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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.
Creating Customer Delight and Share holder’s Wealth. A pride of India” Core Values • • Customer Obsession. Fast.Vision and Core Values “The leader in the Indian automobile Industry. Networking and Partnership. • • • Innovation and Creativity. & Fast Mover. Openness and Learning . Flexible.
2007 Launched SX4 Luxury sedan and SUV Grand Vitara. 2003 JD power customer Satisfaction index Award. 2008 Launched M800 LPG. 2002 JD power customer Satisfaction index Award.5 million vehicles rolled out. (Esteem). 1993 Launched Maruti Zen “the world’s car”. 1990 Launched India’s first sedan. 2005 Launched Swift. Suzuki Motor Company increases stake in MUL to 54. 2000 JD power customer Satisfaction index Award. 2003 Maruti gets listed on BSE and NSE (IPO Oversubscribed 11. exported 500 cars to Hungary. New Delhi 2008 JD power customer Satisfaction index Award. 2004 JD power customer Satisfaction index Award. 1992 Suzuki Motor Company increases stake in MUL to 50 %. 2007 JD power customer Satisfaction index Award 2008 World premier of concept A-Star at Auto Expo .2 times). 1996 1. 2002 Maruti finance and insurance launched. 2006 JD power customer Satisfaction index Award.1983 “The people’s car is born”.5%. 2002 Disinvestment. 1987 Maruti goes overseas. Milestones . 2005 JD power customer Satisfaction index Award. 2001 JD power customer Satisfaction index Award. Maruti true value launched. 2001 Maruti versa launched .
•Maruti van targeted businessmen and doctors(ambulance) •The Gypsy targeted the paramilitary forces and the police. •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. •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. •The company advertised its different products according to costumers. • Maruti800 targeted medium income group. . while the deluxe model targeted rich income group.
Mitsubhisi and Toyota were already established in the market . THE MAJOR FAULTS The MUL depended more on its M800 model.the other player like GM. so when in late 1990’s the new players like when Matiz. Impacts •The Indian consumer now started buying the mid-size cars rather than small cars . Santro and Indica came into the market with more space and better comfort . Banks and other financing companies started providing car loans at reasonable interest rate. •The increasing level of income of urban people . . then Maruti lost a major share of market. SUV’s also started coming in the market.the luxury cars also gained popularity. 2.the small cars were not considered to be luxury item any more. The government has reduced regulation on the industry and more foreign players were invited.The changing Auto Industry After year 2000. Mahindra .so replacing them was not easy. TATA.(and 2003 to be more precise)there was a change in automobile market which where due to 1. Maruti Suzuki was far behind in luxury and SUV car .at same price.
These small segment car gained huge response for consumers. to promote this scheme.Alto and WagonR. The down payment was fixed at Rs 40.599 only. •During 2003 and 2004.THE RESPONSE S OF MARUTI •To gain back its lost share Maruti launched Zen . • '2599' offer-In 2004. and offer them better incentives. •In 2003 Maruti came up with “change your life campaign” . MUL entered into an agreement with the State Bank of India (SBI). the 300 plus -odd dealers of the company were asked to strengthen their manpower. •Maruti also made a slogan “count on us”. MUL visualized and implemented a strategy for its dealers to increase their profitability levels in view of increased competition. for a period of seven years. 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. the largest bank in India.it provided vehicle insurance at just Rs 1 to attract the customers.000. increase the salaries of their sales agents. . MUL introduced the '2599' offer under which a consumer could buy an M-800 by paying an EMI of Rs 2. •Maruti also launched aggressive promotional policy to promote them like announcing Zen as the “world’s car”. According to the strategy. To emphasize its reliability.
in turn. supply to them.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. The rest is accounted for by 215 suppliers and hundreds of second and third tier of vendors who. .
and Swift. One of its its newest models. D. MUL. "I believe in Dr. Gypsy. entry-level sedan that offers a variety of modern features. the company makes models such as the Alto. Prahlad's concept of finding value at the bottom of the pyramid. Delhi. is a compact. . Former Managing Director. in 2004." . Maruti Suzuki India is India's leading maker of automobiles. K. the Swift Dzire.(Gurgaon. Maruti Suzuki also exports selected models to many European markets. Annual capacity of about 650. C. C.Maruti Suzuki’s Current Profile A.Jagdish Khattar. B. A partnership with Suzuki.000 cars. Maruti Suzuki enjoys just over a 50% share of its domestic market. There is still a very large segment of our population which cannot afford a car. We are trying to increase market penetration through several innovative schemes. Manesar) E.
Maruti Suzuki’s Current Market Facts .
2. purchase and exchange of pre-owned cars. There are 265 ‘Maruti True Value’ outlets spread across 166 cities. Suzuki internationally known for Small cars 3. 3. Designing cars best suited for Indian market. Cost leadership in the market due to efficient value chain and manufacturing plants.Maruti Suzuki’s Key Success Factors(KSF’s) A. Car sales outlet increased to 600 covering 393 cities. C. which are engaged in the sale. R&D facilities and Japanese collaboration.STAR and SPLASH B. Manufacturing-Related KSF’s 1. . 2. 2. ‘Maruti True Value’ is the largest organised pre-owned car sales network in India. Distribution-Related KSF’s 1. Technology-Related KSF’s 1. The record sales performance was affected through the Company's vast dealership network. Launch of World class quality cars like A.
Swift.star. Wagon R.628 service outlets including dealer workshop as well as Maruti Authorised Service Stations. . The service network had a total of 2. E. covering 1220 cities. Pan-India service network. Estillo and sedans DZire. 2. Skills and Capability -Related KSF’s 1. SX4 and Sports Utility vehicle GrandVitara. Communication through advertisement is totally to the need of indian culture 3. Marketing-Related KSF’s 1.D.from entry level Maruti 800 & Alto to stylish hatchback A. Full range of cars.
Maruti Suzuki’s Brand Equity A. C. Maruti Finance To promote its bottom line growth. One can buy. Authorized Service Stations Maruti is one of the companies in India which has unparalleled service network. B. Maruti launched Maruti Finance in January 2002.5% from the market rates.25% to 0. Maruti Insurance This service started as a benefit or value addition to customers and was able to ramp up easily. . Maruti TrueValue Maruti True service offered by Maruti Udyog to its customers. which are lower by 0. It is a market place for used Maruti Vehicles. 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. D. 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.Maruti claims that its finance program offers competitive interest rates to its customers.
carpets. N2N Fleet Management N2N is the short form of End to End Fleet Management and provides lease and fleet management solution to corporate. body cover. Maintenance. G.E. This fleet management service include end-to-end solutions across the vehicle's life. Convenience services and Remarketing. stereo systems. fog lamps. door visors. These products are sold through dealer outlets and authorized service stations throughout India. . Accessories Maruti started a new initiative under the brand name Maruti Genuine Accessories to offer accessories like alloy wheels. Many international practices like road behaviour and attitudes are also taught in these schools. Before driving actual vehicles participants are trained on simulators. Maruti Driving School As part of its corporate social responsibility Maruti Udyog launched the Maruti Driving School in Delhi. These schools are modelled on international standards. which includes Leasing. where learners go through classroom and practical sessions. Later the services were extended to other cities of India as well. seat covers and other car care products. F.
Threats 1.Service and Distrbution Network 3.Export Small Cars. .Strength 1. Appears Daddy’s Brand. Japanese Technology Weakness 1. Brand Loyalty 2.Fuel Prices. Attraction Of Youth. Foreign Brands. Changing Customer Preferences. 2. Increasing Middle Class Income. 3. 2. Opportunities 1. 2.
•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. and machine shop are used for manufacturing different models. . the press shop. •Commonality of platformsCommonality between the platforms of various models lead to lower product development efforts and higher benefits of economies of scale.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. engine and transmission assembly. MUL has 500 sales outlets that cover 312 cities. Currently. Strong support in R & D and Product from parent MUL’s strength lies in the strong parentage of SMC. In FY07 True Value network touched 10000 units a month and more than 90% of that resulted in the exchange of a new car. uses only two platforms. •Presence across segments In a car manufacturing plant. Japan. paint shop. as compared to 162 outlets of Hyundai Motors and 140 outlets of Tata Motors.
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) .
B. high levels of production lead to a fight for market share and results in increased rivalry.1. High Fixed costs When total costs are mostly fixed costs. C. Since the firm must sell this large quantity of product. Low switching costs Free switching between products makes it difficult for the companies to capture customers. Slow market growth In growing market. Since. Industry Rivalry A. The industry is typically capital intensive and thus involves high fixed costs. it takes a beat in even slight economic disturbances as it involves a luxury good. the firm must produce capacity to attain the lowest unit costs. the purchase of the product involves a good amount of decision making. Aggressive pricing is needed to sustain growth in such situations. . Though the market growth has been impressive in the last few years (about 8 to 15%). firms can improve their economies.
Increasing Two wheelers/Motor Cycle Market. 3. C. Threat of substitutes A. B. Public Transportation. the buyer is the one who sets the price in the market. Buyers get incentives in the form of cost discounts and better after sales services. Because of rising fuel prices.2. Buses) Maruti ‘s Advantage Price performance comparison favours heavily towards Maruti in most product categories. Also the high availability and quality of services offered by Maruti gives the customer a better trade-off. Difficult to measure since repurchases are rare. the sales volumes have shown increasing trend over past so many years.( Local trains. For Maruti . When buyer power is strong. Metros. B. Buyer Power A. .
. Supplier Power Critical Components and Few Suppliers.4. Substitute inputs are restricted to non critical or additional components like electronic gadgets and interior design components. General Components and various Suppliers. other than steel as raw material which is highly price sensitive and the firm may easily move towards a supplier with lower cost. 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.
Economies of scale Economies of scale are becoming increasingly important as competition is driving the profit margins to lower levels. Further. The same applies to the dealer practices. parts operations and so on. quality processes. Let us do more. supply chain. Liberal policies for foreign brands to enter into India. Its contribution to global design projects has been recognised. Maruti Suzuki has been rated first in customer satisfaction for eight years in a row.5. first with the Swift and now the Concept A-Star. Also being a capital intensive industry economies of scale have important consequences . Barriers to Entry / Threat of Entry Government policies Encouragement of competition by the new policies and to avoid monopolistic Activities. Patents and Proprietary knowledge Maruti’s R&D capability has evolved. information technology.
SUZUKI REDRAWS INDIA PLAN Suzuki Motor Corp is. The company plans to set up a new research and development centre in the northern state of Haryana. The Indian operations of the company are not anywhere near Suzuki Motor Corp’s output numbers. the revamp would also include the company’s research and development and engineering functions being upgraded. Source: The Hindu .000 crore.5 crore. vehicle stockyards. marketing.8 per cent to 1. While domestic sales went up 17. and display showrooms for the million units that will be produced in India. The company posted a net profit of Rs 466. while Maruti Suzuki is yet to reach even the million-unit mark. Suzuki plans to rework its investment. reportedly. expected to spruce up manufacturing facilities in India.2 million vehicles.79. Aimed at establishing spare parts depots. rethinking its India plans in line with market dynamics.200 crore for upgrading Maruti Suzuki's marketing and research facilities in the country.154 units. Suzuki plans to up capacity to one million units by year 2010. The Rs 7.171 units. Meanwhile. the car major effected a major organizational revamp and is all set to pump in an additional Rs 7. Suzuki Motor Corp still produces 1. exports almost doubled to 15. and engineering strategies for India. product.95 per cent increase in net profit for the quarter ended September 30. Maruti Suzuki has said that it has reported a 26. aided by a double-digit growth in its domestic market sales.200-crore investment will add to the already earmarked Rs 9. As a first step.
thereby cushioning itself from the higher interest rates and borrowing costs and become cost competitive.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. Company would capitalise on Suzuki’s research and development capabilities and internal resources to finance its expansion. Company’s plan to stay away from the ultra low-cost segment. Maruti Suzuki is looking to make India an exclusive base to manufacture small cars for Europe. .
known as the ‘Swift Life’. Maruti ties up with Corporation Bank Friday February 6. the Maruti Swift. It took Maruti 3 years and 6 weeks to sell 3 lakh units of the Swift. The bank announced yesterday that it had tied up with Maruti to finance the company’s vehicles. the country’s biggest carmaker – Maruti Suzuki too has decided to work with the Corporation Bank to sell its cars. Maruti Swift touches 3 lakh sales mark Tuesday February 17. Maruti Suzuki has registered a growth of 5. as against 63. 2009 Maruti Suzuki India Limited (MSIL).253 units in the corresponding period the previous year. Its three hot selling models the DZire. 2009 Maruti Suzuki’s premium hatchback. Maruti Suzuki sales up 5. The company increased its production in January and is continuing the same this month. Company representatives said that an online club for all Swift owners. 2009 Following Hyundai’s tie-up with Syndicate Bank and Tata Motors’ tie up with the State Bank of India.Current Maruti Suzuki’s India News Maruti expects to grow 5-7 per cent in February 2009 Tuesday February 17. in order to meet growing demand.005 cars last month. .6 per cent in domestic sales in January 2009. after reporting the highest ever monthly sales in January this year. is being set up. 2009 After three months of declining sales.6 per cent in January. in India. becoming the fastest car model to reach that milestone. is expecting a sales growth of between 5 and 7 per cent in February as well. Auto industry experts have attributed this growth to the massive discounts offered by Maruti on its models. crossed the 3 lakh sales mark this week. The company sold 67. others go down Tuesday February 3.
Promoting Green Procurement Maruti Suzuki is also encouraging its customers to act upon environment friendly approach. and recycle.Maruti Suzuki Heads with a Green Approach Practicing 3R Maruti Suzuki defines 3R as reduce. education. It also targets reducing fresh water consumption and implement rain water harvesting. Even at the supplier’s end the company conducts regular training and education programmes. Promoting Energy Conservation Excelling in spreading the need of eco-friendly car technologies for car industry. In recent years. and improvements on the shop floor. the adoption of energy saving technologies has increased tremendously. The company is in continuous process of promoting 100% recyclable and reusable car parts. reuse. Maruti Suzuki also promotes energy conservation. Along with the suppliers. . such sessions are also held at all possible places comprising people from all arenas of the car industry. It does this through various initiatives.
The higher interest rates. . will not affect us.“ --. engineers or sales persons. whether they are technicians. This has happened because of the Contribution of all the stakeholders 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.“ --Chairman "The employees of Maruti. have fully imbibed the Japanese work culture of making constant improvement.Chairman Maruti Suzuki is now very much on the global map. recently being rated as the fourth most reputed automobile company in the world. and placing the prosperity of the Company as the means of their own advancement. and the risk of making large borrowings to finance capital costs.
THANK YOU “Count on us” Ankit Jhamtani 081206 I.E (2009) +91 99861 38338 .S.M.
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