ACKNOWLEDGEMENT No presentation is the work only of the author. I owe much to the people who have played significant role in the development of the project . I have immensely benefited from the comments, observations made by several individuals including Dr. Vishal jain, Head of Department My special thanks to Mrs. Maya Lohani(Senior Lect.) & Ms. Swati Verma(Lect.) for the guidance in preparing this project report. 1
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ACKNOWLEDGEMENT
No presentation is the work only of the author. I owe much to the people who have
played significant role in the development of the project . I have immensely benefited
from the comments, observations made by several individuals including Dr. Vishal
jain, Head of Department
My special thanks to Mrs. Maya Lohani(Senior Lect.) & Ms. Swati Verma(Lect.) for
the guidance in preparing this project report.
PREFACE
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This project is the result on “Analysis of four wheeler industry”
Project work is an integral part of the MBA course. This practical experience helps the student to the real business world closely, which in turn widely influences his/her concepts and perfection.
The Marketing play an important role in accomplishing the objectives of the
organization. If the market research is not properly done, the organization will not be able
to accomplish desired results. Therefore organization try to meet the needs of their
consumers as fully as possible to contribute their maximum for the achievement of the
business objective.
The project assigned was Analysis of four wheeler industry. I
personally met all the respondents for getting all the information.
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ABSTRACT
The automobile industry, one of the core sectors, has undergone metamorphosis with thea d v e n t o f n e w b u s i n e s s a n d m a n u f a c t u r i n g p r a c t i c es i n t h e l i g h t o f l i b e r a l i z a t i o n a n d globalization. The sector seems to be optimistic of posting strong sales in the couple of yearsin the view of a reasonable surge in demand. The Indian automobile market is gearing towards international standards to meet the needs of the global automobile giants and becomea global hub.A detailed analysis of Automobile industry has been covered in respect of past growtha n d p e r f o r m a n c e . U n d e r t h i s p r o j e c t t o b e t t e r u nd e r s t a n d t h e I n d u s t r y w e h a v e u s e d Fundamental and Technical tools to make it more authentic n meaningful. An E.I.C approachhas been followed under Fundamental Analysis which covered effect of Recession, the impact of inflation, FDI’s, Export, GDP etc. on Automobile Industry. The Industry Analysishas been done with the help of five forces model, BCG Matrix, SWOT analysis, industry lifecycle and the industry specific index..For Industry Analysis as a part of Fundamental tool we have undergone with thecomparative analysis of TATA Motors as our leading Industry with Maruti Suzuki India’slargest Car manufacturer. The fundamental aspect consists f inancial and Non-Financialanalysis of both the Industry. In the Technical aspect we have considered Share priceanalysis, moving average, moving average crossover, Bollinger bands and M.A.C.D. of boththe Industry by keeping TATA Motors as our leading Industry.At the end
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conclusion and recommendations have been specified so as to make the research work more meaningful and purposeful.
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EXECUTIVE SUMMARY
The present study is about the four wheeler industry.The aim of the study is to know the
consumer preference about the various products of four wheeler. Consumers have higher
expectations than ever before. They want products to match these expectations. They also
want accurate, up-to-date and useful information about what they buy. In short,
consumers want the facts. This growth of consumer power is known as consumerism.
In the area of fast moving consumer goods (FMCG), marketing has become a specialized
and complex process. When developing products, organizations try to meet the needs of
their consumers as fully as possible. This is vital if they want to do better than their
competitors. This process of development around the needs of its consumers is called
a. Types of consumer that constitute the potential market
b. Size & location of market
c. Growth and concentration of market
d. Consumer preference for particular brand
4. Management Decision
a. Pricing policy of company
b. Distribution channel of product Direct marketing Whole seller & retailer
c. Whole seller-Retailer-Customer
5. Sales promotion strategya. Publicityb. Advertisingc. Personal
6. Customer behaviour
a. Product adoption
b. Customer satisfaction
7. SWOT analysisFormulation Implementation & evaluation of market strategy
8. Conclusion
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INTRODUCTION OF FOUR WHEELER INDUSTRY
BIRTH OF THE CAR
The birth of the car as we know it today occurred over a period of years. It was
only in 1885 that the first real car rolled down on
to the streets. The earlier attempts, though
successful, were steam powered road-vehicles.
The first self-propelled car was built by
Nicolas Cugnot in 1769 which could attain speeds
of upto 6 kms/hour. In 1771 he again designed another steam-driven engine which ran so
fast that it rammed into a wall, recording the world’s first accident.
In 1807 Francois Isaac de Rivaz designed the first internal combustion engine.
This was subsequently used by him to develop the world’s first vehicle to run on such an
engine, one that used a mixture of hydrogen and oxygen to generate energy.
This spawned the birth of a number of designs based on the internal combustion
engine in the early nineteenth century with little or no degree of commercial success. In
1860 thereafter, Jean Joseph Etienne Lenoir built the first successful two-stroke gas
driven engine. In 1862 he again built an experimental vehicle driven by his gas-engine,
which ran at a speed of 3 kms/hour. These cars became popular and by 1865 could be
frequently espied on the roads.
The next major leap forward occurred in 1885 when the four stroke engine was
devised. Gottileb Damlier and Nicolas Otto worked together on the mission till they fell
apart. Daimler created his own engines which he used both for cars and for the first four
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wheel horseless carriage. In the meanwhile, unknown to them, Karl Benz, was in the
process of creating his own advanced tri-cycle which proved to be the first true car. This
car first saw the light of the day in 1886.
The season of experiments continued across the seas in the United States where
Henry Ford began work on a horseless carriage in 1890. He went several steps forward
and in 1896, completed his first car, the Quadricycle in 1896. This was an automobile
powered by a two cylinder gasoline engine. The Ford Motor Company was launched in
1903 and in 1908 he catapulted his vehicle, Model T Ford to the pinnacle of fame.
Continuing with his innovations, he produced this model on a moving assembly line, thus
introducing the modern mass production techniques of the automobile industry.
The modern car, therefore comes from a long list of venerated ancestors, and its
lineage will, hopefully
ADVENT OF CARS IN INDIA
From the singsong rhythm of the bullock cart to
the jet-age, India has traveled a long way. An average
Indian’s dream car may not be the design-savvy Honda or
the stately limousine, but he sure can dream, and afford,
the Maruti now.
It was in 1898 that the first motorcar rode down India’s
roads. From then till the First World War, about 4,000
cars were directly imported to India from foreign manufacturers. The growing demand
for these cars established the inherent requirements of the Indian market that these
merchants were quick to pounce upon.
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The Hindustan Motors (HM) was set up in 1942 and in 1944, Premier
Autobackmobile (PAL) was established to manufacture automobiles in India. However, it
was PAL who produced the first car in India in 1946, as HM concentrated on auto
components and could produce their first car only in 1949.
It was left to another company, Mahindra and Mahindra (M&M) to manufacture
sturdier utility vehicles, namely the American Jeep.
In the 50s, the Government of India granted approval to only 7 car dealers to
operate in India - HM, API, ALL, SMPIL, PAL, M&M and Telco. he protectionist
policies continued to remain in place. The 60s witnessed the establishment of the two-
three wheeler industry in India and in the 70s, things remained much the same.
Since the 80s, the Indian car Industry has seen a major resurgence with the opening up
of Indian shores to foreign manufacturers and collaborators.
The 90s have become the melting point for the car industry in India. The consumer is
king. He is being constantly wooed by both the Indian and foreign manufacturers.
Though sales had taken a dip in the first few months of 1999, it is back to boom time.
New models like Maruti’s Classic, Alto, Station Wagon, Ford’s Ikon, the new look
Mitsubishi Lancer are all being launched with an eye on the emerging market.
In these last years of the millennium, suffice it is to say that Indian cars will only grow
from strength to strength.
AUTOMOBILE INDUSTRY – WHEELS OF CHANGE:
India had its date with this wonderful vehicle first time in 1898. Then for the nextf i f t y y e a r s , c a r s w e r e i m p o r t e d t o s a t i s f y d o m e s t i c d e m a n d . B e t w e e n 1 9 1 0 a n d 2 0 ' s t h e a u t o m o b i l e i n d u s t r y m a d e a h u m b l e b e g i n n i n g b y s e t t i n g u p a s s e m b l y p l a n t s i n M u m b a i , Calcutta and Chennai. The import/assembly of vehicles
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grew consistently after the 1920's,c r o s s i n g t h e 3 0 , 0 0 0 m a r k i n 1 9 3 0 . I n 1 9 4 6 , P r e m i e r A u t o m o b i l e L t d ( P A L ) e a r n e d t h e 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. Thanks to the Licence Raj whichr e s t r i c t e d f o r e i g n c o m p e t i t o r s t o e n t e r t h e I n d i a n c a r m a r k e t , I n d i a n r o a d s w e r e r u l e d b y Ambassador Car from Hindustan Motors and the Fiat from Premier Auto Ltd. for many of theinitial years.In 1952, the GOI set up a tariff commission to devise regulations to develop ani n d i g e n o u s a u t o m o b i l e i n d u s t r y i n t h e c o u n t r y . A f t er t h e c o m m i s s i o n s u b m i t t e d i t s r e c o m m e n d a t i o n s , t h e G O I a s k e d a s s e m b l y p l a n t s , w h i c h d i d n o t h a v e p l a n s t o s e t u p m a n u f a c t u r i n g f a c i l i t i e s , t o s h u t o p e r a t i o n s . A s a r e s u l t G e n e r a l M o t o r s , F o r d a n d o t h e r a s s e m b l e r s c l o s e d o p e r a t i o n s i n t h e c o u n t r y . T h e y e a r w a s 1 9 5 4 a n d t h i s d e c i s i o n o f t h e government marked a turning point in the history of the Indian car industry. The GOI alsohad a say in what type of vehicle each manufacturer should make. Therefore, each productwas safely cocooned in its own segment with no fears of any impending competition. Also,n o n e w e n t r a n t w a s a l l o w e d e v e n t h o u g h t h e y h a d p l a n s o f a f u l l - f l e d g e d m a n u f a c t u r i n g p r o g r a m . T h e r e s t r i c t i v e s e t o f p o l i c i e s w a s c h i e f l y a i m e d a t b u i l d i n g a n i n d i g e n o u s a u t o industry. However, the restrictions on foreign collaborations led to limitations on import of t e c h n o l o g y t h r o u g h t e c h n i c a l a g r e e m e n t s . I n t h e a bs e n c e o f a d e q u a t e t e c h n o l o g y a n d purchasing power, the car industry grew at a snail 's pace in the 60’s. The demand for cars in14
1960 was to the tune of 15,714. In the next two decades the number increased to 30,989 i.e. aCAGR of only 3.5 per cent.
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INDUSTRY STRUCTURE
Structure:
The Indian Automobile industry can be broadly classified into :
2/3 wheelers
Passenger cars
Commercial vehicles (LCV/MCV/HCV)
UV (Utility Vehicles)
Tractors
The models in the car market can be fitted to different segments as
Association of International Automobile Manufacturers, Inc (AIAM)
Members of the Association of International Automobile Manufacturers, Inc. (AIAM) distribute world-class passenger cars, multipurpose passenger vehicles, and light trucks in the United States.
COMPARISION OF MARKETMarket Share of Company & Growth Rate
It is common for automobile manufacturers to hold stakes in other automobile manufacturers. These ownerships can be explored under the detail for the individual companies.
Notable current relationships include:
Daimler AG holds a 20% stake in Eicher Motors, a 10.0% stake in KAMAZ, a 10% stake in Tesla Motors, a 6.75% stake in Tata Motors and a 3.1% in the Renault-Nissan Motors alliance. They are in the process of selling back their 40% stake in McLaren Group. This process will be finalized in 2011.
Dongfeng Motor Corporation is involved in joint ventures with several companies in China, including: Honda, Hyundai, Nissan, Nissan Diesel, and PSA Peugeot Citroen.
Fiat holds a 85% stake in Ferrari and a 20% stake in Chrysler, that can be increased to 35%; with the option of increasing its stake further.
Ford Motor Company holds a 13.4% stake in Mazda and an 8.3% share in Aston Martin.
Geely Automobile holds a 23% stake in Manganese Bronze Holdings.
General Motors and Shanghai Automotive Industry Corporation (SAIC) have two joint ventures in Shanghai General Motors and SAIC-GM-Wuling Automobile.
General Motors and Toyota Motor Corporation have a joint venture in New United Motor Manufacturing, Inc.
Hyundai Kia Automotive Group holds a 38.67% stake in Kia Motors, down from the 51% that it acquired in 1998.
MAN SE holds a 17.01% voting stake in Scania.
Porsche Automobil Holding SE has a 50.74% stake in Volkswagen Group. Due to liquidity problems, Volkswagen Group is now in the process of acquiring Porsche.
Renault-Nissan Motors have an alliance involving two global companies linked by cross-shareholding, with Renault holding 44.3% of Nissan shares, and Nissan holding 15% of (non-voting) Renault shares. The alliance holds a 3.1% share in Daimler AG.
Renault holds a 25% stake in AvtoVAZ and 20.5% of the voting stakes in Volvo Group.
Toyota holds a 51% stake in Daihatsu, and 16.5% in Fuji Heavy Industries, parent company of Subaru.
Volkswagen Group and FAW have a joint venture.
Volkswagen Group and Shanghai Automotive Industry Corporation (SAIC) have a joint venture in Shanghai Volkswagen Automotive.
Volkswagen Group holds a 37.73% stake in Scania (68.6% voting rights), and a 29% stake in MAN SE.
Volkswagen Group has a 49.9% stake in Porsche AG. Volkswagen is in the process of acquiring Porsche, which will be completed in mid-2011.
Volkswagen Group has a 19.9% stake in Suzuki, and Suzuki has a 5% stake in Volkswagen.
COMPANY EXTERNAL ENVIRONMENT
The Television industry is witnessing a spate of new channels being launched every year. FOUR
WHEELER is also penetrating into the rural areas and is a promising segment. Homes with FOUR
WHEELER s are expected to grow from 112 million to 200 million in a few years.
India boasts of being the third largest television market in the world today. And cable
penetration (pay FOUR WHEELER market) is expected to grow from the present 70
million to all FOUR WHEELER homes. More than 350 channels (paid and free) are
available to viewers in India today.
The fact that 40 per cent households of India are still without television connectivity
highlights the scope of growth in the segment. The majority of the revenue generated in
the television industry is through advertisements, followed by subscriptions. The Indian
television advertisements market is currently valued at about US$ 1,067 million and is
expected to grow at a rapid rate with the increase in the number of channels and the
television viewers. Over the next five years, the subscription revenues are poised to be
the growth driver of the Indian television industry. The number of pay FOUR
WHEELER homes and the increased subscription rates will increase the subscription
revenues. The spread among the lower- income groups is very low and offers a wide
scope for growth. The Indian television industry is currently being dominated by Star
India, which is the top player in the sector at present.
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MARKET SEGMENTATION
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TARGET MARKETING
1. Mass Marketing
2. Concentrate Marketing
INTRODUCTION: - The market for any product is normally made up of several segments. A ‘market’ after all is the aggregate of consumers of a given product. And, consumer (the end user the end user), who makes a market, are of varying characteristics and buying behavior. There are different factors contributing for varying mind set of consumers. It is thus natural that many differing segments occur within a market. In order to capture this heterogeneous market for any product, marketers usually divide or disintegrate the market into a number of sub-markets/segments and the process is known as market segmentation. Thus we can say that market segmentation is the segmentation of markets into homogenous groups of customers, each of them reacting differently to promotion, communication, pricing and other variables of the marketing mix. Market segments should be formed in that way that difference between buyers within each segment is as small as possible. Thus, every segment can be addressed with an individually targeted marketing mix. The importance of market segmentation results from the fact that the buyers of a product or a service are no homogenous group. Actually, every buyer has individual needs, preferences, resources and behaviors. Since it is virtually impossible to cater for every customer’s individual characteristics, marketers group customers to market segments by variables they have in common. These common characteristics allow developing a standardized marketing mix for all customers in this segment. Through segmentation, the marketer can look at the differences among the customer groups and decide on appropriate strategies/offers for each group. This is precisely why some marketing gurus/experts have described segmentation as a strategy of dividing the markets for conquering them.
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MARKETING STRATEGY AND MARKET SEGMENTATION: - When it comes to marketing strategies, most people spontaneously think about the 4P (Product, Price, Place, Promotion) – maybe extended by three more Ps for marketing services (People, Processes, Physical Evidence).
This caselet illustrates the strategy followed by Maruti Udyog Limited (MUL), India’s largest car maker, when confronted with intense competition from foreign players. It highlights the promotional offers undertaken by MUL in its quest for market dominance. The caselet examines how the company aligned itself to the changing market requirements, through promotional offers, and reached out to potential customers. Finally, the caselet throws light on how MUL entered the pre-owned/used car market in India.
However, things changed in the 90’s with the entry of domestic as well as overseas
companies into the automobile market, especially with the entry of Hyundai Motor India
Ltd., the fully owned subsidiary of Hyundai Motor Co., Korea, and Tata Engineering of
the Tata Group. Hyundai's 'Santro' model endorsed by popular actor Shah Rukh Khan
proved to be a major success. This resulted in a sharp decline in the sales volumes of the
Maruti 800
Maruti make his segmentation on the mass basis
BMW was done concentrate marketing
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MARKET RESERCH
THEORY OF RESEARCH METHODOLOGY
This is chapter explain various methods & techniques used in this research study
with their suitability. This part of the research report is very much important because it
explain the methods; concept&procedures followed by the researcher study the problem.
It is helping to the reader to understand whole the easily.
As marketing research does not address itself to basic or fundamental question. It
does not quality as basic research on the country, It tackles problem, which seem to have
immediate commercial potential. In view of this major consideration. Marketing research
should be regarded as applied research. We may also say that marketing research is of
both types-problem solving and problem oriented.
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Marketing research is a systematic and objective study of problem pertaining to
the marketing of goods and service.It may be emphasized that is it not restricted to any
particular area of marketing but is applicable to all its phases and aspects
The American Marketing Association (AMA) has defined Marketing research
follows Marketing research is the function which the consumer, Identify and define
marketing opportunities &problems; generate, refine and Evaluate marketing actions;
monitor marketing performance; and improve Understanding of a market as a process.
Marketing Research specified the information required to Address these issues;
designs the method for collecting information. Managers and Implements the data
collection process; analyses the results; the Communications the findings and their
implications.
RESEARCH DESIGN
“A research design in the specification of methods and procedures for acquiring
the needed information it is the over all operational pattern of frame work of the project
that stipulates what information is to be collected from which sources by what
procedures”
To achieve objectives of my project study I have selected the exploratory research
& also the causal research.
METHOD Of DATA COLLECTION
There are two types of data
Primary data: -
“Primary data is the data which is collected by the research at first hand.”
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Sources
To collect primary data the questionnaire system is uses through market
survey.Structured non disgusisd questionnaire is applied in which question question are
listing in prearranged on paper and where the object of inquiry is revealed to the
respondent I have contected the customer and interviwed them by personally & by
telephones.The analysis of the collected data through questionnaire is given in the later
part of the project.
Secondary data
“Secondary data whether internal or external is the data already collected by others
for propose other then solution of the problem at hand”
Secondary sources are
Internal sources:
Internal guide
(Prof Vasudev Modi)
Sales executive of the Dhru Motors
External sources
Various marketing books
www.maruti udhyog.com
PRE-TESTING
A pre- testing is small-scale replica of the main study. it dresses a rehearsal and
provides guidance on the following matter.
1. The adequacy of the sampling frame to be followed for the survey.