CHAPTER 1

Introduction

COMPANY PROFILE
Logo of Maruti Udyog

History
Maruti Udyog Limited was established in February 1981, though the actual
production commenced only in 1983. It started with Maruti 800, based on the Suzuki
Alto kei car which at the time was the only modern car available in India. Its only
competitors were Hindustan Ambassador and Premier Padmini. Originally, 74% of the
company was owned by the Indian government, and 26% by Suzuki of Japan. As of
May 2007, the government of India sold its complete share to Indian financial
institutions and no longer has any stake in Maruti Udyog.

Beginnings
Maruti's history begins in 1970, when a private limited company named 'Maruti
technical services private limited' (MTSPL) is launched on November 16, 1970. 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 1971, a
company called 'Maruti limited' was incorporated under the Companies Act
and Sanjay Gandhi became its first managing director. "Maruti Limited" goes into
liquidation in 1977. On 23 June 1980 Sanjay Gandhi dies when a private test plane he
2

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 is incorporated in the same year.

Suzuki Enters
In 1982, a license & 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 33%
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 796 cc hatchback is based on the SS80 Suzuki
Alto and is Indias first affordable car. Initial product plan is 40% saloons, and 60%
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.
In 1985 the Suzuki SJ410-based Gypsy, a 970 cc 4WD off-road vehicle, is launched.
In 1986 the original 800 is replaced by an all-new model of the 796 cc hatchback
Suzuki Alto/Fronte. This is also when the 100,000th vehicle is produced by the
company. In 1987 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.

COMPETITIVE SET
Since major sale of Maruti is from its one product Maruti 800 we have tried to
identify its competitive set.

LEVEL

OF DEFINITO

COMPETING

COMPETITION

COMPANY

1. Product form

Small car.

Hyundai, Tata

NEED SATISFIED

Ease

in

commuting

within city limits, fuel

(Alto 800)

efficiency, low priced,

lightweight.

2.Product category

Cars. Hyundai,

Honda, Convertibles:

Good

(Convertible Tata, Ford, Daimler- power to weight ratio,

s,

Luxury, Chrysler, M&M, GM, superior handling.

Mid-sized,

Fiat, Skoda.

Multipurpos
e,

Luxury: Status symbol,

high level of comfort,

Sports-

luxury features, satisfies

Utility,

ego.

Station
Wagons)

Mid-sized:

Reasonably

Spacious,

high

comfort

&

on
Safety

features.
Multipurpose: Spacious,
used for heavy-duty tasks
4

like

to

haul

luggage,

heavy

used

for

commercial purpose.
Sports Utility Vehicle:
High

driving

position,

good for rough and tough

usage.
Station

Wagon:

High

load carrying capability,

spacious,
fitted

comfortable,
with

accessories.

useful

PRODUCT SPECIFICATIONS
ALTO 800

Dimensions
Length
Width
Height
Wheelbase
Ground clearance
Min. turning radius
Weight
Unlade (std.)
Transmission

3335 mm
1440 mm
1405 mm
2175 mm
170 mm
4.4 m
640 Kg
Manual 4/5* forward,
all synchromesh 1 reverse

Engine
Type

4 stroke cycle, water cooled

Number of cylinders
Swept Volume
Maximum Torque

SOHC 1 C2 V/iC4V*
3
796 cc
56 Nm @2500 rpm/

Maximum Power

62Nm @3000 rpm*

37hp@5500 rpm/
45hp@6000 rpm*

Suspension
Front

McPherson strut & coil spring

6

Rear (Std.)
(DX & EX)

Leaf spring
Coil spring with gas filled shock
absorbers

Tyres
Std.
EX & DX
Brakes
Front
Rear
Capacity
Fuel tank

5.65-12-4 PR
Radials 145/70-R-12
Disc
Drum
30 Lts.

OMNI

Specifications
Length
Width
Height
Wheel base
Ground clearance
Min. turning radius
Curb Weight
Transmission

3370 mm
1410 mm
1640 mm/ 1835 mm*
1840 mm
165 mm
4.1 m
740 Kg/ 755 Kg*
Manual, 4 forward, all synchromesh
1 reverse

Engine
Type
Number of cylinders
Swept Volume
Maximum power
Maximum torque
Suspensions
Front
Rear
Brakes
Front
Rear
Tyres
Capacity
Fuel tank

4 stroke cycle water cooled

3
796cc
37.0 bhp@5000 rpm.
5.8 Kgm@2500 rpm
McPherson Strut
Leaf spring with shock absorbers
Drum
Drum
4.50-12-6PR ULT
36 Lts
8

Seating

5 / 8 seater options available

CELERIO

Dimensions
Length
Width
Height
Wheelbase
Ground clearance
Min. turning radius
Weight Unlade
Engine
Type

3495 mm
1495 mm
1405 mm
2335 mm
165 mm
4.9 m
755 Kg/ 765 Kg#/790Kg*/ 830 Kg**
Aluminum,

Water

SOHC/TUD5, IDI**
4, in-line
4 valves per cylinder#
2 valves per cylinder
993cc/ 1527 cc**
50 bhp@6500 rpm/
57 bhp@5000 rpm**/
60 bhp@6000 rpm#
7.2 Kgm@4500 rpm/

No. of cylinders
No. of valves
Diesel / Non-MPFI
Swept Volume
Maximum power
Maximum torque
10

Cooled,

9.7 Kgm@2250 rpm**/

8 Kgm@4500 rpm#
Rotary distributor type
8.8:1/94 + 0.2:1#/23:1**
16- bit Computer#

Fuel delivery Diesel

Compression Ratio
Control
Transmission
Manual type
Automatic type
Suspension
Front
Rear

5 forward, 1 reverse
3 speed with planetary geat*
McPherson Strut
3-link rigid axle with isolated trailing
arm, coil springs and gas-filled shock
absorbers.

Brakes
Front
Rear
Tyres

Disc
Drum
Radial, 145/80 RI2 (for all models,

Capacity

except Diesel)/ 145/ 70 R13**

35 Lts.

ALTO K10

Specifications
Length
Width

3495 mm
1495 mm
11

Height
Wheel base
Min. turning radius
Curb Weight
Gross Weight
Transmission
Manual type

1460 mm
2360 mm
4.6 m
740 Kg / 750 Kg*
1165 Kg
5 forward all synchromesh,
1 reverse

Engine
Type

FC, 4 valves per cylinder,

MPFI
16- bit Computer
3/ 4*
796cc/1061 cc*
45 bhp @ 6000 rpm/
62 bhp @ 6000 rpm*
62 NM@3000 rpm/
82 NM @ 3500 rpm*

Control
Number of cylinders
Piston displacement
Maximum power
Maximum torque
Suspension
Front

Macpherson Strut with torsion type anti-

Rear

roll bar.
Coil spring with double action telescopic
shock absorbers.

Brakes
Front
Rear
Tyres
Capacity
Fuel tank

Disc
Drum
35 Lts

12

EECO

Length

3675mm(144.7in)

Width

1475mm(58.1 in)

Height

1800mm (70.9in)

Curb Weight

908Kg (2002 lb)

Engine

1200CC 14 engine

Transmission

5- speed manual

Fuel

Petrol, Cng and Electric

Power

Power :73 bhp@6000rpm

Torque: 101nm@3000rpm

13

4 cylinder
Rear Brakes

Drum

Tyres

R13 Tubeless

Front Brakes

Disc

Boot Space

540L

14

WagonR

Specifications
Length

3495 mm

Width
Height
Wheel base
Ground clearance
Min. turning radius
Curb Weight
Gross Weight

1495 mm
1660 mm
2360 mm
165 mm
4.6 m
825 Kg/ 840 Kg
1225 Kg for LX, Lxi, Vxi,
1240 Kg of Ax

Transmission
Manual type

5 forward all synchromesh,

1 reverse gear
3 speed with planetary gear*

Automatic type
Engine
Number of cylinders

4 in-line, FC engine/
4 valves per cylinder.
1061 cc
62 bhp @ 6000 rpm
8.4 Kg @ 3500 rpm

Swept volume
Maximum power
Maximum torque
Suspension
Front

McPherson Strut with torsion type roll

control device
15

Rear

Coil spring and gas filled shock absorbers

with three link rigid axle and isolated
trailing arms

Brakes
Front
Rear
Tyres
Capacity
Fuel tank

Disc
Drum
145/70 R13 (Radial)
35 Lts

16

RITZ

Engine

1.2L
1.3D

Transmission

5 Speed Manual

Length

3720mm

Width

1680mm

Height

1590mm

Curb Weight

908Kg (2002 lb)

Rear Brakes

Drum

Tyres

R13 Tubeless

Front Brakes

Disc

Boot Space

540L

17

SWIFT

Engine
Transmission

1.2L
1.3D
5 speed manual

Length

3850mm

Width

1695mm

Height

1510mm

Curb Weight

1035-1200kg

Maximum Power

80 bhp@6000 rpm

Maximum Torque

103 Nm@4500 rpm

Suspension
Front and Rear
Brakes
Front
Rear
Tyres
Capacity
Fuel tank

Leaf spring with double action damper

Disc
Drum
F78-15-4 PR/ 205/70R15*
40 Lts.
18

SWIFT DZIRE

Dimensions
Length
Width
Height
Wheelbase
Ground clearance LX, VX
AX
Min. turning radius
Weight
Unlade weight LX, VX
AX
Transmission
Manual

4090 mm
1575 mm
1395 mm
2365 mm
170 mm
160 mm
4.8 m
875 Kg
900 Kg
4.8 m
5 forward,
all synchromesh

Automatic

1 reverse
3- speed automatic,
1 reverse

Engine
Type MPFI

4 stroke cycle all aluminum water

19

cooled SOHC
Cylinders
Swept Volume
Maximum power
Maximum torque
Brakes
Front
Suspension
Front & Rear
Tyres
Capacity
Fuel tank

In-line 4
1298 cc
85 bhp@
6000 rpm
106 Nm@
3000 rpm
Ventilated disc Drum
McPherson strut and coil spring
155/80 R 13
40 Lts.

20

ERTIGA

Engine

1.4L Petrol
1.3L Diesel

Transmission

5speed Manual
4speed Automatic

Length

4265mm

Width

1685mm

Height

1695mm

Curb Weight

1180kg

Specifications
Type

All Aluminum
Contemporary, 16 valve SOHC
4 in-line, 16
1590 cc
132 NM@3000 rpm

Number of cylinders / valves

Swept volume
Maximum torque
21

Fuel Distribution
Compression ratio
Wheelbase
Ground clearance
Min. turning radius

MPFI
9.0 + 0.2:1
2480 mm
170 mm
4.9 m

CIAZ

22

Class

Sedan Car

Production

2014

Layout

Front Engine
Front Wheel Drive

Engine

1.4 Petrol
1.3 Diesel

Transmission

5 Speed Manual
4 Speed Auto

Wheelbase

2650mm
R15 Tubeless

Airbags

4 Airbags

Max Power

68@6000rpm

Max Torque

130@400rpm

Emission Standard

BS IV

ABS

YES
23

Engine Immobilizer

YES

A\C

Automatic

PRICE SPECIFICATIONS

ALTO 800

2.4 - 3.5 Lacs

ALTO K10

3.1 - 3.8 Lacs

OMNI

2.2 - 2.8 Lacs

CELERIO

3.8 - 4.8 Lacs

24

EECO

3 - 4 Lacs

WAGONR

3.5 - 4.4 Lacs

RITZ

4.2 - 6.2 Lacs

SWIFT

4.4 - 7 Lacs

SWIFT DZIRE

4.9 - 7.3Lacs

SX4

7.2 - 9.5 Lacs

CIAZ

7 - 9.8 Lacs

ERTIGA

5.8 - 8.5 Lacs

GYPSY

5.4 - 5.9 Lacs

PLACING OF THE PRODUCT

Sales & Service Network

As of 31 March 2014 Maruti Suzuki has 933 dealerships across 666 towns and cities
in all states and union territories of India. It has 3,013 service stations (inclusive of
dealer workshops and Maruti Authorized Service Stations) in 1,436 towns and cities
throughout India. It has 30 Express Service Stations on 30 National Highways across
1,436 cities in India.
Service is a major revenue generator of the company. Most of the service stations are
managed on franchise basis, where Maruti Suzuki trains the local staff. Other
automobile companies have not been able to match this benchmark set by Maruti
25

Suzuki. The Express Service stations help many stranded vehicles on the highways by
sending across their repair man to the vehicle.

Exports
Maruti Exports Limited is the subsidiary of Maruti Suzuki 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 Suzuki crossed the benchmark of 300,000 cars. Since
its inception export was one of the aspects government was keen to encourage. Every
political party expected Maruti Suzuki to earn foreign currency. Angola, Benin,
Djibouti, Ethiopia, Europe, Kenya, Morocco, Nepal, Sri Lanka, Uganda, Chile,
Guatemala, Costa Rica and El Salvador are some of the markets served by Maruti
Exports.

PROMOTION

Maruti Driving School

As part of its corporate social responsibility Maruti Suzuki launched the Maruti
Driving School in Delhi. Later the services were extended to other cities of India as
well. These schools are modelled on international standards, where learners go
through classroom and practical sessions. Many international practices like road
behavior and attitudes are also taught in these schools. Before driving actual vehicles
participants are trained on simulators.
At the launch ceremony for the school Jagdish Khattar stated "We are very concerned
about mounting deaths on Indian roads. These can be brought down if government,
26

industry and the voluntary sector work together in an integrated manner. But we felt
that Maruti should first do something in this regard and hence this initiative of Maruti
Driving Schools."
Awards & Recognition
The Brand Trust Report published by Trust Research Advisory, a brand analytics
company, has ranked Maruti Suzuki in the thirty seventh position in 2013 and
eleventh position in 2014 among the most trusted brands of India.
Bluebytes News, a news research agency, rated Maruti Suzuki as India's Most
Reputed Car Company in their Reputation Benchmark Study conducted for the Auto
(Cars) Sector which launched in April 2012.

Mission Statement
To increase the companys performance by focusing extra on quality, productivity
and cost so as to increase customer satisfaction and sales volume.
Both, the vision and the mission statement act as the guiding force for the company
and act as a catalyst in the process of shaping up the company policies and approach
and help to define the market where the company will operate.

Industry where MUL is operating

The Company is operating in the automobile industry manufacturing LMVs.

Product Target
27

The company will be manufacturing vehicles so as to cater to the needs of segments

A1, A2, A3, B and C.

CORE COMPETENCY

The core competency of MUL lies in:

Its alliance with Suzuki Motors Corporation, which is the biggest small car
manufacturer in Japan.

Pricing products competitively (MUL has an ability to keep lowering the

prices which they do by working with vendors, assuring them that for every
drop in price, volumes will go up).

Operational efficiency and productivity (Focus on manufacturing low cost,

high quality and fuel-efficient cars).

28

MARKET SEGMENTATION

There were two principal systems of segmentation in the Indian passenger car
industry:
1. Price Based Segmentation
2. Length Based Segmentation
MUL goes by the length based segmentation.

Price Based Segmentation:

Classification based on price was widely accepted in the Indian passenger car
industry. Maruti had, since its inception, classified its different models on the basis of
ex-showroom prices of the base model in Delhi.
1. Segment A cars priced lower than Rs. 300,000
2. Segment B cars priced between Rs. 300,000 and Rs. 500,000
3. Segment C cars priced between Rs. 500,000 and Rs. 1,000,000
4. Segment D cars priced between Rs. 1,000,000 and Rs. 2,500,000
5. Segment E cars priced above Rs. 2,500,000

29

Length Based Segmentation:

On the basis of length the passenger vehicle market is divided broadly into the
following three categories:
1. Passenger Cars (Segment A: A1, A2, A3, A4, A5, A6)
2. Utility Vehicles (Segment B) and
3. Multi Purpose Vehicles (MPVs) (Segment C)
The pie chart given below gives the relative share of each segment in Marutis
passenger vehicles sales, where passenger car sales have been broken up according to
the SIAM based classification (A1-A6).

30

Passenger Cars (Segment A)

In volume terms, passenger car sales accounted for over 77 per cent of the Indian
passenger vehicles market and grew by 28.6 per cent. Maruti continues to be the
market leader. During 2003-04, not only did Maruti grow due to the overall market
growth, but also managed to overcome intense competition and gain market share
which increased from 50.8 per cent in 2002-03 to 51.4 per cent in 2003-04. The
Indian car market is classified into six categories based on the vehicle length:

A1: Mini up to 3,400 mm.

A2: Compact from 3,401 mm to 4, 000 mm.

A3: Mid-size from 4,001 mm to 4,500 mm.

A4: Executive 4,501 mm to 4,700 mm.

A5: Premium from 4,701 to 5,000 mm.

A6: Luxury 5,001 mm and above.

MUL has presence in three of these categories namely A1, A2 and A3.
A1: With Maruti 800, MUL is the only player in this category. Sales volumes
increased by 16.9 percent during 2003-04.
A2: Maruti has three models in this category Zen, Alto and Wagon R. Maruti
consolidated its leadership position in the A2 category. While the category grew by
23.4 per cent in 2003-04, MULs sales volume grew by 46 per cent. Consequently, the
companys market share has increased from 40.3 per cent in 2002-03 to 47.7 percent
in 2003-04.

31

A3: This is a highly fragmented category with several models, and no single player
has major leadership position. MULs two models Esteem and Baleno have a
combined market share of a little over 10 percent. Maruti lost some market share as its
volume sales grew by around 30 percent, against the overall categorys growth of 50.8
percent.

Utility Vehicles (Segment B)

Diesel vehicles dominate this segment with a share of around 95 per cent. This is
mainly because vehicles in this segment are by nature heavy and diesel has a policy
determined price advantage over petrol. Since Maruti does not have a diesel vehicle
today, it remains a small player in the MUV segment with a market share of only 2.5
per cent. The primary model in this segment is the Gypsy. During April 2003, the
company launched its state-of-the-art sports utility vehicle (SUV) the Grand
Vitara.

Multi - Purpose Vehicles (Segment C)

In this segment, Marutis models include the Omni and the Eeco. Here, Maruti is the
dominant player with nearly 100% market share. In 2003-04, the companys sales
volumes grew by 14.7 per cent. During the latter half of the year, Maruti launched an
economy model of the Versa. A new Omni variant, which runs on LPG was launched
to tap newer cargo markets.
Passenger cars and MPVs are generally analyzed as a comprehensive segment. Maruti
marginally increased its share in this segment with about 55.2 per cent in volume
terms during 2003-04.

32

Chapter 2
Methodology

33

RESEARH DESIGN

Research Approach
When conducting research there are different ways to address the topic. I will present
and give the reason for the way we chosen to approach our study. My study is
deductive since our frame of reference is based on existing theories. I based my
empirical data studies on theories and used them to form a base on how to analyze the
collected data. In this study I chose the qualitative approach in order to be able to deal
with research problem and research questions stated for the thesis, the qualitative
approach is suitable since I want to obtain a deeper understanding on how factors
induce companies to use celebrity endorsers in their marketing communication, and
how the risks involved can be described and measures to decrease them. A
quantitative approach is not suitable because I dont want to analyze the data in
numbers. Therefore a qualitative study is the best approach for me when describing
the collected data in words.

OBJECTIVES OF THE STUDY

To study and analyze the marketing Strategies of MARUTI SUZUKI.

To find the area to be improved.

SWOT Analysis

To study the strategy behind Maruti Suzuki and consumers outlook towards
that strategy.

34

Methodology
The word research is derived from the Latin word meaning to know.
It is a systematic and a replicable process, which identifies and defines problems,
within specified boundaries.
It employs well-designed method to collect the data and analyses the results.

DATA COLLECTION
Data is the significant part of the research. Your all research depends upon your data.
Whatever data is collected by me on MARKETTING STRATEGIES OF MARUTI
SUZUKI is secondary data.

Secondary Data
Secondary data is the data that have been already collected by and readily available
from other sources. Such data are cheaper and more quickly obtainable than the
primary data and also may be available when primary data can not be obtained at all.
Advantages of Secondary data:

It is economical. It saves efforts and expenses.

It is time saving.

It helps to improve the understanding of the problem.

35

It provides a basis for comparison for the data that is collected by the
researcher.

Disadvantages of Secondary data:

Accuracy of secondary data is not known.

Data may be outdated.

36

Chapter 3
Findings & Analysis

37

SWOT ANALYSIS
Strengths:

Well Established Co. since 1983.

Joint venture of Suzuki Motor Corporation, Japan.

Trusted brand in India.

Only producer of the A1 segment car in India currently.

Strong distribution network all over India.

It has the maximum number of service stations all over the country, with
services available in the remote areas too.

Easy availability of spare parts at low cost.

Cars known for there efficiency, efficiency in term of maintenance cost and
running cost.

Tie up with SBI to provide financial services in the rural areas too.

Other services like True Value, Maruti Insurance and Maruti Finance which
help to provide the turn key services to the customers.

Large share in total car exports to Europe.

38

Weakness:

The numbers of models offered in A3 and C segment are less.

The models offered by the company are very old and looks outdated in
comparison to the new cars available in the segment.

The company has low brand recognition in A3 and C segment.

Not perceived as a luxury car manufacturer but as a small car manufacturer.

Opportunity:

Opportunity exists in the A3 segment, which has recorded a double digit

growth of 15% in Indian market.

The company can sign in contracts with MNCs for providing them with the
cars for purpose of pick and drop. This way the sales of EECO can be
improved.

The company can come out with a CNG fitted kit model for cars for taxi
purpose.

Coming out with diesel variants of the different Brands.

39

Threats:

The Rs. 1.5 lakh car to be launched by Tata and TVS India.

Launch of new cars like Grand i10, in the upper A2 segment.

Price reduction and heavy discounts by other car manufacturer like Hyundai,
Ford in the A3 segment.

Introduction of new models of international players in the C segment. E.g.

INNOVA.

Launch of base model Santro for 2.8 lacs, closer to Marutis Altos price and a
threat for Marutis A1 segment.

40

PEST ANALYSIS
A scan of the external macro-environment in which the firm operates can be
expressed in terms of the following factors:

Political

Economic

Social

Technological

Political Factors
The automobile sector, previously under a strict licensing regime, has been a direct
beneficiary of competition and technology in the new liberal regime. Not only has
automobile output grown at double-digit compound rates, but the sector has become a
sizeable exporter. Major international auto-companies now have operations in India,
and are increasingly using the country as a platform for export-oriented production.
There is also a strong set of upstream firms, producing ancillaries for, and providing
design consultancy to the automobile industry. The intense price competition between
the passenger cars manufacturers has yielded price benefits to the consumers.
The key issues in the automobile sector due to various political actions are:

Increases in input costs since FY2004 continues to affect the margins of

players.

Higher costs to meet new emission norms.

41

8% special excise duty on the multi-utility vehicles and motorcars.

The industry suffers from multiplicity of taxes, which affect its

competitiveness. Delays in regulatory clearances affect the investment climate
and result in cost overruns. Higher costs on logistics, power and fuel and
inflexible labor laws too affect competitiveness.

Need to achieve a balance between volumes (to break even / improve profits)
and wide product portfolio in a highly competitive market.

Irrespective of these key issues, the automobile sector is welcomes the governments
announcement to provide 150% deduction of expenditure on in house R&D in the
automobile sector. It believes that this would give a further boost to the automobile
sector and help it to grow faster.

Automobile sector, besides the issues mentioned above want the government to take
care of the following aspects too:

Incentivize ownership of new vehicles and launch retirement scheme for older
vehicles to benefit from new emission standards.

Cut customs duty on parts of electrical vehicles to 5%.

42

Increase depreciation allowance on cars to 33.33%.

Cut excise duty on car ACs to 16% on par with other auto components.

Auto Policy of the Government of India:

Vision- To establish a globally competitive automotive industry in India and to double
its contribution to the economy by 2010.
Policy objectives- This policy aims to promote integrated, phased, enduring and selfsustained growth of the Indian automotive industry.
The objectives are to:

Exalt the sector as a lever of industrial growth and employment and to

achieve a high degree of value addition in the country.

Promote a globally competitive automotive industry and emerge as a

global source for auto components.

Establish an international hub for manufacturing small, affordable

passenger cars and a key center for manufacturing Tractors and Twowheelers in the world.

Steer India's software industry into automotive technology.

Assist development of vehicles propelled by alternate energy sources.

Development of domestic safety and environmental standards at par with

international standards.

43

Economic Factors
The sharp 8.2 per cent growth in GDP in 2003-04, and the expectation that the
economy will remain strong in the medium term, is a positive factor for the
automobile

sector.

Other macro economic factors like the softening of interest rates in the past three
years and the trend towards reduction in Customs and Excise Duties will also
contribute to increasing demand for automobiles. The increasing availability of retail
finances in smaller markets another positive development.
The impact of these factors on the passenger vehicles market was evident in 2003-04.
Volume sales of passenger vehicles (including Multi Utility Vehicles) grew 27% to
over 900,000 units in the domestic market. Together with exports, passenger vehicle
sales scaled the million marks for the first time. Within this, domestic passenger car
sales grew 28.6 % to nearly 700,000 units in 2003-04. If the positive macro factors
sustain over the medium term, it is reasonable to assume that the Indian passenger
vehicles industry is on the threshold of a strong growth path.
The auto industry is likely to benefit from the implementation of value added tax
(VAT) in the states from 1 April 2005, which might lead to a rationalizing of taxes
leading to an actual lowering of prices of automobiles. Most importantly the new
income tax brackets, the change in exemption and deductions available to individuals
and the increase in exemption for women will result in higher disposable income, and
boost auto sales.
Sales incentive, introduction of new models/variants coupled with easy availability of
low-cost finance has stimulated demand for vehicles. Further, the "progressive
liberalization of the norms for foreign investment and import of technology have
benefited the automobile sector" with production likely to exceed 10 million in the
next couple of years.
44

Social Factors
Socio-cultural factors also act as a strong influencing force in the automobile sectors
and its strategies. Following are some of the key influencers:

India being a secular country has all the religions in existence with Hinduism
being the most dominant religion. Thus sales of the vehicles vary all year
round depending upon the festivals and events of different cultures and
religions. For example: Hindus prefer to buy new vehicles during the Diwali
time or Navratras.

Indians attitude towards foreign products and services is that of high

reverence and respect. This statement lends us an explanation of high Hyundai
or Honda sales whereas the company like MUL has to strive hard and be very
active so as to keep up with the buyers needs, attitudes and the competitors.

Even though India is a secular country with various cultures/religions and their
respective languages/dialects, Hindi (mother tongue) and English are still
widely known and spoken languages (unless its the remote areas). Thus
language doesnt really have an impact upon the diffusion of the product onto
markets. But, still some companies make an exception by marketing and
advertising their products in compliance with respective regions culture and
language.

Initially there was a big gender and age bias in the Indian families with the
elder male members making the main decisions but now the scenario has
changed, i.e. children and females of the family take active part in the
decision-making processes.

45

Technological Factors
Its vital for the automobile industry and its associated automotive component
industry to involve themselves in continuous R & D. this is mainly to constantly
upgrade them, to come up with competitive models and keep themselves abreast with
the global changes and competitors.
Some of the political factors such as EURO norms and CNG norms have also forced
the automobile companies to get involved in constant R & D.
Technological up gradation is also a necessity so as to be in the market and have an
edge over the other automobile manufacturers.
In the age of information technology companies are making a use of it to be in
constant touch with their vendors, dealers, customers etc. Internet has become a major
source of troubleshooting and advertising. MUL is trying to implement e-commerce
so as to be the first company to sell its cars though the Internet.

46

STRATEGY FORMULATION
A1 Segment
To phase out the Maruti 800 with the Alto as the alternative:
But the problem is the price differential between the air-conditioned 800 and the Alto
LX.
AC 800 comes for Rs 2.26 lakh, while the Alto LX costs Rs 2.65 lakh (after the price
reductions in the recent past). So there is still a Rs 40,000 difference.
A team of engineers of Maruti Udyog (MUL) should be formed; the team would have
to meet a few of the company's 268 vendors. The teams job would be to bring down
the price of the 800 cc Alto LX model by Rs 40,000 to the price of the Maruti 800.
Push 800 in smaller centers and rural areas:
Maruti 800 is showing a decline after being largest selling car for several years. The
firm is not in a position to bring down its cost, so they are looking for other means to
it more affordable. Hence they are also trying to push the cars in smaller centers and
rural markets.

A2 Segment
Introduction of new features in all the models of Segment A2 at no extra price like
completely redesigned headlamps, tail lamps and a new flowing chrome grille with
provision for front fog lamps.

47

Offering special up gradation package for the Lxi. Variants of the different Brands in
this segment.
These packages would be worth Rs.14000 which would include Body colored
bumpers, Wooden finish interiors, Alloy wheel caps, Body colored Door vision set.
For enhancing sales in the A2-segment, every time any of his 3.2 million owners of
800 or the Omni decide to trade in their car, and upgrade. His dealers will give them
loyalty discounts to get them to upgrade to a Maruti A2 segment car.
With support from parent company, Suzuki Motors, Maruti Udyog Ltd (MUL) may
work on developing a new compact car in the A2 segment for both the domestic and
the export market.

A3 Segment
After having lost market share to Tata Motor's Indica and Hyundai's Santro in the
compact segment, Maruti can decide to protect its share of the profitable mid-size
segment.
Esteem to be priced lower:
The base model of Esteem Diesel (without power steering) comes for Rs 4.83 lakh
(all prices are ex-showroom Delhi) against Rs 5.22 lakh earlier, while the loaded
version will come for Rs 5.09 lakh, down from Rs 5.48 lakh. At its prevailing price
the Esteem diesel is just a little more expensive than the Tata Indigo diesel (Rs 5.02
lakh) Hence the price reduction of loaded version can be reduced to Rs. 5 lakhs to be
less than competitors price.

48

Baleno to be further discontinued:

Baleno Vxi to be offered at a comparable price than the other Segment A3 cars like
Hyundai Accent GVS, Ikon Zxi (Rs 6.06 lakh). Baleno Vxi presently priced at Rs
6.29 Lakh should be discounted to price of Rs. 6 lakhs this can be done at the cost of
power windows, power mirrors, rear defoggers.

For the second hand car market

Maruti has created a system where dealers pick up used cars, recondition them, give
them a fresh warranty, and sell them again.
This way MUL will create a number of new revenue streams without making large
investments. Dealers make all investments for True Value. MUL should aim at
convincing 183 authorized dealers, selling Maruti cars through 241 outlets, to open at
least one True Value outlet each within two years.

Taxis & Government Vehicles

Maruti should plan to displace the good old Ambassador from the taxis and
government vehicles segment. This is one area where sales can increase tremendously.
MUL has CNG-powered, environmentally fit vehicles, which are best, suited as taxis
and government cars.
MUL can offer discounts in the form of rebate to taxi owners to buy Maruti cars. If
this strategy is able to convert old cars into new green Maruti, MULs sales will
leapfrog by at least 10 per cent."

49

Taxi customers can get rebate of 8% on the assessable value of the vehicle. In
absolute value, this ranges from approximately Rs. 10,000 on Omni to Rs. 28,000 on
Baleno. This rebate would be available on all the vehicles having seating capacity up
to seven including the driver.

Vehicles for Corporate

Offering CNG fitted Versa as a vehicle to be used for Pick up & drop service for their
employees.
A 5% discount (Rs 22,000 on Versa Dx2) would be offered to these corporates on a
bulk purchase of more than ten Versa.
This would help increase the sales of Maruti Versa by 15% (3500 units)

Rural Market
To counter that apprehension discussed in the market situation, the company should
work on a novel idea.
For EMI: Maruti has tied up with State Bank of India (SBI). Today, organized
finance is available in just 50-60 towns in India, but MUL has dealerships in 180
cities. The SBI deal gives MUL access to about 9,000 SBI branches and another 5,000
branches of its affiliate banks A typical two-wheeler loan lasts 2-3 years, charges a
high rate of interest, and has a monthly payment of around Rs 2,000. Now, SBI and its
affiliate banks are offering 5-7 year loans for the 800. They will charge a far lower
rate of interest - around 9.5% - and the monthly installment will be just Rs 2,800.
Fuel How much you spend on fuel is in your hands.
50

Maintenance: As far as the maintenance cost is concerned, company will charge a

little extra in the EMI and offer free maintenance.
Extra Benefit: With the State Bank of India, MUL can come out with a scheme
where installments can be paid every six months - after the rabi and kharif harvests.
This makes the total cost per month to keep a car to be around 3500 as compared to
the notional 7000 earlier which makes it a good option.
Vendor Rationalization: The cost reduction strategy of the company has also been
successful partly because of a cost reduction with vendors. Maruti will work closely
with current vendors to cut down costs at the vendor end. The company seeks to
reduce costs by 10% per vehicle in the period.

51

MARKET STRATEGY IMPLEMENTATION

Product development with vendors: In case of product development part a

team of engineers would be talking to its major vendors (25 in number) for
reducing the cost of equipments supplied by them. These 25 vendors are the
major suppliers of maruti components such as Jai Bharat Maruti, Krishna
Maruti, and Sona Koyo Steering etc.

Advertising: The advertising may involve the process of advertisements on

Television, Radio, newspaper, Auto Magazines and events like Auto Expo.
T.V. Advertising- T.V. advertising may involve the advertisement at the
peak hours of television viewing or during the cricket match time in the
slog overs which in turn may lead to maximum exposure and thus
maximum impact on the final buyers.
Advertising in Newspapers (Once in a week)- The concept of
advertising on newspaper may increase the sale since the newspaper would
be able to explain the characteristics and features of car. Because it is an
easy way of reaching the decision makers and thus in turn may directly
influence their decision.
Advertising on Radio- With FM catching more and more popularity
amongst people especially people loves to listen to FM while driving. Thus
this could be another mean of influencing the prospects for services like
True Value at the time of 1 hour in the morning and one hour in the
evening when the people are actually travelling towards their offices or
coming back.
52

 Auto Magazines (monthly) and Auto Expo (yearly): the company would
advertise on auto magazine Like Autocar and overdrive where entire
information on products and newer features would be explained. The cover
page or Back page advertisements would be used for product
communication

Celebrity Endorsements: This entirely depends on the companys policy

whether they would like to spend a fixed amount (which may very depending
upon the personality). The celebrity would be the brand ambassador for the
company.

Technical Assistance: developing a new compact car model would involve a

technical assistance from Suzuki Motor Corporation, Japan with which it has
a joint venture and is its parent company. The company could help in design
specification and thus may involve technology imports.

Incentives/Penalty on meeting/not meeting a sales target: The company

would work with dealers with the policy of carrot and stick which may
involve incentives like a foreign tour package, gifts and monetary incentives
such as increased margin for meeting a sales target or working with dealers on
contractual basis rather than a permanent basis if they are not able to reach
sales over a period of time.

A special certification would be given to the dealers for their quality in service and the
company provides these dealers the additional benefits.

True Value: Observing a threat from second hand car market the company
would increase its Second hand car selling base i.e. TRUE VALUE. This
would involve a team of officials to convincing its 183 authorized dealers,

53

selling Maruti cars through 241outlets, to open at least one True Value outlet
each within two years.

Taxis and Government Vehicles: The process of selling vehicle to Govt.

organization would involve a lower margin but a bulk sale. Also it may be
quite possible that the car may be purchased directly from the company
without any dealers margin in a way increasing the companys overall profit.

For taxis a rebate of 8% would be compensated by other car sales since company will
have to weigh the burden in this case.

Financing through various banks: currently Maruti has its tie up with SBI
for financing and the process is limited to getting the car financed through
9000 branches which the firm would go out to increase along with the
financing tie ups with other banks in a way increasing the reach and more and
more customers.

For rural market a finance scheme for farmers would provide for installments to
coincide with the times when his crop is sold in the market i.e. CROP CYCLE (paid
every six months after the Rabi and Kharif (harvests).

Inventory management (JUST IN TIME): The company would bring

out a change in inventory management in the sense that JUST IN TIME
has been very successful for firms like HERO HONDA. On a similar front for
the SUV like VITARA this concept is very useful because they are importing
it all the way from japan. Hence maintaining the minimum level is a matter of
concern.

Assemble line modification: Since in A1 and A2 segments there is need of

change in the design and specification this would involve change in assembly
line.
54

Vehicle for corporate: Their N2N fleet management system would be used
for this purpose in which their main purpose would be to finance the vehicles
for corporates.

Another way could be like leasing a vehicle to corporate sector for a period of time
using their N2N fleet management system and after the fleet audit (residual value) is
done this would be sold through TRUE VALUE.

55

Chapter 4
Conclusions

56

Conclusions
In current market scenario, the competition in AUTOMOBILE sector is the highest,
so to remain in the competition all automobile companies have to develop in terms of
technology, look, and other features. MUL as a Indian company is the market leader
in INDIA, but as the globalization is coming up and the govt. is encouraging the FDI,
it is getting tougher for MUL to maintain its market share. As many MNC are coming
to INDIA with improved technology & features, MUL has to improve its existing
technology & have to add new features to rope down the existing as well as the new
customers. MUL has to add new products to its product mix. MUL has to go for more
promotion to catch up the MNCs.
With the changing economic environment the auto industry is heading for a complete
renaissance. The margins of the company are under the lens, so the companies are
doing what ever it can to improve its bottom line.
The company we have picked up is also going through same because of this the
company is continuously shuffling and re-shuffling its operation to co-up with the
changes. The level of has witnessed a complete revamp in its job because of these
changes. The job they were heading now demand more in terms of:

Market focused approach

Problem solving ability

Taking initiative

57

These are few of the changes in the role at this level which was introduced because of
change in operation. And now in order to stay in the dog eat dog race the following
the competencies have to be fill developed:

Integrated marketing principles

New computer skills

Keen to learn new concept etc.

Thus the changes will economic involvement will make newer and newer concept
emerge on the scene at the same time rendering the old concepts obsolete. Thus we
conclude that we the company has to see the sin of tomorrow it has to adapt quickly
and develop new arms for its soldiers in term of competition.

58

Chapter 5
Recommendations

59

Recommendations
In order to provide all the shots in the armory of their employees the company should
implement these policies at level:

The company should arrange for inter corporate programs so that the best
practices or concepts would be interchanged.

The company should provide their employee to go in for management programs

from top management schools in gain new ways of doing thing.

The firms will have to set up small experimental shops where an organization can
house its best talent to pursue experiment innovate develop cutting edge products,
dream up new and better ways of running a business in order to develop positive
value addition to the organization.

The company should arrange for games etc in order to create a forum of informal
interaction between customer and employees. These meeting will help employees
develop new skills or get an idea for a new product etc.

60

Chapter 6
Limitations of the Study

61

Limitations

Due to time and money constraint, study was restricted to web only.

Data collection method was secondary and web based only.

Company dont want to disclose their core strategies.

Secondary data is not sufficient to find out the overall plan and marketing
strategies of any of the company.

62

BIBLIOGRAPHY
BOOKS
o Kottler, Philip, Marketing Management, Eleventh Edition,
o Beri, G.C, Marketing research, Fourth Edition, Tata McGraw Hill Education
Private Limited.

WEBSITES
https://www.marutisuzuki.com
https://www.carindia.com
http://www.carwaale.com/marutisuzuki
MAGZIINES
Business world
Maruti Suzuki company booklet
Autocar
Auto drive
Autocar
Auto drive

63

MAHARAJA AGRASEN INSTITUTE OF MANAGEMENT STUDIES

ATTENDANCE FOR PROJECT REPORT

Name of the student

Class
Roll No.
Name of the Supervisor
S.No.

Date

:
:
:
:
Time

Progress
Report

1
2
3
4
5
6
7
8

9
10

64

Signature of Signature of
the student
Supervisor