Maruti Suzuki

Marketing mix

Submitted to- Dr. Anurupa B Singh

Submitted by-
-Chetan
-Shobhit
-Pankaj
-Anshu
-Puneet
1
 -Ishan
CONTENTS
Serial Particulars Page
No. No.
1 Acknowledgement 3
2 Company History And 5
Background
3 India Four Wheeler 7
Industry
4 Facts about Indian Car 9
Market
5 Market Scenario (2008-09) 10
6 Market Segment Analysis 11
7 Objective of the Company 11
8 Marketing Mix (Product) 12
9 Marketing Mix (Price) 13
10 Marketing Mix (Place) 13
11 Marketing Mix (Promotion) 14
12 SWOT Analysis 14
13 Key Strategic Initiatives By 17
Maruti
14 Factors that influence the 19
consumer’s buying decision
15 Business Environment 20
Factors
16 Conclusion 22
17 Bibliography 23
 ACKNOWLEDGEMENT
We take this opportunity to convey our sincere thanks
and gratitude to all those who have directly or
indirectly helped and contributed towards the
completion of this project.

During the project, we realized that the degree of

relevance of the marketing strategies being imparted in
the industry is very high. The marketing strategies
study enabled us to get a better understanding of the
nitty-gritty of the company.

We would also like to thank my batch mates for the

discussions that we had with them. All these have
resulted in the enrichment of our knowledge and their
inputs have helped us to incorporate relevant issues
into our project.

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 Maruti suzuki India LTD
Maruti Udyog Limited (MUL) was established in Feb
1981 through an Act of Parliament, to meet the
growing demand of a personal mode of transport
caused by the lack of an efficient public transport
system. It was established with the objectives of
-modernizing the Indian automobile industry, producing
fuel efficient vehicles to conserve scarce resources and
producing indigenous utility cars for the growing needs
of the Indian population. A license and a Joint Venture
agreement were signed with the Suzuki Motor
Company of Japan in Oct 1983, by which Suzuki
acquired 26% of the equity and agreed to provide the
latest technology as well as Japanese management
practices. Suzuki was preferred for the joint venture
because of its track record in manufacturing and selling
small cars all over the world. There was an option in
the agreement to raise Suzuki’s equity to 40%, which it
exercised in 1987. Five years later, in 1992, Suzuki
further increased its equity to 50% turning Maruti into a
nongovernment
organization managed on the lines of Japanese
management practices. Maruti created history by going
into production in a record 13 months. Maruti is the
highest volume car manufacturer in Asia, outside Japan
and Korea, having produced over 5 million vehicles by
May 2005. Maruti is one of the most successful
automobile joint ventures, and has made profits every
year since inception till 2000-01. In 2000-01, although
Maruti generated operating profits on an income of Rs
92.5 billion, high depreciation on new
model launches resulted in a book loss.

COMPANY HISTORY AND

BACKGROUND
The Evolution
Maruti’s history of evolution can be examined in four
phases: two phases during pre-liberalization period
(1983-86,1986-1992) and two phases during post-
liberalization period (1992-97, 1997-2002), followed by
the full privatization of Maruti in June 2003 with the
launch of an initial public offering (IPO).The first phase
started when Maruti rolled out its first car in December
1983. During the initial years Maruti had 883
employees, a capital of Rs. 607 mn and profit of Rs. 17
mn without any tax obligation. From such a modest
start the company in just about a decade (beginning of
second phase in 1992) had turned itself into an
automobile giant capturing about 80% of the market
share in India. Employees grew to 2000 (end of first
phase 1986), 3900 (end of second phase1992) and
5700 in 1999. The profit after tax increased from Rs
18.67 mn in 1984 to Rs. 6854.54 mn in 1998 but
started declining during 1997-2001. During the pre-
liberalization period (1983-1992) a major source of

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Maruti’s strength was the wholehearted willingness of
the Government of India to subscribe to Suzuki’s
technology and the principles and practices of Japanese
management. Large number of Indian managers,
supervisors and workers were regularly sent to the
Suzuki plants in Japan for training. Batches of Japanese
personnel came over to Maruti to train, supervise and
manage. Maruti’s style of management was essentially
to follow Japanese management practices. The Path to
Success for Maruti was as follows:

(a) teamwork and recognition that each employee’s

future growth and prosperity is totally dependent on
the company’s growth and prosperity.
(b) strict work discipline for individuals and the
organization.
(c) constant efforts to increase the productivity of labor
and capital.
(d) steady improvements in quality and reduction in
costs
(e) customer orientation
(f) long-term objectives and policies with the
confidence to realize the goals
(g) respect of law, ethics and human beings. The “path
to success” translated into practices that Maruti’s
culture approximated from the Japanese management
practices.
 Indian Four Wheeler
Industry
The Four-Wheeler Industry in India has not quite
matched up tothe performance of its counterparts in
other parts of the world. The primary reason for this
has been the all-pervasive regulatory atmosphere
prevailing till the opening up of the industry in the
mid-1990s. The various layers of legislative Acts
sheltered the industry from external competition for a
long time. Moreover, the industry was considered low-
priority as cars were thought of as unaffordable
luxury".
Post Liberalization, the car market in India have been in
a burgeoning stage with all types of cars flooding the
market in order to meet the demands of Indian
customers who are increasingly exposed to state of the
world automobiles and want the best when it comes to
purchasing a car. It is expected that by 2030, the
Indian car market will be the 3rd largest car market
across the globe. The main encouraging
factors for the success story of the car market in India
are the increase in the opportunity for new
investments, the rise in the GDP rate, the growing per
capita income, massive population, and high ownership
capacity. The liberalization policies followed by the

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Indian government had been inviting foreign players to
participate in the car market in India. The recent trend
within the new generation to get work in the software
based sector has led
to the rise in the income level and change in the
lifestyle significantly, which has further led to the
increase in the demand for luxurious cars among them.
The car Market in India is crowded with all varieties of
car models like the small cars, mid-size cars, luxury
cars, super luxury cars, and sports utility vehicles.
Initially the most popular car model dominating the Car
Market in India was the Ambassador, which
however today gave way to numerous new models like
Hyundai, Honda, Mercedes-Benz, BMW, Bentley and
many others.Moreover, there are many other models of
cars in the pipeline, to be launched in the car market in
India.
Some of the leadingbrands dominating the car market
in India at present are Hindustan Motors, Reva Electric
Car Co., Fiat India Private Ltd., Daimler Chrysler India
Private Ltd, Ford India Ltd., Honda Siel Cars India Ltd.,
General Motors India, Hyundai Motors India Ltd., Skoda
Auto India Private Ltd., and Toyota Kirloskar Motor Ltd.
Since the demand for foreign cars are increasing with
time, big brands like Mercedes Benz, Volkswagen,
Aston Martin, Ferrari, and Rolls-Royce have long since
made a foray into the Indian car market.
 Facts about Indian Car Market
Although the Indian automobile industry has come a
long way since the deregulation in 1993, India does not
rank well among its global peers in many respects, viz.,
the contribution of the sector to industrial output,
number of cars per person, employment by the sector
as a percentage of industrial employment, number of
months' income required to purchase a car, and
penetration of
cars.
Figure:-Passenger vehicle stock per 100 people
India is far behind from other countries with just 6.9
cars per 100 persons, while Unites States has 76.9 cars
on per 100 persons. Among developing countries,
Russia also stands ahead than India
and China with 16.3 cars per 100 persons. Two things
that stunted growth of the Indian automobile industry
in the past have been low demand and lack of vision on
the part of the original equipment manufacturers
(OEMs). However, the demand has picked up after the
liberalization of the regulatory environment, and
global OEMs who enjoy scale economies both in terms
of manufacturing and research and development (R&D)
entered the Indian market. This has resulted in a
significant shift in the way business is conducted by
suppliers, assemblers and marketers.
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Vision
The leader in the India Automobile Industry, Creating
Customer Delight and Shareholder’s Wealth; A pride of
India”
Mission
To provide maximum value for money to their
customers through continuous improvement of
products and services.
Maruti has a network of 391 sales outlets across 230
cities all over India. The service network covers 1,113
towns and cities, bolstered by 2,142 authorized service
outlets.The company's change in strategy and
emphasis on developing effective marketing
communications was their highlights.

MARKET SCENERIO (2008-

09)
The company vouches for customer satisfaction. For its
sincere efforts it has been rated (by customers)first in
customer satisfaction among all car makers in India for
ten years in a row in annual survey. Maruti Suzuki India
Limited, a subsidiary of Suzuki Motor Corporation of
Japan, has been the leader of the Indian car market for
over two decades.
During 2007-08, Maruti Suzuki sold 764,842 cars, of
which 53,024 were exported. In all, over six million
Maruti cars are on Indian roads since the first car was
rolled out on 14 December 1983.

Market Segment Analysis

Based on economic strata, the Indian auto consumer
segment can be sub divided in to 5 categories:
➢ Economy
➢Mid-Range
➢ Luxury
➢ Premium
➢ Super Premium

OBJECTIVE OF THE COMPANY

Maruti’s marketing objective is to continually offer the
customer new products and services that: Reduce the
customer’s cost of ownership of their cars;
andanticipate and address the customer’s needs and
preferences in all aspects and stages of car ownership,
to provide what they refer to as the “360 degree
customer experience.” Maruti offer 13 brands and over
150 variants ranging from people's car Maruti 800 to
stylish hatchback Ritz, Alto, A star, Swift, Wagon R,
Estillo, DZire, SX4 sedan and luxury suv Grand Vitara.

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Of these, they manufacture nine models and import the
Grand Vitara as a completely built unit from Suzuki in
Japan. Their models and variants are designed to
address the changing demands of the market and are
periodically upgraded in technology, styling and
features. To take advantage of the brand recognition
associated with their products, they retain the brand
name of the product through various stages of product
upgrades over time. For example, the version of the
Maruti 800 brand currently sold in the market is a
significantly upgraded version, in terms of technology,
design and styling, of the Maruti 800 launched in 1983.

4Ps:-
 Product
 Price
 Place
 Promotion
Product Strategy:-
 Portfolio of 12 products
 Five product lines

Product Line Products

A1 800
A2 Alto, Zen ,Wagon –R,
Swift, A-star, Ritz

A3 DZire, Sx4
SUV Vitara, Gypsy

C - Class Omni, Versa, Echo

Price Strategy:-
 The price of the Maruti car is between Rs. 210000
to Rs.1500000.
 Maruti – 800 is the lowest price car of this
company.
 Alto, Omni, Wagon R, A-star, Ritz are the lower
middle price car of the company,
 Swift, Dzire, Sx4 & Esteem are the mid price car of
the company.
 Grand Vitara is the high price model of the
company.
 The price of car is decided according to its product
variety, quality, design etc.

Place strategy:-
 600 New car sales outlets covering 393 cities.
 265 ‘Maruti True Value’ outlets spread across 166
cities.
 2628 Maruti Authorized Service Stations, covering
1220 cities.

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  Tie up with Adani group for exporting 200,000 units
through Mnudra port Gujarat

Suggested Place strategy:-

 400 new car sales outlets in next three years.
 new true value shops in next three years.
 1200 new Maruti Authorized Service Stations in
next three years.
 Tie up with other distributors for Exports.

Promotion Strategy:-
Advertising
 TV Ads
 Print Ads
 Radio Ads
 Information Advertising, alternative Advertising
Options
 BTL – Sponsorships
 TV shows - India’s Got talent
 Place Advertising – Bill boards
 Sales Promotions
 Product warranties
 Premiums (gifts)
 Trade shows
 2,628The number of workshops that provide
customers with maintenance support in 1220 cities.

SWOT Analysis
STRENGTHS
1. Bigger name in the market.
2. Established distribution & after sales
network.
3. Understanding of the Indian market.
4. Ability to design product with differentiating
features.
5. Brand Image.
6. Experience & Knowledge how in technology.
7. Trust of People.
8. Maruti Udyog Ltd. is the market leader for
more than decade.
9.Has a great dealership chain in the market.
10. Better after sales service.
11. Low maintenance cost of vehicle.

WEAKNESSES
1.Lack of experience in foreign market.
2.Comparatively new to diesel cars.
3.People resistant to upper segment models.
4.Heavy import tariff on fully built imported
models.
5.Exports are not that good.
6. Lesser diesel models in the market compare
to others.
7. Global image is not that big.

OPPURTUNITIES
1.Increased purchasing power of Indian middle
class family.
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2.Government subsidies.
3.Tax Benefits.
4.Prospective buyers from two – wheeler
segment.
5. Great opportunities to go global with success
of Swift and SX4 allover.
6. Introduction of more diesel models. The
diesel car segment is growing.
7. Opportunity to grow bigger by entering into
bigger car markets.
8. Already a market leader so great opportunity
to be the king of market in every stage of
industry.

THREATS
1. Foreign companies entering market; so a
bigger threat from MNCs.
2.Competition from second hand cars & TATA
Nano.
3.Threats from Chinese manufactures.
4.To the market share, as many big names are
coming in the industry
5.There is hardly any diesel models
6. Rs. 1 lakh – Rs. 1.5 lakh car

Strategy
Their strategy is to capture the rural market by
employing women who belong to their local community
through which their product can reach to local
consumers. Their strategy is to provide work
for women to create awareness among confined
consumers

Process
They started with Project Shakti in which their basic
aim is to educate a rural person about their products
through women who belongs to their own local
community and who can communicate well in their
language with them. In this way many educated
women get work in rural sector and on the other hand
HLL Corporate Social Responsibility (CSR) also
increases towards society by introducing educative
programs for the benefit of therural sector.

KEY STRATEGIC INITIATIVES BY MARUTI

A) TURNAROUND STRATEGIES MARUTI FOLLOWED
Maruti was the undisputed leader in the automobile
utility-car segment sector, controlling about 84% of the
market till 1998. With increasing competition from local
players like Telco, Hindustan Motors, Mahindra &
Mahindra and foreign players like Daewoo, PAL, Toyota,
Ford, Mitsubishi, GM, the whole auto
industry structure in India has changed in the last
seven years and resulted in the declining profits and
market share for Maruti. At the same time the Indian
government permitted foreign car producers to invest
in the automobile sector and hold majority stakes.
In the wake of its diminishing profits and loss of market
share, Maruti initiated strategic responses to cope with

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India’s liberalization process and began to redesign
itself to face competition in the Indian market.
Consultancy firms such as AT Kearney & McKinsey,
together with an internationally reputed OD
consultant, Dr. Athreya, have been consulted on modes
of strategy and organization development during the
redesign process. The redesign process saw Maruti
complete a Rs. 4000 mn expansion project which
increased the total production
capacity to over 3,70,000 vehicles per annum. Maruti
executed a plan to launch new models for different
segments of the market. In its redesign plan, Maruti,
launches a new model every year, reduce production
costs by achieving 85-90% indigenization for new
models, revamp marketing by increasing the dealer
network from 150 to 300 and focus on bulk institutional
sales, bring down number of vendors and introduce
competitive bidding. Together with the redesign plan,
there has been a shift in business focus of Maruti.
When Maruti commanded the largest market share,
business focus was to “sell what we produce”. The
earlier focus of the whole organization was "production,
production and production" but now the focus has
shifted to "marketing and customer focus". This can be
observed from the changes in
mission statement of the organization:
 1984: "Fuel efficient vehicle with latest
technology".
 1987: "Leader in domestic market and be among
global players in the overseas market".
  1997: "Creating customer delight and shareholders
wealth".

B) CURRENT STRATEGIES FOLLOWED BY MUL

PRICING STRATEGY - CATERING TO ALL SEGMENTS
Maruti caters to all segment and has a product offering
at all price points. It has a car priced at Rs.1,87,000.00
which is the lowest offer on road. Maruti gets 70%
business from repeat buyers who
earlier had owned a Maruti car. Their pricing strategy is
to provide an option to every customer looking for up
gradation in his car. Their sole motive of having so
many product offering is to be in the consideration set
of every passenger car customer in India. Here is how
every price point is covered.

Factors that influence the consumer’s

buying decision for the product
Cultural Social
Culture
Subculture
Social Class
Reference group
Family
Roles and statuses
Personal
Age and life-cycle stage
Occupation
Economic
circumstances
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Lifestyle
Personality and selfconcept
Psychological
Motivation
Perception
Learning
Beliefs and attitudes
Buyer
A. Cultural Factors
• Value, perception, and preferences
• Nationalities, religion, race, geographical regions
• Social class
A. Social Factors
• Reference Groups
• Social Class
• Roles & Status
A. Personal Factors
• Economics Circumstances
• Occupation
• Age & Life Cycle Stage
• Lifestyle
• Personality and self-concept
A. Psychological Factors
• Motivation
• Perception
• Learning
• Beliefs and attitudes

Business Environment Factors

Political Factors:-
1. Government continuously slashing tax rates.
2. Government has launched automotive mission plan
(AMP).
3. Automatic approval for FDI in automobile sector.

Economic Factors:-
1. Stable economic policies.
2. Easy availability of finance.
3. Economics incentives by local state Government.
4. Lower duties & taxes.
5. Huge domestic demand.
22 Paurak R. Shah (NIS Academy, Ahmedabad)

Social Factors:-
1. Lucrative market in rural India.
2. Rapid urbanization and income levels.
3. Skilled labour costs amongst the lowest in world.

Technological Factors:-
1. Four Lakhs pass out every year.
2. Credible local suppliers of high quality components.
3. India emerging as an automobile hub for automobile
manufacturing & research.
Ecological Factors:-
1. India automotive regulations are closely aligned to
world
standards on emission & safety.
2. Proximity to major export market.
Legal Factors:-

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1. Weighted tax deduction up to 150% on in house R &
D activities.
2. Relatively High import Duties

CONCLUSION
The price of a car is just one-third of what it cost you
over its lifetime. Running and maintaining it make up
the other twothirds. Take into account resale value and
its real cost becomes clear. Maruti Suzuki stands for
value as much as it stands for performance. In spite of
rising input costs, we try our best to keep
prices down. Their running costs and resale values are
unbeatable too. Nothing matches the delight their cars
deliver. In the JD Power CSI study 2005, 85% of Maruti
Suzuki owners stated that they would definitely
recommend the car they drive to someone else.Infact,
you don’t buy a Maruti Suzuki. You invest in it. After the
rash of new cars launches the past two years, the
relative lull in the auto industry is showing up in the
customer satisfaction indices. According to the 2005
four-wheeler Total Customer Satisfaction (TCS) study
conducted by the specialist division of TNS Automotive,
the automobile ownership experience
or customer ownership experience has declined in all
areas compared to 2004. The study is one of the
largest syndicated automotive studies in India,
representing the responses of more than 7,000 new car
buyers. The comprehensive study covers over
50 models with customer evaluations taken in the key
areas of sales satisfaction, product quality, vehicle
performance and design, after-sales service, brand
image, and cost-of-ownership.
The TCS index score provides a measure of satisfaction
and loyalty a given model enjoys with its customers.
According to TNS Automotive, the decline is
predominantly for older, small and entry mid-size car
models. The ageing of these models seems to be
posing a stiffer challenge for manufacturers to sustain
past performance levels at a time when customer
expectations are rising sharply.

Bibliography
NEWS PAPERS
➢ THE ECONOMIC TIMES
➢ THE TIMES OF INDIA
MAGAZINES
➢ BUSINESS INDIA
➢ INDIA TODAY
INTERNET WEBSITES
➢www.google.com
➢ www.marutisuzuki.com

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Thank you!