Maruti Suzuki

SUBMITED TO

SUBMITED BY

DR. AMIT UPADHYAY

NITESH KUMAR SINGH

LECT. AT AIT SCHOOL OF MANAGEMENT

PGDM 1 YR ROLL NO. M12136

CERTIFICATE This is to certify that this MINOR PROJECT entitled “MARKETING STRATEGY OF MARUTI SUZUKI INDIA LTD.” Submitted to Apeejay Institute of Technology, School of management GREATER NOIDA (U.P) in partial fulfilment of the requirement for the degree of PGDM, Is as original work carried out by NITESH KUMAR SINGH, PGDM-1st, Sec – C, Roll no. M12136 Under my guidance. The matter embodied in this project is a genuine work done by the student and has not been submitted whether to this university or to any other university/institute for the fulfilment of the requirement of any course of student.

Signature of the student

Signature of the guide (Name and Designation)

DECLARATION

I, Nitesh kumar singh, student of PGDM 1st Sec-c declare that the Minor report entitled “Marketing strategy of Maruti Suzuki India Ltd.” is the result of my own efforts and is based on information collected. Furthermore, the information presented in this report is correct to the best of my knowledge.

Place: Greater noida Date:

Nitesh kumar singh

ACKNOWLEDGEMENTS

The project “MARKETING STRATEGY OF MARUTI SUZUKI INDIA LTD” is developed during the course of PGDM (1st year) for the submission at Apeejay Institute of Technology, School of management. I would like to present my heartfelt gratitude to Dr.Amit Upadhyay for showing full in me & providing me full independence in design & development of this project and gathering information about department library. Without help & support this superb outcome was never possible. I am very thankful and obliged to my project guide Dr.Amit Upadhyay for suggesting me this project. I must convey my sincere thanks to all my faculty members for extending their co-operation during the various stages of project. At last but not the least, I am also thankful to my colleagues, for their constant follow up and boost provided by them through their encouragement and help during the course of carrying out the project.

(NITESH KUMAR SINGH)

INDEX

 INTRODUCTION OF THE COMPANY  OBJECTIVE OF THE COMPANY

 RESEARCH METHODOLOGY  LIMITATIONS  CONCLUSION  BIBILIOGRAPH

INTRODUCTION

COMAPANY PROFILE MARUTISUZUKI INDIALIMITED Maruti is India's largest automobile company. The company, a joint venture with Suzuki of Japan, has been a success story like no other in the annals of the Indian automobile industry. Today, Maruti is India's largest automobile company. This feat was achieved by the missionary zeal of our employees across the line and the far-sighted vision of our management.

The Company Mission: To provide a wide range of modern, high quality fuel efficient vehicles in order to meet the need of different customers, both in domestic and export markets.

The Company Vision: We must be an internationally competitive company in terms of our products and services. We must retain our leadership in India and should also aspire to be among the global players.

Their focus is on: Building a continuously improving organisation adaptable to quick changes Providing value and satisfaction to the custome Aligning and fully involving all our employees, suppliers and dealers to face competition Maximising Shareholder's value Being a responsible corporate citizen At Maruti, they have a clear perspective on manpower. They see it as a unique resource, in the sense that optimal productivity of other resources depends largely on the way human resources are utilised.

The basic philosophy of management that underlies the Maruti culture is that all employees of the company should be moulded into a team which then strives as one, to achieve commonly shared company goals and objectives. To make this philosophy tenable, the Company takes several initiatives. Inputs are sought from employees at all levels. They believe that everyone should contribute to the formulation of company policies, goals and objectives. Secondly, at Maruti, they encourage leadership in the best sense of the word. According to us, a leader is one who must be impartial, must have the ability to rise above his own subjectivity, and, most importantly, must practice what he preaches. They understand that the process of creating a sense of belonging that all employees can identify with is a lengthy one. To ensure that this translates into concrete reality, they have taken several simple but specific and well thought out measures. The first step in this direction has been the introduction of a common uniform for all employees. Another measure is the creation of a common canteen where all employees have lunch, stand in common queues, and sit on the same table. Common toilets, common transport and similar facilities for all levels of employees are other measures that reinforce their emphasis on genuine equality in the workplace. At Maruti They do not believe in the notion of organisational hierarchies. As a matter of fact, the management structure and systems in Maruti have been designed to promote decentralisation of authority. Maruti has a horizontal management structure with only four functional levels of responsibility to facilitate quicker decision making. Another focus area of the Maruti culture is the maintenance of a smoothly functioning communication network. Maruti believes that communication channels between labour and management cannot simply consist of having a labour representative on the Board of the Company. They have faith in the ability of labour to effectively participate in management and make constructive suggestions. To encourage this, they ensure that there is a thorough dissemination of information at all levels, through newsletters or via a letter from the Chief Executive to all employees. Meetings with the Union are held regularly, and programmes being contemplated by the Company are discussed with the Union.

The Sahyog Samiti, a collection of representatives of non-unionised employees, training programmes in Japan, Quality Circles, productivity-linked incentive schemes, and an ethos of discipline and teamwork, all contribute to the Maruti culture. Several measures of performance have made amply clear that Maruti has established a truly healthy work culture. They have met all project and performance targets since inception. Their productivity levels are constantly improving. The Company has had good labour relations with employees from the very beginning, and they have been successful in the export market. Yet, the Maruti culture is one that does not believe in resting on its laurels. They adhere to the spirit of Kaizen, which states that constant improvement is always possible. The most basic tenet of productivity that they hold dear is that " Today should be better than Yesterday and Tomorrow should be better than Today". Maruti Udyog Limited (MUL) was established in Feb 1981 through an Act of Parliament, to meet the growing demand of a personal mode of transport caused by the lack of an efficient public transport system. Suzuki Motor Company was chosen from seven prospective partners worldwide. This was due not only to their undisputed leadership in small cars but also to their commitment to actively bring to MUL contemporary technology and Japanese management practices (which had catapulted Japan over USA to the status of the top auto manufacturing country in the world). A licence and a Joint Venture agreement was signed between Government of India and Suzuki Motor Company (now Suzuki Motor Corporation of Japan) in Oct 1982. The objectives of MUL then were: 

Modernization of the Indian Automobile Industry.



Production of fuel-efficient vehicles to conserve scarce resources.



Production of large number of motor vehicles, which was necessary for economic growth.

Core Value



Customer Obsession



Innovation and Creativity



Networking and Partnership



Openness and Learning

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

Technological Advantage We have introduced the superior 16 * 4 Hypertech engines across the entire Maruti Suzuki range. This new technology harnesses the power of a brainy 16-bit computer to a fuel-efficient 4-valve engine to create optimum engine delivery. This means every Maruti Suzuki owner gets the ideal combination of power and performance from his car. Our other innovation has been the introduction of Electronic Power Steering (EPS) in select models. This results in better and greater maneuverability. In other words, our cars have become even more pleasurable to drive.

Production/R&D Spread over a sprawling 297 acres with 3 fully-integrated production facilities, the Maruti Udyog Plant has already rolled out over 6 million vehicles. In fact, on an average, two vehicles roll out of the factory every minute. And it takes on an average, just 14 hours to make a car. More importantly, with an incredible range of 11 models available in 50 variants, there's a Maruti Suzuki made here to fit every carbuyer's budget. And dream.

Production Milestones 1st vehicle produced, December 1983

1,00,000 vehicles produced by August, 1986

5,00,000 vehicles produced by June, 1990

15,00,000 vehicles produced by April, 1996

20,00,000 vehicles produced by October, 1997

25,00,000 vehicles produced by March, 1999

30,00,000 vehicles produced by June, 2000

35,00,000 vehicles produced by December 2001

40,00,000 vehicles produced by April, 2003

45,00,000 vehicles produced by April, 2004

AWARDS 2005 Number one in JD Power SSI for the second consecutive year. Number one in JD Power CSI for the sixth time in a row - the only car to win it so many times. M800, WagonR and Swift topped their segments in the TNS Total Customer Satisfaction Study.

Leadership in the JD Power Initial Quality Study - Alto number one in its segment for the 2nd time in a row, Esteem number one in its segment for the 3rd year in a row, Swift number one in the premium compact segment WagonR and Esteem top their segments in the JD Power APEAL study TNS ranks Maruti 4th in the Corporate Reputation Strength (CSR). Study (#1 in Auto sector)-Feb 05 Maruti bagged the "Manufacturer of the year" award from AutocarCNBC (2nd time in a row)-Feb 05

First Indian car manufacturer to reach 5 million vehicles sales Business World ranks Maruti among top five most respectedIndia-Oct 04 Maruti ranked among top ten (Rank7) greenest companies in India By Business Today - Sep '04

2004

Maruti Suzuki was No. 1 in Customer atisfaction, No. 1 in Sales

Satisfaction No.1 in Product Quality (Esteem and Alto) and No. 1 in Product Appeal (Esteem and Wagon R)

No. 1 in Total Customer Satisfaction (Maruti 800, Zen and Alto)

Business World ranked us among the country's five most respected companies

Business World ranked us the country's most respected automobile company

Voted Manufacturer of the year by CNBC

2003

Maruti 800, Maruti Zen and Maruti Esteem make it to the top 10 automotive brands in "Most Trusted Brand survey 2003" J D Power ranked 3 models of Maruti on top: Wagonr, Zen and Esteem Maruti 800 and Wagonr top in NFO Total Customer Satisfaction Study 2003. MUL tops in J D Power CSI (2001) for 4th time in a row

2001

MUL tops in J D Power CSI (2001) for 2nd time in a row: another international first

2000

Maruti bags JD Power CSI - 1st rank; unique achievement by market leader anywhere in the world

MSM launched as model workshop in India; achieves highest CSI 1999

rating. Central Board of Excise & Customs awards Maruti with "Samman Patra", for contribution to exchequer and being an ideal tax

1998

1996

CII's Business Excellence Award

Maruti wins INSSAN award for "Excellence in Suggestion Scheme" Awarded the Star Trading House status by Ministry of Commerce

1994-95

Engineering Exports Promotion Council's award for export performance

1994

Best Canteen award among Haryana Industries as part of employee welfare

1992-93

Engineering Exports Promotion Council's award for export performance

1991-92

Engineering Exports Promotion Council's award for export performance

WHYMARUTISUZUKI

The Quality Advantage A car is an engineering product, only as good as the technology used to make it. Actual users of our technology are saying something very clearly Maruti Suzuki is No.1 in quality: Maruti Suzuki owners experience fewer problems with their vehicles than any other can manufacturer in India (J.D. Power IQS Study 2004). The Alto was chosen No.1 in the premium compact car segment and the Esteem in the entry level mid-size car segment across 9 parameters. The J.D. Power APEAL Study 2004 proclaimed the Wagon R. No. 1 in the premium compact car segment and the Esteem No.1 in the entry level midsize car segment. This study measures owner delight in terms of design, content, layout and performance of vehicles across 8 parameters. Maruti Suzuki has a sales network of 307 state-of-the-art showrooms across 189 cities*, with a workforce of over 6000 trained sales personnel to guide our customers in finding the right car. Our high sales and customer care standards led us to achieve the No.1 nameplate in the J.D. Power SSI study 2004. The SSI study measures sales satisfaction across 6 parameters: deal received, paperwork, dealer facility, salesperson, delivery timing and delivery process. Maruti Suzuki has not only got the No.1 nameplate in the J.D. Power SSI study 2004, but also ranked way above the industry average (Maruti Suzuki was at 784 while industry average was at 760). What is significant is that it was ranked above Skoda, Ford, Chevrolet, Mitsubishi and Hyundai. To be really happy with the car you own, it should have a reliable service network at hand and within easy reach. Their 1036 city

strong service network is

equipped to service 20,000 vehicles a day. No wonder Maruti Suzuki has been awarded the No.1 nameplate in customer satisfaction in India for the fifth year in a row, a feat unprecedented for any automobile market leader in the world.

In the J.D. Power CSI study , Maruti Suzuki scored the highest across all 7 parameters: least problems experienced with vehicle serviced, highest service quality, best in-service experience, best service delivery, best inservice experience, most user-friendly service and best service initiation experience. In fact, 92% of Maruti Suzuki owners feel that work gets done right the first time during service. The J.D. Power CSI study 2004 also reveals that 97% of Maruti Suzuki owners would probable recommend the same make of vehicle, while 90% owners would probable repurchase the same make of vehicle.

A Buying Experience Like No Other Maruti Suzuki has a sales network of 307 state-of -the-art showrooms across 189 cities, with a workforce of over 6000 trained sales personnel to guide our customers in finding the right car. Our high sales and customer care standards led us to achieve the No.1 nameplate in the J.D. Power SSI Study 2004.

Quality Service Across 1036 Cities In the J.D. Power CSI Study 2004, Maruti Suzuki scored the highest across all 7 parameters: least problems experienced with vehicle serviced, highest service quality, best in-service experience, best service delivery, best service advisor experience, most user-friendly service and best service initiation experience. 92% of Maruti Suzuki owners feel that work gets done right the first time during service. The J.D. Power CSI study 2004 also reveals that 97% of Maruti Suzuki owners would probably recommend the same make of vehicle, while 90% owners would probably repurchase the same make of vehicle. One Stop Shop

At Maruti Suzuki, you will find all your car related needs met under one roof. Whether it is easy finance, insurance, fleet management services, exchange- Maruti Suzuki is set to provide a single-window solution for all your car related needs.

The Low Cost Maintenance Advantage

The acquisition cost is unfortunately not the only cost you face when buying a car. Although a car may be affordable to buy, it may not necessarily be affordable to maintain, as some of its regularly used spare parts may be priced quite steeply. Not so in the case of a Maruti Suzuki. It is in the economy segment that the affordability of

spares is

most

competitive, and it is here where Maruti Suzuki shines. The recent Auto car Survey conducted in August 2004 bears testimony to this fact. In the Maruti Suzuki stable, the Omni has the lowest aggregate cost of spares followed by the Maruti-800. The Maruti- 800 has the cheapest spares of any Indian car with a basket of just Rs. 23,422. In the Lower Mid-size segment as well, price-consciousness is very high, where the cars have to be not only affordable on purchase price but also need to combine

quality,

drivability

and

have

comfortable

interiors.

In

this

segment, the Maruti Suzuki Versa has scored particularly well with the lowest cost of spares in the segment. In the Upper Mid-size segment, the Maruti Suzuki Baleno has the segment's lowest prices on a majority of the spares. Lowest Cost of Ownership To be really happy with the car one owns, it should be easy on the pocket to buy and to run-which is why the cost of ownership is so important. And here again, a Maruti Suzuki is a clear winner, as shown by the recent J.D.Power CSI study 2004. It is clear that a Maruti Suzuki delights you even when you run it for years. The 6 highest satisfaction ratings with regard to cost of ownership among all models are all Maruti Suzuki vehicles: Zen, Wagon R, Esteem, Maruti 800, Alto and Omni. They are proud to have the lowest cost of operation

/

km

(among

petrol

vehicles) - the top 5 models are all Maruti Suzuki models: Maruti 800, Alto, Zen, Omni and Wagon R.

Employee Quality Measures Kaizen is based on the concept of making incremental improvements in our products. It incorporates a series of continuous small and simple improvements, which aim at involving employees at all levels. The Suggestion Scheme is based on the same principle. Under this scheme, employees are encouraged to make suggestions for improvement in any area of our operation. Over 50,000 suggestions are received from employees every year. Maruti has won the First place in "Excellence in Suggestion Scheme Contest 2003", which is the 6th consecutive award won in as many years. This contest is organized by Indian National Suggestion Schemes Association (INSSAN). Since 1998 Maruti has won this award 10 times.

"Quality Circles" are groups of five to eight members from a particular work area who work as a team to identify priorities and solve work related problems in the area. We believe that it is this unwavering commitment to quality that will lead to the further growth of the organization as competition increases. ISO 9001:2000 At Maruti, our approach to quality is in keeping with the Japanese practice--"build it into the product". Technicians themselves inspect the quality of work. Supervisors educate and instruct technicians to continually improve productivity and quality. The movement of quality indicators is reviewed in weekly meetings by the top management. In 2001, Maruti suzuki india Ltd became one of the first automobile companies anywhere in the world to get an ISO 9000:2000 certification. AV Belgium, global auditors for International Organization for Standardisation(ISO), certified Maruti after a four day long audit, covering varied parameters like Customer Focussed organisation, Leadership, Involvement of

people, Process

System approach to Management, Continual improvement, etc.

approach,

In May 1995, Maruti got ISO 9002 certification. The audit for this covered quality assurance in production, installation, marketing and sales as well as after sales services. We were also one of the first companies in the world to pioneer ISO 9000 certification for our dealers.

In October 1993, MUL passed the Conformity Of Production (COP) Audit, which is based on a European Union Directive. This authenticated our quality systems and testing facilities for export to Europe. Their emphasis on total quality has meant that today they are in a position to guide vendors and dealers in establishing and consolidating their individual quality systems. This commitment to quality has ensured a consistently satisfying product and worldclass sales and after-sales services.

TS16949:2002

-

A new feather was added recently in Maruti‟s cap in the

field of quality when the Quality Management System of its Press Shop & associated functions (collectively termed as Press Function) got certification for conformance to the requirements of TS16949:2002 standard. The need for TS certification of Press Function had its genesis in the prestigious project that Maruti earned for the supply of stamped panels to General Motors India for one of its forthcoming models. As a part of Quality system requirements, GM requires all its suppliers to be certified to either ISO TS 16949 or QS 9000. These standards address Quality System requirements, which are particularly specific to the automotive industry and requires an organization to be in compliance with ISO 9000 systems as a basic requirement. However, whereas QS 9000 would become defunct and cease to exist after Dec 2006, TS 16949 is going to be the standard of the future. The TS 16949 standard, brought out by ISO in the year 1999, is an extension of the ISO 9001:2000 standard that prescribes Quality management system requirements that are specifically applicable to the automotive industry. TS 16949 has gained high popularity and almost all major automobile players across the globe including GM, Ford, Daimler Chrysler, Nissan, Honda are embracing & promoting it.

ISO 9001:2000

THEORITICALPERSPECTIVE Consumer is strictly, the ultimate consumer of a product, the ultimate user of a product; the person who derives the satisfaction or the benefit offered. The 'consumer' is not necessarily the customer, since there are often 'customers' in the buying/ distribution chain; moreover, the consumer is frequently not the person who makes the buying decision; for instance, in the case of many household products, where the housewife may make the purchase but consumption or use is by the whole family. 'Consumer' is not normally applied to the purchase of industrial goods and services where the customer is usually a corporate body. Nevertheless, consumable goods are sold to industry for corporate purposes and the consumers of these goods can be identified for marketing practice.

Consumer behavior is the study of buying habits or patterns of behaviour of consuming public either in general or in specific groups.

THE BUYING PROCESS The complexity inherent in understanding consumer behaviour has led to the construction of models of the buying process which indicate the stages through which the consumer passes from the time he or she first becomes aware of a need for a product or service to the time when a product is purchased, a brand selected, and the consumer evaluates the success of his purchase decides whether to buy that particular product and / or brand again. It the same time, such models usually indicate the social and psychological forces which shape the potential buyer's action at each stage in the process. The two principal aims of such model building are the prediction of future behavior

based

on

measurement of relevant variable and the explanation of this behavior in terms of theoretically relevant constructs.

The starting point for understanding the buyer is the stimulus-response model shown below Marketing

Other

stimuli

stimuli

Buyer's Characterist ics Cultural

Buyer's decision process Problem recognition

Product

Economic

Social

Price

Technologic

Personal

Place

al

Psychological

Promotion

Political

Evaluation decision

Cultural

Post-purchase behavior

Information

Buyer's decision

Product choice Brand choice Dealer choice Purchase timing Purchase amount

The consumer passes through five stages : Problem recognition information search, evaluation of alternatives purchase decision and post-purchase behavior. Clearly the buying process starts long before the actual purchase and has consequences long after the purchase. This model implies that consumers pass through all five stages in buying a product. But this is not the case, especially in low-involvement purchase. Consumers may skip or rreverse some stages. Thus a woman buying her regular brand of toothpaste goes directly from the need for toothpaste to the purchase decision, skipping information search and evaluation. However, we have already used the model in above, because it captures the full range of consideration

that

arise

when a consumer facer a highly involving new purchase.

We will allude again to Linda Brown and try to understand how she became interested in buying a laptop computer and the try to understand how she became interested in buying a laptop computer and stages she went through to make her final choice.

MAJOR FACTORS INFLUENCING BUYING BEHAVIOR

Cultural Social Reference group Culture

Family

Subculture Social Class

Personal Age and lifecycle stage

Roles and statuses

Occupation

Psychological Motivation Perception Learning

Economic

Beliefs and

circumstances

attitudes

Lifestyle Personalit y and self-concept

Buyer

Rogersmodelfortheadoptionanddiffusionofinnovations Innovation AdoptionCURVE

The innovation adoption curve of Rogers is a model that classifies adopters of innovations into various categories, based on the idea that certain individuals are inevitably more open to adaptation than others. Is is also referred to as Multi-Step Flow Theory or Diffusion of Innovations Theory.

Innovators Brave people, puling the change. Innovators are very important communication. EarlyAdopters Respectable people, opinion leaders, try out new ideas, but in a careful way. Early Majority Thoughtful people, careful but accepting change more quickly than the average. Late Majority Skeptic people, will use new ideas or products only when the majority is using it.

Laggards Traditional people, caring for the "old ways", are critical towards new ideas and will only accept it if the new idea has become mainstream or even tradition.

The diffusion of innovations curve (innovation adoption curve) of Rogers is useful to remember that trying to quickly and massively convince the mass of a new controversial idea is useless. It makes more sense in these circumstances to start with convincing innovators and early adopters first. Also the categories and percentages can be used as a first draft to estimate target groups for communication purposes.

Diffusion research focus was on five elements: 1) the characteristics of an innovation which may influence its adoption; 2) the decision-making process that occurs when individuals consider adopting a new idea, product or practice; 3) the characteristics of individuals that make them likely to adopt an innovation.

TARGETMARKETING Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments.

The beauty of target marketing is that it makes the promotion, pricing and distribution of your products and/or services easier and more cost-effective. Target marketing is the selection of customers you wish to service. The decisions involved in it are Which segments to target How many products to offer Which products to offer in which segments There are three steps to targeting: Market segmentation Target choice Product positioning One of the first things you need to do is to refine your product or service so that you are NOT trying to be 'all things to all people‟. Next, you need to understand that people purchase products or services for three basic reasons:To satisfy basic needs. To solve problems. To make themselves feel good. The next step in creating an effective marketing strategy is to zero in on your target market. Target marketing is one of corporate America's most effective business strategies. The idea is to increase sales by first identifying, and then targeting smaller, yet more profitable customer groups within the total market.

Four Ways to Identify Target Markets 1. Geographic: The location, size of the area, density, and climate zone of your customers. 2. Demographics: The age, gender, income, family composition and size, occupation, and education of your customers. 3. Psychographics: The general personality, behavior, life-style, rate of use, repetition of need, benefits sought, and loyalty characteristics of your customers. 4. Behaviors: The needs they seek to fulfill, the level of knowledge, information sources, attitude, use or response to a product of your customers.

One of the best ways to identify your target market is to look at your existing customer base. Who are your ideal clients? What do they have in common? If you do not have an existing customer base, or if you are targeting a completely new audience, speculate on who they might be, based on their needs and the benefits they will receive. Investigate competitors or similar businesses in other markets to gain insight.

TARGETMARKETING Who are your best customers? Where should you direct your marketing activities?

Where and how should you allocate your advertising and promotional efforts Target Marketing, provides Focus for your business. It helps to establish critical Operational goals and defines what must be done to achieve them

What Customers Want Marketing is more than an activity, it is an attitude Instead of trying to get customers to buy what the firm likes to make, or happens to have on hand, the marketing oriented firm tries to produce or sell what its customers want which can be sold at a profit. Do not simply throw out everything that you now have and replace goods or production machinery with completely new items. Customer Attitudes For a long time, people have believed that advertising can be used to change people's minds about what they want. This is an incredibly difficult process at best, and an extremely expensive one. Because of these two factors, it is a process that smaller firms simply cannot afford to pursue. Instead, it is much more productive for any size firm to tune in to target customer attitudes as they currently exist. Once they have identified the actual prevailing attitudes, they can begin to organize company resources needed to constructively address and satisfy these attitudes the key question is, "What are the existing customer attitudes?

With this as an objective, developing an understanding of existing customer attitudes becomes essential, and their identification becomes an important part of the marketing process. Once these customer attitudes, needs or preferences are identified, the entire firm can then organize itself to satisfy these needs as completely and efficiently as possible.

Target Marketing

MARUTICULTURE Their employees are their greatest strength and asset. It is this underlying philosophy that has moulded their workforce into a team with common goals and objectives. Their Employee-Management relationship is therefore characterized by: Participative Management. Team work & Kaizen. Communication and information sharing. Open office culture for easy accessibility To implement this philosophy, they have taken several measures like a flat organizational structure. There are only three levels of responsibilities ranging from the Board Of Directors, Division Heads to Department Heads. Other visible features of this philosophy are an open office, common uniforms (at all levels), and a common canteen for all. This structure ensures better communication and speedy decision making processes. It also creates an environment that builds trust, transparency and a sense of belonging amongst employees. For Investors: Maruti Udyog Limited, a subsidiary of Suzuki Motor Corporation of Japan, has been the leader of the Indian car market for about two decades. Its manufacturing plant, located some 25 km south of New Delhi in Gurgaon, has an installed capacity of 3,50,000 units per annum, with a capability to produce about half a million vehicles.

The company has a portfolio of 11 brands, including Maruti 800, Omni, premium small car Zen, international brands Alto and WagonR, off-roader Gypsy, mid size Esteem, luxury car Baleno, the MPV, Versa, Swift and Luxury SUV Grand Vitara XL7. In recent years, Maruti has made major strides towards its goal of becoming Suzuki Motor Corporation's R and D hub for Asia. It has introduced upgraded versions of WagonR Zen and Esteem, completely designed and styled in-house.

Maruti's contribution as the engine of growth of the Indian auto industry, indeed its impact on the lifestyle and psyche of an entire generation of Indian middle class, is widely acknowledged. Its emotional connect with the customer continues. Maruti tops customer satisfaction again for sixth year in a row according to the J.D. Power Asia Pacific 2005 India Customer Satisfaction Index (CSI) Study. The company has also ranked highest in India Sales Satisfaction Study.

The company's quality systems and practices have been rated as a "benchmark for the automotive industry world-wide" by A V Belgium, global auditors for International Organisation for Standardisation. In keeping with its leadership position, Maruti supports safe driving and traffic management through mass media messages and a state-of-the art driving training and research institute that it manages for the Delhi Government. The company's service businesses including sale and purchase of pre owned cars (TrueValue), lease and fleet management service for corporates (N2N), Maruti Insurance and Maruti Finance are now fully operational.. These initiatives, besides providing total mobility solutions to customers in a convenient and transparent manner, have helped improve economic viability of The company's dealerships. The company is listed on Bombay Stock Exchange and National Stock Exchange. MUL is a Board-managed company. Currently the directors on the Board are: 

Mr Shinzo Nakanishi, Chairman



Mr Jagdish Khattar, Managing Director



Mr Hirofumi Nagao, Joint Managing Director Mr Shinichi Takeuchi, Joint Managing Director Mr Kinji Saito, Director (Marketing and Sales) Mr Osamu Suzuki, Director



Mr R C Bhargava, Director

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.

BALENO

WAGONR

ESTEEM

MARUTI800

NEW ALTO

SWIFT

OMNI

ZEN

RESEARCH METHODOLOGY

The nature of the project work has been explorator y as no h ypothesis, is taken to be tested. Though

the conclusions drawn could be taken as the h

ypothesis and further tested b y the research work undertaken in the relevant field. The reason for choosing the exploratory research design is the fact the project report has been primaril y based upon the secondar y sources of data and whose authenticity could be assured of.

The reluctance of the company's personnel in parting with

much of

information led the project report to be based substantially on the secondar y source of data. The sources of data used in data collection are the following:

Primary sources

In order to gather information about the various products, I personall y visited a number of retail markets and collected data pertaining to the prices of the products offered. The market visits were useful in knowing the comparative

prices

and

qualit y

of

the

offered

brands

vis-à-vis

the

competitive brands. Detail regarding the packaging of the products were collected were collected and I also inquired about the various sales promotion schemes followed b y the three companies.

B y interviewing these retailers valuable information was

collected. I

inquired from them about their marketing advertising and distribution strategies.

FINDINGS OF THE STUDY

PRICES OF MARUTI PRODUCTS

Car market leader Maruti Udyog Limited has announced a marginal increase in price of certain models. The increase, which comes into effect from today, varies from 0.17 percent to 1.47 percent.

The price increase is due to rise in input costs and freight costs, which increased following the rise in oil prices.

In this phase, the company has

decided to pass on only a part of the increase in costs to the customers. There is no change in the prices of Swift, Zen, Baleno (Vxi) and WagonR (Petrol). Ex-Showroom Prices in Delhi (in Rs) Model M800 Std M800 Std Ac Alto Std Alto Lx Alto Lxi Omni Cargo LPG Omni Cargo Omni (Eight Seater) Omni LPG Esteem Lx Esteem Lxi Esteem Vxi Baleno Lxi Versa Dx Versa Dx2 Versa Std WagonR Lx LPG WagonR Lxi LPG

New 191646 213062 231585 265262 283878 194725 213706 221268 230388 445968 476223 511520 576173 433575 471779 360182 345106 373160

Change Old Increase % 191146 500 0.26% 212562 500 0.24% 231085 500 0.22% 264762 500 0.19% 283378 500 0.18% 192725 2000 1.04% 213206 500 0.23% 220768 500 0.23% 227388 3000 1.32% 444968 1000 0.22% 475223 1000 0.21% 510520 1000 0.20% 575173 1000 0.17% 432575 1000 0.23% 470779 1000 0.21% 359182 1000 0.28% 340106 5000 1.47% 368160 5000 1.36%

INTERNATIONAL BUSINESS

In August, 2003 Maruti crossed a milestone of exporting 300,000 vehicles since its first export in 1986. Europe is the largest destination of Maruti‟s exports and coincidentally after the first commercial shipment of 480 units to Hungary in 1987, the 300,00 mark was crossed by the shipment of 571 units to the same country. The top

ten

destinations of the cumulative exports have been Netherlands, Italy, Germany, Chile, U.K., Hungary, Nepal, Greece, France and Poland in that order.

The Alto, which meets the Euro-3 norms, has been very popular in Europe where a landmark 200,000 vehicle were exported till March 2003. Even in the highly developed and competitive markets of Netherlands, UK, Germany, France and Italy Maruti vehicles have made a mark. Though the main market for the Maruti vehicles is Europe, where it is selling over 70% of its exported quantity, it is exporting in over 70 countries.

Maruti has entered some unconventional markets like Angola, Benin, Djibouti, Ethiopia, Morocco, Uganda, Chile, Costa Rica and El Salvador. The Middle-East region has also opened up and is showing good potential for growth. Some markets in this region where Maruti is, are Saudi Arabia, Kuwait, Bahrain, Qatar and UAE.

The markets outside of Europe that have large quantities, in the current year, are Algeria, Saudi Arabia, Srilanka and Bangladesh. Maruti exported more than 51,000 vehicles in 2003-04 which was 59% higher than last year. In the financial year 200304 Maruti exports contributed to more than 10% of total Maruti sales. x

Modellwise Exports Sales Versa:0_07x Car 800: 20X Baleno t.: Esteem:O_GX

OMNI:2X

MARUTI ALL INDIA SALES – 3 YR TREND

Segment

2003- Growth 2004-05

Growt 2005-06

A1 (Mini - Hatchback) A2 (Compact - Hatchback) A3 (Mid Size) A4/A5/A6

04 167,561 17% 176,132 47% 14,173 28% NA NA

116,262 -31% 271,280 54% 109% 29,637 NA NA

(Exec./Prem./Luxury) C (Van Type) Passenger Cars – MUL

59,526 15% 417,39 28%

9% 65,019 482,198 16%

66,366 2% 522,664 8%

2 758,12 26%

885,029 17%

948,669 7%

3 12% 3,555 420,94 28%

46% 5,204 487,402 16%

-16% 4,374 527,038 8%

7 901,15 24%

1,050,2 17%

Passenger Cars - Total Industry MUV (Utility Vehicles) Passenger Vehicles – MUL Passenger Vehicles - Total Industry

0

46

h

Growt

89,223 -23% 335,136 24% 31,939 8% NA NA

1,129,3 8% 16

h

MARKETSHARE

2005-06 Market Share-Segment A2 TATA 20%

HYUNDAI

MARUTI

21%

59%

2005-06 Market Share-Segment A3

HYUNDAI

TATA

16%

20%

MARUTI 17% FORD 14% OTHERS 7%

GM HONDA 20%

6%

COMPETITION MODELS

SEGMENT A1 (Mini - Hatchback) A2 (Compact Hatchback) A3 (Mid Size)

Maruti

Competition

M800 Zen, WagonR, Alto, Swift

Hyundai - Santro & Getz; Tata Indica & Palio; GM - Corsa Sail

Esteem,

Hyundai - Accent; Tata - Indigo &

Baleno

Petra; Honda - City; GM - Corsa, Optra, & Aveo; Ford - Ikon, Fusion, & Fiesta& Sonata; Hyundai - Elantra

A4/A5/A6 (Exec./Prem./Luxury)

Honda - Accord; GM - Vectra; Ford - Mondeo; Skoda - Octavia & Superb; Toyota - Corolla & Camry;

C (Van Type) MUV (Utility Vehicles)

Omni, Versa Gypsy, Grand Vitara

Daimler Chrysler - C,E, & S Class; Mitsubishi - Pajero; Hyundai Terracan & Tucson; Ford Endeavor; Toyota - Prado & Innova; Nissan - X Trail; Honda - CRV; GM - Forrester & Tavera; Tata - Sumo & Safari; Mahindra - Jeeps, Scorpio, & Bolero

COMPETITIVE STRENGTHS MUL believes that they are well positioned to maintain and enhance their leadership position in the small car segment in India, while continuing to offer products in most segments of the Indian market, on account of their competitive strengths, which include the following: Expertise in small car technology: As a subsidiary of Suzuki, they have access to globally respected technology in the small car segment. They have the advantage of Suzuki‟s expertise in all aspects of small car technology and design, with respect to their products, their manufacturing processes and business practices, the development of their supply chain and the training of their personnel. Extensive product portfolio: Their diverse product range includes cars in segments A, B and C, and utility vehicles. They manufactured five out of the ten models that were sold in the combined A and B segments in India in fiscal 2002. They are the only manufacturer of cars in segment A (priced below Rs.300,000) where they have two models, the Maruti 800 and the Omni. The Maruti 800 has been the largest selling car in India for several years, and continued to have the highest sales volumes of any model, with a market share of 25.3%. The Omni, a versatile vehicle that can seat more passengers than the Maruti 800 or be used as an ambulance or cargo vehicle, had a market share of 10.5% in fiscal 2002. They are also the only manufacturer to sell three distinct models, the Zen, the Alto and the Wagon R, in segment B (priced between Rs.300,000 and Rs.500,000). They believe that theirdominance in segment A and extensive product range in segment B enables us to offer the customer a wider choice in the small car segment than any of their competitors. Quality products: In November 2001, they were one of the first automobile manufacturers in the world to receive the ISO 9001:2000 certification. They began to export products in 1988, primarily in order to benchmark our products against international quality standards. They have exported products to approximately 70 countries, including countries in Western Europe. Their products for export are manufactured using the same assembly line as our products for the domestic market.

Extensive sales and service network: They believe that they have the largest network of dealers and service centers amongst car manufacturers in India. As of March 31, 2003, we had 178 authorized dealers with 243 sales outlets in 161 cities. They estimate their car parc to be in excess of 3.5 million vehicles. To service this car parc, at March 31, 2003, they had 342 dealer workshops and 1,545 Maruti Authorized Service Stations, or MASSs, which covered 898 cities in India backed by Express Service Centers on 30 highways across the country. In addition to the distribution of their cars, their dealership network is a critical resource in our efforts to provide customers with a “one-stop shop” for automobiles and automobile related products and services such as automobile finance, automobile insurance, Maruti-certified pre-owned cars available for purchase, and leasing and fleet management, in order to promote customer loyalty. Brand strength: They have been present in the Indian market for almost twenty years and have built their brand on the basis of the values of trust and reliability. Most of their principal competitors have been present in the Indian passenger car market for a significantly shorter period. Certain manufacturers have ceased to manufacture certain products shortly after introducing them, or have left the market altogether. In contrast, they continue to support the maintenance of their products. This has contributed to the strength of their brand. In 2000, 2001 and 2002, J. D. Power Asia Pacific, Inc. ranked us No. 1 in the India Customer Satisfaction Index, which assesses customer satisfaction

with product quality and dealer service. They believe that this was the first time that a volume leader in the automobile industry anywhere in the world was ranked first on the JD Power Customer Satisfaction Index. NFO Automotives 2002 Total Customer Satisfaction Survey ranked Maruti products as No. 1 in the “Economy”, “Premium Compact” and “Entry Midsize” segments respectively, for 2002. Integrated manufacturing facility: Their manufacturing facility comprises three integrated plants with flexible assembly lines located at Gurgaon in the northern state of Haryana. Their facility has advanced engineering capability and each plant is upgraded on an ongoing basis to improve productivity and quality. As a result, their first plant set up in fiscal 1984 is technologically at par with their newer plants and is also used in the production of their new models. They believe that they are one of the most efficient among the vehicle manufacturing facilities of Suzuki‟s subsidiaries outside Japan in terms of productivity measured as the ratio of number of vehicles produced to number of employees. They have an installed capacity of 350,000 vehicles per year, which is the highest among passenger car manufacturers in India and among the passenger car manufacturing facilities of Suzuki‟s subsidiaries outside Japan. They have consistently produced in excess of their installed capacity in the five fiscal years ended March 31, 002. They believe that they would be able to expand their production to 500,000 cars per year with minimal additional capital expenditure. This would enable them to benefit from significant economies of scale. Strong vendor base and higher rates of localization: They work closely with their vendor base for the supply of raw materials, components and spare parts of their products. In order to improve quality and generate economies of scale, they have reduced the number of their vendors of components in India from 370 as of March 31, 2000 to 299 as of March 31, 2003, and intend to continue to reduce the number of our vendors.

113 of their vendors at March 31, 2003 were in technical collaboration with foreign entities. As of the same date, we had strategic equity interests through joint venture agreements in 13 of their vendors, who together supply a substantial portion of their purchases of components. A number of their vendors are their dedicated suppliers in that they account for a majority of their turnover. Vendors located within a radius of 100 kilometers from their facility supply the majority of their components. The production systems of their vendors are generally aligned to their need for a reliable and timely supply of components that meet their quality requirements. This has enabled them to increase the proportion of locally sourced, lower cost components in their models, a concept they refer to as localisation. They have been able, in collaboration with their vendors, to increase the rate at which they are able to localise production of their new models over time. This has helped them reduce the cost of their components. Skilled labour and experienced management: Thei highly skilled labour force has become

increasingly

productive

in

terms

of

vehicles

produced

per

employee and receives training on an ongoing basis, including training by Suzuki. As of March 31, 2003, 1,900 of their employees had been trained at Suzuki‟s facilities in Japan. They have been present in the Indian passenger car market for a significantly longer period than most of their principal competitors. As a result, they have been able to build a highly experienced management team that is familiar with conditions in the Indian passenger car market. For instance, their managing director has almost ten years of experience with them, and most of the heads of their divisions have more than 15 years of experience with them.

Capital resources: They have cash and bank balances and current investments amounting to Rs.9,992 million. As of the same date, they had relatively low levels of outstanding indebtedness, in the amount of Rs.4,555 million. As a result, they have relatively low interest expense and flexibility to raise funds, if necessary, for their working capital and capital expenditure in the future.

BUSINESS STRATEGY

They intend to continue to focus on the small car segment, while offering products in most segments of the Indian passenger car market. They aim to achieve

their

principal objectives by pursuing the following business strategies: Maintain and enhance their product range: They intend to utilize Suzuki‟s expertise in small car technology to produce new variants of their existing models and to upgrade their products with contemporary technology and features. Increase reach and penetration: They plan to continue to utilize their extensive sales and service network to increase the reach, in terms of geographical spread, and penetration, in terms of sales volumes, of their products across India. Increased availability

of

automobile finance: They continue to

seek

opportunities to expand the size of the Indian passenger car market, especially in the small car segment, through facilitating easy availability of automobile finance. To that end, they have recently entered into an agreement with the State Bank of India. Secure repeat purchases by offering a “360 degree customer experience”: On the basis of their belief that securing repeat purchases from an existing customer requires less expenditure than acquiring a new customer, they aim to provide customers with a “one-stop shop” for automobiles and automobile- related products and services. Continue to benchmark their manufacturing capabilities: They plan to continue to benchmark our manufacturing capabilities with the most efficient car manufacturing facilities of Suzuki and its subsidiaries.

Continue to reduce costs to offer more competitive products:

Cost competitiveness has been, and continues to be, central to their strategy as the leading manufacturer in the small car segment to expand the size of the market by offering competitively priced, high quality products. The components of this strategy are: 

Higher levels of localization



Vendor participation in cost reduction Cost reduction on warranties Reduction in initial investment cost



Reduction in number of vehicle platforms



Achieve further cost reduction through higher productivity

Lower cost of ownership: Through their business strategies, they seek to reduce the consumer ‟s cost of ownership of their cars, which comprises the cost of purchase, the cost of fuel and maintenance, including spare parts and repairs, during the life of the vehicle, insurance, and resale value.

SALES NETWORK Dealers: They offer their products to the customer through a network of 178 authorized dealers with 243 sales outlets across 161 cities. They believe that this is the largest network of dealers amongst car manufacturers in India. Their dealers employed more than 3,500 sales executives. They are linked to their sales network through their secure extranet-based information network. The sales of their spares, accessories and automobile-related services such as insurance and finance serve as additional sources of revenue for our dealers. They believe that the availability of these related products and services at sales outlets also helps to attract customers to the outlets and promotes sales of their cars. Agreements with dealers: They generally appoint a limited number of dealers for a

certain

geographical

territory.

Their

dealers

provide

services

to

customers such as pre-delivery inspection of vehicles, sales of cars, after sales service, supply of spare parts and other services that promote sales of cars within the territory for which they are appointed. They have the right to sell their products and services through other dealers or intermediaries in any territory, whether or not one of their dealers is already established in that territory. Their dealers are

required to

maintain their

outlets in

accordance with their

specifications and employ well-trained sales staff. Their agreements with their dealers usually have terms of five years. These agreements are generally renewable for successive terms of three years, by mutual agreement. The agreements typically permit termination by either the dealer or them with six months‟ prior notice. Enhancing dealer performance: Their central office in Delhi, their regional offices and their area offices monitor and assist their dealer network. They have nine regional offices, five area offices and 187 sales and marketing personnel. They follow

the

performance

of

their

dealers

and

frequently suggest

improvements. In order to assist their dealers in enhancing their performance and capabilities, they have introduced a concept of “Balanced

Scorecard”. Using this tool, they seek to measure the performance of a dealership in several areas of operations, including sales, service, spares and accessories, financial management and management systems. They reward dealers who perform well on the “Balanced Scorecard” with a cash payment at the end of the fiscal year. They believe that the “Balanced Scorecard” serves as an effective incentive for dealers to enhance their performance. Dealer training: They have established standard operating procedures, showroom ambience

and

service

quality

standards

for

dealerships.

They provide

periodic training through their training centres located at their manufacturing facility and at Chennai, Kolkata, Guwahati and Pune. They have

trained

more than 2,600 and 3,400 dealer sales personnel. Their subsidiary, True Value Solutions Ltd., provides value-added services, such as manpower recruitment and training, to their dealers.

AFTER-SALES SERVICE Network As on date there are 342 Maruti dealer workshops and 1,545 Maruti Authorised Service Stations, or MASSs, covering 898 cities in India. In addition, 24-hour mobile service is offered in 38 cities under the brand “Maruti On-road Service”. They intend to extend this service to an additional 25 cities over the next three years. As a benchmark for dealers with respect to service quality and infrastructure facilities, they have launched service stations under the brand “Maruti Service Masters, or MSMs, in three locations in India. They have service stations on 30 highways in India under the brand “Express Service Stations”. To promote sales of their spare parts and the availability of high quality, reliable spare parts for their products, they sell spares under the brand name “Maruti Genuine Parts”, or MGP. These are distributed through their dealer network and through authorised sellers of their spare parts, to whom they refer as stockists.

Many of their MASSs are at remote locations where they do not have dealers. In order to increase the penetration, in terms of sales volumes, of their products in these remote areas, they are exploring opportunities to integrate some of the MASSs into the sales process in order to increase sales of their cars

and

related products and services such as spares and accessories, insurance and financing. Genuine Accessories

They have also entered the business of marketing car accessories under the brand name “Maruti Genuine Accessories”, or MGA, through their dealership network. They seek to provide customers with the opportunity to customize their vehicles with accessories such as music systems, security systems, carcare products and utility products. Warranty and Extended Warranty Program

They offer a two-year warranty on all their vehicles at the time of sale. Their dealers are required to address any claim made by a customer, in accordance with practices and procedures prescribed by them, under the provisions of the warranty in force at that time. The dealers subsequently claim the warranty cost from them. They analyse warranty claims from dealers and either claim the cost from vendors, in the case of defective components, or bear the cost ourselves, in the case of manufacturing defects. They offer an extended paid-warranty program marketed under the brand, “Forever Yours” for the third and fourth year after purchase. They have entered into arrangements with insurance companies to cover the costs of warranties offered under this program. The extended warranty program is intended to maintain the dealer ‟s contact with the customer and increase the revenue generated from sale of spares, accessories and automobile-related services. An effort is made during the period of the extended warranty to encourage the customer to exchange his existing Maruti car for a new Maruti car, or upgrade to a new Maruti car.

NEWBUSINESSINITIATIVES As the largest manufacturer and leader in the small car segment, they continually seek new ways to utilize their vast car parc, range of products and extensive sales and service network to expand the size of the passenger car market in India. They have recently launched new initiatives to develop the market for automobile insurance, automobile finance, leasing and fleet management, and pre-owned cars. They aim to provide customers with a “one-stop shop” for automobiles and automobile-related products and services, and build on their wide customer base and extensive sales and service network to make available to their customers a wide range of Maruti-branded services at different stages of ownership, which they refer to as the “360 degree customer experience”. Atithi Devo Bhava: One-stop shop

Inspired by the spirit of India. Atithi Devo Bhava, in Sanskirit, means “a guest is like God”. It captures the Indian tradition of honouring guests. It's also the inspiration for the welcome

you‟ll

receive

at

a

Maruti

Suzuki

dealership,

and

the

caring

relationship they share with those who drive their cars. At Maruti Suzuki, you will find all your car related needs met under one roof. Whether it is easy finance, insurance, fleet management. services, exchange Maruti Suzuki is set to provide a single window solution for all your car related needs. That's why they have Maruti True Value, the best place to buy and sell reliable used cars. Maruti Finance an agglomeration of the biggest finance companies in India brought together by Maruti Suzuki to ensure that the dream car is within everyone's reach. Similarly, Maruti Insurance brings together some of the biggest names in the car insurance industry to provide insurance solutions to every type of car consumer. Then, finally, there is N2N, which offers fleet related solutions.

THE PLAYERS IN THE INDIAN AUTOMOBILE INDUSTRY

Hyundai Motor India Ltd

Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai Motor Company, South Korea and is the second largest and the fastest growing car manufacturer in India. HMIL presently markets 31 variants of passenger cars in six segments. The Santro in the B segment, Getz in the B+ segment, the Accent in the C segment, the Elantra in the D segment, the Sonata Embera in the E segment and the Tucson and Terracan in the SUV segment.

The company recorded combined sales of 252,851 during calendar year 2005 with a growth of 17.26% over year 2004. HMIL is India's fastest growing car company having rolled-out over 970,000 cars in just over 80 months since its inception and is the largest exporter of passenger cars with exports of over Rs. 1,800 crores. HMIL has recorded a growth of 27.2% in exports over the year 2004.

HMIL‟s fully integrated state-of-the-art manufacturing plant near Chennai boasts some of the most advanced production, quality and testing capabilities in the country. In continuation of its investment in providing the Indian customer global technology, HMIL has announced plans for its second plant, which will produce 300,000 units per annum, raising HMIL‟s total production capacity to 600,000 per annum by 2007. The plant will be built on a 2.1 million square meter site adjacent to the existing facility .HMIL is investing to expand capacity in line with its positioning as HMC‟s global export hub for compact cars. Apart from expansion of production capacity, HMIL plans to expand its dealer network, which will be increased from 157 to 200 this year. And with the company‟s greater focus on the quality of its after-sales service, HMIL‟s service network will be expanded to over 1,000 in 2006.

The year 2005 has been a significant year for Hyundai Motor India. It achieved a significant milestone by rolling out the fastest “200,000th” export car. HMIL exports to around 60 countries globally and recently made a foray into the highly competitive UK market by exporting its first shipment of 820 cars. Propelled by the strong performance in year 2005, Hyundai Motor India is on the threshold of yet another grand milestone of rolling out its „One millionth‟ car which is expected soon.

Tata Motors

Tata Motors is one of the largest companies in the Tata Group with a total income of US$ 2.35 billion. More than 3 million Tata vehicles ply on Indian roads making Tata a dominant force in the Indian automobile industry. Tata Motors is India's only fully integrated automobile manufacturer with a portfolio that covers trucks, buses, utility vehicles and passenger cars. It would be no exaggeration to say that Tata Motors provides the wheels for India's growth.

Tata Motors has the unique distinction of giving India its first and only indigenously built passenger car - The Tata Indica and the premium feature sedan - The Tata Indigo. The Indica, launched in 1998, reached the 2,50,000 sales mark within 52 months of

launch.

Tata Motors owes its leading position in the Indian automobile industry to its strong focus on indigenisation. This focus has driven the Company to set up world-class manufacturing units with state-of-the-art technology. Every stage of product evolutiondesign, development, manufacturing, assembly and quality control, is carried out meticulously. Their manufacturing plants are situated at Jamshedpur in the East, Pune in the West and Lucknow in the North.

Ford India Limited The Ford Motor Company has a rich legacy of translating better motoring ideas to the roads. It has manufactured notable brands such as the Ford, Lincoln, Mercury and the Jaguar. It is among the top five industrial corporations in the world and is available in more than 200 countries around the world.

Ford has entered the Indian market through a tie - up with Mahindra Motors to manufacture the Ford Escort. A project that has been set up with a investment of Rs.1700 crore. Ford India Limited is a subsidiary of Ford Motor Company, currently Ford has a 78% stake, which is going up to 92% soon. The Maraimalai Nagar Plant of Ford India Limited, located roughly 45k.m.from Chennai, provides employment to over 20000 people.The plant has the capacity to manufacture 1,00,000 vehicles per annum, equipped with state-of-the-art vehicle manufacturing technology from Ford. Presently offering seven different models, Ford India Limited (FIL) is catching up fast with the Indian consumer. This is secured through a quality check program based on the principles of NOVA - C (New Overall Vehicle Audit - Customer) wherein daily random checks are conducted from a customer's point of view. To be doubly sure, routine calls are made to dealerships to check the quality of cars delivered to them.

At Mahindra's dealerships are present trained professionals who provide the best levels of service in India. Its intensive manpower training, advanced service equipment and dedicated consumer satisfaction are the are its plus points which is being followed by the entire industry.

Acknowledgement has come in the form of the J D power 1997 India Initial Quality and Customer Satisfaction Awards. These internationally acclaimed and recognized awards voted the Ford Escort as the Best Quality car and the Mahindra Ford and its dealerships were rated the highest in Customer Satisfaction. This is an honour as it its only the second time in automotive history that the same brand/manufacturer has received both the awards in the same year.

General MotorsIndia General Motors India, incorporated in 1994 as a 50-50 joint venture company with the C.K. Birla Group of Companies, became a fully owned subsidiary of GM in 1999 when GMOC bought the remaining shares. The company was restructured in 1999 and was converted from a Public Limited company to a Private Limited company. GM APH LLC currently holds 86 percent of voting shares, and Holden (Australia) holds 14 percent. The SPO business was integrated with the main business in the same company in 2000.

In India, GM strengthened its presence with new product launches Chevrolet Optra in 2003 and Chevrolet Tavera (Multi Utility Vehicle) in 2004. Similarly in 2004, GM India is expected to register a growth of 90% over 2003. With sales volume going up, the market share of GM India has gone to nearly 2%. The sales volume in 2003 was 15,155 units while 2004 figure is expected to be around 27,000 units. In 2004, the company sold a total of 26,166 cars as against 15,155 cars in 2003 registering a growth of 73% while overall passenger car growth during the year was only around 23-24%. These included 9191 Chevy Optras in Entry 'D' Luxury sedan segment, 8369 Opel Corsas and 8417 units of the new generation premium multi-utility vehicle (MUV) Chevrolet Tavera.

The existing GM India plant was originally built by Hindustan Motors. In 1994, GM India entered into a 50% Joint Venture partnership with Hindustan Motors and modernized the 45,000-square-meter plant near Halol, 45 kilometers northwest of Vadodara, in the western state of Gujarat. In February, 1999, GM bought the holdings of Hindutan Motors and GM India became a 100% subsidiary of General Motors Corporation of USA. The plant produces the Opel Corsa, Corsa Sail, Chevrolet Optra, and Chevrolet Tavera. The Chevrolet Forester and Opel Vectra are sold as CBUs (Completely Built in Units) and as imported from Japan and Germany respectively.

Toyota Motor Corporation is the third largest automaker in the world. They have 34 dealers in India and in Delhi they have 2 dealers, first one is „South

Delhi Toyota‟ and second one is in Moti Nagar in which I have visited during my survey. Dealer in Moti Nagar which is “Galaxy Toyota” have predetermined mission that-Customer comes first and everything they do is to meet

their

customer needs, basically they work for creating a lifetime customer.

They work by dividing their work like in one showroom they have separate teams for every product like relating to Corolla it comprises of 7 or 8 executives who handle all the work weather it is of sale or any enquiry or telemarketing call that team must have some specific target to achieve. They reach to the customers either by distributing Leaflets, Brochures to the customers. They collect customer database from Directory (Yellow Pages) or through customer references even they solve customers query online and give information through e-mails. Recently they organized one drawing competition between the kids of their existing customers just to interact with the customer and build loyalty of their company products. They judge their customer satisfaction by analyzing that repeat buyers are more or not & moreover they have customer feedback form in which they can analyze customers background and can forecast customer future demands. They target only high profile customers.

They build customer loyalty by giving happy calls to the customer after sale of every 1,3,7 month. They provide Periodic maintenance schedule, which will ensure

that

vehicle,

is

kept

in

best

able-bodied

at

all

times.

The

maintenance schedule may include periodic inspection, adjustment and lubrication that will keep vehicle in the safest and most efficient condition, they provide one booklet in which they give simple and useful tips for maintenance of the car. They offer good schemes like providing free Test Drive worth Rs 250 petrol at the time of sale of any car.

They do road shows to attract customers. To promote their product they organize exchange mela, events, various cash discounts like currently they are running one discount scheme on purchase of any of their car (Innova, Toyota) they are giving free accessories worth Rs15000. They provide 4 free services after sale and with full clean diesel. All employees of Galaxy Toyota shall consider how they should act and how they might change their ways to benefit the company. They launch one “Co Branded Credit Card” to provide additional benefits and services to the Toyota customers. This Credit Card will give Toyota customers a better payment flexibility and convenience, like Customer gets free service voucher with the card, Special Invite to co-sponsored events, Personal accident insurance coverage: Up to 20 lakhs etc. They have one Guest Book in which they store valuable comments of customers, which they think are very important for them, which will help them to improve their service.

HONDA Honda is one of the leading manufacturers of automobiles and power products and the largest manufacture of motorcycles in the world. They have 20 dealers in 42 different cities around India. In New Delhi they have 6 dealers, I have visited one of them, which is in Najafgarh Road.

They do surveys to know customers need. They target either existing or their perspective customers by giving advertisement in the newspaper or through there satisfied customers which give references. They don‟t believe on targeting competitor‟s customers because by not doing so they have such a brand reputation with good quality products, only through this they are able to make good sales.

They display their models in 8th Auto Expo, which held in New Delhi. They are now focusing on their new model „Civic‟. Honda's Civic perhaps drew the maximum attention. The reason is simple: Civic is a new car from the house of Honda. During my survey I get to know that Honda City Model is the second largest selling car in the „C‟ segment. They have a good superiority with superior brand name in the country.

They prefer to have mode of communication with the customer through mail, telephone and sometimes by letter. Customers who don‟t have time even to see the model or to call the dealer to make inquiries about their reservation they desire to solve their query online itself.

To judge customer satisfaction they some times invite their customers to have a get together, to have interaction with customer in a minute to know that are they satisfied with their services and what they are expecting from them in the near future. They make maximum of their sales from the fresh customers rather than their repeat purchasers. To increase their sales they try to extort surreptitious information from the customers and on their end they aim to ensure that the product quality and product quantity should be available in required quantity in their dealership.

They have Feedback form in which they take feedback of the customer as well as their salesperson because through this they are able to get the information of both the customer & their salesperson that are they giving the full information to the customer. This Dealership even provide technical skills and techniques to their employees that how

to

deal

with

the

customer

thoughtfully

every

after

6

months.

NEEDFORCRMINAUTOMOBILEINDUSTRY The global automotive industry exhibits most of the characteristics of mature industries and closely follows their business cycles. While vehicle industry sales have been strong for the past several years, they have started to slow recently due to the current global economic slowdown. Deteriorating economic conditions result in a drop in consumer confidence, which quickly impacts automotive sales due to their big-ticket status and the relative low cost of extending the life of an existing vehicle through maintenance and repair.

The advent of the Internet as a research tool (75 to 80 percent of auto consumers research using the Internet) has shifted power to consumers, further increasing pressure on prices. At the same time, government regulation and consumer demands for sophisticated features have increased development, production, and marketing costs. Regional economic fluctuations favor consolidation among car companies, suppliers, and retailers -resulting in fewer, larger companies that have more complete product lines targeted at existing and new markets. Consolidation has heightened competition in all vehicle segments. Low-cost manufacturers are expanding beyond their

home

markets

with

entry

level

vehicles,

traditional passenger car

manufacturers are expanding into the light truck markets, and luxury manufacturers are moving down market with passenger cars and SUVs. As a result of these product and market extensions, consumers find it difficult to exhibit brand loyalty because vehicles have unclear brand identities, similar features, and comparable prices. In addition, an overpopulation of dealers has resulted in local and regional competition among same make dealers. This further reduces margins and damages the brand images the car companies spend large amounts of money to build.

Relations between the car companies and their suppliers traditionally have been difficult. In response to competitive pressure, suppliers have been forced by the car companies to provide higher-quality components at constantly lower costs. The resulting decrease in margins and the reduction in volume due to slowing sales have

increased the pressure to consolidate and forced some suppliers to the brink of bankruptcy. Dealers too have a long history of adversarial relationships with the car companies. Independent entrepreneurs who view some of the car companies with skepticism or serious mistrust, dealers believe that many manufacturer-sponsored customer satisfaction programs are actually designed to force smaller dealers out of business or to gain control of customer relationships that the retailers believe they "own."

These difficult relationships have prevented car companies and dealers from maximizing the lifetime value of their combined customers. There are few incentives or efficient methods for dealers and car companies to share critical data, resulting in ineffective management of product, service, and household information. In addition, consumers receive conflicting marketing communications from the two groups, which results in reduced brand value.

KEY INDUSTRYPAIN POINTS Decreasing sales and market share - The long-term battle for market share continues to intensify. In the mature automotive industry, where business cycles drive sales fluctuations, market share is critical to survival. Consumers are less brand-loyal than in the past, and every market

segment

has

an

increasing

number of vehicle choices. To increase sales and gain ground in the market share battle, companies must improve their ability both to acquire first-time customers and to develop customer loyalty to their current brands. To achieve these related objectives, companies must set an aggressive goal -deliver the best customer experience in the automotive industry. Difficult dealer relationships and a lack of dealer collaboration - As the consumer 's primary touch point ,the dealer network is a critical component of customer-facing operations. Therefore, the integration of the dealer network is absolutely essential to improving the quality of the customer experience. Only with

an

infrastructure

that

enables

the

buying

cycle.

Lack of multichannel capabilities - With the advent of the Internet as a research tool, the majority of customers are accessing the automotive enterprises through several different channels. Many times, the switch between channels happens very rapidly as a prospect or customer can view a Web site, make a phone inquiry, and visit a retail store within days

or

even

hours

of

an

initial contact. To

improve customer satisfaction and secure customer lifetime value, companies must

be able

to

capture

these

multiple

interactions,

provide

seamless

management between channels, and leverage shared customer information create rewarding experiences and

to

to develop and execute highly targeted

marketing campaigns. Inefficient demand chain planning and high associated IT cost - Cost reduction is an ongoing competitive requirement. Just as supply chain management must be supported by a sophisticated information infrastructure, effective demand chain management also requires the right supporting infrastructure, enabling car companies to fully leverage each customer relationship through exceptional customer service, efficient lead generation and management, and effective promotions and campaigns. In addition, global automotive enterprises operate a wide variety of IT systems in their various business units and functional groups. Rationalizing these systems offers significant cost savings. Lack of effective information sharing - Car companies must integrate global operations in order to achieve the benefits of consolidation -cost reduction, effective communication, and true integration of core competencies. In addition, internal alignment between business units

functional group, and brand operates through independent systems, programs, and touch points. As a result, there is limited synergy across the ecosystem, leading to

significant

inefficiencies,

lack

of coordination, and most important, an

inability to maximize "share of wallet "from every customer through welltargeted marketing and cross-selling. Synergy between traditionally independent business units such as captive finance companies and between functional groups such as sales, service, and marketing is more critical now than ever before. Only by sharing customer information can customer lifetime value be maximized among different groups.

Complex data governance requirements - Global automotive enterprises have large, complex information technology ecosystems. While customer information must be shared within this ecosystem in order to fully maximize global operations, it must also be protected. Proper management of customer information requires a sophisticated capability

to

manage

a

variety

of

access

rules

and

to

accommodate legal restrictions that can change very quickly. The trust required for successful collaboration between groups in the automotive enterprise must built

by

demonstrating

that

customer

information

can

be

be shared while

observing these complex requirements.

Difficulty managing employee relationships - In today 's fast-paced business environment, automotive companies need to ensure that their most valuable asset their employees -have immediate access to the critical information, services, and applications required to be productive. Organizations must enable employees to make better decisions, work collaboratively, enhance customer relationships, and maximize productive time. Global automotive enterprises must be able to enact and enforce consistent policies across business units, instill a common corporate culture

across

employees

with

a

geographically effective

search

dispersed tools

and diverse workforce, equip

to training necessary to service

customers in a volatile and demanding market.

TARGET SEGMENT To reach to rural and lower middle class consumers. They begin with small concentrated markets appealing to local culture and aspirations of the targeted area

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

Mode of Communication They reach to customers by giving advertisements in the T.V. or through radio, through wall painting, or through promotional activities like weakly haats, mela or local bazaars

and

most importantly, their policies were flexible and they could adapt to fast changing marketing situations. Through Internet, E-mail usage, communication media like telephone and mail facility this mode of communication is possible to a great extent. ITC‟s extensive India-wide distribution network enables its greeting cards reach over 12,000 multi brand outlets in over 700 cities across the country. In the last three years, 10,000 greeting card designs have reached these outlets with the help of ITC's web-enabled e-commerce model –Communication Model ITC markets

Opportunity These days‟ consumers are

looking for

convenience and

instant

gratification.

Communication media like the telephone and e-mail facilitate communication to a great extent. But many greeting card sites are moving from a 'free' to a 'pay' mode. This could be an emerging revenue earning opportunity for content providers.

Threats 'Expressions' which is a competitor of ITC in this segment is currently the second biggest greeting card brand in India with a market share of 20 per cent. ITC has a five per cent share in the stationery market. The greeting card market in India is estimated to be around Rs. 250 crore in terms of yearly consumer spent. The unorganized sector in the greeting card market will be close to 40 per cent. The organized sector, controlling 60 per cent of the market, is divided between ITC, Archie‟s and Hallmark. While Archie‟s has licensing agreements with international greetings brands

CONCLUSION

The price of a car is just one-third of what it cost you over its lifetime. Running and maintaining it make up the other two-thirds. Take into account resale value and its real cost becomes clear. Maruti Suzuki stands for value as much as it stands for performance. In spite of rising input costs, we try our best to keep prices down. Their running costs and resale values are unbeatable too. Nothing matches the delight their cars deliver. In the JD Power CSI study 2005, 85% of Maruti Suzuki owners stated that they would definitely recommend the car they drive to someone else. Infact, you don‟t buy a Maruti Suzuki. You invest in it.

After the rash of new cars launches the past two years, the relative lull in the auto industry is showing up in the customer satisfaction indices. According to the 2005 four-wheeler Total Customer Satisfaction (TCS) study conducted by the specialist division of TNS Automotive, the automobile ownership experience or customer ownership experience has declined in all areas compared to 2004. The study is one of the largest syndicated automotive studies in India, representing the responses of more than 7,000 new car buyers. The comprehensive study covers over 50 models with customer evaluations taken in the key areas of sales satisfaction, product quality, vehicle performance and design, after-sales service, brand image, and cost- ofownership. 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.

The study reveals a significant increase in the importance of sales satisfaction, product quality (both performance and design) and brand image since 2003, indicating rising customer expectations over the years. This year's study shows the Maruti Suzuki Swift and the Toyota Innova as the winners, with the two vehicles achieving segment-best ratings by performing well in areas of greater relevance, particularly product and brand image. Sales satisfaction is weak in both these models, largely because of the longer waiting time for new deliveries.

AREAS FOR IMPOVEMENT / RECOMMENDATION

Facade/Quality of Dealership should be improve

Uniform of Sales Executives

Proper visiting cards should be available to the executives

Mostly dealers don‟t have their specific website

All Japanese 5‟s concept (Seiro, Sieton, Sciso, Seioetse, Shitsuke) should be put into practice at Dealership

Maruti should regard as generous discount offers during Festival Season like Navratra, Dusshera, and Diwali to gear-up their sales

Maruti should advertise in Sports because sports are increasingly cutting into the share of mass entertainment channels

Maruti can start Money Bond Scheme instead of giving Cash Discount with more value. Customers eligible for an income bond, encashable after a 15year period.

BIBLOGRAPHY

www.google.com www.maruti.com

www.wikipedia.com