TERM PAPER

OF
PRODUCT AND BRAND MANAGEMENT

Advertising & Sales Promotion Of Maruti

SUBMITTED TO: -

Rajeev Gupta
Lecturer Lsb

SUBMITTED BY:-
Waseem Afzal Naik
Reg. no. 10907837
Section R1904 B57
Table Of Content

Advertising Budget-...................................................................................................10

Executive Summary
The Automobile market has become competitive and the consumer
purchasing patterns are highly volatile and hence effective consumer
promotions have a much greater significance in marketer’s media planning.
In order to tackle the tough competition from its competitors most of the
brands need to formulate effective promotions and thereby in current
scenario companies working with expert advertising agency for their brand
promotions is a must

Moreover there is a constant need of enhancing the advertising

campaign throughout, it should create interest in the minds of consumer so
that every time they look for any car to buy, they look for our brand.

Automobile industry has gone a long way in formulating and

implementing the promotional strategies. Promotion strategies formulated by
Lintas Media Group have been diversified to produce good results. All the
promotion type advertising, sales promotion, personal selling, online
marketing, Public Relations and direct marketing are being used
effectively to increase the sales as well as market share. Sales promotion is
the area where most of the automobile companies are giving more
importance because of its contribution towards the total sales. Effective and
attractive promotional schemes are to be formulated for successful
promotion of brand and thereby conveying the company’s vision & mission.

With the increasing importance of web media and news channels, print
media is finding itself at a bit lower position however it doesn’t mean that it
has lost its importance but still people are taking more interest in web media
as it is now easily accessible and available at quite lower price than print
media. But still it has to go a long way to outcast print media as print media
has itself got a lot of importance.

Although Maruti is doing well in terms of advertising but every where

there is a possibility that its brand is backed by strong commitments like
widest network of service stations, Power K series engines.

Introduction
A Brief about Maruti –

• Maruti Udyog - a joint-venture between Suzuki of Japan (26% stake)

and the Indian government in 1981

• 10 basic models and more than 50 variants

• 3 out of top five selling car model in India are Maruti Product (M 800,
Zen, Alto)

• Annual production capacity 5, 00,000 with 47.30% market share.

SWOT Analysis of Maruti –

STRENGTHS WEAKNESS
Established distribution and after-sales Lack of experience with
networks foreign market
Understanding of the Indian Market and liaison Inexperience with foreign
with govt. workforce
Ability to design products with differentiation Heavy Import tariffs
features
Brand Image & Experience & Know- how in
technology
OPPURTUNITIES THREATS
Increased purchasing power of Indian Emerging Competition
middleclass category
Government Subsidies & Tax Benefits Increasing cost of inputs
Foreign Collaboration Rapid change in customer
preference

Integrated Marketing Tools Used By MARUTI

Advertising Agency
Agency Name- Lintas Media Group

Website-http://www.lintasmedia.in

Offices –

Some of its major clients-

Services by the Agency -

Lintas Media Group offer wide range of services and they are:

• Scheduling the advertisement timings

• Giving percentage of advertisement to particular channels

 • Setting the target budget for their clients

• Maintaining companies public relations strategy

• Building Brand image among target customers

• Growing brand awareness of company in market

• Internet brand promotions as well

CONSUMERS

The consumer behaviour becomes a “mystery”: segments and diverse

expectations make forecasts almost impossible.

• Legislation, global changes, technology trends and uncertainty on the

customer side redefine automotive landscape
• Emerging marketing buyers generate ultra-low cost (ULCC’s) segment
• Senior citizens play increasingly important role in mature markets
• “My Generation” ask for more tailored products even at higher price.
• New Mobility Concepts – non buyers, instead car sharing and new
rental formats.

As a fresh approach, Maruti has its own campaign running for delighting
customers: Engineering 2020 and the attributes are – Styling & Design,
Technology - OEM Strategy, Our offering, and facing the key challenges.
 SOURCE

Most of the messages for Maruti are delivered by the man himself Mr Amal
Ganguli (Director). There are very few celebrities who actually indulge in
endorsement for Maruti, as they believe in actual customer experience and
count upon their service.

Mr Shinzo Nakanishi, Managing Director and CEO, Maruti Suzuki delivers

speech at occasions such as new years and silver jubilee projecting different
brands of the company.

Actor R. Madhavan has also been appointed as the brand face for its popular
hatchback Wagon R. Madhavan was considered a right fit after analysing his
future ventures/projects and the brand objectives of the product.

MESSAGE

Maruti Suzuki adopts regional approach to transfer their message. They focus
more on regional communication strategy by having local language dialogues
to reach out to the masses. This is the strategy to make the brand more
relatable to its current and prospective users.

Some of the quotes showing Maruti’s messages are –

Usually campaigns focus on offerings, but we now had to talk about the
experience. The car in this context is not just about transporting people from
place A to B. It had to stress an emotional connect. And it's this emotional
connect that is totally unique to Maruti."

- MayankPareek, Executive Officer (Marketing and Sales), Maruti

Suzuki India Limited, in June 2008.

"After investing Rs 90 billion in manufacturing facilities, we are now looking

to invest in marketing infrastructure and brand-building initiatives. These will
enhance customer experience with Maruti Suzuki."

- Shinzo Nakanishi, MD and CEO, Maruti Suzuki India Limited, in April

2008.

CHANNEL
 Maruti launched several television commercials (TVC) for its promotion and
carried on several ad campaigns. The ad campaigns including the TV
commercial were developed by Capital Advertising and also included print
ads, outdoor campaigns, and internet ads.Therefore the channel of
communication mainly adopted by Maruti is through both personal and non-
personal channels.

ADVERTISING OBJECTIVES

Advertising campaigns included TVCs, print and radio ads, outdoor

promotions, point of sale and mobile promotions. The company also
organized different promotional events to attract prospective consumers.
Maruti also offered special schemes for specific professional and income
groups.

Maruti's advertising strategy focused both on promoting its cars and on

building up its corporate image. Maruti's campaigns emphasized different
aspects of its cars, including fuel efficiency, space, looks, etc. It also
advertised its widespread network and services. The ad campaign for the 'K'
series engine was the first time that Maruti was advertising specifically a
technological innovation that it had pioneered.

This change in advertising strategy was probably because the company had
decided to put the new 'K' series engines into all its existing and new
products. To begin with, Maruti had the 'K' series engine only in its two new
cars, A-Star and Ritz, and it had also announced that it would incorporate the
new engine in Zen Estilo and Wagon R.

Advertising Budget-

Spends Pattern Value in CR

Total Media Spend 2009-10 190
TV Spend 2009-10 86
News Spend 2009-10 13.78
Hindi News Spend 2009-10 9.45
AajTak Spend 2009-10 5.75

TVTN Spend History -

Year Budget
 2008-09 3.5 Cr
2009-10 5.74 Cr

CREATIVITY

The creative process of Maruti Suzuki includes the various strategies adopted
by the company as in the PRICING Strategy –

• Caters to all segments and has a product offering at all price points.

• Their pricing strategy is to provide an option to every customer looking

for up gradation in his car.

Creating different REVENUE STREAMS –

• Maruti Finance

• Maruti Insurance

• Maruti Driving Schools

CORPORATE STRATEGIES –

• Maintaining Status quo due to limited environmental opportunities for

gaining competitive advantage.

• Few employees will have opportunities for advancement.

• Critical that management identify key employees and develop specific

HR retention strategies to keep them

REPOSITIONING of products –

Whenever Maruti’s brand grew old or its sales started dipping , it made the
following efforts in the same field :

• Omni – interiors & exteriors

• Versa – slashed prices by decreasing engine power

 • Esteem – new look to boost sales

• Baleno – price slash from 1999 (7.2lacs) to 2003 (5.46)

• Wagon R – modifications in engine and sporty look

• Zen – modified for times and special additions

• Maruti 800 – Introduced modified accessories

DIFFERENTIATION –

• In order to demand a premier price from consumers – by attempting to

distinguish organizational products or services from other competitors.

• Organizational offers employees incentives and compensation for

creativity.

• HR Strategy focuses on external hiring of unique individuals, and on

retaining creative employees.

SELECTIVE TARGET APPROACH –

• Promotion for urban people through mall, auto mall buying, clubs,
megadealers

• Promotion for rural people through car fair easy finance scheme for
“PanchayatiMEDIA STRATEGY
Advertising

• TV Ads

• Print Ads

• Radio Ads

Advertising Strategy

• Persuasion Advertising

“Ghar Aa Gaya Hindustan”

“India Comes Home in Maruti Suzuki.”

Dates & Action

End of Apr-May-June End of End of December End of March
September
April - Innovations for Present present Movie IPL contest
WagonR Blue Eyed SonaJeeto - Masala Award
campainglaunch.May- Contest -event & Budget
Present AajTak Anchor 2011 pitch
Activation
Present post evl of Blue Present post evlPresent Sonajeeto MM awards post
eyed campaing and finsing of success and pitch event and pitch for
Anchor for MM awards, IPL contest
Activations Pitch for Budget
Sch
“Papa Ki Karaa petrol khatam hi nahiHota”

• Information Advertising

• Alternative Advertising Options

BTL - Sponsorships

TV shows - India’s Got talent

Place Advertising – Bill boards

 Chart - % of advertisements on different channels by Maruti
(Source Mrs. Manisha Motiramani – Branding & Sales Promotion Manager –
AajTak)

Promotional Strategy-

• Maruti Driving School

• Adoption of state running

• CSR programs

• Sponsorship of Rode race e.g. Maruti Raid De Himalaya

• Sponsorship of other sports like golf and polo

Also Nakanishi took over as MD from Jagdish Khattar last year. He has
strategic plans designed for brand promotions of all Maruti brands in the
country. Maruti Suzuki has decided to open a company owned brand stores in
major cities of India.

The company plans to showcase the entire product range under one roof.
These showrooms will not be actually retail outlets but brand promotion
counters that will familiarize customers with the models and features of
various cars.

This idea of opening brand showrooms is in line with company’s plans to

invest in marketing infrastructure and brand building initiatives that aim at
improvising customer experience with Maruti Suzuki.
 “Customers can test drive the cars, familiarize themselves with various
features and then purchase them from dealer outlets.”

Increase in sales communication materials of

Maruti due to various communication materials.
Maruti Suzuki India Ltd. on Saturday posted a 5% rise in fiscal second-quarter
net profit after higher royalty payments to parent Suzuki Motor Corp. and a
rise in raw-material costs drained most of its gains from record-high domestic
car sales.

Sales at the company, which controls nearly half of India's car market, have
benefited from a fast-expanding local economy that is driving vehicle
demand.

Stiff competition, however, prevented Maruti from raising prices to an extent

to fully offset high steel and rubber costs.

Net profit in the three months ended Sept. 30 rose to 5.98 billion rupees
($134.9 million) from 5.7 billion rupees a year earlier. Sales rose 27% to
89.37 billion rupees. Maruti sold 277,936 vehicles in India during the most
recent quarter, up 33% from a year earlier.

Maruti's sales in the latest quarter were aided by the Alto K10 small car,
introduced in August, and a new version of the Wagon-R small car, launched
in April. Vehicle sales also benefited from three launches during the past
fiscal year: the Ritz and Estilo hatchbacks and the Eeco multipurpose van.

"Growth was driven by good consumer demand across segments and across
cities," Shinzo Nakanishi, managing director and chief executive, said at a
news conference. "We expect demand to more or less continues in the
second half of this fiscal year."

Increase in growth was also because of advertisements and various

campaigns and also due to various promotional tools used by the company.
Exports fell 4% to 35,718 vehicles, mainly because of lower demand in
Europe. "Going forward, we would focus more on non-European markets for
exports to offset the demand decline there," Mr. Nakanishi said.

The company, 54.21%-owned by Suzuki, is investing close to 37 billion

rupees in setting up two new plants at Manesar in the northern state of
Haryana to raise total vehicle production to 1.75 million units a year by the
fiscal year ending March 31, 2012 or early in the 2012-13 fiscal year. It
currently has an installed capacity to make 1.2 million cars at its two
factories: one each in Manesar and Gurgaon, also in Haryana.

Maruti has taken steps at its existing plants to improve productivity. "The
demand for new cars has been rising and we have raised output at our
factories to 110,000 a month, or 1.3 million a year to meet this demand," Mr.
Nakanishi said.

Mayank Pareek, managing executive officer for marketing and sales, said
Maruti expects sales in October to continue rising at a record pace. "We
expect to sell more than 100,000 vehicles in the local market for the first
time in October," he said.

The company launched new models or variants of existing vehicles to

compete with small cars from Hyundai Motor Co. of South Korea and General
Motors Co. and Ford Motor Co. of the U.S.

Maruti also started to use new-generation K-Series engines on most of its

vehicles. The Suzuki-developed engines, which are more fuel-efficient,
command higher royalty payments then those used previously.

The new engines drove up Maruti's royalty payments to 4.72 billion rupees
from 2.58 billion rupees.

The company spent 69.39 billion rupees to buy steel, aluminium and other
raw materials in the quarter, up 32% from a year earlier.

Maruti's earnings margin before interest, taxes, depreciation and

amortization narrowed to 10.7% from 13%.

Mr. Nakanishi said the company expects rising input costs and currency
fluctuations to put pressure on its profit margin in the second half.
Maruti, however, has no immediate plans to raise car prices, . "its first focus
is to absorb as much of the input cost increases internally and adopt
productivity-enhancement measures to protect margins."

Mr. Nakanishi said Suzuki and Volkswagen AG of Germany are expected to

announce their joint projects by early next year. India will be the focal point
for these proposed joint projects by the two auto makers.

Volkswagen bought a 19.9% stake in Suzuki for $2.5 billion in December.

SOCIAL AND ETHICAL ISSUES

In the past decades, increasing amount of attention has been devoted to

culturally and ethically sensitive approach in business and marketing.
Marketing managers have become ethically more sensitive, and they are
largely convinced that customers and the public expect them to act in a
morally acceptable way.

Thus it revolves around one fundamental quest to position brands in an

integrated way addressing ethical and cross-cultural issues. The basic
problem premise was to empirically explore the strategy “Maruti” would use
in positioning their brand in an Ethical way. The methodology is that five
basic elements of brand positioning are identified (Brand Identity, Brand
Image, Brand Personality, Brand Awareness, and Brand Communication)and
these elements of brand positioning and their consisting variables are
defined and blended with ethical & cross-cultural issues.

After generating a statistically significant framework a predictive model is

developed. Here the core idea is that “Maruti” has used ethics and cultural
variables as product differentiators and has created a strategic advantage for
the brand, therefore restating the importance of ethics as the basic variable
of business and delivery of promised benefit by the brand to the consumer.
Maruti's Strategy suggests that the brand can use various implicit and
sublime variables of culture and can create a differential positioning.
What was the effect on the sales of Maruti Cars after the very
popular campaign, "Kitna Deti Hai?"?

The Indian automobile industry is one of the fastest growing industries in the
world. 25 % of the population of this country belongs to the middle-income
group. The highest selling cars are the middle-range ones, purchased mostly
by the middle class section; out the four highest-selling cars in India, two are
produced by Maruti Suzuki, making it the highest- selling car brand in the
middle range car market. Yet, this automobile giant still feels the need to
engage in a large-scale advertising campaign – as though its sales weren’t
high enough anyway. Maybe, it is because the consumers have become so
lazy, that they need advertisements to give them the information they need
in order to make the best purchase; whichever seller has a better platter of
information to give out, wins. In the end, the sales figures of Maruti Suzuki
show that it continues to exert a pull on prospective as well as existing
consumers – this time, through this simple yet impressive advertisement.
 CONCLUSION & ANALYSIS
In order to conclude Maruti is running at a very high pace matching with all
the upcoming technologies. It has more than 5 million satisfied customers in
India and is currently having a share of around 54% in the domestic
passenger car market where major international automobile manufacturers
are present.

Moreover, Maruti having a network of 391 sales outlets across 230 cities all
over India, the service network covers 1,113 towns and cities, bolstered by
2,142 authorized service outlets. The company’s change in strategy and
emphasis on developing effective marketing communications began to yield
results. Wagon R an and Zen were ranked first and third in the premium
compact segment.

As the competition is very intense, Maruti should also start laying more focus
on making the integrated marketing communication more effective. Some
stress and strategies should also be given on internet marketing as this is the
need of the hour.

Additionally, the company should start working on direct selling and

promotion by sending emails and letters to both existing clients as well as
other prospective customers to increase the demand. It is also ranked
highest in customer satisfaction with after sales-service, it should try to
maintain this USP throughout because of which Maruti’s consistent
performance in the study over the past several years has resulted in a steady
increase in the percentage of its customers who say they intend to remain
loyal to the brand.
References And bibliography.
1. http://www.wipo.int/ip-outreach/en/tools/guides/tools/

2. http://green.autoblog.com/2010/08/18/indias-largest-automaker-maruti-
suzuki-now-offers-cng-option/

3. Donald R Lehman