Rural marketing strategyCategory: Light commercial vehicle

Presented By:- Group5

MARKET POSITION

India’s position in Light commercial vehicle production – 19th.

Light commercial vehicle contribution to Indian GDP- .5% where as in USA it is 2%

India's light vehicle forecast for 2011 is just under 3 million vehicles.

1.67 million vehicle used by the rural people.

Problem:- 60 per cent of the India’s population are rural people who, generate only 25 per cent of the country's GDP means that their purchasing power is low.

COMPETITORS

INDUSTRIES MARKET SHARE

TATA MOTORS 58.9

ASHOK LEYLAND

EICHER MOTORS

.5

2.2

MAHINDRA 24.9

PIAGGIO & OTHERS 13.5

Who is the customer?

country. price-sensitive customer

return-on-investment customer

balance customer

performance customer

acquisition-price-sensitive customer, who is looking only at price, not performancereturn-on-investment customer, who is willing to pay a price for better valuebalance customer, who weighs both price and performanceperformance customer, who is willing to pay a higher price for it.semi-urban and rural areas, who fell into the two bottom layers of the pyramid, which cover 85 per cent of the market.

What does (s)he want?

five essential attributes they look for in a small commercial vehicle are:- lower operating costs (as compared to a three-wheeler)reliabilitydurabilitysafety and comfortmost important of all – a viable business proposition.

"Commercial vehicles are actually a business investment. If a customer is not able to earn the money to be able to pay back the acquisition price and earn some profit, (s)he is not going to buy the vehicle.

LCV Initiatives

The Industries realised that the entry level for the semi-urban and rural market was a product between a three-wheeler and a pick-up truck, at a price-sensitive level.

loads up to 1.5 tonnes over distances up to 300km

four-wheeler at a price slightly higher than a three-wheeler, but offering greater stability, safety and comfort.

More important, the operating cost was extended to a product lifecycle cost, which covered purchase cost, operating cost and resale price.

"It has the lowest product lifecycle cost; that is USP of LCV.

MAIN INFUENCERS

Shopkeepers, Distributor.

Large and medium farmers.

People who own more than one vehicle- out of experience of use- Opinion leaders.

Educated Youth-Less in number-more influential than others.

BRANDING/ADVERTISING FOR LCV

Not much visibility inside the villages/ bazarHeard about it on Radio/television/newspaper.Strong word of mouth- through influencers.Wall painting.Display vans.

TATA ACE road show Mahindra Pickup road show

CONT……

The communication for the Ace was 'All the goodness of the Tata Truck now in a mini size' – thereby the descriptor of the category as a mini-truck.

Example:- Mani relates the case of a person who wanted to set up a paan-bidi shop. When he saw the Ace, he bought the vehicle instead. "With approximately the same investment, he now gets bigger returns and more prestige,"

Finessing the finance

five-year financing for the vehicle (three-wheelers get only two/three-year financing), so that customers pay a monthly instalment approximately the same as that for a three-wheeler.

"The instalment payment has gone down and income has increased, boosting net earnings. The customer is happy and the sales have jumped

Expansion Plan

As markets continue to move towards semi-urban and rural areas, TATA motors company is extending its reach through a unique concept called 1S outlets, that handle only sales. At over 300 such outlets across India, customers can see and buy the product within 50 to 100km of their village.

Apart from its dealers, the LCV industries has tied up with local garages for servicing, and enhanced their service skills through training. A mobile service van supplements their reach.

Thank you!