A CASE STUDYTATA NANO

“An amazing invention that didn't turn out to be a innovation”

A BRIEF HISTORY

Mission and Vision Statements

Inspiration and Vision

CHALLENGES FACED

OPPOSITION FROM FARMERS ▸ TATA group initiated the construction of the Singur plant on 21

January 2007.▸ The project faced massive opposition from displaced farmers.▸ The protests were supported by West Bengal’s opposition party.▸ After an year and half of negotiations, TATA group finally

announced on 3rd October 2008, that they were pulling out of Singur due to “political unrest and agitation”.

▸ TATA said that the financial loss due to relocation ranges somewhere between Rs. 400cr and Rs. 1,400cr.

CHALLENGES FACED

“CHEAP” TAG: ISSUES IN POSITIONING▸ Instead on focussing on being good, TATA group marketed the

car as being the 'cheapest'.

▸ This may have worked in other countries but backfired massively in India due to the intense perception of class position.

▸ It turned out that the lower class preferred to buy second hand higher-end cars than to buy a Nano, which would mark them as poor.

▸ Due to the low price there were concerns that the cars would be of a cheaper quality.

CHALLENGES FACED

QUALITY CONCERNS▸ Due to the low price there were concerns that the cars would be

of a cheaper quality.

▸ There were several fire incidents related to Nano, though the company denied that they were connected to car’s design or parts.

▸ In 2014, a Nano was crashed by ADAC in Germany. Despite Tata’s claim that it was expecting 4 stars, Nano actually got zero stars for adult protection and didn't even meet basic UN safety requirements.

CHALLENGES FACED

ISOLATION OF TARGET MARKET AND OTHER ISSUES▸ Cars are sold through dealers, and Tata’s dealer network was

almost entirely urban, and they didn't have a way to reach out to small towns and villages.

▸ The target market knew how to buy a scooter but didn't know how to buy a car.

▸ Many people were simply intimidated to go to a car dealership.▸ Between 2003, when the development started and mid-2008

when the production began the prices of raw materials went up by 13-23%.

Source: http://deniseleeyohn.com/bites/what-went-wrong-with-tata-motors-nano/

MARKETING RESPONSE

▸ The TATA Nano had drawn over 2.03 lakh fully paid bookings amounting to nearly Rs. 2,500cr.

▸ Company officials say 70-80% of initial customers already had a car, some even had two.

▸ The target customers felt shy to walk into the showrooms.▸ The Maruti Alto sold 3.93 lakh units, while over 71,000 Nanos

have been sold since the latter was launched in July 2009.▸ The nano was to sell on ‘demand pull’, but now its plagued

with poor image and quality issues.▸ Dream of becoming number 1 entry -level hatchback

shattered.Source: http://www.nytimes.com/2010/12/10/business/global/10tata.html?_r=3&src=me&ref=business&amp http://economictimes.indiatimes.com/news/news-by- industry/auto/automobiles/How-Tata- Nano-hit- a-big-bump- in-India/articleshow/7032762.cms

Source:https://www.motorbeam.com/2015/10/cars/hatchback-car-sales-in-india-for-september-2015-maruti-dominates/

Source: http://www.business-standard.com/article/management/nano-sticks-to-the-slow-lane-116011300323_1.html http://www.hindustantimes.com/autos/end-of-the-road-for-india-s-beloved-maruti-800-company-stops-production/story-2EwlOvTta125XZ1BhNBidK.html www.newindianexpress.com

RECENT IMPROVEMENTS ON NANO

▸ ‘Place’: From grandiose showrooms to low key access points, distribution was restructured, giving more access to the targeted customer segments.

▸ ‘Price’: Negotiations with NBFCs, public sector banks, local cooperative banks were made to ensure attractive interest rates and financing options for Nano customers.

▸ ‘Product’ : To enhance the safety features, a retro-fitting exercise was undertaken, which included addition of fuse and non-inflammable cover to all cars sold plus manufactured.

▸ ‘Promotion’: The initial setback caused due to cheap car image was worked upon and car was rebranded as the most famous hatchback, fuel efficient, good performance and pleasant interior.

Source - http://articles.economictimes.indiatimes.com/2010-12-03/news/27627574_1_nano-production-tata-nano-sanand

Since there were problems regarding the positioning of Nano, major changes were undertaken in terms of the company to revive the product.

Changes explained based on the 4 P’s of marketing: