analysis of four wheeler industry luxry cars smbp
DESCRIPTION
it is a detailed report on automobile ananlysisTRANSCRIPT
ACKNOWLEDGEMENT
No presentation is the work only of the author. I owe much to the people who have
played significant role in the development of the project . I have immensely benefited
from the comments, observations made by several individuals including Dr. Vishal
jain, Head of Department
My special thanks to Mrs. Maya Lohani(Senior Lect.) & Ms. Swati Verma(Lect.) for
the guidance in preparing this project report.
PREFACE
1
This project is the result on “Analysis of four wheeler industry”
Project work is an integral part of the MBA course. This practical experience helps the student to the real business world closely, which in turn widely influences his/her concepts and perfection.
The Marketing play an important role in accomplishing the objectives of the
organization. If the market research is not properly done, the organization will not be able
to accomplish desired results. Therefore organization try to meet the needs of their
consumers as fully as possible to contribute their maximum for the achievement of the
business objective.
The project assigned was Analysis of four wheeler industry. I
personally met all the respondents for getting all the information.
2
ABSTRACT
The automobile industry, one of the core sectors, has undergone metamorphosis with thea d v e n t o f n e w b u s i n e s s a n d m a n u f a c t u r i n g p r a c t i c es i n t h e l i g h t o f l i b e r a l i z a t i o n a n d globalization. The sector seems to be optimistic of posting strong sales in the couple of yearsin the view of a reasonable surge in demand. The Indian automobile market is gearing towards international standards to meet the needs of the global automobile giants and becomea global hub.A detailed analysis of Automobile industry has been covered in respect of past growtha n d p e r f o r m a n c e . U n d e r t h i s p r o j e c t t o b e t t e r u nd e r s t a n d t h e I n d u s t r y w e h a v e u s e d Fundamental and Technical tools to make it more authentic n meaningful. An E.I.C approachhas been followed under Fundamental Analysis which covered effect of Recession, the impact of inflation, FDI’s, Export, GDP etc. on Automobile Industry. The Industry Analysishas been done with the help of five forces model, BCG Matrix, SWOT analysis, industry lifecycle and the industry specific index..For Industry Analysis as a part of Fundamental tool we have undergone with thecomparative analysis of TATA Motors as our leading Industry with Maruti Suzuki India’slargest Car manufacturer. The fundamental aspect consists f inancial and Non-Financialanalysis of both the Industry. In the Technical aspect we have considered Share priceanalysis, moving average, moving average crossover, Bollinger bands and M.A.C.D. of boththe Industry by keeping TATA Motors as our leading Industry.At the end
3
conclusion and recommendations have been specified so as to make the research work more meaningful and purposeful.
4
EXECUTIVE SUMMARY
The present study is about the four wheeler industry.The aim of the study is to know the
consumer preference about the various products of four wheeler. Consumers have higher
expectations than ever before. They want products to match these expectations. They also
want accurate, up-to-date and useful information about what they buy. In short,
consumers want the facts. This growth of consumer power is known as consumerism.
In the area of fast moving consumer goods (FMCG), marketing has become a specialized
and complex process. When developing products, organizations try to meet the needs of
their consumers as fully as possible. This is vital if they want to do better than their
competitors. This process of development around the needs of its consumers is called
marketing orientation.
5
TABLE OF CONTENTS
1. Introduction of company
a. Product detail, Historical perspective
b. Marketing planning
c. Comparison of market-market share, growth rate
2. Market segmentation Target market
a. Mass marketing strategy
b. Concentrate marketing strategy
3. Marketing Research Sales analysis
a. Types of consumer that constitute the potential market
b. Size & location of market
c. Growth and concentration of market
d. Consumer preference for particular brand
4. Management Decision
a. Pricing policy of company
b. Distribution channel of product Direct marketing Whole seller & retailer
c. Whole seller-Retailer-Customer
5. Sales promotion strategya. Publicityb. Advertisingc. Personal
6. Customer behaviour
a. Product adoption
b. Customer satisfaction
7. SWOT analysisFormulation Implementation & evaluation of market strategy
8. Conclusion
6
INTRODUCTION OF FOUR WHEELER INDUSTRY
BIRTH OF THE CAR
The birth of the car as we know it today occurred over a period of years. It was
only in 1885 that the first real car rolled down on
to the streets. The earlier attempts, though
successful, were steam powered road-vehicles.
The first self-propelled car was built by
Nicolas Cugnot in 1769 which could attain speeds
of upto 6 kms/hour. In 1771 he again designed another steam-driven engine which ran so
fast that it rammed into a wall, recording the world’s first accident.
In 1807 Francois Isaac de Rivaz designed the first internal combustion engine.
This was subsequently used by him to develop the world’s first vehicle to run on such an
engine, one that used a mixture of hydrogen and oxygen to generate energy.
This spawned the birth of a number of designs based on the internal combustion
engine in the early nineteenth century with little or no degree of commercial success. In
1860 thereafter, Jean Joseph Etienne Lenoir built the first successful two-stroke gas
driven engine. In 1862 he again built an experimental vehicle driven by his gas-engine,
which ran at a speed of 3 kms/hour. These cars became popular and by 1865 could be
frequently espied on the roads.
The next major leap forward occurred in 1885 when the four stroke engine was
devised. Gottileb Damlier and Nicolas Otto worked together on the mission till they fell
apart. Daimler created his own engines which he used both for cars and for the first four
7
wheel horseless carriage. In the meanwhile, unknown to them, Karl Benz, was in the
process of creating his own advanced tri-cycle which proved to be the first true car. This
car first saw the light of the day in 1886.
The season of experiments continued across the seas in the United States where
Henry Ford began work on a horseless carriage in 1890. He went several steps forward
and in 1896, completed his first car, the Quadricycle in 1896. This was an automobile
powered by a two cylinder gasoline engine. The Ford Motor Company was launched in
1903 and in 1908 he catapulted his vehicle, Model T Ford to the pinnacle of fame.
Continuing with his innovations, he produced this model on a moving assembly line, thus
introducing the modern mass production techniques of the automobile industry.
The modern car, therefore comes from a long list of venerated ancestors, and its
lineage will, hopefully
ADVENT OF CARS IN INDIA
From the singsong rhythm of the bullock cart to
the jet-age, India has traveled a long way. An average
Indian’s dream car may not be the design-savvy Honda or
the stately limousine, but he sure can dream, and afford,
the Maruti now.
It was in 1898 that the first motorcar rode down India’s
roads. From then till the First World War, about 4,000
cars were directly imported to India from foreign manufacturers. The growing demand
for these cars established the inherent requirements of the Indian market that these
merchants were quick to pounce upon.
8
The Hindustan Motors (HM) was set up in 1942 and in 1944, Premier
Autobackmobile (PAL) was established to manufacture automobiles in India. However, it
was PAL who produced the first car in India in 1946, as HM concentrated on auto
components and could produce their first car only in 1949.
It was left to another company, Mahindra and Mahindra (M&M) to manufacture
sturdier utility vehicles, namely the American Jeep.
In the 50s, the Government of India granted approval to only 7 car dealers to
operate in India - HM, API, ALL, SMPIL, PAL, M&M and Telco. he protectionist
policies continued to remain in place. The 60s witnessed the establishment of the two-
three wheeler industry in India and in the 70s, things remained much the same.
Since the 80s, the Indian car Industry has seen a major resurgence with the opening up
of Indian shores to foreign manufacturers and collaborators.
The 90s have become the melting point for the car industry in India. The consumer is
king. He is being constantly wooed by both the Indian and foreign manufacturers.
Though sales had taken a dip in the first few months of 1999, it is back to boom time.
New models like Maruti’s Classic, Alto, Station Wagon, Ford’s Ikon, the new look
Mitsubishi Lancer are all being launched with an eye on the emerging market.
In these last years of the millennium, suffice it is to say that Indian cars will only grow
from strength to strength.
AUTOMOBILE INDUSTRY – WHEELS OF CHANGE:
India had its date with this wonderful vehicle first time in 1898. Then for the nextf i f t y y e a r s , c a r s w e r e i m p o r t e d t o s a t i s f y d o m e s t i c d e m a n d . B e t w e e n 1 9 1 0 a n d 2 0 ' s t h e a u t o m o b i l e i n d u s t r y m a d e a h u m b l e b e g i n n i n g b y s e t t i n g u p a s s e m b l y p l a n t s i n M u m b a i , Calcutta and Chennai. The import/assembly of vehicles
9
grew consistently after the 1920's,c r o s s i n g t h e 3 0 , 0 0 0 m a r k i n 1 9 3 0 . I n 1 9 4 6 , P r e m i e r A u t o m o b i l e L t d ( P A L ) e a r n e d t h e distinction of manufacturing the first car in the country by assembling 'Dodge DeSoto' and'Plymouth' cars at its Kurla plant. Hindustan Motors (HM), which started as a manufacturer of auto components graduated to manufacture cars in 1949. Thanks to the Licence Raj whichr e s t r i c t e d f o r e i g n c o m p e t i t o r s t o e n t e r t h e I n d i a n c a r m a r k e t , I n d i a n r o a d s w e r e r u l e d b y Ambassador Car from Hindustan Motors and the Fiat from Premier Auto Ltd. for many of theinitial years.In 1952, the GOI set up a tariff commission to devise regulations to develop ani n d i g e n o u s a u t o m o b i l e i n d u s t r y i n t h e c o u n t r y . A f t er t h e c o m m i s s i o n s u b m i t t e d i t s r e c o m m e n d a t i o n s , t h e G O I a s k e d a s s e m b l y p l a n t s , w h i c h d i d n o t h a v e p l a n s t o s e t u p m a n u f a c t u r i n g f a c i l i t i e s , t o s h u t o p e r a t i o n s . A s a r e s u l t G e n e r a l M o t o r s , F o r d a n d o t h e r a s s e m b l e r s c l o s e d o p e r a t i o n s i n t h e c o u n t r y . T h e y e a r w a s 1 9 5 4 a n d t h i s d e c i s i o n o f t h e government marked a turning point in the history of the Indian car industry. The GOI alsohad a say in what type of vehicle each manufacturer should make. Therefore, each productwas safely cocooned in its own segment with no fears of any impending competition. Also,n o n e w e n t r a n t w a s a l l o w e d e v e n t h o u g h t h e y h a d p l a n s o f a f u l l - f l e d g e d m a n u f a c t u r i n g p r o g r a m . T h e r e s t r i c t i v e s e t o f p o l i c i e s w a s c h i e f l y a i m e d a t b u i l d i n g a n i n d i g e n o u s a u t o industry. However, the restrictions on foreign collaborations led to limitations on import of t e c h n o l o g y t h r o u g h t e c h n i c a l a g r e e m e n t s . I n t h e a bs e n c e o f a d e q u a t e t e c h n o l o g y a n d purchasing power, the car industry grew at a snail 's pace in the 60’s. The demand for cars in14
1960 was to the tune of 15,714. In the next two decades the number increased to 30,989 i.e. aCAGR of only 3.5 per cent.
10
INDUSTRY STRUCTURE
Structure:
The Indian Automobile industry can be broadly classified into :
2/3 wheelers
Passenger cars
Commercial vehicles (LCV/MCV/HCV)
UV (Utility Vehicles)
Tractors
The models in the car market can be fitted to different segments as
given below:
Category Models
Economy segment (up to Rs 0.25 mn) Maruti Omni, Maruti 800 etc
Mid size segment (Rs 0.25-0.45 mn) Fiat Uno, Hyundai Santro, Maruti Alto,
Tata Indica etc
Luxury Car Segment (0.45-1mn) Tata Indigo, Honda City,etc
Super luxury segment (above Rs 1mn) Mercedes Benz & other imported models
11
T h e e c o n o m y s e g m e n t h a s a v e r y l a r g e f o o t h o l d o v e r
t h e I n d i a n a u t o m o b i l e m a r k e t a s compared to the mid-size
and luxury segment
Segment Market Share (%)
Economy 90.2
Mid size luxury 9.8
12
SEGMENTATION OF AUTOMOBILE INDUSTRY
T h e a u t o m o b i l e i n d u s t r y c o m p r i s e s o f H e a v y v e h i c l e s
( t r u c k s , b u s e s , t e m p o s , t r a c t o r s ) ; p a s s e n g e r c a r s ; T w o -
w h e e l e r s ; C o m m e r c i a l V e h i c l e s ; a n d T h r e e -
w h e e l e r s . F o l l o w i n g i s t h e s e g m e n t a t i o n t h a t h o w m u c h
e a c h s e c t o r c o m p r i s e s o f w h o l e I n d i a n Automobile Industry
13
EVENTS AND MILESTONES
A behind- the- scenes look into the making of one of India's most vibrant
industries. The landmarks along the way...
1928- The first imported car was seen on Indian roads
1942- Hindustan Motors incorporated
1944- Premier automobiles started
1948- First car manufactured in India
1953- The Government of India decreed that only those firms which have a
manufacturing program should be allowed to operate
1955- Only seven firms, namely, HM, API, ALL, SMPIL, PAL, M& M and TELCO
received approval.
1960 - 1970 - The two, three wheeler industry established a foothold in the Indian
scenario.
1970 - 1980 - Not much change was witnessed during this period. The major factors
affecting the industry were the implementation of the MRTP Act( Monopolies and Trade
14
Restrictive Practices Act), FERA (Foreign Exchange Regulation Act) and the Oil Shock
of 1973 and 1979.
1980 - 1990 - The first phase of liberalization was announced by the Govt. -With the
liberalization of the Government's protectionist policies, the advantages hitherto enjoyed
by the Indian car manufacturers like monopoly, oligopoly, slowly began to disappear.
This period is also marked by the entry of a large number of firms in the market. 4
Japanese manufacturers entered the Commercial Vehicle and Two- Wheeler market.
The Government agreed to the demand for allowing foreign collaboration in the
automobile sector
The industry witnessed a resurgence due to major policy changes like relaxation in
MRTP and FERA, delicensing of some ancillary products, broad banding of the products
and modification in the licensing policy. Also, the concessions it gave to the private
sector and the new foreign collaboration policy, all resulted in higher growth and better
performance of the industry than in the earlier decades.
The Government of India tied up with Suzuki Inc. of Japan which produced India's
most successful car- the Maruti.
1991 - Under the Govt.'s new National Industrial Policy, the license raj was dispensed
with, and the automobile industries were allowed to expand freely.
1993 - With the winds of liberalization sweeping the Indian car market, many
multinationals like Daewoo, Peugeot, general Motors, Mercedes-Benz and Fiat came into
the Indian car market.
1997 - The National Highway Policy was announced which will hopefully have a
positive impact on the automobile industry. The Government also laid down the emission
standards to be met by car manufacturers in India in the coming millennium. There were
15
two successively stringent emission levels to be met by April 2000 and April 2005,
respectively. These norms were benchmarked on the basis of those already adopted in
Europe, hence the names Euro I (equivalent to India 2000) and the Indian equivalent of
Euro II.
1999 - The Hon’ble Supreme Court passed an order directing all car manufacturers to
comply with Euro I emission norms (India 2000 norms) by the 1st of May, 1999 in
National Capital Region(NCR) of Delhi. The deadline was later extended to 1st June,
1999.
HISTORY OF FOUR WHEELER INDUSTRY
The Indian automobile component industry has finally begun to emerge on its
own. It has begun to take major steps towards making world class Quality Systems by
imbibing the ISO 9000/QS 9000 Quality Systems. Exports have been to the tune of 10%
of output in the last decade.
Exports grew from US$296 in 1995-96 to US$311 in 1996-97. The principal
export items included tractor parts, motorcycle parts, piston rings, fuel injection parts,
radiators, headlamps, auto bulbs etc.
16
However, this section has been long neglected and does not get the due it deserves.
We end these lacunae by putting up a whole segment on this important industry. read on
about details on the major auto parts, their dealers, the places they are manufactured...
17
MAJOR PLAYER IN FOUR WHEELER
Bajaj Auto Daewoo Motors Eicher Motors Ford
General Motors
Hero Honda Hero MotorsHindustan Motors
Hyundai Ind Auto Ltd.Kinetic Engineering
LML
MahindraMaruti Udyog Ltd.
Royal Enfield Telco
TVS SuzukiSwaraj Mazda Ltd.
Volvo DC Designs
These are the companies that bring to us our dream machines. This is where it all
starts from; the bourgeoisie Maruti 800, the upmarket Astra, the stately Mercedes, the
'Indian' Indica, the racy Hero Honda, the Tata truck and the rest.
Wend your way through the automobile companies, their history and product
lines. Find out hitherto unknown facts about the vehicles you use. Did you know that the
Hindustan Motors was the first vehicle manufacturing company to be set up in India?
18
And it is the same Hindustan Motors which manufactures both the sturdy Ambassador
and the elegant Lancer, in association with Mitsubishi of course.
We present information on all the manufacturers that are part of the Indian
automobile industry. Make this your one stop auto info bank.
19
MARKETING PLANNING
Our employees are our greatest strength and asset. It is this underlying philosophy that
has moulded our workforce into a team with common goals and objectives. Our
Employee-Management relationship is therefore characterised by:
Participative Management.
Team work & Kaizen.
Communication and information sharing.
Open office culture for easy accessibility
To implement this philosophy, we have taken several measures like a flat
organisational 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
VISION OF THE FOUR WHEELER COMPANY
The Leader in
The Indian AutomobileIndustry,
Creating Customer Delightand Shareholder's Wealth;
A pride of India.
20
Our Core values:
Customer Obsession
Fast, Flexible and First Mover
Innovation and Creativity
Networking and Partnership
Openness and Learning
ASSOCIATIONS
Society of Indian Automobile Manufacturers (SIAM)
The Society of Indian Automobile Manufacturers (SIAM) is the apex national
association representing the Auto Industry...
The Automotive Component Manufacturers Association of India(ACMA)
The Automotive Component Manufacturers Association of India (ACMA), with a
membership of over 365 companies, has been the Indian auto component
industry's spokesman for the last 38 years.
The Western India Automobile Association (WIAA)
The Western India Automobile Association (WIAA) was founded on October 15th
1919 and today is the largest and the oldest motoring body with over forty-eight
thousand members and a network of 7 branches in 4 states of Western India.
Federation of Automobile Dealers Associations (FADA)
This is the first Indian Association formed by the dealer community in January
1964 and signified the urge of India's automobile dealer community to have their
own identity and a national organization of their own.
21
Association of International Automobile Manufacturers, Inc (AIAM)
Members of the Association of International Automobile Manufacturers, Inc. (AIAM) distribute world-class passenger cars, multipurpose passenger vehicles, and light trucks in the United States.
22
COMPARISION OF MARKETMarket Share of Company & Growth Rate
It is common for automobile manufacturers to hold stakes in other automobile manufacturers. These ownerships can be explored under the detail for the individual companies.
Notable current relationships include:
Daimler AG holds a 20% stake in Eicher Motors, a 10.0% stake in KAMAZ, a 10% stake in Tesla Motors, a 6.75% stake in Tata Motors and a 3.1% in the Renault-Nissan Motors alliance. They are in the process of selling back their 40% stake in McLaren Group. This process will be finalized in 2011.
Dongfeng Motor Corporation is involved in joint ventures with several companies in China, including: Honda, Hyundai, Nissan, Nissan Diesel, and PSA Peugeot Citroen.
Fiat holds a 85% stake in Ferrari and a 20% stake in Chrysler, that can be increased to 35%; with the option of increasing its stake further.
Ford Motor Company holds a 13.4% stake in Mazda and an 8.3% share in Aston Martin.
Geely Automobile holds a 23% stake in Manganese Bronze Holdings.
General Motors and Shanghai Automotive Industry Corporation (SAIC) have two joint ventures in Shanghai General Motors and SAIC-GM-Wuling Automobile.
General Motors and Toyota Motor Corporation have a joint venture in New United Motor Manufacturing, Inc.
Hyundai Kia Automotive Group holds a 38.67% stake in Kia Motors, down from the 51% that it acquired in 1998.
MAN SE holds a 17.01% voting stake in Scania.
Porsche Automobil Holding SE has a 50.74% stake in Volkswagen Group. Due to liquidity problems, Volkswagen Group is now in the process of acquiring Porsche.
23
Renault-Nissan Motors have an alliance involving two global companies linked by cross-shareholding, with Renault holding 44.3% of Nissan shares, and Nissan holding 15% of (non-voting) Renault shares. The alliance holds a 3.1% share in Daimler AG.
Renault holds a 25% stake in AvtoVAZ and 20.5% of the voting stakes in Volvo Group.
Toyota holds a 51% stake in Daihatsu, and 16.5% in Fuji Heavy Industries, parent company of Subaru.
Volkswagen Group and FAW have a joint venture.
Volkswagen Group and Shanghai Automotive Industry Corporation (SAIC) have a joint venture in Shanghai Volkswagen Automotive.
Volkswagen Group holds a 37.73% stake in Scania (68.6% voting rights), and a 29% stake in MAN SE.
Volkswagen Group has a 49.9% stake in Porsche AG. Volkswagen is in the process of acquiring Porsche, which will be completed in mid-2011.
Volkswagen Group has a 19.9% stake in Suzuki, and Suzuki has a 5% stake in Volkswagen.
COMPANY EXTERNAL ENVIRONMENT
The Television industry is witnessing a spate of new channels being launched every year. FOUR
WHEELER is also penetrating into the rural areas and is a promising segment. Homes with FOUR
WHEELER s are expected to grow from 112 million to 200 million in a few years.
Current size: Rs 55,800 crore
Projected size by 2010: Rs 84,700 crore
24
CAGR: 21%
India boasts of being the third largest television market in the world today. And cable
penetration (pay FOUR WHEELER market) is expected to grow from the present 70
million to all FOUR WHEELER homes. More than 350 channels (paid and free) are
available to viewers in India today.
The fact that 40 per cent households of India are still without television connectivity
highlights the scope of growth in the segment. The majority of the revenue generated in
the television industry is through advertisements, followed by subscriptions. The Indian
television advertisements market is currently valued at about US$ 1,067 million and is
expected to grow at a rapid rate with the increase in the number of channels and the
television viewers. Over the next five years, the subscription revenues are poised to be
the growth driver of the Indian television industry. The number of pay FOUR
WHEELER homes and the increased subscription rates will increase the subscription
revenues. The spread among the lower- income groups is very low and offers a wide
scope for growth. The Indian television industry is currently being dominated by Star
India, which is the top player in the sector at present.
25
MARKET SEGMENTATION
26
TARGET MARKETING
1. Mass Marketing
2. Concentrate Marketing
INTRODUCTION: - The market for any product is normally made up of several segments. A ‘market’ after all is the aggregate of consumers of a given product. And, consumer (the end user the end user), who makes a market, are of varying characteristics and buying behavior. There are different factors contributing for varying mind set of consumers. It is thus natural that many differing segments occur within a market. In order to capture this heterogeneous market for any product, marketers usually divide or disintegrate the market into a number of sub-markets/segments and the process is known as market segmentation. Thus we can say that market segmentation is the segmentation of markets into homogenous groups of customers, each of them reacting differently to promotion, communication, pricing and other variables of the marketing mix. Market segments should be formed in that way that difference between buyers within each segment is as small as possible. Thus, every segment can be addressed with an individually targeted marketing mix. The importance of market segmentation results from the fact that the buyers of a product or a service are no homogenous group. Actually, every buyer has individual needs, preferences, resources and behaviors. Since it is virtually impossible to cater for every customer’s individual characteristics, marketers group customers to market segments by variables they have in common. These common characteristics allow developing a standardized marketing mix for all customers in this segment. Through segmentation, the marketer can look at the differences among the customer groups and decide on appropriate strategies/offers for each group. This is precisely why some marketing gurus/experts have described segmentation as a strategy of dividing the markets for conquering them.
27
MARKETING STRATEGY AND MARKET SEGMENTATION: - When it comes to marketing strategies, most people spontaneously think about the 4P (Product, Price, Place, Promotion) – maybe extended by three more Ps for marketing services (People, Processes, Physical Evidence).
This caselet illustrates the strategy followed by Maruti Udyog Limited (MUL), India’s largest car maker, when confronted with intense competition from foreign players. It highlights the promotional offers undertaken by MUL in its quest for market dominance. The caselet examines how the company aligned itself to the changing market requirements, through promotional offers, and reached out to potential customers. Finally, the caselet throws light on how MUL entered the pre-owned/used car market in India.
However, things changed in the 90’s with the entry of domestic as well as overseas
companies into the automobile market, especially with the entry of Hyundai Motor India
Ltd., the fully owned subsidiary of Hyundai Motor Co., Korea, and Tata Engineering of
the Tata Group. Hyundai's 'Santro' model endorsed by popular actor Shah Rukh Khan
proved to be a major success. This resulted in a sharp decline in the sales volumes of the
Maruti 800
Maruti make his segmentation on the mass basis
BMW was done concentrate marketing
28
29
MARKET RESERCH
THEORY OF RESEARCH METHODOLOGY
This is chapter explain various methods & techniques used in this research study
with their suitability. This part of the research report is very much important because it
explain the methods; concept&procedures followed by the researcher study the problem.
It is helping to the reader to understand whole the easily.
As marketing research does not address itself to basic or fundamental question. It
does not quality as basic research on the country, It tackles problem, which seem to have
immediate commercial potential. In view of this major consideration. Marketing research
should be regarded as applied research. We may also say that marketing research is of
both types-problem solving and problem oriented.
30
Marketing research is a systematic and objective study of problem pertaining to
the marketing of goods and service.It may be emphasized that is it not restricted to any
particular area of marketing but is applicable to all its phases and aspects
The American Marketing Association (AMA) has defined Marketing research
follows Marketing research is the function which the consumer, Identify and define
marketing opportunities &problems; generate, refine and Evaluate marketing actions;
monitor marketing performance; and improve Understanding of a market as a process.
Marketing Research specified the information required to Address these issues;
designs the method for collecting information. Managers and Implements the data
collection process; analyses the results; the Communications the findings and their
implications.
RESEARCH DESIGN
“A research design in the specification of methods and procedures for acquiring
the needed information it is the over all operational pattern of frame work of the project
that stipulates what information is to be collected from which sources by what
procedures”
To achieve objectives of my project study I have selected the exploratory research
& also the causal research.
METHOD Of DATA COLLECTION
There are two types of data
Primary data: -
“Primary data is the data which is collected by the research at first hand.”
31
Sources
To collect primary data the questionnaire system is uses through market
survey.Structured non disgusisd questionnaire is applied in which question question are
listing in prearranged on paper and where the object of inquiry is revealed to the
respondent I have contected the customer and interviwed them by personally & by
telephones.The analysis of the collected data through questionnaire is given in the later
part of the project.
Secondary data
“Secondary data whether internal or external is the data already collected by others
for propose other then solution of the problem at hand”
Secondary sources are
Internal sources:
Internal guide
(Prof Vasudev Modi)
Sales executive of the Dhru Motors
External sources
Various marketing books
www.maruti udhyog.com
PRE-TESTING
A pre- testing is small-scale replica of the main study. it dresses a rehearsal and
provides guidance on the following matter.
1. The adequacy of the sampling frame to be followed for the survey.
32
2. It helps the researcher in selecting the data collection method.
3. It gives prior knowledge about the population to be sampled.
4. The pre0testing helps the researcher in checking the validity of the
questionnaire and in redesigning of the same.
5. It also provides training to the researcher for interviewing.
SAMPLING PLAN
A number of decision & task are include in sampling and it is the procedure required
right from defining a population selection of sample element.
Define the population: -
The population id defined in terms of Element, Sampling units, Extent ,Time
Element: -Owner of Maruti four wheeler
Sampling unit: -Businessman,Professional,salaried,student.
Extent: -Surat city
Time: -15th January to 15th March,2004
Sampling Frame
I have taken whole Surat city as sample frame for conducting research.
Sampling Method
I have used proportionate random sampling to select the respondent from the entire
population
33
I have conducted a pilot survey by interviewing 20 respondents.
Select randomly, it is helpful in finalization of the questionnaire and also in knowing
standard error or core element. How this survey has became useful to me in deciding the
sample size
Sample size decision
As the study is related to satisfaction level with reference to surat city.I have taken the
formula as follow:
Where:
p=probability of success
q= probability of failure
z= confidence level
e=Tolerable error
To decide the value of above-mentioned variable. I have analysis the pilot survey and result emerged is
as
ResultNo of
respondentPercentage
Satisfy 15 75%
Dissatisfy 5 25%
Total 20 100%
100% confidence level is not possible because of large size of population. So I have taken
95% confidence to overcome this limit maintain accuracy.
34
I have decided to accept 5% error in my sample from the true population mean, as it is
also tolerable by the company. I get the following sample size through the equation
Sample Size N=p*q (z/e) 2
= (0.75)*(0.20)*(1.96/0.05) 2
= 0.75*0.25(39.2)2
= 288.12
300
35
MANAGEMENT DECISION
PRICING STRATEGY - CATERING TO ALL SEGMENTS
Maruti caters to all segment and has a product offering at all price points. It has a car
priced at Rs.1,87,000.00 which is the lowest offer on road. Maruti gets 70% business
from repeat buyers who earlier had owned a Maruti car. Their pricing strategy is to
provide an option to every customer looking for up gradation in his car. Their sole motive
36
of having so many product offering is to be in the consideration set of every passenger
car customer in India. Here is how every price point is covered.
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
Maruti created history by going into production in a record 13 months.
On 14 December 1983, the then Prime Minister of India, Mrs Indira
Gandhi, released the first vehicle for sale by handing over the keys of a
Maruti 800 to Mr.Harpal Singh of Delhi.
Volume targets were routinely exceeded, and in March 1994, we became the first
Indian company to produce over one million vehicles, a landmark yet to be
achieved by any other car company in India. Maruti is the highest volume car
manufacturer in Asia, outside Japan and Korea, having produced over 4 million
vehicles by April 2003.
Maruti (subsidiary of Suzuki), has made profits every year since inception except
2000-01. In 2001-02, we made a profit (before tax) of Rs 1183 million. In 2002-03, the
profit (before tax) rose to Rs 2821 million, recording a growth of 138.4%over the
previous year.
Maruti revolutionized the way Indians looked at cars. "No other car company so
completely dominates its home market" - (The Economist). MUL is the first and only car
company in the world to lead its home market in terms of both market share and in the JD
37
Power Customer Satisfaction study (JD Power Asia Pacific 2000 India Customer
Satisfaction studies). It is also the only car company in the world to be Top ranked four
times in a row (2000, 2001, 2002 & 2003).
Maruti-Suzuki Autocross 2004
In it's 5th year, Maruti-Suzuki Autocross 2004 was organized at Noida from 6th -
8th Feb, 2004. 135 rally enthusiasts participated in the event including 3 women drivers.
The Maruti Suzuki Autocross 2004 may have thrown up its usual share of winners, but
none of the 135 participants lost out on the sheer excitement.
The 1.5 km twin dust tracks comprised of a bridge as a unique feature. With two
cars racing simultaneously, it was sheer excitement to watch one car going over the
bridge & the other under it. The track was designed in such a way that while racing, cars
change tracks automatically & in the next lap the car which had gone over the bridge
goes under it & vice versa. The race was based on best timing in the qualifying & pre-
quarterfinals & elimination procedure in quarterfinals, semi-finals &finals.
Six of the Maruti's models were in the fray -- Baleno, Esteem, Gypsy, Alto, Zen
and Maruti 800. Maruti Zen witnessed max. no. of entries followed by Esteem & Baleno.
Professionals included 6 times National champion & Formula 3 winner N.
Leelakrishnan from Coimbatore, 2003 National Champion Vikram Mathias from Ooty,
Sunny Sidhu - defending champion Maruti Suzuki Autocross 2003 & winner Maruti-
Suzuki Raid-de-Himalaya 2003; Sandeep Sharma, winner Maruti Suzuki Autocross 2002,
Anil Wadia, winner Rally Desertstorm 2003 proved to be the scene stealers in the contest.
38
Equally noteworthy is the fact that all models from the Maruti stable negotiated the bends
and the hurdles without much ado.
Another first this year was the 'Race of Champions' where winners of each
category raced on similar stock cars (without any modification).
Maruti-Suzuki Autocross is a close circuit racing on an artificially created track
full of dips, bumps & hairpin bends to test the driving skills of participants. It also
provides a platform for new players to emerge in Motorsports arena.
DISTRIBUTION CHANNEL
India has emerged as one of the world's largest manufacturers of small cars. According to
New York Times, India's strong engineering base and expertise in the manufacturing of
low-cost, fuel-efficient cars has resulted in the expansion of manufacturing facilities of
several automobile companies like Hyundai Motors, Nissan, Toyota, Volkswagen and
Suzuki.[6]
In 2008, Hyundai Motors alone exported 240,000 cars made in India. Nissan Motors
plans to export 250,000 vehicles manufactured in its India plant by 2011. [7] Similarly,
General Motors announced its plans to export about 50,000 cars manufactured in India by
2011.[8]
In September 2009, Ford Motors announced its plans to setup a plant in India with an
annual capacity of 250,000 cars for US$500 million. The cars will be manufactured both
for the Indian market and for export.[9] The company said that the plant was a part of its
plan to make India the hub for its global production business.[10] Fiat Motors also
39
announced that it would source more than US$1 billion worth auto components from
India.[11]
According to Bloomberg L.P., in 2009 India surpassed China as Asia's fourth largest
exporter of cars.
40
SALES PROMOTION STRATEGY
SALES PROMOTION
It is a process by which awareness is created among consumers. Several method
1. Road Show
2. Advertisement In TV
3. Advertisement In News Papers
4. Hording
5. Through Fee Demos
6. Gifts, discounts and draw system.
41
7. Door step service.
8. Exchange offers and exchange bonus.
9. Company events.
10. Demonstration and test ride.
11. Easy and suitable financing scheme.
Attractive interest on advance payment
ADVERTISING ALLOWANCES. An advertising allowance is a dividend paid by a
marketer to a reseller for advertising their product. The money can only be used to
purchase advertising—for example, to print flyers or run ads in a local newspaper. But
some resellers take advantage of the system, so many manufacturers require verification.
A display allowance is the final form of trade promotional allowance. Some
manufacturers pay retailers extra to highlight their display from the many available every
week. The payment can take the form of cash or goods. Retailers must furnish written
certification of compliance with the terms of the contract before they are paid. Retailers
are most likely to select displays that yield high volume and are easy to assemble.
STRATEGIES
Business
In 1998, after a shake-up in the Korean auto industry caused by overambitious expansion
and the Asian financial crisis, Hyundai acquired rival Kia Motors. In 2000, the company
established a strategic alliance with DaimlerChrysler and severed its partnership with the
42
Hyundai Group. In 2001, the Daimler-Hyundai Truck Corporation was formed. In 2004,
however, DaimlerChrysler divested its interest in the company by selling its 10.5% stake
for $900 million.
Hyundai has invested in manufacturing plants in the North America, China, Czech
Republic, Pakistan, India, and Turkey as well as research and development centers in
Europe, Asia, North America, and the Pacific Rim. In 2004, Hyundai Motor Company
had $57.2 billion in sales in South Korea making it the country’s second largest
corporation, or chaebol. Worldwide sales in 2005 reached 2,533,695 units, an 11 percent
increase over the previous year. Hyundai has set as its 2006 target worldwide sales of 2.7
million units (excluding exports of CKD kits). In 2007 it reached 3,961,629 worldwide
vehicle sales—surpassing Fiat, Chrysler, PSA/Peugeot, Nissan, and Honda.
Hyundai motor vehicles are sold in 193 countries through some 5,000 dealerships and
showrooms. After a recent survey of global automotive sales, Hyundai is now the fifth
largest automaker in the world as of 2008.[9][10]
Hyundai Motor Company’s brand power continues to rise as it was ranked 72nd in the
2007 Best Global Brands by Interbrand and BusinessWeek survey. brand value estimated
at $4.5 billion. Public perception of the Hyundai brand has been transformed as a result
of dramatic improvements in the quality of Hyundai vehicles.
43
CUSTOMER BEHAVIOUR
PRODUCT ADOPTION AND CUSTOMER SATISFACTION
44
Findings of the 2009 four-wheeler total customer satisfaction study reveal that the upper
premium compact, midsize and entry luxury car segments have shown the maximum
improvement in delivering customer satisfaction. The study conducted by TNS specialist
division, TNS Automotive, which is the largest syndicated automotive study in India,
representing the responses of more than 8,100 new car buyers. Over 54 models were
covered in the study with customer evaluations taken in the key areas of sales
satisfaction, product quality, vehicle performance and design, after sales service, brand
image, and cost-of-ownership. The TCS index score provides a measure of satisfaction
and loyalty a given model enjoys with its customers.
According to Pradeep Saxena, Senior Vice President TNS Automotive, “In 2009 the
small car segment has seen the entry as well as consolidation of feature laden bigger size
hatchback cars. Consequently the upper-end of compact cars have grown not only in sales
volume but in customer satisfaction as well. Models such as Hyundai i10, Maruti A Star
and Skoda Fabia have contributed to the high satisfaction scores”. At the other end of the
spectrum, the niche entry-luxury segment has the distinction of achieving a score of more
than 100 for all the car models sampled (though the sample for some models is relatively
small). Another segment which has done consistently well is the mid size car segment. In
this segment all the sampled models have achieved a score of 90+ This year the lowest
scoring segment is the diesel small car segment due to a fall in the Tata Indica Diesel
Scores.
Rankings for the TCS study are done at the vehicle segment-level to provide comparisons
among similar groups of vehicles. The models ranking highest in their respective
segments for total customer satisfaction are: Maruti 800 in “Entry Compact”; Hyundai
i10 and Maruti A Star (Jointly) in “Premium Compact”; Skoda Fabia in “Upper Premium
Compact, Maruti Swift Diesel in “Small Car – Diesel”; Maruti Omni LPG in “ Small Car
– Alternate Fuel”; Hyundai Accent Petrol in “Entry Midsize”; Hyundai Verna Petrol in
“Midsize”; Toyota Corolla Altis in “Premium Midsize”; Ford Fiesta Diesel in “Midsize
Car – Diesel”; Mahindra Bolero in “SUV/ MPV”; and Honda CRV in “Premium SUV”.
45
Overall the industry has maintained the score at last year’s level. In line with that, some
traditionally strong models continue to delight their customers. The Maruti 800 continues
to enjoy a very high satisfaction level. Hyundai Accent and Swift Diesel are able to do
much the same and this indeed speaks highly of how these manufacturers have been able
to manage these brands using a holistic approach encompassing product quality, after
sales service and brand image. All of these models have improved their scores over 2008
as well. Overall the Indian car industry has put up a great performance not only in terms
of car sales but also in keeping the customers satisfied with their products and services in
a year which had started on a rather somber note.
TNS Automotive: “Indian car industry puts in a great performance on Customer
Satisfaction too!
New Delhi, January 4th, 2010… According to the findings of the 2009 four-wheeler total
customer satisfaction study released today by leading market information provider, TNS,
the upper premium compact, midsize and entry luxury car segments have shown the
maximum improvement in delivering customer satisfaction.
The 2009 four-wheeler Total Customer Satisfaction (TCS) study conducted by TNS
specialist division, TNS Automotive, is the largest syndicated automotive study in India,
representing the responses of more than 8,100 new car buyers. This comprehensive study
covers over 54 models with customer evaluations taken in the key areas of sales
satisfaction, product quality, vehicle performance and design, after sales service, brand
image, and cost-of-ownership. The TCS index score provides a measure of satisfaction
and loyalty a given model enjoys with its customers.
According to Pradeep Saxena, Senior Vice President TNS Automotive, “In 2009 the
small car segment has seen the entry as well as consolidation of feature laden bigger size
hatchback cars. Consequently the upper end of compact cars has grown not only in sales
46
volume but in customer satisfaction as well. Models such as Hyundai i10, Maruti A Star
and Skoda Fabia have contributed to the high satisfaction scores”.
At the other end of the spectrum, the niche entry luxury segment has the distinction of
achieving a score of more than 100 for all the car models sampled (though the sample for
some models is relatively small). Another segment which has done consistently well is
the mid size car segment. In this segment all the sampled models have achieved a score
of 90+
This year the lowest scoring segment is the diesel small car segment due to a fall in the
Tata Indica Diesel Scores.
Rankings for the TCS study are done at the vehicle segment-level to provide comparisons
among similar groups of vehicles. The models ranking highest in their respective
segments for total customer satisfaction are: Maruti 800 in “Entry Compact”; Hyundai
i10 and Maruti A Star (Jointly) in “Premium Compact”; Skoda Fabia in “Upper Premium
Compact, Maruti Swift Diesel in “Small Car – Diesel”; Maruti Omni LPG in “ Small Car
– Alternate Fuel”; Hyundai Accent Petrol in “Entry Midsize”; Hyundai Verna Petrol in
“Midsize”; Toyota Corolla Altis in “Premium Midsize”; Ford Fiesta Diesel in “Midsize
Car – Diesel”; Mahindra Bolero in “SUV/ MPV”; and Honda CRV in “Premium SUV”.
(ANNEXURE 1)
Overall the industry has maintained the score at last year’s level. In line with that, some
traditionally strong models continue to delight their customers. The Maruti 800 continues
to enjoy a very high satisfaction level. Hyundai Accent and Swift Diesel are able to do
much the same and this indeed speaks highly of how these manufacturers have been able
to manage these brands using a holistic approach encompassing product quality, after
sales service and brand image. All of these models have improved their scores over 2008
as well.
47
Overall the Indian car industry has put up a great performance not only in terms of car
sales but also in keeping the customers satisfied with their products and services in a year
which had started on a rather somber note.
CUSTOMER SATISFACTION THEORY :
Whether the buyer is satisfied after purchase depends on the offer’s performance in
relation to the buyer’s expectations.
Satisfaction is a person’s fallings of pleasure or disappointment resulting
from comparing a product’s perceived performance 9or outcome) in relation to his
or her expectations.
As this definition makes clear, satisfaction is a function of perceived
performance and expectation. If the performance falls short of expectations, the
customers, the customer is dissatisfied. If the performance matches the
expectations, the customers are satisfied. If the performance exceeds expectations,
the customers are highly satisfied or delighted.
Many companies are aiming for high satisfaction because customers who are
just satisfied still find it easy to switch when a better comes along. Those who are
highly satisfied are much less ready to switch. High satisfaction or delight creates
an emotional bond with the brand, not just a rational performance. The result is
48
high customer loyalty. Xerox’s senior management believes that a very satisfied or
delighted customer is worth 10 times as much to the company as a satisfied
customer. A very customer is likely to stay with Xerox many more years and buy
more than a satisfied customer will.
There are five major factors, which affected satisfaction of the car namely: -
1. Problems Experienced:
Contributing to 35% of the CSI score, this factor measures the quality of the
car in terms of the number of repair problems that cropped up and how often it
was returned for re-service.
2. Service Advisor:
Which related to ability of the services advisor to ability of the service
advisor to understand the problem and his promptness in attending to the
customer, contributing to 28% of the CSI Score.
3. Service Performance:
Measures the quality of the service performed as well as the dealer’s ability
to fix a problem on the first visit. It has a weightage of 26% in the CSI score
and also considers how easily spare parts are available when required.
4. Service Timing:
Affecting the score by just 6%, this time taken for a service or repair job was
responsible and if the vehicle was ready at the time promised.
5. Facility Appearance: -
49
Deals with the appearance of the customer lounge at the dealership and the
look and cleanliness of the service area. This factors has the least impact CSI
score at Just 5%
SWOT ANALYSIS
50
The diagnosis of a firm’s strengths and weakness can be fruitful only if the
environment factors and market conditions are considered along with the
internal capabilities. This approach essentially involves matching of the
internal capabilities with the environmental opportunities and threat and is
known as SWOT (Strength and Weakness, Opportunities and Threats)
analysis.
TATA
STRENGTHS :
Strength is a resources, skill or other advantage relative to
competition and the needs of markets a firm serves of anticipates serving.
Strength is a distinctive competence that gives the firm a comparative
advantages in the market place.
The key strengths are :
Well trained and highly qualified manpower (both technical & non-
technical).
Hi-Fi and world class technology is available.
Hi class facility, reflecting leadership of top-management.
Financial status of the company is very strong and sound.
51
WEAKNESS :
A weakness is a limitation or deficiency in resources, skills and
capabilities that seriously impedes effective performance .
OPPORTUNITIES:
An opportunity is a major favorable situation in the firm’s
environment. Identification of a previously overlooked market segment,
changes in competitive of regulatory circumstances, technological changes
etc. are examples.
Since, company’s financial profile is quite sound & strong, hence there is
lot of scope to develop.
THREATS :
A threat is a major unfavorable situation in the firm’s environment. It
is key impediment to the firm’s current or desired future positions. The
entrance of a new competitor, slow market growth, major technological
change, appearance if a substitute product are examples.
The danger of being priced out.
The danger of substitution.
The danger of new competition coming.
Inadequate measures viewed against product, market scope.
High level quality and low price should be maintained.
52
MARUTI SUJUKI
Time commitment and Business ethics should be adopted and maintained.
STRENGHTS
o Is globally cost competitive
o Adheres to strict quality controls
o Has access to latest technology
o Provides support to critical infrastructure and metal industries
o Increased awareness among consumers has increased expectations. Thus the
ability to innovate is critical.o Product differentiation via new features, improved performance and after-
sales support is critical.o Increased competitive intensity has limited the pricing power of
manufacturers.
WEAKNESSES
▪ Industry has low level of research and development capability
▪ Industry is exposed to cyclical downturns in the automotive industry
▪ Most component companies are dependent on global majors for technology
OPPORTUNITIES
▪ May serve as sourcing hub for global automobile majors
53
▪ Significant export opportunities may be realised through diversification of export basket
▪ Implementation of Value-Added-Tax (VAT) in FY2004 will negate the cascading impact of prices
THREATS
o The presence of a large counterfeit components market poses a significant
threato Pressure on prices from OEMs continues
o Imports pose price based competition in the replacement market
o Further marginalisation of smaller players likely
OBJECTIVES OF THE PROJECT
The objectives are.
1. To find the mode of pollution by the four wheeler.
2. To find the find which type of four wheeler less pollute.
3. To find the various sources of information about cars from primary data
through customers.
4. To find and analyses the various parameters of increasing four wheeler.
5. To find the what is effect in city life.
54
CONCLUSION
55
In the above research I found that the small four wheeler are more eco
friendly than big car
The mileage of small car are greater than big car so that small car less
polluted than big car.
LPG car pickup is lees than Petrol but in the long drive LPG can provide
more speed than Petrol about 140 km. per hour.
Petrol car is easy to drive in the city because the pick-up of petrol is to
good.
In the above research I found that LPG four wheeler eco friendly for
environment.
56
RECOMMENDATIONS
57
Four wheeler should come out that are attractive and appeals to the
masses.
The traffic congestion short out with small fourwheelers .
Pollution of environment is also control with using of small four
wheeler
LPG four wheeler is also helps to control pollution.
Increasing of four wheelers will be disturbing city life.
58
LIMITATIONS
59
Lack of knowledge of area has also affected the research
Lack of respondents interest to answer the question
It is very difficult to make people understand the significance of
conducting survey.
60
BIBLIOGRAPHY
61
Journals/Magazine :
Advisor of Finance
Search Engine :
Google search engine
Yahoo search engine
Websites :
www.hondacity.com
www.sebigovt.com
www.business-today.com
www.hyundai.com
www.indiaautomobile.com
62