Marketing Strategies:

Product

Segment

Small car Premium

Image

Model Price

Etios liva 3.99 -4.99 lakhs

Maruti swift 4.8-6lakhs

Ford figo 3.5-4.5lakhs

Hyundai i-20 4.5-7.5lakhs

Segment

Sedan

Image

Model Price

Etios Price : 6.8lakhs 5.1 to

Maruti dzire Price :4.9-7.2 lakhs

Tata manza Price:6.75lakhs

Honda city Price:7.5lakhs

Segment

Multi Utility vehicle (MUV)

Image

Model Price

Innova Price :8-13lakhs

Tata Aria Price :11-16lakhs

Mahindra Xylo Price : 9lakhs

Segment

Sedan (luxury)

Image

Model Price

Corolla altis 10.5-15 lakhs

Honda civic 12.5 lakhs

Skoda Octavia 12.8lakhs

Chevrolet cruze 12 lakhs

Segment

Sedan (luxury)

Image

Model Price

Corolla altis 10.5-15 lakhs

Honda civic 12.5 lakhs

Skoda Octavia 12.8lakhs

Chevrolet cruze 12 lakhs

Segment

Sports utility vehicle(SUV)

Image

Model Price

Fortuner 18-22lakhs

Honda CR-V 22.8lakhs

Chevrolet Captiva 18.5-22lakhs

Ford Endeavour 18 lakhs

Segment

SUV Full size

Image

Model Price 54lakhs

BMW-M class 55 lakhs

Audi Q 7 56 lakhs

Volvo XC-90 45 lakhs

Note: Prices are ex-showroom Delhi and may vary depending on variants of the same model
and local tax structure.

Pricing: In present scenario the challenges faced by car companies in terms of pricing is due to stiff competition in the automobile industry in India; companies are coming with different pricing strategies for small cars specially in order to attract the large segment of the customer which is considered to be price sensitive. Pricing Strategies: Competition Pricing: Companies are pricing their product based on their competing products prices to capture the market share. Ford has come up with Ford Figo with a competitive price tag that starts from Rs 3.6 lakh to compete with other major players of this segment like Maruti, Hyundai and Tata. Product Line Pricing: is a product pricing strategy when the company has wide range of product, catering different segments thus capturing market share from all the segments. Maruti has full line of brands covering various price points. It helps Maruti to keep out the competitors and market share intact. From customer point of view it can maintain loyalty with brand by upgrading the product which in turn is advantage to the company. Penetration Pricing: Penetration pricing is used when they are introducing a new model of a car. Penetration pricing is a pricing strategy of setting a relatively low initial entry price so as to attract new customers, to increase market share, rather than to make profits in the short run. Generally this type of pricing strategy is very often adopted by Tata Motors. Premium Pricing: Premium pricing strategies is the strategy of consistently pricing at, or near, the high end of the possible price range to help attract status conscious consumers. Honda uses this type of pricing strategy. Its cars are costlier than the other cars in the same segment. It targets people who are status conscious and belong to the high class society

Promotion: In automobile industry the companies are going for Integrated Marketing Communication (IMC) - Direct/Personal selling, sales promotion, public relations, direct mail, trade fairs and exhibitions, advertising, sponsorship and online marketing. Personal Selling largely takes place at the Dealers End. The way the customer is attended depends mainly on the Dealer as he acts as an interface between the company and the Consumer. The various cases in which Personal Selling takes place is Individual Sales, Corporate Sales, Sales Presentations, Fair and trade Shows. Mostly in case of Individual Sales the Customer goes to the showroom and takes a look at the product. There he is attended to by the Sales Personnel of the Dealership. Sometimes the Senior Sales Executive has to make Sales Presentation to Corporate Buyers. Personal Selling is also practiced at Trade Fairs and Auto Shows wherein the Company appointed Sales Personnel attend prospective customers and also book their orders. In the case of Direct Marketing the Company Officials directly contact the Prospective buyers with the information available through various sources. For example in case of Road Shows, Trade Fairs, Auto shows etc. WORD OF MOUTH: the existing customers also provide references of prospective buyers such as their friends or relatives. Advertisement is consider to be the main promotional tool as it gives the car makers an opportunity to flaunt their car and attract the customer it also helps them for brand recall. Talking about advertisement, Volkswagen came up with a revolutionary idea to connect with readers of TIMES OF INDIA; first the 16 second audio ad attached with print advertisement and the recent one where the newspapers were wrapped in a shiny Silver Jacket(false cover) endorsing Volkswagen Jetta on August 29,2011 The online medium offers a greater flexibility to the car companys giving their customers 3D view of the car specially interiors and its salient features. The print medium on the other hand provides an opportunity to the car makers to explain the function of a car in detail. The celebrity endorsements is most popular and common way to attract the customer. Most of the car companies have their brand ambassador for promoting their cars.Super star Shahrukh Khan has been associated with Hyundai Motor Company for a long to promote the Santro car and i10 . Abhishek Bachan for the promotion of the latest offering from the Ford company Ford Fiesta. Toyota has announced AR Rahman, as the brand ambassador for its Toyota Etios. The testimonial advertisements is prove to be the most innovative way to interact with customer directly and building advocates for the product .Recently the Ford India has come up with new and first-of-its-kind advertising campaign Swap Your Drive, where in the consumers are given a chance to exchange their existing four-wheeler for a new ford vehicle for a weeks time and thus allowing them to provide their first hand feedback.

Distribution Channels: Most of the car companies have the same distribution networks:

STOCKIST

DEALERS

SUB DEALERS

BOOKING AGENTS

Stockist: Stockists are people who undertake to maintain stocks of automobiles. They may act as the wholesalers of vehicles having large stocks. The automobiles manufactured are stored in large numbers and as and when needed the stocks are transferred to the dealers .The stockists generally represent 3 to 4 districts in a state. In a particular state there are stockists in the main districts of the state. Dealers: The vehicles are shipped to the regional branch and from there, to the authorized dealers of the companies. The dealer represents the district or the main city. The customers can directly approach the dealers who have good amount of stocks and can purchase the desired vehicles. They maintain stocks less in number as compared to the stockists but a large number of sales is undertaken from them only. The dealers are located in the main city of a particular state. Sub-dealers:

Sub-dealers deal in small scale and have fewer stocks of vehicles in comparison to the dealers. They represent a particular area in a particular city. They are located in main areas of the city so as to be in the reach of a large number of customers. The customers can approach these easily as they are located at the main areas of the city. Booking Agents: Booking Agents are individuals working on free lance basis. Free lance basis means that persons sell their service to employers without long-term commitments to their employers. They generally work under the terms of the contract of sale and have a prior target of accomplishment of a certain number of customers. They are responsible for reaching the customers and for completing the process of sale.

R&D The R&D efforts of the automotive industry are primarily focused on technologies that will make automobile as environmentally compatible, as economically and as safe as possible. The Department of Heavy Industry, under the Ministry of Heavy Industries and Public Enterprises, is the main agency in India for promoting the growth and development of the automotive industry. The department assists the industry in achievement of its expansion plans through policy initiatives, suitable interventions for restructuring of tariffs and trade, promotion of technological collaboration and up-gradation as well as research and development.

Porters five force model to analyze Indian automobile industry Porters five force model can be used to analyze the Indian auto industry with greater accuracy and it also helps to understand the industry better. It involves all the major stake holders of the industry like its suppliers, customers, competitors etc , to give a vivid picture of the scenario. Competitors: After liberalization, with entry of many global manufacturers, competition in the automobile industry has peaked. With many auto manufacturers wanting to invest and hold considerable market share in emerging market like India, competition has become very stiff. Pioneers of the industry like Tata, Maruti,Bajaj etc with their good dealership and supplier network become hard to conquer to new entrants. Despite these advantages the local players enjoy, international companies with their cutting edge technology, innovation, deep pockets etc, have become a major threat to the indigenous manufacturers. Also, many business houses in India have plans to expand to automotive sector from existing two wheeler segment and few player also wish to invest largely in this market.

Substitutes Very less

Consumers power Wide choice

Competitors Stiff competition

New entrants Many global players

Suppliers power Bargaining power due to many manufacturers

New entrants: Increased interest shown by global auto giants to invest in India has brought in new companies to invest in India. Honda starting their operation in India from 1995, Toyota setting up plant in 1997, Audi and Nissan starting operations in 2004 and 2005 respectively made the market bustle with new entrants. With these companies starting operation in India, market has opened up for other global auto companies also to come into India, since it has a huge potential and expected to grow to be the worlds third largest by 2020. Suppliers power: With many automobile manufacturing units being set up in recent past, suppliers of auto components and raw materials who have expertise enjoy bargaining power with the manufacturer. The high price put forth by the supplier becomes a major problem to the manufacturer, which directly contributes to the cost of product. Also most auto manufacturers depend on parts from suppliers, which is often referred to as OEMs or original equipment manufacturers. Without the supply of these parts, it becomes almost impossible to assemble the vehicle. So suppliers play a vital role.

Consumers power: With many products to choose from, in every segment of automobile vehicles, customer has become the king in the industry. Every company tries to lure customers with various offers, quality product and service and thereby increase their market share. Customer retention also is a major issue and all companies are focusing towards it. Customer is no longer ready to wait for too long to receive car delivery. So, all companies try to make their production system flexible and use technologies to predict demand.

Substitutes: Threat of substitutes to automobile industry is minimum. Very high fuel prices might prompt the customers to buy vehicles which run on cheaper fuel such as diesel or CNG. But in no way this affects the industry as a whole, instead, it pushes companies to develop technology to produce vehicles to run on alternative fuel and vehicles with high mileage. Though electric cars have been manufactured and sold, there has been a cold response from customers to it. However, these types of electric vehicles or cars which run on alternate fuel might become substitutes in near future.