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PREFACE

If we can compare marketing to a long train with a multiple compartment then every bogies represent different aspect of marketing. Marketing strategy formulation depends upon the every aspect of related terms and marketing research plays vital roles to connect each compartment to form a cohesive functional unit. The automotive industry is at the center of Indias new global dynamic. It plays major roles in retaining manufacturing industry growth over 12.5% per annum The motivation behind the project was to gain clear understanding about marketing research. Through this project I have tried to understand the complexities involved in gathering of data for drawing inferences .The final objective is to produce a result that is accurate, useful, and free from bias and helps in the successful completion of my Master of business Administration course. The project has been presented in a simple format.

ACKNOWLEDGEMENT

I would like to take this opportunity to express my deep gratitude to all those who, directly or indirectly made this project possible. I have got considerable help and support in making this project report really from many people. I would like to thank Miss. Sandhya Tripathi whose endeavor for perfection, under fatigable zeal, innovation and dynamism contributed in a big way in completing this project. This work is the reflection of his thought, ideas, concept and above all his modest effort.

Ashok kumar

Introduction & Objective INTRODUCTION History Of The Company History Of Maruti Brands And Models Manufacturing Markets Major Future Strategies Advertising Of Maruti Swot Analysis Of Company RESEARCH METHODOLGY DATA PRESENTATION FINDINGS CONCLUSION SUGGESTION LIMITATIONS BIBLIOGRAPHY ANNEXURE

(4-6) (7-54) (8-14) (15-24) (25-26) (27-39) (40-44) (45-48) (49-54) (55-58) (59-72) (73-74) (75-77) (78-79) (80-81) (82-83) (84-86)

INTRODUCTION MARUTI UDYOG LIMITED

Maruti Udyog Limited, a subsidiary of Suzuki Motor Corporation the leader of the Indian car market for about two of Japan, has been

decades. Its manufacturing plant,

located some 25 km south of New Delhi in Gurgaon, has an installed capacity of 3,50,000 units per annum, with a capability to produce about half a million vehicles. The company has a portfolio of 11 brands, including Maruti 800 ,Omni, premium small car Zen, international brands Alto and WagonR, off-roader Gypsy, mid size Esteem, luxury car Baleno, the MPV, Versa, Swift and Luxury SUV Grand Vitara XL7.In recent years, Maruti has made major strides towards its goal of becoming Suzuki Motor Corporation's R and D hub for Asia. It has introduced upgraded versions of WagonR, Zen and Esteem, completely designed and styled in-house. Maruti's contribution as the engine of growth of the Indian auto industry, indeed its impact on the lifestyle and psyche of an entire generation of Indian middle class, is widely acknowledged. Its emotional connect with the customer continues Maruti tops customer satisfaction again for sixth year in a row according to the J.D. Power Asia Pacific 2005 India Customer Satisfaction Index (CSI) Study. The company has also ranked highest in India Sales Satisfaction Study. The company's quality systems and\practices have been rated as a "benchmark for the automotive industry world-wide" by A V Belgium, global auditors for International Organization for Standardization. In keeping with its leadership position, Maruti supports safe driving and traffic management through mass media

messages and a state-of-the art driving training and research institute that it manages for the Delhi Government. The company's service businesses including sale and purchase of preowned cars (True Value), lease and fleet management service for corporates (N2N), Maruti Insurance and Maruti Finance are now fully operational.. These initiatives, besides providing total mobility When it comes to Indian auto industry, the first brand that comes to Indian customer mind is Maruti. In our paper we are attempting to identify the future of Maruti Udyog Ltd which is currently the market leader. The main questions we will be addressing are, Can it sustain its market share Will their be a decline in profits What can it do to keep its growth rate? How can it compete in the highly competitive small car segment What are its strategic alternatives

We will analyze the competitors briefly concentrating more on TATA motors, one of the fast growing Indian auto manufacturer. Maruti Suzuki India Limited is a publicly listed automaker in India. It is a leading four-wheeler automobile manufacturer in South Asia. Suzuki Motor Corporation of Japan holds a majority stake in the company. It was the first company in India to mass-produce and sell more than a million cars. It is largely credited for having brought in an automobile revolution to India. It is the market leader in India. On 17 September 2007, Maruti Udyog was renamed to Maruti Suzuki India Limited. The company's headquarters remain in Gurgaon, near Delhi.

OBJECTIVE OF THE STUDY

To get overview of sales scenario of the company.

To know how much customers are satisfied with the services provided to them by Maruti Showroom Bareilly.

To give suggestions for improvements on the points where they are lacking on the basis of feedback from the customer.

These objectives were achieved by following a well thought out plan and defining the problem for each objective separately.

HISTORY OF THE COMPANY

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. Around 1970, Sanjay Gandhi, political advisor and younger son to the then Prime Minister of India, Indira Gandhi, envisioned the manufacture of an indigenous, costeffective, low maintenance compact car for the Indian middle-class. Indira Gandhi's cabinet passed a unanimous resolution for the development and production of a "People's Car". Sanjay Gandhi's company was christened Maruti Limited. The name of the car was chosen as "Maruti", after a Hindu deity named Marut. At that time Hindustan Motors' Ambassador was the chief car, and the company had come out with a new entrant, the Premier Padmini which was slowly gaining a part of the market share dominated by the Ambassador. For the next ten years, the Indian car market had stagnated at a volume of 30,000 to 40,000 cars for the decade ending 1983. Sanjay Gandhi was awarded the exclusive contract and licence to design, develop and manufacture the "People's Car". This exclusive rights of production generated some criticism in certain quarters, which was directly targeted at Indra Gandhi. Over the next few years, the company was sidelined due to the Bangladesh Liberation War and emergency. In the early days under the powerful patronage of Sanjay Gandhi, the company was provided with free land, tax breaks and funds. Till the end of 1970s, the company had not started the production and a prototype test model was met with criticism and skepticism. The company went into liquidation in 1977. The media

perceived it to be another area of growing corruption. [4] Unfortunately, Maruti started to fly only after the death of Sanjay Gandhi, when Suzuki Motors joined the Government of India as a joint venture partner with 50% share.[5] . After his death, Indira Gandhi decided that the project should not be allowed to die. Maruti entered into this collaboration with Suzuki Motors, The collaboration heralded a revolution in the Indian car industry by producing the Maruti 800. The car went on sale on December 14, 1983. It created a record by taking 13 months time to go from design to rolling out cars from a production line. By the year 1993 the company had sold up to 1,96,820 cars, mostly by selling its chief product the Maruti 800s. By March 1994, it produced one million vehicles, becoming the first Indian company to cross this milestone. It reached the two million mark in October, 1997 and rolled out its 4 millionth vehicle, an Alto-LX, on April 19, 2003. Suzuki Motor Company was chosen from seven prospective partners worldwide. This was due not only to their undisputed leadership insmall cars but also to their commitment to actively bring to MUL contemporary technology and Japanese management practices(which had catapulted Japan over USA to the status of the top auto manufacturing country in the world).A licence and a Joint Venture agreement was signed between Govt of India and Suzuki Motor Company (now Suzuki Motor Corporation of Japan) in Oct 1982. MUL launched its first car Maruti800 ondecember 14,1983 at initial price of Rs.47,500. Recent history YEAR EVENTS 2006 -Indian car market leader Maruti Udyog on Feb 28, announced a price cut ranging between Rs. 13,000-22,000 across five models, including M800 and Alto, following the cut in excise duty on small cars -MUL unveils new WagonR in Punjab AWARD AND ACCOLADES 2005 Number one in JD Power SSI for the second consecutive year. Number one in JD Power CSI for the sixth time in a row - the only

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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. 1in Product Appeal (Esteem and Wagon R). No. 1 in Total Customer Satisfaction (Maruti 800, Zen and Alto). Business World ranked us among the country's five most respected companies. Business World ranked us the country's most respected automobile company.

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Voted Manufacturer of the year by CNBC. Voted one of India's Greenest Companies by Business Today-AC Nielson ORG-MARG.

Future of the Automobile in the Economy

US based consultancy, keystone predicts that India will become worlds third largest automobile market by 2030. Overall size expected to exceed 20 million with compounded annual growth rate of over 12%.

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India Then & Now

1983 Number of brands 2 Number of models 2

2008 Number of brands 30

Number of models 70

Some of the Car companies in India: Maruti Suzuki Fiat General motors (Opel, Chevrolet) Ford Hindustan motors, Mitsubishi Honda Hyundai Baja tempo Marinara Maine elect. Mercedes Benz

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San engineering Toyota

Top three manufacturers:

Maruti Suzuki Tata motors Hyundai

Car segmentation: This is done on the basis of size and price of the car

A segment: maruti800, omni B segment: Zen, wagon-r, alto, Santo, polio, indicia C segment: esteem, accent, indigo, icon, Honda city, civic D-segment: opera, Octavia, sonata, monde, accord, corolla, Camry, Mercedes

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CHRONOLOGICAL ORDER OF AUTOMOBILE

1897 First Person to own a car in India - Mr Foster of M/s Crompton Greaves Company, Mumbai 1901 First Indian to own a car in India - JamshedJi Tata

1905 First Woman to drive a car in India - Mrs. Suzanne RD Tata 1905 Fiat Motors 1911 First Taxi in India 1924 Formation of traffic police 1928 Chevrolet Motors 1942 Hindustan Motors 1944 Premier Automobiles Limited 1945 Tata Motors 1947 Mahindra & Mahindra Limited 1948 Ashok Motors 1948 Standard Motors 1974 Sipani Motors 1981 Maruti Suzuki 1994 Mercedes-Benz 1994 General Motors India - Opel brand launch 1995 Ford Motor Company 1995 Honda Siel Cars India

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1995 REVA Electric Car Company 1995 Daewoo Motors 1996 Hyundai Motor Company 1997 Toyota Kirloskar Motors 1997 Fiat Motors (Re-Entry) 1998 Mitsubishi Motors 2001 koda Auto 2003 General Motors India - Chevrolet brand launch 2005 BMW 2007 Audi
2009 Land Rover and Jaguar

History of Maruti
In 1970 , Sanjay Gandhi the son of Indira Gandhi envisioned the manufacture of an indigenous , cost effective , low maintenance compact car for the Indian middle class . Indira Gandhis cabinet passed a unanimous resolution for the development and

16

production of a peoples car. Sanjay Gandhis company was christened Maruti limited. The name of the car was chosen after a Hindu deity named Maruti Ltd. That time Hindustan Motors Ambassador was the chief car and the company had come out with a new entrant the premier Padmini that worked slowly gaining a part of the market share dominated by the ambassador. For the next ten years the Indian car market had stagnated at a volume of 30,000 to 40,000 cars for the decade ending 1983. Sanjay Gandhi was awarded the exclusive contract and license to design, develop and manufacture the Peoples Car. These exclusive rights of production generated some criticism in certain quarters, which was directly targeted at Indira Gandhi. Over the next few years the company was sidelined to Bangladesh liberation war and emergency. In the early days under the powerful patronage of Sanjay Gandhi the company was provided with free land, tax breaks and funds. Till the end of 1970 the company had not started the production and a prototype test model was welcomed with criticism and skepticism. The company went into liquidation IN 1977. The media perceived it to be another area of growing corruption. Unfortunately Marutis started to fly only after the death of Sanjay Gandhi, when Suzuki motors joined the government of India as a joint venture partnered with 50% share. After his death Indira Gandhi decided that the project should not be allowed to die. Marutis entered into this collaboration with Suzuki motors. The collaboration heralded a revolution in the Indian car industry by producing the maruti-800. It created a record of taking 13 months time to go from design to rolling out cars from a production line. The production of Maruti-800 in 1983 marked the beginning of a revolution in the Indian automobile industry. It brought in the latest technology of that time more fuel efficiency and lower prices that led to the creation of a huge market for all car segments as the Indian, middle class grew in size. This in turn brought in more players in this segment. A number of auxiliary car parts making units were set up as more car manufacturers realized it was more cost effective to make their car parts in India rather than importing them. Marutis major influence was in helping the component industry in the country because of its emphasis on localization and indigenization. As in the beginning that sector hadnt

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grown much Marutis had to start dozens of joint ventures with Indian entrepreneurs. It got them from foreign collaborations that led to collaborations for other manufacturers so that over a period of time the whole component industry was able to upgrade itself and improve its quality who had given their income leading to major existing export potential vehicle components. It also brought in better methods of financing that allowed more people who given their income levels could not afford to buy a car on their own, to buy cars. It still remains the leader not only in the terms of market share but also in customer satisfaction surveys. It has consistently topped J.D. power quality surveys, including 2005. By the year 1993 the company had sold 1, 96,820 cars. By March 1994 it produced 1 million vehicles becoming the first Indian company to cross the 2 million mark in October, 1997 and rolled out 4 millionth vehicles as Alto-LX .Then it introduced Wagon-R followed by Swift . Swift has been a great success in the market .In 2007 Maruti came up with SX4 and Grand Vitara.

INDUSTRY GROWTH
Automobile Production Trends (Number of Vehicles)

Category Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers

2002- 2003- 2004- 20052006-072007-08 2008-09 03 04 05 06 723,33 989,56 1,209,8 1,309,3 1,545,22 1,777,58 1,838,69 0 0 76 00 3 3 7 203,69 275,04 353,70 391,08 519,982 549,006 417,126 7 0 3 3 276,71 356,22 374,44 434,42 556,126 500,660 501,030 9 3 5 3 5,076,2 5,622,7 6,529,8 7,608,6 8,466,66 8,026,68 8,418,62 21 41 29 97 6 1 6

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Grand Total

6,279,9 7,243,5 8,467,8 9,743,5 11,087,9 10,853,9 11,175,4 67 64 53 03 97 30 79

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Structure

Ownership
MUL India's leading automobile manufacturers and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned is a public sector initiative. 18.28% of the company is 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 of 2003.

Ownership
Govern ment Suzuki IPO others
Suzuki

others IPO

Government

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Main divisions (brand equity)

The major services offered are, Sales of Automobiles

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.

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.

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

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respectively to assist its client in securing 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 parnters 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

Maruti TrueValue
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.

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.

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 citites of India as well. These schools are modelled on international standards, where learners go through classroom and practical sessions. Many international practices like road

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behaviour and attitudes are also taught in these schools. Before driving actual vehicles participants are trained on simulators.

Key personnel
Initially R.C.Bhargava, was the managing director of the company since the inception of the joint venture. Till today he is regarded as instrumental for the success of Maruti Udyog. Joining in 1982 he held several key positions in the company before heading the company as Managing Director. Currently he is on the Board of Directors. After completing his five year tenure, Mr. Bhargava later assumed the office of Part-Time Chairman. The Government nominated Mr. S.S.L.N. Bhaskarudu as the Manging Director on August 27, 1997. Mr. Bhaskarudu had joined Maruti in 1983 after spending 21 years in the Public sector undertaking Bharat Heavy Electricals Limited as General Manager. Later in 1987 he was promoted as Chief General Manager, 1998 as Director, Productions and Projects, 1989 Director, Materials and in 1993 as Joint Managing Director.

Production Milestones
1st vehicle produced, December 1983 1,00,000 vehicles produced by August, 1986 5,00,000 vehicles produced by June, 1990 10,00,000 vehicles produced by March, 1994 15,00,000 vehicles produced by April, 1996 20,00,000 vehicles produced by October, 1997 25,00,000 vehicles produced by March, 1999 30,00,000 vehicles produced by June, 2000 35,00,000 vehicles produced by December 2001 40,00,000 vehicles produced by April, 2003

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45,00,000 vehicles produced by April, 2007-2008

OTHER PRODUCTS OF MARUTI SUZUKI

Maruti M aruti 800 STD BS III M aruti 800 AC BS III

Omni 5 seater Maruti Omni 8 seater Maruti Omni LPG Maruti Omni

Maruti Alto A lto A lto Lx A lto Lxi

Maruti Zen M aruti Zen Lx M aruti Zen Lxi M aruti Zen Vxi

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Wagon R WagonR Lx WagonR Lxi WagonR Vxi WagonR Ax

Versa 5 seater 8 seater ( DX & DX2)

Maruti Esteem M aruti Esteem Lx M aruti Esteem Lxi M aruti Esteem Vxi

Baleno Baleno Sedan VXi Baleno Sedan Lxi

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Brands and Models

Till recently whenever we think of Maruti we think of it as 800 due to the huge sales it achieved. It was like a symbol of luxury for the middle class. Now situations are changing and people are looking at Maruti stable for the wide range of products they are offering. The various models and brands that are sold by Maruti in the order of their launch are, Maruti 800: Launched 1983. Indias largest selling car till 2004. Maruti Omni: Launched 1984. Maruti Gypsy: Launched 1985. Maruti 1000: Launched 1990 Maruti Zen: Launched 1993.Modified 2003.Production to be halted Maruti Esteem: Launched 1994 Maruti Wagon- R: Launched 1999 Modified 2006 Maruti Baleno : Launched 1999 Maruti Alto: Launched 2000. Currently the largest selling car in India Maruti Grand Vitara: Launched 2003 Maruti Grand Vitara XL-7 Maruti Versa: Launched 2004 Maruti Swift: Launched 2005 2006 New

generation Zen (First generation MR Wagon in Japan) to be introduced 2006

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BRAND PORTFOLIO OF THE COMPANY

CLASS BRAND NAME Maruti 800 Maruti Alto City Car Maruti Zen Estilo Suzuki Alto (A-star) Suzuki Splash Super Car mini Maruti Wagon-R Maruti Suzuki Swift Maruti Suzuki SX4 Compact Car Maruti DZiRE Sports Utility Vehicle Suzuki Grand Vitara Maruti Gypsy Maruti Omni Microvan Maruti Versa 2003 2008 2007 1985 1984 The heart car Play it your way King YEAR INTRODUCED 1983 2000 2005 2008 Upcoming model in 2009 1999 2005 2007 For the smarter race You're the fuel Men are back SLOGAN Change your life Let's go Shape your world Stop @ nothing

Fits all The joy of travelling

together

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Manufacturing Markets
Maruti has a strong domestic market presence in India. It has a market share of 47% in the domestic market. The current market share of Indian car industry is given below, Maruti Exports Limited is the subsidary of Maruti Udyog Limited with its major focus on exports and it does not operate in the domestic Indian market. The first commercial consignments 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. Angola, Benin, Djibouti, Ethiopia, Europe, Kenya, Morocco, Sri Lanka, Uganda, Chile, Costa Rica and El Salvador are some of the markets served by Maruti Exports.

23% 46% 17% 14%

MUL Hyundai Tata Others

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Maruti also has markets in other countries depending on export demand. Suzuki is selling cars similar to Maruti in Pakistan and South Asian countries. They have a major non European market which grew 78% in 05- 06. Loss of sales in Europe is due to stoppage of Alto which accounted for 80% of their exports and introduction of Swift. Algeria has emerged as Maruti's largest overseas market with sales growing from a few hundred in FY02 to over 6,500 (FY06). The company says it may cross 9,800 this year. Maruti is quite bullish on markets like, Chile, Morocco, Egypt and Sudan apart from the neighbouring countries. The auto major expects its exports to Chile and Morocco to go above 5,900 and 2,300, respectively, this year. Its volumes from there have moved from under 700 in FY02 to 3,115 (FY06) and exports to Sudan was nil two years back. "In Egypt, our numbers are estimated to grow to over 2,000 and 2,700 this year," according to Mr Khattar. In FY07 it was under 200 few years back. Meanwhile, Maruti is also reporting a high on current year exports to the neighboring countries is on a high too. The company expects to export 9,200 units to Sri Lanka this year, a growth of over 50%, 1,200 units to Nepal, over 1,175 to Bhutan and 700 to Bangladesh. Maruti, which saw exports dip by 29% last fiscal, also plans to launch a new export model during '08-09, which will target the European market. The company targets to export 1, 00,000 units of the model annually. Overall passenger car market registered 24.86% growth Sales of compact cars jumped by 31.2% Mid-size car segment grew slower at 14.7%. The Government's small car policy seems to be yielding results, with the share of compact cars increasing to 68.25 per cent in the April-July 2006 period compared with 64.9 per cent in the same period last year. Not surprisingly, compact cars emerged as the main driver of passenger car growth in the period. While the overall passenger car market increased by 24.86 per cent to 3,24,671 units, sales of compact cars jumped by 31.2 per cent to 2,21,598 units in the April-July 2006 period. In fact, all the three major carmakers (Maruti Udyog, Hyundai Motor, and Tata Motors) saw a sizeable jump in their compact car sales in the period.

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I.

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 gets 70% business from repeat buyers who earlier had owned a Maruti car. Their pricing 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 price point is covered.

Sl.No. BRAND 1 GRAND VITARA 2 MARUTI BALENO

VARIANTS XL7 Lxi Vxi LX VX DX DX2 Lxi Vxi

PRICE IN DELHI (Rs.) 16,97,000.00 5,72,000.00 6,42,000.00 4,66,000.00 5,39,000.00 4,19,000.00 4,58,000.00 3,95,000.00 4,05,000.00

MARUTI ESTEEM

MARUTI VERSA

MARUTI SWIFT

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Zxi 6 MARUTI WAGON-R LX Lxi AX Vxi VXi ABS 7 MARUTI GYPSY ST HT 8 MARUTI ZEN D LX Lxi Vxi 9 MARUTI OMNI CARGO CARGO LPG 5 SEATER

4,85,000.00 3,35,000.00 3,62,000.00 4,63,000.00 3,87,000.00 4,20,000.00 5,06,000.00 5,29,000.00 3,58,000.00 3,41,000.00 3,68,000.00 3,93,000.00 2,05,000.00 1,83,000.00 2,27,000.00

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8 SEATER XL 5 SEATER XL 8 SEATER 10 MARUTI ALTO MARUTI ALTO STANDARD LX Lxi STD. MPFI A/C MPFI

2,21,000.00 2,19,000.00 2,31,000.00 2,38,000.00 2,74,000.00 2,94,000.00 2,14,000.00 2,37,000.00

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MARUTI 800

Sundaram to bring this service for its customers. From identifying the most suitable car coverage to virtually hassle-free claim assistance it's your dealer who takes care of everything. Maruti Insurance is a hassle-free way for customers to have their cars repaired and claims processed at any Maruti dealer workshop in India.

II.

TRUE VALUE INITIATIVE TO CAPTURE USED CAR MARKET

Another significant development is MUL's entry into the used car market in 2001, allowing customers to bring their vehicle to a 'Maruti True Value' outlet and exchange it for a new car, by paying the difference. They are offered loyalty discounts in return. This helps them retain the customer. With Maruti True Value customer has a trusted name to

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entrust in a highly unorganized market and where cheating is rampant and the biggest concern in biggest driver of sale is trust. Maruti knows its strength in Indian market and has filled this gap of providing trust in Indian used car market. Maruti has created a system where dealers pick up used cars, recondition them, give them a fresh warranty, and sell them again. All investments for True Value are made by dealers. Maruti has build up a strong network of 172 showrooms across the nation. The used car market has a huge potential in India. The used car market in developed markets was 2-3 times as large as the new car market.

III. REPOSITIONING OF MARUTI PRODUCTS

Whenever a brand has grown old or its sales start dipping Maruti makes some facelifts in the models. Other changes have been made from time to time based on market responses or consumer feedbacks or the competitor moves. Here are the certain changes observed in different models of Maruti. Omni has been given a major facelift in terms of interiors and exteriors two months back. A new variant called Omni Cargo, which has been positioned as a vehicle for transporting cargo and meant for small traders. It has received a very good response

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from market. A variant with LPG is receiving a very good response from customers who look for low cost of running. Versa prices have been slashed and right now the lowest variant starts at 3.3 lacs. They decreased the engine power from 1600cc to 1300cc and modified it again considering consumers perception. This was a result of intensive survey done all across the nation regarding the consumer perception of Versa. Esteem has gone through three facelifts. A new look last year has helped boost up the waning sales of Esteem. Baleno was launched in 1999 at 7.2 lacs. In 2002 they slashed prices to 6.4 lacs. In 2003 they launched a lower variant as Baleno LXi at 5.46 lacs. This was to reduce the price and attract customers. Wagon-R was perceived as dull boxy car when it was launched. This made it a big failure on launch. Then further modifications in engine to increase performance and a facelift in the form of sporty looking grills on the roof. Now its of the most successful models in Maruti stable. Zen has been modified four times till date. They had come up with a limited period variant called Zen Classic. That was limited period offer to boost short term sales.Maruti 800 has so far been facelifted two times. Once it came with MPFi technology and other time it came up with changes in front grill, head light, rear lights and with round curves all around

IV. CUSTOMER CENTRIC APPROACH

Marutis customer centricity is very much exemplified by the five times consecutive wins at J D Power CSI Awards. Focus on customer satisfaction is what Maruti lives with. Maruti has successfully shed off the public- sector laid back attitude image and has inculcated the customer-friendly approach in its organization culture. The customer centric attitude is imbibed in its employees. Maruti dealers and employees are answerable to even a single customer complain. There are instances of cancellation of dealerships based on customer feedback.

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Maruti has taken a number of initiatives to serve customer well. They have even changed their showroom layout so that customer has to walk minimum in the showroom and there are norms for service times and delivery of vehicles. The Dealer Sales Executive, who is the first interaction medium with the Maruti customer when the customer walks in Maruti showroom, is trained on greeting etiquettes. Maruti has proper customer complain handling cell under the CRM department. The Maruti call center is another effort which brings Maruti closer to its customer. Their Market Research department remains on its toes to study the changing consumer behaviour and market needs.Maruti enjoys seventy percent repeat buyers which further bolsters their claim of being customer friendly. Maruti is investing a lot of money and effort in building customer loyalty programmes.

V. COMMITTED TO MOTORIZING INDIA

Maruti is committed to motorizing India. Maruti is right now working towards making things simple for Indian consumers to upgrade from two-wheelers to the car. Towards this end, Maruti partnerships with State Bank of India and its Associate Banks took organized finance to small towns to enable people to buy Maruti cars. Rs. 2599 scheme was one of the outcomes of this effort.

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Maruti expects the compact cars, which currently constitute around 80% of the market, to be the engine of growth in the future. Robust economic growth, favorable regulatory framework, affordable finance and improvements in infrastructure favor growth of the passenger vehicles segment. The low penetration levels at 7 per thousand and rising income levels will augur well for the auto industry. Maruti is busy fine-tuning another innovation. While researching they found that rural people had strange notions about a car - that the EMI (equated monthly instalments) would range between Rs 4,000 and Rs 5,000. That, plus another Rs 1,500-2,000 for monthly maintenance, another Rs 1,000 for fuel (would be the cost of using the car). To counter that apprehension, the company is working on a novel idea. Control over the fuel bill is in the consumer's hands. But, maintenance need not be. Says Khattar: "What the company is doing now is saying how much you spend on fuel is in your hands anyway. As far as the maintenance cost is concerned, if you want it that way, we will charge a little extra in the EMI and offer free maintenance."

VI. DISINVESTMENT AND IPO OF MARUTI UDYOG LIMITED

It was a long and tough journey, but a rewarding one at the end. A reward worth Rs 2,424 crore, making it the biggest privatization in India till date. The size of Marutis sell- off deal is proof of its success. On the investment of Rs 66 crore it made in 1982, when Maruti Udyog Limited (MUL) was formally set up, the sale represents a

37

staggering return of 35 times The best part of the deal is the Rs 1,000 crore control premium the Government has been able to extract from Suzuki Motor Corporation for relinquishing its hold over Indias largest car company. Now looking at the strategy point of it for Suzuki, of course, complete control of MUL means a lot. Maruti is its most profitable and the largest car company outside Japan. Suzuki will now be in the drivers seat and will not have to mind the whims and fancies of ministers and bureaucrats. Decisions will now become quicker. The response to changing market conditions and technological needs will be faster, says Jagdish Khattar, managing director, MUL. After the disinvestment Suzuki became the decision maker at MUL. They flowed fund in India for the major revamp in MUL. Quoting from the report that appeared in The Economic Times, 4th April 2005, The Indian car giant Maruti Udyog Limited has finalized its two mega investment plans a new car plant and an engine and transmission manufacturing plant. Both the projects will be implemented by two different companies. At its meeting the company's board approved a total investment of Rs3,271.9 crore for these two ventures, which will be located in Haryana. The above signifies when GOI was a major stakeholder in the MUL strategies which lead to investment have had a bureaucracy factor in it but after the disinvestment strategy followed is a TOP DOWN approach with a fast implementation. Suzuki's proposed two-wheeler facility in India, would start making motorcycles and scooters by the end of 2005 through a joint venture, in which Maruti has 51 per cent stake. The two-wheeler unit will have a capacity of 250,000 units a year. The disinvestment followed by IPO gives the insight in the fact that now all the strategic decisions are taken by Maruti Suzuki Corporation. Disinvestment had helped by removing the red tape and bureaucracy factor from its strategic decision making process.

38

VII. REALISATION OF IMPORTANCE OF VEHICLE MAINTENANCE SERVICES MARKET

In the old days, the company's operations could be boiled down to a simple three-box flowchart. Components came from the 'vendors' to the 'factory' where they were assembled and then sent out to the 'dealers'. In this scheme, you know where the company's revenues come from. The new scheme is more complicated. It revolves around the total lifetime value of a car.

39

Work on this began in 1999, when a MUL team, wondering about new revenue streams, traveled across the world. Says R.S. Kalsi, general manager (new business), MUL: "While car companies were moving from products to services, trying to capture more of the total lifetime value of a car, MUL was just making and selling cars." If a buyer spends Rs 100 on a car during its entire life, one-third of that is spent on its purchase. Another third went into fuel. And the final third went into maintenance. Earlier, Maruti was getting only the first one-third of the overall stream. As the Indian market matured, customers began to change cars faster. Says Kalsi: "So the question was, if a car is going to see three users in, say, a life span of 10 years, how can I make sure that it comes back to me each time it changes hands ? So Maruti has changed gears to take a big share of this final one-third spent on maintenance. Maintenance market has a huge market potential. Even after having fifty lakh vehicles on road Maruti is only catering to approximately 20000 vehicles through its service stations everyday. For this they are conducting free service workshops to encourage consumers to come to their service stations. Maruti has increased its authorized service stations to 1567 across 1036 cities. Every regional office is having a separate services and maintenance department which look after the growth of this revenue stream.

VIII. PLAYING ON COST LEADERSHIP

Maruti is the price dictator in Indian automobile industry. Its the low cost provider of car. The lowest car on road is from Maruti stable i.e. Maruti 800. Maruti achieves this through continuous improvements in operational efficiency and productivity. The company has set itself (and its vendors) the target of a 50% improvement in productivity and a 30% reduction in costs in three years. The ability to keep lowering the

40

prices sets Maruti apart from other players in the league. Maruti spread the overheads over a larger base. The impressive sales and profits were the result of major efforts within the company. Maruti also increased focus on vendor management. Maruti consolidated its vendor base. This has provided its vendors with higher volumes and higher efficiencies. Maruti does that by working with vendors, assuring them that for every drop in price, volumes will go up. Maruti is now encouraging its vendors to develop R&D capability for specialized components. Based upon such activities, product competitiveness in the market will further increase. Maruti also made strides in applying IT to manufacturing. A new Vehicle Tracking System improved efficiency on the shop floor and enhanced quality control. The e Nagare system, adopted from Suzuki Motor Corporation, smoothened Marutis Just In Time operations.

MAJOR FUTURE STRATEGIES

I. PHASING OUT ZEN IN 2007-

The launch of Swift and phasing out Zen is a strategic move. Alto was launched keeping in mind that it will take over Maruti 800 market in future. Perhaps being the flagship product phasing out of Maruti 800 faced lots of resistance from dealers all over. Another

41

reason behind not phasing out Maruti 800 was the fear of brand shift of customers to other competitors product. Swift was launched in May, 2005 in the price band starting from 4 lacs. Before launch of Swift Maruti management had decided that they will phase out Zen since it had already came up with two modifications. The major reason behind this decision was cannibalization of Wagon R and Swift due to overlapping of price band. It is a rational decision to kill a product before it starts facing the decline stage in product cycle. Maruti is offering Rs. 3000.00 more margins to dealer on the sale of Wagon-R as compared to Zen. This is to let dealer push Wagon R instead of Zen.

II.

MARUTI PLANS FOR A BIG DIESEL FORAY

The new car manufacturing company, called Maruti Suzuki Automobiles India Limited, will be a joint venture between Maruti Udyog and Suzuki Motor Corporation holding a 70 per cent and 30 per cent stake respectively. The Rs1,524.2 crore plant will have a capacity to roll out 1 lakh cars per year with a capacity to scale up to 2.5 lakh units per annum. The new car manufacturing plant will begin commercial production by the end of 2010. Maruti would set up a diesel engine plant at Gurgaon in line with its plan to become a major player in diesel vehicles in a couple of years. This has been done in the wake of major competition from Tata Indica and meets the growing demand of diesel cars in India. While the annual growth in the diesel segment was 13 per cent in the last three years, it was 19-20 per cent in the first quarter (April-June) of the current fiscal. Maruti has currently an insignificant presence in diesel vehicle. It will manufacture new generation CRDI (common rail direct injection) engines in collaboration with Fiat-GM Opel and engines will be of 1200 cc. The plant with a capacity to produce one lakh diesel engines would be operational in 2006. At present, Peugeot of France, supplies diesel engines for Maruti's Zen and mid-sized Esteem models. This will further reduce

42

the imported component in Maruti vehicles, making them more competitive in the Indian market.

III.

MARUTI

PLANS

FOR

NEW

ENGINE

AND

TRANSMISSION PLANT
The engine and the transmission plant will be owned by Suzuki Power train India Limited in which Suzuki Motor Corporation would hold 51 per cent stake and Maruti Udyog holding the balance. The ultimate total plant capacity would be three lakh diesel engines. However, the initial production would be 1 lakh diesel engines, 20,000 petrol engines and 1.4 lakh transmission assemblies. Investment in this facility will be Rs.1,747.7 crore. The commercial production will start by the end of 2006.

IV.

INDIA AS EXPORT HUB FOR MARUTI

Three years back as an experiment, based on the increasing design capabilities of suppliers in countries like India, McKinsey did an exercise to figure out just how much money could be saved if automobiles were to be made in overseas locations like India, Mexico and South Africa -- an automobile BPO, so to speak. The result was staggering: the industry stands to gain $ 150 billion annually in cost savings, and an additional $ 170

43

billion annually in new revenues once demand shoots up following the drop in prices, and the combination of which means a 25 per cent increase in existing revenue levels. According to the study, over 90 per cent of automobiles today are sold in the countries they are made in, so there's a lot of money to be made by shifting the production overseas. Till recently, just 100,000 cars produced in low-cost countries were exported to high-cost ones -- presumably this figure is going up now that Altos from Maruti, Santros from Hyundai, Indicas from Tata Motors, and Ikons from Ford, among others, are being regularly exported out of India. Yet, as McKinsey points out, since it just costs $ 500 and just three weeks (and both figures are falling) to ship out a car to anywhere in the world, why produce cars in highwage islands? If a car was produced in India instead of in Japan, the study says, it will cost 22-23 per cent less, after factoring in higher import duties for components/steel, lower levels of automation, and transport costs. In August, 2003 Maruti crossed a milestone of exporting 300,000 vehicles since its first export in 1986. Europe is the largest destination of Marutis exports and coincidentally after the first commercial shipment of 480 units to Hungary in 1987, the 300,00 mark was crossed by the shipment of 571 units to the same country. The top ten destination of the cumulative exports have been Netherlands, Italy, Germany, Chile, U.K., Hungary, Nepal, Greece, France and Poland in that order. The Alto, which meets the Euro-3 norms, has been very popular in Europe where a landmark 200,000 vehicle were exported till March 2003. Even in the highly developed and competitive markets of Netherlands, UK, Germany, France and Italy Maruti vehicles have made a mark. Though the main market for the Maruti vehicles is Europe, where it is selling over 70% of its exported quantity, it is exporting in over 70 countries. Maruti has entered some unconventional markets like Angola, Benin, Djibouti, Ethiopia, Morocco, Uganda, Chile, Costa Rica and El Salvador. The Middle-East region has also

44

opened up and is showing good potential for growth. Some markets in this region where Maruti is, are Saudi Arabia, Kuwait, Bahrain, Qatar and UAE.

The markets outside of Europe that have large quantities, in the current year, are 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 year 2003-04 Maruti exports contributed to more than 10% of total Maruti sales.

V.

MARUTI EMERGING AS R&D HUB FOR SUZUKI MOTOR CORPORATION

Japanese auto major Suzuki is all set to convert Maruti Udyog Ltds research and development (R&D) facility as its Asia hub by 2007 for the design and development of new compact cars, according to a top official of the firm. The countrys leading car

45

manufacturer will make substantial investments to upgrade its research and development centre at Gurgaon in Haryana for executing design and development projects for Suzuki. This includes localisation, modernisation and greater use of composite technologies in upcoming models. The company will be hiring more software engineers and technocrats to handle Suzukis R&D projects. Investment would be more in terms of manpower than in infrastructure, which is already in place. Apart from working on innovative features, the R&D teams will focus on latest technologies using CAD-CAM tools to roll out new models that will meet the needs of MULs diverse customers in the future. The reasons as to why it can be good for R&D is that cost. Secondly, India is growing as an export hub along with the Indian market growing aggressively into becoming an attractive one for investors. Thirdly, Suzukis investment in India, is also important as it has completely divested now as a result MUL will now become a 100% subsidiary of Suzuki in the coming year Firstly the cost involved in R&D and infrastructure is low in India as compared to other countries. Also the technical skills are abundantly available; again at a cheaper

ADVERTISING OF MARUTI
Impact of Advertising for Product Presentation Creates awareness Provides Information

46

Generates Association with the audience Helps in creating an image Reaches large audience Develops brand preference Competitive weapon Advertising moves consumers being unaware of a product or service to finally purchasing it.

Advertising Strategy
Start advertising 2 weeks before launch Advertise on all major media TV : 10 Sec Rs. 3,50,000 (Match) 30 sec Rs. 10 to 12 lakh (Prime Time) Magazine : Double page - Rs. 4,03,500 Full Page Rs. 2,02,500 Newspaper : Rs. 75,50,000 Hoardings : Rs. 1,10,000 per month Radio : 10 sec Rs. 5,000 Sponsor cricket matches Promotion at malls Launch around a month before festivals like Diwali or Navratri So it was yesterday when I saw this new advertising campaign or Marketing Campaign of Maruti Suzuki. What followed was a bit of discussion about the

47

Advertising Commercial

amongus. Now, let me first describe the ad as it went

through. It was an Advertising Commercial for the most successful car brand in India Maruti Suzuki. It shows a typical large gathering of a family most probably for a family function. The main characters are a mom, an infant kid, around 4-5 months old and some other relatives. The Advertising Commercial goes as follows: The mom is busy with some work, and the infant kid is somewhere away from her, so that she can see her from a distance, but since she is busy with the work, she is unable to attend to her. The Advertising Commercial starts with showing the mom busy with work and the baby starts crying. So, the mom signals another relative (a lady) to attend the kid. Unfortunately, the kid continues to cry. The lady then passes on the kid to the kid's father (from the gestures between the kid's mom and the male person in the ad, it is apparent that he is the kid's father), but no success. The cycle continues and the kid is passed on from one person or relative to the other (uncle, aunty, grandfather, grandma, etc.) They all try all methods including scolding, singing, etc., but the kid doesnt get quite. At last the kid reaches the mom and there he is happily playing again. The message for the Advertising Commercial comes up on screen: Always take your Maruti Car to the Maruti Authorized Service Network .The ad message is clear- Maruti wants all its customers to utilize the services of its own dealer and service networks, instead of the customers going to other brand services or going toa roadsideunbrandedgarage. Now personally, my first impression after watching this Advertising Campaign was It is a Good Advertising Commercial. However, immediately came a reply from other person kya bakwas commercial hai?.

Before we get into the details, let's observe some good and bad points of this Advertising Commercial Good: - The theme chosen is realistic - Indian Family, Function, everyone is busy, everyone trying a hand to pacify the kid. So the ad does generate a lot of interest - The timeline of ad is perfect - Nobody has been focussed for a longer time. It straightaway gets to the main point to pacify the kid

48

- There is a variety of methods included - someone dancing, singing, making faces, toys and even scolding it all looks perfect - Finally, when the kid reaches the mom, he is happy - everyone wonders what's happening, and there comes the Advertising Commercial Punchline conveying the message. Before we get into the bad part, Just wanted to mention the reaction of others who saw the ad with me. We have a 5 months old baby at my home, and many family members keep him busy and happy, so it was a real life scenario for us. Moreover, mom & dad leave the kid at home in others care, if they have to go out, and the kid stays happily - something contrary to what was shown in the Advertising Commercial. What other members differed were the following points (& the inference that can be derived): - Basically, it's a problem of the kid that he is not happy with other family members. So the kid is at fault - basically meaning that the car is not easy to get repaired if there are any problems, hence its a problem with the car itself. - None of the other family members were able to control the kid - It is true that all family members cannot repair (or even drive a car), but what has that to do with going to the authorized service network ? - Maruti is known for having the biggest network of service stations across the country for car repair and services. But shouldn't it be easy to fix the problems of the car by not any Tom, Dick & Harry from a road side garage, but atleast by some known, reliable garages (like the relatives) Overall, this advertisement campaign appears to be good to me (personal thoughts), but as pointed above, it may be taken in a completely different way by someone else. Remember, our is a country that gives a very high regard to family relations - so anything can be interpreted in any way.

FINANCIAL ANALYSIS OF THE COMPANY Financial highlights

49

Parameters

Q3F09

Q3F08

change

Net sale(Rs Mn) 45126 Other Income Operating (Rs Mn) Other Income Non Operating (Rs Mn) EBITDA (Rs Mn) 4745 Depreciation (Rs Mn) Profit Before Tax (Rs Mn) Profit After Tax (Rs Mn) EPS (Rs) 2136 7.39 4670 16.17 1775 2925 867 6828 105% 57% 54 54% 7839 39% 1777 854 108% 887 853 4% 46540 -3%

SWOT ANALYSIS OF THE COMPANY

STRENGTHS

50

WEAKNESSES OPPORTUNITIES THREATS

STRENGTH
The Quality Advantage
Maruti Suzuki owners experience fewer problems with their vehicles than any other car manufacturer in India (J.D. Power\ IQS Study 2004). The Alto was chosen No.1 in the premium compact car segment and the Esteem in the entry level mid - size car segment across 9 parameters. The J.D. Power APEAL Study 2004 proclaimed the Wagon R no. 1 in the premium compact car segment and the Esteem No.1 in the entry level mid - size car segment. This study measures owner in terms of design, content, layout and performance of vehicles across 8 parameters.

A Buying Experience Like No Other Maruti Suzuki has a sales network of 307 state-of -the-art showrooms across 189 cities, with a workforce of over 6000 trained sales personnel to guide our customers in finding the right car. Our high sales and customer care standards led us to achieve the No.1 nameplate in the J.D. Power SSI Study 2004. Quality Service Across 1036 Cities In the J.D. Power CSI Study 2004, Maruti Suzuki scored the highest across all 7 parameters: least problems experienced with vehicle serviced, highest service quality,

51

best in-service experience, best service delivery, best service advisor experience, most user-friendly service and best service initiation experience. 92% of Maruti Suzuki owners feel that work gets done right the first time during service. The J.D. Power CSI study 2004 also reveals that 97% of Maruti Suzuki owners would probably recommend the same make of vehicle, while 90%owners would probably repurchase the same make of vehicle.

WEAKNESS

52

COMPARATIVELY LESS MILEAGE -This is

also a weakness of maruti Suzuki.

Milage of maruti product is less than other .So this is a big weakness of maruti. ESTABLISH PROPER POLICIES AND PROCEDURE FOR LEAVE PROPER COMMUNICATION OF POLICIES TO WORKERS

ATTITUDE OF SUPERVISOR INSTALLATION OF HIGH CAPACITY GENERATORS

OPPORTUNITIES
ESTABLISH PROPER POLICIES AND PROCEDURE FOR LEAVE PROPER COMMUNICATION OF POLICIES TO WORKERS

53

ATTITUDE OF SUPERVISOR INSTALLATION OF HIGH CAPACITY GENERATORS

THEARTS

54

Maruti has always been identified as a traditional carmaker producing value-for-money cars and right now the biggest hurdle Maruti is facing is to shed this image. Maruti wants to change it for a more aggressive image. Maruti Baleno has failed due to one of the major reasons being that customers could not identify Maruti with a car as sophisticated as Maruti Baleno. Maruti is looking forward to bring about a perception change about the company and its cars.Maruti started the exercise with the new-look Zen, and Suzuki's decision to pick India as one of the first markets for this radically different-looking car gave this endeavor a nethrust. Maruti has also changed its logo at the front grill. It has replaced the traditional Maruti logo on grill stylish M with S. The major thrust in the facelift endeavour is with the launch of 1.3 litre Swift. Its a style statement from Maruti to Indian market. The next threat Maruti faces is the growing competition in compact cars. Companies like Toyota, Ford, Honda and Fiat are planning to come out with small segment cars in near future. Ford is launching Focus and Fiesta, GM is launching Aveo in 2006, Chevrolet is launching Spark in 2006, Hyundai is launching its new compact car in 2006, Honda is launching Jazz in 2006, GM is has reduced prices of its Corsa, Fiat is coming up with Panda and new Fiat Palio, Skoda is launching Fabia. All this will pose a major threat to Maruti leadership in compact cars. New emission norms like Bharat Stage 3 which has come into effect from April 2005 has increased car prices by Rs.20000 and Bharat Stage 4 which is coming into force in 2007 will contribute in increasing car prices further. This could be of concern to Maruti which is low cost provider of passenger cars. Rise in petrol prices and growing popularity of other substitute fuels like CNG will be another threat to Maruti. There is also a threat to Suzuki from R&D investment by Toyota and Honda in Hybrid cars. Hybrid cars could run on both petrol and gaseous fuels. There is a threat to Maruti models ageing. Maruti models like Maruti 800 which is in market for the last twenty years and others like Zen and Esteem which have also entered the decline phase are the other threats. Maruti is planning phasing out Zen in 2007 and there were rumors of phasing out Maruti 800 also. This all makes Suzuki to replace these brands with new launches . As Swift and Wagon R are replacing the Zen market. Maruti

55

will have to keep on makingN modifications in its present models or its models will face extinction.

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RESEARCH METHODOLY

57

Research methodology is a way to systematically solve the research objective. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by researcher in studying his research objective along with logic behind it. It is necessary for the researcher to know not only the research methods/ techniques but also the methodology. Researcher not only need to know how to apply particular research technique, but also need to know which of these methods or techniques are relevant and which are not and what would they mean and indicate and why. All this means that it is necessary for the researcher to design his methodology for his objective under study as the same may differ objective to objective. Thus when we talk of research methodology we not only talk of the research method but also consider the logic behind the methods we use in the context of a research study and explain why we are using a particular method or techniques and so that research results are capable of being evaluated.

SOURCES OF DATA COLLECTION

58

Data collection methods are credible with validated surveys and/or other methods are clearly described such as observational strategies, the data or information is current. The data collection is focused on a limited sample of population and has minimal application in terms of generalization of findings.

Primary Data: It can be collected directly or indirectly. It was done through a

well structured and designed questionnaire which contain 14 number of questions which were asked directly to the peple belonging to Bareilly region.

Secondary Data: It refers to data which have been collected and analyzed by
someone else. It consists of internet and books etc. Secondary data has also been collected through the Hyundai Sales training handout.

Sample Size: A sample size of 50 respondents was taken to conduct the study of Questionnaire.

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SECONDRY SOURCES OF DATA COLLECTION

Data collection methods are credible with validated surveys and/or other methods are clearly described such as observational strategies, the data or information is current. The data collection is focused on a limited sample of population and has minimal application in terms of generalizing the findings.

Secondary Data: It refers to data which have been collected and analyzed by someone else. It consists of internet and books etc. Secondary data has also been collected through the Maruti Sales training handout

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Q1.What age group are you in?

61

18-25 yrs 12%

26-35 yrs 40%

36-45 yrs 32%

Above 45 16%

16%

12%

32%

40%

18-25 Yrs

26-35 Yrs

36-45 Yrs

Above 46 Yrs

Q2.What category of income do you fit into?

62

Below 50,000 8%

50,000-1,00,000 32%

1,00,000-2,50,000 40%

Above 2,50,000 20%

20%

8% 32%

40%

Below 50,000 1,00,000-2,50,000

50,000-1,00,000 Above 2,50,000

Q3.

Which kind or segment of Car do you have?

63

Premium Segment 30%

Utility Segment 45%

Entry Segment 25%

25%

30%

45%

Premium

Utility

Entry

Q4.

What is your main purpose of using a Car?

64

Personal 25%

Business 40%

Status 20%

Leisure 15%

15%

25%

20% 40%

Personal

Business

Status

Leisure

65

Q5. Which factor would you consider the most while buying a Car?

Fuel Efficiency 33%

Image & Brand 24%

Resale Value 18%

Look Style 15%

& Maintenance Availability 5% Of Product 5%

5% 15%

5% 33%

18% 24%

Fuel Eff. Look & Style

Image & Brand Maintenance

Resale Value Av. Of Product

Q6.

What are your main preferences while buying a Car?

66

Brand 20%

Price 25%

Dealers Advice 10%

Features 20%

Service 10%

Promotional Schemes 15%

15% 10%

20%

20% 10%

25%

Brand Dealer's Advice Service

Price Features Promotional Schemes

67

Q7.

Which facilities would you expect while buying?

Low Price 25%

After Sale Service 55%

Incentives 12%

Others 8%

12%

8%

25%

55%

Low Price

After Sale Service

Incentives

Others

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Q8.

Which mode of payment would you prefer while buying a Car?

Lump-Sum 30%

Installment 70%

30%

70%

Lump-Sum

Installment

69 Q9.Do you get spare parts of car easily from the market?

YES 76%

NO 24%

24%

76%

YES

NO

70 Q10.Are you brand loyal?

YES 52%

NO 48%

48% 52%

YES

NO

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Q11.Would you like to buy more premium car in future?

YES 72%

NO 28%

28%

72%

YES

NO

72 Q12.Does celebrity endorsement of a car give it more appeal?

Agree 44%

Strongly Agree 36%

Disagree 8%

Strongly Disagree 4%

Dont Know 8%

8%

4%

8% 44%

36%

Agree Strongly Disagree

Strongly Agree Don't Know

Disagree

73

Q13.Are you satisfied with the after sales service by dealer?

YES 86%

NO 14%

14%

86%

YES

NO

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75

FINDINGS
At Maruti customers are highly satisfied with the range of product and sufficient color choice availability. Customers are highly satisfied with the way products are displayed to them.

Customers are satisfied with the kind of information provided to them about different cars by the sales executives.

Customers are satisfied with the kind of attention they get at Maruti Showroom.

Customers are satisfied with the type of test drive facility provided to them.

Customers are satisfied by the way all the documents and services are explained to them.

Commitment of delivery of vehicle to its customers is appreciated by them.

Customers are satisfied with the delivery process at Sachin Hyundai.

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77

CONCLUSION
Net sale of Maruti-

Based on these factors the various strategic alternatives were evaluated. The areas of strategic thrust which Maruti can concentrate on are identified. The various course of action for these strategic thrust areas and suitable matrixes evaluate them are identified.

78

Strategic Thrusts Increases Scope New product Same market New product New market

Action Tap the huge component & accessories market Enter fast growing CV segment and global platforms Expand geographically Europe and alternate energy

Measures Percentage of sales from new products ROE,ROA

Increase in profitable market share Customer satisfaction Dealer profitability, Percentage of cannibalization Percentage profit for each business unit Number of Maruti 800s sold

Market rationalization Finding rural markets, Online trade Distribution rationalization Wallet shares HOLD ON Concentrate more on customer solution 4 for 2when 1 lac car is introduced Separate dealers based on value

Maruti Suzuki India Ltd (MSIL) has the highest market share in the automobile sector in India. To consolidate and protect its leadership position, the market research team conducts a continuous Brand Track study with an all-India scope. Amongst other things them survey looks at: Brand Awareness, Advertising Recall, Product Experience, Company Image and Competition Analysis.

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80

SUGGESTIONS
Reception is the first point where customer will get the first impression about Maruti showroom and there need to be some improvements at reception as customers are not properly attended over there. Customers are not satisfied with the after sales services so there should be some improvements in order to engage more customers. By improving their rest of the services they can convert their unsatisfied customers into satisfied customers.

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82

LIMITATION
The time period allotted for the study was only of two months, which may provide a deceptive picture in comparison of the study based on long run. Interaction skills as well as the behaviour of the respondents also played as a constraints during the research. Most of the customers were so furious that they refused to part with any information.

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BIBLIOGRAPHY

Maruti Sales Training Handout

www. Google.com

www. Indianautomobileindustry.com

www. maruti.co.in

85

QUESTIONNAIRE
PERSONAL DETAILS:Name: -----------------------------------------------------------------------Occupation: ------------------------------------------------------------Contact No. : -----------------------------------------------------------

1. What age group are you in? 18-25 26-35 36-45 Above 45

2. What category of income do you fit into? Below Rs.50,000 Rs.50,000-Rs.1,00,000 Rs.1,00,000-Rs.2,50,000 Above Rs.2,50,000.

3. Which kind or segment of Car do you have? Premium / Performance Segment Utility / Medium Segment Entry / Economy Segment

4. What is your main purpose of using a Car? Personal Business Status Leisure

86

5. Which factor would you consider the most while buying a Car? Fuel Efficiency Image & Brand Resale Value Look & Style Maintenance Availability of the product

6. What are your main preferences while buying a Car? Brand Price Dealers Advice Features Service Promotional Schemes

7. Which facilities would you expect while buying? Low Price Incentives After Sales Service Others _______________

8. Which mode of payment would you prefer while buying a Car? Lump-sum Installment

9. Do you get the spare-parts of your Car easily from the market? Yes No

10. Are you Brand Loyal? Yes No

11. Would you like to buy more premium Car in future? Yes No

12. Does Celebrity Endorsement of a Car gives it more appeal? 1 Strongly Agree 2 Agree 3 Dont Know 4 Disagree 5 Strongly Disagree

13. Are you satisfy with the after sales service by dealer? Yes No