Further, due to Safari’s premium pricing strategy, sales have been low. The cutback is an attempt to revitalize the brand, which is likely to result in amplifi ed volumes and a higher market share. Kalpesh Parekh, an auto analyst with ASK Raymond James says, “Safari was priced on a higher side, now it has come in sync with market dynamics.” With Tata changing gears, competition in B1 segment is most likely to take an ugly face, as Tata Motors has lagged behind M&M and Toyota. Janish Shah, an auto analyst at Networth Stocks Comments, “I don’t think there will be any price cuts from M&M, GM, Toyota and others. But we can expect aggressive marketing to protect market shares.” Toyota played a similar gimmick last year by off ering a discount of Rs.80,000 & eventually launching a new version of Corolla. While Tata might mull that option, the best strategy would be to aggressively change customer perceptions of its brand. In the J. D. Power Index of 2005, Tata’s ratings degraded by 28 points over 2004 on the customer satisfaction scale. It’s crucial for Tata to lift its customer ratings, as if the brand loses appeal, price will fail to create the desired impact.
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Source:- IIPM-Business and Economy, Editor:- Prof. Arindam Chaudhuri - 2006
