INTRODUCTION

Tata Motors Limited is the largest automobile manufacturer in India, with 2011-12
consolidated revenues of USD 32.5 billion. They’re the industry leader in the production of
commercial, passenger, military, and electric automobiles. It is also the fourth largest truck
manufacturer and second-largest bus manufacturer by volume worldwide.

About Tata Nano

Using the resources of the group's automobile company, Tata Motors, Ratan Tata embarked
in 2003 on his search for an affordable vehicle, which he later named the Nano.
Tata Nano, also known as the "People's Car" and the "world's cheapest car," was launched in
January 2008. The automobile's introduction in March 2009 significantly impacted the Indian
automobile market.
Now, after a nine-year run, the Tatas have announced that the Nano will henceforth be
manufactured only on demand, putting an end to the Nano's production.
 Old STP

1. Segmentation:
• Tata Nano is specifically designed and manufactured for the middle-class and lower-
middle-class sections of people from rural areas, semi-urban areas, small towns, large
cities, and metropolitans in India.
• It was segmented for people above 18 years of age i.e the legal driving age. This was
meant for nuclear families as the size of the car was small and no more than 5 people
can be accommodated.
• Meant for earning groups who earn a minimum of $220 per month.
• For people who generally wanted to have a better, affordable vehicle than a two-
wheeler and have resisted purchasing four-wheeled vehicles due to their affordability
and maintenance costs.

2. Targeting:
• Tata Nano’s targeting strategy itself was its tagline, “The people’s Car” and “the
world’s inexpensive car”. Their target customers were those who were extremely
price conscious and had the minimum latitude of acceptability.
• The main point of differentiation was the pricing strategy as compared to other
competitors. As this product was meant for almost 70% of the Indian market, it was
Mass-marketed.
3. Positioning:
• Their value proposition itself was “world’s most inexpensive car”. Their product
delivery was more on Monetary value and psychological value.
• The fact that it was of a low cost made people think that the quality and safety would
be compromised.

Considered as a disruptive
innovation for the scooter
markets

Declared as a radical and a “frugal”

innovation
 Decline of Nano

The car was launched in two variants: a basic model priced at Rs1,12,735 and the luxury
version costing Rs1,70,335. The launch of one of the world’s smallest cars sparked
unprecedented euphoria in India and significant excitement across the world. In 2010, around
9,000 units of the Nano were sold. Since then, however, things have been downhill.
By 2011, Tata Motors was selling a mere 500 units a year. This drop in sales can be attributed
to various reasons, the foremost being safety. In 2010, a Nano caught fire in Mumbai, and
over the next few months, several such incidents were reported.
The following are the reasons for the decline:
1. Product’s problem:
• The Nano had poor ride comfort and stability issues due to the lightweight body. Tata
focused on making the car as affordable as possible, so much so that it influenced the
use of cheap and inadequate materials which resulted in a very poor built quality of
the product.
• Numerous fire accidents were reported due to overheating of the engine.
2. Bad positioning:
• Tata Nano was marketed as the cheapest car, thinking that it was enough to motivate
people to buy it. But people did not want to be associated with a cheap car.
• People started to think that cost-effectiveness would come with quality compromises.
Thus, bad marketing caused Tata Nano's failure. The positioning was overhyped by
the media and ultimately backfired.

3. Pricing problem:
• Nano offered more prominent features than two-wheelers but was also affordable than
the then four-wheelers but with fewer amenities. Customers fell in a dilemma because
of the price i.e just 1 lakh rupees that were absurdly cheap for a car.
4. Logic over emotion:
• Purchasing decisions for Indians when it comes to four-wheelers are more emotional
rather than rational. The emotional component was missing from the marketing
campaigns, which instead emphasized the features.
• They failed to capture the audience’s attention by emphasizing more on features of
the car rather than the utility and emotional connection.
5. Negative Publicity:
• The original Tata Nano models frequently caught fire while being driven.
• The car's stability on the highways was impacted by its weightlessness. The base
model didn't have an air conditioner and had a weak engine. These factors together
made the ride of mediocre quality.
• Though they initially priced the car at 1 lakh, the on-road pricing went up to 2.5
lakhs, which when compared to a close rival like Maruti 800 priced at 2.8 lakhs gave
a better-quality product.
• Tata Nano received a Zero-star adult protection rating in a crash test. It failed to meet
the basic UN safety requirements, and thus the very purpose, the safety of the car was
compromised.

6. Positioning problem:
• Nano was an affordable car and gave far better safety and comfort than a two-
wheeler. Though the company had such a brilliant vision, the way it was positioned
had made customers rethink buying this product. It was positioned as the “Cheap car”,
and no one would ever get attached to something cheap.
 SWOT Analysis of Tata Nano

1. Strengths-
• The Tata Nano is quite reasonably priced
• Simple to drive in congested areas
• Compared to other vehicles in its class, the Tata Nano's innovative engineering offers
greater amenities
• Tata Nano has low maintenance and handling costs
• Indian viewers respond positively to good fuel efficiency
• Being a "common man's" car, it generated a lot of talks when it was first presented in
the worldwide automotive business
• The Tata Nano automobile has excellent advertising throughout TV commercials,
print advertisements, web ads, etc.

2. Weaknesses-
• Seen as a cheap item that turns away aspiring shoppers
• The construction of a manufacturing factory in West Bengal created a lot of conflicts
• Reduce Tata Nano's global reach

3. Opportunities-
• Tata Nano may benefit from being the most economical vehicle by advertising to new
buyers.
• Raising per capita income and potential customers' purchasing power
• As soon as possible, promote CNG models and draw in the public's passenger
automobile market.
• Expand into overseas markets, particularly in Europe, to help Tata Nano's company.
• Expanding the network of distribution and services in many nations

4. Tata Nano Threats-

• Rising gasoline prices
• The business of Tata Nano may be impacted by competition from other massive
automakers
• Competitor items with comparable features but lower prices
• Competitors' product breakthroughs and cost-effective engineering
• Losses in sales may result from consumers believing the Tata Nano to be an
inexpensive vehicle
• Tough competitors like Maruti Alto, Hyundai i10, Maruti 800
New Tata Nano Features
 New STP

1. Segmentation –
• Geographic:
- States could be segmented based on the previous data which could tell the
maximum sales numbers.
- Region wise different regions have different and diverse segments of people who
have different needs and wants.
- Density of the Urban and Rural areas could differ in terms of population hence
focus could be put upon maneuverability.

• Demographic:
- Age can play a major role in the needs and wants of a consumer changing with
age. When a consumer starts earning, one wishes to buy a car for their family.
- But because of earning less initially and not having enough savings, these
consumers tend to invest in a car that is pocket family yet suffices their needs and
wants.
- The requirements of a male customer and a female customer can be different
based on their basic requirements.
- The car could be segmented based on the family size of not more than 5 people.
- Family life cycle can be one of the vital decision-making factors based on the
single, married with or without children since the car suggests to be a family car.
- Income groups will be a major deciding factor and can be targeted at people
earning at least 3 to 5 lacs per annum.
- Occupation: students, professionals, homemakers, farmers, retired, unemployed
- Generation that can be targeted is Gen X, millennial Z
- Social class based on the lower middle class, and upper lower class can be an
important reason for the product to relaunch itself.

• Psychographic:

1. Innovators: They may or may not use this car as they tend to go for luxury and premium
products. This customer base will be ready to spend money on the products they find interest
in.
2. Thinkers: Well-educated professionals will be part of this category. They will only buy the
products when they are essentially in use for them-for instance old age people who regard
cars as a waste of money or just need a simple transport means will avoid Nanos.
3. Believers: They will be the group who will be most attracted to the free services or the
lower-cost packages/ services of Tata Nano. A car being sold in a range of Rs 3 Lac-4 Lac
will attract lower-income groups people.
4. Achievers: This category mainly believes in excellence and looks for the right outcomes.
Nano if provided quality, safety, and good average and performance can work to attract them
as they always want to know how well the service works before consuming the products.
5. Strivers: Categorized from the lower income group, they are not high on resources due to
which they will look forward to Nano’s basic manual model Nano Z rather than the automatic
version NanoX.
6. Experiencers: This category of consumers has high resources and are impulsive buyers. Nano
users want to experience the products as new features and redesigning of the product have
been done. For the first phase, they are the prime target market for Nano.
7. Makers: They will attract to the basic packages rather than the premium packages. They are
in the middle-income group with medium resources. Being mostly family-oriented rather than
individual these tend to buy Nano due to the comfort of traveling in a bike the family gets.
This makes them a good target for group/ family packages.
8. Survivors: They have the least resources and will only focus on the free services of those
interested in new products at. The target market may be dicey to buy after a price hike after
the relaunch of the product as these customers have a handful of resources. Causing a shift
from other two-wheelers to Nano Z would be hard for them as they do not take change very
well and take time to adapt to changes.
 2. Targeting –

• Nano has always been a “People’s Car” along with it being fuel efficient and easy to
drive. The target customers are still those who are extremely price conscious and have
a low latitude of acceptability. However, this time the target includes the youth and
students who are more susceptible to new and trendy features in a car.
• The latest safety features appeal to both the students and their parents, especially over
a two-wheeler. Nano has been positioned as an innovative and trendy car, as opposed
to being an extremely affordable car. Another section that can be targeted is old age
people who regard the costly car as a waste of money or just need a simple and
convenient means of transport.

The Differentiated Marketing strategy will be used here.

S. No. Segment Offerings

1. Rural ▪ Expanding the distribution channel to make cars easily
available everywhere in the country.
▪ Organising a lucky draw contest when there is a mela or local
event happening
▪ Providing vehicle insurance free for 1 year
2. Semi-urban ▪ Proper advertisements through TV to make people aware of
the new budget-friendly and safe car
▪ Provide an effective system of finance to low-income groups,
especially those who had difficulties in getting loans

3. Urban ▪ Facility to pre-book via an official website without having to

visit stores Operation of several centers for test drives per
metro area
▪ Providing customizations based on customer requirement
▪ Set up of service centers in all places where it sells cars with
personalized services Provision of an extended warranty of 1
year
Media Planning
Media Platform Goal Strategy
TV Product awareness, The real story behind Ratan
Commercials Intention, to create an Tata launching the Tata
emotional connection Nano can be shown as a TV
with people commercial through which
the public can connect
emotionally. The
advertisement will include
the reveal of the new STP
Social Media Facebook, Instagram, Brand awareness, Create engaging content- to
YouTube Intention, desire generate awareness and start
a conversation.
Facebook campaign:
#allnewNano, a series of
posts communicating the
technology, and features
used in GenY.

Instagram: #MyFirstCar, a
campaign of stories of
people who bought the
GenY as their first car.

YouTube: Paid reviews by

influencers.
Display Ads News apps, popular Intention and desire Limited period test drive
games, wallet apps coupons will be offered.
Print Media Newspaper, Awareness and intention Newspaper: To highlight
Automobile USPs, offers Automobile
magazines
Magazines: Detailed
specifications of car
features, comparisons
between the three models.
Paid reviews by experts.
Sponsorship Awareness Sponsorship events that
connect with the youth,
especially cricket.

Introduce college-level
competitions.
 3. Positioning –
A normal image where a family of four that may ride on a scooter balancing the little child on
the wife’s lap instead gets an opportunity to travel safely and in comfort manner in a small
car.
But now the intention is to position the brand as a quality rich car that can be used by all
kinds of people. Tata Nano is now committed to improving its customer centricity, to better
understand its customer needs. The positioning will be mainly based on the quality and the
new innovative features of the brand rather than focusing more on the price aspect, though
they would continue to sell the car at an affordable price. This strategy will help in
revitalizing all the products that Nano has in one go.
Points of Parity:
These will include those features and attributes that brands in the automobile industry have in
common:
• Great Mileage and Average of the car is the most crucial aspect which every user
looks into for car utility.
• Every driver wants a good and vibrant pickup for a hassle-free ride.
• Comfort and luxury are elements that all the players should ensure for a long duration
of rides. Combined with comes the Safety features i.e it always said ‘Have a safe and
a comfortable journey’.
• Fuel Performance and effective capacity utilization of cars are vital for car evaluation.
Every brand adheres to stick for potential fuel performance.

Points of Differences:
These will include certain attributes that set Nano apart from its competitors and answers the
question “What’s in it for the customers?”
• Compact model of Nano X or Nano Z makes it unique from others as the small model
gives it an opportunity for quick traffic clearance.
• Pricing aspect differentiates Nano from its competitors as getting a car at a low price
equivalent to that of a two-wheeler isn’t possible for others and serves only strength
for TATA Nano.
• Budget Friendly Family Car is the element that is encouraging rural and urban
households to go for Nano and no other player provides cars on such a low budget.
• Convenient and User Friendly to use on an everyday basis performs well and gives
opportunity to traffic populated regions to go for Nano.
• Tata Motors is a very popular brand and the market leader in that period earlier.
Because of The legacy that the brand carries it enjoys huge points of difference in the
eyes of consumers and is a differentiator from other market players. For eg-TATA is
known to use Heavy steel in its automobile products.
 Brand Mantra

For Repositioning,
• Nano should come up with new models of Nano i.e product modification can save the
brand.
• Adding some smart features like improved interior, the exterior look of the car,
increased fuel performance, power steering options, remote less key entry, parking
sensors, Bluetooth wireless phone connectivity and speakers, LED fog lamps,
adjustable seats, automatic wipers, washers, defoggers, sensors, camera, enhanced
safety features, and quality reliance features will all gear up the product image in the
minds of the consumers.
• Tata Nano in an attempt to increase the value for money proposition should work on
the pricing also to attract the public. For the same Nano can have two product variants
i.e Nano Z and NanoX.
• The basic manual model Nano Z is costing on road 2,99,000/- Rs and the automatic
model NanoX is costing 3,80,000/- Rs respectively. A price hike is justified in terms
of newly added features and EV elements in the Automatic model.
• This will help the brand to come out with that old public image of “the world’s
cheapest car”. A car first sold for around 1,00,000 Rs with the basic features equated
to that of a two-wheeler for the general audience. But now NANO Z and NANOX
costing around Rs 3-4 lacs give the buyer an intent to purchase a luxury and
affordable car for his/her family.
• Positioning can be altered without necessarily altering the product, and it frequently
has very little to do with the product. Therefore, if a product's positioning is
unsuccessful, it may be given a new position and a new name.
• Products are frequently redesigned to appeal to a particular market. Adjustment is
done by moving perceptions whether the opinions are held in regard to you or to your
competition.
• The path ahead for Tata Motors is still difficult, but it's also full of opportunities.
• Despite these possibilities, Tata Motors is dedicated to enhancing its customers-things
that are engaging and fit for their Nano has 21% more than 8% less external space
than its nearest competitor, and more inner space than Maruti 800, it’s rival.
• The vehicle centricity, to better comprehend and translate into action the requirements
of the user: utilizing a rear-mounted engine to increase internal space.
• The Nano complies with Euro-IV and Bharat Stage-III emission requirements. The
vehicle complies with environmental protection standards and will be the least in
India's emissions. As a result, it all eyes environmentalists' fears about it being the
cause of increased emission limits for widespread use as well as the perception that
cheap goods are of poor quality. Nano can also replace other overworked and
outdated devices: two- and three-wheeled two-stroke polluting vehicles.
• Its mono-volume design, which places the wheels in the corners and the power train
in the back, allows it to combine room and maneuverability in a way that will be
unmatched by other small cars.
• Weight can be reduced according to the lean design approach, which is beneficial,
maximize the efficiency of use of energy and provide high fuel economy.
• Its all-sheet-metal body includes a sturdy passenger compartment and is equipped
with safety. Crumple zones, intrusion-resistant doors, seat belts, and other features
like sturdy backrests, anchorages, and glass attached to the rear tailgate body.
 Nano’s Marketing Mix

1. Product:
Old Model –
• Ratan Tata's invention, the Nano, was created with a small family in mind. It included
an automatic transmission system for gears, which helped with increasing efficiency
and mileage. Light steel was used to build the car to save costs.
• Its gasoline engine is designed to use less fuel. It has lovely hues and is both stylish
and comfortable. On Indian roads, whether in urban or rural areas, the nano is simple
to drive. The device lives up to its name in that it is small and compact. There are
three varieties of the Tata Nano product line: Nano LX, Nano CX, and Nano.

New Model –
• To address the fire-related problems, Tata Nano needs to be redesigned. Customers
who have already purchased one might be given free safety modifications.
• The new TATA NANO has been given an aesthetic boost by trendy exterior and
interior styling, which can make a statement through its exquisite and modern design,
attractive and sporty style, etc. to appeal to young people.
• High technology, a baby seat, and silence at high speeds are examples of new current
features. A security system with airbags, power brakes, a kid lock, and a remote lock
are a few of the security elements that will be present.
 2. Price:

Old Model –
• The Tata Nano project aimed to create a two-wheeler substitute that was reasonably
priced. It was supposed to be a cost-effective car with an initial price of 100,000 INR.
By the time the cars hit the market, however, a lot of time had passed, and at that
point, the price of raw materials and other costs had increased.
• Due to increased input prices, maintaining Nano's base pricing of Rs. 1 lakh was
extremely challenging. This ultimately caused the base price to increase to '1.37 lakh.
Sales decreased as a result of the psychological barrier for the consumer. However,
Tata Motors Ltd. pledged that the first 100,000 car purchasers would have their
vehicles "price protected," which implies they would receive the vehicles at the
quoted price, regardless of rising costs.

New Model –
• In light of the numerous updates and improvements made to the product, the new base
pricing for NANO Z and NANO X is Rs.2,99,000 and Rs.3,80,000, respectively.
• Special discounts and deals can be provided on a seasonal basis, for example, as
Diwali discounts, New Year offers, discounts based on the number of members in the
family for eg, Special discounts to families having 4 members, etc to entice more
customers.

3. Place:

Old Model –
• Tata Nano's distribution system was also unique compared to modern ones.
Customers with lower incomes were wary and unwilling to enter major Tata Motors
Ltd. stores.
• The initial presumption was that the target audience for Nano would behave normally
and visit showrooms, test drive vehicles, and then purchase them. But the reality has
been quite different. A firm spokeswoman remarked, "They are a little nervous, shy,
and hesitant to come to showrooms." Additionally, Westside and Chroma, it’s retail
and technology superstores, as well as car dealerships, sold it.
• The business did not offer them a location where they could feel at ease getting a
"touch and feel" experience.

New Model –
• The new distribution strategy can be fixed by placing the product out for sale in
places where the target market can be easily reached, such as exhibitions, small
workshops in markets, and colleges.
• After sales services and dealer networks can be improved to stay connected with the
customers and dealers and get feedback from them to make any improvements if
necessary.
 4. Promotion:

Old Model –

• Their marketing strategy was to be creative and economical so that the term "tiny,
charming, and brief" would come to represent Nano. Tata decided against using
television, skipping it in favor of exclusively using print media and radio.
• They also promoted Nano products including baseball hats, key chains, T-shirts, and
other items through online Nano games, Nano chat rooms, Nano conversations on
Facebook, Orkut, and blogs.
• The Tata group also used Tata Sky (satellite television) as a marketing tool, offering
new customers a special 20% discount on their satellite connection in exchange for
presenting their Tata Nano reservation confirmation at any authorized dealer.
Additionally, Westside, a lifestyle retail company owned by the Tata group, promoted
Nano through text messages to customers.

New Model -

• Looking back, the initial advertisements might not have been the best choice. Instead
of being marketed as a "poor, inexpensive" car, the product needs to be presented as a
status of convenience.
• Additionally, significant thought must be given to the young customers when
promoting. On social networking platforms, where today's youth spend the majority
of their time, promotion and advertising can be carried out extensively.
• Trustworthy ads can be stressed where the product will be emotionally communicated
through ads. Promotional activities can also include celebrity ambassadors to cast
away the ‘cheap’ reference that was portrayed before.
 CONCLUSION

Tata Motors made an effort to seize the chance to offer a compact automobile to the Indian
commoner, who could then use it to travel rather than their two-seater motorcycle.
Unfortunately, Tata Nano was mistakenly positioned as the world's cheapest automobile
despite its efforts to be seen as an economical car. The car failed for several reasons,
including poor positioning, but it also failed because it lacked enough legroom, and was made
of cheap materials that did not protect its customers. It also failed to emotionally connect with
its customers. Due to everything mentioned above, the product failed, and the car's
performance started to decline. Although Tata Motors tried to solve its issues it could not
succeed.
To change this, we have positioned the Tata Nano as a high utility everyday use car. All of
the shortcomings, including new quality, engine performance, security, design, and mileage,
are addressed by the new model and its variations. The position of the new STP and
marketing strategies is that the car is a high-quality, practical vehicle that almost anybody
may utilize for transportation and not just the lower-income middle class. Additionally, the
distribution channel has expanded, and new services have also been introduced.
Citations
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www.wikepedia.com

https://gomechanic.in/blog/common-problems-with-the-tata-nano/

https://economictimes.indiatimes.com/reviving-nano-what-tata-

https://journals.sagepub.com/doi/full/10.1177/02560909211040692

https://www.slideshare.net/KirtanPandya/nano-media-plan

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2994727