Tata Motors Shamoon Saeed November 5th, 2010, Marketing 100 Tidewater Community College Instructor: James Womick
Tata Motors- Target Customer
Company Background Tata Motors is India's largest automobile company, with consolidated revenues of Rs. 92,519 crores (USD 20 billion) in 2009-10. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. The company is the world's fourth largest truck manufacturer, and the world's second largest bus manufacturer.
Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of India. Over 5.9 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The company's manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka). Following a strategic alliance with Fiat in 2005, it has set up an industrial joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and Fiat power trains. The company is establishing a new plant at Sanand (Gujarat). The company's dealership, sales, services and spare parts network comprises over 3500 touch points; Tata Motors also distributes and markets Fiat branded cars in India.
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 an international automobile company. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand and Spain. Among them is Jaguar Land Rover, a business comprising the two iconic British brands that was acquired in 2008.
Target Market Tata Motors has operations in the UK, South Korea, Thailand, Spain and now has there eyes set for the US. According to Consumer Trends in US (2008), the main impact of US inflation has been to reduce the amount of income available to many US consumers. This has affected to US consumers to alter their consumption patterns by spending less money such as postponing purchases new cars; eating out less. Tata Motors has always been targeting to lower income group. Tata Nano is the low-cost car that clearly intends for the mass market. Especially, it is attracted to families with four, the first-time car buyers or fresh graduate and second-hand car owners. Tata Nano will be replacement for their 2 wheeler or a new car at a price of 2nd hand car.
Tata Motors tries to place Tata Nano as a people¶s car in worldwide automobile market. For expanding to new market, the United States of America is the country that has the largest economy and biggest products and services market. Tata Nano is going to represent itself to be green product from the fuel efficiency composition, and it shows itself to be the cheapest car in the world. Accordingly, it also has the efficiency with safety system and modern model which could attract American people in no doubt. The Tata Nano is the cheapest car in the world, which costs only USD$2,500 for 1 unit, and the price is the most powerful benefit of Tata Nano in the whole market. In addition, the ³cheap price´ would be Tata¶s best strategy to enter other countries¶ market in introduction stage. Also, it could powerfully compete with existing rivals and penetrate their market without difficulties.
As has been mentioned, the Nano¶s price in US market could estimate as the original price in India $2,500 plus the shipment and other expenses as $1,500 per car. In addition, it also might add the cost of developing cars which has to achieve the standard of US regulation. Therefore, the price for Tata Nano could be under $6,000. However, if there is a newcomer who want to fight with Tata Nano¶s price, company can use pricing strategies for competing by decreasing original price in maturity stage because Tata already has got high range of margin. Thus, it could be highly benefit for Tata Nano to compete with others in United States. |Model |Basic (STD) |Deluxe (CX) |Luxury (LU) |Price |$4,000 |$4,500 |$5,000 |Margin |15% |17% |20% | | | |
Tata will have online shop for its cars as a direct marketing channel. Tata Nanos will be available in online channel for booking cars through its website which is Tatanano.com. Additionally, consumers can also download form from this website. It shows that Tata consumers would have the convenient procedures for buying Tata Nano but booking fee might be added from regular price as usual. Also, it could have some special services such as customize. The car¶s opinion can be selected by the customers online, and they just go to dealer after they choose what they need. It can be not only convenient, but also save expense for Tata Motors to operate retail stores.
People who interested in Tata product could ask information or be able to book Tata¶s cars through the hotline phone which is called Tata¶s Call Center all of USA. Also, consumers can book and buy Tata¶s products from the retail stores and dealership. Customers might negotiate with salesmen in car dealers because they purchase products from corporation at a negotiated price. The Tata¶s dealerships will be located in the target center of efficient consumers. Condition of Auto Market There is no industry more present in the worldwide community than the automobile industry. The automobile has changed the lives, culture, and economy of the people and nations that manufacture and demand them. Ever since the late 1800s when Benz and Daimler in Germany invented the first "modern" car, the industry has grown into a billion dollar industry affecting so many aspects of our lives. There are more than 400 million passenger cars alone on the roads today. During the early part of the twentieth century, the United States was home to more than 90 percent of the world's automotive industry, but has shrunk to about 20 percent in today's world (Tardiff 394).. This drastic change has occurred by the booming economies in such nations as Japan, Germany, Canada, France, Italy, and other nations. The US auto industry "sales totaled $205 billion, or 3.3 percent of the total Gross Domestic Product" (Tardiff 394). By the end of 19th century, there were about 500 auto manufacturers, but that number dropped sharply to 23 by 1917, and today the Big Three dominant the market. Ford, General Motors, and Chrysler make up the Big Three, which account for 23 percent of the world's motor vehicle production in 1997, with the Japanese industries coming in second, producing 21 percent. Germany produces 9 percent; Spain, France, South Korea, and Canada
each produce 5 percent of the international market in 1997. In the US alone, the auto-industry, which includes it's 500,000 car-related businesses, creates 12 million jobs (Broughty 290). The automobile is clearly an oligopoly, but each company's control of the market has gradually diminished because of rising foreign competition. The US has three main auto manufacturers; Japan has five major producers, as does Germany. Each of these companies produce differentiated versions of the same product, have control over their products' prices, and rely heavily on non-price competition (Womack 154). Each company produces a new line of cars for each model annually. There are many different types of cars, like sedans, station wagons, Sport Utility Vehicles (SUVs), two-doors, and fourdoors, but by comparing models between two competing companies, you can see how great the similarities are. The auto industry can still thrive even though their products are so similar because the demand for cars is immense and continuous. People rely on cars for so many things that life without one seems impossible, especially in the US which registered 141 million cars in 1988, whereas Japan, the second highest, only registered 30 million (Broughty 96).
Conclusion FINDINGS of the study The price of the TATA car is reasonable. Fuel mileage of the Tata car is good. TATA cars suits middle income group people. Spare parts are easily available. Easy to maintain. Less service stations.
Need of more attractive merchandize display
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Womack, James P., Jones, Daniel T., and Roos, Daniel. The Machine that Changed the World. New York: MacMillan Publishing Company, 1990
Farr, Max. "Automobile Industry." Hoover's Online. Online. Internet. November 2001