Study of Marketing Mix of Hyundai Motors India Limited

MARKETING MANAGEMENT
INDIA LIMITED
MARKETING MIX OF HYUNDAI MOTORS
STUDY OF MARKETING MIX OF

HYUNDAI MOTORS INDIA LIMITED
MARKETING MIX
The success of any firm depends on marketing & the success of Marketing depends on
Marketing Strategies. Marketing Strategies are concerned with elements of Marketing

Mix. Therefore important of the study of Marketing Mix cannot be overemphasized.
MEANING OF MARKETING MIX

Marketing Mix means a set of policies pertaining to product, physical distribution, price
& promotion which are under the control of management & influence the reactions of the
consumers.
A set of Marketing tools that the firm uses to pursue its marketing objectives in the target
market. Kotler.
ELEMENTS OF MARKETING MIX:

According to Jerom Maccarthy, there are four elements of Marketing Mix.
Product
Price
Place (Physical Distribution)
Promotion
These are known as 4 Ps of Marketing Mix.
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NAVNIRMAN INSTITUTE OF MANAGEMENT
INDIA LIMITED
COMPANY PROFILE:
Hyundai Motor India Limited is a wholly owned subsidiary of the Hyundai Motor
Company in India.
It is the 2nd largest automobile manufacturer in India.
Hyundai Motor India Limited was formed in 6 May 1996 by the Hyundai Motor Company
of South Korea.
When Hyundai Motor Company entered the Indian Automobile Market in 1996 the
Hyundai brand was almost unknown throughout India. HMIL's first car, the Hyundai
Santro was launched in 23 September 1998 and was a runaway success.
Within a few months of its inception HMIL became the second largest automobile
manufacturer and the largest automobile exporter in India.
HMILs manufacturing plant near Chennai claims to have the most advanced production,
quality and testing capabilities in the country.
To cater to rising demand, HMIL commissioned its second plant in February 2008, which
produces an additional 300,000 units per annum, raising HMILs total production capacity
to 600,000 units per annum.
HMIL has set up a research and development facility in the cyber city of Hyderabad.
HMCs global export hub for compact cars, HMIL is the first automotive company in India
to achieve the export of 10 lakh cars in just over a decade.
HMIL currently exports cars to more than 120 countries across EU, Africa, Middle East,
Latin America, Asia and Australia. It has been the number one exporter of passenger cars
of the country for the sixth year in a row.
To support its growth and expansion plans, HMIL currently has a 307 strong dealer
network and 627 strong service points across India.
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INDIA LIMITED
HMIL presently markets 20 variants of passenger cars in six segments. The Santro in the B
segment, Getz Prime in the B+ segment, the Accent and Verna in the C segment, the
Elantra in the D segment, the Sonata Embera in the E segment and the Tucson in the SUV
segment.
SWOT ANALYSIS
STRENGTHS
The Quality Advantage: Hyundai owners experience fewer problems with their
vehicles than any other car manufacturer in India. The Santro was chosen the best
in the premium compact car segment and the Getz in the entry level mid - size car
segment across several parameters.
A Buying Experience like No Other: Hyundai has a sales network of 300+ state-ofthe-art showrooms across 200+ cities, with a workforce of over 10000 trained sales
personnel to guide our customers in finding the right car.
Quality Service across 620+ Cities: Hyundai scored the highest across all 7
parameters:
least
problems
experienced
with
vehicle
serviced,
highest
service quality, best in-service experience, best service delivery, best service advisor
experience, most user-friendly service and best service initiation experience.
WEAKNESS
Commodity Price Risks: Hyundai commodity price risks to higher costs due to
changes in prices of inputs such as steel, aluminum, plastics and rubber, which go
into the production of automobiles. In order to mitigate these risks, the company
continues to attempts to enter into long term contracts based on its projections of
prices.
Exchange Rate Risk: The Company is exposed to the risks associated with
fluctuations in foreign exchange rates mainly of import of components & raw
materials and export
of
vehicles. The company manages the exchange risk by
using appropriate hedge instruments depending on the prevailing market conditions

and the view on the currency.
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INDIA LIMITED
OPPORTUNITIES
Leading Growth: As the market leader, company led the growth in the passenger
car sector last year. Hyundai sales went up 30%.
Changing Life Style: As the life style of people in India is improving it offers an
opportunity to HMIL to increase its Growth on large scale.
THREATS
Risk Factors: In the course of its business, Hyundai is exposed to a variety of market
and other risks including the effects of demand dynamics, commodity prices,
currency exchange rates, interest rates, as well as risk associated with financial
issues, hazard events and specific assets risk.
Business Risks: The automotive industry is very capital intensive. Such investments
require a certain scale of operation to generate viable returns. These scales depend
on demand.
Competitors: Maruti Udyog Limited & Tata Motors Limited are great and potential
competitors of HMIL.
PRODUCT
According to Philip Kotler- A product means a set of attributes in the form of physical
product or services & ideas offered to the consumer for the satisfaction of his needs. It
includes physical product, services, ideas, personalities, places & organization.
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INDIA LIMITED
PRODUCT LEVELS
Potential Product
Augmented Product
Expected Product
Basic
Product
Co
re
There are 5 product levels as shown in the diagram.
I.
CORE BENEFIT: Core benefit from HMIL products is that they are used for
II.
travelling purpose.
BASIC PRODUCT: Basic product for HMIL is cars. HMIL provides all the basic
things which a car requires. Brand & looks of Hyundai products is satisfying the
III.
basic requirements.
EXPECTED PRODUCT: Hyundai cars are just beyond consumers expectation.
HMIL is famous for delivering high value to its consumers. All consumer
expectation from HMIL is fully satisfied by our products. Hyundai cars have decent
IV.
mileage & best quality engines.

AUGMENTED PRODUCT: Hyundai cars are always exceeding its consumer
expectations. It can be easily seen from its success in past decade. The success of i10,
i20 & santro proves that HMIL products are above consumer expectations. HMIL
provides all possible values to its consumer at best cost. We provide best after sales
service with help of 620+ service stations spread across the country.
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INDIA LIMITED
V.
POTENTIAL PRODUCT: Hyundai is well capable of delivering all augmentations it

is well seen in SUV class TUSCON. There are many upcoming projects of HMIL
which will increase consumer satisfaction.
PRODUCT CLASSIFICATION
A product may be classified on following basic criteria:
A. DURABILITY & TANGIBILITY: Hyundai Cars come under the category of
Tangible & Durable Goods.
B. CONSUMER-GOODS CLASSIFICATION: In this category it falls under Specialty
goods. Hyundai cars carry a brand value which is very much necessary to come in
this category. HMIL consumers find that they dont have to go too far to buy a
Hyundai car as its showrooms are available in almost each and every city.
C. INDUSTRIAL GOODS CLASSIFICATION: In this category it falls under the head
of Materials & Parts.
a) Raw Materials: The manufacturing process of HMIL cars require are
obtained from natural resources like iron, steel, coal, etc. this all products are
limited in supply and there are constant price changes in these goods.
b) Manufactured Materials & Parts: the component materials are iron, steel,
etc. while component parts like engine, tiers, etc. are directly bought from
other producers.
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INDIA LIMITED
PRODUCT LIFE CYCLE
1) INTRODUCTION: Our Company HMIL has crossed its introduction stage. But
now if it brings an new product to the market then it have to go through
introduction stage for that particular product. During this stage company adopted
Rapid-Penetration Strategy.
2) GROWTH: HMIL has also crossed its growth stage as Company showed great
growth during late 2000s. During this stage company adopted the marketing
strategy of increasing the quality of the product & added new features to it. In order
to attract price sensitive consumers company introduced Santro & i10.
3) MATURITY: HMIL is currently going through its Maturity stage. But due to its
new product introduction & new offers it is between Maturity & Growth. Its
constantly making efforts to enter new markets & constantly trying to increase its
demand.
4) DECLINE: HMIL may go in its decline stage if does not introduce new potential
products to the market. Many Hyundai Product like Hyundai Santro have faced this
stage & company has adopted Divestment Strategy.
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INDIA LIMITED
PACKAGING & LABELING

A. PACKAGEING: Packing is meant for protection & maintenance of the quality of
the product. HMIL provides best maintenance of its Cars. We use best
transportation service to transport our car to one place to another & thus it reaches
damage free to our consumer. Hyundai Itself is a big Brand name & logo of the
company is always there on its cars.
B. LABELING: The label of the company gives following information very clearly:
a) Brand name
b) Address of HMIL
c) Directions to use
d) Retail Price
e) Nature of product, etc.
Thus by labeling we are easily able to communicate our brand name & Product
information.
PRODUCT LINE
HMIL is just having one product line i.e. Cars. Our company produces cars of 6 different
segments as said above, satisfying almost each kind of consumer in the market. The reason
for close relation of our product is that it can be sold out through same distribution
channel.
PRODUCT MIX
A Product mix is the set of all products & items a seller particularly offers for sale. A
product mix consists of various product lines. HMIL have six product line shown in below
table.
The table given below shows the variety of cars sold by HMIL.
It also shows the segments in which it serves.
Segments/ Product line

B
B+
SUV
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INDIA LIMITED
Santro
Getz prime
Accent
I20
Sonata
Tucson
eon
I10
Verna
Elantra
Embera
Terracan
Santafe
Thus HMIL serves various segments with its huge variety of cars. It serves to all class of
people.
PRICE
PRICE is the element in the marketing mix that creates sales revenue, the other elements
are costs.- Philip Kotler.
OBJECTIVES OF PRICING
Pricing decisions are made keeping following things in mind.
1) EARNING OF REASONABLE RATE OF RETURN ON INVESTMENT: Hyundai
keeps its price according to best price provider view. But it also keeps it rate of
return in mind. Thus it is able to satisfy its stakeholder very easily. Company is
earning an stable rate of return.
2) MARKET PENETRATION: Company adopted this strategy by launching its
Santro & i10. Company was able to attract many consumers with help of market
penetration.
3) PRICE STABILITY: Price of a automotive company can never be stable due to
price of Raw-material required for its production, labor cost, Government policies,
etc. but then also Hyundai is almost able to maintain a stable price policy.
4) TO MAINTAIN OR IMPROVE THE MARKET SHARE: There is huge amount of
competition in the market. To survive in the market a company shall be best price
provider. Hyundai has many potential competitors to win market share over them it
needs to maintain its price very well.
5) TO COPE-UP WITH THE COMPETITION: As explained in above point we need
to maintain our price to survive in the competition.
6) MARKET SKIMMING: In market skimming there are certain consumers who are
prepared to pay higher price for one reason or another. Hyundai provides various
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INDIA LIMITED
reasons to its buyers so that they are willing to buy Hyundai cars instead of any
other car available in market.
7) PROFIT MAXIMISATION OBJECTIVE: The main objectives of a company are
profit maximization but for Hyundai its not always been the same. Due to potential
competitors it is never been possible for Hyundai to adopt profit maximization
policy. But still its earning reasonable amount of profit.
IMPORTANCE OF PRICE
Price of a product influence the price paid for the factors of production like labour, land,
capital & entrepreneurship.
Price of commodity is matter of concern for a buyer & a seller.
Price of goods is always been problem for every firm/company. Hyundai so far is able to
maintain its pricing policies.
FACTORS AFFECTING PRICING DECISIONS

Generally there are two type of factors that affect the price of commodity.
I.
INTERNAL FACTORS: These are factors within the organization.

i.
ORGANIZATIONAL FACTORS: There are no such reports about price
ii.
issue in Hyundai because of its management.

MARKETING MIX: The change in cost of any of other elements of
marketing mix may affect the price of product on huge amount. Till now in
India Hyundai is facing no problems regarding its labour cost & various
iii.
other cost like Marketing cost.

PRODUCT DIFFERNTIATION: Hyundai is very well able to differentiate
iv.
its price of products according to the quality they are providing.

COST OF PRODUCT: Cost & price of product are interdependent. If cost of
v.
anything related to product increases its price also increases.

OBJECTIVES OF THE FIRM: There are certain goals of every
organization in order to fulfill such goals sales is the basic revenue source, so
II.
it becomes very necessary for company to decide its price accordingly.

EXTERNAL FACTORS: These are factors which are beyond the control of the
organization.
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INDIA LIMITED
i.
DEMAND: Demand of the product affects its price on a huge scale. But
Hyundai is able to keep its demand high due to new features & Varity in its
ii.
products.
COMPETITION: Competitors price of similar kind of product also affect
the price of our product. Hyundai so far is able to give tough competition to
iii.
its competitors.
SUPPLIERS: Suppliers of raw material also affect the price of commodity.
Hyundai buys its best quality of Raw- Material from best suppliers in the
iv.
market.
ECONOMIC CONDITIONS: The inflationary & deflationary tendency
affects the pricing. During recession period in India Price of cars came down
v.
dramatically. It affected all automotive companies including Hyundai.

BUYERS: In India there is all kind of buyers. Hyundai provides goods
according to need & ability of buyers. They may buy Santro Or may buy
vi.
Tucson.
GOVERNMENT: Government Policies affect price of good on large scale.
The current budget in India has hiked the prices of Cars.
DISCRIMINATORY PRICING
Companies often adjust their basic price to accommodate differences in customers,
products, and so on. Price discrimination occurs when a company sells a product or service
at two prices that do not reflect a proportional difference in costs.
Hyundai is never been discriminatory in its pricing policy, so there is no point of discussion.
PRICE DISCOUNTS AND ALLOWANCES

Hyundai do provide its consumers price discounts and allowances.
CASH DISCOUNT: Hyundai do give its consumer an cash discount which keep on
changing according to the place & time.
QUANTITY DISCOUNT: Hyundai Also gives quantity discount to its consumers.
FUNCTIONAL DISCOUNT: Hyundai provides its consumers Functional Discount.
SEASONAL DISCOUNT: Hyundai gives seasonal discount like festive season
discount to consumers.
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INDIA LIMITED
ALLOWANCE: If any consumers do not want a feature then Hyundai Allows

certain allowances to him.
PLACE
A channel of distribution means a system consisting of different intermediaries through
which products or services are distributed from the place of manufacturer to the end
consumer. G.B.Gill.
FUNCTIONS OF DISTRIBUTION CHANNEL

Following are the functions of distribution channel.
I.
RESEARCH: Hyundai have always gathered information about its consumers &
II.
delivered products according to their needs. Santro was designed for better mileage.
PROMOTION: Hyundai is been promoting its product through various means like
III.
newspaper, TV, online promotion, etc.

NAGOTIATION: After consumer makes a decision to buy a Hyundai car its an
IV.
very simple and easy process of getting the ownership of the car.
ORDER PROCESSING: Order processing at HMIL is very fast due to huge
V.
VI.
capacity of 6 lakh units per annum.

FINANCING: As Hyundai is an MNC it have never faced financial crisis.
RISK TAKING: Higher the risk, Higher the reward. Hyundai is always been taking
VII.
risks but have always got huge rewards for it.

PHYSICAL DISTRIBUTION: Movement of product at HMIL is very rapid, due to
the demand of its products.
LEVELS OF DISTRIBUTION CHANNEL

Every organization needs to follow an level of distribution channel. HMIL is following onelevel distribution channel.
One-level channel contains one intermediary.
Hyundai sells its franchise to a local merchant who sell cars on behalf of Hyundai.
There are 200+ Hyundai merchants in India, selling Hyundai cars on behalf of Hyundai.
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INDIA LIMITED
TYPES OF INTERMEDIARIES
There are two type of Intermediaries.
I.
AGENT MIDDLEMEN: Broker of goods are persons who have no control over
the goods he just brings buyers and sellers together. Hyundai use brokers in its
distribution channel. Manufacturers agent are the agents of Manufacturer,
manufacturer hires them to sell his products. Hyundai also use Agents to sell its
II.
product in its distribution channel.

MERCHANT MIDDELMEN: In this case Hyundai have their Brokers & Agents
who sell cars on behalf of Hyundai getting the commission according to the
agreement between them. The merchants who buy the Franchise open the show
room with the brand name of Hyundai which helps them to sell Hyundai cars.
FACTORS AFFECTING CHOICE OF DISTRIBUTION CHANNEL

I.
MARKET CONSIDERATION
Hyundai have well considered the Indian Market and selected the
distribution channel. Hyundai has 1st tried to understand the nature of
Indian market and then have established its product in India.
Hyundai have many potential consumers in India.
Geographic concentration of Indian Market is un-even which have made
easy for Hyundai to establish its product.
Consumers in India are more price conscious thus Hyundai have made its
II.
III.
product according to that.

PRODUCT CONSIDERATION
Per unit sale value of the product is high thus it directly affects the
distribution channel.
As weight & size of cars is more it is send through trucks or trains.
It is not of perishable nature.
It is of technical nature & requires service.
The HMIL have narrow product line.
It is made according to consumer demand & need.
It is not an seasonal product, but its sales increases in festive season.
It is an standard product & HML have its copy rights.
It gives new product to market which are generally accepted by market.
It generally have an stable price.
COMPANY CONSIDERATION
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INDIA LIMITED
IV.
V.
Financial strength of HMIL is sound.

Reputation of HMIL is very high in market.
It is 2nd best company in India in its field, thus have good market control.
MIDDELMEN CONSIDERSTION
Hyundai have always found potential middlemen.
CONSUMER CONSIDERATION
Hyundai have designed its car according to consumers in India.
Consumers in India are price conscious & mileage conscious thus it have
designed its product accordingly.
MARKETING STRATEGY
These includes following things:
I.
TARGET MARKET: The target market for Hyundai is India & in India
consumers are of different kind so it becomes important for Hyundai to design
II.
its product accordingly.

PRODUCT ASSORTMENT: Hyundai have always designed its product
according to consumer needs & wants. Santro one of the best selling cars in
III.
India was designed according to Indian Market.

PROCUREMENT: It becomes necessary for any organization to procure
IV.
resources required by it to do day today operation.

SERVICES: After sale service is also one of the most important thing. Hyundai
V.
is very well able to deal with it.

STORE ATMOSPHERE: As Hyundai have large human force of over 10000+
employees who are well trained, the atmosphere of the store is always on positive
VI.
VII.
side.
PRICES: The price of cars of Hyundai is almost similar at every place.
COMMUNICATIONS: There is constant communication between consumer &
our company due to free services provided by us.

VIII. LOCATION: Location is the most important element of distribution channel.
Locations of Hyundai showrooms are perfect according to companys survey,
which helps us to reach each & every consumer.
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INDIA LIMITED
PHYSICAL ACTIVITIES INVOLVED IN DISTRIBUTION CHANNEL

Logistics involve planning, implementing & controlling the physical flows of materials &
final goods from point of origin to point of use to meet customer requirements at a profit.
Kotler.
It involves following steps:
I.
II.
ORDER PROCESSING:
Hyundai is trying to shorten the order-to-payment cycle, with its full
efforts. It has so far succeeded in doing so.
WAREHOUSING:
Hyundai showrooms across all India have great warehousing facility.
Hyundai does not keep much of stock in ware house & produce goods
according to the need.
Every Hyundai Showroom have each & every car available according to
III.
IV.
demand in that area.

INVENTORY MANAGEMENT:
Hyundai showrooms have well managed its inventory.
In each & every showroom there is no overstocking or no under stocking,
that have helped HMIL to reduce many related costs.
Every consumer gets his desired car when he wants it.
TRANSPORTATION:
Transportation of cars from manufacturing unit to showroom is done
through various means like trucks, trains, containers, etc.
Transportation does not take a long time in case of Hyundai that helps
Organization to increases consumer satisfaction.
PROMOTION
Marketing communications are the means by which firms attempt to inform, persuade &
remind consumers- directly or indirectly about the products & brands that they sell.
ELEMENTS OF PROMOTION MIX

I.
ADVERTISING: Hyundai is spending lots of money on its advertisements. With

help of these advertisements it is able to achieve incredible figures of sale.
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INDIA LIMITED
II.
SALES PROMOTION: Hyundai is constantly encouraging people to buy its
III.
cars, by offering various skims & bringing new variety.

EVENTS & EXPERIENCES: Hyundai is also sponsoring many other programs
IV.
to improve its reputation in the market.

PUBLIC RELATIONS & PUBLICITY: Hyundai is trying to maintain public
V.
relations & is performing its corporate social responsibilities very well.

DIRECT MARKETING: Hyundai is also doing direct marketing through mails,
VI.
web-sites, social networks, etc.

PERSONAL SELLING: Hyundai is not doing personal selling till now but is
willing to come to market through this way also.
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INDIA LIMITED
PROCESS OF EFFECTIVE COMMUNICATION
IDENTIFY THE
TARGET
AUDIENCE
DETERMINE
THE
COMMUNICATIO
NS OBJECTIVES
DESIGN THE
COMMUNICATIO
N
SELECT THE
COMMUNICATIO
N CHANNEL
ESTABLISH THE
TOTAL
MARKETING
COMMUNICATIO
NS BUDGET
DECIDE ON
MEDIA MIX
MEASURE THE
RESULT
MANAGING
INTEGRATED
MARKETING
COMMUNICATIO
N
STEP 1: IDENTIFY THE TARGET AUDIENCE

Before preparing any advertisement it is necessary to select the audience which is our
target. We have to learn about behavioral science and have to prepare add according to the
target audience. HMIL target audience is Indians, so they have prepared there adds
accordingly. Hyundai have very well understood the Indian audience.
STEP 2: DETERMINETHE COMMUNICATIONS OBJECTIVES
We need to identify what are our objectives of making an add. Weather it is for new
product or for brand awareness or for brand attitude or for brand purchase intention is
needed to be determined 1st. Generally Hyundai ads are promoting new products or cars in
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INDIA LIMITED
market. As peoples attitude towards Hyundai brand is positive, there is no need to

promote it more.
STEP 3: DESIGN THE COMMUNICATION
Formulating the communications to achieve the desired response will require solving three
problems:
What to say?
How to say?
Who should say?
What to say? (Message strategy)
This gives us idea about what we want to convey to our consumer. In Hyundai ads we can
see that there are generally talk about its comfort & class. In our ads we show the extra
features that we provide to our consumers.
How to say? (Creative strategy)
This tells us how we represent what we want to say to our consumers. In Hyundai ads we
will observe that there is lot of creativity.
Who should say?
Now we decide who will convey our message. In Hyundai ads we will find that Shahrukh
Khan & many such actors who promote our cars.
STEP 4: SELECT THE COMMUNICATION CHANNEL
Now we decide what communication channel we will use.
Our company uses Non-personal communication channel. We give ads in newspapers, TV,
website, etc.
STEP 5: ESTABLISH THE TOTAL MARKETING COMMUNICATIONS BUDGET
Automobile companies typically budget a fixed percentage for promotion based activities.
Hyundai uses Percentage of Sales method to decide its marketing expense. We give 7% of
our total turnover to advertisement expense.
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INDIA LIMITED
STEP 6: DECIDE ON MEDIA MIX

We have allocated properly among our- advertising, sales promotion, public relations &
publicity, events & experiences, sales force & direct marketing. To have successful
marketing strategy every organization needs allocate resources in proper way in above
mentioned items.
STEP 7: MEASURE THE RESULT
Here we need to measure the results of our efforts and expense. Hyundai have performed
well in this field. The results of these efforts are positive.
STEP 8: MANAGING INTEGRATED MARKETING COMMUNICATION
Here we take the corrective steps in our marketing process. Hyundai is also taking such
steps to improve its marketing strategy.
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MARKETING MANAGEMENT

MARKETING MIX OF HYUNDAI MOTORS