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Tata Motors Ltd. is one part of the business conglomerate, Tata Group, and was formerly known as TELCO (Tata Engineering and Locomotive Company). The other ventures of Tata Group include Tata Steel, Tata Consultancy Services, Tata Technologies, Tata Tea, Titan Industries, Tata Power, Taj Hotels, and so on. Headquartered in Mumbai, India, Tata Motors is a multinational corporation accounting for 70% cumulative market share in the domestic commercial vehicle segment. Today, the company is the worlds second largest manufacturer of commercial vehicles, worlds fourth largest truck manufacturer and worlds second largest bus manufacturer. It is a dual-listed company, which is traded on both the Bombay Stock exchange as well as the New YorkStock Exchange.. Tata Motors was first established in 1935 as a locomotive manufacturing unit. The first commercial vehicle was manufactured in 1954, in collaboration with Daimler-Benz AG of Germany. In 1960, the first truck, quite similar to a Daimler truck, rolled out from the Tata factory in Pune. Ever since its launch, the truck became highly successful. However, the success of the commercial vehicles was just the beginning of the flourishing and booming future of Tata Motors. The company went ahead diversifying itself and took up other products as well. Apart from exporting heavy-duty trucks, the company decided to come up with lighter versions for the local market. Thus, began the production of the first LCV (Light Commercial Vehicle) model, Tata 407 in 1986.
Tata Motors Limited is India's largest automobile company, with consolidated revenues of Rs.92,519.25 crores (USD 24 billion) in 2009-10. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. The company is the world's fourth largest truck manufacturer, and the world's second largest bus manufacturer. Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of India. Over 5.9 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The company's dealership, sales, services and spare parts network comprises over 3500 touch points. Tata Motors, the first company from India's engineering sector to be listed in the New York Stock Exchange (September 2004), has also emerged as an international automobile company. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand and Spain. Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo. In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and coach manufacturer, and subsequently the remaining stake in 2009. Hispano's presence is being expanded in other markets. In 2006, Tata Motors formed a joint venture with the Brazil-based Marcopolo, a global leader in body-building for buses and coaches to manufacture fully-built buses and coaches for India and select international markets.
PRODUCT HISTORY
In 2001, Tata Motors experienced a difficult phase with severe losses due to the decline in vehicle sales , spiraling manufacturing costs and capacities expansion plan that cost Rs. 13 billion. The difficult phase prompted the company to completely rexamine the market and customer markets. This re-examination threw up several interesting findings. Tata motors realized that there was an opportunity to build and market a light commercial vehicle that would ferry goods or passengers from town centres to villages and vice versa. Another important finding was the continuous improvement of highways and other road infrastructure in India would lead to the playing of larger numbers of heavier and faster vehicles along the highways. The increase in traffic would encourage transporters to store heavier goods convenient depots or warehouses along the highways from which smallrer loads would be tranported through feeder routes cities and towns. The company decided to build a complete new vehicle for the last mile distribution segment as part of its new products introduction program. The company decided to built a light commercial vehicle in all aspects and would help in last mile distribution. However the project require new ideas as the competition was intense in the proposed segment, which aws dominated by the three- wheeler cargo vehicles. The three wheeler was experiencing high growth rate at that time and the proposed new vehicle had to compete with them. Before commencing the design of the vehicle, the project team conducted the study in various parts of India to understand the exact need of the potential customer. The study found that the customer needed a vehicle that would provide fuel efficiency, overall comfort, less emission and reduced noise and vibration. The team also visited various foreign countries such as China, Thailand, Sri Lanka and Bangladesh. The team took more than a year to decide on the issue and opted for a four wheeler with a full forward cab front as it would help in lowering running costs and offer more loading area. The choice of engine for the vehicle was also a critical one. The team conducted a world wide research and for an appropriate engine and finally decided to modify the engine of its own passenger car, Indica. Various cost reduction measures were adopted to decrease the cost of the vehicle. After nearly four years , the results of the project club materialised, when the first batch of 150 vehicles, named Ace, was ready for rollout in 2005. Ace was powered . Ace was powered by a twin cylinder ,16bph, 700cc IDI diesel engine. The fuel efficiency of ace was estimated at 18-20 km per litre with a maximum payload capacity of 745 kg. Its sporty car like interiors, its noise and vibration levels were on par with passenger cars, not at the highest levels found in trucks. Ace had a full steel cabin with a display of car like features including elegant two toned seats, clear instrument cluster, utility trays, magazines pockets, twin blade twin speed wipers and combination switches.
In the overall growth in the mini truck segment, he said the market grew by 18% last year but so far this fiscal it has come down to about 5%. Last year M&M had a growth of 36% in the mini- truck, which was much above industry growth and this year also they are confident that they will grow more than the industry.
TARGETING
The target segment of Tata Ace is the Individual customer and the target customer being one who expects early ROI along with safety, comfort and status. This includes : Three Wheeler Owners Owners of trucks Trucking Fleet Owners First time LCV purchasers Customers with monthly income between 5-10 thousand rupees
POSITIONING
Ace was positioned as a vehicle that offered the price, fuel efficiency, and manoeuvrability of a three wheeler but with the safety, durability, additional payload, and comfort of a four-wheeled truck. The deliberate positioning of Ace as a mini truck was also a important marketing strategy adopted by Tata motors. In the advertisements, the company did not focus on the looks of Ace lest their being a danger of it being perceived as a delicate vehicle that could not carry heavy loads. Instead, it was prompted as a mini truck and advertised with a caption Small is Big. The advertisement projected Ace as an elephant calf, standing beside the big mother elephant, to imply it was sturdy mini truck. They built their Value proposition as a High performance LCV with car like features. Also it is : Positioned as Chota Hathi A symbol of power A symbol of mini product A symbol of reliability A PRODUCT FOR ALL YOUR NEEDS and Savings
Product Quality: High standard Design: Sleek and sporty Brand name: Tata ace Services: Augmented service network closer to the operating routes Price Priced in comparison to three wheelers; Cost reduced through combination of using and modifying parts used by other vehicles from Tata motors
Promotion Creative advertising: Small is big as the catch line. Customers reviews in advertisements etc.
Place Locations: Cities, small towns and villages ,ruralurban belt in India
SWOT Analysis
A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis. The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection. The SWOT Analysis of Tata Ace is as shown in the figure:
STRENGTHS 1. Strong brand name of TATA. 2. First mover advantage. 3. Good logistics management. 4. Good dealer network. 5. Provisions of finance to buyers. 6.6X2 LPG cylinders.
WEAKNESS 1. Less technologically advanced engine as compared to competitors. 2. Higher cost. 3. Availability of spare parts is limited. 4. Relatively less established market in southern part of India.
[SO] STRATEGIES
[WO] STRATEGIES 4-3.Increase product awareness in southern part of India. 1-2.Bring in variants that are technically advance and confirm to EURO emission norms.
of 4&5-1.Rural market can be further penetrated by providing financing facilities and expanding dealerships. 2. Export opportunities to developed and emerging 1-2.Strong brand name of Tata can Latin American and further be leveraged to further explore African countries export markets, i.e., Internationalization. 3. High growth rate of LCV segment.
THREATS 1. Increased competition from existing players such as Mahindra and Mahindra, Piaggio, Eicher etc. 2. Further fragmentation of the market.
[ST] STRATEGIES
[WT] STRATEGIES
3&4-1.Good dealer network and 1. Introducing a new product in logistics management can help the LCV segment in Southern company to take on competition with market which doesnt affect the existing firms as well. customers pocket as well as meet the needs of the customer.
COMPETITOR ANALYSIS
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Since India has emerged as the second fastest growing economy after China, it has witnessed an increase in demand for CVs. Although there is some competition in the LCV market, the M&HCV segment is dominated by two companies which comprise the entire segment Tata Motors and Ashok Leyland. There are a few other LCV manufacturing companies, such as M&M, Eicher Motors, Swaraj Mazda and Force Motors. Also the peer competition is based on geographical segmentation. For instance in North, East and Western part of the country the product mainly competes with Mahindras LCV whereas in South India, its main competitor is Ashok Leyland. Despite the impressive performance, analysts expected stiff competition for Ace in the near future from all its competitors. The competition was also expected to force the price of Ace down. In 2006, after taking the beating from Ace , almost all three wheeler manufacturers and low end LCV makers had announced plans to roll out one-ton, four wheeler vehicles by 2008. Auto major Mahindra and Mahindra is gearing up to intensify competition in the mini truck segment with home grown rival Tata Motors, who is currently leading the market with its Ace models. Here is a list of players in LCVs in Indian market along with Tata Ace: Mahindra & Mahindra o o Maxx Maxi Truck, (payload of 900 kg) Alfa and Champion
Bajaj Auto Ltd. o RE 600 Ashok Leyland o Dost The Main Competitors being: Mahindra Champion Bajaj RE600 Ashok Leyland Dost
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INTERVIEW METHOD
Our main aim of using this tool was to find out the customers satisfaction in respect of various segments, although Information regarding vehicles mileage, engine power loading capacity, braking & suspension system & overall performance were also collected with this tool.
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OBSERVATION METHOD
Through this method we directly or indirectly observed the condition and recorded the events. The advantage of this method is that it cross checks the data and information, supplements and validates the data through interview scheduling.
SECONDARY DATA
Secondary data was that which was recorded earlier by us or other researchers for further use. The source of secondary data were as follows: Publications (directories/trade journals/ news paper etc.) Invoices for vehicle provided by the contact person in the firm. Market Data provided by the contact person in firm. Websites of Respective organisations Annual Investor reports of the companies
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BIBLIOGRAPHY
www.tatamotors.com
http://ace.tatamotors.com/aboutus.php http://www.business-standard.com/india/news/tatas-ace-mini-trucksuddenly-gets-competition/396000/ http://en.wikipedia.org/wiki/Tata_Ace http://www.indiancarsbikes.in/auto-news/mahindra-maxximo-tata-ace-1ton-pick-1061/
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