FINAL REPORT

A THESIS ON

“MARKETING STRATEGIES OF MARUTI

SUZUKI LIMITED TO BE A LEADER IN
AUTOMOBILE INDUSTRY.”

BY
GAURANG PATEL
[8NBAM128]
 A PROJECT ON

“MARKETING STRATEGIES OF MARUTI

SUZUKI LIMITED TO BE A LEADER IN
AUTOMOBILE INDUSTRY.”

To, BY,
Dr. Dipti Sethi GAURANG PATEL
(8NBAM128)

A Report submitted in partial fulfillment of

The requirement of
THE MBA PROGRAM
(The class of 2010)

2
 Table of content

Acknowledgement……………………………………………………4
Abbreviation…………………………………………………………..5
Abstract……………………………………………………………….6

1. Introduction………………………………………………………..7
1.1 Indian automobile sector ………………………..……….7
1.2 Current Scenario of Automobile sector in India ……….8
1.3 Key players in Automobile Industry …………………….9
1.4 Cars by Price Range……………………………………..10

2. Company Profile…………………………………………………12
2.1 introduction of Maruti……………………………………12
2.2 About Maruti Suzuki……….……………………………13
2.3 SWOT Analysis of Maruti Suzuki…………..………….14

3. Marketing Strategies of Maruti Suzuki…………………….….15

4. Why go for Maruti Suzuki…………….…………………….…..21
5. Maruti Suzuki’s key Success factors………………………….23
6. Maruti Suzuki’s Brand Equity………………………………….24
7. Quality certificate of Maruti Suzuki……………………..…….25
8. Objective of the study………………………………………….26
10. Literature Review………………………………………….….27
11. Research Methodology………………………………………34
12. Data Analysis & Interpretation……………………………....35
13. Discussion & Implication……………………………………..42
14. Recommendations……………………………………….……44
15. Conclusion……………………………………………………..45
16. References ……………………………………………….…...46
17. Appendix………………………………………………………..47

3
 Acknowledgement

First of all I would like to thank Inc, ASIM for giving

me a great opportunity to work on my semester
project work.

Then I would like to thank my MT Supervisor Dr.

Dipti Sethi, for guiding me through my research
project. Her encouragement, time and effort are
greatly appreciated. It was a truly wonderful learning
experience.

I would also like to thank Mr. Sanjay patel (Sales

executive of Maruti Suzuki Showroom of Asarwa
branch) for their valuable information on Maruti
Suzuki and current market trend in automobile
industry. Once again my gratitude to all Showrooms
representatives of Maruti Suzuki for their kind co-
operation.

Lastly I would like to thank all my friends and

respondents who offered their opinions and
suggestions through the survey that was conducted
by me in Ahmadabad.

4
 Abbreviation

MASSs - Maruti Authorized Service Stations,

MSMs - Maruti Service Masters.
MUV – Multi Utility Vehicles
SUV – Small Utility Vehicles
MGA - Maruti Genuine Accessories
CSI – Consumer satisfaction Index
EMI – Equitable Monthly Installment
ABRS - Air Bag Restraint System
GDP – Gross Domestic products
BHP - Brake Horsepower
KM/H - Kilometers per Hour
LCD - Liquid Crystal Display
P/B - Power Bakes

5
 Abstract

In this project I am trying to find the marketing

Strategies of Maruti Suzuki and its effect on
customer. I am also trying to study the sales trend
followed by Maruti Suzuki. In this study I had
followed different method to find and analyze the
data we are using primary data as well as secondary
data. I had used the questionnaire method to study
the Maruti sales trend we had asked question to
dealers. In Ahmedabad I have visited five showroom
of Maruti Suzuki them and tried to know that what
are the cars which they are selling more what is the
sales trend of Maruti which kind of cars customer is
demanding and why. What modification should
Maruti make in its cars to take an edge over
competitors?

The Indian Automobile Market is expected to grow at

a CAGR of 9.5 percent amounting to Rs. 13,008
million by 2010. The Commercial Vehicle Segment
has been contributing to the automobile market to a
great extent.

Many foreign companies have been investing in the

Indian Automobile Market in various ways such as
technology transfers, joint ventures, strategic
alliances, exports, and financial collaborations. The
auto market in India can boast of attractive finance

6
schemes, increasing purchasing power, and launch
of the latest products.

Maruti Suzuki is India’s No. 1 customer satisfaction

car company. Its sale is more than 50% of care of
Indian car market. But now it is getting a good
competition with other new car company and foreign
companies and its sales is going down because
other car companies are trying to present different
types of new car in different segment.

7
\

Introduction
Indian Automobile Sector - A Booming Market"

De-licensing in 1991 has put the Indian automobile industry

on a new growth track, attracting foreign auto giants to set up their
production facilities in the country to take advantage of various
benefits it offers. This took the Indian automobile production from
5.3 Million Units in 2001-02 to 10.8 Million Units in 2007-08. The
other reasons attracting global auto manufacturers to India are the
country’s large middle class population, growing earning power,
strong technological capability and availability of trained manpower
at competitive prices. These are the major findings of our new
report, "Indian Automobile Sector - A Booming Market”

In 2006-07, the Indian automotive industry provided direct

employment to more than 300,000 people, exported auto
component worth around US$ 2.87 Billion, and contributed 5% to
the GDP. Due to this large contribution of the industry in the national
economy, the Indian government lifted the requirement of forging
joint ventures for foreign companies, which attracted global to the
Indian market to establish their plants, resulting in heightened
automobile production.

The Indian automobile market is currently dominated by two-

wheeler segment but in future, the demand for passenger cars and
commercial vehicles will increase with industrial development. Also,
as India has low vehicle presence (with passenger car stock of only
around 11 per 1,000 population in 2008), it possesses substantial
potential for growth.

8
Current scenario of automobile sector in India
According to Bloomberg L.P., in 2009 India surpassed China as
Asia's fourth largest exporter of cars.

In 2009 estimated rate of growth of India auto industry is going to be

9 percent. Auto industry in India has been hit hard by ongoing global
financial recession. Sales figures of India automobile industry for
December 2008 have shown devastating after effects of global
financial slowdown.

However, there is still hope for automobile industry of India in 2009

as there are certain factors working in its favor. India is blessed with
a middle class, which is getting economically stronger with every
passing day. This class is being touted as potential consumers for
India auto industry in years to come.

India automobile market is likely to be in good shape in 2009. Much

of this optimism results from renewed interest being shown in India
auto industry by reputed overseas car makers. Nissan Motors,
which is a well known Japanese car making company, regards India
automobile market as a global car manufacturing hub for future.

The Indian Automobile Market is expected to grow at a CAGR of 9.5

percent amounting to Rs. 13,008 million by 2010. The Commercial
Vehicle Segment has been contributing to the automobile market to
a great extent. Many foreign companies have been investing in the
Indian Automobile Market in various ways such as technology
transfers, joint ventures, strategic alliances, exports, and financial
collaborations. The auto market in India can boast of attractive
finance schemes, increasing purchasing power, and launch of the
latest products.

9
India domestic auto industry
India domestic auto industry has been passing through a
tough phase in 2008 and such a trend is supposed to continue
in 2009 as well. Leading members of India auto industry have
forecast a difficult path in 2009. Shinzo Nakanishi, managing
director of Maruti Suzuki, has said that 2009 would present
them with a number of challenges. fitted greatly from China
auto insurance policies. One example is Huatai Insurance Co,
which generates 70 percent of its income from these policies.

Key Players in automobile industry:

 Maruti Suzuki
 TATA
 Hyundai
 Honda
 Ford
 Toyota
 Fiat
 Skoda
 Audi
 Mercedes Benz
 BMW
 Volkswagen
 Mitsubishi
 Mahindra

10
 Cars by Price Range:
Under Rs. 3
Maruti 800, Alto, Omni, Reva
Lakhs
 Ambassador
 Fiat Palio
 Hyundai Santro, Getz
 Chevrolet Opel Corsa
Rs. 3-5 Lakhs  Maruti Zen, Wagon
R, Versa, Esteem, Gypsy, Maruti
Suzuki A-Star
 Ford Icon & Fiesta

 Tata Indica, Indigo XL, Indigo Marina

 Chevrolet Swing, Optra Magnum,
Tavera
 Hyundai Accent, Elantra
 Mahindra Scorpio
 Maruti Baleno
Rs. 5-10  Toyota Innova
Lakhs  Tata Safari
 Mitsubishi Lancer, Mitsubishi Cedia
 Honda City ZX, Honda Jazz New
 Mahindra Bolero
 Hyundai Sonata Embera

 Fiat Linea
 Toyota Corolla, Toyota Corolla Altis
 Ford Mondeo & Endeavour
Rs. 10-15  Chevrolet Forester
Lakhs  Skoda Octavia & Combi

 Honda Civic

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  Honda CR-V
 Maruti Suzuki Grand Vitara
 Terracan & Tucson
 Mitsubishi Pajero
Rs. 15-30  Audi A4
Lakh  Opel Vectra
 Honda Accord
 Mercedes C Class
 New Skoda Superb New

 Toyota Camry
 Audi A6, A8 & Audi TT
 BMW X5, 5 Series & 7 Series
 Mercedes E Class, S Class, SLK, SL
Rs. 30-90 & CLS-Class
Lakhs  Porsche Boxster, Cayenne, 911
Carrera & Cayman S

 Toyota Prado
 Bentley Arnage, Bentley Continental
Above Rs. 1 GT & Flying Spur
Crore  Rolls Royce Phantom

 Maybach

12
 Introduction of Maruti Suzuki
Maruti Suzuki

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.

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

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.

Core Value
 Customer Obsession
 Fast, Flexible and First Mover
 Innovation and Creativity
 Networking and Partnership
 Openness and Learning

Their focus is on:

 Building a continuously improving organization adaptable to

quick changes
 Providing value and satisfaction to the customer
 Aligning and fully involving all our employees, suppliers and
dealers to face competition

13
  Maximizing Shareholder's value
 Being a responsible corporate citizen

About Maruti Suzuki

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
utilized. The basic philosophy of management that underlies the
Maruti culture is that all employees of the company should be
molded 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.

At Maruti They do not believe in the notion of organizational

hierarchies. As a matter of fact, the management structure and
systems in Maruti have been designed to promote decentralization
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.

14
 SWOT Analysis of Maruti Suzuki

Strength

1. Brand Loyalty
2. Service and Distribution Network
3. Japanese Technology

Weakness

1. Changing Customer Preferences.

2. Appears Daddy’s Brand

Opportunities

1. Attraction of Youth.
2. Increasing Middle Class Income.
3. Export Small Cars.

Threats

1. Foreign Brands.
2. Fuel Prices.

15
 Marketing Strategy of Maruti Suzuki

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.

16
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.

17
 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.

18
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.

19
 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, car-care products and
utility products.

20
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.

21
WHY GO FOR MARUTI SUZUKI?
The Quality Advantage

Maruti Suzuki owners experience fewer problems with their

vehicles than any other car 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 mid - size car segment. This study
measures owner in terms of design, content, layout and
performance of vehicles across 8 parameters.

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.

22
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 Maruit Suzuki. It is in the economy segment that
the affordability of spares is most competitive, and it is here
where Maruti Suzuki shines.

Lowest Cost of Ownership

The 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.

We 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.

Feb- Feb-
Change
Manufacturer 2009 2008
Maruti Suzuki 70,625 59,311 +19.1%
Mahindra &
14,720 12,562 +17.2%
Mahindra
Mahindra Renault 1,008 2,751 -63.4%
Hyundai 21,215 14,600 +45.3%
Tata Motors 19,039 18,766 +1.5%

23
General Motors 4,921 5,563 -11.5%
Honda 5,579 3,774 -47.8%
Maruti Suzuki’s Key Success factors
A. Technology-Related KSF’s

1. R&D facilities and Japanese collaboration.

2. Suzuki internationally known for Small cars
3. Launch of World class quality cars like A- STAR and SPLASH

B. Manufacturing-Related KSF’s

1. Designing cars best suited for Indian market.

2. Cost leadership in the market due to efficient value chain and
manufacturing plants.

C. Distribution-Related KSF’s

1. The record sales performance was affected through the

Company's vast dealership network.
2. Car sales outlet increased to 600 covering 393 cities.
3. There are 265 ‘Maruti True Value’ outlets spread across 166
cities, which are engaged in the sale, purchase and exchange of
pre-owned cars.

D. Marketing-Related KSF’s

1. Full range of cars- from entry level Maruti 800 & Alto to stylish
hatchback A- star, Swift, Wagon R, Estillo and sedans DZire, SX4
and Sports Utility vehicle Grand Vitara.
2. Communication through advertisement is totally to the need of
Indian culture
3. Pan-India service network.

E. Skills and Capability -Related KSF’s

24
1. The service network had a total of 2,628 service outlets including
dealer workshop as well as Maruti Authorized Service Stations,
covering 1220 cities.

Maruti Suzuki’s Brand Equity

A. Authorized Service Stations

Maruti is one of the companies in India which has unparalleled

service network. To ensure the vehicles sold by them are serviced
properly Maruti has 2628 listed Authorized service stations and
Express Service Stations on 30 highways across India.

B. Maruti Insurance

This service started as a benefit or value addition to customers and

was able to ramp up easily. By December 2005 they were able to
sell more than two million insurance policies since its inception.

C. Maruti Finance

To promote its bottom line growth, Maruti launched Maruti Finance

in January 2002.Maruti claims that its finance program offers
competitive interest rates to its customers, which are lower by
0.25% to 0.5% from the market rates.

D. Maruti True Value

Maruti True service offered by Maruti Udyog to its customers. It is a

market place for used Maruti Vehicles. One can buy, sell or
exchange used Maruti vehicles with the help of this service.

E. Accessories
Maruti started a new initiative under the brand name Maruti Genuine

F. N2N Fleet Management

N2N is the short form of End to End Fleet Management.

25
G. Maruti Driving School
As part of its corporate social responsibility Maruti Udyog launched.

Quality for sure:

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
9001:2000 certification.

ISO

9001:2000 CERTIFICATION

26
 Objectives of the study

 The main objective is to study the different marketing

strategies of Maruti Suzuki.
 To know the current market position of Maruti Udyog Limited.
 To Study the Consumer Behavior.
 To Study the Brand preference of the consumer.
 To Study the rapid changing perception of consumers towards
small segment cars.
 To Study the satisfaction level with after sales services of
company.
 To make suggestions to the company to improve the level of
satisfaction among customers.
 To know the price effect on the purchase of the cars. A
comparative study on level of customer perception towards
Maruti Suzuki Company to other automobile Companies.
 To study recognize the sales trend and segmentation of
Maruti Suzuki.
 Along with this we are trying to assess company’s
performance compared with that of the competition.
 To know the way Maruti has segmented its cars
 To know the areas in which the dealers satisfy their customer
and the areas that they do not satisfy.
 To come out with the conclusion and recommendations based
on the analysis and interpretation.

27
 Literature review

Maruti Suzuki raises prices of sum existing model

Maruti Suzuki, India's top carmaker, said on Saturday it has raised

the prices of some of its models to recover the rise in input costs. It
said the price increases, effective immediately, varied from 0.12% to
1.9% with an average price rise of 0.6%.

Maruti Suzuki India Limited announced a marginal increase in the

price of its models, excluding recently launched Eeco, Swift (Petrol)
and Gypsy models. The price increase varies from 0.12 per cent
(Ritz VDi) to 1.90 per cent (Dzire LXi). For the affected models, the
average increase in prices is around 0.6 percent.

The price increase is to partly recover the increase in the input costs
arising out of raw material costs over the past one year. For some
models the increase in the costs are being absorbed by the
company, in the light of market situation.

There was no increase in prices of its recently launched five-seater

multipurpose vehicle Eeco, the petrol version of its Swift hatchback
and its Gypsy utility vehicles, it said in its statement. "For some
models the increase in the costs are being absorbed by the
company, in the light of market situation.

To maintain its market share, the company plans to aggressively

develop its marketing network as well as work on reducing the cost
of producing cars. These cost savings could be passed on to
customers, Nakanishi indicated.

The company is already working with vendors to reduce costs with

the Alto hatchback and may pass these benefits on in the coming
months. The Alto, India’s largest selling car, sells over 20,000 units
a month.

28
Maruti Suzuki Plans for Capacity Expansion

Not content with its leadership position in the small car market,
Maruti Suzuki India Ltd plans to expand its product range to other
segments, including multi-utility vehicles (MUVs), as it looks towards
its next phase of growth and seeks to tackle increasing competition.

At the 10th Auto Expo, India’s biggest car maker unveiled new
models on Tuesday and laid out a road map for capacity expansion.
Maruti, in which Japan's Suzuki Corp has a 54.2%, sells one of
every two cars in India.

Designed in India: Maruti Suzuki managing director Shinzo

Nakanishi unveils the concept version of an MUV that is capable of
carrying at least seven people.

The company is producing at full capacity at its plants in Gurgaon

and Manesar in Haryana and expects to cross one million units in
domestic sales and exports this fiscal year 2009-10, managing
director Shinzo Nakanishi told journalists.

With the Indian car market forecast to double to three million units
by 2015, Maruti Suzuki plans to raise its capacity to 1.5 million units
to defend its leadership position of about 50% of India’s passenger
car market. Most of the expansion would take place at the Manesar
facility. Nakanishi expects exports to stay flat at about 150,000 units
per year by 2015.

[Tuesday December 29, 2009]

Source: Indian Express, Finance

29
Competition will increase in small car segment

Car makers, including Toyota Motor Corp., Honda Motor Co. and
General Motors Corp., are seeking to challenge Maruti Suzuki’s
dominance and increase their share of the Indian market by
introducing a slew of small car models, stepping up the pressure on
the Indian auto maker to devise new strategies to power growth.

Maruti Suzuki unveiled the concept version of an MUV capable of

carrying at least seven people. Named the R3, the MUV has been
wholly designed by its research and development facilities in India.

With this, the company has plugged a crucial gap in its product
portfolio and would be venturing into a segment that accounts for
13% of car sales in India. The R3 will be pitched against the Toyota
Innova and the Mahindra Xylo—both runaway successes for their
makers. MUV sales in India rose 40% to 91,782 units in the first
eight months of this fiscal year 2009-10.

Initial reactions to the R3 were positive. “It’s an excellent product for

the Indian market, where you need to pack in a lot of people in very
little space,” said Paul Blokland, director of Segment Y, an
automotive intelligence firm.

The firm hinted that the R3 would be put into mass production soon.
“Typically it takes about 24 months to take a car from the concept
stage to production,” said I.V. Rao, managing executive officer
(engineering) at Maruti Suzuki.

Maruti Suzuki’s current stable of small cars would see models being
refreshed at periodic intervals and new variants being added. In the
last 15 months, Maruti has cemented its position in the small car
market with the launch of the Ritz and A-star hatchbacks.

Still, Nakanishi admitted 2010 would be a tough year as the

company would have to fight hard to defend its market share. “This
is not going to be easy as there are many car makers coming in,” he
said.

30
Volkswagen, Suzuki tie up to replace Alto cars

Volkswagen AG (VW) plans to launch the Polo hatchback in March.

Toyota expects the Etios, its small car unveiled on Monday, to hit
the streets in December, while Honda is targeting 2011 for its small
car launch.

After Tata Motor's Nano car, India can be prepared to have Rs 2-

2.5 Lakh car from Germany's Volkswagen and Suzuki Motor, a
media report said. Volkswagen and Suzuki Motor, parent of Maruti
Suzuki, has tied up to develop new small cars for the Indian market
which will be a replacement of Alto model.

"At some point we will need a replacement for the Alto. That price
range is the entry level for Indian customers today, so we can't
leave that segment open," RC Bhargava, chairman of Maruti
Suzuki.

As per the deal signed by the two firms this week, Volkswagen will
buy a one-fifth stake in Suzuki for USD 2.5 billion, considering the
Suzuki Motors expertise in small cars.

While spokesman for Maruti Suzuki was unable for comment,

spokesman for Volkswagen said that the move by the firm was not
intended to compete with Nano car.

"Volkswagen will be greatly interested in a car below the price

segment of the Up. And that is something we will need to check in
our future together with Suzuki," said Fabian Mannecke, the
spokesman for Volkswagen.

[Saturday, January 16, 2010]

Source: The Hindu Business Line

31
Maruti Suzuki launches Eeco

(All-new spacious family car to sport new 1,200 cc engine,

transmission system)

Having been specially designed for India, the Eeco has a superior
suspension which allows for a smooth and comfortable ride on
rough Indian roads. All seats, front, middle or rear are equally
convenient to access and individually designed to be comfortable.
Eeco is available with air-conditioning option to combat the extreme
climates in the country. These features make Eeco the most
suitable vehicle for large Indian families that want a vehicle for both
– work and family outings and fun together.

Eeco represents the growing expertise of Maruti Suzuki engineers

to conceive, design and produce vehicles in India. This is also in
line with parent Suzuki Motor Corporation’s vision of turning India
into a global hub for small car design.

 Focus on ‘A Big Car’ with space and

 comfort for family
 Superior functionality and drivability
 Flexi-seating with 5 and 7 seater options
 Roomy interiors
 Sliding doors add to ease entry and exit
 Air-conditioning
 Range of six exhilarating colours
 BS-IV compliant
 Superior, in-house developed 1200 cc
 petrol engine with 73 bhp power
 First-time ever DSA transmission
 Petrol Fuel efficiency 15.1 kmpl
 Roomy interiors
 Sliding doors add to ease entry and exit
 Air-conditioning

32
Maruti’s Sales Up in October-November 2009

Maruti Suzuki, the leading Indian small car manufacturer, has

registered net sales of 85,415 vehicles for the month of October
witnessing a 32% surge from the 64,490 units sold during the
similar period last fiscal.
 
The domestic sales of the automobile major stood at 71,551 units in
October, logging a 21% surge from the 59,127 units sold off during
Oct 2008. Meanwhile Maruti has witnessed a 160% increase in its
exports to stand at 13,864 units during Oct as against the 5,363
units logged in during similar period of 2008-09 fiscal.

Car giant Maruti Suzuki’s sales for November have increased by

84% over the same month last year when the firm was hardest hit
due to a slowdown in demand. The sales for November stood at 87,
807 units as against 47, 704 units for last November.

"November 2008 was an exceptionally low sales month due to

impact of economic slowdown. This year's November sales were,
however, up 17.1 percent from that in November 2007," the
company said in a statement.

For the period April-November, sales grew 29.4% over the same
period of last year to 646,139 units. Maruti's sales in the compact
car (A2) sector containing Alto, Wagon-R, Zen, Swift, Ritz and A-
Star grew 60% over November 2008, it said.

The company sold 56,005 units in this sector as against 34,976

units last year. Sale of models in its mid-sized (A3) sector
containing SX4 and Dzire increased 46.3% to 8,741 cars. Exports
were at 11,448 units.

[New Delhi - 08/01/2010]

Source: The Economic Times

33
Maruti Suzuki Q1 Net Profit for 2009-10 Up By 25%

Maruti Suzuki, the leading manufacturer in Indian small car

segment, has reported a 25.3% increase in net profits to Rs.583.5
crore for the quarter ended June 30 compared to Rs.465.9 crore it
earned in the corresponding period the previous fiscal.
 
Net sales grew 34% to Rs.6, 340 crore in the quarter under review
compared to the year-ago period.
 
"Net profit growth was helped by an easing of commodity prices,
sales mix moving in favor of higher end models and favorable
foreign exchange realizations," the company said in a statement.
 
"Further, the growing share of higher end models in total Company
sales also contributed to the growth in Net Sales during the quarter,"
it said.
 
The car maker posted total sales of 226,729 units, an increase of
17.7 percent for the quarter. This included exports of a record
29,314 units, representing a 134.7% growth over the same period of
the last fiscal.
 
"The positive response to new models and continued focus on
tapping new market segments enabled the company to achieve
near double digit volume growth and enhanced market share," the
statement added.

34
 Research Methodology
To achieve the objective of study the data has been collected from
various primary and secondary sources.

1. Primary data
2. Secondary data

Primary data: The questionnaire was prepared for Consumer

profile, Satisfaction level with the current Automobile Company on
the basis of return.

 Questionnaire method.
 Direct interview method

Secondary data: This secondary information has been collected

from various magazines, journals, reports, internet, government
publications etc.

Sampling Design

Population: Ahmedabad
Sample Size: Population of 100
Sample Technique: Convenience Sampling
Sampling Unit: Upper-middle and middle class in
Ahmedabad

Limitations

 This research is limited to only surroundings of Ahmedabad.

 Time is restricted to only 16 weeks.
The data is to be collected from the customers and some of the
managerial level people and electronic media it may be biased
because they don’t have time to answer.

35
 Data Analysis & Interpretation

Q- 1. Which Company’s car do you own?

company No. of Respondents

Maruti 38
Hyundai 23
Tata 12
Honda 6
Other 21
Total 100

Other
21%
Maruti
Honda 38%
6%

Tata
12%
Hyndai
23%

Maruti Hyndai Tata Honda Other

Interpretation:
 It is very clear from the survey that Most of the respondents
(38%) have cars of Maruti Suzuki because Maruti is providing
very wider product portfolio than other competitors. So,
customers have option to choose a car as per their family,
status and affordability.

36
  After Maruti Suzuki, 23% respondents have Hyundai cars
because of popularity of their models like i10, i20, Santro and
Accent.

Q.2 Have you ever purchased any car of Maruti Suzuki?

Response No. of Respondents

Yes 60

No 40

Total 100

60

60
40
50
40

30
20
10

0
Yes No

Series1

Interpretation:
 Of the sample size of 100 surveyed respondents 60% of the
respondents has purchased car of Maruti Suzuki.

 40% of the respondents have never bought the car of Maruti

or they have car of another company like Hyundai, Tata, and
Honda etc.

37
Q- 3.Which model of Maruti Udyog you have own?

Model of the cars No. of Respondents

Maruti 800 9
Maruti Alto 3
Wagon R 13
Swift 7
Esteem 2
Other 4
Total  38 

Other, 4, 11% Maruti 800, 9,

24%
Esteem, 2, 5%
Maruti 800
Maruti Alto
Wagon R
Swift, 7, 18%
Maruti Alto, 3, 8% Swift
Esteem
Other

Wagon R, 13,
34%

Interpretation:
 It is clear from the above diagram that the Model Wagon R
and Maruti 800 is the most selling model because it is very
economical & convenient for small user.

 After that Swift and Swift DZire is also very popular in the
market but it is not affordable compare to Wagon R and Maruti
800.

38
Q 4. Who motivates you to buy the car?

Factors No. of Respondents

Your Family 30
Peer Group 17
Society 12
Status 25
Life Style 14
Culture 2
Total 100

30
30

25
25

20
17
15 14
12 Series1
10

5
2
0
Your Peer Society Status Life Culture
Family Group Style

Interpretation:
 It is found that amongst 100 respondents 30% are influence to
buy car from their family and 25% are buying the cars to show
their status.

 17% are motivated their Peers and friends group and 14% are
own cars to show their Life style.

39
Q- 5. Which is the most important feature you look in
your Cars?

Product Features No. of Respondents

Fuel Efficiency 22
Look 17
Comfort 11
Price 30
Engine Power 8
Resale Value 12
Total 100

30

25

20

No of respondents 15 30
22
10 17
11 12
5 8

0
Fuel Look Comfort Price Engine Resale
Efficiency Power Value
Features

Interpretation:
 It is clear from the diagram that most of the customers which I
have surveyed are (52%) first looking for price and Fuel
Efficiency before purchasing a car.

 Some of the customer also given priority to the Comfort,

Resale value,, and Look of the car.

40
 Q-6. According to you who provide the better after
sales services and spare parts?

Company No. of Respondents

Maruti 45
Hyundai 14
Tata 25
Honda 11
Other 5
Total 100
45
45
40
35
30 25
25
No of respondents
20
14
15 11
10 5
5
0
Maruti Hyundai Tata Honda Other
company

Interpretation:
 From the above diagram it is clear that Maruti provides the
better after sales services and spare parts.

 According to survey, Hyundai has greater market share

compare to Tata but Tata is Ahead of Hyundai in terms of
providing better after sales service, spare parts and
maintenance.

41
Q-7. How frequently you change your car?
Years No. of Respondents
1-3 years 15
3-5 years 32
5-7 years 43
7-10 years or more 10
Total 100

43
45
40
35 32
30
25
No of respondets
20 15
15 10
10
5
0
1-3 years 3-5 years 5-7 years 7-10 years
years

Interpretation:
 It is found that amongst 100 respondents 43% have a
philosophy to change their car only after use of 5 years.

 Interestingly, 32% wants to change their car just after 3 to 5

years and 10% Respondents said that they will remain with
the same car at least for 7 to 10 years.

42
 Discussion of Implication
It has really been a great job of the research to present the results
in the immaculate way so that the purpose for which whole of the
research has been done must be fulfilled. And also the researcher
like a traveler who likes to tabulate all the important landmarks
encountered in the way, would also like to tabulate and go in for in-
depth study of the data collected for the purpose of meeting the
research objective.

In the light of the specified objectives of the research study and

above discussion along with the analysis of the data collected
following was interpreted from the data found from the study
undertaken:

 Most of the people of India do not have cars. Only 30 %

(approx.) of India has cars. Most of the car users are of small
cars. The customers of India prefer family car than luxury car.

 The advertisement plays a major role in communicating to the

customer information/specification about the product. Among
the supporters of advertising the most preferred media of
advertising in case of cars is the TV followed by the print-
media together. This is clearly sign of increasing materialism
and consumer due to the invasion of science in public life.

 From the study, it was found that people are mostly motivated
by user life style, peer group and status factors to buy the two-
wheelers.

 It was found that the customers are brand loyal to Maruti only,
because of after sale services and less maintenance ability.
So it is the just one time investment for the customer to be
brand loyal. Different approachable service centers also
contributories of the sale.

43
 Finance is also the key factor to increase the sale. Attractive
finance schemes enhance the sale into the market. Some 0%
schemes, low EMI schemes are the attractions of the
customers.

 At present, Maruti focusing mainly on small customers. By

providing low EMI and 0 % or low rate interesting schemes, it
wants to expand the sale in to the market.

 Some models i.e. Maruti 800, Alto; Wagon R etc. are famous
in middle class users. They like these models as family car.
Maruti Esteem, Swift and SX4 are the famous models in the
range of luxury cars.

 Maruti also expand its spare business. Service centers are

opened in small cities as well as in the small towns. These
are approachable for the residing people in small towns. This
is also the major factor of gaining fame in small users.

 Maruti also has competitive advantage in the price. Some

lower range models are very popular in the middle class
users.

 Fuel Efficiency, Style, Comfort, Engine power, Resale value

are also the favorable factors for Maruti Udyog Limited.
Maruti Engines are termed best engines in the automobile
market. Resale value of Maruti product is highest in the
market. Maruti car is quite very easy to sale into the market.

 Various schemes i.e. Discount, free accessories, free service

facilities are also helpful to increase the sale potential of the
Maruti.

44
 Suggestions

 Success of Maruti Udyog Limited assures that ad campaign

has a lot to do with their success. People’s response definitely
conveys that advertisement today definitely is a force to
reckon with and utmost importance has to be given to them to
assure success of a firm.

 Today the prices of petrol are increasing speedily. Company

should manufacture more & more verities of Diesel, Gas
engine vehicle.

 Easy Finance scheme should launch more and more.

Because easy finance is most competitive tool to increase the
sale.

 Proper service facility is also the key factor, which contributes

in the increment of sale. A company can increase its sale by
providing good & proper service facility. In this case, Maruti is
the leading company.

 Company should manufacture the car model as per the

requirement of the customer. Customer satisfaction is the
pivot of the economy. So, company should concentrate on
the satisfaction level of the customer.

 When it comes to increasing reputation or creating brand

image for a car, TV should be given superiority than any other
medium what so ever..

 Sports people were found to be of the highest credibility by

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

 People are mostly attracted by patriotism theme and cultural

theme in ads. So, this should be used exclusively to achieve

45
 greater success as is evident by the success of Maruti Udyog
Limited already.

Conclusion

It can clearly be said on the basis of all the study conducted so far
that advertisement play a major role in promoting among the
customers. It is immaterial that customers are from which family
status or background. All of them go in for advertisement when it
comes to the purchase decision making of car or a given product.

Advertising that distribute information to consumers that can help

them make better economic decisions than they would in absence
of that information provides a positive economic service. Of course,
any advertising that, by deception or by any other means, induces
consumers to make sub optimal decisions provides a corresponding
negative economic service. Some advertising is of more value than
others along this dimension.

It is unreasonable to separate the economic and social factors to

increase the sale. It is clear now that advertising enhances buyer
decision-making by providing information and supporting brand
names. It provides and efficient means to firms to communicate with
their customers. By generating various product associations,
advertising can add to the utility of a buyer receives from a product.
It supports the various media has the largely unrealized potential to
reduce extremes in the levels of consumer buying.

Customer satisfaction is also the important factor, which affects the

financial position & goodwill of the company. Customer demands
are dynamic, but its consideration is necessary for every company
to make existence into the market.

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.

46
 References
WEBSITES
 www.carwale.com

 ww.marutisuzuki.com
(http://www.marutisuzuki.com/newsroom.aspx)

 www. Timesofindia.com
(http://timesofindia.indiatimes.com/city/allahabad/Study-
claims-to- help-business-plans-of-automobile
industry/articleshow/5316886)

 www.zigwheels.com
(http://www.zigwheels.com/maruti-suzuki)

ARTICLES:
Satish mehra, Indian Express, Bhopal, Tuesday December 29, 2009

Poonam vadia, The Economic Times, Friday, January 08, 2010.

Aman shah, The Hindu Business Line, Saturday, January 16, 2010

Books
Kotler Philips, Marketing Management Analysis, Planning
Implementation & Control Edition 1998.

MAGAZINES
 Auto World
 Over Drive

47
  Auto India

APPENDIX

QUESTANARIES

NAME: _________________________ __________________

ADDRESS: ______________________ ____________________

____________________________________________________
OCCUPATION: ___________________ ___________________

Q- 1. Which Company’s car do you own?

 Maruti
 Hyundai
 Tata
 Honda
 Other

Q.2 Have you ever purchased any car of Maruti Suzuki?

 Yes
 No

Q- 3.Which model of Maruti Udyog you have own?

 Maruti 800
 Maruti Alto
 Wagon R
 Swift
 Esteem
 Other

48
Q - 4.Who motivates you to buy the car?

 Family
 Peer Group
 Society
 Status
 Life Style
 Culture

Q- 5. Which is the most important feature you look in your

Cars?

 Fuel Efficiency
 Look
 Comfort
 Price
 Engine Power
 Resale Value

Q- 6.According to you who provide the better after sales

services and spare parts?

 Maruti
 Hyundai
 Tata
 Honda
 Other

Q.7. How frequently you change your car?

 1-3 years
 3-5 years
 5-7 years
 7- 10 years or more

49
50
 GRAND PROJECT
CONTENTS:
Executive Summary
1) Introduction

2) Objective

3) Methodology

4) Analysis

5) Conclusions

6) Recommendations

PART I
COMPANY PROFILE
1) Brief introduction of a company

2) History(very brief) of the organization

PART II
PROJECT OVERVIEW
1) Introduction

2) Objective

3) Methodology

4) Analysis

5) Conclusions

51
 6) Recommendations

PART III
1) Appendix

2) Bibliography

3) References

4) Glossary

Annexure A (COVER PAGE)

Emblem
University centre address and code No:
Title of Project Report
By
(Your name)
A Project report submitted in partial fulfillment of the requirements
for the degree of Master of Business Administration of Sikkim
Manipal University, INDIA.
Sikkim-Manipal university of Health, Medical & Technological
sciences
Distance education wing
Syndicate house, Manipal – 576 104.

Annexure B (Student declaration)

I here by declare that the project report entitled
(Title)
Submitted in partial fulfillment of the requirements for the degree
of Masters of business Administration to Sikkim-Manipal
University, India, is my original work and not submitted for the
award of any other degree, diploma, fellowship, or any other
similar title or prizes.

Place : (Name of candidate)

Date:

52
Annexure C (Company Certificate)
This is to certify that the project report entitled
(Title)
Submitted in partial fulfillment of the requirements for the degree
of Masters of Business Administration of Sikkim-Manipal
University of Health, Medical & technological sciences.
(student name)
has worked under my supervision and guidance and that no part
of this report has been submitted for the award of any other
degree, Diploma, Fellowship of other similar titles or prizes and
that the work has been published in any journal of Magazine.
(Reg. no)
Certified
(Company Guide’s Name and
Qualification)

OTHER NOTES: (FOR GRAND PROJECT)

 Project report should be minimum of 120 pages.

 Executive summary should be 2 or 3 pages.
 For the presentation, Maximum seven slides should
be used for your project & it should be in pen drive.
Only one slide for the company’s details & another
six slides should contain your research work,
Recommendation & Conclusion.
 Project report should be in 3 copies.
o One for the company that you have selected for
the GP.

53
o Second for the institute in hard copy as well as
in soft copy & soft copy must be in CD.
o Third for yourself.

54