Project MS&S CRM of maruti suzuki

UNIVERSITY OF MUMBAI

PROJECT REPORT

ON

CUSTOMER RELATIONSHIP MANAGEMENT AT MARUTI SUZUKI

BY

MR. JITEN H MENGHANI

ROLL NO 32

M.COM. (PART-1)

ACADEMIC YEAR 2013-2014

PROJECT GUIDE

PROF. MRS N.A. NERURKAR

PARLE TILAK VIDYALAYA ASSOCIATION’S

M.L.DAHANUKAR COLLEGE OF COMMERCE

DIXIT ROAD, VILE PARLE (EAST)

MUMBAI-400 057

DECLARATION

I, MR. JITEN H MENGHANI OF PARLE TILAK VIDYALAYA

ASSOCIATION’S, M.L.DAHANUKAR COLLEGE OF COMMERCE of M.COM (PART-1) (Semester 1) hereby

Declare that I have completed this project on

CUSTOMER RELATIONSHIP MANAGEMENT AT MARUTI SUZUKI

in The Academic year 2013-2014. The information

Submitted is true & original to the best of knowledge.

-----------------------(Signature of student)

ACKNOWLEGEMENT

To list who all have helped me is difficult because they are so numerous and the depth is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions in the completion of this

project

I take this opportunity to thank the University of Mumbai forgiving me chance to do this project.

I would like thank my Principal, Dr. Madhavi.S.Pethefor providing the necessary facilities required for completion of

this project.

I would also like to express my sincere gratitude towards my project guide PROF. MRS N.A. NERURKAR whose guidance and

care made the project successful.

I would like to thank my college library, for having provided Various reference books and magazines related to my project.

Lastly I would like to thank each & every person who directly or indirectly helped me in completion of the project especiallymy parents & peers who supported me throughout my project.

Content

1. Introduction2. Porter five force model in the Indian Automobile Industry3. History of Indian Automobile Industry4. Trends in the Indian Passenger Car Industry5. Key Developments in the Industry6. Segment Analysis

7. Market Presence8. SWOT Analysis9. History Of Maruti Suzuki10.Joint venture related issues11.Industrial relations12.Manesar violence July 201213.Technology14.Analytical CRM

a) Data Baseb) Direct Marketing Data Analysisc) Cross selling of various added servicesd) Customer retention for services at dealers, satisfaction, thereby,

Sales retention for the future15.Operational CRM

a) Campaign management for Promoting the special offers b) SX4 Pre-launch campaign management on MSD CRM 4.0c) Insight for Dealer Development Division (DDD) & Used car

Division (TRUE VALUE)d) Loyalty card Implementation (Auto card)

16.Strategic CRM17.Philosophical CRM18.Challenges Addressed by MS Dynamics CRM 4.019.Future challenges of Maruti’s CRM20.References

21.

INTRODUCTION

“A market is never saturated with a good product, but it is very quickly saturated with a bad one. - Henry Ford”

INDIAN AUTOMOBILE INDUSTRY

The automotive industry in India is one of the larger markets in the world and had previously been one of the fastest growing globally, but is now seeing flat or negative growth rates. India's passenger car and commercial vehicle manufacturing industry is the sixth largest in the world, with an annual production of more than 3.9 million units in 2011. According to recent reports, India overtook Brazil and became the sixth largest passenger vehicle producer in the world (beating such old and new auto makers as Belgium, United Kingdom, Italy, Canada, Mexico, Russia, Spain, France, Brazil), grew 16 to 18 per cent to sell around three million units in the course of 2011-12. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand. In 2010, India beat Thailand to become Asia's third largest exporter of passenger cars.As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second (after China) fastest growing automobile market in the world in that year. According to the Society of Indian Automobile Manufacturers, annual vehicle sales are projected to increase to 4 million by 2015, no longer 5 million as previously projected. “The production of passenger vehicles in India was recorded at 3.23 million in 2012-13 and is expected to grow at a compound annual growth rate (CAGR) of 13 per cent during 2012-2021, as per data published by Automotive Component Manufacturers Association of India (ACMA)”. The majority of India's car manufacturing industry is based around three clusters in the south, west and north. The southern cluster consisting of Chennai is the biggest with 35% of the revenue share. The western hub near Mumbai and Pune contributes to 33% of the market and the northern cluster around the National Capital Region contributes 32%. Chennai, with the India operations of Ford, Hyundai, Renault, Mitsubishi, Nissan, BMW, Hindustan Motors, Daimler, Caparo, and PSA Peugeot Citroën is about to begin their operations by 2014. Chennai accounts for 60% of the country's automotive exports. Gurgaon and Manesar in Haryana form the northern cluster where the country's largest car manufacturer, Maruti Suzuki, is based. The Chakan corridor near Pune, Maharashtra is the western cluster with companies like General Motors, Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Land Rover, Jaguar Cars, Fiat and Force Motors having assembly plants in the area. Nashik has a major base of Mahindra & Mahindra with a UV assembly unit and an Engine assembly unit. Aurangabad with Audi, Skoda and Volkswagen also forms part of the western cluster. Another emerging cluster is in the state of Gujarat with manufacturing facility of General Motors in Halol and further planned for Tata Nano at their plant in Sanand. Ford, Maruti Suzuki and Peugeot-Citroen plants are also set to come up in Gujarat.

Kolkata with Hindustan Motors, Noida with Honda and Bangalore with Toyota are some of the other automotive manufacturing regions around the country.

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:-Passenger CarsMulti- Utility Vehicles (MUVs)Two- and Three- VehiclesCommercial Vehicles - Light Commercial Vehicles (LCVs) / Medium and Heavy Commercial Vehicles (MHCVs)TractorsWe 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

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

HISTORY OF Indian Automobile Industry

The first car ran on India's roads in 1899. Until the 1930s, cars were imported directly, but in very small numbers.

An embryonic automotive industry emerged in India in the 1940s. Hindustan was launched in 1942, long time competitor Premier in 1944. They built GM and Fiat products respectively. Mahindra & Mahindra was established by two brothers in 1945, and began assembly of Jeep CJ-3A utility vehicles. Following the independence, in 1947, the Government of India and the private sector launched efforts to create an automotive component manufacturing industry to supply to the automobile industry. In 1953 an import substitution programme was launched, and the import of fully built-up cars began to be impeded.

The Hindustan Ambassador dominated India's automotive market from the 1960s until the mid-80sHowever, the growth was relatively slow in the 1950s and 1960s due to nationalisation and the license raj which hampered the Indian private sector. Total restrictions for import of vehicles were set and after 1970 the automotive industry started to grow, but the growth was mainly driven by tractors, commercial vehicles and scooters. Cars were still a major luxury item. In the 1970s price controls were finally lifted, inserting a competitive element into the automobile market. By the 1980s, the automobile market was still dominated by Hindustan and Premier, who sold superannuated products in fairly limited numbers. During the eighties, a few competitors began to arrive on the scene.

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

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

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 FY2000, 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 FY2004-2007. 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 FY2000 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.

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

TRENDS IN THE INDIAN PASSENGER CAR INDUSTRY

KEY DEVELOPMENTS IN THE INDUSTRY

COMPANY NAME

DOMESTIC SALES MARKET SHARE

APR-AUG

2009

APR-AUG

2010 GROWTH

APR-AUG

2009

APR-AUG

2010

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 2006, 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 2005 to 64.9% in April – August 2006, 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

Key Demand DriversTraditionally, 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

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.

new technologically superior models, increasing levels of urbanization and changing

consumer profiles.

Segment Analysis

Market Presence

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 September1998 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 1998. 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 1999, Daewoo launched

stripped-down variants. The launch of the cheaper versions saw the sales of Matiz reaching

almost 2000 units in May 1999 and recording an average monthly sale of 3123units in

FY2000. 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 4 cars in the Compact Segment: the Swift, the Zen, the Alto and the Wagon R.

In terms of market share, Zen steadily lost share in FY2000 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 2000,

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.

However 2005 has been a revolutionary year for Maruti since its new Launch Swift has been

a huge success in the market and the most demanded car as well.

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 FY2002 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 May2003.

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 (Swift)

Opportunity

Rise of Indian middle class and small citiesA booming economyRising exports

Threats

Many players fighting for the same cakeEntry of new playersCannibalism

History Of Maruti Suzuki

Originally, 18.28% of the company was owned by the Indian government, and 54.2% by Suzuki of Japan. The BJP-led government held an initial public offering of 25% of the company in June 2003. As of May 2007, the government of India sold its complete share to Indian financial institutions and no longer has any stake in Maruti Udyog.

Maruti Udyog Limited (MUL) was established in February 1981, though the actual production commenced in 1983 with the Maruti 800, based on the Suzuki Alto kei car which at the time was the only modern car available in India, its only competitors - the Hindustan Ambassador and Premier Padmini - were both around 25 years out of date at that point. Through 2004, Maruti Suzuki has produced over 5 Million vehicles. Maruti Suzukis are sold in India and various several other countries, depending upon export orders. Models similar to those made by Maruti in India, albeit not assembled or fully manufactured in India or Japan are sold by Pak Suzuki Motors in Pakistan.

The company exports more than 50,000 cars annually and has domestic sales of 730,000 cars annually. Its manufacturing facilities are located at two facilities Gurgaon and Manesar in Haryana, south of Delhi. Maruti Suzuki’s Gurgaon facility

has an installed capacity of 900,000 units per annum. The Manesar facilities, launched in February 2007 comprise a vehicle assembly plant with a capacity of 550,000 units per year and a Diesel Engine plant with an annual capacity of 100,000 engines and transmissions. Manesar and Gurgaon facilities have a combined capability to produce over 14,50,000 units annually.

About 35% of  all cars sold in India are made by Maruti. The company is 54.2% owned by the Japanese multinational Suzuki Motor Corporation per cent of Maruti Suzuki. The rest is owned by public and financial institutions. It is listed on the Bombay Stock Exchange and National Stock Exchange of India.

During 2007 and 2008, Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. In all, over six million Maruti Suzuki cars are on Indian roads since the first car was rolled out on 14 December 1983. Maruti Suzuki offers 15 models, Maruti 800, Alto, Maruti Alto 800, WagonR, Estilo, A-star, Ritz, Swift, Swift DZire, SX4, Omni, Eeco, Gypsy, Grand Vitara, Kizashi and the newly launched Ertiga. Swift, Swift DZire, A-star and SX4 are manufactured in Manesar, Grand Vitara and Kizashi are imported from Japan as completely built units(CBU), all remaining models are manufactured in Maruti Suzuki's Gurgaon Plant. The company is believed to be moving towards the introduction of a new version of Maruti 800 by November 2012, which will be more fuel efficient, though slightly costlier than Alto and existing Maruti 800. The Suzuki Motor Corporation, Maruti's main stakeholder, has been a global leader in mini and compact cars for three decades. Suzuki’s strategy is to utilise light-weight, compact engines with stronger power, fuel-efficiency and performance capabilities. Nearly 75,000 people are employed directly by Maruti Suzuki and its partners. It has been rated first in customer satisfaction among all car makers in India from 1999 to 2009 by J D Power Asia Pacific.  Maruti Suzuki will be introducing new 800 cc model by Diwali in 2012.The model is supposed to be fuel efficient, and therefore more expensive. With increasing market competition in the small car segment, a new model along with the upcoming WagonR Stingray will be the key fresh products for Maruti Suzuki India (MSI) to defend its market share amid the ever increasing competition.

BeginningsMaruti's history begins in 1970, when a private limited company named 'Maruti technical services private limited' (MTSPL) is launched on November 16, 1970. The stated purpose of this company was to provide technical know-how for the design, manufacture and assembly of "a wholly indigenous motor car". In June 1971, a company called 'Maruti limited' was incorporated under the Companies Act and Sanjay Gandhi became its first managing director. After a series of scandals, "Maruti Limited" goes into liquidation in 1977. This is followed by a commission of inquiry headed by Justice A. C. Gupta, which submits its report in 1978. On 23 June 1980 Sanjay Gandhi dies when a private test plane he was flying crashes. A year after his death, and at the behest of Indira Gandhi, the Indian Central government salvages Maruti Limited and starts looking for an active collaborator for a new company: Maruti Udyog Ltd being incorporated in the same year.

Suzuki entersIn 1982, a license and Joint Venture Agreement (JVA) is signed between Maruti Udyog Ltd. and Suzuki of Japan. At first, Maruti Suzuki was mainly an importer of cars. In India's closed market, Maruti received the right to import 40,000 fully built-up Suzukis in the first two years, and even after that the early goal was to use only 33% indigenous parts. This upset the local manufacturers considerably. There were also some concerns that the Indian market was too small to absorb the comparatively large production planned by Maruti Suzuki, with the

government even considering adjusting the petrol tax and lowering the excise duty in order to boost sales. Finally, in 1983, the Maruti 800 is released. This 796 cc hatchback is based on the SS80 Suzuki Alto and is India’s first affordable car. Initial product plan is 40% saloons, and 60% Maruti Van. Local production commences in December 1983. In 1984 the Maruti Van, with the same three-cylinder engine as the 800, is released. Installed capacity of the plant in Gurgaon, reaches 40,000 units.

In 1985 the Suzuki SJ410-based Gypsy, a 970 cc 4WD off-road vehicle, is launched. In 1986 the original 800 is replaced by an all-new model of the 796 cc hatchback Suzuki Alto/Fronte. This is also when the 100,000th vehicle is produced by the company. In 1987 follows the company's first export to the West, when a lot of 500 cars were sent to Hungary. Maruti products had been exported to certain neighbouring countries already. By 1988, the capacity of the Gurgaon plant is increased to 100,000 units per annum.

Market liberalisationIn 1989 the Maruti 1000 is presented after having been shown earlier. This 970 cc, three-box is India’s first contemporary sedan. By 1991 65 percent of the components, for all vehicles produced, are indigenised. Meanwhile, the liberalisation of theIndian economy opens new opportunities but also brings more competition to the segments in which Maruti operates. In 1992 Suzuki increases its stake in Maruti to 50 percent, making the company a 50-50 JV with the Government of India the other stake holder.

A flow of new models begin in the early nineties. In 1993 the Zen, a modern 993 cc, hatchback which is later exported globally as the Suzuki Alto. In 1994 the 1298 cc Esteem appears, a more luxurious redesigned Maruti 1000. This and other Marutis begin appearing in a plethora of different equipment levels, to better suit India's increasingly discerning consumers. A Zen Automatic arrives in 1996, as does the Gypsy King, a 1.3 liter version of the compact off-roader, and a minibus version of the Omni (the Omni E).

In 1994 Maruti Suzuki produces its 1 millionth vehicle since the commencement of production, being the first company in India to do so. This is still not enough in a booming market and the next year Maruti's second plant is opened, with annual capacity reaching 200,000 units. Maruti also launches a 24-hour emergency on-road vehicle service, the first of its kind in the country. In 1996 the United Front government is formed, with Murasoli Maran new Industries Minister. On 27 August the following year the government nominates Mr. S.S.L.N. Bhaskarudu as the Managing Director, as the then current Managing director R.C. Bhargava, was completing his tenure. This creates a conflict with Suzuki, discussed closer in the Joint venture related issues section.

In 1998 the new Maruti 800 is released, the first change in design since 1986. This is simply a facelift of the existing model, to ensure steady sales. Also, the two millionth vehicle is produced. Other news include the Zen D, a 1527 cc diesel hatchback and Maruti's first diesel vehicle. TheOmni van and microbus is also redesigned. The next year the Omni bus arrives in a high roof version, the Omni XL. The 1.6 litre Maruti Baleno three-box saloon, advertised as the 'Maruti Suzuki Baleno', also appears. This is Maruti's biggest car yet. Finally, in what is a very busy year, theWagon R is launched.

Maruti Alto, introduced in 2000In 2000 Maruti becomes the first car company in India to launch a Call Center for internal and customer services. The new Alto model is also released, somewhat larger and more modern than the 800. The estate Baleno Altura is also shown, while IDTR (Institute of Driving Training and Research) is launched jointly with the Delhi government to promote safe driving habits. In 2001 Maruti True Value, selling and buying used Maruti Suzukis, is launched in Bangalore and Delhi, later in Mumbai and elsewhere. In October of the same year the Maruti Versa sees the day, a bigger engined and more luxurious microbus than the Omni. It never catches on in the market and is discontinued by late 2009. Customer information centers are also launched in Hyderabad, Bangalore and Chennai. In 2002 the Esteem Diesel appears, as does Maruti Insurance. Two new subsidiaries are also started: Maruti Insurance Distributor Services and Maruti Insurance Brokers Limited. Suzuki Motor Corporation increases its stake in Maruti to 54.2 percent.

In 2003 the new Suzuki Grand Vitara XL-7 appears, while the Zen and the Wagon R are upgraded and redesigned. The four millionth Maruti vehicle is built and they enter into a partnership with the State Bank of India. Maruti Udyog Ltd is Listed on BSE and NSE after a public issue, which is oversubscribed tenfold. In 2004 the Alto becomes India's new best selling car, overtaking the Maruti 800 which had been number one for nearly two decades. The five-seater Versa 5-seater, a new variant, is created while the Esteem undergoes cosmetic changes and is re-launched with a price cut. Maruti Udyog closed the financial year 2003-04 with an annual sale of 472,122 units, the highest ever since the company began operations 20 years earlier, and the fiftieth lakh (5 millionth) car rolls out in April, 2005, with overall sales growing by 15.8%. The 1.3 L Suzuki Swift five-door hatchback also appears. 2004-05 marked another record year (487,402 domestic sales) and exports reached 48,899 cars to about fifty different countries. The United Kingdom took the lion's share, with 10,623 deliveries.

In 2006 Suzuki and Maruti set up another joint venture, "Maruti Suzuki Automobiles India", to build two new manufacturing plants, one for vehicles and one for engines. Cleaner cars were also introduced, with several new models meeting the new "Bharat Stage III" standards.

In February 2012, Maruti Suzuki sold its ten millionth vehicle in India.

Joint Venture Related Issues

Relationship between the Government of India, under the United Front (India) coalition and Suzuki Motor Corporation over the joint venture was a point of heated debate in the Indian media until Suzuki Motor Corporation gained the controlling stake. This highly profitable joint venture that had a near monopolistic trade in the Indian automobile market and the nature of the partnership built up till then was the underlying reason for most issues. The success of the joint venture led Suzuki to increase its equity from 26% to 40% in 1987, and further to 50% in 1992. In 1982 both the venture partners had entered into an agreement to nominate their candidate for the post of Managing Director and every Managing Director will have a tenure of five years.

R.C. Bhargava was the initial managing director of the company since the inception of the joint venture. Till today he is regarded as instrumental for the success of Maruti Suzuki. Joining in 1982 he held several key positions in the company before heading the company as Managing Director. Currently he is on the Board of Directors. After completing his five-year tenure, Mr. Bhargava later assumed the office of Part-Time Chairman. The Government nominated Mr. S.S.L.N. Bhaskarudu as the Managing Director on 27 August 1997. Mr. Bhaskarudu had joined Maruti Suzuki in 1983 after spending 21 years in the Public sector undertaking Bharat Heavy Electricals Limited as General Manager. In 1987 he was promoted as Chief General Manager. In 1988 he was named Director, Productions and Projects. The next year (1989) he was named Director of Materials and in 1993 he became Joint Managing Director.

Suzuki did not attend the Annual General Meeting of the Board with the reason of it being called on a short notice. Later Suzuki Motor Corporation went on record to state that Bhaskarudu was "incompetent" and wanted someone else. However, the Ministry of Industries, Government of India refuted the charges. Media stated from the Maruti Suzuki

sources that Bhaskarudu was interested to indigenise most of components for the models including gear boxes especially for Maruti 800. Suzuki also felt that Bhaskarudu was a proxy for the Government and would not let it increase its stake in the venture. If Maruti Suzuki would have been able to indigenise gear boxes then Maruti Suzuki would have been able to manufacture all the models without the technical assistance from Suzuki. Till today the issue of localization of gear boxes is highlighted in the press.

Company Milestones 1970: The Indian government launched a new car company called Maruti Technical Services Limited which created

competition for the existing Ambassador Car Company. 1971: The government changed the name of the company to Maruti Limited. Indira Gandhi’s son, Sanjay Gandhi became the

managing director of the company. 1977: The Company was liquidated as a result of corruption. There was a Maruti Scandal in 1978 where the court issued a

notice to Maruti. Sanjay Gandhi passed away. 1981: The Company was re-established when the founders’ mother, Indira Gandhi took charge. The Company was now

called Maruti Udyog Limited. After partnership with Japanese giant Suzuki Motor Corporation in a Joint Venture Agreement, the company was called Maruti Suzuki Company.

1983: Maruti produced its first car, the Maruti 800. It took the company thirteen months to produce this car. This changed the landscape of the Indian car market as Maruti 800 was the most cost-effective and fuel-efficient car in India.

1984: Maruti produced a large mini-van called the Omni that seated up to eight people. This was an addition to its existing offering of the Maruti 800.

Between 1985 and 1995: Maruti launched the Gypsy, the Maruti 1000, the Zen, the Esteem, and the Maruti On Road Service, a 24-hour service which gives customers 24-hour access to technicians and vans who are ready to help with any problem of the car round the clock.  In 1987, the company made its first export sale, selling 500 cars to Hungary.

1996: This was a prominent year for Maruti as five new models of its cars were launched including the Gypsy (E), Omni (E), Gypsy King (E), the automatic Zen and the Esteem in a 1.3 litre engine. Gypsy has the engine from the Esteem. The engine had a horsepower of 65 bhp.

2000: Maruti launched India’s first call center and the Altrura, a luxury car. It also introduced the 16-Valve MPFI G13BB engine in the Gypsy and the power increased to 80 bhp.

2002: The WagonR Pride, Esteem (diesel version), Alto Spin LXi were introduced. Maruti Finance was started diversifying the company from its initial product offering of only cars to finance. Maruti also inaugurated a children’s park in Delhi as part of it’s Corporate Social Responsibility Initiative.

2003: Maruti launched the Grand Vitara. 2005: Maruti launched the Swift. 2006: Maruti had produced up to six million cars. 2007: Maruti launched the SX4, Swift Diesel and the company was renamed from Maruti Udyog Limited to Maruti Suzuki India

Limited. 2008: Maruti launched the Swift DZire, the A-Star and inaugurated the K-series engine plant in Gurgaon. 2009: The Company shipped the first batch of A-Star cars from the Mundra port.

Industrial relations

Since its founding in 1983, Maruti Udyog Limited experienced few problems with its labour force. The Indian labour it hired readily accepted Japanese work culture and the modern manufacturing process. In 1997, there was a change in ownership, and Maruti became predominantly government controlled. Shortly thereafter, conflict between the United Front Government and Suzuki started. Labour unrest started under management of Indian central government. In 2000, a major industrial relations issue began and employees of Maruti went on an indefinite strike, demanding among other things, major revisions to their wages, incentives and pensions

Employees used slowdown in October 2000, to press a revision to their incentive-linked pay. In parallel, after elections and a new central government led by NDA alliance, India pursued a disinvestments policy. Along with many other government owned companies, the new administration proposed to sell part of its stake in Maruti Suzuki in a public offering. The worker's union opposed this sell-off plan on the grounds that the company will lose a major business advantage of being subsidised by the Government, and the union has better protection while the company remains in control of the government.

The standoff between the union and the management continued through 2001. The management refused union demands citing increased competition and lower margins. The central government prevailed and privatized Maruti in 2002. Suzuki became the majority owner of Maruti Udyog Limited.

Manesar violence July 2012

On 18 July 2012, Maruti's Manesar plant was hit by violence as workers at one of its auto factories attacked supervisors and started a fire that killed a company official and injured 100 managers, including two Japanese expatriates. The violent mob also injured nine policemen. The company's General Manager of Human Resources had both arms and legs broken by his attackers, unable to leave the building that was set ablaze, and was charred to death. The incident is the worst-ever for Suzuki since the company began operations in India in 1983.

Since April 2012, the Manesar union had demanded a three-fold increase in basic salary, a monthly conveyance allowance of   10,000, a laundry allowance of   3,000, a gift with every new car launch, and a house for every worker who wants one or cheaper home loans for those who want to build their own houses. Initial reports claimed wage dispute and a union spokesman alleged the incident may be caste-related. According to the Maruti Suzuki Workers Union a supervisor had abused and made discriminatory comments to a low-caste worker. These claims were denied by the company and the police.=The supervisor alleged was found to belong to a tribal heritage and outside of Hindu caste system; further, the numerous workers involved in violence were not affiliated with caste either. Maruti said the unrest began, not over wage discussions, but after the workers' union demanded the reinstatement of a worker who had been suspended for beating a supervisor. The workers claim harsh working conditions and extensive hiring of low-paid contract workers which are paid about $126 a month, about half the minimum wage of permanent employees.  Maruti employees currently earn allowances in addition to their base wage. Company executives denied harsh conditions and claim they hired entry-level workers on contracts and made them permanent as they gained experience. It was also claimed that bouncers were deployed by the company.

India Today claimed that its interviews of witnesses present at the plant confirm the dispute was over the suspended worker. The management insisted that they must wait for completion

of inquiry underway before they can take any action on the employee suspended for beating up his supervisor. The management was then told, "you will be beaten up after we get a signal." Thereafter, the workers broke up into groups, went on to set the shop floor as well as all offices afire. They searched for management officials and proceeded with a barbaric beating of the officials at the site with iron rods.

The police, in its First Information Report (FIR), claimed on 21 July that Manesar violence may be the result of a planned violence by a section of workers and union leaders. The report claimed the worker's action was recorded on close circuit cameras installed within the company premises. The workers took several managers and high ranked management officials hostage. The responsible Special Investigative Team official claimed, "some union leaders may be aware of the facts, so they burnt down the main servers and more than 700 computers." The recorded CCTV footage has been used to determine the sequence of events and people involved. Per the FIR, police have arrested 91 people and are searching for 55 additional accused.

Maruti Suzuki in its statement on the unrest, announced that all work at the Manesar plant has been suspended indefinitely. A Suzuki spokesman said Manesar violence won't affect the auto maker's business plans for India. The shut down of Manesar plant is leading to a loss of about Rs 75 crore per day. On 21 July 2012, citing safety concerns, the company announced a lockout under The Industrial Disputes Act, 1947 pending results of an inquiry the company has requested of the Haryana government into the causes of the disorder. Under the provisions of The Industrial Disputes Act for wages, the report claimed, employees are expected to be paid for the duration of the lockout. On 26 July 2012, Maruti announced employees would not be paid for the period of lock-out in accordance with Indian labour laws. The company further announced that it will stop using contract workers by March 2013. The report claimed the salary difference between contract workers and permanent workers has been much smaller than initial media reports - the contract worker at Maruti received about   11,500 per month, while a permanent worker received about   12,500 a month at start, which increased in three years to   21,000-22,000 per month. In a separate report, a contractor who was providing contract employees to Maruti claimed the company gave its contract employees the best wage, allowances and benefits package in the region.

Shinzo Nakanishi, managing director and chief executive of Maruti Suzuki India, said this kind of violence has never happened in Suzuki Motor Corp's entire global operations spread

across Hungary, Indonesia, Spain, Pakistan, Thailand, Malaysia, China and the Philippines. Mr. Nakanishi went to each victim apologising for the miseries inflicted on them by fellow workers, and in press interview requested the central and Haryana state governments to help stop such ghastly violence by legislating decisive rules to restore corporate confidence amid emergence of this new 'militant workforce' in Indian factories. He announced, "we are going to de-recognise Maruti Suzuki Workers’ Union and dismiss all workers named in connection with the incident. We will not compromise at all in such instances of barbaric, unprovoked violence." He also announced Maruti plans to continue manufacturing in Manesar, that Gujarat was an expansion opportunity and not an alternative to Manesar.

Labour disputes are endemic in the auto industry of India and have affected other manufacturers. India has strict labour laws, but their application is widely sidestepped by hiring low-wage contract workers. Manesar violence adds to India's recent incidents of labour disputes turning to violence. Analysts claim recent incidents like Manesar violence suggest a need for urgent reform of archaic Indian labour laws, the rigid rules on hiring and layoffs, which harm the formal sector and discourage investment in India. Government mandated procedures for labour dispute resolution are currently very slow, with tens of thousands of cases pending for years. The government of India is being asked to recognise that incidents such as Manesar violence indicate a structural sickness which must be solved nationally.

The company dismissed 500 workers accused of causing the violence and re-opened the plant on 21 August, saying it would produce 150 vehicles on the first day, less than 10% of its capacity. Analysts said that the shutdown was costing the company 1 billion rupees ($18 million) a day and costing the company market share.

The previous week company officials had announced that Maruti would scrap the practice of hiring contract workers and that the workers currently on temporary contracts would be made permanent. It would begin the process of hiring new workers on a permanent basis from 2 September 2012.

In July 2013, the workers went on hunger strike to protest the continuing jailing of their colleagues and launched an online campaign to support their demands.

Technology

Maruti Suzuki uses an innovative Compressed Natural Gas technology – the Intelligent Gas Port Injection (iGPI) on five of its models – the SX4, Eeco, WagonR, Estilo and Alto. The iGPI technology delivers more power and runs like a petrol-filled engine while achieving fuel-efficiency. The iGPI technology uses injectors for each cylinder and a particular amount of CNG is injection in the engine through gas ports. The Engine Control Unit controls the amount of CNG needed for each ride.

Two components used by Maruti in cars such as the Maruti Omni to help increase fuel economy are the crankshaft sensor and knock sensor. They control the ignition timing and fuel injection. The crank shaft is a part of the car’s engine that translates its linear motion into rotation. The sensor is part of the internal combustion engine which monitors the position and rotational speed of the crankshaft. The knock sensor is a part that’s linked to the car’s engine-when the car’s engine is not working it knocks on it and usually you hear the knocking sound. The knock sensor will send a signal to the Powercontrol Car Module (PCM).

The Maruti Swift has a Direct Diesel Injection System engine. This engine has efficient combustion, higher torque and cleaner emissions. It is an extremely light engine and has a 75 bhp, 190 Nm of torque capacity. It has a five-step multi-injection technology that makes the car run more smoothly than other cars. It also has a Double Over Head Camshaft that gives the engine a quick run.  It also has a Chain Drive Timing System. This engine is way better than the Maruti 800 engine which has a Single Over Head Camshaft and only two valves per cylinder while the Swift has sixteen-valve cylinder.

The Maruti Suzuki SX4 has a Variable Valve Timing engine.

According to the company, they will use K-Series engines in all car models. India’s largest car manufacturer Maruti Suzuki decided to implement the K-series petrol engine in all the models for at least five years according to a company report. The K-Series engine is a straight four cylinder engine that comes in Single Overhead Camshaft and Double Overhead Camshaft variants. This engine will be made in the Maruti Manesar plant in Haryana for the A-Star car which is produced in India and sold in Europe. The K-Series engine is Euro 4 and Euro 5 compliant and is the most advanced of engines. The engine has a CO2 emission of 109 gm/km and plans to reduce it further. The engine is extremely fuel efficient

Analytical CRM

The data base

The database is the pre requisite for any kind of data analysis that is done in the analytical CRM module. Since Maruti has established network of data centers through dealer transactions and toll free number-call center data capturing etc. Maruti through various channels.

Those are the following.1) Any Time Maruti- toll free call center (operated by HCL Technologies at Noida).All kinds of queries are logged at (ATM) and the kind of information received into thefollowing areas.a) New sales queries due to campaigning or advertising by Marutib) Existing customer sales queries/complaintsc) Service complaintsThese databases are automated to get migrated with respective operational CRMsoftware modules from the call Centre.

2) Dealer Management System (DMS), dealer transaction module which is connectedthrough extranet to the central server of Maruti.a) All the queries (sales/service/true value) are logged onto the DMS portal bythe channel partners.b) The same data is migrated to the Microsoft dynamics Software at Maruti.

The database from these sources is used for need analysis after the data is cleaned using various data warehouse/data mining techniques.

Direct marketing-Data analysis

The problem with direct marketing is with the fact that success rates of direct marketing are very low. For example, some survey suggests that national average of catalog sales success ratio is about 2% ! With such success ratio, selling low profit margin products through direct marketing may not be feasible. Analytic methods that can select customers who are more likely to buy products are needed. The following techniques can be used in selecting customers;

Customer profiling Customer segmentation Customer scoring Predictive modelling

These techniques can reduce marketing cost by eliminating customer groups who are unlikely to place orders. The techniques that are extensively used in Direct Mail Marketing are RFM analysis, clustering loyalty scoring etc.

Cross-selling of various value added services

Cross-selling is to sell other products to existing customers. To increase the success rate, other products tend to be co-products or related products. For example, a customer who bought a SWIFT car will likely to purchase extra accessories, extended warranty and Auto card.

The following chart shows customer purchasing behaviours,

Cells in red colour indicate that there is positive relationship between two products. That is, when customers buy one product, they tend to buy the other product as well. Cells in blue colour indicate the opposite. When customers buy one product, they tend to not buy the other product. Brightness of cells indicates the relative strength of relationships. The chart shows that the following product pairs have strong positive relationship;

Product P ~ Product O Product P ~ Product F Product O ~ Product F

Also notice that most product pairs show negative relationship (in blue). Knowing negative relationship can prevent from wasteful marketing efforts! The strongest pairs as follows;

Product E ~ Product H Product G ~ Product J Product G ~ Product H

Customer Retention for Service at dealers, satisfaction, thereby, salesRetention for the future

In the current scenario of Indian passenger car industry, customer churn is a big problem as the competitors are pouring sops on customer’s .Also; it is the duty of OEM to ensure that every customer is retained by the dealer for service needs. As in these days, the margins on sales of new cars for dealers is almost vanished or narrowed down, it is the service business that makes the dealers viable. Also, acquiring a new customer is costly when compared to retain the existing customer. Hence, retention of customers for both future purchase of the cars and current service needs is necessary for Maruti Suzuki.

For obvious reasons, the most important strategy in customer retention is to identify groups that are likely to leave (potentially to rival providers) through performing retention (alternatively defection) rate analysis. Once they are identified, preventive measures can be developed and actions can be followed to prevent defections. The following techniques can be used to identify customer groups of defection risk;The main objectives of MS Dynamics CRM at the analytical level are to provide the predictive modeling for probable dissatisfied customer in the service and provide the insights to the related department. The satisfaction scores and churn scores can be calculated at this level.

Defector profiling

Develop profiles of risky groups based on demographic, geographic and psychographic attributes.

Defection scoring

Build neural network predictive models that can predict likelihood of defection.

Operational CRM

Operational CRM generally refers to services that allow an organization to take care of their customers. It provides support for various business process, which can include sales, marketing and service. The operational CRM addresses the various issues such as high customer turnover, ROI on marketing and promoting, customer satisfaction scores etc.

A campaign is a record for storing the details about a marketing effort that uses multiple tasks to reach customers. The following diagram illustrates how to use a campaign in Microsoft Dynamics CRM to track the marketing efforts.

When everything is ready to plan a new marketing campaign, the first steps are oftenGathering information and determining your audience. From there, one can create your teamand your budget for the campaign and get ready for launch. All this information, as well asdata about the campaign tasks, can be stored in a campaign record, allowing you easy accessto the details of a particular campaign. You can also run reports on the campaigns and seewhat marketing works best for your organization.

Campaign management for promoting the special offers

CRM division of Maruti Suzuki runs campaign management using MSD CRM 4.0 to targetvarious segments of customers using the data available from analytical CRM. these kind ofcampaigns are run to promote the products with some offers such as cash discounts, bundlingoffers, exchange offers etc. CRM will contact each and every customer with customizedmarketing program. Interested customers will respond back, the responses from the customers are again captured by CRM database. This can be further analysed for insights using analytical CRM frame work. Hence, CRM is an iterative process.

SX4 Pre-launch Campaign management on MSD CRM 4.0

The launch of SX4 is an example of Maruti’s CRM campaign management for positioning a new product using MSD CRM successfully. The objectives were to position the car in the sedan segment in completion with Honda City, to conquer new customers and loyalize the previous model Baleno. An integrated communication campaign was launched that coordinated TV and print campaigns, direct marketing, preview events, electronic media, as well as dealer marketing. The goal of entire marketing was to select relevant prospects for the actual launch in the upcoming period. The activity started by one-to-one bulk email marketing followed by print and TV advertising. Based on the responses of this activity, the prospects are called for preview launch, thereby; the contact details of these hot prospects are passed to dealers for the follow up once the product entered into the actual market. The effectiveness of the campaign was measured in terms of response rate, cost per contact, ROI on campaign & quality of prospects. Overall the campaign was extremely successful, not only premium positioning but also in terms of leading sales in the targeted segment (Honda Siel /Ford fiesta/Hyundai Verna).

Insights for Dealer Development Division (DDD) & used car division(TRUE VALUE)

There are two major responsibilities of the DDD division.1. Improving the customer satisfaction of the existing customers through dealer

activities.

2. Enhancing dealer network by analyzing the demographic variables.

Analytical CRM will provide the satisfaction scores (defection scores) upon which there willbe action taken by the relevant division for improving the customer satisfaction measures.This would help the dealers to increase profitability by retaining them. Also, analytical CRM will provide the cluster analysis, upon which the DDD will take action to appoint a new dealer in the city or close down the existing one. The TRUE VALUE division undertakes trade-in activities of any car in the market. Operational CRM will provide recommendations based on the data from DMS or Maruti ecommerce portal of exchange of cars or other sources.

Loyalty card implementation (Auto card)

Maruti Suzuki loyalty card is a unique loyalty reward program designed exclusively for theowners of Maruti cars. The program is loaded with powerful features and offers the customers best services along with exciting rewards and privileges. With this program the customers will not only get reward points on spending but also on the contribution to the ever increasing sales of Maruti cars. Like, whenever the customers recommend his friends or colleagues, he/she would earn reward points which can redeemed while buying any product or service from Maruti. Maruti ties up SBI Bank to penetrate into rural market.MSD CRM 4.0 will helsp the Loyalty program department in tracking the customers and theirpurchase benefits so that it can provide insights and recommendations for one-to-one marketing through SMSs and emails. This would help Maruti retain these customers and offer custom solutions to each customer

Strategic CRM

Strategic CRM framework for Maruti Suzuki

Owners: A successful CRM strategy should create value for not only customers but for alsoinvestors or owners. Its top-down approach. Hence, management commitment is crucial toimplement successfully.

Customers: customers are the major focus of the CRM strategyPartners: partners such as dealers commitment in supporting the data is crucial for success ofthe CRM.

Suppliers: Suppliers (HCL, SAS , Microsoft etc)the success of the CRM strategy largelydepends on the quality of the product chosen and quality of service provided by them andcommitment.

Management: Employees: Key stake holders are employees in this process. There will beresistance for change of existing systems to new CRM strategy. Top management seriousnesswill ensure adaptation of CRM among the employees.

Competitors: competitors practices influence the selection of CRM as it is a competitiveadvantage that it can create over the competitors.

Customers

Owners

Employees Suppliers

Competitors

Partners

Strategic CRM

Philosophical CRM

The following are the Maruti Suzuki’s philosophies for implementing CRM.

To identify customer success factors.

To create customer based culture.

To adopt customer based measures.

To develop end to end process to serve customers with the existing products.

To maintain competitive edge in serving the customer.

The overall activities of CRM division mapping of those of other divisions in Maruti Suzuki is given in the following Table :

Divisions ofMaruti

CRM Division of Maruti Suzuki

AnalyticalCRM

Operational CRM

Strategic CRM

Philosophical CRM

To identify customersuccess factorsTo create customerbased cultureTo adopt customerbased measuresTo develop end to end process to servecustomers with theexisting productsTo maintain competitive edge inserving the customer

Marketing

Cluster analysis,RFM analysis,Clustering

Campaignmanagement

To implement CRM on MicrosoftDynamics CRM 4.0.plotform. Inhousedeveloped andcustomized.

Sales

Need analysis, Lead management,complaintmanagement, salessatisfaction

DealerDevelopment

Clustering Networkenhancement, Newdealer establishment

ServiceCustomerchurning,defection scoring

Complaintmanagement,Customer satisfaction

Sales supportDivision(Used

cars, Auto card,other activities)

Clustering, RFC, Trade-in promotion,Loyalty program

Challenges addressed by MS Dynamics CRM 4.0 at Maruti Suzuki

Create and maintain the platform for reporting & dash-board creation as a BusinessIntelligence initiative to leverage data of over 6 million customers.

Data migration from DMS (Oracle 9i platform to) Microsoft Dynamics CRM 4.0 platform, the two different technologies migrated successfully for the strategic purpose of Maruti Suzuki.

Customer level data-mining for enhanced decision making of stake-holders such as Brand managers, Network development team and used car divisions etc.

Advanced Analytics: Predictive Models for Up-Sell, Cross-Sell and other business problems.

Monitoring of data of the company in terms of sourcing, sufficiency & quality .

It has catered the needs of brand managers for effective campaigning and targeting the right set of customers cost effectively.

The future challenges for Maruti Suzuki’s CRM

There is lot of service campaign budget over spending on huge set of customers. Tooptimize the utilization of service budget using CRM analytics, so that only right set of customers is targeted for campaigning. Hence, fully integrated CRM is the next big challenge.

Holistic integration of CRM with SCM: A holistic integration of CRM systems with SCM systems in preliminary value-add activities represents further evolution in an OEM’s CRM activities.. Car design controlled by demand profiles provides better capacity planning and thereby can help reduce fixed costs. As a result, OEMs considerably improve their variability. To operationalize these strategies, an OEM first needs to have an overview of all internal CRM strategies. OEMs that have already centralized their CRM need to develop an extensive strategy that incorporates customer-specific national and regional CRM solutions. It is anticipated that only concepts that combine realistic goals with positive economic results will succeed.

Helping the dealer better Sales forecasting: currently Maruti dealers are forecasting based on tactical measures. The CRM can be extended to integrate with DMS, there by better accuracy of forecasting of vehicles and thus less inventory costing, in turn, helps increase dealers profitability.

Maruti launched e-commerce portal for used cars trade in recently & integrating the CRM with the e- commerce portal for better insights for the used car business

References:

http://www.marutisuzuki.com/

http://www.marutisuzuki.com/showroom.aspx

http://en.wikipedia.org/wiki/Maruti_Suzuki

www.hcltech.com

www.microsoft.com

Customer relationship management, a database approach, V Kumar, Werner J. Reinartz