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Q1) Discuss the challenges in designing marketing mix strategies for a small sized car priced at
Rs.1 Lac for the Indian market.

Ans:- In May 2006, Tata Motors, India¶s largest automobile company, announced its first plant
to manufacture a small car costing approximately Rs.1 lakh, causing uproar in the Indian
automobile industry. Rattan Tata said that the car would create a new paradigm in low-cost
personal transport, carve out a new market segment and reach the broader base of the pyramid.
Objectives:
y The Indian automobile industry
y Tata Motors and its various products
y Possibilities for a Rs. One lakh car in India
y Various challenges such a car would face in the Indian market
y Opportunities available for the car in India and makets abroad
y Technologies and components going into car makin

Marketing mix strategies:-


Marketing strategy is a method of focusing an organization's energies and resources on a course
of action which can lead to increased sales and dominance of a targeted market niche. A
marketing strategy combines product development, promotion, distribution, pricing, relationship
management and other elements; identifies the firm's marketing goals, and explains how they will
be achieved, ideally within a stated timeframe. Marketing strategy determines the choice of target
market segments, positioning, marketing mix, and allocation of resources.
Basic steps in marketing strategy are as follows:-
y Market Segmentation:-
1. Identification of customers¶ needs and market segments.
2. Develop profiles of resulting market segments.
y Identification of target markets:-
3. evaluation of attractivity of each segment.
4. selection of target segments.
y Positioning:-
5.identification of differential advantages in each segment.
6. development and selection of positioning concept.
y Marketing planning:-
7. development of a marketing mix for each segment according to the chosen position.
Marketing Mix is the mixture of controllable marketing variablesthat the organization uses to
pursue the sought level of sales in the target market.
Marketing Mix Variables ± 4 P¶s
o Product
o Price
o Place
o Promotion
Product: The product is of course very important and the success of the business will depend
largely on how good or bad it is. The decision as to the nature of the product also has to depend
on its customer base as also their buying habits, geographical locations, purchasing power and
other factors. Sometimes a business may want to come out with the best there is, and sometimes
the same business might market a product that is for the budget customer. An example is Tata
Motors that owns the Jaguar (which is a premium brand) and also the Nano (which is the
cheapest automobile in the world).
Price: It is the amount a prospect is willing to pay for the product. There is always the right price
for a product - if it is priced higher than this then it might not sell, and if it is priced lower than
that then the business might be missing out on revenues. But there are many issues based on
which a company determines the price and that is not limited just to the cost of manufacturing it.
These other factors include the perceived value of the product in the customer's mind, the market
share of the business, competition and even local tax regulations and distribution and logistic
costs. Then there are issues such as seasonal fluctuations that also need to be considered.
Place: The question where the product is offered is answered here. What are its distribution
channels, how and at what price does the business warehouse the items, what are the costs of
order processing and how will it be done... these are just a few questions that need to be
answered.
Promotion: Promotion includes advertising and marketing - the effort to take a product from the
business to the customer. Managing the sales force (for a traditional business) also belongs to
this. What promotion strategy is best for a business will however not be the same. It will vary
depending on the product itself, the market, the customer and also the budget the company has.

market segmentation
we can say that market segmentation is the segmentation of markets into homogenous groups of
customers, each of them reacting differently to promotion, communication, pricing and other
variables of the marketing mix. Market segments should be formed in that way that difference
between buyers within each segment is as small as possible. Thus, every segment can be
addressed with an individually targeted marketing mix.
The importance of market segmentation results from the fact that the buyers of a product or a
service are no homogenous group. Actually, every buyer has individual needs, preferences,
resources and behaviors. Since it is virtually impossible to cater for every customer¶s individual
characteristics, marketers group customers to market segments by variables they have in
common. These common characteristics allow developing a standardized marketing mix for all
customers in this segment. Through segmentation, the marketer can look at the differences
among the customer groups and decide on appropriate strategies/offers for each group.

O   OF FF  


 O O
Market segmentation is resorted to for achieving certain practical purpose. For example, it has to
be useful in developing and implementing effective and practical marketing programmes. For
this to happen, the segments arrived at must meet certain criteria such:-
a. entifiable: The differentiating attributes of the segments must be measurable so that they can
be identified.
b.O essible: The segments must be reachable through communication and distribution
channels.
.izeable : The segments should be sufficiently large to justify the resources required to target
them. A very small segment may not serve commercial exploitation.
.Profitable: - There is no use in locating segments that are sizeable but not profitable.
e.nique nee s : To justify separate offerings, the segments must respond differently to the
different marketing mixes.
f.Durable : The segments should be relatively stable to minimize the cost of frequent changes.
g.
easurable : The potential of the segments as well as the effect of a specific marketing mix
on them should be measurable.
h. ompatible: - Segments must be compatible with firm¶s resources and capabilities.

OO  FO
O 
 O O
Segmentation is the basis for developing targeted and effective marketing plans. Furthermore,
analysis of market segments enables decisions about intensity of marketing activities in
particular segments.

A segment-orientated marketing approach generally offers a range of advantages for


both, businesses and customers.

Facilitates proper choice of target marketing:-


Segmentation helps the marketers to distinguish one customer group from another
within a given market and thereby enables him to decide which segment should
form his target market.

y Target market:-
1. the low cost car is clearly intended for the masses.
2. for the family of four that wpuld otherwise ride on a scooter,
3. it also attracts the small cars buyers like Maruti800, bike riders etc.

y Social impact of the TATA NANO:-


living standard up gradation
increase safety
1 million cars per year
Traffic congestion
Parking problem
Price hike in real estate

y Challenges to tata nano:-


Political issues in gujrat
Fuel price hikes is the most important challenge for nano.
Increase in material cost like steel and tires.

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