Comparative Analysis of Marketing Strategies of Automobile Companies in India

A Comparative Comparative Analysis of of Marketing Marketing Strategies Strategies of Automobile Automobile Companies in India.

Title: A Comparative Analysis of the Marketing Strategies of Automobile Companies in India. The rms namely: namely: • • • •

Maruti Suzuki Hyundai Mahindra & Mahindra Toyota

Keywords: Marketing Strategy, Strategic Management, Brand Position, Brand Equi Equity ty,, Ma Mark rket etin ing, g, Adve Advert rtis isin ing, g, Produ Product ct,, Pric Price, e, Dist Distri riu uti tion on,, Promotion

ABID SHAIKH

Page 

A Comparative Comparative Analysis of of Marketing Marketing Strategies Strategies of Automobile Automobile Companies in India.

Abstract: In today’s ompetitive era the !ord "Strategy’ is very ruial for all all busi busine ness ss orga organi ni#a #ati tion ons. s. $resen esentl tly y orga organi ni#a #ati tion ons s st star arte ted d reali eali#i #ing ng that that ust ustom omer er ent entri ri  and agg aggressi essive ve mark arketin eting g strategies plays vital role to beome suessful leaders. Though globali#ation has opened the doors of opportunities for all% the market is still ro!ded !ith some unkno!n risks and a lot of ompetition. &eause of this ompetition% a marketing strategy must aim at being uni'ue% di(erential)reating and advantage) reating. Therefore% at the heart of any business strategy is a marketing strategy. All the marketing strategies are based on the right mi* of +$’s% only those an be ahead !hih have the right marketing stra strateg tegie ies s bea beaus use e it inr inrea ease ses s the the han hanes es of bette betterr mark market et pene penetr trat atio ion n !ith !ith prop proper er util utili# i#at atio ion n of resou esourres. es. Mark Market etin ing g strategies inlude all basi and long term ativities in the eld of mark market etin ing g that that deal deal !ith !ith the the anal analys ysis is of the the st stra rate tegi gi  init initia iall situation situation of a ompany ompany and formulation formulation%% evaluation evaluation and seletion seletion of mark market) et)or orie iente nted d stra strateg tegie ies s and there therefor fore e ontr ontrib ibute ute to the goals of the ompany and its marketing ob,etives.

ABID SHAIKH

Page !

A Comparative Analysis of Marketing Strategies of Automobile Companies in India.

Overview of Indian Automobile Industry: The automobile industry is one of India’s most vibrant and gro!ing industries. This industry aounts for -- per ent of the ountrys manufaturing gross domesti produt /01$2. The auto setor is one of the biggest ,ob reators% both diretly and indiretly. It is estimated that every ,ob reated in an auto ompany leads to three to ve indiret anillary ,obs. Indias domesti market and its gro!th potential have been a big attration for many global automakers. India is presently the !orlds third largest e*porter of t!o)!heelers after China and 3apan. Aording to a report by Standard Chartered &ank% India is likely to overtake Thailand in global auto)e*port market share by the year -4-4. The ne*t fe! years are pro,eted to sho! solid but autious gro!th due to improved a(ordability% rising inomes and untapped markets. 5ith the government’s baking% and trends in the international senario suh as the deline in pries of natural rubber% the Indian automobile industry is slated to !itness some ma,or gro!th.

Market size ) The umulative foreign diret investment /61I2 in7o!s into the Indian automobile industry during the period April -444 8 August -49+ !as reorded at S; 94%99<.=> million% as per data by 1epartment of Industrial $oliy and $romotion /1I$$2. 1ata from industry body Soiety of Indian Automobile Manufaturers /SIAM2 sho!ed that 9?@%>@? passenger ars !ere sold in 3uly -49+ ompared to 9?9%-@ units during the orresponding month of -49?. Among the auto makers% Maruti Su#uki% Byundai Motor India and Bonda Cars India emerged the top three gainers !ith sales gro!th of 9.+ per ent% 9- per ent and 99 per ent% respetively. The three)!heeler segment posted a -+ per ent gro!th to 9%+=9 units on the bak of inreased demands from the urban market. Total sales aross di(erent vehile segments gre! 9- per ent year on year /y)o)y2 to

ABID SHAIKH

Page "


9%>=%9-? units. Sooter sales have ,umped by -< per ent in the on)going sal% and no! form -@ per ent of the total t!o)!heeler market from ,ust > per ent a deade bak. The ever)rising demand for sooters% !hih has far outstripped supply% has prompted Bonda to set up its rst dediated sooter plant in Ahmedabad. Trator sales in the ountry are e*peted to gro! at a ompound annual gro!th rate /CA02 of >8< per ent in the ne*t ve years making India a high)potential market for many international brands.

!nvestments ) To math prodution !ith demand% many auto makers have started to invest heavily in various segments in the industry in the last fe! months. Some of the ma,or investments and developments in the automobile setor in India are as follo!s: •

•

•

Ashok Deyland plans to invest s +4844 rore /S; @?.+8 >9.@9 million2 in India% by !ay of apital e*penditure /ape*2 and investment during 6E9. The ompany is re'uired to manage s =%444 rore /S; <>4.= million2 of assets in seven loations aross the !orld% for !hih maintenane ape* is needed. Bonda Motors plans to set up the !orlds largest sooter plant in 0u,arat to roll out 9.- million units annually and ahieve leadership position in the Indian t!o)!heeler market. The ompany plans to spend around s 9%944 rore /S; 9@<.@= million2 on the ne! plant in Ahmedabad% and e*pand its range !ith a fe! more o(erings. Eamaha Motor Co has restrutured its business in India. Fo!% Eamaha Motor India /EMI2 !ill take are of its India operations. GThe restruturing is part of Eamaha’s mid)term plan aimed at improving organisational eHieny% as per Mr Biroyuki Su#uki% Chief J*eutive and Managing 1iretor. EMI !ould be responsible for orporate planning and strategy% business planning and business e*pansion% 'uality ontrol% and regional ontrol of Eamaha India &usiness.

ABID SHAIKH

Page #

A Comparative Analysis of Marketing Strategies of Automobile Companies in India. •

•

Tata Motors plans to use the hub)and)spoke model in !hih India !ill be the key manufaturing base !hile it !ill have mini)hubs in overseas markets. The ompany also plans to set up mini hubs in potential markets like Afria% Middle)Jast and South Jast Asia. Bero Cyles through its unit K$M 0lobal has a'uired a ma,ority stake in 0erman biyle ompany Mitteldeutshe 6ahrrad!erke A0 /MI6A2 for L9 million /S; 9<.99 million2. The ompany plans to invest an additional L+ million /S; .4< million2 as apital e*penses in restruturing the a'uired ompany.

"overnment !nitiatives ) The 0overnment of India enourages foreign investment in the automobile setor and allo!s 944 per ent 61I under the automati route. To boost manufaturing% the government had lo!ered e*ise duty on small ars% motoryles% sooters and ommerial vehiles to eight per ent from 9- per ent% on sports utility vehiles to -+ per ent from ?4 per ent% on mid)segment ars to -4 per ent from -+ per ent and on large) segment ars to -+ per ent from -@ per ent. The government’s deision to resolve AT disputes has also resulted in the top Indian auto makers namely% olks!agen% &a,a, Auto% Mahindra N Mahindra and Tata Motors announing an investment of around s 99%44 rore /S; 9.>@ billion2 in Maharashtra. The Automobile Mission $lan for the period -44=8-49=% designed by the government is aimed at aelerating and sustaining gro!th in this setor. Also% the !ell)established egulatory 6rame!ork under the Ministry of Shipping% oad Transport and Bigh!ays% plays a part in providing a boost to this setor. The 0overnment of India) appointed SIAM and Automotive Components Manufaturers Assoiation /ACMA2 are responsible in !orking for the development of the Indian automobile industry. #oad Ahead ) The future of the auto industry depends on the positive sentiments and the demand for vehiles in the market. ABID SHAIKH

Page $


5ith the festival season oming up% the Indian auto setor !ill see a rise in demand !hih is e*peted to bring in ma,or gro!th. An auto dealer survey by rm &S suggested that the Indian auto industry% riding on trends like the upoming festival season and deline in fuel prie% !ill observe a 9- per ent y)o)y gro!th in 6E9. Also% keeping up !ith international trends% there is e*peted to be a surge in the number of hybrid vehiles in the Indian auto setor in the years to ome.

ABID SHAIKH

Page %


Introduction: The automobile industry is faing ne! and pressing hallenges. 0lobali#ation% individuali#ation% digitali#ation and inreasing ompetition are pressing the fae of the industry. In addition% inreasing safety re'uirements and voluntary environmental ommitments by the automotive industry have also ontributed to the hanges ahead. Si#e is no longer a guarantee of suess. Knly those ompanies that nd ne! !ays to reate value !ill prosper in the future. &ased on this perspetive% some strategi methodology is needed !hih !ould enable them to transform themselves for the ompetition. The global automotive industry is sub,eted to a range of fators that are inreasing omple*ity and in7uening the eonomi options available to the automobile manufaturers. The ma,ority of these fators interats !ith one another and has strong interdependenies. Bo!ever% some of these fators are market) indued and onse'uently% annot be in7uened diretly by the automobile manufaturers. These fators inlude: •

•

"$oa$ization, regiona$ization and market convergence 8 1ue to the e(ets of liberali#ation% national markets are inreasingly getting globali#ed. This gives ompanies a hane to e*pand to ne! markets% but also inreases the threat of ne! entrants or inreased ompetition in traditional markets. !ncreasing$y diversi%ed consumer aggregate atterns o' ehaviour 8 Consumers are no longer aepting standardi#ed produts that satisfy their individual re'uirements. Target groups thus have to be do!nsi#ed by ompanies so ustomers !ill be attrated by the produts o(ered. Bo!ever% beause of the inreased global ompetition !ith a stronger fous on prie and not on brand loyalty% onsumers generally do not re!ard ompanies for their more

ABID SHAIKH

Page &


•

•

•

individuali#ed produts. As a result of these fators% automobile manufaturers have ne! demanding re'uirements !ithin their eld of ativity. Acce$erated modi%cation and diversi%cation o' the roduct ort'o$io 8 These ompanies have to shorten produt lifeyles in order to reat to the e*petations of individuals and fast hanging onsumer demands !ith innovative produts. In the past% an average produt lifeyle in the automotive industry !as eight yearsO today% lifeyles are muh shorter% or at least the produt design is often modied after ,ust t!o or three years on the market. 5ith development osts for a ne! model remaining on the same level or even inreasing% this onurrently means a shortening of amorti#ation time for the KJM and potentially lo!er prots. Pervasion o' automoi$es (ith digita$ techno$ogy 8 In -44-% digital tehnology is ars averaged -- perent of the total value of a ar% !ith a foreasted inrease to ? perent of the total value in -494. The integration of hard!are and soft!are into automobiles represents the predominant aelerator of inreased funtionality oupled !ith inreasing omple*ity. This omple*ity results in overstrained ar development departments% produt failures% a ost e*plosion !ith respet to guarantee and !arranty osts% and an impat on ustomer satisfation. !ncreased ressure 'or innovation and )e*ii$ity in 8 1evelopment deve$oment and manu'acturing departments are not ,ust overburdened by the omple*ity of digital tehnology% but also by the shortening of produt lifeyles. Another aspet is the inreasing number of parallel development pro,ets sine ompanies develop more and more nihe models for speial target groups. This ertainly re'uires the use of ne! development tehni'ues suh as virtual reality. 6or e*ample% this tehni'ue enabled

ABID SHAIKH

Page '


&M5 to shorten the development of its P+ model to ,ust ?4 months.

ABID SHAIKH

Page (


Objectives: •

•

•

To revie! the progress of Indian Automobile /$assenger vehiles2 To understand the marketing strategies of:  Maruti Suzuki  Hyundai  Mahindra & Mahindra  Toyota To assess their ompetitive strength.

ABID SHAIKH

Page )

setor


Literature Review: +S -enugoa$ #ao ./0012 3/4 had onduted a study of marketing strategies for emerging markets. The !orld eonomi order is hanging and hanging very fast. Jmerging markets are harateri#ed by some uni'ue features !hih an be applied to all situations like mass dispersed marketsO penetration is abysmally lo! in key produt ategories. Jmergene of information tehnology% high)level of onspiuous onsumption% anti'uated rules and proedures% shift from a protetionist regime to a free market eonomy% a young and vibrant servies eonomy are harateristis of the emerging markets in India. 5aseer Maharo6 .78882 374 has illustrated some marketing strategies for rms in emerging markets. 1espite the billions of untapped onsumers in the !orld’s emerging markets% multinational rms often 7ounder in areas suh as Jastern Jurope% China% India and Datin Ameria. Corporations are 'uikly reali#ing that the loal onsumers do not reiproate !ith enthusiasm. 5hile failure is often attributed to market diHulties% more often it an be traed bak to the multinationals inability to reogni#e the fat that emerging markets are di(erent. Marketing i.e.% those that rely on produt innovation% ne segmentation% high margins and global brands do not neessarily !ork in emerging eonomies. Aording to Ahmadi, # & 5ang .78812 394 marketing strategy enompasses the strategy involved in the management of a given produt. A given rm may hold numerous produts in the marketplae% spanning numerous and sometimes !holly unrelated industries. Aordingly% a plan is re'uired in order to e(etively manage suh produts. Jvidently% a ompany needs to !eigh up and asertain ho! to utili#e its nite resoures. 6or e*ample% a start)up ar manufaturing rm !ould fae little suess should it attempt to rival Toyota% 6ord% Fissan% Chevrolet%

ABID SHAIKH

Page 


or any other large global ar maker. Moreover% a produt may be reahing the end of its life)yle. Thus% the issue of divesting% or a easing of prodution% may be made. Jah senario re'uires a uni'ue marketing strategy. Multinational ompanies in India: The beginnings of automotive industry in India an be traed during 9<+4’s. After the nation beame independent in the year 9<+@% the Indian 0overnment and the private setor launhed their e(orts to establish an automotive omponent manufaturing industry to meet the needs of the automobile industry. The gro!th of this segment !as ho!ever not so enouraging in the initial stage and through the 9<4’s and 9<=4’s on aount of nationali#ation ombined !ith the liense ra, that Audi% &M5% 6iat% 6ord Motors% 0eneral Motors% Bonda% Byundai% Toyota% Skoda% Mitsubishi Motors% Meredes) &en#% enault)Fissan entered into the Indian market. Bergen, M, Heide, :B .78882 3;4 Aording to 4. Many manufaturers entered the Indian market ultimately leading to the establishment of ne! ,oint venture ompanies. A number of foreign rms

ABID SHAIKH

Page !


initiated ,oint ventures !ith Indian ompanies. -, perent per annum. The tehnologial hanges and progress suessfully led to the progress of automobile setor in India. The main reason behind this tremendous progress is the eonomi liberali#ation by the Indian government. The Indian Automobile Industry is gro!ing in all respets and it is also serving as an important soure of employment. Innovation and ne! produt launhes are a ma,or fator driving gro!th in sales of ars. A !ide distribution N servie station net!ork is a key to

ABID SHAIKH

Page "


gro!th in India. The automobile setor is e*peted to !itness strong gro!th and improve its share in global markets too. Aording to <$arke !!!, ! & C(ens, M .78872 3/84 to over the high osts of produt development and the setting up of prodution failities to ater to loal demands% many global automobile giant manufaturing strategies is to assemble vehiles at sale eonomies and oRoad them to their franhise dealers. To keep ageny problems !ith their franhise dealers in hek% manufaturers implement the market)division strategy and the assoiated penalty system MFC’s manufaturing and distribution strategies partly ontribute to the e*istene of regional di(erenes in the priing and availability of spei models and speiations of vehiles. These neessary onditions allo! opportunisti parallel traders to engage in arbitrage.

ABID SHAIKH

Page #


Research Methodology: This omprehensive pro,et shall be purely based on seondary data and through that% it !ill try to study the di(erent strategies of four ma,or players in the Indian Automobile Industry /$assenger vehiles2% namely Maruti Suzuki, Hyundai, Mahindra & Mahindra and Toyota !hih have over @ perent of the entire market share of Indian passenger vehiles market. The purpose of the pro,et is to study their net!ork of dealers and servie entres% their e(etive promotional tehni'ues and their ustomer relationship management !hih is the mainstay of their produt line)up as !ell. The seondary researh shall be based upon data olleted from soures suh as maga#ines% ne!s artiles% ,ournals% blogs and others. They shall be e(etively studied to dra! onlusions about the ob,etives N to frame results and also to understand it as an industry as a !hole.

ABID SHAIKH

Page $


References: 9. +S -enugoa$ #ao ./0012 $rodut and &rand &uilding Strategies 8 A study of marketing strategies for emerging markets. !CS# ourna$s -. 5aseer Maharo6 .78882 $rodut and &rand &uilding Strategies 8 A Study of marketing strategies for emerging markets. !CS# ourna$s ?. Ahmadi, # & 5ang .78812 $arallel imports: Challenges from unauthori#ed distribution hannels. Handook o' #esearch on Strategy and >oresight "oog$e Books +. Bergen, M, Heide, :B .78882 Impliations of s!ithing or replaing produts or suppliers. !:#M -o$ume98 F; .78/92 . -, . Buck$in, P .7882 Competition and Jvolution in the 1istributive trades. Prentice Ha$$ Pu$ication <.
ABID SHAIKH

Page %


99.

ABID SHAIKH

Page &


ibliogra!hy: •

•

•

•

•

•

•

•

•

Aaker, David and :oachimstha$er, E ./0002 The Dure of 0lobal branding strategy. Harvard Business #evie( .ovemerDecemer2J /9@/;; Agar(a$, Madhu ./00;2 evie! of a +4)year debate in international advertising strategy: $ratitioner and Aademiian perspetives to the standardi#ationadaptation issue. !nternationa$ Marketing #evie( /7./2J 71; Bodde(yn, :oan :, Soeh$, # and Picard, : ./012 Standardi#ation of International Marketing. Business Horizons 70.ovemerDecemer2J 10@= Ett$ie, :ohn .788/2 Three takes on F$1. Automotive Manu'acturing and Production .:une2 Merer Management Consulting Automoi$techno$ogie .78/82

Maro

Jhmer

/-44-2.

0lobal prodution summary by ountry.
ag Bis(ait, Saikat Baneree & #itt(ik T, e( De$hi S!AM .788;2 The Thailand N ASJAF India 6ree Trade Agreements 8 Impliations for the Indian Automotive Industry. 6ebruary. #amas(amy, -S & amakumari, S .78802 Marketing Management: 0lobal $erspetive. !ndian
ABID SHAIKH

Page '

A Comparative Analysis of Marketing Strategies of Automobile Companies in India. •

ee$amegham, S .78/72 Marketing India /+ th edition2% ikash $ubliation% Fe! 1elhi.

Tentative "ha!ter #lan:

• • • • • • • • • •

• • • • • •

Title Abstrat Introdution Diterature evie! Industry Kvervie! Kb,etives Market 1esription S5KT Analysis S5KT J*planation Marketing Strategy.Maruti Suzuki, Hyundai, Mahindra & Mahindra, Toyota2  $ositioning  $rodut Strategy  $riing Strategy  1istribution Strategy  Marketing Communiation Strategy  Media Seletion Analysis of strategies esults 1isussions Conlusion eferenes &ibliography

ABID SHAIKH

Page (


ABID SHAIKH

Page !)


*+e Automobile industry , Industry of Industries. 3anuary -49

ABID SHAIKH

Page !

Comparative Analysis of Marketing Strategies of Automobile Companies in India

Recommend Documents