Tata Ace is a mini commercial vehicle launched by Tata Motors in 2005. It was inspired by successful Japanese and Korean mini trucks. Priced between Rs. 2.25-2.35 lakhs, it is powered by a small and efficient diesel engine, making it suitable for both rural and urban use. Since its launch, Tata Ace sales have grown steadily, reaching over 160,000 vehicles by 2010.

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