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MK-101Sec-F Group-4
Executive SummaryHighly anticipated and hyped automobile debut in
India“The people’s car” or the “ 1 Lakh car” promising
safety and comfort Planned to be launched in gasoline-powered version
followed up by diesel versionsHighly fuel efficient – 22 to 26 kmplBacked up by the big brand image of Tata Motors, the
first Indian manufacturing company to be listed on the NYSE
Plans to target masses focusing on the lower income segment
Marketing Plan• Market Identification
• Providing Value
• Communicating Value
Market Identification Customer Segmentation/ Market Selection Income distribution
Middle-Income group (2-5 l.p.a.) Low-Income group (upto 2 l.p.a.)
Family-Size distribution Small family (2-4 people)
Potential substitutes Used cars 2-wheelers
Recommendation:More markets can be tapped
E.g., Youth, Old and retired people, Individual members of the family
Market Identification Customer Segmentation/ Market SelectionYouth Market Research Results
who buy
who doesn’t
Market Identification Value Positioning
Touted as the “one-lakh car” and “people’s car”The most fuel-efficient car
Market Identification Market attractiveness
Porter’s 5 forces
Marketing Plan• Market Identification
• Providing Value
• Communicating Value
Providing Value
Providing ValueProduct DesignDesign built from scratch – No compromise on
components’ qualityStreamlined modular design – components serving
multiple purposesNo frills - AC, tachometer, airbags, etc. not provided in the
base modelMore Boot/seating space compared to other ‘small’
carsGreen car – complying with stricter emission norms
Recommendations: Offer more customization
Providing ValuePricing – How Nano reached the 1 Lakh figure?Design built from scratch – No legacy costsCut down on featuresMulti function parts usedReverse auctioning used90% components outsourced; 75% of them single sourced.Low-rejection rate of parts– Warranty costs went down
tenfoldLow dealer margins (2-3%) and low contribution margins (15%)Taxes – 12.5%
Final on road price = Rs 1,30,000 – cheapest car in the world
Providing ValueSupply ChainSuppliers and Vendors
Long-term volume contracts Majority of components outsourced/single-sourcedCo-location of vendors
Manufacturing/Assembly/Processing facilityInitially 1 plant to be followed by addition of 3 other
Providing ValueSupply Chain…Distribution Network
Different distribution channels – car shipped as kitsEstablished distribution network – 200 existing Tata
Motors dealersRecommendation:Increase number of dealers
Service OutletsCurrently, the customer service index of TATA Motors is
below market average.Recommendation:Increase in number of service outlets
Marketing Plan• Market Identification
• Providing Value
• Communicating Value
Communicating ValuePromotionRadio FMPublicity event in MallsMore focus on safety – risks involved with two
wheelersProjecting image of Green TechnologyEncouraging use in rural areas