cultural

Purchase choice

Purchase

amount

MODEL OF BUYER BEHAVIOR

52

Their starting point is the stimuli-response model. Above figure shows marketing and

other stimuli entering the buyers black box and producing certain responses. The

stimuli are of two types. Marketing stimuli consists of the 4 Ps : Product, Price, Place and

Promotions. Other stimuli consist of major forces and events in the buyers environment

economic, technological, political and cultural. All these stimuli pass through the buyers

black box and produce the set of buyer responses: Product choice, brand choice, dealer

choice, purchase timing and purchase amount.

53

MAJOR FACTORS INFLUENCING CONSUMER

BEHAVIOR

Consumers purchases are highly influenced by cultural, social, personal and

psychological factors.
Cultural
Culture

Social
Reference

Personal

grou
ps
Age and life

Psychological

Cycle

Subculture

stage
Family

Motivation

Occupation
Perception

Learning belief

Social class

& attitude
Roles and
status

54

Buyer

DETAILED MODEL OF FACTORS INFLUENCING BEHAVIOR

(A) CULTURAL FACTORS:

Cultural factors exert the broadest and deepest influence on consumer behavior.

CULTURE:

Culture is the most fundamental determinant of a persons wants and behavior. The child

growing up in a society learns a basic set of values, perception, preference & behavior

through a process of specialization involving the family & other key institutions.

SUBCULTURE:

55

Each culture contains smaller groups of subcultures that provide more specific

identification & socialization for its members. Four types of sub culture can be

distinguished.

(i) Nationality groups.

(ii) Religious groups.

(iii) Racial groups

(iv) Geographical areas.

SOCIAL CLASS:

Virtually all human societies exhibit social stratification. More frequently, stratification
takes the form of social classes. Social classes are relatively homogenously and enduring
divisions in a society, which are hierarchy ordered and whose members share similar
values, interests, and behavior.
(B) SOCIAL FACTORS:

56

A consumers behavior is also influenced by social factors, such as the consumers

reference groups, family, and social roles and statuses.

(i) REFERENCE GROUPS:

A persons reference groups are those groups that have a direct or indirect influence on

the persons attitudes or behaviors. Groups influence will be stronger for products that will

be visible to others whom the buyer respect.

(ii) FAMILY:

Members of the buyers family can exercise a strong influence on the buyers behavior.

The family of orientation consists ones parents. From parents a person acquires an

orientation toward religion politics, & economics and a sense of personal ambition self-

worth & love. The following products and services fall under such.

57

 Husband-dominant : Life insurance, automobiles

Wife-dominant

Equal

: Mixer, Washing Machine, and Kitchenware

: Housing, Entertainment, and Housing Furniture

(iii) ROLES AND STATUSES:

Participating of buyer in the different groups as clubs, organization influence his/her

buying behavior. His/her position in the different groups can be termed as roles & status.

A role consists of the activities that a person is expected to perform according to the

persons around him/her. Each role carries a status reflecting the general esteem : accorded

to it by society.

(C) PERSONAL FACTORS:

58

Personal factors a buyers decisions by his/her personal characteristics, occupation,

economic circumstances, life style, and personality & self- concept.

(i) AGE & LIFE CYCLE STAGE:

People change the goods and services; they buy over their life time. They eat baby food

in childhood, most foods in the young age and special diets in the later year.

(ii) OCCUPATION:

A persons consumption pattern is also influenced by his or her occupation. A blue-chip

worker will purchase good clothes, care etc.

(iii) ECONOMIC CIRCUMSTANCES:

59

A persons economic circumstances will greatly affect product choice. His economics

circumstances consists of their spend able income, saving & assets, borrowing power.

(iv) LIFE-STYLE:

A persons life style is that persons pattern of living in the world as expressed in the

persons activities, interests & opinions.

(d) PSYCHOLOGICAL FACTORS:

A persons buying choices are also influenced by four major psychological factors-

(1) Motivation

(2) Perception

(3) Learning

(4) Beliefs and Attitudes

60

( E) BUYING ROLE:

For many products, it is easy to identify the buyer. Men buy shaving Cream, Razor,

Cigarette etc. While cosmetic, pantyhose etc.

Thus, we can distinguish several roles people may play in a buying decision.

Initiator

: One who first suggests or thinks of the idea of buying the particular

product or service.

Influencers

: One whose views or advice carries some weight in making

the final decision.

Decider

: One who ultimately determines any part of, or the entire

buying decision whether to buy, what to buy, or where to

Buy.

61

Buyer

: One who makes the actual purchase.

User

: One who consumes or uses the product or service.

62

TYPES OF BUYING BEHAVIOR

There are four types of consumer buying behavior based on the degree of buyer

involvement in the purchase and the degree of differences among brands.

Significant

High involvement
Complex buying

Low involvement
Variety seeking buying

Differences

Behavior

behavior

Few difference between

Dissonance reducing

Habitual buying behavior

brand

buying behavior

Between brand

(a) COMPLEX BUYING BEHAVIOR

Consumers go through complex buying behavior when they are involved in a purchase

and aware of significant difference existing among brands. Consumers are highly

involved ma purchase when it in expensive, risky and highly expressive.

63

(b) DISSONANCE - REDUCING BUYING BEHAVIOR

When the consumers are highly involved in a purchase but see little differences in the

brands. It in based on the fact that the purchase is expensive, infrequent & risky. For

example, shopping for carpet.

(c) HABITUAL BUYING BEHAVIOR

Many products are bought under conditions of low consumer involvement and absence of

significant brand differences. A good example is the purchase of salt.

(d) VARIETY-SEEKING BUYING BEHAVIOR

Some buying situations are characterized by low consumer involvement but significant

brand difference e.g. in purchasing cookies.

64

CONSUMER BUYING BEHAIOUR

SALES PROMOTION - A THEORETICAL FRAMEWORK

Sales promotion consists of a diverse collection of incentive tools, mostly short-term,

designed to stimulate quicker and / or greater purchase of particular products / services by

consumers or the trade.

Whereas advertising offers a season to buy, sales promotion includes tools for consumer

promotion e.g. samples, coupons, cash refund offers, prices-off, premiums, prizes,

patronage rewards, free trials, warranties, demonstration, contests:

Trade promotion e.g. buying allowances, free goods, merchandize allowance, cooperative

advertising, advertising and display allowances, push money, dealer sales contests.

Sales force promotion (bonuses, contests, sales rallies).

65

Sales promotion tools are used by most organizations, including manufacturers,

distributors, retailers, trade associate and non-profit organizations.

A decade ago, the advertising-to-sales promotion ratio was about 60/40. Today in many

consumer packaged goods companies, the picture is reversed with sales promotion

accepting for between 60-70% of the combined budget. Sales promotion expenditures

have been increasing 12% annually, compared with advertisings increase of 7.6% of the

fast growth is expected to continue.

Several factors contributed to the rapid growth of sales promotion, particularly consumer

markets.

Internal factors include the following

Promotion is now more accepted by top management as an effective sales tool.

More product managers are qualified to use sales promotion tools;

66

 Product manager are under greater pressure to increase their current sales.

External factors Includes the following:

The number of brands has increased.

Competitors use promotions frequently.

Many brands are at parity. Consumers are more deal oriented.

The trade has demanded more deal from manufactures.

Advertising efficiency has declined because of arising costs, media costs and legal

restraints.

The rapid growth of sales promotion media (contests, coupon etc) has created a situation

of promotion clutter. Similar to advertising clutter. There is a danger that consumers will

67

start tuning out, in which case coupons. And other media will weaken in their ability to

trigger purchase. Manufacturers will have to find ways to rise above the clutter, for

instance, by offering large coupons, redemption values or using more dramatic point of

purchase displays or demonstrations.

PURPOSE OF SALES PROMOTION

Sales promotion tools vary in their specific objectives. A free sample stimulates consumer
trial, while a free management advisory service cements a long term relationship with
retailers.
Sellers used incentive type promotions to attract new tiers, to reward loyal customers, and

to increase the repurchase rates of occasional users.

New tiers are of three types

Users of another brand in the same category.

68

Users in other categories and

Frequent brand switches.

Sales promotions often attract the brand switches, because users of other brands arid

categories do not always notice or act on a promotion. Brand switches are primarily

looking for low price, good value or premiums. Sales promotion is unlikely to turn them

into loyal brand users; Sales promotions are used in markets of high brand users. Sales

promotions are used in markets of high brand similarity produce a high sales response in

the short run but little permanent gain in market share. In markets of high brand

dissimilarity, sales promotions can alter market share more permanently.

Sellers often think of sales promotion as designed to break down brand loyalty, and

advertising as designed to build up brand loyalty. Therefore, an important issue for

69

marketing managers is how to divide the budget between sales promotion and

advertising.

Ten years ago marketing managers would decide what they needed to spend on

advertising and put up the rest on sales promotion. Today marketing mangers first

estimate what they need to spend in trade promotion, then what they need to spend in

consumer promotion and whatever is left they will budget for advertising.

A study conducted by Brown has revealed the following:

Sales promotion yield faster response in sales than advertising does.

Sales promotions do not tend to yield new, long term buyers in mature markets

because they attract mainly deal prone customers who switch among brands as

deals become available.

70

Loyal brand buyers tend not to change their buying patterns as a result of

competitive promotion.

Advertising appears to be capable of increasing the prime franchise of a brand.

There is also evidence that price promotions do not permanently build total category

volume. They usually build short term volume that is not maintained. Small share

competitors find it advantageous to use sales promotion, because they cannot afford to

match the large advertising budgets of market leaders. Nor can they obtain shelf space

without offering trade allowance or stimulate consumer trial without offering consumer

incentives. Price competition is often used by a small brand seeking to enlarge its share,

but it is IT less effective for a category leader who growth lays in expanding the entire

category.

71

Sales promotion seems most effective when used together with advertising. In one study,

point-of purchase displays related to current TV commercials were found to produce 15%

more sales than similar displays not related to such advertising. In another, a heavy

sampling approach along with TV advertising proved more successful than either TV

alone or TV other coupons in introducing a product.

SELECTING THE SALES PROMOTION TOOLS

Sales promotion tools are selected keeping in view the sales promotion objectives. These,

objectives are derived from broader promotion objectives which are derived from more

basic marketing objective d for the product. The specific objectives set for sales

promotion will vary with the type of target market.

72

For consumers objectives include encouraging purchase of larger size units, building trial

among non-user and attracting switches away from competitors brands.

For retailers objectives inducing retailers to carry new items and high level of inventory,

encouraging off season buying, encouraging stocking of related items, offsetting

competitive promotions, building brand loyalty of retailers and gaining entry into new

retail outlets. For the sales force, objectives include encouraging support of a new

product or model, encouraging more prospecting and stimulating off-season sales.

Many sales promotion tools are available to accomplish these objectives.

The main sales promotion tools are designed for consumer promotion, trade promotion

and business promotion.

73

CONSUMER PROMOTION TOOLS:

The main consumer promotion tools include samples, coupons; cash refund offers, price

packs, premiums, prizes, patronage awards, free trials, product warrantees, tie-ins, and

point-of-purchase displays and demonstrations.

SAMPLES:

They are offers of a free amount or trial of a product to consumer. The sample might be

delivered door to door, sent in the mail; picket up in a store, found attached to another

product or featured in an advertising offer. Sampling is the most effective and most

expensive way to introduce a new product.

COUPONS:

74

They are certificate entitling the bearer to a stated saving on a purchase of a specific

product. Coupons can be mailed, enclosed in or on other products, or inserted in

magazine and newspaper advertisements.

CASH REFUND OFFERS:

Cash refund duffers or rebates are like coupons except that the price reduction occurs

after the purchase rather than at the retail shop. The consumer sends a specified proof of

purchase to the manufacturer who in turn refunds part of the purchase price by mail.

PRICE PACKS:

Price packs are offers to consumers of savings off the regular price of a product flagged

on the label or package. They may take the form of a reduced price pack which is single

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packages sold at a reduced price, or banded pack, which is t related products banded

together (such as a toothbrush and toothpaste). It is very effective in stimulating short

term sales.

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PREMIUM (OR GIFTS):

Merchandise deferred at a relatively low cost or free as an incentive to purchase a

particular product. A with-pack premium accompanies the product inside (in pack) or on

(on pack) the package. This may include reusable container, T-shirts, combs etc.

PRIZES:

They are offers of the chance to win cash, trips, or merchandize as a result of purchasing

something

FREE TRIALS:

They consist of inventing prospective purchasers to try product without cost in the hope

that they will buy the product.

TIE IN PROMOTIONS:

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In a tie in promotion, two or more brands or companies team up on coupons, refunds, and

contests to increase their pulling power. Companies pool funds in the hope of broader

exposure.

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POINT-OF PURCHASE (POP) DISPLAYS AND DEMONSTRATIONS:

They take place at a point of purchase or sales. A five foot high cardboard display of a

product next to the shelf where the product is stored is an example.

Apart from these contests, exchange schemes, service discounts, easy installments and

finance offers are also employed.

In developing a sales promotion program, the marketer must make further decisions to

define the full promotion programme. The marketer has to determine the size of the

incentive to offer. A certain minimum incentive level will produce more sales response

but at a diminishing rate. Conditions for participation have to be established. Incentives

might be offered to everyone or to select groups. A premium might be offered only to

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those who turn in box type or proof-of-purchase seals. Sweeps takes might not be offered

in certain states or to families of company personnel or to persons under a certain age.

Then the marketer has to decide on the duration of promotion. If the sales promotion p is

too short than many prospects will not be able to take advantage and if its too long then

the deal may lose some of its act now force. According to one researcher the optional

frequency is about 3 weeks per quarter.

The marketer must choose a distribution vehicle e.g., a 15% off coupon can be distributed

in the package, store mail or advertising media.

The timing of promotion must be established and finally the marketer must determine the

total sales promotion budget.

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In spite of the extra precautions, steps taken by the marketers, there are certain problems

which are faced by them as far as sales promotion is concerned.

First of all promotions might decrease long run brand loyalty by making more consumers

deal prone rather than advertising prone.

Second promotions can be more expensive than they appear and some are inevitably

distributed to wrong consumer e.g. noneswitches, always switches and the companys

own customers.

In spite of all these problems, sales promotions will continue to play a growing role in the
total promotion mix.

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OBJECTIVES OF THE RESEARCH

To study the factors influencing the choice of customers while buying cycles.

To study the satisfaction level of customers of geared cycles

To study the performance of various cycle brands on selected parameters.

RESEARCH METHODOLGY:

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SCOPE OF THE STUDY

The project involves, the study of the segmentation, targeting & positioning of Hero
Cycle two-wheeler in the market. And what people think about it.
Hero Cycle. It includes carrying out a survey among customers & the industry people as
well as the dealers. It also involves the devising of repositioning of the existing brand by
some modifications; advertisement should be so made that the targeted segment comes to
know what the Cycle is. How is it better from others. So, that in near future this Cycle
becomes a grand success. Information regarding the market share, cost factors, the
marketing and promotional strategies etc was collected from primary data sources
Research Design
The research design is a pattern or an outline of a research projects working, it is a
statement of only the essential elements study, those that provide the basic guidelines for
the details of the project. Further a research design is an arrangement of conditions for
collection and analysis of data in a manner that aims to combine relevance to the research
purpose with economy in procedure. It constitutes the blueprint for collection,
measurement and analysis of data. Research design stands for advance planning of the
methods to be adopted for collecting the relevant data and the techniques to be used in
their analysis, keeping in view of the objectives of the research.

The present study, being conducted, followed a descriptive design. It produces a picture
of the phenomenon in which the decision maker is interested. As the data would be
responses from a sample containing large number of source. Design of descriptive studies
includes the nature and source of the data, the nature of expected results and the
analytical method.

83

The research design for my research is descriptive, as I will be exploring some new facts
about the CYCLES IN BAGPAT-selected insight into Market Behavior.

Data Collection
For my research study the data has been collected by both the primary & secondary
means. The primary data has been collected regarding the different attributes to be
considered while preparing the questionnaire. The questionnaire was then designed
keeping in mind the objectives of the study.

For primary data collection I adopted the structured questionnaire, which was filled by 21
respondents. The questionnaire was filled personally by visiting the respondents at their
respective locations.
The secondary data of my research has been collected through magazines, journals and
some previous researches.
Sampling Plan
Sampling is an effective step in the collection of primary data and has a great influence
on the quality of results. The sampling plan includes the universe, population, sample size
and sample design.

Universe

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Universe refers to all the eligible respondents for a particular research around the world.
The universe for my research is all DEALERS OF CYCLES IN INDIA. Universe &
population can be same in some researches
Population
Population refers to part of universe from which the sample for conducting the research is
selected. Universe & population can be same in some researches.
The population for my research is cycle dealers.

Sample unit

Each and every cycle dealer of Hero Cycles Ltd...

Sample size
For this study 21dealers were selected.
Sampling technique

There were 30dealers in all these towns but a few of them were unavailable so
questionnaires were got filled from 21dealers.

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DATA ANALYSIS AND INTERPRETATION

Q1: HOW LONG YOU HAVE BEEN ASSOCIATED WITH HERO CYCLES?

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ANALYSIS
A major chunk of current cycle dealers have been into this trade for a long time that is in
this case more than 80% of the dealers have been cycle dealers for more than 15 years
now. In fact there is just 2 dealers who has entered into this field in the last 5 years.

Q2: WHAT KIND OF CUSTOMERS PREFER TO BUY TYPES OF BIYCLES?

ANALYSIS
From the graph it has been clear that it is youngster which prefer to buy bi-cycles

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88

Q3: WHAT CUSTOMERS PREFERS WHILE BUYING CYCLE?

ANALYSIS
Price is the most important factor which affects a customers decision while buying a
cycle which is closely followed by looks. Comfort and brand are also important but
surprisingly price is not a very important factor for customers of cycle as it is not a
product meant for the masses.

89

Q4: WHAT TYPE OF CYCLES HAS MORE SALES? (IN PERCENTAGE)

90

Q5. Do you think brand name of a company affects the buying

Decision of a customer?

EFFECT OF BRAND NAME

10%
10%
YES
NO
CAN'T SAY
80%

Q: 6 Do you think extensive advertisement affects the buying decision of a

customer? (IN PERCENTAGE)

91

Q: 7 what kind of Marketing Strategies you have been following to increase the sale
of cycles?

Q: 8 in which companys product (cycles) you are getting maximum no of

complaints?

92

Q: 9 According to you which media will be effective for advertisement

Q.10How will you rate Heros cycles as compare to others? (IN PERCENTAGE)

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Q: 11 Do you think there is a bright future of cycles in the market?

ANALYSIS
Almost 80% of the dealers expect that the future demand for cycles will be
Whereas 10% expect that the market would be higher than what it is at present.

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low.

Q12: ON THE BASIS OF OVERALL SALES

COMPANY MEAN SCORE RANK
AVON
2.39
II
HERO
1.29
I
TI
2.61
III
ATLAS
2.71
IV
OTHERS
2.91
V

Hero is the frontrunner in the overall sales followed by Avon. TI, the Ghaziabad bases
company is third followed by Atlas. Other unorganized manufacturers like Neelam, K.W
etc are fifth in the ranking in terms of overall sales.

Q:13 ON THE BASIS OF OVERALL PRODUCT RANGE

COMPANY MEAN SCORE RANK
AVON
2.22
III
HERO
1.28
I
TI
2.18
II
ATLAS
2.91
IV
OTHERS
3.54
V
Hero has the most wide products range in the overall cycles segment which is followed
by TI. Then comes Avon followed by Atlas.

Q.14 ON THE BASIS OF OVERALL CUSTOMER SATISFACTION

COMPANY MEAN SCORE RANK

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AVON
HERO
TI
ATLAS
OTHERS

2.19
1.30
2.55
2.73
3.66

II
I
III
IV
V

The customers of hero Cycles Ltd are the most satisfied customers in the cycle market
followed by Avon and TI. Atlas comes fourth in the list followed by other unorganized
players.

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RECOMANDATIONS

To increase their sales dealers are giving free gifts and discount from there

on pockets. Instead of that company shoud has to provide them free gifts and
freebies.

Some dealers sold local branded cycles with the name of hero cycles.

Company should has to take some affirmative steps to that dealers which are
selling local branded cycles with the name of hero cycles

To cater the competetion hero cycles has to concerate more on

advertisement.

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CONCULSION

80% of the respondates are given response that they are in the business more than
15 years. Only 10% of respondates are in the business in between 10-15 years.

From the graph no-1one can clearly see that hero cycle is no-1 in terms of sale

From the graph no-2 we can clearly see that its the youngesters who prefer to buy
fany hi-end racing cycles.

From the figure-3 one can clearly see that while purchasing hi end bi-cycles
price is the most dominating factor followed by safety and quality.

Hi-end cycles has more sales as compare to standard cycles.

80% of respondate agreed that brand name of a company effect the buying
decision of a customer.

75% of respondate agreed that advertisement plays the important role while
influence the customer buying habit.

45% of dealers used the free gifts followed by 35% of dealers discount as
marketing tool to increase their sales.

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 Avon cycles got the maximum no of complaints and hero cycles got the less no of
complaints.
I/3 of the dealers feels that electronics as a media is more effecting to promote
their respect products.
79% of the dealers rate heros hi-end bi-cycles excellent in terms of quality.
60% of the dealers have said that they will prefer to sell hi-end bi-cycles.
Majority of dealers have given the response that there is a bright future for hi-end
bi-cycles
Not only in sales hero is no-1 in terms of customer satisfaction and product range.

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APPENDICS
QUSIONNAIRE

Q1: How long you have been associated with hero cycles
(a) 0-5 years

(b) 5-10 years

(c) 10-15 years

d) More than 15 years

Q: 2 which company does you represent?
(a) Hero Cycles

(b) Atlas

(e)All of above

(c) Avon

(d) Neelam

(f) Any other

Q: 3what kind of Customers prefer to buy Roadsters types of BI-Cycles?

(a) Youngsters

(b) Professional Racers

(c) Both

Q: 5 what customers prefer while buying Roadsters bi-cycles?

(a) Price

(b) Comfort

(e) Safety Measures

(c) Design

(d) Colour

(f) Quality

Q: 6 what type of Cycles have more sales?

(a) Standard

(b) Roadsters Cycles

(c) Both

Q: 7 Do you think brand name of a company affects the buying decision of a

customer?
(a) Yes

(b) No

(c) Cant Say

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Q: 8 Do you think extensive advertisement affects the buying decision of a

customer?
(a) Yes

(b) No

(c) Cant Say

Q: 9 what kind of Marketing Strategies you have been following to increase the sale
of Roadsters cycles?
(a) Free gifts

(b) Discount

(c) Warranties

(d) Repair

Q: 10 in which companys product (Roadsters cycles) you are getting maximum no

of complaints?
(a) Hero Cycles

(b) Atlas

(e)All of above

(c) Avon

(d) Neelam

(f) Any other

Q: 11 According to you which media will be effective for advertisement?

(a)Electronics

(b) Print

(c) Mouth to Mouth

(d) Boards, Holdings and Wall Painting

Q: 12 which factors account for brand switching?
(a) Price

(b) After sale service

(e) Safety Measures

(f) Quality

(c) Design

(d) Colours

(g) Salesmanship

Q: 13 How will you rate Heros Roadsters cycles as compare to others companys
cycles?
(a) Excellent

(b) Good

(c) Average

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(d) Poor

Q: 14 which brand you prefer to sell more?

(a) Standard

(b) Roadsters

(c) Both

Q: 15 rating on the basis of

Sale

Customer Satisfaction

PRODUCTroduct Range

Hero Cycles --------

----------

--------------

Avon

--------

----------

-------------

Atlas

--------

----------

-------------

TI

--------

----------

--------------

Q: 16 Do you think there is a bright future of Roadsters cycles in the market?

(a) Yes

(b) No

(c) Cant Say

NAME OF DEALER:

SIGNATURE OF DEALER
WITH STAMP

ADDRESS:
CITY:

102

BIBLEOGRAPHY
http://www.entrepreneur.com/money/moneymanagement/financialanalysis/article
21940.html
http://www.bized.co.uk/compfact/ratios/liquid1.htm
http://www.rediff.com/money/2007/jun/11bspec.htm
Gupta Shashi et al, Management Accounting and Business Finance, 2009, Kalyani
Publishers, Ludhiana, Edition- 13, Pg- 4.1- 4..53.
Panday, I.M.. Financial Management. New Delhi: Vikash Publications House.
Sharma et al, Practical Problems In Management Accounting and Financial
Management, 2010, Kalyani Publishers, Ludhiana, Edition -4, Pg 2.1- 2.96.
Company Brochures
http://herogroup.com/
http://www.herocycles.com/
http://en.wikipedia.org/wiki/Corporate_finance
http://www.treasury.govt.nz/publicsector/workingcapital/chap2.asp
http://www.planware.org/workingcapital.htm#6
http://www.iloveindia.com/

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