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MARKETING STRATEGIES OF TATA

NANO

A PROJECT REPORT

Submitted by

Mr. Taresh Jain

Supervised by

Miss Shubhra Jain

in partial fulfillment for the award of the degree


of
Bachelor of Business Administration

Submitted to

Maharshi Dayanand Saraswati University,Ajmer

Aryabhatta College of Technical Education

SESSION – 2009-10

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ACKNOWLEDGEMENT
We have been benefited a lot from the guidance and suggestions given to us

by our institute and all the faculty members, for their immense help in conduction of

the project. In order to make my project I acknowledge a special thanks to all those

people without their help it would not be possible for me to complete my report.

My vision towards Indian economy and Automobile industries became

clearer and properly shaped. We also express sincere thanks to our all the teachers

for the help, without their co-operation and support it would have being difficult to

complete our project.

I would like to express my profound gratitude to Miss Shubhra Jain

(Faculty of Management), who guided me throughout the completion of this

project. She has been a great source of inspiration, guiding me whenever I needed

her help.

I would also like to thank my Maternal Uncles Mr. Deep Chand Jaiswar and

Mr. Vijay Kumar Jaiswar for their help and contribution.

Last but not the least, I thank all those who directly or indirectly contributed

& helped me, while working on the project.

Taresh Jain

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PREFACE
To be a Bachelor of Business Administration student is a matter of pride

because we are in a field, which helps us to develop from a normal human being

into a disciplined, and dedicated professional. One has to be a good learner to

sharper knowledge in the particular field to achieve and attain the desired goals and

heights. As a part of my B.B.A. program at Aryabhatta College of Technical

Education (M.D.S. University), I have prepared a project report on marketing

strategies of Tata Nano.

“Marketing Research is the systematic and objective identification,

collection, analysis, dissemination, and use of information for the purpose of

improving decision making related to identification and solution of problems and

opportunity”

I had learned lot during my project report on marketing strategies of Tata

Nano, and I hope this will be helpful to gain understanding about Nano. “To err is

human” and I am not an exception, valuable comments are always welcomed since

it will motivate to work with greater zeal and efficiency in the future.

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Executive Summary

The introduction of the Nano received media attention due to it's targeted

low price. The car is expected to boost the Indian Economy, create entrepreneurial-

opportunities across India as well as expand the Indian car market by 65%. Ratan

Tata-Chairman of the Tata Group envisioned the car and Tata Motors-who has

described it as an eco-friendly "people's car". Nano has been greatly appreciated by

many sources and the media for its low-cost and eco-friendly initiatives. The

company among six sites offered by the state government made the choice of

Singur. The project faced massive opposition from 2,000 of the 12,000 displaced

farmers.

The unwilling farmers were given political support by Miss Mamata

Bannerjee, West Bengal's firebrand opposition leader, with an eye to the upcoming

Lok Sabha (Parliamentary) elections. Due to opposition to Tata's Singur car-factory

by Mamta Banerjee, Tata Motors decided to cease operations in Singur on 3

October 2008 and started manufacturing Tata Nano at its Pantnagar plant.

On her protests and the consequent pullout, the media heavily criticized her

and The Telegraph even said, "India is being raped by those who profess to be her

soldiers, the guardians of peace." Currently, Tata Motors is reportedly

manufacturing Nano at its existing Pantnagar (Uttarakhand) plant and a mother

plant has been proposed for Sanand (Gujarat).

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S.NO. TOPIC NAME PAGE
NO.
1. Group Holding Structure of Tata 1
Ltd.

2. Tata Motors: An Overview 2 to 5

3. Chairman’s Profile 6 to 8
4. Various Products of Tata Motors 9 to 10
5. Introduction to Tata Nano 11 to 19
 History and Conception 12
 Financial Projection 12
 Technical Overview 13
 Safety & Comfort 15
 Cost cutting features 15
 Controversies involved 16
 Latest at Singur 18
 Environmental Impact 19

6. The People’s Car 21 to 22

7. The Little Car that might change 23 to 24


the world

8. Marketing Mix Strategies 25 to 35


 Product Strategies 25
 Price Strategies 27
 Promotion Strategies 29
 Financial Plan 35

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9. Market Structure Faced by Tata 37 to 39
10. Other Strategies 40 to 43
 Manufacturing Strategy 40
 New Market Segment 41
 Brand image 41
 Usage of composite material 41
 Distributed Manufacturing 41
 Economies of Scale 42
 Modifying Traditional Pricing System 43

11. Tata Nano v/s Maruti 800 44 to 46


12. RESEARCH METHODOLOGY: 47 to 50
 Objectives of study 47
 Research design 47
 Techniques used 48
 Data sources 48
 Scope of the Study 48
 Significance of the study 49
 Limitations of the project 50

13. BIBLIOGRAPHY 51

TATA NANO
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7
GROUP HOLDING STRUCTURE OF TATA LTD.

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TATA MOTORS: AN OVERVIEW

Tata Motors Limited, formerly known as TELCO (TATA ENGINEERING AND


LOCOMOTIVE COMPANY), is a multinational corporation headquartered in Mumbai,
India. It is India's largest passenger automobile and corporation commercial vehicle
manufacturing company. Part of the Tata Group, and one of the world's largest
manufacturers of commercial vehicles. The OICA ranked it as the world's 20th largest
automaker, based on figures for 2006
Tata Motors was established in 1945, when the company began manufacturing
locomotives. The company manufactured its first commercial vehicle in 1954 in a
collaboration with Daimler Benz AG, which ended in 1969 Tata Motors was listed on the
NYSE in 2004, and in 2005 it was- ranked among the top 10 corporations in India with an
annual revenue exceeding INR 320 billion. In 2004, it bought Daewoo's truck
manufacturing unit, now known as Tata Daewoo Commercial Vehicle, in South Korea. It
also, acquired a 21% stake in Hispano Carrocera SA giving it controlling rights in the
company. Tata Motors launched the Tata Nano, noted for its Rs100, 000 price tag, in
January 2008.
In March 2008, it finalized a deal with Ford Motor Company to acquire their
British Jaguar Land Rover (JLR) business, which also includes the Rover, Daimler and
Lanchester brand names. The purchase was completed on 2 June 2008 Tata Motors has its
manufacturing base in Jamshedpur, Pantnagar, Lucknow, Ahmedabad and Pune.

Tata Motors Limited is India's largest automobile company, with revenues of Rs.
32,426 crores (USD 7.2 billion) in 2006-07. It is the leader by far in commercial vehicles

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in each segment, and the second largest in the passenger vehicles market with winning
products in the compact, midsize car and utility vehicle segments. The company is the
world's fifth largest medium and heavy commercial vehicle manufacturer, and the world's
second largest medium and heavy bus manufacturer.
The company's 22,000 employees are guided by the vision to be "best in the
manner in which we operate best in the products we deliver and best in our value system
and ethics." Tata Motors helps its employees realize their potential through innovative
HR practices. The company's goal is to empower and provide employees with dynamic
career paths in congruence with corporate objectives. Regular in-house and external
training ensures all-round potential development and performance improvement.
The company has won several awards recognizing its training programs.
Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of
India. Over 4 million Tata vehicles ply on Indian roads, since the first rolled out in 1954.
The company's manufacturing base is spread across India - Jamshedpur (Jharkhand) in
the east, Pune (Maharashtra) in the west, and in the north in Lucknow (Uttar Pradesh) and
Pantnagar (Uttarakhand). A new plant is being set up in Singur (close to Kolkata in West
Bengal) to manufacture the company's small car. The nation-wide dealership, sales,
services and spare parts network comprises over 2,000 touch points. The company also
has a strong auto finance operation, TML Financial Services limited, supporting
customers to purchase Tata Motors vehicles. Tata Motors, the first company from India's
engineering sector to be listed in the New York Stock Exchange (September 2004), has
also emerged as an international automobile company. In 2004, it acquired the Daewoo
Commercial Vehicles Company, Korea's second largest truck maker. The rechristened
Tata Daewoo Commercial Vehicles Company has launched several new products in the
Korean market, while also exporting these products to several international markets.
Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata
Daewoo. In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputed
Spanish bus and coach manufacturer, with an option to acquire the remaining stake as
well. Hispano's presence is being expanded in other markets.
In 2006, it formed a joint venture with the Brazil-based Marcopolo, a global
leader in Body-building for buses and coaches to manufacture fully-built buses and
coaches for India and select international markets. Tata Motors also entered into a joint
venture in 2006 with Thonburi Automotive Assembly Plant Company of Thailand to

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manufacture and market the company's pickup vehicles in Thailand. In 2006, Tata Motors
and Fiat Auto formed an industrial joint venture at Ranjangaon (near Pune in
Maharashtra, India) to produce both Fiat and Tata cars and Fiat power trains for the
Indian and overseas markets; Tata Motors already distributes and markets Fiat branded
cars in India. In 2007, Tata Motors and Fiat Auto entered into an agreement for a Tata
license to build a pick-up vehicle bearing the Fiat nameplate at Fiat Group Automobiles'
Plant at Cordoba, Argentina. The pick-up will be sold in South and Central America and
select European markets.
These linkages will further extend Tata Motors' international footprint, established
through exports since 1961. While currently about 18% of its revenues are from
international business, the company's objective is to expand its international business,
both through organic and inorganic growth routes. The company's commercial and
passenger vehicles are already being marketed in several countries in Europe, Africa, the
Middle East, Australia, South East Asia and South Asia. It has assembly operations
In Malaysia, Kenya, Bangladesh, Ukraine, Russia and Senegal. The foundation of
the company’s growth is a deep understanding of economic stimuli and customer needs,
and the ability to translate them into customer-desired offerings through leading edge
R&D. The R&D establishment includes a team of 1400 scientists and engineers. The
company's Engineering Research Centre was established in 1966, and has facilities in
Pune, Jamshedpur and Lucknow. The ERC has enabled pioneering technologies and
products. It was Tata Motors, which developed the first indigenously developed Light
Commercial Vehicle, India's first Sports Utility Vehicle and, in 1998, the Tata Indica,
India's first fully indigenous passenger car. Within two years of launch, Tata Indica
became India's largest selling car in its segment. The ERC in Pune, among whose
facilities are India's only certified crash-test facility and hemi-anechoic chamber for
testing of noise and vibration, has received several awards from the Government of India.
Some of the more prominent amongst them are the National Award for Research and
Development Efforts in Industry in the Mechanical Engineering Industries sector in 1999,
the National Award for Successful Commercialization of Indigenous Technology by an
Industrial Concern in 2000, and the CSIR Diamond Jubilee Technology Award in 2004.
The company set up the Tata Motors European Technical Centre (TMETC) in
2005 in the UK. TMETC is engaged in design engineering and development of products,
supporting Tata Motors' skill sets. Tata Daewoo Commercial Vehicle Company and

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Hispano Carrocera also have R&D establishments at Gunsan in South Korea and
Zaragoza in Spain. The pace of new product development has quickened through an
organization-wide structured New Product Introduction (NPI) process. The process with
its formal structure for introducing new vehicles in the market brings in greater discipline
in project execution.
The NPI process helped Tata Motors create a new segment, in 2005, by launching
the Tata Ace, India’s first indigenously developed mini-truck. The years to come will see
the introduction of several other innovative vehicles, all rooted in emerging customer
needs. Besides product development, R&D is also focusing on environment-friendly
technologies in emissions and alternative fuels.
Through its subsidiaries, the company is engaged in engineering and automotive
solutions, construction equipment manufacturing, automotive vehicle components
manufacturing and supply chain activities, machine tools and factory automation
solutions, high-precision tooling and plastic and electronic components for automotive
and computer applications, and automotive retailing and service operations.
True to the tradition of the Tata Group, Tata Motors is committed in letter and
spirit to Corporate Social Responsibility. It is a signatory to the United Nations Global
Compact, and is engaged in community and social initiatives on labor and environment
standards in compliance with the principles of the Global Compact. In accordance with
this, it plays an active role in community development, serving rural communities
adjacent to its manufacturing locations.
With the foundation of its rich heritage, Tata Motors today is etching a refulgent
future.

CHAIRMAN’S PROFILE

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Mr. Ratan N Tata (Chairman)

Heading the Tata Group since 1991, Ratan N Tata is the Chairman of Tata Sons,
holding company of the Tata Group, and major Group companies including, Tata Motors,
Tata Steel, Tata Consultancy Services, Tata Power, Tata Tea, Tata Chemicals, Indian
Hotels, Tata Teleservices and Tata Auto Comp. He is also Chairman of two of the largest
private sector promoted philanthropic trusts in India. During his tenure, the Group has
further expanded its global reach, with its revenues growing over six fold to Rs 97,000
crore ($21.9 billion).

Mr. Tata joined the Tata Group in December 1962. After serving in various
companies, he was appointed the Director-in-Charge of The National Radio & Heading the
Tata Group since 1991, Ratan N Tata is the Chairman of Tata Sons, holding company of
the Tata Group, and major Group companies including, Tata Motors, Tata Steel, Tata
Consultancy Services, Tata Power, Tata Tea, Tata Chemicals, Indian Hotels, Tata
Teleservices and Tata Auto Comp. He is also Chairman of two of the largest private sector
promoted philanthropic trusts in India. During his tenure, the Group has further expanded
its global reach, with its revenues growing over six fold to Rs. 97,000 crore ($21.9 billion).
Mr. Tata joined the Tata Group in December 1962. After serving in various companies, he
was appointed the Director-in-Charge of the National Radio & Electronics Company
Limited (Nelco) in 1971. In 1981, he was named Chairman of Tata Industries, the Group's

other holding company, where he was responsible for transforming it into the Group's
strategy think-tank and a promoter of new ventures in high-technology businesses.

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He is associated with various organizations in India and abroad in varying capacities, some
of which are:
• Chairman, government of India's Investment Commission
• Member, Prime Minister's Council on Trade and Industry
• Member, National Hydrogen Energy Board
Member, National Manufacturing Competitiveness
• Competitiveness Council
• Serving on the International Investment Council set up by the president of the
Republic of South Africa
• Serving the International Business Advisory Council of the British government to
advise the chancellor of the exchequer
• Member, International Advisory Council of Singapore's Economic Development
Board
• Member, Asia-Pacific Advisory Committee to the board of directors of the New
York Stock Exchange
Member, international advisory boards of the Mitsubishi Corporation, the American
International
• Group and JP Morgan Chase
• President, court of the Indian Institute of Science, Bangalore
• Chairman, council of management, Tata Institute of Fundamental Research,
Mumbai
• Member, board of trustees of the Rand Corporation, Cornell University and
University of Southern California, and the Foundation Board of the Ohio State
University
• Chair, advisory board of RAND's Center for Asia Pacific Policy
• Member, Global Business Council on HIV / AIDS and the programme board of the
Bill & Melinda Gates Foundation's India AIDS initiative

Mr. Tata received a Bachelor of Science degree in architecture from Cornell University
in 1962. He worked briefly with Jones and Emmons in Los Angeles, California, before

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returning to India in late 1962. He completed the Advanced Management Program at
Harvard Business School in 1975.
The Government of India honored Mr. Tata with one of its highest civilian awards, the
Padma Bhushan, on Republic Day, January 26, 2000. He has also been conferred an
honorary doctorate in business administration by the Ohio State University, an honorary
doctorate in technology by the Asian Institute of Technology, Bangkok, and honorary
doctorate in science by the University of Warwick.

Various Products by Tata Motors Ltd.

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[1] Passenger cars and utility vehicles

Tata Indigo SW

o Tata Sierra
o Tata Estate
o Tata Sumo/ Spacio
o Tata Safari
o Tata Indica
o Tata Indigo
o Tata Indigo Marina
o Tata Winger
o Tata Nano (3RD March 2009)
o Tata Xenon XT
o Tata Xover (2009)

[2] Concept vehicles

o Tata Cliffrider
o 2000 Aria Roadster
o 2001 Aria Coupe
o 2002 Tata Indica
o 2002 Tata Indiva
o 2004 Tata Indigo Advent
o 2005 Tata Xover
o 2006 Tata Cliffrider
o 2007 Tata Elegante
o 2009 Tata Prima

[3] Commercial vehicles

Tata 1616 Starbus

Tata Marcopolo Buses in the Delhi BRT .

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Tata Star Bus in Nagpur, Maharashtra. Tata Low Floor Buses are also used by
administrations in Delhi, Mumbai, Pune, Udaipur and Indore
o Tata Ace
o Tata TL/ Telcoline /207 DI Pickup Truck
o Tata 407 Ex and Ex2
o Tata 709 Ex
o Tata 809 Ex and Ex2
o Tata 909 Ex and Ex2
o Tata 1109 (Intermediate truck)
o Tata 1510/1512 (Medium bus)
o Tata 1610/1616 (Heavy bus)
o Tata 1613/1615 (Medium truck)
o Tata 2515/2516 (Medium truck)
o Tata Starbus (Medium Bus)
o Tata Globus (Low Floor Bus)
o Tata Marcopolo Bus (Low Floor Bus)
o Tata 3015 (Heavy truck)
o Tata 3118 (Heavy truck) (8X2)
o Tata 3516 (Heavy truck)
o Tata 4923 (Ultra-Heavy truck) (6X4)
o Tata Novus (Heavy truck designed by Tata Daewoo)

[4] Military vehicles

o Tata LSV (Light Specialist Vehicle)


o Tata 2 Stretcher Ambulance
o Tata 407 Troop Carrier, available in hard top, soft top, 4x4, and 4x2 versions
o Tata LPTA 713 TC (4x4)
o Tata LPT 709 E
o Tata SD 1015 TC (4x4)
o Tata LPTA 1615 TC (4x4)
o Tata LPTA 1621 TC (6x6)
o Tata LPTA 1615 T

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Introduction to TATA NANO

“Dream-dream and dream, because dream gives vision, vision gives


thoughts and finally thoughts lead to the action". Each letter of these motivational
words said by India's former President Dr. A.P.J. Abdul Kalam goes exactly with Mr.
Ratan Tata, Chairman of Tata group, who in the year 2003, dreamt of producing a safe,
affordable Car for the common man. Finally after the wait of five years, crossing all
financial and technological barriers, Ratan Tata kept his promise and unveiled Tata 'Nano'
on 10th January 2007, at the 9th Auto Expo 2008 in New Delhi. Tata Nano, cool & smart,
launched by Tata Motors is world's cheapest Car with a price tag of $ 2500.

The Tata Nano is a proposed city car debuted by India's Tata Motors at the 9th
annual Auto Expo on January 10, 2008 at Pragati Maidan in New Delhi, India. Called the
people’s car in Tata's promotional material, it was projected to be the least expensive
production car in the world. The standard version of the Nano is projected to sell for Rs.
100,000 (approximately US $2500, GBP 1277, or € 1700) , not including fees or delivery.
Newsweek identifies the Nano as a part of a "new breed of 21st-century cars" that embody

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"a contrarian philosophy of smaller, lighter, and cheaper" and portend a new era in
inexpensive personal transportation —
and potentially, "global gridlock". The Wall Street Journal confirms a global trend toward
small cars, led by the Nano.
The prefix "Nano" derives from the Greek root 'Nanos', meaning dwarf — as with
nanometer. "Nano" also means "small" in Gujarati, the native language of the Tata family,
and founders of the Tata Group.

History and conception


The project to create a 1 lakh (1 lakh = 100000 rupees) car began in 2003, under
the Chairman of Tata Motors, Ratan Tata. The strategy behind the project was the
awareness of the number of Indian families who had two wheeled transport, but couldn't
afford a four wheel car, and was based on the company's success in producing the low cost
4 wheeled Ace truck in May 2005. The Nano was unveiled at the 2008 New Delhi
Auto Expo.
Industry convention was that a reliable car couldn't be made at such a low price, so
initial media speculation was that the car would be a simple four-wheeled auto rickshaw.
However, The Times of India reported that the vehicle is "a properly designed and built
car". The Chairman is reported to have said, "It is not a car with plastic curtains or no roof
— it's a real car." During development the company reinvented and minimized the
manufacturing process, brought in innovative product design, and asked component
manufacturers to look at current work and design approaches in a different perspective to
produce logical and simple solutions. The car was designed at Italy's Institute of
Development in Automotive Engineering, with Ratan Tata ordering certain changes during
the process, such as reducing the number of windscreen wipers from two to one.

Financial projection
Tata initially targeted the vehicle as "the least expensive production car in the world" —
aiming for a starting price of 100,000 rupees or approximately $2300 US despite rapidly
rising material prices. Tata Motors has been able to cut down the cost of the car by making
things smaller and lighter, doing away with superficial parts and changing material

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wherever possible. Tata Motors Company had received many enquiries through the
Internet for the Nano.
Tata Motors intends to open bookings for the car three months from now. Tata
Motors plans to produce 2,50,000 Tata Nano Cars in the first phase and add 1,00,000 in the
second phase, taking the total production capacity to 3,50,000 cars probably by the end the
next financial year as of August, 2008 material costs have risen from 13% to 23% over the
car’s development, and Tata now faces the choice of introducing the car with an artificially
low introductory price, raising the price of the car, or foregoing profit on the car — the
latter an unlikely proposition., while an increased price on the Nano will likely decrease
demand.

Technical overview

Design

The People’s Car, designed with a family in mind, has a roomy passenger
compartment with generous leg space and head room. It can comfortably seat four persons.
Four doors with high seating position make ingress and egress easy. Yet with a length of
3.1 meters, width of 1.5 meters and height of 1.6 meters, with adequate ground clearance,
it can effortlessly maneuver on busy roads in cities as well as in rural areas. Its mono-
volume design, with wheels at the corners and the power train at the rear, enables it to
uniquely combine both space and maneuverability, which will set a new benchmark among
small.

Engine

Unlike other low cost Indian cars, this one is going to have a variomatic gear
system. Instead of manual gear box in conventional cars it is coming up as gear less or
rather with an automatic gear transmission. This helps to improve the efficiency & mileage
by magnifying the torque output. As in international markets, the compact car from Tata
will have back mounted engine, pushing the luggage space to the front. Making the engine
closer to the fuel tank has another advantage of increased fuel efficiency. Rear mounted
engine also help in reducing the power loss during transmission. The car will have front

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disk and rear drum brakes. The comp claims mileage of 22 kmpl in city and 26 kmpl on
highway.

Fuel Efficiency

The People’s Car has a rear-wheel drive, all-aluminum, two-cylinder, 623 cc, 33 PS, Multi
point fuel injection petrol engine. This is the first time that a two-cylinder gasoline engine

is being used in a car with single balancer shaft. The lean design strategy has helped
minimize weight, which helps maximize performance per unit of energy consumed and
delivers high fuel efficiency. Performance is controlled by a specially designed electronic
engine management system.

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Safety & Comfort
By adhering to the fact that less weight requires less power, the 1 lakh car is made
of light weighing steel. This has made the Tatas come up with a cheap alternative with out
compromising on safety and performance. The base model will feature glass windows that
can be cranked up. The tail lights are expected to appear like as in Tata Indica. Higher
versions will have the comforts of power steering, power windows, air-conditioning and
much more. With an all sheet-metal body, it has a strong passenger compartment, with
safety features such as crumple zones, intrusion-resistant doors, seat belts, strong seats and
anchorages, and the rear tailgate glass bonded to the body. Tubeless tyres further enhance
safety. It exceeds current regulatory requirements with a strong passenger compartment,
crumple zones, intrusion resistant doors, seat belts, strong seats.

Cost cutting features


• The Nano's dickey (boot/trunk) does not open. Instead, the rear seats can be folded

down to access the dickey.

• It has a single windscreen wiper instead of the usual pair.

• It has no power steering.

• In Base model it has three lug nuts on the wheels instead of four.

• It has only one side view mirror.

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Controversies Involved
Controversies also arose about Tata's planned manufacturing unit for the car in
Singur, West Bengal, where the state government of West Bengal has allocated 997 acres
(4.03km²) to Tata Motors. The construction of the car factory on that tract of land will
require fertile agricultural land and
the expropriation and eviction of ca. 15,000
peasants and agricultural workers.
The affected farmers fear they will receive
inadequate or no compensation and
therefore lose their livelihoods. Activists
near Kolkata, where Tata's manufacturing
unit is located, started burning the car in effigy. In New Delhi, a group of six women
protested wearing T-shirts bearing slogans that said, "The Rs 1 lakh car has Singur people's
blood on it." The Trinamool Congress alleged that Tata motors usurped the agrarian land
for the construction site and has threatened to stall the manufacture of the car. The 11 cases
were dismissed.
The Nano is alleged to have severely affected the used car market in India, as many
Indians opt to wait for the Nano's release rather than buying used cars, such as the Maruti
800 (a rebadged Suzuki Alto), which is considered as the Nano's nearest competitor. Sales
of new Maruti 800s have dropped by 20%, and used ones by 30% following the unveiling
of the Nano.
It will be a tragedy if such a mega investment and employee generating project by
one of India’s most respected company is lost to West Bengal on account of a failure of
communication among its stakeholders. It’s time that we as a nation begin to think of such
projects as national projects and not become captive to immediate impulses. There cannot
be and must never be any contradiction between industrialization and welfare of farmers.
In a democracy, the sensitivity of all stakeholders has to be addressed and in the
context of land acquisition controversies, the new law of land acquisition and
rehabilitation, proposed by the UPA government, is the way forward. If the Tata withdraws
from the Nano project in West Bengal, investors’ sentiments will be hurt, and the only way
for the company to move forward is for all concerned to ensure a political atmosphere
conducive for investment. The Nano has 34 patents on the car’s design itself, which is a

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cause for national celebration as it represents a major technological and manufacturing feat
in the automotive sector. All projects of technological excellence and originality that give
India a special place in innovation and unique competitive advantage, should be treated as
national projects. The state government should ensure the farmers are justly compensated
in terms of price for their land and employee opportunities in the car project through
suitable policy initiative. Democratic government is all about dialogue and moderation,
and we hope that the West Bengal government will initiate purposive dialogue with all
concerned. After all, his unfortunate controversy must be resolved to the satisfaction of all
stakeholders through dialogue alone.

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Latest At Singur

In Tata Motors long-term interests Singur has become a flash point and a hot bed
for political activity. The average Indian will however be synonymous with Singur as the
chief production facility of the World’s cheapest car. The much talked about 1 lakh
people’s car or the Nano. This statement is the first clear indication by Ratan Tata that he
isn’t interested in dealing with the violent politics of Singur. Ratan Tata is not the type of
man who uses the media to play around which means that today’s statement is a forecast of
what will happen unless things change at ground zero in Singur.
Despite Tata’s confidence that they are capable of rolling out the Nano by October,
future production will be hampered if they are forced to shift their project elsewhere.
Singur has become a political issue between the government and the opposition over the
government’s ‘capture’ of Farmer agricultural land. While the opposition alleges that some
land has been forcefully acquired, while for some adequate compensation has not been
paid; the important fact remains that violent methods are being used to deal with the
situation.
Farmers protesting the Tata plant have resorted to beating up the staff of the Singur
plant. Serious bodily damage has been inflicted on the staff and family members of Tata
Motors at Singur. This has been the main reason why Tata might very well pull out of
Singur. For the state housing the Nano project, things are serious for West Bengal. The
Nano project at Singur has put in around 1500 crores and will pump in even more once
serious production begins.
For a state that is in need of heavy investment, a fiasco like this will set a
dangerous precedent and deter future investments by corporate in India and the World.
Tata Motors if booted out of Singur might make their way to the state of Uttar Pradesh.
Even Uttaranchal and Arunachal Pradesh with their lenient tax structures could be unlikely
gainers. There are also the special economic zones of Gujarat and Karnataka that hold
promise. If Tata decide to move, investors can take heart from the fact that despite delayed
production and eventually sales, the Nano will still find takers.

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Environmental Impact

In India, a car like this can crowd the streets, forcing the government to improve
infrastructure - and as the evolution of the Western industrial society demonstrates,
affordable cars can be a major force for change. But till that happens, this is a car that can
seriously crowd the streets - and make life a bit tougher in the short-term. The car will
have a two-cylinder 624-cc petrol engine with 33 bhp of power.
It will also have a 30-litre fuel tank and four-speed manual gearshift. The car will
come with air conditioning in the deluxe version, but will have no power steering. I know,
that's pathetic power by American and Western standards. But Indian maximum legal
speeds are way lower than them - and Tata Motors anyway claims that the car is as fast as
the Maruti 800, India's original People's Car that changed things a couple decades back.
And there are a million or more of them on the streets of India already. The car will have
front disk and rear drum brakes. The company claims mileage of 22 kmpl in city and 26
kmpl on highway.
The $ 2500 is the dealer price - the actual price on the road might be approx Rs.
$3000. The car would be commercially launched in the second half of 2008 and would be
produced at the Singur plant in West Bengal.
The car launched is being avidly watched by the auto industry around the world.
As attractive as the Nano is on the outside, the same cannot be said for the interior. The
plastics feel cheap and it is here that you begin to feel the concern towards the price that
Tata was aiming at. The rudimentary knobs and switches point towards the use of
materials, which would be better off in tractors twenty years old! Dreary and uninspiring
by any measure, that’s what one can say about the interior quality and looks. What
impressed me though was the layout. Spacious and functional, the dashboard has a curved
look, which can prove beneficial when it comes to storing items. The Chevy Spark started
it for the small cars and the Nano continues on what seems to be the current trend. The
instrument binnacle is mid-mounted and the center console has a swooping form which
houses all the important knobs and air con vents. Speakers for the audio system have been
incorporated on the rear bench just under the seat area.
The speed is calibrated to a top whack of 120kmph though we shall reserve our statements
on that till we test the car thoroughly. Cash saving activity has gone a bit too far with the
26
sun visor, there’s only one! Please Tata, please, have mercy on the people who will sit on
the passenger seat, only to find no sun visor to protect their skin from sun or no vanity
mirror for women (men too, going by the current fashion!) to put the make-up on. The
center console, forming a crest in the middle of the dash, can be worrisome if you happen
to be as tall as Rajpal Yadav. The seats have integrated head restraints, like in the hugely
popular, Hyundai i10. Yes the Nano will be deprived of a lot of creature comforts but to
satisfy your salivating mouth, Tata will offer the top end version with air con, power
windows and power steering. This car is destined to be exported too, so provision for ABS
and airbags will also be there for sure. The floor mounted four-speed gearbox wasn’t
smooth as silk but would give the 800 something to take inspiration from. Roominess is
what this compact car from Tata is all about. Four average sized Indians will find
themselves enjoying their ride.

27
THE PEOPLE'S CAR

Tata Motors' plans would produce, in real terms, by far the cheapest car ever
made. An Indian car may soon earn a parking place in history alongside Ford's Model T,
Volkswagen's Beetle and the British Motor Corp.'s Mini, all of which put a set of wheels
within reach of millions of customers after they rolled onto the scene. Tata Motors is
developing a car it aims to sell for about $2,500 the cheapest, by far ever made.
# Source :(NYSE: TTM - news - people)

There is a lot riding on its small wheels. If the yet-to-be-named car is a success
when it goes on sale next year, it would herald the emergence of Tata Motors on the global

auto scene, mark the advent of India as a global center for small-car production and
represent a victory for those who advocate making cheap goods for potential customers at
the "bottom of the pyramid" in emerging markets. Most of all, it would give millions of
people now relegated to lesser means of transportation the chance to drive cars.
It is a hugely ambitious project rivals have called it impossible for any company. But it is
audacious for one that hadn’t even built cars a decade ago.

28
For decades Tata Motors has been India's largest commercial vehicle maker the
Tata logo appears on buses, dump trucks, ambulances and cement mixers. Sturdy as
elephants, they are a fixture of the Indian landscape. Owners inevitably paint the exteriors
in a cheerful riot of bright red, green, orange, blue and yellow and line the un-air-
conditioned cabs with teakwood to keep them cooler in India's searing heat.
However ubiquitous, Tata's trucks faced a problem after the Indian government
began reforms that opened the Indian economy in 1991: the huge cyclical swings in
demand typical for commercial vehicles. To diversify, Tata would enter, at great expense,
the less
volatile passenger car market.
Before the reforms Indian customers had so few choices that Tata was sheltered.
When demand tailed off it just worked down a waiting list, and there was never a need to
concern itself with customer desires. Sure enough, after the economy slumped in the late
1990s just when expenses for developing the passenger car hit home Tata truck and bus
sales plunged by 40% and Tata Motors lost $110 million in fiscal 2000. It was the first red
ink seen since 1945, when the company was founded to make locomotives. Executives
were stunned. "It was corporate India's biggest loss," says Ravi Kant, managing director of
Tata Motors. "The crisis changed us. We told ourselves, 'Never again.'"
But Tata Motors, part of India's largest conglomerate, first had to reset its ways.
Like many Indian companies protected for decades from foreign competition, Tata had
gotten
to 2000 still fat and slow.
Change started with a spring 2000 meeting at the Lake house, a bungalow across
the street from the company's main factory in Pune, a three-hour drive east of Mumbai.
Kant, then in charge of the commercial vehicle division, needed fresh ideas instead of rigid
resistance, so in an experiment, he called a meeting of 20 of his most promising young
Managers all under 35 years old.

29
TATA NANO - THE LITTLE CAR THAT MIGHT CHANGE
THE WORLD

Tata Nano

Manufacturer Tata Motors


Also called The People's Car
Production 2008 — present
Assembly Singur, West Bengal
Predecessor None
Class City car
Body style(s) 4-door kei car
Layout RR layout
Engine(s) 2 cylinder petrol Bosch multi-point fuel injection
(single injector) all aluminum 623 cc (38 cu in)
Transmission(s) 4 speed synchromesh with overdrive in 4th
Wheelbase 2,230 mm (87.8 in)
Length 3100 mm (122 in)[1]
Width 1500 mm (59.1 in)[1]
Height 1600 mm (63 in)[1]
Curb weight 580 kg (1,300 lb)-600 kg (1,300 lb)[2]
Fuel capacity 15 L (4 US gal/3 imp gal)[2]
Designer Justin Norek

30

How will this car change India and other Developing countries?
• It will help India's huge two wheeler popular upgrade to a four-wheeler
• Very affordable - priced a bit higher 2 125cc motorcycles in India
• If popular, will clog roads in the cities
• Establish a huge volume market that cannot be ignored by any large car
manufacturer
• 40 patents by Tata Motors during development
Here are the pictures from the unveiling of the Tata Motors' small car to be sold at
a price of US $ 2500 approx. (Rs. 1 lakh.). The Tata Nano was unveiled at the 9th Auto
Expo in New Delhi, India.
The world's car manufacturers have expressed all shades of opinion in the run-up to
the Tata Nano. Suzuki has said that it is impossible V W said it is not what they want to
do. DaimlerChrysler said they think it is an important market Tata is trying to tap.
There was no way Tata could design a car the conventional way. So went at it on a clean
slate. And seems to have pulled it off. The rear engined car will have a small boot for

31
luggage storage in the front. In the process of developing the Nano, Tata Motors has added
40 patents to its kitty.
This car, if it becomes a hit, will make every auto company change the way it works
and look at the volume market. Not only in India, but in entire Asia and every third
world country. Offering mobility for the masses is big business. The VW Beetle did that,
and so did Henry Ford.

Marketing Mix Strategies

1. Product Strategies
The product strategy, which will be adapted, would be the straight product
extension, which is marketing the car in another foreign market without any change. This is
because there would be no additional product development cost, manufacturing changes, or
new promotion.

1.1 Product Reviews

There are three variants in the Nano range: Nano, Nano CX and Nano LX. The features of
the car are as follows:
a) Stylish and comfortable-

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The People’s Car, designed with a family in mind, has a roomy passenger compartment
with generous leg space and head room. It can comfortably sit four persons. Four doors
with high seating position make ingress and egress easy. Its mono-volume design, with
wheels at the corners and the power train at the rear, enables it to uniquely combine both
space and maneuverability, which will set a benchmark among small cars.
b) Fuel-efficient engine-
The People’s Car has a rear-wheel drive, all aluminum, two-cylinder, 523 cc, 33 PS, multi
point fuel injection petrol engine. This is the first time that a two-cylinder gasoline engine
is being used in a car with a single balancer shaft. The lean design strategy has helped
minimize weight, which helps maximize performance per unit of energy consumed and
delivers high fuel efficiency. Performance is controlled by a specially designed electronic
engine management system.

c) Meets all safety requirements-


The People’s Car ’s safety performance exceeds current regulatory requirements. With an
all sheet-metal body, it has a strong passenger compartment, with safety features such a s
all sheet-metal body, it has a strong passenger compartment, with safety features such a s
crumple zones, intrusion-resistant doors, seats belts, strong seats and anchorages, and the
rear tailgate glass bonded to the body. Tubeless tyres further enhance safety.

d) Environment-friendly
The People’s Car’s tailpipe emission performance exceeds regulatory requirements. In
terms of overall pollutants, it has a lower pollution level than two-wheelers being
manufactured in Malaysia today. The high efficiency also ensures that the car has low
carbon dioxide emissions, thereby providing the twin benefits of an affordable
transportation solution with a low carbon footprint.

1.2 Branding
Brands identify the source or maker of a product and allow consumers – either
individuals or organizations to assign responsibility for its performance to a
particular manufacturer or distributor. Branding is endowing products and services with the
power of a brand. It’s all about creating differences between products. For
branding strategies to be successful and brand value to be created, consumers must be

33
convinced there are meaningful differences among brands in the product or service
category. In Tata Nano’s case, the branding strategy used is corporate name combined with
individual product names. This company’s name legitimizes and the individual name
individualizes the new product

1.3 Product Strategy

The Tata Nano CX, including all the features described in the earlier Product Review
section, will be sold with a three-year warranty or 100,000km warranty, whichever comes
first. We will introduce the Tata Nano LX during the following year, after we have
established our Tata brand. The brand and logo will be displayed on the car as well as in all
marketing campaigns.

2. Pricing Strategies

The Cost price is an estimated USD2, 420, which includes import tax, duties excise, sales
tax, shipment costs and assembly cost. The selling price for the Malaysian market is RM
13,704.00, which is inclusive of standard accessories, but exclude road tax(RM
70.00), registration fees (RM 150.00), number plate (RM 50.00) and ownership
endorsement fee (RM 50.00), sales tax (RM 1370.40) which amounted to RM 320.00. The
On-The-Road price will be RM 15797.40.These prices reflect a strategy of taking
a share from established competitors, such as Perodua’ s model of Kancil and Viva.

2.1 Setting the price – selecting price objectives

Tata Nano Malaysia (TNM) has set major three objectives in its effort to position itself in
the Malaysia Automotive market. The objectives are: Survival, maximum current
profit and maximum market share.

34
a. Survival

Intense competition from Malaysia’s second car manufacturer, Perodua for a share of the
automotive market segment for the below 1,000 cc category will spur TNM to ensure that
the car price covers variable costs and some fixed costs. In this case, survival is a short term
objective as in the long run, TNM will add value such as added safety features to the Nano
range.

b. Maximum current profit

TNM has set a price that will maximize current profits, cash flow and return
on investment, after taking into consideration the demand and costs involved. As
this category of small foreign cars segment has not been really tested by other
manufacturers, therefore the demand is rather difficult to estimate but TNM is
confident of a good response towards its entry into the Malaysian market.

c. Maximum Market Share

TNM will implement the market-penetration pricing, which is to set a low price for a new
car in order to attract a large number of buyers and a large market share. This will be done
by achieving high sales volume, which will results in falling costs, allowing the company to
cut its price even further. We are positive enough that the Malaysia car market is highly
price sensitive, as a low price produces more market growth. TNM is also confident that
production and distribution costs will fall as sales volume increases and the low price of
Nano cars will help to keep out competition and maintain its low-price position. The
low-price entry will provide People consumers with a viable alternative to Perdue –
Malaysia second National car. Further liberalization is expected as Malaysia
implements the ASEAN Free Trade Area agreement, which commits the Malaysia
Government to scrap foreign car taxes.

35
3. Promotion Strategies

3.1 Objectives of Promotion Strategies

Before determine the promotion strategies, we need to very clear about what are the
objectives we need to achieve. We know as above, our missions are to promote Tata Nano
in Malaysia and increase the sales quarterly. Tata Nano is very new for Malaysian; they feel
fresh with this new brand and concept of this car. Tata Nano will get into Malaysia market
in July2009.
So first of the objective for promotion strategies are aims to create brand
awareness and concept/knowledge of this new car – Tata Nano. This is the cheapest car in
the world and burst into the worldwide market in the short time. But still is the new brand
for the People, so we do the advertisement and organize the event or campaign in sufficient
detail to establish the good brand attitudes. Brand awareness is important to provide a
foundation for brand equity. After that, our second objective is knowledge and
persuasive. We aim to create liking, preference, conviction, and purchase of a Tata

36
Nano car. We can do the comparison with other cars that have higher purchase price and
this price is not every people will be affordable especially lower income families and
students. Beside that we will convince current purchasers that we will give the potential
customer to enjoying the good experience with Tata Nano by give try to drive the Tata
Nano before buying the car. And also will provide them warranty to the Tata Nano.
We will organize all the promotion strategies with lower cost to maintain the lower
purchase price for the Tata Nano in Malaysia.

3.2 Promotion Tag line

“Have Fun, Pay less and get more with Tata Nano”

Why Tata establish this tag line? Because this makes people too easy to remembered
Tata Nano and feel happy all the ways with Tata Nano. Tata Nano is safety and you can
travel everywhere by Tata Nano with your family or friends with fun, but you just need to
pay all of this at lower price –Pay Less & Get More.
Beside that we can enjoy special fun with Tata Nano; our earth also will feel happy
with Tata Nano because Tata Nano also is the environment friendly car.
3.3 Advertising Program

Tata aims to inform people this is the cheapest car in the world and persuade
people to buy Tata Nano due to this car is safety, useful, all in good quality and
also environment friendly by developing an advertising program.

3.3.1 Online Advertisement

First step we start before lunching Tata Nano, we do the online advertisement. Tata
Nano created a Website – www.tatanano.com– on March 2009 to better communicate
with the customers. In the Web site, we posted the photo categories and videos to provide
customers the information and special features of Tata Nano and bring them inside the
company. In addition to photos and videos, the web site links to recent news about
Tata Nano and space for public feedback.
Besides that, blogs have become an important outlet for word of mouth that is
regularly updated online diaries. Blogs are bringing together people with common interests.
They vary wide and can influence a vast audience due to many Internet users have read
37
Blogs. We can establish the blog network and carefully monitoring to find out what’s on
people's minds especially the potential customers. This is a cheapest and good way to build
up brand awareness.

3.3.2 Television Advertisement

Television advertisement is very expensive but this is the most powerful to perform
the Tata Nano to the public by demonstrating Tata Nano attributes and persuasively
explaining their corresponding consumer benefits. By lower advertising budget, we
cannot do the TV advertisement in whole day, so we just choose the prime time
(7pm – 11pm) to place the advertisement. By properly designed and executed TV
advertisement can improve brand equity and affect sales and profits.

3.3.3 Radio Advertisement

Most of the People listen to the radio daily. Now a day have many facilities such as
MP3, hand phone and so on, is convenience for the people to listen the radio
anytime at anywhere, This is a cheap and pervasive medium for us to create the
brand awareness by repeatedly listen the advertisement and the brand name. Advantages
of the radio advertisement are flexibility, quick response and also more effective media for
reaching teens.

3.3.4 Newspaper Advertisement

Beside that the radio, most of the People also will saw a newspaper everyday. So
this is good market coverage. From here, Tata Nano can get the broad acceptance
and good reputation from customers. Newspaper advertising is inexpensive.

3.4 Marketing Campaign: This Marketing campaign is base on every four month:

3.4.1 Marketing Campaign for July 2009 to October 2009

Launching program also is one of the promotion strategies to build awareness,


through launching at public center Tata Motor will introduce the Tata Nano to market. In
July and August, we focus on marketing campaign which will take place at all the IPTA and
IPTS which have organize the convocation, by providing product display and banner; and
the peoples can have the experience with Tata Nano by provide the opportunities to drive
38
Tata Nano around the campus. Theme for this campaign is 'Good future with Tata Nano'.
Reason for this marketing campaign is one of our targets are students such as fresh graduate
who just get the new job and also the international students. Fresh graduate need the
transportation in their working life but they can't afford to buy the too expensive car;
international student just need the car which is economy and using it in short period around
2-3years for their student life in Malaysia. This is cheapest cost by event or campaign in
the campus.
In September and October, People will celebrate two big festivals together, there are Hari
Raya Puasa Aidifitri and Deepavali. So we can focus on lower income group with
family especially those are come from Indian family. Use the mail, telephone, fax, e- mail
to communicate directly with them. Base on historical, more of the Malay or Indian will
buy the car before festival. 'Raya with Tata Nano' can be the theme for our campaign at
this period, and promote them Tata Nano is cheapest and safety.

3.4.2 Marketing Campaign for November 2009 to February 2009

In November and December, Malaysia have the Mega Sales due to Merry
Christmas and New Year in the end of the year at whole Malaysia so that have many people
will go to shopping. We can organize the event at shopping centers in Malaysia such as
KLCC, Midvalley, Berjaya Times Square, and Sungai Wang by providing product display
and banner.
On January and February, most of the employees in Malaysia will get the bonus in
this period so the purchasing power will increase. Beside that Chinese New Year is at
February. Send the brochures to the small and medium company or office and do the
introduction or briefing to them. Follow by mail, telephone, fax or e-mail to developing
effective communication.

3.4.3 Marketing Campaign for March 2009 to June 2009

We will do the road show at every state (whole Malaysia). We can have the road
show at the center market such as all market at all the state. Have many people will go to
market early morning to buy the vegetable, take the breakfast or buy the necessary things.

39
Most of them are women or housewife who may be come from the lower or medium
income family. Some of them go to Pasar by motorcycle or by bus. There are our target
markets. We can promote Tata Nano to them such as, Tata Nano is the cheapest car in the
world, Get the Tata Nano to be second car for their family member especially for their
children or elder parent, 'Easy life with Tata Nano'. Housewife or mother can go to Pasar
or anywhere by Tata Nano better than motorcycle or by bus for complete their daily matter
more effectively. When the women get the news, they will pass this news to their friend
immediately. This will help us to promote Tata Nano effectively in the local society. At the
road show, people also can get the experience with Tata Nano by have the opportunities to
drive the Tata Nano car before purchase it.

3.5 Channel of Distribution Strategies

3.5.1 Direct marketing channel (zero-level channel)

Manufacturer Customers
We perform the Tata Nano in Malaysia by selling it directly to customers. Customers can
deal directly with our dealers and make the booking for Tata Nano by visit our sales office
or at any special event/campaign. Besides that, customers also can get the information or
make the booking via the telephone (1-800-88-nano) and through the Internet
(www.tatanano.com). By this way we can save more cost and maintain the cheapest
purchasing price rather than through retailers or resellers.

3.5.2 Physical Flow

Assembly Workshop
Tata Motor at India Transporters,
Warehouses
At Malaysia Customers
Tata Nano will send the paths to the Malaysia after received the order from the sales
office. After that, we will assemble a car at the workshop. Finally, send to the
customers directly. From here, we can often provide faster delivery to customers
because we are closer to the customers.

3.5.3 Payment Flow

40
Tata Motor at India Sale Office
Banks
Banks Customers
At Malaysia
Customers can paying bills by cash or do the financing from bank. Customers pay less by
this diagram due to not need to pay extra commission to third party such as wholesalers
or retailers. Tata Motor also can collect the payment more efficient.

3.5.4 Information Flow

Tata Motor at India Sale Office


At Malaysia Customers
Customers can get the information directly from Tata Motor such as new product, price
development and so on. Tata Motor can more understanding customer’s needs when
receiving customers, response calls and mailings or through Internet blog. If customers
have any need or complaint, we can satisfy them immediately by deal with customers
directly.

3.5.5 Promotion Flow

Marketing Campaign/Event
Tata Motor at India Sale Office
Media
Customers
At Malaysia

Have two ways of promotion flow, directly and indirectly. Directly is we’ll organize the
marketing campaign, event and road show. By this way, we’ll promote Tata Nano to target
market by face by face and provide the opportunities to them try to drive the Tata Nano.
Indirect ways are we will do the advertisement through media such as Internet, TV, radio
and also newspaper. By this promotion flow, Tata Motor aims to create brand awareness
and increase the sales in the
Malaysia.

41
4. Financial Plan
This section will offer the overview of Tata Nano related marketing activities. It is
include, sale forecast, expense forecast, break even analysis and how those relate to the
market strategy.

4.1 Break even analysis

Break even analysis indicates that 3369 unit or $ 46,168,776 will be required in
monthly sales revenue to reach the break even point.

Table: Break Even Analysis


Monthly unit break even 3369
Monthly sales break even $46,168,776
Monthly unit production 6083
Average per unit revenue $13704
Average per unit variable cost $8,954
Average per unit fixed cost $2630.28
Estimated monthly fixed cost $16,000,000

4.2 Sales forecast


Sale was forecasted quarterly basis, with adjustment of seasonal factor. At
Malaysia there is 3 main celebrations each year, which AidilFitri, Chinese New Year,
and Deepavali, those factors was used as seasonal factor. Since one of our target
markets is fresh graduate student, graduation month also was used as seasonal factor to
adjust our forecasted sales. The sales were forecasted to increase 10 percent annually,
sales forecast can be refer to graph below.

4.3 Marketing Expense Forecast

Marketing expense forecast will be used as tool to keep the marketing department
on target and provide indicators when corrections are needed for the proper
implementation of the marketing plan. Expenses are tracked in major marketing categories
of advertisement, marketing campaign, direct marketing and other. Marketing are
budgeted at approximately of 8 percent of total sales for 3 quarter of 2009, the

42
marketing expense will be high during those quarter to penetrate market and promoting
our product so costumer will realize about existence of our new product. For the next
coming years the marketing expense will budgeted approximately 3-4 percent of total
sales.

Table: Marketing Expenses Forecast


Particulars 3rd 4th 1st 2nd
Quarter Quarter Quarter Quarter
09 09 10 10
Advertisement
o Newspaper
magazines and 2000000 1500000 1200000 1200000
bill boards
o TV
Advertisement 5000000 4000000 3500000 3500000
o Online
Advertisement 100000 100000 75000 75000
o Radio
Advertisement 200000 200000 150000 150000

Marketing Campaign
o Grand
Launching
Event 7000000
o Graduation
Campaign 2000000
o Depawali
campaign 2000000
o Christmas
Campaign 2000000
o Chinese new
year 2000000
o Roadshow 3000000
Direct Marketing
o 1800 toll free 150000 100000 100000 100000
o Website 500000 100000 75000 75000

Other
o Printed 100000 800000 600000 600000
Material
(Broachers &
banners)
Total 20950000 6000000 7100000 8100000

43
Market Structure Faced By TATA

Key points to be discussed:-


1. Various market structures in brief
2. The kind of market structure Tata Nano is facing
3. Prevailing competition to Tata Nano
There are four basic types of market structures under traditional economic analysis
which are:-
 A Perfect competition is a market where there are many small firms producing
homogeneous goods.
 A Monopolistic competition prevails where there are a large number of
independent firms which have a very small proportion of the market share.
 An Oligopoly is a market dominated by a few large suppliers. The degree of
market concentration is very high

44
 A Monopoly is a market structure is which a single supplier produces and sells the
product.

The elements of Market Structure include the number and size distribution of firms,
entry conditions, and the extent of differentiation. The main criteria by which one can
distinguish between different market structures are: the number and size of producers and
consumers in the market, the type of goods and services being traded, and the degree to
which information can flow freely.

Automobile industry in itself is a differentiated oligopoly market. In differentiated


oligopolies companies attempt to differentiate their products from those of their
competitors. Essentially, Oligopolies have a few key players in an industry that can
cooperate to effectively form a monopoly or at least approach the level of a monopoly.
Automobile industry typically has barriers to entry, which deter newcomers from starting
up businesses, keeping the market small. In the case of an automotive company, costs are a
large barrier. Who exactly has the money to throw around on a factory, national
advertising, labor pool with benefits; repair structures and mechanical warranties etc will
jump in an automobile industry.

But the case of Tata Nano is different in terms of its price. Currently it clearly
enjoys clear monopoly in the world market. Let us see how.

If there is a single seller in a certain industry and there are no close substitutes for
the goods being produced, then the market structure is that of a "pure monopoly". A
monopoly should be distinguished from a cartel in which several providers act together to
coordinate services, prices or sale of goods. Although there are innumerable small car
manufacturers, currently Tata Motors Ltd. long-awaited Nano the “people’s car” stands out
as the only car manufactured around the globe with the cheapest price. Tata says it has
filed 34 global patents for the vehicle’s platform.

A monopoly is said to be coercive when the monopoly firm actively prohibits


competitors from entering the field. Economic barriers include economies of scale, capital
requirements, cost advantages and technological superiority. Monopoly is the result of

45
access to key resources, which may be either natural resources or some patented process or
special knowledge. New firms cannot enter the industry without access to those resources.
The Niño technology which includes the above factors will make it difficult for new
entrants.

A monopoly is a price maker as it holds a large amount of power over the price it
charges. Tata Nano is the only car in the world, which has been priced with a starting rate
of Rs.134000.00 for the Base model, and Rs.160000.00 & Rs.185000.00 for the CX & LX
model respectively.

An existing competitor is the Maruti 800, which is trusted and consumed by a big
share of Indian market. Although Nano is cheaper than the Maruti 800, its main competitor
which is next cheapest Indian car priced at 1,84,600.00 Rupees, Marti 800 is the car which
is around for many years and is still going strong. Maruti Suzuki will most probably bring
down the price further to attract the customers. There are also rumors of Marti Suzuki
introducing a lower priced version of Alto to counter Tata Nano. Customer votes say this
car is much more reliable than Nano as it is the best one can say for the city rides and easy
to maintain in traffic. But still Nano proves to be better. Nano is 8 percent smaller in
exterior size and has 23 percent larger interior space in comparison to Maruti 800. Now
news is spread about the RENAULT YENI. RENAULT YENI will be launching in India
in collaboration with Mahindra. This Car is launching in India only for Rs 1, 30,000. Now
how far this car proves to be a truth or a myth depends. But if it is a truth than the
competition for Nano from RENAULT YENI will be much more than the Maruti 800.
Besides rival car makers including Bajaj Auto, Fiat, General Motors, Ford Motor, Hyundai
and Toyota Motor have all expressed interest in building a small car that is affordable to
more middle-class consumers in emerging markets.

46
Other Strategies

Changes in manufacturing strategy that the TATA’s are


working on which will help in decreasing cost

Key points to be discussed:


1. What is a manufacturing strategy?
2. Defining various strategies Tata is working on to manufacture Nano
3. How these strategies influence the cost of the car.

A manufacturing strategy is defined by a pattern of decisions, both structural and


infrastructural, which determine the capability of a manufacturing system and specify how
it will operate to meet a set of manufacturing objectives which are consistent with overall
business objectives.

47
Manufacturing has now become a necessity for maintaining competitive pricing
and appropriate times to market. The company must decide what its manufacturing
strategy will be throughout the product life cycle. A product that will be sold into an
already established market, with an accepted technology will have different manufacturing
needs than a new product with a new technology in the market.

Tata’s Nano is a new product with a new technology, which promises the market of
an efficient car with a very low cost. Let us see the Manufacturing stunts it has used to cut
down cost.

New Market Segment


What Tata is doing is creating a whole new segment and getting the first mover
advantage. They are making the maximum profits by penetrating in the mass market. They
found standardization is best way to make cars cheaper and assembled cheap units in their
final product which could therefore be afforded by middle class families.

Brand Image
Tata is taking the advantage of their brand image and has cut down on all gizmos in
the car. Take an example of cars made in 50's and 60's when cars were like bicycles... a
means of transportation and not a living room. They may also want to introduce version
that has only one bench seat instead of trying to create vehicle for six people. Purchasing
also plays a big role in cost control. They plan to introduce open and transparent bidding
process to avoid corruption in purchasing.

Usage of Composite material


There is more usage of plastic and composite materials, which will cut down
manufacturing cost. Increased use of plastic components can reduce the overall weight of a
car by as much as 40 percent, which can go a long way in improving fuel efficiency. In
addition, the cost of tooling plastic is half that of a conventional metal-based tooling
system.

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Distributed manufacturing
A distributed manufacturing system refers to a control system, in which the
controller elements are not central in location but are distributed throughout the system
with each component sub-system controlled by one or more controllers. Networks for
communication and monitoring connect the entire system of manufacturing. Tata Motors is
studying the possibility of letting local assemblers produce its low-cost small car, the
Nano, and selling it under their own brand. Tata is changing India’s manufacturing
practices. That’s because the automaker is asking engineers and mechanics to join together
to set up their own assembly operations to build the Nano.

Tata not only will supply complete-knocked-down kits but also provide the entire
assembly plant, at what it says to be the most economical price. The auto maker will
monitor the quality and reliability of the assembly operation, taking full responsibility for
product liability. Using this strategy, Tata expects to make and sell 250,000 cars in the first
year and up to 1 million annually in the next three to four years.

Tata Motors is going all out to strengthen its distribution channels so that the
people’s car would be a success. It is being said that Tata Motors is going ahead with its
distribution and financing plans for the Nano car. Tata Motors is implementing a ‘hub-and-
spoke’ model for Nano’s distribution, which would mean that it would involve increasing
dealership points as well as adding sales and customer touch points. As per the plan, the
Tata Nano dealers in the cities would play the role of hubs. They in turn will undertake the
effectiveness of other sales and customer touch points, which would play the spokes. In
terms of manufacturing strategy - the possibility of the 1-lakh cars final assembly being
done at the dealer point is truly path breaking.

Economies of scale

Economies of scale are the cost advantages that a business obtains due to
expansion. They are factors that cause a producer’s average cost per unit to fall as scale is
increased. Any size firm expanding its scale of operation may utilize economies of scale.
The common ones are purchasing (bulk buying of materials through long-term
contracts), financial (obtaining lower-interest charges when borrowing from banks and

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having access to a greater range of financial instruments), and marketing (spreading the
cost of advertising over a greater range of output in media markets). Each of these factors
reduces the long run average costs (LRAC) of production by shifting the short-run average
total cost (SRATC) curve down and to the right. Tata is counting on this economies of
scale and "careful
sourcing of
materials"
to keep prices
down.

Modifying the Traditional Pricing System


Tata is also working on the strategy of reducing costs and waste to improve profits
by implementing a new style of pricing than the traditional way of pricing of automobiles.
Traditional way: - (cost plus, cost price + a markup over cost price = SP and the markup is
their profit). Tata Nano strategy is cost minus (SP-cost = Profit). More cost reduction
means more profit. This means Tata’s will continue to squeeze suppliers.

These unusual manufacturing strategies will enable Tata to meet increasing


demand. Thus all these strategies contribute to the lowest possible price showcasing Nano
- Small Car Big Dreams!

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Tata Nano V/s Maruti 800

Price :

Tata Nano is going to be the cheapest car in the world. Expected to be around Rs. 1 Lakh
($2500), however after road-tax, registration, sales tax etc etc. For the base variant’s, the
on road price of Tata Nano is about Rs. 1.3 Lakh ($3300).

Maruti 800 costs about Rs 1.95 ($ 4900), which is the cheapest available new car until Tata
Nano is launched. Maruti Suzuki will most probably bring down the price further to attract
the customers after the Tata Nano is launched.

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Looks:

In Looks, Tata Nano clearly beats the Maruti 800, I have seen Tata Nano at Auto Expo
2008 in Delhi, and it looks stunning considering that its the cheapest car in the world. I
hope the production models will have the same finish as was there on the display models at
Auto Expo.

Maruti 800 has old style looks, Maruti will really need to give it a facelift to beat Tata
Nano’s looks. Also Maruti 800 is about 10% longer in exterior dimensions, which means
Tata Nano will be easy to drive in congested traffic as its small in size from outside.

Power:

Now we are talking about something real, the power, Tata Nano churn out a Maximum
power of 33 BHP as compared to Maruti 800 churns 37 BHP. But the catch is Tata Nano
weighs only 580 Kg compared to Maruti 800’s weight which is 660 Kg. So if we compare
the power to weight ratio Tata Nano is at 0.057 BHP / Kg and Maruti 800 at 0.056 BHP /
Kg. It means, the feel of power of Tata Nano will be almost equal to Maruti 800’s feel,
which is not bad at all for almost half the price.

Noise and Harshness:

This is an area where Maruti 800 beats Tata Nano, according to auto experts and
reviewers, Tata Nano becomes quite Noisy at speeds above 60 Km/hr. Reason is that the
engine is rear mounted and noise insulation is not that high end. Second reason being the
low capacity engine in Tata Nano (625 CC) compared to Maruti 800 (800 CC), the engine
of Nano has to put in more effort for extracting out more power in lesser engine
displacement.

Safety:

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Safety is something on which I cant comment much, but Maruti 800 being a tried and
tested car for long time, has a better good-will in its robustness and sturdiness. Maruti has
front mounted engine and a safe and strong structure.

Tata Nano has rear mounted Engine and is yet to hit the market, so can’t comment much
right now on safety, but I hope that Tata’s have designed it well keeping in mind all the
crash Norms which cars have to fulfill.

Mileage or Fuel Efficiency:

Tata Nano beats Maruti 800 in Fuel efficiency, two reasons for this, it has less capacity
engine which means that it runs at close to its higher engine speeds mostly ( which
improves fuel efficiency) and second that it has been designed taking into consideration of
Euro 5 norms, which means a really fuel efficient engine.

Comparing Maruti 800 Mileage of approx. 15 to 18 KM / litre and Tata Nano Mileage of
approx. 20 Km/Litre, its a 20% saving in the fuel cost, which is considerable if you drive a
lot.

Interior Space:

The interior space of Tata Nano and Maruti 800 is nearly same, Nano has about 20 %
greater inner space compared to Maruti 800 as claimed by Tata.

Miscellaneous:

There may be some miscellaneous features which vary between Maruti 800 and Tata
Nano, for example, adjustable seats, headrests, comfort feel, drive-ability etc.

All in all, I would say Tata Nano is really a common man’s car who needs to commute
without any luxury features.

On a Scale of 10, I would give:

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Tata Nano a score of 8 out of 10

Maruti 800 a score of 7 out of 10

RESEARCH METHODOLOGY

“Systemized Method is necessary to gain knowledge”. The technique deployed to


analyze and interpret the data for the purpose of hitting the target objective plays a crucial
role. The effective research technique has a significant contribution for effective objective
achievement.

OBJECTIVES OF STUDY
The main objective is to gain everything about Nano. Following are the objectives
of analysis:
• To understand strategies adopted by Tata for success of Nano.
• To know how the cost is reduced.
• To gain knowledge of Promotion and Marketing Tactics for a new product.
• To understand the marketing mix used by Tata to promote Nano.
• To find out the acceptance level of people.
• To increase awareness level for Nano car.

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• To know practical aspect of how to win over competition.

RESEARCH DESIGN

Research design facilitates that smooth sailing of various research operations


thereby making research as efficient as possible, yielding maximal information with
minimal expenditure of effort, time and money. Research Design is the arrangement for
conditioned for data collection & analysis of data in a manner that aims to combined
relevance to research purpose with economy in procedure.

A research design is a master plan or model for the conduct of formal investigation.
It is blue print that is followed in completing study.
In contrast to exploratory studies descriptive studies are typically structured with
clearly stated hypothesis. Descriptive studies are those studies, which are concerned with
describing the characteristics of particularly individual or group.
These studies are concerned with specific predictions, with narration of facts &
characteristics concerning individuals, groups, or situations. The design in such a study
must be rigid & not flexible and must focus attention on the following:-
o Formulating the objective of study.
o Designing the method of data collection.
o Collection of data.
o Processing & analyzing the data.
o Reporting the findings.

Techniques used

o Collection, Classification, Compilation, Tabulation, Analysis and Interpretation of


information facts and figures relevant to the company.
o Consultation and personal observations.
o Drawing conclusion through analysis of information collected and interpreted.

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SOURCES OF INFORMATION

(No Primary Sources are used)

Secondary Sources- The secondary data has been collected from the following
modes:
o Magazines
o Data through internet sources
o Annual reports of the company.
o Reference books statistical bulletins.

Scope of the study

• This study would be useful to know about NANO.


• This study would be useful to other students as a secondary data.
• This study would be useful to students to understand importance and practical
aspect of marketing and promotional strategies.
• This study would be useful to other new products to form strategies.

SIGNIFICANCE OF THE STUDY

Every research is conducted to fulfill certain objective and these objectives in turn

fulfill some purpose. BBA curricular is designed to give more practical exposes to the

student so that he can make use of theoretical knowledge in the real life situation, with this

thrust dissertation study has been included which provides opportunity to research to gain

practical insight of the market. This hand on experience helps him in identifying the

critical factor of consumer buying behavior. This rich experience will be great help in

researcher’s future endeavors and it also solves the purpose for the partial fulfillment of

BBA curriculum.

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I sincerely believe that road to improvement is never- ending and one always learns

from a new experience. This project is a step towards gaining knowledge about real world

and putting the theory of practice. I shall look forward to and gratefully acknowledge all

suggestion on this small step I have taken.

The report consists of a step–wise efforts towards meeting the objectives of the

study. It covers the step-wise collection of data collection and the representation of the data

together with the analysis. It also includes some suggestions put forward hoping it would

help the company achieve its vision.

LIMITATIONS OF THE PROJECT

No proper assurance of right information: The main data sources are websites, newspapers

and magazines.

o The data on websites might be possible, not get updated.

o I will have to rely upon the information given by respondents, which may not be

fully true

o This study will be limited to only some areas of Baroda City

o It is only for short period of time.

o Lack of professional approach since researcher is a student.

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Bibliography

1. Philip Kotler & Hiller (2008) marketing management 8th edition:

Pearson

2. OUTLOOK BUSINESS (9TH FEB, 2008)

3. BUSINESS STANDART (18TH FEB, 2008)

4. 4P’S OF BUSINESS AND MARKETING (28TH MARCH, 2008)

5. http://www.tatamotors.com

6. www.scribd.com

7. www.google.com
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