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Tata ace

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  • 1. Jegadeesan Priyatharisini R Sriram BSK Uthra G Vivekh BIG THINGS COME IN SMALL PACKAGES
  • 2.
    • Launched in May 2005
    • Inspired from Highly successful Japanese Minitruck Kei Truck (introduced 1977) and Korean Kia Bonga (1980)
    • Tata Ace is priced in the range
      • Rs 2.25 lakh for BS II (ex-showroom NCR)
      • Rs 2.35 lakh for BS III (ex-showroom NCR)
    • Tata Ace is powered by a small and efficient 16bhp 700cc IDI diesel engine
    • Suitable for both rural and urban use
    • Tata Ace sets the trend as the country’s first
      • high performance, low maintenance
      • safe and reliable mini-truck
      • sporty car-like features to ensure comfort in ride and handling
    10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
  • 3. 10/06/11 Tata ACE - Team 10-Thiagarajar School of Management Ref: http://www.wheelosphere.org/little-elephant-tata-ace-sales-cross-100000-in-fy-2010/ FY Sales Figures 2005-2006 30,000 2006-2007 70,000 2007-2008 89,000 2008-2009 81,000 2009-2010 110,032 (With Tata Magic 160,000) 2010-Nov’11 160,000 (upto 30-Nov-2010) Aiming for 250,000 this year
  • 4.
    • The 3 wheelers had the following issues
      • wore a rustic look
      • uncomfortable
      • not very safe for carrying load at high speed
    • Though the price was less, the operating cost was very high
    • Need for company: blue ocean strategy
    10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
  • 5.
    • Quadrilateral project -led to creation of large number of expressways and widened many of the existing highways
    • A portion of traffic moved from railways to roads and pushed the demand for heavy and light commercial vehicles
    • Urbanization- cities pushed their geographical boundaries
    10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
  • 6.
    • Increasing population and growth in the organized retail sector with the entry of large players
    • Social status for Users
    • Last mile distribution vehicle
    • TATA motors identified these macroeconomic trends
    • Realized that there will be an increased demand for LCVs in urban areas
    10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
  • 7.
    • TATA motors wanted to reduce their dependence on the MCV and HCV segments
    • They started losing their market share in these segments in the late 90s
    • TATA motors wanted to diversify
    • The launch of their LCV, TATA ACE helped in achieving these goals
    • During the financial meltdown (2008-09), even as the MCV &HCV segments in India shrank by 33% compared to the previous year, Ace in the LCV segment fell by just 12%.
    10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
  • 8. 10/06/11 Tata ACE - Team 10-Thiagarajar School of Management Subaru Sambar Honda Acty Mitsubishi Minicab Suzuki Carry
  • 9.
    • Basic needs of small scale transporters
    • Customers in rural areas attached prestige to their transport vehicles
    • Safety
    • Comfort to the driver
    • Speed
    • Ability to drive in the narrow lanes
    • Tight Turning Radius
    • Low operating costs
    10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
  • 10. 10/06/11 Tata ACE - Team 10-Thiagarajar School of Management Trend in Market Share Source: Tata Motors Financials Reports
  • 11. 10/06/11 Tata ACE - Team 10-Thiagarajar School of Management Sales Growth Achieved Source: Tata Motors Financials Reports
  • 12.
    • Target segment – Individual Customers
    • Target customers: who expect a high Return On Investment (ROI) along with safety, comfort, and status
    • 136,000 Three wheeler SCVs were sold in 2005
    • With 20% attrition towards ACE and attracting another 25,000 customers, market is very attractive to enter
    10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
  • 13.
    • Value proposition
    • High Performance with car-like features in safety, comfort
    10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
  • 14.
    • Price was higher as compared to competitors but the company supported it on the basis of the value provided
    • Initially a discount of 4000 Rs was given
    • 80% of the vehicle has been outsourced to keep costs low without
    10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
  • 15.
    • Initial Launch
      • Company launched ACE in the south first through its Dealers and Dealer Branches
    • Distribution network: Hub & Spoke model
      • Existing dealership acted as hubs & set up IS dealerships
      • Location close to target markets
      • Plant located in Pune at the time of launch
      • Target markets (southern and western regions)
    • Current Availability
      • 26 Commercial vehicle dealers in Tamilnadu
      • Available in all 28 states
      • 1700 Tata Ace specific dealers all over India
    10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
  • 16.
    • Value proposition
      • High performance with car like features
      • Advertisement with Tag Line “Kutti Yanai”
      • A symbol power
      • A symbol of reliability
    10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
  • 17.
    • Benefit sought Behavioral Segmentation
      • Need based
      • Focus on comfort and safety
    • Demographic Customer profile Segmentation
      • Individual Vehicle owners
      • Fleet Owners
      • Institutional Customers
    10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
  • 18. 10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
    • Strength
    • Strong brand name
    • Leverage of First mover advantage
    • Good logistic management
    • Continuous innovation
    • Opportunities
    • Rural market
    • High growth rate of LCV segment
    • Weakness
    • High product cost
    • After sales service
    • Complaints on gear shifting
    • Threats
    • Increased competition due to new entrants
  • 19.
    • Piaggio - Ape, Quargo
    • Bajaj - Tempo, Max series, RE600
    • Mahindra & Mahindra - MN 25 & MN 31 trucks, MN40, 49 trucks (Navistar Inc USA), Maxximo & GIO
    • Force motors - Trump Trax, Kargo king
    • Hyundai motor – Porter
    10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
  • 20.
    • Model T product development was based on “Traditional Physical Process Sequence”
      • Design product, procure and make
      • Price, sell, promote, distribute and service
    • While Tata ACE product development was based on the latest marketing strategy, “Value Creation and Delivery Sequence”
      • Customer Segmentation, product focus, value positioning
      • Product development, service development, pricing, sourcing/making, distribution, servicing
      • Sales force, sales promotion, advertising
    10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
  • 21.
    • Market sensing process
      • Identified the needs of potential customers like Traders, Truck drivers and Farmers
    • Blue ocean strategy and Rural marketing activities
      • Tie-up with Godrej Aadhar and other rural dealers
    10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
  • 22.
    • Functional gratifications
      • Speed
      • Capacity
      • Service points
      • Easy navigation in roads
      • Low maintenance and operating costs
    • Sensory gratifications
      • Sleek appearance
      • Position as “ truck in mini size”
      • Comfort
    10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
  • 23.
    • Extended as passenger vehicle as Tata Magic
    • Designed to larger tyres to acquire greater speed
    • Improved fuel efficiency by 6-10%
    • Mileage 25kmpl
    • Smaller model of Tata Penquin for Rural market
    • Reference:
      • www.tatamotors.com
      • www.moneycontrol.com
      • www.rediff.com
    10/06/11 Tata ACE - Team 10-Thiagarajar School of Management
  • 24. 10/06/11 Tata ACE - Team 10-Thiagarajar School of Management