MARKETING STRATEGIES OF MARUTI SUZUKI

1

ACKNOWLEDGEMENT

I would like to express gratitude to those who have extended their support and without

whom the project would never have come into existence.

I am extremely to IIPM, New Delhi for providing me an opportunity to work on this

thesis as a part of the curriculum.

Also, I express my gratitude to Mr. Amit Choudhary, Manager at Tractel Tirfor India Pvt

Ltd. for his valuable insights and helping me with the successful completion of the

project.

2

CONTENT

1. EXECUTIVE SUMMARY.....................................................................................

2. INTRODUCTION ................................................................................................1

3. COMPANY PROFILE........................................................................................15

4. RESEARCH OBJECTIVE AND METHODOLOGY........................................28

5. LITERATURE REVIEW....................................................................................29

6. PRIMARY FINDING AND ANALYSIS...........................................................48

7. RECOMMENDATION.......................................................................................64

8. CONCLUSION...................................................................................................65

9. BIBLIOGRAPHY...............................................................................................69

10. COPY OF THE QUESTIONNAIRE..................................................................71

3

EXECUTIVE SUMMARY

Marketing is an important aspect of promoting almost any product, service or brand.

Most of the dictionaries also refer to marketing as,

An activity that involves the public promotion of goods and services, or a brand

or a company or an establishment

A business of drawing public attention to goods and services and their merits

A process that calls attention to a particular good or service

A process that makes publicity for a said subject (such as a good, service, product,

brand, person, establishment, company or firm)

Thus, from the above definition it can be concluded that marketing is a task that involves

making the public aware and conscious about the subject that is being sold. Neo-classical

economists and modern economists often criticize marketing by calling it a profession

that creates awareness about a product in the consumer's brain, which eventually leads to

a craving to own that product. This continual process eventually leads to increasing

demand and eventual scarcity of resources.

4

1. INTRODUCTION

Indian Automotive Sector:

The automobile sector is a key player in the global and Indian economy. The global

motor vehicle industry (four-wheelers) contributes 5 per cent directly to the total

manufacturing employment, 12.9 per cent to the total manufacturing production value

and 8.3 per cent to the total industrial investment. It also contributes US$560 billion to

the public revenue of different countries, in terms of taxes on fuel, circulation, sales and

registration. The annual turnover of the global auto industry is around US$5.09 trillion,

which is equivalent to the sixth largest economy in the world. In addition, the auto

industry is linked with several other sectors in the economy and hence its indirect

contribution is much higher than this. All over the world it has been treated as a leading

economic sector because of its extensive economic linkages. India’s manufacture of 7.9

million vehicles, including 1.3 million passenger cars, amounted to 2.4 per cent and 7 per

cent, respectively, of global production in number. The auto-components manufacturing

sector is another key player in the Indian automotive industry. Exports from India in this

sector rose from US$1.0 billion in 2009-10 to US$1.8 billion in 2010-11, contributing 1

per cent to the world trade in auto components in current USD. In India, the automobile

industry provides direct employment to about 5 lakh persons. It contributes 4.7 per cent

to India’s GDP and 19 per cent to India’s indirect tax revenue. Till early 1980s, there

were very few players in the Indian auto sector, which was suffering from low volumes

of production, obsolete and substandard technologies. With de-licensing in the 1980s and

opening up of this sector to FDI in 1993, the sector has grown rapidly due to the entry of

global players. A rapidly growing middle class, rising per capita incomes and relatively

easier availability of finance have been driving the vehicle demand in India, which in

turn, has prompted the government to invest at unprecedented levels in roads

infrastructure, including projects such as Golden Quadrilateral and North-East-South-

West Corridor with feeder roads. The Reserve Bank of India’s (RBI) Annual Policy

Statement documents an annual growth of 37.9 per cent in credit flow to vehicles

industry in 2009. Given that passenger car penetration rate is just about 8.5 vehicles per

5

thousand, which is among the lowest in the world, there is a huge potential demand for

automobiles in the country.

Policy Environment and Evolution of Indian Auto Industry:

The policy framework of India’s automobile industry and its impact on its growth While

the ties between bureaucrats and the managers of state-owned enterprises played a

positive role especially since the late 1980s, ties between politicians and industrialists and

between politicians and labour leaders have impeded the growth. The first phase of 1940s

and 1950s was characterized by socialist ideology and vested interests, resulting in

protection to the domestic auto industry and entry barriers for foreign firms. There was a

good relationship between politicians and industrialists in this phase, but bureaucrats

played little role. Development of ancillaries segment as recommended by the L.K. Jha

Committee report in 1960 was a major event that took place towards the end of this

phase. During the second phase of rules, regulations and politics, many political

developments and economic problems affected the auto industry, especially passenger

cars segment, in the 1960s and 1970s. De-licensing, liberalization and opening

characterized the third phase starting in the early 1980s leading to opening up of FDI in

the auto sector. These policies resulted in the establishment of new LCV manufacturers

(for example, Swaraj Mazda, DCM Toyota) and passenger car manufacturers. All these

developments led to structural changes in the Indian auto industry. Pingle argues that

state intervention and ownership need not imply poor results and performance, as

demonstrated by Maruti Udyog Limited (MUL). Further, the non-contractual relations

between bureaucrats and MUL dictated most of the policies in the 1980s, which were

biased towards passenger cars and MUL in particular. However, D’Costa (2002) argues

that MUL’s success is not particularly attributable to the support from bureaucrats.

Rather, any firm that is as good as MUL in terms of scale economies, first-comer

advantage, affordability, product novelty, consumer choice, financing schemes and

extensive servicing networks would have performed as well, even in the absence of

bureaucratic support. D’Costa has other criticisms about Pingle (2000). The major

shortcoming of Pingle’s study is that it ignores the issues related to sector specific

technologies and regional differences across the country.

6

Productivity:

The performance of the Indian auto industry with respect to the productivity growth

Partial and total factor productivity of the Indian automobile industry have been

calculated for the period from 1990-91 to 2010-11, using the Divisia-Tornquist index for

the estimation of the total factor productivity growth. The author finds that the domestic

auto industry has registered a negative and insignificant productivity growth during the

last one and a half decade. Among the partial factor productivity indices only labour

productivity has seen a significant improvement, while the productivity of other three

inputs (capital, energy and materials) haven’t shown any significant improvement.

Labour productivity has increased mainly due to the increase in the capital intensity,

which has grown at a rate of 0.14 per cent per annum from 1990-91 to 2010-11.

Organized Auto Sector in India:

While the Original Equipment Manufacturers (OEMs) are at the top of the auto supply

chain, it should be noted that there are a few OEMs in India who supply some

components to other OEMs in India or abroad. Most of the Indian OEMs are members of

the Society of Indian Automobile Manufacturers (SIAM), while most of the Tier-1 auto

component manufacturers are members of the Automobile Component Manufacturers’

Association (ACMA). All of them are in the organized sector and supply directly to the

OEMs in India and abroad or to Tier-1 players abroad. Tier-2 and Tier-3 auto-component

manufacturers are relatively smaller players. Though some of the Tier-2 players are in the

organized sector, most of them are in the unorganized sector. Tier-3 manufacturers

include all auto-component suppliers in the unorganized sector, including some Own

Account Manufacturing Enterprises (OAMEs) that operate with one working owner and

his family members, wherein manufacturing involves use of a single machine such as the

lathe. Auto-component manufacturers cater not only to the OEMs, but also to the after-

sales market. In the recent years, there has been a rapid transformation in the character of

the automotive aftermarket, as a fast maturing organized, skill-intensive and knowledge

driven activity. Hence, the auto industry in India possesses a very diverse and complex

structure, in terms of scale, nature of operation, market structure, etc.

7

Unorganized Auto Sector in India:

The unorganized sector consists of enterprises that are not registered under certain

sections of the Factories Act.20 In this section, data on the unorganized manufacturing

sector from the National Sample Survey Organization (NSSO) is used. The unorganized

auto sector in India has grown in terms of number of enterprises, employment, output,

capital, capital intensity and labour productivity. However, capital productivity has fallen

considerably. Very similar trends are observed in OAME, NDME and DME21 in rural

and urban areas. However, it is evident that the growth of this sector has been quite low

in the rural areas than in the urban areas.

Automobiles - Domestic Performance:

The production and domestic sales of the automobiles in India have been growing

strongly. While production increased from 4.8 million units in 2002-07 to 8.5 million

units in 2009-10 (a CAGR of over 15 per cent), domestic sales during the same period

have gone up from 4.6 million to 7.9 million units (CAGR 14.2 per cent).

8

A positive trend in the domestic market is that the growth has not been driven by one or

two segments, but is consistent across all key segments. Two wheelers, which constitute

the majority of the industry volume, have been growing at a rate of 14.3 per cent, three

wheelers at a rate of 14 per cent and passenger vehicles at a rate of 11.3 per cent.

Commercial vehicles have been growing at a higher rate of nearly 23.5 per cent, although

from a lower base. Since nearly all macro-economic indicators – GDP, infrastructure,

population demographics, interest rates, etc. – are showing a favorable trend, the

domestic market for automobiles in India is expected to continue on its growth trajectory.

Commercial Vehicles:

The commercial vehicle production in India increased from 156,706 in 2007 to 350,033

in 2010.

This segment can be divided into three categories – heavy commercial vehicles (HCVs),

medium commercial vehicles (MDVs or MCVs) and light commercial vehicles (LCVs).

Medium and heavy commercial vehicles formed about 62 per cent of the total domestic

sales of CVs in 2004. These segments have also been driving growth, having grown at a

9

CAGR of nearly 24.7 per cent over the past five years. The key trends facilitating growth

in this sector are the development of ports and highways, increase in construction

activities and agricultural output. With better roads and highway corridors linking major

cities, the demand for larger, multi-axle trucks is increasing in India.

10

Passenger Vehicles:

Passenger vehicles consist of passenger cars and utility vehicles. This segment has been

growing at a CAGR of 11.3 per cent for the past four years. A key trend in this segment

is the rising income levels and availability of better financing options due to which

customers are increasingly aspiring for higher-end models. There has been a gradual shift

from entry-level models to higher-end models in each segment. For example, in

passenger cars, till recently, the Maruti 800 used to define the entry-level car, and had a

predominant market share. Over the last 3-4 years, higher-end models such as Hyundai

Santro, Maruti Wagon R, Alto and Tata Indica have overtaken the Maruti 800. Another

development has been the blurring of the dividing line between utility vehicles and

passenger cars, with models like Mahindra & Mahindra’s Scorpio attracting customers

from both segments. Upper end sports utility vehicles (SUVs) attract potential luxury car

buyers by offering the same level of comfort in the interiors, coupled with on-road

performance capability.

11

Exports of automobiles from India are booming:

While the domestic sales of automobiles have been increasing at a significant rate,

exports have taken a quantum leap in recent years. The exports of automobiles from India

have been growing at a CAGR of 39 per cent for the past four years.

Exports growth has been spearheaded by the passenger vehicle segment, which has

grown at a rate of 57.4 per cent. As a result, the share of passenger vehicles in overall

vehicle exports has increased firm 18 per cent in 2001-02 to 26 per cent in 2010-11.

Europe is the biggest importer of cars from the country while predominantly African

nations import buses and trucks. The Association of South East Asian Nations (ASEAN)

region is the prime destination for Indian two wheelers.

12

Competitive Advantages:

India has several competitive advantages in the automobile sector, which have been

analyzed using the following framework. Availability of skilled manpower with

engineering and design capabilities India has a growing workforce that is English-

speaking, highly skilled and trained in designing and machining skills required by the

automotive and engineering industries. In a combined assessment of manpower

availability and capabilities, India ranks much ahead of other competing economies.

13

Many Indian and global players are leveraging this advantage by increasingly

outsourcing activities like design and R&D to their Indian arms. The Society of Indian

Automobile manufacturers (SIAM) estimates that automotive vehicle manufacturers are

expected to invest US$ 5.7 billion in the Indian market from 2005 to 2010. Of this, about

US$ 2.3 billion will be on research and development and the rest probably on capex.

Some examples of investment in areas leveraging the engineering and design capabilities

of India include:

MICO, the Indian operation of Bosch and a key player in fuel injection

equipment, ignition systems and electrical systems, has invested in the MICO

Application Centre (MAC) for R&D. It has emerged as a key global R&D

competency centre catering to the entire Bosch Group. It is the first of its kind in

India and the Bosch Group’s first outside Europe.

GM set up a technical centre at Bangalore that became fully operational in

September 2003. The centre focuses on both R&D and engineering, and takes up

high-value work to complement current research programs, as well as new

exploratory research projects.

Competitive industry, with global players:

14

The Indian automobile industry is highly competitive with a large number of players in

each industry segment. Most of the global majors are present in the passenger vehicle and

two wheeler segments. In the components industry too, global players such as Visteon,

Delphi and Bosch are well established, competing with domestic players. The presence of

global competition has led to an overall increase in capabilities of the Indian auto sector.

Increase in competition has led to a pressure on margins, and players have become

increasingly cost efficient. Quality levels have gone up, and there is an increasing focus

on compliance to TPM, TQM and Six Sigma processes. This has led to an increased

confidence among domestic players, who are now focusing on opportunities abroad. Key

players in the components sector like Bharat Forge and Sundaram Fasteners have become

key global suppliers in their categories.

Large market with significant potential for growth in demand:

India offers a huge growth opportunity for the automobile sector – the domestic market is

large and has the potential to grow further in the future due to positive demographic

trends and the current low penetration levels.

Government Regulations and Support:

The Government of India (GoI) has identified the automotive sector as a key focus area

for improving India’s global competitiveness and achieving high economic growth. The

15

Government formulated the Auto Policy for India with a vision to establish a globally

competitive industry in India and to double its contribution to the economy by 2010. It

intends to promote Research & Development in automotive industry by strengthening the

efforts of industry in this direction by providing suitable fiscal and financial incentives.

Some of the policy initiatives include:

Automatic approval for foreign equity investment of up-to 100 per cent of

manufacture of automobiles and component is permitted.

The customs duty on inputs and raw materials has been reduced from 20 per cent

to 15 per cent. The peak rate of customs duty on parts and components of battery-

operated vehicles have been reduced from 20 per cent to 10 per cent. These new

regulations would strengthen India’s commitment to globalization. Apart from

this, custom duty has been reduced from 105 per cent to 100 per cent on second

hand cars and motorcycles.

National Automotive Fuel Policy has been announced, which envisages a phased

program for introducing Euro emission and fuel regulations by 2010.

Tractors of engine capacity more than 1800 cc for semi-trailers will now attract

excise duty at the rate of 16 per cent.

Excise duty is being reduced on tires, tubes and flaps from 24 per cent to 16 per

cent. Customs duty on lead is 5 per cent.

A package of fiscal incentives including benefits of double taxation treaty is now

available.

These government policies reflect the priority government accords to the automobile

sector. A liberalized overall policy regime, with specific incentives, provides a very

conducive environment for investments and exports in the sector.

The outlook for India’s automotive sector appears bright:

The outlook for India’s automotive sector is highly promising. In view of current growth

trends and prospect of continuous economic growth of over 5 per cent, all segments of

the auto industry are likely to see continued growth. Large infrastructure development

projects underway in India combined with favorable government policies will also drive

16

automotive growth in the next few years. Easy availability of finance and moderate cost

of financing facilitated by double income families will drive sales in the next few years.

India is also emerging as an outsourcing hub for global majors. Companies like GM,

Ford, Toyota and Hyundai have implemented their expansion plan this year. While Ford

and Toyota continue to leverage India as a source of components, Hyundai and Suzuki

have identified India as a global source for specific small car models. At the same time,

Indian players are likely to increasingly venture overseas, both for organic growth as well

as acquisitions. The automotive sector in India is poised to become significant, both in

the domestic market as well as globally.

Determinants of market share of automobile industry:

Costs: sales ratio has a significant positive impact on market share. This could be

attributable to the fact that firms that manufacture high-value items are likely to

have a higher market share, since their sales, in value terms, could be higher than

others.

Emolument share has a negative effect on market share, showing that labour cost

constraints can distort a firm’s competitiveness.

Export: sales ratio has a significant positive effect on market share, implying that

export-oriented firms are more competitive, perhaps because of their versatility

and other merits that are required for catering to international markets.

Power/fuel cost share has a significant negative effect on market share, implying

that efficient technologies may go a long way in improving the firm’s

competitiveness.

Imported material expense’s share in total material expenses has a negative

significant impact on market share, indicating that import of auto-components

from abroad does not guarantee competitiveness of the firms, unless it is an item

that is unavailable in Indian industry

Borrowings’ share in total investments and interest’s share in total costs have

negative significant effect on market-share, which means that too much

dependence on credit may adversely affect a firm’s competitiveness. This also

calls for improvements in credit system and its cost in India.

17

Inventory cost share significantly distorts competitiveness, and hence, firms

following lean manufacturing are more likely to be competitive than others.

Share of imported know-how expenses in overall enhances competitiveness, and

hence, firms could aggressively go for importing know-how that is required for

various aspects of production, so as to be more competitive.

Advertising costs as a share of total costs, has a significant negative effect on

market share, implying that unless the structural factors such as price and quality

are good, mere propaganda by advertising may in fact turn harmful for market

share.

2. COMPANY PROFILE

Maruti Suzuki India Limited:

Maruti Suzuki India Limited (MSIL, formerly known as Maruti Udyog Limited) is a

subsidiary of Suzuki Motor Corporation, Japan. MSIL has been the leader of the Indian

car market for over two and a half decades. The company has two manufacturing

18

facilities located at Gurgaon and Manesar, south of New Delhi, India. Both the facilities

have a combined capability to produce over a 1.2 million (1,200,000) vehicles annually. 

The company plans to expand its manufacturing capacity to 1.75 million by 2013.  The

company offers a wide range of cars across different segments. It offers 15 brands and

over 150 variants - Maruti 800, people movers, Omni and Eeco, international brands

Alto, Alto-K10, A-star, WagonR, Swift, Ritz and Estilo, off-roader Gypsy, SUV Grand

Vitara, sedans SX4, Swift DZire and Kizashi. In an environment friendly initiative, in

August 2010 Maruti Suzuki introduced factory fitted CNG option on 5 models across

vehicle segments.

These include Eeco, Alto, Estilo, Wagon R and Sx4. In fiscal 2009-10 Maruti Suzuki

became the only Indian company to manufacture and sell One Million cars in a

year. Maruti Suzuki has employee strength over 8,500 (as at end March 2011) In 2010-11

the company sold over 1.27 million vehicles including 1,38,266 units of exports. With

this, at the end of March 2011, Maruti Suzuki had a market share of 44.9 per cent of the

Indian passenger car market. Maruti Suzuki's revenue has grown consistently over the

years.

Profile:

Maruti Suzuki is India and Nepal's number one leading automobile manufacturer and the

market leader in the car segment, both in terms of volume of vehicles sold and revenue

earned. Until recently, the Indian government owned 18.28% of the company and 54.2%

by Suzuki of Japan. The BJP-led government held aninitial public offering of 25% of the

19

company in June 2003. As of 10 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

Suzuki cars are sold in India and several other countries, depending upon export orders.

Models similar to Maruti Suzuki’s (but not manufactured by Maruti Udyog) are sold

by Suzuki and manufactured in Pakistan and other South Asian countries. The company

exports more than 50,000 cars annually and has an extremely large domestic market in

India selling over 730,000 cars annually. Maruti 800, till 2004, was the India's largest

selling compact car ever since it was launched in 1983. More than a million units of this

car have been sold worldwide so far. Currently, Maruti Suzuki Alto tops the sales charts.

Due to the large number of Maruti 800s sold in the Indian market, the term "Maruti" is

commonly used to refer to this compact car model. Its manufacturing facilities are located

at two facilities Gurgaon and Manesar south of Delhi. Maruti Suzuki’s Gurgaon facility

has an installed capacity of 350,000 units per annum. The Manesar facilities, launched in

February 2007 comprise a vehicle assembly plant with a capacity of 100,000 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 700,000 units annually. More than half the cars sold in India are Maruti Suzuki cars.

The company is a subsidiary of Suzuki Motor Corporation, Japan, which owns 54.2 per

cent of Maruti Suzuki. Public and financial institutions own rest of company’s shares. It

is listed on the Bombay Stock Exchange and National Stock Exchange in India.

During 2007-08, 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 14 models, Maruti 800, Alto,  WagonR, 

Estilo, A-star, Ritz, Swift, Swift DZire, SX4, Omni, Eeco, Gypsy, Grand Vitara, Kizashi.

Swift, Swift DZire, A-star and SX4 are manufactured in Manesar, Grand Vitara and

Kizashi are imported from Japan as completely built units (CBU), remaining all models

20

are manufactured in Maruti Suzuki's Gurgaon Plant. Suzuki Motor Corporation, the

parent company, is a global leader in mini and compact cars for three decades. Suzuki’s

technical superiority lies in its ability to pack power and performance into a compact,

lightweight engine that is clean and fuel-efficient. Nearly 75,000 people are employed

directly by Maruti Suzuki and its partners. It has been rated first in customer satisfaction

among all car manufacturers in India from 1999 to 2009 by J D Power Asia Pacific.

21

Company at a glance:

Vision and Core values:

22

Manufacturing Excellence:

Maruti Suzuki’s Million:

Maruti began it’s operations way back in 1983, with the Maruti 800 - the vehicle which

brought about a revolution in the Indian car market.  Today, one in every two cars in

India is a product of Maruti Suzuki. Their scale and manufacturing complexity have

today moved to a different league from when it began. We have reached a capacity of one

million cars annual production this year. This feat is entirely based on the company's

constant endeavor to meet aspirations of a large and diverse demography, by providing

the best through innovative products and services. Today, each car from the Maruti

Suzuki factories at Gurgaon, and Manesar, Haryana, North India are the tangible

evidence of quality, manufacturing standards and efficiency.

Industrial Relation:

23

For most of its history, Maruti Udyog Limited had relatively few problems with its labour

force. Its emphasis was on the Japanese work culture and the modern manufacturing

process, first instituted in Japan in the 1970s. But with the change in management in

1997, when it became predominantly government controlled for a while, and the conflict

between the United Front Government and Suzuki may have been the cause of unrest

among employees. A major row broke out in September 2000 when employees of Maruti

Udyog Ltd (MUL) went on an indefinite strike, demanding among other things, revision

of the incentive scheme offered and implementation of a pension scheme.

Employees struck work for six hours in October 2000, irked over the suspension of nine

employees, going on a six-hour tools-down strike at its Gurgaon plant, demanding

revision of the incentive-linked pay and threatened to fast to death if the suspended

employees were not reinstated. About this time, the NDA government, following a

disinvestments policy, proposed to sell part of its stake in Maruti Suzuki in a public

offering. The Staff union opposed this sell-off plan on the grounds that the company will

lose a major business advantage of being subsidized by the Government.

The standoff with the management continued to December with a proposal by the

management to end the two-month long agitation rejected with a demand for

reinstatement of 92 dismissed workers, with four MUL employees going on a fast-unto-

death. In December the company's shareholders met in New Delhi in an AGM that lasted

30 minutes. At the same time around 1500 plant workers from the MUL's Gurgaon

facility were agitating outside the company's corporate office demanding commencement

of production linked incentives, a better pension scheme and other benefits. The

management has refused to pass on the benefits citing increased competition and lower

margins.

24

Product Portfolio:

PRICING STRATEGY

The price is the amount a customer pays for the product. It is fixed after considering

various factors such as market share, competition, material costs, product identity and the

customer's perceived value of the product. The business may increase or decrease the

price of product if other stores have the same product. The price decision is very sensitive

and for that special care is to be taken to get the competitive edge. There are various

factors to determine a price of a car, such as market condition, cost incurred to build a

car, profit by company, dealer profit. The company’s pricing strategies are such that

every customer can own a car or upgrade to another one of his or her choice. The

company offered a different model at a price difference of around 10,000. It follows a

price-point-strategy wherein they have products available in almost all possible price

points.

25

DISTRIBUTION STRATEGY

Distribution strategy of a firm is a plan created by the management of a manufacturing

business that specifies how the firm wishes to transfer its products to intermediaries,

retailers and end consumers. Maruti Suzuki has two manufacturing facilities in India.

Both manufacturing facilities have a combined production capacity of 14,50,000 vehicles

annually. Maruti has a strong dealer network. Infact it was one of the very first

companies in the country to understand the importance of after sales service in high

involvement products like cars. It has the largest distribution & Service network

comprising of over 400 sales showrooms, over 600 dealer workshops, and 1900

Authorized Service Stations spanning across over 1190 cities unparalleled in the country.

It has 30 Express Service Stations on 30 National Highways across 1,314 cities in India.

Most of the service stations are managed on franchise basis where Maruti trains the local

staff. To increase their reach to rural India, where setting up a complete dealership was

very difficult, they opened extension counters which are operated by some dealer in the

city thereby ensuring increased customer touch points without risking the viability of the

dealers.

Table : Network Details

26

BRAND POSITIONING STRATEGY OF MARUTI SUZUKI INDIA LIMITED

Brand Positioning is the most vital concept in a brand’s strategy. Brand Positioning is

also linked with managing a brand’s meaning. Today several brand of cars are

positioning themselves on the features like Price, Comfort dimensions, Safety, Mileage

etc. Currently Maruti Suzuki followed a very effective multi-segmentation strategy to

grab the different segments of the market with different versions of its brands. About

brand positioning Mayank Pareek says that, Maruti Suzuki believe in research and before

launching a product the Maruti team does an extensive research on the needs of the

customer. Maruti try to understand the customer’s demography and psychology to

position a brand. Also the company follows the suggestions made by existing customers.

1. Maruti 800

Considering the middle class & small families the Maruti 800 was launched. The car was

also targeted at the urban professionals. It was projected as a car with minimum

maintenance needs and with greater fuel efficiency. Later the company added some

features like MPFI (Multi Point Fuel Injection) technology & few changes in front grill,

head light, and rear light.

2. Omni:

Earlier the Omni was known as Van. The van was targeted more at businessman, tourist

taxis and large families. It was positioned as a vehicle offering benefits of a car with

more space. But due to some different perceptions of consumers regarding van, after

some time the van was renamed as Omni and was repositioned as the most spacious car.

Recently Maruti Suzuki launched new variant called Omni Cargo which has been

positioned as a vehicle for transporting cargo and meant for small traders.

27

3. Alto:

Maruti launched Alto with tagline ‘Let’s Go’. In the TVC of Alto, a young married

couple goes to different destinations in their Alto. By this TVC Maruti positioned Alto as

a car for young people. Also the car has highlighted as fuel efficient car.

4. Wagon R:

Maruti Suzuki launched the Wagon R brand in February 2000. This is one of the

successful brand from Maruti portfolio in the premium segment of compact cars. Wagon

R was initially positioned on the basis of the functionality platform. Earlier this car was

promoted as a family car with the baseline, ‘Feel at Home’. Then as per the changing

pattern of market, competition and customers Maruti

altered the positioning of Wagon R from Feel at Home to ‘Inspired Engineering’ to “As

Interesting as you are” and finally to “For a Smarter Race”.

5. A-Star:

While speaking about A-Star Mr. Shashank Srivastav says that the A-Star was the only

car in the Indian market that was targeted at the urban youth. “It is about the new

generation of Indians who are confident”.

28

Market Share over the years:

29

Customer Satisfaction:

Eight New Models in 40 Months:

30

Industry Growth Passenger Cars:

3. RESEARCH OBJECTIVES AND METHODOLOGY

Research Objective:

31

To identify the marketing strategy of Maruti Suzuki

To analyze the effectiveness of marketing strategy of Maruti Suzuki

To assess the customer perception about marketing strategy of Maruti Suzuki

To recommend the best ways of marketing for Maruti Suzuki

Research Methodology:

The main objective of my study basically gives an understanding about the marketing

strategies of Maruti Suzuki. I also studied different theories and concepts based on

marketing. I also tried to evaluate the marketing activities on the basis of sales. The

project is based on both secondary and primary data. Collection of data is from different

sources i.e. Websites, Journals, Magazines, Newspapers and concerned people.

Primary Data:

Primary data has been collected through a questionnaire which will give us a clearer

picture of what a consumer thinks about the marketing strategies of Maruti Suzuki. We

will interview the customers to understand whether marketing strategies of Maruti Suzuki

helped them take a decision on buying the product, what they thought about the

marketing strategies

Sample Size: 30

4. LITERATURE REVIEW

Marketing Implications on the Purchase Decision Process:

This view of the role of additional information in consumer vehicle purchase decision has

implications for advertising. An advertisement reaching a potential buyer while the buyer

32

is seeking information will have a greater impact, since the buyer is spared the time and

effort needed to seek out this information himself and is less likely to turn to competing

vehicle advertisements to obtain the additional information. In other words, buyers are

generally more responsive to different brand advertisements while they are seeking

information on these brands. This is why they become a choice target for the advertiser,

provided Maruti Suzuki can identify and locate them. The strategy that consists of asking

consumers to return a coupon at the bottom of a print advertisement is often devised

along these principles. Thus, a consumer who is interested and is in an information-

gathering stage is asked to return a coupon in order to obtain more information on the

product or the brand. Then the Maruti Suzuki takes advantage of the consumer’s has

identified him or herself to send a series of informative (and persuasive) messages or to

send a salesperson who will try to conclude a sale. Life insurance companies are

currently using this strategy. A second series of implications that this analysis of the

buyer decision process has for advertising is that Maruti Suzuki must reduce the buyer’s

uncertainty about the distinctive attributes of the brand. Because a buyer takes only these

attributes into consideration when comparing and evaluating brands, an advertiser

normally tries to give positive information about the brand’s performance on the

distinctive attributes. Their advertisement about the inherent attributes of a brand is

bound to be ineffective. At best, it will be primary advertising for the whole product

class, which will also promote the competing brands. This is why an advertiser must

know which attributes is the relevant product category are perceived as inherent by the

buyer, and what are the distinctive attributes on which the advertising effort should be

concentrated. After purchasing the product, the consumer will experience some level of

satisfaction or dissatisfaction. Maruti’s job does not end when the product is bought but

continues into the post-purchase period. A distinction must be drawn between the post-

purchase feelings, which are essentially experienced during the period of relative

uncertainty about the actual instrumental value of the purchased product, and which

concern the occasional important and costly purchase; and between the post-usage

feelings, when the consumer has evaluated the degree to which a product has met

expectations.

33

Different Media Channel:

Print Advertising – Newspapers, Magazines, Brochures, Fliers:

The print media have always been a popular advertising medium. Advertising products

via newspapers or magazines is a common practice. In addition to this, the print media

also offers options like promotional brochures and fliers for advertising purposes. Often

the newspapers and the magazines sell the advertising space according to the area

occupied by the advertisement, the position of the advertisement (front page/middle

page), as well as the readership of the publications. For instance an advertisement in a

relatively new and less popular newspaper would cost far less than placing an

advertisement in a popular newspaper with a high readership. The price of print ads also

depend on the supplement in which they appear, for example an advertisement in the

glossy supplement costs way higher than that in the newspaper supplement which uses a

mediocre quality paper.

PROMOTION STRATEGY

The promotion includes all communications a marketer used in the market for his

products and services to create awareness, to persuade the customers, to buy and retain in

future also. For improvement in the position of sales or progress of business this method

is used. The message is given to target group regarding the features and benefits of the

products or services. Without communication, the features, benefits and schemes would

not be known to the customers and objectives of launching of products or services and

increasing sales would not be completed. When communication creates awareness then

only the interest would be created and customers would take the decision for buying. For

promotion different methods of communication can be used. The promotional strategy of

Maruti Suzuki is very effective. The company emphasise on road safety and environment

friendly products. The company has launched road safety mission under which 5,00,000

people will be trained in the next three years. This will be done through two channels -

Institute of Driving Training and Research (IDTR) and the Maruti Driving Schools

spread across the country. Of the 5, 00,000 people to be trained, at least 1,00,000 will be

34

people from underprivileged section of society, who are keen to take driving as a

profession. The company has always promoted the concept of "Reduce, Reuse, Recycle"

(3R's). The company has taken help of all the promotional tools like radio, television,

road shows, print media, workshops and seminars to promote their cars.

Rural India is a fast emerging as a focus area in the country’s economy. Maruti knew that

there is a great potential in rural markets & in rural markets, the endorsements of opinion

makers takes precedence over an informed objective judgment. Considering this fact,

Maruti Suzuki launched a panchayat scheme for such opinion makers which covers the

village Sarpanch, doctors and teachers in government instititutions, rural bank officers

where in an extra discount is given to make a sell.

As a part of customer engaging strategy and to attract the potential customers Maruti

organized various melas wherein local flavor is added by organizing traditional social

activities like Gramin Mahotsava are conducted round the year. As a part of promotional

approach Maruti Suzuki promotedSwift & other brands through sponsoring various live

programmes (Dancing shows) like Dance India Dance.

ROAD SHOWS:

The Company organizes road shows to display vehicles in the pavilions during various

college festivals and exhibition.

RADIO:

Radio is one of the biggest medium to communicate. The company goes for radio

announcements to convey about the product features, price, qualities, etc.

PRINT MEDIA:

The company also promotes with the help of print media .Advertisement is given in

leading newspapers as well as they distribute brochures and leaflets at public places to

reach the customers.At times they organize workshops and seminars to display their

35

models and they also offer test drive. The company also advertises through banners and

posters.

MEDIAGRAPHIC PROFILE

Media which most of our target audience consults are

Tele-Vision

Set-max

Sony

Zee

Sahara

Star (Plus, Movies, Sports)

NDTV 24*7

Print

Times of India

Hindustan Times

Dainik Jagran

Delhi Times

HT City

Overall Budget Total

We are going to use a 70 lac-1 crore rupees for our advertising needs for a

full page ad in Delhi Times, TOI, HT, 10-18 lakh – quarter page, half page

is about 35-50 lakh.

10-15 Crores for print media per month

For 1 second - 5 lacs varies depending on prime time/ importance of

event(e.g premier league) 10 seconds - 50 lacs (teaser ad) and 30 seconds-

60 -70 lacs.

36

Maruti Suzuki has long term contracts with some channels so they get

discount rates and if they go through an agency then they pay extra

commission and the total costing in electronic media is about 40-50 crores.

Promotional Events will depend on the location, chief-guest and brand ambassador. Each

event’s cost is around 1-2 crore

Budget Breakdown

Meet the Competition Method:

1. This tactic is used in highly competitive markets

Advertising:

1. Television

2. Newspapers

Sales Promotion:

1. Rebates

2. Contests

3. Discounts- WagonR- Rs.35000,

Swift Diesel- Rs.10,000+10,000 (loyalty)

Public Relations:

1. Event Sponsorship

2. Press/Releases Premieres

Direct Marketing:

1. Electronic Mail – Percentage Budget Allocation: 9% of total

electronic media budget

2. Catalog – Percentage Budget Allocation: 4% of the total budget.

ADVERTISING STRATEGY OF MARUTI SUZUKI INDIA LIMITED

37

Advertising is one aspect of brand building. Whenever Maruti launched any brand, it

supported that brand with an ad campaign. Maruti’s advertising campaigns included

TVCs, Radio and Print ads, Point of Sale, Mobile promotions, online marketing, Outdoor

promotions. Maruti’s advertising strategy focused both on building up its corporate image

and promoting its cars. Maruti’s campaigns emphasized different aspects of its cars,

including fuel efficiency, looks, space, etc.

In the late 1990s, Maruti’s advertising campaigns were handled by Lowe India (later

known as Lowe Lintas & Partners, India) and Rediffusion DY&R. While advertising

related to Esteem, Zen and Baleno were handled by Lowe India and the ad campaign of

Maruti 800, Gypsy, Omni and Wagon-R were handled by Rediffusion. With an intention

to promote the all brands effectively, in 2000 Maruti decided to appoint Capital

Advertising. In 2003, Maruti Suzuki came up with an innovative advertising that became

popular for its simplicity and clear message. In this ad one child plays with his toy car &

when the father asked him, he replies, ‘Kya karoon papa petrol khatam hi nahi hota’. This

ad depicted the fuel efficiency of Maruti Suzuki.

38

BRAND RELATED ADVERTISMENTS OF MARUTI SUZUKI INDIA LIMITED

Maruti segmented the customers by designing its brand specific advertisements. The

advertising of Maruti was targeted towards the needs and wants of a particular consumer

segment.

1. Wagon R

Maruti launched Wagon R in 2000 and launched an ad campaign with the tagline, ‘A Car

Full of Ideas’. In May 2009, Maruti launched an outdoor campaign for Wagon R using

billboards, mobile vans, unipoles etc. The outdoor ads of WagonR were placed on 23

outdoor sites in and around airports of several cities across India. In the ads different

backgrounds were highlighted and each ad displayed a landmark structure from each city

with different messages. For e.g, in Mumbai it was,’ Welcome to the city of film stars

and WagonR’, in Hyderabad, the message was ‘Welcome to the city of Charminar &

WagonR’.

2. Swift

In 2005, Maruti came up with an ad campaign for its new Swift. The ad campaign

included print ads, teaser TV ads and a TVC. In the TVC ad a Maruti Swift car being

driven by a young couple at high speed on the road without stopping & car stopped only

after chased by a traffic police.

3. A-Star

Maruti has always been advertised A-Star with the tagline of ‘Stop at Nothing’ which

shows the attitude that this car has always stood for. In this ad Farhan Akhtar was the

brand ambassador during the launch and the launch TVC also shared elements with the

Bollywood hit film ‘Rock On’ to make it more relatable to the young adult seeking an

expression for his passion. According to Mayank Pareek, Head of Marketing, Maruti

Suzuki India Ltd says that Cyber media is the best Marketing tool. The company has

displayed their banners on various internet sites. And due to boom of Cineplex’s and

Malls, marketing has become easy.

39

Outdoor Advertising – Billboards, Kiosks, Tradeshows and Events:

Outdoor advertising is also a very popular form of advertising, which makes use of

several tools and techniques to attract the customers. The most common examples of

outdoor advertising are billboards, kiosks, and also several events and tradeshows

organized by the company. The billboard advertising is very popular however has to be

really terse and catchy in order to grab the attention of the passers by. The kiosks not only

provide an easy outlet for the company products but also make for an effective

advertising tool to promote the company’s products. Organizing several events or

sponsoring them makes for an excellent advertising opportunity. The company can

organize trade fairs, or even exhibitions for advertising their products.

Marketing by Dealer

Buyers are given gift cheques worth anything between Rs 5000 -Rs. 35,000 depending on

the car and they are given exchange offers based on the database of the last 3-4 years.

Potential new car buyers are approached and even loyalty bonuses are offered to make

them buy Maruti Suzuki cars. There are scratch coupons which help in enticing the

consumer to buy Maruti Suzuki cars. Juicer mixer grinder, gold coin,shopper stop

voucher, DVD, LCD, cameras are available to be won through scratch coupons. The

dealers also have accessory promotion in order to make them buy the product. The

dealers also have camps, events and stalls or kiosks in corporate companies, bank

branches. If the dealers have an event in the evening in a colony, they would go and

assess cars in the colony whether the residents of the colony would like to buy mid-sized

models or the premium models of Maruti. This is also done to gauge the spending

capacity of the residents and the cars generally preferred in the area so that they can put a

car in that price range on display in the event. A canopy event costs Rs. 2000- Rs. 3000

and a camp, which needs tent, refreshments, anchor, and toys for kids would cost

anything close to Rs. 30,000. The main motive of camps and stalls is enquiry generation,

which helps them get feedback from prospective or interested buyers. Dealers also use

cold calling as a marketing strategy in order to let the previous buyers know of any

loyalty schemes or exchange offers. The people who are called are mostly from the

40

database who have already purchased a Maruti vehicle from the dealer in the last 3-4

years who may be looking to buy a new car.

According to data from the authorized Maruti dealer the consumers think that the

customer care is very strong. The consumer is 1 call away from Maruti. Complaint

generation is straight from Maruti and the dealer from whom the customer has purchased

the car will send a person within 24 hours. Sometimes they even give a personal apology

letter in order to assure him of the product but that is the worst scenario situation.

Customers also valued Maruti for its prices or value for for money.

Broadcast advertising – Television, Radio and the Internet:

Broadcast advertising is a very popular advertising medium that constitutes of several

branches like television, radio or the Internet. Television advertisements have been very

popular ever since they have been introduced. The cost of television advertising often

depends on the duration of the advertisement, the time of broadcast (prime time/peak

time), and of course the popularity of the television channel on which the advertisement

is going to be broadcasted. The radio might have lost its charm owing to the new age

media however the radio remains to be the choice of small-scale advertisers. The radio

jingles have been very popular advertising media and have a large impact on the

audience, which is evident in the fact that many people still remember and enjoy the

popular radio jingles.

Best Media Channel for Maruti Suzuki:

Five different media used in advertising Maruti Suzuki and how consumers viewed them

in order of preference. The results showed that most consumers expressed their

preference for TV advertising of Maruti Suzuki while Newspaper and Magazine

advertising shared consumers each. The powerful combination of sound and vision in the

41

TV advertisements might be reason behind the expressed preference for this media. With

regards to the advertising media, this study revealed that Television is currently the most

potent of all media used in advertising a product. In view of this, more consideration

should be given to television as a medium of advertising. This may be because Television

combines motion, sound, and special visual effects. The product can be demonstrated and

described on T.V. it also offers wide geographic coverage and flexibility as to when the

message can be presented. However, this is not saying that other media should be used. In

fact, Maruti Suzuki should continue to employ integrated advertising of their product.

More budgets could be devoted to TV adverts in view of the consumers’ preference on it.

Moreover, advertising campaign should not be selective or age-oriented, as it has been

shown from the study that advertising

AIDA Model of Advertisement for Maruti Suzuki:

AIDA Model, a well known marketing communication model is an integrated approach

generally adopted by Maruti Suzuki to stimulate a purchase decision in the minds of the

consumers through a linear progression of steps. The steps are Action or Awareness,

Interest, Desire and Action aimed at fulfilling the promotional objectives of the Maruti

Suzuki. Advertising has a considerable effect on the consumer behavior and thus Maruti

Suzuki rely on this sequential process to increase the customer base. Action, the first step

of AIDA model aims at spreading the awareness about the Maruti Suzuki product among

the targeted consumers. The next step in this model is to incite interest in the minds of the

consumers through a catchy tagline, highlighting the main features and benefits of the

42

Maruti Suzuki and many other ways. Maruti Suzuki should also satisfy the emotional and

higher order needs (Esteem and Self Actualization needs of Maslow’s Hierarchy of

needs) of the consumers to develop a strong desire in their minds to purchase their cars

and other vehicles.

Developing desire is followed by the action step where the consumers have all the related

information about their product and have reasons to avail the product but Maruti Suzuki

should develop some motivation for the consumers to go for the final step of purchasing.

Now-a-days an “S” is added to the AIDA model which denotes Satisfaction, which is

essential for ensuring customer retention.

AIDA model was later modified as HOE model (Hierarchy of Effects) owing to its

linearity in process and being based upon the Cognitive->Affect->Behavior process of

consumer purchase decisions. Cognition includes developing perception and arousing

reasoning about the product in the minds of the consumers. Affect indicates the immediate

reaction of the consumers upon knowing the product and behavior includes the judgment

of the consumer about purchasing the product. This model helps in identifying the

prospects as well as the obstacles in bringing a consumer to purchase a product and also

compels the advertisers to pay attention in defining segmentation strategies. A

comparatively new model adopted by the advertisers for communicating with the

consumers is the IEEO model. The steps in this model are Interrupt, Engage, Educate

and Offer. Interrupt stage is to spread awareness about the product. Engage stage is to

involve the consumers through various media channels available to the advertisers and

then educating the consumers about the strong benefits of the product and generating an

acute need in the mind of the consumers before offering to purchase it. For example,

Maruti Suzuki first aware the consumer about the product, highlights its benefits (cost,

feature and driving benefits), engages the consumer (free trial etc) and then offers to

avail it. As one proceeds for one step to another in these models, some percent of

prospective consumers decreases and the Maruti Suzuki should find out ways of retaining

the consumer till the last step. A lot of new models are thus framed by the advertisers to

gain consumer base by working upon the primary models rectifying them to keep in pace

with dynamically changing consumer nee

43

Advertisement impact on repurchasing decision:

Repurchase intention means the status of consumers’ desire to purchase again.

Repurchase intention of customers is an indispensable factor for successful operation of

marketing.

The value provided by steady and loyal customers has direct influence on the success of a

company, and it is largely determined by customers’ repurchase intention. In addition, car

customers do not seem to concern much about the potential post-purchase problems such

as return, exchange, refund, and releasing personal information. This perhaps indicates

that Maruti Suzuki did successfully position or differentiate their TV advertisement with

an emphasis on these issues. Prior to purchase, consumers who saw the advertisement at

the TV have more positive attitude toward the advertisement than those with no

advertisement exposure. Purchase intention is affected by both the attitude toward buying

action and the subjective norm. In particular, they find that the subjective norm has

greater effect on the buying intention for no purchase group than the purchase group.

This implies that emphasizing the approval from close friends and family is a desirable

marketing strategy, especially to no purchase group. Studies on consumer behavior under

44

the advertising environment adopt such variables as vividness, interactivity and tele-

presence. These studies suggest that the more consumers concentrate on virtual

environment and the longer they stay, the more likely they would come again. Some

studies argue that purchase process should be easy to use in order to assure the increase

of regular visits and purchase intention. As the amount of available information continues

to increase at a rapid rate, the search for and identification of relevant and useful

information is becoming time consuming and difficult for the consumer. Thus, there has

been a growing consumer preference for channels that automatically customize

information to meet their wants.

The Determinants of Purchase Information-Seeking Activities:

The Purchase Decision: A Decision under Uncertainty

A buyer who experiences the psychological tension caused by an unsatisfied need or

desire faces a series of decision problems: What product should I buy? Which brand

should I choose? These decisions may be described within decision making under

uncertainty framework. As was shown before, consumers run a certain risk in making a

45

decision based on present information because this imperfect information does not enable

them to predict exactly which product will procure the maximum satisfaction sought nor

which brand really has the qualities desired (or that should be desired). A certain number

of costs are related to the risks taken by buyers. These costs are, for example, financial

losses (if the product does not adequately satisfy all or part of a consumer’s need as it

was hoped it would). The costs may also be physical (if, for instance, the realization of

the risk endangers the consumer’s life) or psycho-sociological (if a wrong purchase

jeopardizes a consumer’s reputation in one of his social groups, for example). These costs

are essentially associated with a fast decision (hence with a limited amount of

information). These costs decrease with time as the more time the buyer takes to gather

additional information reduces the risk involved in the purchase. However, when the

buyer waits until more information is gathered before making a decision, costs associated

with a delay decision are incurred. This time, two types of cost are involved. First, there

are psychological opportunity costs experienced by consumers who are deprived of the

product they need and are consequently in a state of psychological tension. As time

elapses, this psychological tension becomes more acute and eventually develops into a

state of frustration. Second, buyers experience costs associated with the information-

gathering effort. They must invest time and energy to visit several retailers, seek out and

read advertisements, or inquire for other opinions about the best product to buy. These

delayed decision costs considerably increase as time elapses. The buyer must seek

information until it is felt (at least intuitively) that a search for additional information will

bring about more costs than benefits.

Market Scenario:

46

The company vouches for customer satisfaction. For its sincere efforts it has been rated

(by customers) first in customer satisfaction among all car manufacturers 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. 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.

Target Marketing:

47

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; 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.

48

4 Ps:

Product Strategy:

Portfolio of 12 products

Five product lines

49

Price Strategy:

The price of the Maruti car is between Rs. 210000 to Rs. 1500000. Maruti – 800 was the

lowest priced car of this company until 2004. Alto, Omni, Wagon R, are now the lowest

priced cars 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 Mudra 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

50

TV Ads

Print Ads

Radio Ads

“Ghar Aa Gaya Hindustan”

“India Comes Home in Maruti Suzuki.”

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

2,628 workshops that provide customers with maintenance support in 1220 cities.

5. FINDINGS AND ANALYSIS

Q1. Do you have a Car?

51

Yes92%

No8%

92% respondents replied that they have a car.

52

Q2. Specify the one?

Maruti Suzuki55%

Tata Motor34%

Hyundai11%

55% respondents replied that they have Maruti Suzuki but 34% respondents replied they

have Maruti Suzuki.

53

Q3. Are you planning to buy a car?

Planning to buy a car

Yes100%

No0%

100% respondents replied that they are planning to buy a car.

Q4. What motivates you to buy a car?

54

13%10%

26%

35%

16%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Your Family Peer Group Society Status Friend

35% respondents replied that their status motivate them to buy a car but 26% respondents

replied that their society motivate them to buy a car.

Q5. Are you taking your friend reference before taking purchasing decision about car?

55

Friend Refernce

Yes65%

No35%

65% respondents replied that they taking their friend reference before taking purchasing

decision about car.

Q6. Have you seen any advertisement of Maruti Suzuki?

56

Yes100%

No0%

100% respondents replied that they have seen the advertisement of Maruti Suzuki.

Q7. Do you think that advertisement is good for brand image?

Yes 95%

57

No 5%

Advertisement is good for brand image

Yes95%

No5%

95% respondents replied that advertisement is good for brand image.

Q8. What do you feel about advertisement of Maruti Suzuki in comparison to other companies?

58

45%

30%

5%

20%

0%

5%10%

15%

20%25%30%

35%

40%45%

50%

Good Better Worse No Comments

30% respondents think that the advertisement of Maruti Suzuki is better but 45%

respondents think that the advertisement of Maruti Suzuki is good.

Q9. Does advertising pattern used by Maruti Suzuki impact your repurchasing decision?

59

Yes80%

No20%

80% respondents replied yes that advertising pattern used by Maruti Suzuki impact their

repurchasing decision.

Q10. Does advertising induce you to purchase the product?

60

Yes79%

No21%

79% respondents replied that advertising did induce them to purchase the product.

Q11. How important or successful is advertising in attracting their attention?

61

Very Important45%

Somewhat Important

39%

Not Important16%

45% respondents replied that advertising is very important or very successful in attracting their attention.

Q12. How important according to you, is advertising in improving the brand image of Maruti.

62

Very Important43%

Somewhat Important

35%

Not Important22%

43% respondents replied that advertising is very important in case of improves the brand image.

Q13. Consumers’ reasons for preferring Maruti Suzuki for purchasing car.

63

30%35%

15%20%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Advertisement Quality Availability Price

35% respondents replied that they prefer Maruti Suzuki for their quality but 30%

respondents replied that they prefer Maruti Suzuki for their advertisement.

64

Q14. Consumers’ sources of awareness of Maruti Suzuki products

45%

20%

30%

5%0%

5%10%

15%

20%25%30%

35%

40%45%

50%

Advertising Word-of-Mouth Sale Promotion Cannot Remember

45% respondents replied that advertising is the source of awareness for Maruti Suzuki

product.

65

Q15. Consumer’s perception of media use in advertising for Maruti Suzuki

50%

10%20%

10% 10%0%

10%

20%

30%

40%

50%

60%

Television Radio Out doordisplay

Newspaper Magazine

50% respondents replied that television is the most effective media channel for use in

advertising for Maruti Suzuki.

66

Q16. How much are you affected by the promotional efforts of the Maruti Suzuki?

25%

55%

15%5%

0%

10%

20%

30%

40%

50%

60%

High Moderate Low No Effect

55% respondents are moderately affected by the promotional efforts of the Maruti Suzuki

but 25% respondents are highly affected by the promotional efforts of the Maruti Suzuki.

6. RECOMMENDATION

67

Company should follow the principles of marketing. Four P’s principles should

satisfy to lead the market.

TV was found to be the most attractive advertising channel by people amongst all

used by various automobiles companies.

Success of Maruti Suzuki assures that ad campaign has a lot to do with their

success. People’s response definitely conveys that advertisement today definitely

is a force to reckon with and utmost importance has to be given to them to assure

success of a firm.

Today the prices of petrol are increasing speedily. Company should manufacture

more diesel engine cars and gas engine vehicles.

Easy Finance scheme should launch more and more. Because easy finance is most

competitive tool to increase the sale.

Proper service facility is also the key factor, which contributes in the increment of

sale. A company can increase its sale by providing good & proper service facility.

In this case, Maruti Suzuki is the leading company.

Company should manufacture the car model as per the requirement of the

customer. Customer satisfaction is the pivot of the economy. So, company should

concentrate on the satisfaction level of the customer.

When it comes to increasing reputation or creating brand image for a car, TV

should be given superiority than any other medium what so ever.

Sports people were found to be of the highest credibility by most of the people.

So, they should be used more and more in advertisement of Cars.

People are mostly attracted by patriotism theme and cultural theme in ads. So, this

should be used exclusively to achieve greater success as is evident by the success

of Maruti Suzuki already.

7. CONCLUSION

Automobile market today is very dynamic & competitive with a range of players and

products. There are many reasons for the impressive growth of the Indian passenger car

68

Industry. Some of these are easy availability of vehicle finance, attractive rate of interest

and convenient installments. In today’s cutthroat competition it is very difficult to

survive. Stiff competition has forced manufacturers to be innovative and responsive to

customer demands and needs. Maruti Suzuki India Limited is a leading company in

Indian Automobile sector which occupies prominent place due to its innovative strategic

marketing, promotional, Brand positioning, advertising strategies. In today’s scenario the

success of company lies in structuring and restructuring the marketing strategies and

continuous innovation of product and services.

Advertising that distribute information to consumers that can help them take better

economic decisions than they would in absence of that information provides a positive

economic service. Of course, any advertising that, by deception or by any other means,

induces consumers to make sub optimal decisions provides a corresponding negative

economic service. Some advertising is of more value than others along this dimension. It

is unreasonable to separate the economic and social factors to increase the sale. It is clear

now that advertising enhances buyer decision-making by providing information and

supporting brand names. It provides and efficient means to firms to communicate with

their customers. By generating various product associations, advertising can add to the

utility of a buyer receives from a product. It supports the various media has the largely

unrealized potential to reduce extremes in the levels of consumer buying. Needs and

motivations are the starting points of purchase decisions. For a purchase to take place,

buyers must experience sufficiently positive attitudes toward the product and the brand

and consciously felt needs. When all the elements of the marketing program are properly

designed, a buyer will include the advertised brand in his or her evoked set of brands,

which are all the brands that are considered for purchase. These elements of the

marketing program include designing the product to have the attributes buyers seek,

ensuring that the product is available at stores, and setting a price that buyers perceive as

reasonable. This article describes the process buyers follow to select a brand from within

their evoked set. Emphasis is put on elements of the process that advertisers can influence

through a well-designed communication program. Social scientists develop many

sophisticated theories of consumer behaviour. They give a variety of theoretical models

69

to explain the sequence of behaviors involved in making a purchase decision. The first

task in promoting any new product is to create awareness – perception – that the product

exists. The second is to provide enough information – learning –about the product for the

prospective customer to make an informed decision. Finally, Maruti Suzuki wants to be

persuasive enough to stimulate the customer's desire – motivation – to satisfy his or her

needs or wants by purchasing and repurchasing the product. These three personal

processes of consumer behavior – perception, learning, and motivation – are extremely

important to Maruti Suzuki.

This purchase decision process for vehicle includes:

1. A goal to be reached (i.e., lessening the tension created by an unsatisfied need or

desire).

2. A number of alternatives (i.e., competing products and brands). Products and brands

are perceived, evaluated, and compared on the basis of their distinctive attributes and on

their ability to satisfy a set of needs. These alternatives also include the non-purchase

decision.

3. Some evaluation criteria for choosing the “best” alternative.

4. A state of doubt, arising from the impossibility of possessing all relevant information

on the different products and brands. Buyers are also uncertain about how well a given

Maruti Suzuki car will satisfy their needs and desires.

When they buy a Maruti Suzuki car, buyers have expectations. This notion of expectation

is intimately related to any purchase decision. A consumer who buys Maruti Suzuki car

has developed definite expectations about the consumption of this product. Consumers

buy a certain brand because it is preferable to competing brands; they have implicitly or

explicitly anticipated that the selected brand will yield more satisfaction than the other

brands and that it will respond more appropriately to the relevant set of felt needs. Hence,

the amount of satisfaction consumers anticipate they will receive from a certain brand

constitutes the expectations raised by the selected brand. Depending on the extent of

market information, a buyer’s decision process has differing levels of complexity. A

product’s characteristic in relation to an individual’s past experience determines the level

of complexity of the decision process. Three possible cases can be identified: the

70

consumer is familiar with a product category and knows the characteristics of competing

brands; the consumer knows the product category well but not the particular brand

(limited problem solving); the consumer does not know either the product category or the

brand (extensive problem solving). The level of information already acquired is directly

affected by the length of the purchase cycle, because the rate of information forgetting

depends on how frequently a product is purchased. Learning is more likely to take place

in short purchase cycle response behavior situations. During the short time lag between

two consecutive purchase occasions, only a fraction of information has been forgotten,

and a substantial amount of additional information has been gained through using the

selected brand. At the next purchase occasion, a buyer does not need and generally does

not deliberately seek additional information. If the previously selected brand resulted in a

positive experience, this buyer remains loyal to the brand with no further reassessment of

purchase alternatives. Otherwise, if the preceding purchase has led to a negative

evaluation of the brand, or if the buyer has been exposed to and accepted new

information that changed the order of the brands, then the conditions for brand switching

are met. The buyer will try the new, most positively evaluated brand at time of the next

purchase. Because buyers must act on the basis of incomplete information, they

automatically and consciously incur a risk in every purchase and non-purchase decision.

The size of the risk buyers perceive depends on the importance of the particular purchase

and on the quantity of relevant information about the product category and the competing

brands. A purchase decision can be considered as an optimization process through which

buyers seek the product or the brand that will yield the greatest satisfaction. The choice

process can be considered as the search for the most satisfying trade-off among brands

that possess desirable attributes at different levels. Once a purchase is completed, the

buyer expects the products or services to provide the satisfaction he or she was seeking

and that motivated the purchase. For goods with a short consumption cycle, consumers

can judge if the product meets their expectations by using it immediately. But with

durable products with long consumption cycles, consumers cannot tell immediately

whether the product will meet their expectations. Therefore, a distinction must be drawn

between the post-purchase feelings, and the post usage feelings. Buyer behaviour and the

information acquisition process can be viewed as a continuous system. Pre purchase

71

information-seeking activities depend on four factors that have an important time

dimension: the urgency of the purchase situation; the level of information the buyer has

acquired; the length and regularity of the purchase cycle for a particular product type and

the risk perceived by consumers in the purchase situation.

72

8. REFERENCES

Arens, W.; Bovée, C. (2005), Contemporary Advertising, Mc-GrawHill Irwin,

ISBN 0072964723, Burr Ridge

Blackwell, R.; Miniard, P.W.; Engel, J.F. (2000), Consumer Behaviour, South-

Western College Pub, ISBN 0030211085

Darmon, R.; Laroche, M. (1991), Advertising in Canada – a Managerial Approach,

McGraw-Hill Ryerson Limited, ISBN 0-256-13412-X, Toronto

Kotler, Ph.; Turner, R. (1998), Marketing Management – Analysis, Planning,

Implementation, and Control, Prentice Hall, ISBN 0-13-603432-2, Ontario

Westphalen, M-H. (2004), Communicator – le guide de la communication

d'entreprise, Dunod, ISBN 2-10- 005358-2, Paris

Arens, Williams F. 1996. Contemporary Advertising. USA: Richard D. Irwin, A.

Times Mirror Higher Education Group Inc. Company.

Batra, R., J. G. Myers, D. Aaker. 1996. Advertising Management. New Jersey:

Prentice Hall Inc.

Cadbury Nigeria Plc. 1999. Annual Reports Cadbury Nigeria Plc. 1998/99: Fact

File

Cannon, Tom. 1999. Basic Marketing: Principles and Practice. London: Cassel

Publishing House.

Davies, Mark. 1998. Understanding Marketing. Hertfordshire Europe: Prentice

Hall.

Dunn, S.W. and A. Barban. 1987. Advertising, It’s Role in Modern Marketing

Advertising, Its Role in Modern Marketing. Hindsdale, Illinois, U.S.A.: Dryden

Press.

Etzel, M.J., B. J. Walker and W. J. Stanton. 1997. Marketing. USA: Irwin/Mc-Graw

Hill.

Gerard, Tellis J. 1998. Advertising and Sales Promotion Strategy. USA: Addison-

Wesley Educational Publishers, Inc.

73

Gorn, G.J. 1982. “The Effects of Music in Advertising on Choice Behaviour. A

Classical Conditioning Approach”. Journal of Marketing, (American Marketing

Association Chicago U.S.A), 46: 94-101.

Kotler, P. 1988. Marketing Management: Analysis Planning and Control. New

Jersey: Prentice Hall, Eaglewood Cliff.

Milliman, R.E. 1982. “Using Background Music to Affect the Behaviour of

Supermarket Shoppers”. Journal of Marketing, (American Marketing Association,

Chicago, U.S.A.) 46: 86-91.

74

9. ANNEXURE

QUESTIONNAIRE

Q1. Do you have a Car?

Yes

No

Q2. Specify the one?

Maruti Suzuki

Maruti Suzuki

Hyundai

Others

Q3. Are you planning to buy a car?

Yes

No

Q4. Who motivate you to buy the car?

Your Family

Peer Group

Society

Status

Friend

Others

Q5. Are you taking your friend reference before taking purchasing decision about car?

75

Yes

No

Q6. Have you seen any advertisement of Maruti Suzukis?

Yes

No

Q7. Do you think that advertisement is good for brand image?

Yes

No

Q8. What do you feel about advertisement of Maruti Suzuki?

Good

Better

Worse

No Comments

Q9. Does advertising pattern used by Maruti Suzukis impact your repurchasing decision?

Yes

No

Q10. Does the use advertising induce you to purchase the product?

Yes

No

76

Q11. The importance in advertising in case of attracts your attention

Very Important

Somewhat Important

Not Important

Q12. The importance advertising in case of improves the brand image

Very Important

Somewhat Important

Not Important

Q13. Consumers’ reasons for preferring Maruti Suzukis for purchasing car

Advertisement

Quality

Availability

Price

Others

Q14. Consumers’ sources of awareness of Maruti Suzuki products

Advertising

Word-of-Mouth

Sale Promotion

Cannot Remember

Q15. Consumers perception of media use in advertising for Maruti Suzukis

Television

Radio

77

Out door display

Newspaper

Magazine

Q16. How much you are affected by the promotional efforts of the Maruti Suzukis?

High

Moderate

Low

No Effect

Thanks for your support

78