5th TRIMESTER PROJECT ON

Tata Motors launched their low cost car Nano with lot of fanfare and very little traditional advertising

Submitted by:-

Ritesh Pahuja
D1012SSISBE-A10272(IND-7A-IA-1053) SPRING SUMMER 2010-2012 E-mail:- pahuja.ritesh@rediffmail.com Mob: - +91 8800988808 /+91 9890733355
Date of submission :-11/july/2012

Subject:Advertisement SEC:SP-4

Submitted To: IIPM Examination Department NEW DELHI

IN PARTIAL FULFILLMENT OF REQUIREMENT FOR MASTER OF BUSINESS ADMINISTRATION

INDIAN INSTITUTE OF PLANNING & MANAGEMENT NEW DELHI

Content:-

1. 2. 3. 4.

Literature Review. Conception. Tata Nano intro. Controversies

5. The Release Of the TATA NANO 6. The NANO EFFECT

7. Tata Nano - Strategy, Impact on the Automobile Industry 8. Promotion Strategies :a) Objectives of Promotion Strategies b) Promotion Tag line c) Advertising Program d) Online Advertisement e) Promotion Flow 9.

Evolution:a) Communication strategy b) Internet marketing program implementation c) Online buzz d) Social media communities e) Sms marketing f) Trade shows g) Program launch

10 . Conclusion. 11 . Bibliography

LITERATURE REVIEW
The purpose of this study is to gain a better understanding of factors that influence consumer buying behavior in cars just because of advertisement. Specifically, we considered a number of internal factors that influence consumer behavior including perception, motivation and learning. How a consumers attitude, which is a lasting evaluation of a person, object, or issue, can affect what they buy also examined. Reviewed other factors that influence consumer purchasing decisions and buying behavior including personal, social, and situational issues. The personal influences on consumers are important determinants of their needs and wants. Such factors as age, income, family status, and chosen lifestyle are strongly related to the types of products people buy and the specific brands they select. Examined the stages of the consumer decision-making process for buying a car: problem recognition, information search, evaluation of alternatives between different brands of cars, product choice and post purchase evaluation with respect to after sales service, customer relationship, and resale value of the car. Also addressed the impact of the amount of effort expended and of perceived risk; factors associated with relative importance and perceived consequences of the purchase, from the consumers perspective.

Conception
The project to create the world's most inexpensive car began in 2003, under the Chairman of Tata Motors, Ratan Tata, inspired by the number of Indian families with two-wheeled rather than four-wheeled transport. The Nano's development has been tempered by the company's success in producing the low cost 4 wheeled Ace truck in May 2005. Contrary to speculation that the car might be a simple four-wheeled auto rickshaw, The Times of India reported 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." To achieve its design parameters, Tata has refined the manufacturing process, emphasized innovation and sought new design approaches from suppliers. The car was designed at Italy's Institute of Development in Automotive Engineering with Ratan Tata requesting certain changes, such the elimination of one of two windscreen wipers. The Nano has 21% more interior space and an 8% smaller exterior, when compared with its closest rival, the Maruti 800. The car will come in different versions, including one standard and two deluxe variants. The deluxe version will have air conditioning, but no power steering. The car is expected to be produced in the Singur plant in West Bengal, which is under construction. The initial production target set by Tata Motors is 250,000 units per year

TATA NANO

Manufacturer Parent company Also called Production Assembly Predecessor Class Body style(s) Layout Engine(s) Transmission(s) Wheelbase Length Width

Tata Motors Tata Sons The People's Car 2008 present Singur, Pantnagar & Pune None City car 4-door kei car RR layout 2 cylinder petrol Bosch multi-point fuel injection (single injector) all aluminium 623 cc (38 cu in) 4 speed synchromesh with overdrive in 4th 2,230 mm (87.8 in) 3100 mm (122 in) 1500 mm (59.1 in)

The Tata Nano is a proposed city car first presented by India's Tata Motors at the 9th annual Auto Expo on January 10, 2008 at Pragati Maidan in New Delhi, India.

While currently undergoing final development, the Nano is projected to be a small, affordable, rear-engined, four-passenger car aimed primarily at the Indian market. Newsweek identified the Nano as a part of a "new breed of 21st-century cars" that embody "a contrarian philosophy of smaller, lighter, 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, which includes the Nano. The prefix "Nano" derives from the Greek root 'nanos', meaning dwarf as with nanometre. "Nano" also means "small" in Gujarati, the native language of the Tata family, founders of the Tata Group.

Pricing Strategy 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. As of August, 2008 material costs have risen from 13% to 23% over the cars 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.

Rear mounted engine The use of a rear mounted engine to help maximize interior space makes the Nano similar to the original Fiat 500, another technically innovative "people's car". A concept vehicle similar in styling to the Nano, also with rear engined

layout was proposed by the UK Rover Group in the 1990s to succeed the original Mini but was not put into production. The eventual new Mini was much larger and technically conservative. The independent, and now-defunct, MG Rover Group later based their Rover CityRover on the Tata Indica. Tata is also reported to be contemplating offering a compressed air engine as an option.

Technical specifications According to Tata Group's Chairman Ratan Tata, the Nano is a 33 PS (33 hp/24 kW) car with a 623 cc rear engine and rear wheel drive, and has a fuel economy of 4.55 L/100 km (21.97 km/L, 51.7 mpg (US), 62 mpg (UK)) under city road conditions, and 3.85 L/100 km on highways (25.97 km/L, 61.1 mpg (US), 73.3 mpg (UK)). It is the first time a two-cylinder non-opposed petrol engine will be used in a car with a single balancer shaft. Tata Motors has reportedly filed 34 patents related to the innovations in the design of Nano, with power train accounting for over half of them. The head of Tata Motors' Engineering Research Centre, Girish Wagh has been credited with being one of the brains behind Nano's design.

Controversies
Mass motorization and climate change As the Nano was conceived and designed around introducing the automobile to a sector of the population who are currently using eco-friendly bicycles and motorcycles, environmentalists are concerned that its extraordinarily low price might lead to mass motorization in countries like India and therefore aggravate pollution and global warming. Rajendra Pachauri, an Indian and chair of the Intergovernmental Panel on Climate Change, said he was having nightmares because of this car and added that the car represents bankruptcy of Indias environmental policy. The ecology focused German newspaper die tageszeitung feels that such concerns are inappropriate as the Tata Nano has lower emissions compared to the average Volkswagen, and that developing countries shouldnt be denied the right to motorized mobility when industrialized countries should be looking to reduce their emissions and usage of cars. Die Welt reports that the car conforms with environmental protection, and will have the lowest emissions in India. In crowded metropolitan cities like Mumbai, Ratan tata has conceived a scheme to only offer the Nano to those individuals who do not have an automobile already. Singur car factory land dispute Controversies also arose about Tatas planned manufacturing unit for the car in Singur, West Bengal, where the regional government of West Bengal has allocated 997 acres (4.03 km) 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 Tatas manufacturing unit is located, started burning the car in effigy. In New Delhi, women protested wearing T-shirts bearing slogans that said, The Rs 1 lakh car has Singur peoples blood on it. The Trinamool Congress alleged that Tata motors usurped the agrarian land for the construction site and have threatened to stall the manufacture of the car

THE RELEASE OF THE TATA NANO 1. The concept of automobility originating from the Greek term auto for self puts emphasis on the self-determined, individualistic mode of transportation characteristic to modern society. This concept is increasingly spreading among the world, entering on fast track into the upcoming newly industrialized countries. The projections for economically booming countries like China and India reveal a two-digit percentage growth of car sales for the upcoming decades, assuming that China is likely to outrun the United States and become the largest automotive market worldwide by approximately 2020. The individual ownership of cars, especially in countries which can only partially provide convenient public transport, has become a symbol for personal freedom, status and economic success. 2. In this context the release of the Tata Nano at the Auto Expo in Delhi/India on the 9th of January 2008 resulted in an international and national uproar and conflicting responses. The Nano, with its price of around Rs 1 Lakh (~1800 Euro), the cheapest car worldwide, brought about a great enthusiasm about the Indian car market but at the same time caused outcries of environmentalists arguing that with its launch the emission would dramatically increase and the already overloaded streets in urban India would be even more congested and polluted. 3. With regard to the launch of the Nano, Anumita Roychowdhury, working as Associate Director, Research and Advocacy at the Centre for Science and Environment, a long term partner organization to the Heinrich Bll Foundation, comments on the Nano and the current transport situation in Indias cities from an environmentalist point of view.

10

THE NANO EFFECT Nano, the new low cost car unveiled by Tata Motors at the Auto India Expo at Delhi last month, has set the country abuzz. There has been considerable hype surrounding the car. Some commentators have declared the advent of this car as a transportation revolution, an event as significant as the launch of the Model T by Henry Ford. Others have argued the Nano will democratise car ownership, and even a happening that may upturn the brahminical order in the country. On the technology front, the Nano certainly epitomises Indias progress in innovation, packed as it is with several firsts. Tata Motors has filed over 34 patents for the car. In particular, a great deal of innovation has gone into the drive train and its placement and half the patents filed pertain to the drive train alone. One of the key patents is the introduction of a balancer shaft to iron out the vibrations typical for a twin-cylinder engine. The on-road price of the basic model (with manual transmission and without air-conditioning, electric windows and power steering) after registration, taxes and insurance will be around Rs125,000 whereas the deluxe models will cost around Rs150,000. Thus, the round figure of Rs100,000(++) is symbolic and the price tag is ostensibly meant to get Indias two-wheeler segment into motorcars. Mr. Ratan Tata is quoted as having said he was motivated to develop an inexpensive car when he saw, the father (riding) the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby. The Nano is expected to hit the roads in late October this year at the time of the festival of Diwali. It will be manufactured at the Tata Motors plant at Singur in West Bengal with an annual production capacity of 250,000 units. Given the ongoing local unrest, however the company may have to relocate production to other locations. If this were to happen there could be a delay in the delivery schedule.

11

 This brief focuses on the economics of owning and operating a Nano and its impact on automobilisation in the country. Issues related to impact on air quality and congestion are addressed in a companion ISAS brief. The implication of the impending advent of an inexpensive passenger car such as the Nano on urban transport in India has to be seen in the context of overall trends in motorisation in the country. Auto sales in India almost doubled in five years from about 5.23 million units in 2001-02 to 10.11 million units in 2006-07 During the last financial year (2006-07) alone, sales of passenger cars grew at a scorching rate of 22 percent. Over the same period, sales of two-wheelers went up by about 11.5 percent. Thus, merits of the case aside, it is evident that the country is rapidly motorising. And with incomes rising in an economy growing at a rate of eight percent or more annually, there is no sign of this abating.

12

Tata Nano - Strategy, Impact on the Automobile Industry

Cost Management and Strategy used The great wonder car by Tatas has stunned the entire world. Critics who often said that it was not possible to make a car at a price below $3000 were taken to a back sit when Ratan Tata the chairman of Tata Motors unveiled this car in New Delhi at a price of $2500. Since then it has been in lime light and has been making news in the auto sector throughout the world. Much of India's low-cost production edge comes from cheap labor and a large part of the low-cost assembly in factories and plants is done through manual operations. However this situation is changing fast with companies wanting to increase productivity by automating their lines. Tata cut costs by minimizing components, particularly steel, and taking advantage of Indias low production costs. Because of its size, it requires less metal, has a smaller and lighter engine than other cars, smaller tube-less tyres and a basic interior. Tata divided the components into two types proprietary designs and Tata Motors design. For proprietary design components, Tata went with established suppliers who then worked on the development from Indian technology centers hence saving further cost. The cost associated with employing engineers in international development centers was a costly affair which made Tatas use local design capabilities.

For components and systems designed in-house, Tata Motors chose suppliers with strong process capabilities who could give valuable suggestions and improvements in the designs. Nearly everything has been sourced locally and the Nano boasts of greater than 95% of content sourced locally since day 1. Tatas suppliers were an integral part of the design and development process. Tata not only worked on its own processes but also helped its vendors innovate.

13

Instead of annual contracts, Tata went with long term volume contracts with its suppliers, driving down the costs even further. A three-shift operation and consolidated purchasing with...

14

Branding Brands identify the source or maker of a product and allow consumers either Individuals or organisations to assign responsibility for its performance to a particular Manufacturer or distributor. Branding is endowing products and services with the power of a brand. Its all about creating differences between products. For branding strategies to be successful and brand value to be created, consumers must be convinced there are meaningful differences among brands in the product or service category. In Tata Nanos case, the branding strategy used is corporate name combined with individual product names. This companys name legitimises and the individual name individualises the new product

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.
PROMOTION STRATEGIES

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 July 2009. So first of

15

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 Malaysians, 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 Nano car. We can do the comparison with other cars which are 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. Promotion Tag line Have Fun, Pay Less, get more with Tata Nano Why we establish this tag line? Because this is make all the Malaysian to 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 enjoying special fun with Tatanano, our earth also will feel happy with Tatanano because Tatanano also is the environment friendly car.

16

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

First step we start before lunching Tata Nano, we do the online advertisement. Tata Nano created a Web site 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 which are regularly updated online diaries. Blogs is bringing together people with common interests. They vary wide and can influence a vast audience due to many internet users have read 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. 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

17

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.

Radio Advertisement

Most of the Malaysians 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.

Newspaper Advertisement

Beside that the radio, most of the Malaysians 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 Malaysians. Newspaper advertising is inexpensive.

Promotion Flow

Marketing Campaign/Event

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 Tatanano to target market by face by face and provide the opportunities to them try to drive the Tatanano. Indirect ways are we will do the dvertisement

18

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.

19

Evolution:Promotion Tata nano is promoted mostly in leading newspaper in india.also they are advertising in magazines as well. when nano was first out locked in india they advertise on the first full page of newspaper just to raise and turn the people face turn aroud towards their product also they are advertisement on hoarding on most viewable sites around the cities in whole country mainly in the places like bus standrailway stations , main mall ,also when someone made the online booking they are givivng merchandise to them such as t-shirts ,watches and phone.

In internet sector communities and

they are promoting it through social websites by form

group on facebook ,orkut and other social networking websites. They are also conducting online contests in which they excite the people to participate in it and upon winning they can drive away nano.

Tata Nano has recently sponsored a reality show in india nano was the key sponsor for the program. Tata nano is also co-partner in the cricket series with new Zealand .they gave tata nano to each man of the match in a tournament .cricket is a famous sport in india,they did well by promoting the nano through this sport. Nano has started a new campaign in their show room .they are marketing nano such a way that they are convincing people to test drive a nano and fill a simple form after the ride and that form will go in a luck draw and if they won they can own a tata nano.

20

communication strategy

Tata has innovate communicated with whole work about their new product called nano in a effective way through media ,trade shows and auto shows. . Internet . Mainly from word of mouth . Pre launching the tata nano They have raised the curiosity all over world by just publishing that it is a 1lakh car and worlds cheapest car.

Internet marketing program implementation

Internet marketing is one of the most important aspects of an effective website .internet marketing is a piece of the puzzle that joins your development efforts with actual sales. a) Online buzz:- nano has gone beyond the traditional methoda of advertising and promotion online. b)Social media communities:official orkut community member -6906 official facebook community page-4210 highest view count on youtube -303006 no. of blog posts 61664

Tata have a blog on the official website where they have been discussing quite interesting topics and generally maintain an active community.

c) Advertising -tv and pther mass media will be less effective thus too much money will not be invested in thid regard . mainlyword ofmounth advetising will get more emphisis.internet will be a major media for advertising.

21

Tata motor have creates a special website for tata nano car .there are several listing in all the major car site like autocar.com d)Sms marketing:-advertising through sending text messeage. using the existing database of targeted customer. e) Trade shows- a trade fairin an exhibition organized so that companies in a specific industry can showcase and demonstration their lastest product service such as auto expo and auto fair. f) Program launch- special launchinf of nano done in auto expo held in india last year creating a hype was good medium.

22

Conclusion:-

Introduction of the Nano received media attention its targeted low price .the car was envisioned by Ratan Tata , chairman of the Tata Group and Tata Motors who has described it as an eco friendly peoples car nano has been gratly appreciated by many sources about the media for its low cost and eco friendly initiatives which include using compressed air as fuel and an electric version(e nano).Tata group is expected to mass manufacture the nano, particularly the electric version and beside selling them in india to export them worldwide

23

Bibliography

www.tatamotors.com www.tatanano.com
en.wikipedia.org/wiki/Tata_Nano tatanano.inservices.tatamotors.com/tatamotors/home.htm www.facebook.com/TataNanoPage www.tatanano.net

24