Product Life Cycle

DELHI PRIVATE SCHOOL

DEPARTMENT OF COMMERCE MARKETING MANAGEMENT CERTIFICATE OF MERIT This is to certify that the work in this file is the bonafide work of Anand Raman of Class: XII Division: J Roll No: has carried out necessary practical work for the Senior Secondary School Examination, AISSCE of CBSE under my supervision for the academic year 2012-2013.

DATE:

TEACHER IN-CHARGE:

who

DELHI PRIVATE SCHOOL SHARJAH

MARKETING PROJECT

ACKNOWLEDGEMENT I WOULD LIKE TO CONVEY MY HEARTFULL GRATITUDE TOWARDS MY TEACHER MR.PRASHANT VASUDEV FOR PROVIDING ME AN OPPOTUNITY TO WORK ON THIS PROJECT. IT IS A MATTER OF PRIDE AND PLEASURE TO EXPRESS MY INDEBTEDNESS AND WARM GRATITUDE TO THE FACULTY OF COMMERCE FOR THEIR KEEN INTEREST, CONTINUOUS ASSISTANCE AND CONSTRUCTIVE CRITICISM AND EACH AND EVERY STAGE OF THIS PROJECT. I AM GRATEFUL TO ALL MY FRIENDS WHO HELPED ME IMMENSELY IN COMPLETING THIS PROJECT

I AM THANKFUL TO THE C.B.S.E FOR INCLUDING THIS PROJECT AS A PART OF THE MARKETING MANAGEMENT SYLLABUS. LAST BUT NOT LEAST, MY PARENTS WHO GUIDED AND INSPIRED ME TO SUCCESSFULLY COMPLETE THIS CHALLENGING TASK.

 What is Product Life Cycle?

Product life-cycle management (or PLCM) is the succession of strategies used by business management as a product goes through its life-cycle. The conditions in which a product is sold (advertising, saturation) changes over time and must be managed as it moves through its succession of stages. Product life-cycle (PLC) Like human beings, products also have an arc. From birth to death, human beings pass through various stages e.g. birth, growth, maturity, decline and death. A similar life-cycle is seen in the case of products. The product life cycle goes through multiple phases, involves many professional disciplines, and requires many skills, tools and processes. Product life cycle (PLC) has to do with the life of a product in the market with respect to business/commercial costs and sales measures.

To say that a product has a life cycle is to assert three things: 

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Products have a limited life, Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller, Products require different marketing, financing, manufacturing, purchasing, and human resource strategies in each life cycle stage.

The four main stages of a  products life cycle and the accompanying characteristics are:

Hero Honda, the ‘Worlds No.1’ two wheeler  manufacturer for the past 5 years in a row is a joint venture between Hero Group of India and Honda of Japan. Together they have not only created the world's single largest two wheeler company but also one of the most successful joint ventures worldwide. Hero Honda had gained significant motorcycle market share.

Hero Hondas mission is to strive for synergy between technology, systems and human resources, to produce products and services that meet the quality, performance and price aspirations of its customers. At the same time maintain the highest standards of ethics and social responsibilities.

This mission is what drives Hero Honda to new heights in excellence and helps the organization forge a unique and mutually beneficial relationship with all its stakeholders. VISION Hero Honda now the leader in the two wheeler industry. Leaders are not born, they evolve over time. This leadership has been achieved only because of its philosophy to excel in all areas. In fact, passion to excel is a credo of the entire Hero Honda family and is a way of life in Hero Honda. The changing Scenario of increasing competition and the entry of new brands has made the credo even more relevant. It serves as a constant reminder to ensure excellence in providing service to the customer. They are providing outstanding customer service. It is in keeping with Hero Hondas own passionate commitment to provide ultimate customer satisfaction. Today, they consistently meet and exceed all requirement on quality, cost and delivery.

OBJECTIVES Hero Hondas mission is to strive for synergy between technology, systems and human resources, to produce products and services that meet the quality, performance and price aspirations of its customers. At the same time maintain the highest standards of ethics and social responsibilities.

His mission is what drives Hero Honda to new heights in excellence and helps the organization forge a unique and mutually beneficial relationship

with all its stake holders.

INTRODUCTION

The Rs. 5500 crore Indian two wheeler segment is the second largest market fin the world after China. Indias two wheeler production is the third largest in the world after Japan and China. India has a well developed two wheeler market with around 25 million households owning two-wheeler. The Indian two wheeler industry made a modest beginning in the early1950 when Automobile Product of India ( API ) started manufacturing scooter in India. Until1958. API and

Enfield( motorcycle) were the only two in production. In 1948, Bajaj auto began trading in imported Vespa scooter and the three ± wheeler- finally, in 1960s. it set upshop to manufacturer them in technical collaboration with piggaio of Italy. The agreement expired in 1971. In the initial stages, the scooters segment was regulated regime, foreign company was not allowed to operate in India, and waiting time for getting Bajaj scooters was as high as 12 years. Java, and escort. While the Enfield bullet was a four strokes bike, the Java and Rajdoot were two-strokes bikes. The motorcycles industry was originally dominated by Enfield with 350 cc bikes. The motorcycles industry was cc segment. The two wheelers segment was opened up to foreign competition in the mid 1980s which saw the entry of the Japanese manufactures into the country.

COMPANY PROFILE 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, maintain the highest standards of ethics and societal responsibilities.

Twenty five years and 25 million two wheelers later, Hero Honda is closer to fulfilling this dream. This vision is the driving force behind everything that we do at Hero Honda. We understood that the fastest way to turn that dream into a reality is by remaining focused on that vision. There were many unknowns but we kept faith, and today, Hero Honda has been the largest two wheeler company in the world for eight consecutive years. Our growth has kept compounding.

The company crossed the ten million unit milestone over a 19-year span. In the new millennium, Hero Honda has scaled this to 15million units in just five years! In fact, during the year in review, Hero Honda sold more two wheelers than the second, third and fourth placed two wheeler company put together. With Hero Honda, the domestic two wheeler market was able to show positive growth during the year in review. Without Hero Honda, the domestic market would have actually shrunk

The Hero Honda is certainly not the best looking bike in the Market. It’s Looks and Styling may not be to everyone’s liking. The  front mini fairing is still a little conventional. If we ignore the front fairing things start looking better. The instrument panel The fuel tank looks sporty. Hero Honda has kept the use Graphics stickers to the minimal. This gives a very sporty look to bike. The Split Grab rails at the back is also a first and looks very exotic.

The Growth stage of the company is when the product rises to popularity. It moves into the second stage of the life cycle. Demand expands rapidly, prices fall, competition increases and distribution is greatly divided. Marketers focus on improving the market share by penetrating deeply into existing markets and also strategize about entry into new markets.Let us further take a look at growth stage of .

Growth Sales increase rapidly during the growth phase. This increase is due to:

(1) consumers rapidly spreading positive word-of-mouth (WOM) about the product; (2) an increasing number of competitors enter the market with their own versions of the product; (3) and a "promotion effect" which is the result of individual firms employing, advertising and other forms of promotion to create market awareness, stimulate interest in the product, and encourage trial. Cost are declining on a per unit basis because increased sales lead to longer production runs and, therefore, scale economies in production. Similarly firms may experience experience curve effects which help to lower unit variable costs. Because sales are increasing and, at the same time, unit cost are declining, profits rise significantly and rapidly during this stage. Customers are mainly early adopters and early majority. It is the early adopter, specifically, that is responsible for stimulating the WOM effect. During the latter part of growth, the first major segment of the mass market, called the early majority, enters the market. This category of consumers is somewhat more price sensitive and lower on the socioeconomic spectrum. As a result, these consumers are somewhat more risk averse and, therefore, somewhat more hesitant to adopt the product. Competition continues to grow throughout this stage. As competitors recognize profit potential in the market, they enter the market with their own versions of the product. As competition intensifies, strategies turn to those that will best aid in d i f f e r e n t i a t i n g   the brand from those of competitors. Attempts are made to differentiate and find sources of competitive advantage. In addition, firms identify ways in which the market can be segmented and may develop focused marketing strategies for individual segments

Sales in December 2009 for Hero Honda, which controls over 55 per cent of the domestic motorcycle market, grew by an unexpected 74 per cent with the company selling 375,838 units of two-wheelers last month. This is the highest year-on-year sales growth for the company in the current financial year. The company has indicated plans to cross the fourmillion-mark in two-wheeler sales for the whole of 2009-10.

TVS Motors sold 102,479 units of scooters and motorcycles in the domestic market in December last year — growth of 42 per cent. However, exports for the Chennai-based company moderated to a rise of 2 per cent at 17,222 units. India Yamaha, the manufacturer of the Fazer and FZ series motorcycles, sold 13,612 units of motorcycles, which represents a dip of 15.15 per cent. However, sales in the Christmas month for Suzuki grew by 68 per cent to 14,806 units (both motorcycles and scooters). BIKE SALES HEAT UP TOO Company Hero Honda TVS Motor

December December 2008 2009 215,931.00

% change

375,838.00

74.00

72,355.00 102,479.00

42.00

India  Yamaha

16,043.00

13,612.00

-15.15

Suzuki

8,809.00

14,806.00

68.00

313,138.00 506,735.00

61.82

Total

Source: Companies’ data 

 Analysts say the growth story for two-wheelers has largely been driven by new motorcycle model launches like Bajaj Auto’s Pulsar 135cc and Hero Honda’s FI ZMR, along with improving sentiments.

Features introduced during growth stage It makes use of a larger spring operated nozzle to provide a richer fuel air mixture into the engine for better acceleration. •  An air injection system injects fresh air into the exhaust port, to meet the emission norms. • CBZ was one of the first Indian 4-stroke bikes to feature a 5-speedgearbox. Some two stroke bikes such as Yamaha RD350 had a six speed box, while Yamaha RX135 & Suzuki Shaolin had 5-speedgearboxes. • The close-ratio gearbox provided superior acceleration and roll-on capabilities. The gearbox was well sorted to provide best performance out of the peaky power plant which also lacked top-end refinement.

Low Fuel efficiency was the reason why the original CBZ did nothit the Bullz-Eye. The new Hero Honda XTreme does away with this mistake. It returns a Mileage of 50 Kmph in hard city riding and 60Kmph on Highway. This is very commendable

considering, this bike is basically a performance bike

Stage Ii

– Growth Stage

Maturity Sales continue to grow during the early part of maturity, but at a much slower rate than experienced during the growth phase. At some point, sales peak. This peak may last for extended periods of time. In fact, the maturity phase of the life cycle is the longest phase for most products. As a result, most products at any given point in time probably are at maturity.  And, most decisions made by marketing managers will be decisions about managing the mature product.

Costs continue to rise during maturity because of market saturation and continually intensifying competition. When this slowing of sales is combined with the increasing costs associated with this stage, the result is that profits will have reached their highest level and must, from this point on, decline. The only remaining customers to enter the market will be the late majority   and the l a g g a r d s   . These customer groups are by far the most risk averse and most hesitant to adopt new products. These customers are quite price sensitive and, as a result, will not buy products until prices have seen significant declines. Many laggards, the last group to adopt, often do not do so until the product is virtually obsolete and in danger of being displaced by new technologies. Competition is most intense during this stage. The intensity of competitive in-fighting drives the changes in costs and profitability.

Changes undergone in maturity stage: • CBZ went unchanged more or less for 5 years. • But in 2004 a new variant called CBZ* (star) featuring new graphics and Electric self-start was introduced to boost sales. • The bike did not feature any engine or performance upgrades. • The only change was in its carburetor, it was changed from the Sliding Type carburetor to a conventional CV carburetor, which increased the fuel-efficiency but hampered the pick-up, the

greatest feature of the bike.

Changes undergone during Maturity stage in terms of Engine and Performance CBZ seems to have borrowed the engine from Unicorn and Achiever (they both share the same engine base). Only the change is that the engine has been retuned for performance. This works in the favor of CBZ as the engine is tried and tested. Above all the engine is a Honda engine (they do not knowhow to make bad engines). So reliability is not an issue. The engine returns14.4 bhp power output. This figure is the best in 150cc segment. Higher power also evident from the acceleration the bike gives. It reaches from 0 to60 Kmph in just above 5.5 seconds. This again is one of the best acceleration figure in it’s segment. The bike feels very stable at

high speed and while cornering. Top speed is around 160 Kmph.

Decline Sales continue to deteriorate through decline. And, unless major change in strategy or market conditions occur, sales are not likely to be revived. Costs, because competition is still intense, continue to rise. Large sums are still spent on promotion, particularly sales promotions aimed at providing customers with price concessions. Profits, as expected, continue to erode during this stage with little hope of recovery. Customers, again, are primarily laggards. There generally are a significant number of competitors still in the industry at the beginning of decline. However, as decline progresses, marginal competitors will flee the market. As a result, competitors remaining through decline tend to be the larger more entrenched competitors with significant market shares.

Decline of hero Honda series:

The bike was discontinued after 2005 September. Reason for decline can be enumerated as:- low mileage- competitor entry in 150 segment- Fit and Finish The fit and finish of this bike is still not the Hero Honda benchmark. The welding job on the Chassis looks a little shoddy. Also the heat shield on the exhaust does not blend seamlessly

Relaunch of Hero Honda! • CBZ Xtreme is a 150 cc bike from Hero Honda Motors which is the successor of the legend Hero Honda CBZ. • The bike was introduced in the year 2007. • Except for a mild resemblance to the older CBZ's headlamp, the new CBZ Xtreme has little else in common. • But the bike followed the grand success made by Hero Honda CBZ. Re-Launch of CBZ

"Honda, for its part, has also made similar statements. However, industry analysts do have doubts. Says an industry analyst, "Honda's track record in India does lead to some apprehensions. An analysis of Honda's past tie-ups in India would prove so. For instance, Honda exited the joint venture with Kinetic by selling its stake to the promoters and launched a replica of Kinetic Honda's ungeared scooter; its 60:40 ventures with SIEL for cars progressively became a 99:1 partnership and its venture with the Shriram group for genset sended when it bought out Shriram's stake. This does throw up some questions with regards to the path ahead for Hero Honda." These examples prove that Honda has always wanted to have its own entity, says another analyst. Most of the customers of Hero Honda belong to congested areas. They mostly belong to middle class and are mostly officials/ executives. Thus, we conclude client has targeted the right segment. From the findings we conclude that a customers while purchasing a bike, customers takes into consideration mainly fuel efficiency, good looks, low maintenance cost and reliability. The main competitors of Hero Honda are Bajaj Auto, Yamaha and TVS . The consumer preference basically depends upon wider network and better services. Customers are influenced more to buy a product by

advertisements rather than dealer friends or family recommendations

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This is one for the ages. Hero Honda versus Bajaj. Karizma versus Pulsar 220. The first quarter-faired big bike against the second one. Only, the second one took some time coming. But that time was spent developing the various high-tech (for India) bits that the P220 comes with. Fuel injection, rear disc, oil cooler, clip-on handlebars, projector lamps, LED tail lights and fat tubeless tyres make it technologically superior to the Karizma. And the Bajaj is easier to ride fast on our roads as well. It has a responsive engine, good brakes and is stable around corners. It rides well too, though the Karizma matches it on this count.Though the Karizma is in dire need of a comprehensive upgrade, it is still the dependable and solid package as ever.However, If you have always wanted a Karizma, and have been a fan of the brand we suggest you go with Hero Honda. AFTER FURTHER THOUGHT,WE DECIDED TO MATCH THEM UP WITH ONE MORE COMPETITOR,THE YAMAHA R15

Comparing the Three Beasts: R15, ZMR, & P220 Power: The R15 is powered by a 149cc Liquid-cooled engine, first of its kind in India, throwing 17PS at 8500 rpm and 15 nm torque at 7500 rpm, whereas ZMR, on the other hand, powered by a relaxed 225cc oil-cooled engine, which does a best of 17.6ps at 7000 rpm and a whooping 18.35 nm torque at 6000 rpm, and even after stretching the bike for long, engine remains calm unlike a Pulsar 220, which even after being an oil-cooled bike is somehow not the worth because even after riding it for short duration you can hear the noises coming out from the engine block.

However, the engine gives an output of 21.04 ps with 19.12 nm torque at a lesser rpm of 7000, so it’s totally possible to outperform any competitor whether you are in 2nd gear or 5th gear with a Bajaj Pulsar 220cc.

If we compare the six speed transmission in Yamaha R15, it does its job perfectly, so there is a kind of back to back fight b/w these two, and with a good rider, a Bajaj Pulsar 220cc can do miracles but still it’s always advisable to go for the higher power because when you carry a pillion with you, you need to have that extra punch right in your hand, which is surely available on the Pulsar 220cc and Karizma ZMR . Above all not to forget, it never matters  what you drive, what matters more is how you drive!

Brakes It’s always advisable to have the power in control, because power without control is somewhat a huge problem for both you and others, so Karizma ZMR does it with great ease: the dual disc brake are more than enough to control it, and this is some what I myself experienced. I was able to stop the bike at 95km/hr within a distance of 4 feet and then too it was totally in control – no skidding or falling. The Karizma ZMR comes with the largest disc in the class with a 276mm disc in front and 240mm disc in rear, which score way over the single caliper discs in Yamaha R15; whereas the Pulsar 220cc flaunts a 260mm disc in front and a 230 mm disc in the back smaller than the zmr but still very effective.

Tyres The Pulsar 220cc comes with size 17 tyres with specifications: Front – 90/90 Rear -120/80 The Karizma ZMR comes with size 18 tyres with specifications:

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Front – 100/80 Rear – 100/90  And the Yamaha R15 comes with size 17 tyres with specifications: 

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Front – 80/90 Rear- 100/80  Which means that Karizma ZMR clearly gives u a comfortable ride in the hardest rock and gravel by easily flying over the deepest potholes, while the widest and softest compound tires on the Pulsar 220 gives you grip to grab the road with ease. 

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Performance

 With a suitable rider on the bike R15 and can easily outperform the ZMR, thanks to the six speed transmission, which helps the R15 to extract even the last breath left in the engine and shoot it way across the exhaust, but yes if you are racing in city traffic, dude believe me Karizma ZMR can be way to excellent with the superior balance it maintains, which helps  you cut through the traffic as a piece of cake. Moreover the way ZMR handles the lower and middle revs are way over excellent, but yes  just make sure that you keep the rear view mirrors closed or else you would end stucking  yourself badly. As far as Pulsar 220cc is considered its really risky to bend it way beyond the limit because the sitting position is too compact making it hard to tilt in traffic but on highways, its a free bird so fly as fast as you can.

Mileage Though the Yamaha people promise a mileage of 40-45 for R15, giving the excuse that it has way to small tyres for the same reason but brother believe me don’t expect that much  but yes it would surely deliver a mileage of 30-35, whereas ZMR Fi technology helps the  bike to use the last available drop of fuel to its fullest and deliver a mileage of 4045km/ltr. Talking about Pulsar 220cc the 32mm U cal UCD 32 Venturi Carburetor – largest ever used in Indian market, may provide a mileage up to 35-40 km/ltr and all these figures can entirely vary depending on the way you ride.

Comfort  You don’t need to bend on each and every cut you make on the Karizma ZMR, which is a necessary scenario in case of Yamaha R15 and you need to bend yourself so much t hat, even if u are just 19 or 20 you would soon be facing back trouble and no genuine rider would  want that. On the other hand you just have to be on the Karizma ZMR and rest is a child’s play, the gear shifting is somewhat too hard in the beginning in the Karizma ZMR but believe me once u ride it for 2000 km it would be resolved. The Pulsar 220cc on the other hand is really hard to steer and with foot pegs coming in your  way its kind of a riskier thing, because its less stable once its steered into corners and you really need muscle power to make it cut short of corners.

Consoles

The Karizma ZMR comes with a more sophisticated console which surely makes you feels as if you are carrying a totally different gadget.

The console comes with a digital clock, a personalized message in which you can feed your name, an average meter which calculate the average according to your previous 10 sec driving, dual trip meters, a digital tachometer, a digital speedometer and a digital fuel indicator.  Whereas in an R15 u get the digital speedometer with dial tachometer two trip meters and fuel indicator, so its a quite big benefit to go for the Karizma ZMR since boys always like to have the most advanced gadgets. However as far as Pulsar 220 is considered the console is not at all reliable with the fuel meter which never gives you the right quantity and speedometer which after sometime develops a problem of showing wrong figures. So I just suggest you to prepare yourself to soon ride on your own senses on a Pulsar, however the black ring beneath the tachometer looks great in P220 representing a symbol of  black edition.

Head Lamps & Tail Lamps The outstanding design which Hero Honda tried on Karizma’s tail, do work good and you can always find people moving on your trails just to catch a close glimpse of the leds, which somehow is not offered on a Yamaha R15 and the leds are way more trust able than the old  bulbs since they last for longer duration.

FINAL VERDICT

 Well, the Pulsar 220cc is a great bike if you are a planning to change the  bike in next 2yrs, it doesn’t offer a long run commitment whereas the Karizma ZMR not only offers the extended promise but also the resale value of Hero Honda product is way over the Bajaj and paying an amount over a lakh for a 150 cc engine does not sound good to me because even if its a  Yamaha its not worth that price. All in all, If it’s a good stable bike you’re

looking for we would say go for the Hero Honda Karizma ZMR.

Brand Name

Hero Honda(Hero MotoCorp) Karizma

Logo

Parent Company

Hero Honda

Category 

Motorcycles

Sector 

Two-wheeler

Tagline/ Slogan

Always game; Desh ki dhadkan

USP

A unique design and powerful engine

STP

Segment

Young boys looking for fast sporty bikes for Indian roads

Target Group

Young boys in the age 18-30 middle class

Positioning

For bikers who are always ready for action

SWOT

1. Excellent brand name Strength

2.High product quality

1. Low on mileage Weakness

2. High Price

1. Expansion in rural and tier-2 cities 2. Cost management thus reducing the price of the bike Opportunity

3. Developmental changes thus reducing bike's weight

1. New entrants 2. Competitors Threats

3. Low cost bikes

Competition

1.Pulsar Competitors

2.CBZ

All in all the hero Honda class of bikes did have a few rough turns here and there but came out on top.People to this day continue to be loyal towards the brand and don’t

hesitate before purchasing a Hero Honda Motor Cycle whether it be pricey or a second hand model. We did a comparison of Hero Honda with two other models and are glad to say even with the competition being rough and gritty, Hero Honda stayed true to its words and prevailed to be the “Desh Ki Dhadkan”