Re: Marketing Lessons From Tata Nano

Here are a few marketing fundas that can be observed from the failure of the Tata Nano Campaign.
Avinash Tavares
Management Trainer & Life Coach
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very true...a great post! These are the reasons everybody can relate to and had the company thought like a first time buyer they would not have built this car just for the sake of it.

I think you have missed the biggest point about the TATAs. They have never been traditionally aggressive and pushy in their sales strategy for any of their products or services so far.

Also, I think you missed weighing the global inflation trends in your argument which has had a huge bearing on the cost of material which never helped TATA's strategy of having a reverse priced product for a price sensitive market like ours. A reversed priced product is where the price of the product is decided first, the quality of the materials used and technology in general are worked backwards to provide a quality which is better or at least equivalent in the existing market.

A reversed priced product is generally good in markets which do not experience very high rate of inflation. However today, the high rate of inflation is a global reality across all regions.

Therefore, it looks as if TATA NANO "reneged on the promise" of making a car worth a Lac since the price of the car now is almost double the initial launch price. It is priced at around Rs.2.20lacs which is almost the price of a maruti 800 back then, therefore beating the whole idea of NANO being a cheap car.

Besides, I think you must check the source of your mileage facts. Tata Nano gives around 23KMPL better amongst its peers such as ALTO, SPARK, etc.

Avinash has got most of his facts wrong
i dont know from where he concluded "First time buyers want to own a big car
even if it is a second-hand car."
If this would have been the case then M800 or Alto would not be the #1 seller in India for such a long time.
Facts about mileage and air-conditioning is also not correct.

Eventhough nano is the failure model,its affordable by most of the middle class society. its comfortable for four members in the family.can even be termed as status symbol....not that bad......but cannot be compared with other luxurious cars...Initially people were really overwhelmed by its marketing and its low price but now drastically increased by 2 lakhs is depressing...
Regards
Raje

The positioning at first was " aam admiees car" or Peoples car.. One Lac was a magican affordable price with so much of value addtions for the owners. second as Raje mentoined it is depressing to note the price increase.
A TATA product is really good, however the ads, promotion, lounch itself was not well planned. and the ststus symbol factor was missing...

On my opinion, TATA's failure on the promise of releasing a car for rupees one lakh is the major setback for the Car.

I completely agree that Nano gives the higher mileage compared to an alto etc. Do not get me wrong, the nano is an exceptionally well designed car. It simplicity and functionality as a small car is unmatched.
My goal with this ppt was to highlight poor marketing of a great product. Initially the nano was marketed/proposed as a replacement for the family two wheeler. That in my view was a mistake. I could be wrong, but in my view this is a city car - easy maneuverability, less parking and yes high mileage for a 4 wheeler. Instead, in the tv commercial, they have shown it as a village car.
It is indisputable that every one who wants a car wants a sedan. As of now, the biggest competition for a nano in terms of price is a second-hand alto/wagon r. Not that they are big car, but they are "perceived" as safe and value for money.

Again your conclusion of Tata having a poor marketing campaign is possibly a premature and a misplaced conclusion.
Again its very disputable to say everyone is looking to buy a sedan. The pressure on space and parking is a huge reality. I think you must see how it is in the UK. Hatchbacks outstrips the sedan any day.
Given a 60,000KM warranty for a new car with a BS 1V compliant engine for a first time car buyers is a huge value addition than buying a second car ALTO/WAGON R which is already clocked those many miles.
I think you have missed the 60,000KM warranty and low down payment and installment adverts of TATA NANO.
This effectively counters the tendency to buy a second hand car and the low installment effectively masks the high price of Rs2.20 Lacs.

Sajr, I agree with that you are saying. Everyone wants a long and luxurious sedan which is why companies like Merc and BMW can charge in lacs. And, as you say, most go for a hatchback or a small car for practicality and affordability while not compromising on safety and comfort.
About the warranty and low down payments, In theory, that should result in higher sales of the Nano. I hope it does happen because increased number of Nanos on the roads will surely reduce traffic congestion, right?