PROJECT REPORTON

MARUTI SUZUKI

SUBMITTED IN THE PARTIAL FULLFILMENT FOR THE AWARD OF THE

DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION 2009-2012

UNDER THE GUIDANCE OFMrs. SANAM SHARMA

FACULTY, MAIMS

SUBMITTED BY:GAURAV VASHISTHA

Roll No.:9333Batch No. –BBA 3 rd Semester (2nd Shift)

Maharaja Agrasen Institute Of Management Studies

Affiliated to Guru Gobind Singh Indraprastha University,

Delhi.PSP Area, Plot No. 1, Sector-22, Rohini,

Delhi-110086

SELF DECLARATIONI , GAURAV VASHISTHA, student of BBA, Maharaja Agrasen Inst itute Of Management Studies (MAIMS) Hereby declare that the project entit led “MARKETING STRATEGIES OF MARUTI SUZUKI” Is the result of my own efforts in col lect ing and gathering information based on the above mentioned topic and guidance given by concerned authority ( faculty Mrs. SANAM SHARMA ) from t ime to t ime.

GAURAV VASHISTHABBA 3 r d SemesterRol l NO.-9333

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CERTIFICATE

This is to certify that GAURAV VASHISTHA , Roll No.9333 /MAIMS/2009 is a bonafide student of this institute pursuing B.B.A full time Programme of three years duration, which is in affiliation with GGS Indraprastha University and has undertaken a minor project on “WIPRO TECHNOLOGIES” in the partial fulfillment of B.B.A degree as required under the rules of the university.

Mrs. SANAM SHARMA(Project Guide)

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ACKNOWLEDGEMENT

This project work, which is my first step in the field of profess ional ism, has been successfu l ly accompl ished only because of t imely support o f my wel l wishers . I would l ike to pay my s incere regards and thanks to those, who directed me at every step in my project work.

F i rs t o f a l l , I would l ike to express my thanks to Dr. N.K. Kakkar (d i rector , MAIMS) for g iv ing me such a wonderfu l opportuni ty to widen the hor izons of my knowledge .

I extend my thanks to my project guide Mrs. SANAM SHARMA for her scholar ly guidance, constant superv is ion and encouragement. I t is due to her personal in terest and in i t iat ive that the project work is publ ished in the present form.

Last but not the least , I would a lso thank a l l the staff members of MAIMS, f r iends and parents who have direct ly or ind irect ly contr ibuted in making th is pro ject a success. I t i s a t r ibute for there va luat ion.

Despite a l l efforts , I have no doubt that error and obscur i t ies remain that seen to afflict a l l wr i t ing pro jects and for which I am culpable.

GAURAV VASHISTHABBA 3 r d Semester

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MARUTI UDYPG LIMITED

Maruti is India's largest automobile company. The company, a joint

venture with Suzuki of Japan, has been a success story like no

other in the annals of the Indian automobile industry.

Today, Maruti is India's largest automobile company. This feat was

achieved by the missionary zeal of our employees across the line

and the far-sighted vision of our management.

The Company Mission:

To provide a wide range of modern, high quality fuel efficient

vehicles in order to meet the need of different customers, both in

domestic and export markets.

The Company Vision:

We must be an internationally competitive company in terms of

our products and services.

We must retain our leadership in India and should also aspire to be

among the global players.

Their focus is on:

Building a continuously improving organisation adaptable to

quick changes

Providing value and satisfaction to the customer

Aligning and fully involving all our employees, suppliers and

dealers to face competition

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Maximising Shareholder's value

Being a responsible corporate citizen

At Maruti, they have a clear perspective on manpower. They see it

as a unique resource, in the sense that optimal productivity of

other resources depends largely on the way human resources are

utilised. The basic philosophy of management that underlies the

Maruti culture is that all employees of the company should be

moulded into a team which then strives as one, to achieve

commonly shared company goals and objectives. To make this

philosophy tenable, the Company takes several initiatives. Inputs

are sought from employees at all levels. They believe that

everyone should contribute to the formulation of company policies,

goals and objectives. Secondly, at Maruti, they encourage

leadership in the best sense of the word. According to us, a leader

is one who must be impartial, must have the ability to rise above

his own subjectivity, and, most importantly, must practice what he

preaches.

They understand that the process of creating a sense of belonging

that all employees can identify with is a lengthy one. To ensure

that this translates into concrete reality, they have taken several

simple but specific and well thought out measures. The first step in

this direction has been the introduction of a common uniform for

all employees. Another measure is the creation of a common

canteen where all employees have lunch, stand in common

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queues, and sit on the same table. Common toilets, common

transport and similar facilities for all levels of employees are other

measures that reinforce their emphasis on genuine equality in the

workplace.

At Maruti They do not believe in the notion of organisational

hierarchies. As a matter of fact, the management structure and

systems in Maruti have been designed to promote decentralisation

of authority. Maruti has a horizontal management structure with

only four functional levels of responsibility to facilitate quicker

decision making.

Another focus area of the Maruti culture is the maintenance of a

smoothly functioning communication network. Maruti believes that

communication channels between labour and management cannot

simply consist of having a labour representative on the Board of

the Company. They have faith in the ability of labour to effectively

participate in management and make constructive suggestions. To

encourage this, they ensure that there is a thorough dissemination

of information at all levels, through newsletters or via a letter from

the Chief Executive to all employees. Meetings with the Union are

held regularly, and programmes being contemplated by the

Company are discussed with the Union. The Sahyog Samiti, a

collection of representatives of non-unionised employees, training

programmes in Japan, Quality Circles, productivity-linked incentive

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schemes, and an ethos of discipline and teamwork, all contribute

to the Maruti culture.

Several measures of performance have made amply clear that

Maruti has established a truly healthy work culture. They have met

all project and performance targets since inception. Their

productivity levels are constantly improving. The Company has had

good labour relations with employees from the very beginning, and

they have been successful in the export market. Yet, the Maruti

culture is one that does not believe in resting on its laurels. They

adhere to the spirit of Kaizen, which states that constant

improvement is always possible. The most basic tenet of

productivity that they hold dear is that " Today should be better

than Yesterday and Tomorrow should be better than Today".

Maruti Udyog Limited (MUL) was established in Feb 1981 through

an Act of Parliament, to meet the growing demand of a personal

mode of transport caused by the lack of an efficient public

transport system.

Suzuki Motor Company was chosen from seven prospective

partners worldwide. This was due not only to their undisputed

leadership in small cars but also to their commitment to actively

bring to MUL contemporary technology and Japanese management

practices (which had catapulted Japan over USA to the status of the

top auto manufacturing country in the world).

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A licence and a Joint Venture agreement was signed between

Government of India and Suzuki Motor Company (now Suzuki Motor

Corporation of Japan) in Oct 1982.

The objectives of MUL then were:

Modernization of the Indian Automobile Industry.

Production of fuel-efficient vehicles to conserve scarce

resources.

Production of large number of motor vehicles, which was

necessary for economic growth.

Core Value

Customer Obsession

Fast, Flexible and First Mover

Innovation and Creativity

Networking and Partnership

Openness and Learning

Vision

The leader in the India Automobile Industry, Creating Customer

Delight and Shareholder’s Wealth; A pride of India”

Technological Advantage

We have introduced the superior 16 * 4 Hypertech engines across

the entire Maruti Suzuki range. This new technology harnesses the

power of a brainy 16-bit computer to a fuel-efficient 4-valve engine

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to create optimum engine delivery. This means every Maruti Suzuki

owner gets the ideal combination of power and performance from

his car.

Our other innovation has been the introduction of Electronic Power

Steering (EPS) in select models. This results in better and greater

maneuverability. In other words, our cars have become even more

pleasurable to drive.

Production/R&D

Spread over a sprawling 297 acres with 3 fully-integrated

production facilities, the Maruti Udyog Plant has already rolled out

over 4.3 million vehicles. In fact, on an average, two vehicles roll

out of the factory every minute. And it takes on an average, just 14

hours to make a car. More importantly, with an incredible range of

11 models available in 50 variants, there's a Maruti Suzuki made

here to fit every car-buyer's budget. And dream.

Production Milestones

1st vehicle produced, December 1983

1,00,000 vehicles produced by August, 1986

5,00,000 vehicles produced by June, 1990

10,00,000 vehicles produced by March, 1994

20,00,000 vehicles produced by October, 1997

30,00,000 vehicles produced by June, 2000

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40,00,000 vehicles produced by April, 2003

55,00,000 vehicles produced by April 2006

75,00,000 vehicles produced by April 2009

85,00,000 vehicles produced by April 2010

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MILESTONES

2005 The fiftieth lakh car rolls out in April, 2005

Growth in overall sales by 15.8%

2004 New (non A/C) variant of Alto

Alto becomes India's new best selling car

LPG variant of 'Omni Cargo'

Versa 5-seater, a new variant

Baleno LXi, a new variant

Maruti closed the financial year 2003-04 with an annual sale of 472122 units, the highest ever since the company began operations 20 years ago

2003 New Suzuki Grand Vitara XL-7

Redesigned and all-new Zen

New upgraded WagonR

Enters into partnership with State Bank of India

Production of 4 millionth vehicle. Listed on BSE and NSE after a public issue oversubscribed 10 times

2002 WagonR Pride

Esteem Diesel. All other variants upgraded

Maruti Insurance. Two new subsidiaries started: Maruti Insurance Distributor Services and Maruti Insurance Brokers Limited

Alto Spin LXi, with electronic power steering

Special edition of Maruti 800, India’s first colour-coordinated car

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Maruti True value in Mumbai

Maruti Finance in Mumbai with 10 finance companies

Suzuki Motor Corporation (SMC) increases its stake in Maruti to 54.2 percent

2001 Zen LXi

Maruti True Value launched in Bangalore and Delhi

Maruti Versa, India’s first luxury MPV

Alto Spin LXi, with electronic power steering

Alto Vxi

Customer information centers launched in Hyderabad, Bangalore and Chennai

Launch of versa

2000 First car company in India to launch a Call Center

New Alto

Altura, a luxury estate car

IDTR (Institute of Driving Training and Research) launched jointly with the Delhi government to promote safe driving habits

1999 Maruti 800 EX ( 796cc, hatchback car)

Zen LX (993cc, hatchback car)

Zen VXi (993cc, hatchback car with power steering)

Omni XL ( 796cc, MUV, high roof)

Baleno (1600cc, 3 Box Car)

Wagon R

Launch of Maruti - Suzuki innovative traffic beat in

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Delhi and Chennai as social initiatives

1998 Maruti launches website as part of CRM initiatives

Zen D (1527 cc diesel, hatchback car)

Zen VX & Zen VX Automatic

New (Omni & Omni E) (796cc, MUV)

Launch of website as part of CRM initiatives

1997 1998 Esteem (1299cc, 3 box car) LX, VX and AX

New Maruti 800 (796cc,hatchback Car) Standard and Deluxe

Produced the 2 millionth vehicle since the commencement of production

1996 Gypsy (E) (970cc, 4WD 8 seater)

Omni (E) (796cc, MUV, 8 seater)

Gypsy King (1298cc, 4WD, off road vehicle)

Zen Automatic (993cc, hatchback car)

Esteem 1.3L (1298 cc, 3 box Car)AX

Launch of 24-hour emergency on-road vehicle service

1995 Esteem 1.3L (1298 cc, 3 box car)VX

With the launch of second plant, installed capacity reached 200,000 units

1994 Esteem1.3L (1298cc, 3 box car)LX

Produced the 1 millionth vehicle since the commencement of production

1993 Zen (993cc, hatchback Car), which was later exported in Europe and elsewhere as the Alto

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1992 SMC increases its stake in Maruti to 50 percent

1991 Reaches cumulative indigenisation of 65 percent for all vehicles produced

1990 Maruti 1000(970cc, 3 box), India’s first contemporary sedan

1988 Installed capacity increased to 100,000 units

1987 Exported first lot of 500 cars to Hungary

1986 Maruti 800 ( New Model-796cc, hatchback Car)

Produced 100,000 vehicles (cumulative production)

1985 Launch of Maruti Gypsy (970cc, 4WD off-road vehicle)

1984 Omni, a 796cc MUV

Installed capacity reached 40,000 units

1983 Maruti 800, a 796 cc hatchback, India’s first affordable car.

Production was started under JVA

1982 License and JV agreement signed between Maruti Udyog Ltd. and SMC of Japan

1981 Maruti Udyog Ltd was incorporated under the provisions of the Indian Companies Act, 1956

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AWARDS

  2005  Number one in JD Power SSI for the second

consecutive year  Number one in JD Power CSI for the sixth time in a row

- the only car to win  it so many times

  M800, WagonR and Swift topped their segments in the TNS Total

     Customer Satisfaction Study  Leadership in the JD Power Initial Quality Study - Alto

number one in its    segment for the 2nd time in a row, Esteem number

one in its segment for     the 3rd year in a row, Swift number one in the

premium compact segment  WagonR and Esteem top their segments in the JD

Power APEAL study  TNS ranks Maruti 4th in the Corporate Reputation

Strength (CSR) study    (#1 in Auto sector)-Feb 05  Maruti bagged the "Manufacturer of the year" award

from Autocar-CNBC    ( 2nd time in a row)-Feb 05

First Indian car manufacturer to reach 5 million vehicles sales

  Business World ranks Maruti among top five most respected companies in

    India-Oct 04  Maruti ranked among top ten (Rank7) greenest

companies in India by      Business Today - Sep '04   2004

 Maruti Suzuki was No. 1 in Customer atisfaction, No. 1 in Sales Satisfaction No.1 in Product Quality (Esteem and Alto) and No. 1 in Product Appeal (Esteem and Wagon R)No. 1 in Total Customer Satisfaction (Maruti 800, Zen and Alto)

   Business World ranked us among the country's five most respected companies

  Business World ranked us the country's most respected automobile company

  Voted Manufacturer of the year by CNBC

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  Voted one of India's Greenest Companies by Business Today-AC Nielson ORG-MARG

       2003

 Maruti 800, Maruti Zen and Maruti Esteem make it to the top 10 automotive brands in "Most Trusted Brand survey 2003"J D Power ranked 3 models of Maruti on top: Wagonr, Zen and Esteem

   Maruti 800 and Wagonr top in NFO Total Customer Satisfaction Study 2003.

  MUL tops in J D Power CSI (2001) for 4th time in a row        2001  MUL tops in J D Power CSI (2001) for 2nd time in a

row: another international first   

  2000  Maruti bags JD Power CSI - 1st rank; unique

achievement by market leader anywhere in the world   

  1999MSM launched as model workshop in India; achieves highest CSI rating.

 Central Board of Excise & Customs awards Maruti with "Samman Patra", for contribution to exchequer and being an ideal tax assessee

     1998  CII's Business Excellence Award

     1996

Maruti wins INSSAN award for "Excellence in Suggestion Scheme"

  Awarded the Star Trading House status by Ministry of Commerce

     1994-95  Engineering Exports Promotion Council's award for

export performance   

  1994  Best Canteen award among Haryana Industries as part

of employee welfare   

  1992-93  Engineering Exports Promotion Council's award for

export performance   

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WHY MARUTI SUZUKI

The Quality Advantage

A car is an engineering product, only as good as the

technology used to make it. Actual users of our technology are

saying something very clearly Maruti Suzuki is No.1 in quality:

Maruti Suzuki owners experience fewer problems with their

vehicles than any other can manufacturer in India (J.D. Power IQS

Study 2004). The Alto was chosen No.1 in the premium compact

car segment and the Esteem in the entry level mid-size car

segment across 9 parameters.

The J.D. Power APEAL Study 2004 proclaimed the Wagon R. No.

1 in the premium compact car segment and the Esteem No.1 in

the entry level mid-size car segment. This study measures

owner delight in terms of design, content, layout and

performance of vehicles across 8 parameters.

Maruti Suzuki has a sales network of 307 state-of-the-art

showrooms across 189 cities*, with a workforce of over 6000

trained sales personnel to guide our customers in finding the

right car. Our high sales and customer care standards led us to

achieve the No.1 nameplate in the J.D. Power SSI study 2004.

The SSI study measures sales satisfaction across 6 parameters:

deal received, paperwork, dealer facility, salesperson, delivery

timing and delivery process. Maruti Suzuki has not only got the

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No.1 nameplate in the J.D. Power SSI study 2004, but also

ranked way above the industry average (Maruti Suzuki was at

784 while industry average was at 760). What is significant is

that it was ranked above Skoda, Ford, Chevrolet, Mitsubishi

and Hyundai.

To be really happy with the car you own, it should have a

reliable service network at hand and within easy reach. Their

1036 city strong service network is equipped to service

20,000 vehicles a day. No wonder Maruti Suzuki has been

awarded the No.1 nameplate in customer satisfaction in India

for the fifth year in a row, a feat unprecedented for any

automobile market leader in the world.

In the J.D. Power CSI study 2004, Maruti Suzuki scored the

highest across all 7 parameters: least problems experienced

with vehicle serviced, highest service quality, best in-service

experience, best service delivery, best in-service experience,

most user-friendly service and best service initiation

experience.

In fact, 92% of Maruti Suzuki owners feel that work gets done right

the first time during service. The J.D. Power CSI study 2004 also

reveals that 97% of Maruti Suzuki owners would probable

recommend the same make of vehicle, while 90% owners would

probable repurchase the same make of vehicle.

A Buying Experience Like No Other

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Maruti Suzuki has a sales network of 307 state-of -the-art

showrooms across 189 cities, with a workforce of over 6000 trained

sales personnel to guide our customers in finding the right car. Our

high sales and customer care standards led us to achieve the No.1

nameplate in the J.D. Power SSI Study 2004.

Quality Service across 1036 Cities

In the J.D. Power CSI Study 2004, Maruti Suzuki scored the highest

across all 7 parameters: least problems experienced with vehicle

serviced, highest service quality, best in-service experience, best

service delivery, best service advisor experience, most user-

friendly service and best service initiation experience.

92% of Maruti Suzuki owners feel that work gets done right the first

time during service. The J.D. Power CSI study 2004 also reveals

that 97% of Maruti Suzuki owners would probably recommend the

same make of vehicle, while 90% owners would probably

repurchase the same make of vehicle.

One Stop Shop

At Maruti Suzuki, you will find all your car related needs met under

one roof. Whether it is easy finance, insurance, fleet management

services, exchange- Maruti Suzuki is set to provide a single-window

solution for all your car related needs.

The Low Cost Maintenance Advantage

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The acquisition cost is unfortunately not the only cost you face

when buying a car. Although a car may be affordable to buy, it

may not necessarily be affordable to maintain, as some of its

regularly used spare parts may be priced quite steeply. Not so

in the case of a Maruti Suzuki. It is in the economy segment

that the affordability of spares is most competitive, and it is

here where Maruti Suzuki shines. The recent Auto car Survey

conducted in August 2004 bears testimony to this fact. In the

Maruti Suzuki stable, the Omni has the lowest aggregate cost

of spares followed by the Maruti-800. The Maruti-800 has the

cheapest spares of any Indian car with a basket of just Rs.

23,422. In the Lower Mid-size segment as well, price-

consciousness is very high, where the cars have to be not only

affordable on purchase price but also need to combine quality,

drivability and have comfortable interiors. In this segment, the

Maruti Suzuki Versa has scored particularly well with the

lowest cost of spares in the segment. In the Upper Mid-size

segment, the Maruti Suzuki Baleno has the segment's lowest

prices on a majority of the spares.

Lowest Cost of Ownership

To be really happy with the car one owns, it should be easy on

the pocket to buy and to run-which is why the cost of

ownership is so important. And here again, a Maruti Suzuki is a

clear winner, as shown by the recent J.D.Power CSI study 2004.

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It is clear that a Maruti Suzuki delights you even when you run

it for years. The 6 highest satisfaction ratings with regard to

cost of ownership among all models are all Maruti Suzuki

vehicles: Zen, Wagon R, Esteem, Maruti 800, Alto and Omni.

They are proud to have the lowest cost of operation / km

(among petrol vehicles) - the top 5 models are all Maruti

Suzuki models: Maruti 800, Alto, Zen, Omni and Wagon R.

Employee Quality Measures

Kaizen is based on the concept of making incremental

improvements in our products. It incorporates a series of

continuous small and simple improvements, which aim at involving

employees at all levels.

The Suggestion Scheme is based on the same principle. Under this

scheme, employees are encouraged to make suggestions for

improvement in any area of our operation. Over 50,000

suggestions are received from employees every year.

Maruti has won the First place in "Excellence in Suggestion

Scheme Contest 2003", which is the 6th consecutive award won

in as many years. This contest is organized by Indian National

Suggestion Schemes Association (INSSAN). Since 1998 Maruti has

won this award 10 times.

"Quality Circles" are groups of five to eight members from a

particular work area who work as a team to identify priorities and

solve work related problems in the area.

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We believe that it is this unwavering commitment to quality that

will lead to the further growth of the organization as competition

increases.

ISO 9001:2000

At Maruti, our approach to quality is in keeping with the Japanese

practice--"build it into the product". Technicians themselves

inspect the quality of work. Supervisors educate and instruct

technicians to continually improve productivity and quality. The

movement of quality indicators is reviewed in weekly meetings by

the top management.

In 2001, Maruti Udyog Ltd became one of the first

automobile companies anywhere in the world to get an ISO

9000:2000 certification. AV Belgium, global auditors for

International Organization for Standardisation(ISO), certified Maruti

after a four day long audit, covering varied parameters like

Customer Focussed organisation, Leadership, Involvement of

people, Process approach, System approach to Management,

Continual improvement, etc.

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In May 1995, Maruti got ISO 9002 certification. The audit for

this covered quality assurance in production, installation,

marketing and sales as well as after sales services. We were also

one of the first companies in the world to pioneer ISO 9000

certification for our dealers.

In October 1993, MUL passed the Conformity Of Production

(COP) Audit, which is based on a European Union Directive.

This authenticated our quality systems and testing facilities for

export to Europe.

Their emphasis on total quality has meant that today they are in a

position to guide vendors and dealers in establishing and

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consolidating their individual quality systems. This commitment to

quality has ensured a consistently satisfying product and world-

class sales and after-sales services.

TS16949:2002

A new feather was added recently in Maruti’s cap in the field of

quality when the Quality Management System of its Press Shop &

associated functions (collectively termed as Press Function) got

certification for conformance to the requirements of TS16949:2002

standard.

The need for TS certification of Press Function had its genesis in

the prestigious project that Maruti earned for the supply of

stamped panels to General Motors India for one of its forthcoming

models.

As a part of Quality system requirements, GM requires all its

suppliers to be certified to either ISO TS 16949 or QS 9000.

These standards address Quality System requirements, which are

particularly specific to the automotive industry and requires an

organization to be in compliance with ISO 9000 systems as a basic

requirement. However, whereas QS 9000 would become defunct

and cease to exist after Dec 2006, TS 16949 is going to be the

standard of the future.

The TS 16949 standard, brought out by ISO in the year 1999, is an

extension of the ISO 9001:2000 standard that prescribes Quality

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management system requirements that are specifically applicable

to the automotive industry.

TS 16949 has gained high popularity and almost all major

automobile players across the globe including GM, Ford, Daimler

Chrysler, Nissan, Honda are embracing & promoting it.

ISO 9001:2000  

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THEORITICAL PERSPECTIVE

Consumer is strictly, the ultimate consumer of a product, the

ultimate user of a product; the person who derives the satisfaction

or the benefit offered. The 'consumer' is not necessarily the

customer, since there are often 'customers' in the buying/

distribution chain; moreover, the consumer is frequently not the

person who makes the buying decision; for instance, in the case of

many household products, where the housewife may make the

purchase but consumption or use is by the whole family.

'Consumer' is not normally applied to the purchase of industrial

goods and services where the customer is usually a corporate

body. Nevertheless, consumable goods are sold to industry for

corporate purposes and the consumers of these goods can be

identified for marketing practice.

Consumer behavior is the study of buying habits or patterns of

behaviour of consuming public either in general or in specific

groups.

THE BUYING PROCESS

The complexity inherent in understanding consumer

behaviour has led to the construction of models of the

buying process which indicate the stages through

which the consumer passes from the time he or she

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first becomes aware of a need for a product or service

to the time when a product is purchased, a brand

selected, and the consumer evaluates the success of

his purchase decides whether to buy that particular

product and / or brand again. It the same time, such

models usually indicate the social and psychological

forces which shape the potential buyer's action at

each stage in the process. The two principal aims of

such model building are the prediction of future

behavior based on measurement of relevant variable

and the explanation of this behavior in terms of

theoretically relevant constructs.

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The starting point for understanding the buyer is the stimulus-response model shown below

Marketing stimuli

Other stimuli

Buyer's Characteris

tics

Buyer's decision process

Buyer's decisions

Product Price Place Promotion

Economic Technological Political Cultural

Cultural Social Personal Psychological

Problem recognition Information search Evaluation decision Post-purchase behavior

Product choice Brand choice Dealer choice Purchase timing Purchase amount

Stages in Buying Decision Process

Need recogniti

on

Information

search

Evaluation of

alternatives

Purchase

decision

Post-purchase behavior

The consumer passes through five stages : Problem

recognition information search, evaluation of

alternatives purchase decision and post-purchase

behavior. Clearly the buying process starts long before the actual purchase and has consequences long after the purchase.

This model implies that consumers pass through all five stages in buying a product. But this is not the

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case, especially in low-involvement purchase. Consumers may skip or rreverse some stages. Thus a woman buying her regular brand of toothpaste goes directly from the need for toothpaste to the purchase decision, skipping information search and evaluation. However, we have already used the model in above, because it captures the full range of consideration that arise when a consumer facer a highly involving new purchase. We will allude again to Linda Brown and try to understand how she became interested in buying a laptop computer and the try to understand how she became interested in buying a laptop computer and stages she went through to make her final choice.

Need Recognition

The buying process starts when the buyer recognizes a problem or need. the buyer senses a difference between his or her actual. In the former case, one of the person's normal needs-hunger, thirst, sex-rises to a threshold level and becomes a drive. From previous experience, the person has learned how to cope with this drive and is motivated toward a class of objects that will satisfy the drive.

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Or a need can be aroused by an external stimulus. A persons passes a bakery and sees freshly baked bread that stimulates her hunger; she admires a neighbor's new car; or she watches a television commercial advertising a Hawaiian vacation. All these stimuli can trigger a problem or need.

The marketer needs to identify the circumstances that trigger a particular need. in Linda Brown's case she might answer that her "buy season" was peaking or that she was impressed with a coworker's laptop. By gathering information from a number of consumers, the marketer can identify the most frequent stimuli that spark an interest in a product category. The marketer can then develop marketing strategies that trigger consumer interest.

Information search

An aroused consumer will be inclined to search for more information. We can distinguish between two levels. The milder search state is called heightened attention. Here Linda Brown simply becomes more receptive to information about computers. She pays attention to computer ads, computers purchase by friends, and conversation about computers.

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Or Linda may go into active information search where she looks for reading material, phones friends and engages in other activities to learn about computers.

Consumer information sources fall into four groups :

Personal source : Family, friends, neighbors, acquaintances

Commercial sources : Advertising, salespersons, dealers, packaging displays

Public sources : Mass media, consumer-rating organizations

Experiential sources : Handling examining using the product.

Evaluation of Alternatives

How does the consumer process the competitive brand information and make a final judgment of value? It turns out that there is no simple and single evaluation process used by all consumers or even by one consumer in all buying situations. There are several decision evaluation process. Most current models of the consumer evaluation process are cognitively processes. Most current models of the consumer evaluation process are cognitively oriented-

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that is, they see the consumer as forming product judgments largely on a conscious and rational basis.

Consumers differ as to which product attributes they see as relevant or salient. They will pay the most attention to the ones that will deliver the sought benefits. The market for a product can often a be segmented according to the attributes that are salient to different consumer groups.

The most salient attributes may not be the most important ones. Some may be salient because the consumer was recently exposed to an ad mentioning them. Furthermore, non-salient attributes might include some that the consumer forgot but whose importance would be recognized when mentioned.

The consumer is likely to develop a set of brand beliefs about where each brand stands on each attribute. The brand beliefs make up the brand image.

The consumer's brand beliefs will vary with his or her experiences and the effected of selective perception, selective distortion and selective retention.

Purchase decision

In the evaluation stage, the consumer forms preferences among the brands in the choice set. The consumer may also form a purchase intention to buy

33

the most preferred brand. However, two factors can intervene between the purchase intention and the purchase decision. These factor are shown in below.

The first factor is the attitudes of others. Suppose Linda Brown's close colleague recommends strongly that Linda should buy the lowest-priced computer (D). As a result, Linda's "purchase probability" for compuer A will be somewhat reduced and for computer D will be somewhat increased. The extent to which another person's attitude reduces one's preferred alternative depends upon two things :

1. The intensity of the other person's negative attitude towards the consumer's preferred alternative and

2. The consumer's motivation to comply with the other person's wishes.

Purchase intention is also influenced by unanticipated situational factors. The consumer forms a purchase intention on the basis of such factors as expected family income expected price and expected product benefits. When the consumer is about to act, unanticipated situational factors may erupt to change the purchase intention. Linda Brown might lose her job some other purchase might become more urgent a friend might report disappointment in that computer brand, or a store salesperson may affect her negatively.

Attitude of

34

others

Evaluation of

alternative

Purchase

intention

Purchase

decision

Unanticipated situational

factors

Post-purchase behavior

After purchasing a product, a consumer may detect a flaw. Some buyers will not want the flawed product, others will be indifferent to the flaw, and some may even see the flaw as enhancing the value of the product. Some flaws can be dangerous to consumers. Companies making automobiles, toys, and pharmaceuticals must quickly recall any product that has the slightest chance of injuring users.

Post-purchase Action

The consumer's satisfaction or dissatisfaction with the product will influence subsequent behavior. If the consumer is satisfied, he or she will exhibit a higher probability of purchasing the product again. For example, 75% of Toyata buyers were highly satisfied and about 75% intended to buy a Toyata again; 35%

35

of Chevrolet buyers were highly satisfied and about 35% intended to buy a Chevrolet again.

The satisfied customer will also tend to say good things about the brand to others. Marketers say: "Our best advertisement is a satisfied customer.

36

Major Factors Influencing Buying behavior

Cultural

Social

CultureSubcultureSocial Class

Reference groupFamily

Roles and statuses

Personal

Age and life-cycle stageOccupationEconomic

circumstancesLifestyle

Personality and self-concept

Psychological

MotivationPerceptionLearning

Beliefs and attitudes

Buyer

37

Rogers model for the adoption and diffusion of innovations Innovation Adoption Curve  

The innovation adoption curve of Rogers is a model that classifies

adopters of innovations into various categories, based on the idea that certain individuals are inevitably more open to adaptation than others. Is is also referred to as Multi-Step Flow Theory or Diffusion of Innovations Theory.

 

Innovators

Brave people, puling the change. Innovators are very important communication.

 

Early Adopters

Respectable people, opinion leaders, try out new ideas, but in a careful way.

 

Early Majority

Thoughtful people, careful but accepting change more quickly than the average.

38

 

Late Majority

Skeptic people, will use new ideas or products only when the majority is using it.

 

Laggards

Traditional people, caring for the "old ways", are critical towards new ideas and will only accept it if the new idea has become mainstream or even tradition.

 

The diffusion of innovations curve (innovation adoption curve) of Rogers is useful to remember that trying to quickly and massively convince the mass of a new controversial idea is useless. It makes more sense in these circumstances to start with convincing innovators and early adopters first. Also the categories and percentages can be used as a first draft to estimate target groups for communication purposes.

 

Diffusion research focus was on five elements: 1) the characteristics of an innovation which may influence its adoption; 2) the decision-making process that occurs when individuals consider adopting a new idea, product or practice; 3) the characteristics of individuals that make them likely to adopt an innovation; 4) the consequences for individuals and society of adopting an innovation; and 5) communication channels used in the adoption process.

39

TARGET MARKETING

Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments.

The beauty of target marketing is that it makes the promotion, pricing and distribution of your products and/or services easier and more cost-effective. Target marketing is the selection of customers you wish to service. The decisions involved in it are

Which segments 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 things you need to do is to refine your product or service so that you are NOT trying to be 'all things to all people’.

Next, you need to understand that people purchase products or services for three basic reasons:

To satisfy basic needs. To solve problems. To make themselves feel good.

The next step in creating an effective marketing strategy is to zero

in on your target market.

40

Target marketing is one of corporate America'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 total market.

Four Ways to Identify Target Markets

1. Geographic: The location, size of the area, density, and climate zone of your customers.

2. Demographics: The age, gender, income, family composition and size, occupation, and education of your customers.

3. Psychographics: The general personality, behavior, life-style, rate of use, repetition of need, benefits sought, and loyalty characteristics of your customers.

4. Behaviors: The needs they seek to fulfill, the level of knowledge, information sources, attitude, use or response to a product of your customers.

One of the best ways to identify your target market is to look at your existing customer base. Who are your ideal clients? What do they have in common? If you do not have an existing customer base, or if you are targeting a completely new audience, speculate on who they might be, based on their needs and the benefits they will receive. Investigate competitors or similar businesses in other markets to gain insight.

TARGET MARKETING

Who are your best customers? Where should you direct your marketing activities?

41

Where and how should you allocate your advertising and promotional efforts?

Target Marketing, provides Focus for your business. It helps to establish critical Operational goals and defines what must be done to achieve them

It shows how the different parts of the business contribute to achieving profitable sales levels. Target Marketing is both a planning and an action tool. The process is straightforward. Plan what needs to be done, then implement the specific activities needed to turn these plans into reality. An overall market environment made up of unlimited specialty wants and needs has developed with markets made up of smaller numbers of target customers. Smaller firms can take advantage of this market shift by specializing in addressing the needs of very precisely defined, smaller target markets. Large firms may be less capable of providing such specialty products/services because they need volume operations to support large over the target customers themselves help to define much of the marketing approach. Successful target marketing requires a certain attitude or philosophy towards the business as well as the performance of various activities.

What Customers Want

Marketing is more than an activity, it is an attitude Instead of trying to get customers to buy what the firm

likes to make, or happens to have on hand, the marketing oriented firm tries to produce or sell what its customers want which can be sold at a profit.

42

Do not simply throw out everything that you now have and replace goods or production machinery with completely new items.

HOWEVER, AS YOU ANALYZE YOUR MARKET AND CUSTOMER PROFILES, AND SO GAIN AN UNDERSTANDING OF THEIR WANTS, DESIRES, AND PERCEIVED NEEDS, YOU CAN BEGIN TO REORIENT YOUR BUSINESS OVER TIME TO TAKE BEST ADVANTAGE OF THESE NEW INSIGHTS. CONSIDER BOTH THE SHORT TERM AND LONG-TERM IMPLICATIONS OF DEVELOPING AND IMPLEMENTING THE RIGHT TARGET MARKETING STRATEGY FOR YOUR BUSINESS.

Customer Attitudes

For a long time, people have believed that advertising can be used to change people's minds about what they want. This is an incredibly difficult process at best, and an extremely expensive one. Because of these two factors, it is a process that smaller firms simply cannot afford to pursue. Instead, it is much more productive for any size firm to tune in to target customer attitudes as they currently exist. Once they have identified the actual prevailing attitudes, they can begin to organize company resources needed to constructively address and satisfy these attitudes the key question is,

"What are the existing customer attitudes?"

With this as an objective, developing an understanding of existing customer attitudes becomes essential, and their identification becomes an important part of the marketing

43

process. Once these customer attitudes, needs or preferences are identified, the entire firm can then organize itself to satisfy these needs as completely and efficiently as possible.

Why Target Marketing?The idea is simple enough. Every business has a potential market

out there somewhere within that broad, fuzzy, agglomeration of

persons and organizations that might conceivably be induced to

buy your product, service or merchandise. It is important to note

that because many businesses offer more than one

product/service, they may be shooting at more than one target at

the same time. A good example is an automobile dealership that

sells more than one brand of car.

Target Marketing - Eight Steps

STEP 1: Define the Product/Service

The business has a product or service to offer, in many cases more

than one of each. Each product or service must be carefully

studied to determine what is special about it. It is this unique

combination of product skills and resources that allow a smaller

firm to differentiate itself from its competitors, large or small, and

to identify target market segments that it can serve especially

effectively, frequently, far more successfully than larger firms with

more resources, who are less focused!

STEP 2: What Wants/Needs are satisfied

44

BEFORE THE FIRM CAN CONSIDER WHOSE WANTS OR NEEDS ARE BEST SATISFIED BY ITS PRODUCT OR SERVICE, IT MUST DETERMINE HOW THE PRODUCT OR SERVICE CAN SATISFY. WHAT NEEDS DOES IT MEET? WHAT WANTS CAN IT FULFILL? THIS STEP PERMITS THE PRODUCT OR SERVICE TO BE VIEWED FROM A SLIGHTLY DIFFERENT ANGLE. ANY GIVEN PRODUCT OR SERVICE WILL PROBABLY SATISFY A VARIETY OF WANTS OR NEEDS. THE BUSINESS SHOULD LIST ALL IT CAN POSSIBLE IDENTIFY. THE MORE USEFUL APPLICATIONS YOU CAN IDENTIFY FOR YOUR PRODUCT/SERVICE, THE GREATER THE POTENTIAL MARKET DIMENSION.

STEP 3: IDENTIFY MARKET SEGMENTS

At this point, you have considered three important factors; an identification of the product/service, the product/service appeal factors, and a rough list of potential customers. We will now refine the third factor by addressing in more detail, which might want/need, these products/services

STEP 4: Segment (Differentiate) the Market

Segmenting the market means to divide it into classes or

categories of people or firms based on different sets of factors,

characteristics, or other considerations. It allows an identification

of where these potential customers are and how many of them

there are. Identifying them will lead to the formulation of

productive marketing approaches to these groups There are a

myriad of ways of evaluating a target market, such as economic,

45

Socioeconomic, geographic, demographic (age, sex, race,

education, occupation), lifestyle, and others.

STEP 5: Rank Differentiated Segments

The goal is profit. Therefore, since some of the market will be

easier to sell to at a given price than others, they should be the

primary targets. Again, it is important to have increased

profitability rather than increased sales as the goal of the firm. The

factors affecting profitability are:

Direct Sales Cost

Indirect Sales Cost

Distribution & Logistical Problems

Pricing (Some segments may be more price sensitive than others)

Size of Segment

Ease of Selling to a Given Segment

Image of the Firm in the Market

Sales Personnel- Skills and Weaknesses

STEP 6: Evaluate Segment Mixes

The trick now is to assemble them into a pattern that will produce

the greatest return for the least effort in terms of time and money.

46

If a great deal of guesswork has been involved up to this point, the

results may be highly questionable

STEP 7: Formulate Strategy

THE FOCUS IS HOW TO ATTRACT THESE SEGMENTS OR TARGET MARKETS, SO THAT THEY WILL PURCHASE THE FIRM'S PRODUCTS/SERVICES AT A LEVEL THAT IS PROFITABLE FOR THE BUSINESS. THIS PROCESS IS ALSO REFERRED TO AS MARKET PENETRATION FORMULATING THE APPROPRIATE STRATEGY CAN BE BOTH A CREATIVE AND AN ENTERTAINING PROCESS. THERE ARE ONLY A RELATIVELY LIMITED NUMBER OF WAYS TO PROMOTE A PRODUCT: PERSONAL SELLING, ADVERTISING, DIRECT MAIL, AND COMBINATIONS AND PERMUTATIONS OF THESE.

STEP 8: Execute Strategy

Action is a critical component of any market strategy. Without action, the analysis and the planning are a wasted effort. The strategy has been developed, the segments evaluated, the overall scheme approved and then shelved.

Outline

1. Identifying Potential Customers2. Conducting Market Research3. Choosing a Target Market4. Compiling a Customer Profile5. Resources

47

Following flowchart briefly describes as to which direction we have

to follow while segmenting the target market

48

Comparison of Automobile And Consumer Durable At Dealership Level

S.No Attributes Automobile Consumer Durables

1 Turnover High Low

2 Margin 8%-12% 2%-4%

3Penetration Level

More in small or large towns or cities

More in Rural areas or in cities also

4

Training of Sales Executives

Executives get Training after every specific period As such no training

5 Supply-Chain Co->Dealer->CustomerCo->Distributor->Dealer >Customer

6Discount Margin Cartel

Depends on Dealer To Dealer

7 CSR Proper well organized

Only Sales man is there to serve the customer

8 ASSCustomer get 3free service

Customer have to go at manufactured level

9Brand Association

Customer first choice is more pertinent

Customer can change his or her choice

10 Payment Instantaneous Payment

More focus on Finance & Installment

11Post-Sales Follow UP More Very Less

12Buying Procedure

Customer can wait for new model Instant buying

13 Database Large Few

14Brand Transition Single-Tier Multi-Tier

15 AdvertisementParent Company & dealer both give

Only from Parent Company

49

advertisement

16Loyality Programs Yes No

17

Customer Satisfaction Index

Well- Defined & Organized None

18 Promotion Free Service Camps None

19Customer Retention More Very Less

20 Maintenance

Only free service which customer can extend upto 4 years(first 2yr are free)

Annual Maintenance Contract (AMC)

50

MARUTI CULTURE

Their employees are their greatest strength and asset. It is this

underlying philosophy that has moulded their workforce into a

team with common goals and objectives. Their Employee-

Management relationship is therefore characterized by:

Participative Management.

Team work & Kaizen.

Communication and information sharing.

Open office culture for easy accessibility

To implement this philosophy, they have taken several measures

like a flat organizational structure. There are only three levels of

responsibilities ranging from the Board Of Directors, Division Heads

to Department Heads. Other visible features of this philosophy are

an open office, common uniforms (at all levels), and a common

canteen for all.

This structure ensures better communication and speedy decision

making processes. It also creates an environment that builds trust,

transparency and a sense of belonging amongst employees.

For Investors:

Maruti Udyog Limited, a subsidiary of Suzuki Motor Corporation of

Japan, has been the leader of the Indian car market for about two

decades. Its manufacturing plant, located some 25 km south of

New Delhi in Gurgaon, has an installed capacity of 3,50,000 units

51

per annum, with a capability to produce about half a million

vehicles.

The company has a portfolio of 11 brands, including Maruti 800,

Omni, premium small car Zen, international brands Alto and

WagonR, off-roader Gypsy, mid size Esteem, luxury car Baleno, the

MPV, Versa, Swift and Luxury SUV Grand Vitara XL7.

In recent years, Maruti has made major strides towards its goal of

becoming Suzuki Motor Corporation's R and D hub for Asia. It has

introduced upgraded versions of WagonR Zen and Esteem,

completely designed and styled in-house.

Maruti's contribution as the engine of growth of the Indian auto

industry, indeed its impact on the lifestyle and psyche of an entire

generation of Indian middle class, is widely acknowledged. Its

emotional connect with the customer continues.

Maruti tops customer satisfaction again for sixth year 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 India Sales Satisfaction

Study.

The company's quality systems and practices have been rated as a

"benchmark for the automotive industry world-wide" by A V

Belgium, global auditors for International Organisation for

Standardisation.

52

In keeping with its leadership position, Maruti supports safe driving

and traffic management through mass media messages and a

state-of-the art driving training and research institute that it

manages for the Delhi Government.

The company's service businesses including sale and purchase of

pre owned cars (TrueValue), lease and fleet management service

for corporates (N2N), Maruti Insurance and Maruti Finance are now

fully operational.. These initiatives, besides providing total mobility

solutions to customers in a convenient and transparent manner,

have helped improve economic viability of The company's

dealerships.

The company is listed on Bombay Stock Exchange and National

Stock Exchange.

MUL is a Board-managed company. Currently the directors on the

Board are:

Mr Shinzo Nakanishi, Chairman

Mr Jagdish Khattar, Managing Director

Mr Hirofumi Nagao, Joint Managing Director

Mr Shinichi Takeuchi, Joint Managing Director

Mr Kinji Saito, Director (Marketing and Sales)

Mr Osamu Suzuki, Director

Mr R C Bhargava, Director

53

Mr S V Bhave, Director

Mr Kumar Mangalam Birla, Director

Mr Amal Ganguli, Director

Ms Pallavi Shroff, Director

Mr Manvinder Singh Banga, Director

54

PRODUCTS

55

Maruti’s marketing objective is to continually offer the customer new products and services that:

Reduce the customer’s cost of ownership of their cars; and

anticipate and address the customer’s needs and preferences in all aspects and stages of car ownership, to provide what they refer to as the “360 degree customer experience.”

They sell ten models with more than 50 variants in segments A, B, C, and utility vehicle segment of the Indian passenger car market. Of these, they manufacture nine models and import the Grand Vitara as a completely built unit from Suzuki in Japan. Their models and variants are designed to address the changing demands of the market and are periodically upgraded in technology, styling and features. To take advantage of the brand recognition associated with their products, they retain the brand name of the product through various stages of product upgrades over time. For example, the version of the Maruti 800 brand currently sold in the market is a significantly upgraded version, in terms of technology, design and styling, of the Maruti 800 launched in 1983.

A Maruti 800

A OMNI

B Zen

56

B Wagon R

B Alto

C Esteem

C Baleno

C Versa

C SWIFT

Utility Vehicle GYPSY KING

Utility Vehicle GRAND VITARA

57

BALENO

DIMENSIONS

Length 4225mmWidth 1690mmHeight 1390mmWheelbase 2480mmTread Front 1440mm

Rear 1435mmGround clearance 170mmMin. turning radius 4.9mm

WEIGHT

Kerb weight 985 kgsGross vehicle weight 1510 kgsENGINE PERFORMANCE Engine All-Alluminium, 16 Valves SOHC

Cylinders In-line 4No. of valves 16Swept volume 1590 ccBore x stroke 75.0 x 90.0 mmCompression ratio 9.0 0.2:1Max. Power output PS 91 bhp@5500 rpmMax. torque 130.5 Nm@3000 rpmFuel distribution Multi Point Fuel InjectionMax. speed 175 km/hr

58

TRANSMISSION

Type 5 forward, all-synchromesh, 1 reverseCHASSIS

Steering Rack and Pinion with hydraulic power assistance

Brakes Type Vacumm assisted hydraulicFront Ventilated disc Rear Drum, leading/trailing

Suspension Front McPherson strut & coil spring with L shaped lower arm and anti-roll bar

Rear McPherson strut & coil spring with parallel link arrangement

Tyres 165/80R13(Lxi)185/65R14 tubelless (Vxi)

CAPACITY

Seating Front 2Rear 3

Fuel tank volume 51 litres

59

WAGON R

SPECIFICATIONS

DIMENSIONS IN MM

Length 3520Width 1490 (VXi), 1475 (LX, Lxi)Height 1660 (without roof rail), 1690 (with roof rail)Wheelbase 2360Front Track 1295Rear Track 1290Min. Ground clearance 165

WEIGHT IN KG

Kerb Weight 825 (LX, Lxi), 850 (VXi), 840 (AX)Gross Vehicle Weight 1250 (LX, Lxi, VXi)

CAPACITY

Seating Capacity 5 personsFuel Tank Capacity 35 litres

ENGINE

Swept Volume 1061 ccEngine Type 4 cylinder in line, FC Engine

4 Valves per cylinder, MRFI

60

Engine Control 32-Bit Electronic Control Module (ECM)Max. Power, bhp 64@6200rpmMax. Torque, Nm 84@3500rpm

POWER STEERING

Type Electronic power steering (EPS) (Lxi, VXi &AX)TRANSMISSION

Type Manual (LX, LXi, VXi) – 5 speed, All-synchromesh with two overdrive gears, Automatic (AX) – 3 speed

SUSPENSION SYSTEM

Front McPherson Strut with torsion type roll control device

Rear Coil spring, gas-filled shock absorbers with tree-link rigid axle and isolated trailing arms

61

ESTEEM

SPECIFICATIONS

DIMENSIONS LX/Lxi/VXi

Overall length 4095 mmOverall Width 1575 mmOverall height 1395 mmWheelbase 2365 mmTread Front 1365 mm

Rear 1340 mmGround clearance 170 mmTurning radius 4.8 m

WEIGHT

Unladen weight 870 kg (LX), 875 kg (Lxi, VXi)

Laden Weight 1315 kgENGINE

Type Petrol engine, 4 stroke cycle, allaluminum Water cooled SOHC

Cylinders In-line 4No. of Valves 4 / CylinderPiston displacement

1298 cc

Bore X stroke 74 x 75.5 (MM)Compression ratio

0 9.0 ± .2

Maximum output 85 bhp @ 6000 rpmMaximum torque 110 Nm @ 3000 rpm

62

Engine Control 32-Bit Electronic Control Module (ECM)TRANSMISSION

Manual 5 forward, 1 reverse all-synchromeshCHASIS

Steering Rack & PinionBrakes Front Booster assisted

Ventilated discRear Booster assisted drum

Suspension Front McPherson strut and coil springRear Coil spring

Tyre Size (Tuebless)

155/80 R 13 (LX, LXi), 175/70 R 13 (VXi)

63

MARUTI 800

SPECIFICATIONSDIMENSIONS

Overall length 3335 mmOverall width 1440 mmOverall height 1405 mmWheelbase 2175 mmMinimum turning radius 4.4 mGround clearance 170 mmSeating capacity 4 persons

WEIGHTUnladen weight 655 kg (AC BS I), 640 kg (Std. BS I),

665 kg (AC BS II & AC BS III),650 kg (Std. BS II & Std. BS III)

Laden weight 1000 kgENGINE

Type 4 stroke cycle, water cooled SOHC (1C2V)Number of cylinders 3Piston displacement 796 ccMaximum output (Std., AC)

37 bhp at 5000 rpm

Maximum torque (Std., AC)

59 Nm at 2500 rpm

POWER TRANSMISSIONStd., AC 4 forward, all synchromesh

1 reverseSTEERING

Steering Rack & pinionSUSPENSION

Front McPherson strut & coil springRear Coil spring with gas filled shock absorbers

BRAKESFront DiscRear Drum

TYRESTyre size Radial 145 / 70 R-12

CAPACITYFuel tank capacity 30 liters (BSI), 28 liters (BS II & BS III)

64

NEW ALTO

SPECIFICATION

WEIGHTKerb weight ALTO 725 kg

ALTO LX/ALTO Lxi 740 kg Gross vehicle weight 1165 kg

ENGINE Swept volume 796cc Engine type FC engine, 4

valves Per cylinder MPFI

No. of cylinders 3 Engine control 32 bit computer Maximum power 47 bhp @ 6200 rpm Maximum torque 62 Nm @ 3000 rpm Transmission 5 speed, all synchromesh,

manualSUSPENSION

SYSTEM Front McPherson Strut with torsion

type anti-roll bar

Rear Coil spring with double action telescopic shock absorbers

65

Seating Capacity

5 persons

Tyre size 145 / 80 R12 Overall length 3495 mm Overall width 1495 mm Overall height 1460 mm Wheelbase 2360 mm Tread Front 1290 mm

Rear 1290 mm Minimum turning radius 4.6 m Ground clearance 160 mm

66

OMNI

SPECIFICATIONS

DIMENSIONS

Length 3370 mmWidth 1410 mmHeight 1640 mmWheel base 1840 mmGround clearance 165 mmTurning radius 401 mmWEIGHT (Kerb weight)Omni 5 Seater 785 kgOmni E 8 Seater 800 kg

ENGING

Type 4 stroke cycle, water cooledNo. of cylinders 3Piston displacement 796 ccNo. of engine valves 6

67

POWER

TRANSMISSION

Type Manual, 4 forward, all synchromesh, 1 ReverseSUSPENSION

Front Mc Pherson StrutRear Leaf spring with shock absorbers

BRAKES SYSTEM

Front Disc (Booster AssistedRear Drum

TYRES

Tyre size 145R 12 LT 6PR (Radial)CAPACITY

Fuel Tank (Petrol) 36 LitresSEATING CAPACITY

Seating capacity 5 seater & 8 seater options availablePERFORMANCE

Maximum Power 35 bhp @ 5000 rpmMaximum Torque 6.1 kgm @ 3000 rpm

68

SWIFT

SPECIFICATION

BODY TYPE

Body type HatchbackNumber of doors 5Seating capacity 5

ENGINE

Capacity 1298ccNumber of cylinders 4Number of valves 16Bore x Stroke 74.0 x 75.5mmCompression ratio 9.0:1Maximum power 87bhp@6000rpmMaximum torque 113Nm@4500rpmFuel distribution Multipoint injection

TRANSMISSION

Type 5-speed manual, with synchromesh in all gears, one reverse

Gear ratios 1st 3.5452nd 1.9043rd 1.2804th 0.966

69

5th 0.757Reverse 3.272

DIMENSIONS

Overall length 3695Overall width 1690Overall height 1530Wheelbase 2390Track Front 1470Track Rear 1480Ground Clearance 170Minimum turning radius

4.7 metres

Luggage capacity 232 litres (with seatback raised), 368 litres (with seatback folded)

CHASIS

Steering Rack & pinion, power assisted Brakes (front) Ventilated DiscsBrakes (rear) DrumsSuspension (front) Macpherson strut and coil spring Suspension (rear) Torsion beam and coil spring

WEIGHTS

Kerb weight 980kgs (LXi), 1000kgs (VXi), 1010 kgs (ZXi) Gross vehicle weight 1415kgsMaximum speed 160kmphFuel tank capacity 43 litres

70

VERSA

SPECIFICATIONS DIMENSIONS

Overall length 3675 mm Overall width 1475 mm Overall height 1905 mm Wheelbase 2350 mm Wheel track Front 1280 mm

Rear 1290 mmTurning radius 4.5 mts

WEIGHT Unladed weight Versa -930 kg, DX -975 kg, DX2 -

985 kg, SDX -975 kg Laden weight Versa, DX, DX2 & SDX -1585 kg

ENGINE Type 4 stroke cycle, all-aluminum,

Water cooled SOHC MPFI Cylinders In-Line 4 No. of valves 4 / Cylinder Piston displacement

1298 cc

Bore X stroke 74 X 75.5 (mm) Compression ratio 9.0 0.2 Maximum output 82 bhp @ 6000 rpm Maximum torque 102 Nm (10.4 kgm) @ 3000 rpm TRANSMISSION Manual, 5 forward, all

synchromesh, 1 reverse CHASSIS

Steering Rack & Pinion, Power assisted (DX,

71

DX2 & SDX) Brakes Front Booster assisted ventilated disc Rear Booster assisted drum Suspension McPherson strut with torsion, Type

roll control device Rear Coil spring with three link rigid

axle and isolated trailing armsTyre size 155/80 R 13 LT

CAPACITY Seating DX & DX2:8 Persons, SDX:7

persons and Versa : 5 persons Fuel tank 40 liters

72

ZEN

SPECIFICATION CAPACITIES LX LXi VXi

Seating Persons 5Fuel in litres 35Engine in CC 993Unladen weight in kgs 765Laden weight in kgs 1190Tyres 145 / 80 R

12 (Front & rear)

PETROL Bharat Stage IILX LXi VXi

All aluminium engine 16 valve, 4 cylinder inline engine

16 bit ECM Multipoint fuel injection Maximum engine output in bhp/rpm

60@6000

Maximum engine torque in kgm/rpm

8@4500

Compression ratio 9.4:1PETROL Bharat

Stage IIILX LXi VXi

All aluminum engine 16 valve, 4 cylinder inline engine

32 bit ECM

73

Multipoint fuel injection Maximum engine output in bhp/rpm

60@6200

Maximum engine torque in kgm/rpm

8@4500

Compression ratio 9.4:1DIMENSIONS

Overall length 3535mmOverall width 1495mmOverall height 1405mmWheelbase 2335mmGround clearance 165mm

74

PRICES OF MARUTI PRODUCTS

Car market leader Maruti Udyog Limited has announced a marginal

increase in price of certain models. The increase, which comes into

effect from today, varies from 0.17 percent to 1.47 percent.

The price increase is due to rise in input costs and freight

costs, which increased following the rise in oil prices. In

this phase, the company has decided to pass on only a part

of the increase in costs to the customers. There is no

change in the prices of Swift, Zen, Baleno (Vxi) and

WagonR (Petrol).

Ex-Showroom Prices in Delhi (in Rs)     

Model New Old IncreaseChang

e %

M800 Std 191646 191146 500 0.26%

M800 Std Ac 213062 212562 500 0.24%

Alto Std 231585 231085 500 0.22%

Alto Lx 265262 264762 500 0.19%

Alto Lxi 283878 283378 500 0.18%

Omni Cargo LPG 194725 192725 2000 1.04%

Omni Cargo 213706 213206 500 0.23%

Omni (Eight Seater) 221268 220768 500 0.23%

Omni LPG 230388 227388 3000 1.32%

Esteem Lx 445968 444968 1000 0.22%

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Esteem Lxi 476223 475223 1000 0.21%

Esteem Vxi 511520 510520 1000 0.20%

Baleno Lxi 576173 575173 1000 0.17%

Versa Dx 433575 432575 1000 0.23%

Versa Dx2 471779 470779 1000 0.21%

Versa Std 360182 359182 1000 0.28%

WagonR Lx LPG 345106 340106 5000 1.47%

WagonR Lxi LPG 373160 368160 5000 1.36%

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ORGANISATION STRUCTURE AT MUL

Maruti Udyog ltd. Has a flat organisation structure with a

maximum of three levels.

Head office

MD

MFG FIN OTHER

DIRECTOR N CONTROLLER GM DGMS AGMS

GM/ DGMS DGMS AGMS MGRS/AMS

MGRS/AMS MGRS/AM SR GM/EX

ENGINEERS(EX) SR. EX./EX TRAINEES

J.E. (TRAINEES)

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THE PRODUCTION PROCESS AT MARUTI

78

STEEL COILS

BLANKING

PRESSING

WELDING

PAINTING

ASSEMBLY

VEHICLE INSPECTION

TEST RUN

SUPPLY & DISPATCH

FROM VENDOR

S

FROM VENDOR

S

FROM VENDOR

S

Press Shop: Their 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. They also have in-house

capability and the necessary technical knowledge for the

design and manufacture of medium-size press dies.

Weld Shop: They have 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: They have 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 stoving 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.

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Assembly Shop: They have 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: They assemble and test engines in

their engine shops and carry out precision machining of engine

components in their machine shops.

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INTERNATIONAL BUSINESS

In August, 2003 Maruti crossed a milestone of exporting 300,000 vehicles since its first export in 1986. Europe is the largest destination of Maruti’s exports and coincidentally after the first commercial shipment of 480 units to Hungary in 1987, the 300,00 mark was crossed by the shipment of 571 units to the same country. The top ten destinations of the cumulative exports have been Netherlands, Italy, Germany, Chile, U.K., Hungary, Nepal, Greece, France and Poland in that order.

The Alto, which meets the Euro-3 norms, has been very popular in Europe where a landmark 200,000 vehicle were exported till March 2003. Even in the highly developed and competitive markets of Netherlands, UK, Germany, France and Italy Maruti vehicles have made a mark. Though the main market for the Maruti vehicles is Europe, where it is selling over 70% of its exported quantity, it is exporting in over 70 countries.

Maruti has entered some unconventional markets like Angola, Benin, Djibouti, Ethiopia, Morocco, Uganda, Chile, Costa Rica and El Salvador. The Middle-East region has also opened up and is showing good potential for growth. Some markets in this region where Maruti is, are Saudi Arabia, Kuwait, Bahrain, Qatar and UAE.

The markets outside of Europe that have large quantities, in the current year, are

Algeria, Saudi Arabia, Srilanka and Bangladesh. Maruti exported more than 51,000

vehicles in 2003-04 which was 59% higher than last year. In the financial year 2003-

04 Maruti exports contributed to more than 10% of total Maruti sales.

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MARUTI ALL INDIA SALES – 3 YR TRENDSegment 2003-

04Growth 2004-05 Growt

h2005-06 Growt

hA1 (Mini - Hatchback) 167,561 17% 116,262 -31% 89,223 -23%

A2 (Compact - Hatchback) 176,132 47% 271,280 54% 335,136 24%

A3 (Mid Size) 14,173 28% 29,637 109% 31,939 8%

A4/A5/A6 (Exec./Prem./Luxury)

NA NA NA NA NA NA

C (Van Type) 59,526 15% 65,019 9% 66,366 2%

Passenger Cars - MUL 417,392

28% 482,198 16% 522,664 8%

Passenger Cars - Total Industry

758,123

26% 885,029 17% 948,669 7%

MUV (Utility Vehicles) 3,555 12% 5,204 46% 4,374 -16%

Passenger Vehicles - MUL 420,947

28% 487,402 16% 527,038 8%

Passenger Vehicles - Total Industry

901,150

24% 1,050,246

17% 1,129,316

8%

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MARKET SHARE

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COMPETITION MODELS

SEGMENT Maruti Competition

A1 (Mini - Hatchback)

M800  

A2 (Compact - Hatchback)

Zen, WagonR, Alto, Swift

Hyundai - Santro & Getz; Tata - Indica & Palio; GM - Corsa Sail

A3 (Mid Size) Esteem, Baleno

Hyundai - Accent; Tata - Indigo & Petra; Honda - City; GM - Corsa, Optra, & Aveo; Ford -

Ikon, Fusion, & Fiesta

A4/A5/A6 (Exec./Prem./Luxury

)

  Hyundai - Elantra & Sonata; Honda - Accord; GM - Vectra;

Ford - Mondeo; Skoda - Octavia & Superb; Toyota - Corolla &

Camry; Daimler Chrysler - C,E, & S Class;

C (Van Type) Omni, Versa  

MUV (Utility Vehicles)

Gypsy, Grand Vitara

Mitsubishi - Pajero; Hyundai - Terracan & Tucson; Ford -

Endeavor; Toyota - Prado & Innova; Nissan - X Trail; Honda - CRV; GM - Forrester & Tavera;

Tata - Sumo & Safari; Mahindra - Jeeps, Scorpio, & Bolero

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MARUTI CULTURE

Building a distinctive organizational culture is one of the most

challenging tasks facing any co. By ‘organizational culture’, Maruti

means an organizational philosophy, which guides the action and

the behavioral patterns of the members. It also defines through the

implicit, what the outside environment can expect from the

organization.

Hence the necessity of the work culture which, while appealing to

those organizations.

Hence the necessity of a work culture which, while appealing to

those within, also satisfies the expectations of those outside the

organizational environment.

A harmony between the work culture and the organizational

objective is very essential. It is, hence the duty of every employee

to work towards sustaining the Maruti culture, which it has built

over the years. All its action and behavior should be guided by the

organizational culture. In order to comply with the basic objectives

adopted since it’s inception viz. Fostering efficiency, productivity

and team spirit and its vision of being internationally competitive,

it has to create an atmosphere where a ‘we’ feeling dominates,

where each one of them considers themselves to be an important

part of the organizations.

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Concern for the human aspect

The attempts should be directed towards creating an atmosphere

where each member respects his fellow-worker opinion equally

important would be a refrain from any action which harms the

company, but is designed to further individual self-interest. Such

action can be self-defeating in the long term. Individual goals can

be attained only by a system of mutual cooperation, and

recognizing and respecting the other person’s right knowledge and

character. A candid and open ways of functioning must co-exist

with an empathy for the views of the professional counterparts.

Working as a team

This environment of mutual trust can began only when the

employees could value the team-work, recognizing the truth held

in the age old saying “united we stand – divided we fall”. A team is

not merely the group of people working together but the one

where the members are bound together in interpersonal

relationships and share the corporate goals and objectives. It is the

teamwork, alone which will enable us to discover the joy of

achieving the apparently impossible.

Inter team mutuality

If it recognizes that the whole company is a team, it will realize the

importance of consultation, information sharing and cooperation

with other departments and division. It must not try and do

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everything themselves or within the department. The cause of

failures is to be found in the attitude of “self sufficiency”.

Concern for quality/cost

It is the task of each and every member of the Maruti family to

discipline his mind to the value of the service and quality that the

co. Has adopted. It is necessary to bear in mind that quality is

invisible. Quality has to be maintained in the workshop or in all the

dealings with the outsiders. A person who is quality conscious will

maintain the quality in all the aspects of the life.”Quality” has to be

maintained not in the workplace but also at home and in the

dealings with the outsiders. The same applies to the cost. Co.

Money should be treated with even more care than the personal

funds.

Discipline

Real discipline comes from within a person. Most basic feature of

being disciplined is that person should be disciplined from within,

not due to the fear of any punishment. An employee is thus

expected to be disciplined in both letter and spirit and he should

be following all the rules and regulations of the co., he should be

sincerely following all the procedures prevalent in the co. Discipline

requires voluntary compliance with what is being prescribed by the

co. For it’s employees. It also means courtesy towards one’s

colleagues as well as to the customers and other with whom one

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comes in the contact. Infect, discipline is based on always having

consideration for the others in our action.

Performance orientation

Any co. Can grow and prosper only if the co. Makes profit, and is

able to achieve its targets and goals in relation to the production

sales, consumer satisfaction etc. All the employees must realize

that this can only come about if the employees are performance

and result oriented. Excuses for the failure do not help the co. Each

employee should bear in mind that passing on the responsibility to

each other would not help the co. And thus all the employees

should be wary of such trends.

Communication channels

As a part of open culture, all the company tries to have the top-

down as well as bottom-top communication. In an organization all

the communication should be such that each employee should be

able to communicate through minimum possible channels.

Managers facilitate various periodic meetings, both structured and

unstructured well holds various informal interactive sessions for

making them accessible listen and respond to the employees’

views and suggestions. The company has various forums in which

such type of the activities are followed:

Daily morning meetings

Daily production meetings

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Weekly management committee meetings

Divisional/departmental meetings

Union management meetings

Maruti Sahyog Samiti

Open communication is also ensured through the system of:

Open office

Common canteen

Monthly newsletter

Its infrastructure is supportive of open communication that is

believed to be on date it has large no. Of the users (Maruti

personnel, dealers and vendors) linked by e-mails and can assess

the information on the companies mainframe. From 1995-96

onwards Maruti has initiated review of the communication process

through employee satisfaction, survey is conducted once in every

two years.

HR VISION

Lead and Facilitate continuous change towards organizational

excellence; create a learning and vibrant organisation with

high sense of pride amongst its members

CULTURE BUILDING INITIATIVES SINCE INCEPTION

Japanese Management philosophy of Team Spirit

Common uniform

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Open office

Common Canteen

Open Office – Easy accessibility, Speedy Communication

and decision making

Morning Meetings

Morning Exercises

Focus Of Effective Managenent Process Since Inception

Management Committee Meetings – every Tuesday

Single unaffiliated Union

Excellent Industrial Relations scenario – no loss of

Mondays due to strike/lockout etc. in past 5 yrs.

Maruti Udyog Sahyog Samiti – a forum for Non-Unionised

Staff

Delayered Organisation Structure (Workers(Techno. /

Asst.), Supervisors, Executives, Managers)

Top Driven HR – MD is also Director HR

HR’s role of a facilitator

Line managers as HR Managers

Year of the Customer –HR Internal Customer Focus

Focus on Internal & External Customer

HR INITIATIVES

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Prepare MUL Strategic Business Plan-2000-2003; To

achieve the Vision & Goal

Improve the performance Appraisal system - it’s process,

skill & usage

Introduce a Potential Appraisal System

Systematic career planning ; Job Rotation ;

Empowerment; Job enrichment

Periodic communication meeting at various level; Roll out

of Vision

Raise cost consciousness for cost control and reduction

Exposure on Brand Strategy to all non- marketing staff

Retention of Talent

INDUCTION & SUCCESSION

Transparent Recruitment & Selection process

Recruitment on an All India Basis – no sectoral or region

specific

Recruitment of Best available Talent in the Country

- Engineers – CAMPUS - IITs/RECs/Rorkee/HBTI

- ALL-INDIA TEST

- MBAs – IIMs/XLRI

- CAs - Rank Holders

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- Technicians - ITI’s diploma holders after All India Exam

& Apprenticeship In MUL

Lateral Entry for Experienced Professionals

SUCCESSION PLANNING

Potential & Performance

Vacancy - based

TRAINING & DEVELOPMENT

Annual Training Plan - All Levels

Training customised to meet Organisational Objectives

Topics selected based on Vision, Values & Departmental

Feedback of Company-wide Managers

Competency Mapping to identify Individual Training

Needs

Technical Training on latest Technologies abroad at SMC,

Japan

STRONG FUCUS ON TRAINING INITIATIVES

- Build a Learning Organisation

- Continuous Value Additions to Professional Skills

- Customised Training

- Training to the personnel of Business Partners

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OVERSEAS TRAINING

Training held in co-ordination with SMC, Japan and AOTS

(Assoc. for Overseas Tech. Scholarship) (covered 1600

employees under the various schemes)

6 months SMC Training for Technicians - OJT in SMC,

Japan (2 batches/yr of 50 each)

9 months Javada Training for Press, Tool & Die Specialists

- Design & Maintenance

AOTS Managerial Training (4-10weeks) for Manager &

above - Managerial Best Practices

AOTS Technical Training (3.5 to 6 months) for Supervisors

& above - Technological Knowhow

R & D Training (2 yrs.) - Research on new Technologies

APPRAISAL & REWARD

Appraisal

New Appraisal System based on KRAs & Targets

Review of Targets at regular Intervals

People Development an important KRA

Reward

Promotions based on Performance

Productivity & Profit-linked Incentive Schemes

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Training including Long-term SMC Japan Trg.

Highest paid workforce in the Industry, if not the Country

LEADERSHIP

Vision, Value & Team Building Workshops for Top

Management

CFT (Cross Functional Teams) of Managers for Major

Thrust Areas

Managers sent to Joint Ventures to upgrade their

practices to MUL standards

CAREER DESIGN

Performance & Potential based Appraisals

Fast Track Option for High-performers

Promotions after Managers Vacancy based

Interviews for promotions above Managers

Selection of Supervisors:

– Performance / Attendance / Discipline record

– Written Test & Interview

Job Rotation - including Inter-functional

OUTSOURCING HR

Part of our Long-term Strategic Plan

Currently Trainers hired from outside

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RETENTION & EMPLOYEE WELFARE

Employee Welfare

- Residential Colonies for Employees – Chakkarpur &

Bhondsi

- Hospitalisation Reimbursement – on actuals without Ceiling

- Vehicle Loans

- Household Equipment Loans

- House Building Advance

- Annual Advance

MUL PF Trust – for better Mgt., Service & speedy redress

Proposed MUL Pension Scheme

Learning Opportunity - Benchmark in Auto Technology

Professional Value addition through Training

Opportunity for foreign training at SMC, Japan

Job Rotation & Job enrichment

EMPLOYEE ENGAGEMENT -ESOPS

Maruti Udyog Ltd. Employees Mutual Benefit Fund

Scheme

Managed by a 10-member Trust

Fixed Equity of 0.26%

Lock-in period of 3 years

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Transferable Internally

Promotional policies

Promotions, recognition are very powerful social rewards for the

employees. In Maruti promotion is awarded annually on the basis

of the points. These policies have the positive effect on the

employees and if the employee earn 45 points in 3 years than that

employee is given the promotion.

Dress code

The significance of wearing the same uniform does not lie in being

identified as a Maruti employee, it symbolizes as a new culture of

feeling oneself as a member of the same team that is ‘ Maruti

team’

The following notice is served at each department of the company.

“ Please ensure that you are in the company uniform when

you come on duty”

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COMPETITIVE STRENGTHS

MUL believes that they are well positioned to maintain and

enhance their leadership position in the small car segment in India,

while continuing to offer products in most segments of the Indian

market, on account of their competitive strengths, which include

the following:

Expertise in small car technology: As a subsidiary of

Suzuki, they have access to globally respected technology in

the small car segment. They have the advantage of Suzuki’s

expertise in all aspects of small car technology and design,

with respect to their products, their manufacturing processes

and business practices, the development of their supply chain

and the training of their personnel.

Extensive product portfolio: Their diverse product range

includes cars in segments A, B and C, and utility vehicles. They

manufactured five out of the ten models that were sold in the

combined A and B segments in India in fiscal 2002. They are

the only manufacturer of cars in segment A (priced below

Rs.300,000) where they have two models, the Maruti 800 and

the Omni. The Maruti 800 has been the largest selling car in

India for several years, and continued to have the highest

sales volumes of any model, with a market share of 25.3%. The

Omni, a versatile vehicle that can seat more passengers than

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the Maruti 800 or be used as an ambulance or cargo vehicle,

had a market share of 10.5% in fiscal 2002. They are also the

only manufacturer to sell three distinct models, the Zen, the

Alto and the Wagon R, in segment B (priced between

Rs.300,000 and Rs.500,000). They believe that their

dominance in segment A and extensive product range in

segment B enables us to offer the customer a wider choice in

the small car segment than any of their competitors. In

addition, the absence of other manufacturers in segments A

gives their dealers greater flexibility in promoting models in

segment B.

Quality products: In November 2001, they were one of the

first automobile manufacturers in the world to receive the ISO

9001:2000 certification. They began to export products in

1988, primarily in order to benchmark our products against

international quality standards. They have exported products

to approximately 70 countries, including countries in Western

Europe. Their products for export are manufactured using the

same assembly line as our products for the domestic market.

Extensive sales and service network: They believe that

they have the largest network of dealers and service centers

amongst car manufacturers in India. As of March 31, 2003, we

had 178 authorized dealers with 243 sales outlets in 161 cities.

They estimate their car parc to be in excess of 3.5 million

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vehicles. To service this car parc, at March31, 2003, they had

342 dealer workshops and 1,545 Maruti Authorized Service

Stations, or MASSs, which covered 898 cities in India backed

by Express Service Centers on 30 highways across the country.

In addition to the distribution of their cars, their dealership

network is a critical resource in our efforts to provide

customers with a “one-stop shop” for automobiles and

automobile related products and services such as automobile

finance, automobile insurance, Maruti-certified pre-owned cars

available for purchase, and leasing and fleet management, in

order to promote customer loyalty.

Brand strength: They have been present in the Indian market

for almost twenty years and have built their brand on the basis

of the values of trust and reliability. Most of their principal

competitors have been present in the Indian passenger car

market for a significantly shorter period. Certain manufacturers

have ceased to manufacture certain products shortly after

introducing them, or have left the market altogether. In

contrast, they continue to support the maintenance of their

products. This has contributed to the strength of their brand. In

2000, 2001 and 2002, J. D. Power Asia Pacific, Inc. ranked us

No. 1 in the India Customer Satisfaction Index, which assesses

customer satisfaction with product quality and dealer service.

They believe that this was the first time that a volume leader

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in the automobile industry anywhere in the world was ranked

first on the JD Power Customer Satisfaction Index. NFO

Automotives 2002 Total Customer Satisfaction Survey ranked

Maruti products as No. 1 in the “Economy”, “Premium

Compact” and “Entry Midsize” segments respectively, for

2002.

Integrated manufacturing facility: Their manufacturing

facility comprises three integrated plants with flexible

assembly lines located at Gurgaon in the northern state of

Haryana. Their facility has advanced engineering capability

and each plant is upgraded on an ongoing basis to improve

productivity and quality. As a result, their first plant set up in

fiscal 1984 is technologically at par with their newer plants and

is also used in the production of their new models. They

believe that they are one of the most efficient among the

vehicle manufacturing facilities of Suzuki’s subsidiaries outside

Japan in terms of productivity measured as the ratio of number

of vehicles produced to number of employees. They have an

installed capacity of 350,000 vehicles per year, which is the

highest among passenger car manufacturers in India and

among the passenger car manufacturing facilities of Suzuki’s

subsidiaries outside Japan. They have consistently produced in

excess of their installed capacity in the five fiscal years ended

March31, 2002.

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B USINESS S TRATEGY

They intend to continue to focus on the small car segment, while offering products in most segments of the Indian passenger car market. They aim to achieve their principal objectives by pursuing the following business strategies:

Maintain and enhance their product range: They intend to utilize Suzuki’s expertise in small car technology to produce new variants of their existing models and to upgrade their products with contemporary technology and features.

Increase reach and penetration: They plan to continue to utilize their extensive sales and service network to increase the reach, in terms of geographical spread, and penetration, in terms of sales volumes, of their products across India.

Increased availability of automobile finance: They continue to seek opportunities to expand the size of the Indian passenger car market, especially in the small car segment, through facilitating easy availability of automobile finance. To that end, they have recently entered into an agreement with the State Bank of India.

.

Continue to reduce costs to offer more competitive products:

Cost competitiveness has been, and continues to be, central to their strategy as the leading manufacturer in the small car segment to expand the size of the market by offering competitively priced, high quality products. The components of this strategy are:

102

Higher levels of localization

Vendor participation in cost reduction

Cost reduction on warranties

Reduction in initial investment cost

Reduction in number of vehicle platforms

Achieve further cost reduction through higher productivity

Lower cost of ownership:

Through their business strategies, they seek to reduce the consumer’s cost of ownership of their cars, which comprises the cost of purchase, the cost of fuel and maintenance, including spare parts and repairs, during the life of the vehicle, insurance, and resale value.

SALES NETWORK

Dealers: They offer their products to the customer through a

network of 178 authorized dealers with 243 sales outlets

across 161 cities. They believe that this is the largest network

of dealers amongst car manufacturers in India. Their dealers

employed more than 3,500 sales executives. They are linked to

their sales network through their secure extranet-based

information network. The sales of their spares, accessories and

automobile-related services such as insurance and finance

serve as additional sources of revenue for our dealers. They

believe that the availability of these related products and

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services at sales outlets also helps to attract customers to the

outlets and promotes sales of their cars.

Agreements with dealers: They generally appoint a limited

number of dealers for a certain geographical territory. Their

dealers provide services to customers such as pre-delivery

inspection of vehicles, sales of cars, after sales service, supply

of spare parts and other services that promote sales of cars

within the territory for which they are appointed. They have

the right to sell their products and services through other

dealers or intermediaries in any territory, whether or not one

of their dealers is already established in that territory. Their

dealers are required to maintain their outlets in accordance

with their specifications and employ well-trained sales staff.

Their agreements with their dealers usually have terms of five

years. These agreements are generally renewable for

successive terms of three years, by mutual agreement. The

agreements typically permit termination by either the dealer or

them with six months’ prior notice.

Enhancing dealer performance: Their central office in Delhi,

their regional offices and their area offices monitor and assist

their dealer network. They have nine regional offices, five area

offices and 187 sales and marketing personnel. They follow the

performance of their dealers and frequently suggest

improvements. In order to assist their dealers in enhancing

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their performance and capabilities, they have introduced a

concept of “Balanced Scorecard”. Using this tool, they seek to

measure the performance of a dealership in several areas of

operations, including sales, service, spares and accessories,

financial management and management systems. They reward

dealers who perform well on the “Balanced Scorecard” with a

cash payment at the end of the fiscal year. They believe that

the “Balanced Scorecard” serves as an effective incentive for

dealers to enhance their performance.

Dealer training: They have established standard operating

procedures, showroom ambience and service quality standards

for dealerships. They provide periodic training through their

training centres located at their manufacturing facility and at

Chennai, Kolkata, Guwahati and Pune. They have trained more

than 2,600 and 3,400 dealer sales personnel. Their subsidiary,

True Value Solutions Ltd., provides value-added services, such

as manpower recruitment and training, to their dealers.

AFTER-SALES SERVICE

Network

As on date there are 342 Maruti dealer workshops and 1,545

Maruti Authorised Service Stations, or MASSs, covering 898

cities in India. In addition, 24-hour mobile service is offered in

38 cities under the brand “Maruti On-road Service”. They

intend to extend this service to an additional 25 cities over the

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next three years. As a benchmark for dealers with respect to

service quality and infrastructure facilities, they have launched

service stations under the brand “Maruti Service Masters, or

MSMs, in three locations in India. They have service stations on

30 highways in India under the brand “Express Service

Stations”.

To promote sales of their spare parts and the availability of

high quality, reliable spare parts for their products, they sell

spares under the brand name “Maruti Genuine Parts”, or MGP.

These are distributed through their dealer network and through

authorised sellers of their spare parts, to whom they refer as

stockists.

Many of their MASSs are at remote locations where they do not

have dealers. In order to increase the penetration, in terms of

sales volumes, of their products in these remote areas, they

are exploring opportunities to integrate some of the MASSs

into the sales process in order to increase sales of their cars

and related products and services such as spares and

accessories, insurance and financing.

Genuine Accessories

They have also entered the business of marketing car

accessories under the brand name “Maruti Genuine

Accessories”, or MGA, through their dealership network. They

seek to provide customers with the opportunity to customize

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their vehicles with accessories such as music systems, security

systems, car-care products and utility products.

Warranty and Extended Warranty Program

They offer a two-year warranty on all their vehicles at the time

of sale. Their dealers are required to address any claim made

by a customer, in accordance with practices and procedures

prescribed by them, under the provisions of the warranty in

force at that time. The dealers subsequently claim the

warranty cost from them. They analyse warranty claims from

dealers and either claim the cost from vendors, in the case of

defective components, or bear the cost ourselves, in the case

of manufacturing defects.

They offer an extended paid-warranty program marketed under

the brand, “Forever Yours” for the third and fourth year after

purchase. They have entered into arrangements with insurance

companies to cover the costs of warranties offered under this

program. The extended warranty program is intended to

maintain the dealer’s contact with the customer and increase

the revenue generated from sale of spares, accessories and

automobile-related services. An effort is made during the

period of the extended warranty to encourage the customer to

exchange his existing Maruti car for a new Maruti car, or

upgrade to a new Maruti car.

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N EW BUSINESS INITIATIVES

As the largest manufacturer and leader in the small car segment,

they continually seek new ways to utilize their vast car parc, range

of products and extensive sales and service network to expand the

size of the passenger car market in India. They have recently

launched new initiatives to develop the market for automobile

insurance, automobile finance, leasing and fleet management, and

pre-owned cars. They aim to provide customers with a “one-stop

shop” for automobiles and automobile-related products and

services, and build on their wide customer base and extensive

sales and service network to make available to their customers a

wide range of Maruti-branded services at different stages of

ownership, which they refer to as the “360 degree customer

experience”.

Atithi Devo Bhava: One-stop shopInspired by the spirit of India. Atithi Devo Bhava, in Sanskirit,

means “a guest is like God”. It captures the Indian tradition of

honouring guests. It's also the inspiration for the welcome you’ll

receive at a Maruti Suzuki dealership, and the caring relationship

they share with those who drive their cars. At Maruti Suzuki, you

will find all your car related needs met under one roof. Whether it

is easy finance, insurance, fleet management. services, exchange

Maruti Suzuki is set to provide a single window solution for all your

car related needs.

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That's why they have Maruti True Value, the best place to buy

and sell reliable used cars. Maruti Finance an agglomeration of

the biggest finance companies in India brought together by

Maruti Suzuki to ensure that the dream car is within everyone's

reach. Similarly, Maruti Insurance brings together some of the

biggest names in the car insurance industry to provide

insurance solutions to every type of car consumer. Then,

finally, there is N2N, which offers fleet related solutions.

Key Industry Pain Points

Decreasing sales and market share - The long-term battle for market share continues to intensify. In the mature automotive industry, where business cycles drive sales fluctuations, market share is critical to survival. Consumers are less brand-loyal than in the past, and every market segment has an increasing number of vehicle choices. To increase sales and gain ground in the market share battle, companies must improve their ability both to acquire first-time customers and to develop customer loyalty to their current brands. To achieve these related objectives, companies must set an aggressive goal -deliver the best customer experience in the automotive industry.

Difficult dealer relationships and a lack of dealer collaboration - As the consumer's primary touch point ,the dealer network is a critical component of customer-facing operations. Therefore, the integration of the dealer network is absolutely essential to improving the quality of the customer experience. Only with an infrastructure that enables the effective flow of information to and from dealers can companies create a complete view of their customers.

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Car companies must take the initiative in understanding the customer's perspective throughout the buying cycle.

Inefficient demand chain planning and high associated IT cost - Cost reduction is an ongoing competitive requirement. Just as supply chain management must be supported by a sophisticated information infrastructure, effective demand chain management also requires the right supporting infrastructure, enabling car companies to fully leverage each customer relationship through exceptional customer service, efficient lead generation and management, and effective promotions and campaigns. In addition, global automotive enterprises operate a wide variety of IT systems in their various business units and functional groups. Rationalizing these systems offers significant cost savings.

Lack of effective information sharing - Car companies must integrate global operations in order to achieve the benefits of consolidation -cost reduction, effective communication, and true integration of core competencies. In addition, internal alignment between business units and functional groups is required to create a unified view of consumers, products, and services. Currently, each business unit, functional group, and brand operates through independent systems, programs, and touch points. As a result, there is limited synergy across the ecosystem, leading to significant inefficiencies, lack of coordination, and most important, an inability to maximize "share of wallet "from every customer through well-targeted marketing and cross-selling. Synergy between traditionally independent business units such as captive finance companies and between functional groups such as sales, service, and marketing is more critical now than ever before. Only by

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sharing customer information can customer lifetime value be maximized among different groups.

Complex data governance requirements - Global automotive enterprises have large, complex information technology ecosystems. While customer information must be shared within this ecosystem in order to fully maximize global operations, it must also be protected. Proper management of customer information requires a sophisticated capability to manage a variety of access rules and to accommodate legal restrictions that can change very quickly. The trust required for successful collaboration between groups in the automotive enterprise must be built by demonstrating that customer information can be shared while observing these complex requirements.

Difficulty managing employee relationships - In today 's fast-paced business environment, automotive companies need to ensure that their most valuable asset -their employees -have immediate access to the critical information, services, and applications required to be productive. Organizations must enable employees to make better decisions, work collaboratively, enhance customer relationships, and maximize productive time. Global automotive enterprises must be able to enact and enforce consistent policies across business units, instill a common corporate culture across a geographically dispersed and diverse workforce, equip employees with effective search tools to access corporate knowledge bases, and provide employees with the training necessary to service customers in a volatile and demanding market.

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How well do you interact with your customers?

Maruti Udyog Limited: According to the officials of MUL, their overall strength lies

in building an organization that is sharply focused on the voice of the customer.

Maruti's consistent performance over the past several years has resulted in a steady

increase in the percentage of its customers who say they intend to remain loyal to

the brand. n order to be closer to the customers, it is essential that we should have

multiple avenues of one-to-one interaction with our customers. As a major step in

this direction they have started Call Center service with toll-free number for the

people of National Capital Region in year 2000. This service, named Anytime

Maruti, is now available nation-wide. Customers in over 700 cities/towns across

India can contact them any time during the day and all days of the week. The toll-

free service is 1800 1800 180, it is accessible from any fixed-line or mobile phone of

BSNL/MTNL network across the nation. The Anytime Maruti Call-center can also

be accessed using telephones on other networks by dialing 09811801515 (not toll-

free). The objective of this service is to ensure that customers have quick and easy

access to all information on their models, prices, dealers, value added services,

finance options, and the locations of our numerous service stations. Anytime Maruti

helps customers to learn more about their Maruti Cars and also about other services

offered by Maruti. For prospective buyers, Anytime Maruti can help them deciding

amongst various Maruti Models and benefits of buying from Maruti.

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ANALYSIS

Corporates, don't talk about exceeding customer satisfaction - that's passes - the time has come to `dazzle the customer'. But to do that, first you must get customer relationship management (CRM) in place. In the context of India, this is very crucial as the recent World Economic Forum Report on Global Competitiveness has ranked India 43 out of 49 nations surveyed, on `customer orientation'.

Managing customer relationships is not only complex but is also multi-faceted and thus calls for an inter-disciplinary approach. Particularly, as in the New Economy, the customer has become very demanding and the emphasis needs to be on being consumer-centric. Technology solutions as applied to various front-end functions could aid in building a viable link between the organisations and customers irrespective of geographical separation. This has to be backed with appropriate systems and processes to mine the right type of data by the right function in an organisation.

Besides technology, systems and processes, another important link is human resource, If CRM is the key, HR would be the nerve centre for any CRM activity.

At Maruti Udyog Ltd the first step for a company to enhance value through CRM was to identify its target base. At Maruti, the categories which emerged were:

* Two-wheeler owners;

* Customers taken away from the competition;

* Services sector.

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After identifying the target, the next stage was to build on customer relationships. Maruti, therefore, began evaluating the current database of consumers to identify those who wanted Maruti service or better still, wanted to upgrade up the value chain in Maruti products. Third, it began working in tandem with the oil industry to get data feedback on two-wheeler consumers-and identify those ready to move into four-wheeler purchases. Ultimately, CRM is all about value enhancement for the organisation.

Currently in use by 500 sales and service personnel, the Siebel CRM solution is expected to be deployed to Tata Motors' entire network of 250 dealer organisations in India by the end of 2005, with more than 1,600 locations and 10,000 sales and service executives expected to use Siebel Automotive.

Within the first year of implementing the Siebel's solutions, they have seen improvements in customer satisfaction, revenue and operating cost reductions through productivity improvements, and these benefits are expected to increase further over time. This is helping them to become truly customer-centric, since they can draw upon real-time, centralised customer and vehicle data and respond better to their customer and dealer needs.

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CONCLUSION

The price of a car is just one-third of what it cost you over its

lifetime. Running and maintaining it make up the other two-thirds.

Take into account resale value and its real cost becomes clear.

Maruti Suzuki stands for value as much as it stands for

performance. In spite of rising input costs, we try our best to keep

prices down. Their running costs and resale values are unbeatable

too. Nothing matches the delight their cars deliver. In the JD Power

CSI study 2005, 85% of Maruti Suzuki owners stated that they

would definitely recommend the car they drive to someone else.

Infact, you don’t buy a Maruti Suzuki. You invest in it.

After the rash of new cars launches the past two years, the relative

lull in the auto industry is showing up in the customer satisfaction

indices. According to the 2005 four-wheeler Total Customer

Satisfaction (TCS) study conducted by the specialist division of TNS

Automotive, the automobile ownership experience or customer

ownership experience has declined in all areas compared to 2004.

The study is one of the largest syndicated automotive studies in

India, representing the responses of more than 7,000 new car

buyers. The comprehensive study covers over 50 models with

customer evaluations taken in the key areas of sales satisfaction,

product quality, vehicle performance and design, after-sales

service, brand image, and cost-of-ownership. The TCS index score

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provides a measure of satisfaction and loyalty a given model

enjoys with its customers. According to TNS Automotive, the

decline is predominantly for older, small and entry mid-size car

models. The ageing of these models seems to be posing a stiffer

challenge for manufacturers to sustain past performance levels at

a time when customer expectations are rising sharply.

The study reveals a significant increase in the importance of sales

satisfaction, product quality (both performance and design) and

brand image since 2003, indicating rising customer expectations

over the years. This year's study shows the Maruti Suzuki Swift

and the Toyota Innova as the winners, with the two vehicles

achieving segment-best ratings by performing well in areas of

greater relevance, particularly product and brand image. Sales

satisfaction is weak in both these models, largely because of the

longer waiting time for new deliveries.

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TNS Automotive's TCS Study has, since its inception in 2002,

surveyed over 25,000 car buyers and has built a sizeable sample

base. Some of the key findings, indicators and inferences from the

2005 study are:

Progressive reduction in car ownership cycle-time from an average

of 61 months in 2002 to 53 months in 2005: This shortened cycle-

time is bringing these owners for repeat purchases sooner and will,

therefore, further fuel the growth of the four-wheeler market. This

trend is already visible in the growing additional/replacement

purchases. Growth in additional (multi-car households) and

replacement purchases up from 51 per cent in 2002 to 65 per cent

in 2005: This will impact the volume growth in higher-end

segments as the current car owners show upward mobility.

Increasing budget for future purchases: Future intenders with a

budget of Rs 6 lakh plus have increased from 44 per cent in 2002

to 58 per cent in 2005. While first-time buyers are declining as a

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composition of total volumes, the figure in absolute terms is high,

fuelled by the up-gradation by two-wheeler owners. The study also

throws up the question as to whether it is also possible that the

first-time car buyer who is generally a two-wheeler owner, is

getting more fuel efficiency conscious and tending towards

postponing the car purchase decision due to the high cost of fuel.

Of course a shift in composition is also to be expected with the

upper premium compact and mid-size segments projected to grow

at a much faster rate than rest of the industry. The TCS study was

conducted from August through October across 21 cities. Small

sample models have not been featured in the charts.

Maruti Udyog Ltd 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.

Good Technology

Uniform Pricing

Good Strength

More Coverage Area

Frequent /Regular Product Launch

Market Leader (with 47% share)

Oriented Driven Company

More Product Offering

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Healthy Annual Report

Brand Image

Maximum Dealership as compared to other brands

Good Sale Service

Spare parts are cheap as compared to any other brand

Information Needed

SALES PERFORMANCE FOR THE LAST 2YEARS

(PRODUCT WISE) IN UNITS AND IN RUPEES

Number of Employees, different section wise with due classification Like Skilled, Semi-skilled, Unskilled workers, Officers, managers etc

Organizational Chart with Explanation

Annual Reports (last 5 years)

HISTORICAL GROUND OF THE COMPANY

FUTURE PLANTS OF THE COMPANY

Product, Literature, photograph of the products, technical details etc

List of Competitors

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Future Plans, Export Strategy, Market Share of the Comparative Area of the operation etc

You must include following in Conceptual discussion Consumer Behaviour Innovators Early Adopters Late Adopters Followers Laggards Jack

GUIDELINES

Certificate from Internal GuideCertificate from CompanyPrefaceAcknowledgement

CHAPTER—1(Introduction)

The purpose of introduction is to introduce the research project to

the readers. It should contain a clear statement of the objectives of

research i.e., enough background should be given to make clear to

the reader why the problem was considered worth investigating. A

brief summary of other relevant research may also be stated so

that the present study can be seen in that context. The hypothesis

of study, if any and the definitions of the major concepts employed

in the study should be explicitly stated in the introduction of the

report. Almost equivalent to Executive Summary

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Overview of Industry as a whole

Profile of the Organisation

Problems of the Organisation

Competition Information

SWOT analysis of the organization

Any Article related to (Target Marketing)

CHAPTER—2 Research Methodologies

Mainly this portion covers

OBJECTIVES

SCOPE OF THE STUDY

MANAGERIAL USEFULNESS OF STUDY

METHODOLOGY

CHAPTER—3 (CONCEPTUAL DISCUSSION – THEORETICAL

BACKDROP AND LITERATURE REVIEW)

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CHAPTER—4 (DATA ANALYSIS)

CHAPTER—5 (CONCLUSONS AND SUGGESTIONS)

APPENDICESHere sample Questionnaire, Analytical Master Charts and any other

relevant documents may be included

Bibliography

Reference Books, Journals, Newspaper, Web Sites, Reports, etc

are to be listed, out here

Like

Books

Kotler Philips, Marketing Management Analysis, Planning

Implementation & Control Edition 1998. Prentice hall of India Ltd.

New Delhi

Magazines Jourals & Newapaper

Name of the articles, Business Today: 15-22May 2000

Name of the articles, The times of India . Mumbai: 21st May 2000

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