Escolar Documentos
Profissional Documentos
Cultura Documentos
SUBMITTED TO
V.K.AGRAWAL SIR
AFFILIATED TO
GUJARAT TECHNOLOGICAL UNIVERSITY, AHMEDABAD
SUBMITTED BY
VINOD PRAJAPATI
EN No: 47
MBA (semester-I) PIET
PARUL INSTITUTE OF ENGINEERING & TECHONOLOGY
TABLE OF CONTENTS
1. Objectives
2. Indian Automobile market history
3. Segmentation & Profile
4. New product development
5. New Product: Success or failure
6. Problem of measuring success of new product
7. Measuring success for automobiles...
8. Buying Behavior
9. Conclusion
Objectives
Critical factors responsible for the success of new product in Indian automobile
industry.
Indian Automobile Industry
Destination India
India is on every major global automobile players roadmap, and it isnt hard to see why:
Robust production
Indias car production capacity is in for a US$ 2 billion boost. Auto majors have
announced massive investment plans which will push the countrys car production past
the psychological 2 million mark by the end of fiscal 2006-07, up 70 per cent from 1.4
million units now. Even at 2 million, India, which stood at No.11 among global car
producing nations, will move two steps ahead, past UK (1.6 million) and Canada (1.35
million). It will be neck and neck with Brazils 2-million capacity at No.8.
The automobile industry witnessed a growth of 19.35 percent in April-July 2006 when
compared to April-July 2005, as is evident from this years production trends.
Automobile Production Trends
Category
2004-05
M&HCVs
214807
219297
LCVs
138896
171781
Total CVs
353703
391078
Passenger Cars
960487
1045881
Utility Vehicles
182018
196371
MPVs
67371
66661
1209876
1308913
Scooters
987498
1020013
Motorcycles
5193894
6201214
Mopeds
348437
379574
6529829
7600801
Three Wheelers
374445
434424
Grand Total
8467853
9735216
acre
manufacturing
plant
in
Maramalai
Nagar
near
Chennai.
A project that has been set up with a investment of Rs.1700 crore. Ford India Limited is a
subsidiary of Ford Motor Company, currently Ford has a 78% stake, which is going up to
92% soon.The Maraimalai Nagar Plant of Ford India Limited, located roughly
45k.m.from Chennai, provides employment to over 20000 people. The plant has the
capacity to manufacture 1,00,000 vehicles per annum, equipped with state-of-the-art
vehicle
manufacturing
technology
from
Ford.
Presently offering seven different models, Ford India Limited (FIL) is catching up fast
with the Indian consumer. Looks like FIL is all set to conquer the Indian market like rest
of the world
Tata Motors
Tata Motors Limited is India's largest automobile company, with revenues of Rs. 24,000
corers (USD 5.5 billion) in 2005-06. It is the leader by far in commercial vehicles in
each segment, and the second largest in the passenger vehicles market with winning
products in the compact, midsize car and utility vehicle segments. The company is the
world's fifth largest medium and heavy commercial vehicle manufacturer.
Tata Motors, the first company from India's engineering sector to be listed in the New
York Stock Exchange (September 2004), has also emerged as a global automotive
company. In 2004, it acquired the Daewoo Commercial Vehicles Company, Korea's
second largest truck maker. The rechristened Tata Daewoo Commercial Vehicles
Company has already begun to launch new products.
Toyota Kirloskar
As a joint venture between Kirloskar Group and Toyota Motor Corporation, Toyota
Kirloskar Motor Private Limited (TKM) aims to play a major role in the development of
the automotive industry and the creation of employment opportunities, not only through
its
dealer
network,
but
also
through
ancillary
industries.
TKM's growth since inception can be attributed to one simple, yet important aspect of its
business philosophy - "Putting Customer First". While managing growth, TKM has
maintained its commitment to provide quality products at a reasonable price and has
made
every
effort
to
meet
changes
in
customer
needs.
TKM firmly believes that the success of this venture depends on providing high quality
products and services to all valued customers through the efforts of its team members.
TKM, along with its dedicated dealers and suppliers, has adopted the "Growing Together"
philosophy of its parent company TMC to create long-term business growth. In this way,
TKM aims to further contribute to progress in the Indian automotive industry, realize
greater employment opportunities for local citizens, improve the quality of life of the
team members and promote robust economic activity in India.
New Product Development
Identifying and developing a new product is always a messy, experimental process. For
many companies this process is more difficult and less successful than necessary. The
process of introducing new products is as risky as it is vital to the long-term success of
companies. The number of new products introduced globally is increasing every year, but
most of them fail. Revolutionary new products often come from upstart players or
companies outside the industry whose vision is not limited by a focus on the current
Business and markets. To remain successful innovators, business managers must
continually review their
Companies' to meet the three conditions for effective innovation:
Closeness to customers Managers must know their customers and understand their
Needs and requirements well,
Multifunctional teamwork Successful product innovations are almost invariably
The result of people in the company working together in teams rather than independently,
And,
Cross-functional communications Innovations in most companies refer to the
Information flow between the key functions.
New Product: Success or Failure
The experiences of a large number of enterprises show that the failure in product
development, particularly related to the products representing the basis for the creation of
a whole range of other, so-called product platforms, originates from the phase of the
product concept definition. The risk is more pronounced in the cases of developing the
products that should create the needs of consumers. In such circumstances, when
completely new products of high risk are created, technological and marketing
uncertainties have to be studied in order to reduce or eliminate the risk of their
implementation. The enterprises that are successful in this field are characterized by the
management through projects, which enables successful management of each individual
project and a network of projects within the enterprise, of interactions and relations
among different projects and of the relationships with the environment . The surveys of
the practices of successful companies suggest that adequate approaches (methods and
techniques) in the product creation and development should be selected in the conditions
of abrupt technology and market changes. Different approaches may be applied.
usage and attitude studies that examine consumer usage and attitude about
products, advertising, brand awareness, and brand image at a given point in time
trial and repeat purchase tracking studies that record weekly purchases of similar
products by target consumers, as well as the reasons for buying or not buying the
products (this type of study is sometimes called a diary panel)
advertising awareness and recall studies that examine the efficacy of print and
electronic advertising on target buyers, often conducted by the Burke, Starch, or
AC Nielsen market research companies
Talk to buyers and consumers about product satisfaction and purchases. From a
marketing research standpoint, this is biased, qualitative research without standard
interview controls. But it is timely information and may be actionable. And it
places you at point-of-purchase, close to your buyers (e.g., retailers) and end
users.
Examine weekly company sales receipts for new account sales, compared to
receipts for reorders. This is an indirect, but free, way to measure initial purchase
vs. reorder sales.
There are no reconciled opinions in the literature on new product success measures.
The three most important aspects to be measured are:
Financial performance
Market impact
Development of a new product in case of automobiles is a very difficult job. For different
markets different conditions have to be taken into account . Its important to look at the
business from the customers and markets perspective. People are buying from you. The
more you understand your customers needs and wants the more you can satisfy them.
And the more you understand how they buy that is, their buying decision process
the greater the likelihood your sales and marketing efforts will be successful. The
measure of success for an automobile is very difficult. Different organizations define it in
their own way. Time horizon has big say in measuring of the new product success. The
time over which you want to evaluate your product success changes the the volume or
amount you are expecting. But overall success for an organization should fulfill these
objectives:
. Due to exhaustive nature of the industry, the study has been confined to cars only. The
project deals with measuring success of new product launch for cars launched in the past
four years. Further, short listing of some car models have been done to make the study
more specific and effective. Few models from varying segments and different
manufacturers have been short listed .These have been introduced in the past few years
and are new to the industry .
Few models that have been shortlisted are :
Toyota Innova
Tata Indigo
Ford Fiesta
FORD FIESTA
The Ford Fiesta has quickly climbed up the market share ladder. Within a year of its
launch, the car has become the second largest selling family sedan in the Indian market.
Ford Fiesta enjoys a market share of about 18 % in its segment. Of course, the more
popular (by a big margin) of the two models petrol and diesel is the latter, and for
obvious reasons. The Fiesta 1.4 TDCi, with its advanced, `fuel-frugal' common rail
injection diesel technology engine and its diesel fuel advantage is clearly the first choice
amongst fuel-efficiency conscious sedan buyers.
Tata Indigo
Tata Engineering signaled its impending entry into the mid-size segment with the naming
of the indigenously developed Tata Indigo, Indias first sedan. The car derives its name
from the words India and go, as it symbolizes a nation on the move and is aimed at
Indians on the go wanting to make a purposeful statement.
Tata Indigo is targeted at people who exude energy, enthusiasm, ambition and the desire
to succeed and are raring to go, undaunted by new challenges. Powered by a 85 bhp
petrol and a 62 bhp turbo-diesel engine, the car will be launched with 14-inch wheels and
a first-in-class independent three link and strut type rear suspension with anti-roll bar
seen only in more premium segment cars. It has 500 litres of trunk space and 42 litres of
fuel tank capacity, more than adequate for long outstation drives with the family.
Currently it enjoys a market share of around 17 % in its segment.
Toyota Innova
Showing the way forward in though and execution as also a new way of motoring life is
Toyota with the classy and powerful Innova, heralding a whole new category. The look is
all new and refreshingly curvy and pleasing where the boxy Qualis looked like a
weightlifter on skinny legs. Toyota has probably the best diesel engine in its class on
offer, period. Toyota's famous D4D common rail diesel engine is a proven performer,
having excelled not only in various pick-ups and SUVs in Asia but also in certain saloons
in Europe. This engine has capacity - 2494cc - to
begin with, has a strong dohc 16-valve
top end force fed by a turbocharger and the latest generation common rail diesel injection
system to make for not just a punchy and frugal prime mover but also a very refined
powerplant which effortlessly meets the latest Euro III emission norms.It enjoys a market
share of above 40 % in the MUV segment.
needs
exist
across
segments,
including
the
cheaper
small
cars.
The key drivers for the FOUR need segments in India are summarized below:
Utility buyers seek a need for basic transportation and care for family; Value for
money and cost of ownership are the benefits that these buyers associate with.
Prestige buyers are motivated by a need for prestige, indulge self, and exclusivity;
They are least price sensitive and desirous of latest/ futuristic features in cars
Adventure buyers seek fun & adventure and to increase popularity; SUV finds
preference for these buyers who relate to their cars as lover.
Status buyers want to show-off success and attract attention; Superior craftsmanship
and best technology are imagery issues that this group relates to.
Liberation is the smallest of the six need segments these buyers seek increased
freedom and latest technology; safety consciousness is relatively higher among them.
It is apparent from the need segment drivers that a majority of motives are about what a
consumer desires to communicate to the outside world based on the car he/ she uses.
Therefore, it is vital to understand these underlying drivers for consumer behavior and
position brands accordingly instead of solely focusing on rational elements of purchase
such
as
fuel
economy
and
engine
power.
While brands cut across different need segments due to a similar identity, the varying
degrees of fit is determined by its soul or persona. Needs such as adventure and
liberation are more expressive, while status need is more subdued. Similarly, potency
need is about self-assertion and more individual oriented, whereas prestige is more about
affiliation and family oriented.
The two examples below further illustrate the essence of these differences.
Automotive
Penetration
(vehicles
in
use
per
thousand
persons)*
14
12
Japan
395
115
Germany
508
36
China
Indonesia
14
62
South Korea
167
59
India
27
Conclusion
On the basis of the parameters selected it clearly shows that Toyota Innova and Ford
Fiesta have topped the rankings in the satisfaction survey.
More than 72 % of Innova owners say they are willing to repurchase it if provided with
subsequent developments with time. They would (around 60%) convince others to
purchase this car if in the same segment. Also taking other factors that is the market share
and the sales volume of the car it is clearly a success for Toyota
Hence Innova has topped the group with that and the next car that closely follows it is
the Ford Fiesta . Around 63 % of people owning a fiesta say they are willing to
repurchase fiesta if buying a second car or changing the car.
Hence , Fiesta is the runners-up.Also taking sales volume and market share Fiesta is
clearly not lagging behind Innova and is sense of pride for Ford.
Next car is the Tata Indigo which has a higher satisfaction score than swift but is more in
Taxi segment and had an good sales volume initially but with introduction of Fiesta sales
volume has gone down. .
In the automobile industry which is a high involvement product there are large no. of
parameters while purchasing an automobile. Different people have different needs and
they choose the product accordingly. In a car there are large number of factors such as
mileage, engine power and performance, interiors, mechanical components, handling ,
braking etc which make an automobile . So all these components have to be equally
effective or according to their weights demanded by the customer to make an automobile
successful. More over the segmentation for the vehicle has to be clearly defined. Even
though segmentation in Indian market is done on the length it should be done on the
customer needs. Different profile or set of profile should be made and segments should be
defined accordingly.