roshan pandey,roll no-38

8/6/2019 Roshan Pandey,Roll No-38

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INTRODUCTION:

ABOUT TATA COMPANY:

The TATA company was established in 1968, Jamsedji Tata is the founder of thecompany.Ratan Tata is the present chairman of the company. The company has beendeveloped by five generations of the TATA family. The company is one of the mostsuccessfull companies in India. It was the first company to establish TCS soft ware setup in India. Besides India it has delivery centers in Uk,US, hungary,china etc also. Theindias first indigenously developed car was produced by the Tatas in 1998 the Indica.The companies latest innovation the Nano worlds lowest prised car. Tata Steel, TataMotors, Taj Hotels, Tata Tea, Tata Communications are the major part of the Tatagroups. There are about 114 companies and business organizations under the differentsectors out of which 27 have been publicly listed.

The company has also gained significant international recognition. The company hasbusiness transactions and operations in about 85 countries all over the world. It hasgained many credentials recently for its business success. They are not only known fortheir successful business but they also actively participate in contributing to thedevelopment of the society. They provide funds for non profit organizations, researchactivites, charity trusts etc. About 4% of the total revenue of the company is contributedtowards the society and charity aspects.


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TATA MOTORS:


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Tata Motors is the largest group of the Tata group of companies. It stands as thesecond largest passenger car manufacturer in India and globally 5th largest medium andheavy commercial vehicles manufacturer. The Headquaters of the company is locatedin Mumbai India employing about 33500 people.

The Tata Motor has been established in 1945 in collaboration with the Daimler Benz agerman company. The company was established as a locomotive manufacturing unitand then it has expanded its activities to commercial vehicles in 1954. In 1998 TataIndica was launched, which was successful in India and it was exported to Europeancountries. . British Jaguar Land Rover were recently acquired by the company. Threemore vehicles Station Wagon, Tata Estate, Tata sumo were launched in 1989,1992 and

1994. The Tata aslo acts as distributers of the Fiat branded cars in India.in 2005 theinter city buses were introduced in india, after the acquesition of 21% of the Aragoneseand the Hispano carrocera bus manufacturing companies share value.

The company has about six R&D centers located in India, UK, south korea and spain.The vehicles are largely exported to the European countries, Africa, middle east andsouth America. The company has the most potential human resource with about 1400engineers and scientists working especially towards the research and the development.The commercialbeing manufactured by the company fall under a broad category of thelight two-tonne truck to multi-axle vehicles in the above 40-tonne are manufactured bythe company. The brazil based manufacturer of buses Marcopolo and the fiat are thetwo companies that are working in collaboration with the Tata Motors.

The company not only succeeded in launching many potential products in to the marketit also has the concern about the enviroment. They are known to be committed towardsthe social responsibilities.2% of the annual turnover of the company is spent on theResearch and Development. Their research mainly focuses on developing enviromentsensitive technology . They try to reduce the pollution by building clean engines,extended life fuels. The emission check technology was introduced in India incollaboration with the US based company Cummins engines in 1992. It has alsodeveloped an advanced emission technology research unit..

ABOUT TATA NANO:

The NANO is known as The Peoples Car. The main aim for developing the car was toprovide the low economic group with the advantage of the cars which is considered tobe luxury in countries like India were other cars may not be feasible. Because of thecost of the car the potential competitors of the car would be the two and the threewheelers. The main reason for the global attention towards the car was due to its lowprice. The initiative for the development of the car was brought by the chairman of the


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company Ratan Tata. The main motive for the developing the idea was the hugepopulation in India possessing tow and three wheelers. The idea has faced initialcriticism in terms of compromising the quality to bring down the cost. The TATA wasdetermined to maintain the quality and the alterations in the manufacturing design andideas and innovations were taken from all the resources possible. The Tata Motors

have been reported to file 34 patents during the development of the Nano.

The car was built using a rear engine which would help increasing space inside thevehicle and it was similar to the Fiat 500 original car. To reduce the cost of the car theair conditioning, power windows, the boot, one sided view mirror were needed to becompromised. The wheels have generally four lugs which were cut down to three in theNANO model and cost effective biodegradable plastic was used instead of the solidmetal body. The car can give a milage of 4.5 L/100km on the urban roads and3.85L/100Km on highways. The vehicle is build using a novel technology a nonopposing engine using petrol with two cylinders and one balance shaft. The technologyfor developing the vehicle was tweaked so that the untouched group of large consumers

would be targeted. The initial production target set by the company was 250000 unitsper year.

BRAND VALUE:

The reputation the Tata company carries, its income, revenue generated and the loyaltywon from its customers and its market share contributes towards the brand value. It hasbeen 140 years that the TATA company has been established in India. The revenue ofthe company was around $70.8 billion . The company is recently given 51st positionamong the top 100 and Its brand was valued at $9.92 billion by an internationalconsultancy firm Brand finance .It stood in 13 th position among the 25th most innovativecompanies assessed by the business week magazine.

The TATA Motors holds 33.2 % market share of automobiles in 2007.According to theOICA report in 2007 it has 70% market share in domestic commercial segment areaand0.81% of the worlds market. Though the company has its basic business is in Indiatheir business is extended worldwide significantly. The company has about 357,000international employees. The company is known for its ethics and values. There areseven major areas to which the companies business is extended. They have operationsin communications and information technology, engineering, materials, they alsoprovide services, chemicals, energy sectors are also covered by the company and italso functions in consumer products. The company is awarded with the 11th positionamong the worlds most reputable companies. annual survey by the Reputation Institutein 2009 which included 500 global organizations. The company is the worlds secondlargest truck and the fourth largest bus manufacturer

The other potential competitors the company had when it was first launched wasHindustan Motors LTD and Premier automobile ltd. Due to the import restrictions theautomobiles available then were only the ambassador and padmini by these twocompanies manufactured under licence of foriegn companies in India. Then in 1980s


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the government in a joint venture with the sujuki motors launched the Maruti 800 andmaruti omni. The companies were mainly focusing on the luxury segment . In 1983 theregulations for automobiles in India have been liberalized which led many foreigncompanies to enter the passenger car market. The indica was launched in 1994 the carmarket in India could be segmented as the super luxory, medium/luxory segment and

the economic/small car segment. The Indica was a challenging product with the interiorof an ambassador, size of the zen and cost of maruti 800.

The car was launched and it was success full and the company kept its brand value bymanufacturing low cost automobiles not compromising with the required quality.

The NANO was started to develop from 2005. It was targeted to the large group ofmiddle class people in the country using the two and three wheeled vehicles. The TataNano won accolades all over the world the car was compared to the fords model Twhich about 100 yeas ago has changed the definition of the personalized transportation.The success of the car could also be attributed to the value that the company has

created to its brand by manufacturing the quality and efficient products since it wasestablished and the market strategies.

THE INTENDED TARGET MARKET:

Tata motors has a targeted market approach. Tata like any other multinational hastargeted the middle income group population, as they are larger in number. In order tosell a product a company has to first make public realize there importance. When aconsumer chooses to buy a certain product, it should impact the consumer in such away that he or her relates to it. Secondly the company should not compromise on thesafety and qualities of the product and make the consumer satisfaction their priority.

The objective behind the success of gaining popularity among middle-incomepopulation is that, companies can launch the innovation at a modified level instead ofstoring it in R&D. Tata has thus stated that is very effective to sell low cost cars withlower margins ,when the demand for the product is higher in volume.

The Nano advantage is a considerable issue ,as it is being produced by a multinational ,whose products range from a wide range of utilities to chemical composites andcommunication services. Thus consumers will judge the Nano based on the companysreputation in other markets. Potential customers also know Tata from its socio-economic projects to improve local education and health facilities in the neighborhood ofTatas plants. The Product created by the company is made for the middle class group,the product was planned such that it would provide quality and features better thanthose which are already present. The reduced cost should not compromise on thequality and the safety. The designe was planned such that it would provide consumerswith better product at the affordable price. The Price of the product was decided to bearound $3000 including the taxes and other costs as the dealer margin andtransportation costs. The raise in steal price did not effect the price as the plastic wasused instead of the steal and even the manufacturing cost to the company was low. The


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engines used are the simple fuel efficient small engines with the efficiency of 50 milesper gallon. The efficiency is comparably more to other small European cars.

Promotion of the product was not a problem to the company .with its innovative ides andthe low price tag attached the product attracted wide media attention. The social

relationships were build with its potential customers and as the company has widerange of products ranging from steel, chemical, services to the consumer based goods.The quality of the products would be assessed depending the products alreadyavailable with the company and experience of the customers.

The distribution system opted by the company was the open distribution system. Themain parts were decided to be manufactured in its firms and the parts are to betransported and assembled in places closer to the customers. The companiesdistribution is also mainly aimed at reaching the large, widely dispersed rural loweconomy population.

The market skimming strategy is followed where it initially places price that would bringlarge demand but then with the understanding of the response and the trend changesthe cost of the product is suitably fixed changing its characteristics according to theneeds of the consumers.

PRODUCT RANGE:

The company has manufactured three versions of the car the standard nano, CX andthe LX version. The standard version does not have the special accessories present inthe CX and the LX version .The powered windows are not present in the standardversion where manually operated windows are present to cut down the cost, airconditioning and the central locking system are also present only in the CX and LXversion.

The Tata Nano standard version is priced at 123000 rupees without any extra costs.The deluxe Tata Nano CX costs 151000 which has air conditioning and the LX versioncosts 172000 rupees and has power windows central locking, fabric seats along withthe air conditioning. The product is mainly with petrol utilizing engines.

The models with many other varients are being planned to be launched. The cars withdiesel based engines are expected. The use of compressed air engine is also beingstudied, the work is being carried out in collaboration with Moteur DevelopmentInternational for this purpose.

The plan to develop e NANO utilizing solar or electric engines is also not way behind.The development of gasoline version is also worked it to.

BRAND IMAGE:


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Tata is now looking forward to introduce newer machines and expand its businessnationally and internationally. One such innovative example is the new Nano and alsodeveloped Eka a super computer model. Tata companies have a strong anchorage inIndia and dwelling towards being a multinational. There strategy is significant and will beconsistent enough to achieve excellence and innovation. Thus a strong market enables

the company to sustain its brand image and also have a competitive edge over othercompanies..The company has tried to reach its consumers by understanding the economic state ofthe people and the needs of the consumers. They play the role of the market creator .The company is not only concerned with the development of quality products for itsconsumers but its responsibility extends to the social concerns about the shareholders,consumers and employees. The profit making is not the only interest of the company italso is necessary to look in to the ethical and social responsibilities. These are not thediscreet activities of the companies any more they are the firms business strategies asimportant as any operational functions.

With its focus on novel innovations designed to reach the necessities of the largepopulation groups they have become the value creators. Unlike the conventional firmsthe competition could not effect them. They create a great market space by focusing oninnovations rather than winning their opponent. Their brand image enables them toplace their price not as the Schumpeterian rents but they are based on the marketskimming.

The Brand Image of the Tata company could be attributed to its strategies which help inmaintaining the quality and being successful in the market. The company has thecapacity to sense the changes in the environment the changes occurring in the marketand the changing interests and demands of the company. The companies capacity tocontinuously produce novel ideas bestows with this capacity. The other important factoris the ability to blend the information available from the internal and the external sourcesthat would enable to succeed in the market to maintain its position in market.

Tata is now looking forward to introduce newer machines and expand its businessnationally and internationally. One such innovative example is the new Nano and alsodeveloped Eka a super computer model. Tata companies have a strong anchorage inIndia and dwelling towards being a multinational. There strategy is significant and will beconsistent enough to achieve excellence and innovation. Thus a strong market enablesthe company to sustain its brand image and also have a competitive edge over othercompanies.

REASONS FOR FAILURE:

1:There was a big hype before the production,as many peasants refused to hand over their

land to Tata Group which was planning to lay a assembling plant which would manufacture

Nano.Mostly the land was owned by illetrate peasants.


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2:As it was reported back in March of this year,the Nano suffered isolated reports of catching

fire,forcing Tata to offer a safety recall.

3:The Nano is aimed squarely at the poor,but this group also finds it nearly impossible to raise

finances at affordable levels.

4:those who have arranged finance they are rather opting to buy pre-used cars,than buying a new Nano

STRENGTHS AND WEAKNESSES:

Tata motors can be branded as a major automobile manufacturer. The company has asix hundred million dollar revenue business in India alone. The companys market sharehas substantially increased since the last four years.

One of the positives to Tata motors is, its customer satisfaction. A survey showed that68% of customers were satisfied from the service provided by Tata motors. Thisdoubled up the sales growth. The Tata company has a strong market position, its theIndias largest automobile company with revenue of $6397.8 million dollars during theyear 2006-2007. The companies four wheeler market share is increased by 27.7% inthe year 2007.


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The tata motors have launched large number of products the three wheeler Magic,station wagon, tata sumo,safari decor, indica etc these succesfull products wouldenhance the companies portfolio and increase the brand value of the company.

The strengths of the Tata nano is that is the first of its kind with such a low price sets a

bench mark. About 41 new patents are known to be filed during the development of theNano .its eco friendly and fuel efficiency is also high. The internal space is increased by21% and external space is reduced by 8% than maruti 800. The variometric gearsystem is being used to manufacture which reduces the torque.

The Tata group of company launched the Tata motors in collaboration with the benzethe international techniques and standards of the development of Nano and its otherproducts was easily achieved. Its alliance with the ford was also one of its strength as itcould enhance the companies reach to the international market and its portfolio couldalso be enhanced. The positioning of the NANO is solely dependent on the price andthe price is low compared to the other alternatives all over the world attracting a large

share of consumers.The weakness of the company are that it has to cut down the modern facilities toaccount for the low price, the model cant be used for the hilly areas and poor trafficcontrol. Poor engine cooling and overheating are the other drawbacks of the model.

The cash flows of the company have been decreased in the year 2007 by 26% whencompared to 2007 .The negatives that count are mostly negligible, except for the raisingdiesel prices and rise in the prices of raw materials. Along with the raising Indian percapita income. Tough the pricing of the company attracts large consumers the narrowpricing of the product is a drawback. The company might have competitivedisadvantage due to the weak performance and share in the luxury segment of themotors.

The shut down of Tata motors Nano project at Singur lead to a great speculation. Therewas a significant decrease in the sale of automobiles in the consecutive year.

RECOMMENDATIONS:

The Nano has created a niche market and its the worlds cheapest car which could winmany royalties and patents. The company can expand its production even to the luxurysegment, which would help to better withstand its competitors .the other variabilities ifbrought in the nano would help in further penetrating the market. . The other variationsin the model with diesel engines and other modifications could further increase themarket share and the model could be further modified to fit for the hilly areas and toreduce the traffic conjesions.

CONCLUSIONS:

The car has brought about a new revolution in the personalized transport system. Theproduct was placed in to market targeting the large consumer group and the time of the


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launching the product is also well maintained as the recession hit the economy of manypeople. The increased demand for the product may also increase the employmentoppertunities. The tata motors have made a appreciable market survey and understoodthe needs of its consumers and the NANO has proved itself to be really a peoples car

roshan pandey,roll no-38

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