MARKETING IN A DYNAMIC WORLD
2013-2014 1st Semester
Positioning the Tata Nano
“A TATA company shall be committed to good corporate citizenship, not only in the compliance of all relevant laws and regulations but also by actively assisting in the improvement of quality of life of the people in the communities in which it operates. The company shall encourage volunteering by its employees and collaboration with community groups.” This sentence clear state the commitment the company had to ethics and trust. The TATA Group was founded in 1868 as a trading company, but as the time goes by, expanded to a vaster range of interests in different sectors, such as information technology and communication, engineering materials, services, energy, consumer products and chemicals. The case study I am about to discuss concerns the best way to position the new model of TATA Motors Ltd, the Nano. This company was established in 1945 as the TATA Engineering and Locomotive Company ( TELCO ). In 1991, TELCO entered the passenger-car segment under a joint venture with the German manufacturer Mercedes Benz. The main models were the Sierra, the Indica, the Safari and finally, the company´s first mini-truck, the Ace. In 2003, TELCO changed name to TATA Motors Ltd and it was listed on the New York Stock Exchange. Then, a process of acquisitions and ventures took place in order to become international and to increase its global presence. In 2009, after TML purchased Jaguar and Land Rover at the price of $2.3 billion, the company had manufacturing facilities in the UK, South Korea, Spain, Morocco, Thailand, and Bangladesh and was exporting to Europe, Africa, the Middle East, Australia, Southeast Asia and South America. It was a Global and recognized brand. Due to the government´s liberalization of regulations on foreign trade and restrictions on private companies that contributed to the rapid Indian economic growth ( 1991 ), the automobile industry aroused. Despite this fact, per-capita ownership of automobiles in India is low when compared with developed countries. For economical and manoeuvrability reasons, the two-wheelers dominated the Indian road, representing 66% of all vehicles in the country. In this report, you will find my answers to the following questions: 1) What sales goal would I recommend for the TATA Group;
2) How will I position the Nano to achieve that goal ( and specify each component of my positioning statement and explain why my recommended positioning is superior to other positioning strategies that might be considered ); 1)What sales goal would you recommend for the TATA Group?
TATA´s inspiration to develop the Nano came from the idea of building the “world´s smallest and most efficient car” ever with a target defined as the rapidly growing middle class in India. When asked how much such car would cost, they came up with a number: Rs. 1 lakh ( felling midways between the price of the cheapest car and the price of a typical two-wheel motorbike ). But, in order to meet that goal, they had to reduce costs associated with parts and manufacturing ( to maximise profits ). Firstly, TML planned to produce 350,000 Nanos in the first year at a plant built at Singur. Two additional plants of similar capacity were planned, reaching the final sale´s goal of one million Nanos. But then, something went terrible wrong: soon after the construction began, farmers whose land the government had seized ( without any compensation ), began to protest. Since TML was seen “as a company that inspired trust and had a strong commitment to ethics” and “promise to improve the quality of life” of the people, they couldn´t stick with the initial plan. So, in September 2008 they abandoned the Singur plant and moved to Sanand, Gujarat. Then, other problem took place: moving the equipment from Singur to Sanand was forecast the delay the onset of production 18 to 24 months, which would lead...