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 riu uti tion on,, Promotion
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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 ruial for all all busi busine ness ss orga organi ni#a #ati tion ons. s. $resen esentl tly y orga organi ni#a #ati tion ons s st star arte ted d reali eali#i #ing ng that that ust ustom omer er ent entri ri and agg aggressi essive ve mark arketin eting g strategies plays vital role to beome suessful leaders. Though globali#ation has opened the doors of opportunities for all% the market is still ro!ded !ith some unkno!n risks and a lot of ompetition. &eause of this ompetition% a marketing strategy must aim at being uni'ue% di(erential)reating and advantage) reating. Therefore% at the heart of any business strategy is a marketing strategy. All the marketing strategies are based on the right mi* of +$’s% only those an be ahead !hih have the right marketing stra strateg tegie ies s bea beaus use e it inr inrea ease ses s the the han hanes 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 esourres. es. Mark Market etin ing g strategies inlude all basi and long term ativities 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 seletion seletion 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,etives.
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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 aounts for -- per ent of the ountrys manufaturing gross domesti produt /01$2. The auto setor is one of the biggest ,ob reators% both diretly and indiretly. It is estimated that every ,ob reated in an auto ompany leads to three to ve indiret anillary ,obs. Indias domesti market and its gro!th potential have been a big attration for many global automakers. India is presently the !orlds third largest e*porter of t!o)!heelers after China and 3apan. Aording 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,eted to sho! solid but autious gro!th due to improved a(ordability% rising inomes and untapped markets. 5ith the government’s baking% and trends in the international senario suh as the deline in pries of natural rubber% the Indian automobile industry is slated to !itness some ma,or gro!th.
Market size ) The umulative foreign diret investment /61I2 in7o!s into the Indian automobile industry during the period April -444 8 August -49+ !as reorded at S; 94%99<.=> million% as per data by 1epartment of Industrial $oliy and $romotion /1I$$2. 1ata from industry body Soiety of Indian Automobile Manufaturers /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% respetively. The three)!heeler segment posted a -+ per ent gro!th to 9%+=9 units on the bak of inreased demands from the urban market. Total sales aross di(erent vehile segments gre! 9- per ent year on year /y)o)y2 to
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India.
9%>=%9-? units. Sooter sales have ,umped by -< per ent in the on)going sal% and no! form -@ per ent of the total t!o)!heeler market from ,ust > per ent a deade bak. The ever)rising demand for sooters% !hih has far outstripped supply% has prompted Bonda to set up its rst dediated sooter plant in Ahmedabad. Trator sales in the ountry are e*peted to gro! at a ompound annual gro!th rate /CA02 of >8< per ent in the ne*t ve years making India a high)potential market for many international brands.
!nvestments ) To math prodution !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 setor in India are as follo!s: •
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Ashok Deyland plans to invest s +4844 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 loations aross the !orld% for !hih maintenane ape* is needed. Bonda Motors plans to set up the !orlds largest sooter plant in 0u,arat to roll out 9.- million units annually and ahieve 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 restrutured its business in India. Fo!% Eamaha Motor India /EMI2 !ill take are of its India operations. GThe restruturing is part of Eamaha’s mid)term plan aimed at improving organisational eHieny% as per Mr Biroyuki Su#uki% Chief J*eutive and Managing 1iretor. EMI !ould be responsible for orporate planning and strategy% business planning and business e*pansion% 'uality ontrol% and regional ontrol of Eamaha India &usiness.
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India. •
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Tata Motors plans to use the hub)and)spoke model in !hih India !ill be the key manufaturing base !hile it !ill have mini)hubs in overseas markets. The ompany also plans to set up mini hubs in potential markets like Afria% Middle)Jast and South Jast Asia. Bero Cyles through its unit K$M 0lobal has a'uired a ma,ority stake in 0erman biyle ompany Mitteldeutshe 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 restruturing the a'uired ompany.
"overnment !nitiatives ) The 0overnment of India enourages foreign investment in the automobile setor and allo!s 944 per ent 61I under the automati route. To boost manufaturing% the government had lo!ered e*ise duty on small ars% motoryles% sooters and ommerial vehiles to eight per ent from 9- per ent% on sports utility vehiles 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 deision 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 announing 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 aelerating and sustaining gro!th in this setor. 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 setor. The 0overnment of India) appointed SIAM and Automotive Components Manufaturers Assoiation /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 vehiles in the market. ABID SHAIKH
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India.
5ith the festival season oming up% the Indian auto setor !ill see a rise in demand !hih is e*peted 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 upoming festival season and deline in fuel prie% !ill observe a 9- per ent y)o)y gro!th in 6E9. Also% keeping up !ith international trends% there is e*peted to be a surge in the number of hybrid vehiles in the Indian auto setor in the years to ome.
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India.
Introduction: The automobile industry is faing ne! and pressing hallenges. 0lobali#ation% individuali#ation% digitali#ation and inreasing ompetition are pressing the fae of the industry. In addition% inreasing 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 suess. Knly those ompanies that nd ne! !ays to reate value !ill prosper in the future. &ased on this perspetive% some strategi methodology is needed !hih !ould enable them to transform themselves for the ompetition. The global automotive industry is sub,eted to a range of fators that are inreasing omple*ity and in7uening the eonomi options available to the automobile manufaturers. The ma,ority of these fators interats !ith one another and has strong interdependenies. Bo!ever% some of these fators are market) indued and onse'uently% annot be in7uened diretly by the automobile manufaturers. These fators inlude: •
•
"$oa$ization, regiona$ization and market convergence 8 1ue to the e(ets of liberali#ation% national markets are inreasingly getting globali#ed. This gives ompanies a hane to e*pand to ne! markets% but also inreases the threat of ne! entrants or inreased ompetition in traditional markets. !ncreasing$y diversi%ed consumer aggregate atterns o' ehaviour 8 Consumers are no longer aepting standardi#ed produts that satisfy their individual re'uirements. Target groups thus have to be do!nsi#ed by ompanies so ustomers !ill be attrated by the produts o(ered. Bo!ever% beause of the inreased global ompetition !ith a stronger fous on prie and not on brand loyalty% onsumers generally do not re!ard ompanies for their more
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India.
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individuali#ed produts. As a result of these fators% automobile manufaturers have ne! demanding re'uirements !ithin their eld of ativity. Acce$erated modi%cation and diversi%cation o' the roduct ort'o$io 8 These ompanies have to shorten produt lifeyles in order to reat to the e*petations of individuals and fast hanging onsumer demands !ith innovative produts. In the past% an average produt lifeyle in the automotive industry !as eight yearsO today% lifeyles are muh shorter% or at least the produt design is often modied after ,ust t!o or three years on the market. 5ith development osts for a ne! model remaining on the same level or even inreasing% this onurrently means a shortening of amorti#ation time for the KJM and potentially lo!er prots. Pervasion o' automoi$es (ith digita$ techno$ogy 8 In -44-% digital tehnology is ars averaged -- perent of the total value of a ar% !ith a foreasted inrease to ? perent of the total value in -494. The integration of hard!are and soft!are into automobiles represents the predominant aelerator of inreased funtionality oupled !ith inreasing omple*ity. This omple*ity results in overstrained ar development departments% produt failures% a ost e*plosion !ith respet to guarantee and !arranty osts% and an impat on ustomer satisfation. !ncreased ressure 'or innovation and )e*ii$ity in 8 1evelopment deve$oment and manu'acturing departments are not ,ust overburdened by the omple*ity of digital tehnology% but also by the shortening of produt lifeyles. Another aspet is the inreasing number of parallel development pro,ets sine ompanies develop more and more nihe models for speial target groups. This ertainly re'uires the use of ne! development tehni'ues suh as virtual reality. 6or e*ample% this tehni'ue enabled
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India.
&M5 to shorten the development of its P+ model to ,ust ?4 months.
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India.
Objectives: •
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To revie! the progress of Indian Automobile /$assenger vehiles2 To understand the marketing strategies of: Maruti Suzuki Hyundai Mahindra & Mahindra Toyota To assess their ompetitive strength.
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India.
Literature Review: +S -enugoa$ #ao ./0012 3/4 had onduted a study of marketing strategies for emerging markets. The !orld eonomi order is hanging and hanging very fast. Jmerging markets are harateri#ed by some uni'ue features !hih an be applied to all situations like mass dispersed marketsO penetration is abysmally lo! in key produt ategories. Jmergene of information tehnology% high)level of onspiuous onsumption% anti'uated rules and proedures% shift from a protetionist regime to a free market eonomy% a young and vibrant servies eonomy are harateristis 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 suh as Jastern Jurope% China% India and Datin Ameria. Corporations are 'uikly reali#ing that the loal onsumers do not reiproate !ith enthusiasm. 5hile failure is often attributed to market diHulties% more often it an be traed bak to the multinationals inability to reogni#e the fat that emerging markets are di(erent. Marketing i.e.% those that rely on produt innovation% ne segmentation% high margins and global brands do not neessarily !ork in emerging eonomies. Aording to Ahmadi, # & 5ang .78812 394 marketing strategy enompasses the strategy involved in the management of a given produt. A given rm may hold numerous produts in the marketplae% spanning numerous and sometimes !holly unrelated industries. Aordingly% a plan is re'uired in order to e(etively manage suh produts. Jvidently% a ompany needs to !eigh up and asertain ho! to utili#e its nite resoures. 6or e*ample% a start)up ar manufaturing rm !ould fae little suess should it attempt to rival Toyota% 6ord% Fissan% Chevrolet%
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India.
or any other large global ar maker. Moreover% a produt may be reahing the end of its life)yle. Thus% the issue of divesting% or a easing of prodution% may be made. Jah senario re'uires a uni'ue marketing strategy. Multinational ompanies in India: The beginnings of automotive industry in India an be traed during 9<+4’s. After the nation beame independent in the year 9<+@% the Indian 0overnment and the private setor launhed their e(orts to establish an automotive omponent manufaturing industry to meet the needs of the automobile industry. The gro!th of this segment !as ho!ever not so enouraging in the initial stage and through the 9<4’s and 9<=4’s on aount of nationali#ation ombined !ith the liense ra, that Audi% &M5% 6iat% 6ord Motors% 0eneral Motors% Bonda% Byundai% Toyota% Skoda% Mitsubishi Motors% Meredes) &en#% enault)Fissan entered into the Indian market. Bergen, M, Heide, :B .78882 3;4 Aording to
4. Many manufaturers entered the Indian market ultimately leading to the establishment of ne! ,oint venture ompanies. A number of foreign rms
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India.
initiated ,oint ventures !ith Indian ompanies. -, perent per annum. The tehnologial hanges and progress suessfully led to the progress of automobile setor in India. The main reason behind this tremendous progress is the eonomi liberali#ation by the Indian government. The Indian Automobile Industry is gro!ing in all respets and it is also serving as an important soure of employment. Innovation and ne! produt launhes are a ma,or fator driving gro!th in sales of ars. A !ide distribution N servie station net!ork is a key to
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India.
gro!th in India. The automobile setor is e*peted to !itness strong gro!th and improve its share in global markets too. Aording to <$arke !!!, ! & C(ens, M .78872 3/84 to over the high osts of produt development and the setting up of prodution failities to ater to loal demands% many global automobile giant manufaturing strategies is to assemble vehiles at sale eonomies and oRoad them to their franhise dealers. To keep ageny problems !ith their franhise dealers in hek% manufaturers implement the market)division strategy and the assoiated penalty system MFC’s manufaturing and distribution strategies partly ontribute to the e*istene of regional di(erenes in the priing and availability of spei models and speiations of vehiles. These neessary onditions allo! opportunisti parallel traders to engage in arbitrage.
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India.
Research Methodology: This omprehensive pro,et shall be purely based on seondary data and through that% it !ill try to study the di(erent strategies of four ma,or players in the Indian Automobile Industry /$assenger vehiles2% namely Maruti Suzuki, Hyundai, Mahindra & Mahindra and Toyota !hih have over @ perent of the entire market share of Indian passenger vehiles market. The purpose of the pro,et is to study their net!ork of dealers and servie entres% their e(etive promotional tehni'ues and their ustomer relationship management !hih is the mainstay of their produt line)up as !ell. The seondary researh shall be based upon data olleted from soures suh as maga#ines% ne!s artiles% ,ournals% blogs and others. They shall be e(etively studied to dra! onlusions about the ob,etives N to frame results and also to understand it as an industry as a !hole.
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India.
References: 9. +S -enugoa$ #ao ./0012 $rodut and &rand &uilding Strategies 8 A study of marketing strategies for emerging markets. !CS# ourna$s -. 5aseer Maharo6 .78882 $rodut 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. Handook o' #esearch on Strategy and >oresight "oog$e Books +. Bergen, M, Heide, :B .78882 Impliations of s!ithing or replaing produts or suppliers. !:#M -o$ume98 F; .78/92 . -, . Buck$in, P .7882 Competition and Jvolution in the 1istributive trades. Prentice Ha$$ Pu$ication <.
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India.
99.
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India.
ibliogra!hy: •
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Aaker, David and :oachimstha$er, E ./0002 The Dure of 0lobal branding strategy. Harvard Business #evie( .ovemerDecemer2J /9@/;; Agar(a$, Madhu ./00;2 evie! of a +4)year debate in international advertising strategy: $ratitioner and Aademiian perspetives to the standardi#ationadaptation issue. !nternationa$ Marketing #evie( /7./2J 71; Bodde(yn, :oan :, Soeh$, # and Picard, : ./012 Standardi#ation of International Marketing. Business Horizons 70.ovemerDecemer2J 10@= Ett$ie, :ohn .788/2 Three takes on F$1. Automotive Manu'acturing and Production .:une2 Merer Management Consulting Automoi$techno$ogie .78/82
Maro
Jhmer
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0lobal prodution summary by ountry.
ag Bis(ait, Saikat Baneree & #itt(ik T, e( De$hi S!AM .788;2 The Thailand N ASJAF India 6ree Trade Agreements 8 Impliations for the Indian Automotive Industry. 6ebruary. #amas(amy, -S & amakumari, S .78802 Marketing Management: 0lobal $erspetive. !ndian
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India. •
ee$amegham, S .78/72 Marketing India /+ th edition2% ikash $ubliation% Fe! 1elhi.
Tentative "ha!ter #lan:
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Title Abstrat Introdution Diterature evie! Industry Kvervie! Kb,etives Market 1esription S5KT Analysis S5KT J*planation Marketing Strategy.Maruti Suzuki, Hyundai, Mahindra & Mahindra, Toyota2 $ositioning $rodut Strategy $riing Strategy 1istribution Strategy Marketing Communiation Strategy Media Seletion Analysis of strategies esults 1isussions Conlusion eferenes &ibliography
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India.
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A Comparative Analysis of Marketing Strategies of Automobile Companies in India.
*+e Automobile industry , Industry of Industries. 3anuary -49
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