Maruti market expantion startegies of maruti

20
MARKET EXPANTION STARTEGIES OF MARUTI UDYOG Presented by: Ajay Kumar Munish Kumar
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    12-Sep-2014
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presentation on marketing management

Transcript of Maruti market expantion startegies of maruti

Page 1: Maruti market expantion startegies of maruti

CASE STUDY ON MARKET

EXPANTION STARTEGIES OF MARUTI UDYOG

Presented by: Ajay Kumar

Munish Kumar

Page 2: Maruti market expantion startegies of maruti

A BRIEF INTRODUCTION TO CASE AND MARUTI UDYOG

In 1982, Government of India entered into a joint venture with Suzuki motor corporation of Japan

Plant was established at Gurgaon in Haryana

Page 3: Maruti market expantion startegies of maruti

Launched its first model M-800 on December14,

1983

Maruti Gypsy in 1985

SMC’c share increased from 26% to 40% in 1987

Maruti 1000 launched in 1990

Liberalization of Indian economy in 1991

Maruti Zen launched in 1993

Delicencing of passenger car industry in 1993

Page 4: Maruti market expantion startegies of maruti

Maruti 800

Page 6: Maruti market expantion startegies of maruti

Maruti esteem launched in 1994, production reached

one million cars

Difference of opinion between GOI and SMC

regarding appointment of MD in 1997

Production reached 2 million cars in 1997

Maruti baleno and wagonR launched in 1999

Alto Lx and Alto Vx1 launched in 2000, production

reached 3million

Page 7: Maruti market expantion startegies of maruti

Suzuki takes over control in Maruti Udyog by hiking

its stake in the company from 50% to 54.2%, Maruti

Udyog becomes the subsidiary of Suzuki in 2002

Alto declared Best selling car in India in 2004

Unveils Versa Variant At Rs 3.27 Lakh in same year

Launched “2599’, &“Teacher plus” schemes to

increase sales of M-800

Page 8: Maruti market expantion startegies of maruti

Threat from new players: High

Major players are presents

Few more are expected to enter

Market strength of consumers: Increasing

Increase awareness among consumers

Increased competition has limited the pricing

power of manufacturers

Threats from substitutes: low to

mediumThreat from mini cars

Market strength of suppliers: Low

Large no. of automotive

components suppliers

COMPETITIVE FORCES IN INDIAN PASSENGER CAR MARKET

Page 9: Maruti market expantion startegies of maruti

STRENTHSContemporary

technologyJapanese Management

practices After sale services

DistributionDiversification & R&D

WEAKNESSStill depends upon

SUZUKI COPORATION

10% components are manufactured outside

IndiaStill considered as poor

man’s brandUnaccustomed to

international standards or keen competition.

SWOT Analysis of Maruti Udyog

Page 10: Maruti market expantion startegies of maruti

• STRENGTHS• Largest manufacturing

capacity• Distribution network• Expertise in Small cars

• OPPURTUNITIES• Untapped rural

market• Young bikers

• Growth in economy

• WEAKNEESES• Brand positioning• Dependent upon

Imported diesel engine

• THREATS• New entrants• New emission

norms

SO StrategyTo capture untapped rural and yongistan

market

ST StrategyTo launch a

car like CERVO

TOWS MATRIX

Page 11: Maruti market expantion startegies of maruti

Cost leadership

Differentiation

Cost Focus

Focus Differentiation

Lower cost Differentiation

Broad target

Narrow target

GENERIC COMPETITIVE STRATEGIES

Page 12: Maruti market expantion startegies of maruti

TURN AROUND STRATEGIES In wake of diminishing profits and market share Maruti

initiated strategic responses with India’s liberalization process:

This can be observed from mission statement of Maruti1984: “Fuel efficient vehicle with latest technology”1997: “Creating customer delight and shareholders wealth”

Cost leadership

Cost focus

TO

Page 13: Maruti market expantion startegies of maruti

STARS

Swift

DOGSM-800

BCG Matrix with respect to Maruti models

Page 14: Maruti market expantion startegies of maruti

Q1:What was the rationale for MUL to adopt promotions like “2599”, “Teacher plus”, and “Do se char” offers? Do you think MUL’s sales promotion campaign was effective?

Rationale: Because of focus strategy Maruti want to convert two wheelers owners to four wheeler owners

Want to penetrate at the bottom of the pyramid

Campaign effectiveness: Not effective M-800 was mini segment and people getting Alto compact segment car by just paying little extra M-800 on the declining stage of product life cycle Unattractiveness among people due to old design where as Alto was present with contemporary design

Page 15: Maruti market expantion startegies of maruti

60,629 Units

108 % During 2004-05

1,26,223 units

Sales of Alto

85,000 Units(2003-04)

60,000 Units(Apr2004-Sep2005)

Sales of M-800

Page 16: Maruti market expantion startegies of maruti

Q2:Discuss the implications of MUL’s premium compact car ‘swift’ priced at Rs. 3,87,000 for its competitors. Also, given that its compact car, wagon R, is available in the same price range, discuss the steps MUL must take to prevent the cannibalization of its sales.A: Swift was launched with price competitive strategy Direct competition with Hyundai Getz (Rs. 4,50,000) As both brands are known for their value price offering Swift definitely has an edge over its direct competitor Getz due to: - Brand image & strong service centre

Steps to prevent cannibalization: Focus on advertising based on benefits to differentiate themselves in the market. Swift was a hatchback model so MUL should position swift as an next value product in between compact and mid size car

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Q3: MUL prides itself in providing the lowest priced car(M-800) to its customer, Tata motors intends to launch the Rs. 1,00,000 car by 2008. What, in, your opinion, would be the implementation of this launch for MUL?

Page 18: Maruti market expantion startegies of maruti

A: Implications for MUL: It will cannibalize the sales of M-800 If the car has contemporary design and Euro

4 norms it will the only car available in mini car segment as Maruti has euro 3 norms

With this Tata will penetrate towards the lower segment of value pyramid which is providing maximum market share to Maruti

Steps to counter Nano effect:New contemporary design should be

launchedReduce the engine capacity to make it price

effective and milegeable

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Q4: Refering to the availability of pre-owned cars, an industry analyst said, “If the customer get a santro or wagon R for the prices of an 800, why would he prefer the small car?” In light of this statement, how can MUL differentiate its promotional campaigns between its new and pre-owned/used car market?A: Maruti should launch advertising campaign to arouse feeling in you or reminding your dreams of a new car

It should give a customized car

Should introduce peace of mind concept in advertisement campaign

o It may use promotional campaign to reduce perceived risk in the mind of customer regarding pre-owned cars

o promotional campaign which enlighten warranty given in pre-owned cars

Page 20: Maruti market expantion startegies of maruti

KIZASHI

THANK YOU…. Any Suggestions?