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Solution
Assignment
MARUTI
SUZUKI INDIA: DEFENDING MARKET LEADERSHIP IN THE
A-SEGMENT
Introduction
There be description of data in descriptive
statistics like graph or chart and predictions are drawn with the help of
inferential statistics. Samples from data are used to make generalizations
about population. There are statistical methods like t-tests, ANOVA, and so on (To, 2019) . The present
research uses data for Maruti Suzuki India Ltd.
Problem statement
From 2008 to 2013, the company MSIL had to face
competition in the A-segment; there were cars like Tata Nano. The marketplace
distribute of MSIL declined to forty nine percent from sixty one percent. The
company requires reconsideration of plan to continue its place in the marketplace.
MSIL and decline in market share
The MSIL is auxiliary to Suzuki Motor Corporation
Japan and conquered the automotive business in India. There was obvious
headship of the company in the “A-segment” in 1983 since its inception. The
Indian market was mainly divided into four segments like sport utility, hatch,
sedan and van. There are four parts of the hatch sector like the mid-size
produce, entry produce, and premium produce. From 2008 to 2013, the company had
to face competition in the A-segment; there were cars like Hyundai Eon, Tata
Nano, Honda Brio, and so on. The marketplace allocate of MSIL declined to forty
nine percent from sixty one percent. There were estimates that the automotive
industry is likely to raise to 4.7 million units of yearly sales from 2017-18.
This was a continued decline of market share for MSIL in A-Segment. The
competitive advantage of the company was jeopardized in the industry. The
company required re-evaluation of policy to maintain its place in the sell. We can see sales of
passenger cars in India in exhibit 2 (Conole, 2017) .
Market share for MSIL
To make future plans, MSIL used the findings of
different macroeconomic studies. There is a research department which presented
material related to marketing, forecast, and official sectors. The company
stated its own examine for struggle, dealership fitness, market potential,
trades figures, consumer perceptions, and so on. The data revealed that there
was major prospect in the Indian automotive or commuter car market in variety
gross domestic product or GDP. The income was rising; there were more credit
amenities and networks, and little car diffusion. The figures were eighteen car
owners every thousand people. This number was about two hundred every one
thousand on china and Brazil. The global manufacturers like Ford, Toyota, General
motors’ offered only SUVs and Sedan cars in the beginning but they produced in
the A-section which is usually the most solid cars as compared to the global
records of those companies. The majority of the solid cars were included in category
of quality emerge segments; and there is a higher competition in this sector.
The segments are also facilitated with several consumer promotions and high
profile advertisements from the car makers. This helped enhance the market.
This is the reason why the A-segment has become very aggressive for the deep
rooted players like MSIL, Tata motors, and Hyundai. For the mid hatch and entry
hatch segments, stakes also increased in the competitions. As more
international companies are coming to Indian market, the competition is
expected to increase. The exhibit 3 shows market share prominence of main car
producers in India year wise (Conole, 2017) .
Sale figures
In Indian market, lower segment cars were in increased
abundance because of luxury features like power steering, air conditioner,
power windows, and so on. These features were for the produce section in 2009.
The features turned into a usual in 2012-13 for emerge models. There were
certain features in the sedan sector in 2008 like electric or auto foldable
windows, touch screen radio, and so on; these features were average in the
entire sedan segment by 2012-13. There was a complex yearly expansion pace CAGR
of twenty two percent in the used car sale of India. This was a major growth
from volume of one million components to 2.6 million unites by 2007. There was
a projection that market would grow at a rate of twenty two to twenty four
percent by 2012. Small cars occupied sixty seven percent of space in the sale
of used cars in India from 2011-12. By 2016, the ratio of new car sales as
compared to used cars was estimated to increase by 1:1.8; this ratio was 1:1.3
in 2011-12. As compared to developed markets, this ratio of Indian market us
lower i.e. 1:3. Hyundai is the greatest competitor of the MSIL in terms of
aggressive tactics, appropriate price, broad product range, and attractive
promotions. The product range includes Eon, i10 and i20. These vehicles were
designed to fulfill ever changing demands of the consumers in Indian market. In
premium car segment, Hyundai has competitive advantage over MSIL because of the
product like the Verna. This improved the potential profits and brand image of
Hyundai. A different sort of competition was posed by Tata Company to MSIL. The
Tata brand name is believed across the nation and had reputable image in the
automotive industry. Many consumers of the A-segment have experience of the Tata
buses and they knew about the durability and robustness of the vehicles. Indica
was a vehicle developed by Tata and gave it an opportunity to enter the hatch
market. There was spacious interior, required cheaper cost for operating, and
preferable for long distance and short distance travel. In the taxi segment and
customers who utilized vehicles for their dealings the car was very popular.
Another original produce was Tata’s Nano which was a popular and high profile
launch. This vehicle intended to bridge the gap among opening level A-section
car and two wheeled means of transportation. Frugal engineering methodology was
used to design the vehicle to make it affordable and a substitute to two
wheeled vehicles. The selling points were tremendous, but the invention was not
received in the Indian marketplace, as the retailing form exhibit 4. There are
explanations and sales figures for Tata Nano. The main reason for fall in sales
were security reasons and “pay first, drive later” form for booking which was
not adequate for potential consumers. The lack of down payment option and free
guarantee for four years was the major reason for increasing sales. The sale
figures contain record from July 2009 to January 2013 (Conole, 2017) . 
Consumer basis for MSIL and A-segment
The consumer basis was A-segment was increasing
as compared to the past when only high income consumers were able to buy cars.
From 2000 to 2010 this tendency was changed and the threshold yearly income for
consumers wanted to have entry level car was reduced to 300,000 from 600,000.
The younger consumers were more likely to purchase vehicles and the market
growth was facilitated by credit and financial easiness. About eighty five
percent of the mid hatch and entry section was backed and the outline reduced
to seventy percent. The rural financing was sixty percent mainly because of
lack of credit mechanism. We can see figure 6. There is a report of existing A-section
customers in India (Conole, 2017) .
Brand Image
In major fifty cities of India, the brand related
associations and brand image play major role in buying decisions. Apart from
the functional utility and value of product, status and lifestyle factors have
a major impact on purchase decisions. There are certain psychological needs which fulfill
consumer needs and thus consumers buy those brands as we see in exhibit 7. The
table shows reasons for purchase of brands like Ford, Tata, Hyundai, Nissan,
Chevrolet, Fiat, Skoda, Volkswagen, Mahindra, and so on. Consumers bought
brands mostly because of the reliability and reputation of brand,
recommendations from friends or family members, and prior experience with the
brand (Conole, 2017) .
Classification of consumers
It was a key challenge for car manufactures to
enhance brand equity, and huge investments were made in the advertising
section. The variations based on geography were a major factor like in twenty
cities the percentage of women buyers was increasing. This trend shows
acceptance of automatic transmission in Indian market. This factor has led to
increased traffic congestion in major cities and more convenience in terms of
vehicles usage. With the changing lifestyle of consumers, there were openings
of solid SUVs and MUVs like the maruti Suzuki Ertiga and Renault Duster. There
was classification of consumers based on their situation for purchase like
first time consumers were those who had no previous know-how of purchasing or
use of a car of their own. These consumers preferred entry level hatch and a
small number bought mid level produce automobile. The second faction of
consumers preferred mid and entry level produce automobile and they had used
their own cars and buying additional vehicle. A set of consumers own car and
intend to replace vehicle usually upgraded premium hatch like sedans, SUVs, and
so on. The exhibit 10 shows
incentive for A-section cars bought from maruti Suzuki (Conole, 2017) .
Sales Tendency
Across the value chain, MSIL retained economies of scale. For
each unit overheads, unprocessed materials logistics and procurement costs were
reduced by higher sales volumes. The efficiency of product was improved. For
instance; for each unit, publicity costs were lowly in the business because of
high sales of MSIL. Even though, Suzuki was a major stakeholder as it was in
Indian brand name, but it lacked the technology and status several
multinational companies were benefited from. For MSIL, there was an influence of
word of mouth as compared to its competitors. The machinery proposals for the
diesel and patrol automobiles were totally different, and decided by the
product planning team. The
fuel preference is an important factor in the industry and mark changing trends
as depicted in exhibit 11. The figure shows sales tendency for diesel and
petrol automobiles (Conole, 2017) .
Analysis of Data
On behalf of
A-segment target, the data shows that entry level produce customers are typically
first time purchasers, they are conscious about price, and fuel efficiency. The
income is about 300,000 to 500,000 per year and age range is 30-34 with family
unit of one or two children. These consumers favor second-hand car and believe
that car is a basic family need. The entry level consumers feels satisfied with
basic car features and own a motorcycle which is used in addition with car.
These consumers had a long history with MSIL and had a yearning to buy one
since childhood. The mid level hatch consumers are additional and first time
car buyers who want to improve to an expensive product, they have annual income
of 400,000 to 800,000, age range 25-30 and usually unmarried or married with no
children. This sort of consumers use vehicle for fun and status symbol. They
are brand conscious. They believe that MSIL is good brand and perceive it as
reputable. The premium hatch consumers have their own car for at least 3 years
and need additional vehicle or an improved one. A yearly profit for this
category of buyer ranges from 400,000 to one million; age array is 30-45 years
and belongs to nuclear family. These consumers are brand conscious and employed
as managerial staff. They use international brands as status symbol.
Ethics of analyzing data
In the secondary research, existing data is used
to draw conclusions and make plans. There is a need to identify data before
using it to make suggestions. The design of the study should be for public
good. The consent of the subjects of study should be considered. There should
be no damage or stress in usage of data. These are some of the ethical
considerations which can improve research procedure (TRIPATHY,
2013) .
Conclusion and recommendations
The MSIL is supplementary of Suzuki Motor
Corporation Japan and conquered the automotive manufacturing in India. There
was clear control of the company in the “A-segment” in 1983 since its
beginning. The Indian marketplace was mainly separated into four segments like
sport utility, hatch, sedan and van. There are four parts of the hatch sector
like the mid size hatch, entry hatch, and premium hatch. From 2008 to 2013, the
company had to face competition in the A-segment; there were cars like Tata
Nano, Hyundai Eon, Honda Brio, and so on. The marketplace distribute of MSIL
declined to forty nine percent from sixty one percent. There were estimates
that the automotive industry is likely to grow to 4.7 million units of annual
sales from 2017-18. This was a continued decline of market share for MSIL in
A-Segment. The competitive advantage of the company was jeopardized in the
industry. The company required reconsideration of plan to continue its place in
the marketplace. The research presented figures and made inferences to use in
the planning phase. The market position, market share, brand image, diesel fuel
adjustment, marketing and other factors were considered to make an appropriate
strategy for MSIL to sustain its ruling status in the automotive industry of India.
There are specific needs of consumers from different age groups, social class,
and so on. If the company wants to maintain its current market position, it has
to focus on preferences of consumers like advanced technological features,
previous record of sales, and so on. The company needs to maintain its loyalty
to consumers by making premium products. The classification of consumers can
help the company review its policies to attract specific group of consumers
like first time buyers, and so on.
Works Cited
Conole, L. (2017). MARUTI SUZUKI INDIA: DEFENDING
MARKET LEADERSHIP IN THE A-SEGMENT. Business Research , 1-14.
To, S.
H. (2019). What is Inferential Statistics? Retrieved from
https://www.statisticshowto.datasciencecentral.com/inferential-statistics/
TRIPATHY,
J. P. (2013). Secondary Data Analysis: Ethical Issues and Challenges. Iran
J Public Health , 1478-79.
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