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

1

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
2

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 nonunionised 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).
3

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 Shareholders 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 16bit 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.

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

AWARDS 2005 Number one in JD Power SSI for the second consecutive year Number one in JD Power CSI for the sixth time in a row the only car to win it so many times M800, WagonR and Swift topped their segments in the TNS Total Customer Satisfaction Study Leadership in the JD Power Initial Quality Study - Alto number one in its segment for the 2nd time in a row, Esteem number one in its segment for the 3rd year in a row, Swift number one in the premium compact segment WagonR and Esteem top their segments in the JD Power APEAL study TNS ranks Maruti 4th in the Corporate Reputation Strength (CSR) study (#1 in Auto sector)-Feb 05 Maruti bagged the "Manufacturer of the year" award from Autocar-CNBC ( 2nd time in a row)-Feb 05 First Indian car manufacturer to reach 5 million vehicles sales Business World ranks Maruti among top five most respected companies in India-Oct 04 Maruti ranked among top ten (Rank7) greenest companies in India by Business Today - Sep '04 2004 Maruti Suzuki was No. 1 in Customer atisfaction, No. 1 in
6

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 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
7

1998 CII's Business Excellence Award 1996 Maruti wins INSSAN award for "Excellence in Suggestion Scheme" Awarded the Star Trading House status by Ministry of Commerce 1994-95 Engineering Exports Promotion Council's award for export performance 1994 Best Canteen award among Haryana Industries as part of employee welfare 1992-93 Engineering Exports Promotion Council's award for export performance 1991-92 Engineering Exports Promotion Council's award for export performance

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 midsize 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
9

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 inservice 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

10

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, exchangeMaruti 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

11

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.
12

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.

13

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 Marutis 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.

14

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
15

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.

16

The starting point for understanding the buyer is the stimulus-response model shown below Market ing stimuli Other stimuli Buyer's Character istics Cultural Social Personal Psycholog ical Buyer's decision process Problem recognition Information search Evaluation decision Postpurchase behavior Buyer's decisions Product choice Brand choice Dealer choice Purchase timing Purchase amount

Product Economi c Price Place Promoti Political on Cultural Technolo gical

Stages in Buying Decision Process Need recogniti on Informati on search Evaluation of alternatives Purchas e decision Postpurchase behavior

The consumer passes through five stages : Problem recognition information search, evaluation of alternatives purchase decision and postpurchase 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
17

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 selfconcept Psychologi cal Motivation Perception Learning Beliefs and attitudes Buyer

18

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.
19

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.

20

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.

21

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?
22

 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?"

23

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

24

Comparison of Automobile And Consumer Durable At Dealership Level S.No Attributes Automobile Consumer Durables 1 Turnover 2 Margin Penetration 3 Level Training of Sales 4 Executives High 8%-12% More in small or large towns or cities Executives get Training after every specific period Co->Dealer>Customer Low 2%-4% More in Rural areas or in cities also

As such no training Co->Distributor>Dealer >Customer Depends on Dealer To Dealer Only Sales man is there to serve the customer

5 Supply-Chain Discount 6 Margin

Cartel Proper well organized

7 CSR

8 ASS Brand 9 Association

Customer have to go at Customer get 3free manufactured service level Customer first choice is more pertinent Customer can change his or her choice

25

10 Payment Post-Sales 11 Follow UP Buying 12 Procedure 13 Database Brand 14 Transition

Instantaneous Payment More Customer can wait for new model Large Single-Tier

More focus on Finance & Installment Very Less Instant buying Few Multi-Tier

Parent Company & dealer both give Only from 15 Advertisement advertisement Parent Company Loyality 16 Programs Customer Satisfaction 17 Index 18 Promotion Customer 19 Retention Yes Well- Defined & Organized Free Service Camps More Only free service which customer can extend upto 4 years(first 2yr are free) No

None None Very Less

20 Maintenance

Annual Maintenance Contract (AMC)

26

OBJECTIVE OF THE COMPANY

Marutis marketing objective is to continually offer the customer new products and services that: Reduce the customers cost of ownership of their cars; and anticipate and address the customers 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.

27

PRODUCTS & PRICES

Rate this car : MARUTI SUZUKI 800 Rs. 2.26 - Rs. 2.55 lakhs Ex-Showroom Price in Mumbai

Maruti Suzuki 800 was launched in 1983 in the Indian market. This compact hatchback from Maruti Suzuki is one of the largest selling passenger car models. All new Maruti Suzuki 800 is the favourite vehicle of the average Indian customers. Its high mileage and excellent performance makes it a perfect vehicle for India. With a low price tag, the Maruti 800 becomes an affordable vehicle for the middle class buyers.

Rate this car : MARUTI SUZUKI OMNI Rs. 2.38 - Rs. 2.92 lakhs Ex-Showroom Price in Mumbai

28

Maruti Suzuki Omni is a multi-utility van, which is perfect for Indian families. Being 5-seater, this van caters to the travelling needs of the family whether it is an outing or a picnic. The van also has enough space to carry luggage. Apart from petrol version, the Omni is also introduced in CNG variant. Although, the Omni is not much stylish but it scores high in terms of mileage and performance.

Rate this car : MARUTI SUZUKI ALTO 800 Rs. 2.63 - Rs. 3.81 lakhs Ex-Showroom Price in Mumbai Get Dealer On Road Price Maruti Suzuki Alto 800 happens to be a replacement model for the iconic Maruti 800 city car. The cute Alto 800 flaunts a coming-of-age character and looks fresh with its neat curves and designing philosophy. Alto 800 is more spacious than its previous generation model, which has made it a hit in the market.

Rate this car :

29

MARUTI SUZUKI EECO Rs. 3.29 - Rs. 4.39 lakhs Ex-Showroom Price in Mumbai Get Dealer On Road Price Maruti Suzuki Eeco was launched by the largest car manufacturer of India to replace Versa. Both petrol and CNG models of Maruti Suzuki Eeco are available in India. Spacious cabin and high fuel economy are the highlighting USP of the Eeco. Compiling all safety norms, the Eeco assures safe driving. In order to make Eeco a safe vehicle, ventilated disc brakes are provided in the front whereas drum brakes are added in the rear.

Rate this car : 3.83 from 254 submission(s) MARUTI SUZUKI ZEN ESTILO Rs. 3.63 - Rs. 4.6 lakhs Ex-Showroom Price in Mumbai Get Dealer On Road Price Maruti Suzuki Zen Estilo is a replacement of the Maruti Zen, which was quite popular few years back. The Zen Estilo comes with new bumpers, new headlights, and new fog lights. Advanced 'detent pin' gear shift and select mechanism are the highlighting features of the new Estilo. As far as safety is concerned, the car now has advanced arrangements like Electronic Brake Distribution and Driver side SRS Airbag & Front.

30

Rate this car : MARUTI SUZUKI ALTO Rs. 2.62 - Rs. 3.65 lakhs Ex-Showroom Price in Mumbai Get Dealer On Road Price Maruti Suzuki Alto is Indias largest selling car, belongs to the hatchback segment. This car attained an important position in the Indian market due to its high mileage and low price tag. Several accolades and prices come under the belt of Alto. For the fuel efficiency campaign, Auto attained the EFFIE award in 2007. Other awards received by Alto are BS Motoring Car of the year 2001, and Overdrive Car of the year 2002.

Rate this car : MARUTI SUZUKI WAGON R 1.0 Rs. 3.74 - Rs. 4.68 lakhs Ex-Showroom Price in Mumbai Get Dealer On Road Price Maruti Suzuki Wagon R is one of the most poplar hatchbacks from Maruti Suzuki. The car comes in petrol, CNG and LPG variant, which provides enough scope of choice. A diesel variant of the Wagon R will also be introduced in the market. 998 cc, KB-series petrol engine is mated to the
31

five speed manual transmission gearbox of this hatchback, which helps it deliver excellent performance. It has received the prestigious J.D. Power Asia Pacific India Vehicle Dependability award in 2009.

Rate this car : MARUTI SUZUKI A STAR Rs. 4.03 - Rs. 4.88 lakhs Ex-Showroom Price in Mumbai Get Dealer On Road Price Maruti Suzuki A Star, the small car from the largest passenger vehicle manufacturer has good market rating. The hatchback is not only stylish but is spacious too. Apart from higher ground clearance, the A-Star has advanced braking and suspension system. At UTVi Autocar Awards, Maruti A-Star received Best Small Car of the Year. Zig Wheels also declared the A-Star as the Car of the Year.

Rate this car : MARUTI SUZUKI RITZ Rs. 4.6 - Rs. 6.69 lakhs Ex-Showroom Price in Mumbai Maruti Suzuki Ritz is a stylish and compact hatchback, which has been introduced in the Indian market in both petrol and diesel versions. Maruti
32

Suzuki has provided a dynamic and classic looks to the exterior of this vehicle. Soon after its launch, the hatchback has received many awards such as Car of the Year 2010- Motoring, Autobuild Compact Car of the year 2010, and Autocar India Premium Hatchback of the Year 2010.

Rate this car : MARUTI SUZUKI SWIFT Rs. 4.75 - Rs. 7.23 lakhs Ex-Showroom Price in Mumbai Get Dealer On Road Price Maruti Suzuki Swift has been introduced in India in 2005 in the hatchback segment of the Indian Market. Available in petrol and diesel variants, Swift offers higher mileage. Sporty looks and elegant exterior makes this car a head turner. It has a powerful engine under its hood, which generates high power. In Segment B, Swift received the Frost & Sullivan 2010 Aspirational Car of the Year Award. It has also received the Car of the Year Award from Overdrive.

Rate this car :

33

MARUTI SUZUKI NEW SWIFT DZIRE Rs. 5.22 - Rs. 7.83 lakhs Ex-Showroom Price in Mumbai Get Dealer On Road Price Maruti Suzuki Swift DZire was launched in 2008 in the Indian market. In February 2012, a new Swift DZire has been introduced with more refined interiors and exteriors. Based on Swifts platform, the Swift DZire now has many advanced features. The car has been introduced in the market in both petrol and diesel variants. Mileage of the sedan is quite good for both versions. The diesel engine provides better mileage than the petrol one.

Rate this car : MARUTI SUZUKI GYPSY KING Rs. 5.55 - Rs. 5.86 lakhs Ex-Showroom Price in Mumbai Get Dealer On Road Price Maruti Suzuki Gypsy is one of the most popular vehicles launched by the largest passenger vehicle manufacturer of India. The tough build quality of this MPV helps it deliver excellent performance on all types of terrains. Engine of the MPV is high on thermal conductivity due to which over heating is prevented during hot weather condition. The engine also heats

34

up quickly during cold weather. Gypsy is available only in petrol variants with no diesel engine option.

Rate this car : MARUTI SUZUKI ERTIGA Rs. 6.35 - Rs. 9.21 lakhs Ex-Showroom Price in Mumbai Get Dealer On Road Price Maruti Suzuki Ertiga is the first ever MPV to be launched by Maruti. The MPV has been introduced in both diesel and petrol variants. Designed in Japan by Suzuki, this MPV is made purely for the Indian market. Based on Maruti Swifts platform, the Ertiga is made of light weight material. In terms of safety, the new MPV scores high. It has Antilock Braking System (ABS) with EBD and brake assist.

Rate this car : MARUTI SUZUKI SX4 Rs. 7.42 - Rs. 10.36 lakhs Ex-Showroom Price in Mumbai
35

Get Dealer On Road Price Maruti Suzuki SX4 is the popular sedan, which has been modified from time-to time. A new variant of the SX4 has been launched in February 2011 with better interiors. The new and improved SX4 meets the meets latest BS IV emission norms. Apart from petrol and diesel variants, the SX4 also has a CNG variant. The car has many prestigious awards under its belt such as CNBC-TV18 Autocar Auto Awards (2008), NDTV profit car and bike awards (2008), and J.D. Power Asia Pacific India Vehicle Dependability (2009).

Rate this car : MARUTI SUZUKI KIZASHI Rs. 17.18 - Rs. 18.22 lakhs Ex-Showroom Price in Mumbai Get Dealer On Road Price Maruti Suzuki Kizashi is the sports sedan, which was showcased first at the 2007 Frankfurt Motor Show. Displayed at the Delhi Auto Expo 2010, the Kizashi gained huge appreciation from the customers. Front view of the car is quite sporty, and the look is enhanced by the jewel like projector headlamps and regal honeycomb grille. The car also has advanced safety features such as Electric Stability Program (ESP), Electronic Brake-force
36

distribution (EBD), and Anti-lock Brake System (ABS), which makes it safe.

Rate this car : MARUTI SUZUKI GRAND VITARA Rs. 24.56 - Rs. 26.63 lakhs Ex-Showroom Price in Mumbai Get Dealer On Road Price Maruti Suzuki Grand Vitara is the powerful SUV, which attracts the offroading customers with its robust look and dynamic exterior features. The 2.4 litre, 4 cylinder engine of this vehicle delivers high power and torque. Apart from its aggressive and muscular looks, it has stylish interiors. Several comfort features are added in the car keeping in mind the preference of the customers. The Grand Vitara is only available in petrol version in both automatic and manual transmission options.

UPCOMING MARUTI SUZUKI CARS IN INDIA

37

MARUTI SUZUKI JIMNY Overall Evaluation of the Maruti Suzuki Jimny The Maruti Suzuki Jimny is an entry level sports utility vehicle(SUV) that is expected to hit the Indian roads by the end of ...read about upcoming Maruti Suzuki Jimny Expected: End 2013,

MARUTI SUZUKI GRAND VITARA FACELIFT

Maruti Suzuki India Private Limited had launched its premium SUV Grand Vitara in the Indian market but the model is yet to generate volumes for the company as MSIL is better ...read about upcoming Maruti Suzuki Grand Vitara Facelift Expected: Mid 2013,

MARUTI SUZUKI CERVO

Latest update on Maruti Suzuki Cervo 4th June 2012 Maruti Suzuki Cervo, the much awaited compact hatchback will be launched in the festive season. The largest car ...read about upcoming Maruti Suzuki Cervo Expected: End 2013,

38

MARUTI SUZUKI ERTIGA CNG

Maruti Suzuki India Limited, the countrys largest passenger car maker, has tasted some glorious success with its Ertiga Multi Purpose Vehicle (MPV) in the domestic auto ...read about upcoming Maruti Suzuki Ertiga CNG Expected: mid 2013,

MARUTI SUZUKI PALETTE

Maruti Suzuki is looking towards new launches to reinvigorate its dwindling sales figures and the New Delhi Auto Expo could not have come at a better time. At this monumentous ...read about upcoming Maruti Suzuki Palette Expected: 2013,

39

MARUTI SUZUKI SWIFT SPORT

One of Asia's leading car makers, Suzuki Motor Corporation, has been conventional in approach by rolling out fuel efficient cars in various segments. In the quest to ...read about upcoming Maruti Suzuki Swift Sport Expected: End 2013,

MARUTI SUZUKI MR WAGON Maruti Suzuki, India's leading small car manufacturer, is looking to turn its fortunes around with a flurry of new launches. Among major models, the company is expected to ...read about upcoming Maruti Suzuki MR Wagon Expected: 2013,

MARUTI SUZUKI XA ALPHA

The XA Alpha concept Sports Utility Vehicle was introduced by Indias leading car maker Maruti Suzuki during the 2012 New Delhi Auto Expo held in January. With this ...read about upcoming Maruti Suzuki XA Alpha Expected: Early 2014
40

MARUTI SUZUKI SOLIO

Showcased for the first time in India at the 2012 New Delhi Auto Expo, the Maruti Suzuki Solio is a popular hatchback model already present in Japan. Unlike siblings Palette ...read about upcoming Maruti Suzuki Solio Expected: End 2013,

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
41

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--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.

42

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.

43

THE PRODUCTION PROCESS AT MARUTI

STEEL COILS

BLANKING

PRESSING

WELDING

PAINTING

FROM VENDOR S

ASSEMBLY

FROM VENDOR S FROM VENDOR S

VEHICLE INSPECTION

TEST RUN

SUPPLY & DISPATCH

44

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 Marutis 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 MiddleEast 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.

45

46

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 Suzukis expertise in all aspects of small car technology and design, with respect to their products, their manufacturing processes and business practices, the development of their supply chain and the training of their personnel. Extensive product portfolio: Their diverse product range includes cars in segments A, B and C, and utility vehicles. They manufactured five out of the ten models that were sold in the combined A and B segments in India in fiscal 2002. They are the only manufacturer of cars in segment A (priced below Rs.300,000) where they have two models, the Maruti 800 and the Omni. The Maruti 800 has been the largest selling car in India for several years, and continued to have the highest sales volumes of any model, with a market share of 25.3%. The Omni, a versatile vehicle that can seat more passengers than 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.
47

Quality products: In November 2001, they were one of the first automobile manufacturers in the world to receive the ISO 9001:2000 certification. They began to export products in 1988, primarily in order to benchmark our products against international quality standards. They have exported products to approximately 70 countries, including countries in Western Europe. Their products for export are manufactured using the same assembly line as our products for the domestic market. Extensive sales and service network: They believe that they have the largest network of dealers and service centers amongst car manufacturers in India. As of March 31, 2003, we had 178 authorized dealers with 243 sales outlets in 161 cities. They estimate their car parc to be in excess of 3.5 million 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
48

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.

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 Suzukis 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 Suzukis 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.
49

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

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
50

trained at Suzukis 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.

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.

51

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 Suzukis 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. Continue to reduce costs to offer more competitive products:
52

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 consumers 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.

53

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 welltrained 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
54

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
55

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

56

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 dealers contact with the customer and increase the revenue generated from sale of spares, accessories and automobilerelated 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.

57

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 onestop 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 youll 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

58

insurance solutions to every type of car consumer. Then, finally, there is N2N, which offers fleet related solutions.

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. HMILs 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 HMILs 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 HMCs global export hub for compact cars. Apart
59

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 companys greater focus on the quality of its after-sales service, HMILs 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.

60

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

61

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 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
62

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.

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 dont believe on targeting competitors 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
63

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 dont have time 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.

64

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.

65

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
66

brands. To achieve these related objectives, companies must set an aggressive goal -deliver the best customer experience in the automotive industry.

Difficult dealer relationships and a lack of dealer collaboration As the consumer 's primary touch point ,the dealer network is a critical component of customer-facing operations. Therefore, the integration of the dealer network is absolutely essential to improving the quality of the customer experience. Only with an infrastructure that enables the effective flow of information to and from dealers can companies create a complete view of their customers. 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
67

right supporting infrastructure, enabling car companies to fully leverage each customer relationship through exceptional customer service, efficient lead generation and management, and effective promotions and campaigns. In addition, global automotive enterprises operate a wide variety of IT systems in their various business units and functional groups. Rationalizing these systems offers significant cost savings.

Lack of effective information sharing - Car companies must integrate global operations in order to achieve the benefits of consolidation -cost reduction, effective communication, and true integration of core competencies. In addition, internal alignment between business units and functional groups is required to create a unified view of consumers, products, and services. Currently, each business unit, functional group, and brand operates through independent systems, programs, and touch points. As a result, there is limited synergy across the ecosystem, leading to significant inefficiencies, lack of coordination, and most important, an inability to maximize "share of wallet "from every customer through welltargeted 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
68

capability to manage a variety of access rules and to accommodate legal restrictions that can change very quickly. The trust required for successful collaboration between groups in the automotive enterprise must be built by demonstrating that customer information can be shared while observing these complex requirements.

Difficulty managing employee relationships - In today 's fastpaced 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.

69

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 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.
70

Through Internet, E-mail usage, communication media like telephone and mail facility this mode of communication is possible to a great extent. ITCs 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 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, Archies and Hallmark. While Archies has licensing agreements with international greetings brands

71

FINDINGS FROM SURVEY

Total Number of Respondents: 15 Officials Number of Respondents 5 2 2 5 1

Maruti Udyog Limited Hyundai Motors India Ltd General Motors Tata Motors Ford India Limited

Do you face problems in maintaining good and effective relationships with customers? Quite Maruti Limited Hyundai Frequently Udyog 2 Motors 3 Frequently 3 2 2 2 1 Average Rarely -

India Ltd General Motors Tata Motors Ford India Limited

72

Rarely 0%

Average 0%

Quite Frequently 33%

Frequently 67%

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 companys 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

73

ownership experience, the new initiatives enable them to offer Maruti owners 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-ofthe-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 companys 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.
74

 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?

Maruti Udyog Limited Hyundai Motors India Ltd General Motors Tata Motors Ford India Limited

Yes 5 2 2 5 1

No -

75

No 0%

Yes 100%

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 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
76

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 unique cluster of services, designed to compliment every aspect of owning a car and ensuring complete peace of mind. So be it emergency
77

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.

78

How well does your company customize its products and services based on what it knows about its customers?

Maruti Udyog Limited Hyundai Motors India Ltd General Motors Tata Motors Ford India Limited

Highly Customer centric 5 2 2 5 1

Somewhat Customer centric -

Not Customer centric -

Somewhat Customer centric 0%

Not Customer centric 0%

Highly Customer centric 100%

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.

79

Does the company have established quality assurance processes?

Maruti Udyog Limited Hyundai Motors India Ltd General Motors Tata Motors Ford India Limited

Yes 5 2 2 5 1

No -

No 0%

Yes 100%

Findings: According to all the respondents their respective companies have established quality assurance processes.

80

Does the company take customers' needs into consideration when selecting and implementing technology? Yes 5 2 2 5 1 No -

Maruti Udyog Limited Hyundai Motors India Ltd General Motors Tata Motors Ford India Limited

No 0%

Yes 100%

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 volume player in the segment. The variants are decided after considerable research. They have been targeted at different segments and they presently
81

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?

Maruti Udyog Limited Hyundai Motors India Ltd General Motors Tata Motors Ford India Limited
No 0%

Yes 5 2 2 5 1

No -

Yes 100%

82

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? Maruti Udyog Limited Hyundai Motors India Ltd General Motors Tata Motors Ford India Limited Yes 5 2 2 5 1 No -

No 0%

Yes 100%

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
83

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 4 2 2 3 1 Somewhat Effective 1 2 Not Effective -

Maruti Udyog Limited Hyundai Motors India Ltd General Motors Tata Motors Ford Limited India

Somewhat effective 20%

Not Effective 0%

Highly Effective 80%

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.
84

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
85

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 customers dynamic lifestyle, products which have progressive styling and are great to drive. Vehicle quality concern Design and general comments Negative sales and service

86

 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 worlds 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
87

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
88

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 companys 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 Low Maruti Udyog Limited 3 2 Hyundai Motors India Ltd General Motors Tata Motors Ford India Limited 2 2 2 1 1 2 --

89

Very Low 13%

Substantial 20%

Very High 67%

Findings: All the 67%(10) responding officials of the Automobile Majors customer needs have a very high influence on companys 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 companys 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'. 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
90

be on being consumer-centric. Technology solutions as applied to various frontend 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 consumersand identify those ready to move into four-wheeler purchases. Ultimately, CRM is all about value enhancement for the organisation. 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
91

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 userfriendly 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

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.
92

 Questionnaire method involves some uncertainty of response. Cooperation 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.

93

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 dont 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.

94

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.

95

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.

96

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 firsttime 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.

97

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
98

Mostly dealers dont have their specific website All Japanese 5s 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.

99

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

100