Maruti launched the Versa MPV in 2001 but it failed to gain significant market share. It was positioned as a luxury family vehicle but was overpriced at 5-6 lakhs, competing with sedans. Low mileage of 11 kmpl and lack of a diesel option also hindered sales. Though price cuts in 2003-04 boosted sales temporarily, Versa was eclipsed by the success of the lower priced Wagon R. Recommendations included lower initial pricing, exterior and feature updates during relaunch, focusing on appearance to compete with rivals, and introducing a diesel variant for better economic value. However, Versa's large MPV body-type and high price positioning remained barriers to widespread acceptance

1. Report on
Marketing Strategy of
Maruti Versa

2. We have analysed Auto sector in India. The product segment is Multi Purpose Vehicle
(MPV). Then analysis of consumer behaviour is done using segmentation and decision
making parameters. We have observed major competing brands with their target and
positioning. Finally we have identified a product with decreasing market share (Maruti
Suzuki Versa) and provided recommendations which could have saved the brand.
Auto Sector in India:
Introduction
The Indian auto industry is one of the largest in the world with an annual production of
21.48 million vehicles in FY 2013-14. The automobile industry accounts for 22 per cent of
the country's manufacturing gross domestic product (GDP). An expanding middle class, a
young population, and an increasing interest of the companies in exploring the rural
markets have made the two wheelers segment (with 80 per cent market share) the leader of
the Indian automobile market. The overall passenger vehicle segment has 14 per cent
market share.
India is also a substantial auto exporter, with solid export growth expectations for the near
future. Various initiatives by the Government of India and the major automobile players in
the Indian market is expected to make India a leader in the Two Wheeler and Four Wheeler
market in the world by 2020.
Context:
Economic:
 Increase in Purchase Power Parity led to the increase in market share of compact
cars.
 EXIM policy has helped car manufacturers to boost exports.
 Major global players like Audi, BMW, Hyundai etc have set up their manufacturing
units in India leading to car price reduction.

3.  Auto industry registered a growth rate of 65.35 % in 2002-03 and 16-18% in 2011-12.
Social:
 Indian customers are discerning and well informed. They are price sensitive and put
a lot of emphasis on value for money.
 Preference for fuel efficient cars with low running costs.
Technological:
 Emphasis on R&D by the govt. through initiatives like NATRIP (National Automotive
Testing and R&D Infrastructure Projects)
 Entry of global companies into Indian market helped to develop new technologies
along with new product process.
Consumer Behaviour:
 Decision Making Parameters:
1. Social Parameters: This includes road infrastructure, life style, competition in
market
2. Economical Parameters: Monthly income, disposable income, loan interest,
easy loan availability, fuel price.
3. Political Parameters: Government budget planning, taxation and duty
structure.
4. Product & Technology Parameters: Exterior/interior of car, performance,
driving comfort,
5. Demographic Parameters: Source of income, gender, education, occupation,
age
6. Geographic Parameters: Region, Size/Area, Population density, off-road/on-
road.
7. Psychographic Parameters: Activities, interest, opinions, attitudes

4.  Segmentation by utility:
1. Family Car Segment: Small Families/Large Families
2. Premium Car Segment
3. Commercial Usage: e.g. : Car Rentals, Cab Service providers, Ambulances and
Service vans.
 In 2001, Indian consumers were unaware about the segment MPV – Multi Purpose
Vehicle.
Major Competing Brands (in 2001, Price segment: C, 5 L to 10 L):
 Maruti Versa, Target: Middle class and upper-middle class, Positioned as : A MUV for
the entire family travelling together
 Ford Ikon, Target: Young business executives, Positioned as : Positioned as a car
designed for customers by improved fuel efficiency and good in city driving
experience
 Fiat Palio, Target: Positioned to capture the segment graduating to Hatchback,
Positioned as : A car with a new design and high performance
 Tata Indigo, Target: Targeted towards the families belonging to upper middle class
segment, Positioned as : Positioned as one of the most reliable sedan car delivering
competitive fuel efficiency
 Hyundai Getz, Target: Young urban upper-middle income group, Positioned as : A
global small car with sporty looks
 Maruti Wagon R, Target: Middle class and upper-middle class, Positioned as : A
compact car for the smart urban nuclear family

5. Buying decision of target segment:
Source: SIAM
Ford Ikon: Limited Editions, Ikon- Made for India : Priorities were ride comfort on
poorly maintained road, stable handling on bad surfaces, interior spaciousness,
comfortable entry and exit and affordable cost. Further, in order to enhance the
driving comfort, sufficient ground clearance, powerful and smooth suspensions,
durable tyres, low turning diameter and power steering were accommodated. The
company also paid equal attention to the interior comfort. Based on the assumption,
that Indian car owners are Chauffeur driven, the rear part of the interior received
superlative attention. As some of the car owners wear turbans, adequate rear
headroom was provided. As Indian drivers tend to sit close to the steering wheel, the
door apertures have been designed to be tall enough to enhance easy entry and exit.
The company also paid meticulous attention to the special needs of women. As

6. Indian women wear Sarees, snagging was a perennial problem. In order to overcome
this, sharp edges were eliminated by using injection-moulded parts. Also the length
of the metal tracks was reduced. Another feature, designed in response to the Indian
customer requirements, was the massive trunk volume of 400 litres. This was
necessitated by the fact that the luggage carried by the Indians particularly during
the family trips is quite large by any standard. The air conditioning system was
another attribute, which had to be improved significantly. Information collected in
the system about various weather conditions help them to accurately answer this air
conditioner questions. The air conditioner in Ford Ikon was developed taking into
account the extreme temperatures in different parts of the country and particularly
the hot summer. The fact that the air conditioning system in Ford Ikon was validated
during the summer of 1999 in Rajasthan provides ample evidence to the importance
attached to the design and development of the car in accordance with the
expectations of the Indian market.
Tata Indigo:
The brand adopted the tagline " Spoil Yourself" and all the ads, highlighted the
goodies that came with the product. Another series of ads promised the customers,
business class experience. The basic focus of the brand was to drive home the fact
that Indigo has more legroom and space compared to most of the C-class sedans.
This campaigns and the reasonable performance of the car with the tempting price
tag ensured the brand's success in the market. Indigo has now 33% market share in
the c-segment.

7. Marketing Mix (Maruti Versa):
Product:
 Launched as Multi Purpose Vehicle, with width of 1,475 mm, height of 1,905 mm and
length of 3,675 mm.
 It was offered with a petrol engine and had a seating capacity of 8 persons, whereas
the base model came with a 5 seat configuration.
 It was powered by a 1298 cc 1.3-litre 4-stroke, all aluminium water cooled engine,
which had the potential to belt out a maximum power of 82 bhp with peak torque of
102 Nm. (Same as Maruti Esteem)
 It is a perfect family vehicle as far as its interiors, internal space management,
engine, suspension.
 Twin Air Conditioning
 High Power to Weight ratio, results in superior pick up and acceleration.
 High seating position and easy controls make it a driver-friendly car. It is easy to park
and has ability to cruise at high speeds with full ease.
 The occupant’s safety is ensured during front collision because of pout of the
bonnet.
 The capabilities matched the likes of Toyota Qualis and best in class technical
capabilities in the given price range are added plus points.
Price:
 Versa was launched with a price of Rs 5.15 lakh for the base model and the top end
model costs around Rs 6 lakh.
 Versa was priced at par with Maruti Esteem and other entry level sedans.
 Sedan was available at the same price. Moreover the ' Mini Bus ' shape of the car
also was a put off for many customers .

8. Place:
 Distribution Channel: Maruti Suzuki has well established network of distribution
channels all over India for its products. A dedicated floor was allocated to Versa to
improve the showcasing of the product.
 Direct sales:
1. Offered Exchange offer for up-gradation from 4-5 seat vehicle to Versa at
competitive discounts.
2. Special discounts to joint families with 4 or more children in a house.
 Indirect sales:
1. Promoting Versa for commercial use like intra-city travel for various agencies
(viz. staff movement for companies, small gatherings, etc.)
2. Use as a special purpose vehicle e.g. ambulance, service van, etc
Promotion:
Versa was promoted as a “complete family car” to target big families segment in India. The
message of staying together & travelling together would help to tie a closer relationship
with prospective customer.
 Individual communication:
1. Periodic promotional events at major distribution centers by celebrities like
Bacchans'. Celebrity would also be featured in various electronic media (e.g.
television, radio, online websites) advertisements, print media adv.; and
hoardings & banners.
2. Promoting test drives with whole families to enable customer to check actual
comfort and quality of ride.
3. Roadshows and display of vehicle in various exhibitions & festivals.

9.  Print Media:
1. Periodic advertisements in leading national newspapers, sports magazines,
automobile magazines etc. as well as in local language.
2. Publishing interviews of satisfied customers in their own language.
 TV Media:
1. Regular ads. during popular time e.g. soap-operas (to target families) or
cricket matches.
Identifying problem brand:
In October 2001, Maruti launched ‘Versa’ in Multi Purpose Vehicle segment. Versa was the
first Multi Purpose Vehicle from Maruti. It was a sad story in Indian brand scene. This brand
was launched with much hype in 2001 but failed to make the cut. The sales was just 808
cars/year in calendar year 2002.
Versa was the logical upgrade brand for Maruti Omni. Omni was successful as a family van
and Maruti thought that there is a market for a luxury van that can carry more passengers
than an ordinary car. Versa is the Indian version of the popular Japanese Van EVERY.

10. Problem Analysis:
Product:
Versa was a large car and the initial buyers were essentially those who had large family.
There were four variants namely Versa std, DX, DX2 and the top end SDX. For a small family
, there was no logic in going for Versa when a sedan was available at the same price.
Moreover the 'Mini bus' shape of the car was also a put off for many customer. Fuel
consumption of Versa was high, mileage only 11 kmpl and diesel model was not available.
Pricing:
Despite the dream launch, Versa failed to generate volume . The key reason was the price.
Versa was launched with a price of Rs 5.15 lakh for the base model and the top end model
costs around Rs 6 lakh. Those enthusiastic customers who flocked the showroom after
viewing the ads were shocked by the high price of Versa. Versa was priced at par with
Maruti Esteem and other entry level sedans.
Maruti was wrong in estimating the customer's perception of price in this case. It was
paradoxical because the company had blockbuster products like Maruti 800 and Alto which
were in sync with Indian consumer's price value equation. In the case of Versa, Maruti was
little too ambitious.
Price reduction 1: On June 2003, Maruti reduced the price to 4 lakhs due to poor sales.
Price reduction 2: Again on April 2004, price was further reduced to 3.27 lakhs resulting in
sales increase as given in table.

11. But these improved sales were in no way comparable to other models of Maruti as they
were too high with Maruti 800 posting a sales of 95,924 units/yr.
Positioning:
Initial Launch: Versa was launched as an affluent Microvan. The brand was positioned as "
Two luxury cars for the price of one" . The ads talked about twin A/C, comfort and space.
Re-launch: In 2004, Maruti re-launched Versa with new positioning. The brand’s new
positioning was based on the joys of travelling together. The tagline was changed to "
Travelling in company in a car has its own kind of fun". New campaigns were launched
which highlighted the theme of travelling together . The aim of the campaign was to inform
the new reduced price along with conveying that Versa is ideal for large families.
But these campaigns did not had the desired results. Although sales peaked immediately
after the announcement of price cut, Versa was not able to sustain the volume. More over
the brand was eclipsed by the success of Maruti Wagon R which was priced even higher
than Versa and with less leg-space and engine power.
J.D. Power Asia Pacific on competitive India passenger-car market established that despite
its Japanese origin, consumers view Maruti Suzuki as an Indian brand, less modern than
other brands but distinctly positioned as offering affordable and fuel-efficient cars. Similar
to Maruti Suzuki, Tata also is seen as a brand primarily positioned on affordability and fuel
efficiency. In contrast, Japanese brands, such as Honda and Toyota, are able to more
1950
4291
0
1000
2000
3000
4000
5000
2002-03 2003-04
SALES (UNITS)
5.5
3.27
0
2
4
6
2002-03 2003-04
PRICE in lacs INR (avg)

12. effectively differentiate themselves from other brands. Consumers in India perceive these
Japanese brands to be more contemporary—offering the latest technology and
engineering—and perceive them to have a more global image than their European, Korean
and U.S. counterparts. This image was also detrimental for Maruti Suzuki to position Versa
among foreign player brands.
Recommendation: The promotion and distribution of the product was apt to Indian market
and sentiments. The positioning and pricing impacted the Versa success. So
recommendations centred to these are:
1. During Initial Launch: Positioning which talks about features of luxury cars with low
price contradicted the actually high launch price. So Maruti should have priced Versa
much lower so that it should not have competed with entry level sedans.
2. During Relaunch: Maruti had done a comparatively better positioning of travelling
together and a reduced price but the product remained same. They should have
made some changes in exterior, interior and additional features. That would have
made the people to perceive Versa as a different product with better features and
reduced price.
3. Maruti should have kept an eye on Versa’s appearance as the looks of competing
brands were much appealing. The initial launch positioning of luxury car was not
correlated to the actual ‘box’ type car.

13. 4. Maruti could not grab the first mover advantage because of over pricing Versa. As
purchasing in India was dependent on disposable income.
5. Versa came only in petrol model and diesel model was not available. Mileage was
also low (11 kmpl) leading to high cost of owning the vehicle. Maruti should have
launched diesel model too. These factors reduce the running cost and increase the
economic value to customer.

14. References
1.Maruti Suzuki Annual Report (2012-13)
2.EY Report on Indian Passenger Vehicle Industry :
http://www.ey.com/IN/en/Industries/Automotive/Mega-trends-shaping-the-
Indian-passenger-vehicle-industry
3.Auto Car Reviews: http://www.autocarindia.com/auto-reviews/maruti-suzuki-eeco-
269284.aspx
4. Economic times
5. Top Speed Magazine Reviews.