Table of Content
Sl. Topics Page
No.
01 About the Company 03
02 TATA Group Companies 07
03 TATA Motors Limited
Industry Outlook
History of TATA Motors
Important Developments
11
13
14
17
04 Advertisement Effectiveness
Types of Advertising
Advertising Objectives
Why and When to Advertise
20
22
24
26
05 Marketing Strategies of TATA Motors
Product
Price
Promotion
Place
33
35
36
36
37
06 Competitors of TATA Motors 38
07 SWOT Analysis 39
08 Market Segmentation of TATA Motors 42
09 How to get Prospect for Sale? 44
10 Globalization of TATA Motors – Strategic Plan 49
11 Various Advertisements of TATA Motors
TATA Nano – Celebrating Awesomeness
TATA Safari Dicor – Reclaim Your Life
Indica V2 Xeta – Indian Small Car
Modified TATA Sumo, Grande, Spacio & Victa
TATA Indigo
TATA Ace – Eak Kadam Aagey
50
50
58
60
65
67
68
12 Conclusion 71
13 Bibliography 72
TATA GROUP
Tata is a rapidly growing business group based in India with significant international
operations. Revenues in 2007-08 are estimated at $62.5 billion (around Rs251,543 crore), of
which 61 per cent is from business outside India. The Group employs around 350,000
people worldwide. The Tata name has been respected in India for 140 years for its
adherence to strong values and business ethics.
The business operations of the Tata Group currently encompass seven business
sectors: communications and information technology, engineering, materials, services,
energy, consumer products and chemicals. The Group’s 27 publicly listed enterprises have a
combined market capitalization of some $60 billion, among the highest among Indian
business houses, and a shareholder base of 3.2 million. The major companies in the Group
include Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata
Chemicals, Tata Tea, Indian Hotels and Tata Communications.
The Group’s major companies are beginning to be counted globally. Tata Steel
became the sixth largest steel maker in the world after it acquired Corus. Tata Motors is
among the top five commercial vehicle manufacturers in the world and has recently
acquired Jaguar and Land Rover. TCS is a leading global software company, with delivery
centres in the US, UK, Hungary, Brazil, Uruguay and China, besides India. Tata Tea is the
second largest branded tea company in the world, through its UK-based subsidiary Tetley.
Tata Chemicals is the world’s second largest manufacturer of soda ash. Tata
Communications is one of the world’s largest wholesale voice carriers.
In tandem with the increasing international footprint of its companies, the Group is
also gaining international recognition. Brand Finance, a UK-based consultancy firm,
recently valued the Tata brand at $11.4 billion and ranked it 57th amongst the Top 100
brands in the world. Businessweek ranked the Group sixth amongst the World’s Most
Innovative Companies. And the Reputation Institute, USA, recently rated it as the World’s
Sixth Most Reputed Firm.
Founded by Jamsetji Tata in 1868, the Tata Group’s early years were inspired by the
spirit of nationalism. The Group pioneered several industries of national importance in
India: steel, power, hospitality and airlines. In more recent times, the Tata Group’s
pioneering spirit has been showcased by companies like Tata Consultancy Services, India’s
first software company, which pioneered the international delivery model, and Tata Motors,
which made India’s first indigenously developed car, the Indica, in 1998 and recently
unveiled the world’s lowest-cost car, the Tata Nano, for commercial launch by end of 2008.
The Tata Group has always believed in returning wealth to the society it serves.
Twothirds of the equity of Tata Sons, the Tata Group.s promoter company, is held by
philanthropic trusts which have created national institutions in science and technology,
medical research, social studies and the performing arts. The trusts also provide aid and
assistance to NGOs in the areas of education, healthcare and livelihoods. Tata companies
also extend social welfare activities to communities around their industrial units. The
combined development-related expenditure of the Trusts and the companies amounts to
around 4 per cent of the Group’s net profits.
Going forward, the Group is focusing on new technologies and innovation to drive its
business in India and internationally. The Nano car is one example, as is the Eka
supercomputer (developed by another Tata company), which in 2008 is ranked the world’s
fourth fastest. The Group aims to build a series of world class, world scale businesses in
select sectors. Anchored in India and wedded to its traditional values and strong ethics, the
Group is building a multinational business which will achieve growth through excellence
and innovation, while balancing the interests of its shareholders, its employees and wider
society.
CORE VALUES OF TATA
At the Tata Group our purpose is to improve the quality of life of the communities we
serve. We do this through leadership in sectors of national economic significance, to which
the Group brings a unique set of capabilities.
This requires us to grow aggressively in focused areas of business. Our heritage of
returning to society what we earn evokes trust among consumers, employees, shareholders
and the community.
This heritage is being continuously enriched by the formalization of the high
standards of behavior expected from employees and companies. 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 sustained growth and long-term success.
FIVE CORE VALUES
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 we do 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 the
communities we serve.
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.
TATA Group Companies
Family pride
The TATA family of enterprises comprises 98 companies in seven business sectors.
This section lists all these companies under the sectors in which they operate, besides the
two promoter companies of the Group.
The Seven Business Sectors are:
Engineering (AUTOMOTIVE):
Tata Auto comp systems:
Subsidiaries/Associates/Joint Ventures: International Automotive, Knorr Bremse
Systems for commercial Vehicles, Tata Auto Comp GY Batteries, TACO
Engineering, TACO Faurecia Design Centre, TACO Hendrickson Suspension
Systems, TACO Interiors and Plastics Division, Taco Kunstofftechnik, TACO
MobiApps Telemaics, TACO Supply Chain Management, TACO Tooling, TACO
Visteon Engineering Center, Tata Ficosa Automotive Systems, Tata Johnson
Controls Automotive, Tata Toyo Radiator, Tata Yazaki Auto Comp, TC Springs,
Technical Stampings Automotive.
Tata Motors:
Subsidiaries /Associates/ Joint Ventures: Concorde Motors, HV Axels, HV
Transmissions, Nita Company, TAL Manufacturing Solutions, Tata Cummins, Tata
Daewoo Commercial Vehicles Company, Tata Engineering Services, Tata Precision
Industries, Tata Technologies, Telco construction Equipment.
Engineering Services
Tata Projects, TCE Consulting Engineers, Voltas
Engineering Products
TAL Manufacturing Solutions, Telco Construction Equipment Company, TRF
METALS:
TATA STEEL
Subsidiaries /Associates/ Joint Ventures: Hooghly Met Coke and Power Company,
Jamshedpur Injection Powder (Jamipol), Jamshedpur Utility and Service Company
Limited (JUSCO), Lanka Special Steel, Mjunction Serves, NatSteel, Sila Eastern
Company, Tata Blue Scope Steel, Tata Metallic, Tata Pigments, Tata Refractories,
Tata Ryerson, Tata Sponge Iron, Tata steel (Thailand), Tata Steel KZN, Tayo Rolls,
The Dhamra Port Company, The Indian Steel and Wire Products, The Tinplate
Company of India, Tm International Logistics, TRF.
ENERGY:
POWER
Tata BP Solar India
Tata Power
Subsidiaries /Associates/ Joint Ventures: Tata Ceramics, Tata Power Trading,
North Delhi Power Limited
OIL AND GAS
Tata Petrodyne
CHEMICALS:
Rallis India
Tata Pigments
Tata Pigments
PHARMA
Advinus Therapeutics
SERIVES:
HOTELS AND REALTY
Indian Hotels (Taj Group)
Subsidiaries /Associates/ Joint Ventures: Taj Air, Roots Corporation (Ginger
Hotels)
THDC
Tata Realty and Infrastructure
FINANCIAL SERVICES
Tata AIG General Insurance, Tata AIG Life Insurance, Tata Asset Management,
Tata Capital, Tata Financial Services, Tata Investment Corporation
OTHER SERVICES
Tata Quality Management Services, Tata Services, Tata Strategic Management
Group
CONSUMER PRODUCTS:
Infiniti Retail
Tata Tea
Subsidiaries /Associates/ Joint Ventures: Tata Coffee, Tata Tetley, Tata Tea Inc
Tata Ceramics
Tata McGraw Hill Publishing Company
Titan Industries
Trent
INFORMATION SYSTEMS AND COMMUNICATIONS:
Nelito Systems
Tata Consultancy Services
Subsidiaries /Associates/ Joint Ventures: APONLINE, Airline Financial Support
Services, Aviation Software Development Consultancy, CMC, CMC Americas Inc,
Conscripti, HOTV, Tata America International Corporation, WTI Advance
Technology.
Tata Elxsi
SerWizSol
Tata Interactive Systems
Tata Technologies
COMMUNICATIONS
Tata Sky
Tata Teleservices
Subsidiaries /Associates/ Joint Ventures: Tata Teleservices (Maharashtra)
Tata Communication
Tata Net
INDUSTRIAL AUTOMATION
Nelco
Subsidiaries /Associates/ Joint Ventures: Tatanet
TATA MOTORS LIMITED
The largest passenger automobile and commercial vehicle manufacturing company of
India Tata Motors Limited, was formerly called TELCO (TATA Engineering and
Locomotive Company), has its headquarters in Bombay, now Mumbai, India. Established in
1945, listed on the New York Stock Exchange in 2004 has created Rs. 320 billion wealth
and was one of the top 10 wealth creators in India, With manufacturing facilities in the
towns of Jamshedpur, Lucknow, and Pune. This company was founded by Jamshetji Tata
and is run by Ratan Tata under the flagship company known as Tata and sons group. He
commands 22000 employees working in three plants as well as other regional and zonal
offices across the length and breadth of India.
Tata motor’s passenger cars still need to reach acceptable international requirements.
The company commands an imposing 65% share of the domestic commercial vehicle
market and is trying to modernize this segment. The financial business of Tata motors was
separated into a subsidiary company in sep. 2006, where it recorded a strong financial
performance during the last 5 year period. From year 2003-2007, the profits of the company
went up at a CAGR of 36.4%, to attain Rs. 331, 525 million in 2007 from Rs. 95, 731
Million in 2003. By floating two rights issues at the end of Sep 2008 Tata Motors Ltd
expected to raise Rs 4, 150 crores. They are offering one ordinary share valued at Rs. 340
every six shares expecting to net Rs. 2.90 Crores, the so called “A” share would have
different voting and dividend rights, for every such 6 shares held at a face value of 305
would raise Rs. 1.960 Crores, these proceed would be utilized for an early repayment of the
short term funding of 2.3 Billion $ (Rs. 10,189 Crores) Borrowed for Acquisition of jaguar
and Land Rover from their principle “The Ford Motor Company’s”.
It is also in talks with private equity funds to offload 25% of stake in each of the
following 6 unlisted group units, they are Tata Daewoo commercial vehicle company, HV
transmissions, Tata motors finance, Tata technologies and TELCO construction equipment,
the sales of the stakes would possible conclude by June 2009, helping it to raise further
funds for this acquisition, earlier in July it sold 24% stake in an Auto component unit to a
group firm and booked a profit of Rs. 110 crores, it also sold 10 million shares or 1.36% of
Tata steel for RS. 486 crores to Tata Sons, the holding company of whole Tata group firms.
"The Company aims to monetize a part of its funds through a phased divestment of
certain investments preferably as inter-group sales wherever possible at current market
prices in the coming six to eight months," the money that will be released from these
investments will become a part of the capital to be lifted for repayment of the bridging loan
taken for the Jaguar-Land Rover acquisition. Taken in March 2008" (Tata Motors Profile)
It took a 15 month bridge loan of 3 billion in March from a consortium of banks to
finance the JLR accusation and its expansion plans Since the rights issue was announced on
28th may its share value has fallen more than 30% and fell by 1.82% to Rs. 429.85 on BSE,
even though the bench mark index gained 3.8% to end at 15, 049.86 points.
The Analysts say that, this is a strategic move taken by Tata Motors because it is
allowing the company to make a lot of profit even when the market is in the financial
pressure allows Tata sons to raise its wager in group companies.
If the company will follow the above mentioned trends then possibly it can raise its
finances in a low liquidity and high interest rate set-up.
INDUSTRY OUTLOOK
The Indian Automobile Industry enjoys the advantage of low cost base, high skilled
labour, strong ancillary network coupled with Government’s support by way of
concessional excise duty of 16% for small cars, ban on overloading and also significant
investments proposed for removing infrastructure bottlenecks. The CV industry is directly
related to the economic growth and development. The growth in demand for CVs is directly
related to the IIP index and any upsurge in economic activities will call for more cargo
movement in the economy.
The domestic CV market grew at a CAGR of 26.7% during the last 6 years. In FY07,
the CV segment registered a growth of 32.2% due to Supreme Court’s ban on over loading
trucks. However, we believe that this is a one-time demand and the CV segment may not
witness such kind of growth repeatedly. There is a regulation that restricts the movement of
vehicles above certain age (15 years in National Capital Region and 8 years in Mumbai).
Though the rule is not being followed strictly at present, in future if this rule is implemented
strictly it will result in huge replacement demand.
With the Indian economy expected to grow at 8.5% to 9% in coming years, we
expect the demand for CVs to be fairly decent except for the fact that the industry is
currently experiencing a correction due to sharp spurt in demand in the previous years.
The CV industry witnessed a change in demand dynamics in last few years. The
demand for LCVs in the <=3.5 tonnes segment is rising at the cost of demand in 5 to 7.5
tonnes category, while demand in 7.5 to 12 tonnes segment and 16.2 to 25 tonnes segment
is booming at the cost of demand in 12 to 16.2 tonnes segment. Demand for trailers of
>35.2 tonnes is witnessing a surge while demand for semi-trailers in 26.4 to 35.2 tonnes
segment is suffering. According to the Hub & Spoke model, HCVs plying over the
highways to transport goods to different states and districts, while MCVs are used in
distributing goods to different cities and the last leg of distribution in intra city is done by
using <=3.5 tonner vehicles.
History of TATA Motors
Tata Motors is a part of the Tata and Sons Group, founded by Jamshedji Nussarwanji
Tata and J. Baker. The company was
established in 1945 as a locomotive
manufacturing unit and later expanded its
operations to commercial vehicle sector in
1954 after forming a joint venture with
Daimler-Benz AG of Germany.
2. TATA Indica
After years of dominating the commercial vehicle market in India, Tata Motors
entered the passenger vehicle market in 1991 by launching the Tata Sierra, a multi utility
vehicle. After the launch of three more vehicles,
Tata Estate (1992, a stationwagon design based on
the earlier 'TataMobile' (1989), a light commercial
vehicle), Tata Sumo (LCV, 1994) and Tata Safari
(1998, India's first sports utility vehicle). Tata
launched the Indica in 1998, the first fully
indigenous passenger car of India. Though the car was initially panned by auto-analysts, the
car's excellent fuel economy, powerful engine and aggressive marketing strategy made it
one of the best selling cars in the history of the Indian automobile industry. A newer version
of the car, named Indica V2, was a major improvement over the previous version and
quickly became a mass-favourite. A badge engineered version of the car was sold in the
United Kingdom as the Rover CityRover. Tata Motors also successfully exported large
quantities of the car to South Africa.The success of Indica in many ways marked the rise of
Tata Motors.
3. TATA Brads
DAEWOO ACQUISITION
With the success of Tata Indica, Tata Motors aimed to increase its presence
worldwide. In 2004, it acquired the Daewoo Commercial Vehicle Company of South Korea.
The reasons behind the acquisition were:
Company’s global plans to reduce
domestic exposure. The domestic
commercial vehicle market is highly
cyclical in nature and prone to fluctuations
in the domestic economy. Tata Motors has
a high domestic exposure of ~94% in the
MHCV segment and ~84% in the light commercial vehicle (LCV) segment. Since the
domestic commercial vehicle sales of the company are at the mercy of the structural
economic factors, it is increasingly looking at the international markets. The
company plans to diversify into various markets across the world in both MHCV as
well as LCV segments.
To expand the product portfolio Tata Motors recently introduced the 25MT GVW
Tata Novus from Daewoo’s (South Korea) (TDCV) platform. Tata plans to leverage
on the strong presence of TDCV in the heavy-tonnage range and introduce products
in India at an appropriate time. This was mainly to cater to the international market
and also to cater to the domestic market where a major improvement in the Road
infrastructure was done through the National Highway Development Project
Tata remains India's largest heavy commercial vehicle manufacturer and Tata
Daewoo is the 2nd largest heavy commercial vehicle manufacturer in South Korea.
Tata Motors has jointly worked with Tata Daewoo to develop trucks such as Novus
and World Truck and buses namely, GloBus and StarBus.
HISPANO CARROCERA
In 2005, sensing the huge opportunity in the fully
built bus segment, Tata Motors became acquired 21%
stake in Hispano Carrocera SA, Aragonese bus
manufacturing company giving it controlling rights of
the company.
JAGUAR CARS AND LAND ROVER
After the acquisition of British Jaguar Land Rover (JLR) business, which also
includes the Rover, Daimler and Lanchester brand names Tata Motors became a major
player in the international automobile market.
Jaguar XF Land Rover's Range Rover
On 27 March 2008, Tata Motors reached an agreement with Ford to purchase their
Jaguar and Land Rover operations for US$2 billion. The sale was completed on 2 June 2008
Tata has gained the rights to the Daimler, Lanchester, and Rover brand names.
In addition to the brands, Tata Motors has also gained access to 2 design centers and
3 plants in UK. The key acquisition would be of the intellectual property rights related to
the technologies.
JOINT VENTURES
In 2005, sensing the huge opportunity in the fully built bus segment, Tata Motors
acquired 21% stake in Hispano Carrocera SA, Aragonese bus manufacturing
company and introduced its highend
inter-city buses in the country.
Tata Motors has also formed a 51:49 joint
venture with Marcopolo S.A., a Brazil-
based global leader, lead by Brian Behrle,
in bus body building. This joint venture is
to manufacture and assemble fully-built
buses and coaches targeted at developing
mass rapid transportation systems.
The joint venture will absorb technology and expertise in chassis and aggregates from
Tata Motors, and Marcopolo will provide know-how in processes and systems for
bodybuilding and bus body design.
IMPORTANT DEVELOPMENTS
In 2005 & 06
Tata Ace, India's first indigenously developed sub-one ton mini-truck, was launched
in May 2005. The mini-truck was a huge success in India with auto-analysts claiming that
Ace had changed the dynamics of the light
commercial vehicle (LCV) market in the country
by creating a new market segment termed the small
commercial vehicle (SCV) segment. Ace rapidly
emerged as the first choice for transporters and
single truck owners for city and rural transport. By
October 2005, LCV sales of Tata Motors had grown by 36.6 percent to 28,537 units due to
the rising demand for Ace. The Ace was built with a load body produced by Autoline
Industries.By 2005; Autoline was producing 300 load bodies per day for Tata Motors. Ace
is still one of the number makers for TML, TML sold the 2,00,000th Ace in August 2008,
within 4 years since its introduction.
Tata Ace has also been exported to several European, South American and African
countries. Electric-versions of Tata Ace are sold through Chrysler's Global Electric
Motorcars division.
In 2007
In 2007, Tata Motors launched several concept models and future designs of existing
models. It also formed joint ventures with various local companies in several countries to
assemble Tata cars. Tata Motors launched a re-designed version of Tata Xenon TL during
Motor Show Bologna which would be assembled in Thailand and Argentina. A pick-up
variant of Tata Sumo was also launched under the program 'Global Pick-Up'. The company
plans to launch the new pick-up model in India, Southeast Asia, Europe, South Africa,
Turkey and Saudi Arabia. Tata Motors also unveiled newer model of Tata Indigo and Tata
Elegante concept-car during the Geneva Auto Show.
Tata Motors also formed a joint venture with Fiat and gained access to Fiat’s diesel
engine technology. Tata Motors is looking to extend its relationship with Fiat and Iveco to
other segments like the 'Global Pick-Up' program. The launch of the 'Global Pick-Up' will
mark the entry of the company into developed markets like Europe and the United States.
The project was initially collaboration between Tata Motors and its subsidiary Tata Daewoo
Commercial Vehicles, but later Tata Motors decided to work with Iveco as Daewoo’s
design was not in sync with the needs of sophisticated European customers. The company
has formed a joint venture with Thailand’s Thonburi Company, an independent auto
assembler, in which Tata Motors will hold a 70% stake.
In 2008
COMPRESSED AIR CAR
Motor Development International of Luxembourg
has developed the world's first prototype of a compressed
air car, named OneCAT. In 2007, MDI owner Guy Negre
was reported to have "the backing of Tata".
It has air tanks that can be filled in 4 hours by plugging the car into a standard
electrical plug. In 2008 MDI planned to also design a gas station compressor, which would
fill the tanks in 3 minutes. There are no gasoline costs and no fossil fuel emissions from the
vehicle when run in town, but "the compressed air driving the pistons can be boosted by a
fuel burner".
OneCAT is a five seat vehicle with a 200-litre (7.1 cu ft) trunk. With full tanks it will
run at 100 km/h (62 mph) for 90 kilometers (56 mi) range in urban cycle. It is actually a
dual fuel car but it is more efficient than any present Hybrid cars.
IN 2009 AND ONWARDS
Electric vehicles
Tata Motors unveiled the electric versions of passenger car Tata Indica and
commercial vehicle Tata Ace. Both run on lithium batteries. The company has indicated
that the electric Indica would be launched locally in India in about 2010, without disclosing
the price. The vehicle would be launched in Norway in 2009.
Tata Motors' UK subsidiary, Tata Motors European Technical Centre, has bought a
50.3% holding in electric vehicle technology firm Miljøbil Grenland/Innovasjon of Norway
for US$1.93 M, which specialises in the development of innovative solutions for electric
vehicles, and plans to launch the electric Indica hatchback in Europe next year.
Advertising Effectiveness
The objectives of all business are to makes profits and a merchandising concern can
do that by increasing its sales at remunerative prices. This is possible, if the product is
widely polished to be audience the final consumers, channel members and industrial users
and through convincing arguments it is persuaded to buy it. Publicity makes a thing or an
idea known to people. It is a general term indicating efforts at mass appeal. As personal
stimulation of demand for a product service or business unit by planting commercially
significant news about it in a published medium or obtaining favourable presentation of it
upon video television or stage that is not paid for by the sponsor.
On the other hand, advertising denotes a specific attempt to popularize a specific
product or service at a certain cost. It is a method of publicity. It always intentional openly
sponsored by the sponsor and involves certain cost and hence is paid for. It is a common
form of non- personal communication about an organisation and or its products idea service
etc. that is transmitted to a target audiences through a mass medium. In common parlance
the term publicity and advertising are used synonymously.
What is Advertising :
The word advertising is derived from the Latin word viz, "advertero" "ad" meaning
towards and "verto" meeting towards and "verto" meaning. "I turn" literally specific thing".
Simply stated advertising is the art "says green." Advertising is a general term for and
all forms of publicity, from the cry of the street boy selling newspapers to the most
celebrate attention attracts device. The object always is to bring to public notice some
articles or service, to create a demand to stimulate buying and in general to bring logethel
the man with something to sell and the man who has means or desires to buy".
Advertising has been defined by different experts. Some of the quoted definition are :
American marketing association has defined advertising as "any paid form of non
personal presentation and promotion of ideas, goods or services by an identified sponsor.
The medium used are print broad cast and direct.
Stanton deserves that "Advertising consists of all the activities involved in presenting
to a group a non- personal, oral or visual openly, sponsored message regarding a product,
service, or idea. This message called an advertisement is disseminated through one or more
media and is paid for by the identified sponsor.
Advertising is any paid form of non – personal paid of presentation of ideas goods or
services by an identified sponsor.
Advertising is a "non- personal paid message of commercial significance about a
product, service or company made to a market by an identified sponsor.
In developing an advertising programme, one must always start by identifying the
market needs and buyer motives and must make five major decisions commonly referred as
5M (mission, money message, media and measurement) of advertising.
Basic Features of Advertising
On the basis of various definitions it has certain basic features such as :
1. It is a mass non-personal communication.
2. It is a matter of record.
3. It persuades buyers to purchase the goods advertised.
4. It is a mass paid communication.
5. The communication media is diverse such as print (newspapers and magazines)
6. It is also called printed salesmanship because information is spread by means of the
written and printed work and pictures so that people may be induced to act upon it.
Functions of Advertising
For many firms advertising is the dominant element of the promotional mix
particulars for those manufacturers who produce convenience goods such as detergent, non
prescription drugs, cosmetics, soft drinks and grocery products. Advertising is also used
extensively by maters of automobiles, home appliances, etc, to introduce new product and
new product features its uses its attributes, pt availability etc.
Advertising can also help to convince potential buyers that a firms product or service
is superior to competitors product in make in quality, in price etc. it can create brand image
and reduce the likelihood of brand switching even when competitors lower their prices or
offer some attractive incentives.
Advertising is particularly effective in certain other spheres too such as :
i) When consumer awareness of products or service is at a minimum.
ii) When sales are increasing for all terms in an industry.
iii) When a product is new and incorporates technological advance not strong and.
iv) When primary buying motive exists.
It performance the following functions :
i) Promotion of sales
ii) Introduction of new product awareness.
iii) Mass production facilitation
iv) Carry out research
v) Education of people.
TYPES OF ADVERTISING
Broadly speaking, advertising may be classified into two categories viz., product and
institutional advertising.
a) Product Advertising
The main purpose of such advertising is to inform and stimulate the market about the
advertisers products of services and to sell these. Thus type of advertising usually promote
specific, trended products in such a manner as to make the brands seam more desirable. It is
used by business government organization and private non-business organizations to
promote the uses features, images and benefits of their services and products. Product
advertising is sub-divided into direct action and indirect action advertising, Direct action
product advertising wages the buyer to take action at once, ice he seeks a quick response to
the advertisement which may be to order the product by mail, or mailing a coupon, or he
may promptly purchase in a retail store in response to prince reduction during clearance
sale.
Product advertising is sub-divided into direct & indirect action advertising & product
advertising aims at informing persons about what a products is what it does, how it is used
and where it can be purchased. On the other hand selective advertising is made to meet the
selective demand for a particular brand or type is product.
b) Institutional Advertising :
It is designed to create a proper attitude towards the sellers to build company image
or goodwill rather than to sell specific product or service. Its purpose is to create a frame of
mind and to implant feeling favourable to the advertisers company. Its assignment is to
make friends for the institution or organization.
It is sub-divided into three categories : patronage, public, relations and public service
institutional advertising.
i) In patronage institutional advertising the manufacturer tells his prospects and
customer about himself his policies and lives personnel. The appeals to the patronage
motivation of buyers. If successful, he convince buyers that his operation entitles him
to the money spent by them.
ii) Public relations institutional advertising is used to create a favourable image of the
firm among employees, stock-holders or the general public.
iii) Public service institutional advertising wages public support.
c) Other Types :
The other types are as follows :
i) Consumer advertising
ii) Comparative advertising
iii) Reminder advertising
iv) Reinforcement advertising
ADVERTISING OBJECTIVES
The long term objectives of advertising are broad and general, and concern the
contribution advertising should make to the achievement of overall company objectives.
Most companies regard advertisingly main objective as hat of proving support to personal
selling and other forms of promotion. But advertising is a highly versatile communications
tools and may therefore by used for achieving various short and long term objectives.
Among these objectives are the following :
1. To do the entire selling job (as in mail order marketing).
2. To introduce a new product (by building brand awareness among potential buyers).
3. To force middlemen to handle the product (pull strategy).
4. To build brand preference 9by making it more difficult for middleman to sell
substitutes).
5. To remind users to buy the product (retentive strategy).
6. To publicize some change in marketing strategy (e.g., a price change, a new model or
an improvement in the product).
7. To provide rationalization (i.e. Socially acceptable excuses).
8. To combat or neutralize competitors advertising.
9. To improve the moral of dealers and/or sales people (by showing that the company is
doing its share of promotion).
10. To acquaint buyers and prospects with the new uses of the product (to extend the
PLC).
BENEFITS
The functions of advertisement, and that purpose its ethics, may be discussion below :
1. It leads to cheaper prices. "No advertiser could live in the highly competitive arena of
modern business if his methods of selling were more costly than those of his rivals."
2. It acquaints the public with the features of the goods and advantages which buyers
will enjoy.
3. It increases demand for commodities and this results in increased production.
Advertising :
a) Creates and stimulates demand opens and expands the markets;
b) Creates goodwill which loads to an increase in sales volume;
c) Reduces marketing costs, particularly product selling costs.
d) Satisfied consumer demands by placing in the market what he needs.
4. It reduces distribution expenses in as much as it plays the part of thousands of
salesman at a home. Information on a mass scale relieves the necessity of expenditure
on sales promotion staff, and quicker and wider distribution leads to diminishing of
the distribution costs.
5. It ensures the consumers better quality of goods. A good name is the breath of the life
to an advertiser.
6. By paying the way for large scale production and increased industrialization,
advertising contributes its quota to the profit of the companies the prosperity of the
shareholder the uplifts of the wage earners and the solution of he unemployment
problem.
7. It raises the standard of living of the general public by impelling it to use to articles
of modern types which may add to his material well being. "Modern advertising has
made the luxuries of yesterday the necessities of today ..................... It is a positive
creative force in business. It makes two blades of grass grow in the business world
where one grew before.
8. It establishes the goodwill of the concern for the test articles produced by it and in
course of time they sell like not cakes consumer search for satisfaction of their needs
when they purchase goods what they want from its beauty, superiority, economy,
comfort, approval, popularity, power, safety, convenience, sexual gratification and so
on. The manufactures therefore tries to improve this goodwill and reputation by
knowing the buyer behaviour.
To sum up it may be said that advertising aims at committing the producers,
educating the consumer, supplementing the salesman converting the producer and the
dealer to eliminate the competitor, but above all it is a link between the produce and
the consumer.
WHY & WHEN TO ADVERTISE
Advertising as a tool to marketing not only reaches those who buy , but also those
whose opinions or authority is counted for example a manufacturer of marble tiles and
building boards advertises not only to people who intend to build houses but also to
architect and engineers. While the manufacturers of pharmaceuticals products advertise to
doctors as well as to the general public. At time it is necessary for a manufacturer or a
concern to advertise things which it does not sell but which when sold stimulates the sales
of its own product. There are concerns like electric heaters, iron etc. because the use of
these increases the demand for their products.
Advertising should be used only when it promises to bring good result more
economically and efficiently as compared to other means of selling. There are goods for
which much time and efforts are required in creating a demand by sending salesman to
prospective buyers than by simply advertising them. In the early days of the cash register in
America it was sold by specially trained salesman who called on the prospective users and
had the difficult task of convincing them that they could no longer carry on with the old
methods, and that they urgently needed a cash register. In our country certain publishers
have found it less costly to sell their books by sending salesman from house to house among
prospective buyers than to advertise them. In these two examples the cost of creating
demand would be too high if attempted by advertising alone under such circumstances
advertising is used to make the salesman acceptable to the people they call upon to increase
the confidence of the public in the house. Naturals when there are good profits competitors
will be attracted and they should be kicked out as and when sufficient capital is available by
advertising on a large scale. Immediate result may not justify the increased expenditure but
it will no doubt secure future sales.
DESIGNING ADVERTISING CAMPAIGN :
An advertising is an organized series of advertising messages. It has been defined as
"a planned, co-ordinate series of promotional efforts built around a central theme and
designed to reach a specified goals." In other words, it is an orderly planned effort
consisting of related but self – contained and independent advertisements. The campaign
may appear in one more media . it has single theme or keynote idea and a single objective
or goal. Thus, "a unified theme of content provides psychological continuity throughout the
campaign while visual and oral similarity provide physical continuity. In short run, all
campaign want pre-determined psychological reaction in the long run, practically all
campaigns have sales goal.
The series of advertisements used in the campaign must be integrated with the sales
promotional efforts and with the activities of the sales force.
Campaign vary in length some may run only for a few days, other for weeks, yet
other for a season or the entire year. Usually a range of 3 to 6 months includes many
campaigns. Many factors influences campaign length such as competitors advertising
media, policies, seasonal falls curves of the product involved, the size of the advertising
funds, campaign objectives and the nature of the advertisers marketing programme.
OBJECTIVES OF CAMPAIGN
The advertising campaign, especially those connected with the consumers aims at
achieving these objectives :
i) To announce a new product or improve product.
ii) To hold consumers patronage against intensified campaign use.
iii) To inform consumers about a new product use.
iv) To teach consumers how to use product.
v) To promote a contest or a premium offer.
vi) To establish a new trade regional, and
vii) To help solve a coca regional problem.
The institutional advertising campaign on the other hand, have these objectives.
i) To create a corporate personality or image.
ii) To build a company prestige.
iii) To keep the company name before the public.
iv) To emphasize company services and facilities.
v) To enable company salesman to see top executive consistently when making
sales calls, and
vi) To increase friendliness and goodwill towards the company.
Developing the campaign programmes. The advertising campaigns are prepared by
the advertising agencies, which work an behalf of their clients who manufacture product or
service enterprises, which have services to sell. The word campaign is used because
advertising agencies approach their task with a sum Blanca of military fanfare in which one
frequently hears words like target audience logistics, zero in and tactics and strategy etc.
The account executive co-ordinates the work in a campaign. The creation of an
advertising campaign starts with an exploration of consumers habits and psychology in
relation to the product. This requires the services of statistical trained in survey techniques
and of others trained in social psychology. Statisticians select samples for survey which are
done by trained interviewers who visits individuals, included in the sample and ask question
to find out about their taste and habits.
This enquiry often leads to a change in a familiar product. For instance bathing soap
may come in several new colours or cigarette in a new packet or talcum powder in another
size.
Such interviews are often quite essential to find out the appeal of advertising message
for a product that would be most effective with consumers.
David Ogilvy describes a consumers survey to find out the most meaningful benefit
in which women are interested when they buy a face cream. The largest preference as given
to "Cleans deep into pores" followed in order of importance by prevent dryness, "is a
complete beauty treatment, recommended by skin doctors" makes skin look younger'
contains estrogenic hormones, pasteurized for purity, prevent skin form aging, smooth our
wrinkles ogilvy concludes, form this voting come one of Helena Rubinstein's most
successful face creams. We christened it deep cleanser, thus, building the winning form into
name of the product.
After getting the data the account executive puts together the essential elements of his
clients brief, interprets the research findings and draws up what he calls the "advertising
strategy".
STAGE IN ADVERTISING CAMPAIGN
Several steps are required to developed an advertising campaign the number of stages
and exact order in which they are carried out may vary according to an organisations
resources, the nature of its product and the types of audiences to be reached. The major
stages/step are :
1. Identifying and analyzing the advertising.
2. Defining advertising objects.
3. Creating the advertising platform.
4. Determining the advertising appropriation.
5. Selection media plan.
6. Creating the advertising message.
7. Evaluating the effectiveness of advertising.
8. Organizing of advertising campaign.
1. Identifying & Analyzing the Advertising target :
Under this step it is to decided as to whom is the firm trying to reach with the
message. The advertising target is the group of people towards which advertisements are
aimed at four this purpose complete information about the market target i.e. the location and
geographical location of the people, the distribution of age, income, sex, educational level,
and consumers attitudes regarding purchase and use both of the advertising product and
competing products is needed with better knowledge of market target, effective advertising
campaign can be developed on the other hand, if the advertising target is not properly
identified and analyzed the campaign is does likely to be effective.
2. Determining the advertising objectives :
The objectives of advertisement must be specifically and clearly defined in
measurable terms such as "to communicate specific qualities about a particulars product to
gain a certain degree of penetration in a definite audience of a given size during a given
period of time", increase sales by a certain percentage or increase the firms market shares."
The goals of advertising may be to :
a. Create a favourable company image by acquainting the public with the services
offered available to the employees and its achievements.
b. Create consumers or distributor awareness by encouraging requests providing
information about the types of products sold; providing information about the
benefits to be gained from use of the company's products or services; and
indicating how product (or services) can be used;
c. Encourage immediate sales by encouraging potential purchasers through
special sales contests, getting recommendation of professional people about
company's products etc.
d. It secures action by the reader through associating ideas, repetition of the same
name in different contexts, immediate action appeal.
3. Creating the Advertising platform :
An advertising platform consists of the basic issues or selling points that an advertiser
wishes to include in the advertising campaign. A single advertisement in an advertising
campaign may contain one or more issues in the platform. A motorcycle producers
advertising platform should contain issues which are of importance to consumers filling and
such issues also be those which the competitive product do not posses.
4. Determining the Advertising Appropriation:
The advertising appropriation is the total amount of money which marketer allocates.
For advertising for a specific time period. Determining the campaign budget involves
estimating now much it will cost to achieve the campaigns objectives. If the campaign
objectives are profit relating and stated quantitatively, then the amount of the campaign
budget is determined by estimating the proposed campaigns effectiveness in attaining them.
If campaigns object is to build a particular type of company image, then there is little basis
for predicting either the campaigns effectiveness or determining the budget required.
5. Selecting the Media :
Media selection is an important since it costs time space and money various factors
influence this selection, the most fundamental being the nature of the target market
segment, the type of the product and the cost involved. The distinctive characteristics of
various media are also important. Therefore management should focus its attention on
media compatibility with advertising objectives.
Media Form
1. Press Advertising or Print
i) Newspapers City, Small town, Sundays, Daily, weekly, Fortnightly, quarterlies, financial and annuals, English, vernacular or regional languages.
ii) Magazines General or special, illustrated or otherwise, English, Hindi, Regional language.
iii) Trade & Technical Journals, Industrial year books, commercial, directories, telephone, Directories, references books & annuals.
Circulated all over the country and among the industrialist and business magnates.
2. Direct Mail Circulars, catalogues, leaflets, brochures, booklets, folders, colanders, blotters, diaries & other printed material.
3. Outdoor or Traffic Poster and bills on walls, railways stations platforms outside public buildings trains, buses.
4. Broadcast or radio and T.V. Spot, Sectional or national trade cost
5. Publicity Movie Slides and films non theatrical and documentary films metal plates and signs attaches to trees.
6. House to house Sampling , couponing, free gifts, novelties, demonst-rations.
7. Dealer aids Counter and widows display demonstration given by retailer or the advertises goods.
8. Internet Today, Internet is a big spot for advertising.
So these are the media of the advertising campaign of the selecting of the media.
6. Creating the Advertising Messages :
This is an important stage of advertising campaign. The contents of the message has
to be very carefully drafted in the advertisement. Characteristics of person in the advertising
target influence the message content and form. An advertisers must use words, symbols and
illustration that are meaningful, familiar and attractive to those persons. The type of media
also influence the content and form of the message.
7. Evaluating the Effectiveness of Advertising :
The effectiveness of advertising is measured for a variety of reasons :
a) To determine whether a campaign accomplished its advertising objects.
b) To evaluate the relative effectiveness of several advertisements to ascertain
which copy, illustrations or layout is best.
c) To determine the strengths and weaknesses of various media and media plans.
In other words, measuring advertising effectiveness is needed to determine whether
proposed advertisement should be used and if they will be now they might be improved;
and whether going campaign should be stopped, continued or changed. In accomplishing
these purposes, pretests and post test are conducted. The former tests before exposing target
consumers to advertisements and the letter after consumers have been exposed to
advertisements and the letter after consumers have been exposed to advertisements.
For an effective advertising programme, the advertising manager requires a basic
understanding of the medium that is going to carry it.
For effectively using advertising the management must test advertising to know which of
the advertisement to know which of the advertisement have proved profitable and why as
compared to others.
Marketing strategies of Tata motors
1. Product, Branding, and Advertising
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. Another more important way of advertising is to
create an image or brand image. Take BMW Z3 for example, it was introduced in 1996 and
shortly the car has been used in the famous James Bond movie. This is similar to Nissan
350 Fairlady Z in the recent 2007 Fast and the Furious 3 – Tokyo Drift. Over the years Tata
Motors have been successful in creating their brand image especially they use some famous
stars as their spokesman.
Other important marketing strategies are such as the packaging, innovations, and
quality control. Tata Motors provide many innovative features to attract car lover. One of
these innovations is the Tata Safari 4X4Dicor that has “Reverse Guide System”. A
weather-proof camera is fixed to the rear car to help the driver while reversing the car.
2. Pricing Strategy
There are various factors to determine a price of a car. These factors are such as
market condition (it can’t be too low or too high with the prices of same vehicle from
competitors, it has to be at par), cost incurred to build a car, profit by company, dealer
profit.
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 Company’s profit or
from dealer’s profit at certain range.
3. 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.
4. Maintenance and Support
After sales service is also another important marketing strategy for most of the car
buyer to choose for the right car. End user will not want to spend a lot of time to travel to a
far place just to service the car such as change engine oil, oil filter and some simple
checking. Parts and accessories must also easy to access when it is needed to keep the
customer satisfy from buying Tata cars until maintaining the car or even until they sell the
car and change to a newer Tata model.
Marketing strategies of Tata motors
Marketing is the process by which a product or service originates and is then priced,
promoted, and distributed to consumers. The principal marketing functions involve market
research and product development, design, and testing. It is the business activity of
presenting products or services in such a way as to make them desirable.
One has to consider promotion that is balanced with a suitable product available at a
reasonable price, provided at all places to maximize the sale of one’s product.
MARKETING MIXPRODUCT PRICE PROMOTION PLACE
Brand Pricing Strategy Personal Selling Channels of DistributionsPackaging Pricing & Quality Advertising Physical Distribution
Innovations Price & Alterations Public Relations Wholesaler & RetailersQuality Discounts
1. PRODUCT (Brand, Packaging, Innovations, Quality) :
a) Brand : Advertising is often used to make consumers aware of a product’s special
low price or its benefits. But an even more important function of advertising is to
create an image that consumers associate with a product, known as the brand image.
The brand image goes far beyond the functional characteristics of the product. The
products of Tata Motors have many special characteristics to them, but when
consumers think of it, they not only think of its features, but they may also associate
it with quality, performance, class. All of these meanings have been added to the
product by advertising. Consumers frequently buy the product not only for its
functional characteristics but also because they want to be identified with the image
associated with the brand. Tata Motors have been successful in creating and
maintaining a professional brand image.
b) Packaging : A vehicle cannot have a material packaging. Here, packaging refers to
and effective assembly of features. Tata Motors provide many innovative features to
suit the target customers and the product. E.g. Tata Safari Dicor has ‘Reverse Guide
System’ which includes a weather-proof camera to help the driver while reversing the
vehicle.
c) Innovations : The various motives behind buying an automobile are Need, Prestige,
Comfort, Fashion, Jealousy and Novelty. The R & D Department continuously strives
to bring new innovations in their product. Tatas have an industrial experience of over
100 years and they are well known with the Psychology of Indian customers, who
desire more at less price. This experience has helped them to develop products which
fulfill the expectations of Indian consumers.
d) Quality Control : Tata Motors have their Quality Control standards and the QC
Dept. ensures that the customer does not face any inconveniences of a defective
product.
2. PRICE (Pricing Strategy, Alterations, Discounts)
a) Pricing Strategy : The prices are fixed keeping in mind a number of factors. As told
by Mr. Desai, prices have to be at par with the prices of the competitors. Tata Motors
give a relative price advantage as compares to its competitors. The various
determinants of price are
i. Market Condition
ii. Costs incurred
iii. Profit percentage desired by the Co.
iv. Dealer Profit
b) Alterations : The Company does not allow any alterations to any of the features of
the product. If there is an alteration which affects the performance of the engine, then
the warranty becomes void. However, there may be alterations in the accessories, if
desired by the customer.
c) Discounts : Discounts are decided by the Co. every month. Any further discounts
made from the profits of the dealer. However, the Co. may compensate the dealer for
the discounts allowed to a certain extent.
3. PROMOTION (Personal Selling, Advertising, Sales Promotion, Public Relations)
a) Personal Selling : There is minimal personal selling involved. The Sales Officers at
the dealerships collect prospective customer databases and perform cold calling to
attract customers.
b) Advertising : Advertising is a form of commercial mass communication designed to
promote the sale of a product or service. Tata Motors is responsible for the
advertising of its products. The dealer does play any role in the advertising. The
various media used for advertising are T.V., Newspapers, Magazines, Hoardings,
Internet etc. The dealer conducts point-of-purchase displays to advertise the products.
The advertisements done by the Co. help the dealer to capitalize on the market.
c) Sales Promotion : The purpose of sales promotion is to supplement and coordinate
advertising and personal selling; Sales promotions are designed to persuade
consumers to purchase immediately by providing special incentives such as cash
rebates, prizes, extra product, or gifts. The Co. conducts intensive sales promotion
during festivals such as festive discounts during Diwali.
d) Public Relations : Public Relations is a management function that creates, develops,
and carries out policies and programs to influence public opinion or public reaction
about an idea, a product, or an organization. The Co. takes serious measures to
maintain good public relations. The Co. follows business ethics to ensure that the
customer is satisfied and receives good service whenever and wherever he desires
4. PLACE (Channels of Distribution, Physical Distribution)
a) Channels of Distribution : In case of vehicles, dealership method of distribution and
sales is generally adopted. Tata Motors have also adopted dealership method of
distribution of its products. The dealers purchase products from the Co. at a
negotiated price. The MRP is fixed by the Co. and the dealer gets a profit within
these prices. As the Co. deals in commercial and passenger vehicles, there may be a
single or distinct dealerships to market its commercial and passenger vehicles in a
town. However, if there is a single dealership appointed, then the commercial and
passenger vehicles are managed under Commercial Vehicles Dept. and Passenger
Vehicles Dept. respectively.
Tata Motors have contracts with the Government of India and it supplies buses
and passenger vehicles, in some cases, to the Govt. Sometimes, bulk quantities of
vehicles are ordered by a Govt. Dept. or a private company. The sales, distribution
and billing of these are looked after by the Co. itself.
b) Physical Distribution : The commercial vehicles are manufactured at Jamshedpur,
Lucknowand Pantnagar whereas the passenger vehicles are manufactured at Pune
plant. From the plant, the finished product is transported to the dealerships. The
nation-wide dealership, sales, services and spare parts network comprises over 2,000
touch points. The dealerships are strategically located in the target and potential
markets to ensure efficient and timely availability of its products in the market.
Competitors of TATA Motors
Tata Motors enjoys giant-sized growth thanks to its Nano cars. The
company -- India's largest automobile maker by sales -- makes buses, trucks, tractor-trailers,
passenger cars (Indica, Indigo, Jaguar, Land Rover, Safari, Sumo, and the popular micro car
Nano), light commercial vehicles, and utility vehicles. It also makes construction equipment
and provides IT services. Tata Motors sells through more than 1,000 dealers in India, as
well as exports vehicles to countries in Africa, Asia, Europe, the Middle East, and South
America. In addition, the company distributes Fiat-brand cars in India through its Tata-Fiat
dealer network.
Top Competitors for TATA MOTORS LIMITED
Ford Motor Company
General Motors Company
Suzuki Motor Corporation
SWOT Analysis - Tata Motors Limited
The company began in 1945 and has produced more than 4 million vehicles. Tata
Motors Limited is the largest car producer in India. It manufactures commercial and
passenger vehicles, and employs in excess of 23,000 people.
Strengths
o The internationalisation strategy so far has been 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. For
example after the Daewoo acquisition the Indian company leaned work discipline and
how to get the final product 'right first time.'
o The company has a strategy in place for the next stage of its expansion. Not only is it
focusing upon new products and acquisitions, but it also has a programme of
intensive management development in place in order to establish its leaders for
tomorrow.
o The company has had a successful alliance with Italian mass producer Fiat since
2006. This has enhanced the product portfolio for Tata and Fiat in terms of
production and knowledge exchange. For example, the Fiat Palio Style was launched
by Tata in 2007, and the companies have an agreement to build a pick-up targeted at
Central and South America.
Weaknesses
o 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.
o Despite buying the Jaguar and Land Rover brands (see opportunities below); Tat has
not got a foothold in the luxury car segment in its domestic, Indian 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?
o One weakness which is often not recognised is that in English the word 'tat' means
rubbish. Would the brand sensitive British consumer ever buy into such a brand?
Maybe not, but they would buy into Fiat, Jaguar and Land Rover (see opportunities
and strengths).
Opportunities
o In the summer of 2008 Tata Motor's announced that it had successfully purchased the
Land Rover and Jaguar brands from Ford Motors for UK £2.3 million. Two of the
World's luxury car brand have been added to its portfolio of brands, and will
undoubtedly off the company the chance to market vehicles in the luxury segments.
o Tata Motors Limited acquired Daewoo Motor's Commercial vehicle business in 2004
for around USD $16 million.
o 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!
o The new global track platform is about to be launched from its Korean (previously
Daewoo) plant. Again, at a time when the World is looking for environmentally
friendly transport alternatives, is now the right time to move into this segment? The
answer to this question (and the one above) is that new and emerging industrial
nations such as India, South Korea and China will have a thirst for low-cost
passenger and commercial vehicles. These are the opportunities. However the
company has put in place a very proactive Corporate Social Responsibility (CSR)
committee to address potential strategies that will make is operations more
sustainable.
o The range of Super Milo fuel efficient buses are powered by super-efficient, eco-
friendly engines. The bus has optional organic clutch with booster assist and better air
intakes that will reduce fuel consumption by up to 10%.
Threats
o Other competing car manufacturers have been in the passenger car business for 40,
50 or more years. Therefore Tata Motors Limited has to catch up in terms of quality
and lean production.
o Sustainability and environmentalism could mean extra costs for this low-cost
producer. This could impact its underpinning competitive advantage. Obviously, as
Tata globalises and buys into other brands this problem could be alleviated.
o 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. For example ICICI bank and DaimlerChrysler have invested in a
new Pune-based plant which will build 5000 new Mercedes-Benz per annum. Other
players developing luxury cars targeted at the Indian market include Ford, Honda and
Toyota. In fact the entire Indian market has become a target for other global
competitors including Maruti Udyog, General Motors, Ford and others.
o Rising prices in the global economy could pose a threat to Tata Motors Limited on a
couple of fronts. The price of steel and aluminium is increasing putting pressure on
the costs of production. Many of Tata's products run on Diesel fuel which is
becoming expensive globally and within its traditional home market.
Marketing Strategies of Tata Motors
4 types of Market segmentation and how to segment with them?
Market segmentation is one of the oldest marketing trick in the books. With the
customer population and preferences becoming more wider, and the competitive options
becoming more available, market segmentation has become critical in any business or
marketing plan. In fact, people launch
products keeping the market
segmentation in mind.
There are three ways to
classify what the customer wants. It is
known as needs, wants and
demands. However, to decide the needs, wants and demands, you need to carry out
segmentation first. And in segmentation, the first step is to define your target audience.
Who would want your product and whether it falls in the needs segment, the wants segment
or the demands segment. Once you decide the product you are going to make, then you
decide on the market segmentation.
There are 4 different types of market segmentation and all of them vary in their
implementation in the real world. Let us discuss each of them in detail.
Demographic segmentation – Demographic segmentation is one of the simplest and most
widest type of market segmentation used. Most companies use it to get the right population
in using their products. Segmentation generally divides a population based on variables.
Thus demographic segmentation too has its own variables such as Age, gender, family size,
income, occupation, religion, race and nationality. To read more, click on this link
for demographic segmentation.
Demographic segmentation can be seen applied in the automobile market. The
automobile market has different price brackets in which automobiles are manufactured. For
example – Maruti has the low price bracket and therefore manufactures people driven cars.
Audi and BMW have the high price bracket so it targets high end buyers. Thus in this case,
the segmentation is being done on the basis of earnings which is a part of demography.
Similarly, Age, life cycle stages, gender, income etc can be used for demographic type of
market segmentation.
Behavioral segmentation – This type of market segmentation divides the population on the
basis of their behavior, usage and decision making pattern. For example – young people
will always prefer Dove as a soap, whereas sports enthusiast will use Lifebuoy. This is an
example of behavior based segmentation. Based on the behavior of an individual, the
product is marketed. This type of market segmentation is in boom especially in the smart
phone market. For example – Blackberry was launched for users who were business
people, Samsung was launched for users who like android and like various applications for
a free price, and Apple was launched for the premium customers who want to be a part of a
unique and popular niche.
Another example of behavioral segmentation is marketing during festivals. Say on
christmas, the buying patterns will be completely different as compared to buying patterns
on normal days. Thus, the usage segmentation is also a type of behavioral segmentation. To
read more in depth about behavioral segmentation, do read this article.
Psychographic segmentation – Psychographic segmentation is one which uses peoples
lifestyle, their activities, interests as well as opinions to define a market segment.
Psychographic segmentation is quite similar to behavioral segmentation. But psychographic
segmentation also takes the psychological aspects of consumer buying behavior into
accounts. These psychological aspects may be consumers lifestyle, his social standing as
well as his AIO. Do refer more to Activities, interests and opinions.
Application of psychographic segmentation can be seen all across nowadays. For example
– Zara markets itself on the basis of lifestyle, where customers who want the latest and
differential clothing can visit the Zara stores. Similarly Arrow markets itself to the premium
office lifestyle where probably your bosses and super bosses shop for the sharp clothing.
Thus, this type of segmentation is mainly based on lifestyle or AIO.
Geographic segmentation – This type of market segmentation divides people on the basis
of geography. Your potential customers will have different needs based on the geography
they are located in. In the article on geographic segmentation, i have explained how people
who are located in non municipal areas might require a RO water purifier whereas those
located in municipal areas might need UV based purifiers. Thus, the need can vary on the
basis of geography.
Similarly in cold countries, the same company might be marketing for heaters
wheresa in hot countries, the same company might be targeting air conditioners. Thus,
many companies use geographic segmentation as a basis for market segmentation. This type
of segmentation is the easiest but it was actually used in the last decade where the industries
were new and the reach was less. Today, the reach is high but still geographic segmentation
principles are used when you are expanding the business in more local areas as well as
international territories.
Thus, the above are the 4 main types of market segmentation. Usage based market
segmentation, price based market segmentation, all these different types of segmentation are
a derivative of the above 4 types only. So what type of market segmentation can you use for
business and how would you like to implement segmentation?
How to get prospects for sales?
One of the many challenges which a sales guy faces is getting the right prospects for
his products or services. Thus, many sales guys are found asking how to get prospects for
sales? There is a subtle difference between a suspect and a prospect. A suspect is a
customer who can buy the product. The prospect is a customer who ismore likely to buy the
product or the service. For example – If you are working with a company, you are a suspect
for buying a house. But if you have the earnings and you are looking for homes currently,
then you are a prospect, because you are more likely to purchase the house.
When you have good prospects, sales becomes easier because you have leads which
are likely to convert and give you good sales figures. Thus, the challenge of the sales guy is
to find the right prospects. The below mentioned 6 sources are the best ones toget
prospects for sales guys.
1) Get leads from existing customers – The top sales people use this tactic to get the
maximum sales. There are two main reasons that using a reference from existing customers
really works towards prospecting. One reason is that the existing customer might already be
satisfied with your product, in which case he is likely to refer you to others who are also in
need of the product (you directly get
hot prospects). The other reason is that
a reference generates trusts in the
person who has been referred. Thus, if
you show the example of the existing
customer to the new referral, you will
get the conversion easily. Getting
references from existing customers is
an excellent idea to get good
prospects.
2) Trade directories – If you want to establish a new market, or want to expand into an
existing market, then trade directories are your best friends. This is because most businesses
in an existing area will be present in trade directories. For example – if your product is
printers, then you will be able to find all dealers within an area who deal in printers through
trade directories. Thus, your time is saved because you find the prospects you were looking
for, within a day. Now you can approach these prospects and find out which of them are
really interested in business with you. The important thing is that in today’s environment,
there are many different types of trade directories. So you might have to refer to multiple
trade directories, which might give an exhaustive list of suspects to you. But off course, the
more the merrier in case of getting prospects.
3) Getting prospects online – There are many things you can do on the internet which can
get you more prospects. Some of them are listed below
Have your own website and conduct search engine optimization so that it ranks on
top of search engines
Search online directories for the right prospects
Use Email marketing as well as online advertising to attract customers to your
product / service
Advertise yourself on the top consumer directories so that the consumer himself can
search and get in touch with you
Have a strong social media presence and use testimonial marketing to generate trust
from customers.
Above are some points which are useful to get prospects online or from the internet.
The key factor here is that many customers have started purchasing online and they also
search for products and services online.
The trust factor for online brands too has increased. So much so that if your company
does not have a website, then it becomes a negative point for your brand. A strong presence
across the internet is a must nowadays. This coupled with the right web design and
optimization through online marketing, can help you with better conversion rate for
prospects who are interested in your products and services.
4) Advertisements – There are many ways to advertise your products and all of them are
excellent ways to get prospects. However, each advertisement has a defined ROI. Where
digital media gives the best tracking for ROI, you cannot track the ROI for outdoor
advertisements. However, outdoor advertisements too give good results. Similarly, using
public relations exercise and generating a buzz for your product or service is a must which
can be done through the print medium. Finally, you need to get out the big guns like above
the line advertising and below the line advertising to get prospects to contact your company.
Please note – this point is more likely to be adopted by companies rather then individuals
because of the heavy investments.
5) Word of mouth / Enquiries – You can get good prospects even through word of mouth
which is generated over time. At the same time,
through the efforts above, the company will
generate direct inquiries as well. However, the
sales person’s job in this case is crucial because
follow up is needed to close these inquiries.
Remember that if the customer is taking pains to
contact you himself, he can as easily contact the
competitor as well.
Once he contacts the competitor, then he might turn a cold prospect for your
company. In this case, you got the prospect but you have lost him to others. Thus, having a
CRM system is must in which good prospects can be tracked and followed up over a period
of time so that they remain good prospects for the company.
A customer might make an urgent enquiry or a slow enquiry. He might need the
product urgently, or he might take time to make his decision. However, in both the cases,
the response time as well as the follow up from the sales person should be strong. If not so,
then it is likely that the customer will get disinterested and move on to another product or
another brand. Another characteristic necessary is prioritization. If you get 20 enquiries in a
day, then you need to prioritize which of them are most important and which of them are
“Hot”, “Warm” and “Cold”. Accordingly you need to give the right attention to the right
prospect.
6) Cold calling – Many people advocate against cold calling, but in some industries, cold
calling is the only alternative which a company has to stay ahead of the competition.
Consider any telecom, banking or insurance company and you will see how many emails,
phones or personal visits are bombarded upon you so that you remember the brand and buy
its products. Cold calling is probably the most common way to get new prospects.
Except cold calling, all the
methods mentioned above involved
prior intimation to the customer that
the sales person is going to get in
touch with them. The problem with
cold calling is that the customer is
not pre-informed, and the sales
person directly reaches the customer. In this case, the customer can either convert
immediately because he is interested in the product, or he can reject the company outright.
Thus, because cold calling happens without the consent of the customer, this type of
sales is slowly beginning to irk customers in general. This is because there are so many
companies which are using cold calling as a method of generating sales. It is a very
penetrative strategy to get prospects, but one which works in the long term. Many a time,
the prospect himself is in need of a product (like a personal or home loan), but he does not
have the time or the inclination to contact the company. At such times, if the sales guy
himself contacts the prospect, he can convert the prospect to a customer. The solution for
the cold calling problem is to ensure that you are doing planned cold calling to get prospects
to your company.
Above are the 6 main ways that you can get prospects for your sales team. Many a
time, geographical data is collected for sales which gives better productivity. In such a case,
you will search trade directories for a particular area, search online directories for the same
area, get references for the same area and then finally cover all these prospects when you
have the complete data for the said area. This gives you much higher productivity because
you save your traveling time and you are canvassing in a defined territory only.
Globalization of TATA Motors : Strategic Plan for the Future
Tata Motors produces vehicles both in the Light Commercial Vehicles (LCV) and the
Medium and Heavy Commercial Vehicles (M and HCV) segments. It faces higher
competition in the LCV segment, where its Tata ACE has been a huge success.
Internationalization forms a key component of Tata Motor's strategy and it has successfully
entered countries having a demand similar to India like South Africa, Thailand and
Argentina, mainly through acquisitions and joint ventures. It needs to improve its product
reliability, service network and channel reach in order to maintain and replicate this success
in other markets. Some of the recommendations for Tata Motors are exploring mass
customization options in the Small Commercial Vehicle (SCV) segment, improving brand
reputation and technology appropriation to bring out a world class ultra-HCV segment.
Tata Motors is currently India's largest automobile company with revenues of $7.2
billion in 2006-07. It is by far the leader in commercial vehicles and the second largest
player in the passenger vehicles market with winning products in the compact, midsize car
and utility vehicle segments. Employing around 23000 people and headquartered in
Mumbai, Tata Motors became the first company from India's engineering sector to be listed
in the NYSE in September 20041. While currently about 18% of its revenues come from
international business, the company's objective is to expand its international business, both
through organic and inorganic growth routes.
A brief examination of the truck industry in India using Porter's analysis helps us
understand the threats that Tata Motors faces.
Various Advertisements of Tata Motors which influenced Customer’s
TATA NANO: CELEBRATE AWESOMENESS – ONCE A PEOPLE’S CAR,
BUT NOW IT IS FOR THE URBAN YOUTH!
Ratan Tata once said “A promise is a promise” when he launched Tata Nano in 2008.
Initially it was positioned as an affordable family car. Nano was targeted at the bulging two
wheeler segment in India. It is a well-known fact that it was for someone who was owning a
two-wheeler and looking to buy a car but could not afford it. So, basically, the USP of Nano
boiled down to its price. Nano is basically not a luxury car but it was believed that it could
fulfil the capacity and aspirations of the middle class, both urban and rural. They all
perceive that owning a car is a matter of pride and self-esteem. But, Nano’s portrayed image
of owning a cheap car was not appreciated by the masses.
They said it couldn’t be done. But Tata went ahead and did it anyway. They got out a
car that cost a lakh rupees. And although the prices have escalated recently due to surges in
raw material costs, the Tata Nano is certainly a revolutionary product. The idea for the
Nano was conceived sometime in 2003, and the car hit the roads in 2009. It’s been two
years since the launch, but has the Nano lived up to its promise as a product? It has. And
has it lived up to all the hype? It hasn’t. That sounds a little paradoxical. So let’s take a
closer look at this phenomenon.
The idea behind the Tata Nano itself was revolutionary. While the execution hit some
roadblocks (read the Singur plant controversy), the product was an engineering marvel
without a doubt. It brought together cost, fuel and space efficiencies in a way like no other
while still retaining world-class features and a sleek design. True, there were a few safety
issues (no air bags) and the fire incidents in a few cars. There was also the lack of power,
low stability, less boot space and small fuel tank. But all in all, the price tag more than
compensated for these.
But here’s the market reality. The car which promised to see a million units is
somewhere around 920,000 short after two years of its launch. Now why would a
discerning and price-conscious Indian public shun a product that’s so good? The reasons are
simple. The Tatas have messed up with the marketing. The very nature of the product
created massive hype. Add to that the goodwill that the prestigious Tata brand carries. And
you should ideally have a sure fire recipe for success. But even after two years, the Tata
Nano continues to languish when it comes to sales. So what happened?
With the plant being shifted to Gujarat, there were obvious delays. Furthermore, a
lack of capacity only added to the woes as the initial demand was huge. A lottery system
was used to select buyers, but the delays as well as refunds and cancellations led to a wane
in the interest. Tata expected the initial hype and its reputation to carry the brand, but when
that failed, it did not take the necessary steps to build its sales, assuming that it would be
able to sell its stock due to limited capacity. Hence, marketing was sidelined. The
restructuring only served to escalate the problems.
Then there was the problem of positioning. The car was obviously to be targeted to
families that travelled on two-wheelers at great discomfort and risk. But instead of using
marketing channels to reach their target audience, Tata used social media and other non-
conventional methods of marketing, probably due to margin issues. The sales reflected this.
Half of the Nanos purchased were second cars, clearly violating the positioning which
sought to transition people from two wheelers to four wheelers. The lack of communication
to the appropriate customer segment led to the downfall.
But Tata is taking concrete steps to rectify its mistakes. It has launched an extensive
media campaign with articles, television and even radio being used to reach potential
customers. With additional showrooms, countrywide campaigns and attractive incentives
such as a doubling of the warranty and low maintenance contracts, Tata is going all out with
its marketing. Most importantly, Tata has propped up its financing options with more tie-
ups and through its internal financing arm. But is it all too late as the dynamics of the
market have changed over the last two years?
Tata has a great product on hand. But it failed to communicate effectively with its
target consumer. And although it is beginning to get its strategy right, Maruti and other car
manufacturers are planning on launching cars around the same price point as the Nano. Has
Tata already lost its first mover advantage? Only time can tell.
Tata pays tribute to Nano owners with ‘Khushiyon ki chaabi’ campaign
In October, the brand had released a TVC which went on air on national and regional
channels across GEC, music, movies etc. Tata Nano has now extended the campaign to
outdoor with a focus on the people who drive the Nano. The nationwide campaign created
by Rediffusion Y&R is visible in 56 cities including metros and upcountry markets and will
run till mid-December.
The TVC pays tribute to the attitude of the people who drive the Nano. The ad film
has a young man, who is to join his friends on a flight to a holiday destination. While just
about to leave home, he does something impulsive. Picking up the keys to his Nano, he
informs his friends that he will join them later, and sets off on a voyage of discovery. The
film follows his travels, as he and his Nano traverse different states and terrains. He meets
new people, has new experiences that enrich his life and the lives of the people he interacts
with. Taking the long road through mountains, deserts and cities, he finally joins his friends
on a beautiful beach. This journey of discovery also showcases the Nano and highlights its
features.
The OOH campaign
showcases the Nano and its key
features – ruggedness,
pickup, mileage, cooling and
maneuverability, to name a few.
Each hoarding highlights a
special feature and has a
different tag line such as “Dil
Hai. Nano hai”, “Extra Hai. Nano hai”, “Saath hai. Nano hai” depending on the attribute.
On the campaign, Sarita Raghavan, business head, Rediffusion Y&R, said, “This
campaign focuses on the unique spirit and values of Nano owners. If you notice, a unique
and interesting bunch of people drive the Nano and the insight for the communication
comes from these owners. While the demographic and psycho-graphic profiles of these
buyers are varied, they all seemed to share a unique spirit: unconventional, slightly against
the grain, warm, and generous; these Nano owners typically stand out from the rest.”
“The idea for the campaign was to celebrate the owners’ pride by drawing parallels
between their personality characteristics and the car’s features. The campaign retains the
brand’s youthful disposition while building on the pride that comes with owning a Tata
Nano,” she added.
Tata Motors' 5 key strategies to lure youngsters towards Nano Twist
From peak sales of over 27,000 units in the
January-March 2012 quarter to under 4,000 in the
three months to December 2013, Tata Motors'
Nano hasn't quite lived up to the hype and expectations built up since its launch in mid-
2009. Former Tata group chairman Ratan
Tata now chairman emeritus recently said the "cheap car" image had hampered the
Nano's progress, and earlier this weekTata Motors took one of its first steps to erase that
"stigma".
It launched Nano Twist, a 'smart city car' with power steering, improved beige
interiors, a new instrument cluster with driver information system and a redesigned
gearshift console. Goodbye Rs 1 lakh car, or at least that perception — this variant costs
just under Rs 2.36 lakh (ex-Delhi showroom).
"With the new Nano Twist, and the Nano eMax a few months back, we have begun
this journey of a Nano portfolio that stands true to its brand essence: of a youthful, exciting
car offering great value but, at the same time, builds in a different set of features to suit
differing customer needs," says Tata Motors managing director Karl Slym.
The attempt over the past year has been to attract youngsters. In 2012, only a fifth of
the buyers fell in the age bracket of 18-34; that share more than doubled to 55% in 2013,
although it hasn't translated into increased sales. "The Nano needs to be aspirational rather
than spartanly utilitarian," says Ankush Arora, senior vice-president and head commercial,
passenger vehicle business unit, Tata Motors. Here are the five prongs of the strategy to
reverse the sales downtrend:
1. Focus on youth: To build a youthful and aspirational value around the brand, Tata
Motors through its 'awesomeness' branding and marketing campaign worked with
fashion designer Masaba Gupta on the launch of the Twist. The makeover campaign
is an attempt to get youngsters to look at the Nano as a fashion accessory. "Young
consumers want complete accessorisation in the car like alloy wheels, different
interiors, spoilers and graphic designs," explains Arora. The company promises more
on-ground activities and showcases at colleges to woo the youth.
2. Fresh positioning: From a people's car and the world's cheapest, the Nano is now
positioned as the smart city car for young achievers. Arora says while the perception
of a cheap car has still not gone away, the profile of the consumer has tremendously
improved — along with the features in the car. Based on market research, Tata
Motors has segmented potential customers into first-time buyers, those looking for a
replacement or an additional car and others who want more features and
performance. Near-term plans include a variant with automated transmission to
strengthen the smart city car positioning.
"With all the significant product changes, we have a really easy-todrive car,
great to manoeuvre, with a distinct individuality and colour and offering what no car
can in this price range — a great style, entertainment and music, industry-leading
power steering and more," says Slym. Adds Rakesh Batra, partner, national leader,
automotive sector, Ernst & Young: "The repositioning will make the product cater to
a larger number of customer segments. If the value proposition is right, it should lift
volumes."
3. Communication for a consumer connect: The idea is to give the brand a far more
emotive personality and the new advertisement campaign of 'awesomeness' is in that
direction. The campaign has electronic dance music DJ Akshay Sarin, celebrity
dancer Lauren Gottleib, and professional golfer Neha Tripathi to celebrate how these
young achievers 'live life on their own terms'. These young achievers will help create
an emotional connect with the target buyer. Consumers will get opportunities to
interact online or on-ground with the young achievers, leading to attachment to the
brand, reckons Arora.
4. Revamping distribution and reach: The new dealer identity will make the
consumer experience more exciting. The dealerships will have better displays, video
walls, trained workforce to reinforce the smart city car image and all content will be
centrally controlled. There are 95 standalone Nano dealerships and the company has
no plans to increase the number this year.
5. Changed pricing: At its launch, much was made of the Rs 1 lakh price tag. The price
points have been redefined and the new variants of Nano are expected to priced in the
range of Rs 1.75 lakh to Rs 3.25 lakh. "A consumer is looking for the right value
equation, a full package, and not a cheap car," explains Arora. He adds that from the
three trim levels, 60% of the Nano sales were from the power steering and AC
variant. Now, armed with five trim levels, the company plans to offer four engine
options.
Some Problems faced by Nano Car’s
The strategy adoped by Tata Motors to promote Nano was badly flawed, say brand
and marketing experts, albeit with the benefit of hindsight. The Nano generated tremendous
publicity for itself as the "world's cheapest car".
While that created headlines, it wasn't the sort of
communication that necessarily sold cars.
The messaging could have been more
proactive in the initial phase of the launch, experts
said. As it could have been when the project had to
beat a retreat from the Singur factory site in West
Bengal or when some cars began catching fire.
"A series of factors has impacted the Nano,
right from the Singur issue to cars catching fire to
clumsy marketing strategy," said Autocar India
editor Hormazd Sorabjee. "There was a bit of
overconfidence at the start and not much marketing
push from the company. The hype fizzled out even before Tata Motors could effectively roll
out sizeable (number of) cars on the road."
A person close to the company said, "Somehow it got slotted as a Rs 1-lakh car or a
cheap car. Tata Motors did not intend to position it like that, but they did not do enough to
manage perceptions." Making too much of the price tag was a mistake, said Zia Patel,
principal at leading international brand consultant, Wolff Olins, and head of strategy for
India.
"The value engineering and innovation was brilliant. But it was never quite clear who
the car was for. Was it to replace a two-wheeler for commuting, was it a second car for an
affluent family or an aspirational first car for a 30-year-old, or was it for all of these
people?" Patel said. To be sure, even Mercedes had two false starts before getting its pitch
for the Smart car right.
A company spokesperson agreed that the Nano became a victim of its own hype. The
marketing pitch is now aimed at breaking that image and giving the brand a more emotive
personality as a mobility solution, a smart city car. The Nano Awesomeness ad campaign is
a step in that direction.
The ad video seems to have been popular with more than 3.7-lakh likes on Facebook
and more than 20,000 comments. The TV commercial got 5-million views on YouTube in
less than 30 days of being aired, the highest for any automotive brand TVC in India. The
'smart city car' idea arose from talking to car owners. "Owners have told us in several
feedback sessions that they enjoy spinning it out of traffic. The car can be parked very
easily, it has good visibility, there is tremendous driving pleasure," the spokesperson said.
The company also wants to take advantage of India's rapid urbanisation.
"The whole thing about being smart, leading a city life is no more limited to metros,
it has gone beyond that," the spokesperson said. Jack Trout, international brand strategist
and a pioneer of the 'positioning' theory, recently told ET that Tata Motors should kill the
Nano brand. "Why hang on to a badly damaged brand? If they want to do a city car, give it
a new name rather than offer a new Nano. It's an obvious solution," he said.
This is Tata, the people who turned around Jaguar where Ford had failed. The way
they turned Jaguar around is they re-created the emotion around the car and of course sorted
the engineering.
Tata Safari Dicor ‘Reclaim Your Life’ Ad
Ad Message : Reinforcing the Tata Safari Dicor brand
Target Audience : Higher income group (28+ years)
Frequency : Medium
Description : The ad starts with a guy perched inside a tent hanging
precariously from a cliff. What follow are breathtaking outdoor shots of snow-capped
mountains, beaches, gushing rivers and such (shot entirely in New Zealand), interspersed
with the following captions – “If you looked back on your life, what would you remember?
The corner office? The corporate powerplays? The VIP lounge? What would you
remember?” The ad ends with a shot of a guy standing besides his Tata Safari Dicor at the
edge of a looming cliff as the voiceover says “Tata Safari Dicor, Reclaim your life”
A compelling idea, one that the target audience can immediately relate with, crafted
so beautifully that you bask in pure sensory delight as it unfolds before your eyes, is hard to
come by. But when it does, it gives blogs like mine enough raison d’être. The thought that
here is a car that will help you do worthwhile things, things that will be worth remembering
when you look back at your life, is simply brilliant and brilliantly simple at the same time.
And which is why, I am sure each one of us, trapped in our mundane daily-jobs, would feel
tempted to do just that…reclaim our life, the Tata Safari way!
Backed by all the right elements in the delightfully subtle execution – awe-inspiring
visuals (though I am sure they
were Creative Suite’d for
perfection), a mystical background
score (admittedly similar to
the Gladiator theme song) and some
masterful copywriting, this ad
knocks my socks alright. To top it
all is the consistencywith which
Tata Safari is following the ‘Reclaim your life’ theme, reinforcing the whole new
dimension they brought to the core benefits of this product category.
What this means for Tata Safari Dicor is that there will be enough potential
customers willing to step in their nearest Tata showrooms and check out how they can go
about reclaiming their life. And that’s the good ole’ power of advertising!
Percept Out of Home’s recent outdoor campaign for Tata Motors’ Safari Storme has
engaged car enthusiasts of all age groups. The activity is aimed at promoting the Safari
Storme, the pioneering of SUV in India. The overall OOH promotion that started in end-
October will continue for a span of two months. At present, the OOH drive is focused on
the Northern region and highlights power, performance, style, opulence and comfort about
the second generation SUV from Tata Motors.
The objective of the campaign has been to communicate with key markets where
Tata Safari is a very popular car and has achieved cult status. Mainly large formats have
been used for this activation in the form of billboards and unipoles to get maximum
visibility and exposure apart from creating awareness. The target audience is SEC A & B.
Translating the unique features of the legacy SUV brand into imagery that informs,
communicates and connects has been experience enriching. The creatives have been crafted
keeping in mind the choice and lifestyle of North Indians. Elements of Tata Safari Storme
style, technology and performance have been cleverly embedded in the OOH campaign.
The second generation Safari, the Tata Safari Storme, has raised the bar in terms of
setting new benchmarks for the SUV market. The tagline, ‘The Real SUV’, aptly
encapsulates the true essence of this modern SUV – looks, power, driving pleasure, luxury
and peace of mind in terms of safety and warranty. With an innovative outdoor campaign,
we have successfully reached out to our consumer in the most clutter-breaking manner.
Come Diwali people spend most of the weekends out of home. Most of them shop
for sweets, clothes, cars and tech gadgets. Clasping on product innovation and the timing of
festive season the OOH campaign is bound to attract a handsome footfall and queries about
the SUV.
The new Tata Safari Storme is a refined beast delivering a performance of 0–100
km/hr in under 15 seconds. Its 2.2L VariCOR engine, turbocharged with VTT (variable
turbine technology), delivers 140 PS power and 320 NM torque, providing easy
driveability, swifter response and lower NVH (noise, vibration and harshness). The vehicle
also features ESOF (electronic shift-on-fly) technology, enabling engagement of the 4×4 or
4X2 mode on the move. Yet it is highly fuel-efficient at 14 kmpl in the 4×2 variant and
13.2 kmpl in the 4×4 variant. The luxurious, airy and beige interiors endow the Safari
Storme with opulence.
Tata Indica V2 Xeta: Competing in the Indian Small Car Market
This is about the marketing strategy undertaken by Tata Motors Limited, (the market
leader in commercial vehicles in India, and one of the major players in the passenger
vehicles segment), in 2006 to sustain and enhance its market share in the burgeoning
passenger car market. In January 2006 the company launched the Indica V2 Xeta Petrol
(Xeta) car as a refurbished version of its existing petrol car Indica V2 Petrol MPFI.
According to the company, Xeta was to benefit the customer by better meeting their needs
compared to existing options in the market - specifically by rendering better fuel efficiency
at a competitive price. Indica was an umbrella brand under which Tata Motors had
developed both diesel and petrol cars.
Though the diesel driven Indica was performing well, its petrol counterpart - Indica
V2 Petrol MPFI, had not reaped the intended results. Through Xeta, the company intended
to create a unique brand identity in the customer's mind for the petrol variant of Indica.
Immediately after the launch of Xeta in January 2006, the passenger car business unit
of Tata Motors reported a growth of 15 percent over January 2005 by selling the highest
number of passenger cars till then. The Indica brand grew by 18.7 percent which was
attributed mainly to the launch of Xeta. This success also coincided with the growing
attractiveness of India as a global hub for small cars. The entry of Tata Motors' immediate
rivals like Maruti Udyog Limited and Hyundai Motor India Limited into the diesel segment
of the small car market was also expected to pose a strong challenge for the company.
This case discusses the rationale behind the development and launch of the Xeta. It
also examines the product, pricing, distribution, and promotional strategies undertaken in
this regard and the challenges faced by the company in sustaining its market share in the
Indian passenger car market.
Issues:
i. Understand the strategy adopted by Tata Motors to sustain the Indica brand in the
highly competitive small car market in India.
ii. Understand the rationale behind the launch of Indica V2 Xeta as an extension of the
Indica umbrella brand.
iii. Analyze the various marketing aspects that Tata Motors had to focus on in order to
establish the Xeta in the Indian small car market.
SUVs: M&M, Tata Motors Gear Up For Integrated Marketing Strategy
Competition is hotting up in the sports utility vehicle segment (SUV) in India once
again. Even as Mahindra & Mahindra Ltd is in the process of rolling out an integrated
marketing plan to announce the relaunch of Scorpio, Tata Motors is drawing up an
aggressive marketing strategy to popularise its recently-launched petrol variant of Tata
Safari.
For starters, Mahindra & Mahindra Ltd has launched a multi-media ad campaign to
promote the new avatar of Scorpio. Created by Interface Communications, the mass media
campaign includes a series of press advertisements and a television commercial.
As for the rationale behind the relaunch of Scorpio, says Mahindra & Mahindra Ltd
executive vice-president (marketing & sales) Rajesh Jejurikar: “After conducting an
extensive market research (with AC Nielson), we upgraded our existing model with new
features. However, the positioning of the brand will remain the same so the adline will
continue to be the same—‘Nothing Else Will Do.’”
The company plans to focus on press ads to highlight the new features and improved
fuel efficiency of the upgraded version of Scorpio. “To support mass media advertising,
we’ll be hosting roadshows and ground promos. Till now we have sold over 20,000
Scorpios since we launched this brand. With this improved version, we will phase out the
old brand,” he adds.
In addition, Mahindra & Mahindra has recently launched a nationwide talent search
programme titled ‘Scorpio Speedster With Timex’ in 10 cities across the country. Through
this initiative, the company plans to strengthen Scorpio’s brand positioning of being a
youthful and sporty SUV, says Mr Jejurikar.
Tata Motors is gearing up to launch a new multi-media ad campaign to announce the
new variant of Tata Safari, the petrol version. On Tata Motors new marketing strategy, says
Ogilvy & Mather India clients service director Sharmila Malekar: “To announce the launch
of Tata Safari (petrol variant), we will be launching a multi-media ad campaign within a
month. The new campaign will include, press ads, TVCs and radio advertising. There will
be a new adline too.”
At present, the baseline for Tata Safari is ‘Make Your Own Roads’. In addition to
mass media advertising, the agency will continue to focus on its CRM initiatives such as the
Tata Safari Explorer Club to promote the new avatar of Tata Safari.
In the Indian automobile industry, SUVs today account for only 15 per cent of the
total market unlike western countries where it is almost 80 per cent.
Advertisement of “Tata Indicia Xeta”
A successful Indian product of truly Indian origins. The word is derived from the first
automobile to be designed, manufactured
and sold successfully by an Indian company.
Several variants of its original hatchback
design were spawned and eventually over
one million vehicles based on the platform
were sold. The diesel-engine vehicle sold in
large numbers across the nation and even
has the notable achievement of having been exported to several countries across the globe.
The diesel-engine Indica received notable appreciation from all around, whereas the petrol-
fuelled versions played second fiddle on the sales graphs.
TATA Motors has launched a new version of its small car. Christened Indica V2
Xeta, the petrol-powered car with a 1.4-litre engine is said to deliver a mileage of 14 kmpl
under standard test conditions. The Xeta's engine, delivering 70 PS, is far more powerful
than the earlier version. Besides common black and silver, the car is available in three
flashy hues. The Xeta is touted be among the first few small cars to sport beige interiors.
Besides these compelling features, the pricing is also attractive, at Rs 2.94 lakh for the AC
model. The Xeta range is priced between Rs 2.69 to Rs 3.65 lakh ex-showroom Delhi.
Customers may avail themselves of loans of up to 90 per cent from select financiers over a
seven-year period with EMIs as low as Rs 4,471.
Design and engineering
The design of the Xeta is exactly the same as the Diesel version, no significant
changes, except the upholstery and the beige dashboard. Xeta carries with it all the virtues,
like space and comfort. Seats are reasonably good and the Air con is also quite good, but the
spread of the vents could really have been better.
There are a few things about Tata build quality that are quite frankly annoying. The
door ajar warning switch has been placed right next to the door hinge; this results in the
cabin lamp switching off, even when the door is in fact ajar! Tata has also used bolts to fit
the wheels to the hubs, which is unlike the Japanese who normally use studs and nuts. The
result is that it is quite hard to replace a flat tire. The Indica though, unlike its some of its
Japanese competitors can easily accommodate 5 passengers with much space to spare, and
the best part about the interiors of the Indica are its 2 front seats that provide excellent
comfort and support. The rear seats though lacking in comfort compared to the ones in the
front has great legroom for its passengers. This can be a big boon on long journeys helping
reduce fatigue.
Engine and transmission
The entire design effort of this new car is concentrated on the engine alone, the
engine although the same block as the diesel, displaces 1405cc and has been detuned to now
pump 70ps and 14kgm of torque. The best part of this engine is not just that figure, it the
way it's delivered. The Indica petrol ceases to be a rampage, a fuel-guzzling monster; it is
now able to pump loads of torque into those front wheels. The Indica is now able to pull
from as low as 800rpm.
The crux of the changes incorporated in the new Indica. The New Indica Xeta now
sports a slightly detuned 4-cylinder in line, 1405cc 32bit microprocessor controlled fuel
injected petrol engine, which is able to pump out 70ps at 4600rpm 14kgm at 2600rpm. Tata
Now claims that this engine, thanks to the torque it is able to generate will be able to churn
out efficiency of around 14kpl. Customers really impressed by the optimism, but when the
car floored the accelerator.
Ride and Handling
The Indica Xeta is a big car, as far as dimensions go, compared to the puny Alto and
bigger compared to the Santro and Wagon R when it comes to weight almost 200kgs. So,
the suspension does belong to big car category. The tread of the tire is wider by 10mm to
the Wagon R VXi and the Santro by 10mm, this helps the car grip a bit better, and although
we expected the slightly lower profile to play truant when in came to absorbing bumps, the
intrusive rear suspension really did work out. The handling though is a bit of another story.
The Indica being heavy does mean more cornering forces, and the extra weight also means
a wee bit of extra roll, but the wide stance of the Xeta is able to cope with the cornering
with aplomb. The steering though is just a bit heavy, which although is very helpful at
higher speeds can be a bit of a drawback around those city runs.
Verdict
The Xeta now competes with tried and tested Japanese cars like the Maruti's Wagon
R, Zen and Alto and the Korean Santro Xing. Compared to these cars, the XETA is able to
provide far more space; thanks to its handling, it is able to hold the road much better also
absorbing the undulations of road surface better the handling though seems a bit front
heavy; the car, overall looks even heavier. Tata build quality is yet to really make its impact
on Japanese car fans, but the fact that this 1400cc 70ps engine with oodles of torque is able
to churn out excellent fuel economy should.
Modification of TATA Sumo Ad
The Toyota Qualis and now competes with Chevrolet Tavera. The discontinuation of
Qualis to launch the Toyota Innova proved advantageous to Tata Sumo. The Sumo has seen
a series of changes in terms of refinement in this decade. It has been the favorite choice for
cab owners, as it is rugged and affordable.
The Tata Sumo has been enjoying its position in the MUV market since 1994. It had
stiff competition with new Sumo Victa has been portrayed as a family lifestyle vehicle, but
in fact is a carryover of the old Sumo, with some cosmetic changes. The Sumo comes in
nine Victa variants: CX 10/7 Str, DI CX 7/9/10 Str, DI EX 7/9 Str, DI GX 7/9 Str, DI LX
7/9 Str, EX 10/7Str, GX 7 Str, GX TC 7 Str, and LX 10/7 Str. All variants, except the Victa
DI variants, are powered by a 2-litre Inline-4 diesel engine. The GX and GX TC variants
get a 2-litre turbocharged diesel engine that generates 89 bhp. The Victa DI variants get a 3-
litre turbocharged diesel engine. Refinement, both internal and external, is evident across
the variants. Tata's latest three variants under the 'Sumo Grande' category are LX, EX and
GX available in 2-seater, 7- seater and 8-seater configurations. Sumo Grande boasts of a
powerful 2.2-L Direct Injection Common Rail (DICOR) engine
SUMO SPACIO
A no-frills version called the Tata Spacio is also available. It is equipped with a 3000
cc DI diesel engine sourced from the popular LCV Tata 407. The prominent visual
difference was the presence of round headlamps instead of the rectangular lamps. A soft top
version of the Spacio called the Spacio ST was also introduced for the rural markets. After
the facelift, the Spacio inherited the styling elements of the older Tata Sumo. In 2007, the
Victa became available with the Spacio's 3000 cc engine. And in terms of styling, the
positioning of the spare wheel was changed from the rear tailgate to the underbody of the
vehicle. This model comes in 8 and 10 seater variants and is very much popular with private
transporters & contract taxi vendors because of its lower cost.
SUMO VICTA
The new Sumo Victa released in 2004 featured power windows, power steering, dual
AC, central locking, clear lens multi reflector head lamps, crystal finish tail lamp cluster,
anti glare ORVMS with electronic control, remote keyless entry, tachometers, LCD
monitors, voice warnings, multiple trip odometers are all either standard or available
options.
New TATA Sumo (SUMO GRANDE)
Tata launched the Sumo Grande on January 10, 2008 powered with a new
generation 2200 cc 120 bhp (89 kW; 122 PS) DICOR (Direct Injection Common Rail)
engine. It is the most up market version of the Sumo available and features completely
different body work. It lies below the Tata Safari in Tata's product portfolio.
New version of Indigo’s Ad
Dicor Variants
The DICOR (common rail diesel) version of Tata Indigo is available in two variants
which has already hit the bull's eyes. The beefy & bony structured sedan has the capacity to
deliver maximum torque of 140Nm @ 1800 - 3000 rpm. The Indigo Dicor from Tata
Motors has been made apt for Indian roads
especially with its driver & co passengers
oriented positive attributes such as:
Anti-submarine front seats
New electronic instrument cluster with
engine RPM meter
Rear Seat with double folding backrest
Video player with MP3: with headrest mounted LCD screens
1.4-litre as rail diesel engine
Indigo LX Dicor
Tata Indigo LX Dicor on the other hand features manually operated with chrome strip
outer rear view window, black dials with chrome rings & star check as the new pattern for
its console & AC fascia.
Indigo LS Dicor
Tata Indigo LS Dicor features manually operated outer rear view mirror, black dials,
& Benz silver as the new pattern for console & AC fascia. It has no mounted LCD screens.
Tapping of Rural Markets
According to the National Council for Applied Economic Research, or NCAER, rural
India accounts for 70% of India’s population, 56% of the national income, 64% of the total
expenditure and one-third of the total savings. So, the difficulties faced in cracking these
markets pale before the huge potential they offer a company. Of the total sales (of consumer
goods), around 55% come from rural India, and going ahead, the contribution is likely to
grow. NCAER data suggests that in real terms, at 1999 prices, the size of the rural economy
will be about Rs16 trillion in 2012-13 compared with Rs12 trillion in 2007-08. The share of
non-farm income will be about two-thirds of the rural economy by 2012-13.
Noticing this huge potential Tata motors now plans to tap the rural market, 60 per
cent of which runs on cash. Tata motors ltd. is working on strategies to make inroads into
these markets.
Tata Motors Advertisements which connects with Heart of Customer’s
Tata ACE : Bridging distances
For its range of commercial vehicles, Tata Motors has rolled out a TV campaign that
fulfils a dual purpose. It positions the brand as one that bridges distances, both literally and
figuratively, and as one that is technologically advanced.
Tata Motors has launched a new part emotional-part functional ad campaign for its
range of commercial vehicles (trucks and
buses) that conveys the company's philosophy
of staying ahead of people's needs and
developing products that live up to expectations
and exceed them. The tagline used is 'Ek kadam
aagey'.
As of now, three films are being aired on TV. The VO (voice over) in the ads is by
actor-director Farhan Akhtar. The team claims he was selected for the job as he reflects the
spirit of a young, innovative India.
Nilesh Vaidya, executive creative director, Rediffusion-Y&R, the agency that has
crafted this campaign, tells afaqs! that the larger thought behind this campaign is that of
bridging distances - be it geographical distances, distances between one's home and the road
or those between one's dreams and reality.
Besides conveying the brand's achievements so far and highlighting how Tata Motors
has contributed towards nation building, the other objective of this effort is to communicate
the fact that Tata Motors is high-tech and ahead of the times in terms of its technology.
Thus, the campaign, though hinged on emotions, "has a very functional pay off" as
Vaidya puts it, as it is the technology that ultimately helps bridge the aforementioned gaps
and distances.
At first glance, the films seem neither B2C nor B2B; rather, they seem to fall in the
grey zone between the two, if such an area exists. Going by the look and feel of the
campaign, it appears to be a cross between any other consumer campaign targeted at lay
consumers and a typical corporate, brochure-like campaign targeted at a select trade
audience. So, which one is it?
Addressing the issue of the TG (target group) of this campaign, Vaidya explains that
while the core TG comprises truck drivers and fleet owners, Tata Motors is talking to pretty
much everyone through this campaign. "The brand is making a very public case about what
it has achieved through its vehicles. It's basically about empathising with the people who
spend 18 hours of their day on the road - the kind of people for whom the highway becomes
home," he explains.
While the 'Service' film leans more towards the B2B side of the TG, the other two,
namely, 'Infrastructure' and 'Master', address everyone at large.
TV is the lead medium for this campaign; there will be support from press and outdoor but
at a much smaller scale.
Does the campaign work?
Some find the insight confusing. Others empathise with the challenges creative folk
face when ideating for such creatively restrictive product categories, as some experts term
them.
Priti Nair, co-founder, Curry-Nation, finds the creative execution just average and
inconsistent across the three films. "It is just too cut and dry," she says, "and you just don't
get engaged with any story or person. I didn't even catch the insight; I thought it was all
about doing things for the people you care about. The content is way too 'me-too'."
As regards the inconsistency, she explains, "The 'dhaaba' film at least carries 'the
ones you can depend on' or 'the ones you care for' story a little better than the other films.
The other two ads go into some corporate 'AV-ish' mode -- (audio-visual, presentation-like
mode) -- suddenly, both visually and emotionally."
All said and done, the commercial vehicles category has, traditionally, been deemed
as one that is limiting in terms of the kind of creative ideas one can come up with. "It is
challenging but that's the job of advertising agencies and marketers -- to communicate it in
a more engaging manner, to push to get it at least above average if breakthrough is not
manageable. I believe you can at least do likeable stories, stories that are more involving
rather than just chest thumping," Nair critiques.
About the TG, Satbir Singh, managing partner and chief creative officer, Havas
Worldwide, says, with empathy, "I guess we must understand the category first. The
commercial vehicles category is different from, say, mobile telephony or your youth-
oriented messaging. Much of this will have the added task of tackling B2B issues and
speaking to fleet owners."
He goes on, nevertheless, "Whenever communication has a corporate angle, it
unfortunately goes into the 'dreams' area. Hopefully, one day, corporates will look beyond
the concepts of 'dreams', 'tomorrow', 'trust' and the like."
Just like the campaign, the use of Farhan Akhtar for the voiceover has also garnered
mixed responses. While it makes Nair frown, Singh expresses how much he loved it. "I've
seen it get a fair amount of traction on Twitter," he points out.
Conclusion
Tata Motors has never had it so good. Today the company is the undisputed market
leader in the commercial vehicles industry in India and is gradually emerging as one of the
key players internationally too. It has been forging ahead on a number of fronts in an
attempt to further entrench its position as a market leader. In the SCV segment, the
company has witnessed unprecedented success with the launch of the pioneering Tata ACE.
In the M and HCV segment, the company has been taking determined steps to further
consolidate its position. The company enjoys a number of key strengths that enable it to
present a unique value proposition to its customers.
However this success is far from being a given. The company must focus on
combining its unique strengths, as it endeavors to replicate its recent successes in new
segments and across new geographies. Apart from product reliability, the most important
determinant of future success would the company's ability to bolster its support framework.
If the company gets it right, the spoils could indeed be breathtaking. Not only will that
catapult the company to the forefront of creating a unique customer experience, but also
help spawn altogether new revenue streams. The future presents challenges and
opportunities for the company in equal measure both domestically and internationally.
While pitfalls are many, Tata Motors looks well positioned indeed to capitalize on these
opportunities and take on the world.
Bibliography
www.wikepedia.com
www.tatamotors.co.in
www.scribd.com
www.moneycontrol.com
http://carsinindia.com/indicaxeta1.asp
http://ir.tatamotors.com/PushFile.php?filename=/home/telcoindia/ir/pdf/2006/
FY06_Review_Final.pdf
http://www.maxabout.com/automotive/auto_cars/companies/Tata.aspx
http://www.mouthshut.com/product-reviews/Indica_Xeta-925054185.html
http://www.carwale.com/Research/chooseCarsForComparison.aspx
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