Jegadeesan

Priyatharisini R

Sriram BSK

Uthra G

Vivekh

BIG THINGS COME IN SMALL PACKAGES

Launched in May 2005Inspired from Highly successful Japanese

Minitruck Kei Truck (introduced 1977) and Korean Kia Bonga (1980)

Tata Ace is priced in the range Rs 2.25 lakh for BS II (ex-showroom NCR) Rs 2.35 lakh for BS III (ex-showroom NCR)

Tata Ace is powered by a small and efficient 16bhp 700cc IDI diesel engine

Suitable for both rural and urban useTata Ace sets the trend as the country’s first

high performance, low maintenance safe and reliable mini-truck sporty car-like features to ensure comfort in ride and

handling 04/10/23 2Tata ACE - Team 10-Thiagarajar School of

Management

FY Sales Figures

2005-2006 30,000

2006-2007 70,000

2007-2008 89,000

2008-2009 81,000

2009-2010 110,032 (With Tata Magic 160,000)

2010-Nov’11 160,000 (upto 30-Nov-2010)

Aiming for 250,000 this year04/10/23 3

Tata ACE - Team 10-Thiagarajar School of Management

Ref: http://www.wheelosphere.org/little-elephant-tata-ace-sales-cross-100000-in-fy-2010/

The 3 wheelers had the following issueswore a rustic lookuncomfortable not very safe for carrying load at high speed

Though the price was less, the operating cost was very high

Need for company: blue ocean strategy

04/10/23 4Tata ACE - Team 10-Thiagarajar School of

Management

Quadrilateral project -led to creation of large number of expressways and widened many of the existing highways

A portion of traffic moved from railways to roads and pushed the demand for heavy and light commercial vehicles

Urbanization- cities pushed their geographical boundaries

04/10/23 5Tata ACE - Team 10-Thiagarajar School of

Management

Increasing population and growth in the organized retail sector with the entry of large players

Social status for UsersLast mile distribution vehicleTATA motors identified these macroeconomic

trends Realized that there will be an increased

demand for LCVs in urban areas

04/10/23 6Tata ACE - Team 10-Thiagarajar School of

Management

TATA motors wanted to reduce their dependence on the MCV and HCV segments

They started losing their market share in these segments in the late 90s

TATA motors wanted to diversify The launch of their LCV, TATA ACE helped

in achieving these goalsDuring the financial meltdown (2008-09),

even as the MCV &HCV segments in India shrank by 33% compared to the previous year, Ace in the LCV segment fell by just 12%.

04/10/23 7Tata ACE - Team 10-Thiagarajar School of

Management

04/10/23 8Tata ACE - Team 10-Thiagarajar School of

Management

Subaru Sambar Honda Acty

Mitsubishi Minicab Suzuki Carry

Basic needs of small scale transportersCustomers in rural areas attached

prestige to their transport vehicles SafetyComfort to the driverSpeedAbility to drive in the narrow lanesTight Turning Radius Low operating costs

04/10/23 9Tata ACE - Team 10-Thiagarajar School of

Management

04/10/23Tata ACE - Team 10-Thiagarajar School of

Management 10

56

57

58

59

60

61

62

63

64

65

2005 2007 2009

Trend in Market ShareSource: Tata Motors FinancialsReports

-20

0

20

40

60

80

100

120

140

2007 2009 2011Targeted

04/10/23Tata ACE - Team 10-Thiagarajar

School of Management 11

Sales Growth AchievedSource: Tata Motors Financials Reports

Target segment – Individual CustomersTarget customers: who expect a high Return

On Investment (ROI) along with safety, comfort, and status

136,000 Three wheeler SCVs were sold in 2005

With 20% attrition towards ACE and attracting another 25,000 customers, market is very attractive to enter

04/10/23 12Tata ACE - Team 10-Thiagarajar School of

Management

Value propositionHigh Performance with car-like features in

safety, comfort

04/10/23 13Tata ACE - Team 10-Thiagarajar School of

Management

Price was higher as compared to competitors but the company supported it on the basis of the value provided

Initially a discount of 4000 Rs was given80% of the vehicle has been outsourced to

keep costs low without

04/10/23 14Tata ACE - Team 10-Thiagarajar School of

Management

Initial Launch Company launched ACE in the south first through its

Dealers and Dealer BranchesDistribution network: Hub & Spoke model

Existing dealership acted as hubs & set up IS dealerships

Location close to target markets Plant located in Pune at the time of launch Target markets (southern and western regions)

Current Availability 26 Commercial vehicle dealers in Tamilnadu Available in all 28 states 1700 Tata Ace specific dealers all over India

04/10/23 15Tata ACE - Team 10-Thiagarajar School of

Management

Value propositionHigh performance with car like featuresAdvertisement with Tag Line “Kutti Yanai”A symbol powerA symbol of reliability

04/10/23 16Tata ACE - Team 10-Thiagarajar School of

Management

Benefit sought Behavioral SegmentationNeed basedFocus on comfort and safety

Demographic Customer profile SegmentationIndividual Vehicle ownersFleet OwnersInstitutional Customers

04/10/23 17Tata ACE - Team 10-Thiagarajar School of

Management

04/10/23 18Tata ACE - Team 10-Thiagarajar School of Management

Strength1.Strong brand name2.Leverage of First mover advantage3.Good logistic management4.Continuous innovation

Opportunities1.Rural market2.High growth rate of LCV segment

Weakness1.High product cost2.After sales service3.Complaints on gear shifting

Threats1.Increased competition due to new entrants

Piaggio - Ape, QuargoBajaj - Tempo, Max series, RE600Mahindra & Mahindra - MN 25 & MN 31

trucks, MN40, 49 trucks (Navistar Inc USA), Maxximo & GIO

Force motors - Trump Trax, Kargo kingHyundai motor – Porter

04/10/23 19Tata ACE - Team 10-Thiagarajar School of

Management

Model T product development was based on “Traditional Physical Process Sequence”1. Design product, procure and make2. Price, sell, promote, distribute and service

While Tata ACE product development was based on the latest marketing strategy, “Value Creation and Delivery Sequence”1. Customer Segmentation, product focus, value

positioning2. Product development, service development,

pricing, sourcing/making, distribution, servicing

3. Sales force, sales promotion, advertising04/10/23 20

Tata ACE - Team 10-Thiagarajar School of Management

1. Market sensing process Identified the needs of potential customers

like Traders, Truck drivers and Farmers

2. Blue ocean strategy and Rural marketing activities1. Tie-up with Godrej Aadhar and other rural

dealers

04/10/23 21Tata ACE - Team 10-Thiagarajar School of

Management

Functional gratifications1. Speed2. Capacity3. Service points4. Easy navigation in roads5. Low maintenance and operating costs

Sensory gratifications1. Sleek appearance2. Position as “ truck in mini size” 3. Comfort

04/10/23 22Tata ACE - Team 10-Thiagarajar School of

Management

Extended as passenger vehicle as Tata MagicDesigned to larger tyres to acquire greater

speedImproved fuel efficiency by 6-10%Mileage 25kmplSmaller model of Tata Penquin for Rural market

Reference:1. www.tatamotors.com2. www.moneycontrol.com3. www.rediff.com

04/10/23 23Tata ACE - Team 10-Thiagarajar School of

Management

04/10/23 24Tata ACE - Team 10-Thiagarajar School of

Management