Positioning the Tata Nano – Case Memo
Positioning the Tata Nano – Case Memo
Introduction:
Tata Motors Limited (TML), a part of Tata group, a highly respected conglomerate has a product that will revolutionize the way India travels. The team was successful in delivering a car that meets the goal price of 1 lakh rupees. People welcomed it with high pre bookings and initial sales. But it has been found that the car didn’t hit the target market. The initial excitement faded away leading to drastic downfall in sales. We have analyzed the case to bring out the strengths and marketing strategies that TML can play to improve upon its sales.
Strength:
1. At 1 lakh, price is the major strength of Nano. It has been priced between the cheapest car and a bike. 2. Fuel efficient car in the Indian market. 3. Easily accommodate a family of four. 4. Tata group is the most respected corporates in India. This gives TML an advantage as people trust the brand. 5. The compact design provides easy maneuverability in the congested city traffics.
Weakness:
1. Positioning of the product as a cheap car. 2. Capacity limitation due to postponement of new factory lead to lottery based delivery. 3. Absence of enough TML dealers to cover the length and breadth of the country. 4. Low margin for the dealers. While TML provided 4 to 10 percent dealer margin for Nano the dealer margin was only 2 to 3 percent.
Opportunities:
1. TML team views nano as an opportunity to provide a safer means of transport to a typical Indian family which rides on a motorcycle. The two wheeler segment presents itself as a great opportunity to nano to tap in. 76 % of automobile sales is in two wheeler market. 2. A large percentage of Indians lie in the middle class income range. Presently their disposable income is on the rise due to better job opportunities. The fact that this section of people doesn’t have a car and also prefer to own one if affordable provides TML with unprecedented market opportunity.
Introduction:
Tata Motors Limited (TML), a part of Tata group, a highly respected conglomerate has a product that will revolutionize the way India travels. The team was successful in delivering a car that meets the goal price of 1 lakh rupees. People welcomed it with high pre bookings and initial sales. But it has been found that the car didn’t hit the target market. The initial excitement faded away leading to drastic downfall in sales. We have analyzed the case to bring out the strengths and marketing strategies that TML can play to improve upon its sales.
Strength:
1. At 1 lakh, price is the major strength of Nano. It has been priced between the cheapest car and a bike. 2. Fuel efficient car in the Indian market. 3. Easily accommodate a family of four. 4. Tata group is the most respected corporates in India. This gives TML an advantage as people trust the brand. 5. The compact design provides easy maneuverability in the congested city traffics.
Weakness:
1. Positioning of the product as a cheap car. 2. Capacity limitation due to postponement of new factory lead to lottery based delivery. 3. Absence of enough TML dealers to cover the length and breadth of the country. 4. Low margin for the dealers. While TML provided 4 to 10 percent dealer margin for Nano the dealer margin was only 2 to 3 percent.
Opportunities:
1. TML team views nano as an opportunity to provide a safer means of transport to a typical Indian family which rides on a motorcycle. The two wheeler segment presents itself as a great opportunity to nano to tap in. 76 % of automobile sales is in two wheeler market. 2. A large percentage of Indians lie in the middle class income range. Presently their disposable income is on the rise due to better job opportunities. The fact that this section of people doesn’t have a car and also prefer to own one if affordable provides TML with unprecedented market opportunity.