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Tata Motors Capture Increase Market Share In India Marketing Essay

1816 words (7 pages) Essay in Marketing

5/12/16 Marketing Reference this

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The acquisition of the two global brands- Jaguar and Land Rover acts in a crucial way to increase and develop the brand reputation and the quality of products for Tata Motors. It provides plenty of opportunity to the Indian consumer and the developing Indian automobile market can also help the launch of brands in the long-term. It can reap economies of scale through component sourcing and low cost engineering.

Weakness:

With different product portfolios for both brands it will be a challenging task ahead to market the same in the price sensitive Indian market. But this could be overcome through proper market research. Another concern is the diminishing image due to the continued losses and a de motivated work force due to the change in management. With right training and incentives and proper marketing strategies the company can convert these negatives to strengths.

Opportunities:

This launch is a great opportunity for the Indian customer and target the growing Indian market. Automobile market is developing in India and placed with launch of Nano, Tata Motors will be in a good position capture a larger share of the market.

Threats:

Increasing fuel prices combined with global meltdown will be a challenge for the company to stay afloat and over come the losses. In addition the strong competition can threaten the expected sales of the company. However the inherent financial and managerial strength of the conglomerate should be able to let the company withstand the challenges and move ahead. A danger that remains is that with the new ownership international brand loyalties may change and customers may move towards other models in the market.

Ansoff Matrix:

The Ansoff Matrix is an analytical tool that helps managers to devise their product and market growth strategies. It consists of four growth strategies namely- Market penetration, Market Development under new and existing and markets AND Product development, Diversification under new and existing products. [2] 

Ansoff Matrix-

Existing product

New product

Existing market

Market penetration

This strategy mainly applies for those businesses that focus on selling existing products in the existing markets. It is a low- risk strategy and helps to increase the market share of its’ current products. [3] 

Product development

This strategy involves businesses aiming to sell new products in existing markets. This strategy is also a reason for acquiring another company as the costs of starting another company can be saved and different types of customers can be catered. This strategy is also useful for businesses using brand expansion strategies. [4] 

New market

Market Development

This method serves for those businesses that apply the strategy of selling existing products into newer markets. [5] Such techniques are used by businesses that plan to expand their business and attain higher customer base.

Diversification

It refers to the high risk growth strategy that involves a business marketing new products in new markets. Parent companies can benefit from having a presence in a range of products and markets in different regions of the world. [6] 

Market Penetration-

Tata could continue with the same strategy that it had adopted for the UK for the rest of world. The estate, coupe and open saloon models of Jaguar and the Freelander and Range Rover sport of Land Rover selling in the existing markets UK can help them to gain profits and increase in sales in other markets due to the reputation of the brands.

For the new models that are planned to launch, promoting and advertising can be a good choice for the firms to maintain their position in the market and to attract more consumers and build customer loyalty. Tata Indica and other commercial vehicles like Tata Ace are examples of Tata’s market penetration strategy that exist in the existing markets and are still earning them great profits.

Market Development

Tata Motors have applied this strategy to this launch plan as they are already beginning to sell the most famous and highly appreciated products of both the brands such as the XF, XK and XJ models of Jaguar and Defender, Discovery, Range Rover Sport and Range Rover models of Land Rover in the Indian market that is completely new for both the firms. Also, while the other long and short-term plans are being strategized, these products can help the firm to have a great introduction to the market and the reviews can help the business in planning for their future types of products. Establishing popularity and brand loyalty with successful products can be a good option for the firm to begin with in India.

Product Development-

Tata Motors are launching the smallest car the famed Tata Nano in the Indian markets which is a new product by the firm and launched in existing markets of India and other countries where Tata Motors operate. This car can be useful for the firm as they can easily generate profits through this product as well as their brand name. Also, the firm can compete with other businesses in the same market with the help of these products. Tata Starbus and Tata Xover are other new products that have been launched by Tata Motors in India and other existing markets of Tata Motors.

Diversification-

The new products planned by Tata Motors through the Jaguar and Land Rover brands can be categorized in diversification. The company plans of manufacturing hybrid, electric and bio-fuels based and environmental friendly cars with the help of latest technology through both of these brands which can be useful in boosting the brand image of the firm. Also, there may be an increase in the profits of the firm as the hybrid cars are said to be the future of automobiles in order to save the earth from pollution. These new products launched in the new markets of India and others can be termed as diversified strategy of the firm. Tata Nano can also be included in this strategy as it is also a new product and is planned to be launched into new markets of African and Asian countries.

Asset led marketing:

Asset led marketing is a strategy that is adopted by the business for the sales of their products or services. Here, the firm uses its intangible assets for introducing a new product in the market. Tata Motors is a well-established and well-known firm and a part of the parent company Tata and Sons. Thus, in order to launch its products or services in the market and start off with immediate sales and profits, Tatas can use this which may even be applicable for launching the two automobile brands. Tata Motors have been in the news for past several months due to the launch of the world’s cheapest car in India- Tata Nano manufactured by their own company. Simultaneously launching two brands can help Tatas in gaining a lot of customer attention and thus a larger customer base. The well established and elegant brands with the giant prestige of Tata Motors can help the firms in garnering huge amounts of profits and gaining control over their competitors.

Evaluation :

The biggest advantage of this acquisition is that the firm might see an increase in sales of the cars due to both firms’ worldwide luxury brand reputation and also due to the services and quality provided by the cars.

But at the same time, the number of competitors in the booming automobile market of India has increased and finding their way out to satisfy the customers with different marketing strategies can be very costly for the firm.

Tata Motors can implement various strategies such as advertising and also, various schemes can be used which guarantee consumer satisfaction and can also prove to be a part of customer attraction. These strategies can prove to be useful in boosting the brand image and the sales of the company as well.

Short- term problems faced by the firm may be the recovering of the costs that has been put into the acquisition and the launch of Jaguar and Land Rover cars. The high manufacturing costs of Tata Motors, Jaguar and Land Rover might prove to be another reason for the losses in the accounts of the Tata Motors. The long-term problems can be an increase in competition as the Indian automobile market is developing at a rapid rate. If the company suffers losses, then there might be the need for job redundancies, thus leading to worker de-motivation.

Conclusion:

To conclude, the acquisition of Jaguar and Land Rover brands may be risky due to the global slowdown but Tata Motors with its brand name and established presence in India can succeed in the long run.

Tata Group, a huge multinational giant worldwide can capitalize through cross-subsidization. I think that by promoting the products and launching it along with Tata Nano will be useful as each can be a backup for the other in the future. The workforce can be motivated through good learning experience as they may have access to the technology used in manufacturing these premium cars but at the same time, if the products fail to create a mark on customers, the workers may feel insecure as job redundancies may be adopted by Tata Motors to struggle with their own financial portfolio.

Bibliography-

http://uk.reuters.com/article/idUKTRE55R0LK20090628?pageNumber=2&virtualBrandChannel=0

http://www.autoblogs.in/2009/06/tata-jaguar-land-rover-launch-india.html

http://free-sms-mms.blogspot.com/2009/06/tata-jaguar-land-rover-launched-in.html

http://www.zeenews.com/news542730.html

http://sify.com/finance/fullstory.php?id=14790692

http://www.businessworld.in/index.php/In-The-News/Rough-Roads-Ahead.html

http://business.outlookindia.com/inner.aspx?articleid=1225&subcatgid=611&editionid=36&catgid=44

http://www.tata.in/media/reports/inside.aspx?artid=r8CuZiHSZ2o=

http://money.rediff.com/companies/tata-motors-ltd/10510008/profit-and-loss

http://www.moneycontrol.com/financials/tatamotors/profit-loss/TM03

http://www.moneycontrol.com/financials/tatamotors/balance-sheet/TM03

http://www.moneycontrol.com/financials/tatamotors/ratios/TM03

http://en.wikipedia.org/wiki/Tata_Motors

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