Tata Motors of India

INTRODUCTION :

Established in 1945, Tata Motors’ presence indeed cuts across the length and breadth of India. Over 4 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The company’s manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka). The company is establishing a new plant at Sanand (Gujarat). 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. Tata Motors is also expanding its international footprint, established through exports since 1961. The foundation of the company’s growth over the last 50 years is a deep understanding of economic stimuli and customer needs, and the ability to translate them into customer-desired offerings through leading edge R&D. With over 2,000 engineers and scientists, the company’s Engineering Research Centre, established in 1966, has enabled pioneering technologies and products. It was Tata Motors, which developed the first indigenously developed Light Commercial Vehicle, India’s first Sports Utility Vehicle and, in 1998, the Tata Indica, India’s first fully indigenous passenger car. In January 2008, Tata Motors unveiled its People’s Car, the Tata Nano, which India and the world have been looking forward to.

The years to come will see the introduction of several other innovative vehicles, all rooted in emerging customer needs. Besides product development, R&D is also focussing on environment-friendly technologies in emissions and alternative fuels.

WHAT IS MARKETING?

“The all-embracing function that links the business with customer needs and wants in order to get the right product to the right place at the right time”. IT is the management process that identifies, anticipates and supplies customer requirements efficiently and profitably.

WHAT IS MARKETING PLAN ?

A plan is a way of achieving something. Many first-time business owners think that by simply placing an ad in a local newspaper or a commercial on a radio or a television station, customers will automatically flock to purchase their product or service. This is true to a certain extent. Some people are likely to learn about your invention and try it, just out of curiosity. But hundreds, even thousands, of other potential customers may never learn of your business. Company’s aim is not only to attract and keep a steady group of loyal customers, but also to expand customer base by identifying and attracting, new customers and to reduce risks by anticipating market shifts that can affect company’s bottom line. So, Proper marketing plan is needed and it should include market research, business location, the target customer group, competition, the product or service being sold, budget, and advertising and promotion.

PRODUCTS OVERVIEW OF TATA MOTORS :

Tata Motors owes its leading position in the Indian automobile industry to its strong focus on indigenisation which has driven the Company to set up world-class manufacturing units with state-of-the-art technology. Every stage of product evolution-design, development, manufacturing, assembly and quality control, is carried out meticulously. It involves five categories of product manufacturing.

  • Passenger cars
  • Utility Vehicles
  • Trucks
  • Commercial Passenger Carriers
  • Defence Vehicles

IMPACT OF AUTOMOBILE INDUSTRIES IN INDIA :

A well developed transportation system plays a key role in the development of an economy, and India is no exception to it. With the growth of transportation system the Automotive Industry of India is also growing at rapid speed, occupying an important place on the ‘canvas’ of Indian economy. Today it is fully capable of producing various kinds of vehicles and can be divided into 3 broad categories : Cars, two-wheelers and heavy vehicles. India is the 11th largest Passenger Cars producing countries in the world and 4th largest in Heavy Trucks.

NEW PRODUCT TO BE LAUNCHED IN THE CATEGORY OF PASSENGER CAR : ECHO FRIENDLY ELECTRIC CAR :

As of 2002, there were 590 million passenger cars worldwide (roughly one car per eleven people).Around the world, there were about 806 million cars and light trucks on the road in 2007; they burn over 260 billion gallons of gasoline and diesel fuel yearly. The numbers are increasing rapidly, especially inChinaandIndia. Most automobiles in use today are propelled bygasolineordieselinternal combustion engines, which are known to causeair pollutionand are also blamed for contributing toclimate changeandglobal warming.Increasing costs of oil-based fuels, tightening environmental lawsand restrictions ongreenhouse gasemissions are propelling work on alternative power systems for automobiles. Efforts to improve or replace existing technologies include the development of hybrid vehicles, and electric and hydrogen vehicleswhich do not release pollution into the air. Tata Motor is looking forward in this direction.

CURRENT MARKET SITUATION AND COMPETITION :

  • The company reported a 12.7% rise in net revenue to just over £1 billion in a three-month period ended on September 30 and half way into the financial year 2009 its profit before tax was up by 33% at £194 million on revenue 2.7% ahead at £1.89 billion.
  • Passenger Vehicle(PV) industry sales volume, including exports, crossed the 1mn mark. The PV market is highly competitive with 13 players in operation, out of which 9 are global majors and compete in the market with over 55 models across 9 segments. 80% of the market is for vehicles below Rs 0.5mn.
  • Tata Motors ranks as the second largest car manufacturer behind Maruti Udyog. The primary competitors of Tata Motors are Ashok Leyland in the commercial heavy vehicle segment and Maruti Udyog and Hyundai are in the passenger car segment.
  • Volvo has been increasing its investment in the automotive sector in India and so have a wide range of other international companies from Europe and America.

DISTRIBUTION NETWORK :

  • Tata Motors’ dealership, sales, services and spare parts network comprises over 3500 touch points; Tata Motors also distributes and markets Fiat branded cars in India.
  • The 28Tata-Fiatdealers, who together have 44 outlets, are located in 11 cities.

SWOT ANALYSIS :

STRENGTHS :

  • The internationalization strategy to keep local managers in new acquisitions, and to only transplant a couple of senior managers from India into the new market. The benefit is that Tata has been able to exchange expertise.
  • The company has a strategy in place for the next stage of its expansion. It is focusing upon new products and acquisitions, also has a programme of intensive management development to establish its leaders for tomorrow.
  • The company has had a successful alliance with Italian mass producer Fiat since 2006. This has enhanced the product portfolio for both companies.

WEAKNESSES :

  • The company’s passenger car products are based upon 3rd and 4th generation platforms, which put Tata Motors Limited at a disadvantage with competing car manufacturers.
  • Tata has not got a foothold in the luxury car segment in its domestic market. Is the brand associated with commercial vehicles and low-cost passenger cars to the extent that it has isolated itself from lucrative segments in a more aspiring India?

OPPORTUNITIES :

  • In 2008 it had added the Land Rover and Jaguar, two of the World’s luxury car brands to its portfolio by purchasing it from Ford Motors for UK. And will undoubtedly off the company the chance to market vehicles in the luxury segments.
  • Tata Motors Limited acquired Daewoo Motor’s Commercial vehicle business in 2004 for around USD $16 million.
  • Nano is the cheapest car in the World – retailing at little more than a motorbike. Whilst the World is getting ready for greener alternatives to gas-guzzlers, is the Nano the answer in terms of concept or brand? Incidentally, the new Land Rover and Jaguar models will cost up to 85 times more than a standard Nano!
  • The new global track platform is about to be launched from its Korean plant, at a time when the World is looking for environmentally friendly transport alternatives. New and emerging industrial nations such as India, South Korea and China will have a thirst for low-cost passenger and commercial vehicles.

THREATS :

  • Other competing car manufacturers have been in the passenger car business for 40, 50 or more years. Therefore company has to catch up in terms of quality and lean production.
  • Since the company has focused upon the commercial and small vehicle segments, it has left itself open to competition from overseas companies for the emerging Indian luxury segments.
  • Rising prices in the global economy could pose a threat to the company.

COMPANY’S GOALS:

The company’s goal is to strengthen its leadership position in the Indian market, maintain operational excellence, and expand its international business in selected countries through organic as well as inorganic growth initiatives.

COMPANY’S OBJECTIVES:

MARKETING :

  • Introduce new product with high-tech features and as per market environmental conditions.
  • Achieve an annual growth rate of at least 15% and market share up to 35-40%.
  • Promote the new product through strategic alliances with advertisement and by organizing promotional events.

FINANCIAL :

  • Generate sales of approximately Rs 100 crore in year one and increase sales 10% annually.
  • Capture and maintain a gross margin of 20-25%.
  • Achieve positive net worth by next 2-3 years.

TARGET MARKET SEGMENT :

Tata Motors will target following two market segments :

1. Middle class Family :

This is the group of customers who dreams to buy product which is market competitive and inexpensive.

2. Youngsters :

This is the group of customer who believes in being with modern trends and technology.

MARKETING STRATEGY :

Tata Motors believes in technology for tomorrow. By looking at the Marketing strategies of TATA motors, the SWOT analysis can clearly tells why Tata Motors marketing strategies is one of the successful stories in automobile industry nowadays. Tata Motors Company is able to produce more than 4 million different types of vehicles, since the company began in 1945.

The 4 P’s :

The Marketing Mix(MM) model (also known as the 4 P’s) can be used by marketers as a tool to assist in implementing the Marketing strategy. The function of the MM is to help develop a package that will not only satisfy the needs of the customer within the target markets, but simultaneously to maximize the performance of the organization.

  1. Product
  2. Price
  3. Place
  4. Promotion

PRODUCT :

Every business started from 0, from no one knows it until everyone know it. Advertising is one of the most common ways to make car buyer or car enthusiast aware of the new car with special promotion price. In future an Electric Car will be in high demand by the point of view of rising Gasoline rate and air pollution worldwide.

PRICE :

There are various factors to determine a price of a car, such as market condition, cost incurred to build a car, profit by company, dealer profit. Giving discount every month and special promotion for certain type of vehicle is one of the strong strategy used by Tata Motors. So, company will make every effort to maintain a competitive pricing policy with approximate 10-12% profit margin

PLACE :

Place of dealership does play an important role. The channel of distribution, physical location, and dealership method of distribution and sales is generally adopted. The distribution of vehicle must be in a very systematic way, from the plant to dealership and to end user. This is not only in India itself but also to the world-wide dealership. Company has the biggest market of Indian population . It has also tie-up with another foreign automobile companies to export the products internationally.

PROMOTION :

During the first year of operation company will present new product in industrial events like Auto Expo, and will evaluate advertising campaign through the media like Television, Radio, Posters etc. After launching the product it will provide test-drive at show rooms and introduce high-tech features of the new product to the customers.