The brand name Hero Honda is derived from the two companies that is one is Hero and second is Honda. Hero is the company from India and the Honda is the one from Japan. The hero group used to produce bicycles, mopeds, health equipments and the automotive parts before getting joint venture with the Honda group from Japan. First they launched Hero bicycles in 1956. Then their success in cycle production and its development is continued till 1975 when they became the largest manufacturers of the bicycles in India. In 1978, they introduced Hero majestic Moped in the market. 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. Afterwards, in year 1984, Hero plc. Collaborated with Honda motors a Japanese company, for the production of motorcycles. In year 1985, Hero Honda introduced their first 100 cc motorcycles in India. Simultaneously along with their growth in bicycles, they achieved the record to enter the Guinness book of world records as they were the largest bicycle manufacturer in the world in 1986.
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In the succeeding year that is 1988, Hero Motors ltd.introduced Hero Puch a moped type small bike with 50-65 cc machine and was petrol efficient. With the growth in the company, in 1991 Hero Honda received National Productivity council's award along with the Economic Times - Harvard Business school Association Award against 200 competitors. In 1993, hero's exports established as an International Trading Division for Group and non group products and they became the India's largest exporters of the two wheelers. In year 1996, a large wheel scooter was introduced by hero motors with the choice of 50 and 75 cc engines, later in the year, Munjal showa ltd. Received British Council National Safety Award. In year 2000-2001, Hero Honda became the market leader in motorcycles with sales of over a million motorbikes.
In the same year, Hero Honda designed new product development with the help of CAD/CAM/CAE relating with the engineering and manufacturing. In year 2003, they tied up with Live bridge Inc. USA. In the next year, they tied up with Bombardier for the scooter engines and in the same year 2004, Hero Honda became the World's largest manufacturer of the two wheelers with annual sales volume of 2.07 million motorcycles with the market share of 48%. They introduced a new market segment by launching their new 100cc "pleasure" which was a perfect moped bike. And in the same year Hero Honda crossed a unit sale of 3.0 million motorbikes and Hero group celebrated their golden jubilee year, at that time their sale was of over 15 million motorcycles and more than 100 million bicycles which was one of the greatest achievement of the group. The achievement of the Hero Honda was because of their individual products as well. The first four stroke bike Hero Honda launched in India was Hero Honda CD 100 it was a fuel efficient bike superior to all at that time. As the time passed the company launched different models of bikes having a wider range of vehicles from the cheaper rate category to the higher rates category considering the buying behavior of the various segments of customers and the age groups that includes CD-Dawn which was the cheapest bike, Hero Honda Splendor which is the most successful bike in the cheap fuel efficient category to the high range bike like Karizma for 79,000 Rs. which had a lesser fuel efficiency but had a higher power.
History of Hero Honda Ambition:-
Hero Honda ambition was there in market till 2007 and was not successful in India because there were many factors as competitors, its machine was 135cc which was powerful and fuel efficient but its price was more than that of the competitor's same range bikes. Hero Honda thus terminated that bike from the market and now decided to re launch the same with some innovations in its technology like they invented advanced multi processor ignition system through their R&D department and made it more powerful. Also they changed the design of the bike and made it attractive.
SWOT ANAYSIS FOR HERO HONDA AMBITION:-
Always on Time
Marked to Standard
Ambition is having a powerful engine of 145 cc.
Ambition is having a superb design which looks like a CBZ. This is more popular among the youngsters.
Ambition came in the new technology that is advanced multiprocessor ignition system.
Ambition came with the lesser price as compared to its competitor's bike's price.
Having a long lasting battery life - a dry battery.
Damaged reputation in the market.
Having a chance to grow in an existing market.
Moving into new market segments that offer improved profits.
Could target the particular age group of people.
A new competitor in the market.
Price wars with the competitors.
A competitor has a new, innovative bike.
Competitors having superior access to channel of distribution.
Taxation may be introduced on your product.
Marketing plan for Hero Honda (Ambition) :-
MACRO ENVIRONMENT FOR HERO HONDA ;-
These are those factors where, organization has no control or these can affect the organization externally. For this PESTLE analysis is necessary to be done.
These are the factors like tax policies of government on the product to be re-launched. It's not necessary that they should be changed. Normally they don't change. But company has to be aware of such factors.
These are the factors like economic growth, interest rate and inflation rates. These can affect on organizations or product business forecasting. These are at the fluctual rates. These factors can affect the Ambition. If the interest rates are increased, then the buyer's behavior will change to buy the new bike and the case will not be different in terms of inflation also.
The main factor affecting in this is cultural because all of the countries are having their own culture, ethical values, and beliefs. So the product should be designed after considering these factors in mind. Also the factors like and age distribution should also be considered. Our bike is targeted mainly to the age group of young age group of people.
It includes technological changes or innovation or any kind of research and development. For any organization to be survived in the competition, adaptation and innovation in technology are important. Sometime these changes can be labor cost saving i.e. innovation of any new equipment or machinery for an organization that can reduce human efforts. Some of the technological changes can cause increase in production cost.
Like Ambition having a great scope of advertising in India through TV, billboards and through sponsorship.
These include factors like health and safety laws, consumer laws and regulation. Ambition is having very little influence of these factors.
These are the factors including all the recycling policies along with pollution control policies. Also this one is affecting too less to the Ambition as it is a 4 stroke bike and thus avoiding the pollution.
In this way Macro Environmental factors can affect the Hero Honda. This is the PESTEL analysis for macro environmental factors.
MICRO ENVIRONMENT FOR HERO HONDA AMBITION:-
This environment includes application of porter's five forces, generic strategies:-
Porter's 5 forces
The companies like Rolex IPEX provide the engine, suspension, brakes and some other spares to Hero Honda. The electrical parts, head lights, tail lights and switches are provided by the company Saicom International. In this case the suppliers have the power to bargain because in all the product line the same spare part is used by the company so it cannot early switch it. But the supplier maintains relationship with the company and the reason behind this is that they receive the order from the company on the regular basis.
Buyer Power :-
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Hero Honda has its own distribution channel therefore buyers are not considered to be powerful here. The reason behind this is that buyer's are fragmented in the market therefore no particular group of buyer had significance on sale of the bike or its price.
Competitive Rivalry :-
Competition is there in each and every business. They are having the competitors like Bajaj, TVS, YAMAHA etc. Hero Honda has a competitive advantage over its all the customer in the ways like they are having a huge customer base, they are having high sales in rural as well as in the cities. They are having a large distribution network, they are aware of the technical knowledge to its mechanism, they are having large service centre across whole country, they are having stable prices and their resale value is more than that of their competitor's bikes.
Threat of substitution :-
Hero Honda faces the threat of substitute in much more segments. Like splendor with the Discover, Karizma with pulsar 220 DTS Fi, pleasure with Scooty pep etc.
Threat of new entrants:-
There is a of course a threat of a new entrant for the Hero Honda. As a competitive market there is a threat of new entrants to the hero Honda is normal thing. There is only one thing that they can do for that is they should satisfy their customers through their bikes.
So according to me, porter's 5 forces have a very strong effect on the Hero Honda's new bike Ambition.
Porter's generic strategies In terms of Hero Honda:-
Hero Honda is having the differentiation strategy in their business as they are different from their competitors in marketing and their brand name and a varied range of the products. Hero Honda provides full satisfaction to their customers as they are best in their quality compared to their competitors. Also they set the same strategy for the new product as well.
Hero Honda sale their bikes through their set franchised outlets or showrooms .They also provide service to their customers and handle them in an efficient manner. Hero Honda create their marketing in very special ways like through TV ads, by billboards or hoarding, and by becoming sponsors of the sports team in India especially cricket team as it is the most favorite sports in India.
Marketing activities of Hero Honda include the television advertisement and newspapers ads. Which is carried throughout the year or can be shown at the time when needed that is regulated by the marketing executive that when they want to rotate the ads. Through the television. Similarly the billboards or the hoarding s are the tools for the marketing. The marketing executive gives this responsibility to his staff and they carry out the activity of marketing throughout the year. There is another main source of the advertising which is called as sponsorship which may be done before the product launch or after launching of their bikes. There is another way of marketing that is in cricket matches, for the man of the match, Hero Honda Ambition can be given to the cricketer for doing its marketing as cricket is the favorite game of Indian audience.
Marketing Objectives of Hero Honda:-
Their main objective is to provide the best quality to their customers and provide full satisfaction to their customers for what they are paying for.
Another objective of Hero Honda is to provide innovative and advanced Engineering products to their customers.
To be always a top most automobile company in India without fear of its competitors.
To market the new product line successfully into customers minds with always the same marketing strategies.
Objective setting in the Market:-
Hero Honda targets its new bike Ambition keeping in consideration with the youngsters or youth of the India. In India, after the completion of the school days, young boys are attracted towards the bikes for going to the college. And they see power of the engine and the style or looks of the bike at the time of choosing the bike, while their parents focus on the fuel efficiency. Therefore for achieving the needs of both parents as well as the youngsters launching such type of bike was the goal of Hero Honda and therefore they are back with the all new Ambition in the market.
Positioning and Branding:-
In this case, we are going to discuss about the positioning and the branding together as Hero Honda is having its own set position and brand in the existing market. Positioning is all about the perception and it differs from person to person. All of the Hero Honda products has set standards and gives satisfaction for the customer's money. For the new product line Hero Honda took the efforts which will not harm the company's image and reputation.
Here we are going to use the Boston consulting group (BCG) map for Hero Honda:-
It is the business portfolio matrix and was developed by BCG,
Boston Consulting Group map for Hero Honda
Karizma is star
Ambition is question mark
Splendor is cash cow
Achiever is Dogs
The map shows the growth rate of business and market share. "Question marks" in the business are with weak market share but with high growth rate. They usually require cash investment so that they can become stars. The business with high growth and strong competitive position. These type of businesses have opportunities for the growth and profit. The cash cows are with a strong competitive position and low growth rate, are usually well positioned in the market and such products are in the position of making their products at low cost that means they are in profit already. The "dogs" are the business with a low growth rate and weak market share. These businesses are usually not profitable and generally should be disposed off.
In this way our new bike Ambition is fixes perfectly in BCG Map as a "Question Mark"
Tactics for Hero Honda:-
It includes the 4 P's of the marketing that are product, price, place and promotion.
Hero Honda has a wide range of successful products under its umbrella which it caters to the existing market. The current product that Hero Honda is currently focusing is on the re launch of the Ambition bike which was a real good bike with a lot of features that could have been focused to target the market but due to some drawback factors like design, fuel efficiency & power had faced a setback but due to the good response to the bike when it was launched in the market which faded even faster with the errors being sighted which Hero Honda has focused to undo the errors in the bike & to upgrade its earlier errors & to re launch the bike focusing mainly on the new aero dynamic design with the higher fuel efficiency & getting it in the middle segment regarding the power factor with 145cc allowing the targeted customers to be wanting to have the bike with not too much power that they cannot handle as well as not too little power to be not getting a feel of riding a bike. The product design is focused to mainly the market segment of middle class & to the young adults segments allowing them to be in the feel they were when they we youngsters but also relaxing out as their age passes.
Place is the second' p' in marketing which means the location. Hero Honda having the large range of the showrooms at each of the town and city in India. Location is the important thing for the successful promotion of the product in the marketing aspect. Their showrooms at the prime location are strong aspect of the Hero Honda. All the showrooms of the Hero Honda are easily accessible to the customers.
Pricing is another major factor that affects each & every product launched in the market to sustain itself against the existing market price of an existing product therefore Hero Honda had to also think about the various factor of the market as well as the actual costs incurred behind a single bike to be brought to the market.
Pricing includes the various pricing structures as premium pricing, penetration pricing, Economy pricing, product bundle pricing, promotional pricing, value pricing etc. In the case with the re launch of the Ambition bike they can't think of pricing it in a premium way, penetration way, the product bundle way or the promotional way of pricing. The best way would be to adopt the targeted section in a specific way by pricing the bike in an economy way. The company's promotions should be done in such a ways that it could be able to create a way for itself in the minds of the targeted customer that they are getting value for their money & also its going to match their expectations & satisfaction.
While pricing the re-launched Ambition bike it should also think about the competitors in the market & also should be competitive as the comeback bike has the features to match the market completion & to be able to sustain itself while keeping the customer as well as the company in profits.
The cost of re launched Ambition 145 cc bike should be set at Rs. 40,000 which is less than the competitors which also has a bike in the same category which is Bajaj Discover which is also a 145cc bike with a price for Rs. 45,000 which gives an upper hand pricewise other than the other aspects of the bike.
Hero Honda spends much more on the promotion of their products. Hero Honda spend their money through advertising on television which is the best way of promotion in country like India where TV sets are everywhere in each and every place. Hero Honda as a recognized brand having their brand ambassadors like film stars and sports mans by paying to them. They also spend on promotion techniques like billboards and hoardings which are easily been visible by the trespassers which are passing by the roads. And the hero Honda Company sponsors the different sports through the competition or it's called as cup in India it's like Honor to win the cup. There are the billboards or hoardings in the cricket stadium. Hero Honda thus don't mind to spend on their promotion tools of their products as they are getting much profits from that as everyone is aware of their new as well as the existing products. Hero Honda also organizes the Hero Honda cup in cricket as a tool for the marketing and promotion of their bikes.
The primary research is done by the own knowledge of the Hero Honda company.
Internet:- All the information gathered from internet is being provided with the suitable reference at the end of the page.
Some of the references are also taken from the Phillip Kotler's book of marketing management.
Business Forecasting and Budgeting:-
Hero Honda is the company that is having its selling outlets through their franchising. Hero Honda's main objective is to make profit by providing great business opportunities. So the sales and budget depends upon its promotion techniques and the advertisements. Hero Honda's last year profit that is financial year 2009-2010 profit zooms to 49% according to the financial times. Hero Honda finance head said that the company is going to focus on marketing or branding events like cricket tournaments or IPL Company endorses. With the continuous growth in recent years-2008- Hero Honda wins NDTV Profit Business Leadership award. In next year 2009, hero Honda became two-wheeler manufacturer of the year by NDTV bike Awards. Along with their current success the company deserves to be the best manufacturer in the two wheeler production and its services as well and be stuck to that success always.
Implementation & controlling:- After this marketing plan is finalized, its now time to act on the plan by properly controlling it. Controlling is done by all the senior staff in the marketing.