Maruti Udyog Limited - The Pricing Dilemma

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:


Case Code : MKTG100 For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges


Case Length : 15 Pages
Period : 1995-2004
Pub Date : 2005
Teaching Note : Not Available
Organization : Maruti
Industry : Passenger Car
Countries : India


The case highlights the pricing strategy of Maruti Udyog Limited (MUL), the market leader in the Indian passenger car industry. MUL has launched various models catering to all market segments at various price points.

The case provides a brief note on the various models of MUL, their prices and their features. It specifically focuses on the competition between two of MUL's best selling models - the M800 and Alto.

MUL reduced the price difference between these two models positioning them on an almost equal platform, which resulted in confusion in the minds of consumers and industry analysts.

M800 had ruled the passenger car market as the only car in the entry-level segment in the Indian automobile industry and was now facing the danger of cannibalization from one of its own family members, Alto. The case highlights the pricing dilemma faced by MUL and leads to a debate on the right pricing strategy for the company and the future of its flagship product M800.


The case is so structured to enable the students to:

• Gain insights into the recent trends in the Indian passenger car industry due to the changing economic and business conditions.

• Examine how MUL's aggressive pricing strategy helped the company to retain its leadership position amidst fierce competition by foreign players in India.

• Critically analyze the pricing strategy of MUL and determine the rationale of having several product models at various price points.

• Arrive at possible solutions for the current pricing dilemma of MUL.


  Page No.
The Competition 1
Background Note 2
The Product Line 3
The Pricing Strategy 5
Promotion and Distribution 6
The Result 8
Exhibits 10


Case, Maruti Udyog, Pricing Strategy, Price Positioning, Maruti 800, Alto, Price Points, Flexible Pricing, Indian Passenger Car Industry, Promotion, Distribution and Market Penetration.

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