Maruti Suzuki Mktng Strategy

32
MARUTI MARUTI MARKETING MARKETING STRATEGY AND ITS STRATEGY AND ITS STRENGTHS AND STRENGTHS AND WEAKNESSES WEAKNESSES Jai Prakash Choudhary Nishant Bhadauria MBA –PM UNIVERSITY OF PETROLEUM AND ENERGY STUDIES  

Transcript of Maruti Suzuki Mktng Strategy

Page 1: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 1/32

MARUTIMARUTI MARKETINGMARKETINGSTRATEGY AND ITSSTRATEGY AND ITS

STRENGTHS ANDSTRENGTHS ANDWEAKNESSESWEAKNESSES

Jai Prakash Choudhary Nishant Bhadauria

MBA –PM

UNIVERSITY OF PETROLEUM AND ENERGY STUDIES

Page 2: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 2/32

OverviewOverviewOverviewOverview

Car SegmentsMaruti Suzuki PortfolioStrategies (Marketing and Promotion)Competition

Page 3: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 3/32

BRIEF HISTORYBRIEF HISTORYBRIEF HISTORYBRIEF HISTORY

Source: World Bank, Provided by GAIL India Ltd. (2001-02)

Maruti Udyog Limited (MUL) was establishedin Feb 1981 through an Act of Parliament, tomeet the growing demand of a personal

mode of transport caused by the lack of anefficient public transport system

MUL launched its first car Maruti800 onMUL launched its first car Maruti800 on

december 14,1983 at initial price of Rs.december 14,1983 at initial price of Rs.47,500.47,500.

Page 4: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 4/32

4

The Suzuki Collaboration The Suzuki Collaboration The Suzuki Collaboration The Suzuki CollaborationSuzuki Motor Company was chosen from sevenprospective partners worldwide. This was due not onlyto their undisputed leadership in small cars but also totheir commitment to actively bring to MUL

contemporary technology and Japanese managementpractices . A license and a Joint Venture agreement wassigned between Govt of India and Suzuki MotorCompany (now Suzuki Motor Corporation of Japan) inOct 1982

Suzuki brought efficient managementpractices,bettertechnology and administration.

Initiall Suzuki held the 26% stake in Maruti Suzuki .

Page 5: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 5/32

5

MARKETING STRATEGY OF MULMARKETING STRATEGY OF MULIN LATE 1980’sIN LATE 1980’s

MARKETING STRATEGY OF MULMARKETING STRATEGY OF MULIN LATE 1980’sIN LATE 1980’s

Maruti was the first company in India which studied the consumer demandand responded to it well.

Market segmentation policy was adopted that targeted different type of consumers with different type of models.

Maruti800 targeted medium income group,while the deluxe modeltargeted rich income group.

Maruti van targeted businessmen and doctors(ambulance)

The Gypsy targeted the paramilitary forces and the police.

This resulted in complete control of maruti over the market .

The company advertised its different products according to costumerse.g- maruti van was rechristened as Omni .

A special cell was made to make direct dealing of Gypsy with thegovernment & the army.

Page 6: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 6/32

6

THE MAJOR FAULTS THE MAJOR FAULTS THE MAJOR FAULTS THE MAJOR FAULTS The MUL depended more on its M800model, so when in late 1990’s the newplayers like when Matiz, Santro andIndica came into the market with morespace and better comfort ,at sameprice, then Maruti lost a major share

of market.

Page 7: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 7/327

The changing Auto Industry The changing Auto Industry The changing Auto Industry The changing Auto IndustryAfter year 2000,(and 2003 to be moreprecise)there was a change inautomobile market which where due to-

1. The government has reducedregulation on the industry and moreforeign players were invited.

2. Banks and other financing companiesstarted providing car loans at reasonableinterest rate

Page 8: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 8/328

ImpactsImpactsImpactsImpacts The Indian consumer now startedbuying the mid-size cars rather thansmall cars ,the luxury cars also gainedpopularity,SUV’s also started comingin the market.

The increasing level of income of

urban people ,the small cars were notconsidered to be luxury item anymore.

Page 9: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 9/329

THE RESPONSE OF MARUTI THE RESPONSE OF MARUTI THE RESPONSE OF MARUTI THE RESPONSE OF MARUTI To gain back its lost share Maruti launched Zen ,Alto andWagonR.These small segment car gained huge response forconsumers.Maruti also launched aggressive promotional policy topromote them like announcing Zen as the “world’s car”.Maruti also made a slogan “count on us”.To emphasize itsreliabilityIn 2003 maruti came up with “change your life campaign” ,itprovided vehicle insurance at just Rs 1 to attract thecustomers.advertisment such as of Alto in which a small boy says to hisfather ”papa ki karan petrol khatam hi nahi honda” was makecustomer feel that Alto was best fuel efficient.During 2003 and 2004, MUL visualized and implemented astrategy for its dealers to increase their profitability levels inview of increased competition. According to the strategy, the300-odd dealers of the company were asked to strengthentheir manpower, increase the salaries of their sales agents,and offer them better incentives.

Page 10: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 10/3210

During 2003 and 2004, MUL visualized and implemented astrategy for its dealers to increase their profitability levels inview of increased competition. According to the strategy, the300-odd dealers of the company were asked to strengthentheir manpower, increase the salaries of their sales agents,and offer them better incentives.

q '2599' offer -In 2004, MUL introduced the '2599' offer underwhich a consumer could buy an M-800 by paying an EMI of Rs2,599 only, for a period of seven years. The down paymentwas fixed at Rs 40,000. MUL entered into an agreement withthe State Bank of India (SBI), the largest bank in India, topromote this scheme

Page 11: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 11/32

Car SegmentationCar Segmentation

http://www.surfindia.com/automobile/automobile-industry.html

Page 12: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 12/32

Major players in theMajor players in the

The Journal of Business Perspective, Vol 10, No 1: Jan - Mar 2006

Page 13: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 13/32

Maruti 800 : Change Your LifeMaruti 800 : Change Your LifeMaruti 800 : Change Your LifeMaruti 800 : Change Your Life The Maruti 800, has gone beyond just acar, it has actually changed the lives andlifestyles of countless people, by bringing

the joy of motoring to millions across thelength and breadth of the country

Page 14: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 14/32

Alto: Let’s goAlto: Let’s go

The alto is a great combination of economy ,practicality and styling. A runaway success

on the roads of Europe, it exemplifies thebenchmark in build, quality and reliability ina compact car. This is testified by the 24-hour endurance record set on Aug 03, 2003

of covering 3082 kms in 24 hours at anaverage speed of 128kmph.

Page 15: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 15/32

Omni: Fits allOmni: Fits allOmni: Fits allOmni: Fits all

The Omni is truly India’s originalMultipurpose vehicle. Today it is available in

6 Avtars – 5 Seater, 8 Seater, Cargo,Ambulance, CNG and LPG. It meets diverseneeds across different user segments andcan double up both as a people carrier and

a goods carrier. This faithful workhorse iseasy on the pocket, yet tough on the job.

Page 16: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 16/32

Zen Estilo: Shape Your WorldZen Estilo: Shape Your WorldZen Estilo: Shape Your WorldZen Estilo: Shape Your World

A Spanish expression for Style, the new ZenEstillo stands true to its name. Its

aerodynamic body, unique bean shape,sparkling colors and snazzy lights will rev upyour style quotient. An amazing blend of style and substance, its agile nature willleave you enthralled.

Page 17: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 17/32

Wagon R: For the Smarter RaceWagon R: For the Smarter RaceWagon R: For the Smarter RaceWagon R: For the Smarter Race

Drive with complete peace of mind. Theword-class safety features of the wagonRkeep you safe and secure, always.Wearing new vibrant colors, the newwagonR is full of freshness and energy tokeep you charged up and always to go.

Page 18: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 18/32

Easy Finance OptionsEasy Finance OptionsEasy Finance OptionsEasy Finance Options76% of Maruti cars are financed

44% through Maruti Finance , 12 %

through SBI and associate banksIn year 2006-07, it added Mahindra Finance,Magma Leasing , Cholamandalam and Axis

Bank.

Page 19: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 19/32

19

Maruti’s MarketshareMaruti’s Marketshare

Segment A:Maruti 800, Omni

Segment B:Zen, Alto, Wagon R

Segment C:Swift, Esteem, Baleno

Page 20: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 20/32

Maruti Suzuki Product PortfolioMaruti Suzuki Product PortfolioMaruti Suzuki Product PortfolioMaruti Suzuki Product Portfolio

Maruti 800OmniAltoWagonRSwiftZenGypsyEsteemVersaSX4Grand Vitara

Page 21: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 21/32

The TheCompetitionCompetition

HYUNDAI SANTRO

• TATA INDICA

CHEVY SPARK

Page 22: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 22/32

22

Hyundai SantroHyundai Santro

+Santro rated “Best Small Car” in JD Power Asia Pacific Initial Quality and

APPEAL studies.+ European styling , power-assisted brakes, advanced suspension system and

uniquely responsive engine.+ Celebrity endorsed (Shahrukh Khan and Preity Zinta).+ Hyundai had a national network of 300 sales and service outlets.- The spares are expensive than that of Maruti

- TATA INDICA+ Car built for Indians by Indians+ Ambassador’s internal dimension and Maruti 800’s price with option of diesel

engine+ Has a sleek fascia with chrome lined grill, clear lens illumination, muscled flares,

flexible seating and electronic instrumentation with tachometer.

+ Cheaper and home grown spares.+ Has lowest running cost (around Rs. 2.06 /km)

Chevrolet SparkGeneral Motors rolled out its small car Chevrolet Spark in India as it takes on

market leader Maruti Suzuki.

+ Rs 3.09 lakh (Ex-showroom Delhi) slightly lower than Maruti’s Zen Estillo basemodel. Improved cabin space

Page 23: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 23/32

23

Competitive Advantage of MULCompetitive Advantage of MUL

Dealer network across the countryA wide dealership network allows the company to service customers over a

wider geographical area than competitors. Currently, MUL has 500 salesoutlets that cover 312 cities, as compared to 162 outlets of Hyundai Motorsand 140 outlets of Tata Motors

B True Value Operations

MUL providing its customers an opportunity to resale their car to MUL orexchange with a new Maruti car under its “True Value” network has provenreally beneficial. In FY07 True Value network touched 10000 units a monthand more than 90% of that resulted in the exchange of a new car

C Presence across segments

In a car manufacturing plant, the press shop, paint shop, engine andtransmission

assembly, and machine shop are used for manufacturing different modelsA

Page 24: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 24/32

24

Higher localisation

it has rationalised vendors from 370 in 1999-00 to 225 in

2005-06 has resulted in MUL enjoying the highest operatingmargins amongst its peers

Commonality of platforms-

Commonality between the platforms of various modelslead to lower product development efforts andhigher benefits of economies of scale.uses only twoplatforms

Strong support in R & D and Product from parent -MUL’s strength lies in the strong parentage of SMC,

Japan. The Japanese SMC helps MUL in R&D and newmodel launches, as the Indian subsidiary contributesmore than 25% of the parent net income. Thecompany also has access to its parent's productportfolio, , which allows it to launch the latestproducts in domestic markets. Zen Estillowaslaunched in a very short period of nine months with

Page 25: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 25/32

25

Increasing Productivity-Increasing Productivity- MUL enjoys one of the best operatingMUL enjoys one of the best operatingmargins in its peer group at 13.6% and 10.7% at the net income levelmargins in its peer group at 13.6% and 10.7% at the net income levelin FY07. The company has rationalised its work force, therebyin FY07. The company has rationalised its work force, therebyreducing the man-hours spent in producing a vehicle by around 21%reducing the man-hours spent in producing a vehicle by around 21%

in the last 3 years. This has helped it to cut cost of producing per unitin the last 3 years. This has helped it to cut cost of producing per unitof vehicle.of vehicle.

Page 26: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 26/32

26

The company’s Strategies The company’s Strategies The company’s Strategies The company’s Strategies

Page 27: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 27/32

ExportsExportsExportsExports

Page 28: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 28/32

Maruti’s current problemsMaruti’s current problemsMaruti’s current problemsMaruti’s current problemsMaruti Suzuki is far behind in luxuryand SUV car ,the other player likeGM,TATA,Mahindra ,Mitsubhisi and

Toyota are already established in themarket ,so replacing them would notbe easy.MUL has been now emphasizingconsistently on it’s “Best customersatisfaction” car to keep anpsychological impact on costumers.

Page 29: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 29/32

Page 30: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 30/32

Supply ChainSupply ChainSupply ChainSupply Chain The joint initiatives taken by Marutiand its team of suppliers havegenerated over 29% cost reductionover three years for MarutiLess than 20 per cent of a car ismanufactured in-house. The rest is

accounted for by 215 suppliers andhundreds of second and third tier of vendors who, in turn, supply to them.

Page 31: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 31/32

31

The Recent Launches The Recent Launches The Recent Launches The Recent LaunchesMaruti has launched two luxurymodels SX4 in 2006 and A STAR inNov 2008 ,these two models arefacing intense competition fromalready established companies.

Page 32: Maruti Suzuki Mktng Strategy

8/14/2019 Maruti Suzuki Mktng Strategy

http://slidepdf.com/reader/full/maruti-suzuki-mktng-strategy 32/32

Thank You