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2. Executive segment
3. Premium segment
PRICING
Sr.no 1 2 3 Brand name CD DAWN 97.2 cc CD DELUXE 97.2 cc Splendor + 97.2 cc 42,137.00 45,135.00 48,708.00 42,916.00 8 9 10 11 12 Glamour CBZ Xtreme 149.2 cc Hunk 149.2 cc Karizma 223 CC Karizma ZMR 223 CC 1,00,200.00 83,193.00 65,253.00 64,553.00 124 cc 53,700.00 38,806.00 36,179.00 Category Price(INR)
5
6 7
Splendor Nxg
97.2 cc Passion Pro 97.2 cc Pleasure 102 cc
Pricing Strategy
The pricing strategy was based on the brand positioning of HERO MOTOCORP. in the automobile industry as shown in the above BCG matrix.
Price Sensitivity
Step 2: Determining the demand : Due to the presence of many bikes in the same price range the elasticity of demand was very high. Hence with the decrease of prices, the amount of sales increased in volume.
Step 3: Estimating Cost : In the short run companys pricing strategy was to earn more profit and in the long run to invest that money for the technological advancement Step 4: Analyzing competitors cost, prices and offers : From the mistakes of Bajaj Pulsar, Hero Honda CBZ was able to take share away from the market pioneer of power bikes in India, and command the price premium in the process because of its performances advantages-smoother driving experience. Step 5: Selecting a pricing method : Hero MotoCorp did a mix of pricing methodology of Going Rate Pricing and Value Pricing. Step 6: Selecting the Final Price : While selecting the final price, Hero MotoCorp did set its price lower than its competitor to share the risk of launching a new product in the market.
Promotional Pricing: Special event prices were offered during festival seasons Zero interest financing was offered for some speculated period to attract customer Longer payment terms were provided to the customer so that the EMI would be less Three free service contracts were offered at the time of purchase. Differentiated Pricing: Market Research was done to differentiate among different income groups and their demand for Hero of different versions.
From the above data, Hero has introduced different versions of their bikes to meet different customer verticals and provide customer-segment pricing.
2% 2% 13%
Hero
Bajaj Auto 12% 53% TVS Motors HMSI (Honda) Yamaha Others 18%