A STUDY ON BRAND PREFERENCE ON HERO MOTORS WITH SPECIAL

REFERENCE TO DHARMAPURI

CHAPTER - I

INTRODUCTION ABOUT THE STUDY

Brand Preference is the measure of Brand Loyalty in which a consumer will

choose a particular brand in presence of competing brands, but will accept substitutes

if that brand is not available. Brand Loyalty refers to the extent of the faithfulness of

consumers to a particular brand, expressed through their repeat purchases,

irrespective of the marketing pressure generated by the competing brands.

In every product category, consumers have more choices, more information

and higher expectations than ever before. To move consumers from trial to

preference, brands need to deliver on their value proposition, as well as dislodge

someone else from the consumer's existing preference set.

Brand and branding defined

It is widely acknowledged amongst both practitioners and academics that

branding has become a tool of strategic importance. Various definitions of branding

appear in literature.

The American Marketing Association (1994) defines a brand as a name,

term, sign, symbol or design, or a combination of them intended to encourage

prospective customers to differentiate a producers product (s) from those of

competitors.
 In its totality, a brand can be described as a trademark that communicates a

promise (Phillips, 1988). This promise involves a set of symbolic and functional

attributes that the market place associates with the brand. Symbolic attributes are

those that fulfill internally generated needs for self-enhancement, role position, group

membership or ego identification (Park et al., 1996) whereas functional brand

attributes solve an externally generated consumption related problem.

Brand Awareness

Brand awareness refers to customers' ability to recall and recognize the brand

under different conditions and link to the brand name, logo, and jingles and so on to

certain associations in memory.

Brand Preference is the measure of Brand Loyalty in which a consumer will

choose a particular brand in presence of competing brands, but will accept substitutes

if that brand is not available. Brand Loyalty refers to the extent of the faithfulness of

consumers to a particular brand, expressed through their repeat purchases,

irrespective of the marketing pressure generated by the competing brands.

Brand Preference

Brand Preference is the measure of Brand Loyalty in which a consumer will

choose a particular brand in presence of competing brands, but will accept substitutes

if that brand is not available. Brand Loyalty refers to the extent of the faithfulness of

consumers to a particular brand, expressed through their repeat purchases,

irrespective of the marketing pressure generated by the competing brands.

Consumer Buying Behavior

Consumer behavior as a body of knowledge emphasizes on the study of both

physical activities and decision-making processes that occur in the process of search,

evaluation, acquiring, use and disposal of products. Consumer behavior encompasses

vast areas of human activities that have direct interface with technology.

Culture

Culture encompasses the values, arts, customs and skills of people in a given

society. Cultural trends reflect the social values of the population and, as such, have

important implications for market segmentation, product development, advertising

and other aspects of marketing strategy. Social class categories can be identified by

income, education level and occupation. The relationship between social class and

purchasing patterns, nevertheless, provides an important link for marketers in strategy

planning.

Buying Decisions

Consumer buying behavior is influenced by the buyers decision making

process. The buying situation can vary from one of routine-response behaviors to

limited problem solving to extensive problem solving. Buying is not a single act but a

multi-component decision on the need class, generic class, product class, product

form, brand, vendor, quantity, timing and method of payment. The buyer goes

through a process consisting of need arousal, information search, evaluation behavior,

purchase decision and post-purchase feelings. At each decision stage, characteristics

of the buyer, product, seller and selling situation interact to influence the buying

outcome.
 NEED OF THE STUDY

In todays competitive world, the most successful companies are those, which stay

close to the customers. It is important to know your customers, their needs and what

they expect from companies. The need of this project arises from the decision of Hero

motors. Ltd to undertake and exercise to interact with its customers, in commitment

to its policy of understanding and satisfying the requirements of its in customers most

effective way. The company conducts these exercises on regular basis. Hero motors is

one in the leading company that customers approach and satisfying their needs.

STATEMENT OF PROBLEM

As there are a large number of brand preference different brand of Hero

motors, the study was conducted in Dharmapuri to know consumer behavior towards

different types of hero motors. So that it would help to differentiate Hero motors to

identify the brand preference on consumer behaviour.

OBJECTIVES OF THE STUDY

1. To study the brand preference and buying behaviour of Hero motors.

2. To study the various factor influencing the selection of particular brand of Hero.

3. To study and identified the brand loyalty by the customers.

4. To study the customer view on Hero motors and the impact of the

communication medium.

5. To offer valuable suggestions to improve the services of Hero motors.

RESEARCH METHODOLOGY

Research methodology is a purely and simply the framework or a plans for

the study that guides the collection and analysis of data. Research is the scientific

way to solve the problems and its increasingly used to improve market potential.

This involves exploring the possible methods, one by one, and arriving at the best

solution, considering the resources at the disposal of research.

RESEARCH DESIGN

A research design is the specification of methods and procedure for

acquiring the information needed. It is the over all operation patterns or

framework of the project that stipulates what information is to be collected from

which source by what procedure it is also the blue print of the research process.

DESCRIPTIVE RESEARCH

Descriptive research design was used in this study. It includes survey and

fact finding enquiries of different kinds. Descriptive research, also known as

statistical research, describes data and characteristics about the population or

phenomenon being studied. Descriptive research answers the questions who,

what, where, when, "why" and how...

SOURCE OF DATA

A well set of questions were prepared for the interview schedule. The

interview schedule was the main source of data, i.e. primary data & secondary

data. A simple random sampling conducted based on the information received; the

schedules were administrated to the respondent.

SAMPLING METHOD

The researcher has adopted Probability sampling technique in this survey.

The sampling method is simple random sampling. Simple random sampling refers

to the collection of information randomly from members of the large population

to prove the research.

SAMPLE SIZE DETERMINATION

Sample size restricted as the set of the sample is one organization.

This sample Size was determined as 100 as it is selected randomly in the

organization.

TOOLS USED FOR STUDY

Collected data were tabulated for this study. Statistical tool used for

analysis is percentage method, Chi Square and Anova were used to clear the

survey.

PERCENTAGE ANALYSIS

Percentage Analysis is a simple method that converts the whole data to an

answer against hundred. The Formula used is as follows:

No of respondents * 100 / total no of Respondents

CHI-SQUARE

Chi-Square Test is a useful measure of comparing experimentally

obtained results with those expected theoretically and based on hypothesis that

provides a set of theoretical frequencies with which observed frequencies are

compared. The measure of chi-square enable us to find out the degree of

discrepancy between observed discrepancy so obtained between observed

frequencies and theoretical frequencies is due to error of sampling or due to

change.

CHI-Square = (Oi-Ei) / Ei

SCOPE OF THE STUDY

The study on the components will help the company for framing

effective techniques. It will also help to take corrective action if there

is any deviation between the planned and actual performance.

The study will help the company to achieve profits that have been

planned accordingly. It will also help facilitate commercial gain and

briskly wealth to the company.

By keeping many questions multiple choice, the scope of the study

was kept as wide as possible. The study also revealed new innovative

idea generation the existing customers.

The scope of this study had kept wide, as the company gets

information on wide, range issues.

LIMITATIONS OF THE STUDY

1. The duration of the project was one of the primary constraints for the

project.

1. This study is confined only among the Bajaj Two wheelers customers.

2. It was an academic effort and limited to cost, time and geographical area.

3. Numbers of respondents were restricted due to the time factor.

 CHAPTER - II

REVIEW OF LITERATURE

Dr. [Link], Dr. [Link] Kumar and Dr. G. Narasimha Murthy

(2015), in their article titled, Susceptibility to reference group influence

among rural consumers, discussed: The diversity in the reference group

influence on consumer purchase in general and with reference to rural consumers

was examined. The literature on reference groups influence on rural consumer

behavior reveals the role and importance of opinion leaders and the susceptibility

of consumers on reference groups for any purchase. Many findings in rural

marketing domain concur with the literature on the reference group influence

construct done elsewhere. Consumers who are susceptible to interpersonal

influence will try to satisfy reference groups' expectation by complying with

groups' norms. Reference groups in all had been found to have profound influence

on consumers' decision making. This influence is different for several sub cultures

and situations. Consumers may accept a reference group influence because of its

role in providing informational, utilitarian and value expressive influences.

Dr. Rajagopal (2014), in his article titled, Conational Drivers

Influencing Brand Preference among Consumers discussed: Consumers

recognize brands by building favorable attitude towards them and through the

purchase decision process. Brand Preference is understood as a measure of brand

loyalty in which a consumer exercises his decision to choose a particular brand in

presence of competing brands. Brand attributes including emotions, attitudes,

personality, image, reputation and trust which influence consumer perceptions and
temporal association with brands are critically examined in the study. The study

revealed that higher brand relevance and trust build strong the association of

consumers with brand in long-run.

 Purohit H.C (2013), in his article titled, Customer Relationship

Management and Brand Loyalty through Word Of Mouth (WOM)

Communication discussed: Customer loyalty is not a choice any longer with

business; it is the only way of building a sustainable competitive advantage.

Building loyalty with key customers had become a core marketing objective

shared by key players in all industries catering to business customers.

Communication with customer partners is a necessary process of relationship

marketing. It helps in relationship development, foresters trust, and provides the

information and knowledge needed to undertake cooperative and collaborative

activities of relationship marketing. CRM refers to a conceptually broad

phenomenon of business activity; if the phenomenon of cooperation and

collaboration with customers become the dominant paradigm of marketing

practice the satisfaction level of the consumers goes high up to the level of

delight. The building of customer relationship was a fundamental business of

every enterprise and it requires a holistic strategy and process to make it

successful. The proposed study will focus on the issues related with customer

satisfaction, repeat purchase behavior, building consumer relationship

management through customer loyalty and suggest the measures to minimize the

challenges of a highly competitive global market.

Denford Chimboza and Edward Mutandwa (2012) in their article

titled,

Measuring the determinants of brand preference in a dairy product

market discussed: Branding is increasingly being used as a strategy for

managing markets in developed countries while developing countries still lag

behind. The objective of the study was to assess the level of brand awareness and

factors underlying brand preference of dairy brands in Chitungwiza and Harare

urban markets in Zimbabwe. A total of 90 respondents who included individual

and institutional consumers were selected using judgmental and simple random
sampling respectively. Primary data was collected using structured interview

schedules developed for each category of consumers. Consumer product

awareness indices, cluster analysis and factor analysis were the main tools used in

the analysis. The findings of the study showed that 52% of the respondent

consumers were aware of ARDA dairy brands despite having come across few

ARDA DDP advertisements. Four factors were identified as key determinants of

dairy product choice namely promotion, price and availability of product,

attractive packaging and product quality.

Niedrich Ronald [Link] Swain Scott D (2011), in their article titled,

The Influence of Pioneer Status and Experience Order on Consumer Brand

Preference: A Mediated-Effects Model found: Within the behavioral literature,

two basic explanations of the pioneering advantage had been offered. Early work

focused on order-based explanations. More recently, schema-based explanations

had also been suggested. The authors proposed a mediated-effects model of the

pioneering advantage and test the model in two separate longitudinal studies. Both

experiments support the proposed model.

The authors found that experience order and pioneer-status have additive

effects on Brand Preference such that perceptions of first-in-market and first-

experienced brands are more favorable, suggesting that both explanations are

operative. The authors also provide evidence that the effects of pioneer status on

Brand Preference are mediated by attitude toward the brand and company

credibility, while the effects of experience order on Brand Preference are

mediated by attitude toward the brand and attribute recall. These data support the
notion that the effect of pioneer status on Brand Preference was the result of both

brand-level and company-level associations.

 OVERVIEW OF THE STUDY

Indian Two wheeler industries

India is the second largest producer and manufacturer of two-wheelers in the world. Indian

two-wheeler industry has got spectacular growth in the last few years. Indian two-wheeler

industry had a small beginning in the early 50's. The Automobile Products of India (API) started

manufacturing scooters in the country.

Bikes are a major segment of Indian two wheeler industry, the other two being scooters and

mopeds. Indian companies are among the largest two-wheeler manufacturers in the world. Hero

Honda and Bajaj Auto are two of the Indian companies that top the list of world companies

manufacturing two-wheelers.

The two-wheeler market was opened to foreign companies in the mid 1980s. The openness

of Indian market to foreign companies lead to the arrival of new models of two-wheelers into

India. Easy availability of loans from the banks, relatively low rate of interest and the discount of

prices offered by the dealers and manufacturers lead to the increasing demand for two-wheeler

vehicles in India. This lead to the strong growth of Indian automobile industry.

Kinetic Honda was introduced in the Indian market during the mid 80s. The main feature

of Kinetic Honda is its ease of use. This helped the youngsters and the women to buy scooters.

Key players in the Two-wheeler Industry:

After facing its worst recession during the early 1990s, the two-wheeler industry bounced

back with a 25% increase in volume sales in February 1995. The scooters are considered as

family vehicles. There are many two-wheeler manufacturers in India. Major players in the 2-
wheeler industry are Hero Honda Motors Ltd (HHML), Bajaj Auto Ltd (Bajaj Auto) and TVS

Motor Company Ltd (TVS).

The other key players in the two-wheeler industry are Kinetic Motor Company Ltd

(KMCL), Kinetic Engineering Ltd (KEL), LML Ltd (LML), Yamaha Motors India Ltd

(Yamaha), Majestic Auto Ltd (Majestic Auto), Royal Enfield Ltd (REL) and Honda Motorcycle

& Scooter India (P) Ltd (HMSI).

Types of Two-wheelers in India:

There are mainly three types of two-wheelers available in India. They are Motorcycles,

Scooters and Scooter/Mopeds.

Scooters in India:

The scooter and the scooterette share in the Indian two wheeler market is 13.4%. The

main models available in India are Bajaj Chetak, Honda Eterno, Kinetic Blaze, LML NV SPL

and LML Select II.

HISTORY OF COMPANY

Type : Public company

Founded : January 19, 1984

Headquarters : Haryana, Indian

Key People : Brijmohan lall munjal

(Chairman and managing Director)

 Industry : Automotive

Produce : Motorcycle, Scooters

Hero Motorcycles limited is an Indian manufacturer of motorcycles and scooters. Hero

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

India has the largest number of two wheelers in the world with 41.6 million vehicles. India
has a mix of 30 percent automobiles and 70 percent two wheeler in the country. India was the
second largest two wheeler manufacturer in the world starting in the1950s with the birth of
Automobile products of India (API) that manufactured scooters. API manufactured the
lambrettas but, another company, Baja Auto Ltd. Surpassed API and remained through the turn
of the century from its association with piaggio of Italy (manufactured of vespa)

The license raj that existed between the 1940s and 1980s in India. Did not allow foreign
companies to enter the market and imports were tightly controlled. Customers in India were
forced to wait 12 years to buy a scooter from Bajaj. The CEO of Bajaj commented that he did not
need a marketing department, only a dispatch department.

In the mid-1980s, the Indian government regulation changed and permitted foreign
companies to enter the Indian market through minority joint ventures. The two wheeler market
changed with four indo-Japanese joint ventures: Hero Honda, TVS Suzuki, Bajaj Kawasaki and
Kinetic Honda. The entry of these foreign companies changed the Indian market dynamics from
the supply demand side. With a larger selection of two-wheelers on the Indian market, consumer
started to gain influence over the products they bought and raised higher customer expectations.
The industry produced more models, styling options, price, and different fuel efficiencies. The
foreign companies new technologies helped make the products more reliable and with better
quality. Indian companies had to change to keep up with their global. During the 80s, Hero
Honda became the first company in India to prove that it was possible to drive a vehicle without
polluting the roads. The company introduced new generation motorcycles that set industry
benchmarks for fuel thrift and low emission. A legendary 'Fill it - Shut it - Forget it' campaign
captured the imagination of commuters across India, and Hero Honda sold millions of bikes
purely on the commitment of increased mileage.

Hero Honda has consistently grown at double digits since inception; and today, every
second motorcycle sold in the country is a Hero Honda. Every 30 seconds, someone in India
buys Hero Honda's top -selling motorcycle - Splendor. This festive season, the company sold half
a million two wheelers in a single month-a feat unparalleled in global automotive history.

Hero Honda values its relationship with customers. Its unique CRM initiative - Hero Honda
Passport Program, one of the largest programs of this kind in the world, has over 3 million
members on its roster.

The program has not only helped Hero Honda understand its customers and deliver value at
different price points, but has also created a loyal community of brand ambassadors.

Performance vis--vis Industry

The Indian two wheeler industries has seen a paradigm shift from being a regime of
regulation and tight control in the 1980s to a more liberalized and a competitive present day era.
After missing out on the initial boom in two wheeler segment during the period of 1993-1996,
Hero Honda has emerged as a world leader.

The gap between motorcycles sold by Hero Honda and its closest rival is approximately 1 m
units (23% of industry size). One of the reasons for the tremendous performance of Hero Honda
is the significant increase of share of motorcycles in the two-wheeler segment, from 42% in
FY99 to 77% in FY04. No doubt, that the shift in preference of Indian populace from scooters
and mopeds towards motorcycles has facilitated the growth of Hero Honda. However its
performance vis--vis industry indicates that the performance of Hero Honda was better than the
industry peers, barring two years. In the seven-year period ending FY04, it has achieved a CAGR
of 30% in two-wheeler volumes against 11% of the industry.

Excellent Collaborator Relationship:

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