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PRICING STRATEGIES for “ the people’s car ”

PRICING STRATEGIES for “ the people’s car ”. Team - Brazen. Presented by : Dr. Amrita Singh Alok Kumar Ajay Singh Anushree Pandit Gaganbir Kaur Jatin Saxena Jyoti Ishrat Batool. Development of a One lakh Car. WHAT MAKES IT SO CHEAP!.

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PRICING STRATEGIES for “ the people’s car ”

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  1. PRICING STRATEGIES for “the people’s car” Team - Brazen Presented by: Dr. Amrita Singh Alok Kumar Ajay Singh AnushreePandit GaganbirKaur JatinSaxena Jyoti IshratBatool

  2. Development of a One lakh Car

  3. WHAT MAKES IT SO CHEAP! • The TATA Nano uses plastics and adhesives rather than welding. • Partially using inexpensive polymers or biodegradable plastics instead of a full metal body. • It has no AC, no power steering, no power windows.

  4. Target Market

  5. Why should People Buy Nano.. • Low price and covers basic needs of a car. • Its look cute and attractive • Better facilities for servicing and maintenance • Easy finance

  6. But was It REALLY a 1 LAKH Rupees Car?

  7. Why the price hike? Tata said that “ expensive lending rates, higher fuel costs, and inflation hit margins during the last year is forcing us to pass on the costs to its customers.” Increasing input costs, especially that of steel and other commodities like rubber, had put pressure on margins.

  8. TATA PRICING OBJECTIVES • Survival • Maximizing market share • Keeping the price range near 1 lakh • Discouraging potential competition

  9. TATA’S PRICING STRATEGY Though the one lack tag was not fixed by TATA group, it was the word of mouth of people which fixed the range. This expectation of people creates a big challenge for the company. To accept this challenge the following strategies are followed: • Increasing market share • Penetration pricing • Low pricing policy with minimum profit margin

  10. PRICE OF VARIOUS CARS

  11. AVAILABLE FINANCING SCHEMES • Tata Motors Finance (TMF) will provide finance up to 90% for the Nano at easy rates. • the company has announced a four-year or 60,000 kilometer manufacturing warranty at no extra cost. • Loan within 48 hours • comprehensive maintenance contract at Rs. 99 per month for all new customers.

  12. Proposed pricing objectives • Survival • New market penetration • Increase the perceived value of Nano • Increase market share

  13. PROPOSED PRICING STRATEGIES • Penetration pricing • Target costing • Low pricing policy with minimum profit margin which is only 2% • Perceived value pricing • Increased market growth • Discouraged potential competition

  14. Selecting the final pricing • Influence of other marketing mix • Cash discount

  15. Price Listex showroom prices Model Nano BS IV Nano CX BS IV Nano LX BS IV Price Rs 145,000 Rs 170,078 Rs 196,956

  16. Banks

  17. PROJECTED NEW COST

  18. RECOMMENDATIONS • Through government subsidies and tax • Collaboration for loans with Gramin banks and post offices

  19. Cost effectiveness – Spare parts packages • Nano Special Outlets(NSO) discount • Decreasing down payment in rural areas

  20. Thank You

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