Maruti suzuki Marketing stratagey

Auto mobile industry

                                                        The auto mobile industry is one of the largest industry and key sector to the economy. Auto mobile is made up of more over 5000 parts and components and these are manufacture by suppliers in other industry  such as  plastic, steel, rubber, electronic, glass and metal etc.. Auto mobile sector is one of the  fast growing sector in the world. Due to liberalization in 1991 ,the automotive sector grown progressively , auto motive sector produces different kind of vehicles like two wheeler, three wheeler, passenger cars, medium and heavy commercial vehicles ,mopeds etc. In the last ten years, the volume, turn over, exports are increased to 3.8, 19.6and 6.2 respectively. India is 6th largest manufacturer globally, 5th largest manufacture in commercial vehicles, 2nd largest manufacturer in tractor. Auto motive sector is giving direct employment to 13 million people. Indian automobile is getting 75% revenue from two wheelers sold in the country. The India automotive market is currently estimated as 33000 crores, where global  automotive market is 270000 crores.  “Indian automobile sector –a Booming market”.

                    

                                                                             

ABOUT MARUTI SUZUKI

HISTORY:

Beginnings

• Maruti's history begins in 1970, when a private limited company named 'Maruti technical services private limited' (MTSPL) is launched on November 16, 1970.

• Purpose of this company was to provide technical know-how for the design, manufacture and assembly of "a wholly indigenous motor car".

•  In June 1971, a company called 'Maruti udyog limited' was incorporated under the Companies Act and Sanjay Gandhi became its first managing director.

• In 1982, a license & Joint Venture Agreement (JVA) is signed between Maruti Udyog Ltd. and Suzuki of Japan

                  

• In the 1983 company launched the Maruti 800, a rebadged version of the first generation Suzuki Alto.

Liberalization:

• The liberalization of the Indian economy opens new opportunities but also brings more competition to the segments in which Maruti Suzuki was operating.

• In 1992 Suzuki increases its stake in Maruti to 50 percent, making the company a 50-50 JV with the Government of India the other stake holder.

• A flow of new models begin in the early nineties like ZEN,ESTEEM etc.

MANUFACTURING FACILITIES:

• Maruti Suzuki has two manufacturing facilities in India. Both manufacturing facilities have a combined production capacity of 14,50,000 vehicles annually.

• The two plants are Gurgaon plant  and second plant is Manesar plant.

                    Gurgaon plant :  Area 300 acres.

                                                Installed Capacity:350,000 vehicles annually.

                                                Operational capacity: 900,00 vehicles annually.

                    Manesar plant:  Area 600 acres.

                                              Operational capacity: 300,000 vehicles annually.

   SEGMENT WISE BREAKUP OF MARUTI SUZUKI:

                         

                         

Success Parameter of Maruti Suzuki

Steady growth in Sale Volume: 

• The number of units sold has increased at a steady Compound Annual Growth (CAGR) of 17% over the past five years.
• Domestic market demand drives the sales across car segments.
• Exports as a portion of total sales is witnessing a gradual increase.
  
  

Sale  and Profitability: June 2014

• India's largest car manufacturer Maruti Suzuki India reported 61.24 per cent growth in overall sales in August 2013 compared to the corresponding month last year.
• Domestic sales for the company recorded 51.5 per cent in August 2013.
• Maruti Suzuki India's consolidated net profit for FY'14 is up 15.53 pct at Rs 2,852.92 crore

Market Share: June 2014

Brand Image:

• Maruti has been India's largest selling car for nearly two decades
• Maruti 800 (always referred to by its cubic capacity), has ruled the Indian roads for almost two decades
• The name Maruti has become generic for "small car" in India, since it is invariably most Indian's first car. It is probably also the world's cheapest car, priced at US$ 5,000
• Considering the car's accessibility, Maruti's tagline "Realize your dreams" seems especially apt.

Value – Value Chain, Value-Exploration,CPV

1. Value: Benefits / costs

2. Value exploration—identify new value opportunities.

3. Value creation—create more promising new value offerings

4. Value delivery—deliver the new value offerings more efficiently

Value chain: value chain is a chain of activities. Products pass through all activities of the chain in order and at each activity the product gains some value.

• Inbound Logistics
• Quality Control Quality management

                  

Marketing Strategies

Customer satisfaction

                                                                               

                                                                                           

The Maruti Suzuki has a huge market and has left no stone unturned to satisfy the customers. It has models in every segment of the automobile market. Maruti Suzuki stands for value as much as it stands for performance. In spite of rising input costs, the company tries their best to keep prices down. Their running costs and resale values are unbeatable too. Competitive strategy of this company facilitated healthy profit and customer satisfaction and its recognition as a company which stands for environmental concerns. Nothing matches the delight their cars deliver. In fact, customer they don’t buy a Maruti Suzuki, they invest in it.  

Maruti has successfully developed different revenue streams without making huge investments. It has ventured into MDS, N2N, Maruti Insurance and Maruti Finance. These help them in making the customer experience hassle free and helps building customer satisfaction.  

Maruti Finance

• In a market where more than 80% of cars are financed,
• Finance is one of the major decision drivers in car purchase.
• Maruti has tied up with 8 finance companies to form a consortium.

Maruti Insurance

• Insurance is a major concern of car owners.
• Brought all car insurance needs under one roof.
• Tied up with National Insurance Company, Bajaj Allianz, New India Assurance and Royal Sundaram to bring this service for its customers.
• Hassle-free way for customers to have their cars repaired and claims processed at any Maruti dealer workshop in India.

True Value

• It is an initiative to capture used car market.
• Allowing customers to bring their vehicle to a 'Maruti True Value' outlet and exchange it for a new car, by paying the difference.
• They are offered loyalty discounts in return.
• This helps them retain the customer.
• With Maruti True Value customer has a trusted name to entrust in a highly unorganized market and where cheating is rampant and the biggest concern in biggest driver of sale is trust.
• Maruti has created a system where dealers pick up used cars, recondition them, give them a fresh warranty, and sell them again. All investments for True Value are made by dealers.  

Unique advantages

• India's largest certified used car dealer network 340 outlets in 197 cities and growing
• all car related services under one roof
• professionally trained manpower
• Complete peace of mind

Maruti True Value business expands the family of Maruti customers, providing reassurance to existing Maruti customers about resale of their cars and further emphasizes Maruti’s Commitment towards enhancing customer satisfaction by continuous association during the vehicle ownership life cycle.

No one knows your Maruti car better than Maruti - based on this premise; Maruti channelizes its expertise to ensure that transactions in pre-owned cars are transparent and fair. True Value has transparent and fair evaluation process, which is currently missing in the largely unorganized market for pre-owned cars. Maruti True Value processes and systems ensure that the seller gets the right price and is paid promptly. Under True Value, the seller has the option to be paid in cash, or get a True Value car in exchange or a brand new Maruti Suzuki car in exchange. True Value category cars bought by Maruti True Value dealers are taken to state-of-the-art workshops. True Value Category cars are refurbished in state of art workshops using Maruti Genuine Parts and by skilled technicians. These cars are then sold through Maruti True Value outlets.

As a mark of confidence, and to provide reassurance to customers, every vehicle bought under Maruti True Value is inspected and certified by Maruti Engineers and the Car carries a one-year warranty and three free services. Convenient finance options are also offered to buyers of Maruti True Value cars.

Vehicle Maintenance Services Promotion  

• started conducting free service workshops to encourage consumers to come to their service stations. Maruti has increased its authorized service stations to 1567 across 1036 cities. Every regional office is having a separate services and maintenance department which look after the growth of this revenue stream.  

Maruti Driving School (MDS)

• Maruti has established this with the goal to capture the market where there is inhibition in buying cars due to inability to drive the car. This brings that customer to Maruti showroom and Maruti ends up creating a customer.  
• MDS not just imparts better driving skills but also tries to inculcate safe driving culture through special theoretical sessions for behavioural training and road sense.
• The school was the first to introduce advanced driving training simulator for better judgment and concept of route maps for holistic on-road practice.
• Having started from Bangalore in March 2005, Maruti Driving School has now spread its network throughout the country. It is dedicated towards making Indian roads safer by helping learners become smart and responsible motorists.  

The salient features of MDS include:

• Training imparted by instructors who are trained at IDTR. The certification of   Instructors comes after a tough evaluation process.  MDS has specially appointed lady instructors for the benefit   and   comfort    of     women    trainees.
• A curriculum that comprises comprehensive theory and practical sessions. The theoretical component focuses extensively on attitudinal and behavioural training and deals with the problem of road rage.
• Use of advanced passenger car simulators for imparting driving training. The simulator familiarizes the trainee with car controls, before the trainee actually takes the car on road. It also simulates a variety of conditions such as night driving, hill driving, road and light conditions.
• Practical training provided on new cars fitted with dual control for enhanced safety and air-conditioning for comfortable learning.

Customer Centric Approach & Awards

• Maruti dealers and employees are answerable to even a single customer complain.
• There are instances of cancellation of dealerships based on customer feedback.
• They have even changed their showroom layout so that customer has to walk minimum in the showroom and there are norms for service times and delivery of vehicles.
• The Dealer Sales Executive, who is the first interaction medium with the Maruti customer when the customer walks in Maruti showroom, is trained on greeting etiquettes.
• Maruti has proper customer complain handling cell under the CRM department.
• The Maruti call center is another effort which brings Maruti closer to its customer.
• Their Market Research department studies the changing consumer behaviour and market needs.
• Maruti enjoys seventy percent repeat buyers which exemplifies their claim of being customer friendly.
• Maruti is investing a lot of money and effort in building customer loyalty programmes. With the advent of good highways, Maruti was sensitive to the needs of long distance commuters.
• Wagon R Duo, which runs on both petrol and LPG, was launched in July 2006. It has been accepted well by customers.  
• Maruti executed a plan to launch new models for different segments of the market.
• In its redesign plan, Maruti launches a new model every year, reduce production costs by achieving 85-90% indigenization for new models, revamp marketing by increasing the dealer network from 150 to 300 and focus on bulk institutional sales, bring down number of vendors and introduce competitive bidding.
• There has also been a shift in business focus of Maruti. When Maruti commanded the largest market share, business focus was to “sell what we produce”. The earlier focus of the whole organization was on production but now the focus has shifted to "marketing and customer focus". This can be observed from the changes in mission statement of the organization: 1984: "Fuel efficient vehicle with latest technology", 1997: "Creating customer delight and shareholders wealth". Focus on customer care has become a key element for Maruti.
• Increasing Maruti service stations with the scope of one Maruti service station every 25 km on a highway, was another major step.
• To increase its market share, Maruti launched new car models, concentrated on marketing and institutional sales. Institutional sales, currently contributes to 7-8% of Maruti’s total sales.
• Maruti has dealt with this change in perception and preferences of people by offering a range of cars in the hatchback segment and some in the mid-range segment and also in SUV.
• It currently manufactures the following hatchbacks in different price ranges to suit a wide range of customers with different preferences – Maruti 800, Alto, Estilo, Wagon-R, A-Star, Ritz, and Swift.
• In the mid-range segment it has Swift Dzire and SX4.
• It has also launched an SUV with the brand name of Grand Vitara.
• Changes have been made from time to time based on market responses or consumer tastes and preferences. Different models have been modified and given facelifts from time to time so that they remain competitive in the market.

Company-Employees-Customers

The marketing triangle describes the relationship among the company´s management, its customers and its employees. A company sets a promise to customers through external marketing and fulfills this promise with the assistance of its employees through internal marketing. The employees, in turn, deliver the promise to the customers through interactive marketing. A business needs to assess how it will carry out each type of marketing, identify the specific challenges and barriers among the three points of the triangle and implement a plan to balance out these points.

                                                      

 USP of Maruti Suzuki and Differentiation from Others

• Availability of product in a very affordable and wide range.

  

• Availability of Authorized service station.

• Maruti True service.

                                                

• Genuine accessories.                                                                                                                                                                                                                                                       

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Differentiation from Others

FACTORS:-

• Price: People look for affordable price. Maruti has been successful in catering to this need of theirs
• Mileage. Fuel efficiency of a car is demanded by all categories of people.
• Durability and warranty: A car is not purchased very often. Customers look for durability. It is a product that lasts for years and sometimes even generations
• Reliability and trust: A brand should be associated with trust and reliability, only then will it be positioned in the minds of the people for a longer time and can succeed in the market.
• Availability: Ease of availability can also bring competitors customers to our brand if they fail in this category.
• Resale value: People like to change cars after a certain number of years which depends on several parameters. Hence a high resale value is what customers look for and Maruti provides this.

• CSR:- Maruti’s active involvement in Corporate Social Responsibility activities ensured that their consumer base increased with time.

SEGMENTING, TARGETING AND POSITIONINNG

 

Initially MUL focussed on mass marketing but steadily with increasing market competition, the organisation involved the STP concept (heart of marketing) due to competition from various automobile sector who were trying to dominate the Indian market.

SEGMENTING

Based on the economic strata the Indian automobile consumer segment is divided in 5 categories:

• Economy (priced less than 3 lakhs)
• Mid –range (priced between 3-5 lakhs)
• Luxury (priced between 5-10 lakhs)
• Premium (price ranges from 10-20 lakhs)
• Super-premium (priced above 20 lakhs)

The economic segment caters to the need of the rural and the semi urban population, whereas the mid range segment takes care to the needs of all the 3 i.e rural ,semi-urban and urban population. The luxury segment takes care of the semi-urban and the urban population.

Maruti Suzuki, launched the Maruti Kizashi on 2 February 2011 , for their predicted premium customers  It was priced at around 16 to 17.5 lakh rupees. But the company failed to position this Maruti product successfully.

 It has since been withdrawn from the Indian market due to poor sales.

TARGETING

Maruti evaluated its customers based on the  income groups present in the country i.e. the people having an income of 3 lakhs per annum which included  cars of economy range which are Maruti 800,Alto and  Maruti Omni. 

People falling in the income range of 3-5 lakhs per annum consider the mid range segment of the maruti cars which include A-Star, Swift and Versa.

Ppeople with an income more than 5 lakhs per annum mainly considers car in the luxury and premium segment of maruti cars such as SX4,Ritz, Kazashi.

Based on competitiveness, though Maruti faces stiff competition from Chevrolet Beat,Tatas Indica, Fiat’s Punto and Hyundai’s I10  and I20 in the automobile sector; still with its variation and features, they were able to maintain their leadership in terms of sale.

POSITIONING

There are various taglines associated with different maruti cars which signifies the uniqueness of each car on it’s own, like the taglines:

Alto- Let’s Go In An Alto

Swift- You Are The Fuel

SX4 - Men Are Back

These taglines completely associates all these cars. By reading the tagline one gets inspired and becomes eager to drive the car which the whole country is driving.

Also the USP plays the added role when it comes to conveying the customers about it’s uniqueness.

REPOSITIONING

Since the demand of the Indian customer has risen and also a stiff competition faced by Maruti in the car segment has forced Maruti to reposition some of it’s product and also to discontinue some products which were even making profits. 

Omni has been given a major facelift in terms of interiors and exteriors two months back. A new variant called Omni Cargo was launched in the market for the people who wanted a car to travel and also take care of thecargo carried by them. 

Baleno was launched in 1999 at 7.2 lacs. In 2003 they launched a lower variant as Baleno LXi at 5.46 lacs. This was to reduce the price and attract the customers.