marketing strategy of TATA motors - page 6
Keywords: marketing strategy
By finil on 15/05/2009
Level: Master's degree (MA, MBA, MSc, MEng, MRes, MPhil etc)
Page Number: 6 of 10 pages: 1 2 3 4 5 6 7 8 9 10Sit Back, Relax, and Get Paid for What You Think!
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company’s success on this market.
Key success factors
In terms of the overall successful performance of the Tata Motors , the analysis of environmental and internal factors study identified the following integral elements:
Fast entry on UK market;
Implementation of strategies designed to protect company’s share on Indian market;
Defensive measures on Indian market
To protect its market share against the aggressive expansion of competitors the company needs to implement defensive strategy. According to Veloso & Kumar (2002) one of the strongest available tools is the increase of the customer loyalty by offering value-added benefits such as affordable price, attractive credit conditions, post-purchase service. Veloso & Kumar (2002) note that car maintenance might account for up 70% of the overall car’s lifetime value. The company should develop its service centres network to maximise its geographical coverage and pre-empt the entry of competitors.
Marketing strategy
Market entry choice
To maximize the speed of entry and minimize the risk of failure, Tata Motors should choose the entry mode which provides the fast access to customers. At the same time, the entry mode shall secure certain long-term benefits like access to market knowledge and the development of firm’s presence on the new market. Given these requirements contractual joint venture was chosen as the optimal entry mode. Unlike, wholly owned subsidiary it requires much less investment in operational launch (Hill, 2002). Additionally, this mode of operations provides a fast access to the facilities and customer of contractual partner. The other advantage of this mode of market entry is that it limits the possibility of technology or knowledge transfer.
Table 1 – Advantages and disadvantages of Contractual Joint Venture mode
Contractual Joint Venture
Advantages
Disadvantages
Medium level of investment
Reduced managerial control over partner’s operational areas
The control of knowledge and technology transfer
Potential conflicts about profit distribution and areas of operation
Shared level of market risk
At the same time, this mode of expansion limits the capacity of Tata Motors to control the areas of operation which are covered by the partner. Besides, various conflicts might arise due to different strategic vision, different organizational cultures or perceived disparity of profit share.
Marketing mix
Product
Product advantage is the “outcome of the new product development process comprising the degree of unique benefits not previously available, the extent to which customer needs are better satisfied, the product's relative quality and innovativeness, and the extent to which the new product solves customer problems better” (Craig & Hart, 1992).
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