Tata Nano Case Study

Course: PMBA

Title of the Assignment: TATA NANO

Academic Integrity Statement: We have read the Student Academic Code of Conduct and this assignment complies with the Code.

Word Count: 2478 words

EXECUTIVE SUMMARY[pic 1]

Tata Nano was built in the quest for providing Indians with the cheapest car which has all the features. This innovation gave hope to middle class Indians who could not afford a car before. But Tata Nano failed to deliver the expectations which they had built up in people’s heart.

Tata Nano has mostly all the features which a small or a budget car should have. TATA Nano could be repositioned to attract more customers by doing small tweaking in their current model of the car.

Best target market for TATA NANO could be:

• Middle Class segment who can afford to buy a car. The car might be the first car for the family.
• Upper Middle Class segment who could use the car for multiple purpose

Tata Nano failed initially since the company did not deliver their commitment. Its plastic body and its infamous car crash test failures also added to the misery.

Nano has to stay away from announcing itself as the cheapest car instead should shift its focus on publicizing it’s product as the Smart car.

They can revamp NANO by giving it a new name: TATA SMART.

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TABLE OF CONTENTS

1. EXECUTIVE SUMMARY        2
2. INTRODUCTION        4

1. Problem Statement        4

1. DATA ANALYSIS        5

1. Alternative Analysis        6
2. Logical Segments        8
3. Best Target Markets        9
4. Target Markets        10
5. Product to position        11
6. Channels        11

1. CONCLUSION        13
2. BIBLIOGRAPHY        14

INTRODUCTION[pic 3]

Problem Statement

Tata Nano was built in the quest for providing Indians with the cheapest car which has all the features. This innovation gave hope to those Indians who could not afford a car before. But Tata Nano failed to deliver the expectations which they shaped in people’s heart. (Katyal,2014)

These are the words of Ratan Tata in an interview with CNBC: “It (Nano) became termed as a cheapest car by the public and, I am sorry to say, by ourselves, not by me, but the company when it was marketing it. I think that is unfortunate.”

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DATA ANALYSIS

The automobile market in India is dominated by two-wheeler vehicles. But, with ever growing size of middle class families and their increasing levels of disposal income the market for passenger cars has risen recently.  The Indian economy is growing at a tremendous speed and the need for mobility is a priority due to urbanization. (India: Mecca of small car)

Tata Motors Limited is India’s largest automobile company, is amongst the top companies to supply passenger vehicles. The company was founded in 1868 and Tata Motors was established in 1945 with a mission “to be passionate in anticipating and providing the best vehicles and experiences that excite our customers globally.”  (Tata Motors-Company Profile)  

However, Tata Nano, a dream car project of Ratan Tata himself had failed to fulfill its company’s mission. Tata Nano has been widely publicized as the “World's cheapest car” and “The People’s Car” since its inception. The creation of Tata Nano is a result of innovation that tried to capture value from existing two-wheeler customers. But it has fizzled out even before it was unveiled. (Tata Nano: Brief history and case study analysis)

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Alternative Analysis

Kotler’s Analysis

Basic product:

• Mode of transport for Family day out, vacation or on road trips
• To attend weddings or parties
• Commute to office, to pick from and drop kids to school
• Going out for shopping, to a grocery store or to a vegetable market
• Protect oneself from harsh weather
• Use my small car for everyday activities rather than taking out my big car since it is easy to park and maneuver

Generic product:

• Two-wheelers like Motorcycles, Scooter and Bicycle
• Public transport
• Taxis or cabs and use car pool option. Borrow car from a friend
• Local trains, Tuk-Tuks, use Metros line (in metropolitan cities)
• Other small budget new cars and used cars

Expected Product:

• Low maintenance, good on mileage, fuel efficiency and good engine life
• Easy availability of spare parts
• Comfortable seats and more leg space
• Affordable to target customers
• Music system
• Test drive before purchasing the car
• Reliable with commendable Battery and Engine performance

Augmented product:

• Air conditioner
• Body color options
• Better resale value
• Loan processing service and free insurance with accidental coverage
• Power steering
• Free servicing for 6 months
• Free pick up and drop for car servicing
• Central Locking system
• Spare tire[pic 8]

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Potential product:

• Pride: My family, friends and relatives will have high respect for me and it gives me pride that I was able to work hard and could afford a car for myself.

• Feeling Patriotic: This car is our nations pride and I own one too. Made in India for Indians. I am proud to own one.

• Satisfied: Family movies and dinners were not possible before on two-wheeler but it will now be possible with a car. I am satisfied with myself for fulfilling my family’s big dream.

• Rewarded: My family saved the money to purchase a car. We budgeted on grocery, shopping and movies for many years to buy a car. We feel rewarded and happy that we fulfilled our dream.

• Achievement: I bought a car and it’s a great achievement since I fulfilled a big task in my life.

• Safety and security: I don’t want my wife or sister waiting at a bus stop or to take a cab late in the night as it will make me anxious about their safety. I want them to feel secure before going out for late night parties or stay up late in the office. I will buy a car for them

• Comfort and Smart: makes me feel I am smart and good at making decisions if I can drive a stylish and trendy car that is comfortable at the same time. Youthful.

• Driving in our cities’ congested roads was never more convenient. Ability to exist and manage the chaos.

• Feel belonged: All my relatives own a car and now I will be able to own one too. I will feel more accepted in my friends group too now since they all own a car. Our neighbors would consider calling us for functions and parties.

• Envy: My neighbors would be jealous of us that we now own a car.

• Fulfilling aspirations/dreams: owning a car = growth in social status = marital eligibility. (Indian Cultural Belief)

• Modern: A reflection of being a modern Indian after owning the car.

• Car as a child – I have a baby, my child now.

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Logical Segments

Parents of college going students:

My son/daughter goes to college in a bus every day and they have to struggle to get in since it’s too crowded. I bought a car now which helps them to manage their time efficiently and reach college on time.

Homemakers:

I have to buy grocery, get vegetables; pay utility bills and I may go shopping on my way too. It is so uncomfortable to travel in auto rickshaws and buses as I will have many bags from shopping. I have to attend parties and weddings sometimes where I have to wear heavy jewelry; therefore I will not prefer to go in a bus then. A car would denote safety.