Contents

Serial No. Particulars Page No.

01 Acknowledgement 02
02 Company History And 03
Background
03 India Four Wheeler Industry 05
04 Facts about Indian Car 06
Market
05 Market Scenario (2008-09) 08

06 Market Segment Analysis 09

07 Objective of the Company 10
08 Marketing Mix (Product) 11
09 Marketing Mix (Price) 11
10 Marketing Mix (Place) 12
11 Marketing Mix (Promotion) 12
12 SWOT Analysis 13
13 Key Strategic Initiatives By 15
Maruti
14 Factors that influence the 17
consumer’s buying decision
15 Business Environment Factors 18
16 Conclusion 19

1 Paurak R. Shah (NIS Academy, Ahmedabad)

17 Bibliography 20

2 Paurak R. Shah (NIS Academy, Ahmedabad)

 ACKNOWLEDGEMENT

We take this opportunity to convey our sincere thanks and

gratitude to all those who have directly or indirectly helped and
contributed towards the completion of this project.

First and foremost, I would like to thank Ms. Bina Patel , NIS
Academy for his constant guidance and support throughout this
project. During the project, we realized that the degree of
relevance of the marketing strategies being imparted in the
industry is very high. The marketing strategies study enabled
us to get a better understanding of the nitty-gritty of the
company.

We would also like to thank my batch mates for the discussions

that we had with them. All these have resulted in the
enrichment of our knowledge and their inputs have helped us
to incorporate relevant issues into our project.

3 Paurak R. Shah (NIS Academy, Ahmedabad)

 Maruti suzuki India LTD

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. It was established with the objectives of -
modernizing the Indian automobile industry, producing fuel
efficient vehicles to conserve scarce resources and producing
indigenous utility cars for the growing needs of the Indian
population. A license and a Joint Venture agreement were signed
with the Suzuki Motor Company of Japan in Oct 1983, by which
Suzuki acquired 26% of the equity and agreed to provide the
latest technology as well as Japanese management practices.
Suzuki was preferred for the joint venture because of its track
record in manufacturing and selling small cars all over the world.
There was an option in the agreement to raise Suzuki’s equity to
40%, which it exercised in 1987. Five years later, in 1992, Suzuki
further increased its equity to 50% turning Maruti into a non-
government organization managed on the lines of Japanese
management practices.
Maruti created history by going into production in a record 13
months. Maruti is the highest volume car manufacturer in Asia,
outside Japan and Korea, having produced over 5 million vehicles

4 Paurak R. Shah (NIS Academy, Ahmedabad)

by May 2005. Maruti is one of the most successful automobile
joint ventures, and has made profits every year since inception
till 2000-01. In 2000-01, although Maruti generated operating
profits on an income of Rs 92.5 billion, high depreciation on new
model launches resulted in a book loss.

COMPANY HISTORY AND BACKGROUND

The Evolution
Maruti’s history of evolution can be examined in four
phases: two phases during pre-liberalization period (1983-86,
1986-1992) and two phases during post-liberalization period
(1992-97, 1997-2002), followed by the full privatization of Maruti
in June 2003 with the launch of an initial public offering (IPO).The
first phase started when Maruti rolled out its first car in December
1983. During the initial years Maruti had 883 employees, a
capital of Rs. 607 mn and profit of Rs. 17 mn without any tax
obligation. From such a modest start the company in just about a
decade (beginning of second phase in 1992) had turned itself into
an automobile giant capturing about 80% of the market share in
India. Employees grew to 2000 (end of first phase 1986), 3900
(end of second phase 1992) and 5700 in 1999. The profit after
tax increased from Rs 18.67 mn in 1984 to Rs. 6854.54 mn in
1998 but started declining during 1997-2001.
During the pre-liberalization period (1983-1992) a major
source of Maruti’s strength was the wholehearted willingness of
the Government of India to subscribe to Suzuki’s technology and
the principles and practices of Japanese management. Large
5 Paurak R. Shah (NIS Academy, Ahmedabad)
number of Indian managers, supervisors and workers were
regularly sent to the Suzuki plants in Japan for training. Batches
of Japanese personnel came over to Maruti to train, supervise and
manage. Maruti’s style of management was essentially to follow
Japanese management practices.
The Path to Success for Maruti was as follows:
(a) teamwork and recognition that each employee’s future growth
and prosperity is totally dependent on the company’s growth and
prosperity
(b) strict work discipline for individuals and the organization
(c) constant efforts to increase the productivity of labor and
capital
(d) steady improvements in quality and reduction in costs
(e) customer orientation
(f) long-term objectives and policies with the confidence to realize
the goals
(g) respect of law, ethics and human beings. The “path to
success” translated into practices that Maruti’s culture
approximated from the Japanese management practices.

India Four Wheeler Industry

The Four-Wheeler Industry in India has not quite matched up to

the performance of its counterparts in other parts of the world.
The primary reason for this has been the all-pervasive regulatory

6 Paurak R. Shah (NIS Academy, Ahmedabad)

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". Post Liberalization, the car market in India have been in a
burgeoning stage with all types of cars flooding the market in
order to meet the demands of Indian customers who are
increasingly exposed to state of the world automobiles and want
the best when it comes to purchasing a car.

It is expected that by 2030, the Indian car market will be the 3rd
largest car market across the globe. The main encouraging
factors for the success story of the car market in India are the
increase in the opportunity for new investments, the rise in the
GDP rate, the growing per capita income, massive population,
and high ownership capacity. The liberalization policies followed
by the Indian government had been inviting foreign players to
participate in the car market in India. The recent trend within the
new generation to get work in the software based sector has led
to the rise in the income level and change in the lifestyle
significantly, which has further led to the increase in the demand
for luxurious cars among them.

The car Market in India is crowded with all varieties of car models
like the small cars, mid-size cars, luxury cars, super luxury cars,
and sports utility vehicles. Initially the most popular car model
dominating the Car Market in India was the Ambassador, which
however today gave way to numerous new models like Hyundai,
Honda, Mercedes-Benz, BMW, Bentley and many others.
Moreover, there are many other models of cars in the pipeline, to

7 Paurak R. Shah (NIS Academy, Ahmedabad)

be launched in the car market in India. Some of the leading
brands dominating the car market in India at present are
Hindustan Motors, Reva Electric Car Co., Fiat India Private Ltd.,
Daimler Chrysler India Private Ltd, Ford India Ltd., Honda Siel
Cars India Ltd., General Motors India, Hyundai Motors India Ltd.,
Skoda Auto India Private Ltd., and Toyota Kirloskar Motor Ltd.
Since the demand for foreign cars are increasing with time, big
brands like Mercedes Benz, Volkswagen, Aston Martin, Ferrari,
and Rolls-Royce have long since made a foray into the Indian car
market.

Facts about Indian Car Market:

Although the Indian automobile industry has come a long way

since the deregulation in 1993, India does not rank well among its
global peers in many respects, viz., the contribution of the sector
to industrial output, number of cars per person, employment by
the sector as a percentage of industrial employment, number of
months' income required to purchase a car, and penetration of
cars.

Figure:-Passenger vehicle stock per 100 people

India is far behind from other countries with just 6.9 cars per 100
persons, while Unites States has 76.9 cars on per 100 persons.
Among developing countries, Russia also stands ahead than India
and China with 16.3 cars per 100 persons.

8 Paurak R. Shah (NIS Academy, Ahmedabad)

 Two things that stunted growth of the Indian automobile industry
in the past have been low demand and lack of vision on the part
of the original equipment manufacturers (OEMs). However, the
demand has picked up after the liberalization of the regulatory
environment, and
global OEMs who enjoy scale economies both in terms of
manufacturing and research and development (R&D) entered the
Indian market. This has resulted in a significant shift in the way
business is conducted by suppliers, assemblers and marketers.

Vision
The leader in the India Automobile Industry, Creating Customer
Delight and Shareholder’s Wealth; A pride of India”

Mission
To provide maximum value for money to their customers through
continuous improvement of products and services.
Maruti has a network of 391 sales outlets across 230 cities
all over India. The service network covers 1,113 towns and cities,
bolstered by 2,142 authorized service outlets.The company's
change in strategy and emphasis on developing effective
marketing communications was their highlights.

9 Paurak R. Shah (NIS Academy, Ahmedabad)

 MARKET SCENERIO (2008-09)

The company vouches for customer satisfaction. For its

sincere efforts it has been rated (by customers)first in customer
satisfaction among all car makers in India for ten years in a row in
annual survey. Maruti Suzuki India Limited, a subsidiary of Suzuki
Motor Corporation of Japan, has been the leader of the Indian car
market for over two decades.

10 Paurak R. Shah (NIS Academy, Ahmedabad)

 During 2007-08, Maruti Suzuki sold 764,842 cars, of
which 53,024 were exported. In all, over six million Maruti cars
are on Indian roads since the first car was rolled out on 14
December 1983.

Market Segment Analysis

Based on economic strata, the Indian auto consumer
segment can be sub divided in to 5 categories:

➢ Economy
➢ Mid-Range
➢ Luxury
➢ Premium
➢ Super Premium

11 Paurak R. Shah (NIS Academy, Ahmedabad)

 OBJECTIVE OF THE COMPANY

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;
andanticipate
 and address the customer’s needs and preferences

12 Paurak R. Shah (NIS Academy, Ahmedabad)

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.
GRADE CAR
A Maruti 800
A OMNI
B Zen
B Wagon R
B Alto
C Esteem
C Baleno
C Versa
C SWIFT
Utility Vehicle GYPSY KING
Utility Vehicle GRAND VITARA

13 Paurak R. Shah (NIS Academy, Ahmedabad)

 4Ps:-
 Product
 Price
 Place
 Promotion
Product Strategy:-
 Portfolio of 12 products
 Five product lines
Product Line Products
A1 800
A2 Alto, Zen ,Wagon –R, Swift, A-
star
A3 D ZiRE, Sx4
SUV Vitara, Gypsy
C - Class Omni, Versa

Price Strategy:-

The price of the Maruti car is between Rs. 210000 to Rs.

1500000. Maruti – 800 is the lowest price car of this company.

14 Paurak R. Shah (NIS Academy, Ahmedabad)

Alto, Omni, Wagon R, are also the low price car of the company,
Zen & Esteem are the mid price car of the company. But Grand
Vitara is the high price model of the company. The price of car is
decided according to its product variety, quality, design etc.

Place strategy:-
600 New car sales outlets covering 393 cities.
265 ‘Maruti True Value’ outlets spread across 166 cities.
2628 Maruti Authorized Service Stations, covering 1220 cities.
Tie up with Adani group for exporting 200,000 units through
Mnudra port Gujarat
Suggested Place strategy:-
400 new car sales outlets in next three years.
S150 new true value shops in next three years.
1200 new Maruti Authorized Service Stations in next three years.
Tie up with other distributors for Exports.

Promotion Strategy:-
 Advertising
♦ TV Ads
♦ Print Ads
♦ Radio Ads
“Ghar Aa Gaya Hindustan”
“India Comes Home in Maruti Suzuki.”

15 Paurak R. Shah (NIS Academy, Ahmedabad)

 Information Advertising, alternative Advertising Options
 BTL - Sponsorships
 TV shows - India’s Got talent
 Place Advertising – Bill boards
 Sales Promotions
 Product warranties
 Premiums (gifts)
 Trade shows
 2,628The number of workshops that provide customers with
maintenance support in 1220 cities.
SWOT Analysis
STRENGTHS
1. Bigger name in the market.
2. Established distribution & after sales
network.
3. Understanding of the Indian market.
4. Ability to design product with differentiating
features.
5. Brand Image.
6. Experience & Knowledge how in technology.
7. Trust of People.
8. Maruti Udyog Ltd. is the market leader for
more than decade.
9.Has a great dealership chain in the market.
10. Better after sales service.
11. Low maintenance cost of vehicle.

16 Paurak R. Shah (NIS Academy, Ahmedabad)

WEAKNESSES
1.Lack of experience in foreign market.
2.Comparatively new to diesel cars.
3.People resistant to upper segment models.
4.Heavy import tariff on fully built imported
models.
5.Exports are not that good.
6. Lesser diesel models in the market compare
to others.
7. Global image is not that big.

OPPURTUNITIES
1.Increased purchasing power of Indian middle
class family.
2.Government subsidies.
3.Tax Benefits.
4.Prospective buyers from two – wheeler
segment.
5. Great opportunities to go global with success
of Swift and SX4 allover.
6. Introduction of more diesel models. The
diesel car segment is growing.
17 Paurak R. Shah (NIS Academy, Ahmedabad)
 7. Opportunity to grow bigger by entering into
bigger car markets.
8. Already a market leader so great opportunity
to be the king of market in every stage of
industry.

THREATS
1. Foreign companies entering market; so a
bigger threat from MNCs.
2.Competition from second hand cars & TATA
Nano.
3.Threats from Chinese manufactures.
4.To the market share, as many big names are
coming in the industry
5.There is hardly any diesel models
6. Rs. 1 lakh – Rs. 1.5 lakh car

18 Paurak R. Shah (NIS Academy, Ahmedabad)

Strategy
Their strategy is to capture the rural market by employing women
who belong to their local community through which their product
can reach to local consumers. Their strategy is to provide work
for women to create awareness among confined consumers

Process
They started with Project Shakti in which their basic
aim is to educate a rural person about their products through
women who belongs to their own local community and who can
communicate well in their language with them. In this way many
educated women get work in rural sector and on the other hand
HLL Corporate Social Responsibility (CSR) also increases towards
society by introducing educative programs for the benefit of the
rural sector

KEY STRATEGIC INITIATIVES BY MARUTI

A) TURNAROUND STRATEGIES MARUTI FOLLOWED

Maruti was the undisputed leader in the automobile utility-car
segment sector, controlling about 84% of the market till 1998.
With increasing competition from local players like Telco,
Hindustan Motors, Mahindra & Mahindra and foreign players like
Daewoo, PAL, Toyota, Ford, Mitsubishi, GM, the whole auto
industry structure in India has changed in the last seven years
and resulted in the declining profits and market share for Maruti.
At the same time the Indian government permitted foreign car

19 Paurak R. Shah (NIS Academy, Ahmedabad)

producers to invest in the automobile sector and hold majority
stakes.

In the wake of its diminishing profits and loss of market share,

Maruti initiated strategic responses to cope with India’s
liberalization process and began to redesign itself to face
competition in the Indian market. Consultancy firms such as AT
Kearney & McKinsey, together with an internationally reputed OD
consultant, Dr. Athreya, have been consulted on modes of
strategy and organization development during the redesign
process. The redesign process saw Maruti complete a Rs. 4000
mn expansion project which increased the total production
capacity to over 3,70,000 vehicles per annum. Maruti executed a
plan to launch new models for different segments of the market.
In its redesign plan, Maruti, launches a new model every year,
reduce production costs by achieving 85-90% indigenization for
new models, revamp marketing by increasing the dealer network
from 150 to 300 and focus on bulk institutional sales, bring down
number of vendors and introduce competitive bidding. Together
with the redesign plan, there has been a shift in business focus of
Maruti. When Maruti commanded the largest market share,
business focus was to “sell what we produce”. The earlier focus of
the whole organization was "production, production and
production" but now the focus has shifted to "marketing and
customer focus". This can be observed from the changes in
mission statement of the organization:

1984: "Fuel efficient vehicle with latest technology".

1987: "Leader in domestic market and be among global players in
the overseas market".
1997: "Creating customer delight and shareholders wealth".
20 Paurak R. Shah (NIS Academy, Ahmedabad)
B) CURRENT STRATEGIES FOLLOWED BY MUL

PRICING STRATEGY - CATERING TO ALL SEGMENTS

Maruti caters to all segment and has a product offering at all price
points. It has a car priced at Rs.1,87,000.00 which is the lowest
offer on road. Maruti gets 70% business from repeat buyers who
earlier had owned a Maruti car. Their pricing strategy is to provide
an option to every customer looking for up gradation in his car.
Their sole motive of having so many product offering is to be in
the consideration set of every passenger car customer in India.
Here is how every price point is covered.

Factors that influence the consumer’s buying

decision for the product
Cultural

Social

Culture Reference group Personal

Subculture Family
Age and life-cycle stage Psychological
Social Class Roles and statuses
Occupation
Motivation
Economic
Perception
circumstances
Learning Buyer
Lifestyle
Beliefs and attitudes
Personality and self-
concept

A.Cultural Factors
• Value, perception, and preferences
• Nationalities, religion, race, geographical regions
• Social class
21 Paurak R. Shah (NIS Academy, Ahmedabad)
A.Social Factors
• Reference Groups
• Social Class

• Roles & Status

A.Personal Factors
• Economics Circumstances
• Occupation
• Age & Life Cycle Stage
• Lifestyle
• Personality and self-concept
A.Psychological Factors
• Motivation
• Perception
• Learning
• Beliefs and attitudes
Business Environment Factors

Political Factors:-
1. Government continuously slashing tax rates.
2. Government has launched automotive mission plan (AMP).
3. Automatic approval for FDI in automobile sector.
Economic Factors:-
1. Stable economic policies.
2. Easy availability of finance.
3. Economics incentives by local state Government.
4. Lower duties & taxes.
5. Huge domestic demand.

22 Paurak R. Shah (NIS Academy, Ahmedabad)

 Social Factors:-
1. Lucrative market in rural India.
2. Rapid urbanization and income levels.
3. Skilled labour costs amongst the lowest in world.
Technological Factors:-
1. Four Lakhs pass out every year.
2. Credible local suppliers of high quality components.
3. India emerging as an automobile hub for automobile
manufacturing & research.
Ecological Factors:-
1. India automotive regulations are closely aligned to world
standards on emission & safety.
2. Proximity to major export market.
Legal Factors:-
1. Weighted tax deduction up to 150% on in house R & D activities.
2. Relatively High import Duties

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

23 Paurak R. Shah (NIS Academy, Ahmedabad)

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 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.

Bibliography
BOOKS
24 Paurak R. Shah (NIS Academy, Ahmedabad)
 ➢ PGDAM (Post Graduate Diploma in Applied Management) Book - Semester 1
(Courseware 3)

NEWS PAPERS

➢ THE ECONOMIC TIMES

➢ THE TIMES OF INDIA

MAGAZINES

➢ BUSINESS INDIA
➢ INDIA TODAY

INTERNET WEBSITES

➢ www.google.com
➢ www.marutisuzuki.com

25 Paurak R. Shah (NIS Academy, Ahmedabad)