MARUTHI-800

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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 nonAC 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 MODELS M800 STD E1 STD-E1 AC STD-E2-M STDAC E2M OMNI-E OMNI-MPI OMNICARRY OMNI-LPG OMNI-AMB VERSA-DX VERSA-DX2 VERSA-SDX VERSASTD5S BALENOLXI BALENOVXI BALENOALTURA ZENLX ZEN-LXI ZEN-VXI ZEN-DI ALTO-STD ALTO-LX ALTO-LXI WAGON R LX WAGON VXI WAGON R AT ESTEEM-D ESTEEM-LX ESTEEM-LXI ESTEEM-VXI ESTEEM-DI GYPSY-KST

OMNI

VERSA

BALENO

ZEN

ALTO

WAGONR

ESTEEM

EXSHOWROOM PRICES 191464 214217 211072 233875 237372 240261 211009 239059 271857 406290 444448 497102 332277 565720 636698 685586 331920 356631 382176 373947 233279 269561 289394 331189 377170 467365 479182 417116 447236 482424 505186 475718

ON ROAD PRICES 217390 242968 239434 265073 269011 272259 221079 271384 273467 459758 502737 562026 376407 640394 720453 775595 375326 403109 431834 424092 266407 305209 327505 375180 426965 528232 542787 471957 505875 545494 572116 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.

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