NANO-“A Dream car for the poor”

DECISION PROBLEM: How to provide a better LOW COST safer

option for an Indian family who never dreamed of owning a

safe ,personal, affordable car earlier?

Reasons for producing this small car

1) Increased road accidents due to unsafe two wheeler ride.

2) A car have a more emotional and social appeal rather than rational

appeal.

3) A small car is the need of the growing Indian society. Every Indian

who owns a bike or scooter want to own a small car at slightly

higher rate than bike because of safety and comfort for whole

family.

4) A small car if high in mileage will become more popular in Indian

over crowdie cities with a launch from first day because of rapid

increasing high oil prices and less available parking space.

Other major issues:

1) How to produce a 1 lakh rupees car for a middle class income

family group without compromising his safety, mileage and

performance features .

2) How to lower down the distribution and transportation cost?

3) How to make it environment friendly ?

4) How to Maximize its mileage due to pressure of growing oil prices?

5) Will Nano will increase traffic further in Indian roads?

6) Whether this kind of car will be proved as an alternative of a bike?

7) How TATA will cater the vast latent demand with limited capacity

of their plants?

Macro- environment analysis :

A)Technological:

Fuel efficient, compact cars are in fashion India - global hub for small cars.

RND increased for battery operated cars.

Indian automobile engg. has shown their stuff by producing nano in 1 lakh rupees against

increasing steel prices .

Onsite assembling , glue used to connect components.

B) Social :

Urbanization and less available public transportation is increasing necessity of personal cars.

Car is seen as a status symbol and have an emotional appeal.

Bad Quality of roads and clogging of cities is common problem in India.

Less available parking space.

C) Economical:

1. Indian consumer is upgraded in terms of income level.

2. poor consumers are seen as an opportunity ,

3. India will grew fifth largest market by 2015.

4. In India 59% consumption dominated by middle class people.

D) Legal:

1. global warming and pollution are a serious concern

2. bharat 3 & euro 4 norms are necessary for car manufacturers

3. 630cc below cars are having tax exemptions.

Swot analysis of TATA MOTORS

strength:

1) Innovative out of box thinking

2) Strong leadership of RNT

3) Efficient supply chain

4) Vendor relationship and development

5) Strong R&D department

6) Dedicated & loyal personnel.

7) Shown its strength in producing world’s smallest and cheapest car.

8) Trusted brand

Weakness:

1)The TATA Motors company has also acquired brand Jaguar who is

targeting premium class people while NANO is targeting middle

class low income customers so it can dilute the Jaguar brand

expectations.

2) The safety can be another aspect in which customers can be

doubtful specially in terms of NANO car.

3) The TATA company has no hands on experience of producing

premium segment cars so in this segment if they will expand may

get failure.

Opportunities:

1) Global market like India ,China, Latin- America, Former East

Europe and Asia.

2) Growing population of middle class who will control the largest

block of income in the country at 19 trillion rupees or 44 percent of

total income.

3) Indian market aspirations are increasing because of economic

opportunities fuelled by information, telecommunication and

internet revolution. Now Every Indian who is using two wheeler

can easily purchase the car who has a strong emotional appeal in

Indian society.

Threats:

o Battery and electric operated small car are the existing

threat from countries like France ,Japan and Germany

o Bajaj auto Ltd,Renault Nissan, Toyota ,Ford motor

India an Maruti Suzuki are also going to produce space

saving fuel efficient car.

SWOT analysis of TATA NANO:

Strengths: all weather vehicle, brand name, style, mileage,

price( product innovation)

Weakness: fiber body, low suspension power, light vehicle (not

suitable for hilly areas)

Opportunity: bikers can be motivated, auto rickshaw holders can be

motivated

Threats: New entrants like spark, and smart battery /electric cars.

Subject matter analysis / strategies:

The Tata company has used low cost innovative strategy for developing this NANO car

Target market:- Executive two wheeler segment , Second hand car user, middle and lower income

group

1) Understanding the customer needs (better safety and Mileage, less parking space, emotional -

attachment, status symbol for rural people)

2) Highlighting the low cost price feature while marketing it ( dream car for poor)

3) Invited the national and international media for coverage the launch of NANO.(CNBC,BBC etc.)

4) Operational excellence through supply chain management

Low cost advertising strategy

1) publicized as peoples car

2) Geneva and New Delhi auto expo

3) word of mouth and internet or viral marketing is enough for creating

awareness.

5) Vendor development and reengineering

6) Internal marketing (Mr. Ravikant was assigned the task to

motivate product development team.)

Nano community, Nano diaries etc. are prepared to share experiences and reduce doubts of customers. Orkut, face book and YouTube are used as means to advertise the Nano.

Recommendations:

Focus should be on service to meet post purchase service needs. New

Variant like E-Nano can become better alternative in future (increased

mileage and low emission).

Lottery system should be used to predict exact demand.

Can do joint venture with some other leading auto companies for meeting

the Indian consumer’s latent need of Nano immediately.

Battery operated vehicles are the future of India so product research

should be necessary on that direction also.

They have two plants for NANO production which are located at pant

nagar (Uttaranchal) and sanand (Gujarat).Transportation cost of Nano will

reduce majorly if they establish plants at other different locations.