Hero Honda has been the largest manufacturer of two–wheelers since a decade. With a market share of 60% in motorcycles and 43% in two – wheelers, Hero Honda has been the leader by far. But then as they say everything isn’t always hunky – dory, Honda recently sold off its stake of 26% in the Hero Group because of problems which have not really come out in open. So, basically their 25 year old successful association has culminated in a sad divorce.
How will this affect the Hero Group?
This divorce would affect the Hero Group at three different levels: –
Hero Honda has built its massive customer base because it is HERO HONDA! The fact that there wouldn’t be any Honda after 2014 (the time till which they can use the Honda name) has excited the competitors. A decade of leadership hasn’t really given the competitors an opportunity to do something special. Because something special for them is fantastic for Hero Honda! The name is what attracts people to Hero Honda because it is associated with trust and quality.
But then communication too is important for the “top of the mind” recall for customers, isn’t it? The “Fill it – Shut it – Forget it” as well as “Desh Ki Dhadkan” campaigns of Hero Honda are probably some of the most famous ad campaigns in the country. With Hero breaking up from Honda, the Hero Group would have to come up with an entire new communication strategy. The branding campaign would have to be completely changed because people wouldn’t be able to associate with the Hero Group so readily.
And this is the reason they have asked JWT to help them. Their plans include using a branding strategy for motorcycles even though they are present in the bicycles segment as well. The most important thing they need is “reinforcement of the brand” and smooth transition from being “Hero Honda” to just “Hero”.
The ones who are grinning from ear to ear at this divorce are Hero Honda’s competitors. Launching of new products, poaching their employees and dealers as well as greater spending on R & D – Hero Honda’s competitors are licking their lips.
Some positives for Hero as well
Having said that, it may turn out to be a great positive for Hero group, if they are able to do the brand play well. With their break-off with Honda, they are now free to expand on to foreign shores, which was not possible for them till now due to Honda’s presence in those countries.
Only time will tell how successful Hero will be going forward – Its time to wait watch! Whats your take!