Upmarket Cuffe Parade in </li></ul> South Mumbai<br /><ul><li> A shop area of 1.5X2.2 sq. mtrs.
Borrowed Rs 1 lakh from his</li></ul> brother & balance from ICICI<br /><ul><li> Pays an EMI of Rs 6,500</li></ul>The reason: his mobile grocery unit, a TATA ACE, earns him a monthly income much higher than his EMI payout.<br />Source: Business Standard Article : Serving a ‘super’ ace 05.11.2009<br />
SERVING AN ‘ACE’<br />MARKETING-II: CASE PRESENTATION<br />
“TATA ACEbears testament to the company’s efforts to identifynew categories & develop logistic solutions that will improve the lives of the people.”<br />Ravi Kant, Vice Chairman, Tata Motors <br />Source: THE HINDU: Making Inroads Serving a ‘super’ ace 06.05.2005<br />
WINNER OF BBC ‘TOP GEAR DESIGN OF THE YEAR 2006’ AWARD<br />
TATA Motors-Financials for FY 09<br /><ul><li>Basic Earning Per Share (EPS) decreased to Rs. 22.70 as compared to Rs. 52.64 last year for Ordinary Shares.</li></li></ul><li>GAP ANALYSIS<br />
The idea of a vehicle called Ace: GAP analysis<br />Market Situation<br /><ul><li>Government plans of road network expansion.
Higher GDP growth positively correlated with truck penetration.
High probability of increased demand in LCV segment.</li></ul>Company Situation<br /><ul><li>Tata product portfolio lacked greater than 45tons and sub 2 ton vehicles.
Scope of enhancing the market share was there</li></li></ul><li>GAP Analysis<br />
GAP Analysis: Value Net Model<br />Customers: Balanced perspective and ROI sensitive customers would buy the product<br />Suppliers: TATA could utilize its existing supplier base<br />Competitors: There was no competition in the identified product segment<br />Complementors: The Government road network improvement schemes and high GDP growth rate of the country<br />SOURCE: 12manage.com<br />
GAP Analysis: Company strategy<br />Basis of Strategy<br /><ul><li>Value Net Model</li></ul>Strategy Adopted<br /><ul><li>New Product Development</li></ul>Company Decision<br /><ul><li>AddTata Ace, “The Last Mile” distribution vehicle to the Product Portfolio</li></li></ul><li>ANSOFF Matrix<br />
Collection of Information<br />Sampling plan: Ajudgmental sampling technique was used <br />Contact method: Personal interview<br />Data: <br />Primary datawas used<br />Research Instrument:<br />Questionnaires<br />4000 truck and three wheeler drivers were interviewed!<br />
Information analysis and findings<br />There was market for a vehicle that offered the price, fuel efficiency, and maneuverability of a three wheeler but with the safety, durability, additional payload, and comfort of a four-wheeled truck.<br />Customers also viewed four wheelers as a higher-status vehicle.<br />Customers wanted a product that would travel across the length and breadth of the country and would withstand overloading.<br />People wanted a vehicle with a feel good factor for the driver.<br />In order to convert the prospective consumers into potential consumers the price had to be below 2lacs. <br />45% of the Ace’s customer base would come from people planning to purchase three wheelers, 15% from potential pickup and light-commercial-vehicle purchasers, and 40% from first-time commercial-vehicle purchasers.<br />
A symbol of reliability</li></li></ul><li>Positioning<br />A PRODUCT <br />FOR<br />ALL YOUR NEEDS<br />Boy rushing to school<br />Off to work in Tata ACE<br />Wife seeing husband off for the day<br />To school in Tata ACE<br />
Designing the ACE<br /> ENHANCING OVERLOADING CAPACITY<br /><ul><li> Per unit cost of transportation perceived as a much </li></ul> desired quality. Acceleration not of much importance<br /><ul><li> Overloading stress points identified using CAD
Higher strength steel used only there to come out with</li></ul> low cost yet durable product.<br /><ul><li> Semi-monocoque frame</li></li></ul><li>Designing the ACE<br />ENGINE SELECTION<br /><ul><li> Customer preference – Diesel engine and 1 engine </li></ul> option ruled out due to NVH targets<br /><ul><li> Foreign made 4 cylinder engine would double cost and HP
Indica model based 2 cylinder engine reduced costs
Rotary fuel injection pump met emissions standard and</li></ul> avoided use of electronic system<br />
Designing the ACE<br />SAFETY AND COMFORT<br /><ul><li> In spite of strict cost target, M1/N1 standard</li></ul> adhered to .<br /><ul><li> Customers were not for Semi forward engine
Flat faced model adhered to which gave it a large </li></ul>commercial vehicle look and better space <br /> utilization.<br /><ul><li> Full frontal crash requirement</li></li></ul><li>Product<br />
PRODUCT- TATA ACE<br /> “At the heart of any great brand lies a great product”<br />BBC Top Gear’s Annual “Best commercial vehicle design” Award winner -2006<br />
Tata Ace differentiation - Versatility<br /><ul><li>Ideal for both City and rural areas.
12” tyres give higher ground clearance and</li></ul>higher loading capacity<br /><ul><li> Rigid front axle for Indian conditions & a turning radius of 8.6m
The truck-like strength of the front and rear leaf spring </li></ul> suspensions provide a smooth riding experience<br /><ul><li>Usages range from vegetable vendors to cargo pickup to </li></ul> passenger transport.<br />
Tata Ace differentiation - Savings<br /><ul><li>Comfortable conditions for the driver allow the ACE to</li></ul> travel over 500 kms a day<br /><ul><li> Electronic start and stop increases mileage by 6-10 </li></ul>Kmpl.<br /><ul><li>Flat, large loading area gives a fantastic opportunity to</li></ul> earn higher business revenue <br /><ul><li> Low operating costs and highly reliable – an</li></ul> altogether safe investment for small time <br /> businessmen<br />Ample load space with three side panels<br />
High performance by front disc brakes & rear drum brakes
Large windscreen, large rear-view mirror and the large rear window
Easily accessible hazard warning switch for emergency
The frontal windshield was pasted to the steel window frame to add </li></ul>structural strength<br />
Tata Ace differentiation - Comfort<br /><ul><li> Sheet metal cab with doors, roof lining, floor mat </li></ul>protect from rain, heat and cold<br /><ul><li> Control pedals, gear shift and parking brake </li></ul>ergonomically positioned for comfort<br /><ul><li> Higher door opening angle and low floor height for</li></ul>easy boarding <br /><ul><li> Sun visor for protection from direct glare</li></li></ul><li>Tata Ace differentiation - Performance<br /><ul><li>700cc engine delivers a power of 16 HP @ 3200 rpm
First time LCV purchasers</li></li></ul><li>Communication Objective<br /><ul><li>Good Brand awareness of the umbrella brand, TATA
To communicate the benefits of the product, ACE
To develop a positive brand attitude among the target customer group
To translate the positive brand attitude into sales</li></li></ul><li>Design the Communications<br />Message Strategy<br /><ul><li>Dealers were educated in the benefits of Ace versus the competition
The core message was created around new opportunities that Ace would provide its customers
The dissatisfied three wheeler owners were targeted with the message of “feeling good about your job”
Rural markets – a huge potential<br />"It has always been our desire to anticipate demand and develop products to meet that need. We perceived that there would be a growing demand for a safe, reliable and versatile 4-wheel very light commercial vehicle for carrying goods and people. It would facilitate inter-city transport and extensively connect town and villages in rural India. I believe the Tata Ace will deliver excellent value to its owners and operators." <br /><ul><li>56% of the National Income
Hyundai Motor Corporation, Korea, plans to set up a LCV manufacturing plant in India. Though Hyundai denied it may launch it LCV porter.
Bajaj Auto working on a 4-wheeled goods carrier
Other major players such as TVS, Hindustan Motors, Ashok Leyland and Suzuki are seriously mulling their foray in to this segment.</li></li></ul><li>PIAGGIO APE – ‘APE’ING the ACE Success?<br /><ul><li>Offers 20 kplcompared to 14 kpl offered by Tata Ace
6 speed gear box as opposed to 5 speed gear box of Tata Ace
After market accessories opportunities (attachments etc.)
Concentrate on after sales services to make competitive </li></ul> advantage sustainable (like extended warranty)<br /><ul><li> Focus on MAGIC design to make it appealing to a broader</li></ul> section <br />The Way Ahead….<br />