OBJECTIVE OF STUDY

1. To know the history of MARUTI SUZUKI

2. To know achievements and problems faced by MARUTI SUZUKI

3. To know problems of MARUTI SUZUKI which they faced in this competition

RESEARCH METHODOLOGY

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To conduct any research a scientific method must be followed the universe of
study is very large in which is difficult to collect information from all the
employees so the sampling method has been followed study the analysis is based
on secondary data.

SECONDARY SOURCES:-

The secondary data was collected from companies training policy documents,
official records.

SCOPE OF STUDY

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 This study extends its emphasis on studying various economic, social, geographical
and political aspects of trade relations between India and the gulf countries.

 It further extends to suggest possible measures and steps to further strengthen the
trade structure between India and the gulf countries.

 This study is an effort to highlight various strategic factors which are crucial for the
trade –ties between India and the gulf countries

 In the modern times the business organizations are adopting new techniques and
methods for the growth of the business to their customers to face challenge posed by
the competitors for every business, it is not only important to retain the present
customers but also attract the new customers.

 So there is need to ascertain the customers use regarding the services providing by
reputed organization like Maruti Suzuki.

 With the increase market study there is a cut through competition among the
businessmen in the industry some of the other major competitors in this area like
Hyundai, Fiat, Volkswagen, Ford, Tata, and Chevrolet.

 The need for customer satisfaction is necessary for all business, large or small. The
satisfaction of the customer is an all important task. Hence there is a need for the
study

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 INTRODUCTION TO MARUTI SUZUKI
Maruti Suzuki India Limited (/marutt i suzuki/), commonly referred to as Maruti and
formerly known as Maruti Udyog Limited, is an automobile manufacturer in India. It is
a subsidiary of Japanese automobile and motorcycle manufacturer Suzuki. As of
November 2012, it had a market share of 37% of the Indian passenger car market. Maruti
Suzuki manufactures and sells a complete range of cars from the entry level Alto, to the
hatchback Ritz, Celerio, A-Star, Swift, Wagon R, Zen and sedans DZire, Kizashi and
SX4, in the 'C' segment Eeco, Omni, Multi Purpose vehicle Suzuki Ertiga and Sports
Utility vehicle Grand Vitara. The company's headquarters are at No 1, Nelson Mandela
Road, New Delhi. In February 2012, the company sold its ten millionth vehicle in India.

Maruti Suzuki India Limited subsidiary of Suzuki Motor Corporation of Japan, is India's
largest passenger car company, accounting for over 45% of the domestic car market. The
company offers a complete range of cars from entry level Maruti 800 and Alto, to
hatchback Ritz, A star, Swift, Wagon-R, Estillo and sedans DZire, SX4 andSports Utility
vehicle Grand Vitara. It was the first company in India to mass-produce and sell more
than a million cars. It is largely credited for having brought in an automobile revolution
to India. It is the market leader in India and on 17 September2007, Maruti Udyog Limited
was renamed Maruti Suzuki India Limited. The company’s headquarters are located in
New Delhi.

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 HISTORY OF MARUTI SUZUKI

In 1970, Sanjay Gandhi the son of Indira Gandhi envisioned the manufacture of an
indigenous, cost effective, low maintenance compact car for the Indian middle class
Indira Gandhi‟s cabinet passed a unanimous resolution for the development and
production of a people’s car. Sanjay Gandhi’s company was christened Maruti limited.
The name of the car was chosen after a Hindu deity. named Maruti Ltd. That time
Hindustan Motors‟ Ambassador was the chief car and the company had come out with a
new entrant the premier Padmini that worked slowly gaining a part of the market share
dominated by the ambassador. For the next ten years the Indian car market had stagnated
at a volume of 30,000 to 40,000cars for the decade ending 1983.. The collaboration
heralded a revolution in the Indian car industry by producing the maruti-800. It created a
record of taking 13 months time to go from design to rolling out cars from a production
line.

The production of Maruti-800 in 1983 marked the beginning of a revolution in the Indian
automobile industry. It brought in the latest technology of that time more fuel efficiency
and lower prices that led to the creation of a huge market for all car segments as the
Indian, middle class grew in size. This in turn brought in more players in this segment. A
number of auxiliary car parts making units were set up as more car manufacturers
realized it was more cost effective to make their car parts in India rather than importing
them.

Maruti’s major influence was in helping the component industry in the country because
of its emphasis on localization and indigenization. As in the beginning that sector hadn’t
grown much Maruti‟s had to start dozens of joint ventures with Indian entrepreneurs. It
got them from foreign collaborations that led.

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 COMPANY PROFILE OF MARUTI SUZUKI

Type Public

BSE: 532500
Traded as NSE: MARUTI
BSE SENSEX Constituent

Industry Automotive
Predecessors Maruti Udyog Limited
Founded 1981
Headquarters New Delhi, India[1][2]

Key people R. C. Bhargava[3] (Chairman)

Kenichi Ayukawa[4] (CEO & MD)

Products Automobiles
43272 crore (US$7.1 billion) (2013-14)
Revenue [5]

2469 crore (US$400 million) (2013-14)

Net income [5]

Employees 6,903 (2011)[6]

Parent Suzuki[7]
Website www.marutisuzuki.com

VISION STATEMENT AND MISSION

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 STATEMENT OF MARUTI SUZUKI

Vision statement

The leader in the India Automobile Industry, Creating Customer Delight and
Shareholders Wealth; A pride of India”

We must be an internationally competitive company in terms of our products and services. We

must retain our leadership in India and should also aspire to be among the global players.

Mission statement

To provide a wide range of modern, high quality fuel efficient vehicles in order to meet
the need of different customers, both in domestic and export markets. 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.

COMPETITIVE ADVANTAGE

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Meaning:

Competitive advantage occurs when an organization acquires or develops an attribute or

combination of attributes that allows it to outperform its competitors. These attributes can
include access to natural resources, such as high grade ores or inexpensive power, or
access to highly trained and skilled personnel human resources. New technologies such
as robotics and information technology can provide competitive advantage, whether as a
part of the product itself, as an advantage to the making of the product, or as a
competitive aid in the business process (for example, better identification and
understanding of customers).

Competitive strategies/advantages

Cost leadership strategy

The goal of cost leadership strategy is to offer products or services at the lowest cost in
the industry. The challenge of this strategy is to earn a suitable profit for the company,
rather than operating at a loss and draining profitability from all market players.
Companies such as maruti suzuki succeed with this strategy by featuring low prices on
key items on which customers are price-aware, while selling other merchandise at less
aggressive discounts. Products are to be created at the lowest cost in the industry. An
example is to use space in stores for sales and not for storing excess product.

Differentiation strategy

The goal of differentiation strategy is to provide a variety of products, services, or

features to consumers that competitors are not yet offering or are unable to offer. This
gives a direct advantage to the company which is able to provide a unique product or
service that none of its competitors is able to offer.

An example is Dell which launched mass-customizations on computers to fit consumers'

needs. This allows the company to make its first product to be the star of its sales.

Innovation strategy

The goal of innovation strategy is to leapfrog other market players by the introduction of
completely new or notably better products or services. This strategy is typical of
technology start-up companies which often intend to "disrupt" the existing marketplace,
obsoleting the current market entries with a breakthrough product offering.

It is harder for more established companies to pursue this strategy because their product
offering has achieved market acceptance. Apple has been a notable example of using this
strategy with its introduction of iPod personal music players, and iPad tablets.

Many companies invest heavily in their research and development department to achieve
such statuses with their innovations.

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Operational effectiveness strategy

The goal of operational effectiveness as a strategy is to perform internal business

activities better than competitors, making the company easier or more pleasurable to do
business with than other market choices. It improves the characteristics of the company
while lowering the time it takes to get the products on the market with a great start.

COMPETITIVE ADVANTAGE OF MARUTI SUZUKI

Competitive Advantage

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Pricing strategy helps both its customers and Maruti. Maruti offers a different model just
at a price difference of around Rs. 10,000 for cars ranging between Rs. 3.25 lakhs to Rs.
4.50 lakhs. It offers five different cars in this range and different versions/models of each
car. Due to so many options, most of the time customers have an option within their
budget or around their budget.

Price Advantage:

Diversifying in different sources of revenue stream generation

 Maruti has successfully developed different revenue streams without making huge
investments in the form of MDS, N2N, Maruti Insurance and Maruti Finance.

 Finance is one of the major decision drivers in car purchase. Maruti has tied up with
finance consortium. This consortium comprises Citicorp Maruti, Maruti Countrywide,
ICICI Bank, HDFC Bank, Kotak Mahindra, Sundaram Finance, Bank of Punjab and
IndusInd Bank Ltd

 Finance is one of the major decision drivers in car purchase. Maruti has tied up with
8 finance companies to form a consortium. This consortium comprises Citicorp
Maruti, Maruti Country wide, ICICI Bank, HDFC Bank, Kotak Mahindra, Sundaram
Finance, Bank of Punjab and IndusInd Bank Ltd.

Playing on cost leadership

Maruti is the price dictator in Indian automobile industry. It’s the low cost provider of car.
The lowest car on road is from Maruti stable i.e. Maruti 800. Maruti achieves this through
continuous improvements in operational efficiency and productivity.
The company has set itself (and its vendors) the target of a 50% improvement in
productivity anda 30% reduction in costs in three years. The ability to keep lowering the
prices sets Maruti apartfrom other players in the league. Maruti spread the overheads over
a larger base.
Maruti also made strides in applying IT to manufacturing. A new Vehicle Tracking
System improved efficiency on the shop floor and enhanced quality control.

PRICING STRATEGY - CATERING TO ALL SEGMENTS

Maruti caters to all segments and has a product offering at all price points. It has a car
priced atRs.1,87,000.00 which is the lowest offer on road. Maruti gets 70% business from

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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. Despite the rigorous market
situation ,Maruti remains a trustworthy name among the users. Here, we would list down
success story of Maruti:

The Quality Advantage

Maruti Suzuki owners experience fewer problems with their vehicles than any other car
manufacturer in India (J.D. Power IQS Study 2004). The Alto was chosen No.1 in the
premium compact car segment and the Esteem in the entry level mid - size car segment
across 9 parameters.

A Buying Experience Like No Other

Maruti Suzuki has a sales network of 307 state-of -the-art showrooms across 189 cities,
with a work force of over 6000 trained sales personnel to guide MUL customers in
finding the right car.

Quality Service Across 1036 Cities

In the J.D. Power CSI Study 2004, Maruti Suzuki scored the highest across all 7
parameters: least problems experienced with vehicle serviced, highest service quality,
best in-service experience, best service delivery, best service advisor experience, most
user-friendly service and best service initiation.

One Stop Shop

At Maruti Suzuki, customers will find all car related needs met under one roof. Whether
it is easy finance, insurance, fleet management services, exchange- Maruti Suzuki is set
to provide a single-window solution for all car related needs.

The Low Cost Maintenance Advantage

The acquisition cost is unfortunately not the only cost customers face when buying a car.
Although a car may be affordable to buy, it may not necessarily be affordable to maintain,
as some of its regularly used spare parts may be priced quite steeply. Not so in the case of
a Maruti Suzuki. It is in the economy segment that the affordability of spares is most
competitive, and it is here where Maruti Suzuki shines.

Lowest Cost of Ownership

The highest satisfaction ratings with regard to cost of ownership among all models are all
Maruti Suzuki vehicles: Zen, Wagon R, Esteem, Maruti 800, Alto and Omni.

Technological Advantage
It has introduced the superior 16 * 4 Hypertech engines across the entire Maruti Suzuki
range. This new technology harnesses the power of a brainy 16-bit computer to a fuel-
efficient 4-valve engine to create optimum engine delivery. This means every Maruti

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Suzuki owner gets the ideal combination of power and performance from his car. Maruti
has been able to gain a technical, qualitative and strategical advantage while devising
their pricing mix leading to a cost effective ride for the users and growing market share
for the company.

Place Advantage

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. Maruti
makes its entire car accessible through the direct and indirect channel of distribution i.e.
dealers to have a wider geographical coverage. The followed by Maruti is its True Value
Service complemented by a huge network of authorized dealers positioned in every part
of the country.

Maruti True Value Service

Maruti True Value is India No.1 organized pre-owned car brand .True Value is venture of
India’s largest automobiles manufacturer “Maruti Suzuki India Ltd”. Maruti True Value
business expands the family of Maruti customers, providing reassurance to existing

Maruti customers about resale of their cars and further emphasizes Maruti s commitment
towards enhancing customer satisfaction by continuous association during the vehicle
ownership life cycle. No one knows your Maruti car better than Maruti - based on this
premise, Maruti chanalises its expertise to ensure that transactions in pre owned cars are
transparent and fair. Through that, the company endeavors to extend the relationship and
emotional connect that it enjoys with the customer.
True Value has transparent and fair evaluation process, which is currently missing in the
largely unorganized market for pre-owned cars. Maruti True Value processes and systems
ensure that the seller gets the right price and is paid promptly. Under True Value, the
seller has the option to be paid in cash, or get a True Value car in exchange or a brand
new Marti Suzuki car in exchange.
True Value category cars bought by Maruti True Value dealers are taken to state-of-the-art
workshops. True Value Category cars are refurbished in state of art workshops using
Maruti Genuine Parts and by skilled technicians. These cars are then sold through Maruti
True Value outlets.
As a mark of confidence, and to provide reassurance to customers, every vehicle bought
under Maruti True Value is inspected and certified by Maruti Engineers and the Car
carries a one-year warranty and three free services. Convenient finance options are also
offered to buyers of Maruti True Value cars. Maruti has a wide accessibility by setting up
of dealers and service stations and thus has gained wide acceptability and large number of
customers.
It also makes sure that there is no delay in processing the orders and invoicing of the
products and the speed of delivery is a major way of gaining competitive advantage,
which MUL has capitalized on. At Maruti True Value they believe that all customers need
should be met under one roof. Thus, when they visit any of the exclusive Maruti
TrueValue outlets it is discovered that not only do they get the best value while buying,

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selling or exchanging but also all other car related needs. Be it insurance, finance,
service, accessories or anything else related to cars.

Promotion

One of the greatest strength of capturing customers is through promotion which deals
with the aspect of creating awareness of the product for the customer and Maruti over the
time has used this tool in themost efficient manner .The various promotional policy
undertaken by the industry has helped itovercome the decreasing market share and ensure
loyalty of customers. Advertisements of Maruti have always revolved around their core
strengths of good service network and mileage. Each of their ad has a fair bit of
exaggeration and end with a humorous punch line.

Some of the memorable ads from the past are the young sardarji kid playing with a
Maruti 800 looking toy that ends with a "Petrol khatam hi nahi hota hai" and the ad
with Maruti drivers in Ladhak looking for a service station. Each of them led the viewer
to expect a funny intuitive answer and leave you with a counter-intuitive one. So far none
of the answers seem to come through as clichés.

To get it right time and again is really an impressive feat. This year’s Maruti ad too starts
with what seems like impossibility and ends with a punch line that reveals customer
insight. There are two versions of this ad and both of them start with an elaborate
presentation out of common-man's reach vehicles- a rocket and a yacht.

The advertisement which is supposedly in response to the recent fuel price hike. The ad is
not about any particular Maruti car, it's about all of them and how they provide superior
mileage. The punch line of thisad is "kina diet hay?" (Translates to "how much does it
give?"

Every new venture ,every new scheme and every new product or service undertaken by
Maruti is communicated through their advertisement in the most creative way.Maruti also
provides road safety instruction along with a toll free contact number both for its service
and road accidents.

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MARKETING STRATEGY OF MUL IN LATE 1980’s
In the initial years, the MUL depended more on its M800 model, so when in late 1990’s
the new players like MATIZ, SANTRO, and INDICA came into the market with more
space and better comfort, at the same price, then Maruti lost a major share of market: To
gain back its lost share Maruti launched Zen alto and wagon R, these small segment cars
gained huge response for the consumer followed by various promotional strategies has
been thereafter to retain their position in the market.
 Maruti was the first company in India which studied the consumer demand and
responded to it well.
 Market segmentation policy was adopted that targeted different type of consumers with
different type of models.
 Maruti800 targeted medium income group, while the deluxe model targeted rich income
group.
 Maruti van targeted businessmen and doctors(ambulance)
 The Gypsy targeted the paramilitary forces and the police.
 This resulted in complete control of Maruti over the market.
 The company advertised its different products according to costumers.
 A special cell was made to make direct dealing of Gypsy with the government & the
army

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OFFERING ONE STOP SHOP TO CUSTOMERS OR CREATING DIFFERENT
REVENUE STREAMS

Maruti has successfully developed different revenue streams without making huge
investments in the form of MDS, N2N, Maruti Insurance and Maruti Finance. These help
them in making the customer experience hassle free and helps building customer
satisfaction.

MARUTI SUZUKI INDIA LIMITED COMPETITION

East meets South in Maruti Suzuki India (MSIL). The New Delhi-based company is a
subsidiary of Japan-based Suzuki, and India's largest OEM of passenger cars. It touts a 17
brand line with more than 150 options, including the family car Maruti 800, premium
hatchback Ritz, and popular compact A-Star. The company runs two production sites: Its
Gurgaon facility, integrates three plants; and the Manesar facility is dedicated to first-to-
market rollouts. MSIL produces 1.5 million a year. Revving up its bottom line, MSIL
exports Suzuki models to Latin America, Africa, and Southeast Asia, and sporadically to
Europe.

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 SWOT ANALYSIS OF MARUTI SUZUKI

Strength
 The Quality Advantage
 A Buying Experience Like No other
 Quality Service Across 1036 Cities
 One Stop Shop
 The Low cost Maintenance Advantage
 Lowest Cost of Ownership
 Technological Advantage

Weakness
 The cost involved In R&D and infrastructure is low in India As compared to other
country.
 Indian is growing as an export hub along with the Indian Market growing
altressively into becoming an attractive one for investors.
 Suzuki's Investment in India, is also important as it has completely divested now
as a result MUL will now became a 100% subsidiary of Suzuki in the coming
year.

Opportunities
 Maruti have laid down a clear road map to achieve an annual sale of one million
cars in the domestic market and 200,000 exports by 2010-11.
 It has capacity to manufacture 100,000 diesel engines a year. This will be scaled
up to 300,000 engines/by 2010.
 Huge export market such as Europe, America and other Indians car.
 A large domestic person who wants to buy a car.

Threat
 The threat of Maruti faces is the growing competition in compact cars.
 New emission norms like Bharat Stage 3 which has come into effect from April
2005 has increased car prices by Rs.20000 and Bharat stage 4 which is coming
into force in 2007 will contribute in increasing car prices further.
 Rise in petrol prices and growing popularity of other substitute fuels like CNG
will be another threat of Maruti.
 There is a threat to Maruti models ageing. Maruti models like Maruti 800 which is
in market for the last twenty years and other like Zen and Esteem which have also
entered the decline phase are the other threats.

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TARGET MARKETING
Target Marketing involves breaking a market in segment and then concentrating your
marketing efforts on one or a few key segments.

The beauty of target marketing is that it makes the promotion, pricing and distribution of
your product and services easier and more cost-effective. Target marketing is the
selection of customers you wish to service. The decisions involved in it are:

 Which segment to target

 How many products to offer
 Which products to offer in which segments

There are three steps to targeting:

One of the first things you need to do is refine your product or service so that you are not
trying to be ‘all things to all people'.

Next, you need to understand that people purchase products or services for three basic
reasons:

 To satisfy basic need

 To solve problems.
 To make themselves feed good.

The nest step in creating an effective marketing strategy is to zero in on target market.

Target marketing is one of corporate America's most effective business strategies. The
idea is to increase sales by first identifying and them targeting smaller, yet more
profitable customer groups within the total market.

Four ways to Identify Target Markets

 Geographic
 Demographic
 Psychographics
 Behaviors

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KEY STRATEGIC INITIATIVES BY MARUTI

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.

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".

Focus on customer care has become a key element for Maruti. Increasing Maruti service
stations with the scope of one Maruti service station every 25 km on a highway. To
increase its market share, Maruti launched new car models, concentrated on marketing
and institutional sales. Institutional sales, which currently contributes to 7-8% of Maruti's
total sales. Cost reduction and increasing operating efficiency were another redesign
variable. Cost reduction is being achieved by reaching an indigenization level of 85-90
percent for all the models.

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 MAJOR FUTURE STRATEGIES
I. PHASING OUT ZEN IN 2007

The launch of Swift and phasing out Zen is a strategic move. Alto was launched keeping
in mind that it will take over Maruti 800 market in future. Perhaps being the flagship
product phasing out of Maruti 800 faced lots of resistance from dealers all over. Another
reason behind not phasing out Maruti 800 was the fear of brand shift of customers to
other competitor's product. Swift was launched in May, 2005 in the price band starting
from 4 lacs.

II. MARUTI PLANS FOR A BIG DIESEL FORAY

The new car manufacturing company, called Maruti Suzuki Automobiles India Limited,
will be a joint venture between Maruti Udyog and Suzuki Motor Corporation holding a
70 per cent and 30 per cent stake respectively. The Rs1,524.2 crore plant will have a
capacity to roll out 1 lakh cars per year with a capacity to scale up to 2.5 lakh units per
annum. The new car manufacturing plant will begin commercial production by the end of
2006.

II. MARUTI PLANS FOR A NEW ENGINE AND TRANSMISSION PLANT

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

IV. INDIA AS EXPORT HUB FOR MARUTI

Three years back as an experiment, based on the increasing design capabilities of

suppliers in countries like India, McKinsey did an exercise to figure out just how much
money could be saved if automobiles were to be made in overseas locations like India,
Mexico and South Africa-- an automobile BPO, so to speak. The result was staggering:
the industry stands to gain $ 150 billion annually in cost savings, and an additional $ 170
billion annually in new revenues once demand shoots up following the drop in prices, and
the combination of which means a 25 per cent increase in existing revenue levels.

V. MARUTI EMERGING AS R&D HUB FOR SUZUKI MOTOR CORPORATION

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

19
manufacturer will make substantial investments to upgrade its research and development
centre at Gurgaon in Haryana for executing design and development projects for Suzuki.
This includes localisation, modernisation and greater use of composite technologies in
upcoming models.

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 PORTER’S FIVE FORCE MODEL OF MUL
The five force model of Porter is an outside-in business unit strategy tool that is used to
make an analysis of the attractiveness (value) of an industry structure.

Porter’s Five Force Model:

Threat to New Entrants:

Factor
Level of threat
Implication
Brand –Low

Maruti Suzuki has been in the industry for a long time; it commands most of the market
share and has a strong brand name.

Financial investment-Low

There is less chance of any new entrant to invest as much as Maruti Suzuki and perform
well at the current market. Start up cost of new entrant is low.

Competence-Low

Company shares a respectable market in India, it’s rare for new entrant to catch up

Sales-Low

New entrants may sell their products at low prices but still Maruti Suzuki’s strong brand
name attracts customers

Conclusion:

Maruti Suzuki has no or less threats from new entrants, because Maruti has established
itself as a well known recognisible brand. It has a huge brand value and gained a good
market position than any other player in the market.

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Threat of Substitutes:

Factors

Level of threat

Implication

Substitutes-Medium

There are many substitutes’ products but Maruti Suzuki products are efficient and cost
effective.

Importance of substitutes-Medium

There are not many products that are very efficient so their importance goes down

Cost rate-Low

There are few substitutes that are efficient or reputable, still Maruti Suzuki has a foot
hold in that position

Conclusion:

Though there are many Substitutes, Maruti Suzuki has gained a niche market position for
itself but the product efficiency in Maruti Suzuki is a concern.

Bargaining power of the customers:

Factor

Level of threat

Implication

Quality of the product-Medium

When people look for high Quality product, price is also considered important.

Competition-High

There are many Automobile Companies competing with Maruti Suzuki are so high in
competition

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Differentiation products-Medium

Customers always look for new and efficient products

Conclusion:

Since Maruti Suzuki offers good quality and cost effective products with great services,
customers usually don’t consider features of the product so the level of threat is normally
low when compared with other competitors in the market.

Bargaining power of the suppliers :

Factors

Level of threat

Implication

Price of suppliers-Medium

Prices of the product go up as the demand increases.

Power of suppliers-Low

Suppliers have to meet the customers needs to get orders in the future

Political issues-Medium

Political issue is to be met by the suppliers

Conclusion:

There will be little or less threat as suppliers usually try to keep their customers happy.

Competitive Rivalry :

Factors

Level of threat

Implication

Brand identity-High

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All Competitive companies such as TATA, Hyundai, Ford have good brand reputation in
the market

Company growth-High

Tough competition from other companies affects the growth

Cost structure-Medium

Most of the companies maintain their cost of profit accordingly to the other competitors.

CONSUMER BEHAVIOUR
For any company it is important to know about the needs and requirements of their
customers. Hence studying about consumer behaviour is a must. It has been found that
the most searched car brand in India is Maruti Suzuki and it sells more than half the cars
sold in India. Maruti Suzuki also enjoys 70% repeat buyers which is in tune with its claim
of being consumer friendly. Now the question that faces Maruti or for that matter any car
manufacturer is what do the customers look for in a car? There are several aspects that
customers look at with varying degrees:

 Price:
People look for affordable price. They have their budget that they can spend ona car. For
a middle class or lower middle class Indian price is a very important factor.Maruti has
been successful in catering to this need of theirs

 Mileage:
Consumers look at mileage. In the scenario of rising petrol prices mileage becomes an
even more important characteristic. Fuel efficiency of a car is demanded by all categories
of people.

 Brand recognition and association:

Consumers like to be associated with an established brand. It gives them a sense of
security.

 Durability and warranty:

A car is not purchased very often. Customers look for durability. It is a product that lasts
for years and sometimes even generations

 Appearance and style:

Car is a status symbol for many customers. It’s a form of portraying their class and
current financial condition. These customers give a lot of importance on the appearance
and style. Relatively young customers look more for style than old ones.

 Reliability and trust:

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A brand should be associated with trust and reliability, only then will it be positioned in
the minds of the people for a longer time and can succeed in the market.

 Availability:
With the explosion of choices, products should be easily available otherwise prospective
customers will shift to the competitors. Ease of availability can also bring competitors
customers to our brand if they fail in this category.

 Resale value:
People like to change cars after a certain number of years which depends on several
parameters. New car purchase is often accompanied by exchange of old car. Hence a high
resale value is what customers look for and Maruti provides this.

MACRO ENVIRONMENT ANALYSIS

POLITICAL ENVIRONMENT
• Indian government auto policy aimed at promoting an integrated, phased and conducive
growth of the Indian automotive industry.

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• Allowing automatic approval for foreign equity investment up to 100 per cent, with no
minimum investment criteria.

• Establish an international hub for manufacturing small, affordable passenger cars as

well as tractors and two wheelers.

• Ensure a balanced transition to open trade at minimal risk to the Indian economy and
local industry.

• Assist development of vehicles propelled by alternate energy sources.

• Laying emphasis on R&D activities carried out by companies in India by giving a

weighted tax deduction of up to 150 per cent for in-house research and R&D activities.

• Plan to have a terminal life policy for CV along with incentives for replacement for
such vehicles.

• Promoting multi-modal transportation and the implementation of mass rapid transport

systems.

ECONOMIC ENVIRONMENT
• The Indian economy has grown at 8.5 per cent per annum.

• The manufacturing sector has grown at 8– 10 per cent per annum in the last few years.

• More than 90 per cent of the CV purchase is on credit.

• Finance availability to CV buyers has grown in scope during the last few years.

• The increased enforcement of overloading restrictions has also contributed to an

increase in the number of CVs plying on Indian roads.

• Several Indian firms have partnered with global players. While some have formed joint
ventures with equity participation, others have entered into technology tie-ups.

• Establishment of India as a Manufacturing hub, for mini, compact cars, OEMs, and for
auto components.

SOCIAL ENVIRONMENT

• Growth in urbanization, 4th largest economy by PPP index.

• Upward migration of household income levels.

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• Increase in PPP, led to the increase in market share of compact cars.

• 85% of Cars are financed in India (15% in China).

• Cars priced below USD 12000 accounts for nearly 80% of the market.

• Vehicles priced between USD 7000 – 12000 form the largest segment in the passenger
car market.
• Indian customers are highly discerning, educated and well informed. They are price
sensitive and put a lot of emphasis on value for money.

• Preference for small and compact cars. They are socially acceptable, even amongst the
well-off.

• Preference for fuel efficient cars with low running costs. The Tata Indica has the lowest
running cost at US 8.5 cents per mile.

TECHNOLOGICAL ENVIRONMENT

•With the entry of global companies into the Indian market, advanced technologies, both
in product and production processes have developed.

• With the development or evolution of alternate fuels, hybrid cars have made entry into
the market.

• Few global companies have setup their R&D centres in India.

• Major global players like Audi, BMW, Hyundai etc. have setup their manufacturing
units in India.

• Government initiatives regarding tax rebates have led to global players setting up their
R&D centres in India.

• Govt. initiatives in establishing NATRIP network across the country will further lead to
enhancing R&D and technological advancements.

ECOLOGICAL ENVIRONMENT
Automotive regulations in India
Status of Indian regulation no. of regulations
Fully / partially aligned 43
In process of being aligned 32

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Items /Regulations to be covered 39
Total 114

 Physical infra structure such as roads and bridges affect the use of automobiles. If there
is good availability of roads or the roads are smooth then it will affect the use
of automobiles.

 Physical conditions like environmental situation affect the use of automobiles. If the
environment is pleasant then it will lead to more use of vehicles.

 Technological solutions helps in integrating the supply chain, hence reduce losses and
increase profitability.
 With the entry of global companies into the Indian market, advanced technologies,both
in product and production process have developed.

 With the development or evolution of alternate fuels, hybrid cars have made entry into
the market.

 Few global companies have setup R&D center in India

.
 Major global players like Audi, BMW, etc. Have setup their manufacturing units in
India.

.
LEGAL ENVIRONMENT

 Legal provision relating to environmental population by automobiles.

 Legal provisions relating to safety measures.

 Confirms the governments intention on harmonising the regulatory standards with

the rest of the world.

 Indian government auto policy aimed at promoting an integrated, phased and

conductive growth of the Indian automobile industry.

 Establish an international hub of manufacturing small, affordable passenger cars.

CHALLENGES FACED BY MARUTI SUZUKI

Maruti Suzuki India, the undisputed leader of the Indian car market is being targeted by
several global auto rivals. It is a known fact that the most influential and dominant

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leaders do attract competition from various rivals and the leader has to be powerful
enough to sustain such onslaughts or the dynasty crumbles down. The King of the Indian
auto sector is facing quite such threats from its rivals, which is reason enough to worry
about its market shares.

First, in the month of April, Maruti’s Japanese car rival, Honda launched its compact
sedan Amaze that completely took over the Indian car consumers. As a result, Maruti’s
top contender the Swift Dzire entry level sedan got really hurt in terms of market
demands.

Then, in the month of June, came in the much speculated Ford EcoSport which was
expected to be a big hit, and as a matter of fact is a hit to make matters worse for Maruti
Suzuki. The EcoSport compact SUV’s great styling, urban features and aggressive pricing
strategy was expected to hurt the demand for the Maruti bestsellers. This compact SUV is
actually taking over a significant amount of consumers who would otherwise settle down
either for Maruti Dzire sedan or the Swift hatchback.

This intense competition and the repeated attack on the auto leader Maruti has got farther
severe, as the EcoSport’s arrival has taken serious effect on the premium hatchback Swift
that Maruti Suzuki has been relying on for several years. The Swift has been a segment
leader and a massive volume drawer for its maker. However, now that the EcoSport is in
the battlefield, this very popular and quality car’s sales figures have significant declined
by 6775 units in the month of July 2013. As per the records, Maruti Suzuki sold a total
17236 Swifts in the month of June, but ever since EcoSport’s arrival in June, Swift’s sales
figures dropped down to only 10461 units in the month of July, clearly implying the
effect of the freshly faced competition.

In the month of June 2013, the EcoSport had also managed to affect the sales figures of
the Maruti Dzire resulting in a sales decline of 4717 units. The Dzire’s demand clearly
started dwindling after the launch of the first diesel offering from Honda, the Amaze
which is the greatest rival of the Dzire today. Maruti’s bestselling sedan sold 17265 units
in the month of May which declined to 12548 units in June, as a combined effect of
rivalry from Amaze and the EcoSport. However, the Dzire managed to claim back some
of its demand, as it sold 15249 units in July.

Thus, intense pressure is being built on to Maruti Suzuki by its global rivals, who
definitely want the auto king’s fall in this slowdown stricken market. However, being the
leader, Maruti is absolutely undaunted about facing these several challenges. The Indo-
Japanese car maker is definitely preparing itself with proper ammunition for a greater
battle in the future and is thus concentrating on several new releases.

CONCLUSION

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The automobile industry is considered an engine for economic growth of the country.
Maruti Suzuki has proven that it is always ahead than its competitors because of
continious innovations and technological upgradations. The company has set a
benchmark of excellence because of Research & Development activity as Maruti Suzuli
believes that this activity will enable the company to offer superior and environment
friendly products to customer with complete satisfaction. Maruti Suzuki‟s environmental
performance is really uncountable. Considering the growing vehicle pollution, the
company introduced advanced K-Series engine in its vehicles which resulted in reduction
of CO, THC and NOx emissions by almost 50 percent. As far as economic performance is
concerned, Maruti Suzuki‟s last few year’s statistics of Domestic sales,
Export, narrates that still Maruti Suzuki is the leader of Indian Automobile sector.

BIBLIOGRAPHY

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www.google.com

www.scribd.com

en.wikipedia.org

www.marutisuzuki.com

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