CASE STUDY- TATA NANO

Ayush Javeri
Prateek Garg
Tejas Deoras
DELAYED INDIAN AUTOMOBILE
INDUSTRY? PAL, HM? OR MUL?
 Pre and Post independence till 1990 – suppressive
policies and licensing
 PAL, HM – no reason to innovate or improve quality

 Increasing customer demand

 MUL – international, technologically better, pleasing

performance
OBJECTIVE, KEY FOCUS &
CHALLENGES
 Meet a promise – make India’s Volkswagen
 Maintain performance, style and quality

 Low cost: Vendors, technology, supply chain,

recession
 Criticism, discouragement, speculation

 TMC, Mamata Banerjee

BUZZ MARKETING
 Promise, Price
 Pre existing credentials, internationally revered
group
 Pre-launch/initial publicity – was available for free
from critics and competitors
 Comparison to established legend – Ford Model T

 The BAD ‘M’ vs the GOOD ‘M’ (you know who!)

…20TH CENTURY? 21ST
CENTURY…
 Spoilt for choice and want the best

 Aware of market movements

 Actively maximize utility from amongst choices

present

 Impatient- delays in service are unacceptable

 Want the world at their fingertips for free

MARKETING MIX VIS-À-VIS
THE NANO
THE CAR
THE PRODUCT
Its marketing function was made simpler due to Tata’s legacy in
entrepreneurship, years of engineering excellence in
production of commercial vehicles, consumer goods, FMCG
products and the image of Tata Motors in general and Ratan
Tata in particular.

 Four wheeler, 624cc engine with 37bhp and 27Kmpl fuel

efficiency. Rear engine, front wheel drive. Safety and emission
standard compliant.
….. available for a little over Rs 1lac(2500$)!
….. more affordable than an expensiveTAG HEUER!
 Appearance – Stylized with functional considerations to
appeal to the masses

 Service network- Throughout India and Europe too through

JLR.
PRODUCT COMPARISON

  Nano Maruti 800 Alto

Displacement
624 cc 796 cc 796 cc
(cc)
Maximum 35 PS @ 5250 37.3 PS @ 47 PS @ 6200
Power +/- 250 rpm 5000 rpm rpm

Maximum 48 NM @ 3000 59 Nm @ 2500 62 Nm @ 3000

Torque +/- 500 rpm rpm rpm
PRICING
 The nano is centered around its price point
 Price points at 120,000.. 140,000 and 170,000

 Financed by many Indian banks with interest rates

varying from 9.5-13.5% p.a

 Tie ups with Tata dealerships (Indicom, Titan,

Croma, Westside) for sale of booking forms
PLACE: CHANNEL ANALYSIS
Tata plans to involve third party assemblers to
assemble the nano from knocked down units
to meet expected volumes and reduce the
time-to-market.
Considerations
 As quoted by Mr. Ratan Tata, manufacturing planning was
done by attempting to mimic best practices from mass
assembly manufacturing industries like PC makers. Since
assembly is the norm in such industries, the Nano will have
an easier transition if the licensing route is to be implemented.
 The licensing route should take into account the geographical
factor. Since licensing should be done if a supply shortage
exists, individual markets need to be analysed beforehand.
 Out of house assembly requires the automobile design to take
into account that individual pieces of the’ jigsaw puzzle’ need
to fit easily enough to be put together by assemblers.
CHANNEL ANALYSIS: THIRD PARTY
ASSEMBLY
Advantages:
 Unlike the Indica, vendors have been involved in the
manufacturing process from the start
 Tata can hence attempt to leverage the networks of its vendors
to enhance its optimal distribution paths.
Drawbacks:
 Since the product is very price sensitive, the inclusion of
middlemen in the form of third party assemblers can drive prices
up
 From wheels with three nuts to a an engine that is located below
the rear seat and inclined at 14 degrees to complement the rear
seat incline, the Nano contains many deviations from standard
processes that can make the outsourcing of its assembly an
infeasible process.
ORDER WINNERS
 The Nano’s supply chain will
be well established by the
time competitors introduce
their low cost vehicles. This
will make it difficult to dent
long term sales of the Nano.
Customers might prefer other
options in the short term- but
only so long as the novelty
factor lasts.
 The car will be well tested by
the time other options are
available.

97% of the car’s components are sourced locally. Coupled with Tata’s in
house production of parts via Tata Steel, Tata Johnson controls etc., the
Nano’s price point will be difficult to beat.
SEGMENTATION
 On the basis of price, features:
 Class A,
B, C, D
 SUV, MUV, Hatchbacks etc.

 Geographically:
 Tier I, II, III cities

 Purchasing power: special focus on attracting the

youth which form a major chunk of our population
AD ADVICE FOR INDIA’S FOLKSWAGEN
 The rationale for the pitch would essentially be that
the new emerging India has a strong streak of
ambition
 Taglines:
 Contract advertising: Chhoti Car, Badhe Sapne
 Leo Burnett: Azadi Ki Dusri Lehar
 BBDO India:  Nano, is contemporary and instantly
likeable name which represents a new consciousness
and has label value. It has a sing-song quality that also
makes it memorable
 A LATERAL RESEMBLANCE?
After about a century,
Christopher
Tata Nolan’s ‘The
Motors manufactured Prestige’
a vehicle
The much
seedssuperior
for Nano’sto Model ‘T’ that
marketing weredelivered a
power of 34 bhp and 50 miles persown
gallon (mpg)
way backcompared with 20
in 2003, when hp and
Ratan Tata20 mpg
of Model ‘T’. Nano is also about two and halfintimes more fuel efficient for a price
announced
of….. A magic
$2,500, actconstant
which in consists of
dollars three
is only
Geneva essential
one-sixth
Auto Show thatingredients
seducedModel‘T’buyers
he would make a
people’s car for about INR 1 lakh ($2,500)
within 5
1. The pledge years
Criticism and negative propaganda
about the product led to publicity,
curiosity and information sharing, thus
2. The Turn making Nano a hot topic for discussion
in media and public.
3. The Prestige
THANK YOU!
IM-16
Group 13