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Maruti market expantion startegies of maruti
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Transcript of Maruti market expantion startegies of maruti
CASE STUDY ON MARKET
EXPANTION STARTEGIES OF MARUTI UDYOG
Presented by: Ajay Kumar
Munish Kumar
A BRIEF INTRODUCTION TO CASE AND MARUTI UDYOG
In 1982, Government of India entered into a joint venture with Suzuki motor corporation of Japan
Plant was established at Gurgaon in Haryana
Launched its first model M-800 on December14,
1983
Maruti Gypsy in 1985
SMC’c share increased from 26% to 40% in 1987
Maruti 1000 launched in 1990
Liberalization of Indian economy in 1991
Maruti Zen launched in 1993
Delicencing of passenger car industry in 1993
Maruti 800
Paved way for global players like….
Maruti esteem launched in 1994, production reached
one million cars
Difference of opinion between GOI and SMC
regarding appointment of MD in 1997
Production reached 2 million cars in 1997
Maruti baleno and wagonR launched in 1999
Alto Lx and Alto Vx1 launched in 2000, production
reached 3million
Suzuki takes over control in Maruti Udyog by hiking
its stake in the company from 50% to 54.2%, Maruti
Udyog becomes the subsidiary of Suzuki in 2002
Alto declared Best selling car in India in 2004
Unveils Versa Variant At Rs 3.27 Lakh in same year
Launched “2599’, &“Teacher plus” schemes to
increase sales of M-800
Threat from new players: High
Major players are presents
Few more are expected to enter
Market strength of consumers: Increasing
Increase awareness among consumers
Increased competition has limited the pricing
power of manufacturers
Threats from substitutes: low to
mediumThreat from mini cars
Market strength of suppliers: Low
Large no. of automotive
components suppliers
COMPETITIVE FORCES IN INDIAN PASSENGER CAR MARKET
STRENTHSContemporary
technologyJapanese Management
practices After sale services
DistributionDiversification & R&D
WEAKNESSStill depends upon
SUZUKI COPORATION
10% components are manufactured outside
IndiaStill considered as poor
man’s brandUnaccustomed to
international standards or keen competition.
SWOT Analysis of Maruti Udyog
• STRENGTHS• Largest manufacturing
capacity• Distribution network• Expertise in Small cars
• OPPURTUNITIES• Untapped rural
market• Young bikers
• Growth in economy
• WEAKNEESES• Brand positioning• Dependent upon
Imported diesel engine
• THREATS• New entrants• New emission
norms
SO StrategyTo capture untapped rural and yongistan
market
ST StrategyTo launch a
car like CERVO
TOWS MATRIX
Cost leadership
Differentiation
Cost Focus
Focus Differentiation
Lower cost Differentiation
Broad target
Narrow target
GENERIC COMPETITIVE STRATEGIES
TURN AROUND STRATEGIES In wake of diminishing profits and market share Maruti
initiated strategic responses with India’s liberalization process:
This can be observed from mission statement of Maruti1984: “Fuel efficient vehicle with latest technology”1997: “Creating customer delight and shareholders wealth”
Cost leadership
Cost focus
TO
STARS
Swift
DOGSM-800
BCG Matrix with respect to Maruti models
Q1:What was the rationale for MUL to adopt promotions like “2599”, “Teacher plus”, and “Do se char” offers? Do you think MUL’s sales promotion campaign was effective?
Rationale: Because of focus strategy Maruti want to convert two wheelers owners to four wheeler owners
Want to penetrate at the bottom of the pyramid
Campaign effectiveness: Not effective M-800 was mini segment and people getting Alto compact segment car by just paying little extra M-800 on the declining stage of product life cycle Unattractiveness among people due to old design where as Alto was present with contemporary design
60,629 Units
108 % During 2004-05
1,26,223 units
Sales of Alto
85,000 Units(2003-04)
60,000 Units(Apr2004-Sep2005)
Sales of M-800
Q2:Discuss the implications of MUL’s premium compact car ‘swift’ priced at Rs. 3,87,000 for its competitors. Also, given that its compact car, wagon R, is available in the same price range, discuss the steps MUL must take to prevent the cannibalization of its sales.A: Swift was launched with price competitive strategy Direct competition with Hyundai Getz (Rs. 4,50,000) As both brands are known for their value price offering Swift definitely has an edge over its direct competitor Getz due to: - Brand image & strong service centre
Steps to prevent cannibalization: Focus on advertising based on benefits to differentiate themselves in the market. Swift was a hatchback model so MUL should position swift as an next value product in between compact and mid size car
Q3: MUL prides itself in providing the lowest priced car(M-800) to its customer, Tata motors intends to launch the Rs. 1,00,000 car by 2008. What, in, your opinion, would be the implementation of this launch for MUL?
A: Implications for MUL: It will cannibalize the sales of M-800 If the car has contemporary design and Euro
4 norms it will the only car available in mini car segment as Maruti has euro 3 norms
With this Tata will penetrate towards the lower segment of value pyramid which is providing maximum market share to Maruti
Steps to counter Nano effect:New contemporary design should be
launchedReduce the engine capacity to make it price
effective and milegeable
Q4: Refering to the availability of pre-owned cars, an industry analyst said, “If the customer get a santro or wagon R for the prices of an 800, why would he prefer the small car?” In light of this statement, how can MUL differentiate its promotional campaigns between its new and pre-owned/used car market?A: Maruti should launch advertising campaign to arouse feeling in you or reminding your dreams of a new car
It should give a customized car
Should introduce peace of mind concept in advertisement campaign
o It may use promotional campaign to reduce perceived risk in the mind of customer regarding pre-owned cars
o promotional campaign which enlighten warranty given in pre-owned cars
KIZASHI
THANK YOU…. Any Suggestions?