1. What could be the main reasons for Tata Motors to enter the global ultra-low-cost car market?
Tata Motors is one of the India’s largest automobile makers where manufactures cheap vehicles. A firm can reach a superior percentage of profit by supply an identical goods or service at a lower cost (Grant, 2010). It is to believed that Tata Motors choose to enter global market in low cost market is because in lower medium and low incomes population is more where this can win in volume as well as sales. This enable Tata Motors to generate more incomes without effected by the GDP as well as inflation of a country. Low priced necessity products demand is always there where high end products will be affected by inflation and many more. For example, Tata Nano was introduced that car, which can be seats up to five people introduced by Tata Motors to be replaced motorcycles in fairly cheap and competitive price with motorcycles is based on the ceiling price. The highest price of market will pay for your goods or service based on survey for pricing limits (MyMarketingDept. Inc, 2014). Tata Nano is introduced to take over the motorcycle markets with low cost and as the cheapest car that can be afford by many drivers in India. Tata Motor is India’s company where most of the populations in India can only afford motorcycle that is why motorcycles is common in India. Besides, in a pyramid of social class, the bottom of the pyramid have the most population among all, which is lower middle and low social status. Obviously Tata Motors which is selling cheap vehicles will be targeting these group of people in volume not high end market where is just profit. Tata Nano enable middle and lower income population to have more choices as well as another safety option other than motorcycles. Social mobility refers to the movement of individuals or groups in social position over time. Generally, social mobility refers to the change in wealth and social of individuals or families (Boundless, 2014). Depends on an individuals or families income status, which might seek for a better transport as well as in affordable range. The social mobility will also affect them whichever is maintain or decrease, people tend to move upwards for a better choices in the low price range. 2. What are the competitive advantages that Tata Motors would be enjoy with the Nano in emerging markets?
Tata Motors is developed to be competitive and also replaced motors that are commonly be seen in India by Tata Motors, India’s largest automobile. Tata Nano get the huge competitive advantages, as they are the first movers that capture the low cost car market that also will gain consumer loyalty. As the low cost car market is still not be implemented, Tata Motors is considered as market leader for low cost car market. Emerging markets is defined as nations in the progress of industrialization and rapid growth (Kuepper, 2014). Tata Motors developed ultra low cost car where is emerging markets that produced in high volumes for the market needs. In the bottom of the pyramid, the amount of population is the most, which the population Tata Nano will be targeting is huge, and this is a huge market to go to. Tata Motors targeted customers seeking for cost-cutting area, where basically the cheaper the better. With that, Tata Motors has smaller engine compared with others car, which means horsepower would not be wasted in the jam and so on. For the petrol consumption, obviously it is low and suitable for middle and lower income population in order to cost saving. Not to mention the requirements of the Tata Nano is the cost, regulatory requirements and acceptable performance standards, which is basically what a motorcycles can do and turns in a car. Tata Nano obviously is safer than motorcycles that it can protect from unpredictable climate as well as secure lock. This is better option for the people to choose from instead of motorcycles. Besides, Tata Nano is the first world’s cheapest...
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