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Tata Motors Marketing Strategies

Paper Type: Free Essay Subject: Marketing
Wordcount: 5338 words Published: 6th Jun 2017

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TATA Motors is one of the leading automobile companies in India and is a subsidiary to TATA Group, which is one of the leading business groups in India. The company diversifies its business into three segments which are commercial vehicles, utility vehicles, and passenger vehicles. This is the only Indian company in the world which has the ability to produce all the segments of Vehicles right from Buses, Passengers cars, Trucks, Light commercial Vehicle (LCV), Heavy Commercial Vehicle (HCV), Medium commercial Vehicle (MCV). The company has almost around 24,000 employees. TATA Motors is the fifth largest heavy commercial vehicle manufacturer in the world. The company operates in maximum Asian countries and also in Spain and the United Kingdom.


Tata Motors was established in the 1945, by J. R. D. Tata and was been known as Tata Locomotive and Engineering Company to manufacture steam locomotives.

Then, in the year 1954, company got collaborated with the commercial vehicle manufactures of Germany, Daimler Benz. Later in the 1960, the name of the company got changed to Tata engineering and locomotive company from Tata Locomotive and Engineering company (TELCO). The company’s collaboration with Daimler Benz of Germany didn’t last very long and it was ended in the year 1969 and they started their own production of heavy commercial vehicles from the year 1983. In 1991, Tata Sierra was the first passenger car launched by TELCO. The Corporation also have an important bond with Cummins Engine to manufacture high horse power machines and environmental friendly engines for them. Later in the year 2000, company launched CNG buses. In the year 2003, the corporation and Phoenix Venture Holdings (PVH) signed a contract with Tata Engineering to distribute the company’s brand new Safari off-roader and Load beta pickup trucks in the UK and Irish Markets. Also Later in the same year, Company got renamed to Tata Motors and came out with 135 PS Safari (EXi) Petrol. It is the first company from the engineering sector of India to be listed in the New York Stock Exchange (September 2004) and also appeared as an international automobile company. In the unchanged year, the Daewoo Commercial Vehicles Company, which is South Korea’s second largest truck manufacturer, was acquired by Tata Motors. Furthermore, in the 2005, the corporation acquired a small stake of 21% in a renowned Spanish bus and coach manufacturer, Hispano Carro-cera and successfully the left over stake in 2009. Tata Motors in the year 2006, made a joint venture with a world-wide leader, Brazil-based Marco Polo that manufactures bodies of buses and coaches for India and few selected international arcades. Since 1961, Tata Motors has been successfully entering into international markets which started through exports. In the several countries of Europe, Africa, the Middle East, South East Asia, South Asia and South America the company has been promoting its commercial and passenger vehicles. It also has many assembly operations in joint venture in Kenya, Ukraine, Bangladesh, Russia, South Africa and Senegal. (Tata Motors, 2010)

Successively in 2008, the company went big and entered into exclusive car segment. Tata Motors acquired the Jaguar Land Rover businesses from Ford Motor for a net consideration of $2.5 billion.

In the unchanged year, Tata Motors revealed the most special and their biggest dream the People’s Car, Tata Nano, that India and the world have been looking forward to. In March 2009, Tata Nano was successfully launched, as it was intended, in India. The Nano brings a good level of comfort and safety in a car within the reach of thousands of families who belongs to middle-class/ lower middle class. The base model of the car has been priced at Rs.100,000 (excluding VAT and transportation cost).

In the 2009, the corporation entered in an innovative era in the Indian automobile sector, by launching its latest collection of world standard trucks called Prima.

Tata Motors has always been concentrating on environment-friendly technologies. The corporation has developed electric and hybrid vehicles.

Tata Motors is very highly interested in humanizing the superiority of life of people by working on four important areas – employability, education, health and environment. Such endeavours touch the lives of more than a million citizens. With all this positive footsteps Tata Motors is sketching a glittering future..

(Tata Motors, 2010)


• Sustain and develop leadership in all the vehicle segments in India.

• Enter into new international markets

• Consumer focus as well as satisfaction

• Provision of good and efficient vehicles to all the consumers

Features of Tata Nano

The Nano brings a good level of comfort and safety in a car within the reach of thousands of families who belongs to middle-class/ lower middle class. The base model of the car has been priced at Rs.100,000 (excluding VAT and transportation cost).

Designed with a family in mind, it has a roomy passenger compartment with generous leg space and head room. It can comfortably seat four persons. Its mono-volume design will set a new benchmark among small cars. Its safety performance exceeds regulatory requirements in India. Its tailpipe emission performance too exceeds regulatory requirements. In terms of overall pollutants, it has a lower pollution level than two-wheelers being manufactured in India today. The lean design strategy has helped minimise weight, which helps maximise performance per unit of energy consumed and delivers high fuel efficiency. The high fuel efficiency also ensures that the car has low carbon dioxide emissions, thereby providing the twin benefits of an affordable transportation solution with a low carbon footprint.


The company’s key products and services include the following:

(Market line info, 2010)



Strong domestic player

Extensive/wide range of products ranging from low cost to high cost

R & D research capacity


New product lines

Increasing in numbers of passengers in the market of cars in India

Road development in India

International growth


Substantial amount of indebtedness

Proposed repayment of the amended acquisition facility


Increase in the number of competitors

Environment regulations/procedures

Hike in the prices of raw materials

Competition from global players


Strong domestic player

Tata Motors is a leading automobile producer by revenue (with revenues of nearly $15,771.6 million in FY2009). The key strength of the company is that it owns steel plants, it has enormous investors and it also has the priceless goodwill of Tata Brand. The company is the market leader in the Indian medium and heavy commercial vehicles and is among the top three passenger vehicle manufacturer. Further, the company is globally ranked as the fourth largest truck maker and has a reputation of being one of the largest bus manufacturers in the above six ton category. A strong market knowledge and loyalty gives the company substantial bargaining power and benefits in comparison to its competitors.

Extensive/wide range of products ranging from low cost to high cost

• Passenger vehicles :- Indigo Vista

Indigo Marina

Nano (The cheapest car in the world)

• Utility Vehicles :- Safari Dicor


Xenon XT

Sumo Grande Mk II

• Commercial Vehicles :- Busses



The company has lots of variety which in some form gives them an edge over its competitors.

Recently, TATA motors acquired the Jaguar Land Rover business from Ford Motor Company in the month of June, 2008. With the help of this acquisition Tata Motors entered into the world of high end luxury brand.

R & D research capacity

Tata Motor has solid research and development (R&D) proficiency. Tata Motors’ Engineering Research Centre (ERC), established in 1966, is one of the few Government recognized in-house automotive R&D centre in India. The company’s product design and development centres are equipped with computer-aided design, manufacture and engineering tools, with sophisticated hardware, software, and other information technology infrastructure, designed to create a digital product development environment and virtual testing and validation, resulting in a reduction in the product development cycle-time and data management. In addition, R&D activities of the corporation focus on developing engines of the vehicles running on alternative fuels. The powerful R&D ability allows the company to develop a wide series of vehicle folder and improves its quality in the competitive world of automobile business.


Substantial amount of indebtedness

In March 2009, Tata Motors had a debt ($9,509.5 million) which was not a small amount. The company huge level of indebtedness could have really created an impact on the company’s proficiency to pay bonuses in the future; and lead to a down fall of Tata Motors. Due to this, the company’s liquidity position and the credibility of the company could have got hampered due to high amount of debt.

Proposed repayment of the amended acquisition facility

In June 2008, the company acquired Jaguar Land Rover from Ford Motor Company on a – debt free basis, for $2.5 billion, in cash transaction, through Jaguar Land Rover Limited, which is completely owned subsidiary of TML Holdings of Singapore. Jaguar Land Rover Limited borrowed $3 billion under a short-term bond loan facility, which Tata Motors guaranteed. In May 2009 only $852 million was repaid, against the $2 billion outstanding that through non-convertible credit enriched rupee debentures. Then the syndicate of banks extended the time of the remaining amount by eighteen months.


Product Launches

Tata Motors has launched various new products during the last two year period (2009-10).

For instance –

Launch of Xenon XT (Cross Terrain) (a life style four door, five seater pickup.)

New Safari Dicor 2.2

Tata Nano ( the people’s car)

Acquisition with JAGUAR LAND ROVER.



Tata Ace


Indigo Manza

Sumo Grande MK II

Prima range of world trucks (4028 S, is a 40-tonne 266-PS (Cummins ISBE engine tractor with a 9-speed ZF transmission, and a matching trailer with new generation brakes, ABS, and specialized axles for heavy duty and high speed application.)

Tata Aria (Newly Launched)

Especially, In the last two years many new vehicles have been launched in various segments which improves the portfolio of the company and would result in higher sales company. This would really help in enhancing the company’s brand image.

Increasing in numbers of passengers in the market of cars in India

The increase in demand for passenger cars in India remains positive. It is basically due to easiest and faster vehicle financing assistance in India.

Further, it is very predictable that real consumption expenditure in India would grow massively within next couple of years. Tata Motors has a reputation of being one among the top three passenger vehicle producer in India. Moreover, Tata Motors ‘Nano’ would undoubtedly fuel its existence in the market of passenger vehicle. The people’s car, Nano is anticipated to be the most inexpensive car in the globe. . The company seems to be in a powerful position to satisfy the increasing demanding in the particular segment in India.

Road development in India

Positive effect on automobile sales is anticipated in India in the coming years due to fast progress in road infrastructure in India. In March, 2009, 98% of the Golden Quadrilateral road project was completed. Connectivity to rural areas is anticipated to improve which would be very useful. Improvement in road infrastructure would assist in faster transportation of goods and passengers, and will certainly generate demand for new and faster vehicles. Tata Motors is bound to get benefited from the same, as it offers a strong portfolio of passenger and goods vehicles.

International growth-

The more impressive aspect of the Tata Motors is its people’s car, the Nano which is a potential platform for new products and new markets and it also represents their success in engineering and commercial vehicles. The Nano will be on sale in Nigeria by the present year, and it has also cleared all the European safety standards. The company is also planning to launch some advanced models of the Nano in Europe by 2011 and in North America by 2012 at approximate price $800.


Increase in the number of competitors

Automobile industry is extremely competitive and it can be clearly anticipated that the competition is likely to be increased in the future. Tata Motors face extreme competition from its domestic and international competitors that comprises Maruti Udyog, Mitsubishi Motors, Fiat, Ford Motors and General Motors. The competition is in terms of features, quality safety, pricing, reliability, customer service, financing, innovation. Recently, the government in India allowed automatic approvals for 100% foreign equity. This has led to rise in the number of manufacturing facilities and it would certainly

increase competitors and it would adversely affect the company’s profitability.

Environment regulations/procedures

Tata motors is an automobile company, thus it is imperilled to broad governmental regulations that includes sound, security and emission level created by its production facilities. Government regulations are expected to become more stringent that may considerably affect the company’s future. In the countries such as Europe and US environment regulations is extremely strict relating to emanation. Tata motors is working on its technologies in order to come across all the requirements in the various countries in which they sell or want to sell their products. To meet the required standards company has to spend a lot of time and money which could create some adverse effects on the company’s operations.

Hike in the prices of raw materials

Hike in the prices of raw materials used to manufacture automobiles, includes rubber, copper and steel. The prices of all these commodities is considerably increased in the last couple of years. Any additional hike in the prices would force the company to upturn the prices of the products, which could immensely and badly impact on the sales and operations of Tata Motors.. Major increase in the cost could badly effect on the financial status of any company.

www.marketline.com/ www.ebsco.com



Porters 5 Forces Analysis of Indian Automobile Sector

Porter’s Five Force Model

Campbell, Stonehouse and Houseton (1999) mention that understanding the advantage of each five forces within a company can help managers develop company’s strategy. Five forces model focus on five keys: the threat of new entrants to the industry, the threat of substitute products, the power of buyers, the power of suppliers and rivalry among business in the industry.

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Threat of Substitute Product: As everyone knows that any customer choices range from proper conveniences like providing Power steering, acceleration, Mileage to various other things. So, substitute is very important aspect in this type of industry as other product which will be available in the market may act as the substitute to the brands own existing product. If customer is not happy with any of the product then the customer may switch to other company and product.

Threat of New Entrants: New achievement from the new entrant or from any active company is also highly strong force which a company must need to take care of its market share and growth. But we can say that new entrant will not be too strong as it requires more capital in this type of business to start and needs to compete with the competitors and their market prices. We can take an example of Tata motors as they are threat to European Markets and many other countries market as they are new in to the market.

The intensity of Competitive Rivalry: The most appropriate way of keeping competitor out of the track is nothing but to pitching new exciting products in the market so a company must be aware of all this tactics by its rival company so it can supply the effect. So we can say that to have a competitive rivalry Tata Motors have to introduce many other products with the good quality and less price so that it can attract customers like they have introduced the World’s cheapest car.

The Bargaining Power of customers: Another important feature of the car or auto Company where they have to manage properly the pricing control of their product to burst the sales in the market. If the price is not reasonable according to customer needs then they can switch to other companies. For Example we can say if a customer is not happy with the product he can shift to Tata Motors where he can get everything whatever he wants like different car, affordable price and variant features. So, it’s important to manage the pricing of the product efficiently.

The Bargaining Power of supplier: The distribution channel is really very important in India where demand is highly different with all across its dimension so, supply is very much required in the industry for a company. The development of Tata Motors is marked by customer focus and excitement for business, and as importantly a collaborative relationship with its vendors. (Tata Motors, 2010)

Revenue Analysis

In the year of March, 2010 with the growth of 28%. Cumulative sales for the fiscal were around 456,894 nos, and the growth was of 6%.

The above graph shows the diluted earnings per average share of the four companies and the highest earnings are for the Toyota motors with 48.86 and then followed by is Tata Motors which has about 20.83 and then its Hyundai motors have the average share of 10.43 and the lowest is with the Ford motors with just 0.24. (Reuters India, 2009)

Research and Development

Tata Motors research and development offers the much required motivation for the formation of advanced ideas which indirectly helps to put new life into products. Offering the world with an excellent automotive research and development are the fundamental aspects that donate to the leadership of the company. Tata motors have various kinds of research centres such as engineering research centres that contributes in the testing of amendments before they can be used as steady fixtures. Safety(Crash Test Facility) Four poster Servo-hydraulic test, Instrumentation Laboratory, Chassis Dynamometer Emission Lab and many more hi-tech R&D centres assist Tata motors in creating innovative ideas and receiving more encouragement to produce new product which is more beneficial and has superior-quality for the environment and the company. (Tata Motors 2010)

Advertisements Via:-


News papers


Radio Channels

Potential Competitors

(Market line info, 2010)

Key Facts

Exports Increased from 84,000 Units in 2002- 03 to 2, 80,000 Units in 2007-08

Expected to cross more than $ 145 Billion in 2016

Production of four wheelers in India has increased from 9.3 Lakh Units in 2002-03 to 23 Lakh Units in 2007-08

Entry of more international players

Contributes more than 5% to GDP

India ranks 12th in the list of the world’s top 15 automakers


TATA Motors sale in India crossed 4 million mark with ease, 2006

TATA Motors launched the Long Bill Base Indigo XL, India’s first stretch limousine, 2007

Sold out 100,000th Ace, 2007

TATA Motors complete acquisition of Jaguar and Land Rover, 2008

TATA Motors launches the worlds cheapest car the Nano car (the people’s car), 2009

TATA Nano wins Indian car of the year. (ICOTY award), 2009

TATA Nano attracted the millions of people and drew over 2.03 Lakh bookings in a very short span of time, 2009

TATA Ace becomes the first good commercial vehicle with sales over 1 Lakh in this particular segment, 2010

TATA Motors declared as the supreme commercial vehicle manufacturers in the given year,2010

(tata nano.in services.tatamotors, 2010)



As the company operates in numerous nations across Asia, Africa, Europe,

The Middle East and Australia, they have to adjust to the changing political environment.

In all the countries laws and regulations varies. So, the company should have to have clear knowledge and also have to give genuine attention to local governing bodies. Thus the company’s investment and returns are at the mercy of the local government. Eventually, the company’s tactic of approaching the markets has to watch the political change.


Tata Motors has to give sincere attention to the fluctuation in currency rates across the world.

Currency fluctuations might create changes in the demands for Tata vehicles

which will certainly affect the company’s profitability. However they will have to offer sincere attention to not only their domestic currency but also to the other currencies in which they are operating in. Importance to currency fluctuations is important because it affects the company’s performance.

Functioning in several countries across the globe, Tata Motors operates with

global economic outlook while aiming on every single market. Because

Tata is growing rapidly, by forming a joint venture in many countries

across the world.

Tata Motors has familiarity and possessions in five continents across the

world, thus they can quickly collect data from across the globe to report at any kind of issue.


Undoubtedly, the beliefs, opinions, and general attitude of all the stakeholders in

a company will affect how well a company performs. This includes every

stakeholder from the CEO and President, down to the line workers,

from the investor to the customer, the culture and attitude of all these people will

ultimately determine the future of a company and whether they will be profitable

or not. For this reason, Tata Motors tends to use an integration and rarely

separation technique with foreign companies they acquire. In 2004, Tata Motors

acquired Daewoo Commercial Vehicles Company, which was at the time Korea’s

second largest truck maker. Rather than using de-culturation or assimilating

Daewoo, Tata took an integrated approach, and continued building and

marketing Daewoo’s current models as well as introducing a few new models

globally just as it had been done under Korean management


Tata Motors and its parent company, the Tata Group, are ahead in the very crucial game in

the technology field. “The foundation of the company’s growth is a deep

understanding of economic stimuli and customer needs, and the ability to

translate them into customer-desired offerings through leading edge R&D” (Tata).

Employing 3000, scientists and engineers, Tata Motors’ Research and

Development team is ahead of the pack in India’s market and right with the rest

of the field internationally. Among Tata’s “the first indigenously

developed Light Commercial Vehicle, India’s first Sports Utility Vehicle and, in

1998, the Tata Indica, India’s first fully indigenous passenger car,” as well as the

increasingly famous Tata Nano, which is the world’s cheapest

car (Tata). In the automotive industry, it is becoming increasingly

crucial for manufacturers to stay on top of the technology curve with new

problems always rising such as escalating gas prices and pollution problems.

Tata recognizes this and dedicates lots of resources and time into research and

development to be even with or preferably ahead of other competitors, global

trends, and changing economies. In all, an automobile manufacturer must

change, adapt, and evolve to stay competitive in the automotive game, and this

is exactly what Tata is doing with their rapid growth, and extensive research and





Marketing strategies of TATA motors is one of the most successful marketing strategies in automobile industry. By looking at the SWOT analysis of Tata Motors, you will know why Tata Motors Company is able to produce more than 4 million different types of vehicles such as cars, trucks, commercial vehicles, 4Ã-4. Since the company began in 1945. Meanwhile, Tata Motors Limited has also become the largest automobile producer in India market.

Marketing strategies of Tata motors

What makes the marketing strategy so successful?

1. Product, Branding, and Advertising

Every business started from 0, from no one knows it until everyone know it. Advertising is one of the most common ways to make car buyer or car enthusiast aware of the new car with special promotion price. Another more important way of advertising is to create an image or brand image. Take BMW Z3 for example, it was introduced in 1996 and shortly the car has been used in the famous James Bond movie. Over the years Tata Motors have been successful in creating their brand image especially they use some famous stars as their spokesman.

Other important marketing strategies are such as the packaging, innovations, and quality control. Tata Motors provide many innovative features to attract car lover. One of these innovations is the Tata Safari 4X4 Dicor that has “Reverse Guide System”. A weather- proof camera is fixed to the rear car to help the driver while reversing the car.

2. Pricing Strategy

There are various factors to determine a price of a car. These factors are such as market condition (it can’t be too low or too high with the prices of same vehicle from competitors, it has to be at par), cost incurred to build a car, profit by company, dealer profit.

Giving discount every month and special promotion for certain type of vehicle also one of the strong strategy use by Tata Motors. Discounts are made from Company’s profit or from dealer’s profit at times of bigger festivals in India.

3. Place

Place of dealership does play an important role. The channel of distribution, physical location, and dealership method of distribution and sales is generally adopted. The distribution of vehicle must be in a very systematic way, from the plant to dealership and to end user. This is not only in India itself but also to the world-wide dealership.

4. Maintenance and Support

After sales service is also another important marketing strategy for most of the car buyer

to choose for the right car. End user will not want to spend a lot of time to travel to a far place just to service the car such as change engine oil, oil filter and some simple checking. Parts and accessories must also easy to access when it is needed to keep the customer satisfy from buying Tata cars until maintaining the car or even until they sell the car and change to a newer Tata model.

Marketing strategies of Tata motors

By looking at the Marketing strategies of TATA motors, the SWOT analysis (the Strengths, Weakness, Opportunities, Threats) can clearly tells why Tata Motors marketing strategies is one of the successful stories in automobile industry nowadays.




Marketing strategies of Tata motors for Nano.


The Tata Nano will ride on a clutch of innovative marketing ideas when it rolls into the showroom across the country. The most inexpensive car which broke new ground in design, engineering and production process will go for “cost-effective and innovative use of media, ” say people with knowledge of the Nano marketing strategy. To make the car more easily accessible to people the Tata motors people will sell the Nano not just through Tata car dealership across the country but all so through conventional retail outlets like Westside and Croma.

Westside is a lifestyle retail brand and Croma is an electronic megastore. Both are owned by the Tata group. Westside and Croma outlets will display the Nano and also take bookings. Also available will be a whole range of Nano merchandise like baseball caps, T-shirts and key chains, among others.

The Nano’s overall marketing strategy will use conventional media in an unconventional manner. Unlike most small cars, Nano won’t be big on advertising. There will be no TV campaign, only innovative use of print, radio and other media, particularly the web. The Tata team is working on Nano news in papers, Nano breaks on radio, Nano appearing in the form of messages or ticker news on TV, online Nano games, Nano chatrooms on the Net, Nano pop-ups on major websites and Nano conversation on Facebook, Orkut and blogspaces.

According to people in the ad industry with direct knowledge of the Nano’s marketing strategy, the campaign will be cost-effective and innovative so that Nano becomes synonymous with anything “small, cute and brief.” “The idea is to make the Nano part of our everyday lingo like ‘see you after a nano, it is totally word-of-mouth campaign.





Since the term “bottom of the pyramid” was coined, the poor living in low- and middle-income countries have received increasing attention. The bottom of the pyramid attracts multinational companies because of its large population with pending demand, low consumer expectations and slight competition.

At the beginning of 2008 Tata Motors unveiled the Tata Nano, a small car made for India’s poorer population. Four years earlier Tata had come up with a new concept of developing a car for people who previously could not afford one. A price tag of 100,000 rupees (about US$2,350 or £1,500) became the goal and by 2008 the reality.

Even though the Nano is not affordable by the poorest, it does, however, serve the needs of those within the bottom


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