In the post globalized era where India is looking at growth rates of more than 8%, one of the main beneficiaries of India’s growth story is Automobile Industry. Termed as“Industry of Industries” . Automobile industry has been one of the indicators of a country’s economic prosperity, as major population of Indian economy is turning out as middle class society. Prior to the 1991 liberalization, auto industry in India was controlled and licensed by the government. Post 1991, the industry has grown at an average rate of 17%.
Currently contributing to around 5% of the GDP, this is expected to rise to 10% of GDP. TATA NANO: Overview TATA Nano is the cheapest car in the world. It is manufactured by TATA Motor Limited, the largest automobile company in India. Its chairman, Mr. Ratan Tata envisions that Tata Nano to become a “People’s car” which is affordable by almost everybody. Tata Nano is manufactured totally in India. Its assembled in its two factories atPantnagar and at Uttarakhand and also have a mother plant at Sanand Gujarat. What makes Nano so cheap? It has small and light engine, a 623cc two-cylinder petrol engine made of aluminum.
Factors that contribute towards the weight reduction are the usage of hollow steering wheel shafts, plastic body panels and smaller tubeless tires. As a result of these measures, Tata Nano weighs only about 590kg. Lesser weight and fewer parts mean less raw material and lower cost for Tata Nano. Vision and Innovation are successfully implemented without compromising the safety and environmental compliance. Analysis of Market Offerings:- 1. Markets across the Countries:- First targeted market was the low income Indian families and lower middle class population.
Now its expanding its market in other countries such as Malaysia, the rest of Asia, Europe, Africa and South America. The car was in 78-th Geneva Motor Show 2008. This helped to make the image of car in other countries than the existing ones back home in India 2. On the Web:- Considering the needs of the Market its website was launched in the beginning. Website is quite comprehensive and provides all the answers to the questions being asked since the start of the project. The marketing team has put a good effort to keep the website simple and easy to use and understand. Now one can find the Nano on Facebook, Orkut and Twitter. . Bank Finance :- TATA is keeping its promise of “people’s car” by providing bank car financing. NANO has made the way for the people who can’t afford to pay the price with the booking of the car. The 15 major banks including the state bank of India have been signed with the TATA to finance the low income people. The Key Marketing Features:- 1. Affordability :- * Tato Nano is priced around Rs. 1 Lac .
Which is almost half the price of the cheapest car in India, Maruti Suzuki, which is priced around 2 Lacs. * The low maintenance cost is a big issue, to maintain this car by oneself in a rough country is very easy and cheaper. The small size of the car gives a big advantage of parking in a densed Indian roads . 2. Warranty :- Its providing a 18 months Or 24000 Kms. warranty. Its not very good as compared to what one gets at the international level but it is still sounds good and once it is considered in price, fuel consumption and being eco friendly. 3. Fuel Efficient :- Tata Nano has a mileage of 21. 97 kilometer per liter, under city road conditions, and 25. 97 km/L on highways. This makes Tata Nano a fuel efficient vehicle, which will save money in the long-term.
This mileage comes with an engine of 623 cc with a maximum speed of 105 Kmph. 4. Environment Friendly :- Tata Nano emits less carbon than two-wheelers. It also meets emission norms of BS II, III, IV which are Euro II, II, IV equivalent. MARKETING FOCUS – STP ANALYSIS:- 1. The target customers * Lower and Middle Income families,who aspire to upgrade to 4- wheelers from being 2-wheeler users. Such families stay away from purchasing cars due to the affordability factor. Affordable purchase price, low maintenance cost, increased safety, usefulness as a family vehicle are the factors that influence such buying decisions. Nano is also targeting the Youth, especially students who prefer young, trendy and innovative vehicles. Cars with safety characteristics would appeal more to them over 2-wheelers. * Families who want a second car, mostly for women and children. Nano has been positioned as an innovative and trendy car, as opposed to be a cheap car. It leverages the TATA’s goodwill in market for the people throughout its publicity. 2. The Target Segment Nano aims to carve out a niche segment for itself in the Indian automobile industry. The closest competitor is Maruti 800. Maruti 800 is slowly moving out.
Its price is higher (>2. 3 Lacs) compared to Nano and people are weary of its looks and functionalities. More recent cars such as Maruti Alto and Chevrolet Spark are also wooing customers, but their pricing and positioning is totally different than that of Nano, preventing any direct competition. Real threat comes from the small cars from Bajaj and Renault-Nissan etc. They will directly compete with Nano in the same segment. The other major competitor for Nano is the 2-wheelers. Most of the young people, students and lower and middle income families currently depend on 2-wheelers for their day to day activities.
Primary reason for this is the lower initial cost and lower maintenance cost. Motorcycles such as Bajaj Pulsar and Hero Honda motorcycles has snatched the attention of the youth and family users. 3. Positioning: Tata Nano will position itself as the world cheapest car and yet does not compromise the quality, safety and environment. The Tata Nano has proved its robustness and reliability in many car rallies and expeditions undertaken by Tata Motors and by customers on their own. Its is the car that has put India on the world motoring map. It also has very good ground clearance and climbs well. MARKETING MIX 1.
Product : Tata has wide range of luxury and small cars, utility vehicles, SUVs, defense vehicles, trucks and etc. * Nano received media attention due to its targeted low price. * The Tata Nano is a rear-engine, four passenger, city car. * Aimed primarily at the Indian market but now spreading its market across the countries. PRODUCT MIX: 1. Products: Tata Nano has 3 types of models available in the market. Variants and their Pricing: • Basic Tata Nano priced at 123,000 INR as no extras. • Tata Nano Cx priced at 151,000 Rupees has air conditioning. • Tata Nano Lx priced at 172,000 Rupees has air conditioning and power windows. . Price: The prices of Tata motors are generally affordable acceptable by the general public at large and Nano being their trump card. Giving discount every month one of the strong strategy use by Tata Motors. Pricing strategies * Penetration pricing * Low pricing policy with minimum profit margin. * Though the 1 lac price tag is not fixed by TATA group, it was the word of mouth of people which fixed that range. This expectation of people creates a big challenge for the company. 3. Place: Tata Motors has an extensive dealer network covering Indian and International markets.
Wherever you are, there is a Tata Motors Sales and Service dealership close to you. The channel of distribution, phsycic allocation, and dealership method of distribution and sales is generally adopted. The distribution of vehicle must be in a very systematic way, from the plant to dealership and to end user. This is not only in India itself but also to the world-wide dealership. 4. Promotion: Tata motors promote their products via advertising and after sales services. * Enough use of promotion mix, publicity reduces the necessity of other promotional devices for Nano. * Publicity as “1 lac car” by mouth to mouth Auto expo 2008,New Delhi & Geneva * Singur violation and new plant set up at Pantnagar Other type of promotional activities: TATA is going to launch its nano mobile for indicom user, nano watches, nano T-shirts available in Westside stores. Advertisement : – * TV & other mass media is very effective * Online buzz:- Nano has gone beyond the traditional methods of advertising and promotion * Online have a blog on the official website where they discuss interesting topics and maintain an active community * Official Orkut community, Facebook Group Fans ,twitter fans group. Highest View Count on You Tube- 303,006 Level of a product: car * Core benefit: the need to get from one place to another. * Basic product: a car on its own; on this level this basically means that the car has 4 wheels. * Expected product: a car that is in working condition, so the owner can use it for transportation, it has decent mileage, etc. * Augmented product: TATA Nano that is in fully working condition, has an attractive design, passed all tests, has 4-wheel steering, built-in alarm and air condition, etc.
The car is also accompanied by other benefits provided by the motor company like warranty, instalments, etc. * Potential product: the car is much safer than the competitors’ products, it tends to break down less frequently than other cars. Product development life cycle of TATA NANO TATA NANO is one car which has created all in all a kind of new segment and this product is really different from all other. Introduction stage:- Tata Group introduced the revolutionary Tata Nano on January 08. It immediately stirred among Indian Consumers. It was dubbed as “The People’s Car”.
However, Low Price of the car is one of the crucial factors, which is going to deciding the future of Tata Nano. Launch was successful and was overbooked by almost 200%. Globally car is positioned as “The World’s Cheapest Car? , which does not compromise quality, safety and environment. Growth stage:- Nano aims to make out a niche segment for itself in the Indian automobile industry. The booming economy and the accelerated growth of lower middle class has generated very high demand for small cars. The closest competitor in the 4-wheeler segment:- Maruti 800 ( national competitor ,now going out of Indian roads ) * Toyota IQ (international competitor) * Reva (national and international competitor, cheaper than nano) Other cars are also planning to come in this segment at the same price level. Maturity stage:- • Additionally Nano used innovative and current successful promotions. “Tata Lana? was to be a promotion that would put “lana? , cash, back into hands of purchasers . • Nano would offer cash to purchasers as an incentive to buy or finance a Tata Nano. These kinds of promotions have proved highly effective in India .
But with the increasing competition and many new cars of different companies coming into this segment can move the tata nano into the maturity stage. After coming at this stage tata nano will not have to spend a lot on promotions because it will be really popular by then and will be generating ample amount of revenue. Decline stage:- Nano is in the decline stage because failure of the car from the point of its release, because of its lighter body and inefficient engine and loud noise,that has issues with some parts of the market.
It also went out of the market because of its advertisement in which the word “The cheapest car” has been in talks and public not liking the word “Cheap”. The low-income consumers in emerging markets often spurs significant innovation. * World is getting tougher day by day being unique is a competitive advantage. Expectations to nano has proved this. * After 100 years to Henry Ford, Tata has proved him again not only he came out of the expectations but also came out with a platform for Indian auto sector. * So as per this, it is not only the future car of India but also to the world, if exported.