This action might not be possible to undo. Are you sure you want to continue?
SCHOOL OF MANAGEMENT
DEPARTMENT OF COMMERCE
ASSIGNMENT MARKETING MANAGEMENT SUBMITTED TO Dr. VELMURUGAN DEPT.COM BUSINESS FINANCE . OF COMMERCE SUBMITTED BY NAMITHA K CHERIYAN I M.
A CASE STUDY ON NEW PRODUCT DEVELOPMENT OF TATA TATA NANO .
it has set up an industrial joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and Fiat powertrains. Bangladesh. Russia. which India and the world have been looking forward to. sales. In January 2008. Pantnagar (Uttarakhand). Africa. The Company's dealership. Pune (Maharashtra). best in the products we deliver.INTRODUCTION Tata Motors Limited is India’s largest automobile company. Ukraine." Established in 1945. The Company's over 25.23. South Asia and South America. and best in our value system and ethics. It is the leader in commercial vehicles in each segment. services and spare parts network comprises over 3500 touch points.000 employees are guided by the vision to be "best in the manner in which we operate. Through subsidiaries and associate companies. Thailand and Spain. Tata Motors' presence indeed cuts across the length and breadth of India. It has franchisee/joint venture assembly operations in Kenya. with consolidated revenues of Rs. The Tata Nano has been subsequently launched. Tata Motors. the Tata Nano.1. which signifies a first for the global . has also emerged as an international automobile company. Over 5. South East Asia. Following a strategic alliance with Fiat in 2005. The Company is the world's fourth largest truck manufacturer. The Company's commercial and passenger vehicles are already being marketed in several countries in Europe. Tata Motors also distributes and markets Fiat branded cars in India. Lucknow (Uttar Pradesh). established through exports since 1961. the Middle East. Senegal and South Africa. and the world's third largest bus manufacturer. The Company's manufacturing base in India is spread across Jamshedpur (Jharkhand). South Korea. Tata Motors is also expanding its international footprint. A development. Tata Motors unveiled its People's Car. midsize car and utility vehicle segments. and among the top three in passenger vehicles with winning products in the compact. Tata Motors has operations in the UK.9 million Tata vehicles ply on Indian roads.133 crores (USD 27 billion) in 2010-11. Sanand (Gujarat) and Dharwad (Karnataka). in India in March 2009. as planned. since the first rolled out in 1954. the first Company from India's engineering sector to be listed in the New York Stock Exchange (September 2004).
In India at that time. The father would drive with his son on the floorboard in front of him and the mother seated pillion. The lean design strategy has helped minimise weight. Its mono-volume design will set a new benchmark among small cars. With the foundation of its rich heritage. 2008 at the Auto Expo. The concept behind the creation of the People’s Car was to fill the status void that was felt by the middle class families.1 lakh? “In India.00. Tata Motors today is etching a refulgent future.Ratan Tata It all started with a dream which was translated into a reality on the 10th of January. Its tailpipe emission performance too exceeds regulatory requirements. IDEA SCREENING The next step was the screening of idea. it has a lower pollution level than two-wheelers being manufactured in India today. In terms of overall pollutants.1.000 (excluding VAT and transportation cost). a middle class family would travel by scooter in the classic. The high fuel 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. the Nano brings the comfort and safety of a car within the reach of thousands of families.automobile industry. CARS for a young family were far out of reach and is still the same.”. Delhi. which helps maximise performance per unit of energy consumed and delivers high fuel efficiency. It can comfortably seat four persons. The standard version has been priced at Rs. death-defying Indian fashion. IDEA GENERATION How did TATA known for making lumbering trucks come out with a “cute as a bug” car that its rivals could not built to a target price of Rs. it has a roomy passenger compartment with generous leg space and head room. cradling her infant daughter in her arms. Designed with a family in mind. Its safety performance exceeds regulatory requirements in India. How is this dream possible? What should they make? .
" the young man said. longtime chairman of Tata Motors. Thus the new product was now to be developed. I would have better marriage prospects in my village. Why? Why? Why do you want a four-wheeler?" Wagh remembered.• • • • • • • • A scooter with two extra wheels at the back for better stability? An Auto-rickshaw with four wheels? A three wheeled car like a closed auto. Drivers of three-wheelers are looked down upon in India. who was a key figure in the Tata Nano project did something that no one at Tata Motors ever had: He talked to customers. He says. he got the real answer." he says. insisting that it can and will. Girish Wagh. The car was to cost Rs. a ton of onions or potatoes. not just practical.” Trying to build a car cheap enough for motorcycle buyers seems to make sense now but seemed crazy several years ago when Ratan Tata. Finally. as sunset approached. there will hopefully be a new definition of low-cost. “Ah! That’s just a scooter with four wheels or an autorickshaw with four wheels & not really a Car. . one night.rickshaw?? A four wheeled car made of Engineering Plastics? A Four wheeled rural car? Rolled up Plastic curtains in place of windows? Openings like Auto rickshaws from the side A four wheeled open car with safety side bars? But the market wanted a car and if they build a people’s car it should be a car and not something that people would say.” CONCEPT TESTING AND DEVLOPMENT Before starting the project. Wagh stuck with one rickshaw driver. It turned out it wasn't really a problem of transportation of vegetables “If I had a four-wheeler. first mentioned his dream of building a one-lakh car in 2003. "I kept asking the question. 1 lakh on road. the Vice President & Head of Small Car Project of Tata Motors. “After we get done with it. Wagh realized that four wheels had emotional. "They are still saying it can't be done. The three-wheeler men inevitably insisted on a cheap. appeal. say. dependable truck that could go from village to market carrying.
Tata gave three requirements for the new vehicle: It should be low-cost. If it had been an upgraded scooter on four wheels. What shook the automobile world most was the fact that the designers seem to have done the impossible: The sleek. sophisticated Nano didnt look flimsy or inexpensive. Tata still would have been applauded for making a family of four safer on Indian roads. however. it was in a mindset change". and Ratan Tata stepped out of the driver's seat with ease. . The car has to be designed so that it can be exported to other countries as the domestic demand may not materialize as per projections. It was closer to a quadricycle than a car. But failure didn’t stop them. was still dismal. That quest to build the world's cheapest car hasn't ended. The Nano. when Ratan Tata. The mission began back in 2003. The body had to be changed because Ratan Tata.The car should be built on a different platform than conventional ones. affords both safety and status. The attention to detail paid off: When the car rolled onto the dais at the Auto Show in New Delhi in January. The car must be a beacon for the Indian Automobile industry and prove to the world that we are capable to take any challenge and come out worthy winners. which boosted the power by nearly 20 per cent. It must be meeting all the safety and regulatory requirements. wanted it to be easy for tall people to get in and out of the car. They quickly realized it was necessary to bring everyone on board. it made an immediate impact. even a bigger engine. Everyone from manufacturers to vendor development teams were asked to be a part of decision-making. set a challenge to build a "people's car". The design team initially came up with a vehicle which had bars instead of doors and plastic flaps to keep out the monsoon rains. adhere to regulatory requirements. and the first prototype. and achieve performance targets such as fuel efficiency and acceleration capacity. "The innovation wasn't in technology. over six feet tall himself. chairman of Tata Motors and the $50 billion Tata conglomerate.
1 Lac. Alternate Suppliers to get same material at fewer prices. TATA used the concept of Disruptive Technology which was cheaper than existing Technology. is convenient to use and brings radical changes. no conventional design would work as the costs shall be higher and so the entire car has to be redesigned. Use alternate materials. much higher performing. The design has to question the need of each and every component from the point of view of its necessity of existence and also the minimum requirements of its functionality. The Alternatives are: Reduce Consumption of Material being used. The Guiding factor was that the cost has to be minimized for each component yet maintaining its basic functionality.BUSINESS ANALYSIS Since the car had to be built within a cost of Rs. . What makes Nano so less expensive can be well understood from the following diagram.
He vetoed the design of the windshield wipers. The Decisions were: Establish factory in a tax free zone. Get special concessions from State Govt. If only 10% customers of 9 Million two wheeler market transit to 4-wheelers it shall amount to 50% of the passenger car market share. 1 Lakh. The Guiding factor was that the tax structure. In short select a manufacturing location where all the advantages could be achieved.000 cars per year. must support the final cost of Rs. but Tata himself ordered changes along the way. “how much to produce?” It was estimated that the demand for the people’s car shall be at least twice the demand for Maruti 800. Initial projections were at about 500.wheeler segment. His solution was a single wiper instead of two. Get the suppliers to establish base near the factory. Get the tax advantages on infrastructure development. It was decided to set up plants with 5 lakhs cars per annum capacity and ramp the same up in stages. TOTAL SALES ESTIMATION Now the question was. The target was very clearly defined that within the given cost structure of 1 Lakh all the components have to be allocated a maximum price and the same had to be achieved using the available alternatives. on materials and manufacturing. in line with increase in market demand. The basic reason was the conviction that the target price shall redefine the 4 . . The price decision of Rs 1 lakh is definitely going to make a lot many people transit to 4-wheeler fold and that shall explode the demand. the lowest end car.The design was outsourced to Italy's Institute of Development in Automotive Engineering.
Engine Management System by Bosch Superb control over emission and smooth acceleration. Low capacity. Comfortable leg room.c. Single Wiper in place of two.PRODUCT DEVELOPMENT And finally the product was developed with the following features: Engine Capacity of Bosch 624 c.6m Less length but more inner cabin space due to height. Higher thermal conductivity than cast iron. Tube less Tires. H: 1. Cost effective. Better ride than Maruti 800. seat belts. intrusion resistant doors. Single piece ribbed steel body with safety features such as crumple zones. strong seats & anchorages. Instrument console in the centre Elegant to look at and can be used both in Left Hand & Right hand version.1m. And in line with modern vehicles. COMMERCIALIZATION The decision was that it will be commercialized in whole of India. Dimensions L: 3. It was mostly targeted to the middle class and lower middle class people. W: 1. . All Aluminium Engine. Lighter and so better mileage. Lighter.5m. sufficient with better Power Rear Engine to reduce the transmission length using a balancer shaft. Safety requirements are adequately met. Cost reductions 200 Rs. 4 Speed Manual Gear Box. Weight reduced by 2 Kg. Independent Front & Rear Suspension McPherson Strut in Front & Coil spring & trailing arm in rear. twin cylinder.
radio and other media. There is only limitted TV campaign. the Tata Motors team decided to sell the Nano not just through Tata car dealerships across the country. Nano is not big on advertising. Nano chatrooms on the Net.INNOVATIVE MARKETING Tata decided to sell its ultra cheap new car through its own retail and electronics megastore outlets as well as auto dealerships The Rs 1 lakh car. It is also available a whole range of Nano merchandise like baseball caps. . Unlike most small cars. opted for "cost-effective and innovative use of media. To make the car more easily accessible to people. T-shirts and key chains." "The idea was to make the Nano part of our everyday lingo like 'see you after a nano. The Nano's overall marketing strategy uses conventional media in an unconventional manner." said a person familiar with the Nano marketing strategy. which broke new ground in design. cute and brief. among others. the least expensive production car in the world at about 120. particularly the web. but also through conventional retail outlets like Westside and Croma. Orkut and blogspaces. The Tata team is working on Nano news in papers. but there are innovative use of print. Nano breaks on radio. engineering and production processes. According to people in the ad industry with direct knowledge of the Nano's marketing strategy." say people with knowledge of the Nano marketing strategy. Nano appearing in the form of messages or ticker news on TV. Tata Motors launched Tata Nano. online Nano games.000 (US $3000) including tax. Westside and Croma outlets now display the Nano and also take bookings. the campaign is cost-effective and innovative so that Nano became synonymous with anything "small. Nano pop-ups on major websites and Nano conversation on Facebook. CONCLUSION In January 2008.' it was a totally word-of-mouth campaign.
org . A battery version is also planned now.wikipedia.Tata Nano has launched in India on March 23rd.com 4. now. leadership. lot to think. include the shifting of its plant from Singur to Uttarakhand. the most eagerly anticipated and much delayed small car . It should be believed that nothing is impossible. www. planning. The story of making of a 1 Lakh cost car gives us a great lesson of hard work. Tata Nano Europa has been developed for sale in developed economies and is to hit markets in 2010 and 2011 while the normal Nano should hit markets in South Africa. www. highly effective management and marketing strategies. Indian Economy by Dhankar Publications 2.tatamotors. 2009. REFERENCE: 1. Ratan Tata’s dream became a reality. Kenya and countries in Asia and Africa by late 2009.Tata has faced controversy over developing the Nano as some environmentalists are concerned that the launch of such a low-priced car could lead to mass motorization in India with adverse effects on pollution and global warming. However After the infamous journey. There are lot to learn. Google search engine 3. commitment.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.