Maruti suzuki marketing strategies by Aviroop Banik,Rizvi Institute of Management Studies and Research(RIMSR),Bandra(W),Mumbai.
Aviroop Banik Rizvi Institute of Management Studies and Research (RIMSR), Bandra(W), Mumbai
According to the latest data available from Society of Indian Automobile Manufacturers (SIAM), the overall production data for April-August 2010 shows production growth of 32.38 percent with industry producing 7,063,063 vehicles.
Conversion Rate Rs.40 = 1USD Conversion Rate Rs.40 = 1USD GROSS TUNROVER A Source-SIAM GROSS TUNROVER OF THE AUTOMOBILE INDUSTRY IN INDIAA Year (IN USD MILLION) 2004-05 20,896 2005-06 27,011 2006-07 34,285 2007-08 36,612 2008-09 38,238 Conversion Rate Rs.40 = 1USD
Price Strategy The price of the Maruti car is between Rs. 210000 to Rs. 1500000. Maruti – 800 is the lowest price car of this company. Alto, Omni, Wagon R, are also the low price car of the company, Zen & Esteem are the mid price car of the company. But Grand Vitara is the high price model of the company. The price of car is decided according to its product variety, quality, design etc. Maruti caters to all segment and has a product offering at all price points. It has a car priced at Rs.1,87,000.00 which is the lowest offer on road. Maruti gets 70% business from repeat buyers who earlier had owned a Maruti car. Their pricing strategy is to provide an option to every customer looking for up gradation in his car.
600 New car sales outlets covering 393 cities. 265 ‘Maruti True Value’ outlets spread across 166 cities. 2628 Maruti Authorized Service Stations, covering 1220 cities. Tie up with Adani group for exporting 200,000 units through Mnudra port Gujarat Place strategy
Advertising ¨ TV Ads ¨ Print Ads ¨ Radio Ads “ Ghar Aa Gaya Hindustan” “ India Comes Home in Maruti Suzuki.” Information Advertising, alternative Advertising Options BTL - Sponsorships TV shows - India’s Got talent Place Advertising – Bill boards Sales Promotions Product warranties Premiums (gifts) Trade shows 2,628The number of workshops that provide customers with maintenance support in 1220 cities. Promotion Strategy
<ul><li>Threat of new Entrants : Increasing </li></ul><ul><li>Most of the global players are attracted toward Indian market. </li></ul><ul><li>Welcoming government policies. </li></ul><ul><li>Power of supplier : Low </li></ul><ul><li>Large number of automobile component suppliers. </li></ul><ul><li>Switching cost of supplier is high. </li></ul>Porter’s Five Forces
<ul><li>Power of buyer : Increasing </li></ul><ul><li>Increasing awareness among the consumer. </li></ul><ul><li>High expectation. </li></ul><ul><li>Buyers get incentives in the form of cost discounts and better after sales service </li></ul><ul><li>Threat of substitute : Low to medium </li></ul><ul><li>Consumer could shift to hybrid and electric cars. </li></ul><ul><li>Industry Rivalry : High </li></ul><ul><li>New player are entering in market. </li></ul><ul><li>Competition in selected segments are very high e.g. small and mid car segment. </li></ul>
Three Generic Strategies Differentiation Overall cost leadership Focus Strategic Advantage Low cost position Uniqueness perceived by customer Industry wide Particular segment
<ul><li>To cope with the 5 competitive forces--- there are 3 generic strategies </li></ul><ul><ul><ul><li>1. Overall cost leadership </li></ul></ul></ul><ul><ul><ul><li>2. Differentiation </li></ul></ul></ul><ul><ul><ul><li>3. Focus </li></ul></ul></ul>
<ul><li>To achieve cost leadership --- upfront capital investment in state-of-the –art equipment/plant is required. </li></ul><ul><li>e.g --- Maruti Suzuki has two state-of-the-art manufacturing facilities in India. The first facility is at Gurgaon spread over 300 acres and the other facility is at Manesar, spread over 600 acres in North India. Maruti Suzuki's facility in Gurgaon houses three fully integrated plants. Together the three plant have an installed capacity of around 700,000 units. K Series Plant </li></ul><ul><li> </li></ul><ul><li>The Gurgaon facilities also houses the ‘K’ Engine Plant. Commissioned in 2008, the K-series engine plant has an installed capacity of 500,000 units. </li></ul><ul><li>Manesar Facility </li></ul><ul><li>At present the Manesar plant rolls out World Strategic Models Swift, A-star, SX4 and swift DZire. The plant at Manesar is the company's fourth car assembly plant and has a capacity of 300,000 cars per year. </li></ul>
<ul><li>Differentiation - creating something that is perceived industry wide as unique. </li></ul><ul><li>Differentiation can take many forms - </li></ul><ul><ul><ul><li>Brand name- Maruti Suzuki </li></ul></ul></ul><ul><ul><ul><li>Technology- The highly fuel efficient, technologically advanced K series engines have been very well appreciated by our customers for their performance. </li></ul></ul></ul><ul><ul><ul><li>Service- Best Service/highest no. of service centers </li></ul></ul></ul><ul><ul><ul><li>Dealer Network – Highest </li></ul></ul></ul><ul><ul><ul><li>Quality- Value for money </li></ul></ul></ul><ul><li>Performance </li></ul><ul><li>Mileage </li></ul><ul><li>Best match with Indian road conditions </li></ul><ul><li>Less Maintenance cost </li></ul><ul><li>Resale price </li></ul>
Principles of Offensive Marketing Warfare Find a weakness in the leader’s strength and attack at that point. 1.TATA Motors is the 2 nd largest car manufacturing company in India. Seeing Maruti not in the 1 lac price zone, fill the gap by launching world’s first cheapest car TATA NANO. CREATING A NEW CHEAPEST CAR SEGMENT 2.Hyundai Motor India has introduced Next Gen i10 - the all new version of its i10 small car.Next Gen i10 gives Indian consumers the choice of two petrol engines & boasts of a mileage of 20.36 km per litre.
Mercedes-Benz flanked GM (Cadillac cars ) at the high end. Volkswagen's Beetle flanked GM’s big cars. Principles of Flanking To launch a true flanking attack you must be the first to occupy the segment. Otherwise it’s just an offensive attack against a defended position. NISSAN launched MICRA with push button start option in India.
Principles of Guerilla Marketing Warfare Find a segment of the market small enough to defend. No matter how successful you become , never act like a leader. Eg.. Rolls Royce(RR), Reva Electric car
REPOSITIONING OF MARUTI PRODUCTS Omni has been given a major facelift in terms of interiors and exteriors two months back. A new variant called Omni Cargo, which has been positioned as a vehicle for transporting cargo and meant for small traders. It has received a very good response from market. A variant with LPG is receiving a very good response from customers who look for low cost of running. Baleno was launched in 1999 at 7.2 lacs. In 2002 they slashed prices to 6.4 lacs. In 2003 they launched a lower variant as Baleno LXi at 5.46 lacs. This was to reduce the price and attract customers. Wagon-R was perceived as dull boxy car when it was launched. This made it a big failure on launch. Then further modifications in engine to increase performance and a facelift in the form of sporty looking grills on the roof. Now it’s of the most successful models in Maruti Zen has been modified four times till date. They had come up with a limited period variant called Zen Classic. That was limited period offer to boost short term sales.