ABSTRACT

The premise of market segmentation is that to maximize sales to a large population of

customers, it is best to divide it into logical subgroups. The assumption is that by dividing
one large, amorphous mass into subgroups, you can fine-tune your product, messaging,
support, or distribution channels to meet the specific needs of unique customer groups.
Thus, the goal is to use a market segmentation model to improve marketing success and
optimize marketing ROI.

This project is done with the practical example of how a leading automobile company i.e.
TATA MOTORS used this market segmentation strategy as an important tool on their way
to success.
TABLE OF CONTENT

CHAPTERS CONTENT PAGE NO.

i INTRODUCTION
1.1 Background of the study
1.2 Need of the study
1-3
1.3 Objectives of the study

ii
Review of Literature
4 - 11

iii RESEARCH METHODOLOGY

3.1 Methodology
3.2 Scope 12 - 14
3.3 Limitations

iv 15 - 32
THEORITICAL FRAME WORK

v COMPANY & INDUSTRY

33
PROFILE
vi
RESEARCH DATA ANALYSIS
34 - 45
INTERPRETATIONS

vii RESEARCH FINDINGS AND

46
CONCLUSIONS

viii SUGGESTIONS AND

47
RECOMMENDATION

ix BIBLOGRAPHY 48 - 49
CHAPTER - I

INTRODUCTION
 1.1 INTRODUCTION

Market segmentation is a process of dividing a heterogeneous market into relatively more

homogenous segments based on certain parameters like geographic, demographic,
psychographic, and behavioural. It is the activity of dividing a broad consumer or business
market, normally consisting of existing and potential customers, into sub-groups of
consumers( known as segments) based on some type of shared characteristics.

In dividing or segmenting markets, researchers typically look for common characteristics

such as shared needs, common interests, similar lifestyles, or even similar demographic
profiles. The overall aim of segmentation is to identify high yield segments – that is, those
segments that are likely to be the most profitable or that have growth potential – so that
these can be selected for special attention (i.e. become target markets ). Many different
ways to segment a market have been identified.

The project work under study is a humble effort to undertake an intelligent analysis of
Market Segmentation process followed by Automobile Industry, and a study on the top
player of this industry i.e., “TATA MOTORS”.

1
 1.2 NEED AND IMPORTANCE

 I got to know how to reduce risk in deciding where, when, how, and to whom a
product, service, or brand will be marketed
 I got to know the different range of products produced by TATA MOTORS and
ways of grouping them and allotting a segment of market by analysing the
different properties of the product.
 This project helped me in understanding how TATA MOTORS used Market
Segmentation process as one of the strategy in making their company successful
 This project helped me to understand the different types of segmenting the
market for various range products.

2
 1.3 OBJECTIVES OF THE STUDY

 To get a clear image of the benefits and limitations of Market Segmentation

process
 To know different ways of segmenting market for different types of products
 To analyse market segmentation processes followed by leading market
players like TATA MOTORS

3.1 RESEARCH METHODOLOGY

The methodology was used to gather information from the target audience by a designed
structured questionnaire comprising to a sample size of 200. A questionnaire is a research
instrument consisting of a series of questions and other prompts for the purpose of
gathering information from respondents.

Type of Data

 Primary data
 Secondary data

Primary data

The primary data is obtained from primary source i.e. direct interview, Questionnaire,
Telephone conversation. In this report mainly primary data is used for data
interpretation.

Secondary data

The secondary data is obtained from magazines, books, online sites, journals and
newspapers etc

3
 3.2 SCOPE OF THE STUDY

Tata Motors Limited is India's largest automobile company, with consolidated revenues of
Rs. 240,000 Crores USS 38.6 billion (FY 2013-14). It is the leader in commercial vehicles
in each segment, and among the top ten 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.

The company's 67.000 employees are guided by the vision to be "best in the manner in
which we operate, best in the products we deliver, and best in our value system and
ethics."

The scope of this project is very important for Tata Motors. This project provides an
detailed insight into the history, values and product mix of Tata motors Ltd. The project
also shows the market segmentation strategies that are adopted by Tata Motors Ltd.

communicate and deliver the superior values to the customers and to fly on the path of

sustainable growth.

4
 3.3 limitations

➢ The study is limited to a short period of time.

➢ Information given by the respondents may be biased.

➢ Due to time constraint sample size was restricted to 200 only.

➢ Respondents in many cases were unable to rate various aspects and Responses were

based on each person’s way of thinking

5
 CHAPTER-II
REVIEW OF LITERATURE
The following chapter provides the information about the literature of market segmentation

FAHED YOSEPH [2018]: ... According to the European Commission, the SMR
industry forms the backbone of the economy and are the key players in the creation of new
jobs and economic growth [22]. Historically, small size retailers have had the privilege of
developing close and mutually beneficial relationships with their customers, thus keeping
existing customers and reaching new markets is a major challenge for the retailer [18],
[23]. These relationships were possible because consumer's buying behavior did not
change much, and the price was less of an issue due to less competition [6]. ...

... However, the recent economic and social changes have transformed the retail industry,
particularly the relationship between the retailer and customers has changed significantly.
As a result, retailers have been forced to seek new marketing strategies to identify the
profitable segment of customers, to develop marketing mixes that appeal to those potential
segments of customers and to focus on providing value to the key segments of customers
[18], [23]. ...
... The goal is to map consumer wants and needs from nationality, region to another
etc. [23] Behavioural; Product attitudes, customer relationship related features ...

MOHAMMED ALMALAILY [2019]: According to the European Commission, the SMR

industry forms the backbone of the economy and are the key players in the creation of new
jobs and economic growth [19]. Historically, small size retailers have had the privilege of
developing close and mutually beneficial relationships with their consumers, thus keeping
existing consumers and reaching new markets is a major challenge for the retailer [16],
[20]. These relationships were possible because consumer's buying behaviour did not
change much, and the price was less of an issue due to less competition [6]. ...

... However, the recent economic and social changes have transformed the retail industry,
particularly the relationship between the retailer and consumers has changed significantly.
As a result, retailers have been forced to seek new marketing strategies to identify the
profitable segment of consumers, to develop marketing mixes that appeal to those potential
segments of consumers and to focus on providing value to the key segments of consumers
[16], [20]. ...

JITENDRA PATEL[2018]: The study further suggest to use multi segmentation variable
to divide the market into several sub market and interpret there brand preference for
satisfying consumer demands which will lead to sustainable competitive advantages for
any organization. Goyat (2011) [23] in her literature review find the dominance of
demographic and psychographic factors for segmentation, she also observed the
segmentation is greatly influence of extraneous variables as price, trends, and market
conditions on the purchase of the consumers. She also suggests that market segmentation
is completely dependent upon all four traditional bases not on single one. ...

... The study further suggest to use multi segmentation variable to divide the market into
several sub market and interpret there brand preference for satisfying consumer demands
which will lead to sustainable competitive advantages for any organization. Goyat
(2011) [23] in her literature review find the dominance of demographic and psychographic
factors for segmentation, she also observed the segmentation is greatly influence of
extraneous variables as price, trends, and market conditions on the purchase of the
consumers. She also suggests that market segmentation is completely dependent upon all
four traditional bases not on single one. ...
... i) new or underdeveloped market ii) mature market 21 Goyat (2011) [23] Segmentation
is greatly influence of extraneous variables as price, trends, and market conditions on the
purchase of the consumers and market segmentation is completely dependent upon all four
traditional bases not on single one. ...

JACQUELINE MANGWANE[2019]: ... Demographic segmentation Demographic

descriptors are used to determine the observable demographics that differentiate one
segment from another (Goyat, 2011). Variables such as age, gender, family size, family
life cycle, income, occupation, education, generation, ethnicity, nationality, religion, and
social class form the basis of demographic segmentation (Goyat, 2011;Veisten et al.,
2015).Understanding the demographic characteristics of travellers helps to create a more
thorough tourist profile (Tichaawa & Harilal, 2016;Alén et al., 2017). ...
... Demographic segmentation Demographic descriptors are used to determine the
observable demographics that differentiate one segment from another (Goyat, 2011).
Variables such as age, gender, family size, family life cycle, income, occupation,
education, generation, ethnicity, nationality, religion, and social class form the basis of
demographic segmentation (Goyat, 2011;Veisten et al., 2015).Understanding the
demographic characteristics of travellers helps to create a more thorough tourist profile
(Tichaawa & Harilal, 2016;Alén et al., 2017). The study of tourist demographic
characteristics is also useful in the formulation of marketing strategies (Duman &
Tanrisevdi, 2011) and provides useful information for policy-makers and tourism
managers for strategy formulation, product development, and service delivery (Brida et al.,
2010). ...

SOO-KYOUNG AHN[2020]: ... Second, previous studies have mainly taken a

dichotomous approach to unique consumers (i.e., opinion leaders or non-leaders, or
mavens or non-mavens), lacking further segmentation and consumer profiles [1,13,14,34].
Market segmentation keeps businesses closely in touch with their consumers, ensures more
efficient resource allocation, and results in marketing programs attuned to consumer needs
[35] and a competitive advantage within the segment [36]. Identifying consumer needs and
developing the right offers to specific consumer segments is a critical part of the marketing
process for retailers with limited resources and attention spans [37]. ...

... Segmenting a market effectively and identifying characteristics of consumers from each
segment correctly are critical parts of marketing that should precede the market choice for
a successful business [36]. However, some limitations should be surmounted in the next
step.
...

FATEN IBRAHIM KHAMISE[2021] : ... Some behavioral variables

include required benefits, Usage rate, Brand loyalty, User status, Readiness to buy,
and opportunities. (Goyat, 2011). There is no doubt that the needs of students and
researchers for the sources of science and knowledge are much higher than the
needs of children and readers, so their Usage rate of EKB varies from group to
group and also their required benefits. ...
 JIAYANG CHENG [2020] : ... Segmentation is a strategy of dividing the
market into homogenous group (groups of consumers or segments with distinct
needs and wants). It is generally used to identify and further define the target
customers, and provide supporting data for marketing plan elements such as
positioning to achieve certain marketing plan objectives (Goyat, 2011) [6]. After
making the segmentation, businesses may develop product differentiation
strategies, or an undifferentiated approach, involving specific products or product
lines depending on the specific demand and attributes of the target segment. ...

SALOME IGHOMEREHO[2020] : ... Demographic segmentation theory

explains consumer purchase behaviour according to variables such as age, gender,
family size, family life cycle, income, occupation, education, generation, ethnicity,
nationality, religion, and social class (Goyat, 2011). Stafford (1996) suggests that
demographic segmentation allows a business with diverse demographic
characteristics to promote different products and services to dissimilar groups. ..

ATIS VERDENHOFS [2019]: ... Demographic segmentation theory explains

consumer purchase behaviour according to variables such as age, gender, family size,
family life cycle, income, occupation, education, generation, ethnicity, nationality,
religion, and social class (Goyat, 2011). Stafford (1996) suggests that demographic
segmentation allows a business with diverse demographic characteristics to promote
different products and services to dissimilar groups. ..
S.MOHAN KUMAR [2019]: ... In one year from the introduction, they reached up to
5% of the market share. Currently company have a constant 10% of market share in
India [6]. The market share value of Vivo in India is given in Table 4. ...

ARVIND MALLIK [2018] : Limitation of the Study 1. Time constraints: difficult

to collect information 2. Inaccurate information: the information given by the consumers
may be inaccurate.3. Restricted too few areas only: the study is only conducted in
Shivamogga city only. ...

HADI ROSHAN [2017] These days every company wants to focus on customers
within their capacity and with customer's intimacy. For this market is to divide into groups
of consumers or segments with distinct needs and wants (Goyat, 2011). Market
classification is one the most important issues in modern marketing and customer
relationship management (Berson et al., 2000) and it is an approach aiming at grouping
similar customers in order to better understand and approach them (Seret et al., 2015). ...

JIM SAKER [2018] : ... Not only would this increase the appeal of the marketing
messages, it would make them more cost-effective as they would reach more accurate
market segments. This research builds upon previous studies in market segmentation
(Haley 1968;Alpert and Gatty, 1969;Dibb, 1998;Dibb and Simkin, 1991;Kotler, 1991;Du
and Kamakura, 2006;Kotler and Keller, 2006;Malhotra and Birks, 2007;Smith, 2009;Wells
et al., 2010;Goyat, 2011;Tkaczynski and Rundle-Thiele, 2011;Elena Delgado-Ballester et
al., 2012;Wu et al., 2015). In doing so it provides important guidelines for manufacturers
and marketing departments on the collection of data and the diffusion of product
information. ...
KOBBI NISSIM [2018] : ... The segmentation base chosen to subdivide a market will
depend on many factors such as the type of product, the nature of demand, the method of
distribution, the media available for market communication, and buyers' motivation [13].
The marketing methods discussed in this literature, and in particular segmentation methods
(see a discussion of methods of segmentation in [20]), almost entirely ignore game-
theoretic considerations on the part of consumers. Thus, the available data underlying
segmentation is (implicitly) considered truthful. .

ANDRY ALAMSYAH [2017] : ... A market segment consists of a group of

customers who share a similar set of needs and wants [5]. Market segmentation is also a
strategy of dividing a market in homogeneous group [6]. Since a target market is a
homogeneous group which has a similar set of needs and wants, it will be easier to satisfy
their need and wants rather than we serve the market without segmenting and targeting it.
...

SARWAR AZHAR [2019]: ... Various authors have stated some criteria conditions
for successful segmentation known as "Effective segmentation" (Goyat, 2011). Kotler
(1984) stated three different factors required for market segmentation, to which he later
added a fourth one as well (Tynon and Draton, 1987). ...

NIGEL WATERS [2020] Whether microtargeting involves the selling of products

or services or the promotion of an k k k k MICROTARGETING ideology in a political
campaign, it benefits from segmentation to focus or target the message. Goyat
(2011) suggests that market segmentation may be based on variables from four categories:
geographic, demographic, psychographic, and behavioural. Examples of variables include,
for the geographic category: nation, state or province, municipality, neighbourhood, and
political/voting district; for the demographic category: age, gender, income, occupation,
social class, ethnicity, religion, and education; the for psychographic category: activities,
interests, opinions, values, and attitudes; and for the behavioural category: brand loyalty,
usage, and past consumer behaviour. ...
FUNKE ADEBAYO [2020] : ... This is obvious for the following reasons; first, it is
the foundation direct marketing, and secondly, it helps to maximize profit by reducing
marketing resources and so much more. Target marketing was defined by [3] as dividing
markets into small groups containing the buyers who have unique needs, characteristics, or
behaviours. Furthermore, they might require different products or marketing mixes." ...

FATEN KHAMIS [2021] : ... Some behavioural variables include required benefits,
Usage rate, Brand loyalty, User status, Readiness to buy, and opportunities. (Goyat, 2011).
There is no doubt that the needs of students and researchers for the sources of science and
knowledge are much higher than the needs of children and readers, so their Usage rate of
EKB varies from group to group and also their required benefits. ...

MASSIMO POLLIFRONI [2016]  to outline new business strategies oriented

to the repositioning of the companies on their domestic and international markets (Goyat,
2011),  and to fortify then the local tourism in the terms of sustainable development
(Gherco et al, 2014;WCED, 1987). ...

SIMEON OZUOMBA [2015] This challenge has motivated the adoption of the
idea of customer segmentation or market segmentation, in which the customers are
subdivided into smaller groups or segments wherein members of each segment show
similar market behaviours or characteristics. According to [2], customer segmentation is a
strategy of dividing the market into homogenous groups. [3] posits that -the purpose of
segmentation is the concentration of marketing energy and force on subdivision (or market
segment) to gain a competitive advantage within the segment. ...

MITCHELL ROSS [2015] Best (2004) argues that the primary benefit of needs-
based segmentation is the grouping of customers with homogeneous needs and buying
behaviour. The goal is to determine what observational demographics and behaviours can
differentiate one segment from another in order to make needs-based market segmentation
actionable (Goyat, 2011). ...

... The rationale underlying this segmentation strategy is that the benefits that people seek
in consuming a given product or service are the basic reason for the existence of true
market segments (Goyat, 2011). ...

ANNA MATTILA [2015] : ... As suggested by the literature on geographic market

segmentation, consumer needs or the way to fill such needs vary geographically (Beane
and Ennis 1987). For example, individuals living in the same country, state, or
neighbourhood tend to share similar attitudes, needs, and characteristics (Goyat 2011). In
fact, it is very common for marketing research companies (e.g., Claritas, American
Affluent Research Center) to target customers based on their zip codes. ...

HANEIH VARASTEH [2014] Segmentation leads marketers to identify different

groups of customers whose behaviours considerably differ from others. This also allows
firms to modify their marketing strategies, to cater to particular needs of different market
segments (Goyat, 2011). Recently market researchers are using sophisticated analytical
techniques in their search for better ways of identifying market segments and product
differentiation opportunities (Dickson & Ginter, 1987).

CARLO RUSSO [2020] : ... Market segmentation is used to develop a better

understanding of consumers' motives and to facilitate the design of marketing plans
(Goyat, 2011). The consumers' segments differ in their product needs or buying responses
(Kotler and Armstrong, 2010). ...
 THEORETICAL FRAMEWORK

Introduction to Market segmentation

Market segmentation is the activity of dividing a broad consumer or business market,

normally consisting of existing and potential customers, into sub-groups of consumers
(known as segments) based on some type of shared characteristics. In dividing or
segmenting markets, researchers typically look for common characteristics such as shared
needs, common interests, similar lifestyles or even similar demographic profiles. The
overall aim of segmentation is to identify high yield segments that is, those segments that
are likely to be the most profitable or that have growth potential - so that these can be
selected for special attention (i.e. become target markets).

Market segmentation assumes that different market segments require different marketing
programs that is, different offers, prices, promotion, distribution or some combination of
marketing variables, Market segmentation is not only designed to identify the most
profitable segments, but also to develop profiles of key segments in order to better
understand their needs and purchase motivations. Insights from segmentation analysis are
subsequently used to support marketing strategy development and planning. Many
marketers use the S-T-P approach: Segmentation Targeting Positioning to provide the
framework for marketing planning objectives. That is, a market is segmented, one or more
segments are selected for targeting, and products or services are positioned in a way that
resonates with the selected target market or markets.
The concept of market segment is based on the fact that the markets of commodities are
not homogenous but they are heterogeneous. Market represents a group of customers
having common characteristics but two customers are never common in their nature, taste,
habit, hobbies, income and purchasing styles. There exists a lot of difference in their
buying behaviour and buying decisions. On the basis of these characteristics, customers
having similar qualities are grouped in segments. The characteristics of customers of one
segment differ with those of other segments. In this way market segmentation refers to
various segments of the market based on the common characteristics of the customers.
4.1 Need for segmentation

 The need for segmentation of services is that it allows a business to precise reach a
consumer with specific needs and wants through effective services. In the long run,
this benefits the company because they are able to use their corporate resources
more effectively and make better strategic services marketing decisions.
 Segmentation of services helps the marketers to devise appropriate marketing
strategies and promotional schemes according to the tastes the individual- of a
particular market segment. The marketers must be able to relate their services to the
target segments.
 Segmentation helps the marketers to understand the needs of the target audience
and adopt specific marketing plans accordingly. Organizations car adopt a more
focused approach as a result of services market segmentation.
 Market segmentation helps the organizations to target the right kind of services to
the right customers at the right time. Geographical segmentation classifies
consumers according to their locations.
 Segmentation of services helps the organizations to know and understand their
customers better. Organizations can now reach a wider audience and promote their
services more effectively. It helps the organizations to concentrate their hard work
on the target audience and get suitable results.
 Marketers are using segmentations for years to target their customers more
effectively. In the social media landscape it has become increasingly more
important to keep communications highly relevant and engage with different. but
defined, sections of their audience.

 Segmentation gives the competitive element to anything are offering, an

organisation has to identify what elements of its services it needs to excel at, in
order to supply a better offering than the competition.
4.2 Bases of market segmentation

 Demographic Segmentation

Demographic Segmentation is carried out on the basis of age, sex, size and structure of
family, income and educational levels.

1. Age: Marketers believe that people of the same age group behave in a similar
manner and this belief has led them to segment the market according to age and
market their products or services accordingly.

2. Sex: Marketers can segment the market depending on the gender they would like
to serve. Products or services can be designed for a single segment or both the
segments.

3. Size and structure of family: In India, the family size has decreased to
just 3-4 members from 5-6 members a few decades ago. Therefore, marketers can
design their products or services to serve the needs of families with 3-4 members
while providing the flexibility to serve more members if required. Further, with the
increasing educational and job opportunities in cities, young individuals are
moving to the cities and marketers have an opportunity for designing their services
accordingly.

4. Income: Income is one of the most important bases used by marketers to

segment the market, as it determines the buying power of the customer in most
cases. Studies show that as income increases, customers tend to spend more on
luxury goods or services, and their spending on basic necessities as a percentage of
total spending decreases.

5. Educational Level: One of the factors that determines the preferences and
wants of an individual customer is his level of awareness, which, in turn, depends
on his education level.
  Geographic Segmentation
Under geographic segmentation, the entire market can be divided into nations, countries,
or states and the global market can be segmented into developed countries, developing
countries, and underdeveloped countries. The gross domestic product of a country, its per
capita income, standard of living of the people, and some aspects of demographics of a
country. Further, markets can be segmented on a basis of density of population or the
climatic conditions across regions.

 Psychographic Segmentation

Through psychographic or life-style segmentation, marketers aim to find out the basic
characteristics of a consumer that could influence his purchase decisions. In this type of
segmentation, marketers divide the market on the basis of the life style and personality of
their customers.

1. Life-style. Marketers can gain valuable insights into the buying behavior of
their customers by analysing their lifestyles. For example, the lifestyle of a young
and single professional will be entirely different from what that of a person who
has just retired from the service. In this example, the young professional might
more keen on spending than saving, while the retired person might think of
investment options that will provide him with a steady income.

2. Personality. Marketers can design products or services that appeal to the

personality types of their customers. For example, a customer who seeks to have a
quiet and relaxing vacation will be attracted by a holiday that offers yoga, body
massage etc., in a serene setting like the backwaters of Kerala.

 Behavioristic Segmentation
Under behavioristic segmentation, customers are divided on the basis of their
knowledge of a product or service and their attitude towards that product or service.
Behavioristic segmentation covers areas like the benefits sought by customer,
purchase occasion, user status, and degree of usage, customer loyalty, readiness
stage and marketing factor sensitivity.

1. Benefit Segmentation. This segmentation divides the customer base on the

 basis of the benefits sought. That is, the customers are grouped according to the
benefits that they are looking for when consuming a product or service. Marketers
should gather adequate information on the various benefits that different types of
people are looking for and then assess the ability of their product or service to
deliver those benefits.

2. Purchase Occasion Segmentation. This segmentation divides

customers on the basis of the reasons behind their purchase. For example, a family
may go out for dinner to an expensive restaurant to celebrate the wedding anniversary,
birthday, or promotion of a family member.

3. User Status Segmentation. Customers can be divided based on their

usage of a product or service and the pattern of usage. There can be different
categories under this segment: non-users-who never use the product or service; ex-
users - who used the product earlier and do not purchase the same product or
service any more; potential-users- who might not be using the product or service at
present but stand a fair chance of using it in the future; first-time users who have
decided to use the product or service for the first time, and regular users - who use
the product or service regularly. Marketing messages to target each of these users
should be different.

4. Usage Rate Segmentation. This segmentation divides customers based

on frequency of usage of a product or service. This segmentation divides the user
market into light, heavy, and medium user groups. Different marketing mixes are
aimed at light, heavy, or medium users.

5. Loyalty Segmentation. This segmentation divides customers on the basis

of the degree of their loyalty towards a certain product or service. Marketers should
consider price and product or service availability while segmenting the market
based on customer loyalty.

6. Buyer Readiness and Marketing Factors. Market segmentation

based on buyer readiness divides customers based on their willingness to buy and
likelihood of purchasing a certain product or service. Marketers identify people
 under different segments based on various factors like their awareness or
knowledge for the product or service, their liking and preference for it and their
conviction to purchase it.

4.3 Approaches of segmentation

Identification of the market segment leads a firm to decide how to approach the selected
markets. However, there are many finns, which do not segment the market and would
work for the aggregate market. This is called market aggregation which exactly opposite to
segmentation. There are different kinds of targeting approaches and each marketing firm
has its own unique way of targeting its customers. These targeting approaches are simply
divided into four kind's viz. undifferentiated marketing. differentiated marketing,
concentrated marketing and Micro marketing.

 Undifferentiated Marketing Approach

Undifferentiated marketing refers to an approach when a firm produces only one
product or product line and targets all of its customers with a single marketing mix.
The other term used for this approach is mass marketing. In Mass Marketing. the
market coverage strategy essentially ignores the market segment differences and
goes after the whole market with one offer. This marketing approach attempts to
sell through persuading a wide audience. Usually the idea is to broadcast the
message with an aim to reach the largest number of people possible. Mass
marketing focuses on media coverage such as radio, television and newspapers.
The idea is to maximize the exposure to the product. Examples of mass marketing
products are toothpastes, which are not made especially for one consumer group or
segment and are sold in huge quantities. Other examples are furniture, artwork,
automobiles, residential communities, cola drinks and personal computers.

 Differentiated Marketing Approach

The differentiated marketing refers to the approach of the firms, which produce
numerous products with different marketing mixes. These products are designed to
satisfy the smaller segments. In this approach, instead of marketing one product
with a single marketing program the firm approaches the different consumer groups
with products customized for each group. Most companies do this for
specialization and to remain competitive.
 The differentiated marketing essentially requires market segmentation and incurs a
higher production cost, inventory. cost and marketing costs.

 Concentrated Marketing Approach

The popular term for concentrated marketing is niche marketing. Another term for
the same is "Focused Market". A niche market is a subset of the market on which a
specific product is focusing. Each niche market essentially defines specific product
features such as product design, price range, production quality and the
demographics that is intended to impact. In niche marketing, the firm essentially
focuses. Niche marketing chooses a small segment provided it's a profitable
segment This approach is most suitable to smaller firms, which have lesser
resources.

 Micro Marketing Approach

This is the narrowest approach of targeting. It is most effective technique for small
business users to sustain, build and grow their own brand. It targets the potential
customer at the very basic and personal level.

4.4 4P’s of Tata motors

1. Product
Tata has a very wide range of products. It has passenger cars, utility vehicles,
Trucks, Commercial passenger Carriers and Defence Vehicles.

 Brand:
The products of Tata Motors have many special characteristics to them, but when
consumers think of it, they not only think of its features, but they may aho associate
it with quality, performance, class. All of these meanings have been added to the
product by advertising Consumers frequently buy the product not only for its
functional characteristics but also because they want to be identified with the image
associated with the brand. Tata Motors have been successful creating and
maintaining a professional brand image.

 Packaging :
 A vehicle cannot have a material packaging, Here, packaging refers to and effective
assembly of features. Tata Motors provide many innovative features to suit the
target customers and the product. Eg. Tata Safari Dicor has Reverse Guide System
which includes a weather-proof camera to help the driver while reversing the
vehicle. • Innovations: The various motives behind buying an automobile are Need,
Prestige, Comfort, Fashion, Jealousy and Novelty. The R & D Department
continuously strives to bring new innovations in their product. Tatas have an
industrial experience of over 100 years and they are well known with the
Psychology of Indian customers, who desire more at less price. This experience has
helped them to develop products which fullfill the expectations of Indian
consumers.

 Quality Control:
Tata Motors have their Quality Control standards and the QC Dept. ensures that the
customer does not face any inconveniences of a defective product.

2. Price

 The prices of Tata motors are generally affordable acceptable by the general public
at large. Tata always have something for the lower class people with Nano being
their trump card. Giving discount every month and special promotion for certain
type of vehicle also one of the strong strategy use by Tata Motors. Discount can be
made from Company's profit or from dealer's profit at certain range.

 Pricing strategies:
i) Penetration pricing
ii) Low pricing policy with minimum profit margin.

iii)Though the one lakh price tag is not fixed by TATA group (in case of
Tata Nano), it was the word of mouth of people which fixed that range.

iv)This expectation of people creates a big challenge for the company.

3. Place
 Channels of Distribution:
In case of vehicles, dealership method of distribution and sales is generally
adopted. Tata Motors have also adopted dealership method of distribution of its
products. The dealers purchase products from the Ca at a negotiated The MRP is
fixed by the Co and the dealer gets a profit within these prices. As price. the Co.
deals in commercial and passenger vehicles, there may be a single or distinct
dealerships to market its commercial and passenger vehicles in al town. However,
if there is a single dealership appointed, then the commercial and passenger
vehicles are managed under Commercial Vehicles Dept. and I Passenger Vehicles
Dept. respectively. Tata Motors have contracts with the Government of India and it
supplies buses and passenger vehicles, in some cases, to the Govt. Sometimes, bulk
quantities of vehicles are ordered by a Govt. Dept. or a private company. The sales,
distribution and billing of these are looked after by the Co. itself.

 Physical Distribution:
The commercial vehicles are manufactured at Jamshedpur Lucknow and Pant nagar
whereas the passenger vehicles are manufactured at Pune plant. From the plant, the
finished product is transported to the dealerships. The nation-wide dealership,
sales, services and spare parts network comprises over 2,000 touch points. The
dealerships are strategically located in the target and potential markets to ensure
efficient and timely availability of its products in the market.

4. Promotion

 Excional Selling:
There is minimal personal selling involved. The Sales Officers at the dealerships
collect prospective customer databases and perform cold calling to attract
customers.

 Advertising:
Advertising is a form of commercial mass communication designed to promote the
sale of a product or service. Tata Motors is responsible for the advertising of its
products. The dealer does play any role in the advertising. The various media used
for advertising are T.V., Newspapers, Magazines, Hoardings, Internet etc. The
dealer
 conducts point-of-purchase displays to advertise the products. The advertisements
done by the Co. help the dealer to capitalize on the market.

 Sales Promotion:
The purpose of sales promotion is to supplement and coordinate advertising and
personal selling: Sales promotions are designed to persuade consumers to purchase
immediately by providing special incentives such as cash rebates, prizes, extra
product, or gifts. The Co. conducts intensive sales promotion during festivals such
as festive discounts during Diwali.

 Public Relations:
that the customer is satisfied and receives good service whenever and wherever he
desires. Public Relations is a management function that creates, develops, and
carries out policies and programs to influence public opinion or public reaction
about an idea, a product, or an organization. The Co takes serious measures to
maintain good public relations. The Co. follows business ethics to ensure

4.5 Segmentation, targeting, positioning in the Marketing

strategy of Tata Motors

Tata can use geographic and demographic segmentation to segment their market. ...
Based on geography, Tata ca divide their customers into Asian customers, African
Customers and North American Customers. Based on demographics, Tata can classify
the customers into upper, middle and lower income groups.

Products offered by the company varies from cars, trucks, vans, coaches, military
vehicles, sports cars, buses and construction equipment.

Tata Motors does not follow a single marketing approach or formula but it believes
that all members of the community should be served. Brand targets crowd from the
 rural part to the metros with its offerings varying from NANO to Jaguar Land
Rover segment.

It targets anyone above 4 Lakh p.a. salary, millennial employed as professionals,

managers and all those looking to switch from 2-wheeler to 4-wheeler. The age bracket
for brand’s offering varies from 21-65 years with all Middle class. Upper middle class,
High class and Affluent class in its target category.

Tata Motors offers products such as Tata ACE a mini truck mainly used for agriculture
transport purpose, Tata NANO for the middle class, Tata Indica and Indigo for
commercial purposes and Jaguar in the high-class segment thus creating the image that
there’s something for everyone in its huge line of offerings.

Differentiated targeting strategy is used by Tata Motors to target the customers and
satisfy their needs and wants.

4.6 Tata Motors micro level segmentation

Having identified macro-segments, it is often helpful to divide them into smaller micro-
segments. To Isolate the segments effectively, it is advised to move beyond secondary
sources of Information and conduct market segmentation study. Some of the micro
level bases for segmentation are Illustrated below:

Variable Illustrative breakdowns

Key Criteria
Purchasing strategies
Structure of decision making unit
Importance of purchase
Organizational innovativeness
Personal characteristics
Quality ,delivery ,technical support ,price
and supply community
Single source ,Multiple sources
Central decision making ,department-wise
decision making
High importance, low importance
Innovator ,follower
Demographics ,Decision style ,risk
,confidence ,job responsibility
Key criteria

For business products, the market can be divided according to which criteria are the most
important in the purchasing decision. Some of the criteria include product quality, prompt
and reliable delivery, technical support, price and supply continuity.

✓ Quality

Tata Motors in itself is a name which is synonymous to quality. All Tata Products are
required to meet certain standards specified by International norms. Tata Motors has the
least car breakdown ratio in the country. This signifies the quality and engineering
excellence the company adheres to while manufacturing its products Business Excellence
Group (TBEXG), a division of Tata Sons, is entrusted with the responsibility of
prescribing standards for its subsidiary companies and also looking into the adherence of
the standards by the companies.

✓ Delivery

Tata Motors has 6 manufacturing plants in India at Jamshedpur. Pune, Lucknow.

Pantnagar. Sanand and Dharwad. All the plants have state of the art facilities and are well-
equipped to meet sudden change in demands. For example, the plants are built in a manner
so as to be able to be modified to produce different vehicles when required. Thus, this
ensures timely delivery of any vehicle required.
Kinds of tata motors vehicles

Setting the trend, staying ahead

With the introduction of new architectural platforms and efficient engine options, we strive
towards continuous improvement in our product portfolio across all segments – Commercial
vehicles, Passenger vehicles and Electric vehicles.
 CHAPTER- III
COMPANY PROFILE
5.1 Company Mission and Vision

To be the most reliable global network for customers and suppliers, that delivers value
through products and services. To be a responsible value creator for all our
stakeholders

5.2Company Objectives

Building excellence in buying and servicing process, with an objective to improve

consumer's perception for the products. Distribution and service network is strong, but
focus is on improving dealership to enhance consumer experience in sales and service

5.3 Company Achievements

Some of the Company’s achievements are described below.

 Tata Motors wins the prestigious 'Corporate Platinum' Award.

 Tata Motors wins 'Golden Peacock Award' for Corporate Social Responsibility.
 Tata Motors CVBU Pune wins National Energy Award.
 Tata Motors – Jamshedpur wins 'Energy Efficient Unit Award'.
 Tata Motors wins the first CSIR Diamond Jubilee Technology Award.
CHAPTER – IV

RESEARCH DATA ANALYSIS INTERPRETATION

6.1Key Performance Indicators

Strong performance in a challenging environment

Our strong financial recovery since the beginning of the pandemic, matched with robust
cost control, has resulted in a return to strong margins and positive cash flow through the
year.

Figure 1 :

Interpretation:

From the above graph ,

in 2019 personal vehicles are 2,34,500 units are sold.

In 2020 personal vehicles are 1,37,924 units are sold.

In 2021 personal vehicles are 2,22,638 units are sold.

Figure -2

Interpretation:

From the above graph ,

in 2019 commercial vehicles are 5,27,286 units are sold.

In 2020 commercial vehicles are 3,47,587 units are sold.

In 2021 commercial vehicles are 2,67,513 units are sold.

Figure – 3

Interpretation:

From the above graph ,

in 2019 total sales volume are 5,07,895 units are sold.

In 2020 total sales volume are 4,75,952 units are sold.

In 2021 total sales volume are 3,47,632 units are sold.

WHAT IS THE SHARE VOLUME OF VEHICLES IN 2020-21 ?
Tata and other brand vehicles

India is the primary market for Tata and other brand vehicles (including vehicle financing).
During FY 2020-21, the Indian automotive sector was impacted by several challenges,
including COVID-19 pandemic, subdued demand, weak consumer sentiment and supply
disruptions. The COVID-19 pandemic significantly impacted our sales in India in the first
quarter of FY 2020-21, although some recovery was observed beginning with the second
quarter of FY 2020-21.

The following table sets forth our total wholesale sales worldwide of Tata Commercial
Vehicles and Tata Passenger Vehicles:

Of the 4,90,151 units sold overall in FY 2020-21, the Company sold 4,63,736 units of Tata
and other brand vehicles in India and 26,415 units outside India, compared to 4,48,614
units and 36,897 units, respectively in FY 2019-20.

We sold 4,90,151 units of Tata Commercial Vehicles and Tata Passenger Vehicles and
3,47,632 units (excluding wholesales from the China Joint Venture) of Jaguar Land Rover
vehicles in FY 2020- 21. In terms of units sold, our largest market was India where we
sold 4,63,736 and 4,48,614 units during FY 2020-21 and FY 2019-20, respectively
(constituting 55.4% and 46.7% of total sales in FY 2020-21 and FY 2019-20,
respectively), followed by North America, where we sold 93,759 units and 1,35,766 units
in FY 2020-21 and FY 2019- 20, respectively (constituting 11.2% and 14.1% of total sales
in FY 2020-21 and FY 2019-
20, respectively).
WHAT IS THE SHARE VOLUME OF VEHICLES IN 2019-20 ?

We maintained our leadership position in the Commercial Vehicle category in India, which was
characterized by increased competition during the year. The Passenger Vehicle market also
continued to be subject to intense competition.

The following table sets forth our market share in various categories in the Indian market based
on TML wholesale volumes:
Industry-wide sales of Passenger cars in India decreased by 9.0% in FY 2020-21, compared
to a 23.6% decline in FY 2019-20, while Utility Vehicles sales increased by 11.6% in FY
2020-21 compared to marginal increase in FY 2019-20. While overall industry sales were
lower than in FY 2019-20, the trend of preference towards personal mobility reduced the
overall impact of slowdown. TML Passenger vehicle sales increased by 68.5% to 2,22,074
units in FY 2020-21 compared to 1,31,796 units in FY 2019-20. Tata Passenger Vehicle
sales in India increased by 62.8% to 2,22,075 units in FY 2020-21 from 1,36,446 units
reflecting a strong response for the New Forever Range. Retail sales marginally
outnumbered wholesale sales, thereby reaffirming strong demand and thin pipeline
inventory at our dealers. In Passenger cars category, TML sales increased by 89.2% to
1,35,680 units in FY 2020-21 compared to 71,719 units in FY 2019-20. Tatabrand vehicles
sales increased to 1,35,681 units in FY 2020-21, compared to 75,781 units in FY 2019-20.
During FY 2020-21, we launched refreshed variants of products, including Altroz I Turbo, Altroz
XM and Tiago XTA. Our market share for Passenger Cars in India was higher at 8.8% in FY 2020-21,
compared to 4.2% in FY 2019-20. In the Utility Vehicles category, TML sales increased by 43.8% to
86,394 units in FY 2020-21 compared to 60,077 units in FY 2019-20 and Tata-brand vehicles sales
increased to 86,394 units in FY 2020-21 compared to 60,665 units in FY 2019-20 representing a
strong demand for Tata Nexon and Tata Harrier. Our market share of Utility Vehicles in India has
increased and stands at 7.4% in FY 2020-21, compared to 5.6% in FY 2019-20. In FY 2020-21, we
launched Tata Safari and refreshed variants for Tata Nexon and Harrier. We launched Tata Safari
in January 2021 and sold 3,855 units in FY 2020-21. Tata Motors continued to remain market
leader in electric vehicles in FY 2020-21 with a 71% share due to a strong response for Nexon EV.

Commercial vehicles in india

Industry sales of commercial vehicles decreased by 21.7% to 5,69,307 units in FY 2020-21

from 7,26,762 units in FY 2019-20. The following table sets forth the breakup of the
wholesale sales in various categories on standalone basis.
The Commercial Vehicle industry continued to be impacted in FY 2020-21, because of the
COVID-19 pandemic, lower freight utilizations, difficulties in obtaining financing and
some hesitation due to rising costs for BS VI vehicles.

MHCVs in India

Sales of TML in the MHCVs category in India decreased by 22.9% to 58,528 units in FY
2020-21 compared to 75,918 units in FY 2019-20 and Tatabrand vehicle sales decreased to
58,521 units in FY 2020-21, compared to 75,848 units in FY 2019-20. The MHCV
segment witnessed a sharp decline in first quarter of FY 2020-21, thereby sequentially
improving quarteron-quarter, as the economy unlocked and infrastructure projects, housing
construction and mining segment picked up. We continued to witness strong demand in
this segment and increased our market share by 70 bps to 58.1% in FY 2020-21.

ILCVs in India

Sales of TML in the ILCVs category in India decreased by 10.1% to 37,826 units in FY
2020-21 compared to 42,077 units in FY 2019-20 and Tatabrand vehicle sales decreased to
37,826 units in FY 2020-21, from 42,052 units in FY 2019-20.
SCVs and Pickups in India

Sales in SCVs & Pick Ups category in India of Tata-brand vehicle decreased by 12.2% to
1,36,835 units in FY 2020-21 from 1,55,790 units in FY 2019- 20. Amongst all segments
in commercial vehicles, the SCV and Pick Up category witnessed a lower decline because
of increased demand from e-commerce players and necessity for last mile distribution.
TML received a significant order of 6,413 Tata Ace Gold vehicles from Andhra Pradesh
State Civil Supplies Corporation.

Operating results

All financial information discussed in this section is derived from our Audited
Consolidated Financial Statements.

Overview

In FY 2020-21 income from operations including finance revenues decreased by 4.3% to `2,49,795
crores in FY 2020-21 from `2,61,068 crores in FY 2019-20. This decrease was mainly attributable
to lower sales volumes from both Tata Motors and Jaguar Land Rover and partially offset by a
favorable currency translation from GBP to INR and increase in average selling price per unit
under BS VI norms.
Automotive operations

Automotive operations are our most significant segment, accounting for 99.4% and 99.3%
of our total revenues in FY 2020-21 and FY 2019-20, respectively. In FY 2020-21,
revenue from automotive operations before inter-segment eliminations was `2,48,181
crores compared to `2,59,292 crores in FY 2019- 20.
In FY 2020-21, Jaguar Land Rover contributed 78% of our total automotive revenue
compared to 80% in FY 2019-20 (before intrasegment elimination) and the remaining 22%
was contributed by Tata and other brand vehicles and Vehicle Financing in FY 2020- 21,
compared to 20% in FY 2019-20. The following table sets forth selected data from Tata
and other brand vehicles (including vehicle financing) and Jaguar Land Rover in FY 2020-
21 and FY 2019-20 and the percentage change from period to period (before intra-segment
eliminations) are set forth in the table below.
CHAPTER – V

RESEARCH FINDINGS AND CONCLUSIONS

This project help me a lot in knowing 8ious new concepts which I didn’t
know in past(before this research).

Some of the things I found out from this project are:

 I found out that various kinds of benefits that company derives by using this
market segmentation segmentation strategy concept.
 I found out that market segmentation strategy helps in better pricing
strategy with a practical example in case of tata motors. For example: The
revenue division according to different market segments show that Jaguar
and lanrover cars which come under premium and luxuary segment of the
market generates a large revenue which is bigger than any other segments
of the market.
 This is possible because tata motors identify the segment of the market
which can spend a huge amount of money on its products,that is premium
and luxury segment.so tata motors prices its products which comes under
the segment with a very high value.though the features of this cars varies
from normal cars,the profit margin in these cars is also huge.
 I found out how market segmentation helped tata motors in appropriating
the features of the cars for different segments of the market.
 I found out how tata motors use this segmentation strategy to penetrate into
the market by covering all the segements of the market,by producing its
products according to their purchasing power,lifestyle,loyality,their
financial statusand their culture and traditions.
 By this research I found out different ways of segmenting the market.
 By this research I found out how tata motors is using segmenting the market
using different methods.
 Through this research I found out that tata motors is designing its products
according to the various market segments needs and wants.
SUGGESSIONS AND

RECOMMENDATIONS
Suggessions:

After doing so much research and preparing the report I have

some suggestions reguarding market segmentation strategy they
are following:
 Through this research I have found out that tata motors is not targeting the
rural segment in the market though there is lot of scope in it.it would be
better If the tata motors can produce products usefull for village people like
tractors
,agriculture equipments.
 Through this research I also found out that tata motors
 In the process of making research I also found out that tata nano has
become a failure due to its drawbacks which finally resulted in neglecting
poor and middle class segments.so I suggest tata motors to produce cars like
tata nano after doing various rectifications found and target the poor and
middle class segments again
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