Maruti Suzuki

Executive summary

Maruti Suzuki is a joint venture between Maruti Udyog Ltd and Suzuki. Arguably, it is one of the biggest and also most successful car manufactures in India. Maruti Suzuki offers a wide range of cars from small segment to the SUVs. Maruti Suzuki currently holds approximately 55% of the entire car market in India.

Following is a marketing plan for Maruti Suzuki Sx4 targeted towards family users who want 'a value for money' car. By the below given plan I expect to increase the sales of the Maruti Suzuki Sx4 in Mumbai (India) by 11% by December 2010.

Introduction

The Sx4 car was launched by Maruti Suzuki in 2007 in India, when it took the market by storm. The car was a major competitor for the Honda City. The first edition of the Sx4 had a faulty clutch issue which the company later replaced with an improved clutch. However, subsequently the car sales started losing steam due to it lacking quality and competition- form Honda city the market leader in the segment. The car has been recently modified in 2009 to potentially meet the demands of its customers but is yet found to lack in certain areas.

Situation Analysis

The current market situation has been analysed using Poter's model (FEPSOS) (Kotler and Singh) and Poter's Industry competency analysis model (Poters'5 forces).

They key issues of the Poter's Model (FEPSOS) are mentioned below.

Key findings of Functions

Customer

Typically, customers buying cars in this segment want a 'value for money' sedan car which offers good mileage and adequate power.

Competitors

Maruti's competitors are the Honda, Hyundai, Fiat, General Motors and Mitsubishi. Furthermore, India's second hand cars sales market acts as competition for the company. The main objective of the competitors seems to be domination of the car markets in India and dethroning Maruti Suzuki from its current leading position.

Strategies implemented by Maruti's competitors:

Bringing new models at regular intervals to enable customers to a wider choice and also to differentiate themselves from their competitors.

Below are the strategies adopted by some of Maruti's competitors:

  1. Honda is cashing in on the goodwill of quality and drive comfort that is generally associated with the brand.
  2. Fiat is trying to sell the Linea as a value for money car which is cheaper than the Honda city which is current market leader in this segment(HondaCity website 2009)

The competitors are vulnerable as Maruti has been in the market for 25 years and has built a strong supply and distribution network and also manufacturing most of the car on its own thus enabling it to maintain a cost leadership over it competitors(Marutisuzuki website).

KEY FINDINGS OF PESTEL

Political - In the current union budget the central excise duty has been raised from 4% to 8% on cars thus there has been an increase in pricing of all the cars (indiabudget, 2009).

This shows that the government wants people to reduce using private vehicles and use the public transport more frequently.

Economical - The disposable income of the Indian consumers has increased. Even during the economic slowdown. Maruti, as well as some other cars sales figures were on the increase.

Social – the increased disposable income, especially in the young population has made a social status an important criterion. A big car is seen as a status symbol.

Technological – the technology in cars keep on changing at a rapid pace, each trying to outdo his competitor. The latest engines either increase the mileage of the vehicle or give the car more power. Furthermore, consumers these days have a craving for advanced technologically driven products.

Environmental - people are becoming more eco-friendly and thus want cars which are less pollution causing. The government of India is also pushing for car manufactures to meet up with the strict environment standards set by them.

Legal - Regional Transport Organisation rules and regulation, insurance laws. Income tax laws and also manufacturer also have to follow the law imposed by the state authorities and also by the India Motor Vehicles Act for engine efficiency.

VISION AND VALUES OF THE COMPANY

Maruti Suzuki currently has no written down mission statement but mentions the vision statement and the core values in which they believe on their website and also is visible at the dealer's showroom. A Corporate Mission Statement should not only state the company's purpose of existence but also mention the scope of the business (Pearce J, 1987). The Vision and Mission statements of the company need to be SMART (Sustainable, Measurable, Actionable, Realistic and Timed/Targeted).

In order to build the mission and vision statements for the organization, 9 important statements from Pearce (1987) were taken in consideration: customers, services, geographic market, technology, growth, philosophy, public image, employees and distinctive competence as follows:

VISION

The vision as mentioned on the website is

To be The Leader in the Indian Automobile Industry, Creating Customer Delight and Shareholder's Wealth; A pride of India.

The above vision is not smart thus a new vision of the company should be made proposed Vision of the company is as follows

CORE VALUES (as mentioned on the website)

The above core values show that the company is customer focused and also focused on meeting their demand and also conducting research so that they can meet demands or help satisfy the latent demand of the customers. They also seem to value their suppliers and their networks

CORPORATE AND MARKETING OBJECTIVES

CORPORATE OBJECTIVES

The following are the corporate objectives of Maruti Suzuki Sx4 for the next 12 months

  1. Increase the market share of the company in Mumbai by 11%.
  2. Bring about improved modifications on Sx4.
  3. Improve their general company website i.e. www.marutisuzuki.com

MARKETING OBJECTIVES – Next 12 Months:

Following are the Marketing objectives for next 12 months.

  1. Achieve a steady increase in market penetration of sedan cars by 4% per quarter
  2. To raise sales in Mumbai by 11% by December 2010
  3. Raise the market share of Maruti Suzuki in the A3 segment
  4. To increase awareness of the quality improvements that are made in the car
  5. To encourage people chose Sx4 over the competitors

E-MARKETING OBJECTIVE

  1. To achieve a maximum number of visitors on the website
  2. To provide all the required information on the website
  3. Leading search engine optimisations like google and yahoo

SEGMENTATION TARGETING AND POSITIONING

Segmentation Targeting

Currently the Sx4 is targeted towards middleclass men who want a car which is a 'value for money' that has a mixture of features such as looks, power, accessories and others Which is in sync with the advertisement campaign which is "Men Are Back” the car has also the features and interiors provided by the car makes it seem as a car which makes it truly a value for money car. Value for money car is not mentioned in the advertisements as big cars are considered as status symbols as mentioned in the PESTEL thus it would be detrimental to the car sales.

In this marketing plan we will continue to focus on family users who want a value for money car, which is responsible for approximately 74% of the company's revenue from this product, also narrowing down are market can help us in improving the product and also in serving them better.

POSITIONING

Positioning is placing of a product into the minds of customers. For effective positioning it is extremely important to be able to make customer differentiate a product from competitor offerings.

The car is currently positioned as a Value for money car. But the customers believe that it lacks the quality compared to its competitors as mentioned in marketing Audit. Therefore it is important to change the perception of the customer about the car as a car which is value for money as well as having an high quality standards.

Maruti Suzuki's adopt a focus strategy based on low cost each of the products concentrates on a narrow segment which wants a value for money car and within that segment attempts to achieve a cost advantage. Thus it is able to focus on its customer and provide a better service, thus better customer satisfaction. We shall continue with this strategy as it aligns with our product. The company should continue to leverage its customer focused image.

MARKETING PROGRAMMES

  1. Improve the Quality of Interiors and parts
  2. Bring in a diesel variant into the market
  3. The armrest of the rear seat needs to be aligned with the seat so that when the third person sits in the centre he is comfortable.

MARKETING BUDGET, RESOURCES, EVALUATION AND CONTROL

Budget

The company currently spends 9% of its budget on marketing and promotional activities i.e. 44,00,000/- INR all across India (data acquired from the annual report). Out of which 8,00,000/- INR is the budget for Mumbai.

Key Performance Monitors

The KPI from the table above are performance and time linked. Therefore Maruti Suzuki needs to be monitoring it activities regularly, in monthly bases, so that the company has time to rectify any activity which is not gaining the adequate response.

CONTINGENCY PLANS

Sales plan not met? Revisit marketing plan, review the working of the advertisement campaign and finally consider price reduction to the original price or extend into the extended market quadrant of the modified Ansoff matrix.

The advertisement and promotional campaign is not working? Revisit marketing plan, review the current campaign by feedback from the market and make the necessary changes lastly consider investment in other communication channels (like newspapers, radio and advertorials).

No increase in market share ? Do a detailed analyzes on what the major competitors in the market segment are doing and revisit marketing plan, check if promotional campaign is working effectively or not.

Bibliography

Functions

All prices are in Indian Rs.

The customer can look for information on the car website for information and also book a time for test drive or he could walk in to the showroom and get information of the car from the sales person, Also he can ask for a test drive and see the car and examine it and then he bargains with the salesperson to get the best deal he can. Once the customer is satisfied he places and order and the dealership check their stock for the car incase the car is not in stock they inform the customer as to the number of days they can acquire the car in or if he would like to choose a car with a different colour from the ones they already have in stock. Once the decision is made the dealer reserves the car and takes a small deposit from the customer. The customer can either buy the car by providing money or can even opt for a loan either from Maruti or any other financial companies. Once all these procedure are done the customer needs to insure the car he can select from the various insurance agencies or he can select the Maruti Insurance agency to insure the car. After the insurance is done the car needs to be registered at the Regional Transport office in whose jurisdiction the customer lives. Only after registration can the car is delivered to the customer.

Environment

Micro customer

Micro competitors

  1. Honda - they are cashing in on the goodwill of quality and drive comfort that is generally associated with the brand.
  2. Fiat - is also trying to sell the linea as a value for money car which is cheaper than the Honda city

Macro(pestel)

Political

  1. The policies based on the efficiency of the engine to be less pollutant
  2. In the current union budget the central excise duty has been raised from 4% to 8% on cars thus there has been an increased in pricing of the car.

This shows that the government wants people to reduce using private vehicles and use the public transport more frequently

Economical

  1. The disposable income of the Indian consumers has increased. Even during the economic slowdown Maruti as well as some other cars sales figures were on the increase.
  2. Availibilty of cheap labour
  3. Property prices are extremely high thus it leads becomes expensive to open up new plants

Social

  1. Cars are looked on as status symbols
  2. People want cars to looks attractive and sporty

Technological

  1. the technology in cars keep on changing at a rapid pace each company is trying to outdo his competitor the new engines are either to increase the mileage of the vehicle or they are to give the car a lot of power

Environment

  1. people are becoming more environmentally conscious and thus want cars which are less polluting. The government of India is also pushing car manufactures to meet up with the strict environment standards set by them.

Legal

  1. Regional transport Organisation rules and regulation and insurance laws and budgets income tax laws.
  2. Copy rights and patents act on car technology

Productivity:

Maruti Suzuki has huge cash flow so company can spend more promoting its product by on TV advertisements and it would be positive for the company revenue.

  1. They are one of the biggest manufacturer in India supplying cars not only to every corner of India but they are also exporting a large number of cars having 54.9% of the market share
  2. The company has the largest number of service centres in India 2628 workshops spread over 1200 towns and cities
  3. They have 600 dealership outlets spread over 393 towns and cities. We provide maintenance support to customers through
  4. They have had a growth of 66.6% as a whole.( http://www.marutisuzuki.com/monthly-sales-news.aspx)
  5. The company conducts 'Mega Camps' throughout the country round the year.( http://www.marutisuzuki.com/customer-delight.aspx)

Profitability

  1. Company has made a profit of 12,187millions in 2008-2009(http://www.marutisuzuki.com/company-at-a-glance-newroom.aspx) (+ve)
  2. They have a very influential relationship on their suppliers(+ve)

Cost Effectiveness

  1. Cheap labour in India (+ve)
  2. They have a good relationship with their suppliers help them procure raw materials at cheap rates (+ve).

Systems:

Kellogg's Co. Currently works on the general surveys to check whether they are meeting with customers needs or not. Also company focuses on the fitness products since they are targeting the young generation of India. With that, Company has no website for shopping in India. Customer has to go to its parent site which is for U.S.A.

  1. Company Works on the customers survey to check what they want (+ve)
  2. Focuses on the fitness (+ve)
  3. They have no online shopping options in India (-ve)

Organization:

  1. 100 employees working in India but 32,000 overall the world. And all are professionally trained (4, www.kelloggcompany.com, 26th Nov 2009 (+ve)
  2. Well known Brand in USA and in other part of the world as well (+ve)
  3. Well established department in cereal market (+ve)
  4. No Website in India for online shopping (-ve)

Strategy:

Kellogg's Co. is currently targeting the female members of the families since it is focusing on the 'stay healthy' approach in India.

  1. Proximity to be the healthy and slim
  2. Focusing on families (Especially service sector and middle class families)
  3. Kellogg's has products for various age limit (Chocos for children, corn flakes and wheat flakes for adults with various flavour)
  4. Focus on changing life style (Western culture)
  5. Attractive packaging
  6. Has more flavour for various age sections
  7. Various types of snacks for each segment of the society
  8. Using cartoon characters to attract children

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