1. Marketing Audit Management and Benefits Group 10

2. Internal Audit (Initially) Internal Audit Confined to Finance & Accounting areas Opportunity to enhance scope – Commercial Areas Advantages i.Improved operational efficiency ii.Cost effectiveness iii.Better Profits

3. Marketing Audit Definition (Marketing Management - Philip Kotler – 8 th Edition) “A marketing audit is a Comprehensive, Systematic, Independent & Periodic examination of a company’s marketing environment, objectives, strategies & activities with a view to determining problem areas & opportunities & recommending a plan of action to improve the company’s marketing performance.”

4. Planning Unit ANALYSE ORGANISATION Research Unit Mission Goals Culture Strengths Weakness MAPPING ENVIRONMENT -Political - Technological -Economic - Cultural ORGANISATIONAL OBJECTIVES MARKETING AUDIT Publics & Markets,competition Primary, Secondary -Diffusion -Buyer Behavior Set Marketing Mission, Goals Develop Core Marketing (STP) Marketing Mix Design SystemsImplement Assess Performance Compare Determine Performance Benchmarks Design Generic Products Managing Cost of Buying Channel Management Promotion – Mass, Personal, Selective

5. Auto Industry Overview 1897 - First Car ran on Indian Roads Until 1930 - Cars directly imported Auto industry emerged in 1940’s 1953 – the Government of India and the private sector launched efforts to create an automotive component manufacturing industry Slow growth of economy from 1950 - 1980

6. 1970 – 1980, the growth accelerated 1980 – 1985, entry of foreign players 1985 – 1990, entry of Maruti Udyog Ltd 1988 onwards - triumph of liberalization

7. Situation in 1990 Static Domestic market for our vehicles Resulted in the need for Marketing Audit Visit to 19 dealerships + other automotive dealerships & Institutional & Pvt Customers

8. Need for Marketing Audit Fierce competition Survival of the fittest phenomenon looms large Restructuring of Marketing departments as per environment Top management needs information for review & control purposes Hence, auditors need to acquire necessary skills

9. Methodology Step 1 – Selection of a proper team of internal auditors. Step 2 – Scanning the available information within the organization. Step 3 – Discussions with various levels of different functions. Step 4 – Develop questionnaires for data collection from various branches. Step 5 – Field Work.

10. Marketing – Environment Audit A) Macro- environment –Demographic –Economic –Technological –Political –Cultural

11. YearGrowth (%) 1984-8518.5 1985-8617.7 1986-8717.4 1987-8823.3 1988-8940.8 1. Markets Rural Market Growth B)Task Environment

12. % growth over previous 19871988198919881989 All cars151243 15927 9 1774095.311.38 Only Maruti92669 10650 9 212.67 Other Cars58574647047085010.479.5 Market Growth of Cars

13. % growth over previous 19871988198919881989 7929585518953029.2211.32 Growth in Tractor Market

14. 2. Competitors (Jeeps) EnterpriseFormGenericDesire Maruti (Gypsy) Hindustan Motors Premier Automobiles Ltd. Telco Two wheeler manufactures - (Bajaj Auto, Kinetic Honda), LCV( Ashok Leyland, Japanese LCVs) Any other mode of transportation (people and goods) Do not want to buy a vehicle

15. Competitors (Maruti) Strategies used by Maruti –Handouts for dealer circulation emphasizing on negative features of Jeep –Profile of potential buyers –Merits of Gypsy over Jeep –Dealer’s guidance – list of government employees

16. Publics Employees Government Suppliers Distributors and dealers Facilitators Competitors Customers 3. Publics

17. Marketing – Strategy Audit Segmentation done on basis of product – – CJ – Rural rich, opinion leaders, village level politicians, farmers – CJ 540 DP – Largely authorised/ unauthorized taxis – MM 540 DP – Higher class rural rich, politicians, entrepreneurs, liquor merchants etc. – CJ 340 DP – Younger generation, farmhouse owners Segments clearly defined. Positioned itself as rugged, sturdy, multipurpose vehicle.

18. MM 540 CJ 340 CJ 540 CJ

19. Marketing – Organization Audit Functional Efficiency o Training to sales personnel's o Supervision of distributors o Strict actions against irresponsible dealers o Lack of internal communication (marketing – dealers – customers)

20. Organization Audit – Interface Efficiency Marketing & manufacturing – o Does not enjoy enviable status o Uncomfortable drive & ride o Old technology o Higher maintenance cost Finance o Low resale value o Jeep financing treated as a low priority area o No particular finance company exclusively providing finance for M&M

21. Marketing – Organization Audit R & D o Improving the quality of product o Finding out the acceptance of the product after Gypsy penetration o Analyzing on the weaknesses of Gypsy & improvising them as an opportunity

22. Marketing - Systems Audit  The marketing team should regularly interact with customers  Communication between the marketing team and dealers  Product development and new product ideas from customers and dealers

23. Marketing - Productivity Audit  The last TV ad campaign did not generate enquiries  Entry into car market: Same perception/ New perception

24. Marketing - Function Audits Products CJ, CJ-540DP, MM540DP & CJ-340DP Attitude towards products To add MD-2340 engine in CJ XD 4.90 petrol engine in CJ- 340DP Some cosmetic changes Competitors product and strategy

25. Price Efficiency of Diesel offset by high maintenance cost Price higher than LCVs

26. Distribution Current Distribution strategy Inefficiency of Dealers

27. Advertising, Sales promotion & publicity  Current advertising strategy o Merits of Jeep over Gypsy o Japanese monk’s testimonial ad in newspaper o Failures/problems faced experienced by Gypsy owners. o Change of TV campaign from usage to the reliability & elegance of Jeep. o Housewives as influencing factor should be considered for advertising & promotional strategy. Learning from Rajdoot

28. Sales force Team to visit the place in north-east propagating the benefits of CJ-340DP

29. Marketing – General Advertising Strategies o Inclusion of Jeep as a product with major ancillary advertisers o Customer & employee interaction with the product – Contest of naming the Jeep Models o Discreet campaign emphasizing on the fact of Maruti using foreign exchange.

30. Marketing – General Advertising Strategies o Association with tyre company – MRF in demonstrations/melas. o Less frequency of price revisions to get a psychological advantage over its customers. o Strict action against irresponsible dealers. o Direct mail campaign to government institutes.

31. Report highlights Product Image of Jeeps Perceived as Multipurpose vehicle Easy Maintenance Economy (diesel) Positive Attributes Not a status symbol Uncomfortable drive & ride Old Technology Lower resale value High Maintenance cost reduces diesel advantage Negative Attributes

32. Problems highlighted by the Audit BRAND IMAGE (Rural, Urban & NE) i.Mismatch in Image creation & message - Customer perception & product attributes ii.Not a status symbol iii.No suitable campaign iv.Fashion consciousness in NE

33. Likely Strategies Frequent Communications Tying up with Ancillary Suppliers for advertising Image building product names Demonstration by political/opinion/ local leaders in melas & hatts Proper Catalogue with product specifications Publicity through reviews of influential people

34. Problems related to Excise &Rural Financing High excise duty on passenger vehicles High vehicle cost No financial assistance by Company Low resale value Jeep financing treated as low priority area by banks Frequent Price revisions

35. Likely Strategies Position Jeep as ‘All Purpose Rural Product’ Excise duty reduction Start their own vehicle financing wing Exchange offers

36. Problems in North East Drop in market share due to gypsy penetration Familiarity of mechanics with petrol engine State government not urging for dieselisation Domination of Gypsy in Calcutta & adjoining areas Availability of Funds

37. Likely Strategies Training / Demonstration to Local mechanics Expediting production of XD 4.90 Petrol engine Educating the people about the positives of Jeeps Propose dieselization to the State Govt

38. Problems in Dealership Network Territorial infringement Dependence on few dealers No concentration on - Sale of services Spare parts Civilian markets

39. Likely Strategies Encourage them to concentrate on service & sale of spare parts Tap civilian markets Extensive dealership network

40. Analysis LACK OF CONSISTENCIES- 1.Between the elements of Marketing Mix 2.Between the elements of Marketing Mix & Market

41. Suggestions / Recommendations Rural Market Expansion Strategies to be stressed upon: 1.Customization Services 2.Free servicing 3.Exchange offers 4.Using Jeeps for Election Campaigns