Tata nano marketing mic

Tata nano repositioning

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1. Introduction:

Within a global market where a strong competition presents a lot of pressure to any new project, the Indian automotive industry is getting bigger and better in the market, marking its territory.

India is the world's second largest producer of two-wheeled vehicles, the world's second largest producer of commercial vehicles, the fifth largest producer of commercial vehicles in the world, also of the fourth market of passenger cars in Asia with a volume of sales having now exceeded the bar of million units.

the government wishes to facilitate the penetration of small cars, in particular by applying regressive taxation for new vehicles and small displacement, and accelerate the modernization of road infrastructure.

They didn’t know at that time that they will do it and produce the cheapest small car ever designed: The Tata Nano car.

1. The idea of launching a new product:

The Tata Nano is a city car produced by Tata motors, revealed in 2008 in a new Delhi auto-exposition in India. The first purpose of its creation was to present a product that fit the needs of the Indian consumer but also the market by producing an accessible car for everyone, so the idea was based mainly on how could we create a Commerciale car with the cheapest price possible. Furthermore, objectives of Tata motors started to get bigger by the desire to go international in some countries like China for instance. Selling a car with approximatively the same quality as its competitors but with a lower price.

In India because of the standard of living, most of families tend to ride on 2 wheelers vehicles, the father driving the scooter, his young kid standing in front of him, his wife seating behind him holding a little baby according to Ratan Tata observation made in 2002 from where came the idea of launching a new, safer product. This observation led him to wonder whether one could conceive of a safe, affordable, all weather form of transport for such a family.

And effectively in 2003, at the Geneva Auto show, Tata announced his dream car project.

The only issue left was to minimize the production cost in order to get the cheapest price possible for the car. To determine it, the idea was to look for the cheapest competitor that was around $5495 at that time, and the 2 wheelers cost roughly between $880-1100 so obviously the price should be somewhere in between. And that was from where all the idea came up. The engineers tried to combine all the functional pieces of the car and eliminate the additional features in order to cut the costs.

The process took over five years to get realized from 2003 till 2008 where the car was launched and exposed in New Delhi with a price of $2500, and so 206 000 cars were ordered.

1. The Tata Nano initial positioning:

The Indian group wanted to produce the cheapest car ever created, they did a really good job though since they proposed to the Indian customers a useful and innovative product with low price. However, they didn’t get the results wanted. Just to show you that low prices doesn’t necessarily mean guarantied success, there are many other factors that any firm should take into consideration.

The failure is mainly due to the wrong positioning done by the firm which is considered as one of the most important key to success. It also helps to maintain and the image of the brand in the consumer mind and position it comparing to competitors.

The safety of the car was an important issue noticed since the main reason that made Ratan Tata think about this innovation was this same factor: the security and safety of Indian families. A few models caught fire spontaneously and without apparent reasons, leaving fear of a design flaw. It was made by plastic instead of metal and the chassis and body links are glued rather than being welded, crash performance was very bad.

Moreover, The Nano did not make Indian consumers dream while buying the car, also wanted to acquire a social status and emerge from the middle class.  The Nano main target was families, for whom the purchase of a first car was also to mark the access to a higher social class. The car had only its low price, but no added value…

The marketing campaign didn’t help that much the car was related only to its low price presented by this slogan “the peoples car” or also “now you can”. The product was presented as an affordable and accessible for everyone and was placed in the low cost segment, forgetting the consumer behavior and perception regarding this positioning that make it look as a product for poor.

1. The marketing strategy for Tata Nano:

The group took decisive actions regarding the negative publicity of the product in terms of the quality, the safety and declining sales.  At no extra cost, Tata fitted Nanos with new exhaust and electrical systems. Even existing owners of Nano could have their old exhaust and electrical systems replaced with new ones absolutely free but also some added services were offered to the new consumers for a low price in terms of optional comprehensive maintenance contract.

Those actions were done in order to increase the quality and safety of the car, but changing two little options in the car would help the company save the project and change the old reputation of the car?

When it comes to targeting, carl foster was focusing mainly on the two wheelers users but also young people that cannot afford an expensive car like college student and young couples (the firm decided to help them to get loans since it is difficult for people that has low wedges to get credits in India) which is not sufficient since the company may lose potential clients that may offer new opportunities to the firm. it’s not only that, but we still also have the image issue within this same target.

And finally the positioning, foster tried to reposition the car by changing the slogan “the key of happiness” portraying Nano as an attractive car but the sales still stagnant and the perception of the Indian consumer remain the same.

As we can see the strategy proposed by Carl foster was not that successful since Tata Nano scored the lowest of four brands in the entry level compact category with 70 points, comparing with the best-selling Maruti Alto scored 91 points, some changes should be done in order to be competitive in the market.  The idea of the Nano was well though from the firm. However, they didn’t see further and didn’t compare their product with the competitors within the market to see their strength but specially their weaknesses and what should they improve to be better.

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