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Maruti Suzuki : A Journey so far

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Maruti Suzuki : A Journey so far
Ashwani Dhingra

__________________________________________________________________________

1.Executive Summary:

It’s very interesting to know how a schematic and planned marketing management can create
a right perception about the product the company produces or manufactures. The marketing
strategies embracing the product mix with right blend of pricing, promotion and right place
can create a spell of affinity about the products. Here in this assignment I have detailed out
how a Japanese car manufacturer can change the automobile market in India by truly
motorising the country with efficient, modern and contemporary product which in-turn put
the demand to have better infrastructure in term of roads in India. Inspiring other auto
manufacturers to find India a lucrative market for their products too.

While going through the assignment we will see the implemented and performing 7Ps of
marketing to its full glory. Also with an intention to see Maruti Suzuki making India a hub to
export cars further to other countries even developed ones like Europe and USA.

The SWOT analysis for the same and very relevant PESTEL analysis which is to be practised
when launching any car in any country. It covers the evolving scenario of political, economic,
social, technological, environmental and legal issues or opportunities of that particular
country.

Maruti Suzuki is progressing on its export numbers and facing the challenge of not meeting
the embedded need of serviceability of the cars by having tie-up with other major car
manufacturer having an excellent service stations solving the problem. The very valid
product life cycle analysis too will give you how the marketing along with sales phase out the
product before market fails them.

2. Introduction
Maruti Suzuki India which was Maruti Udhyog Limited (MUL) was a JV between the
Government of India and Suzuki Motors Japan. It was signed in 1981 and first roll was rolled
out in 1983.

Before this car entry, India had just two models of cars – Hindustan Motor’s Ambassador and
Fiat design- Premier Padmini ( see pictures). They were considered to be outdated and not at
all economical but considered to be solid in quality because of more iron content in sheets.
The world was moving in feature led cars and fuel economical cars and India’s political
environment was allowing foreigner manufactures to enter the Indian market. The then
government took this bold decision and signed the JV to allow Suzuki motors to enter with
new company name as Maruti Udhyog limited and set up the factory in south oif Delhi-
Gurgaon being the first plant.

Ambassador

Premier Padmini

People of India welcomed this car which was cheaper than the above two old and traditional
car. The first car was names Maruti 700 and which in a year got upgraded to
800 CC and started ruling the Indian road ( see picture). It was a hatch back car or two box
car. It was an unairconditioned car. There was not even an AC car in India. Maruti becomes
the first one to bring in AC car, Maruti Zen car to India which became the craze in India and
parallelly launched Maruti 1000 cc – the first 3 box car which later became Maruti Esteem
1300cc- The first luxury car of India.
 Maruti 800CC

In year 1996 after seeing the success of Maruti in passenger car segment government allowed
others international players also to enter India and Hyundai motors of south Korea launched
Santro 1000 cc car and there on India saw many many international manufacturers entering
India. But the excellent marketing and R&D efforts of Maruti Suzuki kept them at top.
Competitors did their best by launching cars with better features but strategies across product
mix, pricing, promotion, place, people, process, physical evidence has been keeping MUL at
top for the last 40 years.
India has become the second largest market for Suzuki in the world and till now have sold 17
millions cars in India and seeing the cheaper labour cost in India they setup 3 more plants in
India and have been exporting to rest of the world as well. Last year they exported 1,28,000
cars to Europe, Africa continents & south America. (suzuki, 2019) (MINT, n.d.)

India being highly populated with 1.3 billion people has world largest segment of middle
ages segment and middle income group as well. The cars pricing strategy is well fit for MUL.
After giving the first luxury car Maruti Esteem 1300 cc which become me too car in
comparison of others luxury cars like Cielo from Daewoo and Opel from General Motors,
they could not launch another competitive luxury car in India. The perception which started
from hatch back & affordable car segment for MUL got etched in people mind. They kept
rejecting expensive luxury cars launches from MUL and till today they don’t have any car
competing with likes of MERCEDES, AUDI or SUV likes of FORD or TOYOTA. Hyundai
motors which also launched hatch back with ZEN of MUL also has been fighting with its
own image of affordable cars and could not win market share in SUV or premium luxury
segment of the cars.

The above picture shows the 2018 ending data trend which is visibly depicts the leadership
stature of Maruti Udyog even after 40 years.
 Year 2018 Market share

Currently they have about 75000 employees in India alone and 1,820 sales outlets across
1,471 cities in India. MUL has 3,145 service stations across 1,506 cities throughout India.
Maruti's dealership network is larger than that of Hyundai, Mahindra, Honda, Tata, Toyota
and Ford combined.

Maruti leads in manufacturing CNG (compressed natural gas) engines cars

Service is a major revenue generator of the company. They have more than 15. Models of the
cars in many variants in both petrol and diesel version and soon will be launching its first full
electric car in India too. They also have three types of distribution network as NEXA and
ARENA own by them and Maruti Suzuki networks as private distributors.

Marketing management in Maruti Suzuki

Maruti Suzuki has been an exemplary in the marketing management in India. Others car
manufacturers have been learning from them to know the pulse of the Indian consumers so
well. They keep a close eye on the evolving social status of the people and also the political
and environmental requirements and tailor made the products and matching pricing strategy
accordingly. Exchanging of cars to service station to servicing cost to providing customer
services, they understand very well and have been ruling the Indian roads.

The marketing management of Maruti Suzuki is manage the 7Ps of marketing to the core of
their business. The learning from Japan about the evolving of engines and its efficiency and
adopting the technology by keeping in mind the Indian roads, sentiments and culture values
have been the guiding light for Maruti Suzuki. Whether its choosing media points, geo
locations, satisfaction score or the quality of the cars the marketing management is at the
leading state always.

3.
(1, 2) Marketing process and strategies with its critical evaluation ( 10 + 20 Marks)

Marketing process and strategy for Maruti Suzuki analyses the brand/company which covers
7Ps (Product, Price, Place, Promotion, Process, people and physical evidence) which
thoroughly explains depth of the Maruti Suzuki marketing strategy. Marketing Mix: (91,
2016)

Product:
Maruti Suzuki India has a very expanded product portfolio have cars and is present in always
each categories of cars whether in hatchback, small or mini hatch back, MUV ( Multi utility
vehicle), Mini SUV, Sedan and passenger van and commercial van. The entire product
portfolio of automobiles are a part of the products in the marketing mix of Maruti Suzuki. Its
products are Maruti Alto, Celerio, Wagon R, Maruti Swift, Baleno, Brezza, Eeco, Maruti
Ciaz, Ertiga, Dzire, S Cross, and Ignis. In most categories its cars are segment leaders and
priced competitively. Marketing Mix: (91, 2016)
Maruti Suzuki manufactures 1.7 million cars each year with 18 car models and a total of 155
variants. In January 2018, Maruti Suzuki India had a total market share of 53% in passenger
cars segment
To meet the holistic needs of the consumers Maruti also has services products as Maruti
finance, Maruti Insurance, Maruti True Value (used cars), Maruti Accessories and Maruti
Driving School to promote the growth of its products and brand equity.
Above are the few leading models of the cars dominating the Indian roads. The style,
economy and overall performance has been at the core of its product quality across all the
products and its variants. Marketing Mix: (91, 2016)

Price: Marketing Mix: (91, 2016)

Value for Money (VFM) strategy is key factor for its success even after 40 years of its entry
into India. Years of experience in engineering and R&D in India has been helping Although
they are not known like German cars which means very safe and solid but they are able to cut
down on the costs and price its cars very effectively to meet the competition. The very cost of
ownership, cheaper spares, long service intervals are the driving factors in the pricing
strategy. This edge over others makes Maruti a very famous and popular passenger car
company. The pricing strategy which is dependent upon the competitors, market dynamics
and the segment catered to is very well implemented here in Maruti Suzuki. They have a
model and its variants in every 25000 Indian rupee increments. You can see the below figure
explaining the same which means customers won’t opt for any other car suiting to his pocket.
They also created NEXA and ARENA products to distribute the cars though own network.
Both these products are fully owned by Maruti Suzuki. The cars which are developed in
japan are sold through Nexa and Arena whereas cars developed in India are sold though other
distributors.
 • Lakhs means One hundred thousand in Indian Rupees

Place:
Maruti ‘s showrooms and its service station network is across length and breadth of India and
is spread across 1800+ cities manufactured at Three factories in India. Maruti has set up
another plant in Gujarat for which it has acquired 700 acres of land for its electric car
manufacturing. Maruti has around 1800+ sales outlets in all the cities combined and has a
dealership which is many time more than its nearest competitors - Hyundai, Tata and
Mahindra. The highest point in India also has a Maruti service station.
Servicing station generate a huge income for the company which also a exemplary pricing
strategy for the company. Marketing Mix: (91, 2016)

Promotion:
Brand equity of Maruti Suzuki is built through its excellent marketing perception. The brand
equity is helping the company to cut down on the promotion cost which increases the margin
to reduce further the cost of the cars. They use Bollywood endorsers to endorse the cars and
have decent promotion budget using all means of media mix. They have been very trendy in
using the digital space very well in launching Brezza, Ignis and S Scross even before the
TVC was released in Tv channels. They spend the max on TV followed by newspapers ads
and outdoor hoardings which we call them billboards. The point of sales in their showrooms
and other relevant places are also attractively designed. In India we have some auspicious
days or months when people buy lost of stuff for the households. Buying cars is also very big
during those days and all the car companies run special discounting promotions during those
days. During lean period Maruti also runs scheme as one gold coin per car is also to attract
people to buy so that to maintain a good average per month of selling cars..
Process:

MUL being owned by Suzuki Motors follows robust process systems across departments
The cars are marketed with a structured process about welcoming guests, Lounges for wait at
showroom as well as in the service station, updating you about the loan approvals
Updating you at every stage of car servicing so that to be aware of the committed deadlines to
deliver the car whether new or after servicing – Quality & Hygiene are the integrated factors
here. The robust online portal also gives all the information about the engine, virtual driving
simulation and efficiency, DOs and DONTs while driving and much more. This makes them
to have thought leadership plank which is very important and hygiene for any leader across
any stream and industry.

The captured data while buying car keep guiding you about the due servicing and other free
servicing such as before summer to get the coolant level checked, before rain the wiper
checked and before winter the filter and heating checked. These all processes are an asset to
the company for their growth.
People:

• Training for Sales people, Marketing people, Servicing and technical people is the
key to keep the customers happy
• Regular training programs are mandate as engines are getting evolved regularly to
deliver more power and efficiency
• Cars are getting software driven the trained people at MUL become the marketing
agents irrespective whether they are in sales or marketing or technical side

• A uniform for every one – from CEO to the lower rank employee gives an equality
amongst them. It motivates the teams and gives a sense of equal ownership to
everyone.
• Regular rotation from sales to marketing and regular promotion basis the target
achievements are also very important here for the company

Physical Evidence: Marketing Mix: (91, 2016)

• Interior and exterior decoration: It will be same across all showroom

• The uniform of the staff: The same uniform with a name tag and above all a
welcoming smile
• The signage of the brand name is one of the most common physical evidence of the
company.
• The oldest modern card company’s the WING logo which is M actually is visible and
known to everyone.
The high visibility of Maruti logo across nation makes it look like a commodity or part of our
daily life, as we truly say Maruti Suzuki as people cars of India. All the car owners will have
some experiences of their of using Maruti cars once in their life.

Q3 – The role of marketing model - Swot and PESTEL (suzuki, 2019)

Keeping in mind the objective of introducing new model and hence the marketing plan I
would choose SWOT because to know the perceived and actual strength, weaknesses
opportunity and threats for the company in a given category and market. And being in Indian
market the analysis of political, economic and social learning is very important which makes
us to choose PESTEL model. Actually PORTER’s is also relevant but PESTEL is essential to
be considered if choice is given to choose one.

Let’s see below the first model – SWOT to analyse the situation to meet our objective.

SWOT Analysis (suzuki, 2019)

The SWOT Analysis for Maruti Suzuki is presented below:

Strengths Weakness
1. Continuously increasing
overall performance and strong
equity in the market
2. Expanded product offerings
1. Cockpit quality, dash board material and look
and history of launching
to be improved which is still lacking than the
almost all the car successfully
competition
3. NEXA and ARENA are at top
2. Maruti cannot command premium because of
of high customer score of
its middle income and affordable imaginary.
satisfaction
4. Very healthy balance sheet and
improving bottom line and
share value
Opportunities
Threats

1. In between step of demonetisation taken by

government has pulled down the national
economy & no cash transaction beyond 2
1. Surge in economic level of the lakhs INR
consumers 2. Other MNC also putting up plants in India

Strength

1. Continuously increasing overall performance and strong equity in the market :

Maruti Suzuki has been the ruling the Indian market with at 53% market share up from
51.8% so a healthy increase of 1.2%. Passenger cars segment has registered 2.7% more
growth than the category . MUVs have registered 31% more growth than the category which
is remarkable. Maruti Vans have improved by 11.2%% more than the category, And upsurge
of 11% in exports as well than last year.

2. Expanded product offerings and history of launching: Maruti Suzuki has 18 products
catering to huge population of India which is diversed and is very expanded. Almost all the
past launches has been super hit in the market and last one being of Baleno which gave 44000
car bookings before even the car was in the market. Vitara too got about 35000 bookings
because of the strong equity in the market.

3. NEXA and ARENA are at top of high customer score of satisfaction : World class
process driven and experiential services extended by both NEXA and ARENA distribution
network owned by Maruti have done very well in the customer satisfaction boosting the
company decision of having their own network. Out of about 1800 plus outlets currently 125
are NEXA and 100 plus of ARENA now in the market. (suzuki, 2019)

4. Very healthy balance sheet and improving bottom line and share value: A very healthy
balance sheet and highly profitable company. Sakes improved by almost 13% with 21%
increase in PAT and earning per share also increased by 16%

Weakness (suzuki, 2019)

1. Cockpit quality, dash board material and look to be improved which is still lacking
than the competition
Maruti Ciaz Interior Toyota Corolla Interior

Marui Suzuki have to improve the dash board or the interior material and look of complete
cockpit a lot. People don’t not see them competing with same price category of Toyota or
Hyundai..

2. Maruti cannot command premium because of its middle income and affordable
imaginary: Like I mentioned earlier that Maruti tried to change its image by launching
premium luxury car. By somehow they failed every time. They failed because people see
them as middle class segment car manufacturers rather than premium. This one side makes us
a mass car manufactures and one side we cant demand premium because of the same tagging.
Also in SUV segment other Indian players like Mahindra and TATA are doing better than
them because of technological issue here with Suzuki. Suzuki globally too is not known for
making powerful SUV like Mitsubishi or Isuzu.

Opportunity

1. Surge in economic level of the nation & consumers : India 7% stable GDP is because of
improved infrastructure development majorly which includes roads which has been gaining
kilometres and quality too.t which has pushed the sales of the cars a lot. Increasing jobs and
salary levels have pushed the consumers to change cars in every 4-5 years to aspire to have
higher level card every time. This is a huge opportunity area for Maruti to further expand its
portfolio.

Threat

1. In between step of demonetisation taken by government has pulled down the

national economy & no cash transaction beyond 2 lakhs INR

Demonetisation had effected everybody and slowed down the growth as well. The
new guideline to not accept the cash more than 2 lakhs INR also affected the growth
and there are prediction about reducing it to 1 lakh only. People who deal in more
cash they feel bad and try to avoid buying expensive cars.

2. Other MNC also putting up plants in India: Make-in -India policy is promoting to
have more and plants in India being offered better tax exemption to increase job
opportunities and hence the GDP. Hyundai, Nissan and Toyota already in advance
 talk to set up full plant in India which will make them price competitive and threat to
Maruti Suzuki. (suzuki, 2019)

PESTEL ANALYSIS (analysis, 2019)

The PESTLE Analysis for Maruti Suzuki presented below:

Political Economical
1. Positive development in global
economy a healthy sign for export
1. Rise in awareness on the raising global warming and
sales
vehicles being one of the main reasons
2. Rising growth of the
2. Make in India – an initiatives by the government of
domestic products.
India to promote more manufacturing within India
3. Dynamic and evolving
rather than just assembling. Allowing 100% FDI
capital market

Social Technological

1. Evolving customer demands or requirements due to

social values enhancements 1. Demand to meet world class
technology product with green tag
2. Car -pooling & shared mobility is also on rise in meeting environment norms.
India
Legal Environmental

1. Green Tribunal responsible to curb the

1. Green Tribunal’s guidelines on
pollution in India is also concern to change the
engine quality and efficiency for the
efficiency technology of the cars
environment
2. Legal requirements to meet safety standard in
the cars

So if we see the scenario now after analysing both the SWOT and PESTEL we realised that
we need to customise the marketing plana and its relevant strategies keeping the evolving
above mentioned factors which will certainly put our plan in better mode to be successful
launch again to meet customers’ requirements and meeting all parameters of society and
government.

Product Life cycle: (analysis, 2019)

Product life cycle or PLC is an important part of the product and R&D team analysis. They
have to keep an eye on the sales trends vi-a vis category to chalk out plan and analyse the
reasons. The PLC can be for a brand, category or for a product. The PLC can just months,
years or centuries. Its very subjective to consumers behaviours and strategies being adopted
by the company.

The 4 stages are :

1) Introduction stage
2) Growth stage
3) Maturity
4) Decline

Maruti Suzuki is performing very well on this front and has been phasing out the variants and
models before they fail in the market. There are many example of their excellent team result
on PLC front. You will see below how they have changed the models taking insight from
evolving social, cultural, environmental, financial & technological impacts in the people life.
Sometime we phase out the product because of environmental reasons because of its engine
is not meeting the benchmark standards of the pollution. And sometime we do because of
technology which may be towards efficiency, performance or features.

Maruti Suzuki when started with Maruti 800 cc, this remains the queen of the road till people
started seeing it a box of metal and before they could fail it Maruti Suzuki used same
platform and launched Alto 800. Zen to Maruti Swift, Maruti1000 to Maruti Esteem to Ciaz,
Gypesy to Vitara, Omni to Ertiga and many more.
The reason of phasing out model or variant can be : Social, Financial, Technological,
Environmental or sometime may be a political reason. The example of political reason is the
Maruti Gypsy was decided by the government to be for armed forces and should not be sold
to people so that to differentiate between them and Maruti Suzuki had to phase out the car
from the market and after few years because of technology factor even armed forces stopped
buying it and the company had to shut it and re launched as Brezza for every one and has
been very successful in winning people heart with this mini SUV.

4.
Conclusion and suggestion to expand in global market (analysis, 2019)

I would like to conclude this project by summarising the facts that Maruti Suzuki
India has been the second largest market for Suzuki Motors Japan and contributes a
sizeable portion to their balance sheet. They have been truly motorizing India and
ruling the road and winning hearts of billions of people. The marketing strategies
adopted by them has been very successful and very specific to the need rather than
like a carpet bombing way.

The sales and marketing team go hand in hand conveying the ground realities to the
marketing team to plan the upgrade or phasing out the model or variant before market
fails them. The regular shifting of people between sales and marketing is turning out
to be good practice as they get versed with one language and do not have a thick or
thin wall of mis communication.

Maruti Suzuki India has become a hub and cars are getting exported to Europe, Africa
and Mexico. Last year they exported 128000 cars which is higher than that of
previous year. The challenges faced by the company outside India is majorly the
brand equity and serviceability. (suzuki, 2019)

It’s a chicken and egg story for them, should they sell cars first or focus on the spares
and service part of the car. This led them to not to be in top 10 cars when people want
to buy. People who have been to Asia and driven their car, they find out and buy
knowing this needs least servicing cost but when needed they drive far to get the work
done. People who haven’t driven or been to Asian market and seen the market share
of the Suzuki, they need to be told means a high budget media campaign is needed
along with other marketing activities like at door demonstration and PR through the
bloggers.
 Maruti Suzuki have understood this and recently they have done advertising using
new TVC and also through the social media in the Mexico market and broken the
history long competition with Toyota to become their strategic partner to solve the
challenge of serviceability of the cars. (suzuki, 2019)

The values and mission strategy has been the strong hand for the company to grow
multi-fold in India and will do the same globally too.

Maruti Suzuki and Toyota will share their platform and services to help each other in
their weak markets. The MoU seems to be under signatures as per the media reports
and this sure will bring in a new era for Maruti Suzuki to stabilise in the global market
outside Asia and will increase the market share.

Works Cited
91, M., 2016. Marketing of Maruti Suzuki. [Online]
Available at: https://www.marketing91.com/marketing-strategy-of-maruti-suzuki/
[Accessed 2019].
 suzuki, m., 2019. maruti suzuki. [Online]
Available at: www.marutisuzuki.com
analysis, P., 2019. marketing 91. [Online]
Available at: www.marketing91.com
MINT, L., n.d. live mint /passengers car. [Online]
Available at: www.livemint/pvs/maruti
[Accessed 2019].

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