Maruti Suzuki Limited

Marketing in Practice- A case study This knol discusses about the marketing practices followed by Maruti Suzuki Limited in India and the factors that have contributed to its phenomenal success. ByAditya Gupta Gowrishankar M Kumar Sujit Rajan Contents
more LinkCitationEmailPrint FavoriteCollect this page Company OverviewProduct CategoryBrand NamesCompany Vision and Core ValuesIndustry AnalysisSWOT AnalysisPEST AnalysisPorter's Five Forces analysisStrategic AlliancesBrand communication and STP analysis-

Company OverviewMaruti Suzuki India Limited (formerly Maruti Udyog Limited) is a subsidiary of Suzuki Motor Corporation of Japan and is India's largest passenger car company, accounting for over 45% of the domestic car market. It is the largest automobile manufacturer in India, both in terms of vehicles sold and revenues. It also exports its cars to a number of other geographies around the globe. Wikipedia Company Website

Product CategoryIt is predominantly present in the entry-level and mid-sized passenger car segment and also has presence in the premium and sports utility vehicle segments of the passenger car market.

Brand NamesMaruti and Suzuki are major brand names in India, highly respected for the products and services offered by them. It has them create some very strong Brand Names for their products. Entry-levelMaruti 800- It is the most iconic brand of the company and '800' is synonymous with 'Car' in India.

Other Brands include Omni, Zen, WagonR, Alto, Eeco, A-star and Gypsy. PremiumProminent brand names are Ritz, Swift, Dzire, SX4, Kizashi and Grand Vitara.

Company Vision and Core ValuesThe company states its Vision as"The Leader in the Indian Automobile Industry, Creating Customer Delight and Shareholder's Wealth; a pride of India."

Its core values are"CUSTOMER OBSESSION FAST, FLEXIBLE & FIRST MOVER INNOVATION & CREATIVITY NETWORKING & PARTNERSHIP OPENNESS & LEARNING"

Maruti has always been seen as a brand that creates value for the customers. Its continued focus on the customer satisfaction and customer delight has seen it top customer satisfaction surveys year after year. This brand philosophy has created an almost fanatical following for its cars and customers line up to buy its products even before they are launched.

Industry AnalysisThe automobile industry in India is one of the largest and fastest growing in the world. India manufactures over 17.5 million vehicles (including 2 wheeled and 4 wheeled) and exports about 2.33 million every year. It is the world's second largest manufacturer of motorcycles, with annual sales exceeding 8.5 million in 2009.

India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 3.7 million units in 2010. It is also the second fastest growing auto market after China.

SWOT Analysis StrengthsBrand Image- Brand of the masses

Existing Customer Base In-house R&D facilities Existing Dealer and Distribution network Highly fuel-efficient vehicles

WeaknessMarket Positioning- Budget end of the market Weak global imprint Relatively slow in introducing new technologies

OpportunityOverall growth of the auto industry Upward migration of 2-wheeler owners Increasing global demand for small, fuel efficient vehicles

ThreatRising crude oil prices Increasing competition from global auto giants Rising input costs

PEST Analysis PoliticalMaruti freed of Govt. control after disinvestment in 2003 Reduction in excise duty on small cars Strong government backing on policy, labour issues

EconomicStable economic policies Huge domestic demand Tax incentives for export Easy availability of finance

SocialRapid economic growth and rising income levels Increasing urbanization in all parts of India Development of better road infrastructure

TechnologicalHighly talented talent pool of engineers and workers Availability of latest technology in domestic markets Developed ancillary industries and vendor ecosystem

Porter's Five Forces analysis-

Competitive rivalry within the IndustryThe small car market is extremely competitive today, and existing players have taken the fight to Maruti after gaining experience in the Indian market. Maruti used to be a dominant player in its segments and could dictate terms earlier, but today over half a dozen players are present in every sub-segment in which Maruti operates. It is constantly forced to revamp its models and bring the best to the table to survive the onslaught of existing players which include Hyundai, Tata, Fiat, Ford, GM, Volkswagen and Nissan.

A comparison report and video.

Comparison- Swift v/s Others

Ford Figo and VW Polo are posting a formidable challenge to Maruti's cash cow- Swift.

Threat of new playersThe lucrative Indian market has lured most global auto giants and the threat of new players in Maruti's bread-and-butter small car segment is rising. Toyota, Volkswagen have just entered this market with Liva/Etios and Polo/Vento offerings and are directly targeted at the WagonR/ Swift/ Dzire offerings of Maruti. Honda is also planning to enter the small car space.

The barrier to entry for existing auto players are moderate since it takes a couple of years to develop a new product for the segment.

Threat of substitute goodsThe main substitutes for cars are public transport like buses and trains. But these services are not very developed in most parts of India and they lack the flexibility of a personal vehicle. Moreover, owning a vehicle is considered as a status symbol in India. Hence the threat of substitute goods is considerably low.

Bargaining power of buyersWithin the small car segment, the bargaining power of customers can vary sharply. In case of Swift Dzire, the demand is very strong and the waiting period has risen to almost 5 months. Customers are willing to pay a premium to get their vehicles in advance. On the other hand, Versa had very poor demand in the market, and Maruti had to cut prices by over a lakh to push sales. For slow selling variants of a vehicle, companies can offer discounts of as much as 15% on the ex-showroom price.

Bargaining power of suppliersThe ecosystem of ancillary industries is fairly developed and Maruti has invested considerable sums to bring their quality up to global standards. These suppliers are mostly located within the company premises and in many cases Maruti would be their sole buyer. As such these players have limited bargaining power.

Strategic AlliancesMaruti's parent Suzuki Motor Corporation had entered into a strategic partnership with Volkswagen after Volkswagen acquired a 20% stake in the former in 2010 (A Report). It was intended to focus on vehicle and engine development. Very recently though, the partnership ran into troubled waters with Suzuki feeling it was not being given equal treatment in the alliance.

Maruti also has a license from Fiat to produce its Multijet diesel engine which does duty in the Swift, Ritz and Dzire variants.

Brand communication and STP analysis-

Maruti has divided its target market into a number of segments based on the aspirations of each target group. Based on continued feedback from each target group, it has refined its products over the years. Its marketing communication has also been designed keeping in mind the target audience of each product. Maruti as a brand is recognised with providing the most fuel efficient cars in India, which is the most important consideration for a majority of Indians buying a car. The following ad highlights the same-

Kitna Mileage deti hai

The ad video highlights the most important strength of the company- fuel efficient cars- and was aired repeatedly during the Cricket World Cup 2011 and IPL-4.

Its extensive service network is present in every corner of India, and you can enjoy complete peace of mind if you have a Maruti. The same message was conveyed by the following ad film.

Maruti Service Station

Alto- A basic commuter for the family. The brand communication was more at an emotional level and the lovely jingle in the ad film formed just the right connect with the buyer. It is the largest selling car in India today.

Alto jingle- Boondo mein

Swift- The name said a lot about the brand, the hatchback could be more than just a family commuter. The swift was positioned as a sports hatch for the masses and the brand positioning and communication focused on the same. Performance and handling were words people did not associate with Maruti, but the Swift managed to change that perception for good.

Swift- Curves

Swift- Frequent Flyer

Wagon R, Zen and Ritz are family centric brands while A-Star is for the youth brigade. The SX-4 is targeted at the business-end and male audience with its tagline "Men are Back". It focuses on the driving pleasure and strength and safety of the vehicle, typical manly qualities.

Marketing Mix (4P's Approach)ProductsTailor made for India, focusing on the requirement of each sub- section of the audience.

PriceBest in segment price for each of its products, offering the best value to its customers.

PlaceOmnipresent in India, even where food and shelter may be tough to find. (see video above- Maruti Service Station). It is focusing both on the rural and urban markets.

PromotionMix of 1-on-1 marketing, and TV and outdoor advertisements. The word-of-mouth promotion is also very strong for the company.

Final WordMaruti is the brand with which you cannot go wrong, whatever the product may be. The strong presence in India and the goodwill the brand has created and communicated over the years is the unparalleled in the transportation industry.