Maruti Udyog Limited – Mass Marketing the M800

Details

Case Code : CLMC-022
Publication date : 2005
Subject : Marketing Communications
Industry : -
Length : 03 Pages
Price : Rs. 100

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Key words:

Maruti Udyog Limited, Hyundai, Promotions, Tata, Santro, Teacher Plus, Maruti 800, State Bank of India, EMIs and ICICI Bank

Note

1: This caselet is intended for use only in class discussions.
2: More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.

 

Abstract:

This caselet illustrates the strategy followed by Maruti Udyog Limited (MUL), India’s largest car maker, when confronted with intense competition from foreign players. It highlights the promotional offers undertaken by MUL in its quest for market dominance. The caselet examines how the company aligned itself to the changing market requirements, through promotional offers, and reached out to potential customers. Finally, the caselet throws light on how MUL entered the pre-owned/used car market in India.

Issues:   » Role of direct marketing as a marketing communication tool      » Understanding consumer buying behavior through market research Introduction Maruti Udyog Limited (MUL) had been the market leader in the small car segment ever since its inception in the mid-80's. Its flagship brand the ' Maruti 800 ' has been a huge success and has become synonymous with cars in India. Consumers perceived the Maruti 800 as a 'value for money' car. It was the first 'Made in India' car to be exported to European and South American markets.

However, things changed in the 90’s with the entry of domestic as well as overseas companies into the automobile market, especially with the entry of Hyundai Motor India Ltd., the fully owned subsidiary of Hyundai Motor Co., Korea, and Tata Engineering of the Tata Group. Hyundai's 'Santro' model endorsed by popular actor Shah Rukh Khan proved to be a major success. This resulted in a sharp decline in the sales volumes of the Maruti 800.

Questions for Discussion:

1. What was the rationale behind Maruti opting for promotions like the '2599', ‘Teacher Plus', and 'Do Ka Chaar' offers? Do you think Maruti's sales promotion campaign was effective? Give reasons to support your answer.

2. According to an industry analyst, “If the customer could get a Santro or a WagonR for the price of an 800, why would he prefer the smaller car"? In light of this statement, how can Maruti differentiate its promotional campaigns between its new and pre-owned/used car markets?