LCV Market

STUDY OF LCV/ICV MARKET IN DELHI WITH

SPECIFIC REFERENCE TO CUSTOMERS OF

COMPETITOR

Summer project report submitted in partial fulfillment of the requirements for the

post graduate diploma in management

By: Omkar V. Pant

Supervisors: Mr. Sarwan Keshri

Dr. Gopal Iyengar

Prof. S.Anant Ram

Kirloskar Institute of Advanced Management Studies

Harihar, Karnataka

1Kirloskar Institute of Advanced Management Studies

ACKNOLEDGEMENT

Firstly I would like to thank Mr.S.K.Sehgal, the sales head of TSS, Gazipur for

providing me such a nice opportunity to undergo a summer internship program at TSS,

the only sales point of its kind throughout India.

I am highly honored to be associated with such a great organization, and I wish to

associate again in the future.

I am also thankful to Mr. Milan Joshi, the Business Manager who assisted greatly

in this project and guided us throughout the project.

Now I would like to thank Mr. Sarwan Keshri, my mentor and guide for this

project. The success of this project was not possible without the able guidance of him. He

guided me at all the times in the project. He helped me in all the stages of my project.

Although the project was carried out in Delhi far away from Harihar, I was in

constant touch with my guides Dr. Gopal Iyengar and Prof. S. Anant Ram who gave me

useful tips throughout the project. They helped me in applying the theoretical concepts

practically in the field.

It was an excellent learning process for me using which I learnt different aspects

of sales and marketing in commercial vehicle market.

Finally I would like to thank all the sales executives and other staff members of

TSS who helped me directly and indirectly all the time during the project.


CONTENTS

EXECUTIVE SUMMERY..............................................................................................................................5

INTRODUCTION..........................................................................................................................................7

OBJECTIVES OF THE STUDY..................................................................................................................9

CONCEPTS AND MODELS USED IN THE STUDY.............................................................................10

ABOUT TATA MOTORS...........................................................................................................................12

INDUSTRY OVERVIEW OF LIGHT COMMERCIAL VEHICLE SEGMENT................................13

ABOUT THE COMPETITOR EICHER MOTORS LIMITED.............................................................15

THE METHODOLOGY AND TIME FRAME OF THE PROJECT.....................................................17

DEALERS OF EICHER MOTORS LIMITED (EML)............................................................................19

CUSTOMER FEEDBACK..........................................................................................................................21

RESEARCH FINDINGS BASED ON CUSTOMER FEEDBACK.........................................................22

RECOMMENDATIONS.............................................................................................................................34

LIMITATIONS OF THE STUDY..............................................................................................................36

SCOPE OF FUTURE IMPROVEMENTS................................................................................................37

CONCLUSION.............................................................................................................................................38

BIBLIOGRAPHY.........................................................................................................................................39

APPENDIX....................................................................................................................................................40


List of Figures/Tables

Fig/Table Title Page

No.

1 AUTOMOBILE PRODUCTION TREND 14

2 COMPARISON BETWEEN TML & EML 20

3 SALES OF TML & EML 20

1 FLEET SIZE OF CUSTOMERS 21

2 MOST POPULAR NEWS DAILY 22

3 AFTER SALES SERVICE SATISFACTION FOR

TML

23

4 AFTER SALES SERVICE SATISFACTION FOR

EML

23

5 RANKING FOR ATTRIBUTE ‘VEHICLE

FINANCE’

25

6 RANKING FOR ATTRIBUTE ‘VEHICLE

STURDINESS’

26

7 RANKING FOR ATTRIBUTE ‘TECHNICAL

SPECIFICATION’

26

8 RANKING FOR ATTRIBUTE ‘MILEAGE’ 27

9 RANKING FOR ATTRIBUTE ‘AFTER SALES

SERVICE’

27

10 TYPE OF CUSTOMERS 29

11 USP OF 11.10 30

12 PROBLEMS IN TATA 1109 31

13 CUSTOMERS PLANNING TO BUY NEW TATA

VEHICLES

32


EXECUTIVE SUMMERY

Presently TML is the market leader in commercial vehicle sector in both India and in

Delhi. The other player in the commercial vehicle segment is Eicher Motors Ltd. (EML).

In recent times sales of EML are steadily rising. The sales growth rate of EML has also

suddenly increased. The two models of EML viz. eicher 11.10 and eicher 10.59 in

particular are selling heavily and may pose a threat to TML. Also the sales of the

corresponding models of TML viz. tata 709 and tata 1109 are declining in the recent past.

My project was to find the reasons for the declining sales of the tata 1109 and the

growing popularity of the eicher 11.10. The project was marketing research based, and I

had to use different tools of marketing research to do a research and analyze the

observations of the research to find the above said reasons.

The research was carried out on the basis of following aspects:

Customer perception about both tata 1109 and eicher 11.10

Sales and marketing strategies of the TML and EML

Customer’s expectation from the product

A comparative study is made between TML and EML on the basis of the above aspects.

Based on the above aspects a questionnaire has been prepared for the customers and the

EML dealers. The findings of the research were analyzed and the appropriate inferences

had been found out which will tell the corrective actions to be taken by the company to

raise the sales of those models.

First I identified the major market pockets where eicher models are significantly used.

Then I went to those markets and got the feedback of those eicher customers. Then I went

to EML dealers to know about their sales and marketing strategies.

Based on the feedback of the customers and information collected from Eicher

dealers I analyzed the data and found out the inferences.

Most important inference which I figured out was that the sales and promotion

expenses of Eicher motors was far more than Tata Motors and Eicher 11.10 and 10.59

were technically more superior to its Tata counterparts. Also tata is not having any tie-up

with insurance company as eicher is having with ICICI Lombard. It clearly shows that

tata is not willing to spend more on sales and is concentrating more on profit, and on the


other hand eicher is trying to establish itself in LCV market i.e. it is focusing on market

share at the cost of more expenses on sales and promotion activities. This has led to a

gradual increase in the sales of Eicher.

Finally I gave some recommendations on the basis of the inferences.

Some of the important recommendations include following:

Increase in the budget of sales and promotion activities.

Modify some technical aspects of the vehicle.

Increasing the number of exclusive authorized service centers.

This should be done in order to minimize the competition given by Eicher to Tata, and to

stop the growing popularity of Eicher.


INTRODUCTION

Tata Motors Ltd. (TML) is having its sales and service office for commercial

vehicles in New Delhi. The commercial vehicles sales in Delhi are not done through

dealerships but they are done by the company office which is fully dedicated to sales and

service of commercial vehicles. Delhi being the largest market for LCV’s and ICV’s is

provided with such an office. The office is a state of art building housing a sales office, a

workshop, a warehouse and is also having an annexure of Tata Motor Finance company

Ltd. Tata Motor Finance is a division of TML and is meant for the financing of vehicles

of TML. The sales office is having twenty employees who are on the pay rolls of TML

and 18 sales executives who are on contract.

About Delhi Market

New Delhi the capital of India is growing and spreading at a very fast rate. The

budget for the next term for New Delhi is recently out and special emphasis is given on

the infrastructure development. More and more money is being pumped into

infrastructure development. It is aimed at the commonwealth games that are to be held in

the city in the year 2010.

The LPG(liberalization, privatization, globalization) of the government have led

to setting up of many industries in and around Delhi. As Delhi is not having enough

space, the entrepreneurs are looking at NCR(National Capital Region) which consists of

Ghaziabad, NOIDA (both in Uttar Pradesh) and Faridabad and Gurgaon(both in

Haryana). The employment opportunities have also increased in the Union Territory.

The domestic and international trade is also increasing steadily and Delhi being

the capital is the hub of the trading activities.

The real estate prices are also shooting up due to the expansion plans of the Delhi

Metro rail Project.

So, we can conclude that there are good growth prospects in the following sectors:

• Infrastructure

• Industries

• Real Estate


This has led to a steady rise in the demand of Light Commercial Vehicles (LCVs) in the

Delhi and NCR.

But at the same time there are certain concerning factors which are dragging the sales

figures in the downward direction and they are as follows:

• Rise in the interest rates: As the prime lending rates have increased over a

couple of months to contain the inflation by the Indian government and to slow

down the uncontrolled economic growth the interest rates for the finance of these

vehicles have also increased, and these rates are discouraging for the sales.

• New strict traffic norms in Delhi: As the Delhi government has recently

introduced strict traffic norms for the commercial vehicles and also these norms

are being implemented, it is very discouraging for the transporters and the LCV

owners.

• Slowdown in the economy: As the pace of economic growth has slowed down

and there is a slag in the overall economy the business of these customers is down

these days.

Players in the LCV segment:

• Tata Motors Ltd.

• Eicher Motors Ltd.

• Swaraj Mazda Ltd.

Out of these three tata motors is the market leader followed by eicher and swaraj mazda

is having the lowest share. All these companies are putting in great efforts to minimize

the losses taking place in sales to them. They are using different techniques to woo the

customers.


OBJECTIVES OF THE STUDY

This project is primarily meant for finding the reasons responsible for the declining TML

sales in certain models. Along with this goal there are many other goals that will be

achieved with the completion of this project and they are:

Customer perception of both Tata and Eicher in LCV market:

In this project I have met 80 LCV customers, asked them different questions

regarding their expectations from the product and their perceptions, their buying

habits. So, I have a fair knowledge about the customer behavior.

Customer’s expectation from the product

To find the reasons responsible for the declining sales of TML it is also necessary

to find find out what the customers expect from the vehicle.

Sales and promotion strategies of both the companies:

As I met all the dealers of the Eicher Motors, I learnt a lot about their sales and

promotion strategies.

Knowledge about sales force management:

As the project deals with sales activities and I have colleted information on sales

force from the EML dealers, I will be getting a first hand information about sales

force management.


CONCEPTS AND MODELS USED IN THE STUDY

During the course of my project, different theoretical concepts and models have been

applied. In this section, some of these concepts will be discussed in brief:

As this was a research based project different research based concepts are used in the

customer feedback exercise.

Research Methodology:

The design of questioner was done in following steps:

• Identification of the management dilemma:

In this step, the problem if any is identified based on which the research is to be

carried out.

• Identification of management question:

Depending on the problem faced by the organization, some management level

questions are set up.

• Identification of research question:

This consists of the identification of those questions based on which a detailed

questioner set has to be developed, to find the answers to the research questions.

• Design of detailed questioner:

To answer the research questions, a questioner has to be developed in which the

questions are easily comprehendible to the subject to whom the questions are to be

asked. These questions should be such that the subject will give true and maximum

feedback.


Research Design – Checklist

This is a checklist that should be looked at before designing any questioner

• What is the study about

• Why is the study being made

• Where will it be carried out

• What type of data required to be collected

• Where can the data be found

• What is the time frame

• What will be the sample design

• What techniques of data collection to be used

• How will the data be analysed

• How will the report be prepared or presented

In this project I mostly relied on face to face interview technique because I used to visit

every customer and personally ask questions. There were few instances when I was

unable to meet the customer so I used telephonic interview technique.


ABOUT TATA MOTORS

Tata Motors Limited is India's largest automobile company, with revenues of Rs. 24,000

crores (USD 5.5 billion) in 2005-06. It is the leader by far in commercial vehicles in each

segment, and the second largest in the passenger vehicles market with winning products

in the compact, midsize car and utility vehicle segments. The company is the world's fifth

largest medium and heavy commercial vehicle manufacturer.

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

breadth of India. Close to 4 million Tata vehicles ply on Indian roads, since the first

rolled out in 1954. The company's manufacturing base is spread across Jamshedpur, Pune

and Lucknow, supported by a nation-wide dealership, sales, services and spare parts

network comprising over 2,000 touchpoints.

Tata Motors, the first company from India's engineering sector to be listed in the

New York Stock Exchange (September 2004), has also emerged as a global automotive

company. In 2004, it acquired the Daewoo Commercial Vehicles Company, Korea's

second largest truck maker. The rechristened Tata Daewoo Commercial Vehicles

Company has already begun to launch new products. In 2005, Tata Motors acquired a

21% stake in Hispano Carrocera, a reputed Spanish bus and coach manufacturer, with an

option to acquire the remaining stake as well. Hispano's presence is being expanded in

other markets.

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

solutions, construction equipment manufacturing, auto finance, automotive vehicle

components manufacturing and supply chain activities, machine tools and factory

automation solutions, high-precision tooling and plastic and electronic components for

automotive and computer applications, and automotive retailing and service operations.


INDUSTRY OVERVIEW OF LIGHT COMMERCIAL VEHICLE SEGMENT

The fortunes of the commercial vehicles (CV) industry are closely related to the general

economic conditions prevailing in a country. The demand for transportation is directly

proportional to the growth of the economy, mobility of population, and other related

factors. The industry growth has been cyclical in the past few years and has displayed a

strong linkage with the level of economic activity in the past. The financial performance

of the CV players has been volatile and is affected by the economic cycles to a large

extent. During periods of high strong growth rate in gross domestic product (GDP) and

index of industrial production (IIP), and the increase in the demand for freight, CV sales

have increased significantly. Besides economic expansion, replacement of vehicles is

another factor that affects the CV growth. With the transportation industry being

fragmented with small operators estimated to account for 65% of the fleet, the low

financial capacity of principal buyer was the reason behind low replacement demand.

India’s CV sales have exhibited a strong growth in sales during FY2005-07. Domestic

CV sales increased 37% (yoy) during H1FY2007 (April-September 2006), as compared

with increases of 10.1% during FY2006, and 22.4% during FY2005. While sales of

medium &heavy commercial vehicles (MHCV) increased 39.9% (yoy) during

H1FY2007, sales of light commercial vehicles (LCVs) increased 32.9% (yoy). The need

to replace the aged fleet against a backdrop of low interest rate regime led to a strong

replacement demand. Besides cost and availability of finance, government policies on

emission, overloading and scrapping of vehicles also influence replacement demand.

Better replacement demand on account of the stipulation on the age of vehicles entering

select cities and better operating economics of new trucks are the major factors

supporting healthy demand growth for CVs in the past four years. CV sales volumes in

the domestic market have also been driven by easy access to low cost finance and entry

of new truck financing companies, increased momentum in highway construction and

better road conditions, and better operating economics of new trucks (given that the

diesel prices continued to rise but the competitive pressures restricted the increase in

freight rates).


Following are some of the figures for the production and sales of the LCVs in India:

Automobile production trend

Category 2005-06 2006-07

Light Commercial Vehicles 171788 225734

Automobile domestic sales

Category 2005-06 2006-07

Light Commercial Vehicles 143569 192282

Table 1

(source :Society of Indian Automotive Manufacturers)


ABOUT THE COMPETITOR EICHER MOTORS LIMITED

Eicher Motors, was founded in 1982 to manufacture a range of reliable, fuel-efficient

commercial vehicles of contemporary technology. The unit manufactures and markets

commercial vehicles with Gross Vehicle Weight (GVW) ranging from 5-25 tons.

Today, Eicher Motors is one of the leading manufactures of commercial vehicles in India

with a 33% market share in the 7T-11T segment. The success and growth of this unit is a

result of various customer-driven strategies. The manufacturing facility is situated in

Central India – Pithampur, Madhya Pradesh. Eicher Motors has stepped into the Heavy

Commercial Vehicle segment with its state-of-the-art HCV, the "Eicher 20.16", the first

commercial vehicle designed and developed indigenously.

Eicher Motors functions through a strong three-tier service network consisting of

authorized distributors, service centers and company trained private mechanics. The

vehicles are sold and serviced through a network of over 576 Authorized Contact Points

all over India, supported by service centers and over 4500 company trained private

mechanics, which are close at hand on all major highways throughout India to

provide initial "first aid" to the vehicles if required.

In 1986, Eicher Motors entered into a technical and financial collaboration with

Mitsubishi Motor Corporation of Japan to manufacture the Canter range of vehicles. The

technical assistance agreement with Mitsubishi ended in March ‘94 after successful

transfer of technology and on achieving total indigenisation with only a few parts sourced

globally.

Eicher Motors has acquired formidable expertise in designing and developing

commercial vehicles. It has a world-class R&D centre manned by a team of brilliant

engineers and equipped with latest Computer Aided Design (CAD) and Computer Aided

Engineering facilities like NASTRAN, FEM analysis packages. Leveraging its in-house

expertise, this unit has successfully developed a wide range of commercial vehicles to

meet varying customer needs. The product range includes Trucks : Eicher 10.50, Eicher

10.75, Eicher 10.90, Eicher 11.10, Eicher 20.16 & 30.25; Buses: Eicher Skyline, Eicher


Cruiser and Eicher School Bus range of buses. Besides the basic models, it offers over 85

models of ready-to-use custom-built vehicles for various specialized applications. Eicher

Motors’ products have been well accepted in the market. This is also demonstrated by

significant sales of its commercial vehicles in export markets where the company

competes with reputed international brands.


THE METHODOLOGY AND TIME FRAME OF THE PROJECT

The project was completed in following phases:

1) Preparation of questionnaire: After finalizing the goals and objectives and

goals the questionnaire is prepared accordingly. The questions are such that they

will satisfy both qualitative and quantitative aspects of the research. There are

three sets of questionnaires made for customers, dealers and company office

respectively.

2) Meeting all the competition dealers: After preparing the questionnaires, firstly I

met all the competition dealers. From there I got information about their

respective sales force their modus operandi and major market pockets of the

competition customers.

3) Meeting the customers: In the last phase major market pockets were identified.

Then I went to these markets and met different customers and took their feedback.

4) Analyzing the data: To analyze the collected data draw inferences.

5) Some recommendations and suggestions: After drawing the inferences I

suggested some corrective actions to be taken by the company.

Methodology of carrying out customer feedback exercise

In this exercise, first a questioner was prepared in which all the aspects of sales and the

product were taken into consideration while preparing them. Sample questions can be

found in the appendix.

After designing questions, major areas in south Delhi in which sales of eicher is

comparatively higher were identified.

After identifying the sample area, samples (in this case, customer) were chosen randomly

and feedback was taken.

The survey was conducted on customers having different number of fleet sizes, so that

feedback from all levels of customers is obtained.

In this research the sample size was 70, i.e. the feedback was taken from 70 customers

from south Delhi. An effort was made while selecting the sample that the customer

should have at least one vehicle of eicher.


The whole customer feedback exercise was carried out in following steps:

1) Developing the questioner

2) Identifying the major market areas for LCVs

3) Going to those respective areas and meeting the customers and taking their

feedback.

4) Analyzing the collected data

5) Drawing inferences

The research was carried out in the following areas of south Delhi:

1) Okhla phase1

2) Okhla phase 2

3) Okhla phase 3

4) Mahipalpur

5) Bhogal

6) Khanpur

7) R.K.Puram

8) Mehram Nagar (Palam)

9) Badarpur

Schedule:

The duration of the project is seven weeks. Questionnaires were prepared in the first

week. In the second and third week I met all the competition dealers. In the next three

weeks I visited different markets in south Delhi and took feedback from the customers of

both TML and EML. In the last week all the analysis and documentation work will be

done.


DEALERS OF EICHER MOTORS LIMITED (EML)

As EML sales are done through dealer points, it was very important to meet all the

dealers of EML to get information on its sales and sales force management. First a set of

tailor made questioner was prepared to extract as much information as possible from

them. The information is very crucial to find the reasons behind the actual sales of the

EML. Complete functioning of the EML dealers is discussed in this section. The

questions prepared can be found in appendix.

All the questions helped me to know the complete mechanism of the sales process

of EML dealers.

Eicher is having four dealers in Delhi and NCR region. One in north delhi , one in

south, one in Faridabad and one in Ghaziabad.

Though there is competition between the dealers, their areas are well defined and mostly

they operate in those areas only.

The functioning of Eicher dealers and TSS is almost same. Both tata and eicher uses

following methods to attract customers:

tele marketing

personal selling

discounts

test rides

free gifts

free service camps

loan festival


The basic difference between the two companies lies in the most important factor, and it

is their sales force. After conducting dealer survey following comparison is made

between the two companies:

A comparison between tata motors and eicher motors on the basis of some sales

parameters

parameters Tata motors Eicher Motors

Number of FSE* 16 27

Experience of

FSE*

1.5 yrs 3 yrs

Salary of FSE* Rs.5000 fixed +

incentives#

Rs.7000 fixed + incentives# + allowances

(telephone and travel)

Discounts on

vehicles

Fixed and less compared

to Eicher

Variable and negotiable with customer

* Field Sales Executives

# the incentive slabs for both tata and eicher are almost same

Table 2

Analysis

Above table clearly shows that sales executives of Eicher motors are more in number,

they have more salary and they are more experienced than those of Tata motors. The

discounts given by Eicher on vehicles are also more than that of Tata motors.

So, it can be inferred that eicher is spending more than tata on sales activity.

Following are the sales figures obtained from dealers of EML and TSS

March 07 sales April 07 sales % change

Tata 135 92 -32%

Eicher 67 61 -9%

Table 3

The figures clearly indicate that Tata motors is losing out to Eicher motors in Delhi in

terms of sales growth.


CUSTOMER FEEDBACK

Taking customer feedback is also one of the important parts of this project.

Right from the inception and design of the product to after sales service of the product,

all the activities are designed by keeping customer and his needs in mind. So , it becomes

necessary to know the perception of the customers about the product and their told and

untold expectations from the product. The performance and the success of the company

can be judged by taking the feedback of its customers. By meeting the competitor’s

customers, we can find the shortcomings of our company by taking their feedback.

The chart below shows the fleet sizes all the seventy customers

customer profile

26, 37%

21, 30%

9, 13%

14, 20%

1 to 5 LCV/ICVs

6 to 10

11 to 15

15 +

Fig 1


RESEARCH FINDINGS BASED ON CUSTOMER FEEDBACK

Now, we will discuss the findings of each question.

• Which newspaper do you read?

Fig 2

Analysis

The result clearly shows the popularity of the newspaper Punjab Kesri among the

transport companies.

This result suggests that more advertisements should be given in Punjab Kesri followed

by Dainik Jagran because they both have largest viewerships.


• Are you satisfied with the service provided by the companies?

What is the response time?

For tata motors:

Fig 3

For Eicher Motors:

Fig 4

not satisfied65%

O.K but not good19%

fully satisfied16%

not satisfied O.K but not good fully satisfied

not satisfied47%

O.K but not good30%

fully satisfied23%

not satisfied O.K but not good fully satisfied


Analysis

The above feedback suggests that most of the customers (65%) are not satisfied with the

after sales service of tata motors as compared to the service of eicher motors in which

30% customers are saying that the service is O.K. for eicher. It means that in the recent

times some problems might have cropped up in the service section.

Here the emphasis is given on the response time of the service and not on the quality of

the service. As far as the quality of the service is concerned, it is still good according to

most of the customers.

As the number of LCV’s is increasing on the roads, the servicing facilities should also be

increased in the same proportion, so that the customers don’t have to wait long for the

vehicle servicing.

Also more importance should be given to big customers and his vehicle should not be

kept waiting. This will ensure stronger bond between the company and such big

customers who are having a great buying potential.


• Customer feedback on the importance of different attributes

In this feedback the customers were told to rank the attributes viz. Vehicle Finance,

Vehicle sturdiness and Reliability, Technical Specification, Mileage and After sales

service in descending order from rank 1 to rank 5.

The charts below give the count for each rank for each attribute. These charts will tell us

the importance of each attribute in descending order.

For attribute ‘Vehicle Finance’

Fig 5


For attribute ‘Vehicle Sturdiness and Reliability’

Fig 6

For attribute ‘Technical Specification’

Fig 7


For attribute ‘Mileage’

Fig 8

For attribute ‘After Sales Service’

Fig 9


Analysis of the above feedback:

It is clearly evident from the charts above that for the rank 1 the maximum number of

counts are for the attribute ‘vehicle finance’. This shows us the importance of vehicle

finance for the transport companies

For rank 2 most number of counts are for the attribute ‘vehicle sturdiness and reliability’.

So we can infer that for most of the customers ‘vehicle sturdiness and reliability’ is the

second most important attribute.

For rank 3 most number of counts are for the attribute ‘mileage’ so mileage is the third

most important attribute.

Fourth important attribute is ‘after sales service’ with 44 counts.

Finally the fifth rank attribute is ‘technical specification’.

So if we arrange all the attributes in descending order of their importance, it will look as

following:

1) Vehicle Finance

2) Vehicle Sturdiness and Reliability

3) Mileage

4) After Sales Service

5) Technical Specification


• What are the industries you operate in? (Captive/Market load)

types of customers

Captive23%

Market Load77%

Captive Market Load

Fig 10

Analysis

In the current market scenario, it can be seen that most of the customers are ‘Market load’

type. This suggests that no businessman wants to maintain his own fleet of vehicles but it

is convenient for him to give contract to some transport company. So, major focus should

be given to ‘market load’ type.


• U.S.P of 11.10 of Eicher motors

Fig 11

Analysis

The main reason responsible for the growing sale of Eicher 11.10 is its ‘cargo

dimension’. The length of its body is longer than all the other vehicles in its segment.

Many customers also told that its maintenance costs are also low and it is very sturdy as

compared to its counterpart tata 1109.

Most of the customers are of view that in the small LCV segment, Tata is better

than Eicher, while in the large LCV segment Eicher is better than Tata.

Customers told that maintenance required for the tata 1109 is more as compared

to eicher 11.10 but the costs associated with the maintenance of tata 1109 are less

as compared to that of eicher 11.10

U.S.P of 11.10

cargo dimension81%

Its strength and sturdiness

19%

cargo dimensionIts strength and sturdiness


Customer feedback on some technical problems

The chart below shows the most common technical shortcomings that the customers feel

should be addressed by Tata Motors for the model 1109 and 909(ICV)

Problems in Tata 1109

27

1923

32

0

5

10

15

20

25

30

35

heavy cabin position of theStephanie

exposed battery higher maintainencecosts

problem

nu

mb

er o

f cu

sto

mer

s

Fig 12

Analysis

The above chart shows that ICV models of Tata motors is plagued by some major and

some minor problems that needs to be addressed.

Heavy Cabin:

Cabin of Tata ICV is heavy compared to that of Eicher and it becomes difficult for the

customers to service the vehicle.

Position of Stephanie:

In Tata the Stephanie is at the back of vehicle and it becomes difficult for customers to

remove the Stephanie and on the other hand in eicher it is located at the side and easier to

remove.

Exposed Battery:

In tata, the battery is exposed and is prone to theft while in eicher it is inside the body and

can’t be easily stolen

Higher Maintenance costs:

Maintenance costs for tata are higher as compared to eicher.


• Number of customers planning to buy new vehicle

Fig 13

Analysis

It is evident from the figure that very few customers out of this sample are interested to

buy a new vehicle over a period of next two months and only those customers are

interested who have some urgent contracts at hand.

Customers planning to buy over a period of next 2 months

9, 13%

61, 87%

plans to buy no plans to buy


RECOMMENDATIONS

Service centers:

From the customer feedback, it is evident that TML needs to look at the issue of

after sales service immediately.

Either the capacity of the current facility should be increased or some new

facilities should be created. One more option is to identify some good private

workshops and to authorize them for the servicing and repair of tata vehicles.

Tie-ups with some insurance companies:

As the prime lending rates are increased, the interest rates could not be brought

down. From the feedback, it can be seen that for most of the customers ‘vehicle

finance’ is the most important factor, but as the interest rates could not be brought

down, it would be better to bring down the initial investment (which includes

premium of insurance also) while buying a vehicle. So, some tie-ups with

insurance companies should be made so that the premium for insurance can be

reduced. Eicher has done it successfully with ICICI Lombard.

Some modifications in technical specifications:

Many technical design issues were raised by the customers as shown in the figure

and they need to be addressed by the company.

Adopting new techniques to attract the customers

As the market is not good right now for the LCVs some newer techniques should

be introduced to attract the customers. For doing this, budget on promotion

activities should be increased immediately. For example, increasing the frequency

of organizing customer meets and organizing customer meets at some good

hotels.


Increasing the expenses made on sales and promotion action activities:

From the information obtained from all the dealers, it was found that EML spends

more on the promotion and sales activities. They always keep their customers

happy by giving them gifts and schemes from time to time. So, TML should also

spend more on promotion activities.

Increasing the number of sales executives:

It was also found from the survey that the number of sales executives of all the

EML dealers combined is significantly higher than that of TML. Due to larger

number of sales executives the EML sales executives are in very close contact with

the customers than their counterpart TML. Thus, TML should increase their sales

force.


LIMITATIONS OF THE STUDY

o The feedback was taken only from south Delhi customers, so if there are any

regional trends of the buying patterns, those trends could not be figured out.

o The feedback from the customers can not be taken as final without any cross

verification.

o The recent strict norms incorporated by Delhi police has had a negative impact on

the feedback given by customers.

o Budgetary constraints.


SCOPE OF FUTURE IMPROVEMENTS

There is always a scope of improvement in every process and the SIP that I have

undergone is no exception to it. Though the project went on smoothly and fulfilled its

purpose there were some lacunas in it which could be removed.

Time frame

Had the time frame be more than what it was, sample size would have been more

and the results more accurate. Also the effect of regional trends would have been

nullified further making the results accurate.

Some free gifts for all the sample customers

If some free gifts are given to the sample customers they are more interested in

giving feedback and answering the questions. Thus it increases the accuracy and

also spreads the goodwill of the company.

Verification mechanism

Verification mechanism verifies the feedback given by the sample and it should

be employed.


CONCLUSION

Tata group is a century old group and well known for its fair practices. Right from salt to

the giant cranes, you name it, tata is into it. Over these years tata has earned a huge

amount of brand equity and tata has built a solid trust in the minds of customers.

All these factors have made it comparatively easy for tata motors to sell their products.

TML has to spend less as compared to EML on sales activities because tata’s brand value

is more than eicher’s.

The major finding in this feedback is the fact that eicher puts in more efforts and money

in its sales activities as compared to tata. The popularity of eicher is growing among the

customers and it is a matter of concern for tata. Instead of waiting for eicher’s market

share to grow tata should immediately take the action to counter its competitor’s efforts.

The findings of the research are totally based on the feedback of the customers and some

of the feedback could be wrong.

This summer internship program (SIP) was a good learning experience for me. It gave me

a firsthand knowledge of the sales mechanism of an automobile company. Sales is most

important department and the revenue of the company depends heavily on its sales

department. SIP is important to bridge the gap between the professional world and

academic institutions.


BIBLIOGRAPHY

References:

1) Sales management by Kundiff

2) Research Methodology by Shahajahan

3) Marketing Management by Kotler

4) www.eicher.com

5) www.tatamotors.com


http://www.eicher.com/

APPENDIX

The questioner prepared for customers was as follows:

CUSTOMER PROFILE:

Survey : - STUDY OF ‘ LCV’ MARKET IN DELHI

CUSTOMER PROFILE:

• Customer Name:

• Mobile number:

• Customer Address:

• Experience in this business or Establishment year: -

• Number of LCVs:

Tata: Eicher:

Models: - ……..…………. ………………….

Reason to ask: - To generate important customer database for TML to use in

promotional activities & for reference..

• Which newspaper/magazine do you read?

Reason to ask: - To know the favorite influential media source for that customer

for effective advertising.

• Are you satisfied with the service provided by the companies? What is the

response time?


Reason to ask; - To know the various issues & satisfaction level of customers

from the whole selling procedure which includes counseling for vehicle selection, No.

of days taken in completing official formality, hidden costs (if any), helping in

obtaining finance e.t.c

• Have you purchased any new vehicle recently? IF YES, which all models and

reasons for this choice?

• Any buying plans in the near future and what is the preferred model?

Reason to ask: - To know the current need, taste of customer & brand

preference about vehicle purchasing & reason for buying any particular model.

U.S.P of product: -

Design

Price

After sale services

Finance schemes

Low Maintenance expenses

Easy spare parts availability

Others

……………………………………………………………………….

……………………………………………………………………….

……………………………………………………………………….

Reason to ask: - To know the most striking & appealing feature of the Vehicle to affect

the buying decision.

• What are the areas to improve in decreasing preferential order?

• What is the most important aspect of a vehicle you feel, in descending order?


Reason to ask: - To know the actual feedback & future expectations of

customers for continuous technical up gradation of TML’s vehicle & to know

weakness in competition product to attack.

These were the questions asked to each customer.

Following was the questioner formulated for the dealers:

MARKET COVERAGE PATTERN (FOR DEALERS):

• Dealer name:

Proprietor Name & Ph. No.:

General Manager: Name & ph. No. :

• Is telemarketing used? If yes, what is the frequency of calling?

• Is personal selling done? If yes, how is it done?

Area wise

Product wise

• What is the size of your sales force?

• How is the sales force distributed in the market?

• What are the discounts/schemes given to customers? (fixed/variable)

• Frequency of test rides and demonstrations in a month and in what areas.

• Frequency of participation in exhibitions.

• Who are your twenty major customers (ph.nos. and address)?

WHAT ARE THE MAIN MARKETS / POCKETS:

What are the main potential areas where the sales are significantly higher than other

areas?

PHYSICAL PRESENCE / INFRASTRUCTURE:


• Number of branches and their locations?

• Number of staff in each branch?

• What is the salary and incentive structure for sales staff?

• What is the number of service centers and how are they distributed?

• What is the volume of sales (for 11.10, 10.95 and 1109, 909)?

• What is the percentage breakup of sales in Delhi and NCR (Faridabad, Gurgaon,

NOIDA and Ghaziabad)?

Let us discuss some of the important questions from the above questioner:

• What is the size and profile of sales force?

As the sales executives form an interface between the company and the customer and

they are the face of the company, they play a very important role in the sales of its

products. So the size of the sales force and its profile matters a lot for the sales. Profile

means details of the sales force like his qualification, his age and most importantly his

experience.

• What are the discounts/schemes given to customers? (fixed/variable)

This is also one of the most important factors that influence the sales as the customer is

always looking for more discount and schemes on the products that he intends to

purchase. When all the other factors are similar for the products of both the companies,

customer will always prefer the product with more discounts and schemes.

• Who are your twenty major customers (ph.nos. and address)?

This question is particularly important for the regional sales office, so that the executives

can contact those customers and know the reasons for not purchasing their products. The

executives can also attract those customers and bring them to their side.

• What is the salary and incentive structure for sales staff?


A good sales executive will always look for a higher salary and incentives all the time.

The company offering higher salary and incentives will get the better lot of sales people.

• What is the number of service centers and how are they distributed?

After sales service have gained a prominent importance in the recent past for the success

of product so it is important to know the number of service centers and the quality of the

service given by the company.

• What is the volume of sales?

The volume of sales is the outcome of all the efforts putin by the dealer, so it shows us

the efforts put in by the dealers and their effectiveness.


Documents

LCV Market