SUMMER TRAINING REPORT

ON

MARKETING STRATEGY
OF TATA MOTORS

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF

BACHELOR OF BUSINESS ADMINISTRATION (BBA)

Trinity institute of Professional Studies

GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY
SESSION 2007-2010
 ACKNOWLEDGEMENT

The present work is an effort to throw some light on “Marketing Strategy of Tata

motors”. The work would not have been possible to come to the present shape without

the able guidance, supervision and help to me by number of people.

With deep sense of gratitude I acknowledged the encouragement and guidance received

by my organizational guide Mr. Ajay Kumar Sharma (Marketing Sales-Manager) and

other staff.

I convey my heartful affection to all those people who helped and supported me during

the course, for completion of my Project Report.

(Abhishek Goel )

(I)

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3
 EXECUTIVE SUMMARY

As India celebrates its 50 years of independence, the passenger car industry celebrated a
centenary of its existence in India in 1998. Despite this head start, the industry has never
quite matched up to the performance of its counterparts in other parts of the world. The
all-pervasive atmosphere created by the government's license raj was primarily
responsible for this situation. The various layers of Acts sheltered the industry from
external competition and smothered the development of the Indian automobile industry.
Moreover, the industry was considered low priority as cars were considered to be an
"unaffordable luxury."

Hence in the first part of the project I have taken up the strategic group analysis of
TELCO as this is one company whose indigenously manufactured cars like Tata mobile,
Indica and Safari have performed well on Indian Roads.

In the second part of the project I conducted a study on the consumer perception about
small cars. Firstly, I took three brands of small cars; Zen, Indica and Santro for a
comparative study of small car segment.

Later I went through the process of filling the questionnaires, to know exactly what the
customer’s of small cars perceived about their cars. A sample size of sixty respondents
was taken. Sample unit was a customer who owned a small car. Secondary data from
various sources like magazines, journals etc was also collected.

The findings showed that the consumer’s who owned small cars basically wanted good
performance, after sales service and a car at their budget, a less expensive one.

(II)

4
All the cars taken for the sample showed that the consumers perceived them as almost
same in all the attributes like safety, comfort and luxury. Respondents liked Indica more
for its looks, whereas Marti’s after sales service was perceived to be good.

But, at the end the research was limited due to small sample size, small sample area and
time constraints.

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 TABLE OF CONTENTS
Page
No.
ACKNOWLEDGEMENT (I)
EXECUTIVE SUMMARY (II)
CHAPTER - 1 INTRODUCTION 7

1.1 AUTOMOBILE SECTOR IN INDIA 7

1.2 MAJOR MANUFACTURERS IN AUTOMOBILE 8

INDUSTRY

CHAPTER - 2 COMPANY PROFILE 9

2.1 AREAS OF BUSINESS 10

2.2 SWOT ANALYSIS 13

2.3 STRATEGIC GROUP MAPS 20

2.4 MANUFACTURING UNITS OF TELCO 22

2.5 PASSENGER CAR SEGMENTATAION 25

CHAPTER - 3 OBJECTIVES OF THE STUDY 29

CHAPTER – 4 RESEARCH METHODOLOGY 30

4.1 RESEARCH DESIGN 30

4.2 SECONDARY DATA 31

4.3 UNIVERSE 32

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4.4SAMPLE DESIGN 32

CHAPTER - 5 FINDING AND ANALYSIS 33

5.1 KEY FACTOR FOR SUCCESS 36

5.2 PEST ANALYSIS-IDENTIFICATION OF CHANGE 39

DRIVERS

5.3 STRATEGY IMPLEMENT 41

5.4 ANALYSIS 46

5.5 CONCLUSIONS 54

CHAPTER - 6 ANNEXURE 55

6.1 QUESTIONNAIRE 58

CHAPTER - 7 BIBLIOGRAPHY 60

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 CHAPTER-1
INTRODUCTION

1.1 AUTOMOBILE SECTOR IN INDIA

Following India's growing openness, the arrival of new and existing models, easy
availability of finance at relatively low rate of interest and price discounts offered by the
dealers and manufacturers all have stirred the demand for vehicles and a strong growth of
the Indian automobile industry.

The data obtained from ministry of commerce and industry, shows high growth obtained
since 2005- 06 in automobile production continuing in the first three quarters of the 2005-
06. Annual growth was 16.0 per cent in April-December, 2006; the growth rate in 2004-
05 was 15.1 per cent The automobile industry grew at a compound annual growth rate
(CAGR) of 22 per cent between 1992 and 1997.

With investment exceeding Rs. 50,000 crore, the turnover of the automobile industry
exceeded Rs. 59,518 crore in 2002-03. Including turnover of the auto-component sector,
the automotive industry's turnover, which was above Rs. 84,000 crore in 2004-05, is
estimated to have exceeded Rs.1,00,000 crore ( USD 22. 74 billion) in 2005-06.

AUTOMOBILE DEALERS NETWORK IN INDIA

In terms of Car dealer networks and authorized service stations, Maruti leads the pack
with Dealer networks and workshops across the country. The other leading automobile
manufactures are also trying to cope up and are opening their service stations and dealer
workshops in all the metros and major cities of the country. Dealers offer varying kind of
discount of finances who in tern pass it on to the customers in the form of reduced
interest rates.

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1.2 MAJOR MANUFACTURERS IN AUTOMOBILE INDUSTRY
• Maruti Udyog Ltd.

• General Motors India

• Ford India Ltd.

• Eicher Motors

• Bajaj Auto

• Daewoo Motors India

• Hero Motors

• Hindustan Motors

• Hyundai Motor India Ltd.

• Royal Enfield Motors

• Telco

• TVS Motors

• DC Designs

• Swaraj Mazda Ltd

Government has liberalized the norms for foreign investment and import of technology
and that appears to have benefited the automobile sector. The production of total vehicles
increased from 4.2 million in 1998- 99 to 7.3 million in 2005-06. It is likely that the
production of such vehicles will exceed 10 million in the next couple of years.

The industry has adopted the global standards and this was manifested in the increasing
exports of the sector. After a temporary slump during 1998- 99 and 1999-00, such exports
registered robust growth rates of well over 50 per cent in 2002-03 and 2003-04 each to
exceed two and- a-half times the export figure for 2001-02.

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 CHAPTER-2
COMPANY PROFILE

Tata motors one of India's largest private sector companies with a turnover of over Rs 80
billion, is the country's leading commercial vehicle manufacturer and has significant
presence in the multi-utility and passenger car segments.

Tata motors were established on September 1, 1945, originally for the manufacture of
Steam Locomotives at Jamshedpur. By 1954, the company had diversified into the
manufacture of commercial vehicles in collaboration with Daimler Benz, Germany. By
the time their collaboration ended in 1969, Tata motors had become an independent
producer of Medium Commercial Vehicles with a great degree of indigenization. It had
also developed the capability of designing, testing and manufacturing such vehicles.

The widely successful Tata Indica, an Euro 2 compliant vehicle, is the country’s first
indigenously designed, developed and manufactured passenger car. Tata Motors followed
that up with the Tata Indigo, a sedan that was launched in December 2002. The company
also makes several other passengers vehicles, including the Safari, Sumo and Sierra.

The company’s products have received wide acceptance not only in India but also in the
Middle East, Asia, Africa, Australia, Latin America and Europe.

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2.1 Areas of business

The company manufactures medium, heavy and light commercial vehicles, multi-utility
vehicles and passenger cars. In the year ending March 2001, the company’s revenues
from its four manufacturing plants at three locations in India were Rs. 81.64 billion (US $
1.73 billion). In 2000, they were Rs. 89.61 billion. (US $ 1.9 billion)

{The average exchange rate has been taken as Rs 47.0 to one US dollar.}

In the year ended 31 March 2001, the company’s total exports were worth about Rs 7.22
billion (US $ 153.6 million), against about Rs 6.09 billion (US $ 129.5 million) in the
previous year.

Locations

The company’s manufacturing plants in India are at Jamshedpur, Pimpri and Chinchwad
near Pune in Maharashtra, and Lucknow in Uttar Pradesh. Land has been acquired at
Dharwad (Karnataka) to build a fifth plant.

Collaborations

The company has technical tie-ups with:

• The Institute of Development in Automotive Engineering (IDEA), S.P.A., Italy,

for assistance in small car body design and styling; and

• Le Moteur Moderne, France, for the development of diesel and petrol engines for
passenger cars.

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Subsidiaries

• Tata Construction Equipment Company Ltd. (TELCON): Its principal

business is manufacture and sale of construction, material handling and
earthmoving equipment.

• Tata Technologies Ltd.: It oversees the IT requirements of Tata Motors and

provides services for SAP implementation, CAD/CAM-based design, and e-
commerce facilities to customers in India and abroad.

• Sheba Properties Ltd: It is an investment and finance company and a wholly-

owned subsidiary of Tata Motors since its inception. It is registered with RBI as a
Non Banking Finance company.

• Telco Dadajee Dhakjee Ltd. (TDDL): It is an investment and finance company

and proposes to undertake activities pertaining to the sales and service of Tata
Motors’s vehicles and spare parts.

• Minicar (India) Ltd.: Formerly known as Mazda Industrial Chemicals Ltd., this
company was incorporated on January 18, 1972 and is currently engaged in the
business of automobile sales and services.

• HV Transmissions Ltd.: It was incorporated on March 13, 2000 with the

objective of acquiring the Heavy-Duty Gear Box Division of Tata Motors at
Jamshedpur as a going concern. It supplies transmissions and their parts to Tata
Motors against purchase orders raised by Tata Motors on HVTL.

• HV Axles Ltd.: It was incorporated on March 13, 2000 with the objective of
acquiring the Heavy-Duty Axle Division of Tata Motors at Jamshedpur as a
going concern. It supplies axles and their parts to Tata Motors against purchase
orders raised by Tata Motors on HVAL.

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 • Telco Automation Ltd.: It was incorporated on March 13, 2000 with the
objective of acquiring the Machine Tool and Growth Divisions of Tata Motors as
a going concern. As and when required, Tata Motors sources factory automation
equipment from TAL.

• Tata Technologies, USA: It was incorporated on August22, 1994 and became a

wholly owned subsidiary of Tata Technologies Limited on December 22, 2000.
The company is engaged in the business of computer consultancy and related
services.

Strategic alliances

Tata Motors has several joint ventures and alliances. These include:

• Tata Cummins Ltd., a joint-venture with Cummins Engine Company Inc., USA;
makes fuel-efficient, low emission, environment-friendly diesel engines;

• Tata Holset Ltd., a joint-venture with Holset Engineering Company, UK, makes
turbochargers for diesel engines manufactured by Tata Cummins Ltd. and other
OEMs;

• Concorde Motors Ltd., a joint venture with Jardine International Motors

(Mauritius) for dealerships of passenger vehicles. Concorde has dealerships for
Tata Motors passenger vehicles in Delhi, Mumbai, Bangalore, Ludhiana,
Hyderabad, Chennai and Lucknow.

• Tata Precision Industries Pvt. Ltd., Singapore, for the manufacture and sale of
high precision toolings as well as electronic and plastic components for the
computer industry;

• Tata Motors Services Ltd., Singapore, for the sale of spare parts for Tata

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 vehicles; and

• Nita Company Ltd., Bangladesh, for the assembly and sale of Tata commercial
vehicles.

2.2 SWOT ANALYSIS

Tata Motors is highest selling car company in India and is the four wheeler manufacturer
in the world. As the case is every company has it strengths and weaknesses and Tata
Motors is no Exception: -

STRENGTHS

1Market Leader in terms of sales and turnover

2A wide network of dealers across the nation

3A wide network of authorized service stations at different parts of the country

4A wide variety of product portfolio

5Very strong brand image of making fuel efficient and reliable cars

6High product and brand recall among the customers infect Tata is the first choice among
the majority customers.

WEAKNESS

Major weakness of Tata are

1Not a strong player in the rural market

2Very few models at the lineup stage

3R& d of Tata Motors is weak

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4Not a Strong Player in the Premium Market

5It’s a non player in scooter market which is huge even though that industry is going
through a rough pace

OPPORTUNITIES

1)It’s a growing market thus company has high growth potential in future

2)Premium segment is still not fully exploited with right product Tata Motors can
do wonders

3)Neighboring countries markets are not exploited fully

4)Need to tap African and European market.

THREATS

1)Entry of new players

2)New companies entering in the car market will pose a considerable threat

3)Competitors becoming aggressive with new product launches and high

marketing pitch

4)Aggressive Maruti and Hyundai posses another threat

5)NO tie up with any other company can lead to losses

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 LITERATURE REVIEW

TELCO:

Currently the largest automobile company in India, Tata Motors ranks among the top 10
commercial vehicle producers in the world.

The transition of Tata Motors from being a predominantly commercial vehicle

manufacturer to a complete automobile company began in the early 1990's with the
launch of the first Sports Utility vehicle from Tata- the Sierra and later the Tata Estate.
The insights gained into customer needs in these markets led to the development of
another world-class Sports Utility Vehicle, the Tata Safari, launched in 1998.

Soon after launching the Safari, Tata Motors made an aggressive foray into the mainline
passenger car market with its small car, the Tata Indica. The Indica fulfills the Tata
Group Chairman Ratan N Tata's vision of developing and manufacturing a truly Indian
car that would use modern technology and contemporary styling of the small car genre. It
went on to set a benchmark in terms of its value proposition in terms of best value for
money in its segment and internal spaciousness.

The overwhelming customer response that the Indica generated at its launch in early 1999
has translated into its capturing more than 17% of the premium small car segment, and 8
% of the entire passenger car market in India within a year.

Clearly identifying the core areas as R&D, manufacture of critical components and the
final vehicle assembly, the company continues to be open to global alliances to
effectively enhance its competitiveness in the fast globalizing Indian markets.

Setting standards of corporate governance, Tata Motors focuses on Complete Customer

Satisfaction. With benchmarking systems to sell world-class products and services, Tata

16
Motors continues to uphold the trust of its various stakeholders, viz. shareholders,
customers, employees and business associate.

Business Sector

The Tata Group runs businesses in seven key industrial sectors, namely, Materials,
Energy, Chemicals, Consumer Products, Engineering, Communications and Information
Systems, and Services. TELCO is Tata’s flagship company in the Engineering sector.

Business Models

TELCO is primarily a Business-to-Consumer Company (B2C), serving various needs of a

number of its customers. It also practices the Business-to-Business (B2B) Model, though
at a much lower scale.

Business

TELCO is into the business of manufacturing and selling medium, heavy and light
commercial vehicles, multi utility vehicles and passenger cars.

Its major product line can be basically classified into three broad categories. There are
various sub-brands and products in these categories:

1.Passenger Cars

2.Utility Vehicles

3.Commercial Vehicles

TELCO currently has three products in its Passenger Car division namely,

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 a. Tata Indica

b. Tata Indigo

c. Tata Safari

It is in the process of coming out with another member in the passenger car family, the
all-new Indica Sedan, set out to storm the Indian Mid-Size Passenger car segment,

18
which would be launched in the last quarter of 2002.

Confirming to International standards all these vehicles are available with various
features such as petrol & diesel versions, 2-wheel and 4-wheel drives etc.

TELCO currently has three products in its Multi-Utility vehicle division namely,

a.Tata Sumo

b.Telco Sport

c.Telco line Pickup Vans

All these vehicles come only in diesel-engine versions and are quite popular on the Indian
roads, especially on the highways and in the rural areas. They are known for their build
quality, reliability, ruggedness, and the various uses that they can be put at.

They are used as people carriers, as emergency vans, goods carriers, pick-up vehicles and
so many more uses.

The utility pick-up vans of Tata International are made for all kind of terrains and are
facilitated with features like 2 & 4 wheel drive, single & crew cabs etc.

TELCO is the undisputed leader as regards the Commercial Vehicle segment. It has a
large number of products in this segments classified as various types namely,

a. Buses

- Small Buses (4 models)

- Big Buses (4 models)

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b.Trucks

- Light Trucks (5 models)

- Medium/Heavy Trucks (9 models)

c.Tippers (3 models)

d.Tractors (3 models)

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2.3 STRATEGIC GROUP MAPS

INTERNAL ANALYSIS

The basic premise is the Customer. So whenever a new product development plan comes
into picture, the idea is to look for ways to offer the customer the best value for his
money. And the way we define value, the word covers all the possible and not so possible
ways to customer satisfaction.

STRATEGIC INTENT

Leadership with Trust

Purpose
Being a part of the Tata Group, Telco’s corporate purpose is to improve the quality of life
of the communities that it serves, through leadership in sectors of national economic
significance, to which the group brings a unique set of capabilities. This requires
aggressive growth in its focused areas of business.

The Tata Group’s heritage of returning to society what it earns evokes trust among
consumers, employees, shareholders and the community. Formalizing the high standards
of behavior expected from employees and companies continuously enriches this heritage.

The Tata name is a unique asset representing leadership with trust. Leveraging this asset
to enhance group synergy and becoming globally competitive is the route to its sustained
growth and long-term success.

5 Core Values

The Tata Group has always sought to be a value-driven organization. These values
continue to direct the group's growth and businesses. The five core Tata values

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underpinning the way it does business are:

1Integrity - we must conduct our business fairly, with honesty and transparency.
Everything we do must stand the test of public scrutiny.

2Understanding - we must be caring, show respect, compassion and humanity for our
colleagues and customers around the world and always work for the benefit of India.

3Excellence - we must constantly strive to achieve the highest possible standards in our
day-to-day work and in the quality of the goods and services we provide.

4Unity - we must work cohesively with our colleagues across the group and with our
customers and partners around the world, building strong relationships based on
tolerance, understanding and mutual cooperation.

5Responsibility - we must continue to be responsible, sensitive to the countries,

communities and environments in which we work, always ensuring that what comes
from the people goes back to the people many times over.

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2.4 MANUFACTURING UNITS OF TELCO

Tata Motors owes its leading position in the Indian automobile industry to its strong
focus on indigenisation. This focus has driven the company to set up world-class
manufacturing units with state-of-the-art technology. Every stage of product evolution -
design, development, manufacturing, assembly and quality control, is carried out
meticulously. Its manufacturing plants are situated at Jamshedpur in the East, Pune in the
West and Lucknow in the North.

Jamshedpur:

This was the first unit of the company established in 1945 and is spread over a area of
822 acres. It consists of 3 divisions - Truck, Engine (including the Gear Box division)
and Axle. The divestments in March 2000 hived off the Axle and Engine plants into
independent subsidiaries. The Truck Division boasts of two assembly lines. The main
assembly line, measuring 180 metres in length, has 20 stations with a vehicle rolling out
every 8 minutes while the other line is dedicated to Special Purpose Vehicles (SPVs).
State-of-the-art facilities like a Centralized Paint and Press Shop with a set-up of a 5000
tonne Siempelkamp press line and a cut-to-length line for strip preparation purchased
from M/s. Kohler of Germany makes it a fairly advanced production outfit.

This is supported by a fully equipped Foundry which supplies high-grade SG Iron

castings for automobile components and excavators and is rated as one of the cleaner,
better and highly automated foundries in the world. The Foundry has a sophisticated
Kunkel Wagner high pressure moulding line, which has a rated production capacity of 90
pairs of moulds every hour. The Foundry has its own melting shop, core shop and sand
plant. Other advanced facilities include Channel Furnaces, Computerized Testing
Equipment etc. In 1993, the Foundry was ISO 9002 certified by the Bureau Veritas
Quality International and later followed it up with the more stringent QS 9000

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certification from the BVQI in the year 2000.

The unit is also equipped with a semi-automated forging line, with 40,000 mkg Beche
hammer and state-of-the art presses from Kurimoto of Japan and is one of the most
modern forging set-ups in the country. It produces critical forging like crankshafts, front
axle beams and steering parts for the automobile plant. The new forging line, installed on
April 20, 1984, has the capability to forge front axle beams at 90 sec per piece and
crankshafts at 120 sec per piece. Mechanical presses help produce a variety of heavy
forging. The sophisticated FIDIA Digit 165 CC graphite milling machine links shop floor
machines to the design workstation. The Forge has been certified as ISO 9002 and QS
9000 by the BVQI.

Pune:

The Pune unit is spread over 2 geographical regions Pimpri and Chinchwad and has a
combined area of around 510 acres. It was established in 1966 and has a Production
Engineering Division, which has one of the most versatile tools making facilities in the
Indian sub-continent. It houses a Vehicle manufacturing complex which is one of the
most integrated automotive manufacturing centers in the country producing a large
variety of individual items and aggregates. It is engaged in the design and manufacture of
sophisticated press tools, jigs, fixtures, gauges, metal pattern and special tools, as well as
models for the development of new ranges of automobile products. Its capabilities have
enabled Tata Motors to introduce new products and improve existing ones without
resorting to imports of dies or fixtures.

Over the years, this division has developed expertise in design and manufacture of
automated dies, fixtures and welding equipment. Its large design group is fully
conversant with state-of-the-art CAD facilities and manufacturing facilities comprising of
light and heavy CNC machine shops, jigs boring room, plastic template shop, wood

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pattern and model pattern shop, five axis precision machine tools and laser control
machines. To cope with such a diverse range, four assembly lines have been established,
one each for MCVs and HCVs, LCVs, multi-utility vehicles and one for Passenger Cars
(Indica).

The Passenger Car Division in 'K' block executes the entire process of car manufacture
over five shops - the engine shop, the transmission shop, press and body shops, paint
shop and the trim and final assembly shop. The shops are fully automated ensuring that
there is minimal chance for error in the manufacturing processes. After the car is
completely assembled, it goes through several checks like wheel alignment, side slip test,
brake test, shower test, and a short test run before it is ready for dispatch.

All systems such as materials management, maintenance and other activities are
computerized, enabling smooth operations and minimum inventory needs.

The Electronics Division is engaged in the production of a wide variety of Machine Tool
Controllers, PLCs, and Test rig instrumentation, Servomotors, Proximity Switches. In
addition, it has developed a number of components such as flashers, horns, timers that are
used in Tata Motors vehicles.

Industry experts rate the fully automated Foundry at Chinchwad among the best,
worldwide. The Iron Foundry produces 16,000 tonnes of high precision castings per year
with the help of 450 employees. These include Cylinder Blocks, Cylinder Heads, Gear
Box Housing, etc. To dispense with the need for outsourcing, an Aluminium Foundry
with an annual capacity of 700 tonnes has also been established.

Lucknow:

Lucknow Plant is the latest in Tata Motors 's manufacturing facilities. Established in
1991 and covering an area of 600 acres, it was primarily started to assemble Medium

25
Commercial Vehicles (MCVs) to meet the demand in the Northern Indian market.
However, in 1995, the unit started manufacturing bus chassis of Light Commercial
Vehicles (LCVs) and SUMO's. The unit is equipped with facilities to manufacture spare
parts. Subsequently, G-16 and G-18 Gear Parts were added in 1998. The plant started to
assemble G -16 Gearboxes in 2000 to meet the in-house requirement for SUMO vehicles.

2.5 PASSENGER CARS SEGMENTATION

The segmentation of the passenger car market in India is vastly different from that in the
developed nations. In India, the economy segment accounts for the largest share of the
cars sold, as compared to mid-range segment in the mature markets. The economy and
the premium segment face the lowest competitive threats, while the premium segment
will witness intense competition due to lower volumes.

Segment-Wise Classification of the Indian Car Market Segment

Range Price ('000 Rs.) Models

Economy 225-350 Maruti 800, Maruti Omni, Premier,

Ambassador, Hyundai Santro, Zen,

Mid-range 350-450 Uno, Ford Ikon, Fiat Palio

Premium 450 - 1,000 Esteem, Opel Astra, Ford Escort,

Mitsubishi Lancer, Hyundai Accent

Luxury > 1,000 Opel Vectra, Rover Montego, Mercedes

benz

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Key Demand Drivers

Traditionally, disposable income was perceived as the one critical factor that drove
passenger car demand. However, household income is no longer the single most
important factor in determining the demand for vehicles. Other critical factors are the
mobility needs of people and the availability of cheap finance. The top three income
groups - middle, upper middle, and high - have grown from 10% in 1986 to 17% of the
population and covers over 52 million families. The number of high-income households
is growing very rapidly, more so in the rural areas. These findings have revolutionary
implications for the passenger car market. The development of the used car market will
also play a major role, as the customers will be encouraged to trade in their old cars. The
key to the growth of future markets is to make maintenance-free vehicles, to improve the
road infrastructure, and to reformulate fuels and lubricants so as to reduce vehicle-
operating costs.

PRICING

In any business, nothing is more dangerous than using money as the magnet for attracting
customsers. It kills loyalty, mangles margins, and encourages defections. But it is the
Unique Selling Price the only road to success in the intensely competitive automobiles
business?

Those in the race for winning over the Rs. 7,500-crore small cars market seem to believe
so.

In the small car segment, the only ‘P’ that, suddenly, seemed to matter was the second in
the Product-Price-Promotion-Place marketing-mix.

27
Evidently, features, technology, and service are secondary. And the only warhead is
price. According to the Research Analyst, Morgan Stanley, “Price is the most important
‘P’ in this market because it is pyramidal in structure, with a huge base and a narrow
apex”.

Everything else remaining constant, the purchase decision of the first-time buyer is
influenced by the 4 factors: Price, Price, Price and Price. The first is the price of
acquisition. The second is the price of finance, or the rate of interest on a loan to buy a
car. Third is the price of maintenance, which includes the cost of fuel, service, and spare
parts. And the fourth is the price of disposal, or the re-sale value of the car. The typical
Indian car-buyer is obsessed with post-purchase pricing. Which is, in effect, the cost of
maintenance and the possible re-sale value. And obviously, the lower the selling price of
a second hand model, the less is the purchaser’s incentive to opt for it.

However, not every company plays the price-card. Instead of cutting the price of Santro,
Hyundai Motors has launched an enhanced version with product fearures like power
steering, and product-plus features like better service and customer-care. Hyundai arrived
at the pricing strategy after a careful analysis. It does not believe in knee-jerk reactions to
rival moves. It also believes that when features are the USP, second P Marketing cannot
help reinforce that position. Strategic price marketing is a corporate weapon that must be
applied in the context of an entire portfolio of cars. Attempting to sell the lowest priced
car in every segment will not enable a company to survive.

Sure, the lower price will be an attraction to the first-time buyer who is, essentially,
stretching his budget to buy personal transportation. The less the stretch, the more is the
likelihood of actually buying a car instead of, say, a two-wheeler. So, even a drop of
Rs.1000 in the small cars segment could expand its size.

Go beyond the entry level – and the price-value equation will kick in immediately. Only

28
if all other things are perceived to be equal between competing brands will price be a
decider. Once incomes start rising again, there will emerge increasing numbers of
upgrades as well as first-time buyers who will not necessarily start at the lowest price-
level. Thus, price will become less important. Applied as a brand-level strategy, price
may help the auto-marketers win over only the entry-level customer.

However, only the lowest priced player will milk this segment. The rest of the low-price
aspirants will have to offer additional features as value to convince the budget-buyer to
spend more. As a corporate strategy, leading the charge through price may have a better
pay-off. A low –priced product will enable new entrants to gain entry into the consumer’s
garage. The threat, however, is that of a dangerous dilution of image.

Thus price can be a selling proposition for only one segment of customers. But a
company that seeks life-long customers, who progressively move up its product ladder,
cannot rely on price alone for success.

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 CHAPTER – 3

OBJECTIVES OF THE RESEARCH

1. Examine the psychographics of small size car customers.

2. To probe the buying behavior of car owners.

3. To find people expectations or satisfaction regarding the small cars.

4. To judge the awareness level of small cars.

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 CHAPTER-4
RESEARCH METHODOLOGY
A research design is the arrangement of condition for collection and analysis of data in a
manner that to, combine relevance to research purpose with economy in procedure.

Research Design is conceptual structure within which research is conducted. It constitutes

the blue print of collection, measurement and analysis of date. Research Design is needed
because it facilitates the smooth sailing of various research operations, thereby making
research as efficient as possible yielding maximum information with minimum time,
effort and money. Research Design stands for advance planning of methods to be used
for collecting relevant data and techniques to be used in the analysis .The design helps
researcher to organize his ideas whereby it will be possible for him to look for flaws and
inadequacies.

4.1 RESEARCH DESIGN

Following questions have to be asked in Research Design

1. What is the study about?

2. Why is the study being made?

3. Where will the study be carried on?

4. What type of data is required?

5. Where can data be found?

6. What periods of time will the study includes?

7. What will be the sample design?

31
 8. What technique of data collection ill be used?

9. How will data be analyzed?

4.2 secondary data:

The major aim of the project was to analyze the Strategies of TELCO and to study the
consumer-buying behavior for small car customers.

For the first part secondary data was collected from various sources that included website
of TELCO and trade journal that were collected from TELCO’s Delhi Office.

Since a part of the research aims at finding the attitude of people towards the different
brands of cars, a conclusive research was conducted. The data collection form was
designed in the form of a standard questionnaire because it is more reliable than
unstructured format.

By reducing the chance or the sample to influence results through different questions and
through different judgment of answers and what to record, the structured questionnaire
produces more reliable results i.e. if the research project is repeated in the same manner,
similar results will be obtained.

32
Most of the questions asked in the questionnaire were closed ended with a few open-
ended questions also, to know consumers general views. Some questions are designed for
the purpose of cross checking the sample genuineness in filling the questionnaire.

For the purpose of analysis, ranking scale is used to rank the preferences of attributes of
the customers. (Semantic differential scale is used to understand the images of brands of
cars as perceived by the consumers. This scale is used because it permits the development
of descriptive profiles that facilitates the comparison of competitive items.)

4.3 Universe: The universe is entire group of items the researchers wish to study and
about which they plan to generalize. For this, the universe consists of people of Delhi
who own small car. Selecting the sample: for this project, a probability sampling method
is used. Probability sampling method is those in which every item in the universe has a
known chance of being chosen in the sample. Here the sample size consists of 60
residents of Delhi. The probability sampling is preferred because:

•It is the only sampling method that provides essentially unbiased estimates having
measurable precision. If the investigator requires this level of objectivity, then some
variant of probability sampling is essential.

The probability sampling permits the researchers to evaluate in quantitative terms, the
relative efficiency of alternate sampling techniques in a given situation. Usually this is
not possible in non-probability sampling.

33
 CHAPTER-5
FINDINGS AND ANALYSIS

EXTERNAL ANALYSIS
The main purpose of this section is to have an insight into TELCO’s external
environment. Here, we shall be briefly looking at the factors influencing its external
environment, its competitors and the kind of competition it faces.

Competition

Competition leads to improvement on all fronts. If healthy, it brings the best out of an
industry. Newer and better technology, innovative and much better products and
processes, user-friendly and economical products providing maximum value to
customers, and other such advantages, all arise out of competition.

TELCO faces stiff competition in almost all its business segments but has emerged as the
winner when it comes to market success. Out of its three business segments namely, the
Passenger Car division, Utility vehicle division and the Commercial vehicle division, the
Passenger Car division is the area, which is seeing a lot of activity in the current period.
And this activity is all set to intensify with the launch of the all-new TATA Sedan in the
later half of the current year.

TELCO currently has two products in the passenger car segment- the Indica and the
Safari. It faces direct competition from almost all the major automobile players in the
passenger segment, namely Maruti Suzuki, Hyundai, Fiat, Daewoo and Toyota.

S.I.A.M. (Society of Indian Automobile Manufacturers) has classified the Passenger Car
segment in India into further sub segments on the basis of their length,

34
 1. Small Car segment (B segment)

2. Entry-level Mid Size segment (lower C segment)

3. Premium Mid Size segment (upper C segment)

4. Luxury Segment (D segment)

TELCO currently has one offering in the Small Car segment- The Indica, and one
offering in the Sports Utility Vehicle segment - The Safari. The proposed offering,
christened the TATA Sedan shall compete in the entry-level Mid-Size Car segment.

TELCO also has plans to introduce another offering in the Luxury car segment code-
named ‘Magna’. The Magna shall be launched some time during the later half of next
year in 2003. TELCO currently is tight-lipped about the Magna and has divulged no
details regarding the car but according to group Chairman Mr. Ratan Tata, the Magna
shall be TELCO’s answer to the Luxury Segment in India, which shall force the
competitors to revamp their strategies. And if the success of the Indica and the Safari is to
be believed, these words are sure to see light in the near future.

The Indica comes in both diesel and petrol variants. TELCO has redefined the rules of the
game by launching the all-new Indica V2, which has met with huge success in the recent
months. It has earned a lot of respect among all the small car manufacturers because of its
quality and value delivered to the customer, truly fulfilling its promise of More Car Per
Car. TELCO, for the year 2002 had promised a product of great pedigree, and the Indica
V2 has just delivered that.

The Indica is directly pitted against the Zen, Alto and Wagon-R from Maruti Udyog, the
Santro from Hyundai, the Palio and Uno from Fiat, and the Matiz from Daewoo.

35
CORE COMPETENCIES

The Core Competencies of is there capability to make the Indica globally competitive in
terms of cost. If Telco can find markets to sell 20,000 or 30,000 more Indica’s, then they
are looking at a very interesting set of numbers. If you add variants to those numbers,
you’re looking at very reasonable numbers. Then you are in the niche. And

if you focus on that niche, invest in technologies required to give that one platform all the
variants and changes that you need, you survive.

Telco has a design and engineering capabilities that are unmatched by its competitors in
the Indian market and the company also possesses an unmatched ability to create and
integrate it. This gives it the capability to compete with firms in the world market.

It also has a World-Class dealer base and alliances with these suppliers; this ensures the
right Inputs for the company and also helps to manage the Just in Time systems.

Smaller auto companies (globally) will have to look for market niche’s to operate. In the
case of Tata Motors, the niche may be the lower end car. The unfortunate part is that the
lower end market does not offer much by way of margins. But you need volumes and that
kind of scale and production processes that will give you those advantages. That is what
Telco has to look for and there they can even stand on their own if they find markets
beyond the shores of India. All that would come from having a niche product that is
globally competitive

But there is still a long way to go before the company is able to make a mark in the world
market and compete with the world’s leading companies in well-developed markets like
Europe, The United States and Japan. For that to happen, it will take a more focussed
approach from the company towards quality and developing R&D and experience in such
project. Though its efforts towards Total Quality Management seem to be helping the

36
company.

5.1 KEY FACTORS FOR SUCCESS

Having the right resources is very important for a company to succeed in any industry.
The resources which are most vital for success in an industry are called ‘Key factors for
success in an industry’, the key factors for the industries that Telco Operates in are:

1.High Quality Management

The LCV & M&HCV segment are highly complicated sectors, the management not
only have to manage all the resources available to the company properly, but also
have to be highly professional in their approach.

2.R&D and Knowledge

The technological changes as per WTO specifications and Euro Emission norms need
to be followed for a company like Telco to sustain growth and Telco has been able to
achieve all this in all its products and services.

Human Resource

Industries like Telco have a high human element, it is very important for a company

to have High quality human resources

3.High and Standard Quality

For industries like Telco which manufacture equipment's that serve the infrastructure
industry, it is very important to have high standards in quality.

4.Managing Cost

37
 It is becoming more and more important for companies to achieve competitive costs,
the company is planning to continue with is cost reduction program. Most of this
would come from reducing fixed costs, operational efficiency an outsourcing.

RESOURCES

The resources of the company are similar for all the industries, many of the resources are
common for all the industries. But the Core Values like management capabilities are
shared by the entire organization.

Some of the major resources that Telco has are

1.Human Resource

Telco possesses a great Human Resource base, its in all its business are a people
oriented operation. The company takes great care to ensure that it has a good supply
of HR, the values and efforts to ensure good Human Resources are shared by the HR
departments of each SBU.

2.Management

The management of the company has gained the reputation of being one of the most
professionally managed companies in India. The management of each SBU has a
strong work ethic with an aggressive approach to managing the company.

3.R&D and Know-how

The company is known for its high level of sophistication when it comes to
technology. And it has great experience in projects with high levels of sophistication,
which is very important in a knowledge-based industry. It has a great R&D base; it
invests a high amount every year (compared to the average spent in the industry) on it

38
 for each department. The R&D departments of each SBU have helped each other, for
E.g. the revival of Indica is a success story.

4.High Quality

The company has extremely high standards in quality; almost all Strategic Business
Units are technology leaders in their field of operation.

Thus it is clear that Telco has most of the resources that companies require to be
successful in the industries it operates in. Cost is the only resource that sometimes
hampers its progress.

VALUE CHAIN

A large number of Telco's operations are different activities on the value chain for E.g.
LCV., Utility Vehicles, HCV or others are used in different sectors, but all the vehicles
have been the leaders in their own segment.

This aspect not only allows the company to it to deliver tailor made products for other
divisions in the company, but also gives some divisions of the company a lot of business.
And the company is able to achieve lower costs than its competitors by procuring
facilities from other departments within the company, thus giving it an edge over the
competition.

SYNERGY

The activities of the company give synergy to the company as a whole; this is due not
only because of the value chain, but also because the R&D from one division helps in the
others. For E.g. the R&D from the Engineering division helps the Production division.
And in the future the company wants to have synergy in all its activities to be highly
successful.

39
 5.2 PEST ANALYSIS- IDENTIFICATION OF CHANGE
DRIVERS

The PEST analysis for Tata Motors and Locomotive Company Ltd. (TELCO):

40
Political

The political environment has been highly unstable over the past few years, but recently
it has settled down somewhat. As we know that Telco is the leader in the commercial
vehicle segment with 54% market share in Light Commercial Vehicle (LCV) and 63%
market share in Medium & Heavy Commercial (M & HCV). Telco has a market share of
221% in utility vehicle segment. The company has also garnered a 9% market share in
the passenger car industry in a very short span. The decision of the government to ban
diesel buses and give licenses to CNG buses has been a boon for TELCO as it is the
major supplier of buses to all State Transport Corporations. Though only few state
governments are stern in implementing this order but TELCO will remain one of the
major suppliers of buses and hence can plan expansion.

Economic

The availability of freight depends on the economic activity in the country. Therefore an
increase in economic activity broadly represented by growth in GDP helps in increasing
the freight availability. The GOI policy towards depreciation norms and excise duty etc
will have a bearing demand for MUV’s and CV’s. The implementation of infrastructure
projects will have a positive impact on demand of CV’s and MUV’s as they are
extensively used in transportation of material and people requirement of projects. The
freight rates determine the revenue component of fleet owners. The improvement in
freight rates consistently over this period will add to business of TELCO. Though oil
prices have gone up but the shift in the oil sector companies towards a positive pricing
strategy will not affect Telco’s business plans & performance.

Socio-Cultural

In order to boost sales passenger car companies often look for a general upbeat
environment. The sales during festival times perk up because the environment all round is

41
joyous and upbeat. Another effect is because of is that of good monsoons which
translates into a higher rural demand especially for the MUV’s. Thus socio-cultural
factors do not affect the Engineering business too much, it does have an impact
indirectly. Though the metropolitans have become over-crowded and but Telco’s Indica
V2 sales have picked up.

Technological

The Company vigorously pursued a programme of product innovation in commercial

vehicle with a view to regaining and improving its market share. The company had
already added to its range Euro 1 Compliant Cummins Engine Powered Vehicle with a
view to regaining and improving its market share. Major innovation in the current year
include a 25 Tonnes Truck and a30 Tonne Tractor Trailer; Fuel Efficient M&HCV Truck
and Busses Powered by Company’s Euro 1 Compliant 697 Engines; a Cost Effective 11
Tonnes Vehicle in both bus and truck version to meet the growing demand in this
segment; and a Fur Tonnes LCV fitted with an internally developed Turbo charged
Engine.

42
5.3 STRATEGY IMPLEMENT

SEVEN S FRAMEWORK

The Boston Consultancy Group in the 1970s developed the ‘Seven S Framework’. It was
designed to build a cohesive strategy, and in turn integrate the 7S, these 7S are inter-
related and inter-dependent.

For the success of an organization the Seven S cannot work in isolation, they have to be
brought together.

For the Strategies to work at Telco, it is important that the company employs the
framework. To implement the framework the company should consider the following
aspects-

STRATEGY

The strategies that the company needs to employ have been discussed in the previous
section. The strategies differ on the various levels, i.e. different for Corporate, Business,
Operational and International Levels. These strategies have to be aligned with the
following elements.

STRUCTURE

When the company undertook the restructuring exercise, it was the first major
restructuring the Tata group had undertaken. The first phase of restructuring required
some basic foundation building. The group developed a common corporate identity for
all group companies leveraging the strengths of the Tata brand. The group companies
were required to sign an agreement to use the Tata brand, which entailed the compliance
with the quality standards and business ethics that we codified at that time. The company
developed the Tata Business Excellence Model to measure the quality and corporate

43
performance of our companies, and required them to achieve the specified level of
performance in order to continue the Tata Brand.

The company instituted the business review committees (BRCS), which constituted the
formal interface between the group and the holding company. The BRCS reviews the
strategic direction of each company, and the executive committee of each board reviews
the operations and the budget of the company.

To oversee the entire restructuring exercise, the group created a central group, which they
called the Group Executive Office (GEO). Its primary task was to look at the strategic
direction of each of our companies, in the process of which it set some tasks for our
company in terms of bottom-line and top-line growth based on historical growth trends,
as industry leadership in terms of being number one, two, or three. Ultimately, the GEO
takes a view on the figment of companies within our group.

Telco has also decided to restructure its operations by reducing its level of vertical
integration. Towards this, the company has decided to hive off three of its ancillary
divisions in Pune and Jamshedpur. The company is at present on the look out for suitable
alliances with international majors.

The company has set up an independent retailing network for cars and also for other
utility vehicles. The strength of dealership for these now stands at 118.

SYSTEMS

Systems are the procedures that make the organization follow for everything from top-
level decision making to board meetings, from employee training and hiring to
transportation. All the company’s activities should have a particular system particular to
the company.

The GEO as mentioned above has put in place certain important hooks such as a central

44
HR and central financial coordination with a view to standardize the MIS systems of
Telco for financial reporting to the holding company. The net result of all these initiatives
has been that Telco now operates more as a group than what they did in the past, but what
this really meant was that each company had the stamp of its own CEO and went its own
way, and if you remove the name o the enterprise you could be looking at different
companies with no connection to the Tata’s.

STYLE

Every company has its own management style, style also consists of the way a company
operates its business.

As mentioned above the company instituted the business review committees (BRCS),
which constituted the formal interface between the group and the holding company. The
BRCS reviews the strategic direction of each company, and the executive committee of
each board reviews the operations and the budget of the company.

STAFF

This aspect concerns itself with the pool of people who need to be developed.

Telco takes a lot of efforts to ensure the best trainee level talent, through campus
recruitment from the top institutes of the country. It then gives them the proper training
and development, giving them the opportunity to grow and improve.

The current chairman of the company Mr. Ratan Tata is a prime example, in the way he
started at the middle level management, and then made it to the top of the company

45
SKILLS

This aspect considers the fact that every organization needs certain skills for its success,
but its not just enough to have skills, an organization must have the right combination of
skills that complement each other.

The company works hard to ensure that it has the necessary skills to ensure its success. It
trains its employees, through a set of carefully designed programs, to give them the
desired skills. Plus it has also entered into a number of alliances with a number of
companies, which help it to gain the necessary experience and which can also help it
improve its R&D.

SUPER-ORDINATE GOALS

These are goals on which the other elements and other goals of the organization should
depend upon. These are reflected in the thinking of the organization.

These are Tata’s Diktat:

Globalize: With economies opening up, Tata companies are aiming for global
benchmarks to compete.

Be Skill – Intensive: With manufacturing ceasing to be India’s advantage, the thrust is on

knowledge – based industries.

Build brands: Shift from selling commodities to marketing branded products and services
that not just differentiate but fetch a premium.

Leadership: To justify shareholder interest, Tata companies must be among the top three
in their industries.

Enhance Performance: Executives must pull their weight, and the best of them must get

46
opportunities across functions and group companies.

LEADERSHIP

Leadership is defined as “The art or the process of influencing people so that they will
strive willingly and enthusiastically towards achievement of the group’s mission”.
Leadership is something that greatly affects any company’s philosophy, culture, and in-
turn the overall health of the company.

Telco always has had a tradition of great leadership. One of its founders Jamshedji Tata
has been a hallmark of leadership.

That surge of electricity – not unnoticed by merchant bankers, now crawling all over
Bombay House, the group headquarters – is in fact the spark that the group is looking for
to rocket itself into a new orbit of growth. In 1991, when a shy and reclusive Ratan Tata
took over the chairmanship of the group from uncle J.R.D Tata, his priority was not new
businesses or even growth. It was something much more immediate – and arduous. It was
to turn a loose confederation of companies, controlled powerfully by powerful satraps,
into a group that thought and acted like one. The challenge however wasn’t merely of
ousting powerful chieftains like Russi Mody of Tatasteel, Ajit Kerkar (Indian Hotels) or
Darbari Seth (Tata Chemicals). The leadership in Telco has also had a big impact on the
company, perhaps like any company its entrepreneurs had the greatest impact on the
company, and they defined its outlook, its businesses and its philosophy in different
situations.

Over the last the 10 years, Ratan Tata has quietly entered 15 new businesses, exited 11,
and herded the rebellious Tata companies into a cohesive group. Tata now wants to
double revenues every four years, and profits, every three. His secret weapon: branded
products and services. He wants to justify shareholder interest and wants Tata companies
to be among the top three in their industries.

47
5.4 ANALYSIS

Sample size – 60

Respondents:

Owners of Santro – 14

Owners of Zen -- 14

Owners of Indica – 14

Owners of 800 –9

Owners of other cars –9

OTHER CAR OWNERS

RESPONDENTS

800 OWNERS
ZEN OWNERS

INDICA OWNERS
SANTRO OWNERS

0 5 10 15 20 25 30
NO. OF RESPONDENTS

Most of the respondents are in an income bracket of Rs.20001 to Rs.25000 and above
Rs.25000.This indicates that most of the car owners belong to either upper of upper
middle class segment.

48
Performance of a car clearly outweighs its style and cost on the consumer’s list of
priorities to buy a car. Performance be it engine make up, fuel efficiency in city
conditions, smoothness, pick up, derivability, is consumer’s first preference in their look
out on attributes in making a decisions for buying a car. Very few consumers surveyed
gave style and cost as their priorities to buy a car. A mere 25% of respondents gave style
and 30% gave cost as their reasons to buy a car. 85% of respondents i.e. 51 out of 60
respondents gave performance of a car as a factor for making a purchase decision.

Given the city conditions, the consumers needed a very good overall performance of cars,
small cars taking less space has no parking problems, easy derivability in heavy traffic
conditions, easy gear shifts and good fuel efficiency. The small car owners being mostly
the professional class or the upper middle class were very cost conscious and due to their
busy life styles preferred low maintenance in their cars.

The small car consumers are high search information seekers, most of them using at least
3 sources of seeking the information. They believe that extensive search is necessary to
make a good buy. Having owned fewest carts previously, they had very less information
about the cars.

Most of these small car buyers being first time purchasers usually go for friends,
automobile magazines or other car owners to get information about the various products
and brands in the market to know the most favorable brand or products and later they
seek further information from dealers and other sources once they are through their
choice process and have decided upon a particular brand or brands to buy.

49
Most of the small car consumers are happy with their purchases. A probe into
respondents’ satisfaction level, ranking from 1 to 5 where ‘1’ was full satisfaction and ‘5’
full dissatisfaction with theirs cars, gave ‘1.79’ as an average figure of satisfaction level.

Out of a total of 60 respondents, 26 ranked their satisfaction level as ‘1’, 20 ranked ‘2’, 9
ranked ‘3’, 2 ranked ‘4’ and only one respondent showed null satisfaction. The main
reasons which were quoted for their satisfaction were driving comfort, good fuel
efficiency, small is cute, easy parking, less maintenance, good pick-up and a perfect car
for a small family.

Again when the consumers were asked about their preference for any other car, the
highest number of respondents chose small cars, that are 20 out of 56 respondents
preferred small cars, midsize cars, 16 large size cars, 5 went for jeep models and 8
consumers luxury cars like BMW, Mercedes, Ferrari, etc. The main reason again given
for their preference was comfort of driving, performance, good looks and fuel efficiency.

50
 FACTORS IMPORTANT IN A CAR PURCHASE

COST
3% 3% 7%
7% STYLE

18%
PERFORMANCE

PERFORMANCE AND
STYLE
PERFORMANCE AND
12%
COST
STYLE AND COST
50%

STYLE COST AND

PERFOMANCE

Out of a total of 60 respondents surveyed, 30 respondents gave performance, 7

performance and style, 11 performance and cost, 2 style & cost and performance, 2 style
& cost , 4 gave style and 4 gave cost as the reasons for purchasing their car

51
RESPONDENTS’ RANKING OF ATTRIBUTES

PREFERENCE RANK PREFERENCE POINTS

140
1

2 120

3 100

4 80

5 60

6 40

7 20

Attributes Preference Rank Preference Points

130
Performance 1.5

Cost 2.9 102

Low Maintenance 2.7 106

After Sales Service 3.4 92

Brand Name 3.8 84

Safety 4.4 72

Credit Facility 6.4 32

52
 CREDIT FACILITY
PREFERENCE POINTS

SAFETY

BRAND NAME

AFTER SALES SERVICE

LOW MAINTENANCE

COST

PERFORMANCE

0 20 40 60 80 100 120 140

ATTRIBUTES

When the consumers were asked to rank the factors, they consider to be important in
buying a car, ranking the factors from 1 to 7 where ‘1’ is the highest preference rank ‘7’,
the lowest preference rank, and performance of the car was ranked the highest on the
preference scale. Performance, on an average of 60 respondents was ranked ‘1.48’
showing that the consumers sought performance in a car as the first important factor in
making a purchase.

The car owners as the second most important factors ranking them 2.9 and 2.7
respectively considered the cost and low maintenance of a car.

After sales service and brand name were the third and fourth preferences of the
respondents with 3.4 and 3.86 as their respective rankings. Safety was ranked 4.35 on the
preference scale and credit facility stood at the car owners’ lowest preference with a rank
of 6.43.

53
 SOURCES OF INFORMATION

40

35

30
NUMBER OF RESPONDENTS

25 TELEVISION
MAGAZINE
FRIENDS
20
DEALERS
MECHANIC
15 OTHER CAR OWNERS

10

0
1
SOURCE OF INFORMATION

The survey showed that a highest number of consumers sought friends as a source of
information. Even as a majority of them went for magazines and other car owners as a
source of seeking information, a good number of consumers went to dealers for getting
the information. Television as a source of information was used by less number of
consumers and a very few of them went to mechanic’s in search of information

54
 INFLUENCING FACTORS IN DECISION MAKING

80

70

60

50
FRIENDS
PERCENTAGE OF
RESPONDENTS 40 FAMILY
MEDIA
30 OTHERS

20

10

0
1
INFLUENCERS

The survey showed that a highest number of consumers influenced by family in decision
making , friends other major factor in influencing the consumer’s decision ,then comes
media & other factors .

55
 5.5 CONCLUSIONS

Consumers of small cars are seeking a very good overall performance in a car than any
other attributes. Most of the consumers prefer Small cars and mid sized cars for their
good mileage, good acceleration, easy derivability, requiring small rooms for parking.
Good looks hardly count for the buyers of small cars.

Again a good after sales service and low maintenance in a vehicle is a garnish on
customer’s delight. Safety and credit facilities are almost ignored factors in purchasing a
small car.

Family wields the highest influencing power in making a purchase decision for an Indian
consumer. Friends and media also have a good impact on decision-making. A very few
consumers take a self-purchase decision.

Usually consumers get detailed information through friends, magazines, other car owners
and dealers whereas, they get the product information from the other sources like
television, hoardings etc.

The dream cars of the consumers are high luxury cars like Mercedes S-class, BMW,
Ferrari, Pajero, Rolls Royce, Jaguar, Porsche, the cars with a class apart when it comes to
their brands images, cars which flaunt status, style, wealth and attitude of the people
owning them, cars which are considered to the best on the globe.

56
57
6.1 QUESTIONNAIRE
A survey of consumer perception about small cars

Personal details:

Name:

No. of members in family:

Monthly household income:

1. Do you own (Please Tick?)

Car 2 wheeler

2. Which car do you own

Name
Model
Colour

3. Are you satisfied with it?

4. How much do you spend on maintenance on a monthly basis?

5. Name some cars in the small car segment in India

6. Rate the following (I to II) attributes according to you preferences while buying a new
car
Price 
Style 
Performance 
Performance & Style 
Performance & Cost 
Style & Cost 
Style , Performance& Cost 

58
8. Comment on the following statements according top the tables given below

1 strongly agree
2- Agree
3-neither agree nor disagree
4-disagree
5- Strongly disagree

 Indica, being the only car which gives best performance

 Santro has the most effective AC
 Zen has the most jazzy and outgoing colures
9. Rate the following cars as per your perception on the basis of the attributes specified (5
excellent to 1 poor)
•Indica
•Santro
•Zen
•Sales and services
•Price
•Fuel efficiency
•Smooth and stable ride
•Luxury
•Low maintenance
•Style
•Financing facility
•Comfort
•Safety

10. Are you planning to buy a car within next?

One month
Two months
6 months
1 year

11. Which one?

12. Why?

13. Comment on the following cars as to how can there be any improvements
Indica
Santro
Zen

59
 CHAPTER-7
BIBLIOGRAPHY

Reference books:

Consumer behaviors. By John C. Mowen Macmillan publications.

Market research By Tull and Hawkins

Internet:

http://www.tata.com/0_careers/our_people/20020214_suman1.htm

http://www.tata.com/0_b_sectors/index.htm

http://www.cybersteering.com/auto_makers/telco/tata.html

http://www.tata.com/tata_engg/index.htm

http://www.tatainternational.com/automob_products.asp

http://www.tata.com/tata_engg/articles/index.htm

http://www.telcoindia.com/home.htm

http://www.tata.com/tata_engg/media/20020228.htm

http://www.tata.com/tata_engg/articles/2000106051indica2.htm

http://www.tata.com/tcs/articles/20011110_auto_engg_service(1).htm

www.marutiudyog.com

www.hyudaimotorindia.com

www.autoweb.com

Magazines:

Auto Car 2007

Auto India January 2006-07

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