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Mr. R.C Bhargava Mr. Shinzo Nakanishi
BRIEF HISTORY •The time when scooters had a waiting period. •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. •MUL launched its first car Maruti800 on December 14, 1983 at initial price of Rs. 47,500.Mr. Harpal Singh, the first Maruti owner, still drives the car after 26 years.
Openness and Learning . A pride of India” Core Values • • Customer Obsession. • • • Innovation and Creativity. Flexible. Fast. & Fast Mover.Vision and Core Values “The leader in the Indian automobile Industry. Creating Customer Delight and Share holder’s Wealth. Networking and Partnership.
2001 JD power customer Satisfaction index Award. 1996 1. 2002 JD power customer Satisfaction index Award. 2007 Launched SX4 Luxury sedan and SUV Grand Vitara. 1987 Maruti goes overseas. 2005 JD power customer Satisfaction index Award. 2001 Maruti versa launched . 2002 Maruti finance and insurance launched. 2007 JD power customer Satisfaction index Award 2008 World premier of concept A-Star at Auto Expo . 2005 Launched Swift. 1993 Launched Maruti Zen “the world’s car”. 2000 JD power customer Satisfaction index Award. 2003 Maruti gets listed on BSE and NSE (IPO Oversubscribed 11. New Delhi 2008 JD power customer Satisfaction index Award. exported 500 cars to Hungary.5%. Milestones .5 million vehicles rolled out. 2008 Launched M800 LPG. 1992 Suzuki Motor Company increases stake in MUL to 50 %.1983 “The people’s car is born”. 2006 JD power customer Satisfaction index Award. 1990 Launched India’s first sedan. 2004 JD power customer Satisfaction index Award. (Esteem). Suzuki Motor Company increases stake in MUL to 54. Maruti true value launched. 2002 Disinvestment.2 times). 2003 JD power customer Satisfaction index Award.
•The company advertised its different products according to costumers. •Market segmentation policy was adopted that targeted different type of consumers with different type of models.MARKETING STRATEGY OF MUL IN LATE 1980’s •Maruti was the first company in India which studied the consumer demand and responded to it well. • Maruti800 targeted medium income group. •This resulted in complete control of maruti over the market . •A special cell was made to make direct dealing of Gypsy with the government & the army. •Maruti van targeted businessmen and doctors(ambulance) •The Gypsy targeted the paramilitary forces and the police. . while the deluxe model targeted rich income group.
Impacts •The Indian consumer now started buying the mid-size cars rather than small cars . Mitsubhisi and Toyota were already established in the market . TATA.The changing Auto Industry After year 2000. 2. .the luxury cars also gained popularity.the small cars were not considered to be luxury item any more. Banks and other financing companies started providing car loans at reasonable interest rate.so replacing them was not easy. so when in late 1990’s the new players like when Matiz. then Maruti lost a major share of market.the other player like GM. SUV’s also started coming in the market. Mahindra . Maruti Suzuki was far behind in luxury and SUV car .(and 2003 to be more precise)there was a change in automobile market which where due to 1.at same price. Santro and Indica came into the market with more space and better comfort . THE MAJOR FAULTS The MUL depended more on its M800 model. •The increasing level of income of urban people . The government has reduced regulation on the industry and more foreign players were invited.
. MUL introduced the '2599' offer under which a consumer could buy an M-800 by paying an EMI of Rs 2. MUL entered into an agreement with the State Bank of India (SBI). •During 2003 and 2004. These small segment car gained huge response for consumers.it provided vehicle insurance at just Rs 1 to attract the customers. MUL visualized and implemented a strategy for its dealers to increase their profitability levels in view of increased competition. •Maruti also made a slogan “count on us”.599 only.000. • '2599' offer-In 2004. advertisement such as of Alto in which a small boy says to his father ”papa ki karan petrol khatam hi nahi honda” was make customer feel that Alto was best fuel efficient. increase the salaries of their sales agents. According to the strategy. and offer them better incentives. •In 2003 Maruti came up with “change your life campaign” . the largest bank in India.THE RESPONSE S OF MARUTI •To gain back its lost share Maruti launched Zen . the 300 plus -odd dealers of the company were asked to strengthen their manpower. The down payment was fixed at Rs 40.Alto and WagonR. To emphasize its reliability. •Maruti also launched aggressive promotional policy to promote them like announcing Zen as the “world’s car”. to promote this scheme. for a period of seven years.
. in turn.THE RESPONSE S (continued) •Promotion •Advertisements targeting different segments Promotional offers through out the years Psychographics is used : • Wagon-R : Smarter people (executives) • Omni : People who need to transport goods • Alto : Small car : small family • Zen Estillo : Young trendy people •Supply Chain •The joint initiatives taken by Maruti and its team of suppliers have generated over 29% cost reduction over three years for Maruti Less than 20 per cent of a car is manufactured in-house. supply to them. The rest is accounted for by 215 suppliers and hundreds of second and third tier of vendors who.
Maruti Suzuki’s Current Profile A. A partnership with Suzuki. Manesar) E. C. Annual capacity of about 650. Prahlad's concept of finding value at the bottom of the pyramid. Former Managing Director. "I believe in Dr. One of its its newest models. and Swift. There is still a very large segment of our population which cannot afford a car. Maruti Suzuki India is India's leading maker of automobiles. C.Jagdish Khattar.000 cars. the company makes models such as the Alto. Delhi. K. in 2004. MUL." . . Maruti Suzuki also exports selected models to many European markets. entry-level sedan that offers a variety of modern features. is a compact. D.(Gurgaon. the Swift Dzire. Gypsy. B. Maruti Suzuki enjoys just over a 50% share of its domestic market. We are trying to increase market penetration through several innovative schemes.
Maruti Suzuki’s Current Market Facts .
Cost leadership in the market due to efficient value chain and manufacturing plants. R&D facilities and Japanese collaboration. 2. purchase and exchange of pre-owned cars. ‘Maruti True Value’ is the largest organised pre-owned car sales network in India. Manufacturing-Related KSF’s 1. Suzuki internationally known for Small cars 3. The record sales performance was affected through the Company's vast dealership network. Designing cars best suited for Indian market. . C. Distribution-Related KSF’s 1. which are engaged in the sale. Car sales outlet increased to 600 covering 393 cities. 3.Maruti Suzuki’s Key Success Factors(KSF’s) A.STAR and SPLASH B. There are 265 ‘Maruti True Value’ outlets spread across 166 cities. 2. Launch of World class quality cars like A. 2. Technology-Related KSF’s 1.
Pan-India service network. Marketing-Related KSF’s 1. covering 1220 cities. . The service network had a total of 2. 2. Swift. Full range of cars. E. Wagon R. SX4 and Sports Utility vehicle GrandVitara.from entry level Maruti 800 & Alto to stylish hatchback A.D. Skills and Capability -Related KSF’s 1.star. Estillo and sedans DZire. Communication through advertisement is totally to the need of indian culture 3.628 service outlets including dealer workshop as well as Maruti Authorised Service Stations.
One can buy. It is a market place for used Maruti Vehicles. Maruti Insurance This service started as a benefit or value addition to customers and was able to ramp up easily. Maruti Finance To promote its bottom line growth. B.Maruti claims that its finance program offers competitive interest rates to its customers. . which are lower by 0. C. D.Maruti Suzuki’s Brand Equity A.25% to 0.5% from the market rates. Authorized Service Stations Maruti is one of the companies in India which has unparalleled service network. By December 2005 they were able to sell more than two million insurance policies since its inception. sell or exchange used Maruti vehicles with the help of this service in India. To ensure the vehicles sold by them are serviced properly Maruti has 2628 listed Authorized service stations and 30 Express Service Stations on 30 highways across India. Maruti TrueValue Maruti True service offered by Maruti Udyog to its customers. Maruti launched Maruti Finance in January 2002.
This fleet management service include end-to-end solutions across the vehicle's life. Maintenance. fog lamps. F. Maruti Driving School As part of its corporate social responsibility Maruti Udyog launched the Maruti Driving School in Delhi. Accessories Maruti started a new initiative under the brand name Maruti Genuine Accessories to offer accessories like alloy wheels. Later the services were extended to other cities of India as well. These schools are modelled on international standards. stereo systems. These products are sold through dealer outlets and authorized service stations throughout India. . Many international practices like road behaviour and attitudes are also taught in these schools. body cover. Before driving actual vehicles participants are trained on simulators. where learners go through classroom and practical sessions. which includes Leasing. door visors. carpets.E. Convenience services and Remarketing. seat covers and other car care products. N2N Fleet Management N2N is the short form of End to End Fleet Management and provides lease and fleet management solution to corporate. G.
3.Export Small Cars. Increasing Middle Class Income. Brand Loyalty 2. 2. Threats 1.Service and Distrbution Network 3.Strength 1. 2. Opportunities 1. 2. Japanese Technology Weakness 1. Foreign Brands. Changing Customer Preferences. . Attraction Of Youth.Fuel Prices. Appears Daddy’s Brand.
Currently. Strong support in R & D and Product from parent MUL’s strength lies in the strong parentage of SMC. •Commonality of platformsCommonality between the platforms of various models lead to lower product development efforts and higher benefits of economies of scale. engine and transmission assembly. •Presence across segments In a car manufacturing plant. uses only two platforms. •True Value Operations MUL providing its customers an opportunity to resale their car to MUL or exchange with a new Maruti car under its “True Value” network has proven really beneficial. MUL has 500 sales outlets that cover 312 cities. In FY07 True Value network touched 10000 units a month and more than 90% of that resulted in the exchange of a new car. and machine shop are used for manufacturing different models.Competitive Advantage of MUL •Dealer network across the country wide dealership network allows the company to service customers over a wider geographical area than competitors. . as compared to 162 outlets of Hyundai Motors and 140 outlets of Tata Motors. Japan. the press shop. paint shop.
PRODUCT MIX Small Cars MUV’s SUV’s Hatch-Backs .
Five Forces Model of Competitive Environment FIRMS IN OTHER INDUSTRIES OFFERING SUBSTITUTE PRODUCTS (Moderate) SUPPLERS Bargaining Power RIVALRY AMONG Industry Buyers Bargaining Power (Moderate) (High) (High) POTENTIAL NEW ENTRANTS (Moderate) .
Though the market growth has been impressive in the last few years (about 8 to 15%). Aggressive pricing is needed to sustain growth in such situations. High Fixed costs When total costs are mostly fixed costs. it takes a beat in even slight economic disturbances as it involves a luxury good. Slow market growth In growing market. high levels of production lead to a fight for market share and results in increased rivalry. Low switching costs Free switching between products makes it difficult for the companies to capture customers. firms can improve their economies. C. the purchase of the product involves a good amount of decision making. Industry Rivalry A. B. The industry is typically capital intensive and thus involves high fixed costs. the firm must produce capacity to attain the lowest unit costs. Since. .1. Since the firm must sell this large quantity of product.
Difficult to measure since repurchases are rare. B. Buyer Power A. Increasing Two wheelers/Motor Cycle Market.( Local trains. Buyers get incentives in the form of cost discounts and better after sales services. the sales volumes have shown increasing trend over past so many years.2. When buyer power is strong. For Maruti . Also the high availability and quality of services offered by Maruti gives the customer a better trade-off. Threat of substitutes A. C. B. the buyer is the one who sets the price in the market. . Metros. Because of rising fuel prices. 3. Buses) Maruti ‘s Advantage Price performance comparison favours heavily towards Maruti in most product categories. Public Transportation.
General Components and various Suppliers. Substitute inputs are restricted to non critical or additional components like electronic gadgets and interior design components. The industry being capital intensive switching costs of suppliers Is high. High Supplier Power Low Supplier Power Steel is a major input in this industry and so steel prices have a sharp and immediate impact on the product price. Supplier Power Critical Components and Few Suppliers. .4. other than steel as raw material which is highly price sensitive and the firm may easily move towards a supplier with lower cost.
parts operations and so on. supply chain. Economies of scale Economies of scale are becoming increasingly important as competition is driving the profit margins to lower levels. quality processes. Also being a capital intensive industry economies of scale have important consequences .5. Maruti Suzuki has been rated first in customer satisfaction for eight years in a row. information technology. Barriers to Entry / Threat of Entry Government policies Encouragement of competition by the new policies and to avoid monopolistic Activities. Liberal policies for foreign brands to enter into India. Its contribution to global design projects has been recognised. Patents and Proprietary knowledge Maruti’s R&D capability has evolved. first with the Swift and now the Concept A-Star. Let us do more. Further. The same applies to the dealer practices.
Maruti Suzuki has said that it has reported a 26. exports almost doubled to 15.200-crore investment will add to the already earmarked Rs 9. Suzuki plans to up capacity to one million units by year 2010. and engineering strategies for India. product. Suzuki Motor Corp still produces 1. The Indian operations of the company are not anywhere near Suzuki Motor Corp’s output numbers.200 crore for upgrading Maruti Suzuki's marketing and research facilities in the country. expected to spruce up manufacturing facilities in India.79. the revamp would also include the company’s research and development and engineering functions being upgraded. reportedly.171 units.2 million vehicles. Meanwhile. Source: The Hindu . Aimed at establishing spare parts depots. The company posted a net profit of Rs 466.SUZUKI REDRAWS INDIA PLAN Suzuki Motor Corp is. The Rs 7.95 per cent increase in net profit for the quarter ended September 30. While domestic sales went up 17. marketing. and display showrooms for the million units that will be produced in India.5 crore. the car major effected a major organizational revamp and is all set to pump in an additional Rs 7. rethinking its India plans in line with market dynamics. while Maruti Suzuki is yet to reach even the million-unit mark.8 per cent to 1. vehicle stockyards. aided by a double-digit growth in its domestic market sales.154 units. As a first step. The company plans to set up a new research and development centre in the northern state of Haryana. Suzuki plans to rework its investment.000 crore.
Company would capitalise on Suzuki’s research and development capabilities and internal resources to finance its expansion.Current and Future Market Strategies Design small cars suitable for the Indian conditions as a strategy to beat the stiff competition with the entry of global auto makers. . thereby cushioning itself from the higher interest rates and borrowing costs and become cost competitive. Maruti Suzuki is looking to make India an exclusive base to manufacture small cars for Europe. Company’s plan to stay away from the ultra low-cost segment.
Auto industry experts have attributed this growth to the massive discounts offered by Maruti on its models.005 cars last month. Its three hot selling models the DZire. the Maruti Swift. as against 63. in order to meet growing demand. 2009 After three months of declining sales. The company increased its production in January and is continuing the same this month. is expecting a sales growth of between 5 and 7 per cent in February as well.6 per cent in January. The bank announced yesterday that it had tied up with Maruti to finance the company’s vehicles. Maruti Suzuki sales up 5. The company sold 67. becoming the fastest car model to reach that milestone. crossed the 3 lakh sales mark this week. Maruti Swift touches 3 lakh sales mark Tuesday February 17. Maruti ties up with Corporation Bank Friday February 6. It took Maruti 3 years and 6 weeks to sell 3 lakh units of the Swift. 2009 Maruti Suzuki’s premium hatchback. is being set up. . in India. known as the ‘Swift Life’.Current Maruti Suzuki’s India News Maruti expects to grow 5-7 per cent in February 2009 Tuesday February 17. the country’s biggest carmaker – Maruti Suzuki too has decided to work with the Corporation Bank to sell its cars. 2009 Following Hyundai’s tie-up with Syndicate Bank and Tata Motors’ tie up with the State Bank of India. others go down Tuesday February 3. Maruti Suzuki has registered a growth of 5.253 units in the corresponding period the previous year. 2009 Maruti Suzuki India Limited (MSIL).6 per cent in domestic sales in January 2009. Company representatives said that an online club for all Swift owners. after reporting the highest ever monthly sales in January this year.
Promoting Green Procurement Maruti Suzuki is also encouraging its customers to act upon environment friendly approach. such sessions are also held at all possible places comprising people from all arenas of the car industry. . The company is in continuous process of promoting 100% recyclable and reusable car parts. education. Maruti Suzuki also promotes energy conservation. Along with the suppliers. Even at the supplier’s end the company conducts regular training and education programmes. It also targets reducing fresh water consumption and implement rain water harvesting. the adoption of energy saving technologies has increased tremendously. and improvements on the shop floor. It does this through various initiatives. and recycle. reuse.Maruti Suzuki Heads with a Green Approach Practicing 3R Maruti Suzuki defines 3R as reduce. In recent years. Promoting Energy Conservation Excelling in spreading the need of eco-friendly car technologies for car industry.
and the risk of making large borrowings to finance capital costs. will not affect us. whether they are technicians.Chairman Maruti Suzuki is now very much on the global map. . The higher interest rates. and placing the prosperity of the Company as the means of their own advancement. engineers or sales persons. This has happened because of the Contribution of all the stakeholders of Maruti. have fully imbibed the Japanese work culture of making constant improvement. recently being rated as the fourth most reputed automobile company in the world.“ --Chairman "The employees of Maruti.Some Word About MARUTI SUZUKI INDIA LIMITED (MSIL) "One of Maruti's great strengths is that we have internal resources to finance both R&D expansion as well as capital investments.“ --.
E (2009) +91 99861 38338 .S.M.THANK YOU “Count on us” Ankit Jhamtani 081206 I.
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