INTRODUCTION

As India celebrates its 50 years of independence, the passenger car industry will celebrated a centenary of its existence in India in 1998. Despite this head start, the industry has never quite matched up to the performance of its counterparts in other parts of the world. The allpervasive atmosphere created by the government's license raj was primarily responsible for this situation. The various layers of Acts sheltered the industry from external competition and smothered the development of the Indian automobile industry. Moreover, the industry was considered low priority as cars were considered to be an "unaffordable luxury." With the liberalization of the Indian economy, the passenger car industry was finally deregulated in 1993 and many companies, both Indian and foreign, announced their plans to enter the market. The last four years have seen companies like Daewoo, Ford, GM, and Mercedes-Benz launches their cars in India. The passenger car industry notched impressive growth rates between 26-30% during the period FY 94-96 even though the economic slowdown has adversely affected the industry in FY 98 with the growth rate tricking down to 1%. Nonetheless, times have changed significantly - the days of the customer chasing the dealer to purchase poor quality cars backed by inefficient service are history. Today, the customer dictates the terms. The segmentation of the passenger car market in India is vastly different from that in the developed nations. In India, the economy segment accounts for the largest share of the cars sold, as compared to mid-range segment in the mature markets. The economy and the premium segment face the lowest competitive threats, while the premium segment will witness intense competition due to lower volumes.

PROFILE OF THE ORGANIZATION

Tata motors one of India's largest private sector companies with a turnover of over Rs 80 billions, is the country's leading commercial vehicle manufacturer and has significant presence in the multi-utility and passenger car segments. Tata motors was established on September 1, 1945, originally for the manufacture of Steam Locomotives at Jamshedpur. By 1954, the company had diversified into the manufacture of commercial vehicles in collaboration with Daimler Benz, Germany. By the time their collaboration ended in 1969, Tata motors had become an independent producer of Medium Commercial Vehicles with a great degree of indigenization. It had also developed the capability of designing, testing and manufacturing such vehicles. The widely successful Tata Indica, a Euro 2 compliant vehicle, is the countrys first indigenously designed, developed and manufactured passenger car. Tata Motors followed that up with the Tata Indigo, a sedan that was launched in December 2002. The company also makes several other passengers vehicles, including the Safari, Sumo and Sierra. The companys products have received wide acceptance not only in India but also in the Middle East, Asia, Africa, Australia, Latin America and Europe. Areas of business The company manufactures medium, heavy and light commercial vehicles, multi-utility vehicles and passenger cars. In the year ending March 2001, the companys revenues from its four manufacturing plants at three locations in India were Rs. 81.64 billion (US $ 1.73 billion). In 2000, they were Rs. 89.61 billion. (US $ 1.9 billion) {The average exchange rate has been taken as Rs 47.0 to one US dollar.}

In the year ended 31 March 2001, the companys total exports were worth about Rs 7.22 billion (US $ 153.6 million), against about Rs 6.09 billion (US $ 129.5 million) in the previous year. Locations The companys manufacturing plants in India are at Jamshedpur, Pimpri and Chinchwad near Pune in Maharashtra, and Lucknow in Uttar Pradesh. Land has been acquired at Dharwad (Karnataka) to build a fifth plant. Collaborations The company has technical tie-ups with: The Institute of Development in Automotive Engineering (IDEA), S.P.A., Italy, for assistance in small car body design and styling; and Le Moteur Moderne, France, for the development of diesel and petrol engines for passenger cars. Subsidiaries Tata Construction Equipment Company Ltd. (TELCON): Its principal business is manufacture and sale of construction, material handling and earthmoving equipment. Tata Technologies Ltd.: It oversees the IT requirements of Tata Motors and provides services for SAP implementation, CAD/CAM-based design, and e-commerce facilities to customers in India and abroad. Sheba Properties Ltd: It is an investment and finance company and a wholly-owned subsidiary of Tata Motors since its inception. It is registered with RBI as a Non Banking Finance company.

Telco Dadajee Dhakjee Ltd. (TDDL): It is an investment and finance company and proposes to undertake activities pertaining to the sales and service of Tata Motorss vehicles and spare parts. Minicar (India) Ltd.: Formerly known as Mazda Industrial Chemicals Ltd., this company was incorporated on January 18, 1972 and is currently engaged in the business of automobile sales and services. HV Transmissions Ltd.: It was incorporated on March 13, 2000 with the objective of acquiring the Heavy-Duty Gear Box Division of Tata Motors at Jamshedpur as a going concern. It supplies transmissions and their parts to Tata Motors against purchase orders raised by Tata Motors on HVTL. HV Axles Ltd.: It was incorporated on March 13, 2000 with the objective of acquiring the Heavy-Duty Axle Division of Tata Motors at Jamshedpur as a going concern. It supplies axles and their parts to Tata Motors against purchase orders raised by Tata Motors on HVAL. Telco Automation Ltd.: It was incorporated on March 13, 2000 with the objective of acquiring the Machine Tool and Growth Divisions of Tata Motors as a going concern. As and when required, Tata Motors sources factory automation equipment from TAL. Tata Technologies, USA: It was incorporated on August22, 1994 and became a wholly owned subsidiary of Tata Technologies Limited on December 22, 2000. The company is engaged in the business of computer consultancy and related services. Strategic alliances Tata Motors has several joint ventures and alliances. These include: Tata Cummins Ltd., a joint-venture with Cummins Engine Company Inc., USA; makes fuel-efficient, low emission, environment-friendly diesel engines;

Tata Holset Ltd., a joint-venture with Holset Engineering Company, UK, makes turbochargers for diesel engines manufactured by Tata Cummins Ltd. and other OEMs; Concorde Motors Ltd., a joint venture with Jardine International Motors (Mauritius) for dealerships of passenger vehicles. Concorde has dealerships for Tata Motors passenger vehicles in Delhi, Mumbai, Bangalore, Ludhiana, Hyderabad, Chennai and Lucknow. Tata Precision Industries Pvt. Ltd., Singapore, for the manufacture and sale of high precision toolings as well as electronic and plastic components for the computer industry; Tata Motors Services Ltd., Singapore, for the sale of spare parts for Tata vehicles; and Nita Company Ltd., Bangladesh, for the assembly and sale of Tata commercial vehicles.

.TELCO: Currently the largest automobile company in India, Tata Motors ranks among the top 10 commercial vehicle producers in the world. The transition of Tata Motors from being a predominantly commercial vehicle manufacturer to a complete automobile company began in the early 1990's with the launch of the first Sports Utility vehicle from Tata- the Sierra and later the Tata Estate. The insights gained into customer needs in these markets led to the development of another world-class Sports Utility Vehicle, the Tata Safari, launched in 1998. Soon after launching the Safari, Tata Motors made an aggressive foray into the mainline passenger car market with its small car, the Tata Indica. The Indica fulfills the Tata Group Chairman Ratan N Tata's vision of developing and manufacturing a truly Indian car that would use modern technology and contemporary styling of the small car genre. It went on to

set a benchmark in terms of its value proposition in terms of best value for money in its segment and internal spaciousness. The overwhelming customer response that the Indica generated at its launch in early 1999 has translated into its capturing more than 17% of the premium small car segment, and 8 % of the entire passenger car market in India within a year. Clearly identifying the core areas as R&D, manufacture of critical components and the final vehicle assembly, the company continues to be open to global alliances to effectively enhance its competitiveness in the fast globalizing Indian markets. Setting standards of corporate governance, Tata Motors focuses on Complete Customer Satisfaction. With benchmarking systems to sell world-class products and services, Tata Motors continues to uphold the trust of its various stakeholders, viz. shareholders, customers, employees and business associate. Business Sector The Tata Group runs businesses in seven key industrial sectors, namely, Materials, Energy, Chemicals, Consumer Products, Engineering, Communications and Information Systems, and Services. TELCO is Tatas flagship company in the Engineering sector. Business Models TELCO is primarily a Business-to-Consumer Company (B2C), serving various needs of a number of its customers. It also practices the Business-to-Business (B2B) Model, though at a much lower scale. Business TELCO is into the business of manufacturing and selling medium, heavy and light commercial vehicles, multi utility vehicles and passenger cars.

Its major product line can be basically classified into three broad categories. There are various sub-brands and products in these categories: Passenger Cars Utility Vehicles Commercial Vehicles TELCO currently has three products in its Passenger Car division namely, Tata Indica Tata Indigo Tata Safari It is in the process of coming out with another member in the passenger car family, the allnew Indica Sedan, set out to storm the Indian Mid-Size Passenger car segment, which would be launched in the last quarter of 2002. Confirming to International standards all these vehicles are available with various features such as petrol & diesel versions, 2-wheel and 4-wheel drives etc. TELCO currently has three products in its Multi-Utility vehicle division namely, Tata Sumo Telco Sport Telcoline Pickup Vans All these vehicles come only in diesel-engine versions and are quite popular on the Indian roads, especially on the highways and in the rural areas. They are known for their build quality, reliability, ruggedness, and the various uses that they can be put at. They are used as people carriers, as emergency vans, goods carriers, pick-up vehicles and so many more uses.

The utility pick-up vans of Tata International are made for all kind of terrains and are facilitated with features like 2 & 4 wheel drive, single & crew cabs etc. TELCO is the undisputed leader as regards the Commercial Vehicle segment. It has a large number of products in this segments classified as various types namely, Buses Small Buses Big Buses (4 models) (4 models)

Trucks Light Trucks (5 models)

Medium/Heavy Trucks (9 models) Tippers Tractors (3 models) (3 models)

STRATEGIC GROUP MAPS INTERNAL ANALYSIS The basic premise is the Customer. So whenever a new product development plan comes into picture, the idea is to look for ways to offer the customer the best value for his money. And the way we define value, the word covers all the possible and not so possible ways to customer satisfaction.

STRATEGIC INTENT Leadership with Trust Purpose being a part of the Tata Group, TELCOs corporate purpose is to improve the quality of life of the communities that it serves, through leadership in sectors of national economic significance, to which the group brings a unique set of capabilities. This requires aggressive growth in its focused areas of business. The Tata Groups heritage of returning to society what it earns evokes trust among consumers, employees, shareholders and the community. Formalizing the high standards of behavior expected from employees and companies continuously enriches this heritage. The Tata name is a unique asset representing leadership with trust. Leveraging this asset to enhance group synergy and becoming globally competitive is the route to its sustained growth and long-term success. 5 Core Values

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 dayto-day work and in the quality of the goods and services we provide. Unity - we must work cohesively with our colleagues across the group and with our customers and partners around the world, building strong relationships based on tolerance, understanding and mutual cooperation. Responsibility - we must continue to be responsible, sensitive to the countries, communities and environments in which we work, always ensuring that what comes from the people goes back to the people many times over.

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Definition of Value at TELCO Tata Motors constantly looks for ways to offer customers the best value for money. And our definition of value covers all facets of customer satisfaction. Be it in the area of product safety, reliability, utility or aesthetics. We believe in creating lasting relationships with our customers and business partners. A Chronology of Important Milestones of the Company TABLE: 3.1

1946

Tata Engineering undertook manufacture of 5000 'KC' broad gauge open wagons for the Indian Railway. The Managing Agency Tata Sons was transferred to Tata Industries on July 1, 1946. The Managing Agency system continued till it was abolished by an

1947

act of Parliament in 1970. 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) Tata Sons purchased the shops from the Government of India on June 1,

1945

1945 for Rs. 25.39 lakhs with the aim of immediately manufacturing steam locomotive boilers. Later it planned to manufacture complete locomotives and other engineering products. Tata Motors was established on September 1.

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1950 1954

Collaboration signed with M/s Krauss-Maffei, W. Germany for manufacture of steam locomotives Collaboration with M/s Daimler -Benz AG, W.Germany, for the manufacture of medium commercial vehicles at Jamshedpur. First commercial vehicle

1956 1959 1960 1961

produced within six months of agreement. Steel foundry set up in collaboration with Usines Emile Henricot of Court St. Etienne, Belgium. Research and Development Center set up at Jamshedpur. The company's name, which was Tata Locomotive & Engineering Company Ltd., was changed to Tata Motors & Locomotive Company Ltd. Collaboration with M/s Pawling & Harnischfeger (P&H), U.S.A. for manufacture of cable type excavators and cranes. First crane produced in the same year. Commencement of exports - first truck exported to Ceylon, now, Sri Lanka.

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

1966 Acquisition of Investa Machine Tool Co. Setting up of Machine Tools Division at Pune. Engineering Research Centre set up at Pune to cater to automobile research and development.

1967

Press Tool Division set up at Pune. Vehicle manufacture facilities steadily built up at Pune

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1968 1969 1970 1971 1977 1983 1984

Collaboration with M/s Hueller Hille Gmbh, W. Germany, for the manufacture of unit construction special purpose machines. The "T" replaces the three-pointed Mercedes Star. Last locomotive produced. (Cumulative production 1155 nos.)

DI engines introduced. First commercial vehicle produced at Pune. HCVs, including articulated vehicles, introduced. 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.

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TABLE: 3.2 1986-90 1986 First Light Commercial Vehicle - TATA 407 produced. This was a completely indigenous design with minimal import content. Also met fuel 1987 efficiency norms specified by the government Second model of completely indigenously designed LCV - TATA 608 produced. LPT 2416 a multi-axled vehicle introduced 1989 Third model of LCV Tatamobile 206 produced Collaboration with M/s Kloth-Senking Metalligessari, Gmbh, W.Germany, for know-how of manufacturing aluminum castings.Collaboration with Hitachi, Japan, for manufacture of a new generation EX series hydraulic excavator. 1990 First EX model hydraulic excavator produced. Indigenously designed front-end wheel loader - TWL 3036 introduced.

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TABLE: 3.3 1991-94 1991 Introduction of indigenously designed passenger cars - Tata Sierra and Tata Estate. TAC 20 crane produced. One-millionth vehicle rolled out. 1992 Production of MCV's commenced at Lucknow. LPT 2213 - a multi-axled vehicle launched. Collaboration with Nachi-Fujikoshi Corp., Japan, for manufacture of robots. 1993 Joint Venture Agreement signed with Cummins Engine Co. Inc. to manufacture high horsepower and emission-friendly diesel engines for medium and heavy commercial vehicles. Tata Cummins Private Limited incorporated in Jamshedpur, Bihar, on 1994 0ctober 20, 1993. Tata Sumo - a multi-utility vehicle launched. LPT 709 - a full forward control, light commercial vehicle launched. Joint Venture Agreement signed with M/s Daimler - Benz / Mercedes - Benz for manufacture of Mercedes Benz passenger cars in India. Joint Venture Agreement signed with Tata Holset Ltd., U.K. for manufacturing turbochargers to be used on Cummins engines. Mercedes-Benz (India) Ltd. incorporated in Pune, Maharashtra, on November 22, 1994.

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Tata Holed Pvt. Ltd. incorporated in Dewas, Madhya Pradesh, on December 20, 1994. Collaboration with Shads Maschinenbau GmbH, for manufacturing CNC cylindrical grinding machines. The Company was restructured into two Strategic Business Units Automobile Business Unit (ABU), and Construction Equipment Business Unit (CEBU). TABLE: 3.4 1995 Collaboration with Hitachi, Japan, for the manufacture of mini excavator models EX 40 and EX 60. Production of robots in collaboration with Nachi-Fujikoshi Corp., Japan commenced. Mercedes Benz car E220 (W124) launched. Tata Cummins engine plant inaugurated 1996 First engine produced by Tata Cummins in January 1996. LPT 2516 vehicle fitted with Tata Cummins engine launched on March 4, 1996. Tata Sumo Deluxe launched. Tata Holset's turbo charger plant inaugurated on November 25, 1996. 688 acres of land at Dharwad (Karnataka) were allotted for Auto and CEBU Units, in Dec 1996.

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Concorde Motors Ltd., a Joint Venture was established between Tata Motors and Jardine International Motors (Mauritius) Ltd. 1997-98 TABLE: 3.5 1997 Industrial Entrepreneurs Memorandum was filed for taking up manufacture of special purpose vehicles and construction equipment at Dharwad in Jan 1997. Management Services Division of the Company was transferred to the wholly owned subsidiary of Tata Motors - Tata Technologies (I) Ltd, in Apr 1997. Tata Sierra Turbo launched. 100,000th Tata Sumo rolled out. The commercial vehicle, LPT 909 introduced. 1998 Tata Safari - India's first Sports Utility vehicle launched in Jan 1998. Concorde Motors Ltd., a Joint Venture between Tata Motors and Jardine International Motors (Mauritius) Ltd. was appointed as dealer for the Company's passenger cars in several cities across the country, in Feb 1998. Two millionth vehicles rolled out. Collaboration with Hitachi, Japan, for manufacture of Series V excavators to replace Series I & III machines, in Mar 1998.

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Indica, India's first fully indigenous car, launched in Dec 1998. Telco Construction Equipment Company Ltd. (TELCON) came into being as a subsidiary of Tata Motors, in Dec 1998.

TABEL: 3.6 1999 An overwhelming 115,000 bookings for Indica were made against full payment within a week, in Jan 1999. New TATA Logo unveiled.The company would hereafter be called " Tata Motors ". Commercial production of Indica begins and first car is sold. Construction Equipment Business Unit is transferred to TELCON. In Oct 1999, the Company won the National award for R&D Efforts in Development of Indigenous Technology in the Mechanical Engineering Industries Sector instituted by Department of Scientific and Industrial Research, Ministry of Science and Technology for the year 1999.

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MANUFACTURING UNITS OF TELCO

Tata Motors owes its leading position in the Indian automobile industry to its strong focus on indigenization. This focus has driven the company to set up world-class manufacturing units with state-of-the-art technology. Every stage of product evolution - design, development, manufacturing, assembly and quality control, is carried out meticulously. Its manufacturing plants are situated at Jamshedpur in the East, Pune in the West and Lucknow in the North. Jamshedpur: This was the first unit of the company established in 1945 and is spread over a area of 822 acres. It consists of 3 divisions - Truck, Engine (including the Gear Box division) and Axle. The divestments in March 2000 hived off the Axle and Engine plants into independent subsidiaries. The Truck Division boasts of two assembly lines. The main assembly line, measuring 180 metres in length, has 20 stations with a vehicle rolling out every 8 minutes while the other line is dedicated to Special Purpose Vehicles (SPVs). State-of-the-art facilities like a Centralized Paint and Press Shop with a set-up of a 5000 tonns Siempelkamp press line and a cut-to-length line for strip preparation purchased from M/s. Kohler of Germany makes it a fairly advanced production outfit. This is supported by a fully equipped Foundry which supplies high-grade SG Iron castings for automobile components and excavators and is rated as one of the cleaner, better and highly automated foundries in the world. The Foundry has a sophisticated Kunkel Wagner high pressure moulding line, which has a rated production capacity of 90 pairs of moulds every hour. The Foundry has its own melting shop, core shop and sand plant. Other advanced facilities include Channel Furnaces, Computerized Testing Equipment etc. In 1993, the

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Foundry was ISO 9002 certified by the Bureau Veritas Quality International and later followed it up with the more stringent QS 9000 certification from the BVQI in the year 2000. The unit is also equipped with a semi-automated forging line, with 40,000 mkg Beche hammer and state-of-the art presses from Kurimoto of Japan and is one of the most modern forging set-ups in the country. It produces critical forging like crankshafts, front axle beams and steering parts for the automobile plant. The new forging line, installed on April 20, 1984, has the capability to forge front axle beams at 90 sec per piece and crankshafts at 120 sec per piece. Mechanical presses help produce a variety of heavy forging. The sophisticated FIDIA Digit 165 CC graphite milling machine links shop floor machines to the design workstation. The Forge has been certified as ISO 9002 and QS 9000 by the BVQI. Pune: The Pune unit is spread over 2 geographical regions Pimpri and Chinchwad and has a combined area of around 510 acres. It was established in 1966 and has a Production Engineering Division, which has one of the most versatile tools making facilities in the Indian sub-continent. It houses a Vehicle manufacturing complex which is one of the most integrated automotive manufacturing centers in the country producing a large variety of individual items and aggregates. It is engaged in the design and manufacture of sophisticated press tools, jigs, fixtures, gauges, metal pattern and special tools, as well as models for the development of new ranges of automobile products. Its capabilities have enabled Tata Motors to introduce new products and improve existing ones without resorting to imports of dies or fixtures. Over the years, this division has developed expertise in design and manufacture of automated dies, fixtures and welding equipment. Its large design group is fully conversant with state-ofthe-art CAD facilities and manufacturing facilities comprising of light and heavy CNC

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machine shops, jigs boring room, plastic template shop, wood pattern and model pattern shop, five axis precision machine tools and laser control machines. To cope with such a diverse range, four assembly lines have been established, one each for MCVs and HCVs, LCVs, multi-utility vehicles and one for Passenger Cars (Indica). The Passenger Car Division in 'K' block executes the entire process of car manufacture over five shops - the engine shop, the transmission shop, press and body shops, paint shop and the trim and final assembly shop. The shops are fully automated ensuring that there is minimal chance for error in the manufacturing processes. After the car is completely assembled, it goes through several checks like wheel alignment, side slip test, brake test, shower test, and a short test run before it is ready for dispatch. All systems such as materials management, maintenance and other activities are computerized, enabling smooth operations and minimum inventory needs. The Electronics Division is engaged in the production of a wide variety of Machine Tool Controllers, PLCs, and Test rig instrumentation, Servomotors, Proximity Switches. In addition, it has developed a number of components such as flashers, horns, timers that are used in Tata Motors vehicles. Industry experts rate the fully automated Foundry at Chinchwad among the best, worldwide. The Iron Foundry produces 16,000 tonnes of high precision castings per year with the help of 450 employees. These include Cylinder Blocks, Cylinder Heads, Gear Box Housing, etc. To dispense with the need for outsourcing, an Aluminium Foundry with an annual capacity of 700 tonnes has also been established. Lucknow: Lucknow Plant is the latest in Tata Motors's manufacturing facilities. Established in 1991 and covering an area of 600 acres, it was primarily started to assemble Medium Commercial

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Vehicles (MCVs) to meet the demand in the Northern Indian market. However, in 1995, the unit started manufacturing bus chassis of Light Commercial Vehicles (LCVs) and SUMO's. The unit is equipped with facilities to manufacture spare parts. Subsequently, G-16 and G-18 Gear Parts were added in 1998. The plant started to assemble G -16 GearBoxes in 2000 to meet the in-house requirement for SUMO vehicles.

PASSENGER CARS SEGMENTATION 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 Uno, Zen, Ford Ikon, Fiat Palio Esteem, Opel Astra, Ford Escort, Mitsubishi Lancer, Hyundai Accent Opel Vectra, Rover Montego, Mercedes benz

Mid-range Premium Luxury TABLE: 3.8

350-450 450 - 1,000 > 1,000

Key Demand Drivers Traditionally, disposable income was perceived as the one critical factor that drove passenger car demand. However, household income is no longer the single most important factor in determining the demand for vehicles. Other critical factors are the mobility needs of people and the availability of cheap finance. The top three income groups - middle, upper middle,

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and high - have grown from 10% in 1986 to 17% of the population and covers over 52 million families. The number of high-income households is growing very rapidly, more so in the rural areas. These findings have revolutionary implications for the passenger car market. The development of the used car market will also play a major role, as the customers will be encouraged to trade in their old cars. The key to the growth of future markets is to make maintenance-free vehicles, to improve the road infrastructure, and to reformulate fuels and lubricants so as to reduce vehicle-operating costs. pricing In any business, nothing is more dangerous than using money as the magnet for attracting customsers. It kills loyalty, mangles margins, and encourages defections. But it is the Unique Selling Price the only road to success in the intensely competitive automobiles business? Those in the race for winning over the Rs. 7,500-crore small cars market seem to believe so. In the small car segment, the only P that, suddenly, seemed to matter was the second in the Product-Price-Promotion-Place marketing-mix. Evidently, features, technology, and service are secondary. And the only warhead is price. According to the Research Analyst, Morgan Stanley, Price is the most important P in this market because it is pyramidal in structure, with a huge base and a narrow apex. Everything else remaining constant, the purchase decision of the first-time buyer is influenced by the 4 factors: Price, Price, Price and Price. The first is the price of acquisition. The second is the price of finance, or the rate of interest on a loan to buy a car. Third is the price of maintenance, which includes the cost of fuel, service, and spare parts. And the fourth is the price of disposal, or the re-sale value of the car. The typical Indian car-buyer is obsessed with post-purchase pricing. Which is,in effect, the cost of maintenance and the

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possible re-sale value. And obviously, the lower the selling price of a second hand model, the less is the purchasers incentive to opt for it. However, not every company plays the price-card. Instead of cutting the price of Santro, Hyundai Motors has launched an enhanced version with product features like power steering, and product-plus features like better service and customer-care. Hyundai arrived at the pricing strategy after a careful analysis. It does not believe in knee-jerk reactions to rival moves. It also believes that when features are the USP, second P Marketing cannot help reinforce that position. Strategic price marketing is a corporate weapon that must be applied in the context of an entire portfolio of cars. Attempting to sell the lowest priced car in every segment will not enable a company to survive. Sure, the lower price will be an attraction to the first-time buyer who is, essentially, stretching his budget to buy personal transportation. The less the stretch, the more is the likelihood of actually buying a car instead of, say, a two-wheeler. So, even a drop of Rs.1000 in the small cars segment could expand its size. Go beyond the entry level and the price-value equation will kick in immediately. Only if all other things are perceived to be equal between competing brands will price be a decider. Once incomes start rising again, there will emerge increasing numbers of upgrades as well as first-time buyers who will not necessarily start at the lowest price-level. Thus, price will become less important. Applied as a brand-level strategy, price may help the auto-marketers win over only the entry-level customer. However, only the lowest priced player will milk this segment. The rest of the low-price aspirants will have to offer additional features as value to convince the budget-buyer to spend more. As a corporate strategy, leading the charge through price may have a better pay-off. A

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low priced product will enable new entrants to gain entry into the consumers garage. The threat, however, is that of a dangerous dilution of image. Thus price can be a selling proposition for only one segment of customers. But a company that seeks life-long customers, who progressively move up its product ladder, cannot rely on price alone for success. The main purpose of this section is to have an insight into TELCOs external environment. Here, we shall be briefly looking at the factors influencing its external environment, its competitors and the kind of competition it faces. Competition Competition leads to improvement on all fronts. If healthy, it brings the best out of an industry. Newer and better technology, innovative and much better products and processes, user-friendly and economical products providing maximum value to customers, and other such advantages, all arise out of competition. TELCO faces stiff competition in almost all its business segments but has emerged as the winner when it comes to market success. Out of its three business segments namely, the Passenger Car division, Utility vehicle division and the Commercial vehicle division, the Passenger Car division is the area, which is seeing a lot of activity in the current period. And this activity is all set to intensify with the launch of the all-new TATA Sedan in the later half of the current year. TELCO currently has two products in the passenger car segment- the Indica and the Safari. It faces direct competition from almost all the major automobile players in the passenger segment, namely Maruti Suzuki, Hyundai, Fiat, Daewoo and Toyota. S.I.A.M. (Society of Indian Automobile Manufacturers) has classified the Passenger Car segment in India into further sub segments on the basis of their length,

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Small Car segment

(B segment)

Entry-level Mid Size segment (lower C segment) Premium Mid Size segment Luxury Segment (upper C 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 of more 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.

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Core Competencies The Core Competencies of is there capability to make the Indica globally competitive in terms of cost. If Telco can find markets to sell 20,000 or 30,000 more Indicas, then they are looking at a very interesting set of numbers. If you add variants to those numbers, youre looking at very reasonable numbers. Then you are in the niche. And if you focus on that niche, invest in technologies required to give that one platform all the variants and changes that you need, you survive. Telco has a design and engineering capabilities that are unmatched by its competitors in the Indian market and the company also possesses an unmatched ability to create and integrate it. This gives it the capability to compete with firms in the world market. It also has a World-Class dealer base and alliances with these suppliers; this ensures the right Inputs for the company and also helps to manage the Just In Time systems. Smaller auto companies (globally) will have to look for market niches to operate. In the case of Tata Motors, the niche may be the lower end car. The unfortunate part is that the lower end market does not offer much by way of margins. But you need volumes and that kind of scale and production processes that will give you those advantages. That is what Telco has to look for and there they can even stand on their own if they find markets beyond the shores of India. All that would come from having a niche product that is globally competitive But there is still a long way to go before the company is able to make a mark in the world market and compete with the worlds leading companies in well-developed markets like Europe, The United States and Japan. For that to happen, it will take a more focused approach from the company towards quality and developing R&D and experience in such project .Though its efforts towards Total Quality Management seem to be helping the company.

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Key Factors For Success Having the right resources is very important for a company to succeed in any industry. The resources which are most vital for success in an industry are called Key factors for success in an industry, the key factors for the industries that Telco Operates in are: High Quality Management The LCV & M&HCV segment are highly complicated sectors; the management not only have to manage all the resources available to the company properly, but also have to be highly professional in their approach. R&D and Knowledge The technological changes as per WTO specifications and Euro Emission norms need to be followed for a company like Telco to sustain growth and Telco has been able to achieve all this in all its products and services. Human Resource Industries like Telco have a high human element, it is very important for a company to have High quality human resources High and Standard Quality For industries like Telco, which manufacture equipment's that serve the infrastructure industry, it is very important to have high standards in quality. Managing Cost It is becoming more and more important for companies to achieve competitive costs, the company is planning to continue with is cost reduction program. Most of this would come from reducing fixed costs, operational efficiency an outsourcing. Resources The resources of the company are similar for all the industries; many of the resources are common for all the industries. But the Core Values like management capabilities are shared by the entire organization. Some of the major resources that Telco has are

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Human Resource Telco possesses a great Human Resource base; its in all its business is people oriented operation. The company takes great care to ensure that it has a good supply of HR, the values and efforts to ensure the HR departments of each SBU share good Human Resources.

Management The management of the company has gained the reputation of being one of the most professionally managed companies in India. The management of each SBU has a strong work ethic with an aggressive approach to managing the company. R&D and Know-how The company is known for its high level of sophistication when it comes to technology. And it has great experience in projects with high levels of sophistication, which is very important in a knowledge-based industry. It has a great R&D base, it invests a high amount every year (compared to the average spent in the industry) on it for each department. The R&D departments of each SBU have helped each other, for E.g. the revival of Indica is a success story. High Quality The company has extremely high standards in quality; almost all Strategic Business Units are technology leaders in their field of operation. Thus it is clear that Telco has most of the resources that companies require to be successful in the industries it operates in. Cost is the only resource that sometimes hampers its progress. Value Chain A large number of Telco's operations are different activities on the value chain for E.g. LCV., Utility Vehicles, HCV or others are used in different sectors, but all the vehicles have been the leaders in their own segment. This aspect not only allows the company to it to deliver tailor made products for other divisions in the company, but also gives some divisions of the company a lot of business. And the company is able to achieve lower costs than its competitors by

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procuring facilities from other departments within the company, thus giving it an edge over the competition. Synergy The activities of the company give synergy to the company as a whole; this is due not only because of the value chain, but also because the R&D from one division helps in the others. For E.g. the R&D from the Engineering division helps the Production division. And in the future the company wants to have synergy in all its activities to be highly successful.

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Pest analsis Identification of change drivers

The PEST(Political, Economic, socio-cultural and Technological) analysis for TATA motors and Locomotive Company Ltd. (TELCO): Political The political environment has been highly unstable over the past few years, but recently it has settled down somewhat. As we know that Telco is the leader in the commercial vehicle segment with 54% market share in Light Commercial Vehicle (LCV) and 63% market share in Medium & Heavy Commercial (M & HCV). Telco has a market share of 221% in utility vehicle segment. The company has also garnered a 9% market share in the passenger car industry in a very short span. The decision of the government to ban diesel buses and give licenses to CNG buses has been a boon for TELCO as it is the major supplier of buses to all State Transport Corporations. Though only few state governments are stern in implementing this order but TELCO will remain one of the major suppliers of buses and hence can plan expansion. Economic The availability of freight depends on the economic activity in the country. Therefore an increase in economic activity broadly represented by growth in GDP helps in increasing the freight availability. The GOI policy towards depreciation norms and excise duty etc will have a bearing demand for MUVs and CVs. The implementation of infrastructure projects will have a positive impact on demand of CVs and MUVs as they are extensively used in transportation of material and people requirement of projects. The freight rates determine the revenue component of fleet owners. The improvement in freight rates consistently over this period will add to business of TELCO. Though oil prices have gone up but the shift in the oil

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sector companies towards a positive pricing strategy will not affect Telcos business plans & performance. Socio-Cultural In order to boost sales passenger car companies often look for a general upbeat environment. The sales during festival times perk up because the environment all round is joyous and upbeat. Another effect is because of is that of good monsoons which translates into a higher rural demand especially for the MUVs. Thus socio-cultural factors do not affect the Engineering business too much; it does have an impact indirectly. Though the metropolitans have become over-crowded and but Telcos Indica V2 sales have picked up. Technological The Company vigorously pursued a programme of product innovation in commercial vehicle with a view to regaining and improving its market share. The company had already added to its range Euro 1 Compliant Cummins Engine Powered Vehicle with a view to regaining and improving its market share. Major innovation in the current year include a 25 Tones Truck and a30 Tone Tractor Trailer; Fuel Efficient M&HCV Truck and Busses Powered by Companys Euro 1 Compliant 697 Engines; a Cost Effective 11 Tones Vehicle in both bus and truck version to meet the growing demand in this segment; and a Fur Tones LCV fitted with an internally developed Turbo charged Engine.

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STRATEGY IMPLEMENTATION SEVEN S FRAMEWORK The Boston Consultancy Group in the 1970s developed the Seven S Framework. It was designed to build a cohesive strategy, and in turn integrate the 7S, these 7S are inter-related and inter-dependent. For the success of an organization the Seven S cannot work in isolation, they have to be brought together. For the Strategies to work at Telco, it is important that the company employs the framework. To implement the framework the company should consider the following aspectsStrategy The strategies that the company needs to employ have been discussed in the previous section. The strategies differ on the various levels, i.e. different for Corporate, Business, Operational and International Levels. These strategies have to be aligned with the following elements. Structure When the company undertook the restructuring exercise, it was the first major restructuring the Tata group had undertaken. The first phase of restructuring required some basic foundation building. The group developed a common corporate identity for all group companies leveraging the strengths of the Tata brand. The group companies were required to sign an agreement to use the Tata brand, which entailed the compliance with the quality standards and business ethics that we codified at that time. The company developed the Tata Business Excellence Model to measure the quality and corporate performance of our companies, and required them to achieve the specified level of performance in order to continue the Tata Brand.

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The company instituted the business review committees (BRCS), which constituted the formal interface between the group and the holding company. The BRCS reviews the strategic direction of each company, and the executive committee of each board reviews the operations and the budget of the company. To oversee the entire restructuring exercise, the group created a central group, which they called the Group Executive Office (GEO). Its primary task was to look at the strategic direction of each of our companies, in the process of which it set some tasks for our company in terms of bottom-line and top-line growth based on historical growth trends, as industry leadership in terms of being number one, two, or three. Ultimately, the GEO takes a view on the figment of companies within our group. Telco has also decided to restructure its operations by reducing its level of vertical integration. Towards this, the company has decided to hive off three of its ancillary divisions in Pune and Jamshedpur. The company is at present on the look out for suitable alliances with international majors. The company has set up an independent retailing network for cars and also for other utility vehicles. The strength of dealership for these now stands at 118. Systems Systems are the procedures that make the organization follow for everything from top-level decision making to board meetings, from employee training and hiring to transportation. All the companys activities should have a particular system particular to the company. The GEO as mentioned above has put in place certain important hooks such as a central HR and central financial coordination with a view to standardize the MIS systems of Telco for financial reporting to the holding company. The net result of all these initiatives has been that Telco now operates more as a group than what they did in the past, but what this really meant

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was that each company had the stamp of its own CEO and went its own way, and if you remove the name o the enterprise you could be looking at different companies with no connection to the Tatas. Style Every company has its own management style, style also consists of the way a company operates its business. As mentioned above the company instituted the business review committees (BRCS), which constituted the formal interface between the group and the holding company. The BRCS reviews the strategic direction of each company, and the executive committee of each board reviews the operations and the budget of the company. Staff This aspect concerns itself with the pool of people who need to be developed. Telco takes a lot of efforts to ensure the best trainee level talent, through campus recruitment from the top institutes of the country. It then gives them the proper training and development, giving them the opportunity to grow and improve. The current chairman of the company Mr. Ratan Tata is a prime example, in the way he started at the middle level management, and then made it to the top of the company Skills This aspect considers the fact that every organization needs certain skills for its success, but its not just enough to 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

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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. Build brands: Shift from selling commodities to marketing branded products and services that not just differentiate but fetch a premium. Leadership: To justify shareholder interest, Tata companies must be among the top three in their industries. Enhance Performance: Executives must pull their weight, and the best of them must get opportunities across functions and group companies. LEADERSHIP Leadership is defined as The art or the process of influencing people so that they will strive willingly and enthusiastically towards achievement of the groups mission. Leadership is something that greatly affects any companys philosophy, culture, and in-turn the overall health of the company. Telco always has had a tradition of great leadership. One of its founders Jamshedji Tata has been a hallmark of leadership.

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That surge of electricity not unnoticed by merchant bankers, now crawling all over Bombay House, the group headquarters is in fact the spark that the group is looking for to rocket itself into a new orbit of growth. In 1991, when a shy and reclusive Ratan Tata took over the chairmanship of the group from uncle J.R.D Tata, his priority was not new businesses or even growth. It was something much more immediate and arduous. It was to turn a loose confederation of companies, controlled powerfully by powerful satraps, into a group that thought and acted like one. The challenge however wasnt merely of ousting powerful

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Problems of the organization

Given the city conditions, the consumers needed a very good overall performance of cars, small cars taking less space has no parking problems, easy derivability in heavy traffic conditions, easy gear shifts and good fuel efficiency. The small car owners being mostly the professional class or the upper middle class were very cost conscious and due to their busy life styles preferred low maintenance in their cars. Irrespective of these above aspects there is one more thing, which also needs attention is customer satisfaction. Customer satisfaction is abroad term, which includes many things like post sale service satisfaction, dealership locality towards customers, way of treatment at these dealerships and service stations, solving the customers problems and concerns to their full satisfaction and so on. The occurrence of single problem is a source of dissatisfaction for customers. Problem experience is not always something broken or loose. Many a times it is a function of customers expectation of how a feature or a vehicle system should look or perform and any performance short of this expectation is perceived as a problem.

Competition information
The main purpose of this section is to have an insight into TELCOs external environment. Here, we shall be briefly looking at the factors influencing its external environment, its competitors and the kind of competition it faces. Competition leads to improvement on all fronts. If healthy, it brings the best out of an industry. Newer and better technology, innovative and much better products and processes, user-friendly and economical products providing maximum value to customers, and other such advantages, all arise out of competition.

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TELCO faces stiff competition in almost all its business segments but has emerged as the winner when it comes to market success. Out of its three business segments namely, the Passenger Car division, Utility vehicle division and the Commercial vehicle division, the Passenger Car division is the area, which is seeing a lot of activity in the current period. And this activity is all set to intensify with the launch of the all-new TATA Sedan in the later half of the current year. TELCO currently has two products in the passenger car segment- the Indica and the Safari. It faces direct competition from almost all the major automobile players in the passenger segment, namely Maruti Suzuki, Hyundai, Fiat, Daewoo and Toyota. S.I.A.M. (Society of Indian Automobile Manufacturers) has classified the Passenger Car segment in India into further sub segments on the basis of their length, Small Car segment (B segment)

Entry-level Mid Size segment (lower C segment) Premium Mid Size segment Luxury Segment (upper C segment) (D segment)

TELCO currently has one offering in the Small Car segment- The Indica, and one offering in the Sports Utility Vehicle segment - The Safari. The proposed offering, christened the TATA Sedan shall compete in the entry-level Mid-Size Car segment. TELCO also has plans to introduce another offering in the Luxury car segment code-named Magna. The Magna shall be launched some time during the later half of next year in 2003. TELCO currently is tight-lipped about the Magna and has divulged no details regarding the car but according to group Chairman Mr. Ratan Tata, the Magna shall be TELCOs answer to the Luxury Segment in India, which shall force the competitors to revamp their strategies.

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And if the success of the Indica and the Safari is to be believed, these words are sure to see light in the near future. The Indica comes in both diesel and petrol variants. TELCO has redefined the rules of the game by launching the all-new Indica V2, which has met with huge success in the recent months. It has earned a lot of respect among all the small car manufacturers because of its quality and value delivered to the customer, truly fulfilling its promise of More Cars per Car. TELCO, for the year 2002 had promised a product of great pedigree, and the Indica V2 has just delivered that. The Indica is directly pitted against the Zen, Alto and Wagon-R from Maruti Udyog, the Santro from Hyundai, the Palio and Uno from Fiat, and the Matiz from Daewoo. 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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Range

Price ('000 Rs.)

Models Economy Maruti 800, Maruti Omni, Premier, Ambassador,

Mid-range Premium

350-450 450 - 1,000

Hyundai Santro Uno, Zen, Ford Ikon, Fiat Palio Esteem, Opel Astra, Ford Escort, Mitsubishi Lancer, Hyundai Accent Opel Vectra, Rover Montego, Mercedes benz

Luxury

> 1,000

TABLE: 1.1 Traditionally, disposable income was perceived as the one critical factor that drove
passenger car demand. However, household income is no longer the single most important factor in determining the demand for vehicles. Other critical factors are the mobility needs of people and the availability of cheap finance. The top three income groups - middle, upper middle, and high - have grown from 10% in 1986 to 17% of the population and covers over 52 million families. The number of high-income households is growing very rapidly, more so in the rural areas. These findings have revolutionary implications for the passenger car market. The development of the used car market will also play a major role, as the customers will be encouraged to trade in their old cars. The key to the growth of future markets is to make maintenance-free vehicles, to improve the road infrastructure, and to reformulate fuels and lubricants so as to reduce vehicle-operating costs.

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NEED OF THE STUDY

We know that customer taste change after a period thats why its important for company perspective to implement his strategy and policies according to his customer: The need of the study is to analyze the strategies generally opted by dealers and to focus on the Marketing mix of TATA Motors. To know about the company strategy which they formulate for their customer to make a better relationship with them. To know the strength and weakness and to assess the profitability of the company. To know the strategy which will help to know the needs and wants of the customer.

To know the buying behavior of car owners.

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

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SCOPE OF THE STUDY

Today, for any organization or firm to survive in this competitive world depends on its abilityo be dynamic and be different from the competition to be unique in the industry: The research aims at finding the attitude of people towards the different brands of cars, a conclusive research was conducted. The data collection form was designed in the form of a standard questionnaire because it is more reliable than unstructured format industry Customer satisfaction helps every organization to keep the existing customer and to build new customer. The information gathered through this research can be used by the company to improve its services and became more customers friendly. This can increase the goodwill of the company and its overall performance. This study is aimed to provide the management with some knowledge about its status in market both in terms of sales and customer awareness.

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OBJECTIVE OF STUDY

To examine the psychographics of small size car customers. To probe the buying behavior of car owners. To know the strategy which will help to know the needs and wants of the customer. To find people expectations or satisfaction regarding the small cars. To judge the awareness level of small cars. To know the factors which play important role before making purchase decesion.

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Part II

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Chapter II
Research Methodology Limitations

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RESEARCH METHODOLOGY

A research design is the arrangement of condition for collection and analysis of data in a manner that to, combine relevance to research purpose with economy in procedure.Research Design is conceptual structure within which research is conducted. It conStitutes the blue print of collection, measurement and analysis of date. Research Design is needed because it facilitates the smooth sailing of various research operations, thereby making research as efficient as possible yielding maximum information with minimum time, effort and money. Research Design stands for advance planning of methods to be used for collecting relevant data and techniques to be used in the analysis .The design helps researcher to organize his ideas whereby it will be possible for him to look for flaws and inadequacies. Sources of Primary and Secondary data:

The major aim of the project was to analyze the Strategies of TELCO and to study the consumer-buying behavior for small car customers. For the first part secondary data was collected from various sources that included website of TELCO and trade journal that were collected from TELCOs Delhi Office. By reducing the chance or the sample to influence results through different questions and through different judgment of answers and what to record, the structured questionnaire produces more reliable results i.e. if the research project is repeated in the same manner, similar results will be obtained.

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Most of the questions asked in the questionnaire were closed ended with a few open-ended questions also, to know consumers general views. Some questions are designed for the purpose of cross checking the sample genuineness in filling the questionnaire. For the purpose of analysis, ranking scale is used to rank the preferences of attributes of the customers. (Semantic differential scale is used to understand the images of brands of cars as perceived by the consumers. This scale is used because it permits the development of descriptive profiles that facilitates the comparison of competitive items.) Universe: The universe is entire group of items the researchers wish to study and about which they plan to generalize. For this, the universe consists of people of Delhi who own small car. Selecting the sample for this project, a probability sampling method is used. Probability sampling method is those in which every item in the universe has a known chance of being chosen in the sample. Here the sample size consists of 60 residents of Delhi. The probability sampling is preferred because: It is the only sampling method that provides essentially unbiased estimates having measurable precision. If the investigator requires this level of objectivity, then some variant of probability sampling is essential. The probability sampling permits the researchers to evaluate in quantitative terms, the relative efficiency of alternate sampling techniques in a given situation. Usually this is not possible in non-probability sampling.

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LIMITATIONS

The time for which the project was conducted was very short. The sample size was restricted to 60 only. The scope of study was also restricted to the study of awareness about the consumer preferences.

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

The area from where the sample population was selected was Delhi only. Other cities and moreover rural area was not covered under the study. The preferences of marketing agents were not considered which would have helped to evaluate the preferable commission sale which helps to boost product sale.

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Chapter III
DESCRIPTIVE WORK ON SUBTOPIC OF STUDY

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MARKETING MIX
Tata Motors Ltd is a multinational corporation headquartered in Mumbai, India. Part of the Tata Group, it was formerly known as TELCO (TATA Engineering and Locomotive Company). Tata Motors is Indias largest automobile company, with consolidated revenues of USD 20 billion in 2009-10. It is the leader in commercial vehicles and among the top three in passenger vehicles. Tata Motors has products in the compact, midsize car and utility vehicle segments. The company is the world's fourth largest truck manufacturer, the world's second largest bus manufacturer, and employs 24,000 workers. Since first rolled out in 1954, Tata Motors has produced and sold over 4 million vehicles in India.

Established in 1945, when the company began manufacturing locomotives, the company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG, which ended in 1969. Tata Motors is a dual-listed company traded on both the Bombay Stock Exchange, as well as on the New York Stock Exchange. Tata Motors in 2005, was ranked among the top 10 corporations in India with an annual revenue exceeding INR 320 billion. In 2010, Tata Motors surpassed Reliance to win the coveted title of 'India's most valuable brand' in a annual survey conducted by Brand Finance and The Economic Times. Tata Motors has auto manufacturing and assembly plants in Jamshedpur, Pantnagar, Lucknow, Ahmedabad, Sanand and Pune in India, as well as in Argentina, South Africa and Thailand.

1. Product: Tata has a very wide range of products it has passenger cars, utility vehicles,
Trucks, Passenger UtilityVehicles Indica Indigo Nano Fiat cars vista XL Trucks Safari Sumo Commercial Dicor Grande Sumo Xenon Tata TL Passenger Novas 44 Commercial passenger Carriers And Defence Vehicles cars Carriers Buses Winger Magic XT

2. Price: The prices of Tata motors are generally affordable acceptable by the general public
at large. Tata always have something for the lower class people with Nano being their trump

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card. Giving discount every month and special promotion for certain type of vehicle also one of the strong strategy use by Tata Motors. Discount can be made from Companys profit or from dealers profit at certain range.

3. Place: Tata Motors has an extensive dealer network covering Indian and International
markets. Wherever you are, there is a Tata Motors Sales and Service dealership close to you. The channel of distribution, physical location, and dealership method of distribution and sales is generally adopted. The distribution of vehicle must be in a very systematic way, from the plant to dealership and to end user. This is not only in India itself but also to the world-wide dealership.

4. Promotion: Tata motors promote their products via Advetising and after sales services 5. People: Tata Motors owe our success to the highly motivated and talented staff. Our
recruitment division picks the crme-de-la-crme from premier universities, management and engineering institutes in India. they put them through rigorous training programmes to hone their entrepreneurial skills and impart comprehensive product knowledge.

6. Processes: Tata motors follow Balanced Scorecard Collaborative, Inc for achieving
excellence in overall Company performance.

7. Physical Evidence: The management of the company has managed to keep their hopes
alive even in this recession and hopes that the worse is behind Tata Motors recently launched the most awaited car of the year, Tata Nano and the company has already received 203,000 booking that are fully paid and 70 percent of the applicants are ready to wait till the end of 2010 for the car to be manufactured.

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MARKETING STRATEGY AND MARKETING PLAN

A MARKETING STRATEGY in general sets a target market and a marketing mix. It is a "big picture" of what a company will do in some market in order to gain a competitive advantage. A MARKETING PLAN is a detailed breakdown of your marketing strategy. It is a written statement of a marketing strategy with the time - related details as well as the marketing budget for carrying out the strategy. It should spell out the following in detail: What marketing mix will be offered? To who (target market); For how long; What company resources will be needed at what rate; What results are expected (sales and profits). 1.1Develop a Marketing Strategy By now you should already: have decided on the nature of your business and you know that your business idea is Feasible; have also identified your market and decided on your target market; know what the needs of your customers are and you have identified and assessed your Competition. Now you need to decide on: The Product and Service to offer your customers; How you will make your Products available to customers;

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 How you will communicate the benefits of your Products and persuade customers to buy them The price you will charge. These four decision variables are the ingredients of the so-called marketing mix. Your task is to create these elements effectively in order to market your product/service to the target market in an optimal way.

1.2Types of Marketing Strategy

1. Social Marketing:

It refers to the design, implementation and control of programs to increase the acceptability of a social cause or practice among people e.g. No Smoking campaign in Delhi University, publicity campaign for casting vote.

2. Augmented Marketing:

It refers to providing additional services by way of innovative offerings and benefits to the customers to increase his level of satisfaction e.g. free home delivery service by Supermarkets.

3. Direct Marketing:

Marketing through various advertising media that interact directly with consumers, generally calling for the consumer to make a direct response, e.g. Catalogue Selling, Mail-order, Telecalling and TV shopping.

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4. Relationship Marketing: Marketing through creating, maintaining and enhancing strong long-term relationships with customers in order to win his loyalty e.g. a restaurant can build relationships with customers by sending him wishes and discount offers on his birthdays. 5. Services Marketing: It is applying the concepts, tools and techniques of marketing to services like banking, insurance, retailing, educational etc. 6. Person Marketing: It consists of activities undertaken to create, maintain or change attitudes or behavior towards particular people like politicians, sports stars, film stars, professionals to promote their careers and income. 7. Organisation Marketing: It consists of activities undertaken to create, maintain or change attitudes and behavior of target audiences towards an organisation. 8.Place Marketing: Place marketing involves activities undertaken to create, maintain, or change attitudes and behaviour towards particular places e.g. tourism marketing. 9. Differential Marketing: A market-coverage strategy in which a firm decides to target different markets through different strategies or offers e.g. Hindustan Unilever offers different types and qualities soaps for different markets and customers.

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10. Synchro marketing: It refers to balancing the fluctuations in irregular demand for a product due to seasons, timings etc, through flexible pricing, promotion and other incentives e.g. heavy off-season discount on woollens may increase its demand to some extent. 11. Concentrated Marketing: A market-coverage strategy in which a firm focuses on only one or few markets. 12. De-marketing: Marketing strategies to reduce demand temporarily or permanently, not to destroy demand but only to shift it e.g. Super stores may offer no discounts on Saturdays, Sundays and holidays to reduce overcrowd. 1.4 The Marketing Strategy Process Having a strong marketing strategy process in place helps to ensure that your marketing activities remain aligned with your business goals, maximizing the business return from your marketing efforts. The picture shows the process for developing and aligning marketing

strategy.
These are the steps you should follow to create and execute a winning marketing strategy. For help in following this 7-step marketing strategy program, check out our newly released eBook "The 7-Step

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Easy

Marketing

Strategy

Process."

Ill briefly review each step in turn:

1.

Understand Your Customer Develop a clear picture of your target customer using market research and analysis. Understand their pain points and the benefits of your solution.

2.

Analyze the Market Some basic market research should allow you to find market data such as total available market, market growth (historical numbers and projections), market trends, etc.

3.

Analyze the Competition Ask yourself what other choices your target customers have to solve their pain point. Research and assess the strengths and weaknesses of each. Take a look at this article for more info on competitive marketing strategy.

4.

Research Distribution Channels What is the best way to deliver your product or service to your target customers? This will impact your sales strategy and your financials, as well as your marketing mix.

5.

Define Your Marketing Mix Check out this article about defining your marketing mix: Product, Price, Place and Promotion.

6.

Analyze the Financials Put together your marketing budget and evaluate projected marketing ROI, customer acquisition costs, etc.

7.
8.

Review and Revise Continuously evaluate the effectiveness of your marketing strategy, and revise or extend as needed.

1.5 Create an Effective Marketing

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The MARKETING MIX consists of all the controllable variables the company puts together to satisfy its target market. A typical MARKETING MIX includes decisions regarding the product, the price of the product, how to promote the product and how to get the product to the right customer at the right time and place. All these variables are controllable elements in the marketing mix and can be reduced to four basic ones, each starting with a P (also known as the four Ps): Product. Place. Price. Promotion. The four Ps are those factors that you can control directly, for example, you develop your product, you decide how to get it to the customer, you determine the price and you choose the promotion mix. The four Ps are, as you will realize now, with the selection of your target market are the basic ingredients of your marketing strategy. All four Ps are needed in a marketing mix and should therefore be tied together. When a marketing mix is developed, all final decisions about the P's should be made. All four Ps should be in harmony and aimed at satisfying the customer's needs in an optimum way. You do have control over the marketing mix and can vary it to suit the needs of your customers and the resources of your business. Customers are continuously matching their needs with the products offered by you and your competitors. You should now know your target market and the needs of your potential customers. From analyzing your competitors, you can identify what they offer the target consumer through their marketing mixes. This determines what your marketing mix and your competitive advantage will be. All of the marketing mix elements must reinforce the image of the product or service that the business portrays to the potential customer. Lets discuss each P in the marketing mix in more detail. 1.6 Focus on the product

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This area is concerned with developing the right product for the target market. This offering may involve a physical product, a service, or a blend of both. Remember that a product is not limited to a physical good. The important thing is that your product and/or service should satisfy a specific customer need. At the most fundamental level we normally talk about the core product. The core product answers the question "what is the buyer really buying?" The woman buying a camera is not buying a mechanical box, she is buying the opportunity to take photo's, when she want to have and keep forms of "immortality" or precious moments. The marketers' job is to sell these core benefits of the product or service. Branding means the use of a name, term, symbol, design, or a combination of these, to identify a product. It includes the use of brand names, trademarks, and practically all other means of product identification. A brand name is a word, letter, or a group of words or letters. Examples include Nike, IBM, and Kellogg's. Trademark is a legal term and includes only those words, symbols, or marks that are legally registered for use by a single company. Brand promotion has advantages for sellers as well as for customers. A good brand name speeds up shopping for the customer, if the customer can immediately recognize the product, and it will reduce the seller's selling time and effort. When customers repeatedly buy by brand, the seller is protected against competition from other companies. Good brands can improve the company's image, and thus speed up acceptance of new products marketed under the same company name. Packaging involves promoting and protecting the product. This can be important to both sellers and customers. It can make a product more convenient to use or store. It can prevent spoiling or damage. Good packaging makes products easier to identify and promotes the brand at the point of sale and even in use.

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In addition to branding and packaging if the formal product is a physical object, the market may recognize it as having characteristics like a quality feel, specific features, as well as styling. If it is a service, it may have some or all of these facets in an analogous manner. The total product can also consist of elements like free delivery, installation, warranties, services, maintenance systems, customer advice, financing and other things that customers perceived to be of value.

INTERNATIONAL STRATEGIES
INVEST HEAVILY IN R&D- the main area where Telco can improve in its efforts to make an impact in the global marketplace is by improving its R&D base and bringing it up to world standards. Also Telco can get into strategic alliance with a international car manufacturer for R&D support. STRATEGIC TIE-UPS- the company should attempt to tie up with some Strategic Partners, to help it gain entry into foreign markets. These partners should have competencies in the area of cost management or R&D, or these companies might be suppliers who provide inputs in the projects taken up by the company Consumers of small cars are seeking a very good overall performance in a car than any other attributes. Most of the consumers prefer Small cars and mid sized cars for their good mileage, good acceleration, easy derivability, requiring small rooms for parking. Good looks hardly count for the buyers of small cars. Again a good after sales service and low maintenance in a vehicle is a garnish on delight. Safety and credit facilities are almost ignored factors in purchasing a small car.Family wields the highest influencing power in making a purchase decisionfor an Indian consumer. Friends and media also have a good impact on decision-making. A very few consumers take a self-purchase decision.Usually consumers get detailed information through friends, customers

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magazines, other car owners and dealers whereas, they get the product information from the other sources like television, hoardings etc.The dream cars of the consumers are high luxury cars like Mercedes S-class, BMW, Ferrari, Pajero, Rolls Royce, Jaguar, Porsche, the cars with a class apart when it comes to their brands images, cars which flaunt status, style, wealth and attitude of the people owning them, cars which are considered to the best on the globe.

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LEARNING
Learning is defined as The gaining of knowledge or skill. The environment around us is constantly evolving, it is important for anyone to constantly evolve and improve. This is no different for a company, who keeps on evolving, and attempting to learn faster than its competitors. The learning-based route forward believes that route to success is adopting a flexible, emergent strategy that monitors events in the environment and reacts to them in the best possible way. Telco has adopted a learning route forward, it has showed that it reacts well to market changes and various events; its strategy has always evolved according to these changes. Seeing the opening up of the market, and the growth of the infrastructure, the company decided to look for alliance partners, to come up to world-standards. In the future Telco should continue to learn and evolve into a world-class company, and make changes that will help it achieve its goals in the best possible way.

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Chapter IV
DATA ANALYSIS AND INTERPRETATION

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TABLE :4.1

OTHER CAR OWNERS 800 OWNERS ZEN OWNERS T D N O P S E R INDICA OWNERS SANTRO OWNERS 0 10 20 30

NO. OF RESPONDENTS

Interpretation
Total no. of Respondents:60 Owners of Santro Owners of Zen Owners of Indica Owners of Maruti 800 Owners of other cars 9 14 - 14 14 9

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.

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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 efficiency in city conditions, smoothness, pick up, derivability, 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 being 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. 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

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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 favorable brand or products and later 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. 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.

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Again when the consumers were asked about their preference for any other car, the highest number of respondents chose small cars, that are 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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TABLE: 4.2

FACTORS IMPORTANT IN A CAR PURCHASE

COST 3% 3% 7% 18% 7% STYLE PERFORMANCE PERFORMANCE AND STYLE PERFORMANCE AND COST STYLE AND COST STYLE COST AND PERFOMANCE

12% 50%

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FACTORS IMPORTANT IN A CAR PURCHASE 90 80 70 60 50 40 30 20 10 0 1 ATTRIBUTES

PERCENTAGE OF RESPONDENTS

PERFORMANCE STYLE COST

TABLE: 4.3

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Respondents ranking of attributes PREFERENCE RANK 1 2 3 4 5 6 7 TABLE: 4.4 Attributes Performance Cost Low Maintenance After Sales Service Brand Name Safety Credit Facility Preference Rank 1.5 2.9 2.7 3.4 3.8 4.4 6.4 Preference Points 130 102 106 92 84 72 32 PREFERENCE POINTS 140 120 100 80 60 40 20

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TABLE:

4.5

CREDIT FACILITY PREFERENCE POINTS SAFETY BRAND NAME AFTER SALES SERVICE LOW MAINTENANCE COST PERFORMANCE 0 20 40 60 80 100 120 140

ATTRIBUTES

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SOURCES OF INFORMATION
40

35

30 NUMBER OF RESPONDENTS

25

20

15

TELEVISION MAGAZINE FRIENDS DEALERS MECHANIC OTHER CAR OWNERS

10

0 1 SOURCE OF INFORMATION

TABLE: 4.6

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INFLUENCING FACTORS IN DECISION MAKING

80 70 60 50
PERCENTAGE OF RESPONDENTS

40 30 20 10 0 1 INFLUENCERS

FRIENDS FAMILY MEDIA OTHERS

TABEL: 4.7

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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

WeaknessesIt 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. 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.

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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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Chapter V
CONCLUSION AND SUGGESTION

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CONCLUSION
Most of the respondents who were questioned gave importance to performance of the car.Tata motors give much importance to the performance of the car and conducts surveys to know the changing needs of the customers. The price of a car is just one-third of what it cost you over its lifetime. Running and maintaining it make up the other two-thirds. Take into account resale value and its real cost becomes clear. TATA MOTORS stands for value as much as it stands for performance. In spite of rising input costs, we try our best to keep prices down. Their running costs and resale values are unbeatable too. Nothing matches the delight their cars deliver. After the rash of new cars launches in the past two years, the relative lull in the auto industry is showing up in the customer satisfaction indices. According to the 2005 four-wheeler Total Customer Satisfaction (TCS) study conducted by the specialist division of TNS Automotive, the automobile ownership experience or customer ownership experience has declined in all areas compared to 2004.The comprehensive study covers over 50 models with customer evaluations taken in the key areas of sales satisfaction, product quality, vehicle performance and design, after-sales service, brand image, and cost-of-ownership. The TCS index score provides a measure of satisfaction and loyalty a given model enjoys with its customers. According to TNS Automotive, the decline is predominantly for older, small and entry midsize car models. The ageing of these models seems to be posing a stiffer challenge for manufacturers to sustain past performance levels at a time when customer expectations are rising sharply.

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SUGGESTIONS
The new marketing strategy should be implemented time to time. Proper visiting cards should be available to the executives. Mostly dealers dont have their specific website. Tata motors should advertise in Sports because sports are increasingly cutting into the share of mass entertainment channels. TATA MOTORS can start Money Bond Scheme instead of giving Cash Discount with more value. Customers eligible for an income bond, encashable after a 15year period. More test drives should be offered. Should be more particular about Post Sales Follow Up as it shows the concern of the company with the customer. Should put in more efforts to promote TATA MOTORS Finance , Autocard and Accessories.

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Chapter VI
BIBLIOGRAPHY

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BIBLIOGRAPHY Reference books: Mowen c. John Consumer Behavior Macmillian publication 6th edition Tull & Hawkins Market Research Pearson publication 7th edition Internet: http://www.tata.com/0_careers/our_people/20020214_suman1.htm http://www.tata.com/0_b_sectors/index.htm http://www.tata.com/tata_engg/index.htm http://www.tatainternational.com/automob_products.asp http://www.tata.com/tata_engg/articles/index.htm www.autoweb.com Magazines Business today News Papers Economic Times Business line

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Chapter VII
ANNEXURE

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QUESTIONNAIRE

Personal details: NAME:.. ADDRESS:. CONTACT NO.:.

Que1. Do you own (Please Tick?) (A) Car Que2. If you do own a car (A)Name Que3. Are you satisfied with it? (A) Yes (B) No (B) Model (B) 2 wheeler

Que4. How much do you spend on maintenance on a monthly basis? Ans:.. Que5. Name some cars in the small car segment in India Ans:.. Que6. Can you relate the following cars to their ads (A) Zen (B) Indica (C) Santro

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Que7. Rate the following attributes according to you preferences while buying a new car (A) Price (B) Looks (C)Low maintenance cost

Que8. Comment on the following statements according top the tables given below

1 strongly agree 2- Agree 3-neither agree nor disagree 4-disagree 5- Strongly disagree

Indica, being the only indigenously made car is preferred by me Santro has the most effective AC Zen has the jazziest and outgoing colors

Que9. When are you planning to buy the next car? (A) One month later (C) 6 months later (B ) (D) Within six months No such plans

Que10. Comment on the following cars as to how can there be any improvements (A)Indica: (B)Santro:

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(C)Zen:

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