International Journal of Technology and Business Management ISSN Number - 2319-6815

Tata Motors' Marketing Strategies for Indica: A Note

Dr.S.Silas Sargunam1, Dr.A.Sathish Kumar2
1
Associate Professor and Head, Department of Management Studies, Anna University, Tirunelveli Regional Centre, Tirunelveli.
2
Faculty Member, Govt. Degree & PG College, Godavarikhani, Telangana.

Abstract
Tata Motors Ltd, earlier known as Tata Engineering and Locomotives Company Ltd, made an impressive
foray into the passenger cars arena with its small car Indica in the year 1998. Tata Motors had made the
following proclamation about the car. We will offer the Indian consumer a car, which will have the size of a
Maruti Zen, the internal dimensions of an Ambassador, at the price of a Maruti 800 and with the running cost
of diesel.

Tata Motors developed the car, Indica, in a record time of 31 months and at a total cost of Rs.1,700 Crore. This
was a remarkable achievement considering the global average of 48 months and Rs.12750 Crore for the
development of a new car.

After all, developing an automobile within a record time is one aspect and marketing is the real challenge in
the business world. This note focused on marketing strategies for the newly developed Indica covering
Product, Pricing, Distribution and Promotional Strategies.

Key words: Marketing Strategies, Automobile, Strategies

TATA MOTORS' MARKETING rejuvenation have been categorically presented under

STRATEGIES FOR INDICA
Tata Motors Ltd, earlier known as Tata
Engineering and Locomotives Company Ltd, made an
impressive foray into the passenger cars arena with its
small car Indica in the year 1998. Tata Motors had
made the following proclamation about the car. We will
offer the Indian consumer a car, which will have the
size of a Maruti Zen, the internal dimensions of an
Ambassador, at the price of a Maruti 800 and with the
running cost of diesel.
The chairman of the company went on to state that
his company could build a car for Rs.93000. Adding
tax at the rate of forty percent, marketing cost of about
Rs.25000 and a profit margin of Rs.35000, the company
claimed that it could offer Tata Indica at a price of
about Rs.2 lakhs.
Tata Motors developed the car, Indica, in a record time
of 31 months and at a total cost of Rs.1,700 Crore.
This was a remarkable achievement considering the
global average of 48 months and Rs.12750 Crore for
the development of a new car.
MARKETING STRATEGY:
Tata Motors also meticulously developed an appropriate
marketing strategy for Indica. Startegies involving
Brand positioning, Segmentation, Targetting, Brand
IJTBM | Volume 3 | Issue 1 | January-March 2014
Product related strategies, Pricing strategies,
Distribution strategies and Promotion strategies.
PRODUCT RELATED STRATEGIES:
First of all, the choice of the brand name was carefully
done. The term Indica means India. This brand name
went will with the fact that it was the first car to be
developed without any foreign collaboration. Even
though global talent was used in the development
process and an unused Nissan car plant in Australia
was bought and reinstalled in Pune, the absence of a
foreign collaborator played well to the patriotic sense
of the Indian buyers.
The physical dimensions of Indica are as follow. It was
162.5cm wide and offered a shoulder room of about
135cm. The spaciousness of the car was its major
strength. However, this did not affect the performance
of the car. For example Indica LEI, which had a 1.4
litre engine pumping 75BHP giving a 0-60kmph within
six seconds. According to Rajiv Dubey, VP
(commercial) passenger car business unit, Tata Motors,
the Indica buyer was one with a large family and was
looking for running cost economy apart from power.
Launched in December 1998, Indica started off with a
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International Journal of Technology and Business Management
record 1.15lakh bookings. However there were some
performance deficiencies and hence sales declined.
This led the company to revitalise Indica with improved
suspension, more powerful air-conditioning, better
gearshift mechanism, wider tyres and an engine, which
has been refined substantially. Thus Indica V2 was
launched in February 2001.
PRICING STRATEGIES:
Tata Motors' commitment to offering Indica as a value
for money car reflected in their pricing strategy also.
It made Indica, the second most inexpensive car in the
world after Maruti-800. The company offered four
variants of Indica. The prices of these variants are
given below as ex-Show room price at New Delhi.
The Standard petrol version was priced at Rs.2.59
lakhs. The Standard diesel version (DL) was priced at
Rs.2.85 lakhs. The air-conditioned diesel version was
priced at Rs.2.95 lakhs. The deluxe diesel version was
priced at Rs.3.9 lakhs. The deluxe model was fitted
with power steering, power windows and audio system.
There was no other diesel car available in India
at the price of Indica. This was much lower than the
prices of Maruti Zen or Hyundai Santro. This was true
even after Maruti Udyog Ltd slashed the price of Zen
just prior to the launch of Indica. Even the deluxe
version of diesel Indica was cheaper than the diesel
versions of Fiat Uno and Maruti Zen.
Indica was targeting the price sensitive first time buyers
of cars. This placed Indica in a unique position to wean
away the potential buyers of Maruti-800. The company's
strategy of offering a bigger car at the price of a small
car went well with the car buyers. This was evident
from the 115000 bookings in the first seven days for
Indica. The company earned Rs. 3407 Crore from the
bookings for the Indica.
DISTRIBUTION STRATEGIES:
The company was taking efforts to ensure that its truck
lineage did not come in the way of servicing a
completely different kind of consumer. In this context,
it was even told that Tata Motors was imitating General
Motors' Saturn strategy of creating a company within
2 IJTBM | Volume 3 | Issue 1 | January-March 2014
ISSN Number - 2319-6815
a company. Hence with the objective of meeting the
expectations of the car buyer, a new distribution channel
was developed. The company had entered into a joint
venture with a Hong-Kong based car delarship
concorde, which is a member of the Jardine Matheson
international group. This only reflected the commitment
of Tata Motors in setting up world class distribution
outlets across the country.
Concorde had initially started off with 9 dealerships
and 25 outlets. By 1999 it had established a distribution
network comprising of 110 dealers and 400 service
centres. This established network gave the company a
wide reach. A special feature of Concorde is that it is
structurally leaner than other dealerships. It has just 3
levels namely Managing Director, general managers
and managers. Most of the other car marketing
companies have a minimum of 5 levels. The global trend
in car retailing is to have 3 levels. This increases the
company's ability to meet the customer requirements
as quickly as possible.
All the dealers are linked to the company through
VSATs. This reduces the order processing time by 80
percent. By global norms, such real time information
flows reduce inventory by 25 percent besides bringing
about substantial savings in transaction time and cost.
Being online will save a minimum of 4 days from the
lead-time. Concorde also had a three-member cell in
its head quarters at Bangalore to exclusively deal with
the inventory management of the distribution channel.
The responsibility of this cell was to ensure that the
distribution channel elements carry minimum inventory.
PROMOTION STRATEGIES:
The target segment for Indica, as stated by the company,
was the buyer with a large family who would be looking
for running cost economy apart from power. Indica
was rightly positioned as a larger car with a larger
engine at the price of a small car. This theme was
clearly communicated to the potential buyers through
the professional services of the advertising agency,
FCB- Ulka. The tagline 'more car per car' effectively
conveyed the theme to the prospective buyers.
Questioning headlines such as 'why jam your family in
International Journal of Technology and Business Management
a pint sized car when you can spread them out in the REFERENCES:
Indica?' were used to highlight the spaciousness of the 1.
car. The advertisements also highlighted the savings on
2.
fuel and running costs which according to the company
amounted to thirty thousand rupees each year. 3.
The company also laid emphasis on the quality of
4.
performance of the car by showing in the TV
commercial Japanese bowing to the car after it 5.
successfully completes various tests. The company
6.
also offered a 18-month warranty of unlimited mileage.
This promotional activity also drew the attention of the
utility conscious Indian buyer. The public image and 7.
the goodwill enjoyed by the Tata brand made the
8.
celebrity endorsement redundant. Tata Indica also got
enough publicity free of cost. Acclaimed as the first 9.
Indian car to be developed without foreign collaboration,
Indica definitely got mileage out of latent patriotism. 10.
CONCLUSION:
The effectiveness of the marketing strategies 11.
adopted by Tata Motors was evident from the fact that
12.
Tata Indica went on to become the leader in its category
within three years of its launch.
"Never let what you cannot do interfere with what
you can do"
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ISSN Number - 2319-6815
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– John Wooden
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