Tata Motors shifts focus from value seekers to status seekers
The newly launched Tigor marks a turning point in customer strategy
As per the official data of the company in March 2017, Tata Motors passenger vehicles recorded sales at 15,433 nos. in the domestic market, a growth of 84%, over March 2016, primarily driven by continued strong demand for the Tiago. The company has also received an encouraging response for its recently launched lifestyle utility vehicle - the Hexa.
The company’s sales from exports was at 5836 nos. in March 2017, a decline of 8% compared to 6356 vehicles sold in March 2016. The cumulative sales from exports for the fiscal was at 64,199 nos., higher by 11%, over 58,035 nos., sold last year.
Mayank Pareek, President, Passenger Vehicles Business Unit, Tata Motors commented on the growth of the company: “The year 2017 is the year of transformation for us, the overall industry is growing at 9%, while Tata Motors is growing at 17%.” He also commented on the Tiago success: “Tiago has received 80,000 bookings, and currently there are more than 50,000 Tiago cars on the Indian roads.”
PRICING STRATEGY & COMPETITION
To make a mark in the passenger car segment, Tata Motors has recently launched its must awaited stylish car Tigor. With aggressive pricing starting at `4.7 lakh (ex-showroom, Delhi), Tata Motors hopes to attract buyers of both compact cars and sedans with the Tigor and have a bigger play in the 80,000-100,000 units per month compact car (hatchbacks and compact sedans) market.
“The Tigor creates a segment of its own as it’s not a typical 3-box sedan with a boot added to the hatch,” said Guenter Butschek, MD & CEO of Tata Motors, on the sidelines of the Tigor’s launch.
He conceded that Tata Motors has ‘learnt its pricing lessons’ and has priced its new-generation models - Bolt, Hexa and now the Tigor - attractively. Tata Motors has built a strong pipeline of new products, which come with the IMPACT design language and leading technologies to make the new product line-up an exciting proposition.
The base variant of the Tigor is priced at `4.7 lakh (ex-showroom, Delhi), `65,000 less than the Dzire available at `5.35 lakh. But a closer look at the pricing strategy adopted by Tata Motors shows that the base variant is priced chiefly to attract buyers. In the case of Tigor, the pricing gap between the base variant and the next variant is unusually wider - `71,000. When compared to other models the gap remains the biggest in the segment, next only to VW Ameo. The relevant figures for other similar cars are `47,000 for Honda Amaze, `50,000 for Ford Figo and `63,500 for Maruti Dzire.
This pricing differential is important because most buyers (about 70%) chose the middle or top-end variant after evaluating the variety of features on offer, even as the advertised price of the base variant plays an important role in luring buyers. Higher-end variants typically add on creature comforts like rear air conditioning, charging pods, touch screen, cruise control and safety features like airbags and ABS.
SOCIALLY ACTIVE CUSTOMERS
Tata Motors got good response form the engagement marketing for HEXA and company is promoting same for the Tigor. Indian customer thinks a lot before buying the vehicle - they look at technology, design, price, comfort and features. The target customer for Tigor is one who is already settled in the life, owns a car and want to upgrade it. It is for the customers who wants a stylish car to make a statement in society.
Mayank Pareek spoke on the upgrade dilemma among customers in choosing between a large hatch and a small sedan. “The large hatch has got contemporary design features but practicality due to the limited space available in the Indian roads, and the customer faces parking problems. On the other side, small hatch comes with good functional space but they lack style. So Tigor fits the best as it comes with fully loaded
features and it also solves the space problem.”
CUSTOMER EXPERIENCE & SUV LAUNCH PLANS
Tata Motors doesn’t have plans to appoint the exclusive dealerships for its perineum cars like its competitor Maruti Suzuki NEXA, there will be one type of dealership for all the Tata car models.
It has appointed 6000 sales consultants to cater its new generation products like Tiago, Hexa and now the Tigor, across 650 sales outlets in India.
Vivek Srivatsa, head of marketing for passenger cars at Tata Motors spoke on the customer experience: “We are providing premium feel to the customers visiting our showrooms. We are also providing training to our sales consultants for our new range of cars.” The company has hinted plans to launch SUV Nexon in the coming months, to further strengthen its grip in the passenger car segment.
Guenter Butschek emphasizes that Tigor is not a typical 3-box sedan with a boot added to the hatch
Mayank Pareek advocates Tigor to solve the upgrade dilemma among the socially active customers
Vivek Srivatsa emphasizes providing a premium feel to the customers visiting Tata Motors showrooms