RAJSTHAN UNIVERSITY

2011

Determining Customer

Satisfaction Index IN MARUTI

SUZUKI

RAHUL LAKHOTIYA

P R E M M O T O R S

PREFACE

Customer satisfaction, a term frequently used in marketing, is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals."

It is seen as a key performance indicator within business and is often part of a Balanced Scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy.

Within organizations, customer satisfaction ratings can have powerful effects. They focus employees on the importance of fulfilling customers’ expectations. Furthermore, when these ratings dip, they warn of problems that can affect sales and profitability. These metrics quantify an important dynamic. When a brand has loyal customers, it gains positive word-of-mouth marketing, which is both free and highly effective.

Therefore, it is essential for businesses to effectively manage customer satisfaction. To be able do this, firms need reliable and reprehensive measures of satisfaction.

In researching satisfaction, firms generally ask customers whether their product or service has met or exceeded expectations. Thus, expectations are a key factor behind satisfaction. When customers have high expectations and the reality falls short, they will be disappointed and will likely rate their experience as less than satisfying. For this reason, a luxury resort, for example, might receive a lower satisfaction rating than a budget motel—even though its facilities and service would be deemed superior in “absolute” terms.

The importance of customer satisfaction diminishes when a firm has increased bargaining power. For example, cell phone plan providers, such as AT&T and Verizon, participate in an industry that is an oligopoly, where only a few suppliers of a certain product or service exist. As such, many cell phone plan contracts have a lot of fine print with provisions that they would never get away if there were, say, a hundred cell phone plan providers, because customer satisfaction would be way too low, and customers would easily have the option of leaving for a better contract offer.

There is a substantial body of empirical literature that establishes the benefits of customer satisfaction for firms.

Theoretical study combined with practical knowledge makes the learning meaningful and enables the individual to develop self-confidence because theoretical knowledge is always incomplete without its practical implication.

The summer training of a management student is an opportunity for him to give theoretical concepts a practical shape in the field of application. It gives him an idea of dynamic and versatile professional world as well as an exposure to the intricacies and complexities of corporate world.

My summer training for 40 days at Prem motors Pvt. Ltd., Jaipur was an eye opening experience to see the impact of liberalization 90’s. It has brought the corporate sector into global mainstream and momentous market reforms.

As the Automobile Industry is marching with gushing speed towards the horizon, Prem Motors Pvt. Ltd. is also heading with great speed in dealing Maruti Suzuki Cars.

At Prem Motors Pvt. Ltd., I got a chance to apply my theory to the latest technological, general management and marketing environment.

In these 40 days of exposure I learned a lot on various aspects of organizational structure, departments, sales, marketing, Product knowledge; finance Knowledge, Interaction with Customer, Dealing with Customer, communication and their impact.

The overall experience, exposure, knowledge and teamwork were a great satisfaction for me. Now I know that there is no other and better way to learn things expect practical experience.

ACKNOWLEDGEMENT

I thank my advisor General Manager, Mr. N.K.Lalchandani for assigning me this project and believing in me. He and his continuous support during the project were always there to listen and to give advice. He is the man behind all our efforts. He taught us how to be inquisitive and express our ideas. He showed us different ways to approach a problem and the need to be persistent to accomplish any goal.

I thank my Teachers for their constant guidance. Their advice and suggestions have been remarkable in handling various first hand situations at work. We thank all the colleagues for providing unending support in the project. Sincere thanks to RAJASTHAN UNIVERSITY.

Above all we thank The Almighty and our Parents for their invincible faith in us and support that has proved to be a lethal motivating factor.

RAHUL LAKHOTIYA

MIB 2009-11

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

Maruti Suzuki

Maruti Suzuki India Limited is Suzuki's largest and most valuable subsidiary with an annual production of 626,071 units in 2006. Suzuki has a 54.2% stake in the Indian auto giant and the rest is owned by the various Indian public and financial institutions. The company was incorporated in 1981 and is listed on the Bombay Stock Exchange and National Stock Exchange of India. In 2005-2006, the company had a 54% market share of the passenger car market in India. Nearly 75,000 people are employed directly by Maruti and its partners.

Maruti Suzuki was born as a Government of India company, with Suzuki as a minor partner, to make a people’s car for middle class India. Over the years, the product range has widened, ownership has changed hands and the customer has evolved.

Maruti Suzuki offers 10 models, ranging from India's best selling car, Maruti 800, for less than INR 200,000 (US$ 5000) to the premium sedan Maruti SX4 and luxury SUV, Maruti Grand Vitara. Maruti 800 was the first model launched by the company in 1983 followed by mini-van Maruti Omni in 1984. Both models were huge success in their respective categories because of the use of high-end technology and good fuel efficiency. Maruti Gypsy, launched in 1985, came into widespread use with the Indian Army and Indian Police Service becoming its primary customers. The short-lived Maruti 1000 too achieved moderate success until it was replaced by Maruti Esteem in 1994, to counter increasing competition in the medium-sedan category.

Maruti Zen, launched in 1993, was the company's second compact car model and also became extremely popular in India because of its high performance. The company went on to launch another compact car Maruti Wagon-R followed by Maruti Baleno in 1999. However, with increasing competition from Tata, Hyundai, Honda and Daewoo Motors, Maruti was not able to achieve the same

success with Wagon-R and Baleno as it had with its earlier models.In 2000, Maruti Alto was launched. The launch of Tata Indica and Hyundai Santro had affected Maruti's sales but Alto helped secure the company's position as the auto leader in India. It is currently the largest selling car in India. The Maruti models include Maruti Suzuki Grand Vitara, launched in 2003, Maruti Versa, launched in 2004, Maruti Suzuki Swift, launched in 2005, Maruti Zen Estilo and Maruti Suzuki SX4, launched in 2007. The company is expected to launch Maruti Suzuki Liana sedan in January 2008.

Title: “Determining Customer Satisfaction Index of a Company”

Objective:

The most basic objective of a customer satisfaction surveying program is to generate valid and consistent customer feedback (i.e., to receive the voice of the customer - “VOC”), which can then be used to initiate strategies that will retain customers and thus protect the most valuable corporate asset--loyal customers).

Theory: This project leads to check whatever theory been studied about customer satisfaction and customer satisfaction Index, does that really apply in practical aspect.

T-test: T-Test model is the best model to study the hypothesis, whenever the sample size is more than 30.

Procedure: The project has been accomplished by taking the opinions of the clients by making them fill the questionnaires. Thus, by the help of Ms-Excel, the t-test has been applied and the project had been accomplished.

The project flow that is the manner in which the project has been accomplished is stated in the project flowchart stated below. The flowchart contains the procedure that has been adopted during the completion of the project:

PROJECT FLOWCHART

TABLE OF CONTENTS

PREFACE

ACKNOWLDGEMENT

EXECUTIVE SUMMARY

I) PROJECT FLOWCHART

II) LITERATURE

III) ANALYSIS and INTERPRETATIONS

IV) CONCLUSIONS

BIBLIOGRAPHY APPENDIX

ABOUT PREM MOTORS

Prem Motors is an authorized dealership of maruti Suzuki India Ltd in India. It’s having a three dealership of maruti i.e. Gwalior, Guana & Jaipur.It’s head office is located in Gwalior. In Jaipur there are two showrooms of Prem Motors, one is at corporate park, near Ajmer pulia, and Jaipur & 2nd is at Road No. 9 VKI Area, Sikar Road, and Jaipur.

Its Average Sales is 300 Cars per month.

The structural Chart of this Organization is as follows.

Managing Director(Charanjeet Nagpal)

CEO(Kanwaljeet Nagpal)

General Manager(Vikash Sharma)

Sales Manager( N.K.lal Chandani)

Corporate ManagerAnkit Sharma

Front Office Staff Back Office Staff Accessories Staff Sales Staff

The domestic passenger car industry grew 11.8 percent in 2007-08, making this the sixth successive year of positive growth. But, industry performance during the year was inconsistent, with periods of high growth interspersed by months of low demand. Growth was model-specific, driven by select brands from different industry players.

OVERVIEW

The Indian economy grew at an impressive 9 percent in GDP during 2007-08. Of late, inflation has hardened and oil and certain other commodity prices have shot up, resulting in higher interest rates and an uncertain outlook for the very near term. However, the country's economy is still expected to continue to grow robustly, slightly slower pace.

The domestic passenger car industry grew 11.8 percent in 2007-08, making this the sixth successive year of positive growth. But, industry performance during the year was inconsistent, with periods of high growth interspersed by months of low demand. Growth was model-specific, driven by select brands from different industry players as opposed to the general buoyancy witnessed during the previous year (2006-07). The Company's domestic sale volume grew slightly more than the industry at 12 percent, and was the highest ever since inception. While continuing to lead in the A2 segment (compact cars), the Company also regained leadership of the A3 segment (sedans) after a gap of several years.

INTRODUCTION

Evolution of the Indian Passenger Car industry:

During 1960s and the 1970s there were only two manufacturers in the market, Hindustan Motors and Premier Automobiles with limited production capacities. The import of passenger cars was restricted to the State Trading Corporation (STC) and foreign diplomats.

During that period the passenger car industry in India grew at a nominal CAGR of approximately 3.6%. The rate of customs duty levied on cars was 225%.

Key players in the Indian auto industry - Passenger Cars and CVs

Suzuki’s JV in India and the largest passenger car manufacturer in India

The third largest passenger car manufacturer in India and one of the largest exporters of vehicles. Has established India as one of its manufacturing bases in the world. Is planning to invest heavily to boost exports from India.

Has vision of capturing 10 % share of the India passenger car market by 2010.

One of the leading players in the Indian premium cars segment

The largest player in the Indian industry. Plans to launch new and exciting products in the Indian markets, including the ‘100,000’car.

One of the leading players in the Indian premium cars segment

One of the leading players in the Indian premium cars segment.

Plans to enter the small car segment by re-launching the Matiz.

One of the largest players in the UV / MUV segment

Other global players who are in India / have plans for India include -

Volvo, Daimler Chrysler, BMW and Nissan Motors

HISTORY

Suzuki

Suzuki Motor Corporation (Suzuki Kabushikigaisha) is a Japanese multinational corporation that specializes in manufacturing compact automobiles, a full range of motorcycles, All-Terrain Vehicles (ATVs), outboard marine engines, wheelchairs and a variety of other small internal combustion engines. Suzuki is the 12th largest automobile manufacturer in the world, employs over 45,000 people, and has 35 main production facilities in 23 countries and 133 distributors in 192 countries.

In 1909, Michio Suzuki founded the Suzuki Loom Company in the small seacoast village of Hamamatsu, Japan. Business boomed as Suzuki built weaving looms for Japan's giant silk industry. Suzuki's only desire was to build better, more user-friendly looms. In 1929, Michio Suzuki invented a new type of weaving machine, which was exported overseas. Suzuki filed as many as 120 patents and utility model rights. For the first 30 years of the company's existence, its focus was on the development and production of these exceptionally complex machines.

Despite the success of his looms, Suzuki realized his company had to diversify and he began to look at other products. Based on consumer demand, he decided that building a small car would be the most practical new venture. The project began in 1937, and within two years Suzuki had completed several compact prototype cars. These first Suzuki motor vehicles were powered by a then-innovative, liquid-cooled, four-stroke, four-cylinder engine. It featured a cast aluminum crankcase and gearbox and generated 13 horsepower from a displacement of less than 800cc.

With the onset of World War II, production plans for Suzuki's new vehicles were halted when the government declared civilian passenger cars a "non-essential commodity." At the conclusion of the war, Suzuki went back to producing looms. Loom production was given a boost when the U.S. government approved the shipping of cotton to Japan. Suzuki's fortunes brightened as orders began to increase from domestic textile manufacturers. But the joy was short-lived as the cotton market collapsed in 1951.

Faced with this colossal challenge, Suzuki's thoughts went back to motor vehicles. After the war, the Japanese had a great need for affordable, reliable personal transportation. A number of firms began offering "clip-on" gas-powered engines that could be attached to the typical bicycle. Suzuki's first two-wheel ingenuity came in the form of a motorized bicycle called, the "Power Free." Designed to be inexpensive and simple to build and maintain, the 1952 Power Free featured a 36cc two-stroke engine. An unprecedented feature was the double-sprocket gear system, enabling the rider to either pedal with the engine assisting, pedal without engine assist, or simply disconnect the pedals and run on engine power alone. The system was so ingenious that the patent office of the new democratic government granted Suzuki a financial subsidy to continue research in motorcycle engineering, and so was born Suzuki Motor Corporation.

In 1953, Suzuki scored the first of countless racing victories when the tiny 60cc "Diamond Free" won its class in the Mount Fuji Hill Climb.By 1954, Suzuki was producing 6,000 motorcycles per month and had officially changed its name to Suzuki Motor Co., Ltd. Following the success of its first motorcycles, Suzuki created an even more successful automobile: the 1955 Suzulight. Suzuki showcased its penchant for innovation from the beginning. The Suzulight included front-wheel drive, four-wheel independent suspension and rack-and-pinion steering -- features common on cars half a century later.

Maruti’s entry into the Indian Passenger Car Market:

MUL was the result of the joint venture created in February 1981 between Japan's Suzuki Motor Company and the Indian Government when the latter decided to produce small, economical cars for the masses.

The intention of the venture was to produce a 'people's car'. To get the project off the ground MUL took over the assets of the erstwhile Maruti Ltd., which was set up in 1971 and closed in 1978.It was on December 14, 1983 that MUL launched the first Maruti vehicle - the Maruti 800. The first model was the SS80, a 796cc hatchback car priced at Rs. 47,500.

Subsequently, in spite of price hikes, the car has remained within the reach of the Indian middle class and has been a runaway success. Available in vibrant colures when India's passenger car population comprised mainly Ambassadors and Fiats in black and white, M800 gave Indians the first taste of global quality and reliability.

In late1980s, Suzuki increased its equity stake in MUL from 26% to 40% and further to 50% in 1992, converting Maruti into a non-government company.In the years that followed, MUL consolidated its position with a line of Indian classics, such as the eight-seat Omni, the rough-terrain Gypsy, and, in October 1990, a 3-box Maruti 1000. MUL took the lead in the green drive by launching its CNG-run Omni and Maruti 800 in 1999.

MUL redefined the premium compact segment with the launch of the Zen in October 1993. It was the company's first 'world car, selling across multiple markets. A year later, the Zen had won several awards, including 'No. 1 car in Europe' (Auto Week, 1994), 'No.1 import in Europe' (1997) and 'most fuel-efficient car' (ADAC).In 1999, MUL launched Baleno and WagonR. Baleno targeted the premium mid-segment while WagonR was positioned as a multi-activity vehicle.In1999, to improve customer satisfaction, it even established a chain of model workshops and soon after, set up customer call centers in the metros.

In 2000, Maruti Suzuki introduced Alto - a premium small car targeting the export market - and in October 2001, Versa, a multipurpose vehicle.In May 2002, Suzuki took management control of Maruti.

In April 2003, MUL rolled out its latest offering, the Grand Vitara XL-7, a luxury SUV imported from Suzuki Motor Corporation. The Grand Vitara was a concept that was radically different from the models that comprised the bulk of MUL's sales.

Since 1980 with its product excellence, operational efficiency and customer intimacy Maruti Suzuki has been the leader in Indian passenger car market.

Main objectives of MUL as set forth in their Memorandum of Association are:

1. To acquire and take over from GoI the right, title, and interest in relation to the undertakings of Maruti Ltd. As Provided for in the appropriate enactment of GoI together with the liabilities of GoI so far as they are Related to the Undertakings of the Company.

2. To carry on the business of manufacturers of, and dealers in, automobiles, motorcars, lorries, buses, vans, Motorcycles, cycle-cars, motor, scooters, carriages, amphibious vehicles, and vehicles suitable for propulsion on land, sea, or in the air or in any combination thereof and vehicles of all descriptions

(all hereinafter comprised in the term “motor and other things”), whether propelled or assisted by means of petrol, diesel, spirit, steam, gas, electrical, animal, or other power, and of internal combustion and other engines, chassis-bodies and other components, parts and accessories and all machinery, implements, utensils, appliances, apparatus, lubricants, cements, solutions enamels and all things capable of being used for, in, or in connection with manufacture, maintenance, and working of motors and other things or in the construction of any track or surface adapted for the use thereof.

3. To carry on the business of garage keepers and suppliers of and dealers in petrol, electricity and other motive power for motors and other things.

4.To carry on in the business of iron founders, mechanical engineers, and manufacturers of machinery, tool makers, brass founders, metal workers, boiler makers, mill rights, machinists, iron and steel converters, smiths, wood workers, builders, electroplaters, chromium platers, lacquerers, enamellers, painters, metallurgists, electrical engineers, and printers and to carry on any branch of manufacturing and engineering business.

COMPANY PROFILE

Maruti Suzuki is one of India's leading automobile manufacturers and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned. Until recently, 18.28% of the company was owned by the Indian government, and 54.2% by Suzuki of Japan. The Indian government held an initial public offering of 25% of the company in June 2003. As of May 10, 2007, Govt. of India sold its complete share to Indian financial institutions. With this, Govt. of India no longer has stake in Maruti Udyog.

Maruti Udyog Limited (MUL) was established in February 1981, though the actual production commenced in 1983 with the Maruti 800, based on the Suzuki Alto kei car which at the time was the only modern car available in India, its' only competitors- the Hindustan Ambassador and Premier Padmini were both around 25 years out of date at that point. Through 2004, Maruti has produced over 5 Million vehicles. Maruti’s are sold in India and various several other countries, depending upon export orders. Cars similar to Maruti’s (but not manufactured by Maruti Udyog) are sold by Suzuki and manufactured in Pakistan and other South Asian countries.

The company annually exports more than 50,000 cars and has an extremely large domestic market in India selling over 730,000 cars annually. Maruti 800, till 2004, was the India's largest selling compact car ever since it was launched in 1983. More than a million units of this car have been sold worldwide so far. Currently, Maruti Alto tops the sales charts.

Due to the large number of Maruti 800s sold in the Indian market, the term "Maruti" is commonly used to refer to this compact car model. Till recently the term "Maruti", in popular Indian culture, was associated to the Maruti 800 model.

Maruti Suzuki India Limited, a subsidiary of Suzuki Motor Corporation of Japan, has been the leader of the Indian car market for over two decades.

Its manufacturing facilities are located at two facilities Gurgaon and Manesar south of New Delhi. Maruti’s Gurgaon facility has an installed capacity of 350,000 units per annum.

The Manesar facilities, launched in February 2007 comprise a vehicle assembly plant with a capacity of 100,000 units per year and a Diesel Engine plant with an annual capacity of 100,000 engines and transmissions. Manesar and Gurgaon facilities have a combined capability to produce over 700,000 units annually.

More than half the cars sold in India are Maruti cars. The company is a subsidiary of Suzuki Motor Corporation, Japan, which owns 54.2 per cent of Maruti. The rest is owned by the public and financial institutions. It is listed on the Bombay Stock Exchange and National Stock Exchange in India.During 2007-08, Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. In all, over six million Maruti cars are on Indian roads since the first car was rolled out on December 14, 1983.

Maruti Suzuki offers 12 models, Maruti 800, Omni, Alto, Versa, Gypsy, A Star, Wagon R, Zen Estilo, Swift, Swift Dzire, SX4, and Grand Vitara. Swift, Swift dzire, A star and SX4 are manufactured in Manesar, Grand Vitara is imported from Japan as a completely built unit (CBU), remaining all models are manufactured in Maruti Suzuki's Gurgaon Plant.

Suzuki Motor Corporation, the parent company, is a global leader in mini and compact cars for three decades. Suzuki’s technical superiority lies in its ability to pack power and performance into a compact, lightweight engine that is clean and fuel efficient.

Maruti is clearly an “employer of choice” for automotive engineers and young managers from across the country. Nearly 75,000 people are employed directly by Maruti and its partners.

The company vouches for customer satisfaction. For its sincere efforts it has been rated (by customers) first in customer satisfaction among all car makers in India for nine years in a row in annual survey by J D Power Asia Pacific.

Maruti Suzuki was born as a government company, with Suzuki as a minor partner to make a people's car for middle class India. Over the years, the product range has widened, ownership has changed hands and the customer has evolved. What remains unchanged, then and now, is Maruti’s mission to motorise India.

Partner for the joint venture

Pressure started mounting on Indira and Sanjay Gandhi to share the details of the progress on the Maruti Project. Since country's resources were made available by mother to her son's pet project. A delegation of Indian technocrats

was assigned to hunt a collaborator for the project. Initial rounds of discussion were held with the giants of the automobile industry in Japan including Toyota, Nissan and Honda. Suzuki Motor Corporation was at that time a small player in the four wheeler automobile sector and had major share in the two wheeler segment. Suzuki's bid was considered negligible.

In the initial rounds of discussion the giants had their bosses present and in the later rounds related to the technical discussions executives of these automobile giants were present. Osamu Suzuki, Chairman and CEO of the company ensured that he was present in all the rounds of discussion. Osamu in an article writes that it subtly massaged their (Indian delegation) egos and also convinced them about the sincerity of Suzuki's bid. In the initial days Suzuki took all steps to ensure the government about its sincerity on the project. Suzuki in return received a lot of help from the government in such matters as import clearances for manufacturing equipment (against the wishes of the Indian machine tool industry then and its own socialistic ideology), land purchase at government prices for setting up the factory Gurgaon and reduced or removal of excise tariffs. This helped Suzuki conscientiously nurse Maruti through its infancy to become one of its flagship ventures.

Joint venture related issuesRelationship between the Government of India, under the United Front (India) coalition and Suzuki Motor Corporation over the joint venture was a point of heated debate in the Indian media till Suzuki Motor Corporation gained the controlling stake. This highly profitable joint venture that had a near monopolistic trade in the Indian automobile market and the nature of the partnership built up till then was the underlying reason for most issues. The success of the joint venture led Suzuki to increase its equity from 26% to 40% in 1987 and further to 50% in 1992. In 1982 both the venture partners had entered into an agreement to nominate their candidate for the post of Managing Director and every Managing Director will have tenure of five years.

Initially R.C.Bhargava was the managing director of the company since the inception of the joint venture. Till today he is regarded as instrumental for the success of Maruti Udyog. Joining in 1982 he held several key positions in the company before heading the company as Managing Director. Currently he is on the Board of Directors. After completing his five year tenure, Mr. Bhargava later assumed the office of Part-Time Chairman. The Government nominated Mr. S.S.L.N. Bhaskarudu as the Managing Director on August 27, 1997. Mr. Bhaskarudu had joined Maruti in 1983 after spending 21 years in the Public sector undertaking Bharat Heavy Electricals Limited as General Manager. Later

in 1987 he was promoted as Chief General Manager, 1998 as Director, Productions and Projects, 1989 Director, Materials and in 1993 as Joint Managing Director.

The Suzuki Motor Corporation didn't attend the Annual General Meeting of the Board with the reason of it being called on a short notice. Later Suzuki Motor Corporation went on record to state that Mr. Bhaskarudu was "incompetent" and wanted someone else. However, the Ministry of Industries, Government of India refuted the charges. Media stated from the Maruti sources that Bhaskarudu was interested to indigenise most of components for the models including gear boxes especially for Maruti 800. Suzuki also felt that Bhaskarudu was a proxy for the Government and would not let it increase its stake in the venture. If Maruti would have been able to indigenise gear boxes then Maruti would have been able to manufacture all the models without the technical assistance from Suzuki. Till today the issue of localization of gear boxes is highlighted in the press.

The relation strained when Suzuki Motor Corporation moved to Delhi High Court to bring a stay order against the appointment of Mr. Bhaskarudu. The issue was resolved in an out-of-court settlement and both the parties agreed that R S S L N Bhaskarudu would serve up to December 31, 1999, and from January 1, 2000, Jagdish Khattar, Executive Director of Maruti Udyog Limited would assume charges as the Managing Director.[10] Many politicians believed, and had stated in parliament that the Suzuki Motor Corporation is unwilling to localize manufacturing and reduce imports. This remains true, even today the gear boxes are still imported from Japan and are assembled at the Gurgaon facility.

INDUSTRIAL RELATIONS

For most of its history, Maruti Udyog had relatively few problems with its labour force. Its emphasis of a Japanese work culture and the modern manufacturing process, first instituted in Japan in the 1970s, was accepted by the workforce of the company without any difficulty. But with the change in management in 1997, when it became predominantly government controlled for a while, and the conflict between the United Front Government and Suzuki may have been the cause of unrest among employees. A major row broke out in September 2000 when employees of Maruti Udyog Ltd (MUL) went on an indefinite strike, demanding among other things, revision of the incentive scheme offered and implementation of a pension scheme. Employees struck work for six hours in October 2000, irked over the suspension of nine employees, going on a six-hour tools-down strike at its Gurgaon plant, demanding revision of the incentive-linked pay and threatened to fast to death if the suspended employees were not reinstated. About this time, the NDA government, following a disinvestments policy, proposed to sell part of its stake in Maruti in a public offering. The Staff union opposed this sell-off plan on the grounds that the company will lose a major business advantage of being subsidised by the Government.

The standoff with the management continued to December with a proposal by the management to end the two-month long agitation rejected with a demand for reinstatement of 92 dismissed workers, with four MUL employees going on a fast-unto-death. In December the company's shareholders met in New Delhi in an AGM that lasted 30 minutes. At the same time around 1500 plant workers from the MUL's Gurgaon facility were agitating outside the company's corporate office demanding commencement of production linked incentives, a better pension scheme and other benefits. The management has refused to pass on the benefits citing increased competition and lower margins

MARUTI SUZUKI NETWORK HIGHLIGHTS

MSIL has over 2800 service centers, Approximately ‘7’ times its nearest competitor.

MSIL’S used car showrooms alone, exceed the new car showrooms of Hyundai & Tata Motors.

Source Maruti Dec 2008

MARUTI VARIOUS FACILITIES

No. of Cities with Sales outlets 410 (243+167)

No. of Sales Dealerships

True Value Showrooms

No. of Sales Executive

Maruti Authorized Service Station

Dealer Workshops

Total No. of Service Stations

No. of Towns with Service Centers

No. of extension counters; cities

No. of MGP Distributors

439 outlets in 243 cities

300

14685

1934

702

2636

1253

183 & 164

76

1. 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 30 Express Service Stations on 30 highways across India.Service is a major revenue generator of the company. Most of the service stations are managed on franchise basis, where Maruti trains the local staff. Other automobile companies have not been able to match this benchmark set by Maruti. The Express Service stations help many stranded vehicles on the highways by sending across their repair man to the vehicle

2. Maruti insurance Launched in 2002 Maruti provides vehicle insurance to its customers with the help of the National Insurance Company, Bajaj Allianz, New India Assurance and Royal Sundaram. The service was set up the company with the inception of two subsidiaries Maruti Insurance Distributors Services Pvt. Ltd and Maruti Insurance Brokers Pvt. LimitedThis 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.Benefits of Maruti Insurance (USP)

Near cash-less accident repairs

All Maruti dealers and a select group of Maruti Authorized Service Stations (MASSs) will provide the customer with near cash-less repairs in their claim settlement. This means that the customer would not have to pay to the dealer for the repair charges to the extent it is payable by Insurance Co. Customer will just pay for the compulsory excess (fixed as per tariff according to the cubic capacity (cc) of the car) and applicable depreciation, which varies depending on the age of the vehicle and the type of the replaced parts. The rates at which the depreciation is charged are mentioned on the face of the policy. Rest of the amount will be settled directly between the dealer and the Insurance Company.

3. Maruti Finance To promote its bottom line growth, Maruti launched Maruti Finance in January 2002. Prior to the start of this service Maruti had started two joint ventures Citicorp Maruti and Maruti Countrywide with Citi Group and GE Countrywide

respectively to assist its client in securing loan. Maruti tied up with ABN Amro Bank, HDFC Bank, ICICI Limited, Kotak Mahindra, Standard Chartered Bank, and Sundaram to start this venture including its strategic partners in car finance. Again the company entered into a strategic partnership with SBI in March 2003 Since March 2003, Maruti has sold over 12,000 vehicles through SBI-Maruti Finance. SBI-Maruti Finance is currently available in 166 cities across India."Maruti Finance marks the coming together of the biggest players in the car finance business. They are the benchmarks in quality and efficiency. Combined with Maruti volumes and networked dealerships, this will enable Maruti Finance to offer superior service and competitive rates in the marketplace".— Jagdish Khattar, Managing director of Maruti Udyog Limited in a press conference announcing the launch of Maruti Finance on January 7, 2002Citicorp Maruti Finance Limited is a joint venture between Citicorp Finance India and Maruti Udyog Limited its primary business stated by the company is "hire-purchase financing of Maruti vehicles". Citi Finance India Limited is a wholly owned subsidiary of Citibank Overseas Investment Corporation, Delaware, which in turn is a 100% wholly owned subsidiary of Citibank N.A. Citi Finance India Limited holds 74% of the stake and Maruti Udyog holds the remaining 26%. GE Capital, HDFC and Maruti Udyog Limited came together in 1995 to form Maruti Countrywide.Maruti claims that its finance program offers most competitive interest rates to its customers, which are lower by 0.25% to 0.5% from the market rates.

4. Maruti True ValueMaruti 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 in India.

5. Maruti Genuine Accessories Many of the auto component companies other than Maruti Udyog started to offer components and accessories that were compatible. This caused a serious threat and loss of revenue to Maruti. Maruti started a new initiative under the brand name Maruti Genuine Accessories to offer accessories like alloy wheels, body cover, carpets, door visors, fog lamps, stereo systems, seat covers

and other car care products. These products are sold through dealer outlets and authorized service stations throughout India

Benefits of MGACUSTOMERS

MSIL assurance All types of accessories are available under the same roof Accessories tailor made for the vehicles Skilled manpower to fit the accessories Better resale value

MGA Selling Process Preparation Opening Need assessment Product presentation Attempted closing Deal & finance Vehicle Delivery Post-sale Follow-up

6. Maruti Driving SchoolAs part of its corporate social responsibility Maruti Udyog launched the Maruti Driving School in Delhi. Later the services were extended to other cities of India as well. These schools are modelled on international standards, where learners go through classroom and practical sessions. Many international practices like road behaviour and attitudes are also taught in these schools. Before driving actual vehicles participants are trained on simulators.

"We are very concerned about mounting deaths on Indian roads. These can be brought down if government, industry and the voluntary sector work together in an integrated manner. But we felt that Maruti should first do something in this regard and hence this initiative of Maruti Driving Schools."— Jagdish Khattar, at the launch ceremony of Maruti Driving School, Bangalore

7. N2N Fleet Management

N2N is the short form of End to End Fleet Management and provides lease and fleet management solution to corporates. Their impressive lists of clients who have signed up of this service include Gas Authority of India Ltd, DuPont,

MGA can be used to make the product more Attractive and Desirable

to the customer

Reckitt Benckiser, Sona Steering, Doordarshan, Singer India, National Stock Exchange and Transworld. This fleet management service includes end-to-end solutions across the vehicle's life, which includes Leasing, Maintenance, Convenience services and Remarketing.

Fleet sales are a branch of Institutional / Corporate Sales.

This is a specialized field of sales with a world of difference from Showroom / Retail Sales

Fleet Sales Has gained all-the-more importance in recent times since large Corporates, Such as in the IT sector have started providing their employees with Company Cars and Cabs.

Services offered in Maruti N2N

1) Fleet Acquisition: Fleet Policy for Maruti-action

Recommending a fleet composition suiting company’s budget, range of cars & requirements.

Fleet FinancingAttractive Financial & Operating leasing schemes. Vehicles are delivered at

door-step after registration, Insurance, fitment of MGA chosen and through inspection.

2) Fleet Operation Vehicle Servicing

Complete Management of services as per Periodic Maintenance Schedule and running repairs including components not covered under warranty.

Emergency Assistance

N2N offers on-the-spot emergency repairs, towing service, pick-up & drop service for stranded customers in case of accident & vehicle breakdown supported by 24 hrs call centre.

3) Value Added Services

This include replacement vehicle (in case of maintenance, breakdown, accident), Valet service to pick-up and drop the vehicle for servicing, corporate driving training & safety programs.

4) Insurance Management Complete accident management services from attending the vehicle at site to processing from Insurance Company.

5) Fleet Resale Assistance in selling existing fleet in transparent & hassle free manner through

Maruti True Value.

MANUFACTURING PROCESS

The manufacturing process at Maruti facility is depicted below:

The production of a car at Maruti facility occurs in the following stages:

Press Shop: Press shop has five transfer presses and two blanking lines. In the press shop, steel coils are cut to the required size and panels are prepared by pressing them between various die sets such as doors, roofs and bonnet. An anti-rust coat is applied at this stage.

Weld Shop: There are three welding shops with 122 six-axis robots and 25 in-house manufactured two-to-four axis robots. In this shop, various press metal components manufactured in the previous stage are spot-welded together to form the body shell. Various parts such as the floor panel, side panel, doors and

bonnet are sub assembled in this shop. Subsequently, the assembled parts undergo final welding. The welded body is sent to the paint shop through a conveyor.

Paint Shop: There are three paint shops, within one of which the final outer body is fully painted by robots. In the paint shop, the body undergoes various pre-treatment and electro deposition painting processes to provide a high corrosion resistance to the body. The car body is given an intermediate or primer coat before applying the storing 32 topcoat paint. The intermediate and the final coat are applied by using automatic electrostatic spray-painting machines (micro bells) and robots, followed by a baking process.

Assembly Shop: Maruti has highly flexible assembly lines, which can simultaneously handle a large number of variants as well as adapt to sequence changes. The painted bodies proceed for final assembly in three stages. The first stage is the trim line wherein various components such as roof head lining, windshield glass and interior trim components are fitted. Thereafter, the car is transferred to an overhead conveyor, the chassis line, wherein components such as the engine, gearbox and front and rear axles are assembled on the underbody. The vehicle is then lowered to the final line on its own wheels and here components and parts such as seats, the steering wheel and the battery are fitted. The completely assembled vehicle finally rolls out of the assembly lines to the final inspection stages.

Machine and engine shops: Assembling and testing of engines takes place at engine shops and carry out precision machining of engine components in our machine shops.

SELLING PROCESS

Follow the 8 Steps in Maruti Standard Sales Process:

1. Preparation:High 5 of each product should be on your finger tips

Practice demonstration skills at showroom

Prepare your Sales Kit (brochure, Price list, Performa, etc)

Look your best every day!!

2. Greeting:Greet people with smile on your face

Have a photo visiting card

Remember you have only one chance to make a lasting impression

3. Identify needs:Which vehicle are you using presently?

How many kms do you cover on your vehicle each month?

How many members are there in your family?

What will be the purpose of your new car & who will use it?

OPENING

NEED ASSESMENT

PRODUCT PRESENTATION

ATTEMPTED CLOSING

DEAL AND FINANCE

VEHICLE DELIVERY PROCESS

POST SALES FOLLOW-UP

PREPARATION

What are your expectations (like comfort, features, performance, mileage, looks,etc)from this car?

Any particular car you have seen or have in mind?

Adjacent is a schematic representation of the different phases a customer goes through before buying a car. It is hence of great importance that you as a car advisor for life recognize each of these phases, tap them effectively and offer the best possible solution to a customer.

4. Should praise the dealership and sell himself to the customer5. Demonstration

Use the six steps of demonstration

Highlight the High 5 and talk about the benefits with passion

6. Test drive:Offer test drive to every customer

If vehicle is not available get an appointment from the customer

7. Finance consideration and closing the deal:Use ABC of finance

Choose financier based on customer profile

Use document check list & follow up regularly for loan disbursement

Use the customer order form

Try to under commit and over deliver

Dealings should be fair and transparent

8. Delivery:Be alert and active with the customers throughout the deal

Make it memorable and delightful occasion for customer

OPERATIONS

Using technology to give our customers more for less.

In recent years, the Company has accomplished significant improvements on most operational parameters, such as Hours per Vehicle and Direct Pass Rate. The use of electronic tools such as Digital Engineering in the areas of jigs and die designs, manufacturing feasibility simulations, automatic line balancing, and validating factories and material flow in virtual environment, have helped make operations cost efficient.

The Company is expanding into a new generation technology of light-weight, fuel-efficient and clean K-series gasoline engines.

The Company produced 777,017 cars during the year, and achieved a production of 1 million in the 16 months ending March 2008. This translates into the Company rolling out a car every 22 seconds during the two-shift operation. The entire effort of Japanese best practices and Indian innovation is to ensure that manufacturing at this scale is achieved with high quality, productivity, safety and optimal cost.

In recent years, the Company has made significant improvements on most operation parameters, including Hours Per Vehicle (measure of productivity) and Direct Pass Rate (measure of quality). It continued to build on this and achieve incremental improvements during the year.

Innovative methods were used to secure widespread employee participation, especially in promoting all-round Safety.

A new software based system, Multi- Level Production System (MLPS), was introduced to build flexibility in operations. In-house automation continued to be a key driver of productivity. As the Company expanded manpower in line

with new capacity, the technical training centre, started last year, helped technicians and new joiners shorten their learning curve.

EXPANSION INTO NEW TECHNOLOGIES AT GURGAON

The Company is expanding into a new generation technology of light-weight, fuel-efficient and clean K-series gasoline engines. The Company has put up a state-of-the-art engine plant employing highly automated, energy efficient & environment friendly equipment for low pressure and high pressure Aluminum die casting to produce parts of the new series engines.

EXPANSION OF CAPACITY AT MANESAR

At present, the plant rolls out World Strategic Models such as Swift (diesel & petrol), SX4 and DZire (diesel & petrol). These models have seen buoyant market demand.

In addition, the fifth World Strategic Model derived from Concept A-Star would also roll out from the Manesar facility later this year. The next fiscal year is also critical as the Company targets to export 200,000 units by 2010.

In view of these developments, the plant's capacity was enhanced from an initial 100,000 units per annum to 170,000 units per annum during the year 2007-08. The Company is committed to achieve a capacity of 300,000 units per annum by October this year.

CAPABILITY BUILDING

This year, the Company actively deployed the latest tools like Digital Engineering in the areas of jigs and die design; manufacturing feasibility simulations, automatic line balancing and validating factories and material flow in a virtual environment.

PROCUREMENT

About three fourth of the car, by value, is outsourced. Any improvement in the car in terms of technology and design, quality or cost has to essentially include the Company's vendors and their support.

In the year 2007-08, the Company signed two joint venture agreements with global component manufacturers for cost reduction through localisation of components for Maruti Suzuki cars. The first was with Magneti Marelli, aimed

at the production of electronic control units (ECU) for diesel engines and the second with Futaba Industrial Company, Japan for production of exhaust system parts.

The Company is setting up a Suppliers Park in Manesar, close to its car plant on an area of 100 acres for Just-In-Time supplies. Both the above joint ventures are located in this Suppliers Park.

An informal Suppliers' Club has been formed by the Company's vendors and it gives a good forum for building personal relationships, understanding key issues and exchanging best practices at the CEO level. The Company organized a visit of the members to Japan for some plant visits and the Tokyo Motor Show.

FUTURE AGENDA

In the early eighties, the Company made significant efforts in trying to develop a component industry from ground zero. Over the next two decades, about 110 foreign technology collaborations were facilitated and Maruti Suzuki engineers worked closely with the vendors' engineers to enable to deliver cars which are both high quality and cost competitive. Now, the relationship has matured and most direct vendors or Tier 1 vendors are competent enough to work on their improvement, but there is major scope for modernization of some sections of Tier 2 vendors. The Company has identified this as an opportunity for further quality, up gradation and cost reduction.The second focus area for component cost reduction is raw material yield improvement across all manufacturing processes, like sheet metal, castings, forgings and machining. Every component is studied in detail and innovative ideas are tried, to reduce the input material weight for the same component output. The total cost of raw material as a percentage of net sales ranges from 15% to 20%.

BUSINESS PERFORMANCE

The Company held on to its share in the entire passenger vehicle market at 46% and was able to increase it marginally from 51% to 51.4% in passenger cars. The Company's share in the A2 segment (compact cars) remained above 58%. In the A3 segment, the Company's share increased to 21.9 percent, from 15.1 percent in the previous year.

DOMESTIC MARKET

The Company launched three new models during the year, including premium sedan SX4, a luxury Sports Utility Vehicle Grand Vitara and an entry level sedan Swift DZire (in both petrol and diesel versions). With this, the Company has launched seven models in three years. During the year, the Company discontinued production of Esteem, its entry sedan launched in 1994, which enjoyed a huge customer following for its combination of unmatched performance and low cost of ownership.

Both the SX4 and Swift DZire have been received well from the start, and have contributed to the Company regaining the leadership position in the A3 segment (sedans). In turn, this has catalysed efforts to expand the Company's image from being a leader in small cars to a manufacturer offering the full range of models to customers.

The Grand Vitara, imported in small numbers as a Completely Built Unit from Japan, further showcases the Company's ability to offer a complete portfolio of products.

The year witnessed two new model launches by competitors in the A2 segment, which accounts for the bulk of the Company's business. There was a new competitor model in the A3 segment as well. Besides, there were several new variants by competitors. While the new offerings have taken some share away from the existing ones, they have helped expand the market overall.

The passenger vehicle industry has three categories

Passenger Cars Utility Vehicles (UV) Multi Purpose Vehicles (MPV)

The share of each industry segment and share of the Company in each segment are shown in the chart above. The Company held on to its share in the entire passenger vehicle market at 46% and was able to increase it marginally from 51% to 51.4% in passenger cars. The Company's share in the A2 segment (compact cars) remained above 58%. In the A3 segment, the Company's share increased to 21.9 percent, from 15.1 percent in the previous year.

The Company's success in the market can be attributed, broadly, to the new product design philosophy emerging from Suzuki Motor Corporation, a disciplined approach to cost that enables more features at less price, and market initiatives.

The new design philosophy at Suzuki Motor Corporation, witnessed first in the Swift, is bold, aggressive and distinctly European. This philosophy is reflected in the Group's other World Strategic Models, such as SX4, Grand Vitara, A-Star and Splash. The success of the Company's new models is an indication that this new design philosophy has been well accepted by Indian customers.

In addition, the Company's new models have consistently offered more features than comparable competitor offerings, and are very competitively priced. This has been made possible by a disciplined target cost approach towards new models, followed within the Company and at our suppliers.

In recent years, the Company has also undertaken a series of market initiatives, notably the expansion of the sales network, offering the entire range of car-related services in a convenient and transparent manner and implementing standards to improve customer service.

The success of the Company's new models, such as Swift and SX4, has strengthened the profitability of dealerships. In addition, car-related products and services like insurance, finance, extended warranty, spares and accessories have further boosted the bottom-line of the network. Further, with a car population of nearly 6.5 million Maruti Suzuki cars, service maintenance and repairs make a healthy contribution to profitability of dealerships. These factors are encouraging channel partners to reinvest in sales outlets, workshops and increasing their sales force.

A major driver of sales performance is the pre-owned car business, or True Value, which facilitates new car sales through exchange and trade-ins and also

contributes to dealer profitability. A total of 84,323 new cars were sold in exchange, accounting for 12 percent of total new car sales.

There is some data, collected by independent market research groups, to suggest that car ownership periods are declining in the Indian market. With customers inclined to replace cars faster, exchange will be a key tool in driving sale of new cars. This trend will also boost the pre-owned car market overall, as more and better cars become available.

The Company has in place robust systems to aid dealers in monitoring and improving performance. These include Balanced Score Card, Customer Satisfaction Surveys and Dealer Profitability models. With the rollout of the Dealer Management System, an IT-based national network, dealer's management can access a wealth of data to enable them to monitor diverse facets of their operations including customer satisfaction indices.

ExportsMaruti Exports Limited is the subsidiary of Maruti Udyog Limited with its major focus on exports and it does not operate in the domestic Indian market. The first commercial consignment of 480 cars was sent to Hungary. By sending a consignment of 571 cars to the same country Maruti crossed the benchmark of 300,000 cars. Since its inception export was one of the aspects government was keen to encourage. Every political party expected Maruti to earn foreign currency.Angola, Benin, Djibouti, Ethiopia, Europe, Kenya, Morocco, Sri Lanka, Uganda, Chile, Guatemala, Costa Rica and El Salvador are some of the markets served by Maruti Exports Maruti Suzuki have helped India emerge as the fourth largest exporter of automobiles in Asia. Shown here is Maruti Gypsy in Malta.The Company sold 53,024 units during 2007-08. This is the highest ever export volume in a year for the Company, and marked a growth of 35 percent over the previous year. The Company's contribution towards total exports by the industry increased to 25% from 20% last year. Cumulative exports made by the Company crossed the milestone of 500,000 vehicles. Using A-Star, a Euro V compliant model in the “A” segment, the Company plans to re-launch itself in the European markets which it had left two years earlier for want of a suitable model. The Company is targeting a yearly volume of 100,000 in Europe and other parts of the world. This model is likely to be launched overseas in the last quarter of 2008-09. The Company has decided that while focusing on volume growth, it will enhance efforts to improve profitability from export operations. Exports will enable the Company to be at the frontier of technology, quality and manufacturing excellence.

SPARE PARTS AND ACCESSORIES

The Company draws competitive advantage from the fact that its car parts are priced competitively and are affordable. In recent years, the focus has been to improve access and availability by setting up a national network of spare parts distributors. In the Accessories business, enterprising dealers have used Maruti Genuine Accessories to create customized versions of the Company's existing models. In many cases, these special edition cars have enhanced sales, improved margins and enable the Company to address younger customer profiles. Although at a nascent stage, these dealer initiatives signify the potential offered by this business.

During the year, the Company achieved a new milestone: a gross turnover of Rs 10 billion in the spares and accessories business. This marked a growth of 19 percent over the previous year. The business is supported by a robust back end operation, which employs technology and competence in logistics to deliver on time to customers across the country.

CUSTOMER DELIGHT

In recent years, there are clear trends that customer expectations from a car have evolved considerably. Car customers now seek contemporary styling, international quality and latest features that enhance their safety and convenience, while expecting performance and fuel efficiency, like their parents did before them.

Keeping our promises by getting closer to our customers.

During the year, the Company took forward several initiatives to retain its top position in the area of customer satisfaction. These initiatives ranged from product design and quality to network expansion, and included new service programmes to meet latent needs of customers.

In recent years, there are clear trends that customer expectations from a car have evolved considerably. Car customers now seek contemporary styling, international quality and latest features that enhance their safety and convenience, while expecting performance and fuel efficiency, like their parents did before them.

These changing preferences are reflected in the sales data for existing segments in the car market: models and variants that promise only economy and low acquisition cost are increasingly losing out to models and variants that are rich in features, style and safety. This trend holds true across segments, including among entry level cars.

The Company's product plan is designed for these changing customer expectations. World Strategic Models like Swift and SX4, which offer bold European design and high end features are targeted specifically at these customers.

In the field, the products were supported by rapidly expanding networks. The Company has diverse networks for new cars, spares, service, pre-owned cars and so on, and all of them were in expansion mode last year to enable the Company to get closer to the customer.

In particular, the Company encouraged dealers to recruit Resident Sales Executives, dynamic youngsters from rural areas who would network with local communities and operate from there, rather than report daily to a sales showroom in an urban location.

Going forward, the Company sees its network as a source of competitive advantage. Rising real estate prices and restrictions on land use in many cities are together hampering the setting up of new car showrooms and workshops, specially in prime locations.

The Company ranked first in the Customer Satisfaction for the 8 successive year in the annual survey by J D Power Asia Pacific. It was the only player above industry average, despite the much higher number of customers it has to serve.

Certain unique initiatives by the Company, such as the facility at service workshops to pick up and drop cars of women customers, came in for appreciation. J D Power's Survey found that customers who received such service were notably more delighted.

The Company dealers and authorized service stations serviced more than 10 million cars in the year.

At the back end, the Company took measures to improve productivity of workshops so that customers can get their cars serviced faster. This also improves dealer profitability, generating more revenues from the same fixed assets. The Express Service started by some dealers offers to complete a standard service for a customer's car in two hours.

Another innovation was Maruti Mobile Support - a special version of Versa that has been suitably modified to function as a service station. It is able to cover areas where a service station is not viable or where customers want service at their doorstep. At present, 120 Maruti Mobile Service vans are plying in more than 80 cities.

The Company used technology to meet customer needs and even delight them. Following feedback that the Company's cars were more prone to theft owing to their resale value, the Company worked on an anti-theft immobilizer or i-CATS system for all its new cars.

The Company has also ensured that the entire fleet of trucks, carrying new cars from the factory to dealerships, is GPRS-enabled. This allows dealerships to give customers a more accurate picture of when their car is likely to be delivered, and to some extent addresses a major source of dissatisfaction among customers.

The Company's efforts to satisfy all car-related needs -- from learning to drive a car at Maruti Driving Schools to car insurance, extended warranty and eventually exchanging the existing car for a new one --- under one roof at dealerships also enhance customer satisfaction.

LITERATURE

Customer Satisfaction Index

One of the measurements of the performance of the Quality Management System, the organizations shall monitor information relating to customer perception as to whether the organization has met customer requirements. The methods for obtaining and using this information shall be determined"

There is obviously a strong link between customer satisfaction and customer retention. Customer's perception of Service and Quality of product will determine the success of the product or service in the market.

With better understanding of customers' perceptions, companies can determine the actions required to meet the customers' needs. They can identify their own strengths and weaknesses, where they stand in comparison to their competitors, chart out path future progress and improvement. Customer satisfaction measurement helps to promote an increased focus on customer outcomes

What do Customers Want?

It is important to develop a clear understanding of what exactly the customer wants. We need to know what our customers expect from the products and services we provide.

Customer expectations are the customer-defined attributes of your product or service you must meet or exceed to achieve customer satisfaction.

Customer Expectations are of two types - Expressed and Implied

What constitutes Satisfaction?

Major attributes of customer satisfaction can be summarized as:

Product Quality Product Packaging Keeping delivery commitments Price Responsiveness and ability to resolve complaints Overall communication, accessibility and attitude

What are the Tools?

Customer expectations can be identified using various methods such as

Periodic Contract Reviews Market research Telephonic Interviews Personal visits Warranty records Informal discussions Satisfaction Surveys

Depending upon the customer base and available resources, we can choose a method that is most effective in measuring the customers' perceptions. The purpose of the exercise is to identify priorities for improvement through a feedback mechanism.

Customer Satisfaction Surveys

Formal survey has emerged as by far the best method of periodically assessing the customer satisfaction. The surveys are not marketing tools but an information-gaining tool. Enough homework needs to be done before embarking on the actual survey. This includes:

Defining Objectives of the survey Design Survey Approach Develop Questionnaires and forms Administer survey (email, telephone, or post) Method of Compiling data and analysing the findings Format of the Report to present the findings

A Customer Satisfaction Measurement Survey should at least identify the following objectives-

Importance to Customers (Customers' Priorities). Customers' perception of supplier's performance. Your performance relative to customers' priorities. Your performance as seen against competitors’ performance Priorities for Improvement.

ANALYSIS and INTERPRETATIONS

Hypothesis of project

The hypotheses are a proposition that states checking for definite, exact relationship between two variables. That is, it states that the population’s correlation between two variables is equal to zero, that the difference in the means of two groups in the population is equal to zero.

In general the null statement is expressed as no relationship between two variables or no difference between two groups.

The alternate hypothesis which is the opposite of the null is a statement expressing a relationship between two variables or indicating differences between groups.

The hypothesis has been framed keeping 95% to be the confidence level.

The Null and the Alternate Hypothesis of the project has been made as under: Null Hypothesis: H0: there is no association of the company performance (using the 7 factors) and the customer satisfaction

Alternate Hypothesis:

H1: there is no association of the company performance (using the 7 factors) and the customer satisfaction

35 respondents have been taken and 7 factors have been used to judge the company performance.

Following are the factors:

RESPONSIVENESS

PROFESSIONALISM

TECHNICAL SUPPORT

PRODUCT QUALITY

DELIVERY

COMPETITIVENESS

QUALITY

OVERALL

ANALYSIS OF THE OUTPUT

The response of the 100 questionnaires related to the above factors is run in MS EXCEL under t-test and the following p-values of the respective factors are as follows:

FACTORS P-VALUE

A .000

B .000

C .000

D .000

E .000

F .000

G .000

H .000

Here, the p-values are less than .05, therefore null hypothesis is rejected. THUS, THERE IS SOME RELATION BETWEEN COMPANY PERFORMANCE and THE CUSTOMER SATISFACTION.

CONCLUSION

From the above analysis and interpretations, it can be concluded that:

Most of the customers / clients of PRAGATI INFOEDUCATION are satisfied.

The influence of 8 factors are:

The customers are mainly satisfied because of the responsiveness of the company, the quick response the company gives to its clients.

BIBLIOGRAPHY

The entire literature portion has been taken wikepedia.com.

Rest other statistics has been collected by filling the questionnaires from the respondents.

As it was asked to keep the names of the client confidential that’s why the list is not attached here.

APPENDIX

The questionnaire is as follows:

NAME OF CLIENT: CONTACT:

We would be grateful if you could spare a few minutes to complete this Customer Satisfaction Questionnaire to help us ensure that our standard of customer care exceeds expectations wherever possible.

Please tick the appropriate box to indicate your degree of satisfaction.Where: 1 = Excellent, 2 = Good, 3 = Satisfactory, 4 = Poor

FACTORS 1 2 3 4

RESPONSIVENESS

PROFESSIONALISM

TECHNICAL SUPPORT

PRODUCT QUALITY

DELIVERY

COMPETITIVENESS

QUALITY

OVERALL

The responses of the questionnaire is as follows:

S.NO Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q81 2 1 4 4 2 1 1 42 4 4 2 3 1 1 4 43 2 1 4 3 1 3 3 34 4 3 2 1 4 4 2 15 3 3 1 4 2 3 3 26 4 4 1 2 3 4 3 4

7 2 4 3 2 1 4 3 18 4 2 4 1 3 2 2 19 1 1 4 3 4 4 2 1

10 3 3 1 4 1 2 2 311 2 3 3 4 1 1 4 412 4 1 3 1 1 2 1 313 4 4 4 1 4 2 4 214 3 1 2 2 1 1 3 115 3 3 4 2 4 1 2 416 2 4 4 4 2 2 4 417 1 3 3 4 4 2 1 418 3 4 2 1 1 2 1 119 2 2 1 3 1 2 3 120 4 1 1 1 3 4 4 421 1 4 1 1 4 4 1 422 2 2 4 1 4 2 3 423 2 2 1 2 4 1 2 424 2 4 2 3 3 2 1 425 4 1 1 4 3 2 2 226 2 4 1 4 4 2 1 327 1 4 1 1 4 2 3 428 4 2 2 2 4 4 4 329 1 4 4 2 4 2 3 330 4 3 4 3 2 1 2 431 4 3 1 2 3 1 4 232 2 1 1 4 1 2 4 133 2 3 4 1 4 1 3 334 1 2 2 3 4 4 4 235 1 2 4 2 3 4 3 2