You are on page 1of 96

PROJECT REPORT

ON

STUDY OF MARKETING STRATEGIES


OF

MARUTI UDYOG LIMTED

SUBMITTED IN PARTIAL FULFILLMENT

FOR THE DEGREE OF MASTERS OF BUSINESS ADMINISTRATION


(2007-2009)

SUBMITTED TO : SUBMITTED BY:

MR. GAURAV SATIJA ANKUSH NATHOO

(LECTURER ) ROLL NO: 3

MBA- IV Semester

KAMRAH INSTITUTE OF INFORMATION AND TECHNOLOGY


AFFILIATED TO MAHARISHI DAYANAND UNIVERSITY
ACKNOWLEDGEMENTS

I owe my sincere thanks and gratitude to MS who inspired me by his


able guidance and was a constant guiding light during the course of
project study.

The support and knowledge provided by him has been a great


value addition for me and will go a long way in building a
promising career.

Last but not least, I am also thankful to all the respondents of my


survey without whom the project would not have been completed
successfully.

(ANKUSH NATHOO)
INDEX

 INTRODUCTION OF THE COMPANY

 OBJECTIVE OF THE COMPANY

 RESEARCH METHODOLOGY

 LIMITATIONS

 CONCLUSION

 BIBILIOGRAPHY
INTRODUCTION OF THE COMAPANY

MARUTI UDYOG LIMITED

Maruti is India's largest automobile company. The company, a joint venture with
Suzuki of Japan, has been a success story like no other in the annals of the Indian
automobile industry.

Today, Maruti is India's largest automobile company. This feat was achieved by the
missionary zeal of our employees across the line and the far-sighted vision of our
management.

The Company Mission:

To provide a wide range of modern, high quality fuel efficient vehicles in order to
meet the need of different customers, both in domestic and export markets.

The Company Vision:

We must be an internationally competitive company in terms of our products and


services. We must retain our leadership in India and should also aspire to be among
the global players.

Their focus is on:

• Building a continuously improving organisation adaptable to quick changes

• Providing value and satisfaction to the customer

• Aligning and fully involving all our employees, suppliers and dealers to face
competition

• Maximising Shareholder's value

• Being a responsible corporate citizen

At Maruti, they have a clear perspective on manpower. They see it as a unique


resource, in the sense that optimal productivity of other resources depends largely on
the way human resources are utilised. The basic philosophy of management that
underlies the Maruti culture is that all employees of the company should be moulded
into a team which then strives as one, to achieve commonly shared company goals
and objectives. To make this philosophy tenable, the Company takes several
initiatives. Inputs are sought from employees at all levels. They believe that
everyone should contribute to the formulation of company policies, goals and
objectives. Secondly, at Maruti, they encourage leadership in the best sense of the
word. According to us, a leader is one who must be impartial, must have the ability
to rise above his own subjectivity, and, most importantly, must practice what he
preaches.

They understand that the process of creating a sense of belonging that all employees
can identify with is a lengthy one. To ensure that this translates into concrete reality,
they have taken several simple but specific and well thought out measures. The first
step in this direction has been the introduction of a common uniform for all
employees. Another measure is the creation of a common canteen where all
employees have lunch, stand in common queues, and sit on the same table. Common
toilets, common transport and similar facilities for all levels of employees are other
measures that reinforce their emphasis on genuine equality in the workplace.

At Maruti They do not believe in the notion of organisational hierarchies. As a


matter of fact, the management structure and systems in Maruti have been designed
to promote decentralisation of authority. Maruti has a horizontal management
structure with only four functional levels of responsibility to facilitate quicker
decision making.

Another focus area of the Maruti culture is the maintenance of a smoothly


functioning communication network. Maruti believes that communication channels
between labour and management cannot simply consist of having a labour
representative on the Board of the Company. They have faith in the ability of labour
to effectively participate in management and make constructive suggestions. To
encourage this, they ensure that there is a thorough dissemination of information at
all levels, through newsletters or via a letter from the Chief Executive to all
employees. Meetings with the Union are held regularly, and programmes being
contemplated by the Company are discussed with the Union. The Sahyog Samiti, a
collection of representatives of non-unionised employees, training programmes in
Japan, Quality Circles, productivity-linked incentive schemes, and an ethos of
discipline and teamwork, all contribute to the Maruti culture.

Several measures of performance have made amply clear that Maruti has established
a truly healthy work culture. They have met all project and performance targets
since inception. Their productivity levels are constantly improving. The Company
has had good labour relations with employees from the very beginning, and they
have been successful in the export market. Yet, the Maruti culture is one that does
not believe in resting on its laurels. They adhere to the spirit of Kaizen, which states
that constant improvement is always possible. The most basic tenet of productivity
that they hold dear is that " Today should be better than Yesterday and Tomorrow
should be better than Today".

Maruti Udyog Limited (MUL) was established in Feb 1981 through an Act of
Parliament, to meet the growing demand of a personal mode of transport caused by
the lack of an efficient public transport system.

Suzuki Motor Company was chosen from seven prospective partners worldwide.
This was due not only to their undisputed leadership in small cars but also to their
commitment to actively bring to MUL contemporary technology and Japanese
management practices (which had catapulted Japan over USA to the status of the top
auto manufacturing country in the world).

A licence and a Joint Venture agreement was signed between Government of India
and Suzuki Motor Company (now Suzuki Motor Corporation of Japan) in Oct 1982.

The objectives of MUL then were:

• Modernization of the Indian Automobile Industry.

• Production of fuel-efficient vehicles to conserve scarce resources.

• Production of large number of motor vehicles, which was necessary for


economic growth.

Core Value

• Customer Obsession
• Fast, Flexible and First Mover

• Innovation and Creativity

• Networking and Partnership

• Openness and Learning

Vision

The leader in the India Automobile Industry, Creating Customer Delight and
Shareholder’s Wealth; A pride of India”

Technological Advantage

We have introduced the superior 16 * 4 Hypertech engines across the entire Maruti
Suzuki range. This new technology harnesses the power of a brainy 16-bit computer
to a fuel-efficient 4-valve engine to create optimum engine delivery. This means
every Maruti Suzuki owner gets the ideal combination of power and performance
from his car.

Our other innovation has been the introduction of Electronic Power Steering (EPS)
in select models. This results in better and greater maneuverability. In other words,
our cars have become even more pleasurable to drive.

Production/R&D

Spread over a sprawling 297 acres with 3 fully-integrated production facilities, the
Maruti Udyog Plant has already rolled out over 4.3 million vehicles. In fact, on an
average, two vehicles roll out of the factory every minute. And it takes on an
average, just 14 hours to make a car. More importantly, with an incredible range of
11 models available in 50 variants, there's a Maruti Suzuki made here to fit every
car-buyer's budget. And dream.

Production Milestones

1st vehicle produced, December 1983

1,00,000 vehicles produced by August, 1986

5,00,000 vehicles produced by June, 1990


10,00,000 vehicles produced by March, 1994

15,00,000 vehicles produced by April, 1996

20,00,000 vehicles produced by October, 1997

25,00,000 vehicles produced by March, 1999

30,00,000 vehicles produced by June, 2000

35,00,000 vehicles produced by December 2001

40,00,000 vehicles produced by April, 2003

45,00,000 vehicles produced by April, 2004

AWARDS

2005
Number one in JD Power SSI for the second consecutive year
Number one in JD Power CSI for the sixth time in a row - the only
car to win
it so many times
M800, WagonR and Swift topped their segments in the TNS Total
Customer Satisfaction Study
Leadership in the JD Power Initial Quality Study - Alto number one
in its
segment for the 2nd time in a row, Esteem number one in its
segment for
the 3rd year in a row, Swift number one in the premium compact
segment
WagonR and Esteem top their segments in the JD Power APEAL
study
TNS ranks Maruti 4th in the Corporate Reputation Strength (CSR)
study
(#1 in Auto sector)-Feb 05
Maruti bagged the "Manufacturer of the year" award from Autocar-
CNBC
( 2nd time in a row)-Feb 05
First Indian car manufacturer to reach 5 million vehicles sales
Business World ranks Maruti among top five most respected
companies in
India-Oct 04
Maruti ranked among top ten (Rank7) greenest companies in India
by
Business Today - Sep '04

2004
Maruti Suzuki was No. 1 in Customer atisfaction, No. 1 in Sales
Satisfaction No.1 in Product Quality (Esteem and Alto) and No. 1
in Product Appeal (Esteem and Wagon R)
No. 1 in Total Customer Satisfaction (Maruti 800, Zen and Alto)
Business World ranked us among the country's five most respected
companies
Business World ranked us the country's most respected automobile
company
Voted Manufacturer of the year by CNBC
Voted one of India's Greenest Companies by Business Today-AC
Nielson ORG-MARG

2003
Maruti 800, Maruti Zen and Maruti Esteem make it to the top 10
automotive brands in "Most Trusted Brand survey 2003"
J D Power ranked 3 models of Maruti on top: Wagonr, Zen and
Esteem
Maruti 800 and Wagonr top in NFO Total Customer Satisfaction
Study 2003.
MUL tops in J D Power CSI (2001) for 4th time in a row

2001
MUL tops in J D Power CSI (2001) for 2nd time in a row: another
international first

2000
Maruti bags JD Power CSI - 1st rank; unique achievement by
market leader anywhere in the world

1999
MSM launched as model workshop in India; achieves highest CSI
rating.
Central Board of Excise & Customs awards Maruti with "Samman
Patra", for contribution to exchequer and being an ideal tax
assessee

1998
CII's Business Excellence Award

1996
Maruti wins INSSAN award for "Excellence in Suggestion
Scheme"
Awarded the Star Trading House status by Ministry of Commerce

1994-95
Engineering Exports Promotion Council's award for export
performance

1994
Best Canteen award among Haryana Industries as part of employee
welfare

1992-93
Engineering Exports Promotion Council's award for export
performance

1991-92
Engineering Exports Promotion Council's award for export
performance
WHY MARUTI SUZUKI

The Quality Advantage

A car is an engineering product, only as good as the technology used to make


it. Actual users of our technology are saying something very clearly Maruti
Suzuki is No.1 in quality:

Maruti Suzuki owners experience fewer problems with their vehicles than any other
can manufacturer in India (J.D. Power IQS Study 2004). The Alto was chosen No.1
in the premium compact car segment and the Esteem in the entry level mid-size car
segment across 9 parameters.

The J.D. Power APEAL Study 2004 proclaimed the Wagon R. No. 1 in the
premium compact car segment and the Esteem No.1 in the entry level mid-
size car segment. This study measures owner delight in terms of design,
content, layout and performance of vehicles across 8 parameters.

Maruti Suzuki has a sales network of 307 state-of-the-art showrooms across


189 cities*, with a workforce of over 6000 trained sales personnel to guide
our customers in finding the right car. Our high sales and customer care
standards led us to achieve the No.1 nameplate in the J.D. Power SSI study
2004. The SSI study measures sales satisfaction across 6 parameters: deal
received, paperwork, dealer facility, salesperson, delivery timing and delivery
process. Maruti Suzuki has not only got the No.1 nameplate in the J.D. Power
SSI study 2004, but also ranked way above the industry average (Maruti
Suzuki was at 784 while industry average was at 760). What is significant is
that it was ranked above Skoda, Ford, Chevrolet, Mitsubishi and Hyundai.

To be really happy with the car you own, it should have a reliable service
network at hand and within easy reach. Their 1036 city strong service
network is equipped to service 20,000 vehicles a day. No wonder Maruti
Suzuki has been awarded the No.1 nameplate in customer satisfaction in India
for the fifth year in a row, a feat unprecedented for any automobile market
leader in the world.
In the J.D. Power CSI study 2004, Maruti Suzuki scored the highest across all
7 parameters: least problems experienced with vehicle serviced, highest
service quality, best in-service experience, best service delivery, best in-
service experience, most user-friendly service and best service initiation
experience.

In fact, 92% of Maruti Suzuki owners feel that work gets done right the first time
during service. The J.D. Power CSI study 2004 also reveals that 97% of Maruti
Suzuki owners would probable recommend the same make of vehicle, while 90%
owners would probable repurchase the same make of vehicle.

A Buying Experience Like No Other

Maruti Suzuki has a sales network of 307 state-of -the-art showrooms across 189
cities, with a workforce of over 6000 trained sales personnel to guide our customers
in finding the right car. Our high sales and customer care standards led us to achieve
the No.1 nameplate in the J.D. Power SSI Study 2004.

Quality Service Across 1036 Cities

In the J.D. Power CSI Study 2004, Maruti Suzuki scored the highest across all 7
parameters: least problems experienced with vehicle serviced, highest service
quality, best in-service experience, best service delivery, best service advisor
experience, most user-friendly service and best service initiation experience.

92% of Maruti Suzuki owners feel that work gets done right the first time during
service. The J.D. Power CSI study 2004 also reveals that 97% of Maruti Suzuki
owners would probably recommend the same make of vehicle, while 90% owners
would probably repurchase the same make of vehicle.

One Stop Shop

At Maruti Suzuki, you will find all your car related needs met under one roof.
Whether it is easy finance, insurance, fleet management services, exchange- Maruti
Suzuki is set to provide a single-window solution for all your car related needs.

The Low Cost Maintenance Advantage


The acquisition cost is unfortunately not the only cost you face when buying a
car. Although a car may be affordable to buy, it may not necessarily be
affordable to maintain, as some of its regularly used spare parts may be priced
quite steeply. Not so in the case of a Maruti Suzuki. It is in the economy
segment that the affordability of spares is most competitive, and it is here
where Maruti Suzuki shines. The recent Auto car Survey conducted in August
2004 bears testimony to this fact. In the Maruti Suzuki stable, the Omni has
the lowest aggregate cost of spares followed by the Maruti-800. The Maruti-
800 has the cheapest spares of any Indian car with a basket of just Rs. 23,422.
In the Lower Mid-size segment as well, price-consciousness is very high,
where the cars have to be not only affordable on purchase price but also need
to combine quality, drivability and have comfortable interiors. In this
segment, the Maruti Suzuki Versa has scored particularly well with the lowest
cost of spares in the segment. In the Upper Mid-size segment, the Maruti
Suzuki Baleno has the segment's lowest prices on a majority of the spares.

Lowest Cost of Ownership

To be really happy with the car one owns, it should be easy on the pocket to
buy and to run-which is why the cost of ownership is so important. And here
again, a Maruti Suzuki is a clear winner, as shown by the recent J.D.Power
CSI study 2004. It is clear that a Maruti Suzuki delights you even when you
run it for years. The 6 highest satisfaction ratings with regard to cost of
ownership among all models are all Maruti Suzuki vehicles: Zen, Wagon R,
Esteem, Maruti 800, Alto and Omni. They are proud to have the lowest cost of
operation / km (among petrol vehicles) - the top 5 models are all Maruti
Suzuki models: Maruti 800, Alto, Zen, Omni and Wagon R.

Employee Quality Measures

Kaizen is based on the concept of making incremental improvements in our


products. It incorporates a series of continuous small and simple improvements,
which aim at involving employees at all levels.
The Suggestion Scheme is based on the same principle. Under this scheme,
employees are encouraged to make suggestions for improvement in any area of our
operation. Over 50,000 suggestions are received from employees every year.

Maruti has won the First place in "Excellence in Suggestion Scheme Contest
2003", which is the 6th consecutive award won in as many years. This contest is
organized by Indian National Suggestion Schemes Association (INSSAN). Since
1998 Maruti has won this award 10 times.

"Quality Circles" are groups of five to eight members from a particular work area
who work as a team to identify priorities and solve work related problems in the
area.

We believe that it is this unwavering commitment to quality that will lead to the
further growth of the organization as competition increases.

ISO 9001:2000

At Maruti, our approach to quality is in keeping with the Japanese practice--"build it


into the product". Technicians themselves inspect the quality of work. Supervisors
educate and instruct technicians to continually improve productivity and quality. The
movement of quality indicators is reviewed in weekly meetings by the top
management.

In 2001, Maruti Udyog Ltd became one of the first automobile companies
anywhere in the world to get an ISO 9000:2000 certification. AV Belgium, global
auditors for International Organization for Standardisation(ISO), certified Maruti
after a four day long audit, covering varied parameters like Customer Focussed
organisation, Leadership, Involvement of people, Process approach, System
approach to Management, Continual improvement, etc.
In May 1995, Maruti got ISO 9002 certification. The audit for this covered
quality assurance in production, installation, marketing and sales as well as after
sales services. We were also one of the first companies in the world to pioneer ISO
9000 certification for our dealers.

In October 1993, MUL passed the Conformity Of Production (COP) Audit,


which is based on a European Union Directive. This authenticated our quality
systems and testing facilities for export to Europe.

Their emphasis on total quality has meant that today they are in a position to guide
vendors and dealers in establishing and consolidating their individual quality
systems. This commitment to quality has ensured a consistently satisfying product
and world-class sales and after-sales services.

TS16949:2002 - A new feather was added recently in Maruti’s cap in the


field of quality when the Quality Management System of its Press Shop &
associated functions (collectively termed as Press Function) got certification for
conformance to the requirements of TS16949:2002 standard.

The need for TS certification of Press Function had its genesis in the prestigious
project that Maruti earned for the supply of stamped panels to General Motors India
for one of its forthcoming models.

As a part of Quality system requirements, GM requires all its suppliers to be


certified to either ISO TS 16949 or QS 9000.

These standards address Quality System requirements, which are particularly


specific to the automotive industry and requires an organization to be in compliance
with ISO 9000 systems as a basic requirement. However, whereas QS 9000 would
become defunct and cease to exist after Dec 2006, TS 16949 is going to be the
standard of the future.

The TS 16949 standard, brought out by ISO in the year 1999, is an extension of the
ISO 9001:2000 standard that prescribes Quality management system requirements
that are specifically applicable to the automotive industry.

TS 16949 has gained high popularity and almost all major automobile players across
the globe including GM, Ford, Daimler Chrysler, Nissan, Honda are embracing &
promoting it.
ISO 9001:2000

THEORITICAL PERSPECTIVE

Consumer is strictly, the ultimate consumer of a product, the ultimate user of a


product; the person who derives the satisfaction or the benefit offered. The
'consumer' is not necessarily the customer, since there are often 'customers' in the
buying/ distribution chain; moreover, the consumer is frequently not the person who
makes the buying decision; for instance, in the case of many household products,
where the housewife may make the purchase but consumption or use is by the whole
family. 'Consumer' is not normally applied to the purchase of industrial goods and
services where the customer is usually a corporate body. Nevertheless, consumable
goods are sold to industry for corporate purposes and the consumers of these goods
can be identified for marketing practice.

Consumer behavior is the study of buying habits or patterns of behaviour of

consuming public either in general or in specific groups.

THE BUYING PROCESS


The complexity inherent in understanding consumer behaviour has led to the
construction of models of the buying process which indicate the stages
through which the consumer passes from the time he or she first becomes
aware of a need for a product or service to the time when a product is
purchased, a brand selected, and the consumer evaluates the success of his
purchase decides whether to buy that particular product and / or brand again.
It the same time, such models usually indicate the social and psychological
forces which shape the potential buyer's action at each stage in the process.
The two principal aims of such model building are the prediction of future
behavior based on measurement of relevant variable and the explanation of
this behavior in terms of theoretically relevant constructs.
The starting point for understanding the buyer is the stimulus-response model
shown below

Marketin Other Buyer's Buyer's Buyer's


g stimuli stimuli Characterist decision decisions
ics process

Product Economic Cultural Problem Product choice


recognition
Price Technologic Social Brand choice
al Information
Place Personal Dealer choice
search
Political
Promotion Psychological Purchase timing
Evaluation
Cultural
decision Purchase
amount
Post-purchase
behavior

Stages in Buying Decision Process

Need Informat Evaluation Purchas Post-

recogniti ion of e purchase


on search alternative decision behavior

The consumer passes through five stages : Problem recognition information


search, evaluation of alternatives purchase decision and post-purchase
behavior. Clearly the buying process starts long before the actual purchase
and has consequences long after the purchase.

This model implies that consumers pass through all five stages in buying a
product. But this is not the case, especially in low-involvement purchase.
Consumers may skip or rreverse some stages. Thus a woman buying her
regular brand of toothpaste goes directly from the need for toothpaste to the
purchase decision, skipping information search and evaluation. However, we
have already used the model in above, because it captures the full range of
consideration that arise when a consumer facer a highly involving new
purchase. We will allude again to Linda Brown and try to understand how she
became interested in buying a laptop computer and the try to understand how
she became interested in buying a laptop computer and stages she went
through to make her final choice.

MAJOR FACTORS INFLUENCING BUYING

BEHAVIOR

Cultural

Social

Culture Reference group Personal


Subculture Family
Age and life- Psychological
Social Class Roles and cycle stage
statuses Motivation
Occupation
Economic Perception
circumstances Learning Buyer
Lifestyle Beliefs and
Personality and attitudes
self-concept

Rogers model for the adoption and diffusion of innovations Innovation


Adoption CURVE
The innovation adoption curve of Rogers is a model that classifies adopters of innovations into
various categories, based on the idea that certain individuals are inevitably more open to adaptation than
others. Is is also referred to as Multi-Step Flow Theory or Diffusion of Innovations Theory.

Innovators

Brave people, puling the change. Innovators are very important communication.

Early Adopters

Respectable people, opinion leaders, try out new ideas, but in a careful way.

Early Majority

Thoughtful people, careful but accepting change more quickly than the average.

Late Majority

Skeptic people, will use new ideas or products only when the majority is using it.

Laggards

Traditional people, caring for the "old ways", are critical towards new ideas and will only accept it if the
new idea has become mainstream or even tradition.

The diffusion of innovations curve (innovation adoption curve) of Rogers is useful to remember that
trying to quickly and massively convince the mass of a new controversial idea is useless. It makes more
sense in these circumstances to start with convincing innovators and early adopters first. Also the
categories and percentages can be used as a first draft to estimate target groups for communication
purposes.

Diffusion research focus was on five elements: 1) the characteristics of an


innovation which may influence its adoption; 2) the decision-making process that
occurs when individuals consider adopting a new idea, product or practice; 3) the
characteristics of individuals that make them likely to adopt an innovation.
TARGET MARKETING

Target Marketing involves breaking a market into segments and then concentrating
your marketing efforts on one or a few key segments.

The beauty of target marketing is that it makes the promotion, pricing and
distribution of your products and/or services easier and more cost-effective. Target
marketing is the selection of customers you wish to service. The decisions involved
in it are

• Which segments to target


• How many products to offer
• Which products to offer in which segments

There are three steps to targeting:

• Market segmentation
• Target choice
• Product positioning

One of the first things you need to do is to refine your product or service so that you
are NOT trying to be 'all things to all people’.

Next, you need to understand that people purchase products or services for three
basic reasons:

• To satisfy basic needs.


• To solve problems.
• To make themselves feel good.

The next step in creating an effective marketing strategy is to zero in on your target
market.
Target marketing is one of corporate America's most effective business strategies.
The idea is to increase sales by first identifying, and then targeting smaller, yet more
profitable customer groups within the total market.

Four Ways to Identify Target Markets

1. Geographic: The location, size of the area, density, and climate zone
of your customers.
2. Demographics: The age, gender, income, family composition and size,
occupation, and education of your customers.
3. Psychographics: The general personality, behavior, life-style, rate of
use, repetition of need, benefits sought, and loyalty characteristics of
your customers.
4. Behaviors: The needs they seek to fulfill, the level of knowledge,
information sources, attitude, use or response to a product of your
customers.

One of the best ways to identify your target market is to look at your existing
customer base. Who are your ideal clients? What do they have in common? If you
do not have an existing customer base, or if you are targeting a completely new
audience, speculate on who they might be, based on their needs and the benefits they
will receive. Investigate competitors or similar businesses in other markets to gain
insight.

TARGET MARKETING

• Who are your best customers? Where should you direct your marketing
activities?

• Where and how should you allocate your advertising and promotional
efforts?
Target Marketing, provides Focus for your business. It helps to establish
critical Operational goals and defines what must be done to achieve them

What Customers Want

• Marketing is more than an activity, it is an attitude


• Instead of trying to get customers to buy what the firm likes to make,
or happens to have on hand, the marketing oriented firm tries to
produce or sell what its customers want which can be sold at a profit.
• Do not simply throw out everything that you now have and replace goods or
production machinery with completely new items.
• HOWEVER, AS YOU ANALYZE YOUR MARKET AND CUSTOMER
PROFILES, AND SO GAIN AN UNDERSTANDING OF THEIR
WANTS, DESIRES, AND PERCEIVED NEEDS, YOU CAN BEGIN TO
REORIENT YOUR BUSINESS OVER TIME TO TAKE BEST
ADVANTAGE OF THESE NEW INSIGHTS. CONSIDER BOTH THE
SHORT TERM AND LONG-TERM IMPLICATIONS OF
DEVELOPING AND IMPLEMENTING THE RIGHT TARGET
MARKETING STRATEGY FOR YOUR BUSINESS.

Customer Attitudes

• For a long time, people have believed that advertising can be used to change
people's minds about what they want. This is an incredibly difficult process
at best, and an extremely expensive one. Because of these two factors, it is a
process that smaller firms simply cannot afford to pursue. Instead, it is much
more productive for any size firm to tune in to target customer attitudes as
they currently exist. Once they have identified the actual prevailing attitudes,
they can begin to organize company resources needed to constructively
address and satisfy these attitudes the key question is,

"What are the existing customer attitudes?"


With this as an objective, developing an understanding of existing customer
attitudes becomes essential, and their identification becomes an important part
of the marketing process. Once these customer attitudes, needs or preferences
are identified, the entire firm can then organize itself to satisfy these needs as
completely and efficiently as possible.

Target Marketing
Comparison of Automobile And Consumer
Durable
At Dealership Level
S.No Attributes Automobile Consumer Durables
1 Turnover High Low

2 Margin 8%-12% 2%-4%

Penetration More in small or large More in Rural areas


3 Level towns or cities or in cities also

Training of Executives get Training


Sales after every specific
4 Executives period As such no training

Co->Distributor-
5 Supply-Chain Co->Dealer->Customer >Dealer >Customer

Discount Depends on Dealer


6 Margin Cartel To Dealer

Only Sales man is


there to serve the
7 CSR Proper well organized customer

Customer have to go
Customer get 3free at manufactured
8 ASS service level

Customer can
Brand Customer first choice is change his or her
9 Association more pertinent choice

More focus on
Finance &
10 Payment Instantaneous Payment Installment

Post-Sales
11 Follow UP More Very Less

Buying Customer can wait for


12 Procedure new model Instant buying

13 Database Large Few

Brand
14 Transition Single-Tier Multi-Tier
Parent Company &
dealer both give Only from Parent
15 Advertisement advertisement Company

Loyality
16 Programs Yes No

Customer
Satisfaction Well- Defined &
17 Index Organized None

18 Promotion Free Service Camps None

Customer
19 Retention More Very Less

Only free service which


customer can extend
upto 4 years(first 2yr are Annual Maintenance
20 Maintenance free) Contract (AMC)
MARUTI CULTURE

Their employees are their greatest strength and asset. It is this underlying philosophy
that has moulded their workforce into a team with common goals and objectives.
Their Employee-Management relationship is therefore characterized by:

• Participative Management.

• Team work & Kaizen.

• Communication and information sharing.

• Open office culture for easy accessibility

To implement this philosophy, they have taken several measures like a flat
organizational structure. There are only three levels of responsibilities ranging from
the Board Of Directors, Division Heads to Department Heads. Other visible features
of this philosophy are an open office, common uniforms (at all levels), and a
common canteen for all.

This structure ensures better communication and speedy decision making processes.
It also creates an environment that builds trust, transparency and a sense of
belonging amongst employees.

For Investors:

Maruti Udyog Limited, a subsidiary of Suzuki Motor Corporation of Japan, has been
the leader of the Indian car market for about two decades. Its manufacturing plant,
located some 25 km south of New Delhi in Gurgaon, has an installed capacity of
3,50,000 units per annum, with a capability to produce about half a million vehicles.

The company has a portfolio of 11 brands, including Maruti 800, Omni, premium
small car Zen, international brands Alto and WagonR, off-roader Gypsy, mid size
Esteem, luxury car Baleno, the MPV, Versa, Swift and Luxury SUV Grand Vitara
XL7.

In recent years, Maruti has made major strides towards its goal of becoming Suzuki
Motor Corporation's R and D hub for Asia. It has introduced upgraded versions of
WagonR Zen and Esteem, completely designed and styled in-house.
Maruti's contribution as the engine of growth of the Indian auto industry, indeed its
impact on the lifestyle and psyche of an entire generation of Indian middle class, is
widely acknowledged. Its emotional connect with the customer continues.

Maruti tops customer satisfaction again for sixth year in a row according to the J.D.
Power Asia Pacific 2005 India Customer Satisfaction Index (CSI) Study.

The company has also ranked highest in India Sales Satisfaction Study.

The company's quality systems and practices have been rated as a "benchmark for
the automotive industry world-wide" by A V Belgium, global auditors for
International Organisation for Standardisation.

In keeping with its leadership position, Maruti supports safe driving and traffic
management through mass media messages and a state-of-the art driving training
and research institute that it manages for the Delhi Government.

The company's service businesses including sale and purchase of pre owned cars
(TrueValue), lease and fleet management service for corporates (N2N), Maruti
Insurance and Maruti Finance are now fully operational.. These initiatives, besides
providing total mobility solutions to customers in a convenient and transparent
manner, have helped improve economic viability of The company's dealerships.

The company is listed on Bombay Stock Exchange and National Stock Exchange.

MUL is a Board-managed company. Currently the directors on the Board are:

• Mr Shinzo Nakanishi, Chairman

• Mr Jagdish Khattar, Managing Director

• Mr Hirofumi Nagao, Joint Managing Director

• Mr Shinichi Takeuchi, Joint Managing Director

• Mr Kinji Saito, Director (Marketing and Sales)

• Mr Osamu Suzuki, Director

• Mr R C Bhargava, Director

• Mr S V Bhave, Director
• Mr Kumar Mangalam Birla, Director

• Mr Amal Ganguli, Director

• Ms Pallavi Shroff, Director

• Mr Manvinder Singh Banga, Director


OBJECTIVE OF THE COMPANY

Maruti’s marketing objective is to continually offer the customer new


products and services that:

• Reduce the customer’s cost of ownership of their cars; and

•  a nticipate and address the customer’s needs and preferences in all


aspects and stages of car ownership, to provide what they refer to as
the “360 degree customer experience.”

They sell ten models with more than 50 variants in segments A, B, C, and
utility vehicle segment of the Indian passenger car market. Of these, they
manufacture nine models and import the Grand Vitara as a completely built
unit from Suzuki in Japan. Their models and variants are designed to address
the changing demands of the market and are periodically upgraded in
technology, styling and features. To take advantage of the brand recognition
associated with their products, they retain the brand name of the product
through various stages of product upgrades over time. For example, the
version of the Maruti 800 brand currently sold in the market is a significantly
upgraded version, in terms of technology, design and styling, of the Maruti
800 launched in 1983.

A Maruti 800

A OMNI

B Zen

B Wagon R

B Alto

C Esteem

C Baleno
C Versa

C SWIFT

Utility Vehicle GYPSY KING

Utility Vehicle GRAND VITARA

BALENO

WAGON R
ESTEEM
MARUTI 800
NEW ALTO

OMNI
SWIFT

VERSA
ZEN
RESEARCH METHODOLOGY

The nature of the project work has been exploratory as no hypothesis, is


taken to be tested. Though the conclusions drawn could be taken as the
hypothesis and further tested by the research work undertaken in the
relevant field. The reason for choosing the exploratory research design is
the fact the project report has been primarily based upon the secondary
sources of data and whose authenticity could be assured of.

The reluctance of the company's personnel in parting with much of


information led the project report to be based substantially on the
secondary source of data. The sources of data used in data collection are
the following:

Primary sources

In order to gather information about the various products, I personally


visited a number of retail markets and collected data pertaining to the
prices of the products offered. The market visits were useful in knowing
the comparative prices and quality of the offered brands vis-à-vis the
competitive brands. Detail regarding the packaging of the products were
collected were collected and I also inquired about the various sales
promotion schemes followed by the three companies.

By interviewing these retailers valuable information was collected. I


inquired from them about their marketing advertising and distribution
strategies.
Secondary sources
Information was collected from secondary sources such as public libraries,
newspapers, business magazines.
Beside these the use of Internet was also made in collecting relevant
information. The data collected from the above mentioned sources has been
adequately structured and used at appropriate places in the report. This
particular way of data collection was used because of its low cost (except
data collected through surfing the internet) and less time consumption.
The information gathered included:
• Their annual reports (Procter & Gamble and Johnson and Johnson).

• Pamphlets.

• Posters.

• Press clippings.

• News releases.

• Newsletters.

• Pictures.
FINDINGS OF THE STUDY

PRICES OF MARUTI PRODUCTS

Car market leader Maruti Udyog Limited has announced a marginal increase in price
of certain models. The increase, which comes into effect from today, varies from
0.17 percent to 1.47 percent.

The price increase is due to rise in input costs and freight costs, which
increased following the rise in oil prices. In this phase, the company has
decided to pass on only a part of the increase in costs to the customers. There
is no change in the prices of Swift, Zen, Baleno (Vxi) and WagonR (Petrol).

Ex-Showroom Prices in Delhi (in Rs)


Change
Model New Old Increase %
M800 Std 191646 191146 500 0.26%
M800 Std Ac 213062 212562 500 0.24%
Alto Std 231585 231085 500 0.22%
Alto Lx 265262 264762 500 0.19%
Alto Lxi 283878 283378 500 0.18%
Omni Cargo LPG 194725 192725 2000 1.04%
Omni Cargo 213706 213206 500 0.23%
Omni (Eight Seater) 221268 220768 500 0.23%
Omni LPG 230388 227388 3000 1.32%
Esteem Lx 445968 444968 1000 0.22%
Esteem Lxi 476223 475223 1000 0.21%
Esteem Vxi 511520 510520 1000 0.20%
Baleno Lxi 576173 575173 1000 0.17%
Versa Dx 433575 432575 1000 0.23%
Versa Dx2 471779 470779 1000 0.21%
Versa Std 360182 359182 1000 0.28%
WagonR Lx LPG 345106 340106 5000 1.47%
WagonR Lxi LPG 373160 368160 5000 1.36%
ORGANISATION STRUCTURE AT MUL

Maruti Udyog ltd. Has a flat organisation structure with a maximum of three levels.

Head office

MD

MFG FIN OTHER

DIRECTOR N CONTROLLER GM DGMS AGMS

GM/ DGMS DGMSAGMS


MGRS/AMS

MGRS/AMS MGRS/AM SR GM/EX

ENGINEERS(EX) SR. EX./EX


TRAINEES

J.E. (TRAINEES)
THE PRODUCTION PROCESS AT MARUTI

STEEL COILS

BLANKING

PRESSING

WELDING

PAINTING

FROM FROM
ASSEMBLY VENDOR
VENDOR
S S

VEHICLE FROM
INSPECTION VENDOR
S

TEST RUN

SUPPLY &
DISPATCH
INTERNATIONAL BUSINESS

In August, 2003 Maruti crossed a milestone of exporting 300,000 vehicles since its
first export in 1986. Europe is the largest destination of Maruti’s exports and
coincidentally after the first commercial shipment of 480 units to Hungary in 1987,
the 300,00 mark was crossed by the shipment of 571 units to the same country. The
top ten destinations of the cumulative exports have been Netherlands, Italy,
Germany, Chile, U.K., Hungary, Nepal, Greece, France and Poland in that order.

The Alto, which meets the Euro-3 norms, has been very popular in Europe where a
landmark 200,000 vehicle were exported till March 2003. Even in the highly
developed and competitive markets of Netherlands, UK, Germany, France and Italy
Maruti vehicles have made a mark. Though the main market for the Maruti vehicles
is Europe, where it is selling over 70% of its exported quantity, it is exporting in
over 70 countries.

Maruti has entered some unconventional markets like Angola, Benin, Djibouti,
Ethiopia, Morocco, Uganda, Chile, Costa Rica and El Salvador. The Middle-East
region has also opened up and is showing good potential for growth. Some markets
in this region where Maruti is, are Saudi Arabia, Kuwait, Bahrain, Qatar and UAE.

The markets outside of Europe that have large quantities, in the current year, are
Algeria, Saudi Arabia, Srilanka and Bangladesh. Maruti exported more than 51,000
vehicles in 2003-04 which was 59% higher than last year. In the financial year 2003-
04 Maruti exports contributed to more than 10% of total Maruti sales.
MARUTI ALL INDIA SALES – 3 YR TREND

Segment 2003- Growth 2004-05 Growt 2005-06 Growt


04 h h
A1 (Mini - Hatchback) 167,561 17% 116,262 -31% 89,223 -23%
A2 (Compact - Hatchback) 176,132 47% 271,280 54% 335,136 24%
A3 (Mid Size) 14,173 28% 29,637 109% 31,939 8%
A4/A5/A6 NA NA NA NA NA NA
(Exec./Prem./Luxury)
C (Van Type) 59,526 15% 65,019 9% 66,366 2%
Passenger Cars - MUL 417,39 28% 482,198 16% 522,664 8%
2
Passenger Cars - Total 758,12 26% 885,029 17% 948,669 7%
Industry 3
MUV (Utility Vehicles) 3,555 12% 5,204 46% 4,374 -16%
Passenger Vehicles - MUL 420,94 28% 487,402 16% 527,038 8%
7
Passenger Vehicles - Total 901,15 24% 1,050,2 17% 1,129,3 8%
Industry 0 46 16
MARKET SHARE

2005-06 Market Share-Segment A2


TATA
20%

MARUTI HYUNDAI
59% 21%

2005-06 Market Share-Segment A3


HYUNDAI TATA
16% 20%
MARUTI
17%
FORD
14%
OTHERS GM
7% HONDA
6%
20%

2005-06 Market Share-Passenger Cars


TATA FORD
HONDA
HYUNDAI 16% 3%
4% GM
17%
1%

TOYOTA
1%

OTHERS
MARUTI 3%
55%
COMPETITION MODELS

Maruti Competition
SEGMENT
A1 (Mini - Hatchback) M800
A2 (Compact - Zen, WagonR, Hyundai - Santro & Getz; Tata -
Hatchback) Alto, Swift Indica & Palio; GM - Corsa Sail
A3 (Mid Size) Esteem, Hyundai - Accent; Tata - Indigo &
Baleno Petra; Honda - City; GM - Corsa,
Optra, & Aveo; Ford - Ikon,
Fusion, & Fiesta
A4/A5/A6 Hyundai - Elantra & Sonata;
(Exec./Prem./Luxury) Honda - Accord; GM - Vectra; Ford
- Mondeo; Skoda - Octavia &
Superb; Toyota - Corolla & Camry;
Daimler Chrysler - C,E, & S Class;
C (Van Type) Omni, Versa
MUV (Utility Gypsy, Grand Mitsubishi - Pajero; Hyundai -
Vehicles) Vitara Terracan & Tucson; Ford -
Endeavor; Toyota - Prado &
Innova; Nissan - X Trail; Honda -
CRV; GM - Forrester & Tavera;
Tata - Sumo & Safari; Mahindra -
Jeeps, Scorpio, & Bolero
-

COMPETITIVE STRENGTHS

MUL believes that they are well positioned to maintain and enhance their leadership
position in the small car segment in India, while continuing to offer products in most
segments of the Indian market, on account of their competitive strengths, which
include the following:

Expertise in small car technology: As a subsidiary of Suzuki, they have


access to globally respected technology in the small car segment. They have
the advantage of Suzuki’s expertise in all aspects of small car technology and
design, with respect to their products, their manufacturing processes and
business practices, the development of their supply chain and the training of
their personnel.

Extensive product portfolio: Their diverse product range includes cars in


segments A, B and C, and utility vehicles. They manufactured five out of the
ten models that were sold in the combined A and B segments in India in fiscal
2002. They are the only manufacturer of cars in segment A (priced below
Rs.300,000) where they have two models, the Maruti 800 and the Omni. The
Maruti 800 has been the largest selling car in India for several years, and
continued to have the highest sales volumes of any model, with a market share
of 25.3%. The Omni, a versatile vehicle that can seat more passengers than
the Maruti 800 or be used as an ambulance or cargo vehicle, had a market
share of 10.5% in fiscal 2002. They are also the only manufacturer to sell
three distinct models, the Zen, the Alto and the Wagon R, in segment B
(priced between Rs.300,000 and Rs.500,000). They believe that
theirdominance in segment A and extensive product range in segment B
enables us to offer the customer a wider choice in the small car segment than
any of their competitors. In addition, the absence of other manufacturers in
segments A gives their dealers greater flexibility in promoting models in
segment B.

Quality products: In November 2001, they were one of the first automobile
manufacturers in the world to receive the ISO 9001:2000 certification. They
began to export products in 1988, primarily in order to benchmark our
products against international quality standards. They have exported products
to approximately 70 countries, including countries in Western Europe. Their
products for export are manufactured using the same assembly line as our
products for the domestic market.

Extensive sales and service network: They believe that they have the largest
network of dealers and service centers amongst car manufacturers in India. As
of March 31, 2003, we had 178 authorized dealers with 243 sales outlets in
161 cities. They estimate their car parc to be in excess of 3.5 million vehicles.
To service this car parc, at March 31, 2003, they had 342 dealer workshops
and 1,545 Maruti Authorized Service Stations, or MASSs, which covered 898
cities in India backed by Express Service Centers on 30 highways across the
country. In addition to the distribution of their cars, their dealership network
is a critical resource in our efforts to provide customers with a “one-stop
shop” for automobiles and automobile related products and services such as
automobile finance, automobile insurance, Maruti-certified pre-owned cars
available for purchase, and leasing and fleet management, in order to promote
customer loyalty.

Brand strength: They have been present in the Indian market for almost
twenty years and have built their brand on the basis of the values of trust and
reliability. Most of their principal competitors have been present in the Indian
passenger car market for a significantly shorter period. Certain manufacturers
have ceased to manufacture certain products shortly after introducing them, or
have left the market altogether. In contrast, they continue to support the
maintenance of their products. This has contributed to the strength of their
brand. In 2000, 2001 and 2002, J. D. Power Asia Pacific, Inc. ranked us No. 1
in the India Customer Satisfaction Index, which assesses customer satisfaction
with product quality and dealer service. They believe that this was the first
time that a volume leader in the automobile industry anywhere in the world
was ranked first on the JD Power Customer Satisfaction Index. NFO
Automotives 2002 Total Customer Satisfaction Survey ranked Maruti products
as No. 1 in the “Economy”, “Premium Compact” and “Entry Midsize”
segments respectively, for 2002.

Integrated manufacturing facility: Their manufacturing facility comprises


three integrated plants with flexible assembly lines located at Gurgaon in the
northern state of Haryana. Their facility has advanced engineering capability
and each plant is upgraded on an ongoing basis to improve productivity and
quality. As a result, their first plant set up in fiscal 1984 is technologically at
par with their newer plants and is also used in the production of their new
models. They believe that they are one of the most efficient among the vehicle
manufacturing facilities of Suzuki’s subsidiaries outside Japan in terms of
productivity measured as the ratio of number of vehicles produced to number
of employees. They have an installed capacity of 350,000 vehicles per year,
which is the highest among passenger car manufacturers in India and among
the passenger car manufacturing facilities of Suzuki’s subsidiaries outside
Japan. They have consistently produced in excess of their installed capacity in
the five fiscal years ended March 31, 002.

They believe that they would be able to expand their production to 500,000
cars per year with minimal additional capital expenditure. This would enable
them to benefit from significant economies of scale.

Strong vendor base and higher rates of localization: They work closely
with their vendor base for the supply of raw materials, components and spare
parts of their products. In order to improve quality and generate economies of
scale, they have reduced the number of their vendors of components in India
from 370 as of March 31, 2000 to 299 as of March 31, 2003, and intend to
continue to reduce the number of our vendors. 113 of their vendors at March
31, 2003 were in technical collaboration with foreign entities. As of the same
date, we had strategic equity interests through joint venture agreements in 13
of their vendors, who together supply a substantial portion of their purchases
of components. A number of their vendors are their dedicated suppliers in that
they account for a majority of their turnover. Vendors located within a radius
of 100 kilometers from their facility supply the majority of their components.
The production systems of their vendors are generally aligned to their need
for a reliable and timely supply of components that meet their quality
requirements. This has enabled them to increase the proportion of locally
sourced, lower cost components in their models, a concept they refer to as
localisation. They have been able, in collaboration with their vendors, to
increase the rate at which they are able to localise production of their new
models over time. This has helped them reduce the cost of their components.

Skilled labour and experienced management: Thei highly skilled labour force
has become increasingly productive in terms of vehicles produced per
employee and receives training on an ongoing basis, including training by
Suzuki. As of March 31, 2003, 1,900 of their employees had been trained at
Suzuki’s facilities in Japan. They have been present in the Indian passenger
car market for a significantly longer period than most of their principal
competitors. As a result, they have been able to build a highly experienced
management team that is familiar with conditions in the Indian passenger car
market. For instance, their managing director has almost ten years of
experience with them, and most of the heads of their divisions have more than
15 years of experience with them.

Capital resources: They have cash and bank balances and current investments
amounting to Rs.9,992 million. As of the same date, they had relatively low
levels of outstanding indebtedness, in the amount of Rs.4,555 million. As a
result, they have relatively low interest expense and flexibility to raise funds,
if necessary, for their working capital and capital expenditure in the future.
BUSINESS STRATEGY
They intend to continue to focus on the small car segment, while offering
products in most segments of the Indian passenger car market. They aim to
achieve their principal objectives by pursuing the following business
strategies:

Maintain and enhance their product range: They intend to utilize Suzuki’s
expertise in small car technology to produce new variants of their existing
models and to upgrade their products with contemporary technology and
features.

Increase reach and penetration: They plan to continue to utilize their


extensive sales and service network to increase the reach, in terms of
geographical spread, and penetration, in terms of sales volumes, of their
products across India.

Increased availability of automobile finance: They continue to seek


opportunities to expand the size of the Indian passenger car market, especially
in the small car segment, through facilitating easy availability of automobile
finance. To that end, they have recently entered into an agreement with the
State Bank of India.

Secure repeat purchases by offering a “360 degree customer experience”:


On the basis of their belief that securing repeat purchases from an existing
customer requires less expenditure than acquiring a new customer, they aim to
provide customers with a “one-stop shop” for automobiles and automobile-
related products and services.

Continue to benchmark their manufacturing capabilities: They plan to


continue to benchmark our manufacturing capabilities with the most efficient
car manufacturing facilities of Suzuki and its subsidiaries.

Continue to reduce costs to offer more competitive products:

Cost competitiveness has been, and continues to be, central to their strategy as
the leading manufacturer in the small car segment to expand the size of the
market by offering competitively priced, high quality products. The
components of this strategy are:

• Higher levels of localization

• Vendor participation in cost reduction

• Cost reduction on warranties

• Reduction in initial investment cost

• Reduction in number of vehicle platforms

• Achieve further cost reduction through higher productivity

Lower cost of ownership:

Through their business strategies, they seek to reduce the consumer’s cost of
ownership of their cars, which comprises the cost of purchase, the cost of fuel
and maintenance, including spare parts and repairs, during the life of the
vehicle, insurance, and resale value.
SALES NETWORK

Dealers: They offer their products to the customer through a network of 178
authorized dealers with 243 sales outlets across 161 cities. They believe that
this is the largest network of dealers amongst car manufacturers in India.
Their dealers employed more than 3,500 sales executives. They are linked to
their sales network through their secure extranet-based information network.
The sales of their spares, accessories and automobile-related services such as
insurance and finance serve as additional sources of revenue for our dealers.
They believe that the availability of these related products and services at
sales outlets also helps to attract customers to the outlets and promotes sales
of their cars.

Agreements with dealers: They generally appoint a limited number of dealers


for a certain geographical territory. Their dealers provide services to
customers such as pre-delivery inspection of vehicles, sales of cars, after sales
service, supply of spare parts and other services that promote sales of cars
within the territory for which they are appointed. They have the right to sell
their products and services through other dealers or intermediaries in any
territory, whether or not one of their dealers is already established in that
territory. Their dealers are required to maintain their outlets in accordance
with their specifications and employ well-trained sales staff.

Their agreements with their dealers usually have terms of five years. These
agreements are generally renewable for successive terms of three years, by
mutual agreement. The agreements typically permit termination by either the
dealer or them with six months’ prior notice.

Enhancing dealer performance: Their central office in Delhi, their regional


offices and their area offices monitor and assist their dealer network. They
have nine regional offices, five area offices and 187 sales and marketing
personnel. They follow the performance of their dealers and frequently
suggest improvements. In order to assist their dealers in enhancing their
performance and capabilities, they have introduced a concept of “Balanced
Scorecard”. Using this tool, they seek to measure the performance of a
dealership in several areas of operations, including sales, service, spares and
accessories, financial management and management systems. They reward
dealers who perform well on the “Balanced Scorecard” with a cash payment at
the end of the fiscal year. They believe that the “Balanced Scorecard” serves
as an effective incentive for dealers to enhance their performance.

Dealer training: They have established standard operating procedures,


showroom ambience and service quality standards for dealerships. They
provide periodic training through their training centres located at their
manufacturing facility and at Chennai, Kolkata, Guwahati and Pune. They
have trained more than 2,600 and 3,400 dealer sales personnel. Their
subsidiary, True Value Solutions Ltd., provides value-added services, such as
manpower recruitment and training, to their dealers.

AFTER-SALES SERVICE
Network

As on date there are 342 Maruti dealer workshops and 1,545 Maruti
Authorised Service Stations, or MASSs, covering 898 cities in India. In
addition, 24-hour mobile service is offered in 38 cities under the brand
“Maruti On-road Service”. They intend to extend this service to an additional
25 cities over the next three years. As a benchmark for dealers with respect to
service quality and infrastructure facilities, they have launched service
stations under the brand “Maruti Service Masters, or MSMs, in three locations
in India. They have service stations on 30 highways in India under the brand
“Express Service Stations”.

To promote sales of their spare parts and the availability of high quality,
reliable spare parts for their products, they sell spares under the brand name
“Maruti Genuine Parts”, or MGP. These are distributed through their dealer
network and through authorised sellers of their spare parts, to whom they
refer as stockists.
Many of their MASSs are at remote locations where they do not have dealers.
In order to increase the penetration, in terms of sales volumes, of their
products in these remote areas, they are exploring opportunities to integrate
some of the MASSs into the sales process in order to increase sales of their
cars and related products and services such as spares and accessories,
insurance and financing.

Genuine Accessories

They have also entered the business of marketing car accessories under the
brand name “Maruti Genuine Accessories”, or MGA, through their dealership
network. They seek to provide customers with the opportunity to customize
their vehicles with accessories such as music systems, security systems, car-
care products and utility products.

Warranty and Extended Warranty Program

They offer a two-year warranty on all their vehicles at the time of sale. Their
dealers are required to address any claim made by a customer, in accordance
with practices and procedures prescribed by them, under the provisions of the
warranty in force at that time. The dealers subsequently claim the warranty
cost from them. They analyse warranty claims from dealers and either claim
the cost from vendors, in the case of defective components, or bear the cost
ourselves, in the case of manufacturing defects.

They offer an extended paid-warranty program marketed under the brand,


“Forever Yours” for the third and fourth year after purchase. They have
entered into arrangements with insurance companies to cover the costs of
warranties offered under this program. The extended warranty program is
intended to maintain the dealer’s contact with the customer and increase the
revenue generated from sale of spares, accessories and automobile-related
services. An effort is made during the period of the extended warranty to
encourage the customer to exchange his existing Maruti car for a new Maruti
car, or upgrade to a new Maruti car.
NEW BUSINESS INITIATIVES

As the largest manufacturer and leader in the small car segment, they continually
seek new ways to utilize their vast car parc, range of products and extensive sales
and service network to expand the size of the passenger car market in India. They
have recently launched new initiatives to develop the market for automobile
insurance, automobile finance, leasing and fleet management, and pre-owned cars.
They aim to provide customers with a “one-stop shop” for automobiles and
automobile-related products and services, and build on their wide customer base and
extensive sales and service network to make available to their customers a wide
range of Maruti-branded services at different stages of ownership, which they refer
to as the “360 degree customer experience”.

Atithi Devo Bhava: One-stop shop

Inspired by the spirit of India. Atithi Devo Bhava, in Sanskirit, means “a guest is like
God”. It captures the Indian tradition of honouring guests. It's also the inspiration for
the welcome you’ll receive at a Maruti Suzuki dealership, and the caring
relationship they share with those who drive their cars. At Maruti Suzuki, you will
find all your car related needs met under one roof. Whether it is easy finance,
insurance, fleet management. services, exchange Maruti Suzuki is set to provide a
single window solution for all your car related needs.

That's why they have Maruti True Value, the best place to buy and sell reliable
used cars. Maruti Finance an agglomeration of the biggest finance companies
in India brought together by Maruti Suzuki to ensure that the dream car is
within everyone's reach. Similarly, Maruti Insurance brings together some of
the biggest names in the car insurance industry to provide insurance solutions
to every type of car consumer. Then, finally, there is N2N, which offers fleet
related solutions.
THE PLAYERS IN THE INDIAN AUTOMOBILE INDUSTRY

Hyundai Motor India Ltd

Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai


Motor Company, South Korea and is the second largest and the fastest growing car
manufacturer in India. HMIL presently markets 31 variants of passenger cars in six
segments. The Santro in the B segment, Getz in the B+ segment, the Accent in the C
segment, the Elantra in the D segment, the Sonata Embera in the E segment and the
Tucson and Terracan in the SUV segment.

The company recorded combined sales of 252,851 during calendar year 2005 with a
growth of 17.26% over year 2004. HMIL is India's fastest growing car company
having rolled-out over 970,000 cars in just over 80 months since its inception and is
the largest exporter of passenger cars with exports of over Rs. 1,800 crores. HMIL
has recorded a growth of 27.2% in exports over the year 2004.

HMIL’s fully integrated state-of-the-art manufacturing plant near Chennai boasts


some of the most advanced production, quality and testing capabilities in the
country. In continuation of its investment in providing the Indian customer global
technology, HMIL has announced plans for its second plant, which will produce
300,000 units per annum, raising HMIL’s total production capacity to 600,000 per
annum by 2007. The plant will be built on a 2.1 million square meter site adjacent to
the existing facility .HMIL is investing to expand capacity in line with its
positioning as HMC’s global export hub for compact cars. Apart from expansion of
production capacity, HMIL plans to expand its dealer network, which will be
increased from 157 to 200 this year. And with the company’s greater focus on the
quality of its after-sales service, HMIL’s service network will be expanded to over
1,000 in 2006.

The year 2005 has been a significant year for Hyundai Motor India. It achieved a
significant milestone by rolling out the fastest “200,000th” export car. HMIL exports
to around 60 countries globally and recently made a foray into the highly
competitive UK market by exporting its first shipment of 820 cars.

Propelled by the strong performance in year 2005, Hyundai Motor India is on the
threshold of yet another grand milestone of rolling out its ‘One millionth’ car which
is expected soon.

Tata Motors

Tata Motors is one of the largest companies in the Tata Group with a total
income of US$ 2.35 billion. More than 3 million Tata vehicles ply on Indian
roads making Tata a dominant force in the Indian automobile industry.
Tata Motors is India's only fully integrated automobile manufacturer with a
portfolio that covers trucks, buses, utility vehicles and passenger cars. It
would be no exaggeration to say that Tata Motors provides the wheels for
India's growth.

Tata Motors has the unique distinction of giving India its first and only indigenously
built passenger car - The Tata Indica and the premium feature sedan - The Tata
Indigo. The Indica, launched in 1998, reached the 2,50,000 sales mark within 52
months of launch.

Tata Motors owes its leading position in the Indian automobile industry to its strong
focus on indigenisation. This focus has driven the Company to set up world-class
manufacturing units with state-of-the-art technology. Every stage of product
evolution-design, development, manufacturing, assembly and quality control, is
carried out meticulously. Their manufacturing plants are situated at Jamshedpur in
the East, Pune in the West and Lucknow in the North.
Ford India Limited

The Ford Motor Company has a rich legacy of translating better motoring ideas to
the roads. It has manufactured notable brands such as the Ford, Lincoln, Mercury
and the Jaguar. It is among the top five industrial corporations in the world and is
available in more than 200 countries around the world.

Ford has entered the Indian market through a tie - up with Mahindra Motors to
manufacture the Ford Escort. A project that has been set up with a investment of
Rs.1700 crore. Ford India Limited is a subsidiary of Ford Motor Company, currently
Ford has a 78% stake, which is going up to 92% soon. The Maraimalai Nagar Plant
of Ford India Limited, located roughly 45k.m.from Chennai, provides employment
to over 20000 people.The plant has the capacity to manufacture 1,00,000 vehicles
per annum, equipped with state-of-the-art vehicle manufacturing technology from
Ford.
Presently offering seven different models, Ford India Limited (FIL) is catching up
fast with the Indian consumer. This is secured through a quality check program
based on the principles of NOVA - C (New Overall Vehicle Audit - Customer)
wherein daily random checks are conducted from a customer's point of view. To be
doubly sure, routine calls are made to dealerships to check the quality of cars
delivered to them.

At Mahindra's dealerships are present trained professionals who provide the


best levels of service in India. Its intensive manpower training, advanced
service equipment and dedicated consumer satisfaction are the are its plus
points which is being followed by the entire industry.

Acknowledgement has come in the form of the J D power 1997 India Initial Quality
and Customer Satisfaction Awards. These internationally acclaimed and recognized
awards voted the Ford Escort as the Best Quality car and the Mahindra Ford and its
dealerships were rated the highest in Customer Satisfaction. This is an honour as it
its only the second time in automotive history that the same brand/manufacturer has
received both the awards in the same year.
General Motors India

General Motors India, incorporated in 1994 as a 50-50 joint venture company with
the C.K. Birla Group of Companies, became a fully owned subsidiary of GM in
1999 when GMOC bought the remaining shares. The company was restructured in
1999 and was converted from a Public Limited company to a Private Limited
company. GM APH LLC currently holds 86 percent of voting shares, and Holden
(Australia) holds 14 percent. The SPO business was integrated with the main
business in the same company in 2000.

In India, GM strengthened its presence with new product launches Chevrolet Optra
in 2003 and Chevrolet Tavera (Multi Utility Vehicle) in 2004. Similarly in 2004, GM
India is expected to register a growth of 90% over 2003. With sales volume going
up, the market share of GM India has gone to nearly 2%. The sales volume in 2003
was 15,155 units while 2004 figure is expected to be around 27,000 units. In 2004,
the company sold a total of 26,166 cars as against 15,155 cars in 2003 registering a
growth of 73% while overall passenger car growth during the year was only around
23-24%. These included 9191 Chevy Optras in Entry 'D' Luxury sedan segment,
8369 Opel Corsas and 8417 units of the new generation premium multi-utility
vehicle (MUV) Chevrolet Tavera.

The existing GM India plant was originally built by Hindustan Motors. In 1994, GM
India entered into a 50% Joint Venture partnership with Hindustan Motors and
modernized the 45,000-square-meter plant near Halol, 45 kilometers northwest of
Vadodara, in the western state of Gujarat. In February, 1999, GM bought the
holdings of Hindutan Motors and GM India became a 100% subsidiary of General
Motors Corporation of USA. The plant produces the Opel Corsa, Corsa Sail,
Chevrolet Optra, and Chevrolet Tavera. The Chevrolet Forester and Opel Vectra are
sold as CBUs (Completely Built in Units) and as imported from Japan and Germany
respectively.

Toyota Motor Corporation is the third largest automaker in the world. They
have 34 dealers in India and in Delhi they have 2 dealers, first one is ‘South
Delhi Toyota’ and second one is in Moti Nagar in which I have visited during
my survey. Dealer in Moti Nagar which is “Galaxy Toyota” have
predetermined mission that-Customer comes first and everything they do is to
meet their customer needs, basically they work for creating a lifetime
customer.

They work by dividing their work like in one showroom they have separate
teams for every product like relating to Corolla it comprises of 7 or 8
executives who handle all the work weather it is of sale or any enquiry or
telemarketing call that team must have some specific target to achieve. They
reach to the customers either by distributing Leaflets, Brochures to the
customers. They collect customer database from Directory (Yellow Pages) or
through customer references even they solve customers query online and give
information through e-mails. Recently they organized one drawing
competition between the kids of their existing customers just to interact with
the customer and build loyalty of their company products. They judge their
customer satisfaction by analyzing that repeat buyers are more or not &
moreover they have customer feedback form in which they can analyze
customers background and can forecast customer future demands. They target
only high profile customers.

They build customer loyalty by giving happy calls to the customer after sale
of every 1,3,7 month. They provide Periodic maintenance schedule, which
will ensure that vehicle, is kept in best able-bodied at all times. The
maintenance schedule may include periodic inspection, adjustment and
lubrication that will keep vehicle in the safest and most efficient condition,
they provide one booklet in which they give simple and useful tips for
maintenance of the car. They offer good schemes like providing free Test
Drive worth Rs 250 petrol at the time of sale of any car. They do road shows
to attract customers. To promote their product they organize exchange mela,
events, various cash discounts like currently they are running one discount
scheme on purchase of any of their car (Innova, Toyota) they are giving free
accessories worth Rs15000. They provide 4 free services after sale and with
full clean diesel.

All employees of Galaxy Toyota shall consider how they should act and how
they might change their ways to benefit the company. They launch one “Co
Branded Credit Card” to provide additional benefits and services to the Toyota
customers. This Credit Card will give Toyota customers a better payment
flexibility and convenience, like Customer gets free service voucher with the
card, Special Invite to co-sponsored events, Personal accident insurance
coverage: Up to 20 lakhs etc. They have one Guest Book in which they store
valuable comments of customers, which they think are very important for
them, which will help them to improve their service.

HONDA

Honda is one of the leading manufacturers of automobiles and power products and
the largest manufacture of motorcycles in the world. They have 20 dealers in 42
different cities around India. In New Delhi they have 6 dealers, I have visited one of
them, which is in Najafgarh Road.

They do surveys to know customers need. They target either existing or their
perspective customers by giving advertisement in the newspaper or through there
satisfied customers which give references. They don’t believe on targeting
competitor’s customers because by not doing so they have such a brand reputation
with good quality products, only through this they are able to make good sales.

They display their models in 8th Auto Expo, which held in New Delhi. They
are now focusing on their new model ‘Civic’. Honda's Civic perhaps drew the
maximum attention. The reason is simple: Civic is a new car from the house
of Honda. During my survey I get to know that Honda City Model is the
second largest selling car in the ‘C’ segment. They have a good superiority
with superior brand name in the country.
They prefer to have mode of communication with the customer through mail,
telephone and sometimes by letter. Customers who don’t have time even to
see the model or to call the dealer to make inquiries about their reservation
they desire to solve their query online itself.

To judge customer satisfaction they some times invite their customers to have a get
together, to have interaction with customer in a minute to know that are they
satisfied with their services and what they are expecting from them in the near
future. They make maximum of their sales from the fresh customers rather than their
repeat purchasers. To increase their sales they try to extort surreptitious information
from the customers and on their end they aim to ensure that the product quality and
product quantity should be available in required quantity in their dealership.

They have Feedback form in which they take feedback of the customer as well as
their salesperson because through this they are able to get the information of both
the customer & their salesperson that are they giving the full information to the
customer. This Dealership even provide technical skills and techniques to their
employees that how to deal with the customer thoughtfully every after 6 months.
NEED FOR CRM IN AUTOMOBILE INDUSTRY

The global automotive industry exhibits most of the characteristics of mature


industries and closely follows their business cycles. While vehicle industry sales
have been strong for the past several years, they have started to slow recently due to
the current global economic slowdown. Deteriorating economic conditions result in
a drop in consumer confidence, which quickly impacts automotive sales due to their
big-ticket status and the relative low cost of extending the life of an existing vehicle
through maintenance and repair.

The advent of the Internet as a research tool (75 to 80 percent of auto consumers
research using the Internet) has shifted power to consumers, further increasing
pressure on prices. At the same time, government regulation and consumer demands
for sophisticated features have increased development, production, and marketing
costs. Regional economic fluctuations favor consolidation among car companies,
suppliers, and retailers -resulting in fewer, larger companies that have more
complete product lines targeted at existing and new markets. Consolidation has
heightened competition in all vehicle segments. Low-cost manufacturers are
expanding beyond their home markets with entry level vehicles, traditional
passenger car manufacturers are expanding into the light truck markets, and luxury
manufacturers are moving down market with passenger cars and SUVs. As a result
of these product and market extensions, consumers find it difficult to exhibit brand
loyalty because vehicles have unclear brand identities, similar features, and
comparable prices. In addition, an overpopulation of dealers has resulted in local and
regional competition among same make dealers. This further reduces margins and
damages the brand images the car companies spend large amounts of money to
build.

Relations between the car companies and their suppliers traditionally have been
difficult. In response to competitive pressure, suppliers have been forced by the car
companies to provide higher-quality components at constantly lower costs. The
resulting decrease in margins and the reduction in volume due to slowing sales have
increased the pressure to consolidate and forced some suppliers to the brink of
bankruptcy. Dealers too have a long history of adversarial relationships with the car
companies. Independent entrepreneurs who view some of the car companies with
skepticism or serious mistrust, dealers believe that many manufacturer-sponsored
customer satisfaction programs are actually designed to force smaller dealers out of
business or to gain control of customer relationships that the retailers believe they
"own."

These difficult relationships have prevented car companies and dealers from
maximizing the lifetime value of their combined customers. There are few
incentives or efficient methods for dealers and car companies to share critical data,
resulting in ineffective management of product, service, and household information.
In addition, consumers receive conflicting marketing communications from the two
groups, which results in reduced brand value.

KEY INDUSTRY PAIN POINTS

• Decreasing sales and market share - The long-term battle for market
share continues to intensify. In the mature automotive industry, where
business cycles drive sales fluctuations, market share is critical to
survival. Consumers are less brand-loyal than in the past, and every
market segment has an increasing number of vehicle choices. To
increase sales and gain ground in the market share battle, companies
must improve their ability both to acquire first-time customers and to
develop customer loyalty to their current brands. To achieve these
related objectives, companies must set an aggressive goal -deliver the
best customer experience in the automotive industry.
• Difficult dealer relationships and a lack of dealer collaboration - As
the consumer 's primary touch point ,the dealer network is a critical
component of customer-facing operations. Therefore, the integration of
the dealer network is absolutely essential to improving the quality of
the customer experience. Only with an infrastructure that enables the
effective flow of information to and from dealers can companies create
a complete view of their customers. Car companies must take the
initiative in understanding the customer 's perspective throughout the
buying cycle.

• Lack of multichannel capabilities - With the advent of the Internet as


a research tool, the majority of customers are accessing the automotive
enterprises through several different channels. Many times, the switch
between channels happens very rapidly as a prospect or customer can
view a Web site, make a phone inquiry, and visit a retail store within
days or even hours of an initial contact. To improve customer
satisfaction and secure customer lifetime value, companies must be
able to capture these multiple interactions, provide seamless
management between channels, and leverage shared customer
information to create rewarding experiences and to develop and
execute highly targeted marketing campaigns.
• Inefficient demand chain planning and high associated IT cost -
Cost reduction is an ongoing competitive requirement. Just as supply
chain management must be supported by a sophisticated information
infrastructure, effective demand chain management also requires the
right supporting infrastructure, enabling car companies to fully
leverage each customer relationship through exceptional customer
service, efficient lead generation and management, and effective
promotions and campaigns. In addition, global automotive enterprises
operate a wide variety of IT systems in their various business units and
functional groups. Rationalizing these systems offers significant cost
savings.
• Lack of effective information sharing - Car companies must integrate
global operations in order to achieve the benefits of consolidation -cost
reduction, effective communication, and true integration of core
competencies. In addition, internal alignment between business units
and functional groups is required to create a unified view of
consumers, products, and services. Currently, each business unit,
functional group, and brand operates through independent systems,
programs, and touch points. As a result, there is limited synergy across
the ecosystem, leading to significant inefficiencies, lack of
coordination, and most important, an inability to maximize "share of
wallet "from every customer through well-targeted marketing and
cross-selling. Synergy between traditionally independent business units
such as captive finance companies and between functional groups such
as sales, service, and marketing is more critical now than ever before.
Only by sharing customer information can customer lifetime value be
maximized among different groups.
• Complex data governance requirements - Global automotive
enterprises have large, complex information technology ecosystems.
While customer information must be shared within this ecosystem in
order to fully maximize global operations, it must also be protected.
Proper management of customer information requires a sophisticated
capability to manage a variety of access rules and to accommodate
legal restrictions that can change very quickly. The trust required for
successful collaboration between groups in the automotive enterprise
must be built by demonstrating that customer information can be
shared while observing these complex requirements.
• Difficulty managing employee relationships - In today 's fast-paced
business environment, automotive companies need to ensure that their
most valuable asset -their employees -have immediate access to the
critical information, services, and applications required to be
productive. Organizations must enable employees to make better
decisions, work collaboratively, enhance customer relationships, and
maximize productive time. Global automotive enterprises must be able
to enact and enforce consistent policies across business units, instill a
common corporate culture across a geographically dispersed and
diverse workforce, equip employees with effective search tools to
access corporate knowledge bases, and provide employees with the
training necessary to service customers in a volatile and demanding
market.

Target Marketing Procedure Of Various Companies

TARGET SEGMENT

To reach to rural and lower middle class consumers. They begin with
small concentrated markets appealing to local culture and aspirations of
the targeted area

STRATEGY

THEIR STRATEGY IS TO CAPTURE THE RURAL MARKET BY


EMPLOYING WOMEN WHO BELONG TO THEIR LOCAL COMMUNITY
THROUGH WHICH THEIR PRODUCT CAN REACH TO LOCAL
CONSUMERS. THEIR STRATEGY IS TO PROVIDE WORK FOR WOMEN
TO CREATE AWARENESS AMONG CONFINED CONSUMERS

Process

They started with Project Shakti in which their basic aim is to educate a rural person about
their products through women who belongs to their own local community and who can
communicate well in their language with them. In this way many educated women get
work in rural sector and on the other hand HLL Corporate Social Responsibility (CSR)
also increases towards society by introducing educative programs for the benefit of the
rural sector

Mode of Communication
They reach to customers by giving advertisements in the T.V. or through radio,
through wall painting, or through promotional activities like weakly haats, mela or
local bazaars and most importantly, their policies were flexible and they could
adapt to fast changing marketing situations.

Through Internet, E-mail usage, communication media like telephone and mail facility
this mode of communication is possible to a great extent. ITC’s extensive India-wide
distribution network enables its greeting cards reach over 12,000 multi brand outlets
in over 700 cities across the country. In the last three years, 10,000 greeting card
designs have reached these outlets with the help of ITC's web-enabled e-commerce
model –Communication Model ITC markets

Opportunity

These days’ consumers are looking for convenience and instant gratification.
Communication media like the telephone and e-mail facilitate
communication to a great extent. But many greeting card sites are moving
from a 'free' to a 'pay' mode. This could be an emerging revenue earning
opportunity for content providers.

Threats

'Expressions' which is a competitor of ITC in this segment is currently the second


biggest greeting card brand in India with a market share of 20 per cent. ITC has a
five per cent share in the stationery market. The greeting card market in India is
estimated to be around Rs. 250 crore in terms of yearly consumer spent. The
unorganized sector in the greeting card market will be close to 40 per cent. The
organized sector, controlling 60 per cent of the market, is divided between ITC,
Archie’s and Hallmark. While Archie’s has licensing agreements with international
greetings brands
FINDINGS FROM SURVEY

Total Number of Respondents: 15 Officials

Number of Respondents
Maruti Udyog Limited 5
Hyundai Motors India Ltd 2
General Motors 2
Tata Motors 5
Ford India Limited 1

Do you face problems in maintaining good and effective


relationships with customers?

Quite Frequently Average Rarely


Frequently
Maruti Udyog 2 3 - -
Limited
Hyundai Motors - 2 - -
India Ltd
General Motors - 2 - -
Tata Motors 3 2 - -
Ford India - 1 - -
Limited

Rarely Average
0% 0% Quite
Frequently
33%

Frequently
67%

Findings: According to the responses of the respondents it can be concluded that all
the respondents face problems in maintaining good and effective relationships with
customers. With changing customer needs its quite obvious that maintaining good
relations with customers need an effort on part of the Dealers and Manufacturers.

How well can your company identify its end user


customers?

♦ Maruti Udyog Limited: According to the officials of MUL, the company’s


endeavor is to be close to the customer, to anticipate and fulfill their
needs. They believe that the new business initiatives taken by MUL have
expanded the scope of this relationship. Maruti offers auto insurance, auto
finance, corporate lease and fleet management and resale of pre-owned
cars in partnership with its dealers. For the first time, car customers in
India are able to access these services through a one-stop shop, backed by
the leader brand. The way they look at it is that this will provide complete
mobility solutions to the Maruti customer. This also enables them to
extend their relationship with the customer beyond the point of purchase
to the entire ownership life cycle. Since these services play a vital role in
the car customer's ownership experience, the new initiatives enable them
to offer Maruti owner’s greater value, assurance and convenience.
♦ Hyundai Motors India Ltd: According to the officials of Hyundai Motor
India is at a very exciting stage in India today. They are experiencing
tremendous growth - which is a true sign of enjoying customer confidence.
In order to strengthen their position further in the Indian market, they need
to continuously work on building their corporate reputation while
aggressively positioning their products. For HMI's focus and commitment
to the Indian automobile customers is of critical importance. Its been their
continuous endeavor to fulfill the entire spectrum of customer needs and
desires, across all socio-economic & lifestyle groups. They have therefore,
in just 6 years of HMI's young life, established nationwide sales & service
network, scaled up state-of-the-art manufacturing capacity, launched
global-standard cars in rapid succession and exported cars made-in-India
across the globe. Getz, a much admired lifestyle brand in Europe and
elsewhere, is a step in the same direction and is a cutting-edge, addition to
HMI's extensive product portfolio.
♦ General Motors: According to the officials at General Motors is positioned
as a mature and responsible car manufacturer, which offers great value-
for-money products to its customers. The company leverages its global
expertise to manufacture and market well engineered and safe products
through its well-established retail network that provide an excellent
ownership experience to its customers.
♦ Tata Motors: According to the officials of Tata Motors the foundation of
the company’s growth over the last 50 years is a deep understanding of
economic stimuli and customer needs, and the ability to translate them into
customer-desired offerings through leading edge R&D.
♦ Ford India Limited: According to the officials of Ford India has reaffirmed
its commitment to enhancing the purchase and ownership experience for
its customers with the rollout of Ford Brand@Retail concept across the
country. Ford India has been revamping all dealerships under the Ford
Brand@ Retail, a global corporate identity program to offer a world-class
purchase experience to the customer. Ford India continues to expand its
distribution network and will grow to 115 dealer outlets in 79 locations by
the end of 2005. The officials also mentioned that Ford India provides
training support to dealers in areas including customer satisfaction, sales,
technical and non-technical aspects of the business and in the financial
management of the dealership.

Can your company differentiate its customers based on


their value to you and their needs from you?
Yes No
Maruti Udyog 5 -
Limited
Hyundai Motors 2 -
India Ltd
General Motors 2 -
Tata Motors 5 -
Ford India Limited 1 -
No
0%

Yes
100%

Findings: According to the respondents (officials) at all the Five Automobile Majors
their company was able to differentiate its customers based on their value to them
and their needs from the company. This is important for the automobile industry
because the dynamics of selling cars is changing and manufacturers and dealers who
fail to meet the rising needs and expectations of their customers will lose out to
those who can. Buying a new car is an experience customer will remember for a
long time and ensuring that this experience is a satisfactory one is essential in
building brand loyalty and customer advocacy.

How well do you interact with your customers?

♦ Maruti Udyog Limited: According to the officials of MUL, their overall strength
lies in building an organization that is sharply focused on the voice of the
customer. Maruti's consistent performance over the past several years has
resulted in a steady increase in the percentage of its customers who say they
intend to remain loyal to the brand. n order to be closer to the customers, it is
essential that we should have multiple avenues of one-to-one interaction with
our customers. As a major step in this direction they have started Call Center
service with toll-free number for the people of National Capital Region in year
2000. This service, named Anytime Maruti, is now available nation-wide.
Customers in over 700 cities/towns across India can contact them any time
during the day and all days of the week. The toll-free service is 1800 1800 180,
it is accessible from any fixed-line or mobile phone of BSNL/MTNL network
across the nation. The Anytime Maruti Call-center can also be accessed using
telephones on other networks by dialing 09811801515 (not toll-free). The
objective of this service is to ensure that customers have quick and easy access
to all information on their models, prices, dealers, value added services, finance
options, and the locations of our numerous service stations. Anytime Maruti
helps customers to learn more about their Maruti Cars and also about other
services offered by Maruti. For prospective buyers, Anytime Maruti can help
them deciding amongst various Maruti Models and benefits of buying from
Maruti.
♦ Hyundai Motors India Ltd: According to the officials at HMI The
Company has set up more than 70 dealer workshops that are equipped with
the latest technology, machinery, and international quality press, body and
paint shops, across the country, thereby providing a one-stop shop for a
Hyundai customer. Hyundai also has a fleet of 78 emergency road service
cars - specially equipped Santro that can provide emergency service to all
its customers anytime, anywhere. The customers can also call on 1800-11-
4645 (Toll Free - Only from MTNL & BSNL numbers)
011- 26924645 (For all GSM Connections / Landline other than MTNL &
BSNL numbers) for any queries & customer complaints.

♦ General Motors: According to the official at GM, to bring greater value


and service to customers, they have introduced the GM Service Plus – a
unique cluster of services, designed to compliment every aspect of owning
a car and ensuring complete peace of mind. So be it emergency assistance,
an urgent car servicing or even sourcing genuine accessories, Customers
can be assured of yet another great moment from General Motors. For any
car related query or emergency requirement, customers can call 24-hour
assistance at 30308080. The unique 3-hour service programme comes with
a promise of servicing your car in just 3 hours, or you get the service free.
With their 24-hour workshops, customers can now conveniently get their
car serviced, when they use it the least. Widespread sales and service
outlets across the country ensure that you have the assurance of great
service wherever you travel in India.
♦ Tata Motors: according to the officials of Tata Motors the company has
strengthened its distribution and customer care network and today has 77
dealers and 230 authorized service outlets spread across 119 locations in
India.
♦ Ford India Limited: According to the officials at Ford solutions aims to
provide quality, peace-of-mind products for the customer and embodies a
brand synonymous with its ability to provide products that can be tailored
to suit one's individual needs. Ford Solutions serve to develop products for
Ford and the Dealer body that enhance customer satisfaction. When your
vehicle needs a repair or a component replaced, you need Quality Care
service. Your Ford Dealership is simply the best place to have your vehicle
serviced. Brakes, shocks, batteries or anything your vehicle may need,
your dealership is the place to get it. Customers can place a online service
request at Ford.
How well does your company customize its products and services
based on what it knows about its customers?

Highly Somewhat Not Customer


Customer Customer centric
centric centric
Maruti Udyog 5 - -
Limited
Hyundai 2 - -
Motors India
Ltd
General 2 - -
Motors
Tata Motors 5 - -

Ford India 1 - -
Limited

Somewhat Not Customer


Customer centric centric
0% 0%

Highly Customer
centric
100%

Findings: All the officials of the Automobile Majors agree that all products and
services are highly customer centric and based on the information they know about
the customers.
Does the company have established quality assurance processes?
Yes No
Maruti Udyog 5 -
Limited
Hyundai Motors 2 -
India Ltd
General Motors 2 -
Tata Motors 5 -
Ford India Limited 1 -

No
0%

Yes
100%

Findings: According to all the respondents their respective companies have


established quality assurance processes.
Does the company take customers' needs into consideration when
selecting and implementing technology?
Yes No
Maruti Udyog 5 -
Limited
Hyundai Motors 2 -
India Ltd
General Motors 2 -
Tata Motors 5 -
Ford India Limited 1 -

No
0%

Yes
100%

Findings: According to all the respondents their respective companies take


customers' needs into consideration when selecting and implementing technology.
As per officials of GM the Tavera is a classic case of an India-specific product.
Though it is an international product, the car has been totally re-engineered for
Indian market requirements.
At Hyundai Segment-needs and budgets are specific and a suitable variant
strategy is inevitably required to meet different segment-needs and to be a
volume player in the segment. The variants are decided after considerable
research. They have been targeted at different segments and they presently
witness a healthy mix. As this segment evolves they rationalise the variant
strategy and add or delete variants to meet market requirements. They have
put in place a customer contact programme where they interact with
customers in groups as well at an individual level at regular intervals to assess
their needs and overall experience with their product.

The typical Indian consumer looks for value and does not mind paying a little
more for it. Fuel efficiency, airconditioning and reliability along with ease of
service and low cost of ownership are major considerations during the
purchase process in India.

Does the company provide its employees with technology that


enables them to help customers?

Yes No
Maruti Udyog 5 -
Limited
Hyundai Motors 2 -
India Ltd
General Motors 2 -
Tata Motors 5 -
Ford India Limited 1 -

No
0%

Yes
100%

Findings: According to all the respondents the company provides its


employees with technology that enables them to help customers. Employee
and Dealer Training is a part of every company Customer Service Initiative.
This enables them to provide the customers with state of art products and
service to customers.
Does the company maintain a strategy for collecting
and using information about customers?

Yes No
Maruti Udyog 5 -
Limited
Hyundai Motors 2 -
India Ltd
General Motors 2 -
Tata Motors 5 -
Ford India Limited 1 -

No
0%

Yes
100%

Findings: According to all the respondents they have proper information about their
most profitable customers. Companies use Informal Meetings, Sales Interaction and
calls to collect relevant information needed to maintain good customer relationship.
The most effective companies like Tata Motors use all the above while most of other
track the data during sales interaction. All the Automobile majors surveyed used
CRM software for tracking Customer Information. According to the officials
Customer and Supplier Feedback are gathered through Call Centers, Mails and
Direct Interviews. There are other methods too but the above three are the most cost
effective.
How effectively does the company combine information on
customers with its experiences to generate knowledge about
its customers?
Highly Somewhat Not Effective
Effective Effective
Maruti Udyog 4 1 -
Limited
Hyundai 2 - -
Motors India
Ltd
General 2 - -
Motors
Tata Motors 3 2 -

Ford India 1 - -
Limited

Not Effective
0%
Somewhat effective
20%

Highly Effective
80%

Findings: All the 80% officials of the Automobile Majors their company
highly effective in combining information on customers with its experiences
to generate knowledge about its customers while 20% said that the company
was somewhat effective.
What steps has the company taken to improve the total experience

of its customers?

♦ According to the Maruti Udyog Limited Officials: Sales experience is the


most important factor, accounting for 37 per cent of the SSI score, and
includes issues such as fulfillment of commitments and lack of hassles
during the sales process, overall honesty and integrity of the dealership
personnel and sufficient time to make the decision. Maruti entered the
Indian car market, to provide fuel efficient, low-cost vehicles, which were
reliable and of high quality. It also offered customers a friendly sales and
after sales service. With high customer satisfaction ratio and Total
automobile value these objectives shaped Maruti as big Giant in the field
of automobiles.
♦ According to Hyundai Motors (India) Officials: Hyundai's big hit was its
compact family car named Santro which became a huge hit with its launch
and capture hearts of millions with increasing satisfied customers day by
day. When Hyundai forayed into the Indian market it moved quickly to set
up a network of dealers and service stations - it has close to 260 of the
latter. Service was identified as a powerful differentiator to the way things
were done and word of mouth did the rest. It was one of the ways to keep
the Hyundai customer within our fold. Also, these are advanced cars,
which can't be repaired by a corner mechanic. Hyundai offers service for
less, it's easily reachable and allows flexibility and customers appreciate
that. Hyundai Motor India Ltd (HMIL) launched “Achieve Q1P1” quality
campaign on March 24, 2006 primarily focusing on achieving the Global
No.1 Quality & Brand image. The campaign has been initiated across the
Hyundai vendor fraternity. This new initiative will strengthen the Vendor
quality organisation and will ensure the major part quality improvement
such as Six Sigma Activity, training and improve the Tier 2 suppliers. The
campaign will also help the suppliers to improve their 3C5S (3C – Correct
Container, Correct Quantity & Correct Location and 5S – Sorting,
Systematizing, Shining, Standardizing & Self-Discipline), TPM (Total
Productivity Maintenance), benchmarking activities and upgrade quality
systems.

According to Ford India Limited officials: Presently Ford is offering seven


different models, Ford India Limited (FIL) is catching up fast with the Indian
consumer. FIL was the first subsidiary of a multinational car manufacturer in
India to launch a car designed specifically for India. They have consistently
adapted the specification of the Ikon to ensure it meets the needs of Indian
consumers. They have improved the horn and the steering column switch so
that they are more robust; the new combination switch has proved so effective
that it is used worldwide. They have also developed a hydraulically activated
clutch system, improved ground clearance and upgraded air conditioning to
satisfy the specific needs of the Indian customer. This is part of a continuous
improvement process. Satisfying our customers They have introduced
initiatives to assess customer satisfaction and to act on their concerns. The
Intensified Customer Concern Definition (ICCD) is a telephone survey of
customers conducted to assess problems in three areas:

They recognise the need for additional products. They are working towards
introducing products to match our customer’s dynamic lifestyle, products
which have progressive styling and are great to drive.

• Vehicle quality concern • Design and general comments • Negative sales and
service

♦ According to GM officials: General Motors target is to offer a choice of


products to their customers to match their different needs and budgets.
Being the world’s largest car manufacturer, they have access to a range of
products through their global alliances. They are already present in most
segments and will shortly have products in additional segments. However,
they are focusing on the fast growing MPV segment with the Chevrolet
Tavera and have invested substantially in this product line. They look for
customers for life who will have a choice of products to buy from their
stable. Sustained brand building efforts coupled with intensive ground-
level activity has ensured that Optra has remained among the top two
players in its segment. They have refreshed the product through
continuous product improvements and have emerged as segment leader in
fuel efficiency. They have recently launched a limited edition of 150 cars,
which has received a very positive response and given us rich dividend in
terms of brand building and imagery. A product refreshment plan ensures
that they remain competitive and are ready to meet future challenges in
this segment. They also have a regular Customer Relation Management
programme whereby existing customers are offered loyalty programmes
and great offers. So far, they have organised six Optra Max Mileage Rally
meets where Optra customers compete to extract the best fuel efficiency
out of their cars and all participants are treated to an overnight stay at an
exotic locale with an evening of entertainment. The winners of these
rallies are given healthy cash rewards. These vents go a long way in
building goodwill and brand loyalty.

♦ According to Tata Motors Officials: TATA Motors is India's foremost, and


the only fully integrated automobile manufacturer. Established in 1945 as
TATA Engineering & Locomotive Company (TELCO), to manufacture
locomotives and other engineering products, the company is today among
the world's top 10 producers of commercial vehicles. TATA Motors was
also previously known as TATA Engineering. It is today one of the biggest
and most prominent companies in the TATA group, with an annual revenue
of $1.8 billion in 2001-02. Today TATA motors' vehicles run in more than
70 countries. TATA Motors use a manual dealer management system,
where every dealer managed details. With legacy-based systems, the
environment produced inconsistent data, making interpretations difficult
and resulting in inefficient planning for capacity and spare parts. TATA
Motors required a standardised solution that would provide them with:

• Increase in sales and profitability by easy management.


• Improved accuracy of dealer-captured information.
• Collaboration between vehicle manufacturers and dealers.
1. A strong feedback mechanism and interface for communicating with
customers. TATA Motors chose IBM as its partner to provide an
infrastructure solution. IBM created a Siebel solution to provide a DMS
solution for TATA Motors and then provided a reliable and scalable IT
infrastructure for developing and deploying its DMS application. The IBM
solution has simplified the IT infrastructure for TATA Motors. The benefits
include - low total cost of ownership, a more comprehensive view of
customers, enhanced customer experiences and improved loyalty. With
reengineered business process, the company can also analyse customer
interactions and other information more accurately, improve capacity
planning and increase profitability. Faced with increasing competition from
abroad, a cyclical business environment, and the challenge of a widely
dispersed dealer network, Tata Motors implemented Siebel Automotive, a
comprehensive customer relationship management (CRM) solution designed
specifically for companies in the automotive industry. Seamlessly integrated
with Tata Motors’ dealer management system and SAP back-office
applications, Siebel Automotive has delivered significant benefits across the
extended organization, including improved customer satisfaction, increased
revenue and productivity, and reduced costs. Apart from providing its
customers with high performance automobiles, Tata Motors strongly believes
in customer safety. Several cases have been cited where passengers driving
Tata vehicles have been saved after terrible accidents. Tata Motors
established a crash-testing facility, the only one of its kind in the country, in
Pune in 1996. The small workforce of 21 members including engineers aims
to control the serious risks and intrusions in accidents. The company believes
that this factor has been vital to the success of the Indica and other products
under the company’s passenger car unit. The key things that the critical
people spend time on 1. Commitment to quality manufacturing standards 2.
Developing new products 3. Customer Safety and satisfaction 4. Global
expansion Norms.
How much 'influence do customers' needs have on the company's
products and services?
Very High Substantial Very Low
Maruti Udyog 3 2 -
Limited
Hyundai Motors 2 - -
India Ltd
General Motors 2 - -

Tata Motors 2 1 2

Ford India 1 - --
Limited

Very Low
13%

Substantial Very High


20% 67%

Findings: All the 67%(10) responding officials of the Automobile Majors


customer needs have a very high influence on company’s products and
services while 20%(3) respondents said that it had substantial influence while
13%(2) respondents said that customer needs had very low influence on
company’s product and services.

ANALYSIS
Corporates, don't talk about exceeding customer satisfaction - that's passe - the time
has come to `dazzle the customer'. But to do that, first you must get customer
relationship management (CRM) in place. In the context of India, this is very crucial
as the recent World Economic Forum Report on Global Competitiveness has ranked
India 43 out of 49 nations surveyed, on `customer orientation'.

Managing customer relationships is not only complex but is also multi-faceted and
thus calls for an inter-disciplinary approach. Particularly, as in the New Economy,
the customer has become very demanding and the emphasis needs to be on being
consumer-centric. Technology solutions as applied to various front-end functions
could aid in building a viable link between the organisations and customers
irrespective of geographical separation. This has to be backed with appropriate
systems and processes to mine the right type of data by the right function in an
organisation.

Besides technology, systems and processes, another important link is human


resource, If CRM is the key, HR would be the nerve centre for any CRM activity.

At Maruti Udyog Ltd the first step for a company to enhance value through CRM
was to identify its target base. At Maruti, the categories which emerged were:

* Two-wheeler owners;

* Customers taken away from the competition;

* Services sector.

After identifying the target, the next stage was to build on customer relationships.
Maruti, therefore, began evaluating the current database of consumers to identify
those who wanted Maruti service or better still, wanted to upgrade up the value
chain in Maruti products. Third, it began working in tandem with the oil industry to
get data feedback on two-wheeler consumers-and identify those ready to move into
four-wheeler purchases. Ultimately, CRM is all about value enhancement for the
organisation.
Faced with increasing competition from abroad, a cyclical business environment,
and the challenge of a widely dispersed dealer network, Tata Motors implemented
Siebel Automotive, a comprehensive customer relationship management (CRM)
solution designed specifically for companies in the automotive industry. Seamlessly
integrated with Tata Motors’ dealer management system and SAP back-office
applications, Siebel Automotive has delivered significant benefits across the
extended organization, including improved customer satisfaction, increased revenue
and productivity, and reduced costs.

The Siebel CRM solution enables Tata Motors to gather feedback on products to
improve design or manufacturing quality as well as measure the effectiveness of
marketing campaigns and programmes. The automaker selected Siebel Automotive
because of its partner management capabilities to handle its large dealer network, the
solution's zero-footprint web-based architecture and user-friendly interface-critical
to support thousands of salespeople with various skill levels.

• Improved demand forecasting, planning, logistics management, and


inventory management
• Overall reduction in quality-related costs due to faster product
performance feedback
• Improved workflow and escalation of customer grievances for faster
resolution
• Increased revenue growth from both higher vehicle sales and a rise in
the company's after-sales parts business

Limitations of the Study


Since the road to improvement is never ending, so this study also suffers from
certain limitations. Some of them are as follows:

 Because of illiteracy, it was a time consuming method in which


continuous guidance was required.

 Questionnaire method involves some uncertainty of response. Co-


operation on the part of informants, in some cases, was difficult to
presume.

 It is possible that the information supplied by the informants may be


incorrect. So, the study may lack accuracy.
CONCLUSION

The price of a car is just one-third of what it cost you over its lifetime. Running and
maintaining it make up the other two-thirds. Take into account resale value and its
real cost becomes clear. Maruti Suzuki stands for value as much as it stands for
performance. In spite of rising input costs, we try our best to keep prices down.
Their running costs and resale values are unbeatable too. Nothing matches the
delight their cars deliver. In the JD Power CSI study 2005, 85% of Maruti Suzuki
owners stated that they would definitely recommend the car they drive to someone
else. Infact, you don’t buy a Maruti Suzuki. You invest in it.

After the rash of new cars launches the past two years, the relative lull in the auto
industry is showing up in the customer satisfaction indices. According to the 2005
four-wheeler Total Customer Satisfaction (TCS) study conducted by the specialist
division of TNS Automotive, the automobile ownership experience or customer
ownership experience has declined in all areas compared to 2004. The study is one
of the largest syndicated automotive studies in India, representing the responses of
more than 7,000 new car buyers. The comprehensive study covers over 50 models
with customer evaluations taken in the key areas of sales satisfaction, product
quality, vehicle performance and design, after-sales service, brand image, and cost-
of-ownership. The TCS index score provides a measure of satisfaction and loyalty a
given model enjoys with its customers. According to TNS Automotive, the decline
is predominantly for older, small and entry mid-size car models. The ageing of these
models seems to be posing a stiffer challenge for manufacturers to sustain past
performance levels at a time when customer expectations are rising sharply.
The study reveals a significant increase in the importance of sales satisfaction,
product quality (both performance and design) and brand image since 2003,
indicating rising customer expectations over the years. This year's study shows the
Maruti Suzuki Swift and the Toyota Innova as the winners, with the two vehicles
achieving segment-best ratings by performing well in areas of greater relevance,
particularly product and brand image. Sales satisfaction is weak in both these
models, largely because of the longer waiting time for new deliveries.
TNS Automotive's TCS Study has, since its inception in 2002, surveyed over 25,000
car buyers and hasbuilt a sizeable sample base. Some of the key findings, indicators
and inferences from the 2005 study are:

Progressive reduction in car ownership cycle-time from an average of 61 months in


2002 to 53 months in 2005: This shortened cycle-time is bringing these owners for
repeat purchases sooner and will, therefore, further fuel the growth of the four-
wheeler market. This trend is already visible in the growing additional/replacement
purchases. Growth in additional (multi-car households) and replacement purchases
up from 51 per cent in 2002 to 65 per cent in 2005: This will impact the volume
growth in higher-end segments as the current car owners show upward mobility.
Increasing budget for future purchases: Future intenders with a budget of Rs 6 lakh
plus have increased from 44 per cent in 2002 to 58 per cent in 2005. While first-time
buyers are declining as a composition of total volumes, the figure in absolute terms
is high, fuelled by the up-gradation by two-wheeler owners The study also throws
up the question as to whether it is also possible that the first-time car buyer who is
generally a two-wheeler owner, is getting more fuel efficiency conscious and
tending towards postponing the car purchase decision due to the high cost of fuel. Of
course a shift in composition is also to be expected with the upper premium compact
and mid-size segments projected to grow at a much faster rate than rest of the
industry. The TCS study was conducted from August through October across 21
cities. Small sample models have not been featured in the charts. These include the
Fiat Petra Diesel, Ford Fusion, Ford Mondeo, Hyundai Terracan, Maruti Esteem
Diesel, Maruti Suzuki Grand Vitara, Maruti Zen Diesel, and Opel Corsa Sail. TNS
has a global network spanning 70 countries and is listed on the London Stock
Exchange.

Maruti Udyog Ltd is one of India 's leading automobile manufacturers and
the market leader in the car segment, both in terms of volume of vehicles sold
and revenue.

Good Technology

Uniform Pricing

Good Strength

More Coverage Area

Frequent /Regular Product Launch

Market Leader (with 47% share)

Oriented Driven Company

More Product Offering


Healthy Annual Report

Brand Image

Maximum Dealership as compared to other brands

Good Sale Service

Spare parts are cheap as compared to any other brand

Cheap & reliable quality

AREAS FOR IMPOVEMENT / RECOMMENDATION

Facade/Quality of Dealership should be improve

Uniform of Sales Executives

Proper visiting cards should be available to the executives

Mostly dealers don’t have their specific website

All Japanese 5’s concept (Seiro, Sieton, Sciso, Seioetse, Shitsuke)


should be put into practice at Dealership

Maruti should regard as generous discount offers during Festival


Season like Navratra, Dusshera, and Diwali to gear-up their sales

Maruti should advertise in Sports because sports are increasingly


cutting into the share of mass entertainment channels

Maruti can start Money Bond Scheme instead of giving Cash


Discount with more value. Customers eligible for an income bond,
encashable after a 15year period.
BIBLOGRAPHY

Reference Books, Journals, Newspaper, Web Sites, Reports, etc are to be


listed, out here

Books
Kotler Philips, Marketing Management Analysis, Planning Implementation
& Control Edition 1998. Prentice hall of India Ltd. New Delhi

Magazines Jourals & Newapaper

Name of the articles, Business Today: 15-22May 2000

Name of the articles, The times of India . Mumbai: 21st May 2000

www.google.com

www.yahoo.com

www.maruti.com