Tata Motors: The Tata Ace

Should Tata Motors saturate the Indian regions in which the Ace had already
been launched or dispatch the limited production run to a wider market to
establish a presence? Whether and which export markets to tap?
• Given the fact that Tata has supply constraints due to using its existing facilities to produce Tata Ace, and that it has already
launched in South and West, it should look to expand in the remaining geographies (I.e., East & North) first and have a pan India
market presence.

• Only after establishing its presence in India should Tata look to venture abroad. If the supply situation permits, it should expand to
other emerging markets in the subcontinent such as Bangladesh, Pakistan and Nepal as these countries have similar infrastructure
and needs.

• If going into more developed markets, then it should avoid European and American countries as the amount of changes that Tata
Ace would require to fit into the demand there would far exceed the capacity in its current state.

• Among other countries, Tata can expand into South Africa as it already has a strong brand value and well developed distribution
network
 How should Tata respond to competition- current and potential? Which are Tata
Ace’s sustainable competitive advantages given new entrants in the market?

At the moment there are not any real competitors but companies like Bajaj are planning to come up with counterparts in the near
future. So Tata can spend on research and come up with innovations that will help Ace stand out from the eventual competition

Tata has the below competitive advantages in the market

• Safety: Tata developed Ace with the Indian cargo transport and road conditions in mind which made moving overloaded

vehicles on underdeveloped and congested roads easier.

• Competitive Price: Consumers considered Ace a better value due to it being a 4 wheeler that was priced close to 3 wheelers.

• High Quality: Ace offered a different structure from its competitors due which, even overloading it which prevented cracks.

This gave consumers the ride quality of a car or a mini truck.

• Emotional Connect: The haathi campaign that signified “Small is big”, gave customers the stability and trust of “Big Tata” in a

small package. This really resonated with the audiences.

• Unique After Sales: The Suvidham campaign enabled customers living in remote areas to get their Aces repaired in any rural

car repair.

• Better Financing Options: Tata provided financing for Ace which was followed by many banks and 3 rd party provided 5 year

loans instead of the 3 year industry norm for 3 wheelers.

How would a passenger variant of the Ace fare in the market against Omni?

• Diesel option: This will make Ace a cheaper car to run which is really important in a price sensitive market such as India. Omni on
the other hand has just a petrol option.

• Competitive pricing: Using similar pricing strategy as Ace, Tata can give Omni a run for it’s money if it is able to set a cheaper price
tag on it’s vehicle and present it as a better value just like Ace.

• Easy Repairability: Just like Ace, Tata can provide repair options at every corner which will further enrich the customer experience
and strengthen the brand against an already established Omni

• Emotional Connect: If Tata is able to strike a similar reaction in the minds of customers like Ace, then it can sway them from
choosing only Omni for their needs
Which Product extensions should Tata pursue? What synergies can the new
products derive from Ace’s market understanding, manufacturing, marketing
etc.?

As part of product extensions Tata can explore the below:

• Tata can add various elements on Ace such as Water tank, garbage collection so that areas with poor connectivity can be serviced
in a much easier way. With these utilities, it can tie up with local municipalities and create a new demand for these extensions in
the from of government contracts just like it has for Buses. This particular extension can take heed from the innovative
manufacturing strategy that helped Tata manufacture Ace using aggregate sourcing

• Tata can also extend the product to a passenger vehicle and compete with the likes of Omni. Tata can price it aggressively to
disrupt Omni’s position in the market with improvements like a CNG option which would make it extremely popular as a taxi
vehicle as well among other uses. In this case, Tata can use its marketing experience to strike a chord with consumers to convince
them from switching to Tata from a long standing brand of Omni.

All these new products can benefit from the intensive market research done by Tata, an efficient distribution network, high quality
standards and the brand value to compete in all these new segments