Contents

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Particulars
Acknowledgement Company History And Background India Four Wheeler Industry Facts about Indian Car Market Market Scenario (2008-09) Market Segment Analysis Objective of the Company Marketing Mix (Product) Marketing Mix (Price) Marketing Mix (Place) Marketing Mix (Promotion) SWOT Analysis Key Strategic Initiatives By Maruti Factors that influence the consumer s buying decision Business Environment Factors Conclusion Bibliography

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1

Paurak R. Shah (NIS Academy, Ahmedabad)

ACKNOWLEDGEMENT

We take this opportunity to convey our sincere thanks and gratitude to all those who have directly or indirectly helped and contributed towards the completion of this project.

First and foremost, I would like to thank Ms. BinaPatel , NIS Academy for his constant guidance and support throughout this project. During the project, we realized that the degree of relevance of the marketing strategies being imparted in the industry is very high. The marketing strategies study enabled us to get a better understanding of the nitty-gritty of the company.

We would also like to thank my batch mates for the discussions that we had with them. All these have resulted in the enrichment of our knowledge and their inputs have helped us to incorporate relevant issues into our project.

Marutisuzuki India LTD
2
Paurak R. Shah (NIS Academy, Ahmedabad)

5 billion. Maruti is one of the most successful automobile joint ventures. During the initial years Maruti had 883 employees. Shah (NIS Academy. and has made profits every year since inception till 2000-01.The first phase started when Maruti rolled out its first car in December 1983. high depreciation on new model launches resulted in a book loss. 607 mn and profit of Rs. outside Japan and Korea. by which Suzuki acquired 26% of the equity and agreed to provide the latest technology as well as Japanese management practices.modernizing the Indian automobile industry. Suzuki was preferred for the joint venture because of its track record in manufacturing and selling small cars all over the world.MarutiUdyog Limited (MUL) was established in Feb 1981 through an Act of Parliament. It was established with the objectives of . a capital of Rs. Maruti created history by going into production in a record 13 months. which it exercised in 1987. In 2000-01. 1986-1992) and two phases during post-liberalization period (1992-97. having produced over 5 million vehicles by May 2005. Five years later. followed by the full privatization of Maruti in June 2003 with the launch of an initial public offering (IPO). in 1992. producing fuel efficient vehicles to conserve scarce resources and producing indigenous utility cars for the growing needs of the Indian population. There was an option in the agreement to raise Suzuki s equity to 40%. COMPANY HISTORY AND BACKGROUND The Evolution Maruti s history of evolution can be examined in four phases: two phases during pre-liberalization period (1983-86. to meet the growing demand of a personal mode of transport caused by the lack of an efficient public transport system. Ahmedabad) . 3 Paurak R. Maruti is the highest volume car manufacturer in Asia. 1997-2002). Suzuki further increased its equity to 50% turning Maruti into a non-government organization managed on the lines of Japanese management practices. although Maruti generated operating profits on an income of Rs 92. A license and a Joint Venture agreement were signed with the Suzuki Motor Company of Japan in Oct 1983.

Employees grew to 2000 (end of first phase 1986). The path to success translated into practices that Maruti s culture approximated from the Japanese management practices. Large number of Indian managers. Batches of Japanese personnel came over to Maruti to train. supervisors and workers were regularly sent to the Suzuki plants in Japan for training. The Path to Success for Maruti was as follows: (a) teamwork and recognition that each employee s future growth and prosperity is totally dependent on the company s growth and prosperity (b) strict work discipline for individuals and the organization (c) constant efforts to increase the productivity of labor and capital (d) steady improvements in quality and reduction in costs (e) customer orientation (f) long-term objectives and policies with the confidence to realize the goals (g) respect of law. Maruti s style of management was essentially to follow Japanese management practices. Ahmedabad) . 3900 (end of second phase 1992) and 5700 in 1999. ethics and human beings. supervise and manage. Shah (NIS Academy. The profit after tax increased from Rs 18.17 mn without any tax obligation. During the pre-liberalization period (1983-1992) a major source of Maruti s strength was the wholehearted willingness of the Government of India to subscribe to Suzuki s technology and the principles and practices of Japanese management.54 mn in 1998 but started declining during 1997-2001. India Four Wheeler Industry 4 Paurak R. From such a modest start the company in just about a decade (beginning of second phase in 1992) had turned itself into an automobile giant capturing about 80% of the market share in India. 6854.67 mn in 1984 to Rs.

Honda. Fiat India Private Ltd.. to be launched in the car market in India. the rise in the GDP rate. The primary reason for this has been the all-pervasive regulatory atmosphere prevailing till the opening up of the industry in the mid-1990s. The recent trend within the new generation to get work in the software based sector has led to the rise in the income level and change in the lifestyle significantly. 5 Paurak R.. Honda Siel Cars India Ltd. the industry was considered low-priority as cars were thought of as unaffordable luxury". Daimler Chrysler India Private Ltd. the growing per capita income. It is expected that by 2030. BMW. the Indian car market will be the 3rd largest car market across the globe. Bentley and many others. Ford India Ltd. Shah (NIS Academy. Moreover. and high ownership capacity. Moreover. there are many other models of cars in the pipeline. and sports utility vehicles. Post Liberalization. The main encouraging factors for the success story of the car market in India are the increase in the opportunity for new investments. which has further led to the increase in the demand for luxurious cars among them.. The various layers of legislative Acts sheltered the industry from external competition for a long time. which however today gave way to numerous new models like Hyundai. Reva Electric Car Co. The car Market in India is crowded with all varieties of car models like the small cars. Initially the most popular car model dominating the Car Market in India was the Ambassador. The liberalization policies followed by the Indian government had been inviting foreign players to participate in the car market in India. mid-size cars. super luxury cars. Mercedes-Benz. the car market in India have been in a burgeoning stage with all types of cars flooding the market in order to meet the demands of Indian customers who are increasingly exposed to state of the world automobiles and want the best when it comes to purchasing a car.. Some of the leading brands dominating the car market in India at present are Hindustan Motors. luxury cars. Ahmedabad) . massive population.The Four-Wheeler Industry in India has not quite matched up to the performance of its counterparts in other parts of the world.

9 1. employment by the sector as a percentage of industrial employment. Russia also stands ahead than India and China with 16.3 40.9 cars per 100 persons. Ahmedabad) .9 41. and penetration of cars. Ferrari. Among developing countries.9 cars on per 100 persons. number of cars per person. viz...3 cars per 100 persons. Hyundai Motors India Ltd. Facts about Indian Car Market: Although the Indian automobile industry has come a long way since the deregulation in 1993. Skoda Auto India Private Ltd.. and Toyota Kirloskar Motor Ltd.6 16. while Unites States has 76. Volkswagen. and Rolls-Royce have long since made a foray into the Indian car market. Since the demand for foreign cars are increasing with time. big brands like Mercedes Benz.General Motors India. the contribution of the sector to industrial output. Figure:-Passenger vehicle stock per 100 people India is far behind from other countries with just 6. India does not rank well among its global peers in many respects. Aston Martin. Shah (NIS Academy.8 76. 120 100 80 60 40 20 0 INDIA EUROPE US CHIINA JAPAN RUSSIA 6. number of months' income required to purchase a car.3 Series 2 Series 1 6 Paurak R.

Vision The leader in the India Automobile Industry. The service network covers 1. Shah (NIS Academy. assemblers and marketers. Ahmedabad) .The company's change in strategy and emphasis on developing effective marketing communications was their highlights. This has resulted in a significant shift in the way business is conducted by suppliers. bolstered by 2. Creating Customer Delight and Shareholder s Wealth. and global OEMs who enjoy scale economies both in terms of manufacturing and research and development (R&D) entered the Indian market.142 authorized service outlets.Two things that stunted growth of the Indian automobile industry in the past have been low demand and lack of vision on the part of the original equipment manufacturers (OEMs). Maruti has a network of 391 sales outlets across 230 cities all over India. A pride of India Mission To provide maximum value for money to their customers through continuous improvement of products and services. However.113 towns and cities. 7 Paurak R. the demand has picked up after the liberalization of the regulatory environment.

8 Paurak R. Maruti Suzuki sold 764.024 were exported. In all. a subsidiary of Suzuki Motor Corporation of Japan. of which 53. Ahmedabad) . Shah (NIS Academy. Maruti Suzuki India Limited.MARKET SCENERIO (2008-09) The company vouches for customer satisfaction. has been the leader of the Indian car market for over two decades. over six million Maruti cars are on Indian roads since the first car was rolled out on 14 December 1983.842 cars. During 2007-08. For its sincere efforts it has been rated (by customers)first in customer satisfaction among all car makers in India for ten years in a row in annual survey.

Shah (NIS Academy. the Indian auto consumer segment can be sub divided in to 5 categories:  Economy  Mid-Range  Luxury  Premium  Super Premium 9 Paurak R.Market Segment Analysis Based on economic strata. Ahmedabad) .

they retain the brand name of the product through various stages of product upgrades over time. C. styling and features. in terms of technology. Ahmedabad) . to provide what they refer to as the 360 degree customer experience. For example. They sell ten models with more than 50 variants in segments A. Of these. the version of the Maruti 800 brand currently sold in the market is a significantly upgraded version. B. Shah (NIS Academy.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 anticipate and address the customer s needs and preferences in all aspects and stages of car ownership. GRADE A A B B B C C C C Utility Vehicle Utility Vehicle CAR Maruti 800 OMNI Zen Wagon R Alto Esteem Baleno Versa SWIFT GYPSY KING GRAND VITARA 10 Paurak R. of the Maruti 800 launched in 1983. they manufacture nine models and import the Grand Vitara as a completely built unit from Suzuki in Japan. To take advantage of the brand recognition associated with their products. design and styling. Their models and variants are designed to address the changing demands of the market and are periodically upgraded in technology. and utility vehicle segment of the Indian passenger car market.

Gypsy Omni. are also the low price car of the company. quality. 1500000. Zen & Esteem are the mid price car of the company. 210000 to Rs.Class Price Strategy:- Products 800 Alto. But Grand Vitara is the high price model of the company. Shah (NIS Academy. Ahmedabad) . Zen . Sx4 Vitara. Alto. Omni. A-star D ZiRE. Swift. The price of car is decided according to its product variety.Wagon R. design etc. Wagon R. Maruti 800 is the lowest price car of this company. Versa The price of the Maruti car is between Rs. 11 Paurak R.4Ps: Product Price Place Promotion Product Strategy: Portfolio of 12 products Five product lines Product Line A1 A2 A3 SUV C .

628The number of workshops that provide customers with maintenance support in 1220 cities. Tie up with other distributors for Exports. 12 Paurak R. covering 1220 cities. Shah (NIS Academy. 1200 new Maruti Authorized Service Stations in next three years.  Information Advertising. Ahmedabad) . Tie up with Adani group for exporting 200.Sponsorships  TV shows . 2628 Maruti Authorized Service Stations.India s Got talent  Place Advertising Bill boards  Sales Promotions  Product warranties  Premiums (gifts)  Trade shows  2.Place strategy:600 New car sales outlets covering 393 cities. S150 new true value shops in next three years. Promotion Strategy:-  Advertising j TV Ads j Print Ads j Radio Ads GharAa Gaya Hindustan India Comes Home in Maruti Suzuki.000 units through Mnudra port Gujarat Suggested Place strategy:400 new car sales outlets in next three years. alternative Advertising Options  BTL . 265 Maruti True Value outlets spread across 166 cities.

7. Established distribution & after sales network. Understanding of the Indian market. MarutiUdyog Ltd. 4. Brand Image. 9. 3. Heavy import tariff on fully built imported models. 4. 5. People resistant to upper segment models. Shah (NIS Academy. 10.Low maintenance cost of vehicle. 5. 2. is the market leader for more than decade. 6.Better after sales service. 13 Paurak R. Ability to design product with differentiating features. Comparatively new to diesel cars. Global image is not that big. Trust of People. 7. Exports are not that good. Ahmedabad) . 6. 2. Bigger name in the market.SWOT Analysis STRENGTHS 1. 11. 8. WEAKNESSES 1. Experience & Knowledge how in technology. Has a great dealership chain in the market. Lack of experience in foreign market. Lesser diesel models in the market compare to others. 3.

Prospective buyers from two wheeler segment. Opportunity to grow bigger by entering into bigger car markets. There is hardly any diesel models 6. Tax Benefits.OPPURTUNITIES 1. Ahmedabad) . as many big names are coming in the industry 5. 2. 3. Increased purchasing power of Indian middle class family. To the market share. Introduction of more diesel models. 1 lakh Rs. Shah (NIS Academy. Rs. Great opportunities to go global with success of Swift and SX4 allover. Foreign companies entering market. 2. 1. Competition from second hand cars & TATA Nano. 5. The diesel car segment is growing. 7. THREATS 1. 4. Threats from Chinese manufactures. Already a market leader so great opportunity to be the king of market in every stage of industry. so a bigger threat from MNCs. 4. 6.5 lakh car 14 Paurak R. 8. Government subsidies. 3.

Maruti initiated strategic responses to cope with India s liberalization process and began to redesign itself to face competition in the Indian market. Ahmedabad) . PAL. Mitsubishi. At the same time the Indian government permitted foreign car producers to invest in the automobile sector and hold majority stakes. Consultancy firms such as AT Kearney & McKinsey. 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 the wake of its diminishing profits and loss of market share. Shah (NIS Academy. Athreya. Dr. Ford. GM. together with an internationally reputed OD consultant. controlling about 84% of the market till 1998. the whole auto industry structure in India has changed in the last seven years and resulted in the declining profits and market share for Maruti.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. Toyota. Mahindra & Mahindra and foreign players like Daewoo. have been consulted on modes of strategy and organization 15 Paurak R. With increasing competition from local players like Telco. Hindustan Motors. 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 KEY STRATEGIC INITIATIVES BY MARUTI A) TURNAROUND STRATEGIES MARUTI FOLLOWED Maruti was the undisputed leader in the automobile utility-car segment sector.

70. Ahmedabad) . reduce production costs by achieving 85-90% indigenization for new models.CATERING TO ALL SEGMENTS Maruti caters to all segment and has a product offering at all price points. B) CURRENT STRATEGIES FOLLOWED BY MUL PRICING STRATEGY . Their pricing strategy is to provide an option to every customer looking for up gradation in his car. 1987: "Leader in domestic market and be among global players in the overseas market". 16 Paurak R. When Maruti commanded the largest market share. This can be observed from the changes in mission statement of the organization: 1984: "Fuel efficient vehicle with latest technology". Their sole motive of having so many product offering is to be in the consideration set of every passenger car customer in India. Maruti. launches a new model every year. It has a car priced at Rs.00 which is the lowest offer on road. The earlier focus of the whole organization was "production. Here is how every price point is covered.87.1. production and production" but now the focus has shifted to "marketing and customer focus". business focus was to sell what we produce . In its redesign plan. revamp marketing by increasing the dealer network from 150 to 300 and focus on bulk institutional sales. Shah (NIS Academy. 1997: "Creating customer delight and shareholders wealth". 4000 mn expansion project which increased the total production capacity to over 3. there has been a shift in business focus of Maruti.development during the redesign process.000. bring down number of vendors and introduce competitive bidding. Maruti gets 70% business from repeat buyers who earlier had owned a Maruti car. Maruti executed a plan to launch new models for different segments of the market. Together with the redesign plan.000 vehicles per annum. The redesign process saw Maruti complete a Rs.

Psychological Factors y Motivation y Perception y Learning y Beliefs and attitudes 17 Paurak R. Shah (NIS Academy. race. Personal Factors y Economics Circumstances y Occupation y Age & Life Cycle Stage y Lifestyle y Personality and self-concept D.Factors that influence the consumer s buying decision for the product Cultural Social Culture Subculture Social Class Reference group Family Roles and statuses Personal Age and life-cycle stage Occupation Economic circumstances Lifestyle Personality and selfconcept Psychological Motivation Perception Learning Beliefs and attitudes Buyer A. perception. geographical regions y Social class B. Ahmedabad) . religion. Cultural Factors y Value. and preferences y Nationalities. Social Factors y Reference Groups y Social Class y Roles & Status C.

India automotive regulations are closely aligned to world standards on emission & safety. Huge domestic demand. Lower duties & taxes. Stable economic policies.Business Environment Factors Political Factors:1. Automatic approval for FDI in automobile sector. Skilled labour costs amongst the lowest in world. Shah (NIS Academy. India emerging as an automobile hub for automobile manufacturing & research. 3. 3. Four Lakhs pass out every year. Lucrative market in rural India. Government continuously slashing tax rates. 4. Credible local suppliers of high quality components. Ahmedabad) . 2. 2. 2. 2. Relatively High import Duties 18 Paurak R. Weighted tax deduction up to 150% on in house R & D activities. 2. Economic Factors:1. Ecological Factors:1. 5. Technological Factors:1. Rapid urbanization and income levels. 3. Proximity to major export market. Legal Factors:1. 3. 2. Economics incentives by local state Government. Easy availability of finance. Government has launched automotive mission plan (AMP). Social Factors:1.

In the JD Power CSI study 2005. The comprehensive study covers over 50 models with customer evaluations taken in the key areas of sales satisfaction. after-sales service. Maruti Suzuki stands for value as much as it stands for performance. the decline is predominantly for older. 19 Paurak R. small and entry mid-size car models. you don t buy a Maruti Suzuki.CONCLUSION The price of a car is just one-third of what it cost you over its lifetime. brand image. Their running costs and resale values are unbeatable too. 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. vehicle performance and design. According to the 2005 four-wheeler Total Customer Satisfaction (TCS) study conducted by the specialist division of TNS Automotive. we try our best to keep prices down. Ahmedabad) . and cost-of-ownership. Shah (NIS Academy.000 new car buyers. Nothing matches the delight their cars deliver. the relative lull in the auto industry is showing up in the customer satisfaction indices. After the rash of new cars launches the past two years. According to TNS Automotive. representing the responses of more than 7. product quality. Running and maintaining it make up the other two-thirds. The study is one of the largest syndicated automotive studies in India. the automobile ownership experience or customer ownership experience has declined in all areas compared to 2004. The TCS index score provides a measure of satisfaction and loyalty a given model enjoys with its customers. Take into account resale value and its real cost becomes clear. 85% of Maruti Suzuki owners stated that they would definitely recommend the car they drive to someone else. Infact. You invest in it. In spite of rising input costs.

Bibliography BOOKS  PGDAM (Post Graduate Diploma in Applied Management) Book . Shah (NIS Academy. googl e. com 20 Paurak R. com  www. Ahmedabad) . ma ruti suzuk i.Semester 1 (Courseware 3) NEWS PAPERS  THE ECONOMIC TIMES  THE TIMES OF INDIA MAGAZINES  BUSINESS INDIA  INDIA TODAY INTERNET WEBSITES  www.

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