Maruti suzuki india limited marketing essay

The objective of this paper is to critically analyse the market mix of Maruti 800 which is a product from the existing company Maruti Suzuki, study the market of Maruti 800 car and to develop marketing plan for the Maruti 800 car add-on features.

Introduction

Maruti Suzuki India limited (MSIL formerly known as Maruti Udyog (limited) is a subsidiary of Suzuki motor corporation, Japan. Until recently, 18.28% company was owned by the Indian government, and 54.2% by Suzuki and Japan. The Indian government has held an initial public offering of 25% of the company in June 2003. As of 10th May 2007, Govt. of India sold its complete share to financial institutions. With this Govt. of India is no longer in stake of Maruti Udyog.

The company annually carry across more than 50,000 cars and has really large domestic market in India selling over 730,000 cars annually. The Company advise a wide range of cars through different segments. It offers 14 brands and 150 variants. In fiscal year 2009-10 Maruti Suzuki became the only Indian company to production and sell one million cars in a year. Maruti Suzuki has employee strength over 7,600(as at end march 2010). Maruti Suzuki is the leader of Indian car market over for two decades. The Successive years after the 1980,s became fruitful for India and many new cars were being introduced in the market. Maruti got a very good response for its old ware house which imposed the company to make other launches, In 1984 Maruti launched Maruti Suzuki Omni. Though today, Maruti Suzuki Omni has lost its importance in growing car market, it was believed the best passenger cars until the late 1990s. The early 1990c witnessed an era of libaralization, a period when Indian car market had become a crucial part of growing Indian economy. During this time, India was looking ahead towards the global car market with renewed hope and dynamism. The year 1990 saw the launch of India’s first contemporary sedan, Maruti 1000, a car that many of us not even heard about.

Mission

An organization’s mission is the purpose of reason for the organisations existence, means what the company is providing for the society.

“Maruti seeks to create a more prosperous society through automotive manufacturing”. Mission critical attitude and fiscal prudence has been a way of life within Maruti, good or bad times notwithstanding. Maruti’s fundamental mission is to contribute to people’s lifestyles, society, and the economy through automotive manufacturing.

Name of The Product:

Maruti 800

Introduction to Maruti 800

Maruti 800, till 2004 was the India’s largest selling compact car ever since it was launched in 1983. More than a million unit of this car have been sold worldwide so far. Due to more Maruti 800,s sold in the Indian market the term ‘Maruti’ is commonly used to refer to this compact car model. Maruti 800 is the compact car used to be a breath of fresh air among the bulky Ambassadors and Premier Padminis that abounded urban streets at that time.

This little car looked racy and fast with its sharp angular lines almost like a car that was waiting to be unleashed. The Ambys and Padminis looked flabby and round in comparsion. Notably, the Maruti 800 is the second longest Indian production car, next only to another legend Hindustan’s Motor Ambassador. The launch of this car in a way was symbolic of the Euphoria and pride that India was collectively going through as a nation, initially sparked by India’s triumph at 1983 world cup. The Maruti 800, in essence is a direct reflection of the Indian buying patterns. And the state of the mind of the average Indian car buyers. In a nutshell the Indian auto industry began its rapid evolution with Maruti 800 as one of the enduring symbols over the years. If all the 2.8 million Maruti 800 cars sold in the last 26 years were to be lined up, one could cover the distance between Kashmir and Kanyakumari, over 3.6 times. After 1986, Maruti 800,s next major update came more than a decade later, in 1997, when Maruti decided to soften the sharp angular lines of Maruti 800 with a more jellybean design. Consumer dint take too well to design this while the Maruti 800 still soldiered on with brisk sales showing no signs of ebbing in spite of the not-so-liked new, softer shape. Along with the injectors, Maruti also added a 5 speed gearbox which was a vast improvement over the 4 speeder, especially in terms of crusability and better matched gear ratios. After few years Maruti introduced LPG and CNG variants of the Maruti 800 in 2002, called Maruti 800 Duo, the 800 featured factory fitted LPG/CNG fuel options along with minor facilities like a newer grille and clear lens headlamps. Now, Maruti 800 countries to find plenty of buyers predominantly in rural and semi urban areas who buy it as a rugged, no nonsense economical hatchback. The Maruti 800 managed to handle the tough, unforgiving Himalayan terrain with absolute aplomb, showing the pedigree of its impeccable engineer

and bomb proof reliability, all at a dirt cheap price tag. Reliability, no less Maruti 800 faced another challenge in 2008, this time from homeboy Tata Motors. Ratan Tata originally conceived Tata Nano to be smaller yet offer more space than the Maruti 800, a testimony to the benchmark the Maruti 800 was. While, he managed to pull this off, the Tata Nano still cannot hold a candle to the Maruti 800 in terms of performance and top speed. This speaks a lot about the Maruti 800, designed way back in 1980s

Situation Analysis

The Target Marketing

Target marketing involve breaking a market into segments and then concentrating your marketing efforts on one or few key segments. The beauty of target marketing is that it makes the promotion, pricing and distribution of the products and/or services easier and more cost effective. Target marketing is the selection of the customers you wish to service. The decisions involved in it are

Which segment to target

How many products to offer

Which products to offer in which segments

There are three steps to targeting:

Market segmentation

Target Choice

Product positioning

One of the first thing you need to do is to refine your product or services for three basic reasons:

To satisfy basic needs.

To solve problems.

To make themselves feel good.

The next step in creating effective marketing strategy is to zero is on your target market. Targeting marketing is one of corporate American’s most effective business strategies. The idea is to increase sales by first identifying, and then targeting smaller, yet more profitable customer groups within the local market.

Four Ways to Identify Target Markets

Geographic: This geographic market includes the location, size of the area, density, and climate zone of your customers.

Demographics: Market demographics are an in-depth research analysis used to understand the target customers. Demographics determine the age, gender, education, occupation, income, culture and people of the country who buy your products/services. Demographics are usually taken by surveying the target audience.

Psychographics: Psychographics goes a step further and gives the lifestyles, behaviours and interests of its target audience.

Market demographics and psychographics research reveals interesting facts about Maruti 800 users.

Technological Environment: Maruti 800 has the superior 16*4 engines. With this introduction of 16*4 engine it is applied not only for Maruti 800 but for across the entire Maruti Suzuki range. The new technology harnesses the power of brainy 16- bit computer to a fuel efficient 4-valve engine to create optimum premium delivery. This means every Maruti Suzuki owner gets the ideal combination of power and performance from this car.

Product Life Cycle

Product life cycle will be divided into several stages characterized by the revenue generated by the product as it is shown in the figure drawn below. This curve is drawn showing product revenue overtime.

Introduction Stage

During this stage the primary goal is to establish a market to build a primary demand for the product. In the introduction stage Maruti has spent large amounts of money on advertising in order to enlarge the sales and customer awareness of the product and to target early adopters during this phase. In this stage Maruti has made no profits due to the reason higher cost coupled with low sales volume at that time. The market mix implications of Maruti at introduction stage are as follow

Market share and growth in the introduction stage is very slight.

Substantial and research costs have been incurred.

Marketing costs may be high in order to test the market, undergo launch promotion and set up distribution channels.

Highly unlikely the companies will make profits on products.

Growth Stage

Growth stage is a rapid revenue stage. During the growth stage the goal is to gain customer preference and increase sales. The marketing mix of Maruti in the growth stage is as follows

These are characterized by its rapid growth in sales and profits.

These profits arise due to increase in output (economies of scale)

Significant promotional resources and traditionally invested the products that are firmly in Growth stage.

Cheaper for businesses to invest in increasing their market share.

Maturity Stage

The Maturity stage is the most profitable stage. In this Maruti 800 sales started to decrease because of the intense competition.

Competition is the most intense as companies fight to maintain their market share.

Any significant moves are likely to be copied by the competitors.

The Maturity stage is the time when most profit is earned by the market as a whole.

Any expenditure on research and development is likely to improve production efficiency and quality.

Decline Stage

Eventually Maruti product sales began to decline as the market became saturated. Unit cost is very much even when declining production volumes. Due to this reason no more profits are not made.

Market is shrinking, reducing the overall amount of profit.

Possible to take out some production cost, to transfer production to a cheaper facility, sell to other cheaper markets.

Depending on whether the product remains profitable, a company may decide to end the product.

Care should be taken to control the amount of stocks of the product.

Swot Analysis

Swot analysis is a tool for auditing and organisation and its environment. It is the first stage of planning and helps marketers to focus on key issues. Swot stand for Strengths, Weakness, opportunities and Threats. Strengths and weakness are internal factors and Opportunities and threats are external factors. Swot analysis is a simple frame work for generating strategic alternatives from a situation analysis. It is applicable to either the corporate level or the business unit level and frequently appears in marketing plan. The following diagram shows how a SWOT analysis fits into a strategic situation analysis.

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Strengths:

Maruti 800 is major strength is competitive price where a middle class levels can reach the price tags.

Brand Image helps a lot in the product sales or development which in turn helps the company to grow aggressively

Established distribution and after sales network.

Understanding the Indian market and ability to design products with differentiating features.

Experience and know how in technology.

And also the spare parts and the components are easy and are cheaply available.

Maintenance cost is vey low and its easy to drive.

It has a very good resale value

It has large number of service stations.

Weakness

Major weakness for Maruti 800 is that it comes in out dated design and out dated technology.

And one more reason is that it has lack of experience with the foreign market.

Comparatively new to diesel cars at that time of motor industry.

One more reason for weakness of Maruti 800 is that it can accommodate limited passengers

People resistant to upper segment models.

Heavy import tariffs on fully built imported models.

Opportunities

Maruti 800 increased purchasing power of Indian middle class category.

It is innovative and increased disposable income.

Explore markets in less developed countries, and has increased warranty.

Redesign.

Tax benefits.

Prospective buyers from two wheeler segment.

Government subsidies.

Threats

There is a very high competition from second hand cars and TATA Nano.

And one more threat is from Chinese manufactures.

Other new global players (Bajaj and M&M).

Government policies.

Research Methodology

The nature of the project has been exploratory as hypothesis, is taken to be tested. Though the conclusion has been drawn to hypothesis and further tested by the research work undertaken in the relevant field. The reason for choosing the exploratory research design is the fact the project report has been primarily based upon the secondary sources of data and whose authentically could assured of. It is necessary for a researcher to know not only the research method/techniques but also the methodology. Researcher should know how to apply particular research techniques, but they also need to know which of these methods and techniques, are relevant and which are not, and what would they mean and indicate and why?

The reluctance of the company’s personnel in parting much of information led the project report to be based substantially on the second source of data. The sources of data used in the data collection are the following:

Primary Sources

Primary data is the original data collected specifically for the problems.

Reason for selecting primary data:-

In terms of primary data questionnaire has been interview desire sample units that give accurate and up to data information as well better to research problems.

Research approaches: – Primary data can be collected in five many ways, through observation, focus groups, surveys, behavioural data and experiments.

Research instruments: – Marketing researchers have a choice of three main research. Instruments in collecting primary data:

Questionnaires: – A questionnaire consists of questions presented respondents for their answers. Because of its flexibility, the questionnaire is by the far the most common. Questions can be open-ended or closed-ended.

Qualitative measures: – Some marketers prefer more qualitative methods for gauging consumer opinion because consumer actions do not always match their answers to survey questions. Qualitative research techniques are relatively unstructured measurement approaches that permit a range of possible responses, and they are a creative means of ascertaining consumer perceptions that may other-wise be difficult to uncover.

Mechanical devices: – Mechanical devices are occasionally used in marketing research. Mechanical devices like galvanometers measures the respondent’s interest or emotions aroused by specific ad or picture.

Secondary Sources

Information was collected from secondary sources such as public libraries, newspapers business magazines. Besides these the use of Internet was also made in collecting relevant information. The data collected from the above mentioned sources has been adequately used and structured and used at the appropriate places in the report. This particular way of data collection was used because of its low cost (except data collected through surfing the Internet) and time time consumption factor is also very low. And one more reason for collecting is that the data can be collected quickly and inexpensively, compared to primary data, it is clear useful to study analysing the recent development in the telecom industry.

Contact methods: – Once the sampling plan has been determined, the marketer researcher must decide how the subject should be contact.

Mail questionnaire: – The mail questionnaire is the best way to reach people who would not give personal interviews and whose responses may be biased or distorted by the interviewers.

Telephone interview: – Telephone interviewing is the best method for gathering information quickly. The interviewer is also able to clarify questions if respondents do not understand them. The respond rate is typically higher than in the case of mailed questionnaires.

Personal interview: – Personal interview is the most versatile method. The interviewer can ask more questions and record additional observations about the respondent, such an dress and body language. Personal interviewing takes two forms. In arranged interviews, respondents are contacted for an appointment, and often a small payment or incentive is offered. Intercept interviews involve stopping people at a shopping mall or busy street corner and requesting an interview.

Online interview: – There is increased use of online methods. There is so many ways to use the net to do research. In this method, research can include a questionnaire on its website and offer a people to answer a questionnaire.

To decide from a data collection: –

For this project survey method was selected which was carried through person interview. Because from different customers was required.

Organise and Collect data: –

Once the researchers have formulated and development a research design including questionnaire second thing he has to decide whether he has to collect this information. From all the target customers. There can be two types of survey are possible.

Sample survey

Census survey

“For this project sample survey was choosen”

Sample

Sample is the true representation of the population by studying of the sample we can predict the behaviour of the population.

Method Of Sampling: –

In this project, the survey was done within the market that means probabilistic convenience sampling was carried out.

To process and analyse data:- After the data was collected it was tabulated, analysed and interpreted to the conclusion reach.

Techniques Applied

Bar chart: A Chart in which the length of the bars represents the amount of the item associated with the bar.

Pie chart: A circle divided into sections, such that each section represent the percentage of the total area of a circle associates with one variable.

Types of Research

Along with this there may be 3 type of research methodology these are: –

Exploratory research

Descriptive research

Casual research

“Our research is based on exploratory research”

Exploratory Research

“The objective of this research is to gather preliminary information that will help us to define the problem and to suggest any hypothesis”

Characteristics of the sample survey are: –

Its cheaper than census survey

It requires less time

It is economical

More detail information can be collected

Demonstration: – Demonstration is a direct marketing resource such that it attracts the people and one of the best way to advertise in a cheaper way. It also helps the business to improve by knowing all the people when they are in crowd as well as for normal.

Newspaper Advertisement: Newspaper ads are the key stay publicity by local retailers and local services. Newspapers are key medium for time sensitive local advertising. In the holidays and weekend days the newspaper must be advertised maore so that the people will gain a quick idea about the product through it might be costly.

Television: The Advertisement may cost more but a 20 second can cost less payment rather than giving a lot. So giving a less payment and advertising for a minimum time. Advertising specialities:

Pencils, Sketches and pens

Student pads while using in the exams

Mouse pads

Coffee and tea mugs

The company itself can prepare the pencils and pens etc. which stated in the above and can be given freely and a good goods can be introduced in the market which a sticker can be attached to the above items and thus improving in the market resource for the company.

Calendar: The Company can prepare their own calendars and supply to the public on the new year time since in every house calendar is mandatory. And thus everyone can get an idea of the company and their products. Thus this is one of the cheapest promotion.

Identifying the alternatives:

This is a very crucial step where the marketing manager has to perform very accurately. It directly effect the sales of the product. Similarly while identifying the alternatives the marketing manager. Thus as mentioned above the resources there are many alternatives to select.

The cheap type of alternatives is as follows:

Demonstration

Trade Shows

Calendars

Selecting the alternatives:

As mentioned the above identified alternatives the next step is to select the cheapest alternative among the identified alternatives which is directly related and effects the growth of sales. This step is also considered along with the time period.When compared with all the above three alternative is calendars where everyone can see daily the products of the company.

In this step the high level managers are involved along with the marketing managers such as finance manager and managing director of the company. These mangers has to approve the decision taken by the marketing manager.

Implementation

The final step of this plan is the implementation. After a thorough and perfect study of the plan and implementation is done. After implementation for every 3 months a review has to be made in order to know the increased volume of the sales.

Advertising Plan

The main of the advertising plan is to increase the volume of sales. It consists of the following steps.

Budget: In this step the first and the foremost thing is that we must know how much money we have to spend you cant make any other decisions unless and until you know this truly. It will tell us how broad you can reach, which media you can consider and how much you can afford to do both creatively as well as the media wise. A perfect plan should be made by the experts in order to get an appropriate budget which can be used correctly without going waste.

Audience: The next step you need to know is who you are trying to reach in advertising terms or your computer when talking shop. Before that you should have already a pretty good grip on the types of customers who are buying your products what you are selling. Often times your audience is not like you. The first thing you should bear in mind is that you should categorize several factors including gender, age, income level. As Maruti 800 paste is declined only because of price factor so its better to concentrate on the income level factor of the people. Generally low class and medium class people thinks about each and every rupee on the product they use and more over low class and medium class. These people consider both price and high quality on which they are buying the product for example. By the above information and example we came to know that we should concentrate on middle class audience and low class audience.

Media: My budget and audience are figure doubt, now I need to decide which media it is most appropriate for my product and message again, common sence is a great asset here the media. I choose as print media example :Giving ads in newsletters and local papers. And I am sure the print media fits to my message. So I choose print media in advertising plan inured to increase the sales of decline product.

Learning outcomes:

At the starting of the module my expectations are to raise the volume of sales of declined product and make re-entry in to the market by making some changes in the product.

I experienced how to make a marketing plan and advertising plan for the declined product to increase the volume of sales. I even experienced the customers mind set customers reaction in terms of price factor changes. And the major thing is that I knew how to make SWOT analysis and what are the factors affecting the product rise.

This experience has been used how to increase the volume and sales of the company.#

I made a study on advertising and marketing plan and this process. I made a SWOT analysis and came to know what are the internal and external factors affecting the decline product.

One should have the basic knowledge on the situation of the market and customer needs. And also should be able to communicate with people and should have convincing skills. One should have updated information on the market .

I came to know the customers mind set and now I myself able to make a create my own marketing and advertising plan and I can raise the volume of sales of declined product.

I felt happy while undergoing this process where I had gained so much of knowledge about the market scenario and the customer likes and dislikes. I shared so many ideas with them and gained much knowledge about the market situations

Case Study:

Working with pride in India

Maruti Udyog Ltd., a subsidiary of Suzuki Motor Corporation of Japan, has been the leading Indian passenger car maker for about two decades. The company has a diverse portfolio that includes: the Maruti 800; the Omni; a premium small car, Zen; the international brands, Alto and WagonR; an off-roader, Gypsy; the mid-size Esteem; a luxury car, Baleno; an MPV, Versa; a premium subcompact car, Swift; and a luxury SUV, Grand Vitara XL7. The company’s 11 base platforms encompass 300 variants for 100 export destinations. According to Maruti’s vision statement, its goals include maintaining leadership in the Indian automobile industry, creating customer delight, increasing shareholder wealth and being “a

pride of India.” Customers have shown their approval, ranking Maruti high in customer satisfaction for six years in a row according to the J.D. Power Asia Pacific 2005 India Customer Satisfaction Index (CSI) Study. The company has also ranked highest in the India Sales Satisfaction Study.

The need for PLM

Among the company’s product development challenges, the need for shorter cycle times is always at the top. Management wants to be able to launch new models faster and reduce the time required for minor changes and development of product variants. Another challenge is co-development. Maruti’s goal is to collaborate closely with its global teams and suppliers on the development of new platforms and product freshening. Other challenges include streamlining the process of vehicle localization and enhancing quality and reliability.

These challenges pointed directly to a product lifecycle management (PLM) solution with

Capabilities for information management, process management, knowledge capture and support for global collaboration; a PLM solution directly addressing Maruti’s business challenges. For example, PLM’s information management capabilities address the issue of the many platforms, local variants and export destinations. Process management permits concurrent development and faster change management and provides a platform for other process improvements – for faster vehicle development. Knowledge capture increases innovation and also reduces costs by increasing part re-use. PLM’s collaboration capabilities permit global development by ensuring fast and accurate dissemination of product information.

Implementation profile

Maruti selected the UGS PLM software solution because “UGS leverages the business value by offering a complete PLM solution,” according to C.V. Raman, general manager, Engineering Division, Maruti Udyog Ltd. Maruti’s PLM implementation includes Teamcenter, NX and Tecnomatix software. Teamcenter provides a wide range of functionality for release management including bills of material management and change management. Teamcenter also handles the vehicle localization process, coordinates the part approval process and integrates design and engineering information with the company’s ERP system. Teamcenter also provides the infrastructure for global collaboration. It does this

by permitting real-time data sharing with suppliers in India and the global Suzuki team.

NX supports vehicle design by providing advanced tools for styling, product design and digital mock up. Its system-based modeling solution (WAVE) simplifies the creation of product variants. NX is also used for tool design and the development of machining programs. Tecnomatix automates manufacturing process planning (final assembly and body-in-white) and allows for assembly feasibility studies, ergonomic analyses, welding cell simulations and so on. PLM delivers results. Since implementing the UGS PLM solution, engineering change notice (ECN) time at Maruti has decreased by 50 percent. The number of ECN errors has also been cut in half. Cost reduction, which

had been occurring to some extent before the PLM implementation, is even more effective now, an improvement of 54 percent. With 3D parametric models now representing all elements of a vehicle, design reviews include digital mock-ups, which people find much easier to understand than drawings. On a recent program, digital design reviews revealed 36 issues that previously would not have been detected until the prototype stage, resulting in program delays. With the UGS PLM implementation, such delays are now avoided. Factory simulation functionality has had equally beneficial results. Digital 3D plant layouts reduce errors and have cut personnel costs for accommodating new product introductions. In addition, Maruti has seen a 50 percent reduction in assembly/build issues. From the business perspective, all this means vehicles get to market sooner. The company has experienced a reduction in design-to-launch time of 25 percent, and expects a further reduction of 15

percent as more of the collaboration with Suzuki and suppliers is done electronically in real time. From the customers’ perspective, the move to the UGS PLM solution is seen in lower prices. Since the implementation of Teamcenter, NX and Tecnomatix, Maruti has reduced prices for five car models.

Conclusion.

The main reason for choosing Maruti 800 as a subject of our project is to showcase the need of product line extension. Even the product is in completely declined stage it definitely has a chance to get into the market back by the research methodology we have applied, and it need further enhancement in terms of pricing, promotion, or the product itself to spread its customer base. This project looks all of the above aspects and aims to better value to the customers and also generates revenue to the manufacturer. The included SWOT analysis identified target audience, explain the advantage to improve the sales of Maruti 800, as if the research methods and the plans are admitted in the present situation the sale of the product may show in high. The Maruti 800’s objectives and the advertising methodology is effective.

A

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