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Project Report

ON

MARUTI UDYOG LIMTED

Submitted By

Project Guide

Submitted to
ACKNOWLEDGEMENTS

I owe my sincere thanks and gratitude to Mr. XYZ who inspired me

by his able guidance and was a constant guiding light

during the course of project study.

The support and knowledge provided by him has been a great

value addition for me and will go a long way in building a

promising career.

Last but not least, I am also thankful to all the respondents of my

survey without whom the project would not have been completed

successfully.

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INTRODUCTION

MARUTI UDYPG 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

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• Aligning and fully involving all our employees, suppliers and

dealers to face competition

• Maximising Shareholder's value

• Being a responsible corporate citizen

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

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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 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

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Company are discussed with the Union. The Sahyog Samiti, a

collection of representatives of non-unionised employees, training

programmes in Japan, Quality Circles, productivity-linked incentive

schemes, and an ethos of discipline and teamwork, all contribute

to the Maruti culture.

Several measures of performance have made amply clear that

Maruti has established a truly healthy work culture. They have met

all project and performance targets since inception. Their

productivity levels are constantly improving. The Company has had

good labour relations with employees from the very beginning, and

they have been successful in the export market. Yet, the Maruti

culture is one that does not believe in resting on its laurels. They

adhere to the spirit of Kaizen, which states that constant

improvement is always possible. The most basic tenet of

productivity that they hold dear is that " Today should be better

than Yesterday and Tomorrow should be better than Today".

Maruti Udyog Limited (MUL) was established in Feb 1981 through

an Act of Parliament, to meet the growing demand of a personal

mode of transport caused by the lack of an efficient public

transport system.

Suzuki Motor Company was chosen from seven prospective

partners worldwide. This was due not only to their undisputed

leadership in small cars but also to their commitment to actively

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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).

A licence and a Joint Venture agreement was signed between

Government of India and Suzuki Motor Company (now Suzuki Motor

Corporation of Japan) in Oct 1982.

The objectives of MUL then were:

• Modernization of the Indian Automobile Industry.

• Production of fuel-efficient vehicles to conserve scarce

resources.

• Production of large number of motor vehicles, which was

necessary for economic growth.

Core Value

• Customer Obsession

• Fast, Flexible and First Mover

• Innovation and Creativity

• Networking and Partnership

• Openness and Learning

Vision

The leader in the India Automobile Industry, Creating Customer

Delight and Shareholder’s Wealth; A pride of India”

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Technological Advantage

We have introduced the superior 16 * 4 Hypertech engines across

the entire Maruti Suzuki range. This new technology harnesses the

power of a brainy 16-bit computer to a fuel-efficient 4-valve engine

to create optimum engine delivery. This means every Maruti

Suzuki owner gets the ideal combination of power and

performance from his car.

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

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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

50,00,000 vehicles produced by April 2005

55,00,000 vehicles produced by April 2006

60,00,000 vehicles produced by April 2007

65,00,000 vehicles produced by April 2008

75,00,000 vehicles produced by April 2009

85,00,000 vehicles produced by April 2010

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MILESTONES

2005  The fiftieth lakh car rolls out in April, 2005

 Growth in overall sales by 15.8%

2004  New (non A/C) variant of Alto

 Alto becomes India's new best selling car

 LPG variant of 'Omni Cargo'

 Versa 5-seater, a new variant

 Baleno LXi, a new variant

 Maruti closed the financial year 2003-04 with an


annual sale of 472122 units, the highest ever since
the company began operations 20 years ago

2003  New Suzuki Grand Vitara XL-7

 Redesigned and all-new Zen

 New upgraded WagonR

 Enters into partnership with State Bank of India

 Production of 4 millionth vehicle. Listed on BSE and


NSE after a public issue oversubscribed 10 times

2002  WagonR Pride

 Esteem Diesel. All other variants upgraded

 Maruti Insurance. Two new subsidiaries started:


Maruti Insurance Distributor Services and Maruti
Insurance Brokers Limited

 Alto Spin LXi, with electronic power steering

 Special edition of Maruti 800, India’s first colour-

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coordinated car

 Maruti True value in Mumbai

 Maruti Finance in Mumbai with 10 finance companies

 Suzuki Motor Corporation (SMC) increases its stake in


Maruti to 54.2 percent

2001  Zen LXi

 Maruti True Value launched in Bangalore and Delhi

 Maruti Versa, India’s first luxury MPV

 Alto Spin LXi, with electronic power steering

 Alto Vxi

 Customer information centers launched in Hyderabad,


Bangalore and Chennai

 Launch of versa

2000  First car company in India to launch a Call Center

 New Alto

 Altura, a luxury estate car

 IDTR (Institute of Driving Training and Research)


launched jointly with the Delhi government to
promote safe driving habits

1999  Maruti 800 EX ( 796cc, hatchback car)

 Zen LX (993cc, hatchback car)

 Zen VXi (993cc, hatchback car with power steering)

 Omni XL ( 796cc, MUV, high roof)

 Baleno (1600cc, 3 Box Car)

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 Wagon R

 Launch of Maruti - Suzuki innovative traffic beat in


Delhi and Chennai as social initiatives

1998  Maruti launches website as part of CRM initiatives

 Zen D (1527 cc diesel, hatchback car)

 Zen VX & Zen VX Automatic

 New (Omni & Omni E) (796cc, MUV)

 Launch of website as part of CRM initiatives

1997  1998 Esteem (1299cc, 3 box car) LX, VX and AX

 New Maruti 800 (796cc,hatchback Car) Standard and


Deluxe

 Produced the 2 millionth vehicle since the


commencement of production

1996  Gypsy (E) (970cc, 4WD 8 seater)

 Omni (E) (796cc, MUV, 8 seater)

 Gypsy King (1298cc, 4WD, off road vehicle)

 Zen Automatic (993cc, hatchback car)

 Esteem 1.3L (1298 cc, 3 box Car)AX

 Launch of 24-hour emergency on-road vehicle service

1995  Esteem 1.3L (1298 cc, 3 box car)VX

 With the launch of second plant, installed capacity


reached 200,000 units

1994  Esteem1.3L (1298cc, 3 box car)LX

 Produced the 1 millionth vehicle since the

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commencement of production

1993  Zen (993cc, hatchback Car), which was later exported


in Europe and elsewhere as the Alto

1992  SMC increases its stake in Maruti to 50 percent

1991  Reaches cumulative indigenisation of 65 percent for


all vehicles produced

1990  Maruti 1000(970cc, 3 box), India’s first contemporary


sedan

1988  Installed capacity increased to 100,000 units

1987  Exported first lot of 500 cars to Hungary

1986  Maruti 800 ( New Model-796cc, hatchback Car)

 Produced 100,000 vehicles (cumulative production)

1985  Launch of Maruti Gypsy (970cc, 4WD off-road vehicle)

1984  Omni, a 796cc MUV

 Installed capacity reached 40,000 units

1983  Maruti 800, a 796 cc hatchback, India’s first


affordable car.

 Production was started under JVA

1982  License and JV agreement signed between Maruti


Udyog Ltd. and SMC of Japan

1981  Maruti Udyog Ltd was incorporated under the


provisions of the Indian Companies Act, 1956

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AWARDS

2005
Number one in JD Power SSI for the second
consecutive year
Number one in JD Power CSI for the sixth time in a row
- the only car to win
it so many times
M800, WagonR and Swift topped their segments in the
TNS Total
Customer Satisfaction Study
Leadership in the JD Power Initial Quality Study - Alto
number one in its
segment for the 2nd time in a row, Esteem number
one in its segment for
the 3rd year in a row, Swift number one in the
premium compact segment
WagonR and Esteem top their segments in the JD
Power APEAL study
TNS ranks Maruti 4th in the Corporate Reputation
Strength (CSR) study
(#1 in Auto sector)-Feb 05
Maruti bagged the "Manufacturer of the year" award
from Autocar-CNBC
( 2nd time in a row)-Feb 05
First Indian car manufacturer to reach 5 million
vehicles sales
Business World ranks Maruti among top five most
respected companies in
India-Oct 04
Maruti ranked among top ten (Rank7) greenest
companies in India by
Business Today - Sep '04

2004
Maruti Suzuki was No. 1 in Customer atisfaction, No. 1
in Sales Satisfaction No.1 in Product Quality (Esteem
and Alto) and No. 1 in Product Appeal (Esteem and
Wagon R)
No. 1 in Total Customer Satisfaction (Maruti 800, Zen
and Alto)
Business World ranked us among the country's five
most respected companies
Business World ranked us the country's most

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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

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

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1992-93
Engineering Exports Promotion Council's award for
export performance

1991-92
Engineering Exports Promotion Council's award for
export performance

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WHY MARUTI SUZUKI

The Quality Advantage

A car is an engineering product, only as good as the

technology used to make it. Actual users of our technology are

saying something very clearly Maruti Suzuki is No.1 in quality:

Maruti Suzuki owners experience fewer problems with their

vehicles than any other can manufacturer in India (J.D. Power IQS

Study 2004). The Alto was chosen No.1 in the premium compact

car segment and the Esteem in the entry level mid-size car

segment across 9 parameters.

The J.D. Power APEAL Study 2004 proclaimed the Wagon R. No.

1 in the premium compact car segment and the Esteem No.1 in

the entry level mid-size car segment. This study measures

owner delight in terms of design, content, layout and

performance of vehicles across 8 parameters.

Maruti Suzuki has a sales network of 307 state-of-the-art

showrooms across 189 cities*, with a workforce of over 6000

trained sales personnel to guide our customers in finding the

right car. Our high sales and customer care standards led us to

achieve the No.1 nameplate in the J.D. Power SSI study 2004.

The SSI study measures sales satisfaction across 6 parameters:

deal received, paperwork, dealer facility, salesperson, delivery

timing and delivery process. Maruti Suzuki has not only got the

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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 network is equipped to service

20,000 vehicles a day. No wonder Maruti Suzuki has been

awarded the No.1 nameplate in customer satisfaction in India

for the fifth year in a row, a feat unprecedented for any

automobile market leader in the world.

In the J.D. Power CSI study 2004, Maruti Suzuki scored the

highest across all 7 parameters: least problems experienced

with vehicle serviced, highest service quality, best in-service

experience, best service delivery, best in-service experience,

most user-friendly service and best service initiation

experience.

In fact, 92% of Maruti Suzuki owners feel that work gets done right

the first time during service. The J.D. Power CSI study 2004 also

reveals that 97% of Maruti Suzuki owners would probable

recommend the same make of vehicle, while 90% owners would

probable repurchase the same make of vehicle.

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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 Suzuki owners would probably

recommend the same make of vehicle, while 90% owners would

probably repurchase the same make of vehicle.

One Stop Shop

At Maruti Suzuki, you will find all your car related needs met under

one roof. Whether it is easy finance, insurance, fleet management

services, exchange- Maruti Suzuki is set to provide a single-window

solution for all your car related needs.

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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

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

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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.

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"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.

ISO 9001:2000

At Maruti, our approach to quality is in keeping with the Japanese

practice--"build it into the product". Technicians themselves

inspect the quality of work. Supervisors educate and instruct

technicians to continually improve productivity and quality. The

movement of quality indicators is reviewed in weekly meetings by

the top management.

In 2001, Maruti Udyog Ltd became one of the first

automobile companies anywhere in the world to get an ISO

9000:2000 certification. AV Belgium, global auditors for

International Organization for Standardisation(ISO), certified Maruti

after a four day long audit, covering varied parameters like

Customer Focussed organisation, Leadership, Involvement of

people, Process approach, System approach to Management,

Continual improvement, etc.

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In May 1995, Maruti got ISO 9002 certification. The audit for

this covered quality assurance in production, installation,

marketing and sales as well as after sales services. We were also

one of the first companies in the world to pioneer ISO 9000

certification for our dealers.

In October 1993, MUL passed the Conformity Of Production

(COP) Audit, which is based on a European Union Directive.

This authenticated our quality systems and testing facilities for

export to Europe.

Their emphasis on total quality has meant that today they are in a

position to guide vendors and dealers in establishing and

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consolidating their individual quality systems. This commitment to

quality has ensured a consistently satisfying product and world-

class sales and after-sales services.

TS16949:2002

A new feather was added recently in Maruti’s cap in the field of

quality when the Quality Management System of its Press Shop &

associated functions (collectively termed as Press Function) got

certification for conformance to the requirements of TS16949:2002

standard.

The need for TS certification of Press Function had its genesis in

the prestigious project that Maruti earned for the supply of

stamped panels to General Motors India for one of its forthcoming

models.

As a part of Quality system requirements, GM requires all its

suppliers to be certified to either ISO TS 16949 or QS 9000.

These standards address Quality System requirements, which are

particularly specific to the automotive industry and requires an

organization to be in compliance with ISO 9000 systems as a basic

requirement. However, whereas QS 9000 would become defunct

and cease to exist after Dec 2006, TS 16949 is going to be the

standard of the future.

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

extension of the ISO 9001:2000 standard that prescribes Quality

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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

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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 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

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first becomes aware of a need for a product or service

to the time when a product is purchased, a brand

selected, and the consumer evaluates the success of

his purchase decides whether to buy that particular

product and / or brand again. It the same time, such

models usually indicate the social and psychological

forces which shape the potential buyer's action at

each stage in the process. The two principal aims of

such model building are the prediction of future

behavior based on measurement of relevant variable

and the explanation of this behavior in terms of

theoretically relevant constructs.

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The starting point for understanding the buyer is the
stimulus-response model shown below

Marketin Other Buyer's Buyer's Buyer's


g stimuli stimuli Characteris decision decisions
tics process

Product Economic Cultural Problem Product choice


recognition
Price Technologi Social Brand choice
cal Information
Place Personal Dealer choice
search
Political
Promotio Psychological Purchase timing
Evaluation
n Cultural decision Purchase
amount
Post-purchase
behavior

Stages in Buying Decision Process

Need Informat Evaluation Purchas Post-


recogniti ion of e purchase
on search alternative decisio behavior
s n

The consumer passes through five stages : Problem


recognition information search, evaluation of
alternatives purchase decision and post-purchase
behavior. Clearly the buying process starts long before
the actual purchase and has consequences long after
the purchase.

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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 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.

Need Recognition

The buying process starts when the buyer recognizes


a problem or need. the buyer senses a difference
between his or her actual. In the former case, one of
the person's normal needs-hunger, thirst, sex-rises to
a threshold level and becomes a drive. From previous
experience, the person has learned how to cope with

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this drive and is motivated toward a class of objects
that will satisfy the drive.

Or a need can be aroused by an external stimulus. A


persons passes a bakery and sees freshly baked bread
that stimulates her hunger; she admires a neighbor's
new car; or she watches a television commercial
advertising a Hawaiian vacation. All these stimuli can
trigger a problem or need.

The marketer needs to identify the circumstances that


trigger a particular need. in Linda Brown's case she
might answer that her "buy season" was peaking or
that she was impressed with a coworker's laptop. By
gathering information from a number of consumers,
the marketer can identify the most frequent stimuli
that spark an interest in a product category. The
marketer can then develop marketing strategies that
trigger consumer interest.

Information search

An aroused consumer will be inclined to search for


more information. We can distinguish between two
levels. The milder search state is called heightened
attention. Here Linda Brown simply becomes more
receptive to information about computers. She pays

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attention to computer ads, computers purchase by
friends, and conversation about computers.

Or Linda may go into active information search where


she looks for reading material, phones friends and
engages in other activities to learn about computers.

Consumer information sources fall into four groups :

• Personal source : Family, friends, neighbors,


acquaintances

• Commercial sources : Advertising, salespersons,


dealers, packaging displays

• Public sources : Mass media, consumer-rating


organizations

• Experiential sources : Handling examining using the


product.

Evaluation of Alternatives

How does the consumer process the competitive


brand information and make a final judgment of
value? It turns out that there is no simple and single
evaluation process used by all consumers or even by
one consumer in all buying situations. There are
several decision evaluation process. Most current
models of the consumer evaluation process are

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cognitively processes. Most current models of the
consumer evaluation process are cognitively oriented-
that is, they see the consumer as forming product
judgments largely on a conscious and rational basis.

Consumers differ as to which product attributes they


see as relevant or salient. They will pay the most
attention to the ones that will deliver the sought
benefits. The market for a product can often a be
segmented according to the attributes that are salient
to different consumer groups.

The most salient attributes may not be the most


important ones. Some may be salient because the
consumer was recently exposed to an ad mentioning
them. Furthermore, non-salient attributes might
include some that the consumer forgot but whose
importance would be recognized when mentioned.

The consumer is likely to develop a set of brand


beliefs about where each brand stands on each
attribute. The brand beliefs make up the brand image.

The consumer's brand beliefs will vary with his or her


experiences and the effected of selective perception,
selective distortion and selective retention.

Purchase decision

33
In the evaluation stage, the consumer forms
preferences among the brands in the choice set. The
consumer may also form a purchase intention to buy
the most preferred brand. However, two factors can
intervene between the purchase intention and the
purchase decision. These factor are shown in below.

The first factor is the attitudes of others. Suppose


Linda Brown's close colleague recommends strongly
that Linda should buy the lowest-priced computer (D).
As a result, Linda's "purchase probability" for compuer
A will be somewhat reduced and for computer D will
be somewhat increased. The extent to which another
person's attitude reduces one's preferred alternative
depends upon two things :

1. The intensity of the other person's negative attitude


towards the consumer's preferred alternative and

2. The consumer's motivation to comply with the other


person's wishes.

Purchase intention is also influenced by unanticipated


situational factors. The consumer forms a purchase
intention on the basis of such factors as expected
family income expected price and expected product
benefits. When the consumer is about to act,

34
unanticipated situational factors may erupt to change
the purchase intention. Linda Brown might lose her job
some other purchase might become more urgent a
friend might report disappointment in that computer
brand, or a store salesperson may affect her
negatively.

Attitude of
others

Evaluatio Purch Purcha


n of ase se
alternativ intenti decisio
e on n

Unanticipate
d situational
factors

Post-purchase behavior

After purchasing a product, a consumer may detect a


flaw. Some buyers will not want the flawed product,
others will be indifferent to the flaw, and some may
even see the flaw as enhancing the value of the
product. Some flaws can be dangerous to consumers.
Companies making automobiles, toys, and
pharmaceuticals must quickly recall any product that
has the slightest chance of injuring users.

35
Post-purchase Action

The consumer's satisfaction or dissatisfaction with the


product will influence subsequent behavior. If the
consumer is satisfied, he or she will exhibit a higher
probability of purchasing the product again. For
example, 75% of Toyata buyers were highly satisfied
and about 75% intended to buy a Toyata again; 35%
of Chevrolet buyers were highly satisfied and about
35% intended to buy a Chevrolet again.

The satisfied customer will also tend to say good


things about the brand to others. Marketers say: "Our
best advertisement is a satisfied customer.

36
MAJOR FACTORS INFLUENCING BUYING
BEHAVIOR

Cultural

Social

Culture Reference Personal


group
Subculture
Family Age and life- Psychological
Social Class cycle stage
Roles and Motivation
statuses Occupation
Economic Perception
circumstances Learning
Buyer
Lifestyle Beliefs and
Personality attitudes
and self-
concept

37
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

38
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.

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; 4) the consequences for individuals and society of
adopting an innovation; and 5) communication channels used in
the adoption process.

39
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.

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

in on your target market.

40
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?

41
• 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

It shows how the different parts of the business contribute to


achieving profitable sales levels. Target Marketing is both a
planning and an action tool. The process is straightforward.
Plan what needs to be done, then implement the specific
activities needed to turn these plans into reality. An overall
market environment made up of unlimited specialty wants and
needs has developed with markets made up of smaller
numbers of target customers. Smaller firms can take
advantage of this market shift by specializing in addressing the
needs of very precisely defined, smaller target markets. Large
firms may be less capable of providing such specialty
products/services because they need volume operations to
support large over the target customers themselves help to
define much of the marketing approach. Successful target
marketing requires a certain attitude or philosophy towards
the business as well as the performance of various activities.

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.

42
• Do not simply throw out everything that you now have and
replace goods or production machinery with completely new
items.
HOWEVER, AS YOU ANALYZE YOUR MARKET AND
CUSTOMER PROFILES, AND SO GAIN AN
UNDERSTANDING OF THEIR WANTS, DESIRES, AND
PERCEIVED NEEDS, YOU CAN BEGIN TO REORIENT YOUR
BUSINESS OVER TIME TO TAKE BEST ADVANTAGE OF
THESE NEW INSIGHTS. CONSIDER BOTH THE SHORT
TERM AND LONG-TERM IMPLICATIONS OF DEVELOPING
AND IMPLEMENTING THE RIGHT TARGET MARKETING
STRATEGY FOR YOUR BUSINESS.

Customer Attitudes

• For a long time, people have believed that advertising


can be used to change people's minds about what they
want. This is an incredibly difficult process at best, and
an extremely expensive one. Because of these two
factors, it is a process that smaller firms simply cannot
afford to pursue. Instead, it is much more productive for
any size firm to tune in to target customer attitudes as
they currently exist. Once they have identified the actual
prevailing attitudes, they can begin to organize company
resources needed to constructively address and satisfy
these attitudes the key question is,

"What are the existing customer attitudes?"

With this as an objective, developing an understanding of


existing customer attitudes becomes essential, and their

43
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.

Why Target Marketing?


The idea is simple enough. Every business has a potential market

out there somewhere within that broad, fuzzy, agglomeration of

persons and organizations that might conceivably be induced to

buy your product, service or merchandise. It is important to note

that because many businesses offer more than one

product/service, they may be shooting at more than one target at

the same time. A good example is an automobile dealership that

sells more than one brand of car.

Target Marketing - Eight Steps

STEP 1: Define the Product/Service

The business has a product or service to offer, in many cases more

than one of each. Each product or service must be carefully

studied to determine what is special about it. It is this unique

combination of product skills and resources that allow a smaller

firm to differentiate itself from its competitors, large or small, and

to identify target market segments that it can serve especially

effectively, frequently, far more successfully than larger firms with

more resources, who are less focused!

STEP 2: What Wants/Needs are satisfied

44
BEFORE THE FIRM CAN CONSIDER WHOSE WANTS OR
NEEDS ARE BEST SATISFIED BY ITS PRODUCT OR
SERVICE, IT MUST DETERMINE HOW THE PRODUCT OR
SERVICE CAN SATISFY. WHAT NEEDS DOES IT MEET?
WHAT WANTS CAN IT FULFILL? THIS STEP PERMITS THE
PRODUCT OR SERVICE TO BE VIEWED FROM A SLIGHTLY
DIFFERENT ANGLE. ANY GIVEN PRODUCT OR SERVICE
WILL PROBABLY SATISFY A VARIETY OF WANTS OR
NEEDS. THE BUSINESS SHOULD LIST ALL IT CAN
POSSIBLE IDENTIFY. THE MORE USEFUL APPLICATIONS
YOU CAN IDENTIFY FOR YOUR PRODUCT/SERVICE, THE
GREATER THE POTENTIAL MARKET DIMENSION.

STEP 3: IDENTIFY MARKET SEGMENTS

At this point, you have considered three important factors; an


identification of the product/service, the product/service
appeal factors, and a rough list of potential customers. We will
now refine the third factor by addressing in more detail, which
might want/need, these products/services

STEP 4: Segment (Differentiate) the Market

Segmenting the market means to divide it into classes or

categories of people or firms based on different sets of factors,

characteristics, or other considerations. It allows an identification

of where these potential customers are and how many of them

there are. Identifying them will lead to the formulation of

productive marketing approaches to these groups There are a

myriad of ways of evaluating a target market, such as economic,

45
Socioeconomic, geographic, demographic (age, sex, race,

education, occupation), lifestyle, and others.

STEP 5: Rank Differentiated Segments

The goal is profit. Therefore, since some of the market will be

easier to sell to at a given price than others, they should be the

primary targets. Again, it is important to have increased

profitability rather than increased sales as the goal of the firm. The

factors affecting profitability are:

  Direct Sales Cost

  Indirect Sales Cost

  Distribution & Logistical Problems

  Pricing (Some segments may be more price sensitive than


others)

  Size of Segment

  Ease of Selling to a Given Segment

  Image of the Firm in the Market

Sales Personnel- Skills and Weaknesses

STEP 6: Evaluate Segment Mixes

The trick now is to assemble them into a pattern that will produce

the greatest return for the least effort in terms of time and money.

46
If a great deal of guesswork has been involved up to this point, the

results may be highly questionable

STEP 7: Formulate Strategy

THE FOCUS IS HOW TO ATTRACT THESE SEGMENTS OR


TARGET MARKETS, SO THAT THEY WILL PURCHASE THE
FIRM'S PRODUCTS/SERVICES AT A LEVEL THAT IS
PROFITABLE FOR THE BUSINESS. THIS PROCESS IS
ALSO REFERRED TO AS MARKET PENETRATION
FORMULATING THE APPROPRIATE STRATEGY CAN BE
BOTH A CREATIVE AND AN ENTERTAINING PROCESS.
THERE ARE ONLY A RELATIVELY LIMITED NUMBER OF
WAYS TO PROMOTE A PRODUCT: PERSONAL SELLING,
ADVERTISING, DIRECT MAIL, AND COMBINATIONS AND
PERMUTATIONS OF THESE.

STEP 8: Execute Strategy

Action is a critical component of any market strategy. Without


action, the analysis and the planning are a wasted effort. The
strategy has been developed, the segments evaluated, the
overall scheme approved and then shelved.

Outline

1. Identifying Potential Customers


2. Conducting Market Research
3. Choosing a Target Market
4. Compiling a Customer Profile
5. Resources

47
Following flowchart briefly describes as to which direction we have

to follow while segmenting the target market

48
Comparison of Automobile And Consumer
Durable
At Dealership Level
S.No Attributes Automobile Consumer Durables
1 Turnover High Low

2 Margin 8%-12% 2%-4%

Penetration More in small or large More in Rural areas


3 Level towns or cities or in cities also

Training of Executives get Training


Sales after every specific
4 Executives period As such no training

Co->Distributor-
5 Supply-Chain Co->Dealer->Customer >Dealer >Customer

Discount Depends on Dealer


6 Margin Cartel To Dealer

Only Sales man is


there to serve the
7 CSR Proper well organized customer

Customer have to go
Customer get 3free at manufactured
8 ASS service level

Customer can
Brand Customer first choice is change his or her
9 Association more pertinent choice

More focus on
Finance &
10 Payment Instantaneous Payment Installment

Post-Sales
11 Follow UP More Very Less

Buying Customer can wait for


12 Procedure new model Instant buying

13 Database Large Few

Brand
14 Transition Single-Tier Multi-Tier

49
Parent Company &
dealer both give Only from Parent
15 Advertisement advertisement Company

Loyality
16 Programs Yes No

Customer
Satisfaction Well- Defined &
17 Index Organized None

18 Promotion Free Service Camps None

Customer
19 Retention More Very Less

Only free service which


customer can extend
upto 4 years(first 2yr are Annual Maintenance
20 Maintenance free) Contract (AMC)

50
MARUTI CULTURE

Their employees are their greatest strength and asset. It is this

underlying philosophy that has moulded their workforce into a

team with common goals and objectives. Their Employee-

Management relationship is therefore characterized by:

• Participative Management.

• Team work & Kaizen.

• Communication and information sharing.

• Open office culture for easy accessibility

To implement this philosophy, they have taken several measures

like a flat organizational structure. There are only three levels of

responsibilities ranging from the Board Of Directors, Division Heads

to Department Heads. Other visible features of this philosophy are

an open office, common uniforms (at all levels), and a common

canteen for all.

This structure ensures better communication and speedy decision

making processes. It also creates an environment that builds trust,

transparency and a sense of belonging amongst employees.

For Investors:

Maruti Udyog Limited, a subsidiary of Suzuki Motor Corporation of

Japan, has been the leader of the Indian car market for about two

decades. Its manufacturing plant, located some 25 km south of

51
New Delhi in Gurgaon, has an installed capacity of 3,50,000 units

per annum, with a capability to produce about half a million

vehicles.

The company has a portfolio of 11 brands, including Maruti 800,

Omni, premium small car Zen, international brands Alto and

WagonR, off-roader Gypsy, mid size Esteem, luxury car Baleno, the

MPV, Versa, Swift and Luxury SUV Grand Vitara XL7.

In recent years, Maruti has made major strides towards its goal of

becoming Suzuki Motor Corporation's R and D hub for Asia. It has

introduced upgraded versions of WagonR Zen and Esteem,

completely designed and styled in-house.

Maruti's contribution as the engine of growth of the Indian auto

industry, indeed its impact on the lifestyle and psyche of an entire

generation of Indian middle class, is widely acknowledged. Its

emotional connect with the customer continues.

Maruti tops customer satisfaction again for sixth year in a row

according to the J.D. Power Asia Pacific 2005 India Customer

Satisfaction Index (CSI) Study.

The company has also ranked highest in India Sales Satisfaction

Study.

The company's quality systems and practices have been rated as a

"benchmark for the automotive industry world-wide" by A V

52
Belgium, global auditors for International Organisation for

Standardisation.

In keeping with its leadership position, Maruti supports safe driving

and traffic management through mass media messages and a

state-of-the art driving training and research institute that it

manages for the Delhi Government.

The company's service businesses including sale and purchase of

pre owned cars (TrueValue), lease and fleet management service

for corporates (N2N), Maruti Insurance and Maruti Finance are now

fully operational.. These initiatives, besides providing total mobility

solutions to customers in a convenient and transparent manner,

have helped improve economic viability of The company's

dealerships.

The company is listed on Bombay Stock Exchange and National

Stock Exchange.

MUL is a Board-managed company. Currently the directors on the

Board are:

• Mr Shinzo Nakanishi, Chairman

• Mr Jagdish Khattar, Managing Director

• Mr Hirofumi Nagao, Joint Managing Director

• Mr Shinichi Takeuchi, Joint Managing Director

• Mr Kinji Saito, Director (Marketing and Sales)

53
• Mr Osamu Suzuki, Director

• Mr R C Bhargava, Director

• Mr S V Bhave, Director

• Mr Kumar Mangalam Birla, Director

• Mr Amal Ganguli, Director

• Ms Pallavi Shroff, Director

• Mr Manvinder Singh Banga, Director

54
PRODUCTS

55
Maruti’s marketing objective is to continually offer the
customer new products and services that:

• Reduce the customer’s cost of ownership of their cars;


and

•  anticipate and address the customer’s needs and


preferences in all aspects and stages of car ownership, to
provide what they refer to as the “360 degree customer
experience.”

They sell ten models with more than 50 variants in segments


A, B, C, and utility vehicle segment of the Indian passenger car
market. Of these, they manufacture nine models and import
the Grand Vitara as a completely built unit from Suzuki in
Japan. Their models and variants are designed to address the
changing demands of the market and are periodically
upgraded in technology, styling and features. To take
advantage of the brand recognition associated with their
products, they retain the brand name of the product through
various stages of product upgrades over time. For example,
the version of the Maruti 800 brand currently sold in the
market is a significantly upgraded version, in terms of
technology, design and styling, of the Maruti 800 launched in
1983.

A Maruti 800
A OMNI
B Zen

56
B Wagon R
B Alto
C Esteem
C Baleno
C Versa
C SWIFT
Utility Vehicle GYPSY KING
Utility Vehicle GRAND VITARA

57
BALENO

DIMENSIONS
Length 4225mm
Width 1690mm
Height 1390mm
Wheelbase 2480mm
Tread Front 1440mm
Rear 1435mm
Ground clearance 170mm
Min. turning radius 4.9mm
WEIGHT
Kerb weight 985 kgs
Gross vehicle weight 1510 kgs
ENGINE
PERFORMANCE
All-Alluminium, 16 Valves SOHC
Engine
Cylinders In-line 4
No. of valves 16
Swept volume 1590 cc
Bore x stroke 75.0 x 90.0 mm
Compression ratio 9.0 ± 0.2:1
Max. Power output PS 91 bhp@5500 rpm
Max. torque 130.5 Nm@3000 rpm
Fuel distribution Multi Point Fuel Injection
Max. speed 175 km/hr
TRANSMISSION
Type 5 forward, all-synchromesh, 1 reverse

58
CHASSIS
Steering Rack and Pinion with hydraulic power
assistance
Brakes Type Vacumm assisted hydraulic
Front Ventilated disc
Rear Drum, leading/trailing
Suspension Front McPherson strut & coil spring with L
shaped lower arm and anti-roll bar
Rear McPherson strut & coil spring with
parallel link arrangement
Tyres 165/80R13(Lxi)
185/65R14 tubelless (Vxi)
CAPACITY
Seating Front 2
Rear 3
Fuel tank volume 51 litres

59
WAGON R

SPECIFICATIONS

DIMENSIONS IN MM
Length 3520
Width 1490 (VXi), 1475 (LX, Lxi)
Height 1660 (without roof rail), 1690 (with roof rail)
Wheelbase 2360
Front Track 1295
Rear Track 1290
Min. Ground clearance 165
WEIGHT IN KG
Kerb Weight 825 (LX, Lxi), 850 (VXi), 840 (AX)
Gross Vehicle Weight 1250 (LX, Lxi, VXi)
CAPACITY
Seating Capacity 5 persons
Fuel Tank Capacity 35 litres
ENGINE
Swept Volume 1061 cc
Engine Type 4 cylinder in line, FC Engine
4 Valves per cylinder, MRFI
Engine Control 32-Bit Electronic Control Module (ECM)
Max. Power, bhp 64@6200rpm

60
Max. Torque, Nm 84@3500rpm
POWER STEERING
Type Electronic power steering (EPS) (Lxi, VXi &AX)
TRANSMISSION
Type Manual (LX, LXi, VXi) – 5 speed, All-synchromesh
with two overdrive gears, Automatic (AX) – 3
speed
SUSPENSION SYSTEM
Front McPherson Strut with torsion type roll control
device
Rear Coil spring, gas-filled shock absorbers with tree-
link rigid axle and isolated trailing arms

61
ESTEEM

SPECIFICATIONS

LX/Lxi/VXi
DIMENSIONS
Overall length 4095 mm
Overall Width 1575 mm
Overall height 1395 mm
Wheelbase 2365 mm
Tread Front 1365 mm
Rear 1340 mm
Ground clearance 170 mm
Turning radius 4.8 m
WEIGHT
Unladen weight 870 kg (LX),
875 kg (Lxi, VXi)
Laden Weight 1315 kg
ENGINE
Type Petrol engine, 4 stroke cycle, allaluminum
Water cooled SOHC
Cylinders In-line 4
No. of Valves 4 / Cylinder
Piston 1298 cc
displacement
Bore X stroke 74 x 75.5 (MM)
Compression 0 9.0 ± .2
ratio
Maximum output 85 bhp @ 6000 rpm
Maximum torque 110 Nm @ 3000 rpm
Engine Control 32-Bit Electronic Control Module (ECM)

62
TRANSMISSION
Manual 5 forward, 1 reverse all-synchromesh
CHASIS
Steering Rack & Pinion
Brakes Front Booster assisted
Ventilated disc
Rear Booster assisted drum
Suspension Front McPherson strut and coil spring
Rear Coil spring
Tyre Size 155/80 R 13 (LX, LXi), 175/70 R 13 (VXi)
(Tuebless)

63
MARUTI 800

SPECIFICATIONS
DIMENSIONS
Overall length 3335 mm
Overall width 1440 mm
Overall height 1405 mm
Wheelbase 2175 mm
Minimum turning radius 4.4 m
Ground clearance 170 mm
Seating capacity 4 persons
WEIGHT
Unladen weight 655 kg (AC BS I), 640 kg (Std. BS I),
665 kg (AC BS II & AC BS III),
650 kg (Std. BS II & Std. BS III)
Laden weight 1000 kg
ENGINE
Type 4 stroke cycle, water cooled SOHC (1C2V)
Number of cylinders 3
Piston displacement 796 cc
Maximum output (Std., 37 bhp at 5000 rpm
AC)
Maximum torque (Std., 59 Nm at 2500 rpm
AC)
POWER TRANSMISSION
Std., AC 4 forward, all synchromesh
1 reverse
STEERING
Steering Rack & pinion
SUSPENSION
Front McPherson strut & coil spring
Rear Coil spring with gas filled shock absorbers
BRAKES
Front Disc
Rear Drum
TYRES
Tyre size Radial 145 / 70 R-12
CAPACITY
Fuel tank capacity 30 liters (BSI), 28 liters (BS II & BS III)

64
NEW ALTO

SPECIFICATION

WEIGHT
Kerb weight ALTO 725 kg
ALTO LX/ALTO Lxi 740 kg
Gross vehicle weight 1165 kg
ENGINE
Swept volume 796cc
FC engine, 4
Engine type
valves
Per cylinder MPFI
No. of cylinders 3
Engine control 32 bit computer
Maximum power 47 bhp @ 6200 rpm
Maximum torque 62 Nm @ 3000 rpm
5 speed, all synchromesh,
Transmission
manual
SUSPENSION
SYSTEM
McPherson Strut with torsion
Front
type anti-roll bar
Coil spring with double
Rear action telescopic shock
absorbers

65
5 persons
Seating
Capacity
Tyre size 145 / 80 R12
Overall length 3495 mm
Overall width 1495 mm
Overall height 1460 mm
Wheelbase 2360 mm
Tread Front 1290 mm
Rear 1290 mm
Minimum turning radius 4.6 m
Ground clearance 160 mm

66
OMNI

SPECIFICATIONS

DIMENSIONS
Length 3370 mm
Width 1410 mm
Height 1640 mm
Wheel base 1840 mm
Ground clearance 165 mm
Turning radius 401 mm
WEIGHT (Kerb
weight)
Omni 5 Seater 785 kg
Omni E 8 Seater 800 kg
ENGING
Type 4 stroke cycle, water cooled
No. of cylinders 3
Piston displacement 796 cc
No. of engine valves 6
POWER

TRANSMISSION
Type Manual, 4 forward, all synchromesh, 1 Reverse

67
SUSPENSION
Front Mc Pherson Strut
Rear Leaf spring with shock absorbers
BRAKES SYSTEM
Front Disc (Booster Assisted
Rear Drum
TYRES
Tyre size 145R 12 LT 6PR (Radial)
CAPACITY
Fuel Tank (Petrol) 36 Litres
SEATING CAPACITY
Seating capacity 5 seater & 8 seater options available
PERFORMANCE
Maximum Power 35 bhp @ 5000 rpm
Maximum Torque 6.1 kgm @ 3000 rpm

68
SWIFT

SPECIFICATION

BODY TYPE
Body type Hatchback
Number of doors 5
Seating capacity 5
ENGINE
Capacity 1298cc
Number of cylinders 4
Number of valves 16
Bore x Stroke 74.0 x 75.5mm
Compression ratio 9.0:1
Maximum power 87bhp@6000rpm
Maximum torque 113Nm@4500rpm
Fuel distribution Multipoint injection
TRANSMISSION
Type 5-speed manual, with synchromesh in all gears, one
reverse
Gear ratios 1 st 3.545
2 nd 1.904
3 rd 1.280
4 th 0.966
5 th 0.757

69
Reverse 3.272
DIMENSIONS
Overall length 3695
Overall width 1690
Overall height 1530
Wheelbase 2390
Track Front 1470
Track Rear 1480
Ground Clearance 170
Minimum turning 4.7 metres
radius
Luggage capacity 232 litres (with seatback raised), 368 litres (with
seatback folded)
CHASIS
Steering Rack & pinion, power assisted
Brakes (front) Ventilated Discs
Brakes (rear) Drums
Suspension (front) Macpherson strut and coil spring
Suspension (rear) Torsion beam and coil spring
WEIGHTS
Kerb weight 980kgs (LXi), 1000kgs (VXi), 1010 kgs (ZXi)
Gross vehicle weight 1415kgs
Maximum speed 160kmph
Fuel tank capacity 43 litres

70
VERSA

SPECIFICATIONS
DIMENSIONS
Overall length 3675 mm
Overall width 1475 mm
Overall height 1905 mm
Wheelbase 2350 mm
Wheel track Front 1280 mm
Rear 1290 mm
Turning radius 4.5 mts
WEIGHT
Unladed weight Versa -930 kg, DX -975 kg, DX2
-985 kg, SDX -975 kg
Laden weight Versa, DX, DX2 & SDX -1585 kg
ENGINE
Type 4 stroke cycle, all-aluminum,
Water cooled SOHC MPFI
Cylinders In-Line 4
No. of valves 4 / Cylinder
Piston 1298 cc
displacement
Bore X stroke 74 X 75.5 (mm)
Compression ratio 9.0 ± 0.2
Maximum output 82 bhp @ 6000 rpm
Maximum torque 102 Nm (10.4 kgm) @ 3000 rpm
TRANSMISSION Manual, 5 forward, all
synchromesh, 1 reverse

71
CHASSIS
Steering Rack & Pinion, Power assisted (DX,
DX2 & SDX)
Brakes Front Booster assisted ventilated disc
Rear Booster assisted drum
Suspension McPherson strut with torsion, Type
roll control device
Rear Coil spring with three link rigid
axle and isolated trailing arms
Tyre size 155/80 R 13 LT
CAPACITY
Seating DX & DX2:8 Persons, SDX:7
persons and Versa : 5 persons
Fuel tank 40 liters

72
ZEN

SPECIFICATION
CAPACITIES LX LXi VXi
Seating Persons 5
Fuel in litres 35
Engine in CC 993
Unladen weight in kgs 765
Laden weight in kgs 1190
Tyres 145 / 80 R
12 (Front &
rear)
PETROL Bharat Stage II
LX LXi VXi
All aluminium engine ° ° °
16 valve, 4 cylinder inline ° ° °
engine
16 bit ECM ° ° °
Multipoint fuel injection ° ° °
Maximum engine output in 60@6000
bhp/rpm
Maximum engine torque in 8@4500
kgm/rpm
Compression ratio 9.4:1
PETROL Bharat
Stage III
LX LXi VXi
All aluminum engine ° ° °
16 valve, 4 cylinder inline ° ° °

73
engine
32 bit ECM ° ° °
Multipoint fuel injection ° ° °
Maximum engine output in 60@6200
bhp/rpm
Maximum engine torque in 8@4500
kgm/rpm
Compression ratio 9.4:1
DIMENSIONS
Overall length 3535mm
Overall width 1495mm
Overall height 1405mm
Wheelbase 2335mm
Ground clearance 165mm

74
PRICES OF MARUTI PRODUCTS

Car market leader Maruti Udyog Limited has announced a marginal

increase in price of certain models. The increase, which comes into

effect from today, varies from 0.17 percent to 1.47 percent.

The price increase is due to rise in input costs and freight

costs, which increased following the rise in oil prices. In this

phase, the company has decided to pass on only a part of the

increase in costs to the customers. There is no change in the

prices of Swift, Zen, Baleno (Vxi) and WagonR (Petrol).

Ex-Showroom Prices in Delhi (in Rs)


Chang
Model New Old Increase e %
M800 Std 191646 191146 500 0.26%
M800 Std Ac 213062 212562 500 0.24%
Alto Std 231585 231085 500 0.22%
Alto Lx 265262 264762 500 0.19%
Alto Lxi 283878 283378 500 0.18%
Omni Cargo LPG 194725 192725 2000 1.04%
Omni Cargo 213706 213206 500 0.23%
Omni (Eight Seater) 221268 220768 500 0.23%
Omni LPG 230388 227388 3000 1.32%
Esteem Lx 445968 444968 1000 0.22%
Esteem Lxi 476223 475223 1000 0.21%
Esteem Vxi 511520 510520 1000 0.20%
Baleno Lxi 576173 575173 1000 0.17%
Versa Dx 433575 432575 1000 0.23%
Versa Dx2 471779 470779 1000 0.21%
Versa Std 360182 359182 1000 0.28%
WagonR Lx LPG 345106 340106 5000 1.47%
WagonR Lxi LPG 373160 368160 5000 1.36%

75
ORGANISATION STRUCTURE AT MUL

Maruti Udyog ltd. Has a flat organisation structure with a

maximum of three levels.

Head office

MD

MFG FIN OTHER

DIRECTOR N CONTROLLER GM DGMS AGMS

GM/ DGMS DGMS AGMS MGRS/AMS

MGRS/AMS MGRS/AM SR GM/EX

ENGINEERS(EX) SR. EX./EX


TRAINEES

J.E. (TRAINEES)

76
NUMBER OF EMPLOYEES AT MARUTI

As on 31-May-06
LW0 0
L02 4
L03 7
L04 128
L05 907
L06 336
L07 130
L08 152
L09 169
L10 91
1924
S0 20
ASUP 29
08(S) 97
09(S) 168
10(S) 72
386
E0 115
L11 358
L12 392
L13 264
MGR 67
1196
1582
FMGR 12
IDPM 0
DPM 99
111
SFMGR1 17
SFMR2 1

OSD/ DDVM 15

DVM 12
ED 3
48
159
3665
12
4
3681
A0 628
AD 34
662

77
THE PRODUCTION PROCESS AT MARUTI

STEEL COILS

BLANKING

PRESSING

WELDING

PAINTING

FROM FROM
VENDOR ASSEMBLY VENDOR
S S

FROM
VEHICLE
VENDOR
INSPECTION
S

TEST RUN

SUPPLY &
DISPATCH

78
Press Shop: Their press shop has five transfer presses and two

blanking lines. In the press shop, steel coils are cut to the

required size and panels are prepared by pressing them

between various die sets such as doors, roofs and bonnet. An

anti-rust coat is applied at this stage. They also have in-house

capability and the necessary technical knowledge for the

design and manufacture of medium-size press dies.

Weld Shop: They have three welding shops with 122 six-axis

robots and 25 in-house manufactured two-to-four axis robots.

In this shop, various press metal components manufactured in

the previous stage are spot-welded together to form the body

shell. Various parts such as the floor panel, side panel, doors

and bonnet are sub-assembled in this shop. Subsequently, the

assembled parts undergo final welding. The welded body is

sent to the paint shop through a conveyor.

Paint Shop: They have three paint shops, within one of which

the final outer body is fully painted by robots. In the paint

shop, the body undergoes various pre-treatment and electro

deposition painting processes to provide a high corrosion

resistance to the body. The car body is given an intermediate

or primer coat before applying the stoving topcoat paint. The

intermediate and the final coat are applied by using automatic

79
electrostatic spray-painting machines (micro bells) and robots,

followed by a baking process.

Assembly Shop: They have highly flexible assembly lines,

which can simultaneously handle a large number of variants as

well as adapt to sequence changes. The painted bodies

proceed for final assembly in three stages. The first stage is

the trim line wherein various components such as roof head

lining, windshield glass and interior trim components are fitted.

Thereafter, the car is transferred to an overhead conveyor, the

chassis line, wherein components such as the engine, gearbox

and front and rear axles are assembled on the underbody. The

vehicle is then lowered to the final line on its own wheels and

here components and parts such as seats, the steering wheel

and the battery are fitted. The completely assembled vehicle

finally rolls out of the assembly lines to the final inspection

stages.

Machine and engine shops: They assemble and test engines in

their engine shops and carry out precision machining of engine

components in their machine shops.

80
INTERNATIONAL BUSINESS

In August, 2003 Maruti crossed a milestone of exporting 300,000


vehicles since its first export in 1986. Europe is the largest
destination of Maruti’s exports and coincidentally after the first
commercial shipment of 480 units to Hungary in 1987, the 300,00
mark was crossed by the shipment of 571 units to the same
country. The top ten destinations of the cumulative exports have
been Netherlands, Italy, Germany, Chile, U.K., Hungary, Nepal,
Greece, France and Poland in that order.

The Alto, which meets the Euro-3 norms, has been very popular in
Europe where a landmark 200,000 vehicle were exported till March
2003. Even in the highly developed and competitive markets of
Netherlands, UK, Germany, France and Italy Maruti vehicles have
made a mark. Though the main market for the Maruti vehicles is
Europe, where it is selling over 70% of its exported quantity, it is
exporting in over 70 countries.

Maruti has entered some unconventional markets like Angola,


Benin, Djibouti, Ethiopia, Morocco, Uganda, Chile, Costa Rica and El
Salvador. The Middle-East region has also opened up and is
showing good potential for growth. Some markets in this region
where Maruti is, are Saudi Arabia, Kuwait, Bahrain, Qatar and UAE.

The markets outside of Europe that have large quantities, in the


current year, are Algeria, Saudi Arabia, Srilanka and Bangladesh.
Maruti exported more than 51,000 vehicles in 2003-04 which was
59% higher than last year. In the financial year 2003-04 Maruti
exports contributed to more than 10% of total Maruti sales.

81
82
MARUTI ALL INDIA SALES – 3 YR TREND

Segment 2003- Growt 2004-05 Growt 2005- Growt


04 h h 06 h
A1 (Mini - Hatchback) 167,56 17% 116,262 -31% 89,223 -23%
1
A2 (Compact - Hatchback) 176,13 47% 271,280 54% 335,136 24%
2
A3 (Mid Size) 14,173 28% 29,637 109% 31,939 8%
A4/A5/A6 NA NA NA NA NA NA
(Exec./Prem./Luxury)
C (Van Type) 59,526 15% 65,019 9% 66,366 2%
Passenger Cars - MUL 417,39 28% 482,198 16% 522,66 8%
2 4
Passenger Cars - Total 758,12 26% 885,029 17% 948,66 7%
Industry 3 9
MUV (Utility Vehicles) 3,555 12% 5,204 46% 4,374 -16%
Passenger Vehicles - MUL 420,94 28% 487,402 16% 527,03 8%
7 8
Passenger Vehicles - Total 901,15 24% 1,050,2 17% 1,129,3 8%
Industry 0 46 16

83
MARKET SHARE

2005-06 Market Share-Segment A2


TATA
20%

MARUTI HYUNDAI
59% 21%

2005-06 Market Share-Segment A3


HYUNDAI TATA
16% 20%
MARUTI
17%
FORD
14%
OTHERS GM
7% HONDA
6%
20%

2005-06 Market Share-Passenger Cars


TATA FORD
HONDA
HYUNDAI 16% 3%
4% GM
17%
1%

TOYOTA
1%

OTHERS
MARUTI 3%
55%

84
COMPETITION MODELS

Maruti Competition
SEGMENT
A1 (Mini - M800
Hatchback)
A2 (Compact - Zen, WagonR, Hyundai - Santro & Getz; Tata -
Hatchback) Alto, Swift Indica & Palio; GM - Corsa Sail
A3 (Mid Size) Esteem, Hyundai - Accent; Tata - Indigo &
Baleno Petra; Honda - City; GM - Corsa,
Optra, & Aveo; Ford - Ikon,
Fusion, & Fiesta
A4/A5/A6 Hyundai - Elantra & Sonata;
(Exec./Prem./Luxury Honda - Accord; GM - Vectra; Ford
) - Mondeo; Skoda - Octavia &
Superb; Toyota - Corolla & Camry;
Daimler Chrysler - C,E, & S Class;
C (Van Type) Omni, Versa
MUV (Utility Gypsy, Grand Mitsubishi - Pajero; Hyundai -
Vehicles) Vitara Terracan & Tucson; Ford -
Endeavor; Toyota - Prado &
Innova; Nissan - X Trail; Honda -
CRV; GM - Forrester & Tavera;
Tata - Sumo & Safari; Mahindra -
Jeeps, Scorpio, & Bolero

85
MARUTI CULTURE

Building a distinctive organizational culture is one of the most

challenging tasks facing any co. By ‘organizational culture’, Maruti

means an organizational philosophy, which guides the action and

the behavioral patterns of the members. It also defines through the

implicit, what the outside environment can expect from the

organization.

Hence the necessity of the work culture which, while appealing to

those organizations.

Hence the necessity of a work culture which, while appealing to

those within, also satisfies the expectations of those outside the

organizational environment.

A harmony between the work culture and the organizational

objective is very essential. It is, hence the duty of every employee

to work towards sustaining the Maruti culture, which it has built

over the years. All its action and behavior should be guided by the

organizational culture. In order to comply with the basic objectives

adopted since it’s inception viz. Fostering efficiency, productivity

and team spirit and its vision of being internationally competitive,

it has to create an atmosphere where a ‘we’ feeling dominates,

where each one of them considers themselves to be an important

part of the organizations.

86
Concern for the human aspect

The attempts should be directed towards creating an atmosphere

where each member respects his fellow-worker opinion equally

important would be a refrain from any action which harms the

company, but is designed to further individual self-interest. Such

action can be self-defeating in the long term. Individual goals can

be attained only by a system of mutual cooperation, and

recognizing and respecting the other persons right knowledge and

character. A candid and open ways of functioning must co-exist

with an empathy for the views of the professional counterparts.

Working as a team

This environment of mutual trust can began only when the

employees could value the team-work, recognizing the truth held

in the age old saying “ united we stand – divided we fall”. A team is

not merely the group of people working together but the one

where the members are bound together in interpersonal

relationships and share the corporate goals and objectives. It is the

teamwork, alone which will enable us to discover the joy of

achieving the apparently impossible.

Inter team mutuality

If it recognizes that the whole company is a team, it will realize the

importance of consultation , information sharing and cooperation

with other departments and division. It must not try and do

87
everything themselves or within the department. The cause of

failures is to be found in the attitude of “ self sufficiency”.

Concern for quality/cost

It is the task of each and every member of the Maruti family to

discipline his mind to the value of the service and quality that the

co. Has adopted. It is necessary to bear in mind that quality is

invisible. Quality has to be maintained in the workshop or in all the

dealings with the outsiders. A person who is quality conscious will

maintain the quality in all the aspects of the life.”Quality” has to be

maintained not in the workplace but also at home and in the

dealings with the outsiders. The same applies to the cost. Co.

Money should be treated with even more care than the personal

funds.

Discipline

Real discipline comes from within a person. Most basic feature of

being disciplined is that person should be disciplined from within,

not due to the fear of any punishment. An employee is thus

expected to be disciplined in both letter and spirit and he should

be following all the rules and regulations of the co., he should be

sincerely following all the procedures prevalent in the co. Discipline

requires voluntary compliance with what is being prescribed by the

co. For it’s employees. It also means courtesy towards one’s

colleagues as well as to the customers and other with whom one

88
comes in the contact. Infect, discipline is based on always having

consideration for the others in our action.

Performance orientation

Any co. Can grow and prosper only if the co. Makes profit, and is

able to achieve its targets and goals in relation to the production

sales, consumer satisfaction etc. All the employees must realize

that this can only come about if the employees are performance

and result oriented. Excuses for the failure do not help the co. Each

employee should bear in mind that passing on the responsibility to

each other would not help the co. And thus all the employees

should be wary of such trends.

Communication channels

As a part of open culture, all the company tries to have the top-

down as well as bottom-top communication. In an organization all

the communication should be such that each employee should be

able to communicate through minimum possible channels.

Managers facilitate various periodic meetings, both structured and

unstructured well holds various informal interactive sessions for

making them accessible listen and respond to the employees’

views and suggestions. The company has various forums in which

such type of the activities are followed:

• Daily morning meetings

89
• Daily production meetings

• Weekly management committee meetings

• Divisional/departmental meetings

• Weekly PPC meetings

• Bimonthly product committee meetings

• Union management meetings

• Maruti Sahyog Samiti

Open communication is also ensured through the system of:

• Open office

• Common canteen

• Monthly newsletter

• In-house quaterly journal- the gtirang

• Md’s letter to the employees

Its infrastructure is supportive of open communication that is

believed to be on date it has large no. Of the users (Maruti

personnel, dealers and vendors) linked by e-mails and can assess

the information on the companies mainframe. From 1995-96

onwards Maruti has initiated review of the communication process

through employee satisfaction, survey is conducted once in every

two years.

90
HR VISION

Lead and Facilitate continuous change towards organizational

excellence; create a learning and vibrant organisation with

high sense of pride amongst its members

CULTURE BUILDING INITIATIVES SINCE INCEPTION

Japanese Management philosophy of Team Spirit

• Common uniform

• Open office

• Common Canteen

• Open Office – Easy accessibility, Speedy Communication

and decision making

• Morning Meetings

• Morning Exercises

Focus Of Effective Managenent Process Since Inception

• Management Committee Meetings – every Tuesday

• Single unaffiliated Union

• Excellent Industrial Relations scenario – no loss of

mandays due to strike/lockout etc. in past 5 yrs.

• Maruti Udyog Sahyog Samiti – a forum for Non-Unionised

Staff

91
• Delayered Organisation Structure (Workers(Techn. /

Asst.), Supervisors, Executives, Managers)

• Top Driven HR – MD is also Director HR

• HR’s role of a facilitator

• Line managers as HR Managers

• Year of the Customer –HR Internal Customer Focus

• Focus on Internal & External Customer

HR INITIATIVES

• Prepare MUL Strategic Business Plan-2000-2003; To

achieve the Vision & Goal

• Improve the performance Appraisal system - it’s process,

skill & usage

• Introduce a Potential Appraisal System

• Improvements in internal & external Training & it’s

effective utilisation. Training need identification

• Systematic career planning ; Job Rotation ;

Empowerment; Job enrichment

• Periodic communication meeting at various level; Roll out

of Vision

• Raise cost consciousness for cost control and reduction

92
• Exposure on Brand Strategy to all non- marketing staff

• Retention of Talent

INDUCTION & SUCCESSION

• Transparent Recruitment & Selection process

• Recruitment on an All India Basis – no sectoral or region

specific

• Recruitment of Best available Talent in the Country

- Engineers – CAMPUS - IITs/RECs/Rorkee/HBTI

- ALL-INDIA TEST

- MBAs – IIMs/XLRI

- CAs - Rank Holders

- Technicians - ITI’s diploma holders after All India

Exam & Apprenticeship In MUL

• Lateral Entry for Experienced Professionals

SUCCESSION PLANNING

• Potential & Performance

• Vacancy - based

TRAINING & DEVELOPMENT

• Annual Training Plan - All Levels

93
• Training customised to meet Organisational Objectives

• Topics selected based on Vision, Values & Departmental

Feedback of Company-wide Managers

• Competency Mapping to identify Individual Training

Needs

• Technical Training on latest Technologies abroad at SMC,

Japan

• STRONG FUCUS ON TRAINING INITIATIVES

- Build a Learning Organisation

- Continuous Value Additions to Professional Skills

- Customised Training

- Training to the personnel of Business Partners

OVERSEAS TRAINING

Training held in co-ordination with SMC, Japan and AOTS

(Assoc. for Overseas Tech. Scholarship) (covered 1600

employees under the various schemes)

• 6 months SMC Training for Technicians - OJT in SMC,

Japan (2 batches/yr of 50 each)

• 9 months Javada Training for Press, Tool & Die Specialists

- Design & Maintenance

• AOTS Managerial Training (4-10weeks) for Manager &

94
above - Managerial Best Practices

• AOTS Technical Training (3.5 to 6 months) for Supervisors

& above - Technological Knowhow

• R & D Training (2 yrs.) - Research on new Technologies

APPRAISAL & REWARD

Appraisal

• New Appraisal System based on KRAs & Targets

• Review of Targets at regular Intervals

• People Development an important KRA

Reward

• Promotions based on Performance

• Productivity & Profit-linked Incentive Schemes

• Training including Long-term SMC Japan Trg.

• Highest paid workforce in the Industry, if not the Country

LEADERSHIP

• Vision, Value & Team Building Workshops for Top

Management

• CFT (Cross Functional Teams) of Managers for Major

Thrust Areas

• Managers sent to Joint Ventures to upgrade their

95
practices to MUL standards

CAREER DESIGN

• Performance & Potential based Appraisals

• Fast Track Option for High-performers

• Promotions after Managers Vacancy based

• Interviews for promotions above Managers

• Selection of Supervisors:

– Performance / Attendance / Discipline record

– Written Test & Interview

• Job Rotation - including Inter-functional

OUTSOURCING HR

• Part of our Long-term Strategic Plan

• Currently Trainers hired from outside

RETENTION & EMPLOYEE WELFARE

• Employee Welfare

- Residential Colonies for Employees – Chakkarpur &

Bhondsi

- Hospitalisation Reimbursement – on actuals without Ceiling

- Vehicle Loans

96
- Household Equipment Loans

- House Building Advance

- Annual Advance

• MUL PF Trust – for better Mgt., Service & speedy redress

• Proposed MUL Pension Scheme

• Learning Opportunity - Benchmark in Auto Technology

• Professional Value addition through Training

• Opportunity for foreign training at SMC, Japan

• Job Rotation & Job enrichment

EMPLOYEE ENGAGEMENT -ESOPS

• Maruti Udyog Ltd. Employees Mutual Benefit Fund

Scheme

• Managed by a 10-member Trust

• Fixed Equity of 0.26%

• Lock-in period of 3 years

• Transferable Internally

Performance appraisal

The organization follows MBO (Management By Objective).

MBO is a systematic approach to setting of the objective and

appearing of the results would lead to the improvement of the

97
organizational performance and employee satisfaction. Objective

sets are specific, clearly accompanied by action plans on how to

achieve them.

Prof. Acharya has devised a system of employee performance

appraisal.

1. Key related areas

Employees are evaluated on the basis of the performance in key

areas assigned to them like achieving a certain target,

minimizing cost and wastage etc. On the employees are 15 in a

year.

2. 360 * feedback

360* feedback process means feedback about both the

internal and the external customers of the co. About there

respective performances

Achievement code of conduct is taken by immediate superior

and as well as immediate subordinates. This feedback is then

evaluated.

Promotional policies

Promotions, recognition are very powerful social rewards for the

employees. In Maruti promotion is awarded annually on the basis

of the points. These policies have the positive effect on the

98
employees and if the employee earn 45 points in 3 years than that

employee is given the promotion.

Dress code

The significance of wearing the same uniform does not lie in being

identified as a Maruti employee, it symbolizes as a new culture of

feeling oneself as a member of the same team that is ‘ Maruti

team’

The following notice is served at each department of the company.

“ Please ensure that you are in the company uniform when

you come on duty”

99
COMPETITIVE STRENGTHS

MUL believes that they are well positioned to maintain and

enhance their leadership position in the small car segment in India,

while continuing to offer products in most segments of the Indian

market, on account of their competitive strengths, which include

the following:

Expertise in small car technology: As a subsidiary of

Suzuki, they have access to globally respected technology in

the small car segment. They have the advantage of Suzuki’s

expertise in all aspects of small car technology and design,

with respect to their products, their manufacturing 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

100
Omni, a versatile vehicle that can seat more passengers than

the Maruti 800 or be used as an ambulance or cargo vehicle,

had a market share of 10.5% in fiscal 2002. They are also the

only manufacturer to sell three distinct models, the Zen, the

Alto and the Wagon R, in segment B (priced between

Rs.300,000 and Rs.500,000). They believe that theirdominance

in segment A and extensive product range in segment B

enables us to offer the customer a wider choice in the small

car segment than any of their competitors. In addition, the

absence of other manufacturers in segments A gives their

dealers greater flexibility in promoting models in segment B.

Quality products: In November 2001, they were one of the

first automobile manufacturers in the world to receive the ISO

9001:2000 certification. They began to export products in

1988, primarily in order to benchmark our products against

international quality standards. They have exported products

to approximately 70 countries, including countries in Western

Europe. Their products for export are manufactured using the

same assembly line as our products for the domestic market.

Extensive sales and service network: They believe that

they have the largest network of dealers and service centers

amongst car manufacturers in India. As of March 31, 2003, we

had 178 authorized dealers with 243 sales outlets in 161 cities.

101
They estimate their car parc to be in excess of 3.5 million

vehicles. To service this car parc, at March 31, 2003, they had

342 dealer workshops and 1,545 Maruti Authorized Service

Stations, or MASSs, which covered 898 cities in India backed

by Express Service Centers on 30 highways across the country.

In addition to the distribution of their cars, their dealership

network is a critical resource in our efforts to provide

customers with a “one-stop shop” for automobiles and

automobile related products and services such as automobile

finance, automobile insurance, Maruti-certified pre-owned cars

available for purchase, and leasing and fleet management, in

order to promote customer loyalty.

Brand strength: They have been present in the Indian market

for almost twenty years and have built their brand on the basis

of the values of trust and reliability. Most of their principal

competitors have been present in the Indian passenger car

market for a significantly shorter period. Certain

manufacturers have ceased to manufacture certain products

shortly after introducing them, or have left the market

altogether. In contrast, they continue to support the

maintenance of their products. This has contributed to the

strength of their brand. In 2000, 2001 and 2002, J. D. Power

Asia Pacific, Inc. ranked us No. 1 in the India Customer

Satisfaction Index, which assesses customer satisfaction with

102
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 Suzuki’s subsidiaries outside

Japan in terms of productivity measured as the ratio of number

of vehicles produced to number of employees. They have an

installed capacity of 350,000 vehicles per year, which is the

highest among passenger car manufacturers in India and

among the passenger car manufacturing facilities of Suzuki’s

subsidiaries outside Japan. They have consistently produced in

103
excess of their installed capacity in the five fiscal years ended

March 31, 002.

They believe that they would be able to expand their

production to 500,000 cars per year with minimal additional

capital expenditure. This would enable them to benefit from

significant economies of scale.

Strong vendor base and higher rates of localization:

They work closely with their vendor base for the supply of raw

materials, components and spare parts of their products. In

order to improve quality and generate economies of scale,

they have reduced the number of their vendors of components

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

2003, and intend to continue to reduce the number of our

vendors. 113 of their vendors at March 31, 2003 were in

technical collaboration with foreign entities. As of the same

date, we had strategic equity interests 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

104
timely supply of components that meet their quality

requirements. This has enabled them to increase the

proportion of locally sourced, lower cost components in their

models, a concept they refer to as localisation. They have been

able, in collaboration with their vendors, to increase the rate at

which they are able to localise production of their new models

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

components.

Skilled labour and experienced management: Thei highly

skilled labour force has become increasingly productive in

terms of vehicles produced per employee and receives training

on an ongoing basis, including training by Suzuki. As of March

31, 2003, 1,900 of their employees had been trained at

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

Indian passenger car market for a significantly longer period

than most of their principal competitors. As a result, they have

been able to build a highly experienced management team

that is familiar with conditions in the Indian passenger car

market. For instance, their managing director has almost ten

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

divisions have more than 15 years of experience with them.

Capital resources: They have cash and bank balances and

current investments amounting to Rs.9,992 million. As of the

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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.

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BUSINESS S TRATEGY

They intend to continue to focus on the small car segment,


while offering products in most segments of the Indian
passenger car market. They aim to achieve their principal
objectives by pursuing the following business strategies:

Maintain and enhance their product range: They intend to


utilize Suzuki’s expertise in small car technology to produce
new variants of their existing models and to upgrade their
products with contemporary technology and features.

Increase reach and penetration: They plan to continue to


utilize their extensive sales and service network to increase
the reach, in terms of geographical spread, and penetration, in
terms of sales volumes, of their products across India.

Increased availability of automobile finance: They


continue to seek opportunities to expand the size of the Indian
passenger car market, especially in the small car segment,
through facilitating easy availability of automobile finance. To
that end, they have recently entered into an agreement with
the State Bank of India.

Secure repeat purchases by offering a “360 degree


customer experience”: On the basis of their belief that
securing repeat purchases from an existing customer requires
less expenditure than acquiring a new customer, they aim to
provide customers with a “one-stop shop” for automobiles and
automobile-related products and services.

Continue to benchmark their manufacturing capabilities:


They plan to continue to benchmark our manufacturing
capabilities with the most efficient car manufacturing facilities
of Suzuki and its subsidiaries.

107
Continue to reduce costs to offer more competitive
products:

Cost competitiveness has been, and continues to be, central to


their strategy as the leading manufacturer in the small car
segment to expand the size of the market by offering
competitively priced, high quality products. The components of
this strategy are:

• Higher levels of localization

• Vendor participation in cost reduction

• Cost reduction on warranties

• Reduction in initial investment cost

• Reduction in number of vehicle platforms

• Achieve further cost reduction through higher


productivity

Lower cost of ownership:

Through their business strategies, they seek to reduce the


consumer’s cost of ownership of their cars, which comprises
the cost of purchase, the cost of fuel and maintenance,
including spare parts and repairs, during the life of the vehicle,
insurance, and resale value.

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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

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dealers are required to maintain their outlets in accordance

with their specifications and employ well-trained sales staff.

Their agreements with their dealers usually have terms of five

years. These agreements are generally renewable for

successive terms of three years, by mutual agreement. The

agreements typically permit termination by either the dealer or

them with six months’ prior notice.

Enhancing dealer performance: Their central office in Delhi,

their regional offices and their area offices monitor and assist

their dealer network. They 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.

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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.

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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

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

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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 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

113
companies to cover the costs of warranties offered under this

program. The extended warranty program is intended to

maintain the dealer’s contact with the customer and increase

the revenue generated from sale of spares, accessories and

automobile-related services. An effort is made during the

period of the extended warranty to encourage the customer to

exchange his existing Maruti car for a new Maruti car, or

upgrade to a new Maruti car.

114
N EW BUSINESS INITIATIVES

As the largest manufacturer and leader in the small car segment,

they continually seek new ways to utilize their vast car parc, range

of products and extensive sales and service network to expand the

size of the passenger car market in India. They have recently

launched new initiatives to develop the market for automobile

insurance, automobile finance, leasing and fleet management, and

pre-owned cars. They aim to provide customers with a “one-stop

shop” for automobiles and automobile-related products and

services, and build on their wide customer base and extensive

sales and service network to make available to their customers a

wide range of Maruti-branded services at different stages of

ownership, which they refer to as the “360 degree customer

experience”.

Atithi Devo Bhava: One-stop shop


Inspired by the spirit of India. Atithi Devo Bhava, in Sanskirit,

means “a guest is like God”. It captures the Indian tradition of

honouring guests. It's also the inspiration for the welcome you’ll

receive at a Maruti Suzuki dealership, and the caring relationship

they share with those who drive their cars. At Maruti Suzuki, you

will find all your car related needs met under one roof. Whether it

is easy finance, insurance, fleet management. services, exchange

Maruti Suzuki is set to provide a single window solution for all your

car related needs.

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That's why they have Maruti True Value, the best place to buy

and sell reliable used cars. Maruti Finance an agglomeration of

the biggest finance companies in India brought together by

Maruti Suzuki to ensure that the dream car is within everyone's

reach. Similarly, Maruti Insurance brings together some of the

biggest names in the car insurance industry to provide

insurance solutions to every type of car consumer. Then,

finally, there is N2N, which offers fleet related solutions.

116
THE PLAYERS IN THE INDIAN AUTOMOBILE INDUSTRY

Hyundai Motor India Ltd

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


Hyundai Motor Company, South Korea and is the second largest
and the fastest growing car manufacturer in India. HMIL presently
markets 31 variants of passenger cars in six segments. The Santro
in the B segment, Getz in the B+ segment, the Accent in the C
segment, the Elantra in the D segment, the Sonata Embera in the E
segment and the Tucson and Terracan in the SUV segment.

The company recorded combined sales of 252,851 during calendar


year 2005 with a growth of 17.26% over year 2004. HMIL is India's
fastest growing car company having rolled-out over 970,000 cars
in just over 80 months since its inception and is the largest
exporter of passenger cars with exports of over Rs. 1,800 crores.
HMIL has recorded a growth of 27.2% in exports over the year
2004.

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


Chennai boasts some of the most advanced production, quality and
testing capabilities in the country. In continuation of its investment
in providing the Indian customer global technology, HMIL has
announced plans for its second plant, which will produce 300,000
units per annum, raising HMIL’s total production capacity to
600,000 per annum by 2007. The plant will be built on a 2.1 million
square meter site adjacent to the existing facility .HMIL is investing
to expand capacity in line with its positioning as HMC’s global
export hub for compact cars. Apart from expansion of production
capacity, HMIL plans to expand its dealer network, which will be
increased from 157 to 200 this year. And with the company’s

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greater focus on the quality of its after-sales service, HMIL’s
service network will be expanded to over 1,000 in 2006.

The year 2005 has been a significant year for Hyundai Motor India.
It achieved a significant milestone by rolling out the fastest
“200,000th” export car. HMIL exports to around 60 countries
globally and recently made a foray into the highly competitive UK
market by exporting its first shipment of 820 cars.

Propelled by the strong performance in year 2005, Hyundai Motor


India is on the threshold of yet another grand milestone of rolling
out its ‘One millionth’ car which is expected soon.

Tata Motors
Tata Motors is one of the largest companies in the Tata Group
with a total income of US$ 2.35 billion. More than 3 million
Tata vehicles ply on Indian roads making Tata a dominant
force in the Indian automobile industry.
Tata Motors is India's only fully integrated automobile
manufacturer with a portfolio that covers trucks, buses, utility
vehicles and passenger cars. It would be no exaggeration to
say that Tata Motors provides the wheels for India's growth.

Tata Motors has the unique distinction of giving India its first and
only indigenously built passenger car - The Tata Indica and the
premium feature sedan - The Tata Indigo. The Indica, launched in
1998, reached the 2,50,000 sales mark within 52 months of
launch.

Tata Motors owes its leading position in the Indian automobile


industry to its strong focus on indigenisation. This focus has driven

118
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.

119
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

120
cars as against 15,155 cars in 2003 registering a growth of 73%
while overall passenger car growth during the year was only
around 23-24%. These included 9191 Chevy Optras in Entry 'D'
Luxury sedan segment, 8369 Opel Corsas and 8417 units of the
new generation premium multi-utility vehicle (MUV) Chevrolet
Tavera.

The existing GM India plant was originally built by Hindustan


Motors. In 1994, GM India entered into a 50% Joint Venture
partnership with Hindustan Motors and modernized the 45,000-
square-meter plant near Halol, 45 kilometers northwest of
Vadodara, in the western state of Gujarat. In February, 1999, GM
bought the holdings of Hindutan Motors and GM India became a
100% subsidiary of General Motors Corporation of USA. The plant
produces the Opel Corsa, Corsa Sail, Chevrolet Optra, and
Chevrolet Tavera. The Chevrolet Forester and Opel Vectra are sold
as CBUs (Completely Built in Units) and as imported from Japan
and Germany respectively.

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Toyota Motor Corporation is the third largest automaker in the
world. They have 34 dealers in India and in Delhi they have 2
dealers, first one is ‘South Delhi Toyota’ and second one is in
Moti Nagar in which I have visited during my survey. Dealer in
Moti Nagar which is “Galaxy Toyota” have predetermined
mission that-Customer comes first and everything they do is to
meet their customer needs, basically they work for creating a
lifetime customer.

They work by dividing their work like in one showroom they


have separate teams for every product like relating to Corolla
it comprises of 7 or 8 executives who handle all the work
weather it is of sale or any enquiry or telemarketing call that
team must have some specific target to achieve. They reach to
the customers either by distributing Leaflets, Brochures to the
customers. They collect customer database from Directory
(Yellow Pages) or through customer references even they solve
customers query online and give information through e-mails.
Recently they organized one drawing competition between the
kids of their existing customers just to interact with the
customer and build loyalty of their company products. They
judge their customer satisfaction by analyzing that repeat
buyers are more or not & moreover they have customer
feedback form in which they can analyze customers
background and can forecast customer future demands. They
target only high profile customers.

They build customer loyalty by giving happy calls to the


customer after sale of every 1,3,7 month. They provide
Periodic maintenance schedule, which will ensure that vehicle,
is kept in best able-bodied at all times. The maintenance
schedule may include periodic inspection, adjustment and

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lubrication that will keep vehicle in the safest and most
efficient condition, they provide one booklet in which they give
simple and useful tips for maintenance of the car. They offer
good schemes like providing free Test Drive worth Rs 250
petrol at the time of sale of any car. They do road shows to
attract customers. To promote their product they organize
exchange mela, events, various cash discounts like currently
they are running one discount scheme on purchase of any of
their car (Innova, Toyota) they are giving free accessories
worth Rs15000. They provide 4 free services after sale and
with full clean diesel.

All employees of Galaxy Toyota shall consider how they should


act and how they might change their ways to benefit the
company. They launch one “Co Branded Credit Card” to
provide additional benefits and services to the Toyota
customers. This Credit Card will give Toyota customers a
better payment flexibility and convenience, like Customer gets
free service voucher with the card, Special Invite to co-
sponsored events, Personal accident insurance coverage: Up to
20 lakhs etc. They have one Guest Book in which they store
valuable comments of customers, which they think are very
important for them, which will help them to improve their
service.

HONDA

123
Honda is one of the leading manufacturers of automobiles and
power products and the largest manufacture of motorcycles in the
world. They have 20 dealers in 42 different cities around India. In
New Delhi they have 6 dealers, I have visited one of them, which is
in Najafgarh Road.

They do surveys to know customers need. They target either


existing or their perspective customers by giving advertisement in
the newspaper or through there satisfied customers which give
references. They don’t believe on targeting competitor’s customers
because by not doing so they have such a brand reputation with
good quality products, only through this they are able to make
good sales.

They display their models in 8th Auto Expo, which held in New
Delhi. They are now focusing on their new model ‘Civic’.
Honda's Civic perhaps drew the maximum attention. The
reason is simple: Civic is a new car from the house of Honda.
During my survey I get to know that Honda City Model is the
second largest selling car in the ‘C’ segment. They have a
good superiority with superior brand name in the country.

They prefer to have mode of communication with the customer


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

124
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.

125
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

126
margins and damages the brand images the car companies spend
large amounts of money to build.

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

127
sales fluctuations, market share is critical to survival.
Consumers are less brand-loyal than in the past, and
every market segment has an increasing number of
vehicle choices. To increase sales and gain ground in the
market share battle, companies must improve their
ability both to acquire first-time customers and to
develop customer loyalty to their current brands. To
achieve these related objectives, companies must set an
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

128
customer lifetime value, companies must be able to
capture these multiple interactions, provide seamless
management between channels, and leverage shared
customer information to create rewarding experiences
and to develop and execute highly targeted marketing
campaigns.
• Inefficient demand chain planning and high
associated IT cost - Cost reduction is an ongoing
competitive requirement. Just as supply chain
management must be supported by a sophisticated
information infrastructure, effective demand chain
management also requires the right supporting
infrastructure, enabling car companies to fully 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,

129
an inability to maximize "share of wallet "from every
customer through well-targeted marketing and cross-
selling. Synergy between traditionally independent
business units such as captive finance companies and
between functional groups such as sales, service, and
marketing is more critical now than ever before. Only by
sharing customer information can customer lifetime value
be maximized among different groups.
• Complex data governance requirements - Global
automotive enterprises have large, complex information
technology ecosystems. While customer information must
be shared within this ecosystem in order to fully
maximize global operations, it must also be protected.
Proper management of customer information requires a
sophisticated capability to manage a variety of access
rules and to accommodate legal restrictions that can
change very quickly. The trust required for successful
collaboration between groups in the automotive
enterprise must be built by demonstrating that customer
information can be shared while observing these complex
requirements.
• Difficulty managing employee relationships - In
today 's fast-paced business environment, automotive
companies need to ensure that their most valuable asset
-their employees -have immediate access to the critical
information, services, and applications required to be
productive. Organizations must enable employees to
make better decisions, work collaboratively, enhance
customer relationships, and maximize productive time.
Global automotive enterprises must be able to enact and
enforce consistent policies across business units, instill a
common corporate culture across a geographically

130
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.

131
Target Marketing Procedure Of Various Companies

Hindustan Lever Limited (HLL)

Parameters

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

132
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

133
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.

TATA MOTORS

Parameters

Target Segment

They want to offer a car at a retail price of Rs 1 lakh in which their


main focus is to magnetize middle class people. They
have a certain assessment of what price the consumer
is willing to pay.

Strategy

Their attempt to provide with the facility of having a car, which can
reach to middle class consumers and can provide all the
benefits which other automobile companies are
providing in their products and that too at a lower price.
Their basic plan is to capture the consumers who have
nuclear family, for this they are planning to set up a
plant in West Bengal

134
Process

Industry sources believe that Tata Motors has built a business model
around the one-lakh car, finalized all the building blocks,
and even fixed a price for each of these.

ITC Ltd. (Indian Tobacco Corporation)

Parameters

Target Segment

ITC is tapping local markets through regional languages. ITC is


inspired by the growth and success of the regional
media and is convinced that the regional languages can
significantly contribute to the growth of the personal and
social expression industry. Like they captured the local
tobacco market and now they are entering into greeting
cards and gifting products and stationery products on
the other hand.

Strategy

They are focusing on distribution network through growing element in


the product and business mix. Also they are focusing on
designing greeting cards by setting up in-house creative
teams across the country. The company has
strategically and systematically built up a huge list of
national and international images and designs, including

135
masterpieces of well-known artists. This invaluable bank
of designs has helped ITC offer a rich choice of cards to
consumers suiting a wide range of occasions,
relationships and styles of expression.

Their strategy to tap the customer - ITC’s considered


opinion is that e-cards, SMS or MMS are very impersonal.
The traditional greeting card is the most personal,
appealing and touching mode of communication. People
will always need emotionally rich cards for special
occasions.

Process

ITC has created a very big library of its own designs, partly
from abroad and partly from within the country. These
designs are ITC's invaluable intellectual properties. Their
promotional campaigns include free courier schemes for
festivals, scratch and win cards for consumers and outlet-
based free gifts linked to purchase.

Mode Of Communication

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


and mail facility this mode of communication is possible
to a great extent. ITC’s extensive India-wide distribution
network enables its greeting cards reach over 12,000
multi brand outlets in over 700 cities across the country.
In the last three years, 10,000 greeting card designs
have reached these outlets with the help of ITC's web-

136
enabled e-commerce model –Communication Model
ITC markets

Opportunity

These days’ consumers are looking for convenience and instant


gratification. Communication media like the telephone
and e-mail facilitate communication to a great extent.
But many greeting card sites are moving from a 'free' to
a 'pay' mode. This could be an emerging revenue
earning opportunity for content providers.

Threats

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


the second biggest greeting card brand in India with a
market share of 20 per cent. ITC has a five per cent
share in the stationery market. The greeting card market
in India is estimated to be around Rs. 250 crore in terms
of yearly consumer spent. The unorganized sector in the
greeting card market will be close to 40 per cent. The
organized sector, controlling 60 per cent of the market,
is divided between ITC, Archie’s and Hallmark. While
Archie’s has licensing agreements with international
greetings brands

Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI)

Parameters

Target Segment

137
They introduced a motorcycle named 'Unicorn’. They
want to target young youth, which gives sportier look
who are focusing on premium segments.

Strategy

To attract more adolescent people by giving them a dirt bike, which


has got good mileage, good speed with sporty look and
has 1500cc engine power. Their strategy behind
introducing this particular bike is that they can migrate
people from focusing more on motorcycle rather than
traditional scooters

Process

Unicorn had a four-stroke 13.3 bhp engine with five gears. The new
bike was available in five colors and was designed to
achieve a speed of 0 to 60 kmph in five seconds.
Unicorn looked sportier than all the existing motorcycles
in the premium segment and was pitted against Bajaj
Pulsar, the leader with 75 percent market share in that
segment.

ModeOfCommunication
They introduce advertisement with a punch line – “Be a Wing Rider” with a
aggressive campaigns

138
Mc Donald’s

Parameters

Target Segment

Thus, Mc Donald’s would probably be better off targeting families in


search of consistent quality food in nice, clean
restaurants. McDonald’s has a great reputation for fast,
consistent quality, family friendly food.

Strategy

McDonald’s strategy is to tap all the people of each and every


generation by introducing new type of offers and
schemes like for children they have red balloons in their
food center or they celebrate the birthday in their own
way by giving some additional offer or giving free
coupons to those students who scored good marks in
their education. They target young and old age people
in the same way that means their main focus is to target
whole family because they understand Tradition of
Indian Sentiments of the families

Process

They reach to their customers by addressing them in the


advertisement campaign such as “I am loving it” to
attract joint or nuclear families by giving offers like

139
“Combo Meals” and their popular act is of having ice-
cream of worth Rs 7 which can be afforded by middle
class families.

Mode Of Communication

They target all group of people so their style of communication is to


give advertisement of each age group.

140
FINDINGS FROM SURVEY

Total Number of Respondents: 15 Officials

Number of Respondents
Maruti Udyog Limited 5
Hyundai Motors India Ltd 2
General Motors 2
Tata Motors 5
Ford India Limited 1

Do you face problems in


maintaining good and effective
relationships with customers?
Quite Frequently Average Rarely
Frequently
Maruti Udyog 2 3 - -
Limited
Hyundai Motors - 2 - -
India Ltd
General Motors - 2 - -
Tata Motors 3 2 - -
Ford India - 1 - -
Limited

Rarely Average
0% 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

141
good and effective relationships with customers. With changing

customer needs its quite obvious that maintaining good relations

with customers need an effort on part of the Dealers and

Manufacturers.

How well can your company identify its end user


customers?

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

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

anticipate and fulfill their needs. They believe that the new

business initiatives taken by MUL have expanded the scope

of this relationship. Maruti offers auto insurance, auto

finance, corporate lease and fleet management and resale

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

first time, car customers in India are able to access these

services through a one-stop shop, backed by the leader

brand. The way they look at it is that this will provide

complete mobility solutions to the Maruti customer. This

also enables them to extend their relationship with the

customer beyond the point of purchase to the entire

ownership life cycle. Since these services play a vital role in

the car customer's ownership experience, the new

initiatives enable them to offer Maruti owner’s greater

value, assurance and convenience.

142
♦ Hyundai Motors India Ltd: According to the officials of

Hyundai Motor India is at a very exciting stage in India

today. They are experiencing tremendous growth - which is

a true sign of enjoying customer confidence. In order to

strengthen their position further in the Indian market, they

need to continuously work on building their corporate

reputation while aggressively positioning their products. For

HMI's focus and commitment to the Indian automobile

customers is of critical importance. Its been their continuous

endeavor to fulfill the entire spectrum of customer needs

and desires, across all socio-economic & lifestyle groups.

They have therefore, in just 6 years of HMI's young life,

established nationwide sales & service network, scaled up

state-of-the-art manufacturing capacity, launched global-

standard cars in rapid succession and exported cars made-

in-India across the globe. Getz, a much admired lifestyle

brand in Europe and elsewhere, is a step in the same

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

product portfolio.

♦ General Motors: According to the officials at General Motors

is positioned as a mature and responsible car manufacturer,

which offers great value-for-money products to its

customers. The company leverages its global expertise to

manufacture and market well engineered and safe products

143
through its well-established retail network that provide an

excellent ownership experience to its customers.

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

foundation of the company’s growth over the last 50 years

is a deep understanding of economic stimuli and customer

needs, and the ability to translate them into customer-

desired offerings through leading edge R&D.

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

has reaffirmed its commitment to enhancing the purchase

and ownership experience for its customers with the rollout

of Ford Brand@Retail concept across the country. Ford India

has been revamping all dealerships under the Ford Brand@

Retail, a global corporate identity program to offer a world-

class purchase experience to the customer. Ford India

continues to expand its distribution network and will grow to

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

officials also mentioned that Ford India provides training

support to dealers in areas including customer satisfaction,

sales, technical and non-technical aspects of the business

and in the financial management of the dealership.

Can your company differentiate its customers based on


their value to you and their needs from you?
Yes No
Maruti Udyog 5 -
Limited

144
Hyundai Motors 2 -
India Ltd
General Motors 2 -
Tata Motors 5 -
Ford India Limited 1 -

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.

145
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 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

146
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 assistance, an urgent car servicing or even

147
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

148
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.

149
How well does your company customize its products and
services based on what it knows about its customers?

Highly Somewhat Not Customer


Customer Customer centric
centric centric
Maruti Udyog 5 - -
Limited
Hyundai 2 - -
Motors India
Ltd
General 2 - -
Motors
Tata Motors 5 - -

Ford India 1 - -
Limited

Somewhat Not Customer


Customer centric centric
0% 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.

150
Does the company have established quality assurance

processes?

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

No
0%

Yes
100%

Findings: According to all the respondents their respective

companies have established quality assurance processes.

151
Does the company take customers' needs into
consideration when selecting and implementing
technology?
Yes No
Maruti Udyog 5 -
Limited
Hyundai Motors 2 -
India Ltd
General Motors 2 -
Tata Motors 5 -
Ford India Limited 1 -

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 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

152
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.

153
Does the company provide its employees with technology that
enables them to help customers?
Yes No
Maruti Udyog 5 -
Limited
Hyundai Motors 2 -
India Ltd
General Motors 2 -
Tata Motors 5 -
Ford India Limited 1 -

No
0%

Yes
100%

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.

154
Does the company maintain a strategy for collecting and using

information about customers?

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

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 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

155
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 Somewhat Not Effective
Effective Effective
Maruti Udyog 4 1 -
Limited
Hyundai 2 - -
Motors India
Ltd
General 2 - -
Motors
Tata Motors 3 2 -

Ford India 1 - -
Limited

Not Effective
0%
Somewhat effective
20%

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

156
its customers while 20% said that the company was somewhat

effective.

157
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

158
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 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

159
horn and the steering column switch so that they are more

robust; the new combination switch has proved so effective

that it is used worldwide. They have also developed a

hydraulically activated clutch system, improved ground

clearance and upgraded air conditioning to satisfy the specific

needs of the Indian customer. This is part of a continuous

improvement process. Satisfying our customers They have

introduced initiatives to assess customer satisfaction and to

act on their concerns. The Intensified Customer Concern

Definition (ICCD) is a telephone survey of customers conducted

to assess problems in three areas:

They recognise the need for additional products. They are

working towards introducing products to match our customer’s

dynamic lifestyle, products which have progressive styling and

are great to drive.

• Vehicle quality concern • Design and general comments •

Negative sales and service

♦ According to GM officials: General Motors target is to offer a

choice of products to their customers to match their

different needs and budgets. Being the world’s largest car

manufacturer, they have access to a range of products

through their global alliances. They are already present in

most segments and will shortly have products in additional

160
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.

161
♦ 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 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

162
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 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

163
been cited where passengers driving Tata vehicles have

been saved after terrible accidents. Tata Motors established

a crash-testing facility, the only one of its kind in the country,

in Pune in 1996. The small workforce of 21 members

including engineers aims to control the serious risks and

intrusions in accidents. The company believes that this factor

has been vital to the success of the Indica and other

products under the company’s passenger car unit. The key

things that the critical people spend time on 1. Commitment

to quality manufacturing standards 2. Developing new

products 3. Customer Safety and satisfaction 4. Global

expansion Norms.

How much 'influence do


customers' needs have on the
company's products and
services?
Very High Substantial Very Low
Maruti Udyog 3 2 -
Limited
Hyundai Motors 2 - -
India Ltd
General Motors 2 - -

164
Tata Motors 2 1 2

Ford India 1 - --
Limited

Very Low
13%

Substantial Very High


20% 67%

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

Automobile Majors customer needs have a very high influence

on company’s products and services while 20%(3) respondents

said that it had substantial influence while 13%(2) respondents

said that customer needs had very low influence on company’s

product and services.

165
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 be on being consumer-
centric. Technology solutions as applied to various front-end
functions could aid in building a viable link between the
organisations and customers irrespective of geographical
separation. This has to be backed with appropriate systems and
processes to mine the right type of data by the right function in an
organisation.

Besides technology, systems and processes, another important link


is human resource, If CRM is the key, HR would be the nerve centre
for any CRM activity.

At Maruti Udyog Ltd the first step for a company to enhance value
through CRM was to identify its target base. At Maruti, the
categories which emerged were:

* Two-wheeler owners;

* Customers taken away from the competition;

166
* Services sector.

After identifying the target, the next stage was to build on


customer relationships. Maruti, therefore, began evaluating the
current database of consumers to identify those who wanted
Maruti service or better still, wanted to upgrade up the value chain
in Maruti products. Third, it began working in tandem with the oil
industry to get data feedback on two-wheeler consumers-and
identify those ready to move into four-wheeler purchases.
Ultimately, CRM is all about value enhancement for the
organisation.

Faced with increasing competition from abroad, a cyclical business


environment, and the challenge of a widely dispersed dealer
network, Tata Motors implemented Siebel Automotive, a
comprehensive customer relationship management (CRM) solution
designed specifically for companies in the automotive industry.
Seamlessly integrated with Tata Motors’ dealer management
system and SAP back-office applications, Siebel Automotive has
delivered significant benefits across the extended organization,
including improved customer satisfaction, increased revenue and
productivity, and reduced costs.

Currently in use by 500 sales and service personnel, the Siebel


CRM solution is expected to be deployed to Tata Motors' entire
network of 250 dealer organisations in India by the end of 2005,
with more than 1,600 locations and 10,000 sales and service
executives expected to use Siebel Automotive.

Within the first year of implementing the Siebel's solutions, they


have seen improvements in customer satisfaction, revenue and
operating cost reductions through productivity improvements, and
these benefits are expected to increase further over time. This is

167
helping them to become truly customer-centric, since they can
draw upon real-time, centralised customer and vehicle data and
respond better to their customer and dealer needs.

The Siebel CRM solution enables Tata Motors to gather feedback


on products to improve design or manufacturing quality as well as
measure the effectiveness of marketing campaigns and
programmes. The automaker selected Siebel Automotive because
of its partner management capabilities to handle its large dealer
network, the solution's zero-footprint web-based architecture and
user-friendly interface-critical to support thousands of salespeople
with various skill levels.

Tata Motors is currently in the first part of a three-phase


deployment. Once the current phase is completed, the company
plans to deploy marketing, call centre, business analytics, and
captive finance modules. This will allow Tata Motors to better
understand customer needs and requirements, improve its
responsiveness to service requests and problem resolution, initiate
more proactive contacts with customers, add support for new
products and services, and streamline dealer financing processes.

The ease of integration between CRM solution and Tata Motors'


dealer management and ERP systems was also a critical factor in
the company's decision process. The company says that Tata
Motors has already seen improvements in a number of areas,
including:

• Improved demand forecasting, planning, logistics


management, and inventory management
• Overall reduction in quality-related costs due to faster
product performance feedback

168
• 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

Ultimately, Tata Motors intends to create an open portal for


customer self-service, enabling car buyers to manage product
configuration and place orders online.

Siebel Automotive, a comprehensive suite of business applications,


provides a single, 360-degree view of the customer to all who need
it; facilitates coordination between Tata and its dealers; and
enables Tata to track each vehicle throughout its life cycle. Siebel
Automotive has been closely integrated with a wide array of back-
office applications, including applications for inventory
management, fulfilment, and parts location. Pricing and tax
calculations can be adjusted for each dealer's requirements. In
addition, comprehensive sales and reporting functionality built into
Siebel Automotive enables Tata to distribute sales targets to its
dealers and roll up sales numbers across the country.

Siebel, incidentally, pioneered the industry-specific application


model and today delivers 23 industry applications and more than
100 industry-specific solution sets. These solutions, which include
Siebel Automotive, enable companies to establish a single,
enterprise-wide view of their customers and execute key customer-
facing business processes more efficiently and effectively.

Hyundai Motors feels that newsletters are an effective CRM tool


and they believe that the newsletter is a medium that reinforces
the brand's values, initiates a dialogue with the customer and
gives him the reassurance that he had made the right choice. As
customers like to identify themselves with successful companies

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and brands, the newsletter plays the role of disseminating news on
corporate happenings, financial performance, ongoing R&D
initiatives, new product launches and events. Apart from this, the
newsletter also has interactive sections on safety and
environmental consciousness, driving tips, column on travel, tips
on car maintenance and so on," he adds. The bi-monthly
newsletter reaches out to over one lakh recent and prospective
customers. If the auto majors look at newsletters as a CRM tool,
the health industry considers newsletters not only as an effective
medium to build their respective brands, but also to educate their
target audience. A newsletter helps to establish a better one-to-
one contact with the customers, whereas an ad is for the world at
large. A newsletter helps to build a relationship with the existing
customer. Newsletters are an effective media to disseminate
information and create an awareness among the target audience,
therefore, creating a positive disposition towards the brand and
helping build brand ambassadors. They believe that an informed
and involved consumer is the first step towards building sales

More than 90% of a customers’ experience with General


Motors comes after they purchase or lease a vehicle. General
Motors and its dealers needed to discover a better way to
leverage the four-year period between purchases to retain
vehicle customers. GM also wanted to make it easier to
become aware of and buy additional GM products and services
to create an enhanced post-purchase experience and draw new
consumers into the GM family. Modem Media helped GM create
their first internet-based owner center called My GMLink. Its
goal of this global CRM platform was to build customer loyalty
and help GM dealers grow their customer relationships.
Modem Media and GM saw the Internet as the only place where
all of GM’s products and services could be brought together in

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a meaningful way for the consumer—and in a way that the
consumer could be in charge of the process. They
recommended launching a time-saving, self service digital
product. Their hypothesis was that if the ownership experience
could be improved by using the unique properties of a digital
product, it would reward dealers and GM directly by increasing
the consumer’s propensity to re-purchase.
My GMLink.com was created as a free online service for GM
vehicle owners serving as a one-stop resource for all their GM
ownership needs. It addressed the distinct (but intertwined)
needs of three important constituents: the consumer, the
dealer and GM.
Modem Media and GM created a single platform for use by
every GM make and model as well as other GM products and
services. This platform was also designed for re-use
throughout the world.
My GMLink helps the consumer get more value from their
vehicles by helping them organize information and more easily
accomplish everyday tasks related to owning and maintaining
a vehicle. As ranked by consumers, the most valued Owner
Center features are:
1. Get recall info via opt-in email.
2. Check warranty and service information.
3. Manage and track service history.
4. Estimate vehicle value.
5. Make service appointments.
6. Receive discounts or special offers from GM (such as
incentives to sign up for the GM Card, discounted car rentals
and bonus airline miles).
Less obvious aspects of ownership include tasks that often
cause confusion or just frustration. Often consumers never
fully understand all the functions of vehicles’on-board

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computers, how to program the garage door opener, how to
find the right roof rack or where to find compatible
accessories. The owner’s manual is too brief. Dealers can’t
take the time to answer these questions. Where does the
consumer turn?
Dealers wanted better relationships with existing customers to
keep them coming back for service throughout the life of the
car.My GMLink facilitates a ongoing connection between the
dealer and the customer from the moment of purchase by
giving dealers a presence on a consumer’s My GMLink page—
blocking out other service competitors and creating more
reasons to interact with the GM dealer. My GMLink is an
important step in the development of a cost-effective
marketing platform. By using marketing dollars to create a
place where customers can accomplish critical tasks via the
Internet, GM can generate greater return per marketing dollar
spent and focus future spending against its most profitable and
potentially loyal customers.
Modem Media worked with GM to develop the overall vision an
strategy for My GMLink and its supporting business case. Their
approach included the use of qualitative and quantitative
research to determine the most important needs for
consumers, dealers and General Motors.
GM India has also launched a 24x7 call centre for instant
response anytime anywhere. Its a first by any auto
manufacturer in India, to attend to customer complaints,
servicing of vehicles and provide any information related to
GMI products and services round the clock with just one local
call to a centralised number from any landline or mobile phone
across the country. This is one of the many innovative
marketing strategies developed by the company in response to
the growing popularity of its Chevrolet and Opel brand of cars

172
to stand out against competition. The new centralised system
will be run by GM India itself instead of a select dealer driven
activity, offered by competition that works only through MTNL
phones. Starting with Delhi and NCR the new system will be
integrated with GMI's after sales service facility and is now
available on a unique single number - 3030-8080 - across
India. Customers calling from anywhere in the country will be
charged only for a local call with all distance charges being
borne by GM. "The objective of this initiative is to transform
the GMI contact centre into a world-class operation to achieve
significant improvement in customer satisfaction, service, and
quality. GM also plans to move to tele-based customer
experience surveys. The idea is to build a lifetime relationship
with the customer and act as an advocate in the pursuit of
finding a mutually agreeable solution to differences between
the customer and a specific retail facility. GMI recognizes the
critical role Customer Contact Centres play in building
customer satisfaction, loyalty, and repurchase. It is the focal
point for enquiries and concerns relating to issues arising from
the sale or potential sale of GMI products and the provision of
after sales service for existing GMI products.

The Customer Contact Centre is set to become the 'face' of GMI,


eventually encompassing all facets of in-bound and out-bound
relationship servicing and marketing, from resolving customer
concerns to pro-actively marketing GMI products and services.
Under the new business-operating model GMI seeks to improve
efficiencies, reduce churn, improve customer enthusiasm and
become more pro-active within the Customer Contact Centre by
means of moving towards an inbound /outbound call centre and
ultimately applying smarter technologies utilizing CRM solutions.

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CONCLUSION

The price of a car is just one-third of what it cost you over its

lifetime. Running and maintaining it make up the other two-thirds.

Take into account resale value and its real cost becomes clear.

Maruti Suzuki stands for value as much as it stands for

performance. In spite of rising input costs, we try our best to keep

prices down. Their running costs and resale values are unbeatable

too. Nothing matches the delight their cars deliver. In the JD Power

CSI study 2005, 85% of Maruti Suzuki owners stated that they

would definitely recommend the car they drive to someone else.

Infact, you don’t buy a Maruti Suzuki. You invest in it.

After the rash of new cars launches the past two years, the relative

lull in the auto industry is showing up in the customer satisfaction

indices. According to the 2005 four-wheeler Total Customer

Satisfaction (TCS) study conducted by the specialist division of TNS

Automotive, the automobile ownership experience or customer

ownership experience has declined in all areas compared to 2004.

The study is one of the largest syndicated automotive studies in

India, representing the responses of more than 7,000 new car

buyers. The comprehensive study covers over 50 models with

customer evaluations taken in the key areas of sales satisfaction,

product quality, vehicle performance and design, after-sales

service, brand image, and cost-of-ownership. The TCS index score

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provides a measure of satisfaction and loyalty a given model

enjoys with its customers. According to TNS Automotive, the

decline is predominantly for older, small and entry mid-size car

models. The ageing of these models seems to be posing a stiffer

challenge for manufacturers to sustain past performance levels at

a time when customer expectations are rising sharply.

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The study reveals a significant increase in the importance of sales

satisfaction, product quality (both performance and design) and

brand image since 2003, indicating rising customer expectations

over the years. This year's study shows the Maruti Suzuki Swift

and the Toyota Innova as the winners, with the two vehicles

achieving segment-best ratings by performing well in areas of

greater relevance, particularly product and brand image. Sales

satisfaction is weak in both these models, largely because of the

longer waiting time for new deliveries.

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-

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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.

Increasing budget for future purchases: Future intenders with a

budget of Rs 6 lakh plus have increased from 44 per cent in 2002

to 58 per cent in 2005. While first-time buyers are declining as a

composition of total volumes, the figure in absolute terms is high,

fuelled by the up-gradation by two-wheeler owners The study also

throws up the question as to whether it is also possible that the

first-time car buyer who is generally a two-wheeler owner, is

getting more fuel efficiency conscious and tending towards

postponing the car purchase decision due to the high cost of fuel.

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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.

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

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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

Mostly dealers don’t have their specific website

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


Shitsuke) should be put into practice at Dealership

Maruti should regard as generous discount offers


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

Maruti should advertise in Sports because sports are


increasingly cutting into the share of mass entertainment
channels

Maruti can start Money Bond Scheme instead of giving


Cash Discount with more value. Customers eligible for an
income bond, encashable after a 15year period.

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Information Needed

SALES PERFORMANCE FOR THE LAST


2YEARS (PRODUCT WISE) IN UNITS
AND IN RUPEES

Number Of Employees, different section wise with due


classification Like Skilled, Semi-skilled, Unskilled
workers, Officers, managers etc

Organizational Chart with Explanation

Annual Reports (last 5 years)

HISTORICAL GROUND OF THE


COMPANY

FUTURE PLANTS OF THE COMPANY

Product, Literature, photograph of the products,


technical details etc

List of Competitors

Future Plans, Export Strategy, Market Share of the


Comparative Area of the operation etc

You must include following in Conceptual discussion

• Consumer Behaviour

181
• Innovators
• Early Adopters
• Late Adopters
• Followers
• Laggards
• Jack

GUIDELINES

Certificate from Internal Guide


Certificate from Company
Preface
Acknowledgement

CHAPTER—1(Introduction)

The purpose of introduction is to introduce the research project to

the readers. It should contain a clear statement of the objectives of

research i.e., enough background should be given to make clear to

the reader why the problem was considered worth investigating. A

brief summary of other relevant research may also be stated so

that the present study can be seen in that context. The hypothesis

of study, if any and the definitions of the major concepts employed

in the study should be explicitly stated in the introduction of the

report. Almost equivalent to Executive Summary

Overview of Industry as a whole

182
Profile of the Organisation

Problems of the Organisation

Competition Information

SWOT analysis of the organization

Any Article related to (Target Marketing)

CHAPTER—2 Research Methodologies

Mainly this portion covers

OBJECTIVES

SCOPE OF THE STUDY

MANAGERIAL USEFULNESS OF STUDY

METHODOLOGY

CHAPTER—3 (CONCEPTUAL DISCUSSION – THEORETICAL

BACKDROP AND LITERATURE REVIEW)

CHAPTER—4 (DATA ANALYSIS)

183
CHAPTER—5 (CONCLUSONS AND SUGGESTIONS)

APPENDICES
Here sample Questionnaire, Analytical Master Charts and any other

relevant documents may be included

Bibliography

Reference Books, Journals, Newspaper, Web Sites, Reports, etc

are to be listed, out here

Like

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

184