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TATA MOTORS NANO TO ROLL OUT

The worlds cheapest car, the widely awaited Nano, will be launched on 23 03 09. Tata motors
will display the Nano at dealership from the first week of April, 09 and will accept bookings from the
second week of April, 09. The launch ofNano whose potential to revolutionize the automobile industry
has been widely acknowledged in India and abroad, will be one of the bright spots in a bleak landscape
for the global automobile industry.
Sales have plunged by double-digit percentages, or worse, in market across the world from US to
China. In India, Nanos entry might lead to growth in the domestic market.
.
The car may also find a niche abroad, a cash-strapped consumers are likely to look for bargains.
In 2008, Tata Motors displayed the Nano at the Geneva Motor show and plans to present the
European version at the show in March, 2009. It plans to sell Nano in Europe at 5000 Euros.
Tata Motors will roll out 60,000 80,000 units of the Nano from another plant in pantnagar in
Uttarkhand till the sanand unit is geared upto produce 2.5lakh units a year.
Tata Motors has began aggressively gearing up its distribution network to sell a car, which will
primarily focus on semi-urban and rural areas.
The base version of the Nano, which will be without an A.C. will be priced at around Rs. one lakh
while the A.C. model will carry a higher price tag.
It is learnt that Tata Motors Finance is working on various packages through SBI and HDFC
Bank, to offer competitive interest rates.
Dealer of Tata Motors said that company might take full payment for booking. Sona Koyo
steering systems executive chairman said. Nano is the most awaited car, and, therefore, its launch is
welcomed by the world.
Questions:
1) Carry out an Environment Analysis for Tata Motors.
2) With the launch of Nano Car, will Tata Motors have Sustainable Competitive Advantage (SCA)?
Justify your answer.

A Very Intriguing Package :


It is not quite often that a positive product feature becomes an albatross around the neck of a
company. VIP Industries had held sway for over two decades in the organized Indian luggage market on
the basis of the durability of its moulded suitcases. Obviously, the customer perceives value-for-money in
the long-lasting, reasonably priced. Alfa brand of VIP suitcases which sells 1.5 lakh pieces a month. But
this means that having bought one suitcase the customer can do with it for several years. Market research
by the company shows that an average Indian family pulls out the suitcase merely for outstation travel a
few times a year. Hence, there is no pressing need for continual replacement of the old luggage.
The VIP products are made of virgin polymer as compound to the recycled grade I and II
polymers used by the unorganized sector. They are subjected to stringent stress tests for quality control.
VIP has a presence in a wide range of the market segments within a price spectrum of Rs. 295 to
Rs. 6,000 a piece. It is here that the competition from the unorganized sector hurts the company most.
VIPs economically-priced brand, Alfa is widely imitated and sold at much lower prices. This enables the
unorganized sector to typically sell 20 times more than VIP can. The lower price threshold seems to be
Rs. 225 which is nearly impossible for VIP to achieve given its cost structure. In the Rs. 1500 plus
premium range, VIP has to contend with Samsonite which is a formidable competitor.
The obvious tactic for VIP has been to cut costs. Distribution and logistics is one area where
valiant efforts have been made at cost reduction. VIP has four factories located in the heart of India. The
average distribution costs come to Rs. 7 to Rs. 8 a piece. Reduction in cost has been attempted through
distributed manufacturing by having vendors making the product at different locations, thereby, avoiding
transportation of high-volume suitcases across long distances and reducing inventory build-up in the
channel.
Severe pressure on sales has resulted in VIP Industries offering discounts and unwittingly
entering into a disastrous price war. Promotion of a high visibility product suffered and advertising
expenditure has been ruthlessly curtailed from the earlier Rs.11 crore to Rs.2 crore now. Its lead
advertising agency is HTA. Action on the promotion front has seen reorganization of the brand portfolio.
Incidentally, earlier its successful and popular Kal bhi Aaj bhi campaign served to reinforce its durability
theme.
There are several roadblocks that the company has to negotiate. Increase in population, rising
propensity of Indians to travel, and the insatiable thirst of customers for state-of-the-art technological
products with newer designs and innovation, all at an affordable price are the opportunities and challenges
before the company. Introduction of new brands, Mantra and Skybags, product range diversification to
include childrens bags and ladies bags, strategic alliance with Europes leading luggage-maker Delsey
are some of the steps taken by the company.
Yet, caught in its self spun web of past successes, VIP is today faced with an uncertain future.

Question :
How should the VIP Industries get out of the bind that it finds itself in ? Outline the contours of the
marketing plans and policies that VIP needs to formulate and implement ?

Incentives at Sagar Ratna


Sekhar and sagar owned and operated Sagar Ratna Hotel since it opened in 1995. By 2005, the hotel
expanded its operation considerately and now boasts of having four hotels in major commercial location
in Delhi.Sekhar was incharge of human resources,finance and marketing. Sankar ran hotel operations,
including house keeping, the grounds and fools and beverages.Sekhar often commented,"I reward the
contributions of people, not their hours of work". Sankar was in complete agreement with his brother in
this regard. This philosophy found expression through a variety of incentives introduced by Sekhar
himself for improving the living standards of workers. Although, he strongly supported such incentive
schemes, Sekhar hired a local consulting firm to comment up on his programme and offer
recommendation's for further improvement.
To assist the consulting firm, the brothers wrote down the major features of each incentives programme
thus:
- Executives get one percent of profit of each quarter.
- When the occupancy level reaches 95 percent, hourly employees get a complementary lunch in the
hotel.
- House Keepers are paid the minimum wage plus RS.50 each cleaned room that meets the hotels'15-poin
checklist'.
- Reservations clerks are also paid the minimun wage but get RS.5 for each reservation they book.

Questions:
(a) What problems would you see with incentives for
1. Executives
2. Hourly workers
3. Housekeepers and reservationists.

(b) If you were a member of the consulting team, wthat incentive would you recommend for each group.

Case study:

MTA is the latest addition in telecom sector offering CDMA service. Its main competitors are
BSNL, TATA Indicom, reliance and virgin. Devise a launch strategy with specific focus on product
availability and more visibility also chart out a plan to compete with the leaders.