MARKETING POLICIES OF MARUTI UDYOG LIMITED

Report submitted in partial fulfillment of the requirement

For the award of the degree of BBA Batch (2014-17)

Submitted By:
SHUBHAM TYAGI

BBA Semester VI

Under the Guidance of:

ANUPMA LAKHERA
Faculty, DSPSR

Delhi School of Professional Studies and Research

(Affiliated to Guru Gobind Singh Indraprastha University, New Delhi)

Enroll. No:01812501710 APRIL,2017

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 ACKNOWLEDGEMENT

I take this opportunity to express my profound gratitude and deep regards to my guide

(Ms.ANUPMALAKHERA) for his exemplary guidance, monitoring and constant

encouragement throughout the course of this project. The blessing, help and guidance

given by her time to time shall carry me a long way in the journey of life on which I am

about to embark

Last but not least, my sincere thanks to my parents and friends for their wholehearted

support and encouragement.

SHUBHAM TYAGI

1
 DECLARATION

This is to certify that Dissertation Project entitled MARKETING POLICIES OF

MARUTI UDYOG LIMITEDwhich is submitted by me in partial fulfillment of the
requirement for the award of BBA to Delhi School of Professional Studies and
Research, Delhi comprises only my original work and has not been submitted in part or
full for any other degree or diploma of any university. If any material has been taken
from an external source of information then it has been properly cited in text and duly
acknowledged under references.

SHUBHAM TYAGI

2
 CERTIFICATE

This is to certify that Dissertation Project entitled MARKETING POLICIES OF

MARUTI UDYOG LIMITED is an academic work done by the student
SHUBHAMTYAGI, enrollment no. 1

0181250171 submitted by him in partial fulfillment of the requirement for the award of
BBA to Delhi School of Professional Studies and Research, Delhi, under my guidance
and direction.

Ms.ANUPMA LAKHERA has given an undertaking that information presented in the

project has not been submitted earlier.

ANUPMA LAKHERA

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 TABLE OF CONTENTS

S.NO. CHAPTER PLAN PAGE NO.

1 CHAPTER I: INTRODUCTION
OBJECTIVES OF THE STUDY
REVIEW OF LITERATURE
RESEARCH METHODOLOGY
RESEARCH
DESIGN
DATA
COLLECTI
ON
DATA
ANALYSIS
TECHNIQU
ES TO BE
USED
LIMITATIONS OF THE STUDY
2 CHAPTER II: PROFILE OF THE
INDUSTRY/ SECTOR
3 CHAPTER III: ANALYSIS AND
INTERPRETATION OF DATA
4 CHAPTER IV: CONCLUSIONS AND
RECOMMENDATIONS
5 BIBLIOGRAPHY
6 ANNEXURE

4
5
 CHAPTER-1
INTRODUCTION

6
 INTRODUCTION
Industry Profile

The first motor car on the streets of India was seen in 1898. Mumbai had its first
taxicabs in the early 1900. Then for the next fifty years, cars were imported to
satisfy domestic demand. Between 1910 and 20's the automobile industry made a
humble beginning by setting up assembly plants in Mumbai, Calcutta and
Chennai. The import/assembly of vehicles grew consistently after the 1920's,
crossing the 30,000 mark in 1930. In 1946, Premier Automobile Ltd (PAL)
earned the distinction of manufacturing the first car in the country by assembling
'Dodge DeSoto' and 'Plymouth' cars at its Kurla plant. Hindustan Motors (HM),
which started as a manufacturer of auto components graduated to manufacture
cars in 1949.

In 1952, the Government of India (GOI) set up a tariff commission to devise

regulations to develop an indigenous automobile industry in the country. After
the commission submitted its recommendations, the GOI asked assembly plants,
which did not have plans to set up manufacturing facilities, to shut operations. As
a result General Motors, Ford and other assemblers closed operations in the
country. The year was 1954 and this decision of the government marked a
turning point in the history of the Indian car industry. The GOI also had a say in
what type of vehicle each manufacturer should make. Therefore, each product
was safely cocooned in its own segment with no fears of any impending
competition. Also, no new entrant was allowed even though they had plans of a
full-fledged manufacturing program. The restrictive set of policies was chiefly
aimed at building an indigenous auto industry. However, the restrictions on
foreign collaborations led to limitations on import of technology through
technical agreements.

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In the early 80's, a series of liberal policy changes were announced marking
another turning point for the automobile industry. The GOI entered the car
business, with a 74% stake in Maruti Udyog Ltd (MUL), the joint venture with
Suzuki Motors Ltd of Japan.

In 1985, the GOI announced its famous broadbanding policy which gave new
licenses to broad groups of automotive products like two and four-wheeled
vehicles. Though a liberal move, the licensing system was still very much intact.

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 OBJECTIVES OF THE STUDY

Consumer Behaviour in Passenger Car Industry

To focus on the Marketing mix of Maruti Udyog Ltd.

To study the consumer perception (Brand Image) of Maruti Udyog Ltd

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 RESEARCH METHODOLOGY

Sampling Design

Survey: A survey is a fact finding study of analysis in scientific and orderly form
for defined purpose of a given situation or a problem when a study is undertaken
due to consideration of time and cost almost invariably lead to a selection of
respondent i.e. selection of only a few items. The selected respondents constitute
what is technically called a sample' and the selection process is called sampling
technique' the survey so conducted is known as sample survey

Methods of Data Collection

The data required for the survey is made available from various sources such as:
Primary Source is the data which is collected first time by survey.

Secondary Source is the data which is already available. This is collected

through printed material files and annual reports of the company.
Processing Analysis of Data
After data collection, next stage is analysis of data, it is used to transform the
mass data into some significant understandable form. The following steps are
taken for the processing of data.
Editing: It is a process of examining the collected raw data to detect errors
and commissions and to correct these when possible. Careful scrutinizing of
the complete quest is movies.
Classification: The data arranged in groups or classes on the basis by
common character is this are place in one class and in this way the entire data
get.
Tabulation: The data after classification is tabulated for easy reference and
study.
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Graphical representation: Pictorial and graphical representation where ever
necessary was also undertaken. Bar graphs, line graphs, pi-charts are extensively
used in this thesis to make it more reader friendly

Limitations in the Thesis on Maruti Udyog Ltd.

Most of the information gathered was from secondary sources and any
limitations related to such sources will persist.

Moreover the secondary data was not up-to-date.

Random Sampling techniques are used for arriving at inferences for the
whole Delhi region. And any sample is insufficient and doesn't give the
true picture

The company's executives were not able to provide complete information,

as some of the aspects relating to future trends & plans were kept secret.

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Chapter-2
COMPANY
PROFILE

12
 COMPANY PROFILE
Maruti is India's foremost automobile company has over the years created history
with its collaborator, Suzuki of Japan.

Maruti is the market leader in all segments of the passenger car market. Maruti
over the years has been able to build the following strengths: large production
volumes, a well developed vendor base, large sales and after sales network and a
large population of cars on the roads (over half the total cars in India belong to
maruti) are tangible strengths for all to see. Maruti is the leader in terms of
providing the customer a low cost fuel-efficient vehicles. As a corollary we are
the lowest cost manufacturers in India. In a price sensitive market like India
specially for big-ticker items for the aspiring middle class, very few companies
can think of matching us without sustaining substantial losses. What is not very
visible our high standards of productivity, Japanese work culture, a well trained
and motivated work force and technical support from Suzuki the leader of small
cars.

The Dawn

On late Sanjay Gandhi's date of birth Dec 14 in the year 1983, then Prime
Minister Smt. Indira Gandhi handed over the keys of the first Maruti car to
Harpal Singh of Delhi. It was beginning of a saga and since then Maruti has
grown to become India's largest automobile company.

The idea for a peoples car & quest for a suitable technological partner was
initiated in the seventies by Sanjay Gandhi. Though he did not live long to see
the driven car roll out of the factory, the project became a huge success story.
The company search for a technological partner ended in early 80s when
Suzuki Motor Company of Japan agreed to a 26% stake in a joint venture with
a newly formed Maruti Udyog Limited (MUL), the rest 74% being need by
Govt. Of India.

13
Suzuki Motor Company was chosen from seven prospective partners worldwide.
This was due not only to their undisputed leadership in small 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.

The first Board of Directors consisted of eight members.

Mr. Krishnamurthy became the first CMD of the company Suzuki had two
representatives in the Board. Mr. O. Suzuki, the President of Suzuki Motor
Corporation had for the first time gone to the Board of an overseas affiliate
company Suzuki had also nominated another senior director as a full-member of
the Board. He had worked in India to look after production and engineering. Mr.
R.C. Bhargava was in the Board as Director (Marketing & Sales).

Products & Services upto February 2010

MUL is the undisputed leader in the passenger vehicles market. Company has a
wide range, design and specification in its products to cater different class of
customers. Company has the range of following models - maruti 800, maruti alto,
maruti baleno, maruti esteem, maruti Gypsy, maruti omni, maruti swift, maruti
versa, maruti wagon R, maruti zen & Suzuki grand vitara. Company's plant has
spread over a wide-ranging 297 acres area with three fully integrated production
facilities. On an average basis, company roll out 2 vehicles from its factory every
minute. With an incredible range of 11 models available in 50 variants, Company
has the potential to fulfill the requirement of different class of customers.
Company has introduced the 16 X 4 Hypertech engines across the entire Maruti
Suzuki range. This technology harnesses the power of a brainy 16-bit computer
to a fuel-efficient 4-valve engine to create optimum engine delivery. This means

14
every vehicle gets the ideal combination of power and performance. Company
also introduced Electronic Power Steering in its selected models for better and
greater maneuverability.

According to unconfirmed reports, Company may stop or reduce the production of

its Zen from this month end, to create a way for other large selling models like
Swift, WagonR and Alto. Company may come out with new models after this in the
coming months.

Transfer of Technology

Every minute two vehicles roll out of the Maruti Plant. It is therefore imperative
that the transfer of contemporary technology from our partner Suzuki is a smooth
process.

Great stress is laid on training and motivating the people who man and maintain
the equipment, since the best equipment alone cannot guarantee high quality and
productivity.

From the beginning it was a conscious decision to send people to Suzuki Motor
Corporation for on-the-job training for line technicians, supervisors and
engineers. This helps them to imbibe the culture in a way that merely transferring
technology through documents can never replicate. At present 20% of our
workforce have been trained under this programme.

15
Maruti's Ethos

Maruti's employees are our greatest strength and asset. It is this underlying
philosophy that has moulded our workforce into a team with common goals and
objectives. Employee-Management relationship is therefore characterised by:

Participative Management.

Team work & Kaizen.

Communication and information sharing.

Open office culture for easy accessibility

To implement this philosophy, we have taken several measures like a flat

organisational structure. There are only three levels of responsibilities ranging
from the Board Of Directors, Division Heads to Department Heads. Other visible
features of this philosophy are an open office, common uniforms (at all levels),
and a common canteen for all.

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Maruti's Vision

The Leader in the Indian Automobile Industry, Creating Customer Delight and
Shareholder's Wealth; A Pride of India.

Maruti's Core values:

Customer Obsession

Fast, Flexible & First Mover

Innovation & Creativity

Networking & Partnership

Openness & Learning

The people behind Maruti Suzuki

Total manpower: 4629 (out of which 93 are female employees)

The average age of all employees put together is 36.63 years

Number of workers: 3029

Number of supervisors/Executives: 1358

Managers and above: 242

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PRODUCTION AND SALES
MARUTI HAS INTRODUCED THE FOLLOWING MODELS ON LAST 28
YEARS.

Maruti 800 Dec 83

Omni Nov 84

Gypsy Dec 85
Maruti 800 (new) June 86
Maruti 1000 Oct 90
Zen Oct 93
Esteem Nov 94
Zen (automatic) Oct 96
Gypsy King Nov 96
Omni (E) Dec 96
Gypsy (E) Dec 96
New Maruti 800 Sep 97
1998 Esteem Oct 97
Zen (D) Aug 98
Maruti 800 (EX) Jan 99
Zen (LX) Jan 99
Zen Classic Aug 99
Omni XL Oct 99
Baleno Nov 99
Wagon R Jan 2000
Alto Jan 2000
Versa Nov 2001
Maruti Swift Mar 2005
MARUTI SX4 May 2007
MARITI KIZASHI Feb 2011

18
 MARKETING MIX
The 4P's of Marketing Mix are :
Product
Price
Place
Promotion
Products
Maruti Offers A Range Of Different Products
1. MARUTI 800, Std (metallic & non-metallic) and (with ac & without ac)
euro-II.

2. ALTO, Lx, Lxi, (spin version for Lxi), Vx, Vxi, (metallic & non-metallic)
euro-II.

3. BALENO, Sedan, altura (metallic & non-metallic) fully loaded euro-II.

4. ESTEEM, Lx, Lxi, Ax, Vx, Vxi, D, Di, Velocity (metallic & non-metallic)
euro-II.

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5. MARUTI GYPSY, Gypsy Soft Top & Hard Top 1.3 (metallic & non-
metallic) euro-II.

6. OMNI. Omni Cargo, Omni Amb. high roof, Omni Flat Roof 8 str, Omni Flat
Roof 5 str (metallic & non-metallic) euro-II.

7. VERSA, Dx, Dx 5s, Dx-2, Dx-2 5s. All euro-II models.

8. WAGON-R, Lx, Lxi, Ax, Vx, Vxi, (metallic & non-metallic) euro-II.

9. ZEN, Lx, Lxi, Vx, Vxi, D, Di, 2 Door, 2 Door-i, AT,

AT Easy drive -with various accessories to help handicapped take the
pleasure of driving a car. (metallic & non-metallic) euro-II.

10. SWIFT

The Swift looks shocking, will be affordable, and put Maruti back in the race.

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10. SX4

11. MARUTI KIZASHI

Maruti launches Eco-friendly vehicle

Omni Cargo LPG priced aggressively at Rs 1.78 lakh
Car market leader Maruti Udyog Limited today announced the launch of Omni
Cargo LPG.
It offers the following benefits:
Economy
Powered by a clean fuel, the Omni Cargo LPG is eligible for an excise duty
concession from the Government. It will attract an excise levy of just 16 per cent
compared to 24 per cent for similar vehicles run on conventional fuels. Its
operating cost will also be low owing to use of LPG fuel, and comparable to
diesel vehicles
Power, Performance and Design

21
The Omni Cargo LPG has a superior suspension, making it stable. With engine
power of 27 bhp, the Omni Cargo LPG will enable customers to transport goods
faster and cover a wider region for delivery. The vehicle design allows the goods
to be carried in an enclosed area, keeping them safe and secure.
Safety
Given the obvious benefits of LPG-powered vehicles and in the absence of LPG
vehicles offered by manufacturers, several consumers have retro-fitted LPG kits.
The Omni Cargo LPG comes with an authorized LPG kit, certified for quality
and safety.

Product Positioning

Maruti has strategically decided where their product will be positioned in the
market. They consider position' held by their cars in the market will be how they
want the products to be perceived in terms of factors such as brand image, value
for money, price availability etc. This is done in relationship to the competitors.

Maruti 800 & Omni have no competition in the market the are the only
players in the market in Segment A

Zen, Alto & Wagon R are positioned against Daewoo' s Matiz; Hyundai -
Santro ; and Tata Indica. This is the segment where Maruti is facing stiff
competition.

In segment C Esteem has competition with Ford ikon , Opel corsa, Hyundai's
Accent. Baleno is facing competition with Honda city, Mitsubishi Lancer,
Opel Astra.

Price is the value (usually measured in monetary terms) that a seller agrees to
sell a product or service for and the value at which the buyer agrees to
purchase.

The exchange transaction can either be :

Fixed: the price is given and the buyer either agrees or disagrees;
22
 Negotiable: buyer and seller bargains until a mutual price is agreed;

A Variation: one element may be fixed and the other elements negotiable.

The method used will vary from product to product and from market to market.
With some products the prices may be fixed and no negotiation will take place
like in case of cars

Price the company will charge will greatly affect the eventual level of sales. The
price is an integral part of the product and will perform many tasks in bringing
about eventual purchase. The most important of these tasks is to match the value
and the benefits expectation of the consumer. Too high a price in relation to
perceived product benefits, the customer might think he is not getting value for
money and will buy products from competitors. Too low a price and the customer
will think the product inferior and again, reject it.

23
 Price
Pricing Objective Of Maruti

Achieve a specific target return on investment or on the net sales

Maintain and enhance market share

Meeting competition

Maxim

Stabilize prices

Methods Used In Pricing Maruti's Products

Maruti uses two methods while pricing its products. These are as follows:

Costplus pricing: this method of pricing has an immediate attraction

because of its apparent simplicity. The cost of the product is worked out by
allocating a portion of the fixed cost to each product and then adding it to the
variable costs. This gives the total cost of each product and the percentage
profit desired can be added to give the selling price.

In using cost-plus pricing there is an assumption made that having established the
total cost price the product manager need only add the desired mark-up. But this
does not take into account the fact that the competition may be offering a similar

24
product at a lower price, because of greater productivity or willingness to work
on a lower mark-up.

Similarly the customer may be unwilling to pay this price either because they can
purchase the similar product from the competition.

So Maruti keeps in mind the total cost of the product they have incurred along
with that they follow the market pricing.

Market Pricing: Maruti cannot set its own prices in isolation from that what
is happening in the rest of the industry. The competitors in the market will
have cost and price structure which is investigated and analyzed thoroughly.

As perfect competition prevails in Indian Automobile Sector, any price

movement instigated by any of the competitors or any change in government
policy will cause corresponding movements by the competition and this the most
important point which Maruti considers while playing around with product
prices.

Procedure For Setting The Prices Of Maruti Products

25
 PLACE
Place is another key marketing mix tool, it includes various activities the
company undertakes to make the product accessible and available to the target
customer. This element of marketing mix, can be broken down into two clear
categories:

Distribution channel option;

Physical distribution.

Distribution channels are the alternative method that might be chosen in making
the product / service available to the customer for purchase. In simple terms the
channel of distribution is where the customer will expect to see, and be able to
purchase, the product or service. It is worthwhile breaking channels of
distribution down further into two major areas:

1. Direct distribution: Many companies choose to distribute their product

directly to their customers without the use of an intervening organization,
known alternatively as an intermediary or middlemen. Companies opt for this
distribution channel because of many reasons, few of them are

Maintaining control over all the elements of marketing mix. This will include
the way the product is presented, its selling price, where the product is offered
for sale and how the product is promoted and sold.

Cost : whether there are cost savings in marketing directly rather than
indirectly will depends on the product and the market circumstances.
Superficially there appears to be a saving as selling direct eliminates the need
to pay a percentage amount, in terms of a reduction on expected selling price,
to the intermediary for undertaking some of the marketing tasks.

26
 Building customer relations: Dealing direct with the end-consumer enables
the producer to communicate and build a very close relationship with the
customer.

Focused, specialized attention: A company selling direct can present its

products or services in concentrated and focused way to the customer
unhindered by immediate competitors' products.

DIRECT DISTRIBUTION

2. Indirect distribution: Many companies choose to use middlemen or

intermediaries to bring their products to the market. An intermediary is an
organization or an individual, which acts as a conduit for product or service
delivery, between the producer and the end-customer.

There can be one, or more, intermediaries in the distribution chain from the
producer to the end-customer and each may purchase the goods either for resale
to end-customer or act as some form of agent, passing on the product to another
intermediary.

Customer
Customer Wholesaler
Wholesaler Retailer
Retailer
INDIRECT DISTRIBUTION

Customer
Customer 27Customer
Customer Producer
Producer
SET
SET
PRICING
PRICING
OBJECTI
OBJECTI
 Estimate
Estimate
the
the costs
costs

Identify
Identify
target
target
market
market

Estimat
Estimat
ee levels
levels
MARUTI makes its cars available
of
of to its customer through indirect distribution
network with one-level demand
demand
of intermediary involved in the chain. The intermediaries
are known as Dealers.Position
Maruti's dealer network is the largest for any car
Position
the
manufacture in India. Maruti
thebelieves that its relationship with the customer does
product
product
not end with the purchase of a car. From its inception, Maruti was committed to
providing an excellent Analyze
network,
Analyze that would facilitate customers in purchasing
competi
competi
vehicles, accessing spare parts, and getting their vehicles serviced. As on date
tors'
tors'
Maruti has 182 Dealers, 280 Dealer workshops, 1333 Maruti Authorized service
price
price
station, 26 Spare part (stockists)
offers outlets and 11 MGP Shoppe boutiques spread
offers
over 665 cities across India.
Conside
Conside
rrthe
the
effect
effect
Order Processing: Marution has a computerized order processing. All the dealers
on
of Maruti are connected vendors
vendors
through Intranet. The orders are placed online. The
&&
dealer has to sent an indent to the Sales & Dispatch Department of Marketing
dealers
dealers
Division, in which the dealer specifies the demand for a particular model, colour
etc. The orders are placedSelect
Select
every day. & The next morning the cars are dispatched
the
the
to the dealer. Funds are deducted
final from the working capital account of the dealer.
final
price
priceto know what is actually demanded in the market.
Dealers also help the company
It acts as a link between the customers and MUL.
Make
Make
Maruti makes it a pointcertain
certain
that there is no delay in processing the orders and
itit isis
invoicing of the products. The speed of delivery is a major way of gaining
consiste
consiste
nt
nt with
competitive advantage, which withMUL has capitalized on.
overall
overall
Promotion compan
compan
yy policy
policy
28
Promotion is the communicative element in the marketing mix and it comes into
use only when the other three P's, product, price and place, have been developed
and coordinated and are ready to meet the needs of the identified target market.

Because products, customers and markets are complex and different the
promotional tasks that need to be undertaken will also be complex and different
necessitating the use of many different types of communication techniques.
These include activities such as TV and press advertising, sales promotion,
maintaining good relations with the press to obtain free publicity, and employing
sales to talk, discuss product benefits with the customer and hopefully form long-
term mutually beneficial relationships. These different techniques are called
Promotion mix.

Role That Product, Price & Place Play In Promotion

If the product, service or brand promises more customer benefits than actually
exist or are perceived to exist, then the customer will be disappointed after trial
and no matter how aggressive and intensive the advertising, the customer will
feel aggrieved and even cheated and so will not purchase again.

Similarly if the price is too high or too low in relation to the product value, or if
the chosen channel of distribution is not at the level expected, then advertising or
sales promotion, while initially creating interest or even purchase, will find that
the customer disappointed will militate against repeat purchase and might also
cause long-term corporate damage

The product, price, and place will also communicate a good or bad message to
the customer.

Maruti's Promotional Campaign

MUL takes care of certain factors while planning a promotional campaign. These
are as follows:
29
 Promotion Objective: MUL decides the promotion objective i.e. what does
the company want to achieve through the use of communication techniques;
like, to create awareness of the new car models launched and existing models,
to reinforce existing beliefs, to get customer to buy the car, etc.

Promotion Strategies: What major methods will be used and why, to achieve
these objectives. This stage will consist of choosing one or more of the
promotional mix techniques. MUL selects the best promotional tools
advertising, sales promotion, publicity etc to promote its product.

Target audience: MUL defines the target audience at which it is going to aim
its messages. This also involves constructive detailed customer profile for the
target segment.

Message: The message content and the method of presentation is kept in line
with the product positioning statement.

Promotional Tactics: The promotional strategy is broken down into its

constituent parts. For example: If above the line advertising strategy is used
then the elements of the media mix are also selected in detail. If below the
line sales promotion strategy is in place then various methods like free
holiday, incentives, etc are studied in detail.

Budget: Amount of money is allotted and Maruti sets promotional budget

every year. In the year 2001-2002, Rs. 900 million were spent on
advertisement, publicity, sales promotion & business development.

Feedback, Monitoring and Control Mechanisms: Feedback, monitoring

and control mechanisms are implemented to make certain that agreed
promotional objectives and performance indicators are achieved. This process
is operated through the use of some form of market research.

Integration: Finally all the methods used are integrated in a cohesive,

consistent, logical manner to meet the needs of the target audience.
30
 Promotional Mix Of Maruti Udyog Ltd.
Advertising

Sales Promotion

Publicity

Advertising

Any paid form of non personal selling of the company's product by an identified
sponsorer is called as advertisement. Reliance has engaged in many types of
advertising campaigns which have successfully helped Reliance India Mobile to
get itself established in the Indian Telecommunication Society.

Advertising is used by Maruti to

Inform: about the new products(Alto, Baleno, WagonR) launched in the

market by MUL

Educate: about the need for road safety training or the use of seat belts

Reinforce: give reason (largest service network) why the customer should
remain with the brand.

Persuade: customer to buy Maruti products.

Sales Promotion

The second major promotional mix method used by MUL is the use of sales
promotion also known as below the line promotion. Sales Promotions are short
term incentives used to boost sales. It takes the form of some kind of extra value
that is added to the product for the period of the promotional campaign. The
MUL sales promotion strategy is to increase sales, either overall or on specific
models. Most of the schemes of sale promotion are at national level. Local level
31
schemes are formulated and implemented by regional offices. MUL does its sale
promotion in three basic ways:

Consumer sales promotion: MUL promotion is usually a short term

incentive that urgently trumpets the message to the consumer buy now rather
than later otherwise it will be too late and the opportunity will be lost'. MUL
has been gifting Gold coins to its customers on purchase of Maruti Esteem,
which is relatively slow moving model. Also customers are offered free
holiday packages to various destination within & outside India, discount
coupons, free magazine subscription, etc.

Dealer sale promotion: Most of the sales promotion schemes are for dealers.
Generally incentives are given to dealers based on the target achievement.
The incentives can also be a free holiday package abroad. In order to clear old
stocks of relatively slow moving models, MUL announces some special
incentive scheme, which are paid on lifting those specific old vehicles in
stock.

Finance company sales promotion: MUL gives incentives to finance

companies & financial institutions as subvention on certain models, which
they use to incentives customers.

Publicity

The next major promotional mix technique used by MUL is the use of publicity.
Publicity is any form of planned, unpaid for media exposure that promotes the
company or its products in favourable light. This consists of items of news or
stories that appear in newspaper, magazines and on the television about the
organization, their products, their directors, their employees, etc. MUL
understands the value of good publicity. Marketing Department of MUL is
concerned in using Public Relations and Publicity as a planned element of the

32
promotion mix specifically to communicate favourable message to its customer
about the organization's existing & new products

Marketing Strategies of Maruti Udyog Limited

Marketing strategy is the complete and unbeatable plan designed specifically for
attaining the marketing objectives of the firm.

The marketing objectives indicate what the firm wants to achieve; the marketing
strategy provides the design for achieving them.

It is the marketing strategy that decides the success at the business unit level
which in turn decides the total corporation's success. The link between marketing
strategy and overall success is indeed direct and vital. And in this linkage lies the
significance of marketing strategy.

Maruti Udyog Ltd. has an aggressive marketing strategy which is very well
understood when one goes through the in-depth study of 4-P's of marketing and
price strategies with respect to its products as explained in the previous section.
One comes to the conclusion that maruti has a well defined roadmap to success
i.e to reach its ultimate objective of realizing Customer Satisfaction through
value for price products.

Formulating the Marketing Strategy

Marketing strategy is not a nebulous idea. It is a well oriented game plan. And
there are definite ways of formulating it. Basically, formulation of marketing
strategy consists of two main steps.

Selecting the target market

33
 Assembling the marketing mix

Selecting the target market

Maruti has successfully selected the car market which its going to cater to these
are Mid Size Cars

Segment-A Cars (catering to Middle Income group)

Segment-B Cars (catering to Upper-Middle Income group)

Segment-C Cars (catering to High Income group)

The details of these are prvided in previous sections.

Assembling the marketing mix

Assembling the marketing mix means assembling the 4-P's of marketing in the
right combination as explained in the previous section. Involved in this process
are the choice of the appropriate marketing activities and the allocation of the
appropriate marketing effort to each one of them. The firm has to find out how it
can generate the best sales and make profit. It plans different marketing mixes
with varying levels of expenditure in terms of the possible sales and profit. It
then chooses the combination that is the best according to its judgment.
It is not though that the firm can take rest, once it has assembled and put through
its marketing mix. The marketing mix is a dynamic entity. The mix has to be
modified and manipulated depending on requirements.
Markerting Strategies Fall Under Two Generic Categories :

Price Based Marketing Strategy

Differentiation based Marketing Strategy

Price Based Marketing Strategy

34
Maruti Basically plays the pricing game to cut down the competition in market.
This the real trump card which has worked for past many years in India. But now
this strategy has failed for automobile sector. Now it can work only a new trump
card which is technology and Maruti has started using this along with price to
win even in international markets.
Maruti is continuously winning the price game for the past many years and to
this habit to win Maruti is planning to launch many cars in near future as the
price difference of just Rs. 25,000 for each sub category. This product
differentiation will provide Maruti a niche in the market to cater to different
market segments of customers effectively. This product launch will be so fast that
within an year we will be familiar with at least five new models of Maruti.
But another card to win this competition is technology. Maruti is trying very hard
to get this card along with its global technology partner Suzuki. Recently
launched Baleno is a technological milestone for Maruti. Other forthcoming cars
also will be technologically way high. In light of growing sluggishness in the
automoble market as a result of uncertainty over the sales tax issue, Maruti
Udyog Limited as the leader of automobiel market announced strong initive to
kick start the market.
Differentiation based Marketing Strategy
Market Strategy based on Differentiation works on the principle that any aspect
of the offer and any activity of the firm can be made a distinctive compared with
the competing offer.
Maruti time and again have been successful in using this strategy in gaining a
competitive edge over its own previously launched models (discussed in the
Price section of the Marketing Mix) & in the market over its competitors.
The host of products that Maruti encases within itself is unmatched till date by
any Indian or Foreign car manufacturer. All this have been discussed in the
Product section of the Marketing Mix.

35
 CHAPTER-3
ANALYSIS
AND
INTERPRETATION

36
Comparison With Other Market Players
MARUTI 800

Feature Maruti 800 Deawoo Hyundai Fiat Uno Tata Indica Maruti Advantage
Matiz Santro

No of Lower emissions, superior

4-valves 2-valves 3-valves 2-valves 2-valves
Valves performance
Electronic Precise running of engine
16-bit 8-bit 8-bit 16-bit
Control Not Known in all conditions- i.e., faster
computer computer computer computer
Module response
Economically priced spares
Design Tried & New Design Copy from Old Shape New Design Easy repairable through
Trusted Suzuki
Maruti network across
Design Shape
India.
Economical
Price entry level Expensive Expensive Expensive Expensive Affordability for all
price

ESTEEM

Hyundai Maruti
Feature Esteem Ford Ikon Indigo
Accent Advantage
Power-to-weight 92
99 70 79 Faster pick-up.
Ratio(bhpx1000/ (94bhp,
(85bhp, 860kg) (69 bhp, 978kg) (85bhp, 1065 kg) Better acceleration
kg) 1023kg)
Extra power and
No. of
4 2 3 2 superior fuel
valves/cylinder
efficiency
Electronic Faster engine
16 bit Not known 8 bit Not known
Control Module response
Total Cost of Easy on your
Ownership(Rs./k 3.53 4.24 4.14 Not Known purse. Best value
m)* for Money
Fuel Best fuel economy
Efficiency**(km 12.6 11 11 NA among Petrol
pl) sedans

37
Source: Published literature & brochures.
*Autocar India December 2002(Owner reported cost of ownership)
**Autocar India November 2002. (Owner reported fuel mileage)

MARUTI ZEN

Maruti Deawoo Hyundai Tata

Features Fiat Uno Maruti Advantage
Zen Matiz Santro Indica
Best engine design means
greater efficiency from
Performance 993 cc 796 cc 999 cc 1242 cc 1405 cc optimum size. Smaller
engine means more wear
and tear, larger means
greater fuel consumption
4-valve per cylinder
configuration allows for
No of valves 16-valve 6-valve 12-valve 8-valve 8-valve more efficient burning of
fuel, better engine response
and lower emissions.
Best power in relation to
Power to 60 bhp for 52 bhp for 55 bhp for 60 bhp 75 bhp weight means nimble
weight ratio 755 kgs. 800 kgs. 776 kgs. for 840 for 980 movement and fantastic
kgs. kgs. power delivery combined to
excellent fuel consumption
Electronic Precise running of engine in
16-bit 8-bit 8-bit Not
Control 16-bit all conditions - i.e. faster
computer computer computer known
Module response
Electric Ordinary Latest in technology,
Ordinary Ordinary Ordinary
Power Power unmatched road feel and
Steering Power Power Power
Steering Steering on feedback and fewer moving
steering steering steering
on Vxi SP parts = more reliability
Kenwood Daewoo
Not Not Not Factory fitted stereo for
Stereo Stereo in Stereo in
available available available miles of musical pleasure
Vxi, D SE, SP

Electric Electric Not Not Not Not Convenience feature for toll
Window Window available available available available booths, fast food joints etc.
One-Touch
for driver

BALENO SEDAN
38
 Hyundai Hyundai
Baleno City Ford Ikon Corsa 1.6 The Baleno
Feature Accent Accent
Sedan 1.3 DX 1.6 NXT GSi Advantage
GLS Viva
Engine Power at your
1590 cc 1495 cc 1343 cc 1597 cc 1599 cc 1598 cc
Capacity command .
Better breathing
characteristics, less
Number of
16 12 16 8 16 8 stress on engine and
valves
hence better engine
life.
Highest torque in its
class; Quick
acceleration;
Maximum 132@3000 125@3500 111@4700 130@2500 144@4499 126@3200
Minimum gear
Torque
changesdue to flat
(Nm/rpm)
torque curve;
Reserve power and
better driveability.

Maximum 94@6000 94@5500 102.6@579

90@6400 91@5500 92@5600 Excellent Power to
Power 9 Weight Ratio for
Output maximum fuel
(bhp/rpm) efficiency

Better handling and

silk- smooth ride on
Suspensio McPherson McPherson McPherson McPherson McPherson McPherson all surfaces.
n - Front strut strut strut strut strut strut Minimised road
noise and vibration
in passenger cabin
Better handling and
silk- smooth ride on
Heavy duty Crank
Suspensio McPherson all surfaces.
Dual link Trapezoidal twist beam Dual link Compound
n - Rear strut Minimised road
system Suspension
noise and vibration
in passenger cabin
Kenwood System
Stereo
Present Not present Not present Present Present Present with Remote
System
Control

Elect. Better Driving

Present Not present Not present Present Not present Present
controlled Comfort
rear view
mirror

39
Front Seat
Comfortable
Height Present Present Not present Not present Present Not present
Driving Position
Adjuster
Power Top tilt Convinience of
Present Present Not present Not present Present
Antenna antenna Operation
Keyless
entry with Unparalled security
Present Not present Not present Not present Present Not present
security for your car
Alarm
Rear
Present Not present Not present Not present Not present Not present
Spoiler

Alloy Present Not present Not present Not present Present Not present
wheels

ALTO
ENGINE PERFORMANCE

Feature Alto Vxi

Santro Zip Plus Indica LSi Palio 1.2 The Alto Advantage
Point (Spin)
Dual
Two ignition coils result
distributor-less Distributor-less
Ignition Not Distributor in faster start and efficient
digital ignition ignition (Single
available based ignition ignition as compared to
(DDLI) (Two Ignition Coil)
single coil.
Ignition Coils)
Onboard
Greater convenience,
Engine Not available Not
Available Not available faster repair and low
Check available
maintenance cost.

Faster, precise and

Electronic
16 bit 16 bit 32 bit accurate engine response
Control 8 bit computer
computer computer computer adding to overall
performance.
Power Electronic Hydraulic Hydraulic Speed Sensitive for
Hydraulic Power
Steering Power Power Power greater control on fast
Steering
Steering Steering Steering drives and low
maintanence cost.

Flat torque Flat torque Irregular torque Irregular Irregular Comfortable city driving
curve curve curve torque torque curve eliminating need to
curve change gears frequently.

Faster pick up -

40
 Exhilarating performance.

1C4V Better breathing

Not
Technology Available Not available Not available characteristics with more
available number of valves. This
reduces load on the engine
and increases their life.
Better fuel management,
lower emission, better
Total no. of
16 engine performance and
valves 12 8 8
more available power.
Better breathing
characteristics.
Max.
speed*(km/h 148 153 154 Thrilling drive.
r) 156

More available power per

Power to
tonne of load. Better
weight ratio 84 81 74.6 71
pickup, faster
(bhp/tonne)
acceleration.
Engine 1086cc 1045cc 1242 cc Optimum engine
displacement 1061 cc displacement leading to
longer life.
Turning Better manoeuvrability
4.6 4.4 4.9 5.1
Radius(m) and ease of parking.

INNOVATIVE FEATURES

Feature Alto Vxi Santro Indica

Palio 1.2 The Alto Advantage
Point (Spin) Zip Plus LSi
'Key not Not Not Not
removed' Reminder if key is left in the ignition
Available available available available
reminder switch.
chime

More user-friendly. Is very useful

'Lights on' Available Not Not Not during foggy and rainy conditions
reminder available available available when we switch lights on during
daytime and tend to forget switching
them off.
Electronic Available Not Not Not Improves driving efficiency by
Tachometer available available available changing gears at the right RPM.
Also, one can check the rpm during
idling and find out whether the engine

41
 is properly tuned or not.
Electronic
Not Not Allows two people to log in distances
Odometer Not
Available available available covered simultaneously. Since, it is
and Multi- available
digital, it is tamper-free.
trip meter
*Autocar India issue 2002

WAGON R
Unmatched Performance
Wagon R
64 bhp low friction engine
16 valves (4 valves per cylinder)
Power to weight ratio = 77.6 bhp/tonne Power to weight ratio = 73.8
16 bit computer
On board engine check
Electronic Power Steering
Fuel Efficiency = 13.7 km/l
(Owner reported mileage in NFO
survey)
Wagon R
Fully flat reclining front seat and
reclining rear seat
Santro WagonR Advantage
63 ps engine Superior engine, better fuel efficiency, more
power lower emission
12 valves (3 valves per Superior engine, better fuel efficiency, more
cylinder) power lower emission
Faster acceleration, better pick up
bhp per tonne
8 bit computer More intelligent & faster engine response
No on board engine check Low maintenance costs, faster repairs
Ordinary Power Steering Lesser load on engine, more steering control a
higher speeds
Fuel efficiency = 13.3 km/l Better fuel economy
Unmatched Space and Comfort
Santro WagonR Advantage
Not present Airline seating comfort

Electronic power steering (EPS) Not present Flexible seating and more space for luggage
Total boot space: 312 litres Total boot space: NA Maximum boot space

Maruti Gypsy King MPFI

42
 Maruti
Mahindr Command Tata The gypsy King
Feature Gypsy King Marshal
a 550 DP er Sumo Advantage
MPFI
62 bhp 62 bhp Most powerful four
80 bhp 55 bhp @ 68 bhp @
Power @4500 @4500 wheel drive in the
@6000 rpm 3000 4500
rpm rpm country.
1370 kg 1670 kg (Soft Easier drivability on
Kerb Weight 985 kg 1355 kg 1700 kg
Soft top top) muddy ground and
in sandy areas

Power to Faster acceleration.

weight Engine can survive
Soft top 81.22 45.75 45.25 32.93 40
ratio(bhp/tonne in extreme climatic
) conditions

Ground 210 mm 200 mm 200 mm 200 mm 160 mm Better off-road

Clearance handling

Quick response in
emergency or heavy
Turning Radius 6 m 6.34 m 6.6 m 6.6 m 5m traffic situation
Better
maneuverability.

43
 DATA ANALYSIS & FINDINGS

Questionnaire results

Percentage Effective Suggestions for MUL

5%
14%

Your self
46% Spouse
Children
Friends/relatives

35%

Percentage effective suggestions for HYUNDAI

1%
Your self
23% Spouse
Children
Friends/relatives
46%

44

30%
Percentage effective suggestions for TATA ENGG

10% 2% Your self

Spouse
Children
36%
Friends/relatives

52%

Percentage of remeberence of car ads

10% 7%
2% 2%

8% Alto Versa
15% Santro Wagonr
Zen Maruti 800
Esteem Chevorlet
15% Honda City Accent

20%

13% 8%

45
 Do you remember the ad of your car

86%
100%
80%
60%
40%
14%
20%
0%
Yes No

Maruti Tata Engg Hyundai

Yes No Yes No Yes No

86% 14% 88% 12% 93% 7%

The above table shows that how much the customer has satisified with the
performance of their cars.

Maruti Tata Engg Hyundai

Yes No Yes No Yes No

78% 22% 92% 8% 86% 14%

The above table shows how much the customers are satisfied with the after sale
service of their cars.

Maruti Tata Engg Hyundai

Yes No Yes No Yes No

15% 85% 11% 89% 5% 95%

The above table shows the percentage of satisfaction level of the customers with
their car/dealer/car company.

Maruti Tata Engg Hyundai

46
 Yes No Yes No Yes No

95% 3% 80% 18% 85% 13%

The above table shows the customer survey for value for money figures.

47
 Customer Survay for USP of Maruti cars
20%

Price
Comfort
47%
Pick up
15% AC performance

18%

Customer Survey for USP of Tata Engg cars

36% 34%

Price
Comfort
Pick up
AC performance

5%
25%
Maruti Tata Engg Hyundai

Yes Customer
NoSurvey for
Yes USP of HYUNDAI
No Yes
cars No

55% 40% 45% 51% 70% 26%

28% 28%

Price
Comfort
Pick up
AC performance

24% 20%
48
The above table shows customer survey for any room for improvement in
external look of the car.

Maruti Zen gets the best rating = 38%

Hyundai Xing a close next = 32%

While Tata Indica struggling at = 26%

Where as more than 45% of the people surveyed said Maruti 800 is the car
that delivers value for money truly.

49
Swot Analysis Of Maruti Udyog Limited.

Strengths
Strong brand equity.
Efficient low cost vehicles which are reliable and of high quality.
A strong vendor base.
Extensive network of showrooms, dealer workshops and authorised service
stations.
Collaboration with Suzuki, know for their technological superiority bringing
together performance, economy, durability and comfort.
Strong financial positions

Weakness
Lack of in house R&D to develop new models of cars, with new models
being restricted to cosmetic changes and price cuts.
Not many models to compete the new entrants
Dominance mainly in the entry level cars segment (Maruti 800)
Delivery system

50
Opportunities
A burgeoning work force and growing middle class population

Growing demand for fuel efficient low cost vehicles which were reliable and
of high quality
High growth potential for its exports as demand for Maruti cars in Europe
increasing.
Indian customers are mainly value buyers demanding a better overall
package. MUL is poised in a better position than other players in the market
to capitalise on this opportunity
Threats
Over reliance on Suzuki for technology
Entry of new players (especially Tata Indica) with newer and better
technologies in the small car segment
Complacency due to market leadership and high market share

Lack of newer models, product range and technology to compete with new
entrants
Thus, building on its performance record and ties of trust it has forged over the
years, Maruti remains committed to its vision of being an internationally
competitive company in terms of products and services and provides value and
satisfaction to its customers worldwide. It is no wonder then, that millions of
people, while making one of the most important decisions of their lives go for
MARUTI. It is precisely these strengths that Maruti has to capitalise upon to
gear up to face competition and retain its position of strength in India whereas
capturing the foreign markets to emerge as a global leader in passenger car
segment.

51
CHAPTER-4
CONCLUSIONS

&
52
RECOMMENDATIONS

53
 CONCLUSION

Indian automobile is of Rs. 30,500 crore and its 86% share is captured by small

size car which are offered by Maruti Udyog Limited, Hyundai Motors, Telco and

till recently Daweoo.

Company should not comprise on technology of cars in make cheaper if a

company does so, it will find itself out of the game. Referee 'the car customer

will announce you not fit for the game.' Zen, Indica has to recently upgrade

engine in less than a year after the launch and Hyundai and start offering a

new variant with power stearing option barely a year after it hit the Indian

roads.

Very few companies or better to say there is only one company in the Indian

market Fiat, Siena 'secure in Siena' using the safety or security as its USP.

This concern is hardly exploited in India and should be looked into.

Price of the product in not only factor which can make a company winner in

Indian passenger car market. A judicious mix of comfort, luxury, space,

design, looks and technology at a reasonable price. Should e made so as to

offer value for money concept to customers.

54
Recommendations for Maruti

From 1997 in 2000 one and half years every assumption MUL has made has
proved wrong. Every strategy have back fired on it and despite the fact it has
biggest range of products, the cheapest car in the market, in the largest
marketing and service network and better cost structures then anyone else in
India, it lost market share from 82.2-52.3% market share from 1997 to 2000.

Maruti should show concistency in its pricing policy otherwise customers feel
cheated who purchased the car just before the price fall.

Upgrade the existing models time to time with innovative technology,

interiors, design and value added features and accessories.

It should expand its dealership and service network especially in eastern

Indian region.

According to Recent Sales Satisfaction survey MUL lies at the bottom of the
chart

Indian Sales Satisfaction Index (SSI)

HM/Mitsubishi
Honda Siel
115 114 114 Ford India
M&M
110 Dawood Motors
109
110 Hyundai
105 MUL

SSI Scores 105 102 102

100
Thus Maruti should train their technical staff to deal with customer who is in
95
the workshop to get their cars serviced/repaired
Companies No doubt it is hard to

55
 manage and handle such a big network but the company has to handle it

properly to satisfy its customers. We should always remember that loyal and

satisfied customer give a chain of new customers.

Maruti is providing just 33% of the total industry and having the 50% of

market share but this is a quite impossible to job retain 50% of market share

with just 33% production capacities so any how Maruti should try to increase

its production capacities to retain its market share in near future.

Maruti should launch the CNG variant of its models used for public transport.

It should improve the interiors of the cars. A survey should that 67% of the

people favoured this decision.

BIBLIOGRAPHY

- Principles of Marketing, by Philips Kotler

- International Business, by V.K. Bhalla.

56
 - Auto Journals

- Economic Times
- Times of India
- Over Drive
- Auto India
- Business World

- www.marutiudyog.com

- www.domain-com

- www.agencyfaqs.com

ANNEXURE

QUESTIONNAIRE

PERSONAL PROFILE
I. NAME:
II. AGE:
III. ADDRESS:
IV. TELEPHONE:
V. OCCUPATION:

VI. EDUCATION
Under Graduation Graduate
Post Graduate Any other

VII. TYPE OF FAMILY

57
Nuclear Joint Family
VIII. MARITAL STATUS
Married Unmarried
Any other

IX. FAMILY INCOME (RS. Per month)

5000-10000
10000-15000
15000-20000
20000 & above

1. Which type of shoes do you like to wear?

Formal Sport
Casual Any Other
2. Do you wear Branded Shoes?
Yes No
Indifferent

3. Are you Aware about the following Brands of Shoes?

Nike Adidas
Action Reebok
Any Other

4. Which Brand do you like the most?

Nike Adidas
Action Reebok
Any Other

5. Are you satisfied with the quality of preferred brand?

Yes No

58
 6. Up to what extent do you consider following features of Brand while
Purchasing?
Large Extent Some Extent Least Extent
Price
Quality
Size
Design
Color
Durability
Availability
Brand image
Special offers

7. How do you get aware about this particular Brand?

Advertisement Sales Persons
Friends Exclusive Showrooms
Any Other

8. From where do you like to purchase your Branded shoes?

Departmental Stores Ordinary Showrooms

Exclusive showrooms Any other

9. If the price of your preferred brand increases will you purchase again?
Same brand cheaper brand
Any other brand

10. How often do you buy branded shoes?

Once a Year Twice a Year
Thrice a Year Seasonally
Special occasion Any other

59
 11. What kind of promotional tool you prefer?
Lucky coupon Free gift
Discount Buy one get one free

12. Up to what extent have you satisfied by the following attributes?

Highly Satisfied Neutral Dissatisfied Highly dis-
Satisfied satisfied
Price
Brand image
Quality Size
Comfort
Durability
Any Other

13. Where any increase in price of this brand, is that Effect your purchase
decision?

Yes No
Indifferent

14. Would you like to buy another brand if all the attributes are Available in
other brand?

Yes No

60
15. Do you think weight is a factor for choosing brand?

Yes No

16. Do you normally switch over the brand?

Yes No

61