Tata motors has two major market segment that it aims to penetrate with its line of vehicle that it produces. One target is the low income families and individuals looking to purchase a first car. This target group mostly concentrates itself in the developing nations such as China and India, Tata’s own home country. Tata’s offering of models such as the Nano and the Indica caters for this segment. This target segment also has been the most widely publicized target of Tata Motors. The other segment Tata targets is on the complete opposite side of the economic spectrum.
This target segment also has been the most widely publicized target of Tata’s. Tata’s second target segment is the wealthy individuals and families looking to purchase luxurious cars. Tata targets this group with their offering of Land Rover and Jaguar lines of automobiles. Both of these highly recognized and respected brand name vehicles were recently acquired by Tata from Ford Motors in 2008. In order to cater itself to two such divergent groups, Tata motors offers different value proposition to each.
The value proposition it offers to the first group, the low income individuals and families, is to offer a line of vehicles that are affordable while still being safe. This value proposition was clearly evident and communicated when the Nano was announced for release in 2009. However, since then the Nano has become somewhat of publicity nightmare for Tata as it failed to deliver these proposed value propositions and satisfy its consumers. This unfortunate event became widely publisized in front of an eager world audience still awe struck at Tata’s initial daring proposition.
In reality, Nano’s market price started at $2900, a whopping 45% increase from the initial suggested price of $2000 (Bajaj, 2010). Nano also revealed itself to possess a serious design flaw in its electrical system and numerous Nanos were shown going ablaze on the news around the world. Tata Motors’ failure to meet its own initial proposition has been blamed on numerous factors from rising metal costs to insufficient management planning (Eyring, 2011). Consumers have reacted very negatively to such a public failure and Tata Motors’ seeming disability to live up to its initial promise and value proposition to them.
Sales were affected badly as Tata announced that it had sold only 509units of Nano in November 2010. (Bajaj, 2010)Faced with such a threatening decline in sales number Nano has added another dimension to affordability, one of its proposed value propositions. Using its vast network and influence in India, Tata has started to sell Nano outside of its dealerships. These new locations include places such as grocery retail locations and brings these cars closer to the people it targets.
Tata has also said that it is actively seeking reasonable financing plans to help its customers make the car more affordable (Mint. , 2011). As rollout of their new model Indica progresses in China, many are waiting to see if the lessons learned in India will allow Tata Motors to fully deliver its value propositions to this customer segment (Accord Fintech, 201). The other market segment Tata Motors targets is the wealthy individuals and families looking to buy a luxury car. These offerings are represented by their Land Rover and Jaguar lines (Tata Group).
The value proposition offered to this segment is to provide automobiles that consumers can trust and depend upon while giving them a sense of high-class self-satisfaction. As a brand name previously belonging to Ford motors and less recognized as a “Tata brand” than its Nano and Indica lines, these two brands have largely escaped the recent escapades brought on by Tata’s previously discussed public failures. Tata has expressed a hope to finance their long term projects with the steady incomes coming from these two lines (Tata Group, 2010).