The new Hero on the block

One of India’s most reputed brands, Hero Honda, is undergoing major restructuring and re-branding, following the recent split between Hero Group and Honda Motors. Hero Moto Corp. has emerged as the new corporate identity.

Hero Moto Corp. is by far the leading two-wheeler brand in the Indian market. With 57% market share, it sells more two-wheelers than its next three (biggest) competitors put together. That might seem like a comfortable position to be in but the split with Honda marks a critical phase in Hero’s evolution.

Hero Honda adverts of the 1980s with the infamous tag line, “fill it - shut it - forget it,” clearly emphasised the fuel efficiency of its two wheelers. Price was the most important influencer for the Indian consumer at the time. With the exponentially increasing middle-class segment and the rising spending power of the Indian consumer today, price still has a major impact on decision-making but expectations of quality and service have also reached new highs. Indians now have a much larger appetite, which is why the country is attracting investors from all parts of the globe. Today, the average Indian household is more educated, culturally aware, financial stable and hungry to succeed.

At a time like this, it will come down to how Hero Moto Corp. positions itself, interacts with its customers and continues extending new and differentiated products and services to maintain or increase its market leadership. The split with Honda Motors thus becomes all the more sensitive – the decision will spark both a risk and a tremendous opportunity.

Honda Motors was responsible for the technology in the bikes of Hero Honda. The risk of the recent split lies in losing a veteran in motor-bike technology that enjoyed an amicable relationship with the Hero Group and presumably followed the rigorous Japanese manufacturing techniques of Kaizen, Kanban, lean manufacturing and others. These techniques, however, are now so popular the world over that they have not only been adopted by several other manufacturing houses but also made their way into case studies at various business schools.

The opportunities that Hero faces are many. The split gives Hero a chance to forge partnerships with various other technology houses. Having more than one technology partner would increase Hero’s negotiating power; then again, having minimal partners would have a favourable impact on cost. Acquiring a technology house, however, would give Hero the opportunity to manage end to end production.

The tie-up with Honda had in fact tied down the Hero Group as it could not venture into overseas markets. The split thus provides a tremendous opportunity to extend its low-cost models to overseas customers. Understandably, Hero has announced to increase its revenue from international markets to $1B or 10% from (2%).

Hero Moto Corp. was recently in the news for having spent Rs. 100 crores on developing its new ad campaign.

Click to view Hero Moto Corp.'s Official Ad

The “hum mein hai hero” song composed by the Oscar-winner A.R.Rahman for the campaign was an instant hit with viewers, as it had a tremendous ‘feel good’ factor about it. It is a great example of good advertising as the ad speaks more to the people about ‘belief’ than about the product or the company. That is the very feeling that Hero is looking to ignite not only within its customers but also within its staff – the spirit that promises upholding leadership and quality despite drastic changes that it is going through. In the first half of the ad, a child artist is shown typing “I want to do it” on his phone. That is the only text that has been focussed on in the ad which again conveys the message of self-belief. The ad, through footage, lyrics and a catchy tune, brilliantly showcases that Hero is a true patriot at heart, that it never gets bogged down by hurdles or circumstances, that it believes in itself, that it summons inspiration from others, that it conquers fear, that it excels, that it believes in itself and that it believes in you.

At this critical juncture, the theme of the ad was always going to be crucial. Hero hit the nail in the head with its new ad. I believe that the message was loud and clear and conveyed effectively. What I liked particularly was that no Bollywood star or Cricketer was used to hard sell the new brand. Rahman was shown a few times, however, he was shown singing the line ‘hum mein hai hero’ to us. The advert exhibits a lot of self-belief on Hero’s part and gives the brand a very honest and transparent feel. These subtleties are crucial in advertising which even reputed organisations mismanage or miscommunicate at times.

Hero Moto Corp. has taken a very confident step in the right direction towards building its brand equity. Hereon, the partnerships that will be forged, the products that will be launched and the messages and interactions that follow will determine the future of Hero Moto Corp.