PROJECT REPORT ON Product Strategy of Maruti Suzuki

M. Com PART I SEMESTER II

Submitted by SADIA SHAIKH ROLL NO. 119

Under the guidance of DR. (MRS.) MEETA PATHADE

Submitted to UNIVERSITY OF MUMBAI In partial fulfilment of the required for the award of degree Master of Commerce Business Management

GURU NANAK KHALSA COLLEGE OF ARTS, COMMERCE & SCIENCE Nathalal Parekh Marg, Matunga (E), Mumbai 400 019

2013-14
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CERTIFICATE

This is to certify that the project titled product strategy of Maruti Suzuki is true and satisfactory work done by Sadia Shaikh, M. Com Part I, Semester II, Roll no. 119. The project report is submitted to the University of Mumbai in partial fulfilment of the requirements of the award of the degree of M. Com Part I, for the academic year 2013-14.

Signature of the Project Guide Examiner

Signature of the External

Signature of the Co-ordinator

Signature of the Principal

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ACKNOWLEDGEMENT

At the outset, I am thankful to the University of Mumbai for offering the project in the syllabus. I would like to thank the Principal Dr. Ajit Singh of the College for giving me the opportunity for pursuing M. Com Part I Semester II programme from the esteemed College. I would like to thank our M. Com programme Co-ordinator, Prof. Sameer Velankar for providing us the necessary help and support in carrying out our project work. I would like to thank my project guide, Dr. (Mrs.) Meeta Pathade in giving me the valuable guidance and suggestions in completion of my project work. It would not have been possible for me to complete the task without their help and guidance. I must mention my hearty gratitude towards other faculties, my family, and friends who supported me to go ahead with the project.

I hereby acknowledge all those who directly or indirectly helped me to draft the project report.

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DECLARATION

I, Sadia Shaikh of GURU NANAK KHALSA COLLEGE OF ARTS, COMMERCE & SCIENCE pursuing M. Com Part I specialization in Business Management hereby declare that I have completed the project on Product strategy of Maruti Suzuki in the academic year 2013-14 for the Semester - II programme.

The information submitted is true and original to the best of my knowledge.

Signature of the Student, SADIA SHAIKH

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INDEX Sr.no. I II III 1. 2. 3. 4. 5. 6. 7. 8. Table of content CERTIFICATE ACKNOWLEDGEMENT DECLARATION INTRODUCTION TO MARUTI SUZUKI PRODUCT &SERVICES OF MARUTI SUZUKI PRICING STRATEGY OF MARUTI SUZUKI MARKETING STRATEGY OF MARUTI SUZUKI PRODUCT KIFE CYCLE OF MARUTI SUZUKI PRODUCT MIX OF MARUTI SUZUKI PRODUCT LINE OF MARUTI SUZUKI NEW PRODUCT DEVELOPMENT OF MARUTI SUZUKI 9. 10. CONLUSION BIBLIOGRAPHY 34 35 Page no. 2 3 4 7 11 15 18 23 25 27 29

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GRAPHS

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CHAPTER 1 INTRODUCTION TO MARUTI SUZUKI

Maruti Suzuki India Limited (/M

i Suzuki/), commonly referred to as Maruti and

formerly known as Maruti Udyog Limited, is an automobile manufacturer in India. It is a subsidiary of Japanese automobile and motorcycle manufacturer Suzuki. As of November 2012, it had a market share of 3percent of the Indian passenger car market. Maruti Suzuki manufactures and sells a complete range of cars from the entry level Alto, to the hatchback Ritz, A-Star, Swift, Wagon R, Zen and sedans DZire, Kizashi and SX4, in the 'C' segment Eeco, Omni, Multi Purpose vehicle Suzuki Ertiga and Sports Utility vehicle Grand Vitara.

1.1 Maruti suziki

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The company's headquarters are on Nelson Mandela Road, New Delhi. In February 2012, the company sold its ten millionth vehicle in India.

1.2 Headquarter HISTORY

Originally, 18.28percent of the company was owned by the Indian government, and 54.2percent by Suzuki of Japan. The BJP-led government held an initial public offering of 25percent of the company in June 2003. As of May 200, the government of India sold its complete share to Indian financial institutions and no longer has any stake in Maruti Udyog. Maruti Udyog Limited (MUL) was established in February 1981, though the actual production commenced in 1983 with the Maruti 800, based on the Suzuki Alto kei car which at the time was the only modern car available in India, its only competitors - the Hindustan Ambassador and Premier Padmini - were both around 25 years out of date at that point. Through 2004, Maruti Suzuki has produced over 5 Million vehicles. Maruti Suzukis are sold in India and various several other 8|Page

countries, depending upon export orders. Models similar to those made by Maruti in India, albeit not assembled or fully manufactured in India or Japan are sold by Pak Suzuki Motors in Pakistan. The company exports more than 50,000 cars annually and has domestic sales of 30,000 cars annually. Its manufacturing facilities are located at two facilities Gurgaon and Manesar in Haryana, south of Delhi. M i S z kis G g on f cili y has an installed capacity of 900,000 units per annum. The

Manesar facilities, launched in February 200 comprise a vehicle assembly plant with a capacity of 550,000 units per year and a Diesel Engine plant with an annual capacity of 100,000 engines and transmissions. Manesar and Gurgaon facilities have a combined capability to produce over 14, 50,000 units annually. About 35percent of all cars sold in India are made by Maruti. The company is 54.2percent owned by the Japanese multinational Suzuki Motor Corporation per cent of Maruti Suzuki. The rest is owned by public and financial institutions. It is listed on the Bombay Stock Exchange and National Stock Exchange of India. During 200 and 2008, Maruti Suzuki sold 64,842 cars, of which 53,024 were exported. In all, over six million Maruti Suzuki cars are on Indian roads since the first car was rolled out on 14 December 1983.

BEGINNINGS
Maruti's history begins in 190, when a private limited company named 'Maruti technical services private limited' (MTSPL) is launched on November 16, 190. The stated purpose of this company was to provide technical know-how for the design, manufacture and assembly of "a wholly indigenous motor car". In June 191, a company called 'Maruti limited' was incorporated under the Companies Act and Sanjay Gandhi became its first managing director. After a series of scandals, "Maruti Limited" goes into liquidation in 19. This is followed by a commission of inquiry headed by Justice A. C. Gupta, which submits its report in 198. On 23 June 1980 Sanjay Gandhi dies when a private test plane 9|Page

he was flying crashes. A year after his death, and at the behest of Indira Gandhi, the Indian Central government salvages Maruti Limited and starts looking for an active collaborator for a new company: Maruti Udyog Ltd being incorporated in the same year.

SUZUKI ENTERS
In 1982, a license and Joint Venture Agreement (JVA) is signed between Maruti Udyog Ltd. and Suzuki of Japan. At first, Maruti Suzuki was mainly an importer of cars. In India's closed market, Maruti received the right to import 40,000 fully built-up Suzukis in the first two years, and even after that the early goal was to use only 33percent indigenous parts. This upset the local manufacturers considerably. There were also some concerns that the Indian market was too small to absorb the comparatively large production planned by Maruti Suzuki, with the government even considering adjusting the petrol tax and lowering the excise duty in order to boost sales. Finally, in 1983, the Maruti 800 is released. This 96 cc hatchback is based on the SS80 Suzuki Alto nd is Indi s fi s affordable car. Initial product plan is 40percent saloons, and 60percent Maruti Van. Local production commences in December 1983. In 1984 the Maruti Van, with the same three-cylinder engine as the 800, is released. Installed capacity of the plant in Gurgaon, reaches 40,000 units.

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1.3 Suzuki Alto

In 1985 the Suzuki SJ410-based Gypsy, a 90 cc 4WD off-road vehicle, is launched. In 1986 the original 800 is replaced by an all-new model of the 96 cc hatchback Suzuki Alto/Fronte. This is also when the 100,000th vehicle is produced by the company. In 198 follows the company's first export to the West, when a lot of 500 cars were sent to Hungary. Maruti products had been exported to certain neighboring countries already. By 1988, the capacity of the Gurgaon plant is increased to 100,000 units per annum.

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CHAPTER 2 PRODUCT & SERVICES Current automobiles

Maruti Omni

Maruti Gypsy

India's Corps of Military Police personnel patrolling the Wagah border crossing in the Punjab in a Maruti Gypsy.

Maruti Suzuki Zen Estilo

Maruti Suzuki Swift

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Suzuki SX4

Maruti Suzuki A-Star

Maruti Suzuki Swift DZire

Maruti Suzuki Ritz

1. 800 (1983) (still distributed to some cities like Guwahati) Competes with Tata Nano, Maruti Alto and Maruti Omni 2. Omni (launched 1984) Competes with Tata Nano, Tata Venture, Maruti 800 and Maruti Eeco 3. Gypsy King (launched 1985) India's first indegenious vehicle and first compact SAV, competes with Mahindra Thar CRDe, Tata Sumo 4x4 and Force Gurkha

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4. WagonR (launched 1999) Competes with Nissan Micra Active, Maruti A-star andHyundai i10 5. Swift (launched 2005) Created a Maruti 800 rivalling benchmark, competes with Tata Vista, Hyundai i20, Skoda Fabia, Volkswagen Polo and Toyota Etios Liva 6. SX4 (launched 200) Soon to be replaced by the upcoming sedan codenamed YL1, competes with Ford Fiesta, Hyundai Verna, Honda City, Skoda Rapid, Volkswagen Vento, Renault Scala and Nissan Sunny 7. Swift DZire (launched 2008) Competes with Mahindra Verito, Toyota Etios, Ford Classic, Mahindra Verito Vibe, Honda Amaze, Chevrolet Sail, Skoda Fabia and Tata Manza 8. A-star (launched 2008) Competes with Chevrolet Beat, Nissan Micra Active, Ford Figo and Maruti Wagon-R Stingray 9. Ritz (launched 2009) Competes with Maruti Swift, Tata Vista, Hyundai Grand i10, Honda Brio, Nissan Micra, Renault Pulse and Toyota Etios Liva 10. Eeco (launched 2010) Stripped down Versa with a lowered roof, in competition with Tata Venture, Tata Winger Platinum, and in-house Omni 11. Alto K10 (launched 2010), competes in the economy class with the Tata Indica, Hindustan Motors Ambassador and Chevrolet Spark 12. Maruti Ertiga (launched 2012), seven seater MPV R3 designed and developed in India, in competition with Toyota Innova, Mahindra Xylo, Nissan Evalia, Ashok Leyland Stile and

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Tata Sumo Grande. In early 2012, Suzuki Ertiga will be exported first to Indonesia in Completely Knock Down car. 13. Maruti XA Alpha based compact SUV to compete with the Ford EcoSport, Mahindra Xylo Quanto, Nissan Terrano & Renault Duster will be launched in the year 2014 14. Maruti Alto 800, launched in 2012, Competes with Tata Nano 15. Maruti Stingray, launched in 2013, Competes with Maruti A-star, Chevrolet Beat and Chevrolet Sail Imported automobiles.

Suzuki Grand Vitara

1. Grand Vitara (launched 200) 2. Kizashi (launched 2011) Discontinued automobiles 1. Gypsy E (19852000) 2. 1000 (19902000) 3. Zen (19932006) Replaced by the Zen Estilo 4. Esteem (19942008) Replaced by the Swift DZire 5. Baleno (1999200) Replaced by the SX4 sedan 6. Baleno Altura (19992003) 15 | P a g e

7. Versa (20012010) Replaced by the Eeco 8. Grand Vitara XL (2003200) Replaced by the compact Escudo/Vitara 9. 800 (1983-2012) Replaced by the Alto 800 10. Alto (2000-2012) Replaced by the Alto 800 11. Zen Estilo (20062013)

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CHAPTER 3 PRICING STRATEGY

Maruti Suzuki follows a very interesting price strategy for the Ertiga petrol and diesel MPVs
A he o se , he es h mb le if yo e pl nning o b y pe ol o c in he ne pe ol c f eb e si ing on he nning is

fence on whe he o go fo

diesel engined c . B y

if yo e mon hly

about 500 to 600 kilometers. Anything more than this, a diesel car would be a better bet for you even if it is pricier when compared to petrol cars. Talking of pricing, Maruti Suzuki seems to be following a very interesting pricing strategy with the recently launched 2012 Ertiga compact MPV. Maruti has priced the base petrol Ertiga at INR 5.89 lakhs and the base diesel model at INR .30 lakhs, which means that there is a yawning gap of about 1.4 lakh rupees, which is a considerable sum of money indeed.

Maruti Ertiga MPV

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Now, there could be two reasons for Maruti choosing to price the petrol and diesel variants of the Ertiga so wide apart. One of course is the fact that Maruti could be trying to push sales of the petrol engined model as more and more car buyers are opting for diesel engined cars. To give you a perspective on how wide

this growing chasm between petrol and diesel engined cars has been over the past year or so, out of every 10 Swift hatchbacks Maruti sells, 8 of them are diesel engined models and only 2 are petrol powered. And, it is a similar story with other car makers in India as well.

Ertiga 3 Quarters View This big tilt towards diesel cars means that Maruti is stuck up with petrol engine inventory and plant c p ci y. The efo e, he E ig s p icing s egy m y be move by he co n ys l ges c m ke o

encourage sales of petrol engined cars for better capacity utilization. The other angle to this story is of course the fact that Maruti could be using the petrol-diesel divide to make hay even as the diesel powered

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sun shines, pun definitely intended there. The higher price of the diesel engined Ertiga in addition to brisk sales is expected to make this latest MPV in India a very profitable venture for Maruti.

Ertiga Second Row Seats

Ertiga Second and Third Row Seats

Ertiga Dashboard

The just launched Ertiga comes with a 1.4 Liter petrol K-series engine good for 95 Bhp-130 Nm and a 1.3 Liter Fiat Multijet diesel engine rated at 90 Bhp-200 Nm. Both these engines are paired with a 5 speed

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manual gearbox. The Ertiga is available in 5 and seat options in three variants each, for the petrol and diesel engines. The Ertiga shares its interiors and dashboard with the new Swift hatchback and this has ensured that material quality if of high order. The Ertiga petrol is rated at an ARAI certified mileage of 16.02 Kmpl while the diesel model is touted to deliver 20. Kmpl.

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CHAPTER 4 MARKETING STRATEGY OF MARUTI SUZUKI

Maruti Suzuki India Ltd. is a leading manufacturer of four-wheelers in India. Born in 1983 with the mission to motorise India, Maruti was a joint venture between Government of India and Suzuki Motor Corporation, Japan. It quickly grew into the largest compact car making company of India and remained so till 2004. The company started with Suzuki holding the minor stakes of the company while Government of India holding the major stakes. As of present, Government of India has disinvested its stakes in the company completely, and handed over the management of company to Suzuki Motor Corporation. Today, Maruti and its partners employ more than 5,000 employees. Its manufacturing facilities are located at two locations, Gurgaon and Manesar, both south of New Delhi.

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

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PRICING STRATEGY
The price is the amount a customer pays for the product. It is fixed after considering various factors such as market share, competition, material costs, product identity and the customer's perceived value of the product. The business may increase or decrease the price of product if other stores have the same product. The price decision is very sensitive and for that special care is to be taken to get the competitive edge. There are various factors to determine a price of a car, such as market condition, cost incurred to build a car, profit by company, dealer p ofi . The comp nys p icing s egies e s ch h eve y c s ome c n own c o

upgrade to another one of his or her choice. The company offered a different model at a price difference of around 10,000. It follows a price-point-strategy wherein they have products available in almost all possible price points.

Table 1: Models with Price Range Car Models (Maruti) Maruti 800 Maruti A-Star Maruti Alto 800 Maruti Alto K10 Maruti Eeco Maruti Ertiga Maruti Grand Vitara Maruti Gypsy Maruti Kizashi Price Range (Rs.) 2, 10, 02 - 2, 32,610 3, 81, 11 - 4, 66,219 2,42,5 3,56,5 3, 21,358 - 3, 34,598 3, 05, 65 - 4, 10,893 5, 98, 90 - 8,0,90 22, 68,064 - 24, 60,529 5, 51,409 - 6, 01, 05 16, 52, 85 - 1, 52, 85
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Maruti Omni Maruti Ritz Maruti Swift Maruti Swift Dzire Maruti SX4 , Maruti Wagon R Maruti Zen Estilo

2, 1,655 - 2, 82,013 4, 32, 23 - 6, 33,612 4, 48,893 - 6,8,68 4, 92,354 - , 50,483 38,114 - 9,9,86 3, 5,880 - 4, 44, 64 3, 45,829 - 4, 36,136

Maruti 800 is the lowest price model of this company. Grand Vitara is the high price model of the company. DISTRIBUTION STRATEGY
Distribution strategy of a firm is a plan created by the management of a manufacturing business that specifies how the firm wishes to transfer its products to intermediaries, retailers and end consumers. Maruti Suzuki has two manufacturing facilities in India. Both manufacturing facilities have a combined production capacity of 14,50,000 vehicles annually. Maruti has a strong dealer network. Infact it was one of the very first companies in the country to understand the importance of after sales service in high involvement products like cars. It has the largest distribution & Service network comprising of over 400 sales showrooms, over 600 dealer workshops, and 1900 Authorized Service Stations spanning across over 1190 cities unparalleled in the country. It has 30 Express Service Stations on 30 National Highways across 1,314 cities in India. Most of the service stations are managed on franchise basis where Maruti trains the local staff. To increase their reach to rural India, where setting up a complete dealership was very difficult, they opened extension counters
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which are operated by some dealer in the city thereby ensuring increased customer touch points without risking the viability of the dealers.

PROMOTION STRATEGY
The promotion includes all communications a marketer used in the market for his products and services to create awareness, to persuade the customers, to buy and retain in future also. For improvement in the position of sales or progress of business this method is used. The message is given to target group regarding the features and benefits of the products or services. Without communication, the features, benefits and schemes would not be known to the customers and objectives of launching of products or services and increasing sales would not be completed. When communication creates awareness then only the interest would be created and customers would take the decision for buying. For promotion different methods of communication can be used. The promotional strategy of Maruti Suzuki is very effective. The company emphasise on road safety and environment friendly products. The company has launched road safety mission under which 5,00,000 people will be trained in the next three years. This will be done through two channels - Institute of Driving Training and Research (IDTR) and the Maruti Driving Schools spread across the country. Of the 5, 00,000 people to be trained, at least 1,00,000 will be people from underprivileged section of society, who are keen to take driving as a profession. The company has always promoted the concept of "Reduce, Reuse, Recycle" (3R's). The company has taken help of all the promotional tools like radio, television, road shows, print media, workshops and seminars to promote their cars 6.1 ROAD SHOWS: The Company organizes road shows to display vehicles in the pavilions during various college festivals and exhibition.
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6.2 RADIO: Radio is one of the biggest medium to communicate. The company goes for radio announcements to convey about the product features, price, qualities, etc. 6.3 PRINT MEDIA: The company also promotes with the help of print media .Advertisement is given in leading newspapers as well as they distribute brochures and leaflets at public places to reach the customers. At times they organize workshops and seminars to display their models and they also offer test drive. The company also advertises through banners and posters.

4.1 Marketing mix

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CHAPTER 5 PRODUCT LIFE CYCLE Product life cycle is a business analysis that attempts to identify a set of common stages
in the life of commercial products. In other words the 'Product Life cycle' PLC is used to map the lifespan of the product such as the stages through which a product goes during its lifespan.

5.1 Product life cycle

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1. Introduction stage:
When the product is launched onto the market sales may start slow or increase relatively quickly. Advertising may be vigorous at this stage also. During this period of introduction, promotional expenses bear the highest proportion of sales."The product's costs rise sharply as the heavy expense of advertising and marketing any new product begins to take its toll. For cars like Alto K10 and kizashi market share is slight but marketing costs are high.

2. Growth stage:
If the product is popular with consumers, then sales will start to rise. It may be a rapid growth or a slower one. Rapid growths than fall away just as quick are called 'Fads'. Advertising is often still heavy at this point. Swift desire, Zen Estillo and SX4 are characterized by rapid growth in sales and profit.

3. Maturity stage:
Once the product is well established and consumers are satisfied, then the product is widely accepted and growth slows down. Before long, however, a successful product in this phase will come under pressure from competitors. The producer will have to start spending again in order to defend the product's market position or introduce extension strategies. It may only be in the Maturity stage where companies will received a return on their original expenditure and investment due to potentially high start up and development costs.

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 In case of Alto Wagon r and Swift competition is and any significant move is likely to be copied by competitors.

4. Decline stage:
Sooner or later sales fall due to changes in consumer tastes or new choices available from competitor's products. Again, extension strategies may be open to the company to keep the product alive.

Market for Baleno and Esteem is shrinking thus reducing the overall profit.

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CHAPTER 6 PRODUCT MIX

Product mix is defined as all of the products or product lines offered by a firm. The mix is defined by the industry and manufacturing environment as well as management strategies that place the company as a specialty, niche or multinational supplier of goods and services.s

The Product mix is the total variety of products a firm sells. Some firms will sell just one product, whilst others will sell a large number of different products. For example Samsung's product mix includes mobile phones, netbooks, tablets, televisions, fridges, microwaves, printers and memory cards. Firms should select their product mix carefully as they will need to generate a profit from each of the products in the product mix.

Maruti Suzuki's strong rebound from a low sales volume base in the quarter to December took the Street completely by surprise. The company's stock price, which is already amongst the most expensive in the automobile industry with a trailing price-to-earnings (or P/E) of close to 30, gained over 4percent in value after the results. With its recently-launched utility vehicle, Ertiga, hitting the right chord with customers and the company growing strength in the passenger car segment, Maruti Suzuki's net realisations improved smartly by 16percent year-on-year and 4percent sequentially to Rs 3.63 lakh per vehicle. This is by far the best quarterly realisation by the company in the past two years. While the topline y-o-y growth of 45percent was in line with Street expectations as the company sold 26percent more vehicles this quarter compared to the previous year due to a production halt at its Manesar plant in October last year, a significant improvement in its earnings before interest, depreciation and tax or EBITDA took the Street by surprise. A better
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Product mix led by strong sales of Ertiga and Swift Dzire, improved export realisations with the yen weakening against the dollar and frequent price hikes undertaken by the company helped to offset the impact of rising input costs. Input costs for the quarter were also lower in relation to sales given the company's continuous cost-reduction efforts. Raw material cost, as a percentage to sales, for the quarter, was lower by 136 bps to 5percent compared to a year ago. Cost reduction was also evident on the labour front as employee cost in relation to sales fell by more than 50 basis points to 2.2percent. Maruti has also improvised on its other expenditure, which was 11.percent of sales in December '12 quarter against 13.4percent of sales a year ago. A strong topline growth coupled with reduced costs helped the company post 8percent EBITDA margins for the quarter, higher by close to 300 bps compared to a year ago.

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6.1 Product mix & product line

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CHAPTER 7 PRODUCT LINE

A product line refers to a number of products that are related and developed by the same manufacturer. Product lines are not to be confused with product bundling, which combines various items into one type of product. Items within a product line generally share the same basic theme, and with the help of a successful marketing plan these products can be entirely effective. Frequently, a product line includes different products that are offered to the public at varying price points. This way, a manufacturer or company can ensure that all products within a line will be purchased by all kinds of people. Product line extension refers to any additional products that may be added to a current product line.

Most of the time, product extensions are introduced to the public in order to ward off competitors. By creating products that match other, competitive products, manufacturers are able to keep customers interested in a product that they are familiar with. Since most people purchase brands that they know, these same consumers are more likely to purchase a new product from a brand that they are comfortable with rather than purchase a product from an unknown brand.

The country's largest car maker Maruti Suzuki India (MSI) on Wednesday said that it will launch an upgraded variant of the Swift by the end of next year. The 3rd generation Suzuki Swift was unveiled earlier this year in Hungary. Pics: New Suzuki Swift during launch in Hungary

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Maruti said that it will reorient the production of 'Swift' and 'DZiRE' in its two facilities at Gurgaon and Manesar to enhance output. Swift is positioned as Suzuki's latest world strategic model. The Swift was first unveiled by Suzuki in 2005 with a sporty sub-compact design. As per the plan, the company will shift the entire assembly of its sedan 'DZiRE' to the Gurgaon plant by around July next year. It will also shift the production of hatchback 'Swift', which is currently being produced at both the plants, entirely to Manesar sometime in future. "Our plan is to fully shift DZiRE to Gurgaon and Swift to Manesar to enhance productivity. The shifting of assembly of DZiRE will take place by July next year and that of Swift will take place in future," Maruti Suzuki India Managing Executive Officer (Production) M M Singh told PTI. He, however, declined to comment how much volume will be increased post this reorientation exercise. Currently, the company manufactures about 10,000 units of DZiRE and 12,000 units of Swift every month. The company's hatchbacks, Swift and Ritz, have a 3-4 month and 1-2 month waiting period, respectively, while customers are willing to wait for 4-5 months to own a DZiRE sedan. MSI takes about 5 months to deliver multi-purpose vehicle Eeco to buyers. The company is expecting up to 30 per cent sales jump in the domestic market during this financial year. "We are expecting the domestic sales growth of 28-30 per cent in this fiscal. Last fiscal we sold about 8. lakh units, MSI Managing Executive Officer (Marketing and Sales ) Mayank Pareek said.

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CHAPTER 8 NEW PRODUCT DEVELOPMENT

In business and engineering, new product development (NPD) is the complete process of bringing a new product to market. A product is a set of benefits offered for exchange and can be tangible (that is, something physical you can touch) or intangible (like a service, experience, or belief). There are two parallel paths involved in the NPD process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis. Companies typically see new product development as the first stage in generating and commercializing new product within the overall strategic process of product life cycle management used to maintain or grow their market share. Mos m ke e s g ee h fi ms long-run survival requires new product development

because that is what consumer wants. Product life cycles are growing progressively shorter and such companies spend heavily on R&D in order to bring out new products. The new p od c s f om comp nys poin of view c n be b o dly divided in o h ee g o ps: New product arising out of technological innovation. New product arising out of marketing oriented modifications. New product arising out of imitation of existing products.

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THE EIGHT STAGES

8.1 New Product Development 1. Idea Generation is often called the "NPD" of the NPD process.

Ideas for new products can be obtained from basic research using a SWOT analysis (Strengths, Weaknesses, and Opportunities & Threats). Market and consumer trends, company's R&D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or ethnographic discovery methods (searching for user patterns and habits) may also be used to get an insight into new product lines or product features.

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Lots of ideas are generated about the new product. Out of these ideas many are implemented. The ideas are generated in many forms. Many reasons are responsible for generation of an idea.

Idea Generation or Brainstorming of new product, service, or store concepts idea generation techniques can begin when you have done your OPPORTUNITY ANALYSIS to support your ideas in the Idea Screening Phase (shown in the next development step).

2. Idea Screening

The object is to eliminate unsound concepts prior to devoting resources to them. The screeners should ask several questions: Will the customer in the target market benefit from the product? What is the size and growth forecasts of the market segment / target market? What is the current or expected competitive pressure for the product idea? What are the industry sales and market trends the product idea is based on? Is it technically feasible to manufacture the product? Will the product be profitable when manufactured and delivered to the customer at the target price?

3. Concept Development and Testing

Develop the marketing and engineering details Investigate intellectual property issues and search patent databases Who is the target market and who is the decision maker in the purchasing process?

What product features must the product incorporate? What benefits will the product provide?
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How will consumers react to the product? How will the product be produced most cost effectively? Prove feasibility through virtual computer aided rendering and rapid prototyping

What will it cost to produce it? Testing the Concept may involve asking a number of prospective customers to evaluate the idea

4. Business Analysis

Estimate likely selling price based upon competition and customer feedback Estimate sales volume based upon size of market and such tools as the FourtWoodlock equation

Estimate profitability and break-even point

5. Beta Testing and Market Testing

Produce a physical prototype or mock-up Test the product (and its packaging) in typical usage situations Conduct focus group customer interviews or introduce at trade show Make adjustments where necessary Produce an initial run of the product and sell it in a test market area to determine customer acceptance

6. Technical Implementation

New program initiation Finalize Quality management system Resource estimation Requirement publication
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Publish technical communications such as data sheets Engineering operations planning Department scheduling Supplier collaboration Logistics plan Resource plan publication Program review and monitoring Contingencies - what-if planning

7. Commercialization (often considered post-NPD)

Launch the product Produce and place advertisements and other promotions Fill the distribution pipeline with product Critical path analysis is most useful at this stage

8. New Product Pricing

Impact of new product on the entire product portfolio Value Analysis (internal & external) Competition and alternative competitive technologies Differing value segments (price, value and need) Product Costs (fixed & variable) Forecast of unit volumes, revenue, and profit

In order to gain momentum with the increasing demand of diesel powered cars in India, Maruti Suzuki is planning to introduce two new diesel powered models by late 2014 and this

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ime yo won see he

ied nd es ed Fi

so ced 1.3-litre Multijet turbo diesel engine

powering them. The Japanese automaker, Suzuki is said to be developing two new diesel engines fo he Indi n m ke . Indi s l ges p ssenge c m ke will be in od cing 1.0 -litre and 1.4-li e diesel engines, ge ing id of he I li n c m ke s 1.3-litre Multijet diesel mill. This move can result in reducing manufacturing costs and can help the carmaker to price the products aggressively. Maruti Suzuki has tasted tremendous success in the Indian market with the Fiat sourced Multijet diesel engine powering the Ritz, Swift, DZire, Ertiga and SX4. The I li n c m ke s echnology has helped Maruti Suzuki find itself amongst the top selling cars in the Indian car market consistently every month. The diesel engines under development by the Japanese automaker can help the company to target a range of segments. The small 1.0-litre diesel engine can power compact hatchbacks like the WagonR and A-Star, while the bigger 1.4-litre diesel motor can be used in the Swift, DZire, Ertiga as well as the upcoming compact SUV based on the XA-Alpha concept. Maruti is readying up a diesel engine plant in Gurgaon with an investment of around Rs. 100 crores and an annual production capacity of three lakh units. The agreement with Fiat says supply of one lakh diesel engines to Maruti for three years starting from 2012, which means beyond 2015, Maruti Suzuki might not get diesel engines from Fiat.

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8.2 XA-Alpha

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CHAPTER 9 CONCLUSION

The Maruti Suzuki has a huge market and has left no stone unturned to satisfy the customers. It has models in every segment of the automobile market. Maruti Suzuki stands for value as much as it stands for performance. In spite of rising input costs, the company tries their best to keep prices down. Their running costs and resale values are unbeatable too. Competitive strategy of this company facilitated healthy profit and customer satisfaction and its recognition as a company which stands for environmental concerns. Nothing matches the deligh hei c s delive . In f c , c s ome hey don b y M i S z ki, hey inves in i .

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BIBLIOGRAPHY www.wikipedia.com www.marutisuzuki.com www.ask.com www.caretrade.com/marutisuzuki www.gadi.com/marti+suzuki

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