a) How was the marketing mix for Tata Nano developed?

Explain it with a
figure.

Meet All
Standard
s

Affordabl
e

People's
Car

Product
Survive

Reach
Rural
Buyers

Promotio
n

Price
Positionin
g
Strategy

Tata Nano
Marketing Mix

Price

Maximize
Market
Share

Place
Worldwid
e
Distributi
on

Own
Showroo
ms

Dealershi
p

Market
Penetrati
on

Product
I saw families riding around on scooters with kids standing up & the mother
carrying a baby & decided to do something about it. It started as a quest for
affordable transportation solution
-Ratan Tata

Affordable
Tata Nano was built with affordability in mind. The One Lakh Rupee price tag
however, was not fixed by Tata group at first. It was the word of mouth of people
that fixed that range. The expectation of the people created a big challenge for the
company. To achieve the target, they did the following

Reduce consumption of material being used

Alternate suppliers to get same material at fewer prices
Use alternate of some materials
Eliminate use of some expensive materials

Meet all standards

To meet all standards, they had to achieve performance targets such as fuel
efficiency and acceleration capacity and adhere to regulatory requirements. To meet
these requirements, Tata Motors decided to produce three variants in the Nano
range: Nano, Nano CX and Nano LX. The features of the car are as follows:

Stylish and comfortable

Fuel-efficient engine
Meets all safety requirements
Environment-friendly

The Tata Nano CX, includes all the features described. Nanos were announced to be
sold with a four-year warranty or 60,000km warranty, whichever comes first.
Peoples Car
The car itself was expected to expand the Indian car market by 65%, according to
rating agency CRISIL. It was targeted for the lower and middle income group. Take
the Great Indian Middle class, for instance; further divided into Upper, Middle and
the Lower middle class.

For the lower middle class, the Nano will be their first car.

For the middle-middle class, it will be their second car, wheels they can take
to the local market.
For the Upper-middle class, Nano will possibly be the third in their garage, for
their 'Old People' to ride around.

Price
The objectives of the pricing strategy for Tata Nano were: Survival, market
penetration and maximize market share.
Survival
Expected intense competition from Maruti for a share of the automotive market
segment for the below 1,000 cc category spurred Tata Motors to ensure that the
price of the Nano covered variable costs and fixed costs. In this case, survival is a
short term objective as in the long run, Tata will add value such as added safety
features to the Nano range.
Market penetration
Tata Motors implemented market penetration pricing, which is to set a low price for
a new car in order to attract a large number of buyers and a large market share.
This will be done by achieving high sales volume, which will result in falling costs,
allowing the company to cut its price even further.
Maximize Market Share
Indian car market is highly price sensitive, as a low price produces more market
growth. Tata Motors is confident that production and distribution costs will fall as
sales volume increases and low price of Nano cars will help to keep out competition
and maintain its low-price position.

Place

Own Showrooms
As the segment of the Tata Nano is very wide, there is huge number of retail outlets
available for Tata. Around 600 outlets were available initially in which Tata Nano and
other products would be sold. With the invention of Tata Nano, the company decided
to increase the number of outlets as the target market was Semi-urban and rural
market.
Dealership

Tata Motors has an extensive dealer network covering Indian and International
markets. Wherever you are, there is a Tata Motors Sales and Service dealership
close to you. The channel of distribution, physical location, and dealership method
of distribution and sales is generally adopted. The distribution of vehicle must be in
a very systematic way, from the plant to dealership and to end user. This is not only
in India itself but also to the world-wide dealership.
Worldwide Distribution

Promotion:
Price Positioning Strategy
The one lakh car that drives one billion dreams
As the target customers for Tata Nano were lower and middle income families, who
aspire to upgrade to 4- wheelers from being 2-wheeler users and since many of
such families stay away from purchasing 4- wheelers primarily due to the
affordability factor. Management at Tata Motors tried to focus on the price factor
and developed Price Positioning Strategy for Tata Nano. Tata Nano tried to position
itself as the most Affordable Car in the world. The former Chairman of Tata, Mr.
Ratan Tata, has envisioned Tata Nano to become a Peoples car
Reach Rural Buyers
For potential buyers in smaller cities, towns and villages, Tata Motors planned to
adopt a multi-pronged approach. In the villages and smaller towns, the company
plans to use devices such as floats to communicate the basic values of the Nano
brand such as fuel efficiency and total cost of ownership while in metros it would
continue to engage youngsters aspiring for a car that can be customized for colour
and features.