Tata Ace Case

1.) How did Tata Motors segment the market for commercial vehicles ? Which variables were used to segment the market? Remember that while segmenting the entire market has to be segmented.

Answer:-

1.) a.) How did Tata Motors segment the market for commercial vehicles ?

Indian Commercial vehicle market sector includes three and four wheeled vehicles, two wheelers (motor cycles, mopeds and scooters) as well as passenger cars and Sport utility vehicles (SUV's) are also occasionally used for freight transportation .

In addition India, has also certain small portion of the market which includes the non motorized vehicle sector like bullock carts, bicycle rickshaws, horse-drawn carriages and manual pull carts , but this segment is undocumented.

The general commercial vehicle market segmentation in India, can be clear by the following pie chart.

Vehicle type Market

Three wheelers in 2005 14%

Four wheelers in 2005 22%

Non Motorized Market in 2005 45%

Balance Market, M&HCV 19%

Tata Motors , segmented the market , for commercial vehicles

I.)Based on the Functional needs of different customers as,

I.) R&C-Ricks and Carts :-Vehicles transporting loads less than 175kg travelling less than 5 kames.

ii.) S3W, Small Three Wheelers :-Vehicles transporting loads between 175kg to 1000kg travelling between 0 -225 kms.

iii.) L3W, Large Three Wheelers

iv.) PU, Pick up:-Vehicles transporting loads upto 2500kg travelling between 100-200 Kms.

ii.)Each of the functional market segments were further segmented into four Customer groups as,

i.) Peformance Sensitive Customers: Those interested in status ,...