A P ROJECT R EPORT O N

MARKETING

S TRATEGY E GBY D EEPAK EEPA K S. Y.B.B.A

O F

T ATA M OTORS T A TO

P UNJABI

ROLL N O. 17

TABLE OF CONTENTS

1. 2.

Executive Summary Tata Group Profile a. History b. Promoter Companies c. Group holding structure d. Company heads e. Mergers and Acquisitions

3.

Tata Motors Company Profile (H.R., National Network, International Operations, R & D, Manufacturing, Management)

4. 5. 6. 7. 8. 9. 10.

Marketing Mix Product, Price, Promotion, Place Before Sales & After Sales Services Products of Tata Motors Findings and Conclusions Problems and Suggestions Bibliography Annexures

DECLARATION

I, the undersigned, Mr. Deepak G. Punjabi, student of S.Y.B.B.A. from Bytco College, declare that this project entitled The Marketing Strategy of Tata Motors was carried out by me in the partial fulfillment of the course B.B.A. under University of Pune during 2007-08. This project was undertaken as a part of academic curriculum according to the University rule, norms and by no commercial interests and motives.

PLACE : Nashik

SIGN : ________________ NAME : DEEPAK PUNJABI.

ACKNOWLEDGEMENT

I would like to express my boundless gratitude to Mr. M. N. Desai, Sales Manager, Sterling Motors, Nasik for extending his kind co-operation and providing information regarding the Marketing Mix adopted by Tata Motors. I would also like to thank Prof. Vikrant Aher, who provided his sound guidance and extended his support to prepare this project report.

I would like to express my thanks to all other innumerable people, including my friends and seniors whom I might have forgotten to mention but nevertheless have played an important role and were an integral part of my research to make it a memorable one.

Last but not the least, my thanks to J.D.C. Bytco College, Nasik and Pune University who gave me an opportunity to reap the experience of working in the esteemed organization.

Deepak Punjabi S.Y.B.B.A. J.D.C. Bytco College, Nasik

EXECUTIVE SUMMARY

Automotive industry is one of the major businesses in todays world and to survive the intense competition in a market like that of India, an organisation has to adopt and effective marketing strategy. Organizations are spending millions of rupees on marketing of their products to ensure perpetual existence in the market. The objective of adopting intensive and diverse marketing strategies is 1. 2. 3. 4. To increase the sales. To maximize the profits. To ensure long-term establishment. To capitalize a major market share.

Purpose : The purpose of preparing this project was to study the marketing techniques adopted by Tata Motors and I have tried to include information not only on the marketing strategy of Tata Motors but also on the profile of entire Tata Group. It was great pleasure studying various products of Tata Motors and their marketing techniques and it has helped me to know the innovative marketing trends in Automobile Industry. My research emphasizes on the marketing strategy used by Tata Motors. The highlights of this study are :

To Understand the techniques of Advertisement, sales promotion and salesadopted by the company.

To Understand the Before and After Sales Services provided. To Understand the Marketing Mix adopted by the Co.For the purpose of the project, I visited Sterling Motors, Nasik, which is a dealership of Tata Motors in Nasik and met Mr. M.N. Desai, the Sales Manager. He provided me information about the marketing mix adopted by Tata Motors and the before and after sales services provided. However, he was unable to provide me with a letter certifying my visit to the dealership as it was against the Co. policy. Nevertheless, he provided me with the product brochures which I have attached herewith.

TATA MOTORS Profile Tata Motors Limited is India's largest automobile company, with revenues of Rs. 32,426 crores (USD 7.2 billion) in 2006-07. It is the leader by far in commercial vehicles in each segment, and the second largest in the passenger vehicles market with winning products in the compact, midsize car and utility vehicle segments. The company is the world's fifth largest medium and heavy commercial vehicle manufacturer, and the world's second largest medium and heavy bus manufacturer.

Five core valuesThe Tata Group has always sought to be a value-driven organisation. 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. HUMAN RESOURCES : The company's 22,000 employees are guided by the vision to be "best in the manner in which we operate, best in the products we deliver, and best in our value system and ethics." Tata Motors helps its employees realize their potential through innovative HR practices. The company's goal is to empower and provide employees with dynamic career paths in congruence with corporate objectives. All-round potential development and performance improvement is ensured by regular in-house and external training. The company has won several awards recognising its training programmes. NATIONAL NETWORK : Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of India. Over 4 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The company's manufacturing base is spread across India - Jamshedpur (Jharkhand) in the east, Pune (Maharashtra) in the west, and in the north in Lucknow

(Uttar Pradesh) and Pantnagar (Uttarakhand). A new plant is being set up in Singur (close to Kolkata in West Bengal) to manufacture the company's small car. The nationwide dealership, sales, services and spare parts network comprises over 2,000 touch points. The company also has a strong auto finance operation, TML Financial Services Limited, supporting customers to purchase Tata Motors vehicles.

INTERNATIONAL OPERATIONS : Tata Motors, the first company from India's engineering sector to be listed in the New York Stock Exchange (September 2004), has also emerged as an international automobile company. In 2004, it acquired the Daewoo Commercial Vehicles Company, Korea's second largest truck maker. The rechristened Tata Daewoo Commercial Vehicles Company has launched several new products in the Korean market, while also exporting these products to several international markets. Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo. In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and coach manufacturer, with an option to acquire the remaining stake as well. Hispano's presence is being expanded in other markets. In 2006, it formed a joint venture with the Brazil-based Marcopolo, a global leader in body-building for buses and coaches to manufacture fully-built buses and coaches for India and select international markets. Tata Motors also entered into a joint venture in 2006 with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market the company's pickup vehicles in Thailand. In 2006, Tata Motors and Fiat Auto formed an industrial joint venture at Ranjangaon (near Pune in Maharashtra, India) to produce both Fiat and Tata cars and Fiat powertrains for the Indian and overseas markets; Tata Motors already distributes and markets Fiat branded cars in India. In 2007, Tata Motors and Fiat Auto entered into an agreement for a Tata license to build a pick-up vehicle bearing the Fiat nameplate at Fiat Group Automobiles' Plant at Crdoba, Argentina. The pick-up will be sold in South and Central America and select European markets. These linkages will further extend Tata Motors' international footprint, established through exports since 1961. While currently about 18% of its revenues are from international business, the company's objective is to expand its international business, both through organic and inorganic growth routes. The company's commercial and passenger vehicles are already being marketed in several countries in Europe, Africa, the Middle East, Australia, South East Asia and South Asia. It has assembly operations in Malaysia, Kenya, Bangladesh, Ukraine, Russia and Senegal. RESEARCH & DEVELOPMENT : The foundation of the companys growth is a deep understanding of economic stimuli and customer needs, and the ability to translate them into customer-desired offerings through leading edge R&D. The R&D establishment includes a team of 1400 scientists and engineers. The company's Engineering Research Centre was established in 1966,

and has facilities in Pune, Jamshedpur and Lucknow. The ERC has enabled pioneering technologies and products. It was Tata Motors, which developed the first indigenously developed Light Commercial Vehicle, India's first Sports Utility Vehicle and, in 1998, the Tata Indica, India's first fully indigenous passenger car. Within two years of launch, Tata Indica became India's largest selling car in its segment. The ERC in Pune, among whose facilities are India's only certified crash-test facility and hemi-anechoic chamber for testing of noise and vibration, has received several awards from the Government of India. Some of the more prominent amongst them are the National Award for Research and Development Efforts in Industry in the Mechanical Engineering Industries sector in 1999, the National Award for Successful Commercialisation of Indigenous Technology by an Industrial Concern in 2000, and the CSIR Diamond Jubilee Technology Award in 2004. The company set up the Tata Motors European Technical Centre (TMETC) in 2005 in the UK. TMETC is engaged in design engineering and development of products, supporting Tata Motors' skill sets. Tata Daewoo Commercial Vehicle Company and Hispano Carrocera also have R&D establishments at Gunsan in South Korea and Zaragoza in Spain. The pace of new product development has quickened through an organisation-wide structured New Product Introduction (NPI) process. The process with its formal structure for introducing new vehicles in the market brings in greater discipline in project execution. The NPI process helped Tata Motors create a new segment, in 2005, by launching the Tata Ace, Indias first indigenously developed mini-truck. The years to come will see the introduction of several other innovative vehicles, all rooted in emerging customer needs. Besides product development, R&D is also focussing on environment-friendly technologies in emissions and alternative fuels. Through its subsidiaries, the company is engaged in engineering and automotive solutions, construction equipment manufacturing, automotive vehicle components manufacturing and supply chain activities, machine tools and factory automation solutions, high-precision tooling and plastic and electronic components for automotive and computer applications, and automotive retailing and service operations. True to the tradition of the Tata Group, Tata Motors is committed in letter and spirit to Corporate Social Responsibility. It is a signatory to the United Nations Global Compact, and is engaged in community and social initiatives on labour and environment standards in compliance with the principles of the Global Compact. In accordance with

this, it plays an active role in community development, serving rural communities adjacent to its manufacturing locations. With the foundation of its rich heritage, Tata Motors today is etching a refulgent future. Tata Motorfinance : Tata Motorfinance (TMF), the auto financing arm for Tata Motors, came into existence in June 2003. This was a common front-end, jointly formed by BHPC (Bureau for Hire Purchase and Credit) of Tata Motors and the asset financing arm of Tata Finance. This company was a virtual entity, with both the divisions maintaining their legal identity, and was in the market for exclusively financing Tata Motors vehicles. Subsequently Tata Finance was merged with Tata Motors and in April 2005 TMF became a division of Tata Motors. Manufacturing Tata Motors owes its leading position in the Indian automobile industry to its strong focus on indigenisation. This focus has driven the Company to set up world-class manufacturing units with state-of-the-art technology. Every stage of product evolution-design, development, manufacturing, assembly and quality control, is carried out meticulously. Our manufacturing plants are situated at Jamshedpur in the East, Pune in the West and Lucknow in the North. Jamshedpur: Established Jamshedpur company's in1945, unit first was unit and the the is

spread over an area of 822 acres. It consists of 4 major divisions - Truck Factory, Engine Factory, Cab & Cowl Factories, and the Novus. Pune: The Pune unit is spread over 2 geographical regionsPimpri (800 acres) and Chinchwad (130 acres). It was established in 1966 and has a Production

Engineering Division, which has one of the most versatile tool making facilities in the Indian sub-continent. . Lucknow: Tata Motors Lucknow is one of the youngest production facilities among all the Tata Motors locations and was established in 1992 to meet the demand for Commercial Vehicles in the Indian market. Uttarakhand The company has set up a plant for its mini-truck, Ace, at Pant Nagar in Uttarakhand. The plant will begin commercial production during the course of the year.

ManagementBoard of Directors Mr. Ratan N Tata (Chairman) Mr. N A Soonawala Dr. J J Irani Mr. V R Mehta Mr. R Gopalakrishnan Mr. Nusli N Wadia Mr. S M Palia Dr. R A Mashelkar Mr. Ravi Kant Mr. P P Kadle Mr. P M Telang

Senior Management Mr. Ravi Kant Mr. Praveen Kadle Mr. P M Telang Mr. Rajiv Dube P Managing Director Executive Director (Finance and Corporate Affairs) Executive Director (Commercial Vehicles) President (Passenger Cars)

Mr. C Vice-President (Chairman's Office) Ramakrishnan Mr. Shyam Mani Vice President (Sales and Marketing) CVBU Mr. K C Girotra Mr. R S Thakur Mr. M V Rajarao Mr. P Y Gurav Dr. S J Tambe Mr. Zackria Sait Mr. S Borwankar Mr. S Krishnan Mr. H K Sethna B Vice President (Lucknow Works & FBV) Vice President (Finance) Vice President (Manufacturing - Pune) Vice President Taxation) (Corporate Finance-Accounts and

Vice President (Human Resource) Vice President (Technical Services)

Mr. A M Mankad Head (Car Plant) Head (Jamshedpur Plant) Vice President (Commercial-PCBU) Company Secretary

Showcase Commercial Vehicles - Buses

SFC 407 Turbo Mini- bus

LP 407 Turbo Mini- bus

LP 709 E Turbo Bus

LPO 1510 CGS bus (CNG bus)

LP / LPO 1510

LP / LPO 1512 TC Turbo Bus

LP / LPO 1512 TC Turbo Bus

LPO 1610 TC RE Semi Low Floor Bharat Stage - II Bus

LPO 1616 TC Luxury Bharat Stage - II Bus

LP 1109 Bharat Stage II

Showcase - Defence

Tata 407 (4 x 4) Soft Top Troop Carrier

Tata 407 / (4 x2) Hard Top Troop Carrier

Tata LPTA 713 TC (4 x4)

Tata LPT 709 E Hard Top Troop Carrier

Tata SD 1015 TC (4 x4)

Tata LPTA 1615 TC (4 x 4)

Tata LPTA 1621 TC (6 x6)

Tata LPTA 1615 TC (4 x2)

Showcase - ICV

LPT 1109 Turbo Truck

LP 1109 Turbo Truck

Showcase LCV1

TL 4x4

Tata SFC 410 EX

Tata LPT 712 EX

Tata 207 DI EX- Single cab

Tata 207 DI - Single cab

Tata 207 DI - Crew cab

SFC 407 EX Turbo

SFC 407 Turbo Truck

LPT 709 E Turbo Container truck

LPT 407 Turbo Truck

SFC 709 E Aerial lift turbo Truck

Showcase - Tractor Trailers

LPS 3015 TC 4x2 BS2

LPS 3516 TC 4x2 BS2

LPS 4018 TC 4x2 BS2

Showcase - Tippers

SK 1613 697 TCIC 4x2 BS2

SK 1613 TC 4x2 BS2

LPK 1613 697 TCIC 4x2 BS2

Showcase - Rigid Trucks

SE 1613 697 TCIC 4x2

SE 1613 TC 4x2 BS2

LPT 1613 697 TCIC 4x2

LPT 1613 TC 4x2 BS2

LPO 1512 TC 4x2 BS2 Truck Chassis

LPT 2515 697 TCIC 6x2 BS2

LPT 2515 TC 6x2 BS2

LPT 2518 6x2

Showcase - Applications

2516 TRANSIT MIXER

2515 BULKER

LPT 2515/ LPT 2518 LOAD BODY

3516 BULKER

4018 BULKER

SEMI TRAILERS

Tata Ace

Tata Novus

Tata Magic

Tata Winger

Marketing Mix : 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 ones product. MARKETING MIX PRICE PROMOTION Pricing Strategy Personal Selling Pricing & Quality Advertising Price & Alterations Public Relations Discounts

PRODUCT Brand Packaging Innovations Quality

PLACE Channels of Distributions Physical Distribution Wholesaler & Retailers

1. PRODUCT (Brand, Packaging, Innovations, Quality) : a. Brand : Advertising is often used to make consumers aware of a productsspecial 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, packagingrefers 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 QCDept. 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. Astold 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 thefeatures 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 furtherdiscounts made from the profits of the dealer. However, the Co. may compensate the dealer for the discounts allowed to a certain extent.

3.

PROMOTION Relations)

(Personal

Selling,

Advertising,

Sales

Promotion,

Public

a. Personal Selling : There is minimal personal selling involved. The SalesOfficers at the dealerships collect prospective customer databases and perform cold calling to attract customers.

b. Advertising : Advertising is a form of commercial mass communicationdesigned 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 andcoordinate 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 ofdistribution 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 atJamshedpur, Lucknow and 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.

SALES SERVICES : A Consumer desires a no. of services before and after the purchase of the product. The provision for these services assures the buyer of a good product and good service. The various sales services provided by Tata Motors are as follows : I) BEFORE SALES SERVICESi. ii.

Test drive Providing information, demo, pamphlets, brochures etc. which helps the To explain the legal formalities to be complied with.

customer to select an appropriate vehicle as per his need and requirement.iii.

II)

AFTER SALES SERVICESi.

No. of free Services 4 - 1000-1500 km - 10,000 km - 20,000 km - 30,000 km OR OR OR OR 1 month 12 months 24 months 36 months

First Service Second Service Third Service Fourth Serviceii. iii.

Warranty for vehicles 18 months and unlimited kilometers. On road service : The Co. provides for On-road service in case of a breakdown.

The Co. has a nationwide toll-free number : 1800-225582, where the customer can submit his query and the nearest dealer will approach to fix the problem.iv.

After Sales and Service follow-ups.

PROBLEMS AND SUGGESTIONS

1. Despite good products, better service and competitive rates, the Co. has not succeededin retaining its market share. The Co. succeeded in capturing a good market share in many of its product segments. However, it could not retain the market share with introduction of new vehicles of competitors. Introduction of Toyota Qualis effected the market share of Tata Sumo. The Co. should make efforts to retain and expand its acquired market share.

2. The Co. has a good R & D and other resources. But it fails to give a variety in aparticular segment i.e. in SUV it has only Safari, in mid-size segment it has only Indica. It should bring more models in its segments to give the customer a choice.

3. The Co. does not have an aggressive advertisement strategy. The competitors haveappointed brand ambassadors to capitalize on the market e.g. Amir Khan for Toyota Innova, Shah Rukh Khan for Hyundai Santro and Saif Ali Khan for Chevrolet. It can appoint a brand ambassador or take up an aggressive advertisement campaign to influence the prospective customers. 4. The products have good features. However, the designs are not quite attractive. It can learn from its competitor Maruti Suzuki which has succeeded in bringing innovative designs with Swift, Zen Estilo and SX4.

FINDINGS AND CONCLUSIONS The Co. manufactures good products and has prospective bright future. However, there is scope for improvement in marketing of its products and product development. The products of the Co. have good demand in the market due to which, the Co. enjoys good turnover. But the Co. focuses mainly on the commercial vehicles and has not succeeded in bringing innovations in its passenger vehicles. However, the Co. has a sound capital base and latest R & D tools which gives it a potential to overcome the competition from Mahindra, Maruti Suzuki and Hyundai in the near future.

BIBLIOGRAPHYwww.tata.com www.tatamotors.com Microsoft Encarta Encyclopedia Books Referred - Marketing Management by Philip Kotler