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MAJOR FACTORS INFLUENCING BUYING BEHAVIOR
Cultural
Social
Culture
Subculture
Social Class
Reference group
Family
Roles and
statuses
Personal
Age and life-
cycle stage
Occupation
Economiccircumstances
Lifestyle
Personality andself-concept
Psychological
Motivation
Perception
Learning
Beliefs andattitudes
Buyer
Rogers model for the adoption and diffusion of innovations Innovation Adoption
CURVE
The innovation adoption curve of
Rogers is a model that classifies adopters of innovations into various categories, based on the idea that certain
individuals are inevitably more open to adaptation than others. Is is also referred to as Multi-Step Flow Theory or
Diffusion of Innovations Theory.
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Innovators
Brave people, puling the change. Innovators are very important communication.
Early Adopters
Respectable people, opinion leaders, try out new ideas, but in a careful way.
Early Majority
Thoughtful people, careful but accepting change more quickly than the average.
Late Majority
Skeptic people, will use new ideas or products only when the majority is using it.
Laggards
Traditional people, caring for the "old ways", are critical towards new ideas and will only accept it if the new idea has
become mainstream or even tradition.
The diffusion of innovations curve (innovation adoption curve) of Rogers is useful to remember that trying to
quickly and massively convince the mass of a new controversial idea is useless. It makes more sense in these
circumstances to start with convincing innovators and early adopters first. Also the categories and percentages can be
used as a first draft to estimate target groups for communication purposes.
Diffusion research focus was on five elements: 1) the characteristics of an innovation which
may influence its adoption; 2) the decision-making process that occurs when individuals consider
adopting a new idea, product or practice; 3) the characteristics of individuals that make them
likely to adopt an innovation.
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TARGET MARKETING
Target Marketing involves breaking a market into segments and then concentrating your
marketing efforts on one or a few key segments.
The beauty of target marketing is that it makes the promotion, pricing and distribution of your
products and/or services easier and more cost-effective. Target marketing is the selection of
customers you wish to service. The decisions involved in it are
Which segments to target How many products to offer
Which products to offer in which segments
There are three steps to targeting:
Market segmentation Target choice Product positioning
One of the first things you need to do is to refine your product or service so that you are NOT
trying to be 'all things to all people.
Next, you need to understand that people purchase products or services for three basic reasons:
To satisfy basic needs. To solve problems. To make themselves feel good.
The next step in creating an effective marketing strategy is to zero in on your target market.
Target marketing is one of corporate America's most effective business strategies. The idea is to
increase sales by first identifying, and then targeting smaller, yet more profitable customer
groups within the total market.
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Four Ways to Identify Target Markets
1. Geographic: The location, size of the area, density, and climate zone of your
customers.
2. Demographics: The age, gender, income, family composition and size,
occupation, and education of your customers.
3. Psychographics: The general personality, behavior, life-style, rate of use,
repetition of need, benefits sought, and loyalty characteristics of your customers.
4. Behaviors: The needs they seek to fulfill, the level of knowledge, informationsources, attitude, use or response to a product of your customers.
One of the best ways to identify your target market is to look at your existing customer base.
Who are your ideal clients? What do they have in common? If you do not have an existing
customer base, or if you are targeting a completely new audience, speculate on who they might
be, based on their needs and the benefits they will receive. Investigate competitors or similar
businesses in other markets to gain insight.
TARGET MARKETING
Who are your best customers? Where should you direct your marketing activities? Where and how should you allocate your advertising and promotional efforts?
Target Marketing, provides Focus for your business. It helps to establish critical
Operational goals and defines what must be done to achieve them
What Customers Want
Marketing is more than an activity, it is an attitude Instead of trying to get customers to buy what the firm likes to make, or happens
to have on hand, the marketing oriented firm tries to produce or sell what its
customers want which can be sold at a profit.
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Do not simply throw out everything that you now have and replace goods or productionmachinery with completely new items.
HOWEVER, AS YOU ANALYZE YOUR MARKET AND CUSTOMERPROFILES, AND SO GAIN AN UNDERSTANDING OF THEIR WANTS,
DESIRES, AND PERCEIVED NEEDS, YOU CAN BEGIN TO REORIENT YOUR
BUSINESS OVER TIME TO TAKE BEST ADVANTAGE OF THESE NEW
INSIGHTS. CONSIDER BOTH THE SHORT TERM AND LONG-TERM
IMPLICATIONS OF DEVELOPING AND IMPLEMENTING THE RIGHT
TARGET MARKETING STRATEGY FOR YOUR BUSINESS.
Customer Attitudes
For a long time, people have believed that advertising can be used to change people'sminds about what they want. This is an incredibly difficult process at best, and an
extremely expensive one. Because of these two factors, it is a process that smaller firms
simply cannot afford to pursue. Instead, it is much more productive for any size firm to
tune in to target customer attitudes as they currently exist. Once they have identified the
actual prevailing attitudes, they can begin to organize company resources needed to
constructively address and satisfy these attitudes the key question is,
"What are the existing customer attitudes?"
With this as an objective, developing an understanding of existing customer attitudes
becomes essential, and their identification becomes an important part of the marketing
process. Once these customer attitudes, needs or preferences are identified, the entire
firm can then organize itself to satisfy these needs as completely and efficiently as
possible.
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Target Marketing
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MARUTI CULTURE
Their employees are their greatest strength and asset. It is this underlying philosophy that has
moulded their workforce into a team with common goals and objectives. Their Employee-Management relationship is therefore characterized by:
Participative Management. Team work & Kaizen. Communication and information sharing. Open office culture for easy accessibility
To implement this philosophy, they have taken several measures like a flat organizationalstructure. There are only three levels of responsibilities ranging from the Board Of Directors,
Division Heads to Department Heads. Other visible features of this philosophy are an open
office, common uniforms (at all levels), and a common canteen for all.
This structure ensures better communication and speedy decision making processes. It also
creates an environment that builds trust, transparency and a sense of belonging amongst
employees.
For Investors:
Maruti Udyog Limited, a subsidiary of Suzuki Motor Corporation of Japan, has been the leader
of the Indian car market for about two decades. Its manufacturing plant, located some 25 km
south of New Delhi in Gurgaon, has an installed capacity of 3,50,000 units per annum, with a
capability to produce about half a million vehicles.
The company has a portfolio of 11 brands, including Maruti 800, Omni, premium small car Zen,
international brands Alto and WagonR, off-roader Gypsy, mid size Esteem, luxury car Baleno,
the MPV, Versa, Swift and Luxury SUV Grand Vitara XL7.
In recent years, Maruti has made major strides towards its goal of becoming Suzuki Motor
Corporation's R and D hub for Asia. It has introduced upgraded versions of WagonR Zen and
Esteem, completely designed and styled in-house.
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Maruti's contribution as the engine of growth of the Indian auto industry, indeed its impact on the
lifestyle and psyche of an entire generation of Indian middle class, is widely acknowledged. Its
emotional connect with the customer continues.
Maruti tops customer satisfaction again for sixth year in a row according to the J.D. Power AsiaPacific 2005 India Customer Satisfaction Index (CSI) Study.
The company has also ranked highest in India Sales Satisfaction Study.
The company's quality systems and practices have been rated as a "benchmark for the
automotive industry world-wide" by A V Belgium, global auditors for International Organisation
for Standardisation.
In keeping with its leadership position, Maruti supports safe driving and traffic management
through mass media messages and a state-of-the art driving training and research institute that it
manages for the Delhi Government.
The company's service businesses including sale and purchase of pre owned cars (TrueValue),
lease and fleet management service for corporates (N2N), Maruti Insurance and Maruti Finance
are now fully operational.. These initiatives, besides providing total mobility solutions to
customers in a convenient and transparent manner, have helped improve economic viability of
The company's dealerships.
The company is listed on Bombay Stock Exchange and National Stock Exchange.
MUL is a Board-managed company. Currently the directors on the Board are:
Mr Shinzo Nakanishi, Chairman Mr Jagdish Khattar, Managing Director Mr Hirofumi Nagao, Joint Managing Director Mr Shinichi Takeuchi, Joint Managing Director Mr Kinji Saito, Director (Marketing and Sales) Mr Osamu Suzuki, Director Mr R C Bhargava, Director Mr S V Bhave, Director
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Mr Kumar Mangalam Birla, Director Mr Amal Ganguli, Director Ms Pallavi Shroff, Director Mr Manvinder Singh Banga, Director
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INTERNATIONAL BUSINESS
In August, 2003 Maruti crossed a milestone of exporting 300,000 vehicles since its first export in
1986. Europe is the largest destination of Marutis exports and coincidentally after the first
commercial shipment of 480 units to Hungary in 1987, the 300,00 mark was crossed by the
shipment of 571 units to the same country. The top ten destinations of the cumulative exports
have been Netherlands, Italy, Germany, Chile, U.K., Hungary, Nepal, Greece, France and Poland
in that order.
The Alto, which meets the Euro-3 norms, has been very popular in Europe where a landmark
200,000 vehicle were exported till March 2003. Even in the highly developed and competitive
markets of Netherlands, UK, Germany, France and Italy Maruti vehicles have made a mark.Though the main market for the Maruti vehicles is Europe, where it is selling over 70% of its
exported quantity, it is exporting in over 70 countries.
Maruti has entered some unconventional markets like Angola, Benin, Djibouti, Ethiopia,
Morocco, Uganda, Chile, Costa Rica and El Salvador. The Middle-East region has also opened
up and is showing good potential for growth. Some markets in this region where Maruti is, are
Saudi Arabia, Kuwait, Bahrain, Qatar and UAE.
The markets outside of Europe that have large quantities, in the current year, are Algeria, Saudi
Arabia, Srilanka and Bangladesh. Maruti exported more than 51,000 vehicles in 2003-04 which
was 59% higher than last year. In the financial year 2003-04 Maruti exports contributed to more
than 10% of total Maruti sales.
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MARUTI ALL INDIA SALES 3 YR TREND
Segment 2003-04
Growth 2004-05 Growth
2005-06 Growth
A1 (Mini - Hatchback) 167,56
1
17% 116,262 -31% 89,223 -23%
A2 (Compact - Hatchback) 176,132
47% 271,280 54% 335,136 24%
A3 (Mid Size) 14,173 28% 29,637 109% 31,939 8%
A4/A5/A6(Exec./Prem./Luxury)
NA NA NA NA NA NA
C (Van Type) 59,526 15% 65,019 9% 66,366 2%
Passenger Cars - MUL 417,392
28% 482,198 16%522,664 8%
Passenger Cars - Total
Industry
758,123
26% 885,029 17%948,669 7%
MUV (Utility Vehicles) 3,555 12% 5,204 46% 4,374 -16%
Passenger Vehicles - MUL 420,947
28% 487,402 16% 527,038 8%
Passenger Vehicles - TotalIndustry
901,150
24% 1,050,246
17% 1,129,316
8%
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MARKET SHARE
TATA20%
HYUNDAI21%
MARUTI59%
2005-06 Market Share-Segment A2
TATA20%
FORD14%
GM
6%HONDA20%
OTHERS
7%
MARUTI17%
HYUNDAI
16%
2005-06 Market Share-Segment A3
TATA16%
HONDA4%
FORD3%
GM1%
TOYOTA1%
OTHERS3%
MARUTI55%
HYUNDAI17%
2005-06 Market Share-Passenger Cars
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COMPETITION MODELS
SEGMENTMaruti Competition
A1 (Mini - Hatchback) M800
A2 (Compact -Hatchback)
Zen, WagonR,Alto, Swift
Hyundai - Santro & Getz; Tata -Indica & Palio; GM - Corsa Sail
A3 (Mid Size) Esteem, Baleno Hyundai - Accent; Tata - Indigo &Petra; Honda - City; GM - Corsa,
Optra, & Aveo; Ford - Ikon, Fusion,& Fiesta
A4/A5/A6(Exec./Prem./Luxury)
Hyundai - Elantra & Sonata; Honda -Accord; GM - Vectra; Ford - Mondeo;Skoda - Octavia & Superb; Toyota -Corolla & Camry; Daimler Chrysler -
C,E, & S Class;
C (Van Type) Omni, VersaMUV (Utility
Vehicles)Gypsy, Grand
VitaraMitsubishi - Pajero; Hyundai -
Terracan & Tucson; Ford - Endeavor;Toyota - Prado & Innova; Nissan - X
Trail; Honda - CRV; GM - Forrester &Tavera; Tata - Sumo & Safari;
Mahindra - Jeeps, Scorpio, & Bolero
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BUSINESS STRATEGY
They intend to continue to focus on the small car segment, while offering products in
most segments of the Indian passenger car market. They aim to achieve their principal
objectives by pursuing the following business strategies:
Maintain and enhance their product range: They intend to utilize Suzukis expertise in
small car technology to produce new variants of their existing models and to upgrade
their products with contemporary technology and features.
Increase reach and penetration: They plan to continue to utilize their extensive sales
and service network to increase the reach, in terms of geographical spread, and
penetration, in terms of sales volumes, of their products across India.
Increased availability of automobile finance: They continue to seek opportunities to
expand the size of the Indian passenger car market, especially in the small car segment,
through facilitating easy availability of automobile finance. To that end, they have
recently entered into an agreement with the State Bank of India.
Secure repeat purchases by offering a 360 degree customer experience : On the
basis of their belief that securing repeat purchases from an existing customer requires less
expenditure than acquiring a new customer, they aim to provide customers with a one-
stop shop for automobiles and automobile-related products and services.
Continue to benchmark their manufacturing capabilities: They plan to continue to
benchmark our manufacturing capabilities with the most efficient car manufacturing
facilities of Suzuki and its subsidiaries.
Continue to reduce costs to offer more competitive products:
Cost competitiveness has been, and continues to be, central to their strategy as the
leading manufacturer in the small car segment to expand the size of the market by
offering competitively priced, high quality products. The components of this strategy are:
Higher levels of localization Vendor participation in cost reduction
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Cost reduction on warranties Reduction in initial investment cost Reduction in number of vehicle platforms Achieve further cost reduction through higher productivity
Lower cost of ownership:
Through their business strategies, they seek to reduce the consumers cost of ownership
of their cars, which comprises the cost of purchase, the cost of fuel and maintenance,
including spare parts and repairs, during the life of the vehicle, insurance, and resale
value.
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SALES NETWORK
Dealers: They offer their products to the customer through a network of 178 authorized
dealers with 243 sales outlets across 161 cities. They believe that this is the largest
network of dealers amongst car manufacturers in India. Their dealers employed more than
3,500 sales executives. They are linked to their sales network through their secure
extranet-based information network. The sales of their spares, accessories and
automobile-related services such as insurance and finance serve as additional sources of
revenue for our dealers. They believe that the availability of these related products and
services at sales outlets also helps to attract customers to the outlets and promotes sales
of their cars.
Agreements with dealers: They generally appoint a limited number of dealers for a
certain geographical territory. Their dealers provide services to customers such as pre-
delivery inspection of vehicles, sales of cars, after sales service, supply of spare parts and
other services that promote sales of cars within the territory for which they are appointed.
They have the right to sell their products and services through other dealers or
intermediaries in any territory, whether or not one of their dealers is already established
in that territory. Their dealers are required to maintain their outlets in accordance with
their specifications and employ well-trained sales staff.
Their agreements with their dealers usually have terms of five years. These agreements
are generally renewable for successive terms of three years, by mutual agreement. The
agreements typically permit termination by either the dealer or them with six months
prior notice.
Enhancing dealer performance: Their central office in Delhi, their regional offices and
their area offices monitor and assist their dealer network. They have nine regional
offices, five area offices and 187 sales and marketing personnel. They follow the
performance of their dealers and frequently suggest improvements. In order to assist their
dealers in enhancing their performance and capabilities, they have introduced a concept
of Balanced Scorecard. Using this tool, they seek to measure the performance of a
dealership in several areas of operations, including sales, service, spares and accessories,
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financial management and management systems. They reward dealers who perform well
on the Balanced Scorecard with a cash payment at the end of the fiscal year. They
believe that the Balanced Scorecard serves as an effective incentive for dealers to
enhance their performance.
Dealer training: They have established standard operating procedures, showroom
ambience and service quality standards for dealerships. They provide periodic training
through their training centres located at their manufacturing facility and at Chennai,
Kolkata, Guwahati and Pune. They have trained more than 2,600 and 3,400 dealer sales
personnel. Their subsidiary, True Value Solutions Ltd., provides value-added services,
such as manpower recruitment and training, to their dealers.
AFTER-SALES SERVICE
Network
As on date there are 342 Maruti dealer workshops and 1,545 Maruti Authorised Service
Stations, or MASSs, covering 898 cities in India. In addition, 24-hour mobile service is
offered in 38 cities under the brand Maruti On-road Service. They intend to extend this
service to an additional 25 cities over the next three years. As a benchmark for dealers
with respect to service quality and infrastructure facilities, they have launched service
stations under the brand Maruti Service Masters, or MSMs, in three locations in India.
They have service stations on 30 highways in India under the brand Express Service
Stations.
To promote sales of their spare parts and the availability of high quality, reliable spare
parts for their products, they sell spares under the brand name Maruti Genuine Parts, or
MGP. These are distributed through their dealer network and through authorised sellers
of their spare parts, to whom they refer as stockists.
Many of their MASSs are at remote locations where they do not have dealers. In order to
increase the penetration, in terms of sales volumes, of their products in these remote
areas, they are exploring opportunities to integrate some of the MASSs into the sales
process in order to increase sales of their cars and related products and services such as
spares and accessories, insurance and financing.
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Genuine Accessories
They have also entered the business of marketing car accessories under the brand name
Maruti Genuine Accessories, or MGA, through their dealership network. They seek to
provide customers with the opportunity to customize their vehicles with accessories suchas music systems, security systems, car-care products and utility products.
Warranty and Extended Warranty Program
They offer a two-year warranty on all their vehicles at the time of sale. Their dealers are
required to address any claim made by a customer, in accordance with practices and
procedures prescribed by them, under the provisions of the warranty in force at that time.
The dealers subsequently claim the warranty cost from them. They analyse warranty
claims from dealers and either claim the cost from vendors, in the case of defective
components, or bear the cost ourselves, in the case of manufacturing defects.
They offer an extended paid-warranty program marketed under the brand, Forever
Yours for the third and fourth year after purchase. They have entered into arrangements
with insurance companies to cover the costs of warranties offered under this program.
The extended warranty program is intended to maintain the dealers contact with the
customer and increase the revenue generated from sale of spares, accessories and
automobile-related services. An effort is made during the period of the extended warrantyto encourage the customer to exchange his existing Maruti car for a new Maruti car, or
upgrade to a new Maruti car.
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NEW BUSINESS INITIATIVES
As the largest manufacturer and leader in the small car segment, they continually seek new ways
to utilize their vast car parc, range of products and extensive sales and service network to expand
the size of the passenger car market in India. They have recently launched new initiatives to
develop the market for automobile insurance, automobile finance, leasing and fleet management,
and pre-owned cars. They aim to provide customers with a one-stop shop for automobiles and
automobile-related products and services, and build on their wide customer base and extensive
sales and service network to make available to their customers a wide range of Maruti-branded
services at different stages of ownership, which they refer to as the 360 degree customer
experience.
Atithi Devo Bhava: One-stop shop
Inspired by the spirit of India. Atithi Devo Bhava, in Sanskirit, means a guest is like God. It
captures the Indian tradition of honouring guests. It's also the inspiration for the welcome youll
receive at a Maruti Suzuki dealership, and the caring relationship they share with those who
drive their cars. At Maruti Suzuki, you will find all your car related needs met under one roof.
Whether it is easy finance, insurance, fleet management. services, exchange Maruti Suzuki is set
to provide a single window solution for all your car related needs.
That's why they have Maruti True Value, the best place to buy and sell reliable used cars.
Maruti Finance an agglomeration of the biggest finance companies in India brought
together by Maruti Suzuki to ensure that the dream car is within everyone's reach.
Similarly, Maruti Insurance brings together some of the biggest names in the car
insurance industry to provide insurance solutions to every type of car consumer. Then,
finally, there is N2N, which offers fleet related solutions.
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Target Segment
To reach to rural and lower middle class consumers. They begin with small
concentrated markets appealing to local culture and aspirations of the targeted
area
Strategy
THEIR STRATEGY IS TO CAPTURE THE RURAL MARKET BY EMPLOYING
WOMEN WHO BELONG TO THEIR LOCAL COMMUNITY THROUGH WHICH
THEIR PRODUCT CAN REACH TO LOCAL CONSUMERS. THEIR STRATEGY IS
TO PROVIDE WORK FOR WOMEN TO CREATE AWARENESS AMONG
CONFINED CONSUMERS
Process
They started with Project Shakti in which their basic aim is to educate a rural
person about their products through women who belongs to their own local community and
who can communicate well in their language with them. In this way many educated women get
work in rural sector and on the other hand HLL Corporate Social Responsibility (CSR) also
increases towards society by introducing educative programs for the benefit of the rural sector
Mode of Communication
They reach to customers by giving advertisements in the T.V. or through radio, through
wall painting, or through promotional activities like weakly haats, mela or local bazaars
and most importantly, their policies were flexible and they could adapt to fast changing
marketing situations.
Through Internet, E-mail usage, communication media like telephone and
mail facility this mode of communication is possible to a great extent. ITCs extensive
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India-wide distribution network enables its greeting cards reach over 12,000 multi brand
outlets in over 700 cities across the country. In the last three years , 10,000 greeting card
designs have reached these outlets with the help of ITC's web-enabled e-commerce model
Communication Model ITC markets
Opportunity
These days consumers are looking for convenience and instant gratification.
Communication media like the telephone and e-mail facilitate communication to a
great extent. But many greeting card sites are moving from a 'free' to a 'pay' mode.
This could be an emerging revenue earning opportunity for content providers.
Threats
'Expressions' which is a competitor of ITC in this segment is currently the
second biggest greeting card brand in India with a market share of 20 per cent. ITC has a
five per cent share in the stationery market. The greeting card market in India is
estimated to be around Rs. 250 crore in terms of yearly consumer spent. The unorganized
sector in the greeting card market will be close to 40 per cent. The organized sector,
controlling 60 per cent of the market, is divided between ITC, Archies and Hallmark.
While Archies has licensing agreements with international greetings brands
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