INTRODUCTION OF THE COMAPANY

MARUTI UDYOG 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

Maximising Shareholder's value

Being a responsible corporate citizen

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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 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

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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 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 to create optimum engine

delivery. This means every Maruti Suzuki owner gets the ideal combination of

power and performance from his car.

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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

15,00,000 vehicles produced by April, 1996

20,00,000 vehicles produced by October, 1997

25,00,000 vehicles produced by March, 1999

30,00,000 vehicles produced by June, 2000

35,00,000 vehicles produced by December 2001

40,00,000 vehicles produced by April, 2003

45,00,000 vehicles produced by April, 2004

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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

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    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

 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

      

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  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

   

  1999

MSM 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

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 Best Canteen award among Haryana Industries as part of

employee welfare

   

  1992-93

 Engineering Exports Promotion Council's award for

export performance

   

  1991-92

 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 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

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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

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

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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

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

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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. 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.

We believe that it is this unwavering commitment to quality that will lead to the

further growth of the organization as competition increases.

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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 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.

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

the ISO 9001:2000 standard that prescribes Quality 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  

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

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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 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 Character

istics

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

Informati

on search

Evaluation

of

alternatives

Purchas

e

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 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

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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.

Major Factors Influencing Buying behavior

Cultural

Social

Culture

Subculture

Social Class

Reference group

Family

Roles and statuses

Personal

Age and life-cycle

stage

Occupation

Economic circumstan

ces

Lifestyle

Personality and self-concept

Psychological

Motivation

Perception

Learning

Beliefs and attitudes

Buyer

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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.

 Late Majority

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

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 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.

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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.

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

target market.

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?

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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

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.

Do not simply throw out everything that you now have and replace goods

or production machinery with completely new items.

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

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important part of the marketing 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.

Target Marketing

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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-ChainCo->Dealer->Customer

Co->Distributor->Dealer >Customer

6Discount Margin Cartel

Depends on Dealer To Dealer

7 CSRProper 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 &

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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 Advertisement

Parent Company & dealer both give advertisement

Only from Parent Company

16Loyality Programs Yes No

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Customer Satisfaction Index

Well- Defined & Organized None

18 PromotionFree 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)

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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 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

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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.

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.

29

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

Mr S V Bhave, Director

Mr Kumar Mangalam Birla, Director

Mr Amal Ganguli, Director

Ms Pallavi Shroff, Director

Mr Manvinder Singh Banga, Director

30

OBJECTIVE OF THE COMPANY

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

B Wagon R

B Alto

C Esteem

C Baleno

31

C Versa

C SWIFT

Utility Vehicle GYPSY KING

Utility Vehicle GRAND VITARA

BALENO

WAGON R

32

ESTEEM

MARUTI 800

33

NEW ALTO

OMNI

34

SWIFT

VERSA

ZEN

35

36

RESEARCH METHODOLOGY

The nature of the project work has been exploratory as no hypothesis, is

taken to be tested. Though the conclusions drawn could be taken as the

hypothesis and further tested by the research work undertaken in the

relevant field. The reason for choosing the exploratory research design

is the fact the project report has been primarily based upon the

secondary sources of data and whose authenticity could be assured of.

The reluctance of the company's personnel in parting with much of

information led the project report to be based substantially on the

secondary source of data. The sources of data used in data collection are

the following:

Primary sources

In order to gather information about the various products, I personally

visited a number of retail markets and collected data pertaining to the

prices of the products offered. The market visits were useful in knowing

the comparative prices and quality of the offered brands vis-à-vis the

competitive brands. Detail regarding the packaging of the products were

collected were collected and I also inquired about the various sales

promotion schemes followed by the three companies.

By interviewing these retailers valuable information was collected. I

inquired from them about their marketing advertising and distribution

strategies.

37

Secondary sources

Information was collected from secondary sources such as public

libraries, newspapers, business magazines.

Beside these the use of Internet was also made in collecting relevant

information. The data collected from the above mentioned sources has

been adequately structured and used at appropriate places in the report.

This particular way of data collection was used because of its low cost

(except data collected through surfing the internet) and less time

consumption.

The information gathered included:

Their annual reports (Procter & Gamble and Johnson and

Johnson).

Pamphlets.

Posters.

Press clippings.

News releases.

Newsletters.

Pictures.

38

FINDINGS OF THE STUDY

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 IncreaseChange

%

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%

39

Esteem Lx 445968 444968 1000 0.22%

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%

40

ORGANISATION STRUCTURE AT MUL

Maruti Udyog ltd. Has a flat organisation structure with a maximum of three

levels.

Head office

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)

41

THE PRODUCTION PROCESS AT MARUTI

42

STEEL COILS

BLANKING

PRESSING

WELDING

PAINTING

ASSEMBLY

VEHICLE INSPECTION

TEST RUN

SUPPLY & DISPATCH

FROM VENDOR

S

FROM VENDOR

S

FROM VENDOR

S

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.

43

 

44

MARUTI ALL INDIA SALES – 3 YR TREND

Segment 2003-04

Growth

2004-05

Growth

2005-06

Growth

A1 (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 417,39

228% 482,198 16% 522,66

48%

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%

45

MARKET SHARE

46

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

VitaraMitsubishi - Pajero; Hyundai -

Terracan & Tucson; Ford - Endeavor; Toyota - Prado &

Innova; Nissan - X Trail; Honda - CRV; GM - Forrester &

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

Bolero

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

47

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 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 theirdominance 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

48

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 vehicles. To service this car parc, at March 31, 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 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.

49

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 March 31, 002.

They believe that they would be able to expand their production to 500,000

cars per year with minimal additional capital expenditure. This would

enable them to benefit from significant economies of scale.

Strong vendor base and higher rates of localization: They work closely

with their vendor base for the supply of raw materials, components and

spare parts of their products. In order to improve quality and generate

economies of scale, they have reduced the number of their vendors of

components in India from 370 as of March 31, 2000 to 299 as of March 31,

2003, and intend to continue to reduce the number of our vendors. 113 of

their vendors at March 31, 2003 were in technical collaboration with

foreign entities. As of the same date, we had strategic equity interests

50

through joint venture agreements in 13 of their vendors, who together

supply a substantial portion of their purchases of components. A number

of their vendors are their dedicated suppliers in that they account for a

majority of their turnover. Vendors located within a radius of 100

kilometers from their facility supply the majority of their components. The

production systems of their vendors are generally aligned to their need for

a reliable and timely supply of components that meet their quality

requirements. This has enabled them to increase the proportion of locally

sourced, lower cost components in their models, a concept they refer to as

localisation. They have been able, in collaboration with their vendors, to

increase the rate at which they are able to localise production of their new

models over time. This has helped them reduce the cost of their

components.

Skilled labour and experienced management: Thei highly skilled labour

force has become increasingly productive in terms of vehicles produced

per employee and receives training on an ongoing basis, including training

by Suzuki. As of March 31, 2003, 1,900 of their employees had been

trained at Suzuki’s facilities in Japan. They have been present in the Indian

passenger car market for a significantly longer period than most of their

principal competitors. As a result, they have been able to build a highly

experienced management team that is familiar with conditions in the

Indian passenger car market. For instance, their managing director has

almost ten years of experience with them, and most of the heads of their

divisions have more than 15 years of experience with them.

51

Capital resources: They have cash and bank balances and current

investments amounting to Rs.9,992 million. As of the same date, they had

relatively low levels of outstanding indebtedness, in the amount of

Rs.4,555 million. As a result, they have relatively low interest expense and

flexibility to raise funds, if necessary, for their working capital and capital

expenditure in the future.

52

BUSINESS STRATEGY

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.

Secure repeat purchases by offering a “360 degree customer

experience”: On the basis of their belief that securing repeat purchases

from an existing customer requires less expenditure than acquiring a new

customer, they aim to provide customers with a “one-stop shop” for

automobiles and automobile-related products and services.

Continue to benchmark their manufacturing capabilities: They plan to

continue to benchmark our manufacturing capabilities with the most

efficient car manufacturing facilities of Suzuki and its subsidiaries.

53

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:

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.

54

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 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

55

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 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 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

56

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 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

57

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.

58

NEW 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 shop

Inspired 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.

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.

59

THE PLAYERS IN THE INDIAN AUTOMOBILE INDUSTRY

Hyundai Motor India Ltd

Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai

Motor Company, South Korea and is the second largest and the fastest growing

car manufacturer in India. HMIL presently markets 31 variants of passenger

cars in six segments. The Santro in the B segment, Getz in the B+ segment, the

Accent in the C segment, the Elantra in the D segment, the Sonata Embera in

the E segment and the Tucson and Terracan in the SUV segment.

The company recorded combined sales of 252,851 during calendar year 2005

with a growth of 17.26% over year 2004. HMIL is India's fastest growing car

company having rolled-out over 970,000 cars in just over 80 months since its

inception and is the largest exporter of passenger cars with exports of over Rs.

1,800 crores. HMIL has recorded a growth of 27.2% in exports over the year

2004.

HMIL’s fully integrated state-of-the-art manufacturing plant near Chennai

boasts some of the most advanced production, quality and testing capabilities in

the country. In continuation of its investment in providing the Indian customer

global technology, HMIL has announced plans for its second plant, which will

produce 300,000 units per annum, raising HMIL’s total production capacity to

600,000 per annum by 2007. The plant will be built on a 2.1 million square

meter site adjacent to the existing facility .HMIL is investing to expand capacity

in line with its positioning as HMC’s global export hub for compact cars. Apart

from expansion of production capacity, HMIL plans to expand its dealer

network, which will be increased from 157 to 200 this year. And with the

60

company’s greater focus on the quality of its after-sales service, HMIL’s service

network will be expanded to over 1,000 in 2006.

The year 2005 has been a significant year for Hyundai Motor India. It achieved

a significant milestone by rolling out the fastest “200,000th” export car. HMIL

exports to around 60 countries globally and recently made a foray into the

highly competitive UK market by exporting its first shipment of 820 cars.

Propelled by the strong performance in year 2005, Hyundai Motor India is on

the threshold of yet another grand milestone of rolling out its ‘One millionth’

car which is expected soon.

Tata Motors

Tata Motors is one of the largest companies in the Tata Group with a total

income of US$ 2.35 billion. More than 3 million Tata vehicles ply on

Indian roads making Tata a dominant force in the Indian automobile

industry.

Tata Motors is India's only fully integrated automobile manufacturer with

a portfolio that covers trucks, buses, utility vehicles and passenger cars. It

would be no exaggeration to say that Tata Motors provides the wheels for

India's growth.

Tata Motors has the unique distinction of giving India its first and only

indigenously built passenger car - The Tata Indica and the premium feature

sedan - The Tata Indigo. The Indica, launched in 1998, reached the 2,50,000

sales mark within 52 months of launch.

61

Tata Motors owes its leading position in the Indian automobile industry to its

strong focus on indigenisation. This focus has driven the Company to set up

world-class manufacturing units with state-of-the-art technology. Every stage of

product evolution-design, development, manufacturing, assembly and quality

control, is carried out meticulously. Their manufacturing plants are situated at

Jamshedpur in the East, Pune in the West and Lucknow in the North.

Ford India Limited

The Ford Motor Company has a rich legacy of translating better motoring ideas

to the roads. It has manufactured notable brands such as the Ford, Lincoln,

Mercury and the Jaguar. It is among the top five industrial corporations in the

world and is available in more than 200 countries around the world.

Ford has entered the Indian market through a tie - up with Mahindra Motors to

manufacture the Ford Escort. A project that has been set up with a investment of

Rs.1700 crore. Ford India Limited is a subsidiary of Ford Motor Company,

currently Ford has a 78% stake, which is going up to 92% soon. The Maraimalai

Nagar Plant of Ford India Limited, located roughly 45k.m.from Chennai,

provides employment to over 20000 people.The plant has the capacity to

manufacture 1,00,000 vehicles per annum, equipped with state-of-the-art

vehicle manufacturing technology from Ford.

Presently offering seven different models, Ford India Limited (FIL) is catching

up fast with the Indian consumer. This is secured through a quality check

program based on the principles of NOVA - C (New Overall Vehicle Audit -

Customer) wherein daily random checks are conducted from a customer's point

62

of view. To be doubly sure, routine calls are made to dealerships to check the

quality of cars delivered to them.

At Mahindra's dealerships are present trained professionals who provide

the best levels of service in India. Its intensive manpower training,

advanced service equipment and dedicated consumer satisfaction are the

are its plus points which is being followed by the entire industry.

Acknowledgement has come in the form of the J D power 1997 India Initial

Quality and Customer Satisfaction Awards. These internationally acclaimed and

recognized awards voted the Ford Escort as the Best Quality car and the

Mahindra Ford and its dealerships were rated the highest in Customer

Satisfaction. This is an honour as it its only the second time in automotive

history that the same brand/manufacturer has received both the awards in the

same year.

General Motors India

General Motors India, incorporated in 1994 as a 50-50 joint venture company

with the C.K. Birla Group of Companies, became a fully owned subsidiary of

GM in 1999 when GMOC bought the remaining shares. The company was

restructured in 1999 and was converted from a Public Limited company to a

Private Limited company. GM APH LLC currently holds 86 percent of voting

shares, and Holden (Australia) holds 14 percent. The SPO business was

integrated with the main business in the same company in 2000.

In India, GM strengthened its presence with new product launches Chevrolet

Optra in 2003 and Chevrolet Tavera (Multi Utility Vehicle) in 2004. Similarly

in 2004, GM India is expected to register a growth of 90% over 2003. With

63

sales volume going up, the market share of GM India has gone to nearly 2%.

The sales volume in 2003 was 15,155 units while 2004 figure is expected to be

around 27,000 units. In 2004, the company sold a total of 26,166 cars as against

15,155 cars in 2003 registering a growth of 73% while overall passenger car

growth during the year was only around 23-24%. These included 9191 Chevy

Optras in Entry 'D' Luxury sedan segment, 8369 Opel Corsas and 8417 units of

the new generation premium multi-utility vehicle (MUV) Chevrolet Tavera.

The existing GM India plant was originally built by Hindustan Motors. In 1994,

GM India entered into a 50% Joint Venture partnership with Hindustan Motors

and modernized the 45,000-square-meter plant near Halol, 45 kilometers

northwest of Vadodara, in the western state of Gujarat. In February, 1999, GM

bought the holdings of Hindutan Motors and GM India became a 100%

subsidiary of General Motors Corporation of USA. The plant produces the Opel

Corsa, Corsa Sail, Chevrolet Optra, and Chevrolet Tavera. The Chevrolet

Forester and Opel Vectra are sold as CBUs (Completely Built in Units) and as

imported from Japan and Germany respectively.

Toyota Motor Corporation is the third largest automaker in the world.

They have 34 dealers in India and in Delhi they have 2 dealers, first one is

‘South Delhi Toyota’ and second one is in Moti Nagar in which I have

visited during my survey. Dealer in Moti Nagar which is “Galaxy Toyota”

have predetermined mission that-Customer comes first and everything they

do is to meet their customer needs, basically they work for creating a

lifetime customer.

They work by dividing their work like in one showroom they have separate

teams for every product like relating to Corolla it comprises of 7 or 8

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executives who handle all the work weather it is of sale or any enquiry or

telemarketing call that team must have some specific target to achieve.

They reach to the customers either by distributing Leaflets, Brochures to

the customers. They collect customer database from Directory (Yellow

Pages) or through customer references even they solve customers query

online and give information through e-mails. Recently they organized one

drawing competition between the kids of their existing customers just to

interact with the customer and build loyalty of their company products.

They judge their customer satisfaction by analyzing that repeat buyers are

more or not & moreover they have customer feedback form in which they

can analyze customers background and can forecast customer future

demands. They target only high profile customers.

They build customer loyalty by giving happy calls to the customer after

sale of every 1,3,7 month. They provide Periodic maintenance schedule,

which will ensure that vehicle, is kept in best able-bodied at all times. The

maintenance schedule may include periodic inspection, adjustment and

lubrication that will keep vehicle in the safest and most efficient condition,

they provide one booklet in which they give simple and useful tips for

maintenance of the car. They offer good schemes like providing free Test

Drive worth Rs 250 petrol at the time of sale of any car. They do road

shows to attract customers. To promote their product they organize

exchange mela, events, various cash discounts like currently they are

running one discount scheme on purchase of any of their car (Innova,

Toyota) they are giving free accessories worth Rs15000. They provide 4

free services after sale and with full clean diesel.

All employees of Galaxy Toyota shall consider how they should act and

how they might change their ways to benefit the company. They launch

one “Co Branded Credit Card” to provide additional benefits and services 65

to the Toyota customers. This Credit Card will give Toyota customers a

better payment flexibility and convenience, like Customer gets free service

voucher with the card, Special Invite to co-sponsored events, Personal

accident insurance coverage: Up to 20 lakhs etc. They have one Guest

Book in which they store valuable comments of customers, which they

think are very important for them, which will help them to improve their

service.

HONDA

Honda is one of the leading manufacturers of automobiles and power products

and the largest manufacture of motorcycles in the world. They have 20 dealers

in 42 different cities around India. In New Delhi they have 6 dealers, I have

visited one of them, which is in Najafgarh Road.

They do surveys to know customers need. They target either existing or their

perspective customers by giving advertisement in the newspaper or through

there satisfied customers which give references. They don’t believe on targeting

competitor’s customers because by not doing so they have such a brand

reputation with good quality products, only through this they are able to make

good sales.

They display their models in 8th Auto Expo, which held in New Delhi.

They are now focusing on their new model ‘Civic’. Honda's Civic perhaps

drew the maximum attention. The reason is simple: Civic is a new car from

the house of Honda. During my survey I get to know that Honda City

Model is the second largest selling car in the ‘C’ segment. They have a

good superiority with superior brand name in the country.

They prefer to have mode of communication with the customer through

mail, telephone and sometimes by letter. Customers who don’t have time

66

even to see the model or to call the dealer to make inquiries about their

reservation they desire to solve their query online itself.

To judge customer satisfaction they some times invite their customers to have a

get together, to have interaction with customer in a minute to know that are they

satisfied with their services and what they are expecting from them in the near

future. They make maximum of their sales from the fresh customers rather than

their repeat purchasers. To increase their sales they try to extort surreptitious

information from the customers and on their end they aim to ensure that the

product quality and product quantity should be available in required quantity in

their dealership.

They have Feedback form in which they take feedback of the customer as well

as their salesperson because through this they are able to get the information of

both the customer & their salesperson that are they giving the full information

to the customer. This Dealership even provide technical skills and techniques to

their employees that how to deal with the customer thoughtfully every after 6

months.

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NEED FOR CRM IN AUTOMOBILE INDUSTRY

The global automotive industry exhibits most of the characteristics of mature

industries and closely follows their business cycles. While vehicle industry sales

have been strong for the past several years, they have started to slow recently

due to the current global economic slowdown. Deteriorating economic

conditions result in a drop in consumer confidence, which quickly impacts

automotive sales due to their big-ticket status and the relative low cost of

extending the life of an existing vehicle through maintenance and repair.

The advent of the Internet as a research tool (75 to 80 percent of auto consumers

research using the Internet) has shifted power to consumers, further increasing

pressure on prices. At the same time, government regulation and consumer

demands for sophisticated features have increased development, production, and

marketing costs. Regional economic fluctuations favor consolidation among car

companies, suppliers, and retailers -resulting in fewer, larger companies that

have more complete product lines targeted at existing and new markets.

Consolidation has heightened competition in all vehicle segments. Low-cost

manufacturers are expanding beyond their home markets with entry level

vehicles, traditional passenger car manufacturers are expanding into the light

truck markets, and luxury manufacturers are moving down market with

passenger cars and SUVs. As a result of these product and market extensions,

consumers find it difficult to exhibit brand loyalty because vehicles have

unclear brand identities, similar features, and comparable prices. In addition, an

overpopulation of dealers has resulted in local and regional competition among

same make dealers. This further reduces margins and damages the brand images

the car companies spend large amounts of money to build.

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Relations between the car companies and their suppliers traditionally have been

difficult. In response to competitive pressure, suppliers have been forced by the

car companies to provide higher-quality components at constantly lower costs.

The resulting decrease in margins and the reduction in volume due to slowing

sales have increased the pressure to consolidate and forced some suppliers to the

brink of bankruptcy. Dealers too have a long history of adversarial relationships

with the car companies. Independent entrepreneurs who view some of the car

companies with skepticism or serious mistrust, dealers believe that many

manufacturer-sponsored customer satisfaction programs are actually designed to

force smaller dealers out of business or to gain control of customer relationships

that the retailers believe they "own."

These difficult relationships have prevented car companies and dealers from

maximizing the lifetime value of their combined customers. There are few

incentives or efficient methods for dealers and car companies to share critical

data, resulting in ineffective management of product, service, and household

information. In addition, consumers receive conflicting marketing

communications from the two groups, which results in reduced brand value.

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

69

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. Car

companies must take the initiative in understanding the customer 's

perspective throughout the buying cycle.

Lack of multichannel capabilities - With the advent of the Internet

as a research tool, the majority of customers are accessing the

automotive enterprises through several different channels. Many

times, the switch between channels happens very rapidly as a

prospect or customer can view a Web site, make a phone inquiry,

and visit a retail store within days or even hours of an initial contact.

To improve customer satisfaction and secure customer lifetime

value, companies must be able to capture these multiple interactions,

provide seamless management between channels, and leverage

shared customer information to create rewarding experiences and to

develop and execute highly targeted marketing campaigns.

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

70

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 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

71

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.

Target Marketing Procedure Of Various Companies

TARGET SEGMENT

To reach to rural and lower middle class consumers. They begin with

small concentrated markets appealing to local culture and

aspirations of the targeted area

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STRATEGY

THEIR STRATEGY IS TO CAPTURE THE RURAL MARKET BY

EMPLOYING WOMEN WHO BELONG TO THEIR LOCAL

COMMUNITY THROUGH WHICH THEIR PRODUCT CAN REACH

TO LOCAL CONSUMERS. THEIR STRATEGY IS TO PROVIDE

WORK FOR WOMEN TO CREATE AWARENESS AMONG

CONFINED CONSUMERS

Process

They started with Project Shakti in which their basic aim is to educate a rural person

about their products through women who belongs to their own local community and

who can communicate well in their language with them. In this way many educated

women get work in rural sector and on the other hand HLL Corporate Social

Responsibility (CSR) also increases towards society by introducing educative

programs for the benefit of the rural sector

Mode of Communication

They reach to customers by giving advertisements in the T.V. or through radio,

through wall painting, or through promotional activities like weakly haats, mela

or local bazaars and most importantly, their policies were flexible and they

could adapt to fast changing marketing situations.

Through Internet, E-mail usage, communication media like telephone and mail

facility this mode of communication is possible to a great extent. ITC’s

extensive India-wide distribution network enables its greeting cards reach over

12,000 multi brand outlets in over 700 cities across the country. In the last three

73

years, 10,000 greeting card designs have reached these outlets with the help of

ITC's web-enabled e-commerce model –Communication Model ITC markets

Opportunity

These days’ consumers are looking for convenience and instant

gratification. Communication media like the telephone and e-mail

facilitate communication to a great extent. But many greeting card sites

are moving from a 'free' to a 'pay' mode. This could be an emerging

revenue earning opportunity for content providers.

Threats

'Expressions' which is a competitor of ITC in this segment is currently the

second biggest greeting card brand in India with a market share of 20 per cent.

ITC has a five per cent share in the stationery market. The greeting card market

in India is estimated to be around Rs. 250 crore in terms of yearly consumer

spent. The unorganized sector in the greeting card market will be close to 40 per

cent. The organized sector, controlling 60 per cent of the market, is divided

between ITC, Archie’s and Hallmark. While Archie’s has licensing agreements

with international greetings brands

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FINDINGS FROM SURVEY

Total Number of Respondents: 15 Officials

Number of Respondents

Maruti Udyog Limited 5

Hyundai Motors India Ltd 2

General Motors 2

Tata Motors 5

Ford India Limited 1

Do you face problems in maintaining good and effective relationships with customers?

Quite

Frequently

Frequently Average Rarely

Maruti Udyog

Limited

2 3 - -

Hyundai Motors

India Ltd

- 2 - -

General Motors - 2 - -

Tata Motors 3 2 - -

Ford India

Limited

- 1 - -

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Findings: According to the responses of the respondents it can be concluded

that all the respondents face problems in maintaining good and effective

relationships with customers. With changing customer needs its quite obvious

that maintaining good relations with customers need an effort on part of the

Dealers and Manufacturers.

How well can your company identify its end user customers?

Maruti Udyog Limited: According to the officials of MUL, the

company’s endeavor is to be close to the customer, to anticipate and

fulfill their needs. They believe that the new business initiatives taken

by MUL have expanded the scope of this relationship. Maruti offers

auto insurance, auto finance, corporate lease and fleet management and

resale of pre-owned cars in partnership with its dealers. For the first

time, car customers in India are able to access these services through a

one-stop shop, backed by the leader brand. The way they look at it is

that this will provide complete mobility solutions to the Maruti

customer. This also enables them to extend their relationship with the

customer beyond the point of purchase to the entire ownership life

cycle. Since these services play a vital role in the car customer's

76

ownership experience, the new initiatives enable them to offer Maruti

owner’s greater value, assurance and convenience.

Hyundai Motors India Ltd: According to the officials of Hyundai Motor

India is at a very exciting stage in India today. They are experiencing

tremendous growth - which is a true sign of enjoying customer

confidence. In order to strengthen their position further in the Indian

market, they need to continuously work on building their corporate

reputation while aggressively positioning their products. For HMI's

focus and commitment to the Indian automobile customers is of critical

importance. Its been their continuous endeavor to fulfill the entire

spectrum of customer needs and desires, across all socio-economic &

lifestyle groups. They have therefore, in just 6 years of HMI's young

life, established nationwide sales & service network, scaled up state-of-

the-art manufacturing capacity, launched global-standard cars in rapid

succession and exported cars made-in-India across the globe. Getz, a

much admired lifestyle brand in Europe and elsewhere, is a step in the

same direction and is a cutting-edge, addition to HMI's extensive

product portfolio.

General Motors: According to the officials at General Motors is

positioned as a mature and responsible car manufacturer, which offers

great value-for-money products to its customers. The company

leverages its global expertise to manufacture and market well

engineered and safe products through its well-established retail network

that provide an excellent ownership experience to its customers.

Tata Motors: According to the officials of Tata Motors the foundation

of the company’s growth over the last 50 years is a deep understanding

of economic stimuli and customer needs, and the ability to translate

them into customer-desired offerings through leading edge R&D.

77

Ford India Limited: According to the officials of Ford India has

reaffirmed its commitment to enhancing the purchase and ownership

experience for its customers with the rollout of Ford Brand@Retail

concept across the country. Ford India has been revamping all

dealerships under the Ford Brand@ Retail, a global corporate identity

program to offer a world-class purchase experience to the customer.

Ford India continues to expand its distribution network and will grow to

115 dealer outlets in 79 locations by the end of 2005. The officials also

mentioned that Ford India provides training support to dealers in areas

including customer satisfaction, sales, technical and non-technical

aspects of the business and in the financial management of the

dealership.

Can your company differentiate its customers based on their value to you

and their needs from you?

Yes No

Maruti Udyog Limited 5 -

Hyundai Motors India

Ltd

2 -

General Motors 2 -

Tata Motors 5 -

Ford India Limited 1 -

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Findings: According to the respondents (officials) at all the Five Automobile

Majors their company was able to differentiate its customers based on their

value to them and their needs from the company. This is important for the

automobile industry because the dynamics of selling cars is changing and

manufacturers and dealers who fail to meet the rising needs and expectations of

their customers will lose out to those who can. Buying a new car is an

experience customer will remember for a long time and ensuring that this

experience is a satisfactory one is essential in building brand loyalty and

customer advocacy.

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

79

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.

Hyundai Motors India Ltd: According to the officials at HMI The

Company has set up more than 70 dealer workshops that are equipped

with the latest technology, machinery, and international quality press,

body and paint shops, across the country, thereby providing a one-stop

shop for a Hyundai customer. Hyundai also has a fleet of 78 emergency

road service cars - specially equipped Santro that can provide

emergency service to all its customers anytime, anywhere. The

customers can also call on 1800-11-4645 (Toll Free - Only from MTNL

& BSNL numbers)

011- 26924645 (For all GSM Connections / Landline other than MTNL

& BSNL numbers) for any queries & customer complaints. 

General Motors: According to the official at GM, to bring greater value

and service to customers, they have introduced the GM Service Plus – a

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unique cluster of services, designed to compliment every aspect of

owning a car and ensuring complete peace of mind. So be it emergency

assistance, an urgent car servicing or even sourcing genuine

accessories, Customers can be assured of yet another great moment

from General Motors. For any car related query or emergency

requirement, customers can call 24-hour assistance at 30308080. The

unique 3-hour service programme comes with a promise of servicing

your car in just 3 hours, or you get the service free. With their 24-hour

workshops, customers can now conveniently get their car serviced,

when they use it the least. Widespread sales and service outlets across

the country ensure that you have the assurance of great service

wherever you travel in India.

Tata Motors: according to the officials of Tata Motors the company has

strengthened its distribution and customer care network and today has

77 dealers and 230 authorized service outlets spread across 119

locations in India.

Ford India Limited: According to the officials at Ford solutions aims to

provide quality, peace-of-mind products for the customer and embodies

a brand synonymous with its ability to provide products that can be

tailored to suit one's individual needs. Ford Solutions serve to develop

products for Ford and the Dealer body that enhance customer

satisfaction. When your vehicle needs a repair or a component replaced,

you need Quality Care service. Your Ford Dealership is simply the best

place to have your vehicle serviced. Brakes, shocks, batteries or

anything your vehicle may need, your dealership is the place to get it.

Customers can place a online service request at Ford.

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How well does your company customize its products and services based on

what it knows about its customers?

Highly Customer

centric

Somewhat Customer

centric

Not Customer centric

Maruti Udyog Limited

5 - -

Hyundai Motors India Ltd

2 - -

General Motors

2 - -

Tata Motors 5 - -

Ford India Limited

1 - -

Findings: All the officials of the Automobile Majors agree that all products and

services are highly customer centric and based on the information they know

about the customers.

82

Does the company have established quality assurance processes?

Yes No

Maruti Udyog Limited 5 -

Hyundai Motors India

Ltd

2 -

General Motors 2 -

Tata Motors 5 -

Ford India Limited 1 -

Findings: According to all the respondents their respective companies have

established quality assurance processes.

83

Does the company take customers' needs into consideration when selecting and implementing technology?

Yes No

Maruti Udyog Limited 5 -

Hyundai Motors India

Ltd

2 -

General Motors 2 -

Tata Motors 5 -

Ford India Limited 1 -

Findings: According to all the respondents their respective companies take

customers' needs into consideration when selecting and implementing

technology.

As per officials of GM the Tavera is a classic case of an India-specific product.

Though it is an international product, the car has been totally re-engineered for

Indian market requirements.

At Hyundai Segment-needs and budgets are specific and a suitable variant

strategy is inevitably required to meet different segment-needs and to be a

84

volume player in the segment. The variants are decided after considerable

research. They have been targeted at different segments and they presently

witness a healthy mix. As this segment evolves they rationalise the variant

strategy and add or delete variants to meet market requirements. They have

put in place a customer contact programme where they interact with

customers in groups as well at an individual level at regular intervals to

assess their needs and overall experience with their product.

The typical Indian consumer looks for value and does not mind paying a

little more for it. Fuel efficiency, airconditioning and reliability along with

ease of service and low cost of ownership are major considerations during

the purchase process in India.

Does the company provide its employees with technology that enables

them to help customers?

Yes No

Maruti Udyog Limited 5 -

Hyundai Motors India

Ltd

2 -

General Motors 2 -

Tata Motors 5 -

Ford India Limited 1 -

85

Findings: According to all the respondents the company provides its

employees with technology that enables them to help customers. Employee

and Dealer Training is a part of every company Customer Service

Initiative. This enables them to provide the customers with state of art

products and service to customers.

Does the company maintain a strategy for collecting and using

information about customers?

Yes No

Maruti Udyog Limited 5 -

Hyundai Motors India

Ltd

2 -

General Motors 2 -

Tata Motors 5 -

Ford India Limited 1 -

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Findings: According to all the respondents they have proper information about

their most profitable customers. Companies use Informal Meetings, Sales

Interaction and calls to collect relevant information needed to maintain good

customer relationship. The most effective companies like Tata Motors use all

the above while most of other track the data during sales interaction. All the

Automobile majors surveyed used CRM software for tracking Customer

Information. According to the officials Customer and Supplier Feedback are

gathered through Call Centers, Mails and Direct Interviews. There are other

methods too but the above three are the most cost effective.

How effectively does the company combine information on customers with its experiences to generate knowledge about its customers?

Highly Effective Somewhat Effective

Not Effective

Maruti Udyog Limited

4 1 -

Hyundai Motors India Ltd

2 - -

General Motors

2 - -

Tata Motors 3 2 -

Ford India Limited

1 - -

87

Findings: All the 80% officials of the Automobile Majors their company

highly effective in combining information on customers with its

experiences to generate knowledge about its customers while 20% said that

the company was somewhat effective.

88

What steps has the company taken to improve the total experience of its

customers?

According to the Maruti Udyog Limited Officials: Sales experience is

the most important factor, accounting for 37 per cent of the SSI score,

and includes issues such as fulfillment of commitments and lack of

hassles during the sales process, overall honesty and integrity of the

dealership personnel and sufficient time to make the decision. Maruti

entered the Indian car market, to provide fuel efficient, low-cost

vehicles, which were reliable and of high quality. It also offered

customers a friendly sales and after sales service. With high customer

satisfaction ratio and Total automobile value these objectives shaped

Maruti as big Giant in the field of automobiles.

According to Hyundai Motors (India) Officials: Hyundai's big hit was

its compact family car named Santro which became a huge hit with its

launch and capture hearts of millions with increasing satisfied

customers day by day. When Hyundai forayed into the Indian market it

moved quickly to set up a network of dealers and service stations - it

has close to 260 of the latter. Service was identified as a powerful

differentiator to the way things were done and word of mouth did the

rest. It was one of the ways to keep the Hyundai customer within our

fold. Also, these are advanced cars, which can't be repaired by a corner

mechanic. Hyundai offers service for less, it's easily reachable and

allows flexibility and customers appreciate that. Hyundai Motor India

Ltd (HMIL) launched “Achieve Q1P1” quality campaign on March 24,

2006 primarily focusing on achieving the Global No.1 Quality & Brand

image. The campaign has been initiated across the Hyundai vendor

fraternity. This new initiative will strengthen the Vendor quality

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organisation and will ensure the major part quality improvement such as

Six Sigma Activity, training and improve the Tier 2 suppliers. The

campaign will also help the suppliers to improve their 3C5S (3C –

Correct Container, Correct Quantity & Correct Location and 5S –

Sorting, Systematizing, Shining, Standardizing & Self-Discipline),

TPM (Total Productivity Maintenance), benchmarking activities and

upgrade quality systems.

According to Ford India Limited officials: Presently Ford is offering

seven different models, Ford India Limited (FIL) is catching up fast with

the Indian consumer. FIL was the first subsidiary of a multinational car

manufacturer in India to launch a car designed specifically for India. They

have consistently adapted the specification of the Ikon to ensure it meets

the needs of Indian consumers. They have improved the horn and the

steering column switch so that they are more robust; the new combination

switch has proved so effective that it is used worldwide. They have also

developed a hydraulically activated clutch system, improved ground

clearance and upgraded air conditioning to satisfy the specific needs of the

Indian customer. This is part of a continuous improvement process.

Satisfying our customers They have introduced initiatives to assess

customer satisfaction and to act on their concerns. The Intensified

Customer Concern Definition (ICCD) is a telephone survey of customers

conducted to assess problems in three areas:

They recognise the need for additional products. They are working towards

introducing products to match our customer’s dynamic lifestyle, products

which have progressive styling and are great to drive.

• Vehicle quality concern • Design and general comments • Negative sales

and service

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According to GM officials: General Motors target is to offer a choice of

products to their customers to match their different needs and budgets.

Being the world’s largest car manufacturer, they have access to a range

of products through their global alliances. They are already present in

most segments and will shortly have products in additional segments.

However, they are focusing on the fast growing MPV segment with the

Chevrolet Tavera and have invested substantially in this product line.

They look for customers for life who will have a choice of products to

buy from their stable. Sustained brand building efforts coupled with

intensive ground-level activity has ensured that Optra has remained

among the top two players in its segment. They have refreshed the

product through continuous product improvements and have emerged as

segment leader in fuel efficiency. They have recently launched a limited

edition of 150 cars, which has received a very positive response and

given us rich dividend in terms of brand building and imagery. A

product refreshment plan ensures that they remain competitive and are

ready to meet future challenges in this segment. They also have a

regular Customer Relation Management programme whereby existing

customers are offered loyalty programmes and great offers. So far, they

have organised six Optra Max Mileage Rally meets where Optra

customers compete to extract the best fuel efficiency out of their cars

and all participants are treated to an overnight stay at an exotic locale

with an evening of entertainment. The winners of these rallies are given

healthy cash rewards. These vents go a long way in building goodwill

and brand loyalty.

According to Tata Motors Officials: TATA Motors is India's foremost,

and the only fully integrated automobile manufacturer. Established in

1945 as TATA Engineering & Locomotive Company (TELCO), to

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manufacture locomotives and other engineering products, the company

is today among the world's top 10 producers of commercial vehicles.

TATA Motors was also previously known as TATA Engineering. It is

today one of the biggest and most prominent companies in the TATA

group, with an annual revenue of $1.8 billion in 2001-02. Today TATA

motors' vehicles run in more than 70 countries. TATA Motors use a

manual dealer management system, where every dealer managed

details. With legacy-based systems, the environment produced

inconsistent data, making interpretations difficult and resulting in

inefficient planning for capacity and spare parts. TATA Motors

required a standardised solution that would provide them with:

Increase in sales and profitability by easy management.

Improved accuracy of dealer-captured information.

Collaboration between vehicle manufacturers and dealers.

1. A strong feedback mechanism and interface for communicating with

customers. TATA Motors chose IBM as its partner to provide an

infrastructure solution. IBM created a Siebel solution to provide a DMS

solution for TATA Motors and then provided a reliable and scalable IT

infrastructure for developing and deploying its DMS application. The

IBM solution has simplified the IT infrastructure for TATA Motors. The

benefits include - low total cost of ownership, a more comprehensive

view of customers, enhanced customer experiences and improved loyalty.

With reengineered business process, the company can also analyse

customer interactions and other information more accurately, improve

capacity planning and increase profitability. Faced with increasing

competition from abroad, a cyclical business environment, and the

challenge of a widely dispersed dealer network, Tata Motors

implemented Siebel Automotive, a comprehensive customer relationship

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management (CRM) solution designed specifically for companies in the

automotive industry. Seamlessly integrated with Tata Motors’ dealer

management system and SAP back-office applications, Siebel

Automotive has delivered significant benefits across the extended

organization, including improved customer satisfaction, increased

revenue and productivity, and reduced costs. Apart from providing its

customers with high performance automobiles, Tata Motors strongly

believes in customer safety. Several cases have been cited where

passengers driving Tata vehicles have been saved after terrible accidents.

Tata Motors established a crash-testing facility, the only one of its kind in

the country, in Pune in 1996. The small workforce of 21 members

including engineers aims to control the serious risks and intrusions in

accidents. The company believes that this factor has been vital to the

success of the Indica and other products under the company’s passenger

car unit. The key things that the critical people spend time on 1.

Commitment to quality manufacturing standards 2. Developing new

products 3. Customer Safety and satisfaction 4. Global expansion Norms.

How much 'influence do customers' needs have on the company's products and services?

Very High Substantial Very LowMaruti Udyog Limited

3 2 -

Hyundai Motors India Ltd

2 - -

General Motors 2 - -

Tata Motors 2 1 2

Ford India 1 - --

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Limited

Findings: All the 67%(10) responding officials of the Automobile Majors

customer needs have a very high influence on company’s products and

services while 20%(3) respondents said that it had substantial influence

while 13%(2) respondents said that customer needs had very low influence

on company’s product and services.

ANALYSIS

Corporates, don't talk about exceeding customer satisfaction - that's passe - 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'.

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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.

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.

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Faced with increasing competition from abroad, a cyclical business

environment, and the challenge of a widely dispersed dealer network, Tata

Motors implemented Siebel Automotive, a comprehensive customer

relationship management (CRM) solution designed specifically for companies

in the automotive industry. Seamlessly integrated with Tata Motors’ dealer

management system and SAP back-office applications, Siebel Automotive has

delivered significant benefits across the extended organization, including

improved customer satisfaction, increased revenue and productivity, and

reduced costs.

The Siebel CRM solution enables Tata Motors to gather feedback on products

to improve design or manufacturing quality as well as measure the effectiveness

of marketing campaigns and programmes. The automaker selected Siebel

Automotive because of its partner management capabilities to handle its large

dealer network, the solution's zero-footprint web-based architecture and user-

friendly interface-critical to support thousands of salespeople with various skill

levels.

Improved demand forecasting, planning, logistics management, and

inventory management

Overall reduction in quality-related costs due to faster product

performance feedback

Improved workflow and escalation of customer grievances for faster

resolution

Increased revenue growth from both higher vehicle sales and a rise

in the company's after-sales parts business

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Limitations of the Study

Since the road to improvement is never ending, so this study also suffers

from certain limitations. Some of them are as follows:

Because of illiteracy, it was a time consuming method in which

continuous guidance was required.

Questionnaire method involves some uncertainty of response. Co-

operation on the part of informants, in some cases, was difficult to

presume.

It is possible that the information supplied by the informants may be

incorrect. So, the study may lack accuracy.

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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 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.

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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 hasbuilt 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.

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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 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. These include the Fiat Petra Diesel, Ford

Fusion, Ford Mondeo, Hyundai Terracan, Maruti Esteem Diesel, Maruti Suzuki

Grand Vitara, Maruti Zen Diesel, and Opel Corsa Sail. TNS has a global

network spanning 70 countries and is listed on the London Stock Exchange.

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.

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Good Technology

Uniform Pricing

Good Strength

More Coverage Area

Frequent /Regular Product Launch

Market Leader (with 47% share)

Oriented Driven Company

More Product Offering

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

Cheap & reliable quality

AREAS FOR IMPOVEMENT / RECOMMENDATION

Facade/Quality of Dealership should be improve

Uniform of Sales Executives

Proper visiting cards should be available to the executives

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Mostly dealers don’t have their specific website

All Japanese 5’s concept (Seiro, Sieton, Sciso, Seioetse, Shitsuke)

should be put into practice at Dealership

Maruti should regard as generous discount offers during Festival

Season like Navratra, Dusshera, and Diwali to gear-up their sales

Maruti should advertise in Sports because sports are increasingly

cutting into the share of mass entertainment channels

Maruti can start Money Bond Scheme instead of giving Cash

Discount with more value. Customers eligible for an income bond,

encashable after a 15year period.

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BIBLOGRAPHY

Reference Books, Journals, Newspaper, Web Sites, Reports, etc are to be listed, out here

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

www.google.com

www.yahoo.com

www.maruti.com

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