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TERM PAPER

OF

PRODUCT AND BRAND MANAGEMENT

SUBMITTED TO: -

Rajeev Gupta

Lecturer Lsb

SUBMITTED BY:-

Waseem Afzal Naik

Reg. no. 10907837

Section R1904 B57

Advertising & Sales Promotion Of Maruti

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Table Of Content

Advertising Budget- ................................................................................................... 10

Executive Summary

The Automobile market has become competitive and the consumer

purchasing patterns are highly volatile and hence effective consumer

promotions have a much greater significance in marketers media planning.

In order to tackle the tough competition from its competitors most of the

brands need to formulate effective promotions and thereby in current

scenario companies working with expert advertising agency for their brand

promotions is a must

Moreover there is a constant need of enhancing the advertising

campaign throughout, it should create interest in the minds of consumer so

that every time they look for any car to buy, they look for our brand.

Automobile industry has gone a long way in formulating and

implementing the promotional strategies. Promotion strategies formulated by

LintasMedia Group have been diversified to produce good results. All the

promotion type advertising, sales promotion, personal selling, online

marketing, Public Relations and direct marketing are being used

effectively to increase the sales as well as market share. Sales promotion is

the area where most of the automobile companies are giving more

importance because of its contribution towards the total sales. Effective and

http://en.wikipedia.org/wiki/File:Maruti_Old_Logo.JPG

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attractive promotional schemes are to be formulated for successful

promotion of brand and thereby conveying the companys vision & mission.

With the increasing importance of web media and news channels, print

media is finding itself at a bit lower position however it doesnt mean that it

has lost its importance but still people are taking more interest in web media

as it is now easily accessible and available at quite lower price than print

media. But still it has to go a long way to outcast print media as print media

has itself got a lot of importance.

Although Maruti is doing well in terms of advertising but every where

there is a possibility that its brand is backed by strong commitments like

widest network of service stations, Power K series engines.

Introduction

A Brief about Maruti

Maruti Udyog - a joint-venture between Suzuki of Japan (26% stake)

and the Indian government in 1981

10 basic models and more than 50 variants

3 out of top five selling car model in India are Maruti Product (M 800,

Zen, Alto)

Annual production capacity 5, 00,000 with 47.30% market share.

SWOT Analysis of Maruti

STRENGTHS WEAKNESS

Established distribution and after-salesnetworks

Lack of experience withforeign market

Understanding of the Indian Market and liaisonwith govt.

Inexperience with foreignworkforce

Ability to design products with differentiationfeatures

Heavy Import tariffs

Brand Image & Experience & Know- how intechnology

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OPPURTUNITIES THREATS

Increased purchasing power of Indianmiddleclass category

Emerging Competition

Government Subsidies & Tax Benefits Increasing cost of inputs

Foreign Collaboration Rapid change in customerpreference

Integrated Marketing Tools Used By MARUTI

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Advertising Agency

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Agency Name- Lintas Media Group

Website-http://www.lintasmedia.in

Offices

Some of its major clients-

Services by the Agency -

Lintas Media Group offer wide range of services and they are:

Scheduling the advertisement timings

Giving percentage of advertisement to particular channels

http://www.lintasmedia.in/http://www.lintasmedia.in/

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Setting the target budget for their clients

Maintaining companies public relations strategy

Building Brand image among target customers

Growing brand awareness of company in market

Internet brand promotions as well

CONSUMERS

The consumer behaviour becomes a mystery: segments and diverse

expectations make forecasts almost impossible.

Legislation, global changes, technology trends and uncertainty on the

customer side redefine automotive landscape

Emerging marketing buyers generate ultra-low cost (ULCCs) segment

Senior citizens play increasingly important role in mature markets

My Generation ask for more tailored products even at higher price.

New Mobility Concepts non buyers, instead car sharing and new

rental formats.

As a fresh approach, Maruti has its own campaign running for delighting

customers: Engineering 2020 and the attributes are Styling & Design,

Technology - OEM Strategy, Our offering, and facing the key challenges.

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SOURCE

Most of the messages for Maruti are delivered by the man himself Mr Amal

Ganguli (Director). There are very few celebrities who actually indulge inendorsement for Maruti, as they believe in actual customer experience and

count upon their service.

Mr Shinzo Nakanishi, Managing Director and CEO, Maruti Suzuki delivers

speech at occasions such as new years and silver jubilee projecting different

brands of the company.

Actor R. Madhavan has also been appointed as the brand face for its popular

hatchback Wagon R. Madhavan was considered a right fit after analysing his

future ventures/projects and the brand objectives of the product.

MESSAGE

Maruti Suzuki adopts regional approach to transfer their message. They focus

more on regional communication strategy by having local language dialogues

to reach out to the masses. This is the strategy to make the brand more

relatable to its current and prospective users.

Some of the quotes showing Marutis messages are

Usually campaigns focus on offerings, but we now had to talk about theexperience. The car in this context is not just about transporting people from

place A to B. It had to stress an emotional connect. And it's this emotional

connect that is totally unique to Maruti."

- MayankPareek, Executive Officer (Marketing and Sales), Maruti

Suzuki India Limited, in June 2008.

"After investing Rs 90 billion in manufacturing facilities, we are now looking

to invest in marketing infrastructure and brand-building initiatives. These will

enhance customer experience with Maruti Suzuki."

- Shinzo Nakanishi, MD and CEO, Maruti Suzuki India Limited, in April

2008.

CHANNEL

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2008-09 3.5 Cr

2009-10 5.74 Cr

CREATIVITY

The creative process of Maruti Suzuki includes the various strategies adopted

by the company as in the PRICING Strategy

Caters to all segments and has a product offering at all price points.

Their pricing strategy is to provide an option to every customer looking

for up gradation in his car.

Creating different REVENUE STREAMS

Maruti Finance

Maruti Insurance

Maruti Driving Schools

CORPORATE STRATEGIES

Maintaining Status quo due to limited environmental opportunities for

gaining competitive advantage.

Few employees will have opportunities for advancement.

Critical that management identify key employees and develop specific

HR retention strategies to keep them

REPOSITIONING of products

Whenever Marutis brand grew old or its sales started dipping , it made the

following efforts in the same field :

Omni interiors & exteriors

Versa slashed prices by decreasing engine power

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Esteem new look to boost sales

Baleno price slash from 1999 (7.2lacs) to 2003 (5.46)

Wagon R modifications in engine and sporty look

Zen modified for times and special additions

Maruti 800 Introduced modified accessories

DIFFERENTIATION

In order to demand a premier price from consumers by attempting to

distinguish organizational products or services from other competitors.

Organizational offers employees incentives and compensation for

creativity.

HR Strategy focuses on external hiring of unique individuals, and on

retaining creative employees.

SELECTIVE TARGET APPROACH

Promotion for urban people through mall, auto mall buying, clubs,megadealers

Promotion for rural people through car fair easy finance scheme for

PanchayatiMEDIA STRATEGY

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Advertising

TV Ads

Print Ads

Radio Ads

Advertising Strategy

Persuasion Advertising

Ghar Aa Gaya Hindustan

India Comes Home in Maruti Suzuki.

Papa Ki Karaa petrol khatam hi nahiHota

Information Advertising

Alternative Advertising Options

BTL - Sponsorships

TV shows - Indias Got talent

Place Advertising Bill boards

Dates & Action

End of Apr-May-June End of September

End of December End of March

April - Innovations forWagonR Blue Eyedcampainglaunch.May-Present AajTak AnchorActivation

PresentSonaJeeto -Contest

present MovieMasala Award-event & Budget2011 pitch

IPL contest

Present post evl of Blueeyed campaing

Present post evland finsing ofAnchorActivations

Present Sonajeetosuccess and pitchfor MM awards,Pitch for BudgetSch

MM awards postevent and pitch forIPL contest

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Chart - % of advertisements on different channels by Maruti

(Source Mrs. Manisha Motiramani Branding & Sales Promotion Manager

AajTak)

Promotional Strategy-

Maruti Driving School

Adoption of state running

CSR programs

Sponsorship of Rode race e.g. Maruti Raid De Himalaya

Sponsorship of other sports like golf and polo

Also Nakanishi took over as MD from Jagdish Khattar last year. He has

strategic plans designed for brand promotions of all Maruti brands in the

country. Maruti Suzuki has decided to open a company owned brand stores in

major cities of India.

The company plans to showcase the entire product range under one roof.

These showrooms will not be actually retail outlets but brand promotioncounters that will familiarize customers with the models and features of

various cars.

This idea of opening brand showrooms is in line with companys plans to

invest in marketing infrastructure and brand building initiatives that aim at

improvising customer experience with Maruti Suzuki.

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Customers can test drive the cars, familiarize themselves with various

features and then purchase them from dealer outlets.

Increase in sales communication materials of

Maruti due to various communication materials.

Maruti Suzuki India Ltd. on Saturday posted a 5% rise in fiscal second-quarter

net profit after higher royalty payments to parent Suzuki Motor Corp. and a

rise in raw-material costs drained most of its gains from record-high domestic

car sales.

Sales at the company, which controls nearly half of India's car market, havebenefited from a fast-expanding local economy that is driving vehicle

demand.

Stiff competition, however, prevented Maruti from raising prices to an extent

to fully offset high steel and rubber costs.

Net profit in the three months ended Sept. 30 rose to 5.98 billion rupees

($134.9 million) from 5.7 billion rupees a year earlier. Sales rose 27% to

89.37 billion rupees. Maruti sold 277,936 vehicles in India during the most

recent quarter, up 33% from a year earlier.

Maruti's sales in the latest quarter were aided by the Alto K10 small car,

introduced in August, and a new version of the Wagon-R small car, launched

in April. Vehicle sales also benefited from three launches during the past

fiscal year: the Ritz and Estilo hatchbacks and the Eeco multipurpose van.

"Growth was driven by good consumer demand across segments and across

cities," Shinzo Nakanishi, managing director and chief executive, said at a

news conference. "We expect demand to more or less continues in the

second half of this fiscal year."

Increase in growth was also because of advertisements and various

campaigns and also due to various promotional tools used by the company.

http://online.wsj.com/public/quotes/main.html?type=djn&symbol=7269.TO:DJNhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=7269.TO:DJN

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Exports fell 4% to 35,718 vehicles, mainly because of lower demand in

Europe. "Going forward, we would focus more on non-European markets for

exports to offset the demand decline there," Mr. Nakanishi said.

The company, 54.21%-owned by Suzuki, is investing close to 37 billion

rupees in setting up two new plants at Manesar in the northern state ofHaryana to raise total vehicle production to 1.75 million units a year by the

fiscal year ending March 31, 2012 or early in the 2012-13 fiscal year. It

currently has an installed capacity to make 1.2 million cars at its two

factories: one each in Manesar and Gurgaon, also in Haryana.

Maruti has taken steps at its existing plants to improve productivity. "The

demand for new cars has been rising and we have raised output at our

factories to 110,000 a month, or 1.3 million a year to meet this demand," Mr.

Nakanishi said.

Mayank Pareek, managing executive officer for marketing and sales, said

Maruti expects sales in October to continue rising at a record pace. "We

expect to sell more than 100,000 vehicles in the local market for the first

time in October," he said.

The company launched new models or variants of existing vehicles to

compete with small cars from Hyundai Motor Co. of South Korea and General

Motors Co. and Ford Motor Co. of the U.S.

Maruti also started to use new-generation K-Series engines on most of its

vehicles. The Suzuki-developed engines, which are more fuel-efficient,

command higher royalty payments then those used previously.

The new engines drove up Maruti's royalty payments to 4.72 billion rupees

from 2.58 billion rupees.

The company spent 69.39 billion rupees to buy steel, aluminium and other

raw materials in the quarter, up 32% from a year earlier.

Maruti's earnings margin before interest, taxes, depreciation and

amortization narrowed to 10.7% from 13%.

Mr. Nakanishi said the company expects rising input costs and currency

fluctuations to put pressure on its profit margin in the second half.

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Maruti, however, has no immediate plans to raise car prices, . "its first focus

is to absorb as much of the input cost increases internally and adopt

productivity-enhancement measures to protect margins."

Mr. Nakanishi said Suzuki and Volkswagen AG of Germany are expected to

announce their joint projects by early next year. India will be the focal pointfor these proposed joint projects by the two auto makers.

Volkswagen bought a 19.9% stake in Suzuki for $2.5 billion in December.

SOCIAL AND ETHICAL ISSUES

In the past decades, increasing amount of attention has been devoted to

culturally and ethically sensitive approach in business and marketing.

Marketing managers have become ethically more sensitive, and they are

largely convinced that customers and the public expect them to act in a

morally acceptable way.

Thus it revolves around one fundamental quest to position brands in anintegrated way addressing ethical and cross-cultural issues. The basic

problem premise was to empirically explore the strategy Maruti would use

in positioning their brand in an Ethical way. The methodology is that five

basic elements of brand positioning are identified (Brand Identity, Brand

Image, Brand Personality, Brand Awareness, and Brand Communication)and

these elements of brand positioning and their consisting variables are

defined and blended with ethical & cross-cultural issues.

After generating a statistically significant framework a predictive model is

developed. Here the core idea is that Maruti has used ethics and culturalvariables as product differentiators and has created a strategic advantage for

the brand, therefore restating the importance of ethics as the basic variable

of business and delivery of promised benefit by the brand to the consumer.

Maruti's Strategy suggests that the brand can use various implicit and

sublime variables of culture and can create a differential positioning.

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What was the effect on the sales of Maruti Cars after the verypopular campaign, "Kitna Deti Hai?"?

The Indian automobile industry is one of the fastest growing industries in the

world. 25 % of the population of this country belongs to the middle-income

group. The highest selling cars are the middle-range ones, purchased mostly

by the middle class section; out the four highest-selling cars in India, two areproduced by Maruti Suzuki, making it the highest- selling car brand in the

middle range car market. Yet, this automobile giant still feels the need to

engage in a large-scale advertising campaign as though its sales werent

high enough anyway. Maybe, it is because the consumers have become so

lazy, that they need advertisements to give them the information they need

in order to make the best purchase; whichever seller has a better platter of

information to give out, wins. In the end, the sales figures of Maruti Suzuki

show that it continues to exert a pull on prospective as well as existing

consumers this time, through this simple yet impressive advertisement.

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CONCLUSION & ANALYSIS

In order to conclude Maruti is running at a very high pace matching with all

the upcoming technologies. It has more than 5 million satisfied customers in

India and is currently having a share of around 54% in the domestic

passenger car market where major international automobile manufacturers

are present.

Moreover, Maruti having a network of 391 sales outlets across 230 cities all

over India, the service network covers 1,113 towns and cities, bolstered by

2,142 authorized service outlets. The companys change in strategy and

emphasis on developing effective marketing communications began to yield

results. Wagon R an and Zen were ranked first and third in the premium

compact segment.

As the competition is very intense, Maruti should also start laying more focus

on making the integrated marketing communication more effective. Some

stress and strategies should also be given on internet marketing as this is the

need of the hour.

Additionally, the company should start working on direct selling and

promotion by sending emails and letters to both existing clients as well as

other prospective customers to increase the demand. It is also ranked

highest in customer satisfaction with after sales-service, it should try tomaintain this USP throughout because of which Marutis consistent

performance in the study 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.

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References And bibliography .

1. http://www.wipo.int/ip-outreach/en/tools/guides/tools/

2. http://green.autoblog.com/2010/08/18/indias-largest-automaker-maruti-

suzuki-now-offers-cng-option/

3. Donald R Lehman