MarketingCase1Team108 V2 Nik

Topics: Tata Nano, Automobile, Tata Motors Pages: 9 (1805 words) Published: April 13, 2015
Study Team 108 – Blue Cohort
Study team members:
Nikita Jain - nikita_jain@berkeley.edu
Lexi Sturdy - lexi_sturdy@berkeley.edu
Pierre-Alric Bozo – pierrealric_bozo@berkeley.edu
Andrew Hill - andrew_hill@berkeley.edu
Mark Lee - mark_lee@berkeley.edu

Positioning case
(Team Case Analysis One)

MBA 206: Marketing Management

October 12, 2014

Executive Summary- Nikita
Our business objective is to achieve sales of 1.46 mn Nanos amounting to a revenue of $2.4bn in its first year of launch 2009. To achieve this objective, we recommend Tata entering as a prime mover in building the world’s cheapest car for safe and comfortable family commuting for the Indian middle class, revolutionizing the auto industry in India. Connoisseurs of the automotive industry in India, Tata Motors with the production of passenger-cars since 1991, occupies 17% of the Indian market-share in passenger vehicle segment.

Under the ‘Umbrella positioning’ our target customers are Indian middle class families currently owning 2-wheelers for 4-5 person commuting and graduating youngsters for whom Nano would appeal as a stylish alternative while still maintaining maneuverability and affordability of a 2-wheeler. India is a developing economy with a rapidly growing segment of middle class consumers that aspires for a car ownership. The Indian auto industry is projected to grow at a 17% annually with an automobile production of 11mn in 2008-09.Out of this 75% are 2 wheeler owners which we believe is a very good potential market for Nano. We will utilize our strong reputation and long standing relationships to co-liaise with suppliers for inventing this light weight car. By continuing to position our brand as ‘for the people’ and high-quality, marketing will remain consistent through dealerships.

Business objectives for the Nano - Nikita & Lexi
High technology and small size defined the advent of Nano (which means small in Gujarati) in the Indian auto market. The prefix is also originally derived from the Greek νᾶνος, meaning "dwarf" (a nano = 10^-9 in the metric system). Tata with this product entered a blue ocean market, the business strategy highly motivated by the ‘Collaborative marketing strategy’ defined by what customers need to make a better life. Our sales goal for Tata Nano in its first year of launch is 1.46 mn Nanos. Nano should launch 50000 Nanos (prebooked) initially limited by the plant production capacity and selling on a rolling basis with the set-up of the new plant at Sanand, Gujarat Automobile production

Type of Vehicle
2008-09
Market share
Comments
Passenger vehicle
1,838,593
16%
Indica was behind Maruti 800 (leader in passenger vehicles)
Commercial vehicle
416,870
4%
Tata was the leader
Three wheelers
497,020
4%
Potential to tap this market for taxi conversions
Two wheelers
8,419,792
75%
Very good potential market for Nano
Total
11,172,275
100%

With an initial investment of 3*1500 crores INR Tata liased with 100 different suppliers to get a starting production capacity of 1mn (350,000 Nanos from new plant built in Singur, West Bengal and 2 additional plants with similar capacity). They shifted to a new site at Sanand, Gujarat due to protests from farmers on claiming their land and also set up a temporary manufacture site at TML Pantnagar. Capacity of this plant was only 50000 Nanos.

Market for Tata Nano - Andrew
Expanding middle class= 5%in 2005, 19% in 2015, nano launched in 2009, can take a an average of 12% as the potential middle class 1.1bn*12% (middle class)* (12/1000 car ownership) = 1.584mn potential car owners Segment

Description
Main competitor models
~Price range (INR)
A
Entry level hatchback
Maruti 800
200,000

Alto
200,000
B1
Hatchback
Indica
300,000
Two wheelers

Honda motorcycles/Scooters/Mopeds
35,000-75,000

Switch rate from other cars would be very less. New users would buy Nano as...
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