Tata Ace

Topics: Marketing, Tata Motors, Strategic management Pages: 7 (1088 words) Published: January 28, 2013
Group A5

Guru Gobind Singh ji
Aroon Sheshadari (10010) Piyush Kakkar (10030) Rahul Malhotra(10035) Vikram Arora(10057) Loma P Desai (10086) Vishwas Sharma (10119)

Strategy for sustaining momentum for Tata Ace

Brief Background of Ace
y India's first mini truck y Launched in May 2005 y Tag line Small is Big y Answer to the marketing myopia of three wheelers

Idea behind launching Tata Ace
 Market Situation
y y


Govt plans of road expansion. High GDP growth rate positively correlated with truck penetration. High probability of increased demand in LCV segment.

 Company Situation


Tata product portfolio lacked greater than 45 tons and sub one ton vehicles. Scope of enhancing market share

Gap Analysis based on Market Research
Demand Side Gap : Large and Medium Trucks Restrictions in entering cities during peak hours ongested and narro lanes in commercial areas Demand Side Gap : Three Wheelers Banned in certain metros and bigger cities Restrictions on high ays and express ays due to speed and safety concerns Failure in enhancing the social image of the user Supply Side Gap Portfolio lacking sub 2 ton offerings Needed immunity against the cyclical trends in commercial vehicles segment

Higher per unit transportation cost and poor conditions of roads makes them unsuitable for rural customers

Marketing Strategy- Segmentation &Target




Tata Motors focused on capturing these two segments.

Marketing Strategy -Positioning
 POSITIONING y Ace was positioned as a vehicle that offered the

price, fuel efficiency, and maneuverability of a three wheeler y but with the safety, durability, additional payload, and

comfort of a four-wheeled truck.

Sourcing & Production Strategy
y Aggregate Outsourcing
Sourcing complete assemblies such as rear axle frame rather than assembling these modules in-house from outsourced costs

y E-Sourcing
Company posted its requirements on intranet site where pre qualified suppliers could review specs and submit bids.

y Manufacturing Facility Location-Pune
Chose underutilized existing plant at Pune which allowed company to tap existing vendor base and savings on outbound freight costs since 70% of Ace s demand came from South and West India.

LCV Market* in 2006 post Ace s launch
3% 2% 6% Tata Motors 21% Mahindra & Mahindra Swaraj Mazda Eicher 68% Others


LCV market consists of 3 wheelers as well as 4 wheelers

Data Source: www.siamindia.com www.tatamotors.com

LCV Market* in 2010
2% 2% 4% Tata Motors 31% 61% Mahindra & Mahindra Swaraj Mazda Eicher

Data Source: www.siamindia.com www.tatamotors.com,

Clearly Tata s have lost market share to M & M

Porter s Five force Model-2006
Threat of substitutes

Power of suppliers

Rivalry Among competitors

Power of Buyers

Entry of new competitors

Porter s Five force Model-2010
Threat of substitutes

Power of suppliers

Rivalry Among competitors

Power of Buyers

Entry of new competitors


Proposed Strategies
y For regaining lost market share y Internationalization Strategies

For regaining lost market share
Marketing Strategies For North and East India
y Aggressive marketing campaign y Design local advertisements y Road shows

For South and West
Loyalty bonus or exchange offer Financing facility through Tata Finance for rural penetration

For regaining lost market share
y Leveraging strong dealership network to target fleet

owners. y Channel expansion
y Hub and Spoke Model
1S dealership

1S dealership

3S dealership

1S dealership

1S dealership

Internationalization Strategies
Resource Based View
roduct Reliability

Service Networ

hannel Reach

Sustainable competitive advantage lies not in one, but a combination of multiple resources, each of which individually...

References: y www.tatamotors.com (annual reports) y www.siamindia.com y www.wikipedia.com y HBR case study Tata Motors: The Tata Ace by Krishna
G. Palepu, Vishnu Srinivasan 21 pages. Publication date: Sep 18, 2007. Prod. #: 108011-PDF-ENG y http://www.business-standard.com/india/news/tatasace-mini-truck-suddenly-gets-competition/396000/
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