World’s Cheapest Car- “Tata Nano” - the people’s car

1. World’s Cheapest Car- “Tata Nano” - the people’s car From: Manoj Agarwal (Roll No: 16) Neraj Luthra (Roll No: 20) Umesh Garg (Roll No: 42) Ritesh Singh (Roll No:30) Heena Gambhir (Roll No: 12) Swastika Pandey (Roll No: 46) Deepak Kumar (Roll No: ) Rupesh Pati (Roll No: )

2. Introduction Of Tata Nano “Dream-dream and dream, because dream gives vision, vision gives thoughts and finally thoughts lead to the action". By India's former President Dr. A.P.J. Abdul Kalam • Dreams also give you an idea to change yours and other life.

3. “I saw families riding around on scooters with kids standing up and mother carrying a baby and sitting pillion and decided to do something about it. It started as a quest for an affordable transportation solution” Seeds of the Dreams.

4. Executive Summary • Tata Nano is the cheapest car in the world. • It is sold in home country India around Rs 1-lakh i.e approximately USD 2000. • Tata Nano to become a “People’s car“which is affordable by almost everybody. • Tata Nano will be imported to Malaysia by Tata Industries. • There are three types of Tata Nano car available i.e. Tata Nano, Tata Nano CX and Tata Nano LX. • Due to hot weather in Malaysia, only Nano CX will be brought to Malaysia.

5. NANO

7. Design Challenge TATA Nano Overall Structure of Maruti Zen but Cost of Maruti 800 Roomy Interiors of the Ambassador

8. Specifications of Tata Nano. • The Standard Variant of the Car has a dealer price of rupees one lakh (US $2500) and is the cheapest car in the world. (Transport costs and Value-Added Taxes exclusive) • A four-door car that can seat four-five passengers. • It conforms to all the emission standards as well as the Offset and Side Crash norms followedinternationally. • It is also compliant with the Bharat 3 norm and the Euro 4 norm with respect to keeping pollution at bay. • A 33-bhp car with a 624 cc engine. • It will provide a mileage of 23 km/litre. • The Nano Car will have two variants - a Standard and twoDeluxe (Air Conditioned) versions. • There is no power steering in the car.

9. What makes it so cheap ! • The Tata Nano uses plastics and adhesives rather than welding. • Introducing the car with an artificially low price through govt-subsidies and tax-breaks, • Using vertical-integration, or partially using inexpensive polymers or biodegradable plastics instead of a full metal-body. • It has no AC, no power steering, no power windows, no power bells and whistles.

10. cont… • The Nano's boot does not open, instead the rear seats can be folded down to access the boot space. • It has a single windscreen wiper instead of the usual pair. • Its door opening lever was simplified. • It has 3 nuts on the wheels instead of the statutory 4 nuts. • It only has 1 side view mirror

12. Target market • The low-cost car is clearly intended for the masses. • For the family of four that would otherwise ride on a scooter. • Its also attracts the small cars buyers like Maruti 800, bike riders etc.

13. Personal Influences FactorsAffecting Consumer Behavior for Nano Personal Lifestyle Identification Occupation (sales Executive) Age and Family Life Cycle Stage 18- 28+ Personality & Self-Concept House Wives, College Students Economic Situation Rural & lower middle class Activities Opinions Interests

14. Characteristics Affecting Consumer Behavior for Nano Car Cultural Social Personal Psychological Buyer

15. Marketing and Other Stimuli Consumer Behavior For Nano is overall affected by: Product Price Place Promotion Economic Technological Political Cultural Buyer’s Black Box Characteristics Affecting Consumer Behavior Buyer’s Decision Process Buyer’s Response Purchase Timing Purchase Amount Product Choice Brand Choice Dealer Choice

16. Consumer decision process in buying Tata Nano HighInvolvement Low involvement Variety seeking buying behavior Complex buying behavior Significant difference Habitual buying behavior Dissonance Few differences Buying behavior For Nano : complex buying behavior 16

17. Analysis of stages in complex buying behavior Need Recognition : need for Tata Nano can be driven either by internal stimuli(desire,attitude, perception) or external stimuli(advertisements etc) Information search Evolution of alternatives Purchase decision Post purchase evaluation 17

18. HIGH LOW LOW LOW HIGH HIGH HIGH LOW LOW HIGH HIGH

19. Price Sensitivity of Demand Demand’s sensitivity to price for Nano is Less due to : Unique Value effect: Distinct product Substitute Awareness: Less awareness of substitutes Difficult Comparison: Difficult to compare competing products Higher expenditure: higher amount spent on Product as compared to total Income 19

20. POSITIONING ISSUES Positioning Nano Car Positioned Nano as a ‘low cost car’ Fought with Maruti Suzuki 800 the then market leader New paradigm: Nano has a dramatic potential as it seeks to shift most Indian families from two wheelers to four wheelers. The project itself was driven by the concern for the many families who exposed themselves to the risk of travelling frequently by two wheelers. 20

21. POSITIONING ISSUES Positioning Strategy • Combination of marketing program • Combination of various elements of the marketing mix 21

22. STRATEGIC POSITIONING INITIATIVES POSITIONING CONCEPT The desired positioning as a low cost product (brand) by lower middle class/rural buyers MARKET TARGET POSITIONING EFFECTIVENESS POSITIONING STRATEGY Management’s positioning objectives are achieved for the market target by giving right value proposition • The combination of marketing actions as “One lakh car” by mouth to mouth.Auto expo 2008,New Delhi

23. POSITIONING ISSUES Scope of Positioning Strategy • For Nano it is line of related products Tata Motors • Range of brands • Corporate name to position the product line 23

24. Targeting and Positioning Product Strategy Positioning Strategy Promotion Strategy Distribution Strategy Market Target Price Strategy

25. POSITIONING ISSUES Positioning strategies • Single-brand strategy for Nano. • One variant with different styles and color for the entire market 25

26. POSITIONING ISSUES Strategic positioning • The face of the business strategy for Nano: Increasing Income, long awaited emergence of lower middle class, most of the indians wanted to graduate from two wheelers to four wheelers for emotional reasons, safety and esteem needs. • Defined relative to competitor (Maruti Suzuki 800) and to the market • Logically and/or emotional resonant with customers and relevant to the market 26

27. STRATEGY FORMULATION • STRATEGY FORMULATION • Michael Porter’s contribution • Three generic strategies • Cost leadership • Differentiation • Focus 27

28. STRATEGY FORMULATION • COST LEADERSHIP • Focus of Nano on reducing costs since its inception. • Reduced prices • This was also achieved by: • The innovations in operations • Concentrating on the manufacturing effort for more than three years to get a breakthrough. • Distribution in form of CKT kits 28

29. STRATEGY FORMULATION Expansion of markets • Identifying new users as, : For Nano, it was first time car buyers in rural area, motorcycle rider, auto rickshaw user, second time buyer in urban areas. • Used car buyers may also turn to it. • Taxi and auto rickshaw segments may adopt the Nano. Also catering to other micro car markets outside India. 29

30. STRATEGY FORMULATION of Leader in Low cost segment (Maruti Suzuki ) • Protect market share • Vulnerable to attack • Maruti Suzuki • Dominated the 80s and early 90s • Attacked by Hyundai and Tata Motors • Focus on product launches • Indigenization • Economies of scale 30

31. STRATEGY FORMULATION IN RESPONSE TO CHALLENGER Maruti Suzuki • Focus on new products launch • Reasonable prices • Replacement schemes • Launch of True Value • Enhancing customer value Maintained market leadeship 31

32. Nano Strategy Formulation Protect market share and increase market share from its competitor by: Focusing on product launches Improvement in distribution and services Right Marketing mix High Customer delivered value Reducing post purchse dissonance Economies of scale 32

33. FINDING CUSTOMER VALUE OPPORTUNITIES Customer value analysis • Objective is to identify needs for: • New products • Improvements to existing products • Improvements in production processes • Improvements in supporting services

34. Customer Expectations Customer Satisfaction Gap OPPORTUNITIES (1) New Products (2) Improvements (3) New and Improved Processes Actual Product Performance

35. TRANSFORMATIONAL Break-through innovation – A Low cost car for the lower middle class indians, adding to their esteem with increasing income and changing consumption. LINE EXTENSION – Offering Nano in new color,style.

36. Product Life Cycle • Introduction • Low sales • High costs per customer • Negative profits • Innovator • customers • Few competitors

37. Marketing Strategies • For marketing strategy Tata had use conventional media in an unconventional manner. • Nano isn’t big on advertising. There are no TV campaign, • Only innovative use of print, radio and other media, particularly the web. • The Tata team was working on • Nano news in papers, • Nano breaks on radio, • Nano appearing in the form of messages or ticker news on TV, • Online Nano games, • Nano chat rooms on the Net, • Nano pop-ups on major websites and • Nano conversationon Facebook, Orkut and blog spaces

38. MARKETING STRATEGY OF TATA NANO SWOT Analysis • Strength • Weakness • Opportunities • Threats

39. Strengths • Price • Mileage • Style • Brand Name • First Innovation • All weather vehicle • Understanding Of indian market • High Experience

40. Weaknesses • Fiber Body • Low Suspension Power • Low engine Capacity • Light vehicle • Not suitable for hilly areas • Delay due to singur violation • Lack of experience in foreign market • Heavy import tariffs

41. Opportunities • Bikers can be motivated • Auto rickshaw • Second hand market can be motivated • Tax Benefit • Govt Subsidiary • Foreign collaboration

42. Threats • Increase price of Steel and Aluminium • Diesel , CNG or LPG fuel • Other Competitors like Bajaj, Maruti • Impact on Image in customer • Threats from Chinese manufactures

43. MARKETING STRATEGY OF TATA NANO PEST Analysis • Political • Economic • Social • Technological

44. PEST Analysis Political • Not supported by West Bangal Govt. • Shifted from Singur to Sanand (Gujrat) • Supported by Mr. Narendra Modi

45. PEST Analysis Economic • Nano is a part of TATA Motors • Living Standard is improved • Demand of Car is increased

46. PEST Analysis Social • Social Status • Accepted by Innovator users

47. PEST Analysis Technological • Tata Group has 1,400 scientists and engineers in R&D department. • Tata Nano is also compliant with the Bharat 3 norm and the Euro 4 norm with respect to keeping pollution at bay. • Tata Nano is 33-bhp car with a 624 cc engine. • Tata Nano will provide a mileage of 23 km/litter.

48. Michael Porter’s Five Force Model • Threat of New Entrants • Bargaining power of Supplier • Bargaining power of Buyers • Threat of Substitute Product or services • Degree of Rivalry

49. Threat of New Entrants

50. Bargaining Power of Buyer