No I am not referring to any scientific cycle over here, it’s the same two wheels, which we loved to ride when we were young. Here in India its the first love of most of the kids and this doesn’t stop here for rural India it is the integral part of personal transport system, its the supply chain vehicle for Milk-Men in our country, the post-men spend their lives with this magnificent piece of work (for the record, Indian Postal System records one of the highest names in accuracy).
Do you remember the brand? I can bet 9 out of 10 people reading this would jump out with the name "HERO".
Yes, the very "HERO" brand of this country, which brought in the motorbikes with a storm and overtook the market.
Wait a minute from Bi-Cycles to Motorbikes isn’t it moving away from the core? Isn’t that been registered as the most dangerous move that an organization can make?
Well, yes it is. "Hero" did move from the core to shift to an adjacency.
One of the most vital reasons for their success is the bicycle market that they had created for themselves. It created the strongest "footprint" in the core of the market, the heart of the Indian consumer.
* Strong customer loyalty and brand respect will help you move from the core.
India has grown to a level that a motorbike is affordable to a generous number of people in rural India. Still, Hero didn’t dump their bicycle business, not for the reason of sentiments but for the fact that it is one product that will sell across the wide spectrum of customers spanning from farmers to professionals, from students to shopkeepers. Hero has been successful in coming up with great variants of bicycles at the right times to cater the need of all the consumers so far.
* Effective Market Segmentation and Market Surveys will help you cater a larger audience to your product and will ensure the ROI you are looking at.
Go around the city or a town or a nor very rural area of the country the chance that you will find a Hero Dealer is 100% and the chance that you find a Hero Honda dealer is pretty decent too. They have been successful in creating a vast and reliable dealer network , reaching far and creating a greater respect for the brand.
* If you know the target audience you have to build your brand carefully around them. Make sure your channels to reach the customers are not just wide spread but strategically spread.
Hero Honda were phenomenal in past few decades when it brought in bikes ( they have a tough competition in the market now...but still they where the "First to Market" people ). With initial models doing great in market they moved to upper segment bringing in urban class bikes, which were doing well till Bajaj entered the market with the greatest card of all " Fuel Efficiency ". This is when they started working with Honda their Japanese partners to get in fuel-efficient bikes...
* You will definitely reap the benefits of being "First to Market" since you have set a standard, captured the customers, but this stays only till someone else doesn’t come in to raise the bar. If its not you, who is raising it, then you have a tough competition to catch up with. So investment in R&D guided with the appropriate Marketing inputs focused on what in future will the customer demand and a watchful eye on competition will keep you above the water.
Few takeaways from a discussion I had with one of my mentors:
ReplyDelete"Honda was clever to invest in the right segment which Hero didnt realize. The need was in scotterte segment, and the bike market is dimnishing with advent of cars like Nano. Segmentation is important but targeting and positioning is where Hero Honda missed out over Pulsar from Bajaj who smartly positioned it to get the young crowd. Splendor though from Hero Honda would anyday be a choice for some of the mature customers.
The shift was not from the core, Their core is to provide mode of transportation to "individual family", not public or any other kind of transport, so logically they expanded into faster mode of transportation, moving up the value chain.
Hero always targetted, Lower class, Lower Middle Class & Middle Middle class, even with the expansion, they kept cycle for Lower class, and bikes for lower middle class and middle middle class, which is smart strategy as this class is the biggest consumer base in the world.
Positioning of Hero Honda was as Quality & Fuel effecient bike. Brand recall was enforced by strategic tie up of Japanese firm, which Indians perceive very high on quality.This argument can be supported by the fact LML failed, tie up with Italian company which is perceived to be good in design not quality, so the move was encash on current brand, Build quality perception & technical support with help of international firm.
The forecasting is not done on basis what customer will demand, we have advanced so much that basics of customer are done, we have addressed tangible needs but for intangibles, these company need to think of an idea, for example in two wheeler, the recent innovation is having supporting wheels for scotty like kid's bi cycle. I think the key here is Innovation in tune with market , not futuristic not past related innovation but innovation for current scenario and short term