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Background And Overview Of Tata Group

3428 words (14 pages) Essay in Marketing

5/12/16 Marketing Reference this

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Tata Company was established by Jamsetji Nusserwanji Tata in 1868.At first he started trading company which deals with Opium in Mumbai. Then in 1877, he started Express mill a textile industry in Nagpur,it was the largest industrial project of the Tata group. Jamsetji in 1903 opened a Taj Mahal Hotel in Bombay. After his death in 1904, his eldest son Sir Dorab Tata had become the chairman of the Tata Group. In his period, he started group venture of steel production in 1905 and hydroelectric power generation in 1910.In 1934, Nowroji Saklatwala became the head of Tata group due to the death of Dorab Tata. He was called JRD Tata. Under his leadership the group consistently expanded new spheres of businesses. There sectors were Tata Chemicals[1939],Tata Motors and Tata Industries[1945], Voltas[1954], Tata Tea[1963], Tata Consultancy Services [1968] and Titan Industries[1984]. In 1991, Ratan Tata had become the chairman of Tata Group. He is running the business very successfully till today.

Code of Ethics of the company: “Leadership with Trust”

Business Sectors:

Tata group has the business in various sectors such as:

Communication and Technology

Engineering

Materials

Energy

Services

Consumer Products

Chemicals

In this report, we are going to see, how the macro environment has influenced the marketing decision making of TATA Group for the last 12 months?

Marketing Environment:

It is the environment where all the forces and acts within or outside the company which affects the marketing decision of the company. It is Micro or Internal Environment and Macro or External Environment. [Armstrong and Kotler 1999]

Macro Environment:

It is the external factors which affects the activities of the company from outside. It also affects the company’s marketing decisions, goals and performance.

External Factors:

Legislation:

Any business which is started should comply with the rules and regulations implemented by government. The government develop varies policy to safeguard society as a whole .Every marketing activity are controlled by laws and regulations. There are many legal areas of concern to marketers, ranging from data protection and pricing claims, comparative advertising, marketing of unhealthy food and advertising to children. In many countries, governments have passed strong consumerism legislation. The government implemented many rules covering the areas such as competitive behavior, good policy in trade, protecting the environment, maintaining the standard of products, liability of the product and commercial business transactions.

Tata group is following all government rules and regulations in it all sectors of businesses:

The company is registered under Company’s Act .As it is a listed company it is complied with the laws and regulations of “SEBI [Stock Exchange Board Of India]”.Tata Communication is also following the rules and regulations of TRAI [Telecom Regulatory Authority Of India], which is the primary rule implemented to protect and provide quality telecom service to all customers. The company is also following the rules of DoT [Department of Telecommunication].Tata Capital is acting according to the laws of RBI [Reserve Bank of India] and Tata Insurance is under the guidelines of IRDA [Insurance Regulatory and Development Authority] .These rules and regulations are changing every year and the company has to follow each and every rules implemented by the government.

Recently, DoT has changed the rules on purchases of telecom equipment from manufacturers outside the India, dated 3rd December 2009, which affected the activities of all telecom service providers.

Tata telecommunication is one of the big telecom service providers in India, as it has collaboration throughout the world, as it is purchasing the telecom equipments from various countries around the world.

It has faced the difficulty in fulfilling the customer orders and expanding the new infrastructure around India, because of shortage in equipment supply for expansion. Likewise it also affects the revenue of the company for the financial period 2009-2010.

Ethics:

An ethics is the certain standard which is practiced and adopted by the organization to run the business successfully. Ethics are of three types i] Code of Conduct [employee’s ethics] ii] Code of Ethics [corporate or organization ethics] iii] Code of practice [professional ethics]

Tata group is following 5 cores of values and 25 code of practice in its business. Tata group always relay on values. They believed that their values led their business successful. Their core of values is

Integrity: The Company runs the business legally, honestly & transparency. Every activity must stand the public interest.

Responsibilities: The Company must be responsible to the nation, society and surroundings it works. It always ensures that “what comes from the public must go back to the public”.

Understanding: The Company should be helpful and humanity to all the people, show respect to the public, employees and countries.

Unity: The Company must work united with its employees, customers and partners across the world, build mutual relationship by focusing tolerance, mutual cooperation and understanding.

Excellence: The Company must work in order to bring high standard of quality in its product. It should improve the standard in day to day work.

Code of practice: Every employee should follow each code of practice during the period of employment with Tata, failure to follow the codes leads to termination of job.

Tata Group strictly believes on their core of values and code of practice, which leads the company very successful in the market till today. Ethical factor helps to improve the standard of work, quality in the product produced, mutual understanding among the company and customer, job satisfaction within the employees, goodwill etc.

Political Factor:

It is also one of the factors of macro environment, which affects the activities of business. It means the political parties which influence on the activities of big organization in order to gain support from the investors or getting more shares from the venture.

Tata group is also influenced by two major political parties such as Congress and BJP in India. These two parties received largest share contribution from Tata Group between 2003 and 2007.The Congress had received the largest shares around $ 860,000 .On the other side, BJP also received more than $540,000 from Tata.

Due to the political support, Ratan Tata was held the position has chair of Investment Commission in 2004 after the Government framed under Congress Party. He was appointed in that position in order to attract Foreign Direct Investment to India.

Tata motors introduced Nano car during election period inorder to support Narendra Modi [Gujarat Chief Minister], who helped them to solve land problems for the car project.

Thus the political parties have lot of influence in the decision making of Tata group. Like, introduction of new projects, locations and fixing of price.

Economic Factor:

It is the factor that affects the consumer buying power and patterns. Economic factor predicts the company’s economic status, profit and loss and growth of the organization. Recently, Tata had faced difficulties in Bombay, Indian financial center was unexpectable. Tata Motors had struggled to raise funds in the capital market, more than thousands employees face lay-offs, factories are being shut down, closed temporarily, top executives are considering taking pay cuts. On the other side, Tata Consultancy Service had shown good volume of growth doubled with improved efficiencies helped them to show good results in economic growth.

Therefore, Tata groups had shown good economic growth in its Telecommunication and Technology sectors compared to Tata Motors in the current year. Though the introduction of Nano car increased the sale rate but due to fire accidents, the sale of the car was reduced it also affects the economic condition of Tata motors now it is rising upwards gradually.

Technological Factor:

Like the other factor, technology and technological change may be both the cause and effect of environmental change. Technology change is also has the effect in production orientation, R&D and marketing orientation.

The mission of Tata Technologies Corporate social Responsibility program is “To make positive impact on the communities in which the company does business through its support of select programs efforts and initiatives that improves and enhance the quality of life”.

The goal of Tata group is “Serving better for planet, better for people, better for business, better for now and better for future”.

Due to the improvement in technology, Tata group has invented many products and service to develop the standard of life. Tata is one of the biggest organizations concentrating more technological development in India. Tata Elexsi Ltd has impact on Engineering services, IT support, Aerospace, Product design service, System integration services and Visual computing labs.

“Technology and imagination” are binding with each other in Tata Motors, to structure vehicles that satisfied the thirst of Indian. Tata group is leader for automobile industry in India. The Tata motors are dotted with innovative ideas, that ideas help the research and development team to introduce new type of vehicles in automobile industry. In 1966, Tata group had established Engineering research Centre, which played a vital position in the innovation of new product and improvement of existing product. Today 2000 engineers and scientists are working together for the development of new products in Tata motors.

Milestones:

In 1998-India’s first indigenous car introduced by Tata-It was less expensive, cope with international standards in terms of distance coverage, safety factors & ride quality etc.

Following the period, the motor industry had developed the Indica platform by introducing new models like V2, X2 and the new Vista series was introduced in 2008. Each model has different in look, performance and features giving their riders world class driving experience. Tata Nano is one of the greatest inventions of Tata Motors due to the advanced technology, with low emission, low cost car with all safety or comfort or reality. It becomes a greater challenge to all competitors.

The new model “Indica EV, the electric Version” will be the Tata Motors next goal to achieve the market in selling. This car will create awareness for global energy crisis. It is created by “European Technical Centre, a subsidiary of Tata Motors”. This new EV series will attract more buyers from Western countries this year. This EV car will have four seats and wide area for luggage, mileage up to 200km and speed range 0-60kmph in 10 secs.

Future Plans of Tata Group:

Based on the analysis of macro environment, it is clearly seen that Tata Motors are going to introduce new models of cars like New Mercedez Benz in October 2010, small cars between Nano and Indica Vista, Mahindra Scorpio with new construction model.

The economic condition of the company will be increased, it creates more demand for the Tata Product in worldwide.

Tata Group is going to start new business sectors around the world.

To focus on Cost leadership strategy.

PART II

Marketing Mix:

Marketing mix is the process of planning, designing, and organizing various elements into the business in order to achieve the marketing goals in the business. The marketing mix is based on 4 P’s in the marketing tactics. In order to achieve the target market, the business should concentrate on the factors such as i] Price ii] Place iii] Promotions and iv] Product. [Mc Carthy,EF 1978]

Target Market Product Place

Price Promotions

While launching the products into the market, the firm needs to create a successful mix of:

The right product

Sold at the right price

In the right place

Using the most suitable promotion [David Needham & Robert Dransfield 1996]

Based on the marketing mix, Tata group is following 4 ‘P’ strategies in its all sectors to achieve target market.

Product: “The Product has to have the right features, it should look good and work well”. It may be thing or services offered to the customer. In turn, the customer will pay to the marketer. The product should satisfy the needs and wants of the customer. Tata group has lot of products, each product as differentiation in its quality, service etc.

Tata Group has various products and services in all sectors of businesses:

Agriculture -Agricultural Tools, Agrochemicals, Resource Centres

Appliances – Air-Conditioners, Water Coolers, Water Purifiers, Water dispensers

Automobiles – Automotive components, Commercial Vehicles ,Passenger Cars

Beverages-Coffee,Tea,Water

Crockery-Ceramics

Charter Flights-Air services

DHT Television-Satellite television

Financial Services–Mutual funds, Credit Cards, Home Loans, Insurance, Other services

Food-Food Additives, Spices

Holiday homes–Vacations

Hotels-Ginger ,Taj Group

Housing-Residential and Housing Buildings

Jewellery-Gold, Platinum and Gemstone Jewellery

Leather-Finished Leather Goods

Retail-Croma , Landmark, StarBazaar,Westside

Solar Appliances-Solar products and systems

Telecommunications-Telecommunications, Telephony

Watches and Clocks-Wristwatches

Price: The price must be right and reasonable to the products and services offered by the organization. Pricing is the important factor in order to market the product to the consumer. Based on the price only, the demand of the product will increase or decrease. It only decides the life of the product in market. If the price is high but the quality and quantity is low, then the product life comes to end in the market.

Tata Groups are focusing more pricing factor. They are the one who offered India’s first cheapest car Indica in 1998 and Nano Car in 2009. Usually, People have faith in Tata Group, there are the one who provide product and service at affordable rates. Tata steels are very cheap and with good quality when compared to all other steels in the market. Tata telecommunications are also offering very low tariff rate, low cost mobile phones etc. Tata home appliances such as Voltas air-conditioner, Freezer, Chest coolers, Mini Coolers and Water Coolers and Dispensers are high in cost but in good in service provided by them

Promotions: It is the activity which involved increasing the sale of the product in the market. There are many of promotional activities such as I] Advertisement II] Telecalling III] Pamphlets, Notices, Brochures IV] Promoting TV programmes V] Public relations VI] Personal Selling.

Advertisement: It is the one of the major promotional activity of the Tata Group. They believe that advertisement is the only way to reach the customers easily. Advertisement is used to promote the Tata Steels, Tata Consumer Products, Tata Appliances, Tata Hotels and Tata Motors.

Promotional Services: Tata telecommunication is offering many promotional services to its customers. They are the one who provided equipments with connection for both mobiles and landlines. They offer very low tariff rates for both local and national calls. They also offer the customers free Sms facility for local Sms. They also introduced many Value Added Services. Using Tata mobiles, people can access internet for free of cost.DTH television is introduced by Tata in India first. These services are offered in low rate, wireless with all local and national channels.

Public Relations: Tata Motors are arranging public relations camp in all areas of city during weekends. These meetings help the consumer to understand the features of the product

through the conversation with the experts, engineers and customer relationship officers.

Place: Place is another important strategy that should be considered while making the marketing decision of the company. The product should be introduced in the place, where there is more demand for it. Once the product comes at finishing stage, the company should decide where the product should be introduced? How it should be reached the consumers?

The two main factors should be considered I] Mode of distribution II] Physical Distribution.

Distribution:

Tata Motors have the distribution in world wide. Tata automobiles have more demand in

Worldwide because of new technology,innovative ideas, price, models and styles etc.

Tata group has expanded their business in all areas around the country. There is no differentiation as rural and urban areas. Tata Telecommunication is running in all rural areas in India. The network coverage area is very wide that attracts more mobile customers to them. Tata retail services are located in the heart of every city in India. Landmark stores in Chennai, Bangalore, Mumbai and Delhi are located in Spencer Plaza and City Center which attracts more young peoples to collect Audio/Video Cd’s, Books, Stationary, Chocolates, Drinks etc in one place.

Competitive Advantages:

According to Michael E Porter [1990], Competitive advantage is one of the factors that decide the economic growth of the company. Competitive advantage has focused on three factors:

Tata Group is focused on these three competitive strategies in its business sectors.

I] Based on Cost Leadership: When the product and services are offered at very low cost in order to achieve more customers in the market. Though there are more competitors in the market but due to cost differentiation people preferred some company products which are available at cheap rate. Markets in cost leadership are achieved not because of cost but also by the quality and quantity of the product when compared with competitors. When the same service offered by more service providers but people will choose the service, which is available at affordable price.

Tata motors are following the Cost Leadership strategies to achieve target market. Tata motor was the first automobile industry to introduce India’s first indigenous car Indica at affordable price. It created the boom in automobile industry in 1998. The success of the Indica leads to the introduction of new model cars like Indica V2, Indigo, Sumo and heavy vehicles such as Tata Ace.

Recently, Tata has introduced Tata Nano car for Rs.1 Lakhs, which become the world’s cheapest car with low emission, spacious and safety measures. This introduction made the Tata Motor to achieve the market again.

II] Based on Focus: When the products and services are introduced by focusing the particular people or targeted market. Then, the company is gaining competitive advantage in the focus sector. It is not strategy used by all business sectors. Mainly the company which is very well in its economic status will go with this strategy. But the focus will change according to the marketing situations.

Tata group has introduced many products in order to attract all the customers. Especially Taj Hotel is one of the biggest luxury hotels in Mumbai which attracts more rich peoples in the country. The facilities and services offered by this hotel made more customers to them. Even foreigners are getting attracted by this hotel. The focus of this type of hotels is to attract more rich peoples, businessman, and high officials.

Even the Tata motor has introduced many luxuries car such as Jaguar, Land Rover, BMW Z4 Roadster and Mercedes in order to attract more rich customers, stylish youngsters etc.

III] Based on Differentiation: When the product has differentiation in its ingredients, taste, flavor and benefits when compared with its competitors. Then the firm is focusing on differentiation advantages in its competitive strategy.

Tata group has lot of products, each product as differentiation in its quality, service etc. Especially, when we look on the consumer products Tata tea which is different from all the tea products in the market. The taste of the tea is different which attracts more consumers in world wide. Tata Tea Bag is selling around the world.

Benefits of consuming Tata Tea:

It gives refreshment and energy

It reduces the risk of heart disease, strokes and cancer.

Thus, the Tata Group has following the different strategy in marketing mix, in order to gain competitive advantage.

Conclusions:

Today the company has become India’s largest and oldest industry. At present the group runs ninety six businesses in six continents around the world. In 2010, it has employed more than 363,039 employees. The total revenue for the year July 2010 is 78.42 billion.

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