LIVE PROJECT TOPIC

“Find the length, width and depth of the product

Manufactured by Maruti udyog Ltd”
A live project Report submitted in partial fulfillment of
requirement for 2nd Semester of MBA program of class
2006-2008, INC Mysore

Under the guidance of

Mrs. Nagaratna
FACULTY [MM]

Submitted by
PUNEETH D.J
LOHIT K
VISHWA B.M

ICFAI
NATIONAL COLLEGE
Mysore
 DECLARATION

I hereby declare that this live project work entitled “Find the length, width
and depth of the product Manufactured by Maruti udyog Ltd .” is carried
out under the guidance of my faculty Mrs. Nagaratna and with the help of
Branch head Mr. Venkatesh the empirical findings in this report are based on
the personal interview.

PUNEETH D.J
LOHIT K
VISHWA B.M
 ACKNOWLEDGEMENT

The success of this project is the outcome of Guidance and valuable

suggestions provided by all the concerned without whom the project could not
fide on the right back.

I would like to express my sincere gratitude to Principal, Col.G.M.Devaya,

VSM, National College, and Mysore for giving me an opportunity to do this project
work.

I express my sense of deep gratitude to Mrs.Nagaratna Faculty of

“Managerial Effectiveness” ICFAI NATIONAL COLLEGE, Mysore for his
constructive inclusions and timely suggestions in the preparation of this project
report. Finally, I will be failing in my duty, if I do not thank my beloved Mother,
friends and well wishers for their enthusiastic support and who have directly or
indirectly helped in some way or the other in making this project a success

PUNEETH D.J
LOHIT K
VISHWA B.M
 SYNOPSIS

My Live project relates to “Find the length width and depth of the product
Manufactured by maruti udyog ltd”
I interacted with Mr.Yogesh, the Marketing Manager of the MONDOVI Showroom, gave
me a relevant information which I required fir my live project.

OBJECTIVES
To improve the communication skill by interacting with people.
Practical exposure.
To analyze the marketing price and marketing strategies.

LIMITATIONS
Limitation of time.

RESEARCH METHODOLOGY:
• Primary data:
I collected relevant information by direct with the concern party
• Secondary data:
I collected some other information through website.
 CONTENTS

• INTRODUCTION

• PRODUCT LINE

• PRICING STRATEGIES

• PROMOTIONS & DISTRIBUTIONS

• PRODUCTION AND R&D

• CONCLUSION

• BIBILIOGRAPHY
Introduction
In its efforts to fulfill the growing demand for personal transport
vehicles, the Government of India (GOI) established MUL in February
1981 through an Act of Parliament. It was incorporated to take over the
assets of the erstwhile Maruti Limited set up in June 1971 and wound
up by High Court order in 1978. In October 1982, the GOI signed a joint
venture agreement with Suzuki Motor Corporation (SMC) of Japan. MUL
received technology support from SMC. On the other hand, SMC got
support from the Indian government, which helped it get import
clearances for manufacturing equipment and obtain land for its factory.
At the time of its establishment, the objectives of MUL 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 growth.

In an era when owning a car was a distant dream for a vast

majority of Indians, MUL rolled out its first car, the M800. The company
labeled it a people’s car, with a 796cc 3-cylinder engine that delivered
39.5 bhp at an affordable price of Rs. 65,000. The first vehicle was
released for sale in December 1983. Initially, the car was criticized for
its diminutive size, but it proved to be spacious enough to carry four
adults. Better technology and an affordable price due to a higher level
of indigenization helped MUL achieve a dominant position in the Indian
passenger car market.
 M800’s success motivated MUL to launch a van version, named
‘Omni’ in 1984. The van proved to be highly economical and was
appreciated among large families and taxi operators for its
functionality. Within a span of ten years, MUL broke all records in the
industry. In 1994, Mul became the first Indian company to produce 1
mn vehicles per annum. In 2003, MUL reached the 4 mn production
mark, which made it the highest volume car manufacturer in Asia,
outside Japan and Korea. MUL launched 10 different models with a
number of variants in the next two decades.

In the mid 1990s, when the Indian car market was opened to
foreign players, many multinational companies entered the market by
establishing joint ventures and subsidiaries. The entry of foreign
players like Daewoo Motors, General Motors, Daimler-Benz, Hyundai
and Honda, intensified the competition in the automobile sector. Indian
income levels were rising – farm incomes also showed an upward trend
and customer preferences witnessed a significant shift due to greater
exposure to the latest automobile technologies. These factors made car
manufacturers revamp their products, pricing and marketing and
distribution strategies.
The product line

The Indian passenger car market was divided into various segments and sub
segment on the basis of price, size and other factors MUL had a presence in all the
segment and sub segment.

Segment A

Fig

This segment was further divided into three sub sub-segment – AZ the
small entry level segment. A-Z the compact mid size segment and A3 the
premium car segment. M800 was the only car in the A-1 segment. Hailed as
the people’s car, M800 was the world’s cheapest car. It became the generic
term for “Small car” in India, since it was the first car of a majority of
Indian’s car owner’s , the vehicle was criticized for its diminutive
proportions but it worked well on the Indian roads. It was spacious enough
go carry four adults and was well suited to driving in overcrowded city
conditions. Till early 2000, M800 had a 100 percent market share in the A,
segment, however, with the turn of the century. Sales started to stagnate. To
tackle this problem MUL flashed the prices of M800 by Rs. 15,000 to Rs.
18,000 across its variants in July 2002. The sales of the car then averaged
12,677 units per month and the model reported on all time high sales of
20,687 units in March 2003 M800 contributed significantly to MUL’s
bottom line.
A2 – Segment

fig

With the changing market dynamics, analyst pointed out that a

substitution effect was becoming evident in the industry. Thus the
small/entry – level (A-1) segment was slowly getting eroded by the compact
onset – size (A2) segment. From an industry perspective. The profit margins
are higher in the mid size segment, while small cars provided leas in terms of
margins but ultimately churned out more profits by selling in high volumes.
In the A2 – segment, with price ranging from 0.3 to 0.45 mm and an engine
capacity in the range of 1000 to 1300cc, MUL offered three models named
Alto, Zen, and wagon R.

Zen was launched in 1993 with its improved technology and

performance, Zen soon emerged or a leader in the passenger car segment. It
delivered an ideal combination of speed, power and fuel efficiency. It came
with an international look, having better exteriors and interiors than M800.

In December 1999, MUL launched another midsize segment car

named wagon R. It claimed to provide completely hassle free driving with a
smother pick up and faster acceleration. Wagon – R provided ample leg
space for tall people and was equipped with several innovative features. It
has 1061cc MPF1 low friction engine providing better fuel economy and a
smoother ride. The central locking system and other features like multi trip
meter electronic tachometer and warning alarms as reminders for switching
off lights and removing the key from the ignition.

In September 2000, MUL launched Alto LX, its variants Vxi and Lxi
in August 2001 and May 2002 respectively also was designed in tune with
the latest international trends in automobile styling priced. Slightly higher,
Alto had more power and low emission than M800 and was a fuel efficient
car. There were several comfort features like Ac with heater, tinted glasses
and remote fuel lid opener in the new model. The Lxiversion had electronic
power steering.

A-3 Segment:
fig

MUL offered two models, the esteem and Boleno. Esteem had three variants Lx,
Vx and Ax launched in November 1994 November 1995 and June 1996 respectively.
Esteem gained a lot of popularity as an A3 segment car with its supervisor features and
good looks. In November 1999, MUL launched Baleno a 1600 cc, 3-box, car in the
premium segment. T he car provided a perfect mix of comfort performance ease of use
and safety. It boasted features like bucket seats, tilt, steering, central locking electrically
adjustable outside rear view mirrors power steering and power windows.
Segment C

Fig

K Launched in 19783, amino the C segment van model maintained a

dominant position in the market. It claimed to be a family car providing
luxury of space; it provided ample headroom and legroom to provided
comfort during long journeys and also had ample luggage space.

Another offering of MUL in the c-segment was versa lounched in

2001. it came in three variants. Including versa Dx1 versa Dx2, and versa
SDX. The prices ranged from Rs. 4, 01,000 to Rs. 4, 92,000. Initially the
model did not do well in the market. To reposition it, MUL launched a new
multipurpose variant of versa on March 06, 2004. This model aimed at
providing on excellent upgrade option for the large omni customer base.
Priced at Rs. 327817 the new five seated model provided more space and
better performance. Besides providing comfortable seating space for five
people it also provided enough luggage space.

By 2004, M800 sales were on the declining path, for the three months
from April to June 2004, 31,874 units of M800 were sold, a 22% decline as
compared to the same period in 2003 the products in the A2 segment
exhibited decent growth.
THE PRICING STRATEGY

Due to the fierce competition in the Indian passenger car

industry, price emerged as an important factor affecting the purchasing
decisions of customers. Since it had been in the industry for more than
two decades, and as a market leader, MUL adopted aggressive pricing
strategies. The company had products at various products.

In early 2000, in spite of increased sales tax and higher costs due
to new technology inputs, MUL opted for price cuts. In May 2000, the
price of M800 STD MPI version was reduced to Rs. 212,446. The Euro I
M800 model was priced at Rs. 198,979, M800 EX at Rs. 241,796 and
M800 DX at Rs. 259569. The prices of M800 were further slashed by Rs.
15,000 and Rs. 18,000 for some variants in 2002. Explaining the price
cuts, Khattar said, “The focus is on offering new upgraded vehicles at a
low price.” However, industry analysts perceived these price cuts as a
desperate measure to revive flagging sales and regain market share
when other strategies had failed.

When Alto was first introduced in India, 74% of its components

were locally produced. With rising competition in the A-2 segment, MUL
increased the indigenization levels to 90% and reduced the price of
Alto. In September 2003, MUL reduced the price of Alto by Rs. 23,000
to create a new segment between A1 and A2. After the price reduction,
Alto Lx was priced at Rs. 0.265 mn (ex showroom), Alto Lxi at Rs. 0.285
mn, and the top-end Alto Vxi at Rs. 0.366 mn. In April 2004, MUL
launched a non-AC variant of Alto priced at Rs. 0.231 mn. Commenting
on the price reduction, Khattar said, “we have almost placed the non-
AC in the entry level category along with Maruti 800, while Lxi gives
customers the option to choose a car between the entry level category
and the compact car segment.
With this price cut, Alto (Standard E2) costed Rs. 264,407 (on road),
about Rs. 28,000 more than M800 (E2) which was priced at Rs. 236,419
(on road). MUL sources later clarified that the reason for the new price
positioning of Alto was to offer a variety of features and price points to
the entry level customers. About 70% of M800 buyers were non-AC
customers; this was why a non-AC version of Alto was introduced. MUL'’
strategy was to position Alto as an entry-level car in metros and mini
metros. MUL sources remarked, "our strategy is that the new prices,
together with cheap and convenient car finance, will make the Alto a
very attractive option for the large number of first-time car buyers as
well as customers who wish to upgrade from a Maruti 800.”

MUL-PRICES OF VARIOUS MODELS

 VARIANTS EX- ON
SHOWROOM ROAD
MODELS PRICES PRICES
STD E1 191464 217390
STD-E1 AC 214217 242968
M800 STD-E2-M 211072 239434
STDAC E2M 233875 265073
OMNI-E 237372 269011
OMNI-MPI 240261 272259
OMNI OMNICARRY 211009 221079
OMNI-LPG 239059 271384
OMNI-AMB 271857 273467
VERSA-DX 406290 459758
VERSA-DX2 444448 502737
VERSA VERSA-SDX 497102 562026
VERSASTD5S 332277 376407
BALENOLXI 565720 640394
BALENOVXI 636698 720453
BALENO BALENOALTURA 685586 775595
ZENLX 331920 375326
ZEN-LXI 356631 403109
ZEN ZEN-VXI 382176 431834
ZEN-DI 373947 424092
ALTO-STD 233279 266407
ALTO-LX 269561 305209
ALTO ALTO-LXI 289394 327505
WAGON R LX 331189 375180
WAGON VXI 377170 426965
WAGONR WAGON R AT 467365 528232
ESTEEM-D 479182 542787
ESTEEM-LX 417116 471957
ESTEEM ESTEEM-LXI 447236 505875
ESTEEM-VXI 482424 545494
ESTEEM-DI 505186 572116
GYPSY-KST 475718 537943

PROMOTION AND DISTRIBUTION

 In the early 2000s, MUL also focused on promotion and distribution to face
intense competition. The company devised various innovative promotional
strategies. With interest rates declining from 12% to as low as 8% in automobile
finance, MUL used financing as a major tool to drive up its car sales. The overall
percentage of cars being financed through automobile loans increased from 65% in
1998 to over 85% in 2003. Moreover, car loans which were earlier approved in two
weeks or more were cleared within 48 hours. In early 2004, MUL tied-up with
State Bank of India to offer an attractive car financing scheme to MUL’s
customers.

Under this scheme MUL offered easy finance options for M800, SBI
offered a loan of Rs. 160,000 for tenure of seven years at equated monthly
installments of Rs. 2,599. This was a unique offer in the industry at the time since
car loans were usually offered for five years. The finance scheme had an interest
rate of 9.5%, which was much lower than what SBI charged for two wheeler loans.

To promote M800, MUL had also entered into a tie-up with State Bank of Patiala,
to offer tailor-made schemes for rural farmers. Under this scheme, installments
were payable every six months after the “Rabi” and “Khariff” harvests in Punjab.
MUL also participated in rural functions like “Kisan Mela” (in Ludhiana), the
“Kila Raipur Sports Mela” (in Punjab), “Sonpur Mela” (in Bihar) and “Pushkar
Mela” (in Rajasthan). These initiative helped MUL create awareness about its
products, primarily M800, among its rural customers. The company attracted them
by offering schemes like car booking at just Rs. 500. They were also offered three
silver coins free along with every car booked.

In order to maximize its reach, MUL developed an extensive network of

dealers, distributors and service centers. The company had established 253 outlets
across the country by August 2003. MUL also had the strongest network of service
stations. In an effort to improve its relationship with dealers, Khattar made
personal visits to almost all its dealers across the country. He motivated them and
ensured them that the company would always support its high performers. MUL
dealers sometimes took loans to buy vehicles from the MUL factory; MUL decided
to bear some of these interest costs to make it easier for the dealers to stock the
company’s vehicles. MUL’s other businesses like car financing, insurance and
True Value, also proved profitable for the dealers.

Besides having a strong network in the country, MUL also had a strong
international presence. Its sales network was spread over 70 countries worldwide
spanning Europe, South and Central America, Africa, Oceania and Asia. MUL also
launched a website – Maruti Suzuki Dealer Net to enhance its customer reach. At
this website, customers could access Maruti dealers across the country and avail of
their varied services and offers online.

During its two decade-long history, MUL has been recognized as the world’s first
car company to rank first in its domestic market consistently both in terms of
market share and customer satisfaction. It was the only company to have been top
ranked in the JD Power Customer satisfaction study, four times consecutively from
2000 to 2003.

Production and R&D

Spread over a sprawling 297 acres with 3 fully-integrated

production facilities, the Maruti Udyog Plant has already rolled
out over 4.3 million vehicles. In fact, on an average, two vehicles
roll out of the factory every minute. And it takes on an average,
just 14 hours to make a car. More importantly, with an incredible
range of 11 models available in 50 variants, there's a Maruti
Suzuki made here to fit every car-buyer's budget. And dream.
 Production Milestones

1st vehicle produced, December 1983

1,00,000 vehicles produced by August,

1986

5,00,000 vehicles produced by June,

1990

10,00,000 vehicles produced by March,

1994

15,00,000 vehicles produced by April,

1996

20,00,000 vehicles produced by

October, 1997

25,00,000 vehicles produced by March,

1999

30,00,000 vehicles produced by June,

2000

35,00,000 vehicles produced by

December 2001

40,00,000 vehicles produced by April,

2003

45,00,000 vehicles produced by April,

2004

CONCLUSION

MUL is the market leader in the passenger car industry in India the
management believed that M800 continued to be the answer to the
first-time car buyers needs this was particularly true in the smaller
towns, due to the fierce competition in the Indian passenger car industry
price emerged as an important factor affecting the purchasing decision
of customers since it had been in the industry for more than two decades
,and as market leader ,MUL adapted aggressive pricing strategies the
had product at various segment when the Indian car market was opened
to foreign players, many multination companies entered the market by
establishing joint ventures and subsidiaries. The entry of foreign players
like Daewoo Motors, General Motors, Daimler-Benz, Hyundai, and
Honda, intensified the competition in the automobile sector. Indian
income level were rising –farm incomes also showed an upward trend
and customer preference’s witnessed a significant shift due to greater
exposure to the latest automobile technologies these factor made car
manufacturers revamp their product,pricing,and marketing and
distribution strategies. the growing competent gave the consumers more
choice, and the industry exhibited healthy growth with increasing sales
volumes .maintain a near monopoly in such a scenario was a difficulty
task for MUL.The aggressive pricing strategy helped MUL to boost its
sales , market share and customer satisfaction remained areas of
concern for the company ,MUL wanted to maintain a sustainable level
of growth in the market ,and for this price cuts were not sufficient
.something more was needed .commenting on pricing strategy as a tool
to face competition

BIBILIOGRAPHY
• Primary data:
I collected relevant information by direct with the concern party

• Secondary data:
I collected some other information through websitewww.marutiudyog.com.