Div: B Name: Sudipta Saha Roll: 19225

Subject: Marketing Strategy

Assignment 01

Topic 01

Analysis of a successful brand (Under Armour)

About the brand: Under Armour, Inc. is an American sports equipment company that
manufactures footwear, sports and casual apparel. Under Armour's global headquarters are
located in Baltimore, Maryland with additional offices located in Amsterdam (European
headquarters), Austin, Guangzhou, Hong Kong, Houston, Jakarta, London, Mexico City,
Munich, New York City, Panama City (international headquarters), Paris, Pittsburgh,
Portland, San Francisco, São Paulo, Santiago, Seoul, Shanghai (Greater Chinese
headquarters), and Toronto.

Under Armour Stats :

Founder: Kevin Plank
Age at Founding: 24
Started In: 1996
Industry: Sports Apparel
Annual Revenue: $1.83BB in Retail Sales
No.of Employees:  5,900
Famous For: Creating a revolutionary new T-shirt built
from microfibers that wicked moisture and kept
athletes cool, dry, and light.

Brief history: Under Armour was founded on September 25, 1996 by Kevin Plank, a then
24-year-old former special teams captain of the University of Maryland football team. Plank
initially began the business from his grandmother's basement in Washington, D.C. He spent
his time traveling along the East Coast with nothing but apparel in the trunk of his car. His
first team sale came at the end of 1996 with a $17,000 sale. From his grandmother's
basement, Plank moved to Baltimore. After a few moves in the city he moved to his current
headquarters in Tide Point.

As a fullback at the University of Maryland, Plank got tired of having to change out of the
sweat-soaked T-shirts worn under his jersey; however, he noticed that his compression
shorts worn during practice stayed dry. This inspired him to make a T-shirt using moisture-
wicking synthetic fabric. After graduating from the University of Maryland, Plank developed
his first prototype of the shirt, which he gave to his Maryland teammates and friends who
had gone on to play in the NFL. Plank soon perfected the design creating a new T-shirt built
from microfibers that wicked moisture and kept athletes cool, dry, and light. Major
competing brands including Nike, Adidas and Reebok would soon follow in Plank's footsteps
with their own moisture-wicking apparel.
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Subject: Marketing Strategy
Assignment 01

Plank opted to use the British spelling "armour" in the company name because the toll-free
vanity number was still available for that version. People began to take notice of the brand
when a front-page photo of USA Today featured Oakland Raiders quarterback Jeff George
wearing an Under Armour mock turtleneck. Following that front page, Under Armour's first
major sale came, when an equipment manager from Georgia Tech requested 10 shirts from
Plank. This deal opened the door to a contract with NC State, Arizona State, and other
Division I football teams. With positive reviews from players, word began to spread and
orders began to increase.That same year, Under Armour launched with several new apparel
lines including ColdGear, TurfGear, AllseasonGear, and StreetGear.

By the end of 1996, Under Armour had sold 500 Under Armour HeatGear shirts, generating
$17,000 for the company. In 1997, Plank had $100,000 in orders to fill and found a factory in
Ohio to make the shirts.

Growth: Under Armour received its first big break in 1999 when Warner Brothers contacted
Under Armour to outfit two of its feature films, Oliver Stone's Any Given Sunday and The
Replacements. In Any Given Sunday, Willie Beamen (played by Jamie Foxx) wears an Under
Armour jockstrap. Leveraging the release of Any Given Sunday, Plank purchased an ad in
ESPN The Magazine. The ad generated close to $750,000 in sales.

The following year, Under Armour became the outfitter of the new XFL football league,
gaining even more attention during the league's debut on national television. In 2003,
consumer sector focused private equity firm Rosewood Capital invested $12 million into the
company. The same year, the company launched its first television commercial, which
centered on their motto, "Protect this house. The company IPO'd on the NASDAQ in
November 2005, raising $153m of capital. In late 2007, Under Armour opened its first full-
line full-price retail location at the Westfield Annapolis mall in Annapolis, Maryland. It has
also opened several specialty stores and factory outlet locations in Canada, China, and 39
states including the opening of its first Brand House in Baltimore in 2013 and second Brand
House in Tyson's Corner, Virginia. In 2009, baseball Hall of Famer Cal Ripken Jr. formed an
alliance under which the company would have a significant presence at several venues and
events under the auspices of Ripken Baseball, including providing uniforms for the minor
league Aberdeen IronBirds and youth teams participating in the Cal Ripken World Series.

The company is reported to be the major commercial sponsor for the reality TV show Duck
Dynasty and has garnered attention for taking a stand supporting show "patriarch" Phil
Robertson. Under Armour provided the suits worn by speedskaters in the 2014 Winter
Olympics. The US speedskaters were losing while wearing the new Mach 39 speedsuits, but
when they reverted to the previous model suits, the skaters continued to lose. Although
there did not appear to be a design flaw in the suit that caused the poor results, the news of
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Subject: Marketing Strategy
Assignment 01

the suits caused Under Armour stock to drop 2.38%. The company, offering a reported
US$250,000,000 over 10 years, also bid hard over Nike to sign NBA MVP Kevin Durant to an
endorsement deal. However, Nike ultimately re-signed Durant after agreeing to structure a
contract, offering US$300,000,000. On January 21, 2014, it was announced that the
University of Notre Dame and Under Armour had come to terms with providing uniforms
and athletic equipment for the university. This 10-year deal was the largest of its kind in the
history of college athletics and became effective July 1, 2014. As of 2014, Under Armour had
an operating profit of more than 30%, accelerating from its 2013 pace. The company's share
price soared 62.5% that year.

After its November 2013 acquisition of digital app maker MapMyFitness for
US$150,000,000, in February 2015 Under Armour announced it had purchased the calorie
and nutrition counting app maker MyFitnessPal for $475m, as well as the fitness app maker
Endomondo for US$85,000,000 On January 6, 2016, Under Armour announced a strategic
partnership with IBM to use IBM Watson's cognitive computing technology to provide
meaningful data from its IOT kit and UA Record app.On March 3, 2016, the company
became the Official Match Ball Partner of the North American Soccer League, starting with
their 2016 season. On May 26, 2016, Under Armour and UCLA announced their plans for a
15-year, $280 million contract, making this the largest shoe and apparel sponsorship in
NCAA history. In July 2016, Under Armour leased the 53,000-square-foot (4,900 m2) space
formerly occupied by FAO Schwarz on New York's Fifth Avenue; the store opening is planned
for 2021.FAO Schwarz had been paying $20 million in rent.

On December 5, 2016, Under Armour reached a 10-year agreement with Major League
Baseball to become the official on-field uniform provider of the MLB, beginning in
2020.Under Armour will replace Majestic, who has been MLB's uniform provider since 2004.
However, in May 2018, it was reported that Under Armour would be backing out of the deal
with MLB, in order to save the company around $50 million. Nike would instead become the
on-field uniform supplier of the league. MLB's deal with Nike became official on January 25,
2019.Under Armour has a partnership with NBA athlete Stephen Curry, who is considered to
be the "face of their footwear line". Originally signed to Nike, Curry joined with Under
Armour in the 2013 offseason. As Curry became a two-time NBA Most Valuable Player
Award winner and one of the most popular athletes in the world, sales of his shoes have
become a major factor for the Under Armour brand, with stock prices rising and falling
based on the success of the Curry shoe line. Under Armour has a partnership with PGA
golfer Jordan Spieth, who has won three majors so far (the 2015 Masters, the 2015 U.S.
Open and the 2017 Open Championship) and has recently launched his own golf shoe,
"Spieth One." On October 10, 2018, Under Armour announced that it has signed
Philadelphia 76ers center Joel Embiid to a sneaker endorsement deal. In October 2019,
Kevin Plank announced he would be stepping down by 2020, and COO Patrik Frisk would
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Subject: Marketing Strategy
Assignment 01

succeed him as CEO in January 2020. In July 2020, the company received Wells Notices from
the U.S. Securities and Exchange Commission, Mr. Plank the Under Armour's CEO, David
Bergman. The notices are the result of its accounting revelations for the years 2015 and
2016 and "pull forward" sales for the same period. The same month, the company reported
revenue decline of 41% for the Q2 of 2020 or $707.6 million. As a result of the COVID-19
pandemic, Under Armour had to close its physical stores earlier that same year. Despite the
revenue decline, it still far better than the analytic predictions, which had previously
estimated profits of $541 million in sales for Q2.

Under Armour announced an addition to their ColdGear product line, called Infrared, that
was released in 2013.This line claims to dissipate and re-circulate heat around the wearer's
body using ceramic powder. This was purportedly designed so that the wearer's heat
signature will not be picked up. Under Armour also had released a product with scent
control technology in 2012 titled, "Under Armour Scent Control". This line claims to be
designed so that the wearer's scent cannot be detected.
Under Armour is inventing a new type of shirt called "Coldblack," which is designed to
reflect heat and keep athletes cool in the sun.Under Armour has come out with new styles
for football uniforms. In October 2012, Under Armour created "The Wounded Warrior"
project for football uniforms.The University of Hawaii and Boston College wore the star-
studded cleats and the American striped jerseys. They were revealed when Boston College
played Maryland on October 27, 2012, also when Hawaii played UNLV on November 24,
2012.
The company produces the Speedform shoe in a Chinese bra factory. It has no insole and
little stitching. Shoes are Under Armour's fastest growing product line, growing 31% from
2011 to $239 million in sales in 2012.
In 2018, Under Armour launched two new pairs of connected running shoes at CES. Inside
each shoe is a Bluetooth module, accelerator and gyroscope.

Driving forces of Under Armour’s success:

Societal/Lifestyle/Fashion Trends – Ever-changing attitudes and lifestyles across society
directly impact the apparel industry from a macro-environment perspective. The sports
apparel industry is not immune to this driving force. The sports industry wields tremendous
influence upon society, and arguably even more so within developed countries. The relative
pervasiveness of sports and sport-related influences across society arguably, at times, make
it difficult to even differentiate society and its attitudes and lifestyles from sports and sports’
influences themselves. This intertwining of sports across society, and the related influences
of sports upon society, create a tricky web of relational effects – sports impact society, but
so too does society impact sports. Fashion becomes intermixed into this relationship, and
trending fashion overlaps into the sports arena, and particularly into the sports apparel
industry. As an example, 80’s style fashion, with its utilization of bright colors, appears to
have crept back into the fashion forefront. In reaction, many college football teams, such
the Universities of Oregon and Baylor, have amended their respective team’s uniforms to
 Div: B Name: Sudipta Saha Roll: 19225
Subject: Marketing Strategy
Assignment 01

incorporate 80’s-related design features into their respective team’s uniforms. Therefore, in
order to remain relevant, competitors within the sports apparel industry must remain
cognizant of the relational impacts of lifestyle and fashion trends and tailor their operations
accordingly.
Product innovation – as technology evolves, the sports apparel industry seems to
continually advance its products. From lighter shoes to performance under garments to
grip-enhancing gloves, the industry continues to churn out newer, more evolved products,
and product line breadths grow accordingly. Industry players that cannot keep pace with the
products, and more importantly, the new norms that the new products establish, risk
becoming irrelevant. Product differentiation is directly supported for product innovation
and improvement. Put simply, demand is typically enhanced by product innovation.
Certainly, under armour appears to understand the impact of this driving force, as it places a
deliberate focus on new and improved products.

Marketing innovation – as product innovation spearheads an increase in industry

participants’ product lines, opportunities for new customers emerge. For example, the
tactical/military customer segment has emerged as a viable, sustainable target audience for
sports apparel products. Cognizant firms can recognize such potential new customer
segments and gain a first-mover advantage and substantially alter the competitive
landscape within the industry. Also, from a sports marketing perspective, professional team
and athlete endorsements brandish considerable influence upon the industry. And, their
impact is continually shifting, as different teams rise in dominance (and others slide
backwards) year to year in their respective sports and different professional rise (and fall) in
favor and influence. Partnerships with the proverbial rising stars can spur demand and give
industry players a sense of legitimacy among customer bases and a definitive competitive
advantage (and similarly, stars and teams that are falling out of favor can have negative
impacts).

Globalization – as previously discussed, the impact of sports is pervasive throughout the

overwhelming majority of society. As such, the market for sports apparel is a truly global
environment. Thus, in order to truly be competitive within the industry, players must target
international customer markets. Moreover, any disruption in a large international market,
such as civil unrest or the olympic games, can have significant and real effects upon the
industry, positive or negative. Additionally, labor cost differences among countries and
geographic regions can motivate firms to focus their production activities in low-wage areas
in efforts to gain cost and competitive advantages.

Technologically advanced products / research & development – Given the impact of the
driving force of continual product innovations, successful and competitive firms within the
sports apparel industry (and, in particular, those players that operate in the mid-to-upper
segments of the industry) must demonstrate value to their customer bases via new and
 Div: B Name: Sudipta Saha Roll: 19225
Subject: Marketing Strategy
Assignment 01

improved products. From stability control improvements in footwear to cold weather

protection athletic garments, firms must continually restate their value propositions with
new and improved products. The market is fairly saturated with competition, and any
product or player who falls behind in the norms of new products cannot adequately
compete.

Sports marketing – Marketing within sports industries is a large expense and key
component of any large player. Invariably, large market participants such as Nike and Adidas
comment large sums towards their marketing campaigns (market leader Nike spent over
$2.4 billion in 2011); in 2011, under amour spent nearly $168 million (a 31% increase from
the previous year). The impact and influence of these sports marketing campaigns is
arguably immeasurable but incredibly significant nonetheless. Becoming an official outfitter
for a team, particularly a large, popular team, not only adds legitimacy to the supplier but
spurs additional sales to fans. Sponsorship agreements with key athletes are also critical
components of successful sports marketing campaigns. Look no further than the impact of
Michael Jordan and his signature Air Jordan shoes on Nike during his peak of fame in the
late 1980’s (or, for that matter, even today). And, given the impact of globalization and the
intertwining of sports, successful firms competing in the international arena must tailor
their sports marketing campaigns towards the geographic regions in which they operate
(such as hockey in Canada or soccer in Europe).

Distribution Network – Given the increasing sizes of competitors’ product lines and related
consumer demand, successful large-scale sports apparel industry participants must create
and manage an efficient yet far-reaching and multi-channel distribution network. Internet,
wholesale and retail outlets, and branded storefronts must be incorporated to adequately
reach and fulfill consumer demand. Moreover, the logistical challenges of operating multi-
channel distribution should not be overlooked. The more efficient an industry player can be,
the faster and cheaper it can bring its products to the customer and thereby gain
competitive advantage. Strong support systems and procedures must be emplaced, and
strict inventory management must be adhered to, in order to realize efficiency benefits.

Strategies and Tactics behind Under Armour’s success:

1. Founder Kevin Plank created a product to solve a problem he faced, which got
athletes excited and talking about.
- Founder and CEO Kevin Plank hated how his soaked cotton undershirts weighed him down
while playing football, and he had to constantly change out of them every quarter.
Driven by his frustration, he came up with a moisture-wicking compression shirt that
remained dry no matter how much you sweat.
He spent $17,000 and ended up with 500 shirts, which he began sending to his former
teammates who were currently playing in the NFL. They loved it.
 Div: B Name: Sudipta Saha Roll: 19225
Subject: Marketing Strategy
Assignment 01

It was so good that in 1998, Barry Bonds, a famous baseball player, was constantly seen
wearing Under Armour products, even though they hadn’t sent him any.
Pleasantly surprised by him always wearing and talking about their products, the Under
Armour team approached him. They eventually managed to convince him to do a photo
shoot for them.

2. Gave out free shirts to individual football players, and ended up getting sales from
2 NFL teams.
- Having a network of professional football players was a huge advantage for Kevin Plank, as
he was able to let them test out his products to see if they liked it. He’s tell them about the
product and if they sounded interested, he’d send them a couple of shirts to test it out. He
gave an extra shirt so the player could pass it to his teammate if he personally liked it .
Kevin’s plan was that once a few players started wearing their products and talking about
them, the team would feel “obliged” to buy them for everyone. And that was exactly what
happened: the Georgia State football team soon approached Under Armour to outfit their
players, followed by Atlanta Falcons, the New York Giants and the Miami Dolphins. Selling to
Miami Dolphins was a great move, as their match was televised on national tv, which helped
to bring out the Under Armour name.

3. Transformed their female marketing strategy from failure to success with their “I
Will What I Want” campaign.
- Since its inception, Under Armour has been perceived as an extremely masculine brand,
with most women viewing it as being male-centric.
Under Armour’s approach to female apparel was always kind of an afterthought, where
products were simply adapted from men’s apparel and made to look slightly more appealing
to females.
Dubbed the “shrink it and pink it” strategy, it proved to be ineffective until they changed
their focus.
Women want to be treated the same way men are, and the “shrink it and pink it” strategy
was both patronizing and demeaning to them.
Under Armour understood that, and focused on the strength and endurance of their will
and bodies.
Together with their more recent “I Will What I Want” campaign, featuring ballet
dancer Misty Copeland, Olympic skier Lindsey Vonn, supermodel Gisele Bundchen and
others, Under Armour’s ads for females shows female athletes overcoming their adversities
and pushing on.
This new focus, together with better quality female clothing resulted in bigger sales in Under
Armour’s North American women’s apparel division.

4. Under Armour held a competition to find their “Ultimate Intern”, which attracted
120,000 Facebook fans and 4,000 Twitter Followers.
In 2011, Under Armour announced a Ultimate Intern Program – where students could apply,
go through a series of challenges, and the winners would get to work with them during
summer, helping the brand to communicate their values and messages through social
media.
 Div: B Name: Sudipta Saha Roll: 19225
Subject: Marketing Strategy
Assignment 01

The contest drew more than 10,000 inquiries and over 5,000 applications on Facebook and
Twitter.
But what’s also impressive was how the event helped the company to break through
their one million follower-mark.
The success of their first Ultimate Intern Program encouraged them to host another for
2012 and one more in 2013.

Key Decisions:

1. By the early 2000s, Under Armour was soaring. The company was expanding into
new merchandise and advertising on television. Sales exceeded $200 million by 2004
and Plank decided to take the company public in 2005. The company raised $157
million in the IPO.
2. Endorsements and media attention were helping the brand solidify among the titans
of sport and athletic wear. In 2010, the company signed a personal endorsement
deal with New England Patriots quarterback Tom Brady.
In 2011, Under Armour partnered with Carolina Panthers quarterback Cam Newton,
who became one of the company's most prized endorsers. Below are his Under
Armour cleats.
Under Armour also began to include women in its advertisements and
endorsements, representing a stark change from the company's gruff and tough
football beginnings. In 2014, the company signed Gisele Bundchen, Tom Brady's wife,
and featured ballerina Misty Copeland in an advertisement that went viral.
3. Under Armour bought MapMyFitness in 2013 for $150 million, followed by
Endomondo for $85 million and MyFitnessPal for $475 million in 2015. The
acquisitions of the fitness and health-focused apps and technology were part of the
company's efforts to expand its digital offerings.
4. In 2015, Under Armour had another win when it signed a deal with boxing legend
Muhammad Ali.
5. In 2016, Under Armour introduced the UA SpeedForm Gemini 2 Record Equipped, its
first smart shoe with a built-in sensor to store and track data.
6. The next year, the company introduced its sleepwear designed to help speed up the
body's recovery process.

Conclusion: Though Under Armour is facing some organizational difficulties in recent times,
it’s rising timeline in sports accessories industry is incredible. Progressive thinking and
product innovation of Kevin Plank takes a simple startup to billion Dollar Company.
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Subject: Marketing Strategy
Assignment 01

Topic 2:

Failure of a Brand (Tata Nano)

Introduction: Every now and then, a magnificent dream miraculously turns into reality
after years of dedication and hard work. The Nano started off as one such dream by Ratan
Tata that eventually became reality as an inexpensive hatchback for Indians who commuted
every day on their scooters or motorbikes. Those who braved the weather, the pollution,
and the risk to commute to work and back simply to provide for their families deserved at
least some respite, some soothing comfort. For most, the Nano would have been their very
first Tata car, while for others it was a dream comes true. Yet, even though the idea was
sound, the vehicle failed to capitalize on the market potential and production has all but
ended after sales of the company dropped to extremely low levels. So, what could have
been a great legacy, became one of the most important case studies in brand positioning
and effective marketing for the automobile industry in India.

Tata Nano is a compact vehicle that was produced and showcased by Indian automaker Tata
Motors, principally in India, as a modest back-engined hatchback expected to speak to
current riders of bikes and bikes — with a dispatch cost of Rs 1,00,000 or $2500. Delays
during the production line migration from Singur to Sanand, early cases of the Nano bursting
into flames, the impression of the vehicle being perilous, and compromise in quality due to
cost slicing are some of factors behind Tata's failure to attract Indians.

Tata Motors anticipated creation of 250,000 every year at dispatch. This didn't happen. Only
7591 were sold for the model year 2016-17. In 2017, Tata Motors said assembling would
proceed because of Tata's passionate promise to the project. In 2018, Cyrus Mistry, previous
Chairman of the Tata Group, called the Tata Nano a venture in progress with China, with a
generation overhaul scheduled in May 2018.

Tata Nano Concept: After effectively propelling the ease of Tata Ace truck in 2005, Tata
Motors started the advancement of a reasonable vehicle that would speak to the numerous
Indians who ride motorcycles. The price tag of this nitty-gritty auto was brought somewhere
around getting rid of the most superfluous highlights, diminishing the measure of steel
utilized in its development, and depending on ease of Indian labor. The superfluous
highlights include the evacuation of the traveler's side wing mirror, having one wiper sharp
edge, having just three fasteners for every wheel, and the expulsion of the fuel filler top
from the fuel tank. The presentation of the Nano got much media consideration because of
its low cost of Rs. 100,000. The vehicle was promoted as "The People's Car".
 Div: B Name: Sudipta Saha Roll: 19225
Subject: Marketing Strategy
Assignment 01

Initial Effects on Tata Nano: A report by the Indian rating office CRISIL figured the Nano
would extend the country's vehicle advertising by 65%, in any case, starting late 2012.
However, deals in the initial two monetary years after the vehicle's divulging stayed
unfaltering at around 70,000 units. Tata still proposed the ability to deliver the vehicle in a
lot bigger amounts, somewhere in the range of 250,000 every year, if the need arise. It was
foreseen that its 2009 presentation would significantly influence the trade-in vehicle
market, and costs dropped 25–30% before the launch. Sales of the Nano's closest rival, the
Maruti 800, fell by 20% promptly following the disclosing of the Nano.

It is obscure if the Nano has lastingly affected the costs of and interests for close substitutes.
In July 2012, Tata's Group administrator Ratan Tata, who resigned in January 2014, said that
the vehicle had huge potential while conceding that the early open doors were squandered
because of starting problems. Due to the business drops, just a solitary unit was delivered in
June 2018.

Marketing strategy of Tata Nano: India is an organization with a larger part of its populace
dwelling as a low pay gathering. Purchasing a vehicle is still a fantasy for many families in
India. In the year 2008, Ratan Tata reported the dispatch of its new vehicle, which would be
a progressive item in the car division. He called it a 1 Lakh rupee vehicle and the same title
was used for promotions. The fantasy of a middle and even lower white collar class family
unit to have their very own vehicle woke up with this declaration from Tata Motors. It was
hailed to be cutting edge innovation and was commended by international media. An
entirely unexpected story unfurled when the vehicle appeared on the streets.

Ratan Tata's flash for the Nano came when he saw groups of 3-4 individuals utilizing a
motorbike for transportation. There are a great many bicycles in India and it has constantly
presented well-being worries for the general population. In blend with the poor street
conditions in India and conveying a full family on a bike, bikers are subjected to numerous
mishaps. His strategical view drove the concept of a low cost vehicle and chose that the 1
Lakh Rupee sticker price will be appealing to the objective market.

Proclamation : At the point when Tato Nano was declared in the long stretch of January
2008, it was over-advertised to be the vehicle of each Indian. The cost of Nano was pegged
at Rs. 1 lakh or $2500 by Ratan Tata, the Chairman of the Tata Group by then of time. It
turned into a fantasy vehicle for each individual having a place with the lower working class
and even the lower class. The service of the vehicle additionally raised worries about the
blockage on streets that the vehicle would acquire as individuals began to utilize it for
everyday transportation.

Strategic Plans: TATA Motors fundamentally segmented and focused on the following
sections of the Indian population:
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Subject: Marketing Strategy
Assignment 01

 The middle class. Fundamentally the lower white-collar class.

 Upper lower class. Normally the bike clients.
 Family with 3-4 individuals who have inconveniences while going on a 2-wheeler.

Affordability and Family Friendly Usage: Tata Nano being propelled in the Indian market
was an opportunity for the normal man of India to fulfill his dream of owning a vehicle. The
promotions and media productions featured the passionate remainder that demonstrated
the joy of youngsters when they see a vehicle coming to their home, and the joy on the
substance of the relatives who delineated a white-collar class gathering.

The battling Indian classes who had a month to month pay of under Rs.6000 every month
and comprised more than 110 million families got the chance to dream of purchasing a
vehicle.

It was anticipated that in Mumbai alone the 2 million individuals who rode a cruiser ordinary
would now attempt to lift themselves to purchase a Tata Nano. It was expected that Tata
Nano would make a progressive change in the way of life, uncommonly concerning the
substitution of the regular man. It would turn into a face of the Indian lower class, just like
the Bajaj Scooter at one time represented the white-collar class.

Reason for falling of Tata nano:

Lack of practicality: Two-wheelers are a nimble little vehicle that let people navigate
through traffic easily, while parking is rarely an issue. The same could not be said about the
Nano. So, a major issue with it was that it was not a motorbike. While it was small, it simply
was not small and convenient enough for people who were used to motorbikes. That was a
major issue in the Nano’s marketability that the automaker had not even considered.

Also, the Nano was more expensive to maintain than a bike and made car ownership more
expensive. The lack of standard features that are usually expected in such vehicles also
made the Nano feel cheaper.

Both these differences compared to bikes could have been overcome with a better and safer
design as well as a more refined look and feel. It simply wasn’t what people wanted to buy.
Car sales in this segment were extremely sensitive to how good a vehicle looks.

Positioning as cheap:

The automaker was under the misconception that the low price would be enough to
motivate people to buy the Nano. They did not account for their positioning it as a cheap
vehicle which, in India’s markets, translates to low quality. After all, who wants a daily driver
that looks cheap and is poorly built? Simply put, those who could afford a higher end Nano
did not want to drive it. Also, when people are status conscious, they look for things that
make them look wealthier than their neighbors and colleagues. While a car sounds like it
would be an upgrade from bikes, a cheap one that looks the part will always be shunned
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Subject: Marketing Strategy
Assignment 01

and will never be perceived as a means to boost one’s social status. An older, used sedan or
hatchback that was more expensive when it was first launched would have more value for
such a market than a new one that was marketed as cheap. So, bad marketing was perhaps
the key reason for the Tata Nano’s failure.

Emotionally disconnected advertising :

One of the most challenging aspects of marketing a vehicle like the Nano is advertising. A
basic rule of advertising is to create an emotional connection or a bond with the audience
that makes them want to experience the product. Tata failed to do so with their
advertisements for the Nano. While some TV commercials were fairly good, most of their
audiences simply could not relate to what they were seeing on screen. If the bad positioning
was not enough, the fact that people also could not relate to the advertisements made
things a lot worse.

In a country where emotions play such a vital role in everything, this disconnect spelled
doom for the Nano before it even hit the roads. Afterall, why buy an automobile if the car
owner can’t relate to it.

Poor build quality

One of the most significant problems with the Nano was its safety rating. The manufacturer
expected the Nano to receive four stars in the Euro New Car Assessment Program (NCAP)
crash test. But, when Allgemeiner Deutscher Automobil-Club (ADAC), a German automobile
club, tested it in 2014, it failed miserably. The Nano lacked airbags and proper adult
protection. It also did not meet basic UN safety requirements and was not as safe as Tata
had claimed and expected it to be.
The Nano was also very lightweight which made it a very bad choice for the usual Indian
roads which are not always smooth as silk. That also meant that it felt unsafe to drive
because of the simple lack of bulk.
On top of that, several incidents were reported in which the Nano caught fire for mysterious
reasons. The company claimed the cause was faulty foreign electrical equipment linked to
the exhaust.
To make matters worse, they refused to recall the vehicles with defective equipment and
instead extended the warranty period to four years, while offering to replace the
supposedly faulty parts in those already sold. Bad customer service also added to making
the Tata Nano a failure.

Non-Existent Public Relations

The automaker’s bad public relations did not improve matters. The company simply ignored
this crucial aspect and, while everyone focused on how many units caught fire, no one
talked about how many were running on the roads just fine. That also convinced the general
public that the Tata car was so cheap because the company cut corners in the
manufacturing process.
 Div: B Name: Sudipta Saha Roll: 19225
Subject: Marketing Strategy
Assignment 01

While this would not have been a major issue on its own, when combined with bad
marketing and advertising, it became one of the biggest reasons for first-time car buyers to
avoid the Nano.

Production Issues
Another major problem that contributed to the Tata Nano’s failure was the long wait time
for delivery.
The Nano was supposed to be manufactured in the new plant in West Bengal.
Unfortunately, the company could not acquire land for the facility and instead had to start
manufacturing from their Sanand facility in Gujarat.
Moreover, the lower production capacity could not keep up with the initial demand and
many people simply did not buy a Nano early on because there were not any available.

The Demise Of A Dream

The Tata Nano’s failure is a key learning point on how not to market and position an
automobile. Bad marketing and public relations for a hatchback that was not well designed
and manufactured from the start simply added fuel to the fire. Why Tata Nano failed serves
as a case study for future endeavours.
From a novel but faulty idea to a possibly promising reality that never transpired, the
automaker simply could not deliver what it had promised and instead gave the people what
they did not want: A cheap car that looked and felt cheap and was unsafe to drive.
The very first assumption that people wanted a cheap vehicle resulted in a cascading effect
that ended with the demise of the Tata Nano.
It was simply a car that was too expensive for the target market, yet too cheap for those
who could afford it.