s

GROUP 4 (SECTION E)
MARKETING MANAGEMENT I
Abhay Patade (PGP/19/274)
Aditya Sonthalia (PGP/19/244)
Divya Nayak (PGP/19/254)
Kaustubh Tirpude (PGP/19/264)
Seerat Gupta (PGP/19/284)

1. What sales goal for the Nano you will recommend?

Year
1
2
3

Sales
Goal(Qty.)
50,000
50,000
3,50,000

Explanation

Supply Constraint, 1309300(Cars) + 6529829(Bikes)= 7839129*

Supply Constraint, 1545223(Cars) +7608697(Bikes)= 91538920*
New production Facility, 1777583(Cars) + 8466666(Bikes)=
10244249*
4
3,50,000
New production Facility, 1838593(Cars) + 8026681(Bikes)=
9865274*
*Assumption is that the owners change bikes every 5 years and cars every 4 years.

Sales Target
(%)
0.60%
0.54%
3.41%
3.54%

2. How will you position NANO to achieve that goal?

In order to determine best positioning strategy, a SWOT analysis for Tata Nano is given below:
As per the case, the problem lies in the positioning strategy of the product Tata Nano. Following are
the three viable options for its positioning:

II

Safe and Comfortable Family Transport

Ultra Low Price Car
Stylish and Manoeuvrable among four-wheelers
STRENGTHS:
Low Price, Similar Features- Tata Nano has been priced lowest in its product segment
(Early Entry) with comparable features. (Rs. 1,00,000/- to Rs. 1,81,438/-)
Fuel Efficient- When compared with Maruti 800 (Major Competition), Tata Nano has
better mileage because of lower engine displacement and lower weight.
Manoeuvrable- Since Nano has lower turning radius of 4 meters as compared to 4.4
meters of Maruti 800, it has better manoeuvrability.
Stylish- Inherently designed to be stylish in its segment (Market Competency)
WEAKNESSES:
Production Shortages- Due to Singur issue, estimated production of 3,50,000 was
reduced to actual production of 50,000, very low as compared to actual demand.
Inadequate Distribution Systema) Due to demand supply mismatch, Tata introduced the lottery system for sale
purposes. Despite this fact, customers were asked to pay almost the full price
beforehand which may lead to their dissatisfaction. (Target segment is lower income
group with disposable income of Rs. 34,000/- to Rs. 1,70,000/-)
b) In rural areas, independent contractors were asked to assemble the car which
resulted in no warranty for the buyers.

III.

OPPORTUNITIES:
Vast Market Potential- 12 out of 1000 people own a car in India which shows a huge
untapped market for low priced cars.
Also 76% of total vehicles sales correspond to two wheelers out of which 80% are
distributed amongst Hero Motocorp. Bajaj Auto, TVS Motors.

IV.

THREATS:

Low Dealer Margin- The dealers margin is less (2-3%) as compared to other models (410%), hence they would be less motivated to sell. Moreover, manufacturers margin is
speculated to be around 15% which leads to further resentment.
Competitions
a Possible entrant of new models from competitors like Maruti, Hyundai, Habib
Motors, Renault Nissan, Toyota and Ford. They would provide better features at
slightly differing price.
b Biggest competition from Maruti 800. A well-established brand among Indian
families with 26 years of excellence.
c High competition from two wheelers due to their low maintenance, high mileage
and better manoeuvrability.
Tough to capture middle class customers due to their high bargaining power.
Low price would lead to more cars on road, thereby leading to more air pollution
which is at odds with Tatas green initiative
Conclusion:
On the basis of the above-mentioned analysis we recommend Tata Nano to be positioned as an ultralow priced and a safe family car. It will cater to the growing middle class population with disposable
income ranging from Rs. 34,000/- to Rs. 1,70,000/-. Also it will attract families who are restricted by
the tow-wheeler.

3. Why is the recommended positioning strategy superior to other positioning strategies that might
reasonably be considered?
The above strategy is recommended against other reasonable strategies which leverage styling and
manoeuvrability because its differentiating factor lies in its ultra-low price. The target segment that
relies on the styling and manoeuvrability (college students) may not prefer the less manoeuvrable car.