RETAIL ASSIGNMENT

AMITY BUSSINESS SCHOOL NOIDA, UTTAR PRADESH

Submitted To:- SUBMITTED BY:

Ms. Pooja Sehgal Tabeck NAME – Shubham Chaudhary
Roll no. – A 32
COURSE - MBA (M&S)
ENROLLMENT NO- A0102218080
Effect of FDI on retailer? (Toyota & Maruti)
- A couple years after signing an MoU to jointly explore opportunities and share technologies, Toyota
Motor Corporation and Suzuki Motor Corporation have announced a collaboration and have figured the
role each manufacturer will play in the partnership. Information about both carmakers sharing cross-
badged models- Maruti Suzuki Vitara Brezza, Maruti Suzuki Baleno and Toyota Corolla were already
known. However, the current collaboration also includes sharing two other models in the Indian and
African market and Toyota taking Suzuki's help to develop a new MPV. The companies will also share
hybrid electric vehicles (HEV) and powertrain technologies along with platforms.

Toyota Kirloskar Motor will produce its version of the Vitara Brezza at its Karnataka plant from
2022.

Market Toyota-Suzuki Partnership

Developing a C-segment MPV in India with Suzuki's expertise and supplying the Toyota
India Corolla executive sedan.

Manufacturing the Toyota badged Vitara Brezza at Toyota Kirloskar Motor's plant in
Karnataka from 2022.

The Toyota-Suzuki collaboration in India will see further developments. Suzuki will help Toyota to
develop a new C-Segment MPV for India. Toyota's executive sedan- Corolla, will be retailed through
Maruti Suzuki dealerships. Vitara Brezza, Maruti's highly popular subcompact SUV, will be manufactured
by Toyota Kirloskar Motor in India come 2022 and will be sold through Toyota dealerships as well.
- Strategies during recession?
(MARUTI STRATEGIES)

PRODUCT STRATEGY

Product is anything that can satisfy human needs and wants. The product is a combination of tangible and
intangible aspects of the products offered by the manufacturer to the customers. It can be defined as a
bundle of satisfactions and dissatisfactions offered by company to the customers at a point of time. The
product strategy of Maruti is that its focus is on catering the needs of almost all the segments. Maruti
Suzuki offers 16 brands consisting of Maruti 800, Maruti Omni, Maruti Alto, Maruti Versa, Maruti
Gypsy, Maruti A Star, Maruti Wagon R, Maruti Zen Estilo, Maruti Swift, Maruti SX4, Maruti Kizashi,
Maruti Eeco, Maruti Ertiga, Maruti Grand Vitara and 150 variants spanning across all segments. Thus
company creates products that are unique and valued and it is attaining advantage either through
differentiation via new features, improved performance, after sales service or through cost leadership.

PRICING STRATEGY

The price is the amount a customer pays for the product. It is fixed after considering various factors such
as market share, competition, material costs, product identity and the customer's perceived value of the
product. The business may increase or decrease the price of product if other stores have the same product.
The price decision is very sensitive and for that special care is to be taken to get the competitive edge.
There are various factors to determine a price of a car, such as market condition, cost incurred to build a
car, profit by company, dealer profit. The company’s pricing strategies are such that every customer can
own a car or upgrade to another one of his or her choice. The company offered a different model at a price
difference of around 10,000. It follows a price-point-strategy wherein they have products available in
almost all possible price points.

DISTRIBUTION STRATEGY

Distribution strategy of a firm is a plan created by the management of a manufacturing business that
specifies how the firm wishes to transfer its products to intermediaries, retailers and end consumers.
Maruti Suzuki has two manufacturing facilities in India. Both manufacturing facilities have a combined
production capacity of 14,50,000 vehicles annually. Maruti has a strong dealer network. In fact it was one
of the very first companies in the country to understand the importance of after sales service in high
involvement products like cars. It has the largest distribution & Service network comprising of over 400
sales showrooms, over 600 dealer workshops, and 1900 Authorized Service Stations spanning across over
1190 cities unparalleled in the country. It has 30 Express Service Stations on 30 National Highways across
1,314 cities in India. Most of the service stations are managed on franchise basis where Maruti trains the
local staff. To increase their reach to rural India, where setting up a complete dealership was very difficult,
they opened extension counters which are operated by some dealer in the city thereby ensuring increased
customer touch points without risking the viability of the dealers.

(TOYOTA STRATEGIES)

The differentiation strategy adopted by Toyota helps it in manufacturing products which are different from
the competitors’ products. The differentiation strategy allows Toyota to price its products according to its
own wish, as its products are different from the competitors’ products. The marketing strategy of Toyota
has been successful in acquiring the market share, as it has been able to provide products according to the
needs of the customers. The marketing objectives of Toyota in UK as well as Saudi Arabia are achieved
due to different marketing strategies adopted in different countries, (Toyota, 2012). On the other hand, it is
also seen that the marketing strategy of Ford to sell same product globally has resulted in failure, as it
incurred losses, (Ford, 2012). This emphasises that the marketing strategy of any company should be set
according to the local market, and one strategy cannot fit all the geographic locations. Thus, it can be said
that the marketing strategy plays a vital role in the success of Toyota, as it adopts different strategies in
different countries of operations. The differentiation strategy adopted by Toyota is helpful in increasing
the sales, and achieving the marketing objectives.

Further Improvement:

The marketing strategy of Toyota can be further improved by entering into different segments. Toyota can
target premium segment customers by manufacturing premium priced cars for the elite group of
customers. The demand for premium cars in UK and in Saudi Arabia is high, and the marketing strategy to
target such a market segment could be highly beneficial. The improved marketing strategy can be helpful
in bringing diversification in the product portfolio, as well as in increasing the customer base of Toyota.
Moreover, the profit margins are also high in case of premium market segment.

The performance of Toyota in the past has been impressive, and in future, it needs to adopt innovative
marketing strategies, so as to be able to attract large number of customers and compete in the highly
competitive market. Moreover, Toyota should make its marketing decisions by focusing solely on the
local market, rather than implementing a global marketing strategy. In order to satisfy local customers, the
marketing strategy should also be devised according to the needs of the customers, (Lowe, Doole, 2008).
The fierce competition in the automobile industry in UK as well as in Saudi Arabia requires that the
marketing strategy adopted is innovative, and it should offer competitive advantage over the competitors.

- Strategies to cope up with changing environment practices i.e

govt. policy for usage of plastic?
- Dry wash systems: In this system the final water wash process has been replaced with vehicle cleaning
using special eco-friendly wash chemicals. The Company uses a special bio-degradable dry chemical
wash that has helped reduce washing time and water consumption by over 216 Million litres per annum.
In 2016-17, nearly 2.28 Million vehicles were cleaned using the dry wash system against 5.7 lakh vehicles
on 2015-16, over three-fold increase. This system has been implemented in 1,130 workshops across the
service network.

- Automated oil management system: The new Automated Oil management system protects against oil
spills, saving both time and effort. It also provides greater control and a method to monitor oil quantity
used, thereby preventing wastage and improving productivity. As of 30th March 2017, 697 workshops
have implemented the oil management System, preventing spillage and improving efficiency.

- Paint-less dent repair system: The new paint-less dent repair system has been introduced in 520
workshops (as of 30th March 2017) for repairing minor dents without stripping the paint. This has led to a
more environment-friendly, faster and cost-effective way of repairing dents.

- Automatic car washing system: The use of the new automated car and underbody washing system
saves up to 20% of total water consumed, claims Maruti Suzuki. As of 30th March 2017, 880 workshops
are equipped with this system.

- Reduction in paper consumption in service operations: The Company seeks to conserve paper with an
aim to go paperless.