HERO HONDA FUTURE STRATEGIES

Business Strategy
Hero Honda remains successful by constantly monitoring the Indian motorcycle marketplace. Competitors lower their pricing on a high-end motorcycle to the value of Hero Honda's bestselling 100cc motorcycle. Hero Honda responds by lowering the 100cc motorcycle price, resulting in even more sales against the competitor.

Future Marketing
Hero Honda sees an untapped market in the rural areas of India. Almost 50 percent of the rural population could possibly purchase a motorcycle, as there are no local dealerships serving the rural communities. Hero Honda plans on expanding into the rural market with reasonably priced motorcycles
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Pricing Strategy: Penetration Pricing: The price charged for products and services is set artificially low in order to gain market share. Once this is achieved, the price is increased. This approach was used by France Telecom and Sky TV. Hero Honda Used penetration pricing strategy because that time Hero Honda use National Segment and low income persons so they used penetration strategy.

Price Skimming: Charge a high price because you have a substantial competitive advantage. However, the advantage is not sustainable. The high price tends to attract new competitors into the market, and the price inevitably falls due to increased supply. Manufacturers of digital watches used a skimming approach in the 1970s. Once other manufacturers were tempted into the market and the watches were produced at a lower unit cost, other marketing strategies and pricing approaches are implemented. Premium pricing, penetration pricing, economy pricing, and price skimming are the four main pricing policies/strategies. They form the bases for the exercise. However there are other important approaches to pricing

Hero Honda strategy in place to stay ahead in 2-wheeler market

Faced with an uncomfortable scenario of Bajaj Auto closing in on Hero Honda Motors in monthly unit sales, managing director Pawan Kant Munjal said the company has put in place a strategy to retain its leadership in the Rs 33,000 crore two-wheeler market.
That includes developing new high-performance engines in 100cc, expanding capacity to beyond 5 million units and reducing the price of 100cc bikes, if needed.

Hero Honda's extensive sales and service network now spans over 3000 customer touch points. These comprise a mix of dealerships, service and spare points, spare parts stockiest and authorized representatives of dealers located across different geographies. Hero Honda values its relationship with customers

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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

Having reached an unassailable pole position in the Indian two wheeler market, Hero Honda is constantly working towards consolidating its position in the market place. The company believes that changing demographic profile of India, increasing urbanization and the empowerment of rural India will add millions of new families to the economic mainstream. This would provide the growth ballast that would sustain Hero Honda in the years to come. As Brijmohan Lall Munjal,the Chairman, Hero Honda Motors succinctly points out, "We pioneered India's motorcycle industry, and it's our responsibility now to take the industry to the next level. We'll do all it takes to reach there.

Hero is looking forward to invest a whooping sum of INR 1,000 crore to set up two new manufacturing facilities besides expanding the output of three of its existing plants

Hero current exports contribution is less than 2 per cent of total sales. The sales output stood at a mindboggling figure of 54,02,444 units during the financial year 2010-11. The company is looking at exporting its products to Latin America, Africa and South East Asian nations The Honda group is already marketing two wheelers such as the Honda Activa, Dio, as well as motorcycles such as Shine, Unicorn, Twister and Stunner. Honda is planning to launch the CBR250R, a 250 cc sports bike in April 2011 and the CBR250R will be priced at 1.5 lakhs. Bookings have already opened since January 1 and Honda has already received 1800 confirmations.

Honda is looking towards 26% growth for 2011-2012. It has a network of 398 dealers as well as 392 branches. It has 389 service centres. Thus HMSI has an excellent platform to launch itself. Lets hope it brings some even better 2 wheelers with the Japanese brains behind it.