Maruti Suzuki and Tata Motors Companies' Analysis | Free Essay Example

Maruti Suzuki and Tata Motors Companies’ Analysis

Words: 1393
Topic: Business & Economics
Updated:

Promotional strategies of Maruti Suzuki India

Every organization needs promotional strategies and approaches as they have a huge impact on the reception of the product. In this case, Maruti Suzuki India Ltd has unique products that must be aggressively promoted in order to beat the tough competition in the automobile industry (Roy, 2013). Given that the Indian customer is sensitive when it comes to prices, in times of declines in the economy, the company usually reduces the prices of its major brands such as Wagon R, Maruti 800 and Omni in order to avoid disfranchising its prospective clients (Srivastava, Negi, Mishra, & Pandey, 2012). In order to attract more customers, the company uses a number of customer-centered promotional strategies such as offering insurance at only one Indian rupee, attractive campaigns such as “change your life” and promotion of road safety and efficient driving both in towns and rural areas.

Tata motors limited is also one of the leading automobile companies in India. Its promotional strategies are somewhat different from those adopted by Maruti Suzuki India Ltd. Tata motors mainly uses corporate social responsibility programs to promote its brands (Srivastava, Negi, Mishra, & Pandey, 2012). In fact, Tata motors Ltd. uses on average between eight to fourteen percent of its returns for various social causes every year. Some of these welfare programs include Self-Help Groups, immunization and childcare, facilitation of child education, plantation activities, and facilitation of AIDS awareness.

How Maruti Suzuki can differentiate from competitors using marketing information

There are two ways that Maruti Suzuki Ltd can use marketing information to differentiate itself in market and gain competitive advantage: knowing how to position itself relative to positional approaches of competitors and second, enhancing the turnaround strategies (Freiberg, Freiberg, & Dunston, 2011). In the case of positioning, marketing information will help Maruti Suzuki Ltd to know how its major competitors are positioned in order to strategize how tackle them. For instance, it would know that Tata Motors has many brands which offer clients a wide range of options (Freiberg, Freiberg, & Dunston, 2011). In addition, most potential clients like to be identified with Tata motors because it emphasizes the delivery of unique, world class quality.

For instance, they have managed to redefine the market for small cars not just in India, but also globally. In addition, since the time of price wars, today pricing is based on value perceptions of customers. With this, prices of automobiles in the Indian market are not determined by price points but price bands. In other words, the better the product, the higher the end-user demand which translates into the wider price band (Roy, 2013). Therefore, knowing this would help Maruti to come up with models that beat competitors’ market hype. Some of these would include producing cars that are unique and tailored to satisfy specific needs of consumers.

In terms of enhancing the turnaround strategies, the marketplace is volatile and bound to change anytime for better or worse. Therefore, a company that is prepared in advance is likely to stay ahead of competition (Freiberg, Freiberg, & Dunston, 2011). For instance, since the 1980s-1990s, Maruti was the leading automobile company in India controlling more than eighty percent of the market. However, in the last decade, the industry has changed with the emergence of other players both local and international. This resulted in reduced profits for the company. In the wake of reducing returns as well as loss of market share, the company would have used market information to initiated strategic responses in order to deal with the process of liberalization in India and start to redesign and differentiate to confront competition in the market (Srivastava, Negi, Mishra, & Pandey, 2012). For instance, its earlier approach was majorly to produce and sell what they produced, with understanding of the market trends, the focus of the company would shift to the end user.

Consumer oriented Promotions

Maruti Suzuki Ltd could use value-added promotions. Some of the examples of these are a free instructional course mainly with every vehicle purchase, free trials and complementary training (Baye & Nelson, 2001). These practices are known to build consumer retention as end users value the effort made by the company. Unlike short term undertakings such as discounts and coupons, with training and even free trails, the company can easily build a strong bond with prospective clients that have long-term impacts with promotional aspects that inject value to the end user purchase (Kurtz & Boone, 2011). In short, these aspects can help the company to develop a long-term strategy that creates customer confidence and boost the identity of the brand.

Another customer oriented promotion is offering regular discounts (Roy, 2013). Marketing promotions and regular sales can impact the bottom line of a company in both the short term and the long term. Discounts in the case of Maruti could comprise things such as additional spare parts or after sale service and insurance cover. Therefore, when planning or drafting an annual budget, Maruti should always factor in planned promotions as a way of attracting extra sales (Shimp, 2010). In short, customer-oriented promotions, in both short and long term, can play a vital role in enhancing company returns.

Pricing strategies of Maruti Suzuki Ltd

The main pricing objective of Maruti is catering to all segments. To fulfill this objective, the company has offered its products at nearly price points. For instance, it has a car selling at the lowest price in industry which is about 1.88 million rupees. This is the lowest price or offer on the Indian road (Baye & Nelson, 2001). Their pricing objective is to give an alternative to end users who are looking up for a good car but a cost effective price. In fact, the reason why they have so many products on offer is to cater to every segment or different end user demand in India. Furthermore, some brands are offered in different variants and prices just to ensure that clients, who want a certain brand but cannot afford the price, can still get it but in a different variant. The table below shows how Maruti prices its brands.

SI. no Brand Variants Prices (Rupees)
1 GRAND VITARA XL7 16, 90,000
2 MARUTI VERSA DX 4, 19, 000
3 MARUTI WAGON-R LX 3, 35,000
LXi 3,65, 000
4 MARUTI OMNI Cargo 2, 05, 000
Cargo LPG 1,83, 000
5 seater 2,27,000
8 Seater 2,21, 000

Source: Author

The main reason for introducing variants is that they are based on consumer perception and competitiveness in the industry. For instance, Tata motors offer some of its cars in a range of 2, 50,000 to 3, 80,000 rupees with different variants (Freiberg, Freiberg, & Dunston, 2011). Therefore, offering something outside this range would have been suicidal for Maruti.

The best advertising Medium

In the automobile industry, magazines are a better platform to catch the attention of readers or prospective clients (O’Guinn, Allen, & Semen, 2012). Auto magazines are usually attractive and appeal more to auto lovers than news papers and other advertising platforms. The style used by readers of auto magazines is very different from the styled used to read general news papers. They usually read through them in a more careful and keen way. The added advantage with auto magazines is that they are not loaded with adverts so readers do not have any difficulty spotting fine details of adverts.

Magazines have a number of advantages in terms of direct response advertising. They work well particularly in the context where companies are targeting a specific audience (Baye & Nelson, 2001). Magazine adverts can also be used in business to business advertising. This is particularly in trade-specific issues or publications that cater to specific industries (Baye & Nelson, 2001). However, just like any other advertising medium, Maruti should not be fast on buying an extensive advertising space in a general business magazine. Because the company needs to select a magazine that enables them to specifically reach their target audience without any extra cost.

Maruti Suzuki India Ltd started its operation in the 1980s and rose to become a leader in the Indian automobile industry. Maruti succeeded because of its unique style of marketing and promoting business. Tata motors ltd on the other hand, is an Indian based company that uses CSR to position its offerings. This strategy is different from what Maruti uses-customer-oriented promotional approaches.

References

Baye, M., & Nelson, J. (2001). Advertising and differentiated products. Amsterdam, Netherlands: JAI Press.

Freiberg, K., Freiberg, J., & Dunston, D. (2011). Nanovation: how a little car can teach the world to think big and act bold. Nashville, TN: Thomas Nelson.

O’Guinn, T., Allen, C., & Semen, R. (2012). Advertising and integrated brand promotion. Mason, OH: Cengage Learning.

Roy, S. (2013). Small and Medium Enterprises in India. New York, NY: Routledge.

Shimp, T. (2010). Advertising, promotion, and other aspects of integrated marketing communications. Mason, OH: Cengage Learning.

Srivastava, A., Negi, G., Mishra, V., & Pandey, S. (2012). Corporate Social Responsibility: A Case Study of Tata Group. IOSR Journal of Business and Management, 3 (5), 17-27.