Professional Documents
Culture Documents
Session 2007-09
i
DECLARATION
This is to certufy that the project reprot entitled Rural Marketing for
Maruti Panchayat Scheme and Study on Buying Behaviour of Rural
Customer Regarding Cars at Haryana is an original work and has not
been submittted is part or full to thsi or any other unviersity/institution
the award of any degree or diploma.
Signature of candidate
SPECIALIZATION : Marketing
SESSION : 2007-09
ii
ACKNOWLEDGEMENT
True knowledge lies not just in reading or writing but its highest manifestation lies
in its application.
Its was a very rare opportunity in my life as a student when I got a chance to work
with managers and other skilled persons in the industry. This rigorous and elaborate
thesis gave me a lot of inspiration and generated more confidence in me and
embedded in me with some capacity to work in an atmosphere of corporate world
where life is quiet tough.
As one flower cannot make a garland, it is a whole effort that makes a success. This
gives me immense pleasure to thank with deep regard and gratitude Mr. Kamal
Chawla, AGM, Rohan Motors Ltd, for giving me an opportunity to undertake this
project.
(TARA PATWAL)
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CONTENTS
1. Introduction 1
Company Profile 2
Industry Trends 7
Competitors 16
Scheme Overview 24
Marketing Mix 29
Market Potential 34
Scheme Alterations 51
Findings 55
Objective 66
Methodology 67
5. RECOMMENDATIONS 81-83
6. REFERENCES 84
7. APPENDICES 85-96
Questionnaire 88
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INTRODUCTION
GO RURAL INDIA seems to be the latest slogan and this is exactly what Maruti
acting as first mover is trying to do. The rural markets may be alluring but is not
without its problems. The firms have to encounter these problems squarely and put in
a great deal of effort, if they have to get a sizeable share of the market.
This is what, is the underlying components of the second part of the report. This part
emphasizes on analyzing the buying behavior of rural customers regarding cars. For
this purpose, a research was conducted and the instrument used was a structured
questionnaire designed specially for the rural customer in Hindi language. The
questionnaire assessed the decision making components in a car and also the effect of
discounts on their purchase decision. The research also tried to conduct a comparative
analysis in regards of the expectations of a customer from a car and perception
towards Maruti cars in relation to these aspects.
1
LITERATURE REVIEW AND PROBLEM
FORMULATION
Although literature search will be done so as to know the fact and figures of the rural
markets, the survey will be also aimed at analysing the buying behaviour of rural
people, media and media strategies used in rural areas.
The rural markets of India is fascinating and challenging at the same time. It offers
large scope on account of its shire size. And, it is growing steadily. Even a modest
growth pushes up the sales of a product substantially, in view of the huge base.
The rural markets may be alluring but it is not without problems. Many big MNCs are
facing challenges in gaining success in the rural markets, as there marketing plans
come unstuck in rural areas, when almost all the marketing hotshots devising rural
strategies have enjoyed an urban lifestyle and can more easily connect to the urban
mindsets. The issue is that there is a vast difference in the lifestyle of the rural and
urban consumers and also there is no set format of the rural consumer behavior.
A car is one of the most significant purchases that an Indian household makes and this
project addresses the most important question that perplexes car manufacturers:
What are the decision making elements in the mind of a rural customer while
purchasing a car.
The objective of the survey was to determine the variables which affect the
individuals buying behavior. The effect of price, features, discounts, appearance, etc.
2
has also been studied also with the comparative analysis of the perception of the
customer in regards of any car and that of a Maruti car.
COMPANY PROFILE
HISTORY
In the early1980s, the Indian government decided to produce a small car, which would
be within the buying reach of the Indian middle class. The obvious place to shop for
technology was Japan, which had developed world-class capabilities in small cars by
that time. It was not Toyota or Nissan or Honda, the three largest players in Japan,
with whom the government tied up, but Suzuki, a much smaller company, with strong
capabilities in making small cars. Suzuki grabbed the opportunity with both hands and
formed a joint venture with the government, called Maruti Udyog.
Maruti Udyog Limited (MUL) was established in Feb 1981 through an Act of
Parliament. Company was incorporated in 1981 to take over the assets of the erstwhile
Maruti Ltd, set up in 1971 and wound up in 1978. The assets of Maruti Ltd. were then
acquired by the government under the Maruti Ltd. In 1982, the government signed a
joint venture agreement with Suzuki, which was offered a 26% equity stake in Maruti
Udyog.
The company went into production in a record time of 13 months and the first car was
rolled out from Maruti Udyog Limited Gurgaon in December, 1983.
In the late 1980s, Suzuki increased its equity stake in Maruti from 26% to 40% and
further to 50% in 1992, converting Maruti into a non-government company.
3
In year 2003, Suzuki further increased its stake from 50% by another 4% bringing the
total equity stake of Suzuki to 54%.
VISION
The leader in the Indian automobile industry, creating customer delight and
shareholders wealth; a pride of India
CORE VALUES
Customer Obsession
HOLDING STRUCTURE
The company got enlisted on Bombay Stock Exchange and National Stock Exchange
in the year 2004 and has the following holding structure, as on 30/09/20081:
4
Clearing Members .07
5
MARKET SHARE
Till date, over 6 million (60, 00,000) Maruti cars have rolled out from its
manufacturing facilities.
At the end of year 2007-08, Maruti had a market share of about 54 per cent of the
Indian passenger car market. The company sold 6, 74,924 vehicles in 2008-09
including exports of 39,295 units. Marutis cumulative exports are over 4.5 lakh units.
MILESTONES
The company was bestowed with the following awards in the year 2008:
Among Top 5 car companies in the Forbes list of the Worlds Most Reputed
Companies Nov 08
In addition to the awards, the company has also achieved monumental success
on its production front by achieving newer heights in a record period of time.
6
In addition, the company achieved an improvement in its production level by a
monumental figure of 50% in a period of just 3 years.
CERTIFICATIONS
In 2001, Maruti Udyog Ltd became one of the first automobile companies
anywhere in the world to get an ISO 9001:2000 certification. This audit
covered varied parameters like Customer Focussed organization, 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. Maruti was also one of the first companies in the world to
pioneer ISO 9000 certification for its dealers.
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.
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INDUSTRY TRENDS2
The Automobile Industry performance in the years has shown encouraging results in
all the segments of the automobile industry. The industry registered an overall growth
of around 13.5 % during the year 2008-09 as compared to about 12.77% growth rate
during the year 2007-08.
The cumulative figures of domestic sales of all the automobile manufacturers during
the period 2003-04 to 2008-09 are as follows:
2
Source: Society of Indian Automobile Manufacturers, www.siamindia.com
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and utility vehicles have grown by 22.01% and 13.21% respectively while MPVs
have grown at the rate of over 25.20%. The commercial vehicle segment clocked a
growth rate of 33.28%. M&HCV segment has grown by 32.83% whereas LCVs grew
by over 33.93%.
Two Wheeler segment as a whole during the year 2008-09 grew by over 11.42%.
Backed by Governments initiative on rural roads and better connectivity with major
towns and cities, improved agricultural performance, upward trend of purchasing
power in the hands of rural people, the two wheeler industry was able to achieve the
record performance of crossing 7 million two wheelers with exact sales standing at
78,57,548 during the year 2008-09.
The approximate market shares of the different categories of vehicles on the basis of
the total number of vehicles sold during the year 2008-09 are as follows:
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FOREIGN MARKET TRENDS
EXPORT TRENDS
(Number of Vehicles)
The Two Wheelers also crossed Six hundred thousand mark for the first time,
clocking around 6, 19,138 numbers and recorded a growth rate of plus 20% over the
last one year.
FINANCIAL PROFILE
For the period ending 31st March, 2009, the company sold 6, 74,924 in all which
included 6, 35,629 in the domestic market and the rest were sold in foreign markets.
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The total income of the company inclusive of revenue earned by the sale of all its
products, services as well as other sources after deducting the excise duty on sales
was Rs. 1,525,230 Lakhs.
Profit before Tax for the company was Rs. 2, 27,983 Lakhs. The Net profit after tax
and minority interest was Rs. 1, 56,198 Lakhs.
The Basic & Diluted Earning per Share was Rs. 54.06.
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PRODUCTS & SERVICES
Maruti
Maruti Udyog
Udyog
Limited
Limited
Products
Products Services
Services
Passenger
Passenger car
car Maruti
MarutiTrue
TrueValue
Value Maruti
Maruti Insurance
Insurance
Maruti
Maruti On-Road
On-Road
Utility
UtilityVehicles
Vehicles Maruti
Maruti Finance
Finance Service
Service
N2N
N2N Fleet
Fleet Maruti
Maruti Driving
Driving
Maruti
Maruti Genuine
Genuine Management
Management School
School
Accessories
Accessories
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PRODUCTS
The company has a portfolio of 12 brands and these brands can be categorized into
three categories, namely:
Passenger vehicles
Accessories
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o Maruti 800 o Gypsy
o Omni-Van o Esteem
o Zen o Baleno
o Alto o Versa
o WagonR o Swift
Under the SUV category, the company has the following product:
o Vitara
In addition to the products the company also one other product under its portfolio, this
product is Maruti Genuine Accessories. The company offers the following products
under this category:
o Alloy Wheels
o Body Cover
o Door Visors
o Fog Lamps
o Stereo Systems
o Security Systems
o Spoilers, etc.
SERVICES
MARUTI TRUE-VALUE
While buying or selling a used car, going to the right place is very important. Maruti
provides the platform for its customers of getting quality used cars, full payments,
clean documents, value for money & most importantly peace of mind.
It not only helps in providing quality and reliability but also reduces the hassle of
going to the local mechanic or a second hand car dealer or settles for a compromise
deal with friends, relatives and colleagues or gamble with classified advertisement.
With Maruti TrueValue, one can enjoy all the advantages of dealing directly with
India's most trusted car company. With the companys strong network of 172
showrooms across the nation, it provides a very convenient option very close to the
customers home.
MARUTI FINANCE
To cater to the ever growing demand of the customer for a one-stop shopping
experience Maruti established Maruti Finance. Maruti tied up with 8 finance
companies to form a consortium. This consortium comprises Citicorp Maruti, ICICI
Bank, HDFC Bank, Kotak Mahindra, Sundaram Finance, Magma Leasing Ltd,
Cholamandalam Finance and Mahindra & Mahindra financial Services limited.
MARUTI INSURANCE
Maruti Insurance also helps in providing all the car related goods under one roof.
Maruti has tied up with National Insurance Company, Bajaj Allianz, New India
Assurance and Royal Sundaram to bring this service for all its customers.
At Maruti Insurance, customers can get the advantage of a one stop shop for all your
car insurance needs. In addition to this, under this scheme the dealer takes care of all
the insurance related issues, starting from identifying the most suitable car coverage
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to virtually hassle-free claim assistance. This in turn, helps in reducing a lot of hassle
of the consumer.
Maruti provides a 24 hours service, which provides help in case of any sort of
breakdown. The customer just has to dial the given number for his respective area and
help is sent to him at anytime of the day. The charges for this services are also very
nominal, moreover if the car is under warranty than even these charges are waived
off.
Safe driving on todays roads requires a higher level of confidence and competence
than ever before. The reasons for it are manifold; bad roads, poor traffic planning,
untrained drivers and exponentially increasing number of vehicles, to name just a few.
Maruti Driving School (MDS) was established with the goal to provide a proper thesis
to all the people in the country. The purpose is to impart not just better driving skills
but also better awareness towards overall road safety.
This service is offered by Maruti Udyog Limited for those customers only who own a
fleet of cars. Marutis N2N Fleet Management Solutions for companies, takes care of
the A to Z of the automobile problems. The services include end-to-end
backups/solutions across the vehicles life.
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Outsourcing fleet management to professional fleet management service providers
help in achieving substantial cost savings and efficiency advantages through
economies of scale. Most global automobile companies like GM, Ford, Daimler
Chrysler, etc. offer fleet management services to their corporate clients to serve them
better.
o Vehicle Acquisition
o Insurance Cover
o Vehicle Maintenance
o Vehicle Remarketing
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COMPETITORS
Competition has penetrated in each and every industry and automobile industry is no
exception to this statement. Maruti is facing intense competition for other players.
Moreover, with new manufacturers coming to India the competition is intensifying
with each passing day. Increased pressure on each manufacturer to keep margins low
and maintain their market share, has forced all the manufacturers to introduce their
vehicle in all the segments, as such, making the industry highly competitive in all its
segments. With the government liberalizing FDI policies, the industry is going to face
intensify in terms of competition in the days to come to a much greater extent.
The company has its operation in very nook and corner of the country and its products
cover a very large list of portfolio. As such the departments list of the company is also
very elaborate, ranging from pure manufacturing related department to support and
assistance departments.
There are in all 14 broad divisions, under which we have various departments and
sub-departments under it. The various divisions of the company along with their sub
divisions or departments are as follows:
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Legal & Secretarial Department
Corporate Communication Cell
Protocol Cell
Strategic Initiative Group
Production Department
Production I
Production- II
Production Engineering
Production Engineering Division
Production Services Division
Spare Parts Division
Engineering Directorate
Service Division
Part Inspection Division
Engineering Division
Engineering I
Engineering II
Supply Chain Division
Supply Chain I
Supply Chain II
Supply Chain III
Shipping & Transport Department
Imports Department
Consumable Department
Information Technology Division
Finance & Personnel System
Plant Materials System
Marketing & Sales Information Department
System Management Division
Marketing & Sales Secretariat
Marketing Strategy & Development Department
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Marketing
Sales
Exports
Vigilance Division
Security Wing
Vigilance Wing
Finance Division
Budget, Cost & Account Department
Income Accounting Department
Excise Department
Vendor Payments & Negotiation Department
Banking & Establishment Department
Works & Imports Section
Employee Payment Section
Banking Section
Corporate Finance
Internal Audit
Human Resource Division
Recruitment & Management Compensation
Employee Relations Department
Human Resources Systems & Service
Factory Administration Department
Organization Development Department
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MARKETING STRATEGIES OF MARUTI AT RURAL
INDIA
Maruti-Marketing genius
Here came the most important aspect of the launch the marketing strategy. This was
a factor that could make or mar the success of the Santro. Hyundai tied up with the
advertising agency Saatchi and Saatchi, who hit upon a novel strategy. Bollywood star
Shah Rukh Khan was roped in to be the brand ambassador. A three-pronged strategy
was designed to attract the consumer:
Educate Indian Consumers about Hyundai
Create hype and expectations about the Santro
Explain the virtues of the Santro
The TV & Press Campaign broke in June 1998. The initial TV spots and the press
campaign showed Shah Rukh Khan being approached by a Hyundai official to
advertise the Santro. Shah Rukh was not convinced about Hyundai and he was shown
to ask all questions a normal Indian consumer is expected to ask. What is Hyundai?
Why should I advertise for the Santro? Will it match customer service expectations?
What about dealer networks? How can an international car meet the requirements of
Indian roads? As the campaign went through all of these questions, the Hyundai
official answered Shah Rukh Khan. By the time the car was actually launched, Shah
Rukh Khan proclaims, he is convinced. He declares that he is now ready to
advertise the Santro since he is certain that the Santro is the car for India. This high
profile campaign backed by some very innovative media buying, which went for
maximum coverage with the minimum budget, broke all grounds in terms of creating
consumer expectations and hype in the market.
Along with the Advertising Campaign, the Sales Team worked burning
midnight oil in creating the dealer network across the length and breadth of the
country. The wide dealer network would prove to be invaluable in ensuring that the
Santro would be available to anyone who wants to buy it. An important pre-requisite
for the dealer network was a fully functional workshop area with imported
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international standard equipment and engineers trained in Hyundais parent training
centre in South Korea and localised training provided in the Chennai Plant.
But strategies, like cars, must feed on volumes. And how much is the sub-compact
segment likely to yield in 1998-99? Maruti Udyog expects the sales of the Zen to
cross the 1-lakh-unit mark. Assuming that at least a third of the small-car owning
population--which includes customers who have been using the Maruti 800, say, for at
least 3 years--graduates to a sub-compact, that means a market for at least another 1
lakh cars. Even if the 2-lakh mark is not breached in the next 5 months, 1999-2000
will be the Year Of The Upgrade, the economy permitting. Which is why the second
wave is focused on the small segment--from the mini to the sub-compact to the small
car. On that relatively stable bandwagon is perched the goliath, Maruti Udyog, 2
newcomers--the $28-billion Hyundai Motor of South Korea and the Rs 7,450.34-crore
telco--and one revitalised company, Daewoo Motors. By drawing on their intrinsic
strengths, each is evolving a unique strategy to overtake competition. BT test-drives
the strategic responses of the second wave and assesses their chances of survival.
In less than two decades, India has ascended the ladder of global competitiveness and
improved its business environment for investors through a consistent focus on
economic reforms. Even more creditable is the fact that this growth comes on the
back of an ever-strengthening social infrastructure supported by vibrant democracy.
India today is the hotbed of entrepreneurial activity. Wealth creators and world-beaters
are visible in sectors after sector. Indias economy has more than doubled in real terms
since reform began in 1991. Consumer demand, increasing three to five times faster
than the economy, reflects the aspirations of a vibrant, growing and young middle
class; India is home to 20 per cent of the worlds population under the age of 24. With
more than 200 television channels offering a window to the world, Indians are
perhaps the most rapidly evolving consumers across the globe. Successful economic
reforms, favourable media disposition and an overall positive economic scenario have
placed a spotlight on the country. Indian companies are making overseas acquisitions,
capital markets are booming, FIIs are pumping money in, FOREX reserves are a
record high and the political economy has gained credibility in the global investor
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community and world media. Innovative products, innovative processes, innovative
manufacturing methods are enticing foreign investors and multinationals to India.
What is `India' for the world? It is a millennia-old civilisation. It is also the world's
premier IT services provider. The world's back office A global R & D hub. Emerging
small-car hub. Repository, arguably, of the world's largest number of engineers,
doctors, accountants, and so on. To bring it all down to a single idea India is ready
with various touch points: from nation branding to product branding. Car
manufacturers everywhere are struck by Indias engineering and design capabilities.
Toyota is planning to set up a research centre in India. Daimler Chrysler and General
Motors have done that already and Honda Siel, Ford India, Ashok Leyland and Maruti
Suzuki spend millions of dollars on research and development activities and it plans
to make India a hub for Suzukis small cars. India may never become a purely export-
driven manufacturing country like Malaysia or Korea or Thailand. Going forward,
India is yet better placed as a low cost-manufacturing base.
MISSION 777
Maruti sold around 6, 35,000 cars in the year 2008-09 all over India and keeping in
view the growth rate and future prospects of the Indian markets, the company has
revised its sales target of atleast 7, 77,000 cars in the current year. Company calls it as
the MISSION 777.
Under the marketing department of Maruti Udyog Ltd. there exists a sub-department
known by the name of ISL, that is, Corporate & Institutional Sales Department. The
objective of this department is to develop various ways by which the company can
increase its corporate & institutional sales.
For the company - Company or an organization is a group is two or more people who
have come together to work towards the achievement for a common goal this
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definition encompasses the scope of the department. That is, this department is
dedicated to take care of all the sales made to any sort of a company. Every now and
then, this department launches various sorts of schemes to secure corporate sales. For
e.g. it has launched schemes like Maruti club, wheels of India, reference schemes, etc.
The importance of these schemes can be judged from the fact that under a single
scheme of Maruti Udyog Limited named Wheels of India has sold cars to an extent of
55,000 cars, which was a scheme launched exclusively for the government official on
an all India basis.
As such we can see that, Corporate Sales Department contributes to a large chunk of
the total sales of the company and hence will play an important role in accomplishing
MISSION 777. With the overall targets being set, the department started analyzing all
the prospective markets by ways of which the set targets can be achieved.
It analyzed that urban markets have almost saturated and there is not much of a scope
of increasing the sales in these markets and moreover, with the coming of various cars
of different manufacturers and even new manufacturer, it will become even more
difficult for Maruti to even hold on the current market share and sales level.
The Department having analyzed all the future prospects came to the conclusion that
Maruti must change its market approach and adopt a new market approach GO
RURAL.
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ISL for the purpose launched a scheme called-
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SCHEME OVERVIEW
In a bid to increase the sales from rural India, the countrys largest car maker, Maruti
Udyog Ltd., offered over 22.5 lakh functionaries in Panchayats (local self governing
bodies in villages) its cars at special discounts.
The offer titled Panchayat Scheme retails the Maruti 800, the Zen, the Alto and the
Omni at a cash discount of Rs. 5000 for the first two models, Rs. 4000 and Rs. 3000,
respectively, for the other two, to Panchayat functionaries, who are considered to be
influential figures in rural India.
These discounts offered are in addition to other sops like zero insurance already
available in rural markets. The scheme was firstly launched in Haryana and then was
launched on an all India basis on 20th April, 2009.
To combat hardening interest rates on car loans, Maruti entered into a retail finance
pact to offer loans at lower interest rates with 14,000 braches of 196 rural banks as
well as Mahindra Finance and Magma Leasing for first time rural buyers.
OBJECTIVE
To enter the rural market, the company planned to target the Panchayati Raj System.
The reason behind targeting the Panchayati Raj System was that these people are
considered as the INFLUENCERS.
These people are the elected members of the villages and hence these people have
empowered these people to take decisions on their behalf. As such, villagers have a
great level of trust and belief in them. Moreover, each and every action of these
people has a lot of influence on the people around them. Company views these people
as the best way to enlarge the customer base for its small segment vehicles in the rural
markets.
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in creating influence over the rest of the people in the villages towards preferring
Maruti cars over other competitor cars. Thus provide an extra edge to Maruti vehicles
over its competitors in term of preference, when these villagers plan to buy a car.
For the proper understanding of the methodology of the scheme, the complete
knowledge of the Panchayati Raj System is very necessary.
History
April 24, 1993 is a red-letter day in the history of Panchayati Raj in India as on this
day the constitution (73rd Amendment) Act, 1992 came into force to provide
constitutional status to the Panchayati Raj institutions.
The System
According to the Constitution of India, Panchayats have been given powers and
authority to function as institutions of self-government. The following powers and
responsibilities have been delegated to Panchayats at the appropriate level:-
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THE 3 TIER PANCHAYATI RAJ SYSTEM:
DISTRICT ZILA
LEVEL PARI-SHAD
BLOCK
LEVEL
PANCHAYAT SAMITI
VILLAGE
LEVEL
GRAM PANCHAYAT
VILLAGERS/ GRAMSABHA
Gram Panchayat is at the village level and is formulated only in those villages, which
have a population of more than 500 people. It constitutes of the directly elected
members from the villager population. It consists of a head, called as Sarpanch and
members known as the Panchs. The number of Panchs in a village is directly
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proportional to the population of the village, but the number cannot be less than 6 nor
can it be more than 20, whatever the case may be.
All these members of the Gram Panchayat, namely, Sarpanch and Panchs are directly
elected by the villagers by means of ballot voting.
These members of the Gram Panchayat once elected have a term of 5 years.
These members are entrusted not only with the developmental work in the villages but
with a much greater responsibility, to act as a judge in case of some minor disputes,
fights, etc. which might arise in the village and to make a fair and just decision. These
people are considered as the intelligent, logical and people having a foresight. They
are the people whom villagers look up to and villagers also tend to follow or imitate
their actions to a great extent. These members are at the lowest level of the hierarchy
and hence have the greatest level of interaction with the villagers and also have the
greatest level of Influence on the villagers.
Panchayat Samiti is at the block level, that is, a cluster of about 20 to 25 villages. The
number of members in the Panchayat Samiti is based on the population of the villages
in the block.
The elected members of the Panchayat Samiti are elected directly by the villagers by
means of ballot voting. The number of members cannot be less than 10 nor can it be
more than 30 members, in any case, whatsoever.
The official members are the Block Dev. Officer (BDPO) and the Officers of the
various State Government Departments ordinarily stationed at the Block level. The
official bearers include the Panchayat Samiti members and the Pradhans of the Gram
Panchayats. Chairman is the head of the body and is elected directly by the Panchayat
Samiti members. And BDO of the respective block is the Executive Officer of the
Panchayat Samiti. All the Gram Panchayat members report to the Panchayat Samiti.
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The main functions of the Panchayat Samitis are the planning, execution and
supervision of all developmental programmes in the Block. It also supervises the
works of Gram Panchayats within its Jurisdiction.
Zila Parishad is at the district level and has all the Panchayat Samitis under its
purview which are there in the respective district.
The members of these Parishad are also elected by means of ballot voting. The
number of members is directly based on the population in all the blocks under the
district, but it cannot be less than 10 nor can it be more than 30 members.
The head is elected by the Parishad members from within themselves and is known as
the President.
All the Panchayat Samiti and Gram Panchayats come under the purview of Zila
Parishad, directly or indirectly. At this level the heading office is known as DDPO
(District Development & Panchayat Office) and this office is headed by the DDPO,
that is, District Development & Panchayat Officer. DDPO supervises and coordinates
all the activities of not only all the BDOs but also all the Gram Panchayats.
Moreover, all the MPs and MLAs of the district are also the members of the Zila
Parishad.
The Deputy Commissioner/ Collector (D.C.) is the Executive Officer as well as the
administrative head of Zila Parishad, ADC is the Additional Executive Officer and
then S.D.M. and some other Government official are the other officers of the
Administration of the Zila Parishad.
We can see that there exists a very systematical hierarchy in the rural India as well. A
close look at the structure can also help us conclude that all the people who make it to
the Panchayats, no matter, what level they make it to, are major INFLUENCERS and
hence can help the company secure sales by using these people as catalyst for others
to make their decision in favour of Maruti cars.
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MARKETING MIX
PRODUCT
PRODUCT STRATEGY: The main elements of Maruti Udyog Ltd. product strategy
are described below:
2. Marketing Research
3. Emphasis on Quality
In the liberalized economic era, India has become home to almost all leading
automobile giants in the world. Nonetheless, Maruti as a brand name still retains its
ubiquitous status. And no other company than Telco can take the credit for this feat.
No one can deny the fact that the secret of Telcos success lies in rich product line.
The Company markets the Pre-Owned Cars, which are sold to customers after doing
quality refurbishment work and 120-point check. Most of the cars sold under true
value are Maruti 800, Versa, Omni, Esteem, Zen, Alto, and Baleno. Which means the
company trades-in vehicles of all segments viz. economy, middle & luxury.
The company gives warranty of 1 year or 15000 Kms. Whichever is earlier plus 3
Labour free services with the vehicle sold under True Value.
Price
The prices of the cars are determined according to the price grid provided by MUL,
which is revised on a time-to-time basis depending upon the prevailing market prices.
The Grid contains the limit of the prices that can be charged from the customers viz.
minimum, average and maximum limit. Moreover when a new car is sourced and
refurbished or reconditioned the price charged is placed onto the higher side of the
29
grid in order to earn a higher profit but if the vehicle is not sold and it stays in the
stock for more than a month its price is revised and placed onto the average side but if
it cant be sold again then some accessories are added to it and the price is placed
towards the minimum limit.
Maruti uses two methods while pricing its products. These are as follows:
Costplus pricing: In using cost-plus pricing there is an assumption made that having
established the total cost price the product manager need only add the desired mark-
up. Similarly the customer may be unwilling to pay this price either because they can
purchase the similar product from the competition. So Maruti keeps in mind the total
cost of the product they have incurred along with that they follow the market pricing.
Market Pricing: Maruti cannot set its own prices in isolation from that what is
happening in the rest of the industry. The competitors in the market will have cost and
price structure which is investigated and analyzed thoroughly.
Place
Place is another key marketing mix tool, it includes various activities the company
undertakes to make the product accessible and available to the target customer.
(Kotler, 2005)
Maruti makes its cars available to its customer through indirect distribution network
with one-level of intermediary involved in the chain. The intermediaries are known as
Dealers. Marutis dealer network is the largest for any car manufacture in India.
Maruti believes that its relationship with the customer does not end with the purchase
of a car. From its inception, Maruti was committed to providing an excellent network,
that would facilitate customers in purchasing vehicles, accessing spare parts, and
getting their vehicles serviced.
30
Maruti take physical distribution not as cost but as a way in which company can gain
competitive advantage by offering the customer added benefits, better services or
lowering prices through continuous improvements in the methods used.
Maruti Service Masters is the only MUL owned outlet in Delhi and all the other True
Value outlets are owned by the Dealers who used to sell the New Cars of Maruti. The
main office of and service centre of True Value MSM is based at F-39 Okhla
Industrial Area Phase II New Delhi. After doing a successful business of 2 year 8
months MSM True Value is planning to open a new sourcing outlet in West Delhi.
Promotion
Promotion is the communicative element in the marketing mix and it comes into use
only when the other three Ps, product, price and place, have been developed and
coordinated and are ready to meet the needs of the identified target market.
Maruti Rural Market itself into the Newspaper (HT city and Delhi Times) and holds
melas and free checkup camps at various potential locations in order to educate the
people about the Brand and what refurbishment is all about. By this way the sales
have increased by many folds and it has proved to be an effective source of increasing
the Pre-owned car sales as well as Sourcing of Cars for Rural market.
Maruti takes care of certain factors while planning a promotional campaign. These are
as follows:
Promotion Objective: Maruti decides the promotion objective i.e. what does the
company want to achieve through the use of communication techniques; like, to
create awareness of the new car models launched and existing models, to reinforce
existing beliefs, to get customer to buy the car, etc.
Promotion Strategies: What major methods will be used and why, to achieve
these objectives. This stage will consist of choosing one or more of the
promotional mix techniques. Maruti selects the best promotional tools
advertising, sales promotion, publicity etc to promote its product.
31
Target audience: Maruti defines the target audience at which it is going to aim its
messages. This also involves constructive detailed customer profile for the target
segment.
Message: The message content and the method of presentation is kept in line with
the product positioning statement.
Integration: Finally all the methods used are integrated in a cohesive, consistent,
logical manner to meet the needs of the target audience.
Educate: about the need for road safety training or the use of seat belts
Reinforce: give reason (largest service network) why the customer should remain
with the brand.
Television: Television advertisements have mass reach; the products are advertised
across the whole country with the potential to reach 95% of the population. No other
medium used by MAruti has the same capability. Maruti has been using emotional
appeal in their advertisements also the effect of the ad doubles as the product can be
seen and demonstrated in the best possible manner.
Print Media: Maruti gives print advertisement in newspapers, magazines & journals.
Maruti uses this medium of advertising less aggressively though it saves a lot of
money, targets accurately.
32
Cinema: Research has shown that there is a clear customer segment that regularly
goes to cinema and it is good medium to advertise the products. Also the impact of
advertisements shown in cinema is greater then that of TV though the coverage is
very low. Maruti advertisements must shown in premier cinema halls.
Outdoor: Outdoor posters are used as reinforcement to the primary medium such as
TV or print. Maruti has been extensively using this medium of advertisement.
The press or news release: The press is probably most widely used by Maruti
for gaining free coverage in the national press..
Press and news conference: The news conference is another method of building
relationships and publicity, by Maruti. Journalist from both TV and the press are
invited to hear some new development in the organization..
Events: Maruti plans staging of activity knowing that it will be reported in the
media.
To build goodwill, inform and educate; and pave the way for future sales
To meet competitors
33
MARKET POTENTIAL
This structure of the Panchayati Raj System has a great potential as a market, as all
over India there are around 22.5 Lakh members in the whole of the system.
In addition to the above numbers, if we look at the level of influential buying which
these people can help the company to secure, than the number of 22.5 lakh appears to
be just a Small Pie out of a Cake
The total numbers of members at all the 3 levels of Panchayati Raj in the state of
HARYANA are as follows:3
District Total no. of Total no. Total no. of Total no. of Total no.
Gram of Panch Panchayat Panchayat of Zila
Panchayat and Samiti Samiti Parishad
Sarpanch members members
Ambala 430 3895 6 138 17
Bhiwani 462 5006 10 211 29
Faridabad 279 3182 5 139 25
Fatehabad 241 2707 6 130 17
Gurgaon 237 2492 4 96 30
Hissar 310 4065 9 217 29
Jind 300 3641 7 173 24
Jhajjar 248 2850 5 118 18
Panchkula 162 1420 4 43 10
Mahendergarh 341 3486 5 139 18
Rewari 348 3354 5 123 16
Rohtak 152 2072 5 109 15
Sonepat 321 326 7 177 24
Sirsa 333 3709 7 170 21
Yamunanagar 469 4244 6 132 18
Kururkshetra 379 3528 5 117 15
Kaithal 263 2994 6 141 19
Karnal 380 4084 6 175 23
Panipat 170 2143 5 118 16
Mewat 370 4032 6 158 -
34
PARTICULARS NUMBER
We can see from the figures that the number of people that company can target in the
state of Haryana itself are about 66, 000. This number when calculated for the whole
of the India comes out to be around 22.5 Lakh prospective customers.
MARKET ANALYSIS
Analysis of the market potential of the segment was very important, so that the
estimated figures of sales can be defined. The company for this purpose conducted a
survey which was aimed at identifying the probability of achieving sales from the
members of the Panchayati Raj System at all the 3 levels individually.
Maruti Udyog Ltd. conducted the survey also because under the Panchayati Raj
System many areas are poverty struck and in these areas even these Panchayat
members dont have the required means to buy a car. In addition, there were certain
areas where the representatives were from the reserved categories and although the
villagers might be in position to buy a car in these areas, the representatives might not
be. Moreover, some people might have already bought a car and some people might
just not be interested in buying a car which Maruti Udyog Limited is offering to them
at all.
35
The survey concluded that the total sales potential in terms of opportunity levels at all
the three different level are as follows:
Panchayat Samiti 2%
These figures in turn were used to calculate the overall sales potential under this
scheme on an all India basis. The opportunity level that was calculated for all the
three levels individually was multiplied with the number of members in the three
levels for all the levels of Panchayati Raj system, to come to estimated sales potential.
The total Market potential of the market based on the opportunity levels is as follows:
36
STATE/UT MEMBERS OPPORTUNITY MEMBERS OPPORTUNITY MEMBERS OPPORTUNTIY TOTAL
IN GRAM (0.5%) A IN (2%) B IN ZILA (10%) C OPPORTUNITY
PANCHAYAT PANCHAYAT PARISHAD (A+B+C)
SAMITI
37
Karnataka 53421 267 2162 43 591 59 369
Kerala 8458 42 1009 20 202 20 83
Andhra 208291 1041 14617 292 1095 110 1443
Pradesh
Goa 92 5 280 6 33 3 14
Maharashtra 178132 291 2877 58 1423 142 1091
Gujarat 83213 416 2768 55 544 54 526
Madhya 208356 1042 4297 86 486 49 1176
Pradesh
Rajasthan 114282 571 5257 105 1008 101 777
38
We can see from the data that there is potential of about 14,000 cars per annum all
over India from this segment itself.
This survey provided the company proper ground for making extra efforts in regards
of marketing, pricing, etc. so that they can tap this market to the maximum extent.
MARKETING STRATEGY
Maruti adopted a four way approach of tap this market, that is, they tried targeting this
segment by means of four ways:
SPECIAL DISCOUNTS
CHEAPER LOANS
REGULAR FEEDBACK
SPECIAL DISCOUNTS:
Maruti analyzed that providing additional discounts will be the best was to secure
sales as the people in the rural area not only have limited resources but are very price
conscious as well. As such, Maruti offered special discounts to the members of the
Panchayati Raj system. The company offered an additional discount of the following
amounts to them:
VEHICLE DISCOUNT
These discounts were in addition to the discounts already available to the common
customers. These figures when added to the consumer offers bring the total discount
39
figures to about Rs. 20,000 for Maruti 800 and likewise for the other cars like Omni,
Alto and Zen.
As such we can see that the consumer get a huge benefit in terms of discount when he
belongs to the target audience.
CHEAPER LOANS:
The loans that are available to the rural customers are being offered at a rate of
interest ranging from 14% to about 16.5%, which is far more than what is being
offered in the urban areas, where the rate of interest is around 11% to 13%.
Company analyzed this situation and tried to unearth the reason behind such levels of
interest rates and also tried to find methods to overcome this shortcoming.
Company concluded that the reason behind such high interest rates is that, the
recovery of the loans from the rural areas is far more difficult than in urban areas.
Most importantly, most the companies dont finance in the rural areas as such only a
hand full of private companies like Mahindra Finance, Magma, etc. operate in these
areas and the government banks which are present in these markets dont offer car
loans on a large scale basis. These companies in turn enjoy a sort of monopoly in
these areas and hence charge interest rates as per their convenience.
To overcome this difficulty, Maruti collaborated with Regional Rural Banks (RRB).
What is a RRB?
Regional Rural Banks or RRBs are the banks that were created to meet the excess of
demand for institutional credit in the rural areas, particularly among the economically
and socially marginalized sections.
40
These banks are a sort of a subsidy of a nationalized bank, called as the sponsoring
bank. In addition to the sponsoring bank, the bank also gets funding from the state as
well as the centre government.
These banks differ from the other commercial banks in one major regard. These banks
categorize the lending in two categories:
Priority sector lending consists of those loans and advance made for the purposes
directly related to agriculture, trade, commerce, industry and other productive
purposes in the rural areas.
Non-priority sector consists of all lending made for all other purposes.
These banks categorized these loans and advances as they follow different lending
rates for the two categories. These banks give loans at a rate of just 7% for priority
sector activities and at 11% for the non-priority sector activities.
The structure of the bank has the chairman at the top, which is given the authority to
take all decisions in regards to the working of the bank. He is also authorized to
include or exclude any category under the purview of the priority sector lending for
his bank.
The figures given below in the figure, exhibit the level of penetration which these
RRBs have achieved in terms of rural markets. These figures are no way near to any
of the commercial banks and hence prove to be a sensible choice.
41
Year Dec. 1975 Dec. 1980 Dec. 1985 Dec. 19904
In addition to the number of branches which these banks have, they have an additional
advantage as well. As these banks are always located in the villages and because of
being in the area are also well aware about the persons standing, payment profile,
personal background etc. of most of the people and hence have lesser chance of
having bad debts by means of defaulting, etc.
Most importantly, these banks offer loans at 11% rate of interest, which is a whopping
5.5% lesser than the rate offered by other privatized banks like Mahindra, ICICI, etc.
The RRBs were established- with the view to developing the rural economy by
providing, for the purpose of development of agriculture, trade, commerce, industry
and other productive activities in the rural areas, credit and other facilities,
particularly to small and marginal farmers, agricultural laborers, artisans and small
entrepreneurs, and for matters connected therewith and incidental thereof.
Before the initiation of the banking reforms, lending from the RRBs was largely
restricted to the priority sector. From September 1992 onwards, the RRBs were
allowed to finance non-target groups to the extent not exceeding 40 percent of their
incremental lending. This limit was subsequently enhanced to 60 percent in 1994.
A look at the statistical figure of the purpose wise advances of RRBs for the year
ending Sep, 1990 can exhibit the evidence of the above statement.
4
Note: The year 1990 marks the end of the expansion phase of Regional Banks, beyond which there
has been no growth in the number of Regional Rural Banks.
42
PURPOSEWISE ADVANCES OF RRBs (end of Sept, 1990)5
6 Consumption Loan 54
8 Indirect Advances 43
TOTAL 3555
Moreover, RRBs were not given the flexibility in most of its affairs; even their
clientele was specific in most of the cases till the banking reforms.
This in turn made the bank to operate in its existing pattern and not to advance loans
for automobiles, etc. on a commercial scale.
Maruti analyzed that as it was the chairman who was given the authority to decide
which all purposes should the loans be advanced to, as such it was he who would have
to be convinced. For this purpose Mr. Jagdish Khattar, Managing Director, Maruti
Udyog Limited took upon himself this task of convincing all the RRB Chairmen to
advance loans for automobile purchases on a large scale on his shoulders.
He wrote personally signed letter to all the chairmen of the various RRBs and even
held conferences with most of them, to make them understand, why they should
5
Source: Report in Trends and progress of Banking in India, 1990-91
43
advance loan for automobile purchases and to remove any sort of barriers or
apprehensions which they might have in regards of car loans.
He even asked the head of the finance department to personally look into any sort of
problems which these banks might encounter and if required, find a remedy to them.
It was result of his efforts that an agreement was reached with many RRBs for
advancing loans for automobile purchase and that to on a commercial large scale.
To make the scheme successful, the company also made additional marketing efforts
especially for this scheme. This was done on two levels:
o Dealer level
o Company Level
Dealer Level
The dealer was made to recruit special marketing agents called as RSEs, that
is, Rural Sales Executive, especially for this scheme. The work of these RSEs
was to go in the field and spread awareness about this scheme in the rural
areas and hence secure sales from the rural areas. In addition, Team leader was
also to be allotted by the dealer especially for this scheme so that a proper
check can be kept on the daily development of the scheme.
Dealer was made to organize events on a regular basis for the proper
advertisement of this scheme. The events were in the form of:
o Test Drives
o Display drives
44
o Sponsoring social get-togethers
Dealers were also made to publish various sorts of print ads in local
newspapers in forms of ads, handouts, etc. To distribute scheme pamphlets,
personalized letters to the Panchayati Raj members and to post various
banners, calendars, etc. They were also asked to telecast various T.V.
advertisements in the local cable channels.
The dealer was made to formulate a proper event calendar on a monthly basis
and inform the Regional Office about it, so as to ease the proper supervision of
these activities.
Dealer was also supposed to provide all the developments in regards of this
scheme on a regular basis to the R.O.
Dealers were provided with contact details of all the Panchayati Raj members
under his area. The dealer was made to call all the members and provide
information about the scheme to these people.
In addition to this, dealer was asked to get Village Information Cards (VIC)
duly-filled for all the villages under his area.
What is a VIC?
The Village Information Cards were designed by the company and than distributed
to all its dealers well in advance before the enactment of the scheme, so that the
dealers can collect all the required information before-hand.
VIC forms provide information on various aspects which can be beneficial in term
on marketing efforts. For instance, form provides information like period of
mela/festivals, no. of vehicles, etc. This information in turn can help in planning
an event in the village on a particular occasion and with the no. of vehicle, etc. the
dealer can judge whether the village has the potential to buy a car or not and
45
whether any marketing efforts are justified in the area or not. The information in
turn provides a strong basis for any sort of extra marketing efforts to be
undertaken by the dealer on his behalf. The format of a VIC form is as follows:
46
VILLAGE INFORMATION CARD
Key Contact Person Contact No. Key Contact Person Name Contact No.
LIC Office available (Y/N) School/Colleges available (Y/N)
LIC Officer/ Agent Principal/ Teacher
Bank Facility available (Y/N) Money Lender
SBI/SBOP/COOPERATIVE bank
PHC available (Y/N) Any Other
Doctor/ Veterinary doctor
Information
Farmers having land>5acres
Type of crop
Crop season
47
Company Level
Although the company didnt telecast any advertisement on the national T.V.
of this scheme as the company has a policy of not telecasting any offers which
are not consumer offers, that is, offers which are not available to all the
consumers on a uniform basis. But keeping the prospect of the scheme in mind
the company first of all designed a special print add, which was distributed in
all the rural areas in form of pamphlets, handouts, etc.
48
This incentive system adopted was different in another aspect as well. This
system didnt put a ceiling amount in terms of incentives, result being, the
more the RSEs sold the more can be their incentive. This was contrary of other
schemes, where the maximum amount of incentive that can be given was
fixed. The only constraint in this case was that the dealer must have sold
atleast 15 vehicles per month to be considered for this scheme.
Company also designed an all new cost sharing policy. Under this scheme,
whatever the price was incurred by the dealer in terms of advertisements,
events, etc. was to be shared on an equitable basis between the company and
the dealer. As such it helped in securing additional marketing efforts by the
dealers towards this scheme. Although existent earlier also, the 50:50 ratio was
new, done exclusively for this scheme.
Mr. Jagdish Khattar, MD, Maruti Udyog Limited, personally took daily update
on the progress of the scheme and to remove any hindrances, is any, as soon as
possible.
REGULAR FEEDBACK:
49
A regular feedback mechanism was adopted by the company. One major difference in
regards of these sessions was that in these sessions it was the RSEs who were
included and not the manager of the respective dealership. This was done with a view
to have first hand feedback from those who were working on the ground level, that is,
the place where all action takes place. The purpose of these sessions was to take note
of any problems being faced by the RSEs and take corrective actions as soon as
possible and also to take suggestions, which might help the company secure success
of the scheme.
The sessions were also focused to find out whether any changes in the scheme should
be made so as to make the company penetrate in the rural India to a greater extent.
Feedback sessions played a major role in the inclusion of newer categories to the
scheme in the days to come.
These sessions were different from the rest of the feedback session in another aspect
as well, as these sessions were not held in an economical hotel or a banquet but in
starred hotels. This was done to show to the RSEs, that how much importance the
company gave to them as they were working on this scheme.
In addition to the above factors, one thing that made it special was that, this scheme
was directly under the supervision of Mr. Jagdish Khattar, Managing Director, Maruti
Udyog Limited. He reviewed the developments of the scheme on a daily basis. This in
turn, made the other company executives to put in extra efforts towards this scheme.
50
SCHEME ALTERATIONS
The suggestions & feedback of the trainees, officials and RSEs who were working on
the scheme resulted in newer segments beings added to the scheme.
The segments that were added to the purview of the scheme are as follows:
Tractor owner
Arthi
Lambardar
Tehsildar
RRB employees
To be considered as a rural area under the scheme, the area should under the purview
of a Gram Panchayat. That is, it must have a Panchayat of its own in the villages or
has been recognized as a village by the government and its name is registered in the
records of the government as a village.
Who is an Arthi?
Arthi is a person who works in the Mandi or agriculture market, as a bulk purchaser
of crop from the farmers. These people are registered under the law and have a license
issued to them in their name to be called an Arthi. Hence any person who has his/her
name on the license of an Arthi was covered under the scheme.
Who is a Lambardar?
51
as an agent of the police and is given the powers to act like a police personnel within
limited means. He is issued a letter in his name by the district police.
Who is a Tehsildar?
Tehsildar is a government official who is not under the BDO but works along the
BDO for all sort of work to be undertaken by this office. As he is not an employee of
the BDO, as such was covered under the scheme earlier but was included in the
altered scheme plan.
Principal followed?
In almost all the above segments which were included in the scheme, followed the
same principal of entering the rural market by targeting the INLUENCERS to reach to
the common customer as was existent in the earlier scheme.
Tehsildar shares the same level of influence as does the employees of the Block
Development Office (BDO).
Arthi is the person to whom the villagers sell their farm produce and hence bestow
upon him a great amount of trust and faith and hence great level of influence.
Tractor owners are considered people who have some statute of their own in the
society. Moreover, people who dont have tractors often borrow tractors from these
people to harvest their fields, hence the tractor owners have a close bond with the
villagers and also have a high level of influence over the villagers as people look upto
these people for making a major decision.
Teachers are the most respected people in the villages, as it is them only who are
going to shape the future of their children. All the actions undertaken by the teachers
have a great impact on the minds and hence the buying behaviour of the children.
Children play a very crucial role in the purchase decision these days and hence can
create a lot of indirect influence on the decision makers.
52
Doctors are those, whom people trust their lives with. They are considered people
who are very intelligent and make very sensible decisions. Hence these people
command a very high level of influence over the people around them.
RRB employees were the only exception to the rule of offering the scheme to
INFLUENCERS, as RRB employees although dont command much influence but
were included in the scheme. It was done purposely, as it helped the company in
securing full cooperation from the RRBs, in terms of the loan advancements.
The inclusion of the above stated people under the purview of the scheme made the
response to the scheme improve tremendously. These inclusions also led to a huge
increment in influential purchase figures of the market as well.
Hence, the new categories made the realization of the dream of Maruti to make a
mark in the rural market one step closer to reality.
53
RESULTS6
TARGET ENQUIRIES ENQUIRIES
SALES FOR SALES SALES
ZONES REGION SALES FOR GENERATED IN GENERATED IN APRIL
APRIL FOR MAY FOR JUNE
JUNE JUNE + MAY
E1 1 9 27 70 220 190
E2 3 53 147 105 720 525
East E3 4 25 62 80 523 350
E4 9 41 167 135 1325 530
CBH(E) 17 128 403 390 2788 1595
N1 18 140 171 100 710 754
N2 4 73 206 150 512 623
North N3 15 105 277 145 1040 1500
N47 49 81 173 150 455 565
CBH(N) 86 399 827 545 2717 3442
S1 1 20 87 135 329 440
S2 1 44 151 120 587 375
South S3 18 30 122 125 413 1250
S4 1 68 179 135 307 400
CBH(S) 21 162 539 515 1636 2465
W1 1 5 24 40 72 38
W2 5 100 118 125 712 3012
West W3 2 165 277 150 1342 800
W4 11 64 175 100 1061 532
CBH(W) 19 334 594 415 3187 4382
6
Source: Corporate & Institutional Sales Department, Maruti Udyog Limited
7
Note: Region N4 constitute of Haryana except Faridabad, Gurgaon & Rewari
54
FINDINGS
The findings, individually, for all the parties involved in the scheme, directly or
indirectly, on the basis of the work performed by me under the project are as follows:
RSEs
Events organized by the RSEs were usually held between 10 am to 5 pm. This
resulted in lesser turn-up at the event, as people preferred staying within
closed doors, due to the extreme temperature prevailing in the season.
RSEs were more focused at meeting the overall targets of the showroom. As
such they focused more on areas which can bring in immediate sales rather
than concentrating on a scheme which will fetch majority of the sales in future
only.
RSEs were paid commission on each car they get financed from private
financer, which RRBs didnt pay such a commission. As such the RSEs didnt
refer any car to be car financed from RRBs, hence reducing the overall
attractiveness of the scheme.
Many RSEs didnt have proper knowledge about all the sale related aspects
like finance, true value, etc. As such they were not able to clarify all the doubts
of the customers as such losing the customer completely.
DEALER
Dealers didnt allocate proper funds to its RSEs. As such they were not able to
organize events as per their requirements. Hence reducing the sales of vehicles
under this scheme.
Total number of RSEs which were claimed to be deployed in the field for this
scheme by the dealer was far less than the number of RSEs which actually
worked in the field on this scheme.
55
Dealers didnt put banners in all the potential villages. In addition to this, T.V.
advertisements, pamphlets, etc. were either not distributed at all or were
distributed in insufficient quantities.
As the duration of scheme was uncertain to the dealers, as such they didnt
mention the full details of the scheme on the banners. As these materials have
a cost for the dealer, as such they were reluctant to invest in them because of
being uncertain as to whether they will be able to extract the cost out of the
scheme.
Some dealers offered free accessories rather than cash discounts. This greatly
affected the attractiveness of the scheme.
Dealers were more focused in completely their monthly targets and didnt
want to focus on a scheme which will not help them in achieving there targets.
They were more concerned about present rather than looking at the benefits
which they can reap in the days to come.
Events organized by the dealers were seldom held on a regular basis and
moreover, whenever they were held, it was in the form of canopy, without
demo cars, etc. Hence, reducing the overall attractiveness of the marketing
efforts.
A large number of the target customer had lost their ID cards, which was to be
submitted as an evidence to claim the discount. When they submitted a proof
in the form of written statement to support their claim certified by Sarpanchs,
etc. it was usually on a normal paper. As no proper format was provided to the
dealer, they were very reluctant to accept these documents and hence give the
target audience discounts under the scheme.
All the marketing activities being undertaken by the dealers in the rural areas
were on the same grounds as in the urban areas. This reduced the effectiveness
56
of the marketing efforts as there was a huge difference between the customer
and there buying behavior in the rural areas and that in an urban area.
FINANCER
The loans offered by the RRBs were on a flat rate, which are not favored much
by most people, as under this scheme they dont have an option of returning
the whole of the amount anytime in between the duration of the loan.
Loan clearance usually took around 20-25 days, which was a period too long
for most of the customers to wait for, even if they were offered lower interest
rates.
RRBs didnt pay the executive any commission for referring them a car; this
in turn resulted in RSEs not even providing information to the customer about
low interest being offered by the RRBs. Moreover in some cases, they even
convinced the people who were interested in getting their vehicle financed
from RRBs to switch over to private financers.
RRB employees didnt cooperate with the dealers executives when they in
initial stages to the scheme started referring cases for finance, result being
dealer executives stopped referring them any cases.
RRBs didnt organize any events, either on their own or in collaboration with
the dealer. Result being, private players didnt leave many cars to be financed
by these banks as they undertake continuous advertisements, events, etc. in
some cases, as a result of such marketing undertaken by the private banks
even customers preferred these banks over the RRBs.
57
RRBs for the purpose of approving a car loan required security in the form of
land registration papers, Farad, etc. which almost all the customers were
reluctant to provide.
TARGET CUSTOMERS
A majority of the target audience wanted to buy cars under this scheme for
their blood relatives, for various reasons like tax benefits, marriage purpose,
etc. A large number of enquiries were generated for this purpose.
Majority of the target customer thought a discount of Rs. 5000, too petty an
amount to be offered as a discount.
A large number of tractor owners in the villagers were second owners and they
didnt have the registration certificate transferred in their names, as they make
the purchase against affidavits only. As such they were not able to avail this
scheme
Most the villages had private schools rather than or in addition to the
government schools. But with private schools not covered under the scheme,
these teachers were not able to avail this offer; a segment also thought it a
cheating against them.
Villages also have a huge number of private practitioners which were not
covered under this scheme. Large number of practitioners enquired about the
scheme.
In the initial stages, when the scheme was offered only to the Panchayat
members only, many people felt that Maruti had cheated them. They argued
that the Panchayat members already have ample money with them, as such
dont require discounts and that it was they who should have been offered the
discounts.
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RECOMMENDATIONS
Recommendations for all the involved parties on an individual basis are as follows:
The working hours of the RSEs should be made flexible, so that they can
conduct the events as per the suitability of the weather, occasion, etc.
During summers, events should usually be held between 8 am to 12 pm in
the morning and then between 5 pm to 8 pm in the evening, as these
periods are the peak hours in the summers in the rural areas.
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Team leader should be mandated to submit report to the Regional Office
on a weekly basis with all information like number of vehicles delivered
under the scheme, events held, etc. with supporting information like
invoice number for the cars delivered and pictures of events held. This will
help in reducing false claims being made by the dealer.
Dealer should allocate budget to all its RSEs on a monthly basis, as this
will help in providing flexibility to the RSEs in regards of the hosting of an
event as per the suitability of his area.
Quotas should be fixed for schemes as well. As it was witnessed that all
the dealers gave more effort to the completion of the monthly targets rather
than on schemes which might not ensure them immediate sales or might
have a limited scope of sales.
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A strict penalty system, for those making unsatisfactory efforts towards the
scheme or not adhering to the guidelines of the company should also be
implemented. This will result in securing full cooperation of the dealers.
FINANCERS
Efforts should be made to make the RRBs reduce their processing time for the
clearance of a loan application and bring it to a decent level.
Formalities that are required to be completed for the clearance of the loan
application by these banks should be brought on the same platform as that of
other banks operating in these areas.
Tie-up with other private financers should be made, to offer loans at lesser rate
of interest.
Schemes like insurance for the loan, etc. can be introduced to remove the fear
in the mind of the people to provide their Farads, Land registration papers, etc.
As they will have surety of paying back the loan.
TARGET CUSTOMERS
All the blood relatives of the existing target customer should also be included
in the scheme.
As majority of the tractor owners in the villages are the second owners who
dont get the R.C. transferred in there name. As such method should be
devised to include these people under this scheme as well.
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Teachers of private school operating in the rural areas should also be included
in the scheme.
Private practitioners should also be brought under the purview of the scheme.
Reward system should also be introduced for these people, for every reference
sale they bring in for the company. This in turn will not only help in fully
exploiting the INFLUENCE of these people but in providing incentive for
these people as well to INFLUENCE other to purchase a car from Maruti.
PROSPECTIVE CUSTOMERS
Keeping in line with the policy of the company to offer the scheme only to the
Influencers, we can further include the following categories under the scheme:
SCHEME
After-sales schemes like coupons for discounted service charges, free labor
etc, should be introduced. This will not only act as an added attraction at the
time of purchase of the car but also help in bringing these people in bringing
their cars to the service centre for service rather than getting it serviced from a
local mechanic and hence help in generating income.
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Scheme should be extended to other cars like WagonR & Esteem as well, as
they have a great demand in the rural areas.
Special offers should be made for those interested in exchange of their old
vehicle for the purchase of a new vehicle.
Instead of offering cash discounts, we can offer free gifts like a small T.V.,
radio, dish T.V., mobile phone, etc. which not only costs around the same as
the discount being offered for the company but also has importance in the
mind of the customers.
MISCELLENEOUS
Special accessories like additional petrol tank that can be kept in the back,
high capacity carriers, etc. should also be offered by the company, as many
people dont have petrol pumps in vicinity of their homes and carriers because
most of the people use these for carrying goods to their field, shop, etc.
Special schemes like free insurance, extended warranty, etc. instead of cash
discounts can be introduced.
Services like servicing the car at the customer door-steps itself, etc. should be
introduced for customers in rural areas.
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Standard form for the preparation of banners, print-adds, etc. should be
provided to the dealers. As this will help in making sure that all the required
information is provided by all the modes of mass communication and that too,
in the correct format.
Regular check on the activities undertaken by the dealer as well as the RSEs
should be kept. Penalties should be imposed in case of any defaults.
Incentive system for RSEs should be introduced when they refer a case to the
RRBs, so as to compensate for the loss they will incur as a result of not
referring the case to private financers.
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STUDY ON BUYING BEHAVIOR OF RURAL
CUSTOMER REGARDING CARS
The rural markets of India is fascinating and challenging at the same time. It offers
large scope on account of its shire size. And, it is growing steadily. Even a modest
growth pushes up the sales of a product substantially, in view of the huge base.
The rural markets may be alluring but it is not without problems. Many big MNCs
are facing challenges in gaining success in the rural markets, as there marketing plans
come unstuck in rural areas, when almost all the marketing hotshots devising rural
strategies have enjoyed an urban lifestyle and can more easily connect to the urban
mindsets. The issue is that there is a vast difference in the lifestyle of the rural and
urban consumers and also there is no set format of the rural consumer behavior.
A car is one of the most significant purchases that an Indian household makes and this
project addresses the most important question that perplexes car manufacturers:
What are the decision making elements in the mind of a rural customer while
purchasing a car.
The objective of the survey was to determine the variables which affect the
individuals buying behavior. The effect of price, features, discounts, appearance, etc.
has also been studied also with the comparative analysis of the perception of the
customer in regards of any car and that of a Maruti car.
65
OBJECTIVES AND RESEARCH METHODOLOGY
OBJECTIVE
Main Objective
Ancillary Objective
To analyze the level of satisfaction shared by the owners of Maruti car owners.
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METHODOLOGY
Primary Data
Data was gathered directly from people in the rural areas. Their collection was
performed by observation and survey conducted on a part of total population under
consideration.
Here a survey of the automobile owners in the rural areas was done. Questionnaires
were filled by those who presently own a vehicle whether it is a two-wheeler, tractor,
car or a jeep.
Inferences were made on the basis of the responses filled by the respondents in the
questionnaire and also on the basis of personal information.
Secondary data
Secondary data was collected various dealers, books, magazine, websites and
company brouchers.
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LIMITATIONS OF THE STUDY
2. The Sample size being small, limited the scope and study of the project.
4. Owners sometimes did not provide with correct information regarding their
income, decision considerations, etc.
5. Many times the owner was not sure about various aspects which were under
the purview of the study.
7. Many respondents were farmers and they didnt have a proper accounting of
their income and hence were unable to provide with correct information in this
regard.
8. Most of the rural customer made their purchase decision in groups, as such it
made impossible for them to answer on individual basis to the question with
utmost precision.
9. As there are great differences in the culture of one area from another, as such
the findings of the study might not be applicable in all the areas.
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DATA ANALYSIS AND INTERPRETATION
A.1. The question was formulated to know what percentage of the respondents
owned a credit card and to correlate it to the mode of payment for the purchase of the
car. The data collected has been has been tabulated and explained as below:
Figure 1
Which of the following credit cards do you own? * Mode of payment for the car?
60% of the respondents who owned a credit card made payment through loans. The
percentage was about 78% in regards of gold card owners, 60% in case of silver card
owners and 54% in regards of owners of other credit cards.
Around 65% of the respondents owned one credit card or the other and around 60% of
the credit card owners made the payment for the purchase of a car through loans. The
company should take various measures so as to tap this segment to the fullest. In
addition, company should also devise methods to utilize this high level of card holders
in the rural areas.
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A.2. The question was formulated to know the car which the respondents currently
own and also the probability of these respondents of buying a Maruti car based on
their overall experience. The data collected has been has been tabulated and explained
as below:
Table 2
Which car do you own? * How likely would you be to purchase a vehicle from Maruti based on your overall
experience?
How likely would you be to purchase a vehicle from Maruti based on your
overall experience?
Hyundai 1 5 1 1 0 8
Ford 0 2 0 0 0 2
Tata 5 2 1 0 0 8
Toyota 0 1 0 0 1 2
Total 63 42 11 2 2 120
82% of the respondents owned a Maruti vehicle at the time of the survey. 52% of all
the respondents said they definitely would buy a Maruti car were as this percentage
was about 57% of the current Maruti owners.
A large chuck of Maruti car owners didnt replied as definitely would to the question.
The company should analyze the reason behind the dissatisfaction of the customers
and devise methods to remove the cause of dissatisfaction. Moreover, keeping in view
the influential buying in villages, removal of the cause of dissatisfaction is very
necessary.
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A.3. The question was formulated to analyze the most important factors in regards
of a purchase decision keeping all the other aspects influencing a purchase decision in
mind. The data collected has been has been tabulated and explained as below:
Figure 3
37% of the respondents ranked cost of the product as the most important factor in
regards of there purchase decision. 20% ranked finance as the most important, 19%
ranked fuel efficiency and 11% ranked product features as the most important factor
in regards of there purchase decision.
Cost of the product, finance options, fuel efficiency and product features are the four
most important features in regards of a purchase decision. We can see that when all
the features of a car are taken into consideration than discounts dont even come
under the top four. As such company should try to improve upon these four features so
as to come out of the vicious circle of discounts. Moreover, these factors might help
the company create differentiation from its competitors products.
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A.4. The question was formulated to correlate the mode of payment for the car to
the level of importance given to the discounts available at the time of the purchase of
the vehicle. The data collected has been has been tabulated and explained as below:
Table 4
Mode of payment for the car? * How important were the schemes/discounts available while deciding upon
the car?
Total 11 43 17 28 21 120
41% of the respondents who bought the vehicle on loan ranked discounts as important
or most important whereas these number sum up to 50% in case of respondents who
bought the car on cash basis.
Respondents who either bought car on loan or cash gave almost similar importance to
discounts, as such company should offer discounts to both these segments. As the
requirements of both the segments are different, as such the company should develop
means of satisfying the requirements of the customers as per their requirements.
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A.5. The question was formulated to know the level of importance the interiors of a
car has on the purchase decision of a customer. The data collected has been has been
tabulated and explained as below:
Table 5
Car should have appealing interiors? * Maruti cars have appealing interiors?
Neither
Completely Somewhat Agree nor Somewhat Completely
Agree Agree Disagree Disagree Disagree Total
Neither Agree
1 0 7 2 0 10
nor Disagree
Somewhat
4 1 6 5 4 20
Disagree
Completely
2 3 7 2 2 16
Disagree
Total 17 13 43 19 28 120
62% of the respondents agreed to the statement whereas only 25% of the respondents
agreed that Maruti cars have appealing interiors. 40% of the respondents disagreed
completely or to some extend that Maruti cars dont have appealing interiors.
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A.6. The question was formulated to know the level of importance the external
appearance of a car has on the purchase decision of a customer. The data collected has
been has been tabulated and explained as below:
Figure 6
Almost 51% of the respondents agreed to the statement that cars should be visually
appealing. In regards of Maruti only 34% of the respondents agreed that Maruti
vehicles are visually appealing. Moreover, only 11% completely agreed to the
statement.
Hence, company should try to better understand the customer expectations and design
cars which can better suit the expectations of the customers, in terms of the cars
visual appearance.
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A.7. The question was formulated to know the general expectation of the customers
in regards of the company of the vehicle they own or are willing to purchase a vehicle
from. The data collected has been has been tabulated and explained as below:
Figure 7
The highest percentage of respondents completely disagreed that the company should
be dependable from which they are buying a car. Majority of the respondents were
also of the thought that Maruti Company is dependable.
As such we can conclude that rural customer hardly differentiate between two
companies on basis of its dependability. As such Maruti can loose the extra edge it has
in terms of dependability in the rural areas. As such, company should try to attract
customers on basis other than the dependability of the company.
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A.8. The question was formulated to know the general view of the customer as to
importance of a company having its service centres in proximity to their homes or not
correlated with Marutis service centre network. The data collected has been has been
tabulated and explained as below:
Table 8
Neither
Completely Somewhat Agree nor Somewhat Completely
Agree Agree Disagree Disagree Disagree Total
Service Completely
6 8 0 2 0 16
centre Agree
should be in
proximity Somewhat
4 3 1 3 1 12
Agree
Neither Agree
9 4 2 0 0 15
nor Disagree
Somewhat
30 4 1 1 5 41
Disagree
Completely
26 7 2 0 1 36
Disagree
Total 75 26 6 6 7 120
More than 50% of the respondents either completely disagreed or somewhat disagreed
that service centre must be in proximity to their place. As regards of Maruti, about
84% of the respondents either completely agreed or somewhat agreed that the service
centres of Maruti are in proximity.
As such we can conclude that the unique which Maruti relies mostly does not have
much of an importance in the rural areas. Hence, company should start differentiating
itself from other companies on some other aspect rather than service centre proximity.
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A.9. The question was formulated to know the extent of the effect of discounts on
the buying behavior of the customer in general and also the extent of influence of
discounts in regards of Maruti cars. The data collected has been has been tabulated
and explained as below:
Table 9
Discounts are a deciding factor? * Without discount I will not buy a Maruti car?
49% of the respondents either somewhat disagreed or completely disagreed that the
discounts are the deciding factor whereas but on the other hand around 25% of the
respondents neither agreed nor disagreed. In regards of Maruti, 58% of the
respondents either completely disagreed or somewhat disagreed that discounts are the
deciding factor in regards of their purchase decision, whereas 38% of the respondents
completely or somewhat agreed that discounts are the deciding factor.
As we can see from the graph, the respondents were almost equally divided in this
regards. The importance given although is equal but their basic requirements are
different, as such the company should approach both the segments differently.
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A.10. The question was formulated to correlate the planning of car purchase with the
level of the awareness about the Panchayat Scheme. The data collected has been has
been tabulated and explained as below:
Figure 10
Are you planning to buy a car in the next one year? * Are you aware of the Panchayat scheme?
40% of the respondents were planning to buy a vehicle in the next one year and about
55% of the respondents were aware of the Panchayat Scheme. Around 60% of the
respondents were aware of the Panchayat Scheme.
Although 55% of the respondents were aware of the scheme but still a large chuck is
not aware of the scheme. Moreover, the influential buying even a small segment
might bring in; the company should undertake more efforts to spread awareness of the
scheme.
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A.11. The question was formulated to analyze what percentage of the respondents
which were belonging to different occupations, were aware of the Panchayat Scheme.
The data collected has been has been tabulated and explained as below:
Table 11
Yes No Total
Occupation Farmer 7 3 10
Trader 29 19 48
Teacher 5 3 8
Panchayat Member 3 0 3
Doctor 0 2 2
Unemployed 0 1 1
Others 25 23 48
Total 69 51 120
70% of the farmers, 63% of the teachers, 100% of the Panchayat members, 0% of the
doctors and 52% of the respondents belonging to the others category were aware of
the scheme.
None of the doctors were aware of the scheme; as such special efforts should be made
to spread awareness in this segment. Although the awareness level of the farmers is
70% but keeping in view the population size of the farmer segment, even 30%
constitute a huge segment. As such scheme should be promoted to this segment on a
larger scale to this segment also.
The overall awareness level of the scheme is around 57%, as such immediate measure
should be taken to spread awareness of the scheme on a larger scale.
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A.12. The question was formulated to analyze what amount of importance was given
to discounts by the respondents in correlation with their income levels. The data
collected has been has been tabulated and explained as below:
Table 12
How important were the schemes/discounts available while deciding upon the car? * Income per month
49% of those belonging to the income slab of 15,000, 41% of those belonging to the
slab of 15,001 to 30,000 and 42% of the respondents belonging to the slab of 30,000
and above ranked discounts as the important or most important factor in regards of
here purchase decision.
We can conclude that higher the income per month, lesser is the importance given to
discounts. This in turn provides us a more concrete evidence of the existence of the
difference in the requirements of the customers. As such, company should try to
approach them differently rather than providing them the same offers.
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RECOMMENDATIONS
On the basis of the above graphs as well as all the other inferences drawn from the
survey, the recommendations are as follows:
The company should launch various special finance options especially for
credit card holders, so as to tap this segment to the fullest.
As credit card holders are verified as well as have some credit standing in the
market as such they can be easily financed. As such they can serve as a
segment which can help the company overcome the verification problem in
regards of financing from RRBs.
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Company should undertake various surveys so as to analyze the reasons of
dissatisfaction amongst its current customers and take appropriate measures so
as to remove the reasons.
Company should try to improve the features in its cars; measures to increase
the fuel efficiency should also be taken. In addition, the company should
launch various finance options to its customers.
Majority of the respondents believed that Maruti cars dont have appealing
interiors; as such desperate measures should be taken to improve the interiors
of the cars.
Schemes for customers selling their old vehicle to buy a new vehicle should
also be introduced.
Rural customers also give a great deal of importance to the level of utility that
the car can provide them. As such the company should project the various
purposes that the car can be used in, which is of some importance to these
customers.
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Hyundai and Tata cars are the closest competitors of Maruti, as such the
company should analyze the methodology adopted by the companies in term
of the car design, interiors, marketing strategy, etc. and them try to out-run
them in each and every aspect.
Most of the people were either in the category of below 25 or 25-40, as such
the company should devise schemes which can lure this segment and hence
attract this segment towards Maruti cars to the maximum level.
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REFERENCES
www.marutiudyog.com
www.siamindia.com
www.google.com
IILM library
84
ANNEXURES
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ANNEXURE I
Dealerships Allotted
1. Modern Automobile
Ambala
3. Hissar Automobiles
Hissar
4. Modern Automobiles
Hissar
5. Eakansh Motors
Kaithal
7. Modern Automobile
Karnal
9. Harisons Automobiles
Panipat
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ANNEXURE- II (SAMPLE)
87
Questionnaire
Market Survey
A.1. Which of the following vehicles do you own? (Tick as many applicable)
Two-wheeler Three-wheeler Tractor
Car Jeep None
A.2. Which of the following items do you own? (Tick as many applicable)
Television Fridge Air Conditioner (A.C.)
Cable T.V. Mobile Phone Geyser/Heater
Please answer the under given question only if you own a car.
_____________________________________________________________________
B.2. Did you sell an old car when you bought a new car?
Yes No
B.4. How important were the schemes/discounts available at the time of purchase
while deciding upon the car?
Most Important Important Cant say
Not important Not at all important
Please answer the rest of the questions based on your decision making
process undertaken in regards of your present car.
C.1. Please rank the FOUR MOST IMPORTANT factors of the following based
on its importance in regards of your decision:
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E Discounts at the time of purchase
F Brand name
G Finance options
C.2. Please rank the TOP THREE companies of the following, on basis of your
personal preference:
C.3. Please rate the following statements on a scale of 1 to 5, where 5 mean you
completely agree, 1 means you completely disagree, 3 means you neither agree
nor disagree with the statement:
S.NO. STATEMENT 5 4 3 2 1
A Car should have appealing interiors
B Car should be visually appealing
C Company should be dependable
D Service centre should be in proximity
E Discounts are a deciding factor
C.4. Now answer the following question in regards of Maruti Udyog Ltd.:
S.NO. STATEMENT 5 4 3 2 1
A Maruti cars have appealing interiors
B Maruti cars are visually appealing
C Maruti company is dependable
D Marutis service centers are in proximity
E Without discount I will not buy a Maruti car
D.1. Based on your overall experience, how likely would you be to purchase a
vehicle from Maruti Udyog Ltd.
Definitely would Probably would Might or might not
Probably would not Definitely would not
D.2. Are you planning to buy a car in the next one year?
Yes No Cant Say
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D.3. Are you aware of the Mera Sapna- Meri Maruti Scheme of Maruti?
Yes No
E.2. Occupation
Farmer Trader Teacher Panchayat member
Doctor Arthi Unemployed Others _________
Name ______________________________________________________________
Contact No. __________________________________________________________
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