INTRODUCTION

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 INTRODUCTION

Consumer Preferences and Related Concepts

As with much research on consumers, and indeed social science in general, there is a lot of
terminological confusion and sometimes a lack of rigour. This is acknowledge within the
academic literature and steps are being taken to rectify this situation. The following
definitions of key terms are provided in the hope of clarifying the following discussion of the
literature:

Consumer Satisfaction

Consumer satisfaction and acceptance are often considered in the literature to be closely
linked yet these are distinct concepts. Satisfaction is the fulfillment and gratification of the
need for a stated good or service.

Consumer Acceptance

Acceptance describes consumer willingness to receive and/or to tolerate. For example, a

customer might accept the occurrence of a certain number of yearly supply interruptions
given a certain price. Consumer acceptance and satisfaction are related, as the first is a
precursor of the latter. However, despite the fact that satisfaction and acceptance can be
thought of as lying on

a continuum, acceptance does not automatically lead to satisfaction . Weighing needs or

preferences against provided product or service attributes results in the balance of satisfaction
pointing in a negative positive direction, depending on whether interests are conflicting or
corresponding.

This determines the way in which people evaluate companies’ utilities’ performance. Only
when a consumer’s needs for a stated good or service are met, i.e. when the service provided
corresponds with their preferences, will they feel satisfied. Customer satisfaction can be
enhanced when their needs are met (in terms of both quality and quantity) and accord with
their preferences. At the other end of this dimension, where the service provided conflicts
with the prevailing needs or preferences, customers may experience feelings of
dissatisfaction.

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Schematic review of the concept of acceptance placed in the context of customer
preferences and satisfaction

Acceptance is also used in the literature to mean an affirmative answer to a

proposal. The distinction is subtle but there are occasions where consumers

might not agree to a proposal yet accept the subsequent service in the sense of

Promotion-

It is not enough for a business to have good products sold at attractive prices. To generate
sales and profits, the benefits of products have to be communicated to customers. In
marketing, this is commonly known as "Promotion".

“Promotion is all about companies communicating with customers.”

Promotion is a form of corporate communication that uses various methods to reach a

targeted audience with a certain message in order to achieve specific organizational
objectives. Nearly all organizations, whether for profit or non-profit in all types of industries,
must engage in some form of promotion. Such efforts may range from multinational firms
spending a large sum on securing high profile celebrities to serve as a corporate spoke

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persons to the owner of one person enterprise passing out business cards at local business
persons meeting.

Like most marketing decisions, an effective promotional strategy requires the marketer
understand how promotion fits with other pieces of the marketing puzzles ( e.g. product,
distribution, pricing, target markets). Consequently, promotion decisions should be made with
an appreciation for how it affects other areas of the company. For instance, running a major
advertising campaign for a new product without first assuring there will be enough inventory
to meet potential demand generated by the advertising would certainly not go over well with
company’s production department. Thus marketer should not work in a vacuum when making
promotion decisions. Rather, the overall success of a promotional strategy requires input from
others in impacted functional areas.

Promotion has several possible objectives and many pieces of marketing promotion aim to
achieve several of the following objectives at the same time:

Inform

Management may need to make their audience aware that their product exists, and to explain
exactly what it does. This is a particularly important objective for new products.

Persuade

An important stage in creating favourable attitudes towards the business and its brands.
Through persuasive promotion, management will seek to persuade customers and the trade
that their brand has benefits that are superior to competitors

Image creation

Sometimes, promoting a brand image is the only way to create differentiation in the mind of
the consumer (e.g. lager advertising).

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Reassurance

Much promotion (particularly advertising) is about reassuring customers that they have made
the right choice and encouraging them to stay loyal to a brand.

There are a large and growing number of promotional methods that businesses can use. The
main instruments - advertising, direct response mailing, sales promotion, public relations and
direct selling, are often mixed together as part of the promotional mix. Each has different
strengths.
What is important is that the promotional mix is carefully planned and the results monitored
to ensure that the total promotional cost is controlled.

A business' total marketing communications programme is called the "promotional mix" and
consists of a blend of advertising, personal selling, sales promotion and public relations tools.
In this revision note, we describe the four key elements of the promotional mix in more
detail.

It is helpful to define the four main elements of the promotional mix before considering their
strengths and limitations.

(1) Advertising

Any paid form of non-personal communication of ideas or products in the "prime media": i.e.
television, newspapers, magazines, billboard posters, radio, cinema etc. Advertising is
intended to persuade and to inform. The two basic aspects of advertising are the message
(what you want your communication to say) and the medium (how you get your message
across).

(2) Personal Selling

Oral communication with potential buyers of a product with the intention of making a sale.
The personal selling may focus initially on developing a relationship with the potential buyer,
but will always ultimately end with an attempt to "close the sale".

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(3) Sales Promotion

Sales promotion is an important component of a small business's overall marketing strategy,

along with advertising, public relations, and personal selling.

The American Marketing Association (AMA) defines sales promotion as "media and non-
media marketing pressure applied for a predetermined, limited period of time in order to
stimulate trial, increase consumer demand, or improve product quality”.

Some common types of sales promotion include samples, coupons, sweepstakes, contests, in-
store displays, trade shows, price-off deals, premiums, and rebates.

Businesses can target sales promotions at three different audiences: consumers, retailers, and
the company's own sales force.

Compared to the other components of the promotion mix (advertising, publicity, and personal
selling), sales promotion usually operates on a shorter time line, uses a more rational appeal,
returns a tangible or real value, fosters an immediate sale, and contributes highly to
profitability.

Sales promotion can be an effective tool in a highly competitive market, when the objective is
to convince retailers to carry a product or influence consumers to select it over those of
competitors.

Sales promotion tends to work best when it is applied to impulse items whose features can be
judged at the point of purchase, rather than more complex, expensive items that might require
hands-on demonstration.

Methods of sales promotion

There are many consumer sales promotional techniques available, summarised in the table
below:
Price promotions

Price promotions are also commonly known as” price discounting”. These offer either
(1) a discount to the normal selling price of a product, or
(2) more of the product at the normal price.

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Increased sales gained from price promotions are at the expense of a loss in profit – so these
promotions must be used with care. A producer must also guard against the possible negative
effect of discounting on a brand’s reputation

Coupons

Coupons are another, very versatile, way of offering a discount. Consider the following
examples of the use of coupons:

- On a pack to encourage repeat purchase

- In coupon books sent out in newspapers allowing customers to redeem the coupon at a
retailer
- A cut-out coupon as part of an advert

- On the back of till receipts

The key objective with a coupon promotion is to maximise the redemption rate – this is the
proportion of customers actually using the coupon. One problem with coupons is that they
may simply encourage customers to buy what they would have bought anyway. Another
problem occurs when retailers do not hold sufficient stocks of the promoted product –
causing customer disappointment.

Use of coupon promotions is, therefore, often best for new products or perhaps to encourage
sales of existing products that are slowing down.

Gift with purchase

The “gift with purchase” is a very common promotional technique. It is also known as a
“premium promotion” in that the customer gets something in addition to the main purchase.
This type of promotion is widely used for:

- Subscription-based products (e.g. magazines)

- Consumer luxuries (e.g. perfumes)

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Competitions and prizes

Another popular promotion tool with many variants. Most competition and prize promotions
are subject to legal restrictions.

Money refunds

Here, a customer receives a money refund after submitting a proof of purchase to the
manufacturer. These schemes are often viewed with some suspicion by customers –
particularly if the method of obtaining a refund looks unusual or onerous.

Frequent user / loyalty incentives

Repeat purchases may be stimulated by frequent user incentives. Perhaps the best examples
of this are the many frequent flyer or user schemes used by airlines, train companies, car hire
companies etc.

Point-of-sale displays

Research into customer buying behaviour in retail stores suggests that a significant proportion
of purchases results from promotions that customers see in the store. Attractive, informative
and well-positioned point-of-sale displays are, therefore, very important part of the sales
promotional activity in retail outlets.

(4) Publicity

The communication of a product, brand or business by placing information about it in the

media without paying for the time or media space directly. otherwise known as "public
relations" or PR.

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Advantages and Disadvantages of Each Element of the Promotional Mix

Advertising-

Good for building awareness

 Effective at reaching a wide audience

 Repetition of main brand and product positioning helps build customer trust

 Impersonal - cannot answer all a customer's questions

 Not good at getting customers to make a final purchasing decision

Personal Selling-

 Highly interactive - lots of communication between the buyer and seller

 Excellent for communicating complex / detailed product information and features

 Relationships can be built up - important if closing the sale make take a long time

 Costly - employing a sales force has many hidden costs in addition to wages

 Not suitable if there are thousands of important buyers

Sales Promotion-

 Can stimulate quick increases in sales by targeting promotional incentives on

particular products

 Good short term tactical tool

 If used over the long-term, customers may get used to the effect

 Too much promotion may damage the brand image

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 Public Relations-

 Often seen as more "credible" - since the message seems to be coming from a
third party (e.g. magazine, newspaper)

 Cheap way of reaching many customers - if the publicity is achieved through the
right media Risk of losing control - cannot always control what other people write
or say about your product.

Targets Of The Marketing Promotion

The audience for an organisation’s marketing communication efforts is not limited to just the
marketer’s target market. While the bulk of a marketer’s promotional budget may be directed
at the target market , there are many other groups that could also serve as useful target of a
marketing message.

Targets of marketing message generally fall into one of the following

categories:

 Members of the organisation target market – this category would include current
customers , previous customer’s and potential customers , ans as noted , may receive the most
promotional attention.

 Influencers of the Organisation’s target market- There exists a large group of

peoples and organisations that can affect how a company targets market is exposed to and
perceives a company products. These influencing groups have their own communication
mechanism that reach the target market and the marketer may be able to utilise these
influencers to its benefit. Influencers include the news media, special intrest groups, opinion
leaders and industry trade associations.

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 Participants in the distribution process - The distribution channel provides services to
help gain access to final customers and are also target markets since they must recognise a
products benefits and agree to handle the product in the same way as final customers who
must agree to purchase products. Aiming promotions at distribution partners and other
channel members are extremely important and ,in some industries, represents a higher portion
of a marketers promotional budget than promotional spending directed at the final customer.

 Other Companies- The most likely scenario in which a company will communicate with
another company occurs when the marketer is probing to see if the company would have
interest in a joint venture, such as a co- marketing arrangement where two firms share
marketing costs. Reaching out to other companies, including companies who may be
competitors for other products, could help create interest in discussing such a relationship.

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COMPANY PROFILE

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1.1 ORGANISATION INFORMATION

Maruti Udyog Ltd. (MUL) is the first automobile company in the world to be honoured
with an ISO 9000:2000 certificate. The company has a joint venture with Suzuki Motor
Corporation of Japan. It is said that the company takes only 14 hours to make a car. Few of the
popular models of MUL are Alto, Wagon-R ,Swift, Ritz, Swift Dzire, SX4.

SUZUKI MOTOR CORPORATION

“Way of life”

Suzuki Motors is a Japanese company which makes world class cars in India as a joint
venture with Maruti Udyog Ltd. of India. Suzuki is also one of the leading motorcycles
manufacturers in the world. The company makes sports utility vehicles (SUVs), all terrain
vehicles (ATVs), minicars, premium and luxury cars.

Maruti Suzuki India Ltd Formerly known as Maruti Udyog Limited. The Group's
principal activity is to manufacture, purchase and sale of Motor Vehicles and Spare parts.

The MUL is a subsidiary of Suzuki Motor Corporation. The other activities of the Group
comprises of facilitation of Pre-Owned Car Sales, Fleet Management and Car Financing.

The Group also provides services like framing of customized car policies, economical leasing of cars,
maintenance management, registration and insurance management, emergency assistance and
accident management. The product range includes ten basic models with more than 50 variants.

To reach the customers, the group has built a strong sales network of 681 sales outlets spread over
393 towns and cities. They provide maintenance support to customers through 2767 workshops
spread over 1314 towns and cities.

Maruti is the highest volume car manufacturer in Asia, Outside Japan, and Korea. It is the
one of the most successful automobile company since its inception.

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1.2 HISTORY

Michio Suzuki promoted Suzuki under the name Suzuki Loom Works in 1909, in the town of
Hamamatsu, Japan. The firm was in the business of manufacturing weaving looms. The firm
was incorporated as Suzuki Loom Manufacturing Co. in March 1920. With the objective of
diversification, Michio Suzuki decided to enter into the small car business, and built several
innovative small car prototypes in the late 1930s.

The name of the company was then changed to Suzuki Motor Co., Ltd in June 1954.

In 1954 Suzuki was manufacturing 6,000 motorcycles per annum. The company launched its
first lightweight car, “Suzulight”, in 1955. By the early 1960s, Suzuki’s products were being
sold in the European and US markets. Over the next few decades, Suzuki gained a reputation
as a top manufacturer of small cars. By 1977, Suzuki started selling its outboard motors in the
US, maintaining a rich tradition of innovation in all its product offerings.

In October 1990, the name of the company was changed to Suzuki Motor Corporation. Some
of the other products manufactured by Suzuki include outboard motors, generators, welders,
general-purpose engines, boats, motorized wheelchairs, electro-scooters, ultrasonic related
products (cleaner, cutter, etc.) and pre-fabricated houses.

SUZUKI AND MARUTI

Suzuki has always played, and continues to play, an important role in the management of our
Company. Some of our key management personnel and technical personnel are deputed
Suzuki. Currently, two of our directors are also directors of Suzuki. In 1982, Suzuki acquired
a 26% stake in our Company. Since then, Suzuki has increased its stake in our Company and
currently holds about 54.2%.

Suzuki provided us access to some of their products, licensed their technology, shared with us
their best practices in manufacturing processes and helped us develop and manage our supply
chain.

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Suzuki has also provided support in training our personnel and integrating Japanese
management practices such as Kaizen in our plant.Due to the collaborative efforts by MUL,
MUL believe that they become more efficient than many of Suzuki’s plants worldwide

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1.3 STRUCTURE

February 1981
Year of Establishment

"The Leader in The Indian Automobile Industry, Creating

Customer Delight and Shareholder's Wealth;
Vision
A pride of India."

Industry Automotive - Four Wheelers

Listings & its codes BSE - Code: 532500

NSE - Code: MARUTI
Bloomberg: MUL@IN
Reuters: MRTI.BO

Joint Venture With Suzuki Motor Company, now Suzuki Motor Corporation, of
Japan in October 1982.

Registered & Corporate Office 11th Floor, Jeevan Prakash

25, Kasturba Gandhi Marg
New Delhi - 110001, India
Tel.: +(91)-(11)-23316831 (10 lines)
Fax: +(91)-(11)-23318754, 23713575
Telex: 031-65029 MUL IN

Works Palam Gurgaon Road

Gurgaon -122015
Haryana, India
Tel.: +(91)-(124)-2340341-5, 2341341-5

Website www.marutiudyog.com

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1.4 PRODUCTS

Products Brands

Four Wheelers Maruti 800 Maruti Alto Maruti Wagon-R

Maruti Zen Maruti Grand Vitara XL-7 Maruti Gypsy King

Maruti Omni Maruti Suzuki SX4 Maruti Swift

Maruti Versa Maruti Grand Vitara Maruti A-Star

Maruti Ritz Maruti Swift D-Zire

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Milestones

1981  Maruti Udyog Ltd. was incorporated.

1982  Steped into a JV with SMC of Japan.

1983  Maruti 800, a 796 cc hatchback, India's first affordable car was
produced.

1984  Installed capacity reached 40,000 units. Omni, a 796 cc MUV was in
production.

1985  Launch of Maruti Gypsy (970cc, 4WD off-road vehicle).

1986  Produced 100,000 vehicles (cumulative production).

 Exported first lot of 500 cars to Hungary.

1987

1988  Installed capacity increased to 100,000 units.

 SMC increases its stake to 50 per cent.

1992

1994  Produced the 1 millionth vehicle since the commencement of

production.

1995  Second plant launched, the installed capacity reached 200,000 units.

1996  Launch of 24-hour emergency on-road vehicle service

1997  Produced the 2 millionth vehicle since the commencement of

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 production.

1998  Launch of website as part of CRM initiatives.

1999  Launch of Maruti - Suzuki innovative traffic beat in Delhi and

Chennai as social initiatives.

2000  IDTR (Institute of Driving Training and Research) launched jointly

with Delhi government to promote safe driving habits.

2001  Launch of customer information centers in Hyderabad, Bangalore,

and Chennai.

2002  SMC increases its stake to 54.2 per cent.

 Launch of Maruti Finance with 10 finance companies in Mumbai.

 Start of Maruti True value in Mumbai.

2003  Production of 4 millionth vehicle.

 Listed on BSE and NSE after a public issue oversubscribed 10 times.

2004  Maruti closed the financial year 2003-04 with an annual sale of
472122 units, the highest ever since the company began operations 20
years ago.

2005  The fiftieth lakh car rolls out in April, 2005.

Awards & Accolade

2005  Number one in JD Power SSI for the second consecutive year.

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  Number one in JD Power CSI for the sixth time in a row - the only
car to win it so many times.

 M800, WagonR and Swift topped their segments in the TNS Total
Customer Satisfaction Study Leadership in the JD Power Initial
Quality Study - Alto number one in its segment for the 2nd time in a
row, Esteem number one in its segment for the 3rd year in a row,
Swift number one in the premium compact segment.

 WagonR and Esteem top their segments in the JD Power APEAL

study.

 TNS ranks Maruti 4th in the Corporate Reputation Strength (CSR)

study (#1 in Auto sector)-Feb 05.

 Maruti bagged the "Manufacturer of the year" award from Autocar-

CNBC (2nd time in a row)-Feb 05.

 First Indian car manufacturer to reach 5 million vehicles sales.

 Business World ranks Maruti among top five most respected

companies in India-Oct 04.

 Maruti ranked among top ten (Rank7) greenest companies in India by

Business Today - Sep '04

2004  Maruti Suzuki was No. 1 in Customer satisfaction, No. 1 in Sales

Satisfaction No.1 in Product Quality (Esteem and Alto) and No. 1 in
Product Appeal (Esteem and Wagon R).

 No. 1 in Total Customer Satisfaction.

 Business World ranked us among the country's five most respected

companies.

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  Business World ranked us the country's most respected automobile
company.

 Voted Manufacturer of the year by CNBC.

 Voted one of India's Greenest Companies by Business Today-AC

Nielson ORG-MARG.

Maruti Suzuki has two state-of-the-art manufacturing facilities in India. The first
facility is at Gurgaon spread over 300 acres and the other facility is at Manesar, spread
over 600 acres in North India.

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The Gurgaon And Manesar Plant

Maruti Factory is situated in Old Gurgaon-Delhi Road, at a distance of about 7km from Gurgaon Bus
Stand.

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The Gurgaon Facility

Maruti Suzuki's facility in Gurgoan houses theeree fully integrated plants. While the three
plants have a total installed capacity of 350,000 cars per year, several productivity
improvements or shop floor Kaizens over the years have enabled the company to manufacture
nearly 700,000 cars/ annum at the Gurgaon facilities.

The entire facility is equipped with more than 150 robots, out of which 71 have been
developed in-house. More than 50 per cent of our shop floor employees have been trained in
Japan.

The Gurgaon facility `K'Engine plant.

The `K' family engine plant has an installed annual

capacity of 240,000 engines and was commissioned
in 2008.
Spread over an area of 20,300 m2, the `K' family
engine facility is part of the Rs 9,000 crore
investment plan drawn by Maruti Suzuki and Suzuki
Motor Corporation.
The next generation `K'engine like all Maruti Suzuki
earlier technologies is highly fuel efficient, while
offering the best in refinement and performance.

It will take the engine technology to the next level in

India. A-Star is the first car to be powered by `K'
family engine. The forthcoming models will be
powered by other `K' family engines.

The in-line plant layout consisting of Casting, Machining and Assembly processes has high
level of automation, effective material handling.
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The Manesar Facility

Our Manesar facility has been made to suit Suzuki

Motor Corporation (SMC) and Maruti Suzuki India
Limited's (MSIL) global ambitions. The plant was
inaugurated in February 2007. At present the plant
rolls out World Strategic Models Swift , A-star &
SX4 and DZire.The plant has several in-built systems
and mechanism.
There is a high degree of automation and robotic
control in the press shop, weld shop and paint shop to
carry on manufacturing work with acute precision
and high quality.
The plant is designed to be flexible: diverse car
models can be made here conveniently owing to
automatic tool changers, centralized weld control
system and numerical

control machines that ensure high quality.

The plant at Manesar is the company's fourth car assembly plant and started with an initial
capacity of 100,000 cars per year. This will be scaled up to 300,000 cars per year by
October 2008.

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 Diesel Engine Plant- Suzuki Powertrain India Limited

Suzuki Powertrain India Limited the diesel

engine plant at Manesar is SMC's & Maruti's first and perhaps the only plant designed to
produce world class diesel engine and transmissions for cars.
The plant is under a joint venture company, called Suzuki Powertrain India Limited (SPIL)
in which SMC holds 70 per cent equity the rest is held by MSIL.

This facility has an initial capacity to manufacture 100,000 diesel engines a year. This will
be scaled up to 300,000 engines/annum by 2010.

Company Flash back

MarutiUdyog Limited (MUL), established in 1981, had a prime objective to meet the
growing demand of a personal mode of transport, which is caused due to lack of efficient
public transport system.

The incorporation of the company was through an Act of Parliament. Suzuki Motor Company
of Japan was chosen from seven other prospective partners worldwide.

Suzuki was due not only to its undisputed leadership in small cars but also to commitments to
actively bring to MUL contemporary technology and Japanese management practices ( that
had catapulted Japan over USA to the status of the top auto manufacturing country in the
world).

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A licence and a Joint Venture agreement was signed between Government of India and
Suzuki Motor Company (now Suzuki Corporation of Japan) in Oct 1982.

The objectives of MUL, then are as cited below:

Modernization of the Indian Automobile Industry

 Production of fuel-efficient vehicles to conserve scarce resources.

 Production of large number of motor vehicles which was necessary for

economic growth.

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 The objectives of Maruti Suzuki India Ltd which are given in their Memorandum
of Association are :

1. To acquire and take over from GoI the right, title, and interest in relation to the undertakings of
Maruti Ltd. As provided for in the appropriate enactment of GoI together with the liabilities of GoI so
far as they are related to the Undertakings of the Company.

2. To carry on the business of manufacturers of, and dealers in, automobiles, motorcars, lorries, buses,
vans,motorcycles, cycle-cars, motor, scooters, carriages, amphibious vehicles, and vehicles suitable for
propulsion on land, sea, or in the air or in any combination thereof and vehicles of all descriptions (all
hereinafter comprised in the term “motor and other things”), whether propelled or assisted by means of
petrol, diesel, spirit, steam, gas, electrical, animal, or other power, and of internal combustion and other
engines, chassis-bodies and other components, parts and accessories and all machinery,implements,
utensils, appliances, apparatus, lubricants, cements, solutions enamels and all things capable of being
used for, in, or in connection with manufacture, maintenance, and working of motors and other things
or in the construction of any track or surface adapted for the use thereof.

3. To carry on the business of garage keepers and suppliers of and dealers in petrol, electricity and other
motive power for motors and other things.

Maruti Suzuki sales in June 2009

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Maruti Suzuki sales in June 2009

New Delhi, July 01, 2009

Car market leader Maruti Suzuki India Limited sold a total of 75,109 vehicles in June 2009. This includes
13,336 units for export. This is the highest ever monthly export volume in the company's history.
The company had sold a total of 61,247 vehicles in June 2008.
Maruti Suzuki's volume in the domestic A2 segment grew by 22.2 per cent while in the A3 segment the
sales volume grew by 5 per cent during the month as compared to sales in June 2008.

The sales figures for June 2009 are given below:

In June Till June

April'08 –
Segment Models % 2009- %
2009 2008 2008-09 March'09
Change 10 Change
A1 M800 2438 5361 -54.5% 7119 16649 -57.2% 49383
C Omni, Versa 6890 6964 -1.1% 22233 20761 7.1% 77948
Alto, Wagon-R,
A2 Zen, Swift, 46156 37767 22.2% 146733 125427 17.0% 511396
A-star, Ritz
A3 SX4, D'zire 6099 5807 5.0% 19947 15940 25.1% 75928
Total Passenger Cars 61583 55899 10.2% 196032 178777 9.7% 714655
Gypsy, Grand
MUV 190 512 -62.9% 1383 1316 5.1% 7489
Vitara
Domestic 61773 56411 9.5% 197415 180093 9.6% 722144
Export 13336 4836 175.8% 29314 12491 134.7% 70023
Total Sales 75109 61247 22.6% 226729 192584 17.7% 792167

* A-star launched in November 2008, Ritz launched in May 2009.

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Corporate Governance in Maruti-:

In India, 'Corporate Governance' standards for listed companies are stipulated by Securities
and Exchange Board of India ( SEBI) through a special provision- Clause 49 of the Listing
Agreement.
As a conscious and vigilant organization, Maruti Suzuki had initiated good 'Corporate
Governance' practices even before Clause 49 became applicable and these practices form an
integral part of the company’s governance culture. The Company strives to foster a corporate
culture in which high standards of ethical behavior, individual accountability and transparent
disclosure are ingrained in all its business dealings and shared by its Board of Directors,
Management and Employees.
The Company has established systems & procedures to ensure that its Board of Directors is
well-informed and well-equipped to fulfill its overall responsibilities and to provide the
management strategic direction it needs to create long-term shareholder value.
On its Board, the Company has four non-Executive- Independent Directors of high stature
from varied backgrounds, who bring with them rich experience and high ethical standards.
In recent years, the Company has evolved a Control Self Assessment mechanism to evaluate
the effectiveness of internal controls over financial reporting.
Key internal controls over financial reporting were identified and put to self assessment by
control owners in the form of Self Assessment Questionnaires through a web based online
tool called "Control Managers" .
With the successful implementation of the online Controls Self Assessment framework, the
Company has become one of the few companies in India to have a transparent framework for
evaluating the effectiveness of internal controls over financial reporting. The initiative further
reinforces the commitment of the Company to adopt best corporate governance practices.

1.5 OBJECTIVES

Evolution of the Indian Passenger Car industry:

During 1960s and the 1970s there were only two manufacturers in the market, Hindustan
Motors and Premier Automobiles with limited production capacities. The import of passenger

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cars was restricted to the State Trading Corporation (STC) and foreign diplomats. During that
period the passenger car industry in India grew at a nominal CAGR of approximately 3.6%.
The rate of customs duty levied on cars was 225%.

The Revolution

Maruti created history by going into production in a record 13 months. On 14

December1983, the then Prime Minister of India, Mrs. Indira Gandhi, handed over
the keys of the first car to Mr. Harpal Singh of Delhi.

Volume targets were routinely exceeded, and in March 1994, it became the first Indian
company to produce over one million vehicles, a landmark yet to be achieved by any other
car company in India.Maruti is the highest volume car manufacturer in Asia, outside Japan
and Korea, having produced over 3.5 million vehicles by December 2001.

Maruti is one of the most successful automobile joint ventures, and has made profits every
year since inception till 2000-01. In 2000-01, although we generated operating profits on an
income of Rs 92.5 billion, high depreciation on new model launches resulted in a book loss.
We are again on track for profits in 2001-02, with a profit of Rs 300 million in the first half.
In this period, sales were increased by 5.3%, against an industrv decline of 6.1 %.

We revolutionized the wav Indians looked at cars.

"No other car company so completely dominates its home market" - (The Economist).
Despite there being 11 companies now in the passenger car market, Maruti holds about 60 %
of the total market share. MUL is also the first and only car company in the world to lead its
home market in terms of both market share and in the JD Power Customer Satisfaction study
(JD Power Asia Pacific 2000 India Customer Satisfaction studies)

Transfer of Technology

Every minute two vehicles roll out of the Maruti Plant. It is therefore imperative that the
transfer of contemporary technology from our partner Suzuki is a smooth process. Great
stress is laid on training and motivating the people who maintain the equipment, since the

30 | P a g e
best equipment alone cannot guarantee high quality and productivity. From the beginning it
was a conscious decision to send people to Suzuki Motor Corporation for on-the-job training
for line technicians, supervisors and engineers. This helps them to imbibe the culture in a
way that merely transferring technology through documents can never replicate. At present
20 % of our workforce is trained under this program.

Background:

Maruti Udyog Limited (MUL) was established in February 1981 through an Act of
Parliament, to meet the growing demand of personal mode of transport caused by lack of
public transport system. Maruti is India's largest automobile company, a joint venture with
Suzuki of Japan. Company’s goal was to provide fuel efficient, low-cost vehicles, which
were reliable and of high quality and other to offer customers a friendly sales and after sales
service. MUL throughout the years have offered contemporary Japanese Technology, suitably
adapted to Indian conditions and Indian car users. It also provided users with a range of cars
to suit different needs. The company is a leader in the mini and the compact segment and is
positioned third in the Mid size segment in spite of the intense competition. The Company
offers variety of services enabling them to act as a one-stop shop for its customers. These
services include finance, insurance, true value for pre-owned cars and corporate lease & fleet
management.

Maruti Suzuki is one of India's leading automobile manufacturers and the market leader in
the car segment, both in terms of volume of vehicles sold and revenue earned. Until recently,
18.28% of the company was owned by the Indian government, and 54.2% by Suzuki of
Japan. The Indian government held an initial public offering of 25% of the company in June
2003. As of May 10, 2007, Govt. of India sold its complete share to Indian financial
institutions. With this, Govt. of India no longer has stake in Maruti Udyog.

Maruti Udyog Limited (MUL) was established in February 1981, though the actual
production commenced in 1983. Through 2004, Maruti has produced over 5 Million vehicles.
Marutis are sold in India and various several other countries, depending upon export orders.
Cars similar to Marutis (but not manufactured by Maruti Udyog) are sold by Suzuki in
Pakistan and other South Asian countries. The company annually exports more than 30,000

31 | P a g e
cars and has an extremely large domestic market in India selling over 500,000 cars annually.
Maruti 800, till 2004, was the India's largest selling compact car ever since it was launched in
1983. More than a million units of this car have been sold worldwide so far. Currently,
Maruti Alto and Maruti WagonR are tops the sales charts.

Due to the large number of Maruti 800s sold in the Indian market, the term "Maruti" is
commonly used to refer to this compact car model. Till recently the term "Maruti", in popular
Indian culture, was associated to the Maruti 800 model. Maruti Suzuki India Limited, a
subsidiary of Suzuki Motor Corporation of Japan, has been the leader of the Indian car
market for over two decades.

It’s manufacturing facilities are located at two facilities Gurgaon and Manesar south of New
Delhi. Maruti’s Gurgaon facility has an installed capacity of 350,000 units per annum. The
Manesar facilities, launched in February 2007 comprise a vehicle assembly plant with a
capacity of 100,000 units per year and a Diesel Engine plant with an annual capacity of
100,000 engines and transmissions. Manesar and Gurgaon facilities have a combined
capability to produce over 700,000 units annually more than half the cars sold in India are
Maruti cars. The company is a subsidiary of Suzuki Motor Corporation, Japan, which owns
54.2 per cent of Maruti. The rest is owned by the public and financial institutions. It is listed
on the Bombay Stock Exchange and National Stock Exchange in India.

During 2007-08, Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. In all,
over six million Maruti cars are on Indian roads since the first car was rolled out on
December 14, 1983.

Maruti Suzuki offers 10 models, 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.

Suzuki Motor Corporation, the parent company, is a global leader in mini and compact cars
for three decades. Suzuki’s technical superiority lies in its ability to pack power and
performance into a compact, lightweight engine that is clean and fuel efficient.

Maruti is clearly an “employer of choice” for automotive engineers and young managers
from across the country. Nearly 75,000 people are employed directly by Maruti and its
partners.

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The company vouches for customer satisfaction. For its sincere efforts it has been rated (by
customers)first in customer satisfaction among all car makers in India for seven years in a
row in annual survey by J D Power Asia Pacific.

Maruti Suzuki was born as a government company, with Suzuki as a minor partner, to make a
people’s car for middle class India. Over the years, the product range has widened, ownership
has changed hands and the customer has evolved. What remains unchanged, then and now, is
Maruti’s mission to motorise India.

Company Profile Of RKBK Automobiles Pvt. Ltd.

Radhakrishna Bimalkumar ltd was established in 1976 having registered office at Shree
Ganesh Centre , 216 AJC Bose Road , Kolkata 700017, with objective of doing trading
Business of fertilizer, kerosene oil, petrol pumps in different states like U.P, Bihar, West
Bengal. In 1995 company entered into dealership association with Maruti Suzuki India Ltd.
( formally known as Maruti Udyog Ltd) and in 2000 Radhakrishna Bimalkumar Ltd. Was
merged in BKP Ltd. And name of the company was changed as RKBK Ltd. Vide order of

33 | P a g e
honable High Court Calcutta, In Nov 2000 Company demerged from RKBK Ltd. And new
company was set up as RKBK Automobiles Pvt. Ltd.
First showroom and workshop was opened in Gorakhpur,entered into a dealership with
MUL, is one of the leading automobile manufacturers and the market leader in the car
segment, both in terms of vehicles sold and revenue earned. Company grew up and new
showroom & workshop opened at Faizabad another new workshop was set up at Gorakhpur
(Burgadwa), new extension showrooms are in pipeline at Gonda as well as in Basti both are
the district of U.P. Presently showrooms & workshops are established at:

SHOWROOMS :-

 Gorakhpur (Mohaddipur) : Established in OCT 1995

 Faizabad (Shadatganj) : Established in 1999

Workshops:-

 Gorakhpur (Mohaddipur) : Established in 1995

 Gorakhpur (Bargadwa) : Established in 2006

 Faizabad : Established in 1999

 Basti : Established in 2004

Maruti Suzuki India Limited Gurgaon

Unit Profile

Maruti Udyog Ltd. (Maruti) was established as a Government Company in February 1981,
with the objective of modernization of Indian automobile industry and production of fuel-
efficient vehicles in large numbers, necessary for economic growth. Since then the

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Government of India in phased manner have offered its equity to SMC, Public and FIs. The
new equity holding is : SMC 54.2%, Public & Financial Institutions 27.5%, Government of
India 18.3%.

Maruti, a socially conscious and a responsible corporate citizen, is the market leader in the
domestic car market since Dec 1983. The passenger cars made in India are also exported to
over 100 countries around the world. Maruti has revolutionized the Indian automobile and
component industry, and has set standards in quality of products and services.

The existing capacity of Maruti is 6,00,000 units per year and the company employs nearly
3500 employees. Maruti produced its first vehicle in December 1983, and in a short span of
22 years produced more than 5 million vehicles. The turnover of Maruti Udyog Limited is
around Rs 11000 Crore.

The company has a portfolio of 11 products, including the Maruti 800, Omni, premium small
car Zen, international brands Swift, Alto and Wagon-R, off-roader Gypsy, the mid sized
Esteem, luxury car Baleno, Estate Altura and India's first MPV, Versa. Maruti became the
first passenger Car Company in India to obtain ISO-14001 certification, in November
1999.

The Maruti family comprises of:

 A network of vendors for the bought out parts and consumables

 A Sales & Service network comprising dealers, sales outlets, MASS (Maruti
Authorized Service Stations) is spread all over the country.

 A Transport network, for transporting finished vehicle to dealerships.

The company is also into related service areas including pre-owned cars, lease and fleet
management for corporate, Auto finance and Auto insurance businesses.

Energy Consumption

There has been continuous reduction in Electrical and Thermal Energy Consumption per
vehicle because of implementation of various energy conservation measures.

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Energy Conservation Commitment, Policy & Set up

Maruti Udyog Limited has full commitment for energy conservation. Every employee of
MUL understands the importance of energy conservation and works towards it through
suggestion scheme. Further exclusive budgetary provision is made for projects relating to
energy conservation.

The top management does monthly review of energy consumption and various issues related
to energy conservation are discussed in this meeting.

Energy Management Policy

 Set targets for energy saving and resource conservation

 Set well laid down procedures for various functional areas for resource conservation

 Create awareness amongst employees and encourage them to give suggestions. Use
QC meetings for this purpose

 Continuously monitor and give feedback on energy consumption trend

 Use of non-conventional / natural sources of energy

Manufacturing Facility and Process:

Our manufacturing facility comprises three integrated plants with flexible assembly lines
located at Gurgaon in the northern state of Haryana. The first plant was set up in fiscal 1984
with an initial installed capacity to produce 20,000 vehicles per annum, which was
augmented to 130,000 by fiscal 1991. Installed capacity was further increased with the
second plant becoming operational in fiscal 1995 to 200,000 vehicles per year.

In fiscal 1996, with capacity increases in each plant, installed capacity increased to 250,000.
With the third plant becoming operational in March 1999, installed capacity increased to
350,000 vehicles per year, which is the highest among passenger car manufacturers in India
and among the passenger car manufacturing facilities of Suzuki’s subsidiaries outside Japan.

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Our facility has advanced engineering capability and is upgraded on an ongoing basis to
improve productivity and quality. We have 17 manufacturing shops and are capable of
producing more than 50 variants of the nine basic models manufactured, with different
specifications, within the same day. This is possible due to our information technology-
enabled vehicle build sequence system and vehicle tracking system. Under the vehicle build
sequence system, at the production planning stage, requirements are communicated via our
intranet (internally) and our extranet (to vendors) in advance as to the time and place for
delivery of components and other production inputs in order to fulfill production targets. Our
vehicle tracking system monitors and records the implementation of the planning during
production.

Utilities:

We do not rely on outside sources of power as we have a 60-megawatt gas turbine captive
power plant, which has multi-fuel capability. We also have our own reverse osmosis water
treatment plant and effluent and sewage treatment plant. In 1999, we received the ISO14001
certification in respect of our environment management systems.

Our Manufacturing Paradigm:

We adopt a target control and PDCA approach as the underlying theme of all our processes.
PDCA constitutes:
Planning by setting a target and time-line, dividing into action plan with value to each
factor/element;

Doing the standardized operation as decided;

Checking through gap analysis to check whether the operation is really giving the desired
results;

Acting to freeze if effective or correct.

Productivity

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Improving productivity is an ongoing effort in Maruti, through the Maruti production system,
or MPS, which is derived from the Suzuki production system, and focuses on elimination of
wasteful activities taking place during manufacturing processes. In addition to MPS
activities, in-house automation, increasing utilization of production lines, outsourcing of low
value-addition jobs and reduction in materials handling have contributed to improvements in
the productivity of our employees and the efficiency of our operations.

Our employee productivity, measured as the ratio of production volume in a fiscal year to the
number of our permanent employees at the end of the fiscal year,increased by approximately
79% from fiscal 1995 to fiscal 2002. In September and October 2001, 1,050 permanent
employees participated in our voluntary retirement scheme, which reduced the size of our
workforce significantly without having a material impact on productionvolume.

Conservation of energy

We follow the three principles of “Reduce, Reuse and Recycle” for conserving
energy.Between fiscal 1997 and fiscal 2003, we have reduced the consumption of electricity
measured as the ratio of kilowatt hours of power consumed to the number of vehicles
produced, by approximately 29%. This was achieved by using energy-saving lights and
natural light, and also the efficient usage of other electrical appliances, thus reducing
wastage. In the same period, we reduced the consumption of water, measured as the ratio of
the volume of water consumed to the number of vehicles manufactured, by approximately
66%. This is achieved through the recycling of waste water in our water treatment plant and
effluent and sewage treatment plant.

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Quality

We produce high quality products, some of which we also export to various countries
including the Netherlands, Italy, Germany, the United Kingdom and Switzerland. We were
certified to ISO systems in the year 1995. ISO set in place a renewed and revised quality
management system standard in the year 2000.

The new ISO 9001:2000 standards are based on the eight quality management principles of
customer focus, leadership, involvement of people, process approach, system approach to
management, continual improvement, factual approach to decision making and mutually
beneficial supplier relationships. The standard encourages the use of the PDCA approach
extensively and requires continuous improvement. We were certified with ISO 9001:2000 in
2001 and aim to achieve the TS-16949 certification. In addition, we have made the following
improvements in terms of producing defect-free products:

1. DFC OK: Our Direct Final Check OK, or DFC OK percentage, which signifies the
percentage of vehicles that pass through the inspection stages as defect-free, improved
from approximately 77% in March 2002 to approximately 87% in March 2003.

2. Reduction in rejection: Our in-process rejection cost per vehicle, computed as the
ratio of:

(a)- the cost of components rejected due to defects arising during our production
process, to

(b)- the number of vehicles sold, declined by approximately 55% from fiscal 2002 to
fiscal 2003

3. In house warranty: Our in-house warranty costs per vehicle, computed as the
ratio of

(a)-the aggregate cost of components incurred by us to service warranty claims arising

from operational defects in our manufacturing lines, to

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 (b)- the numbers of vehicles sold in the fiscal year, declined by approximately 77%
between fiscal 2002 and fiscal 2003.

Suzuki Quality Management System

Based on a method adopted by Suzuki at its manufacturing facilities, the quality of a vehicle
dispatched from our facility is measured through a quality index audit on a daily basis. The
quality index is a relative measure of quality based on evaluation of vehicles selected at
random on a daily basis. In addition, we have recently adopted Suzuki’s global customer
audit index, in order to provide a more customer-oriented focus to our entire organization,
and channel resources towards customer complaints for rapid response.

Quality improvement initiatives

We have recently introduced for quality control:-

# Tracking surveys and direct customer contact in order to better understand customer
satisfaction levels and customers’ problems;

# Full-time task forces for improvement in initial quality study problems and departmental
cross-functional teams to work on defined problems with challenging targets;

# Quality gates at various stages in order to raise alarms for correction and immediate action
on defects;

# Fool-proofings, or Pokayoke in Japanese, which comprises checks conducted in order to

prevent defects arising from human error during the manufacturing process;

# A real-time feedback system, cross-linked with overall targets; and

# The “Pica Pica” system, which aligns the sequence of components and vehicles in order to
prevent incorrect fitting of components.

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Kaizen in Maruti Suzuki

We have adopted the Japanese management concept of Kaizen, or continuous improvement.

Our Kaizen activities have resulted in the improvement of our in-house capabilities. For
example, we manufactured 25 multi-axis robots and 16 multi-spot welders. Group
discussions among employees in different departments are conducted on a monthly basis in
order to discuss and resolve problems relating to their areas of operation, an activity we refer
to as quality circle activity. Based on our belief that individuals contribute to improvement in
growth, we have a suggestion scheme in which we promote participation of all employees at
all levels. The average number of suggestions made per employee has improved by
approximately 24% in fiscal 2003, when we received more than 72,000 suggestions, as
compared to fiscal 2002. Some of the other improvements as a result of the Kaizen process
have been increased automation through our automated material transport system. We have
also won numerous awards including the "Excellence in Suggestion Scheme" award
instituted by the Indian National Saving Scheme Association regularly for each of the last
four years and 15 trophies in quality circle competitions organized by the Confederation of
Indian Industries.

Manufacturing Process

The production of a car at our facility occurs in the following stages:

Press Shop: Our press shop has five transfer presses and two blanking lines. In the press
shop,steel coils are cut to the required size and panels are prepared by pressing them between
various die sets such as doors, roofs and bonnet. An anti-rust coat is applied at this stage. We
also have in-house capability and the necessary technical knowledge for the design and
manufacture of medium-size press dies.

Weld Shop: We have three welding shops with 122 six-axis robots and 25 in-house
manufactured two-to-four axis robots. In this shop, various press metal components
manufactured in the previous stage are spot-welded together to form the body shell. Various
parts such as the floor panel, side panel, doors and bonnet are sub-assembled in this shop.

41 | P a g e
Subsequently, the assembled parts undergo final welding. The welded body is sent to the
paint shop through a conveyor.

Paint Shop: We have three paint shops, within one of which the final outer body is fully
painted by robots. In the paint shop, the body undergoes various pre-treatment and electro
deposition painting processes to provide a high corrosion resistance to the body. The car body
is given an intermediate or primer coat before applying the stoving topcoat paint. The
intermediate and the final coat are applied by using automatic electrostatic spray-painting
machines (micro bells) and robots, followed by a baking process.

Assembly Shop: We have highly flexible assembly lines, which can simultaneously
handle a large number of variants as well as adapt to sequence changes. The painted bodies
proceed for final assembly in three stages. The first stage is the trim line wherein various
components such as roof head lining, windshield glass and interior trim components are
fitted. Thereafter, the car is transferred to an overhead conveyor, the chassis line, wherein
components such as the engine, gearbox and front and rear axles are assembled on the
underbody. The vehicle is then lowered to the final line on its own wheels and here
components and parts such as seats, the steering wheel and the battery are fitted. The
completely assembled vehicle finally rolls out of the assembly lines to the final inspection
stages.

Machine and engine shops: We assemble and test engines in our engine shops and carry
out precision machining of engine components in our machine shops.

Licence agreements with Suzuki

Suzuki has several license agreements with us under which it has, since our inception:

• provided us with technical know-how, assistance and information for the manufacture, sale
and after-sales service of our products and parts;

• supplied components for our passenger cars;

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• deputed technical personnel to our facility;

• helped us develop manufacturing processes and integrate certain Japanese management

practices such as kaizen, which is Japanese for continuous improvement, in our plants;

• trained our personnel; and

• helped us develop and manage the supply chain for our products.

We have agreed with Suzuki that amongst other things:

• We will not manufacture in, or export products covered by agreements with Suzuki to, any
territory except those permitted by Suzuki;

• We will not enter into agreements with any other manufacturer to sell any product or part
that competes with any product or part covered by our license agreements with Suzuki.

• We will not otherwise sell, distribute or promote the sale of any product that competes with
products covered by our license agreements with Suzuki.

Suzuki will not be liable to us for damages arising from our use of the licensed information
and disclaims responsibility for all representations and warranties made by us with respect to
the licensed products.

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 ANCIALLARY BUSINESS OF MARUTI SUZUKI

The Ancillary business of Maruti company is to provide after sales service related to the
vehicles which are manufactured by Maruti Company.

(i)-Sales of automobiles

The largest selling car from Maruti's stable, Maruti 800

In the order they were launched:

 Maruti 800: Launched 1983. Largest selling car in India, until 2004. The Duo model
launched in 2008.

 Maruti Omni: Launched 1984.

 Maruti Gypsy: Launched 1985.

 Maruti 1000: Launched 1990

 Maruti Zen: Launched 1993 with a facelift in 2003.Production ended in 2006.

 Maruti Esteem:Launched 1994. Production ended in 2007.

 Maruti Wagon-R:Launched 1999 Modified 2006 with Duo Model. Currently largest
selling car in its class.

 Maruti Baleno:Launched 1999. Production ended late 2006/early 2007.

 Maruti Alto:Launched 2000. Currently the largest selling car in India

 Maruti Grand Vitara:Launched 2003.

 Maruti Versa: Launched 2004

 Maruti Swift: Launched 2005

 Maruti Zen Estilo Launched in 2006

 Maruti Swift Diesel Launched in 2007

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  Maruti Suzuki SX4 Launched in May 2007

 Maruti Grand Vitara Sports Utility Vehicle Launched in July 2007

 Maruti Swift Dzire: Launched in 2008

 Maruti A-Star: Launched in 2008

 Maruti Ritz: Launched in 2009

(ii)-Authorized Service Stations

Maruti is one of the companies in India which has unparalleled service network. To ensure
the vehicles sold by them are serviced properly Maruti had 1545 listed Authorized service
stations and 30 Express Service Stations on 30 highways across India.

Service is a major revenue generator of the company. Most of the service stations are
managed on franchise basis, where Maruti trains the local staff. Other automobile companies
have not been able to match this benchmark set by Maruti. The Express Service stations help
many stranded vehicles on the highways by sending across their repair man to the vehicle.

(iii)-Maruti Insurance

Launched in 2002 Maruti provides vehicle insurance to its customers with the help of the
National Insurance Company, Bajaj Allianz, New India Assurance and Royal Sundaram.
The service was set up the company with the inception of two subsidiaries Maruti Insurance
Distributors Services Pvt. Ltd and Maruti Insurance Brokers Pvt. Limited. This service
started as a benefit or value addition to customers and was able to ramp up easily. By
December 2005 they were able to sell more than two million insurance policies since its
inception.

(iv)-Maruti Finance

To promote its bottom line growth, Maruti launched Maruti Finance in January 2002. Prior to
the start of this service Maruti had started two joint ventures Citicorp Maruti and Maruti
Countrywide with Citi Group and GE Countrywide respectively to assist its client in securing

45 | P a g e
loan. Maruti tied up with ABN Amro Bank, HDFC Bank, ICICI Limited, Kotak Mahindra,
Standard Chartered Bank, and Sundaram to start this venture including its strategic partners
in car finance. Again the company entered into a strategic partnership with SBI in March
2003 Since March 2003, Maruti has sold over 12,000 vehicles through SBI-Maruti Finance.
SBI-Maruti Finance is currently available in 166 cities across India.

"Maruti Finance marks the coming together of the biggest players in the car finance business.
They are the benchmarks in quality and efficiency. Combined with Maruti volumes and
networked dealerships, this will enable Maruti Finance to offer superior service and
competitive rates in the marketplace".

- Mr. Jagdish Khattar, The Former Managing director of Maruti

Udyog Limited announced the launch of Maruti Finance on January 7, 2002.

Citicorp Maruti Finance Limited is a joint venture between Citicorp Finance India
and Maruti Udyog Limited its primary business stated by the company is "hire-purchase
financing of Maruti vehicles". Citi Finance India Limited is a wholly owned subsidiary of
Citibank Overseas Investment Corporation, Delaware, which in turn is a 100% wholly owned
subsidiary of Citibank N.A. Citi Finance India Limited holds 74% of the stake and Maruti
Udyog holds the remaining 26%. GE Capital, HDFC and Maruti Udyog Limited came
together in 1995 to form Maruti Countrywide. Maruti claims that its finance program offers
most competitive interest rates to its customers, which are lower by 0.25% to 0.5% from the
market rates.

(v)-Maruti True Value

Maruti True Value is a service offered by Maruti Udyog to its customers. It is a market place
for used Maruti Vehicles. One can buy, sell or exchange used Maruti vehicles with the help of
this service in India.

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(vi)-N2N Fleet Management

N2N is the short form of End to End Fleet Management and provides lease and fleet
management solution to corporates. Its impressive list of clients who have signed up of this
service include Gas Authority of India Ltd, DuPont, Reckitt Benckiser, Sona Steering,
Doordarshan, Singer India, National Stock Exchange and Transworld. This fleet management
service include end-to-end solutions across the vehicle's life, which includes Leasing,
Maintenance, Convenience services and Remarketing.

(vii)- Maruti Genuine Accessories- MGA

Many of the auto component companies other than Maruti Udyog started to offer components
and accessories that were compatible. This caused a serious threat and loss of revenue to
Maruti. Maruti started a new initiative under the brand name Maruti Genuine Accessories to
offer accessories like alloy wheels, body cover, carpets, door visors, fog lamps, stereo
systems, seat covers and other car care products. These products are sold through dealer
outlets and authorized service stations throughout India.

(viii)- Maruti Driving School

As part of its corporate social responsibility Maruti Udyog launched the Maruti Driving
School in Delhi. Later the services were extended to other cities of India as well. These
schools are modelled on international standards, where learners go through classroom and
practical sessions. Many international practices like road behaviour and attitudes are also
taught in these schools. Before driving actual vehicles participants are trained on simulators.

"We are very concerned about mounting deaths on Indian roads. These can be brought down
if government, industry and the voluntary sector work together in an integrated manner. But
we felt that Maruti should first do something in this regard and hence this initiative of Maruti
Driving Schools."

- Jagdish Khattar, at the launch ceremony of Maruti Driving School, Bangalore.

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(ix)-Exports

Maruti Exports Limited is the subsidiary of Maruti Udyog Limited with its major focus on
exports and it does not operate in the domestic Indian market. The first commercial
consignment of 480 cars were sent to Hungary. By sending a consignment of 571 cars to the
same country Maruti crossed the benchmark of 3,00,000 cars. Since its inception export was
one of the aspects government was keen to encourage. Every political party expected Maruti
to earn foreign currency.

Angola, Benin, Djibouti, Ethiopia, Europe, Kenya, Morocco, Sri Lanka, Uganda, Chile,
Guatemala, Costa Rica and El Salvador are some of the markets served by Maruti Exports .

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 MARKETING POLICIES

Maruti Suzuki India Limited company is the biggest Automobile company in Indian Market
.It has the highest percentage of market share in the automobile market .The Marketing
Policies used by Maruti Company are of different types ,maruti company use different
marketing policies to survive on the position which the company has in the market and also to
increase their profit by using different strategies of marketing among their competitors in the
market.

To know the market policies of Maruti company first we have to classify the car market
which are:

Car Market Classification:

Before going further it is necessary to understand the Indian car market classification and the
segments in which MUL operates.

There are two principal systems of classification in the Indian passenger car industry:

1-Price Based Classification

2-Length Based Classification

1- Price Based Classification:

Price based classification is the widely accepted classification basis in the Indian passenger
car industry. The different price segments used by Maruti were as follows:

1. Segment A – cars priced lower than Rs. 300,000

2. Segment B – cars priced between Rs. 300,000 and Rs. 500,000

3. Segment C – cars priced between Rs. 500,000 and Rs. 1,000,000

4. Segment D – cars priced between Rs. 1,000,000 and Rs. 2,500,000

5. Segment E – cars priced above Rs. 2,500,000

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2-Length Based Classification:

In April 2002, SIAM introduced a new segmentation of cars on the basis of the length of the
cars, in order to establish a uniform industry standard. The new segmentation of passenger
vehicles is as follows:

(a).Passenger cars

• Segment A1 (Mini) – cars having a length up to 3,400mm

• Segment A2 (Compact) – cars having a length of 3,401- 4,000mm

• Segment A3 (Mid-size) – cars having a length of 4,001- 4,500mm

• Segment A4 (Executive)– cars having a length of 4,501- 4,700mm

• Segment A5 (Premium) – cars having a length of 4,701- 5,000mm

• Segment A6 (Luxury) – cars having a length of more than 5,000mm

(b).Utility vehicles

• Weight upto 3.5 tonnes

a) Seating capacity not exceeding 7 (including driver)

b) Seating capacity between 7 and 9 (including driver)

• Weight up to 5 tonnes

Seating capacity not exceeding 13 (including driver)

• Multi-purpose vehicles (Weight upto 3.5 tonnes).

Dynamics of Automobiles Market in India :

Initially Maruti was operating in the market which was the part of a closed economy but with
the opening of economy market scenario has changed dramatically and is at an interesting
juncture where both challenges and opportunities are immense.

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According to the statistics available, Indian car market is one of Asia's largest and most
competitive markets. Over 1,030,068 passenger cars, multi and sports utility vehicles were
sold during 2003/04 resulting in the market growth of about 32%.

With such immense growth opportunity the Indian automobile market has finally caught the
fancy of big players which are eager to capture the India automobile market at any cost. And
as such Maruti is having a tough competition from the new players, including Hyundai, GM
and Honda of Japan. In the last quarter of 1998 these new entrants in the market had launched
an unprecedented assault on the B segment of the market.

• Daewoo launched the Matiz

• Hyundai launched the Santro. Santro Xing specially created a fresh excitement in the B
segment.

• Telco launched the Indica.

• Around the same time, Fiat slashed the prices of its Uno and launched a Diesel
variant.Hyundai launched its Getz.

• Recently Hyundai launched its i10 & i20.

• Recently General Motors launched Spark, Aveo and U-Va.

• Fiat has reworked the engine of the Palio as palio Style and recently launched another
vehicle Punto.

• Scoda launched its Fabia.

•Honda launched its Jazz.

• After almost 25 years, the 800 is on its last legs. This is particularly important as Tata
Motors is serious about their Nano car of Rs 1 lakh.

• Over the years, MUL's brand value had begun to erode. It is seen as a small-car maker only.

• Maruti was having nothing to offer to the booming market for people carriers in India –

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Scorpio , Innova, Safari etc. For this segment Maruti launched Versa. Launched as a higher
end alternative to the Omni, it was expected to click. But the Versa bombed. Launched with
sales expectations of a 1,000 units every month, it did about 100.

• The other launch, the Baleno, went up against the Hondas and the Mitsubishis, and lost
money from Day One.

• It seems that even consumer are having problem equating Maruti with premium.

• Since MUL had exhausted all of Suzuki's high-end products, it is finding itself unable to
cope with the frequent upgrades and relaunches.

Even when the government's stake in Maruti has come down, the interference will not
decrease as seen with other institutions like VSNL and MTNL. Considering Hyundai's
emerging status in the Indian market and the lack of government involvement, it could turn
out to be a better pick than Maruti. Maruti Suzuki is also having great difficulty in keeping its
profit growing as A segment, in which Maruti Suzuki is the only player has margins as low as
1-2% (Rs 2,000 to Rs 4,000 per car).

As a result in recent years Maruti Suzuki has been consistently been losing out to other
players like Hyundai and Telco in the compact car segment and has been reduced to the
marginal player in all segments above B.

Talking in terms of absolute figures Maruti Suzuki's share declined from 61.2% in 1999 to
54.6% in 2003 and finally to 51% in 2005. Its volumes have dropped from 3.53 lakh to 3.30
lakh even as total industry volumes (carsand utility vehicles) have shown a compounded
annual growth rate of Maruti.

Marketing Policies used by Maruti Company :

Maruti Company uses some theoretical concepts of Marketin Mix which are

Meaning and Definition

Marketing Mix means to collect and mix the resources of marketing in the manner that
objects of the enterprise may be achieved and maximum satisfaction may be provided to the
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consumers. The term marketing mix is used to describe a combination of four elements – the
product, price, physical distribution and promotion. These are popularly known as “Four
P’s”. A brief description of the four elements of marketing mix (Four P’s) is.

 Product : The product itself is the first element. Products most satisfy consumer
needs. the management must, first decide the products to be produced, by knowing
the needs of the consumers.

 Price : The second element to affect the volume of sales is the price. The market or
announced amount of money asked from a buyer is known as basic value placed on a
product.

 Promotion : The product may be known to the consumers. Firms must undertake
promotion work-advertising, publicity, personal selling etc. which are the major
activities.

 Place : Physical distribution is the delivery of products at the rights time and at the
right place. The distribution mix is the combination of decisions relating to marketing
channels, storage facility, inventory control, location transportation warehousing etc.

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RESEARCH METHODOLOGY

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 RESEARCH METHODOLOGY

Before we know about research methodology, we should know about the “Research”,
Research is an authentic activity & as such the term should be used in a technical Sense.
Some people say research is a careful investigation or enquiry specially thought search for
new facts in any branch of knowledge & research methodology is a process or way to
systematically solve the research problem. It may be understood as a science of studying how
research is done.

OBJECTIVE:

 To check the attitude of customers.

 Stimulating Demand

 Building product awareness

RESEARCH DESIGN:

The research design is a framework, which provides guidelines for rest of the research
process. It emphasizes on these points.

 How the data would be collected?

 Which instrument for data collection would be used?

 What sampling plan would be used?

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 METHODS OF DATA COLLECTION:

In research the data are collected in two ways-

1) Primary data

2) Secondary data

(1). PRIMARY DATA : The primary data are those data which are collected a fresh &
for the first time & it always be in original form. We can obtain direct communication with
respondent in one form or another or personal interview.

(2). SECONDARY DATA: The secondary data are those data which are

Collected from existing records that are available in the market . In my project I have
collected the secondary data from various sources like magazines, newspaper, websites &
various manuals & books.

TYPES OF RESEARCH:

Descriptive research has been done by me for collecting the data

DATA SOURCES: I have selected the Questionnaire & Telephonic interview basis data
sources

SAMPLE TECHNIQUE: I have chosen the RANDOM sample

technique for finding the good results.

UNIVERSE: I have been only short period of time so my survey is only in GAZIABAD.

SAMPLE SIZE : I have taken only the 100 number of sample size.

Survey Methodology: Survey was conducted keeping in mind these things.

Target Audience:

The target for survey was mainly based on that sample is HIG & MIG regular user and
the prospect customer’s And the respondents are:-

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Home makers

Service man

Businessman

Old age person

Other

These people were based on:-

(a)Age

Above 25 years.

Sample size: During the survey the sample size of customers was 100 .This all selection
covering prime Places of city.

Preparation of survey:

Questionnaire was prepared to take the response.

(A) Questionnaire for customer

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DATA ANALYSIS AND FINDING
AND INTERPRETATION

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 ANALYSIS AND FINDING

3.1 DataAnalysis

The analysis and interpretation is done by the pie chart. It is given below in the
form of some different charts. The comment is given along with the chart.

Comparison between male and female--

the age group between 25-35 of male and female

Fig.1:- Comparison of male and female of age group 25-35

Interpretation
1.Only 66% male purchase a car

2. more than 34% female purchase a car

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The age group between 25-35 motives to buy a car is

Fig.2:- Motives to purchase car for male and female of age group 25-35

Interpretation

1.34%motive to buy for easy maintenance

2.32%motive to buy a car by price reason

3. the other 29% people buy a car with the reason a brand name,and

4. the remains other 5% people is not interested to buy a car

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Promotional Scheme For 25-35

Fig.3:- Promotional schemes that influences male and female of age group 25-35 to purchase
cars.

Interpretation

1.45% people purchase a car the reason is free accessories

2.29% people purchase a car the reason is cash discount

3.An other 26% people purchase car the reason is easy car loan

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Effect on scheme between 25-35

Fig.4:- Effect of schemes among age group of 25-35

Interpretation

1.92% people is affected by the promotional scheme

2. An other 8% people is not affected by the promotional

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The age group between 35-45 of male and female

Fig.5:- Comparison of male and female (those purchase cars) of age group 35-45

Interpretation

1. Only 93% male purchase a car

2. More than 7% female purchase a car

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The age group between 25-35 motives to buy a car is

Fig.6:- Motives to buy a car for male and female of age group 35-45

Interpretation

1.27%motive to buy for easy maintenance

2. 27%motive to buy a car by price reason

3. The other 46% people buy a car with the reason a brand name

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Promotional scheme for 35-45 age group

Fig.7:- Promotional scheme for male and female of age group 35-45

Interpretation

1.40% people purchase a car the reason is free accessories

2. 20% people purchase a car the reason is cash discount

3. An other 40%people purchase a car the reason is easy car loan

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Effect on scheme between 35-45 age group

Fig.8:- Effects of scheme on age group 35-45

Interpretation

1. 100 % people is affected by promotional scheme

2. An other 0% is not affected by the promotional scheme

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Age group more than 45

Fig.9:- Comparison of male and female (those purchase car) of age more than 45

Interpretation

1.50% male purchases a car

2.50% female purchases a car

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Motivation to Buy for age group more than 45

Fig.10:- Motivation to buy cars for male and female of age more than 45

Interpretation

1.17% buys a car for easy mantenanence

2.83% buy a car for price of car

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Promotional scheme for age group more than 45

Fig.11:- Promotional scheme for male and female of age more than 45

Interpretation

1. 50% prefer promotional scheme for free accessories

2. 33% prefer promotional scheme for easy car loan

3. 17% prefer promotional scheme for cash discount

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Effect on scheme for more than 45

Fig.12:- Effects of scheme on male and female of age more than 45

Interpretation

1. Total 100% prefer for scheme

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3.2 Swot Analysis

Fig.13:- Analysis of car owners of age above 25

Interpretation

1.29% female prefer a car

2. 71% male prefer a car

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Motive to buy for age more than 25

Fig.14:- Motives to buy cars for age more than 25

INTERPRETATION

1. 36% prefer buy a car the motive is price of car

2. 30% prefer buy a car the motive is brand name

3. only 3% people have no motive

4. 31% prefer buy a car the motive is easy maintenance

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Promotional scheme for age more than 25

Fig.15:- Promotional scheme for age group more than 25

Interpretation

1.31% prefer for easy car loan

2.44% prefer for free accessories

3.25% prefer for cash discount

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Effect on scheme more than age 25

Fig.16:- Effect of scheme for age more than 45

Interpretation

1. 95% prefer promotional scheme

2. 5% not prefer promotional scheme

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 FINDINGS

The first & foremost finding that result from the research is that in the age group of 25-
35

 66%male purchase the car & 34% female purchase the car.

 motive to buy 34% for easy maintenance,32% for price reason , & 29% for a brand
name & 5% are not interested

 In promotional schemes 45% people buy for free accessories ,29% for Cash discount
& 26% for easy loan

 Effect on scheme 92% people affected & 8% are not.

The second finding in the age group of 35-45

 93%male purchase & 7% female purchase the car

 Motive to buy 27% for easy maintenance ,27% for price reason& 46% for brand name

 Promotional scheme 40% for free accessories ,20% for cash discount ,40% for easy
car loan

 100% people are affected by scheme

In the age group of more than 45

 50%male purchase the car &50% female purchase the car

 Motive to buy 17% for easy maintenance ,83%for price reason

 In promotional scheme 50% free accessories ,33% for easy car loan,17% for cash
discount

 100% people are affected by scheme

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LIMITATIONS

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 LIMITATION

 As this project involved field surveys therefore this primary method of collection of data
is much more time consuming than the secondary source.

 Many problems were faced while collecting the information from the individuals as the
cooperation on the part of informants was difficult to presume and were missing.

 There are some of the informants that are not literate enough therefore time and energy
required to make them understand each and every question of the questionnaire.

 As the cooperation from the side of respondents was missing therefore information
supplied by the same was not correct enough and difficulty was faced while preparing
the final project.

 Money was another limitation of the project as this project involved cost both while
conducting survey and in the final preparation of the project.

 Time factor was another constraint as this project required time in both information
collecting stage and project preparing stage.

 Some of the respondents were bias enough and they behaved clumsy towards the
questions mentioned in the questionnaire.

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 CONCLUSION

AND

RECOMMENDATIONS

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 CONCLUSION

MARUTI SUZUKI INDIA LTD COMPANY is the biggest Automotive Industry of India. It
has a great goodwill in the Automotive Market. There are many big Automotive companies
are in the Indian Automobile Market and Maruti Suzuki is No.1 in the Indian Automotive
Market.

Maruti Suzuki Automobile Company provide its customers the facility to finance their
vehicles. Company tie-up with banks and financial institutions which provide car loan to the
customers of Maruti at low interest rate and easy documentation process. Maruti Company
see a lots of scope in financing the automobile field. By providing this facility to their
customers Maruti Company is attracting many customers. From providing this financial
facility at every dealer point. By using this facility the customers who are not able to
purchase Maruti Vehicles directly through cash payment, they can purchase cars through the
car loans schemes of banks.

Maruti Suzuki Company has tough competition with other Automobile companies as like as
TATA Motors, Hyundai Motors, General Motors, Toyota Motors, Ford Motors, etc.

I found during my study at Maruti Dealer’s shop that in financing sector a person should have
great communication skill because we need a great communication power to communicate
with customers.

Maruti Company is interested in the field of Auto financing because there are a lots of chance
to increase their profit by selling more vehicles and also to increase their market share in the
Automobile Market. People took interest in buying vehicles through financing. Maruti
company is providing easy car loan facility to their customers through making more tie-up
with banks in different area. It was a great experience to communicate with different people. I
learnt to conveince customers and make them clear about their all queries related to auto
industries.

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 SUGGESTIONS/RECOMMENDATIONS

(i)-Recommendations to the Company

# More oulets of the company should be there because oulets are not available in all cities ,
customers have to go to another cities for the outlets of the cars .

# Prices of car models are different at different Dealers so customers get confused that the
dealers are cheating them so the prices of all the car models at every dealer should be same.

# Difference between the EMI of the financed cars which are created by the finance
consultants as attractive schemes for customers.

# The company employees should maintain good relation with the customers and vehicles
should be delivered on the same day on which it has been told to the customer for delivery.

# The company should more invest on their Advertisements and Selling expenditure .

# Maruti company also given their advertisements in more popular magazines newspapers to
increase their sales .

# Company should provide some special facilities to the customers who are from agriculture
field to increase their sales in that area.

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(ii)-Recommendations for the Customers

# The important suggestion to the customers of Maruti company is that they should always
use

authorised service station for the maintenance of their cars.

# The customers of Maruti cars should contact to their nearest Dealer for any query or for
any problems related to their vehicles.

# An important suggestion for the customers is that if they have enough money to purchase
the car then they should not finance their cars from the banks because banks will take a
bit more amout from them as interest rates of the banks are high.

# The customers of Maruti should purchase the accessories of Maruti cars only from the
authorised dealers of Maruti because if they will use another local accessories in their cars
then the warranty of their Maruti is being expired and the dealer will not provide any
facility to them.

# The customers can easily get solve their problems and need related to the their cars to their

nearst dealer of maruti as the maruti dealers provide one shop stop to their customers
,they

can easily get accessories from there and also Insurance ,Finance, Genuine Accessories,

Extended warranty schemes from there which is given to the customers of Maruti by the

company.

# Maruti company provide Maruti True Value Shop for the customers who want to sale their
used cars and purchase new one and also provide second hand cars to the customers with
new warranty on his old vehicles.

# Maruti True Value Shop also provide finance facility to the customers who want to
purchase used cars through different banks.

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# Maruti company is tie-up with some banks who provide car loan to the customers of
Maruti on easy Interest Rates .

# Maruti customers should take the facility of after sales service of Maruti company which
is given by the company to specially for their customers at a particular time period.

# The customers should ask for Test Drive to the dealer because Maruti company provide
test drive for its every model at every dealer’s shop.

# If the dealer is not giving the facility of Test Drive to the customers than they can
complain on the Complaint Register which is maintained by company at every dealership
to know the problems of their customer related to their vehicles or any problem related to
their staff etc.

(iii)- Recommendations by the Govt. to the Automotive Industry

 Manufacture and sports of small cars, MUVs should be promoted.

 Negative list of items and rules of origin for FTAs/ RTAs to be followed.

 Appropriate traffic policy should be followed to attract the investment.

 Specific measures will be taken for epansiomn of automobile market.

 Emports to be encouraged.

 Policy initiatives for competitiveness and development of technology would be taken.

 National Road Safety Board to act as the coordinating body for promoting safety.

 Inspection and certification system to be strengthen by encouraging public-private

partnership.

 Centers for Automotive manufacturing excellence should be created.

 An –Auto Design centre to be established at NID, Ahemdabad.

 Strive for labour reforms.

 Rationalisation of motor vehicle regulation to be undertaken.

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REFERENCES

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 REFERENCES

BOOKS

1). Kotler, Philip, Marketing Management, Delhi, Pearson Education Pvt. Ltd., 2004

2). Kothari, C.R., Research Methodology, New Delhi, Wishwa Prakashan Pvt. Ltd., 2004

Journals/Magazine :

Outlook, India Today, Business Times,

Search Engine :

Google search engine

Yahoo search engine

Websites :

www.maruti.com

www.marutisuzukiindia.com

www.business-today.com

www.datamonitor.com

www.marutiudyog.com

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QUESTIONARIES

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 QUESTIONNAIRE

Name:-

Age:-

Sex:-

Annual Income:-

Marital Status:-

Q.1: Do you want to buy a car?

1. Yes 2. No

Q.2: Which type of car will you wish to buy?

1. Hatchback 2. Sedan 3. Multi-Purpose Vehicle 4. Sports Utility Vehicle

Q.3: Which brand will you want to purchase?

1. Maruti 2. Hyundai 3. Chevrolet 4. Tata

Q.4: How much price would you like to pay?

1. Up to 2 lacks 2. Rs 2 lacks - 4 lacks 3. Rs 4 lacks – 6lacks 4. Above 6 lacks

Q.5: Which type of color will you prefer?

1. Metallic 2.Non-Metallic

Q.6: Suppose if you want to purchase a car in a range between Rs 2 lacks to Rs 4

lacks in the market and many alternatives are available. What is your best motive/
aim?

1. Price of car 2. Brand Name 3. Easy Maintenance 4. None of these

Q.7: If you purchase a car what will you search?

1. Availability of services 2. Availability of spares 3. Resale value of car

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Q.8: What type of promotional scheme will you prefer?

1. Free Accessories 2. Cash Discount 3. Easy Car Loan 4. Any Other

Q.7: If a company provides a discount on its most successful car. What is your own
thinking?

1. Company is going to shut down that particular product.

2. Company want to attract more customers.

3. Company advertise that product.

Q.10: When you purchase a new vehicle are you satisfied by the explanation of salesman
about the features , advantages and benefits of the vehicle?

1. Yes 2. No

Q.11: When you enter in showroom to purchase a new vehicle then the surround of
showroom is ……………………………..

1. Clean & safe 2. Average clean 3. Dirty 4. Disliked by you.

Q.12: The salesperson provides you knowledge about the vehicle is

1. Better than the expectation 2. Good 3. Average 4. Not Enough

Q.13: At the time of purchasing the new vehicle the salesperson deal you for the time
period

1. Less than 30 min 2. ½ hr-1 hr 3. 1hr-1.30 hrs 4. More than 1.30 hrs

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