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A STUDY ON TWO WHEELER SALES, SERVICES AND SPARE PARTS TURNOVER OF VENKATESWARA MOTORS, AN

AUTHORIZED HERO HONDA DEALER, HYDERABAD

Submitted in

Partial fulfillment of the requirement for the award of

POST GRADUATE DIPLOMA IN MANAGEMENT

Submitted By

K.SUBHASH

Roll No. -10138

Batch- XVIII

PGDM

VIGNANA JYOTHI INSTITUTE OF MANAGEMENT

(APPROVED BY AICTE, MINISTRY OF HRD, GOVT.OF INDIA)

BACHUPALLY, HYDERABAD

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ACKNOWLEDGEMENT

I avail this opportunity to express my deep sense of gratitude to all the people who have helped

me to carry out and complete this project in partial fulfillment of my PGDM degree curriculum.

I am deeply indebted to Mr. Kamal Ghosh Ray, Director, Vignana Jyothi Institute of

Management, Bachupally, for the valuable support and gave me an opportunity to do my project

work.

I wish to express my hearty thanks to all faculty members of Vignana Jyothi Institute of

Management, for the help they provided to carry out this project.

Date: 23-03-2011 K.SUBHASH

Place: Hyderabad Roll no:- 10138

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TABLE OF CONTENTS

LIST OF TABLES & DIAGRAMS........................................................................................................5

ABSTRACT.............................................................................................................................................6

INTRODUCTION...................................................................................................................................7

OBJECTIVE OF THE STUDY...............................................................................................................7

SCOPE OF THE STUDY........................................................................................................................8

LIMITATIONS OF THIS STUDY.........................................................................................................8

METHODOLOGY..................................................................................................................................9

1. RESEARCH DESIGN.................................................................................................................9

2. DATA COLLECTION METHODS:...........................................................................................9

HERO HONDA- THE COMPANY......................................................................................................10

EMPIRICAL STUDY ON HERO HONDA........................................................................................11.

HERO HONDA’S CORPORATE PROFILE........................................................................................13

COMPARISON OF TWO WHEELER SALE IN INDIA:...............................................................15

HERO HONDA 2009-10 PERFORMANCE HIGHLIGHTS...............................................................16

AT VENKATESWARA MOTORS, HYDERABAD(Primary data source)........................................18

MODELS AND VARIANTS SOLD AT VENKATESWARA MOTORS..................................19

SEGMENTS IN TWO WHEELERS............................................................................................20.

POTENTIAL MARKET OF 2-WHEELERS AT HYDERABAD..................................................21.

Sales of Motor cycles.................................................................................................................22.

Sales of scooters.........................................................................................................................25.

Requirement vs dispatch...........................................................................................................27.

Model wise Retails at Venkateswara motors.........................................................................29.

CUSTOMER SERVICES AT VENKATESWARA MOTORS...........................................................30

PROMOTIONAL ACTIVITIES AT VENKATESWARA MOTORS.................................................32

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ANALYSIS ON THE SERVICES OFFERED.....................................................................................34

Free Service Details........................................................................................................................34

SERVICES OFFERED BY ARDs........................................................................................................35

TURN OVER OF SPARE PARTS........................................................................................................36

FINDINGS AND SUGGESTIONS.......................................................................................................38

CONCLUSION......................................................................................................................................41

BIBLIOGRAPHY & REFERENCES...................................................................................................42

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LIST OF TABLES & DIAGRAMS

Name of Table or Diagram Page.no

Pie chart no – 1(Sales two wheelers in the year 2008)……….................................................15

Pie chart no – 2(Sales of two wheelers in the year 2009)…....................................................15

Bar chart no – 1(Comparison of two wheeler sales in India)...................................................17

Table no -1(Sales of Motorcycles)...........................................................................................22

Table no-2 (Sales of Scooters).................................................................................................25

Table no-3(Requirement Vs Sales)..........................................................................................27

Table no- 4 (Model wise sales)................................................................................................29

Table no – 5 (Customer vehicles being serviced)....................................................................34

Table no – 6(Customer vehicles being serviced at ARDs)…..................................................35

Table no- 7(Turnover from spare parts at Venkateswara motors)….........................................36

Table no- 8(Turnover of sales of spare parts from ARDs)......................................................37

Bar chart No-2(Sales of Motor Cycles)……………………………………………………….39

Bar chart No-3(Sales of Scooters)…………………………………………………………….39

Bar chart No-4(Requirements Vs Dispatches)………………………………………………..40

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ABSTRACT

Venkateswara motors, An Authorized Dealer in Hero Honda has been in this business for the

past 8 years in Hyderabad city. This project throws light on analysis of sales process, number of

customers being serviced at the automated workshop of Venkateswara motors and the Revenue

generated through the sales of Spare parts which is one of the major functionality of their

business. In addition to this above study this paper shows detailed analysis of the entire activities

those are performed as part of their business include promotional activities, Retails of different

vehicles model wise, their social responsibilities towards public, their contribution to the

potential market geographically, and their customer relationship programs, their value added

services to the customer, their targets and competitive advantages. Some of these activities are

mentioned in this paper with exact numerical data (either sold or dispatched) happened over a

period of six months taken into study i.e. from April 2010 to September 2010. This paper

analyzes the entire numerical data provided by Venkateswara motors is processed using different

statistical tools such as Trend line in time series analysis, Calculation of standard deviation

happened in sales of vehicles and Estimation of Regression equation to forecast the demand and

sales in the future.

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INTRODUCTION

Hero Honda Motors Limited, based in Delhi, India is a joint venture between the Hero Group

of India and Honda of Japan It has been referred to as the world's biggest manufacturer of 2-

wheeled motorized vehicles since 2001, when it produced 1.3 million motorbikes in a single

year. During the fiscal year 2008-09, the company has sold 3.28 million bikes and the net profit

of the company stood at Rs. 1281.7 crore, up 32% from the previous fiscal year. Hero Honda has

been the largest two wheeler company in the world for eight consecutive years. The company

had a market share of 41.35% in the year 2008-2009 and over a 25 year span it has crossed the

15 million unit milestone. Hero Honda sells more two wheelers than the second, third and fourth

placed two-wheeler companies put together.

Objective of this study

To understand the sales process of two wheelers by Venkateswara motors a Hero Honda

dealer in Hyderabad and in certain period.

To Know how customers are being serviced at Venkateswara motors

To understand how do they cope up with the number of situations (Eg:- competition from

other players in the market) occurring through the two-wheeler automobile business.

To analyze the turnovers that is generated through selling of spare parts and also through

paid services offered by them.

SCOPE OF THIS STUDY

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Scope of this study is limited to a particular data such as sales, Value added services and

customer satisfaction

Data for this study has been collected from secondary sources such as company website

and some other official websites.

For the better understanding of this study through statistical analysis the primary data

given by a Hero Honda showroom Venkateswara motors, Hyderabad has been used.

LIMITATIONS OF THIS STUDY

This report doesn’t convey about the entire 2-wheeler automobile industry over the

country, but limited to the primary data provided by an Authorized Hero Honda dealer,

Venkateswara motors, Hyderabad.

The data collected is analyzed mostly analytically. Qualitative analysis is restricted due to

information search constraints. Statistical concepts such as trend line, Dispersion tools

are used to analyze the obtained observations

Data may be biased

METHODOLOGY

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RESEARCH DESIGN

The present study is an exclusive study on business issues concerned with Two-wheeler

automobile industry. In the present study descriptive research method is used. Descriptive

research is also called Statistical Research. The main goal of this type of research is to describe

the data and characteristics about what is being studied. The idea behind this type of research is

to study comparisons, averages, increase, decrease and other statistical calculations. Although

this research is highly accurate, it does not gather the causes behind a situation. Descriptive

research is used to obtain information concerning the current status of the phenomena to describe

"what exists" with respect to variables or conditions in a situation.

DATA COLLECTION METHODS

Primary Data: Data obtained by direct interviews with officials of the company

showroom

Secondary Data: Online Database, Hero Honda’s website and some other official two

wheeler websites and some business websites

HERO HONDA – THE COMPANY

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The company is committed to provide the customer with excellence. A rich background of

producing high value products at reasonable prices led the world's largest manufacturer of

motorcycles to collaborate with the world's largest bicycle manufacturer. During 80s, Hero

Honda became the first company in India to prove that it was possible to drive a vehicle without

polluting the roads. Their company possesses three manufacturing units based at Dharuhera,

Gurgaon and Haridwar are capable to produce 4.4 million units per year. They introduced new

generation motorcycles that set industry benchmarks for fuel thrift and low emission.

The unique features like fuel conservation, safety riding courses and mobile workshops helped

the group reach in the interiors of the country. Well-entrenched in the domestic market, Hero

Honda Motors Ltd. turned its attention overseas, and exports have been steadily on the rise.

Over the years, the Company has received its share of accolades, including the National

Productivity Council's Award ( 1990-91), and the Economic Times - Harvard Business School

Association of India Award, against 200 contenders. The gross sales of Hero Honda by March

end'2008 was 33,371,43 Crores

EMPIRICAL STUDY ON HERO HONDA

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Hero Honda Bikes in India are in great demand because of the high level of quality and superior

technical skills. Hero Honda has carved a niche in the competitive Indian market for churning

out motorcycles with high fuel efficiency and low maintenance.

Hero Honda Bikes are reputed for low maintenance and high fuel efficiency. Today, Hero Honda

is taken to be the world's largest two-wheeler manufacturer based in India. Hero Honda markets

two wheelers for the middle-class & upper class families too. Hero Honda bikes price range are

attractive in comparison of other bike manufacturing company. Hero Honda bikes have been on

Indian roads since 1984 when Hero Cycles Ltd. tied up with Hero Group of India and Honda of

Japan to start a joint venture.

Hero Honda's commitment is to customer - quality & excellence. Hero Honda's key strategy has

been driven by innovation in every sphere of activity. Hero Honda Bikes are manufactured

across three globally benchmarked manufacturing facilities. Hero Honda's product range

includes variety of motorcycles that have set the industry standards across all the market

segments.

Driven by the trust of over 5 million customers, the product range of Hero Honda commands a

market share of approximately 50%. Starting with a sale figure of only 43,000 units in 1985-86,

the company has reached a high of 26,21,400 units in 2004-05. According to Pawan Munjal,

Managing Director and CEO of Hero Honda, the gap with its nearest rival, Bajaj Auto, is over a

million units in 2004-05.

On a compounded annual growth rate (CAGR) basis, the sales volume of the company have been

growing at 33% for the last 6 years (as stated in 2003-04) and the net sales value at 36% over the

same period. Parallel to it, the profit of the company has been growing at 50% CAGR.

The company enjoys debt free status since March 01 and had zero level of contingent liabilities

as of 31st March 03. The entire long term debt of Rs. 116 Cr. as on 31st March 03 represents an

interest free loan from the Government of Haryana on account of sales tax deferment, and has no

costs attached to it.

Bikes from Hero Honda:

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Hero Honda CD-dawn

Hero Honda CD-Deluxe

Hero Honda Splendor Plus

Hero Honda Splendor NXG

Hero Honda Passion Plus

Hero Honda Super Splendor

Hero Honda Glamour

Hero Honda Achiever

Hero Honda CBZ Xtreme

Hero Honda Hunk

Hero Honda Karizma

Hero Honda Pleasure

Today, every second motorcycle sold in the country is a Hero Honda bike. Every 30

seconds, someone in India buys Hero Honda's top-selling motorcycle – Splendor.

HERO HONDA’S CORPORATE PROFILE

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Vision

The Hero Honda story began with a simple vision – the vision of a mobile and an empowered

India, powered by Hero Honda. This vision was driven by Hero Honda’s commitment to

customer, quality and excellence, and while doing so, maintaining the highest standards of ethics

and societal responsibilities. Hero Honda believes that the fastest way to turn that dream into a

reality is by remaining focused on that vision.

Strategy

Hero Honda’s key strategy has been driven by innovation in every sphere of activity – building a

robust product portfolio across categories, exploring new markets, aggressively expanding the

network and continuing to invest in brand building activities.

Manufacturing

Hero Honda bikes are manufactured across three globally benchmarked manufacturing facilities.

Two of these are based at Gurgaon and Dharuhera which are located in the state of Haryana in

northern India. The third and the latest manufacturing plant is based at Haridwar, in the hill state

of Uttrakhand.

Technology

In the 1980’s Hero Honda pioneered the introduction of fuel-efficient, environment friendly

four-stroke motorcycles in the country. Today, Hero Honda continues to be technology pioneer.

It became the first company to launch the Fuel Injection (FI) technology in Indian motorcycles,

with the launch of the Glamour FI .

Products

Hero Honda's product range includes variety of motorcycles that have set the industry standards

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across all the market segments. The company also started manufacturing scooters. Hero Honda

offers large no. of products and caters to wide variety of requirements across all the segments.

Distribution

The company's growth in the two wheeler market in India is the result of an intrinsic ability to

increase reach in new geographies and growth markets. Hero Honda's extensive sales and service

network now spans close to 4500 customer touch points. These comprise a mix of authorized

dealerships, Service & Spare Parts outlets, and dealer-appointed outlets across the country.

Brand

The company has been continuously investing in brand building utilizing not only the new

product launch and new campaign launch opportunities but also through innovative marketing

initiatives revolving around cricket, entertainment and ground- level activation.

Activities

Hero Honda has been actively promoting various sports such as hockey, cricket and golf. Hero

Honda was the title sponsor of the various sporting events played in India.

COMPARISON OF HERO HONDA’S SALES WITH THE SALES OF TWO-WHEELERS IN OTHER BRANDS

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69%

23%

5% 3%

Sales in 2009

Hero HondaTVS motorsIndia yamahaSuzuki

74%

20%3% 3%

Sales in 2010

Hero HondaTVS motorsIndia YamahaSuzuki

HERO HONDA’S 2009-10 PERFORMANCE HIGHLIGHTS

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Continues with its industry leadership as the world’s largest manufacturer of two-

wheelers as a single company for the ninth consecutive year

Crosses the landmark figure of 4 million cumulative sales in a single year – posts sales of

more than a million units for every quarter in FY’10

Hero Honda 'Touch Points' cross 4200 in number as part of aggressive network expansion

initiative

Launches 9 models in the fiscal including refreshes, variants and new models

Launches all new sporty and stylish Karizma ZMR

Celebrates crossing 11 million sales of the hugely popular Splendor

Keeps strengthening its presence in the scooter market, now selling over 20,000 units of

Pleasure per month

Builds on its strong association with multiple sports – from cricket and golf to hockey,

football and Commonwealth Games

Continues to tap rural & upcountry markets through dedicated ‘Rural Vertical’ with the

visionary "Har Gaaon…Har Aangan" platform

Receives a slew of prestigious awards through the financial year, including the

“Company of the Year” 2009 by Economic Times

Total unit sales of 46,00,130 two-wheelers, growth of 23.6 per cent.

Total net operating income of Rs. 15860.51 Crores, growth of  28.1 per cent.

Net profit after tax at Rs. 2231.83 Crores, growth of 74.1 per cent.

Final dividend of 1500% or Rs. 30 per share on face value of each share of Rs. 2.

EBIDTA margin for the year 17.4  per cent.

EPS of Rs. 111.77, growth of 74.1  per cent.

INDIAN MOTORCYCLES SALES FIGURES FOR APRIL 2009 VS 2010

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PRIMARY DATA SOURCE : VENKATESWARA MOTORS (AN AUTHORIZED HERO HONDA DEALER), HYDERABAD

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A study is done on sales, turnover from spare parts and services offered to the customers of Hero

Honda vehicles from Venkateswara motors (An Authorized Hero Honda Dealer), Hyderabad for

six months i.e. from April 2010 to September 2010

Venkateswara motors has been established in Hyderabad for 8 years winning the respect and

trust of all Hero Honda customers . Started as a Authorized Representative Dealer in Hyderabad

and it has got Authorized Dealership in 12th June 2006 and from then it is acting as a central field

to four other ARDs (Authorized Representative dealers) in the surrounding areas . Venkateswara

motors has sales up to 50% of the potential market in surrounding areas covering 35kms radius

all round the Hyderabad City and targeting all kinds of customers.

The four Authorized Representative Dealers under this Venkateswara motors are as follows.

Four ARDs (Authorised representative dealers) under this

Sri Rama Narayana Automobiles

Bhagya Lakshmi Motors

Sri Lakshmi Motors

Vallabha Reddy Motors

Models and Variants of two-wheelers sold by Venkateswara motors

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In a nutshell Venkateswara motors showroom has 17 models of Hero Honda Two wheelers

including Motor cycles and Scooters and they maintain all over 40 variants among all two

wheeler hero Honda automobiles with a wide number of 258 SKUs (Stock Keeping Units)

Model name Variants Variant details Point to note

Colors SKU

Cd dawn 1 Drum brake,Kick start, spoke wheel

5 5

Cd deluxe 4 Drum brake, kick/self start, spoke/cast wheel

5 20

Splendor nxg 4 Drum brake, kick/self start, spoke/cast wheel

6 24

Splendor bs2 2 Drum brake, kick start, spoke/cast wheel

BS2 MODEL

7 14

Splendor bs3 2 Drum brake, kick start, spoke/cast wheel

BS3 MODEL

8 16

Splendor pro 4 Drum brake, kick/self start, spoke/cast wheel

8 32

Splendor plus 2 Drum brake, kick/self start, spoke/cast wheel

6 12

Passion plus 5 Drum brake, kick start, spoke/cast wheel

7 35

Passion pro mf

4 Drum brake, kick/self start, spoke/cast wheel, MF battery

Pro with MF battery

7 28

Super splendor

2 Drum brake,self start, spoke/cast wheel

Self start 7 14

Glamour 2 Drum brake, self start, spoke/cast wheel

Self start 6 12

Glamour fi 2 Drum/Disc brake, kick/self start,cast wheel

Fuel Injection

3 6

Cbz extreme 1 Disc Front, kick/self start,cast wheel

Self Start 5 5

Hunk 2 Disc front/ front & rear, kick/self start, cast wheel

Self Start 7 14

Pleasure 1 Drum brake, self start,cast wheel Self Start 10 10Karizma R 1 Disc:front brake, kick/self start,

spoke/cast wheel5 5

ZMR 1 Disk brake,self start, spoke/cast wheel

Fuel Injection

6 6

SEGMENTS IN TWO WHEELERS

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Venkateswara motors has four divisions of all models shown above from Hero Honda Two

wheelers (including 17 models and 40 variants). Those divisons are called as Segments. Those

Four segments are

Economy or entry level vehicles:

The Two wheelers from Hero Honda which are less in price and most economical vehicles come

under this segment. Generally Motor Bikes with or less than 100cc are considered as Economy

or Entry level vehicle

Eg: CD dawn, CD deluxe

Deluxe segment:

Bikes Next to the Entry level are called Deluxe Segment 2-wheelers. Price of Motor Bikes under

Deluxe segment are slightly higher than the price of bikes under economy segment. Generally

bikes with 100cc-125cc come under this segment.

Eg:- Splendor plus, Splendor pro(yet to be released), Passion pro, Super splendor, Glamour,

Glamour FI

Premium segment:

Prices of Motor Bikes under Premium segment are much higher than that of Deluxe segment.

And bikes with 150cc – 225cc come under Premium segment.

Eg:- CBZ Xtreme, Hunk, KarizmaR, ZMR

Super premium

Bikes with 600cc and above it come under super premium bikes. Motor Bikes under this segment

are highly expensive.

Venkateswara motors showroom recorded higher sales of motor bikes under deluxe segment and

shown great performance for the last 6months and less recorded are premium segment due to

Low supply issues from other dealers. Even though there is a great demand for Premium segment

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vehicles geographically, they failed to record high sales due to the less count in number of 2

wheelers dispatched from higher sources like Stock Keeping Units. Sometimes they had a

situation that they had to sell less prominent vehicles like Hunk with discounts and free gifts

instead of the customer request for either CBZ Xtreme or KarizmaR due to poor supply issues.

Model (BS2 & BS3)

BS2 & BS3 are standards set as per Indian Government Norms called Bharat Stage 2 & Bharat

Stage3. Between the both of them BS3 standards are highly accepted standards by the

government. And these standards designed with in the conscience of environmental issues. BS3

standard vehicles produce less pollution than BS2 standard vehicles. At Venkateswara motors

they sell only BS3 Standard 2 wheelers produced by Hero Honda. This can be considered as their

contribution to the part of Corporate Social Responsibility.

Sales of Motor cycles

Venkateswara motors’ sales performance of two-wheeler motorbikes for a period of six months

is as follows

Business area April‘10 May‘10 June’10 July‘10 August‘10 September’10MC Dispatches

200 210 220 215 225 230

MC Retails 200 195 220 260 111 205 *motorcycles include all models among all variants

MC dispatches is Total number of Motor Cycles being dispatched for each month

MC retails is the actual number of two wheelers sold for each month

We can get a regression line with the available data of Motor cycles dispatches and Motor cycles Retails.

Trend line showing Motorcycle retails.

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Observations from the above trend line:

The above trend

line

drawn

for

Motor

Cycle Retails at Venkateswara motors, Hyderabad indicates that sales of two wheelers in

all months is almost similar, that indicates consistency in doing a business by them.

Moreover by using this trend line graph they can estimate future retails also by then they

can order according to the posing requirement.

Standard deviation of sales of motor bikes

Applying a Concept of Standard deviation to the Sales of Two wheeler motorcycles at

Venkateswara motors, taking mean as a central tendency and calculating variance and

standard deviation. Both of these tell us the extent of difference between any sales

observation and central value. This can be done as follows

MC Retails (X)

Mean (µ)

Deviation (X-µ)

Deviation squared (X-µ)2

Observation squared X2

April'10 200 198.5 1.5 2.25 40000May'10 195 198.5 -3.5 12.25 38025June'10 220 198.5 21.5 462.25 48400

July'10 260 198.5 61.5 3782.25 67600August'10 111 198.5 -87.5 7656.25 12321

September'10 205 198.5 6.5 42.25 42025Total ΣX=1191 Σ(X-µ)2=1197.5 Σ X2=248371

April'10

May'10

June'10

July'10

August'

10

Septem

ber'10

0

50

100

150

200

250

300

MC Retails

MC RetailsPolynomial (MC Retails)

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N (number of observations) = 6

Mean(X) = 198.5

Variance (σ2)= Σ(X-µ)2 /N = 1992.917

Standard Deviation (σ) = √ σ2 = 44.642

Regression analysis of sales of motor bikes

There is one more sophisticated method comes from one of the mathematical properties of a line

fitted by the method of finding a regression line. Using regression line equation future

demand can be estimated as well as sales. The method of estimating an equation is as

follows.

MC Dispatches (X)

MC Retails(Y)

XY X2

April'10 200 200 40000 40000May'10 210 195 40950 44100June'10 220 220 48400 40000July'10 215 260 55900 44100

August'10 225 111 24975 40000September'10 230 205 47150 44100

Total 1300 1191 257375 252300

To apply regression concept, one entity must depends on other entity. Here Moto Cycle retails

depends up on Motor Cycle Dispatches. The equation of regression line is as follows

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mean(Y)=a+b*mean(X)

mean(X)= 216.667

mean(Y)= 198.5

From the formula b= [ΣXY-n*mean(X)*mean(Y)]/[ΣX2-n*mean(X)2]

b =1.02011 n= Number of Observations

a= mean(Y)-b*mean(X) a= -22.524

Hence the Estimating equation is Y^= 1.02*X-22.52

If the number of 2 wheelers dispatched are 500, i.e. X=500

Y^=1.02*500-22.52

Number of 2 wheeler motor bikes that could be sold by Venkateswara motors, Hyderabad if 500

motor bikes are dispatched is 487

Sales of Scooters ri Jayaram Motors’ sales performances of two-wheeler Scooter for a period of six months taken into study are as follows

Business area April ‘10 May ‘10 June ‘10 July ‘10 August‘10 September‘10Scooter dispatches

12 8 0 0 8 0

Scooter retails 7 9 4 0 0 8

In turn Venkateswara motors has recorded very less number of sales for Hero Honda, one among

the main reason could be the only one model under this scooter division is Hero Honda Pleasure.

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Standard

deviation of sales of Scooters at Venkateswara motors, Hyderabad

Applying a Concept of Standard deviation to the Sales of Two wheeler motorcycles at

Venkateswara motors, taking mean as a central tendency and calculating variance and

standard deviation. Both of these tell us the extent of difference between any sales

observation and central value. This can be done as follows

Month MC Retails (X)

Mean (µ)

Deviation (X-µ)

Deviation squared (X-µ)2

Observation squared X2

April'10 7 4.67 2.33 5.4289 49May'10 9 4.67 4.33 18.7489 81June'10 4 4.67 -0.67 0.4489 16

July'10 0 4.67 -4.67 21.8089 0August'10 0 4.67 -4.67 21.8089 0

September'10 8 4.67 3.33 11.0889 64Total 28 79.3334 210

N (Number of Observations taken) = 6

Mean (X) = 4.67

Variance (σ2) = Σ(X-µ)2 /N = 13.223

Standard Deviation (σ) = √ σ2 = 3.63

April'10

May'10

June'10

July'10

August'

10

Septem

ber'10

0123456789

10

Scooter retails

Scooter retailsPolynomial (Scooter retails)

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REQUIREMENT VS DISPATCH

Venkateswara motors has presented a data about Requirement Vs Dispatch. Where it focuses on

requirement of theirs and what could be the expected plan of selling set by Hero Honda Motor

Ltd Plan (HHML plan) and that to the actual number of two wheelers has been dispatched.

The data for the six months taken into study are as follows

Monthly motor cycle requirement vs dispatch

Month Requirement HH Motor Ltd plan

Actual dispatch Percentage of bikes sold as per HHML

planApril10 400 250 200 80%May10 420 250 210 84%June10 425 250 220 88%July10 410 250 215 86%

August10 420 250 225 90%September10 350 250 230 92%

Trend line showing Percentage of bikes sold as per HHML plan

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1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep

74%

76%

78%

80%

82%

84%

86%

88%

90%

92%

94%

Percentage of bikes sold as per HHML plan

Percentage of bikes sold as per HHML planPolynomial (Percentage of bikes sold as per HHML plan)

Applying one more sophisticated method comes from one of the mathematical properties of a

line fitted by the method of finding a regression line. Using regression line equation

future requirement and dispatches that can be done can be estimated. The method of

estimating an equation is as follows.

Requirement (X)

Actual dispatch

(Y)

XY X2

April'10 400 200 80000 160000

May'10 420 210 88200 176400

June'10 425 220 93500 160000

July'10 410 215 88150 176400

August'10 420 225 94500 160000

September'10 350 230 80500 176400

Total 2425 1300 524850 1009200

To apply regression concept, one entity must depends on other entity. Here Moto Cycle retails

depends up on Motor Cycle Dispatches. The equation of regression line is as follows

mean(Y)=a+b*mean(X)

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mean(X)= 404.167

mean(Y)= 216.67

From the formula b= [ΣXY-n*mean(X)*mean(Y)]/[ΣX2-n*mean(X)2] b =0.52

n= Number of Observations

a= mean(Y)-b*mean(X) a= 46.24

Hence the Estimating equation is Y^= 46.24+0.52*X

If the number of 2 wheelers dispatched are 500, i.e. X=500 then Y^=46.24+0.52*500

Number of 2 wheeler motor bikes that could be dispatched from Rajahmundry Venkateswara

motors if 500 motor bikes is the actual requirement 306

MODEL WISE RETAIL AT VENKATESWARA MOTORS

As Venkateswara motors has number of models with different variants, the sales happened for a

period of 6 months taken into consideration i.e. from April 2010 to September 2010 model wise

is as shown below.

Models April’10 May’10 June’10 July’10 August’10

September’10

CD dawn - - - - - -CD deluxe 10 - - 30 - -Splendor NXG

- - - - - -

Splendor BS2

- - - - - -

Splendor BS3

- - - - - -

Splendor Pro

- - - - - -

Splendor Plus

118 - 105 50 50 50

Passion Pro 6 81 65 127 52 112Passion Plus 55 61 23 30 - -

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Super Splendor

- - - - - -

Glamour - 26 10 40 - 20Glamour FI - - - - - -CBZ extreme

12 18 11 10 8 12

Hunk 2 - - - 1 3Karizma - - - 3 - -Zmr - - - - - -Pleasure 7 9 6 - - 8Total MC retails

200 195 220 260 111 205

CUSTOMER RELATIONSHIP MANAGEMENT

For Customer Relationship Management they have specific Customer Relationship Program

through which they offer special privileges to the customers.

Hero Honda started a program called Customer Passport in 2000. Venkateswara motors got

benefited with this program and it helped to get more customers.

Now the same program has been changed to Good life. Right now 60 Lakh customers are

registered as members in this Good life program. Good life program helps them to maintain

entire log of information about all customers and this is main and important program for

showroom under customer relationship management. And this is a successful program; this Good

life Program has lot of benefits to the customers.

For every service they offer to each customer vehicle, the showroom allots points for that

customer. For free service they offer 100pts and for paid service they offer 150pts. And if any

customer influences other to buy a bike at Venkateswara motors showroom, then showroom

offers 3000 bonus points to that customer’s passport. And even if customers buy any spare parts

at their show room, then showroom offers number points equal to the amount of purchase of

spare parts. With this scheme every member og good life program will get a discount of 5% on

P a g e | 30

all spare parts of Hero Honda until and unless they buy spare parts at Venkateswara motors.

Through this program, customers have an advantage of one lakh risk coverage as insurance.

Suhana-Safar Program:

In this program Venkateswara motors wishes greetings for their customers during special

occasions like Marriage Anniversaries, Birthdays.

Through this program Venkateswara motors intimates their customers about the new releases in

hero Honda, and they even offer movie tickets and conduct some entertainment programs to

maintain healthy and strong relations with customers enrolled in Good life scheme.

Program Hero Honda Advantage

Advantage is a program, through which Hero Honda showroom adds an extended warranty to the

customers’ vehicles from Venkateswara motors Showroom. For this program to be successful

Hero Honda has a tie up with Extended Warranty Corporation. Through this Advantage, they add

3 years extended warranty to the 100cc vehicles for which the actual warranty is only 2years, and

they add 2 more years as extended warranty to the vehicles with 150cc and above vehicles.

Hence this program satisfies almost every customer and even it helps in fetching new customers.

There is another channel in this program called Matrix driven extended warranty to 120 genuine

spare parts of Hero Honda. Moreover this warranty is specific to each variant in each model of

motor cycle. And there are number of options available with difference in the validity of

warranty. With this scheme every customer who bought two wheeler automobiles at

Venkateswara motors can get an extended warranty on specific spare parts in spite of the total

warranty for entire vehicle.

Trained Work force

Managers at almost all Hero Honda showrooms conduct some training program for all

executives and employees and other workforce working at all other Hero Honda showrooms. The

senior management at regional centers (Eg:- such as Managers at Vijayawada conduct training

program for entire Coastal Andhra region)

P a g e | 31

They are getting trained by trainees from NIS (National Institute of Sales), and this is also called

as Reliance Group training program. And this is Asia’s best training program that is given to

employees.

This training helps all employees divisionally to connect with all customers of Hero Honda.

What staff will do

They receive customers at the door step of their showroom, and there is dedicated

workforce to do this.

When they engage with customers, they open their customer mind and try to think in

customer’s perspective and they understand the needs of customers.

Suggest the best idea in accordance with customers’ plans and expectations.

Company officials train their employees in such a way that to engage their work force in

knowing about the competitor and their own company about new releases and their

technical specifications. (they do this through forwarding mails).

PROMOTIONAL ACTIVITIES DONE BY VENKATESWARA MOTORS

There are number of promotional activities those are being undertaken by Venkateswara

motors in spite of the promotional activities done by Hero Honda Company.

Venkateswara motors usually conduct a promotional activity through exchange cum loan

mela, through which customers can exchange their old bikes with new bikes in showroom

in addition to this they can get a loan with less interest rates.

Venkateswara motors provide finance in the showroom itself to assist their customer in

buying a two wheeler. They do finance through Corporate bankers. This helps in

attracting more customers.

Venkateswara motors gives ads through news paper’s local edition, through which new

offers or new releases in Venkateswara motors at Hyderabad can be informed to the

people over there. They even use local media to advertise.(Despite of the actual

promotion by Hero Honda)

Venkateswara motors take up an enquiry from customers in different forms like through

walk in of the customer directly into showroom, through telephone enquiry .

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CUSTOMER SERVICES AT VENKATESWARA MOTORS,

HYDERABAD:

Customer Facilities and Comforts:

Automated Workshop

Air conditioned Lounge

Pay phone facility

Mini-Library

Exclusive Washrooms

Quick Service (Delivery in 1 hour)

Hero Honda passport (Good life)

Help line Service

Locker Facility to keep customers’ important things

Customer classifieds*

ANALYSIS ON THE SERVICE OFFERED BY THE SRI JAYARAM

MOTOR SHOWROOM TO THE CUSTOMERS’ VEHICLES

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Free service details: The Below data represents the number of customers or customers’ vehicles have

been serviced at Venkateswara motors’ own automated work shop. At first they offer 6 free services to

each customer in spite extended warranty. And for every month their work shop maintains 6 schedules,

and also maintains a record of number customers they serviced over there during each schedule.

1st 2nd 3rd 4th 5th 6th FSC Total

2nd

yearOn-ramp

pwtyReporting

total

April’10 198 260 190 174 181 127 1130 586 721 2437May’10 170 195 173 128 103 90 859 572 704 2135June’10 172 188 175 23 101 91 859 582 715 2149July’10 193 159 171 138 136 126 923 512 722 2157

August’10 194 164 141 140 91 99 829 504 654 1987September’10 197 224 188 152 134 131 1026 490 623 2139

Trend line representing the total number of vehicles being serviced at Venkateswara motors, Hyderabad

Observations from the above trend line

The above graph indicates the trend of customers being serviced at Venkateswara motors’

automated work shop. The showroom recorded a highest number of services in the month of

April and lowest in the month of August.

Services offered by the ards (authorized representative dealers) of

Venkateswara motors, Hyderabad

April’10

May’10

June’10

July’10

August’

10

Septem

ber’10

0

500

1000

1500

2000

2500

3000

Reporting total

Reporting totalPolynomial (Reporting total)

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Below table represents the Data reported by the four ARDs of Venkateswara motors about the

services they offered to the hero Honda customers at their workshops.

Wty paid Wty paid Wty total Post Wty Total Reporting

April’10 871 345 1216 405 1621May’10 730 342 10072 408 1480June’10 720 411 1131 400 1531July’10 629 384 1013 376 1389August’10 591 392 983 379 1362September’10 672 400 1072 384 1456

The graph representing the trend of Customer being serviced at Authorized Representative dealers of Venkateswara motors

April’10 May’10 June’10 July’10 August’10 September’10

1200125013001350140014501500155016001650

Total reported

Total reportedLinear (Total reported)

Observations *: Above trend represents the four ARDs offered Maximum number of customers

in the month of April and the least number of customers in the month August. Observations of

this graph have a typical raise in the number of serviced customers in the month of June.

TURNOVER OF SPARE PARTS AND SERVICES

Venkateswara motors has an inbuilt expo of genuine spare parts available for all Hero Honda

motor bikes sold in their showroom. They sell wide range of spare parts for number of customers

P a g e | 35

every month. And they say that this is one of major income source for them and also for

Authorized Representative Dealers under them. As per the data given by Venkateswara motors

i.e. the income through selling of genuine spare parts for a period of six months taken into study

are as follows.

Sales of Spare parts reporting

W/s sale report Wty Replacement Counter sale TotalApril’10 3,05,648 28,995 52,663 3,87,306May’10 2,76,484 30,659 68,966 3,76,103June’10 2,80,246 32,441 27,111 3,97,981July’10 1,95,572 25,549 14,230 2,35,351

August’10 3,27,303 25,666 47,840 4,00,809September’10 3,15,200 25,498 36,097 3,76,795

Trend line showing Revenue through turnover of spare parts

April’10

May’10

June’10

July’10

August’

10

Septem

ber’10

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

Revenue through selling of spare parts

Revenue through selling of spare partsPolynomial (Revenue through selling of spare parts)

Observations: Above graph shows the trend line representing the generation of revenue for

Venkateswara motors by selling spare parts to the customers, where they have a dedicated

employees and space for Spare parts shop inside the showroom itself. This is major income

source for them. And the above trend line marked the highest revenue in the month of June and

generated least revenue in July as on the observation taken from a period of six months.

P a g e | 36

Revenue generated through selling of spare parts from ARDs (Authorized representative

Dealers) of Venkateswara motors, Hyderabad

Below table represents the data regarding revenue generated through selling of spare parts from ARDs of

Sri Jayaram Motor.

Rev-oil Rev Free service Rev Paid service TotalApril’10 1,54,073 1,12,219 1,43,375 4,09,667May’10 1,54,894 87,082 1,12,670 3,54,646June’10 1,63,299 92,718 1,14,520 3,70,537July’10 1,49,019 87,098 1,15,400 3,51,517

August’10 1,29,672 79,559 1,13,300 3,22,531September’10 1,42,226 94,858 1,08,600 3,45,684

Trend line representing the trend of revenue generated through the selling of spare parts from ARDs

April’10

May’10

June’10

July’10

August’

10

Septem

ber’10

050000

100000150000200000250000300000350000400000450000

Revenue generated through selling of spare parts from ARDs

Revenue generated through sell-ing of spare parts from ARDsLinear (Revenue generated through selling of spare parts from ARDs)

FINDINGS AND SUGGESTIONS

The data of Modelwise sales in Hero Honda two wheeler automobiles at Venkateswara motors

showroom gives an idea that the showroom has recorded an highest number in sales of Deluxe

P a g e | 37

segment vehicles, they are Splendor plus, Passion pro and Passion plus. But It recorded less

number in Premium segment 2 wheelers compared to deluxe segment vehicles and even scooter

also doesn’t make any sense of high number in sales. If major branches or Stock Keeping units

are able to dispatch the number of bikes equal to the requirement, then Venkateswara motors

showroom could be able to make more sales by then it can generate more revenue.

One of the best finding from the entire study is Venkateswara motors posess some competitive

advatage over other competitors and they are 1) The Best Automated Workshop 2)Service

Satisfaction from Customers 3)Better Resale value of Bikes 4) Consistenet Milege of 2 wheelers

sold by them 5)Japan Technology used in engines (Core competency of Honda)

Suggestion for this above finding is Venkateswara motors can advertise these activities and they

could use these as a part of their promotional activities. Right now they are using only 2

advantages as their biggest assets.

In the Automated workshop of Sri Jayaram Motros they have one Customer Information

Board which informs customers about the service department, team supervisors, names of

mechanics in each teams and service advisors. Venkateswara motors do have a time table for this

they have 2 shifts daily in an automated workshop and there are four teams for each session and

there are four mechanics for each team with that each team has a team supervisor and one service

advisor for the entire workshop.

BAR CHARTS

Bar chart No: 2 showing Monthly sales of Motor cycle sales at Venkateswara motors

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April'10

May'10

June'10

July'10

August'

10

Septem

ber'10

0

50

100

150

200

250

300

Sri Jayaram Motors Motor cycles sales

MC DispatchesMC Retails

Bar chart No: 3 showing monthly retails of Scooters at Venkateswara motors

April'10

May'10

June'10

July'10

August'

10

Septem

ber'10

0

2

4

6

8

10

12

Scooter Retails

Scooter dispatchesScooter retails

Bar Chart No 4 : showing Requirement Vs Retail at Venkateswara motors

P a g e | 39

April'10 May'10 June'10 July'10 August'10 September'10

0

50

100

150

200

250

300

350

400

450

Sri Jayaram Motors Requirement vs Retail

RequirementHHML planActual Retail

CONCLUSION

Statistical analysis of sales and customer service data emphasizes that the showroom

Venkateswara motors has done well in all the months taken into study and it is contributing 50%

among the potential market and surrounding area in it. But one main observation from the entire

business process is there is a large mismatch between requirement by the Venkateswara motors

and the dispatches from Stock keeping units. And one appreciating point from the analysis is that

the gap between HHML plan of selling of motor cycles to the actual number sold by showroom

P a g e | 40

is very less. And the showroom is generating good amount of revenues through selling of spare

parts. Venkateswara motors has an efficient staff and they are being trained by NIS, this helps in

making showroom a good place for walk-in customers. Customer relationship management

through several programs conducted by them benefits many customers and it even helps in

retaining old customers and getting new customers.

Through Ride Safe Program Venkateswara motors is undertaking Corporate Social

Responsibility. In this program they are making people aware of traffic rules and mentoring

about careful bikeriding to their customers and even to non customers.Venkateswara motors has

specially trained staff and a dedicated room for that, and this even supports their ongoing

business process.

BIBLIOGRAPHY & REFERENCES

Websites:

www.herohonda.com

www.moneyarbour.com

www.bikesncars.com

www.reportjunction.com

Primary data source:

From the data and sales records of Venkateswara motors, An Authorized Dealer in Hero

Honda, Hyderabad

From the records of sales and revenues of spare parts of Motor Spare Parts Shoppe,

Hyderabad

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Customer services data from the records of an Automated Workshop, Venkateswara

motors