A Project Report on TATA Motors

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INTRODUCTION

As India celebrates its 50 years of independence, the passenger car industry will celebrated a

centenary of its existence in India in 1998. Despite this head start, the industry has never

quite matched up to the performance of its counterparts in other parts of the world. The all-

pervasive atmosphere created by the government's license raj was primarily responsible for

this situation. The various layers of Acts sheltered the industry from external competition and

smothered the development of the Indian automobile industry. Moreover, the industry was

considered low priority as cars were considered to be an "unaffordable luxury."

With the liberalization of the Indian economy, the passenger car industry was finally

deregulated in 1993 and many companies, both Indian and foreign, announced their plans to

enter the market. The last four years have seen companies like Daewoo, Ford, GM, and

Mercedes-Benz launches their cars in India. The passenger car industry notched impressive

growth rates between 26-30% during the period FY 94-96 even though the economic

slowdown has adversely affected the industry in FY 98 with the growth rate tricking down to

1%. Nonetheless, times have changed significantly - the days of the customer chasing the

dealer to purchase poor quality cars backed by inefficient service are history. Today, the

customer dictates the terms.

The segmentation of the passenger car market in India is vastly different from that in the

developed nations. In India, the economy segment accounts for the largest share of the cars

sold, as compared to mid-range segment in the mature markets. The economy and the

premium segment face the lowest competitive threats, while the premium segment will

witness intense competition due to lower volumes.

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PROFILE OF THE ORGANIZATION

Tata motors one of India's largest private sector companies with a turnover of over Rs 80

billions, is the country's leading commercial vehicle manufacturer and has significant

presence in the multi-utility and passenger car segments.

Tata motors was established on September 1, 1945, originally for the manufacture of Steam

Locomotives at Jamshedpur. By 1954, the company had diversified into the manufacture of

commercial vehicles in collaboration with Daimler Benz, Germany. By the time their

collaboration ended in 1969, Tata motors had become an independent producer of Medium

Commercial Vehicles with a great degree of indigenization. It had also developed the

capability of designing, testing and manufacturing such vehicles.

The widely successful Tata Indica, a Euro 2 compliant vehicle, is the countrys first

indigenously designed, developed and manufactured passenger car. Tata Motors followed

that up with the Tata Indigo, a sedan that was launched in December 2002. The company also

makes several other passengers vehicles, including the Safari, Sumo and Sierra.

The companys products have received wide acceptance not only in India but also in the

Middle East, Asia, Africa, Australia, Latin America and Europe.

Areas of business

The company manufactures medium, heavy and light commercial vehicles, multi-utility

vehicles and passenger cars. In the year ending March 2001, the companys revenues from its

four manufacturing plants at three locations in India were Rs. 81.64 billion (US $ 1.73

billion). In 2000, they were Rs. 89.61 billion. (US $ 1.9 billion)

{The average exchange rate has been taken as Rs 47.0 to one US dollar.}

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In the year ended 31 March 2001, the companys total exports were worth about Rs 7.22

billion (US $ 153.6 million), against about Rs 6.09 billion (US $ 129.5 million) in the

previous year.

Locations

The companys manufacturing plants in India are at Jamshedpur, Pimpri and Chinchwad near

Pune in Maharashtra, and Lucknow in Uttar Pradesh. Land has been acquired at Dharwad

(Karnataka) to build a fifth plant.

Collaborations

The company has technical tie-ups with:

The Institute of Development in Automotive Engineering (IDEA), S.P.A., Italy, for

assistance in small car body design and styling; and

Le Moteur Moderne, France, for the development of diesel and petrol engines for passenger

cars.

Subsidiaries

Tata Construction Equipment Company Ltd. (TELCON): Its principal business is

manufacture and sale of construction, material handling and earthmoving equipment.

Tata Technologies Ltd.: It oversees the IT requirements of Tata Motors and provides

services for SAP implementation, CAD/CAM-based design, and e-commerce facilities to

customers in India and abroad.

Sheba Properties Ltd: It is an investment and finance company and a wholly-owned

subsidiary of Tata Motors since its inception. It is registered with RBI as a Non Banking

Finance company.

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Telco Dadajee Dhakjee Ltd. (TDDL): It is an investment and finance company and

proposes to undertake activities pertaining to the sales and service of Tata Motorss vehicles

and spare parts.

Minicar (India) Ltd.: Formerly known as Mazda Industrial Chemicals Ltd., this company

was incorporated on January 18, 1972 and is currently engaged in the business of automobile

sales and services.

HV Transmissions Ltd.: It was incorporated on March 13, 2000 with the objective of

acquiring the Heavy-Duty Gear Box Division of Tata Motors at Jamshedpur as a going

concern. It supplies transmissions and their parts to Tata Motors against purchase orders

raised by Tata Motors on HVTL.

HV Axles Ltd.: It was incorporated on March 13, 2000 with the objective of acquiring the

Heavy-Duty Axle Division of Tata Motors at Jamshedpur as a going concern. It supplies

axles and their parts to Tata Motors against purchase orders raised by Tata Motors on HVAL.

Telco Automation Ltd.: It was incorporated on March 13, 2000 with the objective of

acquiring the Machine Tool and Growth Divisions of Tata Motors as a going concern. As and

when required, Tata Motors sources factory automation equipment from TAL.

Tata Technologies, USA: It was incorporated on August22, 1994 and became a wholly

owned subsidiary of Tata Technologies Limited on December 22, 2000. The company is

engaged in the business of computer consultancy and related services.

Strategic alliances

Tata Motors has several joint ventures and alliances. These include:

Tata Cummins Ltd., a joint-venture with Cummins Engine Company Inc., USA; makes

fuel-efficient, low emission, environment-friendly diesel engines;

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Tata Holset Ltd., a joint-venture with Holset Engineering Company, UK, makes

turbochargers for diesel engines manufactured by Tata Cummins Ltd. and other OEMs;

Concorde Motors Ltd., a joint venture with Jardine International Motors (Mauritius) for

dealerships of passenger vehicles. Concorde has dealerships for Tata Motors passenger

vehicles in Delhi, Mumbai, Bangalore, Ludhiana, Hyderabad, Chennai and Lucknow.

Tata Precision Industries Pvt. Ltd., Singapore, for the manufacture and sale of high

precision toolings as well as electronic and plastic components for the computer industry;

Tata Motors Services Ltd., Singapore, for the sale of spare parts for Tata vehicles; and

Nita Company Ltd., Bangladesh, for the assembly and sale of Tata commercial vehicles.

.TELCO:

Currently the largest automobile company in India, Tata Motors ranks among the top 10

commercial vehicle producers in the world.

The transition of Tata Motors from being a predominantly commercial vehicle manufacturer

to a complete automobile company began in the early 1990's with the launch of the first

Sports Utility vehicle from Tata- the Sierra and later the Tata Estate. The insights gained into

customer needs in these markets led to the development of another world-class Sports Utility

Vehicle, the Tata Safari, launched in 1998.

Soon after launching the Safari, Tata Motors made an aggressive foray into the mainline

passenger car market with its small car, the Tata Indica. The Indica fulfills the Tata Group

Chairman Ratan N Tata's vision of developing and manufacturing a truly Indian car that

would use modern technology and contemporary styling of the small car genre. It went on to

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set a benchmark in terms of its value proposition in terms of best value for money in its

segment and internal spaciousness.

The overwhelming customer response that the Indica generated at its launch in early 1999 has

translated into its capturing more than 17% of the premium small car segment, and 8 % of the

entire passenger car market in India within a year.

Clearly identifying the core areas as R&D, manufacture of critical components and the final

vehicle assembly, the company continues to be open to global alliances to effectively enhance

its competitiveness in the fast globalizing Indian markets. Setting standards of corporate

governance, Tata Motors focuses on Complete Customer Satisfaction. With benchmarking

systems to sell world-class products and services, Tata Motors continues to uphold the trust

of its various stakeholders, viz. shareholders, customers, employees and business associate.

Business Sector

The Tata Group runs businesses in seven key industrial sectors, namely, Materials, Energy,

Chemicals, Consumer Products, Engineering, Communications and Information Systems, and

Services. TELCO is Tatas flagship company in the Engineering sector.

Business Models

TELCO is primarily a Business-to-Consumer Company (B2C), serving various needs of

a number of its customers. It also practices the Business-to-Business (B2B) Model,

though at a much lower scale.

Business

TELCO is into the business of manufacturing and selling medium, heavy and light

commercial vehicles, multi utility vehicles and passenger cars.

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Its major product line can be basically classified into three broad categories. There are

various sub-brands and products in these categories:

Passenger Cars

Utility Vehicles

Commercial Vehicles

TELCO currently has three products in its Passenger Car division namely,

Tata Indica

Tata Indigo

Tata Safari

It is in the process of coming out with another member in the passenger car family, the all-

new Indica Sedan, set out to storm the Indian Mid-Size Passenger car segment, which would

be launched in the last quarter of 2002.

Confirming to International standards all these vehicles are available with various features

such as petrol & diesel versions, 2-wheel and 4-wheel drives etc.

TELCO currently has three products in its Multi-Utility vehicle division namely,

Tata Sumo

Telco Sport

Telcoline Pickup Vans

All these vehicles come only in diesel-engine versions and are quite popular on the Indian

roads, especially on the highways and in the rural areas. They are known for their build

quality, reliability, ruggedness, and the various uses that they can be put at.

They are used as people carriers, as emergency vans, goods carriers, pick-up vehicles and so

many more uses.

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The utility pick-up vans of Tata International are made for all kind of terrains and are

facilitated with features like 2 & 4 wheel drive, single & crew cabs etc.

TELCO is the undisputed leader as regards the Commercial Vehicle segment. It has a large

number of products in this segments classified as various types namely,

Buses

Small Buses (4 models)

Big Buses (4 models)

Trucks

Light Trucks (5 models)

Medium/Heavy Trucks (9 models)

Tippers (3 models)

Tractors (3 models)

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STRATEGIC GROUP MAPS

INTERNAL ANALYSIS

The basic premise is the Customer. So whenever a new product development plan comes into

picture, the idea is to look for ways to offer the customer the best value for his money. And

the way we define value, the word covers all the possible

and not so possible ways to customer satisfaction.

STRATEGIC INTENT

Leadership with Trust

Purpose

being a part of the Tata Group, TELCOs corporate purpose is to improve the quality of life

of the communities that it serves, through leadership in sectors of national economic

significance, to which the group brings a unique set of capabilities. This requires aggressive

growth in its focused areas of business.

The Tata Groups heritage of returning to society what it earns evokes trust among

consumers, employees, shareholders and the community. Formalizing the high standards of

behavior expected from employees and companies continuously enriches this heritage.

The Tata name is a unique asset representing leadership with trust. Leveraging this asset to

enhance group synergy and becoming globally competitive is the route to its sustained

growth and long-term success.

5 Core Values

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The Tata Group has always sought to be a value-driven organization. These values continue

to direct the group's growth and businesses. The five core Tata values underpinning the way

it does business are:

Integrity - we must conduct our business fairly, with honesty and transparency. Everything

we do must stand the test of public scrutiny.

Understanding - we must be caring, show respect, compassion and humanity for our

colleagues and customers around the world and always work for the benefit of India.

Excellence - we must constantly strive to achieve the highest possible standards in our day-

to-day work and in the quality of the goods and services we provide.

Unity - we must work cohesively with our colleagues across the group and with our

customers and partners around the world, building strong relationships based on tolerance,

understanding and mutual cooperation.

Responsibility - we must continue to be responsible, sensitive to the countries, communities

and environments in which we work, always ensuring that what comes from the people goes

back to the people many times over.

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Definition of Value at TELCO

Tata Motors constantly looks for ways to offer customers the best value for money. And our

definition of value covers all facets of customer satisfaction. Be it in the area of product

safety, reliability, utility or aesthetics. We believe in creating lasting relationships with our

customers and business partners.

A Chronology of Important Milestones of the Company

TABLE: 3.1

1946 Tata Engineering undertook manufacture of 5000 'KC' broad gauge open

wagons for the Indian Railway.

The Managing Agency Tata Sons was transferred to Tata Industries on July

1, 1946. The Managing Agency system continued till it was abolished by an

act of Parliament in 1970.

1947 Manufacture of boilers for imported locomotives commenced. This line was

discontinued in April 1958.

In true Tata tradition, which lays emphasis on worker benefits, 129 houses

were built for employees in Jamshedpur.

1948Steam Road Roller introduced in collaboration with

Marshal Sons (UK)

1945

Tata Sons purchased the shops from the Government of India on June 1,

1945 for Rs. 25.39 lakhs with the aim of immediately manufacturing steam

locomotive boilers. Later it planned to manufacture complete locomotives

and other engineering products.

Tata Motors was established on September 1.

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1950 Collaboration signed with M/s Krauss-Maffei, W. Germany for manufacture

of steam locomotives

1954 Collaboration with M/s Daimler -Benz AG, W.Germany, for the manufacture

of medium commercial vehicles at Jamshedpur. First commercial vehicle

produced within six months of agreement.

1956 Steel foundry set up in collaboration with Usines Emile Henricot of Court St.

Etienne, Belgium.

1959 Research and Development Center set up at Jamshedpur.

1960 The company's name, which was Tata Locomotive & Engineering Company

Ltd., was changed to Tata Motors & Locomotive Company Ltd.

1961 Collaboration with M/s Pawling & Harnischfeger (P&H), U.S.A. for

manufacture of cable type excavators and cranes. First crane produced in the

same year.

Commencement of exports - first truck exported to Ceylon, now, Sri Lanka.

1964

Manufacture of popular 1210 vehicle model (with 7.5 T payload)

commenced

1966

Acquisition of Investa Machine Tool Co.

Setting up of Machine Tools Division at Pune.

Engineering Research Centre set up at Pune to cater to automobile research

and development.

1967 Press Tool Division set up at Pune.

Vehicle manufacture facilities steadily built up at Pune

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1968 Collaboration with M/s Hueller Hille Gmbh, W. Germany, for the

manufacture of unit construction special purpose machines.

1969 The "T" replaces the three-pointed Mercedes Star.

1970 Last locomotive produced. (Cumulative production 1155 nos.)

971DI engines introduced.

977 First commercial vehicle produced at Pune.

983 HCVs, including articulated vehicles, introduced.

984 Collaboration with M/s Hitachi Construction Machinery Co. Ltd., Japan, for

manufacture of hydraulic excavators.

Expansion of capacity at Pune.985 First hydraulic excavator produced under Hitachi collaboration.

Broad banding of licence (to manufacture only commercial vehicles above 8 Ton

GVW) to include manufacture of all medium, heavy and light commercial vehicles,

jeep type vehicles and passenger cars.

Broad banding of excavator licence to manufacture all types of earthmoving

machinery.

Broad banding of machine tool licence to manufacture all types of machine tools.

Collaboration with Niigata Engineering Co. Ltd, Japan

for NC / CNC Horizontal Machining Centers and with Nachi-Fujikoshi Corp.,

Japan for NC /CNC In line Machining centers and flexible manufacturing systems.

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TABLE: 3.2

1986-90

1986 First Light Commercial Vehicle - TATA 407 produced. This was a

completely indigenous design with minimal import content. Also met fuel

efficiency norms specified by the government

1987 Second model of completely indigenously designed LCV - TATA 608

produced.

LPT 2416 a multi-axled vehicle introduced

1989Third model of LCV Tatamobile 206 produced

Collaboration with M/s Kloth-Senking Metalligessari, Gmbh, W.Germany,

for know-how of manufacturing aluminum castings.Collaboration with

Hitachi, Japan, for manufacture of a new generation EX

series hydraulic excavator.

1990 First EX model hydraulic excavator produced.

Indigenously designed front-end wheel loader - TWL 3036 introduced.

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TABLE: 3.3

1991-94

1991 Introduction of indigenously designed passenger cars - Tata Sierra and Tata

Estate.

TAC 20 crane produced.

One-millionth vehicle rolled out.

1992 Production of MCV's commenced at Lucknow.

LPT 2213 - a multi-axled vehicle launched.

Collaboration with Nachi-Fujikoshi Corp., Japan, for manufacture of robots.

1993 Joint Venture Agreement signed with Cummins Engine Co. Inc.

to manufacture high horsepower and emission-friendly diesel engines for

medium and heavy commercial vehicles.

Tata Cummins Private Limited incorporated in Jamshedpur, Bihar, on

0ctober 20, 1993.

1994 Tata Sumo - a multi-utility vehicle launched.

LPT 709 - a full forward control, light commercial vehicle launched.

Joint Venture Agreement signed with M/s Daimler - Benz / Mercedes - Benz

for manufacture of Mercedes Benz passenger cars in India.

Joint Venture Agreement signed with Tata Holset Ltd., U.K. for

manufacturing turbochargers to be used on Cummins engines.

Mercedes-Benz (India) Ltd. incorporated in Pune, Maharashtra, on

November 22, 1994.

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Tata Holed Pvt. Ltd. incorporated in Dewas, Madhya Pradesh, on December

20, 1994.

Collaboration with Shads Maschinenbau GmbH, for manufacturing CNC

cylindrical grinding machines.

The Company was restructured into two Strategic Business Units

Automobile Business Unit (ABU), and Construction Equipment Business

Unit (CEBU).

TABLE: 3.4

1995 Collaboration with Hitachi, Japan, for the manufacture of mini excavator

models EX 40 and EX 60.

Production of robots in collaboration with Nachi-Fujikoshi Corp., Japan

commenced.

Mercedes Benz car E220 (W124) launched.

Tata Cummins engine plant inaugurated

1996 First engine produced by Tata Cummins in January 1996.

LPT 2516 vehicle fitted with Tata Cummins engine launched on March 4,

1996.

Tata Sumo Deluxe launched.

Tata Holset's turbo charger plant inaugurated on November 25, 1996.

688 acres of land at Dharwad (Karnataka) were allotted for Auto and CEBU

Units, in Dec 1996.

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Concorde Motors Ltd., a Joint Venture was established between Tata Motors

and Jardine International Motors (Mauritius) Ltd.

1997-98

TABLE: 3.5

1997 Industrial Entrepreneurs Memorandum was filed for taking up manufacture

of special purpose vehicles and construction equipment at Dharwad in Jan

1997.

Management Services Division of the Company was transferred to the

wholly owned subsidiary of Tata Motors - Tata Technologies (I) Ltd, in Apr

1997.

Tata Sierra Turbo launched.

100,000th Tata Sumo rolled out.

The commercial vehicle, LPT 909 introduced.

1998 Tata Safari - India's first Sports Utility vehicle launched in Jan 1998.

Concorde Motors Ltd., a Joint Venture between Tata Motors and Jardine

International Motors (Mauritius) Ltd. was appointed as dealer for the

Company's passenger cars in several cities across the country, in Feb 1998.

Two millionth vehicles rolled out.

Collaboration with Hitachi, Japan, for manufacture of Series V excavators to

replace Series I & III machines, in Mar 1998.

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Indica, India's first fully indigenous car, launched in Dec 1998.

Telco Construction Equipment Company Ltd. (TELCON) came into being as

a subsidiary of Tata Motors, in Dec 1998.

TABEL: 3.6

1999 An overwhelming 115,000 bookings for Indica were made against full

payment within a week, in Jan 1999.

New TATA Logo unveiled.The company would hereafter be called " Tata

Motors ".

Commercial production of Indica begins and first car is sold.

Construction Equipment Business Unit is transferred to TELCON.

In Oct 1999, the Company won the National award for R&D Efforts in

Development of Indigenous Technology in the Mechanical Engineering

Industries Sector instituted by Department of Scientific and Industrial

Research, Ministry of Science and Technology for the year 1999.

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MANUFACTURING UNITS OF TELCO

Tata Motors owes its leading position in the Indian automobile industry to its strong focus on

indigenization. This focus 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. Its manufacturing

plants are situated at Jamshedpur in the East, Pune in the West and Lucknow in the North.

Jamshedpur:

This was the first unit of the company established in 1945 and is spread over a area of 822

acres. It consists of 3 divisions - Truck, Engine (including the Gear Box division) and Axle.

The divestments in March 2000 hived off the Axle and Engine plants into independent

subsidiaries. The Truck Division boasts of two assembly lines. The main assembly line,

measuring 180 metres in length, has 20 stations with a vehicle rolling out every 8 minutes

while the other line is dedicated to Special Purpose Vehicles (SPVs). State-of-the-art

facilities like a Centralized Paint and Press Shop with a set-up of a 5000 tonns Siempelkamp

press line and a cut-to-length line for strip preparation purchased from M/s. Kohler of

Germany makes it a fairly advanced production outfit.

This is supported by a fully equipped Foundry which supplies high-grade SG Iron castings

for automobile components and excavators and is rated as one of the cleaner, better and

highly automated foundries in the world. The Foundry has a sophisticated Kunkel Wagner

high pressure moulding line, which has a rated production capacity of 90 pairs of moulds

every hour. The Foundry has its own melting shop, core shop and sand plant. Other advanced

facilities include Channel Furnaces, Computerized Testing Equipment etc. In 1993, the

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Foundry was ISO 9002 certified by the Bureau Veritas Quality International and later

followed it up with the more stringent QS 9000 certification from the BVQI in the year 2000.

The unit is also equipped with a semi-automated forging line, with 40,000 mkg Beche

hammer and state-of-the art presses from Kurimoto of Japan and is one of the most modern

forging set-ups in the country. It produces critical forging like crankshafts, front axle beams

and steering parts for the automobile plant. The new forging line, installed on April 20, 1984,

has the capability to forge front axle beams at 90 sec per piece and crankshafts at 120 sec per

piece. Mechanical presses help produce a variety of heavy forging. The sophisticated FIDIA

Digit 165 CC graphite milling machine links shop floor machines to the design workstation.

The Forge has been certified as ISO 9002 and QS 9000 by the BVQI.

Pune:

The Pune unit is spread over 2 geographical regions Pimpri and Chinchwad and has a

combined area of around 510 acres. It was established in 1966 and has a Production

Engineering Division, which has one of the most versatile tools making facilities in the

Indian sub-continent. It houses a Vehicle manufacturing complex which is one of the most

integrated automotive manufacturing centers in the country producing a large variety of

individual items and aggregates. It is engaged in the design and manufacture of sophisticated

press tools, jigs, fixtures, gauges, metal pattern and special tools, as well as models for the

development of new ranges of automobile products. Its capabilities have enabled Tata Motors

to introduce new products and improve existing ones without resorting to imports of dies or

fixtures.

Over the years, this division has developed expertise in design and manufacture of automated

dies, fixtures and welding equipment. Its large design group is fully conversant with state-of-

the-art CAD facilities and manufacturing facilities comprising of light and heavy CNC

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machine shops, jigs boring room, plastic template shop, wood pattern and model pattern

shop, five axis precision machine tools and laser control machines. To cope with such a

diverse range, four assembly lines have been established, one each for MCVs and HCVs,

LCVs, multi-utility vehicles and one for Passenger Cars (Indica).

The Passenger Car Division in 'K' block executes the entire process of car manufacture over

five shops - the engine shop, the transmission shop, press and body shops, paint shop and the

trim and final assembly shop. The shops are fully automated ensuring that there is minimal

chance for error in the manufacturing processes. After the car is completely assembled, it

goes through several checks like wheel alignment, side slip test, brake test, shower test, and a

short test run before it is ready for dispatch.

All systems such as materials management, maintenance and other activities are

computerized, enabling smooth operations and minimum inventory needs.

The Electronics Division is engaged in the production of a wide variety of Machine Tool

Controllers, PLCs, and Test rig instrumentation, Servomotors, Proximity Switches. In

addition, it has developed a number of components such as flashers, horns, timers that are

used in Tata Motors vehicles.

Industry experts rate the fully automated Foundry at Chinchwad among the best, worldwide.

The Iron Foundry produces 16,000 tonnes of high precision castings per year with the help of

450 employees. These include Cylinder Blocks, Cylinder Heads, Gear Box Housing, etc. To

dispense with the need for outsourcing, an Aluminium Foundry with an annual capacity of

700 tonnes has also been established.

Lucknow:

Lucknow Plant is the latest in Tata Motors's manufacturing facilities. Established in 1991 and

covering an area of 600 acres, it was primarily started to assemble Medium Commercial

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Vehicles (MCVs) to meet the demand in the Northern Indian market. However, in 1995, the

unit started manufacturing bus chassis of Light Commercial Vehicles (LCVs) and SUMO's.

The unit is equipped with facilities to manufacture spare parts. Subsequently, G-16 and G-18

Gear Parts were added in 1998. The plant started to assemble G -16 GearBoxes in 2000 to

meet the in-house requirement for SUMO vehicles.

PASSENGER CARS SEGMENTATION






Segment-Wise Classification of the Indian Car Market Segment

Range Price ('000 Rs.) ModelsEconomy Maruti 800, Maruti Omni, Premier,

Ambassdor, Hyundai Santro

Mid-range 350-450 Uno, Zen, Ford Ikon, Fiat Palio

Premium 450 - 1,000 Esteem, Opel Astra, Ford Escort, Mitsubishi

Lancer, Hyundai Accent

Luxury > 1,000 Opel Vectra, Rover Montego, Mercedes benz

TABLE: 3.8

Key Demand Drivers

Traditionally, disposable income was perceived as the one critical factor that drove passenger

car demand. However, household income is no longer the single most important factor in

determining the demand for vehicles. Other critical factors are the mobility needs of people

and the availability of cheap finance. The top three income groups - middle, upper middle,

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and high - have grown from 10% in 1986 to 17% of the population and covers over 52

million families. The number of high-income households is growing very rapidly, more so in

the rural areas. These findings have revolutionary implications for the passenger car market.

The development of the used car market will also play a major role, as the customers will be

encouraged to trade in their old cars. The key to the growth of future markets is to make

maintenance-free vehicles, to improve the road infrastructure, and to reformulate fuels and

lubricants so as to reduce vehicle-operating costs.

pricing

In any business, nothing is more dangerous than using money as the magnet for attracting

customsers. It kills loyalty, mangles margins, and encourages defections. But it is the Unique

Selling Price the only road to success in the intensely competitive automobiles business?

Those in the race for winning over the Rs. 7,500-crore small cars market seem to believe so.

In the small car segment, the only P that, suddenly, seemed to matter was the second in the

Product-Price-Promotion-Place marketing-mix.

Evidently, features, technology, and service are secondary. And the only warhead is price.

According to the Research Analyst, Morgan Stanley, Price is the most important P in this

market because it is pyramidal in structure, with a huge base and a narrow apex.

Everything else remaining constant, the purchase decision of the first-time buyer is

influenced by the 4 factors: Price, Price, Price and Price. The first is the price of acquisition.

The second is the price of finance, or the rate of interest on a loan to buy a car. Third is the

price of maintenance, which includes the cost of fuel, service, and spare parts. And the fourth

is the price of disposal, or the re-sale value of the car. The typical Indian car-buyer is

obsessed with post-purchase pricing. Which is,in effect, the cost of maintenance and the

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possible re-sale value. And obviously, the lower the selling price of a second hand model, the

less is the purchasers incentive to opt for it.

However, not every company plays the price-card. Instead of cutting the price of Santro,

Hyundai Motors has launched an enhanced version with product features like power steering,

and product-plus features like better service and customer-care. Hyundai arrived at the

pricing strategy after a careful analysis. It does not believe in knee-jerk reactions to rival

moves. It also believes that when features are the USP, second P Marketing cannot help

reinforce that position. Strategic price marketing is a corporate weapon that must be applied

in the context of an entire portfolio of cars. Attempting to sell the lowest priced car in every

segment will not enable a company to survive.

Sure, the lower price will be an attraction to the first-time buyer who is, essentially, stretching

his budget to buy personal transportation. The less the stretch, the more is the likelihood of

actually buying a car instead of, say, a two-wheeler. So, even a drop of Rs.1000 in the small

cars segment could expand its size.

Go beyond the entry level and the price-value equation will kick in immediately. Only if all

other things are perceived to be equal between competing brands will price be a decider.

Once incomes start rising again, there will emerge increasing numbers of upgrades as well as

first-time buyers who will not necessarily start at the lowest price-level. Thus, price will

become less important. Applied as a brand-level strategy, price may help the auto-marketers

win over only the entry-level customer.

However, only the lowest priced player will milk this segment. The rest of the low-price

aspirants will have to offer additional features as value to convince the budget-buyer to spend

more. As a corporate strategy, leading the charge through price may have a better pay-off. A

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low priced product will enable new entrants to gain entry into the consumers garage. The

threat, however, is that of a dangerous dilution of image.

Thus price can be a selling proposition for only one segment of customers. But a company

that seeks life-long customers, who progressively move up its product ladder, cannot rely on

price alone for success.

The main purpose of this section is to have an insight into TELCOs external environment.

Here, we shall be briefly looking at the factors influencing its external environment, its

competitors and the kind of competition it faces.

Competition

Competition leads to improvement on all fronts. If healthy, it brings the best out of an

industry. Newer and better technology, innovative and much better products and processes,

user-friendly and economical products providing maximum value to customers, and other

such advantages, all arise out of competition.

TELCO faces stiff competition in almost all its business segments but has emerged as the

winner when it comes to market success. Out of its three business segments namely, the

Passenger Car division, Utility vehicle division and the Commercial vehicle division, the

Passenger Car division is the area, which is seeing a lot of activity in the current period. And

this activity is all set to intensify with the launch of the all-new TATA Sedan in the later half

of the current year.

TELCO currently has two products in the passenger car segment- the Indica and the Safari.

It faces direct competition from almost all the major automobile players in the passenger

segment, namely Maruti Suzuki, Hyundai, Fiat, Daewoo and Toyota.

S.I.A.M. (Society of Indian Automobile Manufacturers) has classified the Passenger Car

segment in India into further sub segments on the basis of their length,

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Small Car segment (B segment)

Entry-level Mid Size segment (lower C segment)

Premium Mid Size segment (upper C segment)

Luxury Segment (D segment)

TELCO currently has one offering in the Small Car segment- The Indica, and one offering in

the Sports Utility Vehicle segment - The Safari. The proposed offering, christened the TATA

Sedan shall compete in the entry-level Mid-Size Car segment.

TELCO also has plans to introduce another offering in the Luxury car segment code-named

Magna. The Magna shall be launched some time during the later half of next year in 2003.

TELCO currently is tight-lipped about the Magna and has divulged no details regarding the

car but according to group Chairman Mr. Ratan Tata, the Magna shall be TELCOs answer to

the Luxury Segment in India, which shall force the competitors to revamp their strategies.

And if the success of the Indica and the Safari is to be believed, these words are sure to see

light in the near future.

The Indica comes in both diesel and petrol variants. TELCO has redefined the rules of the

game by launching the all-new Indica V2, which has met with huge success in the recent

months. It has earned a lot of respect among all the small car manufacturers because of its

quality and value delivered to the customer, truly fulfilling its promise ofmore CarPerCar.

TELCO, for the year 2002 had promised a product of great pedigree, and the Indica V2 has

just delivered that.

The Indica is directly pitted against the Zen, Alto and Wagon-R from Maruti Udyog, the

Santro from Hyundai, the Palio and Uno from Fiat, and the Matiz from Daewoo.

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Core Competencies

The Core Competencies of is there capability to make the Indica globally competitive in

terms of cost. If Telco can find markets to sell 20,000 or 30,000 more Indicas, then they are

looking at a very interesting set of numbers. If you add variants to those numbers, youre

looking at very reasonable numbers. Then you are in the niche. And if you focus on that

niche, invest in technologies required to give that one platform all the variants and changes

that you need, you survive.

Telco has a design and engineering capabilities that are unmatched by its competitors in the

Indian market and the company also possesses an unmatched ability to create and integrate it.

This gives it the capability to compete with firms in the world market.

It also has a World-Class dealer base and alliances with these suppliers; this ensures the right

Inputs for the company and also helps to manage the Just In Time systems.

Smaller auto companies (globally) will have to look for market niches to operate. In the case of Tata

Motors, the niche may be the lower end car. The unfortunate part is that the lower end market does

not offer much by way of margins. But you need volumes and that kind of scale and production

processes that will give you those advantages. That is what Telco has to look for and there they can

even stand on their own if they find markets beyond the shores of India. All that would come from

having a niche product that is globally competitive

But there is still a long way to go before the company is able to make a mark in the world

market and compete with the worlds leading companies in well-developed markets like

Europe, The United States and Japan. For that to happen, it will take a more focused

approach from the company towards quality and developing R&D and experience in such

project .Though its efforts towards Total Quality Management seem to be helping the

company.

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Key Factors For Success

Having the right resources is very important for a company to succeed in any industry.

The resources which are most vital for success in an industry are called Key

factors for success in an industry, the key factors for the industries that Telco

Operates in are:

High Quality Management

The LCV & M&HCV segment are highly complicated sectors; the management not only

have to manage all the resources available to the company properly, but also have to be

highly professional in their approach.

R&D and Knowledge

The technological changes as per WTO specifications and Euro Emission norms need

to be followed for a company like Telco to sustain growth and Telco has been able to

achieve all this in all its products and services.

Human Resource

Industries like Telco have a high human element, it is very important for a company

to have High quality human resources

High and Standard Quality

For industries like Telco, which manufacture equipment's that serve the infrastructure

industry, it is very important to have high standards in quality.

Managing Cost

It is becoming more and more important for companies to achieve competitive costs, the

company is planning to continue with is cost reduction program. Most of this would come

from reducing fixed costs, operational efficiency an outsourcing.

Resources

The resources of the company are similar for all the industries; many of the resources are

common for all the industries. But the Core Values like management capabilities

are shared by the entire organization.

Some of the major resources that Telco has are

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Human Resource

Telco possesses a great Human Resource base; its in all its business is people

oriented operation. The company takes great care to ensure that it has a good supply

of HR, the values and efforts to ensure the HR departments of each SBU share good

Human Resources.

Management

The management of the company has gained the reputation of being one of the most

professionally managed companies in India. The management of each SBU has a

strong work ethic with an aggressive approach to managing the company.

R&D and Know-how

The company is known for its high level of sophistication when it comes to

technology. And it has great experience in projects with high levels of sophistication,

which is very important in a knowledge-based industry. It has a great R&D base, it

invests a high amount every year (compared to the average spent in the industry) on it

for each department. The R&D departments of each SBU have helped each other, for

E.g. the revival of Indica is a success story.

High Quality

The company has extremely high standards in quality; almost all Strategic Business

Units are technology leaders in their field of operation.

Thus it is clear that Telco has most of the resources that companies require to be

successful in the industries it operates in. Cost is the only resource that sometimes

hampers its progress.

Value Chain

A large number of Telco's operations are different activities on the value chain for

E.g. LCV., Utility Vehicles, HCV or others are used in different sectors, but all the

vehicles have been the leaders in their own segment.

This aspect not only allows the company to it to deliver tailor made products for other

divisions in the company, but also gives some divisions of the company a lot of

business. And the company is able to achieve lower costs than its competitors by

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procuring facilities from other departments within the company, thus giving it an edge

over the competition.

Synergy

The activities of the company give synergy to the company as a whole; this is due not

only because of the value chain, but also because the R&D from one division helps in

the others. For E.g. the R&D from the Engineering division helps the Production

division. And in the future the company wants to have synergy in all its activities to

be highly successful.

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Pest analsis Identification of change drivers

The PEST(Political, Economic, socio-cultural and Technological) analysis for TATA motors

and Locomotive Company Ltd. (TELCO):

Political

The political environment has been highly unstable over the past few years, but recently it has

settled down somewhat. As we know that Telco is the leader in the commercial

vehicle segment with 54% market share in Light Commercial Vehicle (LCV) and

63% market share in Medium & Heavy Commercial (M & HCV). Telco has a market

share of 221% in utility vehicle segment. The company has also garnered a 9%

market share in the passenger car industry in a very short span. The decision of the

government to ban diesel buses and give licenses to CNG buses has been a boon for

TELCO as it is the major supplier of buses to all State Transport Corporations.

Though only few state governments are stern in implementing this order but TELCO

will remain one of the major suppliers of buses and hence can plan expansion.

Economic

The availability of freight depends on the economic activity in the country. Therefore an

increase in economic activity broadly represented by growth in GDP helps in increasing the

freight availability. The GOI policy towards depreciation norms and excise duty etc will have

a bearing demand for MUVs and CVs. The implementation of infrastructure projects will

have a positive impact on demand of CVs and MUVs as they are extensively used in

transportation of material and people requirement of projects. The freight rates determine the

revenue component of fleet owners. The improvement in freight rates consistently over this

period will add to business of TELCO. Though oil prices have gone up but the shift in the oil

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sector companies towards a positive pricing strategy will not affect Telcos business plans &

performance.

Socio-Cultural

In order to boost sales passenger car companies often look for a general upbeat environment.

The sales during festival times perk up because the environment all round is joyous and

upbeat. Another effect is because of is that of good monsoons which translates into a higher

rural demand especially for the MUVs. Thus socio-cultural factors do not affect the

Engineering business too much; it does have an impact indirectly. Though the metropolitans

have become over-crowded and but Telcos Indica V2 sales have picked up.

Technological

The Company vigorously pursued a programme of product innovation in commercial vehicle

with a view to regaining and improving its market share. The company had already added to

its range Euro 1 Compliant Cummins Engine Powered Vehicle with a view to regaining and

improving its market share. Major innovation in the current year include a 25 Tones Truck

and a30 Tone Tractor Trailer; Fuel Efficient M&HCV Truck and Busses Powered by

Companys Euro 1 Compliant 697 Engines; a Cost Effective 11 Tones Vehicle in both bus

and truck version to meet the growing demand in this segment; and a Fur Tones LCV fitted

with an internally developed Turbo charged Engine.

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STRATEGY IMPLEMENTATION

SEVEN S FRAMEWORK

The Boston Consultancy Group in the 1970s developed the Seven S Framework. It was

designed to build a cohesive strategy, and in turn integrate the 7S, these 7S are inter-related

and inter-dependent.

For the success of an organization the Seven S cannot work in isolation, they have to be

brought together.

For the Strategies to work at Telco, it is important that the company employs the framework.

To implement the framework the company should consider the following aspects-

Strategy

The strategies that the company needs to employ have been discussed in the previous section.

The strategies differ on the various levels, i.e. different for Corporate, Business, Operational

and International Levels. These strategies have to be aligned with the following elements.

Structure

When the company undertook the restructuring exercise, it was the first major restructuring

the Tata group had undertaken. The first phase of restructuring required some basic

foundation building. The group developed a common corporate identity for all group

companies leveraging the strengths of the Tata brand. The group companies were required to

sign an agreement to use the Tata brand, which entailed the compliance with the quality

standards and business ethics that we codified at that time. The company developed the Tata

Business Excellence Model to measure the quality and corporate performance of our

companies, andrequired them to achieve the specified level of performance in order to

continue the Tata Brand.

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The company instituted the business review committees (BRCS), which constituted the

formal interface between the group and the holding company. The BRCS reviews the

strategic direction of each company, and the executive committee of each board reviews the

operations and the budget of the company.

To oversee the entire restructuring exercise, the group created a central group, which they

called the Group Executive Office (GEO). Its primary task was to look at the strategic

direction of each of our companies, in the process of which it set some tasks for our company

in terms of bottom-line and top-line growth based on historical growth trends, as industry

leadership in terms of being number one, two, or three. Ultimately, the GEO takes a view on

the figment of companies within our group.

Telco has also decided to restructure its operations by reducing its level of vertical

integration. Towards this, the company has decided to hive off three of its ancillary divisions

in Pune and Jamshedpur. The company is at present on the look out for suitable alliances with

international majors.

The company has set up an independent retailing network for cars and also for other utility

vehicles. The strength of dealership for these now stands at 118.

Systems

Systems are the procedures that make the organization follow for everything from top-level

decision making to board meetings, from employee training and hiring to transportation. All

the companys activities should have a particular system particular to the company.

The GEO as mentioned above has put in place certain important hooks such as a central HR

and central financial coordination with a view to standardize the MIS systems of Telco for

financial reporting to the holding company. The net result of all these initiatives has been that

Telco now operates more as a group than what they did in the past, but what this really meant

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was that each company had the stamp of its own CEO and went its own way, and if you

remove the name o the enterprise you could be looking at different companies with no

connection to the Tatas.

Style

Every company has its own management style, style also consists of the way a company

operates its business.

As mentioned above the company instituted the business review committees (BRCS), which

constituted the formal interface between the group and the holding company. The BRCS

reviews the strategic direction of each company, and the executive committee of each board

reviews the operations and the budget of the company.

Staff

This aspect concerns itself with the pool of people who need to be developed.

Telco takes a lot of efforts to ensure the best trainee level talent, through campus recruitment

from the top institutes of the country. It then gives them the proper training and development,

giving them the opportunity to grow and improve.

The current chairman of the company Mr. Ratan Tata is a prime example, in the way he

started at the middle level management, and then made it to the top of the company

Skills

This aspect considers the fact that every organization needs certain skills for its success, but

its not just enough to haveskills, an organization must have the right combination of skills

that complement each other.

The company works hard to ensure that it has the necessary skills to ensure its success. It

trains its employees, through a set of carefully designed programs, to give them the desired

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skills. Plus it has also entered into a number of alliances with anumber of companies, which

help it to gain the necessary experience and which can also help it improve its R&D.

Super-ordinate Goals

These are goals on which the other elements and other goals of the organization should

depend upon. These are reflected in the thinking of the organization.

These are Tatas Diktat:

Globalize: With economies opening up, Tata companies are aiming for global benchmarks to

compete.

Be Skill Intensive: With manufacturing ceasing to be India s advantage, the thrust is on

knowledge based industries.

Build brands: Shift from selling commodities to marketing branded products and services that

not just differentiate but fetch a premium.

Leadership: To justify shareholder interest, Tata companies must be among the top three in

their industries.

Enhance Performance: Executives must pull their weight, and the best of them must get

opportunities across functions and group companies.

LEADERSHIP

Leadership is defined as The art or the process of influencing people so that they will strive

willingly and enthusiastically towards achievement of the groups mission. Leadership is

something that greatly affects any companys philosophy, culture, and in-turn the overall

health of the company.

Telco always has had a tradition of great leadership. One of its founders Jamshedji Tata has

been a hallmark of leadership.

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That surge of electricity not unnoticed by merchant bankers, now crawling all over Bombay

House, the group headquarters is in fact the spark that the group is looking for to rocket

itself into a new orbit of growth. In 1991, when a shy and reclusive Ratan Tata took over the

chairmanship of the group from uncleJ.R.D Tata, his priority was not new businesses or even

growth. It was something much more immediate and arduous. It was to turn a loose

confederation of companies, controlled powerfully by powerful satraps, into a group that

thought and acted like one. The challenge however wasnt merely of ousting powerful

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Problems of the organization

Given the city conditions, the consumers needed a very good overall performance of cars,

small cars taking less space has no parking problems, easy derivability in heavy traffic

conditions, easy gear shifts and good fuel efficiency. The small car owners being mostly the

professional class or the upper middle class were very cost conscious and due to their busy

life styles preferred low maintenance in their cars.

Irrespective of these above aspects there is one more thing, which also needs attention is

customer satisfaction. Customer satisfaction is abroad term, which includes many things like

post sale service satisfaction, dealership locality towards customers, way of treatment at these

dealerships and service stations, solving the customers problems and concerns to their full

satisfaction and so on.

The occurrence of single problem is a source of dissatisfaction for customers. Problem

experience is not always something broken or loose. Many a times it is a function of

customers expectation of how a feature or a vehicle system should look or perform and any

performance short of this expectation is perceived as a problem.

Competition information

The main purpose of this section is to have an insight into TELCOs external environment.

Here, we shall be briefly looking at the factors influencing its external environment, its

competitors and the kind of competition it faces.

Competition leads to improvement on all fronts. If healthy, it brings the best out of an

industry. Newer and better technology, innovative and much better products and processes,

user-friendly and economical products providing maximum value to customers, and other

such advantages, all arise out of competition.

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TELCO faces stiff competition in almost all its business segments but has emerged as the

winner when it comes to market success. Out of its three business segments namely, the

Passenger Car division, Utility vehicle division and the Commercial vehicle division, the

Passenger Car division is the area, which is seeing a lot of activity in the current period. And

this activity is all set to intensify with the launch of the all-new TATA Sedan in the later half

of the current year.

TELCO currently has two products in the passenger car segment- the Indica and the Safari.

It faces direct competition from almost all the major automobile players in the passenger

segment, namely Maruti Suzuki, Hyundai, Fiat, Daewoo and Toyota.

S.I.A.M. (Society of Indian Automobile Manufacturers) has classified the Passenger Car

segment in India into further sub segments on the basis of their length,

Small Car segment (B segment)

Entry-level Mid Size segment (lower C segment)

Premium Mid Size segment (upper C segment)

Luxury Segment (D segment)

TELCO currently has one offering in the Small Car segment- The Indica, and one offering in

the Sports Utility Vehicle segment - The Safari. The proposed offering, christened the TATA

Sedan shall compete in the entry-level Mid-Size Car segment.

TELCO also has plans to introduce another offering in the Luxury car segment code-named

Magna. The Magna shall be launched some time during the later half of next year in 2003.

TELCO currently is tight-lipped about the Magna and has divulged no details regarding the

car but according to group Chairman Mr. Ratan Tata, the Magna shall be TELCOs answer to

the Luxury Segment in India, which shall force the competitors to revamp their strategies.

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And if the success of the Indica and the Safari is to be believed, these words are sure to see

light in the near future.

The Indica comes in both diesel and petrol variants. TELCO has redefined the rules of the

game by launching the all-new Indica V2, which has met with huge success in the recent

months. It has earned a lot of respect among all the small car manufacturers because of its

quality and value delivered to the customer, truly fulfilling its promise ofMore Cars per Car.

TELCO, for the year 2002 had promised a product of great pedigree, and the Indica V2 has

just delivered that.

The Indica is directly pitted against the Zen, Alto and Wagon-R from Maruti Udyog, the

Santro from Hyundai, the Palio and Uno from Fiat, and the Matiz from Daewoo.






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TABLE: 1.1

Traditionally, disposable income was perceived as the one critical factor that drove

passenger car demand. However, household income is no longer the single most important

factor in determining the demand for vehicles. Other critical factors are the mobility needs of

people and the availability of cheap finance. The top three income groups - middle, upper

middle, and high - have grown from 10% in 1986 to 17% of the population and covers over

52 million families. The number of high-income households is growing very rapidly, more so

in the rural areas. These findings have revolutionary implications for the passenger car

market. The development of the used car market will also play a major role, as the customers

will be encouraged to trade in their old cars. The key to the growth of future markets is to

make maintenance-free vehicles, to improve the road infrastructure, and to reformulate fuels

and lubricants so as to reduce vehicle-operating costs.

42

Range Price ('000 Rs.) Models

Economy Maruti 800, Maruti

Omni, Premier, Ambassador,

Hyundai Santro

Mid-range 350-450 Uno, Zen, Ford Ikon, Fiat Palio

Premium 450 - 1,000 Esteem, Opel Astra, Ford Escort,

Mitsubishi Lancer, Hyundai Accent

Luxury > 1,000 Opel Vectra, Rover Montego,

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NEED OF THE STUDY

We know that customer taste change after a period thats why its important for company

perspective to implement his strategy and policies according to his customer:

The need of the study is to analyze the strategies generally opted by dealers and to

focus on the Marketing mix of TATA Motors.

To know about the company strategy which they formulate for their customer to

make a better relationship with them.

To know the strength and weakness and to assess the profitability of the company.

To know the strategy which will help to know the needs and wants of the customer.

To know the buying behavior of car owners.

To know the strength and weakness and to assess the profitability of the company

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SCOPE OF THE STUDY

Today, for any organization or firm to survive in this competitive world depends on

its abilityo be dynamic and be different from the competition to be unique

in the industry:

The research aims at finding the attitude of people towards the different brands of

cars, a conclusive research was conducted.

The data collection form was designed in the form of a standard questionnaire

because it is more reliable than unstructured format industry

Customer satisfaction helps every organization to keep the existing customer and to

build new customer.

The information gathered through this research can be used by the company to

improve its services and became more customers friendly.

This can increase the goodwill of the company and its overall performance.

This study is aimed to provide the management with some knowledge about its status

in market both in terms of sales and customer awareness.

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OBJECTIVE OF STUDY

To examine the psychographics of small size car customers.

To probe the buying behavior of car owners.

To know the strategy which will help to know the needs and wants of the customer.

To find people expectations or satisfaction regarding the small cars.

To judge the awareness level of small cars.

To know the factors which play important role before making purchase decesion.

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Part II

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Chapter II

Research Methodology

Limitations

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RESEARCH METHODOLOGY

A research design is the arrangement of condition for collection and analysis of data in a

manner that to, combine relevance to research purpose with economy in procedure.Research

Design is conceptual structure within which research is conducted. It conStitutes

the blue print of collection, measurement and analysis of date. Research Design is

needed because it facilitates the smooth sailing of various research operations,

thereby making research as efficient as possible yielding maximum information

with minimum time, effort and money. Research Design stands for advance

planning of methods to be used for collec ting relevant da ta and techniques to be

used in the analysis .The design helps researcher to organize his ideas whereby it

will be possible for him to look for flaws and inadequacies.

Sources of Primary and Secondary data:

The major aim of the project was to analyze the Strategies of TELCO and to study the

consumer-buying behavior for small car customers.

For the first part secondary data was collected from various sources that included website of

TELCO and trade journal that were collected from TELCOs Delhi Office.

By reducing the chance or the sample to influence results through different questions and

through different judgment of answers and what to record, the structured questionnaire

produces more reliable results i.e. if the research project is repeated in the same manner,

similar results will be obtained.

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Most of the questions asked in the questionnaire were closed ended with a few open-ended

questions also, to know consumers general views. Some questions are designed for

the purpose of cross checking the sample genuineness in filling the questionnaire.

For the purpose of analysis, ranking scale is used to rank the preferences of attributes of the

customers. (Semantic differential scale is used to understand the images of brands of

cars as perceived by the consumers. This scale is used because it permits the

development of descriptive profiles that facilitates the comparison of competitive

items.)

Universe: The universe is entire group of items the researchers wish to study and about

which they plan to generalize. For this, the universe consists of people of Delhi who

own small car. Selecting the sample for this project, a probability sampling method is

used. Probability sampling method is those in which every item in the universe has a

known chance of being chosen in the sample. Here the sample size consists of 60

residents of Delhi. The probability sampling is preferred because:

It is the only sampling method that provides essentially unbiased estimates having

measurable precision. If the investigator requires this level of objectivity, then some

variant of probability sampling is essential.

The probability sampling permits the researchers to evaluate in quantitative terms, the

relative efficiency of alternate sampling techniques in a given situation. Usually this is not

possible in non-probability sampling.

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LIMITATIONS

The time for which the project was conducted was very short.

The sample size was restricted to 60 only.

The scope of study was also restricted to the study of awareness about the consumer

preferences.

As there are many competitors of Tata motors in the pvt.sector only 3 of its

competitors products were analyzed in detail.

The area from where the sample population was selected was Delhi only.

Other cities and moreover rural area was not covered under the study.

The preferences of marketing agents were not considered which would have helped to

evaluate the preferable commission sale which helps to boost product sale.

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Chapter III

DESCRIPTIVE WORK ON SUBTOPIC

OF STUDY

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MARKETING MIX

Tata Motors Ltd is a multinational corporation headquartered in Mumbai, India. Part of the

Tata Group, it was formerly known as TELCO (TATA Engineering and Locomotive

Company). Tata Motors is Indias largest automobile company, with consolidated revenues

of USD 20 billion in 2009-10. It is the leader in commercial vehicles and among the top three

in passenger vehicles. Tata Motors has products in the compact, midsize car and utility

vehicle segments. The company is the world's fourth largest truck manufacturer, the world's

second largest bus manufacturer, and employs 24,000 workers. Since first rolled out in 1954,

Tata Motors has produced and sold over 4 million vehicles in India.

Established in 1945, when the company began manufacturing locomotives, the company

manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG,

which ended in 1969. Tata Motors is a dual-listed company traded on both the Bombay Stock

Exchange, as well as on the New York Stock Exchange. Tata Motors in 2005, was ranked

among the top 10 corporations in India with an annual revenue exceeding INR 320 billion. In

2010, Tata Motors surpassed Reliance to win the coveted title of 'India's most valuable brand'

in a annual survey conducted by Brand Finance and The Economic Times. Tata Motors has

auto manufacturing and assembly plants in Jamshedpur, Pantnagar, Lucknow, Ahmedabad,

Sanand and Pune in India, as well as in Argentina, South Africa and Thailand.

1. Product: Tata has a very wide range of products it has passenger cars, utility vehicles,

Trucks, Commercial passenger Carriers And Defence Vehicles

Passenger cars

UtilityVehicles Trucks Commercial Passenger Carriers

Indica vista Safari Dicor Tata Novas Buses

Indigo XL Sumo Grande TL 44 Winger

Nano Sumo Magic

Fiat cars Xenon XT

2. Price: The prices of Tata motors are generally affordable acceptable by the general public

at large. Tata always have something for the lower class people with Nano being their trump

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card. Giving discount every month and special promotion for certain type of vehicle also one

of the strong strategy use by Tata Motors. Discount can be made from Companys profit or

from dealers profit at certain range.

3. Place: Tata Motors has an extensive dealer network covering Indian and International

markets. Wherever you are, there is a Tata Motors Sales and Service dealership close to you.

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.

4. Promotion: Tata motors promote their products via Advetising and after sales services

5. People: Tata Motors owe our success to the highly motivated and talented staff. Our

recruitment division picks the crme-de-la-crme from premier universities, management and

engineering institutes in India. they put them through rigorous training programmes to hone

their entrepreneurial skills and impart comprehensive product knowledge.

6. Processes: Tata motors follow Balanced Scorecard Collaborative, Inc for achieving

excellence in overall Company performance.

7. Physical Evidence: The management of the company has managed to keep their hopes

alive even in this recession and hopes that the worse is behind Tata Motors recently launched

the most awaited car of the year, Tata Nano and the company has already received 203,000

booking that are fully paid and 70 percent of the applicants are ready to wait till the end of

2010 for the car to be manufactured.

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MARKETING STRATEGY AND MARKETING PLAN

A MARKETING STRATEGY in general sets a target market and a marketing mix. It is a

"big picture" of what a company will do in some market in order to gain a competitive

advantage. A MARKETING PLAN is a detailed breakdown of your marketing strategy. It is

a written statement of a marketing strategy with the time - related details as well as the

marketing budget for carrying out the strategy.

It should spell out the following in detail: -

What marketing mix will be offered?

To who (target market);

For how long;

What company resources will be needed at what rate;

What results are expected (sales and profits).

1.1Develop a Marketing Strategy

By now you should already:

have decided on the nature of your business and you know that your business idea is

Feasible;

have also identified your market and decided on your target market;

know what the needs of your customers are and you have identified and assessed your

Competition.

Now you need to decide on:

The Product and Service to offer your customers;

How you will make your Products available to customers;

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How you will communicate the benefits of your Products and persuade customers to

buy them

The price you will charge.

These four decision variables are the ingredients of the so-called marketing mix. Your task is

to create these elements effectively in order to market your product/service to the target

market in an optimal way.

1.2Types of Marketing Strategy

1. Social Marketing:

It refers to the design, implementation and control of programs to increase the acceptability

of a social cause or practice among people e.g. No Smoking campaign in Delhi University,

publicity campaign for casting vote.

2. Augmented Marketing:

It refers to providing additional services by way of innovative offerings and benefits to the

customers to increase his level of satisfaction e.g. free home delivery service by

Supermarkets.

3. Direct Marketing:

Marketing through various advertising media that interact directly with consumers, generally

calling for the consumer to make a direct response, e.g. Catalogue Selling, Mail-order, Tele-

calling and TV shopping.

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4. Relationship Marketing:

Marketing through creating, maintaining and enhancing strong long-term relationships with

customers in order to win his loyalty e.g. a restaurant can build relationships with customers

by sending him wishes and discount offers on his birthdays.

5. Services Marketing:

It is applying the concepts, tools and techniques of marketing to services like banking,

insurance, retailing, educational etc.

6. Person Marketing:

It consists of activities undertaken to create, maintain or change attitudes or behavior towards

particular people like politicians, sports stars, film stars, professionals to promote their

careers and income.

7. Organisation Marketing:

It consists of activities undertaken to create, maintain or change attitudes and behavior of

target audiences towards an organisation.

8.Place Marketing:

Place marketing involves activities undertaken to create, maintain, or change attitudes and

behaviour towards particular places e.g. tourism marketing.

9. Differential Marketing:

A market-coverage strategy in which a firm decides to target different markets through

different strategies or offers e.g. Hindustan Unilever offers different types and qualities soaps

for different markets and customers.

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10. Synchro marketing:

It refers to balancing the fluctuations in irregular demand for a product due to seasons,

timings etc, through flexible pricing, promotion and other incentives e.g. heavy off-seasondiscount on woollens may increase its demand to some extent.

11. Concentrated Marketing:

A market-coverage strategy in which a firm focuses on only one or few markets.

12. De-marketing:

Marketing strategies to reduce demand temporarily or permanently, not to destroy demand

but only to shift it e.g. Super stores may offer no discounts on Saturdays, Sundays and

holidays to reduce overcrowd.

1.4 The Marketing Strategy Process

Having a strong marketing strategy process in place helps to ensure that your marketing

activities remain aligned with your business goals, maximizing the business return from your

marketing efforts.

The picture shows the process for

developing and aligning marketing

strategy.

These are the steps you should follow tocreate and execute a winning marketing

strategy.

For help in following this 7-step

marketing strategy program, check out

our newly released eBook "The 7-Step

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Easy Marketing Strategy Process."

Ill briefly review each step in turn:

1. Understand Your Customer

Develop a clear picture of your target customer using market research and analysis.

Understand their pain points and the benefits of your solution.

2. Analyze the Market

Some basic market research should allow you to find market data such as total available

market, market growth (historical numbers and projections), market trends, etc.

3. Analyze the Competition

Ask yourself what other choices your target customers have to solve their pain point.

Research and assess the strengths and weaknesses of each. Take a look at this article for

more info on competitive marketing strategy.

4. Research Distribution Channels

What is the best way to deliver your product or service to your target customers? This will

impact your sales strategy and your financials, as well as your marketing mix.

5. Define Your Marketing Mix

Check out this article about defining your marketing mix: Product, Price, Place and

Promotion.

6. Analyze the Financials

Put together your marketing budget and evaluate projected marketing ROI, customeracquisition costs, etc.

7. Review and Revise

8. Continuously evaluate the effectiveness of your marketing strategy, and revise or

extend as needed.

1.5 Create an Effective Marketing

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The MARKETING MIX consists of all the controllable variables the company puts together

to satisfy its target market. A typical MARKETING MIX includes decisions regarding the

product, the price of the product, how to promote the product and how to get the product to

the right customer at the right time and place.

All these variables are controllable elements in the marketing mix and can be reduced to four

basic ones, each starting with a P (also known as the four Ps):

Product.

Place.

Price.

Promotion.

The four Ps are those factors that you can control directly, for example, you develop your

product, you decide how to get it to the customer, you determine the price and you choose the

promotion mix. The four Ps are, as you will realize now, with the selection of your target

market are the basic ingredients of your marketing strategy.

All four Ps are needed in a marketing mix and should therefore be tied together. When a

marketing mix is developed, all final decisions about the P's should be made. All four Ps

should be in harmony and aimed at satisfying the customer's needs in an optimum way.

You do have control over the marketing mix and can vary it to suit the needs of your

customers and the resources of your business. Customers are continuously matching their

needs with the products offered by you and your competitors.

You should now know your target market and the needs of your potential customers. From

analyzing your competitors, you can identify what they offer the target consumer through

their marketing mixes. This determines what your marketing mix and your competitive

advantage will be. All of the marketing mix elements must reinforce the image of the product

or service that the business portrays to the potential customer.

Lets discuss each P in the marketing mix in more detail.

1.6 Focus on the product

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This area is concerned with developing the right product for the target market. This offering

may involve a physical product, a service, or a blend of both. Remember that a product is not

limited to a physical good. The important thing is that your product and/or service should

satisfy a specific customer need.

At the most fundamental level we normally talk about the core product. The core product

answers the question "what is the buyer really buying?" The woman buying a camera is not

buying a mechanical box, she is buying the opportunity to take photo's, when she want to

have and keep forms of "immortality" or precious moments. The marketers' job is to sell

these core benefits of the product or service.

Branding means the use of a name, term, symbol, design, or a combination of these, to

identify a product. It includes the use of brand names, trademarks, and practically all other

means of product identification. A brand name is a word, letter, or a group of words or letters.

Examples include Nike, IBM, and Kellogg's. Trademark is a legal term and includes only

those words, symbols, or marks that are legally registered for use by a single company.

Brand promotion has advantages for sellers as well as for customers. A good brand name

speeds up shopping for the customer, if the customer can immediately recognize the product,

and it will reduce the seller's selling time and effort. When customers repeatedly buy by

brand, the seller is protected against competition from other companies. Good brands can

improve the company's image, and thus speed up acceptance of new products marketed under

the same company name.

Packaging involves promoting and protecting the product. This can be important to both

sellers and customers. It can make a product more convenient to use or store. It can prevent

spoiling or damage. Good packaging makes products easier to identify and promotes the

brand at the point of sale and even in use.

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In addition to branding and packaging if the formal product is a physical object, the market

may recognize it as having characteristics like a quality feel, specific features, as well as

styling. If it is a service, it may have some or all of these facets in an analogous manner.

The total product can also consist of elements like free delivery, installation, warranties,

services, maintenance systems, customer advice, financing and other things that customers

perceived to be of value.

INTERNATIONAL STRATEGIES

INVEST HEAVILY IN R&D- the main area where Telco can improve in its efforts to make

an impact in the global marketplace is by improving its R&D base and bringing it up to world

standards. Also Telco can get into strategic alliance with a international car manufacturer for

R&D support.

STRATEGIC TIE-UPS- the company should attempt to tie up with some Strategic Partners,

to help it gain entry into foreign markets. These partners should have competencies in the area

of cost management or R&D, or these companies might be suppliers who provide inputs in the

projects taken up by the company

Consumers of small cars are seeking a very good overall perform

Documents

A Project Report on TATA Motors