marketng strategy-tata motors ruchika edited

7/28/2019 Marketng Strategy-Tata Motors Ruchika Edited

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1.1 OVERVIEW OF INDUSTRY AS A WHOLE

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

will celebrated a centenary of its existence in India in 1998. Despite this

head start, the industry has never quite matched up to the performance of its

counterparts in other parts of the world. The all-pervasive atmosphere

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

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

competition and smothered the development of the Indian automobile

industry. Moreover, the industry was considered low priority as cars were

considered to be an "unaffordable luxury."

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

was finally deregulated in 1993 and many companies, both Indian and

foreign, announced their plans to enter the market. The last four years haveseen companies like Daewoo, Ford, GM, and Mercedes-Benz launch their

cars in India. The passenger car industry notched impressive growth rates

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

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

tricking down to 1%. Nonetheless, times have changed significantly - the

days of the customer chasing the dealer to purchase poor quality cars backed

by inefficient service are history . Today, the customer dictates the terms.

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

from that in the developed nations. In India, the economy segment accounts

for the largest share of the cars sold, as compared to mid-range segment in

the mature markets. The economy and the premium segment face the lowest

competitive threats, while the premium segment will witness intense

competition due to lower volumes.

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1.2 PROFILE OF THE ORGANIZATION

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

80 billion, is the country's leading commercial vehicle manufacturer and has

significant presence in the multi-utility and passenger car segments.

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

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

manufacture of commercial vehicles in collaboration with Daimler Benz, Germany.

By the time their collaboration ended in 1969, Tata motors had become an

independent producer of Medium Commercial Vehicles with a great degree of

indegenisation. It had also developed the capability of designing, testing and

manufacturing such vehicles.

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

indigenously designed, developed and manufactured passenger car. Tata Motors

followed that up with the Tata Indigo, a sedan that was launched in December 2002.

The company also makes several other passengers vehicles, including the Safari,

Sumo and Sierra.

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

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

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1.3 SWOT ANALYSIS

Strength

Technology and manufacturing know-how that lets Tata Motors make cars

more profitably than most other carmakers.

Flexible manufacturing system gives it an advantage over most of the

carmakers.

It requires smaller number of platforms but multiple assembly lines for

production that provides better, cheaper, more oriented management and

production.

Research- Its R&D budget now exceeds that of Japan's No. 2, Nissan. Tata

Motors spends 5% of revenues on R&D.

Tata Motors possesses Goodwill and Credibility in the Indian automobile

market

Weaknesses-

It is a new concept to be launched in the market where majority of the

consumers go for family cars. Also it has not been tested in the market,

therefore there is risk involved with the launch.

It can't afford a wrong move on big-volume models. Tata Motors relies on

Civic and Accord sedans for 55% of sales.

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Tata Motors is unable to spread its fixed costs for engineering, technology,

and marketing over a huge volume of vehicles.

Opportunity-

It is first sports car to be launched in the Indian market; therefore it has no real

competitor.

According to the facts India has emerged as one of the largest automobile

market in the global community.

Threat

A new competitor in Indian market.

Price wars with competitors.

A competitor like Toyota has a new, innovative product or service.

Competitors may have superior access to channels of distribution.

Taxation is introduced on your product or service.

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1.4 OBJECTIVES

1. To judge the awareness level of small cars.

2. To study marketing strategies of tata motors

3. To find people expectations or satisfaction regarding the small cars.

4. Examine the psychographics of small size car customers.

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1.5 RESEARCH DESIGN

The research is based on the information collected by the help of the questionnaires

filled.

The first three questions aim at the basic introductory information of the organization

and the person being interviewed thus rendering the follow up work easier. The fourth

question is about the financial standing of an organization, it gives an idea about the

financial status of the society being approached. The fifth question aims at generating

information about the various sources of funds of the societies. The sixth and seventh

questions deal about the financial performance of the societies. The eighth question is

to find out about what a society does with the surplus amount generated by them. The

ninth question is meant to gather information about the people who are instrumental

in advising and putting to action the investment plans for the society. The tenth

question is about what kind of investments are preferred by the society, on the basis of

the organization or on the basis of the time period. The eleventh question talks about

the institutions in which the societies make their investments in, say the banks or

other institutes. The twelfth question tries to assess what is it exactly that the societies

look for, while investing. For example do they prefer a high rate of interest, or safety,

or location, etc..

Thus the research is based only on the basis of the information

gathered with the help of the questionnaires.

RESEARCH INSTRUMENT

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For doing the survey research, structured questionnaire with both

open-ended and closed-ended questions was used.

MODE OF SURVEY

The mode of survey was personal interview with the respondents

during the filling up of the questionnaires.

PRIMARY DATA

Primary data is that kind of data which is collected directly by the investigator himself

for the purpose of the specific study. Primary Data is collected by the investigator

through interviews of company employees, vendors, distributor etc. Data such

collected is original in character. The advantage of this method of collection is the

authentic. A questionnaire of about 50 questions was made and it was given to the

dealers to fill it up for our research. The research was a kind of conclusive research as

it helps in the testing of hypothesis. The method of sampling was the Random method

as it is unbiased.

SECONDARY DATA

When an investigator uses the data that has been already collected by others, is called

secondary data. The secondary data could be collected from Journals, Reports,

libraries, magazines, fair & conference and other publications. The advantages of the

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secondary data can be It is economical, both in terms of money and time spent .The

researcher of the report also did the same and collected secondary data from various

internet sites like www.google.com, www.airtel.com, www.hutch.co.in and many

more. The researcher of the report also visited various libraries for collection of the

introduction part.

QUESTIONNAIRE DESIGN

We make questionnaire to know which category of people opts for which kind of

plans. In this category the factors included are such as income, background, age, etc.

This includes 2 types of questions

1. open ended

2. closed ended

1. open ended : In this respondents are not bounded to answer within a set of

choices and can give their own views

2. Close-ended: in this respondents are bounded to answer within a set of

choices.

I have designed my questionnaire on the basis of close-ended questions as it is

more feasible to calculate data from it.

SAMPLE DESIGN:

While developing a sample design, following points should be kept in mind:

Sampling unit: A decision has to be taken concerning a sampling unit before

selecting sample. Sampling unit may be a geographical one such as state,

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district, village etc or a construction unit such as house, flat etc. or it ,may be

as social unit such as family, club, school etc or it may be an individual . the

researcher will have to decide one or more of such units that he has to select

for his study

Size of the sample: This refers to the number of items to be selected from the

universe to constitute a sample. This is a major problem before a researcher.

The size of the sample should be neither is excessively large, nor too small. it

should be optimum

An optimum sample is one which fulfills the requirements of efficiency,

representatives, reliability and flexibility

Sample element and sample unit

45 people have been interviewed to know their opinion about insurance and finance

Extent

Delhi (sample unit)

Time frame: 8weeks

Sampling technique: Average method technique.

Sampling Technique: -

How should the respondent be chosen? In the Project sampling is done on basis of

Probability sampling . Among the probability sampling design the sampling design

chosen is stratified random sampling. Because in this survey I had stratified the sample

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in different age group, different gender and different proffesion . Sampling frame: 45-

50 People.

SIGNIFICANCE OF THE STUDY

For any business venture, Marketing Strategygo hand in hand. Opportunities

come and go but business comes from the ones, which are handled properly in terms

of leads. Leads for any new opportunity are very important for it to turn out a

profitable venture.

MANAGERIAL USEFULNESS OF THE STUDY

Helps to have sale experience

Helps to deal with different customers

Helpsto overcome the objections of the customers

Helps to understand the problems of agents in a broader prospect

2.1 COMPANY PROFILE

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Tata Motors Limited is India's largest automobile company, with consolidated

revenues of INR 1,65,654 crores (USD 32.5 billion) in 2011-12. It is the leader incommercial vehicles in each segment, and among the top in passenger vehicles with

winning products in the compact, midsize car and utility vehicle segments. It is also

the world's fourth largest truck and bus manufacturer.

The Tata Motors Group's over 55,000 employees are guided by the mission "to be

passionate in anticipating and providing the best vehicles and experiences that excite

our customers globally."

Established in 1945, Tata Motors' presence cuts across the length and breadth of

India. Over 7.5 million Tata vehicles ply on Indian roads, since the first rolled out in

1954. The company's manufacturing base in India is spread across Jamshedpur

(Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand),

Sanand (Gujarat) and Dharwad (Karnataka). Following a strategic alliance with Fiat

in 2005, it has set up an industrial joint venture with Fiat Group Automobiles at

Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and Fiat powertrains.

The company's dealership, sales, services and spare parts network comprises over

3,500 touch points.

Tata Motors, also listed in the New York Stock Exchange (September 2004), has

emerged as an international automobile company. Through subsidiaries and associate

companies, Tata Motors has operations in the UK, South Korea, Thailand, Spain,

South Africa and Indonesia. Among them is Jaguar Land Rover, acquired in 2008. In

2004, it acquired the Daewoo Commercial Vehicles Company, South Korea's secondlargest 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, and subsequently the remaining stake in 2009. Hispano's presence is

being expanded in other markets. In 2006, Tata Motors formed a 51:49 joint venture

with the Brazil-based, Marcopolo, a global leader in body-building for buses and

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coaches to manufacture fully-built buses and coaches for India - the plant is located in

Dharwad. In 2006, Tata Motors entered into joint venture with Thonburi AutomotiveAssembly Plant Company of Thailand to manufacture and market the company's

pickup vehicles in Thailand, and entered the market in 2008. Tata Motors (SA)

(Proprietary) Ltd., Tata Motors' joint venture with Tata Africa Holding (Pty) Ltd. set

up in 2011, has an assembly plant in Rosslyn, north of Pretoria. The plant can

assemble, semi knocked down (SKD) kits, light, medium and heavy commercial

vehicles ranging from 4 tonnes to 50 tonnes.

Tata Motors is also expanding its international footprint, established through exports

since 1961. The company's commercial and passenger vehicles are already being

marketed in several countries in Europe, Africa, the Middle East, South East Asia,

South Asia, South America, CIS and Russia. It has franchisee/joint venture assembly

operations in Bangladesh, Ukraine, and Senegal.

The foundation of the company's growth over the last 66 years is a deep

understanding of economic stimuli and customer needs, and the ability to translate

them into customer-desired offerings through leading edge R&D. With over 4,500

engineers, scientists and technicians the company's Engineering Research Centre,

established in 1966, has enabled pioneering technologies and products. The company

today has R&D centres in Pune, Jamshedpur, Lucknow, Dharwad in India, and in

South Korea, Spain, and the UK.

It was Tata Motors, which launched the first indigenously developed Light

Commercial Vehicle in 1986. In 2005, Tata Motors created a new segment bylaunching the Tata Ace, India's first indigenously developed mini-truck. In 2009, the

company launched its globally benchmarked Prima range of trucks and in 2012 the

Ultra range of international standard light commercial vehicles. In their power, speed,

carrying capacity, operating economy and trims, they will introduce new benchmarks

in India and match the best in the world in performance at a lower life-cycle cost.

Tata Motors also introduced India's first Sports Utility Vehicle in 1991 and, in 1998,

the Tata Indica, India's first fully indigenous passenger car.

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In January 2008, Tata Motors unveiled its People's Car, the Tata Nano. The Tata

Nano has been subsequently launched, as planned, in India in March 2009, andsubsequently in 2011 in Nepal and Sri Lanka. A development, which signifies a first

for the global automobile industry, the Nano brings the joy of a car within the reach of

thousands of families.

Tata Motors is equally focussed on environment-friendly technologies in emissions

and alternative fuels. It has developed electric and hybrid vehicles both for personal

and public transportation. It has also been implementing several environment-friendly

technologies in manufacturing processes, significantly enhancing resource

conservation.

Through its subsidiaries, the company is engaged in engineering and automotive

solutions, automotive vehicle components manufacturing and supply chain activities,

vehicle financing, and machine tools and factory automation solutions.

Tata Motors is committed to improving the quality of life of communities by working

on four thrust areas - employability, education, health and environment. The activities

touch the lives of more than a million citizens. The company's support on education

and employability is focused on youth and women. They range from schools to

technical education institutes to actual facilitation of income generation. In health, the

company's intervention is in both preventive and curative health care. The goal of

environment protection is achieved through tree plantation, conserving water and

creating new water bodies and, last but not the least, by introducing appropriate

technologies in vehicles and operations for constantly enhancing environment care.

With the foundation of its rich heritage, Tata Motors today is etching a refulgent

future.

2.2 AREAS OF BUSINESS

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

utility vehicles and passenger cars. In the year ending March 2001, the companys

revenues from its four manufacturing plants at three locations in India were Rs. 81.64

billion (US $ 1.73 billion). In 2000, they were Rs. 89.61 billion. (US $ 1.9 billion)

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

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

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

in the previous year.

Locations

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

Chinchwad near Pune in Maharashtra, and Lucknow in Uttar Pradesh. Land has been

acquired at Dharwad (Karnataka) to build a fifth plant.

Collaborations

The company has technical tie-ups with:

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

Italy, for assistance in small car body design and styling; and

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

for passenger cars.

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Subsidiaries

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

business is manufacture and sale of construction, material handling and

earthmoving equipment.

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

provides services for SAP implementation, CAD/CAM-based design, and e-

commerce facilities to customers in India and abroad.

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

owned subsidiary of Tata Motors since its inception. It is registered with RBI

as a Non Banking Finance company.

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

company and proposes to undertake activities pertaining to the sales and

service of Tata Motors s vehicles and spare parts.

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

this company was incorporated on January 18, 1972 and is currently engaged

in the business of automobile sales and services.

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

objective of acquiring the Heavy-Duty Gear Box Division of Tata Motors at

Jamshedpur as a going concern. It supplies transmissions and their parts to

Tata Motors against purchase orders raised by Tata Motors on HVTL.

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

acquiring the Heavy-Duty Axle Division of Tata Motors at Jamshedpur as a

going concern. It supplies axles and their parts to Tata Motors against

purchase orders raised by Tata Motors on HVAL.

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

objective of acquiring the Machine Tool and Growth Divisions of Tata Motors

as a going concern.

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

a wholly owned subsidiary of Tata Technologies Limited on December 22,

2000. The company is engaged in the business of computer consultancy and

related services.

Strategic alliances

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

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

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

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

makes turbochargers for diesel engines manufactured by Tata Cummins Ltd.

and other OEMs;

Concorde Motors Ltd., a joint venture with Jardine International Motors

(Mauritius) for dealerships of passenger vehicles. Concorde has dealerships

for Tata Motors passenger vehicles in Delhi, Mumbai, Bangalore, Ludhiana,

Hyderabad, Chennai and Lucknow.

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

of high precision toolings as well as electronic and plastic components for the

computer industry;

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

vehicles..

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2.3 PROBLEMS OF THE ORGANIZATION

Given the city conditions, the consumers needed a very good overall

performance of cars , small cars taking less space has no parking problems,

easy derivability in heavy traffic conditions, easy gear shifts and good fuel

efficiency. The small car owners being mostly the professional class or the

upper middle class were very cost conscious and due to their busy life styles

preferred low maintenance in their cars .

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

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

things like post sale service satisfaction, dealership locality towards customers, way

of treatment at these dealerships and service stations, solving the customers problems

and concerns to their full satisfaction and so on.

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

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

function of customers expectation of how a feature or a vehicle system should look

or perform and any performance short of this expectation is perceived as a problem.

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2.4 A CHRONOLOGY OF IMPORTANT MILESTONE

OF THE COMPANY

1945

Tata Sons purchased the Tatanagar shops from the Government of India on June

1, 1945 for Rs. 25.39 lakhs with the aim of immediately manufacturing steam

locomotive boilers. Later it planned to manufacture complete locomotives and

other engineering products.

Tata Motors was established on September 1.

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

manufacture of steam locomotives

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

manufacture of medium commercial vehicles at Jamshedpur. First

commercial vehicle produced within six months of agreement.

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

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

wagons for the Indian Railway.

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

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

an act of Parliament in 1970.

1947 Manufacture of boilers for imported locomotives commenced. This line

was discontinued in April 1958.

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

were built for employees in Jamshedpur.

1948 Steam Road Roller introduced in collaboration with

Marshal Sons (UK)

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St. Etienne, Belgium.

1959 Research and Development Center set up at Jamshedpur.

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

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

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

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

the same year.

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

Lanka.

1964 Manufacture of popular 1210 vehicle model (with 7.5 T payload)

commenced

1966 Acquisition of Investa Machine Tool Co.

Setting up of Machine Tools Division at Pune.

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

and development.

1967 Press Tool Division set up at Pune.

Vehicle manufacture facilities steadily built up at Pune

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

manufacture of unit construction special purpose machines.

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

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

1971 DI engines introduced.

1977 First commercial vehicle produced at Pune.

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1983 HCVs, including articulated vehicles, introduced.

1984 Collaboration with M/s Hitachi Construction Machinery Co. Ltd., Japan,

for manufacture of hydraulic excavators.

Expansion of capacity at Pune.

1985 First hydraulic excavator produced under Hitachi collaboration.

Broad banding of licence (to manufacture only commercial vehicles above

8 Ton GVW) to include manufacture of all medium, heavy and light

commercial vehicles, jeep type vehicles and passenger cars.

Broad banding of excavator licence to manufacture all types of

earthmoving machinery.

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

tools.

Collaboration with Niigata Engineering Co. Ltd, Japan

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

Corp., Japan for NC /CNC In line Machining Centers and flexible

manufacturing systems.

1986-90

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

completely indigenous design with minimal import content. Also met fuel

efficiency norms specified by the government

1987 Second model of completely indigenously designed LCV - TATA 608

produced.

LPT 2416 a multi-axled vehicle introduced

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1989 Third model of LCV Tatamobile 206 produced

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

for know-how of manufacturing aluminium castings.

Collaboration with Hitachi, Japan, for manufacture of a new generation EX

series hydraulic excavator.

1990 First EX model hydraulic excavator produced.

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

1991-94

1991 Introduction of indigenously designed passenger cars - Tata Sierra and

Tata Estate.

TAC 20 crane produced.

One-millionth vehicle rolled out.

1992 Production of MCV's commenced at Lucknow.

LPT 2213 - a multi-axled vehicle launched.

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

robots.

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

to manufacture high horsepower and emission-friendly diesel engines for

medium and heavy commercial vehicles.

Tata Cummins Private Limited incorporated in Jamshedpur, Bihar, on

0ctober 20, 1993.

1994 Tata Sumo - a multi-utility vehicle launched.

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

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

Benz for manufacture of Mercedes Benz passenger cars in India.

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

manufacturing turbochargers to be used on Cummins engines.

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

November 22, 1994.

Tata Holset Pvt. Ltd. incorporated in Dewas, Madhya Pradesh, on

December 20, 1994.

Collaboration with Schaudt Maschinenbau GmbH, for manufacturing CNC

cylindrical grinding machines.

The Company was restructured into two Strategic Business Units

Automobile Business Unit (ABU), and Construction Equipment Business

Unit (CEBU).

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1994 Tata Sumo - a multi-utility vehicle launched.

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

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

Benz for manufacture of Mercedes Benz passenger cars in India.

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

manufacturing turbochargers to be used on Cummins engines.

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

November 22, 1994.

Tata Holset Pvt. Ltd. incorporated in Dewas, Madhya Pradesh, on

December 20, 1994.

Collaboration with Schaudt Maschinenbau GmbH, for manufacturing CNC

cylindrical grinding machines.

The Company was restructured into two Strategic Business Units

Automobile Business Unit (ABU), and Construction Equipment Business

Unit (CEBU).

1995-96

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

models EX 40 and EX 60.

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

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commenced.

Mercedes Benz car E220 (W124) launched.

Tata Cummins engine plant inaugurated

1996 First engine produced by Tata Cummins in January 1996.

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

1996.

Tata Sumo Deluxe launched.

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

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

CEBU Units, in Dec 1996.

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

Motors and Jardine International Motors (Mauritius) Ltd.

1997-98

1997 Industrial Entrepreneurs Memorandum was filed for taking up manufacture

of special purpose vehicles and construction equipment at Dharwad in Jan

1997.

Management Services Division of the Company was transferred to the

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

Apr 1997.

Tata Sierra Turbo launched.

100,000th Tata Sumo rolled out.

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The commercial vehicle, LPT 909 introduced.

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

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

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

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

Two millionth vehicle rolled out.

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

to replace Series I & III machines, in Mar 1998.

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

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

as a subsidiary of Tata Motors , in Dec 1998.

1999

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

payment within a week, in Jan 1999.

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

Motors ".

Commercial production of Indica begins and first car is sold.

Construction Equipment Business Unit is transferred to TELCON.

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

Development of Indigenous Technology in the Mechanical Engineering

Industries Sector instituted by Department of Scientific and Industrial

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

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2000 -2005

2001 Order for 500 Nos. of Tata Indica received for Malta. First batch of 160 Nos.

exported in Jan 2000.

Indica with Bharat Stage II (Euro II) compliant diesel engine launched in Feb

2000.

Machine Tools and Growth Divisions, Axle Division and Transmission

Division of Tata Motors transferred to newly formed subsidiaries Telco

Automation Ltd., HV Axles Ltd. and HV Transmission Ltd. respectively on

March 31 2000.

The Automobile Business Unit was restructured into Commercial Vehicles

Business Unit and Passenger Car Business Unit, in Mar 2000.

Tata Motors bagged the National Award for successful commercialization of

indigenous technology by an industrial concern for the year 2000, for the

indigenous development and commercialization of Tata Indica, in Mar 2000.

Utility vehicles with Bharat Stage II (Euro II) compliant engine launched, in

Mar 2000.

Indica 2000, Bharat Stage II (Euro II) compliant with Multi Point FuelInjection petrol engine launched, in Apr 2000.

Tata Motors selected for the "Good Corporate Citizen Award" by Bombay

Chamber of Commerce and Industry for the year 1999-2000. The award was

received later in April 2001.

Tata Motors received the "All India Trophy for Highest Exports" for the year

1998-99 in the Capital Goods Exports- Non- SSI category, from Engineering

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Export Promotion Council (EEPC) on May 31, 2000.

Tata Motors was awarded the EEPC Regional Top Exporter's Trophy in the

category of 'Units registered with DGTD/ SIA/ Textile Commissioner etc.' for

engineering exports in the year 1998-99 on November 10, 2000.

Second prize- "Central Pollution Control Board Award for Environment

Protection" was bagged by Tata Motors at ENVIRO INTERNATIONAL,

2000 which was jointly organized by TAFCON Projects (India) Ltd. and

Royal Dutch Jaarbeurs, Netherlands, in Pragati Maidan, Delhi from

September 27 to 29, 2000.

Launch of CNG Buses in December, 2000.

Launch of 1109 vehicle (11 Ton GVW).

Hitachi inducted as an equity partner for TELCON under shareholder's

agreement with Tata Motors

2002 Indica V2 launched - 2nd generation Indica.

100,000th Indica wheeled out.

Launch of CNG Indica.

Launch of the Tata Safari EX

Indica V2 becomes India's number one car in its segment.

Exits joint venture with Daimler Chrysler.

2003 Unveiling of the Tata Sedan at Auto Expo 2002.

Petrol version of Indica V2 launched.

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Launch of the EX series in Commercial vehicles.

Launch of the Tata 207 DI.

2,00,000th Indica rolled out.

5,00,000th passenger vehicle rolled out.

Launch of the Tata Sumo'+' Series

Launch of the Tata Indigo.

Tata Engineering signed a product agreement with MG Rover of the UK.

2004 Launch of the Tata Safari Limited Edition.

The Tata Indigo Station Wagon unveiled at the Geneva Motor Show.

On 29th July, J. R. D. Tata's birth anniversary, Tata Engineering becomes

Tata Motors Limited.

3 millionth vehicle produced.

First CityRover rolled out

135 PS Tata Safari EXi Petrol launched

Tata SFC 407 EX Turbo launched

Tata Motors signs MOU for acquisition of Daewoo Commercial Co. Ltd.

Korea

Tata Motors unveils new product range at Auto Expo '04.

New Tata Indica V2 launched

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Tata Motors and Daewoo Commercial Vehicle Co. Ltd. sign investment

agreement

2005

Indigo Advent unveiled at Geneva Motor Show

Tata Motors completes acquisition of Daewoo Commercial Vehicle

Company

3.1TELCO

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

10 commercial vehicle producers in the world.

The transition of Tata Motors from being a predominantly commercial vehicle

manufacturer to a complete automobile company began in the early 1990's with the

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launch of the first Sports Utility vehicle from Tata- the Sierra and later the Tata

Estate. The insights gained into customer needs in these markets led to the

development of another world-class Sports Utility Vehicle, the Tata Safari, launched

in 1998.

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

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

the Tata Group Chairman Ratan N Tata's vision of developing and manufacturing a

truly Indian car that would use modern technology and contemporary styling of the

small car genre. It went on to set a benchmark in terms of its value proposition in

terms of best value for money in its segment and internal spaciousness.

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

1999 has translated into its capturing more than 17% of the premium small car

segment, and9 8 % of the entire passenger car market in India within a year.

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

the final vehicle assembly, the company continues to be open to global alliances to

effectively enhance its competitiveness in the fast globalizing Indian markets.

Setting standards of corporate governance, Tata Motors focuses on Complete

Customer Satisfaction. With benchmarking systems to sell world-class products and

services, Tata Motors continues to uphold the trust of its various stakeholders, viz.

shareholders, customers, employees and business associate.

Business Sector

The Tata Group runs businesses in seven key industrial sectors, namely, Materials,Energy, Chemicals, Consumer Products, Engineering, Communications and

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Information Systems, and Services. TELCO is Tatas flagship company in the

Engineering sector.

Business Models

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

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

Model, though at a much lower scale.

Business

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

commercial vehicles, multi utility vehicles and passenger cars.

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

various sub-brands and products in these categories:

1. Passenger Cars

2. Utility Vehicles

3. Commercial Vehicles

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

a. Tata Indica

b. Tata Indigo

c. Tata Safari

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

the all-new Indica Sedan, set out to storm the Indian Mid-Size Passenger car

segment, which would be launched in the last quarter of 2002.

Confirming to International standards all these vehicles are available with various

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

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

a. Tata Sumo

b. Telco Sport

c. Telcoline Pickup Vans

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

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

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

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

and so many more uses.

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

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

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

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

a. Buses

- Small Buses (4 models)

- Big Buses (4 models)

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b. Trucks

- Light Trucks (5 models)

- Medium/Heavy Trucks (9 models)

c. Tippers (3 models)

d. Tractors (3 models)

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STRATEGIC GROUP MAPS

INTERNAL ANALYSIS

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

comes into picture, the idea is to look for ways to

offer the customer the best value for his money.

And the way we define value, the word covers

all the possible and not so possible ways to

customer satisfaction.

STRATEGIC INTENT

Leadership with Trust

Purpose

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

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

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

requires aggressive growth in its focused areas of business.

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

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

standards of behaviour expected from employees and companies continuously

enriches this heritage.

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

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

sustained growth and long-term success.

5 Core Values

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

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

underpinning the way it does business are:

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

Everything we do must stand the test of public scrutiny.

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

our colleagues and customers around the world and always work for the benefit of

India.

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

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

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

our customers and partners around the world, building strong relationships based

on tolerance, understanding and mutual cooperation.

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

communities and environments in which we work, always ensuring that what

comes from the people goes back to the people many times over.

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Definition Of Value At TELCO

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

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

of product safety, reliability, utility or aesthetics. We believe in creating lasting

relationships with our customers and business partners.

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3.1 MANUFACTURING UNITS OF TELCO

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. Its manufacturing plants are situated at Jamshedpur in the East, Pune in

the West and Lucknow in the North.

Jamshedpur:

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

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

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

independent subsidiaries. The Truck Division boasts of two assembly lines. The main

assembly line, measuring 180 metres in length, has 20 stations with a vehicle rolling

out every 8 minutes while the other line is dedicated to Special Purpose Vehicles

(SPVs). State-of-the-art facilities like a Centralized Paint and Press Shop with a set-up

of a 5000 tonne Siempelkamp press line and a cut-to-length line for strip preparation

purchased from M/s. Kohler of Germany makes it a fairly advanced production outfit.

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

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

better and highly automated foundries in the world. The Foundry has a sophisticated

Kunkel Wagner high pressure moulding line, which has a rated production capacity of

90 pairs of moulds every hour. The Foundry has its own melting shop, core shop and

sand plant. Other advanced facilities include Channel Furnaces, Computerized

Testing Equipment etc. In 1993, the Foundry was ISO 9002 certified by the Bureau

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Veritas Quality International and later followed it up with the more stringent QS 9000

certification from the BVQI in the year 2000.

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

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

modern forging set-ups in the country. It produces critical forging like crankshafts,

front axle beams and steering parts for the automobile plant. The new forging line,

installed on April 20, 1984, has the capability to forge front axle beams at 90 sec per

piece and crankshafts at 120 sec per piece. Mechanical presses help produce a variety

of heavy forging. The sophisticated FIDIA Digit 165 CC graphite milling machine

links shop floor machines to the design workstation. The Forge has been certified as

ISO 9002 and QS 9000 by the BVQI.

Pune:

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

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

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

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

the most integrated automotive manufacturing centers in the country producing a

large variety of individual items and aggregates. It is engaged in the design and

manufacture of sophisticated press tools, jigs, fixtures, gauges, metal pattern and

special tools, as well as models for the development of new ranges of automobile

products. Its capabilities have enabled Tata Motors to introduce new products and

improve existing ones without resorting to imports of dies or fixtures.

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

automated dies, fixtures and welding equipment. Its large design group is fully

conversant with state-of-the-art CAD facilities and manufacturing facilities

comprising of light and heavy CNC machine shops, jigs boring room, plastic template

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shop, wood pattern and model pattern shop, five axis precision machine tools and

laser control machines. To cope with such a diverse range, four assembly lines have

been established, one each for MCVs and HCVs, LCVs, multi-utility vehicles and one

for Passenger Cars (Indica).

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

manufacture over five shops - the engine shop, the transmission shop, press and body

shops, paint shop and the trim and final assembly shop. The shops are fully automated

ensuring that there is minimal chance for error in the manufacturing processes. After

the car is completely assembled, it goes through several checks like wheel alignment,

side slip test, brake test, shower test, and a short test run before it is ready for

dispatch.

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

computerized, enabling smooth operations and minimum inventory needs.

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

Tool Controllers, PLCs, and Test rig instrumentation, Servomotors, Proximity

Switches. In addition, it has developed a number of components such as flashers,

horns, timers that are used in Tata Motors vehicles.

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

worldwide. The Iron Foundry produces 16,000 tonnes of high precision castings per

year with the help of 450 employees. These include Cylinder Blocks, Cylinder Heads,

Gear Box Housing, etc. To dispense with the need for outsourcing, an Aluminium

Foundry with an annual capacity of 700 tonnes has also been established.

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Lucknow:

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

1991 and covering an area of 600 acres, it was primarily started to assemble Medium

Commercial Vehicles (MCVs) to meet the demand in the Northern Indian market.

However, in 1995, the unit started manufacturing bus chassis of Light Commercial

Vehicles (LCVs) and SUMO's. The unit is equipped with facilities to manufacture

spare parts. Subsequently, G-16 and G-18 Gear Parts were added in 1998. The plant

started to assemble G -16 GearBoxes in 2000 to meet the in-house requirement for

SUMO vehicles.

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3.2 PASSENGER CARS SEGMENTATION

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

from that in the developed nations. In India, the economy segment accounts

for the largest share of the cars sold, as compared to mid-range segment in

the mature markets. The economy and the premium segment face the lowest

competitive threats, while the premium segment will witness intense

competition due to lower volumes.

Segment-Wise Classification of the Indian Car Market Segment

Range Price ('000 Rs.) Models

Economy Maruti 800, Maruti Omni,

Premier, Ambassdor, Hyundai Santro

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

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

Mitsubishi Lancer, Hyundai Accent

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

benz

Key Demand Drivers

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

drove passenger car demand. However, household income is no longer the

single most important factor in determining the demand for vehicles. Other

critical factors are the mobility needs of people and the availability of cheap

finance. The top three income groups - middle, upper middle, and high -

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

million families. The number of high-income households is growing very

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rapidly, more so in the rural areas. These findings have revolutionary

implications for the passenger car market. The development of the used car

market will also play a major role, as the customers will be encouraged to

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

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

reformulate fuels and lubricants so as to reduce vehicle-operating costs.

PRICING

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

attracting customsers. It kills loyalty, mangles margins, and encourages defections.

But it is the Unique Selling Price the only road to success in the intensely competitive

automobiles business?

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

believe so.

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

in the Product-Price-Promotion-Place marketing-mix.

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

price. According to the Research Analyst, Morgan Stanley, Price is the most

important P in this market because it is pyramidal in structure, with a huge base and

a narrow apex.

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

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

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

car. Third is the price of maintenance, which includes the cost of fuel, service, and

spare parts. And the fourth is the price of disposal, or the re-sale value of the car. The

typical Indian car-buyer is obsessed with post-purchase pricing. Which is, in effect,

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the cost of maintenance and the possible re-sale value. And obviously, the lower the

selling price of a second hand model, the less is the purchasers incentive to opt for it.

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

Santro, Hyundai Motors has launched an enhanced version with product fearures like

power steering, and product-plus features like better service and customer-care.

Hyundai arrived at the pricing strategy after a careful analysis. It does not believe in

knee-jerk reactions to rival moves. It also believes that when features are the USP,

second P Marketing cannot help reinforce that position. Strategic price marketing is a

corporate weapon that must be applied in the context of an entire portfolio of cars.

Attempting to sell the lowest priced car in every segment will not enable a company

to survive.

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

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

the likelihood of actually buying a car instead of, say, a two-wheeler. So, even a drop

of Rs.1000 in the small cars segment could expand its size.

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

Only if all other things are perceived to be equal between competing brands will price

be a decider. Once incomes start rising again, there will emerge increasing numbers of

upgrades as well as first-time buyers who will not necessarily start at the lowest price-

level. Thus, price will become less important. Applied as a brand-level strategy, price

may help the auto-marketers win over only the entry-level customer.

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

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

buyer to spend more. As a corporate strategy, leading the charge through price may

have a better pay-off. A low priced product will enable new entrants to gain entry

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into the consumers garage. The threat, however, is that of a dangerous dilution of

image.

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

company that seeks life-long customers, who progressively move up its product

ladder, cannot rely on price alone for success.

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DATA ANALYSIS

Sample size 60

Respondents :

Owners of Santro 14

Owners of Zen -- 14

Owners of Indica 14

Owners of 800 9

Owners of other cars 9

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Most of the respondents are in an income bracket of Rs.20001 to Rs.25000

and above Rs.25000. This indicates that most of the car owners belong to

either upper of upper middle class segment.

Performance of a car clearly outweighs its style and cost on the consumers

list of priorities to buy a car. Performance be it engine make up, fuel

eff iciency in city conditions, smoothness, pick up, derivabil ity, is

consumers first preference in their look out on attributes in making a

decisions for buying a car. Very few consumers surveyed gave style and

cost as their priorities to buy a car. A mere 25% of respondents gave style

and 30% gave cost as their reasons to buy a car. 85% of respondents i.e. 51

out of 60 respondents gave performance of a car as a factor for making a

purchase decision.

Out of a total of 60 respondents surveyed, 30 respondents gave performance,

7 performance and style, 11 performance and cost, 2 style, cost and

performance, 4 gave style and 4 gave cost as the reasons for purchasing their

car.

When the consumers were asked to rank the factors, they consider to be

important in buying a car, ranking the factors from 1 to 7 where 1 is the

highest preference rank 7, the lowest preference rank, performance of the

car was ranked the highest on the preference scale. Performance, on an

average of 60 respondents was ranked 1.48 showing that the consumers

sought performance in a car as the first important factor in making a

purchase .

The car owners as the second most important factors ranking them 2.9 and

2.7 respectively considered the cost and low maintenance of a car.

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After sales service and brand name were the third and fourth preferences of

the respondents with 3.4 and 3.86 as their respective rankings. Safety was

ranked 4.35 on the preference scale and credit facility stood at the car

owners lowest preference with a rank of 6.43.

Given the city conditions, the consumers needed a very good overall

performance of cars , small cars taking less space has no parking problems,

easy derivability in heavy traffic conditions, easy gear shifts and good fuel

efficiency. The small car owners being mostly the professional class or the

upper middle class were very cost conscious and due to their busy life styles

preferred low maintenance in their cars .

The small car consumers are high search information seekers, most of them

using at least 3 sources of seeking the information. They believe that

extensive search is necessary to make a good buy. Having owned fewest

carts previously, they had very less information about the cars.

The survey showed that a highest number of consumers sought friends as a

source of information. Even as a majority of them went for magazines and

other car owners as a source of seeking information, a good number of

consumers went to dealers for getting the information. Television as a

source of information was used by less number of consumers and a very few

of them went to mechanics in search of information.

Most of these small car buyers being first time purchasers usually go for

friends, automobile magazines or other car owners to get information about

the various products and brands in the market to know the most favourable

brand or products and la ter they seek further information from dealers and

other sources once they are through their choice process and have decided

upon a particular brand or brands to buy.

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Most of the small car consumers are happy with their purchases. A probe

into respondents satisfaction level, ranking from 1 to 5 where 1 was full

satisfaction and 5 full dissatisfaction with theirs cars, gave 1.79 as an

average figure of satisfaction level.

Out of a total of 60 respondents, 26 ranked their satisfaction level as 1, 20

ranked 2, 9 ranked 3, 2 ranked 4 and only one respondent showed null

satisfaction. The main reasons which were quoted for their satisfaction were

driving comfort, good fuel efficiency, small is cute, easy parking, less

maintenance, good pick-up and a perfect car for a small family.

Again when the consumers were asked about their preference for any other

car, the highest number of respondents chose small cars, that is a 20 out of

56 respondents preferred small cars, midsize cars, 16 large size cars, 5 went

for jeep models and 8 consumers luxury cars like BMW, Mercedes, Ferrari,

etc. The main reason again given for their preference was comfort of

driving, performance, good looks and fuel efficiency.

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FACTORS IMPORTANT IN A CAR PURCHASE

7%

7%

50%

12%

18%

3%3%

COST

STYLE

PERFORMANCE

PERFORMANCE AND

STYLE

PERFORMANCE AND

COST

STYLE AND COST

STYLE COST AND

PERFOMANCE

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FACTORS IMPORTANT IN A CAR PURCHASE

0

10

20

30

40

50

60

70

80

90

1

ATTRIBUTES

PERCENTAGE

OFRESPONDENTS

PERFORMANCE

STYLE

COST

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RESPONDENTS RANKING OF ATTRIBUTES

PREFERENCE RANK PREFERENCE POINTS

1 140

2 120

3 100

4 80

5 60

6 40

7 20

Attributes Preference Rank Preference Points

Performance 1.5 130

Cost 2.9 102

Low Maintenance 2.7 106

After Sales Service 3.4 92

Brand Name 3.8 84

Safety 4.4 72

Credit Facility 6.4 32

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0 20 40 60 80 100 120 140

PERFORMANCE

COST

LOW MAINTENANCE

AFTER SALES SERVICE

BRAND NAME

SAFETY

CREDIT FACILITY

PREFERENCE

POINT

ATTRIBUTES

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SOURCES OF INFORMATION

0

5

10

15

20

25

30

35

40

1

SOURCE OF INFORMATION

NUMBER

OFRESPONDENTS

TELEVISION

MAGAZINE

FRIENDS

DEALERS

MECHANIC

OTHER CAR OWNERS

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0

10

20

30

40

50

60

70

80

1

INFLUENCING FACTORS IN DECISION MAKING

FRIENDS

FAMILY

MEDIA

OTHERS

FINDINGS AND ANALYSIS

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EXTERNAL ANALYSIS

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

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

environment, its competitors and the kind of competition it faces.

Competition

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

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

processes, user-friendly and economical products providing maximum value to

customers, and other such advantages, all arise out of competition.

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

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

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

vehicle division, the Passenger Car division is the area, which is seeing a lot of

activity in the current period. And this activity is all set to intensify with the launch of

the all-new TATA Sedan in the later half of the current year.

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

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

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

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

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

1. Small Car segment (B segment)

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2. Entry-level Mid Size segment (lower C segment)

3. Premium Mid Size segment (upper C segment)

4. Luxury Segment (D segment)

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

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

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

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

named Magna. The Magna shall be launched some time during the later half of next

year in 2003. TELCO currently is tight-lipped about the Magna and has divulged no

details regarding the car but according to group Chairman Mr. Ratan Tata, the Magna

shall be TELCOs answer to the Luxury Segment in India, which shall force the

competitors to revamp their strategies. And if the success of the Indica and the Safari

is to be believed, these words are sure to see light in the near future.

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

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

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

because of its quality and value delivered to the customer, truly fulfilling its promise

ofMore Car Per Car. TELCO, for the year 2002 had promised a product of great

pedigree, and the Indica V2 has just delivered that.

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

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

CORE COMPETENCIES

The Core Competencies of is there capability to make the Indica globally competitivein terms of cost. If Telco can find markets to sell 20,000 or 30,000 more Indicas, then

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they are looking at a very interesting set of numbers. If you add variants to those

numbers, youre looking at very reasonable numbers. Then you are in the niche. And

if you focus on that niche, invest in technologies required to give that one platform all

the variants and changes that you need, you survive.

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

in the Indian market and the company also possesses an unmatched ability to create

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

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

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

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

of Tata Motors , the niche may be the lower end car. The unfortunate part is that the lower

end market does not offer much by way of margins. But you need volumes and that kind of

scale and production processes that will give you those advantages. That is what Telco has to

look for and there they can even stand on their own if they find markets beyond the shores of

India. All that would come from having a niche product that is globally competitive

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

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

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

more focussed approach from the company towards quality and developing R&D and

experience in such project. Though its efforts towards Total Quality Management

seem to be helping the company.

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KEY FACTORS FOR SUCCESS

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

industry. The resources which are most vital for success in an industry are

called Key factors for success in an industry, the key factors for the industries

that Telco Operates in are:

1. High Quality Management

The LCV & M&HCV segment are highly complicated sectors, the management

not only have to manage all the resources available to the company properly, but

also have to be highly professional in their approach.

2. R&D and Knowledge

The technological changes as per WTO specifications and Euro Emission norms

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

been able to achieve all this in all its products and services.

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Human Resource

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

company to have High quality human resources

3. High and Standard Quality

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

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

4. Managing Cost

It is becoming more and more important for companies to achieve competitive

costs, the company is planning to continue with is cost reduction program. Most

of this would come from reducing fixed costs, operational efficiency an

outsourcing.

RESOURCES

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

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

capabilities are shared by the entire organization.

Some of the major resources that Telco has are

1. Human Resource

Telco possesses a great Human Resource base, its in all its business are a people

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

supply of HR, the values and efforts to ensure good Human Resources are shared

by the HR departments of each SBU.

2. Management

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

most professionally managed companies in India. The management of each SBU

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

3. R&D and Know-how

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

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

sophistication, which is very important in a knowledge-based industry . It has a

great R&D base, it invests a high amount every year (compared to the average

spent in the industry) on it for each department. The R&D departments of each

SBU have helped each other, for E.g. the revival of Indica is a success story.

4. High Quality

The company has extremely high standards in quality, almost all Strategic

Business Units are technology leaders in their field of operation.

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

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

hampers its progress.

VALUE CHAIN

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

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

vehicles have been the leaders in their own segment.

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

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

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

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

over the competition.

SYNERGY

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

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

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

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

be highly successful.

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PEST ANALYSIS- IDENTIFICATION OF

CHANGE DRIVERS

The PEST analysis for Tata Motors and Locomotive Company Ltd. (TELCO):

Political

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

recently it has settled down somewhat. As we know that Telco is the leader in

the commercial vehicle segment with 54% market share in Light Commercial

Vehicle (LCV) and 63% market share in Medium & Heavy Commercial (M &

HCV). Telco has a market share of 221% in utility vehicle segment. The

company has also garnered a 9% market share in the passenger car industry in

a very short span. The decision of the government to ban diesel buses and give

licenses to CNG buses has been a boon for TELCO as it is the major supplierof buses to all State Transport Corporations. Though only few state

governments are stern in implementing this order but TELCO will remain one

of the major suppliers of buses and hence can plan expansion.

Economic

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

an increase in economic activity broadly represented by growth in GDP helps in

increasing the freight availability. The GOI policy towards depreciation norms and

excise duty etc will have a bearing demand for MUVs and CVs. The implementation

of infrastructure projects will have a positive impact on demand of CVs and MUVs

as they are extensively used in transportation of material and people requirement of

projects. The freight rates determine the revenue component of fleet owners. The

improvement in freight rates consistently over this period will add to business of

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TELCO. Though oil prices have gone up but the shift in the oil sector companies

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

performance.

Socio-Cultural

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

environment. The sales during festival times perk up because the environment all

round is joyous and upbeat. Another effect is because of is that of good monsoons

which translates into a higher rural demand especially for the MUVs. Thus socio-

cultural factors do not affect the Engineering business too much, it does have an

impact indirectly. Though the metropolitans have become over-crowded and but

Telcos Indica V2 sales have picked up.

Technological

The Company vigorously pursued a programme of product innovation in commercial

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

already added to its range Euro 1 Compliant Cummins Engine Powered Vehicle with

a view to regaining and improving its market share. Major innovation in the current

year include a 25 Tonnes Truck and a30 Tonne Tractor Trailer; Fuel Efficient

M&HCV Truck and Busses Powered by Companys Euro 1 Compliant 697 Engines; a

Cost Effective 11 Tonnes Vehicle in both bus and truck version to meet the growing

demand in this segment; and a Fur Tonnes LCV fitted with an internally developed

Turbo charged Engine.

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STRATEGY IMPLEMENTATION

SEVEN S FRAMEWORK

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

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

inter-related and inter-dependent.

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

be brought together.

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

framework. To implement the framework the company should consider the following

aspects-

STRATEGY

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

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

Business, Operational and International Levels. These strategies have to be aligned

with the following elements.

STRUCTURE

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

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

some basic foundation building. The group developed a common corporate identity

for all group companies leveraging the strengths of the Tata brand. The group

companies were required to sign an agreement to use the Tata brand, which entailed

the compliance with the quality standards and business ethics that we codified at that

time. The company developed the Tata Business Excellence Model to measure the

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quality and corporate performance of our companies, and required them to achieve the

specified level of performance in order to continue the Tata Brand.

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

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

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

reviews the operations and the budget of the company.

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

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

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

for our company in terms of bottom-line and top-line growth based on historical

growth trends, as industry leadership in terms of being number one, two, or three.

Ultimately, the GEO takes a view on the figment of companies within our group.

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

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

divisions in Pune and Jamshedpur. The company is at present on the look out for

suitable alliances with international majors.

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

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

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SYSTEMS

Systems are the procedures that make the organization follow for everything from

top-level decision making to board meetings, from employee training and hiring to

transportation. All the companys activities should have a particular system particular

to the company.

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

central HR and central financial coordination with a view to standardize the MIS

systems of Telco for financial reporting to the holding company. The net result of all

these initiatives has been that Telco now operates more as a group than what they did

in the past, but what this really meant was that each company had the stamp of its own

CEO and went its own way, and if you remove the name o the enterprise you could be

looking at different companies with no connection to the Tatas.

STYLE

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

company operates its business.

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

which constituted the formal interface between the group and the holding company.

The BRCS reviews the strategic direction of each company, and the executivecommittee of each board reviews the operations and the budget of the company.

STAFF

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

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

recruitment from the top institutes of the country. It then gives them the proper

training and development, giving them the opportunity to grow and improve.

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

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

SKILLS

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

success, but its not just enough to have skills, an organization must have the right

combination of skills that complement each other.

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

success. It trains its employees, through a set of carefully designed programs, to give

them the desired skills. Plus it has also entered into a number of alliances with a

number of companies, which help it to gain the necessary experience and which can

also help it improve its R&D.

SUPER-ORDINATE GOALS

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

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

These are Tatas Diktat:

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

benchmarks to compete.

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

is on knowledge based industries.

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

services that not just differentiate but fetch a premium.

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

three in their industries.

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

get opportunities across functions and group companies.

LEADERSHIP

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

strive willingly and enthusiastically towards achievement of the groups mission.

Leadership is something that greatly affects any companys philosophy, culture, and

in-turn the overall health of the company.

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

Tata has been a hallmark of leadership.

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

Bombay House, the group headquarters is in fact the spark that the group is looking

for to rocket itself into a new orbit of growth. In 1991, when a shy and reclusive

Ratan Tata took over the

marketng strategy-tata motors ruchika edited

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