MARKETING MANAGEMENT-IIFORE SCHOOL OF MANAGEMENT

FORE SCHOOL OF MANAGEMENT

OPERATIONS MANAGEMENT IIProject ReportON

MARUTI SUZUKI

Submitted to:

Proff. Kaushal GoelProfessorFore School of Management

Qutub Institutional Area, New Delhi

Submitted by:

Group 4

Abhishek Goel(231009)Aditya Nagpal(231013)Anant Aggarwal(231023)Anupreet Kaur(231030)Deepankar Anand(231049)Gursimran Singh(231060)FMG23-A

Date: 23th March 2015

ACKNOWLEDGEMENT

First and foremost, we offer our sincere gratitude to Prof. Kaushal Goel for giving us this opportunity to work on this project under his guidance. We are humbled by his constant support and encouragement which helped us in the realization of this project.We are humbly grateful to Fore School of Management for providing a conductive environment for working on this project. We thank Dr. Jitendra K. Das for providing us an opportunity to be a part of this institute.Our acknowledgement would be incomplete if we do not honour and salute our family members, who have always been the source of constant love, affection and support.

Abhishek GoelAditya NagpalAnant AggarwalAnupreet KaurDeepankar AnandGursimran Singh

CONTENTSLIST OF FIGURESiEXECUTIVE SUMMARYiiMISSION1INDUSTRY AND COMPETITIVE ANALYSIS1Passenger Vehicle Industry1Industry performance for last five years (FY 09 to FY 14)3Growth in demand for Passenger Vehicles Urban v/s Rural5Market share of different manufacturers of Passenger cars in India6PERFORMANCE REVIEW6OBJECTIVE:8MARKETING STRATEGY8Positioning Statement:8Overall Marketing Strategy8ACTION PLAN9Product Strategy9Points of Differentiation11Points of Parity11Packaging11Optional Features11Warranty11Product Objectives11Brand Positioning Bulls eye12Distribution Strategy12Pricing Strategy12Promotional Strategy14MONITORING AND CONTINGENCY PLAN15PROFIT AND LOSS STATEMENT17REFERENCES19REFERENCSOPERATIONS MANAGEMENT IIFORE SCHOOL OF MANAGEMENT

LIST OF FIGURES

Figure 1: Porters five forcesFigure 2: Market share of Segments of Automobile industry in IndiaFigure 3: Passenger Vehicles Sales in UnitsFigure 4: Passenger Vehicle Growth RateFigure 5: Division of Sales of Passenger VehiclesFigure 6: Projection of Passenger Vehicle Industry for 5 years (units)Figure 7: Growth in demand for Passenger Vehicles Urban v/s RuralFigure 8: Market Share of leaders in Passenger VehiclesFigure 9: Perceptual Map

EXECUTIVE SUMMARY

This report broadly focuses on the Automobile Industry in India. In this report we have studied and analyzed the Automobile Industry in India on a broad spectrum and tried to find a segment where we can place our product which is a compact SUV from MSIL.On the following pages, you will find Mission Statement: We have studied the mission, vision and values of MSIL. Core competencies of MSIL including strong customer base and brand image, well developed sales and service network and strong knowledge of Indian market have helped them to survive the tough competition from players like Hyundai and Honda post liberalization. The present strategies of MSIL are to make India exclusive car manufacturing base and carry operations from design till production. In the second part we have conducted a PESTLE analysis for the automobile industry in India. Recent initiatives of making India a manufacturing hub with special emphasis on the automobile industry by reducing excise duty and allowing 100 percent FDI. Easy finance schemes and tax deductions in R&D (Economic), increase in number of middle class segment and opting for comfortable options (Social), word class technology by global leaders (Technological), provisions relating to safety and emissions (Political) and growing concerns of communities and government towards environment (Environmental) are the various factors that have affected the automobile industry in India at large. Using porters five forces analysis we have identified high risk of competitive rivalry and high bargaining power and low threats of new entrants, substitute products and bargaining power of suppliers. In the third part we have defined the automobile industry we want to compete in. The last 5 year sale in passenger vehicles segment (which is 14 percent of total automobile industry) gives us a CAGR of 5.11%. Due to decrease in excise duty, reduction in fuel price and new Economic reforms we estimate growth of 10% in passenger vehicles in the coming years. Report published by KPMG shows a major growth in demand for passenger vehicle from rural segment, breakup of which is presented in detail in the report. The market share in passenger cars of MSIL, Hyundai, M&M, Tata Motors and Honda, according to a report published in statista.com is 42.08%, 15.18%, 9.15%, 5.59% and 5.36% respectively. Further we have analyzed the marketing strategy of the competitors in our product segment. In SWOT analysis we have derived the opportunities and threats from the PESTLE analysis and industry review. PESTLE points towards a very high opportunity for the automobiles sector, especially the established ones, due to the projection of India becoming 4th largest automobile market and sales of 6 million expected in 2020. At the same time there is an ample opportunity lying in the development of more fuel efficient and alternate fuel source technology. But there is also a threat from foreign giants which are showing increasing sales figures in recent years. FDI of 100 percent is a major threat to MSIL. We have also studied and presented in details the internal strengths and weaknesses of MSIL. In fourth Part we have reviewed the performance of MSIL. It is the only company to cross 10 million saes mark since its inception and has been ranked no. 1 for 15th consecutive years in customer satisfaction. The product strategy of Maruti is to focus on catering the needs of people from lower and middle income groups by creating products that are unique and valued and it is attaining advantage either through differentiation via new features, improved performance, after sales service or through cost leadership at two state of the art manufacturing facilities in India (Gurgaon and Manesar). It has the largest distribution & Service network. In the fifth part we have segmented the population on the basis of demographic, psychographic and behavioural aspect and targeted young male professional, having a nuclear family. The positioning statement we used for our product is To all the young men, adventure is back! Presenting the new cross, a compact SUV for all your family needs. Well position our compact SUV towards fuel efficiency and best in vehicle styling (exterior) in the perceptual map. In sixth part of the report we have defined our objective which is to obtain a market share of 10% by selling 60000 units in the first year estimating per unit profit percent of 20. Seventh part of this report presents the positioning of our product XA Alpha as the ultra modern, fuel efficient compact SUV for the new age modern family, friendly to pocket and easy on maintenance. We have defined the marketing strategy in detail in the report. Chapter 8 defined our Action plan we will be adopting to get an advantage over the prevailing players in the market. Here we have defined our product, pricing, distribution, promotional and sales force strategies. We will be launching our compact SUV in three variants. Detailed points of differentiation and parity, packaging and warranty structure are discussed further in the report. As a distribution strategy we will be utilizing the already established network of Maruti. For pricing we will be adopting market penetration pricing strategy to fulfil the objective of maximum market share. The promotion for the product is divided into 4 phases. 9th part of the report presents the Monitoring and Contingency plans. Different tools are identified for the launch of our product. Using Marutis extranet-based information network and balanced scorecard concept, we will measure and track the performance of the dealers. Trainings, GPS enabled trucks, exclusive team for handling sales of SUV, group leader assigned to the group will help in the tracking and monitoring of the sales. Section 10 gives us the profit and loss account for our product. Expecting sales of 60000 units in the ratio of 8:9:3 for the LDi, VDi and ZDi models we will be able to generate a net profit of 77.2 lacs in the first year. Profit in the first year expected due to low cost of production due to existing setup of MSIL and only cost involved in R&D, engineering costs, developing prototypes testing, and making modifications in the existing plant.

(ii)

MISSIONMission StatementTo create exceptional automotive value for our customers by harmoniously blending safety, quality and efficiency. With our diverse team, we will provide responsible stewardship to our community and environment while achieving stability and security now and for future generations. VisionThe leader in the Indian Automobile industry, Creating customer delight and shareholders wealth; A pride of India.Values Customer obsession Fast, Flexible and first mover. Innovation and creativity. Networking and Partnership. Openness and Learning.Maruti belongs to an automobile industry which has tough competitions from other players after liberalization when companies like Hyundai, Honda, Skoda and Toyota started selling in India. The core competencies of Maruti include strong customer base and brand image, well developed sales and service network, very strong knowledge of Indian market. The current strategies of MSIL includes develop capabilities and internal resources to finance its expansion and growth, To make India an exclusive car manufacturing base to leverage frugal engineering, to establish R&D facility in India to produce cars in India, starting from design till production. Marutis leadership in market is due to its cost advantage which is the least among all other players in the market. The willingness to pay is also high because customers can easily pay required cost because they are getting what they are expecting with low cost.INDUSTRY AND COMPETITIVE ANALYSISPassenger Vehicle IndustryThe automobile industry is one of Indias most vibrant and growing industries. This industry accounts for 22 per cent of the country's manufacturing gross domestic product (GDP). The auto sector is one of the biggest job creators, both directly and indirectly. It is estimated that every job created in an auto company leads to three to five indirect ancillary jobs. The automobile Sector is divided into four parts a)Passenger Vehicle; b)Commercial Vehicle; c) Two Wheeler and d)Three Wheeler.Domestic Market share of each segment in Indian Automobile Industry in percentage is:

Figure 2: Market share of Segments of Automobile industry in IndiaData from industry body Society of Indian Automobile Manufacturers (SIAM) showed that 137,873 passenger cars were sold in July 2014 compared to 131,257 units during the corresponding month of 2013. Among the auto makers, Maruti Suzuki, Hyundai Motor India and Honda Cars India emerged the top three gainers with sales growth of 15.45 per cent, 12 per cent and 11 per cent, respectively.The Passenger Vehicle Industry is further divide into three Categories. Passenger Cars Utility Vehicles Vans

Major players in Indian Passenger Vehicle Industry are:Maruti Suzuki India Ltd (MSIL)Maruti Suzuki India Ltd (MSIL), commonly referred to as Maruti and formerly known as MarutiUdyog Ltd, is an automobile manufacturer in India. The company is engaged in the business of manufacture, purchase and sale of motor vehicles, automobile components and spare parts (automobiles). Leader in car market Market share of 39.12 per cent in overall passenger vehicle market Production of 1.5 million cars every year Net sales rose 21.3 per cent to Rs 426, 125 million in (US$ 6.83 billion) FY13 Net profit up by 40.6 per cent to Rs 23,921 million (US$ 383.48 million) in FY13.Hyundai Motor India Ltd (HMIL)Hyundai Motor India Ltd (HMIL) is a wholly owned subsidiary of Hyundai Motor Company (HMC). It is the largest passenger car exporter and the second largest car manufacturer in India. It currently markets 10 car models across segments (the classification is done on the basis of the length of the automobiles) in the A2 segment it has the Eon, Santro, i10, Grand, Xcent and the i20; in the A3 segment the Verna; in the A4 segment the Elantra; in the A5 segment Sonata; and in the SUV segment the Santa Fe.Tata Motors LimitedEstablished in 1945, Tata Motors Limited is India's largest automobile company with over 60,000 employees. The company is the leader in commercial vehicles in each segment, and among the top in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. Honda Cars India Ltd., (HCIL)Honda Cars India Ltd., (HCIL) Is A Leading Manufacturer Of Premium Cars In India. The Company Was established In 1995 With A Commitment To Provide Hondas Latest Passenger Car Models And Technologies, To The Indian Customers. The Company Is A Subsidiary Of Honda Motor Co. Ltd., Japan.Industry performance for last five years (FY 09 to FY 14)Domestic Passenger Vehicle Sales Trend

Figure 3: Passenger Vehicles Sales in Units (Source: SIAM)

Passenger Vehicle Growth

Figure 4: Passenger Vehicle Growth Rate (Source: IBEF; SIAM)Division of sales of Passenger Vehicles

Figure 5: Division of Sales of Passenger Vehicles (Source: SIAM)Sales Volume of Compact SUV in IndiaCompact SUV/ Sales Volume20132014

UnitsUnits

Renault Duster5557146786

Ford EcoSport*Launched in June 201356336

Mahindra Scorpio5311858049

Nissan Terrano1253319757

Source: AutoSport.com, Renault Monthly Sales report, Ford Monthly Sales Report, ET

Projection of Growth in Car Sales for Five YearIn July 2014 passenger vehicle Industry grew by 2.46% (Source IBEF) and its been increasing since then at rate of 3-5%. Due to decrease in excise duty, reduction in fuel price and new Economic reforms under P.M NarendraModi, its been estimated that passenger vehicle industry will grow by 10%.According to result sales analysis by ford, Renault and Mahindra UV segment will grow by 15%.CAGR for Passenger Vehicles: 10%.CAGR for Utility Vehicles : 15%

Figure 6: Projection of Passenger Vehicle Industry for 5 years (units)Growth in demand for Passenger Vehicles Urban v/s Rural

Figure 7: Growth in demand for Passenger Vehicles Urban v/s RuralSource: KPMG;TATA motors; Emkay Research; NCAER

The automobile industry has yet to fully tap into demand from rural areas. Previously, consumers from these areas would need to go to automobile dealerships in towns and cities for their vehicle purchases. However, in recent years, market players have made overtures to rural consumers. We can see a gradual increase in sales in Rural Areas. There is need for sufficient presence in rural segments with cars/UVs which meet the specific needs (e.g., low cost UVs) of the agrarian, self-employed customer base.Market share of different manufacturers of Passenger cars in IndiaThe below statistics shows the market share of different manufacturers of passenger cars in India in Financial year 2014.

Figure 8: Market Share of leaders in Passenger VehiclesSource: http://www.statista.com/statistics/316850/indian-passenger-car-market-share/PERFORMANCE REVIEWMaruti Suzuki India Limited is Indias leading Passenger car manufacturer and market leader both in terms of vehicles sold and revenue earned.The company has variety of brands in its basket to cater to demand of various customers i.e ranging from the peoples car Maruti 800 to the stylish hatch-back Swift, recently launched Ciaz sedan and luxury sports utility vehicle (SUV) Grand Vitara. The company has received various accolades due to its continuous innovations and technological up gradations. The company today is very conscious about safeguarding the environment from vehicle pollution which resulted in launching of its advanced K-Series engines. Despite of stiff competition, Maruti Suzuki India Limited is presently considered as the leading automobile manufacturer due to its significant Economic, Environmental & Social performances. Maruti is the only company to cross 10million sales mark since its inception. Maruti Suzuki has been ranked No1 by JD Power Asia Pacific 2014 in customer satisfaction and for the 15th consecutive year.Product Mix The product strategy of Maruti is that its focus is on catering the needs of people from lower and middle income groups. Company creates products that are unique and valued and it is attaining advantage either through differentiation via new features, improved performance, after sales service or through cost leadership. Maruti Suzuki has divided its products into various categories as belowHatchbacksAlto 800, Alto K10, WagonR, Swift, Ritz, Celerio,Stingray

SedansDzire, Ciaz

VansEEco, Omni

SUVs/MUVsErtiga, Gypsy, Grand Vitara

The cars can also be divided on type of fuel used. Some cars are available in both diesel and petrol option. Few cars come with CNG fitting too like Alto K10. Pricing Strategy Marutis pricing strategies are such that every consumer can own a car or upgrade to another one of his or her choice. Consumers using two wheeler can upgrade to four wheelers and already four wheeler owners to upgrade to a better car offered by the company. It follows a price-point-strategy wherein they have products available in almost all possible price points. Alto-800 is the lowest price model of this company. Grand Vitara is the highest price model of the company.Place Maruti Suzuki has two state of the art manufacturing facilities in India (Gurgaon and Manesar). This is the advantage that Maruti enjoys over its competitors since its present in the country for the longest time period. It has the largest distribution & Service network comprising of 933 dealerships across 666 towns and cities of India. It has more than 3000 service stations in 1454 towns and cities throughout India. It has 30 Express Service Stations on 30 National Highways across 1,436 cities in India. Promotion Strategy Maruti has for most of its years of operation targeted Indian middle class families as their main consumers. The company tries to create an emotional connect with its customers through its advertising campaigns like Count on Us or Lets go home in a Maruti Suzuki. Maruti Suzuki has also partnered with certain TV shows like Indias Got talent and also provides sponsorship to various big events to make its presence felt. The company also emphasizes on road safety. Company has also partnered with banks , insurance companies to provide its customer hassle free environment in purchasing of the car. The company also has a brand loyalty programme Auto Card to retain customers and and to increase brand loyalty by giving attractive exchange discounts, complentary gift vouchers. The company has taken help of all the promotional tools like radio, television, road shows, print media, workshops and seminars to promote their cars.OBJECTIVE:To obtain a market share of 10% by selling 60000 units in the first year.The estimated profit per unit would be approximately 20% of the Cost of car, which is to be launched in three variants Ldi for Rs. 7.5 lacs, Vdi for Rs. 8.5 lacs and Zdi for Rs. 9.5 lacs.MARKETING STRATEGYPositioning Statement:We are positioning the XA Aplha as the ultra modern, fuel efficient compact SUV for the new age modern family. It is friendly for the pocket and easy on maintenance.Overall Marketing StrategyMaruti will use the established Brand in the minds of the consumer and portray the new Compact SUV with basic features of Comfort and Sporty look associating the same as High on Safety, Performance and a New Age Family car. The new launch shall compete on differentiation on the grounds of- Fuel Efficiency Best Service Network Computerized Fuel Management System to optimize fuel consumption

Maruti as a brand is one that has long enjoyed unmatched market domination in India for decades as one whose quality service, genuine spares and a customer friendly dealership is available across the every nook and corner of urban India, characteristics which its competitors in the segment cannot establish in the foreseeable future. To best take advantage of the same, the target customer is a young male professional, having a nuclear family. He aspires to own a vehicle that is technology-feature rich, premium, sporty and modern. The vehicle has been designed to differentiate him from others in his social circle, who own cars and at the same time support their daily personal and professional needs. This makes the possession of a compact SUV by an age old trusted and well penetrated brand a tempting choice for the consumer who wishes and is able to pay more than a sedan/hatchback for an all weather and road car while increasing their societal prestige.The vehicle is suited for urban lifestyle enabling one to discover new places. Thus it is targeted mainly for the tier 1 and tier 2 cities.The promotional activity for the new launch would comprise of advertisements in TV and print media, events and experiences through activities such as ride and drive events and celebrity endorsements. Maruti has a strong dealer network. Thus we would make use of the already established vast dealer and service network for the new launch.Sales ObjectivesThe target is to gain 8-10% of market share in the first year by selling 60000 units. We will opt for aggressive marketing strategies in order to achieve a sales target of 1,00,000 lac units in a time span of 1.5 yrs. The expected sales for the upcoming years are mentioned below :- First year 60,000 units Second year 75,000 units Third year 93,750 unitsACTION PLANProduct StrategyWe have developed marketing plan for the launch of a Compact SUV (Sub urban vehicle) under the brand of Maruti-Suzuki, by the name of XA Alpha.Specifications of XA Alpha for LDI (Basic) Model Engine: 1.3 litre multijet Deisel Engine Fuel Type: Deisel Maximum Speed: 180 kmph Gear Box : 6 Speed manual Transmission Maximum Power: 105 bhp Other: 64-bit Computerized Fuel Management System

Features of XA Alpha for LDI (Basic) Model (14)

Air Conditioner with Front and Rear A/C Vents Power Steering Engine Start/Stop Button Foldable Rear Seat Bench Folding Navigation System Adjustable Seats Integrated 2DIN Sony Touch Screen Audio System with Bluetooth Connectivity Automatic Climate Control Air Quality Control Multi-function Steering Wheel LED day Light ABS system Air bags in FrontThe XA Alpha will be launched with 3 variants.LDI : Will be the basic model of XA AlphaVDI : It will have all the features of basic model plus the additional feature will be two modes of driving i.e Economy and Sports mode. ZDI : It will have all the features of VDI model plus additional features will be Cruise Control, Automatic Transmission, 4 Air bags, Alloy Wheels, Active Parking Assist and panoramic sunroof.

Points of Differentiation Vast Service Network of Maruti-Suzuki giving XA Alpha a low maintenance cost and assured high Reliability from Maruti. Highly Fuel efficient giving mileage of 19/22 kmpl in city/highway. Computerized Fuel Management System to optimize fuel consumption based on drivers Driving pattern.Points of Parity A 5-seater comfortable passenger car giving a feeling of luxury and high on performance. It has great styling and gives a sporty look. Easy to Drive.PackagingXA Alpha will be launched in 7 Color: Obsidian Black Palladium Silver Polar White Imperial Blue Electric Red Sparkling Bronze Mineral Gray

Optional Features Can add Spoiler to the car costing an additional Rs. 10,000\- Stickers and custom paint job as per the Customer requirement at the time of placing order by paying additional Rs.25,000\- WarrantyEvery Maruti Suzuki car comes with a statement of support to promote customer confidence: our warranty. The support it provides is in the form of replacement parts or repairs done for qualified failures associated with manufacturing defects in material and/or workmanship.Our primary warranty, as of now, is for a period of 36 months or 50,000 kms (whichever comes first) from the date the first owner takes delivery.Forever Yours is the extended warranty program. The standard warranty can be extended by one or two years for a nominal amount, at any time before the warranty period ends or before 40,000 kms.Product ObjectivesWe want to provide our customers, a car with sporty looks & comfortable driving experience combined with an unbelievable mileage. We will promote the following characteristics of our car by communicating these features1-Mileage2-Sporty looks 3-Features 4-Space

Brand Positioning Bulls eye

Distribution StrategyDistribution strategy of a firm is a plan created by the management of a manufacturing business that specifies how the firm wishes to transfer its products to intermediaries, retailers and end consumers. Maruti has a strong dealer network. In fact it was one of the very first companies in the country to understand the importance of after sales service in high involvement products like cars. It has the largest distribution & Service network comprising of dealer sales network of 1204 in 874 cities and service network of 3013 in 1436 cities. It has 30 Express Service Stations on 30 National Highways across 1,314 cities in India. Most of the service stations are managed on franchise basis where Maruti trains the local staff. To increase their reach to rural India, where setting up a complete dealership was very difficult, they opened extension counters which are operated by some dealer in the city thereby ensuring increased customer touch points without risking the viability of the dealers. Thus we would make use of the already established vast dealer and service network for the new launch.Pricing StrategyThere are various factors to determine a priceof a car, such as market condition, cost incurred to build a car, profit by company, dealer margins.Objective: To get maximum market share in the long term in their respective segment. MUL follows a market-penetration pricing strategy to fulfill its objective.Elasticity: Demand curve for cars is highly elastic since price in an important attribute and plays a major role in consumer decision making for cars and there is also a significant competition for cars in this segment.Particulars for LDi ModelCost per Unit (Rs.)

Cost of manufacturing a car4,50,000

Excise Duty-12%54,000

Warehousing2,000

Selling,Transportation & Freight Insurance15,000

Admin Expenses & Operating Costs30,000

Promotion20,000

Distributor Margin 60,000

Total Cost6,31,000

Profit Margin by Company1,20,000

Ex-Showroom Price7,51,000

Registration Charges(8.75%)65,712.5

MCD registration and Road tax(4.5%)36,856.25

Insurance24,000

On Road Price to customer8,78,570

*Note: Registration charges and Road Tax are applicable in DelhiThe company offered a different model at a price difference of around 100,000 and the prices below are Ex-showroom prices. Ford EcosportRenault DusterMaruti XA Alpha

Base model Rs. 7,80,000Rs. 8,99,000Rs. 7,51,000

Middle ModelRs. 8,90,000Rs. 10,73,000Rs. 8,51,000

Top ModelRs. 9,89,000Rs. 11,63,630Rs. 9,51,000

For the base model(LDI),the company keeps a profit of 8% i.e. Rs.60000 for the dealer and the profit increases nominally as per the variant.For the VDI,which achieves the highest sales, the profit kept for dealers is of 10% and in case of the top end model(ZDI) is it restricted to 11%.As far as the payment terms are concerned, the company doesnt have any credit terms with the dealers, the cars are delivered only after receiving the complete payment from them. The company also has incentives (1.5% discount) for dealers who cross a sale target of 100 units per month.The Car has been strategically priced among its competitors. MUL has an excellent brand image in compact car segment build over last three decades. This adds to consumer perceived value. The price of the car is also at par with the benefits it provides to the customers which is in accordance to MULs brand image. The price of the product is subject to fluctuation in price of raw materials and foreign exchange rates. Company has to charge for covering these risks. Promotional StrategyPHASE 1:XA Alpha will be launched in Auto Expo 2016. This is the first time, the car would appear for press and public. Full page front advertisements would start appearing in major national newspapers like HT, TOI, Navbharat Times, Economic Times, Punjab Kesri , Tribune and local dailies too from December 2015 on weekends, not revealing the car name, but just indicating that a compact SUV from Maruti Suzuki is going to be launched in the upcoming Auto-Expo 2016.The advertisements would focus on exciting the customer about coming to the Auto-Expo and taking the first look of the new SUV. The tag line which would appear in the newspapers for December would be:Come and experience the next generation of compact SUVs by Maruti Suzuki this Auto-Expo season. The car showcase would be done by celebrity Akshay Kumar, since his public image relates to the personality of the car we are launching, Stylish, modern and for the Indian family.PHASE 2:After being launched in the Auto-Expo, the car would be available through various events for experiencing, covering mainly the major malls in our target cities, and also would be available at all the showrooms across the country for a test drive experience. The weekend (full page front/back ads) newspaper coverage would continue to attract the interest of the customers.There would also be TV advertisements running along with these campaigns in which Akshay Kumar would be seen endorsing XA Alpha. The post launch tag line for XA Alpha plus would be: DONT DREAM, DRIVE ITBE AN ALPHAPHASE 2 ADDED ATTRACTION: After 2 weeks of these campaigns running, there would be a special weekend newspaper promotion activity in which a real car key would be given attached/sticked with newspaper front add and customers can bring that car key for test drive and win gift hampers from Maruti Suzuki.

PHASE 3: After 1-2 month of the launch, an event called RIDE AND DRIVE would be organized in major cities/metro cities in which car rallies would be organized and people who already have the car, booked the car would be invited. Also various people like prominent bloggers for auto industry ,media, journalists would be invited.PHASE 4: Maruti Suzuki plans to present one XA Alpha to the man of the series in T20 World Cup.APPROXIMATE BUDGET FOR THE ABOVE MENTIONED PROMOTIONAL ACTIVITIES:MODEAPPROXIMATE BUDGET(Cr.)%REMARK

AUTO EXPO.45.375AUTO-EXPO can provide a great platform for capturing the target audience plus a great media coverage.

CELEBRITY ENDORSEMENT1512.5Brand personification/Public attraction.

NEWSPAPER ADSAND PROMOTION 4537.5Mass awareness. All major national and local dailies to be covered, primarily on weekends.

TV ADS ANDPROMOTION4033.33All major channels like news, sports, family and entertainment.

RIDE AND DRIVEEVENT108.33Generating and maintaining customer interest.

T20 WORLD CUPJune July 20169.557.95Creating more Brand/Product value and popularity.

Total120100

Source: All estimates have been quoted by taking prices from various websites from the internet.MONITORING AND CONTINGENCY PLANA well planned and managed launch plan is critical to a new products success in the market place and achieving product goals. From the customers view point , the launch of a new product or service must appear smooth and its value proposition compellingSupport Tools for effective launch Sales force ,tools and training Distribution and logistics CRM Tools Product Management Tools and KPILaunch Monitoring and Adjustments Performance dashboards Operation monitoring Product Performance Tracking

The sales network of Maruti is linked with the secured extranet-based information network. The dealers are asked to maintain the showroom as per the norms and specification provided by Maruti. By the help of balanced scorecard concept, MUL measures the performance of the dealership in areas like services, sales, spares and accessories, management system and financial management. The dealers who perform well are rewarded by the company at the end of each financial year thereby enhancing the performance of the dealers.

The company exclusively arranges training for all the staffs (technical, non-technical) to keep them well-run. The companys trucks carrying the vehicles are all equipped with GPS so that the dealers can track their dispatch from the factory to the showrooms.

Since all the cars are sold under one roof, the only way to boost the sales of the SUV is by assigning exclusive manpower to the new product with complete accountability for sales of the car. There would be an exclusive team handling the sales of the car and would trained appropriately about the SUV.

Apart from showroom sales there are other channel of sales that need to be looked and monitored. These could be retail finance sales, institutional sales and sales through direct marketing activities. There would be a separate team handling each kind of sales. For ease of monitoring and controlling one person from each of the specified sales team would be designated as group leader, who would be accountable for teams performance.Once the showroom as well as field teams are in place, there would be a marketing manager to coordinate the activities of these various teams and be responsible for strategy formulation, target setting, monitoring and evaluation of performance of each team, in line with overall objectives of the company.Sales planning involve two concepts Target setting: Target for each month to be defined and communicated to the team. This will give each member a goal to strive for and help in quantifying his/her performance. Enquiry Targets: For achieving the desired sales volume, it is important that adequate number of sales enquiries are generated .Depending upon enquiry to conversion (sales) ratio, target for the number of enquiries per month should be defined. Enquiry generation would of course depend upon the publicity level. Therefore a well planned target setting and monitoring system for enquiries will make the task of achieving sales target easier.Monitoring achievements against targets at regular intervals is of immense importance. It allows us to take stock of the situation every ten days and help in initiating corrective actions well before the month end.In the worst case scenario if this plan fails, exiting from the segment is not an option. Marutis vision is to be a leader in the automobile industry and to be a major player in the industry its crucial to enter the compact SUV segment. This is a segment where the size of the target customers are growing at a fast rate and at the same time the number of players catering to the needs of these consumers are relatively low. Hence if the present plan fails, Maruti should reposition and try and break into the segment again. It can reduce the price since the margin is good enough else it can also do facelift like change some styling like introduce new headlamps, exterior grill or some changes in the interior.PROFIT AND LOSS STATEMENTLDI ModelVDI ModelZDI Model

Units Produced 28,80032,40010,800

Units Sold 24000270009000

ItemsPer Unit Price (Rs.)Total Cost (Rs.)Per Unit Price (Rs.)Total Cost (Rs.)Per Unit Price (Rs.)Total Cost (Rs.)

*10000*10000*10000

Fixed cost For R&D, Assembly Line for New Car 14000157505250

Cost of manufacturing a car45000012960004900001587600535000577800

Excise Duty-12%54,000155520588001905126420069336

Warehousing2,00057602000648020002160

Selling,Transportation & Freight Insurance15,0004320015000486001500016200

Admin Exps & Operating Costs30,0008640030000972003000032400

Promotion20,0005760020000648002000021600

Distributor Margin 60,00017280085000275400104500112860

Total Cost18024002297700855900

Ex-Showroom Price751000851000951000

Total Sales ( Units Sold X Ex-Showroom Price)18024002297700855900

Profit /Loss(Total Sales - Total Cost)-10027.78-288803505.561135816938.8918294

Net Profit77,20,000

The Net Profit made on all the models combined is Rs. 77.2 lacs and closing Inventory of 12,000 units.Since Maruti has an existing set-up for production of cars and had reached the breakeven point in 1970s, the costs of developing a new car involves R&D, engineering costs, developing prototypes testing, and making modifications in the existing plant, the expected costs sums up to Rs.35cr.These figures have been estimated on the assumption* that 40% of sales are of the base variant(LDi), 45% of the cars sold are of the intermediate variant (VDi) and nearly 15% of the sales are of the top model(ZDi).*This assumption has been taken on the data provided by an authorized Maruti dealer loacated in Lajpat Nagar.As per the usual demand of customers, the production of each variant will also be in the ratio of 8:9:3. We have estimated that the annual production is of 72000 units, however we were successful in selling 60000 units. The respective costs and profits per variant are given below.

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