hyundai

A PROJECT REPORT ON

MARKETING STRATEGIES OF HYUNDAI MOTORS INDIA LIMITED WITH FOCUS ON

HYUNDAI SANTRO

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF BACHELOR OF BUSINESS ADMINISTRATION [BBA]

TRAINING SUPERVISOR SUBMITTED BY

Subhashish roy akhil malikMarketing manager enrollment no:05511110009 Company:Hyundai batch:2005-08

Guru jambheswar university of science

And technology,hisar

ACKNOWLEDGEMENT

This term paper analyses the marketing strategies and marketing mix of

Hyundai Motors India Limited with special focus on its B-Segment car

Santro.

I would also like to thank my respected mentor and guide Mr.

Shubhashish Roy (Marketing Manager) for giving me this opportunity

to apply my classroom knowledge in the practical field, which will

further harness my skills and sharpen my business acumen.

AKHIL MALIKCourse:BBA

EXECUTIVE SUMMARY

Indian Economy has undergone a radical transformation in the last three decades. The

discoveries and invention in various fields of life is perhaps being the reasons for this

transformation. The marketing strategy in India which was practiced in the olden

days has either been changed or been refined so as to adjust with this dynamic world.

If we consider the early years of development of our economy, It is observed that the

producer’s consumers as well as production and consumption is becoming more and

more complex and specialized.

The present emphasis is one matters of providing a complete ‘comfort’ or ‘status’ to

the customers every walk of life. In the light of the present marketing scenario,

through this project, How HYUNDAI MOTOR INDIA LTD. can increase its market

share in “automobile industry” emphasis on marketing.

Authentic marketing is not the art of selling what you make but knowing what to

make. It is the art of identifying and understanding customer needs and creating

solutions that deliver satisfaction to the customers, profits to the producers and

benefits for the stakeholders. - Philip Kotler

This Project report tries to take a look on various aspects on Marketing and study of

Marketing strategies adopted by Hyundai Motors India Limited (HMIL) with a

special focus on Hyundai Santro. We settled for HMIL because at the time of its entry

in Indian Market back in 2007, it was taken as another foreign car maker entering

Indian Passenger car market. But the way in which HMIL has achieved a constant

growth rate of around 30% in past 8 years and the way Santro has emerged as the

market leader in B-segment is all due to its fierce Marketing program. Hence a

detailed study at the marketing strategies adopted by HMIL for Santro gives us an

excellent opportunity to apply our classroom learning in analyzing real life situations.

TABLE OF CONTENTS

S.No. Topic

Chapter 1. Introduction - 1-9

Indian Automobile Industry

Objectives

Porters Five Force Model

History of Indian Automobile Industry

Trends In Indian Automobile Industry

Key Developments in the Industry

Key Demand Drivers

Chapter 2. Objectives 10

Chapter 3. Segment Analysis 11-13

Chapter 4. Hyundai Motors India Limited 14-20

An Overview Of The Company

New Milestones

Awards And Recognition

Product

Chapter 5. Research Methodology 21

Data Collection

Sample Size

Statistical Tools

Chapter 6. Analysis Of The Marketing Strategy With Focus To

Hyundai Santro

22-33

STP – Segmentation, Targeting, Positioning

Porter 5 Force Model

SWOT Analysis

P’s Of Hyundai Motor India Ltd. With Focus On Hyundai

Santro

Chapter 7. Findings And Analysis 34-42

Chapter 8. Recommendations 75-76

Chapter 9. Conclusion 77

Questionnaire 78-79

References 80

Bibliography 81

INTRODUCTION

INDIAN AUTOMOBILE INDUSTRYA market is never saturated with a good product, but it is very quickly saturated with

a bad one. - Henry Ford

The automotive industry is one of the largest industries worldwide and in India as

well. The automotive sector is a vital sector for any developed economy. It drives

upstream industries like steel, iron, aluminium, rubber, plastics, glass and electronics,

and downstream industries like advertising and marketing, transport and insurance.

The automotive industry can be divided into five sectors:-1) Passenger Cars

2) Multi- Utility Vehicles (MUVs)

3) Two- and Three- Vehicles

4) Commercial Vehicles - Light Commercial Vehicles (LCVs) / Medium and

Heavy Commercial Vehicles (MHCVs)

5) Tractors

We will be looking at the Passenger car industry in India.

Despite a head start, the passenger car industry in India has not quite matched up to

the performance of its counterparts in other parts of the world. The primary reason 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’.

The following table presents a comparative view of the extent of motorization in India

vis-à-vis certain other countries in the world.

Country Passenger Cars in Use

per Thousand Persons

Two-Wheelers in Use

per Thousand Persons

Developed Countries

U.S.A 478 14

United Kingdom 373 12

Japan 395 115

Germany 508 36

Emerging Economies

China 3 8

Indonesia 14 62

Philippines 10 14

South Korea 167 59

India 5 27

OBJECTIVES

Some of the Objectives which are focused upon in this report are:

A comprehensive analysis of Indian Automobile Industry.

To study the Marketing Strategies of HMIL wit focuses on Santro.

To focus on Marketing Mix of Hyundai Santro.

To study the consumer satisfaction level with focus to Hyundai santro.

Special emphasis on Promotional activities of Santro and how HMIL has been

able to reposition it in recent times.

Milestones achieved by HMIL.

Recommendations and observations regarding HMIL.

Porter Five Forces Model in the Indian Automobile Industry

Threat from New Players: Increasing Most of the major global players are present in

the Indian Market; a few more are expected to enter. Financial strength assumes importance as high

investments are required for building capacity. Access to distribution network is important.

Although important for all segments, having a distribution network in rural areas is vital for two-wheeler makers.

Lower tariffs in the post-World Trade Organization era may expose Indian companies to threat of imports (however, the threat may be mitigated by non-tariff barriers that may still exist).

Market Strength of Suppliers: Low

A large number of automotive component suppliers are present in the Indian automotive industry.

Automotive players are rationalizing their vendor base to achieve consistency in quality.

Rivalry within the Industry: High There is keen

competition in select segments (such as the Compact and Mid-size segments in passenger cars, and the motorcycle segment in two-wheelers).

New multinational players may enter the market.

Market Strength of Consumers: Increasing Increases awareness among

consumers has raised expectations. Thus, the ability to innovate (technology being the enabler) is critical.

Product Differentiation via new features, improved performance and after sales support is critical.

Increases competitive intensity has limited the pricing power of manufacturers.

Threat from Substitutes: Low-Medium With consumer preferences

changing, inter-product substitution is taking place (scooters are being replaced by motorcycles, and Mini cars by Compact Mid-size cars.

HISTORY OF INDIAN AUTOMOBILE INDUSTRY

Initially, in the post-liberalization period, the automotive sector, especially the

passenger car segment, saw a boom, derived primarily from economic vibrancy,

changes in Government policies, increase in purchasing power, improvement in life

styles, and availability of car finance. The passenger car industry was finally

deregulated in 1993. However, the automobile industry, which contributed

substantially to the industrial growth in FY1996 failed to maintain the same

momentum between FY1997 and FY1999. The overall slowdown in the economy and

the resultant slowdown in industrial production, political uncertainty and inadequate

infrastructure development were some of the factors responsible for the slowdown

experienced. In FY2007, the sector experienced a turnaround and witnessed the

launch of many new models.

Two things that stunted growth of this industry in the past have been low demand and

lack of vision on the part of the original equipment manufacturers (QEMs). However,

the demand picked up after the liberalization of the regulatory environment, and

global QEMs- who enjoy scale economies both in terms of manufacturing and

research and development (R&D) - entered the Indian market. This has resulted in a

big shift in the way business is conducted by suppliers, assemblers and marketers.

PASSENGER CAR INDUSTRY IN INDIA: HIGHLIGHTS

Passenger car sales are expected to increase at a compound annual growth rate

(CAGR) of 8% over the period FY2006-2007. The six broad segments in the car

market today are- Mini, Compact, Midrange, Executive, Premium and Luxury. In

the medium term, growth in the Indian passenger car industry is expected to be led

largely by the Compact and Mid-range Segments.

The critical success factor has changed from price to price value.

In terms of engine capacity, the Indian passenger car market is moving towards cars

of highest capacity.

With the launch of new models from FY2007 onwards, the market for MUVs has

been redefined in India, especially at the upper end. Currently, the higher-end

MUVs, commonly known as Sports Utility Vehicles (SUVs), occupy a niche in

the urban market. With the success of SUVs, the line of distinction between

passenger cars and MUVs in the Indian market is getting increasingly blurred.

Domestic car manufacturers are now venturing into areas such as car financing,

leasing, and fleet management, and used-car reconditioning /sales, to complement

their mainstay-business of selling new cars.

Trends in the Indian Passenger Car Industry

Indian Passenger Car

Industry

Manufacturing Technologies:Flexible Manufacturing Systems

Components:Tierisation;Tyres: Radials, Retreading

Regulatory framework:Deregulation;De licensing;Removal of QRs;Introduction of strict Emission norms

Auto finance:Better/ cheaper schemes

Distribution Systems:Changing relationship of manufacturers with dealers and suppliers

Materials: Low weight; Synthetic Composites

Entry of Foreign Manufacturers

Product technology:MPFI; CRDi; diesel system

Structure of demand:Change in industry segmentation

KEY DEVELOPMENTS IN THE INDUSTRY

COMPANY NAME

DOMESTIC SALES MARKET SHARE

APR-AUG

2006

APR-AUG

2007 GROWTH

APR-AUG

2006

APR-AUG

2007

Daimler Chrysler India Pvt Ltd 633 662 4.6 0.2 0.2

Fiat India Automobiles Pvt Ltd 2907 635 -78.2 0.9 0.2

Ford India Ltd 8852 6944 -21.6 2.8 2.1

General Motors India Ltd 7179 4981 -30.6 2.3 1.5

Hindustan Motors Ltd 5610 5626 0.3 1.8 1.7

Honda Siel Cars India Ltd 13813 17560 27.1 4.4 5.3

Hyundai Motor India Ltd 48299 63140 30.7 15.3 19

Maruti Udyog Ltd 162007 169606 4.7 51.4 51.1

Skoda Auto India Ltd 3003 3439 14.5 1 1

Tata Motors Ltd 58548 55536 -5.1 18.6 16.7

Toyota Kirloskar Motor Ltd 4519 4030 -10.8 1.4 1.2

Total Passenger Car Sales 315370 332159 5.3 100 100

During April – August 2007, the passenger car sales in India at 332159 units, marked

a growth of 5.3%over the previous year. The growth in the domestic sales of

passenger cars was led by strong growth in volumes reported by compact and mid –

size segments. While the share of mini and executive segments declined in the period

under study, the share of other segments increased. For instance, the share of compact

segment in the domestic car sales increased from 59.7% in April – August 2007 to

64.9% in April – August 2007, mid – size segment from 20.5% to 22%, and the share

of Premium segment was stagnant at 0.7% in the same period.

New variants launches, easy availability of finance at relatively lower interest rate and

price discounts offered by the players have played an important role in driving the

sales growth in the domestic passenger car industry.

Among the top three manufacturers, HYUNDAI reported a strong growth in sales of

its compact and mid – size car models and increased its market share in April –

August 2007 vis-a–vis corresponding previous. For Maruti Udyog Ltd, a marginal

growth in sales volumes allowed it to maintain its market share during the first five

months of FY2006 while the market share of Tata Motors declined in the same

period.

Key Demand Drivers

Traditionally, disposable income was perceived as the key factor driving passenger

car demand. But over time, other factors that are known to have an impact on demand

have emerged. These include the need for greater mobility, non- availability of public

transport services, availability of cheap finance, development of the used-car market,

introduction of new technologically superior models, increasing levels of urbanization

and changing consumer profiles.

CAR DEMAND

There is a high degree of correlation between the demand for cars and ECONOMIC GROWTH.

Availability of NEW MODELS is likely to increase and change the structure of demand.

Competitive PRICING is crucial for gaining market share, especially in the small car segment.

AVAILABILITY OF CHEAP FINANCE is a key determinant of demand as most cars (around 60%) purchased in India are financed.

A mature USED CAR MARKET would, on one hand, encourage consumers to trade in their cars faster, and on the other, eat well into the share of new cars.

The Central Government’s AUTO POLICY on excise and customs is an important aspect affecting the demand and supply of cars.

High degree of correlation between PER CAPITA INCOME and demand for cars, increase in the number of people crossing the income threshold, and CHANGING CONSUMER PROFILE are likely to increase and change the structure of demand.

Segment Analysis

  MINI COMPACT MID-SIZEEXECUTIV

EPREMIU

MLUXUR

Y

Vehicle Length<3400mm 3401-4000 4001-4500 4501-4700

4701-5000 >5000

Maruti Udyog Ltd

800 Alto EsteemOmni Zen Baleno

Wagon R AlturaVersa

Hyuindai Motor India Ltd Santro Accent Elantra Sonata

Hindustan Motors Ltd

Ambassador Contessa

MitsubishiLancer

Fiat India Automobile Ltd

Palio SienaUno adventure

Weekend

General Motors India Ltd

Corsa Sail Opel CorsaOpel

VectraOpel Astra

Opel Swing

Honda Siel India Ltd City AccordFord India Ltd Ikon MondeoTELCO Indica Indigo

DalmierChrysler India Ltd

Mercedes Benz C Class,M Class,SL

Mercedes Benz E Class

Mercedes Benz S Class

Skoda India Ltd OctaviaToyota Kirlosker Motor Ltd Corolla Camry

The credit for growing the Indian Compact Segment, and in fact, the Indian Passenger

car industry goes partly to the Korean manufacturers (HMIL and the erstwhile

Daewoo) and the Indian player Tata Motors.

The HMIL Santro was launched in September 2006 and created a sensation on

account of its aggressive pricing at Rs.2, 99,000. The Santro became successful as

HMIL had got the price –value equation just right. While Daewoo’s Matiz picked up

only seven months after its launch, the Santro was selling more than 3000units a

month only 2 months after its launch. HMIL had infact, planned its entry into the

Indian market with the 1495cc Accent but later opted in favour of the smaller car. At

the time the Santro was launched, both the options available in the segment- Fiat Uno

and the Zen-had been around in the Indian Market for quite some time and lacked

novelty. Santro was not only cheaper but also incorporated a multi-point fuel injection

(MPFI) system that offered superior fuel economy to Zen’s carburetor system.

The Matiz was launched in November 2006. Its 800cc engine immediately

encouraged comparisons with Maruti 800. The initial launch price of Matiz at Rs. 3,

55,000 was significantly higher than the Santro’s Rs, 2, 99,000. Given that the Matiz

was smaller than the Zen and the Santro, the initial impact was not so strong. In May

2007, Daewoo launched stripped-down variants. The launch of the cheaper versions

saw the sales of Matiz reaching almost 2006 units in May 2007 and recording an

average monthly sale of 3123units in FY2007. However, the financial crisis faced by

the parent, Daewoo Motor Corporation affected the performance of the Indian

subsidiary (that was reporting net loss and had significant borrowings). Subsequently,

the Indian subsidiary halted production.

MUL now has 3 cars in the Compact Segment: the Zen, the Alto and the Wagon R. In

terms of market share, Zen steadily lost share in FY2007 to its competitors. Despite

this, there is no denying that the Zen is one of the bigger success stories in the Indian

car market. With 3 models, MUL is the market leader in the Compact segment.

The Alto arrived in India when there was little room for man oeuvre in a crowded

compact segment. It was launched in 2 versions, the LX and the VX. The base version

is priced competitively with the deluxe version of the Maruti800, while the higher-end

version competes with the based versions of the Zen and the Wagon R.

The 1061cc Wagon R is available in four manual transmission variants (LX, LXi, VX

and VXi) and one automatic transmission variant (AX). Since its introduction in

February 2007, Wagon R has been selling in the 1500-3000units per month range as

against 5000-8000units per month range for the Santro. The presence of the already

well-established Matiz and the Santro meant that the novelty factor did not work too

well for Wagon R.

The other cars in the compact segment to have made an immediate dent in the market

with their launch are the Palio of Fiat India and the improved version Indica V2 of

Tata Motors. Indica was the third largest selling car in FY2006 in this segment, after

Santro and Zen. On the other hand, Palio was launched at the time when the passenger

car industry was witnessing a slump but the model cut across the barriers and was

able to create a market for itself. However, the success of this model was short-lived

and the sales declined thereafter. Nevertheless, launches of new variants (such as the

diesel version) helped sales recover marginally.

The size of the compact segment has increased as a result of the high growth rate

attained by the models in this segment. The changing price-value equation, coupled

with the declining interest rates and easy availability of finance, has prompted

consumers to move towards the compact car segment from the mini segment. The

high rate of growth achieved by the compact segment has attracted the attention of

other players also; including GM. GM has entered the compact segment with the

launch of its Opel Corsa Sail in May 2007.

Hyundai Motors India Limited

An Overview

Hyundai Motor India Ltd. (HMIL) is a wholly owned subsidiary of the Hyundai

Motor Company (HMC), Korea, a part of the Hyundai Motor Group comprising

Hyundai Motor Company, Kia Motors, Hyundai Mobis and other affiliated

companies, with a combined turnover of over US$ 50 Billion. The Hyundai Motor

Group with a presence in over 185 countries and combined annual sales of over 3

million units is one of the fastest growing auto manufacturers in the world.

HMIL has emerged as the second largest and the fastest growing car manufacturer in

India. HMIL presently markets over 26 variants of passenger cars in six segments.

The Santro in the B segment, Getz in the B+ segment, the Accent in the C segment,

the Elantra in the D segment, the Sonata in the E segment and the Tucson and

Terracan in the SUV segment.

The company recorded combined sales of 215,630 during calendar year 2006 with a

growth of 43% over year 2007. HMIL is India's fastest growing car company having

rolled-out over 700,000 cars in just over 70 months since its inception and is the

largest exporter of passenger cars with exports of over Rs. 1,700 crores. HMIL has

recorded a staggering growth of 149% in exports over the year 2007.

HMIL’s fully integrated state-of-the-art manufacturing plant near Chennai boasts

some of the most advanced production, quality and testing capabilities in the country.

In continuation of its investment in providing the Indian customer global technology,

HMIL has announced plans for its second plant, which will produce 150,000 units per

annum, raising HMIL’s total production capacity to 400,000 per annum by 2007. The

plant will be built on a 2.1 million square meter site adjacent to the existing facility

with an investment of $450-$500 million on its new integrated facility. HMIL is

investing to expand capacity in line with its positioning as HMC’s global export hub

for compact cars. Apart from expansion of production capacity, HMIL plans to

expand its dealer network, which will be increased from 146 to 180 this year. And

with the company’s greater focus on the quality of its after-sales service, HMIL’s

service network will be expanded to over 1,000 in 2007.

HMIL has many awards in its bouquet. It was declared “The Star Company” amongst

unlisted companies by Business Standard this year. Getz got the coveted “Car of the

Year 2007” award twice over. It was declared a winner by both Business Standard

Motoring and CNBC-TV18 Autocar Auto awards. Hyundai Elantra won the CNBC-

TV18 Autocar “Best Value for Money” Car Award.

HMIL was also the “Manufacturer of the Year” two years in a row in 2006 and 2007.

ICICI Overdrive Awards declared Hyundai as the “Car Maker of the Year” in 2007.

Hyundai products with state of the art technology have also been winning many

accolades over the years. Santro bagged top honours in JD Power Asia Pacific for

three years. Accent was ranked No. 1 in J D Power Asia Pacific APEAL for two years

and also got Business Standard Motoring Jury award for its CRDi model.

HMIL has also been awarded the benchmark ISO 14001 certification for its

sustainable environment management practices.

The following table shows the HMIL’s cars and the various segments they belong to

as in the Indian market.

Segment Classification HMIL’s Car Price

(Ex Showroom in Delhi)

B Sub - Compact Santo Xing Rs. 278999

B+ Compact Getz Rs. 421000

C Mid Size Accent Rs. 529000

D Premium Elantra Rs. 853793

E Luxury Sonata Rs. 1399000

SUV Sports Utility

Vehicle

Tucson

Terracan

Rs. 1462999

Rs. 2059151

NEW MILESTONES

The Indian passenger car market is a highly competitive market. Although its growth

has been hi in past several years, profitability has been impacted because of rising

costs, change in excise policies and intense price competition. With the developed

countries like USA and UK having 350 as an average no of cars per thousand persons

it is very low in India (5). So in future, the arena of competition is most likely to be

shifted to developing countries like India and that too in a highly competitive segment

like B-Segment.

With the opening of economy and relaxing norms by government, the market has

started witnessing the entry of new global players like Toyota, Honda and GM in the

Indian market, pointing to further intensification of competition in future. With the

consumer attaching higher value to the features and economy in case of car buying,

the players are likely to focus more o product development (to incorporate dvanced

features in their designs) and advertisements (to set up their own positions in a

consumer mind).

HMIL is emerging as a major player in Indian passenger car market. Its products are

Santro and Accent are success stories in themselves. But the buck does not stop here

only. Its parent company HMC is focusing upon HMIL as a base to integrate its

production and R & D facilities across Asia Pacific. For that HMIL is planning to

increase its present production capacity of 2.5 lakh cars per year to 4 lakh cars per

year by 2007.

Exports are also another front which is giving HMIL an intense opportunity to

expand. For the first six months of this fiscal HMIL has exported cars worth Rs. 1,325

crores and targeting an overall export of over Rs. 2,700 crores in this fiscal up from

Rs. 1,700 crores in 2006-07.

HMIL has sold a total of 236,878 vehicles in the Calendar Year 2007 so far, achieving

a growth of 21% over the January-November sales in 2007. While domestic sales in

January-November, 2007, were 148,515 - a growth of 16.6% over the previous year,

overseas sales during the period stood at 88,363 units - a growth of 29%.

In November, 2007, HMI sold a total of 21,725 units - 14,010 vehicles in the

domestic market and 7,715 cars in the overseas market.

Over the years, HMIL has been focusing on effective brand building and consumer

strategy. This has contributed towards enhancing their bottom line. A significant

contribution in this success is of the advertisement strategy adopted by HMIL. It has

changed its advertisements time and again. Now HMIL has started a new initiative

under which they have started their own in house advertising agency known by the

name of Innocean which will handle its all promotions.

With the new initiatives, HMIL is all set to achieve its ambitious growth of 30% in

sales over last year. Thus, Hyundai motors India limited is all set to conquer the

Indian passenger car industry.

AWARDS & RECOGNITIONS

As one of the fastest growing automobile compaies in India, Hyundai has many

accomplishments to its credit.

Business Standard - “Star Company” Award to Hyundai Motor India

JD Power Asia Pacific

Hyundai Santro has topped the JD Power Asia Pacific Initial Quality Study

(IQS) that measures product quality for three years in a row (Years 2007,

2006 and 2007)

Hyundai Santro has topped the JD Power Asia Pacific APEAL study that

measures customer satisfaction for three years in a row (Years 2006, 2007 and

2008)

Hyundai Accent has topped the JD Power Asia Pacific IQS for 2007 and the

APEAL study for 2006 and 2007.

Business Standard Motoring

Hyundai Getz is BS Motoring's 'Car of the Year' 2007

BS Motoring – BS 1000 – Company of the year 2007– Hyundai Motor India

Limited

Hyundai Santro is BS Motoring's 'Car of the Year' for 1999

CNBC

Hyundai Getz is the CNBC Autocar Car of the Year 2007 

Hyundai Elantra – Best Value for Money Car of the Year 2007

Company – Awards – CNBC Autocar India – Hyundai has been the

manufacturer of the year for two years in row.

ICICI Bank

Hyundai Motor India was adjudged the ‘Car Maker of the year’ at the ICICI

Bank – Overdrive awards 2006

HMIL has also been awarded the benchmark ISO 14001 certification for its

sustainable environment management practices.

PRODUCT HYUNDAI SANTRO

The Santro was launched on September 23rd 1998 in the Indian market and the

company sold around 17000 units in first five months. The ‘Tall Boy’ concept was

well taken by the Indian Customer. Since its inception Santro’s sales has been

achieving an annual growth rate of about 20% on an average. An advertising

campaign starring Shah Rukh Khan and Preity Zinta was unleashed to further boost

the sales and this has certainly proven to be effective. As a result of which Santro has

now become a market leader in its own Segment (B-Segment) leaving earlier market

leader Maruti Zen and Tata Indica. Repositioned from being a family car to an

individual’s first car, within a short span of time the Santro has been able to capture

the hearts and minds of the consumers.

The following table gives the ex-showroom prices of all the variants of

Santro:Models

Santro XK Non AC (Solid)

Santro XK Non AC (Metallic)

Santro XK AC (Solid)

Santro XK AC (Metallic)

Santro XL (Solid)

Santro XL (Metallic)

Santro XO (Solid)

Santro XO (Metallic)

Santro Xing AT (Solid)

Santro Xing AT (Metallic)

RESEARCH METHODOLOGY

As the purpose of study is analyze the marketing strategies of Hyundai motor India

ltd. with focus to Hyundai santro.

Data CollectionData collection is the process through data is collected, it is basically done through 2

main sources i.e. primary source and secondary source. From these sources data s

compiled i.e. primary data and secondary data. In this project both primary data and

secondary data are used.

Primary Data

Primary data is the data which is collected through surveys and questionnaires.

Secondary Data

Secondary data is the data which is collected through internet, magazines,

newspapers, journals, broachers, television etc.

Sample SizeIn this project questionnaire was prepared and multiple choices and the pattern of

questions was given to 50 respondents. With every question, multiple choices were

given.

Type of approach: The type of approach followed is descriptive approach. In

descriptive approach cross sectional design is used. Cross sectional design is used

because it is concerned with a sample of population of interest.

MARKETING STRATEGY

Strategy and timing are the Himalayas of marketing. Everything else is the Catskills.

- Al Ries

HMIL has been successful in capturing the car market because of the excellent

product it has produced. The market research conducted by Hyundai showed that

Indian cars were overcrowded, with turbans and sarees to be accommodated. The idea

was to create a voluminous compact car. The “tall boy’ model was taken from the

Atoz and it was redesigned to meet Indian conditions. Thus, the Santro was born. The

Santro is available in a number of versions and has a number of new built-in

mechanisms---power windows, power steering, central locking, side impact beams,

frontal crumple zone, child safety locks, seat belts, multi-point fuel injection systems

and CFC-free air-conditioners. The Santro is available in nine new colours. The car

also gives high mileage. The engine delivers adequate torque i.e. the ability to pull

loads even at very low speeds---this proves to be very essential for slow and traffic-

heavy Indian conditions. The most important is the seating, which is, high and gives

“road command”.

Hyundai was competing with Maruti in the small car segment and it offered

technology that other car makers thought was too advanced for the slow growing

Indian market. Hyundai has now built up a reputation such that it is the first

preference of anybody who has driven or ridden in it.

The marketing strategy employed by Hyundai for the Santro can be studied with

insights into their STP analysis and Marketing Mix.

PEST ANALYSIS

In order to understand the conditions under which the Santro was launched in the

Indian market, it’s necessary to analyze the factors that influenced its effectiveness.

Political Conditions

Hyundai entered India when liberalization was at its peak. As a result,

everyone was very open to the idea of foreign companies setting up base in

India.

The government insisted on the Companies using 70% local content in the

manufacture of the cars as they would have generated tremendous revenue for

India. Hyundai achieved this in a very short time.

Change in government policies in recent times like opening of FDI in various

segments has given a thrust to Hyundai initiatives in India like opening of its

R & D centre in Chennai.

A positive EXIM policy also has helped HMIL to boost its topline with

Exports of Santro to other countries.

Economic Conditions

The economic conditions during the launch of Hyundai were very relaxed and

liberal. Hyundai was launched when the country had just opened its doors to

liberalization. So there were no strict norms or bylaws that the company had to

adhere by.

The resources available in India were utilized by the multinationals, which

generated considerable revenue for the government.

A booming banking sector and a phenomenonal growth in Auto Loans market

has made Santro more affordable.

Social Conditions

A rise in Middle class and concept of small nuclear families has propelled a

demand of B-Segment cars. Hyundai Santro provides an exact choice for this

demand leading to its high growth.

An average Indian was bored with the same Maruti 800 as his first car and

Santro’s positioning as one’s first car has led to Hyundai’s success.

TECHNOLOGICAL CONDITIONS

Hyundai is a fairly new company in India. As a result when it started out in

India it started out with the best of machinery. So, the quality of products was

several times better than what was available at that time. This resulted in the

acceptance of Hyundai as a technologically superior company in the minds of

the people.

Since Hyundai manufacturers everything from the smallest of screws to the

biggest of machines in its factory it is able to maintain the efficiency of the

machines. Hyundai therefore manufactures cars under best of conditions with

the best of machinery. As a result, the cars manufactured are of top quality.

STP – SEGMENTATION, TARGETING, POSITIONING

Marketing is not an event, but a process . . . It has a beginning, a middle, but never an

end, for it is a process. You improve it, perfect it, change it, even pause it. But you

never stop it completely.

- Jay Conrad Levinson

Segmentation

Segmentation is based upon considerable evidence that a single marketing approach

or formula will not work for all members of the community to be served.

GeographicThe region of interest of HMIL for Santro is whole India with special focus on Type

A and fast growing Type B cities across India.

Demographic

Age – Anybody of age between 20 – 40 yrs.

Income – Anybody with an income of over 4 lakh p.a.

Occupation – Millennials employed as professionals, managers and those want to buy

their first car.

Social Class – Middle class, Upper middle, Lower Upper and Upper uppers.

PsychographicPersonality – Dreamers, those who want to achieve big, ambitious, price conscious,

took their first step towards success and value driven.

BehavioralBenefits – Quality, Style, Price (economical)

User status – Potential users and first time users

Buyer – Readiness Stage – Those who are aware, informed, interested and intend to

buy

Targeting

In evaluating the market segments Hyundai has looked at two factors - The segments

overall attractiveness and the companies resources. As is very clearly seen Hyundai

has opted for a selective specialization kind of targeting. Hyundai has selected a

number of segments each objectively attractive and appropriate. There is minimal

synergy among the segments but each is a cash cow. This multi segment strategy has

had the effect of diversifying the firm’s risk.

Having Shah Rukh Khan to endorse the Santro paid off for Hyundai. Shah Rukh as a

brand ambassador targets two sections of the society. Firstly, his glamorous and

sophisticated image appealed to the elite effecting their purchase decisions. Secondly,

his adorable persona appealed to the middle class buyers who wanted a good car for

the ‘big’ investment they were making and for people who were graduating from the

Maruti and the second hand car.

Hyundai Santro was first launched in September 1998. At that time the cars which

were prevailing in B-Segment was lead by Maruti Zen. With a price tag of only Rs.

2.99 lakh Santro was targeted as the best available alternative for Zen and was

described as “The complete Family Car”.

The low price tag of Santro initiated a price war among all companies and forced Tata

Indica to pre-pone its launch. The initial low price tag and strengthened by a solid

marketing initiatives in form of print advertisements provided a solid foundation for

Santro in India which showed in its sales of 17000 units in just 5 months. With that

started a journey of Santro whose sales grew at an average of 30% every year to

emerge as the No. 2 car in B- Segment giving the established leader Zen sleepless

nights.

Hyundai has identified its target market based on its pricing strategy. Santro aims to

be the price leader in B-Segment cars. It has always priced its base model lower than

Zen or Indica giving all the features which they give in their higher models. With a

constant change in its positioning strategy, Hyundai Santro has succeeded in

identifying its target market every time and emerging as the fastest selling car in its

own segment. With the invent of Santro Xing, Hyundai is looking towards entire new

segment of consumers and all set to target it to emerge as the market leader in B-

Segment cars.

POSITIONINGSince its inception, Santro has undergone a lot of changes in terms of its positioning.

First it was Santro, then Santro Zip drive, then came Santro Zip Plus and finally

Santro Xing as the latest model.

When Santro was initially launched it was positioned as “The Complete Family Car”.

Since Santro was launched in B-Segment, it had Maruti Zen and Tata Indica as its

biggest competitors in that segment. The stylish ‘Tall Boy’ Design of Santro together

with its slogan helped it to position itself as one of the cars to look upon.

With a constant change in its positioning, Hyundai always tried to keep alive the buzz

associated with Santro. The Zip drive and Zip plus positioning of Santro helped to

portray its position as the car which changes with time and giving its owners

something extra.

With the invent of Santro Xing in 2007, which came with some design changes too,

Hyundai repositioned Santro as “Sunshine Car (smart car for young people)” from

earlier “complete family car”. This was done because the competitors were coming

out with similar products and then Hyundai started what they call as ‘Emotional

Positioning’. This repositioning of Santro also helped it to target the segment of first

time car buyers. Even the print ads at this time were designed in a way to project

Santro as the first car for the fastest growing consumer segment of India at that time,

The Young Professionals, of the service industry that combined with various loan

facilities were too eager to buy their first car. This led to a phenomenonal growth in

its sales and further strengthening its position as a brand in consumer mind. Thus the

repositioning of Santro gave it an edge over its competitors and also to emerge as a

tough rival to Maruti 800 as ‘The First Car’.

6.3 PORTERS FIVE FORCES MODEL

Barriers to EntryHigh capital investment requiredStrong distribution network of existing playersStrong Brands existingEconomies of Scale

Threat of SubstitutesSwitching Cost to substitute is very lowPrice – performance Trade off of substitutesBrand loyalty does not exist

Bargaining power of SuppliersNo substitute for critical InputsSwitching cost from one supplier to other is highSupplier integrating forward for higher prices and margins

Bargaining power of BuyersAvailability of many brandsPrice sensitivityBuyer InformationProduct differentiation

Rivalry among existing firmsExit barrierIndustry GrowthIndustry ConcentrationDiversity of rivalsPrice competitionProduct differences

SWOT ANALYSIS

Strengths

Brand NameLarge Distribution NetworkWide product offering at different price pointsCheapest Cars in corresponding segmentsEncouraging exportsAwarded many awardsEconomy with technology

Weakness

Lack of in house R & DNew model introduction limited to only cosmetic changesDominance mainly at lower level only (Santro)

Opportunity

Rise of Indian middle class and small citiesA booming economyRising exports

Threats

Many players fighting for the same cakeEntry of new playersCannibalism

Strengths

1. Brand Name: ‘Santro’ has emerged as a strong brand name in recent times.

Backed with the parent company Hyundai this is recognized as a strong player in

worldwide automotive market, Santro has definitely a value associated with it any

individual will like associatd with.

2. Large Distribution Network: With a strong dealer network of around 300 dealers

al around the country, Hyundai has made its presence felt in each and every corner

of India.

3. Wide Product offerings at different price points: Hyundai has launched various

models in various segments and hence has a very good product mix of offerings as

different price points. Starting from Rs. 2,78,999/- for Xing XK Non AC to Rs.

4,28,298/- for Xing AT (M).

4. Cheapest cars in respective segments: Hyundai has always followed an aggressive

pricing policy. As a result it has its cars priced at lowest possible rates in

respective segments.

5. Encouraging Exports: Backed by a strong production and a global setup at

Chennai plant, Hyundai is exporting a lot. An export of worth Rs. 1,325 crores has

been achieved in last six months.

6. Awarded Many Awards: Hyundai has been awarded with many awards and

recognitions like “The Star Company” amongst unlisted companies by Business

Standard this year. Its various models like Getz and Elantra too has achieved

many awards, thereby increasing the brand vale of the company.

7. Economy with technology: Hyundai’s cars have always seen as a company

producing cars blending economy with technology. Santro’s initiative of putting a

16-bit microprocessor on board has proved as one of the major reasons for its

success and that too for the lowest price in its segment.

Weaknesses

1. Lack of in house R & D: HMIL do not have a comprehensive R & D department

in India and all the major design changes are sent by its parent company HMC.

2. New model introduction to only cosmetic changes: There is no major design

changes incorporated in Santro since its inception. Only some cosmetic changes

have been made.

3. Dominance mainly at lower level: HMIL dominance in Indian market is only at its

lower level segments like Santro in B-Segment and Accent n C-Segment. It has to

focus on its upper segment models to strengthen its position in Indian car industry.

Opportunities

1. Rise of Indian middle class and small cities: As a phenomenonal growth is

seen in recent times in Indian middle class and the purchasing power of

working class individuals. Also a rise in small cities across the country has

given a great opportunity to Hyundai for achieving a higher growth rate in

coming times.

2. A Booming Economy: Indian economy is growing at a rate of on an average

of 7% every year thereby giving an opportunity of larger sales in each and

every segment.

3. Rising exports: With a export of Rs. 1,325 crores in last six months, HMIL has

a great opportunity of achieving a export target of Rs. 2,700 crores in this

fiscal year.

Threats

1. Many players fighting for the same cake: There a many major players in the

B-Segment and since the size of market is not expanding rapidly, HMIL has a

major threat in form of tough competition.

2. Entry of new players: with coming of Fial Palio and other players planning to

come out with much more models in B-Segment, the competition is just

getting hotter.

3. Cannibalism: to some extent the Getz is affecting Santro because of its price.

Thus HMIL has to focus more on its positioning strategy of Getz and Santro.

P’s of Hyundai Motor India Ltd. With focus to

Hyundai Santro

First ‘P’ - The Product

A New Shining Dawn

Here Comes the Sun Again

Ever since its launch in 1998 the Santro has proved to be the best compact car in

India, thanks to its excellent design and extensive testing for over 100,000 kilometers

in real Indian road and climate conditions. It is clever design that gives cars this touch

of practical beauty. Hyundai has come up with a vehicle that surprises with its ability

to utilize space extraordinarily well. The Hyundai Santro is probably the first of the

`big-small' cars that hit Indian roads. Set between the B and C segments in terms of

size and price, the Santro attempts to offer trim quality, interior space and build

quality on a par with the pricey sedans. First it was Santro. Then it got renamed as

Santro Zip Drive. After a while, Santro Zip Drive got replaced by Santro Zip Plus.

And then came its new ‘global' car, Santro Xing. Yes, Santro Xing is the new avatar

of the Santro Zip Plus. However, this time it is not just a change in the name; the new

avatar also looks different from its predecessor. The Santro Xing comes in five

versions, including automatic transmission, and has a new sporty exterior with safety

features which meet European standards. The Santro Xing is available in nine colours

viz., Ebony Black, Noble White, Satin Grey, Fairy Leaf, Forest Dew, Husky Blue,

Mystic Lavender, Passion Red and Bright Silver. The colours present a varied choice

to consumers in picking a car that most closely defines their personality. Consumers

can have a feel of the color right from their homes by logging on to the website of

Santro Xing. Santro Xing comes with all new looking feel exterior and interior

styling. That, coupled with new advanced features, offers the best comfort & luxury in

the favourite compact car. New bigger & brighter clear headlamps, smiling radiator

grille, power operated rear windows with child lock and lots of other smart features

like the seat under tray are the hallmarks of your Sunshine Car. Santro is being

produced exclusively in India and the Indian Xing will now drives the World. The

idea was to create a constant hype around Santro to give it that competitive edge and

make it the truly “sunshine car”.

CHIC AND CLEAN

Hyundai calls the Santro a Euro-styled, premium hatchback. If simple straight lines

and a practical, consistent design theme are indicative of pronounced European-

styling, then the Santro belongs to that class. European or not, the Santro is a good-

looking car that is also upfront about its focus on practicality, with marginal excesses

in design, a trait that could not be associated with Hyundai's first car for the Indian

market — the Santro.

It’s exterior styling gives it a sort of dual personality. The large format, clear lens-type

headlamp cluster dominate the car's frontal view. The short, sloping bonnet and the

single-slat grille seem to visually add some more measure to the Santro’s already

class-leading width. These features as well as the broad front bumper and the sharply

raked windscreen make it look very sedan-like, when viewed from the front. The

muscular shoulder flanks and the prominent, flaring wheel arches give ita well-

planted, aggressive profile.

However, viewed from the back, it seems to acquire a new, squat and wider

appearance. The short-hatch door, the raised position of the thickset bumper and the

relatively smaller combination lamps make the Santro’s rear seem more compact. The

wrap-around style tail-lamps are positioned mid-way, instead of lower and closer to

the bumpers as in older hatches or high up on the C-pillar as in the case of the newer

small cars such as the Tata Indica and the Suzuki Wagon-R. The overall design of the

tail-lamps and the circular reverse indicator integrated into it may remind the casual

observer of the Daewoo Matiz. The rear spoiler with the integrated high-mounted stop

lamp and the chunky, profiled external rear-view mirrors add a touch of exclusivity to

the Santro. While visibility at the front is ample for the driver, thanks to the

panoramic windscreen and the large windowsfor the front doors, the thick, wrap

around body panels on the C-pillar limits thedriver's rear visibility, especially while

backing the car into a cramped parking slot.

SIMPLE INTERIORS

The interiors of the Santro wear a fresh and simple look. The finish quality is good

and dimensional accuracy of dashboard and door panels rival those of a few C-

segment cars. The soft feel plastic used for the dashboard panels adds a touch of class,

but the dimpled finish may be a bit difficult to clean and maintain in Indian

conditions.

There are ample storage options, including the deep glove box, the removable ashtray

cup, bottle and cup holders at the front and rear, seat side pockets, coin storage on the

door handles, bag hook at the rear of the front passenger seat and the 60:40 split,

folding rear seats that go on to more than treble the boot storage space. The

instrument cluster is housed in a simple semicircular dashboard panel and features

two rounds, chrome-lipped gauges for the rpm meter and speedometer. The cluster

also features a digital clock and trip meter. Power and tilt-adjustable steering is

standard. The centre console features a brushed aluminum slap-on panel and houses

rotary type controls of the HVAC (air-conditioning) system and positive type controls

for the rear defogger, hazard lights and fog lamps. The dual adjusting air-conditioner

louvers look sophisticated and add to the Santro’s up market image. The dashboard

extends more than a foot into the cabin. While this gives the driver even more open

storage space on the flat faced top, at the bottom, after the dashboard tapers off, the

driver and co-passenger get loads of recessed leg space.

ENGINE & TRANSMISSION

The Santro had been brought in with Hyundai's new 1,341cc, in-line, four-cylinder,

SOHC engine that develops a maximum power of 82.9PS at 5,500 rpm and a peak

torque of 11.8 kgm at 3,200 rpm. With the peak torque kicking at a low 3,200 rpm,

you will not have to rev the engine up to a grunt to get the best out of it. However, as

the Santro's engine is mapped for economy, there is a mild lag before the torque kicks

in the first three gears. The other side of this slightly slow, but steady rise in torque is

that this powerful 1.3-litre engine is surprisingly tolerant of lower speeds in every

gear slot. As a result, knocking is minimal obviating frequent shifts to a lower gear.

So, while the Santro delivers a lively performance in city traffic, the lull before peak

torque kicks in may be only a tad bothersome on the highway. But once you are past

3,000 rpm, it zips.

The five-speed manual transmission that the Santro comes with is one of the

smoothest in its class. The short throw, short-talked gearshift stick is a delight to use.

The suspension set-up features McPherson-type struts in the front and coupled torsion

beam axle and gas-filled shock absorbers at the rear. This configuration, coupled with

the rigid chassis, gives the car excellent handling dynamics.

VALUE FOR MONEY

The Santro is the first of the large sub-compacts that made their way into the Indian

market. This cusp segment is likely to find more buyers as the market matures and as

the expectations of customers in the small-car segment increase. For Indian car buyers

looking for a good value for money proposition in the high-end B-segment category,

the Santro with its new and exciting variations is an attractive choice.

With a fuel economy of about 10 kmpl in city and about 15 kmpl on highway, it

attempts to keep running costs relatively low.

KEY TECHNICAL SPECIFICATIONS AND FEATURES

Santro Xing

Dimension and Weight Overall Length (mm) 3565

Overall Width (mm) 1525

Overall Height (mm) 1590

Wheelbase (mm) 2380

Min. Turning Radius 4.4 m

Engine Number of cylinders 4

Number of valves 12

Engine Displacement(cc) 1086

Performance Maximum Output

(ps@rpm)

63@5500

Maximum Torque

(kgm@rpm)

9.1 / 4000

Tyres Size 155/70 R 13 Radial

THE SECOND ‘P’ – THE PRICE

Using money as a magnet to attract customers kills loyalty, mangles margins and

encourages defections. But Unique Selling Price is undoubtedly one of the roads to

success in the intensely competitive automobile business. Ceteris Paribus, the

purchase decision of the first-time buyer is influenced by four factors---Price, Price,

Price and Price. The first is the price of acquisition. The second is the price of finance

or the rate of interest on the loan. The third is the price of maintenance, which

includes the cost of fuel, service and spare parts. And the fourth is the price of

disposal or the resale value of the car.

High indigenization stood Hyundai in good stead when it came to its entry pricing.

Hyundai surprised its competitors with a under Rs.3 lakh (ex-factory) price, slightly

below the Maruti Zen (Rs.3.2 lakh). Competitors and analysts criticized Hyundai for

predatory pricing, but Hyundai maintained that the low price is a result of high

indigenization level and effective ancillarisation. This gave Hyundai a strong foot-

hold as its production costs were lower. Hyundai ensured cost competitiveness

through tie-up between Lumax (well known supplier of lighting systems) with

Hyundai’s Korean vendor Samlip, to form Lumax-Samlip Industries. This was

because they were operating on much better overhead absorption, being suppliers to

other manufacturers in India. Also, they already had a grasp of technology because

they had partnerships with Japanese, European or American companies.

Hyundai offers a comprehensive range of finance packages to suit all budgets,

including Hyundai Finance which as an affiliated finance company offers complete

financing packages tailored to individual requirements. Hyundai also has tie ups with

banks like ICICI, Bank of America, KPML etc to offer loans to buyers.

The following table gives the ex-showroom prices of all the variants of

Santro:

Models Ex-Showroom Price (in Rs.)

Santro XK Non AC (Solid) 2,78,999

Santro XK Non AC (Metallic) 2,82,973

Santro XK AC (Solid) 3,32,999

Santro XK AC (Metallic) 3,36,972

Santro XL (Solid) 3,55,999

Santro XL (Metallic) 3,59,972

Santro XO (Solid) 3,81,999

Santro XO (Metallic) 3,85,975

Santro Xing AT (Solid) 4,24,324

Santro Xing AT (Metallic) 4,24,298

70% of the cost of a car over its lifetime goes in maintenance. Accordingly, in

Hyundai, pre-delivery inspection takes place at three stages---one, after the car rolls

off the assembly line, the next when it is loaded into the auto compound and finally, at

the dealer’s premises before it is handed over to the customers. This increases the

time between services for Santro. For instance, Maruti recommends services after

every 5,000 kilometers; whereas Hyundai recommends it after every 10,000

kilometers. Similarly, the engine oil, filter assembly for the Santro is priced lower

than that for the Maruti Zen. This low-cost proposition for spares offers an added

advantage when a buyer compares running costs.

Hyundai realized the difficulty to compete in the car markets and decided to go for a

sharp differentiation strategy. In order to avoid the price game, it decided to reinforce

the individualistic positioning of the brand and tried to match the customer’s

perception that the car is a commodity using other differentiators. Hyundai opted

against the drop in prices, one reason being the fact that, buyers are shopping for

brand associations and customers are unlikely to let their decisions be swayed by

savings of a few thousands.

THE THIRD ‘P’ – THE PLACE

Hyundai has spent time studying dealer networks. It found that dealers were

inconveniently located, their behavior towards customers left much to be desired, and

there was a lack of transparency in dealer operations. So the Hyundai outlook towards

dealership is compact dealership instead of a mammoth network. The emphasis is on a

dealer-customer relationship where each customer is given time. The company insists

on a one-to-one relationship to build a long lasting association. To this end, the

company insists on ownership and operation of dealerships resting on one person,

thus reducing absenteeism and promoting immediate decisions.

HMIL has established a start-up network of 70 dealer workshops (now close to 150),

equipped with the latest technology machines and international quality press, body

and paint shops, across the country. These dealer workshops include company owned

outlets called ‘Hyundai Motor Plaza’, that provide a Hyundai customer a one-stop

shop for meeting all needs.

In place of large showrooms and workshops, Hyundai decided that the workshop

should be ideally 10,000 sq.feet, which could be worked in three shifts and the

showrooms it preferred were 1,600-1,800 sq.feet. Dealers who already had land

would have to invest Rs.1.5 crores for the rest. With this infrastructure dealers can

handle 200-250 cars a month, which gives them adequate time to establish rapport

with customers.

The company has also cut expenses of its dealers by keeping inventories low.

Hyundai’s dealers are given limited stock. This does not mean that Santro’s spares

come late. On the contrary, the car’s parts are available within 24 hours.

The dealer network is established with the objectives of providing the customer the

very best through a 24 hour hotline system, round the clock workshop services,

roadside services with tow away facilities, round the clock helpline services, etc.

HYUNDAI DEALER NETWORK IN INDIA

So the kind of marketing channel that Hyundai follows for its cars is simple one level

Marketing channel.

Manufacturer Retailer Consumer

THE FOURTH ‘P’ – THE PROMOTION

If you're trying to persuade people to do something, or buy something, it seems to me

you should use their language, the language in which they think. - David Ogilvy

Strapped with the tagline ‘Smarter people drive Santro’ Hyundai Santro hit the Indian

roads nearly a decade back. Hyundai Santro being a much admired lifestyle brand was

launched in nine colors with a colorful and jazzy advertising campaign developed by

its advertising agency Saatchi and Saatchi. Hyundai set aside as high as Rs 5 crore for

advertising and promotions each month. Effective advertising can add immense value

to brands, even in the small car segment, where the typical customer is far more

informed and aware of the product behind the brand.

Hyundai Motor India Ltd (HMIL) realized Indian consumers' penchant for unique

designs soon after their entry into India. With the run away success of the Santro,

HMIL was right with its promotion strategy and came up with a winning campaign.

Hyundai Santro has come a long way from its original Santro version to Santro zip

drive moving on to Santro zip plus and now to the newer and refreshed Santro

Xing, employing a different tag-line and promotional approach each time.

The first version of Santro was launched with much vigour as India’s very first “big

small car” and India’s very own “family car”. Being the first of its kind in the small

car segment Hyundai positioned itself well in the eyes of the consumer encouraging

them to buy the car. The earlier platform of Zip Drive suggested Santro's USP of

power steering. "The Zip Drive positioning was successful at a time when air

conditioners were seen as brand differentiators," Hyundai hoped that in a market

where power steering accounts for over three-fourth of B segment sales (Santro was

one of the early power steering campaigners), and air conditioning had more or less

become an integral part of car purchases, the focus on Zip Plus with a new brand

positioning of ‘More Power, More Fun' will be a critical differentiator. Hyundai

contended that the Zip Plus positioning aimed at suggesting that something critical

had been added to the brand's current avatar. Hyundai was very generous in

promoting its new Xing model, promoting it as the “sunshine car” and roping in

Bollywood actress as the brand ambassador. Intense competition in the B-category

from Fiat Palio, the Maruti trio of Zen, WagonR and Alto, and Tata Indica forced

Hyundai to keep the excitement about santro alive encouraging the fresh new

positioning and attitude with Santro Xing, promoting it as a “new age car” targeted at

stylish individuals.

GROUND PROMOTIONS

To promote its new offering, Hyundai chalked out a strategy which included press

ads, television campaign, outdoor media and internet advertising. In addition, the

company is in the process of rolling out a slew of marketing initiatives to promote its

launch. In a bid to reach out to a wider target audience, Hyundai has recently

extended its dealership to 133 across the country. To support its mass media

advertising, the company is now focusing on ground promotions. It sponsored many

shows and musical events like the MTV Style Awards in order to increase visibility.

MTV Santro Xing Kitni Mast Hai Xing-dagi Contest

They are hosting dance competitions at discos and night clubs in major metros across

the country. As it’s a new age car, it has also launched a slew of internet ad

campaigns to promote the brand online.’ For this purpose, the company has tied up

with portals like Rediff and Yahoo! India Hyundai is giving its four-year old small car

Santro a new and fresh positioning, and has roped in young and vibrant Bollywood

actress Preity Zinta for promotions worth Rs 5 crore.

PRINT PROMOTION

Hyundai Santro was the top Car brand on Print in 2007 accounting for nearly 10% of

the advertising spends. Hyundai Motor India unveiled a hard-hitting print campaign to

announce the emergence of Santro as the country’s No. 1 Small Car. Ingredients of

the campaign are comparative ratings, which points to Santro’s certain superiority

over other B class rivals. Shah-Rukh Khan being the brand ambassador was mainly

featured in the print ad’s. Its said that Shah Rukh Khan ad has been the ad with the

highest recall value with as high as seven people out of ten being able to remember

him and connecting him with Santro. Over time as Santro excitement fizzed out

Hyundai roped in actress Preity Zinta with Shah-Rukh Khan giving birth to the

‘sunshine’ giving a bubbly and youthful feel to the entire campaign to revive some

amount of brand fatigue. While sticking to the ‘complete family car' positioning,

‘Sunshine' created new interest for the brand in the consumer's .Since the buyer is

young Santro was then promoted as a car that can change the life of a young person

mind .Since the buyer is young Santro was then promoted as a car that can change the

life of a young person.

Print Ads through the ages

Headline: "The other home my husband doesn't mind me living in!"

Bodycopy: That's what you too would say about the Santro zip Drive! A feather

touches power steering for home-comfort rides (even bindis won't feel out of place)!

No fatigue, no stress. Because you don't need muscles to zip! And you'll feel safer

because it's so responsive. Add to it 'tall-boy' leg room, tasteful upholstery, divan-like

seats and snug headrests. No wonder, your husband won't mind you relaxing in

this mobile home of yours!Baseline: Don't drive. Just zip!

Headline: Presenting the New Look SANTRO ZIPDRIVE.

Bodycopy: New clear lens headlamps

new rear combination lamps

new clear lens fog lamps

new chrome-plated front grille

new rear spoiler with LED stop lamp

new interiors

new colours

Baseline: India's favourite family car.

Headline: India's best-loved family car is now also India's simplest car to drive.

Subhead: Hyundai introduces Santro Zip Plus Automatic.

No shifting gears, no clutch, no problems.

Bodycopy: Hyundai brings back the sheer joy of driving by introducing Santro Zip

Plus Automatic with the Anti-lock Braking System (ABS). The only car in its

segment to use a state-of-the-art 4 speed, electronically controlled gearbox. While the

light-weight automatic transmission allows you to ease your way through city traffic,

the Anit-lock Braking System, a first for a car under 1500cc, stops you instantly

without any trace of a skid. So, go ahead and pick up a Santro Zip Plus Automatic.

And make driving the way it should be - Simple.

Baseline: The Sunshine Car

Headline: Heads I'll drive, tails you won't.

Bodycopy: With the new souped up 1.1 litre engine, the Santro ZipPlus is so full of

sunshine that you'll do anything to get your hands on the wheel.

Baseline: The simplest car to drive.

Headline: I drive, you drive, I drive, you drive, I drive, you drive, I drive, you

drive.Bodycopy: With the new souped up 1.1 litre engine, the Santro ZipPlus is so full

of sunshine that you'll do anything to get your hands on the wheel.

Baseline: The Sunshine Car

Headline: Ok fine, you drive first. I'll drive next.Bodycopy: With the new souped up 1.1 litre engine, the Santro Zip-Plus is so full of sunshine that

you'll do anything to get your hands on the wheel.

Baseline: The Sunshine Car

Bodycopy: Hidden inside the woman is a little girl. Your little girl. You've watched

her grow from pigtails, to jeans, to sarees. She's made the last twenty one years seem

like twenty one weeks.

And now, another man is laying claim to her attention. You don't know whether

you're happy or jealous.

This is the time to reinforce your position as the best man in her life. Give her

something she'll treasure.

Baseline: The simplest car to drive.

Bodycopy: Your wife.there's something special about her.

In the way she looks at you. In the way she smiles

In the way she squeezes your hand when you're feeling low. In the way she makes

your house feel like home.

There's something special in the way she says her father is the best man in her life,

with a twinkle that tells you he's not the only one.

There's something special in the way she just fits into your life.

You know she's special. Gift her something that'll make her feel so.

Santro Xing Promotions: Repositioning of Santro

Santro Automatic

The Five Seater Santro: A Consumer Awareness campaign

CELEBRITY ENDORSEMENTS

Hyundai Santro has greatly benefited from its TV ad campaigns. Thanks to their

brand ambassador Shah-Rukh Khan Santro ad’s have the distinction of having the

highest recall value. With Preity Zinta adding more “Xing” to the campaign the run-

away success speaks for itself. More than the ad’s it is the positioning strategy of the

Santro that needs to be complemented. They have positioned the car as the

consumer’s first choice while buying a car for the first time in his life as al the first

things in his life are special. The initial ad aired featured Shah-Rukh with a certain

Mr.Kim, who also became an instant hit with the masses. Of interest is the fact that by

the time (Shah Rukh) Khan came around and ‘agreed' to an endorsement contract, Mr

Kim had told Indian consumers a few things about Hyundai (the company) and the

Santro (the car). It might even be argued that it was the fictitious Mr Kim - and not

brand ambassador Shah Rukh Khan - who first appealed to the left-brain of Indian

consumers by selling brand Hyundai, which went some way in later establishing the

Santro as a standard in the ‘B' segment of the Indian passenger car market. That, of

course, was five years ago. Since then, Shah Rukh has been regularly endorsing the

Santro and its many variants, while Mr Kim dignifiedly withdrew into anonymity, his

job done.

Well, after a five-year interregnum, gentleman Kim is back in the Santro's

communication - though, at first glance, he doesn't come across as being particularly

gentlemanly any longer. Quite the opposite, he is rather curt - even boorish - in the

way he stops the cheerful Shah Rukh (driving a Santro) in the middle of nowhere and

tells him to hand over the car's keys, explaining that his contract for the Santro Zip

Plus is ‘over'. He virtually dumps Shah Rukh by driving away with the car, leaving

the nonplussed endorser stranded on the highway. (Incidentally, this ‘teaser' interlude

is part one of a two-part communication.) If Mr Kim's behaviour is at odds with his

earlier warm, gracious persona, everything is soon explained - in the second part of

the communication. As Shah Rukh walks down the lonely road, a car draws up to

him. And out steps Mr Kim. An understandably angry Shah Rukh demands an

explanation, and Mr Kim readily offers one: the new Santro Xing, from which he has

just exited. ‘Your contract for Santro Xing begins now,' he smiles genially at Shah

Rukh, handing him the keys of the new car. This was a smart move on Hyundai’s part

as the consumer could easily relate to the new and improved version of “Santro Xing”

the earlier Santro zip plus. It was during this time that Hyundai promoted it as the

“sunshine car” and came out with the print and TV campaign featuring Preity Zinta.

This promotional campaign was successful in imparting a youthful and bubbly feel to

the brand. She is the ‘physical embodiment' of the ‘sunshine' that Santro supposedly

brings to the lives of its customers. To keep the excitement alive, they have aired the

ad’s with a storyline which has been broken up into four parts.

The first ad was the teaser that introduced the concept of ‘sunshine’ (without actually

showing Preity Zinta). In the second part, we get a glimpse of Preity Zinta. It is only

in the third part that the love between Shah Rukh Khan and Preity Zinta blossoms.

The final ad in the series would delve into ‘the chemistry' between the two.It is

therefore, rightfully said that Hyundai has been very smart in perceiving the

consumers interest and thus coming out with a campaign which is both visually

pleasing and is successful in putting it’s point across.

SANTRO’S EMOTIONAL BONDING

Hyundai Santro also started a series of TV advertisements depicting the emotional

bonding between the Santro and its owners. One of the storyboards of such

Advertisement goes on like this.

Driving his car a guy sees a girl and falls for her. Super: First love. But is disappointed when he sees flowers in her hand for somebody else.

Next, a couple fight playfully on their bed. Super: First fight. Cut to a father trying to change nappy of his baby. Super: First born.

VO: The first things in life are always special. Make Santro your first car...

... Because your family deserves the best. Super: Hyundai. Drive your way.

HYUNDAI ROAD SHOW "WORLD OF WHEELS"Hyundai has by hosting and participating in auto car shows believes in increasing it’s

visibility all across. Hyundai Motor India's second road show, the "World of Wheels"

(WOW), began its four-month long journey across the country on December 2, 2006,

with a grand display of nine cars from the Hyundai stable.

The "World of Wheels" will drive into 34 non-metro cities, beginning with Ludhiana

in Punjab and then move to other cities in the Northern region. In each of the cities,

covering all the four regions, the road show would be a three-day event, with a special

press preview on the inaugural day. All the seven Hyundai brands currently sold in

India will be on display at the exhibitions. As a special attraction, Hyundai has

shipped from Korea two premium Hyundai cars which are yet to be launched in India

- the super-luxury sedan Azera and the sports coupe Tuscani. This is for the first time

that the two cars would be displayed all over India.

The World of Wheels will not only showcase the sophistication of Hyundai's

technological advancement and design capabilities, but also give the people an

opportunity to book their vehicles at the venues. The road show in each city promises

to be an exciting affair with special offers and a "WOW package" of goodies for

people who book their cars at the venue. The event will also have its share of fun and

entertainment - with game-shows, contests and exciting prizes.

The country wide road show is part of Hyundai Motor India's continuing effort to

connect with and reach out to the customer directly. The event will give our

customers in non-metro cities a first-hand experience of the entire range of Hyundai

cars in India and some which may enter India in the near future.

FINDINGS AND ANALYSIS

Ques1 Total income

Below 1 lakh 5

1 lakh – 1.5 lakhs 10

1.5 lakhs – 3 lakhs 22

Above 3 lakhs 13

10%

20%

44%

26%

Below 1 lakh 1 lakh – 1.5 lakhs 1.5 lakhs – 3 lakhs Above 3 lakhs

This doughnut graph represents the income level of the respondents. Under this

category as we can see that a lion share of respondents i.e. 44% belongs to middle

group that is with income between 1.5 lakhs to 3 lakhs.

Ques 2For how many years you are using Hyundai santro

1 year 5

2 year 15

3 year 20

More than 3 year 10

10%

30%

40%

20%

1 year 2 year 3 year more than 3 year

This pie graphs shows the experience of number of respondents who are using

Hyundai santro. As we can see that 40% respondents are using Hyundai santro from

last 3 years.

Ques 3Do you like Hyundai Santro?

Yes 42

No 8

1

No

Yes

0

10

20

30

40

50

No

Yes

This bar graphs represents responds of respondents about their likings for Hyundai santro.

And as we can see that 84% of respondents like Hyundai santro, which is a very good

sign of consumer satisfaction.

Ques 4What were the factors which influence you to buy Hyundai santro?

Brand name 13

Style 2

Fuel efficiency 15

Comfort 10

Performance 5

Any other 5

26%

4%

30%

20%

10%

10%

Brand name style Fuel efficiency

comfort Performance any other

This doughnut graphs represents the factors that influenced the respondents to buy

Hyundai santro. As we can see that 30 % of respondents buy their Hyundai santro for fuel

efficiency and 26% of respondents for brand name.

Ques 5Are you satisfied with your Hyundai santro?

Yes 38

No 12

1

no

Yes

0

10

20

30

40

no Yes

This bar graph represents the consumer satisfaction for Hyundai santro. As we see

that 76% of respondents are satisfied with their Hyundai santro.

Ques 6What you don’t like about Hyundai santro

After sales services 20Air conditioner 5Comfort 8Fuel efficiency 2Performance 9Any other 6

0

5

10

15

20

25

1

After sales services air conditioner Comfortfuel efficiency Performance any other

This bar graph represents disliking about their Hyundai santro. This shows that 40%

of respondents are not satisfied with after sales services.

Ques7What you like about Hyundai santro

After sales services 8

Air conditioner 12

Comfort 10

Fuel efficiency 15

Performance 5

Any other 0

02

468

1012

1416

1

After sales services Air conditioner ComfortFuel efficiency Performance Any other

This bar graph represents likings about their Hyundai santro. This shows that 30% of

respondents are satisfied with fuel efficiency of the car.

Ques 8Did advertisement influenced your Hyundai santro buying decision

Yes 39

No 11

1

No

Yes

0

10

20

30

40

No Yes

This bar graph represents the advertisement influence in the buying decision of

Hyundai santro. This shows that advertisements influenced 78% of respondents for

buying Hyundai santro.

Ques 9Hyundai santro to you

Just a car 5

More than a car 15

The sunshine car 10

The family car 20

10%

30%

20%

40%

Just a car more than a car

The sunshine car the family car

This doughnut graph represents the emotional bonding of the respondents with Hyundai

santro. This shows that for 40% of respondents, Hyundai santro is not just a car but a

Family Car.

Observations & Recognitions

Today, in India there are only 5 cars among 1000 people so there is a huge market

to exploit.

According to Recent Sales Satisfaction survey Hyundai lies at the second last

position.

Thus Hyundai should train their technical staff to deal with customer who is in the

workshop to get their cars serviced/repaired. No doubt it is hard to manage and

handle such a big network but the company has to handle it properly to satisfy its

customers. We should always remember that loyal and satisfied customer gives a

chain of new customers.

Hyundai should emphasis on after sales services.

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

Hyundai dealer network is still small as compared to segment it is targeting. So it

has to expand its dealer network to keep up with its rising sales.

The comprehensive promotional campaign of Hyundai should continue giving it

more brand visibility.

Hyundai should take this fact into consideration that the demand for passenger

cars in the long run will be robust due to rising income levels and also due to rise

in Indian middle class.

HMIL can also focus on exports as this is one area which is having the largest

share in its Top line growth.

CONCLUSION

This project was conducted on marketing strategies of Hyundai motor India ltd. with

focus on Hyundai santro. In this project questionnaire was prepared to know the

consumer satisfaction level of respondents and the conclusion is based on the same.

Few years ago, on September 23rd 1998 the company launched Hyundai santro in the

Indian market. The company was new in the market but still the company sold around

17000 units in first five months. The company has already created their market share till

now and can be distincted from other brands.

From findings and analysis we can conclude that the consumers are very much satisfied

from their Hyundai santro. For them Hyundai santro is not just a car but for them it’s a

family car, that is the company has already created their emotional bindings with their

consumers. As Hyundai santro is a middle segment car so its main focus is to give more

fuel efficiency, and according to respondents, the company has given them what they

want, that is most of the respondents are satisfied from fuel efficiency of the car. But the

company also lies behind in some fields like few respondents were not happy when after

a sales service is taken into account.

“Success will largely be determined to the extent a company can differentiate itself in

terms of intangibles that go with a car”. Thus, success could well hinge on the best of

bundle of services that a carmaker can provide.

QUESTIONNAIRE

Name ____________________________________

Address ____________________________________

Age ____________________________________

Occupation ____________________________________

Ques1

Total income

A) Below 1 lakh B) 1 lakh – 1.5 lakhs

C) 1.5 lakhs – 3 lakhs D) above 3 lakhs

Ques 2

For how many years you are using Hyundai santro

A) 1 year B) 2 year

C) 3 year D) more than 3 year

Ques 3

Do you like Hyundai Santro?

A) Yes B) no

Ques 4

What were the factors which influence you to buy Hyundai santro?

A) Brand name B) style

C) Fuel efficiency D) comfort

E) Performance F) any other

Ques 5

Are you satisfied with your Hyundai santro?

A) Yes B) no

Ques 6

What you don’t like about Hyundai santro

A) After sales services B) air conditioner

C) Comfort D) fuel efficiency

E) Performance F) any other

Ques7

What you like about Hyundai santro

A) After sales services B) air conditioner

C) Comfort D) fuel efficiency

E) Performance F) any other

Ques 8

Did advertisement influenced your Hyundai santro buying decision

A) Yes B) no

Ques 9

Hyundai santro to you

A) Just a car B) more than a car

C) The sunshine car D) the family car

BIBLIOGRAPHY

Marketing Management by Phillip Kotler

Brand positioning by Subroto sengupta

Positioning: The Battle for your mind by Al Ries & Jack Trout

Newspapers, Journals & Magazines

Business World

The Economist

Economic Times

Autocar India

Websites

www.hyundai.co.in

www.hyundai.com

www.google.com

www.agencyfaqs.com

www.brandchannel.com

www.superbrands.org

www.marketingprofs.com

www.netmba.com

www.economictimes.com

www.blonnet.com

www.ecnomist.com

www.bsmotoring.com

www.autoworld.com