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To study the marketing strategy a) IntroductionOf the New Tata Nano The introduction of the Nano received media attention due to its targeted low price. The Financial Times reported "If ever there were a symbol of India’s ambitions to become a modern nation, it would surely be the Nano, the tiny car with the even tinier price-tag. A triumph of homegrown engineering, the $2,200 (€1,490, £1,186) Nano encapsulates the dream of millions of Indians groping for a shot at urban prosperity." The car is expected to boost the Indian economy, create entrepreneurial-opportunities across India as well as expand the Indian car market by 65% The car was envisioned by Ratan Tata, Chairman of the Tata Group and Tata Motors, who has described it as an eco-friendly "people's car". Nano has been greatly appreciated by many sources and the media for its low-cost and eco-friendly initiatives which include using compressed-air as fuel and an electric-version (E-Nano Tata Group is expected to mass-manufacture the Nano, particularly the electric-version, and, besides selling them in India, to also export them worldwide. Critics of the car have questioned its safety in India (where reportedly 90,000 people are killed in road-accidents every year), and have also criticized the pollution that it would cause (including criticism by Nobel Peace Prize winner Rajendra Pachauri). However, TataMotors has promised that it would definitely release Nano's eco-friendly models alongside the gasoline-model The Nano was originally to have been manufactured at a new factory in Singur, WestBengal, but increasingly violent protests forced Tata to pull out October 2008. (See Singur factory pullout below.) Currently, Tata Motors is reportedly manufacturing Nano at its existing Pantnagar
( Uttarakhand ) plant and a mother plant has been proposed for Sanand Gujarat.]The company will bank on existing dealer network for Nano initially. The new Nano Plant could have a capacity of 500,000 units, compared to 300,000 for Singur. Gujarat has also agreed to match all the incentives offered by West Bengal government. CostCuttingfeatures The Nano's boot does not open, instead the rear seats can be folded down to access the boot space It has a single windscreen wiper instead of the usual some exterior parts of it are glued together, rather than welded. It has no power steering. Its door opening lever was simplified. It has 3 nuts on the wheels instead of the statutory 4 nuts. It only has 1 side view mirror Price Tata initially targeted the vehicle as "the least expensive productioncar in the world"aiming for a starting price of 100,000 rupees or approximately US$2000 (using exchange rate as of March 22, 2009)6 years ago, despite rapidly rising material prices at the time As of August 2008, material costs had risen from 13% to 23% over the car’s development, and Tata faced the choice of: Introducing the car with an artificially low price through government subsidies and taxbreaks Forgoing profit on the car Using vertical-integration to artificially boost profits on cars at the expense of their materials industries Partially using inexpensive polymers or biodegradableplastics instead of a full metalbody raising the price of the car option. Modelversions At its launch the Nano was available in three trim levels: The basic Tata Nano Std priced at 123,000 Rupees has no extras; The deluxe Tata Nano CX at 151,000 Rupees has air conditioning;
Bigger 3-cylinder engine. Yellow colour Taxi Version.000 Rupees has air conditioning. The base model will have fixed seats. except for the driver's. anti-lock braking system (ABS) and meets European crash standards and emission. The discontinuation of Qualis to launch the Toyota Innova proved advantageous to Tata Sumo. It had stiff competition with new Sumo Victa has been portrayed as a family lifestyle vehicle. which will be adjustable. power windows and central locking The Nano Europa. while the deluxe and luxury models will get air conditioning and body coloured bumpers.000 Rupees has air conditioning. as it is rugged and affordable. European version of the Tata Nano has all of the above plus a larger body.The deluxe Tata Nano TX at 135. b)Modification in tata sumo New Tata Sumo The Toyota Qualis and now competes with Chevrolet Tavera. but in fact is a . The luxury Tata Nano LX at 172. It has been the favorite choice for cab owners. The Tata Sumo has been enjoying its position in the MUV market since 1994. The Sumo has seen a series of changes in terms of refinement in this decade.
89 bhp turbo diesel 3. DI CX 7/9/10 Str. 67 bhp diesel 2. both internal and external.2L DiCOR In-line 4.0L Inline-4.2-L direct injection common rail (DICOR) engine. DI GX 7/9 Str. Tata's latest three variants under the 'Sumo Grande' category are LX. Refinement. 69 bhp diesel 2. DI EX 7/9 Str. and LX 10/7 Str. The beefy & bony structured sedan has the capacity to deliver maximum torque of 140Nm @ 1800 .0L Inline-4. with some cosmetic changes. The Indigo Dicor from Tata Motors has been . The Victa DI variants get a 3-litre turbocharged diesel engine. The Sumo comes in nine Victa variants: CX 10/7 Str. EX 10/7Str. The GX and GX TC variants get a 2-litre turbocharged diesel engine that generates 89 bhp. EX and GX available in 2-seater. DI LX 7/9 Str. 118 bhp diesel Available Transmissions 5-speed Manual Transmission (MT) c) New version of Indigo. except the Victa DI variants.3000 rpm. GX TC 7 Str. All variants. is evident across the variants. GX 7 Str. Sumo Grande boasts of a powerful 2. Indigo Dicor Dicor Variants The DICOR (common rail diesel) version of Tata Indigo is available in two variants which has already hit the bull's eyes. 7seater and 8-seater configurations. are powered by a 2-litre Inline-4 diesel engine.0L Inline-4.carryover of the old Sumo. Quick Take * Fuel Economy Available Engines 9/14 kmpl (city/highway) 2.
made apt for Indian roads especially with its driver & co passengers oriented positive attributes such as : Anti-submarine front seats New electronic instrument cluster with engine RPM meter Rear Seat with double folding backrest Video player with MP3: with headrest mounted LCD screens 1. power .torque .power-70 PS@4000 rpm Max. & Benz silver as the new pattern for console & AC fascia.4-litre as rail diesel engine Indigo LX Dicor Tata Indigo LX Dicor on the other hand features manually operated with chrome strip outer rear view window. Torque . black dials.85 PS @ 5500 rpm Max.13.5 kgm @ 2500 rpm Dicor 32-bit microprocessor based 1396 cc DICOR(Direct Injection Common Rail) 16-valve engine with Dual Over Head Camshafts and a Variable Geometry Turbocharger(VGT) Max. Power 70 PS @ 4500 rpm Max. ENGINES Petrol 1396 cc MPFI Petrol Engine with 32-Bit Microprocessor Max.140Nm@1800-3000 rpm . It has no mounted LCD screens. black dials with chrome rings & star check as the new pattern for its console&ACfascia. Indigo LS Dicor Tata Indigo LS Dicor features manually operated outer rear view mirror. torque .12 Kgm @ 3500 rpm Diesel Turbo-charged 1405 cc Indirect Injection Engine with Intercooler Max.
the difficulties faced in cracking these markets pale before the huge potential they offer a company. is worki ng on strategies to make inroads into these markets. or NCAER.e) TappingofRuralMarkets According to the National Council for Applied Economic Research. at 1999 prices. and going ahead. the contribution is likely to grow. the size of the rural economy will be about Rs16 trillion in 2012-13 compared with Rs12 trillion in 2007-08. 60 per cent of which runs on cash. around 55% come from rural India. 64% of the total expenditure and one-third of the total savings. Noticing this huge potential Tata motors now plans to tap the rural market. The share of non-farm income will be about two-thirds of the rural economy by 2012-13. 56% of the national income. . So. Of the total sales (of consumer goods). NCAER data suggests that in real terms. rural India accounts for 70% of India’s population. Tata motors ltd.
Non users can try a product which may leads to regular sales. Coupons have been used since 1895. Price-Off 3. availability of goods etc. It is mostly used by packaged goods. To boost up the sales not only manufacturer but retailers personally can also used. Freebies 4. A coupon leads to price reductions so as to encourage price sensitive customers. It is worthwhile to use coupon as a promotion tool because data shows that market for packaged goods increased from 16 billion in 1968 to 310 billion in 1994.Measures for improving marketing procedures There are so many tools or technique available to the marketers for achieving objective of sales promotion. These tools should be used considering all other factors affecting such as cost. time. Scratch Cards 5. 2. Coupons 2. Price-off: . These tools are as under… 1. Coupons: Coupon is the oldest and most widely used way of sales promotion. competitors. Extra Quantity Let’s have look at each tool… 1. Bundling Offer 7. Lucky Draws 6.
At different times.A price-off is simply a reduction in the price of the product to increase sales and is very often used when introduction a new product. scratch-and-win or instant game) is a small token. 5. scratch game. big and small companies often give away prizes and money which is too good to be true. Not only that but it also cause large increase in sales volume. Price-off reductions are typically offered tight on the package through specially marked price packs. The definition of freebies is products or services given away for free at no cost to the consumer. but can be scratched off. Well that’s the definition we came up with. 3. E. Scratch Cards A scratch card (also called a scratch off. scratch ticket. Krack Jack offers 30% Price-off. Freebies Freebies are a popular form of modern marketing and are some of the best things about the internet. usually made of cardboard. Often it’s in the pursuit of more customers or a larger fan base and it often works.g. where one or more areas contain concealed information: they are covered by a substance that cannot be seen through. scratchie. I am a bargain freebie shopper. Price-off is the most preferred sales promotion technique because consumers response very positively to this scheme. A reduction in price always increases sales but the use of this technique should be carefully considered in the current market situation. pretty much going for any free product and informing everyone about it. 4. scratcher. Bundling Offers . scratch-it.
A bundle of products is sometimes referred to as a package deal or a compilation or an anthology. preferences. in the cable television industry (for example. A target market can be in any of the stages of buying hierarchy i. This strategy is very common in the software business (for example: bundle a word processor. marketer must know who their target market is. and a database into a single office suite). Each stage defines a possible goal of promotion. otherwise there is no use of all effort because it leads to no where. knowledge. .e. and in the fast food industry in which multiple items are combined into a complete meal.Product bundling is a marketing strategy that involves offering several products for sale as one combined product. Factors Influencing Consumer Oriented sales promotion: Mainly four factors should be taken into account while determining the sales promotion program. basic cable in the United States generally offers many channels at one price). liking. Target Market: While doing sales promotion. awareness. a spreadsheet. conviction and purchase. > Target market > Nature of product > Stage of product life cycle > Budget available for promotion 1.
. Stage of product Life Cycle: Sales promotion strategies are influenced by the life cycle of a product. When the unit price is low the manufacturer as well as the customer has low risk but he can get the benefit of mass marketing. Therefore. Nature of the product: There are various product attributes which influence sales promotional strategy. 3. When a new product introduced. competition intensifies and more emphasis is placed on sales promotion to increase its sales. Budget Available for Promotion: The funds available for promotion are the ultimate determinant of the promotional programme. and Budgeting by objective. 4. Later.2. Sales promotion scheme differ for products like its durability. A business with ample funds can make more effective use of sales promotion programme than a firm with limited financial resources. prospective buyers must be informed about its existence and its benefits and middlemen must be convinced to stock it. if a product becomes successful. mass marketing requires mass sales promotion schemes. The budget for sales promotion can be prepared by the following methods… Percentage of Sales Fixed funds available for sales promotion Following the competition. perishable goods etc.
Maximum customers’ ranked price-offs as number one or two. Preference of Schemes: Price off was the most preferred type of scheme. Eighty per cent of the respondents indicated that they would not continue. it could be inferred that promotions in this category (low involvement products) might encourage trial and brand switching but not long term loyalty. Long-term impact In order to understand ability of the promotions to increase long-term sales.Sales Promotion from the Consumers point of view Willingness to buy on sales promotion offer Sixty per cent of the sample did not show willingness to buy a brand due to promotion while 30% showed willingness and 10% were not sure. Ability to induce trial Forty per cent of the respondents had said that sales promotion had the ability to induce trial which reinforces the above inference. Thus. these groups might be lured through innovative and lucrative sales promotion offer. respondents were asked about continuity of purchase of a brand after the withdrawal of promotion. This indicates that when 30% showed willingness and 10% consumers who were not sure. . But 20% said they would.
their perceptions regarding providing consumer behavior are likely to be accurate. Findings from retailer and consumer perception studies. This indicates that consumers believed that companies were undertaking such activities only for their own benefit and not for the benefit of consumers. Perceptions regarding underlying company motivations On tapping perceptions’ regarding underlying company motivations for sales promotion.Perceived Quality: Majority of respondents had a perception that the quality of the promoted brands remained the same during promotion. It can be inferred that promotions were not leading to negative brand quality perceptions. Such inputs from the retailers would be useful to companies. . It is found that some customer strongly preferred to buy their regular brand and said that sales promotion would not weaken their loyalty towards the brand. it is evident that there was a matching of perceptions regarding nature of scheme (price offs as most preferred type of scheme mentioned by consumers and retailers’ perceptions about consumer preferences). While providing value to customers” and “To reinforce company image” were ranked lowest. Since retailers observe consumers in store behavior were frequently and directly. “to increase sales” was ranked highest followed by “to attract switchers” and “to sell excess stocks”. while some of them felt that it was inferior than before.
Retailers’ prediction of companies’ motivation for offering sales promotion were matching with the consumer perception regarding the same. This was reinforced by the consumer survey which showed that recall in case of heavily promoted schemes on TV was found to be very high.The retailers had the perception that those schemes which were announced through mass media had better response. . Thus both viewed that companies were using sales promotion activities mainly to increase short term sales or encourage switching or selling excess stock and not really to give value benefit or enhance/reinforce brand/company image.
trade shows. Trade Oriented Sales Promotion includes dealer contest and incentives. daughter-in-law and child) was the decider of a toilet soap brand and not the Income provider (e. Premium. daughter. head of the family). in order of importance. Retailers preferred price offs the most.Trade Oriented Sales Promotion Trade Oriented Sales Promotion aimed to motivate channel member of the company and to encourage them to push company’s product. It could be inferred that visibility of information about the sales promotion activity at the point of purchase could result into the purchase of a promoted brand. trade allowances. contests. sales training programs. and other programs designed to motivate distributors and retailers to carry a product and make an extra effort to push it to their customers Sales promotion from the retailer’s point of view: Perceptions on Scheme Preference It was found that retailer perceived price offs as a better form of sales promotion activity. premium. Price offs in their opinion had relatively a greater impact compared to any other form of sales promotion activity like Bonus packs.g. then bonus pack. Point-of-purchase displays. Perceptions about Buying Roles Retailers viewed that the person who came to the shop (who may be a maid. Contests etc. son. cooperative advertising. Perceptions about their role in decision-making .
Variations in Information Flow Smaller (non-supermarket. Dealer-Retailer Dynamics .Retailer had relatively very low influence in affecting choice. margins. and sought/looked for or asked whether there were any) sales promotion schemes running on any toilet soap at the time of purchase. amenable to trying new brands. Many a times small retailers were only informed verbally about sales promotion schemes by the dealer salesmen during the scheduled weekly visits. information about sales promotion activities from the dealers. It could be inferred that visibility and awareness about the scheme were the critical success factors so that pull could be created. small format store) retailers received relatively less support compared to supermarkets in terms of servicing. Perceptions about Communications of Sales Promotion Schemes Retailers perceived that role of word of mouth and television advertising played an important part in providing information inputs to consumers regarding sales promotion activities. Perceptions about Response to Sales Promotion Offers They believed that younger age-groups were more experimental in nature.
. dealers had tendency to push unwanted stocks onto the smaller retailers. supermarkets and big retailers were pampered and given special services and given better margins and better allowances. However. In fact these retailers preferred to stock variety of brands and wanted payment for shelf and window display to increase traffic into their store.At the time of sales promotion activities.
Thus it could be inferred that company’s follow up was not adequate. Servicing during duration of Scheme In stock-out situation during the running of the sales promotion schemes. Also if additional incentive was offered it was subject to minimum performance requirement.Margins It was found that in sales promotion schemes margins varied from 6 to15% depending of the size of the retail outlet. smaller retailers had to wait for replenishment of stocks till the next scheduled weekly visit by the dealer salesman but big retailers were serviced on telephonic request for replenishment of stocks. Mostly margins were linked to size of the volumes that were ordered. This clearly indicated the disparity in treatment. bargaining power of a retailer. Nature of POP Retailers indicated that most of the POP (Point of Purchase) materials were meant for brand advertisement and not for giving information regarding the schemes. Perceptions about terms and conditions Retailers were not found to be happy with sales promotion schemes where their margins were cut on the pretext of just fast movement of inventory of the brand being promoted. Problem of left-over . quantity ordered by him etc.
This approach of the company leads to misappropriation which in turn could result in adverse brand image. leftover stock was often dismantled (cut open buy one get one free) and sold them individually as a regular soap. is recalled even today. Post Promotion Behavior Retailers observed that in most cases sales promotion scheme on a brand might encourage a buyer to switch a brand temporarily but he would revert back to original brand after promotion.A leftover stock at the end of any scheme was required to be sold by the retailers before they ordered fresh stocks. it created pull and they were more than willing to stock such brands. Handling Problems . hence there was very little awareness leading to unsold stock till 6 months. Gifts for Retailer motivation Companies at times were rewarding retailers by giving free gifts like thermos flasks or clocks if they sold more than certain quantity in a given period.V. Companies were making a half-hearted effort to motivate retailers. For example Medimix and Dettol contest was not advertised on TV. Perceptions about mass media announcements Retailers viewed that whenever sales promotion scheme was announced on TV. While Lux Gold Star which was heavily promoted on T. In case of bonus packs scheme.
Remembering each offer and handling was a problem especially for a small retailer which was often an as one-man show. .Many a time’s retailers had to handle various sales promotion offers simultaneously in a category and also across categories and there was no formal communication planning either from the dealer or the company.
Ratan Tata talked about a one millionproduction target by 2010 Consumer focus .MARKET OBJECTIVES National growth • The tata nano is a four passenger city car built by tata motorsaimed primarily at Indian market INTERNATIONAL GROWTH • Tata Motor's Nanao car is ready to start its journey on the globalroad as it displayed version of the hatchback for worldwidemarketplace. ETHICAL OBJECTIVES • Tata group had never compromised on ethics. This new version was introduced at 79th GenevaMotor Show .19 meters longer in length and is 0. expandable to 350. • In earlier media interviews. • This international version is more powerful and stronger than itsIndian counterpart.000 per annum onthree shifts. The company isaimed towards selling of Nano car in Europe for 5000 euros($6. it last year editedwhistle blower policy for the benefits of the company & society • The Company believes in the conduct of the affairs of itsconstituents in a fair and transparent manner by adopting higheststandards of professionalism.316)). MARKET SHARE & future planning • Tata said that the initial target production volume would be 250. honesty. It is 0.08meters wider in comparison of its Indian part.000cars per annum on two shifts. integrity and ethicalbehavior.
.  with safetyfeatures such as crumple zones.The Nano has an allsheet-metal body made fromJapaneseandKoreansteel. .strong seats and anchorages. fabric seats and central locking • Tata Motorswill offer a version of the Nano with these safety-features. and the rear tailgate glass bonded to thebody.including an airbag system in its electric version. • The luxury Tata Nano LX at 172.. powerwindows. Product focus Model versions • The basic Tata Nano Std priced at 123.000 Rupees has air conditioning. seat-belts. intrusion-resistant doors.000Rupeeshas no extras. Tires are tubeless • Introducing the car with an artificially low price through governmentsubsidies and tax-breaks • Forgoing profit on the car.and will have the lowest emissions in India. Social responsibility Green Matters: Tata Motors. • The deluxe Tata Nano CX at 151.• Die Welt reports that the car conforms with environmental protection.000 Rupees has air conditioning. a Company that cares about thefuture.
There are also rumors of Maruti Suzukiintroducing alower priced version of Altoto counter Tata Nan . and is engaged in community and social initiatives onlabour and environment standards in compliance with theprinciples of the Global Compact.to avoid release of polluted water into the ecosystem. Hyundaiand Toyota Motor have all expressed interest in building a small car that is affordable to moremiddle-class consumers inemerging markets. In Pune. It is a signatory to the United Nations GlobalCompact.Tata Motors is committed in letter and spirit to Corporate SocialResponsibility.  Inexpensive and eco-friendly electric-cars likeTara Tiny.1) Reduction of environmental pollution and regular pollution control drives2) Restoration of ecological balance. andsome environmentalists argue getting prices down on these technologies is where effortsshould be concentrated.the treated water is conserved in lakes attracting variousspecies of birds from around the world thus turning the spaceinto a green belt.Ford Motor.T a t a M o t o r s c o n c e r n i s m a n i f e s t e d b y a d u a l a p p r o a c h .000 rupees or approximately US$2000Rival car makers includingBajaj Auto. The bulk of demand there is for small cars because people are much more sensitive tofuel prices. Reducing pollution Tata Motors has been at the forefront of the Indian automobile industry's anti-pollution efforts by introducing cleaner engines.  Honda and Toyota are leading the way on so called cleaner gasoline-electric hybrids.General Motors.Some Other social responsibilities areCommunity DevelopmentHealth & SanitationEmployment GenerationCommunity Centres Revenue maximization Tata initially targeted the vehicle as "the least expensiveproduction carin the worldaiming for a starting price of 100. It is the first Indian Companyto introduce vehicles with Euro norms well ahead of the mandated dates.000 rupees or approximately US$2000 Overcome competition Tata initially targeted the vehicle as "the least expensive production car in the world  aiming for a starting price of 100.Oreva Super (both reportedly even cheaper than Tata Nano) andR V EA  pose evenmore significant danger to Nano. Restoring Ecological Balance: Tata Motors has set up effluent treatment facilities in its plants. Fiat.