MAD Designs-Blog - Tata Nano

Tata Nano

Tata Nano termed as 'People's Car' was revealed first at Delhi Auto Show 2008 and the very eye-catching fact was its price tag. It lured the middle-class consumers as it was available at Rs. 100,000.

This was Mr. Ratan Tata, the Tata Group chairman's pet project that was anticipated to transform the automobile sector face in India. Tata Nano promised a high bar that competitors could not match. This was a dream car as it was available for as less as Rs. 1 lakh.

Indians who could not afford a car were tempted and there was extensive media coverage. From day 1, Tata Nano received great media coverage until its first units were handed to its owners and this was a freezing moment for the competitors who never dreamed of anything such could ever happen.

However, Nano failed to create the required mass market. Though there were many reasons such as opposition from West Bengal in setting the factory and the Sanand site bursting into flames. Besides the resale car market also gave a stiff competition.

Marketing problems with Nano

The Tata group launched a new avatar, but the marketing problems initiated on emphasizing it as 'cheap car' than putting forward its appealing qualities.

Sir Tata dreamed to give the middle class Indian family a car so that theystopped traveling in motorcycle overloaded with family.

Land allocation proved tough. In West Bengal, protests by farmers turned so violent that Nano went to Gujarat and the car was made in a Gujarat plant. Eventually, the Rs. 100,000 target price was not met. The price now is Rs. 2.15 lakh for the basic model.

The Marketing Blunder:

The marketing campaign, too, proved counter-productive. Who likes to be identified or referred to as a poor man? This was the greatest blunder by the marketing campaign that marketed Tata Nano for being the cheapest car and was tagged as "poor man's car". This pulled away potential customers at a distance from the car.

The initial two years 2009 and 2010 showed sales of 70,000 and growing fast. Yet, this was much less in comparison to the 240,000 units as the targeted annual sales.

But disasters did not stop, some Nano cars caught fire and there were issues and allegations, shooing away majority of the prospective Nano customers.

Promotion Issues

  • Owing to excess hype for Tata Nano in the market, it was seen as 'The Cheapest Car' instead of 'The Most Affordable Car'.
  • Indian consumers buying a car or anything that will appear publicly means the very first thought is what will others think?
  • What will the neighbours think about his car and him?
  • How will this car symbolize him in his society?
  • What will people outside think when entire family is in this cheap car?

Car in India is viewed as a status symbol and the USP that "The car for every Indian" literally worked against to the extent that despite having initially heavy bookings, the sales gradually went down.

Other key issues

  • Complacency: On receiving initial booking around 200000, the company felt complacent and failed to implement new advertising strategy so that the interest towards the car was intact.
  • Unclear audience: Though Nano was targeted at a class of people who never dreamt of owning a car, it resulted into contradictory situation. The audience, the society and the media acknowledged it as 'Poor man's car' and then Ratan Tata announced it as 'affordable, all weather family car". A complete concept mismatch revealedthe thoughts ofRatan Tata and how the marketers positioned it actually.
  • Confused customers:The Rs. 1 lakh price for Nano was raised to overcome the first model negatives and thus it became expensive more than Rs. 2 lakhs. Now customers felt adding few more thousands they could get Maruti that had name and fame.

Conclusion

Referring to Tata Nano, the advertisements highlighted it as family's car and having it as the first car was a matter of pride. However, it also highlighted that it was the 'cheapest car'. The term 'cheapest car' aspect ignored the hedonic benefits of this advertisement.