Tata Final Business Policies

7/31/2019 Tata Final Business Policies

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TATA MOTORS


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GROUP MEMBERS

NEHA RAWAL 34VIKAS CHOUDARY 61

SHATABDI DUTTA 51


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HistoryStarted in 1945 in Mumbai, India.Original production was on locomotives.

1954

First car rolled off of the assembly line. Tatas are a family of Indian industrialists and

philanthropists.

The family founded: Ironworks Steelworks

cotton mills


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History Tata Motors is Indias owns the largest independent

company in India.

Mercedes and Tata teamed up to create a

truck line. First major business deal with another

firm.

Together both companies started their commercialvehicle operations in 1960.

in 1986 the company created and sold the first LCV

LCV = light commercial vehicle


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MISSION & VISIONMission-

Being the supplier & partner of choice.

Archiving excellence in safety,operations& project management.Focusing on culture & sustainability.

Ensuring growth & delivering to thestockholder.


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Branches


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Branches


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PRODUCTS OF TATA


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Products Passenger cars and utility

vehicles

Tata Sierra

Tata EstateTata Sumo

Tata Safari

Tata IndicaTata Indigo

Tata Indigo Marina

Tata Winger

Tata Xover


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Products Military vehicles

Tata LSV

Tata 2 StretcherAmbulance

Tata 407 Troop Carrier

Tata LPTA 713 TC

Tata LPT 709 ETata SD 1015 TC

Tata LPTA 1615 TC

Tata LPTA 1621 TC

Military Trucks


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Corporate strategy To buy premium vehicle brands such as Land Rover

and Jaguar bolster Tata Motors image as a globalcompany and increase its global reach and scaleOverall

The Tata group has spent around $15.5 billion inacquiring foreign companies

The Tata name is a unique asset representingleadership with trust

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Corporate strategy

synergy developed as a result of the strengths of domestic and foreign market share, congregatingunder the umbrella of Tata group

The Tata Group as a whole has over 20 publiclylisted enterprises and operates in more than 80countries world-wide - lots of experience andresources to draw from for research and

development purposes

Strong corporate governance based on rich legacyof fair, ethical, and transparent governancepractices to ensure that its employees actethicall and the business continues to run


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Mergers & Acquisitions

Tata Steels mega takeover of European steelmajor Corus for $12.2 billion. The biggest ever foran Indian company


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MERGERS &acquisitions

TATA communications (formerly VSNL) acquiredCEC (China enterprises communication) with 50 %stake .

TATA motors acquired jaguar

and land rovers (UK based)

with a value of $ 2.3 billion


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Diversification

1977 First CV from Pune plant.

1983 First HCV rolled out.

1986 First LCV (Tata 407) launched followed by Tata608.

1991 First passenger car Tata Sierra launched.

1992 Tata Estate launched.

1994 Launch of Tata Sumo.

1995 Mercedes Benz car E220 launched(http://en.tatamotors.ru/Milestones.aspx)

1997 Tata Sierra Turbo launched. 16


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MARKETING STRATEGIES

PRODUCT, BRANDING, AND ADVERTISINGAdvertising is one of the most common ways to make carbuyer or car enthusiast aware of the new car with specialpromotion price.

PLACEPlace of dealership does play an important role. Thechannel of distribution, physical location, and dealershipmethod of distribution and sales is generally adopted.

MAINTENANCE AND SUPPORTAfter sales service is also another important marketingstrategy for most of the car buyer to choose for the right

car.


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A brief Information about theproduct

The Tata Nano is a rear-engine, four-passenger citycar built by Tata Motors, aimed primarily at the

Indian market.

The car is very fuel efficient, achieving around21kmpl on the highway and around 18kpl in thecity.

This is cheaper than the Maruti 800, its main

competitor and next cheapest Indian car priced at184 641 Ru ees.


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Porters Five Forces analysis for the Specific productthat we have taking into analysis is the NANO CAR.

BARRIERS TO ENTRY

Time and cost of entry

The launch of the NANO is quite viable as the demand of the small car is on the rise in the market. By the cost of theentry we mean the initial capital required to set up a new firmis very high, it

makes the chances of new entrants are very less.

Knowledge and Technology

Ideas and Knowledge that provides competitiveadvantage over others when patented, preventing others from


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Porters Five Forces analysis

BARRIERS TO ENTRY

Government Policy and Expected Retaliation

Although government's job is to preserve free competitivemarket, it restricts competition through regulations andrestrictions. The government tried to promote the TATA Motorsto start a plant by providing land and tax rebates. But theunexpected retaliation by the local people surface in thesetting up of the plant which costed the company a lot.

Access to Distribution Channels

When a new product is launched a well developed

distribution is must for its success . The TATA motors had aadvantage of well established distribution channel across the


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bargaining power of BUYERS

Switching Costs

If switching to another product issimple and cheap the customersdoes not think much before doing it. Incase of NANO car the switching costfrom bike to car is too high.


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COMPETITIVE RIVALRY

Number and Diversity of

Competitor

The small car market in India isvery competitive with playerslike Maruti Suzuki, Tata Motors,Hyundai etc. which was pretty

much dominated by Maruti. But


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COMPETITIVE RIVALRY

Exit Barriers

Even if the product fails in themarket its not that easy for thecompany to exit the market just likethat because of the heavy investmentit has made in the initial stage. If theNANO fails or falls flat the TATA motorswill not be in a state to slow done theproduct even when NANO production


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1980s

SipaniDolphin Standard2000

Maruti


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1990s

Tata

sierra Tata

safari


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2000 onwards


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The Indica Vista


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Indias Market Share forfour wheelers

q Indian market isbroadly classifiedinto 9 productsegment rangingfrom mini toLuxury vehicle.

q The pie chart

clearly show themarket share foreach productsegment.


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Current player in Indianmarket


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Market SegmentationFour commonly used criteria are used for segmentation, which include:


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STP contd

Differentiation Strategy (also knownsimply as "Product Differentiation")

D t t t t


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D erent at on w t n t eproduct


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Target Segment isbeneficial

Criteria to gauge the viability of a target market

Accessible - How a segment can be accessed via MarketingCommunications produced by a firm.

Measurable - Can the segment be quantified and its size

determined?Profitable - Can a sufficient return on investment be attained from asegment's servicing?

Customer habits :Indian Customers are educated, highly discerning and well informed

Preferences for small cars, Small cars are socially acceptable evenamong well-off people

Preferences for fuel efficient cars with low running costs. Tata Indicahas the lowest running cost per mile


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Positioning

Land rover For HighIncome customers

Indica vista For Middle Incomecustomers

Tata Nano For Low Incomecustomers


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Pricing - Indica VistaEngine

Specifications1.4 TDI 1.3 Quadrajet 1.2 Safire

Engine Type 475 IDI Turbo1.3L SDE Common, Quadrajet

Diesel engine New 1.2L, MPFI, Safire Petrol

engine

Power 71 PS (52 kW; 70 hp) @ 4500

rpm75 PS (55 kW; 74 hp) @ 4000

rpm65 PS (48 kW; 64 hp) @ 5500

rpm

Fuel Type Diesel Diesel Petrol

Price Rs.2,60,000 to4,99,000

Rs.4,05,000 toRs.4,99,000

Rs.3,47,000 toRs.3,97,000

Three models that caters to all threeengines Tera Aqua Aura


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Auto Industry Analysis


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Segment wise market distributionMini4%

Compact72%

Mid-size20%

Executive3%

Premium1%

Luxury0%

Segment Distribution


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0

2

4

6

8

10

12

Market Share of Key Players in Different Segment


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Industry Outlook Recovery in 2009-10 to be aided by lower cost of ownership and

deliveries of Tata Nano

Industry margins to improve in 2009-10 with lower raw material costs Long-term demand prospects remain intact, led by small cars Exports to grow at approx. 20-25% Used car industry growth to be driven by rising car ownership, lower

holding period Capacity to touch 3.75 million units by 2010-11


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Planned Investment in the Industry in theComing years

Players

Estimated Investmentin Rs. Billion

Tata-Fiat 40

Tata Motors Ltd 30Mahindra & Mahindra Ltd 40

Honda Siel Cars India Ltd 30

Toyota Kirloskar Motors Ltd

14

Ford India Ltd 25

International Cars & Motors Ltd 8Volkswagen 35

Renault-Nissan 45


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Market Overview9th largest in the world

Production of over 2.3 million units

4th largest Asian exporter

79% passenger vehicle market share:Maruti Suzuki

60% commercial vehicle marketshare: Tata MotorsMonthly sales exceeded 100,000units


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Market OverviewNo of vehicles / Population < 10%

Number of households able to affordcars projected to double by end of decade

High proportion of purchasesfinanced by credit

Highly competitive market, low costsattractive for assembling

Global giants looking to gain

footholds


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Market OverviewManufacturer

FY 08 FY 09 % Change Y-O-Y

MarketShare %

MarutiSuzuki

711,818 722,184 1.5 52.2

HyundaiMotorsIndia

216,307 244,000 12.8 15.7

Tata

Motors

167,058 200,159 19.8 12.9

Honda SielCars India

62,802 52,420 -16.5 3.4

Ford India 30,962 27,976 -0.96 1.8

Indias Top 5 Domestic Passenger Vehicles Sales


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Company analysis


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Domestic Growth


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International Growth


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Last year


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Analyzing Competition

A systematic attempt to identify and understandkey elements of a competitors strategy in terms of objectives, strategies, resource allocation andimplementation through the marketing mix

f


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Threatof

substitutes

Potentialentrants Threat

of entrants

SuppliersBargaining

power

Substitutes

BuyersBargaining

power

COMPETITIVERIVALRY

Five forcesanalysis


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Grouping Competitors


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Takeaways

Pricing Strategy Price to Price-Value

Offering One Stop Shop to Customers

Creating Different Revenue StreamsProduct Repositioning

Customer Centric Approach

Vehicle Services maintenance market

Playing on Cost Leadership

CUSTOMER I ight i


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CUSTOMER Insights in-depth

People in age group 50-60 yearshold high regards for Tata brandwhich is one of the reasons theyintend to purchase Tata Motors cars.People recall big newspaperadvertisements for cars. Recall

value for television advertisements,that are not associated with acelebrity or with a catchy conceptsuch as Josh for Ford Ikon, isab small low.

CUSTOMER I ight i


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CUSTOMER Insights in-depth (contd..)

As opposed to the widespreadnotion that customers prefer theirfirst car to be compact andsubsequently they move ontobigger cars might not hold truealways. Customers display the

propensity to purchase compactcars even after buying a highersegment car probably owing tomore comfort, recommendation byfriends or for usa e b other famil

Insights


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Insights DEALERSHIP EXPERIENCE

The assumption that young peopleare more technological savvy ascompared to older people might not

be true. Older people (50-60 years)were found to be veryknowledgeable. One of the reasonsmight be their experience withowning cars.

Insights from sales force heads

inputs

ns g s


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ns g s DEALERSHIP

EXPERIENCE(contd..)Due to increased fuel price,nowadays mileage has become themost important criterion for a

significant customer base.

Availability of finance influences the

customers decision in many cases.For example, customers who havecome to buy Indica having fixedcash in hand, end up buying IndicaVista after getting financial facilities.

Insights test drive


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Insights test driveEXPERIENCE

People in age group 50-60 years sitat the back during test drive. This isbecause they look for comfort in thecar. This may also be attributed tothat most if the time they will not bedriving the car due to availability of

a driver. The customer came to know aboutthe car variant they are test drivinginside the car. This gap in theknowled e leads to an ex ectation


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Conclusion

Tata Motors has been at the forefrontof the Indian automobile industry's

anti-pollution efforts by introducing

cleaner engines. Therefore Tata Motors

Limited is always committed to

understanding customer needs.

The name of TATA itself says it all

PR


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P R E S E N T E D B Y :

N E H A R A W A L

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V I K A S C H O U D A R Y 6 1

S H A T A B D I D U T T A 5 1

M A N N U

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Tata Final Business Policies

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