Project Report on Marketing Plan of Grand Vitara

Project Report on March 29 Marketing Plan of Grand 2010 Vitara

Submitted by:- Module Leader: Dr. Rohit Singh Samrat Basu

of 26 INDEX

1) Executive Summary Page 3

2) Introduction to SUV Page 3-5

3) Brief Overview of Grand Vitara Page 5

4) Comparative study of SUV Page 6-9

5) Supply & Logistics Page 10

6) SWOT Analysis Page 11- 13

7) Attractiveness of the Segment Page 14

8) Customer Judgement Process Page 14- 15

9) Positioning Strategy (4 P’s) Page 15- 20

10) Feasibility Study Page 20- 21

11) Specific Action Plan Page 21- 22

12) Implementation Page 22- 23

2 | P a g e 13) Reference Page 24- 25

EXECUTIVE SUMMARY:-

The report basically focuses on the SUV market in India and different factors which could help Maruti Grand Vitara to gain some share in the market. It also shows a comparative study of the different SUVs and the features and benefits of Vitara over the other. A SWOT and a 4P study has been given to justify the findings with suggestions to promote Vitara which would help in maintaining the brand name of Maruti but at the same time to keeping in mind the safety and comfort features. Finally the budgeting and the promotion of the Vitara have been highlighted along with the implementation and a contingency plan.

Introduction: SUV

The World War II saw an extensive use of several kinds of vehicles for military purposes as well as for the use of transporters across the cities. This wide spread usage of different cars lead to the origin of SUVs which is now a days a popular segment in the globally emerging automotive sector. The SUVs have been popularised and the manufacturers had sensed a thriving business opportunity in this division.

It all started with Toyota Land Cruiser, Land Rover, Jeep Wagoneer, Chevrolet Blazer, and the International Harvester, which were the first SUVs in the global market. These days SUVs have become a major driving force behind the growing revenues of the automobile industry.

The current SUVs have undergone a total makeover from their previous versions and are now much more compact with sophisticated designs are light-weight and much more fuel efficient.

(http://www.automobileindia.com/cars/sports-utility-vehicles/)

SUV market in India

The Indian car market has witnessed an immense potential in the past few years. From what used to be a market of some limited passenger cars and a few truck

3 | P a g e models, the market has immensely grown and is currently the 9th largest car market in the world. The economic boom in India has resulted in greater disposable income in the hands of the people who can now spend a few lacs more in acquiring a SUV than a small car. The SUVs with their “spacious interiors and rugged exteriors” have become a perfect choice for family outings and travel. Though at present the SUVs constitute only about 2% of the total Indian car market, this segment has displayed an immense growth potential among both the youth and the aged.

Tata Motors with their Safari Dicor and Mahindra& Mahindra with the Scorpio are the leading cars in the Indian sector. However Chevrolet Captiva, Hyundai Tucson, Ford Endeavour, Honda CRV, Mitsubishi Pajero ,Toyota Fortuner and Maruti Suzuki Grand Vitara, Mitsubishi Outlander are also some other promising SUVs in the Indian market.

Source:-www.images.google.com

4 | P a g e Maruti Suzuki India Ltd: -

Maruti Suzuki is one of the foremost automobile manufacturers in India and undoubtedly it is the market leader both in terms of revenue and the number of vehicles sold. Starting as Maruti Udyog Ltd. (MUL) in 1981, the first production of Maruti with its car the Maruti 800 began in 1983. Initially the government of India held about 18% stake in the company and the majority of about 55% was with Suzuki Corporation of Japan. However, by 2007, government raised IPO and sold off its share to other financial institutions. “ Right from inception, Maruti brought to India, a very simple yet powerful Japanese philosophy 'smaller, fewer, lighter, shorter and neater'”. (http://www.marutisuzuki.com) Down the ages Maruti has been a hot-favourite among the majority of the masses. The sales volume and even the exports of the cars have increased steadily. Even though the recession in recent times saw the automotive market in a crash with biggies like GM going bankrupt, Maruti Suzuki could still maintain its sales

5 | P a g e reputation. This is a clear indication of the trust that the brand name has created in the minds of the consumers. Maruti Suzuki has a large market share of about 50% of the total car market in India and it has 2 state of the art world class manufacturing facilities at Gurgaon and Manesar. The combined plants of about 1000 acres are the production hub of about 300000 cars annually. Maruti till date has exported about a million units to Europe.

The core value of Maruti can be given as:-  Customer Obsession  Fast, Flexible and First Mover  Innovation and Creativity  Networking and Partnership Openness and Learning ( (www.marutisuzuki.com) Grand Vitara- A Brief Overview: - The car was first introduced in 1988 in Japan with a 3-door part-time four-wheel drive. The basic concept that it followed was the Suzuki perception “Bringing higher performance to the urban cross-country vehicle”. Suzuki’s main aim was to stick to their reputation for excellent 4WD drivability and attain new levels of excellence. In its second launch, the design and engineering was much more modernised and it was better known as the Grand Vitara. The 3rd cohort of Vitara was relaunched with much technologically advanced designing and engineering and won several accolades globally. In India the Grand Vitara was also a success mantra as it was highly applauded by both adventure lovers and luxury seekers. Keeping in mind the tastes, preferences of customers and the growing competition in the SUV segment, the new Grand Vitara with a 2.4 Variable Valve Timing engine is launched in the market to serve the customers. This variant can generate a power of 163.5 BHP and gives power to all the 4 wheels with 4 switching modes to suit the different types of terrain. (www.grandvitaraindia.com)

6 | P a g e

The 1988 Suzuki Vitara the 1998 Suzuki Vitara

The 2009 Suzuki Grand Vitara

The Top SUVs in India- A Comparative Study

Car Engine Power Fuel Other Price(Approx) Top Ground Specification Efficiency Specifications Speed Clearance

Chevrolet 2.0 L Diesel 148 BHP 9/11 5/6 speed Rs. 18.67 186 197 mm Captiva VCDI 1991 cc Kmpl(City/ manual/automat lacs(ex- Km/Hr Highway) ic transmission, showroom climate control, Mumbai) stunning-sporty vehicle with specialized handling characteristics. Ford 2.5 L Turbo 141 BHP 7/10 5 speed manual Rs. 17.04 145 210 mm Endeavour Charged diesel Kmpl(City/ transmission, lacs(ex- Km/Hr VGT Inline-4 Highway) rear-wheel-drive showroom engine 2499 cc (RWD) and all- Mumbai)

7 | P a g e wheel-drive (AWD), dashing and sporty looks, 16" alloy wheels. Honda 2.4 L i-VTEC 161 BHP 8/10 5 speed Rs. 22.77 220 185 mm CRV Inline-4 Petrol Kmpl(City/ automatic/6 lacs(ex- Km/Hr engine 2354 cc Highway) speed manual showroom transmission, Mumbai) AWD drive Maruti 2.0 L VIS Inline-4 119.5 7/9 4 speed Rs. 16.92 160 200 mm Suzuki Petrol engine BHP Kmpl(City/ automatic/5 lacs(ex- Km/Hr Grand 2393 cc Highway) speed manual showroom Vitara transmission, Mumbai) 4WD drive Toyota D-4D 3.0 L 168 BHP 8/11 5 speed manual, Rs. 20 lacs(ex 176 221 mm Fortuner Diesel with Kmpl(City/ 4WD drive, tilt showroom Km/Hr Intercooler Highway) steering column. Mumbai) Turbocharger 2982 cc Mitsubishi 2.4 L MIVEC 146.2 7/10 6 speed Rs. 21.51 190 215 mm Outlander Petrol 2360 cc BHP Kmpl(City/ automatic/manu lacs(ex Km/Hr Highway) al transmission, Mumbai) 16” alloy wheels Source: - www.cardekho.com

Analysis of Grand Vitara with a few competitors

From the above table we would comparatively analyse some parameters which we think play an important role in the mindset of the customers while selecting a car. Engine Specification : - This parameter plays a significant role in the car selection. Mostly the SUVs come with an advanced diesel engine which is much less noisy and the cost of diesel is also cheaper compared to petrol. So generally for a cost effective performance, diesel engines are preferred. The Grand Vitara however has an Inline 4

8 | P a g e petrol engine while its other competitors like Toyota Fortuner, Ford Endeavour are equipped with diesel engines. Fuel Efficiency: - This is one of the most important factors as the Indian customers in the SUV segments are those who have just upgraded or are in the process of upgrading themselves from the so-called small car image and would like to go for the SUV luxury segment cars. The mileage that the hatchbacks offer are much more compared to the SUVs as the total volume of all cylinders at full stroke for the small cars are quite less in comparison to the giant SUVs which draw up more power and thus utilise much more fuel. While the Ford Endeavour and Toyota Fortuner gives an average mileage of around 8 Km/pl in city conditions and about 11- 12 Km/pl on the Highways, Vitara gives an overall average mileage of about 9-11 Km/pl.

Ground Clearance: - Ground clearance is defined as the distance between the road and the lowest parts of the vehicle. Riding a car smoothly in the Indian roads is always a challenge for all. There are speed breakers and other obstacles here and there in the roads. So for the Indian conditions, better the ground clearance, less is the chance of “scrapping the underbelly” of the cars. (http://ndtvauto.carwale.com/Forums/ViewThread-466.html) Grand Vitara has however an approximate ground clearance of 200 mm which is less than that of Fortuner or Endeavour which has about 220 mm ground clearance. But a higher ground clearance increases the centre of gravity of the car which might cause some discomfort when cornering the car.

Price: - The Toyota Fortuner in India is priced at around Rs. 20 lacs (ex-showroom Mumbai), while Grand Vitara and Ford Endeavour is priced at about Rs 16.92 lacs (ex-Mumbai) and Rs 17.5 lacs (ex-Mumbai) respectively. Though the Fortuner is priced highly than the above models, still it has been able to storm the Indian market with its record number of bookings. While in the very first few months it had an order for about 5000 units. Even the company officials did not expected an order of more than 2000 units. So this shows that people are willing to spend more to get all the extra features and comforts. The Vitara though priced a few lacs less than Fortuner or Endeavour could not get hold of so much bookings. So an effective pricing could lead to an overwhelming sale. Vitara could keep the price or

9 | P a g e may increase it by a few thousands only. People would then be even willing to buy Vitara if it gives value for money and comfort. Moreover if the Vitara be produced in India, then the import duty could also be reduced and it could eventually turn up into a profitable venture.

Safety: - Grand Vitara offers great safety features in a car reasonably priced unlike its competitors. It has not only got a strong and weight optimised structure but also a body with built-in ladder frame which takes care of collision protection. It has also got an additional safety feature of “head-impact protection pad and front and rear side-impact door beams”.

Active safeties available in all the models of Vitara are “anti-lock braking system with electronic brake-force distribution, tire pressure monitoring system and ESP with traction control”.

Apart from this, the standard passive safety features in all the models of Vitara are: front impact airbag Supplement Restraint systems (SRS), side impact airbags, overhead airbags, rear child seat Latch system, pretensioners etc.

It has also paid attention to pedestrian impacts as required in global markets. The front end and the bumper are put together energy-absorbing materials to decrease the risks of severe leg injuries. The hood is designed to reduce some of the force and help protect against severe head injuries. (www.netcarshow.com)

NHSTA frontal crash test: It rates vehicles on 1 to 5 stars depicting 5stars for most injury protection and 1star for least injury protection. It rated Vitara as 4 stars. (http://autos.aol.com)

Channel & Logistics Review

It plays a very important part incase of increasing sales, because until and unless we have a better transport facility we cannot cater the huge number of customers at a time and this would be the major disadvantage for the organization. As far as Maruti is concerned we all know that it’s a very old brand in India. The best part of the company is the after sales services, in which no other company could compete till date. Maruti has its sales and service centre in all most all parts of India, including tier 3, tier 4 cities and even in villages. The sales network of Maruti is very strong because the positioning of the sales stores are done with proper planning, such that

10 | P a g e even in small cities there are generally 2 sales and atleast 3 service centres of Maruti. But in case of its model Grand Vitara, we know that this model is fully imported by the company from Japan. So proper care should be taken that as soon as there is an order for the product, there should be an effective shipping system which would bring the product from Japan in the least possible time (http://www.automobileindia.com/cars/maruti/).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. There are around 681 Maruti dealers and more than 1500 Maruti service centres, covering more than 450 cities in India. They also provide 24 hrs of road services. MUL also has “Maruti True Value Stores” where the customers can easily get good returns for their old cars. For providing genuine spare parts to its customers Maruti under the brand name “Maruti Genuine Parts” sell its parts by help of dealers and the authorized sellers of spare parts.

The company exclusively arranges training for all the staffs (technical, non- technical) to keep them well-run.

The company’s trucks carrying the vehicles are all equipped with GPS so that the dealers can track their dispatch from the factory to the showrooms.

After-sales Service Network:-

To create a spectacular class of service for dealers, MUL has started service stations in India under the tagline “Express Service Stations”. Also to facilitate high quality and genuine spare parts it has started “Maruti Genuine Parts”, or MGP. Sometimes MASSs are at distant locations. So to penetrate those locations often MASSs are integrated into sales offices in order to carry out sales and other financing activities. (http://profile.iiita.ac.in/pchand_mba05/pom/maruti.pdf)

SWOT ANALYSIS OF VITARA

11 | P a g e STRENGTHS:  Fully Independent Suspension: It is equipped with 4-wheel independent suspension thereby making it great on roads. Moreover, what adds to its strength is that no other vehicle is offering this thing at the price at which GV is.

 New & Powerful Engine: It has replaced its 2.7L V6 engine and is now offering a new 230hp V6 engine. This engine is a very smooth & well mannered unit giving Vitara an upscale sound and loads of power which is as much as 230 ponies.

 High Towing Capacity: Unlike its competitors, Vitara is allowing a high towing capacity of 3000 LB. (http://www.autoguide.com/manufacturer/suzuki/2009-suzuki-grand-vitara- review-820.html)

 Brand Name of Maruti: Grand Vitara is enjoying the benefit of an established brand name attached to it. It is the faith of people in the brand that is driving people to invest in this car. It is associated to a brand which is considered to be India’s Highest Satisfaction Brand.

 Low Maintenance Cost: The maintenance cost of Grand Vitara is very low unlike other vehicles. This is primarily because the parts of Maruti are easily available everywhere. The after-sale service and maintenance cost of this car are much low compared to others thereby making it more preferable for people.

 Robust Design: Grand Vitara serves as a multi utility vehicle as due to its strong body it can be used daily trips as well as for the adventurous trips.

 Warranty: It offers an excellent fully transferable warranty of a seven year/100,000 mile.

WEAKNESS

12 | P a g e  Petrol Engine: Since in the SUV sector, diesel has become a more favoured source of power, all the other companies in this sector have come up with their diesel models. Therefore it is difficult for Vitara to convince people to buy its 2.4 litre petrol models in this competitive market.

 Low Fuel Efficiency: It is not good in terms of fuel economy. The petrol engine gives about an average mileage of 7 Km/Litre in the city and around 9 Km/Litre in the highway.

 Small Inside: Grand Vitara has got small interiors. Its backseats are not very comfortable and there is hardly any space there for the adults to sit. Only the kids can occupy that space thereby acting as a very major drawback for GV as it defies the purpose of buying SUV. Apart from this the quality used in interiors is also not very good.

 Value for Money: Every customer in the Indian market desires value for money when they buy any automobile. However the pricing of the car is much higher in terms of the features offered by the car.

 People Resist Upper Segment Models: People have always associated Maruti with small cars and hence they are not getting convinced about its cars in SUVs.

OPPORTUNITIES

 Understanding of Indian Market: As Maruti has been a leader in the Indian market for a long period of time, it has a complete understanding of the Indian markets. Hence Maruti can use this experience to modify its car as per the needs and desires of people here.

 Increased Purchasing Power: The purchasing power of the middle class people have increased thereby increasing the demand for SUVs. Thus the number of potential buyers has risen.

13 | P a g e  Growing Diesel Segment: Grand Vitara was launched by Maruti long time back in 1988 in petrol. However, these days’ people prefer buying diesel variants. Hence by coming up with diesel models, the car will be able to penetrate better in the SUV segment.

 Cheapest SUV: Till date, Grand Vitara is the cheapest SUV that is being imported.

THREATS

Advanced Diesel Engines: One of the major threat that GV is facing is that these days people have developed a preference for diesel automobiles however Grand Vitara is only dealing in petrol cars as of yet.

 Coming Up of International Brands: As India is becoming a globalised nation, it has lead to coming up of many international companies as well in the automobile sector like Audi, BMW, Volkswagen etc. Hence the competition aggravated even more as people are getting attracted towards these brands.

 In House Manufacturing: The manufacturing of Grand Vitara is not done in India. Its entire manufacturing is carried out in Japan. This increases its price to a great extent. Unlike Grand Vitara, its competitors have their manufacturing units’ setup in India itself, thereby enabling them to keep their prices lower than Grand Vitara.

Current Marketing Convention

1) Price-Based

Segment-D - Cars priced between Rs Grand Vitara 1000000- Rs 2500000

2) Length-Based

14 | P a g e Segment-A4 –Executive- Cars having a Grand Vitara length of 4001-4500 mm

Source: www.marutisuzuki.com

Currently Maruti Suzuki is the market leader in the small and mid-car segments with a market share of about 52%. However, it is facing threats from the other car manufacturers like Hyundai, Toyota, Ford, etc. who are trying to penetrate the above segments with their innovative new launches. So Maruti should aim its focus now on the comparatively less competitive Segment D, which is mainly the SUV segment as this segment has a vast potential to grow. So Maruti should tap this opportunity to break into this segment with its new Grand Vitara so as to achieve full market coverage.

ATTRACTIVENESS OF THE SEGMENT

Porter’s Five Forces model helps us to determine the attractiveness of this market segment.

1) Threat of rivalry- Presently, the SUV segment in India is about 2% -3% of the total automobile sector. There are only about 6-7 major players like Ford Endeavour, Toyota Fortuner, Honda-CRV, Hyundai Tucson, etc which are desperately trying to curve out a niche for them with their differentiated product and in an effort is trying to create an increasing demand in this sector. 2) Threat of new entrants- The Indian automobile has a huge potential as it is growing strongly, so there are prospects many players to grab a share in this market. As already mentioned other global players like BMW, Honda, etc are trying to launch their new SUVs in the market. 3) Threat of substitutes- Low (Gradually increasing). 4) Threat of buyers- The bargaining power of the buyers increases as more and more players foray into the segment.

15 | P a g e 5) Threat of suppliers- Bargaining power of suppliers is low as an increased price may force the company to obtain spares and parts from other competitor suppliers.

CUSTOMER JUDGEMENT PROCESS

The customers before going for the cars in this segment would go through a thorough judgement procedure on whether it would be feasible to buy the car. The various steps would be 1) Customer Experience 2) Future Expectations 3) Peer Influences 4) Marketing 5) Thorough Market Research 6) Others

1) Customer Experience: - Customers might not be satisfied with their existing car and so their decision of buying a new car would be to satisfy their needs. 2) Future Expectations: - Customers might want a car in this section to fulfil their aspirations and to maintain their status and to fulfil their needs f driving a strong, powerful car. 3) Peer Influence: - Customers might be lured by the influences made upon them by their peers, friends, and family members on a specific product. 4) Marketing: - Proper advertisement of the car and its various features like safety, comfort, etc through advertising campaigns, televisions may attract a customer in going for the product eventually. 5) Thorough Market Research: - Customers would embark on a process of thorough market research before going for the product. They would go through different websites, newspaper articles, different magazines, and company’s performance. They could also visit the dealers to have a thorough knowledge and understanding of the different variants, their prices, the maintenance cost, ease of availability of the service centres, etc. 6) Others: - Some other factors influencing the customer judgement process are the age, lifestyle, income and family of the customer.

POSITIONING STRATEGY (4 P’S)

16 | P a g e The positioning strategy of Vitara should be based on the following:-

Geographic Segmentation Region- India(mainly the metros and other Tier-1, Tier-2, Tier-3 cities) Demographic Segmentation Age-20 and above Gender- Male and Female Income Levels- Rs 80000-Rs 150000 per month Lifestyle- Brand-Oriented

PRODUCT

Body Type SUV Engine 2.4 L VVT Petrol, Diesel(Expected) Doors 5 Transmission 6 Manual/Automatic Capacity 7 Displacement 2393 cc Safety 6 SRS Airbags, Anti-lock Braking System Wheel 16’ alloy/Optional 18’ alloy, Tubeless Radial Others 4 H/ 4 L Lock/Hill Descent Control, Increased Fuel Efficiency, Enhanced Luggage Space Colour Cool Beige Metallic, Silky Silver Metallic, Cat's Eye Blue Metallic, Blush Black Metallic, Grove Green Pearl Metallic, Pearl White, Cassis Red Pearl

Source: www.surfindia.com

17 | P a g e PRICE

Indian automobile market is getting congested day by day with the launch of many new global brands. Maruti had remained an undoubted leader in the Indian car industry with market capitalisation of about 50%. But of late it is facing stiff competition from its competitors. So it has to follow a market-penetrating pricing strategy to maintain its profit share in the market.

Demand Forecasting: - The demand for SUVs in India is expected to be around 10% annually (http://timesofindia.indiatimes.com/biz/india-business/Competition- hots-up-in-SUV-segment/articleshow/4992757.cms). The expected sales figure in 2010 is around 10000 units. The price therefore plays an important role in the demand. So price needs to be kept below the other competitor’s price.

Estimated Sales Growth= 10% Estimated Sales in the year 2015= 14441 If Maruti tries to gain a market share of 20% in SUVs (say), then in 2015, Estimated Sales = 20% of 14441= 2882(approx) Estimated Growth over 5 years= 40% So, estimated sales of this car in the current year= (2882=x (1+ .4) ^5 = 536 units

Pricing Method: - The pricing method should be such that Maruti would be able to exploit its market share and give its competitors a stiff competition in the SUV market.

Approximate Variable Cost = Rs. 1.5 lacs/unit Approximate Fixed Cost = Rs. 70 crores

Expected sales unit = 536(for the current year) Unit Cost = Variable Cost/Unit + (Fixed Cost/Unit Sales) = 150000+ (700000000/536) = 150000+ 1305970

18 | P a g e = 1455970 Now, suppose Maruti would like a return of 20% on sales. So, marked price= [1455970/ (120/100)] =Rs.1747164

So the net profit per car should be Rs. 291194 So, if we propose to sell about 536 units per year, we can have a profit of around Rs. (291194*536) = Rs. 156079984. Suppose, Maruti embarks on a unique plan of promoting the product by CSR saying that out of the profits 4% should go for the education of a girl child. So net profit then would be Rs. (156079984- 6243199) = Rs 149836785 = Rs. 14.98 crores. Now, we also have to take into considerations the fact that Maruti would also need to focus on proper promotion of their Vitara in the market. The advertising medium could be Banners, Catalogue, Promo, Road Shows, PR, Seminars, etc. We have also taken into considerations that the fixed cost also includes the charges for advertising the product. Justification of the Price: - We are keeping the showroom price of Maruti Suzuki Vitara to be slightly higher than its previous price of Rs. 16.92 lacs to Rs. 17.47 lacs. We think customers are willing to pay some price more for greater comfort and safety and benefits. These benefits can enhance the apparent value of the consumers. 1) Grand Vitara is designed to dominate the roads and overcome the obstacles it would face on the roads. Its higher performance, styling and overall safety features would be comprised if the designers try to reduce the price. 2) MUL is renowned for its after sales service to its customers. The customers are thus benefitted with this service. 3) MUL has a brand image and this image is sometimes being referred as a low cost model. But Vitara could help Maruti to overcome from that “no frills” image. 4) MUL’s main objective is also to increase its market share in the SUV segment. So the price has to be consistent with the price of the competitors who have also kept the price around Rs. 18 – 19 lacs. The price can however fluctuate a bit due to the fluctuation in prices of the ancillaries, raw materials, etc as these things also need to be covered with the pricing.

19 | P a g e 5) Moreover, people could also be attracted by the thought that their buying would help the education of girl child.

Maruti has got the largest network for sales and providing services. Currently it has got:  681 sales outlets in a total of 454 cities,

 16 regional offices,

 9 area offices.

The parking area of the company can accommodate more than 7 million vehicles and there are 2767 service workshops in total. The Grand Vitara would be targeted at all the metro cities and the tier-1 and tier-2 cities of the country and then gradually could be targeted to the other growing sectors after taking into consideration the response from the above cities. These growing cities have a lot of potential buyers as the businesses are gradually flourishing in these areas. So the product can be easily targeted at these growing cities. The company could also facilitate its customers with various other services related to the car like finance, insurance, extended warranty, genuine parts and accessories etc.

PROMOTION

For promotion of the Grand Vitara, the following strategies could be used. It would target both current and the new users in the segment. Advertising: - Vigorous advertising could be carried out in the form of online ads, print ads, TV ads internet ads and radio. Maruti could also come up with an ad campaign saying “Drive-The Vitara Way”. Moreover various sales promotion techniques like extended warranties, gifts, trade shows etc could also be adopted.

20 | P a g e In the beginning, for promoting Grand Vitara, Maruti could also introduce a direct marketing campaign. It could also decide that Grand Vitara would not be showcased at any of the Maruti’s dealerships all over the country. It would decide to sell the car only to selected people through “doorstep test drive exclusively for the high-end segment”. As Grand Vitara has been positioned as an ideal car for the high end customers i.e. those customers who willingly spend large amounts on cars, the company could plan to organise a number of events wherein these people could be invited. The first one in this series would be to tie-up with DLF Golf Links wherein if golfers score a hole- in-one any Sunday then they could win a Grand Vitara. After this they could conduct these events in other cities. This would help it to achieve visibility. However due to the slowdown in the automobile industry, Suzuki could come up with great offers like: For certain periods:-  It could give a choice between a low interest rate of 2.8% and low monthly instalment scheme.

 Free full service of the car for either for 2years or 40,000 Kilometres.

 An opportunity to win a free holiday trip for 2 people.

 Exclusive “Suzuki merchandises”. (http://www.fastmotoring.com/post/2009/06/04/Suzuki-Malaysia- Promotions-for-Swift-SX4-Sport-Crossover-and-Grand-Vitara.aspx)

Other offers that could be introduced to attract people are:  Free bookings if done on the spot.

 Introduction of new and improved models. (http://www.exchange4media.com/brandspeak/brandspeak.asp?brand_id=37)

FEASIBILITY STUDY/BUDGETS AND OTHER PROMOTIONAL/ADVERTISEMENT COSTS

21 | P a g e Suppose Maruti spends 10% of its total expected sales in 2011 on the advertisements and promotions of Grand Vitara.

Estimated market sales in 2011= 536

Average Price of each car = Rs. 1747164

Promotional Budget = 10% (average price of car* no. of cars sold) =Rs. 93647990= Rs.9.36 crores

In the above we have already calculated that Rs. 14.98 is the expected revenues every year. Now advertising expenses would be about Rs 9.36 crores which would be included in the fixed cost of Rs. 70 crores as mentioned above.

Therefore, the net profit per year would be around Rs 14.04 crores.

So to break even we need to cover up the fixed cost which would be done in approximately 70/14.04 years = 5 yrs.

So it would be a profitable venture after the 5th year.

Specific Action Plans

To achieve the above mentioned targets we require the following:-

1) Specifying the target audience: - Maruti Suzuki Grand Vitara should specifically try to target that segment of the people who could afford the SUVs. For that reason, the specific target group could be the people with comparatively higher disposable income. The looks of Vitara are quite elegant and it is not as robust as its competitors. The main reasons being, Vitara tries to communicate that it is also an ideal choice for women too and not only for males. The target audience should not be the common man which generally Maruti targets for its other cars. Maruti should remember that they are trying to carve out a niche for them in the sector which is small but which has high potentials of growth.

22 | P a g e 2) Promotional Objectives: -

Creating Brand Awareness - Maruti has to keep in mind that the Grand Vitara name should be associated with that segment of cars A4- D so that it could lead to the potential purchases.

Creating Brand Attitude – It should be ensured that the customers feel that Grand Vitara could fulfil their needs of a luxury SUV car. There should be a proper alliance of what the company is trying to sell and customer’s taste.

Mixing CSR with the Sales- As stated above, we have already said that Grand Vitara could go on board with this unique process of tying up CSR with its sales. We have shown an estimated 4% of the profits, i.e., about Rs. 62 lacs could be donated to some big charities for the promotion of education for the girl child. This could be an innovative idea and could give much positivity towards the surge of sales.

3) Communication Strategy- The prime aim of Maruti Suzuki is to cater to needs of customers in all car segments. But the most important thing to be kept in mind is the brand name “Maruti Suzuki”. It should be kept in mind that the advantages of Vitara over other competitors. Maruti should try to focus upon those features of the car such as speed, performance, and technology keeping in minds the successful and specialized users of the car.

4) Focusing on the Common Mass- Maruti should avoid using a celebrity for its promotion, but rather focus on the common man so that it would allow them to identify themselves with the brand rather than communicating through a movie star.

IMPLEMENTATION

The above discussions forced us to conclude some facts required to implement a successful launch of Vitara in the Indian markets in a new avatar.

1) Maruti should start assembling the Grand Vitara in India, and should discontinue its current practice of importing the vehicles from Japan. This could help them cutting down a lot on import duties and transportation costs.

23 | P a g e 2) Word of mouth is very critical for success in this segment. Maruti should make sure that once a new customer shows any interest for Vitara and visits the dealer, they should try very hard to retain him and pursue him in buying the vehicle. Maruti should try to strengthen customer liaison through database marketing.

3) As mentioned in the plan that the company is also looking forward to target the female segment for their new Vitara, so it should stress upon those niche places, like branded salons, jewellery shops, shopping centres, etc. where they can target a lot of preferred women buyers.

4) As the company would contribute towards the education of the girl child, it should ask a subsidy in the excise duty from government or to promote its vehicle in the government departments.

5) The company should go aboard with a unique promotional feature, like taking its new Vitara on road through all most all the major tier 2 and tier 3 cities where there is a less penetration of SUVs, in an effort to make its presence feel among the population.

6) The company should also try to tie up with the major television production houses, so that they can use the vehicle in their shows. These sops are regularly watched by female and even male audiences and thus would help in generating some demand for it.

7) To make Grand Vitara popular, MUL can also show the advertisements during the telecasting of reality shows like MTV ROADIES, SPLITSVILLA, having high TRPs, which would help them to target the youth of the nation.

8) The MUL should also sponsor the business events of association like CII, FICCI etc. and distribute its catalogues to the distinguished guests.

If the above mentioned marketing strategies are fully implemented by the company then it would be highly beneficial for the MUL to get the desired sales target and achieve atleast some share in this fast growing SUV market.

However there should be a contingency plan. Maruti aims at becoming the leader and to attain the top spot it should try to persevere in this market which is still at its

24 | P a g e nascent stage. However, there should be a constant supervision of all the implementations at regular intervals and management should take decisions likewise if any of the above promotion means fail. One plan could be to manufacture the items as is demanded and not to unnecessarily make the product and have a huge amount of inventory. Therefore, Vitara would have to be repositioned even better if the current plan that has been designed fails.

References:-

1) 2009 Suzuki Grand Vitara Review [Online] (Updated 21st October, 2008) Available at: http://www.autoguide.com/manufacturer/suzuki/2009-suzuki- grand- vitara-review-820.html [Accessed 27th March, 2010]

2) Sports Utility Vehicle [Online] Available at: http://www.automobileindia.com/cars/maruti/ [Accessed 27th March, 2010]

3) Maruti Cars in India[Online]

Available at: http://www.automobileindia.com/cars/sports-utility-vehicles/ [Accessed 27th March, 2010]

4) 2010 Suzuki Grand Vitara Safety Ratings[Online]

Available at: http://autos.aol.com/cars-Suzuki-Grand+Vitara-2010/safety- ratings/

[Accessed 27th March, 2010]

5) www.cardekho.com

6) http://www.exchange4media.com/brandspeak/brandspeak.asp?brand_id=37

7) http://www.fastmotoring.com/post/2009/06/04/Suzuki-Malaysia-Promotions- for-Swift-SX4-Sport-Crossover-and-Grand-Vitara.aspx

8) www.grandvitaraindia.com

9) http://www.marutisuzuki.com

10) http://ndtvauto.carwale.com/Forums/ViewThread-466.html

25 | P a g e 11) http://www.netcarshow.com/suzuki/2009-grand_vitara/

12) http://profile.iiita.ac.in/pchand_mba05/pom/maruti.pdf

13) www.surfindia.com

14) http://www.suzuki.co.in/pdf/Organaisational-profile.PDF

15) http://timesofindia.indiatimes.com/biz/india-business/Competition-hots- up-in-SUV-segment/articleshow/4992757.cms

26 | P a g e