A WINTER RESEARCH PROJECT REPORT ON

SEGMENTATION STRATEGY OF TTA

Submitted in partial fulfillment of the requirement for the award of degree

Of MASTERS OF BUSINESS ADMINISTRATION SESSION (2012-2013)

SUBMITTED TO:IFTM UNIVERSITY MORADABAD

SUBMITTED BY:Name: Surendra Singh Class: MBA A College Roll No. 11021197

IFTM UNIVERSITY MORADABAD

ABSTRACT
The present report is prepared for the partial fulfillment of M.B.A. and as a part of curriculum.

This is an attempt to determine and doSEGMENTATION STRATEGY OF TATA NANO To pursue the research area are commercial areas like Moradabad was chosen. Where the survey conducted through Quistionnare & Interview. The data collection is as analyzed and some practical tools were applied to get inferences from the survey. The results are printed in forms of graphs and diagrams. The report has two sections, in its first section company and industry profile is given, where as in second section, research methodology is given which includes sample design, analysis on sample and findings are given. Suggestions with respect to the survey for future improvement is given to improve the survey because there competitors have also taken up the survey. At the end of the report limitations, Conclusion of the research. Last there is Bibliography.

INTRODUCTION
MARKET SEGMENTATION The market for any product is normally made up of several segments. A market after all is the aggregate of consumers of a given product. And, consumer (t the end user), who makes a market, are of varying characteristics and buying behavior. There are different factors contributing for varying mind set of consumers. It is thus natural that many differing segments occur within a market. In order to capture this heterogeneous market for any product, marketers usually divide or disintegrate the market into a number of sub-markets/segments and the process is known as market segmentation.

Thus 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 customers 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. This is precisely why some marketing gurus/experts have described segmentation as a strategy of dividing the markets for conquering them.

MARKETING STRATEGY AND MARKET SEGMENTATION: - When it comes to marketing strategies, most people spontaneously think about the 4P (Product, Price, Place, Promotion) maybe extended by three more Ps for marketing services (People, Processes, Physical Evidence).

Market segmentation and the identification of target markets, however, are an important element of each marketing strategy. They are the basis for determining any particular marketing mix. Basic steps in marketing strategy are as follows:-

Market Segmentation [Link] of customers' needs and market segments. [Link] profiles of resulting market segments.

Identification of Target Markets [Link] of attractivity of each segment. [Link] of target segments.

Positioning 5. Identification of differential advantages in each segment. 6. Development and selection of positioning concepts.

Marketing Planning 7. Development of a marketing mix for each segment according to the chosen position.

ATTRIBUTES OF EFFECTIVE SEGMENTATION

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.

Identifiable: The differentiating attributes of the segments must be measurable so that they can be identified.

b.

Accessible: The segments must be reachable through communication and distribution channels.

c.

Sizeable: The segments should be sufficiently large to justify the resources required to target them. A very small segment may not serve commercial exploitation.

d. e.

Profitable: - There is no use in locating segments that are sizeable but not profitable. Unique needs: 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.

Measurable: The potential of the segments as well as the effect of a specific marketing mix on them should be measurable.

h.

Compatible: - Segments must be compatible with firms resources and capabilities.

REASONS FOR MARKET SEGMENTATION

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.

1. 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.

2. Higher Profits: It is often difficult to increase prices for the whole market. Nevertheless, it is possible to develop premium segments in which customers accept a higher price level. Such segments could be distinguished from the mass market by features like additional services, exclusive points of sale, product variations and the like. A typical segment-based price variation is by region. The generally higher price level in big cities is evidence for this. When differentiating prices by segments, organizations have to take care that there is no chance for cannibalization between high-priced products with high margins and budget offers in different segments. This risk is the higher, the less distinguished the segments are.

3. Facilitates tapping of the market, adapting the offer to the target:-Segmentation also
enables the marketer to crystallize the needs of target buyers. It also helps him to generate an accurate prediction of the likely responses from each segment of the target buyer. Moreover, when buyers are handled after careful segmentation, the responses for each segment will be homogeneous. This in turn, will help the marketer develop marketing offer/programmers that most suited to each groups. He can achieve specialization that is required in product, distribution, promotion and pricing for matching the particular customer group and develop offers and appeals for the segmented group.

Example of Ford: - Ford has gained useful insights through segmentation and adapted its offer to suit the Indian target market. For the Indian segment Ford made some changes in its cars in comparison to their European version. Modifications such as: a. Higher ground clearance to make the car compatible to the rougher road surface in India. b. Stiffer rear springs to enable negotiating the ubiquitous potholes on c. Changes in cooling requirement, with greater airflow to the rear. d. Higher resistance to dust. e. Compatibility of engine with the quality of fuel available in India. f. Location of horn buttons on the steering wheel. As Indian motorists use horn far more frequently than the European where the horns are located on the lever. Indian roads.

4. Stimulating Innovation: An undifferentiated marketing strategy that targets at all customers in the total market necessarily reduces customers preferences to the smallest common basis. Segmentations provide information about smaller units in the total market that share particular needs. Only the identification of these needs enables a planned development of new or improved products that better meet the wishes of these customer groups. If a product meets and exceeds a customers expectations by adding superior value, the customers normally is willing to pay a higher price for that product. Thus, profit margins and profitability of the innovating organizations increase.

5. Makes the marketing effort more efficient and economic: - Segmentation ensures that the
marketing effort is concentrated on well defined and carefully chosen segments. After all, the resources of any firm are limited and no firm can normally afford to attack and tap the entire

market without any delimitation whatsoever. It would benefit the firm if the efforts were concentrated on segments that are more profitable and productive ones. Segmentation also helps the marketer assess as to what extend existing offer from competitors match the needs of different customer segments. The marketer can thus identify the relatively less satisfied segments and succeed by concentrating on them and satisfying their needs.

6. Benefits the customer as well: Segmentation brings benefits not only to the marketer, but to the customer as well. When segmentation attains higher levels of sophistication and perfection, customers and companies can conveniently settle down with each other, as at such a stage, they can safely rely on each others discrimination. The firm can anticipate the wants of the customers and the customers can anticipate the capabilities of the firm.

7. Sustainable customer relationships in all phases of customer life cycle: - Customers

change their preferences and patterns of behavior over time. Organizations that serve different segments along a customers life cycle can guide their customers from stage to stage by always offering them a special solution for their particular needs. For example, many car manufacturers offer a product range that caters for the needs of all phases of a customer life cycle: first car for early teens, fun-car for young professionals, family car for young families, etc. Skin care cosmetics brands often offer special series for babies, teens, normal skin, and elder skin.

8. Targeted communication: It is necessary to communicate in a segment-specific way even if product features and brand identity are identical in all market segments. Such a targeted communications allows to

stress those criteria that are most relevant for each particular segment (e.g. price vs. reliability vs. prestige).

9. Higher market Shares: In contrast to an undifferentiated marketing strategy, segmentation supports the development of niche strategies. Thus marketing activities can be targeted at highly attractive market segments in the beginning. Market leadership in selected segments improves the competitive position of the whole organization in its relationship with suppliers, channel partners and customers. It strengthens the brand and ensures profitability. On that basis, organizations have better chances to increase their market shares in the overall market. BASES FOR SEGMENTATION Markets can be segmented using several relevant bases. There are huge number of variables which leads to market segmentation. They comprise easy to determine demographic factors as well as variables on user behavior or customer preferences. Segmentation is done for consumer market and industrial market. Bases for segmentation in consumer market:Consumer market can be segmented on the following customer characteristics 1. Geographic Segmentation. 2. Demographic Segmentation. 3. Psychographic Segmentation. 4. Behaviouralistic Segmentation. 1) Geographic Segmentation: - Potential customers are in a local, state, regional or national marketplace segment. If a firm selling a product such as farm equipment, geographic location will remain a major factor in segmenting your target markets since

their customers are located in particular rural areas. While for retail store, geographic location of the store is one of the most important considerations, in this case city areas are preferred. Segmentation of customers based on geographic factors are:a. Region: - Segmentation by continent / country / state / district / city. b. Size: - Segmentation on the basis of size of a metropolitan area as per its population size. c. Population density: - Segmentation on the basis of population density such as urban / sub-urban / rural etc. d. Climate: - Segmentation as per climatic condition or weather. 2) Demographic Segmentation: - Segmentation of customers based factors are:on demographic

a.

Age (dominant factor):-Segmentation is done on the basis of age of person. Example Titan has segmented its product according to different age group of person. a. Income (dominant factor):-Segmentation is done on the basis of income level of a person. Budget car segmentIt is the largest segment in Indian market. Here the entry level starts from Rs 1.5 to 3 lakh. Maruti 800 and Omni are the dominant players in these segments. With the launch of Tata Nano with a price range of 1lakh the outlook of this segment has changed. This segment is sometimes referred to as the small car segment. Competition in this segment is extreme in Indian market.

OBJECTIVES OF THE PROJECT

The main objective of the study is to recognize the sales trend and segmentation of TATA NANO Special challenges that must be identified and addressed:

To know the segmentation and sales trend of TATA NANO.

Along with this we are trying to assess companys performance compared with that of the competition..

To know the way TATA has segmented its cars To know the areas in which the dealers satisfy their customer and the areas that they do not satisfy.

To come out with the conclusion and recommendations based on the analysis and interpretation.

RESEARCH METHODOLOGY

In our market research process we had followed different steps of marketing research, such as :There are six steps involve in effective marketing research process: Step 1:Define the problem and research objectives It is extremely important to define the problem very clearly. The Objectives of the research have to be very clearly defined. No amount of Vagueness is acceptable here. More specifically defined the objectives would be to find out the kind of accounts being closed down and the objective would be stated as To study the reasons for closure of savings accounts in urban and metro areas. Step 2:Develop the research plan The second stage of marketing research calls for developing the most efficient plan For gathering the needed information. The marketing manager needs to know the Cost of the research plan before approving it. Designing a research plan calls for Decisions on the data sources, research approaches, research instruments, Sampling plan, and contact methods. Data sources: - The researcher can gather secondary data, primary data, or both. Secondary data are data that were collected for another purpose and already exist somewhere. Primary data are data freshly gathered for a specific research Project. Research approaches: - Primary data can be collected in five main ways: through Observation, focus groups, surveys, behavioral data, and experiments. Research instruments:Marketing researchers have a choice of three main

research Instruments in collecting primary data:

a) Questionnaires: - A questionnaire consists of questions presented to respondents for their answers. Because of its flexibility, the questionnaire is by far the most common Instrument used to collect primary data. Questions can be open-ended or closed-Ended. b) Qualitative measures: - Some marketers prefer more qualitative methods for gauging consumer opinion because consumer actions do not always match their answers to survey questions. Qualitative research techniques are relatively unstructured measurement approaches that permit a range of possible responses, and they are a creative means of ascertaining consumer perceptions that may other-Wise be difficult to uncover. c) Mechanical devices: -Mechanical devices are occasionally used in marketing research .Mechanical devices like galvanometers measure the respondents interest or emotions aroused by exposure to a specific ad or picture.

Sampling plan: - After deciding on the research approach and instruments, the marketing researcher must design a sampling plan. This calls for three decisions: a) Sampling unit: - Who is to be surveyed? The marketing researcher must define the target population that will be sampled. b) Sample size: - How many people should be surveyed? Large samples give more reliable results than small samples. However, it is not necessary to sample the entire target population or even a substantial portion to achieve reliable results

c) Sampling procedure: - How should the respondents be chosen? To obtain a representative sample of the population should be drawn. Probability sampling allows the calculation of confidence limits for sampling error. Some marketing researchers feel that no probability samples are very useful in many circumstances, even though they do not allow sampling error to be measured. Contact methods:- Once the sampling plan has been determined, the marketing researcher must decide how the subject should be contact: a) Mail questionnaire: - The mail questionnaire is the best way to reach people who would not give personal interviews or whose responses might be biased or distorted by the interviewers. Mail questionnaires require simple and clearly worded questions. b) Telephone interview: - Telephone interviewing is the best method for gathering information quickly; the interviewer is also able to clarify questions if respondents do not understand them. The response rate is typically higher than in the case of mailed questionnaires. c) Personal interview: - Personal interviewing is the most versatile method. The interviewer can ask more questions and record additional observations about the respondent, such as dress and body language. Personal interviewing takes two forms. In arranged interviews, respondents are contacted for an appointment, and often a small payment or incentive is offered. Intercept interviews involve stopping people at a shopping mall or busy street corner and requesting an interview.

d) Online interviews: - There is increased use of online methods. There are so many ways to use the Net to do research. In this method, researcher can include a questionnaire on its Web site and offer a people to answer the questionnaire. Step 3:-Collect the information The data collection phase of marketing research is generally the most expensive and the most prone to error. In this case of surveys, four major problems arise. Some respondents will not be at home and must be contacted again or replaced. Other respondents will refuse to cooperate. Still others will give biased or dishonest answers. Finally, some interviewers will be biased or dishonest. Getting the right respondents is critical. It is important to recognize that not everyone in the sample population will be online. Step 4:-Analyze the information The next-to-last step in the process is to extract findings from the collected data. The researcher tabulates the data and develops frequency distributions. Averages and measures of dispersion are computed for the major variables. The researcher will also apply some advanced statistical techniques and decision models in the hope of discovering additional findings. Step 5:-Present the findings As the last step in marketing research, the researcher presents his or her findings to the relevant parties. The researcher should not overwhelm management with lots of numbers and fancy statistical techniques, but rather should present major findings that are pertinent to the major marketing decisions facing management.

Step 6:-make the decision The managers who commissioned the research need to weigh the evidence. If their confidence in the findings is low, they may decide against introducing the in-flight internet service. If they are predisposed to launching the service, the findings support their inclination. They may even decide to study the issues further and do more research. The decision is theirs, but hopefully the research provided them with insight into the problem. Along with this there may be 3 type of research methodology these are :They are

Exploratory Research Descriptive Research Casual Research

Our research is based on the exploratory research. Exploratory Research the objective of this research is to gather preliminary information that will help us to define the problem and to suggest any hypothesis. Which means first we have to define the problem and research objective . then we have to develop the research plan for collecting information. Now after collection data we have to interpret those data for any suggestion,

DATA COLLECTION

For the data collection regarding our project we are using questionnaire method. We had pre pared a set of question which are being asked from different dealers present in Moradabad. And according to there answer we are tiring to analyze the segmentation and sales trend of TATA Nano. For the data we visited the following dealers of TATA Nano. in Moradabad city and based on their view and talk we try to interpret on our own. So the primary data is collected in the form of questionnaire.

FINDINGS
From how many years you are selling Maruti Suzuki cars. NO OF YEARS % of Response. More than 2 years 65 More than 5 years 30 More than 10 years 5

YEARS OF SELLING
100% 65%
% RESPON SE

50%

30% 5% No of years

0%

More than 2 years

DATA ANALYSIS From the above table it is clear that the most of dealers i.e 65% of them are having more than 2 years experience , 30 % of them are having more than 5 years experience and only 5 % have more than 10 years of experience with them. DATA INTERPRETATION: So the above query clears that all the dealers are experienced enough to understand the trend of sales and segmentation of Maruti Suzuki . And they can also add valuable suggestion to us for the recommendation part.

Which segments of cars you are selling more? DIFFERENT SEGMENTS A B C D E

% OF SALES 12 69 13 5 1

SALES IN DIFFERENT SEGMENTS

80 60
% OF SALES

69

40 20 0
A B

12

13

SEGMENTS
C D E

DATA ANALYSIS From the table we can conclude that % of sale of Segment is 12, segment B is 69, segment C is 13 , Segment D is 5 and segment E is only 1 %. DATA INTERPRETATION Here we see that Maruti Suzuki is market leader in B-segment car , So the models Like Wagon R, Alto, Zen Estilo, Swift are the hot selling product of It. However, it is lacking in the segments like D and E. Cars like Dzire , SX4 and Grand Vitara should be improved in accordance with the customers need.

CONCLUSION
The research work was successfully identifying the different segmentation of TATA Nanoand also the sales trend. The conclusion can be drawn from this study may be: TATA Nanois Indias one of the leading auto mobile manufactures and also the leader of the market both in terms of volume and revenue generated. MSL (TATA NanoLimited) has segmented the market in to A, B, C, D and Eon the basis of price and length and weight. Between fiscal year 2002 and 2007 the market of automobile grew at rate of 9.5%. In segment A price always plays a vital role MSL was the sole manufacture till 2000, Maruti 800 was the hot seller till 2005. In segment B growth of automobile was 57.6% where Maruti captures a share of 69%. Its products like alto and Zen are two role models with these segments. In C,D and E segment Maruti has number of competitors and has a less growth . In this segment also MSL lack of more models than other company. Taking the sale trend in to account MSL sold a record number of vehicle 7, 14,842 in 2007-08 including 53,024 units of export. In 2007-08 it record a turnover of INR 145,922 million which rose to 178,603 million in 2007-08 showing a growth of 20%. MSL has also captured 51.4% of passenger car segment while the total share of this segment is 78%. It also captures 89% of multi purpose vehicles. And 1.6 % in sports utility vehicle segments. So in every segment TATA Nanohas shown its presence.

LIMITATIONS
In the time of prepairing my project I have seen some limiting factors in the time of prepairing my project ,these limitations are: 1. Their have some information can be left in the details of finencial bills because these bills are very confidential. 2. Lack of time and lack of experience in this project some errors can be possible. 3. In this project I explain some records and information as a practically knowladge. 4. In this project some points are left because these points are working on by branch manager. 5. In this projct some errors are possible in [Link].

BIBILIOGRAPHY
TITLE Market Research Market Management

AUTHORS Philip Kotler Leon G. Schiffman & Lesilazar Kanar Aditya Saxsena

MAGAZINES Auto World Over Drive Business Today Auto India

WEB SEARCH: [Link] [Link] [Link] [Link]