ACHIEVING CUSTOMER SATISFACTION AND SERVICE EXCELLENCE

MARUTI SUZUKI INDIA LIMITED

Submitted By: Rahul Jain Swati K Shukla Saptarshi Ghosh

TABLE OF CONTENT

1. INTRODUCTION 2. CUTOMER CENTRIC APPROACH 3. MANAGEMENT-MARKET ORIENTED 4. CUSTOMER SERVICES 5. CUSTOMERS DEFECTION 6. CUSTOMER SATISFACTION MEASUREMENT 7. WARRANTY PROGRAM 8. COMPETITIVE STRATEGY 9. RECRUITMENT & TRAINING CULTURE 10. HEROIC EXAMPLE 11. CONCLUSION

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MARUTI SUZUKI – AT A GLANCE

Maruti Suzuki India Limited is a publicly listed automaker in India. It is a leading four-wheeler automobile manufacturer in South Asia. Suzuki Motor Corporation of Japan holds a majority stake in the company. It was the first company in India to mass-produce and sell more than a million cars. It is largely credited for having brought in an automobile revolution to India. It is the market leader in India. On 17 September 2007, Maruti Udyog was renamed to Maruti Suzuki India Limited. The company's headquarters remain in Gurgaon, near Delhi.
Products Industry Key people Headquarters Founded Type

Maruti Suzuki India Limited

Public (BSE MARUTI, NSEMARUTI)

1981 [1]

Gurgaon, Haryana, India

Mr. Shinzo Nakanishi,Managing Director and CEO

Automotive

   

Kei Cars/City Cars Compact Cars Microvans Compact SUVs

Maruti Udyog Limited is India's largest automobile company. Its main factory is situated in Gurgaon district, Haryana. The company, is a joint venture with Government of India with Suzuki of Japan has been a success story like no other in the annals of the Indian automobile industry.
Website Revenue Employees Parent

▲US$4.8 billion (2009)
6,903 [2] Suzuki Motor Corporation MarutiSuzuki.com

For the year ended 1997-98, Maruti posted a turnover of US$ 2.1 billion and a Profit before Tax of US$ 244 million. During the year, Maruti produced over 350,000 vehicles, out of which 26,000 were exported.

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CUSTOMER CENTRIC APPROACH
Maruti’s customer centricity is very much exemplified by the five times consecutive wins at J D Power CSI Awards. Focus on customer satisfaction is what Maruti lives with. Maruti has successfully shed off the public sector laid back attitude image and has inculcated the customer-friendly approach in its organization culture. The customer centric attitude is imbibed in its employees. Maruti dealers and employees are answerable to even a single customer complain. There are instances of cancellation of dealerships based on customer feedback. Maruti has taken a number of initiatives to serve customer well. They have even changed their showroom layout so that customer has to walk minimum in the showroom and there are norms for service times and delivery of vehicles. The Dealer Sales Executive, who is the first interaction medium with the Maruti customer when the customer walks in Maruti showroom, is trained on greeting etiquettes. Maruti has proper customer complain handling cell under the CRM department. The Maruti call center is another effort which brings Maruti closer to its customer. Their Market Research department remains on its toes to study the changing consumer behavior and market needs. Maruti enjoys seventy percent repeat buyers which further bolsters their claim of being customer friendly. Maruti is investing a lot of money and effort in building customer loyalty programmes.

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Steps taken by the Management to get market-oriented:
Streams: Maruti has successfully developed different revenue streams without making huge investments in the form of MDS, N2N, Maruti Insurance and Maruti Finance. These help them in making the customer experience hassle free and helps building customer satisfaction.

Maruti Finance: In a market where more than 80% of cars are financed, Maruti has strategically entered into this and has successfully created a revenue stream for Maruti. This has been found to be a major driver in converting a Maruti car sale in certain cases. Finance is one of the major decision drivers in car purchase. Maruti has tied up with 8 finance companies to form a consortium. This consortium comprises Citicorp Maruti, Maruti Countrywide, ICICI Bank, HDFC Bank, Kotak Mahindra, Sundaram Finance, Bank of Punjab and Indus Ind Bank Ltd.( erstwhileAshok Leyland Finance).

Maruti Insurance: Insurance being a major concern of car owners. Maruti has brought all car insurance needs under one roof. Maruti has tied up with National Insurance Company, Bajaj Allianz, New India Assurance and Royal Sundaram to bring this service for its customers. From identifying the most suitable car coverage to virtually hassle-free claim assistance it's your dealer who takes care of everything. Maruti Insurance is a hassle free way for customers to have their cars repaired and claims processed at any Maruti dealer workshop in India. True Value – Initiative to capture used car market: Another significant development is MUL's entry into the used car market in 2001, allowing customers to bring their vehicle to a 'Maruti True Value' outlet and exchange it for a new car, by paying the difference. They are offered loyalty discounts in return. This helps them retain the customer. With Maruti True Value customer has a trusted name to

(4) entrust in a highly unorganized market and where cheating is rampant and the biggest concern in biggest driver of sale is trust. Maruti knows its strength in Indian market and has filled this gap of providing trust in Indian used car market. Maruti has created a system where dealers pick up used cars, recondition them, give them a fresh warranty, and sell them again. All investments for True Value are made by dealers. Maruti has build up a strong network of 172 showrooms across the nation. The used car market has a huge potential in India. The used car market in developed markets was 2-3 times as large as the new car market. .N2N: Car maintenance is a time-consuming process, especially if you own a fleet. Maruti’s N2N Fleet Management Solutions for companies, takes care of the A-Z of automobile problems. Services include end-to end backups/solutions across the vehicle’s life: Leasing, Maintenance, Convenience services and Remarketing.

Maruti Driving School (MDS): Maruti has established this with the goal to capture the market where there is inhibition in buying cars due to inability to drive the car. This brings that customer to Maruti showroom and Maruti ends up creating a customer.

Benefits for the Customer:
Transparency and Convenience: Through this initiative the dealerships serve as one-stop shops for customers. The car finance is offered at a transparent rate of interest, and saves customers the cost and inconvenience involved in searching for the "best deal" in the market.

Interest Rate: Despite increasing interest rates, the offer rates have been competitive because Maruti Udyog Limited was able to bring together country's leading auto finance companies under a single umbrella.

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Wider reach: In addition, we have been able to offer convenient finance options even in upcountry areas where there is limited availability of organized finance. Besides, it has helped to reach wider range of customer profiles.

Additional services: Customers availing of loans from Maruti Finance will have the option of securing additional finance for purchase of extended warranty on their cars for up to four years. It will also provide loan "top ups" to new car customers for car insurance and purchase of Maruti Genuine Accessories.

Services rendered to the Customers:
The Maruti Dealerships are the most visible parts of customer focus. Right from the way a prospective customer is welcomed to the dealership to the entire buying experience and the service experience, customers feel very 'invited'. Its what makes customers loyal to Maruti cars too. Almost 50% of our new car customers are existing customers. Almost 90% people, who trade in their used cars through 'Maruti True Value', finally buy a new Maruti. Customer focus: Customer focus is very important, amply evident from the fact that 'Customer Obsession' is our first core value. We have been chosen by customers as the best car manufacturer in terms of customer satisfaction seven years in a row in the prestigious J D Power survey. . Wide range of cars: Maruti Udyog Limited offers 10 models and over 100 variants, ranging from the people's car, Maruti 800, for less than Rs 200,000 ($ 5000) ex-showroom to the premium sedan SX 4 and luxury SUV, Grand Vitara.

(6) The Complete Car Experience: Maruti goes ahead to give the customer a complete car experience - a solution to have all auto needs under a single roof. Allied services like Finance (Maruti Finance), Insurance (Maruti Insurance) and sale, purchase and trade-in of pre owned cars (True Value) help customers have a hassle free ownership experience.

Understanding Customers needs: Maruti understands that different customers have different needs to match these needs Maruti Suzuki creates different offers for each segmentation. Segmentation makes sense and provides customer with a better solution. They use segmentation level in marketing. A market segment consists of a group of customers who share a similar set of wants. Hence they distinguish between customers who are primarily seeking low cost transportation with the ones seeking a luxurious driving experience. They also conduct surveys covering their present customers trying to identify bay the areas the customers would like to see improvements or changes being made.

Customers Defection Rate:
The study finds that the proportion of customers who defected to non-authorized service centers for their vehicle service requirements has decreased to 7 percent in 2009 from 11 percent in 2008. This decrease in defection rates is attributable to brands expanding the reach and quality of their service networks, as well as to manufacturers making greater efforts to retain customers. Automotive brands and their dealerships lose revenue-earning opportunities when newvehicle owners defect to non-authorized service centers. Defection may be minimized by enhancing customer contact and engaging in relationship-building activities at dealerships, such as keeping track of customer service histories and proactively informing customers when to schedule their next service visit .

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The company has learnt that:Investing in service customer satisfaction yields benefits for both dealerships and their brands, it is found that more than 9 in 10 highly satisfied customers (with service satisfaction scores averaging above 870) say they “definitely will” return to the same dealership for post-warranty service. In contrast, only one-third of highly dissatisfied customers (with satisfaction scores averaging below 719) say the same. Furthermore, customers who are highly satisfied are twice as likely as highly dissatisfied customers to repurchase the same brand of vehicle. Dealer service is one of the key customer interfaces for automakers once a vehicle is sold. It’s imperative for brands and dealers to maintain high levels of satisfaction, as highly satisfying customer interactions help build favorable impressions and build longterm brand loyalty.

Enhancing dealer performance: The performance of the dealers is followed and improvements are suggested frequently. In order to assist the dealers in enhancing their performance and capabilities, MUL has introduced a concept of “Balanced Scorecard”. Using this tool, the performance of a dealership in several areas of operations, Including sales, service, spares and accessories, financial management and management systems is measured. Dealers who perform well on the “Balanced Scorecard” are reward with a cash payment at the end of the fiscal year. The “Balanced Scorecard” serves as an effective incentive for deale rs to enhance their performance. After-sales Service Network: There are more than 400 Maruti dealer workshops and more than 1,500 Maruti Authorized Service Stations, or MASSs, covering more than 900 cities in India. In addition, 24-hour mobile service is also offered under the brand “Maruti On-road Service”. As a benchmark for dealers with respect to service quality and infrastructure

(8) Facilities, MUL has launched service stations under the brand “Maruti Service Masters or MSMs. MUL also has service stations on highways in India under the brand “Express Service Stations”. To promote sales of spare parts and the availability of high quality, reliable spare parts for its products, spares are sold under the brand name “Maruti Genuine Parts”, or MGP. These are distributed through the dealer network and through the authorized sellers of the spare parts. Many of the MASSs are at remote locations where MUL do not have dealers. In order to increase the penetration, in terms of sales volumes, of its products in these remote areas, some of the MASSs are integrate into the sales process in order to increase sales of the cars and related products and services such as spares and accessories, insurance and financing.

Customer Satisfaction Measurement:

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The study measures satisfaction among vehicle owners who visited their authorized dealership service center for maintenance or repair work during the first 12 to 24 months of ownership. Redesigned in 2009, the study measures overall satisfaction by examining five factors (listed in the order of importance):Service quality Vehicle pickup Service advisor Service facility Service initiation.

Overall customer satisfaction is measured on a 1,000 point scale, with a higher score indicating higher satisfaction. This information are collected and distributed among the employees of all the levels in the organization. This is done in order to make employees of different levels aware of the strengths and weaknesses of their department and also help them identify where they need to improve and which part or style of service is appreciated by the customers.

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Warranty and Extended Warranty Program:
MUL offer a two-year warranty on all the vehicles at the time of sale. The dealers are required to address any claim made by a customer, in accordance with practices and procedures prescribed by MUL, under the provisions of the warranty in force at that time. The dealers subsequently claim the warranty cost from MUL.MUL analyze warranty claims from dealers and either claim the cost from the vendors, in the case of defective components, or bear the cost ourselves, in the case of manufacturing defects. MUL also offers an extended paid-warranty program marketed under the brand, “Forever Yours” for the third and fourth year after purchase. The extended warranty program is intended to maintain th e 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.

Factors Determining Competition in the Indian Passenger Car Industry:
• Price • Brand image • Product performance • New model launches • Distribution network • After sales support. • The availability of value-added after sales services.

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Competitive Strategy
They intend to compete by:
Continuous benchmarking of manufacturing capabilities:
MUL continuously benchmark, with that of Suzuki’s premier one, its facility to improve its operating efficiencies. As part of Suzuki’s plans to make Maruti its research and development center for cars in Asia (outside Japan), it is expected that MUL will ultimately be having the capability to have full model change capability .

Continue to reduce costs to offer more competitive products:
Cost competitiveness has been, and continues to be, central to MUL’s 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:
MUL has increased the level of localization over time by working closely with the vendors in India to upgrade their capabilities, which has enabled them to reduce costs and has increased the flexibility in pricing. A look at the new models tells that MUL, with any new model, tries to have a minimum of 75% localization level and then tries to increase the same to at least 90%.

Cost reduction on warranties:
The warranty costs of the vendors are the cost of components incurred by them to service warranty claims arising from defects in components supplied by them. MUL works in association with the vendors to reduce their warranty cost.

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Vendor participation in cost reduction:
In some of the major vendors MUL has implemented the “Maruti Production System” which focuses on the eliminating the wasteful activities in their manufacturing processes such as improving their productivity, reducing the number of their components that are rejected, reducing materials handling, improving their yield from materials, and reducing their inventories. This helps in reducing the costs of production, which also reduces the costs of the components being required by MUL.

Reduction in initial investment cost:
Through in-house development and localized sourcing of dies, welding jigs and other equipment, introduction of flexible welding lines that can be used for multiple models, and in-house development of machine shop equipment ,MUL tries to reduce the initial cost associated with the initial investment.

Reduction in number of vehicle platforms:
MUL currently uses six basic vehicle platforms for production. They even intend to reduce the number of basic vehicle platforms and increasingly share basic vehicle platforms among multiple models in order to spread development costs and achieve economies of scale.

Lowering the cost of ownership:
MUL seeks to reduce the Consumer’s cost of ownership of their cars, which comprises the cost of purchase, fuel consumption, maintenance, including spare parts and repairs, insurance, and resale value.

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Recruitment and Training Culture
Maruti Suzuki India Limited employee base consists of highly dedicated and innovative human resource with common goals and objectives. The company is open for people who are dedicated, innovative and dynamic. Company is always on the lookout for ambitious, hard working and innovation driven professionals. Company provides good career opportunities that are second to none . Maruti Suzuki adheres to certain norms for any vacancy. Given below is a list of norms that we follow: Fresher’s, just out of college applicants are recruited only through campus recruitments from select empanelled campuses. Laterals, applicants having more than three years of experience are only considered. Good academic track record with minimum 60% throughout in all full time qualifications is mandatory. Applicants working in any of our business associates as employee (dealers, vendors, JVs etc) are not considered. Applicant should not have been interviewed in Maruti Suzuki in the last one year. Company’s ambitious plan to reach an independent R & D capability and Company’s goal to achieve 1 million car sales marks by 2011 requires huge talent pool. To induct the best talent from the country and to develop them into successful engineers and managers for leadership positions, who drive Maruti to excellence and push innovation is our objective. Campus Recruitment is done for engineers and MBA's.

Company hires people from all across the country for our all verticals. The process starts with a campus visit where interviews are conducted after a brief short listing method. Various tools of selection are used to search the best talent. The interviews are conducted by the panel of senior management and they are assessed through a rigorous selection process. Offers are made to suitable candidates.

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Training:
At MSIL Company value the people and understand their needs for personal growth and career. Providing people with appropriate environment and resources for growth, learning and confidence is our priority. We conduct various development programs to train our people with the latest technologies and developments of the industry in line with our business requirement. The programs are conducted on the basis of the training needs identified. There are different programs for different people. Company’s key programs of training are: Foreign training done in Japan in collaboration with SMC. Annual training Plan comprising of management and technical programs. Outbound training for enhancing team building skills and rejuvenate. Technical training Soft Skills Training. Maruti Suzuki India Limited offers immense opportunities for developing the management perspective of its employees and realizes that a comprehensive and exhaustive management development program is essential in enhancing individual and organization’s effectiveness.

Work Culture:
At Maruti, empowerment is being practiced. The employees are free to make suggestions. Teamwork and quality are important ingredients in Maruti. Also, problemsolving approach is practiced at Maruti. For this purpose, a team of 5-8 members is formed to identify the problems and then finding solutions to the prioritized problems. These groups are known as Quality Circles.

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Heroic Example
Maruti Suzuki offers complete solutions in car care and services. The responsibility is not ending with the sale. Committed after sales services, covering all aspects ensure truly delightful experience for the customers. Think about any aspect of car care, Maruti Suzuki has got an answer. Whatever be the service needs, Maruti Suzuki has got an answer. It is indeed an accepted fact that Maruti Suzuki India Limited scores well in all departments of car care. Maruti Suzuki service coverage is awesome and incomparable. For example, take the case of Kerala. In Kerala, Maruti Suzuki has a wide-spread network of 75 dealer workshops and 120 authorized service stations (MASS) covering all districts. In a small state like Kerala, Maruti Suzuki has established 4 Service Zones (MSZ). Such is the breadth of services. No wonder Maruti Suzuki had emerged as the winner of the J.D Power Asia pacific Indian Customer Satisfaction survey 9 times in a row. MSIL provides express highway service, Maruti Versa service support and express service facility to ensure support and assistance in minimum time. If the car is held up for more than 24 hours, Maruti provides a free loaner car. Maruti shuttle service and pick and drop facility ensures hassle free travel even when the car is given for service.

Maruti Suzuki India Limited is trying to achieve this by:
Manufacture high quality, fuel-efficient, cars Price cars, spare parts and accessories, and extended warranties, competitively Make automobile finance more easily available to the consumer on competitive terms Make maintenance services, including spare parts, accessories and repairs, widely available through the extensive sales and service network

Offer automobile insurance and other automobile-related services through the sales and service network Create a market for Maruti-certified pre-owned cars through “Maruti True Value” business.

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CONCLUSION
It can clearly be said on the basis of all the study conducted so far that
Customer Satisfaction plays a major role in developing and promoting the company. Customer satisfaction is an important factor, which affects the Financial position and Goodwill of the company. Customer demands are dynamic, but its consideration is necessary for every company to make existence into the market.

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