sanju strategies, minda

8/4/2019 Sanju Strategies, Minda

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Project Report

Marketing Mix of Automotive

Industry (Methodology Followed by

Kiran Udyog Pvt. Ltd.)

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Table of Contents

1. Overview of Automotive Sector

2. Objective of the Study

3. Chapter 1: Introduction

- Background

- History of Indian Automobile Industry

- Leading Players and Segments in which they operate

- Market Research

4. Chapter 4: Literature Review

- Company Profile: Kiran Udyog Pvt. Ltd.

- Customers

- Technology Used

- Marketing Mix

- Two wheeler in India

5. Chapter 3: Research Methodology

- Scope of the Study

- Sources of Data

- Questionnaire Design- Sampling Design

- Procedure for Data Collection

6. Chapter 4: Data Analysis

7. Conclusion

8. Bibliography

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OVERVIEW OF AUTOMOTIVE SECTOR

The industry is estimated to be a US$ 34 billion industry with exports contributing 5 per

cent of the revenues. The growth of the Indian middle class with increasing purchasing

power along with the strong growth of the economy over the past few years has attracted

global major auto manufacturers to the Indian market. Moreover, India provides trained

manpower at competitive costs making India a favoured global manufacturing hub. The

Indian automobile industry is going through a technological change where each firm is

engaged in changing its processes and technologies to maintain the competitive

advantage and provide customers with the optimized products and services. The de-

licensing of the sector in 1991 and the subsequent opening up of 100 per cent foreigndirect investment (FDI) through the automatic route marked the beginning of a new era

for the Indian automotive industry. Since then almost all the global major automobile

players have set up their facilities in India taking the level of production of vehicles from

2 million in 1991 to 10.83 million in 200708.

Stagnation of the auto sector in markets such as Europe, US and Japan on the other, have

resulted in shifting of new capacities and flow of capital to the Indian auto industry. The

Indian automobile industry has been growing at the rate of 1527 per cent over the past

five years. In two wheelers industry,

Indian companies are the largest manufacturers in the world. Bikes are a major segment

in the industry, the other two being scooters and mopeds. Moreover, Indian car makers

are earning acclaim worldwide. The home-grown automaker, Maruti Suzuki has emerged

as the fourth most reputed among auto companies in the world, even ahead of its parent

Suzuki Motor Co of Japan, according to the Global 200: The World's Best Corporate

Reputations list, compiled by US-based Reputation Institute.

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OBJECTIVE OF THIS STUDY

This study is done in keeping following objectives in view:

To find out the present status of the automobile industries in India.

To study the market research of the automobile industries.

To study the distribution and marketing strategy adopt by automobile industries.

To enhance our analytical skills in the field of practical application of Marketing

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CHAPTER 1: INTRODUCTION

Background

TheAutomotive industry in India is one of the largest in the world and one of the fastest

growing globally. India manufactures over 17.5 million vehicles (including 2 wheeled

and 4 wheeled) and exports about 2.33 million every year. It is the world's second largest

manufacturer of motorcycles, with annual sales exceeding 8.5 million in 2009. India's

passenger car and commercial vehicle manufacturing industry is the seventh largest in

the world, with an annual production of more than 3.7 million units in 2010. According

to recent reports, India is set to overtake Brazil to become the sixth largest passenger

vehicle producer in the world, growing 16-18 per cent to sell around three million units

in the course of 2011-12. In 2009, India emerged as Asia's fourth largest exporter of

passenger cars, behind Japan, South Korea, and Thailand.

As of 2010, India is home to 40 million passenger vehicles and more than 3.7 million

automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the

country the second fastest growing automobile market in the world. According to the

Society of Indian Automobile Manufacturers, annual car sales are projected to increase

up to 5 million vehicles by 2015 and more than 9 million by 2020. By 2050, the countryis expected to top the world in car volumes with approximately 611 million vehicles on

the nation's roads.

A chunk of India's car manufacturing industry is based in and around Chennai, also

known as the "Detroit of India" with the India operations of BMW, Ford, Hyundai and

Nissan headquartered in the city. Chennai accounts for 60 per cent of the country's

automotive exports. Gurgaon and Manesar in Haryana are hubs where all of the Maruti

Suzuki cars in India are manufactured. The Chakan corridor near Pune, Maharashtra is

another vehicular production hub with companies like General Motors, Volkswagen,

Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Fiat and Force Motors

having assembly plants in the area. Ahmedabad with the Tata Nano plant, Halol with

General Motors, Aurangabad with Audi, Kolkatta with Hindustan Motors, Noida with

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Honda and Bengaluru with Toyota are some of the other automotive manufacturing

regions around the country.

TheIndian Automobile Industry is manufacturing over 11 million vehicles and exporting

about 1.5 million every year. The dominant products of the industry are two wheelers

with a market share of over 75% and passenger cars with a market share of about 16%.

Commercial vehicles and three wheelers share about 9% of the market between them.

About 91% of the vehicles sold are used by households and only about 9% for

commercial purposes. The industry has attained a turnover of more than USD 35 billion

and provides direct and indirect employment to over 13 million people.

The supply chain of this industry in India is very similar to the supply chain of the

automotive industry in Europe and America. This may present its own set of

opportunities and threats. The orders of the industry arise from the bottom of the supply

chain i. e., from the consumers and goes through the automakers and climbs up until the

third tier suppliers. However the products, as channelled in every traditional automotive

industry, flow from the top of the supply chain to reach the consumers.

Interestingly, the level of trade exports in this sector in India has been medium and

imports have been low. However, this is rapidly changing and both exports and importsare increasing. The demand determinants of the industry are factors like affordability,

product innovation, infrastructure and price of fuel. Also, the basis of competition is the

sector is high and increasing and the life cycle stage is growth. With a rapidly growing

middle class, all the advantages of this sector in India are yet to be leveraged.

Note that, with a high cost of developing production facilities, limited accessibility to

new technology and soaring competition, the barriers to enter the Indian Automotive

sector are high and these barriers are study. On the other hand, India has a well-

developed tax structure. The power to levy taxes and duties is distributed among the three

tiers of Government. The cost structure of the industry is fairly traditional, but the

profitability of motor vehicle manufacturers has been rising over the past five years.

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Major players, like Tata Motors and Maruti Suzuki have material cost of about 80% but

are recording profits after tax of about 6% to 11%.

The level of technology change in the Motor vehicle Industry has been high but, the rate

of change in technology has been medium. Investment in the technology by the

producers has been high. System-suppliers of integrated components and sub-systems

have become the order of the day. However, further investment in new technologies will

help the industry be more competitive. Over the past few years, the industry has been

volatile. Currently, Indias increasing per capita disposable income which is expected to

rise by 106% by 2015 and growth in exports is playing a major role in the rise and

competitiveness of the industry.

Tata Motors is leading the commercial vehicle segment with a market share of about

64%. Maruti Suzuki is leading the passenger vehicle segment with a market share of

46%. Hyundai Motor India and Mahindra and Mahindra are focusing expanding their

footprint in the overseas market. Hero Honda Motors is occupying over 41% and sharing

26% of the two wheeler market in India with Bajaj Auto. Bajaj Auto in itself is

occupying about 58% of the three wheeler market.

Consumers are very important of the survival of the Motor Vehicle manufacturing

industry. In 2008-09, customer sentiment dropped, which burned on the augmentation indemand of cars. Steel is the major input used by manufacturers and the rise in price of

steel is putting a cost pressure on manufacturers and cost is getting transferred to the end

consumer. The price of oil and petrol affect the driving habits of consumers and the type

of car they buy.

The key to success in the industry is to improve labour productivity, labour flexibility,

and capital efficiency. Having quality manpower, infrastructure improvements, and raw

material availability also play a major role. Access to latest and most efficient technology

and techniques will bring competitive advantage to the major players. Utilizing

manufacturing plants to optimum level and understanding implications from the

government policies are the essentials in the Automotive Industry of India.

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Both, Industry and Indian Government are obligated to intervene the Indian Automotive

industry. The Indian government should facilitate infrastructure creation, create

favourable and predictable business environment, attract investment and promote

research and development. The role of Industry will primarily be in designing and

manufacturing products of world-class quality establishing cost competitiveness and

improving productivity in labour and in capital. With a combined effort, the Indian

Automotive industry will emerge as the destination of choice in the world for design and

manufacturing of automobiles.

History of Indian Automobile Industry:

The first car ran on India's roads in 1897. Until the 1930s, cars were imported directly,

but in very small numbers.

Embryonic automotive industry emerged in India in the 1940s. Mahindra & Mahindra

was established by two brothers as a trading company in 1945, and began assembly of

Jeep CJ-3A utility vehicles under license from Willys. The company soon branched out

into the manufacture of light commercial vehicles (LCVs) and agricultural tractors.

Following the independence, in 1947, the Government of India and the private sectorlaunched efforts to create an automotive component manufacturing industry to supply to

the automobile industry. However, the growth was relatively slow in the 1950s and

1960s due to nationalization and the license raj, which hampered the Indian private

sector. After 1970, the automotive industry started to grow, but the growth was mainly

driven by tractors, commercial vehicles and scooters. Cars were still a major luxury.

Japanese manufacturers entered the Indian market ultimately leading to the establishment

of Maruti Udyog. A number of foreign firms initiated joint ventures with Indian

companies.

In the 1980s, a number of Japanese manufacturers launched joint-ventures for building

motorcycles and light commercial-vehicles. It was at this time that the Indian government

chose Suzuki for its joint-venture to manufacture small cars. Following the economic

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liberalization in 1991 and the gradual weakening of the license raj, a number of Indian

and multi-national car companies launched operations. Since then, automotive

component and automobile manufacturing growth has accelerated to meet domestic and

export demands.

Following economic liberalization in India in 1991, the Indian automotive industry has

demonstrated sustained growth as a result of increased competitiveness and relaxed

restrictions. Several Indian automobile manufacturers such as Tata Motors, Maruti

Suzuki and Mahindra, expanded their domestic and international operations. India's

robust economic growth led to the further expansion of its domestic automobile market,

which has attracted significant India-specific investment by multinational automobile

manufacturers. In February 2009, monthly sales of passenger cars in India exceeded

100,000 units and has since grown rapidly to a record monthly high of 182,992 units in

October 2009. From 2003 to 2010, car sales in India have progressed at a CAGR of

13.7%, and with only 10% of Indian households owning a car in 2009 (whereas this

figure reaches 80% in Switzerland for example) this progression is unlikely to stop in the

coming decade. Congestion of Indian roads, more than market demand, will likely be the

limiting factor.

SIAM is the apex industry body representing all the vehicle manufacturers, home-grown

and international, in India.

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LEADING PLAYERS AND SEGMENTS IN WHICH THEY OPERATE

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MARKET RESEARCH

Market research often refers to either primary or secondary research. Secondary research

involves a company using information compiled from various sources, which is about a

new or existing product.. Primary market research involves qualitative research (such as

focus groups or one-on-one interviews) and quantitative research (such as surveys) as

well as field tests or observations conducted for or tailored specifically to that product.

Primary research, which is also called field research or original research, is useful for

finding new information and getting customers' views on products.

SCORPIO

Having defined the competitive framework, the next task undertaken was that of

analyzing the consumer. Consumer segments of B and C category car buyers were

analyzed in terms of their expectations from a car, their perceptions about cars and their

relationship. Proprietary techniques of research, of the advertising agency Interface

Communications, like Mind & Mood, ICON and VIP were used to understand this

consumer. The findings were:

Size matters- big size stands for status

Consumers seek latest technology

Imagery but at affordable prices

The sheer thrill and passion of driving an SUV

Power of the vehicle makes a statement

But along with the others, luxury was a very important parameter

International vehicles define imagery

SUVs like Pajero, Land Cruiser and Prado are seen as urban vehicles for the rich and

famous consumers aspire to own these vehicles as the imagery of these vehicles hasbecome very desirable.

Consumers want to consume premium imagery at prices affordable to them

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The Marketing Environment

Marketing environment consists of the actors and forces outside marketing that affect

marketing managements ability to build and maintain successful relationships with

target customers. The marketing environment offers both opportunities and threats. The

environment continues to change rapidly. The marketing environment is made up of

Micro-environment and Macro-environment.

The Micro environment consists of the actors close to the company that affect its ability

to serve its customers. These actors are: the company, suppliers, marketing

intermediaries, customer markets, competitors and publics.

The Macro environment consists of the larger societal forces that affect the

microenvironment. These forces are: demographic, economic, natural, technological,

political and cultural forces.

GM STUXX: THE DEMOGRAPHIC ENVIRONMENT

The demographic position will be on the United States. Since, the target market is for the

middle class; it will provide a boost for the 32% of the total population. This product willproduce a superior value to customers who always value the brand. Also, it will keep the

popularity of the product at their trend. In this case, more and more customers will be

able to keep this product if it satisfies their condition. Additionally, the middle class

group will be loyal to this product brand and as generation goes by; this product will be

there forever. On the other hand, this product is also designed for students, and working

class people. This is due to the fancy and environmental design.

Students will be so grateful to have fancy car while the working class group will tend to

afford such an affordable environmental car design.

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THE NATURAL ENVIRONMENT

This product is basically designed to reduce the carbon emission from fuels and help to

preserve our environment. It is very important to design such car to help decrease the rate

of carbon dioxide from the air and provide a better condition to tackle global warming.

This car will provide a boost to the natural environment because it is safer and has an

image to be friendlier to the environment itself. In this case, more and more people will

tend to buy such car to protect the environment by reducing the carbon emission to the

air.

THE ECONOMICAL ENVIRONMENT

The world is facing a shortage of fuel and it has become an economical crisis to every

country. This is evidence as the price of fuel is increasing and the probability of the price

of a barrel to increase at any day is very high. Therefore, this product will help customers

to save money because it consumes less fuel. The fuel consumption is one of the best

criteria based on this product. On the other hand, customers will be able to satisfy with

this kind of product because it is not too expensive and everybody has the privilege to

afford one. This product will satisfy the superior value of all different customers since it

has a very good design to solve to fuel shortage, less expensive, and can be affordable to

anyone.

THE TECHNOLOGICAL ENVIRONMENT

The fastest growing of information technology helps this product to be at its best. Its

design is basically provided with the help of information technology. Looking at its

design, this product benefits a lot from the technological sectors. This proves that this

product is favourable to the environment. Also, this product can be modified or even

upgraded to the standard where it will be suitable at any environmental condition. The

Information technology is very effective in letting this product to be very efficient. In this

case, it helps customers to satisfy this kind of product in this technological environment.

THE SOCIAL AND CULTURAL ENVIRONMENT

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It is believed that protecting the environment is a great concern. Therefore, this product is

purposely designed to be environmentally friendly. As a result, most people in the United

States and elsewhere are willing to offer such kind of product to save the environment. If

more and more people are keen to buy such kind of product then the environment would

be safe at any cost. Consequently, people will be more supportive to save what is best for

the communities and the environment.

SEGMENTATION

A market segment consists of a group of customers who share a similar set of wants. The

marketer does not create the segments; the marketers task is to identify the segments and

decide which one(s) to target. Segment marketing offers several benefits over mass

marketing. The company can create a more fine-tuned product or service offering and

price it appropriately for the target segment. The company can more easily select the best

distribution and communication channels, and it will also have a clearer picture of its

competitors, which are the companies going after the same segment.

In the context of automotive sector, we would be classifying it in the following ways:

BASED ON THE PRICE OF THE CAR

BASED ON THE LENGTH OF THE CAR

BASED ON THE USER SEGMENT

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TARGET MARKETS

The segment that gives the greatest opportunity to the marketer is called Target

Marketing.

VOLVO MOTORS

Volvo Motors develops its cars for buyer to whom automobile safety is a major concern.

Volvo therefore positions its as a safest a customer can buy.

HYUNDAI MOTORS

Hyundai marketing strategy is differentiated marketing. Its primary consumer target is

middle to upper income professionals who need true value for their money and

comfortable ride in city conditions. Its secondary consumer target is college students who

need style and speed. Its primary business target is midsized to large sized corporate that

want to help their managers and employees by providing them a car for ease of transport.

Its secondary business target is entrepreneurs and small business owners who want to

provide discounts to managers buying a new car.

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CHAPTER 2: LITERATURE REVIEW

Company Profile:

Kiran Udyog: A company with a vision " To Be A Global Supplier " Aims To Meet The

Stringent Demands Of Its Customers Both Domestic & International By Manufacturing

Of World Class Products. The Links In A Chain Of Development Mark The Realization

Of Our Ultimate Aspiration - Prosperity Through Partnership.

Established in 1984 with its Ist unit in Delhi, Kiran has come a long way in winning the

trust of major O.E.M's of the Indian Automobile Industry. With its continued

commitment in achieving the QCDD Targets, Kiran has created a distinct position for

itself on the Domestic Front.

Today group is operating six plants locating in Delhi & Gurgaon. Kiran is poised to make

a mark in the International Markets attracting customers from U.S.A, Europe, U.K. and

Japan by our high quality products produced from Latest & World class Production

facilities at Manesar Gurgaon.

Vision:

Cost Competitive Global Company

Customer Delight

Enhancing Stake Holders Value

Mission:

Latest Technology

Creativity & Innovation

Fast & Flexible

Adhering Quality Systems

Teamwork & Caring

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Individual Respect

Customers of Kiran Udyog Pvt. Ltd.

Name Customer Wise ProductsHonda Motorcycle & Scooter India Hubs, Wheel Assly, L Cover, Crank Case R

Sona Koyo Steering System Ltd. Pinion Housing, Case Steering Gear

GE, USA Motor Frame , End Shield ,Mid Shield

Maruti Udyog Ltd. (Suzuki Venture) Water Inlet, Cap, Arm shaft, Retainer Input,

Alternator/Compressor Brackets

Suzuki Motorcycler India (P) Ltd Cranck Case L & R, Cylinder Block, Hub RR,

& Sprocket RR

Tata Motor Ltd Cover, Rear Half, Lock Plate & Top Cover

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Technology Used by Kiran Udyog Pvt. Ltd.

Production & Workmanship Our aim is to meet the targets of our customers at all times

by providing world class quality products. Therefore we constantly intensify our

production forces ranging from importation of high precision manufacturing equipments

like Fully automatic Die Casting Machine & CNC Machines to optimization of the

production processes. This enables us to maximize our manufacturing technology and

production management.

Engineering Upgradation of company is considered to be a vital tool which provides

competitive advantage and our we follow the same policy. Our Design & Engineering is

the force, which plays an important role in striving us towards global excellence.

Our company endeavors to recruit high-caliber Engineering Professionals and creates an

atmosphere to realize the full potential of their experience & skill. With the strong back-

up of the sophisticated AutoCAD / CAM & Unigraphics software, a wide range of

projects came into existence.

With its continued efforts to keep abreast of the latest information & professional

knowledge and to strengthen technical exchange with domestic & internationalmanufacturers, Kiran is dedicated to excel in the automotive industry.

Quality:

Excellent & Consistent Quality is the cornerstone on which Kiran's reputation is built.

Great Importance is given to the expectations & requirements of customers and the

products are upgraded to provide maximum customer satisfaction.

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MARKETING MIX

The set of controllable tactical tools- product, price, promotion, and place (4 Ps) that the

firm blends to produce the response it wants, in the target markets.

A Marketing mix is the division of groups to make a particular product by pricing,

product, branding, place, and quality. Although some Day1 marketers have added other

P's, such as personnel, packaging and physical evidence, the fundamentals of marketing

typically identifies the four P's of the marketing mix as referring to:

"Marketing Mix" is set of correlated tools that work together to achieve company's

objectives, they are: product, price, promotion, place.

The set of controllable tactical marketing tools, product, price, place and promotion -

that the firm blends to produce the response it wants in the target market:

Product - A tangible object or an intangible service that is mass-produced or

manufactured on a large scale with a specific volume of units. Intangible products are

often service based like the tourism industry & the hotel industry. Typical examples

of a mass produced tangible object are the motor car and the disposable razor. A less

obvious but ubiquitous mass produced service is a computer operating system.

Price The price is the amount a customer pays for the product. It is determined by a

number of factors including market share, competition, material costs, product

identity and the customer's perceived value of the product. The business may increase

or decrease the price of product if other stores have the same product.

Place Place represents the location where a product can be purchased. It is oftenreferred to as the distribution channel. It can include any physical store as well as

virtual stores on the Internet.

Promotion Promotion represents all of the communications that a marketer may use

in the marketplace. Promotion has four distinct elements - advertising, public

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relations, word of mouth and point of sale. A certain amount of crossover occurs

when promotion uses the four principal elements together, which is common in film

promotion. Advertising covers any communication that is paid for, from television

and cinema commercials, radio and Internet adverts through print media and

billboards. One of the most notable means of promotion today is the Promotional

Product, as in useful items distributed to targeted audiences with no obligation

attached. This category has grown each year for the past decade while most other

forms have suffered. It is the only form of advertising that targets all five senses and

has the recipient thanking the giver. Public relations are where the communication is

not directly paid for and includes press releases, sponsorship deals, exhibitions,

conferences, seminars or trade fairs and events. Word of mouth is any apparently

informal communication about the product by ordinary individuals, satisfied

customers or people specifically engaged to create word of mouth momentum. Sales

staff often plays an important role in word of mouth and Public Relations

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PRODUCT

MARUTI SWIFT

European Styling. Japanese Engineering. Dream-Like Handling.

The new Swift is a generation different from Suzuki design. Styled with a clear sense of

muscularity, its one-and-a-half box, aggressive form makes for a look of stability, a sense

that it is packed with energy and ready to deliver a dynamic drive. Its solid look is

complemented by an equally rooted road presence and class- defining ride quality. New

chassis systems allow for the front suspension lower arms, steering, gear box and rear

engine mounting to be attached to a suspension frame. You get lower road noise, and a

greater feeling of stability as you sail over our roads with feather- touch ease.

TATA INDICA

Though a late entrant, the Indica quickly established itself as the benchmark for the

segment. By offering exciting features, the car changed the rules of the category in

Space, Power, Style, Safety and Economy for international market. The Indica ensured a

pleasant ride and handling experience as it had features like wide large tyres, generousleg room and independent front and rear suspension. It developed a new segment of

diesel small cars along with its petrol offering. The luggage space was also the best in its

class.

The rigid 980 kgs steel body of the car was rigorously tested at India's first and only

crash test facility. A collapsible steering wheel, impact absorbing bumpers, anti-

submarine seats, crumple zones and side impact beams are just a few of the features that

make the Indica one of the safest cars on the roads today. Savings are ensured with the

fuel-efficient 1.4L diesel engine, while the 1.4L petrol engine is optimized for

performance.

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Indica features for international market:

Collapsible steering column

Side-impact beam

Energy-absorbing crumple zones in the front

Anti-submarine seats

Child-safety locks on rear doors

Laminated front and rear windshield glass

SCORPIO

Rational benefits: World class vehicle, good looks, car like comfort, great value

Emotional benefits: Ownership experience of thrill, excitement and power Relational

benefits: Young modern, premium, city companion / extension of lifestyle.

PRODUCT, SERVICES AND BRANDING STRATEGY

What is a Product?

Product is anything that can be offered to a market for attention, acquisition, use, or

consumption that might satisfy a want or need. Products include more than just tangible

goods. Broadly defined, products include physical objects, services, events, persons,

places, organizations, ideas or mixes of these entities. Services are a form of product that

consists of activities, benefits or satisfactions offered for sale that are essentially

intangible and do not result in the ownership of anything.

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Example: banking, hotel and airline.

Products, Services and Experiences

Today, companies are creating and managing customer experiences with their products.

Levels of Products and Services:

Product Planners need to think on three levels:

1. Core Benefit: This addresses the question What the buyer is really buying?. At this

level, marketers must define the core: problem-solving benefits or services that consumer

seeks.

2. Actual Product: At this level, the core benefits must be turned into actual products.

Product planners need to develop product and service features, design, quality level,

brand name and packaging.

3. Augmented Product: Finally at this level, the product planners must bundle the

products with services. They must build an augmented product by offering additional

consumer services and benefits.

Hyundai Santro

CORE PRODUCT

Core Product is the problem solving services or benefits that consumers purchase the

product for, and by applying this concept to Santro you can state that the core product is

speed, transportation, and freedom to go anywhere, easy traveling, and convenience.

ACTUAL PRODUCT

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Actual product meaning the products parts, quality, features, design, brand name and

other attributes received. Now, if we use these things and combine it with Santro we can

state that the actual product is: Santro, as the brand name, it matters little about the name,

because HYUNDAI is very famous already, people will recognize the brand in an

instance, and features such as the fact that the car is fully customizable, so you can add

most things to your car, i.e. Stereo, big speakers, rims for the tires, TV in seat etc., also

design, where you can choose between a lot of colours, seat colour, and fabrics, all the

things you can imagine. And of course the quality, the car will be regular HYUNDAI

standard, meaning quality will be the same as for any other car made by HYUNDAI,

which is high quality.

AUGMENTED PRODUCT

Augmented product is the additional consumer services and benefits built around the core

and actual product, as well as add value and differentiate the product from its

competition. The augmented product for Santro is after-sale services such as free yearly

check up, as well as a free oil check after 2 years, free installation of additional features

when you customize your car, and help with car insurance, and quick repair services.

PRODUCT CLASSIFICATIONS

GM STUXX

From the 4 product classifications, convenience, shopping, specialty and unsought, the

Stuxx is classified as a specialty good, since specialty goods are purchased infrequently,

and most of the times, buyers make special purchasing effort. By listing some of the

characteristics for specialty products we can say that substitutes are not accepted, and

that the product is infrequently purchased, and since our Stuxx is a GM we know that

there are some brand loyalty as well. And if we look at the strategy, we can note limited

distribution, and consumers might seek our product regardless of location.

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STAGES IN DEVELOPING PRODUCT AND SERVICE

ATTRIBUTES

PRODUCT ATTRIBUTES

Product attributes consist of several categories, such as Product quality, Product features,

Product style and design. For Stuxx product quality is the performance quality, because it

can be used a lot and still last for a long time (Durability). And as for Product style we

know that Stuxx offers many colours and many styles used to attract attention from

trendy consumers, and general consumers, the style however does not contribute to better

performance. For Product design, the car has a very special chassis that allows many

changes, making this a fully customizable car, where you are free to alter appearance,

features, construction, such as adding items on the back of the car, lowering the car

making it look more stylish like a race car.

BRANDING

There are several advantages for buyers when talking about branding, first of all product

recognition, everyone knows GM, so if they know GM, then they know Stuxx as well.

Quality on Stuxx is same standard as the rest of GMs cars. There are. But not only

buyers have advantages, no, sellers as well. Here are a few examples, basis for products

quality, provides legal protection, helps to segment the markets.

BRAND STRATEGY

A study of international brand names was done and a classification of brand names of

midsize cars and SUVs was done into groups.

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International brand naming trends and strategies were analyzed. New names were

generated. These brand names were researched massively first by qualitative techniques

and then by quantitative techniques.

The name that emerged as most popular, and which was also the most liked name

internally at Mahindra was

SCORPIO

BRAND ENDORSEMENT STRATEGY

The relation between Scorpio and the mother brand Mahindra was also deliberated upon.

The strategy chosen for Brand Endorsement was - Scorpio from Mahindra -shadow

endorsement, one which does not shout Mahindra.

The Mahindra brand image was not modern and young. There was a need to create a

strong distinct modern brand. Hence Mahindra as a Masterbrand could not contribute

towards enhancing the Value Proposition. Yet Mahindra had to provide source

reassurance. Also the distribution would be through Mahindra dealerships. Hence it

became a shadow endorser.

PACKAGING

Since product is a car, packaging might not be of much importance. Cars usually dont

come in a box. However, since Santro is made for students and older, they have decided

to make a big box, free of all charges, if the car is a gift for someones birthday. Santro is

a good choice as a first car; parents can easily buy it as a gift for their young

teenagers/students.

LABELING

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No labelling, however for curious users, there will be a small brochure about the

ingredients car parts, so they can see how exactly the car works, and what and where

the different parts are from.

PRODUCT SUPPORT SERVICES

As for product support services, there are 3 things to know: Assess the value of current

services and obtain ideas for new services. Assess the cost of providing the extra services

and putting together a package of services that delights the customers and yields profits

for the company. All these, are already applied to Santro if we look at Augmented

Product, which I wrote about earlier. Customers would be delighted about those extra

services, and might tell friends about them and in the end make more profit for the

company.

PRODUCT LINE DECISIONS (The Product Mix)

When it comes to product line decisions, and product mix to be exact; we will find that

there are 3 types, namely width, length and depth. As for Stuxx, it is definitely width,

because Stuxx is a different product line for GM.

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PRICE

MARUTI SWIFT

After launching cars for the masses since so many years, Indias largest automobile

manufacturer is now targeting the premium segment with their latest model from the

Suzukis stable. Pricing of this premium hatchback is start from Rs.4 lakh. This price

range would practically rip apart Hyundais offering in Getz, which is priced at a much

higher tag of Rs. 4.5 lakh. Both the companies are known for their value based offerings

and Maruti with their extensive service network and brand reputation for making reliable

cars should get the customers nod over their competition.

TATA INDICA

Tata Motors adopted a competitive pricing strategy for Indica in the global market. Prices

were fixed on the basis of the norms prevailing in the international market. Also the

prices offered by their competitors like Toyota, Ford, Fiat, were kept in mind while

deciding the prices.

SCORPIO

Pricing Strategy: to be a premium brand yet having universal appeal. Scorpio was to

compete with the midsize cars like Hyundai Accent, Ford Ikon, Opel Corsa, Maruti

Suzuki Esteem on the one side and UVs like Toyota Quails, Tata Safari and the Tata

Sumo on the other. Scorpio adopted the penetrative pricing strategy positioned in the

psychological price barrier of Rs. 5 -7 Lakhs.

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PROMOTION

MARUTI SWIFT

When Maruti Udyog launched the Swift, the automotive industry was agog with

expectation that the car had the makings of a real winner. Three versions were launched

with the base variant carrying a retail tag of Rs 3.85 lakh, ex-showroom, New Delhi, and

this aggressive pricing only reinforced this feeling.

Event Organized By Maruti to Promote Swift:

Fever FM and Maruti Suzuki Swift organize a Night Rally for Delhi-ites

On March 24, 2009

In a co-operative marketing initiative, Fever FM and Maruti Suzuki Swift came together

to organize a Night Rally in Delhi. The Swift Night Life Rally was organized for the

Swift Life Club. The brand tied up with the station to extend the experience to the people

who were unable to participate in the activity.

Honda

Road Shows

The company plans to stage road shows, to display vehicles in the pavilions during

various college festivals and exhibition.

Hyundai

Television advertisements

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Advertisements to promote and market our product are shown on leading television

channels. Major music and sports channels promote and they reach out to the youth will

be promoted through Star, Zee, Sony and doordarshan etc as it has more viewers.

Radio

Radio is the medium with the widest coverage. Studies have recently shown high levels

of exposure to radio broadcasting both within urban and rural areas, whether or not

listeners actually own a set. Many people listen to other people's radios or hear them in

public places. So radio announcements are made and advertisements are announced on

the radio about the product features and price, qualities, etc.

Print Ads

Daily advertisements in leading newspapers and magazines are used to promote the

product. Leaflets at the initial stage are distributed at railway stations, malls, college

areas and various other locations.

Workshops and Seminars

Workshops and seminars are held in colleges and big corporate to make people aware

about the companies past performance and product features, its affordability and usage,

vast distribution network.

Banners, neon signs

Hoardings, banners, neon signs are displayed at clubs, discs, outside theatres,

highways and shops to promote its brand car.

Booklets and pamphlets

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Booklets are kept at car showrooms, retail battery outlets, etc for the customer to read.

These booklets provide information about its company; the products offered which suits

the customers need accordingly.

SCORPIO

Brand Promise: Luxury of a car. Thrill of an SUV this brand positioning addresses the

key consumer Insight and the product delivers the promise. The position is also a unique

proposition, which will help the brand have a distinct image in the consumers mind.

The baseline captures the essence of the brand, which is superiority and uncompromising

attitude. It also summarises the spirit behind the making of the Scorpio.

Media Strategy

Dramatic and high impact launch

High visibility

Push brand image even by the media vehicle

Building impact through multiple-media

PR, Mass Media, Direct Marketing, Events

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Public Relations

Pre-launch excitement and buzz was created by a full blown PR program. Media

coverage on the IDAM process, the people behind the Scorpio, the obsession, the world

class technology, etc set the tone for the hyped up launch. PR was also the first tool used

for launching the Scorpio. The coverage of the launch was massive. It got four cover

stories.

Mass Media

While the media targets would be achieved through the right selection of the media mix,

the Scorpio media posture was to ensure that Scorpio was present on the decided media

but with a difference. Scorpio would use media innovations to create differentiation on

the traditional media and do things in a bigger and better manner.

Customer Relationship Management (CRM)

CRM as a tool was used to create positive word-of-mouth, to monitor customer

experiences and generate referrals. A series of CRM activities were implemented with

regular direct communication, events and customer research. The CRM plan included a

welcome Pack on filling up Scorpio Club (Top Gear) form, satisfaction surveys,Events,

Festive offers, Rewards Program, etc.

TATA INDICA

More car per car is the famous tagline of this product. The Indicas positioning has

remained consistent with the brand's offering in an increasingly competitive market The

Indica is now synonymous with the word More, by encapsulating the inherent product

strengths and marrying them with the customer trait of desiring More.

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A promotion strategy for Indica v2 in international market is more or less same as that of

the Indian market. Media innovations have been a key to the success of the Indica.

Tata at 29th Bangkok International Motor Show 2008

The positioning was strengthened with the successful launch of the Indica V2, which

assumed the leadership position in the year of its launch.

The Indica v2 was launched in the international market only through the press medium,

with three diesel versions and a petrol version, and this campaign shattered many

automobile advertising myths. The car was launched without any television advertising,

but through high-impact newspaper ads, dominating the medium and delivering the

desired impact. Headlines such as Youll never have to suffer a small car again assisted

customers in distinguishing between their old choices and the Indica. This, in effect,

placed the Indica on the pedestal of leadership, set to change the rules of the game.

A recent campaign for the Indica V2 has helped in building the product on the rational

platform and adds an emotional layer. Anchored on the insight Its only human to want

more, the campaign revolves around interesting candid moments in the daily lives of

normal everyday people who desire more; be it a boy wanting the other boys bigger

lollipop, or a baby crying when her parents stop driving her around in the Indica V2. The

latest campaign moves to the Even more car per car positioning.

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PLACE

MARUTI SWIFT

The car manufacturing company, called Maruti Suzuki Automobiles India Limited, is a

joint venture between Maruti Udyog and Suzuki Motor Corporation holding a 70 per cent

and 30 per cent stake respectively.

The Rs1,524.2 crore plant has a capacity to roll out 1 lakh cars per year with a capacity to

scale up to 2.5 lakh units per annum. The car manufacturing plant will begin commercial

production by the end of 2006.

The engine and the transmission plant has owned by Suzuki Power train India Limited in

which Suzuki Motor Corporation would hold 51 per cent stake and Maruti Udyog

holding the balance. The ultimate total plant capacity is three lakh diesel engines.

However, the initial production is 1 lakh diesel engines, 20,000 petrol engines and 1.4

lakh transmission assemblies.

TATA INDICA

Tata automobile group have a very large distribution network all over the world. Tata

Indica v2 is exported and assembled in many countries. South Africa has an assembling

unit for consumer vehicles. Other places where the companys products (Tata Indica) are

exported and in some assembled also are mentioned below:

Africa :- Algeria , Angola , Ethiopia , Ghana , Kenya , Mauritius , Sudan , Uganda ,

South Africa , Senegal etc.

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Europe: - Greece, Hungary, Italy, Malta, Portugal, Spain, Switzerland, UK and

Ireland.

CIS : - Belarus, Russia, Ukraine.

Asia: - Bangladesh, Malaysia, Sri-Lanka, Nepal, Bhutan.

Australia continent

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PEOPLE

There are various types of people in any Organization. The various types of people in

case of Toyota can be classified as Customers, Sales Executives, Society, Government,Competitors, and Media.

The most important out of these is our Customers. A customer can be any person who

purchases the product; he may or may not use that product for himself. A consumer is

one who actually uses the product himself. For example a father purchases Corolla for his

son. In this case the father will be the Customer and son will be the Consumer. The main

people involved in the purchase decision of the car are the Family Members. In a recentstudy conducted, it was found out that these days children play a major role in deciding

which car to buy for the family. The company has to seriously take into consideration all

these factors. Also the factors that whether one uses the car for travelling, office,

shopping or family/personal etc.

As this car falls into a segment where price range is between 9-11 Lacs, so the company

has to target those people who not only have the ability to spend that much amount ofmoney but are also willing to spend that much amount of money. Data regarding the

purchasing power of different classes of people is also very necessary. Customers tastes

and preferences have to be taken into consideration.

Next comes the Sales Executives who deal with the final customers and finish the sales

call. The Sales Executives play a major role. As the people of the organization they are a

window through which the customers interact with the company. They have to be trained properly through customized modules designed especially for them taking into

consideration the various factors.

Corolla Owners Profile

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Age: 25-45

Occupation: Business Class or High Level Service Executives

Social Class: These people (Lower Upper to Higher Upper Class) generally have an

existing C segment car before they purchase Corolla

Areas: Urban/ Sub Urban, major Cities/Towns

Income Level: More than Rs. 2 lacs p.m

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PHYSICAL EVIDENCE

The Physical Evidence is created by displaying physically the product. Along with that

creating an atmosphere for the customers where in they feel the presence of product.Toyota creates a powerful physical evidence for its customers through its Showrooms,

Hoardings, Logo etc. All the showrooms are designed on a common platform. The

interiors of all the showrooms across India are the same. The designs for the same are

created by a team of Professionals in this field. The designs are prepared very carefully

keeping into consideration various factors such as customers tastes and preferences,

likes and dislikes etc. You will always find a Toyota showroom having the Toyota Bill

Board outside with white base and red foreground. This creates a physical presence and

people can feel the product.

SCORPIO

Infrastructure

Thirty-five showrooms across the country were redone entirely with the same look and

identity and a dcor built around movement, technology and sportiness. The theme

focused on giving the customer a memorable experience. The showroom revamp was

centered on the intention to provide a uniform customer experience at all the touch points

and to provide the customer with a unique experience and not just a product.

Therefore the back office would remain outside the customers line of vision because the

customer would be concerned with the product and not with the paperwork.

PROCESS

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The various processes involved in getting available the product from the manufacturer to

the end consumer are to be efficiently performed by the company. The processes start

when the customer is contacted by the Sales Personnel of the Dealership or the customer

contacts the Dealership if he is interested to buy a Corolla. The data regarding the various

customers can be had from various sources of data available through different agencies

which specialize in providing data. After the call is made, an appointment is fixed. The

Sales Executive prepares for the meet. He collects all the possible information which

would be needed for the meeting i.e. data about the customer, details about the car,

maximum permissible discount structure, finance options, delivery terms, free

accessories which will be provided to the customer.

The sales personnel will find out that what is the present vehicle used by the customer,

his present buying power, satisfaction level, seriousness in buying etc. Along with that he

will also find out his exact needs, desired level of satisfaction, lifestyle patterns etc. Sales

personnel also ask certain questions through which he comes to know about the various

factors he wants to know. He asks both open as well as closed ended questions. With the

help of these questions, he can come to know the various reasons due to which he is

buying that car. These can be Performance, Safety, Comfort, Driving Pleasure,

Appearance etc.

These processes either lead to completion of sales call or sometimes unfortunately leads

to unsuccessful sales call which could not be competed.

DEALING WITH THE COMPETITION

Poor firms ignore their competitors; average firms copy their competitors; winning

firms lead their competitors PHILIP KOTLER

GENERAL ATTACK STRATEGY

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FRONTAL ATTACK: the attacker matches its opponents product, advertising, price

and distribution

DISTRIBUTION CHANNELS

SCORPIO

Since the Scorpio was targeted at an urban clientele it needed a stronger distribution

presence in Metros and urban areas. Hence, the distribution channel had to focus on

providing an appealing experience for modern car buyers and on offering international

standards of auto retail.

The Scorpio was launched in a phased manner - first in Metros Mumbai, Delhi,

Bangalore, Chennai. Twenty cities were included over a period of 4 months and within a

year 50 cities were covered. This ensured attention to main markets and to ensure that

initial production of the vehicle could match demand. Dealerships were revamped prior

to launch in a particular city.

The Marketing Distribution Channel of Toyota Kirloskar Motor India, the Manufacturer

of Corolla, is a Single Level Channel depicted:

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THE VALUE CHAIN

The Value-Chain Network within Stuxx is a significant medium for measuring the

products quality and performance, from Inbound Logistics-to- Operations-to- Outbound

Logistics-to- Marketing/Sales-to-Service. As a manufacturing firm, GM that produces

Stuxx manufactures the vehicle and then distributes it to its store all over USA. The

whole team network has a common purpose in operation and that is to produce and to sell

it to make the customer smiling when disembarking. This common belief has brought a

successful feedback to the overall sales and because providing the service for selling is

considered an important task by the employees at Stuxx, it has never failed. Stores are

designed so that accommodating a customer is luxurious but keeping his/her perception

to as not expensive-sense.

SWOT ANALYSIS OF MARUTI UDYOG LTD.:

STRENGTHS

WEAKNESSES

OPPURTUNITIES

THREATS

STRENGTHS

The Quality Advantage

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Maruti Suzuki owners experience fewer problems with their vehicles than any other car

manufacturer in India (J.D. Power IQS Study 2004). The Alto was chosen No.1 in the

premium compact car segment and the Esteem in the entry level mid - size car segment

across 9 parameters.

The J.D. Power APEAL Study 2004 proclaimed the Wagon R no. 1 in the premium

compact car segment and the Esteem No.1 in the entry level mid - size car segment. This

study measures owner in terms of design, content, layout and performance of vehicles

across 8 parameters.

A Buying Experience like No Other

Maruti Suzuki has a sales network of 307 state-of -the-art showrooms across 189 cities,

with a workforce of over 6000 trained sales personnel to guide our customers in finding

the right car. Our high sales and customer care standards led us to achieve the No.1

nameplate in the J.D. Power SSI Study 2004.

Quality Service across 1036 Cities

In the J.D. Power CSI Study 2004, Maruti Suzuki scored the highest across all 7

parameters: least problems experienced with vehicle serviced, highest service quality,

best in-service experience, best service delivery, best service advisor experience, most

user-friendly service and best service initiation experience.

92% of Maruti Suzuki owners feel that work gets done right the first time during service.

The J.D. Power CSI study 2004 also reveals that 97% of Maruti Suzuki owners would

probably recommend the same make of vehicle,

while 90% owners would probably repurchase the same make of vehicle.

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WEAKNESSES

Commodity price risk

MULs commodity price risk relates to higher cost due to change in price of input such

as Ferro-alloys (steel), non Ferro alloys (aluminium), plastic and rubber, which go into

the production of automobile.

In order to mitigate these risks, the company continues to attempt to enter into long term

contracts based on its projection of prices in a volatile commodity market, where your

company gives top priority to ensuring smooth availability of inputs, long term contracts

are helpful. They also help to minimise the impact of growing input price. Conversely,

long term contractor dilute the benefit if any, of a decline in input price.

Exchange Rate Risk

Your company is exposed to the risks associated with the fluctuation in foreign exchange

rates mainly on import of component & raw material and export of vehicles. Your

company has a well-structured exchange risk management policy. The company manages

its exchange risk by using appropriate hedge instrument depending on the prevailing

market condition and the view on the currency.

OPPURTUNITIES

Leading Growth

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As the market leader, your company led the growth in the passenger car sector last year.

Maruti's sales went up 30% to 4,72,000 units. This, as I said earlier, is the highest annual

sale since your company began operations 20 years ago. Maruti also gained market share,

mainly on account of its performance in the competitive A2 segment where it increased

its share from 40.3% in 2002-03 to 47.7% in 2003-04.

The record sales performance was reflected in the financials. Net Sales (excluding

excise) grew by 31% to Rs 93,456 million. Operating Profit Margin increased from 0.8

% in 2002-03 to 4.7 % in 2003-04. Profit after Tax jumped 270% to Rs 5421 million.

Your company is committed to motorising India. Towards this end, your company's

partnership with State Bank of India and its Associate Banks took organised finance to

small towns to enable people to buy Maruti cars.

THREATS

In the course of its business, MUL is exposed to a variety of market and other risks

including the effects of demand dynamics, commodity prices, currency exchange rates,

interest rate, as well as risk associated with financial issues, hazards event and specific

asset risk. Wherever possible, we use the instrument of insurance to mitigate risk.

Business risk

The automotive industry is very capital intensive. Such investment requires a certain

scale of operation to generate viable returns. These scales depend on demand. Maruti is

still depending mainly on the Indian market. Although 2004-05 was year of continued

growth for the Indian economy, whether this growth momentum will continue has to be

seen.

THREATS FROM COMPETITORS

Tata Motors Limited

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In the 2004 fiscal year, Tata Motors generated revenues of $3,542.2 million

(INR154,935.2 million). The company made a net profit of $185 million (INR8,103.4

million) in the 2004 fiscal year.

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General Motors Corporation

For the fiscal year ended December 2004, GM generated revenues of $193,517 million,

an increase of 4.3% from the previous year. The company reported a net income of

$2,805 million for fiscal 2004, down 26.6% from the previous year

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Two-wheeler in India:

Introduction:

The feeling of freedom and being one with the Nature comes only from riding a two

wheeler. Indians prefer the two wheelers because of their small manageable size, low

maintenance, and pricing and easy loan repayments. Indian streets are full of people of

all age groups riding a two wheeler. Motorized two wheelers are seen as a symbol of

status by the populace. Thus, in India, we would see swanky four wheels jostling with

our ever reliable and sturdy steed:Two wheelers in India are the second largest producer

and manufacturer of two-wheelers in the world. It stands next only to Japan and China in

terms of the number of two-wheelers produced and domestic sales respectively. Indian

two-wheeler industry has got spectacular growth in the last few years. Indian two-

wheeler industry had a small beginning in the early 50's. The Automobile Products of

India (API) started manufacturing scooters in the country. Bikes are a major segment of

Indian two wheeler industry, the other two being scooters and mopeds. Indian companies

are among the largest two-wheeler manufacturers in the world. In the initial stages, the

scooter segment was dominated by API; it was later overtaken by Bajaj Auto. Although

various government and private enterprises entered the fray for scooters, the only new

player that has lasted till today is LML. The motorcycle segment was initially dominated

by Enfield 350cc bikes and Escorts 175cc bike. The two-wheeler market was opened to

foreign competition in the mid- 80s. And the then market leaders - Escorts and Enfield -

were caught unaware by the onslaught of the 100cc bikes of the four Indo-Japanese joint

ventures. With the availability of fuel efficient low power bikes, demand swelled,

resulting in Hero Honda - then the only producer of four stroke bikes (100cc category),

gaining a top slot.

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The first Japanese motorcycles were introduced in the early eighties. TVS Suzuki and

Hero Honda brought in the first two-stroke and four-stroke engine motorcycles

respectively. These two players initially started with assembly of CKD kits, and later on

progressed to indigenous manufacturing. In the 90s the major growth for motorcycle

segment was brought in by Japanese motorcycles, which grew at a rate of nearly 25%

CAGR in the last five years. The industry had a smooth ride in the 50s, 60s and 70s when

the Government prohibited new entries and strictly controlled capacity expansion. The

industry saw a sudden growth in the 80s. The industry witnessed a steady growth of 14%

leading to a peak volume of 1.9mn vehicles in 1990. In 1990, the entire automobile

industry saw a drastic fall in demand. This resulted in a decline of 15% in 1991 and 8%

in 1992, resulting in a production loss of 0.4mn vehicles. Barring Hero Honda, all the

major producers suffered from recession in FY93 and FY94. Hero Honda showed a

marginal decline in 1992. The reasons for recession in the sector were the incessant rise

in fuel prices, high input costs and reduced purchasing power due to significant rise in

general price level and credit crunch in consumer financing. Factors like increased

production in 1992, due to new entrants coupled with the recession in the industry

resulted in company either reporting losses or a fall in profits.

Key players in the Two-wheeler Industry There are many two-wheeler manufacturers in

India. Major players in the 2-wheeler industry are Hero Honda Motors Ltd (HHML),

Bajaj Auto Ltd (Bajaj Auto) and TVS Motor Company Ltd (TVS).

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SEGMENTATION OF TWO WHEELER

A Two Wheeler Sector Sub-Segmenting in the three Segments.

1. Motorcycle

2. Scooter

3. Mopeds

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Growth Prospects and Key Drivers of the Indian Two Wheelers Industry

The growth witnessed by the Indian two wheeler industry indicates the growing demand

for low cost personal transportation solutions amongst the 300 million Indian middle

class consumers. Despite this spectacular growth rate, the two wheeler penetration

(number of two wheelers per 1000 inhabitants) in India remains lower than other Asiancountries. This fact provides an opportunity for continued growth in the market. India has

the lowest Penetration of two wheelers as compared to countries like Taiwan, Thailand,

Malaysia, Vietnam, Indonesia and China. In the present scenario, growth in the two

wheeler Industry will be driven by several factors:

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Rise in Indias Young Working Population:

With the rising levels of per capita income of people, the Indian two wheeler market

offers a huge potential for Growth. This growth is relevant in the light of the fact that 70

per cent of Indias population is below the age of 35 Years and 150 million people will

be added to the working Population in the next five years. The number of women in the

urban work force is also increasing; this will lead to the Growth of gearless scooters.

Rise of Indias Rural Economy and Growth in Middle Income Households:

The growth prospects of the Indian rural economy offer a significant opportunity for the

motorcycle industry in India. The penetration of motorcycles amongst rural households

with income levels greater than US$ 2,200 per annum has already increased to over 50

per cent. The current target Segment for two wheelers, i.e., households belonging to the

Income category of US$ 2,20012,000 is expected to grow at a CAGR of 10 per cent.

Greater Affordability of Vehicles

The growth in two-wheeler sales in India has been driven by an increase in affordability

of these vehicles. An analysis of the price trends indicates that prices have more or less

stagnated in the past. This has been part of the marketing strategy adopted by the

manufacturers to gain volume, as well as conscious efforts adopted to bring down costs.

The operating expenses of leading manufacturers have declined by around 15 per cent in

the last five years. With greater avenues of financing, the customers capacity to own a

two wheeler has improved.

Rapid Product Introduction and Shorter Product Life Cycle:

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The last five years have witnessed a sharp increase in new product launches in the two-

wheeler industry. It is estimated that close to 50 new products have been launched by

manufacturers during this period, filling up all price points and targeted at various

consumer segments.

Inadequate Public Transport Systems in most Urban Areas:

The economic boom witnessed in the country and the increased migration to urban areas

have increased the traffic congestion in Indian cities and worsened the existing

infrastructure bottlenecks. Inadequate urban planning has meant that transport systems

have not kept pace with the economic boom and the growing urban population. This has

increased the dependence on personal modes of transport and the two wheelers market

has benefited from this infrastructure gap.

Challenges faced by the industry

Despite the high growth achieved in the past and the high potential in the future, the two-

wheelers market faces some challenges.

Rising Customer Expectations

The growth witnessed by the Indian two wheeler industry has attracted a number of new

entrants to the market and it is expected that the Indian industry will become more

competitive in the future. The plethora of products introduced in the past has also raised

customer expectations with respect to reliability, styling, performance and economy.

Environmental and Safety Concerns:

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The increasing demand for two wheelers will need to be managed to address issues

relating to overcrowding of roads. Another problem is the insufficient infrastructure for

inspection to ensure adherence to emission norms. As the industry grows, it is important

to regulate the sale of used two wheelers in a more organised manner for which a

mechanism needs to be evolved. Unregulated sale of two wheelers, especially in the rural

areas, are likely to create issues related to emissions and safety of vehicles.

Creation of Distribution Infrastructure:

Leading companies need to ensure that on one hand they build adequate infrastructure in

terms of dealerships and servicing stations in the urban areas and on the other ensure that

their distribution infrastructure also reaches the rural areas

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Chapter 3

Research Methodology

3.1 Scope of the Study

Geographical Scope:

The study was conducted in Delhi. The areas covered in Delhi were:

Kalkaji, Munirka, R.K.Puram, Bersarai, Lajpat Nagar, South Extension, Defence Colony,

Yousuf Sarai, Bhikaji Kama Place, Vasant Kunj, Connaught Place, Karol Bagh,

Paharganj, Kamala Nagar, Model Town,Rohini, Rajouri garden, Patel Nagar, Paschim

Vihar, Jail Road, Nangal Raya, Janak Puri, Vikas Puri, Uttam Nagar, Laxmi Nagar,Shakarpur,Nehru Place, Shahadra, Mayur Vihar, Karol Bagh, Shankar Road,

Product Scope:

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The study was conducted for the Honda Motorcycle & Scooter India, Sona Koyo

Steering System Ltd., GE, Maruti Udyog Ltd. Suzuki Motorcycler India, Tata Motor Ltd.

3.2 Sources of Data:

Data was collected from both primary as well as secondary sources. First secondary data

was collected to know the current trends in the market, the various brands and their

handsets available in the market and the price ranges in which these handsets are

available.

This was followed by the primary survey to find out the market share of Sony Ericsson

and its competitor brands in different categories and the brand strategies being implied by

these brands. Also through the primary survey the retailer categories and characteristics

of retailers in these categories were identified and the characteristics of retailers in these

categories.

3.3 Questionnaire Design:

The questionnaire has been designed based on literature reviewed, as well as with thehelp of industry experts.

The questionnaire has been made to identify the market mix of Automotive Industry and

its competitors.

3.4 Sampling:

Sampling Design: The sample chosen from the retailers was based on the number of

retailers present in a particular area of Delhi. This was done on the basis of convenient

sampling.

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Sample Size: The sample size selected for conducting the study was of 100 retailers,

which was decided after consultation with industry experts

3.5 Procedure for Data Collection:

For the purpose of data collection both primary as secondary data would be used. For the

purpose of primary data collection study, dealers were administered with a questionnaire,

which had both structured as well as unstructured questions.

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Chapter 4:

Data Analysis

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FACTORS IMPORTANT IN A CAR PURCHASE

7%

7%

50%

12%

18%

3%3%

COST

STYLE

PERFORMANCE

PERFORMANCE ANDSTYLE

PERFORMANCE AND

COST

STYLE AND COST

STYLE COST AND

PERFOMANCE

65


66/72

FACTORS IMPORTANT IN A CAR PURCHASE

0

10

20

30

40

50

60

70

80

90

1

ATTRIBUTES

PERCENTAGE

OFRE

SPONDENTS

PERFORMANCESTYLE

COST

66


67/72

RESPONDENTS RANKING OF ATTRIBUTES

PREFERENCE RANK PREFERENCE POINTS

1 140

2 120

3 100

4 80

5 60

6 40

7 20

Attributes Preference Rank Preference Points

Performance 1.5 130

Cost 2.9 102

Low Maintenance 2.7 106

After Sales Service 3.4 92

Brand Name 3.8 84

Safety 4.4 72

Credit Facility 6.4 32

67


68/72

0 20 40 60 80 100 120 140

PERFORMANCE

COST

LOW MAINTENANCE

AFTER SALES SERVICE

BRAND NAME

SAFETY

CREDIT FACILITY

PREFERENC

E

POINT

ATTRIBUTES

68


69/72

SOURCES OF INFORMATION

0

5

10

15

20

25

30

35

40

1

SOURCE OF INFORMATION

NUMBER

OFRESPO

NDENTS

TELEVISION

MAGAZINE

FRIENDS

DEALERS

MECHANIC

OTHER CAR OWNERS

69


70/72

0

10

20

30

40

50

60

70

80

PERCENTAGE OF

RESPONDENTS

1

INFLUENCERS

INFLUENCING FACTORS IN DECISION MAKING

FRIENDS

FAMILY

MEDIA

OTHERS

70


71/72

CONCLUSION:

Indias expedition to become a global auto-manufacturing hub could be seriously

challenged by its inability to uphold its low-cost production base. A survey conducted by

the research, KMPMG firm reveals that the Indian auto component manufacturers are

increasingly becoming skeptical about sustaining the low-cost base as overheads

including labour costs and complex tax regime are constantly rising. The survey said

many executives believe that Indias cost advantage is grinding down fast as labour costs

are constantly increasing and retaining employees is becoming more and more difficult.

Increased presence of global automotive companies in the country was cited as one of the

reasons for the high erosion rate.

AUTOMOTIVE Indian auto businesses will only flourish if they boost investments in

automation. In the longer term, cost advantage will only be retained if Indian capital can

be used to develop low-cost automation in manufacturing. This is the way to preserve our

low cost. Global auto majors are also cynical about Indias low cost manufacturing base.

India taxation remains a big disadvantage. This is not about tax rates it is just about

unnecessary complexity. But some companies also believe there is scope for reducing the

cost of doing business. In spite of this there are opportunities to exploit lower costs right

across the board. Its true that labour costs are definitely increasing but they are still five

per cent of the total operational costs. The labour costs can be further reduced if

companies are successful in bringing down other costs like reducing power costs. Low-

cost base can never last long. The company said Indian industry has till now relied on

very labour intensive model but it would have to switch to a more capital intensive

model.

71


72/72

BIBILIOGRAPHY

MARKETING MANAGEMENT BY PHILIP KOTLER

KIRAN UDYOG PVT. LTD. OFFICIAL WEBSITE: www.kiranudyogindia.com/

WIKIPEDIA

TOYOTA OFFICIAL SITE M

ARUTI OFFICIAL SITE

TATA OFFICIAL SITE

AUTOMOTIVE HYUNDAI OFFICIAL SITE

AUTO INDIA MAGAZINE

AUTODRIVE MAGAZINE

BBC NEWS SITE

INSIDETIME.COM

HERO HONDA OFFICIAL SITE

DOMAIN-B.COM

sanju strategies, minda

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