MARKETING MANAGEMENT II CASE ON TATA NANO

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Dream-dream and dream, because dream gives vision, vision gives thoughts and finally thoughts lead to the action". Each letter of these motivational words said by India's former President Dr. A.P.J. Abdul Kalam goes exactly with Mr. Ratan Tata, Chairman of Tata group, who in the year 2003, dreamt of producing a safe, affordable Car for the common man. Finally after the wait of five years, crossing all financial and technological barriers, Ratan Tata kept his promise and unveiled Tata 'Nano' on 10th January 2007, at the 9th Auto Expo 2008 in New Delhi. Tata Nano, cool & smart, launched by Tata Motors is world's cheapest Car with a price tag of $ 2500. The Tata Nano is a proposed city car a small, affordable, rearengined, four passenger car aimed primarily at the Indian market . The introduction of the Nano received media attention due to its targeted low price. The car was expected to boost the Indian Economy, create entrepreneurialopportunities across India, as well as expand the Indian car market by 65%. The car was envisioned by, Ratan Tata, Chairman of the Tata Group and Tata Motors, who has described it as an ecofriendly "people's car". Nano has been greatly appreciated by many sources and 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 in large quantities, particularly the electric-version, and, besides selling them in India, to also export them world-wide.

Critics of the car have questioned its safety in India, and have also criticised the pollution that it would Cause (including criticism by Nobel Peace Prize-winning scientist, Rajendra Pachaur). However, Tata Motors has promised that it would definitely release Nano's eco-friendly variants alongside the gasoline-variant.

The Singur controversy to Sanand Plant

Tata Nano Singur Controversy is the controversy generated by the Nano factory of Tata Motors at Singur in Hooghly district, West Bengal, India. The Tata Nano project was initially declared at Singur, 40 km from the West Bengal state capital Kolkata. It had turned into a battleground since March, 2006 because of a controversy. The project faced massive opposition from displaced farmers. The unwilling farmers were given political support by West Bengal's opposition leader Mamata Banerjee. Banerjee's "Save Farmland" movement. Twenty -one protest platforms have come up near the factory site.The state police force has been used to restrict their access to the area. The bone of contention is the 400-acre piece of land that was meant to construct ancillary units for the Tata factory. Faced with uncertainty regarding the prospects of its Nano project worth one lakh , Tata Motors has a tough decision to make: should it continue the project in an area where violent agitations have marred its activities and production targets or should it pull out of a project in which it has already invested around Rs. 1500 crores?

Tata pulls out

The Tatas finally decided to move out of Singur on 3 October, 2008. Ratan Tata blamed violence by Banerjee and her supporters for the pullout decision. On 7 October 2008, the Tatas announced that they would be setting up the Tata Nano plant in Sanand, Gujarat.

Tata Nano goes to Sanand, Gujarat

Tatas were allocated 1,100 acres at Chharodi and Charal villages, just 25 km from Ahmedabad.Mr. Modi and Tata group chairman Ratan Tata, addressing journalists, described the agreement as historic and hoped that after the unfortunate turmoil the project underwent in Singur, it would now have a smooth sailing. The overall climate in Gujarat has been extremely favourable to industry. That, and the fact that the general populace of the state is in favour of industrialisation were important factors in enabling Narendra Modi to allocate 1100 kilometres for the Nano project. The Sanand plant will also have the convenience of being close to Rajkot where a slew of Nano components would be made at different ancillary units

Target Market
The low-cost car is clearly intended for the masses. For the family of four that would otherwise ride on a scooter, precariously balancing a tiny tot on the front and a baby on the wifes lap. For the first-time car buyer in India - a huge market despite the increasing number of cars in the urban and semi-urban areas. Its Also attract the small cars buyers like maruti 800

Competencies of Tata Nano Tata is now 57th most valuable brand globally, 2008 The Tata groups intense activities in 2007 have seen it rising 45 places to No. 57 in Brand Finance Top 500 Global Brands Expectations According to one report, India as well as other nations, such as European nations, have great expectations from the Nano and are keenly and eagerly awaiting it, especially the electric version of the Nano. Modular design In fact, Tata envisions going even further, providing the tools for local mechanics to assemble the car in existing auto shops or even in new garages created to cater to remote rural customers. 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 Export expectation Being worlds cheapest car it is expected that not only India demand for Nano will go rise at global level. Since it meeting Euro-4 norms at this price so this is taking as a future of small car segment. Reputation and Acceptance of Tata After launch TATAs have shown the world what Indian engineering is truly capable of Enthusiastic support Tata Motors is receiving preliminary and some very enthusiastic support in the media and officials, even from Europe, for the electric-version from India as well as other-nations. The enthusiasm is even higher than that for the petrolversion

Tata Nano on fire again in similar way in Ahmedabad, 8th incidence in a row
The Peoples car surprised with news of early problems with the Tata Nano. The vehicle that's anticipated to mobilize India has been launched in its domestic market prior to being exported overseas, but three customers have already reported small fires spontaneously igniting inside the vehicle, causing the automaker to launch an investigation. The problem reportedly stems from faulty wiring in the ignition switch that has, in these three cases reported so far, caused smoke and certain parts around the steering column to melt. Two of the customers have returned their Nanos to their respective dealerships, which have repaired the problem at no charge. One buyer, however, has yet to bring his car in for repairs and has lodged a complaint with law enforcement officials. A brand new Tata Nano caught fire in Mumbai on March 21 while its owner and his family were driving it from the showroom to their home. Another brand new Nano was reduced to flames while it was being taken to the showroom in Ahmedabad on April 7.Earlier, instances of 'minor fire' were reported from vehicles in Lucknow, Delhi and Ahmedabad. According to Tata Motors, only five cars out of the 30,000 Nanos on the road were reported to have developed problems. Of these only two cars were completely burnt. The other three cars were repaired and given back to the owners. "There is no fundamental design flaw in the cars. We are carrying out an investigation into what led to the fire. We will also do a pre-emptive safety audit to ensure there are no problems," says Debasis Ray, spokesman, Tata Motors. So far, Tata isn't issuing a recall notice, but it is conducting a "pre-delivery audit" of the car's electrical systems for those still in their possession and offering to inspect those units it has already sold. The recent problems of the car catching fire spontaneously have definitely affected the reputation that a brand like Tatas has in the market. Tata could have done a Jaguar like move by taking the spoilt designs back in the warehouse and repairing them or calling off sales for a period of time to re establish trust.

A year ago, Tata Nano, the cheapest car on the planet, received rave reviews from across the world. Today, the one-year-old Nano is facing one of its toughest tests after the car burst into flames on two occasions, shocking people across the country. However, experts say it is a problem with the rear engine. "The rear engine does not have a proper cooling system as a result of which the engine heats up leading to such an incident. The summer season will be the toughest test for the Tata Nano," says Mahendra Dhruva, national president, The Institute of Insurance Surveyors and Adjusters (IISA). The fresh incident of Tata Nano catching fire might bring bad news for Tata Motors that is all set to unveil a new compact car in the Geneva Motor Show 2011 about the size of Tata Nano. Tata had aggressive plans to bring the Nano to Europe in 2011 and was working on its European and American versions to roll the US specific Nano 2011. But with a long list of Nano catching fire, the European and American version of Nano might run in rough waters and make JRD unhappy. It is noteworthy that Tata gave a clean chit to Nano last year after one Nano caught fire in Mumbai and company introduced some changes in the car. It also offered various warranty based incentives to potential buyers. Tatas plans to make Nano a dream car for two wheeler owners in the middle income group received one more jolt with the latest incident in Ahmedabad.

Tata Nano sales drop drastically

Nano sales of Tata Nano The wafer thin margins it would be making with nano was strategized basically with an aim to cater to the mass market where the company could hope to make money in the economies of scale. Unfortunately it was not a smooth drive for the company after Singur controversy. Initially it had to face with major fire accidents with its car being highlighted every now and then and had to work towards a confidence building measure which Tata Motors failed miserably and let the fire accidents become a national issue. But the bad news was about to come in the month of November2010, the company declared that the Nano sales had indeed become nano in amount and the company was able to sell only 509 cars in the month even when the overall sales for Indian auto sector rose by 45% in October 2010.The sales had dropped drastically since July2010 when Tata motors sold 9000 units of Nano, which fell to 8,103 units in August, 5,520 units in September and only

3,065 units in October. This resulted in the Tata motors overall domestic sales in the passenger vehicle segment which fell by 25% to 15,340 units from 20,706 units in the previous year. Even high segment cars like Mercedes sold more than 500 units in the festive month. So, what exactly went wrong with the much hyped Tata Nano? To start with it was a engineering marvel but had cabling problems which gave rise to problems like fire, the company didnt own up to the problem initially, but later provided an extra electrical fixture to make it more safer for the consumer. On the marketing front, the company heavily depended on publicity to make its sales and not the traditional way of advertising medium which to some extent created problems for the company. Tata Motors never advertised its Nano car in India but was always on the limelight in media and was much hyped than any other car launched in the decade. But publicity is an uncontrolled medium and when the negative publicity started Tata nano had nothing going in its favour. The segment to which the nano catered to was of those who already owned a two wheeler and the target market would eventually move towards a much safer drive in a nano. But Tata Motors never catered to the needs of this target segment by providing any finance schemes or any other benefits so that the twowheeler owner can be motivated to drive home a nano. Only after the fall in sales Tata Motors started providing up to 90% of the price though its tata Vehicle Finance Company and motivated other banks and financial institutions to provide finance. Providing Finance to purchase a Nano was also a complicated issue which the company failed to tackle for long as two-wheeler financers stayed away from financing on their terms as it was a car, whereas car manufacturers levied stricter terms and conditions of financing a nano thinking the customer would default. Data also shows that 9 out of 10 nanos booked are through loans and this made a huge impact on the sales front. The Marketing was mainly through publicity but not targeted towards the segment it catered nor it clearly defined what the edge was and product differentiation it offered. Tata Motors failed to create an environment of sense of owning an Indian Innovation, driving safe compared to motorcycle in the minds of the customers and eventually it turned out to be a low cost vehicle for the poor which kept the customers away from purchasing nano because of ego problems.

The Last but not the least in the list was the disastrous roll-out of the cars through lottery system and in a phased manner throughout the country which created a scarcity and for the customer it was a perception that Tata Nano is still being sold in lottery system, the problem on which company now addresses thorugh its advertises that nano is now available for on the spot delivery. The situation now is slowly improving by new attractive offers and marketing efforts,The december sales for nano is suppsed to cross the 5000 units mark. Tata still needs to work on its marketing front and remove the price tag factor from the consumers mind and create a positive perception of owning an Indian innovation, a safer product, high fuel efficient vehicle, and a environment friendly smart user than compared to a bike and its uniqueness to take less space to drive as well as park with bigger interior space than its competitor Suzuki 800 in India.

Important Questions
Will the Nano succeed? Is it fair to blame the Nano for the (upcoming) ills of Indian road infrastructure? What do you think? Is the Nano a car of the future? Or just another debacle waiting to happen? Would you drive one? Your Suggestions for Proper positioning of Tata Nano in the Market & its Marketing Promotion & to change peoples perception about Tata Nano as a safe car to drive.