PROJECT REPORT ON MARUTI SUZUKI SUBMITTED IN THE PARTIAL FULLFILMENT FOR THE AWARD OF THE DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION 2009-2012 UNDER THE GUIDANCE OF Mrs. SANAM SHARMA FACULTY, MAIMS SUBMITTED BY: GAURAV VASHISTHA Roll No.:9333 Batch No. –BBA 3 rd Semester (2 nd Shift) Maharaja Agrasen Institute Of Management Studies Affiliated to Guru Gobind Singh Indraprastha University,
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PROJECT REPORTON
MARUTI SUZUKI
SUBMITTED IN THE PARTIAL FULLFILMENT FOR THE AWARD OF THE
DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION 2009-2012
UNDER THE GUIDANCE OFMrs. SANAM SHARMA
FACULTY, MAIMS
SUBMITTED BY:GAURAV VASHISTHA
Roll No.:9333Batch No. –BBA 3 rd Semester (2nd Shift)
Maharaja Agrasen Institute Of Management Studies
Affiliated to Guru Gobind Singh Indraprastha University,
Delhi.PSP Area, Plot No. 1, Sector-22, Rohini,
Delhi-110086
SELF DECLARATIONI , GAURAV VASHISTHA, student of BBA, Maharaja Agrasen Inst itute Of Management Studies (MAIMS) Hereby declare that the project entit led “MARKETING STRATEGIES OF MARUTI SUZUKI” Is the result of my own efforts in col lect ing and gathering information based on the above mentioned topic and guidance given by concerned authority ( faculty Mrs. SANAM SHARMA ) from t ime to t ime.
GAURAV VASHISTHABBA 3 r d SemesterRol l NO.-9333
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CERTIFICATE
This is to certify that GAURAV VASHISTHA , Roll No.9333 /MAIMS/2009 is a bonafide student of this institute pursuing B.B.A full time Programme of three years duration, which is in affiliation with GGS Indraprastha University and has undertaken a minor project on “WIPRO TECHNOLOGIES” in the partial fulfillment of B.B.A degree as required under the rules of the university.
Mrs. SANAM SHARMA(Project Guide)
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ACKNOWLEDGEMENT
This project work, which is my first step in the field of profess ional ism, has been successfu l ly accompl ished only because of t imely support o f my wel l wishers . I would l ike to pay my s incere regards and thanks to those, who directed me at every step in my project work.
F i rs t o f a l l , I would l ike to express my thanks to Dr. N.K. Kakkar (d i rector , MAIMS) for g iv ing me such a wonderfu l opportuni ty to widen the hor izons of my knowledge .
I extend my thanks to my project guide Mrs. SANAM SHARMA for her scholar ly guidance, constant superv is ion and encouragement. I t is due to her personal in terest and in i t iat ive that the project work is publ ished in the present form.
Last but not the least , I would a lso thank a l l the staff members of MAIMS, f r iends and parents who have direct ly or ind irect ly contr ibuted in making th is pro ject a success. I t i s a t r ibute for there va luat ion.
Despite a l l efforts , I have no doubt that error and obscur i t ies remain that seen to afflict a l l wr i t ing pro jects and for which I am culpable.
GAURAV VASHISTHABBA 3 r d Semester
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MARUTI UDYPG LIMITED
Maruti is India's largest automobile company. The company, a joint
venture with Suzuki of Japan, has been a success story like no
other in the annals of the Indian automobile industry.
Today, Maruti is India's largest automobile company. This feat was
achieved by the missionary zeal of our employees across the line
and the far-sighted vision of our management.
The Company Mission:
To provide a wide range of modern, high quality fuel efficient
vehicles in order to meet the need of different customers, both in
domestic and export markets.
The Company Vision:
We must be an internationally competitive company in terms of
our products and services.
We must retain our leadership in India and should also aspire to be
among the global players.
Their focus is on:
Building a continuously improving organisation adaptable to
quick changes
Providing value and satisfaction to the customer
Aligning and fully involving all our employees, suppliers and
dealers to face competition
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Maximising Shareholder's value
Being a responsible corporate citizen
At Maruti, they have a clear perspective on manpower. They see it
as a unique resource, in the sense that optimal productivity of
other resources depends largely on the way human resources are
utilised. The basic philosophy of management that underlies the
Maruti culture is that all employees of the company should be
moulded into a team which then strives as one, to achieve
commonly shared company goals and objectives. To make this
philosophy tenable, the Company takes several initiatives. Inputs
are sought from employees at all levels. They believe that
everyone should contribute to the formulation of company policies,
goals and objectives. Secondly, at Maruti, they encourage
leadership in the best sense of the word. According to us, a leader
is one who must be impartial, must have the ability to rise above
his own subjectivity, and, most importantly, must practice what he
preaches.
They understand that the process of creating a sense of belonging
that all employees can identify with is a lengthy one. To ensure
that this translates into concrete reality, they have taken several
simple but specific and well thought out measures. The first step in
this direction has been the introduction of a common uniform for
all employees. Another measure is the creation of a common
canteen where all employees have lunch, stand in common
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queues, and sit on the same table. Common toilets, common
transport and similar facilities for all levels of employees are other
measures that reinforce their emphasis on genuine equality in the
workplace.
At Maruti They do not believe in the notion of organisational
hierarchies. As a matter of fact, the management structure and
systems in Maruti have been designed to promote decentralisation
of authority. Maruti has a horizontal management structure with
only four functional levels of responsibility to facilitate quicker
decision making.
Another focus area of the Maruti culture is the maintenance of a
smoothly functioning communication network. Maruti believes that
communication channels between labour and management cannot
simply consist of having a labour representative on the Board of
the Company. They have faith in the ability of labour to effectively
participate in management and make constructive suggestions. To
encourage this, they ensure that there is a thorough dissemination
of information at all levels, through newsletters or via a letter from
the Chief Executive to all employees. Meetings with the Union are
held regularly, and programmes being contemplated by the
Company are discussed with the Union. The Sahyog Samiti, a
collection of representatives of non-unionised employees, training
programmes in Japan, Quality Circles, productivity-linked incentive
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schemes, and an ethos of discipline and teamwork, all contribute
to the Maruti culture.
Several measures of performance have made amply clear that
Maruti has established a truly healthy work culture. They have met
all project and performance targets since inception. Their
productivity levels are constantly improving. The Company has had
good labour relations with employees from the very beginning, and
they have been successful in the export market. Yet, the Maruti
culture is one that does not believe in resting on its laurels. They
adhere to the spirit of Kaizen, which states that constant
improvement is always possible. The most basic tenet of
productivity that they hold dear is that " Today should be better
than Yesterday and Tomorrow should be better than Today".
Maruti Udyog Limited (MUL) was established in Feb 1981 through
an Act of Parliament, to meet the growing demand of a personal
mode of transport caused by the lack of an efficient public
transport system.
Suzuki Motor Company was chosen from seven prospective
partners worldwide. This was due not only to their undisputed
leadership in small cars but also to their commitment to actively
bring to MUL contemporary technology and Japanese management
practices (which had catapulted Japan over USA to the status of the
top auto manufacturing country in the world).
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A licence and a Joint Venture agreement was signed between
Government of India and Suzuki Motor Company (now Suzuki Motor
Corporation of Japan) in Oct 1982.
The objectives of MUL then were:
Modernization of the Indian Automobile Industry.
Production of fuel-efficient vehicles to conserve scarce
resources.
Production of large number of motor vehicles, which was
necessary for economic growth.
Core Value
Customer Obsession
Fast, Flexible and First Mover
Innovation and Creativity
Networking and Partnership
Openness and Learning
Vision
The leader in the India Automobile Industry, Creating Customer
Delight and Shareholder’s Wealth; A pride of India”
Technological Advantage
We have introduced the superior 16 * 4 Hypertech engines across
the entire Maruti Suzuki range. This new technology harnesses the
power of a brainy 16-bit computer to a fuel-efficient 4-valve engine
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to create optimum engine delivery. This means every Maruti Suzuki
owner gets the ideal combination of power and performance from
his car.
Our other innovation has been the introduction of Electronic Power
Steering (EPS) in select models. This results in better and greater
maneuverability. In other words, our cars have become even more
pleasurable to drive.
Production/R&D
Spread over a sprawling 297 acres with 3 fully-integrated
production facilities, the Maruti Udyog Plant has already rolled out
over 4.3 million vehicles. In fact, on an average, two vehicles roll
out of the factory every minute. And it takes on an average, just 14
hours to make a car. More importantly, with an incredible range of
11 models available in 50 variants, there's a Maruti Suzuki made
here to fit every car-buyer's budget. And dream.
Production Milestones
1st vehicle produced, December 1983
1,00,000 vehicles produced by August, 1986
5,00,000 vehicles produced by June, 1990
10,00,000 vehicles produced by March, 1994
20,00,000 vehicles produced by October, 1997
30,00,000 vehicles produced by June, 2000
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40,00,000 vehicles produced by April, 2003
55,00,000 vehicles produced by April 2006
75,00,000 vehicles produced by April 2009
85,00,000 vehicles produced by April 2010
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MILESTONES
2005 The fiftieth lakh car rolls out in April, 2005
Growth in overall sales by 15.8%
2004 New (non A/C) variant of Alto
Alto becomes India's new best selling car
LPG variant of 'Omni Cargo'
Versa 5-seater, a new variant
Baleno LXi, a new variant
Maruti closed the financial year 2003-04 with an annual sale of 472122 units, the highest ever since the company began operations 20 years ago
2003 New Suzuki Grand Vitara XL-7
Redesigned and all-new Zen
New upgraded WagonR
Enters into partnership with State Bank of India
Production of 4 millionth vehicle. Listed on BSE and NSE after a public issue oversubscribed 10 times
2002 WagonR Pride
Esteem Diesel. All other variants upgraded
Maruti Insurance. Two new subsidiaries started: Maruti Insurance Distributor Services and Maruti Insurance Brokers Limited
Alto Spin LXi, with electronic power steering
Special edition of Maruti 800, India’s first colour-coordinated car
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Maruti True value in Mumbai
Maruti Finance in Mumbai with 10 finance companies
Suzuki Motor Corporation (SMC) increases its stake in Maruti to 54.2 percent
2001 Zen LXi
Maruti True Value launched in Bangalore and Delhi
Maruti Versa, India’s first luxury MPV
Alto Spin LXi, with electronic power steering
Alto Vxi
Customer information centers launched in Hyderabad, Bangalore and Chennai
Launch of versa
2000 First car company in India to launch a Call Center
New Alto
Altura, a luxury estate car
IDTR (Institute of Driving Training and Research) launched jointly with the Delhi government to promote safe driving habits
1999 Maruti 800 EX ( 796cc, hatchback car)
Zen LX (993cc, hatchback car)
Zen VXi (993cc, hatchback car with power steering)
Omni XL ( 796cc, MUV, high roof)
Baleno (1600cc, 3 Box Car)
Wagon R
Launch of Maruti - Suzuki innovative traffic beat in
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Delhi and Chennai as social initiatives
1998 Maruti launches website as part of CRM initiatives
New Maruti 800 (796cc,hatchback Car) Standard and Deluxe
Produced the 2 millionth vehicle since the commencement of production
1996 Gypsy (E) (970cc, 4WD 8 seater)
Omni (E) (796cc, MUV, 8 seater)
Gypsy King (1298cc, 4WD, off road vehicle)
Zen Automatic (993cc, hatchback car)
Esteem 1.3L (1298 cc, 3 box Car)AX
Launch of 24-hour emergency on-road vehicle service
1995 Esteem 1.3L (1298 cc, 3 box car)VX
With the launch of second plant, installed capacity reached 200,000 units
1994 Esteem1.3L (1298cc, 3 box car)LX
Produced the 1 millionth vehicle since the commencement of production
1993 Zen (993cc, hatchback Car), which was later exported in Europe and elsewhere as the Alto
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1992 SMC increases its stake in Maruti to 50 percent
1991 Reaches cumulative indigenisation of 65 percent for all vehicles produced
1990 Maruti 1000(970cc, 3 box), India’s first contemporary sedan
1988 Installed capacity increased to 100,000 units
1987 Exported first lot of 500 cars to Hungary
1986 Maruti 800 ( New Model-796cc, hatchback Car)
Produced 100,000 vehicles (cumulative production)
1985 Launch of Maruti Gypsy (970cc, 4WD off-road vehicle)
1984 Omni, a 796cc MUV
Installed capacity reached 40,000 units
1983 Maruti 800, a 796 cc hatchback, India’s first affordable car.
Production was started under JVA
1982 License and JV agreement signed between Maruti Udyog Ltd. and SMC of Japan
1981 Maruti Udyog Ltd was incorporated under the provisions of the Indian Companies Act, 1956
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AWARDS
2005 Number one in JD Power SSI for the second
consecutive year Number one in JD Power CSI for the sixth time in a row
- the only car to win it so many times
M800, WagonR and Swift topped their segments in the TNS Total
Customer Satisfaction Study Leadership in the JD Power Initial Quality Study - Alto
number one in its segment for the 2nd time in a row, Esteem number
one in its segment for the 3rd year in a row, Swift number one in the
premium compact segment WagonR and Esteem top their segments in the JD
Power APEAL study TNS ranks Maruti 4th in the Corporate Reputation
Strength (CSR) study (#1 in Auto sector)-Feb 05 Maruti bagged the "Manufacturer of the year" award
from Autocar-CNBC ( 2nd time in a row)-Feb 05
First Indian car manufacturer to reach 5 million vehicles sales
Business World ranks Maruti among top five most respected companies in
India-Oct 04 Maruti ranked among top ten (Rank7) greenest
companies in India by Business Today - Sep '04 2004
Maruti Suzuki was No. 1 in Customer atisfaction, No. 1 in Sales Satisfaction No.1 in Product Quality (Esteem and Alto) and No. 1 in Product Appeal (Esteem and Wagon R)No. 1 in Total Customer Satisfaction (Maruti 800, Zen and Alto)
Business World ranked us among the country's five most respected companies
Business World ranked us the country's most respected automobile company
Voted Manufacturer of the year by CNBC
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Voted one of India's Greenest Companies by Business Today-AC Nielson ORG-MARG
2003
Maruti 800, Maruti Zen and Maruti Esteem make it to the top 10 automotive brands in "Most Trusted Brand survey 2003"J D Power ranked 3 models of Maruti on top: Wagonr, Zen and Esteem
Maruti 800 and Wagonr top in NFO Total Customer Satisfaction Study 2003.
MUL tops in J D Power CSI (2001) for 4th time in a row 2001 MUL tops in J D Power CSI (2001) for 2nd time in a
row: another international first
2000 Maruti bags JD Power CSI - 1st rank; unique
achievement by market leader anywhere in the world
1999MSM launched as model workshop in India; achieves highest CSI rating.
Central Board of Excise & Customs awards Maruti with "Samman Patra", for contribution to exchequer and being an ideal tax assessee
1998 CII's Business Excellence Award
1996
Maruti wins INSSAN award for "Excellence in Suggestion Scheme"
Awarded the Star Trading House status by Ministry of Commerce
1994-95 Engineering Exports Promotion Council's award for
export performance
1994 Best Canteen award among Haryana Industries as part
of employee welfare
1992-93 Engineering Exports Promotion Council's award for
export performance
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WHY MARUTI SUZUKI
The Quality Advantage
A car is an engineering product, only as good as the
technology used to make it. Actual users of our technology are
saying something very clearly Maruti Suzuki is No.1 in quality:
Maruti Suzuki owners experience fewer problems with their
vehicles than any other can manufacturer in India (J.D. Power IQS
Study 2004). The Alto was chosen No.1 in the premium compact
car segment and the Esteem in the entry level mid-size car
segment across 9 parameters.
The J.D. Power APEAL Study 2004 proclaimed the Wagon R. No.
1 in the premium compact car segment and the Esteem No.1 in
the entry level mid-size car segment. This study measures
owner delight in terms of design, content, layout and
performance of vehicles across 8 parameters.
Maruti Suzuki has a sales network of 307 state-of-the-art
showrooms across 189 cities*, with a workforce of over 6000
trained sales personnel to guide our customers in finding the
right car. Our high sales and customer care standards led us to
achieve the No.1 nameplate in the J.D. Power SSI study 2004.
The SSI study measures sales satisfaction across 6 parameters:
behavior. Clearly the buying process starts long before the actual purchase and has consequences long after the purchase.
This model implies that consumers pass through all five stages in buying a product. But this is not the
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case, especially in low-involvement purchase. Consumers may skip or rreverse some stages. Thus a woman buying her regular brand of toothpaste goes directly from the need for toothpaste to the purchase decision, skipping information search and evaluation. However, we have already used the model in above, because it captures the full range of consideration that arise when a consumer facer a highly involving new purchase. We will allude again to Linda Brown and try to understand how she became interested in buying a laptop computer and the try to understand how she became interested in buying a laptop computer and stages she went through to make her final choice.
Need Recognition
The buying process starts when the buyer recognizes a problem or need. the buyer senses a difference between his or her actual. In the former case, one of the person's normal needs-hunger, thirst, sex-rises to a threshold level and becomes a drive. From previous experience, the person has learned how to cope with this drive and is motivated toward a class of objects that will satisfy the drive.
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Or a need can be aroused by an external stimulus. A persons passes a bakery and sees freshly baked bread that stimulates her hunger; she admires a neighbor's new car; or she watches a television commercial advertising a Hawaiian vacation. All these stimuli can trigger a problem or need.
The marketer needs to identify the circumstances that trigger a particular need. in Linda Brown's case she might answer that her "buy season" was peaking or that she was impressed with a coworker's laptop. By gathering information from a number of consumers, the marketer can identify the most frequent stimuli that spark an interest in a product category. The marketer can then develop marketing strategies that trigger consumer interest.
Information search
An aroused consumer will be inclined to search for more information. We can distinguish between two levels. The milder search state is called heightened attention. Here Linda Brown simply becomes more receptive to information about computers. She pays attention to computer ads, computers purchase by friends, and conversation about computers.
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Or Linda may go into active information search where she looks for reading material, phones friends and engages in other activities to learn about computers.
Consumer information sources fall into four groups :
Personal source : Family, friends, neighbors, acquaintances
Public sources : Mass media, consumer-rating organizations
Experiential sources : Handling examining using the product.
Evaluation of Alternatives
How does the consumer process the competitive brand information and make a final judgment of value? It turns out that there is no simple and single evaluation process used by all consumers or even by one consumer in all buying situations. There are several decision evaluation process. Most current models of the consumer evaluation process are cognitively processes. Most current models of the consumer evaluation process are cognitively oriented-
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that is, they see the consumer as forming product judgments largely on a conscious and rational basis.
Consumers differ as to which product attributes they see as relevant or salient. They will pay the most attention to the ones that will deliver the sought benefits. The market for a product can often a be segmented according to the attributes that are salient to different consumer groups.
The most salient attributes may not be the most important ones. Some may be salient because the consumer was recently exposed to an ad mentioning them. Furthermore, non-salient attributes might include some that the consumer forgot but whose importance would be recognized when mentioned.
The consumer is likely to develop a set of brand beliefs about where each brand stands on each attribute. The brand beliefs make up the brand image.
The consumer's brand beliefs will vary with his or her experiences and the effected of selective perception, selective distortion and selective retention.
Purchase decision
In the evaluation stage, the consumer forms preferences among the brands in the choice set. The consumer may also form a purchase intention to buy
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the most preferred brand. However, two factors can intervene between the purchase intention and the purchase decision. These factor are shown in below.
The first factor is the attitudes of others. Suppose Linda Brown's close colleague recommends strongly that Linda should buy the lowest-priced computer (D). As a result, Linda's "purchase probability" for compuer A will be somewhat reduced and for computer D will be somewhat increased. The extent to which another person's attitude reduces one's preferred alternative depends upon two things :
1. The intensity of the other person's negative attitude towards the consumer's preferred alternative and
2. The consumer's motivation to comply with the other person's wishes.
Purchase intention is also influenced by unanticipated situational factors. The consumer forms a purchase intention on the basis of such factors as expected family income expected price and expected product benefits. When the consumer is about to act, unanticipated situational factors may erupt to change the purchase intention. Linda Brown might lose her job some other purchase might become more urgent a friend might report disappointment in that computer brand, or a store salesperson may affect her negatively.
Attitude of
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others
Evaluation of
alternative
Purchase
intention
Purchase
decision
Unanticipated situational
factors
Post-purchase behavior
After purchasing a product, a consumer may detect a flaw. Some buyers will not want the flawed product, others will be indifferent to the flaw, and some may even see the flaw as enhancing the value of the product. Some flaws can be dangerous to consumers. Companies making automobiles, toys, and pharmaceuticals must quickly recall any product that has the slightest chance of injuring users.
Post-purchase Action
The consumer's satisfaction or dissatisfaction with the product will influence subsequent behavior. If the consumer is satisfied, he or she will exhibit a higher probability of purchasing the product again. For example, 75% of Toyata buyers were highly satisfied and about 75% intended to buy a Toyata again; 35%
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of Chevrolet buyers were highly satisfied and about 35% intended to buy a Chevrolet again.
The satisfied customer will also tend to say good things about the brand to others. Marketers say: "Our best advertisement is a satisfied customer.
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Major Factors Influencing Buying behavior
Cultural
Social
CultureSubcultureSocial Class
Reference groupFamily
Roles and statuses
Personal
Age and life-cycle stageOccupationEconomic
circumstancesLifestyle
Personality and self-concept
Psychological
MotivationPerceptionLearning
Beliefs and attitudes
Buyer
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Rogers model for the adoption and diffusion of innovations Innovation Adoption Curve
The innovation adoption curve of Rogers is a model that classifies
adopters of innovations into various categories, based on the idea that certain individuals are inevitably more open to adaptation than others. Is is also referred to as Multi-Step Flow Theory or Diffusion of Innovations Theory.
Innovators
Brave people, puling the change. Innovators are very important communication.
Early Adopters
Respectable people, opinion leaders, try out new ideas, but in a careful way.
Early Majority
Thoughtful people, careful but accepting change more quickly than the average.
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Late Majority
Skeptic people, will use new ideas or products only when the majority is using it.
Laggards
Traditional people, caring for the "old ways", are critical towards new ideas and will only accept it if the new idea has become mainstream or even tradition.
The diffusion of innovations curve (innovation adoption curve) of Rogers is useful to remember that trying to quickly and massively convince the mass of a new controversial idea is useless. It makes more sense in these circumstances to start with convincing innovators and early adopters first. Also the categories and percentages can be used as a first draft to estimate target groups for communication purposes.
Diffusion research focus was on five elements: 1) the characteristics of an innovation which may influence its adoption; 2) the decision-making process that occurs when individuals consider adopting a new idea, product or practice; 3) the characteristics of individuals that make them likely to adopt an innovation; 4) the consequences for individuals and society of adopting an innovation; and 5) communication channels used in the adoption process.
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TARGET MARKETING
Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments.
The beauty of target marketing is that it makes the promotion, pricing and distribution of your products and/or services easier and more cost-effective. Target marketing is the selection of customers you wish to service. The decisions involved in it are
Which segments to target How many products to offer
Which products to offer in which segments
There are three steps to targeting:
Market segmentation Target choice
Product positioning
One of the first things you need to do is to refine your product or service so that you are NOT trying to be 'all things to all people’.
Next, you need to understand that people purchase products or services for three basic reasons:
To satisfy basic needs. To solve problems. To make themselves feel good.
The next step in creating an effective marketing strategy is to zero
in on your target market.
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Target marketing is one of corporate America's most effective business strategies. The idea is to increase sales by first identifying, and then targeting smaller, yet more profitable customer groups within the total market.
Four Ways to Identify Target Markets
1. Geographic: The location, size of the area, density, and climate zone of your customers.
2. Demographics: The age, gender, income, family composition and size, occupation, and education of your customers.
3. Psychographics: The general personality, behavior, life-style, rate of use, repetition of need, benefits sought, and loyalty characteristics of your customers.
4. Behaviors: The needs they seek to fulfill, the level of knowledge, information sources, attitude, use or response to a product of your customers.
One of the best ways to identify your target market is to look at your existing customer base. Who are your ideal clients? What do they have in common? If you do not have an existing customer base, or if you are targeting a completely new audience, speculate on who they might be, based on their needs and the benefits they will receive. Investigate competitors or similar businesses in other markets to gain insight.
TARGET MARKETING
Who are your best customers? Where should you direct your marketing activities?
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Where and how should you allocate your advertising and promotional efforts?
Target Marketing, provides Focus for your business. It helps to establish critical Operational goals and defines what must be done to achieve them
It shows how the different parts of the business contribute to achieving profitable sales levels. Target Marketing is both a planning and an action tool. The process is straightforward. Plan what needs to be done, then implement the specific activities needed to turn these plans into reality. An overall market environment made up of unlimited specialty wants and needs has developed with markets made up of smaller numbers of target customers. Smaller firms can take advantage of this market shift by specializing in addressing the needs of very precisely defined, smaller target markets. Large firms may be less capable of providing such specialty products/services because they need volume operations to support large over the target customers themselves help to define much of the marketing approach. Successful target marketing requires a certain attitude or philosophy towards the business as well as the performance of various activities.
What Customers Want
Marketing is more than an activity, it is an attitude Instead of trying to get customers to buy what the firm
likes to make, or happens to have on hand, the marketing oriented firm tries to produce or sell what its customers want which can be sold at a profit.
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Do not simply throw out everything that you now have and replace goods or production machinery with completely new items.
HOWEVER, AS YOU ANALYZE YOUR MARKET AND CUSTOMER PROFILES, AND SO GAIN AN UNDERSTANDING OF THEIR WANTS, DESIRES, AND PERCEIVED NEEDS, YOU CAN BEGIN TO REORIENT YOUR BUSINESS OVER TIME TO TAKE BEST ADVANTAGE OF THESE NEW INSIGHTS. CONSIDER BOTH THE SHORT TERM AND LONG-TERM IMPLICATIONS OF DEVELOPING AND IMPLEMENTING THE RIGHT TARGET MARKETING STRATEGY FOR YOUR BUSINESS.
Customer Attitudes
For a long time, people have believed that advertising can be used to change people's minds about what they want. This is an incredibly difficult process at best, and an extremely expensive one. Because of these two factors, it is a process that smaller firms simply cannot afford to pursue. Instead, it is much more productive for any size firm to tune in to target customer attitudes as they currently exist. Once they have identified the actual prevailing attitudes, they can begin to organize company resources needed to constructively address and satisfy these attitudes the key question is,
"What are the existing customer attitudes?"
With this as an objective, developing an understanding of existing customer attitudes becomes essential, and their identification becomes an important part of the marketing
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process. Once these customer attitudes, needs or preferences are identified, the entire firm can then organize itself to satisfy these needs as completely and efficiently as possible.
Why Target Marketing?The idea is simple enough. Every business has a potential market
out there somewhere within that broad, fuzzy, agglomeration of
persons and organizations that might conceivably be induced to
buy your product, service or merchandise. It is important to note
that because many businesses offer more than one
product/service, they may be shooting at more than one target at
the same time. A good example is an automobile dealership that
sells more than one brand of car.
Target Marketing - Eight Steps
STEP 1: Define the Product/Service
The business has a product or service to offer, in many cases more
than one of each. Each product or service must be carefully
studied to determine what is special about it. It is this unique
combination of product skills and resources that allow a smaller
firm to differentiate itself from its competitors, large or small, and
to identify target market segments that it can serve especially
effectively, frequently, far more successfully than larger firms with
more resources, who are less focused!
STEP 2: What Wants/Needs are satisfied
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BEFORE THE FIRM CAN CONSIDER WHOSE WANTS OR NEEDS ARE BEST SATISFIED BY ITS PRODUCT OR SERVICE, IT MUST DETERMINE HOW THE PRODUCT OR SERVICE CAN SATISFY. WHAT NEEDS DOES IT MEET? WHAT WANTS CAN IT FULFILL? THIS STEP PERMITS THE PRODUCT OR SERVICE TO BE VIEWED FROM A SLIGHTLY DIFFERENT ANGLE. ANY GIVEN PRODUCT OR SERVICE WILL PROBABLY SATISFY A VARIETY OF WANTS OR NEEDS. THE BUSINESS SHOULD LIST ALL IT CAN POSSIBLE IDENTIFY. THE MORE USEFUL APPLICATIONS YOU CAN IDENTIFY FOR YOUR PRODUCT/SERVICE, THE GREATER THE POTENTIAL MARKET DIMENSION.
STEP 3: IDENTIFY MARKET SEGMENTS
At this point, you have considered three important factors; an identification of the product/service, the product/service appeal factors, and a rough list of potential customers. We will now refine the third factor by addressing in more detail, which might want/need, these products/services
STEP 4: Segment (Differentiate) the Market
Segmenting the market means to divide it into classes or
categories of people or firms based on different sets of factors,
characteristics, or other considerations. It allows an identification
of where these potential customers are and how many of them
there are. Identifying them will lead to the formulation of
productive marketing approaches to these groups There are a
myriad of ways of evaluating a target market, such as economic,
The goal is profit. Therefore, since some of the market will be
easier to sell to at a given price than others, they should be the
primary targets. Again, it is important to have increased
profitability rather than increased sales as the goal of the firm. The
factors affecting profitability are:
Direct Sales Cost
Indirect Sales Cost
Distribution & Logistical Problems
Pricing (Some segments may be more price sensitive than others)
Size of Segment
Ease of Selling to a Given Segment
Image of the Firm in the Market
Sales Personnel- Skills and Weaknesses
STEP 6: Evaluate Segment Mixes
The trick now is to assemble them into a pattern that will produce
the greatest return for the least effort in terms of time and money.
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If a great deal of guesswork has been involved up to this point, the
results may be highly questionable
STEP 7: Formulate Strategy
THE FOCUS IS HOW TO ATTRACT THESE SEGMENTS OR TARGET MARKETS, SO THAT THEY WILL PURCHASE THE FIRM'S PRODUCTS/SERVICES AT A LEVEL THAT IS PROFITABLE FOR THE BUSINESS. THIS PROCESS IS ALSO REFERRED TO AS MARKET PENETRATION FORMULATING THE APPROPRIATE STRATEGY CAN BE BOTH A CREATIVE AND AN ENTERTAINING PROCESS. THERE ARE ONLY A RELATIVELY LIMITED NUMBER OF WAYS TO PROMOTE A PRODUCT: PERSONAL SELLING, ADVERTISING, DIRECT MAIL, AND COMBINATIONS AND PERMUTATIONS OF THESE.
STEP 8: Execute Strategy
Action is a critical component of any market strategy. Without action, the analysis and the planning are a wasted effort. The strategy has been developed, the segments evaluated, the overall scheme approved and then shelved.
Outline
1. Identifying Potential Customers2. Conducting Market Research3. Choosing a Target Market4. Compiling a Customer Profile5. Resources
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Following flowchart briefly describes as to which direction we have
to follow while segmenting the target market
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Comparison of Automobile And Consumer Durable At Dealership Level
S.No Attributes Automobile Consumer Durables
1 Turnover High Low
2 Margin 8%-12% 2%-4%
3Penetration Level
More in small or large towns or cities
More in Rural areas or in cities also
4
Training of Sales Executives
Executives get Training after every specific period As such no training
Only free service which customer can extend upto 4 years(first 2yr are free)
Annual Maintenance Contract (AMC)
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MARUTI CULTURE
Their employees are their greatest strength and asset. It is this
underlying philosophy that has moulded their workforce into a
team with common goals and objectives. Their Employee-
Management relationship is therefore characterized by:
Participative Management.
Team work & Kaizen.
Communication and information sharing.
Open office culture for easy accessibility
To implement this philosophy, they have taken several measures
like a flat organizational structure. There are only three levels of
responsibilities ranging from the Board Of Directors, Division Heads
to Department Heads. Other visible features of this philosophy are
an open office, common uniforms (at all levels), and a common
canteen for all.
This structure ensures better communication and speedy decision
making processes. It also creates an environment that builds trust,
transparency and a sense of belonging amongst employees.
For Investors:
Maruti Udyog Limited, a subsidiary of Suzuki Motor Corporation of
Japan, has been the leader of the Indian car market for about two
decades. Its manufacturing plant, located some 25 km south of
New Delhi in Gurgaon, has an installed capacity of 3,50,000 units
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per annum, with a capability to produce about half a million
vehicles.
The company has a portfolio of 11 brands, including Maruti 800,
Omni, premium small car Zen, international brands Alto and
WagonR, off-roader Gypsy, mid size Esteem, luxury car Baleno, the
MPV, Versa, Swift and Luxury SUV Grand Vitara XL7.
In recent years, Maruti has made major strides towards its goal of
becoming Suzuki Motor Corporation's R and D hub for Asia. It has
introduced upgraded versions of WagonR Zen and Esteem,
completely designed and styled in-house.
Maruti's contribution as the engine of growth of the Indian auto
industry, indeed its impact on the lifestyle and psyche of an entire
generation of Indian middle class, is widely acknowledged. Its
emotional connect with the customer continues.
Maruti tops customer satisfaction again for sixth year in a row
according to the J.D. Power Asia Pacific 2005 India Customer
Satisfaction Index (CSI) Study.
The company has also ranked highest in India Sales Satisfaction
Study.
The company's quality systems and practices have been rated as a
"benchmark for the automotive industry world-wide" by A V
Belgium, global auditors for International Organisation for
Standardisation.
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In keeping with its leadership position, Maruti supports safe driving
and traffic management through mass media messages and a
state-of-the art driving training and research institute that it
manages for the Delhi Government.
The company's service businesses including sale and purchase of
pre owned cars (TrueValue), lease and fleet management service
for corporates (N2N), Maruti Insurance and Maruti Finance are now
fully operational.. These initiatives, besides providing total mobility
solutions to customers in a convenient and transparent manner,
have helped improve economic viability of The company's
dealerships.
The company is listed on Bombay Stock Exchange and National
Stock Exchange.
MUL is a Board-managed company. Currently the directors on the
Board are:
Mr Shinzo Nakanishi, Chairman
Mr Jagdish Khattar, Managing Director
Mr Hirofumi Nagao, Joint Managing Director
Mr Shinichi Takeuchi, Joint Managing Director
Mr Kinji Saito, Director (Marketing and Sales)
Mr Osamu Suzuki, Director
Mr R C Bhargava, Director
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Mr S V Bhave, Director
Mr Kumar Mangalam Birla, Director
Mr Amal Ganguli, Director
Ms Pallavi Shroff, Director
Mr Manvinder Singh Banga, Director
54
PRODUCTS
55
Maruti’s marketing objective is to continually offer the customer new products and services that:
Reduce the customer’s cost of ownership of their cars; and
anticipate and address the customer’s needs and preferences in all aspects and stages of car ownership, to provide what they refer to as the “360 degree customer experience.”
They sell ten models with more than 50 variants in segments A, B, C, and utility vehicle segment of the Indian passenger car market. Of these, they manufacture nine models and import the Grand Vitara as a completely built unit from Suzuki in Japan. Their models and variants are designed to address the changing demands of the market and are periodically upgraded in technology, styling and features. To take advantage of the brand recognition associated with their products, they retain the brand name of the product through various stages of product upgrades over time. For example, the version of the Maruti 800 brand currently sold in the market is a significantly upgraded version, in terms of technology, design and styling, of the Maruti 800 launched in 1983.
A Maruti 800
A OMNI
B Zen
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B Wagon R
B Alto
C Esteem
C Baleno
C Versa
C SWIFT
Utility Vehicle GYPSY KING
Utility Vehicle GRAND VITARA
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BALENO
DIMENSIONS
Length 4225mmWidth 1690mmHeight 1390mmWheelbase 2480mmTread Front 1440mm
Cylinders In-line 4No. of valves 16Swept volume 1590 ccBore x stroke 75.0 x 90.0 mmCompression ratio 9.0 0.2:1Max. Power output PS 91 bhp@5500 rpmMax. torque 130.5 Nm@3000 rpmFuel distribution Multi Point Fuel InjectionMax. speed 175 km/hr
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TRANSMISSION
Type 5 forward, all-synchromesh, 1 reverseCHASSIS
Steering Rack and Pinion with hydraulic power assistance
Brakes Type Vacumm assisted hydraulicFront Ventilated disc Rear Drum, leading/trailing
Suspension Front McPherson strut & coil spring with L shaped lower arm and anti-roll bar
Rear McPherson strut & coil spring with parallel link arrangement
WEIGHTUnladen weight 655 kg (AC BS I), 640 kg (Std. BS I),
665 kg (AC BS II & AC BS III),650 kg (Std. BS II & Std. BS III)
Laden weight 1000 kgENGINE
Type 4 stroke cycle, water cooled SOHC (1C2V)Number of cylinders 3Piston displacement 796 ccMaximum output (Std., AC)
37 bhp at 5000 rpm
Maximum torque (Std., AC)
59 Nm at 2500 rpm
POWER TRANSMISSIONStd., AC 4 forward, all synchromesh
1 reverseSTEERING
Steering Rack & pinionSUSPENSION
Front McPherson strut & coil springRear Coil spring with gas filled shock absorbers
BRAKESFront DiscRear Drum
TYRESTyre size Radial 145 / 70 R-12
CAPACITYFuel tank capacity 30 liters (BSI), 28 liters (BS II & BS III)
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NEW ALTO
SPECIFICATION
WEIGHTKerb weight ALTO 725 kg
ALTO LX/ALTO Lxi 740 kg Gross vehicle weight 1165 kg
ENGINE Swept volume 796cc Engine type FC engine, 4
valves Per cylinder MPFI
No. of cylinders 3 Engine control 32 bit computer Maximum power 47 bhp @ 6200 rpm Maximum torque 62 Nm @ 3000 rpm Transmission 5 speed, all synchromesh,
manualSUSPENSION
SYSTEM Front McPherson Strut with torsion
type anti-roll bar
Rear Coil spring with double action telescopic shock absorbers
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Seating Capacity
5 persons
Tyre size 145 / 80 R12 Overall length 3495 mm Overall width 1495 mm Overall height 1460 mm Wheelbase 2360 mm Tread Front 1290 mm
Rear 1290 mm Minimum turning radius 4.6 m Ground clearance 160 mm
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OMNI
SPECIFICATIONS
DIMENSIONS
Length 3370 mmWidth 1410 mmHeight 1640 mmWheel base 1840 mmGround clearance 165 mmTurning radius 401 mmWEIGHT (Kerb weight)Omni 5 Seater 785 kgOmni E 8 Seater 800 kg
ENGING
Type 4 stroke cycle, water cooledNo. of cylinders 3Piston displacement 796 ccNo. of engine valves 6
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POWER
TRANSMISSION
Type Manual, 4 forward, all synchromesh, 1 ReverseSUSPENSION
Front Mc Pherson StrutRear Leaf spring with shock absorbers
Maximum Power 35 bhp @ 5000 rpmMaximum Torque 6.1 kgm @ 3000 rpm
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SWIFT
SPECIFICATION
BODY TYPE
Body type HatchbackNumber of doors 5Seating capacity 5
ENGINE
Capacity 1298ccNumber of cylinders 4Number of valves 16Bore x Stroke 74.0 x 75.5mmCompression ratio 9.0:1Maximum power 87bhp@6000rpmMaximum torque 113Nm@4500rpmFuel distribution Multipoint injection
TRANSMISSION
Type 5-speed manual, with synchromesh in all gears, one reverse
Steering Rack & pinion, power assisted Brakes (front) Ventilated DiscsBrakes (rear) DrumsSuspension (front) Macpherson strut and coil spring Suspension (rear) Torsion beam and coil spring
Car market leader Maruti Udyog Limited has announced a marginal
increase in price of certain models. The increase, which comes into
effect from today, varies from 0.17 percent to 1.47 percent.
The price increase is due to rise in input costs and freight
costs, which increased following the rise in oil prices. In
this phase, the company has decided to pass on only a part
of the increase in costs to the customers. There is no
change in the prices of Swift, Zen, Baleno (Vxi) and
WagonR (Petrol).
Ex-Showroom Prices in Delhi (in Rs)
Model New Old IncreaseChang
e %
M800 Std 191646 191146 500 0.26%
M800 Std Ac 213062 212562 500 0.24%
Alto Std 231585 231085 500 0.22%
Alto Lx 265262 264762 500 0.19%
Alto Lxi 283878 283378 500 0.18%
Omni Cargo LPG 194725 192725 2000 1.04%
Omni Cargo 213706 213206 500 0.23%
Omni (Eight Seater) 221268 220768 500 0.23%
Omni LPG 230388 227388 3000 1.32%
Esteem Lx 445968 444968 1000 0.22%
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Esteem Lxi 476223 475223 1000 0.21%
Esteem Vxi 511520 510520 1000 0.20%
Baleno Lxi 576173 575173 1000 0.17%
Versa Dx 433575 432575 1000 0.23%
Versa Dx2 471779 470779 1000 0.21%
Versa Std 360182 359182 1000 0.28%
WagonR Lx LPG 345106 340106 5000 1.47%
WagonR Lxi LPG 373160 368160 5000 1.36%
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ORGANISATION STRUCTURE AT MUL
Maruti Udyog ltd. Has a flat organisation structure with a
maximum of three levels.
Head office
MD
MFG FIN OTHER
DIRECTOR N CONTROLLER GM DGMS AGMS
GM/ DGMS DGMS AGMS MGRS/AMS
MGRS/AMS MGRS/AM SR GM/EX
ENGINEERS(EX) SR. EX./EX TRAINEES
J.E. (TRAINEES)
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THE PRODUCTION PROCESS AT MARUTI
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STEEL COILS
BLANKING
PRESSING
WELDING
PAINTING
ASSEMBLY
VEHICLE INSPECTION
TEST RUN
SUPPLY & DISPATCH
FROM VENDOR
S
FROM VENDOR
S
FROM VENDOR
S
Press Shop: Their press shop has five transfer presses and two
blanking lines. In the press shop, steel coils are cut to the
required size and panels are prepared by pressing them
between various die sets such as doors, roofs and bonnet. An
anti-rust coat is applied at this stage. They also have in-house
capability and the necessary technical knowledge for the
design and manufacture of medium-size press dies.
Weld Shop: They have three welding shops with 122 six-axis
robots and 25 in-house manufactured two-to-four axis robots.
In this shop, various press metal components manufactured in
the previous stage are spot-welded together to form the body
shell. Various parts such as the floor panel, side panel, doors
and bonnet are sub-assembled in this shop. Subsequently, the
assembled parts undergo final welding. The welded body is
sent to the paint shop through a conveyor.
Paint Shop: They have three paint shops, within one of which
the final outer body is fully painted by robots. In the paint
shop, the body undergoes various pre-treatment and electro
deposition painting processes to provide a high corrosion
resistance to the body. The car body is given an intermediate
or primer coat before applying the stoving topcoat paint. The
intermediate and the final coat are applied by using automatic
electrostatic spray-painting machines (micro bells) and robots,
followed by a baking process.
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Assembly Shop: They have highly flexible assembly lines,
which can simultaneously handle a large number of variants as
well as adapt to sequence changes. The painted bodies
proceed for final assembly in three stages. The first stage is
the trim line wherein various components such as roof head
lining, windshield glass and interior trim components are fitted.
Thereafter, the car is transferred to an overhead conveyor, the
chassis line, wherein components such as the engine, gearbox
and front and rear axles are assembled on the underbody. The
vehicle is then lowered to the final line on its own wheels and
here components and parts such as seats, the steering wheel
and the battery are fitted. The completely assembled vehicle
finally rolls out of the assembly lines to the final inspection
stages.
Machine and engine shops: They assemble and test engines in
their engine shops and carry out precision machining of engine
components in their machine shops.
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INTERNATIONAL BUSINESS
In August, 2003 Maruti crossed a milestone of exporting 300,000 vehicles since its first export in 1986. Europe is the largest destination of Maruti’s exports and coincidentally after the first commercial shipment of 480 units to Hungary in 1987, the 300,00 mark was crossed by the shipment of 571 units to the same country. The top ten destinations of the cumulative exports have been Netherlands, Italy, Germany, Chile, U.K., Hungary, Nepal, Greece, France and Poland in that order.
The Alto, which meets the Euro-3 norms, has been very popular in Europe where a landmark 200,000 vehicle were exported till March 2003. Even in the highly developed and competitive markets of Netherlands, UK, Germany, France and Italy Maruti vehicles have made a mark. Though the main market for the Maruti vehicles is Europe, where it is selling over 70% of its exported quantity, it is exporting in over 70 countries.
Maruti has entered some unconventional markets like Angola, Benin, Djibouti, Ethiopia, Morocco, Uganda, Chile, Costa Rica and El Salvador. The Middle-East region has also opened up and is showing good potential for growth. Some markets in this region where Maruti is, are Saudi Arabia, Kuwait, Bahrain, Qatar and UAE.
The markets outside of Europe that have large quantities, in the current year, are
Algeria, Saudi Arabia, Srilanka and Bangladesh. Maruti exported more than 51,000
vehicles in 2003-04 which was 59% higher than last year. In the financial year 2003-
04 Maruti exports contributed to more than 10% of total Maruti sales.
available for purchase, and leasing and fleet management, in
order to promote customer loyalty.
Brand strength: They have been present in the Indian market
for almost twenty years and have built their brand on the basis
of the values of trust and reliability. Most of their principal
competitors have been present in the Indian passenger car
market for a significantly shorter period. Certain manufacturers
have ceased to manufacture certain products shortly after
introducing them, or have left the market altogether. In
contrast, they continue to support the maintenance of their
products. This has contributed to the strength of their brand. In
2000, 2001 and 2002, J. D. Power Asia Pacific, Inc. ranked us
No. 1 in the India Customer Satisfaction Index, which assesses
customer satisfaction with product quality and dealer service.
They believe that this was the first time that a volume leader
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in the automobile industry anywhere in the world was ranked
first on the JD Power Customer Satisfaction Index. NFO
Automotives 2002 Total Customer Satisfaction Survey ranked
Maruti products as No. 1 in the “Economy”, “Premium
Compact” and “Entry Midsize” segments respectively, for
2002.
Integrated manufacturing facility: Their manufacturing
facility comprises three integrated plants with flexible
assembly lines located at Gurgaon in the northern state of
Haryana. Their facility has advanced engineering capability
and each plant is upgraded on an ongoing basis to improve
productivity and quality. As a result, their first plant set up in
fiscal 1984 is technologically at par with their newer plants and
is also used in the production of their new models. They
believe that they are one of the most efficient among the
vehicle manufacturing facilities of Suzuki’s subsidiaries outside
Japan in terms of productivity measured as the ratio of number
of vehicles produced to number of employees. They have an
installed capacity of 350,000 vehicles per year, which is the
highest among passenger car manufacturers in India and
among the passenger car manufacturing facilities of Suzuki’s
subsidiaries outside Japan. They have consistently produced in
excess of their installed capacity in the five fiscal years ended
March31, 2002.
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B USINESS S TRATEGY
They intend to continue to focus on the small car segment, while offering products in most segments of the Indian passenger car market. They aim to achieve their principal objectives by pursuing the following business strategies:
Maintain and enhance their product range: They intend to utilize Suzuki’s expertise in small car technology to produce new variants of their existing models and to upgrade their products with contemporary technology and features.
Increase reach and penetration: They plan to continue to utilize their extensive sales and service network to increase the reach, in terms of geographical spread, and penetration, in terms of sales volumes, of their products across India.
Increased availability of automobile finance: They continue to seek opportunities to expand the size of the Indian passenger car market, especially in the small car segment, through facilitating easy availability of automobile finance. To that end, they have recently entered into an agreement with the State Bank of India.
.
Continue to reduce costs to offer more competitive products:
Cost competitiveness has been, and continues to be, central to their strategy as the leading manufacturer in the small car segment to expand the size of the market by offering competitively priced, high quality products. The components of this strategy are:
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Higher levels of localization
Vendor participation in cost reduction
Cost reduction on warranties
Reduction in initial investment cost
Reduction in number of vehicle platforms
Achieve further cost reduction through higher productivity
Lower cost of ownership:
Through their business strategies, they seek to reduce the consumer’s cost of ownership of their cars, which comprises the cost of purchase, the cost of fuel and maintenance, including spare parts and repairs, during the life of the vehicle, insurance, and resale value.
SALES NETWORK
Dealers: They offer their products to the customer through a
network of 178 authorized dealers with 243 sales outlets
across 161 cities. They believe that this is the largest network
of dealers amongst car manufacturers in India. Their dealers
employed more than 3,500 sales executives. They are linked to
their sales network through their secure extranet-based
information network. The sales of their spares, accessories and
automobile-related services such as insurance and finance
serve as additional sources of revenue for our dealers. They
believe that the availability of these related products and
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services at sales outlets also helps to attract customers to the
outlets and promotes sales of their cars.
Agreements with dealers: They generally appoint a limited
number of dealers for a certain geographical territory. Their
dealers provide services to customers such as pre-delivery
inspection of vehicles, sales of cars, after sales service, supply
of spare parts and other services that promote sales of cars
within the territory for which they are appointed. They have
the right to sell their products and services through other
dealers or intermediaries in any territory, whether or not one
of their dealers is already established in that territory. Their
dealers are required to maintain their outlets in accordance
with their specifications and employ well-trained sales staff.
Their agreements with their dealers usually have terms of five
years. These agreements are generally renewable for
successive terms of three years, by mutual agreement. The
agreements typically permit termination by either the dealer or
them with six months’ prior notice.
Enhancing dealer performance: Their central office in Delhi,
their regional offices and their area offices monitor and assist
their dealer network. They have nine regional offices, five area
offices and 187 sales and marketing personnel. They follow the
performance of their dealers and frequently suggest
improvements. In order to assist their dealers in enhancing
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their performance and capabilities, they have introduced a
concept of “Balanced Scorecard”. Using this tool, they seek to
measure the performance of a dealership in several areas of
operations, including sales, service, spares and accessories,
financial management and management systems. They reward
dealers who perform well on the “Balanced Scorecard” with a
cash payment at the end of the fiscal year. They believe that
the “Balanced Scorecard” serves as an effective incentive for
dealers to enhance their performance.
Dealer training: They have established standard operating
procedures, showroom ambience and service quality standards
for dealerships. They provide periodic training through their
training centres located at their manufacturing facility and at
Chennai, Kolkata, Guwahati and Pune. They have trained more
than 2,600 and 3,400 dealer sales personnel. Their subsidiary,
True Value Solutions Ltd., provides value-added services, such
as manpower recruitment and training, to their dealers.
AFTER-SALES SERVICE
Network
As on date there are 342 Maruti dealer workshops and 1,545
Maruti Authorised Service Stations, or MASSs, covering 898
cities in India. In addition, 24-hour mobile service is offered in
38 cities under the brand “Maruti On-road Service”. They
intend to extend this service to an additional 25 cities over the
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next three years. As a benchmark for dealers with respect to
service quality and infrastructure facilities, they have launched
service stations under the brand “Maruti Service Masters, or
MSMs, in three locations in India. They have service stations on
30 highways in India under the brand “Express Service
Stations”.
To promote sales of their spare parts and the availability of
high quality, reliable spare parts for their products, they sell
spares under the brand name “Maruti Genuine Parts”, or MGP.
These are distributed through their dealer network and through
authorised sellers of their spare parts, to whom they refer as
stockists.
Many of their MASSs are at remote locations where they do not
have dealers. In order to increase the penetration, in terms of
sales volumes, of their products in these remote areas, they
are exploring opportunities to integrate some of the MASSs
into the sales process in order to increase sales of their cars
and related products and services such as spares and
accessories, insurance and financing.
Genuine Accessories
They have also entered the business of marketing car
accessories under the brand name “Maruti Genuine
Accessories”, or MGA, through their dealership network. They
seek to provide customers with the opportunity to customize
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their vehicles with accessories such as music systems, security
systems, car-care products and utility products.
Warranty and Extended Warranty Program
They offer a two-year warranty on all their vehicles at the time
of sale. Their dealers are required to address any claim made
by a customer, in accordance with practices and procedures
prescribed by them, under the provisions of the warranty in
force at that time. The dealers subsequently claim the
warranty cost from them. They analyse warranty claims from
dealers and either claim the cost from vendors, in the case of
defective components, or bear the cost ourselves, in the case
of manufacturing defects.
They offer an extended paid-warranty program marketed under
the brand, “Forever Yours” for the third and fourth year after
purchase. They have entered into arrangements with insurance
companies to cover the costs of warranties offered under this
program. The extended warranty program is intended to
maintain the dealer’s contact with the customer and increase
the revenue generated from sale of spares, accessories and
automobile-related services. An effort is made during the
period of the extended warranty to encourage the customer to
exchange his existing Maruti car for a new Maruti car, or
upgrade to a new Maruti car.
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N EW BUSINESS INITIATIVES
As the largest manufacturer and leader in the small car segment,
they continually seek new ways to utilize their vast car parc, range
of products and extensive sales and service network to expand the
size of the passenger car market in India. They have recently
launched new initiatives to develop the market for automobile
insurance, automobile finance, leasing and fleet management, and
pre-owned cars. They aim to provide customers with a “one-stop
shop” for automobiles and automobile-related products and
services, and build on their wide customer base and extensive
sales and service network to make available to their customers a
wide range of Maruti-branded services at different stages of
ownership, which they refer to as the “360 degree customer
experience”.
Atithi Devo Bhava: One-stop shopInspired by the spirit of India. Atithi Devo Bhava, in Sanskirit,
means “a guest is like God”. It captures the Indian tradition of
honouring guests. It's also the inspiration for the welcome you’ll
receive at a Maruti Suzuki dealership, and the caring relationship
they share with those who drive their cars. At Maruti Suzuki, you
will find all your car related needs met under one roof. Whether it
is easy finance, insurance, fleet management. services, exchange
Maruti Suzuki is set to provide a single window solution for all your
car related needs.
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That's why they have Maruti True Value, the best place to buy
and sell reliable used cars. Maruti Finance an agglomeration of
the biggest finance companies in India brought together by
Maruti Suzuki to ensure that the dream car is within everyone's
reach. Similarly, Maruti Insurance brings together some of the
biggest names in the car insurance industry to provide
insurance solutions to every type of car consumer. Then,
finally, there is N2N, which offers fleet related solutions.
Key Industry Pain Points
Decreasing sales and market share - The long-term battle for market share continues to intensify. In the mature automotive industry, where business cycles drive sales fluctuations, market share is critical to survival. Consumers are less brand-loyal than in the past, and every market segment has an increasing number of vehicle choices. To increase sales and gain ground in the market share battle, companies must improve their ability both to acquire first-time customers and to develop customer loyalty to their current brands. To achieve these related objectives, companies must set an aggressive goal -deliver the best customer experience in the automotive industry.
Difficult dealer relationships and a lack of dealer collaboration - As the consumer's primary touch point ,the dealer network is a critical component of customer-facing operations. Therefore, the integration of the dealer network is absolutely essential to improving the quality of the customer experience. Only with an infrastructure that enables the effective flow of information to and from dealers can companies create a complete view of their customers.
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Car companies must take the initiative in understanding the customer's perspective throughout the buying cycle.
Inefficient demand chain planning and high associated IT cost - Cost reduction is an ongoing competitive requirement. Just as supply chain management must be supported by a sophisticated information infrastructure, effective demand chain management also requires the right supporting infrastructure, enabling car companies to fully leverage each customer relationship through exceptional customer service, efficient lead generation and management, and effective promotions and campaigns. In addition, global automotive enterprises operate a wide variety of IT systems in their various business units and functional groups. Rationalizing these systems offers significant cost savings.
Lack of effective information sharing - Car companies must integrate global operations in order to achieve the benefits of consolidation -cost reduction, effective communication, and true integration of core competencies. In addition, internal alignment between business units and functional groups is required to create a unified view of consumers, products, and services. Currently, each business unit, functional group, and brand operates through independent systems, programs, and touch points. As a result, there is limited synergy across the ecosystem, leading to significant inefficiencies, lack of coordination, and most important, an inability to maximize "share of wallet "from every customer through well-targeted marketing and cross-selling. Synergy between traditionally independent business units such as captive finance companies and between functional groups such as sales, service, and marketing is more critical now than ever before. Only by
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sharing customer information can customer lifetime value be maximized among different groups.
Complex data governance requirements - Global automotive enterprises have large, complex information technology ecosystems. While customer information must be shared within this ecosystem in order to fully maximize global operations, it must also be protected. Proper management of customer information requires a sophisticated capability to manage a variety of access rules and to accommodate legal restrictions that can change very quickly. The trust required for successful collaboration between groups in the automotive enterprise must be built by demonstrating that customer information can be shared while observing these complex requirements.
Difficulty managing employee relationships - In today 's fast-paced business environment, automotive companies need to ensure that their most valuable asset -their employees -have immediate access to the critical information, services, and applications required to be productive. Organizations must enable employees to make better decisions, work collaboratively, enhance customer relationships, and maximize productive time. Global automotive enterprises must be able to enact and enforce consistent policies across business units, instill a common corporate culture across a geographically dispersed and diverse workforce, equip employees with effective search tools to access corporate knowledge bases, and provide employees with the training necessary to service customers in a volatile and demanding market.
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How well do you interact with your customers?
Maruti Udyog Limited: According to the officials of MUL, their overall strength lies
in building an organization that is sharply focused on the voice of the customer.
Maruti's consistent performance over the past several years has resulted in a steady
increase in the percentage of its customers who say they intend to remain loyal to
the brand. n order to be closer to the customers, it is essential that we should have
multiple avenues of one-to-one interaction with our customers. As a major step in
this direction they have started Call Center service with toll-free number for the
people of National Capital Region in year 2000. This service, named Anytime
Maruti, is now available nation-wide. Customers in over 700 cities/towns across
India can contact them any time during the day and all days of the week. The toll-
free service is 1800 1800 180, it is accessible from any fixed-line or mobile phone of
BSNL/MTNL network across the nation. The Anytime Maruti Call-center can also
be accessed using telephones on other networks by dialing 09811801515 (not toll-
free). The objective of this service is to ensure that customers have quick and easy
access to all information on their models, prices, dealers, value added services,
finance options, and the locations of our numerous service stations. Anytime Maruti
helps customers to learn more about their Maruti Cars and also about other services
offered by Maruti. For prospective buyers, Anytime Maruti can help them deciding
amongst various Maruti Models and benefits of buying from Maruti.
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ANALYSIS
Corporates, don't talk about exceeding customer satisfaction - that's passes - the time has come to `dazzle the customer'. But to do that, first you must get customer relationship management (CRM) in place. In the context of India, this is very crucial as the recent World Economic Forum Report on Global Competitiveness has ranked India 43 out of 49 nations surveyed, on `customer orientation'.
Managing customer relationships is not only complex but is also multi-faceted and thus calls for an inter-disciplinary approach. Particularly, as in the New Economy, the customer has become very demanding and the emphasis needs to be on being consumer-centric. Technology solutions as applied to various front-end functions could aid in building a viable link between the organisations and customers irrespective of geographical separation. This has to be backed with appropriate systems and processes to mine the right type of data by the right function in an organisation.
Besides technology, systems and processes, another important link is human resource, If CRM is the key, HR would be the nerve centre for any CRM activity.
At Maruti Udyog Ltd the first step for a company to enhance value through CRM was to identify its target base. At Maruti, the categories which emerged were:
* Two-wheeler owners;
* Customers taken away from the competition;
* Services sector.
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After identifying the target, the next stage was to build on customer relationships. Maruti, therefore, began evaluating the current database of consumers to identify those who wanted Maruti service or better still, wanted to upgrade up the value chain in Maruti products. Third, it began working in tandem with the oil industry to get data feedback on two-wheeler consumers-and identify those ready to move into four-wheeler purchases. Ultimately, CRM is all about value enhancement for the organisation.
Currently in use by 500 sales and service personnel, the Siebel CRM solution is expected to be deployed to Tata Motors' entire network of 250 dealer organisations in India by the end of 2005, with more than 1,600 locations and 10,000 sales and service executives expected to use Siebel Automotive.
Within the first year of implementing the Siebel's solutions, they have seen improvements in customer satisfaction, revenue and operating cost reductions through productivity improvements, and these benefits are expected to increase further over time. This is helping them to become truly customer-centric, since they can draw upon real-time, centralised customer and vehicle data and respond better to their customer and dealer needs.
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CONCLUSION
The price of a car is just one-third of what it cost you over its
lifetime. Running and maintaining it make up the other two-thirds.
Take into account resale value and its real cost becomes clear.
Maruti Suzuki stands for value as much as it stands for
performance. In spite of rising input costs, we try our best to keep
prices down. Their running costs and resale values are unbeatable
too. Nothing matches the delight their cars deliver. In the JD Power
CSI study 2005, 85% of Maruti Suzuki owners stated that they
would definitely recommend the car they drive to someone else.
Infact, you don’t buy a Maruti Suzuki. You invest in it.
After the rash of new cars launches the past two years, the relative
lull in the auto industry is showing up in the customer satisfaction
indices. According to the 2005 four-wheeler Total Customer
Satisfaction (TCS) study conducted by the specialist division of TNS
Automotive, the automobile ownership experience or customer
ownership experience has declined in all areas compared to 2004.
The study is one of the largest syndicated automotive studies in
India, representing the responses of more than 7,000 new car
buyers. The comprehensive study covers over 50 models with
customer evaluations taken in the key areas of sales satisfaction,
product quality, vehicle performance and design, after-sales
service, brand image, and cost-of-ownership. The TCS index score
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provides a measure of satisfaction and loyalty a given model
enjoys with its customers. According to TNS Automotive, the
decline is predominantly for older, small and entry mid-size car
models. The ageing of these models seems to be posing a stiffer
challenge for manufacturers to sustain past performance levels at
a time when customer expectations are rising sharply.
The study reveals a significant increase in the importance of sales
satisfaction, product quality (both performance and design) and
brand image since 2003, indicating rising customer expectations
over the years. This year's study shows the Maruti Suzuki Swift
and the Toyota Innova as the winners, with the two vehicles
achieving segment-best ratings by performing well in areas of
greater relevance, particularly product and brand image. Sales
satisfaction is weak in both these models, largely because of the
longer waiting time for new deliveries.
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TNS Automotive's TCS Study has, since its inception in 2002,
surveyed over 25,000 car buyers and has built a sizeable sample
base. Some of the key findings, indicators and inferences from the
2005 study are:
Progressive reduction in car ownership cycle-time from an average
of 61 months in 2002 to 53 months in 2005: This shortened cycle-
time is bringing these owners for repeat purchases sooner and will,
therefore, further fuel the growth of the four-wheeler market. This
trend is already visible in the growing additional/replacement
purchases. Growth in additional (multi-car households) and
replacement purchases up from 51 per cent in 2002 to 65 per cent
in 2005: This will impact the volume growth in higher-end
segments as the current car owners show upward mobility.
Increasing budget for future purchases: Future intenders with a
budget of Rs 6 lakh plus have increased from 44 per cent in 2002
to 58 per cent in 2005. While first-time buyers are declining as a
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composition of total volumes, the figure in absolute terms is high,
fuelled by the up-gradation by two-wheeler owners. The study also
throws up the question as to whether it is also possible that the
first-time car buyer who is generally a two-wheeler owner, is
getting more fuel efficiency conscious and tending towards
postponing the car purchase decision due to the high cost of fuel.
Of course a shift in composition is also to be expected with the
upper premium compact and mid-size segments projected to grow
at a much faster rate than rest of the industry. The TCS study was
conducted from August through October across 21 cities. Small
sample models have not been featured in the charts.
Maruti Udyog Ltd is one of India 's leading automobile manufacturers and the market leader in the car segment, both in terms of volume of vehicles sold and revenue.
Good Technology
Uniform Pricing
Good Strength
More Coverage Area
Frequent /Regular Product Launch
Market Leader (with 47% share)
Oriented Driven Company
More Product Offering
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Healthy Annual Report
Brand Image
Maximum Dealership as compared to other brands
Good Sale Service
Spare parts are cheap as compared to any other brand
Information Needed
SALES PERFORMANCE FOR THE LAST 2YEARS
(PRODUCT WISE) IN UNITS AND IN RUPEES
Number of Employees, different section wise with due classification Like Skilled, Semi-skilled, Unskilled workers, Officers, managers etc
Organizational Chart with Explanation
Annual Reports (last 5 years)
HISTORICAL GROUND OF THE COMPANY
FUTURE PLANTS OF THE COMPANY
Product, Literature, photograph of the products, technical details etc
List of Competitors
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Future Plans, Export Strategy, Market Share of the Comparative Area of the operation etc
You must include following in Conceptual discussion Consumer Behaviour Innovators Early Adopters Late Adopters Followers Laggards Jack
GUIDELINES
Certificate from Internal GuideCertificate from CompanyPrefaceAcknowledgement
CHAPTER—1(Introduction)
The purpose of introduction is to introduce the research project to
the readers. It should contain a clear statement of the objectives of
research i.e., enough background should be given to make clear to
the reader why the problem was considered worth investigating. A
brief summary of other relevant research may also be stated so
that the present study can be seen in that context. The hypothesis
of study, if any and the definitions of the major concepts employed
in the study should be explicitly stated in the introduction of the
report. Almost equivalent to Executive Summary
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Overview of Industry as a whole
Profile of the Organisation
Problems of the Organisation
Competition Information
SWOT analysis of the organization
Any Article related to (Target Marketing)
CHAPTER—2 Research Methodologies
Mainly this portion covers
OBJECTIVES
SCOPE OF THE STUDY
MANAGERIAL USEFULNESS OF STUDY
METHODOLOGY
CHAPTER—3 (CONCEPTUAL DISCUSSION – THEORETICAL
BACKDROP AND LITERATURE REVIEW)
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CHAPTER—4 (DATA ANALYSIS)
CHAPTER—5 (CONCLUSONS AND SUGGESTIONS)
APPENDICESHere sample Questionnaire, Analytical Master Charts and any other
relevant documents may be included
Bibliography
Reference Books, Journals, Newspaper, Web Sites, Reports, etc