Marketing management case study

The marketer has to learn about the needs and changing of the consumer
behaviour and practice the Marketing Concept. Levi Strauss & Co. were
selling jeans to mass market and did not bother about segmenting the market
till their sales went down. The study into consumer behaviour showed their
greatest market of the baby boomers had outgrown and their needs had
changed. They therefore came out with Khaki or dockers to different segments
and comfortable action stocks for the consumers in the 50 age group. Thus,
by separating the market and targetting various groups and fulfilling their
needs, they not only made up for the lost sales but far exceeded the previous
sales. They also targeted the women consumers for jeans and both men and
women started wearing jeans in greater numbers. The offering given by the
company must be enlarged to suit various segments.

For example Tata Motors Ltd. has come out with many models. Micro car,
Mini car, Compact car, super compact, Executive and premium cars, Luxury
and sub-segment cars, SUV, MUV and other models. For successful
marketing,one should:

1. Describe marketing strategy for Tata Motors.

2. Write SWOT Analysis.
3. Describe PESTLE Analysis .

Solutions :

1. Marketing Strategy STP (Segment, Targeting & Positioning) in the

Marketing Strategy of TATA Motors: Tata Motors does not follow a single
marketing approach or formula but it believes that all members of the
community should be served. Brand targets crowd from the rural part
to the metros with its offerings varying from NANO to Jaguar Land
Rover segment. It targets anyone above 4 Lakh p.a. salary, millennial
employed as professionals, managers and all those looking to switch
from 2- wheeler to 4-wheeler. The age bracket for brand’s offering varies
from 21-65 years with all Middle class. Upper middle class, High class
and Affluent class in its target category. Tata Motors offers products
such as Tata ACE a mini truck mainly used for agriculture transport
purpose, Tata NANO for the middle class, Tata Indica and Indigo for
commercial purposes and Jaguar in the high-class segment thus
creating the image that there’s something for everyone in its huge line
of offerings. Differentiated targeting strategy is used by Tata Motors to
target the customers and satisfy their needs and wants. Competitive
advantage in the Marketing strategy of Tata Motors: Based in India
serves as a huge competition for the company as it offers the brand low-
cost labour base with the help which company not only targets the
Indian market but also other emerging markets with a huge range of
economical segment vehicles. The products thus offered are
manufactured at a much lower cost and sold to new markets earning
huge profits for the company. The policies and regulations for the
automobile sector in the country along with the least expensive
automobile parts availability are the some of the major conditions which
help the brand in its business expansion. The excellent innovation and
research and development at TATA Motors have set up an example for
its competitors. With its various research centres across the country,
the brand is working on the improvement of the engine efficiency,
design, style and instrumentation of vehicles. For breaking into foreign
markets TATA Motors has over the years acquired various foreign
companies. While the company has delivered amazing results in the
domestic market, its subsidiary Jaguar land rover has broken all the
records of competitors as a top luxury automobile manufacturer. This
mega expansion mode calls for major product development, capacity
capitalization and various national and international mergers.
Competitive advantage in the Marketing strategy of Tata Motors: Based
in India serves as a huge competition for the company as it offers the
brand low-cost labour base with the help which company not only
targets the Indian market but also other emerging markets with a huge
range of economical segment vehicles. The products thus offered are
manufactured at a much lower cost and sold to new markets earning
huge profits for the company. The policies and regulations for the
automobile sector in the country along with the least expensive
automobile parts availability are the some of the major conditions which
help the brand in its business expansion. The excellent innovation and
research and development at TATA Motors have set up an example for
its competitors. With its various research centres across the country,
the brand is working on the improvement of the engine efficiency,
design, style and instrumentation of vehicles. For breaking into foreign
markets TATA Motors has over the years acquired various foreign
companies. While the company has delivered amazing results in the
domestic market, its subsidiary Jaguar land rover has broken all the
records of competitors as a top luxury automobile manufacturer. This
mega expansion mode calls for major product development, capacity
capitalization and various national and international mergers. BCG
Matrix in the Marketing strategy of Tata Motors: Indica being the most
preferred commercial vehicle features in the star segment along with
Safari Dicor, Manza, Winger and Magic. With Safari, Sumo and Indigo
CS being their cash cow, Nano& Zest still continues to be in question
mark segment. Distribution strategy in the Marketing strategy of Tata
Motors: With 576 car dealers across 424 cities in India, TATA Motors
holds a robust dealers network in the country through it sells more
than 56,000 in the month of July 2018. Brand registered a staggering
growth of 64% in its domestic sales for the first quarter (April-June
2018), FY19 at 164,579 units compared to 100,141 units over the
previous year due to its strong network of dealers. Brand equity in the
Marketing strategy of Tata Motors: TATA aims to fulfil the emerging
needs of the automobile industry by coming up with a new range of
products. These products are manufactured with the purpose of
providing comfort, reliability, safety, capacity and value to the end
customers. In order to stay ahead of the competition, the company is
going for huge investments in the area of product development. TATA
Nano carries an image of the cheapest car in the world, TATA Ace is
being introduced in the commercial vehicle market for snatching the
market share of its rivals. Another sporty vehicle Nexon with both diesel
and petrol engine is also attracting customers already. Competitive
analysis in the Marketing strategy of Tata Motors: With the Indian
automotive market being overcrowded with a lot of national and
international players following a red ocean strategy. Companies like
Hyundai, Fiat, Maruti Suzuki, Toyota & Honda are giving a stiff
competition to the brand with everyone eating each other’s market
share. Market analysis in the Marketing strategy of Tata Motors: With
a market share of 44% in commercial vehicles segment in a 2017-2018
brand is a market leader in the sector. With an initiative Turnaround,
2.0 company is targeting to regain its market share in Passenger vehicle
segment. Part of this has already put in place which has already started
showing signs of improvement for the company’s PV firm. With the
focus on serviceability tapping and penetrating the growing markets will
further help the company with its Turnaround 2.0 initiative in this
highly competitive sector. Customer analysis in the Marketing strategy
of Tata Motors: Customers of TATA Motors are the low, middle groups
who are looking to switch to 4-wheeler from 2-wheeler who are looking
to purchase a car for a family purpose at affordable prices. Customers
of the brand also include youth and high-class business professional
who is looking for innovative, trending vehicles with world-class safety
features. Promotional strategy in the Marketing strategy of Tata Motors:
TATA Motors carries out its promotional strategy in 2 ways:  It
includes: print ads (newspaper advertisements by local dealers,
magazines)  TV, Radio
2. SWOT Analysis The SWOT analysis for Tata Motors is presented
below: Strengths Weakness 1. Strong brand with diversified product
portfolio 2. Strong performance of Jaguar Land Rover (JLR) division 3.
Leading supplier of defense mobility solutions to Indian Armed forces
4. Nano, world cheapest car from the reputed automaker 5. Efficient
customer service support 1. Nano’s perception as a low-cost car kept
away aspiring customer segment leading to low sales retailers
Opportunities Threats 1. Increasing per capita income fuelling aspiring
needs 2. Tata Nano can tap developing markets in Africa and South
East Asia 3. CNG and electric car models have promising market
potential 1. Increasing competition from other automakers 2.
Environmental measures to curb pollution a threat to Tata Motors
product portfolio Strengths i. Strong brand with diversified product
portfolio: Tata Motors has strong brand equity in the domestic and
international markets. In 2016, the company became the second most
valuable automaker in Asia outside Japan in terms of market
capitalization. Tata Motors is divided into diverse portfolio of products
like car and utility vehicles, trucks and buses, municipal solutions,
defense and homeland security; and Jaguar Land Rover. It also offers a
wide variety of services like customer care, finance and insurance,
merchandise and accessories, pre-owned vehicles, corporate and
institutional sales. ii. Strong performance of Jaguar Land Rover (JLR)
division: Tata Motors’, Jaguar Land Rover division posted a record sales
of 604,009 vehicles in year ending March 2017, an increase of 16% of
FY16. The growth was driven by strong demand in Chinese and US
markets where sales jumped by 32% and 24% respectively. Sales also
increased by 16% in the UK and 13% in Europe markets. New models
such as Jaguar F-Pace SUV and older established models posted strong
sales numbers. JLR may also broaden its range into smaller cars and
other areas which are expected to further increase its sales. iii. Leading
supplier of defense mobility solutions to Indian Armed forces: Tata
Motors is renowned for its position as a leading supplier to the Indian
army and has won multiple contracts over the years to supply trucks
and jeeps to the forces. On 2017, the company was awarded a contract
to supply 3192 units of the Tata Safari Storme 4×4 to the Indian Armed
Forces. Tata Motors has also established itself as a supplier of specialist
vehicles for UN peacekeeping missions. These contracts signify the trust
in strength and capabilities of Tata Motors by leading national and
international organizations. iv. Nano, world cheapest car from the
reputed automaker: Tata Nano was positioned as the cheapest entry
level car globally manufactured by a reputed automaker, Tata Motors.
The Nano was launched with a price tag of Rs.1 lac (~ USD 1600) with
India’s flourishing middle class as the target segment that would not be
able to afford the existing cars available in the market. Nano was
manufactured with affordability being kept in mind, both on the
purchase and maintenance fronts. Tata cars are known for low
maintenance costs and Nano is a perfect example. It is also highly fuel
efficient with an average mileage of 25 kmpl which is amongst the best
in its peer segment. The latest version of Tata Nano, GenX Nano has
the most advanced features offered in its segment. The top-end variants
come with automatic transmission, power steering, power windows,
customizable interiors and digital information display system which are
some of the best-in class features offered in the segment. v. Efficient
customer service support: Tata Motors have been successful at
delivering an enriching customer experience through a consistent
quality of services. Some of them are Tata Alert (the road side assistance
service program for ICV, M&HCV range of trucks and buses), Tata
Fleetman (a telematics system which ensures a better integration with
the vehicle systems), Insurance and beyond offering triple benefits to
minimize the financial impact to the Tata CV customers, 4 year
warranty (offerings for heavy trucks and higher GVW) & Extended
service interval (covering the electrical and mechanical breakdown of
the vehicles). Weaknesses: i. Nano’s perception as a low-cost car kept
away aspirational customer segment leading to low sales: Nano initial
positioning as a low cost car and cheapest in the market proved to be a
strategic blunder and ultimately became one of its biggest weaknesses.
In the Indian markets, buying a car is associated with a social status
and symbol, something which Nano failed to provide with its cheapest
car tag. The sales in FY 16 and FY17 have been just 21,102 and 7591
units respectively. Thus unless there is a sound turnaround strategy,
the product would have to be shut down. Opportunities: i. Increasing
per capita income fuelling aspirational needs: India’s per capita income
stood at Rs. 93,293 in 2015-16 and has been steadily increasing by
around 6-7% over the last few years. This has resulted in increased
savings and also rise in discretionary spending by the middle class
which also has growing aspirations. Tata Motors can capitalize on the
potential in the middle class segment with its new offers like Tiago and
Nexon. ii. Tata Motors can tap developing markets in Africa and South
East Asia: Emerging markets in Central and East Africa and counties
in South East Asia such as Bangladesh, Indonesia and Malaysia have
similar demographics have growing demand for entry and mid-segment
level automobiles. Nano can use the existing unutilized capacity at its
Sanand plant to ramp up production. iii. CNG and electric car models
have promising market potential: CNG and electric car models offer a
cleaner alternative to internal combustion engines. Though the overall
cost of these models is higher than the conventional petrol version,
there are government subsidies and tax breaks offered. The overall
operating cost of the CNG and electric versions is also lower. These
technologies have also seen a surge in popularity and Tata Motors has
good opportunity to increase in market share in these product
segments. The company is this regard is expected to launch Tata Motors
Megapixel its hybrid hatchback car in 2018. Threats: i. Increasing
competition from other automakers: Tata Motors is facing increasing
 competition from other players like Maruti Suzuki, Hyundai, Renault
and Ford. Hyundai and Maruti have a strong portfolio across price
segments giving stiff competition. The competitive intensity in the global
automobile space is expected to increase, leading to new product
launches and product offerings at high value points. Also, the customer
expectations of performance, quality and technology are increasing with
time and Tata Motors needs to pursue continuous innovation to
preserve and increase its market share. ii. Environmental measures to
curb pollution a threat to Tata Motors product portfolio: Growing
concerns over air pollution, road safety, sustainability has a regulation
on motor vehicles and urban development. This will impact ownership
patterns and will surely impact the future of automotive industry. The
recent ban on registrations of diesel vehicles above 2000 cc by some
Indian state governments over pollution concerns is also a threat to a
segment of Tata’s existing product portfolio. These norms will also
impact the sales of its commercial division which manufactures buses
and trucks.
3. PESTLE Analysis The PESTLE analysis for Tata Motors is presented
below: Political Economic 1. Political confrontation with opposition
party in West Bengal where plant was to be set up 1. Impact of Brexit
on Jaguar Land Rover (JLR) operations 2. Huge losses for investments
made at initial Nano plant site at Singur Social Technological 1.
Perception of Nano as a cheap car led to decline 1. Investments in
Research and Development in sales. enhance technological capabilities
2. CNG and electric car models have promising market potential Legal
Environmental 1. Ongoing litigation for the Singur plant with West
Bengal government 1. Investments in sustainable operations and
climate change Political: i. Political confrontation with opposition party
in West Bengal where plant was to be set up: Tata Motors was in the
midst of controversy over the establishment of automobile
manufacturing plant at Singur in West Bengal for Nano. The primary
opposition political party opposed the allotment of agricultural land to
Tata Motors and after a series of protests the opposition and farmers
the construction of plant had to be stopped. The plant was finally
shifted to Sanand, Gujarat. Also the launch of Nano was delayed due to
the shifting of the plant giving competitors the time to design alternate
offerings. Economic: i. Impact of Brexit on Jaguar Land Rover (JLR)
operations: The Brexit referendum is likely to have severe repercussions
for the UK economy. Already few months post the vote, the GBP has
witnessed a severe slump falling as much as 20% against the USD. This
will benefit JLR’s revenues as it exports 80% of its vehicles produced in
the UK. However there are fears that once the UK formally leaves the
European Union, the local car industry may be at risk if the EU open
market access is revoked and exports may get impacted. ii. Huge losses
for investments made at initial Nano plant site at Singur: The
investments made for the Nano’s plant at Singur which had to be shifted
caused a Tata Motors a loss of almost INR 1400 crores which includes
value of land and goodwill, transportation, preserving the entire plant
and resettlement and rehabilitation cost to vendors. Thus even before
the production started, Nano project suffered a major financial setback.
Social: i. Perception of Nano as a cheap car led to decline in sales: Nano
initial positioning as a low cost car and cheapest in the market proved
to be a strategic blunder. In the Indian markets, buying a car is
associated with a social status and symbol, something which Nano
failed to provide with its cheapest car tag. People did not want to buy a
‘cheap car’ and thus this lead to a decline in sales. Further the target
segment for Nano was the middle class populace in India, most of who
owned two wheelers and aspired to own a car. The problems faced by
these segments were availability of proper parking space. Most of the
target population lives in independent houses and societies in cities and
towns where there is an acute shortage of parking space. Technological
1.Investments in Research and Development to enhance technological
capabilities: Tata Motors has strongly pushed ahead investments in
R&D over the past few years to enhance its technology capabilities, offer
better vehicle experience to customers and gain competitive advantage.
The company’s R&D centers are located in Pune (India), UK and South
Korea and focuses on areas such as on issues such as engine
performance, fuel efficiency and safety. The Pune center has India’s only
full vehicle crash test facility. The company’s subsidiary, JLR had also
committed to spend £3.75bn on R&D and facilities in 2016. Further
Jaguar Land Rover (JLR), Tata Motors European Technical Centre
(TMETC) and Warwick Manufacturing Group (WMG); a part of the
University of Warwick are jointly collaborating in the formation of
National Automotive Innovation Centre (NAIC) at Warwick. This will be
the largest automotive R&D facility in Europe and state-of-the-art
center of excellence (COE) and innovation for the automotive center.
2.CNG and electric car models have promising market potential: CNG
and electric car models offer a cleaner alternative to internal
combustion engines. Though the overall cost of these models is higher
than the conventional petrol version, there are government subsidies
and tax breaks offered. The overall operating cost of the CNG and
electric versions is also lower. These technologies have also seen a surge
in popularity and Tata Motors has good opportunity to increase in
market share in these product segments. The company is this regard is
expected to launch Tata Motors Megapixel its hybrid hatchback car in
2018. Legal: 1.Ongoing litigation for the Singur plant with West Bengal
government: Tata Motors is subject to an ongoing litigation with the
present government of the State of West Bengal in India with regards to
the compensation in the Singur land case for Tata Nano. The case at
presently is with the Supreme Court of India. The company may need
to make fresh provisions in the balance sheet if it loses the case and is
unable to recover the cost incurred in Singur. 2.Changing
environmental regulations in Indian states: Changes in environmental
regulations and ban on diesel vehicles in some Indian states may affect
Mahindra’s sales. The Delhi government had imposed a temporary ban
on registration of new diesel vehicles in 2016 after the city had
experienced high levels of pollution. Other states like Maharashtra and
West Bengal may also introduce stricter pollution measures. Further
the implementation of new emission rules over the next three years will
increase the price of diesel cars impacting demand. Mahindra whose
major part of the automobile range falls under diesel category will need
to come out with petrol variants to retain its market share in the MUV
and SUV segment. Environmental: i. Investments in sustainable
operations and climate change: As a high performance organization
Tata Motors is committed to environmental sustainability and climate
change. The company has implemented several environmentally
sensitive technologies in its manufacturing processes and utilizes some
of the world's most advanced equipment for emission check and control.
The company has also undertaken several green projects that preserve
and regenerate local ecologies. Tata Motors also aims to transform its
operations to 100% renewable, achieve zero waste to landfill and
become water positive in a time bound manner. Further, Tata Motors is
one amongst the 10 Indian companies selected on Dow Jones
Sustainability Emerging Market Index 2016