CASE 3

STRATEGY OF ACE
Submitted byGroup 8
Ayush Agarwal
Neeyati Mehta
Santhosh Kancharla
Sunny Agarwal

Case Overview
Tata Motors : Indias largest company in the automobile and

vehicle sector
Customer centric rather than product centric
Five essential attributes for a small commercial vehicle:
o lower operating costs
o reliability
o durability
o safety and comfort
o a viable business proposition

Customers
Only
Perfor
mance
custo
mer

Looking-for-a-balance
customer

Return-on-investment customer

Acquisition-price-sensitive customer

Semiurban and
rural
areas:
85% of
the
market

The Ace (mini-truck / baby elephant)

An entry level vehicle between a three wheeler and a four

wheeler
Sturdy vehicle :

can carry loads up to 1.5 tonnes over

distances up to 300 kms.

USP : low product lifecycle cost (which includes purchase

cost, operating cost & resale price)

Useful in congested cities as well
Last mile transport

Launch
TATA called it Indias first mini truck
Exhibited through road shows in villages
Demonstration of the features and benefits
Customers encouraged to test drive the vehicle
An emotional brand at a functional price : apart from

business, it enabled rural customers to increase their

status

Sales and Service

Over 300 1S outlets across India, where customers can

see and buy the product

Apart from dealers, tie ups with local garages for

service requirements
Training programs
Mobile service vans to supplement their reach

Evaluation of Marketing Strategy

Ansoffs Matrix

Tata Ace : Diversification

Rationale: Tata motors is not having any products specific to the rural
segments. Trucks, Cars and Buses are mostly targeted towards urban.

Evaluation of Marketing Strategy

Blue Ocean Strategy (first mover)
Banking on:
Marketing myopia of 3-wheelers
Hub & Spoke models of logistics by using last mile

transportation ability of Ace

Third party logistics
Focus on the ROI-sensitive customer

Strategic Capturing the market share between 3wheeler & pick-up truck
Move

Evaluation of Marketing Strategy

Goal
Consistency
Test

Goal: Capturing the market share between 3-wheeler & pick-up truck and
push up the dying sales
Action 1: Customer-oriented small commercial vehicle (SCV)
Action II: Greater stability, safety & comfort
Action III: Lower operating costs
Action IV: Entry in semi-urban & rural markets (esp. Southern India where
70% of 3-wheeler happens in India)

Frame Test

Frames: A. Market Share B. Revenue C. After Sales Service D. Utility

Frame A: Achieved by targeting semi-urban & rural markets more
Frame B: Achieved by identifying the need gap & launching with right
message (baby elephant). Market leader in mini-truck category
Frame C: Tying up with local garages, training, mobile service vans
Frame D: last mile vehicle, efficient load/lead ability, innovation>> TATA
Magic

TATA Ace Launch Strategy - Gaps

Launch was primarily in Southern India (Tamil Nadu,

Kerala, Karnataka, Andhra Pradesh and Maharashtra)

market giving a huge area for the competition to cover in
other states and urban areas
If at all they want to capture rural market then,
Selection of target audience is week The vehicle should have
been sold for commercial use than personal use (like to logistics
firms)
Volumes will be less though
Possible cannibalization of TATA 207 DI

RECOMMENDATIONS
Customization for customers
Segment the buyer base and customize the vehicle for them eg.
tippers, long base trawlers, milk carriers
Tackle competition
Mahindras Maxximo grabs 24% share in west & north over just 2
months Business Standard
Make region-wise plans for sales & after sales services

RECOMMENDATIONS
Spreading wings in foreign markets like Bangladesh,

Bhutan, Sri Lanka etc.

Should have launched Tata Ace with customizable option

of adding/removing seats according to customer

requirements (they did this with Tata Magic in 2007 and
lost sales for 2 years)

THANKS