BRAND VALUE OF TATA ACE

Brand Tata promises trust and dependability'

Ace is not a brand; it is a `designation’. There is only one brand that is the Tatas.Ace is a very
good model designation standing for a unique set of capability, but lives under the Tata brand.

There are fundamentals in managing a brand. Having a strong belief in a set of values, which
goes beyond pure economic desires and targets...? It has to be lived by people who deliver that
promise, almost intuitively.

Companies that put short-term economic interest behind (and, instead) deliver on the brand
promise and value has done better. Tata has a set of values that, if push comes to shove, are more
important than short-term economic gain. Customers see and intuitively capture that and are
attracted by that. Customers are not attracted by pure financial or economic desire. Ultimately
you have to be commercially astute and ambitious, but if that is your primary driver, customers
are not attracted to that proposition. This specific element of putting long-term brand values
before short-term interest is important. The more you do that, the stronger a brand develops.

The second element is seeking to give new solutions to customers. There is a `curious spirit’ of
driving into new areas such as the Ace.

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Recognizing a gap in the market for small commercial vehicles, Tata Motors worked towards an
innovative solution. In an era where there is a need is to transport goods speedily, conveniently
and in a cost effective manner, while providing comfort, style and easy maintenance, Tata
Motors has developed the Tata Ace - India's first mini-truck.

Ideal for short, narrow village roads as well as long highway hauls, for small bulky loads and
large heavy ones, the Ace is an innovative 4-wheeler offering for the first time in this category.
The small exterior belies the power-packed technologically-superior engine which gives the Ace
high power and high loading capacity.

A new revolution in transport, which is set to change the competitive landscape of the small
commercial vehicle segment. Tata Ace - the small, big machine.

TATA Ace is the classic case of marketing success in India. What ever factors that Kotler have
spoken about to successfully launch a new product, it is there in this product. Ace is Tata's
answer to the marketing myopia of three wheelers.

Ace is a .75 ton truck in the commercial vehicle segment which is dominated by large trucks. It
can be called India's first mini truck. Launched in May 2005, Ace has become a blockbuster and
is expected to create a huge dent in the three wheeler goods carrier market.

Till the launch of Ace, the sub one ton loads were transported by the three wheeler goods
carriers. Although the quality and performance of these three wheelers are less than desirable
there was still huge demand for these vehicles. It is this market that Ace is trying to capture. It is
the transportation at the “last mile" market that Ace has captured.

Ace had all the qualities of a winner. It is cute, the engine is good in terms of mileage and
performance, the comfort factor is very much there and more over it is a Truck and not an Auto.
Priced competitively at 2.25 lakh to 2.40 lakh, Ace is a value proposition that no one can refuse.
The brand was launched at a point where there was a need for transportation of good speedily
and conveniently and in a cost effective manner.

The target segment are those who want to upgrade from these three wheelers. The brand Ace has
its own limitations. Hence Tata was careful not to overhype the product so that it will "under
promise " and " over deliver".

Although the product took around Rs180 crores to develop, the brand is giving rich returns for
Tata Motors. The company is working overtime to deliver the orders and is looking for
expansion of production of Ace. Even Ace is looking at overseas and is exporting to Srilanka and
Bangladesh.

The success of Ace has opened up a new category in the commercial vehicle market. It is
reported that Ace had already captured 65% of the small commercial vehicle segment and is

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expected to contribute an additional turnover of Rs 2500 crore.It is again a sign that Tata Motors
have identified the DNA for marketing success in Indian market.

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 Brand EXTENSION OF TATA ACE

In June 2007, Tata Motors had launched the Tata Magic, developed on the Ace platform, as a
comfortable and safe four-wheeler for public transportation. The Tata Magic too is recording
strong adoption in semi-urban and rural areas, and in 2009-10 its sales have touched close to
49,000 units, a growth of 71% over the previous year. With an ergonomically designed all-steel
cabin, Magic has a flexible seating capacity of 4 to 7 passengers, in pleasant and spacious
interiors including comfortable seats and ample legroom for an enjoyable ride for the passengers.

Powered by a 16 HP 700 cc water-cooled diesel engine, it will provide the Magic owner with
high fuel efficiency and very low maintenance. The 12” tyres provide higher ground clearance,
and the rigid front axle can weather tough road conditions. The turning radius of 4.3 meters is
agile enough to navigate narrow bylines and dense traffic. For the driver’s benefit, the Magic has
a clearly visible instrument cluster, utility tray and a digital clock in the dashboard and also a
radio fitment provision. 

The Magic meets BS-III emission norms and has been developed for use in any market -- be it

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urban, semi-urban or rural. It is backed by a 36000 km/12-month warranty. 

The Tata Magic is a Micro van launched by Tata Motors in June 2007. The Magic is the
passenger version of the Ace mini-truck; the new Magic features an all-steel cabin. It offers a
flexible seating capacity of 4-7 passengers with adequate legroom. Powered by a 16 bhp (12
kW), 700 cc water-cooled diesel engine, the Magic offers high fuel efficiency and very low
maintenance. The 12-inch tyres provide higher ground clearance, and the rigid front axle is
designed to handle tough roads. The Magic's turning radius of 4.3 meters (14.1 ft) is nimble
enough to navigate the bylines and traffic of India's crowded cities. The Magic has a clearly
visible instrument cluster, utility tray and a digital clock in the dashboard and also a provision for
fitting a radio.

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 PRODUCT EXTENSION OF TATA ACE

The Tata Ace has become India’s first 1 lakh brand in goods commercial vehicles.

The Tata Ace was launched in May 2005 as India’s first mini-truck with a sub-one tonne
payload. Starting with sales of about 30,000 units in 2005-06, its footprint more than doubled in
2006-07 to over 70,000 and further grew to over 89,000 units in 2007-08. Even in 2008-09, a
year impacted by the downturn in the commercial vehicles industry, the Tata Ace clocked sales
of over 81,000 units.

With brand extensions, the Tata Ace portfolio now comprises the Ace, the Ace HT, the Ace
(with stop-start technology) and the Super Ace (I tone).

Brand Name of Tata Ace

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Brand Tata promises trust and dependability’. The Tata brand promise of trust an Dependabiable
and looking after people is very strong

Analysts said that one of the main factors for the massive growth in this segment was the
successful response to 'Tata Ace' (Ace), a mini truck produced and marketed by Tata Motors
Limited (Tata Motors), India's largest automobile company6 , and part of the Tata Group .7 Ace,
India's first indigenously developed sub-one ton mini-truck, was launched in May 2005.

Analysts opined that Ace had changed the dynamics of the LCV market in India by creating a
new market segment termed the SCV segment. Ace rapidly emerged as the first choice for
transporters and single truck owners for city and rural transport. By October 2005, since the
launch of Ace, LCV sales of Tata Motors had grown by 36.6 percent to 28,537 units due to the
rising demand for Ace...

Three-wheeler vehicles had witnessed rapid growth, from 96,000 in 1990-91 to over 300,
0002004-05, despite their poor design and limited capacities, mostly due to their low prices.

BRAND EQUITY OF TATA ACE

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In May 2005, Tata Motors had launched the Ace, a small truck of 0.75 tone. The company
hastudied the market for three-wheeler goods carriers for a while.

It made them look good in their peer group. The Ace was economical and versatile. It could run
over 500 km in a day on a top speed of 63 km per hour; it had a large flat loading area, short
turning radius and high ground clearance with 12-inch tyres.

It could thus negotiate narrow urban lanes and potholed rural roads with equal ease, and was the
right solution for last-mile connectivity. Its price was Rs 220,000, not very different from a
three-wheeler which could cost up to Rs 190,000.

The Ace was a runaway success. In 2009-10, Tata Motors sold over 100,000 Aces. The Magic,
the passenger carrier built on the Ace platform and launched in 2007.With the economy on the
rebound after the year-long slowdown that started mid-2008, the market for commercial vehicles
is growing fast at 12-13 per cent per annum; the small truck segment is growing faster at over 15
per cent.

Market approach: Only too aware of it, Tata Motors has unleashed a slew
of initiatives. First up is a new platform in the 0.5-tonne category, called the Zip, which could be
priced between Rs 160,000 and Rs 190,000.

But isn't it a bit late in the day? Mahindra & Mahindra created this sub-category with its Gio last
year, which was geared to hasten upgrades from three-wheeler load-carriers to four-wheelers.

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However, Tata Motors is hopeful that its 0.5-tonne passenger-carrier, the Iris, will be the first
such four-wheeler in India. The vehicle is being tested in Rajasthan and will be rolled out by
October.

"Most operators are unwilling to shell out a premium of Rs 100,000 or more over the existing
options for a four-wheeler in this segment." Thus, the Iris will likely carry a price tag of Rs
180,000 -- very close to three-wheelers.

The Magic will continue to cater to the deluxe segment, while the Iris will try to take it deeper
into small-town and rural India, places where the three-wheeler passenger share-taxis (as
opposed to auto-rickshaws) ply over 20 to 30 km.

Tata Motors has no intention to leave its rural plans to chance.

"We have set up a rural marketing vertical within our sales and marketing departments. Earlier,
individual marketing teams would strategies for the rural markets they reached. But now, with a
larger portfolio of vehicles priced below Rs 200,000, it is worthwhile to look at it as a separate
market rather than have every brand manager figure it out. The new team will analyse and
implement what is needed," says Pisharody.

But how deep is the company willing to go? While Tata Motors will not go the fast-moving
consumer goods way to towns with a population of 20,000 and below, it will have to assess the
potential of towns that have a population of 25,000 to 50,000. (It already covers towns with a
population of 80,000 and more.)

To help people with lower incomes, whom the Iris and Zip will address, Tata Motors has set up
groups at dealer outlets to help them with sorting out their PAN card, driver's license and
financing. "They (the new customers) usually don't have a track-record of borrowing with the
banks. We can help them with Tata Motors Finance," says Pisharody.

To expand the market, the company has been increasingly tapping quasi-public banks such as
rural and cooperative banks which now contribute over 20 per cent of the loan funds. Eighteen
months ago, these contributed less than 5 per cent of the loan corpus.
"They already have a good reach and afford us the same with financing option"

Expanding reach:

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Meanwhile, Tata Motors is also fortifying its warhorse, the Ace. It is expanding its dealer
network in the hinterland, to begin with.

"When we had launched in 2005, the concept of dealership branches was not there in a big way.
We had about 50 dealerships, which had another 50 to 75 branches. Since the launch of the
Magic and the Ace variants, we realized that we need to get into smaller towns," says Pisharody.

Tata Motors has thus encouraged its dealers to set up 1 S (sales only) outlets as opposed to the
full-fledged 3 S (sales, stocking and service) outlets. The dealer branches have to just set up a
three-bay showroom with an attached sales office. This reduces the investment that a dealer is
required to make.

Small commercial vehicles like the Ace do not have complex technology; as a result,
independent workshops too can fix these.

Tata Motors though has also decreed to maintain not more than 50 km distance between two
service stations, made possible by the Tata Authorized Service Centers. If there are 400 dealer
workshops, there are 700 such centers. The company wants to raise the number of touch points
from 1,100 now to 3,000 in five years' time.

Some time back, Tata Motors also realized that the Ace and Magic can be shipped directly to
dealers, rather than route them through warehouses, because they are small and can be ferried in
road and rail carriages.

At the moment, 75 to 80 per cent of the vehicles are sent straight to the dealers, up from 40 per
cent a year ago. This has resulted in faster dispatches, quicker replenishments and real-time
direct billing.

But this is a game others too can play. Bajaj Auto, the largest maker of three-wheelers in the
country, has extended its rural reach in the last few years and added new features to its products
keeping the demands from such markets in mind.

Mahindra & Mahindra has 550 touch points for its Gio and Maximo, and can leverage the huge
brand equity of its tractors to sell small trucks in the rural markets.

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