Professional Documents
Culture Documents
We take this opportunity to convey our sincere thanks and gratitude to all those
who have directly or indirectly helped and contributed towards the completion o
f this project.
First and foremost, I would like to thank Mr. Rakesh Gupta Professor, IILM-GSM,
Greater Noida for his constant guidance and support throughout this project. Dur
ing the project, we realized that the degree of relevance of the marketing strat
egies being imparted in the industry is very high. The marketing strategies stud
y enabled us to get a better understanding of the nitty-gritty of the company.
We would also like to thank my batch mates for the discussions that we had with
them. All these have resulted in the enrichment of our knowledge and their input
s have helped us to incorporate relevant issues into our project.
Two things that stunted growth of the Indian automobile industry in the past ha
ve been low demand and lack of vision on the part of the original equipment manu
facturers (OEMs). However, the demand has picked up after the liberalization of
the regulatory environment, and
global OEMs who enjoy scale economies both in terms of manufacturing and researc
h and development (R&D) entered the Indian market. This has resulted in a signif
icant shift in the way business is conducted by suppliers, assemblers and market
ers.
Maruti suzuki India LTD
Maruti Udyog Limited (MUL) was established in Feb 1981 through an Act of Parliam
ent, to meet the growing demand of a personal mode of transport caused by the la
ck of an efficient public transport system. It was established with the objectiv
es of - modernizing the Indian automobile industry, producing fuel efficient veh
icles to conserve scarce resources and producing indigenous utility cars for the
growing needs of the Indian population. A license and a Joint Venture agreement
were signed with the Suzuki Motor Company of Japan in Oct 1983, by which Suzuki
acquired 26% of the equity and agreed to provide the latest technology as well
as Japanese management practices. Suzuki was preferred for the joint venture bec
ause of its track record in manufacturing and selling small cars all over the wo
rld. There was an option in the agreement to raise Suzuki’s equity to 40%, which
it exercised in 1987. Five years later, in 1992, Suzuki further increased its e
quity to 50% turning Maruti into a non-government organization managed on the li
nes of Japanese management practices.
Maruti created history by going into production in a record 13 months. Maruti is
the highest volume car manufacturer in Asia, outside Japan and Korea, having pr
oduced over 5 million vehicles by May 2005. 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 Maruti generated operating profits on an income o
f Rs 92.5 billion, high depreciation on new model launches resulted in a book lo
ss.
COMPANY HISTORY AND BACKGROUND
The Evolution
Maruti’s history of evolution can be examined in four phases: two phases during
pre-liberalization period (1983-86, 1986-1992) and two phases during post-libera
lization period (1992-97, 1997-2002), followed by the full privatization of Maru
ti in June 2003 with the launch of an initial public offering (IPO).The first ph
ase started when Maruti rolled out its first car in December 1983. During the in
itial years Maruti had 883 employees, a capital of Rs. 607 mn and profit of Rs.
17 mn without any tax obligation. From such a modest start the company in just a
bout a decade (beginning of second phase in 1992) had turned itself into an auto
mobile giant capturing about 80% of the market share in India. Employees grew to
2000 (end of first phase 1986), 3900 (end of second phase 1992) and 5700 in 199
9. The profit after tax increased from Rs 18.67 mn in 1984 to Rs. 6854.54 mn in
1998 but started declining during 1997-2001.
During the pre-liberalization period (1983-1992) a major source of Maruti’s stre
ngth was the wholehearted willingness of the Government of India to subscribe to
Suzuki’s technology and the principles and practices of Japanese management. La
rge number of Indian managers, supervisors and workers were regularly sent to th
e Suzuki plants in Japan for training. Batches of Japanese personnel came over t
o Maruti to train, supervise and manage. Maruti’s style of management was essent
ially to follow Japanese management practices.
Vision
The leader in the India Automobile Industry, Creating Customer Delight and Share
holder’s Wealth; A pride of India”
Mission
To provide maximum value for money to their customers through continuous improve
ment of products and services.
Maruti has a network of 391 sales outlets across 230 cities all over
India. The service network covers 1,113 towns and cities, bolstered by 2,142 au
thorized service outlets.The company s change in strategy and emphasis on develo
ping effective marketing communications was their highlights.
The company vouches for customer satisfaction. For its sincere eff
orts it has been rated (by customers)first in customer satisfaction among all ca
r makers in India for ten years in a row in annual survey. Maruti Suzuki India L
imited, a subsidiary of Suzuki Motor Corporation of Japan, has been the leader o
f the Indian car market for over two decades.
During 2007-08, Maruti Suzuki sold 764,842 cars, of which 53,024 we
re exported. In all, over six million Maruti cars are on Indian roads since the
first car was rolled out on 14 December 1983.
MARUTI UDYOG LIMITED
PRODUCT PROFILE OF MARUTI SUZUKI INDIA LIMITED LTD.
ALTO - LET’S GOS
The alto is a great combination of economy, practicality and styling. A runaway
success on the roads of Europe, it exemplifies the benchmark in build, quality a
nd reliability in a compact car. This is testified by the 24 hour endurance reco
rd set on August 3, 2003 of covering 3082 kms in 24 hours at an average speed of
128 kmph.
BALENO – SURPRISING PERFORMANCE
India’s true performance sedan is upwardly mobility, redefined. The 13 advanced
noise reduction technologies ensure the cabin is quiet and peaceful. The flat to
rques of 132 Nm allows one to enjoy 94 bhp of refine power. Enjoying a cult foll
owing among those who appreciate technology as an art form, the Baleno is a trul
y awesome performer.
GRAND VITARA XL – 7 - LIVE THE GRAND LIFE
Live the grand life with the new GRAND VITARA XL –7. This luxurious 7 seater, 4
wheel drive sports utility vehicle comes equipped with a powerful V6 engine, 166
bhp of power and 236 Nm of torque. Which enables you to conquer any terrain wit
h utmost ease? Enjoyed by both the adventurous and successful, the new restyled
Grand Vitara XL –7 is now available in India directly imported from Suzuki, Japa
n.
GYPSY – ADVENTURES UNLIMITED
Be it the wild outdoors or the urban jungle, the Gypsy King glide by with ease.
The adventurous streak runs through all the gypsy siblings. This 1300 cc off – r
oad vehicle combines the raw of 80 bhp (at 6000rpm) with superb 4 – wheel drive
maneuverability and a rugged frame (it’s available in both soft and hard top ver
sions). It’s useful fifth gear, of course, delivers over drive for on – road cru
ising.
OMNI – FITS ALL
The Omni is truly India’s Original Multipurpose Vehicle. Today it is available i
n six avatars – 5 seater, 8 seater, cargo, ambulance, CNG and LPG. It meets dive
rse needs across different user segments and can double up both as a people carr
ier and a goods carrier. This faithful workhouse is easy on the pocket, yet toug
h on the job.
VERSA - THE JOY OF TRAVELLING TOGETHER
Equipped with twin AC, large sliding doors and flexible seating, the Versa enco
urages families and friends to enjoy long drives and gateways together. In spite
of being so spacious, its design allows for easy maneuverability in the city.
MARUTI 800 - CHANGE YOUR LIFE
It has gone beyond being just a car; it has actually changed the lifestyles of c
ountless people, by bringing the joy of motoring to millions across the length a
nd the breadth of the country. Standing testimony to this claim is the fact that
more than 2 millions Maruti 800s have been sold till date. Today, India best se
lling continues to be the final word on value and economy at the entry-level seg
ment.
WAGON R-INSPIRIED ENGINEERING
The Wagon R’S original tall body design, spaciousness, ergonomically designed in
terior and flexible seating all set it apart from other cars. It complements the
buyers unique personality enables him to live a multi-dimensional life by the s
heer excellence of its engineering and its versatility.
ZEN –SURRENDER TO THE NEW ZEN
If you are looking for a car with drop – dad looks and unmatched performances, t
hen you need look beyond the Zen. With its new contemporary and aggressive look,
the Zen preserves its core values of driver appeal, unmatched reliability and e
conomy. 600000 satisfied customers in India and around the world bear testimony
to this fact.
ESTEEM – PERFORMANCE, QUALITY AND FUEL EFFICIENCY
Undoubtedly one of India’s favorite entry – level “C” class vehicles, the esteem
is the perfect combination of power, comfort and economy. It’s also the preferr
ed choice of rally drivers across the country for its performance and reliabilit
y. The Esteem offers the option of an 85 bhp petrol engine for those who desire
power and a 57 bhp diesel for those who value economy. Not surprisingly, it tops
its class in quality surveys.
SWIFT- YOU ARE THE FUEL
The hot looks, sexy interiors, the automatic climate control, the air bags, the
power steering moreover, all so affordable. The wait is over. Swift has entered
MUL’s portfolio. What are you waiting for?
A-STAR-STOP @ NOTHING
Powered by state of art 998 cc engine, it’s the best fuel efficient car in its c
ategory with, mileage coming around 20km per liter.
SX-4 – MEN ARE BACK
Revolutionary European design, world class “drive by wire” .Most spacious in its
class, Steering mounted audio controls; with maximum ground clearance, high on
safety with dual airbags.
SWIT DZIRE- THE HEART CAR
A car having everything you desire stunning looks, luxurious interiors, enough p
ower to capture your heart. Just slide in desire and take it for a spin. Its sur
e steal many of hearts including yours.
Ritz -“Live the Moment”
Model of 2009 known by the name Suzuki splash having attractive back with maximu
m ground clearance
Targeting:-
4Ps:-
Product
Price
Place
Promotion
Product Strategy:-
Portfolio of 12 products
Five product lines
Product Line Products
A1 800
A2 Alto, Zen ,Wagon –R, Swift, A-star
A3 D ZiRE, Sx4
SUV Vitara, Gypsy
C - Class Omni, Versa
Price Strategy:-
The price of the Maruti car is between Rs. 210000 to Rs. 1500000. Maruti – 800
is the lowest price car of this company. Alto, Omni, Wagon R, are also the low
price car of the company, Zen & Esteem are the mid price car of the company. But
Grand Vitara is the high price model of the company. The price of car is decide
d according to its product variety, quality, design etc.
Place strategy:-
600 New car sales outlets covering 393 cities.
265 ‘Maruti True Value’ outlets spread across 166 cities.
2628 Maruti Authorized Service Stations, covering 1220 cities.
Tie up with Adani group for exporting 200,000 units through Mnudra port Gujarat
Suggested Place strategy:-
400 new car sales outlets in next three years.
S150 new true value shops in next three years.
1200 new Maruti Authorized Service Stations in next three years.
Tie up with other distributors for Exports.
Promotion Strategy:-
Advertising
• TV Ads
• Print Ads
• Radio Ads
“Ghar Aa Gaya Hindustan”
“India Comes Home in Maruti Suzuki.”
Information Advertising, alternative Advertising Options
BTL - Sponsorships
TV shows - India’s Got talent
Place Advertising – Bill boards
Sales Promotions
Product warranties
Premiums (gifts)
Trade shows
2,628The number of workshops that provide customers with maintenance sup
port in 1220 cities.
Product life cycle
Introduction Stage:-
Market share and growth is slight.
Substantial research and development costs have been incurred
Marketing costs may be high in order to test the market, undergo launch
promotion and set up distribution channels
Highly unlikely that companies will make profits on products.
Example- A-star, Swift Dzire
2)Growth Stage:-
Characterized by rapid growth in sales and profits.
Profit arise due to an increase in output(economics of scale).
Significant promotional resources are traditionally invested in products
that are firmly in the growth stage.
Cheaper for businesses to invest in increasing their market share.
Example- Swift, Zen estilo
3) Maturity Stage
Competition is most intense as companies fight to maintain their market
share.
Any significant moves are likely to br copied by competitiors.
The maturity stage is the time when most profit is earned by the market
as a whole.
Any expenditure on research and development is likely to improve product
ion efficirncy and quality.
Example- Alto, Wagon-R
4) Decline Stage
Market is shrinking, reducing the overall amount of profit.
Possible to take out some production cost, to transfer production to a c
heaper facility, sell the product into other, cheaper markets.
Depending on whether the product remains profitable, accompany may decid
e to end the product.
Care should br taken to control the amount of stocks of the product.
Exmaple- Baleno, Esteem
SWOT Analysis:
STRENGTHS
Bigger name in the market
Trust of People
Maruti Udyog Ltd. is the market leader for more than a decade.
Has a great dealership chain in the market.
Better after sales service
Low maintenance cost of vehicle
WEAKNESSES
Exports are not that good.
Lesser diesel models in the market compare to others
Global image is not that big
OPPURTUNITIES
Great opportunities to go global with success of Swift and SX4 allover
Introduction of more diesel models. The diesel car segment is growing
Opportunity to grow bigger by entering into bigger car markets
Already a market leader so great opportunity to be the king of market in every
stage of industry
THREATS
Foreign companies entering market; so a bigger threat from
MNCs.
To the market share, as many big names are coming in the industry
There is hardly any diesel models
Rs. 1 lakh – Rs. 1.5 lakh car
Portfolio Analysis
MATRIX OF MARUTI SUZUKI
STAR: The Company has long run opportunity for growth and profitability. They ha
ve high relative market share and high
Growth rate. SWIFT, SWIFT DESIRE AND ZEN ESTILO is the fast growing and has pote
ntial to gain substantial profit in the market.
QUESTION MARK: there are also called as wild cats that are new products with pot
ential for success but there cash needs are high
And cash generation is low. In auto industry of MARUTI SX4, GRAND VITARA, ASTAR
there has been improve the organization reputation
As they want successful not only in Indian market but as well as in global marke
t.
CASH COW: It has high relative market share but compete in low growth rate as th
ey generate cash in excess of their needs.
MARUTI 800, ALTO AND WAGNOR have fallen to ladder 3 & 4 due to introduction of Z
EN ESTALIO and A STAR.
DOG: The dogs have no market share and do not have potential to bring in much ca
sh.BALENO, OMINI, VERSA There business have liquidated and trim down thus
The strategies adopted are that are harvest, divest and drop.
BCG matrix can serves as a simple tool for viewing a corporation’s business port
folio at a glance , and may serves as a starting point for discussing
resource allocation among strategic business units.
McKINSEY 7s FRAMEWORK:-
Strategy
Their strategy is to capture the rural market by employing women who belong to t
heir local community through which their product can reach to local consumers. T
heir strategy is to provide work for women to create awareness among confined co
nsumers
Process
They started with Project Shakti in which their basic aim
is to educate a rural person about their products through women who belongs to t
heir own local community and who can communicate well in their language with the
m. In this way many educated women get work in rural sector and on the other han
d HLL Corporate Social Responsibility (CSR) also increases towards society by in
troducing educative programs for the benefit of the rural sector
KEY STRATEGIC INITIATIVES BY MARUTI
A) TURNAROUND STRATEGIES MARUTI FOLLOWED
Maruti was the undisputed leader in the automobile utility-car segment sector, c
ontrolling about 84% of the market till 1998. With increasing competition from l
ocal players like Telco, Hindustan Motors, Mahindra & Mahindra and foreign playe
rs like Daewoo, PAL, Toyota, Ford, Mitsubishi, GM, the whole auto industry struc
ture in India has changed in the last seven years and resulted in the declining
profits and market share for Maruti. At the same time the Indian government perm
itted foreign car producers to invest in the automobile sector and hold majority
stakes.
In the wake of its diminishing profits and loss of market share, Maruti initiate
d strategic responses to cope with India’s liberalization process and began to r
edesign itself to face competition in the Indian market. Consultancy firms such
as AT Kearney & McKinsey, together with an internationally reputed OD consultant
, Dr. Athreya, have been consulted on modes of strategy and organization develop
ment during the redesign process. The redesign process saw Maruti complete a Rs.
4000 mn expansion project which increased the total production capacity to over
3,70,000 vehicles per annum. Maruti executed a plan to launch new models for di
fferent segments of the market. In its redesign plan, Maruti, launches a new mod
el every year, reduce production costs by achieving 85-90% indigenization for ne
w models, revamp marketing by increasing the dealer network from 150 to 300 and
focus on bulk institutional sales, bring down number of vendors and introduce co
mpetitive bidding. Together with the redesign plan, there has been a shift in bu
siness focus of Maruti. When Maruti commanded the largest market share, business
focus was to “sell what we produce”. The earlier focus of the whole organizatio
n was "production, production and production" but now the focus has shifted to "
marketing and customer focus". This can be observed from the changes in mission
statement of the organization:
1984: "Fuel efficient vehicle with latest technology".
1987: "Leader in domestic market and be among global players in the overseas mar
ket".
1997: "Creating customer delight and shareholders wealth".
Focus on customer care has become a key element for Maruti. Increasing Maruti se
rvice stations with the scope of one Maruti service station every 25 km on a hig
hway. To increase its market share, Maruti launched new car models, concentrated
on marketing and institutional sales. Institutional sales, which currently cont
ributes to 7-8% of Maruti’s total sales. Cost reduction and increasing operating
efficiency were another redesign variable. Cost reduction is being achieved by
reaching an indigenization level of 85-90 percent for all the models. This would
save foreign currency and also stabilize prices that fluctuate with exchange ra
tes. However, change in the mindset was not as fast as required by the market. M
aruti planned to reduce costs, increase productivity, quality and upgrade its te
chnology (Euro I&II, MPFI). In addition, it followed a high volume production of
about 400,000 vehicles / year, which entailed a smooth relationship between the
workers and the managers.
Post 1999, the market structure changed drastically. Just before this change, Ma
ruti had wasted two crucial years (1996-1998) due to governmental interventions
and negotiation with Suzuki of Japan about the break-up of the share holding pat
tern of the company. There was a change in leadership, Mr. Sato of Suzuki became
the Chairman in June 1998, and the new Mr.J. Khatter was appointed as the new J
oint MD. Khatter was a believer in consensus decision making and participative s
tyle of management.As a result of the internal turmoil and the changes in the ex
ternal environment, Maruti faced a depleting market share, reducing profits, and
increase in inventory levels, which it had not faced in the last 18 years.
After their fall in market share they redesigned their strategies and through th
eir parent company Suzuki they learned a lot.The organizational learning of Maru
ti was moderately successful, the cost was relatively inexpensive as Maruti had
its strong Japanese practices to fall back upon. With the program of organizatio
nal redesign, rationalization of cost and enhanced productivity, Maruti bounced
back to competition with 50.8% market share and 40% rise in profit for the FY200
2-2003.
B) CURRENT STRATEGIES FOLLOWED BY MUL
PRICING STRATEGY - CATERING TO ALL SEGMENTS
Maruti caters to all segment and has a product offering at all price points. It
has a car priced at Rs.1,87,000.00 which is the lowest offer on road. Maruti get
s 70% business from repeat buyers who earlier had owned a Maruti car. Their pric
ing strategy is to provide an option to every customer looking for up gradation
in his car. Their sole motive of having so many product offering is to be in the
consideration set of every passenger car customer in India. Here is how every p
rice point is covered.
The markets outside of Europe that have large quantities, in the current year, a
re Algeria, Saudi Arabia, Srilanka and Bangladesh. Maruti exported more than 51,
000 vehicles in 2003-04 which was 59% higher than last year. In the financial ye
ar 2003-04 Maruti exports contributed to more than 10% of total Maruti sales.
NEW INITIATIVES IN MARUTI SUZUKI LIMITED (one stop shop to meet all your needs)
In an effort to become a complete car company, Maruti has entered the car insura
nce business as well. It offers the customer all the advantages of settling insu
rance claims directly with any of the company’s authorized dealers.
MARUTI FINANCE
Maruti Finance offers the best finance packages to consumers across the entire M
aruti range. The service is being extended across the country in a phased manner
.
MARUTI GENUINE ACCESSORIES
A single point of contact,Hassle-free transactions,Emergency Assistance ,Virtual
ly Cashless Repairs Post accident repairs and insurance support at any dealer wo
rkshop
MARUTI TRUE VALUE
Maruti has taken its first steps in the pre-owned car business under the brand n
ame of Maruti True Value. Using their technological expertise, network support a
nd the experience they have gained in the last 18 years, the company ensures the
customers gets great value and completes the transaction zero hassles.
EXTENDED WARRANTY
4 years or 80,000 kms
Can bought anytime during primary warranty, best at time of purchase.
ANYTIME MARUTI
Maruti Suzuki has also set up state-of-the-art call centers (operational in Delh
i, Gurgaon, Mumbai, Chennai, Bangalore and Hyderabad) Branded Anytime Maruti, th
is 24 hour help-line clarifies all doubts and queries regarding Suzuki any time
of the day or night
CONCLUSION
The price of a car is just one-third of what it cost you over its lifetime. Runn
ing and maintaining it make up the other two-thirds. Take into account resale va
lue and its real cost becomes clear. Maruti Suzuki stands for value as much as i
t stands for performance. In spite of rising input costs, we try our best to kee
p prices down. Their running costs and resale values are unbeatable too. Nothing
matches the delight their cars deliver. In the JD Power CSI study 2005, 85% of
Maruti Suzuki owners stated that they would definitely recommend the car they dr
ive to someone else. Infact, you don’t buy a Maruti Suzuki. You invest in it.
After the rash of new cars launches the past two years, the relative lull in the
auto industry is showing up in the customer satisfaction indices. According to
the 2005 four-wheeler Total Customer Satisfaction (TCS) study conducted by the s
pecialist division of TNS Automotive, the automobile ownership experience or cus
tomer ownership experience has declined in all areas compared to 2004. The stud
y is one of the largest syndicated automotive studies in India, representing the
responses of more than 7,000 new car buyers. The comprehensive study covers ove
r 50 models with customer evaluations taken in the key areas of sales satisfacti
on, product quality, vehicle performance and design, after-sales service, brand
image, and cost-of-ownership. The TCS index score provides a measure of satisfac
tion and loyalty a given model enjoys with its customers. According to TNS Auto
motive, the decline is predominantly for older, small and entry mid-size car mod
els. The ageing of these models seems to be posing a stiffer challenge for manuf
acturers to sustain past performance levels at a time when customer expectations
are rising sharply.
BIBLIOGRAPHY
BOOKS
Strategic Management and Business Policy by
• Thomas L. Wheelen
• J. David Hunger
• Krish Rangarajan
NEWS PAPERS
THE ECONOMIC TIMES
THE TIMES OF INDIA
MAGAZINES
BUSINESS INDIA
INDIA TODAY
INTERNET WEBSITES
www.scribd.com
www.google.com
www.marutisuzuki.com