MKT2285: Analysis of Factors Influencing Hero MotorCorp Sales

This report presents a marketing research analysis of Hero MotorCorp, focusing on factors influencing sales and consumer behavior. The study examines the external environment (CREST analysis), internal strengths and weaknesses (SWOT analysis), and consumer preferences through surveys. Key findings reveal consumer interest in technologically advanced motorcycles, particularly the Splendor series, and the importance of effective marketing strategies. The report investigates the impact of management decisions and environmental factors on sales, proposes marketing strategy modifications, and provides recommendations for the company, including the adoption of a referral marketing strategy. The research highlights the significance of technological innovation and brand reputation in driving sales, concluding that a comprehensive approach considering consumer preferences and market trends is essential for Hero MotorCorp's success.

Title: Analysis of Factors influencing sales in Hero MotorCorp
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Task: Marketing Research
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Table of Contents
Executive Summary.........................................................................................................................2
1. Introduction..............................................................................................................................3
1.1 Background Information...................................................................................................3
1.4 Research purpose..............................................................................................................3
2. Environmental Scan.................................................................................................................3
2.1 External analysis of the environment (CREST)................................................................3
Competitive environment........................................................................................................3
Regulatory and Political Factors..............................................................................................3
Social-Cultural Factors............................................................................................................4
Technical and technological environment...............................................................................4
Economic environment............................................................................................................4
2.2 Internal analysis of the environment (SWOT analysis)....................................................4
Strengths..................................................................................................................................4
Weaknesses..............................................................................................................................4
Opportunities...........................................................................................................................5
Threats.....................................................................................................................................5
3. Statement of Objectives...........................................................................................................5
3.1 Objectives..........................................................................................................................5
3.2 Hypotheses........................................................................................................................5
Hypothesis 1............................................................................................................................5
Hypothesis 2................................................................................................................................6
Null..........................................................................................................................................6
Alternative...............................................................................................................................6
4. Methodology............................................................................................................................6
4.1 Research Design................................................................................................................6
4.1.1 Type of research........................................................................................................6
4.1.2 Primary research methodology..................................................................................6
5. Limitations...............................................................................................................................7
6. Findings...................................................................................................................................7
Technology..............................................................................................................................7

Satisfaction of consumers by current product.........................................................................8
Conclusion.......................................................................................................................................9
Recommendation...........................................................................................................................10
9. Bibliography..........................................................................................................................11
10. Appendices.........................................................................................................................12
Analysis exported from SurveyMonkey................................................................................12

Executive Summary
In the corporate world, sustainability and profits are the major measures of growth.
However, such parameters are often susceptible to various variables which might or might not be
in the organization’s control. In this paper, the marketing strategy of Hero MotorCorp and how it
has affected their sales is explored as well as the effect of other external and internal factors.
Through use of qualitative and quantitative data obtained from surveys prepared and filled
by relevant respondents (consumers of two wheeler products), the research draws inferences with
which to address the research objectives. The research targets consumers and non-consumers of
the current product by Hero MotorCorp.
From the research, it is realized that consumer prefer two wheelers that are more
technological innovative i.e. 81.82 % of respondents. In addition, up to 74.28% of the
respondents are more likely to replace their current motorcycles for Splendor series products.
Given the stats it is evident that a right marketing tool is crucial to better sales. Moreover, from
the research findings, it is recommended that the company adopt a referral marketing strategy in
order to further popularize the brand given that the current Net promoter score is -70% indicating
there are no correlations between the purchase choices made by the consumers

1. Introduction
1.1 Background Information
Purchasing behaviors of consumer are highly volatile. That is, they are influenced by several
factors given different market segments. Such behaviors may include consumer preference while
the factors comprise the marketing strategies adopted by the company as well other external
factors such as competition, seasonal variations etc. As such, the demand for two wheeler
automobiles in Canada and the world as a whole has been subject to a wide range of variables1,
due to the demand of fuel efficient and eco-friendly means of transport a factor which has largely
influenced the business partnership between Electrovaya and Hero MotorCorp2 as from 2014,
whose major business purpose is to manufacture electric powered two wheelers.
Founded in 1984, Hero MotorCorp Ltd., begun as a joint venture with Hero Cycles and the
Japan’s Honda. It is now the largest two wheeler producer in India and one of the biggest
globally. One of the company’s major product is the Hero Splendor Motorcycle series.
1.2 Research purpose
i. To determine the factors that have led to change of consumer preference
ii. To examine how likely a consumer is to adopt new products.
2. Environmental Scan
2.1 External analysis of the environment (CREST)
Competitive environment
Hero MotoCorp’s top competitors are: Yamaha, Honda, Bajaj Auto Limited, TVS Motors,
Suzuki Motors, Harley Davidson, Royal Enfield, and Ducati Superbike. The company therefore
has to contend with both local and international two wheeler manufacturers.
Regulatory and Political Factors
With the company has plans of extending their market coverage in Africa and South
America and hence likely to be susceptible to more government regulatory rules, both in the
1 George, Jha, & Nagarajan (2012). The Evolution and Structure of the Two-wheeler Industry in India, in the article the authors
discuss the changes and factors that have impacted the industry since its conception in India.
2 Milan (2013), explores the motivation behind the company from its founding to its vision statement

countries of exportation and international trading laws. In addition, the company will be affected
by Geo-political events.
Social-Cultural Factors
Given the market structure of the company which is comprised of family and youths, it has to
adopt various product production means in order to ensure compliance with social and cultural
expectations. As such, diversity in product manufacturing and relevant advertisement to the
correct groups is key for the company to maintain relevancy in the market.
Technical and technological environment
Demand of diverse technological supply in the two wheeler automobiles as it is with four
wheeler, puts on pressure on innovative nature in both quality and technological adoption by the
company3, otherwise it may lose part of its market share due to change in consumer preference
for more technologically advanced and technically easy to use bikes.
Economic environment
Shifts in economic performance as well as
2.2 Internal analysis of the environment (SWOT analysis)
The following are the strengths, weaknesses, opportunities and threats of Hero MotorCorp
company:
Strengths
i. The company has a wide variety of products in its production units
ii. Great distribution chain with more than 3000 service stations and dealers
iii. Intensive and excellent advertising strategies have ensured the strength of the Hero
MotorCorp brand
Weaknesses
i. Too much competition both locally and internationally has led to shrinking of the company’s
market share.
ii. Lack of innovation in a number of its products which leads to production of similar products
with other brands.4
Opportunities
i. With an increase in global population as well as an increased demand of two wheeler
automobiles, the market share of the company is set to increase
3 Yadavalli (2013)
4 Adrianna (2017)- Strength, Weaknesses, Opportunities and Threats in Two Wheeler industry, India

ii. There are unexplored international markets due to minimal exportation by Hero MotorCorp
two wheeler products
iii. Recently the company prospected an introduction of two wheeler automobiles in the
premium section i.e. production of electric motorbikes
Threats
i. Strong competition from other similar established brands both local in the Canadian
motorcycle industry and international.
ii. Efficient and improved public transport means such as subways are set to affect sales
3. Statement of Objectives
3.1 Objectives
The main objectives for this research are therefore:
i. To determine the effect of management decisions on product sales
ii. To determine the effect of environmental factors on choice of the preference of the product
i.e. motorbikes or vehicles.
iii. Propose ways in which the company’s marketing strategies can be modified to ensure more
sales as well as provide decision-making advice to the executive on key issues as expressed
by the consumers given the outcome from the first two objectives.
3.2 Hypotheses
To aid in meeting the research objectives, a set of two objectives are formulated, i.e.:
Hypothesis 1
Null
There is a relationship between management decisions and company sales
Alternative
There is no relationship management decisions and company sales
.
Hypothesis 2
Null
External factors such as environmental factors and place of residence influences the consumers
purchasing power

Alternative
There is no relationship between external factors such as inflation, environment etc. and the
purchasing power of the consumers
4. Methodology
4.1 Research Design
4.1.1 Type of research
IN this project, a descriptive approach which will enable exploration of data patterns in the
collected data hence determination new business insights. New data insights on both the
consumer preferences and other factors that influence purchase of automobile commodities will
enable formulation of a good marketing model after achieving the research’s objective.
4.1.2 Primary research methodology
The target audience for the research comprises of persons who are either using two wheelers
or are interested in. Qualitative questions used to collect data are based on: view of technology,
satisfaction of current product, ease of shifting to other products, preference between the two
feature products. A total of 70 respondents are chosen after two test interviews and a workshop
where persons with interest using stratified and simple sampling methods where the population is
stratified according to their location i.e. urban, rural and sub-urban, hence, the respondents
comprise both current consumers and non-consumers. Due to factors such as time, cost of
research and criterion for respondent choice a data size of 70 entries is chosen as optimal.
Additionally, the response rate of the survey is 100% .The logic behind the research questions is-
income has a high probability of indicating economic status of respondents is employed as well
as that a respondents age is most likely reflective of their opinion on technology5.
5. Limitations
The main limitation during the study is the inadequacy of sample data for data analysis due to the
cost involved in collection of primary data. For instance, the survey tool used only limits up to
100 respondents after which a fee is levied subsequently as well as the cost of accessing the
respondents is considerably high for a larger number.
5 Kanojia (2011)- on the analysis of two wheeler market performance in India, especially on the growth in popularity and survey
of consumers

6. Findings
Considering the descriptive analysis of the data collected from the survey on different
question categories, the following results are obtained:
Technology
The cross tabulated results of technology indicate that 81.82% of all the respondents think that
Hero splendor motorbike series is somewhat innovative while 31% are very positive that it is not
so innovative i.e. of all the 11 respondents in that category
Figure 1:How innovative are Splendor motorbikes products
Moreover, 45.71% respondents react very positively to electric motorcycles while 1.43% have
the least reaction hence indicating that most respondents are technological oriented.
Table 1: Frequency Table of responses to electric two wheelers
Satisfaction of consumers by current product
3.13% of the respondents indicated they were very positive that they very likely to replace their
current product with a splendor product while 45.45% were somewhat likely and somewhat
positive they would get another Splendor product in place of their current motorbike

Figure 2:How likely are you to replace your current motorbike product with the any new Splendor product?
That is, up to 64 of the respondents indicate that they are content with their spending on Splendor
products, making up 81.43% of the total sample respondents.
Table 2:How would you rate the value for money of the Hero MotorCorp Splendor series bikes?
Hence, following the results in table 2, table 3 indicates that 74.28 % of the respondents are
likely to replace their current two wheelers with a Splendor series product.
Table 3:How likely are you to replace your current motorbike product with the any new Splendor product?

However, there are no difference in preference between traditional two wheelers and electric
motors that is both have a score of 42.86%. While those who were not sure are 14.29%
Table 4:Given 3 above, what would be your preference?
In addition, despite a high percentage of respondents indicting that they were likely to get a
splendor product, there were no responses on those likely to recommend the splendor product to
their friends (Table 5). Hence the net promoter score is low to -70%.
Table 5:How likely is it that you would recommend our new product to a friend or colleague?
7. Conclusion
There are a number of factors that determine the market score of a product whether new
or current. Such factors as seen from the descriptive analysis in the previous section may include:
(1). Fear of change whereby existing consumers of a certain form of a product are afraid to adopt
a new product. (2). Technological innovation of the current product- products that are more
technologically innovative are more likely to appeal more to the consumers and hence have a
higher adoptability chance (3). Type of commodity- some commodities sell solely due to the

reputation of the brand that is, there is a general belief that a certain brand has quality goods and
the consumer is more likely to get value for their money.
From the research results and discussion in the previous section, the paper explores the
original research objectives which included exploring relationship between factors affecting
sales, hence proving the original two hypotheses from which it is concluded that:
i. There is a relationship between the management’s decision and sales, for instance the
decision of manufacturing electric bikes in Canada has promoted the Hero MotorCorp brand
hence boasting sales
ii. Several external factors affect sales, i.e. consumer satisfaction, competition etc. Considering
the case of consumer to consumer product promotion which have a negative promotion
score would lead to decline in sales if it was a major product promotion strategy.
8. Recommendation
i. Given that there is an equal demand of both electric and fuel two wheelers, the company
should supply sufficient amounts of both, that is none has a higher demand than the other
hence the profitability will only defer in the cost incurred and prices sold.
ii. The company should introduce a referral bonus so as to increase consumer to consumer
product promotion such that any sale made through referrals incurs a commission that is
paid to the referee. A strategy that will ensure wider advertisement coverage.
iii. Focus on technological innovations as a strategy to stay on edge of the existing
competition on two wheeler manufacturing. For instance, the company may introduce
dual fuel usage units, that is two wheelers that use both electricity and fuel for double
convenience on those who prefer both or either.