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Jegadeesan Priyatharisini R Sriram BSK Uthra G Vivekh

 Launched in May 2005 Inspired 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 use Tata Ace sets the trend as the countrys first

high performance, low maintenance safe and reliable mini-truck sporty car-like features to ensure comfort in ride and Tata ACE - Team 10-Thiagarajar School of

handling

Management

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FY
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-Nov11

Sales Figures
30,000 70,000 89,000 81,000 110,032 (With Tata Magic 160,000) 160,000 (upto 30-Nov-2010) Aiming for 250,000 this year
Tata ACE - Team 10-Thiagarajar School of Management 07/15/12

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

The 3 wheelers had the following issues

wore a rustic look uncomfortable 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

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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

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Increasing

population and growth in the organized retail sector with the entry of large players Social status for Users Last mile distribution vehicle TATA motors identified these macroeconomic trends Realized that there will be an increased demand for LCVs in urban areas

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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 goals During the financial meltdown (2008-09), even as the MCV &HCV segments in India shrank by 33% compared to the previous Tata year, Ace in ACE - Team 10-Thiagarajar School of 07/15/12 fell by just 7 the LCV Management segment

Honda Acty

Subaru Sambar

Mitsubishi Minicab

Tata ACE - Team 10-Thiagarajar School of Management

Suzuki Carry

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Basic needs of small scale transporters Customers in rural areas attached prestige

to their transport vehicles Safety Comfort to the driver Speed Ability to drive in the narrow lanes Tight Turning Radius Low operating costs
Tata ACE - Team 10-Thiagarajar School of Management 07/15/12

5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5

Trend in Market Share Source: Tata Motors Financials Reports

55 5 5

Tata ACE - Team 10-Thiagarajar School of Management

55 5 5

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55 5 5

10

55 5 55 5 55 5 5 5 5 5 5 5 5 5 5 -55
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Sales Growth Achieved Source: Tata Motors Financials Reports

55 55

Tata ACE - Team 10-Thiagarajar School of Management

55 55

55 511 5

Target segment Individual Customers Target 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
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Value proposition High Performance with car-like features in

safety, comfort

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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 given 80% of the vehicle has been outsourced to keep costs low without

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 Initial Launch Company launched ACE in the south first through its Dealers and Dealer Branches Distribution 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

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Value proposition
High performance with car like features Advertisement with Tag Line Kutti Yanai A symbol power A symbol of reliability

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Benefit sought Behavioral Segmentation Need based Focus on comfort and safety Demographic Customer profile

Segmentation
Individual Vehicle owners Fleet Owners Institutional Customers

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Strength
1.Strong brand name 2.Leverage of First mover advantage 3.Good logistic management 4.Continuous innovation

Opportunities
1.Rural market 2.High growth rate of LCV segment

Weakness
1.High product cost 2.After sales service 3.Complaints on gear shifting

Threats
1.Increased competition due to new entrants

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Piaggio - Ape, Quargo Bajaj - Tempo, Max series, RE600 Mahindra & Mahindra - MN 25 & MN 31 trucks,

MN40, 49 trucks (Navistar Inc USA), Maxximo & GIO Force motors - Trump Trax, Kargo king Hyundai motor Porter

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Model T product development was based on

Traditional Physical Process Sequence

1. Design product, procure and make 2. 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

positioning 2. Product development, service development, pricing, sourcing/making, distribution, servicing 3. Sales force, sales promotion, advertising
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1. Market sensing process

Identified the needs of potential customers

like Traders, Truck drivers and Farmers

1. Blue ocean strategy and Rural marketing

activities
1. Tie-up with Godrej Aadhar and other rural

dealers

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Functional gratifications
1. 2. 3. 4. 5.

Speed Capacity Service points Easy navigation in roads Low maintenance and operating costs Sleek appearance Position as truck in mini size Comfort

Sensory gratifications
1. 2. 3.

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Extended as passenger vehicle as Tata Magic Designed to larger tyres to acquire greater

speed Improved fuel efficiency by 6-10% Mileage 25kmpl Smaller model of Tata Penquin for Rural market
Reference:
1. www.tatamotors.com 2. www.moneycontrol.comSchool of Tata ACE - Team 10-Thiagarajar 3. www.rediff.com
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Tata ACE - Team 10-Thiagarajar School of Management

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